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EXHIBIT NO. 10.16
SECURITIES PURCHASE AGREEMENT
dated as of
August 31, 1998
between
NEXTERA ENTERPRISES, L.L.C.
and
NEXTERA FUNDING, INC.
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SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT dated as of August 31, 1998
between NEXTERA ENTERPRISES L.L.C. and NEXTERA FUNDING, INC.
The parties hereto agree as follows:
ARTICLE
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DEFINITIONS
Section 1.1. Definitions. The following terms, as used herein,
shall have the following meanings:
"Acquisition" means each of (i) the Sibson Acquisition and (ii)
the Delphi Acquisition.
"Affiliate" means, with respect to any Person, any other Person
that, directly or indirectly, controls, is controlled by or is under common
control with such Person. For purposes of this definition, "control" including,
with correlative meanings, the terms "controlling", "controlled by" and "under
common control with", as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of that Person, whether through the ownership of voting
securities, by contract or otherwise.
"Agreement" means this Securities Purchase Agreement, as amended,
restated or otherwise modified from time to time in accordance with its terms.
"Asset Sale" means any sale, lease or other disposition
(including any such transaction effected by way of merger or consolidation) by
any Credit Party of any asset, including without limitation any sale-leaseback
transaction, but excluding (i) dispositions of inventory and used, surplus or
worn out equipment in the ordinary course of business, (ii) dispositions to a
wholly-owned Subsidiary of any Credit Party and (iii) cash payments otherwise
permitted under this Agreement.
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"Business Day" means any day except a Saturday, Sunday or other
day on which commercial banks in the City of New York are authorized or required
by law or other government action to close.
"Cash Equivalents" means (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof), (ii) time deposits and
certificates of deposit of any domestic commercial bank (including a domestic
branch of a foreign bank) whose outstanding senior long-term debt securities are
rated either A- or higher by Standard & Poor's Ratings Services or A3 or higher
by Xxxxx'x Investors Service, Inc., (iii) repurchase obligations with a term of
not more than 7 days for underlying securities of the types described in clause
(i) entered into with any bank meeting the qualifications specified in clause
(ii) above, (iv) commercial paper rated at least A-1 or the equivalent thereof
by Standard & Poor's Ratings Services or at least P-1 or the equivalent thereof
by Xxxxx'x Investors Service, Inc., maturing within one year after the date of
acquisition, and (v) investments in money market funds substantially all of
whose assets are comprised of securities of the types described in clauses (i)
through (iv) above.
"Change of Control" means such time as (a) any Member (as such
term is defined in the Nextera LLC Agreement) has sold, transferred or otherwise
disposed of, to any Person (other than (i) solely in the case of Knowledge
Enterprises, Inc. to a Person controlled by or under common control with it,
(ii) pursuant to a Qualified Transfer (as such term is defined in the Nextera
LLC Agreement) or (iii) pursuant to the Share Exchange Agreement to be entered
into in connection with the Sibson Acquisition), any of the common stock or
equity units held by such Person on the date of the Closing; or (b) a sale or
transfer of all or substantially all of the assets of the Company to any person
or group (other than any group consisting solely of the Members as of the date
hereof or persons or entities controlled by such Members) has been consummated;
or (c) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of the Company
(together with any new directors whose election was approved by a vote of a
majority of the directors then still in office, who either were directors at the
beginning of such period of whose election or nomination for the election was
previously so approved) cease for any reason to constitute a majority of the
directors of the Company then in office; provided that a Change of Control shall
not be deemed to have occurred as a result of the Nextera Incorporation.
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"Closing" means the date on which all of the conditions set forth
in Section 5.1 shall have been satisfied.
"Commission" means the Securities and Exchange Commission.
"Commitment" means the Sibson Commitment and the Delphi
Commitment, which in the aggregate shall not exceed $40,000,000.
"Company" means Nextera Enterprises, L.L.C., a Delaware limited
liability company.
"Company Corporate Documents" means the operating agreement,
articles of incorporation, by-laws or other governing organizational documents
of each Credit Party.
"Consolidated Debt" means, at any date, the Debt of the Company
and its Consolidated Subsidiaries, determined on a consolidated basis as of such
date.
"Consolidated Subsidiary" means, at any date with respect to any
Person, any Subsidiary or other entity, the accounts of which would be
consolidated with those of such Person in its consolidated financial statements
if such statements were prepared as of such date.
"Credit Party" means, individually, each one of (i) the Company,
(ii) SC/NE, (iii) Delphi (upon the occurrence of the Delphi Acquisition) and
(iv) Direct Subsidiaries of each of the foregoing; and "Credit Parties" means
all of the foregoing, taken collectively.
"Debt" of any Person means, at any date, (a) all indebtedness of
such Person for borrowed money or for the deferred purchase price of property or
services (other than current trade liabilities incurred in the ordinary course
of business) or which is evidenced by a note, bond, debenture or similar
instrument, (b) all obligations of such Person under Financing Leases, (c) all
obligations (contingent or otherwise) of such Person to reimburse any bank or
other Person in respect of amounts paid under a letter of credit or similar
instrument, (d) all Derivatives Obligations of such Person, (e) all Guarantee
Obligations of such Person in respect of Debt of any other Person and (f) all
liabilities of the types described in clauses (a) through (e) above secured by
any Lien on any property owned by such Person even though such person has not
assumed or otherwise become liable for the payment thereof.
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"Debt Incurrence" means any incurrence by any Credit Party of any
Debt (including without limitation pursuant to the Permanent Financing), other
than Debt permitted under Section 6.8(c).
"Default" means any Event of Default or any event or condition
which, with the giving of notice or lapse of time or both, would, unless cured
or waived, become an Event of Default.
"Delphi" means Delphi Consulting Group, Inc., a Massachusetts
corporation.
"Delphi Acquisition" means the acquisition of substantially all
of the assets of Delphi pursuant to and in accordance with the Delphi Purchase
Agreement.
"Delphi Commitment" means subject to Section 2.1, $2,500,000, the
obligation of Purchaser to purchase Notes hereunder in an aggregate principal
amount at any time outstanding not to exceed such amount, as such amount may be
reduced from time to time pursuant to Sections 2.4 and 2.5.
"Delphi Purchase Agreement" means the Asset Purchase Agreement to
be entered into by and among Delphi, Delphi Consulting Group, L.L.C., the
Company and the holders of capital stock of Delphi identified on Exhibit A-1
thereto, as amended, supplemented or otherwise modified from time to time in
accordance with the terms hereof.
"Derivatives Obligations" of any Person means all obligations of
such Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
the foregoing transactions) or any combination of the foregoing transactions.
"Direct Subsidiary" means, with respect to any Person, any
corporation or other entity of which a majority of the capital stock or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions are at the time
directly owned by such Person.
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"DLJSC" means Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation, a Delaware corporation, and its successors.
"dollars" or "$" mean lawful currency of the United States of
America.
"Domestic Taxes" has the meaning set forth in Section 2.8(a).
"Engagement Letter" means an engagement letter between the
Company and DLJSC pursuant to which DLJSC shall be engaged as lead investment
banker for the Credit Parties for the period as set forth therein.
"Environmental Laws" means any and all statutes, laws, judicial
decisions, regulations, ordinances, rules, judgments, orders, decrees, codes,
plans, injunctions, permits, concessions, grants, franchises, licenses and
governmental restrictions, whether now or hereafter in effect, relating to human
health, the environment or to emissions, discharges or releases or pollutants,
contaminants, Hazardous Materials or wastes into the environment, including
ambient air, surface water, ground water or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, Hazardous Materials or wastes
or the clean-up or other remediation thereof.
"Equity Issuance" means the issuance of any equity securities by
any Credit Party (including without limitation any equity securities issued
pursuant to the exercise of stock options or warrants or the Permanent
Financing), but excluding equity securities issued to any other Credit Party,
equity securities issued pursuant to employee stock options and equity
securities issued pursuant to the Nextera Incorporation.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, or any successor statute.
"ERISA Group" means the Company and each Subsidiary, and all
members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control which, together with the
Company or any Subsidiary, are treated as a single employer under Section 414 of
the Internal Revenue Code.
"Event of Default" has the meaning set forth in Section 7.1.
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"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Expiration Date" has the meaning set forth in Section 2.1(b).
"Financing Documents" means this Agreement, the Notes, the
Security Documents, the Subordination Agreement and the Subsidiary Guaranties.
"Financing Lease" means any lease of property, real or personal,
the obligations or the lessee in respect of which are required in accordance
with GAAP to be capitalized on a balance sheet of the lessee.
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States of America.
"Guarantee Obligation" means as to any Person (the "guaranteeing
person"), without duplication, any obligation of (a) the guaranteeing person or
(b) another Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has issued a
reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Debt, leases, dividends or other
obligations (the "primary obligations") of any other third Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of the guaranteeing person whether or not contingent,
(i) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply funds (1) for the
purchase or payment of any such primary obligation or (2) to maintain working
capital or equity capital or the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation against loss in respect thereof, provided, however, that
the term Guarantee Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business or the guaranty
obligation of any primary obligation which does not constitute Debt. The amount
of any Guarantee Obligation of any guaranteeing person shall be deemed to be the
lower of (a) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee Obligation is made and (b) the
maximum amount for which such guaranteeing person may be liable pursuant to the
terms of the instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person may be
liable are not stated or determinable, in which
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case the amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined by
such Person in good faith.
"Hazardous Materials" means (i) asbestos; (ii) polychlorinated
biphenyls; (iii) petroleum, its derivatives, by-products and other hydrocarbons;
and (iv) any other toxic, radioactive, caustic or otherwise hazardous substance
regulated under Environmental Laws.
"Hazardous Materials Contamination" means contamination (whether
now existing or hereafter occurring) of the improvements, buildings, facilities,
personalty, soil, groundwater, air or other elements on or of the relevant
property by Hazardous Materials, or any derivatives thereof, or on or of any
other property as a result of Hazardous Materials, or any derivatives thereof,
generated on, emanating from or disposed of in connection with the relevant
property.
"Holder" means any holder of any Note.
"Initial Takedown" means the first Takedown hereunder.
"Interest Payment Date" means the last day of each Interest
Period (or, if any such date is not a Business Day, the next succeeding Business
Day).
"Interest Period" shall mean the period from the date of this
Agreement to but excluding the 90th day thereafter, and thereafter each
successive 90-day period. If any Interest Period would begin or end on a date
which is not a Business Day (as defined below), such Interest Period shall
begin or end, as the case may be, on the next succeeding Business Day and any
Interest Period that would extend beyond the Maturity Date shall end on the
Maturity Date. Purchaser may, in its discretion, select Interest Periods of one
day for any day on or after the Notes shall have become due and payable in
accordance with the terms hereof.
"Investment" means, without duplication, any investment in any
Person, whether by means of share purchase, capital contribution, loan, time
deposit or otherwise.
"Internal Revenue Code" means the Internal Revenue Code of 1986,
as amended, or any successor statute.
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"KU Debt" means, collectively, (i) the Debenture dated March 20,
1997, executed by the Company in favor of Nextera Enterprises Holdings, L.L.C.
in the original principal amount of up to $23,000,000 and (ii) the Debenture
dated January 5, 1998, executed by the Company in favor of Nextera Enterprises
Holdings, L.L.C. in the original principal amount of up to $24,970,000.
"LIBOR Rate" with respect to each Interest Period, shall mean for
any day, as determined by Purchaser, the interest rate per annum offered for
deposits in dollars for the Interest Period in the London interbank market which
appears on Telerate Page 3750 or such other page as may replace Telerate Page
3750 on that service or such other service or services as may be nominated by
the British Bankers' Association for the purpose of displaying such rate
(collectively, "Telerate Page 3750") as of 11:00 A.M. London time on the second
Business Day prior to any such date. If the Interest Period is of a duration
falling between the Interest Periods for which such rates appear on Telerate
Page 3750, the LIBOR Rate shall be the rate determined by interpolation between
the rates for the next shorter and the next longer Interest Periods for which
such rate appears on Telerate Page 3750, as determined by Purchaser, whose
determination shall be conclusive in the absence of manifest error. In the event
that (i) more than one such LIBOR Rate is provided, the average of such rates
shall apply or (ii) no such LIBOR Rate is published, then the LIBOR Rate shall
be determined from such comparable financial reporting company as Purchaser, in
its discretion, shall determine.
