PREFERRED STOCK REDEMPTION AGREEMENT
THIS
PREFERRED STOCK REDEMPTION AGREEMENT (this “Agreement”), dated as of
February 27, 2009, is made by and among Paradigm Holdings, Inc., a Wyoming
corporation (the “Company”), Semper Finance,
Inc., a Delaware corporation, and USA Asset Acquisition Corp. (each a “Stockholder,” and,
collectively, the “Stockholders”).
WHEREAS,
Xxxx Capital Partners, LP and EREF PARA LLC (collectively, the “Investors”) and the Company
propose to enter into a Preferred Stock Purchase Agreement dated as of February
27, 2009 (as the same may be amended or supplemented, the “Purchase Agreement”) providing
for the purchase by the Investors of shares of Series A-1 Senior Preferred
Stock, $0.01 par value per share, of the Company (the “Series A-1 Preferred Stock”)
and certain series of warrants (the “Warrants”) to purchase Common
Stock, $0.01 par value per share, of the Company (the “Common Stock”) (the
transactions contemplated by the Purchase Agreement, including without
limitation the issuance of securities thereunder and the amendment or amendment
and restatement of the Company’s Articles of Incorporation, the “Transactions”);
WHEREAS,
each Stockholder is the record and beneficial owner of such number of shares of
Series A Preferred Stock of the Company (the “Series A Preferred Stock”) set
forth opposite such Stockholder’s name on Schedule I hereto
(such shares of Series A Preferred Stock, the “Shares”).
WHEREAS,
the Stockholders have agreed with the Company to sell the Series A Preferred
Stock held by them for the Purchase Price (as defined below).
WHEREAS,
as a condition to the execution and delivery of the Purchase Agreement, the
Investors have requested that the Stockholders enter into this Agreement;
and
WHEREAS,
the Stockholders believe that the execution, delivery and performance of the
Purchase Agreement and the consummation of the Transactions is in the best
interests of the Company and its shareholders.
NOW,
THEREFORE, in consideration of the premises and the representations, warranties
and agreements contained herein, the Stockholders agree as follows:
1. Sale of Series A Preferred
Stock. At the closing of the Transactions, each Stockholder
agrees to sell all Shares held by such Stockholder for the consideration set
forth opposite such Stockholder’s name on Schedule I hereto (the “Purchase
Price”). At the closing of the Transactions, each Stockholder
shall deliver all share certificates evidencing all of said Stockholder’s Shares
to the Company and shall execute a stock power separate from the certificate
transferring the Stockholder’s Shares to the Company and the Company shall
deliver to each Stockholder the Purchase Price for such Stockholder’s
Shares.
2. Representations and
Warranties of the Stockholders. Each Stockholder hereby,
severally and not jointly, represents and warrants to the Company as
follows:
(a) Authority. The
Stockholder has all requisite power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by the
Stockholder. This Agreement has been duly executed and delivered by
the Stockholder and, assuming this Agreement constitutes a valid and binding
obligation of the other parties hereto, constitutes a valid and binding
obligation of the Stockholder enforceable against the Stockholder in accordance
with its terms. Neither the execution, delivery or performance of
this Agreement by the Stockholder nor the consummation by the Stockholder of the
transactions contemplated hereby will (i) require any filing with, or permit,
authorization, consent or approval of, any federal, state, local or municipal
foreign or other government or subdivision, branch, department or agency thereof
or any governmental or quasi-governmental authority of any nature, including any
court or other tribunal, (a “Governmental Entity”), or (ii)
violate any judgment, order, writ, preliminary or permanent injunction or decree
or any statute, law, ordinance, rule or regulation of any Governmental Entity
applicable to the Stockholder or any of the Stockholder’s properties or assets,
including the Stockholder’s Shares.
(b) The
Shares. Subject to the terms of this Agreement, the Series A
Preferred Stock and the certificates representing such Shares are now held by
such Stockholder, or by a nominee or custodian for the benefit of such
Stockholder. The Stockholder has good and marketable title to such
Shares, free and clear of any Liens, proxies, voting trusts or agreements,
understandings or arrangements, except for any such Liens or proxies arising
hereunder. The Stockholder owns of record or beneficially no Series A
Preferred Stock other than the Shares as set forth on Schedule I
hereto.
(c)
Purchase
Agreement. Each Stockholder understands and acknowledges that
the Investors are entering into the Purchase Agreement in reliance upon such
Stockholder’s execution and delivery of this Agreement.
(d) Information. Each
Stockholder has had an opportunity to ask questions of, and receive answers
from, the officers of the Company concerning the Transactions and the Company’s
business, management and financial affairs, which questions were answered to its
satisfaction. Each Stockholder believes that it has received all the
information such Stockholder considers necessary or appropriate for deciding
whether to sell the Shares. Each Stockholder acknowledges that it is
relying solely on its own counsel and not on any statements or representations
of the Company or its agents for legal advice with respect to the sale of the
Shares.
3. Further
Assurances. Each Stockholder will, from time to time, execute
and deliver, or cause to be executed and delivered, such additional or further
transfers, assignments, endorsements, consents and other instruments as the
Company or the Investors may reasonably request for the purpose of effectively
carrying out the transactions contemplated by this Agreement.
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4. Termination. This
Agreement, and all rights and obligations of the parties hereunder, shall
terminate upon the termination of the Purchase Agreement prior to the closing of
the Transactions. Notwithstanding the foregoing, this Agreement shall
terminate and have no further force or effect if the closing of the sale of
Series A-1 Preferred Stock and Warrants to the Investors pursuant to the
Purchase Agreement is not consummated on or before March 1, 2009.
5. Release.
(a) Definitions. For
purposes of this Section 5, “RELEASORS” means each of the
Stockholders and all related corporations, partnerships, affiliates,
subsidiaries, parents, entities, successors and assigns and their past and
present directors, officers, shareholders, members, partners, contractors,
agents, attorneys and/or employees. For purposes of this Section 5, “RELEASED
PARTIES” means
the Company and all of its related corporations, partnerships, affiliates,
subsidiaries, parents, entities, successors and assigns and their past and
present directors, officers, shareholders, members, partners, contractors,
agents, attorneys and/or employees.
(b) RELEASORS unconditionally and
irrevocably release the RELEASED PARTIES from all
known or unknown claims, debts, liabilities, breaches of contract, compensation,
claims for profits, claims for expenses, demands, damages, actions, causes of
action, or suits of any kind or nature whatsoever, if any, that the RELEASORS presently have or
could have, with respect to the Shares including, but not limited to, all
losses, debts, liabilities, breaches, claims and causes of action based on
breach of contract, accounting, misrepresentation, fraud, conflicts of interest,
tortious interference, breach of fiduciary duties, demands, costs, loss of
services, expenses, compensation, contribution, attorneys’ fees, and all
compensatory, consequential, liquidated, special and punitive
damages. RELEASORS acknowledge that
RELEASED PARTIES
have relied
on the representations and promises in this Agreement and in this
release (described herein in Section 5) in
agreeing to the repurchase of the Shares. RELEASORS understand that
RELEASORS are releasing
any and all claims that may ever arise with respect to the Shares that RELEASORS may not know about
as of the date of execution of this Agreement.
(c) Each
Stockholder acknowledges and agrees that the waiver of such Stockholder’s claims
is knowing and voluntary and that this waiver is a part of this Agreement, which
has been written in a manner calculated to be, and which is, understood by such
Stockholder.
6. General.
(a) Counterparts. This
Agreement may be executed in two (2) or more counterparts, all of which shall be
considered one and the same agreement and shall become effective when two or
more counterparts have been signed by each of the parties and delivered to the
other parties, it being understood that all parties need not sign the same
counterpart.
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(b) Entire
Agreement. Each party hereby acknowledges that no other party
or any other person or entity has made any promises, warranties, understandings
or representations whatsoever, express or implied, not contained in this
Agreement and acknowledges that it has not executed this Agreement in reliance
upon any such promises, representations, understandings or warranties not
contained herein and that this Agreement supersedes all prior agreements and
understandings between the parties with respect thereto. This
Agreement is not intended to confer upon any person other than the parties
hereto any rights or remedies hereunder.
(c)
Governing
Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Maryland without regard to any
applicable conflicts of law.
(d) Titles and
Subtitles. The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.
(e) Notices. All
notices and other communications required or permitted hereunder shall be in
writing. Notices shall be delivered personally, via recognized
overnight courier (such as Federal Express, DHL or Airborne Express) or via
certified or registered mail. Notices may be delivered via facsimile
or e-mail, provided that by no later than two days thereafter such notice is
confirmed in writing and sent via one of the methods described in the previous
sentence. Notices shall be addressed to the address of each
Stockholder as is set forth on the books and records of the Company, or at such
other address or facsimile number as such Stockholder shall have furnished in
writing to the other parties hereto. All notices shall be effective
upon receipt.
(f)
Severability Whenever
possible, each provision of this Agreement will be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect under
any applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision or any other jurisdiction,
but this Agreement will be reformed, construed and enforced in such jurisdiction
to the greatest extent possible to carry out the intentions of the parties
hereto.
(g)
Delays or
Omissions. No delay or omission to exercise any
right, power or remedy accruing to any party under this Agreement, upon any
breach or default of any other party under this Agreement, shall impair any such
right, power or remedy of such nonbreaching or nondefaulting party nor shall it
be construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring.
(h)
Facsimile
Signatures. Any signature page delivered by a fax machine
shall be binding to the same extent as an original signature page, with regard
to any agreement subject to the terms hereof or any amendment
thereto.
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(i) Amendment and
Waiver. This Agreement may be amended by the parties hereto by
execution of an instrument in writing signed by the Company and on behalf of the
Stockholders holding a majority of Shares held by all of the
Stockholders. Any such amendment signed by the Stockholders holding a
majority of Shares held by all of the Stockholders shall bind all of the
Stockholders. Any action, extension or waiver by any party of any
provision hereto shall be valid only if set forth in an instrument in writing
signed by the Company and on behalf of Stockholders holding a majority of Shares
held by all of the Stockholders.
(j) 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 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 in a court of the United States. This being in
addition to any other remedy to which they are entitled at law or in
equity. In addition, each of the parties hereto waives any right to
trial by jury with respect to any claim or proceeding related to or arising out
of this Agreement or any of the transactions contemplated hereby.
[Signature
page follows.]
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IN
WITNESS WHEREOF, each party hereto has signed this Agreement as of the date
first written above.
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COMPANY:
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By:
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/s/Xxxxx XxXxxxxxxx
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Name: Xxxxx
XxXxxxxxxx
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Title:
President and Chief Executive Officer
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STOCKHOLDERS:
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SEMPER
FINANCE, INC., a Delaware
corporation
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By:
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/s/Xxxxxxx X. Xxxx
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Name:
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Xxxxxxx X. Xxxx
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Title:
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President
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USA
ASSET ACQUISITION CORP.
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By:
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/s/Xxxxxxx X. Xxxx
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Name:
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Xxxxxxx X. Xxxx
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Title:
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President
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Signature
Page to Redemption Agreement
Schedule
I
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Stockholder
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Series A Preferred Stock
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Purchase Price
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Semper
Finance, Inc.
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50
shares*
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$ | 55,583.34 | |||
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USA
Asset Acquisition Corp.
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50
shares**
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$ | 55,583.34 | |||
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Total
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100
shares
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$ | 111,166.68 | |||
*Shares
registered in the name of SEMPER FINANCE INC OF DELEWARE but the owner of these
shares is Semper Finance, Inc.
**Shares
registered in the name of USA ASSET ACQUISITION CORP INC but the owner of these
shares is USA Asset Acquisition Corp.
