Exhibit 99.10
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (the "Agreement"), dated as of December 12,
2001, by and among Essex Corporation, a Virginia corporation, with headquarters
located at 0000 Xxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000 (the "Company"), GEF
Optical Investment Company, LLC (the "Purchaser").
WHEREAS:
A. The Company and the Purchaser are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by Rule 506 of Regulation D ("Regulation D"), as promulgated by the United
States Securities and Exchange Commission (the "SEC"), under the Securities Act
of 1933, as amended (the "Securities Act").
B. The Purchaser desires to purchase, upon the terms and conditions stated
in this Agreement, shares of Common Stock, no par value of the Company, at the
option of the Company exercisable from time to time as described below.
C. Contemporaneously with the execution and delivery of this Agreement,
the parties hereto are executing and delivering the Registration Rights
Agreement, dated as of the date hereof, in the form attached hereto as Exhibit A
(the "RRA") pursuant to which the Company has agreed to provide the Purchaser
with certain registration rights with respect to the Shares under the Securities
Act and the rules and regulations promulgated thereunder, and applicable state
securities laws.
NOW THEREFORE, the Company and the Purchaser hereby agree as follows:
1. PURCHASE AND SALE OF SHARES
(a) Purchase of Shares. The Company agrees to issue and sell to the
Purchaser and the Purchaser agrees to purchase up to 38,462 shares of Common
Stock (the "Shares") at a price of $6.50 per share from time to time at the
written request of the Company (each a "Purchase Request") made on or before
January 31, 2002 and with mutual consent of the parties thereafter through June
30, 2002 (the "Commitment Period").
(b) The Closings. Each closing shall take place at the offices of the
Company, 0000 Xxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000, within three (3) days
after a Purchase Request is issued by the Company or such later date on which
the conditions specified in Sections 5 and 6 below have been satisfied or
waived. At each Closing, (A) the Purchaser shall pay the purchase price to the
Company for the number of shares to be issued and sold to such Purchaser by
check or wire transfer, and (B) the Company shall issue instructions to its
transfer agent to issue a stock certificate representing the number of the
Shares which such Purchaser is then purchasing hereunder.
2. RESTRICTIVE LEGENDS. All certificates representing the Shares shall
have endorsed thereon legends in substantially the following forms (in addition
to any other legend which may be required by other agreements between the
parties hereto):
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AS AMENDED. THEY MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED."
Any legend required by appropriate blue sky officials.
3. PURCHASERS' REPRESENTATIONS AND WARRANTIES.
The Purchaser represents and warrants that:
(a) Investment Purpose. The Purchaser is acquiring the Shares being
purchased by it for its own account for investment only and not with a view
towards, or for resale in connection with, the public sale or distribution
thereof, except pursuant to sales registered or exempted under the Securities
Act; provided, however, that by making the representations herein, such
Purchaser does not agree to hold any of the Shares for any minimum or other
specific term and reserves the right to dispose of the Shares at any time,
provided further, however, that such disposition shall be in accordance with or
pursuant to a registration statement or an exemption under the Securities Act.
(b) Accredited Investor Status. Such Purchaser is an "accredited
investor" as that term is defined in Rule 501(a)(3) of Regulation D under the
Securities Act.
(c) Reliance on Exemptions. Such Purchaser understands that the
Shares are being offered and sold to it in reliance on specific exemptions from
the registration requirements of the United States federal and state securities
laws and that the Company is relying in part upon the truth and accuracy of, and
such Purchaser's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Purchaser set forth herein in order
to determine the availability of such exemptions and the eligibility of such
Purchaser to acquire the Shares.
(d) Information. Such Purchaser and its advisors, if any, have been
furnished with all materials relating to the business, finances and operations
of the Company and materials relating to the offer and sale of the Shares that
have been requested by such Purchaser. Such Purchaser and its advisors, if any,
have been afforded the opportunity to ask questions of the Company.
(e) Residency. Such Purchaser is purchasing the Shares from its
office specified in its address on the Schedule of Purchasers.
