Exhibit 10.7


 


EXECUTION VERSION


 


ESCROW AGREEMENT


 


THIS ESCROW AGREEMENT (this
“Escrow Agreement”) is entered into as of November 23, 2015, by and among Global Defense & National Security
Systems, Inc., a Delaware corporation, a Delaware corporation (the “Buyer”), each of the Persons set forth on
the signature page hereto as a Stockholder (each a “Stockholder” and collectively, the “Stockholders”),
who are stockholders of STG Group, Inc., a Delaware corporation (the “Company”), Simon Lee (the “Stockholders’
Representative”) and Branch Banking and Trust Company, a North Carolina banking corporation (the “Escrow Agent”).
Capitalized terms used herein but not defined shall have the meanings ascribed to them in the Purchase Agreement (as defined below).


 


WITNESSETH:


 


WHEREAS, the Buyer,
Global Defense & National Security Holdings LLC, a Delaware limited liability company, the Company, the Stockholders and the
Stockholders’ Representative, have entered into that certain Stock Purchase Agreement, dated as of June 8, 2015 (the “Purchase
Agreement”), a copy of which has been delivered to the Escrow Agent;


 


WHEREAS, the Buyer,
the Company, the Stockholders and the Stockholders’ Representative have agreed that at the Closing, pursuant to and subject
to the terms and conditions set forth in the Purchase Agreement and this Escrow Agreement, the Cash Escrow Deposit (as defined
below) and the Escrow Shares (as defined below) shall be delivered to the Escrow Agent to serve as partial security for the indemnification
obligations of the Stockholders set forth in Article IX of the Purchase Agreement; and


 


WHEREAS, the Escrow
Agent is willing to act as escrow agent on the terms and conditions hereinafter set forth.


 


NOW, THEREFORE,
in consideration of the promises and agreements set forth herein, the undersigned hereby agree as follows:


 


ARTICLE I


TERMS AND CONDITIONS


 


1.1           Establishment
of Escrow.  The undersigned have caused or will cause to be deposited with the Escrow Agent (a) an amount in
cash equal to Three Million Three Hundred Ten Thousand Dollars ($3,310,000) (the “Cash Escrow Deposit”) and
(b) Three Hundred Thirteen Thousand Seven Hundred Forty-Four (313,744) unregistered shares of Buyer Common Stock with an aggregate
value equal to approximately Three Million Three Hundred Ten Thousand Dollars ($3,310,000) (the “Escrow Share Amount”),
or $10.55 per Buyer Share (the “Escrow Shares,” and together with the Cash Escrow Deposit, or the balance thereof
remaining from time to time, being referred to herein as the “Escrow Amount”).


 




     


     


    

 


1.2           Treatment
of Escrow Amount.  The Cash Escrow Deposit and the Escrow Shares shall be deposited by the Buyer with the Escrow
Agent in a segregated account pursuant to the terms of this Escrow Agreement. Such account shall be called the “Global Defense
Escrow.” The Escrow Amount shall not be subject to any lien, attachment or trustee process, or any other judicial process
by any creditor of any party to this Escrow Agreement. Absent any written investment direction, the Escrow Agent will invest the
Cash Escrow Deposit in the BB&T Business Investment Deposit Account, type 169.


 


1.3           Purpose
of the Escrow Amount. The purpose of the Escrow Amount is to, subject to the terms and conditions of the Purchase Agreement,
serve as partial security for the indemnification obligations of the Stockholders set forth in the Purchase Agreement.


 


1.4           Escrow
Procedure.


 


(a)          Indemnification
Claims. Subject to the procedures and requirements set forth in this Section 1.4, the Buyer shall be entitled to make indemnification
claims against the Escrow Amount for any and all Damages incurred by any Buyer Indemnified Party for which the Buyer Indemnified
Party may seek indemnification under Article IX of the Purchase Agreement, pursuant to and in accordance with the procedures set
forth in Article IX of the Purchase Agreement (subject always to the limitations and requirements set forth in the Purchase Agreement
and this Escrow Agreement) (such indemnification claims, the “Indemnification Claims”).


