Exhibit 10.17

 

STOCK ESCROW AGREEMENT

 

STOCK ESCROW AGREEMENT, dated as of October 19, 2005 (“Agreement”), by and among
FEDERAL SERVICES ACQUISITION CORPORATION, a Delaware corporation (“Company”),
JOEL R. JACKS, PETER M. SCHULTE, Dr. EDWARD H. BERSOFF, ARTHUR L. MONEY and FSAC
PARTNERS, LLC (collectively “Initial Stockholders”) and CONTINENTAL STOCK
TRANSFER & TRUST COMPANY, a New York corporation (“Escrow Agent”).

 

WHEREAS, the Company has entered into an Underwriting Agreement, dated October
 19, 2005 (“Underwriting Agreement”), with CRT Capital Group LLC (the
“Underwriter”), pursuant to which, among other matters, the Underwriter has
agreed to purchase 21,000,000 units (“Units”) of the Company. Each Unit consists
of one share of the Company’s Common Stock, par value $.0001 per share, and two
Warrants, each Warrant to purchase one share of Common Stock, all as more fully
described in the Company’s final Prospectus, dated October  19, 2005
(“Prospectus”) comprising part of the Company’s Registration Statement on Form
S-1 (File No. 333-124638) under the Securities Act of 1933, as amended
(“Registration Statement”), declared effective on October 19, 2005 (“Effective
Date”).

 

WHEREAS, the Initial Stockholders have agreed as a condition of the sale of the
Units to deposit their shares of Common Stock of the Company, as set forth
opposite their respective names in Exhibit A attached hereto (collectively
“Escrow Shares”), in escrow as hereinafter provided.

 

WHEREAS, the Company and the Initial Stockholders desire that the Escrow Agent
accept the Escrow Shares, in escrow, to be held and disbursed as hereinafter
provided.

 

IT IS AGREED:

 

1.             Appointment of Escrow Agent. The Company and the Initial
Stockholders hereby appoint the Escrow Agent to act in accordance with and
subject to the terms of this Agreement and the Escrow Agent hereby accepts such
appointment and agrees to act in accordance with and subject to such terms.

 

2.             Deposit of Escrow Shares. On or before the Effective Date, each
of the Initial Stockholders shall deliver to the Escrow Agent certificates
representing his respective Escrow Shares, to be held and disbursed subject to
the terms and conditions of this Agreement. Each Initial Stockholder
acknowledges that the certificate representing his Escrow Shares is legended to
reflect the deposit of such Escrow Shares under this Agreement.

 

3.             Disbursement of the Escrow Shares. The Escrow Agent shall hold
the Escrow Shares until the third anniversary of the Effective Date (“Escrow
Period”), on which date it shall, upon written instructions from each Initial
Stockholder, disburse each of the Initial Stockholder’s Escrow Shares to such
Initial Stockholders; provided, however, that if the Escrow Agent is notified by
the Company pursuant to Section 6.7 hereof that the Company is being liquidated
at any time during the Escrow Period, then the Escrow Agent shall promptly
destroy the certificates representing the Escrow Shares; provided further,
however, that if, after the Company consummates a Business Combination (as such
term is defined in the Registration Statement), it

 

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(or the surviving entity) subsequently consummates a liquidation, merger, stock
exchange or other similar transaction which results in all of the stockholder of
such entity having the right to exchange their shares of Common Stock for cash,
securities or other property, then the Escrow Agent will, upon receipt of a
certificate, executed by the Chief Executive Officer or Chief Financial Officer
of the Company, in form reasonably acceptable to the Escrow Agent, that such
transaction is then being consummated, and release the Escrow Shares to the
Initial Stockholders upon consummation of the transaction so that they can
similarly participate. The Escrow Agent shall have no further duties hereunder
after the disbursement or destruction of the Escrow Shares in accordance with
this Section 3.

 

4.             Rights of Initial Stockholders in Escrow Shares.

 

4.1.          Voting Rights as a Stockholder. Subject to the terms of the
Insider Letter described in Section 4.4 hereof and except as herein provided,
the Initial Stockholders shall retain all of their rights as stockholders of the
Company during the Escrow Period, including, without limitation, the right to
vote such shares.

 

4.2.          Dividends and Other Distributions in Respect of the Escrow Shares.
During the Escrow Period, all dividends payable in cash with respect to the
Escrow Shares shall be paid to the Initial Stockholders, but all dividends
payable in stock or other non-cash property (“Non-Cash Dividends”) shall be
delivered to the Escrow Agent to hold in accordance with the terms hereof. As
used herein, the term “Escrow Shares” shall be deemed to include the Non-Cash
Dividends distributed thereon, if any.

 

4.3.          Restrictions on Transfer. During the Escrow Period, no sale,
transfer or other disposition may be made of any or all of the Escrow Shares
except (i) by gift to a member of Initial Stockholder’s immediate family or to a
trust, the beneficiary of which is an Initial Stockholder or a member of an
Initial Stockholder’s immediate family, (ii) by virtue of the laws of descent
and distribution upon death of any Initial Stockholder, or (iii) pursuant to a
qualified domestic relations order; provided, however, that such permissive
transfers may be implemented only upon the respective transferee’s written
agreement to be bound by the terms and conditions of this Agreement and of the
Insider Letter signed by the Initial Stockholder transferring the Escrow Shares.
During the Escrow Period, the Initial Stockholders shall not pledge or grant a
security interest in the Escrow Shares or grant a security interest in their
rights under this Agreement.

 

4.4.          Insider Letters. Each of the Initial Stockholders has executed a
letter agreement with the Company, dated as indicated on Exhibit A hereto, and
which is filed as an exhibit to the Registration Statement (“Insider Letter”),
respecting the rights and obligations of such Initial Stockholder in certain
events, including but not limited to the liquidation of the Company.

 

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5.             Concerning the Escrow Agent.

 

5.1.          Good Faith Reliance. The Escrow Agent shall not be liable for any
action taken or omitted by it in good faith and in the exercise of its own best
judgment, and may rely conclusively and shall be protected in acting upon any
order, notice, demand, certificate, opinion or advice of counsel (including
counsel chosen by the Escrow Agent), statement, instrument, report or other
paper or document (not only as to its due execution and the validity and
effectiveness of its provisions, but also as to the truth and acceptability of
any information therein contained) which is believed by the Escrow Agent to be
genuine and to be signed or presented by the proper person or persons. The
Escrow Agent shall not be bound by any notice or demand, or any waiver,
modification, termination or rescission of this Agreement unless evidenced by a
writing delivered to the Escrow Agent signed by the proper party or parties and,
if the duties or rights of the Escrow Agent are affected, unless it shall have
given its prior written consent thereto.

 

5.2.          Indemnification. The Escrow Agent shall be indemnified and held
harmless by the Company from and against any expenses, including counsel fees
and disbursements, or loss suffered by the Escrow Agent in connection with any
action, suit or other proceeding involving any claim which in any way, directly
or indirectly, arises out of or relates to this Agreement, the services of the
Escrow Agent hereunder, or the Escrow Shares held by it hereunder, other than
expenses or losses arising from the gross negligence or willful misconduct of
the Escrow Agent. Promptly after the receipt by the Escrow Agent of notice of
any demand or claim or the commencement of any action, suit or proceeding, the
Escrow Agent shall notify the other parties hereto in writing. In the event of
the receipt of such notice, the Escrow Agent, in its sole discretion, may
commence an action in the nature of interpleader in an appropriate court to
determine ownership or disposition of the Escrow Shares or it may deposit the
Escrow Shares with the clerk of any appropriate court or it may retain the
Escrow Shares pending receipt of a final, non-appealable order of a court having
jurisdiction over all of the parties hereto directing to whom and under what
circumstances the Escrow Shares are to be disbursed and delivered. The
provisions of the Sections 5.2 and 5.7 shall survive in the event the Escrow
Agent resigns or is discharged pursuant to Sections 5.5 or 5.6 below.

 

5.3.          Compensation. The Escrow Agent shall be entitled to reasonable
compensation from the Company for all services rendered by it hereunder. The
Escrow Agent shall also be entitled to reimbursement from the Company for all
expenses paid or incurred by it in the administration of its duties hereunder
including, but not limited to, all counsel, advisors’ and agents’ fees and
disbursements and all taxes or other governmental charges.

 

5.4.          Further Assurances. From time to time on and after the date
hereof, the Company and the Initial Stockholders shall deliver or cause to be
delivered to the Escrow Agent such further documents and instruments and shall
do or cause to be done such further acts as the Escrow Agent shall reasonably
request to carry out more effectively the provisions and purposes of this
Agreement, to evidence compliance herewith or to assure itself that it is
protected in acting hereunder.

 

5.5.          Resignation. The Escrow Agent may resign at any time and be
discharged from its duties as escrow agent hereunder by its giving the other
parties hereto written notice and

 

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such resignation shall become effective as hereinafter provided. Such
resignation shall become effective at such time that the Escrow Agent shall turn
over to a successor escrow agent appointed by the Company, the Escrow Share held
hereunder. If no new escrow agent is so appointed within the 60 day period
following the giving of such notice of resignation, the Escrow Agent may deposit
the Escrow Shares with any court it reasonably deems appropriate.

 

5.6.          Discharge of Escrow Agent. The Escrow Agent shall resign and be
discharged form its duties as escrow agent hereunder if so requested in writing
at any time by the Company and a majority of the Initial Shareholders, jointly,
provided, however, that such resignation shall become effective only upon
acceptance of appointment by a successor escrow agent as provided in Section
5.5.

 

5.7.          Liability. Notwithstanding anything herein to the contrary, the
Escrow Agent shall not be relieved from liability hereunder for its own gross
negligence or its own willful misconduct.