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement) and any
other arrangement having substantially the same economic effect as any of the
foregoing.
"Majority Holders" means (i) at any time prior to the issuance of
the Notes, Purchaser and (ii) at any time thereafter, the holders of more than
50% in aggregate principal outstanding amount of Notes at such time.
"Material Acquisition Documents" means the Sibson US Asset
Purchase Agreement including all Exhibits thereto, the Sibson Canada Share
Purchase Agreement including all Exhibits thereto, the Delphi Purchase Agreement
including all Exhibits thereto and the Side Letter dated August 31, 1998 from
Sibson US to the Company regarding disclosure schedules to the Sibson US Asset
Purchase Agreement.
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"Material Adverse Effect" means a material adverse affect on the
assets, business, financial position, results of operations or prospects of (i)
the Company and its Subsidiaries (taken as a whole), (ii) SC/NE and its
Subsidiaries (taken as a whole), (iii) Delphi and its Subsidiaries (taken as a
whole) or (iv) the validity or enforceability of this Agreement or any of the
other Financing Documents or the rights and remedies of the Purchaser hereunder
or thereunder.
"Material Plan" means at any time a Plan or Plans having
aggregate Unfunded Liabilities in excess of $100,000.
"Maturity Date" means March 1, 1999.
"Multiemployer Plan" means at any time an employee pension
benefit plan within the meaning of Section 4001(a)(3) of ERISA to which any
member of the ERISA Group is then making or accruing an obligation to make
contributions or has within the preceding five plan years made contributions,
including for these purposes any Person which ceased to be a member of the ERISA
Group during such five year period.
"Net Cash Proceeds" means, with respect to any transaction, an
amount equal to the cash proceeds received by any Credit Party from or in
respect of such transaction (including any cash proceeds received as income or
other proceeds of any non-cash proceeds of such transaction), less (i) any
expenses (including commissions) reasonably incurred by any Credit Party in
respect of such transaction, (ii) the amount of any Debt secured by a Lien on a
related asset and discharged from the proceeds of such transaction; (iii) any
taxes paid or payable by any Credit Party with respect to such transaction (as
reasonably estimated by such Credit Party's chief financial officer in good
faith) and (iv) appropriate amounts, reasonably determined by the Credit Party
in accordance with GAAP, as a reserve against any liabilities retained by such
Credit Party with respect to such transaction.
"Nextera Incorporation" shall have the same meaning as
"Incorporation Transaction" as set forth in the Share Exchange Agreement in the
form of Exhibit N to the Sibson US Asset Purchase Agreement.
"Nextera LLC Agreement " means the Second Amended and Restated
Limited Liability Company Agreement of Nextera Enterprises, L.L.C. dated as of
May 1, 1998, as amended through the date hereof.
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"Notes" means the Senior Secured Notes issued by the Company
substantially in the form set forth as Exhibit A hereto.
"Other Taxes" has the meaning set forth in Section 2.8(a).
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Permanent Financing" means any Debt Incurrence or Equity
Issuance following the date hereof for the purpose of refinancing the Notes.
"Permits" means all domestic and foreign licenses, permits and
approvals required for the full operation of the Company and its Subsidiaries,
taken as a whole, including, without limitation, provincial, state, federal,
city and county permits and approvals.
"Permitted Liens" means Liens expressly permitted to exist by the
terms of Section 6.11 hereof.
"Permitted Transferee" means any Person that acquires Notes other
than any Person who acquires such Notes (i) in a public offering or (ii) in the
open market pursuant to sales under Rule 144 of Securities Act or otherwise.
"Person" means an individual or a corporation, partnership,
trust, incorporated or unincorporated association, joint venture, joint stock
company, government (or any agency or political subdivision thereof) or other
entity of any kind.
"Plan" means at any time an employee pension benefit plan (other
than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to
the minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person which
was at such time a member of the ERISA Group for employees of any Person which
was at such time a member of the ERISA Group.
"Purchase Agreements" means, collectively, each of (i) the Sibson
US Asset Purchase Agreement, (ii) the Sibson Canada Share Purchase Agreement and
(iii) the Delphi Purchase Agreement.
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"Purchaser" means Nextera Funding, Inc., a Delaware corporation,
and its successors.
"Restricted Payment" means, with respect to any Person (i) any
divi dend or other distribution on any shares of the capital stock of such
Person (except dividends payable solely in shares of capital stock of the same
class of such Person) (ii) any payment on account of the purchase, redemption,
retirement or acquisition of (a) any shares of the capital stock of such Person
or (b) any option, warrant or other right to acquire such Person's shares of the
capital stock or (iii) any loan, advance or other payment to any Person or its
Affiliate owning any capital stock of such Person.
"SC/NE" means SC/NE, LLC, a Delaware limited liability company.
"Second Takedown" means the second Takedown hereunder.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Agreement" means each Security and Pledge Agreement
executed by each of the Company and the Subsidiaries of the Company,
substantially in the form set forth as Exhibit D hereto.
"Security Documents" means, collectively, the Security Agreements
and uniform commercial code financing statements executed pursuant hereto.
"Sibson" means each of (i) Sibson US and (ii) Sibson Canada.
"Sibson Acquisition" means each of (i) the Sibson US Acquisition
and (ii) the Sibson Canada Acquisition.
"Sibson Purchase Agreements" means, collectively, the Sibson US
Asset Purchase Agreement and the Sibson Canada Share Purchase Agreement.
"Sibson Canada" means Sibson Canada Inc., a corporation organized
under the laws of Canada.
"Sibson Canada Acquisition" means the acquisition of all of the
capital stock of Sibson Canada pursuant to and in accordance with the Sibson
Canada Share Purchase Agreement.
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"Sibson Canada Share Purchase Agreement" means the Share Purchase
Agreement dated August 31, 1998, by and among the Company, Sibson Acquisition
Co., a newly formed Nova Scotia unlimited liability company, and the holders of
all of the outstanding capital stock of Sibson Canada, as amended, supplemented
or otherwise modified from time to time in accordance with the terms hereof.
"Sibson Commitment" means subject to Section 2.1, $38,000,000,
the obligation of Purchaser to purchase Notes hereunder in an aggregate
principal amount at any time outstanding not to exceed such amount, as such
amount may be reduced from time to time pursuant to Sections 2.4 and 2.5.
"Sibson US" means Sibson & Company, L.P., a Delaware limited
partnership.
"Sibson US Acquisition" means the acquisition of substantially
all of the assets of Sibson US pursuant to and in accordance with the Sibson US
Asset Purchase Agreement.
"Sibson US Asset Purchase Agreement" means the Asset Purchase
Agreement dated August 31, 1998, by and among SC/NE, the Company, Sibson, Sibson
& Company, Inc., SC2, Inc., the holders of the capital stock of Sibson &
Company, Inc. identified on Exhibit A thereto and the holders of the capital
stock of SC2, Inc. identified on Exhibit A thereto, as amended, supplemented or
otherwise modified from time to time in accordance with the terms hereof.
"Solvent" as to any Person shall mean that (i) the sum of the
assets of such Person, both at a fair valuation and at present fair salable
value, will exceed its liabilities, including contingent liabilities, (ii) such
Person will have sufficient capital with which to conduct its business as
presently conducted and as proposed to be conducted and (iii) such Person has
not incurred debts, and does not intend to incur debts, beyond its ability to
pay such debts as they mature. For purposes of this definition, "debt" means any
liability on a claim, and "claim" means (x) a right to payment, whether or not
such right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured, or
unsecured, or (y) a right to an equitable remedy for breach of performance if
such breach gives rise to a payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured, or unsecured. With respect to any such contingent
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liabilities, such liabilities shall be computed at the amount which, in light of
all the facts and circumstances existing at the time, represents the amount
which can reasonably be expected to become an actual or matured liability net of
reasonably expected reimbursements.
"Subordination Agreement" means the Subordination Agreement
executed by the holder of the KU Debt, substantially in the form of Exhibit E
hereto.
"Subsidiary" means, with respect to any Person, any corporation
or other entity of which a majority of the capital stock or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are at the time directly
or indirectly owned by such Person.
"Subsidiary Debt" means, collectively, the bank facilities to
which each of Symmetrix, Inc., SGM Consulting, L.L.C. (d/b/a Sigma Consulting),
Pyramid Imaging, Inc. and Sibson is a party in the amounts and with the lenders
listed on Schedule 5.1(e).
"Subsidiary Guaranty" means each Subsidiary Guaranty in the form
of Exhibit C executed by each Subsidiary of the Company and delivered pursuant
to this Agreement.
"Takedown" has the meaning set forth in Section 2.2(a).
"Taxes" has the meaning set forth in Section 2.8(a).
"Transfer" means any disposition of Notes that would constitute a
sale thereof under the Securities Act.
"Unfunded Liabilities" means, with respect to any Plan at any
time, the amount (if any) by which (i) the present value of all benefits under
such Plan exceeds (ii) the fair market value of all Plan assets allocable to
such benefits (excluding any accrued but unpaid contributions), all determined
as of the then most recent valuation date for such Plan, but only to the extent
that such excess represents a potential liability of a member of the ERISA Group
to the PBGC or any other Person under Title IV of ERISA.
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Section 1.2. Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP applied on a consistent basis (except for changes concurred
in by the Company's independent public accountants).
ARTICLE II
PURCHASE AND SALE OF SECURITIES, TERMS OF SECURITIES
Section 2.1. Commitment to Purchase. (a) Subject to the terms and
conditions set forth herein and in reliance on the representations and
warranties contained herein and in the other Financing Documents, the Company
may at its option issue and sell, and Purchaser agrees to purchase, Notes in an
aggregate principal amount not to exceed $40,000,000. The purchase price for the
Notes shall be 100% of the principal amount thereof.
(b) Termination of Commitment. Each of the Sibson Commitment and
the Delphi Commitment will terminate on the earliest of (i) the termination of
the Sibson Purchase Agreements and the Delphi Purchase Agreement, respectively,
in accordance with the terms thereof prior to the consummation of the respective
Sibson Acquisition and Delphi Acquisition, (ii) the delivery by the Company of a
notice of termination of such obligation of Purchaser, (iii) the consummation of
the Sibson Acquisition and the Delphi Acquisition, respectively (if such date
occurs prior to the date of any Takedown), (iv) the date on which any Credit
Party commences the marketing of any proposed Permanent Financing with respect
to which DLJSC or any of its affiliates is not the lead manager or lead agent or
lead underwriter, as the case may be or (v) in the case of the Sibson
Commitment, 5:00 PM New York City time on August 31, 1998 if the Closing has not
occurred by such time (such earliest date, the "Expiration Date"); provided that
if at any time on or after the date hereof an Event of Default shall have
occurred and be continuing, Purchaser may at its option terminate any Commitment
by notice to the Company, such termination to be effective upon the giving of
such notice; and provided further that the Commitment shall automatically
terminate, without notice to the Company or any other action on the part of
Purchaser, upon the occurrence of any of the events specified in Sections 7.1(e)
and 7.1(f) with respect to any Credit Party.
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(c) The Commitment is not revolving in nature, and principal
amounts of Notes prepaid in accordance with Section 2.7 may not be resold to
Purchaser hereunder.
Section 2.2. Takedown Procedures. (a) Notice. The Company shall
give Purchaser written notice not later than 11:00 AM (New York City time) two
Business Days prior to the proposed purchase and sale of Notes hereunder (each,
a "Takedown"), which notice shall specify the principal amount of Notes to be
purchased and sold at such Takedown (which amount shall be in multiples of
$500,000 and shall not be less than $2,000,000) and the date of such Takedown
(which shall be a Business Day). There shall be up to two (2) Takedowns and each
Takedown shall occur on or prior to the Maturity Date.
(b) Funding. On the date of each Takedown, Purchaser shall
deliver by wire transfer, to the account number of the Company specified by the
Company in writing no later than 2:00 PM (New York City time) two Business Days
prior to the date of such Takedown, immediately available funds in an amount
equal to the aggregate purchase price of the Notes to be purchased by Purchaser
hereunder on such date, less the aggregate amount of fees payable by the Company
to Purchaser on such date pursuant to Section 2.3 and expenses (if any) payable
to Purchaser on such date pursuant to Section 9.4.
