Document:

ex10_3.htm

Exhibit 10.3

 

STOCKHOLDER SUPPORT AGREEMENT

 

This Stockholder Support Agreement (this “Agreement”) is entered into as of July 25, 2011, by and among Paradigm Holdings, Inc., a Nevada corporation (the “Company”), CACI, INC.—FEDERAL, a Delaware corporation (“Parent”), Hale Capital Partners, LP and EREF PARA, LLC (each a “Stockholder” and collectively the “Stockholders”).  Each Stockholder executes this Agreement solely in such Stockholder’s capacity as a stockholder of the Company.

 

RECITALS

 

WHEREAS, on July 25, 2011, the Board of Directors of the Company adopted an Agreement and Plan of Merger among the Company, Parent and CACI Newco Corporation, a Nevada corporation and a wholly-owned subsidiary of Parent (“Merger Sub”) (as the same may be amended or supplemented, the “Merger Agreement”), providing for, among other things, a plan of merger of Merger Sub with and into the Company (the “Merger”), and unconditionally recommended the plan of merger represented by the Merger Agreement and submitted the same to the stockholders of the Company for approval;

 

WHEREAS, as of the date hereof, each Stockholder is the record holder and beneficial owner (as such term is defined in Rule 13d-3 of the Exchange Act) of (x) that number of shares of (i) common stock, par value $0.01 per share, of the Company (the “Common Stock”) and (ii) Series A-1 Senior Preferred Stock, par value $0.01 per share, of the Company (the “Preferred Stock”), (y) such warrants to purchase that number of shares of Common Stock (the “Warrants”, and as exercised, the “Warrant Shares”) and (z) such aggregate principal amount of senior secured convertible notes (the “Notes”), convertible into Common Stock (as converted, the “Conversion Shares”, and together with any Warrant Shares, Common Stock and Preferred Shares, collectively, the “Subject Shares”, and together with the Warrants and Notes, the “Subject Securities”), in each case as is set forth on Schedule 1 to this Agreement;

 

WHEREAS, under the Merger Agreement, the Stockholders will receive substantial value for their respective Subject Securities; and

 

WHEREAS, as a condition to the willingness of Parent to enter into the Merger Agreement, and as an inducement and in consideration therefor, Parent has requested that the Stockholders enter into this Agreement pursuant to which the Stockholders shall, among other things, consent to the approval of the Merger Agreement and the Merger and agree to support the transactions contemplated thereby, pursuant and subject to the terms and conditions in this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual premises, representations, warranties, covenants and agreements contained herein, the parties hereto, intending to be legally bound, hereby agree as follows:

 

1.             Written Consent and Further Agreement to Vote.

 

(a)           Concurrent with the execution and delivery of this Agreement, each Stockholder shall, pursuant to, and in accordance with, the Bylaws, execute and deliver, or cause to be executed and delivered, to the Company, with a copy to Merger Sub, an action by written consent in the form attached as Exhibit A to this Agreement (the “Written Consent”), which Written Consent shall be irrevocable except as set forth in Section 8.

 

(b)           Each Stockholder agrees with Parent (and not any other stockholder of the Company (each stockholder of the Company other than the Stockholders, an “Other Stockholder” and, collectively, the “Other Stockholders”)) that, during the term of this Agreement, at any meeting of the stockholders of the Company, however called, the Stockholder shall vote (or cause to be voted) the Subject Shares (i) in favor of the Merger, the Merger Agreement and transactions contemplated thereby, and (ii) against the adoption of an Adverse Proposal.  For purposes of this Agreement, the term “Adverse Proposal” means (A) any Acquisition Proposal or (B) any of the following actions (other than the Merger and the other transactions contemplated by the Merger Agreement): (1) any extraordinary corporate transaction, such as a merger, consolidation or other business combination involving the Company or any of its Subsidiaries; (2) any sale, lease or other similar transfer of all or substantially all of the assets of the Company or any of its Subsidiaries, or a reorganization, recapitalization, dissolution or liquidation of the Company or any of its Subsidiaries; (3) any other action, proposal, transaction or agreement that in any way serves to or would reasonably be expected to result in a breach of any covenant, representation or warranty or any other obligation or agreement of the Company under the Merger Agreement or of such Stockholder under this Agreement; or (4) any amendment of the Articles of Incorporation or Bylaws or any other action, proposal, transaction or agreement that in any way serves to or would reasonably be expected to postpone, prevent, materially interfere with or materially and adversely affect the Merger or any of the other transactions contemplated by the Merger Agreement.

 

  

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(c)           If any stockholder vote in respect of the Merger, the Merger Agreement or the transactions contemplated thereby is taken by written consent, the provisions of this Agreement imposing obligations in respect of or in connection with any vote of shareholders shall apply thereto.

 

(d)           If any vote or consent in respect of the Merger, the Merger Agreement or the transactions contemplated thereby is taken by pursuant to the provisions of Annex A of the certificate of incorporation of the Company (the “Certificate of Designations of the Preferred Stock”), the Notes or the Warrants, the provisions of this Agreement imposing obligations in respect of or in connection with any vote of shareholders shall apply thereto.

 

2.             Irrevocable Proxy.

 

(a)           Grant of Proxy. Each Stockholder hereby appoints Parent and any designee of Parent, each of them individually, such Stockholder’s proxy and attorney-in-fact during the term of this Agreement, with full power of substitution and re-substitution, to vote, direct the vote or act by written consent with respect to the Subject Shares (i) in accordance with Section 1 hereof and (ii) to sign its name (as a stockholder) to any consent, certificate or other document relating to the Company that the law of the State of Nevada or the rules of any bank, broker or depositary may permit or require in connection with any matter referred to in Section 1. This proxy is given to secure the performance of the duties of each Stockholder under this Agreement and its existence will not be deemed to relieve any Stockholder of its obligations under Section 1. Each Stockholder affirms that this proxy is coupled with an interest and is irrevocable until termination of this Agreement pursuant to Section 8, whereupon such proxy and power of attorney shall automatically terminate and be deemed null and void. Each Stockholder will take such further action or execute such other instruments as may be necessary to effectuate the intent of this proxy. The proxy granted herein is intended to comply with the requirements of Section 78.355(5) of the NRS applicable to irrevocable proxies. The proxy granted herein shall not be revoked when the interest with which it is coupled is extinguished. The power of attorney granted by each Stockholder herein is a durable power of attorney and shall survive the dissolution, bankruptcy, death or incapacity of such Stockholder.

 

(b)           Other Proxies Revoked. Each Stockholder represents that any proxy heretofore given in respect of the Subject Shares is not irrevocable, has revoked any and all such proxies, and hereby revokes any and all such proxies to the extent not previously revoked.

