1
EXECUTION VERSION
EXHIBIT 10.47
NEXTERA ENTERPRISES, INC.
GUARANTEE AND SECURITY AGREEMENT
Dated as of December 30, 1999
BANKBOSTON, N.A., as Agent
2
TABLE OF CONTENTS
Page
----
1. Reference to Credit Agreement; Definitions; Certain Rules of Construction.....................................1
2. Guarantee.....................................................................................................2
2.1. Guarantee of Credit Obligations....................................................................2
2.2. Continuing Obligation..............................................................................2
2.3. Waivers with Respect to Credit Obligations.........................................................3
2.4. Lenders' Power to Waive, etc.......................................................................5
2.5. Information Regarding the Company, etc.............................................................5
2.6. Certain Guarantor Representations..................................................................6
2.7. Subrogation........................................................................................7
2.8. Subordination......................................................................................7
2.9. Future Subsidiaries; Further Assurances............................................................7
2.10. Contribution Among Guarantors.....................................................................8
3. Security......................................................................................................8
3.1. Credit Security....................................................................................8
3.1.1. Tangible Personal Property..............................................................8
3.1.2. Rights to Payment of Money..............................................................8
3.1.3. Intangibles.............................................................................9
3.1.4. Pledged Stock...........................................................................9
3.1.5. Pledged Rights..........................................................................9
3.1.6. Pledged Indebtedness....................................................................9
3.1.7. Chattel Paper, Instruments, etc.........................................................9
3.1.8. Leases..................................................................................9
3.1.9. Deposit Accounts........................................................................9
3.1.10. Collateral............................................................................10
3.1.11. Books and Records.....................................................................10
3.1.12. Insurance.............................................................................10
3.1.13. All Other Property....................................................................10
3.1.14. Proceeds and Products.................................................................10
3.1.15. Excluded Property.....................................................................10
3.2. Additional Credit Security........................................................................11
3.2.1. Real Property..........................................................................11
3.2.2. Motor Vehicles and Aircraft............................................................11
3.3. Certain Covenants with Respect to Credit Security.................................................11
3.3.1. Pledged Stock..........................................................................12
3.3.2. Accounts and Pledged Indebtedness......................................................12
3.3.3. No Liens or Restrictions on Transfer or Change of Control..............................12
3.3.4. Location of Credit Security............................................................12
3.3.5. Trade Names............................................................................13
3.3.6. Insurance..............................................................................13
-i-
3
Page
----
3.3.7. Intellectual Property..................................................................14
3.3.8. Deposit Accounts.......................................................................14
3.3.9. Modifications to Credit Security.......................................................14
3.3.10. Delivery of Documents.................................................................15
3.3.11. Perfection of Credit Security.........................................................15
3.4. Administration of Credit Security.................................................................15
3.4.1. Use of Credit Security.................................................................15
3.4.2. Accounts...............................................................................16
3.4.3. Distributions on Pledged Securities....................................................16
3.4.4. Voting Pledged Securities..............................................................16
3.5. Right to Realize upon Credit Security.............................................................17
3.5.1. Assembly of Credit Security; Receiver..................................................17
3.5.2. General Authority......................................................................17
3.5.3. Marshaling, etc........................................................................18
3.5.4. Sales of Credit Security...............................................................18
3.5.5. Sale without Registration..............................................................19
3.5.6. Application of Proceeds................................................................20
3.6. Custody of Credit Security........................................................................20
4. General.................................................................................................20
-ii-
4
NEXTERA ENTERPRISES, INC.
GUARANTEE AND SECURITY AGREEMENT
This Agreement, dated as of December 30, 1999, is among Nextera
Enterprises, Inc., a Delaware corporation (the "COMPANY"), the Subsidiaries of
the Company from time to time party hereto and BankBoston, N.A., as
administrative agent (the "AGENT") for the Lenders under the Credit Agreement
(as defined below). The parties agree as follows:
1. REFERENCE TO CREDIT AGREEMENT; DEFINITIONS; CERTAIN RULES OF CONSTRUCTION.
Reference is made to the Credit Agreement dated as of the date hereof, as from
time to time in effect (the "CREDIT AGREEMENT"), among the Company, the
Subsidiaries of the Company from time to time party thereto, the Lenders and the
Agent. Capitalized terms defined in the Credit Agreement and not otherwise
defined herein are used herein with the meanings so defined (as such definitions
may be modified or supplemented herein). Certain other capitalized terms are
used in this Agreement as specifically defined below in this Section 1. Except
as the context otherwise explicitly requires, (a) the capitalized term "Section"
refers to sections of this Agreement, (b) the capitalized term "Exhibit" refers
to exhibits to this Agreement, (c) references to a particular Section shall
include all subsections thereof, (d) the word "including" shall be construed as
"including without limitation", (e) terms defined in the UCC and not otherwise
defined herein have the meaning provided under the UCC, (f) references to a
particular statute or regulation include all rules and regulations thereunder
and any successor statute, regulation or rules, in each case as from time to
time in effect and (g) references to a particular Person include such Person's
successors and assigns to the extent not prohibited by this Agreement and the
other Credit Documents. References to "the date hereof" mean the date first set
forth above.
"ACCOUNTS" is defined in Section 3.1.2.
"AGREEMENT" means this Guarantee and Security Agreement as from time to
time in effect.
"GUARANTOR" means each of the Company's Subsidiaries party to, or which
subsequently becomes party to, this Agreement as a Guarantor.
"INTELLECTUAL PROPERTY" is defined in Section 3.3.7.
"OBLIGORS" means the Company and the Guarantors from time to time.
"PLEDGED INDEBTEDNESS" is defined in Section 3.1.6.
5
"PLEDGED RIGHTS" is defined in Section 3.1.5.
"PLEDGED SECURITIES" means the Pledged Stock, the Pledged Rights and the
Pledged Indebtedness, collectively.
"PLEDGED STOCK" is defined in Section 3.1.4.
"UCC" means the Uniform Commercial Code as in effect in Massachusetts on
the date hereof; PROVIDED, HOWEVER, that with respect to the perfection of the
Agent's Lien on the Credit Security and the effect of nonperfection thereof, the
term "UCC" means the Uniform Commercial Code as in effect in any jurisdiction
the laws of which are made applicable by section 9-103 of the Uniform Commercial
Code as in effect in Massachusetts.
2. GUARANTEE.
2.1. GUARANTEE OF CREDIT OBLIGATIONS. Each Guarantor unconditionally
guarantees that the Credit Obligations will be performed and paid in full in
cash when due and payable, whether at the stated or accelerated maturity thereof
or otherwise, this guarantee being a guarantee of payment and not of
collectability and being absolute and in no way conditional or contingent. In
the event any part of the Credit Obligations shall not have been so paid in full
when due and payable, each Guarantor will, immediately upon notice by the Agent
or, without notice, immediately upon the occurrence of a Bankruptcy Default, pay
or cause to be paid to the Agent for the account of each Lender in accordance
with the Lenders' respective Percentage Interests therein the amount of such
Credit Obligations which are then due and payable and unpaid. The obligations of
each Guarantor hereunder shall not be affected by the invalidity,
unenforceability or irrecoverability of any of the Credit Obligations as against
the Company, any other Obligor, any other guarantor thereof or any other Person.