(c) Delivery of Notes. At each Takedown, against payment as set
forth in subsection (b) of this Section 2.2, the Company shall deliver to
Purchaser a single Note representing the aggregate principal amount of Notes to
be purchased at such Takedown registered in the name of Purchaser, or, if
requested by Purchaser, separate Notes in such other denominations and
registered in such name or names as shall be designated by Purchaser by notice
to the Company at least two Business Days prior to the date of such Takedown.
Section 2.3. Fees. (a) Commitment Fee. Subject to subsection (c)
below, the Company shall pay Purchaser a commitment fee in the amount equal to
one percent (1.00%) of the maximum principal amount of the Notes subject to the
Commitment (the "Commitment Fee"), which shall be fully earned upon the
execution and delivery of this Agreement by the parties hereto and shall be
payable in full in dollars on the earlier of (i) the date of the consummation of
any Acquisition (regardless of whether any Takedown has occurred on or prior to
such date), (ii) the closing of any other transaction or series of transactions
in which any Credit Party or any of its affiliates acquires or recapitalizes
Sibson or Delphi within the next two
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years or (iii) the payment to the Credit Parties of any break-up fee pursuant to
any Purchase Agreement.
(b) Takedown Fee. Subject to subsection (c) below, on the date of
each Takedown hereunder, the Company shall pay to Purchaser a takedown fee
(each, a "Takedown Fee") in an amount equal to one percent (1.00%) of the aggre-
gate outstanding principal amount of the Notes being purchased at such Takedown.
(c) Credits. If the Notes are refinanced in full through any
Equity Issuance which constitutes the Permanent Financing on or prior to the
twelve-month anniversary of the date of the Initial Takedown, one hundred
percent (100.00%) of the Commitment Fee and the Takedown Fee will be creditable
against fees due to DLJSC.
Section 2.4. Mandatory Termination and Reduction of Commitment.
(a) The Commitment shall terminate on the earlier of the
Expiration Date or the Second Takedown.
(b) The Commitment shall be reduced by an amount equal to the Net
Cash Proceeds received by any Credit Party in respect of any Asset Sale, Debt
Incurrence or Equity Issuance minus the amount of such Net Cash Proceeds applied
to repay outstanding Notes in accordance with Section 2.7(c). Each such
reduction shall be effective on the date of the related prepayment of the Notes,
or if no Notes are at the time outstanding, on the date of receipt of such Net
Cash Proceeds.
Section 2.5. Optional Reduction of Commitment. The Company may,
upon not less than three Business Days' notice to Purchaser, terminate the
unused Commitment at any time or reduce the unused Commitment from time to time
in amounts equal to $5,000,000 or any larger multiple of $1,000,000.
Section 2.6. Interest. (a) Payment Dates. Interest on each Note
shall be payable in dollars quarterly in arrears, on each Interest Payment Date
of each year in which such Note remains outstanding, commencing with the first
Interest Payment Date after the date of issuance thereof, on the principal sum
of such Note outstanding. Interest on each Note shall be calculated at the rate
per annum set forth in subsection (b) below, and shall accrue from and including
the most recent Interest Payment Date to which interest has been paid on such
Note (or if no interest has been
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paid on such Note, from the date of issuance thereof) to but excluding the date
on which payment in full of the principal sum of such Note has been made.
(b) Interest Rate. Interest shall be payable at the LIBOR Rate
plus a spread (the "Spread"). The Spread will be 450 basis points.
Notwithstanding anything to the contrary set forth above, at no
time shall the per annum interest rate on the Notes exceed seventeen percent
(17.00%) nor shall the per annum interest rate on the Notes be less than ten
percent (10.00%). Interest on each Note will be calculated on the basis of a
365-day year and paid for the actual number of days elapsed.
Section 2.7. Maturity of Notes; Prepayment of Notes. (a) Maturity
Date. The Notes shall mature on the Maturity Date.
(b) Optional Redemption. The Notes may be redeemed, in whole or
in part, upon not less than 10 days written notice, at the option of the
Company, at any time at par plus accrued interest to the redemption date;
provided, that the redemption price shall be one hundred three percent (103.00%)
of par plus accrued interest if the Notes are refunded (whether at the time of
redemption or maturity) with funds raised by any means other than (i) an initial
public offering at a minimum of at least, if not greater than, $75 million of
the Company's common stock lead managed by DLJSC, (ii) a private placement at a
minimum of at least, if not greater than, $75 million of the Company's common
stock or other equity securities in which DLJSC is the lead placement agent,
(iii) a bank deal in which DLJSC is the loan originator and lead syndicate agent
or in which DLJSC formally declines to act as such or (iv) in the case of
optional redemption on the date of maturity, where Knowledge Universe, L.L.C. or
an Affiliate thereof repays, in full, all obligations of the Company to
Purchaser.
(c) Mandatory Prepayments. The Company shall, within five days of
receipt by any Credit Party of the Net Cash Proceeds of any Asset Sale, Debt
Incurrence or Equity Issuance, prepay a principal amount of the Notes equal to
the amount of such Net Cash Proceeds (less any amounts not required to be paid
as a result of the requirement in subsection (d) of this Section 2.7 that all
such prepayments be made in multiples of $1,000), at a redemption price equal
to one hundred percent (100.00%) of the principal amount of the Notes so prepaid
together with accrued interest to the date of prepayment; provided, that the
redemption price shall be one hundred three percent (103.00%) of par plus
accrued interest if the Notes are
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redeemed with or in anticipation of funds raised by any means other than (i) an
initial public offering at a minimum of at least, if not greater than, $75
million of the Company's common stock lead managed by DLJSC, (ii) a private
placement at a minimum of at least, if not greater than, $75 million of the
Company's common stock or other equity securities in which DLJSC is the lead
placement agent, (iii) a bank deal in which DLJSC is the loan originator and
lead syndicate agent or in which DLJSC formally declines to act as such or (iv)
in the case of optional redemption on the date of maturity, where Knowledge
Universe, L.L.C. or an Affiliate thereof repays, in full, all obligations of the
Company to Purchaser.
(d) Minimum Amount. Any prepayment of the Notes pursuant to
Section 2.7(b) shall be in a minimum amount of at least $1,000,000, unless less
than $1,000,000 of the Notes remain outstanding, in which case all of the Notes
must be prepaid. Any prepayment of the Notes pursuant to Section 2.7(c) shall be
in a minimum amount which is a multiple of $1,000 times the number of Holders at
the time of such prepayment.
(e) Partial Prepayments. Any partial prepayment shall be made so
that the Notes then held by each Holder shall be prepaid in a principal amount
which shall bear the same ratio, as nearly as may be, to the total principal
amount being prepaid as the principal amount of such Notes held by such Holder
shall bear to the aggregate principal amount of all Notes then outstanding. In
the event of a partial prepayment, upon presentation of any Note the Company
shall execute and deliver to or on the order of the Holder, at the expense of
the Company, a new Note in principal amount equal to the remaining outstanding
portion of such Note.
Section 2.8. Taxes. (a) For the purposes of this Section, the
following terms have the following meanings:
"Taxes" means any and all present or future taxes, duties,
levies, imposts, deductions, charges or withholdings with respect to any payment
by any Credit Party pursuant to this Agreement or under any Note or any other
Financing Document, and all liabilities with respect thereto, excluding, in the
case of Purchaser or any other Holder, taxes imposed on the net income of
Purchaser or such Holder and franchise or similar taxes imposed on Purchaser or
such Holder (all such excluded taxes being hereinafter referred to as "Domestic
Taxes").
"Other Taxes" means any present or future stamp or documentary
taxes and any other excise or property taxes, or similar charges or levies,
which arise from any payment made pursuant to this Agreement or under any Note
or any other
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Financing Document or from the execution, delivery, registration, recordation or
enforcement of, or otherwise with respect to, this Agreement or any Note or any
other Financing Document.
(b) All payments by any Credit Party to or for the account of
Purchaser or any other Holder under any Financing Document shall be made without
deduction for any Taxes or Other Taxes; provided that, if any Credit Party shall
be required by law to deduct any Taxes or Other Taxes from any such payment, the
sum payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section), Purchaser or such Holder (as the case may be) receives an amount
equal to the sum it would have received had no such deductions been made, the
Credit Party shall make such deductions, the Credit Party shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law and the Company shall promptly furnish to the
Purchaser or such Holder (as the case may be) the original or a certified copy
of a receipt evidencing payment thereof.
(c) The Company agrees to indemnify Purchaser and each other Holder
for the full amount of Taxes and Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable
under this Section) paid by Purchaser or such Holder (as the case may be) and
any liability (including penalties, interest and expenses) arising therefrom or
with respect thereto.
(d) The Company shall have no obligations for Taxes under Section
2.8(a) or Section 2.8(b) for or on account of:
(i) any Taxes (other than Other Taxes) imposed by way of
deduction or withholding that would not have been so imposed but for the
existence of any present or former connection between such Holder and the
jurisdiction imposing the Tax other than merely holding such Note or any
Financing Document, or the receipt of payments in respect thereof, including,
without limitation, such Holder being or having been a citizen or resident
thereof, or being or having been engaged in a trade or business or having a
permanent establishment or other fixed base therein, or making or having made an
election to the effect of which is to subject such Holder to such Tax;
(ii) any Taxes (other than (A) Other Taxes or (B) any Taxes
imposed by way of deduction or withholding) that would not have been so imposed
but for the existence of any present or former connection between such
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Holder or the beneficial owner (or between a fiduciary, settlor, beneficiary,
member or shareholder of, or possessor of a power over, such Holder or
beneficial owner, if such Holder or beneficial owner is an estate, a trust, a
partnership, a limited liability company or corporation) and the jurisdiction
imposing the Tax other than merely holding such Note or any Financing Document,
or the receipt of payments in respect thereof, including, without limitation,
such Holder or beneficial owner (or such fiduciary, settlor, beneficiary,
member, shareholder, or possessor) being or having been a citizen or resident
thereof, or being or having been engaged in a trade or business or having a
permanent establishment or other fixed base therein, or making or having made an
election to the effect of which is to subject such Holder or beneficial owner
(or such fiduciary, settlor, beneficiary, member, shareholder or possessor) to
such Tax;
(iii) any Taxes in the nature of estate, inheritance or
gift taxes;
(iv) any Tax that is imposed or withheld by reason of the
failure of the Holder or beneficial owner of a Note to comply with a written
request by the Company addressed to such Holder or beneficial owner to provide
(A) information concerning the nationality, residence or identity of such Holder
or beneficial owner that is required under a statute, treaty, regulation or
administrative practice of the jurisdiction imposing such Tax as a precondition
to exemption from all or part of such Tax or (B) the applicable signed form
required to be received by the Credit Parties to qualify for an exemption or
reduction of such Tax;
(v) any Taxes imposed on any payment on a Note to a Holder
that is a fiduciary or partnership or other than sole beneficial owner of such
payment to the extent a beneficiary or settlor with respect to such fiduciary or
a member of such partnership or limited liability company or a shareholder of an
S corporation or a beneficial owner would not have been entitled to the payment
of taxes had such beneficiary, settlor, member, shareholder or beneficial owner
directly received its beneficial or distributive share of such payment;
(vi) any Tax that is imposed or withheld, to the extent that
the Holder would have been subject to such Tax at the time of the original
purchase of the Notes upon their original issuance if the Holder had purchased
the Note at that time; and
(vii) any combination of items (i) through (vi) above.
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(e) Notwithstanding anything in Section 2.8(d) to the contrary,
the Company agrees to indemnify Purchaser and each other Holder for all Domestic
Taxes of Purchaser or such other Holder (calculated based on a hypothetical
basis at the maximum marginal rate for a corporation) and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto, in each case to the extent that such Domestic Taxes result from any
payment or indemnification pursuant to this Section 2.8. This indemnification
shall be paid within 15 days after Purchaser or such Holder (as the case may be)
makes demand therefor.
