Unassociated Document


    STOCK
      ESCROW AGREEMENT

     

    STOCK
      ESCROW AGREEMENT, dated as of July 13, 2005 (“Agreement”), by and among FORTRESS
      AMERICA ACQUISITION CORPORATION, a Delaware corporation (“Company”), WASHINGTON
      CAPITAL ADVISORS, LLC, HARVEY L. WEISS, DAVID J. MITCHELL, DONALD L. NICKLES,
      ASA HUTCHINSON, PALADIN HOMELAND SECURITY FUND, L.P., PALADIN HOMELAND SECURITY
      FUND (NY CITY), L.P., PALADIN HOMELAND SECURITY FUND (CA), L.P. and PALADIN
      HOMELAND SECURITY FUND (CAYMAN ISLANDS), L.P. (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  July 13,
      2005 (“Underwriting Agreement”), with Sunrise Securities Corp. (“Sunrise”)
      acting as representative of the several underwriters (collectively, the
“Underwriters”), pursuant to which, among other matters, the Underwriters have
      agreed to purchase 7,000,000 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 July 13, 2005
      (“Prospectus”) comprising part of the Company’s Registration Statement on Form
      S-1 (File No. 333-123504) under the Securities Act of 1933, as amended
      (“Registration Statement”), declared effective on July 13, 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 Stockholder; 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 (or the surviving entity) subsequently consummates
      a
      liquidation, merger, stock exchange or other similar transaction which results
      in all of the stockholders 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, 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, (iii) pursuant to a qualified domestic relations order, or (iv)
      to
      any partner, member or affiliate of any Initial Stockholder organized as an
      entity;
      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 Sunrise
      and 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.

     

    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 this
      Section 5.2 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
      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 Shares
      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 from its duties as escrow agent
      hereunder if so requested in writing at any time by the Company and a majority
      of the Initial Stockholders, 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.

     

    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 Underwriters
      are
      third party beneficiaries of this Agreement and this Agreement may not be
      modified or changed without the prior written consent of Sunrise.

     

    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 way 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, 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:

     

    Fortress
      America Acquisition Corporation

    3
      Bethesda Metro Center

    Suite
      700

    Bethesda,
      MD 20814

    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,
      New York 10004

    Attn:  
      President

     

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

     

    Squire,
      Sanders & Dempsey L.L.P.

    8000
      Towers Crescent Drive, 14th 

    Tysons
      Corner, VA 22182

    Attn:
      James J. Maiwurm, Esq. 

    


    and:

     

    Sunrise
      Securities Corp.

    641
      Lexington Avenue

    25th
      Floor

    New
      York,
      New York 10022

    Attn:      
      Nathan
      Low, President

     

    and:

     

    Mintz
      Levin Cohn Ferris Glovsky and Popeo, P.C.

    666
      Third
      Avenue

    25th
      Floor

    New
      York,
      New York 10017

    Attn:      
      Kenneth
      R. Koch, Esq.

     

    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.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    


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

     

     

    
      	 	
              FORTRESS
                AMERICA ACQUISITION CORPORATION

            
	
               

            	
               

            
	
               

            	
               

            
	 	
              By:

            	
               /s/
                C. Thomas McMillen

            	 
	 	 	
              C.
                Thomas McMillen, Chairman

            
	
               

            	
               

            
	
               

            	
               

            
	 	
              INITIAL
                STOCKHOLDERS:

            
	
               

            	
               

            
	
               

            	
              WASHINGTON
                CAPITAL ADVISORS, LLC

            
	 	 
	
               

            	
              /s/
                C. Thomas McMillen

            	
               

            
	 	
              By:
                C. Thomas McMillen

              Title:
                

            
	
               

            	
               

            
	
               

            	 
	
               

            	
              /s/
                Harvey L. Weiss

            	
               

            
	 	
              Harvey
                L. Weiss

            
	
               

            	
               

            
	
               

            	
               

            
	
               

            	
              /s/
                David J. Mitchell

            	
               

            
	 	
              David
                J. Mitchell

            
	 	 
	 	 
	 	
              /s/
                Asa Hutchinson

            	
               

            
	 	
              Asa
                Hutchinson

            	
               

            
	 	 
	 	 
	 	/s/
              Donald L.
              Nickles 
	 	
              Donald
                L. Nickles

            


    

     

    
      	 	PALADIN HOMELAND SECURITY
              FUND,
              L.P.
	 	 	 
	 	
              By: 

            	
              PALADIN
                HOMELAND SECURITY HOLDINGS, LLC, its General
                Partner 

            
	 	 	 
	 	By: 	/s/ Michael R.
              Steed 
	 	 	Michael R. Steed, Authorized
              Signatory 
	 	 	 
	 	PALADIN HOMELAND SECURITY
              FUND (NY
              CITY), L.P. 
	 	 	 
	 	
              By: 

            	
              PALADIN
                HOMELAND SECURITY HOLDINGS, LLC, its General
                Partner 

            
	 	 	 
	 	By:  	/s/ Michael R.
              Steed 
	 	 	Michael R. Steed, Authorized
              Signatory 


    

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
            	PALADIN HOMELAND SECURITY
              FUND
              (CA), L.P.
	 	 	 
	 	By:  	
              PALADIN
                HOMELAND SECURITY HOLDINGS, LLC, its General
                Partner

            
	 	 	 
	 	By: 	/s/ Michael R.
              Steed 
	 	 	Michael R. Steed, Authorized
              Signatory 
	 	 	 
	 	PALADIN HOMELAND SECURITY
              FUND
              (CAYMAN ISLANDS), L.P.
	 	 	 
	 	
              By: 

            	
              PALADIN
                HOMELAND SECURITY HOLDINGS (CAYMAN ISLANDS), LTD., its General
                Partner 

            
	 	 	 
	 	By: 	/s/ Michael R.
              Steed 
	 	 	Michael R. Steed, Authorized
              Signatory 
	 	 	 
	 	CONTINENTAL
              STOCK TRANSFER & TRUST COMPANY
	 	 	 
	 	By:  	/s/ Steven Nelson 
	 	 	Name: Steven Nelson 
	 	 	
              Title:
                Chairman 

            


       

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    EXHIBIT
      A

     

    
      	
              Name
                and Address of

              Initial
                Stockholder

            	
               

            	
              Number

              of
                Shares

            	
               

            	
              Stock

              Certificate
                Number

            	
               

            	
              Date
                of

              Insider
                Letter

            	
               

            
	
               

            	
               

            	
               

            	
               

            	
               

            	
               

            	
               

            	
               

            
	 	 	 	 	 	 	 	
               

            
	
              Washington
                Capital Advisors, LLC

            	 	
              575,000

            	 	
              C-4

            	 	
              July
                7, 2005

            	
               

            
	 	 	 	 	 	 	 	
               

            
	
              Harvey
                L. Weiss

            	 	
              575,000

            	 	
              C-6

            	 	
              July
                7, 2005

            	
               

            
	 	 	 	 	 	 	 	
               

            
	
              David
                J. Mitchell

            	 	
              150,000

            	 	
              C-5

            	 	
              July
                7, 2005

            	
               

            
	 	 	 	 	 	 	 	
               

            
	
              Donald
                L. Nickles

            	 	
              200,000

            	 	
              C-7

            	 	
              July
                7, 2005

            	
               

            
	 	 	 	 	 	 	 	
               

            
	
              Asa
                Huthinson

            	 	
              200,000

            	 	
              C-8

            	 	
              July
                7, 2005

            	
               

            
	 	 	 	 	 	 	 	
               

            
	
              Paladin
                Homeland Security Fund, L.P.

            	 	
              24,765

            	 	
              C-9

            	 	
              July
                12, 2005

            	
               

            
	 	 	 	 	 	 	 	
               

            
	
              Paladin
                Homeland Security Fund (NY City), L.P.

            	 	
              15,926

            	 	
              C-10

            	 	
              July
                12, 2005

            	
               

            
	 	 	 	 	 	 	 	
               

            
	
              Paladin
                Homeland Security Fund (CA), L.P.

            	 	
              5,553

            	 	
              C-11

            	 	
              July
                12, 2005

            	
               

            
	 	 	 	 	 	 	 	
               

            
	
              Paladin
                Homeland Security Fund (Cayman Islands), L.P.

            	 	
              3,756

            	 	
              C-12

            	 	
              July
                12, 2005