VOTING AGREEMENT
This
VOTING AGREEMENT
(this
“Agreement”)
is
dated as of February 28, 2007, by and between Xx. Xxxxxxx X. Xxxxx, an
individual (“Xx.
Xxxxx”)
and
Paradigm Holdings, Inc., a Wyoming corporation (“Paradigm”
and
together with Xx. Xxxxx, the “Parties”
and
each, a “Party”).
WITNESSETH:
WHEREAS,
as a
condition for ____ entering into the Credit Facility, during the term of
the Credit Facility, Xx. Xxxxx’x beneficial ownership interest in Paradigm shall
total less than fifty percent (50%) of the total outstanding shares of common
stock, par value $0.01 per share, of Paradigm (the “Common
Stock”)
or the
Parties shall have executed documents effectively reducing Xx. Xxxxx’x control
in Paradigm to less than fifty percent (50%);
WHEREAS,
the
Parties entered into that certain Stock Purchase Agreement (the
“Stock
Purchase Agreement”),
dated
February 23, 2007, and other related transaction documents pursuant to which
Xx.
Xxxxx purchased from Paradigm all of the issued and outstanding capital stock
of
Paradigm Solutions International, Inc., a Maryland corporation and wholly-owned
subsidiary of Paradigm (the “PSI”)
for a
purchase price equal to $1,580,000 in the form of shares of common stock, par
value $0.01 per share, of Paradigm (the “Purchase
Shares”)
and
for other good and valuable consideration;
WHEREAS,
as of
the date hereof, 20,795,152 shares of Common Stock are issued and outstanding,
of which, prior to the transactions consummated contemplated in the Stock
Purchase Agreement, 12,370,000 shares
were beneficially owned by Xx. Xxxxx, representing 59.50% of the total issued
and outstanding shares of Common Stock as of the date hereof;
WHEREAS,
following the successful consummation of the transactions contemplated in the
Stock Purchase Agreement, Xx. Xxxxx’x beneficial ownership of Paradigm shall be
equal to 10,594,719 shares of common stock, representing 50.95% of the total
issued and outstanding shares of Common Stock as of the date hereof (the
“Huger
Shares”)
and
WHEREAS,
in
order to satisfy those certain conditions of the Credit Facility set forth
herein above and as partial consideration for the purchase of the PSI, the
Parties have agreed to enter into this Agreement whereby Paradigm shall exercise
certain voting rights of Xx. Xxxxx with respect to Paradigm by virtue of his
beneficial ownership of the Huger Shares on the terms and conditions set forth
herein below.
NOW,
THEREFORE,
for
good and valuable consideration, the Parties agree as follows:
Section
1. Voting
Agreement.
During
the Term (as defined in Section 2 hereof) of this Agreement, Xx. Xxxxx hereby
appoints Paradigm and any designee of Paradigm, and each of them individually,
as Xx. Xxxxx’x proxy and attorney-in-fact, with full power of substitution and
resubstitution, to vote or act by written consent from time to time with respect
to that number of shares of Common Stock beneficially owned by Xx. Xxxxx as
of
the record date set by the Board of Directors of Paradigm in connection with
such vote or act by written consent equal to the difference between the total
number of shares of Common Stock beneficially owned by Xx. Xxxxx on such record
date with respect to such vote or act by written consent minus that number
of
shares of Common Stock which represent 49.0% of the total issued and outstanding
shares of Common Stock on the record date with respect to such vote or act
by
written consent (collectively, the “Voting
Stock”).
Xx.
Xxxxx shall promptly cause a copy of this Agreement to be deposited with
Paradigm at its principal place of business and Paradigm’s transfer agent The
Parties shall take such further action or execute such other instruments as
may
be necessary at any time during the Term (as defined below) to effectuate the
intent of this proxy.
Section
2. Term.
The
term of this Agreement shall commence on date hereof and terminate upon the
earlier to occur of: (a) the two (2) year anniversary following the date
hereof; or (b) the termination of the Credit Facility (the “Term”).
Section
3. Proxy.
Xx.