(f) The Company agrees that the provisions of this Section shall
inure to the benefit of any transferee of any Note.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to Purchaser (both before and
after giving effect to each Acquisition) as set forth below:
Section 3.1. Corporate Existence and Power. Each Credit Party is
a corporation, limited liability company or limited partnership, as applicable,
duly incorporated or formed, as applicable, validly existing and in good
standing under the laws of the state of its incorporation, and has all
corporate, limited liability company or limited partnership powers, as
applicable, and all governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted and as proposed to
be conducted after each Acquisition except for such governmental licenses,
authorizations, consents and approvals as to which the failure to so maintain
could not reasonably be expected to have a Material Adverse Effect.
Section 3.2. Authorization, Execution and Enforceability. The
execution, delivery and performance by each Credit Party party to each of the
Financing Documents and the Material Acquisition Documents and the issuance of
the Notes by the Company have been duly and validly authorized and are within
each such Credit Party's corporate, limited liability company or limited
partnership powers, as applicable. Each of the Financing Documents (other than
the Notes) and Material Acquisition Documents has been duly executed and
delivered by the Credit Parties party thereto and constitutes their valid and
binding agreement, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency and other similar laws affecting creditors'
rights generally and equitable principles of general applicabil-
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ity. When executed and delivered by the Company against payment therefor in
accordance with the terms hereof, the Notes will constitute valid and binding
obligations of the Company, enforceable in accordance with their terms, subject
to applicable bankruptcy, insolvency and other similar laws affecting creditors'
rights generally and equitable principles of general applicability.
Section 3.3. Governmental Authorization; Compliance with Laws.
The execution and delivery by the Credit Parties party to each of the Financing
Documents and Material Acquisition Documents did not and will not, the issuance
and sale of the Notes by the Company will not, and the consummation of the
transactions contemplated hereby and thereby will not, require any action by or
in respect of, or filing with, any governmental body, agency or governmental
official except actions and filings which, if not taken or made, will not affect
in any manner the validity or enforceability of the Financing Documents or the
Material Acquisition Documents or could reasonably be expected to have a
Material Adverse Effect. Each Credit Party is in compliance with all applicable
laws, ordinances, rules, regulations and requirements of governmental
authorities except to the extent such compliance is not material to the
business, assets, property, condition (financial or otherwise) of such Credit
Party.
Section 3.4. Non-Contravention. The execution and delivery by the
Credit Parties party to each of the Financing Documents and the Material
Acquisition Documents did not and will not, and the issuance and sale of the
Notes by the Company will not, and the consummation of the transactions
contemplated hereby and thereby will not, contravene or constitute a default
under or violation of any provision of applicable law or regulation, any Company
Corporate Documents or any agreement, judgment, injunction, order, decree or
other instrument binding upon any Credit Party or any of its assets, or result
in the creation or imposition of any Lien on any asset of any Credit Party
(other than the Liens created by the Security Documents).
Section 3.5. Financial Information.
(a) The (i) consolidated financial statements of each Credit
Party including balance sheets and incomes and cash flow statements as of the
end of and for each of the last three fiscal years audited by independent public
accountants of recognized national standing and prepared in conformity with
GAAP, together with the report thereon; (ii) unaudited selected financial
information of each Credit Party meeting the requirements of Item 301(a) of
Regulation S-K for the two fiscal years immediately preceding the last three
fiscal years; and (iii) unaudited interim financial
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statements of each Credit Party, prepared in each case in the same manner as the
historical audited statements for the most recently ended quarterly period and
for the same quarterly period during the most recently ended fiscal year, fairly
present, in conformity with GAAP, the consolidated financial position of such
entities as of each such date and their consolidated results of operations,
changes in stockholders' equity and cash flows for each period (subject to
footnote presentation and normal year-end adjustments).
(b) The unaudited pro forma consolidated balance sheet of the
Company as of June 30, 1998 (including the notes thereto) (the "Pro Forma
Balance Sheet"), copies of which have heretofore been furnished to the
Purchaser, has been prepared giving effect (as if such events had occurred on
such date) to (i) the consummation of each Acquisition, (ii) Debt to be issued
on or about the date of Closing and the use of proceeds thereof and (iii) the
payment of fees and expenses in connection with the foregoing. The Pro Forma
Balance Sheet has been prepared based on the best information available to the
Company as of the date of delivery thereof, and presents fairly on a pro forma
basis the estimated financial position of the Company as of June 30, 1998,
assuming that the events specified in the preceding sentence had actually
occurred at such date.
(c) There has occurred no material adverse change, or development
that could reasonably be expected to result in a material adverse change, in the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Company, Sibson or Delphi or any of their
respective Subsidiaries, in each case taken as a whole, since December 31, 1997
or in the facts and information supplied to Purchaser through the date hereof
with respect thereto.
Section 3.6. Litigation. Except as set forth on Schedule 3.6, there
is no action, suit or proceeding pending or, to the knowledge of any Credit
Party, threatened against any Credit Party before any court or arbitrator or
any governmental body, agency or official in which there is a reasonable
possibility of an adverse decision which could have a Material Adverse Effect or
which challenges the validity of any Financing Document or of any Acquisition;
provided, however, that except as noted on such Schedule 3.6, all matters listed
therein are covered by adequate insurance.
Section 3.7. Environmental Matters. Except as provided on Schedule
3.7:
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(a) Except to the extent the following could not reasonably be
expected to result in a Material Adverse Effect, other than the generation, use
and storage of Hazardous Materials in compliance with all applicable
Environmental Laws: (i) no Hazardous Materials are located on any properties
owned, leased or operated by any Credit Party; (ii) no Hazardous Materials have
been released into the environment or deposited, discharged, placed or disposed
of, at, on, under or near any of such properties; (iii) no portion of any such
property is being used for the disposal, storage, treatment, processing or other
handling of Hazardous Materials; (iv) no such property is affected by Hazardous
Materials Contamination; (v) to the best of any Credit Party's knowledge, no
previous owner or occupant of such properties has used any portion of the
properties for the treatment, storage, disposal, processing or other handling of
Hazardous Materials; (vi) with respect to properties previously owned, leased or
operated by any Credit Party, to the best of any Credit Party's knowledge, no
Hazardous Materials have been released into the environment, or deposited,
discharged, placed or disposed of, at, on, under or near any such properties
during the time of any Credit Party's ownership, lease or operation thereof.
(b) Except to the extent the following could not reasonably be
expected to result in a Material Adverse Effect, no asbestos or
asbestos-containing materials are present on any of the properties now or
previously owned, leased or operated by any Credit Party.
(c) Except to the extent the following could not reasonably be
expected to result in a Material Adverse Effect, no polychlorinated biphenyls
are located on or in any properties now or previously owned, leased or operated
by any Credit Party, in the form of electrical transformers, fluorescent light
fixtures with ballasts, cooling oils or any other device or form.
(d) Except to the extent the following could not reasonably be
expected to result in a Material Adverse Effect, no underground storage tanks
are located on any properties now or previously owned, leased or operated by any
Credit Party, or were located on any such property and subsequently removed or
filled.
(e) Except as to the extent the following (or the matters referred
to in any of the following) could not reasonably be expected to result in a
Material Adverse Effect, no notice, notification, demand, request for
information, complaint, citation, summons, investigation, administrative order,
consent order and agreement, litigation or settlement directed at any Credit
Party or any property owned, leased or operated by any Credit Party with respect
to Hazardous Materials or Hazardous Materials Contamination is in existence or,
to any Credit Party's knowledge,
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proposed, threatened or anticipated with respect to or in connection with the
operation of any properties now or previously owned, leased or operated by any
Credit Party. Except as to the extent the following could not result in a
Material Adverse Effect, all such properties and their existing and prior uses
comply and at all time have complied with any applicable governmental
requirements relating to environmental matters of Hazardous Materials and there
is no condition on any of such properties which is in violation of any
applicable governmental requirements relating to Hazardous Materials, and no
Credit Party has received any communication from or on behalf of any
governmental authority that any such condition exists.
(f) There has been no environmental investigation, study, audit,
test, review or other analysis conducted of which any Credit Party has knowledge
in relation to the current or prior business of any Credit Party or any
property or facility now or previously owned, leased or operated by any Credit
Party which has not been delivered to the Purchaser at least five days prior to
the date hereof.
(g) For purposes of this Section 3.7, the term "Credit Party" shall
include any business or business entity (including a corporation) which is, in
whole or in part, a predecessor of any Credit Party.
Section 3.8. Taxes. Except as set forth on Schedule 3.8, all income
tax returns and all other material tax returns which are required to be filed by
or on behalf of any Credit Party have been filed and all taxes shown as due on
such returns have been paid or adequate reserves have been established on the
books of the applicable Credit Party. The charges, accruals and reserves on the
books of the applicable Credit Party and in respect of taxes or other
governmental charges have been established in accordance with GAAP.
Section 3.9. Subsidiaries. The only Subsidiaries of the Company are
Symmetrix Inc., SGM Consulting, L.L.C. (d/b/a Sigma Consulting), Pyramid
Imaging, Inc. and The Planning Technologies Group, L.L.C., Symmetrix European
Holdings, Inc., Symmetrix Europe, S.A., Cranberry Hill Capital, LLC, Scanada,
Inc. and SC/NE.
Section 3.10. Not an Investment Company. No Credit Party is an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
Section 3.11. Full Disclosure. The information heretofore furnished
by the Credit Parties to Purchaser for purposes of or in connection with the
Financing
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Documents or any transaction contemplated hereby does not, and all such
information hereafter furnished by the Credit Parties to Purchaser will not (in
each case taken together and on the date as of which such information is
furnished), contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements contained therein, in
the light of the circumstances under which they are made, not misleading. The
projections and pro forma financial information contained in the materials
referenced above are based upon good faith estimates and assumptions believed by
management of the Company to be reasonable at the time made. The Credit Parties
have disclosed to Purchaser any and all facts which materially and adversely
affect or may affect (to the extent the Company can now reasonably foresee), the
business, operations or financial condition of the Company and its Subsidiaries,
Sibson and its Subsidiaries and Delphi and its Subsidiaries, each taken as a
whole, or the ability of the Company and its Subsidiaries, taken as a whole, to
perform the obligations under the Financing Documents or to complete the
Permanent Financing.
Section 3.12. Capitalization. At the date of each Takedown and after
giving effect to each Acquisition, the capitalization of each Credit Party will
be as set forth on Schedule 3.12. All of the issued and outstanding shares of
capital stock or membership interests, as applicable, of each Credit Party are
validly issued, fully paid and nonassessable and free and clear of any Lien or
other right or claim and the holders thereof are not entitled to any preemptive
or other similar rights. Other than as set forth on Schedule 3.12, there are no
subscriptions, options, warrants, rights, convertible securities, exchangeable
securities or other agreements or commitments of any character pursuant to which
any Credit Party is required to issue any shares of its capital stock or
membership interests, as applicable.
Section 3.13. Solicitation; Access to Information. No form of
general solicitation or general advertising was used by any Credit Party or, to
the best of its knowledge, any other Person acting on behalf of any Credit
Party, in connection with the offer and sale of the Notes. Neither any Credit
Party nor any Person acting on behalf of any Credit Party has, either directly
or indirectly, sold or offered for sale to any Person any of the Notes or any
other similar security of any Credit Party except as contemplated by this
Agreement, and the Company represents that neither it nor any Credit Party nor
any person acting on its behalf other than Purchaser and its Affiliates will
sell or offer for sale to any Person any such security to, or solicit any offers
to buy any such security from, or otherwise approach or negotiate in respect
thereof with, any Person or Persons so as thereby to bring the issuance or sale
of any of the Notes within the provisions of Section 5 of the Securities Act.
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Section 3.14. Non-fungibility. When the Notes are issued and
delivered pursuant to this Agreement, the Notes will not be of the same class
(within the meaning of Rule 144A under the Securities Act) as securities which
are (i) listed on a national securities exchange registered under Section 6 of
the Exchange Act or (ii) quoted in a U.S. automated inter-dealer quotation
system.