For purposes hereof, the Credit Obligations shall be due and payable when and as
the same shall be due and payable under the terms of the Credit Agreement or any
other Credit Document notwithstanding the fact that the collection or
enforcement thereof may be stayed or enjoined under the Bankruptcy Code or other
applicable law. If, notwithstanding any other provision of this Agreement,
including the obligations incurred by it under this Agreement and the rights
granted to it by Section 2.10, enforcement of the obligations of any Guarantor
under this Agreement for the full amount of the Credit Obligations to which such
Guarantor is liable would constitute an unlawful transfer under any applicable
fraudulent conveyance or fraudulent transfer law or any comparable law, then the
obligations of such Guarantor hereunder shall be reduced to the highest amount
for which such obligations may then be enforced without resulting in an unlawful
transfer under any such law.
2.2. CONTINUING OBLIGATION. Each Guarantor acknowledges that the Lenders
have entered into the Credit Agreement (and, to the extent that the Lenders or
the Agent may enter into any future Credit Document, will have entered into such
agreement) in reliance on this Section 2 being a continuing irrevocable
agreement, and such Guarantor agrees that its
6
guarantee may not be revoked in whole or in part. The obligations of the
Guarantors hereunder shall terminate when the commitment of the Lenders to
extend credit under the Credit Agreement shall have terminated and all of the
Credit Obligations have been indefeasibly paid in full in cash and discharged;
PROVIDED, HOWEVER, that:
(1) if a claim is made upon the Lenders at any time for repayment or
recovery of any amounts or any property received by the Lenders from any
source on account of any of the Credit Obligations and the Lenders repay or
return any amounts or property so received (including interest thereon to
the extent required to be paid by the Lenders) or
(2) if the Lenders become liable for any part of such claim by reason
of (i) any judgment or order of any court or administrative authority
having competent jurisdiction, or (ii) any settlement or compromise of any
such claim (provided that, except after the occurrence and during the
continuance of an Event of Default, the Company shall have consented to
such settlement or compromise, such consent not to be unreasonably
withheld),
then the Guarantors shall remain liable under this Agreement for the amounts so
repaid or property so returned or the amounts for which the Lenders become
liable (such amounts being deemed part of the Credit Obligations) to the same
extent as if such amounts or property had never been received by the Lenders,
notwithstanding any termination hereof or the cancellation of any instrument or
agreement evidencing any of the Credit Obligations. Not later than five days
after receipt of notice from the Agent, the Guarantors shall pay to the Agent an
amount equal to the amount of such repayment or return for which the Lenders
have so become liable. Payments hereunder by a Guarantor may be required by the
Agent on any number of occasions.
2.3. WAIVERS WITH RESPECT TO CREDIT OBLIGATIONS. Except to the extent
expressly required by the Credit Agreement or any other Credit Document, each
Guarantor waives, to the fullest extent permitted by the provisions of
applicable law, all of the following (including all defenses, counterclaims and
other rights of any nature based upon any of the following):
(1) presentment, demand for payment and protest of nonpayment of any
of the Credit Obligations, and notice of protest, dishonor or
nonperformance;
(2) notice of acceptance of this guarantee and notice that credit has
been extended in reliance on such Guarantor's guarantee of the Credit
Obligations;
(3) notice of any Default or of any inability to enforce performance
of the obligations of the Company or any other Person with respect to any
Credit Document or notice of any acceleration of maturity of any Credit
Obligations;
-3-
7
(4) demand for performance or observance of, and any enforcement of
any provision of the Credit Agreement, the Credit Obligations or any other
Credit Document or any pursuit or exhaustion of rights or remedies with
respect to any Credit Security or against the Company or any other Person
in respect of the Credit Obligations or any requirement of diligence or
promptness on the part of the Agent or the Lenders in connection with any
of the foregoing;
(5) any act or omission on the part of the Agent or the Lenders which
may impair or prejudice the rights of such Guarantor, including rights to
obtain subrogation, exoneration, contribution, indemnification or any other
reimbursement from the Company or any other Person, or otherwise operate as
a deemed release or discharge;
(6) failure or delay to perfect or continue the perfection of any
security interest in any Credit Security or any other action which xxxxx or
impairs the value of, or any failure to preserve or protect the value of,
any Credit Security;
(7) any statute of limitations or any statute or rule of law which
provides that the obligation of a surety must be neither larger in amount
nor in other respects more burdensome than the obligation of the principal;
(8) any "single action" or "anti-deficiency" law which would otherwise
prevent the Lenders from bringing any action, including any claim for a
deficiency, against such Guarantor before or after the Agent's or the
Lenders' commencement or completion of any foreclosure action, whether
judicially, by exercise of power of sale or otherwise, or any other law
which would otherwise require any election of remedies by the Agent or the
Lenders; and
(9) all demands and notices of every kind with respect to the
foregoing.
Each Guarantor represents that it has obtained the advice of counsel as to the
extent to which suretyship and other defenses may be available to it with
respect to its obligations hereunder in the absence of the waivers contained in
this Section 2.3.
No delay or omission on the part of the Agent or the Lenders in exercising
any right under any Credit Document or under any other guarantee of the Credit
Obligations or with respect to the Credit Security shall operate as a waiver or
relinquishment of such right. No action which the Agent or the Lenders or the
Company or any other Obligor may take or refrain from taking with respect to the
Credit Obligations shall affect the provisions of this Agreement or the
obligations of each Guarantor hereunder. None of the Lenders' or the Agent's
rights shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or any other Obligor, or by any
noncompliance by the
-4-
8
Company or any other Obligor with any Credit Document, regardless of any
knowledge thereof which the Agent or the Lenders may have or otherwise be
charged with.