 

  

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3.             Restrictions on Transfers of Beneficial Ownership. During the term of this Agreement, each Stockholder will not, directly or indirectly: (a) except (i) pursuant to the terms of this Agreement, (ii) for the redemption of the Preferred Stock as required by the Certificate of Designations of Preferred Stock and (iii) for the cancellation of Subject Securities at the Effective Time pursuant to the terms of the Merger Agreement and the Termination Agreement, offer for sale, sell, transfer, tender, pledge, encumber, assign or otherwise dispose of (each, a “Transfer”), or enter into any contract, option or other arrangement or understanding with respect to or consent to the offer for the sale, transfer, tender, pledge, encumbrance, assignment or other disposition of, any or all of the Subject Shares (other than a transfer by the Stockholder to an Affiliate of such Stockholder that has entered into an agreement in the form of this Agreement with Parent or expressly agreed to be bound by the terms and conditions of this Agreement in a written agreement reasonably acceptable to Parent); (b) except pursuant to the terms of this Agreement or as otherwise called for by the Merger Agreement or the Termination Agreement, (i) deposit any Subject Shares into a voting trust, (ii) grant any proxies or powers of attorney or enter into a voting agreement with respect to any of the Subject Shares, or (iii) enter into any other agreement or understanding with respect to the voting of any of the Subject Shares; (c) convert or consent to the conversion of any of the Subject Shares into any other class of capital stock or other securities of the Company; or (d) take any action that would reasonably be expected to make any of its representations or warranties contained herein untrue or incorrect in any material respect or have the effect of impairing the ability of Stockholder to perform Stockholder’s obligations under this Agreement or preventing or delaying the Merger or consummation of any of the other transactions contemplated by the Merger Agreement. Any attempted Transfer of the Subject Shares or any interest therein in violation of this Section 3 shall be null and void ab initio.

 

4.             No Solicitation. Each Stockholder shall, and shall cause each agent and representative (including any investment banker, financial advisor, attorney, accountant or other representative retained by the Stockholder or any such representative) (each, a “Stockholder Representative”) of the Stockholder to, immediately cease any discussions or negotiations with any other parties conducted heretofore (other than Parent and Merger Sub) with respect to any Acquisition Proposal. Each Stockholder shall not, nor shall it permit its Stockholder Representatives to, directly or indirectly through another Person: (i) solicit, initiate, induce, knowingly facilitate or encourage the making by any Person (other than Parent and its Subsidiaries) of any Acquisition Proposal or Acquisition Inquiry or take any actions that would reasonably be expected to lead to any Acquisition Proposal or Acquisition Inquiry; (ii) enter into discussions or negotiations with any Person in furtherance of an Acquisition Inquiry or to obtain an Acquisition Proposal; (iii) approve, endorse or recommend any Acquisition Proposal or Acquisition Inquiry; (iv) furnish any nonpublic information regarding the Company or any of its Subsidiaries to any Person in connection with or in response to an Acquisition Proposal or Acquisition Inquiry; or (v) enter into any Contract with respect to any Acquisition Proposal or Acquisition Inquiry.  Without limiting the foregoing, it is agreed that any violation of the foregoing by any Stockholder shall be a violation of Section 6.4 of the Merger Agreement by the Company.

 

5.             No Limitations on Stockholder’s Action as a Director. Each Stockholder executes this Agreement solely in such Stockholder’s capacity as the beneficial owner and record holder of such Stockholder’s Subject Shares, and nothing in this Agreement shall limit or restrict any partner, member, director, officer, employee of any Stockholder or its Affiliates, who is or becomes during the term hereof a member of the board of directors of the Company or any of its Subsidiaries from acting, omitting to act or refraining from taking any action, in such person’s capacity as a member of the board of directors of the Company or any of its Subsidiaries, including all actions taken by such person in accordance with such person’s fiduciary duties as a director of the Company or any of its Subsidiaries or otherwise as permitted by the Merger Agreement.

 

  

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6.             Representations and Warranties of Stockholder. Each Stockholder hereby represents and warrants to Parent as follows:

 

(a)           Ownership. Except as otherwise set forth on Schedule 1, such Stockholder is the record and beneficial owner of, and has good and valid title to, its Subject Shares, free and clear of any liens, pledges, hypothecations, charges, mortgages, security interests, encumbrances, and community property interests. Except as expressly set forth on Schedule 1, there are no options, warrants or other rights, agreements, voting trusts, proxies, arrangements or commitments of any character to which such Stockholder is a party relating to the pledge, disposition or voting of any of the Subject Shares. Except as expressly set forth on Schedule 1, except for its Subject Shares, such Stockholder does not beneficially own any securities of the Company on the date hereof, and does not, directly or indirectly, beneficially own or have any option, warrant or other right to acquire any securities of the Company that are or may by their terms become entitled to vote or any securities that are convertible or exchangeable into or exercisable for any securities of the Company that are or may by their terms become entitled to vote.

 

(b)           Organization, Authority. Such Stockholder has all requisite power and authority and legal capacity to enter into, execute and deliver this Agreement and to perform fully the transactions contemplated hereby, and has taken all necessary action to authorize the execution, delivery and performance of this Agreement.

 

(c)           Execution and Delivery. This Agreement has been duly executed and delivered by such Stockholder and constitutes a valid and binding obligation of the Stockholder enforceable against the Stockholder in accordance with its terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, reorganization, insolvency, moratorium, liquidation and other laws relating to, or affecting the enforceability of creditors’ rights and remedies generally.

 

(d)           No Conflicts. The execution and delivery of this Agreement do not, and the consummation of the transactions contemplated hereby and compliance with the provisions hereof will not, conflict with, result in a violation or breach of, or constitute a default (or an event that, with notice or lapse of time or both, would result in a default) or give rise to any right of termination, amendment, cancellation, notice or acceleration under, (i) with respect to Hale Capital Partners, LP, its certificate of limited partnership and other constituent documents, (ii) with respect to EREF PARA, LLC, its limited liability company agreement and other constituent documents, (iii) with respect to all Stockholders, any loan or credit agreement, bond, note, mortgage, indenture, lease or any other contract, agreement, or instrument to which the Stockholder is a party or by which the Stockholder or any of its Subject Shares is bound, or (iv) any law, injunction, judgment, writ, decree, order or ruling applicable to such Stockholder or to the Stockholder’s property or assets.  Subject to appropriate filings under securities laws (which the Stockholder agrees to make promptly), to the extent applicable, no consent, approval or authorization of, or designation, declaration or filing with, any Governmental Entity or other Person on the part of such Stockholder is required in connection with the valid execution and delivery of this Agreement by such Stockholder, the consummation by such Stockholder of the transactions contemplated hereby or compliance by such Stockholder with any of the provisions hereof.

 

(e)           Reliance. Each Stockholder understands and acknowledges that Parent is entering into the Merger Agreement in reliance upon such Stockholder’s execution, delivery and performance under this Agreement.

 

  

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7.             Representations and Warranties of Parent. Parent hereby represents and warrants to the Stockholders as follows:

 

(a)           Organization, Authority. Parent is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Parent has all the requisite power and authority to enter into, execute and deliver this Agreement and to perform fully the transactions contemplated hereby, and has taken all necessary corporate action to authorize the execution, delivery and performance of this Agreement.

 

(b)           Execution and Delivery. This Agreement has been duly executed and delivered by Parent and constitutes a valid and binding obligation of Parent, enforceable against Parent in accordance with its terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, reorganization, insolvency, moratorium, liquidation and other laws relating to, or affecting the enforceability of creditors’ rights and remedies generally.

 

(c)           No Conflicts. Neither the execution and delivery of this Agreement nor the performance by Parent of its obligations hereunder will result in a violation or breach of, or constitute a default (or an event that, with notice or lapse of time or both, would result in a default) or give rise to any right of termination, amendment, cancellation, or acceleration under, (i) Parent’s certificate of incorporation, bylaws or other constituent documents, (ii) any contract, obligation, commitment, agreement, restriction, understanding, or instrument to which Parent is a party or by which Parent is bound, (iii) any injunction, judgment, writ, decree, order or ruling applicable to Parent, or (iv) subject to the filing of any reports under Sections 13(d) and 16 of the Exchange Act as may be required in connection with this Agreement or the Merger Agreement and the transactions contemplated hereby and thereby, any law, statute, rule or regulation applicable to Parent. Subject to appropriate filings under securities laws (which Parent agrees to make promptly), to the extent applicable, no consent, approval or authorization of, or designation, declaration or filing with, any Governmental Entity or other Person on the part of Parent is required in connection with the valid execution and delivery of this Agreement by Parent, the consummation by Parent of the transactions contemplated hereby or compliance by Parent with any of the provisions hereof.