4. COVENANTS.
(a) Reasonable Best Efforts. Each party shall use its reasonable best
efforts to timely satisfy each of the conditions to be satisfied by it as
provided in Sections 5 and 6 of this Agreement.
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(b) Form D and Blue Sky. The Company agrees to file a Form D with
respect to the Shares as required under Regulation D and to provide a copy
thereof to the Purchaser promptly after such filing. The Company shall take such
action as the Company shall reasonably determine is necessary in order to obtain
an exemption for or to qualify the Shares for sale to the Purchasers pursuant to
this Agreement under applicable securities or "Blue Sky" laws of the
jurisdiction of the Purchaser set forth in Section 7(f) hereof, and shall
provide evidence of any such action so taken to the Purchaser.
(c) Use of Proceeds. The Company will use the proceeds from the sale
of the Shares for general corporate purposes.
5. CONDITIONS TO THE COMPANY'S OBLIGATIONS. The obligation of the Company
to issue and sell the Shares to the Purchaser at each Closing is subject to the
satisfaction, at or before each Closing, of the following conditions, provided
that these conditions are for the Company's sole benefit and may be waived by
the Company at any time in its sole discretion by providing the Purchaser with
prior written notice thereof:
(a) As of the Closing, such Purchaser shall have executed this
Agreement and the RRA and delivered the same to the Company.
(b) The representations and warranties of such Purchaser shall be
true and correct in all material respects as of the Closing and such
Purchaser shall have performed, satisfied and complied with the covenants,
agreements and conditions required to be performed, satisfied or complied
with by such Purchaser at or prior to the Closing.
6. CONDITIONS TO THE PURCHASER'S OBLIGATIONS. The obligation of the
Purchaser hereunder to purchase the Shares from the Company at each Closing is
subject to the satisfaction, at or before the date of such Closing, of each of
the following conditions, provided that these conditions are for the Purchaser's
sole benefit and may be waived by such Purchaser at any time in its sole
discretion by providing the Company with prior written notice thereof:
(a) The Company shall have executed this Agreement and the RRA and
delivered the same to such Purchaser; and
(b) The Company shall cause its transfer agent to execute for
delivery to such Purchaser the Stock Certificates (in such denominations as
such Purchaser shall request) for the Shares being purchased by such
Purchaser.
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7. MISCELLANEOUS.
(a) Governing Law; Jury Trial. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the Commonwealth of Virginia, without giving
effect to any choice of law or conflict of law provision or rule. EACH PARTY
HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A
JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION
HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.
(b) Counterparts. This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party; provided that a facsimile signature
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original, not
a facsimile signature.
(c) Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
(d) Severability. If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement in
that jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.
(e) Entire Agreement; Amendments. This Agreement supersedes all other
prior oral or written agreements between the Purchaser, the Company, their
affiliates and persons acting on their behalf with respect to the matters
discussed herein, and this Agreement and the instruments referenced herein
contain the entire understanding of the parties with respect to the matters
covered herein and therein and, except as specifically set forth herein or
therein, neither the Company nor the Purchaser makes any representation,
warranty, covenant or undertaking with respect to such matters. No provision of
this Agreement may be amended or waived other than by an instrument in writing
signed by the Company and the Purchaser.
(f) Notices. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one (1) business day after deposit
with a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:
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If to the Company:
Essex Corporation
0000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxxxx X. Xxxxxxxxx, President and CEO
With a copy to:
D. Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxx & Xxxxxxx L.L.P.
0 Xxxxx Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
Telephone: 000-000-0000
Facsimile: 000-000-0000
If to the Purchaser:
GEF Optical Investment Company, LLC
0000 Xxx Xxxxxx, X.X
Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: Xx. Xxxxx Xxxxxxx, Esq.
