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EXHIBIT 15
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUED UPON ITS
EXERCISE ARE SUBJECT TO THE RESTRICTIONS ON
TRANSFER SET FORTH IN SECTION 4 OF THIS WARRANT
Warrant No. 1 Number of Shares: up to 333,333
(subject to adjustment)
Date of Issuance: October 17, 2002
ESSEX CORPORATION
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Common Stock Purchase Warrant
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(Void after December 15, 2002)
Essex Corporation, a Virginia corporation (the "Company"), for value
received of $100,000, hereby certifies that Global Environment Strategic
Technology Partners, L.P., or its registered assigns (the "Registered Holder"),
is entitled, subject to the terms and conditions set forth below, to purchase
from the Company, at any time or from time to time on or after the date of
issuance and on or before 5:00 p.m. (Eastern time) on December 15, 2002, up to
333,333 shares of Common Stock, of the Company, at a purchase price as set forth
below. The shares purchasable upon exercise of this Warrant, and the purchase
price per share, each as adjusted from time to time pursuant to the provisions
of this Warrant, are hereinafter referred to as the "Warrant Shares" and the
"Purchase Price," respectively.
1. Exercise and Payment of Purchase Price. (a) This Warrant may be exercised
by the Registered Holder, in whole only (except as provided below), by
surrendering this Warrant, with the purchase form appended hereto as Exhibit I
duly executed by the Registered Holder or by the Registered Xxxxxx's duly
authorized attorney, at the principal office of the Company, or at such other
office or agency as the Company may designate, and, in the case of Additional
Investments (as defined), accompanied by payment in full, in lawful money of the
United States, of the Purchase Price payable in respect of the number of Warrant
Shares purchased upon such exercise.
(b) As soon as practicable after the exercise of this Warrant, and in
any event within 10 days thereafter, the Company, at its expense, will cause to
be issued in the name of, and delivered to, the Registered Holder, or as such
Holder (upon payment by such Holder of any applicable transfer taxes) may
direct.
(c) A certificate or certificates for the number of full Warrant Shares
to which the Registered Holder shall be entitled upon such exercise.
2. Additional Investments. (a) On or before December 15, 2002 the Registered
Holder has the option but is not obligated to make an Additional Investment of
up to $1,000,000 at a Purchase Price of $3.25 per share ("Additional
Investment"). Upon closing, fifty percent (50%) of the Warrant Deposit shall be
credited against the purchase price payable for the shares. In the event the
Registered Holder does not exercise its rights to purchase 100% of the shares
available pursuant to this Warrant on a timely basis, the Registered Holder
shall be deemed to
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have exercised the 60 Day Warrant to purchase shares at the $3.25 share price,
as adjusted in accordance with Section 2(c) below, and 50% of the Warrant
Deposit shall be applied in full satisfaction of the purchase price payable for
such shares.
(b) Notwithstanding paragraph 2(a), if the Registered Holder makes an
additional investment that is received by the Company within thirty (30)
calendar days of the issuance date of this Warrant, the Purchase Price for such
additional investment shall be $3.00.
(c) In the event that, on the day prior to a designated closing date
for exercise of the Warrant, the 15 trading day trailing weighted moving closing
price average of the Essex common stock on the OTCBB shall fall below the
designated price as set forth above, the Purchase Price for the exercise of the
Warrant shall be recalculated as follows: a 15% discount from 15 trading day
trailing weighted moving closing price average of the Essex common stock on the
OTCBB from and including the day before the designated closing date, but not
less than $3.00 per share.
3. Adjustments.
(a) Adjustment for Stock Splits and Combinations. If the Company shall
at any time or from time to time after the date on which this Warrant was first
issued (the "Original Issue Date") effect a subdivision of the outstanding
Common Stock, the Purchase Price then in effect immediately before that
subdivision shall be proportionately decreased. If the Company shall at any time
or from time to time after the Original Issue Date combine the outstanding
shares of Common Stock, the Purchase Price then in effect immediately before the
combination shall be proportionately increased. Any adjustment under this
paragraph shall become effective at the close of business on the date the
subdivision or combination becomes effective.