2.4. LENDERS' POWER TO WAIVE, ETC. Each Guarantor grants to the Agent and
the Lenders full power in their discretion, without notice to or consent of such
Guarantor, such notice and consent being expressly waived to the fullest extent
permitted by applicable law, and without in any way affecting the liability of
such Guarantor under its guarantee hereunder:
(1) To waive compliance with, and any Default under, and to consent to
any amendment to or modification or termination of any provision of, or to
give any waiver in respect of, the Credit Agreement, any other Credit
Document, the Credit Security, the Credit Obligations or any guarantee
thereof (each as from time to time in effect);
(2) To grant any extensions of the Credit Obligations (for any
duration), and any other indulgence with respect thereto, and to effect any
total or partial release (by operation of law or otherwise), discharge,
compromise or settlement with respect to the obligations of the Obligors or
any other Person in respect of the Credit Obligations, whether or not
rights against such Guarantor under this Agreement are reserved in
connection therewith;
(3) To take security in any form for the Credit Obligations, and to
consent to the addition to or the substitution, exchange, release or other
disposition of, or to deal in any other manner with, any part of any
property contained in the Credit Security whether or not the property, if
any, received upon the exercise of such power shall be of a character or
value the same as or different from the character or value of any property
disposed of, and to obtain, modify or release any present or future
guarantees of the Credit Obligations and to proceed against any of the
Credit Security or such guarantees in any order;
(4) To collect or liquidate or realize upon any of the Credit
Obligations or the Credit Security in any manner or to refrain from
collecting or liquidating or realizing upon any of the Credit Obligations
or the Credit Security; and
(5) To extend credit under the Credit Agreement, any other Credit
Document or otherwise in such amount as the Lenders may determine,
including increasing the amount of credit and the interest rate and fees
with respect thereto, even though the condition of the Obligors (financial
or otherwise, on an individual or Consolidated basis) may have deteriorated
since the date hereof.
2.5. INFORMATION REGARDING THE COMPANY, ETC. Each Guarantor has made such
investigation as it deems desirable of the risks undertaken by it in entering
into this Agreement and is fully satisfied that it understands all such risks.
Each Guarantor waives any obligation
-5-
9
which may now or hereafter exist on the part of the Agent or the Lenders to
inform it of the risks being undertaken by entering into this Agreement or of
any changes in such risks and, from and after the date hereof, each Guarantor
undertakes to keep itself informed of such risks and any changes therein. Each
Guarantor expressly waives any duty which may now or hereafter exist on the part
of the Agent or the Lenders to disclose to such Guarantor any matter related to
the business, operations, character, collateral, credit, condition (financial or
otherwise), income or prospects of the Company and its Affiliates or their
properties or management, whether now or hereafter known by the Agent or the
Lenders. Each Guarantor represents, warrants and agrees that it assumes sole
responsibility for obtaining from the Company all information concerning the
Credit Agreement and all other Credit Documents and all other information as to
the Company and its Affiliates or their properties or management as such
Guarantor deems necessary or desirable.
2.6. CERTAIN GUARANTOR REPRESENTATIONS. Each Guarantor represents that:
(1) it is in its best interest and in pursuit of the purposes for
which it was organized as an integral part of the business conducted and
proposed to be conducted by the Company and its Subsidiaries, and
reasonably necessary and convenient in connection with the conduct of the
business conducted and proposed to be conducted by them, to induce the
Lenders to enter into the Credit Agreement and to extend credit to the
Company by making the Guarantee contemplated by this Section 2;
(2) the credit available under the Credit Agreement will directly or
indirectly inure to its benefit;
(3) after giving effect to the foregoing considerations, the assets
and liabilities of the Company and the Guarantors and rights of
contribution among the Guarantors, including the rights provided in Section
2.10:
(1) it will not be rendered insolvent as a result of entering
into this Agreement;
(2) after giving effect to the transactions contemplated by this
Agreement, it will have assets having a fair saleable value in excess
of the amount required to pay its probable liability on its existing
debts as such debts become absolute and matured;
(3) it has, and will have, access to adequate capital for the
conduct of its business; and
(4) it has the ability to pay its debts from time to time
incurred in connection therewith as such debts mature;
-6-
10
(4) it has been advised by the Agent that the Lenders are unwilling to
enter into the Credit Agreement unless the Guarantee contemplated by this
Section 2 is given by it; and
(5) except as otherwise permitted pursuant to the Credit Agreement,
all of its equity or ownership interests are owned, directly or indirectly,
by the Company.
2.7. SUBROGATION. Each Guarantor agrees that, until the Credit Obligations
are paid in full, it will not exercise any right of reimbursement, subrogation,
contribution, offset or other claims against the Company or any other Obligor
arising by contract or operation of law in connection with any payment made or
required to be made by such Guarantor under this Agreement. After the payment in
full of the Credit Obligations, each Guarantor shall be entitled to exercise
against the Company and the other Obligors all such rights of reimbursement,
subrogation, contribution and offset, and all such other claims, to the fullest
extent permitted by law.
2.8. SUBORDINATION. Each Guarantor covenants and agrees that all
Indebtedness, claims and liabilities then or thereafter owing by the Company or
any other Obligor to such Guarantor whether arising hereunder or otherwise are
subordinated to the prior payment in full of the Credit Obligations and are so
subordinated as a claim against such Obligor or any of its assets, whether such
claim be in the ordinary course of business or in the event of voluntary or
involuntary liquidation, dissolution, insolvency or bankruptcy, so that no
payment with respect to any such Indebtedness, claim or liability will be made
or received while any Event of Default exists; PROVIDED, HOWEVER, that the
foregoing provisions shall not limit the right of any Guarantor to receive
payments in respect of such Indebtedness, claims or liabilities so long as no
Event of Default exists.
2.9. FUTURE SUBSIDIARIES; FURTHER ASSURANCES. The Company will from time to
time cause (a) any present Wholly Owned Subsidiary that is not a Guarantor
within 30 days after notice from the Agent or (b) any future Wholly Owned
Subsidiary within 30 days after any such Person becomes a Wholly Owned
Subsidiary, to join this Agreement as a Guarantor pursuant to a joinder
agreement in form and substance satisfactory to the Agent; PROVIDED, HOWEVER,
that in the event such a Wholly Owned Subsidiary is prohibited by any valid law,
statute, rule or regulation from guaranteeing the Credit Obligations, or if such
a guarantee by any Foreign Subsidiary would result in a repatriation of foreign
earnings under the Code (including the "deemed dividend" provisions of section
956 of the Code), (i) such guarantee will be limited to the extent necessary to
comply with such prohibition or to prevent such repatriation of foreign earnings
or (ii) if such limitation on the guaranteed amount is not sufficient to avoid
such prohibition or repatriation, the Company and its other Subsidiaries will
pledge the stock of such Wholly Owned Subsidiary (or as much of such stock as
may be pledged without resulting in such a repatriation) to the Agent to secure
the Credit Obligations
-7-
11
pursuant to a pledge agreement in form and substance satisfactory to the Agent.
Each Guarantor will, promptly upon the request of the Agent from time to time,
execute, acknowledge and deliver, and file and record, all such instruments, and
take all such action, as the Agent deems necessary or advisable to carry out the
intent and purpose of this Section 2.