Facsimile: 000-000-0000
or to such other address and/or facsimile number and/or to the attention of such
other person as the recipient party has specified by written notice given to
each other party five days prior to the effectiveness of such change. Written
confirmation of receipt (A) given by the recipient of such notice, consent,
waiver or other communication, (B) mechanically or electronically generated by
the sender's facsimile machine containing the time, date, recipient facsimile
number and an image of the first page of such transmission or (C) provided by a
nationally recognized overnight delivery service shall be rebuttable evidence of
personal service, receipt by facsimile or receipt from a nationally recognized
overnight delivery service in accordance with clause (i), (ii) or (iii) above,
respectively.
(g) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns,
including any purchasers of the Shares. The Company shall not assign this
Agreement or any rights or obligations hereunder including by merger or
consolidation without the prior written consent of the Purchasers.
(h) No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
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(i) Survival. The representations and warranties of the Purchaser
contained in Section 3 and the agreements and covenants set forth in Sections 4,
5 and 6 shall survive the Closing.
(j) Publicity. The Company and the Purchaser shall have the right to
approve before issuance any press releases or any other public statements with
respect to the transactions contemplated hereby, such consent not to be
unreasonably withheld.
(k) Further Assurances. Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
(l) Brokers; Placement Agent. The Company acknowledges that it has
not engaged a broker or placement agent in connection with the sale of the
Shares. The Company shall pay, and hold the Purchaser harmless against, any
liability, loss or expense (including, without limitation, attorney's fees and
out-of-pocket expenses) arising in connection with any such claim for brokers',
financial advisory or similar fees in connection with such transaction.
[REMAINDER OF PAGE BLANK]
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IN WITNESS WHEREOF, the Purchaser and the Company have caused this
Securities Purchase Agreement to be duly executed as of the date first written
above.
COMPANY:
ESSEX CORPORATION
By:
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: President and CEO
PURCHASER:
GEF OPTICAL INVESTMENT COMPANY, LLC
By:
-------------------------------------
Name:
Title:
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EXHIBITS
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Exhibit A Form of Purchase Request
Exhibit B Form of RRA
EXHIBIT A
ESSEX CORPORATION
NOTICE OF PURCHASE REQUEST
TO: GEF OPTICAL INVESTMENT COMPANY, LLC
0000 Xxx Xxxxxx, X.X, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: Xx. Xxxxx Xxxxxxx, Esq.
Fax No. 000-000-0000
FROM: ESSEX CORPORATION DATE:__________________
This Notice is provided in connection with the Common Stock Purchase Agreement
dated December _____, 2001, by and between Essex Corporation and GEF Optical
Investment Company, LLC (the []Purchase Agreement[]). Words and expressions
defined in the Purchase Agreement shall bear the same meanings as in this Notice
and the terms and conditions contained in the Purchase Agreement are hereby
incorporated by reference and deemed to be a part of this Notice.
Essex Corporation hereby makes a Purchase Request pursuant to the Purchase
Agreement as follows:
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(a) No. of Shares:
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(b) Aggregate Purchase Price
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(c) Closing Date
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ESSEX CORPORATION
By:
----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Financial Officer
* * * * * * * * * *
We hereby confirm that each of the representations and warranties of the
Purchaser in the Purchase Agreement is true and accurate on the date hereof,
that the Purchaser has satisfied each condition precedent to Closing
contemplated by this Notice and that the Purchaser remains in compliance with
each and every obligation and covenant made by the Purchaser in the Purchase
Agreement and acknowledge our obligation to purchase and pay for the Shares in
accordance with the terms of the Purchase Agreement.
GEF OPTICAL INVESTMENT COMPANY, LLC
By:
----------------------------------
Name:
Title:
Date:
-----------------------------------
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ESSEX CORPORATION
-----------------
REGISTRATION RIGHTS AGREEMENT
-----------------------------
This Agreement dated as of December 12, 2001 is entered into by and among
Essex Corporation, a Virginia corporation (the "Company"), and GEF Optical
Investment Company, LLC (the "Purchaser").