Section 3.15. Permits. Except to the extent any of the following
could not reasonably be expected to result in a Material Adverse Effect: (a)
each Credit Party has all Permits as are necessary for the conduct of their
respective businesses as it has been carried on; (b) all such Permits are in
full force and effect, and each Credit Party has fulfilled and performed all
material obligations with respect to such Permits; (c) no event has occurred
which allows, or after notice or lapse of time would allow, revocation or
termination by the issuer thereof or which results in any other impairment of
the rights of the holder of any such Permit; and (d) each Credit Party has no
reason to believe that any governmental body or agency is considering limiting,
suspending or revoking any such Permit.
Section 3.16. Representations in Other Financing Documents and in
Material Acquisition Documents. (a) Each of the representations and warranties
of the Credit Parties set forth in any of the Financing Documents is true and
correct in all material respects.
(b) Each of the representations and warranties of the Credit Parties
set forth in any of the Material Acquisition Documents is true and correct in
all material respects.
Section 3.17. Compliance with ERISA. Except as set forth on Schedule
3.17, each member of the ERISA Group has fulfilled its obligations under the
minimum funding standards of ERISA and the Internal Revenue Code with respect to
each Plan and is in compliance in all material respects with the presently
applicable provisions of ERISA and the Internal Revenue Code with respect to
each Plan. No member of the ERISA Group has (i) sought a waiver of the minimum
funding standard under Section 412 of the Internal Revenue Code in respect of
any Plan, (ii) failed to make any contribution or payment to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement, or made any
amendment to any Plan or Benefit Arrangement, which has resulted or could result
in the imposition of a Lien or the posting of a bond or other security under
ERISA or the Internal Revenue Code or (iii) incurred any liability under Title
IV or ERISA other than a liability to the PBGC for premiums under Section 4007
of ERISA.
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Section 3.18. Labor Matters. Except as set forth on Schedule 3.18,
(x) there are no collective bargaining agreements or Multiemployer Plans
covering the employees of any Credit Party and (y) none of such Persons has
suffered any strikes, walkouts, work stoppages or other material labor
difficulty within the last five years and none of the foregoing is now
threatened or imminent.
Section 3.19. Ownership of Property. Schedule 3.19 sets forth all
the real property owned or leased by the Credit Parties and identifies the
street address, the current owner (and current record owner, if different) and
whether such property is leased or owned. The Credit Parties have good and
marketable fee simple title to or valid leasehold interests in all of such real
property and good title to all of their personal property subject to no Lien of
any kind except Liens permitted hereby. The Credit Parties enjoy peaceful and
undisturbed possession under all of their respective material leases.
Section 3.20. Absence of Any Undisclosed Liabilities or Capital
Calls. There are no liabilities of any Credit Party of any kind whatsoever,
whether accrued, contingent, absolute, determined, determinable or otherwise,
and there is no existing condition, situation or set of circumstances which
could reasonably be expected to result in such a liability, other than (i) those
liabilities provided for in the financial statements referenced in Section 3.5
hereof and previously delivered to the Purchaser, (ii) the liabilities set forth
in Schedule 3.20, (iii) liabilities incurred in the ordinary course of business
subsequent to the date of the latest financial statements referenced in Section
3.5 hereof, and (iv) other undisclosed liabilities which, individually or in the
aggregate, are not material to any Credit Party. The aggregate amount of
liabilities as of the Closing under clauses (ii) and (iii) of this Section 3.20
do not exceed $500,000 excluding accrued interest from June 30, 1998 through the
Closing under the KU Debt.
Section 3.21. Governmental Regulation. No Credit Party is, or will
be upon the issuance and sale of the Notes and the use of the proceeds described
herein, subject to regulation under the Public Utility Holding Company Act of
1935 or the Federal Power Act (each, as amended) or to any federal or state
statute or regulation in a manner which would limit its ability to issue the
Notes (in the case of the Company) and perform its obligations under any
Financing Document.
Section 3.22. Solvency. On the date of the Closing and after giving
effect to the transactions under each Purchase Agreement, each Credit Party will
be Solvent.
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Section 3.23. Company Business. The Company (a) conducts no business
other than the operation and direct or indirect ownership of 100% of the equity
interests of Symmetrix Inc., SGM Consulting, L.L.C. (d/b/a SIGMA), Pyramid
Imaging, Inc. and The Planning Technologies Group, L.L.C. and (b) conducts
research services and related consulting services. At any time after Closing,
the Company will conduct no business other than the foregoing.
Section 3.24. Security Interests and Liens. The Security Documents
create, as security for the obligations of the Company incurred pursuant to the
Financing Documents, valid and enforceable security interests in and Liens on
all of the collateral described in such Security Documents (the "Collateral"),
in favor of the Purchaser, and subject to no other Liens other than Permitted
Liens. Such security interests in and Liens on the Collateral shall be superior
to and prior to the rights of all third parties (except as disclosed on Schedule
3.24), and no further recordings or filings are or will be required in
connection with the creation, perfection or enforcement of such security
interests and Liens, other than the filing of continuation statements in
accordance with applicable law.
Section 3.25. Patents, Trademarks, etc. Except as disclosed on
Schedule 3.25, each of the Credit Parties has obtained and holds in full force
and effect all patents, trademarks, servicemarks, trade names, copyrights and
other such intellectual property rights, which are material to the operation of
its business as presently conducted. No material product, process, method,
substance, part or other material presently sold by or employed by any Credit
Party in connection with such business infringes any patent, trademark, service
xxxx, trade name, copyright, license or other right owned by any other Person.
There is not pending or overtly threatened any claim or litigation against or
affecting any Credit Party contesting its right to sell or use any such product,
process, method, substance, part or other material.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Section 4.1. Purchase for Investment; Authority; Binding Agreement.
Purchaser represents and warrants to the Company that:
(a) Purchaser is an Accredited Investor within the meaning of Rule
501(a) under the Securities Act and the Notes to be acquired by it pursuant to
this Agreement are being acquired for its own account and Purchaser will not
offer, sell, transfer, pledge, hypothecate or otherwise dispose of the Notes
unless pursuant to a
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transaction either registered under, or exempt from registration under, the
Securities Act;
(b) the execution, delivery and performance of this Agreement and
the purchase of the Notes pursuant hereto are within Purchaser's corporate
powers and have been duly and validly authorized by all requisite corporate
action;
(c) this Agreement has been duly executed and delivered by
Purchaser;
(d) this Agreement constitutes a valid and binding agreement of
Purchaser enforceable in accordance with its terms; and
(e) Purchaser has such knowledge and experience in financial and
business matters so as to be capable or evaluating the merits and risks of its
investment in the Notes and Purchaser is capable of bearing the economic risks
of such investment.
ARTICLE V
CONDITIONS PRECEDENT TO PURCHASE
Section 5.1. Conditions to Purchaser's Obligation at Initial
Takedown. The obligation of Purchaser to purchase the Notes to be issued and
sold at the Initial Takedown hereunder is subject to the satisfaction of the
following conditions contemporaneously with such Takedown:
(a) (i) Each of the conditions to the parties' obligations under the
applicable Material Acquisition Documents shall have been satisfied or, with the
prior written consent of Purchaser, waived, (ii) the Acquisition to which the
Initial Takedown relates shall have been completed on the terms set forth in the
Material Acquisition Documents (as such terms may have been amended or waived
with the consent of Purchaser), (iii) the aggregate amount of funds required by
the Company with respect to the Sibson Acquisition (including without limitation
for the payment of fees, commissions and expenses) shall not exceed $38,000,000
and (iv) the aggregate amount of funds required by the Company with respect to
the Delphi Acquisition (including without limitation for the payment of fees,
commissions and expenses) shall not exceed $2,000,000;
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(b) Each of the Material Acquisition Documents, the Financing
Documents and the Company Corporate Documents shall have been duly executed and
delivered by the parties thereto and shall be in full force and effect and,
subject to Purchaser's sole discretion, no material term or condition thereof
shall have been amended, waived or otherwise modified without the prior written
consent of Purchaser;
(c) Purchaser shall have received the financial statements referred
to in Section 3.5 hereof and shall be satisfied with the same in all material
respects in Purchaser's sole discretion;
(d) Purchaser shall have received evidence satisfactory to it that
all governmental, shareholder and, subject to Purchaser's sole discretion,
material third party consents and approvals necessary in connection with the
Acquisition to which the Initial Takedown relates and the other transactions
contemplated by the Financing Documents and by the Material Acquisition
Documents (including without limitation any Xxxx-Xxxxx-Xxxxxx filings) have been
received and all applicable waiting periods shall have expired without any
action being taken by any competent authority that could restrain, prevent or
impose any materially adverse conditions on the Acquisition to which the
Initial Takedown relates or such other transactions or that could seek or
threaten any of the foregoing, and no law or regulation shall be applicable
which in the judgment of Purchaser could have any such effect;
(e) No Credit Party shall have indebtedness for borrowed money other
than (i) the Notes and (ii) as listed on Schedule 5.1(e), all of which such
indebtedness for borrowed money will contain terms and conditions satisfactory
in all material respects to Purchaser in Purchaser's sole discretion. No Credit
Party shall have preferred stock issued and outstanding;
(f) Purchaser shall have completed and be satisfied in all respects
with its financial, tax, legal, accounting and environmental due diligence
investigations;
(g) The corporate, tax, capital and ownership structure (including
articles of incorporation, operating or member agreements and by-laws),
shareholders agreements and management of the Credit Parties before and after
each Acquisition shall, except as contemplated by each Acquisition, be
consistent with that previously disclosed to Purchaser, and shall not have been
modified, in Purchaser's sole discretion, in any material respect other than
without the prior written consent of Purchaser;
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(h) Absence of any material adverse change in the business,
condition (financial or otherwise), operations, performance, properties,
prospects or projections of any Credit Party or any of their respective
Subsidiaries, in each case taken as a whole, since the end of the most recently
ended period for which financial statements have been provided to Purchaser or
in the facts and information as represented to date;
(i) Except as set forth on Schedule 3.6, there shall exist no
pending or threatened material litigation, proceedings or investigations which
(x) could or purports to affect any Acquisition or the transactions contemplated
hereby or (y) could reasonably be expected to have a material adverse effect on
the business, assets, debt service capacity, liabilities (including
environmental liabilities), financial condition, operations, prospects or
projections of the Credit Parties taken as a whole;
(j) Purchaser shall have received satisfactory opinions of counsel
to certain of the Credit Parties as to the transactions contemplated hereby, and
such corporate resolutions, certificates and other documents as Purchaser shall
reasonably request;
(k) Absence of any Event of Default or event that, with notice
and/or the passage of time, could reasonably be expected to become an Event of
Default and accuracy of all representations and warranties in all material
respects;
(l) Absence of any disruption or adverse change in the financial or
capital markets generally which could reasonably be expected to materially
adversely affect the purchase of the Notes or the refinancings thereof;
(m) Purchaser shall have received necessary consent from lenders to
the Credit Parties, including, without limitation, lenders of the KU Debt and
the Subsidiary Debt, if any, concerning the anticipated terms and conditions of
the Notes, and the Permanent Financing including the application of the proceeds
from any such financing;
(n) The Engagement Letter shall have been executed;
(o) Purchaser shall have received a solvency certificate
substantially in the form of Exhibit B hereto executed by the Chief Financial
Officer, Secretary or sole Member of each Credit Party dated as of the Closing;
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(p) Purchaser shall have received a Subsidiary Guaranty in the form
of Exhibit C executed by each Credit Party other than the Company; and
(q) All fees and expenses payable to Purchaser or DLJSC hereunder,
under the Engagement Letter or otherwise in connection with the transactions
contemplated hereby, shall have been paid in full.
