Document:

Unassociated Document

     

     

     

    AMENDED
      AND RESTATED

     

    MEMBERSHIP
      INTEREST PURCHASE AGREEMENT

     

    BY
      AND AMONG

     

    FORTRESS
      AMERICA ACQUISITION CORPORATION, 

    

    VTC,
      L.L.C.,

    

    VORTECH,
      LLC,

    

    THOMAS
      P. ROSATO

    

    AND
      

    

    GERARD
      J. GALLAGHER

    

    

    

    Effective
      June 26, 2006

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    TABLE
      OF CONTENTS

     

    This
      Table of Contents is for convenience of reference only and is not intended
      to
      define, limit or describe the scope, intent or meaning of any provision of
      this
      Agreement.

     

    

    

      
        	
                ARTICLE
                  I

              	
                Definitions
                  and Rules of Construction

              	
                2

              
	
                1.1

              	
                Definitions.

              	
                2

              
	
                1.2

              	
                Rules
                  of Construction.

              	
                13

              
	
                ARTICLE
                  II

              	
                Closing;
                  Purchase Price; Adjustments; Escrow

              	
                14

              
	
                2.1

              	
                Closing.

              	
                14

              
	
                2.2

              	
                Purchase
                  Consideration; Employee Payments and Stock Grants.

              	
                15

              
	
                2.4

              	
                Cash
                  Consideration and Net Working Capital Adjustments.

              	
                21

              
	
                2.5

              	
                Financial
                  Issue Resolution Process.

              	
                23

              
	
                2.6

              	
                Members’
                  Representative.

              	
                23

              
	
                ARTICLE
                  III

              	
                Representations
                  and Warranties of the Members and the Companies

              	
                24

              
	
                3.1

              	
                Organization
                  and Power.

              	
                24

              
	
                3.2

              	
                Authorization
                  and Enforceability.

              	
                25

              
	
                3.3

              	
                No
                  Violation.

              	
                25

              
	
                3.4

              	
                Consents.

              	
                26

              
	
                3.5

              	
                Financial
                  Statements.

              	
                26

              
	
                3.6

              	
                Relationships
                  with Affiliates.

              	
                27

              
	
                3.7

              	
                Indebtedness
                  to/from Officers, Directors, Members and Employees.

              	
                27

              
	
                3.8

              	
                No
                  Adverse Change.

              	
                27

              
	
                3.9

              	
                Conduct
                  of the Business.

              	
                28

              
	
                3.10

              	
                Capital
                  Structure; Equity Interests.

              	
                28

              
	
                3.11

              	
                Title
                  to Membership Interests.

              	
                28

              
	
                3.12

              	
                Articles,
                  Operating Agreements and Records.

              	
                29

              
	
                3.13

              	
                Assets
                  - In General.

              	
                29

              
	
                3.14

              	
                Real
                  Property Interests.

              	
                29

              
	
                3.15

              	
                Personal
                  Property.

              	
                29

              
	
                3.16

              	
                Intellectual
                  Property Rights.

              	
                30

              

      

    

    
      	
              3.17

            	
              Scheduled
                Contracts and Proposals.

            	
              31

            
	
              3.18

            	
              Government
                Contracting.

            	
              33

            
	
              3.19

            	
              Clients.

            	
              40

            
	
              3.20

            	
              Backlog.

            	
              40

            
	
              3.21

            	
              Compliance
                with Laws.

            	
              40

            
	
              3.22

            	
              Environmental
                Matters.

            	
              40

            
	
              3.23

            	
              Licenses
                and Permits.

            	
              40

            
	
              3.24

            	
              Absence
                of Certain Business Practices.

            	
              41

            
	
              3.25

            	
              Litigation.

            	
              41

            
	
              3.26

            	
              Personnel
                Matters.

            	
              42

            
	
              3.27

            	
              Labor
                Matters.

            	
              44

            
	
              3.28

            	
              ERISA.

            	
              44

            
	
              3.29

            	
              Tax
                Matters.

            	
              47

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              3.30

            	
              Insurance.

            	
              49

            
	
              3.31

            	
              Bank
                Accounts.

            	
              50

            
	
              3.32

            	
              Powers
                of Attorney.

            	
              50

            
	
              3.33

            	
              No
                Broker.

            	
              50

            
	
              3.34

            	
              Security
                Clearances.

            	
              50

            
	
              3.35

            	
              No
                Unusual Transactions.

            	
              51

            
	
              3.36

            	
              Full
                Disclosure.

            	
              53

            
	
              ARTICLE
                IV

            	
              Representations
                and Warranties of FAAC

            	
              53

            
	
              4.1

            	
              Organization
                and Power.

            	
              53

            
	
              4.2

            	
              Authorization
                and Enforceability.

            	
              54

            
	
              4.3

            	
              No
                Violation.

            	
              54

            
	
              4.4

            	
              Consents.

            	
              54

            
	
              4.5

            	
              Authorization
                of Stock Consideration.

            	
              54

            
	
              4.6

            	
              Capitalization.

            	
              55

            
	
              4.7

            	
              Public
                Disclosure Documents.

            	
              55

            
	
              4.8

            	
              Litigation.

            	
              56

            
	
              4.9

            	
              Brokers.

            	
              56

            
	
              4.10

            	
              Full
                Disclosure.

            	
              56

            
	
              ARTICLE
                V

            	
              Covenants 

            	
              56

            
	
              5.1

            	
              Conduct
                of the Companies.

            	
              56

            
	
              5.2

            	
              Access
                to Information Prior to the Closing; Confidentiality.

            	
              56

            
	
              5.3

            	
              Best
                Efforts.

            	
              57

            
	
              5.4

            	
              Consents.

            	
              57

            
	
              5.5

            	
              Access
                to Books and Records Following the Closing.

            	
              57

            
	
              5.6

            	
              Members’
                Post-Closing Confidentiality Obligation.

            	
              58

            
	
              5.7

            	
              Expenses.

            	
              58

            
	
              5.8

            	
              Certain
                Closing Payments.

            	
              58

            
	
              5.9

            	
              No
                Solicitation of Competitive Transactions.

            	
              60

            
	
              5.10

            	
              Personnel.

            	
              60

            
	
              5.11

            	
              Certain
                Tax Matters.

            	
              61

            
	
              5.12

            	
              Public
                Announcements.

            	
              63

            
	
              5.13

            	
              Communications
                with Customers and Suppliers.

            	
              64

            
	
              5.14

            	
              Evergreen
                Agreement.

            	
              64

            
	
              5.15

            	
              Covenants
                Regarding Management of FAAC.

            	
              64

            
	
              5.16

            	
              Welfare
                Plans

            	
              65

            
	
              5.17

            	
              Cooperation
                in Connection with Proxy Materials.

            	
              65

            
	
              5.18

            	
              Continuing
                Related Party Transactions.

            	
              66

            
	
              5.19

            	
              Update
                of Disclosure Schedules.

            	
              67

            
	
              5.20

            	
              Threatened
                Litigation.

            	
              67

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              ARTICLE
                VI

            	
              Deliveries
                by All Parties at Closing

            	
              68

            
	
              6.1

            	
              Conditions
                to All Parties Obligations.

            	
              68

            
	
              6.2

            	
              Conditions
                to the Members Obligations.

            	
              68

            
	
              6.3

            	
              Conditions
                to FAAC’s Obligations.

            	
              69

            
	
              ARTICLE
                VII

            	
              Deliveries
                by Members and the
                Companies at
                Closing

            	
              70

            
	
              7.1

            	
              Members’
                and the Companies’ Closing Certificate.

            	
              70

            
	
              7.2

            	
              Consents.

            	
              71

            
	
              7.3

            	
              Estimated
                Closing Balance Sheet.

            	
              71

            
	
              7.4

            	
              Resignations
                of Directors and Officers.

            	
              71

            
	
              7.5

            	
              Termination
                of Credit Facility/Facilities.

            	
              71

            
	
              7.6

            	
              Release
                of Liens.

            	
              72

            
	
              7.7

            	
              Phantom
                Membership Interest Releases.

            	
              72

            
	
              7.8

            	
              Comfort
                Letters.

            	
              72

            
	
              7.9

            	
              Evergreen
                Release.

            	
              72

            

    

    
      
        	
                7.10

              	
                Senior
                  Executive Employment Agreements.

              	
                72

              
	
                7.11

              	
                Key
                  Employee Employment Agreements.

              	
                72

              
	
                7.12

              	
                Stock
                  Consideration Documents.

              	
                72

              
	
                7.13

              	
                Voting
                  Agreement.

              	
                72

              
	
                7.14

              	
                Escrow
                  Agreements.

              	
                72

              
	
                7.15

              	
                Related
                  Party Termination Agreements.

              	
                72

              
	
                7.16

              	
                New
                  VTC Lease and VTC Lease Appraisal.

              	
                73

              
	
                7.17

              	
                Further
                  Instruments.

              	
                73

              
	
                ARTICLE
                  VIII

              	
                Deliveries
                  by FAAC at Closing

              	
                73

              
	
                8.1

              	
                Officer’s
                  Certificate.

              	
                73

              
	
                8.2

              	
                Closing
                  Consideration and Escrow Deposits.

              	
                73

              
	
                8.3

              	
                Stock
                  Consideration Documents.

              	
                74

              
	
                8.4

              	
                Senior
                  Executive Employment Agreement.

              	
                74

              
	
                8.5

              	
                Key
                  Employee Employment Agreements.

              	
                74

              
	
                8.6

              	
                Management
                  of FAAC.

              	
                74

              
	
                8.7

              	
                Escrow
                  Agreements.

              	
                74

              
	
                8.8

              	
                Employee
                  Stock Grants.

              	
                74

              
	
                8.9

              	
                Further
                  Instruments.

              	
                74

              
	
                ARTICLE
                  IX

              	
                Survival
                  and Indemnification

              	
                74

              
	
                9.1

              	
                Survival
                  of Representations and Warranties.

              	
                74

              
	
                9.2

              	
                Indemnification.

              	
                75

              
	
                9.3

              	
                General
                  Indemnity Escrow Account.

              	
                80

              
	
                9.4

              	
                Effect
                  of Investigation.

              	
                80

              
	
                ARTICLE
                  X

              	
                Termination 

              	
                81

              
	
                10.1

              	
                Termination.

              	
                81

              
	
                10.2

              	
                Procedure
                  and Effect of Termination.

              	
                81

              

      

      
        	
                ARTICLE
                  XI

              	
                Miscellaneous

              	
                82

              
	
                11.1

              	
                Further
                  Assurances.

              	
                82

              
	
                11.2

              	
                Notices.

              	
                82

              
	
                11.3

              	
                Governing
                  Law.

              	
                83

              
	
                11.4

              	
                Entire
                  Agreement.

              	
                83

              
	
                11.5

              	
                Severability.

              	
                83

              
	
                11.6

              	
                Amendment.

              	
                84

              
	
                11.7

              	
                Effect
                  of Waiver or Consent.

              	
                84

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                11.8

              	
                Rights
                  and Remedies Cumulative.

              	
                84

              
	
                11.9

              	
                Parties
                  in Interest; Limitation on Rights of Others.

              	
                84

              
	
                11.10

              	
                Assignability.

              	
                84

              
	
                11.11

              	
                Dispute
                  Resolution and Arbitration.

              	
                85

              
	
                11.12

              	
                Jurisdiction;
                  Court Proceedings; Waiver of Jury Trial.

              	
                86

              
	
                11.13

              	
                No
                  Other Duties.

              	
                86

              
	
                11.14

              	
                Reliance
                  on Counsel and Other Advisors.

              	
                87

              
	
                11.15

              	
                Waiver
                  of Rights Against Company’s Trust Fund.

              	
                87

              
	
                11.16

              	
                Counterparts.

              	
                87

              

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
SCHEDULES

    

    

      
        	
                Schedule

              	
                Title

              
	
                1.1

              	
                Bonds

              
	
                3.1(b)

              	
                Jurisdictions
                  where each
                  of the Companies is
                  qualified or licensed to do business; good standing

              
	
                3.4(a)

              	
                Consents

              
	
                3.5(c)

              	
                Undisclosed
                  Liabilities

              
	
                3.5(e)

              	
                Letters
                  of Credit and Guarantees

              
	
                3.5(f)

              	
                Contingent
                  or Deferred Acquisition Expenses or Payments

              
	
                3.6

              	
                Interest
                  of Affiliates and Members in Property or Contracts of the
                  Companies

              
	
                3.9(a)

              	
                Cooperative
                  Business Arrangements

              
	
                3.9(b)

              	
                Letters
                  of Intent and Non-Competition Agreements

              
	
                3.9(c)

              	
                Non-Disclosure
                  Arrangements

              
	
                3.10(a)

              	
                Owners
                  of Equity Interests of the Companies

              
	
                3.13

              	
                Assets-In
                  General

              
	
                3.14

              	
                Real
                  Property Interests

              
	
                3.15(a)

              	
                Personal
                  Property, owned or leased

              
	
                3.15(b)

              	
                UCC
                  Financing Statements

              
	
                3.16(a)

              	
                Commercial
                  Software and Intellectual Property Rights

              
	
                3.16(b)

              	
                Intellectual
                  Property Rights used by, but not owned by the Companies

              
	
                3.16(c)

              	
                Rights
                  of other Persons to Intellectual Property Rights or Intellectual
                  Property

              
	
                3.16(d)

              	
                No
                  Infringement 

              
	
                3.16(f)

              	
                Government
                  Data and Software Rights

              
	
                3.17(a)

              	
                List
                  of Scheduled Contracts

              
	
                3.17(b)

              	
                Status
                  of Scheduled Contracts

              
	
                3.17(c)

              	
                List
                  and Status of Bids, Proposals or
                  Quotations

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                3.18(b)

              	
                List
                  of Government Contracts and Government Subcontracts

              
	
                3.18(c)

              	
                List
                  of Bids

              
	
                3.18(d)

              	
                List
                  of Teaming Agreements

              
	
                3.18(e)

              	
                List
                  of Company Subcontracts

              
	
                3.18(f)

              	
                List
                  of Marketing Agreements

              
	
                3.18(g)

              	
                Status
                  of Government Contracts, Subcontracts and Bids

              
	
                3.18(i)

              	
                Audits

              
	
                3.18(j)

              	
                Financing
                  Arrangements

              
	
                3.18(k)

              	
                Protests

              
	
                3.18(l)

              	
                Claims

              
	
                3.18(m)

              	
                Multiple
                  Award Schedules 

              
	
                3.18(n)

              	
                Government
                  Furnished Property

              
	
                3.18(o)

              	
                Former
                  Government Officials

              
	
                3.18(p)

              	
                Ethics
                  Policy

              
	
                3.18(q)

              	
                Timekeeping
                  Policy

              
	
                3.20

              	
                Backlog

              
	
                3.23(a)

              	
                Permits

              
	
                3.25(a)

              	
                Litigation
                  Pending or Threatened

              
	
                3.25(b)

              	
                Claims

              
	
                3.25(c)

              	
                Indemnification
                  Obligations

              
	
                3.26(a)

              	
                List
                  and Positions of Personnel

              
	
                3.26(b)

              	
                Phantom
                  Membership Interest Payments

              
	
                3.26(d)

              	
                Personnel
                  Policies and Manuals

              
	
                3.26(e)

              	
                Personnel
                  Agreements

              
	
                3.26(f)

              	
                Discontinuation
                  of Employment 

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                3.26(h)
                  

              	
                Leased
                  Employees/Independent Contractors 

              
	
                3.28(b)

              	
                List
                  of Plans

              
	
                3.28(g)

              	
                Filings

              
	
                3.28(j)

              	
                Time
                  of Vesting or Payment 

              
	
                3.28(l)

              	
                Compliance

              
	
                3.28(m)

              	
                Self
                  Insured Plans

              
	
                3.29

              	
                Tax
                  Matters

              
	
                3.30(a)

              	
                Insurance
                  Policies

              
	
                3.30(b)

              	
                Insurance
                  Claims 

              
	
                3.31

              	
                Bank
                  Accounts

              
	
                3.34

              	
                Facility
                  Clearances

              
	
                3.35

              	
                No
                  Unusual Transactions 

              

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBITS

     

    

      
        	
                A

              	
                Financial
                  Statements

              
	
                B

              	
                Form
                  Convertible Promissory Note

              
	
                C

              	
                Acquisition
                  Agreement

              
	
                D

              	
                Registration
                  Rights Agreement

              
	
                E

              	
                Lock
                  Up Agreement

              
	
                F

              	
                Lock
                  Up Escrow Agreement

              
	
                G

              	
                Restricted
                  Stock Plan

              
	
                H

              	
                Restricted
                  Stock Agreement

              
	
                I-1

              	
                Balance
                  Sheet Escrow Agreement

              
	
                I-2

              	
                General
                  Indemnity Escrow Agreement

              
	
                J

              	
                Phantom
                  Membership Interest Release

              
	
                K

              	
                Evergreen
                  Acquisition Agreement

              
	
                L-1

              	
                Rosato
                  Employment Agreement

              
	
                L-2

              	
                Gallagher
                  Employment Agreement

              
	
                M

              	
                Key
                  Employee Employment Agreement

              
	
                N

              	
                Voting
                  Agreement

              
	
                O

              	
                Members/Companies
                  Closing Certificate

              
	
                P

              	
                FAAC
                  Closing Certificate

              

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    AMENDED
      AND RESTATED

     

    MEMBERSHIP
      INTEREST PURCHASE AGREEMENT

     

    AMENDED
      AND RESTATED MEMBERSHIP INTEREST PURCHASE AGREEMENT (“Agreement”),
      dated
      June 26, 2006 (the “Effective
      Date”),
      by
      and among (i) Fortress America Acquisition Corporation, a Delaware
      corporation (“FAAC”);
      (ii) VTC, L.L.C., a Maryland limited liability company (“VTC”);
      (iii) Vortech, LLC, a Maryland limited liability company (“Vortech”);
      Thomas P. Rosato and Gerard J. Gallagher (who together own all of the
      outstanding membership interests of both VTC and Vortech (each a “Member”
and
      jointly the “Members”));
      and
      (iv) Thomas P. Rosato in his capacity as the “Members’ Representative” (as
      defined in Section 2.6(a)).

     

    RECITALS:

     

    R-1. The
      Members are the holders and owners of all of the issued and outstanding “Equity
      Interests” (as hereinafter defined) of each VTC and Vortech (the “Membership
      Interests”).

     

    R-2. By
      the
      terms of a Membership Interest Purchase Agreement dated June 5, 2006 (the
“Initial
      Agreement”),
      FAAC
      agreed to purchase from the Members and the Members agreed to sell to FAAC
      the
      Membership Interests for certain consideration described therein including
      cash
      in the amount of Nineteen Million Dollars ($19,000,000.00), a convertible
      promissory note in the amount of Eight Million Dollars ($8,000,000) and FAAC
      common stock having a value of Eleven Million Five Hundred Thousand Dollars
      ($11,500,000.00) as determined using the “Average Share Value” as defined
      therein.

     

    R-3. FAAC
      and
      the Members have agreed to modify certain portions of the consideration payable
      by FAAC to the Members for the Membership Interests by (i) reducing the
      amount of cash payable by FAAC to the Members from $19,000,000.00 to Eleven
      Million Dollars ($11,000,000.00), (ii) increasing the amount payable by
      convertible promissory notes from $8,000,000 to Ten Million Dollars
      ($10,000,000) and (iii) increasing the amount of FAAC common stock issuable
      to the Members from FAAC common stock having a value of $11,500,000 to FAAC
      common stock having a value of Seventeen Million Five Hundred Thousand Dollars
      ($17,500,000.00).

     

    R-4. The
      parties hereto wish to amend and restate the Initial Purchase Agreement to
      reflect the changes to the cash and FAAC common stock components of the
      consideration payable by FAAC to the Members for the Membership
      Interests.

     

    R-5. On
      or
      before the Effective Date and the “Closing Date” (as hereinafter defined), FAAC
      intends to change its name to “Fortress International Group, Inc.”

     

    NOW
      THEREFORE, in consideration of the premises and the representations, warranties,
      covenants and agreements contained in this Agreement, and intending to be
      legally bound hereby, the parties hereby amend and restate the Initial Purchase
      Agreement in its entirety:

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    

     

    ARTICLE
      I

    Definitions
      and Rules of Construction       

     

    1.1 Definitions.

     

    As
      used
      in this Agreement, the following terms shall have the meanings as set
forth
      below:

     

    “Acquired
      Business”
means
      the collective operations and business activities of the Companies as conducted
      and
      existing as of the Closing Date.

     

    “Acquisition
      Agreement”
has
      the
      meaning set forth in Section 2.2(d).

     

    “Acquisition
      Proposal”
has
      the
      meaning set forth in Section 5.9(a).

     

    “Active”
has
      the
      meaning set forth in Section 3.18(a).

     

    “Adjusted
      Closing Net Working Capital”
has
      the
      meaning set forth in Section 2.4(b).

     

    “Affiliate”
means,
      as to any Person, any other Person that, directly or indirectly, is in control
      of, is controlled by, or is under common control with, such Person. For purposes
      of this definition, “control” of a Person means the power, directly or
      indirectly, either to (a) vote 10% or more of the securities having
      ordinary voting power for the election of directors of such Person or
      (b) direct or cause the direction of the management and policies of such
      Person, whether by contract or otherwise.

     

    “Agreement”
has
      the
      meaning set forth in the Preamble.

     

    “Acquisition
      Agreement”
has
      the
      meaning set forth in Section 2.2(d).

     

    “Acquisition
      Proposal”
has
      the
      meaning set forth in Section 5.8.

     

    “Assumed
      Debt”
has
      the
      meaning set forth in Section 2.2(c).

     

    “Audited
      Financial Statements”
means
      collectively the audited consolidated balance sheets and statements of income,
      changes in shareholders’ equity, and cash flow together with accompanying notes
      of the Companies as of December 31, 2003 and December 31, 2004 together with
      the
      December 31, 2005 Financial Statements.

     

    “Auditor”
has
      the
      meaning set forth in Section 2.5.

     

    “Average
      Share Value”
shall
      mean Five and 46/100 Dollars ($5.46) per share which the undersigned agree
      was
      the average closing price of a share of FAAC common stock on the Nasdaq OTC
      market for the twenty (20) consecutive trading days prior to public announcement
      by FAAC of the contemplated purchase of the Membership Interests pursuant to
      this Agreement (June 5, 2006).

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

     

    “Balance
      Sheet Escrow Account”
has
      the
      meaning set forth in Section 2.3.

     

    “Balance
      Sheet Escrow Agreement”
has
      the
      meaning set forth in Section 2.3.

     

    “Balance
      Sheet Escrow Property”
has
      the
      meaning set forth in Section 2.3.

     

    “Balance
      Sheet Escrow Shares”
has
      the
      meaning set forth in Section 2.3.

     

    “Base
      Net Working Capital Amount”
means
      One Million Dollars ($1,000,000).

     

    “Benefit
      Arrangement”
has
      the
      meaning set forth in Section 3.28(a).

     

    “Bid”
has
      the
      meaning set forth in Section 3.18(a).

     

    “Bonus
      Pool”
has
      the
      meaning set forth in Section 3.26(b).

     

    “Business
      Day”
shall
      mean any day other than a Saturday, Sunday, or any Federal holiday. If any
      period expires on a day that is not a Business Day or any event or condition
      is
      required by the terms of this Agreement to occur or be fulfilled on a day that
      is not a Business Day, such period shall expire or such event or condition
      shall
      occur or be fulfilled, as the case may be, on the next succeeding Business
      Day.

     

    “Cash
      Consideration”
has
      the
      meaning set forth in Section 2.4.

     

    “Claimant”
has
      the
      meaning set forth in Section 11.11(a).

     

    “Claims”
means
      jointly all Third-Party Claims and Direct Claims.

     

    “Closing”
has
      the
      meaning set forth in Section 2.1.

     

    “Closing
      Balance Sheet”
has
      the
      meaning set forth in Section 2.4(d).

     

    “Closing
      Date”
has
      the
      meaning set forth in Section 2.1.

     

    “Closing
      Net Working Capital”
has
      the
      meaning set forth in Section 2.4(b).

     

    “Closing
      Purchase Consideration”
has
      the
      meaning set forth in Section 2.2.

     

    “COC”
has
      the
      meaning set forth in Section 3.18(m).

     

    “Code”
means
      the Internal Revenue Code of 1986, as amended from time to time, or
      corresponding provisions of subsequent superseding federal revenue
      Laws.

     

    “Commercial
      Software”
means
      commercially available Software licensed pursuant to a standard license
      agreement with a value of more than $1,000 and excluding any software, as to
      which a license is implied by sale of a product.

     

    “Companies”
means
      Vortech and VTC together and “Company”
refers
      to either of them.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

     

    “Companies’
      Information”
has
      the
      meaning set forth in Section 5.17.

     

    “Company
      Subcontract”
has
      the
      meaning set forth in Section 3.18(a).

     

    “Confidentiality
      Agreement”
has
      the
      meaning set forth in Section 5.2.

     

    “Consultant”
means
      all persons who (i) are or have been engaged as consultants by either of the
      Companies or (ii) otherwise provide services to either of the Companies under
      a
      contractual
      arrangement.

     

    “Contemplated
      Transactions”
means
      the transactions contemplated by this Agreement and the other Transaction
      Documents.

     

    “Continuing
      Related Party Transactions”
has
      the
      meaning set forth in Section 3.6.

     

    “Convertible
      Promissory Note”
and
      “Convertible
      Promissory Notes”
have
      the meanings set forth in Section 2.2(b).

     

    “Copyrights”
means
      all United States and foreign copyright registrations and applications
      therefor.

     

    “Damages”
has
      the
      meaning set forth in Section 2.6(b).

     

    “December
      2005 Balance Sheet”
means
      the audited consolidated balance sheets of the Companies as of December 31,
      2005
      included in the December 2005 Financial Statements.

     

    “December
      2005 Financial Statements”
means
      the audited consolidated balance sheets and statements of income, changes in
      shareholders’ equity, and cash flow together with accompanying notes of the
      Companies as of December 31, 2005, a copy of which is included in the Financial
      Statements attached as Exhibit
      A.
      

     

    “Direct
      Claim”
and
      “Direct
      Claims”
mean
      any claim or claims (other than Third Party Claims) by an Indemnified Party
      against an Indemnifying Party for which the Indemnified Party may seek
      indemnification under this Agreement.

     

    “Direct
      Claim Notice”
has
      the
      meaning set forth in Section 9.2(d).

     

    “Direct
      Claim Notice Period”
has
      the
      meaning set forth in Section 9.2(d).

     

    “Disclosure
      Schedules”
has
      the
      meaning set forth in the definition of “Schedule.”

     

    “Disclosure
      Schedule Update Losses”
means
      Losses that may be sustained, suffered or incurred by FAAC Indemnitees and
      that
      are related to facts and circumstances reflected in the Updated Disclosure
      Schedules, but not in the Disclosure Schedules dated as of the date of this
      Agreement.

     

    “Dispute
      Notice”
has
      the
      meaning set forth in Section 11.11(a).

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

     

    “D&O
      Indemnification Claims”
means
      actions, suits, claims trials, written demands, arbitrations, proceedings and
      actions relating to indemnification under or with respect to indemnification
      provisions in the Companies Articles of Organization or Operating Agreements
      (collectively, the “D&O
      Indemnification Claims”)

     

    “Earn
      Out Closing Price Thresholds”
and
      “Earn
      Out Closing Price Threshold”
have
      the meanings set forth in Section 2.2(e).

     

    “Earn
      Out Consideration”
has
      the
      meaning set forth in Section 2.2(e).

     

    “Earn
      Out Dispute Notice”
has
      the
      meaning set forth in Section 2.2(e).

     

    “Earn
      Out Notice Period”
has
      the
      meaning set forth in Section 2.2(e).

     

    “Earn
      Out Threshold Share Value”
has
      the
      meaning set forth in Section 2.2(e).

     

    “Earn
      Out Statement”
has
      the
      meaning set forth in Section 2.2(e).

     

    “Effective
      Date”
has
      the
      meaning set forth in the Preamble.

     

    “Effected
      Earn Out Closing Price Thresholds”
has
      the
      meaning set forth in Section 2.2(e).

     

    “Employee
      Bonuses”
has
      the
      meaning set forth in Section 3.26(b).

     

    “Employee
      Stock Grants”
and
      “Employee
      Stock Grant”
have
      the meanings set forth in Section 2.2(g).

     

    “Entity”
means
      any general partnership, limited partnership, limited liability partnership,
      limited liability company, corporation, joint venture, trust, business trust,
      cooperative, association, foreign trust or foreign business
      organization.

     

    “Environmental
      Laws”
means
      any and all Federal, state, local and foreign statutes, laws (including case
      or
      common law), regulations, ordinances, rules, judgments, orders, decrees, codes,
      injunctions, permits, concessions, grants, franchises, licenses, or agreements
      relating to human health, the environment or omissions, discharges or releases
      of pollutants, contaminants, Hazardous Substances or wastes into the environment
      including, without limitation, ambient air, surface water, ground water,
      facilities, structures, or land, or otherwise relating to the manufacture,
      processing, distribution, use, treatment, storage, disposal, transport or
      handling of pollutants, contaminants, Hazardous Substances or wastes or the
      investigation, clean-up or other remediation thereof. Without limiting the
      generality of the foregoing, “Environmental Laws” include: (a) the Resource
      Conservation and Recovery Act, 42 U.S.C. § 6901 et seq.,
      as
      amended; (b) the Comprehensive Environmental Response, Compensation and
      Liability Act of 1980, 26 U.S.C. § 4611 and 42 U.S.C. § 9601 et
      seq.,
      as
      amended; (c) the Superfund Amendment and Reauthorization Act of 1984, as
      amended; (d) the Clean Air Act, 42 U.S.C. § 7401 et seq.,
      as
      amended; (e) the Clean Water Act, 33 U.S.C. 5 1251 et
      seq.;
      (f) the Safe Drinking Water Act, 42 U.S.C. § 300f et seq.;
      and
      (g) the Occupational Safety and Health Act of 1976, 29 U.S.C.A. § 651, as
      amended, and all rules and regulations promulgated thereunder.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

     

    “Environmental
      Liabilities”
means
      all liabilities, whether vested or unvested, fixed or unfixed, actual or
      potential, that arise under or relate to Environmental Laws, as applied to
      the
      facilities and business of the
      Companies, including, without limitation: (i) the investigation, clean-up
      or remediation of contamination or environmental degradation or damage caused
      by
      or arising from the generation, use handling, treatment, storage,
      transportation, disposal, discharge, release or emission of Hazardous
      Substances; (ii) personal injury, wrongful death or property damage claims;
      or (iii) claims for natural resource damages.

     

    “Equity
      Interest”
of
      any
      Person means any and all shares, rights to purchase, warrants or options
      (whether or not currently exercisable), participations or other equivalents
      of
      or interests in (however designated) the equity (including without limitation
      common stock, preferred stock and limited liability company, partnership and
      joint venture interests) of such Person.

     

    “ERISA”
has
      the
      meaning set forth in Section 3.28(a).

     

    “ERISA
      Affiliate”
has
      the
      meaning set forth in Section 3.28(a).

     

    “Escrow
      Account”
and
      “Escrow
      Accounts”
have
      the meanings referred to in Section 2.3.

     

    “Escrow
      Agent”
means
      and refers to SunTrust
      Bank. 

     

    “Escrow
      Agreements”
has
      the
      meaning set forth in Section 2.3.

     

    “Escrow
      Deposits”
has
      the
      meaning set forth in Section 2.3.

     

    “Escrowed
      Property”
has
      the
      meaning set forth in Section 2.3.

     

    “Estimated
      Closing Balance Sheet”
has
      the
      meaning set forth in Section 2.4(b).

     

    “Estimated
      Closing Cash Purchase Price”
has
      the
      meaning set forth in Section 2.4(a).

     

    “Evergreen”
has
      the
      meaning set forth in Section 3.33.

     

    “Evergreen
      Agreement”
has
      the
      meaning set forth in Section 3.33.

     

    “Evergreen
      Fees”
has
      the
      meaning set forth in Section 5.14.

     

    “Evergreen
      Release”
has
      the
      meaning set forth in Section 5.14.

     

    “Evergreen
      Stock Payment”
has
      the
      meaning set forth in Section 5.8.

     

    “Evergreen
      Stock Payment Amount”
has
      the
      meaning set forth in Section 5.8.

     

    “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended and the rules and regulations
      promulgated thereunder.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

     

    “Executive
      Employment Agreements”
has
      the
      meaning set forth in Section 5.10.

     

    “FAAC”
refers
      to Fortress America Acquisition Corporation, a Delaware
      corporation.

     

    “FAAC
      Indemnitees”
has
      the
      meaning set forth in Section 9.2(b)(i).

     

    “FAAC
      Securities”
has
      the
      meaning set forth in Section 4.6.

     

    “Financial
      Statements”
means
      collectively (i) the Audited Financial Statements and (ii) the Interim Financial
      Statements, copies of all of which are attached hereto as Exhibit
      A.

     

    “Financing
      Statements”
has
      the
      meaning set forth in Section 3.15(b).

     

    “Forfeited
      Shares”
has
      the
      meaning set forth in Section 2.2(g). 

     

    “Form
      5500”
means
      the Internal Revenue Service Form 5500 Annual Return/ Report of Employee Benefit
      Plan.

     

    “GAAP”
means
      generally accepted accounting principles as set forth in the opinions and
      pronouncements of the Accounting Principles Board of the American Institute
      of
      Certified Public Accountants and statements and pronouncements of the Financial
      Accounting Standards Board or in such other statements by such other Person
      as
      may be approved by a significant segment of the accounting profession in the
      United States.

     

    “Gallagher”
refers
      to Gerard J. Gallagher.

     

    “General
      Indemnity Escrow”
means
      the escrow established under the General Indemnity Escrow Agreement to hold
      the
      General Indemnity Escrow Property.

     

    “General
      Indemnity Escrow Account”
has
      the
      meaning set forth in Section 2.3.

     

    “General
      Indemnity Escrow Agreement”
has
      the
      meaning set forth in Section 2.3.

     

    “General
      Indemnity Escrow Property”
has
      the
      meaning set forth in Section 2.3.

     

    “General
      Indemnity Escrow Shares”
has
      the
      meaning set forth in Section 2.3.

     

    “Governmental
      Authority”
means
      any nation or government, any foreign or domestic Federal, state, county,
      municipal or other political instrumentality or subdivision thereof and any
      foreign or domestic entity or body exercising executive, legislative, judicial,
      regulatory, administrative or taxing functions of or pertaining to
      government.

     

    “Government
      Contract”
has
      the
      meaning set forth in Section 3.18(a).

     

    “Government
      Contractor”
means
      a
      prime contractor or subcontractor to a contract or subcontract, at any tier,
      as
      applicable, issued by a Governmental Authority.

     

    “Government-Furnished
      Property”
has
      the
      meaning set forth in Section 3.18(n).

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    

     

    “Government
      Subcontract”
has
      the
      meaning set forth in Section 3.18(a).

     

    “Hazardous
      Substances”
means
      any substance that is toxic, ignitable, reactive, corrosive, radioactive,
      caustic, or regulated as a hazardous substance, contaminant, toxic substance,
      toxic pollutant, hazardous waste, special waste, or pollutant, including,
      without limitation, petroleum, its derivatives, by-products and other
      hydrocarbons, poly-chlorinated bi-phenyls and asbestos regulated under, or
      that
      is the subject of, applicable Environmental Laws.

     

    “Highest
      Average Trading Price”
has
      the
      meaning set forth in Section 2.2(e).

     

    “Indebtedness”
means
      (a) indebtedness of either of the Companies for borrowed money (including,
      without limitation, any pre-payment penalties and costs associated with
      pre-payment of such indebtedness) but excluding the Assumed Debt; (b)
      obligations of either of the Companies evidenced by bonds (all of which
      performance bonds are shown on Schedule 1.1 of the Disclosure Schedules), notes,
      debentures, bankers acceptances or similar instruments; (c) obligations of
      either of the Companies under installment sales, conditional sale, title
      retention or similar agreements or arrangements creating an obligation with
      respect to the deferred purchase price of property or services (other than
      customary trade credit); (d) obligations of either of the Companies secured
      by a
      Lien on any property; and (e) guarantees by either of the Companies in respect
      of Indebtedness.

     

    “Indemnified
      Party”
means
      and refers to a party that has the right under ARTICLE IX to seek
      indemnification from an Indemnifying Party.

     

    “Indemnifying
      Party”
means
      and refers to a party that has the obligation under ARTICLE IX to indemnify
      an Indemnified Party.

     

    “Initial
      Purchase Agreement”
has
      the
      meaning set forth in Recital R-2.

     

    “Intellectual
      Property”
means
      Software and Technology.

     

    “Intellectual
      Property Rights”
means
      rights that exist under Laws respecting Copyrights, Patents, Trademarks and
      Trade Secrets.

     

    “Interim
      Financial Statements”
means
      the internally prepared unaudited consolidated interim balance sheets and
      related interim consolidated statements of operations, changes in Members equity
      and cash flows of the Companies for the period January 1, 2006 through
      March 31, 2006, a copy of which is included as part of the Financial Statements
      attached as Exhibit
      A
      hereto.

     

    “IRS”
means
      and refers to the Internal Revenue Service.

     

    “Key
      Employee Employment Agreements”
has
      the
      meaning set forth in Section 5.10(c).

     

    “Key
      Employees”
has
      the
      meaning set forth in Section 5.10(a).

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    

    “Knowledge
      of the Companies”
means
      the actual knowledge of each of Rosato and Gallagher.

     

    “Knowledge
      of FAAC”
means
      the actual knowledge of Harvey L. Weiss or C. Thomas McMillen.

     

    “Laws”
means
      (a) all constitutions, treaties, laws, statutes, codes, regulations,
      ordinances, orders, decrees, rules, or other requirements with similar effect
      of
      any Governmental Authority, (b) all judgments, orders, writs, injunctions,
      decisions, rulings, decrees and awards of any Governmental Authority, and
      (c) all provisions of the foregoing, in each case binding on or affecting
      the Person referred to in the context in which such word is used; “Law” means
      any one of them and the words “Laws” and “Law” include Environmental
      Laws.

     

    “Lien”
means
      any lien, statutory or otherwise, security interest, mortgage, deed of trust,
      priority, pledge, charge, conditional sale, title retention agreement, financing
      lease or other encumbrance or similar right of others, or any agreement to
      give
      any of the foregoing.

     

    “Lock
      Up Agreement”
      has
      the
      meaning set forth in Section 2.2(d)(iv).

     

    “Lock
      Up Escrow Agreement”
      has
      the
      meaning set forth in Section 2.2(d)(iv).

     

    “Lock
      Up Period”
has
      the
      meaning set forth in Section 2.2(e).

     

    “Lock
      Up Termination Date”
means
      July 13, 2008.

     

    “Losses”
has
      the
      meaning set forth in Section 9.2(a)(i).

     

     

    “Material
      Adverse Effect”
means
      any change, event or effect that is, or would reasonably be expected to be,
      materially adverse to (i) the business, assets (whether tangible or intangible),
      liabilities, financial condition, operations, results of operations or prospects
      of the Companies, or (ii) the Companies’ ability to consummate the transactions
      contemplated by this Agreement, except, in each case, any change, event or
      effect directly resulting from (A) decreases in working capital
      substantially consistent with the Companies’ internal projections; (B) any
      adverse conditions, occurring after the date hereof, affecting the Companies
      industries as a whole or the U.S. or world economies as a whole, that do not
      disproportionately affect the Companies; or (C) taking any action required
      by
      this Agreement.

     

    “Material
      Negotiations”
has
      the
      meaning set forth in Section 5.9(b).

     

    “Maximum
      Earn Out Closing Price Threshold”
has
      the
      meaning set forth in Section 2.2(e).

     

    “Members”
and
      “Member”
have
      the meanings referred to in the Preamble.

     

    “Members
      Indemnitees”
has
      the
      meaning set forth in Section 9.2(a).

     

    “Membership
      Interests”
means
      all of the issued and outstanding Equity Interests of the Companies, all of
      which are owned by the Members.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    

     

    “Members’
      Proportionate Interests”
means
      each of the Members’ proportionate interest relative to the other Members, as
      determined by the number of Membership Interests held by each Member on the
      Closing Date over the total number of Membership Interests held by the Members
      in each Company as of the Closing Date. Each of the Members owns fifty percent
      (50%) of each Company and accordingly each member has an aggregate fifty percent
      (50%) interest in the Companies.

     

    “Members’
      Representative”
has
      the
      meaning set forth in Section 2.6.

     

    “Members’
      Transaction Costs”
has
      the
      meaning set forth in Section 5.7.

     

    “Minimum
      Threshold Share Price”
has
      the
      meaning set forth in Section 2.2(e).

     

    “Non-Key
      Employees”
has
      the
      meaning set forth in Section 5.10(a).

     

    “New
      VTC Lease”
has
      the
      meaning set forth in Section 5.18.

     

    “Participating
      Employees”
has
      the
      meaning set forth in Section 2.2(g).

     

    “Patents”
means
      issued patents, including United States and foreign patents and applications
      therefor; divisions, reissues, continuations, continuations-in-part,
      reexaminations, renewals and extensions of any of the foregoing; and utility
      models and utility model applications.

