8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  July 17, 2003

NEXTERA ENTERPRISES, INC.

(Exact name of registrant as specified in its charter)

Delaware	0-25995	97-4700410
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
One Cambridge Center, 7th Floor, Cambridge, Massachusetts		02142
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (617) 715-0200

TABLE OF CONTENTS

	Item 5. Other Events and Required FD Disclosure.
	Item 7. Financial Statements and Exhibits.
	Item 12. Results of Operations and Financial Condition.
SIGNATURE
EXHIBIT 4.1
EXHIBIT 4.2
EXHIBIT 4.3
EXHIBIT 4.4
EXHIBIT 10.1
EXHIBIT 10.2
EXHIBIT 99.1

     This Current Report on Form 8-K is filed by Nextera Enterprises, Inc., a Delaware corporation (“Nextera” or the “Company”), in connection with the matters described herein.

Item 5. Other Events and Required FD Disclosure.

     On July 17, 2003, Nextera entered into a Second Amendment to Second Amended and Restated Credit Agreement and an Amended and Restated Junior Participation Agreement, and amended its Amended and Restated Stock Purchase Warrants Nos. 6 through 9. Copies of each are filed herewith as exhibits to this Form 8-K.

Item 7. Financial Statements and Exhibits.

(c) EXHIBITS. The following exhibits are filed herewith:

4.1	Second Amended and Restated Stock Purchase Warrant dated as of July 17, 2003 by and between Nextera Enterprises, Inc. and Fleet National Bank.
4.2	Second Amended and Restated Stock Purchase Warrant dated as of July 17, 2003 by and between Nextera Enterprises, Inc. and Bank of America, N.A.
4.3	Second Amended and Restated Stock Purchase Warrant dated as of July 17, 2003 by and between Nextera Enterprises, Inc. and Fleet National Bank.
4.4	Second Amended and Restated Stock Purchase Warrant dated as of July 17, 2003 by and between Nextera Enterprises, Inc. and Bank of America, N.A.
10.1	Second Amendment to Second Amended and Restated Credit Agreement dated as of July 17, 2003 by and among Nextera Enterprises, Inc., Bank of America, N.A., Fleet National Bank and the entities listed on the signature pages thereto.
10.2	Amended and Restated Junior Credit Participation Agreement dated as of July 17, 2003, by and among Fleet National Bank, Bank of America, N.A., Knowledge Universe, Inc. and Nextera Enterprises, Inc.
99.1	Press Release dated July 31, 2003 (this exhibit is being furnished pursuant to Item 12 of Form 8-K and is not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing)

2

Item 12. Results of Operations and Financial Condition.

     On July 31, 2003, Nextera Enterprises, Inc. announced its financial results for the quarter ended June 30, 2003. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

     The attached exhibit 99.1 is being furnished pursuant to Item 12 of Form 8-K (“Disclosure of Results of Operations and Financial Condition”). The information in Item 12 of the Current Report on Form 8-K and Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall the foregoing be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

3

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:  July 31, 2003	NEXTERA ENTERPRISES, INC.
	By:	/s/ MICHAEL P. MULDOWNEY
		Michael P. Muldowney Chief Financial Officer & Chief Operating Officer