Section 5.2. Conditions to Purchaser's Obligations at the Second
Takedown. The obligation of Purchaser to purchase the Notes to be issued and
sold at the Second Takedown hereunder is subject to the satisfaction of the
following conditions contemporaneously with such Takedown:
(a) Each of the conditions precedent set forth in Section 5.1 of
this Agreement as applicable, in the Purchaser's judgment, to the Delphi
Acquisition, shall have been satisfied;
(b) There shall have occurred no material adverse change in the
assets, business, financial position, results of operations or prospects of the
Company and its Subsidiaries, taken as a whole, since March 31, 1998 or in the
facts and information as represented to Purchaser through closing with respect
thereto;
(c) There shall not have occurred any disruption or adverse change
in the financial or capital markets generally which could reasonably be expected
to materially adversely affect the purchase of the Notes or the refinancing
thereof;
(d) The representations and warranties of the Credit Parties
contained in the Financing Documents shall be true and correct in all material
respects on and as of such Takedown as if made on and as of such time and each
of the Credit Parties shall have performed and complied with all covenants and
agreements required by the Financing Documents to be performed by it or complied
with by it at or prior to such Takedown;
(e) There shall not exist any Default;
(f) Purchaser shall have received the Notes to be issued at such
Takedown, duly executed by the Company in the denominations and registered in
the names specified in or pursuant to Section 2.2; and
(g) Purchaser shall have received payment of all fees and expenses
payable to or for the account of Purchaser hereunder at or prior to such time.
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ARTICLE VI
COVENANTS
The Company agrees (and agrees that it shall cause each Credit Party
to agree) that, from and after the date of the Initial Takedown and so long as
the Commitment remains in effect or any Notes remain outstanding and unpaid or
any other amount is owning to Purchaser or the Holders, and for the benefit of
Purchaser and the Holders:
Section 6.1. Information. The Company will deliver to Purchaser:
(a) as soon as available and in any event within 120 days after the
end of each fiscal year of the Company, an audited consolidated balance sheet of
the Company and its Consolidated Subsidiaries as of the end of such fiscal year
and the related audited statements of income and cash flows and stockholders'
equity (deficit) for such fiscal year, setting forth in each case in comparative
form the figures for the previous fiscal year, all reported on by the Company or
other independent public accountants of nationally recognized standing in a
manner acceptable to the Commission;
(b) as soon as available and in any event within 60 days after the
end of each of the first three quarters of each fiscal year of the Company, a
consolidated balance sheet of the Company and its Consolidated Subsidiaries as
of the end of such quarter and the related consolidated statements of income and
cash flows and stockholders' equity (deficit) for each quarter and for the
portion of the fiscal year ended at the end of such quarter, setting forth in
each case in comparative form the figures for the corresponding quarter and the
corresponding portion of the previous fiscal year, all certified (subject to
footnote presentation and normal year-end adjustments) as to fairness of
presentation, GAAP and consistency by the chief financial officer or the chief
accounting officer of the Company;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of the chief
financial officer or the chief accounting officer of the Company (i) setting
forth in reasonable detail whether the Company was in compliance with the
requirements of Sections 6.8 through 6.11, inclusive, on the date of such
financial statements and (ii) stating whether any Default exists on the date of
such certificate and, if any Default then exists, setting forth the details
thereof and the action which the Company or any of the Credit Parties are taking
or propose to take with respect thereto;
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(d) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a statement of the firm of
independent public accountants which reported on such statements confirming the
calculations set forth in the officer's certificate delivered simultaneously
therewith pursuant to clause (c) above;
(e) within five days after any officer of any Credit Party obtains
knowledge of a Default or a default under the KU Debt or under any Subsidiary
Debt, a certificate of the chief financial officer or the chief accounting
officer of the Company setting forth the details thereof and the action which
such Credit Party is taking or proposes to take with respect thereto;
(f) promptly upon the filing thereof, copies of all applications,
registration statements or reports which any Credit Party shall have filed with
the Commission or any other national stock exchange;
(g) promptly upon the mailing thereof to the shareholders of any
Credit Party generally, copies of all financial statements, reports and proxy
statements so mailed;
(h) if and when any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as defined in
Section 4043 of ERISA) with respect to any Plan which might constitute grounds
for a termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA or notice that any Multiemployer
Plan is in reorganization, is insolvent or has been terminated, a copy of such
notice; (iii) receives notice from the PBGC under Title IV of ERISA of an intent
to terminate, impose liability (other than for premiums under Section 4007 of
ERISA) in respect of, or appoint a trustee to administer any Plan, a copy of
such notice; (iv) applies for a waiver of the minimum funding standard under
Section 412 of the Internal Revenue Code, a copy of such application; (v) gives
notice of intent to terminate any Plan under Section 4041(c) of ERISA, a copy of
such notice and other information filed with the PBGC; (vi) gives notice of
withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of such
notice; or (vii) fails to make any payment or contribution to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement or makes any
amendment to any Plan or Benefit Arrangement which has resulted or could result
in the imposition of a Lien or the posting of a bond or other security, a
certificate of the
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chief financial officer or the chief accounting officer of the relevant Credit
Party setting forth details as to such occurrence and action, if any, which the
relevant Credit Party or applicable member of the ERISA Group is required or
proposes to take;
(i) promptly following the commencement thereof, notice and a
description in reasonable detail of any litigation or proceeding to which any
Credit Party is a party in which the amount involved is $1,000,000 or more or in
which injunctive relief is sought;
(j) promptly following the occurrence thereof, notice and a
description in reasonable detail of any material adverse change in the business,
operations, property, condition (financial or otherwise) or prospects of the
Company and its Subsidiaries, taken as a whole; and
(k) from time to time such additional information regarding the
financial position or business of any Credit Party, as Purchaser may reasonably
request.
Section 6.2. Payments of Obligations. The Company will pay and
discharge, and will cause each Credit Party to pay and discharge, at or before
maturity, all their respective material obligations and liabilities, including,
without limitation, tax liabilities, except where the same may be contested in
good faith by appropriate proceedings, and will maintain, and will cause each
Credit Party to maintain, in accordance with GAAP, appropriate reserves for the
accrual of any of the same.
Section 6.3. Insurance. The Company shall, and shall cause each
Credit Party to, keep its insurable properties adequately insured at all times
by financially sound and reputable insurers, maintain such other insurance, to
such extent and against such risks, including fire and other risks insured
against by extended coverage, as is customary with companies in the same or
similar businesses operating in the same or similar locations, including (i)
public liability insurance against claims for personal injury or death or
property damage occurring upon, in, about in connection with the use of any
properties owned, occupied or controlled by it and (ii) business interruption
insurance and such other insurance as may be required by law.
Section 6.4. Conduct of Business and Maintenance of Existence.
Except for the Nextera Incorporation, the Company will continue, and will cause
each Credit Party to continue, to engage in business of the same general type as
now conducted, and will preserve, renew and keep in full force and effect, and
will cause each Subsidiary to preserve, renew and keep in full force and effect
their respective corporate,
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limited liability company or limited partnership existence, as applicable, and
their respective rights, privileges and franchises necessary or desirable in
the normal conduct of business, except that a Credit Party may discontinue any
immaterial line of business if the Board of Directors or other governing body
of such Credit Party determines that such discontinuation is in the best
interest of the Company and its Subsidiaries, taken as a whole, and could not
cause a Material Adverse Effect.
Section 6.5. Compliance with Laws. The Company will comply, and
cause each Credit Party to comply, in all respects with all applicable laws,
ordinances, rules, regulations, and requirements of governmental authorities
(including, without limitations, Environmental Laws and ERISA and the rules and
regulations thereunder) except where the failure to so comply could not cause a
Material Adverse Effect.
Section 6.6. Inspection of Property, Books and Records. The Company
will keep, and will cause each Credit Party to keep books of record and account
in which true and correct entries shall be made of all dealings and transactions
in relation to its business and activities, and will permit, and will cause each
Subsidiary to permit representatives of Purchaser, at the expense of the
Purchaser, to visit and inspect any of their respective properties, to examine
and make abstracts from any of their respective books and records and to discuss
their respective affairs, finances and accounts with their respective executive
officers and independent public accountants at such reasonable times and as
often as may reasonably be desired.
Section 6.7. Investment Company Act. No Credit Party is or will
become an open-end investment trust, unit investment trust or face-amount
certificate company that is or is required to be registered under Section 8 of
the Investment Company Act of 1940, as amended.
Section 6.8. Limitation on Debt. No Credit Party will create, incur,
assume or suffer to exist any Debt, except:
(a) Debt evidenced by the Notes;
(b) the Debt described on Schedule 5.1(e) (but only to the extent of
the outstanding balance as of the date hereof shown on such Schedule); and
(c) other Debt incurred after the date hereof, in an aggregate
principal amount not to exceed $4,161,230.
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Section 6.9. Restricted Payments; Voluntary Prepayments. (a) No
Credit Party will (i) declare or make any Restricted Payment or (ii) make any
capital expenditures, in excess of $250,000, not contained on Schedule 6.9;
provided that the following shall not be a Restricted Payment: (1) any dividend,
distribution or other payment to the Company, (2) the repurchase of any capital
stock or other equity interest of any officer, director or employee of a Credit
Party upon their termination of employment or other business relationship with a
Credit Party, (3) salary and compensation expenses and travel, payroll,
commission and similar advances to employees in the ordinary course of business,
(4) the Permitted Distribution (as defined in the Sibson US Asset Purchase
Agreement), and (5) distributions to the Sibson US principals pursuant to the
Nextera LLC Agreement.
(b) No Credit Party will directly or indirectly, optionally redeem,
retire, purchase, acquire, defease or otherwise make any payment other than
required interest payments in respect of any Debt other than (i) the Notes or
the Subsidiary Debt and (ii) payments in respect of Debt owing to any other
Credit Party.
Section 6.10. Investments. The Company will not, nor will it permit
any Credit Party to, make or acquire any Investment in any Person other than (i)
Investments in direct or indirect wholly-owned Subsidiaries and (ii)
Investments in Cash Equivalents.
Section 6.11. Negative Pledge. No Credit Party will create, assume
or suffer to exist any Lien on any asset now owned or hereafter acquired by it,
except:
(a) existing Liens listed on Schedule 6.11;
(b) (i) inchoate mechanics, workmen's and carriers' liens for
charges not delinquent, incident to current construction, (ii) mechanics,
warehousemen's, unpaid vendors' and carriers' liens incident to such
construction, (iii) statutory and common law Liens of landlords under leases to
which any Credit Party is party and (iv) Liens of carriers, warehousemen,
mechanics and materialmen or other similar statutory Liens, in each case
incurred in the ordinary course of business for sums the payment of which is not
delinquent or which are the subject of good faith proceedings by any Credit
Party;
(c) Liens incurred on deposits made in the ordinary course of
business in connection with workers' compensation, performance bonds,
unemployment insurance and other types of social security, other than any Lien
imposed by or under ERISA;
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(d) Liens for taxes not yet due;
(e) easements, rights of way, permits, licenses, zoning ordinances,
covenants, restrictions, defects, minor irregularities of title and other
similar Liens on property which in the case of any particular parcel of real
property do not materially detract from the value or utilization of such real
property;
(f) Liens incurred in connection with Debt permitted pursuant to
Section 6.8(c); and
(g) Liens arising in the ordinary course of its business which (i)
do not secure Debt, (ii) do not secure any obligation in an amount exceeding
$100,000 and (iii) do not in the aggregate materially detract from the value of
the assets of the Company and its Subsidiaries, taken as a whole, or materially
impair the use thereof in the operation of its business.
Section 6.12. Transactions with Affiliates. The Company will not,
nor will it permit any Credit Party to, directly or indirectly, pay any funds to
or for the account of, make any investment (whether by acquisition of stock or
indebtedness, by loan, advance, transfer of property, guarantee or other
agreement to pay, purchase or service, directly or indirectly, any Debt, or
otherwise) in, lease, sell, transfer or otherwise dispose of any assets,
tangible or intangible, to, or participate in, or effect any transaction in
connection with any joint enterprise or other joint arrangement with, any
Affiliate, except on terms no less favorable than terms that could be obtained
from a Person that is not an Affiliate, as determined in good faith by the Board
of Directors, managing member or the equivalent governing body of the relevant
Credit Party; provided that no determination of the Board of Directors, managing
member or the equivalent governing body shall be required with respect to any
such transactions entered into (i) in the ordinary course of business, (ii) if
such transaction, together with all related transactions, does not involve
property, funds, investments or services with a fair market value in excess of
$100,000 or (iii) in connection with the execution or performance of the
Company's obligations under the Engagement Letter.