 

8.             Termination. Except as otherwise set forth below, this Agreement shall terminate, and the provisions hereof shall be of no further force or effect, upon the earliest of:

 

(a)           the Effective Time;

 

(b)           the date upon which the Merger Agreement is validly terminated in accordance with its terms; and

 

(c)           the delivery of written notice by Parent to the Stockholders of the termination of this Agreement.

 

If this Agreement terminates pursuant to this Section 8, then any written consent delivered by the Stockholders pursuant to Section 1 and the proxies granted by each Stockholder pursuant to Section 2(a) shall terminate and be deemed null and void.  If this Agreement terminates pursuant to Sections 8(b) or 8(c) above, then any release granted pursuant to Section 9 shall terminate and be deemed null and void.

 

9.             Release.

 

(a)           Except with respect to obligations of the Company to each Stockholder arising pursuant to the Notes and the Warrants held by such Stockholder, if any, which release shall be governed by the terms and conditions of the Merger Agreement and the Termination Agreement, effective as of the Effective Time and in consideration of the payment or right to receive payment of the portion of the Merger Consideration and other amounts, whether or not payable as of the Closing, to which such Stockholder is entitled pursuant to the Merger Agreement and the Termination Agreement, each Stockholder (in its capacity as such), (i) on behalf of the Stockholder and its Affiliates and their respective officers, directors, agents, employees, stockholders, equity holders and Subsidiaries, and (ii) on behalf of any other agents, successors, assigns and any other Person claiming by, through or under any of the foregoing (collectively, the “Releasing Parties”), hereby fully, forever, irrevocably and unconditionally waives, releases and discharges the Company and its Affiliates and their respective officers, directors, agents, employees, stockholders, equity holders, Subsidiaries, successors and assigns (the “Released Parties”) from any and all actions, causes of action, suits, debts, covenants, controversies, damages, judgments, executions, claims and demands whatsoever, based upon any theory of foreign, federal, state or local statutory, regulatory or common law, and any and all claims and demands of whatever kind or character, whether vicarious, derivative, or direct, whether fixed, contingent or liquidated, or whether known or unknown, that may be or could have been asserted, with respect to or arising during or in connection with the period commencing at the beginning of time and ending at the date hereof out of any event, occurrence, act or failure to act relating to the Company (collectively, the “Released Matters”).  Each Stockholder represents and warrants that it has not assigned any of its claims released by this Section 9(a).

 

  

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(b)           Such Stockholder represents and warrants that, to the Stockholder’s actual knowledge, no event has occurred or circumstance exists with respect to any Affiliate of such Stockholder that is not a Releasing Party that would reasonably be expected to give rise to or serve as a valid basis for the commencement of any Action by or against the Released Parties related to the Released Matters.

 

(c)           The foregoing shall not constitute a release of claims or any other matter with respect to (i) payment of any portion of the Merger Consideration and other amounts to which a Stockholder is entitled pursuant to the terms and conditions of the Merger Agreement, the Termination Agreement and the Certificate of Designations of the Preferred Stock, (ii) any of the rights of any Stockholder or any obligations of the Released Parties to such Stockholder arising under the Merger Agreement or the Termination Agreement, and (iii) any of the rights of a Releasing Party to indemnification from the Company in such Releasing Party’s capacity as a director or officer of the Company, including, without limitation, for actions or inactions by such Releasing Party or any of its Affiliates.  Each Stockholder acknowledges and agrees that payment of the Merger Consideration and other amounts payable under the Merger Agreement for its Subject Securities may be subject to the application and/or withholding and reporting of applicable payroll taxes as required by law and authorizes the withholding of all applicable taxes from the payment of such consideration.  Each Stockholder, on behalf of itself and each of its Releasing Parties hereby irrevocably agrees not to assert, directly or indirectly, any claim or demand, or to commence, institute or cause to be commenced or instituted, any proceeding of any kind against any Released Party based upon any matter released hereby.

 

(d)           Each Stockholder hereby waives all rights under Section 1542 of the Civil Code of the State of California, and any other similar law, rule, provision or statute of Nevada or any other jurisdiction, which states in full (or otherwise in substance) as follows:

 

 

“A General Release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.”

 

  

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Thus, notwithstanding the provisions of Section 1542 and any similar law, rule, provision or statute of Nevada or any other jurisdiction which operates to bar the release of unknown claims, and to implement a full and complete release and discharge of claims as set forth above, each Stockholder expressly acknowledges that, subject to Section 9(c), this Section 9 is intended to include in its effect, without limitation, all claims such Stockholder does not know or suspect to exist in such Stockholder’s favor at the time of signing this Agreement, and that this Agreement contemplates the extinguishment of any such claim or claims.

 

(e)           Each Stockholder represents and warrants that such Stockholder (i) has read this Agreement, including the above waiver, (ii) has consulted counsel or has had the opportunity to consult counsel about this Agreement and specifically about the waiver provided in this Section 9, (iii) understands this Agreement and such waiver, and (iv) freely and knowingly enters into this Agreement.  Each Stockholder acknowledges that such Stockholder may later discover facts different from or in addition to those such Stockholder now knows or believes to be true regarding the matters released in this Section 9, and even so agrees that the releases and agreements contained in this Agreement shall remain effective in all respects notwithstanding any later discovery of any different or additional facts.

 

(f)           This Section 9 shall be of no force and effect unless and until the Effective Time has occurred and shall terminate automatically upon the date on which the Merger Agreement is terminated in accordance with its terms.

 

10.           Miscellaneous.

 

(a)           Adjustments. In the event (i) of any stock dividend, stock split, recapitalization, reclassification, combination or exchange of shares of capital stock or other securities of the Company on, of or affecting the Subject Shares or the like or any other action that would have the effect of changing the Stockholder’s ownership of the Subject Shares or (ii) the Stockholder becomes the record holder or beneficial owner of any additional shares of Common Stock or Preferred Stock (including any such shares acquired by exercise of options, warrants or otherwise), then the terms of this Agreement will apply to all of the shares of Common Stock and Preferred Stock held by the Stockholder immediately following the effectiveness of the events described in clause (i) or the Stockholder becoming the record holder or beneficial owner thereof, as described in clause (ii), as though they were Subject Shares hereunder. Notwithstanding the foregoing, each Stockholder shall immediately notify Parent in writing, and obtain the prior written consent of Parent, if it intends to purchase or otherwise acquire beneficial ownership, voting or other rights to any capital stock of the Company after the date hereof, and to promptly notify Parent of the number of any new shares of capital stock of the Company acquired by the Stockholder, if any, after the date hereof.

 

(b)           Waiver of Dissenter’s Rights. Each Stockholder hereby consents to and approves the actions taken by the Company Board in approving the Merger Agreement and this Agreement, the Merger and the other transactions contemplated by the Merger Agreement. Each Stockholder hereby waives, and agrees not to exercise or assert, any right of dissent or similar rights under the NRS or other applicable law in connection with the Merger.