Recitals
--------
WHEREAS, the Company and the Purchaser have entered into a Securities
Purchase Agreement of even date herewith (the "Purchase Agreement"); and
WHEREAS, the Company and the Purchaser desire to provide for certain
arrangements with respect to the registration of shares of capital stock of the
Company under the Securities Act of 1933;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, the parties hereto agree as follows:
1. Certain Definitions.
As used in this Agreement, the following terms shall have the following
respective meanings:
"Commission" means the Securities and Exchange Commission, or any
other federal agency at the time administering the Securities Act.
"Common Stock" means the common stock of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any successor federal statute, and the rules and regulations of the
Commission issued under such Act, as they each may, from time to time, be in
effect.
"Other Holders" shall mean holders of securities of the Company (other
than the Stockholders) who are entitled, by contract with the Company, to have
securities included in a Registration Statement.
"Prospectus" means the prospectus included in any Registration
Statement, as amended or supplemented by an amendment or prospectus supplement,
including post-effective amendments, and all material incorporated by reference
or deemed to be incorporated by reference in such Prospectus.
"Registration Statement" means a registration statement filed by the
Company with the Commission for a public offering and sale of securities of the
Company (other than a registration statement on Form S-8 or Form S-4, or their
successors, or any other form for a similar limited purpose, or any registration
statement covering only securities proposed to be issued in exchange for
securities or assets of another corporation).
A-1
"Registration Expenses" means the expenses described in Section 2.3.
"Registrable Shares" means (i) the shares of Common Stock sold to
Purchaser under the Purchase Agreement and (ii) any other shares of Common Stock
issued in respect of such shares (because of stock splits, stock dividends,
reclassifications, recapitalizations, or similar events); provided, however,
that shares of Common Stock which are Registrable Shares shall cease to be
Registrable Shares upon (i) any sale pursuant to a Registration Statement or
Rule 144 under the Securities Act or (ii) any sale in any manner to a person or
entity which, by virtue of Section 3 of this Agreement, is not entitled to the
rights provided by this Agreement.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the Commission
issued under such Act, as they each may, from time to time, be in effect.
"Selling Stockholder" means any Stockholder owning Registrable Shares
included in a Registration Statement.
"Stockholders" means the Purchaser and any persons or entities to whom
the rights granted under this Agreement are transferred by the Purchaser or its
successors or assigns pursuant to Section 3 hereof.
2. Registration Rights
2.1 Incidental Registration.
(a) Whenever the Company proposes to file a Registration
Statement at any time and from time to time, it will, prior to such filing, give
written notice to all Stockholders of its intention to do so; provided, that no
such notice need be given if no Registrable Shares are to be included therein as
a result of a determination of the managing underwriter pursuant to Section
2.1(b). Upon the written request of a Stockholder or Stockholders given within
20 days after the Company provides such notice (which request shall state the
intended method of disposition of such Registrable Shares), the Company shall
use its best efforts to cause all Registrable Shares which the Company has been
requested by such Stockholder or Stockholders to register to be registered under
the Securities Act to the extent necessary to permit their sale or other
disposition in accordance with the intended methods of distribution specified in
the request of such Stockholder or Stockholders; provided that the Company shall
have the right to postpone or withdraw any registration effected pursuant to
this Section 2.1 without obligation to any Stockholder.
(b) If the registration for which the Company gives notice
pursuant to Section 2.1(a) is a registered public offering involving an
underwriting, the Company shall so advise the Stockholders as a part of the
written notice given pursuant to Section 2.1(a). In such event, the right of any
Stockholder to include its Registrable Shares in such registration pursuant to
Section 2.1 shall be conditioned upon such Stockholder's participation in such
underwriting on the terms set forth herein. All Stockholders proposing to
distribute their securities through such underwriting shall enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for the underwriting by the Company, provided that such underwriting
agreement shall not provide for indemnification or contribution obligations on
the
part of Stockholders materially greater than the obligations of the Stockholders
pursuant to Section 2.4. Notwithstanding any other provision of this Section
2.1, if the managing underwriter determines that the inclusion of all shares
requested to be registered would adversely affect the offering, the Company may
limit the number of Registrable Shares to be included in the registration and
underwriting. The Company shall so advise all holders of Registrable Shares
requesting registration, and the number of shares that are entitled to be
included in the registration and underwriting shall be allocated in the
following manner. The securities of the Company held by holders other than
Stockholders and Other Holders shall be excluded from such registration and
underwriting to the extent deemed advisable by the managing underwriter, and, if
a further limitation on the number of shares is required, the number of shares
that may be included in such registration and underwriting shall be allocated
among all Stockholders and Other Holders requesting registration in proportion,
as nearly as practicable, to the respective number of shares of Common Stock (on
an as-converted basis) which they held at the time the Company gives the notice
specified in Section 2.1(a). If any Stockholder or Other Holder would thus be
entitled to include more securities than such holder requested to be registered,
the excess shall be allocated among other requesting Stockholders and Other
Holders pro rata in the manner described in the preceding sentence. If any
holder of Registrable Shares or any officer, director or Other Holder
disapproves of the terms of any such underwriting, such person may elect to
withdraw therefrom by written notice to the Company, and any Registrable Shares
or other securities excluded or withdrawn from such underwriting shall be
withdrawn from such registration.
2.2 Registration Procedures.
(a) If and whenever the Company effects the registration of any
Registrable Shares under the Securities Act, the Company shall:
(i) furnish to each Selling Stockholder such reasonable
numbers of copies of the Prospectus, including any preliminary Prospectus, in
conformity with the requirements of the Securities Act, and such other documents
as such Selling Stockholder may reasonably request in order to facilitate the
public sale or other disposition of the Registrable Shares owned by such Selling
Stockholder;
(ii) use its best efforts to register or qualify the
Registrable Shares covered by the Registration Statement under the securities or
Blue Sky laws of such states as the Selling Stockholders shall reasonably
request, and do any and all other acts and things that may be necessary or
desirable to enable the Selling Stockholders to consummate the public sale or
other disposition in such states of the Registrable Shares owned by the Selling
Stockholder; provided, however, that the Company shall not be required in
connection with this paragraph (ii) to qualify as a foreign corporation or
execute a general consent to service of process in any jurisdiction;
(iii) cause all such Registrable Shares to be listed on each
securities exchange or automated quotation system on which similar securities
issued by the Company are then listed;
(iv) provide a transfer agent and registrar for all such
Registrable Shares not later than the effective date of such registration
statement;
(v) make available for inspection by the Selling
Stockholders, any managing underwriter participating in any disposition pursuant
to such Registration Statement, and any attorney or accountant or other agent
retained by any such underwriter or selected by the Selling Stockholders, all
financial and other records, pertinent corporate documents and properties of the
Company and cause the Company's officers, directors, employees and independent
accountants to supply all information reasonably requested by any such seller,
underwriter, attorney, accountant or agent in connection with such Registration
Statement;
(vi) notify each Selling Stockholder, promptly after it
shall receive notice thereof, of the time when such Registration Statement has
become effective or a supplement to any Prospectus forming a part of such
Registration Statement has been filed; and
(vii) notify each seller of such Registrable Shares of any
request by the Commission for the amending or supplementing of such Registration
Statement or Prospectus.
(b) If the Company has delivered a Prospectus to the Selling
Stockholders and after having done so the Prospectus is amended to comply with
the requirements of the Securities Act, the Company shall promptly notify the
Selling Stockholders and, if requested, the Selling Stockholders shall
immediately cease making offers of Registrable Shares and return all
Prospectuses to the Company. The Company shall promptly provide the Selling
Stockholders with revised Prospectuses and, following receipt of the revised
Prospectuses, the Selling Stockholders shall be free to resume making offers of
the Registrable Shares.
(c) In the event that, in the judgment of the Company, it is
advisable to suspend use of a Prospectus included in a Registration Statement
due to pending material developments or other events that have not yet been
publicly disclosed and as to which the Company believes public disclosure would
be detrimental to the Company, the Company shall notify all Selling Stockholders
to such effect, and, upon receipt of such notice, each such Selling Stockholder
shall immediately discontinue any sales of Registrable Shares pursuant to such
Registration Statement until such Selling Stockholder has received copies of a
supplemented or amended Prospectus or until such Selling Stockholder is advised
in writing by the Company that the then current Prospectus may be used and has
received copies of any additional or supplemental filings that are incorporated
or deemed incorporated by reference in such Prospectus.
2.3 Allocation of Expenses. The Company will pay all Registration
Expenses for all registrations under this Agreement. For purposes of this
Section, the term "Registration Expenses" shall mean all expenses incurred by
the Company in complying with this Agreement, including, without limitation, all
registration and filing fees, exchange listing fees, printing expenses, fees and
expenses of counsel for the Company and the fees and expenses of one counsel
selected by the Selling Stockholders to represent the Selling Stockholders,
state Blue
Sky fees and expenses, and the expense of any special audits incident to or
required by any such registration, but excluding underwriting discounts, selling
commissions and the fees and expenses of Selling Stockholders' own counsel
(other than the counsel selected to represent all Selling Stockholders).
2.4 Indemnification and Contribution.
(a) In the event of any registration of any of the Registrable
Shares under the Securities Act pursuant to this Agreement, the Company will
indemnify and hold harmless each Selling Stockholder, each underwriter of such
Registrable Shares, and each other person, if any, who controls such Selling
Stockholder or underwriter within the meaning of the Securities Act or the
Exchange Act against any losses, claims, damages or liabilities, joint or
several, to which such Selling Stockholder, underwriter or controlling person
may become subject under the Securities Act, the Exchange Act, state securities
or Blue Sky laws or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement under which such Registrable Shares were registered
under the Securities Act, any preliminary prospectus or final prospectus
contained in the Registration Statement, or any amendment or supplement to such
Registration Statement, or arise out of or are based upon the omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and the Company will
reimburse such Selling Stockholder, underwriter and each such controlling person
for any legal or any other expenses reasonably incurred by such Selling
Stockholder, underwriter or controlling person in connection with investigating
or defending any such loss, claim, damage, liability or action; provided,
however, that the Company will not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon any
untrue statement or omission made in such Registration Statement, preliminary
prospectus or prospectus, or any such amendment or supplement, in reliance upon
and in conformity with information furnished to the Company, in writing, by or
on behalf of such Selling Stockholder, underwriter or controlling person
specifically for use in the preparation thereof.
(b) In the event of any registration of any of the Registrable
Shares under the Securities Act pursuant to this Agreement, each Selling
Stockholder, severally and not jointly, will indemnify and hold harmless the
Company, each of its directors and officers and each underwriter (if any) and
each person, if any, who controls the Company or any such underwriter within the
meaning of the Securities Act or the Exchange Act, against any losses, claims,
damages or liabilities, joint or several, to which the Company, such directors
and officers, underwriter or controlling person may become subject under the
Securities Act, Exchange Act, state securities or Blue Sky laws or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement under which
such Registrable Shares were registered under the Securities Act, any
preliminary prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to the Registration Statement, or
arise out of or are based upon any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, if the statement or omission was made in reliance upon
and in conformity with information relating to such Selling Stockholder
furnished in writing to the
Company by or on behalf of such Selling Stockholder specifically for use in
connection with the preparation of such Registration Statement, prospectus,
amendment or supplement; provided, however, that the obligations of a Selling
Stockholder hereunder shall be limited to an amount equal to the net proceeds to
such Selling Stockholder of Registrable Shares sold in connection with such
registration.
(c) Each party entitled to indemnification under this Section
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided, that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld); and, provided, further, that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section except to the extent that the Indemnifying Party
is adversely affected by such failure. The Indemnified Party may participate in
such defense at such party's expense; provided, however, that the Indemnifying
Party shall pay such expense if representation of such Indemnified Party by the
counsel retained by the Indemnifying Party would be inappropriate due to actual
or potential differing interests between the Indemnified Party and any other
party represented by such counsel in such proceeding; provided further that in
no event shall the Indemnifying Party be required to pay the expenses of more
than one law firm per jurisdiction as counsel for the Indemnified Party. The
Indemnifying Party also shall be responsible for the expenses of such defense if
the Indemnifying Party does not elect to assume such defense. No Indemnifying
Party, in the defense of any such claim or litigation shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect of such claim or litigation, and no Indemnified Party
shall consent to entry of any judgment or settle such claim or litigation
without the prior written consent of the Indemnifying Party, which consent shall
not be unreasonably withheld.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 2.4 is
due in accordance with its terms but for any reason is held to be unavailable to
an Indemnified Party in respect to any losses, claims, damages and liabilities
referred to herein, then the Indemnifying Party shall, in lieu of indemnifying
such Indemnified Party, contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages or liabilities to
which such party may be subject in such proportion as is appropriate to reflect
the relative fault of the Company on the one hand and the Selling Stockholders
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative fault of the Company and the Selling
Stockholders shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of material fact related to information
supplied by the Company or the Selling Stockholders and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and the Selling Stockholders agree that
it would not be just and equitable if contribution pursuant to this Section 2.4
were determined by pro rata allocation or by any other method of allocation
which does not
take account of the equitable considerations referred to above. Notwithstanding
the provisions of this paragraph of Section 2.4, (a) in no case shall any one
Selling Stockholder be liable or responsible for any amount in excess of the net
proceeds received by such Selling Stockholder from the offering of Registrable
Shares and (b) the Company shall be liable and responsible for any amount in
excess of such proceeds; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Any party entitled to contribution will, promptly
after receipt of notice of commencement of any action, suit or proceeding
against such party in respect of which a claim for contribution may be made
against another party or parties under this Section, notify such party or
parties from whom contribution may be sought, but the omission so to notify such
party or parties from whom contribution may be sought shall not relieve such
party from any other obligation it or they may have thereunder or otherwise
under this Section. No party shall be liable for contribution with respect to
any action, suit, proceeding or claim settled without its prior written consent,
which consent shall not be unreasonably withheld.
2.5 Information by Holder. Each holder of Registrable Shares included
in any registration shall furnish to the Company such information regarding such
holder and the distribution proposed by such holder as the Company may
reasonably request in writing and as shall be required in connection with any
registration, qualification or compliance referred to in this Agreement.
2.6 "Stand-Off" Agreement; Confidentiality of Notices. Each
Stockholder, if requested by the Company and the managing underwriter of an
underwritten public offering by the Company of Common Stock, shall not sell or
otherwise transfer or dispose of any Registrable Shares or other securities of
the Company held by such Stockholder for a period of 90 days following the
effective date of a Registration Statement; provided, that all stockholders of
the Company then holding at least 5% of the outstanding Common Stock (on an
as-converted basis) and all officers and directors of the Company enter into
similar agreements.
The Company may impose stop-transfer instructions with respect to the
Registrable Shares or other securities subject to the foregoing restriction
until the end of such 90-day period.
Any Stockholder receiving any written notice from the Company regarding the
Company's plans to file a Registration Statement shall treat such notice
confidentially and shall not disclose such information to any person other than
as necessary to exercise its rights under this Agreement.
2.7 Rule 144 Requirements. The Company agrees to:
(a) make and keep current public information about the Company
available, as those terms are understood and defined in Rule 144;
(b) use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act (at any time after it has become subject to
such reporting requirements); and
(c) furnish to any holder of Registrable Shares upon request (i)
a written statement by the Company as to its compliance with the reporting
requirements of Rule 144 and of the Securities Act and the Exchange Act, (ii) a
copy of the most recent annual or quarterly report of the Company, and (iii)
such other reports and documents of the Company as such holder may reasonably
request to avail itself of any similar rule or regulation of the Commission
allowing it to sell any such securities without registration.
2.8 Termination. All of the Company's obligations to register
Registrable Shares under Section 2.1 of this Agreement shall terminate five
years after the date of this Agreement.
3. Transfers of Rights. This Agreement, and the rights and obligations of
the Purchaser hereunder, may be assigned by such Purchaser to any partner,
member, stockholder or affiliate of such Purchaser, and such transferee shall be
deemed a "Purchaser" for purposes of this Agreement; provided that the
transferee provides written notice of such assignment to the Company and agrees
in writing to be bound hereby.
4. General.
(a) Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
(b) Specific Performance. In addition to any and all other
remedies that may be available at law in the event of any breach of this
Agreement, the Purchaser shall be entitled to specific performance of the
agreements and obligations of the Company hereunder and to such other injunctive
or other equitable relief as may be granted by a court of competent
jurisdiction.
(c) Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the Commonwealth of Virginia
(without reference to the conflicts of law provisions thereof).
(d) Notices. All notices, requests, consents, and other
communications under this Agreement shall be in writing and shall be deemed
delivered (i) two business days after being sent by registered or certified
mail, return receipt requested, postage prepaid or (ii) one business day after
being sent via a reputable nationwide overnight courier service guaranteeing
next business day delivery, in each case to the intended recipient as set forth
below:
If to the Company, at 0000 Xxxxxxxx Xxxx, Xxxxxxxx, XX 00000,
Attention: President, or at such other address or addresses as may have been
furnished in writing by the Company to the Purchaser, with a copy to D. Xxxxx
Xxxxx, Esquire, Xxxxxxxxx, Xxxxxx & Preston L.L.P., Xxxxx Xx. Xxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxx 00000; or
If to the Purchaser, at 0000 Xxx Xxxxxx, X.X, Xxxxx 000, Xxxxxxxxxx,
XX 00000, Attention: Xx. Xxxxx Xxxxxxx, Esq., or at such other address or
addresses as may have been furnished to the Company in writing by the Purchaser.
Any party may give any notice, request, consent or other communication
under this Agreement using any other means (including, without limitation,
personal delivery, messenger service, telecopy, first class mail or electronic
mail), but no such notice, request, consent or other communication shall be
deemed to have been duly given unless and until it is actually received by the
party for whom it is intended. Any party may change the address to which
notices, requests, consents or other communications hereunder are to be
delivered by giving the other parties notice in the manner set forth in this
Section.
(e) Complete Agreement. This Agreement constitutes the entire
agreement and understanding of the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements and understandings relating to
such subject matter.
(f) Amendments and Waivers. Any term of this Agreement may be
amended or terminated and the observance of any term of this Agreement may be
waived with respect to all parties to this Agreement (either generally or in a
particular instance and either retroactively or prospectively), with the written
consent of the Company and the holders of at least 51% of the Registrable Shares
held by all of the Stockholders. Notwithstanding the foregoing, this Agreement
may be amended or terminated, and any right hereunder may be waived with respect
to all parties to this Agreement with the consent of the holders of less than
all Registrable Shares only in a manner which applies to all such holders in the
same fashion. Any such amendment, termination or waiver effected in accordance
with this Section 4(f) shall be binding on all parties hereto, even if they do
not execute such consent and the Company. No waivers of or exceptions to any
term, condition or provision of this Agreement, in any one or more instances,
shall be deemed to be, or construed as, a further or continuing waiver of any
such term, condition or provision.
(g) Pronouns. Whenever the context may require, any pronouns
fused in this Agreement shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns and pronouns shall include the
plural, and vice versa.
(h) Counterparts; Facsimile Signatures. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original, and all of which together shall constitute one and the same document.
This Agreement may be executed by facsimile signatures.
(i) Section Headings. The section headings are for the
convenience of the parties and in no way alter, modify, amend, limit or restrict
the contractual obligations of the parties.
Executed as of the date first written above.
COMPANY:
ESSEX CORPORATION
By:
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Name:
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Title:
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PURCHASER:
GEF OPTICAL INVESTMENT COMPANY, LLC
By:
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Name:
Title:
