Exhibit 99.3
REGISTRATION RIGHTS AGREEMENT
DATED OCTOBER 17, 2002
WITH GLOBAL ENVIRONMENT STRATEGIC TECHNOLOGY PARTNERS, L.P.
AND/OR ITS AFFILIATES
ESSEX CORPORATION
REGISTRATION RIGHTS AGREEMENT
This Agreement dated as of October 17, 2002 is entered into by and
among Essex Corporation, a Virginia corporation (the "Company"), and Global
Environment Strategic Technology Partners, L.P. (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 the Warrant Shares, 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.
"60 Day Warrant" means the warrant purchased by Purchaser
pursuant to the Purchase Agreement that expires on the 60th day after issuance.
"90 Day Warrant" means the warrant purchased by Purchaser
pursuant to the Purchase Agreement that expires on the 90th day after issuance.
"Warrant Shares" means shares of Common Stock acquired by
Purchaser pursuant to the exercise of the 60 Day Warrant and/or the 90 Day
Warrant.
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 or as-exercised 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 or
as-exercised 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:
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(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 three 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 used 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: /S/ XXXXXX X. XXXXX, XX.
Name: Xxxxxx X. Xxxxx, Xx.
Title: CFO
PURCHASER:
Global Environment Strategic Technology
Partners, L.P.
By: /S/ H. XXXXXXX XXXXXXX
Name: H. Xxxxxxx Xxxxxxx
Title: CEO