Document:

Exhibit
10.2

FIRST AMENDMENT

TO

BACKSTOP AGREEMENT

THIS FIRST AMENDMENT (the “First Amendment”) to
the Backstop Agreement dated as of August 16, 2006 (the “Agreement”), by
and by and between J. L. Halsey Corporation (the “Company”) and LDN
Stuyvie Partnership (“LDN”), is entered into as of December 5,
2006.

RECITALS:

WHEREAS, the Company and LDN
desire to amend the Agreement as provided herein pursuant to Section 10(e)
of the Agreement; and

WHEREAS, any capitalized term used herein, and not otherwise defined
herein, shall have the meaning set forth in the Agreement.

AGREEMENTS:

NOW, THEREFORE, in consideration of the foregoing and the
agreements herein contained, the parties hereto covenant and agree as follows:

1.             Section 2 of the Agreement is hereby amended
by adding the following sentence at the end thereof:

Notwithstanding anything to
the contrary contained in this Section 2, in the event the Agreement is
terminated pursuant to clauses (b), (c) or (d) of Section 9 below, for purposes
of the Promissory Note only the term “Closing” shall mean the date of such
termination.

2.             Section 9 of the
Agreement is hereby amended in its entirety to read as follows:

Section 9.               Termination.  This Agreement may be terminated (and in the
case of subsections (e) and (f) below, shall be terminated) at any time prior
to the Closing, as follows:

(a)           by mutual written
consent of the Company and LDN;

(b)           by either the Company
or LDN if any governmental entity shall institute any suit or action
challenging the validity or legality of, or seeking to restrain the
consummation of, the transactions contemplated by this Agreement (including,
without limitation, the issuance of Rights pursuant to the Rights Offering);

(c)           by the Company, in the
event LDN has breached any representation, warranty, or covenant contained in
this Agreement, in any material respect, provided that the Company has notified
LDN of the breach, and the breach has continued without cure for a period of 15
days after the notice of such breach or for such longer 

 

period so long as such
breach is curable by LDN through the exercise of its reasonable efforts, and
LDN continues to exercise such reasonable efforts;

(d)           by LDN, in the event
that the Company has breached any representation, warranty, or covenant
contained in this Agreement, in any material respect, provided that LDN has
notified the Company of the breach, and the breach has continued without cure
for a period of 15 days after the notice of such breach or for such longer
period so long as such breach is curable by the Company through the exercise of
its reasonable efforts, and the Company continues to exercise such reasonable
efforts;

(e)           automatically and
without any action on the part of either of the parties hereto if the
Registration Statement has not been declared effective by the Commission by
5:30 p.m. ET on January 31, 2007; and

(f)            automatically and
without any action on the part of either of the parties hereto if the
Registration Statement has been declared effective by the Commission by 5:30
p.m. ET on January 31, 2007, but the Rights offered in the Rights Offering have
not expired by 11:59 p.m. ET on March 31, 2007.

2.             Except as herein
specifically amended, the Agreement shall continue in full force and effect in
accordance with its terms.

[SIGNATURE PAGE
FOLLOWS]

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IN WITNESS WHEREOF, the parties hereto have duly
executed this First Amendment effective as of the date first written above.

	
  

  	
  J.L. HALSEY CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David R. Burt

  	
   

  
	
   

  	
  Name: David Burt

  	
   

  
	
   

  	
  Its: Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LDN STUYVIE PARTNERSHIP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ William T. Comfort

  	
   

  
	
   

  	
  Name: William T. Comfort

  	
   

  
	
   

  	
  Its: General Partner

  	
   

  
							

 

 A-1Exhibit 10.1

INDEMNIFICATION AGREEMENT

This
Indemnification Agreement (the “Agreement”) is made as of November 30,
2006, by and between SM&A, a Delaware corporation (the “Company”),
and Steven S. Myers (the “Indemnitee”).

RECITALS

A.            The Company and Indemnitee recognize
the increasing difficulty in obtaining liability insurance for directors,
officers and key employees, the significant increases in the cost of such
insurance and the general reductions in the coverage of such insurance.

B.            The Company and Indemnitee further
recognize the substantial increase in corporate litigation in general,
subjecting directors, officers and key employees to expensive litigation risks
at the same time as the availability and coverage of liability insurance has
been severely limited.

C.            Indemnitee does not regard the
current protection available as adequate under the present circumstances, and
Indemnitee and agents of the Company may not be willing to continue to serve as
agents of the Company without additional protection.

D.            The Company desires to attract and
retain the services of highly qualified individuals, such as Indemnitee, and to
indemnify its directors, officers and key employees so as to provide them with
the maximum protection permitted by law.

AGREEMENT

In
consideration of the mutual promises made in this Agreement, and for other good
and valuable consideration, receipt of which is hereby acknowledged, the
Company and Indemnitee hereby agree as follows:

1.             Indemnification.

(a)           Third
Party Proceedings.  The Company shall
indemnify Indemnitee if Indemnitee is or was a party or is threatened to be
made a party to any threatened, pending or completed action, suit, proceeding,
or investigation whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Company) by reason of the fact
that Indemnitee is or was a director, officer, employee or agent of the
Company, or any subsidiary of the Company, by reason of any action or inaction
on the part of Indemnitee while an officer or director or by reason of the fact
that Indemnitee is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys’ fees),
judgments, fines and amounts paid in settlement (if such settlement is approved
in advance by the Company, which approval shall not be unreasonably withheld)
actually and reasonably incurred by Indemnitee in connection with such action,
suit or proceeding if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe Indemnitee’s conduct was unlawful.  The

 

termination
of any action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that Indemnitee did not act in good faith and in a manner
which Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company, or, with respect to any criminal action or
proceeding, that Indemnitee had reasonable cause to believe that Indemnitee’s
conduct was unlawful.

(b)           Proceedings
By or in the Right of the Company. 
The Company shall indemnify Indemnitee if Indemnitee was or is a party
or is threatened to be made a party to any threatened, pending or completed
action or proceeding by or in the right of the Company or any subsidiary of the
Company to procure a judgment in its favor by reason of the fact that
Indemnitee is or was a director, officer, employee or agent of the Company, or
any subsidiary of the Company, by reason of any action or inaction on the part of
Indemnitee while an officer or director or by reason of the fact that
Indemnitee is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys’ fees) and, to
the fullest extent permitted by law, amounts paid in settlement (if such
settlement is approved in advance by the Company, which approval shall not be
unreasonably withheld), in each case to the extent actually and reasonably
incurred by Indemnitee in connection with the defense or settlement of such
action or suit if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company and its stockholders, except that no indemnification shall be made in
respect of any claim, issue or matter as to which Indemnitee shall have been
finally adjudicated by court order or judgment to be liable to the Company in
the performance of Indemnitee’s duty to the Company and its stockholders unless
and only to the extent that the court in which such action or proceeding is or
was pending shall determine upon application that, in view of all the
circumstances of the case, Indemnitee is fairly and reasonably entitled to
indemnity for such expenses which such court shall deem proper.

(c)           Mandatory
Payment of Expenses.  To the extent
that Indemnitee has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in Section 1(a) or Section 1(b) or
the defense of any claim, issue or matter therein, Indemnitee shall be
indemnified against expenses (including attorneys’ fees) actually and
reasonably incurred by Indemnitee in connection therewith.

(d)           Exceptions.
Any other provision herein to the contrary notwithstanding, the Company shall
not be obligated pursuant to the terms of this Agreement:

(i)            Claims Initiated by Indemnitee.  To indemnify or advance expenses to
Indemnitee with respect to proceedings or claims initiated or brought
voluntarily by Indemnitee and not by way of defense, except with respect to
proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other statute or law or otherwise as required under
Section 145 of the Delaware General Corporation Law, but such indemnification
or advancement of expenses 

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may be provided by the
Company in specific cases if the Board of Directors finds it to be appropriate;
or

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

2.             No Employment Rights.  Nothing contained in this Agreement is
intended to create in Indemnitee any right to continued employment. 

3.             Expenses; Indemnification
Procedure.

(a)           Advancement
of Expenses.  The Company shall
advance all expenses incurred by Indemnitee in connection with the investigation,
defense, settlement or appeal of any civil or criminal action, suit or
proceeding referred to in Section 1(a) or Section 1(b) hereof (including
amounts actually paid in settlement of any such action, suit or proceeding).  Indemnitee hereby undertakes to repay such
amounts advanced only if, and to the extent that, it shall ultimately be
determined that Indemnitee is not entitled to be indemnified by the Company as
authorized hereby.

(b)           Notice/Cooperation
by Indemnitee.  Indemnitee shall, as
a condition precedent to his or her right to be indemnified under this
Agreement, give the Company notice in writing as soon as practicable of any
claim made against Indemnitee for which indemnification will or could be sought
under this Agreement.  Notice to the Company
shall be directed to the President or the Chief Executive Officer of the
Company and shall be given in accordance with the provisions of Section 11(d)
below.  In addition, Indemnitee shall
give the Company such information and cooperation as it may reasonably require
and as shall be within Indemnitee’s power.

(c)           Procedure.  Any indemnification and advances provided for
in Section 1 and this Section 3 shall be made no later than thirty (30)
days after receipt of the written request of Indemnitee.  If a claim under this Agreement, under any
statute, or under any provision of the Company’s Certificate of Incorporation
or Bylaws providing for indemnification, is not paid in full by the Company
within thirty (30) days after a written request for payment thereof has first
been received by the Company, Indemnitee may, but need not, at any time
thereafter bring an action against the Company to recover the unpaid amount of
the claim and, subject to Section 10 of this Agreement, Indemnitee shall also
be entitled to be paid for the expenses (including attorneys’ fees) of bringing
such action.  It shall be a defense to
any such action (other than an action brought to enforce a claim for expenses
incurred in connection with any action, suit or proceeding in advance of its
final disposition) that Indemnitee has not met the standards of conduct which
make it permissible under applicable law for the Company to indemnify
Indemnitee for the amount claimed, but the burden of proving such defense shall
be on the Company and Indemnitee shall be entitled to receive interim payments
of expenses pursuant to Section 3(a) unless and until such defense may be
finally adjudicated by court order or judgment from which no further right of
appeal exists.  It is the parties’
intention that if the Company contests Indemnitee’s right to 

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indemnification,
the question of Indemnitee’s right to indemnification shall be for the court to
decide, and neither the failure of the Company (including its Board of
Directors, any committee or subgroup of the Board of Directors, independent
legal counsel, or its stockholders) to have made a determination that
indemnification of Indemnitee is proper in the circumstances because Indemnitee
has met the applicable standard of conduct required by applicable law, nor an
actual determination by the Company (including its Board of Directors, any
committee or subgroup of the Board of Directors, independent legal counsel, or
its stockholders) that Indemnitee has not met such applicable standard of
conduct, shall create a presumption that Indemnitee has or has not met the
applicable standard of conduct.

(d)           Notice
to Insurers.  If, at the time of the
receipt of a notice of a claim pursuant to Section 3(b) hereof, the Company has
director and officer liability insurance in effect, the Company shall give
prompt notice of the commencement of such proceeding to the insurers in
accordance with the procedures set forth in the respective policies.  The Company shall thereafter take all necessary
or desirable action to cause such insurers to pay, on behalf of the Indemnitee,
all amounts payable as a result of such proceeding in accordance with the terms
of such policies.

(e)           Selection
of Counsel.  In the event the Company
shall be obligated under Section 3(a) hereof to pay the expenses of any
proceeding against Indemnitee, the Company, if appropriate, shall be entitled
to assume the defense of such proceeding, with counsel approved by Indemnitee,
upon the delivery to Indemnitee of written notice of its election so to do.  After delivery of such notice, approval of
such counsel by Indemnitee and the retention of such counsel by the Company,
the Company will not be liable to Indemnitee under this Agreement for any fees
of counsel subsequently incurred by Indemnitee with respect to the same
proceeding, provided that (i) Indemnitee shall have the right to employ counsel
in any such proceeding at Indemnitee’s expense; and (ii) if (A) the employment
of counsel by Indemnitee has been previously authorized by the Company, (B)
Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and Indemnitee in the conduct of any such defense
or (C) the Company shall not, in fact, have employed counsel to assume the
defense of such proceeding, then the fees and expenses of Indemnitee’s counsel
shall be at the expense of the Company.

4.             Additional Indemnification
Rights; Nonexclusivity.  

(a)           Scope.  Notwithstanding any other provision of this
Agreement, the Company hereby agrees to indemnify the Indemnitee to the fullest
extent permitted by law, notwithstanding that such indemnification is not
specifically authorized by the other provisions of this Agreement, the Company’s
Certificate of Incorporation, the Company’s Bylaws or by statute.  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 Delaware corporation to indemnify a member of its board of directors or an
officer, such changes shall be deemed to be within the purview of Indemnitee’s
rights and the Company’s obligations under this Agreement.  In the event of any change in any applicable
law, statute or rule which narrows the right of a Delaware corporation to
indemnify a member of its board of directors or an officer, such changes, to
the extent not otherwise required by such law, statute or rule to be 

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applied
to this Agreement shall have no effect on this Agreement or the parties’ rights
and obligations hereunder.

(b)           Nonexclusivity.  The indemnification provided by this Agreement
shall not be deemed exclusive of any rights to which Indemnitee may be entitled
under the Company’s Certificate of Incorporation, its Bylaws, any agreement,
any vote of stockholders or disinterested members of the Company’s Board of
Directors, the General Corporation Law of the State of Delaware, or otherwise,
both as to action in Indemnitee’s official capacity and as to action in another
capacity while holding such office.  The
indemnification provided under this Agreement shall continue as to Indemnitee
for any action taken or not taken while serving in an indemnified capacity even
though he or she may have ceased to serve in any such capacity at the time of
any action, suit or other covered proceeding.

5.             Partial Indemnification.  If Indemnitee is entitled under any provision
of this Agreement to indemnification by the Company for some or a portion of
the expenses, judgments, fines or penalties actually or reasonably incurred in
the investigation, defense, appeal or settlement of any civil or criminal
action, suit or proceeding, but not, however, for the total amount thereof, the
Company shall nevertheless indemnify Indemnitee for the portion of such
expenses, judgments, fines or penalties to which Indemnitee is entitled. 

6.             Mutual Acknowledgment.  Both the Company and Indemnitee acknowledge
that in certain instances, Federal law or public policy may override applicable
state law and prohibit the Company from indemnifying its directors and officers
under this Agreement or otherwise.  For
example, the Company and Indemnitee acknowledge that the Securities and
Exchange Commission (the “SEC”) has taken the position that indemnification is
not permissible for liabilities arising under certain federal securities laws,
and federal legislation prohibits indemnification for certain ERISA violations.

7.             Officer and Director Liability
Insurance.  The Board shall, from
time to time, make the good faith determination whether or not it is
practicable for the Company to obtain and maintain a policy or policies of insurance
with reputable insurance companies providing the officers and directors of the
Company with coverage for losses from wrongful acts, or to ensure the Company’s
performance of its indemnification obligations under this Agreement.  Among other considerations, the Board will
weigh the costs of obtaining such insurance coverage against the protection
afforded by such coverage.  In all
policies of director and officer liability insurance, Indemnitee shall be named
as an insured in such a manner as to provide Indemnitee the same rights and
benefits as are accorded to the most favorably insured of the Company’s
directors, if Indemnitee is a director; or of the Company’s officers, if
Indemnitee is not a director of the Company but is an officer; or of the Company’s
key employees, if Indemnitee is not an officer or director but is a key
employee.  Notwithstanding the foregoing,
the Company shall have no obligation to obtain or maintain such insurance if
the Board 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
Indemnitee is covered by similar insurance maintained by a parent or subsidiary
of the Company.

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8.             Severability.  Nothing in this Agreement is intended to
require or shall be construed as requiring the Company to do or fail to do any
act in violation of applicable law.  The
Company’s inability, pursuant to court order, to perform its obligations under
this Agreement shall not constitute a breach of this Agreement.  The provisions of this Agreement shall be
severable as provided in this Section 8. 
If this Agreement or any portion hereof shall be invalidated on any
ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify Indemnitee to the full extent permitted by 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.

9.             Construction of Certain Phrases.

(a)           For
purposes of this Agreement, references to the “Company” shall include, in
addition to the resulting corporation, any constituent corporation (including
any constituent of a constituent) absorbed in a consolidation or merger which,
if its separate existence had continued, would have had power and authority to
indemnify its directors, officers, and employees or agents, so that if
Indemnitee is or was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, Indemnitee shall stand
in the same position under the provisions of this Agreement with respect to the
resulting or surviving corporation as Indemnitee would have with respect to
such constituent corporation if its separate existence had continued.

(b)           For
purposes of this Agreement, references to “other enterprises” shall include
employee benefit plans; references to “fines” shall include any excise taxes
assessed on Indemnitee with respect to an employee benefit plan; and references
to “serving at the request of the Company” shall include any service as a
director, officer, employee or agent of the Company which imposes duties on, or
involves services by, such director, officer, employee or agent with respect to
an employee benefit plan, its participants, or beneficiaries; and if Indemnitee
acted in good faith and in a manner Indemnitee reasonably believed to be in the
interest of the participants and beneficiaries of an employee benefit plan,
Indemnitee shall be deemed to have acted in a manner “not opposed to the best
interests of the Company” as referred to in this Agreement.

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

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11.           Miscellaneous.

(a)           Governing
Law.  This Agreement and all acts and
transactions pursuant hereto and the rights and obligations of the parties
hereto shall be governed, construed and interpreted in accordance with the laws
of the State of Delaware, without giving effect to principles of conflicts of
law.

(b)           Entire
Agreement; Enforcement of Rights. 
This Agreement sets forth the entire agreement and understanding of the
parties relating to the subject matter herein and merges all prior discussions
between them.  No modification of or
amendment to this Agreement, nor any waiver of any rights under this Agreement,
shall be effective unless in writing signed by the parties to this
Agreement.  The failure by either party
to enforce any rights under this Agreement shall not be construed as a waiver
of any rights of such party.

(c)           Construction.  This Agreement is the result of negotiations
between and has been reviewed by each of the parties hereto and their
respective counsel, if any; accordingly, this Agreement shall be deemed to be
the product of all of the parties hereto, and no ambiguity shall be construed
in favor of or against any one of the parties hereto.

(d)           Notices.  Any notice, demand or request required or
permitted to be given under this Agreement shall be in writing and shall be
deemed sufficient when delivered personally or sent by fax or 48 hours after
being sent by nationally-recognized courier or deposited in the U.S. mail, as
certified or registered mail, with postage prepaid, and addressed to the party
to be notified at such party’s address or fax number as set forth below or as
subsequently modified by written notice.

(e)           Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.

(f)            Successors
and Assigns.  This Agreement shall be
binding upon the Company and its successors and assigns, and inure to the
benefit of Indemnitee and Indemnitee’s heirs, legal representatives and
assigns.

(g)           Subrogation.  In the event of payment under this Agreement,
the Company shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee, who shall execute all documents required and
shall do all acts that may be necessary to secure such rights and to enable the
Company to effectively bring suit to enforce such rights.

[Remainder of page intentionally
left blank]

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The parties hereto
have executed this Agreement as of the day and year set forth on the first page
of this Agreement.

SM&A, a Delaware
corporation

	
  By:

  	
  /s/ Steve D. Handy

  	
   

  
	
   

  	
  Name: Steve D. Handy

  
	
   

  	
  Title: SVP, Chief Financial Officer and Secretary

  

 

Address:

4695 MacArthur Court, 8th Floor

Newport Beach, CA 92660

AGREED TO AND ACCEPTED:

	
  /s/ Steven S. Myers

  	
   

  

Steven S. Myers

Address:

4695 MacArthur Court, 8th Floor

Newport Beach, CA 92660

Signature
Page to Indemnification Agreement

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