(b) Adjustment for Certain Dividends and Distributions. In the event
the Company at any time, or from time to time after the Original Issue Date
shall make or issue, or fix a record date for the determination of holders of
Common Stock entitled to receive, a dividend or other distribution payable in
additional shares of Common Stock, then and in each such event the Purchase
Price then in effect immediately before such event shall be decreased as of the
time of such issuance or, in the event such a record date shall have been fixed,
as of the close of business on such record date, by multiplying the Purchase
Price then in effect by a fraction:
(1) the numerator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to the
time of such issuance or the close of business on such record date, and
(2) the denominator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to the
time of such issuance or the close of business on such record date plus
the number of shares of Common Stock issuable in payment of such
dividend or distribution;
provided, however, if such record date shall have been fixed and such dividend
is not fully paid or if such distribution is not fully made on the date fixed
therefor, the Purchase Price shall be recomputed accordingly as of the close of
business on such record date and thereafter the
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Purchase Price shall be adjusted pursuant to this paragraph as of the time of
actual payment of such dividends or distributions.
(c) Adjustment in Number of Warrant Shares. When any adjustment is
required to be made in the Purchase Price pursuant to subsections 3(a) or 3(b),
the number of Warrant Shares 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 Purchase Price in effect immediately prior to
such adjustment, by (ii) the Purchase Price in effect immediately after such
adjustment.
(d) Adjustments for Other Dividends and Distributions. In the event the
Company at any time or from time to time after the Original Issue Date shall
make or issue, or fix a record date for the determination of holders of Common
Stock entitled to receive, a dividend or other distribution payable in
securities of the Company (other than shares of Common Stock) or in cash or
other property (other than cash out of earnings or earned surplus, determined in
accordance with generally accepted accounting principles), then and in each such
event provision shall be made so that the Registered Holder shall receive upon
exercise hereof, in addition to the number of shares of Common Stock issuable
hereunder, the kind and amount of securities of the Company and/or cash and
other property which the Registered Holder would have been entitled to receive
had this Warrant been exercised into Common Stock on the date of such event and
had the Registered Holder thereafter, during the period from the date of such
event to and including the Exercise Date, retained any such securities
receivable, giving application to all adjustments called for during such period
under this Section 3 with respect to the rights of the Registered Holder.
(e) Adjustment for Mergers or Reorganizations, etc. If there shall
occur any reorganization, recapitalization, consolidation or merger involving
the Company in which the Common Stock is converted into or exchanged for
securities, cash or other property (other than a transaction covered by
subsections 3(a), 3(b) or 3(d)), then, following any such reorganization,
recapitalization, consolidation or merger, the Registered Holder shall receive
upon exercise hereof the kind and amount of securities, cash or other property
which the Registered Holder would have been entitled to receive if, immediately
prior to such reorganization, recapitalization, consolidation or merger, the
Registered Holder had held the number of shares of Common Stock subject to this
Warrant. In such case, appropriate adjustment (as determined in good faith by
the Board of Directors of the Company) shall be made in the application of the
provisions set forth herein with respect to the rights and interests thereafter
of the Registered Holder, to the end that the provisions set forth in this
Section 3 (including provisions with respect to changes in and other adjustments
of the Purchase Price) shall thereafter be applicable, as nearly as reasonably
may be, in relation to any securities, cash or other property thereafter
deliverable upon the exercise of this Warrant.
(f) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Purchase Price pursuant to this Section 3, the
Company at its expense shall promptly compute such adjustment or readjustment in
accordance with the terms hereof and furnish to the Registered Holder a
certificate setting forth such adjustment or readjustment (including the kind
and amount of securities, cash or other property for which this Warrant shall be
exercisable and the Purchase Price) and showing in detail the facts upon which
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such adjustment or readjustment is based. The Company shall, upon the written
request at any time of the Registered Holder, furnish or cause to be furnished
to the Registered Holder a certificate setting forth (i) the Purchase Price then
in effect and (ii) the number of shares of Common Stock and the amount, if any,
of other securities, cash or property which then would be received upon the
exercise of this Warrant.
4. Fractional Shares. The Company shall not be required upon the exercise of
this Warrant to issue any fractional shares.
5. Requirements for Transfer.
(a) This Warrant and the Warrant Shares shall not be sold or
transferred unless either (i) they first shall have been registered under the
Securities Act of 1933, as amended (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.
(b) Notwithstanding the foregoing, no registration or opinion of
counsel shall be required for (i) a transfer by a Registered Holder to a party
specified in Section 10(b) below, or (ii) a transfer made in accordance with
Rule 144 under the Act.
(c) Each certificate representing Warrant Shares shall bear a legend
substantially in the following form:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and may not be
offered, sold or otherwise transferred, pledged or hypothecated unless
and until such securities are registered under such Act or an opinion
of counsel satisfactory to the Company is obtained to the effect that
such registration is not required."
The foregoing legend shall be removed from the certificates representing any
Warrant Shares, at the request of the holder thereof, at such time as they
become eligible for resale pursuant to Rule 144(k) under the Act.
6. No Impairment. The Company will not, by amendment of its charter or
through reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of this Warrant, but
will at all times in good faith assist in the carrying out of all such terms and
in the taking of all such action as may be necessary or appropriate in order to
protect the rights of the holder of this Warrant against impairment.
7. Notices of Record Date, etc. In the event:
(a) the Company shall take a record of the holders of its Common Stock
(or other stock or securities at the time deliverable upon the exercise of this
Warrant) for the purpose of entitling or enabling them to receive any dividend
or other distribution, or to receive any right to subscribe for or purchase any
shares of stock of any class or any other securities, or to receive any other
right; or
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(b) of any capital reorganization of the Company, any reclassification
of the Common Stock of the Company, any consolidation or merger of the Company
with or into another corporation (other than a consolidation or merger in which
the Company is the surviving entity and its Common Stock is not converted into
or exchanged for any other securities or property), or any transfer of all or
substantially all of the assets of the Company; or
(c) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
then, and in each such case, the Company will mail or cause to be mailed to
the Registered Holder a notice specifying, as the case may be, (i) the record
date for such dividend, distribution or right, and the amount and character of
such dividend, distribution or right, or (ii) the effective date on which such
reorganization, reclassification, consolidation, merger, transfer, dissolution,
liquidation or winding-up is to take place, and the time, if any is to be fixed,
as of which the holders of record of Common Stock (or such other stock or
securities at the time deliverable upon the exercise of this Warrant) shall be
entitled to exchange their shares of Common Stock (or such other stock or
securities) for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, transfer, dissolution,
liquidation or winding-up. Such notice shall be mailed at least ten days prior
to the record date or effective date for the event specified in such notice.
8. Reservation of Stock. The Company will at all times reserve and keep
available, solely for issuance and delivery upon the exercise of this Warrant,
such number of Warrant Shares and other securities, cash and/or property, as
from time to time shall be issuable upon the exercise of this Warrant.
9. Exchange of Warrants. Upon the surrender by the Registered Holder,
properly endorsed, to the Company at the principal office of the Company, the
Company will, subject to the provisions of Section 4 hereof, issue and deliver
to or upon the order of such Holder, at the Company's expense, a new Warrant or
Warrants of like tenor, in the name of the Registered Holder or as the
Registered Holder (upon payment by the Registered Holder of any applicable
transfer taxes) may direct, calling in the aggregate on the face or faces
thereof for the number of shares of Common Stock (or other securities, cash
and/or property) then issuable upon exercise of this Warrant.
10. Replacement of Warrants. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and (in the case of loss, theft or destruction) upon delivery of an
indemnity agreement (with surety if reasonably required) in an amount reasonably
satisfactory to the Company, or (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will issue, in lieu thereof, a new
Warrant of like tenor.
11. Transfers, etc.
(a) The Company will maintain a register containing the name and
address of the Registered Holder of this Warrant. The Registered Holder may
change its or his address as shown on the warrant register by written notice to
the Company requesting such change.
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(b) Subject to the provisions of Section 5 hereof, this Warrant and all
rights hereunder are transferable, in whole or in part, to any partner, member,
stockholder or affiliate of the holder, and any such transferee shall have the
rights of the Registered Holder to the extent of the portion of this Warrant so
transferred. Such transfer shall be effective upon surrender of this Warrant
with a properly executed assignment (in the form of Exhibit II hereto) at the
principal office of the Company. Nothing contained in this Section 11 shall
limit the transferability of the Warrant Shares.
(c) Until any transfer of this Warrant is made in the warrant register,
the Company may treat the Registered Holder as the absolute owner hereof for all
purposes; provided, however, that if and when this Warrant is properly assigned
in blank, the Company may (but shall not be obligated to) treat the bearer
hereof as the absolute owner hereof for all purposes, notwithstanding any notice
to the contrary.
12. Mailing of Notices, etc. All notices and other communications from the
Company to the Registered Holder shall be mailed by first-class certified or
registered mail, postage prepaid, to the address last furnished to the Company
in writing by the Registered Holder. All notices and other communications from
the Registered Holder or in connection herewith to the Company shall be mailed
by first-class certified or registered mail, postage prepaid, to the Company at
its principal office set forth below. If the Company should at any time change
the location of its principal office to a place other than as set forth below,
it shall give prompt written notice to the Registered Holder and thereafter all
references in this Warrant to the location of its principal office at the
particular time shall be as so specified in such notice.
13. No Rights as Shareholder. Until the exercise of this Warrant, the
Registered Holder shall not have or exercise any rights by virtue hereof as a
shareholder of the Company. Notwithstanding the foregoing, in the event (i) the
Company effects a split of the Common Stock by means of a stock dividend and the
Purchase Price of and the number of Warrant Shares are adjusted as of the date
of the distribution of the dividend (rather than as of the record date for such
dividend), and (ii) the Registered Holder exercises this Warrant between the
record date and the distribution date for such stock dividend, the Registered
Holder shall be entitled to receive, on the distribution date, the stock
dividend with respect to the shares of Common Stock acquired upon such exercise,
notwithstanding the fact that such shares were not outstanding as of the close
of business on the record date for such stock dividend.
14. Change or Waiver. Any term of this Warrant may be changed or waived only
by an instrument in writing signed by the party against which enforcement of the
change or waiver is sought.
15. Section Headings. The section headings in this Warrant are for the
convenience of the parties and in no way alter, modify, amend, limit or restrict
the contractual obligations of the parties.
16. Governing Law. This Warrant will 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).
17. Securities Purchase Agreement. This Warrant is issued pursuant to the
Securities Purchase Agreement by and between the Company and the Registered
Holder of even date
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herewith. In the event of a conflict in terms between the Securities Purchase
Agreement and this Warrant this Warrant shall control.
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EXECUTED as of the Date of Issuance indicated above.
ESSEX CORPORATION
By: /s/ Xxxxxx X. Xxxxx, Xx
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[Corporate Seal] Title: Chief Financial Officer
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ATTEST:
/s/ Xxxxxxxx X. XxXxxxxx
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Corporate Secretary
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EXHIBIT I
PURCHASE FORM
To:_________________ Dated:____________
The undersigned, pursuant to the provisions set forth in the attached
Warrant (No. 1), hereby irrevocably elects to purchase (check applicable box):
0 ___ shares of the Common Stock covered by such Warrant; or
0 the maximum number of shares of Common Stock covered by such Warrant.
The undersigned herewith makes payment of the full purchase price for such
shares at the price per share provided for in such Warrant, which is $________.
Such payment takes the form of $______ in lawful money of the United States.
Signature: ______________________
Address: ______________________
______________________
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EXHIBIT II
ASSIGNMENT FORM
FOR VALUE RECEIVED, ________________________________________ hereby sells,
assigns and transfers all of the rights of the undersigned under the attached
Warrant (No. 1) with respect to the number of shares of Common Stock covered
thereby set forth below, unto:
Name of Assignee Address No. of Shares
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Dated:_____________________ Signature:_________________________