 

5.8.          Trust Fund Waiver. The Escrow Agent has no right, title, interest,
or claim of any kind (“Claim”) in or to any monies in the Trust Account (as
defined in that certain Investment Management Trust Agreement, dated as of the
date hereof, by and between the Company and Continental Stock Transfer & Trust
Company, as trustee of the Trust Account), and hereby waives any Claim it may
have in the future in or to any monies in the Trust Account, and hereby agrees
not to seek recourse, reimbursement, payment or satisfaction for any Claim
against the Trust Account for any reason whatsoever.

 

6.             Miscellaneous.

 

6.1.          Governing Law. This Agreement shall for all purposes be deemed to
be made under and shall be construed in accordance with the laws of the State of
New York.

 

6.2.          Third Party Beneficiaries. Each of the Initial Stockholders hereby
acknowledges that the Underwriter is a third party beneficiary of this Agreement
and this Agreement may not be modified or changed without the prior written
consent of CRT.

 

6.3.          Entire Agreement. This Agreement contains the entire agreement of
the parties hereto with respect to the subject matter hereof and, except as
expressly provided herein, may not be changed or modified except by an
instrument in writing signed by the party to be charged.

 

6.4.          Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any the meaning or
interpretation thereof.

 

6.5.          Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the respective parties hereto and their legal representatives,
successors and assigns.

 

6.6.          Notices. Any notice or other communication required or which may
be given hereunder shall be in writing and either be delivered personally or be
mailed, certified or registered mail, or by private national courier service,
return receipt requested, postage prepaid,

 

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and shall be deemed given when so delivered personally or, if mailed, two days
after the date of mailing, as follows:

 

If to the Company, to

 

Federal Services Acquisition Corporation

900 Third Avenue, 33rd Floor

New York, NY  10022-4775

Attn:  Chairman

 

If to a Stockholder, to his address set forth in Exhibit A.

 

and if to the Escrow Agent, to:

 

Continental Stock Transfer & Trust Company

17 Battery Place

New York, NY  10004

Attn:  Chairman

 

A copy of any notice sent hereunder shall be sent to:

 

Gusrae, Kaplan & Bruno, PLLC

120 Wall Street

11th Floor

New York, NY  10005

Attn:  Scott M. Miller, Esq.

 

and:

 

CRT Capital Group LLC

262 Harbor Drive

Stanford, CT 06902

Attn: Christopher Chase, Managing Director

 

and:

 

Bingham McCutchen LLP

399 Park Avenue

New York, NY 10022

Attn: Floyd Wittlin, Esq.

 

and:

 

Dechert LLP

30 Rockefeller Plaza

New York, NY  10112

Attn:  Gerald Adler, Esq.

 

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The parties may change the persons and addresses to which the notices or other
communications are to be sent by giving written notice to any such change in the
manner provided herein for giving notice.

 

6.7.          Liquidation of Company. The Company shall give the Escrow Agent
written notification of the liquidation and dissolution of the Company in the
event that the Company fails to consummate a Business Combination within the
time period(s) specified in the Prospectus.

 

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WITNESS the execution of this Agreement as of the date first above written:

 

 

FEDERAL SERVICES ACQUISITION CORPORATION

 

 

 

 

 

By:

/s/ JOEL R. JACKS

 

 

 

Joel R. Jacks,

 

 

Chairman and Chief Executive Officer

 

 

 

INITIAL STOCKHOLDERS:

 

 

 

 

 

/s/ PETER M. SCHULTE

 

 

PETER M. SCHULTE

 

 

 

 

 

/s/ JOEL R. JACKS

 

 

JOEL R. JACKS

 

 

 

 

 

/s/ EDWARD H. BERSOFF

 

 

Dr. EDWARD H. BERSOFF

 

 

 

 

 

/s/ ARTHUR L. MONEY

 

 

ARTHUR L. MONEY

 

 

 

 

 

FSAC PARTNERS, LLC

 

 

 

 

 

By:

/s/ JOEL R. JACKS

 

 

 

 Name: Joel R. Jacks, on behalf of FSAC Partners, LLC

 

 

 Title: Class A Member

 

 

 

CONTINENTAL STOCK TRANSFER & TRUST
COMPANY

 

 

 

 

 

By:

/s/ STEVEN NELSON

 

 

 

Name: Steven Nelson

 

 

Title: Chairman

 

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EXHIBIT A

 

Name and Address of
Initial Stockholder

 

Number
of Shares

 

Stock Certificate
Number

 

Date of
Insider Letter

 

 

 

 

 

 

 

 

 

Joel R. Jacks

 

1,732,500

 

1

 

October 19, 2005

 

Peter M. Schulte

 

1,732,500

 

2

 

October 19, 2005

 

Dr. Edward H. Bersoff

 

525,000

 

3

 

October 19, 2005

 

Arthur L. Money

 

52,500

 

4

 

October 19, 2005

 

FSAC Partners, LLC

 

1,207,500

 

5

 

October 19, 2005

 

 

A-1

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