 


(b)          Claim
Notice. Any Indemnification Claim by the Buyer against the Escrow Amount shall be made by providing the Stockholders’
Representative with written notice (the “Claim Notice”) setting forth the following information: (i) that
a Buyer Indemnified Party seeks indemnification under the Purchase Agreement in an aggregate stated indemnifiable amount arising
from such Indemnification Claim (the “Claim Amount”), (ii) a brief description, in reasonable detail, of
the facts, circumstances or events giving rise to such Indemnification Claim by such Buyer Indemnified Party, and (iii) an estimate
of the portion of the Cash Escrow Deposit and/or the number of Escrow Shares to be released to the Buyer in order to satisfy such
Claim Amount, as calculated in Section 1.4(d) below.


 


(c)          Notice
of Contest. The Stockholders’ Representative may contest any Indemnification Claim by giving the Buyer written notice
of such contest (the “Contest Notice”) within ten (10) Business Days after delivery of such Claim Notice (the
“Contest Notice Period”). The Contest Notice shall include a statement of the grounds of such contest in reasonable
detail and shall state the amount of the Claim Amount that the Stockholders’ Representative does not dispute. The undisputed
portion of the Claim Amount, if any, stated in such Contest Notice shall be available for immediate release to the Buyer from the
Escrow Amount (as directed pursuant to the Claim Notice), and the Buyer and Stockholders’ Representative shall provide the
Escrow Agent with an executed Disbursement Request (as defined below) regarding the release of such undisputed portion of the Claim
Amount from the Escrow Amount. None of the Escrow Amount shall be released to the Buyer with respect to the disputed portion of
such Claim Amount unless and until such disputed portion is finally resolved either by a mutual agreement, in writing, between
the Buyer and the Stockholders’ Representative or by a court of competent jurisdiction in accordance with Section 13.9 of
the Purchase Agreement. Upon expiration of the Contest Notice Period, if no Contest Notice has been delivered to the Buyer during
such period, the Buyer and the Stockholders’ Representative shall provide the Escrow Agent with an executed Disbursement
Request to release a portion of the Escrow Amount with sufficient value to satisfy the Claim Amount, as calculated in Section 1.4(d)
herein.


 




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(d)          Calculation
of Values. In calculating the values of the Escrow Shares for purposes of satisfying any Indemnification Claim, each Escrow
Share shall be valued at the average closing market price at which shares of Buyer Common Stock traded on Nasdaq over the last
ten (10) trading days immediately prior to the date such claim is satisfied (the “Share Value”), and Indemnification
Claims that are paid under this Agreement may be satisfied, in whole or in part, as specified in the Disbursement Request, and
without duplication: (i) by transferring to the Buyer Indemnified Party the number of Escrow Shares that is equal to the Claim
Amount (or part thereof) based on the Share Value per Escrow Share (rounded down to the nearest whole share), and/or (ii) by
a cash disbursement from the Cash Escrow Deposit equal to the Claim Amount (or part thereof), and/or (iii) by pursuing any
other remedies available to the Buyer under the terms of the Purchase Agreement.


 


(e)          Disbursement
Request. Upon receipt by the Escrow Agent of a disbursement request, as set forth in Exhibit A hereto (the “Disbursement
Request”), executed by the Buyer and the Stockholders’ Representative, the Escrow Agent is hereby authorized and
directed to deliver the portion of the Escrow Amount in accordance with the joint written instructions of the Buyer and the Stockholders’
Representative in such Disbursement Request, within two (2) Business Days following receipt of such Disbursement Request. Claims
against the Escrow Amount shall first, be paid from the amount of the Cash Escrow Deposit in the Escrow Amount, and second, once
the total amount of the Cash Escrow Deposit has been disbursed, be paid as a transfer to the Buyer Indemnified Party the number
of Escrow Shares that is equal to the claim amount (or remaining portion thereof), divided by the Share Value per Escrow
Share, rounded down to the nearest whole share. Notwithstanding the foregoing; if Escrow Shares otherwise would be disbursed to
the Buyer Indemnified Party against an Indemnification Claim pursuant to this Agreement, but the Stockholders’ Representative
notifies the Buyer in writing that, in the Stockholders’ Representative reasonable opinion, the effect of such disbursement,
if made, would cause the Transaction to fail to satisfy the Control Requirement, the Stockholders’ Representative may cause
all or part of such Indemnification Claim to be satisfied by a cash payment directly to the Buyer Indemnified Party, and the Disbursement
Request shall instead direct that the number of Escrow Shares that is equal to the amount of cash paid directly to the Buyer Indemnified
Party, based on the Share Value per Escrow Share (rounded down to the nearest whole share), be disbursed to the Stockholders
pro rata based upon their Per Share Portion.