 

(c)           Publication. Each Stockholder hereby permits Parent to publish and disclose in all documents and schedules filed with the SEC or The New York Stock Exchange its identity and ownership of the Subject Shares and the nature of its commitments, arrangements and understandings pursuant to this Agreement; provided, however, that such publication and disclosure shall be subject to the prior review and comment by the Stockholder.  Except as provided above or as may be required by applicable law, without the prior written consent of the other parties, (i) none of the Stockholders nor Parent shall issue any press release or make any other public statement with respect to this Agreement or the terms hereof and (ii) no Stockholder shall any issue any press release or make any other public statement with respect to the Merger Agreement, the Merger or any other transactions contemplated by the Merger Agreement.

 

  

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(d)           Further Actions. Each of the parties hereto agrees that it will execute and deliver such other documents and instruments and to take such further actions as from time to time may be necessary or appropriate to effectuate this Agreement.

 

(e)           Notices. All notices and other communications hereunder shall be in writing and shall be deemed duly given if delivered personally, delivered by UPS or other nationally recognized overnight courier service or sent via facsimile to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

 

If to a Stockholder, to such Stockholder’s address on the signature page hereto,

with copies (which shall not constitute notice) to:

 

Greenberg Traurig, LLP

MetLife Building

200 Park Avenue

New York, NY 10166

Attention:  Robert H. Cohen and Anthony J. Marsico

Fax:  (212) 801-6400

and the Company and Holland & Knight LLP at the addresses below.

If to the Company:

Paradigm Holdings, Inc.

9715 Key West Avenue, 3rd Floor

Rockville, Maryland  20850

Attention: Peter B. LaMontagne

Fax:  (240) 580-1902

 

with a copy (which shall not constitute notice) to:

 

Holland & Knight LLP

1600 Tysons Boulevard, Suite 700

McLean, Virginia  22102

Attention:  Jonathan Wolcott

Fax:  (703) 720-8610

If to Parent:

 

CACI International Inc

1100 North Glebe Road

Arlington, VA 22201

Attention:  President

Fax:  (703) 841-2891

 

with copies (which shall not constitute notice) to:

 

  

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CACI International Inc

 

1100 North Glebe Road

Arlington, VA 22201

Attention:  Legal Division

Fax:  (703) 841-2850

 

and

 

Sheppard, Mullin, Richter & Hampton, LLP

1300 I Street, NW

11th Floor East

Washington, D.C. 20005

Attention:  Robert L. Magielnicki and Lucantonio N. Salvi

Fax:  (202) 312-9454

 

All such communications shall be deemed to have been duly given: (i) in the case of a notice delivered by hand, when personally delivered, (ii) in the case of a notice sent by facsimile, upon transmission subject to telephone and automated confirmation of receipt and (iii) in the case of a notice sent by overnight courier service, the date delivered at the designated address, in each case given or addressed as aforesaid.

 

(f)           Assignment; Binding Effect.  Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto, in whole or in part (whether by operation of law or otherwise), without the prior written consent of the other parties, except that Parent may assign this Agreement to a wholly-owned Subsidiary of Parent in connection with the concurrent assignment of the Merger Agreement to such Subsidiary of Parent, but no such assignment shall relieve Parent of its obligations hereunder.  Any attempt to make any such assignment without such consent shall be null and void. Subject to the preceding sentences, this Agreement shall be binding upon, inure to the benefit of and be enforceable by, the parties, their respective successors and permitted assigns.

 

(g)           Third Party Beneficiaries. Notwithstanding anything contained in this Agreement to the contrary, nothing in this Agreement, expressed or implied, is intended to or shall confer on any Person other than the parties hereto or their respective permitted successors and assigns any rights, benefits, remedies, obligations or liabilities whatsoever under or by reason of this Agreement.

 

(h)           Entire Agreement.  This Agreement, the Merger Agreement and the Termination Agreement constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, either written or oral, among the parties, or any of them, with respect thereto.

 

(i)           Waivers.  Any agreement on the part of a party to waive any provision of this Agreement, or to extend the time for any performance hereunder, will be valid only if set forth in an instrument in writing signed on behalf of such party. No action taken pursuant to this Agreement, including any investigation by or on behalf of any party, nor any failure or delay on the part of any party hereto in the exercise of any right hereunder, shall be deemed to constitute a waiver by the party taking such action of compliance of any representations, warranties, covenants or agreements contained in this Agreement. The waiver by any party hereto of a breach of any provision hereunder shall not operate or be construed as a waiver of any prior or subsequent breach of the same or any other provision hereunder.

 

  

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(j)           Interpretation.  The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. In this Agreement, unless a contrary intention appears, (i) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Section or other subdivision, (ii) the word “including” means “including without limitation” and is intended by the parties to be by way of example rather than limitation, (iii) reference to any Section means such Section hereof, (iv) any reference in this Agreement to $ shall mean U.S. dollars, and (v) any reference in this Agreement to gender shall include both genders, and words imparting the singular number only shall include the plural and vice versa.  No provision of this Agreement shall be interpreted or construed against any party hereto solely because such party or its legal representative drafted such provision. When calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded. If the last day of such period is a non-Business Day, the period in question shall end on the next succeeding Business Day.

 

(k)           Governing Law. THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS, INCLUDING VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS EXECUTED AND TO BE PERFORMED WHOLLY WITHIN SUCH STATE WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF (EXCEPT AS EXPRESSLY PROVIDED HEREIN THAT THE NRS SHALL BE APPLICABLE OR OTHERWISE INSOFAR AS NEVADA CORPORATION LAW SHALL BE MANDATORILY APPLICABLE HERETO).

 

(l)           Jurisdiction.  Each of the parties hereto hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction of the Relevant Courts for any litigation arising out of or relating to this Agreement (and agrees not to commence any litigation relating thereto except in such courts), waives any objection to the laying of venue of any such litigation in the Relevant Courts and agrees not to plead or claim in any Relevant Court that such litigation brought therein has been brought in an inconvenient forum; provided, however, that nothing in this Section 10(l) is intended to waive the right of any party to remove any such action or proceeding commenced in any such state court to an appropriate federal court to the extent the basis for such removal exists under applicable law.  The parties agree that the mailing by certified or registered mail, return receipt requested, of any process required by any Relevant Court, to the address specified in Section 10(e), shall constitute valid and lawful service of process against them, without necessity for service by any other means provided by statute or rule of court.

 

(m)           Enforcement.  The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached.  It is accordingly agreed that the parties hereto shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, this being in addition to any other remedy to which they are entitled at law or in equity.  Each party agrees that it will not oppose the granting of an injunction, specific performance or other equitable relief on the basis that the party seeking such injunction, specific performance or other equitable relief has an adequate remedy at law or that any award of specific performance is not an appropriate remedy for any reason at law or equity. In the event that any party seeks an injunction or injunctions to prevent breaches of this Agreement or to enforce specifically the terms and provisions of this Agreement, such party shall not be required to provide any bond or other security in connection with any such injunction or other order, decree, ruling or judgment.

 

  

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(n)           Counterparts.  This Agreement may be executed in two or more counterparts (including by facsimile or electronic data file), each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement.

 

(o)           Severability. Should any provision of this Agreement be judicially declared to be invalid, unenforceable or void, such decision will not have the effect of invalidating or voiding the remainder of this Agreement, and the part or parts of this Agreement so held to be invalid, unenforceable or void will be deemed to have been stricken herefrom, and the remainder will have the same force and effectiveness as if such stricken part or parts had never been included herein.