2.10. CONTRIBUTION AMONG GUARANTORS. The Guarantors agree that, as among
themselves in their capacity as guarantors of the Credit Obligations, the
ultimate responsibility for repayment of the Credit Obligations, in the event
that the Company fails to pay when due its Credit Obligations, shall be
equitably apportioned, to the extent consistent with the Credit Documents, among
the respective Guarantors (a) in the proportion that each, in its capacity as a
guarantor, has benefited from the extensions of credit to the Company by the
Lenders under the Credit Agreement, or (b) if such equitable apportionment
cannot reasonably be determined or agreed upon among the affected Guarantors, in
proportion to their respective net worths determined on or about the date hereof
(or such later date as such Guarantor becomes party hereto). In the event that
any Guarantor, in its capacity as a guarantor, pays an amount with respect to
the Credit Obligations in excess of its proportionate share as set forth in this
Section 2.10, each other Guarantor shall, to the extent consistent with the
Credit Documents, make a contribution payment to such Guarantor in an amount
such that the aggregate amount paid by each Guarantor reflects its proportionate
share of the Credit Obligations. In the event of any default by any Guarantor
under this Section 2.10, each other Guarantor will bear, to the extent
consistent with the Credit Documents, its proportionate share of the defaulting
Guarantor's obligation under this Section 2.10. This Section 2.10 is intended to
set forth only the rights and obligations of the Guarantors among themselves and
shall not in any way affect the obligations of any Guarantor to the Lenders
under the Credit Documents (which obligations shall at all times constitute the
joint and several obligations of all the Guarantors).
3. SECURITY.
3.1. CREDIT SECURITY. As security for the payment and performance of the
Credit Obligations, each Obligor party hereto mortgages, pledges and
collaterally grants and assigns to the Agent for the benefit of the Lenders and
the holders from time to time of any Credit Obligation, and creates a security
interest in favor of the Agent for the benefit of the Lenders and such holders
in, all of such Obligor's right, title and interest in and to (but none of its
obligations or liabilities with respect to) the items and types of present and
future property described in Sections 3.1.1 through 3.1.14 (subject, however, to
Section 3.1.15), whether now owned or hereafter acquired, all of which shall be
included in the term "CREDIT SECURITY":
3.1.1. TANGIBLE PERSONAL PROPERTY. All goods, machinery, equipment,
inventory and all other tangible personal property of any nature
whatsoever, wherever located, including raw materials, work in process,
finished parts and products, supplies, spare parts, replacement parts,
merchandise for resale, computers, tapes, disks and computer equipment.
-8-
12
3.1.2. RIGHTS TO PAYMENT OF MONEY. All rights to receive the payment
of money, including accounts and receivables, rights to receive the payment
of money under contracts, franchises, licenses, permits, subscriptions or
other agreements (whether or not earned by performance), and rights to
receive payments from any other source (all such rights, other than
Financing Debt, being referred to herein as "ACCOUNTS").
3.1.3. INTANGIBLES. All of the following (to the extent not included
in Section 3.1.2): (a) contracts, franchises, licenses, permits,
subscriptions and other agreements and all rights thereunder; (b) rights
granted by others which permit such Obligor to sell or market items of
personal property; (c) United States and foreign common law and statutory
copyrights and rights in literary property and rights and licenses
thereunder; (d) trade names, United States and foreign trademarks, service
marks, internet domain names, registrations of any of the foregoing and
related good will; (e) United States and foreign patents and patent
applications; (f) computer software, designs, models, know-how, trade
secrets, rights in proprietary information, formulas, customer lists,
backlog, orders, subscriptions, royalties, catalogues, sales material,
documents, good will, inventions and processes; (g) judgments, causes in
action and claims, whether or not inchoate, and (h) all other general
intangibles and intangible property and all rights thereunder.
3.1.4. PLEDGED STOCK. (a) All shares of capital stock or other
evidence of beneficial interest in any corporation, business trust or
limited liability company, (b) all limited partnership interests in any
limited partnership, (c) all general partnership interests in any general
or limited partnership, (d) all joint venture interests in any joint
venture and (e) all options, warrants and similar rights to acquire such
capital stock or such interests. All such capital stock, interests,
options, warrants and other rights are collectively referred to as the
"PLEDGED STOCK".
3.1.5. PLEDGED RIGHTS. All rights to receive profits or surplus of, or
other Distributions (including income, return of capital and liquidating
distributions) from, any partnership, joint venture or limited liability
company, including any distributions by any such Person to partners, joint
venturers or members. All such rights are collectively referred to as the
"PLEDGED RIGHTS".
3.1.6. PLEDGED INDEBTEDNESS. All Financing Debt from time to time
owing to such Obligor from any Person (all such Financing Debt being
referred to as the "PLEDGED INDEBTEDNESS").
3.1.7. CHATTEL PAPER, INSTRUMENTS, ETC. All chattel paper,
non-negotiable instruments, negotiable instruments, documents and
investment property.
-9-
13
3.1.8. LEASES. All leases of personal property, whether such Obligor
is the lessor or the lessee thereunder.
3.1.9. DEPOSIT ACCOUNTS. All general or special deposit accounts,
including any demand, time, savings, passbook or similar account maintained
by such Obligor with any bank, trust company, savings and loan association,
credit union or similar organization, and all money, cash and cash
equivalents of such Obligor, whether or not deposited in any such deposit
account.
3.1.10. COLLATERAL. All collateral granted by third parties to, or
held by, such Obligor with respect to the Accounts, Pledged Securities,
chattel paper, instruments, leases and other items of Credit Security.
3.1.11. BOOKS AND RECORDS. All books and records, including books of
account and ledgers of every kind and nature, all electronically recorded
data (including all computer programs, disks, tapes, electronic data
processing media and software used in connection with maintaining such
Obligor's books and records), all files, correspondence and all containers
for the foregoing.
3.1.12. INSURANCE. All insurance policies which insure against any
loss or damage to any other Credit Security or which are otherwise owned by
such Obligor.
3.1.13. ALL OTHER PROPERTY. All other property, assets and items of
value of every kind and nature, tangible or intangible, absolute or
contingent, legal or equitable.
3.1.14. PROCEEDS AND PRODUCTS. All proceeds, including insurance
proceeds, and products of the items of Credit Security described or
referred to in Sections 3.1.1 through 3.1.13 and, to the extent not
included in the foregoing, all Distributions with respect to the Pledged
Securities.