4 EX-4.1 3 a91942exv4w1.txt EXHIBIT 4.1 EXHIBIT 4.1 EXECUTION COPY NEITHER THIS WARRANT NOR THE SHARES OF STOCK ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO SALE, TRANSFER OR OTHER DISPOSITION OF THIS WARRANT OR SAID SHARES MAY BE EFFECTED WITHOUT (I) AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, OR (II) AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO COUNSEL TO THE COMPANY, THAT AN EXEMPTION FROM REGISTRATION UNDER SAID ACT IS AVAILABLE. July 17, 2003 SECOND AMENDED AND RESTATED STOCK Warrant No.: 6 PURCHASE WARRANT To Subscribe for and Purchase Class A Common Stock of NEXTERA ENTERPRISES, INC. THIS SECOND AMENDED AND RESTATED STOCK PURCHASE WARRANT ("Warrant") certifies that, for value received, Fleet National Bank (together with any subsequent transferees of all or any portion of this Warrant, the "Holder"), is entitled, upon the terms and subject to the conditions hereinafter set forth, to subscribe for and purchase from Nextera Enterprises, Inc., a Delaware corporation (hereinafter called the "Company"), up to six hundred forty-four thousand, seven hundred and four (644,704) fully paid and non-assessable shares of the Company's Class A Common Stock, $0.001 par value per share (the "Shares"), at the price equal to the Exercise Price (as defined in Section 1 hereof) (subject to adjustment as provided in Section 7 hereof). The number and character of such Shares are subject to adjustment as provided herein. Capitalized terms used herein and not defined herein shall have the meanings given such terms in that certain Second Amended and Restated Credit Agreement dated December 31, 2002, as amended by that certain First Amendment dated as of July 8, 2003, and that certain Second Amendment dated the date hereof by and among the Company, the Holder and the other lenders party thereto (the "Credit Agreement"; and together with all related promissory notes, mortgages, guaranties as the same may be further amended, restated, supplemented, or otherwise modified from time to time, agreements, documents and instruments from time to time entered into by Company and any other person or obligor pursuant thereto, the "Credit Documents"). This Warrant amends and restates in its entirety that certain Warrant for up to six hundred forty-four thousand, seven hundred and four (644,704) fully paid and non-assessable shares of the Company's Class A Common Stock, $0.001 par value per share dated on December 31, 2002 (the "Prior Warrant") made by the Company in favor of the Holder. 1. Definitions. As used herein the following terms shall have the following meanings: "Act" means the Securities Act of 1933 as amended, or a similar Federal statute and the rules and regulations of the Commission issued under that Act, as they each may, from time to time, be in effect. "Additional Shares of Common Stock" shall mean all shares of Common Stock issued (or, pursuant to Section 7(c), deemed to be issued) by the Company after the Original Issue Date, but shall not include: (A) shares of Common Stock issued or issuable upon conversion of shares of all of preferred stock of the Company outstanding as of the Original Issue Date; (B) shares of Common Stock issued or issuable upon exercise of this Warrant or any other warrant or option of the Company outstanding as of the Original Issue Date; (C) shares of Common Stock issued by way of dividend or other distribution on shares of Common Stock excluded from the definition of Additional Shares of Common Stock by the foregoing clause (A) or (B) or on Common Stock so excluded; or (D) shares issued under an employee stock purchase plan or pursuant to options exercisable for shares of Common Stock (such number subject to equitable adjustment in the event of any stock dividend, stock split, combination, reorganization, recapitalization, reclassification or other similar event), issued after the date of this Warrant to directors, officers, employees or consultants of the Company and any Subsidiary pursuant to any qualified or non-qualified stock option plan or other equity incentive plan approved by the Board of Directors of the Company, equal to the first 30% of the outstanding stock of the Company, calculated on a post-Original Issue Date, fully-diluted basis. "Common Stock" shall mean the Class A Common Stock of the Company, $0.001 par value per share. "Convertible Securities" shall mean any evidences of indebtedness, shares or other securities directly or indirectly convertible into or exchangeable for Common Stock. "Exercise Price" shall mean $0.86 per share. "New Financing Source" shall mean a source other than the Company. "Option" shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire Common Stock or Convertible Securities. "Original Issue Date" shall mean the date on which this Warrant is originally issued. -2- 2. Purchase Rights. The purchase rights represented by this Warrant are exercisable by the Holder in whole or in part (and not as to a fractional share), at any time and from time to time commencing on the date hereof and ending at 5:00 p.m. on the date (the "Expiration Date") eighteen (18) months after the indefeasible payment in full in cash or cash equivalents of the Credit Obligations. 3. Exercise of Warrant; Net Issue Exercise. 3.1 Exercise of Warrant. Subject to Section 2 above, the purchase rights represented by this Warrant may be exercised, in whole or in part and from time to time, by the surrender of this Warrant and the duly executed Notice of Exercise (the form of which is attached as Exhibit A) at the principal office of the Company and by the payment to the Company, by check, of an amount equal to the then applicable Exercise Price per share multiplied by the number of Shares then being purchased. Upon exercise, the Holder shall be entitled to receive, within a reasonable time, a certificate or certificates, issued in the Holder's name or in such name or names as the Holder may direct, for the number of Shares so purchased. The Shares so purchased shall be deemed to be issued as of the close of business on the date on which this Warrant shall have been exercised. 3.2. Net Issue Exercise. (a) In lieu of exercising this Warrant as set forth in Section 3.1, the Holder may elect to receive Shares equal to the value of this Warrant (or the portion thereof being cancelled) by surrender of this Warrant at the principal office of the Company together with notice of such election in which event the Company shall issue to the Holder a number of Shares computed using the following formula: X = Y (A - B) --------- A Where X = the number of Shares to be issued to the Holder; Y = the number of Shares purchasable under this Warrant, or if only a portion of this Warrant is being cancelled, the gross number of Shares covered by the portion of this Warrant being cancelled; A = the fair market value of one Share, as determined by the Board of Directors of the Company pursuant to paragraph (b) below, as at the time the net issue election is made pursuant to this Section (the "Determination Date"); and B = the Exercise Price (as adjusted to the date of such calculations). Such Shares shall be issued as soon as practicable after the Determination Date. (b) For purposes of this Section, fair market value of a Share shall be determined as follows: -3- (A) If the Company's Common Stock is not publicly traded at the Determination Date, the fair market value of a Share shall be a value reasonably determined by the Company's Board of Directors. In the event that the Holder disagrees with the Board of Directors' determination of fair market value, then the fair market value shall be determined by an appraiser selected by the Holder (the "Holder's Appraiser") and whose appraisal (the "Holder's Appraisal") shall be furnished to the Company within 20 days after the Board of Directors' determination of fair value, and if the Company does not object to such determination within 15 days after receipt of the Holder's appraisal, then the fair market value determined by the Holder's Appraiser shall be the fair market value of a Share. In the event that the Company objects to such determination then the Company shall select an appraiser (the "Company's Appraiser") who shall review the determination of the Holder's Appraiser and issue a report thereon (the "Company's Appraisal") within 30 days after the delivery of the Holder's Appraisal to the Company and within 10 days after the issuance of such report to the Holder's Appraiser, the Holder's Appraiser and the Company's Appraiser shall meet to negotiate in good faith to reach agreement on the fair market value of a Share, and such agreed value shall be the fair market value of a Share. In the event that the Company's Appraiser and the Holder's Appraiser are unable to reach agreement then such Appraisers shall select an appraiser (the "Third Appraiser") within 5 days after the meeting between the Holder's Appraiser and the Company's Appraiser, and the average of two appraisals, consisting of the appraisal made by the Third Appraiser and the appraisal of the Holder's Appraiser and Company's Appraiser (whichever is closest to that of the Third Appraiser), shall be conclusive and binding on the Company and the Holder. The Company and the Holder shall each pay one half (1/2) of the fees and expenses of each of the Company's Appraiser, the Holder's Appraiser and the Third Appraiser. (B) if the Company's Common Stock is publicly traded on the Determination Date, the fair market value of a Share shall be equal to (1) the average of the closing prices quoted on the Nasdaq Stock Exchange, Inc., if applicable, or the average of the last bid and asked prices of the Common Stock quoted in the Nasdaq OTC Bulletin Board or the over-the-counter-market, or (2) if the Common Stock is then traded on a national securities exchange, the average of the high and low closing prices of the Common Stock listed on the principal national securities exchange on which the Common Stock is so traded, in each case for the twenty (20) trading days preceding the Determination Date. 4. Shares to be Issued; Reservation of Shares. The Company covenants that the Shares that may be issued upon the exercise of the purchase rights represented by this Warrant will, upon issuance, be fully paid and non-assessable, and free from all liens and charges with -4- respect to the issue thereof. During the period within which the purchase rights represented by the Warrant may be exercised, the Company will at all times have authorized and reserved, for the purpose of issuance upon exercise of the purchase rights represented by this Warrant, a sufficient number of shares of its Common Stock to provide for the exercise of the right represented by this Warrant. 5. No Fractional Shares. No fractional shares shall be issued upon the exercise of this Warrant. In lieu thereof, a cash payment shall be made equal to such fraction multiplied by the fair market value of such shares of Common Stock, as determined pursuant to Section 3.2(b) above. 6. Adjustment for Merger, Consolidation or Sale of Assets. In the event that at any time or from time to time after the Original Issue Date, the Company shall merge or consolidate with or into another entity or sell all or substantially all of its assets, the Holder hereof shall thereafter have the right to receive the kind and amount of shares of stock, other securities, property or cash deliverable or payable to the holders of the Common Stock of the Company that the Holder hereof upon exercise of this Warrant would have been entitled to had the Holder hereof exercised the remaining portion of this Warrant into shares of Common Stock immediately prior thereto. 7. Adjustment of Exercise Price and Number of Shares. (a) Adjustment of Exercise Price and Number of Shares. The Exercise Price and number of shares of Common Stock issuable upon the exercise of the Warrant shall be adjusted as set forth in this Section 7 with the intent that the rights of the Holder to exercise shall not be impaired. (b) Adjustment for Combination, Consolidation, Stock Dividend or Subdivision of Common Stock. If the outstanding shares of Common Stock shall be subdivided into a greater number of shares or a dividend in Common Stock shall be paid in respect of Common Stock, the Exercise Price in effect immediately prior to such subdivision or at the record date of such dividend shall simultaneously with the effectiveness of such subdivision or immediately after the record date of such dividend be proportionately reduced. If outstanding shares of Common Stock shall be combined or consolidated into a smaller number of shares, the Exercise Price in effect immediately prior to such combination or consolidation shall, simultaneously with the effectiveness of such combination or consolidation, be proportionately increased. When any adjustment is required to be made in the Exercise Price, the number of shares of Common Stock purchasable upon the exercise of this Warrant shall be changed to the number determined by dividing (i) an amount equal to the number of shares issuable upon the exercise of this Warrant immediately prior to such adjustment, multiplied by the Exercise Price in effect immediately prior to such adjustment, by (ii) the Exercise Price in effect immediately after such adjustment. -5- (c) Issue of Options and Convertible Securities Deemed Issue of Additional Shares of Common Stock. If the Company at any time or from time to time after the Original Issue Date shall issue any Options or Convertible Securities or shall fix a record date for the determination of holders of any class of securities entitled to receive any such Options or Convertible Securities, then the maximum number of shares of Common Stock (as set forth in the instrument relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or, in the case of Convertible Securities or Options therefor, the conversion or exchange of such Convertible Securities, shall be deemed to be Additional Shares of Common Stock issued as of the time of such issue or, in case such a record date shall have been fixed, as of the close of business on such record date, provided that Additional Shares of Common Stock shall not be deemed to have been issued unless the consideration per share (determined pursuant to paragraph (e) below) of such Additional Shares of Common Stock would be less than the Exercise Price in effect on the date of and immediately prior to such issue, or such record date, as the case may be, and provided further in any such case in which Additional Shares of Common Stock are deemed to be issued: (i) No further adjustment in the Exercise Price shall be made upon the subsequent issue of Convertible Securities or shares of Common Stock upon the exercise of such Options or conversion or exchange of such Convertible Securities; (ii) If such Options or Convertible Securities by their terms provide, with the passage of time or otherwise, for any increase in the consideration payable to the Company, or decrease in the number of shares of Common Stock issuable, upon the exercise, conversion or exchange thereof, the Exercise Price computed upon the original issue thereof (or upon the occurrence of a record date with respect thereto), and any subsequent adjustments based thereon, shall, upon any such increase or decrease becoming effective, be recomputed to reflect such increase or decrease insofar as it affects such Options or the rights of conversion or exchange under such Convertible Securities; (iii) No readjustment pursuant to clause (ii) above shall have the effect of increasing the Exercise Price to an amount which exceeds the lower of (A) the Exercise Price immediately prior to the adjustment affected upon the original issue of Options or Convertible Securities (or upon the occurrence of a record date with respect thereto) pursuant to the provisions hereof, or (B) the Exercise Price that would have resulted from any issuance of Additional Shares of Common Stock between the original adjustment date and such readjustment date; (iv) Upon the expiration or termination of any unexercised Option, the Exercise Price shall be readjusted to the Exercise Price which would have been in effect at the time of such expiration or termination had such Option never been -6- issued (but including the recalculation of any intervening adjustments), and the Additional Shares of Common Stock deemed issued as the result of the original issue of such Option shall not be deemed issued for the purposes of any subsequent adjustment of the Exercise Price; and (v) In the event of any change in the number of shares of Common Stock issuable upon the exercise, conversion or exchange of any Option or Convertible Security, including, but not limited to, a change resulting from the antidilution provisions thereof, the Exercise Price then in effect shall forthwith be readjusted to such Exercise Price as would have obtained had the adjustment which was made upon the issuance of such Option or Convertible Security (prior to such change) been made upon the basis of such change, but no further adjustment shall be made for the actual issuance of Common Stock upon the exercise or conversion of any such Option or Convertible Security. (d) Adjustment of Exercise Price Upon Issuance of Additional Shares of Common Stock. In the event the Company shall at any time after the Original Issue Date issue Additional Shares of Common Stock (including Additional Shares of Common Stock deemed to be issued pursuant to paragraph (c) above), without consideration or for a consideration per share less than the Exercise Price in effect on the date of and immediately prior to such issue, then and in such event, such Exercise Price shall be reduced, concurrently with such issue, to a price (calculated to the nearest cent) calculated as follows: (i) The adjusted Exercise Price shall be equal to a fraction: (A) the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such issue (including shares described in clause (ii) below), plus the number of shares of Common Stock which the aggregate consideration received by the Company for the total number of Additional Shares of Common Stock so issued would purchase at such Exercise Price; and (B) the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to such issue (including shares described in clause (ii) below) plus the number of such Additional Shares of Common Stock so issued. (ii) For the purposes of clause (i), the number of shares of Common Stock outstanding immediately prior to such issue shall be calculated on a fully diluted basis, as if all Convertible Securities had been fully converted into shares of Common Stock immediately prior to such issuance and the Warrant and any other outstanding Options had been fully exercised immediately prior to such issuance (and any resulting Convertible Securities fully converted into Common Stock) as of such date. -7- (iii) The applicable Exercise Price shall not be reduced at the time of any issuance of Additional Shares of Common Stock if the amount of such reduction would be an amount less than $0.01, but any such amount shall be carried forward and reduction with respect thereto shall be made at the time and together with any subsequent reduction which, together with such amount and any other amounts so carried forward, shall aggregate $0.01 or more. (e) Determination of Consideration. For purposes of paragraph (d), the consideration received by the Company for the issue of any Additional Shares of Common Stock shall be computed as follows: (i) Cash and Property: Such consideration shall: (A) insofar as it consists of cash, be computed at the aggregate of cash received by the Company; (B) insofar as it consists of property other than cash, be computed at the fair market value thereof at the time of such issue, as determined in good faith by the Board of Directors; and (C) in the event Additional Shares of Common Stock are issued together with other shares or securities or other assets of the Company for consideration which covers both, be the proportion of such consideration so received, computed as provided in clauses (A) and (B) above, as determined in good faith by the Board of Directors. (ii) Options and Convertible Securities. The consideration per share received by the Company for Additional Shares of Common Stock deemed to have been issued pursuant to paragraph (c), relating to Options and Convertible Securities, shall be determined by dividing: (A) the total amount, if any, received or receivable by the Company as consideration for the issue of such Options or Convertible Securities, plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Company upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities; by (B) the maximum number of shares of Common Stock (as set forth in the instrument relating thereto, without regard to any provision -8- contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or the conversion or exchange of such Convertible Securities. (f) Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Exercise Price pursuant to this Section 7, the Company at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to the Holder a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Company shall, upon the written request at any time of the Holder, furnish or cause to be furnished to such holder a like certificate setting forth (i) such adjustments and readjustments, (ii) the Exercise Price at the time in effect, and (iii) the number of shares of Common Stock and the amount, if any, of other property which at the time would be received upon the exercise of the Warrant. 8. No Rights as a Shareholder. This Warrant does not entitle the Holder to any voting rights or other rights as a shareholder of the Company prior to exercise of this Warrant and the payment for the Shares so purchased. Notwithstanding the foregoing, the Company agrees to transmit to the Holder such information, documents and reports as are generally distributed to holders of the capital stock of the Company concurrently with the distribution thereof to the shareholders. Upon valid exercise of this Warrant and payment for the Shares so purchased in accordance with the terms of the Warrant, the Holder shall be deemed a shareholder of the Company. 9. Sale or Transfer of the Warrant; Legend. The Warrant and the Shares shall not be sold or transferred unless either (i) they first shall have been registered under the Act, or (ii) the Company first shall have been furnished with an opinion of legal counsel reasonably satisfactory to the Company to the effect that such sale or transfer is exempt from the registration requirements of the Act. Each certificate representing any Warrant shall bear the legend set out on page 1 hereof. Each certificate representing any Shares shall bear a legend substantially in the following form, as appropriate: THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. Such Warrant and Shares may be subject to additional restrictions on transfer imposed under applicable state and federal securities law. -9- 10. Put Right. Commencing on the earlier of (i) December 31, 2004 and (ii) the date upon which the Loans (as defined in the Credit Agreement) owed to Holder and the other lenders party to the Credit Agreement have been paid in full in cash or Cash Equivalents and in each case (i) and (ii) prior to the Expiration Date, the Holder shall have the right, exercised by the delivery of written notice to the Company (a "Put Notice"), to require the Company to cancel the unexercised portion of this Warrant, and all related rights in exchange for a cash payment (the "Put Payment") equal to $0.23 per share payable to the Holder within ten (10) days of receipt by the Company of the Put Notice and the original Warrant for cancellation. 11. Call Option. At any time during the one year period following the indefeasible payment in full in cash or cash equivalents of the Credit Obligations, and prior to June 30, 2004, the Company shall have the right exercised by the delivery of written notice to the Holder (a "Call Notice") to cancel this Warrant and the purchase rights hereunder in exchange for a cash payment (the "Call Payment") equal to $0.5288 per share, payable to the Holder within five (5) days after delivery by the Company of the Call Notice, provided however, that any payment made pursuant to this Section 11 may only be made out of a New Financing Source. Notwithstanding anything to the contrary contained herein, the Holder shall be entitled to exercise this Warrant in whole or in part at any time after the receipt of the Call Notice until the receipt by the Holder of the Call Payment. In the event that the Holder chooses to exercise all or a portion of the Warrant after receipt of the Call Notice, the Company shall have the option to rescind such Call Notice or to exercise its call option with respect to that portion of the Warrant which remains unexercised through the delivery of a pro rata portion of the Call Payment. The Company shall have the right to exercise the call option set forth herein one time only. 12. Modifications and Waivers. This Warrant may not be changed, waived, discharged or terminated except by an instrument in writing signed by the party against which enforcement of the same is sought. 13. Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder or the Company shall be sufficiently given or made if sent by registered or certified mail, postage prepaid, addressed to the parties as provided below: If to Holder: Fleet National Bank 100 Federal Street, 6th Floor MA DE 10006A Boston, MA 02110 Attn: Fred P. Lucy Vice President -10- with a copy to: Brown Rudnick Berlack Israels, LLP One Financial Center Boston, MA 02111 Attn: William R. Baldiga, Esquire Mary D. Bucci, Esquire If to Company: Nextera Enterprises, Inc. One Cambridge Center - 7th Floor Cambridge, MA 02142 Attn: Michael P. Muldowney, Chief Financial Officer with a copy to: Maron & Sandler 1250 4th Street Suite 550 Santa Monica, CA 90401 Attn: Stanley E. Maron, Esquire 14. Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants with the Holder that upon its receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant or any stock certificate and, in the case of any such loss, theft or destruction, of an indemnity or security reasonably satisfactory to it, and upon reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of this Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or stock certificate. 15. Representations and Warranties of Holder. By accepting this Warrant, the Holder represents and warrants that it is acquiring this Warrant and the Shares for its own account, for investment and not with a view to, or for sale in connection with, any distribution thereof or any part thereof. Holder represents and warrants that it is (a) experienced in the evaluation of businesses similar to the Company, (b) is able to fend for itself in the transactions contemplated by this Warrant, (c) has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Company, (d) has the ability to bear the economic risks of an investment in the Company, (e) has been furnished with or has had access to such information as is specified in subparagraph (b)(2) of Rule 502 promulgated under the Act and (f) has been afforded the opportunity to ask questions of and to receive answers from the Company and to obtain any additional information necessary to make an informed investment decision with respect to an investment in the Company. The Holder further represents that it is an "accredited investor" as defined in Rule 501(a) of Regulation D under the Act. -11- 16. Representations and Warranties of Company. The Company represents that: (a) The execution and delivery of this Warrant has been duly authorized by the Company's Board of Directors and constitutes the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, or other laws affecting the enforcement of creditors' rights in general and except that the enforceability of the obligations hereunder is subject to general principals of equity (regardless of whether such enforceability is considered in a proceeding at equity or at law). Neither the execution nor the delivery of this Warrant, nor fulfillment of nor compliance with the terms and provisions of this Warrant, nor the issuance of Shares upon exercise of the Warrant, will violate the terms of the certificate of incorporation or by-laws of the Company or, to the best of the Company's knowledge, any agreement (including any agreement with stockholders), instrument, judgment, decree or statute to which the Company is subject. (b) As of December 31, 2002, the authorized capital stock of the Company consisted of (i) 99,300,000 shares of Common Stock, $0.001 par value per share, 95,000,000 shares of which are designated as Class A Common Stock, of which 31,885,896 shares are issued and outstanding, and 4,300,000 shares of which are designated as Class B Common Stock, of which 3,869,570 shares are issued and outstanding, and (ii) 10,000,000 shares of Preferred Stock, $0.001 par value per share 600,000 shares of which are designated as Series A Cumulative Convertible Preferred Stock, of which 39,544 shares are issued and outstanding. (c) Except as set forth in subparagraph (b) above, and in registration statements filed by the Company under the Act or in any report filed by the Company under the Securities Exchange Act of 1934, as amended, the Company has not authorized any rights (either preemptive or other) or options to subscribe for or purchase from the Company, or any warrants or other agreements providing for or requiring the issuance by the Company of, any capital stock or any securities convertible into or exchangeable for its capital stock. (d) Sufficient shares of authorized but unissued shares of Common Stock of the Company have been reserved by appropriate corporate action with the prospective exercise of the Warrant, and, the issuance of either the Warrant or the shares of Common Stock upon exercise of the Warrant will not require any further corporate action by the stockholders or directors of the Company, will not be subject to preemptive rights (unless the exercise of the same has been irrevocably waived) in any present stockholders of the Company and will not conflict with any provision of any agreement to which the Company is a party or by which it is bound, and such Common Stock, when issued upon exercise of the -12- Warrant in accordance with its terms, will be duly authorized, fully paid and non-assessable. 17. Registration Rights. (a) Piggy Back Registration Rights. If (but without any obligation to do so) the Company shall determine to register (a "Company Registration") any of its securities for its own account or for any other person (other than a registration under the Act of shares issued in connection with any acquisition of any entity or business, shares issuable solely upon the exercise of stock options, or shares issuable solely pursuant to employee benefit plans or arrangements, including registration statements on Form S-4, S-8 or any successor form), the Company shall do the following: (i) promptly give the Holder written notice thereof (which shall include a list of the jurisdictions in which the Company intends to attempt to register or qualify such securities under the applicable blue sky or other state securities laws); and (ii) include among the securities which it then registers or qualifies all Registrable Securities (as defined below) specified in a written request or requests, made within fifteen (15) days after receipt of the written notice from the Company, by the Holder. The Holder shall have the right to withdraw its request for inclusion of its Registrable Securities in any registration statement by giving written notice to the Company of its request to withdraw. The Company may withdraw a Company Registration at any time prior to the time it becomes effective whether or not the Holder has elected to include Registrable Securities (as defined below) in such registration. For purposes of this Warrant, the term "Registrable Securities" shall mean all shares of Common Stock issued and issuable upon exercise of the Warrant; provided however, that shares of Common Stock which are "Registrable Securities" shall cease to be Registrable Securities (a) upon any sale pursuant to a registration statement under the Act, Section 4(1) of the Act or Rule 144 promulgated under the Act or (b) at such time as such shares of Common Stock are freely saleable under Rule 144(k) promulgated under the Act (or a successor provision). (b) Limitations of Registration. If and to the extent that the Holder shall have, at the time of the delivery of the written request referred to in subparagraph (a) above, no present intention of selling or distribution, the Company shall be obligated to effect such registration, qualification or compliance with respect to the Holder's Registrable Securities only if and to the extent, in each case, that such registration, qualification and compliance are at the -13- time permitted by the applicable statutes or rules and regulations thereunder or the practices of the governmental authority concerned. (c) Registration Procedures. In the case of each registration, qualification or compliance pursuant to this Section 17, the Company will keep the Holder advised in writing as to the initiation of proceedings for such registration, qualification and compliance and as to the completion thereof, and will advise the Holder, upon written request, of the progress of such proceedings. At the expense of the Company, the Company will (i) keep such registration, qualification and compliance current and effective for a period of the earlier of (A) 120 days, or (B) until the Holder has completed the distributions relating thereto, including, without limitation, the filing of post-effective amendments and supplements to any registration statement or prospectus, as necessary to permit the sale or distribution of Registrable Securities not theretofore sold or distributed, and (ii) take all necessary action under any applicable blue sky or other state securities laws to permit such exercise, sale or distribution, all as reasonably requested by such Holder; provided, however, that the Company shall not be required in connection therewith to qualify as a foreign corporation in any jurisdiction in which it is not now so qualified or to take any action that would subject it to general consent to service of process or taxation. The Company shall not be required to file, cause to become effective or maintain the effectiveness of any registration statement that contemplates a distribution of securities on a delayed or continuous basis pursuant to Rule 415 under the Act. (d) Registration Rights. Anything to the contrary in Section 17 notwithstanding, in connection with any Company Registration, the Company shall not be required to include any of the Holder's Registrable Securities in such Company Registration unless the Holder accepts the terms of the underwriting as agreed upon between the Company and the underwriters selected by it (or by other persons entitled to select the underwriters), and then only in such quantity as the underwriters determine in their sole discretion will not jeopardize the success of the offering by the Company or will not adversely affect the aggregate proceeds to the Company from the offering. If the total amount of securities, including Registrable Securities and all other securities requested to be included in such offering by any stockholder of the Company, exceeds the amount of securities that the underwriters determine in their sole discretion is compatible with the success of the offering or the aggregate proceeds to the Company from the offering, then the number of Shares to be offered for the account of the Holder and all such other persons participating in such registration shall be reduced (to zero if necessary) or limited pro rata in proportion to the respective number of Shares requested to be registered by the Holder and each other person to reduce the total number of Shares requested to be included in such offering to the number of Shares, if any, recommended by such underwriters. -14- (e) Indemnification. The Company will indemnify, defend and hold harmless the Holder to the fullest extent that such agreement is enforceable under applicable law against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of material fact contained therein (or in any related registration statement, notification or the like) or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Company of any rule or regulation promulgated under the Act applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, qualification or compliance, and will reimburse the Holder for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action provided, however, that the Company will not be liable in any such case to the extent that any such claim, loss, damage or liability arises out of or is based on any untrue statement or omission based upon written information furnished to the Company by an instrument duly executed by the Holder and stated to be specifically for use therein. (f) The Holder will indemnify, defend and hold harmless the Company to the fullest extent that such agreement is enforceable under applicable law against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of material fact contained therein (or in any related registration statement, notification or the like) or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Holder of any rule or regulation promulgated under the Act applicable to the Holder and relating to action or inaction required of the Holder in connection with any such registration, qualification or compliance, and will reimburse the Company for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action, in each case to the extent (and only to the extent) that such claims, losses, damages, liabilities and actions relate to reliance on any untrue statement or omission based upon written information furnished to the Company by an instrument duly executed by the Holder and stated to be specifically for use in the registration statement, provided, however, that such Holder's obligations hereunder shall be limited to an amount equal to the proceeds received by such Holder of the Registrable Securities sold in such registration. (g) Notwithstanding the foregoing, to the extent that the provisions on indemnification contained in the underwriting agreement entered into in connection with a Company Registration are in conflict with the provisions of this Section 17, the provisions in the underwriting agreement shall control. -15- 18. Binding Effect on Successors. This Warrant shall be binding upon any corporation succeeding the Company by merger, consolidation or acquisition of all or substantially all of the Company's assets, and all of the obligations of the Company relating to the Shares issuable upon exercise of this Warrant shall survive the exercise and termination of this Warrant and all of the covenants and agreements of the Company shall inure to the benefit of the successors and assigns of the Holder. 19. Amendments. No approval, consent, amendment or waiver of this Agreement shall be effective unless in writing and signed by the Company and Holder. 20. Counterparts. This Agreement may be executed in any number of counterparts and each such counterpart shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 21. Governing Law. This Warrant shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the Commonwealth of Massachusetts. 22. Entire Agreement. This Warrant constitutes the entire agreement among the parties hereto pertaining to the subject matter hereof, and any and all other written or oral agreements relating to the subject matter hereof existing among any of the parties hereto are expressly cancelled, including, but not limited to, the Prior Warrant. -16- IN WITNESS WHEREOF, the parties have caused this Warrant to be executed by their duly authorized representatives as of the date first above written. NEXTERA ENTERPRISES, INC., as Company By: /s/ Michael P. Muldowney --------------------------- Michael P. Muldowney Chief Financial Officer FLEET NATIONAL BANK, as Agent, Lender and Holder By: /s/ Fred P. Lucy --------------------------- Fred P. Lucy Vice President -17- EXHIBIT A NOTICE OF EXERCISE To: NEXTERA ENTERPRISES, INC. 1. The undersigned hereby elects to purchase _______ shares of Common Stock of Nextera Enterprises, Inc. pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price of such shares in full. 2. Please issue a certificate or certificates representing said shares in the name of the undersigned or in such other name or names as are specified below. 3. The undersigned represents that the aforesaid shares of Common Stock are being acquired for the account of the undersigned for investment and not with a view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares. The undersigned further represents that such shares shall not be sold or transferred unless either (1) they first shall have been registered under the Securities Act of 1933, as amended, or (ii) the Company first shall have been furnished with an opinion of legal counsel reasonably satisfactory to the Company to the effect that such sale or transfer is exempt from the registration requirement. 4. In the event of partial exercise, please re-issue an appropriate Warrant exercisable into the remaining shares. ------------------------------- (Name) ------------------------------- (Address) ------------------------------- (Signature) ------------------------------- (Date) -18- EX-4.2 4 a91942exv4w2.txt EXHIBIT 4.2 EXHIBIT 4.2 EXECUTION COPY NEITHER THIS WARRANT NOR THE SHARES OF STOCK ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO SALE, TRANSFER OR OTHER DISPOSITION OF THIS WARRANT OR SAID SHARES MAY BE EFFECTED WITHOUT (I) AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, OR (II) AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO COUNSEL TO THE COMPANY, THAT AN EXEMPTION FROM REGISTRATION UNDER SAID ACT IS AVAILABLE. July 17, 2003 SECOND AMENDED AND RESTATED Warrant No.: 7 STOCK PURCHASE WARRANT To Subscribe for and Purchase Class A Common Stock of NEXTERA ENTERPRISES, INC. THIS SECOND AMENDED AND RESTATED STOCK PURCHASE WARRANT ("Warrant") certifies that, for value received, Banc of America Strategic Solutions, Inc. (together with any subsequent transferees of all or any portion of this Warrant, the "Holder"), is entitled, upon the terms and subject to the conditions hereinafter set forth, to subscribe for and purchase from Nextera Enterprises, Inc., a Delaware corporation (hereinafter called the "Company"), up to seven hundred seventy-three thousand, six hundred and forty-six (773,646) fully paid and non-assessable shares of the Company's Class A Common Stock, $0.001 par value per share (the "Shares"), at the price equal to the Exercise Price (as defined in Section 1 hereof) (subject to adjustment as provided in Section 7 hereof). The number and character of such Shares are subject to adjustment as provided herein. Capitalized terms used herein and not defined herein shall have the meanings given such terms in that certain Second Amended and Restated Credit Agreement dated December 31, 2002, as amended by that certain First Amendment dated as of July 8, 2003, and that certain Second Amendment dated the date hereof by and among the Company, the Holder and the other lenders party thereto (as the same may be further amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement"; and together with all related promissory notes, mortgages, guaranties, agreements, documents and instruments from time to time entered into by Company and any other person or obligor pursuant thereto, the "Credit Documents"). This Warrant amends and restates in its entirety that certain Warrant for up to seven hundred seventy-three thousand, six hundred and forty-six (773,646) fully paid and non-assessable shares of the Company's Class A Common Stock, $0.001 par value per share issued on December 31, 2002 (the "Prior Warrant") made by the Company in favor of the Holder. 1. Definitions. As used herein the following terms shall have the following meanings: "Act" means the Securities Act of 1933 as amended, or a similar Federal statute and the rules and regulations of the Commission issued under that Act, as they each may, from time to time, be in effect. "Additional Shares of Common Stock" shall mean all shares of Common Stock issued (or, pursuant to Section 7(c), deemed to be issued) by the Company after the Original Issue Date, but shall not include: (A) shares of Common Stock issued or issuable upon conversion of shares of all of preferred stock of the Company outstanding as of the Original Issue Date; (B) shares of Common Stock issued or issuable upon exercise of this Warrant or any other warrant or option of the Company outstanding as of the Original Issue Date; (C) shares of Common Stock issued by way of dividend or other distribution on shares of Common Stock excluded from the definition of Additional Shares of Common Stock by the foregoing clause (A) or (B) or on Common Stock so excluded; or (D) shares issued under an employee stock purchase plan or pursuant to options exercisable for shares of Common Stock (such number subject to equitable adjustment in the event of any stock dividend, stock split, combination, reorganization, recapitalization, reclassification or other similar event), issued after the date of this Warrant to directors, officers, employees or consultants of the Company and any Subsidiary pursuant to any qualified or non-qualified stock option plan or other equity incentive plan approved by the Board of Directors of the Company, equal to the first 30% of the outstanding stock of the Company, calculated on a post-Original Issue Date, fully-diluted basis. "Common Stock" shall mean the Class A Common Stock of the Company, $0.001 par value per share. "Convertible Securities" shall mean any evidences of indebtedness, shares or other securities directly or indirectly convertible into or exchangeable for Common Stock. "Exercise Price" shall mean $0.86 per share. "New Financing Source" shall mean a source other than the Company. "Option" shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire Common Stock or Convertible Securities. "Original Issue Date" shall mean the date on which this Warrant is originally issued. -2- 2. Purchase Rights. The purchase rights represented by this Warrant are exercisable by the Holder in whole or in part (and not as to a fractional share), at any time and from time to time commencing on the date hereof and ending at 5:00 p.m. on the date (the "Expiration Date") eighteen (18) months after the indefeasible payment in full in cash or cash equivalents of the Credit Obligations. 3. Exercise of Warrant; Net Issue Exercise. 3.1 Exercise of Warrant. Subject to Section 2 above, the purchase rights represented by this Warrant may be exercised, in whole or in part and from time to time, by the surrender of this Warrant and the duly executed Notice of Exercise (the form of which is attached as Exhibit A) at the principal office of the Company and by the payment to the Company, by check, of an amount equal to the then applicable Exercise Price per share multiplied by the number of Shares then being purchased. Upon exercise, the Holder shall be entitled to receive, within a reasonable time, a certificate or certificates, issued in the Holder's name or in such name or names as the Holder may direct, for the number of Shares so purchased. The Shares so purchased shall be deemed to be issued as of the close of business on the date on which this Warrant shall have been exercised. 3.2. Net Issue Exercise. (a) In lieu of exercising this Warrant as set forth in Section 3.1, the Holder may elect to receive Shares equal to the value of this Warrant (or the portion thereof being cancelled) by surrender of this Warrant at the principal office of the Company together with notice of such election in which event the Company shall issue to the Holder a number of Shares computed using the following formula: X = Y (A - B) --------- A Where X = the number of Shares to be issued to the Holder; Y = the number of Shares purchasable under this Warrant, or if only a portion of this Warrant is being cancelled, the gross number of Shares covered by the portion of this Warrant being cancelled; A = the fair market value of one Share, as determined by the Board of Directors of the Company pursuant to paragraph (b) below, as at the time the net issue election is made pursuant to this Section (the "Determination Date"); and B = the Exercise Price (as adjusted to the date of such calculations). Such Shares shall be issued as soon as practicable after the Determination Date. (b) For purposes of this Section, fair market value of a Share shall be determined as follows: -3- (A) If the Company's Common Stock is not publicly traded at the Determination Date, the fair market value of a Share shall be a value reasonably determined by the Company's Board of Directors. In the event that the Holder disagrees with the Board of Directors' determination of fair market value, then the fair market value shall be determined by an appraiser selected by the Holder (the "Holder's Appraiser") and whose appraisal (the "Holder's Appraisal") shall be furnished to the Company within 20 days after the Board of Directors' determination of fair value, and if the Company does not object to such determination within 15 days after receipt of the Holder's appraisal, then the fair market value determined by the Holder's Appraiser shall be the fair market value of a Share. In the event that the Company objects to such determination then the Company shall select an appraiser (the "Company's Appraiser") who shall review the determination of the Holder's Appraiser and issue a report thereon (the "Company's Appraisal") within 30 days after the delivery of the Holder's Appraisal to the Company and within 10 days after the issuance of such report to the Holder's Appraiser, the Holder's Appraiser and the Company's Appraiser shall meet to negotiate in good faith to reach agreement on the fair market value of a Share, and such agreed value shall be the fair market value of a Share. In the event that the Company's Appraiser and the Holder's Appraiser are unable to reach agreement then such Appraisers shall select an appraiser (the "Third Appraiser") within 5 days after the meeting between the Holder's Appraiser and the Company's Appraiser, and the average of two appraisals, consisting of the appraisal made by the Third Appraiser and the appraisal of the Holder's Appraiser and Company's Appraiser (whichever is closest to that of the Third Appraiser), shall be conclusive and binding on the Company and the Holder. The Company and the Holder shall each pay one half (1/2) of the fees and expenses of each of the Company's Appraiser, the Holder's Appraiser and the Third Appraiser. (B) if the Company's Common Stock is publicly traded on the Determination Date, the fair market value of a Share shall be equal to (1) the average of the closing prices quoted on the Nasdaq Stock Exchange, Inc., if applicable, or the average of the last bid and asked prices of the Common Stock quoted in the Nasdaq OTC Bulletin Board or the over-the-counter-market, or (2) if the Common Stock is then traded on a national securities exchange, the average of the high and low closing prices of the Common Stock listed on the principal national securities exchange on which the Common Stock is so traded, in each case for the twenty (20) trading days preceding the Determination Date. 4. Shares to be Issued; Reservation of Shares. The Company covenants that the Shares that may be issued upon the exercise of the purchase rights represented by this Warrant will, upon issuance, be fully paid and non-assessable, and free from all liens and charges with -4- respect to the issue thereof. During the period within which the purchase rights represented by the Warrant may be exercised, the Company will at all times have authorized and reserved, for the purpose of issuance upon exercise of the purchase rights represented by this Warrant, a sufficient number of shares of its Common Stock to provide for the exercise of the right represented by this Warrant. 5. No Fractional Shares. No fractional shares shall be issued upon the exercise of this Warrant. In lieu thereof, a cash payment shall be made equal to such fraction multiplied by the fair market value of such shares of Common Stock, as determined pursuant to Section 3.2(b) above. 6. Adjustment for Merger, Consolidation or Sale of Assets. In the event that at any time or from time to time after the Original Issue Date, the Company shall merge or consolidate with or into another entity or sell all or substantially all of its assets, the Holder hereof shall thereafter have the right to receive the kind and amount of shares of stock, other securities, property or cash deliverable or payable to the holders of the Common Stock of the Company that the Holder hereof upon exercise of this Warrant would have been entitled to had the Holder hereof exercised the remaining portion of this Warrant into shares of Common Stock immediately prior thereto. 7. Adjustment of Exercise Price and Number of Shares. (a) Adjustment of Exercise Price and Number of Shares. The Exercise Price and number of shares of Common Stock issuable upon the exercise of the Warrant shall be adjusted as set forth in this Section 7 with the intent that the rights of the Holder to exercise shall not be impaired. (b) Adjustment for Combination, Consolidation, Stock Dividend or Subdivision of Common Stock. If the outstanding shares of Common Stock shall be subdivided into a greater number of shares or a dividend in Common Stock shall be paid in respect of Common Stock, the Exercise Price in effect immediately prior to such subdivision or at the record date of such dividend shall simultaneously with the effectiveness of such subdivision or immediately after the record date of such dividend be proportionately reduced. If outstanding shares of Common Stock shall be combined or consolidated into a smaller number of shares, the Exercise Price in effect immediately prior to such combination or consolidation shall, simultaneously with the effectiveness of such combination or consolidation, be proportionately increased. When any adjustment is required to be made in the Exercise Price, the number of shares of Common Stock purchasable upon the exercise of this Warrant shall be changed to the number determined by dividing (i) an amount equal to the number of shares issuable upon the exercise of this Warrant immediately prior to such adjustment, multiplied by the Exercise Price in effect immediately prior to such adjustment, by (ii) the Exercise Price in effect immediately after such adjustment. -5- (c) Issue of Options and Convertible Securities Deemed Issue of Additional Shares of Common Stock. If the Company at any time or from time to time after the Original Issue Date shall issue any Options or Convertible Securities or shall fix a record date for the determination of holders of any class of securities entitled to receive any such Options or Convertible Securities, then the maximum number of shares of Common Stock (as set forth in the instrument relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or, in the case of Convertible Securities or Options therefor, the conversion or exchange of such Convertible Securities, shall be deemed to be Additional Shares of Common Stock issued as of the time of such issue or, in case such a record date shall have been fixed, as of the close of business on such record date, provided that Additional Shares of Common Stock shall not be deemed to have been issued unless the consideration per share (determined pursuant to paragraph (e) below) of such Additional Shares of Common Stock would be less than the Exercise Price in effect on the date of and immediately prior to such issue, or such record date, as the case may be, and provided further in any such case in which Additional Shares of Common Stock are deemed to be issued: (i) No further adjustment in the Exercise Price shall be made upon the subsequent issue of Convertible Securities or shares of Common Stock upon the exercise of such Options or conversion or exchange of such Convertible Securities; (ii) If such Options or Convertible Securities by their terms provide, with the passage of time or otherwise, for any increase in the consideration payable to the Company, or decrease in the number of shares of Common Stock issuable, upon the exercise, conversion or exchange thereof, the Exercise Price computed upon the original issue thereof (or upon the occurrence of a record date with respect thereto), and any subsequent adjustments based thereon, shall, upon any such increase or decrease becoming effective, be recomputed to reflect such increase or decrease insofar as it affects such Options or the rights of conversion or exchange under such Convertible Securities; (iii) No readjustment pursuant to clause (ii) above shall have the effect of increasing the Exercise Price to an amount which exceeds the lower of (A) the Exercise Price immediately prior to the adjustment affected upon the original issue of Options or Convertible Securities (or upon the occurrence of a record date with respect thereto) pursuant to the provisions hereof, or (B) the Exercise Price that would have resulted from any issuance of Additional Shares of Common Stock between the original adjustment date and such readjustment date; (iv) Upon the expiration or termination of any unexercised Option, the Exercise Price shall be readjusted to the Exercise Price which would have been in effect at the time of such expiration or termination had such Option never been -6- issued (but including the recalculation of any intervening adjustments), and the Additional Shares of Common Stock deemed issued as the result of the original issue of such Option shall not be deemed issued for the purposes of any subsequent adjustment of the Exercise Price; and (v) In the event of any change in the number of shares of Common Stock issuable upon the exercise, conversion or exchange of any Option or Convertible Security, including, but not limited to, a change resulting from the antidilution provisions thereof, the Exercise Price then in effect shall forthwith be readjusted to such Exercise Price as would have obtained had the adjustment which was made upon the issuance of such Option or Convertible Security (prior to such change) been made upon the basis of such change, but no further adjustment shall be made for the actual issuance of Common Stock upon the exercise or conversion of any such Option or Convertible Security. (d) Adjustment of Exercise Price Upon Issuance of Additional Shares of Common Stock. In the event the Company shall at any time after the Original Issue Date issue Additional Shares of Common Stock (including Additional Shares of Common Stock deemed to be issued pursuant to paragraph (c) above), without consideration or for a consideration per share less than the Exercise Price in effect on the date of and immediately prior to such issue, then and in such event, such Exercise Price shall be reduced, concurrently with such issue, to a price (calculated to the nearest cent) calculated as follows: (i) The adjusted Exercise Price shall be equal to a fraction: (A) the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such issue (including shares described in clause (ii) below), plus the number of shares of Common Stock which the aggregate consideration received by the Company for the total number of Additional Shares of Common Stock so issued would purchase at such Exercise Price; and (B) the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to such issue (including shares described in clause (ii) below) plus the number of such Additional Shares of Common Stock so issued. (ii) For the purposes of clause (i), the number of shares of Common Stock outstanding immediately prior to such issue shall be calculated on a fully diluted basis, as if all Convertible Securities had been fully converted into shares of Common Stock immediately prior to such issuance and the Warrant and any other outstanding Options had been fully exercised immediately prior to such issuance (and any resulting Convertible Securities fully converted into Common Stock) as of such date. (iii) The applicable Exercise Price shall not be reduced at the time of any issuance of Additional Shares of Common Stock if the amount of such -7- reduction would be an amount less than $0.01, but any such amount shall be carried forward and reduction with respect thereto shall be made at the time and together with any subsequent reduction which, together with such amount and any other amounts so carried forward, shall aggregate $0.01 or more. (e) Determination of Consideration. For purposes of paragraph (d), the consideration received by the Company for the issue of any Additional Shares of Common Stock shall be computed as follows: (i) Cash and Property: Such consideration shall: (A) insofar as it consists of cash, be computed at the aggregate of cash received by the Company; (B) insofar as it consists of property other than cash, be computed at the fair market value thereof at the time of such issue, as determined in good faith by the Board of Directors; and (C) in the event Additional Shares of Common Stock are issued together with other shares or securities or other assets of the Company for consideration which covers both, be the proportion of such consideration so received, computed as provided in clauses (A) and (B) above, as determined in good faith by the Board of Directors. (ii) Options and Convertible Securities. The consideration per share received by the Company for Additional Shares of Common Stock deemed to have been issued pursuant to paragraph (c), relating to Options and Convertible Securities, shall be determined by dividing: (A) the total amount, if any, received or receivable by the Company as consideration for the issue of such Options or Convertible Securities, plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Company upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities; by (B) the maximum number of shares of Common Stock (as set forth in the instrument relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number) issuable -8- upon the exercise of such Options or the conversion or exchange of such Convertible Securities. (f) Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Exercise Price pursuant to this Section 7, the Company at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to the Holder a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Company shall, upon the written request at any time of the Holder, furnish or cause to be furnished to such holder a like certificate setting forth (i) such adjustments and readjustments, (ii) the Exercise Price at the time in effect, and (iii) the number of shares of Common Stock and the amount, if any, of other property which at the time would be received upon the exercise of the Warrant. 8. No Rights as a Shareholder. This Warrant does not entitle the Holder to any voting rights or other rights as a shareholder of the Company prior to exercise of this Warrant and the payment for the Shares so purchased. Notwithstanding the foregoing, the Company agrees to transmit to the Holder such information, documents and reports as are generally distributed to holders of the capital stock of the Company concurrently with the distribution thereof to the shareholders. Upon valid exercise of this Warrant and payment for the Shares so purchased in accordance with the terms of the Warrant, the Holder shall be deemed a shareholder of the Company. 9. Sale or Transfer of the Warrant; Legend. The Warrant and the Shares shall not be sold or transferred unless either (i) they first shall have been registered under the Act, or (ii) the Company first shall have been furnished with an opinion of legal counsel reasonably satisfactory to the Company to the effect that such sale or transfer is exempt from the registration requirements of the Act. Each certificate representing any Warrant shall bear the legend set out on page 1 hereof. Each certificate representing any Shares shall bear a legend substantially in the following form, as appropriate: THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. Such Warrant and Shares may be subject to additional restrictions on transfer imposed under applicable state and federal securities law. -9- 10. Put Right. Commencing on the earlier of (i) December 31, 2004 and (ii) the date upon which the Loans (as defined in the Credit Agreement) owed to Holder and the other lenders party to the Credit Agreement have been paid in full in cash or Cash Equivalents and in each case (i) and (ii) prior to the Expiration Date, the Holder shall have the right, exercised by the delivery of written notice to the Company (a "Put Notice"), to require the Company to cancel the unexercised portion of this Warrant, and all related rights in exchange for a cash payment (the "Put Payment") equal to $0.23 per share payable to the Holder within ten (10) days of receipt by the Company of the Put Notice and the original Warrant for cancellation. 11. Call Option. At any time during the one year period following the indefeasible payment in full in cash or cash equivalents of the Credit Obligations, and prior to June 30, 2004, the Company shall have the right exercised by the delivery of written notice to the Holder (a "Call Notice") to cancel this Warrant and the purchase rights hereunder in exchange for a cash payment (the "Call Payment") equal to $0.5288 per share, payable to the Holder within five (5) days after delivery by the Company of the Call Notice, provided however, that any payment made pursuant to this Section 11 may only be made out of a New Financing Source. Notwithstanding anything to the contrary contained herein, the Holder shall be entitled to exercise this Warrant in whole or in part at any time after the receipt of the Call Notice until the receipt by the Holder of the Call Payment. In the event that the Holder chooses to exercise all or a portion of the Warrant after receipt of the Call Notice, the Company shall have the option to rescind such Call Notice or to exercise its call option with respect to that portion of the Warrant which remains unexercised through the delivery of a pro rata portion of the Call Payment. The Company shall have the right to exercise the call option set forth herein one time only. 12. Modifications and Waivers. This Warrant may not be changed, waived, discharged or terminated except by an instrument in writing signed by the party against which enforcement of the same is sought. 13. Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder or the Company shall be sufficiently given or made if sent by registered or certified mail, postage prepaid, addressed to the parties as provided below: If to Holder: Banc of America Strategic Solutions, Inc. 335 Madison Avenue NY1-503-05-06 Attn: Bill Crawford, Managing Director -10- with a copy to: Brown Rudnick Berlack Israels LLP One Financial Center Boston, MA 02111 Attn: William R. Baldiga, Esquire Mary D. Bucci, Esquire If to Company: Nextera Enterprises, Inc. One Cambridge Center - 7th Floor Cambridge, MA 02142 Attn: Michael P. Muldowney, Chief Financial Officer with a copy to: Maron & Sandler 1250 4th Street Suite 550 Santa Monica, CA 90401 Attn: Stanley E. Maron, Esquire 14. Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants with the Holder that upon its receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant or any stock certificate and, in the case of any such loss, theft or destruction, of an indemnity or security reasonably satisfactory to it, and upon reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of this Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or stock certificate. 15. Representations and Warranties of Holder. By accepting this Warrant, the Holder represents and warrants that it is acquiring this Warrant and the Shares for its own account, for investment and not with a view to, or for sale in connection with, any distribution thereof or any part thereof. Holder represents and warrants that it is (a) experienced in the evaluation of businesses similar to the Company, (b) is able to fend for itself in the transactions contemplated by this Warrant, (c) has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Company, (d) has the ability to bear the economic risks of an investment in the Company, (e) has been furnished with or has had access to such information as is specified in subparagraph (b)(2) of Rule 502 promulgated under the Act and (f) has been afforded the opportunity to ask questions of and to receive answers from the Company and to obtain any additional information -11- necessary to make an informed investment decision with respect to an investment in the Company. The Holder further represents that it is an "accredited investor" as defined in Rule 501(a) of Regulation D under the Act. 16. Representations and Warranties of Company. The Company represents that: (a) The execution and delivery of this Warrant has been duly authorized by the Company's Board of Directors and constitutes the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, or other laws affecting the enforcement of creditors' rights in general and except that the enforceability of the obligations hereunder is subject to general principals of equity (regardless of whether such enforceability is considered in a proceeding at equity or at law). Neither the execution nor the delivery of this Warrant, nor fulfillment of nor compliance with the terms and provisions of this Warrant, nor the issuance of Shares upon exercise of the Warrant, will violate the terms of the certificate of incorporation or by-laws of the Company or, to the best of the Company's knowledge, any agreement (including any agreement with stockholders), instrument, judgment, decree or statute to which the Company is subject. (b) As of December 31, 2002, the authorized capital stock of the Company consisted of (i) 99,300,000 shares of Common Stock, $0.001 par value per share, 95,000,000 shares of which are designated as Class A Common Stock, of which 31,885,896 shares are issued and outstanding, and 4,300,000 shares of which are designated as Class B Common Stock, of which 3,869,570 shares are issued and outstanding, and (ii) 10,000,000 shares of Preferred Stock, $0.001 par value per share 600,000 shares of which are designated as Series A Cumulative Convertible Preferred Stock, of which 39,544 shares are issued and outstanding. (c) Except as set forth in subparagraph (b) above, and in registration statements filed by the Company under the Act or in any report filed by the Company under the Securities Exchange Act of 1934, as amended, the Company has not authorized any rights (either preemptive or other) or options to subscribe for or purchase from the Company, or any warrants or other agreements providing for or requiring the issuance by the Company of, any capital stock or any securities convertible into or exchangeable for its capital stock. (d) Sufficient shares of authorized but unissued shares of Common Stock of the Company have been reserved by appropriate corporate action with the prospective exercise of the Warrant, and, the issuance of either the Warrant or the shares of Common Stock upon exercise of the Warrant will not require any further corporate action by the stockholders or directors of the Company, will not be subject to preemptive rights (unless the exercise of the same has been irrevocably waived) in any present stockholders of the Company and will not -12- conflict with any provision of any agreement to which the Company is a party or by which it is bound, and such Common Stock, when issued upon exercise of the Warrant in accordance with its terms, will be duly authorized, fully paid and non-assessable. 17. Registration Rights. (a) Piggy Back Registration Rights. If (but without any obligation to do so) the Company shall determine to register (a "Company Registration") any of its securities for its own account or for any other person (other than a registration under the Act of shares issued in connection with any acquisition of any entity or business, shares issuable solely upon the exercise of stock options, or shares issuable solely pursuant to employee benefit plans or arrangements, including registration statements on Form S-4, S-8 or any successor form), the Company shall do the following: (i) promptly give the Holder written notice thereof (which shall include a list of the jurisdictions in which the Company intends to attempt to register or qualify such securities under the applicable blue sky or other state securities laws); and (ii) include among the securities which it then registers or qualifies all Registrable Securities (as defined below) specified in a written request or requests, made within fifteen (15) days after receipt of the written notice from the Company, by the Holder. The Holder shall have the right to withdraw its request for inclusion of its Registrable Securities in any registration statement by giving written notice to the Company of its request to withdraw. The Company may withdraw a Company Registration at any time prior to the time it becomes effective whether or not the Holder has elected to include Registrable Securities (as defined below) in such registration. For purposes of this Warrant, the term "Registrable Securities" shall mean all shares of Common Stock issued and issuable upon exercise of the Warrant; provided however, that shares of Common Stock which are "Registrable Securities" shall cease to be Registrable Securities (a) upon any sale pursuant to a registration statement under the Act, Section 4(1) of the Act or Rule 144 promulgated under the Act or (b) at such time as such shares of Common Stock are freely saleable under Rule 144(k) promulgated under the Act (or a successor provision). (b) Limitations of Registration. If and to the extent that the Holder shall have, at the time of the delivery of the written request referred to in subparagraph (a) above, no present intention of selling or distribution, the Company shall be obligated to effect such registration, qualification or compliance with respect to the Holder's Registrable Securities only if and to the -13- extent, in each case, that such registration, qualification and compliance are at the time permitted by the applicable statutes or rules and regulations thereunder or the practices of the governmental authority concerned. (c) Registration Procedures. In the case of each registration, qualification or compliance pursuant to this Section 17, the Company will keep the Holder advised in writing as to the initiation of proceedings for such registration, qualification and compliance and as to the completion thereof, and will advise the Holder, upon written request, of the progress of such proceedings. At the expense of the Company, the Company will (i) keep such registration, qualification and compliance current and effective for a period of the earlier of (A) 120 days, or (B) until the Holder has completed the distributions relating thereto, including, without limitation, the filing of post-effective amendments and supplements to any registration statement or prospectus, as necessary to permit the sale or distribution of Registrable Securities not theretofore sold or distributed, and (ii) take all necessary action under any applicable blue sky or other state securities laws to permit such exercise, sale or distribution, all as reasonably requested by such Holder; provided, however, that the Company shall not be required in connection therewith to qualify as a foreign corporation in any jurisdiction in which it is not now so qualified or to take any action that would subject it to general consent to service of process or taxation. The Company shall not be required to file, cause to become effective or maintain the effectiveness of any registration statement that contemplates a distribution of securities on a delayed or continuous basis pursuant to Rule 415 under the Act. (d) Registration Rights. Anything to the contrary in Section 17 notwithstanding, in connection with any Company Registration, the Company shall not be required to include any of the Holder's Registrable Securities in such Company Registration unless the Holder accepts the terms of the underwriting as agreed upon between the Company and the underwriters selected by it (or by other persons entitled to select the underwriters), and then only in such quantity as the underwriters determine in their sole discretion will not jeopardize the success of the offering by the Company or will not adversely affect the aggregate proceeds to the Company from the offering. If the total amount of securities, including Registrable Securities and all other securities requested to be included in such offering by any stockholder of the Company, exceeds the amount of securities that the underwriters determine in their sole discretion is compatible with the success of the offering or the aggregate proceeds to the Company from the offering, then the number of Shares to be offered for the account of the Holder and all such other persons participating in such registration shall be reduced (to zero if necessary) or limited pro rata in proportion to the respective number of Shares requested to be registered by the Holder and each other person to reduce the total number of Shares requested to be included in such offering to the number of Shares, if any, recommended by such underwriters. -14- (e) Indemnification. The Company will indemnify, defend and hold harmless the Holder to the fullest extent that such agreement is enforceable under applicable law against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of material fact contained therein (or in any related registration statement, notification or the like) or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Company of any rule or regulation promulgated under the Act applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, qualification or compliance, and will reimburse the Holder for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action provided, however, that the Company will not be liable in any such case to the extent that any such claim, loss, damage or liability arises out of or is based on any untrue statement or omission based upon written information furnished to the Company by an instrument duly executed by the Holder and stated to be specifically for use therein. (f) The Holder will indemnify, defend and hold harmless the Company to the fullest extent that such agreement is enforceable under applicable law against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of material fact contained therein (or in any related registration statement, notification or the like) or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Holder of any rule or regulation promulgated under the Act applicable to the Holder and relating to action or inaction required of the Holder in connection with any such registration, qualification or compliance, and will reimburse the Company for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action, in each case to the extent (and only to the extent) that such claims, losses, damages, liabilities and actions relate to reliance on any untrue statement or omission based upon written information furnished to the Company by an instrument duly executed by the Holder and stated to be specifically for use in the registration statement, provided, however, that such Holder's obligations hereunder shall be limited to an amount equal to the proceeds received by such Holder of the Registrable Securities sold in such registration. -15- (g) Notwithstanding the foregoing, to the extent that the provisions on indemnification contained in the underwriting agreement entered into in connection with a Company Registration are in conflict with the provisions of this Section 17, the provisions in the underwriting agreement shall control. 18. Binding Effect on Successors. This Warrant shall be binding upon any corporation succeeding the Company by merger, consolidation or acquisition of all or substantially all of the Company's assets, and all of the obligations of the Company relating to the Shares issuable upon exercise of this Warrant shall survive the exercise and termination of this Warrant and all of the covenants and agreements of the Company shall inure to the benefit of the successors and assigns of the Holder. 19. Amendments. No approval, consent, amendment or waiver of this Agreement shall be effective unless in writing and signed by the Company and Holder. 20. Counterparts. This Agreement may be executed in any number of counterparts and each such counterpart shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 21. Governing Law. This Warrant shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the Commonwealth of Massachusetts. 22. Entire Agreement. This Warrant constitutes the entire agreement among the parties hereto pertaining to the subject matter hereof, and any and all other written or oral agreements relating to the subject matter hereof existing among any of the parties hereto are expressly cancelled, including, but not limited to, the Prior Warrant. -16- IN WITNESS WHEREOF, the parties have caused this Warrant to be executed by their duly authorized representatives as of the date first above written. NEXTERA ENTERPRISES, INC., as Company /s/ Michael P. Muldowney By: ____________________________ Michael P. Muldowney Chief Financial Officer BANC OF AMERICA STRATEGIC SOLUTIONS, INC. as Lender and Holder /s/ Bill Crawford By: ____________________________ Bill Crawford Managing Director -17- EXHIBIT A NOTICE OF EXERCISE To: NEXTERA ENTERPRISES, INC. 1. The undersigned hereby elects to purchase _______ shares of Common Stock of Nextera Enterprises, Inc. pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price of such shares in full. 2. Please issue a certificate or certificates representing said shares in the name of the undersigned or in such other name or names as are specified below. 3. The undersigned represents that the aforesaid shares of Common Stock are being acquired for the account of the undersigned for investment and not with a view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares. The undersigned further represents that such shares shall not be sold or transferred unless either (1) they first shall have been registered under the Securities Act of 1933, as amended, or (ii) the Company first shall have been furnished with an opinion of legal counsel reasonably satisfactory to the Company to the effect that such sale or transfer is exempt from the registration requirement. 4. In the event of partial exercise, please re-issue an appropriate Warrant exercisable into the remaining shares. _______________________________ (Name) _______________________________ (Address) _______________________________ (Signature) _______________________________ (Date) -18- EX-4.3 5 a91942exv4w3.txt EXHIBIT 4.3 EXHIBIT 4.3 EXECUTION COPY NEITHER THIS WARRANT NOR THE SHARES OF STOCK ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO SALE, TRANSFER OR OTHER DISPOSITION OF THIS WARRANT OR SAID SHARES MAY BE EFFECTED WITHOUT (i) AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, OR (ii) AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO COUNSEL TO THE COMPANY, THAT AN EXEMPTION FROM REGISTRATION UNDER SAID ACT IS AVAILABLE. July 17, 2003 SECOND AMENDED AND RESTATED Warrant No.: 8 STOCK PURCHASE WARRANT To Subscribe for and Purchase Class A Common Stock of NEXTERA ENTERPRISES, INC. THIS SECOND AMENDED AND RESTATED STOCK PURCHASE WARRANT ("Warrant") certifies that, for value received, Fleet National Bank (together with any subsequent transferees of all or any portion of this Warrant, the "Holder"), is entitled, upon the terms and subject to the conditions hereinafter set forth, to subscribe for and purchase from Nextera Enterprises, Inc., a Delaware corporation (hereinafter called the "Company"), up to one hundred eighty-one thousand, eight hundred and eighteen (181,818) fully paid and non-assessable shares of the Company's Class A Common Stock, $0.001 par value per share (the "Shares"), at the price equal to the Exercise Price (as defined in Section 1 hereof) (subject to adjustment as provided in Section 7 hereof). The number and character of such Shares are subject to adjustment as provided herein. Capitalized terms used herein and not defined herein shall have the meanings given such terms in that certain Second Amended and Restated Credit Agreement dated December 31, 2002, as amended by that certain First Amendment dated as of July 8, 2003, and that certain Second Amendment dated the date hereof, by and among the Company, the Holder and the other lenders party thereto (as the same may be further amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement"; and together with all related promissory notes, mortgages, guaranties, agreements, documents and instruments from time to time entered into by Company and any other person or obligor pursuant thereto, the "Credit Documents"). This Warrant amends and restates in its entirety that certain Warrant for up to one hundred eighty-one thousand, eight hundred and eighteen (181,818) fully paid and non-assessable shares of the Company's Class A Common Stock, $0.001 par value per share dated December 31, 2002 (the "Prior Warrant"), made by the Company in favor of the Holder. 1. Definitions. As used herein the following terms shall have the following meanings: "Act" means the Securities Act of 1933 as amended, or a similar Federal statute and the rules and regulations of the Commission issued under that Act, as they each may, from time to time, be in effect. "Additional Shares of Common Stock" shall mean all shares of Common Stock issued (or, pursuant to Section 7(c), deemed to be issued) by the Company after the Original Issue Date, but shall not include: (A) shares of Common Stock issued or issuable upon conversion of shares of all of preferred stock of the Company outstanding as of the Original Issue Date; (B) shares of Common Stock issued or issuable upon exercise of this Warrant or any other warrant or option of the Company outstanding as of the Original Issue Date; (C) shares of Common Stock issued by way of dividend or other distribution on shares of Common Stock excluded from the definition of Additional Shares of Common Stock by the foregoing clause (A) or (B) or on Common Stock so excluded; or (D) shares issued under an employee stock purchase plan or pursuant to options exercisable for shares of Common Stock (such number subject to equitable adjustment in the event of any stock dividend, stock split, combination, reorganization, recapitalization, reclassification or other similar event), issued after the date of this Warrant to directors, officers, employees or consultants of the Company and any Subsidiary pursuant to any qualified or non-qualified stock option plan or other equity incentive plan approved by the Board of Directors of the Company, equal to the first 30% of the outstanding stock of the Company, calculated on a post-Original Issue Date, fully-diluted basis. "Common Stock" shall mean the Class A Common Stock of the Company, $0.001 par value per share. "Convertible Securities" shall mean any evidences of indebtedness, shares or other securities directly or indirectly convertible into or exchangeable for Common Stock. "Exercise Price" shall mean $0.60 per share. "New Financing Source" shall mean a source other than the Company. -2- "Option" shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire Common Stock or Convertible Securities. "Original Issue Date" shall mean the date on which this Warrant is originally issued. 2. Purchase Rights. The purchase rights represented by this Warrant are exercisable by the Holder in whole or in part (and not as to a fractional share), at any time and from time to time commencing on the date hereof and ending at 5:00 p.m. on the date (the "Expiration Date") eighteen (18) months after the indefeasible payment in full in cash or cash equivalents of the Credit Obligations. 3. Exercise of Warrant; Net Issue Exercise. 3.1 Exercise of Warrant. Subject to Section 2 above, the purchase rights represented by this Warrant may be exercised, in whole or in part and from time to time, by the surrender of this Warrant and the duly executed Notice of Exercise (the form of which is attached as Exhibit A) at the principal office of the Company and by the payment to the Company, by check, of an amount equal to the then applicable Exercise Price per share multiplied by the number of Shares then being purchased. Upon exercise, the Holder shall be entitled to receive, within a reasonable time, a certificate or certificates, issued in the Holder's name or in such name or names as the Holder may direct, for the number of Shares so purchased. The Shares so purchased shall be deemed to be issued as of the close of business on the date on which this Warrant shall have been exercised. 3.2. Net Issue Exercise. (a) In lieu of exercising this Warrant as set forth in Section 3.1, the Holder may elect to receive Shares equal to the value of this Warrant (or the portion thereof being cancelled) by surrender of this Warrant at the principal office of the Company together with notice of such election in which event the Company shall issue to the Holder a number of Shares computed using the following formula: X = Y (A - B) --------- A Where X = the number of Shares to be issued to the Holder; Y = the number of Shares purchasable under this Warrant, or if only a portion of this Warrant is being cancelled, the gross number of Shares covered by the portion of this Warrant being cancelled; A = the fair market value of one Share, as determined by the Board of Directors of the Company pursuant to paragraph (b) below, as at the time the net issue election is made pursuant to this Section (the "Determination Date"); and B = the Exercise Price (as adjusted to the date of such calculations). Such Shares shall be issued as soon as practicable after the Determination Date. -3- (b) For purposes of this Section, fair market value of a Share shall be determined as follows: (A) If the Company's Common Stock is not publicly traded at the Determination Date, the fair market value of a Share shall be a value reasonably determined by the Company's Board of Directors. In the event that the Holder disagrees with the Board of Directors' determination of fair market value, then the fair market value shall be determined by an appraiser selected by the Holder (the "Holder's Appraiser") and whose appraisal (the "Holder's Appraisal") shall be furnished to the Company within 20 days after the Board of Directors' determination of fair value, and if the Company does not object to such determination within 15 days after receipt of the Holder's appraisal, then the fair market value determined by the Holder's Appraiser shall be the fair market value of a Share. In the event that the Company objects to such determination then the Company shall select an appraiser (the "Company's Appraiser") who shall review the determination of the Holder's Appraiser and issue a report thereon (the "Company's Appraisal") within 30 days after the delivery of the Holder's Appraisal to the Company and within 10 days after the issuance of such report to the Holder's Appraiser, the Holder's Appraiser and the Company's Appraiser shall meet to negotiate in good faith to reach agreement on the fair market value of a Share, and such agreed value shall be the fair market value of a Share. In the event that the Company's Appraiser and the Holder's Appraiser are unable to reach agreement then such Appraisers shall select an appraiser (the "Third Appraiser") within 5 days after the meeting between the Holder's Appraiser and the Company's Appraiser, and the average of two appraisals, consisting of the appraisal made by the Third Appraiser and the appraisal of the Holder's Appraiser and Company's Appraiser (whichever is closest to that of the Third Appraiser), shall be conclusive and binding on the Company and the Holder. The Company and the Holder shall each pay one half (1/2) of the fees and expenses of each of the Company's Appraiser, the Holder's Appraiser and the Third Appraiser. (B) if the Company's Common Stock is publicly traded on the Determination Date, the fair market value of a Share shall be equal to (1) the average of the closing prices quoted on the Nasdaq Stock Exchange, Inc., if applicable, or the average of the last bid and asked prices of the Common Stock quoted in the Nasdaq OTC Bulletin Board or the over-the-counter-market, or (2) if the Common Stock is then traded on a national securities exchange, the average of the high and low closing prices of the Common Stock listed on the principal national securities exchange on which the Common Stock is so traded, in each case for the twenty (20) trading days preceding the Determination Date. -4- 4. Shares to be Issued; Reservation of Shares. The Company covenants that the Shares that may be issued upon the exercise of the purchase rights represented by this Warrant will, upon issuance, be fully paid and non-assessable, and free from all liens and charges with respect to the issue thereof. During the period within which the purchase rights represented by the Warrant may be exercised, the Company will at all times have authorized and reserved, for the purpose of issuance upon exercise of the purchase rights represented by this Warrant, a sufficient number of shares of its Common Stock to provide for the exercise of the right represented by this Warrant. 5. No Fractional Shares. No fractional shares shall be issued upon the exercise of this Warrant. In lieu thereof, a cash payment shall be made equal to such fraction multiplied by the fair market value of such shares of Common Stock, as determined pursuant to Section 3.2(b) above. 6. Adjustment for Merger, Consolidation or Sale of Assets. In the event that at any time or from time to time after the Original Issue Date, the Company shall merge or consolidate with or into another entity or sell all or substantially all of its assets, the Holder hereof shall thereafter have the right to receive the kind and amount of shares of stock, other securities, property or cash deliverable or payable to the holders of the Common Stock of the Company that the Holder hereof upon exercise of this Warrant would have been entitled to had the Holder hereof exercised the remaining portion of this Warrant into shares of Common Stock immediately prior thereto. 7. Adjustment of Exercise Price and Number of Shares. (a) Adjustment of Exercise Price and Number of Shares. The Exercise Price and number of shares of Common Stock issuable upon the exercise of the Warrant shall be adjusted as set forth in this Section 7 with the intent that the rights of the Holder to exercise shall not be impaired. (b) Adjustment for Combination, Consolidation, Stock Dividend or Subdivision of Common Stock. If the outstanding shares of Common Stock shall be subdivided into a greater number of shares or a dividend in Common Stock shall be paid in respect of Common Stock, the Exercise Price in effect immediately prior to such subdivision or at the record date of such dividend shall simultaneously with the effectiveness of such subdivision or immediately after the record date of such dividend be proportionately reduced. If outstanding shares of Common Stock shall be combined or consolidated into a smaller number of shares, the Exercise Price in effect immediately prior to such combination or consolidation shall, simultaneously with the effectiveness of such combination or consolidation, be proportionately increased. When any adjustment is required to be made in the Exercise Price, the number of shares of Common Stock purchasable upon the exercise of this Warrant shall be changed to the number determined by dividing (i) an amount equal to the number of shares issuable upon the exercise of this Warrant immediately prior to such adjustment, multiplied by the Exercise Price in effect -5- immediately prior to such adjustment, by (ii) the Exercise Price in effect immediately after such adjustment. (c) Issue of Options and Convertible Securities Deemed Issue of Additional Shares of Common Stock. If the Company at any time or from time to time after the Original Issue Date shall issue any Options or Convertible Securities or shall fix a record date for the determination of holders of any class of securities entitled to receive any such Options or Convertible Securities, then the maximum number of shares of Common Stock (as set forth in the instrument relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or, in the case of Convertible Securities or Options therefor, the conversion or exchange of such Convertible Securities, shall be deemed to be Additional Shares of Common Stock issued as of the time of such issue or, in case such a record date shall have been fixed, as of the close of business on such record date, provided that Additional Shares of Common Stock shall not be deemed to have been issued unless the consideration per share (determined pursuant to paragraph (e) below) of such Additional Shares of Common Stock would be less than the Exercise Price in effect on the date of and immediately prior to such issue, or such record date, as the case may be, and provided further in any such case in which Additional Shares of Common Stock are deemed to be issued: (i) No further adjustment in the Exercise Price shall be made upon the subsequent issue of Convertible Securities or shares of Common Stock upon the exercise of such Options or conversion or exchange of such Convertible Securities; (ii) If such Options or Convertible Securities by their terms provide, with the passage of time or otherwise, for any increase in the consideration payable to the Company, or decrease in the number of shares of Common Stock issuable, upon the exercise, conversion or exchange thereof, the Exercise Price computed upon the original issue thereof (or upon the occurrence of a record date with respect thereto), and any subsequent adjustments based thereon, shall, upon any such increase or decrease becoming effective, be recomputed to reflect such increase or decrease insofar as it affects such Options or the rights of conversion or exchange under such Convertible Securities; (iii) No readjustment pursuant to clause (ii) above shall have the effect of increasing the Exercise Price to an amount which exceeds the lower of (A) the Exercise Price immediately prior to the adjustment affected upon the original issue of Options or Convertible Securities (or upon the occurrence of a record date with respect thereto) pursuant to the provisions hereof, or (B) the Exercise Price that would have resulted from any issuance of Additional Shares of Common Stock between the original adjustment date and such readjustment date; -6- (iv) Upon the expiration or termination of any unexercised Option, the Exercise Price shall be readjusted to the Exercise Price which would have been in effect at the time of such expiration or termination had such Option never been issued (but including the recalculation of any intervening adjustments), and the Additional Shares of Common Stock deemed issued as the result of the original issue of such Option shall not be deemed issued for the purposes of any subsequent adjustment of the Exercise Price; and (v) In the event of any change in the number of shares of Common Stock issuable upon the exercise, conversion or exchange of any Option or Convertible Security, including, but not limited to, a change resulting from the antidilution provisions thereof, the Exercise Price then in effect shall forthwith be readjusted to such Exercise Price as would have obtained had the adjustment which was made upon the issuance of such Option or Convertible Security (prior to such change) been made upon the basis of such change, but no further adjustment shall be made for the actual issuance of Common Stock upon the exercise or conversion of any such Option or Convertible Security. (d) Adjustment of Exercise Price Upon Issuance of Additional Shares of Common Stock. In the event the Company shall at any time after the Original Issue Date issue Additional Shares of Common Stock (including Additional Shares of Common Stock deemed to be issued pursuant to paragraph (c) above), without consideration or for a consideration per share less than the Exercise Price in effect on the date of and immediately prior to such issue, then and in such event, such Exercise Price shall be reduced, concurrently with such issue, to a price (calculated to the nearest cent) calculated as follows: (i) The adjusted Exercise Price shall be equal to a fraction: (A) the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such issue (including shares described in clause (ii) below), plus the number of shares of Common Stock which the aggregate consideration received by the Company for the total number of Additional Shares of Common Stock so issued would purchase at such Exercise Price; and (B) the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to such issue (including shares described in clause (ii) below) plus the number of such Additional Shares of Common Stock so issued. (ii) For the purposes of clause (i), the number of shares of Common Stock outstanding immediately prior to such issue shall be calculated on a fully diluted basis, as if all Convertible Securities had been fully converted into shares of Common Stock immediately prior to such issuance and the Warrant and any other outstanding Options had been fully exercised immediately prior to such issuance (and any resulting Convertible Securities fully converted into Common Stock) as of such date. -7- (iii) The applicable Exercise Price shall not be reduced at the time of any issuance of Additional Shares of Common Stock if the amount of such reduction would be an amount less than $0.01, but any such amount shall be carried forward and reduction with respect thereto shall be made at the time and together with any subsequent reduction which, together with such amount and any other amounts so carried forward, shall aggregate $0.01 or more. (e) Determination of Consideration. For purposes of paragraph (d), the consideration received by the Company for the issue of any Additional Shares of Common Stock shall be computed as follows: (i) Cash and Property: Such consideration shall: (A) insofar as it consists of cash, be computed at the aggregate of cash received by the Company; (B) insofar as it consists of property other than cash, be computed at the fair market value thereof at the time of such issue, as determined in good faith by the Board of Directors; and (C) in the event Additional Shares of Common Stock are issued together with other shares or securities or other assets of the Company for consideration which covers both, be the proportion of such consideration so received, computed as provided in clauses (A) and (B) above, as determined in good faith by the Board of Directors. (ii) Options and Convertible Securities. The consideration per share received by the Company for Additional Shares of Common Stock deemed to have been issued pursuant to paragraph (c), relating to Options and Convertible Securities, shall be determined by dividing: (A) the total amount, if any, received or receivable by the Company as consideration for the issue of such Options or Convertible Securities, plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Company upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities; by -8- (B) the maximum number of shares of Common Stock (as set forth in the instrument relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or the conversion or exchange of such Convertible Securities. (f) Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Exercise Price pursuant to this Section 7, the Company at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to the Holder a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Company shall, upon the written request at any time of the Holder, furnish or cause to be furnished to such holder a like certificate setting forth (i) such adjustments and readjustments, (ii) the Exercise Price at the time in effect, and (iii) the number of shares of Common Stock and the amount, if any, of other property which at the time would be received upon the exercise of the Warrant. 8. No Rights as a Shareholder. This Warrant does not entitle the Holder to any voting rights or other rights as a shareholder of the Company prior to exercise of this Warrant and the payment for the Shares so purchased. Notwithstanding the foregoing, the Company agrees to transmit to the Holder such information, documents and reports as are generally distributed to holders of the capital stock of the Company concurrently with the distribution thereof to the shareholders. Upon valid exercise of this Warrant and payment for the Shares so purchased in accordance with the terms of the Warrant, the Holder shall be deemed a shareholder of the Company. 9. Sale or Transfer of the Warrant; Legend. The Warrant and the Shares shall not be sold or transferred unless either (i) they first shall have been registered under the Act, or (ii) the Company first shall have been furnished with an opinion of legal counsel reasonably satisfactory to the Company to the effect that such sale or transfer is exempt from the registration requirements of the Act. Each certificate representing any Warrant shall bear the legend set out on page 1 hereof. Each certificate representing any Shares shall bear a legend substantially in the following form, as appropriate: THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. Such Warrant and Shares may be subject to additional restrictions on transfer imposed under applicable state and federal securities law. -9- 10. Put Right. Commencing on the earlier of (i) December 31, 2004 and (ii) the date upon which the Loans (as defined in the Credit Agreement) owed to Holder and the other lenders party to the Credit Agreement have been paid in full in cash or Cash Equivalents and in each case (i) and (ii) prior to the Expiration Date, the Holder shall have the right, exercised by the delivery of written notice to the Company (a "Put Notice"), to require the Company to cancel the unexercised portion of this Warrant, and all related rights in exchange for a cash payment (the "Put Payment") equal to $0.23 per share payable to the Holder within ten (10) days of receipt by the Company of the Put Notice and the original Warrant for cancellation. 11. Call Option. At any time during the one year period following the indefeasible payment in full in cash or cash equivalents of the Credit Obligations, and prior to June 30, 2004, the Company shall have the right exercised by the delivery of written notice to the Holder (a "Call Notice") to cancel this Warrant and the purchase rights hereunder in exchange for a cash payment (the "Call Payment") equal to $0.5288 per share, payable to the Holder within five (5) days after delivery by the Company of the Call Notice, provided however, that any payment made pursuant to this Section 11 may only be made out of a New Financing Source. Notwithstanding anything to the contrary contained herein, the Holder shall be entitled to exercise this Warrant in whole or in part at any time after the receipt of the Call Notice until the receipt by the Holder of the Call Payment. In the event that the Holder chooses to exercise all or a portion of the Warrant after receipt of the Call Notice, the Company shall have the option to rescind such Call Notice or to exercise its call option with respect to that portion of the Warrant which remains unexercised through the delivery of a pro rata portion of the Call Payment. The Company shall have the right to exercise the call option set forth herein one time only. 12. Modifications and Waivers. This Warrant may not be changed, waived, discharged or terminated except by an instrument in writing signed by the party against which enforcement of the same is sought. 13. Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder or the Company shall be sufficiently given or made if sent by registered or certified mail, postage prepaid, addressed to the parties as provided below: If to Holder: Fleet National Bank 100 Federal Street, 6th Floor MA DE 10006A Boston, MA 02110 Attn: Fred P. Lucy Vice President -10- with a copy to: Brown Rudnick Berlack Israels LLP One Financial Center Boston, MA 02111 Attn: William R. Baldiga, Esquire Mary D. Bucci, Esquire If to Company: Nextera Enterprises, Inc. One Cambridge Center - 7th Floor Cambridge, MA 02142 Attn: Michael P. Muldowney, Chief Financial Officer with a copy to: Maron & Sandler 1250 4th Street Suite 550 Santa Monica, CA 90401 Attn: Stanley E. Maron, Esquire 14. Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants with the Holder that upon its receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant or any stock certificate and, in the case of any such loss, theft or destruction, of an indemnity or security reasonably satisfactory to it, and upon reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of this Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or stock certificate. 15. Representations and Warranties of Holder. By accepting this Warrant, the Holder represents and warrants that it is acquiring this Warrant and the Shares for its own account, for investment and not with a view to, or for sale in connection with, any distribution thereof or any part thereof. Holder represents and warrants that it is (a) experienced in the evaluation of businesses similar to the Company, (b) is able to fend for itself in the transactions contemplated by this Warrant, (c) has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Company, (d) has the ability to bear the economic risks of an investment in the Company, (e) has been furnished with or has had access to such information as is specified in subparagraph (b)(2) of Rule 502 promulgated under the Act and (f) has been afforded the opportunity to ask questions of and to receive answers from the Company and to obtain any additional information necessary to make an informed investment decision with respect to an investment in the Company. The Holder further represents that it is an "accredited investor" as defined in Rule 501(a) of Regulation D under the Act. -11- 16. Representations and Warranties of Company. The Company represents that: (a) The execution and delivery of this Warrant has been duly authorized by the Company's Board of Directors and constitutes the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, or other laws affecting the enforcement of creditors' rights in general and except that the enforceability of the obligations hereunder is subject to general principals of equity (regardless of whether such enforceability is considered in a proceeding at equity or at law). Neither the execution nor the delivery of this Warrant, nor fulfillment of nor compliance with the terms and provisions of this Warrant, nor the issuance of Shares upon exercise of the Warrant, will violate the terms of the certificate of incorporation or by-laws of the Company or, to the best of the Company's knowledge, any agreement (including any agreement with stockholders), instrument, judgment, decree or statute to which the Company is subject. (b) As of December 31, 2002, the authorized capital stock of the Company consisted of (i) 99,300,000 shares of Common Stock, $0.001 par value per share, 95,000,000 shares of which are designated as Class A Common Stock, of which 31,885,896 shares are issued and outstanding, and 4,300,000 shares of which are designated as Class B Common Stock, of which 3,869,570 shares are issued and outstanding, and (ii) 10,000,000 shares of Preferred Stock, $0.001 par value per share 600,000 shares of which are designated as Series A Cumulative Convertible Preferred Stock, of which 39,544 shares are issued and outstanding. (c) Except as set forth in subparagraph (b) above, and in registration statements filed by the Company under the Act or in any report filed by the Company under the Securities Exchange Act of 1934, as amended, the Company has not authorized any rights (either preemptive or other) or options to subscribe for or purchase from the Company, or any warrants or other agreements providing for or requiring the issuance by the Company of, any capital stock or any securities convertible into or exchangeable for its capital stock. (d) Sufficient shares of authorized but unissued shares of Common Stock of the Company have been reserved by appropriate corporate action with the prospective exercise of the Warrant, and, the issuance of either the Warrant or the shares of Common Stock upon exercise of the Warrant will not require any further corporate action by the stockholders or directors of the Company, will not be subject to preemptive rights (unless the exercise of the same has been irrevocably waived) in any present stockholders of the Company and will not conflict with any provision of any agreement to which the Company is a party or by which it is bound, and such Common Stock, when issued upon exercise of the -12- Warrant in accordance with its terms, will be duly authorized, fully paid and non-assessable. 17. Registration Rights. (a) Piggy Back Registration Rights. If (but without any obligation to do so) the Company shall determine to register (a "Company Registration") any of its securities for its own account or for any other person (other than a registration under the Act of shares issued in connection with any acquisition of any entity or business, shares issuable solely upon the exercise of stock options, or shares issuable solely pursuant to employee benefit plans or arrangements, including registration statements on Form S-4, S-8 or any successor form), the Company shall do the following: (i) promptly give the Holder written notice thereof (which shall include a list of the jurisdictions in which the Company intends to attempt to register or qualify such securities under the applicable blue sky or other state securities laws); and (ii) include among the securities which it then registers or qualifies all Registrable Securities (as defined below) specified in a written request or requests, made within fifteen (15) days after receipt of the written notice from the Company, by the Holder. The Holder shall have the right to withdraw its request for inclusion of its Registrable Securities in any registration statement by giving written notice to the Company of its request to withdraw. The Company may withdraw a Company Registration at any time prior to the time it becomes effective whether or not the Holder has elected to include Registrable Securities (as defined below) in such registration. For purposes of this Warrant, the term "Registrable Securities" shall mean all shares of Common Stock issued and issuable upon exercise of the Warrant; provided however, that shares of Common Stock which are "Registrable Securities" shall cease to be Registrable Securities (a) upon any sale pursuant to a registration statement under the Act, Section 4(1) of the Act or Rule 144 promulgated under the Act or (b) at such time as such shares of Common Stock are freely saleable under Rule 144(k) promulgated under the Act (or a successor provision). (b) Limitations of Registration. If and to the extent that the Holder shall have, at the time of the delivery of the written request referred to in subparagraph (a) above, no present intention of selling or distribution, the Company shall be obligated to effect such registration, qualification or compliance with respect to the Holder's Registrable Securities only if and to the extent, in each case, that such registration, qualification and compliance are at the -13- time permitted by the applicable statutes or rules and regulations thereunder or the practices of the governmental authority concerned. (c) Registration Procedures. In the case of each registration, qualification or compliance pursuant to this Section 17, the Company will keep the Holder advised in writing as to the initiation of proceedings for such registration, qualification and compliance and as to the completion thereof, and will advise the Holder, upon written request, of the progress of such proceedings. At the expense of the Company, the Company will (i) keep such registration, qualification and compliance current and effective for a period of the earlier of (A) 120 days, or (B) until the Holder has completed the distributions relating thereto, including, without limitation, the filing of post-effective amendments and supplements to any registration statement or prospectus, as necessary to permit the sale or distribution of Registrable Securities not theretofore sold or distributed, and (ii) take all necessary action under any applicable blue sky or other state securities laws to permit such exercise, sale or distribution, all as reasonably requested by such Holder; provided, however, that the Company shall not be required in connection therewith to qualify as a foreign corporation in any jurisdiction in which it is not now so qualified or to take any action that would subject it to general consent to service of process or taxation. The Company shall not be required to file, cause to become effective or maintain the effectiveness of any registration statement that contemplates a distribution of securities on a delayed or continuous basis pursuant to Rule 415 under the Act. (d) Registration Rights. Anything to the contrary in Section 17 notwithstanding, in connection with any Company Registration, the Company shall not be required to include any of the Holder's Registrable Securities in such Company Registration unless the Holder accepts the terms of the underwriting as agreed upon between the Company and the underwriters selected by it (or by other persons entitled to select the underwriters), and then only in such quantity as the underwriters determine in their sole discretion will not jeopardize the success of the offering by the Company or will not adversely affect the aggregate proceeds to the Company from the offering. If the total amount of securities, including Registrable Securities and all other securities requested to be included in such offering by any stockholder of the Company, exceeds the amount of securities that the underwriters determine in their sole discretion is compatible with the success of the offering or the aggregate proceeds to the Company from the offering, then the number of Shares to be offered for the account of the Holder and all such other persons participating in such registration shall be reduced (to zero if necessary) or limited pro rata in proportion to the respective number of Shares requested to be registered by the Holder and each other person to reduce the total number of Shares requested to be included in such offering to the number of Shares, if any, recommended by such underwriters. -14- (e) Indemnification. The Company will indemnify, defend and hold harmless the Holder to the fullest extent that such agreement is enforceable under applicable law against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of material fact contained therein (or in any related registration statement, notification or the like) or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Company of any rule or regulation promulgated under the Act applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, qualification or compliance, and will reimburse the Holder for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action provided, however, that the Company will not be liable in any such case to the extent that any such claim, loss, damage or liability arises out of or is based on any untrue statement or omission based upon written information furnished to the Company by an instrument duly executed by the Holder and stated to be specifically for use therein. (f) The Holder will indemnify, defend and hold harmless the Company to the fullest extent that such agreement is enforceable under applicable law against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of material fact contained therein (or in any related registration statement, notification or the like) or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Holder of any rule or regulation promulgated under the Act applicable to the Holder and relating to action or inaction required of the Holder in connection with any such registration, qualification or compliance, and will reimburse the Company for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action, in each case to the extent (and only to the extent) that such claims, losses, damages, liabilities and actions relate to reliance on any untrue statement or omission based upon written information furnished to the Company by an instrument duly executed by the Holder and stated to be specifically for use in the registration statement, provided, however, that such Holder's obligations hereunder shall be limited to an amount equal to the proceeds received by such Holder of the Registrable Securities sold in such registration. (g) Notwithstanding the foregoing, to the extent that the provisions on indemnification contained in the underwriting agreement entered into in connection with a Company Registration are in conflict with the provisions of this Section 17, the provisions in the underwriting agreement shall control. -15- 18. Binding Effect on Successors. This Warrant shall be binding upon any corporation succeeding the Company by merger, consolidation or acquisition of all or substantially all of the Company's assets, and all of the obligations of the Company relating to the Shares issuable upon exercise of this Warrant shall survive the exercise and termination of this Warrant and all of the covenants and agreements of the Company shall inure to the benefit of the successors and assigns of the Holder. 19. Amendments. No approval, consent, amendment or waiver of this Agreement shall be effective unless in writing and signed by the Company and Holder. 20. Counterparts. This Agreement may be executed in any number of counterparts and each such counterpart shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 21. Governing Law. This Warrant shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the Commonwealth of Massachusetts. 22. Entire Agreement. This Warrant constitutes the entire agreement among the parties hereto pertaining to the subject matter hereof, and any and all other written or oral agreements relating to the subject matter hereof existing among any of the parties hereto are expressly cancelled, including, but not limited to, the Prior Warrant. -16- IN WITNESS WHEREOF, the parties have caused this Warrant to be executed by their duly authorized representatives as of the date first above written. NEXTERA ENTERPRISES, INC., as Company By:/s/ Michael P. Muldowney -------------------------------------- Michael P. Muldowney Chief Financial Officer FLEET NATIONAL BANK, as Agent, Lender and Holder By:/s/ Fred P. Lucy -------------------------------------- Fred P. Lucy Vice President -17- EXHIBIT A NOTICE OF EXERCISE To: NEXTERA ENTERPRISES, INC. 1. The undersigned hereby elects to purchase _______ shares of Common Stock of Nextera Enterprises, Inc. pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price of such shares in full. 2. Please issue a certificate or certificates representing said shares in the name of the undersigned or in such other name or names as are specified below. 3. The undersigned represents that the aforesaid shares of Common Stock are being acquired for the account of the undersigned for investment and not with a view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares. The undersigned further represents that such shares shall not be sold or transferred unless either (1) they first shall have been registered under the Securities Act of 1933, as amended, or (ii) the Company first shall have been furnished with an opinion of legal counsel reasonably satisfactory to the Company to the effect that such sale or transfer is exempt from the registration requirement. 4. In the event of partial exercise, please re-issue an appropriate Warrant exercisable into the remaining shares. ------------------------------- (Name) ------------------------------- (Address) ------------------------------- (Signature) ------------------------------- (Date) #1215209 v\4 -- 11433/394 -18- EX-4.4 6 a91942exv4w4.txt EXHIBIT 4.4 EXHIBIT 4.4 EXECUTION COPY NEITHER THIS WARRANT NOR THE SHARES OF STOCK ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO SALE, TRANSFER OR OTHER DISPOSITION OF THIS WARRANT OR SAID SHARES MAY BE EFFECTED WITHOUT (i) AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, OR (ii) AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO COUNSEL TO THE COMPANY, THAT AN EXEMPTION FROM REGISTRATION UNDER SAID ACT IS AVAILABLE. July 17, 2003 SECOND AMENDED AND RESTATED Warrant No.: 9 STOCK PURCHASE WARRANT To Subscribe for and Purchase Class A Common Stock of NEXTERA ENTERPRISES, INC. THIS SECOND AMENDED AND RESTATED STOCK PURCHASE WARRANT ("Warrant") certifies that, for value received, Banc of America Strategic Solutions, Inc. (together with any subsequent transferees of all or any portion of this Warrant, the "Holder"), is entitled, upon the terms and subject to the conditions hereinafter set forth, to subscribe for and purchase from Nextera Enterprises, Inc., a Delaware corporation (hereinafter called the "Company"), up to two hundred eighteen thousand, one hundred and eight-two (218,182) fully paid and non-assessable shares of the Company's Class A Common Stock, $0.001 par value per share (the "Shares"), at the price equal to the Exercise Price (as defined in Section 1 hereof) (subject to adjustment as provided in Section 7 hereof). The number and character of such Shares are subject to adjustment as provided herein. Capitalized terms used herein and not defined herein shall have the meanings given such terms in that certain Second Amended and Restated Credit Agreement dated December 31, 2002, as amended by that certain First Amendment dated as of July 8, 2003, and that certain Second Amendment dated the date hereof, by and among Company, the Holder and the other lenders party thereto (as the same may be further amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement"; and together with all related promissory notes, mortgages, guaranties, agreements, documents and instruments from time to time entered into by Company and any other person or obligor pursuant thereto, the Credit Documents") This Warrant amends and restates in its entirety that certain Warrant for up to two hundred eighteen thousand, one hundred and eight-two (218,182) fully paid and non-assessable shares of the Company's Class A Common Stock, $0.001 par value per share dated December 31, 2002 (the "Prior Warrant"), made by the Company in favor of the Holder. 1. Definitions. As used herein the following terms shall have the following meanings: "Act" means the Securities Act of 1933 as amended, or a similar Federal statute and the rules and regulations of the Commission issued under that Act, as they each may, from time to time, be in effect. "Additional Shares of Common Stock" shall mean all shares of Common Stock issued (or, pursuant to Section 7(c), deemed to be issued) by the Company after the Original Issue Date, but shall not include: (A) shares of Common Stock issued or issuable upon conversion of shares of all of preferred stock of the Company outstanding as of the Original Issue Date; (B) shares of Common Stock issued or issuable upon exercise of this Warrant or any other warrant or option of the Company outstanding as of the Original Issue Date; (C) shares of Common Stock issued by way of dividend or other distribution on shares of Common Stock excluded from the definition of Additional Shares of Common Stock by the foregoing clause (A) or (B) or on Common Stock so excluded; or (D) shares issued under an employee stock purchase plan or pursuant to options exercisable for shares of Common Stock (such number subject to equitable adjustment in the event of any stock dividend, stock split, combination, reorganization, recapitalization, reclassification or other similar event), issued after the date of this Warrant to directors, officers, employees or consultants of the Company and any Subsidiary pursuant to any qualified or non-qualified stock option plan or other equity incentive plan approved by the Board of Directors of the Company, equal to the first 30% of the outstanding stock of the Company, calculated on a post-Original Issue Date, fully-diluted basis. "Common Stock" shall mean the Class A Common Stock of the Company, $0.001 par value per share. "Convertible Securities" shall mean any evidences of indebtedness, shares or other securities directly or indirectly convertible into or exchangeable for Common Stock. "Exercise Price" shall mean $0.60 per share. "New Financing Source" shall mean a source other than the Company. -2- "Option" shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire Common Stock or Convertible Securities. "Original Issue Date" shall mean the date on which this Warrant is originally issued. 2. Purchase Rights. The purchase rights represented by this Warrant are exercisable by the Holder in whole or in part (and not as to a fractional share), at any time and from time to time commencing on the date hereof and ending at 5:00 p.m. on the date (the "Expiration Date") eighteen (18) months after the indefeasible payment in full in cash or cash equivalents of the Credit Obligations. 3. Exercise of Warrant; Net Issue Exercise. 3.1 Exercise of Warrant. Subject to Section 2 above, the purchase rights represented by this Warrant may be exercised, in whole or in part and from time to time, by the surrender of this Warrant and the duly executed Notice of Exercise (the form of which is attached as Exhibit A) at the principal office of the Company and by the payment to the Company, by check, of an amount equal to the then applicable Exercise Price per share multiplied by the number of Shares then being purchased. Upon exercise, the Holder shall be entitled to receive, within a reasonable time, a certificate or certificates, issued in the Holder's name or in such name or names as the Holder may direct, for the number of Shares so purchased. The Shares so purchased shall be deemed to be issued as of the close of business on the date on which this Warrant shall have been exercised. 3.2. Net Issue Exercise. (a) In lieu of exercising this Warrant as set forth in Section 3.1, the Holder may elect to receive Shares equal to the value of this Warrant (or the portion thereof being cancelled) by surrender of this Warrant at the principal office of the Company together with notice of such election in which event the Company shall issue to the Holder a number of Shares computed using the following formula: X = Y (A - B) --------- A Where X = the number of Shares to be issued to the Holder; Y = the number of Shares purchasable under this Warrant, or if only a portion of this Warrant is being cancelled, the gross number of Shares covered by the portion of this Warrant being cancelled; A= the fair market value of one Share, as determined by the Board of Directors of the Company pursuant to paragraph (b) below, as at the time the net issue election is made pursuant to this Section (the "Determination Date"); and B= the Exercise Price (as adjusted to the date of such calculations). Such Shares shall be issued as soon as practicable after the Determination Date. -3- (b) For purposes of this Section, fair market value of a Share shall be determined as follows: (A) If the Company's Common Stock is not publicly traded at the Determination Date, the fair market value of a Share shall be a value reasonably determined by the Company's Board of Directors. In the event that the Holder disagrees with the Board of Directors' determination of fair market value, then the fair market value shall be determined by an appraiser selected by the Holder (the "Holder's Appraiser") and whose appraisal (the "Holder's Appraisal") shall be furnished to the Company within 20 days after the Board of Directors' determination of fair value, and if the Company does not object to such determination within 15 days after receipt of the Holder's appraisal, then the fair market value determined by the Holder's Appraiser shall be the fair market value of a Share. In the event that the Company objects to such determination then the Company shall select an appraiser (the "Company's Appraiser") who shall review the determination of the Holder's Appraiser and issue a report thereon (the "Company's Appraisal") within 30 days after the delivery of the Holder's Appraisal to the Company and within 10 days after the issuance of such report to the Holder's Appraiser, the Holder's Appraiser and the Company's Appraiser shall meet to negotiate in good faith to reach agreement on the fair market value of a Share, and such agreed value shall be the fair market value of a Share. In the event that the Company's Appraiser and the Holder's Appraiser are unable to reach agreement then such Appraisers shall select an appraiser (the "Third Appraiser") within 5 days after the meeting between the Holder's Appraiser and the Company's Appraiser, and the average of two appraisals, consisting of the appraisal made by the Third Appraiser and the appraisal of the Holder's Appraiser and Company's Appraiser (whichever is closest to that of the Third Appraiser), shall be conclusive and binding on the Company and the Holder. The Company and the Holder shall each pay one half (1/2) of the fees and expenses of each of the Company's Appraiser, the Holder's Appraiser and the Third Appraiser. (B) if the Company's Common Stock is publicly traded on the Determination Date, the fair market value of a Share shall be equal to (1) the average of the closing prices quoted on the Nasdaq Stock Exchange, Inc., if applicable, or the average of the last bid and asked prices of the Common Stock quoted in the Nasdaq OTC Bulletin Board or the over-the-counter-market, or (2) if the Common Stock is then traded on a national securities exchange, the average of the high and low closing prices of the Common Stock listed on the principal national securities exchange on which the Common Stock is so traded, in each case for the twenty (20) trading days preceding the Determination Date. -4- 4. Shares to be Issued; Reservation of Shares. The Company covenants that the Shares that may be issued upon the exercise of the purchase rights represented by this Warrant will, upon issuance, be fully paid and non-assessable, and free from all liens and charges with respect to the issue thereof. During the period within which the purchase rights represented by the Warrant may be exercised, the Company will at all times have authorized and reserved, for the purpose of issuance upon exercise of the purchase rights represented by this Warrant, a sufficient number of shares of its Common Stock to provide for the exercise of the right represented by this Warrant. 5. No Fractional Shares. No fractional shares shall be issued upon the exercise of this Warrant. In lieu thereof, a cash payment shall be made equal to such fraction multiplied by the fair market value of such shares of Common Stock, as determined pursuant to Section 3.2(b) above. 6. Adjustment for Merger, Consolidation or Sale of Assets. In the event that at any time or from time to time after the Original Issue Date, the Company shall merge or consolidate with or into another entity or sell all or substantially all of its assets, the Holder hereof shall thereafter have the right to receive the kind and amount of shares of stock, other securities, property or cash deliverable or payable to the holders of the Common Stock of the Company that the Holder hereof upon exercise of this Warrant would have been entitled to had the Holder hereof exercised the remaining portion of this Warrant into shares of Common Stock immediately prior thereto. 7. Adjustment of Exercise Price and Number of Shares. (a) Adjustment of Exercise Price and Number of Shares. The Exercise Price and number of shares of Common Stock issuable upon the exercise of the Warrant shall be adjusted as set forth in this Section 7 with the intent that the rights of the Holder to exercise shall not be impaired. (b) Adjustment for Combination, Consolidation, Stock Dividend or Subdivision of Common Stock. If the outstanding shares of Common Stock shall be subdivided into a greater number of shares or a dividend in Common Stock shall be paid in respect of Common Stock, the Exercise Price in effect immediately prior to such subdivision or at the record date of such dividend shall simultaneously with the effectiveness of such subdivision or immediately after the record date of such dividend be proportionately reduced. If outstanding shares of Common Stock shall be combined or consolidated into a smaller number of shares, the Exercise Price in effect immediately prior to such combination or consolidation shall, simultaneously with the effectiveness of such combination or consolidation, be proportionately increased. When any adjustment is required to be made in the Exercise Price, the number of shares of Common Stock purchasable upon the exercise of this Warrant shall be changed to the number determined by dividing (i) an amount equal to the number of shares issuable upon the exercise of this Warrant immediately prior to such adjustment, multiplied by the Exercise Price in effect -5- immediately prior to such adjustment, by (ii) the Exercise Price in effect immediately after such adjustment. (c) Issue of Options and Convertible Securities Deemed Issue of Additional Shares of Common Stock. If the Company at any time or from time to time after the Original Issue Date shall issue any Options or Convertible Securities or shall fix a record date for the determination of holders of any class of securities entitled to receive any such Options or Convertible Securities, then the maximum number of shares of Common Stock (as set forth in the instrument relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or, in the case of Convertible Securities or Options therefor, the conversion or exchange of such Convertible Securities, shall be deemed to be Additional Shares of Common Stock issued as of the time of such issue or, in case such a record date shall have been fixed, as of the close of business on such record date, provided that Additional Shares of Common Stock shall not be deemed to have been issued unless the consideration per share (determined pursuant to paragraph (e) below) of such Additional Shares of Common Stock would be less than the Exercise Price in effect on the date of and immediately prior to such issue, or such record date, as the case may be, and provided further in any such case in which Additional Shares of Common Stock are deemed to be issued: (i) No further adjustment in the Exercise Price shall be made upon the subsequent issue of Convertible Securities or shares of Common Stock upon the exercise of such Options or conversion or exchange of such Convertible Securities; (ii) If such Options or Convertible Securities by their terms provide, with the passage of time or otherwise, for any increase in the consideration payable to the Company, or decrease in the number of shares of Common Stock issuable, upon the exercise, conversion or exchange thereof, the Exercise Price computed upon the original issue thereof (or upon the occurrence of a record date with respect thereto), and any subsequent adjustments based thereon, shall, upon any such increase or decrease becoming effective, be recomputed to reflect such increase or decrease insofar as it affects such Options or the rights of conversion or exchange under such Convertible Securities; (iii) No readjustment pursuant to clause (ii) above shall have the effect of increasing the Exercise Price to an amount which exceeds the lower of (A) the Exercise Price immediately prior to the adjustment affected upon the original issue of Options or Convertible Securities (or upon the occurrence of a record date with respect thereto) pursuant to the provisions hereof, or (B) the Exercise Price that would have resulted from any issuance of Additional Shares of Common Stock between the original adjustment date and such readjustment date; -6- (iv) Upon the expiration or termination of any unexercised Option, the Exercise Price shall be readjusted to the Exercise Price which would have been in effect at the time of such expiration or termination had such Option never been issued (but including the recalculation of any intervening adjustments), and the Additional Shares of Common Stock deemed issued as the result of the original issue of such Option shall not be deemed issued for the purposes of any subsequent adjustment of the Exercise Price; and (v) In the event of any change in the number of shares of Common Stock issuable upon the exercise, conversion or exchange of any Option or Convertible Security, including, but not limited to, a change resulting from the antidilution provisions thereof, the Exercise Price then in effect shall forthwith be readjusted to such Exercise Price as would have obtained had the adjustment which was made upon the issuance of such Option or Convertible Security (prior to such change) been made upon the basis of such change, but no further adjustment shall be made for the actual issuance of Common Stock upon the exercise or conversion of any such Option or Convertible Security. (d) Adjustment of Exercise Price Upon Issuance of Additional Shares of Common Stock. In the event the Company shall at any time after the Original Issue Date issue Additional Shares of Common Stock (including Additional Shares of Common Stock deemed to be issued pursuant to paragraph (c) above), without consideration or for a consideration per share less than the Exercise Price in effect on the date of and immediately prior to such issue, then and in such event, such Exercise Price shall be reduced, concurrently with such issue, to a price (calculated to the nearest cent) calculated as follows: (i) The adjusted Exercise Price shall be equal to a fraction: (A) the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such issue (including shares described in clause (ii) below), plus the number of shares of Common Stock which the aggregate consideration received by the Company for the total number of Additional Shares of Common Stock so issued would purchase at such Exercise Price; and (B) the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to such issue (including shares described in clause (ii) below) plus the number of such Additional Shares of Common Stock so issued. (ii) For the purposes of clause (i), the number of shares of Common Stock outstanding immediately prior to such issue shall be calculated on a fully diluted basis, as if all Convertible Securities had been fully converted into shares of Common Stock immediately prior to such issuance and the Warrant and any other outstanding Options had been fully exercised immediately prior to such issuance (and any resulting Convertible Securities fully converted into Common Stock) as of such date. -7- (iii) The applicable Exercise Price shall not be reduced at the time of any issuance of Additional Shares of Common Stock if the amount of such reduction would be an amount less than $0.01, but any such amount shall be carried forward and reduction with respect thereto shall be made at the time and together with any subsequent reduction which, together with such amount and any other amounts so carried forward, shall aggregate $0.01 or more. (e) Determination of Consideration. For purposes of paragraph (d), the consideration received by the Company for the issue of any Additional Shares of Common Stock shall be computed as follows: (i) Cash and Property: Such consideration shall: (A) insofar as it consists of cash, be computed at the aggregate of cash received by the Company; (B) insofar as it consists of property other than cash, be computed at the fair market value thereof at the time of such issue, as determined in good faith by the Board of Directors; and (C) in the event Additional Shares of Common Stock are issued together with other shares or securities or other assets of the Company for consideration which covers both, be the proportion of such consideration so received, computed as provided in clauses (A) and (B) above, as determined in good faith by the Board of Directors. (ii) Options and Convertible Securities. The consideration per share received by the Company for Additional Shares of Common Stock deemed to have been issued pursuant to paragraph (c), relating to Options and Convertible Securities, shall be determined by dividing: (A) the total amount, if any, received or receivable by the Company as consideration for the issue of such Options or Convertible Securities, plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Company upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities; by -8- (B) the maximum number of shares of Common Stock (as set forth in the instrument relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or the conversion or exchange of such Convertible Securities. (f) Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Exercise Price pursuant to this Section 7, the Company at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to the Holder a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Company shall, upon the written request at any time of the Holder, furnish or cause to be furnished to such holder a like certificate setting forth (i) such adjustments and readjustments, (ii) the Exercise Price at the time in effect, and (iii) the number of shares of Common Stock and the amount, if any, of other property which at the time would be received upon the exercise of the Warrant. 8. No Rights as a Shareholder. This Warrant does not entitle the Holder to any voting rights or other rights as a shareholder of the Company prior to exercise of this Warrant and the payment for the Shares so purchased. Notwithstanding the foregoing, the Company agrees to transmit to the Holder such information, documents and reports as are generally distributed to holders of the capital stock of the Company concurrently with the distribution thereof to the shareholders. Upon valid exercise of this Warrant and payment for the Shares so purchased in accordance with the terms of the Warrant, the Holder shall be deemed a shareholder of the Company. 9. Sale or Transfer of the Warrant; Legend. The Warrant and the Shares shall not be sold or transferred unless either (i) they first shall have been registered under the Act, or (ii) the Company first shall have been furnished with an opinion of legal counsel reasonably satisfactory to the Company to the effect that such sale or transfer is exempt from the registration requirements of the Act. Each certificate representing any Warrant shall bear the legend set out on page 1 hereof. Each certificate representing any Shares shall bear a legend substantially in the following form, as appropriate: THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. Such Warrant and Shares may be subject to additional restrictions on transfer imposed under applicable state and federal securities law. -9- 10. Put Right. Commencing on the earlier of December 31, 2004 and (ii) the date upon which the Loans (as defined in the Credit Agreement) owed to Holder and the other lenders party to the Credit Agreement have been paid in full in cash or Cash equivalents and in each case (i) and (ii) prior to the Expiration Date, the Holder shall have the right, exercised by the delivery of written notice to the Company (a "Put Notice"), to require the Company to cancel the unexercised portion of this Warrant, and all related rights in exchange for a cash payment (the "Put Payment") equal to $0.23 per-share payable to the Holder within ten (10) days of receipt by the Company of the Put Notice and the original Warrant for cancellation. 11. Call Option. At any time during the one year period following the indefeasible payment in full in cash or cash equivalents of the Credit Obligations, and prior to June 30, 2004, the Company shall have the right exercised by the delivery of written notice to the Holder (a "Call Notice") to cancel this Warrant and the purchase rights hereunder in exchange for a cash payment (the "Call Payment") equal to $0.5288 per share, payable to the Holder within five (5) days after delivery by the Company of the Call Notice, provided however, that any payment made pursuant to this Section 11 may only be made out of a New Financing Source. Notwithstanding anything to the contrary contained herein, the Holder shall be entitled to exercise this Warrant in whole or in part at any time after the receipt of the Call Notice until the receipt by the Holder of the Call Payment. In the event that the Holder chooses to exercise all or a portion of the Warrant after receipt of the Call Notice, the Company shall have the option to rescind such Call Notice or to exercise its call option with respect to that portion of the Warrant which remains unexercised through the delivery of a pro rata portion of the Call Payment. The Company shall have the right to exercise the call option set forth herein one time only. 12. Modifications and Waivers. This Warrant may not be changed, waived, discharged or terminated except by an instrument in writing signed by the party against which enforcement of the same is sought. 13. Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder or the Company shall be sufficiently given or made if sent by registered or certified mail, postage prepaid, addressed to the parties as provided below: If to Holder: Banc of America Strategic Solutions, Inc. 335 Madison Avenue NY1-503-0506 Attn: Bill Crawford, Managing Director -10- with a copy to: Brown Rudnick Berlack Israels LLP One Financial Center Boston, MA 02111 Attn: William R. Baldiga, Esquire Mary D. Bucci, Esquire If to Company: Nextera Enterprises, Inc. One Cambridge Center - 7th Floor Cambridge, MA 02142 Attn: Michael P. Muldowney, Chief Financial Officer with a copy to: Maron & Sandler 1250 4th Street Suite 550 Santa Monica, CA 90401 Attn: Stanley E. Maron, Esquire 14. Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants with the Holder that upon its receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant or any stock certificate and, in the case of any such loss, theft or destruction, of an indemnity or security reasonably satisfactory to it, and upon reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of this Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or stock certificate. 15. Representations and Warranties of Holder. By accepting this Warrant, the Holder represents and warrants that it is acquiring this Warrant and the Shares for its own account, for investment and not with a view to, or for sale in connection with, any distribution thereof or any part thereof. Holder represents and warrants that it is (a) experienced in the evaluation of businesses similar to the Company, (b) is able to fend for itself in the transactions contemplated by this Warrant, (c) has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Company, (d) has the ability to bear the economic risks of an investment in the Company, (e) has been furnished with or has had access to such information as is specified in subparagraph (b)(2) of Rule 502 promulgated under the Act and (f) has been afforded the opportunity to ask questions of and to receive answers from the Company and to obtain any additional information necessary to make an informed investment decision with respect to an investment in the Company. The Holder further represents that it is an "accredited investor" as defined in Rule 501(a) of Regulation D under the Act. -11- 16. Representations and Warranties of Company. The Company represents that: (a) The execution and delivery of this Warrant has been duly authorized by the Company's Board of Directors and constitutes the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, or other laws affecting the enforcement of creditors' rights in general and except that the enforceability of the obligations hereunder is subject to general principals of equity (regardless of whether such enforceability is considered in a proceeding at equity or at law). Neither the execution nor the delivery of this Warrant, nor fulfillment of nor compliance with the terms and provisions of this Warrant, nor the issuance of Shares upon exercise of the Warrant, will violate the terms of the certificate of incorporation or by-laws of the Company or, to the best of the Company's knowledge, any agreement (including any agreement with stockholders), instrument, judgment, decree or statute to which the Company is subject. (b) As of December 31, 2002, the authorized capital stock of the Company consisted of (i) 99,300,000 shares of Common Stock, $0.001 par value per share, 95,000,000 shares of which are designated as Class A Common Stock, of which 31,885,896 shares are issued and outstanding, and 4,300,000 shares of which are designated as Class B Common Stock, of which 3,869,570 shares are issued and outstanding, and (ii) 10,000,000 shares of Preferred Stock, $0.001 par value per share 600,000 shares of which are designated as Series A Cumulative Convertible Preferred Stock, of which 39,544 shares are issued and outstanding. (c) Except as set forth in subparagraph (b) above, and in registration statements filed by the Company under the Act or in any report filed by the Company under the Securities Exchange Act of 1934, as amended, the Company has not authorized any rights (either preemptive or other) or options to subscribe for or purchase from the Company, or any warrants or other agreements providing for or requiring the issuance by the Company of, any capital stock or any securities convertible into or exchangeable for its capital stock. (d) Sufficient shares of authorized but unissued shares of Common Stock of the Company have been reserved by appropriate corporate action with the prospective exercise of the Warrant, and, the issuance of either the Warrant or the shares of Common Stock upon exercise of the Warrant will not require any further corporate action by the stockholders or directors of the Company, will not be subject to preemptive rights (unless the exercise of the same has been irrevocably waived) in any present stockholders of the Company and will not conflict with any provision of any agreement to which the Company is a party or by which it is bound, and such Common Stock, when issued upon exercise of the Warrant in accordance with its terms, will be duly authorized, fully paid and non-assessable. -12- 17. Registration Rights. (a) Piggy Back Registration Rights. If (but without any obligation to do so) the Company shall determine to register (a "Company Registration") any of its securities for its own account or for any other person (other than a registration under the Act of shares issued in connection with any acquisition of any entity or business, shares issuable solely upon the exercise of stock options, or shares issuable solely pursuant to employee benefit plans or arrangements, including registration statements on Form S-4, S-8 or any successor form), the Company shall do the following: (i) promptly give the Holder written notice thereof (which shall include a list of the jurisdictions in which the Company intends to attempt to register or qualify such securities under the applicable blue sky or other state securities laws); and (ii) include among the securities which it then registers or qualifies all Registrable Securities (as defined below) specified in a written request or requests, made within fifteen (15) days after receipt of the written notice from the Company, by the Holder. The Holder shall have the right to withdraw its request for inclusion of its Registrable Securities in any registration statement by giving written notice to the Company of its request to withdraw. The Company may withdraw a Company Registration at any time prior to the time it becomes effective whether or not the Holder has elected to include Registrable Securities (as defined below) in such registration. For purposes of this Warrant, the term "Registrable Securities" shall mean all shares of Common Stock issued and issuable upon exercise of the Warrant; provided however, that shares of Common Stock which are "Registrable Securities" shall cease to be Registrable Securities (a) upon any sale pursuant to a registration statement under the Act, Section 4(1) of the Act or Rule 144 promulgated under the Act or (b) at such time as such shares of Common Stock are freely saleable under Rule 144(k) promulgated under the Act (or a successor provision). (b) Limitations of Registration. If and to the extent that the Holder shall have, at the time of the delivery of the written request referred to in subparagraph (a) above, no present intention of selling or distribution, the Company shall be obligated to effect such registration, qualification or compliance with respect to the Holder's Registrable Securities only if and to the extent, in each case, that such registration, qualification and compliance are at the time permitted by the applicable statutes or rules and regulations thereunder or the practices of the governmental authority concerned. -13- (c) Registration Procedures. In the case of each registration, qualification or compliance pursuant to this Section 17, the Company will keep the Holder advised in writing as to the initiation of proceedings for such registration, qualification and compliance and as to the completion thereof, and will advise the Holder, upon written request, of the progress of such proceedings. At the expense of the Company, the Company will (i) keep such registration, qualification and compliance current and effective for a period of the earlier of (A) 120 days, or (B) until the Holder has completed the distributions relating thereto, including, without limitation, the filing of post-effective amendments and supplements to any registration statement or prospectus, as necessary to permit the sale or distribution of Registrable Securities not theretofore sold or distributed, and (ii) take all necessary action under any applicable blue sky or other state securities laws to permit such exercise, sale or distribution, all as reasonably requested by such Holder; provided, however, that the Company shall not be required in connection therewith to qualify as a foreign corporation in any jurisdiction in which it is not now so qualified or to take any action that would subject it to general consent to service of process or taxation. The Company shall not be required to file, cause to become effective or maintain the effectiveness of any registration statement that contemplates a distribution of securities on a delayed or continuous basis pursuant to Rule 415 under the Act. (d) Registration Rights. Anything to the contrary in Section 17 notwithstanding, in connection with any Company Registration, the Company shall not be required to include any of the Holder's Registrable Securities in such Company Registration unless the Holder accepts the terms of the underwriting as agreed upon between the Company and the underwriters selected by it (or by other persons entitled to select the underwriters), and then only in such quantity as the underwriters determine in their sole discretion will not jeopardize the success of the offering by the Company or will not adversely affect the aggregate proceeds to the Company from the offering. If the total amount of securities, including Registrable Securities and all other securities requested to be included in such offering by any stockholder of the Company, exceeds the amount of securities that the underwriters determine in their sole discretion is compatible with the success of the offering or the aggregate proceeds to the Company from the offering, then the number of Shares to be offered for the account of the Holder and all such other persons participating in such registration shall be reduced (to zero if necessary) or limited pro rata in proportion to the respective number of Shares requested to be registered by the Holder and each other person to reduce the total number of Shares requested to be included in such offering to the number of Shares, if any, recommended by such underwriters. -14- (e) Indemnification. The Company will indemnify, defend and hold harmless the Holder to the fullest extent that such agreement is enforceable under applicable law against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of material fact contained therein (or in any related registration statement, notification or the like) or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Company of any rule or regulation promulgated under the Act applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, qualification or compliance, and will reimburse the Holder for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action provided, however, that the Company will not be liable in any such case to the extent that any such claim, loss, damage or liability arises out of or is based on any untrue statement or omission based upon written information furnished to the Company by an instrument duly executed by the Holder and stated to be specifically for use therein. (f) The Holder will indemnify, defend and hold harmless the Company to the fullest extent that such agreement is enforceable under applicable law against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of material fact contained therein (or in any related registration statement, notification or the like) or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Holder of any rule or regulation promulgated under the Act applicable to the Holder and relating to action or inaction required of the Holder in connection with any such registration, qualification or compliance, and will reimburse the Company for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action, in each case to the extent (and only to the extent) that such claims, losses, damages, liabilities and actions relate to reliance on any untrue statement or omission based upon written information furnished to the Company by an instrument duly executed by the Holder and stated to be specifically for use in the registration statement, provided, however, that such Holder's obligations hereunder shall be limited to an amount equal to the proceeds received by such Holder of the Registrable Securities sold in such registration. (g) Notwithstanding the foregoing, to the extent that the provisions on indemnification contained in the underwriting agreement entered into in -15- connection with a Company Registration are in conflict with the provisions of this Section 17, the provisions in the underwriting agreement shall control. 18. Binding Effect on Successors. This Warrant shall be binding upon any corporation succeeding the Company by merger, consolidation or acquisition of all or substantially all of the Company's assets, and all of the obligations of the Company relating to the Shares issuable upon exercise of this Warrant shall survive the exercise and termination of this Warrant and all of the covenants and agreements of the Company shall inure to the benefit of the successors and assigns of the Holder. 19. Amendments. No approval, consent, amendment or waiver of this Agreement shall be effective unless in writing and signed by the Company and Holder. 20. Counterparts. This Agreement may be executed in any number of counterparts and each such counterpart shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 21. Governing Law. This Warrant shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the Commonwealth of Massachusetts. 22. Entire Agreement. This Warrant constitutes the entire agreement among the parties hereto pertaining to the subject matter hereof, and any and all other written or oral agreements relating to the subject matter hereof existing among any of the parties hereto are expressly cancelled, including, but not limited to, the Prior Warrant. -16- IN WITNESS WHEREOF, the parties have caused this Warrant to be executed by their duly authorized representatives as of the date first above written. NEXTERA ENTERPRISES, INC., as Company By: /s/ Michael P. Muldowney -------------------------------------- Michael P. Muldowney Chief Financial Officer BANC OF AMERICA STRATEGIC SOLUTIONS, INC., as Lender and Holder By: /s/ Bill Crawford -------------------------------------- Bill Crawford Managing Director -17- EXHIBIT A NOTICE OF EXERCISE To: NEXTERA ENTERPRISES, INC. 1. The undersigned hereby elects to purchase _______ shares of Common Stock of Nextera Enterprises, Inc. pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price of such shares in full. 2. Please issue a certificate or certificates representing said shares in the name of the undersigned or in such other name or names as are specified below. 3. The undersigned represents that the aforesaid shares of Common Stock are being acquired for the account of the undersigned for investment and not with a view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares. The undersigned further represents that such shares shall not be sold or transferred unless either (1) they first shall have been registered under the Securities Act of 1933, as amended, or (ii) the Company first shall have been furnished with an opinion of legal counsel reasonably satisfactory to the Company to the effect that such sale or transfer is exempt from the registration requirement. 4. In the event of partial exercise, please re-issue an appropriate Warrant exercisable into the remaining shares. ------------------------------- (Name) ------------------------------- (Address) ------------------------------- (Signature) ------------------------------- (Date) -18- EX-10.1 7 a91942exv10w1.txt EXHIBIT 10.1 EXHIBIT 10.1 EXECUTION COPY NEXTERA ENTERPRISES, INC. --------------------------------------- ONE CAMBRIDGE CENTER CAMBRIDGE, MA 02142 As of July 17, 2003 Fleet National Bank 100 Federal Street Boston, MA 02110 Attn: Fred P. Lucy Vice President Banc of America Strategic Solutions, Inc. 335 Madison Avenue NY1-503-05-06 Attn: Bill Crawford Managing Director RE: SECOND AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT ("AMENDMENT") Gentlemen: Reference hereby is made to that certain Second Amended and Restated Credit Agreement dated as of December 31, 2002, as amended by that certain First Amendment dated as of July 8, 2003 (as the same may be further amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement"), by and among, on the one hand, Nextera Enterprises, Inc., a Delaware corporation ("Company"), and certain of its subsidiaries (individually and collectively, jointly and severally, the "Subsidiaries"), the lenders from time to time party thereto (such lenders, together with their respective successors and assigns, are referred to hereinafter individually as a "Lender" and collectively as the "Lenders"), Fleet National Bank, a national banking association, as administrative agent for the Lenders (in such capacity, together with its successors in such capacity, the "Agent"). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement. Company has requested, among other things, that the Agent and Lenders amend certain provisions contained in the Credit Agreement and the Agent and Lenders are willing to do so on the terms and conditions set forth herein. NOW THEREFORE, in consideration of any Loans or advances or grant of credit heretofore or hereafter made to or for the account of Company by Agent and Lenders, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 1. Recitals. Company acknowledges and agrees that the foregoing recitals are true and accurate and are incorporated herein by reference. 2. Amendments to Credit Agreement. Company, Agent and Lenders agree that the Credit Agreement shall be amended as follows: (a) Section 1 to the Credit Agreement (Definitions; Certain Rules of Construction) is hereby amended by inserting therein the following definitions in the appropriate alphabetical order: (i) "Second Amendment" means that certain Second Amendment to Second Amended and Restated Credit Agreement by and among, Company, Subsidiaries, Agent and Lenders and the other parties thereto. (b) Section 1 to the Credit Agreement (Definitions; Certain Rules of Construction) is hereby amended by deleting the following definitions in their entirety and replacing them with the following: (i) "Junior Credit Participation Agreement" means the Amended and Restated Junior Credit Participation Agreement dated as of July 17, 2003 among Knowledge Universe, Agent and Lenders. (c) Section 10.5.1 of the Credit Agreement (Leverage Ratio) is hereby deleted in its entirety and replaced with the following: "10.5.1 Leverage Ratio. The Company shall not permit for any period set forth below (measured as of the last day of each fiscal quarter of the Company), the ratio of (a) Consolidated Total Senior Debt (measured as of the last day of each fiscal quarter of the Company) to (b) Consolidated EBITDA to be more than the ratio corresponding to such period in the table set forth below. For purposes of the Leverage Ratio, the calculation of Consolidated EBITDA shall be based on Consolidated EBITDA for the immediately preceding twelve (12) months ended as of the last day of such quarter. In addition, for purposes of the Leverage Ratio, the calculations and ratios set forth below shall not be impacted by up to $2,500,000 of new loans made to the Company in connection with the Junior Credit Participation Agreement, and all of such new loans shall be excluded from the calculations and ratios for the Leverage Ratio in all respects.

PERIOD ENDING LEVERAGE RATIO ------------- -------------- September 30, 2003 10.90:1.00 December 31, 2003 52.00:1.00 March 31, 2004 17.40:1.00 June 30, 2004 7.50:1.00"

-2- (d) Section 10.5.2 of he Credit Agreement (Current Ratio) is hereby deleted in its entirety and replaced with the following: "10.5.2 Current Ratio. The ratio of Consolidated Current Assets to Consolidated Current Liabilities (measured on the last day of each fiscal quarter of the Company) shall not at any time be less than the ratio corresponding to such period in the table set forth below. In addition, for purposes of the Current Ratio, the calculations and ratios set forth below shall not be impacted by up to $2,500,000 of new loans made to the Company in connection with the Junior Credit Participation Agreement, and all of such new loans shall be excluded from the calculations and ratios for the Current Ratio in all respects.

FISCAL QUARTER ENDED RATIO -------------------- ----- September 30, 2003 1.05:1.00 December 31, 2003 1.05:1.00 March 31, 2004 0.23:1.00* June 30, 2004 0.24:1.00*

*The ratios set forth for the periods ending March 31, 2004 and June 30, 2004 assume that the Credit Obligations owing to the Lenders are carried as current liabilities on the balance sheet of the Company and its Subsidiaries at such date determined in accordance with GAAP on a Consolidated basis. In the event that the foregoing obligations are not carried as current liabilities on the balance sheet of the Company and its Subsidiaries at such date determined in accordance with GAAP on a Consolidated basis, then the ratios for such periods shall be adjusted accordingly." (e) Section 10.5.3 of the Credit Agreement (Total Debt Service Ratio) is hereby deleted in its entirety and replaced with the following: "10.5.3 Total Debt Service Ratio. The ratio of (a) Consolidated EBITDA minus actual cash payments made or accrued on account of taxes and Capital Expenditures (measured on the last day of each fiscal quarter of the Company) to (b) Consolidated Total Debt Service (excluding the Cambridge Acquisition Note) shall not at any time be less than the ratios corresponding to such period in the table set forth below. In addition, for purposes of the Total Debt Service Ratio, the calculations and ratios set forth below shall not be impacted by up to $2,500,000 of new loans made to the Company in connection with the Junior Credit Participation Agreement, and all of such new loans shall be excluded from the calculations and ratios for the Total Debt Service Ratio in all respects.

FISCAL QUARTER ENDED TOTAL DEBT SERVICE RATIO -------------------- ------------------------ September 30, 2003 .20:1.00 June 30, 2004 .25:1.00"

(f) A new Section 10.5.5 (Minimum Consolidated EBITDA) is hereby added to the Credit Agreement in the appropriate order as follows: -3- "10.5.5 Minimum Consolidated EBITDA. Minimum Consolidated EBITDA (defined below) shall not at any time be less than the applicable amount corresponding to such period in the table set forth below.

APPLICABLE AMOUNT MEASUREMENT DATE AND APPLICABLE PERIOD ----------------- -------------------------------------- $530,000 December 31, 2003, for the last twelve month period then ended $1,580,000 March 31, 2004, for the last twelve month period then ended

For purposes of this Section 10.5.5 the new term "Minimum Consolidated EBITDA" shall mean for any period, the total of: (a) Consolidated Net Income; plus (b) all amounts deducted in computing such Consolidated Net Income in respect of: (i) depreciation and amortization and other non-recurring non-cash charges, but excluding all Special Compensation and Other Charges (defined below), (ii) interest expense, and (iii) taxes based upon or measured by net income, minus (c) all cash payments (excluding $2,675,000 for the Company's fiscal year ended December 31, 2002 and $720,000 for the Company's fiscal year ended December 31, 2003) made during such period on account of real estate restructuring transactions, reductions in force and facilities, and unfavorable equipment leases from discontinued operations; minus (d) all amounts included in Consolidated Net Income in respect of deferred income tax benefits and other non-cash income items. For purposes of this Section 10.5.5 "Special Compensation and Other Charges" shall mean special charges from time to time incurred or paid by the Company or its Subsidiaries in connection with the Lexecon Employment Agreements, and which: (i) shall not be treated as an expense in respect of non-cash charges or amortization; (ii) shall not impact amortization in any way; and (iii) (notwithstanding their exclusion from the definition of Minimum Consolidated EBITDA) shall be in an amount equal to $1,000,000 in each quarter of 2004. In addition, Company and its Subsidiaries acknowledge and agree that amortization of the Lexecon Employee Agreements may not for any purpose be greater than or less than the following amounts on the following dates: $1,941,000 on March 31, 2003, $1,941,000 June 30, -4- 2003, $2,499,000 on September 30, 2003, $2,499,000 on December 31, 2003 and $0 on the last day of each quarter period thereafter. (g) Exhibit 11.1.1. of the Credit Agreement (Organization and Business) is hereby deleted in its entirety and replaced with Amended and Restated Exhibit 11.1.1 (Organization and Business) attached hereto. (h) Exhibit 11.1.2. of the Credit Agreement (U.S. Subsidiaries) is hereby deleted in its entirety and replaced with Amended and Restated Exhibit 11.1.2. (U.S. Subsidiaries) attached hereto. (i) Section 12.1.3(a) of the Credit Agreement (Lexecon Employees) is hereby deleted in its entirety and replaced with the following: "12.1.3(a) Lexecon Employees. The Company shall fail to timely satisfy any of its obligations under the Lexecon Employment Agreements, including without limitation, its obligations pursuant to Section 2(c) of each such agreement to deposit $10,000,000 (to total $20,000,000 in the aggregate) in immediately available funds on or before January 15, 2004 into accounts at banks or investment firms designated by Dennis Carlton and Daniel Fischel, as applicable." (j) Section 18 of the Credit Agreement (Notices) is hereby deleted in its entirety and replaced with the following: "18. Notices. Except as otherwise specified in this Agreement or any other Credit Document, any notice required to be given pursuant to this Agreement or any other Credit Document shall be given in writing. Any notice, consent, approval, demand or other communication in connection with this Agreement or any other Credit Document shall be deemed to be given if given in writing (including telex, telecopy or similar teletransmission) addressed as provided below (or to the addressee at such other address as the addressee shall have specified by notice actually received by the addressor), and if either (a) actually delivered in fully legible form to such address (evidenced in the case of a telex by receipt of the correct answerback) or (b) in the case of a letter, unless actual receipt of the notice is required by any Credit Document five (5) days shall have elapsed after the same shall have been deposited in the United States mails, with first class postage prepaid and registered or certified. If to the Company or any of its Subsidiaries, to it at its address set forth in Exhibit 11.1.1, as amended from time to time (and as further supplemented pursuant to Sections 10.4.1 and 10.4.2), to the attention of the chief financial officer. If to any Lender or the Agent, to it at its address set forth below or in the Register, with a copy to the Agent. -5- If to Agent and/or Fleet: Fleet National Bank 100 Federal Street Boston, MA 02110 Attn: Fred P. Lucy, Vice President Telecopy: (617) 434-4775 With a copy to: Brown Rudnick Berlack Israels LLP One Financial Center Boston, MA 02111 Attn: William R. Baldiga, Esquire Mary D. Bucci, Esquire Telecopy: (617) 856-8201 If to Banc of America Strategic Solutions, Inc.: Banc of America Strategic Solutions, Inc. 335 Madison Avenue NY1-503-05-06 Attn: Bill Crawford, Managing Director Telecopy: (212) 503-7080" 3. Bonus Account Matters. (a) Initial Borrowing; Repayment. In accordance with Section 8.2(b) (New Bonus Account) of the Credit Agreement, the Company shall be permitted to use up to $568,000 of the funds held in the New Bonus Account for its immediate cash needs on account of payroll and payroll taxes (which borrowing shall constitute one of the four (4) borrowings permitted prior to the Maturity Date); provided, however, that notwithstanding the requirement in Section 8.2(b) that the Company shall replenish any and all of the New Bonus Account Funds so borrowed in full in cash within thirty (30) days, the Company shall be permitted on a one time basis to repay such funds on or before November 17, 2003. The Agent's and Lenders' decision to permit repayment on November 17, 2003 is a courtesy to the Company and does not reflect the Agent's and Lenders' intention, or a commitment by the Agent and Lenders, to honor any such repayment extension request in the future. Under the Credit Agreement, the Agent and Lenders are not obligated to honor such repayment extension requests and do not intend to honor any such requests in the future, unless the Agent and Lenders elect to do so in their sole and absolute discretion. The Company's failure to replenish the New Bonus Account funds in full in cash on or before November 17, 2003 shall constitute an Event of Default under this Amendment, the Credit Agreement and the Credit Documents. -6- (b) Payments. Notwithstanding anything contained in Section 8.2(b) (New Bonus Account) of the Credit Agreement or in any other provision of the Credit Agreement or Credit Documents, the Company shall fund cash in an amount equal to the Agreed Percentage (as defined in the Credit Agreement) of all employee bonuses which are earned but unpaid on account of periods ended (i) July 2003, August 2003 and September 2003, in each case on or before September 17, 2003; and (ii) October 2003, November 2003 and December 2003, in each case on or before December 17, 2003 (except any accrued bonuses not subject to this Section or Section 8.2 of the Credit Agreement, as designated in their discretion by the Agent and the Lenders in writing), which funds shall disbursed by the Company only to fund such bonuses, and thereafter the Company shall deposit additional cash into the New Bonus Account if additional bonuses are earned and/or accrued and not immediately paid in accordance with Section 8.2 of the Credit Agreement. 4. Consent to Second Amendment Junior Credit Participation Agreement. In accordance with Section 15.2 of the Credit Agreement, each of the Company and its Subsidiaries acknowledges that (i) on or before the date of this Amendment, the Lenders shall sell a junior credit participation in the Term Loan to Knowledge Universe in an aggregate amount of $7,500,000 ($5,000,000 previously was paid and $2,500,000 shall be paid on the date hereof); (ii) Company's and its Subsidiaries' consent to the sale of a junior credit participation is not required under the Credit Agreement; and (iii) the Lenders' sale of the junior credit participation in the Term Loan shall not affect their obligations for repayment of the entire unpaid balance of the Credit Obligations (including, but not limited to, any portion thereof in respect to which the junior credit participation has been issued) in accordance with the terms of this Agreement or any Credit Document and that the respective priorities, rights, obligations and privileges of the Lenders and New Lender vis-a-vis each other shall be governed by the Amended and Restated Junior Credit Participation Agreement attached hereto as Exhibit 7(iv) (described below). 5. Waiver Fee. The Company acknowledges and agrees that, as partial consideration for the Agent's and Lenders' agreements and commitments hereunder, the Company shall pay to the Agent, for distribution to each Lender (except for Knowledge Universe, who waives any and all rights to such waiver fee in all respects) in accordance with such Lender's proportionate share of the principal amount of all outstanding Loans, a waiver fee in the amount of $187,500, which fee shall be immediately earned in its entirety on the date hereof and paid in cash or Cash Equivalents by the Company to the Agent by 2:00 p.m. on the dates and in the amounts set forth in the table below:

PAYMENT DATE PAYMENT AMOUNT - ------------ -------------- August 15, 2003 $31,250, which installment shall be waived if the Loans have been repaid in full in Cash Equivalents on or before such date. November 15, 2003 $31,250, which installment shall be waived if the Loans have been repaid in full in Cash Equivalents on or before such date.

