SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (the "Agreement"), dated as of March 15,
2001, by and among Essex Corporation, a Virginia corporation, with headquarters
located at 0000 Xxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000 (the "Company"), and the
investors listed on the Schedule of Purchasers attached hereto (individually, a
"Purchaser" and collectively, the "Purchasers").
WHEREAS:
A. The Company and the Purchasers 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 "1933 Act").
B. The Purchasers wish to purchase, upon the terms and conditions
stated in this Agreement, an aggregate of 500,000 shares of Common Stock, no par
value (the "Shares"), in the respective amounts set forth opposite each
Purchaser's name on the Schedule of Purchasers.
C. Contemporaneously with the execution and delivery of this Agreement,
the parties hereto are executing and delivering Amendment No. 2 to the
Registration Rights Agreement, dated as of September 7, 2000, in the form
attached hereto as Exhibit A (the "Amended RRA") pursuant to which the Company
has agreed to provide the Purchasers with certain registration rights under the
1933 Act and the rules and regulations promulgated thereunder, and applicable
state securities laws.
NOW THEREFORE, the Company and the Purchasers hereby agree as follows:
1. PURCHASE AND SALE OF SHARES.
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(a) Purchase of Shares. At the Initial Closing or at a
Subsequent Closing, each as defined below, the Company shall issue and sell to
each Purchaser and each Purchaser severally agrees to purchase from the Company
the respective number of Shares set forth opposite such Purchaser's name on the
Schedule of Purchasers at such Closing at a price of $4.00 per Share.
(b) The Initial Closing. The initial closing of the
transactions contemplated hereby (the "Initial Closing") shall take place at the
offices of the Company, 0000 Xxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000 at 9:00
a.m. on March 30, 2001 or such later date on which the conditions specified in
Sections 4 and 5 below have been satisfied or waived. At the Initial Closing,
(A) each Purchaser shall pay the purchase price to the Company for the Shares to
be issued and sold to such Purchaser by check or wire transfer, and (B) the
Company shall deliver to each Purchaser a stock certificate representing the
number of the Shares which such Purchaser is then purchasing hereunder.
(c) Subsequent Closings. Subsequent closings of the
transaction contemplated hereby (the "Subsequent Closings") shall be held as
shown on the Schedule of Purchasers. At each Subsequent Closing, (A) each
Purchaser shall pay the purchase price to the Company for the Shares
to be issued and sold at such Subsequent Closing to such Purchaser by check or
wire transfer, and (B) the Company shall deliver to each Purchaser, a stock
certificate representing the number of the Shares which such Purchaser is then
purchasing hereunder.
(d) Acceleration. If elected by the Company's Board of
Directors, including all of the directors appointed by the Purchasers or the
Purchasers, the Company or the Purchasers may accelerate the obligation of the
Purchasers to purchase the Shares they are required to purchase at Subsequent
Closings. In such event, the Company shall give at least 10 days written notice
to the Purchasers of the date, time and place of the accelerated closing,
including the number of Shares to be purchased and the aggregate purchase price
therefor. At the accelerated closing, (A) each Purchaser shall pay the purchase
price to the Company for the Shares to be issued and sold at such closing to
such Purchaser by check or wire transfer, and (B) the Company shall deliver to
each Purchaser a stock certificate representing the number of the Shares which
such Purchaser is then purchasing hereunder.
2. PURCHASERS' REPRESENTATIONS AND WARRANTIES.
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Each Purchaser represents and warrants with respect only to
itself that:
(a) Investment Purpose. Such Purchaser (i) 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
1933 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 1933 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 1933 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 which 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.
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3. COVENANTS.
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(a) Best Efforts. Each party shall use its best efforts
to timely satisfy each of the conditions to be satisfied by it as provided in
Sections 4 and 5 of this Agreement.
(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 each 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
jurisdictions set forth in the Schedule of Purchasers, and shall provide
evidence of any such action so taken to the Purchasers.
(c) The Company will use the proceeds from the sale of
the Shares substantially for the continued development of the optical
telecommunications device technologies.
4. CONDITIONS TO THE COMPANY'S OBLIGATIONS. The obligation of the
Company to issue and sell the Shares to each Purchaser at the Initial Closing
and at Subsequent Closings is subject to the satisfaction, at or before the
Closing, of each 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 each Purchaser with prior written notice
thereof:
(a) As of the Closing, such Purchaser shall have executed this
Agreement and the Amended 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.
5. CONDITIONS TO EACH PURCHASER'S OBLIGATIONS. The obligation of each
Purchaser hereunder to purchase the Shares from the Company at the Initial
Closing and at Subsequent Closings is subject to the satisfaction, at or before
the date of the Closing, of each of the following conditions, provided that
these conditions are for each 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
Amended RRA and delivered the same to such Purchaser.
(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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(c) The Board of Directors of the Company shall have adopted
resolutions in a form reasonably acceptable to such Purchaser (the
"Resolutions").
(d) The Company shall have made all filings under all
applicable federal and state securities laws necessary to consummate
the issuance of the Shares pursuant to this Agreement in compliance
with such laws.
6. MISCELLANEOUS.
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(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 each 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 any 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 Purchasers.
(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
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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:
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
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 a Purchaser, to it at the address and facsimile number
set forth on the Schedule of Purchasers, with copies to such Purchaser's
representatives as set forth on the Schedule of Purchasers, or at 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
Purchasers contained in Section 2 and the agreements and covenants set forth in
Sections 3, 4, and 5 shall survive the Closing. Each Purchaser shall be
responsible only for its own representations, warranties, agreements and
covenants hereunder.
(j) Publicity. The Company and each 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 each 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.
IN WITNESS WHEREOF, the Purchasers and the Company have caused this Securities
Purchase Agreement to be duly executed as of the date first written above.
COMPANY:
ESSEX CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxx
Title: President & CEO
PURCHASERS:
GEF OPTICAL INVESTMENT
COMPANY, LLC
By: /s/ H. Xxxxxxx Xxxxxxx
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Name: H. Xxxxxxx Xxxxxxx
Title: President
NETWORKING VENTURES, L.L.C.
By: /s/ Xxxxxxxx X. Xxxxxx
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Name: Xxxxxxxx X. Xxxxxx
Title: Member
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SCHEDULE OF PURCHASERS
Investor Address Number of Shares Number of Shares
Investor Name And Facsimile Number Initial Closing Subsequent Closings
GEF Optical Investment 0000 Xxx Xxxxxx, X.X., Xxxxx 000 62,500 June 1, 2001 62,500
Company, LLC Xxxxxxxxxx, XX 00000 August 3, 2001 62,500
Attn: Xx. Xxxxx Xxxxxxx, Esq. October 5, 2001 62,500
Fax No. 000-000-0000
Networking Ventures, L.L.C. 0000 Xxxxxxxx Xxxx 62,500 June 1, 2001 62,500
Xxxxxxxx, XX 00000 August 3, 2001 62,500
Attn: Xx. Xxxxxxxx X. Xxxxxx October 5, 2001 62,500
Fax No. 000-000-0000
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EXHIBITS
Exhibit A Form of Amended RRA
(See Exhibit 99.2)