 

(p)           Waiver of Trial by Jury.  EACH PARTY TO THIS AGREEMENT WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION TO ENFORCE OR DEFEND ANY RIGHT UNDER THIS AGREEMENT OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED, OR WHICH IN THE FUTURE MAY BE DELIVERED, IN CONNECTION WITH THE MERGER OR THE OTHER TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

 

(q)           Voidability. If prior to the execution hereof, the Company Board shall not have duly and validly authorized and approved by all necessary corporate action this Agreement, the Merger Agreement and the transactions contemplated hereby and thereby, so that by the execution and delivery hereof Parent or Merger Sub would become, or could reasonably be expected to become, an “Interested stockholder” with whom the Company would be prevented for any period pursuant to the NRS from engaging in any “combination” (as such terms are defined in Section 78.411 et seq. of the NRS), then this Agreement shall be void and unenforceable until such time as such authorization and approval shall have been duly and validly obtained (at which time this Agreement shall become automatically effective and enforceable without further action by any party hereto).

 

(r)           Amendment. This Agreement may not be amended except by an instrument in writing signed by each of the parties hereto.

 

(s)           Defined Terms. Capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings given to them in the Merger Agreement.  Notwithstanding anything to the contrary contained herein, for purposes of this Agreement only, the Stockholders, on the one hand, and the Company, on the other hand, shall be deemed not to be Affiliates of each other (or of any other Person who would otherwise be an Affiliate as a result of an Affiliate relationship between the Stockholders, on the one hand, and the Company, on the other hand).

 

10.2           Acknowledgements.  Each Stockholder hereby waives any and all notices and consent rights (other than consent rights satisfied by this Agreement, the Written Consent and the Termination Agreement), solely with respect to the Merger Agreement and all agreements, understandings or arrangements entered into connection with the Merger Agreement, including this Agreement (collectively, the “Transaction Documents”), and with respect to the transactions contemplated by the Transaction Documents, to which it is otherwise entitled under the terms of the Certificate of Designations and all other agreements, understandings and arrangements to which the Stockholder or its Affiliates are party with the Company; provided that, this waiver shall not apply to any notices or consents rights afforded to such Stockholder under the Transaction Documents.

 

  

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10.3         Independent Nature of Stockholders’ Obligations and Rights.

 

(1)           The obligations of each Stockholder under this Agreement or any other Transaction Document are several and not joint with the obligations of any Other Stockholder, and no Stockholder shall be responsible in any way for the performance of the obligations of any Other Stockholder under the Transaction Documents.  Nothing contained herein or in any other Transaction Document, and no action taken by any Stockholder pursuant hereto or any Other Stockholder pursuant thereto, shall be deemed to constitute the Stockholders, on the one hand, and any Other Stockholder, on the other hand, as (and each of the Company and Parent acknowledges that the Stockholders and the Other Stockholders do not so constitute) a partnership, an association, a joint venture or any other kind of group (including, without limitation, within the meaning of Section 13(d)(3) under the Exchange Act or Rule 13d-5(b)(1) thereunder) or entity, or create a presumption that the Stockholders are (other than with each other) in any way acting in concert or as a group (including, without limitation, within the meaning of Section 13(d)(3) under the Exchange Act or Rule 13d-5(b)(1) thereunder) or entity with respect to such obligations or the transactions contemplated by the Transaction Documents or any matters and neither the Company nor Parent nor any of their respective Affiliates shall assert any such claim, with respect to such obligations or the transactions contemplated by the Transaction Documents.  The decision of the Stockholders to enter into this Agreement and any other Transaction Document to which any Stockholder is a party, and with respect to the performance of its obligations hereunder and thereunder, has been made by the Stockholders independently of any Other Stockholder.

 

(2)           Each of the Company, Parent and the Stockholders confirm that the Stockholders have, independently of any Other Stockholder, participated with Company and Parent in the negotiation of this Agreement and the transactions contemplated by the other Transaction Documents with the advice of its own counsel and advisors.  Each Stockholder shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and it shall not be necessary for any Other Stockholder to be joined as an additional party in any proceeding for such purpose.

 

 [SIGNATURE PAGE TO FOLLOW]

 

  

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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first written above.

 

	  	
Stockholders:

	
HALE CAPITAL PARTNERS, LP

	  
	  	  	  	  
	  	  	  	  
	  	  	By:	
/s/Martin M. Hale, Jr.

	  
	  	  	
Name:  Martin M. Hale, Jr.

	  
	  	  	
Title:  Chief Executive Officer

	  
	  	  	  	  
	  	  	 	
Martin Hale

	  
	  	  	Address:	
570 Lexington Ave., 49th Floor

	  
	  	  	 	
New York, NY 10022

	  
	  	  	Fax:	
212-751-8822

	  
	  	  	  	  
	  	  	  	  
	  	  	
EREF PARA, LLC By: Hale Fund Management, LLC, its managing member

	  
	  	  	  	  
	  	  	  	  
	  	  	By:	
/s/Martin M. Hale, Jr.

	  
	  	  	
Name:  Martin M. Hale, Jr.

	  
	  	  	
Title:  Chief Executive Officer

	  
	  	  	  	  
	  	  	 	
Martin Hale

	  
	  	  	Address:	
570 Lexington Ave., 49th Floor

	  
	  	  	 	
New York, NY 10022

	  
	  	  	Fax:	
212-751-8822

	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	
Company:

	
PARADIGM HOLDINGS, INC.

	  
	  	  	  	  
	  	  	  	  
	  	  	By:	
/s/Peter B. LaMontagne

	  
	  	  	
Name:  Peter B. LaMontagne

	  
	  	  	
Title:  President and CEO

	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	
Parent:

	
CACI, INC.—FEDERAL

	  
	  	  	  	  
	  	  	  	  
	  	  	By:	
/s/Thomas Mutryn

	  
	  	  	
Name:  Thomas Mutryn

	  
	  	  	
Title:  Chief Financial Officer, EVP

	  

 

 

[Signature Page to Hale Capital/EREF PARA Support Agreement]ex10_4.htm

Exhibit 10.4

 

Paradigm holdings, Inc.

9715 Key West Avenue, 3rd Floor

Rockville, MD 20850

July 25, 2011

 

Name

Address

 

Dear ______________:

From time to time we have discussed with the officers and directors of Paradigm Holdings, Inc. (“Paradigm”) the substantial increase in corporate litigation, which can subject officers and directors to expensive litigation risks and large claims for damages.  We have also discussed the uncertainties involved in obtaining and maintaining directors’ and officers’ liability insurance on a reasonable basis as well as the potentially limited scope (and risk of non-renewal) of such insurance as can be obtained.

You have informed us that you are concerned about the level of protection available to you as an officer or director of Paradigm in the present legal climate, and we understand that your willingness to serve or to continue to serve as an officer or director of Paradigm depends upon, among other things, assurance of adequate protection on a long-term basis.  You have also informed us that you know of no pending or threatened claim against you relating to Paradigm.

 

The Articles of Incorporation of Paradigm (the “Charter”) provides that Paradigm will indemnify its corporate officers and directors to the full extent permitted by the applicable statute, which is Section 78.7502 of the Nevada Revised Statutes.  The statute, in turn, authorizes a Nevada corporation to provide indemnification against expenses and certain other losses incurred by a director or officer in any proceeding in which he or she is involved as a result of serving, or having served, as a director, officer, or employee of Paradigm or, at Paradigm’s request, as a director, officer or employee of another corporation or entity.  In addition, Paradigm has the power under Nevada law to enter into arrangements for indemnification on any terms not prohibited by law that the Board of Directors deems to be appropriate.