3.1.15. EXCLUDED PROPERTY. Notwithstanding Sections 3.1.1 through
3.1.14 and 3.2.1, the payment and performance of the Credit Obligations
shall not be secured by, and the definitions of "Accounts", "Credit
Security", "Pledged Indebtedness", "Pledged Rights" and "Pledged Stock", as
applicable, shall not include:
(1) any contract, license, permit, lease or franchise that validly
prohibits the creation by such Obligor of a security interest in such
contract, license, permit, lease or franchise (or in any rights or property
obtained by such Obligor under such contract, license, permit, lease or
franchise); PROVIDED, HOWEVER, that the provisions of this Section 3.1.15
shall not prohibit the security interests created by this Agreement from
-10-
14
extending to the proceeds of such contract, license, permit, lease or
franchise (or such rights or property) or to the monetary value of the good
will and other general intangibles of the Obligors relating thereto;
(2) any rights or property to the extent that any valid and
enforceable law or regulation applicable to such rights or property
prohibits the creation of a security interest therein; PROVIDED, HOWEVER,
that the provisions of this Section 3.1.15 shall not prohibit the security
interests created by this Agreement from extending to the proceeds of such
rights or property or to the monetary value of the good will and other
general intangibles of the Obligors relating thereto;
(3) any lease of real or personal property to the extent that the
creation of a security interest or lien would result in a breach or default
by such Obligor under such lease or any other matter requiring the consent
of the other party to such lease;
(4) more than 66% of the outstanding voting stock or other voting
equity in any Foreign Subsidiary to the extent that the pledge of voting
stock or other voting equity above such amount would result in a
repatriation of foreign earnings under the Code (including the "deemed
dividend" provisions of section 956 of the Code); or
(5) the items described in Section 3.2 (but only in the event and to
the extent the Agent has not specified that such items be included in the
Credit Security pursuant thereto).
In addition, in the event any Obligor disposes of assets to third parties
in a transaction permitted by section 6.11 of the Credit Agreement, such assets,
but not the proceeds or products thereof, shall be released from the Lien on the
Credit Security created hereunder.
3.2. ADDITIONAL CREDIT SECURITY. As additional Credit Security, each
Obligor covenants that it will mortgage, pledge and collaterally grant and
assign to the Agent for the benefit of the Lenders and the holders from time to
time of any Credit Obligation, and will create a security interest in favor of
the Agent for the benefit of the Lenders and such holders in, all of its right,
title and interest in and to (but none of its obligations with respect to) such
of the following present or future items as the Agent may from time to time
specify by notice to such Obligor, whether now owned or hereafter acquired, and
the proceeds and products thereof, except to the extent consisting of rights or
property of the types referred to in Section 3.1.15(a) through (c), subject only
to Liens permitted by Section 3.3.3, all of which shall thereupon be included in
the term "CREDIT SECURITY":
3.2.1. REAL PROPERTY. All real property and immovable property and
fixtures, leasehold interests and easements wherever located, together with
all estates and interests of such Obligor therein, including lands,
buildings, stores, manufacturing
-11-
15
facilities and other structures erected on such property, fixed plant,
fixed equipment and all permits, rights, licenses, benefits and other
interests of any kind or nature whatsoever in respect of such real and
immovable property.
3.2.2. MOTOR VEHICLES AND AIRCRAFT. All motor vehicles and aircraft.
3.3. CERTAIN COVENANTS WITH RESPECT TO CREDIT SECURITY. Each Obligor
covenants that:
3.3.1. PLEDGED STOCK. All shares of capital stock, limited partnership
interests, membership interests and similar securities included in the
Pledged Stock shall be at all times duly authorized, validly issued, fully
paid and (in the case of capital stock and limited partnership interests)
nonassessable. Each Obligor will deliver to the Agent certificates
representing the Pledged Stock, registered, if the Agent so requests, in
the name of the Agent or its nominee or accompanied by a stock transfer
power executed in blank and, if the Agent so requests, with the signature
guaranteed, all in form and manner reasonably satisfactory to the Agent.
Pledged Stock that is not evidenced by a certificate will be registered in
the name of the Agent or its nominee on the issuer's records or an
appropriate control statement with respect thereto shall be provided to the
Agent, all in form and substance reasonably satisfactory to the Agent. The
Agent may at any time after the occurrence and during the continuance of an
Event of Default transfer into its name or the name of its nominee any
Pledged Stock. In the event the Pledged Stock includes any Margin Stock,
the Obligors will furnish to the Lenders Federal Reserve Form U-1 and take
such other action as the Agent may reasonably request to ensure compliance
with applicable laws.
3.3.2. ACCOUNTS AND PLEDGED INDEBTEDNESS. Each Obligor will,
immediately upon the receipt thereof, deliver to the Agent any promissory
note or similar instrument, but not in any event including normal invoices
in the ordinary course of business, representing any Account or Pledged
Indebtedness, after having endorsed such promissory note or instrument in
blank.
3.3.3. NO LIENS OR RESTRICTIONS ON TRANSFER OR CHANGE OF CONTROL. All
Credit Security shall be free and clear of any Liens and restrictions on
the transfer thereof, including contractual provisions which prohibit the
assignment of rights under contracts, except for Liens permitted by section
6.8 of the Credit Agreement or by this Section 3.3.3. Without limiting the
generality of the foregoing, each Obligor will in good faith attempt to
exclude from agreements, instruments, deeds or leases to which it becomes a
party after the date hereof provisions that would prevent such Obligor from
creating a security interest in such agreement, instrument, deed or lease
or any rights or property acquired thereunder as contemplated hereby. None
of the Pledged Stock shall be subject to any option to purchase or similar
rights of any Person. Except with
-12-
16
the written consent of the Agent, which consent will not be unreasonably
withheld, each Obligor will in good faith attempt to exclude from any
agreement, instrument, deed or lease provisions that would restrict the
change of control or ownership of the Company or any of its Subsidiaries,
or the creation of a security interest in the ownership of the Company or
any of its Subsidiaries.
3.3.4. LOCATION OF CREDIT SECURITY. Each Obligor shall at all times
keep its records concerning the Accounts at its chief executive office and
principal place of business, which office and place of business shall be as
set forth in exhibit 7.1 to the Credit Agreement (as from time to time
supplemented in accordance with sections 6.4.1 and 6.4.2 of the Credit
Agreement) or, so long as such Obligor shall have taken all steps
reasonably necessary to perfect the Lenders' security interest in the
Credit Security with respect to such new address, at such other address as
such Obligor may specify by notice actually received by the Agent not less
than 10 Banking Days prior to such change of address. No Obligor shall at
any time keep tangible personal property of the type referred to in Section
3.1.1 in any jurisdiction other than the jurisdictions specified in such
exhibit 7.1 (as so supplemented) or, so long as such Obligor shall have
taken all steps reasonably necessary to perfect the Lenders' security
interest in the Credit Security with respect to such other jurisdiction,
other jurisdictions as such Obligor may specify by notice actually received
by the Agent not less than 10 days prior to moving such tangible personal
property into such other jurisdiction.
3.3.5. TRADE NAMES. No Obligor will adopt or do business under any
name other than its name or names designated in exhibit 7.1 to the Credit
Agreement (as from time to time supplemented in accordance with sections
6.4.1 and 6.4.2 of the Credit Agreement) or any other name specified by
notice actually received by the Agent not less than 10 Banking Days prior
to the conduct of business under such additional name. Since its inception,
no Obligor has changed its name or adopted or conducted business under any
trade name other than a name specified in such exhibit 7.1 (as so
supplemented).