-7- February 15, 2004 $31,250, which installment shall be waived if the Loans have been repaid in full in Cash Equivalents on or before such date. May 16, 2004 $31,250, which installment shall be waived if the Loans have been repaid in full in Cash Equivalents on or before such date. August 15, 2004 $31,250, which installment shall be waived if the Loans have been repaid in full in Cash Equivalents on or before such date. November 15, 2004 $31,250, which installment shall be waived if the Loans have been repaid in full in Cash Equivalents on or before such date. 6. Waiver of Events of Default. Subject to satisfaction of the conditions precedent set forth in Section 6 below, Agent and Lenders hereby waive the Events of Default set forth on Schedule D-1 hereto (the "Specified Events of Default"). The waiver herein is limited to the specifics hereof, shall not excuse future non-compliance with the Credit Agreement, and, except as expressly set forth herein, shall not operate as a waiver or an amendment of any right, power, or remedy of Agent and Lenders, nor as a consent to or waiver of any further or other matter, under the Credit Agreement or Credit Documents. The Agent and Lenders expressly reserve all rights and remedies available to them as a result of non-Specified Defaults or Events of Default. 7. Conditions Precedent. Agent's and Lenders' obligations to enter into this Amendment and perform their respective obligations hereunder are subject to the condition precedent that the Agent and Lenders shall have received the following documents and other items, satisfactory to Agent and Lenders in their sole discretion, duly executed where appropriate by authorized representatives of Company and its Subsidiaries: (a) Documentation. Agent and Lenders shall have received, in form and substance satisfactory to Agent and Lenders and their counsel, a duly executed copy of the following: (i) this Amendment. (ii) evidence satisfactory to Agent and Lenders that the execution, delivery and performance of this Amendment have been duly authorized by all necessary corporate action. (iii) Second Amended and Restated Warrants in favor of the Lenders as to (a) Warrant Nos. 6 and 7 to purchase an aggregate of 1,418,351 shares of the Company's Class A Common Stock at an exercise price of $0.86 per share, as amended and restated substantially in the form of Exhibits 7(iii)(a)(i)-(ii) attached hereto; and (b) Warrant Nos. 8 and 9 to purchase an aggregate of 400,000 shares of the Company's Common Stock at an exercise price of $0.60 per share, substantially in the form of Exhibits 7(iii)(b)(i)-(ii) attached hereto. -8- (iv) each of Knowledge Universe, Agent and Lenders shall have duly authorized, executed and delivered a junior, last out participation by Knowledge Universe, Inc. in the Term Loan in an amount of not less than $7,500,000 (as described more fully in Section 4) in substantially the form of Exhibit 7(iv) hereto, and Knowledge Universe shall have purchased and fully paid for such participation. (v) such additional documents, instruments and certificates as the Agent and Lenders and their counsel shall reasonably require in connection therewith, all in form and substance satisfactory to the Agent and Lenders and their counsel. (b) Payments. Payment of all accrued but unpaid interest and all accrued but unreimbursed expenses, fees and other charges incurred by Lenders through the closing date, including, without limitation, attorneys' fees and expenses. (c) No Default. No Default or Event of Default shall exist, except as previously disclosed and consented to by the Agent and Lenders. (d) No Litigation. Except as set forth on Schedule A hereto and consented to by the Agent and Lenders, there is not litigation, arbitration, proceeding or investigation pending, or to the knowledge of the Company's or its Subsidiaries' officers, threatened against Company or any of its Subsidiaries that, if adversely determined would result in a material judgment not fully covered by insurance or that would otherwise have a material adverse effect on the assets, business or prospects of Company of any of its Subsidiaries. 8. Conditions Subsequent. In addition to the foregoing, the Company hereby agrees that it shall deliver to Agent an amendment to that certain Irrevocable Letter of Credit dated April 16, 2001, as amended through the date of this Amendment (to update the reference to Agent's mail stop number) on or before August 18, 2003. A failure to timely satisfy the condition contained in this Section 8 shall immediately constitute an Event of Default under the Credit Documents. 9. Acknowledgment of Credit Obligations. Company hereby acknowledges and agrees that it is unconditionally liable to Agent and Lenders for the full and immediate payment of each of the Credit Obligations under the Credit Obligations and Credit Documents, including, without limitation, the "Obligations" set forth on Schedule B attached hereto and incorporated herein by reference, plus all charges, fees, costs and expenses that may arise under the Credit Agreement and Credit Documents, plus all attorneys' fees, disbursements and costs of collection incurred in connection with such Credit Obligations by Agent and Lenders and that Company does not have any defenses, counterclaims or set-offs with respect to the full and immediate payment and performance of any or all obligations under the Credit Agreement, Credit Document or the Credit Obligations. 10. Enforceability of Obligations; Acknowledgment of Events of Default. Company agrees that (i) the Credit Agreement and Credit Documents are in full force and effect, and enforceable against Company in accordance with their respective terms; (ii) the existing Events of Default under the Credit Agreement and Credit Documents constitute material defaults under the Credit Documents; (iii) any notices that might be given and any grace periods or cure periods which must expire, prior to Agent and Lenders exercising any of their rights and remedies in -9- connection with the Credit Agreement or Credit Documents, have been given, complied with and expired and, in any event, are hereby waived and relinquished by Company; and (iv) Agent and Lenders have not waived or relinquished and by executing this Amendment Agent and Lenders shall not be deemed to have waived or relinquished any of their rights or remedies under the Credit Agreement or Credit Documents, all of which rights and remedies are in full force and effect, are fully available to Agent and Lenders, and are expressly reserved by Agent and Lenders. 11. Representations and Warranties. Company makes the following representations and warranties: (a) Authority. Company and its Subsidiaries are duly organized, validly existing and in good standing under the laws of their organization and in each jurisdiction where Company or its Subsidiaries are required to be qualified to do business. Company and its Subsidiaries are duly authorized to enter into, and perform its obligations under this Amendment and the agreements, instruments and documents contemplated hereby. The execution, delivery and performance by Company and its Subsidiaries of this Amendment will not violate Company's or it Subsidiaries' charters, partnership agreements, or operating agreements, any law or any provision thereof, nor (except under the Credit Agreement and Credit Documents) are there any grounds for acceleration under, any agreement, note, or instrument which is binding upon Company or its Subsidiaries. (b) No Misrepresentations. Without limiting any rights or remedies Agent and Lenders may have under law or equity, Company agrees that all statements and information provided by Company to Agent and Lenders pursuant to, or in connection with, this Amendment or the negotiations leading to this Amendment, have been and are true, complete and correct in all material respects, and none of such items contain any omissions of any fact or matter necessary to keep the statements and information therein from being misleading. 12. Release of Claims. In consideration for Agent and Lenders entering into this Amendment, Company and its Subsidiaries hereby release and forever discharge Agent and Lenders, and their respective successors, assigns, agents, shareholders, directors, officers, employees, agents, attorneys, parent corporations, subsidiary corporations, affiliated corporations, affiliates, and each of them, from any and all claims, debts, demands, obligations, costs, expenses, actions and causes of action, of every nature and description, known and unknown, whether or not related to the subject matter of this Amendment, which Company or its Subsidiaries now has or at any time may have held, by reason of any matter, cause or thing occurred, done, omitted or suffered to be done prior to the date of this Amendment. Company and its Subsidiaries waive the benefits of any law, which may provide in substance: "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor." Company and its Subsidiaries understand that the facts which they believe to be true at the time of making the release provided for herein may later turn out to be different than they now believe, and that information which is not known or suspected may later be discovered. Company and its Subsidiaries accept this possibility, and Company and its Subsidiaries assume the risk of the facts turning out to be different and new information being discovered; and Company and its Subsidiaries further agree that the release provided for herein shall in all respects continue to be effective and not subject to termination or rescission because -10- of any difference in such facts or any new information. This release is fully effective on the date of execution hereof. Agent and Lenders are not releasing Company or its Subsidiaries from any claims, debts, Credit Obligations, obligations, guarantees, demands, costs, expenses, actions or causes of action. 13. General Provisions. (a) Integration; Amendment; Waivers. This Amendment, the Credit Agreement and Credit Documents set forth in full all of the terms of the agreement between the parties and are intended as the full, complete and exclusive contract governing the relationship between the parties, superceding all other discussions, promises, representations, warranties, agreements and the understandings between the parties with respect thereto. No term of this Amendment or the Credit Agreement or Credit Documents may be modified or amended, nor may any rights thereunder be waived, except in a writing signed by the party against whom enforcement of the modification, amendment or waiver is sought. Any waiver of any condition in, or breach of, any of the foregoing in a particular instance shall not operate as a waiver of other or subsequent conditions or breaches of the same or a different kind. Agent's and Lenders' exercise or failure to exercise any rights under any of the foregoing in a particular instance shall not operate as a waiver of its right to exercise the same or different rights in subsequent instances. Except as expressly provided to the contrary in this Amendment, or in another written agreement, all the terms, conditions, and provisions of the Credit Agreement and Credit Documents shall continue in full force and effect. This Amendment shall constitute a Credit Document. (b) Payment of Expenses. Without limiting the terms of the Credit Agreement or Credit Documents, Company or its Subsidiaries shall pay all costs and expenses incurred by or on behalf of Agent and Lenders (including, without limitation, reasonable attorneys' fees and expenses and costs of collection) arising under or in connection with this Amendment or the Credit Agreement or the Credit Documents, including, without limitation, in connection with (i) the negotiation, preparation, execution and delivery of this Amendment and the Credit Documents, and any and all consents, waivers or other documents or instruments relating thereto; (ii) the filing and recording of any other documents or instruments of further assurances filed or recorded in connection with the Credit Agreement or any Credit Document; (iii) any other action required in the course of administration hereof, including, but not limited to all fees and expenses arising out of any audits, appraisals, inspections; and (iv) the defense or enforcement of the Credit Agreement and Credit Documents, whether or not there is any litigation between the parties. All costs and expenses shall be added to the Credit Obligations, as Agent and Lenders shall determine, and shall earn interest at the highest rate provided for under the Credit Agreement and Credit Documents. (c) No Third Party Beneficiaries. This Amendment does not create, and shall not be construed as creating, any rights enforceable by any person not a party to this Amendment. (d) Severability. If any provision of this Amendment is held by a court of competent jurisdiction to be invalid, illegal or unenforceable, the remaining provisions of this Amendment shall nevertheless remain in full force and effect. -11- (e) Counterparts; Telecopy Execution. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Amendment. Delivery of an executed counterpart of this Amendment by telecopy shall be equally as effective as delivery of an original executed counterpart of this Amendment. Any party delivering an executed counterpart of this Amendment by telecopy also shall deliver an original executed counterpart of this Amendment but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment. The foregoing shall apply to each other Credit Document mutatis mutandis. (f) Time of Essence. Time is of the essence in each of the obligations of Company and its Subsidiaries and with respect to all conditions to be satisfied by Company and its Subsidiaries. (g) Construction; Voluntary Agreement. This Amendment has been prepared through the joint efforts of all of the parties. Neither its provisions nor any alleged ambiguity shall be interpreted or resolved against any party on the ground that such party's counsel was the drafter of this Amendment. Each of the parties declares that such party has carefully read this Amendment and the agreements, documents and instruments being entered into in connection herewith and that such party knows the contents hereof and has signed this Amendment freely and voluntarily. The parties hereto acknowledge that they have been represented in negotiations for and preparation of this Amendment and the agreements, documents and instruments being entered into in connection herewith by counsel of their own choosing, and that each of them has read the Amendment and had its contents fully explained by such counsel and is fully aware of its contents and legal effect. (h) Governing Law; Forum Selection. This Amendment has been entered into and shall be governed by the laws of the Commonwealth of Massachusetts. As a material part of the consideration to the parties for entering into this Amendment, each party (i) agrees that, at the option of Lender, all actions and proceedings based upon, arising out of or relating in any way directly or indirectly to, this Amendment, the Credit Agreement, or the Credit Documents, shall be litigated exclusively in federal or state courts located in Suffolk County, Massachusetts; (ii) consents to the jurisdiction of any such courts and consent to the service of process in any such action or proceeding (whether or not litigated in courts located in Suffolk County, Massachusetts) by personal delivery or any other method permitted by law; and (iii) waives any and all rights to transfer or change the venue of any such action or proceeding to any court located outside Suffolk County, Massachusetts. (i) Further Assurances. Company and its Subsidiaries agree, at their costs and expense, to take all further actions, execute all further documents, agreement or instruments and obtain such additional consents and approvals as Agent and Lenders may from time to time request, in their discretion, with respect to the purposes, terms, and conditions of this Amendment and the Credit Agreement and Credit Documents and the consummation of the transactions contemplated by this Amendment. -12- (j) Notices. All notices, requests and demands to or upon the parties hereto shall be given in accordance with the Credit Agreement, as amended by this Amendment. (k) Acknowledgment of Guarantors. Each Guarantor, for value received, hereby assents to the Company's execution and delivery of this Amendment, and the performance by Company of its agreements and obligations hereunder. This Amendment and the performance or consummation of any transaction that may be contemplated under this Amendment, shall not limit, restrict, extinguish or otherwise impair any Guarantor's liabilities and obligations to Agent and Lenders under its respective Guaranty and Security Agreement. Each Guarantor acknowledges and agrees that (i) its respective Guaranty and Security Agreement remains in full force and effect and is fully enforceable against such Guarantor in accordance with its terms; and (ii) it has no offsets, claims or defenses to or in connection with its obligations under its respective Guaranty and Security Agreement, all of which offsets, claims and/or defenses are hereby waived. (l) Acknowledgement of Junior Creditor. Junior Creditor, for value received, hereby assents to the Company's execution and delivery of this Amendment, and the performance by Company of its agreements and obligations hereunder. This Amendment and the performance or consummation of any transaction that may be contemplated under this Amendment, shall not limit, restrict, extinguish or otherwise impair Junior Creditor's liabilities and obligations to Agent and Lender under the Subordination Agreement. Junior Creditor acknowledges and agrees that (i) its Subordination Agreement remains in full force and effect and is fully enforceable against Junior Creditor in accordance with its terms; and (ii) it has no offsets, claims or defenses to or in connection with its obligations under its respective Subordination Agreement, all of which offsets, claims and/or defenses are hereby waived. [SIGNATURE PAGES FOLLOW] -13- Executed under seal on the date set forth above. COMPANY: NEXTERA ENTERPRISES, INC. One Cambridge Center Cambridge, MA 02142 Telecopy: (617) 715-0201 By: /s/ Michael P. Muldowney ______________________________ Name: Michael P. Muldowney Title: Chief Financial Officer SUBSIDIARIES AND GUARANTORS: CE ACQUISITION CORP. ERG ACQUISITION CORP. LEXECON INC. NETNEXT, INC. NEXTERA BUSINESS PERFORMANCE SOLUTIONS GROUP, INC. NEXTERA INTERACTIVE, INC. SCANADA, INC. NEXTERA & COMPANY, LLC NEXTERA INTERNATIONAL, LLC By: /s/ Michael P. Muldowney ______________________________ Name: Michael P. Muldowney Title: Officer As an authorized officer of each of the foregoing corporations or limited liability companies. -14- AGENT AND LENDER: FLEET NATIONAL BANK By: /s/ Fred P. Lucy ------------------------- Name: Fred P. Lucy Title: Vice President FLEET NATIONAL BANK 100 Federal Street MA DE 1006A Boston, Massachusetts 02110 Telecopy: (617) 434-4775 -15- LENDER: BANC OF AMERICA STRATEGIC SOLUTIONS, INC. By: /s/ Bill Crawford ____________________________ Name: Bill Crawford Title: Managing Director BANC OF AMERICA STRATEGIC SOLUTIONS, INC. 335 Madison Avenue NY1-503-05-06 New York, NY 10017-4605 Telecopy: (212) 503-7080 -16- TERMS AND CONDITIONS ACKNOWLEDGED, AGREED AND CONSENTED TO: AS JUNIOR CREDITOR, GUARANTOR AND OBLIGOR: KNOWLEDGE UNIVERSE, INC. By: /s/ Stanley E. Maron -------------------------------- Name: Stanley E. Maron Title: Secretary Address: Maron & Sandler Attn: Stan Maron 1250 4th Street Suite 550 Santa Monica, CA 90401 -17- SCHEDULE A (Litigation) Attached. -18- SCHEDULE B (Obligations) (Unpaid Principal as of July 16, 2003)* Revolving Credit Loans: $3,000,000 Term Loans: $22,600,320.68 Letters of Credit: $0 *plus (i) any monies loaned to the Company under the Credit Agreement in connection with any junior credit participation agreement(s); and (ii) all accrued and accruing interest, costs, fees, attorneys' fees and disbursements and other charges as provided under the Credit Agreement and/or Credit Documents. -19- SCHEDULE D-1 (Specified Events of Default) 1. Leverage Ratio. Company failed to maintain a ratio of (a) Consolidated Total Senior Debt to (b) Consolidated EBITDA of less than 3.75:1.00 for the period ending June 30, 2003, in violation of Section 10.5.1 of the Credit Agreement. 2. Current Ratio. Company failed to maintain a ratio of Consolidated Current Assets to Consolidated Current Liabilities of at least 1.3:1.00 for the period ending June 30, 2003, in violation of Section 10.5.2 of the Credit Agreement. -20- EXHIBIT 11.1.1. (Organization and Business) Attached. -21- EXHIBIT 11.1.2 (U.S. Subsidiaries) Attached. -22- EXHIBIT 7(iii)(a)(i)-(ii) (Second Amendment and Restated Warrants - 6 and 7) Attached. -23- EXHIBIT 7(iii)(b)(i)-(ii) (Second Amendment and Restated Warrants - 8 and 9) Attached. -24- EXHIBIT 7(iv) (Junior Credit Participation Agreement) Attached. -25- EX-10.2 8 a91942exv10w2.txt EXHIBIT 10.2 EXHIBIT 10.2 EXECUTION COPY July 17, 2003 Fleet National Bank 100 Federal Street Boston, MA 02110 Attn: Fred P. Lucy Vice President Banc of America Strategic Solutions, Inc. 335 Madison Avenue NY1-503-05-06 Attn: Bill Crawford Managing Director RE: AMENDED AND RESTATED JUNIOR CREDIT PARTICIPATION AGREEMENT Gentlemen: Reference is made to the Second Amended and Restated Credit Agreement between, on one hand, Nextera Enterprises, Inc., a Delaware corporation (the "Company"), and on the other hand, Fleet National Bank, as agent ("Agent") for itself and the other lenders party thereto (the "Lenders"), dated as of December 31, 2002, as amended by that certain First Amendment dated as of July 8, 2003 and that certain Second Amendment dated the date hereof (as the same may be further amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement"), together with any other agreements, supplements, documents and instruments relating thereto or executed in connection therewith, all as from time to time amended and supplemented (collectively, the "Credit Documents"). The undersigned, Knowledge Universe, Inc., a Delaware corporation with an address at 1250 4th Street, Suite 550, Santa Monica, California 90401 ("Junior Credit Participant"), has requested that Agent and Lenders sell to Junior Credit Participant a Junior Credit Participation (as hereinafter defined) in the advances, loans and other financial accommodations presently outstanding and which may hereafter be extended by Agent and Lenders to Company, pursuant to the Credit Documents and all other indebtedness now or hereafter owed by Company to Agent and Lenders in connection therewith or otherwise, and Agent and Lenders have agreed to do so, all on the terms and conditions hereinafter set forth. Junior Credit Participant previously purchased a $5,000,000 Junior Credit Participation pursuant to that certain Junior Credit Participation Agreement dated as of December 31, 2002 (the "Prior Credit Participation Agreement") and wishes to purchase an additional junior participation in the amount of $2,500,000. Junior Credit Participant requests that the Prior Junior Credit Participation Agreement bet deemed of no further force and effect, and be replaced, in all respects, by this Amended and Restated Junior Credit Participation Agreement. In consideration of these premises, the mutual covenants herein contained and for other valuable consideration, Junior Credit Participant hereby agrees with Agent and Lenders as follows: 1. Certain Defined Terms. (a) "Obligations" as used in this Agreement shall mean and include, without limitation, the advances, loans and other financial accommodations and all other obligations and liabilities now or hereafter owed by Company to Agent and Lenders under the Credit Documents or otherwise, whether direct or indirect and whether fixed or contingent, and shall also include interest or charges accruing after the filing of a bankruptcy petition or similar proceeding, whether or not such interest or charges are recoverable from the Company. (b) "Paid in Full", "Payment in Full", "Repaid in Full", or "Repayment in Full" or any similar terms when used in connection with the Obligations shall mean the final indefeasible payment in full of such Obligations in cash or immediately available funds and termination of all lending commitments or, in the case of Obligations consisting of contingent obligations in respect of letters of credit, bankers' acceptances or other reimbursement or payment type guaranties under the Credit Documents, the setting apart of cash sufficient to discharge such portion of the Obligations in an account for the exclusive benefit of the holders thereof, in which such holders shall be granted a first priority perfected security interest which shall have been retained by Agent and Lenders, in each case, for a period of time in excess of all applicable preference or other similar periods under the U.S. Bankruptcy Code and other applicable insolvency laws, state or Federal. (c) "Permitted Cash Payment Conditions" shall mean, as to each particular Permitted Cash Payment, each of the following: (i) immediately before and after giving effect to any Permitted Cash Payment there is no Default or Event of Default which has occurred and is continuing under any Credit Document; (ii) for any period, such Permitted Cash Payment shall be payable no sooner than the day that the subject funds are received by the Agent in immediately available funds (or, if later, the day that such funds become immediately available) and shall be paid promptly after the Lenders' receipt of any and all payments of principal and interest owing to them for the same period; -2- (iii) the Company shall have delivered to the Lenders a written certificate (together with independent written evidence) signed by the Chief Financial Officer of the Company which certifies that the Company is in compliance with the Investment Banking Benchmarks set forth in Section 5.3 of the Credit Agreement and due to be completed on or before the scheduled date of such Permitted Cash Payment; and (iv) the Company shall be in compliance with all financial and other covenants and provisions to be performed or observed by it under any Credit Document immediately before and after giving effect to any such Permitted Cash Payment. (d) Other Terms. Capitalized terms not otherwise defined herein shall have the respective meanings assigned to them in the Credit Documents. 2. Sale and Purchase of Junior Credit Participation. Junior Credit Participant hereby agrees to purchase, and does hereby purchase, from Agent and Lenders and Agent and Lenders hereby agree to sell, and do hereby sell, to Junior Credit Participant an undivided Junior Credit Participation of Seven Million Five Hundred Thousand Dollars ($7,500,000) Dollars (the "Junior Credit Participation") in the Obligations and in the property, security interests and/or guarantees received by Agent and Lenders as security for the Obligations (the "Collateral"), and in all moneys received by Agent and Lenders on account of the Obligations and/or as proceeds of the Collateral (the "Collections"), except as hereinafter provided. Receipt of the purchase price of the Junior Credit Participation is acknowledged by Agent and Lenders. ($5,000,000 previously was paid and $2,500,000 has been paid on the date hereof). Agent and Lenders have provided to Junior Credit Participant a Participation Certificate in the form attached hereto as Exhibit A. 3. Application of Proceeds. Agent and Lenders may apply all or any part of the proceeds of the Collateral, payments received from Company and credits for Company's account to all or any part of the Obligations and in such order as Agent and Lenders may elect in Agent's and Lenders' sole and absolute discretion, except that unless an Event of Default has occurred under the Credit Agreement or any Credit Document, Agent and Lenders shall not amend Section 5.3 of the Credit Agreement (dealing with distributions upon the occurrence of one or more Transactions (as defined in the Credit Agreement)) without the prior written consent of the Junior Credit Participant. Specifically, and without limitation of the foregoing, Junior Credit Participant acknowledges that Agent and Lenders may, and intend to, apply the proceeds of the Collateral, in the event of a liquidation or other disposition of the Collateral after the occurrence of an Event of Default under the Credit Agreement or any Credit Document, first to the portion of the Loans not sold to Junior Credit Participant; accordingly, the effect of this Agreement is to subordinate Junior Credit Participant's interests in the Obligations to Agent's and Lenders' interests in all of the Obligations upon the occurrence of an Event of Default, and Junior Credit Participant acknowledges and agrees to the same. -3- 4. Freedom of Dealing. It is understood and agreed by Junior Credit Participant that, in Agent's and Lenders' sole and absolute discretion, Agent and Lenders may continue to extend additional advances, loans and other financial accommodations to Company, including, without limitation, after default and/or commencement and during the continuation of any case under the U.S. Bankruptcy Code with respect to Company ("Post-Petition Advances") and the Junior Credit Participation shall be subject and subordinate to such Post-Petition Advances and in the security therefor on the same terms and conditions as are set forth herein. 5. Reservation of Rights. Agent and Lenders shall have the sole right to manage, perform, modify, restructure, extend, supplement and enforce the Credit Documents, Obligations and the Collateral, and to waive, discharge, exercise and enforce all privileges, rights and remedies exercisable or enforceable by Agent and Lenders thereunder, for the joint benefit of Agent and Lenders and Junior Credit Participant, in accordance with Agent's and Lenders' sole and absolute discretion and the exercise of Agent's and Lenders' business judgment, and without charge to Junior Credit Participant for any costs or expenses incurred by Agent and Lenders in connection therewith; provided, however, that Junior Credit Participant shall pay its pro rata share of any out-of-pocket expenses (including, without limitation, the fees and expenses of Agent's and Lenders' counsel) of recovery, defense and enforcement of the Obligations and the Collateral which exceeds the amount recovered from Company or from the Collateral or otherwise for Company's account ONLY if as to such expenses any of the following conditions apply: (A) such expenses may be satisfied out of Collateral liquidations, payments or other recoveries later received (or reserved for such purpose) on the Obligations in accordance with Section 3 above, or (B) such expenses were incurred at Junior Credit Participant's request, or (C) such expenses were incurred on account of any action or threat of action, or breach of any obligation to the Agent or the Lenders with respect to the Obligations or the Credit Documents, by Junior Credit Participant or any affiliate or representative thereof. Agent and Lenders will use normal prudence and business judgment in handling the collection and enforcement of the Obligations and realization upon the Collateral, but shall not be liable to Junior Credit Participant for any action taken or omitted to be taken in good faith or on the written advice of counsel. With respect to any actions or inaction taken by Agent and Lenders in good faith or on the written advice of counsel, Junior Credit Participant expressly releases Agent and Lenders from any and all liability and responsibility (express or implied), for any loss, depreciation of or delay in collecting or failing to realize on any Collateral, the Obligations or any guaranties therefor and for any mistake, omission or error in judgment in passing upon or accepting any Collateral or in making examinations or audits or for granting indulgences or extensions to Company, any account debtor or any guarantor. Junior Credit Participant hereby pledges, assigns and grants to Agent and Lenders any right it may have to seek recovery on account of the Junior Credit Participation, including, without limitation, any right to commence litigation, vote to accept or reject a Chapter 11 plan or to otherwise vote on or direct any part of any bankruptcy case or any similar proceeding affecting the Obligations. 6. No Representations or Warranties. Agent and Lenders make no representation or warranty (express or implied) and shall have no responsibility, as to the validity, value, enforceability or collectibility of the Obligations or the Credit Documents, or as to the title to, validity, priority, value, perfection or sufficiency of the Collateral, or any other guarantees or collateral of any kind, or as to the financial condition of Company or any account debtors. Junior -4- Credit Participant is thoroughly familiar with and has complete and current information concerning the financial condition and creditworthiness of Company. 7. Independent Credit Decision. Junior Credit Participant acknowledges that it has received and reviewed copies of all of the Credit Documents. Agent and Lenders may, from time to time, in Agent's and Lenders' discretion and without notice to or consent of Junior Credit Participant, amend, modify, renew and/or release in whole or in part the Obligations, the Credit Documents, the Collateral and any guaranties therefor, as well as extend advances, loans and other financial accommodations to Company in excess of any formulas under the Credit Documents, without notice to or the consent of Junior Credit Participant. Agent and Lenders shall, from time to time, furnish Junior Credit Participant with copies of such other papers and documents relating to the Obligations and the Collateral and with statements describing the status of the Obligations and the Collateral, as Junior Credit Participant may reasonably request, but it is expressly agreed that Junior Credit Participant shall have no access and no right to review, examine, or audit Agent's and Lenders' books, records, and accounts relating to the Obligations or the Company, except for copies of the Credit Documents as the Junior Credit Participant may request. 8. Distributions. Interest shall accrue from the date hereof on the outstanding principal on the Junior Credit Participation at a rate equal to ten percent (10%) per annum, compounded monthly, based on the calendar year, but in no case shall the interest rate exceed the maximum rate allowed by law. The Company may make and the Junior Credit Participant may receive and retain on a current cash basis payments of accrued interest and principal repayment on the Junior Credit Participation (the "Permitted Cash Payments") in accordance with the terms and conditions of this Amended and Restated Junior Credit Participation Agreement, so long as the Permitted Cash Payment Conditions are and shall continue to be satisfied. Such Permitted Cash Payments shall be in an amount equal to the accrued, scheduled, mandatory cash payments of principal and interest on the Junior Credit Participation in accordance with the terms and conditions of this Amended and Restated Junior Credit Participation Agreement, including, without limitation, subordination terms; provided, however, that Permitted Cash Payments on account of (i) principal, shall not exceed $73,529 per month at any time, except that in addition to such amount, the Company shall also be permitted to make the following principal payments on the following dates, provided that the Permitted Cash Payment Conditions are and continue to be satisfied on each such payment date: $500,000 on October 31, 2003, $500,000 on December 31, 2003 and $1,500,000 on January 1, 2005; and (ii) interest, for any period, shall not exceed interest at an annual rate in excess of the rate of interest actually paid to the Lenders for the same period (without respect to the rate of interest charged after the occurrence of a Default or Event of Default under the Credit Documents); and provided, further, that interest at a greater rate may PIK for later payment in cash after all of the Loans owing to the Agent and Lenders have been Repaid in Full in cash. The Company shall not be entitled to make-up payments that are disallowed as a result of this Section 8; rather, any such disallowed payment shall be paid directly to the Lenders as a permanent additional prepayment of the then-outstanding Loans in such manner and order as Agent and Lenders deem appropriate in their sole and absolute discretion. Notwithstanding the foregoing, after termination of the Credit Documents and Payment in Full to Agent and Lenders of Agent's and Lenders' share and the shares of Agent's and Lenders' other senior participants in all principal and interest on the Obligations and the other items chargeable -5- to Company's account and due to Agent and Lenders (including, without limitation, attorneys' fees and legal expenses), Agent and Lenders remit to Junior Credit Participant any monies or other payment actually received by them that remain following such Payment in Full on the Obligations. 9. Subordinated Status. (a) Junior Credit Participant's Junior Credit Participation in the Obligations, the Collateral and the Collections is in all respects junior and subordinate to Agent's and Lenders' interests and those of Agent's and Lenders' other senior participants (if any) therein, and accordingly Agent and Lenders and such other senior participants shall first be Repaid in Full all of Agent's and Lenders' respective shares in the Obligations (including, without limitation, indebtedness of Company to Agent and Lenders, Post-Petition Advances and all charges, commissions, interest, costs, expenses and attorney's fees chargeable to Company in connection with the Obligations or the Collateral) prior to any repayment of all or any part of the Junior Credit Participation (except only for Permitted Cash Payments on Junior Credit Participant's interest in the Obligations, as provided above). (b) All Collections received shall be applied first to the payment of all costs and expenses incurred in effecting such Collections (including, without limitation, any costs, expenses, attorneys' fees and charges relating to the Obligations, Collateral and Collections), then to the unpaid balance of all Obligations, in such amount and/or order as Agent and Lenders elect in Agent's and Lenders' sole and absolute discretion, such Collections to be first retained and applied by Agent and Lenders until Repayment in Full of the principal of and interest on Agent's and Lenders' share and the shares of Agent's and Lenders' other senior participants in all such Obligations (except only for Permitted Cash Payments on Junior Credit Participant's interest in the Obligations, as provided above) and, except to the extent any order of any court provides otherwise, after termination of the Credit Documents, any surplus to be remitted to Junior Credit Participant. (c) The Obligations, the Collateral and the Collections thereon shall be held by Agent and Lenders in Agent's and Lenders' own name, but, to the extent of Junior Credit Participant's junior interest therein, as agent and trustee for Junior Credit Participant and subject to Junior Credit Participant's rights with respect thereto as herein set forth. Agent and Lenders do not assume, have made no warranties and shall not have (except only for the contractual obligations specifically set forth herein) any fiduciary obligations or duties or other liability to Junior Credit Participant for the repayment of the Junior Credit Participation or any interest equivalent thereon. -6- (d) The Junior Credit Participation may not be re-sold, sub-participated, assigned, pledged or otherwise disposed of by Junior Credit Participant. Junior Credit Participant hereby represents and warrants that no portion of the proceeds of the Obligations has been advanced to or for the account of Junior Credit Participant by Company, that no portion of Junior Credit Participant's payment to Agent and Lenders for the Junior Credit Participation represents, directly or indirectly, any proceeds of the Obligations and that this Agreement is valid, binding and enforceable with respect to Junior Credit Participant. 10. Assigned Interests. Upon Payment in Full of principal, interest and charges with respect to Agent's and Lenders' interest and of Agent's and Lenders' other senior participants in the Obligations and termination of the Credit Documents, Agent and Lenders agree to assign to Junior Credit Participant all Collateral for the Obligations and Agent's and Lenders' rights with respect thereto without representations, warranties or recourse of any kind or nature whatsoever. 11. Administrative Charges. Notwithstanding anything to the contrary contained in this Agreement, Junior Credit Participant shall not share in and Agent and Lenders shall retain as Agent's and Lenders' sole property and for Agent's and Lenders' exclusive benefit all interest charges, commissions and fees and administrative, handling and service charges with respect to the Obligations and the Collateral (except only for Permitted Cash Payments on Junior Credit Participant's interest in the Obligations, as provided above). 12. Waiver of Jury Trial. JUNIOR CREDIT PARTICIPANT, AGENT AND LENDERS EACH HEREBY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR IN CONNECTION WITH THIS AMENDED AND RESTATED JUNIOR CREDIT PARTICIPATION AGREEMENT AND FURTHER HEREBY WAIVES ANY RIGHT OF OFFSET OR RIGHT TO INTERPOSE ANY COUNTERCLAIM IN ANY SUCH ACTION. EACH OF THE PARTIES HERETO EXPRESSLY SUBMITS IN ADVANCE TO THE NONEXCLUSIVE JURISDICTION OF THE SUPERIOR COURT OF SUFFOLK COUNTY IN THE COMMONWEALTH OF MASSACHUSETTS AND THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS IN ANY ACTION OR PROCEEDING RELATING TO ANY CLAIM, DISPUTE OR OTHER MATTER PERTAINING DIRECTLY OR INDIRECTLY TO THIS AMENDED AND RESTATED JUNIOR CREDIT PARTICIPATION AGREEMENT. 13. Notices. All notices hereunder by Agent and Lenders to Junior Credit Participant shall be deemed given if addressed to Junior Credit Participant, at its address set forth above and sent by registered or certified mail, return receipt requested, or sent by telex or telecopy. All notices hereunder by Junior Credit Participant to Agent and Lenders shall be deemed given if addressed to Agent and Lenders at Agent's and Lenders' address set forth above and directed to the attention of Fred P. Lucy, Vice President, and delivered by certified or registered mail, return receipt requested, or by telex or telecopy. -7- 14. Headings. The Section headings in this Amended and Restated Junior Credit Participation Agreement are for convenience of reference only and shall not be deemed to alter or affect the meaning or interpretation of any of the provisions hereof. 15. Severability. If any provision of this Amended and Restated Junior Credit Participation Agreement shall for any reason be held to be held to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision hereof, but this Amended and Restated Junior Credit Participation Agreement shall be construed as if such invalid or unenforceable provision had never been contained herein. 16. Effective Date. This Amended and Restated Junior Credit Participation Agreement shall be effective upon the receipt by Agent of a counterpart hereof execution by or on behalf of Lenders, Junior Credit Participant and Company. 17. Amendments. This Amended and Restated Junior Credit Participation Agreement (a) may not be amended, modified or terminated orally or by any course of dealing, except an agreement in writing signed by Agent and Lenders and Junior Credit Participant, (b) shall remain in full force and effect until all Obligations and Post-Petition Advances are Paid in Full and the Credit Documents are terminated, unless, prior thereto, Agent and Lenders, in Agent's and Lenders' discretion, determine to repurchase the Junior Credit Participation, (c) shall be binding upon and inure to the benefit of the respective legal representatives, executors, heirs, administrators, successors and assigns of the parties hereto and shall be governed by and interpreted in accordance with the laws of the Commonwealth of Massachusetts, and (d) may be executed in counterparts, all of which shall constitute a complete agreement. IN WITNESS WHEREOF, Junior Credit Participant has executed this instrument under seal as of this 17th day of July, 2003. KNOWLEDGE UNIVERSE, INC., as Junior Credit Participant By: /s/ Stanley E. Maron -------------------------- Name: Stanley E. Maron Title: Secretary -8- ACCEPTED AND AGREED TO: FLEET NATIONAL BANK By: /s/ Fred P. Lucy ---------------------------------------------- Name: Fred P. Lucy Title: Vice President -9- BANC OF AMERICA STRATEGIC SOLUTIONS, INC. By: /s/ Bill Crawford ---------------------------------------------- Name: Bill Crawford Title: Managing Director -10- CONSENTED TO: NEXTERA ENTERPRISES, INC. By: /s/ Michael P. Muldowney ---------------------------------------------- Name: Michael P. Muldowney Title: Chief Financial Officer -11- EXHIBIT A Participation Certificate Date: July 17, 2003 Amount of Certificate: $7,500,000 Fleet National Bank ("Agent") hereby certifies that Knowledge Universe, Inc. ("Junior Credit Participant"), pursuant to the terms and subject to the conditions of an Amended and Restated Junior Credit Participation Agreement dated as of July 17, 2003 between Agent, Lenders (as defined in such Amended and Restated Junior Credit Participation Agreement) and Junior Credit Participant, has purchased an undivided junior participation interest in the Term Loan (as defined in such Amended and Restated Junior Credit Participation Agreement) in the above-referenced amount. THIS CERTIFICATE AMENDS, RESTATES AND REPLACES IN ITS ENTIRETY THE PARTICIPATION CERTIFICATE ISSUED IN CONNECTION WITH THE PRIOR CREDIT PARTICIPATION AGREEMENT ("PRIOR PARTICIPATION CERTIFICATE"), WHICH PRIOR PARTICIPATION CERTIFICATE IS DEEMED OF NO FURTHER FORCE AND EFFECT. THIS CERTIFICATE IS NOT TRANSFERABLE except as provided in the above referenced Amended and Restated Junior Credit Participation Agreement. FLEET NATIONAL BANK, as Agent for itself and the other Lenders By: /s/ Fred P. Lucy ----------------------------------------- Fred P. Lucy, Vice President -12- EX-99.1 9 a91942exv99w1.txt EXHIBIT 99.1 . . . EXHIBIT 99.1 [NEXTERA LETTERHEAD] FOR IMMEDIATE RELEASE Contacts: Michael Muldowney Jonathan Gasthalter/Kristin Celauro Chief Financial Officer and Chief Operating Officer Citigate Sard Verbinnen Nextera Enterprises (212) 687-8080 (617) 715-0200 NEXTERA ANNOUNCES SECOND QUARTER RESULTS CAMBRIDGE, MA - JULY 31, 2003 - Nextera Enterprises, Inc. (NASDAQ: NXRA), which consists of Lexecon, one of the world's leading economics consulting firms, today reported results for the second quarter ended June 30, 2003. In the 2003 second quarter, Nextera recorded a loss of $0.07 per share. The loss includes the amortization expense of non-compete agreements with certain key service providers of $0.06 per share. Nextera recorded a loss of $0.09 per share in the first quarter 2003, which included charges of $0.06 per share associated with the resignation of the Company's former Chief Executive Officer and the amortization expense of non-compete agreements with certain key service providers of $0.06 per share. Revenues for the second quarter were $16.8 million, versus $18.8 million in the first quarter 2003. The decline in revenue is attributable to normal business turnover, coupled with several recent engagements that have yet to reach full capacity. Net revenues for the second quarter 2003 were below Lexecon's second quarter 2002 net revenues of $18.2 million. Net loss for the second quarter was $2.3 million, versus a net loss of $3.1 million in the first quarter 2003. Included in the second quarter net loss was the amortization expense of $1.9 million for non-compete agreements with key service providers. The first quarter of 2003 included a charge of $1.9 million associated with the resignation of the Company's former Chief Executive Officer and the amortization expense of $1.9 million for non-compete agreements with certain key service providers. Operating loss in the second quarter was $0.2 million, down from the first quarter 2003 operating loss of $1.0 million. Nextera did not record a federal income tax benefit in the second quarter of 2003. Earnings before interest, taxes, depreciation and amortization (EBITDA), which includes approximately $1.0 million of corporate costs at the holding company level, was $2.1 million for the second quarter. Although EBITDA is not a measure of financial condition or performance determined in accordance the Generally Accepted Accounting Principles, the Company believes the use of EBITDA as a supplemental financial measure is meaningful to investors in assessing the company's debt leverage and its ability to service such debt. Lexecon's annualized revenue per professional in the second quarter was $505,000, up from $504,000 per professional in the first quarter of 2003. Lexecon utilization in the second quarter was 66%, down from 67% in the first quarter of 2003. Days sales outstanding (DSO) at the end of the 2003 second quarter was 115 days, consistent with the DSO at the end of the 2003 first quarter. Nextera had $30.4 million outstanding under its senior credit facility at the end of the second quarter, down from $32.2 million at the end of the first quarter 2003. In the second quarter, the Company made approximately $1.8 million of payments from cash flow from operations to reduce its debt obligations under the senior credit facility. Cash flows from operations in the second quarter [NEXTERA LETTERHEAD] were $3.7 million. At the end of the quarter, Nextera had $1.4 million of unrestricted cash on hand. At the end of the second quarter, Nextera exercised its option to extend the covenants not to compete from July 15, 2003 to January 15, 2004 with key service providers, Dan Fischel and Dennis Carlton. In conjunction with the payments made to Messsrs. Fischel and Carlton to exercise this option, Knowledge Universe, Inc. advanced the Company $2.5 million through its junior participation in the senior credit facility. Recent client engagement highlights for Lexecon include: - Providing expert testimony on behalf of a client requesting approval from the Federal Energy Regulatory Commission (FERC) for transportation capacity on developing deepwater pipeline systems in the Gulf of Mexico, which the FERC approved; - Providing expert testimony in an antitrust price-fixing case on behalf of salmon processors and seafood importers operating in Alaska, resulting in a favorable settlement for the salmon processors and seafood importers over the plantiffs who sought over $1 billion in damages; and - Testifying before a joint Federal Trade Commission and Department of Justice commission on Health Care and Competition Law and Policy. Additionally, in the second quarter, the Third Circuit Court of Appeals upheld a lower court decision that American Airlines did not engage in predatory pricing following the entry of low-fare carriers on the Dallas-Fort Worth routes, based largely on expert economics testimony by Lexecon consultants. CONFERENCE CALL Nextera will host a conference call today, July 31, at 11:00 a.m. Eastern Time to discuss its first quarter results. Analysts and investors can access the conference call by dialing 1-888-280-4443. Individuals and media can also access the call through the Internet from the Nextera website at www.nextera.com. For those unable to participate in the call, a rebroadcast will be made available from July 31, 2:00 p.m. Eastern Time through August 7, 5:00 p.m. Eastern Time. In order to listen to the rebroadcast, dial 1-888-203-1112 and enter reservation number 744884 or go to www.nextera.com. ABOUT NEXTERA ENTERPRISES Nextera Enterprises Inc., through its wholly owned subsidiary, Lexecon, provides a broad range of economic analysis, litigation support, and regulatory and business consulting services. One of the nation's leading economics consulting firms, Lexecon assists its corporate, law firm and government clients reach decisions and defend positions with rigorous, objective and independent examinations of complex business issues that often possess regulatory implications. Lexecon has offices in Cambridge and Chicago. More information can be found at www.nextera.com and www.lexecon.com. 2 [NEXTERA LETTERHEAD] This press release contains forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) relating to Nextera Enterprises that are based on the beliefs of Nextera's management. Any statements contained in this press release that are not historical facts are forward-looking statements. Such statements are based on many important factors that may be outside of Nextera's control, causing actual results to differ materially from those suggested. Such factors include, but are not limited to Nextera's dependence on key personnel, attracting and retaining qualified consultants, the need to obtain additional capital to extend employment and non-compete agreements, high levels of debt, potential inability to comply with loan covenants, possible Nasdaq Small Cap Market delisting, availability of credit and capital resources, new business solicitation efforts, intense competition and effects of economic uncertainty on client expenditures. Further information on these and other potential factors that could affect Nextera's financial and operating results are included in Nextera's 10-Q filed on May 12, 2003 with the Securities and Exchange Commission. # # # 3 NEXTERA ENTERPRISES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (amounts in thousands, except per share amounts)

Three Months Ended Six Months Ended ------------------ ---------------- June 30, 2003 June 30, 2002 June 30, 2003 June 30, 2002 (2) ------------- ------------- ------------- ----------------- (unaudited) (unaudited) Net revenues $ 16,816 $ 18,166 $ 35,573 $39,015 Cost of revenues 10,964 11,122 22,843 23,577 -------- -------- -------- ------- Gross profit 5,852 7,044 12,730 15,438 Selling, general and administrative expenses 4,117 3,820 8,145 8,997 Amortization expense 1,941 -- 3,882 -- Special Charges (1) -- (740) 1,921 (740) ------- -------- -------- ------- Income (loss) from operations (206) 3,964 (1,218) 7,181 Interest expense, net (2,064) (1,554) (4,075) (2,993) Other expense (48) -- (48) -- -------- -------- -------- ------- Income (loss) before provision for income taxes (2,318) 2,410 (5,341) 4,188 Provision for income taxes 21 50 61 100 -------- -------- -------- ------- Net income (loss) $ (2,339) $ 2,360 $ (5,402) $ 4,088 Preferred stock dividends (70) (407) (144) (802) -------- -------- -------- ------- Net income (loss) applicable to common stockholders $ (2,409) $ 1,953 $ (5,546) $ 3,286 ======== ======== ======== ======= Net income (loss) per common share, basic ($ 0.07) $ 0.05 ($ 0.16) $ 0.09 Net income (loss) per common share, diluted ($ 0.07) $ 0.04 ($ 0.16) $ 0.06 Weighted average common shares outstanding, basic 33,870 35,756 33,954 35,705 Weighted average common shares outstanding, diluted 33,870 64,777 33,954 64,486

- ------------- (1) Special charges in 2003 consist of $0.8 million of salary continuance costs and $1.1 million of a non-cash compensation charge due to the acceleration of stock options associated with the former Chief Executive Officer's employment agreement. Special charges in 2002 relate to the reversal of restructuring reserves due to the favorable settlement of real estate obligations. (2) The 2002 amounts include the operating results of the human capital consulting business which was exited in January 2002. Net revenues from the human capital business in January 2002 was $1.9 million and its operating loss was $0.4 million. Reconciliation of Non-GAAP Financial Measure(3)

Three Months Ended Six Months Ended June 30, 2003 June 30, 2003 ================== =============== EBITDA excluding special charges reconciliation: Reported income (loss) from operations (GAAP) $ (206) $ (1,218) Depreciation 323 609 Amortization 1,941 3,882 Special charges(1) - 1,921 -------- ----------- EBITDA excluding special charges reconciliation: $ 2,058 $ 5,194 ======== ===========

(3) EBITDA (earnings before interest, taxes, depreciation, and amortization) excluding special charges is a non-GAAP financial measure defined as income (loss) from operations before depreciation, amortization and special charges. The Company believes that the EBITDA excluding special charges non-GAAP measure is meaningful to investors in assessing the company's debt leverage and its ability to service such debt. This Non-GAAP measure should be considered in addition to, and not as a substitute for, other financial measures prepared in accordance with GAAP. 4 NEXTERA ENTERPRISES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Dollar amounts in thousands)

June 30, 2003 December 31, 2002 ------------- ----------------- (unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 1,428 $ 1,606 Restricted cash 569 2,650 Accounts receivable, net 21,745 20,344 Other current assets 979 1,076 ----------- ----------- Total current assets 24,721 25,676 Intangible assets, net 77,504 77,504 Other assets 4,038 4,038 ----------- ----------- Total assets $ 106,263 $ 107,218 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable and accrued expenses $ 13,154 $ 14,019 Accrued restructuring costs, current portion 982 1,037 Senior credit facility 4,735 4,735 Other current liabilities 461 689 ----------- ----------- Total current liabilities 19,332 20,480 Senior credit facility 25,645 22,465 Debentures due to affiliates 50,266 47,748 Accrued restructuring costs, net of current portion -- 427 Other long-term liabilities 3,957 4,191 Total stockholders' equity 7,063 11,907 ----------- ----------- Total liabilities and stockholders' equity $ 106,263 $ 107,218 =========== ===========

5 -----END PRIVACY-ENHANCED MESSAGE-----

EX-4.1

                                                                     EXHIBIT 4.1

                                                                  EXECUTION COPY

NEITHER THIS WARRANT NOR THE SHARES OF STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO SALE, TRANSFER
OR OTHER DISPOSITION OF THIS WARRANT OR SAID SHARES MAY BE EFFECTED WITHOUT (I)
AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, OR (II) AN OPINION OF
COUNSEL, REASONABLY SATISFACTORY TO COUNSEL TO THE COMPANY, THAT AN EXEMPTION
FROM REGISTRATION UNDER SAID ACT IS AVAILABLE.

July 17, 2003           SECOND AMENDED AND RESTATED STOCK         Warrant No.: 6
                                PURCHASE WARRANT

              To Subscribe for and Purchase Class A Common Stock of


                            NEXTERA ENTERPRISES, INC.

      THIS SECOND AMENDED AND RESTATED STOCK PURCHASE WARRANT ("Warrant")
certifies that, for value received, Fleet National Bank (together with any
subsequent transferees of all or any portion of this Warrant, the "Holder"), is
entitled, upon the terms and subject to the conditions hereinafter set forth, to
subscribe for and purchase from Nextera Enterprises, Inc., a Delaware
corporation (hereinafter called the "Company"), up to six hundred forty-four
thousand, seven hundred and four (644,704) fully paid and non-assessable shares
of the Company's Class A Common Stock, $0.001 par value per share (the
"Shares"), at the price equal to the Exercise Price (as defined in Section 1
hereof) (subject to adjustment as provided in Section 7 hereof). The number and
character of such Shares are subject to adjustment as provided herein.
Capitalized terms used herein and not defined herein shall have the meanings
given such terms in that certain Second Amended and Restated Credit Agreement
dated December 31, 2002, as amended by that certain First Amendment dated as of
July 8, 2003, and that certain Second Amendment dated the date hereof by and
among the Company, the Holder and the other lenders party thereto (the "Credit
Agreement"; and together with all related promissory notes, mortgages,
guaranties as the same may be further amended, restated, supplemented, or
otherwise modified from time to time, agreements, documents and instruments from
time to time entered into by Company and any other person or obligor pursuant
thereto, the "Credit Documents").

      This Warrant amends and restates in its entirety that certain Warrant for
up to six hundred forty-four thousand, seven hundred and four (644,704) fully
paid and non-assessable shares of the Company's Class A Common Stock, $0.001 par
value per share dated on December 31, 2002 (the "Prior Warrant") made by the
Company in favor of the Holder.

      1. Definitions. As used herein the following terms shall have the
following meanings:

      "Act" means the Securities Act of 1933 as amended, or a similar Federal
      statute and the rules and regulations of the Commission issued under that
      Act, as they each may, from time to time, be in effect.

      "Additional Shares of Common Stock" shall mean all shares of Common Stock
      issued (or, pursuant to Section 7(c), deemed to be issued) by the Company
      after the Original Issue Date, but shall not include:

      (A) shares of Common Stock issued or issuable upon conversion of shares of
      all of preferred stock of the Company outstanding as of the Original Issue
      Date;

      (B) shares of Common Stock issued or issuable upon exercise of this
      Warrant or any other warrant or option of the Company outstanding as of
      the Original Issue Date;

      (C) shares of Common Stock issued by way of dividend or other distribution
      on shares of Common Stock excluded from the definition of Additional
      Shares of Common Stock by the foregoing clause (A) or (B) or on Common
      Stock so excluded; or

      (D) shares issued under an employee stock purchase plan or pursuant to
      options exercisable for shares of Common Stock (such number subject to
      equitable adjustment in the event of any stock dividend, stock split,
      combination, reorganization, recapitalization, reclassification or other
      similar event), issued after the date of this Warrant to directors,
      officers, employees or consultants of the Company and any Subsidiary
      pursuant to any qualified or non-qualified stock option plan or other
      equity incentive plan approved by the Board of Directors of the Company,
      equal to the first 30% of the outstanding stock of the Company, calculated
      on a post-Original Issue Date, fully-diluted basis.

      "Common Stock" shall mean the Class A Common Stock of the Company, $0.001
      par value per share.

      "Convertible Securities" shall mean any evidences of indebtedness, shares
      or other securities directly or indirectly convertible into or
      exchangeable for Common Stock.

      "Exercise Price" shall mean $0.86 per share.

      "New Financing Source" shall mean a source other than the Company.

      "Option" shall mean rights, options or warrants to subscribe for, purchase
      or otherwise acquire Common Stock or Convertible Securities.

      "Original Issue Date" shall mean the date on which this Warrant is
      originally issued.


                                      -2-

      2. Purchase Rights. The purchase rights represented by this Warrant are
exercisable by the Holder in whole or in part (and not as to a fractional
share), at any time and from time to time commencing on the date hereof and
ending at 5:00 p.m. on the date (the "Expiration Date") eighteen (18) months
after the indefeasible payment in full in cash or cash equivalents of the Credit
Obligations.

      3. Exercise of Warrant; Net Issue Exercise.

      3.1 Exercise of Warrant. Subject to Section 2 above, the purchase rights
represented by this Warrant may be exercised, in whole or in part and from time
to time, by the surrender of this Warrant and the duly executed Notice of
Exercise (the form of which is attached as Exhibit A) at the principal office of
the Company and by the payment to the Company, by check, of an amount equal to
the then applicable Exercise Price per share multiplied by the number of Shares
then being purchased. Upon exercise, the Holder shall be entitled to receive,
within a reasonable time, a certificate or certificates, issued in the Holder's
name or in such name or names as the Holder may direct, for the number of Shares
so purchased. The Shares so purchased shall be deemed to be issued as of the
close of business on the date on which this Warrant shall have been exercised.

      3.2. Net Issue Exercise.

            (a) In lieu of exercising this Warrant as set forth in Section 3.1,
      the Holder may elect to receive Shares equal to the value of this Warrant
      (or the portion thereof being cancelled) by surrender of this Warrant at
      the principal office of the Company together with notice of such election
      in which event the Company shall issue to the Holder a number of Shares
      computed using the following formula:

                                X = Y (A - B)
                                    ---------
                                        A

Where X =   the number of Shares to be issued to the Holder;

      Y =   the number of Shares purchasable under this Warrant, or if only a
            portion of this Warrant is being cancelled, the gross number of
            Shares covered by the portion of this Warrant being cancelled;

      A =   the fair market value of one Share, as determined by the Board of
            Directors of the Company pursuant to paragraph (b) below, as at the
            time the net issue election is made pursuant to this Section (the
            "Determination Date"); and

      B =   the Exercise Price (as adjusted to the date of such calculations).

Such Shares shall be issued as soon as practicable after the Determination Date.

            (b) For purposes of this Section, fair market value of a Share shall
      be determined as follows:


                                      -3-

                        (A) If the Company's Common Stock is not publicly traded
                  at the Determination Date, the fair market value of a Share
                  shall be a value reasonably determined by the Company's Board
                  of Directors. In the event that the Holder disagrees with the
                  Board of Directors' determination of fair market value, then
                  the fair market value shall be determined by an appraiser
                  selected by the Holder (the "Holder's Appraiser") and whose
                  appraisal (the "Holder's Appraisal") shall be furnished to the
                  Company within 20 days after the Board of Directors'
                  determination of fair value, and if the Company does not
                  object to such determination within 15 days after receipt of
                  the Holder's appraisal, then the fair market value determined
                  by the Holder's Appraiser shall be the fair market value of a
                  Share. In the event that the Company objects to such
                  determination then the Company shall select an appraiser (the
                  "Company's Appraiser") who shall review the determination of
                  the Holder's Appraiser and issue a report thereon (the
                  "Company's Appraisal") within 30 days after the delivery of
                  the Holder's Appraisal to the Company and within 10 days after
                  the issuance of such report to the Holder's Appraiser, the
                  Holder's Appraiser and the Company's Appraiser shall meet to
                  negotiate in good faith to reach agreement on the fair market
                  value of a Share, and such agreed value shall be the fair
                  market value of a Share. In the event that the Company's
                  Appraiser and the Holder's Appraiser are unable to reach
                  agreement then such Appraisers shall select an appraiser (the
                  "Third Appraiser") within 5 days after the meeting between the
                  Holder's Appraiser and the Company's Appraiser, and the
                  average of two appraisals, consisting of the appraisal made by
                  the Third Appraiser and the appraisal of the Holder's
                  Appraiser and Company's Appraiser (whichever is closest to
                  that of the Third Appraiser), shall be conclusive and binding
                  on the Company and the Holder. The Company and the Holder
                  shall each pay one half (1/2) of the fees and expenses of each
                  of the Company's Appraiser, the Holder's Appraiser and the
                  Third Appraiser.

                        (B) if the Company's Common Stock is publicly traded on
                  the Determination Date, the fair market value of a Share shall
                  be equal to (1) the average of the closing prices quoted on
                  the Nasdaq Stock Exchange, Inc., if applicable, or the average
                  of the last bid and asked prices of the Common Stock quoted in
                  the Nasdaq OTC Bulletin Board or the over-the-counter-market,
                  or (2) if the Common Stock is then traded on a national
                  securities exchange, the average of the high and low closing
                  prices of the Common Stock listed on the principal national
                  securities exchange on which the Common Stock is so traded, in
                  each case for the twenty (20) trading days preceding the
                  Determination Date.

      4. Shares to be Issued; Reservation of Shares. The Company covenants that
the Shares that may be issued upon the exercise of the purchase rights
represented by this Warrant will, upon issuance, be fully paid and
non-assessable, and free from all liens and charges with


                                      -4-

respect to the issue thereof. During the period within which the purchase rights
represented by the Warrant may be exercised, the Company will at all times have
authorized and reserved, for the purpose of issuance upon exercise of the
purchase rights represented by this Warrant, a sufficient number of shares of
its Common Stock to provide for the exercise of the right represented by this
Warrant.

      5. No Fractional Shares. No fractional shares shall be issued upon the
exercise of this Warrant. In lieu thereof, a cash payment shall be made equal to
such fraction multiplied by the fair market value of such shares of Common
Stock, as determined pursuant to Section 3.2(b) above.

      6. Adjustment for Merger, Consolidation or Sale of Assets. In the event
that at any time or from time to time after the Original Issue Date, the Company
shall merge or consolidate with or into another entity or sell all or
substantially all of its assets, the Holder hereof shall thereafter have the
right to receive the kind and amount of shares of stock, other securities,
property or cash deliverable or payable to the holders of the Common Stock of
the Company that the Holder hereof upon exercise of this Warrant would have been
entitled to had the Holder hereof exercised the remaining portion of this
Warrant into shares of Common Stock immediately prior thereto.

      7. Adjustment of Exercise Price and Number of Shares.

            (a) Adjustment of Exercise Price and Number of Shares. The Exercise
      Price and number of shares of Common Stock issuable upon the exercise of
      the Warrant shall be adjusted as set forth in this Section 7 with the
      intent that the rights of the Holder to exercise shall not be impaired.

            (b) Adjustment for Combination, Consolidation, Stock Dividend or
      Subdivision of Common Stock. If the outstanding shares of Common Stock
      shall be subdivided into a greater number of shares or a dividend in
      Common Stock shall be paid in respect of Common Stock, the Exercise Price
      in effect immediately prior to such subdivision or at the record date of
      such dividend shall simultaneously with the effectiveness of such
      subdivision or immediately after the record date of such dividend be
      proportionately reduced. If outstanding shares of Common Stock shall be
      combined or consolidated into a smaller number of shares, the Exercise
      Price in effect immediately prior to such combination or consolidation
      shall, simultaneously with the effectiveness of such combination or
      consolidation, be proportionately increased. When any adjustment is
      required to be made in the Exercise Price, the number of shares of Common
      Stock purchasable upon the exercise of this Warrant shall be changed to
      the number determined by dividing (i) an amount equal to the number of
      shares issuable upon the exercise of this Warrant immediately prior to
      such adjustment, multiplied by the Exercise Price in effect immediately
      prior to such adjustment, by (ii) the Exercise Price in effect immediately
      after such adjustment.


                                      -5-

            (c) Issue of Options and Convertible Securities Deemed Issue of
      Additional Shares of Common Stock. If the Company at any time or from time
      to time after the Original Issue Date shall issue any Options or
      Convertible Securities or shall fix a record date for the determination of
      holders of any class of securities entitled to receive any such Options or
      Convertible Securities, then the maximum number of shares of Common Stock
      (as set forth in the instrument relating thereto, without regard to any
      provision contained therein for a subsequent adjustment of such number)
      issuable upon the exercise of such Options or, in the case of Convertible
      Securities or Options therefor, the conversion or exchange of such
      Convertible Securities, shall be deemed to be Additional Shares of Common
      Stock issued as of the time of such issue or, in case such a record date
      shall have been fixed, as of the close of business on such record date,
      provided that Additional Shares of Common Stock shall not be deemed to
      have been issued unless the consideration per share (determined pursuant
      to paragraph (e) below) of such Additional Shares of Common Stock would be
      less than the Exercise Price in effect on the date of and immediately
      prior to such issue, or such record date, as the case may be, and provided
      further in any such case in which Additional Shares of Common Stock are
      deemed to be issued:

                  (i) No further adjustment in the Exercise Price shall be made
            upon the subsequent issue of Convertible Securities or shares of
            Common Stock upon the exercise of such Options or conversion or
            exchange of such Convertible Securities;

                  (ii) If such Options or Convertible Securities by their terms
            provide, with the passage of time or otherwise, for any increase in
            the consideration payable to the Company, or decrease in the number
            of shares of Common Stock issuable, upon the exercise, conversion or
            exchange thereof, the Exercise Price computed upon the original
            issue thereof (or upon the occurrence of a record date with respect
            thereto), and any subsequent adjustments based thereon, shall, upon
            any such increase or decrease becoming effective, be recomputed to
            reflect such increase or decrease insofar as it affects such Options
            or the rights of conversion or exchange under such Convertible
            Securities;

                  (iii) No readjustment pursuant to clause (ii) above shall have
            the effect of increasing the Exercise Price to an amount which
            exceeds the lower of (A) the Exercise Price immediately prior to the
            adjustment affected upon the original issue of Options or
            Convertible Securities (or upon the occurrence of a record date with
            respect thereto) pursuant to the provisions hereof, or (B) the
            Exercise Price that would have resulted from any issuance of
            Additional Shares of Common Stock between the original adjustment
            date and such readjustment date;

                  (iv) Upon the expiration or termination of any unexercised
            Option, the Exercise Price shall be readjusted to the Exercise Price
            which would have been in effect at the time of such expiration or
            termination had such Option never been


                                      -6-

            issued (but including the recalculation of any intervening
            adjustments), and the Additional Shares of Common Stock deemed
            issued as the result of the original issue of such Option shall not
            be deemed issued for the purposes of any subsequent adjustment of
            the Exercise Price; and

                  (v) In the event of any change in the number of shares of
            Common Stock issuable upon the exercise, conversion or exchange of
            any Option or Convertible Security, including, but not limited to, a
            change resulting from the antidilution provisions thereof, the
            Exercise Price then in effect shall forthwith be readjusted to such
            Exercise Price as would have obtained had the adjustment which was
            made upon the issuance of such Option or Convertible Security (prior
            to such change) been made upon the basis of such change, but no
            further adjustment shall be made for the actual issuance of Common
            Stock upon the exercise or conversion of any such Option or
            Convertible Security.

            (d) Adjustment of Exercise Price Upon Issuance of Additional Shares
      of Common Stock. In the event the Company shall at any time after the
      Original Issue Date issue Additional Shares of Common Stock (including
      Additional Shares of Common Stock deemed to be issued pursuant to
      paragraph (c) above), without consideration or for a consideration per
      share less than the Exercise Price in effect on the date of and
      immediately prior to such issue, then and in such event, such Exercise
      Price shall be reduced, concurrently with such issue, to a price
      (calculated to the nearest cent) calculated as follows:

                  (i) The adjusted Exercise Price shall be equal to a fraction:
            (A) the numerator of which shall be the number of shares of Common
            Stock outstanding immediately prior to such issue (including shares
            described in clause (ii) below), plus the number of shares of Common
            Stock which the aggregate consideration received by the Company for
            the total number of Additional Shares of Common Stock so issued
            would purchase at such Exercise Price; and (B) the denominator of
            which shall be the number of shares of Common Stock outstanding
            immediately prior to such issue (including shares described in
            clause (ii) below) plus the number of such Additional Shares of
            Common Stock so issued.

                  (ii) For the purposes of clause (i), the number of shares of
            Common Stock outstanding immediately prior to such issue shall be
            calculated on a fully diluted basis, as if all Convertible
            Securities had been fully converted into shares of Common Stock
            immediately prior to such issuance and the Warrant and any other
            outstanding Options had been fully exercised immediately prior to
            such issuance (and any resulting Convertible Securities fully
            converted into Common Stock) as of such date.


                                      -7-

                  (iii) The applicable Exercise Price shall not be reduced at
            the time of any issuance of Additional Shares of Common Stock if the
            amount of such reduction would be an amount less than $0.01, but any
            such amount shall be carried forward and reduction with respect
            thereto shall be made at the time and together with any subsequent
            reduction which, together with such amount and any other amounts so
            carried forward, shall aggregate $0.01 or more.

            (e) Determination of Consideration. For purposes of paragraph (d),
      the consideration received by the Company for the issue of any Additional
      Shares of Common Stock shall be computed as follows:

                  (i)   Cash and Property:  Such consideration shall:

                        (A) insofar as it consists of cash, be computed at the
                  aggregate of cash received by the Company;

                        (B) insofar as it consists of property other than cash,
                  be computed at the fair market value thereof at the time of
                  such issue, as determined in good faith by the Board of
                  Directors; and

                        (C) in the event Additional Shares of Common Stock are
                  issued together with other shares or securities or other
                  assets of the Company for consideration which covers both, be
                  the proportion of such consideration so received, computed as
                  provided in clauses (A) and (B) above, as determined in good
                  faith by the Board of Directors.

                  (ii) Options and Convertible Securities. The consideration per
            share received by the Company for Additional Shares of Common Stock
            deemed to have been issued pursuant to paragraph (c), relating to
            Options and Convertible Securities, shall be determined by dividing:

                        (A) the total amount, if any, received or receivable by
                  the Company as consideration for the issue of such Options or
                  Convertible Securities, plus the minimum aggregate amount of
                  additional consideration (as set forth in the instruments
                  relating thereto, without regard to any provision contained
                  therein for a subsequent adjustment of such consideration)
                  payable to the Company upon the exercise of such Options or
                  the conversion or exchange of such Convertible Securities, or
                  in the case of Options for Convertible Securities, the
                  exercise of such Options for Convertible Securities and the
                  conversion or exchange of such Convertible Securities; by

                        (B) the maximum number of shares of Common Stock (as set
                  forth in the instrument relating thereto, without regard to
                  any provision


                                      -8-

                  contained therein for a subsequent adjustment of such number)
                  issuable upon the exercise of such Options or the conversion
                  or exchange of such Convertible Securities.

            (f) Certificate as to Adjustments. Upon the occurrence of each
      adjustment or readjustment of the Exercise Price pursuant to this Section
      7, the Company at its expense shall promptly compute such adjustment or
      readjustment in accordance with the terms hereof and furnish to the Holder
      a certificate setting forth such adjustment or readjustment and showing in
      detail the facts upon which such adjustment or readjustment is based. The
      Company shall, upon the written request at any time of the Holder, furnish
      or cause to be furnished to such holder a like certificate setting forth
      (i) such adjustments and readjustments, (ii) the Exercise Price at the
      time in effect, and (iii) the number of shares of Common Stock and the
      amount, if any, of other property which at the time would be received upon
      the exercise of the Warrant.

      8. No Rights as a Shareholder. This Warrant does not entitle the Holder to
any voting rights or other rights as a shareholder of the Company prior to
exercise of this Warrant and the payment for the Shares so purchased.
Notwithstanding the foregoing, the Company agrees to transmit to the Holder such
information, documents and reports as are generally distributed to holders of
the capital stock of the Company concurrently with the distribution thereof to
the shareholders. Upon valid exercise of this Warrant and payment for the Shares
so purchased in accordance with the terms of the Warrant, the Holder shall be
deemed a shareholder of the Company.

      9. Sale or Transfer of the Warrant; Legend. The Warrant and the Shares
shall not be sold or transferred unless either (i) they first shall have been
registered under the Act, or (ii) the Company first shall have been furnished
with an opinion of legal counsel reasonably satisfactory to the Company to the
effect that such sale or transfer is exempt from the registration requirements
of the Act. Each certificate representing any Warrant shall bear the legend set
out on page 1 hereof. Each certificate representing any Shares shall bear a
legend substantially in the following form, as appropriate:

            THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
            INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE
            OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED
            WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
            OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
            REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS
            AMENDED.

Such Warrant and Shares may be subject to additional restrictions on transfer
imposed under applicable state and federal securities law.


                                      -9-

      10. Put Right. Commencing on the earlier of (i) December 31, 2004 and (ii)
the date upon which the Loans (as defined in the Credit Agreement) owed to
Holder and the other lenders party to the Credit Agreement have been paid in
full in cash or Cash Equivalents and in each case (i) and (ii) prior to the
Expiration Date, the Holder shall have the right, exercised by the delivery of
written notice to the Company (a "Put Notice"), to require the Company to cancel
the unexercised portion of this Warrant, and all related rights in exchange for
a cash payment (the "Put Payment") equal to $0.23 per share payable to the
Holder within ten (10) days of receipt by the Company of the Put Notice and the
original Warrant for cancellation.

      11. Call Option. At any time during the one year period following the
indefeasible payment in full in cash or cash equivalents of the Credit
Obligations, and prior to June 30, 2004, the Company shall have the right
exercised by the delivery of written notice to the Holder (a "Call Notice") to
cancel this Warrant and the purchase rights hereunder in exchange for a cash
payment (the "Call Payment") equal to $0.5288 per share, payable to the Holder
within five (5) days after delivery by the Company of the Call Notice, provided
however, that any payment made pursuant to this Section 11 may only be made out
of a New Financing Source. Notwithstanding anything to the contrary contained
herein, the Holder shall be entitled to exercise this Warrant in whole or in
part at any time after the receipt of the Call Notice until the receipt by the
Holder of the Call Payment. In the event that the Holder chooses to exercise all
or a portion of the Warrant after receipt of the Call Notice, the Company shall
have the option to rescind such Call Notice or to exercise its call option with
respect to that portion of the Warrant which remains unexercised through the
delivery of a pro rata portion of the Call Payment. The Company shall have the
right to exercise the call option set forth herein one time only.

      12. Modifications and Waivers. This Warrant may not be changed, waived,
discharged or terminated except by an instrument in writing signed by the party
against which enforcement of the same is sought.

      13. Notices. Any notice, request or other document required or permitted
to be given or delivered to the Holder or the Company shall be sufficiently
given or made if sent by registered or certified mail, postage prepaid,
addressed to the parties as provided below:

            If to Holder:     Fleet National Bank
                              100 Federal Street, 6th Floor
                              MA DE 10006A
                              Boston, MA  02110
                              Attn: Fred P. Lucy
                              Vice President


                                      -10-

            with a copy to:

                              Brown Rudnick Berlack Israels, LLP
                              One Financial Center
                              Boston, MA  02111
                              Attn: William R. Baldiga, Esquire
                              Mary D. Bucci, Esquire

            If to Company:    Nextera Enterprises, Inc.
                              One Cambridge Center - 7th Floor
                              Cambridge, MA  02142
                              Attn: Michael P. Muldowney,
                              Chief Financial Officer

            with a copy to:   Maron & Sandler
                              1250 4th Street
                              Suite 550
                              Santa Monica, CA  90401
                              Attn: Stanley E. Maron, Esquire

      14. Loss, Theft, Destruction or Mutilation of Warrant. The Company
covenants with the Holder that upon its receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant or any stock certificate and, in the case of any such loss, theft
or destruction, of an indemnity or security reasonably satisfactory to it, and
upon reimbursement to the Company of all reasonable expenses incidental thereto,
and upon surrender and cancellation of this Warrant or stock certificate, if
mutilated, the Company will make and deliver a new Warrant or stock certificate,
of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or
stock certificate.

      15. Representations and Warranties of Holder. By accepting this Warrant,
the Holder represents and warrants that it is acquiring this Warrant and the
Shares for its own account, for investment and not with a view to, or for sale
in connection with, any distribution thereof or any part thereof. Holder
represents and warrants that it is (a) experienced in the evaluation of
businesses similar to the Company, (b) is able to fend for itself in the
transactions contemplated by this Warrant, (c) has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of an investment in the Company, (d) has the ability to bear the economic
risks of an investment in the Company, (e) has been furnished with or has had
access to such information as is specified in subparagraph (b)(2) of Rule 502
promulgated under the Act and (f) has been afforded the opportunity to ask
questions of and to receive answers from the Company and to obtain any
additional information necessary to make an informed investment decision with
respect to an investment in the Company. The Holder further represents that it
is an "accredited investor" as defined in Rule 501(a) of Regulation D under the
Act.


                                      -11-

      16. Representations and Warranties of Company. The Company represents
that:

                  (a) The execution and delivery of this Warrant has been duly
            authorized by the Company's Board of Directors and constitutes the
            legal, valid and binding obligation of the Company enforceable
            against the Company in accordance with its terms, except as
            enforcement thereof may be limited by bankruptcy, insolvency, or
            other laws affecting the enforcement of creditors' rights in general
            and except that the enforceability of the obligations hereunder is
            subject to general principals of equity (regardless of whether such
            enforceability is considered in a proceeding at equity or at law).
            Neither the execution nor the delivery of this Warrant, nor
            fulfillment of nor compliance with the terms and provisions of this
            Warrant, nor the issuance of Shares upon exercise of the Warrant,
            will violate the terms of the certificate of incorporation or
            by-laws of the Company or, to the best of the Company's knowledge,
            any agreement (including any agreement with stockholders),
            instrument, judgment, decree or statute to which the Company is
            subject.

                  (b) As of December 31, 2002, the authorized capital stock of
            the Company consisted of (i) 99,300,000 shares of Common Stock,
            $0.001 par value per share, 95,000,000 shares of which are
            designated as Class A Common Stock, of which 31,885,896 shares are
            issued and outstanding, and 4,300,000 shares of which are designated
            as Class B Common Stock, of which 3,869,570 shares are issued and
            outstanding, and (ii) 10,000,000 shares of Preferred Stock, $0.001
            par value per share 600,000 shares of which are designated as Series
            A Cumulative Convertible Preferred Stock, of which 39,544 shares are
            issued and outstanding.

                  (c) Except as set forth in subparagraph (b) above, and in
            registration statements filed by the Company under the Act or in any
            report filed by the Company under the Securities Exchange Act of
            1934, as amended, the Company has not authorized any rights (either
            preemptive or other) or options to subscribe for or purchase from
            the Company, or any warrants or other agreements providing for or
            requiring the issuance by the Company of, any capital stock or any
            securities convertible into or exchangeable for its capital stock.

                  (d) Sufficient shares of authorized but unissued shares of
            Common Stock of the Company have been reserved by appropriate
            corporate action with the prospective exercise of the Warrant, and,
            the issuance of either the Warrant or the shares of Common Stock
            upon exercise of the Warrant will not require any further corporate
            action by the stockholders or directors of the Company, will not be
            subject to preemptive rights (unless the exercise of the same has
            been irrevocably waived) in any present stockholders of the Company
            and will not conflict with any provision of any agreement to which
            the Company is a party or by which it is bound, and such Common
            Stock, when issued upon exercise of the


                                      -12-

            Warrant in accordance with its terms, will be duly authorized, fully
            paid and non-assessable.

      17. Registration Rights.

                  (a) Piggy Back Registration Rights. If (but without any
            obligation to do so) the Company shall determine to register (a
            "Company Registration") any of its securities for its own account or
            for any other person (other than a registration under the Act of
            shares issued in connection with any acquisition of any entity or
            business, shares issuable solely upon the exercise of stock options,
            or shares issuable solely pursuant to employee benefit plans or
            arrangements, including registration statements on Form S-4, S-8 or
            any successor form), the Company shall do the following:

                        (i) promptly give the Holder written notice thereof
                  (which shall include a list of the jurisdictions in which the
                  Company intends to attempt to register or qualify such
                  securities under the applicable blue sky or other state
                  securities laws); and

                        (ii) include among the securities which it then
                  registers or qualifies all Registrable Securities (as defined
                  below) specified in a written request or requests, made within
                  fifteen (15) days after receipt of the written notice from the
                  Company, by the Holder. The Holder shall have the right to
                  withdraw its request for inclusion of its Registrable
                  Securities in any registration statement by giving written
                  notice to the Company of its request to withdraw. The Company
                  may withdraw a Company Registration at any time prior to the
                  time it becomes effective whether or not the Holder has
                  elected to include Registrable Securities (as defined below)
                  in such registration. For purposes of this Warrant, the term
                  "Registrable Securities" shall mean all shares of Common Stock
                  issued and issuable upon exercise of the Warrant; provided
                  however, that shares of Common Stock which are "Registrable
                  Securities" shall cease to be Registrable Securities (a) upon
                  any sale pursuant to a registration statement under the Act,
                  Section 4(1) of the Act or Rule 144 promulgated under the Act
                  or (b) at such time as such shares of Common Stock are freely
                  saleable under Rule 144(k) promulgated under the Act (or a
                  successor provision).

                  (b) Limitations of Registration. If and to the extent that the
            Holder shall have, at the time of the delivery of the written
            request referred to in subparagraph (a) above, no present intention
            of selling or distribution, the Company shall be obligated to effect
            such registration, qualification or compliance with respect to the
            Holder's Registrable Securities only if and to the extent, in each
            case, that such registration, qualification and compliance are at
            the


                                      -13-

            time permitted by the applicable statutes or rules and regulations
            thereunder or the practices of the governmental authority concerned.

                  (c) Registration Procedures. In the case of each registration,
            qualification or compliance pursuant to this Section 17, the Company
            will keep the Holder advised in writing as to the initiation of
            proceedings for such registration, qualification and compliance and
            as to the completion thereof, and will advise the Holder, upon
            written request, of the progress of such proceedings. At the expense
            of the Company, the Company will (i) keep such registration,
            qualification and compliance current and effective for a period of
            the earlier of (A) 120 days, or (B) until the Holder has completed
            the distributions relating thereto, including, without limitation,
            the filing of post-effective amendments and supplements to any
            registration statement or prospectus, as necessary to permit the
            sale or distribution of Registrable Securities not theretofore sold
            or distributed, and (ii) take all necessary action under any
            applicable blue sky or other state securities laws to permit such
            exercise, sale or distribution, all as reasonably requested by such
            Holder; provided, however, that the Company shall not be required in
            connection therewith to qualify as a foreign corporation in any
            jurisdiction in which it is not now so qualified or to take any
            action that would subject it to general consent to service of
            process or taxation. The Company shall not be required to file,
            cause to become effective or maintain the effectiveness of any
            registration statement that contemplates a distribution of
            securities on a delayed or continuous basis pursuant to Rule 415
            under the Act.

                  (d) Registration Rights. Anything to the contrary in Section
            17 notwithstanding, in connection with any Company Registration, the
            Company shall not be required to include any of the Holder's
            Registrable Securities in such Company Registration unless the
            Holder accepts the terms of the underwriting as agreed upon between
            the Company and the underwriters selected by it (or by other persons
            entitled to select the underwriters), and then only in such quantity
            as the underwriters determine in their sole discretion will not
            jeopardize the success of the offering by the Company or will not
            adversely affect the aggregate proceeds to the Company from the
            offering. If the total amount of securities, including Registrable
            Securities and all other securities requested to be included in such
            offering by any stockholder of the Company, exceeds the amount of
            securities that the underwriters determine in their sole discretion
            is compatible with the success of the offering or the aggregate
            proceeds to the Company from the offering, then the number of Shares
            to be offered for the account of the Holder and all such other
            persons participating in such registration shall be reduced (to zero
            if necessary) or limited pro rata in proportion to the respective
            number of Shares requested to be registered by the Holder and each
            other person to reduce the total number of Shares requested to be
            included in such offering to the number of Shares, if any,
            recommended by such underwriters.


                                      -14-

                  (e) Indemnification. The Company will indemnify, defend and
            hold harmless the Holder to the fullest extent that such agreement
            is enforceable under applicable law against all claims, losses,
            damages and liabilities (or actions in respect thereof) arising out
            of or based on any untrue statement (or alleged untrue statement) of
            material fact contained therein (or in any related registration
            statement, notification or the like) or any omission (or alleged
            omission) to state therein a material fact required to be stated
            therein or necessary to make the statements therein not misleading,
            or any violation by the Company of any rule or regulation
            promulgated under the Act applicable to the Company and relating to
            action or inaction required of the Company in connection with any
            such registration, qualification or compliance, and will reimburse
            the Holder for any legal or any other expenses reasonably incurred
            in connection with investigating or defending any such claim, loss,
            damage, liability or action provided, however, that the Company will
            not be liable in any such case to the extent that any such claim,
            loss, damage or liability arises out of or is based on any untrue
            statement or omission based upon written information furnished to
            the Company by an instrument duly executed by the Holder and stated
            to be specifically for use therein.

                  (f) The Holder will indemnify, defend and hold harmless the
            Company to the fullest extent that such agreement is enforceable
            under applicable law against all claims, losses, damages and
            liabilities (or actions in respect thereof) arising out of or based
            on any untrue statement (or alleged untrue statement) of material
            fact contained therein (or in any related registration statement,
            notification or the like) or any omission (or alleged omission) to
            state therein a material fact required to be stated therein or
            necessary to make the statements therein not misleading, or any
            violation by the Holder of any rule or regulation promulgated under
            the Act applicable to the Holder and relating to action or inaction
            required of the Holder in connection with any such registration,
            qualification or compliance, and will reimburse the Company for any
            legal or any other expenses reasonably incurred in connection with
            investigating or defending any such claim, loss, damage, liability
            or action, in each case to the extent (and only to the extent) that
            such claims, losses, damages, liabilities and actions relate to
            reliance on any untrue statement or omission based upon written
            information furnished to the Company by an instrument duly executed
            by the Holder and stated to be specifically for use in the
            registration statement, provided, however, that such Holder's
            obligations hereunder shall be limited to an amount equal to the
            proceeds received by such Holder of the Registrable Securities sold
            in such registration.

                  (g) Notwithstanding the foregoing, to the extent that the
            provisions on indemnification contained in the underwriting
            agreement entered into in connection with a Company Registration are
            in conflict with the provisions of this Section 17, the provisions
            in the underwriting agreement shall control.


                                      -15-

      18. Binding Effect on Successors. This Warrant shall be binding upon any
corporation succeeding the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets, and all of the obligations of
the Company relating to the Shares issuable upon exercise of this Warrant shall
survive the exercise and termination of this Warrant and all of the covenants
and agreements of the Company shall inure to the benefit of the successors and
assigns of the Holder.

      19. Amendments. No approval, consent, amendment or waiver of this
Agreement shall be effective unless in writing and signed by the Company and
Holder.

      20. Counterparts. This Agreement may be executed in any number of
counterparts and each such counterpart shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute but one and the
same instrument.

      21. Governing Law. This Warrant shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the Commonwealth of Massachusetts.

      22. Entire Agreement. This Warrant constitutes the entire agreement among
the parties hereto pertaining to the subject matter hereof, and any and all
other written or oral agreements relating to the subject matter hereof existing
among any of the parties hereto are expressly cancelled, including, but not
limited to, the Prior Warrant.


                                      -16-

      IN WITNESS WHEREOF, the parties have caused this Warrant to be executed by
their duly authorized representatives as of the date first above written.

                                       
                                          NEXTERA ENTERPRISES, INC.,
                                          as Company

                                          By: /s/ Michael P. Muldowney
                                             ---------------------------
                                             Michael P. Muldowney
                                             Chief Financial Officer


                                          FLEET NATIONAL BANK,
                                          as Agent, Lender and Holder

                                          By: /s/ Fred P. Lucy
                                             ---------------------------
                                             Fred P. Lucy
                                             Vice President




                                      -17-

                                    EXHIBIT A

                               NOTICE OF EXERCISE

To:   NEXTERA ENTERPRISES, INC.

      1. The undersigned hereby elects to purchase _______ shares of Common
Stock of Nextera Enterprises, Inc. pursuant to the terms of the attached
Warrant, and tenders herewith payment of the purchase price of such shares in
full.

      2. Please issue a certificate or certificates representing said shares in
the name of the undersigned or in such other name or names as are specified
below.

      3. The undersigned represents that the aforesaid shares of Common Stock
are being acquired for the account of the undersigned for investment and not
with a view to, or for resale in connection with, the distribution thereof and
that the undersigned has no present intention of distributing or reselling such
shares. The undersigned further represents that such shares shall not be sold or
transferred unless either (1) they first shall have been registered under the
Securities Act of 1933, as amended, or (ii) the Company first shall have been
furnished with an opinion of legal counsel reasonably satisfactory to the
Company to the effect that such sale or transfer is exempt from the registration
requirement.

      4. In the event of partial exercise, please re-issue an appropriate
Warrant exercisable into the remaining shares.



                                 

                                    -------------------------------
                                    (Name)

                                    -------------------------------
                                    (Address)

                                    -------------------------------
                                    (Signature)

                                    -------------------------------
                                    (Date)




                                      -18-

EX-4.2

                                                                     EXHIBIT 4.2


                                                EXECUTION COPY

NEITHER THIS WARRANT NOR THE SHARES OF STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO SALE, TRANSFER
OR OTHER DISPOSITION OF THIS WARRANT OR SAID SHARES MAY BE EFFECTED WITHOUT (I)
AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, OR (II) AN OPINION OF
COUNSEL, REASONABLY SATISFACTORY TO COUNSEL TO THE COMPANY, THAT AN EXEMPTION
FROM REGISTRATION UNDER SAID ACT IS AVAILABLE.


July 17, 2003              SECOND AMENDED AND RESTATED           Warrant No.: 7
                             STOCK PURCHASE WARRANT
              To Subscribe for and Purchase Class A Common Stock of


                            NEXTERA ENTERPRISES, INC.

      THIS SECOND AMENDED AND RESTATED STOCK PURCHASE WARRANT ("Warrant")
certifies that, for value received, Banc of America Strategic Solutions, Inc.
(together with any subsequent transferees of all or any portion of this Warrant,
the "Holder"), is entitled, upon the terms and subject to the conditions
hereinafter set forth, to subscribe for and purchase from Nextera Enterprises,
Inc., a Delaware corporation (hereinafter called the "Company"), up to seven
hundred seventy-three thousand, six hundred and forty-six (773,646) fully paid
and non-assessable shares of the Company's Class A Common Stock, $0.001 par
value per share (the "Shares"), at the price equal to the Exercise Price (as
defined in Section 1 hereof) (subject to adjustment as provided in Section 7
hereof). The number and character of such Shares are subject to adjustment as
provided herein. Capitalized terms used herein and not defined herein shall have
the meanings given such terms in that certain Second Amended and Restated Credit
Agreement dated December 31, 2002, as amended by that certain First Amendment
dated as of July 8, 2003, and that certain Second Amendment dated the date
hereof by and among the Company, the Holder and the other lenders party thereto
(as the same may be further amended, restated, supplemented, or otherwise
modified from time to time, the "Credit Agreement"; and together with all
related promissory notes, mortgages, guaranties, agreements, documents and
instruments from time to time entered into by Company and any other person or
obligor pursuant thereto, the "Credit Documents").

      This Warrant amends and restates in its entirety that certain Warrant for
up to seven hundred seventy-three thousand, six hundred and forty-six (773,646)
fully paid and non-assessable shares of the Company's Class A Common Stock,
$0.001 par value per share issued on December 31, 2002 (the "Prior Warrant")
made by the Company in favor of the Holder.

      1. Definitions. As used herein the following terms shall have the
following meanings:

            "Act" means the Securities Act of 1933 as amended, or a similar
            Federal statute and the rules and regulations of the Commission
            issued under that Act, as they each may, from time to time, be in
            effect.

            "Additional Shares of Common Stock" shall mean all shares of Common
            Stock issued (or, pursuant to Section 7(c), deemed to be issued) by
            the Company after the Original Issue Date, but shall not include:

            (A) shares of Common Stock issued or issuable upon conversion of
            shares of all of preferred stock of the Company outstanding as of
            the Original Issue Date;

            (B) shares of Common Stock issued or issuable upon exercise of this
            Warrant or any other warrant or option of the Company outstanding as
            of the Original Issue Date;

            (C) shares of Common Stock issued by way of dividend or other
            distribution on shares of Common Stock excluded from the definition
            of Additional Shares of Common Stock by the foregoing clause (A) or
            (B) or on Common Stock so excluded; or

            (D) shares issued under an employee stock purchase plan or pursuant
            to options exercisable for shares of Common Stock (such number
            subject to equitable adjustment in the event of any stock dividend,
            stock split, combination, reorganization, recapitalization,
            reclassification or other similar event), issued after the date of
            this Warrant to directors, officers, employees or consultants of the
            Company and any Subsidiary pursuant to any qualified or
            non-qualified stock option plan or other equity incentive plan
            approved by the Board of Directors of the Company, equal to the
            first 30% of the outstanding stock of the Company, calculated on a
            post-Original Issue Date, fully-diluted basis.

            "Common Stock" shall mean the Class A Common Stock of the Company,
            $0.001 par value per share.

            "Convertible Securities" shall mean any evidences of indebtedness,
            shares or other securities directly or indirectly convertible into
            or exchangeable for Common Stock.

            "Exercise Price" shall mean $0.86 per share.

            "New Financing Source" shall mean a source other than the Company.

            "Option" shall mean rights, options or warrants to subscribe for,
            purchase or otherwise acquire Common Stock or Convertible
            Securities.

            "Original Issue Date" shall mean the date on which this Warrant is
            originally issued.


                                      -2-

      2. Purchase Rights. The purchase rights represented by this Warrant are
exercisable by the Holder in whole or in part (and not as to a fractional
share), at any time and from time to time commencing on the date hereof and
ending at 5:00 p.m. on the date (the "Expiration Date") eighteen (18) months
after the indefeasible payment in full in cash or cash equivalents of the Credit
Obligations.

      3. Exercise of Warrant; Net Issue Exercise.

      3.1 Exercise of Warrant. Subject to Section 2 above, the purchase rights
represented by this Warrant may be exercised, in whole or in part and from time
to time, by the surrender of this Warrant and the duly executed Notice of
Exercise (the form of which is attached as Exhibit A) at the principal office of
the Company and by the payment to the Company, by check, of an amount equal to
the then applicable Exercise Price per share multiplied by the number of Shares
then being purchased. Upon exercise, the Holder shall be entitled to receive,
within a reasonable time, a certificate or certificates, issued in the Holder's
name or in such name or names as the Holder may direct, for the number of Shares
so purchased. The Shares so purchased shall be deemed to be issued as of the
close of business on the date on which this Warrant shall have been exercised.

      3.2. Net Issue Exercise.

            (a) In lieu of exercising this Warrant as set forth in Section 3.1,
      the Holder may elect to receive Shares equal to the value of this Warrant
      (or the portion thereof being cancelled) by surrender of this Warrant at
      the principal office of the Company together with notice of such election
      in which event the Company shall issue to the Holder a number of Shares
      computed using the following formula:

                                X = Y (A - B)
                                    ---------
                                         A

Where X =   the number of Shares to be issued to the Holder;

      Y =   the number of Shares purchasable under this Warrant, or if only a
            portion of this Warrant is being cancelled, the gross number of
            Shares covered by the portion of this Warrant being cancelled;

      A =   the fair market value of one Share, as determined by the Board of
            Directors of the Company pursuant to paragraph (b) below, as at the
            time the net issue election is made pursuant to this Section (the
            "Determination Date"); and

      B =   the Exercise Price (as adjusted to the date of such calculations).

Such Shares shall be issued as soon as practicable after the Determination Date.

            (b) For purposes of this Section, fair market value of a Share shall
      be determined as follows:


                                      -3-

                        (A) If the Company's Common Stock is not publicly traded
                  at the Determination Date, the fair market value of a Share
                  shall be a value reasonably determined by the Company's Board
                  of Directors. In the event that the Holder disagrees with the
                  Board of Directors' determination of fair market value, then
                  the fair market value shall be determined by an appraiser
                  selected by the Holder (the "Holder's Appraiser") and whose
                  appraisal (the "Holder's Appraisal") shall be furnished to the
                  Company within 20 days after the Board of Directors'
                  determination of fair value, and if the Company does not
                  object to such determination within 15 days after receipt of
                  the Holder's appraisal, then the fair market value determined
                  by the Holder's Appraiser shall be the fair market value of a
                  Share. In the event that the Company objects to such
                  determination then the Company shall select an appraiser (the
                  "Company's Appraiser") who shall review the determination of
                  the Holder's Appraiser and issue a report thereon (the
                  "Company's Appraisal") within 30 days after the delivery of
                  the Holder's Appraisal to the Company and within 10 days after
                  the issuance of such report to the Holder's Appraiser, the
                  Holder's Appraiser and the Company's Appraiser shall meet to
                  negotiate in good faith to reach agreement on the fair market
                  value of a Share, and such agreed value shall be the fair
                  market value of a Share. In the event that the Company's
                  Appraiser and the Holder's Appraiser are unable to reach
                  agreement then such Appraisers shall select an appraiser (the
                  "Third Appraiser") within 5 days after the meeting between the
                  Holder's Appraiser and the Company's Appraiser, and the
                  average of two appraisals, consisting of the appraisal made by
                  the Third Appraiser and the appraisal of the Holder's
                  Appraiser and Company's Appraiser (whichever is closest to
                  that of the Third Appraiser), shall be conclusive and binding
                  on the Company and the Holder. The Company and the Holder
                  shall each pay one half (1/2) of the fees and expenses of each
                  of the Company's Appraiser, the Holder's Appraiser and the
                  Third Appraiser.

                        (B) if the Company's Common Stock is publicly traded on
                  the Determination Date, the fair market value of a Share shall
                  be equal to (1) the average of the closing prices quoted on
                  the Nasdaq Stock Exchange, Inc., if applicable, or the average
                  of the last bid and asked prices of the Common Stock quoted in
                  the Nasdaq OTC Bulletin Board or the over-the-counter-market,
                  or (2) if the Common Stock is then traded on a national
                  securities exchange, the average of the high and low closing
                  prices of the Common Stock listed on the principal national
                  securities exchange on which the Common Stock is so traded, in
                  each case for the twenty (20) trading days preceding the
                  Determination Date.

      4. Shares to be Issued; Reservation of Shares. The Company covenants that
the Shares that may be issued upon the exercise of the purchase rights
represented by this Warrant will, upon issuance, be fully paid and
non-assessable, and free from all liens and charges with


                                      -4-

respect to the issue thereof. During the period within which the purchase rights
represented by the Warrant may be exercised, the Company will at all times have
authorized and reserved, for the purpose of issuance upon exercise of the
purchase rights represented by this Warrant, a sufficient number of shares of
its Common Stock to provide for the exercise of the right represented by this
Warrant.

      5. No Fractional Shares. No fractional shares shall be issued upon the
exercise of this Warrant. In lieu thereof, a cash payment shall be made equal to
such fraction multiplied by the fair market value of such shares of Common
Stock, as determined pursuant to Section 3.2(b) above.

      6. Adjustment for Merger, Consolidation or Sale of Assets. In the event
that at any time or from time to time after the Original Issue Date, the Company
shall merge or consolidate with or into another entity or sell all or
substantially all of its assets, the Holder hereof shall thereafter have the
right to receive the kind and amount of shares of stock, other securities,
property or cash deliverable or payable to the holders of the Common Stock of
the Company that the Holder hereof upon exercise of this Warrant would have been
entitled to had the Holder hereof exercised the remaining portion of this
Warrant into shares of Common Stock immediately prior thereto.

      7. Adjustment of Exercise Price and Number of Shares.

            (a) Adjustment of Exercise Price and Number of Shares. The Exercise
      Price and number of shares of Common Stock issuable upon the exercise of
      the Warrant shall be adjusted as set forth in this Section 7 with the
      intent that the rights of the Holder to exercise shall not be impaired.

            (b) Adjustment for Combination, Consolidation, Stock Dividend or
      Subdivision of Common Stock. If the outstanding shares of Common Stock
      shall be subdivided into a greater number of shares or a dividend in
      Common Stock shall be paid in respect of Common Stock, the Exercise Price
      in effect immediately prior to such subdivision or at the record date of
      such dividend shall simultaneously with the effectiveness of such
      subdivision or immediately after the record date of such dividend be
      proportionately reduced. If outstanding shares of Common Stock shall be
      combined or consolidated into a smaller number of shares, the Exercise
      Price in effect immediately prior to such combination or consolidation
      shall, simultaneously with the effectiveness of such combination or
      consolidation, be proportionately increased. When any adjustment is
      required to be made in the Exercise Price, the number of shares of Common
      Stock purchasable upon the exercise of this Warrant shall be changed to
      the number determined by dividing (i) an amount equal to the number of
      shares issuable upon the exercise of this Warrant immediately prior to
      such adjustment, multiplied by the Exercise Price in effect immediately
      prior to such adjustment, by (ii) the Exercise Price in effect immediately
      after such adjustment.


                                      -5-

            (c) Issue of Options and Convertible Securities Deemed Issue of
      Additional Shares of Common Stock. If the Company at any time or from time
      to time after the Original Issue Date shall issue any Options or
      Convertible Securities or shall fix a record date for the determination of
      holders of any class of securities entitled to receive any such Options or
      Convertible Securities, then the maximum number of shares of Common Stock
      (as set forth in the instrument relating thereto, without regard to any
      provision contained therein for a subsequent adjustment of such number)
      issuable upon the exercise of such Options or, in the case of Convertible
      Securities or Options therefor, the conversion or exchange of such
      Convertible Securities, shall be deemed to be Additional Shares of Common
      Stock issued as of the time of such issue or, in case such a record date
      shall have been fixed, as of the close of business on such record date,
      provided that Additional Shares of Common Stock shall not be deemed to
      have been issued unless the consideration per share (determined pursuant
      to paragraph (e) below) of such Additional Shares of Common Stock would be
      less than the Exercise Price in effect on the date of and immediately
      prior to such issue, or such record date, as the case may be, and provided
      further in any such case in which Additional Shares of Common Stock are
      deemed to be issued:

                  (i) No further adjustment in the Exercise Price shall be made
            upon the subsequent issue of Convertible Securities or shares of
            Common Stock upon the exercise of such Options or conversion or
            exchange of such Convertible Securities;

                  (ii) If such Options or Convertible Securities by their terms
            provide, with the passage of time or otherwise, for any increase in
            the consideration payable to the Company, or decrease in the number
            of shares of Common Stock issuable, upon the exercise, conversion or
            exchange thereof, the Exercise Price computed upon the original
            issue thereof (or upon the occurrence of a record date with respect
            thereto), and any subsequent adjustments based thereon, shall, upon
            any such increase or decrease becoming effective, be recomputed to
            reflect such increase or decrease insofar as it affects such Options
            or the rights of conversion or exchange under such Convertible
            Securities;

                  (iii) No readjustment pursuant to clause (ii) above shall have
            the effect of increasing the Exercise Price to an amount which
            exceeds the lower of (A) the Exercise Price immediately prior to the
            adjustment affected upon the original issue of Options or
            Convertible Securities (or upon the occurrence of a record date with
            respect thereto) pursuant to the provisions hereof, or (B) the
            Exercise Price that would have resulted from any issuance of
            Additional Shares of Common Stock between the original adjustment
            date and such readjustment date;

                  (iv) Upon the expiration or termination of any unexercised
            Option, the Exercise Price shall be readjusted to the Exercise Price
            which would have been in effect at the time of such expiration or
            termination had such Option never been


                                      -6-

            issued (but including the recalculation of any intervening
            adjustments), and the Additional Shares of Common Stock deemed
            issued as the result of the original issue of such Option shall not
            be deemed issued for the purposes of any subsequent adjustment of
            the Exercise Price; and

                  (v) In the event of any change in the number of shares of
            Common Stock issuable upon the exercise, conversion or exchange of
            any Option or Convertible Security, including, but not limited to, a
            change resulting from the antidilution provisions thereof, the
            Exercise Price then in effect shall forthwith be readjusted to such
            Exercise Price as would have obtained had the adjustment which was
            made upon the issuance of such Option or Convertible Security (prior
            to such change) been made upon the basis of such change, but no
            further adjustment shall be made for the actual issuance of Common
            Stock upon the exercise or conversion of any such Option or
            Convertible Security.

            (d) Adjustment of Exercise Price Upon Issuance of Additional Shares
      of Common Stock. In the event the Company shall at any time after the
      Original Issue Date issue Additional Shares of Common Stock (including
      Additional Shares of Common Stock deemed to be issued pursuant to
      paragraph (c) above), without consideration or for a consideration per
      share less than the Exercise Price in effect on the date of and
      immediately prior to such issue, then and in such event, such Exercise
      Price shall be reduced, concurrently with such issue, to a price
      (calculated to the nearest cent) calculated as follows:

                  (i) The adjusted Exercise Price shall be equal to a fraction:
            (A) the numerator of which shall be the number of shares of Common
            Stock outstanding immediately prior to such issue (including shares
            described in clause (ii) below), plus the number of shares of Common
            Stock which the aggregate consideration received by the Company for
            the total number of Additional Shares of Common Stock so issued
            would purchase at such Exercise Price; and (B) the denominator of
            which shall be the number of shares of Common Stock outstanding
            immediately prior to such issue (including shares described in
            clause (ii) below) plus the number of such Additional Shares of
            Common Stock so issued.

                  (ii) For the purposes of clause (i), the number of shares of
            Common Stock outstanding immediately prior to such issue shall be
            calculated on a fully diluted basis, as if all Convertible
            Securities had been fully converted into shares of Common Stock
            immediately prior to such issuance and the Warrant and any other
            outstanding Options had been fully exercised immediately prior to
            such issuance (and any resulting Convertible Securities fully
            converted into Common Stock) as of such date.

                  (iii) The applicable Exercise Price shall not be reduced at
            the time of any issuance of Additional Shares of Common Stock if the
            amount of such


                                      -7-

            reduction would be an amount less than $0.01, but any such amount
            shall be carried forward and reduction with respect thereto shall be
            made at the time and together with any subsequent reduction which,
            together with such amount and any other amounts so carried forward,
            shall aggregate $0.01 or more.

            (e) Determination of Consideration. For purposes of paragraph (d),
      the consideration received by the Company for the issue of any Additional
      Shares of Common Stock shall be computed as follows:

                  (i) Cash and Property: Such consideration shall:

                        (A) insofar as it consists of cash, be computed at the
                  aggregate of cash received by the Company;

                        (B) insofar as it consists of property other than cash,
                  be computed at the fair market value thereof at the time of
                  such issue, as determined in good faith by the Board of
                  Directors; and

                        (C) in the event Additional Shares of Common Stock are
                  issued together with other shares or securities or other
                  assets of the Company for consideration which covers both, be
                  the proportion of such consideration so received, computed as
                  provided in clauses (A) and (B) above, as determined in good
                  faith by the Board of Directors.

                  (ii) Options and Convertible Securities. The consideration per
            share received by the Company for Additional Shares of Common Stock
            deemed to have been issued pursuant to paragraph (c), relating to
            Options and Convertible Securities, shall be determined by dividing:

                        (A) the total amount, if any, received or receivable by
                  the Company as consideration for the issue of such Options or
                  Convertible Securities, plus the minimum aggregate amount of
                  additional consideration (as set forth in the instruments
                  relating thereto, without regard to any provision contained
                  therein for a subsequent adjustment of such consideration)
                  payable to the Company upon the exercise of such Options or
                  the conversion or exchange of such Convertible Securities, or
                  in the case of Options for Convertible Securities, the
                  exercise of such Options for Convertible Securities and the
                  conversion or exchange of such Convertible Securities; by

                        (B) the maximum number of shares of Common Stock (as set
                  forth in the instrument relating thereto, without regard to
                  any provision contained therein for a subsequent adjustment of
                  such number) issuable


                                      -8-

                  upon the exercise of such Options or the conversion or
                  exchange of such Convertible Securities.

            (f) Certificate as to Adjustments. Upon the occurrence of each
      adjustment or readjustment of the Exercise Price pursuant to this Section
      7, the Company at its expense shall promptly compute such adjustment or
      readjustment in accordance with the terms hereof and furnish to the Holder
      a certificate setting forth such adjustment or readjustment and showing in
      detail the facts upon which such adjustment or readjustment is based. The
      Company shall, upon the written request at any time of the Holder, furnish
      or cause to be furnished to such holder a like certificate setting forth
      (i) such adjustments and readjustments, (ii) the Exercise Price at the
      time in effect, and (iii) the number of shares of Common Stock and the
      amount, if any, of other property which at the time would be received upon
      the exercise of the Warrant.

      8. No Rights as a Shareholder. This Warrant does not entitle the Holder to
any voting rights or other rights as a shareholder of the Company prior to
exercise of this Warrant and the payment for the Shares so purchased.
Notwithstanding the foregoing, the Company agrees to transmit to the Holder such
information, documents and reports as are generally distributed to holders of
the capital stock of the Company concurrently with the distribution thereof to
the shareholders. Upon valid exercise of this Warrant and payment for the Shares
so purchased in accordance with the terms of the Warrant, the Holder shall be
deemed a shareholder of the Company.

      9. Sale or Transfer of the Warrant; Legend. The Warrant and the Shares
shall not be sold or transferred unless either (i) they first shall have been
registered under the Act, or (ii) the Company first shall have been furnished
with an opinion of legal counsel reasonably satisfactory to the Company to the
effect that such sale or transfer is exempt from the registration requirements
of the Act. Each certificate representing any Warrant shall bear the legend set
out on page 1 hereof. Each certificate representing any Shares shall bear a
legend substantially in the following form, as appropriate:

            THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
            INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE
            OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED
            WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
            OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
            REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS
            AMENDED.

Such Warrant and Shares may be subject to additional restrictions on transfer
imposed under applicable state and federal securities law.


                                      -9-

      10. Put Right. Commencing on the earlier of (i) December 31, 2004 and (ii)
the date upon which the Loans (as defined in the Credit Agreement) owed to
Holder and the other lenders party to the Credit Agreement have been paid in
full in cash or Cash Equivalents and in each case (i) and (ii) prior to the
Expiration Date, the Holder shall have the right, exercised by the delivery of
written notice to the Company (a "Put Notice"), to require the Company to cancel
the unexercised portion of this Warrant, and all related rights in exchange for
a cash payment (the "Put Payment") equal to $0.23 per share payable to the
Holder within ten (10) days of receipt by the Company of the Put Notice and the
original Warrant for cancellation.

      11. Call Option. At any time during the one year period following the
indefeasible payment in full in cash or cash equivalents of the Credit
Obligations, and prior to June 30, 2004, the Company shall have the right
exercised by the delivery of written notice to the Holder (a "Call Notice") to
cancel this Warrant and the purchase rights hereunder in exchange for a cash
payment (the "Call Payment") equal to $0.5288 per share, payable to the Holder
within five (5) days after delivery by the Company of the Call Notice, provided
however, that any payment made pursuant to this Section 11 may only be made out
of a New Financing Source. Notwithstanding anything to the contrary contained
herein, the Holder shall be entitled to exercise this Warrant in whole or in
part at any time after the receipt of the Call Notice until the receipt by the
Holder of the Call Payment. In the event that the Holder chooses to exercise all
or a portion of the Warrant after receipt of the Call Notice, the Company shall
have the option to rescind such Call Notice or to exercise its call option with
respect to that portion of the Warrant which remains unexercised through the
delivery of a pro rata portion of the Call Payment. The Company shall have the
right to exercise the call option set forth herein one time only.

      12. Modifications and Waivers. This Warrant may not be changed, waived,
discharged or terminated except by an instrument in writing signed by the party
against which enforcement of the same is sought.

      13. Notices. Any notice, request or other document required or permitted
to be given or delivered to the Holder or the Company shall be sufficiently
given or made if sent by registered or certified mail, postage prepaid,
addressed to the parties as provided below:

            If to Holder:     Banc of America Strategic Solutions, Inc.
                              335 Madison Avenue
                              NY1-503-05-06
                              Attn:  Bill Crawford, Managing Director


                                      -10-

            with a copy to:


                        Brown Rudnick Berlack Israels LLP
                        One Financial Center
                        Boston, MA  02111
                        Attn:  William R. Baldiga, Esquire
                               Mary D. Bucci, Esquire

            If to Company: Nextera Enterprises, Inc.

                        One Cambridge Center - 7th Floor
                        Cambridge, MA  02142
                        Attn:  Michael P. Muldowney,
                               Chief Financial Officer

            with a copy to: Maron & Sandler
                        1250 4th Street
                        Suite 550
                        Santa Monica, CA 90401
                        Attn:  Stanley E. Maron, Esquire

      14. Loss, Theft, Destruction or Mutilation of Warrant. The Company
covenants with the Holder that upon its receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant or any stock certificate and, in the case of any such loss, theft
or destruction, of an indemnity or security reasonably satisfactory to it, and
upon reimbursement to the Company of all reasonable expenses incidental thereto,
and upon surrender and cancellation of this Warrant or stock certificate, if
mutilated, the Company will make and deliver a new Warrant or stock certificate,
of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or
stock certificate.

      15. Representations and Warranties of Holder. By accepting this Warrant,
the Holder represents and warrants that it is acquiring this Warrant and the
Shares for its own account, for investment and not with a view to, or for sale
in connection with, any distribution thereof or any part thereof. Holder
represents and warrants that it is (a) experienced in the evaluation of
businesses similar to the Company, (b) is able to fend for itself in the
transactions contemplated by this Warrant, (c) has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of an investment in the Company, (d) has the ability to bear the economic
risks of an investment in the Company, (e) has been furnished with or has had
access to such information as is specified in subparagraph (b)(2) of Rule 502
promulgated under the Act and (f) has been afforded the opportunity to ask
questions of and to receive answers from the Company and to obtain any
additional information


                                      -11-

necessary to make an informed investment decision with respect to an investment
in the Company. The Holder further represents that it is an "accredited
investor" as defined in Rule 501(a) of Regulation D under the Act.

      16. Representations and Warranties of Company. The Company represents
that:

                  (a) The execution and delivery of this Warrant has been duly
            authorized by the Company's Board of Directors and constitutes the
            legal, valid and binding obligation of the Company enforceable
            against the Company in accordance with its terms, except as
            enforcement thereof may be limited by bankruptcy, insolvency, or
            other laws affecting the enforcement of creditors' rights in general
            and except that the enforceability of the obligations hereunder is
            subject to general principals of equity (regardless of whether such
            enforceability is considered in a proceeding at equity or at law).
            Neither the execution nor the delivery of this Warrant, nor
            fulfillment of nor compliance with the terms and provisions of this
            Warrant, nor the issuance of Shares upon exercise of the Warrant,
            will violate the terms of the certificate of incorporation or
            by-laws of the Company or, to the best of the Company's knowledge,
            any agreement (including any agreement with stockholders),
            instrument, judgment, decree or statute to which the Company is
            subject.

                  (b) As of December 31, 2002, the authorized capital stock of
            the Company consisted of (i) 99,300,000 shares of Common Stock,
            $0.001 par value per share, 95,000,000 shares of which are
            designated as Class A Common Stock, of which 31,885,896 shares are
            issued and outstanding, and 4,300,000 shares of which are designated
            as Class B Common Stock, of which 3,869,570 shares are issued and
            outstanding, and (ii) 10,000,000 shares of Preferred Stock, $0.001
            par value per share 600,000 shares of which are designated as Series
            A Cumulative Convertible Preferred Stock, of which 39,544 shares are
            issued and outstanding.

                  (c) Except as set forth in subparagraph (b) above, and in
            registration statements filed by the Company under the Act or in any
            report filed by the Company under the Securities Exchange Act of
            1934, as amended, the Company has not authorized any rights (either
            preemptive or other) or options to subscribe for or purchase from
            the Company, or any warrants or other agreements providing for or
            requiring the issuance by the Company of, any capital stock or any
            securities convertible into or exchangeable for its capital stock.

                  (d) Sufficient shares of authorized but unissued shares of
            Common Stock of the Company have been reserved by appropriate
            corporate action with the prospective exercise of the Warrant, and,
            the issuance of either the Warrant or the shares of Common Stock
            upon exercise of the Warrant will not require any further corporate
            action by the stockholders or directors of the Company, will not be
            subject to preemptive rights (unless the exercise of the same has
            been irrevocably waived) in any present stockholders of the Company
            and will not


                                      -12-

            conflict with any provision of any agreement to which the Company is
            a party or by which it is bound, and such Common Stock, when issued
            upon exercise of the Warrant in accordance with its terms, will be
            duly authorized, fully paid and non-assessable.

      17.   Registration Rights.

                  (a) Piggy Back Registration Rights. If (but without any
            obligation to do so) the Company shall determine to register (a
            "Company Registration") any of its securities for its own account or
            for any other person (other than a registration under the Act of
            shares issued in connection with any acquisition of any entity or
            business, shares issuable solely upon the exercise of stock options,
            or shares issuable solely pursuant to employee benefit plans or
            arrangements, including registration statements on Form S-4, S-8 or
            any successor form), the Company shall do the following:

                        (i) promptly give the Holder written notice thereof
                  (which shall include a list of the jurisdictions in which the
                  Company intends to attempt to register or qualify such
                  securities under the applicable blue sky or other state
                  securities laws); and

                        (ii) include among the securities which it then
                  registers or qualifies all Registrable Securities (as defined
                  below) specified in a written request or requests, made within
                  fifteen (15) days after receipt of the written notice from the
                  Company, by the Holder. The Holder shall have the right to
                  withdraw its request for inclusion of its Registrable
                  Securities in any registration statement by giving written
                  notice to the Company of its request to withdraw. The Company
                  may withdraw a Company Registration at any time prior to the
                  time it becomes effective whether or not the Holder has
                  elected to include Registrable Securities (as defined below)
                  in such registration. For purposes of this Warrant, the term
                  "Registrable Securities" shall mean all shares of Common Stock
                  issued and issuable upon exercise of the Warrant; provided
                  however, that shares of Common Stock which are "Registrable
                  Securities" shall cease to be Registrable Securities (a) upon
                  any sale pursuant to a registration statement under the Act,
                  Section 4(1) of the Act or Rule 144 promulgated under the Act
                  or (b) at such time as such shares of Common Stock are freely
                  saleable under Rule 144(k) promulgated under the Act (or a
                  successor provision).

                  (b) Limitations of Registration. If and to the extent that the
            Holder shall have, at the time of the delivery of the written
            request referred to in subparagraph (a) above, no present intention
            of selling or distribution, the Company shall be obligated to effect
            such registration, qualification or compliance with respect to the
            Holder's Registrable Securities only if and to the


                                      -13-

            extent, in each case, that such registration, qualification and
            compliance are at the time permitted by the applicable statutes or
            rules and regulations thereunder or the practices of the
            governmental authority concerned.

                  (c) Registration Procedures. In the case of each registration,
            qualification or compliance pursuant to this Section 17, the Company
            will keep the Holder advised in writing as to the initiation of
            proceedings for such registration, qualification and compliance and
            as to the completion thereof, and will advise the Holder, upon
            written request, of the progress of such proceedings. At the expense
            of the Company, the Company will (i) keep such registration,
            qualification and compliance current and effective for a period of
            the earlier of (A) 120 days, or (B) until the Holder has completed
            the distributions relating thereto, including, without limitation,
            the filing of post-effective amendments and supplements to any
            registration statement or prospectus, as necessary to permit the
            sale or distribution of Registrable Securities not theretofore sold
            or distributed, and (ii) take all necessary action under any
            applicable blue sky or other state securities laws to permit such
            exercise, sale or distribution, all as reasonably requested by such
            Holder; provided, however, that the Company shall not be required in
            connection therewith to qualify as a foreign corporation in any
            jurisdiction in which it is not now so qualified or to take any
            action that would subject it to general consent to service of
            process or taxation. The Company shall not be required to file,
            cause to become effective or maintain the effectiveness of any
            registration statement that contemplates a distribution of
            securities on a delayed or continuous basis pursuant to Rule 415
            under the Act.

                  (d) Registration Rights. Anything to the contrary in Section
            17 notwithstanding, in connection with any Company Registration, the
            Company shall not be required to include any of the Holder's
            Registrable Securities in such Company Registration unless the
            Holder accepts the terms of the underwriting as agreed upon between
            the Company and the underwriters selected by it (or by other persons
            entitled to select the underwriters), and then only in such quantity
            as the underwriters determine in their sole discretion will not
            jeopardize the success of the offering by the Company or will not
            adversely affect the aggregate proceeds to the Company from the
            offering. If the total amount of securities, including Registrable
            Securities and all other securities requested to be included in such
            offering by any stockholder of the Company, exceeds the amount of
            securities that the underwriters determine in their sole discretion
            is compatible with the success of the offering or the aggregate
            proceeds to the Company from the offering, then the number of Shares
            to be offered for the account of the Holder and all such other
            persons participating in such registration shall be reduced (to zero
            if necessary) or limited pro rata in proportion to the respective
            number of Shares requested to be registered by the Holder and each
            other person to reduce the total number of Shares requested to be
            included in such offering to the number of Shares, if any,
            recommended by such underwriters.


                                      -14-

                  (e) Indemnification. The Company will indemnify, defend and
            hold harmless the Holder to the fullest extent that such agreement
            is enforceable under applicable law against all claims, losses,
            damages and liabilities (or actions in respect thereof) arising out
            of or based on any untrue statement (or alleged untrue statement) of
            material fact contained therein (or in any related registration
            statement, notification or the like) or any omission (or alleged
            omission) to state therein a material fact required to be stated
            therein or necessary to make the statements therein not misleading,
            or any violation by the Company of any rule or regulation
            promulgated under the Act applicable to the Company and relating to
            action or inaction required of the Company in connection with any
            such registration, qualification or compliance, and will reimburse
            the Holder for any legal or any other expenses reasonably incurred
            in connection with investigating or defending any such claim, loss,
            damage, liability or action provided, however, that the Company will
            not be liable in any such case to the extent that any such claim,
            loss, damage or liability arises out of or is based on any untrue
            statement or omission based upon written information furnished to
            the Company by an instrument duly executed by the Holder and stated
            to be specifically for use therein.

                  (f) The Holder will indemnify, defend and hold harmless the
            Company to the fullest extent that such agreement is enforceable
            under applicable law against all claims, losses, damages and
            liabilities (or actions in respect thereof) arising out of or based
            on any untrue statement (or alleged untrue statement) of material
            fact contained therein (or in any related registration statement,
            notification or the like) or any omission (or alleged omission) to
            state therein a material fact required to be stated therein or
            necessary to make the statements therein not misleading, or any
            violation by the Holder of any rule or regulation promulgated under
            the Act applicable to the Holder and relating to action or inaction
            required of the Holder in connection with any such registration,
            qualification or compliance, and will reimburse the Company for any
            legal or any other expenses reasonably incurred in connection with
            investigating or defending any such claim, loss, damage, liability
            or action, in each case to the extent (and only to the extent) that
            such claims, losses, damages, liabilities and actions relate to
            reliance on any untrue statement or omission based upon written
            information furnished to the Company by an instrument duly executed
            by the Holder and stated to be specifically for use in the
            registration statement, provided, however, that such Holder's
            obligations hereunder shall be limited to an amount equal to the
            proceeds received by such Holder of the Registrable Securities sold
            in such registration.


                                      -15-

                  (g) Notwithstanding the foregoing, to the extent that the
            provisions on indemnification contained in the underwriting
            agreement entered into in connection with a Company Registration are
            in conflict with the provisions of this Section 17, the provisions
            in the underwriting agreement shall control.

      18. Binding Effect on Successors. This Warrant shall be binding upon any
corporation succeeding the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets, and all of the obligations of
the Company relating to the Shares issuable upon exercise of this Warrant shall
survive the exercise and termination of this Warrant and all of the covenants
and agreements of the Company shall inure to the benefit of the successors and
assigns of the Holder.

      19. Amendments. No approval, consent, amendment or waiver of this
Agreement shall be effective unless in writing and signed by the Company and
Holder.

      20. Counterparts. This Agreement may be executed in any number of
counterparts and each such counterpart shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute but one and the
same instrument.

      21. Governing Law. This Warrant shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the Commonwealth of Massachusetts.

      22. Entire Agreement. This Warrant constitutes the entire agreement among
the parties hereto pertaining to the subject matter hereof, and any and all
other written or oral agreements relating to the subject matter hereof existing
among any of the parties hereto are expressly cancelled, including, but not
limited to, the Prior Warrant.


                                      -16-

      IN WITNESS WHEREOF, the parties have caused this Warrant to be executed by
their duly authorized representatives as of the date first above written.

                                          NEXTERA ENTERPRISES, INC.,
                                          as Company

                                              /s/ Michael P. Muldowney
                                          By: ____________________________
                                              Michael P. Muldowney
                                              Chief Financial Officer


                                          BANC OF AMERICA STRATEGIC
                                          SOLUTIONS, INC.
                                          as Lender and Holder

                                              /s/ Bill Crawford
                                          By: ____________________________
                                              Bill Crawford
                                              Managing Director



                                      -17-

                                    EXHIBIT A

                               NOTICE OF EXERCISE

To:   NEXTERA ENTERPRISES, INC.

      1. The undersigned hereby elects to purchase _______ shares of Common
Stock of Nextera Enterprises, Inc. pursuant to the terms of the attached
Warrant, and tenders herewith payment of the purchase price of such shares in
full.

      2. Please issue a certificate or certificates representing said shares in
the name of the undersigned or in such other name or names as are specified
below.

      3. The undersigned represents that the aforesaid shares of Common Stock
are being acquired for the account of the undersigned for investment and not
with a view to, or for resale in connection with, the distribution thereof and
that the undersigned has no present intention of distributing or reselling such
shares. The undersigned further represents that such shares shall not be sold or
transferred unless either (1) they first shall have been registered under the
Securities Act of 1933, as amended, or (ii) the Company first shall have been
furnished with an opinion of legal counsel reasonably satisfactory to the
Company to the effect that such sale or transfer is exempt from the registration
requirement.

      4. In the event of partial exercise, please re-issue an appropriate
Warrant exercisable into the remaining shares.



                                    _______________________________
                                     (Name)

                                    _______________________________
                                    (Address)

                                    _______________________________
                                    (Signature)

                                    _______________________________
                                     (Date)


                                      -18-

EX-4.3

                                                                     EXHIBIT 4.3

                                                   EXECUTION COPY

NEITHER THIS WARRANT NOR THE SHARES OF STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO SALE, TRANSFER
OR OTHER DISPOSITION OF THIS WARRANT OR SAID SHARES MAY BE EFFECTED WITHOUT (i)
AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, OR (ii) AN OPINION OF
COUNSEL, REASONABLY SATISFACTORY TO COUNSEL TO THE COMPANY, THAT AN EXEMPTION
FROM REGISTRATION UNDER SAID ACT IS AVAILABLE.

July 17, 2003              SECOND AMENDED AND RESTATED            Warrant No.: 8
                             STOCK PURCHASE WARRANT

              To Subscribe for and Purchase Class A Common Stock of


                            NEXTERA ENTERPRISES, INC.

            THIS SECOND AMENDED AND RESTATED STOCK PURCHASE WARRANT ("Warrant")
certifies that, for value received, Fleet National Bank (together with any
subsequent transferees of all or any portion of this Warrant, the "Holder"), is
entitled, upon the terms and subject to the conditions hereinafter set forth, to
subscribe for and purchase from Nextera Enterprises, Inc., a Delaware
corporation (hereinafter called the "Company"), up to one hundred eighty-one
thousand, eight hundred and eighteen (181,818) fully paid and non-assessable
shares of the Company's Class A Common Stock, $0.001 par value per share (the
"Shares"), at the price equal to the Exercise Price (as defined in Section 1
hereof) (subject to adjustment as provided in Section 7 hereof). The number and
character of such Shares are subject to adjustment as provided herein.
Capitalized terms used herein and not defined herein shall have the meanings
given such terms in that certain Second Amended and Restated Credit Agreement
dated December 31, 2002, as amended by that certain First Amendment dated as of
July 8, 2003, and that certain Second Amendment dated the date hereof, by and
among the Company, the Holder and the other lenders party thereto (as the same
may be further amended, restated, supplemented, or otherwise modified from time
to time, the "Credit Agreement"; and together with all related promissory notes,
mortgages, guaranties, agreements, documents and instruments from time to time
entered into by Company and any other person or obligor pursuant thereto, the
"Credit Documents").

      This Warrant amends and restates in its entirety that certain Warrant for
up to one hundred eighty-one thousand, eight hundred and eighteen (181,818)
fully paid and non-assessable shares of the Company's Class A Common Stock,
$0.001 par value per share dated December 31, 2002 (the "Prior Warrant"), made
by the Company in favor of the Holder.

      1. Definitions. As used herein the following terms shall have the
following meanings:

      "Act" means the Securities Act of 1933 as amended, or a similar Federal
      statute and the rules and regulations of the Commission issued under that
      Act, as they each may, from time to time, be in effect.

      "Additional Shares of Common Stock" shall mean all shares of Common Stock
      issued (or, pursuant to Section 7(c), deemed to be issued) by the Company
      after the Original Issue Date, but shall not include:

      (A) shares of Common Stock issued or issuable upon conversion of shares of
      all of preferred stock of the Company outstanding as of the Original Issue
      Date;

      (B) shares of Common Stock issued or issuable upon exercise of this
      Warrant or any other warrant or option of the Company outstanding as of
      the Original Issue Date;

      (C) shares of Common Stock issued by way of dividend or other distribution
      on shares of Common Stock excluded from the definition of Additional
      Shares of Common Stock by the foregoing clause (A) or (B) or on Common
      Stock so excluded; or

      (D) shares issued under an employee stock purchase plan or pursuant to
      options exercisable for shares of Common Stock (such number subject to
      equitable adjustment in the event of any stock dividend, stock split,
      combination, reorganization, recapitalization, reclassification or other
      similar event), issued after the date of this Warrant to directors,
      officers, employees or consultants of the Company and any Subsidiary
      pursuant to any qualified or non-qualified stock option plan or other
      equity incentive plan approved by the Board of Directors of the Company,
      equal to the first 30% of the outstanding stock of the Company, calculated
      on a post-Original Issue Date, fully-diluted basis.

      "Common Stock" shall mean the Class A Common Stock of the Company, $0.001
      par value per share.

      "Convertible Securities" shall mean any evidences of indebtedness, shares
      or other securities directly or indirectly convertible into or
      exchangeable for Common Stock.

      "Exercise Price" shall mean $0.60 per share.

      "New Financing Source" shall mean a source other than the Company.


                                      -2-

      "Option" shall mean rights, options or warrants to subscribe for, purchase
      or otherwise acquire Common Stock or Convertible Securities.

      "Original Issue Date" shall mean the date on which this Warrant is
      originally issued.

      2. Purchase Rights. The purchase rights represented by this Warrant are
exercisable by the Holder in whole or in part (and not as to a fractional
share), at any time and from time to time commencing on the date hereof and
ending at 5:00 p.m. on the date (the "Expiration Date") eighteen (18) months
after the indefeasible payment in full in cash or cash equivalents of the Credit
Obligations.

      3. Exercise of Warrant; Net Issue Exercise.

      3.1 Exercise of Warrant. Subject to Section 2 above, the purchase rights
represented by this Warrant may be exercised, in whole or in part and from time
to time, by the surrender of this Warrant and the duly executed Notice of
Exercise (the form of which is attached as Exhibit A) at the principal office of
the Company and by the payment to the Company, by check, of an amount equal to
the then applicable Exercise Price per share multiplied by the number of Shares
then being purchased. Upon exercise, the Holder shall be entitled to receive,
within a reasonable time, a certificate or certificates, issued in the Holder's
name or in such name or names as the Holder may direct, for the number of Shares
so purchased. The Shares so purchased shall be deemed to be issued as of the
close of business on the date on which this Warrant shall have been exercised.

      3.2. Net Issue Exercise.

            (a) In lieu of exercising this Warrant as set forth in Section 3.1,
      the Holder may elect to receive Shares equal to the value of this Warrant
      (or the portion thereof being cancelled) by surrender of this Warrant at
      the principal office of the Company together with notice of such election
      in which event the Company shall issue to the Holder a number of Shares
      computed using the following formula:

                                  X = Y (A - B)
                                      ---------
                                          A

Where X = the number of Shares to be issued to the Holder;

      Y =   the number of Shares purchasable under this Warrant, or if only a
            portion of this Warrant is being cancelled, the gross number of
            Shares covered by the portion of this Warrant being cancelled;

      A =   the fair market value of one Share, as determined by the Board of
            Directors of the Company pursuant to paragraph (b) below, as at the
            time the net issue election is made pursuant to this Section (the
            "Determination Date"); and

      B =   the Exercise Price (as adjusted to the date of such calculations).

Such Shares shall be issued as soon as practicable after the Determination Date.


                                      -3-

            (b) For purposes of this Section, fair market value of a Share shall
      be determined as follows:

                        (A) If the Company's Common Stock is not publicly traded
                  at the Determination Date, the fair market value of a Share
                  shall be a value reasonably determined by the Company's Board
                  of Directors. In the event that the Holder disagrees with the
                  Board of Directors' determination of fair market value, then
                  the fair market value shall be determined by an appraiser
                  selected by the Holder (the "Holder's Appraiser") and whose
                  appraisal (the "Holder's Appraisal") shall be furnished to the
                  Company within 20 days after the Board of Directors'
                  determination of fair value, and if the Company does not
                  object to such determination within 15 days after receipt of
                  the Holder's appraisal, then the fair market value determined
                  by the Holder's Appraiser shall be the fair market value of a
                  Share. In the event that the Company objects to such
                  determination then the Company shall select an appraiser (the
                  "Company's Appraiser") who shall review the determination of
                  the Holder's Appraiser and issue a report thereon (the
                  "Company's Appraisal") within 30 days after the delivery of
                  the Holder's Appraisal to the Company and within 10 days after
                  the issuance of such report to the Holder's Appraiser, the
                  Holder's Appraiser and the Company's Appraiser shall meet to
                  negotiate in good faith to reach agreement on the fair market
                  value of a Share, and such agreed value shall be the fair
                  market value of a Share. In the event that the Company's
                  Appraiser and the Holder's Appraiser are unable to reach
                  agreement then such Appraisers shall select an appraiser (the
                  "Third Appraiser") within 5 days after the meeting between the
                  Holder's Appraiser and the Company's Appraiser, and the
                  average of two appraisals, consisting of the appraisal made by
                  the Third Appraiser and the appraisal of the Holder's
                  Appraiser and Company's Appraiser (whichever is closest to
                  that of the Third Appraiser), shall be conclusive and binding
                  on the Company and the Holder. The Company and the Holder
                  shall each pay one half (1/2) of the fees and expenses of each
                  of the Company's Appraiser, the Holder's Appraiser and the
                  Third Appraiser.

                        (B) if the Company's Common Stock is publicly traded on
                  the Determination Date, the fair market value of a Share shall
                  be equal to (1) the average of the closing prices quoted on
                  the Nasdaq Stock Exchange, Inc., if applicable, or the average
                  of the last bid and asked prices of the Common Stock quoted in
                  the Nasdaq OTC Bulletin Board or the over-the-counter-market,
                  or (2) if the Common Stock is then traded on a national
                  securities exchange, the average of the high and low closing
                  prices of the Common Stock listed on the principal national
                  securities exchange on which the Common Stock is so traded, in
                  each case for the twenty (20) trading days preceding the
                  Determination Date.


                                      -4-

      4. Shares to be Issued; Reservation of Shares. The Company covenants that
the Shares that may be issued upon the exercise of the purchase rights
represented by this Warrant will, upon issuance, be fully paid and
non-assessable, and free from all liens and charges with respect to the issue
thereof. During the period within which the purchase rights represented by the
Warrant may be exercised, the Company will at all times have authorized and
reserved, for the purpose of issuance upon exercise of the purchase rights
represented by this Warrant, a sufficient number of shares of its Common Stock
to provide for the exercise of the right represented by this Warrant.

      5. No Fractional Shares. No fractional shares shall be issued upon the
exercise of this Warrant. In lieu thereof, a cash payment shall be made equal to
such fraction multiplied by the fair market value of such shares of Common
Stock, as determined pursuant to Section 3.2(b) above.

      6. Adjustment for Merger, Consolidation or Sale of Assets. In the event
that at any time or from time to time after the Original Issue Date, the Company
shall merge or consolidate with or into another entity or sell all or
substantially all of its assets, the Holder hereof shall thereafter have the
right to receive the kind and amount of shares of stock, other securities,
property or cash deliverable or payable to the holders of the Common Stock of
the Company that the Holder hereof upon exercise of this Warrant would have been
entitled to had the Holder hereof exercised the remaining portion of this
Warrant into shares of Common Stock immediately prior thereto.

      7. Adjustment of Exercise Price and Number of Shares.

            (a) Adjustment of Exercise Price and Number of Shares. The Exercise
      Price and number of shares of Common Stock issuable upon the exercise of
      the Warrant shall be adjusted as set forth in this Section 7 with the
      intent that the rights of the Holder to exercise shall not be impaired.

            (b) Adjustment for Combination, Consolidation, Stock Dividend or
      Subdivision of Common Stock. If the outstanding shares of Common Stock
      shall be subdivided into a greater number of shares or a dividend in
      Common Stock shall be paid in respect of Common Stock, the Exercise Price
      in effect immediately prior to such subdivision or at the record date of
      such dividend shall simultaneously with the effectiveness of such
      subdivision or immediately after the record date of such dividend be
      proportionately reduced. If outstanding shares of Common Stock shall be
      combined or consolidated into a smaller number of shares, the Exercise
      Price in effect immediately prior to such combination or consolidation
      shall, simultaneously with the effectiveness of such combination or
      consolidation, be proportionately increased. When any adjustment is
      required to be made in the Exercise Price, the number of shares of Common
      Stock purchasable upon the exercise of this Warrant shall be changed to
      the number determined by dividing (i) an amount equal to the number of
      shares issuable upon the exercise of this Warrant immediately prior to
      such adjustment, multiplied by the Exercise Price in effect


                                      -5-

      immediately prior to such adjustment, by (ii) the Exercise Price in effect
      immediately after such adjustment.

            (c) Issue of Options and Convertible Securities Deemed Issue of
      Additional Shares of Common Stock. If the Company at any time or from time
      to time after the Original Issue Date shall issue any Options or
      Convertible Securities or shall fix a record date for the determination of
      holders of any class of securities entitled to receive any such Options or
      Convertible Securities, then the maximum number of shares of Common Stock
      (as set forth in the instrument relating thereto, without regard to any
      provision contained therein for a subsequent adjustment of such number)
      issuable upon the exercise of such Options or, in the case of Convertible
      Securities or Options therefor, the conversion or exchange of such
      Convertible Securities, shall be deemed to be Additional Shares of Common
      Stock issued as of the time of such issue or, in case such a record date
      shall have been fixed, as of the close of business on such record date,
      provided that Additional Shares of Common Stock shall not be deemed to
      have been issued unless the consideration per share (determined pursuant
      to paragraph (e) below) of such Additional Shares of Common Stock would be
      less than the Exercise Price in effect on the date of and immediately
      prior to such issue, or such record date, as the case may be, and provided
      further in any such case in which Additional Shares of Common Stock are
      deemed to be issued:

                  (i) No further adjustment in the Exercise Price shall be made
            upon the subsequent issue of Convertible Securities or shares of
            Common Stock upon the exercise of such Options or conversion or
            exchange of such Convertible Securities;

                  (ii) If such Options or Convertible Securities by their terms
            provide, with the passage of time or otherwise, for any increase in
            the consideration payable to the Company, or decrease in the number
            of shares of Common Stock issuable, upon the exercise, conversion or
            exchange thereof, the Exercise Price computed upon the original
            issue thereof (or upon the occurrence of a record date with respect
            thereto), and any subsequent adjustments based thereon, shall, upon
            any such increase or decrease becoming effective, be recomputed to
            reflect such increase or decrease insofar as it affects such Options
            or the rights of conversion or exchange under such Convertible
            Securities;

                  (iii) No readjustment pursuant to clause (ii) above shall have
            the effect of increasing the Exercise Price to an amount which
            exceeds the lower of (A) the Exercise Price immediately prior to the
            adjustment affected upon the original issue of Options or
            Convertible Securities (or upon the occurrence of a record date with
            respect thereto) pursuant to the provisions hereof, or (B) the
            Exercise Price that would have resulted from any issuance of
            Additional Shares of Common Stock between the original adjustment
            date and such readjustment date;


                                      -6-

                  (iv) Upon the expiration or termination of any unexercised
            Option, the Exercise Price shall be readjusted to the Exercise Price
            which would have been in effect at the time of such expiration or
            termination had such Option never been issued (but including the
            recalculation of any intervening adjustments), and the Additional
            Shares of Common Stock deemed issued as the result of the original
            issue of such Option shall not be deemed issued for the purposes of
            any subsequent adjustment of the Exercise Price; and

                  (v) In the event of any change in the number of shares of
            Common Stock issuable upon the exercise, conversion or exchange of
            any Option or Convertible Security, including, but not limited to, a
            change resulting from the antidilution provisions thereof, the
            Exercise Price then in effect shall forthwith be readjusted to such
            Exercise Price as would have obtained had the adjustment which was
            made upon the issuance of such Option or Convertible Security (prior
            to such change) been made upon the basis of such change, but no
            further adjustment shall be made for the actual issuance of Common
            Stock upon the exercise or conversion of any such Option or
            Convertible Security.

            (d) Adjustment of Exercise Price Upon Issuance of Additional Shares
      of Common Stock. In the event the Company shall at any time after the
      Original Issue Date issue Additional Shares of Common Stock (including
      Additional Shares of Common Stock deemed to be issued pursuant to
      paragraph (c) above), without consideration or for a consideration per
      share less than the Exercise Price in effect on the date of and
      immediately prior to such issue, then and in such event, such Exercise
      Price shall be reduced, concurrently with such issue, to a price
      (calculated to the nearest cent) calculated as follows:

                  (i) The adjusted Exercise Price shall be equal to a fraction:
            (A) the numerator of which shall be the number of shares of Common
            Stock outstanding immediately prior to such issue (including shares
            described in clause (ii) below), plus the number of shares of Common
            Stock which the aggregate consideration received by the Company for
            the total number of Additional Shares of Common Stock so issued
            would purchase at such Exercise Price; and (B) the denominator of
            which shall be the number of shares of Common Stock outstanding
            immediately prior to such issue (including shares described in
            clause (ii) below) plus the number of such Additional Shares of
            Common Stock so issued.

                  (ii) For the purposes of clause (i), the number of shares of
            Common Stock outstanding immediately prior to such issue shall be
            calculated on a fully diluted basis, as if all Convertible
            Securities had been fully converted into shares of Common Stock
            immediately prior to such issuance and the Warrant and any other
            outstanding Options had been fully exercised immediately prior to
            such issuance (and any resulting Convertible Securities fully
            converted into Common Stock) as of such date.


                                      -7-

                  (iii) The applicable Exercise Price shall not be reduced at
            the time of any issuance of Additional Shares of Common Stock if the
            amount of such reduction would be an amount less than $0.01, but any
            such amount shall be carried forward and reduction with respect
            thereto shall be made at the time and together with any subsequent
            reduction which, together with such amount and any other amounts so
            carried forward, shall aggregate $0.01 or more.

            (e) Determination of Consideration. For purposes of paragraph (d),
      the consideration received by the Company for the issue of any Additional
      Shares of Common Stock shall be computed as follows:

                  (i) Cash and Property: Such consideration shall:

                        (A) insofar as it consists of cash, be computed at the
                  aggregate of cash received by the Company;

                        (B) insofar as it consists of property other than cash,
                  be computed at the fair market value thereof at the time of
                  such issue, as determined in good faith by the Board of
                  Directors; and

                        (C) in the event Additional Shares of Common Stock are
                  issued together with other shares or securities or other
                  assets of the Company for consideration which covers both, be
                  the proportion of such consideration so received, computed as
                  provided in clauses (A) and (B) above, as determined in good
                  faith by the Board of Directors.

                  (ii) Options and Convertible Securities. The consideration per
            share received by the Company for Additional Shares of Common Stock
            deemed to have been issued pursuant to paragraph (c), relating to
            Options and Convertible Securities, shall be determined by dividing:

                        (A) the total amount, if any, received or receivable by
                  the Company as consideration for the issue of such Options or
                  Convertible Securities, plus the minimum aggregate amount of
                  additional consideration (as set forth in the instruments
                  relating thereto, without regard to any provision contained
                  therein for a subsequent adjustment of such consideration)
                  payable to the Company upon the exercise of such Options or
                  the conversion or exchange of such Convertible Securities, or
                  in the case of Options for Convertible Securities, the
                  exercise of such Options for Convertible Securities and the
                  conversion or exchange of such Convertible Securities; by


                                      -8-

                        (B) the maximum number of shares of Common Stock (as set
                  forth in the instrument relating thereto, without regard to
                  any provision contained therein for a subsequent adjustment of
                  such number) issuable upon the exercise of such Options or the
                  conversion or exchange of such Convertible Securities.

            (f) Certificate as to Adjustments. Upon the occurrence of each
      adjustment or readjustment of the Exercise Price pursuant to this Section
      7, the Company at its expense shall promptly compute such adjustment or
      readjustment in accordance with the terms hereof and furnish to the Holder
      a certificate setting forth such adjustment or readjustment and showing in
      detail the facts upon which such adjustment or readjustment is based. The
      Company shall, upon the written request at any time of the Holder, furnish
      or cause to be furnished to such holder a like certificate setting forth
      (i) such adjustments and readjustments, (ii) the Exercise Price at the
      time in effect, and (iii) the number of shares of Common Stock and the
      amount, if any, of other property which at the time would be received upon
      the exercise of the Warrant.

      8. No Rights as a Shareholder. This Warrant does not entitle the Holder to
any voting rights or other rights as a shareholder of the Company prior to
exercise of this Warrant and the payment for the Shares so purchased.
Notwithstanding the foregoing, the Company agrees to transmit to the Holder such
information, documents and reports as are generally distributed to holders of
the capital stock of the Company concurrently with the distribution thereof to
the shareholders. Upon valid exercise of this Warrant and payment for the Shares
so purchased in accordance with the terms of the Warrant, the Holder shall be
deemed a shareholder of the Company.

      9. Sale or Transfer of the Warrant; Legend. The Warrant and the Shares
shall not be sold or transferred unless either (i) they first shall have been
registered under the Act, or (ii) the Company first shall have been furnished
with an opinion of legal counsel reasonably satisfactory to the Company to the
effect that such sale or transfer is exempt from the registration requirements
of the Act. Each certificate representing any Warrant shall bear the legend set
out on page 1 hereof. Each certificate representing any Shares shall bear a
legend substantially in the following form, as appropriate:

            THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
            INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE
            OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED
            WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
            OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
            REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS
            AMENDED.

Such Warrant and Shares may be subject to additional restrictions on transfer
imposed under applicable state and federal securities law.


                                      -9-

      10. Put Right. Commencing on the earlier of (i) December 31, 2004 and (ii)
the date upon which the Loans (as defined in the Credit Agreement) owed to
Holder and the other lenders party to the Credit Agreement have been paid in
full in cash or Cash Equivalents and in each case (i) and (ii) prior to the
Expiration Date, the Holder shall have the right, exercised by the delivery of
written notice to the Company (a "Put Notice"), to require the Company to cancel
the unexercised portion of this Warrant, and all related rights in exchange for
a cash payment (the "Put Payment") equal to $0.23 per share payable to the
Holder within ten (10) days of receipt by the Company of the Put Notice and the
original Warrant for cancellation.

      11. Call Option. At any time during the one year period following the
indefeasible payment in full in cash or cash equivalents of the Credit
Obligations, and prior to June 30, 2004, the Company shall have the right
exercised by the delivery of written notice to the Holder (a "Call Notice") to
cancel this Warrant and the purchase rights hereunder in exchange for a cash
payment (the "Call Payment") equal to $0.5288 per share, payable to the Holder
within five (5) days after delivery by the Company of the Call Notice, provided
however, that any payment made pursuant to this Section 11 may only be made out
of a New Financing Source. Notwithstanding anything to the contrary contained
herein, the Holder shall be entitled to exercise this Warrant in whole or in
part at any time after the receipt of the Call Notice until the receipt by the
Holder of the Call Payment. In the event that the Holder chooses to exercise all
or a portion of the Warrant after receipt of the Call Notice, the Company shall
have the option to rescind such Call Notice or to exercise its call option with
respect to that portion of the Warrant which remains unexercised through the
delivery of a pro rata portion of the Call Payment. The Company shall have the
right to exercise the call option set forth herein one time only.

      12. Modifications and Waivers. This Warrant may not be changed, waived,
discharged or terminated except by an instrument in writing signed by the party
against which enforcement of the same is sought.

      13. Notices. Any notice, request or other document required or permitted
to be given or delivered to the Holder or the Company shall be sufficiently
given or made if sent by registered or certified mail, postage prepaid,
addressed to the parties as provided below:

           If to Holder:     Fleet National Bank
                             100 Federal Street, 6th Floor
                             MA DE 10006A
                             Boston, MA  02110
                             Attn:   Fred P. Lucy
                                     Vice President


                                      -10-

           with a copy to:

                             Brown Rudnick Berlack Israels LLP
                             One Financial Center
                             Boston, MA  02111
                             Attn:  William R. Baldiga, Esquire
                                    Mary D. Bucci, Esquire

           If to Company:    Nextera Enterprises, Inc.
                             One Cambridge Center - 7th Floor
                             Cambridge, MA 02142
                             Attn:  Michael P. Muldowney,
                                    Chief Financial Officer

           with a copy to:   Maron & Sandler
                             1250 4th Street
                             Suite 550
                             Santa Monica, CA  90401
                             Attn:  Stanley E. Maron, Esquire

      14. Loss, Theft, Destruction or Mutilation of Warrant. The Company
covenants with the Holder that upon its receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant or any stock certificate and, in the case of any such loss, theft
or destruction, of an indemnity or security reasonably satisfactory to it, and
upon reimbursement to the Company of all reasonable expenses incidental thereto,
and upon surrender and cancellation of this Warrant or stock certificate, if
mutilated, the Company will make and deliver a new Warrant or stock certificate,
of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or
stock certificate.

      15. Representations and Warranties of Holder. By accepting this Warrant,
the Holder represents and warrants that it is acquiring this Warrant and the
Shares for its own account, for investment and not with a view to, or for sale
in connection with, any distribution thereof or any part thereof. Holder
represents and warrants that it is (a) experienced in the evaluation of
businesses similar to the Company, (b) is able to fend for itself in the
transactions contemplated by this Warrant, (c) has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of an investment in the Company, (d) has the ability to bear the economic
risks of an investment in the Company, (e) has been furnished with or has had
access to such information as is specified in subparagraph (b)(2) of Rule 502
promulgated under the Act and (f) has been afforded the opportunity to ask
questions of and to receive answers from the Company and to obtain any
additional information necessary to make an informed investment decision with
respect to an investment in the Company. The Holder further represents that it
is an "accredited investor" as defined in Rule 501(a) of Regulation D under the
Act.


                                      -11-

      16. Representations and Warranties of Company. The Company represents
that:

            (a) The execution and delivery of this Warrant has been duly
      authorized by the Company's Board of Directors and constitutes the legal,
      valid and binding obligation of the Company enforceable against the
      Company in accordance with its terms, except as enforcement thereof may be
      limited by bankruptcy, insolvency, or other laws affecting the enforcement
      of creditors' rights in general and except that the enforceability of the
      obligations hereunder is subject to general principals of equity
      (regardless of whether such enforceability is considered in a proceeding
      at equity or at law). Neither the execution nor the delivery of this
      Warrant, nor fulfillment of nor compliance with the terms and provisions
      of this Warrant, nor the issuance of Shares upon exercise of the Warrant,
      will violate the terms of the certificate of incorporation or by-laws of
      the Company or, to the best of the Company's knowledge, any agreement
      (including any agreement with stockholders), instrument, judgment, decree
      or statute to which the Company is subject.

            (b) As of December 31, 2002, the authorized capital stock of the
      Company consisted of (i) 99,300,000 shares of Common Stock, $0.001 par
      value per share, 95,000,000 shares of which are designated as Class A
      Common Stock, of which 31,885,896 shares are issued and outstanding, and
      4,300,000 shares of which are designated as Class B Common Stock, of which
      3,869,570 shares are issued and outstanding, and (ii) 10,000,000 shares of
      Preferred Stock, $0.001 par value per share 600,000 shares of which are
      designated as Series A Cumulative Convertible Preferred Stock, of which
      39,544 shares are issued and outstanding.

            (c) Except as set forth in subparagraph (b) above, and in
      registration statements filed by the Company under the Act or in any
      report filed by the Company under the Securities Exchange Act of 1934, as
      amended, the Company has not authorized any rights (either preemptive or
      other) or options to subscribe for or purchase from the Company, or any
      warrants or other agreements providing for or requiring the issuance by
      the Company of, any capital stock or any securities convertible into or
      exchangeable for its capital stock.

            (d) Sufficient shares of authorized but unissued shares of Common
      Stock of the Company have been reserved by appropriate corporate action
      with the prospective exercise of the Warrant, and, the issuance of either
      the Warrant or the shares of Common Stock upon exercise of the Warrant
      will not require any further corporate action by the stockholders or
      directors of the Company, will not be subject to preemptive rights (unless
      the exercise of the same has been irrevocably waived) in any present
      stockholders of the Company and will not conflict with any provision of
      any agreement to which the Company is a party or by which it is bound, and
      such Common Stock, when issued upon exercise of the


                                      -12-

      Warrant in accordance with its terms, will be duly authorized, fully paid
      and non-assessable.

      17. Registration Rights.

            (a) Piggy Back Registration Rights. If (but without any obligation
      to do so) the Company shall determine to register (a "Company
      Registration") any of its securities for its own account or for any other
      person (other than a registration under the Act of shares issued in
      connection with any acquisition of any entity or business, shares issuable
      solely upon the exercise of stock options, or shares issuable solely
      pursuant to employee benefit plans or arrangements, including registration
      statements on Form S-4, S-8 or any successor form), the Company shall do
      the following:

                  (i) promptly give the Holder written notice thereof (which
            shall include a list of the jurisdictions in which the Company
            intends to attempt to register or qualify such securities under the
            applicable blue sky or other state securities laws); and

                  (ii) include among the securities which it then registers or
            qualifies all Registrable Securities (as defined below) specified in
            a written request or requests, made within fifteen (15) days after
            receipt of the written notice from the Company, by the Holder. The
            Holder shall have the right to withdraw its request for inclusion of
            its Registrable Securities in any registration statement by giving
            written notice to the Company of its request to withdraw. The
            Company may withdraw a Company Registration at any time prior to the
            time it becomes effective whether or not the Holder has elected to
            include Registrable Securities (as defined below) in such
            registration. For purposes of this Warrant, the term "Registrable
            Securities" shall mean all shares of Common Stock issued and
            issuable upon exercise of the Warrant; provided however, that shares
            of Common Stock which are "Registrable Securities" shall cease to be
            Registrable Securities (a) upon any sale pursuant to a registration
            statement under the Act, Section 4(1) of the Act or Rule 144
            promulgated under the Act or (b) at such time as such shares of
            Common Stock are freely saleable under Rule 144(k) promulgated under
            the Act (or a successor provision).

            (b) Limitations of Registration. If and to the extent that the
      Holder shall have, at the time of the delivery of the written request
      referred to in subparagraph (a) above, no present intention of selling or
      distribution, the Company shall be obligated to effect such registration,
      qualification or compliance with respect to the Holder's Registrable
      Securities only if and to the extent, in each case, that such
      registration, qualification and compliance are at the


                                      -13-

      time permitted by the applicable statutes or rules and regulations
      thereunder or the practices of the governmental authority concerned.

            (c) Registration Procedures. In the case of each registration,
      qualification or compliance pursuant to this Section 17, the Company will
      keep the Holder advised in writing as to the initiation of proceedings for
      such registration, qualification and compliance and as to the completion
      thereof, and will advise the Holder, upon written request, of the progress
      of such proceedings. At the expense of the Company, the Company will (i)
      keep such registration, qualification and compliance current and effective
      for a period of the earlier of (A) 120 days, or (B) until the Holder has
      completed the distributions relating thereto, including, without
      limitation, the filing of post-effective amendments and supplements to any
      registration statement or prospectus, as necessary to permit the sale or
      distribution of Registrable Securities not theretofore sold or
      distributed, and (ii) take all necessary action under any applicable blue
      sky or other state securities laws to permit such exercise, sale or
      distribution, all as reasonably requested by such Holder; provided,
      however, that the Company shall not be required in connection therewith to
      qualify as a foreign corporation in any jurisdiction in which it is not
      now so qualified or to take any action that would subject it to general
      consent to service of process or taxation. The Company shall not be
      required to file, cause to become effective or maintain the effectiveness
      of any registration statement that contemplates a distribution of
      securities on a delayed or continuous basis pursuant to Rule 415 under the
      Act.

            (d) Registration Rights. Anything to the contrary in Section 17
      notwithstanding, in connection with any Company Registration, the Company
      shall not be required to include any of the Holder's Registrable
      Securities in such Company Registration unless the Holder accepts the
      terms of the underwriting as agreed upon between the Company and the
      underwriters selected by it (or by other persons entitled to select the
      underwriters), and then only in such quantity as the underwriters
      determine in their sole discretion will not jeopardize the success of the
      offering by the Company or will not adversely affect the aggregate
      proceeds to the Company from the offering. If the total amount of
      securities, including Registrable Securities and all other securities
      requested to be included in such offering by any stockholder of the
      Company, exceeds the amount of securities that the underwriters determine
      in their sole discretion is compatible with the success of the offering or
      the aggregate proceeds to the Company from the offering, then the number
      of Shares to be offered for the account of the Holder and all such other
      persons participating in such registration shall be reduced (to zero if
      necessary) or limited pro rata in proportion to the respective number of
      Shares requested to be registered by the Holder and each other person to
      reduce the total number of Shares requested to be included in such
      offering to the number of Shares, if any, recommended by such
      underwriters.


                                      -14-

            (e) Indemnification. The Company will indemnify, defend and hold
      harmless the Holder to the fullest extent that such agreement is
      enforceable under applicable law against all claims, losses, damages and
      liabilities (or actions in respect thereof) arising out of or based on any
      untrue statement (or alleged untrue statement) of material fact contained
      therein (or in any related registration statement, notification or the
      like) or any omission (or alleged omission) to state therein a material
      fact required to be stated therein or necessary to make the statements
      therein not misleading, or any violation by the Company of any rule or
      regulation promulgated under the Act applicable to the Company and
      relating to action or inaction required of the Company in connection with
      any such registration, qualification or compliance, and will reimburse the
      Holder for any legal or any other expenses reasonably incurred in
      connection with investigating or defending any such claim, loss, damage,
      liability or action provided, however, that the Company will not be liable
      in any such case to the extent that any such claim, loss, damage or
      liability arises out of or is based on any untrue statement or omission
      based upon written information furnished to the Company by an instrument
      duly executed by the Holder and stated to be specifically for use therein.

            (f) The Holder will indemnify, defend and hold harmless the Company
      to the fullest extent that such agreement is enforceable under applicable
      law against all claims, losses, damages and liabilities (or actions in
      respect thereof) arising out of or based on any untrue statement (or
      alleged untrue statement) of material fact contained therein (or in any
      related registration statement, notification or the like) or any omission
      (or alleged omission) to state therein a material fact required to be
      stated therein or necessary to make the statements therein not misleading,
      or any violation by the Holder of any rule or regulation promulgated under
      the Act applicable to the Holder and relating to action or inaction
      required of the Holder in connection with any such registration,
      qualification or compliance, and will reimburse the Company for any legal
      or any other expenses reasonably incurred in connection with investigating
      or defending any such claim, loss, damage, liability or action, in each
      case to the extent (and only to the extent) that such claims, losses,
      damages, liabilities and actions relate to reliance on any untrue
      statement or omission based upon written information furnished to the
      Company by an instrument duly executed by the Holder and stated to be
      specifically for use in the registration statement, provided, however,
      that such Holder's obligations hereunder shall be limited to an amount
      equal to the proceeds received by such Holder of the Registrable
      Securities sold in such registration.

            (g) Notwithstanding the foregoing, to the extent that the provisions
      on indemnification contained in the underwriting agreement entered into in
      connection with a Company Registration are in conflict with the provisions
      of this Section 17, the provisions in the underwriting agreement shall
      control.


                                      -15-

      18. Binding Effect on Successors. This Warrant shall be binding upon any
corporation succeeding the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets, and all of the obligations of
the Company relating to the Shares issuable upon exercise of this Warrant shall
survive the exercise and termination of this Warrant and all of the covenants
and agreements of the Company shall inure to the benefit of the successors and
assigns of the Holder.

      19. Amendments. No approval, consent, amendment or waiver of this
Agreement shall be effective unless in writing and signed by the Company and
Holder.

      20. Counterparts. This Agreement may be executed in any number of
counterparts and each such counterpart shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute but one and the
same instrument.

      21. Governing Law. This Warrant shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the Commonwealth of Massachusetts.

      22. Entire Agreement. This Warrant constitutes the entire agreement among
the parties hereto pertaining to the subject matter hereof, and any and all
other written or oral agreements relating to the subject matter hereof existing
among any of the parties hereto are expressly cancelled, including, but not
limited to, the Prior Warrant.


                                      -16-

      IN WITNESS WHEREOF, the parties have caused this Warrant to be executed by
their duly authorized representatives as of the date first above written.

                                       NEXTERA ENTERPRISES, INC.,
                                       as Company

                                       By:/s/ Michael P. Muldowney
                                          --------------------------------------
                                          Michael P. Muldowney
                                          Chief Financial Officer


                                       FLEET NATIONAL BANK,
                                       as Agent, Lender and Holder

                                       By:/s/ Fred P. Lucy
                                          --------------------------------------
                                          Fred P. Lucy
                                          Vice President


                                      -17-

                                    EXHIBIT A

                               NOTICE OF EXERCISE

To: NEXTERA ENTERPRISES, INC.

      1. The undersigned hereby elects to purchase _______ shares of Common
Stock of Nextera Enterprises, Inc. pursuant to the terms of the attached
Warrant, and tenders herewith payment of the purchase price of such shares in
full.

      2. Please issue a certificate or certificates representing said shares in
the name of the undersigned or in such other name or names as are specified
below.

      3. The undersigned represents that the aforesaid shares of Common Stock
are being acquired for the account of the undersigned for investment and not
with a view to, or for resale in connection with, the distribution thereof and
that the undersigned has no present intention of distributing or reselling such
shares. The undersigned further represents that such shares shall not be sold or
transferred unless either (1) they first shall have been registered under the
Securities Act of 1933, as amended, or (ii) the Company first shall have been
furnished with an opinion of legal counsel reasonably satisfactory to the
Company to the effect that such sale or transfer is exempt from the registration
requirement.

      4. In the event of partial exercise, please re-issue an appropriate
Warrant exercisable into the remaining shares.



                                              -------------------------------
                                              (Name)

                                              -------------------------------
                                              (Address)

                                              -------------------------------
                                              (Signature)

                                              -------------------------------
                                              (Date)


#1215209 v\4 -- 11433/394


                                      -18-

EX-4.4

                                                                     EXHIBIT 4.4

                                                                  EXECUTION COPY

NEITHER THIS WARRANT NOR THE SHARES OF STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO SALE, TRANSFER
OR OTHER DISPOSITION OF THIS WARRANT OR SAID SHARES MAY BE EFFECTED WITHOUT (i)
AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, OR (ii) AN OPINION OF
COUNSEL, REASONABLY SATISFACTORY TO COUNSEL TO THE COMPANY, THAT AN EXEMPTION
FROM REGISTRATION UNDER SAID ACT IS AVAILABLE.

July 17, 2003             SECOND AMENDED AND RESTATED            Warrant No.: 9
                             STOCK PURCHASE WARRANT




              To Subscribe for and Purchase Class A Common Stock of


                            NEXTERA ENTERPRISES, INC.

      THIS SECOND AMENDED AND RESTATED STOCK PURCHASE WARRANT ("Warrant")
certifies that, for value received, Banc of America Strategic Solutions, Inc.
(together with any subsequent transferees of all or any portion of this Warrant,
the "Holder"), is entitled, upon the terms and subject to the conditions
hereinafter set forth, to subscribe for and purchase from Nextera Enterprises,
Inc., a Delaware corporation (hereinafter called the "Company"), up to two
hundred eighteen thousand, one hundred and eight-two (218,182) fully paid and
non-assessable shares of the Company's Class A Common Stock, $0.001 par value
per share (the "Shares"), at the price equal to the Exercise Price (as defined
in Section 1 hereof) (subject to adjustment as provided in Section 7 hereof).
The number and character of such Shares are subject to adjustment as provided
herein. Capitalized terms used herein and not defined herein shall have the
meanings given such terms in that certain Second Amended and Restated Credit
Agreement dated December 31, 2002, as amended by that certain First Amendment
dated as of July 8, 2003, and that certain Second Amendment dated the date
hereof, by and among Company, the Holder and the other lenders party thereto (as
the same may be further amended, restated, supplemented, or otherwise modified
from time to time, the "Credit Agreement"; and together with all related
promissory notes, mortgages, guaranties, agreements, documents and instruments
from time to time entered into by Company and any other person or obligor
pursuant thereto, the Credit Documents")

      This Warrant amends and restates in its entirety that certain Warrant for
up to two hundred eighteen thousand, one hundred and eight-two (218,182) fully
paid and non-assessable shares of the Company's Class A Common Stock, $0.001 par
value per share dated December 31, 2002 (the "Prior Warrant"), made by the
Company in favor of the Holder.

      1. Definitions. As used herein the following terms shall have the
following meanings:

            "Act" means the Securities Act of 1933 as amended, or a similar
            Federal statute and the rules and regulations of the Commission
            issued under that Act, as they each may, from time to time, be in
            effect.

            "Additional Shares of Common Stock" shall mean all shares of Common
            Stock issued (or, pursuant to Section 7(c), deemed to be issued) by
            the Company after the Original Issue Date, but shall not include:

            (A) shares of Common Stock issued or issuable upon conversion of
            shares of all of preferred stock of the Company outstanding as of
            the Original Issue Date;

            (B) shares of Common Stock issued or issuable upon exercise of this
            Warrant or any other warrant or option of the Company outstanding as
            of the Original Issue Date;

            (C) shares of Common Stock issued by way of dividend or other
            distribution on shares of Common Stock excluded from the definition
            of Additional Shares of Common Stock by the foregoing clause (A) or
            (B) or on Common Stock so excluded; or

            (D) shares issued under an employee stock purchase plan or pursuant
            to options exercisable for shares of Common Stock (such number
            subject to equitable adjustment in the event of any stock dividend,
            stock split, combination, reorganization, recapitalization,
            reclassification or other similar event), issued after the date of
            this Warrant to directors, officers, employees or consultants of the
            Company and any Subsidiary pursuant to any qualified or
            non-qualified stock option plan or other equity incentive plan
            approved by the Board of Directors of the Company, equal to the
            first 30% of the outstanding stock of the Company, calculated on a
            post-Original Issue Date, fully-diluted basis.

            "Common Stock" shall mean the Class A Common Stock of the Company,
            $0.001 par value per share.

            "Convertible Securities" shall mean any evidences of indebtedness,
            shares or other securities directly or indirectly convertible into
            or exchangeable for Common Stock.

            "Exercise Price" shall mean $0.60 per share.

            "New Financing Source" shall mean a source other than the Company.

                                      -2-

            "Option" shall mean rights, options or warrants to subscribe for,
            purchase or otherwise acquire Common Stock or Convertible
            Securities.

            "Original Issue Date" shall mean the date on which this Warrant is
            originally issued.

      2. Purchase Rights. The purchase rights represented by this Warrant are
exercisable by the Holder in whole or in part (and not as to a fractional
share), at any time and from time to time commencing on the date hereof and
ending at 5:00 p.m. on the date (the "Expiration Date") eighteen (18) months
after the indefeasible payment in full in cash or cash equivalents of the Credit
Obligations.

      3. Exercise of Warrant; Net Issue Exercise.

      3.1 Exercise of Warrant. Subject to Section 2 above, the purchase rights
represented by this Warrant may be exercised, in whole or in part and from time
to time, by the surrender of this Warrant and the duly executed Notice of
Exercise (the form of which is attached as Exhibit A) at the principal office of
the Company and by the payment to the Company, by check, of an amount equal to
the then applicable Exercise Price per share multiplied by the number of Shares
then being purchased. Upon exercise, the Holder shall be entitled to receive,
within a reasonable time, a certificate or certificates, issued in the Holder's
name or in such name or names as the Holder may direct, for the number of Shares
so purchased. The Shares so purchased shall be deemed to be issued as of the
close of business on the date on which this Warrant shall have been exercised.

      3.2. Net Issue Exercise.

            (a) In lieu of exercising this Warrant as set forth in Section 3.1,
      the Holder may elect to receive Shares equal to the value of this Warrant
      (or the portion thereof being cancelled) by surrender of this Warrant at
      the principal office of the Company together with notice of such election
      in which event the Company shall issue to the Holder a number of Shares
      computed using the following formula:

                                  X = Y (A - B)
                                      ---------
                                           A

Where X =   the number of Shares to be issued to the Holder;

                  Y = the number of Shares purchasable under this Warrant, or if
                  only a portion of this Warrant is being cancelled, the gross
                  number of Shares covered by the portion of this Warrant being
                  cancelled;

      A=    the fair market value of one Share, as determined by the Board of
            Directors of the Company pursuant to paragraph (b) below, as at the
            time the net issue election is made pursuant to this Section (the
            "Determination Date"); and

      B=    the Exercise Price (as adjusted to the date of such calculations).

Such Shares shall be issued as soon as practicable after the Determination Date.

                                      -3-

            (b) For purposes of this Section, fair market value of a Share shall
      be determined as follows:

                        (A) If the Company's Common Stock is not publicly traded
                  at the Determination Date, the fair market value of a Share
                  shall be a value reasonably determined by the Company's Board
                  of Directors. In the event that the Holder disagrees with the
                  Board of Directors' determination of fair market value, then
                  the fair market value shall be determined by an appraiser
                  selected by the Holder (the "Holder's Appraiser") and whose
                  appraisal (the "Holder's Appraisal") shall be furnished to the
                  Company within 20 days after the Board of Directors'
                  determination of fair value, and if the Company does not
                  object to such determination within 15 days after receipt of
                  the Holder's appraisal, then the fair market value determined
                  by the Holder's Appraiser shall be the fair market value of a
                  Share. In the event that the Company objects to such
                  determination then the Company shall select an appraiser (the
                  "Company's Appraiser") who shall review the determination of
                  the Holder's Appraiser and issue a report thereon (the
                  "Company's Appraisal") within 30 days after the delivery of
                  the Holder's Appraisal to the Company and within 10 days after
                  the issuance of such report to the Holder's Appraiser, the
                  Holder's Appraiser and the Company's Appraiser shall meet to
                  negotiate in good faith to reach agreement on the fair market
                  value of a Share, and such agreed value shall be the fair
                  market value of a Share. In the event that the Company's
                  Appraiser and the Holder's Appraiser are unable to reach
                  agreement then such Appraisers shall select an appraiser (the
                  "Third Appraiser") within 5 days after the meeting between the
                  Holder's Appraiser and the Company's Appraiser, and the
                  average of two appraisals, consisting of the appraisal made by
                  the Third Appraiser and the appraisal of the Holder's
                  Appraiser and Company's Appraiser (whichever is closest to
                  that of the Third Appraiser), shall be conclusive and binding
                  on the Company and the Holder. The Company and the Holder
                  shall each pay one half (1/2) of the fees and expenses of each
                  of the Company's Appraiser, the Holder's Appraiser and the
                  Third Appraiser.

                        (B) if the Company's Common Stock is publicly traded on
                  the Determination Date, the fair market value of a Share shall
                  be equal to (1) the average of the closing prices quoted on
                  the Nasdaq Stock Exchange, Inc., if applicable, or the average
                  of the last bid and asked prices of the Common Stock quoted in
                  the Nasdaq OTC Bulletin Board or the over-the-counter-market,
                  or (2) if the Common Stock is then traded on a national
                  securities exchange, the average of the high and low closing
                  prices of the Common Stock listed on the principal national
                  securities exchange on which the Common Stock is so traded, in
                  each case for the twenty (20) trading days preceding the
                  Determination Date.

                                      -4-

      4. Shares to be Issued; Reservation of Shares. The Company covenants that
the Shares that may be issued upon the exercise of the purchase rights
represented by this Warrant will, upon issuance, be fully paid and
non-assessable, and free from all liens and charges with respect to the issue
thereof. During the period within which the purchase rights represented by the
Warrant may be exercised, the Company will at all times have authorized and
reserved, for the purpose of issuance upon exercise of the purchase rights
represented by this Warrant, a sufficient number of shares of its Common Stock
to provide for the exercise of the right represented by this Warrant.

      5. No Fractional Shares. No fractional shares shall be issued upon the
exercise of this Warrant. In lieu thereof, a cash payment shall be made equal to
such fraction multiplied by the fair market value of such shares of Common
Stock, as determined pursuant to Section 3.2(b) above.

      6. Adjustment for Merger, Consolidation or Sale of Assets. In the event
that at any time or from time to time after the Original Issue Date, the Company
shall merge or consolidate with or into another entity or sell all or
substantially all of its assets, the Holder hereof shall thereafter have the
right to receive the kind and amount of shares of stock, other securities,
property or cash deliverable or payable to the holders of the Common Stock of
the Company that the Holder hereof upon exercise of this Warrant would have been
entitled to had the Holder hereof exercised the remaining portion of this
Warrant into shares of Common Stock immediately prior thereto.

      7. Adjustment of Exercise Price and Number of Shares.

            (a) Adjustment of Exercise Price and Number of Shares. The Exercise
      Price and number of shares of Common Stock issuable upon the exercise of
      the Warrant shall be adjusted as set forth in this Section 7 with the
      intent that the rights of the Holder to exercise shall not be impaired.

            (b) Adjustment for Combination, Consolidation, Stock Dividend or
      Subdivision of Common Stock. If the outstanding shares of Common Stock
      shall be subdivided into a greater number of shares or a dividend in
      Common Stock shall be paid in respect of Common Stock, the Exercise Price
      in effect immediately prior to such subdivision or at the record date of
      such dividend shall simultaneously with the effectiveness of such
      subdivision or immediately after the record date of such dividend be
      proportionately reduced. If outstanding shares of Common Stock shall be
      combined or consolidated into a smaller number of shares, the Exercise
      Price in effect immediately prior to such combination or consolidation
      shall, simultaneously with the effectiveness of such combination or
      consolidation, be proportionately increased. When any adjustment is
      required to be made in the Exercise Price, the number of shares of Common
      Stock purchasable upon the exercise of this Warrant shall be changed to
      the number determined by dividing (i) an amount equal to the number of
      shares issuable upon the exercise of this Warrant immediately prior to
      such adjustment, multiplied by the Exercise Price in effect

                                      -5-

      immediately prior to such adjustment, by (ii) the Exercise Price in effect
      immediately after such adjustment.

            (c) Issue of Options and Convertible Securities Deemed Issue of
      Additional Shares of Common Stock. If the Company at any time or from time
      to time after the Original Issue Date shall issue any Options or
      Convertible Securities or shall fix a record date for the determination of
      holders of any class of securities entitled to receive any such Options or
      Convertible Securities, then the maximum number of shares of Common Stock
      (as set forth in the instrument relating thereto, without regard to any
      provision contained therein for a subsequent adjustment of such number)
      issuable upon the exercise of such Options or, in the case of Convertible
      Securities or Options therefor, the conversion or exchange of such
      Convertible Securities, shall be deemed to be Additional Shares of Common
      Stock issued as of the time of such issue or, in case such a record date
      shall have been fixed, as of the close of business on such record date,
      provided that Additional Shares of Common Stock shall not be deemed to
      have been issued unless the consideration per share (determined pursuant
      to paragraph (e) below) of such Additional Shares of Common Stock would be
      less than the Exercise Price in effect on the date of and immediately
      prior to such issue, or such record date, as the case may be, and provided
      further in any such case in which Additional Shares of Common Stock are
      deemed to be issued:

                  (i) No further adjustment in the Exercise Price shall be made
            upon the subsequent issue of Convertible Securities or shares of
            Common Stock upon the exercise of such Options or conversion or
            exchange of such Convertible Securities;

                  (ii) If such Options or Convertible Securities by their terms
            provide, with the passage of time or otherwise, for any increase in
            the consideration payable to the Company, or decrease in the number
            of shares of Common Stock issuable, upon the exercise, conversion or
            exchange thereof, the Exercise Price computed upon the original
            issue thereof (or upon the occurrence of a record date with respect
            thereto), and any subsequent adjustments based thereon, shall, upon
            any such increase or decrease becoming effective, be recomputed to
            reflect such increase or decrease insofar as it affects such Options
            or the rights of conversion or exchange under such Convertible
            Securities;

                  (iii) No readjustment pursuant to clause (ii) above shall have
            the effect of increasing the Exercise Price to an amount which
            exceeds the lower of (A) the Exercise Price immediately prior to the
            adjustment affected upon the original issue of Options or
            Convertible Securities (or upon the occurrence of a record date with
            respect thereto) pursuant to the provisions hereof, or (B) the
            Exercise Price that would have resulted from any issuance of
            Additional Shares of Common Stock between the original adjustment
            date and such readjustment date;

                                      -6-

                  (iv) Upon the expiration or termination of any unexercised
            Option, the Exercise Price shall be readjusted to the Exercise Price
            which would have been in effect at the time of such expiration or
            termination had such Option never been issued (but including the
            recalculation of any intervening adjustments), and the Additional
            Shares of Common Stock deemed issued as the result of the original
            issue of such Option shall not be deemed issued for the purposes of
            any subsequent adjustment of the Exercise Price; and

                  (v) In the event of any change in the number of shares of
            Common Stock issuable upon the exercise, conversion or exchange of
            any Option or Convertible Security, including, but not limited to, a
            change resulting from the antidilution provisions thereof, the
            Exercise Price then in effect shall forthwith be readjusted to such
            Exercise Price as would have obtained had the adjustment which was
            made upon the issuance of such Option or Convertible Security (prior
            to such change) been made upon the basis of such change, but no
            further adjustment shall be made for the actual issuance of Common
            Stock upon the exercise or conversion of any such Option or
            Convertible Security.

            (d) Adjustment of Exercise Price Upon Issuance of Additional Shares
      of Common Stock. In the event the Company shall at any time after the
      Original Issue Date issue Additional Shares of Common Stock (including
      Additional Shares of Common Stock deemed to be issued pursuant to
      paragraph (c) above), without consideration or for a consideration per
      share less than the Exercise Price in effect on the date of and
      immediately prior to such issue, then and in such event, such Exercise
      Price shall be reduced, concurrently with such issue, to a price
      (calculated to the nearest cent) calculated as follows:

                  (i) The adjusted Exercise Price shall be equal to a fraction:
            (A) the numerator of which shall be the number of shares of Common
            Stock outstanding immediately prior to such issue (including shares
            described in clause (ii) below), plus the number of shares of Common
            Stock which the aggregate consideration received by the Company for
            the total number of Additional Shares of Common Stock so issued
            would purchase at such Exercise Price; and (B) the denominator of
            which shall be the number of shares of Common Stock outstanding
            immediately prior to such issue (including shares described in
            clause (ii) below) plus the number of such Additional Shares of
            Common Stock so issued.

                  (ii) For the purposes of clause (i), the number of shares of
            Common Stock outstanding immediately prior to such issue shall be
            calculated on a fully diluted basis, as if all Convertible
            Securities had been fully converted into shares of Common Stock
            immediately prior to such issuance and the Warrant and any other
            outstanding Options had been fully exercised immediately prior to
            such issuance (and any resulting Convertible Securities fully
            converted into Common Stock) as of such date.



                                      -7-

                  (iii) The applicable Exercise Price shall not be reduced at
            the time of any issuance of Additional Shares of Common Stock if the
            amount of such reduction would be an amount less than $0.01, but any
            such amount shall be carried forward and reduction with respect
            thereto shall be made at the time and together with any subsequent
            reduction which, together with such amount and any other amounts so
            carried forward, shall aggregate $0.01 or more.

            (e) Determination of Consideration. For purposes of paragraph (d),
      the consideration received by the Company for the issue of any Additional
      Shares of Common Stock shall be computed as follows:

                  (i) Cash and Property: Such consideration shall:

                        (A) insofar as it consists of cash, be computed at the
                  aggregate of cash received by the Company;

                        (B) insofar as it consists of property other than cash,
                  be computed at the fair market value thereof at the time of
                  such issue, as determined in good faith by the Board of
                  Directors; and

                        (C) in the event Additional Shares of Common Stock are
                  issued together with other shares or securities or other
                  assets of the Company for consideration which covers both, be
                  the proportion of such consideration so received, computed as
                  provided in clauses (A) and (B) above, as determined in good
                  faith by the Board of Directors.

                  (ii) Options and Convertible Securities. The consideration per
            share received by the Company for Additional Shares of Common Stock
            deemed to have been issued pursuant to paragraph (c), relating to
            Options and Convertible Securities, shall be determined by dividing:

                        (A) the total amount, if any, received or receivable by
                  the Company as consideration for the issue of such Options or
                  Convertible Securities, plus the minimum aggregate amount of
                  additional consideration (as set forth in the instruments
                  relating thereto, without regard to any provision contained
                  therein for a subsequent adjustment of such consideration)
                  payable to the Company upon the exercise of such Options or
                  the conversion or exchange of such Convertible Securities, or
                  in the case of Options for Convertible Securities, the
                  exercise of such Options for Convertible Securities and the
                  conversion or exchange of such Convertible Securities; by

                                      -8-

                                    (B) the maximum number of shares of Common
                           Stock (as set forth in the instrument relating
                           thereto, without regard to any provision contained
                           therein for a subsequent adjustment of such number)
                           issuable upon the exercise of such Options or the
                           conversion or exchange of such Convertible
                           Securities.

            (f) Certificate as to Adjustments. Upon the occurrence of each
      adjustment or readjustment of the Exercise Price pursuant to this Section
      7, the Company at its expense shall promptly compute such adjustment or
      readjustment in accordance with the terms hereof and furnish to the Holder
      a certificate setting forth such adjustment or readjustment and showing in
      detail the facts upon which such adjustment or readjustment is based. The
      Company shall, upon the written request at any time of the Holder, furnish
      or cause to be furnished to such holder a like certificate setting forth
      (i) such adjustments and readjustments, (ii) the Exercise Price at the
      time in effect, and (iii) the number of shares of Common Stock and the
      amount, if any, of other property which at the time would be received upon
      the exercise of the Warrant.

      8. No Rights as a Shareholder. This Warrant does not entitle the Holder to
any voting rights or other rights as a shareholder of the Company prior to
exercise of this Warrant and the payment for the Shares so purchased.
Notwithstanding the foregoing, the Company agrees to transmit to the Holder such
information, documents and reports as are generally distributed to holders of
the capital stock of the Company concurrently with the distribution thereof to
the shareholders. Upon valid exercise of this Warrant and payment for the Shares
so purchased in accordance with the terms of the Warrant, the Holder shall be
deemed a shareholder of the Company.

      9. Sale or Transfer of the Warrant; Legend. The Warrant and the Shares
shall not be sold or transferred unless either (i) they first shall have been
registered under the Act, or (ii) the Company first shall have been furnished
with an opinion of legal counsel reasonably satisfactory to the Company to the
effect that such sale or transfer is exempt from the registration requirements
of the Act. Each certificate representing any Warrant shall bear the legend set
out on page 1 hereof. Each certificate representing any Shares shall bear a
legend substantially in the following form, as appropriate:

            THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
            INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE
            OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED
            WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
            OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
            REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS
            AMENDED.

Such Warrant and Shares may be subject to additional restrictions on transfer
imposed under applicable state and federal securities law.

                                      -9-

      10. Put Right. Commencing on the earlier of December 31, 2004 and (ii) the
date upon which the Loans (as defined in the Credit Agreement) owed to Holder
and the other lenders party to the Credit Agreement have been paid in full in
cash or Cash equivalents and in each case (i) and (ii) prior to the Expiration
Date, the Holder shall have the right, exercised by the delivery of written
notice to the Company (a "Put Notice"), to require the Company to cancel the
unexercised portion of this Warrant, and all related rights in exchange for a
cash payment (the "Put Payment") equal to $0.23 per-share payable to the Holder
within ten (10) days of receipt by the Company of the Put Notice and the
original Warrant for cancellation.

      11. Call Option. At any time during the one year period following the
indefeasible payment in full in cash or cash equivalents of the Credit
Obligations, and prior to June 30, 2004, the Company shall have the right
exercised by the delivery of written notice to the Holder (a "Call Notice") to
cancel this Warrant and the purchase rights hereunder in exchange for a cash
payment (the "Call Payment") equal to $0.5288 per share, payable to the Holder
within five (5) days after delivery by the Company of the Call Notice, provided
however, that any payment made pursuant to this Section 11 may only be made out
of a New Financing Source. Notwithstanding anything to the contrary contained
herein, the Holder shall be entitled to exercise this Warrant in whole or in
part at any time after the receipt of the Call Notice until the receipt by the
Holder of the Call Payment. In the event that the Holder chooses to exercise all
or a portion of the Warrant after receipt of the Call Notice, the Company shall
have the option to rescind such Call Notice or to exercise its call option with
respect to that portion of the Warrant which remains unexercised through the
delivery of a pro rata portion of the Call Payment. The Company shall have the
right to exercise the call option set forth herein one time only.

      12. Modifications and Waivers. This Warrant may not be changed, waived,
discharged or terminated except by an instrument in writing signed by the party
against which enforcement of the same is sought.

      13. Notices. Any notice, request or other document required or permitted
to be given or delivered to the Holder or the Company shall be sufficiently
given or made if sent by registered or certified mail, postage prepaid,
addressed to the parties as provided below:

          If to Holder:     Banc of America Strategic Solutions, Inc.
                            335 Madison Avenue
                            NY1-503-0506
                            Attn: Bill Crawford, Managing Director



                                      -10-

          with a copy to:

                            Brown Rudnick Berlack Israels LLP
                            One Financial Center
                            Boston, MA  02111
                            Attn: William R. Baldiga, Esquire
                                  Mary D. Bucci, Esquire

          If to Company: Nextera Enterprises, Inc.
                            One Cambridge Center - 7th Floor
                            Cambridge, MA 02142
                            Attn: Michael P. Muldowney,
                                  Chief Financial Officer

          with a copy to: Maron & Sandler
                          1250 4th Street
                          Suite 550
                          Santa Monica, CA  90401
                          Attn: Stanley E. Maron, Esquire

      14. Loss, Theft, Destruction or Mutilation of Warrant. The Company
covenants with the Holder that upon its receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant or any stock certificate and, in the case of any such loss, theft
or destruction, of an indemnity or security reasonably satisfactory to it, and
upon reimbursement to the Company of all reasonable expenses incidental thereto,
and upon surrender and cancellation of this Warrant or stock certificate, if
mutilated, the Company will make and deliver a new Warrant or stock certificate,
of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or
stock certificate.

      15. Representations and Warranties of Holder. By accepting this Warrant,
the Holder represents and warrants that it is acquiring this Warrant and the
Shares for its own account, for investment and not with a view to, or for sale
in connection with, any distribution thereof or any part thereof. Holder
represents and warrants that it is (a) experienced in the evaluation of
businesses similar to the Company, (b) is able to fend for itself in the
transactions contemplated by this Warrant, (c) has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of an investment in the Company, (d) has the ability to bear the economic
risks of an investment in the Company, (e) has been furnished with or has had
access to such information as is specified in subparagraph (b)(2) of Rule 502
promulgated under the Act and (f) has been afforded the opportunity to ask
questions of and to receive answers from the Company and to obtain any
additional information necessary to make an informed investment decision with
respect to an investment in the Company. The Holder further represents that it
is an "accredited investor" as defined in Rule 501(a) of Regulation D under the
Act.

                                      -11-

      16. Representations and Warranties of Company. The Company represents
that:

                  (a) The execution and delivery of this Warrant has been duly
            authorized by the Company's Board of Directors and constitutes the
            legal, valid and binding obligation of the Company enforceable
            against the Company in accordance with its terms, except as
            enforcement thereof may be limited by bankruptcy, insolvency, or
            other laws affecting the enforcement of creditors' rights in general
            and except that the enforceability of the obligations hereunder is
            subject to general principals of equity (regardless of whether such
            enforceability is considered in a proceeding at equity or at law).
            Neither the execution nor the delivery of this Warrant, nor
            fulfillment of nor compliance with the terms and provisions of this
            Warrant, nor the issuance of Shares upon exercise of the Warrant,
            will violate the terms of the certificate of incorporation or
            by-laws of the Company or, to the best of the Company's knowledge,
            any agreement (including any agreement with stockholders),
            instrument, judgment, decree or statute to which the Company is
            subject.

                  (b) As of December 31, 2002, the authorized capital stock of
            the Company consisted of (i) 99,300,000 shares of Common Stock,
            $0.001 par value per share, 95,000,000 shares of which are
            designated as Class A Common Stock, of which 31,885,896 shares are
            issued and outstanding, and 4,300,000 shares of which are designated
            as Class B Common Stock, of which 3,869,570 shares are issued and
            outstanding, and (ii) 10,000,000 shares of Preferred Stock, $0.001
            par value per share 600,000 shares of which are designated as Series
            A Cumulative Convertible Preferred Stock, of which 39,544 shares are
            issued and outstanding.

                  (c) Except as set forth in subparagraph (b) above, and in
            registration statements filed by the Company under the Act or in any
            report filed by the Company under the Securities Exchange Act of
            1934, as amended, the Company has not authorized any rights (either
            preemptive or other) or options to subscribe for or purchase from
            the Company, or any warrants or other agreements providing for or
            requiring the issuance by the Company of, any capital stock or any
            securities convertible into or exchangeable for its capital stock.

                  (d) Sufficient shares of authorized but unissued shares of
            Common Stock of the Company have been reserved by appropriate
            corporate action with the prospective exercise of the Warrant, and,
            the issuance of either the Warrant or the shares of Common Stock
            upon exercise of the Warrant will not require any further corporate
            action by the stockholders or directors of the Company, will not be
            subject to preemptive rights (unless the exercise of the same has
            been irrevocably waived) in any present stockholders of the Company
            and will not conflict with any provision of any agreement to which
            the Company is a party or by which it is bound, and such Common
            Stock, when issued upon exercise of the Warrant in accordance with
            its terms, will be duly authorized, fully paid and non-assessable.

                                      -12-

      17. Registration Rights.

                  (a) Piggy Back Registration Rights. If (but without any
            obligation to do so) the Company shall determine to register (a
            "Company Registration") any of its securities for its own account or
            for any other person (other than a registration under the Act of
            shares issued in connection with any acquisition of any entity or
            business, shares issuable solely upon the exercise of stock options,
            or shares issuable solely pursuant to employee benefit plans or
            arrangements, including registration statements on Form S-4, S-8 or
            any successor form), the Company shall do the following:

                        (i) promptly give the Holder written notice thereof
                  (which shall include a list of the jurisdictions in which the
                  Company intends to attempt to register or qualify such
                  securities under the applicable blue sky or other state
                  securities laws); and

                        (ii) include among the securities which it then
                  registers or qualifies all Registrable Securities (as defined
                  below) specified in a written request or requests, made within
                  fifteen (15) days after receipt of the written notice from the
                  Company, by the Holder. The Holder shall have the right to
                  withdraw its request for inclusion of its Registrable
                  Securities in any registration statement by giving written
                  notice to the Company of its request to withdraw. The Company
                  may withdraw a Company Registration at any time prior to the
                  time it becomes effective whether or not the Holder has
                  elected to include Registrable Securities (as defined below)
                  in such registration. For purposes of this Warrant, the term
                  "Registrable Securities" shall mean all shares of Common Stock
                  issued and issuable upon exercise of the Warrant; provided
                  however, that shares of Common Stock which are "Registrable
                  Securities" shall cease to be Registrable Securities (a) upon
                  any sale pursuant to a registration statement under the Act,
                  Section 4(1) of the Act or Rule 144 promulgated under the Act
                  or (b) at such time as such shares of Common Stock are freely
                  saleable under Rule 144(k) promulgated under the Act (or a
                  successor provision).

                  (b) Limitations of Registration. If and to the extent that the
            Holder shall have, at the time of the delivery of the written
            request referred to in subparagraph (a) above, no present intention
            of selling or distribution, the Company shall be obligated to effect
            such registration, qualification or compliance with respect to the
            Holder's Registrable Securities only if and to the extent, in each
            case, that such registration, qualification and compliance are at
            the time permitted by the applicable statutes or rules and
            regulations thereunder or the practices of the governmental
            authority concerned.

                                      -13-

                  (c) Registration Procedures. In the case of each registration,
            qualification or compliance pursuant to this Section 17, the Company
            will keep the Holder advised in writing as to the initiation of
            proceedings for such registration, qualification and compliance and
            as to the completion thereof, and will advise the Holder, upon
            written request, of the progress of such proceedings. At the expense
            of the Company, the Company will (i) keep such registration,
            qualification and compliance current and effective for a period of
            the earlier of (A) 120 days, or (B) until the Holder has completed
            the distributions relating thereto, including, without limitation,
            the filing of post-effective amendments and supplements to any
            registration statement or prospectus, as necessary to permit the
            sale or distribution of Registrable Securities not theretofore sold
            or distributed, and (ii) take all necessary action under any
            applicable blue sky or other state securities laws to permit such
            exercise, sale or distribution, all as reasonably requested by such
            Holder; provided, however, that the Company shall not be required in
            connection therewith to qualify as a foreign corporation in any
            jurisdiction in which it is not now so qualified or to take any
            action that would subject it to general consent to service of
            process or taxation. The Company shall not be required to file,
            cause to become effective or maintain the effectiveness of any
            registration statement that contemplates a distribution of
            securities on a delayed or continuous basis pursuant to Rule 415
            under the Act.

                  (d) Registration Rights. Anything to the contrary in Section
            17 notwithstanding, in connection with any Company Registration, the
            Company shall not be required to include any of the Holder's
            Registrable Securities in such Company Registration unless the
            Holder accepts the terms of the underwriting as agreed upon between
            the Company and the underwriters selected by it (or by other persons
            entitled to select the underwriters), and then only in such quantity
            as the underwriters determine in their sole discretion will not
            jeopardize the success of the offering by the Company or will not
            adversely affect the aggregate proceeds to the Company from the
            offering. If the total amount of securities, including Registrable
            Securities and all other securities requested to be included in such
            offering by any stockholder of the Company, exceeds the amount of
            securities that the underwriters determine in their sole discretion
            is compatible with the success of the offering or the aggregate
            proceeds to the Company from the offering, then the number of Shares
            to be offered for the account of the Holder and all such other
            persons participating in such registration shall be reduced (to zero
            if necessary) or limited pro rata in proportion to the respective
            number of Shares requested to be registered by the Holder and each
            other person to reduce the total number of Shares requested to be
            included in such offering to the number of Shares, if any,
            recommended by such underwriters.



                                      -14-

                  (e) Indemnification. The Company will indemnify, defend and
            hold harmless the Holder to the fullest extent that such agreement
            is enforceable under applicable law against all claims, losses,
            damages and liabilities (or actions in respect thereof) arising out
            of or based on any untrue statement (or alleged untrue statement) of
            material fact contained therein (or in any related registration
            statement, notification or the like) or any omission (or alleged
            omission) to state therein a material fact required to be stated
            therein or necessary to make the statements therein not misleading,
            or any violation by the Company of any rule or regulation
            promulgated under the Act applicable to the Company and relating to
            action or inaction required of the Company in connection with any
            such registration, qualification or compliance, and will reimburse
            the Holder for any legal or any other expenses reasonably incurred
            in connection with investigating or defending any such claim, loss,
            damage, liability or action provided, however, that the Company will
            not be liable in any such case to the extent that any such claim,
            loss, damage or liability arises out of or is based on any untrue
            statement or omission based upon written information furnished to
            the Company by an instrument duly executed by the Holder and stated
            to be specifically for use therein.

                  (f) The Holder will indemnify, defend and hold harmless the
            Company to the fullest extent that such agreement is enforceable
            under applicable law against all claims, losses, damages and
            liabilities (or actions in respect thereof) arising out of or based
            on any untrue statement (or alleged untrue statement) of material
            fact contained therein (or in any related registration statement,
            notification or the like) or any omission (or alleged omission) to
            state therein a material fact required to be stated therein or
            necessary to make the statements therein not misleading, or any
            violation by the Holder of any rule or regulation promulgated under
            the Act applicable to the Holder and relating to action or inaction
            required of the Holder in connection with any such registration,
            qualification or compliance, and will reimburse the Company for any
            legal or any other expenses reasonably incurred in connection with
            investigating or defending any such claim, loss, damage, liability
            or action, in each case to the extent (and only to the extent) that
            such claims, losses, damages, liabilities and actions relate to
            reliance on any untrue statement or omission based upon written
            information furnished to the Company by an instrument duly executed
            by the Holder and stated to be specifically for use in the
            registration statement, provided, however, that such Holder's
            obligations hereunder shall be limited to an amount equal to the
            proceeds received by such Holder of the Registrable Securities sold
            in such registration.

                  (g) Notwithstanding the foregoing, to the extent that the
            provisions on indemnification contained in the underwriting
            agreement entered into in

                                      -15-

            connection with a Company Registration are in conflict with the
            provisions of this Section 17, the provisions in the underwriting
            agreement shall control.

      18. Binding Effect on Successors. This Warrant shall be binding upon any
corporation succeeding the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets, and all of the obligations of
the Company relating to the Shares issuable upon exercise of this Warrant shall
survive the exercise and termination of this Warrant and all of the covenants
and agreements of the Company shall inure to the benefit of the successors and
assigns of the Holder.

      19. Amendments. No approval, consent, amendment or waiver of this
Agreement shall be effective unless in writing and signed by the Company and
Holder.

      20. Counterparts. This Agreement may be executed in any number of
counterparts and each such counterpart shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute but one and the
same instrument.

      21. Governing Law. This Warrant shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the Commonwealth of Massachusetts.

      22. Entire Agreement. This Warrant constitutes the entire agreement among
the parties hereto pertaining to the subject matter hereof, and any and all
other written or oral agreements relating to the subject matter hereof existing
among any of the parties hereto are expressly cancelled, including, but not
limited to, the Prior Warrant.



                                      -16-

      IN WITNESS WHEREOF, the parties have caused this Warrant to be executed by
their duly authorized representatives as of the date first above written.

                                       NEXTERA ENTERPRISES, INC.,
                                       as Company


                                       By: /s/ Michael P. Muldowney
                                          --------------------------------------
                                          Michael P. Muldowney
                                          Chief Financial Officer


                                       BANC OF AMERICA STRATEGIC
                                       SOLUTIONS, INC.,
                                       as Lender and Holder


                                       By: /s/ Bill Crawford
                                          --------------------------------------
                                          Bill Crawford
                                          Managing Director






                                      -17-

                                    EXHIBIT A

                               NOTICE OF EXERCISE

To: NEXTERA ENTERPRISES, INC.

      1. The undersigned hereby elects to purchase _______ shares of Common
Stock of Nextera Enterprises, Inc. pursuant to the terms of the attached
Warrant, and tenders herewith payment of the purchase price of such shares in
full.

      2. Please issue a certificate or certificates representing said shares in
the name of the undersigned or in such other name or names as are specified
below.

      3. The undersigned represents that the aforesaid shares of Common Stock
are being acquired for the account of the undersigned for investment and not
with a view to, or for resale in connection with, the distribution thereof and
that the undersigned has no present intention of distributing or reselling such
shares. The undersigned further represents that such shares shall not be sold or
transferred unless either (1) they first shall have been registered under the
Securities Act of 1933, as amended, or (ii) the Company first shall have been
furnished with an opinion of legal counsel reasonably satisfactory to the
Company to the effect that such sale or transfer is exempt from the registration
requirement.

      4. In the event of partial exercise, please re-issue an appropriate
Warrant exercisable into the remaining shares.



                                       -------------------------------
                                       (Name)

                                       -------------------------------
                                       (Address)

                                       -------------------------------
                                       (Signature)

                                       -------------------------------
                                       (Date)


                                      -18-

EX-10.1

                                                                    EXHIBIT 10.1

                                                 EXECUTION COPY

                            NEXTERA ENTERPRISES, INC.

                     ---------------------------------------

                              ONE CAMBRIDGE CENTER
                               CAMBRIDGE, MA 02142


                                       As of July 17, 2003


Fleet National Bank
100 Federal Street
Boston, MA  02110
Attn:    Fred P. Lucy
         Vice President

Banc of America Strategic Solutions, Inc.
335 Madison Avenue
NY1-503-05-06
Attn:    Bill Crawford
         Managing Director

         RE:     SECOND AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT
                 AGREEMENT ("AMENDMENT")

Gentlemen:

         Reference hereby is made to that certain Second Amended and Restated
Credit Agreement dated as of December 31, 2002, as amended by that certain First
Amendment dated as of July 8, 2003 (as the same may be further amended,
restated, supplemented, or otherwise modified from time to time, the "Credit
Agreement"), by and among, on the one hand, Nextera Enterprises, Inc., a
Delaware corporation ("Company"), and certain of its subsidiaries (individually
and collectively, jointly and severally, the "Subsidiaries"), the lenders from
time to time party thereto (such lenders, together with their respective
successors and assigns, are referred to hereinafter individually as a "Lender"
and collectively as the "Lenders"), Fleet National Bank, a national banking
association, as administrative agent for the Lenders (in such capacity, together
with its successors in such capacity, the "Agent"). Capitalized terms used but
not otherwise defined herein shall have the meanings ascribed to them in the
Credit Agreement.

         Company has requested, among other things, that the Agent and Lenders
amend certain provisions contained in the Credit Agreement and the Agent and
Lenders are willing to do so on the terms and conditions set forth herein.

         NOW THEREFORE, in consideration of any Loans or advances or grant of
credit heretofore or hereafter made to or for the account of Company by Agent
and Lenders, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

         1. Recitals. Company acknowledges and agrees that the foregoing
recitals are true and accurate and are incorporated herein by reference.

         2. Amendments to Credit Agreement. Company, Agent and Lenders agree
that the Credit Agreement shall be amended as follows:

         (a) Section 1 to the Credit Agreement (Definitions; Certain Rules of
Construction) is hereby amended by inserting therein the following definitions
in the appropriate alphabetical order:

                  (i) "Second Amendment" means that certain Second Amendment to
Second Amended and Restated Credit Agreement by and among, Company,
Subsidiaries, Agent and Lenders and the other parties thereto.

         (b) Section 1 to the Credit Agreement (Definitions; Certain Rules of
Construction) is hereby amended by deleting the following definitions in their
entirety and replacing them with the following:

                  (i) "Junior Credit Participation Agreement" means the Amended
and Restated Junior Credit Participation Agreement dated as of July 17, 2003
among Knowledge Universe, Agent and Lenders.

         (c) Section 10.5.1 of the Credit Agreement (Leverage Ratio) is hereby
deleted in its entirety and replaced with the following:

         "10.5.1 Leverage Ratio. The Company shall not permit for any period set
forth below (measured as of the last day of each fiscal quarter of the Company),
the ratio of (a) Consolidated Total Senior Debt (measured as of the last day of
each fiscal quarter of the Company) to (b) Consolidated EBITDA to be more than
the ratio corresponding to such period in the table set forth below. For
purposes of the Leverage Ratio, the calculation of Consolidated EBITDA shall be
based on Consolidated EBITDA for the immediately preceding twelve (12) months
ended as of the last day of such quarter. In addition, for purposes of the
Leverage Ratio, the calculations and ratios set forth below shall not be
impacted by up to $2,500,000 of new loans made to the Company in connection with
the Junior Credit Participation Agreement, and all of such new loans shall be
excluded from the calculations and ratios for the Leverage Ratio in all
respects.



   PERIOD ENDING               LEVERAGE RATIO
   -------------               --------------
                            
   September 30, 2003          10.90:1.00
   December 31, 2003           52.00:1.00
   March 31, 2004              17.40:1.00
   June 30, 2004               7.50:1.00"


                                      -2-

         (d) Section 10.5.2 of he Credit Agreement (Current Ratio) is hereby
deleted in its entirety and replaced with the following:

         "10.5.2 Current Ratio. The ratio of Consolidated Current Assets to
Consolidated Current Liabilities (measured on the last day of each fiscal
quarter of the Company) shall not at any time be less than the ratio
corresponding to such period in the table set forth below. In addition, for
purposes of the Current Ratio, the calculations and ratios set forth below shall
not be impacted by up to $2,500,000 of new loans made to the Company in
connection with the Junior Credit Participation Agreement, and all of such new
loans shall be excluded from the calculations and ratios for the Current Ratio
in all respects.



   FISCAL QUARTER ENDED           RATIO
   --------------------           -----
                               
   September 30, 2003             1.05:1.00
   December 31, 2003              1.05:1.00
   March 31, 2004                 0.23:1.00*
   June 30, 2004                  0.24:1.00*


         *The ratios set forth for the periods ending March 31, 2004 and June
30, 2004 assume that the Credit Obligations owing to the Lenders are carried as
current liabilities on the balance sheet of the Company and its Subsidiaries at
such date determined in accordance with GAAP on a Consolidated basis. In the
event that the foregoing obligations are not carried as current liabilities on
the balance sheet of the Company and its Subsidiaries at such date determined in
accordance with GAAP on a Consolidated basis, then the ratios for such periods
shall be adjusted accordingly."

         (e) Section 10.5.3 of the Credit Agreement (Total Debt Service Ratio)
is hereby deleted in its entirety and replaced with the following:

         "10.5.3 Total Debt Service Ratio. The ratio of (a) Consolidated EBITDA
minus actual cash payments made or accrued on account of taxes and Capital
Expenditures (measured on the last day of each fiscal quarter of the Company) to
(b) Consolidated Total Debt Service (excluding the Cambridge Acquisition Note)
shall not at any time be less than the ratios corresponding to such period in
the table set forth below. In addition, for purposes of the Total Debt Service
Ratio, the calculations and ratios set forth below shall not be impacted by up
to $2,500,000 of new loans made to the Company in connection with the Junior
Credit Participation Agreement, and all of such new loans shall be excluded from
the calculations and ratios for the Total Debt Service Ratio in all respects.



             FISCAL QUARTER ENDED               TOTAL DEBT SERVICE RATIO
             --------------------               ------------------------
                                             
   September 30, 2003                           .20:1.00
   June 30, 2004                                .25:1.00"


         (f) A new Section 10.5.5 (Minimum Consolidated EBITDA) is hereby added
to the Credit Agreement in the appropriate order as follows:

                                      -3-

         "10.5.5 Minimum Consolidated EBITDA. Minimum Consolidated EBITDA
(defined below) shall not at any time be less than the applicable amount
corresponding to such period in the table set forth below.



   APPLICABLE AMOUNT         MEASUREMENT DATE AND APPLICABLE PERIOD
   -----------------         --------------------------------------
                          
   $530,000                  December 31, 2003, for the last twelve month period
                             then ended

   $1,580,000                March 31, 2004, for the last twelve month period then
                             ended


For purposes of this Section 10.5.5 the new term "Minimum Consolidated EBITDA"
shall mean for any period, the total of:

         (a) Consolidated Net Income;

         plus (b) all amounts deducted in computing such Consolidated Net Income
in respect of:

                  (i)      depreciation and amortization and other non-recurring
                           non-cash charges, but excluding all Special
                           Compensation and Other Charges (defined below),

                  (ii)     interest expense, and

                  (iii)    taxes based upon or measured by net income,

         minus (c) all cash payments (excluding $2,675,000 for the Company's
fiscal year ended December 31, 2002 and $720,000 for the Company's fiscal year
ended December 31, 2003) made during such period on account of real estate
restructuring transactions, reductions in force and facilities, and unfavorable
equipment leases from discontinued operations;

         minus (d) all amounts included in Consolidated Net Income in respect of
deferred income tax benefits and other non-cash income items.

         For purposes of this Section 10.5.5 "Special Compensation and Other
Charges" shall mean special charges from time to time incurred or paid by the
Company or its Subsidiaries in connection with the Lexecon Employment
Agreements, and which: (i) shall not be treated as an expense in respect of
non-cash charges or amortization; (ii) shall not impact amortization in any way;
and (iii) (notwithstanding their exclusion from the definition of Minimum
Consolidated EBITDA) shall be in an amount equal to $1,000,000 in each quarter
of 2004.

         In addition, Company and its Subsidiaries acknowledge and agree that
amortization of the Lexecon Employee Agreements may not for any purpose be
greater than or less than the following amounts on the following dates:
$1,941,000 on March 31, 2003, $1,941,000 June 30,

                                      -4-

2003, $2,499,000 on September 30, 2003, $2,499,000 on December 31, 2003 and $0
on the last day of each quarter period thereafter.

         (g) Exhibit 11.1.1. of the Credit Agreement (Organization and Business)
is hereby deleted in its entirety and replaced with Amended and Restated Exhibit
11.1.1 (Organization and Business) attached hereto.

         (h) Exhibit 11.1.2. of the Credit Agreement (U.S. Subsidiaries) is
hereby deleted in its entirety and replaced with Amended and Restated Exhibit
11.1.2. (U.S. Subsidiaries) attached hereto.

         (i) Section 12.1.3(a) of the Credit Agreement (Lexecon Employees) is
hereby deleted in its entirety and replaced with the following:

         "12.1.3(a) Lexecon Employees. The Company shall fail to timely satisfy
         any of its obligations under the Lexecon Employment Agreements,
         including without limitation, its obligations pursuant to Section 2(c)
         of each such agreement to deposit $10,000,000 (to total $20,000,000 in
         the aggregate) in immediately available funds on or before January 15,
         2004 into accounts at banks or investment firms designated by Dennis
         Carlton and Daniel Fischel, as applicable."

         (j) Section 18 of the Credit Agreement (Notices) is hereby deleted in
its entirety and replaced with the following:

         "18. Notices. Except as otherwise specified in this Agreement or any
other Credit Document, any notice required to be given pursuant to this
Agreement or any other Credit Document shall be given in writing. Any notice,
consent, approval, demand or other communication in connection with this
Agreement or any other Credit Document shall be deemed to be given if given in
writing (including telex, telecopy or similar teletransmission) addressed as
provided below (or to the addressee at such other address as the addressee shall
have specified by notice actually received by the addressor), and if either (a)
actually delivered in fully legible form to such address (evidenced in the case
of a telex by receipt of the correct answerback) or (b) in the case of a letter,
unless actual receipt of the notice is required by any Credit Document five (5)
days shall have elapsed after the same shall have been deposited in the United
States mails, with first class postage prepaid and registered or certified.

         If to the Company or any of its Subsidiaries, to it at its address set
forth in Exhibit 11.1.1, as amended from time to time (and as further
supplemented pursuant to Sections 10.4.1 and 10.4.2), to the attention of the
chief financial officer.

         If to any Lender or the Agent, to it at its address set forth below or
in the Register, with a copy to the Agent.

                                      -5-

         If to Agent and/or Fleet:

         Fleet National Bank
         100 Federal Street
         Boston, MA  02110
         Attn:    Fred P. Lucy, Vice President
         Telecopy: (617) 434-4775

         With a copy to:

         Brown Rudnick Berlack Israels LLP
         One Financial Center
         Boston, MA 02111
         Attn:    William R. Baldiga, Esquire
                  Mary D. Bucci, Esquire
         Telecopy: (617) 856-8201

         If to Banc of America Strategic Solutions, Inc.:

         Banc of America Strategic Solutions, Inc.
         335 Madison Avenue
         NY1-503-05-06
         Attn:    Bill Crawford, Managing Director
         Telecopy: (212) 503-7080"

         3. Bonus Account Matters.

         (a) Initial Borrowing; Repayment. In accordance with Section 8.2(b)
(New Bonus Account) of the Credit Agreement, the Company shall be permitted to
use up to $568,000 of the funds held in the New Bonus Account for its immediate
cash needs on account of payroll and payroll taxes (which borrowing shall
constitute one of the four (4) borrowings permitted prior to the Maturity Date);
provided, however, that notwithstanding the requirement in Section 8.2(b) that
the Company shall replenish any and all of the New Bonus Account Funds so
borrowed in full in cash within thirty (30) days, the Company shall be permitted
on a one time basis to repay such funds on or before November 17, 2003. The
Agent's and Lenders' decision to permit repayment on November 17, 2003 is a
courtesy to the Company and does not reflect the Agent's and Lenders' intention,
or a commitment by the Agent and Lenders, to honor any such repayment extension
request in the future. Under the Credit Agreement, the Agent and Lenders are not
obligated to honor such repayment extension requests and do not intend to honor
any such requests in the future, unless the Agent and Lenders elect to do so in
their sole and absolute discretion. The Company's failure to replenish the New
Bonus Account funds in full in cash on or before November 17, 2003 shall
constitute an Event of Default under this Amendment, the Credit Agreement and
the Credit Documents.

                                      -6-

         (b) Payments. Notwithstanding anything contained in Section 8.2(b) (New
Bonus Account) of the Credit Agreement or in any other provision of the Credit
Agreement or Credit Documents, the Company shall fund cash in an amount equal to
the Agreed Percentage (as defined in the Credit Agreement) of all employee
bonuses which are earned but unpaid on account of periods ended (i) July 2003,
August 2003 and September 2003, in each case on or before September 17, 2003;
and (ii) October 2003, November 2003 and December 2003, in each case on or
before December 17, 2003 (except any accrued bonuses not subject to this Section
or Section 8.2 of the Credit Agreement, as designated in their discretion by the
Agent and the Lenders in writing), which funds shall disbursed by the Company
only to fund such bonuses, and thereafter the Company shall deposit additional
cash into the New Bonus Account if additional bonuses are earned and/or accrued
and not immediately paid in accordance with Section 8.2 of the Credit Agreement.

         4. Consent to Second Amendment Junior Credit Participation Agreement.
In accordance with Section 15.2 of the Credit Agreement, each of the Company and
its Subsidiaries acknowledges that (i) on or before the date of this Amendment,
the Lenders shall sell a junior credit participation in the Term Loan to
Knowledge Universe in an aggregate amount of $7,500,000 ($5,000,000 previously
was paid and $2,500,000 shall be paid on the date hereof); (ii) Company's and
its Subsidiaries' consent to the sale of a junior credit participation is not
required under the Credit Agreement; and (iii) the Lenders' sale of the junior
credit participation in the Term Loan shall not affect their obligations for
repayment of the entire unpaid balance of the Credit Obligations (including, but
not limited to, any portion thereof in respect to which the junior credit
participation has been issued) in accordance with the terms of this Agreement or
any Credit Document and that the respective priorities, rights, obligations and
privileges of the Lenders and New Lender vis-a-vis each other shall be governed
by the Amended and Restated Junior Credit Participation Agreement attached
hereto as Exhibit 7(iv) (described below).

         5. Waiver Fee. The Company acknowledges and agrees that, as partial
consideration for the Agent's and Lenders' agreements and commitments hereunder,
the Company shall pay to the Agent, for distribution to each Lender (except for
Knowledge Universe, who waives any and all rights to such waiver fee in all
respects) in accordance with such Lender's proportionate share of the principal
amount of all outstanding Loans, a waiver fee in the amount of $187,500, which
fee shall be immediately earned in its entirety on the date hereof and paid in
cash or Cash Equivalents by the Company to the Agent by 2:00 p.m. on the dates
and in the amounts set forth in the table below:



PAYMENT DATE             PAYMENT AMOUNT
- ------------             --------------
                      
August 15, 2003          $31,250, which installment shall be waived if the Loans
                         have been repaid in full in Cash Equivalents on or
                         before such date.

November 15, 2003        $31,250, which installment shall be waived if the Loans
                         have been repaid in full in Cash Equivalents on or
                         before such date.


                                      -7-

                      
February 15, 2004        $31,250, which installment shall be waived if the Loans
                         have been repaid in full in Cash Equivalents on or
                         before such date.

May 16, 2004             $31,250, which installment shall be waived if the Loans
                         have been repaid in full in Cash Equivalents on or
                         before such date.

August 15, 2004          $31,250, which installment shall be waived if the Loans
                         have been repaid in full in Cash Equivalents on or
                         before such date.

November 15, 2004        $31,250, which installment shall be waived if the Loans
                         have been repaid in full in Cash Equivalents on or
                         before such date.



         6. Waiver of Events of Default. Subject to satisfaction of the
conditions precedent set forth in Section 6 below, Agent and Lenders hereby
waive the Events of Default set forth on Schedule D-1 hereto (the "Specified
Events of Default"). The waiver herein is limited to the specifics hereof, shall
not excuse future non-compliance with the Credit Agreement, and, except as
expressly set forth herein, shall not operate as a waiver or an amendment of any
right, power, or remedy of Agent and Lenders, nor as a consent to or waiver of
any further or other matter, under the Credit Agreement or Credit Documents. The
Agent and Lenders expressly reserve all rights and remedies available to them as
a result of non-Specified Defaults or Events of Default.

         7. Conditions Precedent. Agent's and Lenders' obligations to enter into
this Amendment and perform their respective obligations hereunder are subject to
the condition precedent that the Agent and Lenders shall have received the
following documents and other items, satisfactory to Agent and Lenders in their
sole discretion, duly executed where appropriate by authorized representatives
of Company and its Subsidiaries:

         (a) Documentation. Agent and Lenders shall have received, in form and
substance satisfactory to Agent and Lenders and their counsel, a duly executed
copy of the following:

         (i) this Amendment.

         (ii) evidence satisfactory to Agent and Lenders that the execution,
delivery and performance of this Amendment have been duly authorized by all
necessary corporate action.

         (iii) Second Amended and Restated Warrants in favor of the Lenders as
to (a) Warrant Nos. 6 and 7 to purchase an aggregate of 1,418,351 shares of the
Company's Class A Common Stock at an exercise price of $0.86 per share, as
amended and restated substantially in the form of Exhibits 7(iii)(a)(i)-(ii)
attached hereto; and (b) Warrant Nos. 8 and 9 to purchase an aggregate of
400,000 shares of the Company's Common Stock at an exercise price of $0.60 per
share, substantially in the form of Exhibits 7(iii)(b)(i)-(ii) attached hereto.

                                       -8-

         (iv) each of Knowledge Universe, Agent and Lenders shall have duly
authorized, executed and delivered a junior, last out participation by Knowledge
Universe, Inc. in the Term Loan in an amount of not less than $7,500,000 (as
described more fully in Section 4) in substantially the form of Exhibit 7(iv)
hereto, and Knowledge Universe shall have purchased and fully paid for such
participation.

         (v) such additional documents, instruments and certificates as the
Agent and Lenders and their counsel shall reasonably require in connection
therewith, all in form and substance satisfactory to the Agent and Lenders and
their counsel.

         (b) Payments. Payment of all accrued but unpaid interest and all
accrued but unreimbursed expenses, fees and other charges incurred by Lenders
through the closing date, including, without limitation, attorneys' fees and
expenses.

         (c) No Default. No Default or Event of Default shall exist, except as
previously disclosed and consented to by the Agent and Lenders.

         (d) No Litigation. Except as set forth on Schedule A hereto and
consented to by the Agent and Lenders, there is not litigation, arbitration,
proceeding or investigation pending, or to the knowledge of the Company's or its
Subsidiaries' officers, threatened against Company or any of its Subsidiaries
that, if adversely determined would result in a material judgment not fully
covered by insurance or that would otherwise have a material adverse effect on
the assets, business or prospects of Company of any of its Subsidiaries.

         8. Conditions Subsequent. In addition to the foregoing, the Company
hereby agrees that it shall deliver to Agent an amendment to that certain
Irrevocable Letter of Credit dated April 16, 2001, as amended through the date
of this Amendment (to update the reference to Agent's mail stop number) on or
before August 18, 2003. A failure to timely satisfy the condition contained in
this Section 8 shall immediately constitute an Event of Default under the Credit
Documents.

         9. Acknowledgment of Credit Obligations. Company hereby acknowledges
and agrees that it is unconditionally liable to Agent and Lenders for the full
and immediate payment of each of the Credit Obligations under the Credit
Obligations and Credit Documents, including, without limitation, the
"Obligations" set forth on Schedule B attached hereto and incorporated herein by
reference, plus all charges, fees, costs and expenses that may arise under the
Credit Agreement and Credit Documents, plus all attorneys' fees, disbursements
and costs of collection incurred in connection with such Credit Obligations by
Agent and Lenders and that Company does not have any defenses, counterclaims or
set-offs with respect to the full and immediate payment and performance of any
or all obligations under the Credit Agreement, Credit Document or the Credit
Obligations.

         10. Enforceability of Obligations; Acknowledgment of Events of Default.
Company agrees that (i) the Credit Agreement and Credit Documents are in full
force and effect, and enforceable against Company in accordance with their
respective terms; (ii) the existing Events of Default under the Credit Agreement
and Credit Documents constitute material defaults under the Credit Documents;
(iii) any notices that might be given and any grace periods or cure periods
which must expire, prior to Agent and Lenders exercising any of their rights and
remedies in

                                      -9-

connection with the Credit Agreement or Credit Documents, have been given,
complied with and expired and, in any event, are hereby waived and relinquished
by Company; and (iv) Agent and Lenders have not waived or relinquished and by
executing this Amendment Agent and Lenders shall not be deemed to have waived or
relinquished any of their rights or remedies under the Credit Agreement or
Credit Documents, all of which rights and remedies are in full force and effect,
are fully available to Agent and Lenders, and are expressly reserved by Agent
and Lenders.

         11. Representations and Warranties. Company makes the following
representations and warranties:

         (a) Authority. Company and its Subsidiaries are duly organized, validly
existing and in good standing under the laws of their organization and in each
jurisdiction where Company or its Subsidiaries are required to be qualified to
do business. Company and its Subsidiaries are duly authorized to enter into, and
perform its obligations under this Amendment and the agreements, instruments and
documents contemplated hereby. The execution, delivery and performance by
Company and its Subsidiaries of this Amendment will not violate Company's or it
Subsidiaries' charters, partnership agreements, or operating agreements, any law
or any provision thereof, nor (except under the Credit Agreement and Credit
Documents) are there any grounds for acceleration under, any agreement, note, or
instrument which is binding upon Company or its Subsidiaries.

         (b) No Misrepresentations. Without limiting any rights or remedies
Agent and Lenders may have under law or equity, Company agrees that all
statements and information provided by Company to Agent and Lenders pursuant to,
or in connection with, this Amendment or the negotiations leading to this
Amendment, have been and are true, complete and correct in all material
respects, and none of such items contain any omissions of any fact or matter
necessary to keep the statements and information therein from being misleading.

         12. Release of Claims. In consideration for Agent and Lenders entering
into this Amendment, Company and its Subsidiaries hereby release and forever
discharge Agent and Lenders, and their respective successors, assigns, agents,
shareholders, directors, officers, employees, agents, attorneys, parent
corporations, subsidiary corporations, affiliated corporations, affiliates, and
each of them, from any and all claims, debts, demands, obligations, costs,
expenses, actions and causes of action, of every nature and description, known
and unknown, whether or not related to the subject matter of this Amendment,
which Company or its Subsidiaries now has or at any time may have held, by
reason of any matter, cause or thing occurred, done, omitted or suffered to be
done prior to the date of this Amendment. Company and its Subsidiaries waive the
benefits of any law, which may provide in substance: "A general release does not
extend to claims which the creditor does not know or suspect to exist in his
favor at the time of executing the release, which if known by him must have
materially affected his settlement with the debtor." Company and its
Subsidiaries understand that the facts which they believe to be true at the time
of making the release provided for herein may later turn out to be different
than they now believe, and that information which is not known or suspected may
later be discovered. Company and its Subsidiaries accept this possibility, and
Company and its Subsidiaries assume the risk of the facts turning out to be
different and new information being discovered; and Company and its Subsidiaries
further agree that the release provided for herein shall in all respects
continue to be effective and not subject to termination or rescission because

                                      -10-

of any difference in such facts or any new information. This release is fully
effective on the date of execution hereof. Agent and Lenders are not releasing
Company or its Subsidiaries from any claims, debts, Credit Obligations,
obligations, guarantees, demands, costs, expenses, actions or causes of action.

         13. General Provisions.

         (a) Integration; Amendment; Waivers. This Amendment, the Credit
Agreement and Credit Documents set forth in full all of the terms of the
agreement between the parties and are intended as the full, complete and
exclusive contract governing the relationship between the parties, superceding
all other discussions, promises, representations, warranties, agreements and the
understandings between the parties with respect thereto. No term of this
Amendment or the Credit Agreement or Credit Documents may be modified or
amended, nor may any rights thereunder be waived, except in a writing signed by
the party against whom enforcement of the modification, amendment or waiver is
sought. Any waiver of any condition in, or breach of, any of the foregoing in a
particular instance shall not operate as a waiver of other or subsequent
conditions or breaches of the same or a different kind. Agent's and Lenders'
exercise or failure to exercise any rights under any of the foregoing in a
particular instance shall not operate as a waiver of its right to exercise the
same or different rights in subsequent instances. Except as expressly provided
to the contrary in this Amendment, or in another written agreement, all the
terms, conditions, and provisions of the Credit Agreement and Credit Documents
shall continue in full force and effect. This Amendment shall constitute a
Credit Document.

         (b) Payment of Expenses. Without limiting the terms of the Credit
Agreement or Credit Documents, Company or its Subsidiaries shall pay all costs
and expenses incurred by or on behalf of Agent and Lenders (including, without
limitation, reasonable attorneys' fees and expenses and costs of collection)
arising under or in connection with this Amendment or the Credit Agreement or
the Credit Documents, including, without limitation, in connection with (i) the
negotiation, preparation, execution and delivery of this Amendment and the
Credit Documents, and any and all consents, waivers or other documents or
instruments relating thereto; (ii) the filing and recording of any other
documents or instruments of further assurances filed or recorded in connection
with the Credit Agreement or any Credit Document; (iii) any other action
required in the course of administration hereof, including, but not limited to
all fees and expenses arising out of any audits, appraisals, inspections; and
(iv) the defense or enforcement of the Credit Agreement and Credit Documents,
whether or not there is any litigation between the parties. All costs and
expenses shall be added to the Credit Obligations, as Agent and Lenders shall
determine, and shall earn interest at the highest rate provided for under the
Credit Agreement and Credit Documents.

         (c) No Third Party Beneficiaries. This Amendment does not create, and
shall not be construed as creating, any rights enforceable by any person not a
party to this Amendment.

         (d) Severability. If any provision of this Amendment is held by a court
of competent jurisdiction to be invalid, illegal or unenforceable, the remaining
provisions of this Amendment shall nevertheless remain in full force and effect.

                                      -11-

         (e) Counterparts; Telecopy Execution. This Amendment may be executed in
any number of counterparts and by different parties on separate counterparts,
each of which, when executed and delivered, shall be deemed to be an original,
and all of which, when taken together, shall constitute but one and the same
Amendment. Delivery of an executed counterpart of this Amendment by telecopy
shall be equally as effective as delivery of an original executed counterpart of
this Amendment. Any party delivering an executed counterpart of this Amendment
by telecopy also shall deliver an original executed counterpart of this
Amendment but the failure to deliver an original executed counterpart shall not
affect the validity, enforceability, and binding effect of this Amendment. The
foregoing shall apply to each other Credit Document mutatis mutandis.

         (f) Time of Essence. Time is of the essence in each of the obligations
of Company and its Subsidiaries and with respect to all conditions to be
satisfied by Company and its Subsidiaries.

         (g) Construction; Voluntary Agreement. This Amendment has been prepared
through the joint efforts of all of the parties. Neither its provisions nor any
alleged ambiguity shall be interpreted or resolved against any party on the
ground that such party's counsel was the drafter of this Amendment. Each of the
parties declares that such party has carefully read this Amendment and the
agreements, documents and instruments being entered into in connection herewith
and that such party knows the contents hereof and has signed this Amendment
freely and voluntarily. The parties hereto acknowledge that they have been
represented in negotiations for and preparation of this Amendment and the
agreements, documents and instruments being entered into in connection herewith
by counsel of their own choosing, and that each of them has read the Amendment
and had its contents fully explained by such counsel and is fully aware of its
contents and legal effect.

         (h) Governing Law; Forum Selection. This Amendment has been entered
into and shall be governed by the laws of the Commonwealth of Massachusetts. As
a material part of the consideration to the parties for entering into this
Amendment, each party (i) agrees that, at the option of Lender, all actions and
proceedings based upon, arising out of or relating in any way directly or
indirectly to, this Amendment, the Credit Agreement, or the Credit Documents,
shall be litigated exclusively in federal or state courts located in Suffolk
County, Massachusetts; (ii) consents to the jurisdiction of any such courts and
consent to the service of process in any such action or proceeding (whether or
not litigated in courts located in Suffolk County, Massachusetts) by personal
delivery or any other method permitted by law; and (iii) waives any and all
rights to transfer or change the venue of any such action or proceeding to any
court located outside Suffolk County, Massachusetts.

         (i) Further Assurances. Company and its Subsidiaries agree, at their
costs and expense, to take all further actions, execute all further documents,
agreement or instruments and obtain such additional consents and approvals as
Agent and Lenders may from time to time request, in their discretion, with
respect to the purposes, terms, and conditions of this Amendment and the Credit
Agreement and Credit Documents and the consummation of the transactions
contemplated by this Amendment.

                                      -12-

         (j) Notices. All notices, requests and demands to or upon the parties
hereto shall be given in accordance with the Credit Agreement, as amended by
this Amendment.

         (k) Acknowledgment of Guarantors. Each Guarantor, for value received,
hereby assents to the Company's execution and delivery of this Amendment, and
the performance by Company of its agreements and obligations hereunder. This
Amendment and the performance or consummation of any transaction that may be
contemplated under this Amendment, shall not limit, restrict, extinguish or
otherwise impair any Guarantor's liabilities and obligations to Agent and
Lenders under its respective Guaranty and Security Agreement. Each Guarantor
acknowledges and agrees that (i) its respective Guaranty and Security Agreement
remains in full force and effect and is fully enforceable against such Guarantor
in accordance with its terms; and (ii) it has no offsets, claims or defenses to
or in connection with its obligations under its respective Guaranty and Security
Agreement, all of which offsets, claims and/or defenses are hereby waived.

         (l) Acknowledgement of Junior Creditor. Junior Creditor, for value
received, hereby assents to the Company's execution and delivery of this
Amendment, and the performance by Company of its agreements and obligations
hereunder. This Amendment and the performance or consummation of any transaction
that may be contemplated under this Amendment, shall not limit, restrict,
extinguish or otherwise impair Junior Creditor's liabilities and obligations to
Agent and Lender under the Subordination Agreement. Junior Creditor acknowledges
and agrees that (i) its Subordination Agreement remains in full force and effect
and is fully enforceable against Junior Creditor in accordance with its terms;
and (ii) it has no offsets, claims or defenses to or in connection with its
obligations under its respective Subordination Agreement, all of which offsets,
claims and/or defenses are hereby waived.

                            [SIGNATURE PAGES FOLLOW]

                                      -13-

Executed under seal on the date set forth above.

                            COMPANY:

                            NEXTERA ENTERPRISES, INC.
                            One Cambridge Center
                            Cambridge, MA  02142
                            Telecopy:  (617) 715-0201


                            By: /s/ Michael P. Muldowney
                               ______________________________
                               Name:  Michael P. Muldowney
                               Title: Chief Financial Officer


                            SUBSIDIARIES AND GUARANTORS:

                            CE ACQUISITION CORP.
                            ERG ACQUISITION CORP.
                            LEXECON INC.
                            NETNEXT, INC.
                            NEXTERA BUSINESS PERFORMANCE SOLUTIONS GROUP, INC.
                            NEXTERA INTERACTIVE, INC.
                            SCANADA, INC.
                            NEXTERA & COMPANY, LLC
                            NEXTERA INTERNATIONAL, LLC

                            By: /s/ Michael P. Muldowney
                               ______________________________
                               Name:  Michael P. Muldowney
                               Title: Officer

                           As an authorized officer of each of the foregoing
                           corporations or limited liability companies.

                                      -14-

                           AGENT AND LENDER:

                           FLEET NATIONAL BANK


                           By: /s/ Fred P. Lucy
                              -------------------------
                                Name:    Fred P. Lucy
                                Title:   Vice President

                           FLEET NATIONAL BANK
                           100 Federal Street
                           MA DE 1006A
                           Boston, Massachusetts 02110
                           Telecopy: (617) 434-4775

                                      -15-

                           LENDER:

                           BANC OF AMERICA STRATEGIC
                           SOLUTIONS, INC.

                           By: /s/ Bill Crawford
                              ____________________________
                              Name:   Bill Crawford
                              Title:  Managing Director


                           BANC OF AMERICA STRATEGIC
                           SOLUTIONS, INC.
                           335 Madison Avenue
                           NY1-503-05-06
                           New York, NY  10017-4605
                           Telecopy: (212) 503-7080

                                      -16-

                           TERMS AND CONDITIONS
                           ACKNOWLEDGED, AGREED AND
                           CONSENTED TO:

                           AS JUNIOR CREDITOR, GUARANTOR AND OBLIGOR:

                           KNOWLEDGE UNIVERSE, INC.


                           By: /s/ Stanley E. Maron
                               --------------------------------
                               Name: Stanley E. Maron
                               Title:   Secretary

                           Address:    Maron & Sandler
                                       Attn: Stan Maron
                                       1250 4th Street
                                       Suite 550
                                       Santa Monica, CA 90401

                                      -17-

                                   SCHEDULE A

                                  (Litigation)

Attached.

                                      -18-

                                   SCHEDULE B

                                  (Obligations)

                     (Unpaid Principal as of July 16, 2003)*

                                         
Revolving Credit Loans:                     $3,000,000

Term Loans:                                 $22,600,320.68

Letters of Credit:                          $0



*plus (i) any monies loaned to the Company under the Credit Agreement in
connection with any junior credit participation agreement(s); and (ii) all
accrued and accruing interest, costs, fees, attorneys' fees and disbursements
and other charges as provided under the Credit Agreement and/or Credit
Documents.

                                      -19-

                                  SCHEDULE D-1
                          (Specified Events of Default)

         1. Leverage Ratio. Company failed to maintain a ratio of (a)
Consolidated Total Senior Debt to (b) Consolidated EBITDA of less than 3.75:1.00
for the period ending June 30, 2003, in violation of Section 10.5.1 of the
Credit Agreement.

         2. Current Ratio. Company failed to maintain a ratio of Consolidated
Current Assets to Consolidated Current Liabilities of at least 1.3:1.00 for the
period ending June 30, 2003, in violation of Section 10.5.2 of the Credit
Agreement.

                                      -20-

                                 EXHIBIT 11.1.1.
                           (Organization and Business)

Attached.

                                      -21-

                                 EXHIBIT 11.1.2
                               (U.S. Subsidiaries)

Attached.

                                      -22-

                            EXHIBIT 7(iii)(a)(i)-(ii)
               (Second Amendment and Restated Warrants - 6 and 7)

Attached.

                                      -23-

                            EXHIBIT 7(iii)(b)(i)-(ii)
               (Second Amendment and Restated Warrants - 8 and 9)

Attached.

                                      -24-

                                  EXHIBIT 7(iv)
                     (Junior Credit Participation Agreement)

Attached.

                                      -25-

EX-10.2

                                                                    EXHIBIT 10.2

                                                                  EXECUTION COPY

                                  July 17, 2003

Fleet National Bank
100 Federal Street
Boston, MA  02110
Attn:    Fred P. Lucy
         Vice President

Banc of America Strategic Solutions, Inc.
335 Madison Avenue
NY1-503-05-06
Attn:   Bill Crawford
         Managing Director

      RE:   AMENDED AND RESTATED JUNIOR CREDIT PARTICIPATION AGREEMENT

Gentlemen:

      Reference is made to the Second Amended and Restated Credit Agreement
between, on one hand, Nextera Enterprises, Inc., a Delaware corporation (the
"Company"), and on the other hand, Fleet National Bank, as agent ("Agent") for
itself and the other lenders party thereto (the "Lenders"), dated as of December
31, 2002, as amended by that certain First Amendment dated as of July 8, 2003
and that certain Second Amendment dated the date hereof (as the same may be
further amended, restated, supplemented, or otherwise modified from time to
time, the "Credit Agreement"), together with any other agreements, supplements,
documents and instruments relating thereto or executed in connection therewith,
all as from time to time amended and supplemented (collectively, the "Credit
Documents").

      The undersigned, Knowledge Universe, Inc., a Delaware corporation with an
address at 1250 4th Street, Suite 550, Santa Monica, California 90401 ("Junior
Credit Participant"), has requested that Agent and Lenders sell to Junior Credit
Participant a Junior Credit Participation (as hereinafter defined) in the
advances, loans and other financial accommodations presently outstanding and
which may hereafter be extended by Agent and Lenders to Company, pursuant to the
Credit Documents and all other indebtedness now or hereafter owed by Company to
Agent and Lenders in connection therewith or otherwise, and Agent and Lenders
have agreed to do so, all on the terms and conditions hereinafter set forth.

      Junior Credit Participant previously purchased a $5,000,000 Junior Credit
Participation pursuant to that certain Junior Credit Participation Agreement
dated as of December 31, 2002 (the "Prior Credit Participation Agreement") and
wishes to purchase an additional junior participation in the amount of
$2,500,000. Junior Credit Participant requests that the Prior Junior

Credit Participation Agreement bet deemed of no further force and effect, and be
replaced, in all respects, by this Amended and Restated Junior Credit
Participation Agreement.

      In consideration of these premises, the mutual covenants herein contained
and for other valuable consideration, Junior Credit Participant hereby agrees
with Agent and Lenders as follows:

      1.    Certain Defined Terms.

            (a)   "Obligations" as used in this Agreement shall mean and
                  include, without limitation, the advances, loans and other
                  financial accommodations and all other obligations and
                  liabilities now or hereafter owed by Company to Agent and
                  Lenders under the Credit Documents or otherwise, whether
                  direct or indirect and whether fixed or contingent, and shall
                  also include interest or charges accruing after the filing of
                  a bankruptcy petition or similar proceeding, whether or not
                  such interest or charges are recoverable from the Company.

            (b)   "Paid in Full", "Payment in Full", "Repaid in Full", or
                  "Repayment in Full" or any similar terms when used in
                  connection with the Obligations shall mean the final
                  indefeasible payment in full of such Obligations in cash or
                  immediately available funds and termination of all lending
                  commitments or, in the case of Obligations consisting of
                  contingent obligations in respect of letters of credit,
                  bankers' acceptances or other reimbursement or payment type
                  guaranties under the Credit Documents, the setting apart of
                  cash sufficient to discharge such portion of the Obligations
                  in an account for the exclusive benefit of the holders
                  thereof, in which such holders shall be granted a first
                  priority perfected security interest which shall have been
                  retained by Agent and Lenders, in each case, for a period of
                  time in excess of all applicable preference or other similar
                  periods under the U.S. Bankruptcy Code and other applicable
                  insolvency laws, state or Federal.

            (c)   "Permitted Cash Payment Conditions" shall mean, as to each
                  particular Permitted Cash Payment, each of the following:

                  (i)   immediately before and after giving effect to any
                        Permitted Cash Payment there is no Default or Event of
                        Default which has occurred and is continuing under any
                        Credit Document;

                  (ii)  for any period, such Permitted Cash Payment shall be
                        payable no sooner than the day that the subject funds
                        are received by the Agent in immediately available funds
                        (or, if later, the day that such funds become
                        immediately available) and shall be paid promptly after
                        the Lenders' receipt of any and all payments of
                        principal and interest owing to them for the same
                        period;



                                      -2-

                  (iii) the Company shall have delivered to the Lenders a
                        written certificate (together with independent written
                        evidence) signed by the Chief Financial Officer of the
                        Company which certifies that the Company is in
                        compliance with the Investment Banking Benchmarks set
                        forth in Section 5.3 of the Credit Agreement and due to
                        be completed on or before the scheduled date of such
                        Permitted Cash Payment; and

                  (iv)  the Company shall be in compliance with all financial
                        and other covenants and provisions to be performed or
                        observed by it under any Credit Document immediately
                        before and after giving effect to any such Permitted
                        Cash Payment.

            (d)   Other Terms. Capitalized terms not otherwise defined herein
                  shall have the respective meanings assigned to them in the
                  Credit Documents.


      2. Sale and Purchase of Junior Credit Participation. Junior Credit
Participant hereby agrees to purchase, and does hereby purchase, from Agent and
Lenders and Agent and Lenders hereby agree to sell, and do hereby sell, to
Junior Credit Participant an undivided Junior Credit Participation of Seven
Million Five Hundred Thousand Dollars ($7,500,000) Dollars (the "Junior Credit
Participation") in the Obligations and in the property, security interests
and/or guarantees received by Agent and Lenders as security for the Obligations
(the "Collateral"), and in all moneys received by Agent and Lenders on account
of the Obligations and/or as proceeds of the Collateral (the "Collections"),
except as hereinafter provided. Receipt of the purchase price of the Junior
Credit Participation is acknowledged by Agent and Lenders. ($5,000,000
previously was paid and $2,500,000 has been paid on the date hereof). Agent and
Lenders have provided to Junior Credit Participant a Participation Certificate
in the form attached hereto as Exhibit A.

      3. Application of Proceeds. Agent and Lenders may apply all or any part of
the proceeds of the Collateral, payments received from Company and credits for
Company's account to all or any part of the Obligations and in such order as
Agent and Lenders may elect in Agent's and Lenders' sole and absolute
discretion, except that unless an Event of Default has occurred under the Credit
Agreement or any Credit Document, Agent and Lenders shall not amend Section 5.3
of the Credit Agreement (dealing with distributions upon the occurrence of one
or more Transactions (as defined in the Credit Agreement)) without the prior
written consent of the Junior Credit Participant. Specifically, and without
limitation of the foregoing, Junior Credit Participant acknowledges that Agent
and Lenders may, and intend to, apply the proceeds of the Collateral, in the
event of a liquidation or other disposition of the Collateral after the
occurrence of an Event of Default under the Credit Agreement or any Credit
Document, first to the portion of the Loans not sold to Junior Credit
Participant; accordingly, the effect of this Agreement is to subordinate Junior
Credit Participant's interests in the Obligations to Agent's and Lenders'
interests in all of the Obligations upon the occurrence of an Event of Default,
and Junior Credit Participant acknowledges and agrees to the same.



                                      -3-

      4. Freedom of Dealing. It is understood and agreed by Junior Credit
Participant that, in Agent's and Lenders' sole and absolute discretion, Agent
and Lenders may continue to extend additional advances, loans and other
financial accommodations to Company, including, without limitation, after
default and/or commencement and during the continuation of any case under the
U.S. Bankruptcy Code with respect to Company ("Post-Petition Advances") and the
Junior Credit Participation shall be subject and subordinate to such
Post-Petition Advances and in the security therefor on the same terms and
conditions as are set forth herein.

      5. Reservation of Rights. Agent and Lenders shall have the sole right to
manage, perform, modify, restructure, extend, supplement and enforce the Credit
Documents, Obligations and the Collateral, and to waive, discharge, exercise and
enforce all privileges, rights and remedies exercisable or enforceable by Agent
and Lenders thereunder, for the joint benefit of Agent and Lenders and Junior
Credit Participant, in accordance with Agent's and Lenders' sole and absolute
discretion and the exercise of Agent's and Lenders' business judgment, and
without charge to Junior Credit Participant for any costs or expenses incurred
by Agent and Lenders in connection therewith; provided, however, that Junior
Credit Participant shall pay its pro rata share of any out-of-pocket expenses
(including, without limitation, the fees and expenses of Agent's and Lenders'
counsel) of recovery, defense and enforcement of the Obligations and the
Collateral which exceeds the amount recovered from Company or from the
Collateral or otherwise for Company's account ONLY if as to such expenses any of
the following conditions apply: (A) such expenses may be satisfied out of
Collateral liquidations, payments or other recoveries later received (or
reserved for such purpose) on the Obligations in accordance with Section 3
above, or (B) such expenses were incurred at Junior Credit Participant's
request, or (C) such expenses were incurred on account of any action or threat
of action, or breach of any obligation to the Agent or the Lenders with respect
to the Obligations or the Credit Documents, by Junior Credit Participant or any
affiliate or representative thereof. Agent and Lenders will use normal prudence
and business judgment in handling the collection and enforcement of the
Obligations and realization upon the Collateral, but shall not be liable to
Junior Credit Participant for any action taken or omitted to be taken in good
faith or on the written advice of counsel. With respect to any actions or
inaction taken by Agent and Lenders in good faith or on the written advice of
counsel, Junior Credit Participant expressly releases Agent and Lenders from any
and all liability and responsibility (express or implied), for any loss,
depreciation of or delay in collecting or failing to realize on any Collateral,
the Obligations or any guaranties therefor and for any mistake, omission or
error in judgment in passing upon or accepting any Collateral or in making
examinations or audits or for granting indulgences or extensions to Company, any
account debtor or any guarantor. Junior Credit Participant hereby pledges,
assigns and grants to Agent and Lenders any right it may have to seek recovery
on account of the Junior Credit Participation, including, without limitation,
any right to commence litigation, vote to accept or reject a Chapter 11 plan or
to otherwise vote on or direct any part of any bankruptcy case or any similar
proceeding affecting the Obligations.

      6. No Representations or Warranties. Agent and Lenders make no
representation or warranty (express or implied) and shall have no
responsibility, as to the validity, value, enforceability or collectibility of
the Obligations or the Credit Documents, or as to the title to, validity,
priority, value, perfection or sufficiency of the Collateral, or any other
guarantees or collateral of any kind, or as to the financial condition of
Company or any account debtors. Junior


                                      -4-

Credit Participant is thoroughly familiar with and has complete and current
information concerning the financial condition and creditworthiness of Company.

      7. Independent Credit Decision. Junior Credit Participant acknowledges
that it has received and reviewed copies of all of the Credit Documents. Agent
and Lenders may, from time to time, in Agent's and Lenders' discretion and
without notice to or consent of Junior Credit Participant, amend, modify, renew
and/or release in whole or in part the Obligations, the Credit Documents, the
Collateral and any guaranties therefor, as well as extend advances, loans and
other financial accommodations to Company in excess of any formulas under the
Credit Documents, without notice to or the consent of Junior Credit Participant.
Agent and Lenders shall, from time to time, furnish Junior Credit Participant
with copies of such other papers and documents relating to the Obligations and
the Collateral and with statements describing the status of the Obligations and
the Collateral, as Junior Credit Participant may reasonably request, but it is
expressly agreed that Junior Credit Participant shall have no access and no
right to review, examine, or audit Agent's and Lenders' books, records, and
accounts relating to the Obligations or the Company, except for copies of the
Credit Documents as the Junior Credit Participant may request.

      8. Distributions. Interest shall accrue from the date hereof on the
outstanding principal on the Junior Credit Participation at a rate equal to ten
percent (10%) per annum, compounded monthly, based on the calendar year, but in
no case shall the interest rate exceed the maximum rate allowed by law. The
Company may make and the Junior Credit Participant may receive and retain on a
current cash basis payments of accrued interest and principal repayment on the
Junior Credit Participation (the "Permitted Cash Payments") in accordance with
the terms and conditions of this Amended and Restated Junior Credit
Participation Agreement, so long as the Permitted Cash Payment Conditions are
and shall continue to be satisfied. Such Permitted Cash Payments shall be in an
amount equal to the accrued, scheduled, mandatory cash payments of principal and
interest on the Junior Credit Participation in accordance with the terms and
conditions of this Amended and Restated Junior Credit Participation Agreement,
including, without limitation, subordination terms; provided, however, that
Permitted Cash Payments on account of (i) principal, shall not exceed $73,529
per month at any time, except that in addition to such amount, the Company shall
also be permitted to make the following principal payments on the following
dates, provided that the Permitted Cash Payment Conditions are and continue to
be satisfied on each such payment date: $500,000 on October 31, 2003, $500,000
on December 31, 2003 and $1,500,000 on January 1, 2005; and (ii) interest, for
any period, shall not exceed interest at an annual rate in excess of the rate of
interest actually paid to the Lenders for the same period (without respect to
the rate of interest charged after the occurrence of a Default or Event of
Default under the Credit Documents); and provided, further, that interest at a
greater rate may PIK for later payment in cash after all of the Loans owing to
the Agent and Lenders have been Repaid in Full in cash. The Company shall not be
entitled to make-up payments that are disallowed as a result of this Section 8;
rather, any such disallowed payment shall be paid directly to the Lenders as a
permanent additional prepayment of the then-outstanding Loans in such manner and
order as Agent and Lenders deem appropriate in their sole and absolute
discretion. Notwithstanding the foregoing, after termination of the Credit
Documents and Payment in Full to Agent and Lenders of Agent's and Lenders' share
and the shares of Agent's and Lenders' other senior participants in all
principal and interest on the Obligations and the other items chargeable


                                      -5-

to Company's account and due to Agent and Lenders (including, without
limitation, attorneys' fees and legal expenses), Agent and Lenders remit to
Junior Credit Participant any monies or other payment actually received by them
that remain following such Payment in Full on the Obligations.

      9.    Subordinated Status.


            (a)   Junior Credit Participant's Junior Credit Participation in the
                  Obligations, the Collateral and the Collections is in all
                  respects junior and subordinate to Agent's and Lenders'
                  interests and those of Agent's and Lenders' other senior
                  participants (if any) therein, and accordingly Agent and
                  Lenders and such other senior participants shall first be
                  Repaid in Full all of Agent's and Lenders' respective shares
                  in the Obligations (including, without limitation,
                  indebtedness of Company to Agent and Lenders, Post-Petition
                  Advances and all charges, commissions, interest, costs,
                  expenses and attorney's fees chargeable to Company in
                  connection with the Obligations or the Collateral) prior to
                  any repayment of all or any part of the Junior Credit
                  Participation (except only for Permitted Cash Payments on
                  Junior Credit Participant's interest in the Obligations, as
                  provided above).

            (b)   All Collections received shall be applied first to the payment
                  of all costs and expenses incurred in effecting such
                  Collections (including, without limitation, any costs,
                  expenses, attorneys' fees and charges relating to the
                  Obligations, Collateral and Collections), then to the unpaid
                  balance of all Obligations, in such amount and/or order as
                  Agent and Lenders elect in Agent's and Lenders' sole and
                  absolute discretion, such Collections to be first retained and
                  applied by Agent and Lenders until Repayment in Full of the
                  principal of and interest on Agent's and Lenders' share and
                  the shares of Agent's and Lenders' other senior participants
                  in all such Obligations (except only for Permitted Cash
                  Payments on Junior Credit Participant's interest in the
                  Obligations, as provided above) and, except to the extent any
                  order of any court provides otherwise, after termination of
                  the Credit Documents, any surplus to be remitted to Junior
                  Credit Participant.

            (c)   The Obligations, the Collateral and the Collections thereon
                  shall be held by Agent and Lenders in Agent's and Lenders' own
                  name, but, to the extent of Junior Credit Participant's junior
                  interest therein, as agent and trustee for Junior Credit
                  Participant and subject to Junior Credit Participant's rights
                  with respect thereto as herein set forth. Agent and Lenders do
                  not assume, have made no warranties and shall not have (except
                  only for the contractual obligations specifically set forth
                  herein) any fiduciary obligations or duties or other liability
                  to Junior Credit Participant for the repayment of the Junior
                  Credit Participation or any interest equivalent thereon.



                                      -6-

            (d)   The Junior Credit Participation may not be re-sold,
                  sub-participated, assigned, pledged or otherwise disposed of
                  by Junior Credit Participant. Junior Credit Participant hereby
                  represents and warrants that no portion of the proceeds of the
                  Obligations has been advanced to or for the account of Junior
                  Credit Participant by Company, that no portion of Junior
                  Credit Participant's payment to Agent and Lenders for the
                  Junior Credit Participation represents, directly or
                  indirectly, any proceeds of the Obligations and that this
                  Agreement is valid, binding and enforceable with respect to
                  Junior Credit Participant.

      10. Assigned Interests. Upon Payment in Full of principal, interest and
charges with respect to Agent's and Lenders' interest and of Agent's and
Lenders' other senior participants in the Obligations and termination of the
Credit Documents, Agent and Lenders agree to assign to Junior Credit Participant
all Collateral for the Obligations and Agent's and Lenders' rights with respect
thereto without representations, warranties or recourse of any kind or nature
whatsoever.

      11. Administrative Charges. Notwithstanding anything to the contrary
contained in this Agreement, Junior Credit Participant shall not share in and
Agent and Lenders shall retain as Agent's and Lenders' sole property and for
Agent's and Lenders' exclusive benefit all interest charges, commissions and
fees and administrative, handling and service charges with respect to the
Obligations and the Collateral (except only for Permitted Cash Payments on
Junior Credit Participant's interest in the Obligations, as provided above).

      12. Waiver of Jury Trial. JUNIOR CREDIT PARTICIPANT, AGENT AND LENDERS
EACH HEREBY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
IN CONNECTION WITH THIS AMENDED AND RESTATED JUNIOR CREDIT PARTICIPATION
AGREEMENT AND FURTHER HEREBY WAIVES ANY RIGHT OF OFFSET OR RIGHT TO INTERPOSE
ANY COUNTERCLAIM IN ANY SUCH ACTION. EACH OF THE PARTIES HERETO EXPRESSLY
SUBMITS IN ADVANCE TO THE NONEXCLUSIVE JURISDICTION OF THE SUPERIOR COURT OF
SUFFOLK COUNTY IN THE COMMONWEALTH OF MASSACHUSETTS AND THE UNITED STATES
DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS IN ANY ACTION OR PROCEEDING
RELATING TO ANY CLAIM, DISPUTE OR OTHER MATTER PERTAINING DIRECTLY OR INDIRECTLY
TO THIS AMENDED AND RESTATED JUNIOR CREDIT PARTICIPATION AGREEMENT.

      13. Notices. All notices hereunder by Agent and Lenders to Junior Credit
Participant shall be deemed given if addressed to Junior Credit Participant, at
its address set forth above and sent by registered or certified mail, return
receipt requested, or sent by telex or telecopy. All notices hereunder by Junior
Credit Participant to Agent and Lenders shall be deemed given if addressed to
Agent and Lenders at Agent's and Lenders' address set forth above and directed
to the attention of Fred P. Lucy, Vice President, and delivered by certified or
registered mail, return receipt requested, or by telex or telecopy.



                                      -7-

      14. Headings. The Section headings in this Amended and Restated Junior
Credit Participation Agreement are for convenience of reference only and shall
not be deemed to alter or affect the meaning or interpretation of any of the
provisions hereof.


      15. Severability. If any provision of this Amended and Restated Junior
Credit Participation Agreement shall for any reason be held to be held to be
invalid or unenforceable, such invalidity or unenforceability shall not affect
any other provision hereof, but this Amended and Restated Junior Credit
Participation Agreement shall be construed as if such invalid or unenforceable
provision had never been contained herein.

      16. Effective Date. This Amended and Restated Junior Credit Participation
Agreement shall be effective upon the receipt by Agent of a counterpart hereof
execution by or on behalf of Lenders, Junior Credit Participant and Company.


      17. Amendments. This Amended and Restated Junior Credit Participation
Agreement (a) may not be amended, modified or terminated orally or by any course
of dealing, except an agreement in writing signed by Agent and Lenders and
Junior Credit Participant, (b) shall remain in full force and effect until all
Obligations and Post-Petition Advances are Paid in Full and the Credit Documents
are terminated, unless, prior thereto, Agent and Lenders, in Agent's and
Lenders' discretion, determine to repurchase the Junior Credit Participation,
(c) shall be binding upon and inure to the benefit of the respective legal
representatives, executors, heirs, administrators, successors and assigns of the
parties hereto and shall be governed by and interpreted in accordance with the
laws of the Commonwealth of Massachusetts, and (d) may be executed in
counterparts, all of which shall constitute a complete agreement.

      IN WITNESS WHEREOF, Junior Credit Participant has executed this instrument
under seal as of this 17th day of July, 2003.

                                             KNOWLEDGE UNIVERSE, INC.,
                                             as Junior Credit Participant

                                             By: /s/ Stanley E. Maron
                                                --------------------------
                                                   Name:  Stanley E. Maron
                                                   Title: Secretary



                                      -8-

ACCEPTED AND AGREED TO:

FLEET NATIONAL BANK

By:    /s/ Fred P. Lucy
       ----------------------------------------------
       Name:  Fred P. Lucy
       Title: Vice President



                                      -9-

BANC OF AMERICA  STRATEGIC SOLUTIONS, INC.

By:    /s/ Bill Crawford
       ----------------------------------------------
       Name:  Bill Crawford
       Title: Managing Director



                                      -10-

CONSENTED TO:

NEXTERA ENTERPRISES, INC.



By:    /s/ Michael P. Muldowney
       ----------------------------------------------
       Name:  Michael P. Muldowney
       Title: Chief Financial Officer



                                      -11-

                                    EXHIBIT A

                            Participation Certificate

Date: July 17, 2003

Amount of Certificate: $7,500,000


            Fleet National Bank ("Agent") hereby certifies that Knowledge
            Universe, Inc. ("Junior Credit Participant"), pursuant to the terms
            and subject to the conditions of an Amended and Restated Junior
            Credit Participation Agreement dated as of July 17, 2003 between
            Agent, Lenders (as defined in such Amended and Restated Junior
            Credit Participation Agreement) and Junior Credit Participant, has
            purchased an undivided junior participation interest in the Term
            Loan (as defined in such Amended and Restated Junior Credit
            Participation Agreement) in the above-referenced amount.

THIS CERTIFICATE AMENDS, RESTATES AND REPLACES IN ITS ENTIRETY THE PARTICIPATION
CERTIFICATE ISSUED IN CONNECTION WITH THE PRIOR CREDIT PARTICIPATION AGREEMENT
("PRIOR PARTICIPATION CERTIFICATE"), WHICH PRIOR PARTICIPATION CERTIFICATE IS
DEEMED OF NO FURTHER FORCE AND EFFECT.

THIS CERTIFICATE IS NOT TRANSFERABLE except as provided in the above referenced
Amended and Restated Junior Credit Participation Agreement.

                                    FLEET NATIONAL BANK, as Agent for itself and
                                    the other Lenders

                                    By: /s/ Fred P. Lucy
                                       -----------------------------------------
                                         Fred P. Lucy, Vice President


                                      -12-

EX-99.1

                                                                               .
                                                                               .
                                                                               .

                                                                    EXHIBIT 99.1

[NEXTERA LETTERHEAD]

                                                   
                                                      FOR IMMEDIATE RELEASE
Contacts:
Michael Muldowney                                     Jonathan Gasthalter/Kristin Celauro
Chief Financial Officer and Chief Operating Officer   Citigate Sard Verbinnen
Nextera Enterprises                                   (212) 687-8080
(617) 715-0200



                    NEXTERA ANNOUNCES SECOND QUARTER RESULTS

CAMBRIDGE, MA - JULY 31, 2003 - Nextera Enterprises, Inc. (NASDAQ: NXRA), which
consists of Lexecon, one of the world's leading economics consulting firms,
today reported results for the second quarter ended June 30, 2003.

In the 2003 second quarter, Nextera recorded a loss of $0.07 per share. The loss
includes the amortization expense of non-compete agreements with certain key
service providers of $0.06 per share. Nextera recorded a loss of $0.09 per share
in the first quarter 2003, which included charges of $0.06 per share associated
with the resignation of the Company's former Chief Executive Officer and the
amortization expense of non-compete agreements with certain key service
providers of $0.06 per share.

Revenues for the second quarter were $16.8 million, versus $18.8 million in the
first quarter 2003. The decline in revenue is attributable to normal business
turnover, coupled with several recent engagements that have yet to reach full
capacity. Net revenues for the second quarter 2003 were below Lexecon's second
quarter 2002 net revenues of $18.2 million.

Net loss for the second quarter was $2.3 million, versus a net loss of $3.1
million in the first quarter 2003. Included in the second quarter net loss was
the amortization expense of $1.9 million for non-compete agreements with key
service providers. The first quarter of 2003 included a charge of $1.9 million
associated with the resignation of the Company's former Chief Executive Officer
and the amortization expense of $1.9 million for non-compete agreements with
certain key service providers.

Operating loss in the second quarter was $0.2 million, down from the first
quarter 2003 operating loss of $1.0 million. Nextera did not record a federal
income tax benefit in the second quarter of 2003.

Earnings before interest, taxes, depreciation and amortization (EBITDA), which
includes approximately $1.0 million of corporate costs at the holding company
level, was $2.1 million for the second quarter. Although EBITDA is not a
measure of financial condition or performance determined in accordance the
Generally Accepted Accounting Principles, the Company believes the use of
EBITDA as a supplemental financial measure is meaningful to investors in
assessing the company's debt leverage and its ability to service such debt.

Lexecon's annualized revenue per professional in the second quarter was
$505,000, up from $504,000 per professional in the first quarter of 2003.
Lexecon utilization in the second quarter was 66%, down from 67% in the first
quarter of 2003. Days sales outstanding (DSO) at the end of the 2003 second
quarter was 115 days, consistent with the DSO at the end of the 2003 first
quarter.

Nextera had $30.4 million outstanding under its senior credit facility at the
end of the second quarter, down from $32.2 million at the end of the first
quarter 2003. In the second quarter, the Company made approximately $1.8 million
of payments from cash flow from operations to reduce its debt obligations under
the senior credit facility. Cash flows from operations in the second quarter


                              [NEXTERA LETTERHEAD]

were $3.7 million. At the end of the quarter, Nextera had $1.4 million of
unrestricted cash on hand.

At the end of the second quarter, Nextera exercised its option to extend the
covenants not to compete from July 15, 2003 to January 15, 2004 with key service
providers, Dan Fischel and Dennis Carlton. In conjunction with the payments made
to Messsrs. Fischel and Carlton to exercise this option, Knowledge Universe,
Inc. advanced the Company $2.5 million through its junior participation in the
senior credit facility.

Recent client engagement highlights for Lexecon include:

      -     Providing expert testimony on behalf of a client requesting approval
            from the Federal Energy Regulatory Commission (FERC) for
            transportation capacity on developing deepwater pipeline systems in
            the Gulf of Mexico, which the FERC approved;

      -     Providing expert testimony in an antitrust price-fixing case on
            behalf of salmon processors and seafood importers operating in
            Alaska, resulting in a favorable settlement for the salmon
            processors and seafood importers over the plantiffs who sought over
            $1 billion in damages; and

      -     Testifying before a joint Federal Trade Commission and Department of
            Justice commission on Health Care and Competition Law and Policy.

Additionally, in the second quarter, the Third Circuit Court of Appeals upheld a
lower court decision that American Airlines did not engage in predatory pricing
following the entry of low-fare carriers on the Dallas-Fort Worth routes, based
largely on expert economics testimony by Lexecon consultants.

CONFERENCE CALL

Nextera will host a conference call today, July 31, at 11:00 a.m. Eastern Time
to discuss its first quarter results. Analysts and investors can access the
conference call by dialing 1-888-280-4443. Individuals and media can also access
the call through the Internet from the Nextera website at www.nextera.com.

For those unable to participate in the call, a rebroadcast will be made
available from July 31, 2:00 p.m. Eastern Time through August 7, 5:00 p.m.
Eastern Time. In order to listen to the rebroadcast, dial 1-888-203-1112 and
enter reservation number 744884 or go to www.nextera.com.

ABOUT NEXTERA ENTERPRISES

Nextera Enterprises Inc., through its wholly owned subsidiary, Lexecon, provides
a broad range of economic analysis, litigation support, and regulatory and
business consulting services. One of the nation's leading economics consulting
firms, Lexecon assists its corporate, law firm and government clients reach
decisions and defend positions with rigorous, objective and independent
examinations of complex business issues that often possess regulatory
implications. Lexecon has offices in Cambridge and Chicago. More information can
be found at www.nextera.com and www.lexecon.com.

                                       2

                              [NEXTERA LETTERHEAD]


This press release contains forward-looking statements (as such term is defined
in the Private Securities Litigation Reform Act of 1995) relating to Nextera
Enterprises that are based on the beliefs of Nextera's management. Any
statements contained in this press release that are not historical facts are
forward-looking statements. Such statements are based on many important factors
that may be outside of Nextera's control, causing actual results to differ
materially from those suggested. Such factors include, but are not limited to
Nextera's dependence on key personnel, attracting and retaining qualified
consultants, the need to obtain additional capital to extend employment and
non-compete agreements, high levels of debt, potential inability to comply with
loan covenants, possible Nasdaq Small Cap Market delisting, availability of
credit and capital resources, new business solicitation efforts, intense
competition and effects of economic uncertainty on client expenditures. Further
information on these and other potential factors that could affect Nextera's
financial and operating results are included in Nextera's 10-Q filed on May 12,
2003 with the Securities and Exchange Commission.

                                      # # #


                                       3

                            NEXTERA ENTERPRISES, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                (amounts in thousands, except per share amounts)



                                                                 Three Months Ended                   Six Months Ended
                                                                 ------------------                   ----------------
                                                          June 30, 2003     June 30, 2002     June 30, 2003     June 30, 2002 (2)
                                                          -------------     -------------     -------------     -----------------
                                                           (unaudited)                         (unaudited)
                                                                                                    
Net revenues                                               $ 16,816          $ 18,166          $ 35,573          $39,015
Cost of revenues                                             10,964            11,122            22,843           23,577
                                                           --------          --------          --------          -------
   Gross profit                                               5,852             7,044            12,730           15,438
Selling, general and administrative expenses                  4,117             3,820             8,145            8,997
Amortization expense                                          1,941                --             3,882               --
Special Charges (1)                                              --              (740)            1,921             (740)
                                                           -------           --------          --------          -------
   Income (loss) from operations                               (206)            3,964            (1,218)           7,181
Interest expense, net                                        (2,064)           (1,554)           (4,075)          (2,993)
Other expense                                                   (48)               --               (48)              --
                                                           --------          --------          --------          -------
   Income (loss) before provision for income taxes           (2,318)            2,410            (5,341)           4,188
Provision for income taxes                                       21                50                61              100
                                                           --------          --------          --------          -------
   Net income (loss)                                       $ (2,339)         $  2,360          $ (5,402)         $ 4,088
Preferred stock dividends                                       (70)             (407)             (144)            (802)
                                                           --------          --------          --------          -------
  Net income (loss) applicable to common stockholders      $ (2,409)         $  1,953          $ (5,546)         $ 3,286
                                                           ========          ========          ========          =======

Net income (loss) per common share, basic                  ($  0.07)         $   0.05          ($  0.16)         $  0.09

Net income (loss) per common share, diluted                ($  0.07)         $   0.04          ($  0.16)         $  0.06

Weighted average common shares outstanding, basic            33,870            35,756            33,954           35,705

Weighted average common shares outstanding, diluted          33,870            64,777            33,954           64,486


- -------------
(1)   Special charges in 2003 consist of $0.8 million of salary continuance
      costs and $1.1 million of a non-cash compensation charge due to the
      acceleration of stock options associated with the former Chief Executive
      Officer's employment agreement. Special charges in 2002 relate to the
      reversal of restructuring reserves due to the favorable settlement of real
      estate obligations.

(2)   The 2002 amounts include the operating results of the human capital
      consulting business which was exited in January 2002. Net revenues from
      the human capital business in January 2002 was $1.9 million and its
      operating loss was $0.4 million.

Reconciliation of Non-GAAP Financial Measure(3)



                                                      Three Months Ended       Six Months Ended
                                                        June 30, 2003            June 30, 2003
                                                      ==================       ===============
                                                                        
EBITDA excluding special charges reconciliation:
  Reported income (loss) from operations (GAAP)            $   (206)              $    (1,218)
  Depreciation                                                  323                       609
  Amortization                                                1,941                     3,882
  Special charges(1)                                              -                     1,921
                                                           --------               -----------
EBITDA excluding special charges reconciliation:           $  2,058               $     5,194
                                                           ========               ===========


(3) EBITDA (earnings before interest, taxes, depreciation, and amortization)
excluding special charges is a non-GAAP financial measure defined as income
(loss) from operations before depreciation, amortization and special charges.
The Company believes that the EBITDA excluding special charges non-GAAP measure
is meaningful to investors in assessing the company's debt leverage and its
ability to service such debt.
This Non-GAAP measure should be considered in addition to, and not as a
substitute for, other financial measures prepared in accordance with GAAP.


                                       4




                            NEXTERA ENTERPRISES, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS

                          (Dollar amounts in thousands)




                                                        June 30, 2003  December 31, 2002
                                                        -------------  -----------------
                                                         (unaudited)
                                                                 
ASSETS
CURRENT ASSETS:
Cash and cash equivalents                                $     1,428      $     1,606
Restricted cash                                                  569            2,650
Accounts receivable, net                                      21,745           20,344
Other current assets                                             979            1,076
                                                         -----------      -----------
   Total current assets                                       24,721           25,676
Intangible assets, net                                        77,504           77,504
Other assets                                                   4,038            4,038
                                                         -----------      -----------
   Total assets                                          $   106,263      $   107,218
                                                         ===========      ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable and accrued expenses                    $    13,154      $    14,019
Accrued restructuring costs, current portion                     982            1,037
Senior credit facility                                         4,735            4,735
Other current liabilities                                        461              689
                                                         -----------      -----------
   Total current liabilities                                  19,332           20,480

Senior credit facility                                        25,645           22,465
Debentures due to affiliates                                  50,266           47,748
Accrued restructuring costs, net of current portion               --              427
Other long-term liabilities                                    3,957            4,191

Total stockholders' equity                                     7,063           11,907
                                                         -----------      -----------
Total liabilities and stockholders' equity               $   106,263      $   107,218
                                                         ===========      ===========



                                       5