     

    “Pension
      Plan”
has
      the
      meaning set forth in Section 3.28(a).

     

    “Permits”
has
      the
      meaning set forth in Section 3.23(a).

     

    “Person”
means
      any individual, person, Entity, or Governmental Authority, and the heirs,
      executors, administrators, legal representatives, successors and assigns of
      the
“Person” when the context so permits.

     

    “Personal
      Property”
has
      the
      meaning set forth in Section 3.15(a).

     

    “Personnel”
has
      the
      meaning set forth in Section 3.26(a).

     

    “Phantom
      Membership Interest Plan”
has
      the
      meaning set forth in Section 3.26(b).

     

    “Phantom
      Membership Interest Release”
has
      the
      meaning set forth in Section 3.26(b).

     

    “Plan”
has
      the
      meaning set forth in Section 3.28(a).

     

    “Post-Closing
      Tax Period”
has
      the
      meaning set forth in Section 5.11(c)(ii)(A).

     

    “Pre-Closing
      Tax Period”
has
      the
      meaning set forth in Section 5.11(c)(i).

     

    “Prior
      Period Returns”
has
      the
      meaning set forth in Section 5.11(b).

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    

     

    “Proposals”
has
      the
      meaning set forth in Section 3.17(c).

     

    “Proposed
      Closing Balance Sheet”
has
      the
      meaning set forth in Section 2.4(d).

     

    “Proposed
      Transaction”
has
      the
      meaning set forth in Section 5.9(b).

     

    “Proxy
      Materials”
has
      the
      meaning set forth in Section 5.17.

     

    “Public
      Disclosure Documents”
has
      the
      meaning set forth in Section 4.7(a).

     

    “Purchase
      Consideration”
has
      the
      meaning set forth in Section 2.2.

     

    “Real
      Property Interests”
has
      the
      meaning set forth in Section 3.14.

     

    “Registration
      Rights Agreement”
has
      the
      meaning set forth in Section 2.2(b)(vi).

     

    “Related
      Party Termination Agreements”
has
      the
      meaning set forth in Section 6.3(q).

     

    “Related
      Party Transactions”
and
      “Related
      Party Transaction”
have
      the meanings set forth in Section 3.6.

     

    “Respondent”
has
      the
      meaning set forth in Section 11.11(a).

     

    “Representative”
has
      the
      meaning set forth in Section 5.9(a).

     

    “Rosato”
refers
      to Thomas P. Rosato.

     

    “SBIR”
has
      the
      meaning set forth in Section 3.18(g).

     

    “Schedule”
as
      used
      in this Agreement together with a numerical designation, means a schedule
      contained in the Disclosure Schedules of even date herewith delivered
      by the
      Companies and/or
      the Members in connection with the execution and delivery of this Agreement
      (the
“Disclosure
      Schedules”).

     

    “Scheduled
      Contracts”
has
      the
      meaning set forth in Section 3.17(a).

     

    “SEC”
means
      the United States Securities and Exchange Commission.

     

    “Securities
      Act”
means
      the Securities Act of 1933, as amended, and the rules promulgated
      thereunder.

     

    “Self
      Insured Plan”
and
      “Self
      Insured Plans”
have
      the meaning set forth in Section 3.28(m).

     

    “Senior
      Executives”
has
      the
      meaning set forth in Section 5.10(a).

     

    “Senior
      Executive Employment Agreements”
has
      the
      meaning set forth in Section 5.10(b).

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    

     

    “Signia
      Threatened Litigation”
has
      the
      meaning set forth in Section 5.20.

     

    “Software”
means
      the manifestation, in tangible or physical form, including, but not limited
      to,
      in magnetic media, firmware, and documentation, of computer programs and
      databases, such computer programs and databases to include, but not limited
      to,
      management information systems, and personal computer programs. The tangible
      manifestation of such programs may be in the form of, among other things, source
      code, flow diagrams, listings, object code, and microcode. Software does not
      include any Technology.

     

    “State
      Government”
has
      the
      meaning set forth in Section 3.18(a).

     

    “Stock
      Consideration”
has
      the
      meaning set forth in Section 2.2(d).

     

    “Stock
      Consideration Amount”
has
      the
      meaning set forth in Section 2.2(d).

     

    “Stock
      Grant Documents”
has
      the
      meaning set forth in Section 2.2(g).

     

    “Stock
      Grant Shares”
has
      the
      meaning set forth in Section 2.2(g).

     

    “Stock
      Grant Shares Value”
has
      the
      meaning set forth in Section 2.2(d).

     

    “Straddle
      Period”
and
      “Straddle
      Periods”
have
      the meanings set forth in Section 5.11(c)(i).

     

    “Subcontract”
has
      the
      meaning set forth in Section 3.18(a)(iv).

     

    “Subsidiary”
means
      and refers to any corporation, association or other business entity of which
      more than fifty (50) percent of the issued and outstanding shares of capital
      stock or equity interests is owned or controlled, directly or indirectly, by
      either of the Companies, or FAAC, as the case may be, and in which either of
      the
      Companies or FAAC, as the case may be, has the power, directly or indirectly,
      to
      elect a majority of the directors.

     

    “Survival
      Date”
has
      the
      meaning set forth in Section 9.1.

     

    “Surviving
      Representations”
has
      the
      meaning set forth in Section 9.1.

     

    “Tax”
or
      “Taxes
      has the
      meaning set forth in Section 3.29(d).

     

    “Tax
      Return”
and
      “Tax
      Returns”
has
      the
      meaning set forth in Section 3.29(d).

     

    “Taxing
      Authority”
means
      any government or any subdivision, agency, commission or authority thereof,
      or
      any quasi-governmental or private body having jurisdiction over the assessment,
      determination, collection or other imposition of Taxes.

     

    “Teaming
      Agreement”
has
      the
      meaning set forth in Section 3.18(a).

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    

     

    “Technology”
means
      all types of technical information and data, whether or not reduced to tangible
      or physical form, including, but not limited to: know-how; product definitions
      and designs; research and development, engineering, manufacturing, process,
      test, quality control, procurement, and service specifications, procedures,
      standards, and reports; blueprints; drawings; materials specifications,
      procedures, standards, and lists; catalogs; technical information and data
      relating to marketing and sales activity; and formulae. Technology does not
      include any Software.

     

    “Terminated
      at Closing Related Party Transactions”
has
      the
      meaning set forth in Section 3.6.

     

    “Third-Party
      Claims”
means
      a
      claim made by an Indemnified Party against an Indemnifying Party in connection
      with any third party litigation, arbitration, action, suit, proceeding, claim
      or
      demand made upon the Indemnified Party for which the Indemnified Party may
      seek
      indemnification from the Indemnifying Party under the terms of this Agreement.
      

     

    “Threshold
      Share Price Range”
has
      the
      meaning set forth in Section 2.2(e).

     

    “Trademarks”
means
      all United States and foreign trademark and service mark registrations and
      applications therefor.

     

    “Trade
      Secrets”
means
      information in any form that is considered to be proprietary information by
      the
      owner, is maintained on a confidential or secret basis by the owner, and is
      not
      generally known to other parties.

     

    “Transaction
      Documents”
has
      the
      meaning set forth in Section 3.2.

     

    “Uncapped
      Non-Threshold Indemnifications”
has
      the
      meaning set forth in Section 9.2(f).

     

    “Updated
      Disclosure Schedules”
has
      the
      meaning set forth in Section 5.19.

     

    “U.S.
      Government”
has
      the
      meaning set forth in Section 3.17(a).

     

    “VEBA”
has
      the
      meaning set forth in Section 3.28(d).

     

    “Vortech”
refers
      to Vortech, LLC, a Maryland limited liability company.

     

    “VTC”
refers
      to VTC, L.L.C., a Maryland limited liability company.

     

    “VTC
      Lease Appraisal”
has
      the
      meaning set forth in Section 5.18.

     

    “VTC
      Lease Commitment”
has
      the
      meaning set forth in Section 5.18.

     

    “Welfare
      Plan”
has
      the
      meaning set forth in Section 3.28(a).

     

    1.2 Rules
      of Construction.

     

    Unless
      the context otherwise requires:

     

    (a) A
      capitalized term has the meaning assigned to it;

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    

     

    (b) An
      accounting term not otherwise defined has the meaning assigned to it in
      accordance with GAAP;

     

    (c) References
      in the singular or to “him,” “her,” “it,” “itself,” or other like references,
      and references in the plural or the feminine or masculine reference, as the
      case
      may be, shall also, when the context so requires, be deemed to include the
      plural or singular, or the masculine or feminine reference, as the case may
      be;

     

    (d) References
      to Articles, Sections and Exhibits shall refer to articles, sections and
      exhibits of this Agreement, unless otherwise specified;

     

    (e) The
      headings in this Agreement are for convenience and identification only and
      are
      not intended to describe, interpret, define or limit the scope, extent, or
      intent of this Agreement or any provision thereof;

     

    (f) This
      Agreement shall be construed without regard to any presumption or other rule
      requiring construction against the party that drafted and caused this Agreement
      to be drafted;

     

    (g) References
      to “best efforts” in this Agreement shall require commercially reasonable best
      efforts, and not commercially unreasonable expenditures of money, time or other
      resources;
      and

     

    (h) A
      monetary figure given in United States dollars shall be deemed to refer to
      the
      equivalent amount of foreign currency when used in a context that refers to
      or
      includes operations conducted principally outside of the United
      States.

     

    ARTICLE
      II

    Closing;
      Purchase Price; Adjustments; Escrow         

     

    2.1 Closing.

     

    The
      closing (the “Closing”)
      of the
      Contemplated Transactions shall take place at the offices of Squire, Sanders
      & Dempsey L.L.P., 8000 Towers Crescent Drive, Tysons Corner, Virginia
      22182-2700, at 10:00 A.M. local time on the third (3rd)
      Business Day after the conditions and deliveries referred to in ARTICLES VI,
      VII
      and VIII have been satisfied, or at such other time, date and place that shall
      be mutually agreed upon by the parties hereto (the “Closing
      Date”).
      At
      the Closing, each of the Members shall sell, transfer, convey or assign and
      deliver to FAAC, and FAAC shall purchase, acquire and accept from the Members,
      the Membership Interests, free and clear of any and all Liens or rights of
      any
      third party (and each of the Members shall thereafter cease to have any rights
      or interests as a member of either of the Companies other than any rights
      granted to the Members pursuant to the terms of this Agreement and the other
      Transaction Documents) and FAAC shall (a) deliver to the Members’
Representative on behalf of the Members the Closing Purchase Consideration
      pursuant to Section 2.2 and (b) grant to certain of the Companies’
employees the Employee Stock Grants pursuant to Section 2.2 below.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    

     

    2.2 Purchase
      Consideration; Employee Payments and Stock Grants.

     

    As
      payment in full for all of the Membership Interests, FAAC shall pay to the
      Members’ Representative at Closing the “Closing
      Purchase Consideration”
that
      shall consist of (a) the “Cash Consideration”; (b) the “Convertible Promissory
      Note”; (c) the “Assumed Debt”; and (d) the “Stock Consideration.” Subsequent to
      the Closing the Members may be entitled to receive additional “Earn Out
      Consideration.” The Closing Purchase Consideration together with any Earn Out
      Consideration is hereinafter jointly referred to as the “Purchase
      Consideration.”
Rosato
      and Gallagher hereby agree that it is their intention that notwithstanding
      that
      each of them owns fifty percent (50%) of the Membership Interests the wish
      to
      allocate the Purchase Consideration such that the Purchase Consideration is
      allocated as follows.

    

    
      	 	
              Cash*

            	
              Stock**

            
	 	
              General
                Indemnity Escrow

            	
              Balance
                Sheet

            	
              Lock
                Up

            	
              ***Earn
                Out

            
	
              Rosato

            	
              $
                4,400,000

            	
              1,274,725

            	
              43,956

            	
              140,219

            	
              418,220

            
	
              Gallagher

            	
              $
                6,600,000

            	
              849,817

            	
              29,304

            	
              222,723

            	
              418,220

            
	 	
              $11,000,000

            	
              2,124,542

            	
              73,260

            	
              362,942

            	
              836,440

            

    

    

    * Subject
      to adjustment pursuant to Section 2.4.

    ** Subject
      to adjustment for Assumed Debt.

    *** Maximum
      number of share subject to Earn Out.

    

    (a) Cash
      Consideration.
      At the
      Closing cash in the amount of the Cash Consideration shall be paid by wire
      transfer of immediately available funds to an account or accounts designated
      by
      the Members’ Representative. The Members’ Representative shall be responsible
      for directing the distribution of the Cash Consideration to the Members (60%
      to
      Gallagher and 40% to Rosato) and FAAC shall be entitled to fully rely on such
      directions.

     

    (b) Convertible
      Promissory Note.
      Ten
      Million Dollars ($10,000,000) of the Closing Purchase Consideration shall be
      evidenced by and payable under the terms of two (2) Convertible Notes, each
      in the amount of Five Million Dollars ($5,000,000) one payable to Rosato and
      the
      other to Gallagher in the form attached hereto as Exhibit B
      (each a
“Convertible
      Promissory Note”
and
      collectively the “Convertible Promissory Notes”).

     

    (c) Assumed
      Debt.
      Up to
      One Hundred Sixty One Thousand Dollars ($161,000) of the Closing Purchase
      Consideration may be paid and evidenced by long term debt of the Companies
      that
      (i) is assumable by FAAC and (ii) FAAC agrees, in writing, to assume on or
      before the Closing Date (the “Assumed
      Debt”).

     

    (d) Stock
      Consideration.
      Subject
      to Sections 2.3 and 5.8 a portion of the Closing Purchase Consideration equal
      to
      Seventeen Million Five Hundred Thousand Dollars ($17,500,000) and which the
      parties hereto agree less
      (1) the
      amount of the Assumed Debt and (2) the value (the “Stock
      Grant Shares Value”)
      of
      Stock Grant Shares, as determined pursuant to Section 2.2(d)(i) below (the
      “Stock
      Consideration Amount”)
      shall
      be paid in the form of FAAC’s common stock (“Stock
      Consideration”).
      

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    

     

    (i) Stock
      Grant Shares Value.
      The
      Stock Grant Shares Value shall be determined by multiplying the number of Stock
      Grant Shares (576,559 shares) by the Average Share Value.

     

    (ii) FAAC
      Shares Constituting Stock Consideration.
      The
      number of FAAC shares of common stock to be issued as Stock Consideration shall
      be determined on the Closing Date by dividing the Stock Consideration Amount
      by
      the Average Share Value.

     

    (iii) Delivery
      of Stock Certificates.
      At the
      Closing stock certificates evidencing the Stock Consideration shall be delivered
      by FAAC as follows: (A) pursuant to Section 2.3 stock certificates for
      (1) the Balance Sheet Escrow Shares and (2) the General Indemnity Escrow Shares
      shall be delivered to the Escrow Agent; (B) pursuant to
      Section 2.2(d)(v) below, all remaining shares of
      FAAC
      common stock otherwise deliverable to the Members’ Representative on behalf of
      Rosato and
      Gallagher shall be delivered by FAAC to the escrow agent under the Lock Up
      Escrow Agreements signed by Rosato and Gallagher respectively; and
      (C) pursuant to Section 5.8(c) below, 33,913 shares of FAAC common stock
      otherwise deliverable to Rosato and 33,912 shares of FAAC common stock otherwise
      deliverable to Gallagher shall be delivered by FAAC, on Rosato’s and Gallagher’s
      behalf, to Evergreen (or other recipients identified by Evergreen).

     

    (iv) Acquisition
      Agreement; Registration Rights Agreement and Lock Up Agreement.
      At the
      Closing, each Member and FAAC will execute and deliver (A) an Acquisition
      Agreement in the form attached hereto as Exhibit C
      (the
“Acquisition
      Agreement”);
      (B) a Registration Rights Agreement in the form attached hereto as
Exhibit D
      (the
“Registration
      Rights Agreement”);
      (C) a
      Lock Up Agreement in the form attached hereto as Exhibit
      E
      (the
“Lock
      Up Agreement”)
      under
      the terms of which all of the Stock Consideration is subject to various
      restrictions described therein until the Lock Up Termination Date) and (D)
      a
      Lock Up Escrow Agreement in the form attached hereto as Exhibit
      F
      (the
“Lock
      Up Escrow Agreement”).

     

    (v) Members’
      Forfeiture of Stock Consideration.
      Notwithstanding anything to the contrary contained in this Section 2.2(d) and
      as
      described in further detail in the Acquisitions Agreements and Lock Up
      Agreements, signed by each of Rosato and Gallagher; if during the period the
      Stock Consideration is subject to the Lock Up Agreement (the Closing Date
      through the Lock Up Termination Date, the “Lock
      Up Period”),
      a
      Member’s employment under his Senior Executive Employment Agreement is
      terminated pursuant to Section 5.1 thereof, then that Member shall forfeit
      as of
      the “Termination Date” (as defined in the applicable Senior Executive Employment
      Agreement) his share of the Stock Consideration deliverable to him under the
      Lock Up Escrow Agreement (500,000 shares of FAAC stock in the case of each
      of
      Rosato and Gallagher) shall be immediately deliverable to FAAC by the escrow
      agent under and pursuant to the terms of the Lock Up Escrow Agreement and
      General Indemnity Escrow Agreement together (all of the shares of FAAC common
      stock held under the Lock Up Escrow Agreement and 637,058 of the shares of
      FAAC
      common stock held in the General Indemnity Escrow (359,781 shares allocable
      to
      Rosato and 277,277 shares allocable to Gallgher)). Each of the Members hereby
      agrees to cooperate fully and execute any documents as FAAC may request to
      cause
      any Stock Consideration forfeited under this Section 2.2(d)(iv) to be delivered
      and returned to FAAC.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    

     

    (e) Earn
      Out Consideration.
      Subject
      to Section 2.2(e)(iv) below, at the end of the Lock Up Period the Members shall
      be entitled to receive up to Ten Million Dollars ($10,000,000.00) worth of
      additional FAAC common stock (the “Earn
      Out Consideration”)
      depending on whether during the Lock Up Period the highest average closing
      price
      of FAAC’s common stock (on the Nasdaq OTC market or such other recognized stock
      market on which FAAC’s stock is then being traded on) for sixty (60) consecutive
      trading days (the “Highest
      Average Trading Price”)
      exceeds the applicable “Earn
      Out Closing Price Thresholds”
set
      forth below.

     

    (i) For
      purposes of this Agreement (A) the “Earn
      Out Closing Price Thresholds”
are
      as
      follows (each of which is individually referred to as “Earn
      Out Closing Price Threshold”);
      (B)
      the “Earn
      Out Threshold Share Value”
for
      each Earn Out Closing Price Threshold shall be the dollar amount ($1,000,000,
      $2,000,000, $3,000,000 or $4,000,000 as the case may be) for that Earn Out
      Closing Price Threshold as set forth below; (C) the “Minimum
      Threshold Share Price”
with
      respect to each Earn Out Closing Price Threshold is the maximum price per share
      that is within that Earn Out Closing Price Threshold ($9.01, $10.01, $12.01,
      or
      $14.01 as the case may be); and (D) the “Threshold
      Share Price Range”
for
      each Earn Out Closing Price Threshold shall be the price per share range
      referenced therein ($9.01 - $10.00, $10.01 - $12.00, $12.01 - $14.00 and $14.01,
      as the case may be).

     

    (A) If
      during
      the Lock Up Period the Highest Average Trading Price never exceeds Nine Dollars
      ($9.00) per share, then no FAAC common stock shall be issuable to the Members
      at
      the end of the Lock Up Period.

     

    (B) If
      during
      the Lock Up Period the Highest Average Trading Price is in excess of Nine
      Dollars ($9.00), then the Members shall be entitled to receive One Million
      Dollars ($1,000,000.00) of FAAC common stock.

     

    (C) If
      during
      the Lock Up Period the Highest Average Trading Price is in excess of Ten Dollars
      ($10.00), then the Members shall be entitled to receive, in addition to the
      FAAC
      common stock referenced in Section 2.2(e)(i)(B) above, an additional Two Million
      Dollars ($2,000,000.00) of FAAC common stock.

     

    (D) 
      If
      during the Lock Up Period the Highest Average Trading Price is in excess of
      Twelve Dollars ($12.00), then the Members shall be entitled to receive, in
      addition to the FAAC common stock referenced in Sections 2.2(e)(i)(B) and (C)
      above, an additional Three Million Dollars ($3,000,000.00) of FAAC common stock.
      

     

    (E) If
      during
      the Lock Up Period the Highest Average Trading Price is in excess of Fourteen
      Dollars ($14.00) per share, then the Members shall be entitled to receive ,
      in
      addition to the FAAC common stock referenced in Sections 2.2(e)(i)(B) - (D)
      above, an additional Four Million Dollars ($4,000,000.00) of FAAC common stock
      (based on the Highest Average Trading Price).

     

    (ii) FAAC
      Shares Constituting Earn Out Consideration.
      The
      number of FAAC shares of common stock to be issued as Earn Out Consideration
      shall be determined at the end of the Lock Up Period as follows:

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    

     

    (A) determining
      the Highest Average Trading Price during the Lock Up Period; 

     

    (B) determining
      which Earn Out Closing Price Thresholds are applicable (the applicable Earn
      Out
      Price Thresholds being (y) the Earn Out Closing Price Thresholds for which
      the
      Highest Average Trading Price falls within the applicable Threshold Share Price
      Range (the “Maximum
      Earn Out Closing Price Threshold”)
      and
      (z) all other Earn Out Price Thresholds for which the Highest Average Trading
      Price exceeds the applicable Threshold Share Price Range (collectively with
      the
      Maximum Earn Out Closing Price Threshold referred to as the “Effected
      Earn Out Closing Price Thresholds”));
      and

     

    (C) dividing
      the applicable Earn Out Threshold Share Value for each of the Effected Earn
      Out
      Closing Price Thresholds by the applicable Minimum Threshold Share Price for
      each of the Effected Earn Out Closing Price Thresholds (other than the Maximum
      Earn Out Closing Price Threshold for which the Earn Out Share Value shall be
      divided by the Highest Average Trading Price).

     

    FOR
      EXAMPLE

     

    If
      at the
      end of the Lock Up Period the Highest Average Trading Price was $14.50; then
      (A)
      the Effected Earn Out Closing Price Thresholds consists of all of the Earn
      Out
      Closing Price Thresholds; and (B) the division of (y) the Earn Out Threshold
      Share Value for each of the Effected Earn Out Closing Price Thresholds by the
      Minimum Threshold Share Price for each of the Effected Earn Out Closing Price
      Thresholds other than the Maximum Earn Out Closing Price Threshold and (z)
      the
      Earn Out Share Value for the Maximum Earn Out Closing Price Threshold by the
      Highest Average Trading Price results in the following:

     

    $1,000,000
      ∕ $9.01 per share = 110,987
      shares

     

    $2,000,000
      ∕ $10.01 per share = 199,800
      shares

     

    $3,000,000
      ∕ $12.01 per share = 249,791
      shares

     

    $4,000,000
      ∕ $14.50 per share = 275,862
      shares

     

    Total
      Earn Out Consideration  836,440
      shares

     

    The
      determination of the Highest Average Trading Price and the calculation of the
      number of shares of FAAC stock that are issuable to the Members as Earn Out
      Consideration shall be made as follows. Not later than twenty (20) Business
      Days
      after the Lock Up Period, the Company’s senior financial executive shall provide
      the Members’ Representative with a statement (the “Earn
      Out Statement”)
      setting forth the calculation of the Earn Out Consideration that shall include
      the calculations used to determine the Earn Out Consideration. The Members’
Representative shall have fifteen (15) days following delivery of the Earn
      Out
      Statement (the “Earn
      Out Notice Period”)
      to
      disagree with Earn Out Statement by written notice to the Company setting forth
      in reasonable detail the amount and nature of the disagreement (each an
“Earn
      Out Dispute Notice”).
      If
      the Company does not receive an Earn Out Dispute Notice from the Members’
Representative within the Earn Out Notice Period, the Members’ Representative
      shall be conclusively presumed to agree with the Earn Out Statement and the
      Company shall promptly issue the Earn Out Consideration shown to be due on
      the
      Earn Out Statement to the Members’ Representative pursuant to Section
      2.2(e)(iii) below. If the Company receives an Earn Out Dispute Notice from
      the
      Members’ Representative within the Earn Out Notice Period then the dispute shall
      be resolved pursuant to Section 11.11 below.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    

     

    (iii) Delivery
      of Earn Out Consideration.
      FAAC
      shall deliver, or shall cause to be delivered to the Members’ Representative
      stock certificates for any Earn Out Consideration issuable to the Members
      pursuant to this Section 2.2(e) (to be distributed by the Members’
Representative pro rata to the Members in proportion to the Members’ Membership
      Interests).

     

    (iv) Forfeiture
      of Earn Out Consideration.
      Notwithstanding anything to the contrary contained in this Section 2.2(e),
      if
      during the Lock Up Period a Members’ employment under his Senior Executive
      Employment Agreement is terminated pursuant to Section 5.1 thereof, then that
      Member shall forfeit his share of the Earn Out Consideration and the Earn Out
      Consideration otherwise issuable by the Company shall be reduced proportionately
      to reflect the forfeiture of the Earn Out Consideration allocable to the
      terminated Member.

     

    (f) Fractional
      and Restricted Shares.

     

    (i)  Fractional
      Shares.
      If the
      calculation of the number of shares of FAAC common stock to be received as
      Stock
      Consideration pursuant to Section 2.2(d)(ii), or Earn Out Consideration pursuant
      to Section 2.2(e)(ii) would result in the issuance of fractional shares, then
      the number of shares of FAAC common stock that the Members would otherwise
      receive as Stock Consideration, or Earn Out Consideration shall be rounded
      down
      to the nearest whole number of shares (which shall be the Stock Consideration
      or
      Earn Out Consideration payable to the Member(s) and the Member(s) shall receive
      as cash the amount attributable to the fractional interest.

     

    (ii) Restricted
      Shares.
      The
      shares of FAAC’s common stock to be issued pursuant to this Agreement as Stock
      Consideration and Earn Out Consideration (A) have not been, and will not be
      at
      the time of issuance, registered under the Securities Act, and will be issued
      in
      a transaction that is exempt from the registration requirements of the
      Securities Act and (B) will be “restricted securities” under the federal
      securities laws and cannot be offered or resold except pursuant to registration
      under the Securities Act or an available exemption from registration. All
      certificates evidencing the Stock Consideration and Earn Out Consideration
      shall
      bear, in addition to any other legends required under applicable securities
      laws, the following legend: 

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    

     

    “THE
      SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE
      TRANSFERRED EXCEPT PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT OR PURSUANT
      TO AN AVAILABLE EXEMPTION FROM REGISTRATION.” 

     

    (g) Employees
      Stock Grants.
      As
      consideration for executing their respective Key Employment Agreements FAAC
      agrees to grant to certain employees to be designated by Rosato and approved
      in
      writing by FAAC (the “Participating
      Employees”)
      restricted stock grants for 576,559 FAAC Common Shares (collectively the
“Stock
      Grant Shares”)
      in
      such amounts as determined by Rosato and approved in writing by FAAC
      (collectively the “Employee
      Stock Grants”
and
      each an “Employee
      Stock Grant”).
      The
      Employee Stock Grants shall be made pursuant to a Stock Grant Plan and Stock
      Grant Agreement substantially in the form attached hereto as Exhibits G
      and H
      respectively (collectively the “Stock
      Grant Documents”)
      and
      under the terms of which the Stock Grant Shares granted thereunder are subject
      to forfeiture to FAAC for various reasons prior to the Lock Up Termination
      Date.
      If any Stock Grant Shares issued to Employee Participants under the Employee
      Stock Grants are forfeited to FAAC on or before the third (3rd)
      anniversary of the Closing Date (collectively the “Forfeited
      Shares”);
      FAAC
      shall cause shares of FAAC stock equal in number to the Forfeited Shares to
      be
      issued equally to Rosato and Gallagher within thirty (30) days after the
      effective date of the forfeiture as additional consideration for their
      respective Membership Interests. In connection with the issuance to Rosato
      or
      Gallagher prior to the end of the Lock Up Period, of any FAAC common shares
      pursuant to the previous sentence, Rosato and Gallagher will be required to
      execute and deliver a Lock Up Agreement for such shares.

     

    2.3 Escrows.
      At the
      Closing, FAAC shall deposit with the Escrow Agent the following (collectively
      the “Escrow
      Deposits”):
      (1)
      73,260 shares of FAAC common stock having an approximate value (as determined
      by
      the Average Share Value) equal to Four Hundred Thousand Dollars ($400,000
      (collectively the “Balance
      Sheet Escrow Shares”))
      to be
      held by the Escrow Agent in an escrow account (the “Balance
      Sheet Escrow Account”)
      pursuant to the terms of an escrow agreement substantially in the form of
Exhibit
      I-1
      (the
“Balance
      Sheet Escrow Agreement”);
      and
      (2) 2,124,542 shares of FAAC stock having an approximate value (as
      determined by the Average Share Value) equal to [Eleven Million Six Hundred
      Thousand Dollars ($11,600,000] collectively the “General
      Indemnity Escrow Shares”)) to
      be
      held by the Escrow Agent in an escrow account (the “General
      Indemnity Escrow Account”)
      pursuant to the terms of an escrow agreement substantially in the form of
Exhibit
      I-2
      (the
“General
      Indemnity Escrow Agreement”
and
      together with the Balance Sheet Escrow Agreement the “Escrow
      Agreements”).
      The
      escrow accounts set up by the Escrow Agent with respect to each of the Escrow
      Agreements are hereinafter individually referred to as an “Escrow
      Account”
and
      collectively as the “Escrow
      Accounts.”
The
      aggregate amount held in the Escrow Accounts by the Escrow Agent at any time
      and
      from time to time, together with any interest or appreciation thereon, shall
      be
      referred to as the “Escrowed
      Property”
with
      that portion of the Escrowed Funds held from time to time in the Balance Sheet
      Escrow Account being hereinafter sometimes referred to as the “Balance
      Sheet Escrow Property”
and
      that portion of the Escrowed Property held from time to time in the General
      Indemnity Escrow Account being hereinafter sometimes referred to as the
“General
      Indemnity Escrow Property;”
      

     

    
      
        
        

      

      
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    (A) The
      Balance Sheet Escrow Property shall be released and delivered to FAAC or the
      Members’ Representative, as applicable, pursuant to Section 2.4(e).

     

    (B) The
      General Indemnity Escrow Property shall be released and delivered to FAAC or
      the
      Members’ Representative, as applicable, pursuant to Section 9.3.

     

    2.4 Cash
      Consideration and Net Working Capital Adjustments.

     

    (a) Cash
      Consideration.
      The
“Cash
      Consideration”
shall
      be an amount equal to Eleven Million Dollars ($11,000,000) (the “Estimated
      Closing Cash Purchase Price”)
      as
      adjusted upward or downward pursuant to Sections 2.4(b) and (c)
      below.

     

    (b) Estimated
      Closing Balance Sheet.
      Not
      less than two (2) Business Days prior to the Closing Date, the Members shall
      deliver to FAAC an estimated, unaudited consolidated balance sheet (the
“Estimated
      Closing Balance Sheet”)
      of the
      Companies as of the Closing Date, together with all supporting documentation.
      The Estimated Closing Balance Sheet shall be prepared by Members, in accordance
      with GAAP and in a manner consistent with the December 2005 Balance Sheet except
      that the Estimated Closing Balance Sheet shall include a calculation of the
      “Adjusted Closing Net Working Capital” (hereinafter defined). For purposes of
      this Agreement, the terms “Adjusted Closing Net Working Capital” and “Closing
      Net Working Capital” shall have the following meanings.

     

    (i) The
      term
“Adjusted
      Closing Net Working Capital”
shall
      mean the “Closing Net Working Capital” (as hereinafter defined and as adjusted
      pursuant to Section 2.4(d) below) of the Companies as shown on the Estimated
      Closing Balance Sheet as reduced to reflect: (A) the payment in full of any
      and
      all outstanding Indebtedness of the Companies (other than the Assumed Debt),
      repaid at or prior to Closing pursuant to Section 5.7; (B) the payment in full
      of any and all Members’ Transaction Costs paid, or repaid by FAAC after the
      Closing Date or incurred by the Companies and unreimbursed by the Members at
      or
      prior to the Closing pursuant to Section 5.7; (C) the payment of all sums
      due at Closing with respect to the Phantom Membership Interest Plan; (D) any
      portion of the Bonus Pool for which adequate reserves are not otherwise
      maintained; or (E) payments made to employees in connection with the
      Contemplated Transactions (other than normal compensation or payments with
      respect to the Phantom Membership Interest Plan).

     

    (ii) The
      term
“Closing
      Net Working Capital”
shall
      mean the amount as of the Closing Date and as shown by the Closing Balance
      Sheet
      by which the Companies’ current assets (including without limitation unbilled
      receivables, security deposits and prepaid expenses and excluding all assets
      which, in the normal course of business, will not be converted to cash in one
      year and all intangible assets) exceed their current liabilities (excluding
      all
      liabilities, which in the normal course of business, will not be due in one
      year
      or less), as such terms are defined under GAAP consistently
      applied.

     

    (c) Adjustments
      to Estimated Closing Cash Purchase Price.
      The
      Estimated Closing Cash Purchase Price will be adjusted (i) downwards on a
      dollar-for-dollar basis to the extent that the Adjusted Closing Net Working
      Capital, as shown on the Estimated Closing Balance Sheet, is below the Base
      Net
      Working Capital Amount and (ii) upwards on a dollar-for-dollar basis to the
      extent that the Adjusted Closing Net Working Capital is above the Base Net
      Working Capital Amount. 

     

    
      
        
        

      

      
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    (d) Closing
      Balance Sheet and Adjusted Closing Net Working Capital.
      Promptly following the Closing, FAAC will cause Grant Thornton, LLP (or
      an
      equivalent firm selected by FAAC) to
      review
      the Estimated Closing Balance Sheet, including the Adjusted Closing Net Working
      Capital, the Closing Net Working Capital as reflected thereon. Based on such
      review, FAAC will deliver a proposed Closing Balance Sheet, prepared in a manner
      consistent with Section 2.4(b) above together with all related work papers,
      to
      the Members’ Representative within sixty (60) days after the later of (i) the
      Closing Date, or (ii) the date of receipt by FAAC of all information sufficient
      for FAAC to complete its review of all aspects of the Estimated Closing Balance
      Sheet, but in no event more than One Hundred Fifty (150) days after the Closing
      Date (the “Proposed
      Closing Balance Sheet”).
      If
      within thirty (30) days
      following delivery of the Proposed Closing Balance Sheet, the Members’
Representative has not given FAAC notice of his objection to the Proposed
      Closing Balance Sheet (which notice must contain a statement in reasonable
      detail of the basis of any such objection), then such Proposed Closing Balance
      Sheet shall constitute the “Closing
      Balance Sheet,”
and
      the Adjusted Closing Net Working Capital and Closing Net Working Capital amounts
      included therein shall constitute the “Adjusted Closing Net Working Capital” and
“Closing Net Working Capital.” If the Members’ Representative gives notice of an
      objection, the parties shall use their respective best efforts to resolve any
      dispute by negotiation. If such dispute cannot be settled by negotiation within
      thirty (30) days
      after receipt by FAAC of the Members’ Representative’s notice, the dispute shall
      be resolved in accordance with the Financial Issue Resolution Process set forth
      in Section 2.5.

     

    (e) Final
      Adjustment to the Estimated Closing Cash Purchase Price.
      If the
      Adjusted Closing Net Working Capital is such that Sections 2.4(d) and/or 2.5
      do
      not require an adjustment to the Estimated Closing Cash Purchase Price, then
      the
      Escrow Agent shall disburse to the Members’ Representative the Balance Sheet
      Escrow within five (5) days after the finalization of the Closing Balance Sheet
      pursuant to Sections 2.4(d) and/or 2.5. If the Adjusted Closing Net Working
      Capital is such that Sections 2.4(d) or 2.5 require an adjustment to the
      Estimated Closing Cash Purchase Price, any amount due to the Members by FAAC
      in
      excess of the Balance Sheet Escrow shall be paid by FAAC to the Members’
Representative, and any amount due to FAAC from the Members shall be satisfied
      from the Balance Sheet Escrow Property with the FAAC common stock then in the
      Balance Sheet Escrow valued at the Average Share Value. If the amount due FAAC
      is in excess of the Balance Sheet Escrow Property, then such excess shall be
      paid to FAAC by the Members within five (5) days after the finalization of
      the
      Closing Balance Sheet pursuant to Sections 2.4(d) and/or 2.5. In the event
      that
      the Members for any reason fails to make the payment contemplated in the
      previous sentence, then FAAC may bring an indemnification claim under ARTICLE
      IX
      and the Members shall be jointly and severally liable for that payment. Any
      earnings on the Balance Sheet Escrow Property, net of escrow expenses and taxes,
      shall be paid, pro rata, to the parties receiving distributions from the Balance
      Sheet Escrow Account. All sums payable by the Escrow Agent to the Members’
Representative under this Section 2.4(e) shall be paid by the Escrow Agent
      to an
      account or accounts designated by the Members’ Representative. The Members’
Representative shall be responsible for directing the distribution of the
      Balance Sheet Escrow (60% to Gallagher and 40% to Rosato) and the Escrow Agent
      shall be entitled to fully rely on such directions.

     

    
      
        
        

      

      
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    2.5 Financial
      Issue Resolution Process.

     

    Disputes
      between FAAC and the Members’ Representative, that cannot be resolved by
      negotiation within thirty (30) days after receipt by FAAC of the Members’
Representative’s notice in accordance with Section 2.4(d) shall be referred no
      later than such 30th day for decision to a nationally recognized independent
      public accounting firm mutually selected by the Members’ Representative and FAAC
      (the “Auditor”)
      who
      shall act as arbitrator and determine, based solely on presentations by the
      Members’ Representative and FAAC and only with respect to the remaining
      differences so submitted. If such accounting firm cannot be identified within
      ten (10) business days after the identification of the need for dispute
      resolution, the dispute shall be resolved in accordance with Section 11.11.
      The
      Auditor shall deliver its written determination to FAAC and the Members’
Representative no later than the 30th day after the remaining differences
      underlying the dispute are referred to the Auditor, or such longer period of
      time as the Auditor determines is necessary. The Auditor’s determination shall
      be conclusive and binding upon the parties. The fees and disbursements of the
      Auditor shall be allocated equally between FAAC and the Members’ Representative.
      FAAC and the Members shall make readily available to the Auditor all relevant
      information, books and records and any work papers relating to the dispute
      and
      all other items reasonably requested by the Auditor. In no event may the
      Auditor’s resolution of any difference be for an amount that is outside the
      range of FAAC’s and the Members’ Representative’s disagreement.

     

    2.6 Members’
      Representative.

     

    (a) Thomas
      P.
      Rosato is hereby appointed as the Members’ true and lawful representative,
      proxy, agent and attorney-in-fact (the “Members’
      Representative”)
      for a
      term that shall be continuing and indefinite and without a termination date
      except as otherwise provided herein, to act for and on behalf of the Members
      in
      connection with or relating to the Transaction Documents and the Contemplated
      Transactions, including, without limitation, to give and receive notices and
      communications, to receive and accept service of legal process in connection
      with any proceeding arising under the Transaction Documents or in connection
      with the Contemplated Transactions, receive and deliver amounts comprising
      the
      Purchase Consideration, to authorize delivery of stock from each of the Escrow
      Accounts, to object to or accept any claims against or on behalf of the Members
      pursuant to ARTICLE IX, to agree to, negotiate, enter into settlements and
      compromises of, and demand arbitration and comply with orders of courts and
      awards of arbitrators with respect to such amounts or claims, and to take all
      actions necessary or appropriate in the sole opinion of the Members’
Representative for the accomplishment of the foregoing. Such agency may be
      changed at any time and from time to time by the action of Members holding
      more
      than fifty percent (50%) of the issued and outstanding Membership Interests
      just
      prior to the Closing, and shall become effective upon not less than thirty
      (30)
      days prior written notice to FAAC. Any change in the Members’ Representative
      shall become effective only upon delivery of written notice of such change
      to
      FAAC. The Members’ Representative shall not receive compensation for his or her
      services. Notices, deliveries or communications to or from the Members’
Representative by or to any of the parties to the Transaction Documents shall
      constitute notices, deliveries or communications to or from the
      Members.

     

    
      
        
        

      

      
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    (b) The
      Members’ Representative shall not be liable for any act done or omitted
      hereunder in his capacity as Members’ Representative in the absence of gross
      negligence or willful misconduct on his or her part. The Members shall jointly
      and severally indemnify the Members’ Representative and hold the Members’
Representative harmless from and against any and all damages, actions,
      proceedings, demands, liabilities, losses, taxes,
      fines,
      penalties, costs, claims and expenses (including, without limitation, reasonable
      fees of counsel) of any kind or nature whatsoever (whether or not arising out
      of
      third-party claims and including all amounts paid in investigation, defense
      or
      settlement of the foregoing) (“Damages”)
      that
      may be sustained or suffered by the Members’ Representative in connection with
      the administration of its duties hereunder, except where such Damages arise
      from
      or are the result of the Members’ Representative’s gross negligence or willful
      misconduct.

     

    (c) Any
      decision, act, consent or instruction taken or given by the Members’
Representative pursuant to this Agreement shall be and constitute a decision,
      act, consent or instruction of the Members and shall be final, binding and
      conclusive upon the Members. The Escrow Agent and FAAC may rely upon any such
      decision, act, consent or instruction of the Members’ Representative as being
      the decision, act, consent or instruction of the Members and shall have no
      duty
      to inquire as to the acts and omissions of the Members’ Representative. The
      Escrow Agent and FAAC are hereby relieved from any liability to any Person
      for
      any acts done by them in accordance with such decision, act, consent or
      instruction of the Members’ Representative.

     

    (d) Notices
      given to the Members’ Representative in accordance with Section 11.2 shall
      constitute notice to the Members for all purposes under this
      Agreement.

     

    (e) This
      Section 2.6 shall survive the termination or expiration of the Agreement or
      any
      one or more of the Escrow Agreements.

     

    ARTICLE
      III

    Representations
      and Warranties of the Members and the Companies

     

    Except
      as
      set forth in the Disclosure Schedules, the Members and the Companies jointly
      and
      severally represent and warrant to FAAC that each of the statements contained
      in
      this ARTICLE III is true and correct as of the date of this Agreement and will
      be true and correct as of the Closing Date as though made on the Closing Date:
      

     

    3.1 Organization
      and Power.

     

    (a) Members.
      Each of
      the Members has the full power and authority to execute, deliver and perform
      this Agreement and the other Transaction Documents to which it is a party and
      to
      consummate the Contemplated Transactions.

     

    
      
        
        

      

      
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    (b) Companies.
      Each of
      the Companies (i) is a limited liability company duly organized and validly
      existing and in good standing under the laws of the State of Maryland,
      (ii) has all requisite corporate power and authority to own or lease and to
      operate its properties and carry out the businesses in which it is engaged,
      and
      (iii) is duly qualified or licensed to do business as a foreign corporation
      in good standing in every jurisdiction where its ownership of property, or
      the
      conduct of its business, requires such qualification, other than jurisdictions
      in which the failure to so qualify, individually or in the aggregate, would
      not
      have a material adverse effect on it. Schedule 3.1(b) of the Disclosure
      Schedules lists each of the jurisdictions in which each of the Companies is
      qualified or licensed to do business as a foreign limited liability company.
      Each of the Companies is in good standing in each jurisdiction listed on
      Schedule 3.1(b) of the Disclosure Schedules.

     

    (c) No
      Subsidiaries.
      Neither
      of the Companies has any Subsidiaries. 

     

    3.2 Authorization
      and Enforceability.

     

    (a) This
      Agreement has been, and each of the other documents, agreements and instruments
      to be executed and delivered at Closing (collectively with this Agreement,
      the
“Transaction
      Documents”)
      will
      be,
      duly authorized, executed and delivered by the Members and the Companies and
      constitutes, or in the case of each Transaction Document other than this
      Agreement, as of the Closing Date will constitute, a valid and legally binding
      agreement of the Members and the Companies enforceable in accordance with its
      terms, subject to bankruptcy, insolvency, reorganization and other laws of
      general applicability relating to or affecting creditors’ rights and to general
      equitable principles.

     

    3.3 No
      Violation.

     

    Neither
      the execution, delivery or performance of this Agreement or any of the other
      Transaction Documents by the Companies and the Members, nor the consummation
      of
      the Contemplated Transactions will:

     

    (a) conflict
      with or violate any provision of the certificate or articles of organization
      or
      operating agreement of either of the Companies;

     

    (b) result
      in
      the creation of, or require the creation of, any Lien upon any
      (i) Membership Interests or (ii) property of either of the
      Companies;

     

    (c) result
      in
      (i) the termination, cancellation, modification, amendment, violation, or
      renegotiation of any contract, agreement, indenture, instrument, or commitment,
      or (ii) the acceleration or forfeiture of any term of payment;

     

    (d) give
      any
      Person the right to (i) terminate, cancel, modify, amend, vary, or
      renegotiate any contract, agreement, indenture, instrument, or commitment,
      or
      (ii) to accelerate or forfeit any term of payment
      either
      of which would have a Material Adverse Effect; or

     

    (e) violate
      any Law applicable to the Companies or by which their properties are bound
      or
      affected which would have a Material Adverse Effect.

     

    
      
        
        

      

      
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    3.4 Consents.

     

    Except
      as
      set forth on Schedule 3.4(a) of the Disclosure Schedules, neither the execution,
      delivery or performance of this Agreement by the Companies and the Members,
      nor
      the consummation of the Contemplated Transactions or compliance with the terms
      of the Transaction Documents, will require (a) the consent or approval under
      any
      agreement or instrument or (b) the Members or the Companies to obtain the
      approval or consent of, or make any declaration, filing (other than
      administrative filings with Taxing Authorities, foreign companies registries
      and
      the like) or registration with, any Governmental Authority and all such consents
      or approvals have been obtained or waived.

     

    3.5 Financial
      Statements.

     

    (a) In
      General.
      The
      Audited Financial Statements were prepared in accordance with GAAP and the
      Interim Financial Statements were and the Estimated Closing Balance Sheet will
      be internally prepared by the Companies in a manner consistent with past
      practices for such internally prepared unaudited financial statements.
      Throughout the periods involved, the Financial Statements fairly and accurately
      present the consolidated financial position of the Companies, as of the dates
      thereof, and the consolidated statements of operations, changes in Members’
equity and cash flows for the periods then ended. 

     

    (b) Financial
      Books and Records.
      The
      financial books and records of the Companies have been maintained in accordance
      with sound business practices, including an adequate system of internal control,
      and fairly and accurately reflect, in accordance with applicable Law and GAAP,
      and on a basis consistent with past periods and throughout the periods involved,
      (i) the financial position of the Companies and (ii) all transactions of the
      Companies. Neither of the Companies has received any advice or notification
      from
      their respective independent certified public accountants that they
      have used
      any
      improper accounting practice that would have the effect of not reflecting or
      incorrectly reflecting in the books and records of the
      Companies any properties, assets, liabilities, revenues, or
      expenses.

     

    (c) No
      Undisclosed Liabilities; Etc.
      Except
      as set forth on Schedule 3.5(c) of the Disclosure Schedules,
      neither of
      the
      Companies has
      any
      liabilities or obligations of any nature (whether known or unknown and whether
      absolute, accrued, contingent, or otherwise), except for amounts of liabilities
      or obligations reflected or reserved against in the Financial
      Statements.

     

    (d) Accounts
      Receivable.
      All
      receivables (including intercompany and unbilled receivables) reflected in
      the
      Financial Statements or recorded on the books of each of the Companies resulted
      from the ordinary course of business, have been properly recorded in the
      ordinary course of business and subject to the reserves reflected in the
      Financial Statements, which reserves are adequate and determined in accordance
      with GAAP applied on a basis consistent with prior periods and throughout the
      periods involved, and are good and collectible (subject to the reserves
      reflected in the Financial Statements) in full without any discount, setoff
      or
      valid counterclaim (net of recovery from vendors or subcontractors), in amounts
      equal to not less than the aggregate face amounts thereof.

     

    
      
        
        

      

      
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    (e) No
      Letters of Credit or Guarantees.
      Except
      as reflected in the Financial Statements or as set forth on Schedule 3.5(e)
      of
      the Disclosure Schedules, none of the Companies (i) has any letters of
      credit outstanding as to which the Companies have any actual or contingent
      reimbursement obligations; (ii) is a party to or bound, either absolutely or
      on
      a contingent basis, by any agreement of guarantee, indemnification or any
      similar commitment with respect to the liabilities or obligations of any other
      Person (whether accrued, absolute, or contingent); or (iii) is a party to
      any swap, hedge, derivative, or similar instrument.

     

    (f) Contingent
      or Deferred Acquisition Expenses or Payments.
      Except
      as otherwise disclosed on Schedule 3.5(f) of the Disclosure Schedules, neither
      of the Companies is obligated or otherwise liable for the payment of any
      contingent or deferred acquisition payments relating to the direct or indirect
      acquisition of any business, enterprise, or combination.

     

    3.6 Relationships
      with Affiliates.

     

    Except
      as
      set forth on Schedule 3.6 of the Disclosure Schedules, no Member or any
      Affiliate of any Member or the Companies has, or has had, any interest in any
      property (real, personal, or mixed and whether tangible or intangible), used
      in
      or pertaining to the business of the
      Companies. No Member or any Affiliate of any Member, or the Companies is, or
      has
      owned (of record or as a beneficial owner) an equity interest or any other
      financial or a profit interest in, a Person that has (a) had business
      dealings or a material financial interest in any transaction with the Companies
      or (b) engaged in competition with the Companies with respect to any line
      of the products or services of the
      Companies in
      any
      market presently served by the
      Companies. Except as set forth on Schedule 3.6 of the Disclosure Schedules, no
      Member or any Affiliate of any Member, or Company is a party to any contract
      or
      agreement with any of the Companies.
      The
      various contracts, agreements and relationships shown on Schedule 3.6 of the
      Disclosure Schedules (a) are hereinafter collectively referred to as the
“Related
      Party Transactions”
and
      individually as a “Related
      Party Transaction”
and
      (b)
      as shown on Schedule 3.6 of the Disclosure Schedules are comprised of (i)
      Related Party Transactions that are to be terminated at or before Closing
      (collectively the “Terminated
      at Closing Related Party Transactions”)
      and
      (ii) Related Party Transactions that are to continue after the Closing (the
      “Continuing
      Related Party Transactions”).

     

    3.7 Indebtedness
      to/from Officers, Directors, Members and Employees.

     

    Except
      as
      set forth on Schedule 3.7 of the Disclosure Schedules, neither of the Companies
      is indebted, directly or indirectly, to any Person who immediately prior to
      the
      Closing was a Member, officer or director of a Company in any amount whatsoever,
      other than for salaries for services rendered or reimbursable business expenses.
      No Member, officer, director, or employee is indebted to either of the Companies
      except for advances made to employees of the Companies in the ordinary course
      of
      business to meet reimbursable business expenses anticipated to be incurred
      by
      such obligor.

     

    3.8 No
      Adverse Change.

     

    Since
      December 31, 2005, there has not been any change in the businesses, operations,
      properties or condition, financial or otherwise of the Companies that has had
      a
      Material Adverse Effect, nor has any event, condition or contingency occurred
      that is reasonably likely to result in such an adverse change.

     

    
      
        
        

      

      
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    3.9 Conduct
      of the Business.

     

    (a) Cooperative
      Business Arrangements.
      Except
      as set forth on Schedule 3.9(a) of the Disclosure Schedules none of the business
      of the Companies has been conducted through any joint venture, teaming agreement
      or relationship, partnership or other entity.

     

    (b) Letters
      of Intent, Non-Competition Agreements and Non-Disclosure
      Agreements.
      Except
      as set forth in Schedule 3.9(b) of the Disclosure Schedules, neither of the
      Companies is a party to any letters of intent, memoranda of understanding,
      non-competition arrangements, non-disclosure agreements or confidentiality
      agreements that remain in effect.

     

    3.10 Capital
      Structure; Equity Interests.

     

    (a) Capital
      Structure.
      The
      capitalization and record owners of all of the Equity Interests of the Companies
      are as set forth on Schedule 3.10(a) of the Disclosure Schedules and the
      Membership Interests of the Members as shown on Schedule 3.10(a) of the
      Disclosure Schedules constitute the only issued and outstanding Equity Interests
      in the Companies and neither of the Companies (i) has any outstanding securities
      convertible into or exchangeable or exercisable for any Equity Interests or
      (ii)
      has outstanding any rights to subscribe for or to purchase, or any agreements
      providing for the issuance (contingent or otherwise), of, or any calls against,
      commitments by or claims against it of any character relating to, any shares
      of
      its Equity Interests or any securities convertible into or exchangeable or
      exercisable for any shares of its Equity Interests. The capitalization and
      record owners of all the Equity Interests as shown on Schedules 3.10(a) of
      the
      Disclosure Schedules accurately list the names of each of the Members, their
      principal addresses, and the number of Membership Interests owned.

     

    (b) All
      Equity Interests in the Companies previously issued and now cancelled were
      duly
      authorized and issued in compliance with the applicable Maryland law, the
      Securities Act of 1933, as amended, and any applicable state “Blue Sky” laws or
      exemptions therefrom. All outstanding Membership Interests are duly authorized
      have been validly issued, and owned beneficially and of record by the Members,
      free and clear of any Lien, and were issued in compliance with the Securities
      Act of 1933, as amended, and any applicable state “Blue Sky” laws or exemptions
      therefrom. None of the Members has granted any proxy, or entered into any voting
      trust, voting agreement or similar arrangement, with respect to his or her
      Membership Interests. 

     

    3.11 Title
      to Membership Interests.

     

    The
      Members own the Membership Interests of record and beneficially in the amounts
      set forth on Schedule 3.10(a), free and clear of any Liens, and upon completion
      of the Closing FAAC will own all of the issued and outstanding Membership
      Interests of the Company free and clear of any Liens.

     

    
      
        
        

      

      
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    3.12 Articles,
      Operating Agreements and Records.

     

    True
      and
      complete copies of the Articles of Organization and Operating Agreements, as
      amended through the date hereof, minute books and membership interest record
      books of the Companies (i) have been provided or made available to FAAC prior
      to
      the execution of this Agreement, and (ii) are complete and correct in all
      material respects. Such minute books contain a true and complete record of
      all
      actions taken at all meetings and by all written consents in lieu of meetings
      of
      the directors, member and committees of the boards of directors of the Companies
      from their respective dates of incorporation through the date hereof. Neither
      of
      the Companies is in violation of any provisions of its respective certificate
      of
      organization or operating agreement. 

     

    3.13 Assets
      - In General.

     

    Except
      as
      set forth on Schedule 3.13 of the Disclosure Schedules, the assets and rights
      of
      the Companies include (a) all of the assets and rights of the Companies
      that were used in the conduct of their businesses as of December 31, 2005,
      subject to such changes as have occurred in the ordinary course of business
      since December 31, 2005, and (b) all assets reflected in the December 2005
      Financial Statements, subject to such changes as have occurred in the ordinary
      course of business since December 31, 2005. Except as set forth on Schedule
      3.13
      of the Disclosure Schedules, each of the Companies, has good and marketable
      title to all of their respective assets, free and clear of any Lien. Except
      as
      set forth on Schedule 3.13 of the Disclosure Schedules, all assets necessary
      for
      the conduct of the business of the Companies in accordance with past practice
      are (a) in good operating condition and repair, ordinary wear and tear
      excepted, (b) not in need of maintenance or repair, except for ordinary
      routine maintenance or repairs that are not material in nature or cost, and
      (c) adequate and sufficient for the continuing conduct of the businesses of
      the Companies as conducted prior to the date hereof.

     

    3.14 Real
      Property Interests.

     

    Except
      as
      set forth on Schedule 3.14 of the Disclosure Schedules, neither of
      the
      Companies now
      owns,
      or has ever owned, any real property. Schedule 3.14 of the Disclosure Schedules
      sets forth a list and summary description of all leases, subleases, or other
      occupancies used by the
      Companies or to which any of them is a party (the “Real
      Property Interests”).
      Except as set forth on Schedule 3.14 of the Disclosure Schedules, each of
      the Real Property Interests listed and described on Schedule 3.14 of the
      Disclosure Schedules is in full force and effect, and there is no default
      by either
      of
      the Companies under any such Real Property Interests.

     

    3.15 Personal
      Property.

     

    (a) Set
      forth
      on Schedule 3.15(a) of the Disclosure Schedules is a list of all material
      equipment, machinery, motor vehicles, and other tangible personal property
      owned
      or leased by the Companies (the “Personal
      Property”).
      Each
      of the Companies has good title to all of their respective Personal Property,
      free and clear of any Lien.

     

    
      
        
        

      

      
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    (b) Schedule
      3.15(b) of the Disclosure Schedules is a true and correct list of all of the
      Uniform Commercial Code Financing Statements filed and in force in the indicated
      jurisdictions with respect to the Companies (the “Financing
      Statements”).
      Except for those Financing Statements indicated on Schedule 3.15(b) that are
      with respect to Indebtedness that shall be repaid at Closing (and are to be
      terminated upon the repayment of that Indebtedness) the Financing Statements
      relate only to leased property. The only Financing Statements in force with
      respect to the Companies relate to leased property.

     

    3.16 Intellectual
      Property Rights.

     

    (a) Schedule
      3.16(a) of the Disclosure Schedules includes a true and complete list of all
      Commercial Software used by or in connection with the businesses of each of
      the
      Companies. Schedule 3.16(a) of the Disclosure Schedules also includes a true
      and
      complete list of (i) all Copyrights, Patents and Trademarks of the Companies
      used by or in connection with the businesses of each of the Companies and (ii)
      all pending applications for Copyrights, Patents and Trademarks filed by or
      on
      behalf of the
      Companies and used by or in connection with the businesses of the
      Companies as presently conducted. None of such rights is or has been opposed
      or
      held unenforceable. Each of the aforesaid Intellectual Property Rights is valid,
      subsisting and enforceable. Each of the aforesaid registered or issued
      Intellectual Property Rights is duly registered in the name of the applicable
      Company, as appropriate.

     

    (b) Except
      as
      set forth on Schedule 3.16(b) of the Disclosure Schedules, the business of
      the
      Companies as presently conducted does not require or use any Intellectual
      Property Rights not owned by or licensed to the
      Companies. The Companies are the owners or have the right to use the
      Intellectual Property Rights listed on Schedule 3.16(a) of the Disclosure
      Schedules without making any payment to others or granting rights to others
      in
      exchange therefor.

     

    (c) Except
      as
      set forth on Schedule 3.16(c) of
      the
      Disclosure Schedules, (i) no Person (other than the
      Companies) has any right to use any Intellectual Property Rights owned
      by the
      Companies and (ii) no member, director, officer or employee of, or
      Consultant to, the
      Companies has any right to use, other than in connection with the business
      activities of the
      Companies as presently conducted, any of the Intellectual Property or
      Intellectual Property Rights.

     

    (d) The
      operation of the business of the Companies in the normal course of business
      prior to the Effective Date does not infringe in any respect upon the
      Intellectual Property Rights of any Person, and no Person who does not have
      the
      right to use the Intellectual Property Rights has claimed or asserted the right
      to use any Intellectual Property Rights or to deny the right of either of the
      Companies the right to use same. No proceeding alleging infringement of the
      Intellectual Property Rights of any Person is pending or threatened against
      either of the Companies.

     

    (e) With
      respect to each Trade Secret of the Companies, the documentation relating to
      such Trade Secret is current, accurate and in sufficient detail and content
      to
      identify and explain it and allow its full and proper use without reliance
      on
      the knowledge or memory of any individual. The Companies have taken all
      reasonable precautions to protect the secrecy, confidentiality, and value of
      their respective Trade Secrets. Such Trade Secrets are not part of the public
      knowledge or literature, and have not been used, divulged, or appropriated
      either for the benefit of any Person (other than the Companies) or to the
      detriment of the Companies.

     

    
      
        
        

      

      
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    (f) Schedule
      3.16(f) of the Disclosure Schedules includes a true and complete list of any
      rights (e.g. unlimited, limited, restrictive, government purpose license rights,
      and march-in) that any Governmental Authority has in any copyrights, patents,
      trademarks, Technology, or Software that the
      Companies use in their respective businesses. Except as set forth in Schedule
      3.16(f) of the Disclosure Schedules, neither of
      the
      Companies has developed any item, component, process or software as a
      requirement of any Government Contract, or for which any Governmental Authority
      paid some or all of the cost of development.

     

    3.17 Scheduled
      Contracts and Proposals.

     

    (a) Scheduled
      Contracts.
      Schedule 3.17(a) of the Disclosure Schedules is a true and complete list of
      all
“Scheduled Contracts” (as hereinafter defined) to which either of the Companies
      is a party, by which it is bound, or which otherwise pertain to the businesses
      of the Companies. For the purposes of this Section 3.17(a), the term
“Scheduled
      Contracts”
shall
      mean the following written or oral contracts, agreements, indentures,
      instruments, commitments and amendments thereof with suppliers, customers,
      producers, consumers, lenders of the Companies and other third parties that
      are
      currently in effect:

     

    (i) loan
      and
      credit agreements, revolving credit agreements, security agreements, guarantees,
      notes, agreements evidencing any lien, conditional sales agreements, factoring
      agreements, leasing agreements, sale and leaseback and synthetic lease
      agreements, or title retention agreements;

     

    (ii) hedging
      and similar agreements;

     

    (iii) contracts
      that involve the sale by the
      Companies of goods, materials, supplies, or services (other than Government
      Contracts) providing for payments over the life of the contract greater than
      $50,000;

     

    (iv) agreements
      relating to Intellectual Property Rights listed on Schedule 3.16(a) of the
      Disclosure Schedules;

     

    (v) contracts,
      agreements, indentures, instruments or commitments by and between the
      Companies and Persons with whom the
      Companies is not dealing at arm’s length;

     

    (vi) agreements
      listed on Schedule 3.9(a) of the Disclosure Schedules;

     

    (vii) franchise,
      distribution, license or consignment contracts or agreements;

     

    (viii) sales,
      agency or advertising contracts, agreements, or commitments providing for
      payments over the life of the contract greater than $50,000;

     

    
      
        
        

      

      
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    (ix) leases
      under which either of the Companies is the lessor or lessee other than operating
      leases that require future payments by either of the Companies of more than
      $10,000 per annum;

     

    (x) management
      or service contracts or agreements, and contracts (other than agreements with
      Consultants and agreements with independent contractors and sub-contractors)
      and
      commitments providing for payments over the life of the company greater than
      $50,000;

     

    (xi) contracts
      or agreements with Consultants to the extent not otherwise disclosed on Schedule
      3.26(e) of the Disclosure Schedules;

     

    (xii) agreements
      of any kind with any Affiliate of the
      Companies;

     

    (xiii) agreements
      of any kind relating to the business of the
      Companies to which employees of the
      Companies, or entities controlled by them, are parties; and

     

    (xiv) discount
      policies and practices, if any.

     

    (b) Status
      of Scheduled Contracts.
      Except
      as otherwise disclosed on Schedule 3.17(b) of the Disclosure Schedules, as
      of
      the Effective Date, (x) each of the Scheduled Contracts is in full force and
      effect; (y) a true and complete copy of each written Scheduled Contract (and
      all
      amendments thereto); and (z) there are no oral modifications or amendments
      to
      any of the Scheduled Contracts. In addition:

     

    (i) All
      of
      the Scheduled Contracts have been legally awarded and are binding on the parties
      thereto, and each of the Companies, as the case may be, is in material
      compliance with all terms and conditions in such Scheduled
      Contracts;

     

    (ii) Neither
      of the Companies has received any written notice of deficient performance or
      administrative deficiencies relating to any Scheduled Contract;

     

    (iii) Neither
      of the Companies has received any notice of any stop work orders, terminations,
      cure notices, show cause notices or notices of default or breach under any
      of
      the Scheduled Contracts, nor has any such action been threatened or
      asserted;

     

    (iv) Each
      Scheduled Contract was entered into in the ordinary course of business and,
      based upon assumptions that the Companies’ management believes to be reasonable
      and subject to such assumptions being fulfilled;

     

    (v) There
      are
      no Scheduled Contracts for the provision of goods or services by either of
      the
      Companies that include a liquidated damages clause or unlimited liability
      by the
      Companies, or liability for consequential damages; 

     

    (vi) There
      are
      no Scheduled Contracts for the provision of goods or services by either of
      the
      Companies that require the applicable Company to post a surety, performance
      or
      other bond or to be an account party to a letter of credit or bank
      guarantee; 

     

    
      
        
        

      

      
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    (vii) There
      are
      no written claims of any type, or requests for equitable adjustments outstanding
      or, to the Knowledge of the Companies, threatened under any Scheduled Contracts
      in process
      and no
      money presently due to either of the Companies on any Scheduled Contract has
      been withheld or set off or subject to attempts to withhold or setoff;
      and

     

    (viii) No
      party
      to a Scheduled Contract has notified either of the Companies that a Company
      has
      breached or violated any Law or any certification, representation, clause,
      provision or requirement of any Scheduled Contract.

     

    (c) Proposals.
      Schedule 3.17(b) of the Disclosure Schedules sets forth a true and accurate
      summary of all bids, proposals, offers, or quotations made by the
      Companies that were outstanding as of the date of this Agreement (collectively
      the “Proposals”),
      true
      and complete copies of which have been made available to FAAC. Schedule 3.17(b)
      of the Disclosure Schedules identifies each Proposal by the party to whom such
      bid, proposal, or quotation was made, the subject matter of such bid, proposal,
      or quotation and the proposed price.
      

     

    3.18 Government
      Contracting.

     

    (a) Definitions.
      The
      following capitalized terms, when used in this Section 3.18, shall have the
      respective meanings set forth below:

     

    (i) “Active”,
      whether or not capitalized, when used to modify any Government Contract, or
      Government Subcontract, means that final payment has not been made on such
      Government Contract, or Government Subcontract and when used to modify any
      Teaming Agreement, “active” means that such Teaming Agreement has not terminated
      or expired.

     

    (ii) "Bid"
      means
      any bid, proposal, offer or quotation made by either of the Companies or by
      a
      contractor team or joint venture, in which either of the Companies is
      participating, that, if accepted, would result in the award of a Government
      Contract or a Government Subcontract.

     

    (iii) “Company
      Subcontract”
means
      any subcontract, basic ordering agreement, letter subcontract, purchase order,
      task order, delivery order, consulting agreement or other written agreement
      issued by either of the Companies or entered into between either of the
      Companies and to any Person in support of either of the Companies’ performance
      of a Government Contract or Government Subcontract.

     

    (iv) “Government
      Contract”
means
      any prime contract, multiple award schedule contract, basic ordering agreement,
      letter contract, and otherwise to include any purchase order, task order or
      delivery order issued thereunder between either of the Companies and either
      the
      U.S. Government or a State Government.

     

    (v) “Government
      Subcontract”
means
      any subcontract issued to either of the Companies by a Government prime
      contractor, including any basic ordering agreement, letter subcontract, and
      otherwise any purchase order, task order or delivery order between one of the
      Companies and any prime contractor to either the U.S. Government or a State
      Government.

     

    
      
        
        

      

      
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    (vi) “State
      Government”
means
      any state, territory or possession of the United States or any department or
      agency of any of the above with statewide jurisdiction and
      responsibility.

     

    (vii) “Teaming
      Agreement”
has
      the
      same meaning as the term, “Contractor team arrangement,” as defined in Federal
      Acquisition Regulation (“FAR”) 9.601.

     

    (viii) “U.S.
      Government”
means
      the United States Government or any department, agency or instrumentality
      thereof.

     

    (b) Government
      Contracts and Subcontracts.
      Schedule 3.18(b) of the Disclosure Schedules separately lists and identifies,
      in
      each case as of the Effective Date:

     

    (i) Each
      active Government Contract and Government Subcontract identified by contract
      number, customer and date of award to the extent such information can be
      provided consistent with national security (true and complete copies of which,
      including all modifications and amendments thereto, have been provided to FAAC);
      and

     

    (ii) Each
      active Government Contract and Government Subcontract that was negotiated (or
      modification thereto was negotiated) based on cost and pricing data that either
      of the Companies certified as being current, complete and accurate pursuant
      to
      the Truth in Negotiations Act (10 U.S.C. § 2306a; 41 U.S.C. §
256b).

     

    (c) Bids.
      Schedule 3.18(c) of the Disclosure Schedules separately lists and identifies
      as
      of the Effective Date each outstanding Bid, identified by
      the
      Person to whom such Bid was made, the date submitted, the subject matter of
      such
      Bid, and, to the Knowledge of the Companies, the anticipated award date and
      whether any such Bid is dependent, in whole or in part, on the “small business”
or other status of the Companies under Applicable Law.

     

    (d) Teaming
      Agreements.
      Schedule 3.18(d) of the Disclosure Schedules separately lists and identifies
      each active Teaming Agreement as of the Effective Date to which either of the
      Companies is a party (true and complete copies of which, including all
      modifications and amendments thereto, have been provided to FAAC).

     

    (e) Company
      Subcontracts.
      

     

    (i) To
      the
      Knowledge of the Company, each active Company Subcontract is in full force
      and
      effect and is binding on the Companies, or either of them and, to the Knowledge
      of the Companies, the other party thereto, except to the extent any such failure
      to be in full force and effect and binding would not result in a Material
      Adverse Effect.

     

    (ii) To
      the
      Knowledge of the Company, each of the Companies has substantially complied
      with
      all material terms and conditions of each active Company Subcontract, except
      to
      the extent either Company’s failure so to have complied would not result in a
      Material Adverse Effect.

     

    (iii) There
      are
      no outstanding claims against either of the Companies arising out of or relating
      to any active Company Subcontract, and to the Knowledge of the Companies, there
      are not facts that might give rise to or result in such a claim, except, in
      either case, for claims that would not result in a Material Adverse Effect
      if
      asserted against and paid by either of the Companies.

     

    
      
        
        

      

      
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    (iv) There
      are
      no disputes between either of the Companies and any other party arising out
      of
      or relating to any active Company Subcontract, and to the Knowledge of the
      Companies, there are not facts that might give rise to or result in such a
      dispute, except, in either case, for disputes that would not result in a
      Material Adverse Effect if resolved. There are no outstanding claims against
      either of the Companies arising out of or relating to any active Company
      Subcontract, and to the Knowledge of the Companies, there are not facts that
      might give rise to or result in such a claim, except in either case for claims
      that would not result in a Material Adverse Effect if they were asserted against
      and paid by either of the Companies against either of the
      Companies.

     

    (f) Marketing
      Agreements.
      Schedule 3.18(f) of the Disclosure Schedules separately lists and identifies
      as
      of the Effective Date each sales representation, consulting and other agreement
      regarding marketing and selling the Companies’ products and services to the U.S.
      Government, any State Government or any foreign government (or department,
      agency or instrumentality thereof), to which either of the Companies is (or
      has
      been at any time since December 31, 2003) a party (true and complete copies
      of
      which, including all modifications and amendments thereto, have been provided
      to
      FAAC).

     

    (g) Status.
      Except
      as set forth on Schedule 3.18(g) of the Disclosure Schedules, as of the
      Effective Date:

     

    (i) To
      the
      Knowledge of the Companies, each active Government Contract and Government
      Subcontract is in full force and effect, has been legally awarded and is binding
      on the Companies, or either of them and, to the Knowledge of the Companies,
      the
      other party thereto. 

     

    (ii) To
      the
      Knowledge of the Companies, each active Teaming Agreement is in full force
      and
      effect and is binding on the Companies and, to the Knowledge of the Companies,
      the other party thereto.

     

    (iii) To
      the
      Knowledge of the Companies, each of the Companies has substantially complied
      with all material terms and conditions of each active Government Contract,
      Government Subcontract and Teaming Agreement, including all clauses, provisions
      and requirements incorporated therein expressly, by reference or by operation
      of
      Applicable Law.

     

    (iv) To
      the
      Knowledge of the Companies, all representations and certifications executed,
      acknowledged or set forth in or pertaining to any Bid submitted by either of
      the
      Companies or to any Government Contract or Government Subcontract awarded to
      either of the Companies, in each case since December 31, 2003, were current,
      accurate and complete in all material respects as of their respective effective
      dates, and each of the Companies has complied in all material respects with
      all
      such representations and certifications.

     

    
      
        
        

      

      
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    (v) Neither
      the U.S. Government, any State Government nor any prime contractor,
      subcontractor or other Person has notified either of the Companies that it
      has
      breached or violated any Applicable Law or any certification or representation
      pertaining to any Bid, Government Contract or Government
      Subcontract.

     

    (vi) To
      the
      Knowledge of the Companies, no active Government Contract was awarded to either
      of the Companies pursuant to the Small Business Innovative Research
      (“SBIR”)
      program or any set-aside program (small business, small disadvantaged business,
      8(a), woman owned business, etc.) or as a result of either of the Companies’
“small
      business” or other status under Applicable Law.

     

    (vii) To
      the
      Knowledge of the Companies, no active Government Subcontract was awarded to
      either of the Companies as a result of its’ “small
      business” or other preferred status.

     

    (viii) No
      active
      Government Contract or Government Subcontract or outstanding Bid includes a
      liquidated damages clause or any requirement to post a surety, performance
      or
      other bond or to be an account party to a letter of credit or bank
      guarantee.

     

    (ix) The
      cost
      accounting practices that each of the Companies is using (and has used since
      December 31, 2003) to estimate and record costs in connection with the
      submission of Bids and performance of Government Contracts and Government
      Subcontracts are (and have been) in substantial compliance with Applicable
      Law,
      including but not limited to, the FAR Cost Principles (48 C.F.R. Part 31) and
      Cost Accounting Standards (48 C.F.R. Chap. 99), and have been properly disclosed
      to the U.S. Government (if required to be disclosed by Applicable
      Law).

     

    (x) To
      the
      Knowledge of the Companies, neither of the Companies nor any of their respective
      directors, officers or employees is (or has been at any time since December 31,
      2003)
      suspended or debarred from doing business with the U.S. Government or any State
      Government, or is (or has been at any time since December 31,
      2003)
      deemed nonresponsible or ineligible for U.S. Government or State Government
      contracting; and to the Knowledge of the Companies, there are no circumstances
      that would warrant in the future the institution of suspension or debarment
      proceedings, criminal or civil fraud or other criminal or civil proceedings
      or a
      determination of nonresponsibility or ineligibility against either of the
      Companies or any of their respective directors, officers or
      employees.

     

    (xi) Since
      December 31, 2003, no Government Contract or Government Subcontract has
      been terminated for convenience or default, no stop work order, cure notice,
      show cause notice or other notice threatening termination or alleging
      noncompliance with any material term has been issued to either of the Companies
      with respect to any Government Contract or Government Subcontract, and to the
      Knowledge of the Companies, no event, condition or omission has occurred or
      exists that would constitute grounds for any such action with respect to any
      active Government Contract or Government Subcontract.

     

    (xii) No
      money
      presently due to either of the Companies on any active Government Contract
      or
      Government Subcontract has been, or to the Knowledge of the Companies threatened
      or likely to be, withheld or set off or subject to attempts to withhold or
      setoff.

     

    
      
        
        

      

      
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    (xiii) To
      the
      Knowledge of the Companies, neither of the Companies is performing “at risk”
under any anticipated Government Contract or Government Subcontract or any
      anticipated option exercise or modification thereof prior to award, option
      exercise or modification, or has made any expenditures or incurred costs or
      obligations in excess of any applicable limitation of government liability,
      limitation of cost, limitation of funds or other similar clause(s) limiting
      the
      U.S. Government’s liability on any active Government Contract or Government
      Subcontract.

     

    (xiv) Each
      of
      the Companies and their respective employees hold such security clearances
      as
      are required to perform Government Contracts and Government Subcontracts of
      the
      type performed prior to the date of this Agreement by each of them; to the
      Knowledge of the Companies, there are no facts or circumstances that could
      reasonably be expected to result in the suspension or termination of such
      clearances or that could reasonably be expected to render either of the
      Companies ineligible for such security clearances in the future; and each of
      the
      Companies has complied in all respects with all security measures required
      by
      the Government Contracts, Government Subcontracts or Applicable
      Law.

     

    (h) Investigations.

     

    (i) To
      the
      Knowledge of the Companies, neither of the Companies, nor any of their
      respective directors, officers or employees or any of its agents or consultants
      is (or has been since December 31, 2003) under administrative, civil
      (including, but not limited to, claims made under the False Claims Act, 18
      U.S.C.§ 287) or criminal investigation, indictment or information, audit or
      internal investigation with respect to any alleged irregularity, misstatement,
      act or omission arising under or relating to any Government Contract or
      Government Subcontract;

     

    (ii) To
      the
      Knowledge of the Companies, neither of the Companies has made a voluntary
      disclosure to the U.S. Government or any State Government with respect to any
      alleged irregularity, misstatement or omission arising under or relating to
      a
      Government Contract or Government Subcontract; and

     

    (iii) To
      the
      Knowledge of the Companies, there is no irregularity, misstatement, act or
      omission arising under or relating to any Government Contract or Government
      Subcontract that has led or could reasonably be expected to lead, either before
      or after the Closing Date, to any of the consequences set forth in (i)-(ii)
      above, or to any other damage, penalty assessment, recoupment of payment, or
      disallowance of cost.

     

    (i) Audits.

     

    (i) Schedule
      3.18(i) of the Disclosure Schedules lists and identifies as of the Effective
      Date each audit report, including without limitation reports issued by the
      Defense Contract Audit Agency and any inspector general, and each notice of
      cost
      disallowance received by either of the Companies since January 1, 2000 relating
      to any Bid, Government Contract or Government Subcontract (true and complete
      copies of which have been provided to FAAC).

     

    
      
        
        

      

      
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    (ii) Since
      December 31, 2003, no cost in excess of $25,000 or group, type or class of
      cost in excess of $125,000 in the aggregate and which was incurred or invoiced
      by either of the Companies on any active Government Contract or Government
      Subcontract has been disallowed or is otherwise the subject of a formal dispute
      (excluding requests for clarification or back-up documentation, or correction
      of
      good faith invoice errors).

     

    (iii) Neither
      of the Companies has incurred any material costs on any active cost-reimbursable
      Government Contract or Government Subcontract that are not “allowable” costs
      pursuant to FAR § 31.201-2 (48 CFR § 31.201-2) and any other applicable law or
      regulation and that have not been properly recorded as such in the Companies’
cost accounting books and records.

     

    (iv) The
      reserves established by the Companies with respect to possible adjustments
      to
      the indirect and direct costs incurred by the Companies on any active Government
      Contract or Government Subcontract are reasonable and are adequate to cover
      any
      potential adjustments resulting from audits of any such Government Contract
      or
      Government Subcontract.

     

    (j) Financing
      Arrangements.
      Except
      as set forth on Schedule 3.18(j) of the Disclosure Schedules, there exist no
      financing arrangements (e.g., an assignment of moneys due or to become due)
      with
      respect to any active Government Contract or Government
      Subcontract.

     

    (k) Protests.
      Except
      as set forth on Schedule 3.18(k) of the Disclosure Schedules, no outstanding
      Bid
      or active Government Contract or Government Subcontract as of the Effective
      Date
      is subject to any protest to a procuring agency, the United States Government
      Accountability Office, the United States Small Business Administration or any
      other agency or court (whether one of the Companies is the protestor, an
      interested party or neither), and to
      the
      Knowledge of the Companies, no outstanding Bid or active Government Contract
      or
      Government Subcontract will become subject to such a protest.

     

    (l) Claims.
      Except
      as set forth on Schedule 3.18(l) of the Disclosure Schedules, as of the
      Effective Date: 

     

    (i) Neither
      of the Companies has any interest in any pending or potential claim or request
      for equitable adjustment against the U.S. Government, any State Government
      or
      any prime contractor, subcontractor or vendor arising under or relating to
      any
      Government Contract, Government Subcontract, Bid or Teaming
      Agreement.

     

    (ii) There
      are
      no outstanding claims against either of the Companies, either by the U.S.
      Government, any State Government or any prime contractor, subcontractor, vendor
      or other third party, arising out of or relating to any Government Contract,
      Government Subcontract, Bid or Teaming Agreement, and to the Knowledge of the
      Companies, there are no facts that might give rise to or result in such a
      claim.

     

    (iii) There
      exist no disputes between either of the Companies and the U.S. Government,
      any
      State Government, or any prime contractor, subcontractor, vendor or other third
      party, arising out of or relating to any active Government Contract, Government
      Subcontract, Company, Teaming Agreement or outstanding Bid, and to the Knowledge
      of the Companies, there are no facts that might give rise to or result in such
      a
      dispute.

     

    
      
        
        

      

      
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    (m) Multiple
      Award Schedules.

     

    (i) With
      respect to each active multiple award schedule Government Contract as of the
      Effective Date, to the Knowledge of the Companies, the Companies have (1)
      provided to the U.S. Government all information required by the applicable
      solicitation or otherwise requested by the Government; (2) submitted information
      that was current, accurate, and complete within the meaning of applicable law
      and regulation; and (3) made all required disclosures of any changes in the
      Companies’ respective commercial pricelist(s), discounts or discounting policies
      prior to the completion of negotiations with the U.S. Government.

     

    (ii) With
      respect to each active multiple award schedule Government Contract as of the
      Effective Date, Schedule 3.18(m) of the Disclosure Schedules identifies the
      basis of award, customer (or category of customer(s) (“COC”))
      and
      the Government’s price or discount relationship to the identified COC as agreed
      to by GSA and the Companies, or either of them, at time of award of such
      multiple award schedule Government Contract.

     

    (iii) Neither
      of the Companies has been notified or has any reason to believe that it has
      not
      complied with the notice and pricing requirements of the Price Reduction clause
      in each active multiple award schedule Government Contract listed on Schedule
      3.18(a) of the Disclosure Schedules, and, to the Knowledge of the Companies,
      there are no facts or circumstances that could reasonably be expected to result
      in a demand by the U.S. Government for a refund based upon either of the
      Companies’ failure to comply with the Price Reductions clause.

     

    (iv) To
      the
      Knowledge of the Companies, each of the Companies has filed all reports related
      to and paid all industrial funding fees required to be paid by the Companies
      under any active multiple award schedule Government Contract.

     

    (v) Neither
      of the Companies has
      received notice or otherwise has reason to believe that any
      active
      orders issued to either of the Companies pursuant to each active multiple award
      schedule Government Contract are within the scope of such Government
      Contract.

     

    (n) Government
      Furnished Property.
      Schedule 3.18(n) of the Disclosure Schedules identifies as of the Effective
      Date
      all personal property, equipment and fixtures loaned, bailed or otherwise
      furnished to either of the Companies by or on behalf of the U.S. Government
      for
      use in the performance of an active Government Contract or Government
      Subcontract (“Government-Furnished
      Property”)
      and
      the active Government Contracts or Government Subcontracts to which each item
      of
      Government-Furnished Property relates. To the Knowledge of the Companies, the
      Companies have complied in all material respects with all of its obligations
      relating to the Government-Furnished Property.

     

    (o) Former
      Government Officials.
      Except
      as set forth on Schedule 3.18(o) of the Disclosure Schedules, neither of the
      Companies employ any former government officials in key management positions
      or
      as consultants.

     

    
      
        
        

      

      
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    3.19 Clients.

     

    Neither
      of the Companies has received any notice, or has any reason to believe, that
      any
      supplier, producer, consumer, financial institution or other party to any
      Scheduled Contract will not do business with the
      Companies on substantially the same terms and conditions subsequent to the
      Closing Date as before such date.

     

    3.20 Backlog.

     

    Schedule 3.20
      of the Disclosure Schedules sets forth the contract backlogs of the Companies,
      as of March 31, 2006. Schedule 3.20 of the Disclosure Schedules includes
      with respect to each contract listed thereon (a) the name of each customer,
      (b)
      a reference as to whether the applicable contract is for a fixed price or other
      type of contract, (c) the periods of performance, (d) the contract revenue
      for
      2004, 2005 and the first quarter 2006, (e) the dollar value of the contract,
      (f)
      the contract revenue from inception, and (g) the dollar amount of the
      backlog.

     

    3.21 Compliance
      with Laws.

     

    Each
      of
      the Companies has been and is in compliance with each Law that is or was
      applicable to it or the conduct or operation of its business or the ownership
      or
      use of any of its assets, except where any such failure to be in compliance
      with
      such Law would not reasonably be expected to have a Material Adverse Effect
      on
      either or both of the Companies. No event has occurred or circumstance exists
      that (with or without notice or lapse of time) (a) would constitute or
      result in a material violation by either of the Companies of (or failure on
      the
      part of either of the Companies to comply in all material respects with) any
      such applicable Law, or (b) would give rise to any obligation on the part
      of the Companies to undertake, or to bear all or any portion of the cost of,
      any
      remedial action of any nature under any such applicable Law. Neither of the
      Companies has received, at any time during the past three years, any notice
      or
      other communication (whether oral or written) from any Governmental Authority
      regarding (a) any actual, alleged, or potential violation of, or failure to
      comply with, any such applicable Law, or (b) any actual, alleged, or
      potential obligation on the part of a Company to undertake, or to bear all
      or
      any portion of the cost of, any remedial action of any nature under any such
      applicable Law. 

     

    3.22 Environmental
      Matters.

     

    To
      the
      Knowledge of the Companies, each of the Companies has complied with, and is
      in
      compliance with, all applicable Environmental Laws and has no Environmental
      Liabilities.

     

    3.23 Licenses
      and Permits.

     

    (a) Each
      of
      the Companies has all licenses, permits and other authorizations from
      Governmental Authorities necessary for the conduct of their respective business
      as conducted in the normal course of business prior to and as of the date hereof
      (collectively “Permits”),
      except for where the failure to obtain such Permits would not have a Material
      Adverse Effect on them. Schedule 3.23(a) of the Disclosure Schedules sets
      forth a list of all Permits held by each of the Companies.

     

    
      
        
        

      

      
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    (b) To
      the
      Knowledge of the Companies and except as set forth on Schedule 3.23(a) of the
      Disclosure Schedules and except as would not have a Material Adverse Effect,
      (i) each of the Permits is in full force and effect, (ii) each of the
      Companies is in full compliance with the terms, provisions and conditions
      thereof, (iii) there are no outstanding violations, notices of
      noncompliance, judgments, consent decrees, orders or judicial or administrative
      actions, investigations or proceedings adversely affecting any of said Permits,
      and (iv) no condition (including, without limitation, this Agreement and
      the Contemplated Transactions) exists and no event has occurred that (whether
      with or without notice, lapse of time or the occurrence of any other event)
      would reasonably be expected to result in the suspension or revocation of any
      of
      said Permits other than by expiration of the term set forth therein, except
      in
      each case where such a suspension or revocation would not reasonably be expected
      to have a Material Adverse Effect on the
      Companies.

     

    3.24 Absence
      of Certain Business Practices.

     

    To
      the
      Knowledge of the Companies, neither of the
      Companies, nor any officer, employee or agent of the
      Companies, or any other Person acting on their behalf has, directly or
      indirectly, since the formation of the Companies, given, offered, solicited
      or
      agreed to give, offer or solicit any contribution, gift, bribe, rebate, payoff,
      influence payment, kickback or other payment, regardless of form and whether
      in
      money, property or services, to any customer, supplier, governmental employee
      or
      other Person who is or may be in a position to help or hinder the
      Companies in connection with the design, development, manufacture, distribution,
      marketing, use, sale, acceptance, maintenance or repair of their respective
      products and services (or assist the
      Companies in connection with any actual or proposed transaction relating to
      the
      products and services of the
      Companies) (a) that subjected or might have subjected either
      of the
      Companies to any damage or penalty in any civil, criminal or governmental
      litigation or proceeding, (b) that, if not given in the past, might have
      had a Material Adverse Effect as it relates to the products and services
      of the
      Companies, (c) that, if not continued in the future, might have a Material
      Adverse Effect, or subject the
      Companies to suit or penalty in any private or governmental litigation or
      proceeding, (d) for any purposes described in Section 162(c) of the Code,
      or (e) for the purpose of establishing or maintaining any concealed fund or
      concealed bank account.

     

    3.25 Litigation.

     

    (a) Except
      as
      set forth on Schedule 3.25(a) of the Disclosure Schedules, there are
      no:

     

    (i) actions,
      suits, claims, trials, written demands, investigations, arbitrations, or other
      proceedings (whether or not purportedly on behalf of the businesses of the
      Companies), pending or threatened against or with respect to the Companies,
      or
      their respective properties or businesses, but in all events including D&O
      Indemnification Claims pending or threatened against or with respect to the
      Companies or their respective properties or businesses; or

     

    
      
        
        

      

      
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    (ii) outstanding
      judgments, orders, decrees, writs, injunctions, decisions, rulings or awards
      against or with respect to the
      Companies, or their respective properties or businesses.

     

    (b) Neither
      of the Companies (nor the businesses of either of them) are in default with
      respect to any judgment, order, writ, injunction, decision, ruling, decree
      or
      award of any Governmental Authority. Except as set forth on Schedule 3.25(b)
      of
      the Disclosure Schedules, there is no reasonable basis for a claim against
      the
      Companies relating to defective design, material, or performance.

     

    (c) Schedule
      3.25(c) of the Disclosure Schedules contains a true and complete description
      of
      all indemnification obligations of the Companies, including a description in
      reasonable detail of any such obligation for which the indemnitee has given
      notice of a claim or in connection with which there exits any facts that would
      reasonably cause it to believe an indemnification claim will be
      made.

     

    3.26 Personnel
      Matters. 

     

    (a) True,
      accurate, and complete lists of all of the directors, officers, and employees
      of
      each of the Companies, as of May 4, 2006 (collectively, “Personnel”)
      and
      their positions are included on Schedule 3.26(a) of the Disclosure Schedules.
      True and complete information concerning the respective salaries, wages, and
      other compensation paid by the applicable Company during 2004 and 2005 as well
      as dates of employment, and date and amount of last salary increase, of such
      Personnel has been provided previously to FAAC.

     

    (b) All
      bonuses and other compensation owed by the Companies to their respective
      employees and consultants for periods prior to December 31, 2005, have been
      paid
      in full and all compensation owed and due by the Companies to their respective
      employees and Consultants for periods after December 31, 2005 is paid and
      current (other than bonuses). 

     

    (i) A
      bonus
      pool (the “Bonus
      Pool”)
      for
      fiscal year 2006 has been established (which is shown and accrued for with
      adequate revenues on the Interim Financials) from which bonuses are to be paid
      to certain employees of the
      Companies if
      and
      when such bonuses are determined by the Companies’ management at the end of the
      Companies’ 2006 fiscal year (the “Employee Bonuses”).

     

    (ii) Certain
      employees of the Companies are entitled to “Phantom Membership Interest
      Appreciation Rights” that are due and payable in full on the Closing Date (the
“Phantom
      Membership Interest Plan”).
      Schedule 3.26(b) of the Disclosure Schedules shows the employees participating
      in the Phantom Membership Interest Plan and the amounts payable at Closing
      for
      each such participant. At Closing the Companies shall be responsible for paying
      all sums due under the Phantom Membership Interest Plan and deliver to FAAC
      releases for each participant in the Phantom Membership Interest Plan in the
      form allocated hereafter as Exhibit J
      (the
“Phantom
      Membership Interest Release”).

     

    
      
        
        

      

      
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    (iii) The
      Estimated Closing Balance Sheet shall include reserves for the Bonus Pool and
      the payment of all sums due at Closing under the Phantom Membership Interest
      Plan.

     

    (c) There
      are
      no disputes, grievances, or disciplinary actions pending, or, to the Knowledge
      of the Companies, threatened, by or between either of the Companies and any
      Personnel.

     

    (d) All
      personnel policies and manuals of the Companies are listed on Schedule 3.26(d)
      of the Disclosure Schedules, and true, accurate, and complete copies of all
      such
      written personnel policies and manuals have been provided to FAAC.

     

    (e) Except
      for the Employee Bonuses or as otherwise listed on Schedule 3.26(e) of the
      Disclosure Schedules, neither of the Companies is a party to any:

     

    (i) management,
      employment, consulting, or other agreement with any Personnel or other person
      providing for employment or payments over a period of time or for termination
      or
      severance benefits, whether or not conditioned upon a change in control of
      the
      Companies;

     

    (ii) bonus,
      incentive, deferred compensation, severance pay, profit-sharing, stock purchase,
      stock option, benefit, or similar plan, agreement, or arrangement, whether
      written or unwritten;

     

    (iii) collective
      bargaining agreement or other agreement with any labor union or other Personnel
      organization (and no such agreement is currently being requested by, or is
      under
      discussion by management with, any Personnel or others); or

     

    (iv) other
      employment contracts, non-competition agreement, or other compensation agreement
      or arrangement affecting or relating to Personnel or former Personnel of the
      Companies, whether written or unwritten.

     

    (f) To
      the
      Knowledge of the Companies and except as otherwise disclosed on Schedule 3.26(f)
      of the Disclosure Schedules, there do not exist any facts that would give
      reasonable cause to believe that there will occur a discontinuation after the
      Closing Date of any currently existing employment situation of any executive
      and
      managerial Personnel with respect to either of the Companies on the currently
      existing terms.

     

    (g) No
      officer, director, agent or employee of, or Consultant to, either of the
      Companies is bound by any contract or agreement that purports to limit the
      ability of such officer, director, agent, employee, or Consultant to
      (i) engage in or continue in any conduct, activity, or practice relating to
      the business of either of the Companies or (ii) assign to the
      Companies or
      to any
      other Person any rights to any Intellectual Property or any Intellectual
      Property Right.

     

    (h) Except
      as
      otherwise disclosed on Schedule 3.26(h) of the Disclosure Schedules, no leased
      employee, as defined in Code Section 414(n), or independent contractor performs
      service for either of the Companies.

     

    
      
        
        

      

      
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    3.27 Labor
      Matters.

     

    (a) Neither
      of the Companies is obligated by, or subject to, any order of the National
      Labor
      Relations Board or other labor board or administration, or any unfair labor
      practice decision.

     

    (b) Neither
      of the Companies is a party or subject to any pending or, to the Knowledge
      of
      the Companies, threatened labor or civil rights dispute, controversy or
      grievance or any unfair labor practice proceeding with respect to claims of,
      or
      obligations of, any employee or group of employees. Neither of the Companies
      has
      received any notice that any labor representation request is pending or is
      threatened with respect to any employees of either of the
      Companies.

     

    (c) Each
      of
      the Companies is in compliance with all applicable Laws and affirmative action
      programs respecting employment and employment practices, terms and conditions
      of
      employment and wages and hours, including but not limited to Executive Order
      11246, as amended, the Workers’ Adjustment Retraining Notification Act and the
      Service Contract Act. This Section 3.27 does not extend to “ERISA” as defined in
      Section 3.28.

     

    (d) No
      present or former employee of the
      Companies has any claim against the
      Companies (whether under Federal or state law, pursuant to any employment
      agreement, or otherwise) on account of, or for: (i) overtime pay, other
      than for the current payroll period; (ii) wages or salary (excluding
      bonuses and amounts accruing under any pension or profit-sharing plan, including
      but not limited to any Pension Plan or Welfare Plan (as such terms are defined
      in Section 3.28)) for a period other than the current payroll period;
      (iii) vacation, time off or pay in lieu of vacation or time off, other than
      vacation or time off (or pay in lieu thereof) earned in respect of the current
      or past fiscal year or accrued on the most recent balance sheet for the
      Companies, or (iv) payment under any applicable workers’ compensation
      law.

     

    3.28 ERISA. 

     

    (a) Capitalized
      terms used in this Section 3.28 that are not otherwise defined in this Agreement
      shall have the meanings set forth below:

     

    (i) “Benefit
      Arrangement”
means
      any compensation or employment program (other than a Pension Plan or Welfare
      Plan), including but not limited to, any fringe benefit, incentive compensation,
      bonus, severance, deferred compensation and supplemental executive compensation
      plan that either of the Companies maintains or to which either of the Companies
      or any ERISA Affiliate contributes or has any obligation to contribute, or
      with
      respect to which either of the Companies or any ERISA Affiliate has any
      liability.

     

    (ii) “ERISA”
means
      the Employee Retirement Income Security Act of 1974, as the same may be amended
      from time to time, as well as any rules and regulations promulgated thereunder
      by any Governmental Authority, as from time to time in effect.

     

    
      
        
        

      

      
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    (iii) “ERISA
      Affiliate”
means
      a
      corporation that is a member of a controlled group of corporations with either
      of the Companies within the meaning of Code Section 414(b), a trade or business
      that is under common control with either of the Companies within the meaning
      of
      Code Section 414(c), or a member of an affiliated service group with either
      of
      the Companies within the meaning of Code Sections 414(m) or (o), including
      any
      such Entity that was an ERISA Affiliate at any time.

     

    (iv) “PBGC”
means
      the Pension Benefit Guaranty Corporation.

     

    (v) “Pension
      Plan”
means
      any employee pension benefit plan (as defined in ERISA Section 3(2)) either
      Company or
      an
      ERISA Affiliate maintains or to which either of the Companies or an ERISA
      Affiliate contributes or has any obligation to contribute, or with respect
      to
      which either of the Companies or an ERISA Affiliate has any
      liability.

     

    (vi) “Plan”
means
      any Pension Plan, any Welfare Plan, and any Benefit Arrangement.

     

    (vii) “Welfare
      Plan”
means
      any employee welfare benefit plan (as defined in ERISA Section 3(1))
      that either
      Company or
      an
      ERISA Affiliate maintains or to which either
      Company or
      an
      ERISA Affiliate contributes or has any obligation to contribute, or with respect
      to which either
      Company or
      an
      ERISA Affiliate has any liability.

     

    (b) Schedule
      3.28(b) of the Disclosure Schedules sets forth a list of: (i) each Pension
      Plan;
      (ii) each Welfare Plan; and (iii) each Benefit Arrangement. 

     

    (c) the
      Companies have delivered to FAAC true, accurate and complete copies of (i)
      the
      documents comprising each Plan (or, with respect to any Plan that is unwritten,
      a detailed written description of eligibility, participation, benefits, funding
      arrangements, assets and any other matters that relate to the obligations of
      the
      Companies or any ERISA Affiliate); (ii) all trust agreements, insurance
      contracts or any other funding instruments related to the Plans; (iii) all
      rulings, determination letters, no-action letters or advisory opinions from
      the
      IRS, the U.S. Department of Labor, the PBGC or any other Governmental Authority
      that pertain to each Plan and any open requests therefor; (iv) the most recent
      actuarial and financial reports (audited and/or unaudited) and the annual
      reports filed with any Governmental Authority with respect to the Plans during
      the most recent three years; and (v) all summary plan descriptions, summaries
      of
      material modifications, and memorandum, employee handbooks and other written
      communications regarding the Plans.

     

    (d) Neither
      of the Companies has, at any time within six (6) years prior to the Effective
      Date, sponsored, maintained or contributed to a Pension Plan subject to Title
      IV
      of ERISA, a multiemployer plan (as defined in ERISA Section 3(37)), or a
      voluntary employees’ beneficiary association, as defined in Code Section
      501(c)(9) (a “VEBA”).

     

    (e) Full
      payment has been made of all amounts that are required under the terms of each
      Plan to be paid as contributions with respect to all periods prior to the
      Effective Date and any such amounts that are not required to be so paid under
      any Welfare Plan, including any vacation pay plan, have been accrued on the
      Financial Statements.

     

    
      
        
        

      

      
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    (f) No
      prohibited transaction within the meaning of ERISA Section 406 or Code Section
      4975 has occurred with respect to any Pension Plan as of the date of this
      Agreement, other than a transaction to which a statutory or administrative
      exemption has been granted.

     

    (g) Except
      as
      set forth on Schedule 3.28(g) of the Disclosure Schedules, the form of each
      Pension Plan and Welfare Plan is in compliance with the applicable terms of
      ERISA, the Code, and any other applicable laws, including, but not limited
      to,
      the Americans with Disabilities Act of 1990, the Family Medical Leave Act of
      1993, the Health Insurance Portability and Accountability Act of 1996, the
      Uruguay Round Agreements Act, the Small Business Job Protection Act of 1996,
      the
      Uniformed Services Employment and Reemployment Rights Act of 1994, the Taxpayer
      Relief Act of 1997, the Internal Revenue Service Restructuring and Reform Act
      of
      1998, the Community Renewal Tax Relief Act of 2000, and the Economic Growth
      and
      Tax Relief Reconciliation Act of 2001, and such plans have been operated in
      compliance with such laws and the written Plan documents. Neither of
      the
      Companies, nor, any fiduciary of a Pension Plan has violated the requirements
      of
      Section 404 of ERISA. Except as set forth on Schedule 3.28(g) of the Disclosure
      Schedules, all required reports and descriptions of the Plans (including
      Internal Revenue Service Form 5500 Annual Reports, Summary Annual Reports and
      Summary Plan Descriptions and Summaries of Material Modifications) have been
      (when required) timely filed with the IRS, the U.S. Department of Labor or
      other
      Governmental Authority and distributed as required, and all notices required
      by
      ERISA or the Code or any other Laws with respect to the Pension Plans and
      Welfare Plans have been appropriately given.

     

    (h) Each
      Pension Plan that is intended to be qualified under Section 401(a) of the Code
      is subject to a favorable determination letter from the IRS, and to the
      Knowledge of the Companies there are no circumstances that will or could result
      in revocation of any such favorable determination letter. Each trust created
      under any Pension Plan has been determined to be exempt from taxation under
      Section 501(a) of the Code, and, to the Knowledge of the Companies, there is
      no
      circumstance that will result in a revocation of such exemption.

     

    (i) No
      charge, complaint, action, suit, proceeding, hearing, investigation, claim
      or
      demand with respect to a Plan or to the administration or the investment of
      the
      assets of any Plan that either of the Companies or any ERISA Affiliate maintains
      or has maintained, or to which either of the Companies or any ERISA Affiliate
      contributes or has contributed, for the benefit of any current or former
      employee (other than routine claims for benefits) is pending or, to the
      Knowledge of the Companies, threatened that could reasonably be expected to
      result in a material liability to either of the Companies or any ERISA Affiliate
      or to such Plan or a fiduciary of such Plan.

     

    (j) Except
      as
      required by the Code, the consummation of the transactions contemplated by
      this
      Agreement will not accelerate the time of vesting or the time of payment, or
      increase the amount of compensation due to any director, employee, officer,
      former employee or former officer of either
      Company or
      an
      ERISA Affiliate.

     

    (k) No
      written or oral representations have been made to any employee, former employee,
      or director of either
      Company or
      any
      ERISA Affiliate at any time promising or guaranteeing any employer payment
      or
      funding for the continuation of medical, dental, life or disability coverage
      for
      any period of time (except to the extent of coverage required under COBRA or
      other applicable Law).

     

    
      
        
        

      

      
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    (l) All
      nonqualified deferred compensation plans maintained by either
      or
      both Companies, to the extent such plans are maintained for the benefit of
      individuals that are subject to United States Taxes, satisfy the requirements
      of
      Section 409A of the Code.

     

    (m) Schedule
      3.28(m) of the Disclosure Schedules identifies (i) all Welfare Plans
      that either
      or
      both Companies self insure (each a “Self
      Insured Plan”
and
      collectively the “Self
      Insured Plans”);
      (ii)
      the administrator of each of the Self Insured Plans, (iii) the limits for each
      of the Self Insured Plans and (iv) the plan year for each of the Self Insured
      Plans. 

     

    (i) Each
      of
      the Self Insured Plans has been maintained in compliance, in all material
      respects, with its terms.

     

    (ii) There
      are
      no actions, suits, or claims (other than routine claims for benefits in the
      ordinary course) pending or, to the Knowledge of the Companies, threatened,
      and
      to the Knowledge of the Companies, there are no facts that reasonably could
      be
      expected to give rise to any such claims.

     

    (iii) To
      the
      Knowledge of the Companies, there are no benefit claims that either individually
      or in the aggregate are significantly greater than what the Companies generally
      experienced in the past.

     

    (n) No
      act or
      omission has occurred, with respect to any Plan that would result in any
      penalty, tax or liability of any kind imposed upon either
      of
      the Companies under
      applicable Law, and to the Knowledge of the Companies, no condition exists
      that
      reasonably could be expected to give rise to any such penalty, tax or
      liability.

     

    3.29 Tax
      Matters.

     

    Except
      as
      set forth Schedule 3.29 of the Disclosure Schedules:

     

    (a) Each
      of
      the Companies (i) is a limited liability company under Maryland law, taxable
      as
      a partnership under Subchapter K of the Code, (ii) has never made an election
      to
      be taxable as a corporation for federal or state income tax purposes, and (iii)
      has never been a “publicly traded partnership” as defined in Section 7704(b) of
      the Code. Each member of the Companies has timely reported on their individual
      income tax returns their share of the items of income and deductions of the
      Companies as reported to them on the Form K-1’s that they receive from the
      Companies;

     

    (b) The
      fiscal year of each of the Companies ends on December 31;

     

    (c) Each
      of
      the Members of the Companies is a United States citizen and is a resident of
      the
      State of Maryland;

     

    
      
        
        

      

      
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    (d) Each
      of
      the Companies has duly and timely filed all federal, state, local and foreign
      Tax reports, statements, documents and returns required to be filed by them
      (the
“Tax
      Returns”)
      and
      has timely paid all taxes and other charges of any kind whatsoever due and
      payable to federal, state, local or foreign taxing authorities (including,
      without limitation, those due and payable in respect of the sales, use,
      properties, income, franchises, licenses, foreign jurisdictions, levies,
      imposts, occupation, transfers, ad valorem, customs, goods and services,
      withholding or payrolls of the Companies, including any interest and penalties
      thereon and additions thereto) (“Taxes”).
      The
      Companies are not currently the beneficiary of any extension of time within
      which to file any Tax Return;

     

    (e) The
      reserves for Taxes reflected in the December 2005 Balance Sheets of the
      Companies are adequate and reflect all liability of the Companies for Taxes.
      Since December 31, 2005, the Companies have not incurred any liability for
      Taxes
      outside the ordinary course of business or otherwise inconsistent with past
      custom and practice;

     

    (f) There
      are
      no Tax liens upon any property or assets of the Companies except liens for
      current Taxes not yet due and payable;

     

    (g) All
      Tax
      Returns and amendments thereof filed by the Companies are true, correct and
      complete in all material respects;

     

    (h) All
      Taxes
      that the Companies are or were required by law to withhold or collect have
      been
      withheld or collected and, to the extent required, have been timely paid to
      the
      proper governmental body or other person;

     

    (i) There
      are
      no Tax allocation, indemnity, sharing or similar arrangements with respect
      to or
      involving the Companies, and, after the date hereof, the Companies shall not
      be
      bound by any such tax sharing agreements or similar arrangements or have any
      liability thereunder for amounts due in respect of periods on or prior to the
      Closing Date;

     

    (j) The
      Companies (i) have never been a partner for Tax purposes with respect to any
      joint venture, partnership, or other arrangement or contract which is treated
      as
      a partnership for income Tax purposes, (ii) do not own a single member limited
      liability company which is treated as a disregarded entity, (iii) are not a
      shareholder of a “controlled foreign corporation” as defined in Section 957 of
      the Code (or any similar provision of state, local or foreign law), and (iv)
      are
      not a shareholder of a “passive foreign investment company” within the meaning
      of Section 1297 of the Code;

     

    (k) The
      Companies do not have and have not had a permanent establishment in any foreign
      country, as defined in any applicable Tax treaty or convention between the
      United States of America and such foreign country;

     

    (l) The
      Companies have not entered into any transaction identified as a “listed
      transaction” for purposes of Treasury Regulations section 1.6011-4(b)(2) or
      301.6111-2(b)(2) and have not engaged in any reportable transaction within
      the
      meaning of Sections 6111 and 6112 of the Code;

     

    (m) There
      is
      no contract, plan or arrangement, including but not limited to the provisions
      of
      this Agreement, covering any employee or former employee of the Companies that,
      individually or collectively, could give rise to the payment of any amount
      that
      would not be deductible pursuant to the Code;

     

    
      
        
        

      

      
        48

        
          

        

      

      
        
        

      

    

    

     

    (n) There
      is
      no pending or threatened claim, audit, action, suit, proceeding or investigation
      against or with respect to (i) Taxes due and payable or claimed to be due by
      the
      Companies, or (ii) any Tax Return; 

     

    (o) No
      deficiencies for any Tax relating to the Companies have been claimed, proposed,
      asserted or assessed (tentatively or definitively) by any governmental or taxing
      authority, including, without limitation, any sales and/or use Taxes due; and
      no
      governmental or taxing authority in any jurisdiction in which either of the
      Companies does not file Tax Returns has asserted that either of the Companies
      are, or may be, subject to Tax in that jurisdiction. There are no matters under
      discussion
      with any Tax Authority, or known to either of the Companies, with respect to
      Taxes that are likely to result in an additional liability for Taxes with
      respect to either of the Companies. The Companies have delivered or made
      available to Buyer complete and accurate copies of federal, state and local
      income Tax Returns of the Companies and its predecessors, if any, for the years
      ended December 31, 2001, 2002, 2003, 2004 and 2005, and complete and accurate
      copies of all examination reports and statements of deficiencies assessed
      against or agreed to by the Companies or any predecessors since December 31,
      2001, with respect to Taxes of any type. Neither
      the Companies nor any predecessor has waived any statute of limitations in
      respect of Taxes or agreed to any extension of time with respect to a Tax
      assessment or deficiency, nor has any request been made in writing for any
      such
      extension or waiver;

     

    (p) No
      power
      of attorney to deal with Tax matters of the Companies is currently in
      force;

     

    (q) The
      relevant statute of limitations for the assessment or proposal of a deficiency
      against the Companies for Taxes has expired for taxable periods ending prior
      to
      December 31, 2003;

     

    (r) Any
      “nonqualified deferred compensation plan” (within the meaning of Section 409A of
      the Code) to which the Companies are a party has at all times since the
      effective date of Section 409A of the Code complied in form and in operation
      with the requirements of paragraphs (2), (3), and (4) of Section 409A(a) of
      the
      Code. No event has occurred since the effective date of Section 409A of the
      Code
      that would be treated by Section 409A(b) of the Code as a transfer of property
      for purposes of Section 83 of the Code; and

     

    (s) The
      Companies have disclosed on its federal income Tax Returns all positions taken
      therein that could give rise to a substantial understatement of federal income
      Tax within the meaning of Section 6662 of the Code.

     

    
      
        
        

      

      
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    3.30 Insurance.

     

    (a) The
      Companies maintain the general liability, professional liability, product
      liability, fire, casualty, motor vehicle, workers’ compensation, and other types
      of insurance shown on Schedule 3.30(a) of the Disclosure Schedules, which
      insurance is comprised of the types and in the amounts customarily carried
      by
      businesses of similar size in the same industry and which are reasonably
      necessary to adequately insure and protect the assets of the Companies. A list
      of all claims against such insurance since January 1, 2006 that individually
      exceed $5,000 in amount and the outcomes or status of such claims is set forth
      on Schedule 3.29 of the Disclosure Schedules.

     

    (b) The
      Companies maintain life insurance on those persons in the amounts as indicated
      on Schedule 3.30(b) of the Disclosure Schedules. With respect to each of the
      foregoing life insurance policies (i) VTC
      is
      the designated beneficiary and (ii) all premiums are current as of the date
      hereof and there are no premiums due and unpaid as of the date
      hereof.

     

    3.31 Bank
      Accounts.

     

    Schedule 3.31
      of the Disclosure Schedules sets forth (i) the name of each Person with
      whom the
      Companies maintains accounts or safety deposit boxes, (ii) the address where
      each such account or safety deposit box is maintained, and (iii) the names
      of
      all Persons authorized to draw thereon or to have access thereto.

     

    3.32 Powers
      of Attorney.

     

    (a) Neither
      of the Companies has given any irrevocable power of attorney (other than such
      powers of attorney given in the ordinary course of business with respect to
      routine matters or as may be necessary or desirable in connection with the
      consummation of the Contemplated Transactions) to any Person for any purpose
      whatsoever.

     

    (b) Each
      of
      the Members jointly and severally represents and warrants to FAAC that such
      Shareholder has not given any irrevocable power of attorney (other than pursuant
      to Section 2.6 hereof or other than such powers of attorney given in the
      ordinary course of business with respect to routine matters or as may be
      necessary or desirable in connection with the consummation of the Contemplated
      Transactions) to any Person for any purpose whatsoever with respect to the
      Companies.

     

    3.33 No
      Broker.

     

    Except
      for Evergreen Capital LLC (“Evergreen”),
      which
      was retained by the Companies under two separate fee agreements both dated
      April
      6, 2006 (jointly, the “Evergreen
      Agreement”),
      neither the Members nor the Companies (or any of their respective Affiliates,
      directors, officers, employees or agents) has employed or incurred any liability
      to any broker, finder or agent for any brokerage fees, finder’s fees,
      commissions or other amounts with respect to this Agreement or the Contemplated
      Transactions.

     

    3.34 Security
      Clearances. 

     

    To
      the
      Knowledge of the Companies, each of the Companies have the proper procedures
      to
      conduct business of a classified nature up to the level of their current
      clearances. The levels and locations of facility clearances are set forth on
      Schedule 3.34 of the Disclosure Schedules. Schedule 3.34 of the
      Disclosure Schedules identifies as of the Effective Date any employees whose
      security clearance, to the Knowledge of the Companies, has been lost or
      downgraded in the last twenty-four (24) months. Each of the Companies is in
      compliance in all material respects with applicable agency security
      requirements, as appropriate, and has in place proper procedures, practices
      and
      records to maintain security clearances necessary to perform their current
      contracts.

     

    
      
        
        

      

      
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    3.35 No
      Unusual Transactions. 

     

    Except
      as
      expressly contemplated by this Agreement, or as set forth in Schedule 3.35
      of
      the Disclosure Schedules, since December 31, 2005, each of the Companies has
      conducted its business in the ordinary course and in a manner consistent with
      past practice and, without limiting the generality of the foregoing, neither
      of
      the Companies has:

     

    (a) incurred
      or discharged any secured or any unsecured liability or obligation (whether
      accrued, absolute or contingent) other than liabilities and obligations
      disclosed in the December 2005 Balance Sheet or the Estimated Closing Balance
      Sheet and liabilities and obligations incurred since December 31, 2005 in the
      ordinary course of business and in a manner consistent with past
      practices;

     

    (b) waived
      or
      cancelled any claim, account receivable or trade account involving amounts
      in
      excess of $25,000 in the aggregate;

     

    (c) made
      any
      capital expenditures in excess of $25,000 in the aggregate;

     

    (d) sold
      or
      otherwise disposed of or lost any capital asset or used any of its assets other
      than, in each case, for proper corporate purposes and in the ordinary course
      of
      business and in a manner consistent with past practices;

     

    (e) issued
      any options to purchase any shares of its Equity Interests, or sold or otherwise
      disposed of any shares of its Equity Interests or any warrants, rights, bonds,
      debentures, notes or other security;

     

    (f) entered
      into any transaction, contract, agreement, indenture, instrument or commitment
      involving amounts in excess of $25,000 in
      the
      aggregate other than in the ordinary course of business and in a manner
      consistent with past practices or in connection with the Contemplated
      Transactions;

     

    (g) suffered
      any extraordinary losses whether or not covered by insurance;

     

    (h) modified
      its charter, bylaws or capital structure;

     

    (i) redeemed,
      retired, repurchased, purchased, or otherwise acquired its Equity Interests,
      options to purchase such stock, or any of its other corporate
      securities;

     

    (j) suffered
      any material shortage or any material cessation or interruption of inventory
      shipments, supplies or ordinary services;

     

    
      
        
        

      

      
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    (k) entered
      into an employment agreement or made (i) (A) any increase in the rate or change
      in the form of compensation or remuneration payable to or to become payable
      to
      any of its directors or officers, or (B) any increase in the rate or change
      in
      the form of compensation or remuneration payable to or to become payable to
      any
      of its employees, licensors, licensees, franchisors, franchisees, distributors,
      agents, or suppliers, other than such increases or changes in the ordinary
      course of business and consistent with past practices, or (ii) any bonus or
      other incentive payments or arrangements with any of its, directors, officers,
      employees, licensors, licensees, franchisors, franchisees, distributors, agents,
      suppliers, or customers;

     

    (l) removed
      any director or terminated any officer except those directors and officers
      who
      will resign in accordance with Section 7.8;

     

    (m) entered
      into, terminated, cancelled, amended or modified any material contract, other
      than in the ordinary course of business or in connection with the Contemplated
      Transactions;

     

    (n) made
      any
      change in its accounting policies, practices and calculations as utilized in
      the
      preparation of the December 2005 Financial Statements;

     

    (o) voluntarily
      permitted any Person to subject the Membership Interests or the properties
      of the
      Companies to
      any
      additional Lien;

     

    (p) (i)
      made
      any loan or advance to, or (ii) assumed, guaranteed, endorsed or otherwise
      become liable with respect to the liabilities or obligations of, any
      Person;

     

    (q) purchased
      or otherwise acquired any corporate security or other equity interest in any
      Person;

     

    (r) changed
      its pricing, credit, or payment policies;

     

    (s) incurred
      any Indebtedness other than to trade creditors and financial institutions in
      the
      ordinary course of business and in a manner consistent with past
      practices;

     

    (t) except
      as
      otherwise required by Law, entered into, amended, modified, varied, altered,
      or
      otherwise changed any of the Plans;

     

    (u) changed
      its banking arrangements and signatories or granted any powers of
      attorney;

     

    (v) purchased,
      sold, leased, or otherwise disposed of any of its properties or any right,
      title
      or interest therein other than in the ordinary course of business;

     

    (w) failed
      to
      maintain its books in a manner that fairly and accurately reflects its income,
      expenses and liabilities in accordance with applicable accounting standards,
      including, without limitation, GAAP, and using accounting policies, practices
      and calculations applied on a basis consistent with past periods and throughout
      the periods involved;

     

    (x) failed
      to
      maintain in full force and effect insurance policies on all of its properties
      providing coverage and amounts of coverage comparable to the coverage and
      amounts of coverage provided under its policies of insurance as shown on
      Schedule 3.30(a) of the Disclosure Schedules;

     

    
      
        
        

      

      
        52

        
          

        

      

      
        
        

      

    

    

     

    (y) failed
      to
      perform duly and punctually in all material respects all of its contractual
      obligations in accordance with the terms thereof, except where the failure
      to do
      so would not have a Material Adverse Effect as to the Companies;

     

    (z) failed
      to
      maintain and keep its properties in good condition and working order, except
      for
      ordinary wear and tear;

     

    (aa) materially
      modified or changed its business organization or materially and adversely
      modified or changed its relationship with its suppliers, customers and others
      having business relations with it; 

     

    (bb) entered
      into any contract, or agreement, or arrangement of any kind with a Member or
      any
      Affiliate of any Member or the Companies; or modified, amended or expanded
      any
      Related Party Transaction without the prior written consent of FAAC;
      or

     

    (cc) authorized,
      agreed or otherwise committed to any of the foregoing.

     

    3.36 Full
      Disclosure.

     

    Neither
      this Agreement nor any Section, agreement, document or certificate delivered
      pursuant hereto contains any untrue statement of a material fact or omits to
      state a material fact necessary in order to make the statements contained herein
      or therein, in light of the circumstances under which such statements were
      made.
      All documents and other papers delivered by or on behalf of the Members and
      the
      Companies in connection with this Agreement are true, complete and correct
      in
      all material respects.

     

    ARTICLE
      IV

    Representations
      and Warranties of FAAC             

     

    FAAC
      represents and warrants to the Members:

     

    4.1 Organization
      and Power.

     

    (a) FAAC
      is a
      corporation duly organized, validly existing and in good standing under the
      laws
      of Delaware and has full corporate power and authority to execute and deliver
      this Agreement, to perform its obligations hereunder and to consummate the
      Contemplated Transactions.

     

    (b) FAAC
      has
      all requisite corporate power to own or lease and operate its
      properties.

     

    
      
        
        

      

      
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    4.2 Authorization
      and Enforceability.

     

    FAAC’s
      Board of Directors has duly authorized and approved the execution and delivery
      of this Agreement and, subject to the approval of FAAC’s shareholders, the
      execution and delivery of the other Transaction Documents and the consummation
      of the Contemplated Transactions. As
      of the
      Closing Date (a) FAAC will have duly authorized the execution and delivery
      of
      and the performance of its obligations under the Transaction Documents and
      (b)
      the Transaction Documents will constitute the legal, valid and binding
      obligation of FAAC and shall be enforceable against FAAC in accordance with
      its
      and their terms, respectively, subject to bankruptcy, insolvency, reorganization
      and other laws of general applicability relating to or affecting creditors’
rights and to general equity principles.

     

    4.3 No
      Violation.

     

    None
      of
      the execution, delivery or performance of this Agreement or any of the other
      Transaction Documents by FAAC and the consummation of the Contemplated
      Transactions will:

     

    (a) conflict
      with or violate any provision of the certificate of incorporation, any bylaw
      or
      any corporate charter or document of FAAC;

     

    (b) result
      in
      the creation of, or require the creation of, any Lien upon any (i) shares
      of shares of stock of FAAC or (ii) property of FAAC;

     

    (c) result
      in
      (i) the termination, cancellation, modification, amendment, violation, or
      renegotiation of any contract, agreement, indenture, instrument, or commitment
      pertaining to the business of FAAC, or (ii) the acceleration or forfeiture
      of any term of payment;

     

    (d) give
      any
      Person the right to (i) terminate, cancel, modify, amend, vary, or
      renegotiate any contract, agreement, indenture, instrument, or commitment
      pertaining to the business of FAAC, or (ii) to accelerate or forfeit any
      term of payment; or

     

    (e) violate
      any Law applicable to FAAC or by which its properties are bound or
      affected.

     

    4.4 Consents.

     

    None
      of
      the execution, delivery or performance of this Agreement by FAAC, nor
      consummation of the Contemplated Transactions or compliance with the terms
      of
      the Transaction Documents will require (a) the consent or approval under any
      agreement or instrument or (b) FAAC to obtain the approval or consent of, or
      make any declaration, filing (other than administrative filings with Taxing
      Authorities, foreign companies registries and the like) or registration with,
      any Governmental Authority.

     

    
      
        
        

      

      
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    4.5 Authorization
      of Stock Consideration. 

     

    The
      shares of FAAC common stock to be issued pursuant to Section 2.2 to the Members
      as Stock Consideration, when issued sold and delivered at Closing in accordance
      with the terms of this Agreement, will (a) be duly authorized, validly issued,
      fully paid and nonassessable, (b) not be subject to preemptive rights created
      by
      statute, FAAC’s certificate of incorporation or bylaws or any agreement to which
      FAAC is a party or by which FAAC is bound and (c) be free of restrictions on
      transfer or Liens, other than restrictions on transfer under applicable state
      and federal securities laws or restrictions or Liens imposed thereon by the
      Members after the Closing.

    

    4.6 Capitalization. 

     

    The
      authorized capital stock of FAAC consists, and as of Closing will consist,
      of
      50,000,000 shares of common stock and 1,000,000 shares of preferred stock,
      par
      value $0.0001 per share, of which, (a) 9,550,000 shares of FAAC’s common stock
      were issued and outstanding as of May 1, 2006, all of which were duly
      authorized, validly issued, fully paid and nonassessable, (b) no shares of
      FAAC
      common stock were held in the treasury of FAAC, and (c) no shares of FAAC’s
      preferred stock were outstanding. As of the Effective Date hereof, and as of
      Closing, except as described in this Section or on Schedule 4.6, (a) there
      are
      no outstanding (i) shares of capital stock or other voting securities of FAAC,
      (ii) securities of FAAC convertible into or exchangeable for shares of capital
      stock or voting securities of FAAC, (iii) options or other rights to acquire
      from FAAC, or obligations of FAAC to issue, any capital stock, voting securities
      or securities convertible into or exchangeable for capital stock or voting
      securities of FAAC, and (iv) equity equivalents, interests in the ownership
      or
      earnings of FAAC or other similar rights (collectively “FAAC
      Securities”),
      and
      (b) there are no outstanding obligations of FAAC to repurchase, redeem or
      otherwise acquire any FAAC Securities.

    

    4.7 Public
      Disclosure Documents. 

     

    (a) FAAC
      has
      timely filed with, or furnished to, the SEC each form, proxy statement or report
      required to be filed with, or furnished to, the SEC by FAAC pursuant to the
      Exchange Act (collectively, with FAAC’s prospectus filed with the SEC on July
      13, 2005, as amended to date, the “Public
      Disclosure Documents”).
      The
      Public Disclosure Documents, as amended prior to the date hereof, complied,
      as
      of the date of their filing with the SEC, as to form in all material respects
      with the requirements of the Exchange Act and Securities Act, as applicable.
      The
      information contained or incorporated by reference in the Public Disclosure
      Documents was true, complete and correct in all material respects as of the
      respective dates of the filing thereof with the SEC; and, as of such respective
      dates, the Public Disclosure Documents did not contain any untrue statement
      of a
      material fact or omit to state a material fact required to be stated therein
      or
      necessary to make the statements therein, in light of the circumstances under
      which they were made, not misleading. 

     

    (b) The
      financial statements of FAAC included in the Public Disclosure Documents have
      been prepared in accordance with the published rules and regulations of the
      SEC
      and in conformity with GAAP applied on a consistent basis throughout the periods
      indicated therein, except as may be indicated therein or in the notes thereto,
      and presented fairly, in all material respects, the consolidated financial
      position of FAAC as of the dates indicated, and the consolidated results of
      the
      operations and cash flows of FAAC for the periods therein specified (except
      in
      the case of quarterly financial statements for the absence of footnote
      disclosure and subject, in the case of interim periods, to normal year-end
      adjustments). 

     

    
      
        
        

      

      
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    4.8 Litigation. 

     

    There
      is
      no action, suit, proceeding, arbitration, claim, investigation or inquiry
      pending or, to FAAC’s Knowledge, threatened by or before any governmental body
      or other forum against the FAAC that (i) would reasonably be expected to
      have a Material Adverse Effect as to FAAC,
      (ii)
      that questions the validity of this Agreement or (iii) that seeks to prohibit,
      enjoin or otherwise challenge the Contemplated Transactions.

    

    4.9 Brokers.

     

    FAAC
      has
      not entered into any contract or other understanding with any Person, which
      may
      result in the obligation of FAAC to pay any finder’s fee, commission or other
      like payment in connection with this Agreement and the Contemplated
      Transactions.

     

    4.10 Full
      Disclosure.

     

    Neither
      this Agreement nor any Section, agreement, document or certificate delivered
      pursuant hereto contains any untrue statement of a material fact or omits to
      state a material fact necessary in order to make the statements contained herein
      or therein, in light of the circumstances under which such statements were
      made.
      All documents and other papers delivered by or on behalf of the FAAC in
      connection with this Agreement are true, complete and correct in all material
      respects.

     

     

    ARTICLE
      V

    Covenants 

    5.1 Conduct
      of the Companies.

     

    Except
      as
      contemplated by this Agreement, during the period from the Effective Date to
      the
      Closing Date, the Members will cause the Companies to conduct their business
      and
      operations in the ordinary course and, to the extent consistent therewith,
      to
      use reasonable efforts to preserve their respective current relationships with
      customers, employees, suppliers and others having business dealings with them.
      Accordingly, and without limiting the generality of the foregoing, during the
      period from the date of this Agreement to the Closing Date, without the prior
      written consent of FAAC, neither the Companies or the Members will take, and
      the
      Members will not permit the Companies to take, any action that would cause
      the
      representations set forth in Section 3.35 not to be true as of the Closing
      Date,
      except as expressly contemplated by this Agreement.

     

    
      
        
        

      

      
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    5.2 Access
      to Information Prior to the Closing; Confidentiality.

     

    (a) During
      the period from the Effective Date through the Closing Date, the Members will
      cause the Companies to give FAAC and its authorized representatives reasonable
      access during regular business hours to all offices, facilities, books and
      records of the Companies as FAAC may reasonably request; provided,
      however,
      that
      (i) FAAC and its representatives shall take such action as is deemed necessary
      in the reasonable judgment of the Members to schedule such access and visits
      through a designated officer(s) of the Companies and in such a way as to avoid
      disrupting the normal business of the Companies, (ii) the Companies shall not
      be
      required to take any action that would constitute a waiver of the
      attorney-client or other privilege and (iii) the Companies need not supply
      FAAC
      with any information that, in the reasonable judgment of the
      applicable Company is
      under
      a contractual or legal obligation not to supply, including, without limitation,
      as a result of any governmental or defense industrial security clearance
      requirement or program requirements of any Governmental Authority prohibiting
      certain persons from sharing information; provided,
      however,
      each of
      the Companies and the Members will use their respective reasonable efforts
      to
      enable FAAC to receive such information.

     

    (b) FAAC
      will
      hold and will cause its employees, agents, affiliates, consultants,
      representatives and advisors to hold any information that it or they receive
      in
      connection with the activities and transactions contemplated by this Agreement
      in strict confidence in accordance with and subject to the terms of the
      Confidentiality Agreement dated as of January 16, 2006 between FAAC, the
      Members and the Companies (the “Confidentiality
      Agreement”).

     

    5.3 Best
      Efforts.

     

    Subject
      to the terms and conditions of this Agreement, each of the parties hereto will
      use its best efforts to take, or cause to be taken, all actions, and to do,
      or
      cause to be done, all things necessary, proper or advisable under applicable
      laws and regulations to consummate the transactions contemplated by this
      Agreement at the earliest practicable date. 

     

    5.4 Consents.

     

    Without
      limiting the generality of Section 5.3 hereof, each of the parties hereto will
      use its best efforts to obtain all licenses, permits, authorizations, consents
      and approvals of all third parties and governmental authorities necessary in
      connection with the consummation of the transactions contemplated by this
      Agreement prior to the Closing. Each of the parties hereto will make or cause
      to
      be made all filings and submissions under laws and regulations applicable to
      it
      as may be required for the consummation of the transactions contemplated by
      this
      Agreement. FAAC, the Members and the
      Companies will
      coordinate and cooperate with each other in exchanging such information and
      assistance as any of the parties hereto may reasonably request in connection
      with the foregoing.

     

    5.5 Access
      to Books and Records Following the Closing.

     

    Following
      the Closing, FAAC shall permit the Members and their authorized representatives,
      during normal business hours and upon reasonable notice, to have reasonable
      access to, and examine and make copies of, all books and records of the
      Companies and/or FAAC that relate to transactions or events occurring prior
      to
      the Closing or transactions or events occurring subsequent to the Closing that
      are related to or arise out of transactions or events occurring prior to the
      Closing; provided,
      however,
      (a)
      that the Members and their representatives shall take such action as is deemed
      necessary in the reasonable judgment of FAAC and the Companies to schedule
      such
      access and visits through a designated officer of the
      Companies and
      in
      such a way as to avoid disrupting the normal business of FAAC and/or the
      Companies, (b) neither FAAC nor the Companies shall be required to take any
      action that would constitute a waiver of the attorney-client or other privilege
      and (c) neither FAAC nor the Companies need supply the Members, or their
      representatives, with any information which, in the reasonable judgment of
      FAAC
      or the Companies (as the case may be) is under a contractual or legal obligation
      not to supply, including, without limitation, as a result of any governmental
      or
      defense industrial security clearance requirement or program requirements of
      any
      Governmental Authority prohibiting certain persons from sharing information.
      FAAC agrees that it shall retain and shall cause the Companies to retain all
      such books and records for a period of seven years following the Closing, or
      for
      such longer period following the Closing as may be required by applicable
      Law.

     

    
      
        
        

      

      
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    5.6 Members’
      Post-Closing Confidentiality Obligation.

     

    Following
      the Closing, except as otherwise expressly provided in this Agreement or in
      other agreements delivered in connection herewith, the Members shall, and shall
      cause their respective Affiliates, officers agents and representatives, as
      applicable to, (a) maintain the confidentiality of, (b) not use, and (c) not
      divulge, to any Person any confidential or proprietary information of the
      Companies, except with the prior written consent of FAAC or to the extent that
      such information is required to be divulged by legal process, except as may
      reasonably be necessary in connection with the performance of any
      indemnification obligations under this Agreement or except as may be required
      by
      Law; provided,
      however,
      that
      the foregoing limitations shall not apply to information that (i) otherwise
      becomes lawfully available to the Members, or their respective Affiliates,
      officers agents and representatives after the Closing Date on a nonconfidential
      basis from a third party who is not under an obligation of confidentiality
      to
      FAAC or the Companies or (ii) is or becomes generally available to the public
      without breach of this Agreement by the Members, or their respective Affiliates,
      officers agents and representatives.

     

    5.7 Expenses. 

     

    (a) Except
      as
      otherwise provided in this Section 5.7, each of the parties shall bear its
      own
      expenses related to the Contemplated Transactions. Notwithstanding the
      foregoing, all compensation due Evergreen and other third-party costs of the
      Members or the Companies with respect to the Contemplated Transactions and
      other
      the amounts referred to on Schedule 5.7 of the Disclosure Schedules, including,
      but not limited to all payments under the Phantom Membership Interest Plan
      due
      at Closing and otherwise to terminate the Phantom Membership Interest Plan
      (collectively, the “Members’
      Transaction Costs”)
      shall
      be the responsibility of the Members and, to the extent payable at Closing,
      and
      not otherwise paid by the Members, shall be paid at Closing in accordance with
      Section 5.8(a).

     

    (b) Notwithstanding
      the foregoing, the obligation to pay Taxes shall be allocated pursuant to
      Section 5.11 rather than this Section 5.7.

     

    
      
        
        

      

      
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    5.8 Certain
      Closing Payments.

     

    (a) The
      Members shall be obligated to repay all Indebtedness of the Companies as of
      the
      Closing (other than the Assumed Debt). In connection with the Closing, FAAC
      shall repay out of the Cash Consideration, on behalf of the Members, (i) all
      Indebtedness of the Companies remaining outstanding (other than the Assumed
      Debt), and (ii) all Members’ Transaction Costs. To the extent the amount of any
      such payment can be determined, and paid, at or prior to the Closing, then
      a
      downward adjustment shall be made in the Cash Consideration paid at Closing
      equal to such amount. In the event any such payment cannot be determined or
      paid
      at or prior to Closing, then (i) the parties to the Escrow Agreements shall
      instruct the Escrow Agent to pay any such amount (from the Balance Sheet Escrow
      to the extent of any Balance Sheet Escrow Property and then from the General
      Indemnity Escrow) to FAAC within three (3) Business Days of determination (which
      may be through delivery of an invoice) and (ii) the Members hereby agree and
      covenant that they shall be jointly and severally responsible for and shall
      immediately deposit in the General Indemnity Escrow cash in the amount of the
      distributions made from the Escrowed Property to cover costs the Members are
      responsible for under this Section 5.8.

     

    (b) It
      is the
      intent of the parties that all Members shall be deemed to have repaid any and
      all loans outstanding and owing by any of the Members to the
      Companies as of the Closing Date. Notwithstanding anything in this Agreement
      to
      the contrary, the Members’ Representative shall be permitted to make, or direct,
      non-pro rata distributions of the Cash Consideration to the Members in order
      to
      account for any such deemed repayments.

     

    (c) The
      Members hereby instruct FAAC and FAAC hereby agrees that 67,825 shares of FAAC
      common stock (the “Evergreen
      Stock Payment Amount”)
      otherwise payable to Gallagher and Rosato pursuant to Section 2.2(d) above,
      shall be issued, on Rosato’s and Gallagher’s behalf, to Evergreen, or such other
      recipients as may be identified in writing by Evergreen on or before the Closing
      Date as partial payment of the fees due Evergreen under the Evergreen Agreement
      (the “Evergreen
      Stock Payment”).
      

     

    (i) As
      a
      condition to receiving the Evergreen Stock Payment, Evergreen and any other
      recipients identified by Evergreen, shall be required to sign a Lock Up
      Agreement and Acquisition Agreement in the form attached hereto as Exhibit
      K.
      

     

    (ii) The
      shares of FAAC’s common stock to be issued pursuant to this Agreement as the
      Evergreen Stock Payment (A) have not been, and will not be at the time of
      issuance, registered under the Securities Act, and will be issued in a
      transaction that is exempt from the registration requirements of the Securities
      Act and (B) will be “restricted securities” under the federal securities laws
      and cannot be offered or resold except pursuant to registration under the
      Securities Act or an available exemption from registration. All certificates
      evidencing the Stock Consideration and Earn Out Consideration shall bear, in
      addition to any other legends required under applicable securities laws, the
      following legend: 

     

    “THE
      SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE
      TRANSFERRED EXCEPT PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT OR PURSUANT
      TO AN AVAILABLE EXEMPTION FROM REGISTRATION.” 

     

    
      
        
        

      

      
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    5.9 No
      Solicitation of Competitive Transactions.

     

    From
      the
      date of this Agreement until the Closing, or, if earlier, the termination of
      this Agreement in accordance with its terms, each of the Companies and each
      of
      the Members agrees that they will not, directly or indirectly, through any
      officer, director, employee, representative or agent or any of their affiliates,
      (i) solicit, initiate, entertain or encourage any inquiries or proposals that
      constitute, or could lead to, a proposal or offer for a merger, consolidation,
      business combination, recapitalization, sale of substantial assets, sale of
      a
      substantial percentage of shares of capital stock (including, without
      limitation, by way of a public offering or private placement), joint venture
      or
      similar transactions involving the Companies or any of its subsidiaries, other
      than a transaction with FAAC and/or its affiliates (any of the foregoing
      inquiries or proposals being referred to herein as an “Acquisition
      Proposal”),
      (ii)
      engage in negotiations or discussions concerning, or provide any non-public
      information to any person or entity relating to, any Acquisition Proposal,
      or
      (iii) agree to, approve or recommend any Acquisition Proposal. The Members
      will
      notify FAAC immediately (and not later than twenty-four (24) hours) after
      receipt of any Acquisition Proposal or any request for non-public information
      in
      connection with an Acquisition Proposal or for access to the properties, books
      or records of the Companies by any person or entity that informs the Members
      or
      the Companies that it is considering making or has made an Acquisition Proposal.
      Such notice shall be made orally (and shall be confirmed in writing) and,
      subject to existing confidentiality, nondisclosure or other similar agreements,
      shall indicate the identity of the party making the proposal and the material
      terms and conditions of such proposal, inquiry or contract. The Members and
      the
      Companies will prevent, as applicable any of their respective directors,
      officers, affiliates, representatives or agents (each a “Representative”)
      from
      taking any action prohibited hereby if taken by the Members or the Companies.
      If
      the Members or either of the Companies learns of any such action taken by a
      Representative, the Member(s) or Companies will immediately advise FAAC and
      provide the information specified herein.

     

    5.10 Personnel.

     

    (a)Except
      as
      otherwise provided in Section 5.10(e), FAAC intends that all Personnel employed
      by the Companies as of the Closing Date, shall have the opportunity to continue
      as an employee of FAAC following the Closing Date. For purposes of this
      Agreement, the Companies’ Personnel as of the Closing Date shall be categorized
      sometimes as (i) the senior executives (consisting of Thomas P. Rosato and
      Gerard J. Gallagher, the “Senior
      Executives”),
      (ii) the “Key
      Employees”
(which
      shall mean and refer to those employees identified by FAAC on a written list
      previously provided to the Companies and Members) and (iii) the “Non-Key
      Employees”
(which
      shall refer to all personnel other than the Senior Executives and the Key
      Personnel).

     

    (b)Simultaneously
      with the execution of this Agreement, each of the Senior Executives shall enter
      into employment agreements with FAAC in the form attached hereto as Exhibits L-1
      and L-2
      (jointly, the “Senior
      Executives Employment Agreements”)
      with
      effectiveness contingent only on Closing.

     

    
      
        
        

      

      
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    (c) Not
      less
      than fifty percent (50%) of the Key Employees shall enter into employment
      agreements with FAAC in the form attached hereto as Exhibit
      M (the
      “Key
      Employee Employment Agreement”)
      with
      effectiveness contingent only upon Closing.

     

    (d) From
      and
      after the Closing Date, the Senior Executives, any Key Employee who signs a
      Key
      Employee Employment Agreement and the Non-Key Employees shall be given (to
      the
      extent he or she elects to participate and it is permitted by Law), credit
      for
      past service with either
      of
      the Companies for
      purposes of participation and vesting in any employee benefit plan offered
      by
      FAAC. 

     

    5.11 Certain
      Tax Matters. 

     

    (a) Purchase
      Price allocation.

     

    The
      Purchase Consideration, as adjusted, and other amounts treated as purchase
      price
      for income tax purposes will be allocated among the assets of the Companies
      shall be mutually agreed to by FAAC and the Members within thirty (30) days
      after the Closing. FAAC, the Companies and the Members shall use this allocation
      to prepare and file Internal Revenue Service Form 8594 and any other tax
      returns, and no party to this Agreement may take any inconsistent position.
      The
      parties to this Agreement shall cooperate in preparing, executing and filing
      with the Internal Revenue Service all necessary information returns required
      by
      Section 1060 of the Code. On or before the 60th
      day
      after the Closing Date, FAAC shall send the Members a draft of Internal Revenue
      Service Form 8594 containing FAAC’s proposed allocation of the Purchase Price
      among the Transferred Assets, defined under Section 1060 of the Tax Code. Within
      10 days after receipt of Form 8594, the Members’ Representative shall notify
      FAAC whether it disagree with the proposed allocation and, if the Members’
Representative disagrees, the parties to this Agreement shall make a good faith
      attempt to reach an agreement.

     

    (b) Tax
      Periods Ending on or Before the Closing Date.

     

    The
      Members shall prepare, or cause to be prepared, and file, or cause to be filed,
      on a timely basis (in each case, at their sole cost and expense) and on a basis
      reasonably consistent with past practice, all Tax Returns with respect to the
      Companies for taxable periods ending on or prior to the Closing Date and
      required to be filed thereafter (the “Prior Period Returns”). The Members shall
      provide a draft copy of such Prior Period Returns to FAAC for its review at
      least fifteen (15) Business Days prior to the due date thereof. FAAC shall
      provide its comments to the Members at least five Business Days prior to the
      due
      date of such returns and the Members shall make all changes requested by FAAC
      in
      good faith (unless the Members are advised in writing by the independent outside
      accountants or attorneys that such changes (i) are contrary to applicable Law,
      or (ii) will, or are likely to, have a material adverse effect on the Members
      (provided that the Members agree to make any such changes notwithstanding the
      application of this clause (ii) if the changes are consistent with applicable
      Law and past practices of the Companies)). Except as provided in Section
      5.11(c), and only to the extent such Taxes have not been accrued or otherwise
      reserved for on the Closing Balance Sheets (and specifically reflected in
      Closing Net Working Capital), the Members shall pay, or cause to be paid, all
      Taxes with respect to the Companies shown to be due on such Prior Period
      Returns. In the event that the Members for any reason fail to make the payment
      contemplated in the previous sentence, then FAAC may bring an indemnification
      claim under ARTICLE IX.

     

    
      
        
        

      

      
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    (c) Tax
      Periods Beginning Before and Ending After the Closing Date.
      

     

    (i) FAAC
      shall prepare or cause to be prepared and file or cause to be filed, on a basis
      reasonably consistent with past practice, any Tax Returns of the Companies
      for
      Tax periods that begin before the Closing Date and end after the Closing Date
      (collectively, the “Straddle
      Periods”
      and
      each
      a “Straddle
      Period”).
      FAAC
      shall permit the Members’ Representative to review and comment on each such Tax
      Return described in the preceding sentence prior to filing, and FAAC shall
      make
      all changes reasonably requested by the
      Companies in good faith (unless FAAC is (A) advised in writing by its
      independent outside accountants or attorneys that such changes are contrary
      to
      applicable Law or (B) will, or are likely to, have a material adverse effect
      on
      FAAC or any of its Affiliates (provided that FAAC agrees to make any such
      changes notwithstanding the application of this clause (B) if the changes are
      consistent with applicable Law and past practices of the Companies)). Within
      fifteen (15) days after the date on which FAAC pays any Taxes of the Companies
      with respect to any Straddle Period, the Members shall, to the extent such
      Taxes
      have not been accrued or otherwise reserved for on the Closing Balance Sheets
      (and specifically reflected in the Closing Net Working Capital), pay to FAAC
      the
      amount of such Taxes that relates to the portion of such Straddle Period ending
      on the Closing Date (the “Pre-Closing
      Tax Period”).
      In
      the event that the Members for any reason fail to make the payment contemplated
      in the previous sentence, then FAAC may bring an indemnification claim under
      ARTICLE IX.

     

    (ii) For
      purposes of this Agreement:

     

    (A) In
      the
      case of any gross receipts, income, or similar Taxes that are payable with
      respect to a Straddle Period, the portion of such Taxes allocable to (1) the
      Pre-Closing Tax Period and (2) the portion of the Straddle Period beginning
      on
      the day next succeeding the Closing Date (the “Post-Closing
      Tax Period”)
      shall
      be determined on the basis of a deemed closing at the end of the Closing Date
      of
      the books and records of the Companies.

     

    (B) In
      the
      case of any Taxes (other than gross receipts, income, or similar Taxes) that
      are
      payable with respect to a Straddle Period, the portion of such Taxes allocable
      to the portion of the Straddle Period prior to the Closing Date shall be equal
      to the product of all such Taxes multiplied by a fraction the numerator of
      which
      is the number of days in the Straddle Period from the commencement of the
      Straddle Period through and including the Closing Date and the denominator
      of
      which is the number of days in the entire Straddle Period; provided,
      however,
      that
      appropriate adjustments shall be made to reflect specific events that can be
      identified and specifically allocated as occurring on or prior to the Closing
      Date (in which case the Members shall be responsible for any Taxes related
      thereto) or occurring after the Closing Date (in which case, FAAC shall be
      responsible for any Taxes related thereto).

     

    (ii) FAAC
      shall be responsible for (A) any and all Taxes with respect to the Pre-Closing
      Tax Period of any applicable Straddle Period to (but only to) the extent such
      Taxes have been accrued or otherwise reserved for on the Closing Balance Sheet
      and (B) any Taxes with respect to the Post-Closing Tax Period of the
      Straddle Periods.

     

    
      
        
        

      

      
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    (d) Cooperation
      on Tax Matters.

     

    (i) FAAC
      and
      the Members shall cooperate fully, as and to the extent reasonably requested
      by
      any party, in connection with the filing of Tax Returns pursuant to this Section
      and any audit, litigation, or other proceeding with respect to Taxes. Such
      cooperation shall include the retention and (upon the other party’s request) the
      provision of records and information reasonably relevant to any such audit,
      litigation, or other proceeding and making their respective employees, outside
      consultants and advisors available on a mutually convenient basis to provide
      additional information and explanation of any material provided hereunder.
      FAAC
      and the Members agree (A) to retain all books and records with respect to Tax
      matters pertinent to the Companies relating to any taxable period beginning
      before the Closing Date until the expiration of the statute of limitations
      (and,
      to the extent notified by FAAC or the Members’ Representative, any extensions
      thereof) of the respective taxable periods, and to abide by all record retention
      agreements entered into with any taxing authority, and (B) to give the other
      reasonable written notice prior to transferring, destroying or discarding any
      such books and records and, if the other so requests, FAAC or the Members,
      as
      the case may be, shall allow one of the others to take possession of such books
      and records.

     

    (ii) FAAC
      and
      the Members further agree, upon request, to use their best efforts to obtain
      any
      certificate or other document from any Governmental Authority or any other
      Person as may be necessary to mitigate, reduce or eliminate any Tax that could
      be imposed (including, but not limited to, with respect to the transactions
      contemplated hereby).

     

    (iii) FAAC
      and
      the Members further agree, upon request, to provide the other party with all
      information that either party may be required to report pursuant to Section
      6043
      of the Code and all Treasury Department Regulations promulgated
      thereunder.

     

    (e) Certain
      Taxes.
      All
      transfer, documentary, sales, use, stamp, registration and other such Taxes
      and
      fees (including any penalties and interest) incurred in connection with the
      Contemplated Transactions (including any transfer or similar tax imposed by
      any
      governmental authority) shall be shared equally between FAAC on the one hand
      and
      the Members on the other, and each shall be responsible for one-half of such
      Taxes. The party required by Law to do so will file all necessary Tax Returns
      and other documentation with respect to all such transfer, documentary, sales,
      use, stamp, registration and other Taxes and fees, and, if required by
      applicable Law, the other parties will join in the execution of any such Tax
      Returns and other documentation.

     

    (f) Indemnification
      and Tax Contests.
      FAAC’s
      and the Members’ indemnification obligations with respect to the covenants in
      this Section 5.11 together with the procedures to be observed in connection
      with
      any Tax Contest shall be governed by ARTICLE IX.

     

    
      
        
        

      

      
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    5.12 Public
      Announcements.

     

    None
      of
      FAAC, the Companies or the Members, will issue any press release or make any
      public statement with respect to this Agreement or the Contemplated
      Transactions, or disclose the existence of this Agreement to any Person or
      entity, prior to the Closing and, after the Closing, will not issue any such
      press release or make any such public statement without the prior consent of
      the
      other parties (which consent shall not be unreasonably withheld or delayed),
      subject to any applicable disclosure obligations pursuant to Applicable Law
      provided that if FAAC proposes to issue any press release or similar public
      announcement or communication in compliance with any such disclosure obligations
      and related to the Contemplated Transactions, FAAC shall use commercially
      reasonable efforts to consult in good faith with the Members’ Representative
      before doing so.

     

    5.13 Communications
      with Customers and Suppliers.

     

    The
      Members’ Representative and FAAC will mutually agree upon all communications
      with suppliers and customers of the
      Companies relating
      to this Agreement and the Contemplated Transactions prior to the Closing
      Date.

     

    5.14 Evergreen
      Agreement.

     

    All
      compensation due Evergreen with respect to the Contemplated Transactions
      (collectively, the “Evergreen
      Fees”),
      whether under the Evergreen Agreement or otherwise, is the Members’
responsibility. The Members’ shall deliver to FAAC at the Closing a release
      signed by Evergreen and in form reasonably satisfactory to FAAC (the
“Evergreen
      Release”)
      confirming that the Evergreen Fees have been paid in full and releasing the
      Companies and FAAC from all liability with respect to the Evergreen Agreement.
      The Members hereby agree to indemnify and hold FAAC harmless from and against
      any indemnification claims brought by Evergreen (or any person or entity
      bringing an indemnification claim through Evergreen) under or with respect
      to
      the Evergreen Agreement.

     

    5.15 Covenants
      Regarding Management of FAAC. 

     

    (a) Amended
      and Restated Bylaws; Senior Management as of Closing.
      As of
      the Closing Date (i) FAAC’s Bylaws shall be amended and restated to expand the
      Board of Directors to nine (9) directors
      serving three-year staggered terms and (ii) the following people shall have
      been
      appointed to the various senior management positions in FAAC indicated to the
      right of their name:

     

    
      	 	
              Harvey
                L. Weiss 

            	
              Chairman
                of the Board of Directors

            
	 	
              C.
                Thomas McMillen

            	
              Vice
                Chairman of the Board of Directors

            
	 	
              Thomas
                P. Rosato

            	
              Chief
                Executive Officer

            
	 	
              Gerard
                J. Gallagher 

            	
              President/Chief
                Operating Officer

            

    

    
      
        
        

      

      
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    (b) Voting
      Agreement.
      At
      Closing, the Members agree to sign a Voting Agreement in the form attached
      hereto as Exhibit
      N
      under
      the terms of which the Members, C. Thomas McMillen and Harvey L. Weiss agree
      (through the date of FAAC’s 2008 annual Shareholders meeting) to vote their
      respective shares so as to:

     

    (i) to
      keep
      in place the following individuals in the various management positions
      referenced in Section 5.15(a) above; and

     

    (ii) to
      support the nomination of and to vote their shares for the appointment of
      certain directors as described in the Voting Agreement.

     

    Notwithstanding
      anything to the contrary, contained in this Agreement or the Voting Agreement,
      the Members acknowledge that decisions with respect to who shall serve as a
      director of FAAC are subject to the vote of all shareholders and that the
      appointment of officers is reserved to directors of the corporation exercising
      their fiduciary responsibility and business judgment and that the Voting
      Agreement does not guarantee or ensure that the positions for which the shares
      are to be voted under the Voting Agreement will prevail.

     

    (c) Equity
      Incentive Plan.
      Following
      the Closing, FAAC will establish an equity incentive plan that will provide
      for
      the issuance of equity rights to key employees of FAAC and the Companies
      representing 12% of the FAAC issued and outstanding common stock, computed
      on a
      fully-diluted basis together with the Employee Stock Grants.

     

    5.16 Welfare
      Plans

     

    (a) The
      Estimated Closing Balance Sheet will reflect a reserve, estimated on the basis
      of past experience and experience through the Closing Date, which will reflect
      the estimated cost of the Companies’ self-insurance under the Self Insured Plans
      through the Closing Date. The Companies will fully disclose to FAAC the basis
      of
      the computation of the reserves for the Self Insured Plans reflected in the
      Estimated Closing Balance Sheet. The Companies are in the process of replacing
      the Self Insured Plans with fully insured plans. In connection with this
      replacement, the Companies will be required to purchase an insurance “tail” for
      run-off liability. The Members shall jointly and severally indemnify FAAC,
      subject to the limitations set forth in ARTICLE IX on the indemnification
      obligations of the Members, for the amount of medical claims and related
      administrative costs arising in respect of the run-off period to the extent
      they
      exceed accrued reserves therefor as of the Closing Date and are not covered
      by
      the “tail” or “stop loss” insurance.

     

    (b) Each
      of
      the Companies shall cease to be a participating employer under the Plans
      sponsored by Chesapeake Tower Systems, Inc. or an Affiliate as of the Closing
      Date and, prior to the Closing, shall provide Purchaser with written
      documentation thereof satisfactory to Purchaser.

     

    
      
        
        

      

      
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    5.17 Cooperation
      in Connection with Proxy Materials. 

     

    The
      Companies and the Members will, and will cause their respective Representatives
      to fully cooperate with FAAC in connection with the preparation of proxy
      materials, to be filed with the SEC and mailed to the shareholders of FAAC
      seeking approval of the Contemplated Transactions by the FAAC shareholders
      (such
      proxy materials, in the form mailed to the FAAC shareholders, the “Proxy
      Materials”).
      Without limiting the generality of the foregoing, the
      Companies and the Members shall cause the Companies (a) to provide, as soon
      as
      reasonably possible after the Effective Date all information required to be
      disclosed under Item 7 of Form S-4 under the Securities Act in a form that
      is
      customarily included in proxy statements (the “Companies’
      Information”)
      and
      (b) to promptly review the Proxy Material when provided by FAAC. The Members
      represent and warrant that the Companies’ Information shall not contain any
      untrue statement of material fact or omit a material fact necessary to make
      the
      statements in the Companies’ Information not misleading. Further, the
      Companies will
      cause McGladrey & Pullen LLP to deliver to FAAC, as of the date of the Proxy
      Materials and at the expense of FAAC, letters, addressed to FAAC, in form and
      substance satisfactory to FAAC and consistent with SAS No. 72, containing
      statements and information of the type customarily included in auditors’
“comfort letters” with respect to the audited financial statements, unaudited
      interim financial statements, unaudited pro forma financial information and
      other financial information of the
      Companies included
      in the Proxy Materials.

     

    5.18 Continuing
      Related Party Transactions.

     

    (a) To
      the
      extent that any Continuing Related Party Transactions are modified, amended,
      or
      expanded in any fashion, (including, but not limited to the award of new
      business by either VTC or Vortech) after the Closing, all such modifications,
      amendments, or expansions shall be expressly contingent upon the prior written
      approval of the independent members of the FAAC Board of Directors.

     

    (b) Prior
      to
      the Closing (i) the lease commitment between VTC and TPR Realty Group III L.L.C.
      to lease office space for a new corporate headquarters for VTC in Columbia,
      Maryland (the “VTC
      Lease Commitment”)
      shall
      be reduced to a Deed of Lease (the “New
      VTC Lease”)
      in
      form satisfactory to FAAC in its sole discretion and (ii) the Members shall
      cause to be obtained from a real estate appraiser an appraisal (the
“VTC
      Lease Appraisal”)
      indicating that the economic terms of the New VTC Lease are at or below the
      “market terms” (the appraiser and the VTC Lease Appraisal to be acceptable to
      FAAC, in its sole discretion). If for any reason (i) the VTC Lease Commitment
      is
      not reduced to a Deed of Lease acceptable to FAAC in its sole discretion, or
      (ii) the Members are unable to produce, prior to Closing, a VTC Lease Appraisal
      acceptable to FAAC; then the VTC Lease Commitment and New VTC Lease shall be
      terminated prior to Closing.

     

    (c) The
      following Continuing Related Party Transactions shall be terminated on or before
      the dates specified below:

     

    (i) As
      soon
      as possible, but in all events, no later than March 31, 2007, Rosato will cease
      to own any interest of any kind in Chesapeake Tower Systems, Inc. If for any
      reason Rosato continues to own any interest in Chesapeake Tower Systems, Inc.
      after March 31, 2007, any and all contracts between the Companies and Chesapeake
      Tower Systems, Inc. shall be terminable at will by FAAC, or the Companies
      without penalty, fee, or damages of any kind or nature.

     

    
      
        
        

      

      
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    (ii) 
      As soon
      as possible, but in all events, no later than December 31, 2007, Rosato will
      cease to own any interest of any kind in L.H. Cranston Acquisition Group, Inc.
      If for any reason Rosato continues to own any interest in L.H. Cranston
      Acquisition Group, Inc. after December 31, 2007, any and all contracts between
      the Companies and L.H. Cranston Acquisition Group, Inc. shall be terminable
      at
      will by FAAC, or the Companies without penalty, fee, or damages of any kind
      or
      nature.

     

    (iii) As
      soon
      as possible, but in all events, no later than March 31, 2007, Rosato will cease
      to own any interest of any kind in Telco Power and Cable LLC. If for any reason
      Rosato continues to own any interest in Telco Power and Cable LLC after March
      31, 2007, any and all contracts between the Companies and Telco Power and Cable
      LLC shall be terminable at will by FAAC, or the Companies without penalty,
      fee,
      or damages of any kind or nature.

     

    (d) The
      Members shall jointly and severally indemnify FAAC for any and all liability,
      of
      any kind or nature related to any Continuing Related Party Transactions that
      (i)
      do not conform in all respect to the requirements of Section 5.18(a) or (ii)
      that are terminated on or before the time provided and otherwise pursuant to
      Section 5.18(c). 

     

    (e) The
      Members shall jointly and severally indemnify FAAC for any and all liability,
      of
      any kind and nature, under or with respect to that certain Corporate Guaranty
      of
      Lease dated October 26, 2004 by which Vortech Consulting, L.L.C. guaranteed
      the
      obligations of S3 Integration, L.L.C. under the terms of a Lease dated October
      25, 2004 by and between S3 Integration, L.L.C. and MIE Properties Inc., as
      amended by a First Amendment dated August 22, 2005.

     

    5.19 Update
      of Disclosure Schedules.

     

    The
      Members and the Companies may, at their option, but no later than three (3)
      Business Days prior to the Closing, deliver to FAAC the Disclosure Schedules
      updated to the date of Closing (the “Updated
      Disclosure Schedules”).
      Any
      Updated Disclosure Schedules shall be prepared in a manner such that the Updated
      Disclosure Schedules clearly indicate differences between the Disclosure
      Schedules as delivered on the Effective Date and the Updated Disclosure
      Schedules. To the extent that that there are Disclosure Schedule Update Losses,
      the FAAC Indemnitees shall be entitled to indemnification pursuant to Section
      9.2, subject to the limitations of Section 9.2(f). 

     

    5.20 Threatened
      Litigation.

     

    As
      disclosed on Schedule 5.25 of the Disclosure Schedules the Members and either
      or
      both of the Companies have been threatened with litigation by Signia Solutions,
      Inc. and/or Martin C. Licht (the “Signia Threatened Litigation”). The Members
      shall jointly and severally indemnify FAAC for any and all liability, of any
      kind or nature related to the Signia Threatened Litigation (the forgoing
      indemnification to be deemed to be and treated as an Uncapped and Non-Threshold
      Indemnification for purposes of Section 9.2(f).

     

    
      
        
        

      

      
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    ARTICLE
      VI

    Deliveries
      by All Parties at Closing  

     

    6.1 Conditions
      to All Parties Obligations.

     

    The
      obligations of the parties to consummate the Contemplated Transactions are
      subject to the fulfillment prior to or at the Closing of each of the following
      conditions (any or all of which may be waived by the parties):

     

    (a) Injunctions.
      There
      shall be no order or injunction of a foreign or United States federal or state
      court or other Governmental Authority of competent jurisdiction in effect
      precluding, restraining, enjoining or prohibiting consummation of the
      Contemplated Transactions or otherwise materially limiting or restricting
      ownership or the operation of the Acquired Business;

     

    (b) Statutes;
      Consents.
      No
      statute, rule, order, decree or regulation shall have been enacted or
      promulgated after the date hereof by any Governmental Authority of competent
      jurisdiction which prohibits the consummation of the Contemplated Transactions
      or otherwise materially limits or restricts ownership or operation of the
      business of the Companies and all foreign or domestic governmental consents,
      orders and approvals required for the consummation of the Contemplated
      Transactions as set forth on Schedule 6.1(b) of the Disclosure Schedules, shall
      have been obtained and shall be in effect at the Closing and shall not
      materially limit or restrict ownership or the operation of the business of
      the
      Companies;

     

    (c) Escrow
      Agreements.
      Each of
      the parties hereto, together with the Escrow Agent, shall have entered into
      the
      Escrow Agreements; and

     

    (d) Litigation.
      No
      litigation regarding this Agreement or the Contemplated Transactions shall
      have
      commenced or be pending or threatened.

     

    6.2 Conditions
      to the Members Obligations.

     

    The
      obligations of the Members to consummate the Contemplated Transactions are
      subject to the fulfillment at or prior to the Closing of each of the following
      conditions (any or all of which may be waived in whole or in part by the
      Members’ Representative).

     

    (a) Representations
      and Warranties.
      The
      representations and warranties of FAAC in this Agreement shall be true and
      correct in all material respects as of the date when made and at and as of
      the
      Closing Date as though such representations and warranties were made at and
      as
      of the Closing Date, except for changes permitted under or contemplated by
      this
      Agreement.

     

    (b) Performance.
      FAAC
      shall have performed and complied with all agreements, obligations, covenants
      and conditions required by this Agreement to be so performed or complied with
      by
      FAAC at or prior to the Closing.

     

    (c) Deliveries.
      The
      Members shall have received the deliveries contemplated by ARTICLE
      VIII.

     

    
      
        
        

      

      
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    6.3 Conditions
      to FAAC’s Obligations.

     

    The
      obligations of FAAC to consummate the Contemplated Transactions are subject
      to
      the fulfillment at or prior to the Closing of each of the following conditions
      (any or all of which may be waived in whole or in part by FAAC).

     

    (a) Representations
      and Warranties.
      The
      representations and warranties of the Members and the Companies in this
      Agreement shall be true and correct in all material respects as of the date
      when
      made and at and as of the Closing Date as though such representations and
      warranties were made at and as of the Closing Date, except for those
      representations and warranties which address matters only as of a particular
      date (which will be true and correct in all material respects only as of such
      date), and except for changes permitted under or contemplated by this
      Agreement.

     

    (b) Performance.
      The
      Members and the Companies shall have performed and complied with all agreements,
      obligations, covenants and conditions required by this Agreement to be so
      performed or complied with by the Members and the Companies at or prior to
      the
      Closing.

     

    (c) No
      Material Adverse Effect.
      From
      December 31, 2005 until the Closing Date, there shall have been no Material
      Adverse Effect, or the occurrence of an event that has resulted or can
      reasonably be expected to result in such a change, in the business, operations,
      properties, contracts, customer relations or condition, financial or otherwise,
      of either or both of the Companies, other than changes expressly permitted
      under
      or contemplated by this Agreement.

     

    (d) Deliveries.
      FAAC
      shall have received the deliveries contemplated by
      ARTICLE VII.

     

    (e) Matters
      Referred to in Disclosure Schedules.
      All
      matters, if any, referred to in the Disclosure Schedules as being taken, in
      process, or intended to be taken shall have been completed to the reasonable
      satisfaction of FAAC.

     

    (f) Approval
      by FAAC Shareholders.  Approval
      of the Contemplated Transactions by the FAAC shareholders.

     

    (g) Phantom
      Membership Interest Plan.
      The
      Phantom Membership Interest Plan is terminated and Phantom Membership Interest
      Releases for every participant in the Phantom Membership Interest Plan shall
      have been executed and delivered to FAAC.

     

    (h) Certain
      Indebtedness.
      All
      Indebtedness of the Companies and their Subsidiaries (including, but not limited
      to, Indebtedness owed by any one or more of the Companies to officers and
      directors of the Companies), and all Indebtedness owed by any officers and
      directors to the Companies, shall be paid in full. 

     

    (i) Members’
      Transaction Costs.
      Pursuant to Section 5.8, the Members’ Transaction Costs shall be paid in
      full. 

     

    
      
        
        

      

      
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    (j) Comfort
      Letters.
      FAAC
      shall have received “comfort letters,” in customary form, from McGladrey &
Pullen LLP dated the date of the Proxy Materials and the Closing Date (or such
      other date or dates reasonably acceptable to FAAC) with respect to certain
      financial statements and other financial information included in the Proxy
      Statement as contemplated by Section 5.17.

     

    (k) Evergreen
      Release.
      The
      execution and delivery to FAAC of the signed Evergreen Release.

     

    (l) Senior
      Executive Employment Agreements.
      The
      execution and delivery of the Senior Executive Employment
      Agreements.

     

    (m) Key
      Employee Employment Agreements.
      The
      execution and delivery of the Key Employee Employment Agreements from not less
      than fifty percent (50%) of the Key Employees.

     

    (n) Stock
      Consideration.
      The
      execution and delivery of the Acquisition Agreements, the Registration Rights
      Agreement, the Lock Up Agreement and the Lock Up Escrow Agreement.

     

    (o) Voting
      Agreement.
      The
      execution and delivery of the Voting Agreement.

     

    (p) Fairness
      Opinion.
      Delivery of an opinion letter, in a form satisfactory to FAAC, issued by FAAC’s
      financial advisor to the effect that the Contemplated Transactions are fair
      from
      a financial point of view.

     

    (q) Termination
      of Related Party Contracts.
      The
      termination of each of the Terminated at Closing Related Party Transactions
      pursuant to one or more Termination Agreements (collectively the “Related
      Party Termination Agreements”)
      acceptable to FAAC.

     

    (r) New
      VTC Lease and VTC Lease Appraisal.
      Execution, delivery and approval by FAAC of the New VTC Lease and delivery
      to
      and approval by FAAC of the VTC Lease Appraisal; or if either the New VTC Lease
      or VTC Lease Appraisal are not acceptable to FAAC, the termination of the VTC
      Lease Commitment and New VTC Lease.

     

    ARTICLE
      VII

    Deliveries
      by Members and the
      Companies at
      Closing

     

    On
      the
      Closing Date, the Members and/or the Companies shall deliver or cause to be
      delivered to FAAC:

     

    7.1 Members’
      and the Companies’ Closing Certificate.

     

    A
      certificate in the form attached hereto as Exhibit
      O,
      dated
      as of the Closing Date, signed by the Members and the Companies certifying
      that:

     

    
      
        
        

      

      
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    (i) the
      Members and the Companies respectively have performed and complied with all
      agreements, obligations, covenants and conditions required by this Agreement
      to
      be so performed or complied with by each of them, as applicable at or prior
      to
      the Closing;

     

    (ii) from
      the
      Effective Date until the Closing Date, there has been no Material Adverse
      Effect, or the occurrence of an event that has resulted or can reasonably be
      expected to result in such a change, in the business, operations, properties,
      contracts, customer relations or condition, financial or otherwise, or prospects
      of each of the Companies, other than changes expressly permitted under or
      contemplated by this Agreement;

     

    (iii) no
      suit,
      action, investigation or other proceeding is pending or threatened before any
      Governmental Authority that seeks to restrain, prohibit or obtain damages or
      other relief in connection with this Agreement or consummation of the
      Contemplated Transactions or that questions the validity or legality of such
      transactions;

     

    (iv) this
      Agreement, the execution and delivery of all of the Transaction Documents and
      the consummation of the Contemplated Transactions have been approved by all
      necessary Members and company actions on the part of each of the Companies
      (with
      copies of all resolutions to be attached to the certificate and to be certified
      as true and correct in the certificate); and

     

    (v) the
      representations and warranties of the Members and the Companies set forth in
      this Agreement are true and correct as of the Closing Date (unless the
      representation or warranty by its terms is made as of a specific
      date).

     

    7.2 Consents.

     

    Copies
      or
      other evidence reasonably satisfactory to FAAC of the consents and approvals
      referred to in Section 6.1(b).

     

    7.3 Estimated
      Closing Balance Sheet.

     

    The
      Estimated Closing Balance Sheet not less than two (2) Business Days prior to
      the
      Closing Date pursuant to Section 2.3(b).

     

    7.4 Resignations
      of Directors and Officers.

     

    Written
      resignations, dated as of the Effective Date, of all directors, officers and
      managers of each of the Companies.

     

    7.5 Termination
      of Credit Facility/Facilities.

     

    Evidence
      satisfactory to FAAC that all amounts outstanding under any credit or loan
      agreements between SunTrust Bank and related agreements and notes have been
      paid
      in full or will be paid in full from proceeds of the Contemplated Transaction
      and that documentation providing for the release of all Liens on the assets
      of
      the Companies is available for filing immediately after the
      Closing.

     

    
      
        
        

      

      
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    7.6 Release
      of Liens.

     

    Except
      as
      otherwise contemplated by Section 7.5, evidence satisfactory to FAAC that all
      Liens on the Companies’ assets have been released or terminated, as the case may
      be.

     

    7.7 Phantom
      Membership Interest Releases. 

     

    Delivery
      of the fully executed Phantom Membership Interest Releases.

     

    7.8 Comfort
      Letters. 

     

    Delivery
      of “Comfort letters” in customary form, from McGladrey & Pullen LLP dated
      the date of the Proxy Materials and the Closing Date (or such other date, or
      dates reasonably acceptable to FAAC) with respect to certain financial
      statements and other financial information included in the Proxy Statement
      as
      contemplated by Section 5.17.

     

    7.9 Evergreen
      Release.

     

    Delivery
      of the fully executed Evergreen Release.

     

    7.10 Senior
      Executive Employment Agreements.

     

    Delivery
      of fully executed Senior Executive Employment Agreements.

     

    7.11 Key
      Employee Employment Agreements.

     

    Delivery
      of fully executed Key Employee Employment Agreements from not less than fifty
      percent (50%) of the Key Employees.

     

    7.12 Stock
      Consideration Documents.

     

    Delivery
      of the following documents fully executed by each of the Members: Acquisition
      Agreements, Registration Rights Agreement, Lock Up Agreement and Lock Up Escrow
      Agreement.

     

    7.13 Voting
      Agreement.

     

    Delivery
      of fully executed Voting Agreement.

     

    7.14 Escrow
      Agreements.

     

    Delivery
      of fully executed Escrow Agreements.

     

    7.15 Related
      Party Termination Agreements.

     

    Delivery
      of fully executed Related Party Termination Agreements for each of the
      Terminated At Closing Related Party Transactions.

     

    
      
        
        

      

      
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    7.16 New
      VTC Lease and VTC Lease Appraisal. 

     

    Delivery
      of the New VTC Lease and VTC Lease Appraisal in form acceptable to FAAC; or
      if
      either the New VTC Lease or VTC Lease Appraisal are not acceptable to FAAC,
      then
      documents acceptable to FAAC terminating the VTC Lease Commitment and the New
      VTC Lease.

     

    7.17 Further
      Instruments.

     

    Such
      further instruments of assignments, conveyance or transfer or other documents
      of
      further assurance as FAAC may reasonably request.

     

    ARTICLE
      VIII

    Deliveries
      by FAAC at Closing

     

    On
      the
      Closing Date, FAAC shall deliver or cause to be delivered to the Members, or
      to
      the Escrow Agent, as applicable:

     

    8.1 Officer’s
      Certificate.

     

    A
      certificate in the form attached hereto as Exhibit
      P,
      dated
      as of the Closing Date, signed by a senior officer of FAAC certifying
      that:

     

    (a) FAAC
      has
      performed its obligations and complied to the extent applicable with all
      agreements, obligations, covenants and conditions required by this Agreement
      to
      be so performed or complied with by FAAC at or prior to the Closing; 

     

    (b) no
      suit,
      action, investigation or other proceeding is pending or threatened before any
      Governmental Authority that seeks to restrain, prohibit or obtain damages or
      other relief in connection with this Agreement or consummation of the
      Contemplated Transactions or that questions the validity or legality of such
      transactions;

     

    (c) this
      Agreement, the execution and delivery of all of the Transaction Documents and
      the consummation of the Contemplated Transactions have been approved by FAAC’s
      board of directors (with copies of all resolutions to be attached to the
      certificate and to be certified as true and correct in the
      certificate);
      and

     

    (d) the
      representations and warranties of FAAC set forth in this Agreement are true
      and
      correct as of the Closing Date (unless the representation or warranty is made
      as
      of a specific date).

     

    8.2 Closing
      Consideration and Escrow Deposits.

     

    Pursuant
      to Section 2.2, the Closing Consideration shall be delivered to the Members’
Representative and the Escrow Deposits shall be delivered to the Escrow
      Agent.

     

    
      
        
        

      

      
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    8.3 Stock
      Consideration Documents.

     

    Delivery
      of the following documents fully executed by FAAC: Acquisition Agreements;
      Registration Rights Agreement; Lock Up Agreement; and Lock Up Escrow
      Agreement.

     

    8.4 Senior
      Executive Employment Agreement.

     

    Delivery
      of the Senior Executive Employment Agreement fully executed by
      FAAC.

     

    8.5 Key
      Employee Employment Agreements.

     

    Delivery
      of the Key Employee Employment Agreements fully executed by FAAC.

     

    8.6 Management
      of FAAC.

     

    Delivery
      by FAAC of Amended and Restated Bylaws and various resolutions of FAAC’s Board
      of Directors implementing the provisions of Sections 5.15(a).

     

    8.7 Escrow
      Agreements.

     

    Delivery
      of the Escrow Agreements fully executed by FAAC.

     

    8.8 Employee
      Stock Grants.

     

    Delivery
      of the Employee Stock Grants.

     

    8.9 Further
      Instruments.

     

    Such
      documents of further assurance as the Members may reasonably
      request.

     

    ARTICLE
      IX

    Survival
      and Indemnification

     

    9.1 Survival
      of Representations and Warranties.

     

    (a) Except
      for the Surviving Representations, the representations and warranties of the
      Members and the Companies on the one hand, and FAAC, on the other hand, in
      this
      Agreement or in any certificate or document delivered on or before the Closing
      Date, and subsections (a), (b) and (c) of Section 5.16, shall survive any due
      diligence investigation by or on behalf of the parties hereto and the Closing
      and shall remain effective until eighteen (18) months following the Closing
      Date
      (the “Survival
      Date”).
      After
      the expiration of such period, the representations and warranties shall expire
      and be of no further force and effect except to the extent that a claim or
      claims shall have been asserted by FAAC or the Members, as the case may be,
      with
      respect thereto on or before the expiration of such period, provided however
      that the following representations and warranties (collectively the
“Surviving
      Representations”)
      shall
      survive the Survival Date until the date specified below.

     

    
      
        
        

      

      
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    (i) Claims
      for indemnification based on breaches of representations and warranties of
      the
      Members in Section 3.11(a) (Title to Membership Interests) shall survive the
      Survival Date and claims for indemnification based on breaches of such
      representations and warranties may be made at any time following the
      Closing.

     

    (ii) Claims
      for indemnification based on breaches of representations and warranties of
      the
      Members and the Companies in Sections 3.21 (Compliance with Laws), 3.22
      (Environmental Matters), 3.24 (Absence of Certain Business Practices), 3.28
      (ERISA) and 3.29 (Tax Matters) shall survive the Survival Date and claims for
      indemnification based on breaches of such representations and warranties may
      be
      made up to the date that is three (3) months after the expiration of the
      applicable statute of limitations.

     

    (iii) Claims
      for indemnification based on breaches of representations and warranties of
      the
      Members and the Companies in Section 3.18 (Federal and State Government
      Contracts) with respect to cost reimbursable Government Contracts shall survive
      the Survival Date and claims based on breaches of such representations and
      warranties may be made up to the date thirty (30) days after the applicable
      Governmental Authority has agreed on final indirect cost rates for any fiscal
      year that began prior to the Closing Date.

     

    (b) The
      undersigned acknowledge and agree that the covenants contained in this
      Agreement, including, but not limited to the covenants contained in ARTICLE
      V
      above shall survive Closing and are unaffected by this Section 9.1.

     

    9.2 Indemnification.

     

    (a) By
      FAAC.

     

    (i) Subject
      to Section 9.2(g), FAAC shall protect, defend, indemnify and hold harmless
      the
      Members and their respective agents, representatives, successors and assigns,
      estates and heirs (“Members
      Indemnitees”)
      from
      and against any losses, damages and expenses (including, without limitation,
      except as provided in Section 9.2(d), reasonable counsel fees, costs and
      expenses incurred in investigating and defending against the assertion of such
      liabilities (collectively “Losses”))
      that
      may be sustained, suffered or incurred by the Members Indemnities, and that
      are
      related to (A) any breach by FAAC of its representations and warranties in
      this
      Agreement, (B) any breach by FAAC of its covenants, agreements or obligations
      in, or under, this Agreement, (C) Taxes as provided in paragraph (ii) of
      this Section 9.2(a) or (D) any liabilities of the
      Companies following the Closing other than those liabilities for which the
      Members have agreed to indemnify FAAC pursuant to Section 9.2(b) of this
      Agreement.

     

    (ii) The
      obligations of FAAC under paragraph (i) of this Section 9.2(a) shall extend
      to
      (A) all Taxes with respect to taxable periods beginning after the Closing Date
      (including any Taxes with respect to transactions properly treated as occurring
      on the day after the Closing Date pursuant to Treasury Regulations
      Section 1.1502-76(b)(1)(ii)(B) or any similar provision of state, local or
      foreign law) and (B) all Taxes (other than federal income Taxes) with
      respect to Straddle Periods.

     

    
      
        
        

      

      
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    (b) By
      the
      Members.

     

    (i) Subject
      to Sections 9.2(e), 9.2(f), 9.2(h), 9.2(i) and 9.3 the Members jointly and
      severally shall protect, defend, indemnify and hold harmless FAAC, and the
      Companies and their respective Affiliates, and their officers, directors,
      employees, agents, representatives, successors and assigns (“FAAC
      Indemnitees”)
      from
      and against any Losses that may be sustained, suffered or incurred by FAAC
      Indemnitees and that are related to (A) any breach by the Members or the
      Companies of their respective representations and warranties in this Agreement
      (including Disclosure Schedule Update Losses), (B) any breach by the Members
      or
      the Companies of covenants and obligations in or under this Agreement,
      including, but not limited to the Members obligations to make payments to FAAC
      pursuant to Sections 2.2 and 2.4(e)
      and the
      Members’ or the Companies’ obligations pursuant to ARTICLE V (including but not
      limited to Members’ obligations under Sections 5.7, 5.8, 5.11(b), 5.11(c)
      and 5.14) (C) Taxes as provided in paragraph (ii) of this Section
      9.2(b), to the extent such Taxes have not been accrued or otherwise reserved
      for
      on the Closing Balance Sheet (it being the intent of the parties that all of
      the
      provisions of this Agreement shall be interpreted to avoid requiring the Members
      to pay (or receive a reduction in the Purchase Consideration) twice for the
      same
      Tax).

     

    (ii) The
      obligations of the Members under paragraph (i) of this Section 9.2(b) shall
      extend to (A) all Taxes with respect to taxable periods ending on or prior
      to
      the Closing Date and (B) all Taxes with respect to Straddle Periods to the
      extent that such Taxes (1) are allocable to the period prior to Closing pursuant
      to Section 5.11(c) and (2) have not been accrued or otherwise reserved for
      on
      the Closing Balance Sheet. Such obligations shall be without regard to whether
      there was any breach of any representation or warranty under ARTICLE III with
      respect to such Tax or any disclosures that may have been made with respect
      to
      ARTICLE III or otherwise. The indemnification obligations under this paragraph
      (ii) shall apply even if the additional Tax liability results from the filing
      of
      a return or amended return with respect to a pre-Closing Date transaction or
      period (or portion of a period) by FAAC. FAAC shall not cause or permit the
      Companies to file an amended Tax Return with respect to any taxable period
      ending on or prior to the Closing Date or any Straddle Period unless
      (y) the Members’ Representative consents in its sole discretion or (z) FAAC
      obtains a legal opinion (in form and content reasonably acceptable to the
      Members’ Representative) from counsel reasonably acceptable to the Members’
Representative that such amendment is legally required to be filed (provided,
      further, that such legal opinion may not assume any facts that are disputed
      in
      good faith by the Members’ Representative).
      In the
      event of any conflict between the provisions of this Section 9.2(b)(ii) and
      any
      other provision of this Agreement, the provisions of this Section shall
      control.

     

    
      
        
        

      

      
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    (c) Procedure
      for Third-Party Claims.

     

    (i) If
      any
      Third-Party Claims shall be commenced, or any claim or demand shall be asserted
      (other than audits or contests with Taxing Authorities relating to Taxes),
      in
      respect of which the Indemnified Party proposes to demand indemnification by
      Indemnifying Party under Sections 9.2(a) or 9.2(b), the Indemnified Party shall
      notify the Indemnifying Party in writing of such demand and the Indemnifying
      Party shall have the right to assume the entire control of the defense,
      compromise or settlement thereof (including the selection of counsel), subject
      to the right of the Indemnified Party to participate (with counsel of its
      choice), but the fees and expenses of such additional counsel shall be at the
      expense of the Indemnified Party. The Indemnifying Party will not compromise
      or
      settle any such action, suit, proceeding, claim or demand (other than, after
      consultation with Indemnified Party, an action, suit, proceeding, claim or
      demand to be settled by the payment of money damages and/or the granting of
      releases, provided
      that no
      such settlement or release shall acknowledge the Indemnified Party’s liability
      for future acts or obligate FAAC with respect to activities of the Companies
      or
      the Members) without the prior written consent of the Indemnified Party, which
      consent shall not be unreasonably withheld, or delayed.

     

    (ii) Notwithstanding
      anything to the contrary contained in this Section 9.2(c), FAAC at its expense
      shall have the sole right to control and make all decisions regarding interests
      in any Tax audit or administrative or court proceeding relating to Taxes,
      including selection of counsel and selection of a forum for such contest,
provided,
      however,
      that in
      the event such audit or proceeding relates to Taxes for which the Members are
      responsible and have agreed to indemnify FAAC, (A) FAAC, the Companies, and
      the
      Members shall cooperate in the conduct of any audit or proceeding relating
      to
      such period, (B) the Members, acting through the Members’ Representative, shall
      have the right (but not the obligation) to participate in all facets of such
      audit or proceeding at the Members’ expense (including, but not limited to, the
      right to be present at all meetings and on all telephone conversations and
      to
      receive copies of all correspondence, emails and other forms of nonverbal
      communications related to the Taxes in question), (C) FAAC shall not enter
      into
      any agreement with the relevant taxing authority pertaining to such Taxes
      without the written consent of the Members’ Representative, which consent shall
      not unreasonably be withheld, and (D) FAAC may, without the written consent
      of
      the Members, enter into such an agreement provided that FAAC shall have agreed
      in writing to accept responsibility and liability for the payment of such Taxes
      and to forego any indemnification under this Agreement with respect to such
      Taxes.

     

    (iii) The
      parties will keep each other informed as to matters related to any audit or
      judicial or administrative proceedings involving Taxes for which indemnification
      may be sought hereunder, including, without limitation, any settlement
      negotiations. Refunds of Tax relating to periods ending prior to the Closing
      Date (or to that portion of a Straddle Period that is prior to Closing under
      the
      principles of Section 5.11(c)) shall be the property of the Members, but only
      to
      the extent that such refunds are not attributable to (A) net operating loss
      or
      other carrybacks from periods ending after the Closing Date, or (B) refund
      claims that are initiated by FAAC (provided
      that
      FAAC gives the Members’ Representative prior notice of such possible claim and
      the Members decline to pursue such refund at its or their own expense);
provided,
      however,
      that
      FAAC shall in no event have an obligation to file or cause to be filed a claim
      for refund with respect to any Taxes relating to any period. 

     

    (iv) Any
      indemnity payment or payment of Tax by the Members or its or their Affiliates
      as
      a result of any audit or contest shall be reduced by the present value of the
      correlative amount, if any, by which any Tax of FAAC or its Affiliates is or
      will be reduced for periods ending after the Closing Date as a result thereof.
      

     

    
      
        
        

      

      
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    (v) The
      Indemnified Party shall cooperate fully in all respects with the Indemnifying
      Party in any defense, compromise or settlement, subject to this Section 9.2(c)
      including, without limitation, by making available all pertinent books, records
      and other information and personnel under its control to the Indemnifying
      Party.

     

    (d) Procedure
      for Direct Claims.
      

     

    (i) Any
      Direct Claim shall be asserted by written notice given by the Indemnified Party
      to the Indemnifying Party (each a “Direct
      Claim Notice”).
      The
      Indemnifying Party shall have a period of twenty (20) Business Days from the
      date of receipt (the “Direct
      Claim Notice Period”)
      within
      which to respond to a Direct Claim Notice. If the Indemnifying Party does not
      respond in writing within the Direct Claim Notice Period, then the Indemnifying
      Party shall be deemed to have accepted responsibility for the claimed
      indemnification and shall have no further right to contest the validity of
      that
      claim. If the Indemnifying Party does respond in writing within the Direct
      Claim
      Notice Period, and rejects the claim in whole or in part, the Indemnified Party
      shall be free to pursue all remedies under Section 11.11. To the extent that
      any
      FAAC Indemnitees prevail in a Direct Claim (or the Members’ Representative
      concedes (on behalf of the Members), or otherwise does not timely respond to
      a
      Direct Claim Notice made by FAAC) then the Direct Claim shall be satisfied
      from
      the General Indemnity Escrow (and the Escrow Agent shall pay to FAAC from the
      General Indemnity Escrow the amount of the Direct Claim) with no further action
      required by the Members, or the Members’ Representative. Direct Claims shall be
      satisfied from the General Indemnity Escrow Property in the General Indemnity
      Escrow with the FAAC stock then in the General Indemnity Escrow valued at the
      Average Share Value.

     

    (ii) Costs
      Related to Direct Claims.
      Notwithstanding anything in this Section 9.2 to the contrary, except as
      otherwise may be ordered by a court of competent jurisdiction, the Members
      Indemnitees and FAAC Indemnitees shall each bear their own costs, including
      counsel fees and expenses, incurred in connection with Direct Claims against
      FAAC and the Members, respectively hereunder that are not based upon claims
      asserted by third parties.

     

    (e) Calculation
      of Amount of Claims and Losses.
      The
      amount of any claims or losses subject to indemnification under Section 9.2(b)
      shall be calculated net of any amounts recovered by FAAC or its Affiliates
      (including the Companies after the Closing) under applicable insurance policies
      held by FAAC or its Affiliates, and FAAC agrees to make or cause to be made
      all
      reasonable claims for insurance under such policies that may be applicable
      to
      the matter giving rise to the indemnification claim hereunder. The amount of
      any
      claims or losses subject to indemnification under Section 9.2(b) shall be
      calculated net of the present value of any Tax benefits to FAAC or its
      Affiliates (including the Companies after the Closing) resulting from the matter
      giving rise to the indemnification claim hereunder (computed at the highest
      effective marginal tax rates at which FAAC is then paying Taxes and limited
      to
      the extent that the Tax Benefits can be utilized by FAAC).

     

    
      
        
        

      

      
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    (f) Limitations
      on Rights of FAAC Indemnitees.
      

     

    (i) Subject
      to the provisions of Section 9.2(f)(ii) below the rights of FAAC Indemnitees
      to
      indemnification by the Members for breaches of representations and warranties
      hereunder shall be subject to the limitations: 

     

    (A) The
      FAAC
      Indemnitees shall not be entitled to indemnification with respect to a claim
      or
      claims of breach of representation and warranty by the Members or the Companies
      unless (1) the particular claim exceeds Eight Thousand Dollars ($8,000) and
      (2) the aggregate amount of all such claims made thereunder exceed One
      Hundred Seventy Five Thousand Dollars ($175,000), in which event the indemnity
      provided for in this Section 9.2 shall be effective with respect to the total
      amount of such damages in excess of $175,000; and 

     

    (B) the
      Members’ aggregate maximum liability to FAAC Indemnitees under this ARTICLE IX
      shall not exceed and be limited to the General Indemnity Escrow;

     

    (ii) The
      limitation in Section 9.2(f)(i)(A) above shall not apply to the “Uncapped
      Non-Threshold Indemnifications”
as
      hereinafter defined and the Members shall be jointly and severally liable for
      Uncapped Non-Threshold Indemnifications up to an aggregate amount of Five
      Million Dollars ($5,000,000) separate and apart from the General Indemnity.
      Notwithstanding the previous sentence, the limitation in Section 9.2(f)(i)(B)
      shall in all events apply. For purposes of this Agreement, the term
“Uncapped
      Non-Threshold Indemnifications”
shall
      mean and refer collectively to indemnification liabilities of the Members
      pursuant to claims based (A) on the breach of Sections 2.4(e), 5.7, 5.8,
      5.11(b), 5.11(c), 5.14, 5.16, 5.18, or 5.20; or (B) the representations and
      warranties of the Members and the
      Companies pursuant
      to Section 3.11 (Title), Section 3.28 (ERISA), Section 3.29 (Taxes), D & O
      Indemnification Claims (but only the D & O Indemnification Claims) pursuant
      to Section 3.25 or clause (C) of Section 9.2(b)(i); or (C) claims
      based on fraud, intentional misrepresentation or criminal acts on the part
      of
      the Members and the Companies and their respective officers, directors, agents,
      representative and trustees.

     

    (iii) The
      rights of the FAAC Indemnitees to indemnification by the Members for Disclosure
      Schedule Update Losses shall be subject to the limitations of Section 9.2(f)(i)
      and (ii) above.

     

    (g) Limitations
      on Rights of Members Indemnitees.
      The
      rights of Members Indemnitees to indemnification by FAAC for breaches of
      representations and warranties hereunder shall be subject to the limitation
      that
      Members Indemnitees shall not be entitled to indemnification with respect to
      a
      claim or claims for a breach of representation and warranty by FAAC unless
      the
      aggregate of damages with respect to all such claims exceeds $100,000, in which
      event the indemnity provided for in this Section 9.2 shall be effective with
      respect to the amount of such damages. The aforementioned limitations shall
      not
      apply to the indemnification liabilities of FAAC with respect to claims based
      on
      fraud, intentional misrepresentation, or criminal acts on the part of
      FAAC.

     

    
      
        
        

      

      
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    (h) Limitation
      on Rights of Members.
      Notwithstanding anything to the contrary, the Members each acknowledge and
      agree
      that that they shall have no right to make a claim against the Companies
      pursuant to any indemnity provision or agreement or otherwise in respect of
      Claims of FAAC Indemnitees pursuant to Section 9.2(b).

     

    (i) Limitations
      on Remedies.
      No
      party hereto shall be liable to the other for indirect, special, incidental,
      consequential or punitive damages claimed by such other party resulting from
      such first party’s breach of its obligations, agreements, representations or
      warranties hereunder, provided that nothing hereunder shall preclude any
      recovery by an Indemnitee against an Indemnitor for third party
      claims.

     

    9.3 General
      Indemnity Escrow Account.

     

    (a) Pursuant
      to Section 2 and the General Indemnity Escrow Agreement, at the Closing, FAAC
      shall deliver to the Escrow Agent the General Indemnity Escrow Property and
      the
      Escrow Agent shall set up an escrow account pursuant to the terms of the General
      Indemnity Escrow Agreement to secure the Members’ indemnification obligations
      under this ARTICLE IX. The remaining property of the General Indemnity Escrow,
      if any, less the sum of the total of all then outstanding indemnity claims
      by
      FAAC Indemnitees (including amounts offset pursuant to Section 9.4 that have
      not
      been resolved) shall be delivered by the Escrow Agent to the Members’
Representative within five (5) Business Days after the Survival Date the
      accounts designated by the Members’ Representative in accordance with the terms
      of the General Indemnity Escrow Agreement. The Members’ Representative shall be
      responsible for directing the distribution of the General Indemnity Escrow
      (60%
      to Rosato and 40% to Gallagher (after taking into consideration any FAAC common
      stock forfeited by Rosato or Gallagher pursuant to Section 2.2(d)(v)) and the
      Escrow Agent shall be entitled to fully rely on such directions. Each of the
      parties hereto agrees that they shall promptly sign joint instructions
      authorizing the Escrow Agent to release funds subject to outstanding claims
      (including funds held as a result of offsets under Section 9.4) as those claims
      are resolved pursuant to Section 11.11.

     

    (b) Any
      earnings on the General Indemnity Escrow Property, net of escrow expenses and
      taxes, shall be paid, pro rata, to the parties receiving distributions from
      General Indemnity Escrow Account.

     

    9.4 Effect
      of Investigation. 

     

    The
      right
      to indemnification or other remedies based on any representation, warranty,
      covenant or obligation of the Members or the Companies contained in or made
      pursuant to this Agreement or the Transaction Documents shall not be affected
      by
      any investigation conducted with respect to, or any knowledge acquired (or
      capable of being acquired) at any time, whether before or after the execution
      and delivery of this Agreement or the Closing Date occurs, with respect to
      the
      accuracy or inaccuracy of or compliance with, any such representation, warranty,
      covenant or obligation. The waiver of any condition to the obligation of FAAC
      to
      consummate the Contemplated Transactions, where such condition is based on
      the
      accuracy of any representation or warranty, or on the performance of or
      compliance with any covenant or obligation, shall not affect the right to
      indemnification or other remedies based on such representation, warranty,
      covenant or obligation.

     

    
      
        
        

      

      
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    ARTICLE
      X

    Termination

     

    10.1 Termination.

     

    This
      Agreement may be terminated and the transactions contemplated hereby may be
      abandoned:

     

    (a) at
      any
      time, by mutual written agreement of the Members and FAAC;

     

    (b) at
      any
      time after January 13, 2007, by either the Members or FAAC upon five (5)
      business days’ prior written notice to the other party, if the Closing shall not
      have occurred for any reason other than a breach of this Agreement by the
      terminating party;

     

    (c) by
      FAAC,
      if there has been a material violation or breach by the Members of any
      agreement, representation or warranty contained in the Agreement, that has
      rendered the satisfaction of any condition to the obligations of FAAC impossible
      and such violation or breach has not been waived by FAAC;

     

    (d) by
      the
      Members, if there has been a material violation or breach by FAAC of any
      agreement, representation or warranty contained in the Agreement, that has
      rendered the satisfaction of any condition to the obligations of the Members
      impossible and such violation or breach has not been waived by the Members;
      or

     

    (e) by
      either
      FAAC or the Members if a court of competent jurisdiction shall have issued
      an
      order permanently restraining or prohibiting the transactions contemplated
      by
      the Agreement, and such order shall have become final and
      nonappealable.

     

    10.2 Procedure
      and Effect of Termination.

     

    In
      the
      event of the termination of this Agreement and the abandonment of the
      transactions contemplated hereby, written notice thereof shall be given by
      a
      terminating party to the other parties and this Agreement shall terminate and
      the transactions contemplated hereby shall be abandoned without further action
      by the Members or FAAC. If this Agreement is terminated pursuant to Section
      10.1:

     

    (a) FAAC
      shall upon written request from the Members return all documents, work papers
      and other materials (and all copies thereof) obtained from the Members or the
      Companies relating to the transactions contemplated hereby, whether so obtained
      before or after the execution hereof, to the party furnishing the same, and
      all
      confidential information received by FAAC with respect to the Companies shall
      be
      treated in accordance with Section 5.2 and the Confidentiality Agreement
      referred to in such Section;

     

    
      
        
        

      

      
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    (b) At
      the
      option of the Members, all filings, applications and other submissions made
      pursuant to Sections 5.3 and 5.4 shall, to the extent practicable, be withdrawn
      from the agency or other Person to which made;

     

    (c) The
      obligations provided for in this Section 10.2, Sections 5.2 and 5.7, and in
      the
      Confidentiality Agreement shall survive any such termination of this Agreement;
      and

     

    (d) Notwithstanding
      anything in this Agreement to the contrary, the termination of this Agreement
      shall not relieve any party from liability for willful breach of this
      Agreement.

     

    ARTICLE
      XI

    Miscellaneous

     

    11.1 Further
      Assurances.

     

    At
      any
      time and from time to time after the Closing Date, the Members, the Members’
Representative, and the Companies will, upon the request of FAAC, and FAAC
      will,
      upon the request of the Members or the Members’ Representative perform, execute,
      acknowledge and deliver all such further acts, deeds, assignments, transfers,
      conveyances, powers of attorney and assurances as may be reasonably required
      by
      any of them, to effect or evidence the Contemplated Transactions.

     

    11.2 Notices.

     

    All
      necessary notices, demands and requests required or permitted to be given
      hereunder shall be in writing and addressed as follows:

     

    

    
      	 	
              If
                to Members’

            	
              Thomas
                P. Rosato

            
	 	
              Representative

            	
              11850
                Baltimore Avenue

            
	 	 	
              Beltsville,
                Maryland 20705

            
	 	 	
              Fax:

            
	 	 	 
	 	
              With
                a copy to:

            	
              William
                M. Davidow, Esquire

            
	 	 	
              210
                West Pennsylvania Avenue

            
	 	 	
              Suite
                400

            
	 	 	
              Towson,
                Maryland 21204-4515

            
	 	 	
              Fax:
                (410) 832-2015

            
	 	 	 
	 	
              If
                to FAAC:

            	
              Fortress
                America Acquisition Corporation

            
	 	 	
              Attn:
                Harvey L. Weiss, Chairman of the Board

            
	 	 	
              4100
                North Fairfax Drive

            
	 	 	
              Suite
                1150

            
	 	 	
              Arlington,
                Virginia 22203

            
	 	 	 
	 	
              With
                a copy to:

            	
              James
                J. Maiwurm

            
	 	 	
              Squire,
                Sanders & Dempsey L.L.P.

            
	 	 	
              8000
                Towers Crescent Drive, Suite 1400

            
	 	 	
              Tysons
                Corner, VA 22182-2700

            
	 	 	
              Fax:
                (703) 720-7801

            

    

    

    
      
        
        

      

      
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    Notices
      shall be delivered by a recognized courier service or by facsimile transmission
      and shall be effective upon receipt, provided that notices shall be presumed
      to
      have been received:

     

    (a) if
      given
      by courier service, on the second Business Day following delivery of the notice
      to a recognized courier service before the deadline for delivery on or before
      the second Business Day following delivery to such service, delivery costs
      prepaid, addressed as aforesaid; and

     

    (b) if
      given
      by facsimile transmission, on the next Business Day, provided
      that the
      facsimile transmission is confirmed by answer back, written evidence of
      electronic confirmation of delivery, or oral or written acknowledgment of
      receipt thereof by the addressee.

     

    From
      time
      to time, either party may designate a new address or facsimile number for the
      purpose of notice hereunder by notice to the other party in accordance with
      the
      provisions of this Section 11.2.

     

    11.3 Governing
      Law.

     

    This
      Agreement shall in all respects be governed by, and construed in accordance
      with, the laws (excluding conflict of laws rules and principles) of the State
      of
      Maryland applicable to agreements made and to be performed entirely within
      the
      State of Maryland, including all matters of construction, validity and
      performance.

     

    11.4 Entire
      Agreement.

     

    This
      Agreement, together with the Exhibits and Schedules hereto and the other
      Transaction Documents, constitutes the entire agreement of the parties relating
      to the subject matter hereof and supersedes all prior contracts or agreements,
      whether oral or written. There are no representations, agreements, arrangements
      or understandings, oral or written, between or among the parties relating to
      the
      subject matter of this Agreement that are not fully expressed in this
      Agreement.

     

    11.5 Severability.

     

    Should
      any provision of this Agreement or the application thereof to any person or
      circumstance be held invalid or unenforceable to any extent: (a) such provision
      shall be ineffective to the extent, and only to the extent, of such
      unenforceability or prohibition and shall be enforced to the greatest extent
      permitted by Law; (b) such unenforceability or prohibition in any jurisdiction
      shall not invalidate or render unenforceable such provision as applied (i)
      to
      other persons or circumstances or (ii) in any other jurisdiction; and (c) such
      unenforceability or prohibition shall not affect or invalidate any other
      provision of this Agreement.

     

    
      
        
        

      

      
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    11.6 Amendment.

     

    Neither
      this Agreement nor any of the terms hereof may be terminated, amended,
      supplemented or modified orally, but only by an instrument in writing signed
      by
      the party against which the enforcement of the termination, amendment,
      supplement, or modification shall be sought.

     

    11.7 Effect
      of Waiver or Consent.

     

    No
      waiver
      or consent, express or implied, by any person to or of any breach or default
      by
      any party in the performance by such party of its obligations hereunder shall
      be
      deemed or construed to be a consent or waiver to or of any other breach or
      default in the performance by such party of the same or any other obligations
      of
      such party hereunder. No single or partial exercise of any right or power,
      or
      any abandonment or discontinuance of steps to enforce any right or power, shall
      preclude any other or further exercise thereof or the exercise of any other
      right or power. Failure on the part of a party to complain of any act of any
      party or to declare any party in default, irrespective of how long such failure
      continues, shall not constitute a waiver by such person of its rights hereunder
      until the applicable statute of limitation period has run.

     

    11.8 Rights
      and Remedies Cumulative.

     

    Except
      where other remedies are expressly provided herein, indemnifications under
      ARTICLE IX shall constitute the sole remedy for Losses identifiable pursuant
      to
      Sections 9.2(a)(i), 9.2(b)(i), or 9.2(b)(iii) except with respect to fraud
      or
      intentional misconduct by a party. To the extent this Agreement provides for
      other remedies in addition to the indemnifications under ARTICLE IX, then such
      other remedies together with indemnifications under ARTICLE IX shall be
      remedies.

     

    11.9 Parties
      in Interest; Limitation on Rights of Others.

     

    The
      terms
      of this Agreement shall be binding upon, and inure to the benefit of, the
      parties hereto and their respective legal representatives, successors and
      assigns. Nothing in this Agreement, whether express or implied, shall be
      construed to give any person (other than the parties hereto and their respective
      legal representatives, successors and assigns and as expressly provided herein
      and to the extent provided in ARTICLE IX, the Indemnified Parties) any legal
      or
      equitable right, remedy or claim under or in respect of this Agreement or any
      covenants, conditions or provisions contained herein, as a third party
      beneficiary or otherwise.

     

    11.10 Assignability.

     

    This
      Agreement shall not be assigned by any party hereto without the prior written
      consent of the other party hereto, provided,
      however,
      that
      the prior written consent of the Members’ Representative shall not be required
      with respect to (a) any assignment by FAAC of its rights and obligations under
      this Agreement to an Affiliate of FAAC so long as such assignment does not
      relieve FAAC of its obligations hereunder; or (b) any collateral assignment
      of
      FAAC’s rights and remedies under this Agreement to any lender under credit and
      collateral agreements, as such agreements may be amended, modified or replaced
      from time to time, so long as such lender does not have the right to exercise
      any of FAAC’s rights and remedies under this Agreement in the absence a default
      by FAAC under the applicable credit and collateral documents. Each of the
      Members hereby agrees to execute and deliver (and authorize the Members’
Representative to execute and deliver) such documents, instruments and
      agreements as such lender may reasonably require to confirm, reaffirm or perfect
      such collateral assignment. This Agreement shall be binding upon and shall
      inure
      to the benefit of the parties hereto and their respective successors and
      permitted assigns. 

     

    
      
        
        

      

      
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    11.11 Dispute
      Resolution and Arbitration.

     

    In
      the
      event that any dispute arises among the parties pertaining to the subject matter
      of this Agreement, and the parties, through the senior management of FAAC and
      the Members’ Representative, are unable to resolve such dispute within a
      reasonable time through negotiations and mediation efforts, such dispute shall
      be resolved as set forth in this Section 11.11.

     

    (a) The
      procedures of this Section 11.11 may be initiated by a written notice
      (“Dispute
      Notice”)
      given
      by one party (“Claimant”)
      to the
      other, but not before thirty (30) days have passed during which the parties
      have
      been unable to reach a resolution as described (unless any party would be
      materially prejudiced by such delay). The Dispute Notice shall be accompanied
      by
      (i) a statement of the Claimant describing the dispute in reasonable detail
      and
      (ii) documentation, if any, supporting the Claimant’s position on the dispute.
      Within twenty (20) days after the other party’s (“Respondent”)
      receipt of the Dispute Notice and accompanying materials, the parties shall
      submit the dispute to mediation in the Washington, D.C. area under the rules
      of
      the American Arbitration Association. All negotiations and mediation procedures
      pursuant to this paragraph (a) shall be confidential and treated as compromise
      and settlement negotiations and shall not be admissible in any arbitration
      or
      other proceeding.

     

    (b) If
      the
      dispute is not resolved as provided in paragraph (a) within sixty (60) days
      after the Respondent’s receipt of the Dispute Notice, the dispute shall be
      resolved by binding arbitration. Within the sixty-day period referred to in
      the
      immediately preceding sentence, the parties shall agree on a single arbitrator
      to resolve the dispute. If the parties fail to agree on the designation of
      an
      arbitrator within said sixty-day period, the American Arbitration Association
      in
      the Washington, D.C. area shall be requested to designate the single arbitrator.
      If the arbitrator becomes disabled, resigns or is otherwise unable to discharge
      the arbitrator’s duties, the arbitrator’s successor shall be appointed in the
      same manner as the arbitrator was appointed.

     

    (c) Except
      as
      otherwise provided in this Section 11.11, the arbitration shall be conducted
      in
      accordance with the Commercial Rules of the American Arbitration Association,
      which shall be governed by the United States Arbitration Act.

     

    (d) Any
      resolution reached through mediation and any award arising out of arbitration
      (i) shall be binding and conclusive upon the parties; (ii) shall be limited
      to a
      holding for or against a party, and affording such monetary remedy as is deemed
      equitable, just and within the scope of this Agreement; (iii) may not include
      special, incidental, consequential or punitive damages; (iv) may in appropriate
      circumstances include injunctive relief; and (v) may be entered in court in
      accordance with the United States Arbitration Act.

     

    
      
        
        

      

      
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    (e) Arbitration
      shall not be deemed a waiver of any right of termination under this Agreement,
      and the arbitrator is not empowered to act or make any award other than based
      solely on the rights and obligations of the parties prior to termination in
      accordance with this Agreement.

     

    (f) The
      arbitrator may not limit, expand, or otherwise modify the terms of this
      Agreement.

     

    (g) The
      laws
      of the State of Maryland shall apply to any mediation, arbitration, or
      litigation arising under this Agreement.

     

    (h) Each
      party shall bear its own expenses incurred in any mediation, arbitration or
      litigation, but any expenses related to the compensation and the costs of any
      mediator or arbitrator shall be borne equally by the parties to the
      dispute.

     

    (i) A
      request
      by a party to a court for interim measures necessary to preserve a party’s
      rights and remedies for resolution pursuant to this Section 11.11 shall not
      be
      deemed a waiver of the obligation to mediate or of the agreement to
      arbitrate.

     

    (j) The
      parties, their representatives, other participants and the mediator or
      arbitrator shall hold the existence, content and result of mediation or
      arbitration in confidence.

     

    11.12 Jurisdiction;
      Court Proceedings; Waiver of Jury Trial.

     

    Subject
      to the provisions of Section 11.11, any suit, action or proceeding against
      any
      party to this Agreement arising out of or relating to this Agreement shall
      be
      brought in any Federal or state court located in the Commonwealth of Virginia
      and each of the parties hereby submits to the exclusive jurisdiction of such
      courts for the purpose of any such suit, action or proceeding. A final judgment
      in any such action or proceeding shall be conclusive and may be enforced in
      other jurisdictions by suit on the judgment or in any other manner provided
      by
      Law. To the extent that service of process by mail is permitted by applicable
      Law, each party irrevocably consents to the service of process in any such
      suit,
      action or proceeding in such courts by the mailing of such process by registered
      or certified mail, postage prepaid, at its address for notices provided for
      herein. Each party irrevocably agrees not to assert (a) any objection that
      it
      may ever have to the laying of venue of any such suit, action or proceeding
      in
      any Federal or state court located in the Commonwealth of Virginia and (b)
      any
      claim that any such suit, action or proceeding brought in any such court has
      been brought in an inconvenient forum. Each party waives any right to a trial
      by
      jury, to the extent lawful.

     

    11.13 No
      Other Duties.

     

    The
      only
      duties and obligations of the parties are as specifically set forth in this
      Agreement, and no other duties or obligations shall be implied in fact, law
      or
      equity, or under any principle of fiduciary obligation.

     

    
      
        
        

      

      
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    11.14 Reliance
      on Counsel and Other Advisors.

     

    Each
      party has consulted such legal, financial, technical or other expert as it
      deems
      necessary or desirable before entering into this Agreement. Each party
      represents and warrants that it has read, knows, understands and agrees with
      the
      terms and conditions of this Agreement.

     

    11.15 Waiver
      of Rights Against Company’s Trust Fund. 

     

    The
      Companies and each of the Members acknowledges that they have read FAAC’s Final
      Prospectus, dated July 13, 2005 (“Prospectus”) and understands that FAAC has
      established a trust fund for the benefit of FAAC’s public shareholders and that
      FAAC may disburse monies from the trust fund only (a) to FAAC’s public
      shareholders in the event such shareholders elect to convert their shares,
      (b)
      to FAAC’s public shareholders upon its liquidation if FAAC fails to consummate a
      business combination or (c) after or concurrently with the consummation of
      a
      business combination.  Each
      of
      the Companies and
      each
      of the Members (i) hereby agrees that from the period commencing from the
      Effective Date through the Closing he, she or it do not have any right, title,
      interest or claim of any kind in or to any monies in the trust fund for so
      long
      as they have not been distributed or required to be distributed and (ii) will
      not seek recourse against monies in the trust fund consistent with clause (i)
      of
      this sentence. This Section shall survive the termination of this Agreement
      but
      shall terminate and be of no further force and effect upon Closing.

     

    11.16 Counterparts.

     

    This
      Agreement may be executed in several counterparts, all of which taken together
      shall be deemed one and constitute a single instrument. Any manual signature
      upon this Agreement that is faxed, scanned or photocopied shall for all purposes
      have the same validity effect and admissibility in evidence as an original
      signature and the parties hereby waive any objection to the
      contrary.

     

    

     

    [Signatures
      on Following Page]

     

    

     

    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
      duly
      executed and delivered in its name and on its behalf, all as of the day and
      year
      first above written.

     

    
      	 	
              FORTRESS
                AMERICA

            
	 	
              ACQUISITION
                CORPORATION,

            
	 	
              a
                Delaware corporation

            
	 	
              By:
                /s/ Harvey L. Weiss

            
	 	
              Name:
                Harvey L. Weiss

            
	 	
              Title: Chief
                Executive Officer

            
	 	
              VTC,
                L.L.C.,

            
	 	
              a
                Maryland limited liability company

            
	 	
              By:
                /s/ Thomas P. Rosato

            
	 	
              Name:
                Thomas P. Rosato

            
	 	
              Title: Managing
                Member 

            
	 	 
	 	
              VORTECH,
                LLC,

            
	 	
              a
                Maryland limited liability company

            
	 	
              By:
                /s/ Thomas P. Rosato

            
	 	
              Name:
                Thomas P. Rosato

            
	 	
              Title:
                Managing Member

            
	 	 
	 	 
	 	
              MEMBERS:

            
	 	 
	 	 
	 	/s/ Thomas
              P.
              Rosato
	 	
              Thomas
                P. Rosato 

            
	 	 
	 	 
	 	
              /s/
                Gerard J. Gallagher

            
	 	
              Gerard
                J. Gallagher

            
	 	 
	 	
              MEMBERS’
                REPRESENTATIVE:

            
	 	/s/ Thomas
              P.
              Rosato
	 	
              Name: Thomas
                P. RosatoFIFTH
      AMENDED AND RESTATED

    

    INVESTORS’
      RIGHTS AGREEMENT

    

     

    

    February
      9, 2006

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    FIFTH
      AMENDED AND RESTATED

     

    INVESTORS’
      RIGHTS AGREEMENT

     

    THIS
      FIFTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT is made as of the
      9th
      day of
      February, 2006, by and among Wintegra, Inc., a Delaware corporation (the
“Company”),
      the
      investors listed on Schedule A
      hereto,
      each of which is herein referred to as a “D-Investor”,
      the
      holders of Series A Preferred Shares listed on Schedule
      B
      hereto,
      each of which is herein referred to as an “A-Investor”,
      the
      holders of Series B Preferred Shares listed on Schedule
      C
      hereto,
      each of which is herein referred to as an “B-Investor”
      and the
      holders of Series C Preferred Shares listed on Schedule
      D
      hereto,
      each of which is referred to as a "C-Investor"
      (the
      D-Investors, C-Investors, B-Investors and the A-Investors shall jointly be
      referred to as the “Investors”)
      and the
      holders of Common Stock listed on Schedule E
      hereto,
      each of whom is herein referred to as a “Founder.”

     

    RECITALS

     

    WHEREAS,
      the Company, the Founders, the C-Investors, the B-Investors and the A-Investors
      are parties to the Fourth Amended and Restated Investors’ Rights Agreement dated
      January, 2005 (the “Previous
      IR Agreement”);
      and

     

    WHEREAS,
      the parties to the Previous IR Agreement wish to amend and restate the Previous
      IR Agreement so that this Agreement shall govern the rights of the Investors
      and
      the Founders to cause the Company to register shares of Common Stock issued
      or
      issuable to them and certain other matters as set forth herein and shall replace
      the Previous IR Agreement;

     

    NOW,
      THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:

     

    1.  Registration
      Rights.
      The
      Company covenants and agrees as follows:

     

    1.1  Definitions.
      Capitalized terms used but not defined herein shall have the meanings assigned
      to such terms in the Series D Agreement. For purposes of this
      Agreement:

     

    (i)  The
      term
“Act”
means
      the Securities Act of 1933, as amended.

     

    (ii)  The
      term
“Form S-3”
means
      such form under the Act as in effect on the date hereof or any registration
      form
      under the Act subsequently adopted by the SEC that permits inclusion or
      incorporation of substantial information by reference to other documents filed
      by the Company with the SEC.

     

    (iii)  The
      term
“Holder”
means
      any person owning or having the right to acquire Registrable Securities or
      any
      assignee thereof in accordance with Section 1.11 hereof; provided, however,
      that the Founders shall not be deemed to be Holders for purposes of
      Section 1.2, 1.12 and 1.11.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (iv)  The
      term
“Major
      Holder”
means
      a
      Holder that holds at least 3% of the Registrable Securities then outstanding;
      provided however, that each of TI, CDIB and Grindylow Group Ltd. (“Grindylow”)
      shall
      each be considered a Major Holder for so long as it holds at least 2% of the
      Registrable Securities and further provided that PMC-Sierra, Inc. ("PMC-Sierra")
      shall
      be considered a Major Holder for so long as it holds more than 1.5% of the
      Registrable Securities.

     

    (v)  The
      term
“Major
      Investor”
means
      an Investor that holds at least 3% of the Registrable Securities then
      outstanding, provided however, that Grindylow shall be considered a “Major
      Investor” for so long as it holds at least 2% of the Registrable Securities then
      outstanding (on an as-converted basis) and further provided that PMC-Sierra
      shall be considered a Major Investor for so long as it holds more than 1.5%
      of
      the Registrable Securities then outstanding (on an as-converted basis).

     

    (vi)  The
      term
“Initial
      Offering”
means
      the Company’s first firm commitment underwritten public offering of its Common
      Stock under the Act. 

     

    (vii)  The
      term
“1934
      Act”
means
      the Securities Exchange Act of 1934, as amended.

     

    (viii)  The
      term
“Common
      Stock”
means
      the Company’s Common Stock, par value $0.001 per share.

     

    (ix)  The
      term
“Preferred
      Stock”
means
      the Company’s Series A Preferred Stock, par value $0.001 per share, the
      Company’s Series B Preferred Stock, par value $0.001 per share, the Company’s
      Series C Preferred Stock, par value $0.001 per share and the Company’s Series D
      Preferred Stock, par value $0.001 per share (the “Series
      D Preferred Stock”)
      issued
      to the Investors, as defined in the Series D Agreement.

     

    (x)  The
      term
“register,”
      “registered,”
and
      “registration”
refer
      to a registration effected by preparing and filing a registration statement
      or
      similar document in compliance with the Act, and the declaration or ordering
      of
      effectiveness of such registration statement or document.

     

    (xi)  The
      term
“Preferred
      Registrable Securities”
means
      (i) the Common Stock issuable or issued upon conversion of the Preferred
      Stock, (ii) any Common Stock of the Company issued as (or issuable upon the
      conversion or exercise of any warrant, right or other security that is issued
      as) a dividend or other distribution with respect to, or in exchange for, or
      in
      replacement of, the shares referenced in (i) above, excluding in all cases,
      however, any Registrable Securities sold by a person in a transaction in which
      his rights under this Section 1 are not assigned.

    
    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (xii)  The
      term
“Founder
      Registrable Securities”
means
      (i)  Common Stock held by the Founders as of the date of the signing of
      this Agreement, provided, however, that such shares of Common Stock shall not
      be
      deemed Registrable Securities for the purposes of Section 1.2, 1.11 and
      1.12 and (ii) any Common Stock of the Company issued as (or issuable upon
      the conversion or exercise of any warrant, right or other security that is
      issued as) a dividend or other distribution with respect to, or in exchange
      for,
      or in replacement of, the shares referenced in (i) above, excluding in all
      cases, however, any Registrable Securities sold by a Founder in a transaction
      in
      which his rights under this Section 1 are not assigned.

     

    (xiii)  The
      term
“Registrable
      Securities”
means
      Preferred Registrable Securities and Founder Registrable
      Securities.

     

    (xiv)  The
      term
“Merger
      and Acquisition"
      means
      (A) the
      acquisition of this Company by another entity by means of any transaction or
      series of related trans-actions (including, without limitation, any
      reorganization, merger or consolidation) that results in the transfer of fifty
      percent (50%) or more of the outstanding voting power of this corporation;
      or
      (B) 
a
      sale of all or substantially all of the Company’s assets or shares.

     

    (xv)  The
      number of shares of "Registrable
      Securities then outstanding"
      shall
      be determined by the number of Common Stock outstanding, calculated on an
      as-converted basis, which are Registrable Securities.

     

    (xvi)  “Permitted
      Transferee”
means
      with regards to any shareholder of the Company, any person or entity, directly
      or indirectly, that controls or is controlled by or is under common control
      with
      such shareholder, any corporation wholly owned by such shareholder, the
      shareholders of such shareholder, the spouse or member of such shareholder’s
      immediate family, or a custodian, trustee (including a trustee of a voting
      trust), executor, or other fiduciary for the account of such shareholder’s
      spouse or members of such shareholder’s immediate family, or a trust for such
      shareholder’s own self, or a charitable remainder trust, or, if the shareholder
      is a partnership, any partner of the partnership or any other partnership or
      other entity managed by the same manager, and the general or limited partners
      or
      managing entities of such shareholder, or any affiliate of such shareholder
      or
      partner under common or related management or control with such shareholder,
      and
      in the case of either Genesis Partners II LDC or Genesis Partners II (Israel)
      L.P., either of Genesis Partners I L.P. or Genesis Partners I (Cayman) L.P.,
      provided that each such transferee or assignee, prior to the completion of
      the
      sale, transfer, or assignment shall have executed documents assuming the
      obligations of such shareholder under this Agreement. 

     

    Rights
      to
      transfer shares of the Company to a Permitted Transferee are intended to
      facilitate a shareholder's allocation of such shareholder's shares of the
      Company among commonly controlled or similarly situated persons or entities
      and
      are not intended to be used to facilitate a change in control of the
      Company.

    

    (xvii)  “TI”
means
      Texas Instruments Incorporated, a company incorporated under the laws of the
      state of Delaware.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    1.2  Request
      for Registration.

     

    (i)  Subject
      to the conditions of this Section 1.2, if the Company shall receive within
      the five (5) year period commencing 90 days after the effective date of the
      Initial Offering a written request from the Holders of at least 35% of the
      Preferred Registrable Securities then outstanding (the “Initiating
      Holders”)
      that
      the Company file a registration statement under the Act covering the
      registration of Registrable Securities that requests the registration of shares
      in a minimum amount of five million United States dollars ($5,000,000), then
      the
      Company shall, within twenty (20) days of the receipt thereof, give written
      notice of such request to all Holders, and subject to the limitations of this
      Section 1.2, use best efforts to effect, as soon as practicable, the
      registration under the Act of all Registrable Securities that the Holders
      request to be registered in a written request received by the Company within
      twenty (20) days of the mailing of the Company’s notice pursuant to this
      Section 1.2(i).

     

    (ii)  If
      the
      Initiating Holders intend to distribute the Registrable Securities covered
      by
      their request by means of an underwriting, they shall so advise the Company
      as a
      part of their request made pursuant to this Section 1.2 and the Company
      shall include such information in the written notice referred to in
      Section 1.2(i). In such event the right of any Holder to include its
      Registrable Securities in such registration shall be conditioned upon such
      Holder’s participation in such underwriting and the inclusion of such Holder’s
      Registrable Securities in the underwriting (unless otherwise mutually agreed
      by
      a majority in interest of the Initiating Holders and such Holder) to the extent
      provided herein. All Holders proposing to distribute their securities through
      such underwriting shall enter into an underwriting agreement in customary form
      with the underwriter or underwriters selected for such underwriting by a
      majority in interest of the Initiating Holders which underwriter or underwriters
      shall be reasonably acceptable to a majority in interest of the Initiating
      Holders.

     

    (iii)  If
      the
      underwriter advises the Company that marketing factors require a limitation
      of
      the number of securities underwritten (including Registrable Securities), then
      the Company shall so advise all Holders of Registrable Securities that would
      otherwise be underwritten pursuant hereto, and the number of shares that may
      be
      included in the underwriting shall be allocated to the Holders of such
      Registrable Securities on a pro rata basis based on the number of Registrable
      Securities held by all such Holders (including the Initiating Holders). Any
      Registrable Securities excluded or withdrawn from such underwriting shall be
      withdrawn from the registration.

     

    (iv)  The
      Company shall not be required to effect a registration pursuant to this
      Section 1.2:

     

    (a)
      in
      any particular jurisdiction in which the Company would be required to execute
      a
      general consent to service of process in effecting such registration, unless
      the
      Company is already subject to service in such jurisdiction and except as may
      be
      required under the Act; or

     

    (b)
      after
      the Company has effected two (2) registrations pursuant to this
      Section 1.2, and such registrations have been declared or ordered
      effective; or

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (c)
      during the period starting with the date sixty (60) days prior to the
      Company’s good faith estimate of the date of the filing of, and ending on a date
      one hundred eighty (180) days following the effective date of, or, if
      earlier, upon completion of the distribution contemplated by, a
      Company-initiated registration subject to Section 1.3 below, provided that
      the Company is actively employing in good faith all reasonable efforts to cause
      such registration statement to become effective; or

     

    (d)
      if
      the Initiating Holders propose to dispose of Registrable Securities that may
      be
      registered on Form S-3 pursuant to Section 1.4 hereof; or

     

    (e)
      if
      the Company shall furnish to Holders requesting a registration statement
      pursuant to this Section 1.2, a certificate signed by the Chairman of the
      Board stating that in the good faith judgment of the Board of Directors of
      the
      Company, it would be seriously detrimental to the Company and its shareholders
      for such registration statement to be effected at such time, in which event
      the
      Company shall have the right to defer such filing for a period of not more
      than
      ninety (90) days after receipt of the request of the Initiating Holders,
      provided that such right to delay a request shall be exercised by the Company
      not more than once in any twelve (12)-month period.

     

    1.3  Company
      Registration.
      If (but
      without any obligation to do so) the Company proposes to register (including
      for
      this purpose a registration effected by the Company for shareholders other
      than
      the Holders) any of its stock or other securities under the Act in connection
      with the public offering of such securities (other than: (a) a registration
      relating solely to the sale of securities to participants in a Company stock
      plan, (b) a registration relating to a corporate reorganization, merger,
      acquisition or other transaction under Rule 145 of the Act, (c) a
      registration on any form that does not include substantially the same
      information as would be required to be included in a registration statement
      covering the sale of the Registrable Securities which, for the sake of
      clarification, shall not be deemed to include a registration on Form S-3 or
      any
      equivalent form), or (d) a registration in which the only Common Stock being
      registered is Common Stock issuable upon conversion of debt securities that
      are
      also being registered), the Company shall, at such time, promptly give each
      Holder written notice of such registration. Upon the written request of each
      Holder given within twenty (20) days after mailing of such notice by the Company
      in accordance with Section 3.5, the Company shall, subject to the
      provisions of Section 1.3(ii), use all reasonable efforts to cause to be
      registered under the Act all of the Registrable Securities that each such Holder
      has requested to be registered.

     

    (i)  Right
      to Terminate Registration.
      The
      Company shall have the right to terminate or withdraw any registration initiated
      by it under this Section 1.3 prior to the effectiveness of such
      registration whether or not any Holder has elected to include securities in
      such
      registration. The expenses of such withdrawn registration shall be borne by
      the
      Company in accordance with Section 1.7 hereof.

     

    (ii)  Underwriting
      Requirements.
      In
      connection with any offering involving an underwriting of shares of the
      Company’s capital stock, the Company shall not be required under this
      Section 1.3 to include any of the Holders’ securities in such underwriting
      unless they accept the terms of the underwriting, in customary form, as agreed
      upon between the Company and the underwriters selected by it (or by other
      persons entitled to select the underwriters) and enter into an underwriting
      agreement in customary form with an underwriter or underwriters selected by
      the
      Company and approved by majority in interest of holders of Preferred Registrable
      Securities, and then only in such quantity as the underwriters determine in
      their sole discretion will not materially and adversely jeopardize the success
      of the offering by the Company. If the total amount of securities, including
      Registrable Securities, requested by Holders to be included in such offering
      exceeds the amount of securities sold other than by the Company that the
      underwriters determine in their sole discretion could materially and adversely
      jeopardize the success of the offering, then the Company shall be required
      to
      include in the offering only that number of such securities, including
      Registrable Securities, that the underwriters determine in their sole discretion
      will not materially and adversely jeopardize the success of the offering, the
      securities so included to be apportioned among the holders of Registrable
      Securities requested to be included in such offering and among the holders
      of
      the Founder Registrable Securities requested to be included in such offering
      as
      follows: 75% of the shares to be sold by shareholders shall be allocated among
      the holders of Preferred Registrable Securities and 25% shall be allocated
      between the holders of the Founder Registrable Securities, with the internal
      allocation among such groups being on a pro rata basis based on the number
      of
      Registrable Securities held by all the holders requested to be included in
      such
      offering, provided however, that in no event shall the number of Founder
      Registrable Securities sold by any Founder (as a percentage of all shares sold
      in the offering by shareholders) exceed the Founder’s percentage holding in the
      Company. 

     

    
      
        
        

      

      
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    (iii)  For
      purposes of the preceding parenthetical concerning apportionment, for any
      Stockholder that is a Holder of Registrable Securities that is a partnership
      or
      corporation, the partners, retired partners and stockholders of such Holder,
      or
      the estates and family members of any such partners and retired partners and
      any
      trusts for the benefit of any of the foregoing persons (“Related Party”) shall
      be deemed to be a single “Holder,” as applicable and any pro rata reduction with
      respect to such “Holder” shall be based upon the aggregate amount of Registrable
      Securities owned by all such related entities and individuals.

     

    1.4  Form
      S-3 Registration.
      In case
      the Company shall receive from the (i) Initiating Holders (as such term is
      defined in section 1.2 above) or (ii) the Holders of the majority in interest
      of
      the Founder Registrable Securities ("Initiating
      Founders"),
      a
      written request or requests that the Company effect a registration on
      Form S-3 and any related qualification or compliance with respect to all or
      a part of the Registrable Securities owned by such Holder or Holders, the
      Company shall:

     

    (i)  promptly
      give written notice of the proposed registration, and any related qualification
      or compliance, to all other Holders; and

     

    (ii)  use
      best
      efforts to effect, as soon as practicable, such registration and all such
      qualifications and compliances as may be so requested and as would permit or
      facilitate the sale and distribution of all or such portion of such Holders’
Registrable Securities as are specified in such request, together with all
      or
      such portion of the Registrable Securities of any other Holders joining in
      such
      request as are specified in a written request given within fifteen (15) days
      after receipt of such written notice from the Company, provided, however, that
      the Company shall not be obligated to effect any such registration,
      qualification or compliance, pursuant to this section 1.4:

     

    
      
        
        

      

      
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    (a)
      if
      Form S-3 is not available for such offering by the Holders;

     

    (b)
      if
      the Company shall furnish to the Holders a certificate signed by the Chairman
      of
      the Board of the Company stating that in the good faith judgment of the Board
      of
      Directors of the Company, it would be seriously detrimental to the Company
      and
      its shareholders for such Form S-3 Registration to be effected at such
      time, in which event the Company shall have the right to defer the filing of
      the
      Form S-3 registration statement for a period of not more than ninety (90)
      days after receipt of the request of the Holder or Holders under this
      Section 1.4; provided, however, that the Company shall not utilize this
      right more than once in any twelve month period;

     

    (c)
      in
      any particular jurisdiction in which the Company would be required to qualify
      to
      do business or to execute a general consent to service of process in effecting
      such registration, qualification or compliance.

     

    (iii)  Subject
      to the foregoing, the Company shall file a registration statement covering
      the
      Registrable Securities and other securities so requested to be registered as
      soon as practicable after receipt of the request or requests of the Holders.
      Registrations effected pursuant to this Section 1.4 shall not be counted as
      requests for registration effected pursuant to Sections 1.2.

     

    1.5  Obligations
      of the Company.
      Whenever required under this Section 1 to effect the registration of any
      Registrable Securities, the Company shall, as expeditiously as reasonably
      possible:

     

    (i)  prepare
      and file with the SEC a registration statement with respect to such Registrable
      Securities and use best efforts to cause such registration statement to become
      effective, and, upon the request of the Holders of a majority of the Registrable
      Securities registered thereunder, keep such registration statement effective
      for
      a period of up to one hundred eighty (180) days or, if earlier, until the
      distribution contemplated in the Registration Statement has been
      completed;

     

    (ii)  prepare
      and file with the SEC such amendments and supplements to such registration
      statement and the prospectus used in connection with such registration statement
      as may be necessary to comply with the provisions of the Act with respect to
      the
      disposition of all securities covered by such registration
      statement;

     

    (iii)  furnish
      to the Holders such numbers of copies of a prospectus, including a preliminary
      prospectus, in conformity with the requirements of the Act, and such other
      documents as they may reasonably request in order to facilitate the disposition
      of Registrable Securities owned by them;

     

    
      
        
        

      

      
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    (iv)  use
      best
      efforts to register and qualify the securities covered by such registration
      statement under such other securities or Blue Sky laws of such jurisdictions
      as
      shall be reasonably requested by the Holders, provided that the Company shall
      not be required in connection therewith or as a condition thereto to qualify
      to
      do business or to file a general consent to service of process in any such
      states or jurisdictions;

     

    (v)  in
      the
      event of any underwritten public offering, enter into and perform its
      obligations under an underwriting agreement, in usual and customary form, with
      the managing underwriter of such offering;

     

    (vi)  notify
      each Holder of Registrable Securities covered by such registration statement
      at
      any time when a prospectus relating thereto is required to be delivered under
      the Act or the happening of any event as a result of which the prospectus
      included in such registration statement, as then in effect, includes an untrue
      statement of a material fact or omits to state a material fact required to
      be
      stated therein or necessary to make the statements therein not misleading in
      the
      light of the circumstances then existing;

     

    (vii)  notify
      each Holder of Registrable Securities covered by such registration statement,
      promptly after the Company shall receive notice thereof, of the time when such
      registration statement becomes effective or when any amendment or supplement
      or
      any prospectus forming a part of such registration has been filed.

     

    (viii)  notify
      each Holder of Registrable Securities covered by such registration statement,
      promptly of any request by the SEC for the amending of supplementing of such
      registration statement or prospectus for additional information.

     

    (ix)  advise
      each Holder whose Registrable Shares are included in such registration statement
      promptly after the Company shall receive notice or otherwise obtain knowledge
      of
      the issuance of any order by the SEC suspending the effectiveness of such
      registration statement or amendment thereto or of the initiation or threatening
      of any proceeding for that purpose; and promptly use its best efforts to prevent
      the issuance of any stop order or to obtain its withdrawal promptly if a stop
      order should be issued.

     

    (x)  use
      its
      best efforts to furnish, at the request of any Holder requesting registration
      of
      Registrable Securities pursuant to this agreement on the date that such
      Registrable Securities are delivered to the underwriters for sale in connection
      with a registration pursuant to this agreement, if such securities are being
      sold through underwriters, on the date that the registration statement with
      respect to such securities becomes effective, (i) an opinion, dated such date,
      of the counsel representing the Company for the purposes of such registration,
      in form and substance as is customarily given to underwriters in an underwritten
      public offering, addressed to the underwriters, if any, and (ii) a letter dated
      such date, from the independent certified public accountants of the Company,
      in
      form and substance as is customarily given by independent certified public
      accountants to underwriters in an underwritten public offering, addressed to
      the
      underwriters, if any.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (xi)  cause
      all
      such Registrable Securities registered pursuant hereunder to be listed on each
      securities exchange on which similar securities issued by the Company are then
      listed; and

     

    (xii)  provide
      a
      transfer agent and registrar for all Registrable Securities registered pursuant
      hereunder and a CUSIP number for all such Registrable Securities, in each case
      not later than the effective date of such registration.

     

    1.6  Information
      from Holder.
      It
      shall be a condition precedent to the obligations of the Company to take any
      action pursuant to this Section 1 with respect to the Registrable
      Securities of any selling Holder that such Holder shall furnish to the Company
      such information regarding itself, the Registrable Securities held by it, and
      the intended method of disposition of such securities as shall be required
      under
      the Act to effect the registration of such Holder’s Registrable
      Securities.

     

    1.7  Expenses
      of Registration.
      All
      expenses other than underwriting discounts and commissions incurred in
      connection with registrations, filings or qualifications pursuant to
      Sections 1.2, 1.3 and 1.4 including (without limitation) all registration,
      filing and qualification fees, printers’ and accounting fees, fees and
      disbursements of counsel for the Company and the reasonable fees and
      disbursements of one counsel for the selling Holders shall be borne by the
      Company. Notwithstanding the foregoing, the Company shall not be required to
      pay
      for any expenses of any registration proceeding begun pursuant to
      Section 1.2 or Section 1.4 if the registration request is subsequently
      withdrawn at the request of the Holders of a majority of the Registrable
      Securities to be registered (in which case all participating Holders shall
      bear
      such expenses pro rata based upon the number of Registrable Securities that
      were
      to be requested in the withdrawn registration), unless, in the case of a
      registration requested under Section 1.2, the Holders of a majority of the
      Registrable Securities agree to forfeit their right to one demand registration
      pursuant to Section 1.2, provided, however, that if at the time of such
      withdrawal, the Holders have learned of a material adverse change in the
      condition, business, or prospects of the Company that is different from that
      known to the Holders at the time of their request and have withdrawn the request
      with reasonable promptness following disclosure by the Company of such material
      adverse change, then the Holders shall not be required to pay any of such
      expenses and shall retain their rights pursuant to Section 1.2 or 1.4.

     

    1.8  Delay
      of Registration.
      No
      Holder shall have any right to obtain or seek an injunction restraining or
      otherwise delaying any such registration as the result of any controversy that
      might arise with respect to the interpretation or implementation of this
      Section 1.

     

    1.9  Indemnification.
      In the
      event any Registrable Securities are included in a registration statement under
      this Section 1:

     

    
      
        
        

      

      
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    (i)  To
      the
      extent permitted by law, the Company will indemnify and hold harmless each
      Holder, the partners or officers, directors and shareholders of each Holder,
      legal counsel and accountants for each Holder, any underwriter (as defined
      in
      the Act) for such Holder and each person, if any, who controls such Holder
      or
      underwriter within the meaning of the Act or the 1934 Act, against any losses,
      claims, damages or liabilities (joint or several) to which they may become
      subject under the Act, the 1934 Act or any state securities laws, insofar as
      such losses, claims, damages, or liabilities (or actions in respect thereof)
      arise out of or are based upon any of the following statements, omissions or
      violations (collectively a “Violation”): (i) any untrue statement or
      alleged untrue statement of a material fact contained in such registration
      statement, including any preliminary prospectus or final prospectus contained
      therein or any amendments or supplements thereto, (ii) the omission or
      alleged omission to state therein a material fact required to be stated therein,
      or necessary to make the statements therein not misleading, or (iii) any
      violation or alleged violation by the Company of the Act, the 1934 Act, any
      state securities laws or any rule or regulation promulgated under the Act,
      the
      1934 Act or any state securities laws; and the Company will reimburse each
      such
      Holder, underwriter or controlling person for any legal or other expenses
      reasonably incurred by them in connection with investigating or defending any
      such loss, claim, damage, liability or action; provided, however, that the
      indemnity agreement contained in this subsection l.9(i) shall not apply to
      amounts paid in settlement of any such loss, claim, damage, liability or action
      if such settlement is effected without the consent of the Company (which consent
      shall not be unreasonably withheld), nor shall the Company be liable in any
      such
      case for any such loss, claim, damage, liability or action to the extent that
      it
      arises out of or is based upon a Violation that occurs in reliance upon and
      in
      conformity with written information furnished expressly for use in connection
      with such registration by any such Holder, underwriter or controlling person;
      provided further, however, that the foregoing indemnity agreement with respect
      to any preliminary prospectus shall not inure to the benefit of any Holder
      or
      underwriter, or any person controlling such Holder or underwriter, from whom
      the
      person asserting any such losses, claims, damages or liabilities purchased
      shares in the offering, if a copy of the prospectus (as then amended or
      supplemented if the Company shall have furnished any amendments or supplements
      thereto) was not sent or given by or on behalf of such Holder or underwriter
      to
      such person, if required by law so to have been delivered, at or prior to the
      written confirmation of the sale of the shares to such person, and if the
      prospectus (as so amended or supplemented) would have cured the defect giving
      rise to such loss, claim, damage or liability.

     

    (ii)  To
      the
      extent permitted by law, each selling Holder will indemnify and hold harmless
      the Company, each of its directors, each of its officers who has signed the
      registration statement, each person, if any, who controls the Company within
      the
      meaning of the Act, legal counsel and accountants for the Company, any
      underwriter, any other Holder selling securities in such registration statement
      and any controlling person of any such underwriter or other Holder, against
      any
      losses, claims, damages or liabilities (joint or several) to which any of the
      foregoing persons may become subject, under the Act, the 1934 Act or any state
      securities laws, insofar as such losses, claims, damages or liabilities (or
      actions in respect thereto) arise out of or are based upon any Violation, in
      each case to the extent (and only to the extent) that such Violation occurs
      in
      reliance upon and in conformity with written information furnished by such
      Holder expressly for use in connection with such registration; and each such
      Holder will reimburse any person intended to be indemnified pursuant to this
      subsection l.9(ii), for any legal or other expenses reasonably incurred by
      such
      person in connection with investigating or defending any such loss, claim,
      damage, liability or action; provided, however, that the indemnity agreement
      contained in this subsection l.9(ii) shall not apply to amounts paid in
      settlement of any such loss, claim, damage, liability or action if such
      settlement is effected without the consent of the Holder (which consent shall
      not be unreasonably withheld), provided that in no event shall any indemnity
      under this subsection l.9(ii) exceed the gross proceeds from the offering
      received by such Holder.

     

    
      
        
        

      

      
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    (iii)  Promptly
      after receipt by an indemnified party under this Section 1.9 of notice of
      the commencement of any action (including any governmental action), such
      indemnified party will, if a claim in respect thereof is to be made against
      any
      indemnifying party under this Section 1.9, deliver to the indemnifying
      party a written notice of the commencement thereof and the indemnifying party
      shall have the right to participate in, and, to the extent the indemnifying
      party so desires, jointly with any other indemnifying party similarly noticed,
      to assume the defense thereof with counsel selected by the indemnifying party;
      provided, however, that an indemnified party (together with all other
      indemnified parties that may be represented without conflict by one counsel)
      shall have the right to retain one separate counsel, with the fees and expenses
      to be paid by the indemnifying party, if representation of such indemnified
      party by the counsel retained by the indemnifying party would be inappropriate
      due to actual or potential differing interests between such indemnified party
      and any other party represented by such counsel in such proceeding. The failure
      to deliver written notice to the indemnifying party within a reasonable time
      of
      the commencement of any such action, if prejudicial to its ability to defend
      such action, shall relieve such indemnifying party of any liability to the
      indemnified party under this Section 1.9, but the omission so to deliver
      written notice to the indemnifying party will not relieve it of any liability
      that it may have to any indemnified party otherwise than under this
      Section 1.9.

     

    (iv)  If
      the
      indemnification provided for in this Section 1.9 is held by a court of
      competent jurisdiction to be unavailable to an indemnified party with respect
      to
      any loss, liability, claim, damage or expense referred to herein, then the
      indemnifying party, in lieu of indemnifying such indemnified party hereunder,
      shall contribute to the amount paid or payable by such indemnified party as
      a
      result of such loss, liability, claim, damage or expense in such proportion
      as
      is appropriate to reflect the relative fault of the indemnifying party on the
      one hand and of the indemnified party on the other in connection with the
      statements or omissions that resulted in such loss, liability, claim, damage
      or
      expense, as well as any other relevant equitable considerations. The relative
      fault of the indemnifying party and of the indemnified party shall be determined
      by reference to, among other things, whether the untrue or alleged untrue
      statement of a material fact or the omission to state a material fact relates
      to
      information supplied by the indemnifying party or by the indemnified party
      and
      the parties’ relative intent, knowledge, access to information, and opportunity
      to correct or prevent such statement or omission.

     

    (v)  Notwithstanding
      the foregoing, to the extent that the provisions on indemnification and
      contribution contained in the underwriting agreement entered into in connection
      with the underwritten public offering are in conflict with the foregoing
      provisions, the provisions in the underwriting agreement shall
      control.

     

    (vi)  The
      obligations of the Company and Holders under this Section 1.9 shall survive
      the completion of any offering of Registrable Securities in a registration
      statement under this Section 1, and otherwise.

     

    
      
        
        

      

      
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    1.10  Reports
      Under Securities Exchange Act of 1934.
      With a
      view to making available to the Holders the benefits of Rule 144
      promulgated under the Act and any other rule or regulation of the SEC that
      may
      at any time permit a Holder to sell securities of the Company to the public
      without registration or pursuant to a registration on Form S-3, the Company
      agrees to:

     

    (i)  make
      and
      keep public information available, as those terms are understood and defined
      in
      SEC Rule 144, at all times after the effective date of the Initial
      Offering;

     

    (ii)  file
      with
      the SEC in a timely manner all reports and other documents required of the
      Company under the Act and the 1934 Act; and

     

    (iii)  furnish
      to any Holder, so long as the Holder owns any Registrable Securities, forthwith
      upon request (i) a written statement by the Company that it has complied
      with the reporting requirements of SEC Rule 144 (at any time after ninety
      (90) days after the effective date of the first registration statement filed
      by
      the Company), the Act and the 1934 Act (at any time after it has become subject
      to such reporting requirements), or that it qualifies as a registrant whose
      securities may be resold pursuant to Form S-3 (at any time after it so
      qualifies), (ii) a copy of the most recent annual or quarterly report of
      the Company and such other reports and documents so filed by the Company, and
      (iii) such other information as may be reasonably requested in availing any
      Holder of any rule or regulation of the SEC that permits the selling of any
      such
      securities without registration or pursuant to such form.

     

    1.11  Assignment
      of Registration Rights.
      The
      rights to cause the Company to register Registrable Securities pursuant to
      this
      Agreement may be assigned or transferred (but only with all related obligations)
      by a Holder. In the event that a Holder transfers such right to any person
      or
      entity other than a Permitted Transferee and such transferee is entitled to
      sell
      all of his Preferred Registrable Securities under Rule 144 during any one
      quarter, then such transferee shall not have the rights under and shall not
      be
      bound by Section 1 herein. 

     

    1.12  Limitations
      on Subsequent Registration Rights.
      From
      and after the date of this Agreement, the Company shall not, without the prior
      written consent of the Holders of sixty percent (60%) of the Preferred
      Registrable Securities, enter into any agreement with any holder or prospective
      holder of any securities of the Company that would allow such holder or
      prospective holder (a) to include such securities in any registration filed
      under Section 1.3 and 1.4 hereof, unless under the terms of such agreement,
      such holder or prospective holder may include such securities in any such
      registration only to the extent that the inclusion of such securities will
      not
      reduce the amount of the Registrable Securities of the Holders that are included
      or (b) to demand registration of their securities. 

     

    1.13  “Market
      Stand-Off” Agreement.
      Each
      Holder hereby agrees that it will not, without the prior written consent of
      the
      managing underwriter, during the period commencing on the date of the final
      prospectus relating to the Company’s initial public offering and ending on the
      date specified by the Company and the managing underwriter (such period not
      to
      exceed one hundred eighty (l80) days) (i) lend, offer, pledge, sell,
      contract to sell, sell any option or contract to purchase, purchase any option
      or contract to sell, grant any option, right or warrant to purchase, or
      otherwise transfer or dispose of, directly or indirectly, any shares of Common
      Stock or any securities convertible into or exercisable or exchangeable for
      Common Stock (whether such shares or any such securities are then owned by
      the
      Holder or are thereafter acquired), or (ii) enter into any swap or other
      arrangement that transfers to another, in whole or in part, any of the economic
      consequences of ownership of the Common Stock, whether any such transaction
      described in clause (i) or (ii) above is to be settled by delivery of
      Common Stock or such other securities, in cash or otherwise. The foregoing
      provisions of this Section 1.13 shall apply only to the Company’s initial
      public offering of equity securities, shall not apply to the sale of any shares
      to an underwriter pursuant to an underwriting agreement, and shall only be
      applicable to the Holders if all officers and directors and greater than five
      percent (5%) shareholders of the Company enter into similar agreements. The
      underwriters in connection with the Company’s initial public offering are
      intended third party beneficiaries of this Section 1.13 and shall have the
      right, power and authority to enforce the provisions hereof as though they
      were
      a party hereto. In order to enforce the foregoing covenant, the Company may
      impose stop-transfer instructions with respect to the Registrable Securities
      of
      each Holder (and the shares or securities of every other person subject to
      the
      foregoing restriction) until the end of such period.

     

    
      
        
        

      

      
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    1.14  Limitation
      on Amendment.
      The
      Company shall not adversely amend the registration rights of the Founders
      without the prior written consent of at least one of the Founders. 

     

    2.  Covenants
      of the Company.

     

    2.1  Accounting
      and Delivery of Financial Statements.
      The
      Company shall maintain a standard system of accounting established and
      administered in accordance with generally accepted accounting principles and
      until the Initial Offering shall deliver to each Major Investor:

     

    (i)  as
      soon
      as practicable, but in any event within sixty (60) days after the end of each
      fiscal year of the Company, a consolidated income statement for such fiscal
      year, a consolidated balance sheet of the Company and statement of shareholder’s
      equity as of the end of such year, and a consolidated statement of cash flows
      for such year, such year-end financial reports to be in reasonable detail,
      prepared in accordance with generally accepted accounting principles (“GAAP”),
      and audited and certified by one of the “Big Four” independent public accountant
      firms, selected by the Company.

     

    (ii)  as
      soon
      as practicable, but in any event within thirty (30) days after the end of each
      of the first three (3) quarters of each fiscal year of the Company, an unaudited
      and reviewed income statement, statement of cash flows for such fiscal quarter
      and an unaudited and reviewed balance sheet as of the end of such fiscal
      quarter, in a form acceptable to the majority of the directors nominated by
      the
      holders of Preferred Registrable Securities. The aforesaid reports shall be
      in
      reasonable detail, prepared in accordance with GAAP consistently applied with
      prior practice for earlier periods, unless 75% of the Directors appointed by
      the
      Investors approve otherwise.

     

    
      
        
        

      

      
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    (iii)  within
      fifteen (15) days of the end of each month, a short form report as determined
      by
      the Board of Directors of the Company for and as of the end of such month,
      in
      reasonable detail;

     

    (iv)  as
      soon
      as practicable, but in any event at least fifteen (15) days prior to the end
      of
      each fiscal year, a budget and business plan for the next fiscal year, prepared
      on a monthly basis, including operating budget, balance sheets, income
      statements and statements of cash flows for such months and, as soon as
      prepared, any other budgets or revised budgets prepared by the
      Company;

     

    (v)  with
      respect to the financial statements called for in subsection(ii) of this
      Section 2.1, an instrument executed by the Chief Financial Officer or
      President of the Company certifying that such financials were prepared in
      accordance with the terms of section 2.1(ii) above and fairly present the
      financial condition of the Company and its results of operation for the period
      specified, subject to year-end audit adjustment; and

     

    (vi)  such
      other information relating to the financial condition, business, prospects
      or
      corporate affairs of the Company as the Major Investor or any assignee of the
      Investor may from time to time reasonably request; and

     

    (vii)  prompt
      notice of any litigation or material adverse claims or disputes.

     

    (viii)  Each
      of
      the Founders shall be entitled to receive (i) all the information under this
      Section 2.1 as long as such Founder is employed by the Company and serves as
      a
      director on the Company’s Board of Directors; (ii) the annual report under
      Section 2.1(i) as long as such Founder qualifies as a Major Holder.

     

    2.2  Inspection.
      The
      Company shall permit each Major Investor, at such Major Investor’s expense, to
      visit and inspect the Company’s properties, to examine its books of account and
      records and to discuss the Company’s affairs, finances and accounts with its
      officers, all at such reasonable times as may be requested by the Investor;
      provided, however, that the Company shall not be obligated pursuant to this
      Section 2.2 to provide access to any information that it reasonably
      considers to be a trade secret or similar confidential information of such
      nature that ought not properly be disclosed to such Investor. Notwithstanding
      anything stated herein, inspection and observer rights of PMC-Sierra shall
      be as
      stated in the Board Observation Rights Letter that appears as Exhibit
      F
      to the
      Series D Agreement, unless and until PMC-Sierra and the Company mutually agree
      otherwise.

     

    2.3  Assignment
      of Rights.
      Unless
      specifically provided otherwise, the rights and obligations pursuant to
      subsections 2.1 and 2.2 may be assigned or otherwise conveyed by a Major Holder
      or subsequent transferee only to a holder which holds immediately after such
      transfer more than 5% of the Preferred Registrable Securities, as long as such
      assignment is together with all or any of the Preferred Shares referred to
      in
      such subsection and is not to a party which may compete with the
      Company.
      The
      aforesaid limitation shall not apply to such transfer of rights and obligations
      pursuant to subsections 2.1 and 2.2 to any Permitted Transferee. 

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    3.  Pre-emptive
      Rights.

     

    3.1  Subject
      to the terms and conditions specified in this Section 3, the Company hereby
      grants to each Major Investor until the Initial Offering a pre-emptive right
      with respect to future sales by the Company of its Shares. For purposes of
      this
      Section 3, Major Investor includes any general partners and affiliates if a
      Major Investor is a partnership. A Major Investor shall be entitled to apportion
      the right of first offer hereby granted it among itself and its partners and
      affiliates in such proportions as it deems appropriate, provided that such
      Major
      Investor is a partnership.

     

    3.2  Each
      time
      the Company proposes to offer any shares of, or securities convertible into
      or
      exchangeable or exercisable for any shares of, any class of its capital stock
      (“Shares”), the Company shall first make an offering of such Shares to each
      Major Investor in accordance with the following provisions.

     

    (i)  The
      Company shall deliver a notice in accordance with Section 3.5
      (“Notice”)
      to the
      Major Investor stating (i) its bona fide intention to offer such Shares,
      (ii) the number of such Shares to be offered, and (iii) the price and
      terms upon which it proposes to offer such Shares.

     

    (ii)  By
      written notification received by the Company, within twenty (20) calendar days
      after receipt of the Notice, the Major Investor may elect to purchase or obtain,
      at the price and on the terms specified in the Notice, up to two times the
      Major
      Investor’s Pro Rata Portion of the Shares. For purposes of this Section 3,
“Pro
      Rata Portion”
shall
      equal a fraction, the numerator of which is the number of shares of Common
      Stock
      issued or issuable upon conversion of other securities then held by a Major
      Investor, and the denominator of which is the total number of shares of Common
      Stock of the Company then issued and outstanding (assuming full conversion
      of
      all convertible securities; for avoidance of doubt employee options shall not
      be
      viewed as convertible securities) provided however that the right of all the
      Major Investors together under this Section 3.2(ii) shall be in any event
      limited to two thirds (2/3) of the Shares the Company proposes to
      offer.

     

    (iii)  If
      a
      Major Investor does not exercise in full its right under this Section 3.2,
      or if
      such right is limited in accordance with Section 3.2(vii) herein below, the
      other Major Investors shall have the right to purchase that number of Shares
      that were not purchased by such Major Investor by giving written notice of
      their
      intention within three (3) business days after receiving a notice from the
      Company setting forth the amount of unsubscribed shares. Shares subscribed
      for
      under this clause (iii) shall be allocated among the Major Investors based
      on
      each such Major Investor’s Pro-Rata Portion. To the extent that any of the
      Shares that Major Investors are entitled to obtain are not elected to be
      obtained as provided in subsection 3.2 hereof, the Company may, during the
      ninety (90) day period following the expiration of the period provided in
      subsections 3.2(ii) and (iii) hereof, offer the remaining unsubscribed
      portion of such Shares to any person or persons at a price not less than, and
      upon terms no more favorable to the offeree than those specified in the Notice.
      If the Company does not enter into an agreement for the sale of the Shares
      within such period, or if such agreement is not consummated within ninety (90)
      days of the execution thereof, the right provided hereunder shall be deemed
      to
      be revived and such Shares shall not be offered unless first reoffered to the
      Major Investors in accordance herewith.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (iv)  “Shares”
shall
      not include: (i) the issuance or sale of shares of stock (or options
      therefor) to employees, directors and consultants under stock plans approved
      by
      the Company’s Board of Directors; (ii) the issuance of securities pursuant
      to the conversion or exercise of convertible or exercisable securities; (iii)
      any dividend payable in shares of Common Stock or any shares issued upon a
      subdivision or combination of such shares; (iv) the issuance of securities
      in
      connection with acquisitions of assets, businesses or companies, made by the
      Company or settlements of claims involving the Company (v) the issuance of
      securities constituting up to 10% of the outstanding share capital of the
      Company immediately prior to such issuance, to a Strategic Investor, (herein
      defined as an entity that has entered into a material agreement with the Company
      such as an OEM agreement, agreement for purchase and/or sale of goods, or a
      joint project), which Strategic Investor has been designated as a Strategic
      Investor by a majority of the Board of Directors with the affirmative vote
      of at
      least two of the Board members appointed by the holders of Preferred Stock;
      and
      (vi) issuance of securities or warrants to a lending institution in connection
      with a Hybrid Financing, as defined in and subject to subsection 3.2 (v )
      below.

     

    (v)  In
      the
      event the Company desires to obtain any loan or credit facility under a loan
      arrangement from a lending institution stipulating the issuance of a warrant
      or
      an obligation of the Company to issue any securities of the Company to the
      lending institution (a “Hybrid
      Financing”),
      then
      the Major Investors will have the right to provide the Company with such Hybrid
      Financing on the same terms and conditions that were offered to the Company
      by
      such lending institution in the same manner as outlined in Sections 3.2(i)-(iv),
      provided that the Major Investors, in the aggregate, take up the full amount
      of
      the Hybrid Financing. 

     

    (vi)  As
      long
      as a Founder is (i) either employed by the Company or serves as a director
      on
      the Company’s Board of Directors; and (ii) holds more than 5% of the Company’s
      outstanding share capital, such Founder shall have a pre-emptive right with
      respect to the Shares that are not required to be offered to the Major Investors
      under Section 3.2(ii), up to the proportion between the number of shares of
      Common Stock issued and held by such Founder to the total number of shares
      outstanding (on an as converted basis). For the sake of clarity, said Founder
      shall not be entitled to purchase any shares that were not purchased by the
      Major Investors and/or the other Founder under this Section 3. The pre-emptive
      right of the Founders under this Section 3.2(vi) shall lapse with respect to
      any
      issuance of securities by the Company, if the Major Investors have waived fifty
      percent (50%) or more of their pre-emptive right with respect to such round
      of
      share issuances. The pre-emptive right of the Founders shall be exercised
      according to the procedure set forth in Sections 3.2(i)-(iv) and as a part
      thereof.

     

    (vii)  Notwithstanding
      anything to the contrary in this Section 3, Marvell Semiconductor Israel Ltd.’s
      right to pre-emption shall be limited so that its holdings in the Company,
      directly or indirectly, shall not exceed 16.66% of the share capital of the
      Company, on an as-converted, fully-diluted basis. 

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    4.  The
      Board of Directors

     

    4.1  Size
      of Board of Directors.
      The
      Board
      of Directors shall consist of up to seven (7) members. Four directors shall
      be
      elected by the holders of a majority of the outstanding shares of Preferred
      Stock (on an as-converted basis), and the outstanding shares of Common Stock,
      voting as a single class and three directors shall be elected by a majority
      of
      the outstanding shares of Common Stock, voting as a single class.
      Notwithstanding the foregoing, each of the stockholders of the Company shall
      vote all of its shares in favor of, and take all action necessary to elect,
      those directors selected in accordance with the provisions of Section 4.2.
      

     

    4.2  Composition
      of the Board of Directors. 

     

    (i)  Each
      of
      the four directors to be elected by the holders of Preferred Stock and Common
      Stock, voting as a single class shall be an individual nominated by a majority
      of the members of the serving Board of Directors. 

     

    (ii)  Each
      of
      the three directors to be elected by the holders of Common Stock (“Common Stock
      Designees") shall be individuals who are nominated by the Holders of at least
      fifty percent (50%) of the voting power of the total number of then outstanding
      Common Stock of the Company (the “Majority
      of Common”),
      considered for the purposes of this Section 4.2(ii) as one group. 

     

    (iii)  Any
      director may be removed by an affirmative vote of the stockholders who appointed
      such director, providing that the respective stockholders, voting separately
      as
      a class, shall vote for the removal of any such director, only upon the written
      request of the entities or individuals that appointed such
      director.

     

    (iv)  
      If any
      vacancy occurs on the Board of Directors because of death, retirement, removal
      or resignation of a director, the person or entity that appointed such director
      shall designate a successor, and the respective stockholders, voting separately
      as a class, shall vote their securities of the Company in favor of the election
      of such successor to the Board of Directors, subject to the provisions of this
      Section 4.2.

     

    (v)  The
      Company shall execute an indemnity letter agreement with each director serving
      on the Board of Directors, in the form to be approved by counsel for the
      Investors.

     

    (vi)  Within
      thirty (30) days of the Closing, the Company shall obtain and maintain Directors
      and Officers Insurance, in an amount to be determined by the Board of Directors
      and approved by the Lead Investor.

     

    4.3  Board
      Observer.
      As long
      as each of TI and CDIB are Major Holders, each of TI and CDIB will be entitled
      to designate an observer to the Company’s Board of Directors and any appointed
      committees thereof who will be entitled to observe all Board and Committee
      discussions, both business and technical, other than private discussions
      relating to the relationship between the Company and TI or discussions of
      matters which the Board determines in good faith are of a highly confidential
      or
      proprietary nature and the disclosure of which could reasonably be expected
      to
      be detrimental to the Company.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    4.4  Termination.
      The
      provisions of this Section 4 shall terminate upon the Initial
      Offering.

     

    5.  Miscellaneous.

     

    5.1  Successors
      and Assigns.
      Except
      as otherwise provided herein, the terms and conditions of this Agreement shall
      inure to the benefit of and be binding upon the respective successors and
      assigns of the parties (including transferees of any shares of Registrable
      Securities). Nothing in this Agreement, express or implied, is intended to
      confer upon any party other than the parties hereto or their respective
      successors and assigns any rights, remedies, obligations, or liabilities under
      or by reason of this Agreement, except as expressly provided in this
      Agreement.

     

    5.2  Effect
      of Change in Company’s Capital Structure.
      If,
      from time to time, there is any stock dividend, stock split or other change
      in
      the character or amount of any of the outstanding stock of the Company, then
      in
      such event any and all new, substituted or additional securities to which a
      shareholder is entitled by reason of the shareholder’s ownership of the stock
      shall be immediately subject to the rights and obligations set forth in this
      Agreement, the Series D Agreement and any documents and agreement referred
      to
      thereto, with the same force and effect as the stock subject to such rights
      immediately before such event.

     

    5.3  Governing
      Law.
      Since
      certain of the Investors are based in Israel, this Agreement shall be governed
      by and construed under the laws of the State of Israel as applied to agreements
      among Israel residents entered into and to be performed entirely within Israel.
      However, corporate law matters will be governed by and construed under the
      laws
      of the State of Delaware.

     

    5.4  Counterparts.
      This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed an original, but all of which together shall constitute one and the
      same
      instrument.

     

    5.5  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.

     

    5.6  Notices.
      Any
      notice required or permitted to be given to a party pursuant to the provisions
      of this Agreement will be in writing and will be effective and deemed given
      to
      such party under this Agreement on the earliest of the following: (a) the date
      of personal delivery; (b) one (1) business day after transmission by facsimile,
      electronic mail or telecopier, addressed to the other party at its facsimile
      number, electronic mail address or telecopier address, with confirmation of
      transmission; (c) one (1) business day after deposit with a return receipt
      express courier for United States deliveries, or three (3) business days after
      such deposit for deliveries outside of the United States; or (d) three (3)
      business days after deposit in the United States mail by registered or certified
      mail (return receipt requested) for United States deliveries. All notices not
      delivered personally, by electronic mail or by facsimile will be sent with
      postage and/or other charges prepaid and properly addressed to the party to
      be
      notified at the address set forth below such party's signature on this Agreement
      or on Schedule A hereto, or at such other address as such other party may
      designate by ten (10) days advance written notice to the other parties hereto.
      All notices for delivery outside the United States will be sent by facsimile
      or
      by express courier. Any notice given hereunder to more than one person will
      be
      deemed to have been given, for purposes of counting time periods hereunder,
      on
      the date effectively given to the last party required to be given such notice.
      Notices to the Company will be marked "Attention: President" with a copy to
      Company counsel.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    5.7  Expenses.
      If any
      action at law or in equity is necessary to enforce or interpret the terms of
      this Agreement, the prevailing party shall be entitled to reasonable attorneys’
fees, costs and necessary disbursements in addition to any other relief to
      which
      such party may be entitled.

     

    5.8  Entire
      Agreement: Amendments and Waivers.
      This
      Agreement (including the Exhibits hereto, if any) constitutes the full and
      entire understanding and agreement among the parties with regard to the subjects
      hereof and thereof supersedes all other agreements between or among any of
      the
      parties with respect to the subject matter hereof including the Previous IR
      Agreement. Any term of this Agreement may be amended and the observance of
      any
      term of this Agreement may be waived (either generally or in a particular
      instance and either retroactively or prospectively), only with the written
      consent of the Company, the holders of the Majority of the Preferred Registrable
      Securities and, only if such amendment shall adversely affect the rights of
      the
      Founders, at least one Founder. Any amendment or waiver effected in accordance
      with this paragraph shall be binding upon each holder of any Registrable
      Securities each future holder of all such Registrable Securities, and the
      Company. 

     

    5.9  Severability.
      If one
      or more provisions of this Agreement are held to be unenforceable under
      applicable law, such provision shall be excluded from this Agreement and the
      balance of the Agreement shall be interpreted as if such provision were so
      excluded and shall be enforceable in accordance with its terms.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    5.10  Aggregation
      of Stock.
      All
      shares of Registrable Securities held or acquired by affiliated entities or
      persons which qualify as Permitted Transferees shall be aggregated together
      for
      the purpose of determining the availability of any rights under this Agreement.
      For the avoidance of doubt, all shares of Registrable Securities held or
      acquired by Concord II Venture Fund (Cayman) L.P. and by Concord II Venture
      Fund
      (Israel) L.P. and by any other partnership managed by the same manager as such
      partnerships shall be aggregated together for all means and purposes, including
      for determination of the availability of any rights and for the calculation
      of
      any of such entities' pro rata shares. For the avoidance of doubt, all shares
      of
      Registrable Securities held or acquired by Magnum Communications Fund, L.P
      and
      by any other partnership managed by the same manager as such partnerships shall
      be aggregated together for all means and purposes, including for determination
      of the availability of any rights and for the calculation of any of such
      entities' pro rata shares. For the avoidance of doubt, all shares of Registrable
      Securities held or acquired by Genesis Partners II LDC and by Genesis Partners
      II (Israel) L.P. and by any other partnership managed by the same manager as
      such partnerships and by Genesis Partners I L.P. and Genesis Partners I (Cayman)
      L.P. shall be aggregated together for all means and purposes, including for
      determination of the availability of any rights and for the calculation of
      any
      of such entities' pro rata shares

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

    

    
      
        
        

      

      
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    Signature
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    Fifth
      Amended and Restated Investors' Rights Agreement - Company

     

    

     

    IN
      WITNESS WHEREOF, the parties have executed this Agreement as of the date first
      above written.

     

    

    
      
        	
                 

              	 	 
	 COMPANY:
                	WINTEGRA,
                INC.
	 
 	 
 	 
 
	  	By:  	/s/ Jacob Ben-Zvi 
	 	
                
Jacob
                Ben-Zvi, President and Chief Executive
                Officer
	 	 

      

     

    
      
        
        

      

      
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    Signature
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    Fifth
      Amended and Restated Investors' Rights Agreements

     

    
      	 	 	 	 
	 	
              Magnum
                Communication Fund L.P.

               

            	 
	 	
              By:
                Magnum Communications Management Ltd., its general
                partner

            	 
	 
 	 
 	 
 	 
	 	By: 	/s/
              Yahal Zilka	 
	 	Title: 	 	 
	 	Name: 	 	 
	 	
            	 
	 	 	 

    

     

    
       

      
        	 	 	 	 
	 	
                Magnum
                  Communication Fund (Israel) L.P.

                 

              	 
	 	
                By:
                  Magnum Communications Management Ltd., its general
                  partner 

              	 
	 
 	 
 	 
 	 
	 	By: 	/s/
                Yahal Zilka	 
	 	Title: 	 	 
	 	Name: 	 	 
	 	
              	 
	 	 	 

      

      

         

        
          	 	 	 	 
	 	
                  Magnum
                    Communication Entrepreneurs Fund L.P.

                   

                	 
	 	
                  By:
                    Magnum Communications Management Ltd., its general
                    partner

                	 
	 
 	 
 	 
 	 
	 	By: 	/s/
                  Yahal Zilka	 
	 	Title: 	 	 
	 	Name: 	 	 
	 	
                	 
	 	 	 

        

        

          
            
              
              

            

            
              22

              
                

              

            

            
              
              

            

          

        

      

      Signature
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      Fifth
        Amended and Restated Investors' Rights Agreements

      

      
         

        
          	 	 	 	 
	 	
                  Concord
                    Ventures II (Israel), L.P.

                   

                	 
	 	
                  By:
                    Concord II Investment Partners Ltd., its general
                    partner

                	 
	 
 	 
 	 
 	 
	 	By:	/s/
                  M. Karp	 
	 	Title:	 	 
	 	Name:	 	 
	 	
                	 
	 	 	 

        

        

           

          
            	 	 	 	 
	 	
                    Concord
                      Ventures II (Cayman), L.P.

                     

                  	 
	 	
                    By:
                      Concord II Investment Partners Ltd., its general
                      partner

                  	 
	 
 	 
 	 
 	 
	 	By:	/s/
                    M. Karp	 
	 	Title:	 	 
	 	Name:  
	 	 
	 	
                  	 
	 	 	 

          

          

            
              
                
                

              

              
                23

                
                  

                

              

              
                
                

              

            

          

           

        

      

      Signature
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      Fifth
        Amended and Restated Investors' Rights Agreements

      

      
         

        
          	 	 	 	 
	 	Texas
                  Instruments Incorporated.	 
	 
 	 
 	 
 	 
	 	By:	/s/
                  Barbara C. Papas	 
	 	Title:	Vice
                  President, Manager Corporate
                  Development	 
	 	Name:  
	Barbara
                  C. Papas	 
	 	
                	 
	 	 	 

        

        

           

          
            	 	 	 	 
	 	Marvell
                    Semiconductor Israel Ltd.	 
	 
 	 
 	 
 	 
	 	By:	/s/
                    Mike Tate	 
	 	Title:	VP
&
Treasurer	 
	 	Name:	Mike
                    Tate	 
	 	
                  	 
	 	 	 

          

          
 

        

      

      
        
          
          

        

        
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      Fifth
        Amended and Restated Investors' Rights Agreements

      
         

        
          	 	 	 	 
	 	Genesis
                  Partners II LDC	 
	 
 	 
 	 
 	 
	 	By:	/s/
                  [illegible]	 
	 	Title:	 
	 
	 	Name:	 
	 
	 	
                	 
	 	 	 

        

        

           

          
            	 	 	 	 
	 	Genesis
                    Partners II (Israel) L.P.	 
	 
 	 
 	 
 	 
	 	By:	/s/
                    [illegible]	 
	 	Title:	 	 
	 	Name:	 	 
	 	
                  	 
	 	 	 

          

          

             

            
              	 	 	 	 
	 	Marinon
                      Development Inc. (for itself and as proxy)	 
	 
 	 
 	 
 	 
	 	By:	/s/
                      [illegible]	 
	 	Title:	Director	 
	 	Name:	Member	 
	 	
                    	 
	 	 	 

            

            
 

          

        

      

      
        
          
          

        

        
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	 	PMC-Sierra,
                  Inc.	 
	 
 	 
 	 
 	 
	 	By: 	 	 
	 	Title: 	 	 
	 	Name: 	 	 
	 	
                	 
	 	 	 

        

        

      

       

      

      
        
          
          

        

        
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      Signature
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      Fifth
        Amended and Restated Investors' Rights Agreement - Founders

      

      
         

        
          	 	 	 	 
	 FOUNDERS:	Jacob
                  Ben-Zvi	 
	 	 	 
	 	   
/s/
                  Jacob Ben-Zvi	 
	 	 	 
	 	 	 

        

        
           

           

           

          
            	 	 	 	 
	 
                    	Robert
                    O’Dell	 
	 	 	 
	 	   
/s/
                    Robert O’Dell	 
	 	 	 

          

          
 

        

      

      
        
          
          

        

        
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        Amended and Restated Investors' Rights Agreements

      

      
         

        
          	 	 	 	 
	 	Grindylow
                  Group Ltd.	 
	 
 	 
 	 
 	 
	 	By:	/s/
                  [illegible]	 
	 	Title:	Director	 
	 	Name:	08-02-2006	 
	 	
                	 
	 	 	 

        

        

           

          
            	 	 	 	 
	 	China
                    Development Industrial Bank Inc.	 
	 
 	 
 	 
 	 
	 	By:	  
	 
	 	Title:	  
	 
	 	Name:	 
	 
	 	
                  	 
	 	 	 

          

           

        

      

      
        
          
          

        

        
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                    	Jacob
                    Ben-Zvi, as proxy-holder	 
	 	 	 
	 	 /s/
                    Jacob Ben-Zvi	 
	 	 	 
	 	
                  	 
	 	 	 

          

          
 

        

      

      
        
          
          

        

        
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      Fifth
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        and Restated Investors' Rights Agreements

      
        
          	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	YZMS
                  Advisory Services Ltd.	 
	 
 	 
 	 
 	 
	 	By:	/s/
                  Yahal Zilka	 
	 	Title:	 
	 
	 	Name:	 
	 
	 	
                	 
	 	 	 

        

        

      

      

      
        
          
          

        

        
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      Fifth
        Amended and Restated Investors' Rights Agreements

      

      
         

        
          	 	 	 	 
	 	Kiernan
                  Family Trust	 
	 
 	 
 	 
 	 
	 	By:	/s/
                  Vera H. Kiernan	 
	 	Title:	Trustee	 
	 	Name:	Vera
                  H. Kiernan	 
	 	
                	 
	 	 	 

        

        

 

      

      
        
          
          

        

        
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	 	Murato
                  Inc, as Trustee of the Elefes Trust	 
	 	 	 
	 
 	 
 	 
 	 
	 	By:	/s/
                  Ryan Rudolph	 
	 	Title:	Director	 
	 	Name:	Ryan
                  Rudolph	 
	 	
                	 
	 	 	 

        

         

      

      
        
          	 	 	 	 
	 	Zebulon
                  International Ltd.	 
	 	 	 
	 
 	 
 	 
 	 
	 	By: 	   	 
	 	Title: 	   	 
	 	Name: 	   	 
	 	Address:	   	 
	 	 
                  	 
	 	 
                  	 
	 	 	 

        

         

        
          
            
            

          

          
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          Signature
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            Amended and Restated Investors' Rights Agreements

          

             

            
              	 	 	 	 
	 	Murato
                      Inc, as Trustee of the Elefes Trust	 
	 	 	 
	 
 	 
 	 
 	 
	 	By:	 
	 
	 	Title:	 
	 
	 	Name:	 
	 
	 	
                    	 
	 	 	 

            

             

          

          
            
              	 	 	 	 
	 	Zebulon
                      International Ltd.	 
	 	 	 
	 
 	 
 	 
 	 
	 	By:	/s/
                      [illegible]	 
	 	Title:	 	 
	 	Name:	[illegible]	 
	 	Address:	1
                      Corral Road Gibraltar	 
	 	 	 
	 	 
	 
	 	 
                      	 

            

            
 

          

 

      

      
        
          
          

        

        
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      Signature
        page - 

      Fifth
        Amended and Restated Investors' Rights Agreements

      

      
         

         

          

          
             

            
              	 	 	 	 
	 
                      	Uzi
                      Zucker	 
	 	 	 
	 	 
                      	 
	 	 	 
	 	
                    	 
	 	 	 

            

            
               

              
                	 	 	 	 
	 
                        	
                        Peter
                          Luggen

                        Industriestrasse 16

                        Residence Park

                        6304 Zug

                      	 
	 	 	 
	 	/s/
                        Peter Luggen	 
	 	 	 
	 	
                      	 
	 	 	 

              

              
 

            

          

        

      

      
        
          
          

        

        
          34

          
            

          

        

        
          
          

        

      

      
        Signature
          page - 

        Fifth
          Amended and Restated Investors' Rights Agreements

      

    

     

    
      
        	 	 	 	 
	 	GCWF
                Investment Partners II	 
	 	 	 
	 	 	 	 
	 	By: 	  	 
	 	 	 

      

      
         

        
          	 	 	 	 
	 	BDA
                  Investment Partners	 
	 	 	 
	 	 	 	 
	 	By:	/s/
                  [illegible]	 
	 	 	 

        

        
           

          
            	 	 	 	 
	 	
                    Tally
                      A. Eitan - Zeev Pearl & Co. Trustees Ltd.

                  	 
	 	 	 
	 	 	 	 
	 	By:	 
	 
	 	 	 

          

          

            
              
                
                

              

              
                35

                
                  

                

              

              
                
                

              

            

        

      

    

    

    Schedule
      A

    

    List
      of D-Investors

    

    
      	
              Name
                and Address

            	 	
              Number
                of Shares

            	 	
              Purchase
                Price

            	 
	
              PMC
                Sierra, Inc.

            	 	 	
              853,024

            	 	
              $

            	
              2,000,000

            	 

    

    

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

    Schedule
      D

    

    List
      of C-Investors

    

    

    
      	 	 	 
	
               

              Name
                of Investor

            	
              Address
                for notices

            	
              Number
                of 

              Purchased
                Shares

            
	 	 	 
	
              Magnum
                Communications Fund LP

            	
              P.O.
                Box 309 

              Ugland
                House

              South
                Church Street

              George
                Town, Grand Cayman

            	
              798,522

            
	 	 	 
	
              Magnum
                Communications Fund (Israel) LP

            	 	
              93,977

            
	 	 	 
	
              Magnum
                Communications Entrepreneurs Fund LP

            	
              P.O.
                Box 309 

              Ugland
                House

              South
                Church Street

              George
                Town, Grand Cayman

            	
              16,566

            
	 	 	 
	
              Concord
                Ventures II (Israel),
                L.P.

            	
              PO
                Box 4011, 

              Herzelia
                46140, Israel

            	
              351,808

            
	 	 	 
	
              Concord
                Ventures II (Cayman), L.P.

            	
              PO
                Box 4011, 

              Herzelia
                46140, Israel

            	
              1,400,141

            
	 	 	 
	
              Concord
                Venture Advisors II (Cayman), L.P.

            	
              PO
                Box 4011, 

              Herzelia
                46140, Israel

            	
              43,635

            
	 	 	 
	
              Concord
                Venture Advisors II-A (Israel), L.P.

            	
              PO
                Box 4011, 

              Herzelia
                46140, Israel

            	
              22,545

            
	 	 	 
	
              Texas
                Instruments Incorporated

            	
              7839
                Churchill Way

              M/S
                3992

              Dallas
                Texas 75251

            	
              969,669

            
	
              Texas
                Instruments* Incorporated

            	
              7839
                Churchill Way 

              M/S
                3992

              Dallas
                Texas 75251

            	
              1,454,503

            
	 	 	 
	
              China
                Development Industrial Bank
                Inc.

            	 	
              303,021

            
	 	 	 

    

     

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

    
      	 	 	 
	
              Sonostar
                Ventures LLC

            	
              c/o
                Trustco Services Ltd.

              Chamerstrasse
                12c

              P.O
                box 4436

              Zug,
                Switzerland 6304

            	
              45,453

            
	 	 	 
	
              MRVM
                Advisory Services Ltd.

            	
              c/o
                Trustco Services Ltd.

              Chamerstrasse
                12c

              P.O
                box 4436

              Zug,
                Switzerland 6304

            	
              18,181

            
	 	 	 
	
              Stanley
                B. Shopcorn

            	
              c/o
                Trustco Services Ltd. 

              hamerstrasse
                12c 

              P.O
                box 4436

              Zug,
                Switzerland 6304

            	
              30,302

            
	 	 	 
	
              Grindylow
                Group Ltd.

            	
              Pasea
                Estate

              Roadtown
                Tortolla

              BVI

            	
              1,530,259

               

            
	 	 	 
	
              Kiernan
                Family Trust

            	
              c/o
                Trustco Services Ltd.

              Chamerstrasse
                12c

              P.O
                box 4436

              Zug,
                Switzerland 6304

            	
              136,360

            
	 	 	 
	
              Yankee
                Investments Holding Ltd.

               

            	
              3076
                Sir Francis Drake Hwy.

              Roadtown,
                Tortolla,

              BVI

            	
              60,604

               

               

            
	 	 	 
	
              Zebulon
                International Ltd.

            	 	
              60,604

            
	 	 	 
	
              Uzi
                Zucker

            	
              C/o
                Bear Stearns, 

              383
                Madison Ave.

              New
                York, NY 10179

            	
              121,209

            
	 	 	 
	
              YZMS
                Advisory Services Ltd.

               

            	
               

            	
              7,576

               

               

            
	 	 	 
	
              Bela
                Incze

               

               

            	
              127
                Shaughnessy Crescent

              Kanata,
                Ontario, 

              Canada
                K2K
                2N3

            	
              60,604

               

               

               

            
	 	 	 

    

     

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

    
      	 	 	 
	
              Shardan
                B Management Services Ltd.

            	
              13A
                Shphinoza St. 

              Herzelia
                46683 Israel

            	
              60,604

            
	 	 	 
	
              Back
                Nine LLC.

            	
              70
                Bradford Road, 

              Weston,
                MA 02193

            	
              48,483

               

               

            
	 	 	 
	
              FTZ
                AG 

               

               

            	
              P.O.Box
                4258, 

              Zug,
                6304 Switzerland

            	
              121,209

               

               

            
	
              TOTAL**

            	 	
              7,755,835

            

    

    

    

    *
      Shares
      to be issued to TI at Additional Closings as defined in the Series C Preferred
      Stock Purchase Agreement. 

    **
      The
      number of shares includes shares to be issued to TI at Additional
      Closings.

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

    

    Schedule
      B

    

    List
      of A-Investors 

    

    
      	 	 	
              Number
                of

            	 
	
              Name
                and Address

            	 	
              Shares

            	 
	 	 	 	 	 
	
              Magnum
                Communications Fund LP

            	 	 	
              1,464,201

            	 
	 	 	 	 	 
	
              Magnum
                Communications Fund (Israel) LP

            	 	 	
              172,319

            	 
	 	 	 	 	 
	
              Magnum
                Communications Entrepreneurs Fund LP

            	 	 	
              30,147

            	 
	 	 	 	 	 
	
              Concord
                Ventures II (Israel), L.P.

            	 	 	
              322,167

            	 
	 	 	 	 	 
	
              Concord
                Ventures II (Cayman), L.P.

            	 	 	
              1,282,167

            	 
	 	 	 	 	 
	
              Concord
                Ventures Advisors II (Cayman) L.P.

            	 	 	
              40,833

            	 
	 	 	 	 	 
	
              Concord
                Ventures Advisors II-A (Israel), L.P.

            	 	 	
              21,500

            	 
	 	 	 	 	 
	
              Marvell
                Semiconductor Israel Ltd.

            	 	 	
              1,666,667

            	 
	 	 	 	 	 
	
              GCWF
                Investment Partners II

            	 	 	
              22,499

            	 
	 	 	 	 	 
	
              BDA
                Investment Partners

            	 	 	
              2,500

            	 
	 	 	 	 	 
	
              Tally
                A. Eitan - Zeev Pearl & Co. Trustees Ltd.

            	 	 	
              25,000

            	 
	 	 	 	 	 
	
              TOTAL

            	 	 	
              5,050,000

            	 

    

    

    

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

    Schedule
      C 

    List
      of B-Investors

    

    

      
        	
                Name
                  of Investor

              	 	
                Address
                  for notices

              	 	
                Number
                  of Shares

              
	 	 	 	 	 
	
                Magnum
                  Communications Fund LP

              	 	
                P.O.
                  Box 309 

                Ugland
                  House

                South
                  Church Street

                George
                  Town, Grand Cayman

              	 	
                1,300,304

              
	 	 	 	 	 
	
                Magnum
                  Communications Fund (Israel) LP

              	 	 	 	
                153,031

              
	 	 	 	 	 
	
                Magnum
                  Communications Entrepreneurs Fund LP

              	 	
                P.O.
                  Box 309 

                Ugland
                  House

                South
                  Church Street

                George
                  Town, Grand Cayman

              	 	
                26,773

              
	 	 	 	 	 
	
                Concord
                  Ventures II (Israel), L.P.

              	 	
                PO
                  Box 4011, 

                Herzelia
                  46140,Israel

              	 	
                286,105

              
	 	 	 	 	 
	
                Concord
                  Ventures II (Cayman), L.P.

              	 	
                PO
                  Box 4011, 

                Herzelia
                  46140, Israel

              	 	
                1,138,647

              
	 	 	 	 	 
	
                Concord
                  Venture Advisors II (Cayman), L.P.

              	 	
                PO
                  Box 4011, 

                Herzelia
                  46140, Israel

              	 	
                36,263

              
	 	 	 	 	 
	
                Concord
                  Venture Advisors II-A (Israel), L.P.

              	 	
                PO
                  Box 4011, 

                Herzelia
                  46140, Israel

              	 	
                19,093

              
	 	 	 	 	 
	
                Marvell
                  Semiconductor Israel Ltd.

              	 	
                Moshav
                  Manof 

                DN
                  Misgav 20184

              	 	
                241,847

              
	 	 	 	 	 
	
                Texas
                  Instruments Incorporated

              	 	
                7839
                  Churchill Way 

                M/S
                  3992

                Dallas
                  Texas 75251

              	 	
                725,542

              
	 	 	 	 	 

      

       

       

      
        
          
          

        

        
          41

          
            

          

        

        
          
          

        

      

       

      
        	
                Genesis
                  Partners II LDC

              	 	
                Top
                  Tower, 50 Dizengoff Street, 

                Tel
                  Aviv 61236, Israel

              	 	
                2,117,128

              
	
                China
                  Development Industrial Bank Inc.

              	 	 	 	
                544,156

              
	 	 	 	 	 
	
                Genesis
                  Partners II (Israel) L.P.

              	 	
                Top
                  Tower, 50 Dizengoff Street, 

                Tel
                  Aviv 61236, Israel

              	 	
                
                  313,438             
                    

                

              
	
                Marinon
                  Development Inc.

              	 	
                c/o
                  Trustco Services Ltd.

                Chamerstrasse
                  12c

                P.O
                  box 4436

                Zug,Switzerland
                  6304

              	 	
                598,572

              
	
                MRVM
                  Advisory Services Ltd.

              	 	
                c/o
                  Trustco Services Ltd.

                Chamerstrasse
                  12c

                P.O
                  box 4436

                Zug,
                  Switzerland 6304

              	 	
                18,139

              
	
                Sonostar
                  Ventures LLC

              	 	
                c/o
                  Trustco Services Ltd.

                Chamerstrasse
                  12c

                P.O
                  box 4436

                Zug,Switzerland
                  6304

              	 	
                108,831

              
	
                Stanley
                  B. Shopkorn

              	 	
                c/o
                  Trustco Services Ltd.

                Chamerstrasse
                  12c

                P.O
                  box 4436

                Zug,Switzerland
                  6304

              	 	
                72,554

              
	
                TOTAL

              	 	 	 	
                7,700,423      
                  

              

      

      
 

    

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

    

     

    Schedule
      E

     

    Founders

     

    
      	
              Founder

            	 	
              Class/Series
                of Stock

            	 	
              Number
                of Shares

            
	 	 	 	 	 
	
              Jacob
                Ben-Zvi.

            	 	
              Common
                Stock

            	 	
              4,294,500

            
	 	 	 	 	 
	
              Robert
                O’Dell

            	 	
              Common
                Stock

            	 	
              2,705,500

            
	 	 	 	 	 

    

    

     

    
      
        
        

      

      
        43

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