3.3.6. INSURANCE. Each insurance policy included in, or insuring
against loss or damage to, the Credit Security shall name the Agent as
additional insured party or as loss payee. No such insurance policy shall
be cancelable or subject to termination or reduction in amount or scope of
coverage until after at least 30 days' prior written notice from the
insurer to the Agent. At least 10 days prior to the expiration of any such
insurance policy for any reason, each Obligor shall furnish the Agent with
a renewal or replacement policy and evidence of payment of the premiums
therefor when due. Each Obligor grants to the Agent full power and
authority as its attorney-in-fact, effective upon notice to such Obligor
after the occurrence and during the continuance of an Event of Default, to
obtain, cancel, transfer, adjust and settle any such insurance policy and
to endorse any drafts thereon. Any amounts that the Agent receives under
-13-
17
any such policy (including return of unearned premiums) insuring against
loss or damage to the Credit Security when no Event of Default has occurred
and is continuing shall be delivered to the Obligors for the replacement,
restoration and maintenance of the Credit Security. Any such amounts that
the Agent receives after the occurrence and during the continuance of an
Event of Default shall, at the Agent's option, be applied to payment of the
Credit Obligations or to the replacement, restoration and maintenance of
the Credit Security. If any Obligor fails to provide insurance as required
by this Agreement, the Agent may, at its option, purchase such insurance,
and such Obligor will on demand pay to the Agent the amount of any payments
made by the Agent or the Lenders for such purpose, together with interest
on the amounts so disbursed from five Banking Days after the date demanded
until payment in full thereof at the Overdue Reimbursement Rate.
3.3.7. INTELLECTUAL PROPERTY. Exhibit 7.3 to the Credit Agreement (as
supplemented from time to time in accordance with sections 6.4.1 and 6.4.2
of the Credit Agreement) shall set forth the following items as of the
dates reports are required under such sections (collectively, the
"INTELLECTUAL PROPERTY"):
(1) all copyrights owned by the Obligors that are registered with the
United States Copyright Office (or any office maintaining registration of
copyrights in any foreign jurisdiction) and all applications for such
registration and
(2) all trademarks, tradenames, service marks, service names and
patents owned by the Obligors that are registered with the United States
Patent and Trademark Office (or any office maintaining registration of such
items in any state of the United States of America or any foreign
jurisdiction) and all applications for such registration.
The Obligors shall duly authorize, execute and deliver to the Agent
separate memoranda of security interests provided by the Agent with respect
to the foregoing Intellectual Property (other than Intellectual Property
excluded from the Credit Security pursuant to Section 3.2) for filing in
the offices described above. In the event any additional Intellectual
Property is registered (or applications therefor are filed) in the offices
described above, the Obligors shall (at least quarterly, as contemplated by
sections 6.4.1 and 6.4.2 of the Credit Agreement) notify the Agent and duly
authorize, execute and deliver to the Agent separate memoranda of security
interests covering such additional Intellectual Property for filing in such
offices.
3.3.8. DEPOSIT ACCOUNTS. Each Obligor shall keep all its bank and
deposit accounts only with the Agent, other Lenders or the financial
institutions listed on exhibit 7.3 to the Credit Agreement (as from time to
time supplemented in accordance with sections 6.4.1 and 6.4.2 of the Credit
Agreement) or such other financial institutions specified by notice
actually received by the Agent not less than 10
-14-
18
Banking Days prior to the establishment of such bank or deposit account
with such other financial institution. Each Obligor shall use reasonable
efforts to cause such financial institutions (other than the Lenders and
the Agent) to enter into depository agreements with the Agent in form and
substance reasonably satisfactory to the Agent, in the case of existing
deposit accounts, by March 31, 2000 and in the case of future deposit
accounts, within 30 days after such deposit account is established.
3.3.9. MODIFICATIONS TO CREDIT SECURITY. Except with the prior written
consent of the Agent, which consent will not be unreasonably withheld, no
Obligor shall amend or modify, or waive any of its rights under or with
respect to, any material Accounts, general intangibles, Pledged Securities
or leases if the effect of such amendment, modification or waiver would be
to materially reduce the amount of any such items or to materially extend
the time of payment thereof, to waive any default by any other party
thereto, or to waive or impair any material remedies of the Obligors or the
Lenders under or with respect to any such Accounts, general intangibles,
Pledged Securities or leases, in each case other than consistent with past
practice in the ordinary course of business and on an arm's-length basis.
Each Obligor will promptly give the Agent written notice of any request by
any Person for any material credit or adjustment with respect to any such
Account, general intangible, Pledged Securities or leases.
3.3.10. DELIVERY OF DOCUMENTS. Upon the Agent's request, each Obligor
shall deliver to the Agent, promptly upon such Obligor's receipt thereof,
copies of any agreements, instruments, documents or invoices comprising or
relating to the Credit Security. Pending such request, such Obligor shall
keep such items at its chief executive office and principal place of
business (as specified pursuant to Section 3.3.4).
3.3.11. PERFECTION OF CREDIT SECURITY. This Agreement shall create in
favor of the Agent, for the benefit of the Lenders, a legal, valid and
enforceable security interest in the Credit Security described herein,
subject only (in the case of Credit Security other than Pledged Stock) to
Liens permitted by section 6.8 of the Credit Agreement. In the case of the
Pledged Stock, when stock certificates representing such Pledged Stock and
stock powers related thereto duly executed in blank by the relevant Pledgor
are delivered to the Agent, and in the case of the other Credit Security
described in this Agreement, when financing statements in appropriate form
are filed in the jurisdictions specified on exhibit 7.1 to the Credit
Agreement or when Intellectual Property filings in appropriate form are
filed in appropriate offices, as set forth in Section 3.3.7, this Agreement
shall provide a fully perfected, first priority Lien on, and security
interest in, all right, title and interest of the Obligors in such Credit
Security, as security for the Credit Obligations, in each case prior and
superior in right to any other Person (except, in the case of Credit
Security other than Pledged Stock, Liens permitted by section 6.8 of the
Credit Agreement). Upon the Agent's reasonable request from time to time,
the Obligors will execute and deliver, and file
-15-
19
and record in the proper filing and recording places, all such instruments,
including financing statements, collateral assignments of copyrights,
trademarks and patents, mortgages or deeds of trust and notations on
certificates of title, and will take all such other action, as the Agent
deems reasonably necessary for confirming to it the Credit Security or to
carry out any other purpose of this Agreement or any other Credit Document.
3.4. ADMINISTRATION OF CREDIT SECURITY. The Credit Security shall be
administered as follows, and if an Event of Default shall have occurred and be
continuing, Section 3.5 shall also apply.
3.4.1. USE OF CREDIT SECURITY. Until the Agent provides written notice
to the contrary, each Obligor may use, commingle and dispose of any part of
the Credit Security in the ordinary course of its business, all subject to
section 6.11 of the Credit Agreement.