Xxxxx hereby revokes any and all previous proxies granted with respect to the
Voting Stock. By entering into this Agreement, Xx. Xxxxx hereby grants a proxy
appointing Paradigm as Xx. Xxxxx’x attorney-in-fact and proxy, with full power
of substitution, for and in Xx. Xxxxx’x name, to vote, express consent or
dissent, or otherwise to utilize such voting power in the manner contemplated
by
Section 1 above as Paradigm or its proxy or substitute shall, in Paradigm’s sole
discretion, deem proper with respect to the Voting Stock. The proxy granted
by
Xx. Xxxxx pursuant to Section 1 is granted as partial consideration for the
purchase by Xx. Xxxxx of the PSI from Paradigm. The proxy granted by Xx. Xxxxx
shall be irrevocable during the Term.
Section
4. Covenants.
Xx.
Xxxxx covenants that during the Term, he shall not enter into any other voting
or other agreement or grant any proxy or power of attorney regarding the Voting
Stock which is inconsistent with the provisions of this Agreement.
Notwithstanding the foregoing, Xx. Xxxxx shall be permitted to sell all, or
a
portion, of the Huger Shares, including the Voting Stock, at anytime during
the
term of this Agreement as long as the Huger Shares, including the Voting Stock,
are not sold to an individual, or legal entity, whose beneficial ownership
interest in Common Stock of Paradigm after the sale, including the Huger Shares
and the Voting Stock, would exceed 49.0% of the total issued and outstanding
shares of Common Stock of Paradigm.
Section
5. Representations
and Warranties of Xx. Xxxxx.
Xx.
Xxxxx
represents and warrants to Paradigm that:
5.1
Due
Authorization.
Xx.
Xxxxx has the requisite capacity, power and authority to enter into this
Agreement and to perform his obligations contemplated by this Agreement. The
execution and delivery of this Agreement by Xx. Xxxxx and the consummation
by
Xx. Xxxxx of the transactions contemplated by this Agreement have been duly
authorized by all necessary action. This Agreement has been duly executed and
delivered by Xx. Xxxxx and constitutes a valid and binding obligation of Xx.
Xxxxx, enforceable against Xx. Xxxxx in accordance with its terms.
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5.2
Ownership
of Shares.
Xx.
Xxxxx is the record and beneficial owner of the Huger Shares and has the power
to direct the voting of the Huger Shares, including, but not limited to, the
Voting Stock, free and clear of any limitation or restriction on the right
to
vote the Huger Shares, including, but not limited to, the Voting Stock. None
of
the Voting Stock is subject to any voting trust or other agreement or
arrangement with respect to the voting of such Voting Stock. As of the date
hereof, the Huger Shares are the only shares beneficially owned by Xx. Xxxxx
and
Xx. Xxxxx holds no additional options to purchase or rights to subscribe for
or
otherwise acquire any securities of Paradigm and has no other interest in or
voting rights with respect to any securities of Paradigm.
5.3
No
Encumbrances.
Xx.
Xxxxx holds of record and owns beneficially the Huger Shares, free and clear
of
any restrictions on transfer, taxes and Encumbrances (as defined below).
“Encumbrance”
means
any commitment, claim, demand, lien, pledge, option, charge, security interest,
mortgage, deed of trust, restriction, preemptive rights, encumbrance, right
of
set-off or adverse interest of any kind of character.
Section
6. Representations
and Warranties of Paradigm.
6.1
Corporate
Authorization.
The
execution, delivery and performance by Paradigm of this Agreement are within
the
corporate powers of Paradigm and have been duly authorized by all necessary
corporate action. This Agreement constitutes a valid and binding agreement
of
Paradigm.
Section
7. Miscellaneous.
7.1
Further
Assurances. The
Parties will each use its best efforts to execute and deliver, or cause to
be
executed and delivered, all further documents and instruments and use its
reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things reasonably necessary under applicable laws and
regulations, to consummate and make effective the transactions contemplated
by
this Agreement.
7.2
Amendments.
Any
provision of this Agreement may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed, in the case of an amendment,
by
each Party or in the case of a waiver, by the Party against whom the waiver
is
to be effective.
7.3
Survival;
Termination. All
representations, warranties, covenants and agreements made by the Parties hereto
shall survive during the Term, after which this Agreement shall be of no further
force or effect, except that each Party shall remain liable with respect to
breaches of this Agreement occurring during the Term.
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7.4
Successors
and Assigns.
The
provisions of this Agreement shall be binding upon and inure to the benefit
of
the Parties and their respective successors and assigns; provided
that Xx.
Xxxxx may not assign, delegate or otherwise transfer any of his rights or
obligations under this Agreement without the prior written consent of Paradigm.
7.5
Governing
Law.
This
Agreement shall be construed in accordance with and governed by the laws of
the
State of Maryland, applicable to contracts entered into and fully performable
within such State.
7.6
Counterparts;
Effectiveness.
This
Agreement may be signed in any number of counterparts, each of which shall
be an
original, with the same effect as if the signatures thereto and hereto were
upon
the same instrument. This Agreement shall become effective when each Party
shall
have received counterparts hereof signed by the other Party hereto.
7.7
Severability.
If any
term, provision or covenant of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions and covenants of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated.
7.8
Specific
Performance.
The
Parties hereto agree that Paradigm would suffer irreparable damage in the event
any provision of this Agreement is not performed by Xx. Xxxxx in accordance
with
the terms hereof and that Paradigm shall be entitled to specific performance
of
the terms hereof in addition to any other remedy to which it is entitled at
law
or in equity.
7.9
Beneficial
Ownership.
For
purposes of this Agreement, “beneficial ownership” shall be determined in
accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as
amended.
7.10
Notices.
All
notices, requests, claims, demands and other communications under this Agreement
shall be in writing and shall be deemed given if delivered personally or sent
by
overnight courier (providing proof of delivery) to the Parties at the respective
addresses set forth on the signature page(s) hereto.
7.11
Opportunity
to Hire Counsel; Role of Xxxxxxxxxxx & Xxxxxxxx Xxxxxxx Xxxxx Xxxxx
LLP.
Xx.
Xxxxx acknowledges that he has been advised and has been given an opportunity
to
hire counsel with respect to this Agreement and the transactions contemplated
hereby. Xx. Xxxxx further acknowledges that the law firm of Xxxxxxxxxxx &
Xxxxxxxx Xxxxxxx Xxxxx Xxxxx LLP has solely represented Paradigm in connection
with this Agreement and the transactions contemplated hereby and no other
person.
[Remainder
of Page Intentionally Left Blank]
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IN
WITNESS WHEREOF,
the
Parties hereto have caused this Voting Agreement to be duly executed as of
the
day and year first above written.
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| By: | /s/ Xxxxx X. XxXxxxxxxx | |
| Name: | Xxxxx X. XxXxxxxxxx | |
| Title: | President & CEO | |
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Address
for Notices:
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If
to Paradigm Holdings, Inc.:
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Xxxxx
X. XxXxxxxxxx
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| 0000 Xxx Xxxx Xxxxxx | ||
| Xxxxx Xxxxx | ||
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Xxxxxxxxx,
Xxxxxxxx 00000
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Fax: (000)
000-0000
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With
a copy to:
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Xxxxxxx
X. Xxxxxx, Esq.
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Xxxxxxxxxxx
& Xxxxxxxx Xxxxxxx Xxxxx Xxxxx LLP
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000
Xxxxx Xxxxxxxx Xxxxxxxxx
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Xxxxx
0000
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Xxxxx,
Xxxxxxx 00000
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Fax: (000)
000-0000
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5
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XX.
XXXXXXX X. XXXXX,
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an
individual
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| /s/ Xxxxxxx X. Xxxxx | ||
| Name: | Xx. Xxxxxxx X. Xxxxx | |
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Address
for Notices:
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Xx.
Xxxxxxx X. Xxxxx
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0
Xxxxxxx Xxxxxx Xxxxx
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Xxxxxxx,
Xxxxxxxx 00000
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With
a copy to:
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| Xxxx Xxxxxx, Esq. | ||
| Bean, Xxxxxx & Xxxxxx, P.C. | ||
| 0000 Xxxxxx Xxxx. | ||
| Xxxxx 000 | ||
| Xxxxxxxxx, Xxxxxxxx 00000 | ||
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Fax:
(000) 000-0000
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