Section 6.13. Consolidations, Mergers and Sales of Assets; Ownership
of Subsidiaries. (a) No Credit Party will consolidate or merge with or into any
other Person. No Credit Party will sell, lease or otherwise transfer, directly
or indirectly, any substantial part of the assets of any Credit Party to any
other Person. Notwithstanding the foregoing, the Company may change its legal
form to a Delaware corporation, as set forth in the Share Exchange Agreement in
the form of
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Exhibit N to the Sibson US Asset Purchase Agreement, upon 10 days prior written
notice to Purchaser together with draft documentation reflecting the same,
subject to such documentation being satisfactory to Purchaser in all respects,
including without limitation, documentation evidencing the assumption of all
liabilities and obligations hereunder by any successor entity to the Company.
(b) Except as permitted by subsection (a) above, each Credit Party
will at all times continue to own, directly or indirectly, 100% of the capital
stock or other ownership interests of each Person which is currently, or
hereafter becomes a Subsidiary of such Credit Party. No new Subsidiaries will be
created after the Closing unless the same execute and deliver the Subsidiary
Guaranty and any other documents Purchaser reasonably requests in connection
therewith; provided, however, that this requirement shall not apply to Sibson &
Company, Inc. and SC2, Inc., neither of which holds any assets.
Section 6.14. Use of Proceeds. The proceeds from the issuance and
sale of the Notes by the Company pursuant to this Agreement at the Initial
Takedown shall be used to finance in part the consummation of the Sibson
Acquisition and at the Second Takedown shall be used to finance in part the
consummation of the Delphi Acquisition.
Section 6.15. Restrictions on Certain Amendments. No Credit Party
will amend or waive, or suffer to be amended or waived, any Company Corporate
Document (including, without limitation, the Nextera LLC Agreement) or any
Material Acquisition Document from the respective forms thereof delivered to
Purchasers pursuant to Section 5.1 without the prior written consent of
Purchaser.
Section 6.16. Permanent Financing. (a) The Company will, and will
cause each Credit Party to, take all the actions which, in the reasonable
judgment of DLJSC, are necessary or desirable to obtain Permanent Financing as
soon as practicable through issuance of securities at such interest rates and
other terms as are, in the reasonable opinion of DLJSC, prevailing for new
issues of securities of comparable size and credit rating in the capital
markets at the time such Permanent Financing is consummated and obtained in
comparable transactions made on an arm's length basis between unaffiliated
parties. The amount to be financed shall be in an amount at least sufficient to
repay or redeem the Notes in full in accordance with their terms. The Company
hereby covenants and agrees that the proceeds from the Permanent Financing shall
be used to the extent required to redeem in full the Notes in accordance with
their terms.
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(b) The Company covenants that it will, and will cause each Credit
Party to, enter into such agreements as in the judgment of DLJSC are customary
in connection with the Permanent Financing, make such filings under the
Securities Act, the Exchange Act, the Trust Indenture Act of 1939, as amended,
and state securities laws as in the reasonable judgment of DLJSC shall be
required to permit consummation of the Permanent Financing and take such steps
as in the reasonable judgment of DLJSC are necessary or desirable to cause such
filings to become effective or in the judgment of DLJSC are otherwise required
to consummate the Permanent Financing.
Section 6.17. Business Activities. The Company will not, and it will
not permit any Credit Party to, enter into any business, either directly or
through any Subsidiary or joint venture, except for those businesses of the same
type as or related to those in which the Credit Parties are engaged on the date
of this Agreement.
Section 6.18. Maintenance of Separateness. The Company will, and
will cause each of its Subsidiaries to, satisfy customary corporate and limited
liability company formalities, as applicable, including the holding of regular
board of directors' and shareholders' meetings or action by directors or
shareholders without a meeting or similar meeting or actions for a limited
liability company and the maintenance of corporate or limited liability company
offices and records. Other than pursuant to any Subsidiary Guaranty entered into
pursuant to this Agreement, neither the Company nor any of its Subsidiaries
shall make any payment to a creditor of any other Subsidiary in respect of any
liability of any such Subsidiary. Any financial statements distributed to any
creditors of any Subsidiary shall clearly establish or indicate the separateness
of such Subsidiary from the Company and its other Subsidiaries. Neither the
Company nor any of its Subsidiaries shall take any action, or conduct its
affairs in a manner, which is likely to result in the corporate or limited
liability company existence of the Company or any of its Subsidiaries being
ignored, or in the assets and liabilities of the Company or any of its
Subsidiaries being substantively consolidated with those of any other such
Person in a bankruptcy, reorganization or other insolvency proceeding.
Section 6.19. KU Debt. Neither the Company nor any Credit Party
shall amend or consent to any amendment of the KU Debt.
Section 6.20. Sibson Canada. The Company will cause Sibson Canada to
deliver to Purchaser within five (5) Business Days from September 1, 1998 an
intercreditor agreement by and between the Toronto-Dominion Bank and Purchaser,
in a form reasonably satisfactory to Purchaser.
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ARTICLE VII
EVENTS OF DEFAULT
Section 7.1. Events of Default Defined; Acceleration of Maturity;
Waiver of Default. In case one or more of the following (each, an "Event of
Default"), whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation or any
administrative or governmental body, shall have occurred and be continuing:
(a) default in the payment of all or any part of the principal or
premium, if any, on any of the Notes as and when the same shall become due and
payable either at maturity, upon any redemption, by declaration or otherwise; or
(b) default in the payment of any installment of interest upon any
of the Notes or any fees payable under this Agreement as and when the same shall
become due and payable, and continuance of such default for a period of 5 days;
or
(c) failure on the part of the Company duly to observe or perform
any of the covenants contained in Sections 6.2 through 6.4, Sections 6.7 through
6.15, Section 6.17 and Section 6.19 of the Agreement; or
(d) failure on the part of any Credit Party duly to observe or
perform any of the other covenants or agreements contained in the Financing
Documents, if such failure shall continue for a period of 30 days after the date
on which written notice thereof shall have been given to the Company at the
option of and by a holder of a Note; or
(e) any Credit Party shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect in any jurisdiction or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall take any corporate action to authorize any of the
foregoing; or
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(f) an involuntary case or other proceeding shall be commenced
against any Credit Party seeking liquidation, reorganization or other relief
with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against any Credit Party under the bankruptcy laws as
now or hereafter in effect in any jurisdiction; or
(g) there shall be a default in respect of any Debt of any Credit
Party in an aggregate principal amount in excess of $500,000 whether such Debt
now exists or shall hereafter be created (excluding the Notes but including Debt
owing to any Credit Party) if such default results in acceleration of the
maturity of such Debt or enables the holder of such Debt to accelerate the
maturity thereof; or any Credit Party shall fail to pay at maturity any such
Debt whether such debt now exists or shall hereafter be created; or
(h) final judgments for the payment of money which in the aggregate
at any one time exceed $500,000 shall be rendered against any Credit Party by a
court of competent jurisdiction and shall remain undischarged for a period
(during which execution shall not be effectively stayed) of 60 days after such
judgment becomes final; or
(i) any representation, warranty, certification or statement made or
deemed made by any Credit Party in any Financing Document or which is contained
in any certificate, document or financial or other statement furnished at any
time under or in connection with any Financing Document shall prove to have been
untrue in any material respect when made or deemed made; or
(j) any member of the ERISA Group has failed to pay when due an
amount or amounts aggregating in excess of $100,000 which it shall have become
liable to pay under Title IV of ERISA; or notice of intent to terminate a
Material Plan has been filed under Title IV of ERISA by any member of the ERISA
Group, any plan administrator or any combination of the foregoing; or the PBGC
has instituted proceedings under Title IV of ERISA to terminate, to impose
liability (other than for premiums under Section 4007 of ERISA) in respect of,
or to cause a trustee to be appointed to administer any Material Plan; or a
condition has existed by reason of which the PBGC is entitled to obtain a decree
adjudicating that any Material Plan must be terminated; or there has occurred a
complete or partial withdrawal from, or a default, within the meaning of Section
4219(c)(5) of ERISA, with respect to, one or
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more Multiemployer Plans which could cause one or more members of the ERISA
Group to incur a current payment obligation in excess of $100,000; or
(k) a breach under the Engagement Letter has occurred; or
(l) any Subsidiary Guaranty shall have been disavowed thereunder, a
court of competent jurisdiction shall have determined that any Subsidiary
Guaranty is unenforceable or any guarantor thereunder shall default in the
performance of any of its obligations under any Subsidiary Guaranty; or
(m) any of the Security Documents shall for any reason cease to be
in full force and effect, or shall cease to give Purchaser the Liens, rights,
powers and privileges purported to be created thereby including, without
limitation, a perfected first priority security interest in, and Lien on, all of
the collateral covered thereby in accordance with the terms thereof; or
(n) a Change of Control has occurred;
then, and in each and every such case (other than under clauses (e) and (f) with
respect to any Credit Party), unless the principal of all the Notes shall have
already become due and payable, the Purchaser, by notice in writing to the
Company, may declare the entire principal amount of the Notes together with
accrued interest thereon to be immediately due and payable. If an Event of
Default specified in clauses (e) or (f) with respect to any Credit Party occurs,
the principal of and accrued interest on the Notes will be immediately due and
payable without any declaration or other act on the part of the Holders. If an
Event of Default shall occur and for as long as such Event of Default shall be
continuing, the Purchaser shall have the right to appoint one representative to
sit on the Board of Directors of the Company.
Notwithstanding the foregoing, in the event of any default hereunder or pursuant
to any of the Subsidiary Debt, the Company, at Purchaser's request, shall
promptly repay any or all of the Subsidiary Debt, including, at the Purchaser's
sole discretion, by means of the issuance of additional Notes by the Company on
the same terms and conditions as set forth in this Agreement.
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ARTICLE VIII
LIMITATION ON TRANSFERS
Section 8.1. Restrictions on Transfer. From and after the date of
each Takedown and their respective dates of issuance, as the case may be, none
of the Notes shall be transferable except upon the conditions specified in
Sections 8.2 and 8.3, which conditions are intended to ensure compliance with
the provisions of the Securities Act in respect of the Transfer of any of such
Notes or any interest therein. Purchaser will cause any proposed transferee of
any Notes (or any interest therein) held by it to agree to take and hold such
Notes (or any interest therein) subject to the provisions and upon the
conditions specified in this Section 8.1 and in Sections 8.2 and 8.3.
Section 8.2. Restrictive Legends. (a) Each Note issued to Purchaser
or to a subsequent transferee shall (unless otherwise permitted by the
provisions of Section 8.2(b) or Section 8.3) include a legend in substantially
the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD,
UNLESS IT HAS BEEN REGISTERED UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE AND
THEN ONLY IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER SET FORTH IN THE
SECURITIES PURCHASE AGREEMENT DATED AS OF AUGUST 31, 1998, A COPY OF WHICH
MAY BE OBTAINED FROM THE ISSUER OF THIS SECURITY AT ITS PRINCIPAL
EXECUTIVE OFFICE.
(b) Any Holders of Notes registered pursuant to the Securities Act
and qualified under applicable state securities laws may exchange such Notes on
transfer for new securities that shall not bear the legend set forth in
paragraph (a) of this Section 8.2.
Section 8.3. Notice of Proposed Transfers. (a) Five Business Days
prior to any proposed Transfer (other than Transfers of Notes (i) registered
under the Securities Act, (ii) to an Affiliate of DLJSC or a general partnership
in which DLJSC or an Affiliate of DLJSC is one of the general partners or (iii)
to be made in reliance on Rule 144A under the Securities Act) of any Notes, the
holder thereof shall give written notice to the Company of such holder's
intention to effect such Transfer, setting forth the manner and circumstances of
the proposed Transfer, and shall be
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accompanied by (i) an opinion of counsel reasonably satisfactory to the Company
addressed to the Company to the effect that the proposed Transfer of such Notes
may be effected without registration under the Securities Act, (ii) such
representation letters in form and substance reasonably satisfactory to the
Company to ensure compliance with the provisions of the Securities Act and (iii)
such letters in form and substance reasonably satisfactory to the Company from
each such transferee stating such transferee's agreement to be bound by the
terms of this Agreement. Such proposed Transfer may be effected only if the
Company shall have received such notice of transfer, opinion of counsel,
representation letters and other letters referred to in the immediately
preceding sentence, whereupon the holder of such Notes shall be entitled to
Transfer such Notes in accordance with the terms of the notice delivered by the
holder. Each Note transferred as above provided shall bear the legend set forth
in Section 8.2(a) except that such Note shall not bear such legend if the
opinion of counsel referred to above is to the further effect that neither such
legend nor the restrictions on Transfer in Sections 8.1 through 8.3 are required
in order to ensure compliance with the provisions of the Securities Act.
Five Business Days prior to any proposed Transfer of any Notes to
be made in reliance on Rule 144A under the Securities Act ("Rule 144A"), the
holder thereof shall give written notice to the Company of such holder's
intention to effect such Transfer, setting forth the manner and circumstances of
the proposed Transfer and certifying that such Transfer will be made (i) in full
compliance with Rule 144A and (ii) to a transferee that (A) such holder
reasonably believes to be a "qualified institutional buyer" within the meaning
of Rule 144A and (B) is aware that such Transfer will be made in reliance on
Rule 144A. Such proposed Transfer may be effected only if the Company shall have
received such notice of transfer, whereupon the holder of such Notes shall be
entitled to Transfer such Notes in accordance with the terms of the notice
delivered by the holder. Each Note transferred as above provided shall bear the
legend set forth in Section 8.2(a).
ARTICLE IX
MISCELLANEOUS
Section 9.1. Notice. All notices, demands and other communications
to any party hereunder shall be in writing (including telecopier or similar
writing) and shall be given to such party at its address set forth on the
signature pages hereof, or such other address as such party may hereinafter
specify for the purpose. Each such notice, demand or other communication shall
be effective (i) if given by telecopy, when such telecopy is transmitted to the
telecopy number specified on the signature
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page hereof, or (ii) if given by overnight courier, addressed as aforesaid or by
any other means, when delivered at the address specified in this Section.
Section 9.2. No Waivers; Amendments. (a) No failure or delay on the
part of any party in exercising any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof or
the exercise of any other right, power or remedy. The remedies provided for
herein are cumulative and are not exclusive of any remedies that may be
available to any party at law or in equity or otherwise.
(b) Any provision of this Agreement may be amended, supplemented or
waived if, but only if, such agreement, supplement or waiver is in writing and
is signed by the Company and the Majority Holders; provided, that without the
consent of each Holder of any Note affected thereby, an amendment, supplement or
waiver may not (a) reduce the aggregate principal amount of Notes whose Holders
must consent to an amendment, supplement or waiver, (b) reduce the rate or
extend the time for payment of interest on any Note, (c) reduce the principal
amount of or extend the stated maturity of any Note or alter the redemption
provisions with respect thereto or (d) make any Note payable in money or
property other than as stated in the Notes. In determining whether the Holders
of the requisite principal amount of Notes have concurred in any direction,
consent, or waiver as provided in this Agreement or in the Notes, Notes which
are owned by the Company or any other obligor on or guarantor of the Notes, or,
by any Person controlling, controlled by, or under common control with any of
the foregoing, shall be disregarded and deemed not to be outstanding for the
purpose of any such determination; and provided further that no such amendment,
supplement or waiver which affects the rights of Purchaser and its Affiliates
otherwise than solely in their capacities as Holders of Notes shall be effective
with respect to them without their prior written consent.
Section 9.3. Indemnification. The Company (the "Indemnifying Party")
agrees to indemnify and hold harmless Purchasers, its Affiliates, and each
Person, if any, who controls Purchaser, or any of its affiliates, within the
meaning of the Securities Act or the Exchange Act (a "Controlling Person"), and
the respective partners, agents, employees, officers and directors of Purchaser,
its Affiliates and any such Controlling Person (each an "Indemnified Party" and
collectively, the "Indemnified Parties"), from and against any and all losses,
claims, damages, liabilities and expenses (including, without limitation and as
incurred, reasonable costs of investigating, preparing or defending any such
claim or action, whether or not such Indemnified Party is a party thereto),
arising out of, or in connection with any activ-
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ities contemplated by this Agreement or any of the services rendered in
connection herewith, including, but not limited to, losses, claims, damages,
liabilities or expenses arising out of or based upon any untrue statement or any
alleged untrue statement of a material fact or any omission or any alleged
omission to state a material fact in any of the disclosure or offering or
confidential information documents (the "Disclosure Documents") pertaining to
any of the transactions or proposed transactions contemplated herein, including
any eventual refinancing or resale of the Notes, provided that the Indemnifying
Party will not be responsible for any claims, liabilities, losses, damages or
expenses that are determined by final judgment of court of competent
jurisdiction to result from such Indemnified Party's gross negligence, willful
misconduct or bad faith. The Indemnifying Party also agrees that Purchaser shall
have no liability (except for breach of provisions of this Agreement) for
claims, liabilities, damages, losses or expenses, including legal fees, incurred
by the Indemnifying Party in connection with this Agreement unless they are
determined by final judgment of a court of competent jurisdiction to result from
(a) Purchaser's gross negligence, willful misconduct or bad faith, (b)
Purchaser's use of Disclosure Documents not approved by the Indemnifying Party
or (c) the failure of Purchaser to furnish to any purchaser of securities any
Disclosure Document furnished to Purchaser by the Indemnifying Party which
corrected any untrue statement of a material fact or omission to state a
material fact contained in a Disclosure Document previously furnished to such
purchaser by Purchaser.
If any action shall be brought against an Indemnified Party with
respect to which indemnity may be sought against the Indemnifying Party under
this Agreement, such Indemnified Party shall promptly notify the Indemnifying
Party in writing and the Indemnifying Party shall, if requested by such
Indemnified Party or if the Indemnifying Party desires to do so, assume the
defense thereof, including the employment of counsel reasonably satisfactory to
such Indemnified Party and payment of all reasonable fees and expenses. The
failure to so notify the Indemnifying Party shall not affect any obligations the
Indemnifying Party may have to such Indemnified Party under this Agreement or
otherwise unless the Indemnifying Party is materially adversely affected by such
failure. Such Indemnified Party shall have the right to employ separate counsel
in such action and participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party, unless: (i)
the Indemnifying Party has failed to assume the defense and employ counsel or
(ii) the named parties to any such action (including any impleaded parties)
include such Indemnified Party and the Indemnifying Party, and such Indemnified
Party shall have been advised by counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the Indemnifying Party, in which case, if such Indemnified Party
notifies
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the Indemnifying Party in writing that it elects to employ separate counsel at
the expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense of such action or proceeding on behalf of such
Indemnified Party, provided, however, that the Indemnifying Party shall not, in
connection with any one such action or proceeding or separate but substantially
similar or related actions or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be responsible hereunder for
the reasonable fees and expenses of more than one such firm of separate counsel,
in addition to any local counsel, which counsel shall be designated by
Purchaser. The Indemnifying Party shall not be liable for any settlement of any
such action effected without the written consent of the Indemnifying Party
(which shall not be unreasonably withheld) and the Indemnifying Party agrees to
indemnify and hold harmless each Indemnified Party from and against any loss or
liability by reasons of settlement of any action effected with the consent of
the Indemnifying Party. In addition, the Indemnifying Party will not, without
the prior written consent of Purchaser, settle or compromise or consent to the
entry of any judgment in or otherwise seek to terminate any pending or
threatened action, claim, suit or proceeding in respect of which indemnification
or contribution may be sought hereunder (whether or not any Indemnified Party is
a party thereto) unless such settlement, compromise, consent, or termination
includes an express unconditional release of Purchaser and the other Indemnified
Parties, reasonably satisfactory in form and substance to Purchaser, from all
liability arising out of such action, claim, suit or proceeding.
If for any reason the foregoing indemnity is unavailable (otherwise
than pursuant to the express terms of such indemnity) to an Indemnified Party or
insufficient to hold an Indemnified Party harmless, then in lieu of
indemnifying the Indemnified Party, the Indemnifying Party shall contribute to
the amount paid or payable by such Indemnified Party as a result of such claims,
liabilities, losses, damages, or expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the Indemnifying Party
on the one hand and by Purchaser on the other from the transactions contemplated
by this Agreement or (ii) if the allocation provided by clause (i) is not
permitted under applicable law, in such proportion as is appropriate to reflect
not only the relative benefits received by the Indemnifying Party on the one
hand and Purchaser on the other, but also the relative fault of the Indemnifying
Party and Purchaser as well as any other relevant equitable considerations.
Notwithstanding the provisions of this Section 9.3, the aggregate contribution
of all Indemnified Parties shall not exceed the amount of fees actually received
by Purchaser pursuant to this Agreement. It is hereby further agreed that the
relative benefits to the Indemnifying Party on the one hand and the Purchaser on
the other with respect to the transactions contemplated hereby shall be
determined by
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reference to, among other things, whether any untrue or alleged untrue
statements of material fact or the omission or alleged omission to state a
material fact related to information supplied by the Indemnifying Party or by
Purchaser and the party's relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. No Person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.
The indemnification, contribution and expense reimbursement
obligations set forth in this Section 9.3 (i) shall be addition to any liability
the Indemnifying Party may have to any Indemnified Party at common law or
otherwise, (ii) shall survive the termination of this Agreement and the payment
in full of the Notes and (iii) shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of Purchaser or any
other Indemnified Party.
Section 9.4. Expenses. The Company agrees to pay all reasonable
out-of-pocket costs, expenses and other payments in connection with the purchase
and sale of the Notes as contemplated by this Agreement including without
limitation (i) fees and disbursements of special counsel and any local counsel
for Purchaser incurred in connection with the preparation of this Agreement,
(ii) all reasonable out-of-pocket expenses of Purchaser, including reasonable
fees and disbursements of counsel, in connection with any waiver or consent
hereunder or any amendment hereof or any Default or alleged Default hereunder
and (iii) if an Event of Default occurs, all reasonable out-of-pocket expenses
incurred by Purchaser and each holder of Notes, including reasonable fees and
disbursements of a single counsel (which counsel shall be selected by Purchaser
if Purchaser is a holder of Notes when such Event of Default occurs), in
connection with such Event of Default and collection, bankruptcy, insolvency and
other enforcement proceedings resulting therefrom.
Section 9.5. Payment. The Company agrees that, so long as Purchaser
shall own any Notes purchased by it from the Company hereunder, the Company will
make payments to Purchaser of all amounts due thereon by wire transfer by 1:00
PM (New York City time) on the date of payment to such account as is specified
beneath Purchaser's name on the signature page hereof or to such other account
or in such other similar manner as Purchaser may designate to the Company in
writing.
Section 9.6. Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the Company and Purchaser and their
respective successors and assigns; provided that the Company may not assign or
otherwise
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transfer its rights or obligations under this Agreement to any other Person
without the prior written consent of the Majority Holders except pursuant to the
Nextera Incorporation. All provisions hereunder purporting to give rights to
DLJSC and its Affiliates or to Holders are for the express benefit of such
Persons.
Section 9.7. Brokers. The Company represents and warrants that,
except for DLJSC, neither it nor any Credit Party has employed any broker,
finder, financial advisor or investment banker who might be entitled to any
brokerage, finder's or other fee or commission in connection with any
Acquisition or the sale of the Notes.
Section 9.8. New York Law; Submission to Jurisdiction; Waiver of
Jury Trial. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK. EACH PARTY HERETO HEREBY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY
FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN
SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 9.9. Severability. If any term, provision, covenant or
restriction of the Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
Section 9.10. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original with the same effect
as if the signatures thereto and hereto were upon the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers, as of the date first
above written.
NEXTERA ENTERPRISES, L.L.C.
By: /s/ XXXXXXX X. XXXXXXXXX
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Chief Financial Officer
Address:
Xxx Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Xx.
Fax No.: (000) 000-0000
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NEXTERA FUNDING, INC.
By: /s/ XXXX XXXXXXXX, III
-----------------------------------
Name: Xxxx Xxxxxxxx, III
Title: Director & President
Address:
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxxx, III
Fax No.: (000) 000-0000
Account Number and Bank for Payments:
Account Name: DLJ Securities Corp.
Bank Name: Citibank
ABA Number: 021 000 089
Account Number: 3889-6041
For Further Credit to: Nextera Funding, Inc.
Account Number: 275005759
Attn: Xxxx Xxxxx