3.4.2. ACCOUNTS. To the extent specified by prior written notice from
the Agent after the occurrence and during the continuance of an Event of
Default, all sums collected or received and all property recovered or
possessed by any Obligor in connection with any Credit Security shall be
received and held by such Obligor in trust for and on the Lenders' behalf,
shall be segregated from the assets and funds of such Obligor, and shall be
delivered to the Agent for the benefit of the Lenders. Without limiting the
foregoing, upon the Agent's request after the occurrence and during the
continuance of an Event of Default, each Obligor shall institute depository
collateral accounts, lock-box receipts and similar credit procedures
providing for the direct receipt of payment on Accounts at a separate
address, the segregation of such proceeds for direct payment to the Agent
and appropriate notices to Account debtors. Upon the Agent's request after
the occurrence and during the continuance of an Event of Default, each
Obligor will cause its accounting books and records to be marked with such
legends and segregated in such manner as the Agent may specify.
3.4.3. DISTRIBUTIONS ON PLEDGED SECURITIES.
(1) Until an Event of Default shall occur and be continuing, the
respective Obligors shall be entitled, to the extent permitted by the
Credit Documents, to receive all Distributions on or with respect to the
Pledged Securities (other than Distributions constituting additional
Pledged Securities). All Distributions constituting additional Pledged
Securities will be retained by the Agent (or if received by any Obligor
shall be held by such Person in trust and shall be immediately delivered by
such Person to the Agent in the original form received, endorsed in blank)
and held by the Agent as part of the Credit Security.
-16-
20
(2) If an Event of Default shall have occurred and be continuing, all
Distributions on or with respect to the Pledged Securities shall be
retained by the Agent (or if received by any Obligor shall be held by such
Person in trust and shall be immediately delivered by it to the Agent in
the original form received, endorsed in blank) and held by the Agent as
part of the Credit Security or applied by the Agent to the payment of the
Credit Obligations in accordance with Section 3.5.6.
3.4.4. VOTING PLEDGED SECURITIES.
(1) Until an Event of Default shall occur and be continuing, the
respective Obligors shall be entitled to vote or consent with respect to
the Pledged Securities in any manner not inconsistent with the terms of any
Credit Document, and the Agent will, if so requested, execute appropriate
revocable proxies therefor.
(2) If an Event of Default shall have occurred and be continuing, if
and to the extent that the Agent shall so notify in writing the Obligor
pledging the Pledged Securities in question, only the Agent shall be
entitled to vote or consent or take any other action with respect to the
Pledged Securities (and any Obligor will, if so requested, execute
appropriate proxies therefor).
3.5. RIGHT TO REALIZE UPON CREDIT SECURITY. Except to the extent prohibited
by applicable law that cannot be waived, this Section 3.5 shall govern the
Lenders' and the Agent's rights to realize upon the Credit Security if any Event
of Default shall have occurred and be continuing. The provisions of this Section
3.5 are in addition to any rights and remedies available at law or in equity and
in addition to the provisions of any other Credit Document. In the case of a
conflict between this Section 3.5 and any other Credit Document, this Section
3.5 shall govern.
3.5.1. ASSEMBLY OF CREDIT SECURITY; RECEIVER. Each Obligor shall, upon
the Agent's request, assemble the Credit Security and otherwise make it
available to the Agent. The Agent may have a receiver appointed for all or
any portion of the Obligors' assets or business which constitutes the
Credit Security in order to manage, protect, preserve, sell and otherwise
dispose of all or any portion of the Credit Security in accordance with the
terms of the Credit Documents, to continue the operations of the Obligors
and to collect all revenues and profits therefrom to be applied to the
payment of the Credit Obligations, including the compensation and expenses
of such receiver.
3.5.2. GENERAL AUTHORITY. To the extent specified in written notice
from the Agent to the Obligor in question, each Obligor grants the Agent
full and exclusive power and authority, subject to the other terms hereof
and applicable law, to take any of the following actions (for the sole
benefit of the Agent on behalf of the Lenders and the holders from time to
time of any Credit Obligations, but at such Obligor's expense):
-17-
21
(1) To ask for, demand, take, collect, xxx for and receive all
payments in respect of any Accounts, general intangibles, Pledged
Securities or leases which such Obligor could otherwise ask for, demand,
take, collect, xxx for and receive for its own use.
(2) To extend the time of payment of any Accounts, general
intangibles, Pledged Securities or leases and to make any allowance or
other adjustment with respect thereto.
(3) To settle, compromise, prosecute or defend any action or
proceeding with respect to any Accounts, general intangibles, Pledged
Securities or leases and to enforce all rights and remedies thereunder
which such Obligor could otherwise enforce.
(4) To enforce the payment of any Accounts, general intangibles,
Pledged Securities or leases, either in the name of such Obligor or in its
own name, and to endorse the name of such Obligor on all checks, drafts,
money orders and other instruments tendered to or received in payment of
any Credit Security.
(5) To notify the third party payor with respect to any Accounts,
general intangibles, Pledged Securities or leases of the existence of the
security interest created hereby and to cause all payments in respect
thereof thereafter to be made directly to the Agent; PROVIDED, HOWEVER,
that whether or not the Agent shall have so notified such payor, such
Obligor will at its expense render all reasonable assistance to the Agent
in collecting such items and in enforcing claims thereon.
(6) To sell, transfer, assign or otherwise deal in or with any Credit
Security or the proceeds thereof, as fully as such Obligor otherwise could
do.
3.5.3. MARSHALING, ETC. Neither the Agent nor the Lenders shall be
required to make any demand upon, or pursue or exhaust any of their rights
or remedies against, any Obligor or any other guarantor, pledgor or any
other Person with respect to the payment of the Credit Obligations or to
pursue or exhaust any of their rights or remedies with respect to any
collateral therefor or any direct or indirect guarantee thereof. Neither
the Agent nor the Lenders shall be required to marshal the Credit Security
or any guarantee of the Credit Obligations or to resort to the Credit
Security or any such guarantee in any particular order, and all of its and
their rights hereunder or under any other Credit Document shall be
cumulative. To the extent it may lawfully do so, each Obligor absolutely
and irrevocably waives and relinquishes the benefit and advantage of, and
covenants not to assert against the Agent or the Lenders, any valuation,
stay, appraisement, extension, redemption or similar laws now or hereafter
existing which, but for this provision, might be applicable to the sale of
-18-
22
any Credit Security made under the judgment, order or decree of any court,
or privately under the power of sale conferred by this Agreement, or
otherwise. Without limiting the generality of the foregoing, each Obligor
(a) agrees that it will not invoke or utilize any law which might prevent,
cause a delay in or otherwise impede the enforcement of the rights of the
Agent or any Lender in the Credit Security and (b) waives its rights under
all such laws. In addition, each Obligor waives any right to prior notice
(except to the extent expressly required by this Agreement) or judicial
hearing in connection with foreclosure on or disposition of any Credit
Security, including any such right which such Obligor would otherwise have
under the Constitution of the United States of America, any state or
territory thereof or any other jurisdiction.