 


(f)          Notice
Requirements. Any notice pursuant to this Section 1.4 setting forth, claiming, containing, objecting to or in any way related
to the distribution of the Escrow Amount, must be in writing or set forth in a Portable Document Format (“PDF”),
executed by the appropriate party or parties hereto, as evidenced by the signatures of the Person or Persons signing this Escrow
Agreement, and such notice shall be deemed delivered and effective only if the receiving or delivering party, as applicable, shall
have actually delivered or received, as applicable, it on a business day by confirmed facsimile or as a PDF attached to an email
only at the fax number or email address set forth in Section 3.3 below.


 




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1.5           Release
of Escrow Amount.  


 


(a)          The
date that is eighteen (18) months after the Closing Date is the “Release Date.” If there are no pending Claim
Notices on the Release Date, the Buyer and the Stockholders’ Representative shall jointly provide the Escrow Agent with an
executed Disbursement Request instructing the Escrow Agent to disburse the Escrow Amount (including any amount of Additional Cash
Escrow, if any) to the Stockholders, pro rata based upon their Per Share Portion. In the event there are any pending Claim
Notices on the Release Date, the Buyer and the Stockholders’ Representative shall jointly instruct the Escrow Agent, and
the Escrow Agent shall follow such joint instructions, to retain only the Pending Claim Amount (as defined below) and release to
the Stockholders all of the Escrow Amount in excess of the Pending Claim Amount as set forth in the joint instructions. For purposes
of this Escrow Agreement, “Pending Claim Amount” shall mean that portion of the Cash Escrow Deposit and/or that
number of the Escrow Shares equal to the disputed amount in any pending Claim Notice based on the Share Value.


 


(b)          Any
portion of the Escrow Amount retained after the Release Date in respect of any pending Indemnification Claim shall not be subject
to or retained in respect of any Indemnification Claim other than such Indemnification Claim so pending after such date and shall
be released (in whole or in part) by the Escrow Agent to the Buyer and/or to the Stockholders, as the case may be, only pursuant
to Section 1.4 hereof or upon receipt by the Escrow Agent of either: (i) a copy of a written settlement agreement executed by the
Buyer and the Stockholders’ Representative resolving such pending Indemnification Claim with joint instructions of the Buyer
and the Stockholders’ Representative that all or part of the Escrow Amount be released to the Buyer and/or the Stockholders;
or (ii) a copy of a final order or judgment by the courts of the Eastern District of Virginia or any Virginia state court with
jurisdiction over Fairfax County, Virginia instructing the Escrow Agent to release all or part of the Escrow Amount to the Buyer
and/or the Stockholders. Any such portion of the Escrow Amount to be released to the Stockholders shall be released by the Escrow
Agent to the Stockholders pro rata based upon their Per Share Portion. The Escrow Agent shall continue to hold the remaining
Escrow Amount until otherwise permitted to release such remaining amount in accordance with the terms of this Section 1.5.


 


(c)          If,
on any date that a number of Escrow Shares is to be disbursed pursuant to the terms hereof, (i) the aggregate value of the
Escrow Shares remaining in the Escrow Amount, based on the Share Value per Escrow Share, is less than the amount requested in the
Disbursement Request and (ii) the aggregate value of the Escrow Shares disbursed as of such date is less the Escrow Share
Amount, the Stockholders jointly and severally agree to promptly (and in any event within two (2) Business Days following notice
from the Escrow Agent) provide to the Stockholders’ Representative for deposit with the Escrow Agent (within two (2) Business
Days following receipt from the Stockholders) an amount in cash, by wire transfer of immediately available funds, equal to the
difference between (x) the Escrow Share Amount and (y) the aggregate value of the Escrow Shares disbursed as of such
date (such difference, the “Additional Cash Escrow”). The Additional Cash Escrow shall be added to the Escrow
Amount, and the Escrow Agent shall then transfer to the Buyer Indemnified Party the Escrow Shares remaining in the Escrow Amount,
plus a portion of the Additional Cash Escrow necessary to satisfy the Disbursement Request. Thereafter, any subsequent Disbursement
Request shall be satisfied from the Additional Cash Escrow.


 




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(d)          In
no event shall the aggregate value disbursed from the Escrow Amount exceed the sum of the Cash Escrow Deposit and the Escrow Share
Amount. Once an amount equal to the sum of the Cash Escrow Deposit and the Escrow Share Amount has been disbursed from the Escrow
Amount, any remaining shares of Buyer Common Stock in the Escrow Amount shall be distributed to the Stockholders pro rata
based upon their Per Share Portion.


 


(e)          Notwithstanding
anything to the contrary herein, the Escrow Agent shall make distributions of the Escrow Amount any time and from time to time
upon, and in accordance with, joint written instructions from only the Buyer and the Stockholders’ Representative.


 


(f)          If,
on any date that Escrow Shares are to be released pursuant to the terms hereof, the Escrow Agent holds a stock certificate or other
evidence representing more Escrow Shares than are to be released, the Escrow Agent shall be instructed to deliver such stock certificate
to the Buyer, and the Buyer shall promptly cancel, or cause the registrar for the Buyer Common Stock to promptly cancel, such stock
certificate and the number of Escrow Shares to be so released, and shall deliver to the Escrow Agent a stock certificate representing
the remaining portion thereof to be held pursuant to the terms and conditions of this Escrow Agreement.


 


1.6           Termination.
Unless terminated earlier with the joint written consent of the Buyer and the Stockholders’ Representative, this Escrow Agreement
shall remain in full force and effect until all of the Escrow Amount shall have been released in accordance with the terms hereof.


 


1.7           Tax
Matters.


 


(a)          All
items of income, gains and losses with respect to the Cash Escrow Deposit will be reported for income tax purposes as items attributable
to the Buyer to the same extent as if the Buyer were the owner of the Escrow Amount during the period that the Escrow Amount is
held by the Escrow Agent; provided that such reporting position shall be controlling only for purposes of determining the party
required to pay income tax on such income. The parties hereto also agree to treat all disbursements out of the Escrow Amount to
the Stockholders as additional consideration paid by the Buyer on behalf of the Buyer pursuant to the Purchase Agreement in exchange
for the Shares at the time such amount is disbursed from the Escrow Amount for purposes of section 453 of the Code, and to treat
each such payment as composed of a principal amount and an interest amount pursuant to section 483 or 1272 of the Code, the interest
amount being equal to the amount of interest that would have accrued on the principal amount from the Closing Date at the applicable
Federal rate (as determined pursuant to Section 1274(d) of the Code).


 




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(b)          Escrow
Shares held by the Escrow Agent shall be treated at all times as owned by the Stockholders pro rata based upon their Per
Share Portion, and all transactions affecting such Escrow Shares shall be reported consistently for all tax purposes. During the
retention of the Escrow Shares by the Escrow Agent, (i) all cash dividends received on such Escrow Shares shall be promptly
distributed to the Stockholders pro rata based on their Per Share Portion, and (ii) the Stockholders shall be entitled
to exercise all voting powers associated with their Per Share Portion of such Escrow Shares.


 


(c)          To
the extent required by applicable Law, the Escrow Agent shall issue to the Buyer and the Stockholders appropriate Treasury Forms
1099 reflecting earnings on the Cash Escrow Deposit and the Escrow Shares for each calendar year consistently with Section 1.7(a)
and (b) above. The Buyer and the Stockholders’ Representative agree to provide in a timely manner to the Escrow Agent all
necessary and appropriate tax information and documentation required by the Escrow Agent to facilitate proper tax reporting hereunder.
Upon execution of this Escrow Agreement, the parties hereto shall furnish the Escrow Agent with the Taxpayer Identification Number
of the Buyer, the Stockholders and the Stockholders’ Representative on IRS Form W-9 (or Form W-8, if applicable).


 


ARTICLE II


PROVISIONS AS TO ESCROW AGENT


 


2.1           Limitation
of Escrow Agent’s Capacity.


 


(a)          This
Escrow Agreement expressly and exclusively sets forth the duties of the Escrow Agent with respect to any and all matters pertinent
hereto, and no implied duties or obligations shall be read into this Escrow Agreement against the Escrow Agent. This Escrow Agreement
constitutes the entire agreement between the Escrow Agent and the other parties hereto in connection with the subject matter of
this escrow, and no other agreement entered into between the parties, or any of them, shall be considered as adopted or binding,
in whole or in part, upon the Escrow Agent notwithstanding that any such other agreement may be referred to herein or deposited
with the Escrow Agent or the Escrow Agent may have knowledge thereof, and the Escrow Agent’s rights and responsibilities
shall be governed solely by this Escrow Agreement.


 


(b)          The
Escrow Agent acts hereunder as a depository only and is not responsible or liable in any manner whatsoever for the sufficiency,
correctness, genuineness or validity of the subject matter of this Escrow Agreement or any part thereof, or for the form of execution
thereof, or for the identity or authority of any Person executing or depositing such subject matter. The Escrow Agent shall be
under no duty to investigate or inquire as to the validity or accuracy of any document, agreement, instruction or request furnished
to it hereunder believed by it to be genuine, and the Escrow Agent may rely and act upon, and shall not be liable for acting or
not acting upon, any such document, agreement, instruction or request. The Escrow Agent shall in no way be responsible for notifying,
nor shall it be its duty to notify, any party hereto or any other party interested in this Escrow Agreement of any payment required
or maturity occurring under this Escrow Agreement or under the terms of any instrument deposited herewith.


 




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2.2           Authority
to Act.


 


(a)          The
Escrow Agent is hereby authorized and directed by the undersigned to deliver the subject matter of this Escrow Agreement only in
accordance with the provisions of Article I of this Escrow Agreement.


 


(b)          The
Escrow Agent shall be protected in acting upon any written notice, request, waiver, consent, certificate, receipt, authorization,
power of attorney or other paper or document which the Escrow Agent in good faith believes to be genuine and what it purports to
be, including, but not limited to, items directing investment or non-investment of funds, items requesting or authorizing release,
disbursement or retainage of the subject matter of this Escrow Agreement and items amending the terms of this Escrow Agreement.


 


(c)          The
Escrow Agent may consult with legal counsel at the joint and several cost and expense of the undersigned (other than the Escrow
Agent) in the event of any dispute or question as to the construction of any of the provisions hereof or its duties hereunder,
and it shall incur no liability and shall be fully protected in acting in accordance with the advice of such counsel.


 


(d)          In
the event of any disagreement between any of the parties to this Escrow Agreement, or between any of them and any other Person,
resulting in adverse claims or demands being made in connection with the matters covered by this Escrow Agreement, or in the event
that the Escrow Agent, in good faith, is in doubt as to what action it should take hereunder, the Escrow Agent may, at its option,
refuse to comply with any claims or demands on it, or refuse to take any other action hereunder, so long as such disagreement continues
or such doubt exists, and in any such event, the Escrow Agent shall not be or become liable in any way or to any Person for its
failure or refusal to act, and the Escrow Agent shall be entitled to continue so to refrain from acting until (i) the rights
of all interested parties shall have been fully and finally adjudicated by a court of competent jurisdiction, or (ii) all
differences shall have been adjudged and all doubt resolved by agreement among all of the interested Persons, and the Escrow Agent
shall have been notified thereof in writing signed by all such Persons. Notwithstanding the foregoing, the Escrow Agent may in
its discretion obey the order, judgment, decree or levy of any court, whether with or without jurisdiction, or of any agency of
the United States or any political subdivision thereof, or of any agency of the Commonwealth of Virginia or of any political subdivision
thereof, and the Escrow Agent is hereby authorized in its sole discretion, to comply with and obey any such orders, judgments,
decrees or levies. The right of the Escrow Agent under this sub-paragraph are cumulative of all other rights which it may have
by law or otherwise.


 


(e)          In
the event that any controversy should arise among the parties hereto with respect to the Escrow Agreement, or should the Escrow
Agent resign and the parties hereto fail to select another Escrow Agent to act in its stead, the Escrow Agent shall have the right
to institute a bill of interpleader in any court of competent jurisdiction to determine the rights of the parties hereto.


 




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2.3           Compensation/Indemnification.


 


(a)          The
Escrow Agent shall be entitled to reasonable compensation as well as reimbursement for its reasonable costs and expenses incurred
in connection with the performance by it of service under this Escrow Agreement (including reasonable fees and expenses of the
Escrow Agent’s counsel). The Stockholders’ Representative and the Buyer each agree to so pay the Escrow Agent fifty
percent (50%) of such reasonable compensation and, further, to reimburse Escrow Agent fifty percent (50%) for such reasonable costs
and expenses. The Stockholders’ Representative and the Buyer shall each pay fifty percent (50%) of the escrow fees due herein
in the amount of Two Thousand Five Hundred Dollars ($2,500). 


 


(b)          The
Stockholders and the Buyer each hereby severally agree to indemnify and hold the Escrow Agent, its affiliates and their officers,
employees, successors, assigns, attorneys and agents (each an “Escrow Agent Indemnified Party”) harmless from
fifty percent (50%) of all losses, costs, claims, demands, expenses, damages, penalties and attorney’s fees suffered or incurred
by any Escrow Agent Indemnified Party or the Escrow Agent as a result of anything which it may do or refrain from doing in connection
with this Escrow Agreement or any litigation or cause of action arising from or in conjunction with this Escrow Agreement or involving
the Cash Escrow Deposit or the Escrow Shares deposited hereunder or for any interest upon any such monies, including, without limitation,
arising out of the negligence of Escrow Agent; provided that the foregoing indemnification shall not extend to the gross negligence
or willful misconduct of the Escrow Agent. This indemnity shall include, but not be limited to, all costs incurred in conjunction
with any interpleader which the Escrow Agent may enter into regarding this Escrow Agreement. Each of the Stockholders, jointly
and severally, is liable for all costs and expenses that the Stockholders are obligated to pay pursuant to this Escrow Agreement.


 


2.4           Miscellaneous.


 


(a)          The
Escrow Agent shall make no disbursement, investment or other use of the Cash Escrow Deposit or the Escrow Shares until and unless
it has collected the Cash Escrow Deposit and the Escrow Shares. The Escrow Agent shall not be liable for collection items until
the Cash Escrow Deposit and the Escrow Shares have been received.


 


(b)          The
Escrow Agent agrees that the Buyer and the Stockholders’ Representative may at any time, in a writing signed by both the
Buyer and the Stockholders’ Representative, remove it as Escrow Agent hereunder and substitute an individual or a bank or
trust company for it, in which event the Escrow Agent, upon receipt of written notice thereof, shall account for and deliver to
such substituted escrow agent all funds and obligations held by it, less any amounts then due and unpaid to it for fees
and expenses as herein provided, and the Escrow Agent shall thereafter be discharged from all liability hereunder.


 


(c)          The
Escrow Agent may resign at any time by giving written notice to the parties hereto, whereupon the parties hereto will immediately
appoint a successor Escrow Agent. Until a successor Escrow Agent has been named and accepts its appointment or until another disposition
of the subject matter of this Escrow Agreement has been agreed upon by all parties hereto, the Escrow Agent shall be discharged
of all of its duties hereunder save to keep the subject matter whole.


 




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(d)          All
representations, covenants, and indemnifications contained in this Article II shall survive the termination of this Escrow Agreement.


 


ARTICLE III


GENERAL PROVISIONS


 


3.1           Discharge
of Escrow Agent.  Upon the delivery of all of the Cash Escrow Deposit and the Escrow Shares pursuant to the terms
of this Escrow Agreement, the duties of the Escrow Agent shall terminate, and the Escrow Agent shall be discharged from any further
obligation hereunder.


 


3.2           Escrow
Instructions.  Where directions or instructions from more than one of the undersigned are required, such directions
or instructions may be given by separate instruments of similar tenor. Any of the undersigned may act hereunder through an agent
or attorney-in-fact; provided that satisfactory written evidence of authority is first furnished to any party hereto relying
on such authority.


 


3.3           Notice.  Any
payment, notice, request for consent, report or any other communication required or permitted in this Escrow Agreement shall be
in writing or set forth in a PDF attached to an email and shall be deemed to have been delivered in accordance with the terms of
this Escrow Agreement by facsimile, email or overnight courier only to the appropriate fax number, email address, or notice address
set forth for each party hereto as follows:


 


If to the Escrow Agent:


 


Branch Banking and Trust Company


223 West Nash Street


Wilson, NC 27893


Fax No.: (252) 246-4303


Email: mrhart@bbandt.com


Attn: Corporate Trust Services


 


If to the Buyer:


 


Global Defense & National Security Systems,
Inc.


11921 Freedom Drive, Suite 550


Two Fountain Square


Reston, Virginia 20190


Attention: Dale Davis


Tel No.: (202) 800-4333


 




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With copies to:


 


Morrison & Foerster LLP


1650 Tysons Boulevard, Suite 400


McLean, VA 22102


Attention: Lawrence T. Yanowitch, Esq.


Charles W. Katz, Esq.


Tel No.: (703) 760-7318


Fax No.: (703) 760-7777


 


If to the Stockholders or the Stockholders’
Representative:


 


Simon Lee


11091 Sunset Hills Road, Suite 200


Reston, Virginia 20190


Tel No.: (703) 691-2480


Fax No.: (703) 691-3467


 


With copies to:


 


Holland & Knight LLP


1600 Tysons Boulevard, Suite 700


McLean, Virginia 22102


Attention: William J. Mutryn


Jonathan F. Wolcott


Tel No.: (703) 720-8069


Fax No.: (703) 720-8610


 


Any party hereto may unilaterally
designate a different address by giving notice of each such change in the manner specified above to each other party hereto. Notwithstanding
the foregoing, no notice to the Escrow Agent shall be deemed given to or received by the Escrow Agent unless actually delivered
to an officer of the Escrow Agent having responsibility under this Escrow Agreement.


 


3.4           Governing
Law.  This Escrow Agreement is being made in and is intended to be construed according to the Laws of the Commonwealth
of Virginia. It shall inure to and be binding upon the parties hereto and their respective successors, heirs and assigns.


 


3.5           Construction.  Words
used in the singular number may include the plural, and the plural may include the singular. The section headings appearing in
this instrument have been inserted for convenience only and shall be given no substantive meaning or significance whatsoever in
construing the terms and conditions of this Escrow Agreement.


 




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3.6           Amendment.  The
terms of this Escrow Agreement may be altered, amended, modified or revoked only by an instrument in writing signed by the undersigned
and the Escrow Agent.


 


3.7           Force
Majeure. The Escrow Agent shall not be liable to the undersigned for any loss or damage arising out of any acts of God, strikes,
equipment or transmission failure, war, terrorism, or any other act or circumstance beyond the reasonable control of the Escrow
Agent.


 


3.8           Written
Agreement. This Escrow Agreement represents the final agreement among the parties hereto and may not be contradicted by evidence
of prior, contemporaneous or subsequent oral agreements of the parties hereto. There are no unwritten oral agreements among the
parties hereto.


 


3.9           Counterparts.
This Escrow Agreement may be executed in separate counterparts (whether transmitted by facsimile or other electronic means), none
of which need contain the signatures of all parties hereto, each of which shall be deemed to be an original, and all of which taken
together constitute one and the same instrument. It shall not be necessary in making proof of this Escrow Agreement to produce
or account for more than the number of counterparts containing the respective signatures of, or on behalf of, all of the parties
hereto.


 


3.10         Electronic
Delivery. This Escrow Agreement and any signed agreement or instrument entered into in connection with this Escrow Agreement,
and any amendments hereto or thereto, to the extent delivered by means of a facsimile machine or electronic mail (any such delivery,
an “Electronic Delivery”), shall be treated in all manner and respects as an original agreement or instrument
and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person.
At the request of any party hereto or to any such agreement or instrument, each other party hereto or thereto shall re-execute
original forms thereof and deliver them to all other parties. No party hereto or to any such agreement or instrument shall raise
the use of Electronic Delivery to deliver a signature or the fact that any signature or agreement or instrument was transmitted
or communicated through the use of Electronic Delivery as a defense to the formation of a contract, and each such party forever
waives any such defense, except to the extent such defense related to lack of authenticity.


 


3.11         Severability.
If any part of any provision of this Escrow Agreement shall be invalid or unenforceable under applicable Law, such part shall be
ineffective to the extent of such invalidity or unenforceability only, without in any way affecting the remaining parts of such
provisions or the remaining provisions hereof or of such agreement, document or writing.


 


[Signature Page(s) to Follow]


 




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IN WITNESS WHEREOF,
the parties hereto have executed this Escrow Agreement as of the date first set forth above.


 





	 	GLOBAL DEFENSE & NATIONAL SECURITY

SYSTEMS, INC.
	 	 
	 	By:	/s/ Damian Perl
	 	 	Name:  Damian Perl
	 	 	Title:  Chairman of the Board of Directors
	 	 
	 	STOCKHOLDERS’ REPRESENTATIVE
	 	 
	 	/s/ Simon Lee
	 	Simon Lee
	 	 
	 	STOCKHOLDERS
	 	 
	 	SIMON S. LEE MANAGEMENT TRUST
	 	 
	 	By:	/s/ Simon Lee
	 	 	Name: Simon Lee
	 	 	Title: Trustee
	 	 
	 	SIMON S. LEE FAMILY TRUST
	 	 
	 	By:	/s/ Julie Lee
	 	 	Name: Julie Lee
	 	 	Title: Trustee
	 	 
	 	AHL DESCENDANTS TRUST
	 	 
	 	By:	/s/ Julie Lee
	 	 	Name: Julie Lee
	 	 	Title: Trustee







 


[Signature Page to Escrow Agreement]


 




     


     


    

 


	 	STOCKHOLDERS, cont.
	 	 
	 	JSL DESCENDANTS TRUST
	 	 	 
	 	By:	/s/ Simon Lee
	 	 	Name: Simon Lee
	 	 	Title: Trustee
	 	 	 
	 	BRIAN LEE FAMILY TRUST
	 	 	 
	 	By:	/s/ Simon Lee
	 	 	Name: Simon Lee
	 	 	Title: Trustee


 


[Signature Page to Escrow Agreement]


 




     


     


    

 


Branch Banking and Trust
Company, as Escrow Agent, hereby accepts its appointment as Escrow Agent as described in the foregoing Escrow Agreement, subject
to the terms and conditions set forth therein.


 


	 	 	 	BRANCH BANKING AND TRUST COMPANY
	 	 	 	 
	Date:	November 23, 2015	 	By:	/s/
    Maura S. Pope
	 	 	 	Name:	Maura
    S. Pope
	 	 	 	Title:	Vice
    President