 

In order to attract and retain your services as an officer or director of Paradigm, Paradigm has agreed to indemnify you to the fullest extent of its authority to do so, subject to the limitations set forth herein.  This letter agreement (“Agreement”) is intended to supplement and confirm the indemnification provisions contained in the Charter of Paradigm.

  

  

  

Paradigm and you (the “Indemnified Party”) by this Agreement agree as follows:

 

1. Indemnification.  Paradigm shall indemnify and hold harmless the Indemnified Party if the Indemnified Party is or was a party or is threatened to be made a party to, or is otherwise involved with, any Proceeding (as such term is defined in Section 20(b)):

 

(i) by reason of the fact that the Indemnified Party is or was a director, officer, employee or agent of Paradigm or any subsidiary of Paradigm,

 

(ii) by reason of any action or inaction on the part of the Indemnified Party taken in the capacity of a director, officer, employee or agent of Paradigm or any subsidiary of Paradigm,

 

(iii) by reason of the fact that the Indemnified Party is or was serving at the request of Paradigm as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, or

 

(iv) by reason of the fact that the Indemnified Party is or was serving at the request of Paradigm in any capacity with respect to any employee benefit plan,

 

against expenses (including reasonable attorneys’ fees), judgments, penalties, fines and amounts paid in settlement (if such settlement is approved in writing in advance by Paradigm, which approval shall not be unreasonably withheld or delayed) actually and reasonably incurred by the Indemnified Party in connection with such Proceeding unless Paradigm shall establish, in accordance with the procedures and standards described in Section 4(e)(i) and Section 4(e)(ii) of this Agreement, that the Indemnified Party was not entitled to indemnification, as described in Section 2.

 

2. Limitation on Indemnification.  Notwithstanding any other provision of this Agreement,

 

(a)  no indemnification shall be paid under this Agreement with respect to claims involving acts or omissions as to which the Indemnified Party is finally adjudicated (by court order or judgment from which no right of appeal exists) not to have acted in good faith in the reasonable belief that the Indemnified Party’s action was in the best interests of Paradigm or, to the extent that such matter relates to service with respect to an employee benefit plan, in the best interests of the participants or beneficiaries of such employee benefit plan;

 

(b)  no indemnification shall be paid under this Agreement with respect to any criminal matter in which the Indemnified Party is finally adjudicated (by court order or judgment from which no right of appeal exists) to have had reasonable cause to believe that the Indemnified Party’s action was unlawful; and

 

  

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(c)  no indemnification for expenses shall be paid under this Agreement in respect of any claim, issue or matter as to which the Indemnified Party shall have been adjudged to be liable to Paradigm unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, the Indemnified Party is fairly and reasonably entitled to indemnification for such expenses which such other court shall deem proper.

 

3. No Employment Agreement.  Nothing contained in this Agreement is intended to create or shall create in the Indemnified Party any right to employment (in the case of a director) or continued employment (in the case of an employee).

 

4. Expenses; Indemnification Procedure.

 

(a) Advancement of Expenses.  Paradigm shall advance all reasonable expenses incurred by the Indemnified Party in connection with the investigation, defense, settlement or appeal of any Proceeding (but not amounts actually paid in settlement of any such Proceeding, which amounts shall be paid under Section 4(e)).  The advances to be made hereunder shall be paid by Paradigm to the Indemnified Party within sixty (60) days following delivery of a written request therefor by the Indemnified Party to Paradigm.

 

(b) Failure to Advance Expenses.  If the Indemnified Party shall have requested an advancement of expenses pursuant to Section 4(a) and if such request shall not have been not paid in full by Paradigm within sixty (60) days after a written request by the Indemnified Party for payment thereof was first received by Paradigm, the Indemnified Party may, but need not, at any time thereafter bring an action against Paradigm to recover the unpaid amount of the claim for advancement of expenses and, subject to Section 18 of this Agreement, the Indemnified Party shall also be entitled to be reimbursed for the expense (including reasonable attorneys’ fees) of bringing such action.

 

(c) Reimbursement to Paradigm.  The Indemnified Party by this Agreement undertakes to repay such amounts advanced only if, and to the extent that, it shall ultimately be determined that the Indemnified Party is not entitled to be indemnified by Paradigm as authorized by this Agreement.

 

(d) Notice; Cooperation by the Indemnified Party.  The Indemnified Party shall give Paradigm prompt notice of the commencement of any Proceeding, or the threat thereof against the Indemnified Party, for which indemnification will or could be sought under this Agreement.  No indemnification shall be provided to the Indemnified Party if he or she shall fail to give notice as provided in this Section 4(d) if Paradigm is or was materially prejudiced by the failure to give such notice.  In addition, the Indemnified Party shall give Paradigm such information and cooperation as it may reasonably require and as shall be within the Indemnified Party’s power.  If for any reason the Indemnified Party is not an employee of Paradigm at the time of any activities performed by the Indemnified Party in connection with the defense of any Proceeding, Paradigm shall compensate the Indemnified Party on the basis of $350.00 per day (or portion thereof) spent by the Indemnified Party on behalf of such activities at the request of Paradigm, and reimburse the Indemnified Party for all related and reasonable out-of-pocket expenses, such compensation and expense reimbursement to be advanced in the manner set forth in Section 4(a).

  

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(e) Procedure for Indemnification.

 

(i) Any amounts payable by Paradigm pursuant to Section 1 shall be paid no later than sixty (60) days after the resolution (by judgment, settlement, dismissal or otherwise) of the claim to which indemnification is sought.  If a claim is brought by the Indemnified Party under this Agreement, under any statute, or under any provision of Paradigm’s Charter or By-Laws, as amended or restated from time to time, which provision provides for indemnification, and if such claim is not paid in full by Paradigm within such time period, the Indemnified Party may, but need not, at any time thereafter bring an action against Paradigm to recover the unpaid amount of the claim and, subject to Section 18 of this Agreement, the Indemnified Party shall also be entitled to be reimbursed for the expense (including reasonable attorneys’ fees) of bringing such action.  It shall be a defense to any such action that the Indemnified Party has not met the standards of conduct which make it permissible under applicable law for Paradigm to indemnify the Indemnified Party for the amount claimed.  Section 4(e)(ii) shall apply to any such determination and the burden of proving such defense shall be on Paradigm.  In addition, the Indemnified Party shall be entitled to receive interim payments of expenses pursuant to Section 4(a) unless and until such defense shall be finally adjudicated by court order or judgment from which no further right of appeal exists.  Paradigm shall not be liable to indemnify the Indemnified Party under this Agreement for any amounts paid in settlement of any action or claim effected without its written consent, which consent shall not be unreasonably withheld or delayed.

 

(ii)  It is the parties' intention (which intention reflects applicable law) that if Paradigm contests the Indemnified Party's right to indemnification, the question of the Indemnified Party's right to indemnification shall be for the court to decide.  The termination of any action or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not create a presumption that the Indemnified Party was not entitled to indemnification under this Agreement.  In addition, neither the failure of Paradigm to have made a determination that indemnification of the Indemnified Party is proper under the circumstances, nor any determination by Paradigm that the Indemnified Party has not met such applicable standard of conduct, shall create a presumption that the Indemnified Party has or has not met the applicable standard of conduct.

 

5. Notice to Insurers.  If, at the time of the receipt of a notice of a claim pursuant to Section 4(d) of this Agreement, Paradigm has in effect any insurance, including, without limitation, directors’ and officers’ liability insurance, which may provide for payment of or reimbursement for such claim, Paradigm shall give prompt notice of the assertion of such claim to each issuer of such insurance in accordance with the procedures set forth in the respective policies.  Paradigm shall thereafter (if it is appropriate to do so pursuant to the terms of the applicable insurance policy) take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnified Party, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.

  

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6. Other Sources of Indemnification.  The Indemnified Party shall not be required to exercise any rights against any other parties (for example, under any insurance policy purchased by Paradigm, the Indemnified Party or any other person or entity) before the Indemnified Party enforces this Agreement.  However, to the extent Paradigm actually indemnifies the Indemnified Party or advances expenses, Paradigm shall be subrogated to (and shall be entitled to enforce) any such rights which the Indemnified Party may have against third parties.  Notwithstanding the foregoing, Paradigm shall have no right to seek reimbursement under insurance policies maintained by the Indemnified Party personally or by the employer of an Indemnified Party who is a non-employee director of Paradigm.  The Indemnified Party shall assist Paradigm in enforcing rights against third parties if Paradigm pays the Indemnified Party's reasonable costs and expenses of doing so.

 

7. Selection of Counsel.  In the event Paradigm shall be obligated under Section 4(a) of this Agreement to pay the expenses of any Proceeding involving the Indemnified Party, Paradigm shall be entitled to participate in such Proceeding and, to the extent it shall wish, to assume the defense of such Proceeding, with counsel chosen by Paradigm and approved by the Indemnified Party, which approval shall not be unreasonably withheld or delayed.  Upon the delivery to the Indemnified Party of written notice of its election to assume such defense, approval of such counsel by the Indemnified Party and retention of such counsel by Paradigm, Paradigm will not be liable to the Indemnified Party under this Agreement for any fees of counsel or other expenses subsequently incurred by the Indemnified Party in connection with the defense of the same Proceeding, except for fees and expenses incurred by the Indemnified Party as a consequence of the Indemnified Party’s obligation to cooperate with Paradigm in the defense of such matters (as set forth in Section 4(d) of this Agreement).  Notwithstanding the foregoing, the reasonable fees and expenses of the Indemnified Party’s counsel shall be paid by Paradigm only if (i) the employment of counsel by the Indemnified Party has been previously authorized by Paradigm, (ii) the Indemnified Party shall have reasonably concluded that, under applicable standards of  professional responsibility applicable to attorneys, there may be a material conflict of interest between Paradigm and the Indemnified Party in the conduct of such defense or that such counsel and the Indemnified Party have fundamental and material disagreements as to the proper method of managing the litigation, or (iii) Paradigm shall not, in fact, have employed counsel to assume the defense of such Proceeding.  The Indemnified Party shall have the right to employ his own counsel in any such Proceeding at the Indemnified Party’s expense.

 

8. Additional Indemnification Rights; Nonexclusivity.

 

(a) Scope.  In the event of any change, after the date of this Agreement, in any applicable law, statute or rule which expands the right of a Nevada corporation such as Paradigm to indemnify a member of its board of directors or an officer, such changes shall, without any further action by Paradigm, be included within the scope of the indemnification provided to the Indemnified Party by, and Paradigm’s obligations under, this Agreement.  In the event of any change in any applicable law, statute or rule that limits or restricts the right of Paradigm to indemnify a member of its Board of Directors or an officer, such changes shall have no effect on this Agreement or the parties’ rights and obligations hereunder, except to the extent specifically required by such law, statute or rule to be applied to this Agreement.

  

- 5 -

  

(b) Nonexclusivity.  The indemnification provided by this Agreement shall not be deemed exclusive of any rights to which the Indemnified Party may be entitled under Paradigm’s Charter or By-Laws, any agreement, any vote of disinterested directors, Nevada law, or otherwise, both as to action in the Indemnified Party's official capacity and as to action or inaction in another capacity while holding such office.  The indemnification provided under this Agreement shall continue as to the Indemnified Party for any action taken or not taken while serving in an indemnified capacity even though he may have ceased to serve in such capacity at the time any covered Proceeding is commenced.

 

9. Partial Indemnification.  If the Indemnified Party is entitled under any provision of this Agreement to indemnification by Paradigm for some or a portion of the expenses, judgments, fines or penalties actually or reasonably incurred by him in the investigation, defense, appeal or settlement of any Proceeding, but not, however, for the total amount thereof, Paradigm shall nevertheless indemnify the Indemnified Party for the portion of such expenses, judgments, fines or penalties to which the Indemnified Party is entitled.

 

10. Mutual Acknowledgment.  Both Paradigm and the Indemnified Party acknowledge that in certain instances, applicable law or applicable public policy could be construed to prohibit Paradigm from indemnifying its directors and officers under this Agreement or otherwise.  Nothing in this Agreement is intended to require or shall be construed as requiring Paradigm to do or fail to do any act in violation of any applicable law.  Paradigm’s inability, as a result of a binding order of any court of competent jurisdiction, to perform its obligations under this Agreement shall not constitute a breach of this Agreement and Paradigm’s compliance with any such order shall constitute compliance with this Agreement.

 

11. Directors’ and Officers’ Liability Insurance.  Paradigm shall, from time to time, make the good faith determination whether or not it is practicable for Paradigm to obtain and maintain a policy or policies of insurance with reputable insurance companies providing the officers and directors of Paradigm with coverage for losses from wrongful acts, or to ensure Paradigm’s performance of its indemnification obligations under this Agreement.  Among other matters, Paradigm may consider the costs of obtaining such insurance coverage, the protection afforded by such coverage and the restrictions or other terms required by such insurance.  In all policies of directors’ and officers’ liability insurance, the Indemnified Party shall be named as an insured in such a manner as to provide the Indemnified Party the same rights and benefits as are accorded to the most favorably insured of Paradigm’s directors, if the Indemnified Party is a director, or of Paradigm’s officers, if the Indemnified Party is not a director of Paradigm but is an officer, or of Paradigm’s key employees, if the Indemnified Party is not an officer or director but is a key employee.  Notwithstanding the foregoing, Paradigm shall have no obligation to obtain or maintain such insurance if Paradigm determines in good faith that such insurance is not reasonably available, if the premium costs for such insurance are disproportionate to the amount of coverage provided, if the coverage provided by such insurance is limited by exclusions so as to provide an insufficient benefit, or if the Indemnified Party is covered by similar insurance maintained by a subsidiary or parent of Paradigm.

  

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12. Severability.  Nothing in this Agreement is intended to require or shall be construed as requiring Paradigm to do or fail to do any act in violation of applicable law.  The provisions of this Agreement shall be severable as provided in this Section 12.  If this Agreement or any portion of this Agreement shall be invalidated on any ground by any court of competent jurisdiction, then Paradigm shall nevertheless indemnify the Indemnified Party to the greatest extent permitted by any applicable law or any applicable portion of this Agreement that shall not have been invalidated, and the balance of this Agreement not so invalidated shall be enforceable in accordance with its terms.

 

13. Exceptions.  Any other provision herein to the contrary notwithstanding, Paradigm shall not be obligated pursuant to the terms of this Agreement:

 

(a) Excluded Acts.  To indemnify the Indemnified Party for any acts or omissions or transactions from which a director, officer, employee or agent may not be relieved of liability under applicable Nevada law; or

 

(b) Claims Initiated by the Indemnified Party.  To indemnify or advance expenses to the Indemnified Party with respect to proceedings or claims initiated or brought voluntarily by the Indemnified Party and not by way of defense, except (i) with respect to proceedings brought to establish or enforce a right to advancement of expenses or indemnification under this Agreement or any other statute or law and (ii) declaratory judgment or similar proceedings brought to obtain a judicial interpretation of an applicable statute or regulation, provided that such indemnification or advancement of expenses may be provided by Paradigm in specific cases if the Board of Directors has approved the initiation or bringing of such suit; or

 

(c) Lack of Good Faith.  To indemnify the Indemnified Party for any expenses incurred by the Indemnified Party with respect to any proceeding instituted by the Indemnified Party to enforce or interpret this Agreement, if a court of competent jurisdiction determines that each of the material assertions made by the Indemnified Party in such proceeding was not made in good faith or was frivolous; or

 

(d) Insured or Other Reimbursed Claims.  To indemnify the Indemnified Party for expenses or liabilities of any type whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes or penalties, and amounts paid in settlement) which have been reimbursed directly to the Indemnified Party, by an insurance carrier under a policy of directors’ and officers’ liability insurance maintained by Paradigm, or otherwise by Paradigm.

 

(e) Claims under Section 16(b).  To indemnify the Indemnified Party for expenses and the payment of profits arising from the purchase and sale by the Indemnified Party of securities in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended (“Exchange Act”), or any similar successor statute.

  

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14. Sale of Assets or Other Business Combination.  In case of (i) the sale or other disposition (excluding mortgage or pledge) of all or substantially all of the assets of Paradigm to another corporation or entity, or (ii) the merger or other business combination of Paradigm with or into another corporation or entity pursuant to which Paradigm will not survive or will survive only as a subsidiary of another corporation or entity, in either case with the stockholders of Paradigm prior to the merger or other business combination holding less than 50% of the voting shares of the merged or combined companies or entities after such merger or other business combination, or in the event of any other similar reorganization involving Paradigm, then, in any case other than the case in which, by operation of law, the obligations of Paradigm under this Agreement automatically become obligations of the acquiring corporation or entity, Paradigm shall cause the acquiring corporation or entity to assume the obligations of Paradigm under this Agreement with respect to the Indemnified Party.

 

15. Duration of Agreement.

 

(a) This Agreement shall be effective as of the date set forth on the first page and shall apply to acts or omissions of the Indemnified Party which occurred prior to such date if the Indemnified Party was an officer, director, employee or other agent of Paradigm or any subsidiary, or was serving at the request of Paradigm or any subsidiary as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, at the time such act or omission occurred.

 

(b) This Agreement shall be effective (a) perpetually if the Closing (as defined below) does not occur or (b) for a term of six (6) years from the date of the consummation of the transactions contemplated by that certain Agreement and Plan of Merger among Paradigm, CACI, Inc.—Federal  and CACI Newco Corporation (the “Closing”, and the applicable effective period, the “Term”).  Paradigm’s obligations under this Agreement shall continuously and irrevocably cover during the Term any and all of the Indemnified Party's covered acts and omissions that occur prior to the Closing (should such Closing occur) and while the Indemnified Party is an officer, director, employee or other agent of Paradigm or any subsidiary, or, if applicable, is serving at the request of Paradigm or any subsidiary as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise.  Such coverage shall apply to Proceedings relating to acts or omissions even if such Proceeding is not initiated until after (or continues beyond) the period in which the Indemnified Person was an officer, director, employee or other agent of Paradigm or any subsidiary, or, if applicable, was serving at the request of Paradigm or any subsidiary as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise.  Paradigm’s obligations under this Agreement shall continue during the Term with regard to covered acts and omissions, notwithstanding the giving of any such notice of termination or any other circumstance whatsoever.  The indemnification provided under this Agreement shall continue during the Term as to the Indemnified Party even though he may have ceased to be a director, officer, employee or agent of Paradigm.

 

16. Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall constitute an original.

  

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17. Successors and Assigns.  This Agreement shall be binding upon Paradigm and its successors and assigns, and shall inure to the benefit of the Indemnified Party and the Indemnified Party’s spouse, estate, heirs and legal representatives.

 

18. Attorneys’ Fees.  In the event that any action is instituted by the Indemnified Party under this Agreement to enforce or interpret any of the terms of this Agreement, the Indemnified Party shall be entitled to be paid all court costs and expenses, including reasonable attorneys’ fees, incurred by the Indemnified Party with respect to such action, unless as a part of such action, a court of competent jurisdiction determines that each of the material assertions made by the Indemnified Party as a basis for such action was not made in good faith or was frivolous.  In the event of an action instituted by or in the name of Paradigm under this Agreement or to enforce or interpret any of the terms of this Agreement, the Indemnified Party shall be entitled to be paid all court costs and expenses, including attorneys’ fees incurred by the Indemnified Party in defense of such action (including with respect to the Indemnified Party’s counterclaims and cross-claims made in such action), unless as a part of such action the court determines that each of the Indemnified Party’s material defenses to such was made in bad faith or was frivolous.

 

19. Notices.  All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed duly given if delivered by hand, sent by facsimile transmission with confirmation of receipt, sent via a reputable overnight courier service with confirmation of receipt requested, or mailed by domestic certified or registered mail with postage prepaid and return receipt requested, to the Indemnified Party at the address on the first page of this Agreement and to Paradigm at the address below (or at such other address for a party as shall be specified by like notice), and shall be deemed given on the date on which delivered by hand or otherwise on the date of receipt as confirmed:

 

Paradigm Holdings, Inc.

9715 Key West Avenue, 3rd Floor

Rockville, MD 20850

Attention:  President

Phone:

Fax:

20. Construction Of Certain Words and Phrases.

 

(a)  The term “expense” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend or investigating a Proceeding.

 

(b)   “Proceeding” shall include any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any other proceeding whether civil, criminal, administrative or investigative, except one initiated by the Indemnified Party.

  

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21. Choice of Law.  This Agreement shall be governed by and its provisions construed in accordance with the laws of the State of Nevada without regard to its conflicts of law rules.

 

22. Consent To Jurisdiction; Choice Of Venue.  Paradigm and the Indemnified Party each by this Agreement irrevocably consents to the jurisdiction of the courts of Virginia and the federal courts within Virginia for all purposes in connection with any action or proceeding which arises out of or relates to this Agreement and agree that any such action or proceeding shall be brought only in the appropriate court of first instance of the Commonwealth of Virginia in Arlington County, or in the United States District Court, Eastern District of Virginia, sitting in Alexandria.

 

23.   Entire Agreement. Except as explicitly provided in Sections 6 or otherwise expressly referred to herein, this Agreement represents the entire agreement between the parties hereto, and there are no other agreements, contracts or understandings between the parties hereto with respect to the subject matter of this Agreement, and any and all prior agreements with respect to the subject matter hereto are superseded in their entirety by this Agreement and therefore null and void.

 

[signatures on following page]

  

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If the foregoing correctly sets forth our understanding, I would appreciate your executing the enclosed counterpart of this Agreement and returning it to me.  Upon your signature this letter agreement shall constitute a binding agreement.

 

	  	
PARADIGM HOLDINGS, INC.

	  	  	  
	  	  	  
	  	
By:

	  
	  	  	
Name:

	  	  	
Title:

	
Accepted and agreed to:

	  
	  	  
	  	  
	  	  

 

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