3.5.4. SALES OF CREDIT SECURITY. All or any part of the Credit
Security may be sold for cash or other value in any number of lots at
public or private sale, without demand, advertisement or notice; PROVIDED,
HOWEVER, that unless the Credit Security to be sold threatens to decline
speedily in value or is of a type customarily sold on a recognized market,
the Agent shall give the Obligor granting the security interest in such
Credit Security 10 days' prior written notice of the time and place of any
public sale, or the time after which a private sale may be made, which
notice each of the Obligors and the Agent agrees to be reasonable. At any
sale or sales of Credit Security, any Lender or any of its respective
officers acting on its behalf, or such Lender's assigns, may bid for and
purchase all or any part of the property and rights so sold, may use all or
any portion of the Credit Obligations owed to such Lender as payment for
the property or rights so purchased, and upon compliance with the terms of
such sale may hold and dispose of such property and rights without further
accountability to the respective Obligors, except for the proceeds of such
sale or sales pursuant to Section 3.5.6. The Obligors acknowledge that any
such sale will be made by the Agent on an "as is" basis with disclaimers of
all warranties, whether express or implied. The respective Obligors will
execute and deliver or cause to be executed and delivered such instruments,
documents, assignments, waivers, certificates and affidavits, will supply
or cause to be supplied such further information and will take such further
action, as the Agent shall reasonably request in connection with any such
sale.
3.5.5. SALE WITHOUT REGISTRATION. If, at any time when the Agent shall
determine to exercise its rights hereunder to sell all or part of the
securities included in the Credit Security, the securities in question
shall not be effectively registered under the Securities Act (or other
applicable law), the Agent may, in its sole discretion, sell such
securities by private or other sale not requiring such registration in such
manner and in such circumstances as the Agent may deem necessary or
advisable in order that such sale may be effected in accordance with
applicable securities laws without such registration and the related
delays, uncertainty and expense. Without limiting the generality of the
foregoing, in any event the Agent may, in its sole discretion, (a)
-19-
23
approach and negotiate with a single purchaser or one or more possible
purchasers to effect such sale, (b) restrict such sale to one or more
purchasers each of whom will represent and agree that such purchaser is
purchasing for its own account, for investment and not with a view to the
distribution or sale of such securities and (c) cause to be placed on
certificates representing the securities in question a legend to the effect
that such securities have not been registered under the Securities Act (or
other applicable law) and may not be disposed of in violation of the
provisions thereof. Each Obligor agrees that such manner of disposition is
commercially reasonable, that it will upon the Agent's request give any
such purchaser access to such information regarding the issuer of the
securities in question as the Agent may reasonably request and that the
Agent and the Lenders shall not incur any responsibility for selling all or
part of the securities included in the Credit Security at any private or
other sale not requiring such registration, notwithstanding the possibility
that a substantially higher price might be realized if the sale were
deferred until after registration under the Securities Act (or other
applicable law) or until made in compliance with certain other rules or
exemptions from the registration provisions under the Securities Act (or
other applicable law). Each Obligor acknowledges that no adequate remedy at
law exists for breach by it of this Section 3.5.5 and that such breach
would not be adequately compensable in damages and therefore agrees that
this Section 3.5.5 may be specifically enforced.
3.5.6. APPLICATION OF PROCEEDS. The proceeds of all sales and
collections in respect of any Credit Security or other assets of any
Obligor, all funds collected from the Obligors and any cash contained in
the Credit Security, the application of which is not otherwise specifically
provided for herein, shall be applied as follows:
(1) First, to the payment of the costs and expenses of such sales and
collections, the reasonable expenses of the Agent and the reasonable fees
and expenses of its special counsel;
(2) Second, any surplus then remaining to the payment of the Credit
Obligations in such order and manner as the Agent may in its reasonable
discretion determine; PROVIDED, HOWEVER, that any such payment shall be
distributed to the Lenders in accordance with the Credit Agreement and the
other Credit Documents; and
(3) Third, any surplus then remaining shall be paid to the Obligors,
or as otherwise provided in the UCC.
3.6. CUSTODY OF CREDIT SECURITY. Except as provided by applicable law that
cannot be waived, the Agent will have no duty as to the custody and protection
of the Credit Security, the collection of any part thereof or of any income
thereon or the preservation or exercise of
-20-
24
any rights pertaining thereto, including rights against prior parties, except
for the use of reasonable care in the custody and physical preservation of any
Credit Security in its possession. The Lenders will not be liable or responsible
for any loss or damage to any Credit Security, or for any diminution in the
value thereof, by reason of the act or omission of any agent selected by the
Agent acting in good faith.
4. GENERAL. Addresses for notices, consent to jurisdiction, jury trial
waiver, defeasance and numerous other provisions applicable to this Agreement
are contained in the Credit Agreement. The invalidity or unenforceability of any
provision hereof shall not affect the validity or enforceability of any other
provision hereof, and any invalid or unenforceable provision shall be modified
so as to be enforceable to the maximum extent of its validity or enforceability.
The headings in this Agreement are for convenience of reference only and shall
not limit, alter or otherwise affect the meaning hereof. This Agreement and the
other Credit Documents constitute the entire understanding of the parties with
respect to the subject matter hereof and thereof and supersede all prior and
current understandings and agreements, whether written or oral. This Agreement
is a Credit Document and may be executed in any number of counterparts, which
together shall constitute one instrument. This Agreement shall be governed by
and construed in accordance with the laws (other than the conflict of laws
rules) of the Commonwealth of Massachusetts, except as may be required by the
UCC of other jurisdictions with respect to matters involving the perfection of
the Agent's Lien on the Credit Security located in such other jurisdictions.
-21-
25
Each of the undersigned has caused this Agreement to be executed and
delivered by its duly authorized officer as an agreement under seal as of the
date first written above.
NEXTERA ENTERPRISES, INC.
By: ______________________________________
Name:
Title:
CE ACQUISITION CORP.
CRITIAS, INC.
ERG ACQUISITION CORP.
LEXECON INC.
NEONEXT LLC
NETNEXT, INC.
NEXTERA BUSINESS PERFORMANCE
SOLUTIONS GROUP, INC.
NEXTERA INTERACTIVE, INC.
THE PLANNING TECHNOLOGIES
GROUP, L.L.C.
PYRAMID IMAGING, INC.
SCANADA, INC.
SIBSON & COMPANY, LLC
SIBSON INTERNATIONAL, LLC
TIMAEUS, INC.
By: _____________________________________________
As an authorized officer of each of the
foregoing corporations and limited liability
companies
BANKBOSTON, N.A.,
as Agent under the Credit Agreement
By: ______________________________________
Name:
Title:
