Document:

Exhibit 10.5  

May 9,
2003 

Millstream
Acquisition Corporation

c/o Arthur Spector

435 Devon Park Drive

Building 400

Wayne, Pennsylvania 19087 

EarlyBirdCapital, Inc.

600 Third Avenue

33rd Floor

New York, New York 10016 

        Re:    Initial Public Offering    

Gentlemen:

        The
undersigned stockholder and director of Millstream Acquisition Corporation ("SPAC"), in consideration of EarlyBirdCapital, Inc. ("EBC") entering into a letter of intent
("Letter of Intent") to underwrite an initial public offering of the securities of the SPAC ("IPO") and embarking on the IPO process, hereby agrees as follows (certain capitalized terms used herein
are defined in paragraph 13 hereof): 

        1.     If
the SPAC solicits approval of its stockholders of a Business Combination, the undersigned will vote all Insider Shares owned by him in accordance with the majority of
the votes cast by the holders of the IPO Shares. 

        2.     In
the event that the SPAC fails to consummate a Business Combination within 18 months from the effective date ("Effective Date") of the registration statement
relating to the IPO (or 24 months under the circumstances described in the prospectus relating to the IPO), the undersigned will take all reasonable actions within his power to cause the SPAC
to liquidate. The undersigned waives any and all rights he may have to receive any distribution of cash, property or other assets as a result of such liquidation with respect to his Insider Shares. 

        3.     In
order to minimize potential conflicts of interest which may arise from multiple affiliations, the undersigned agrees to present to the SPAC for its consideration,
prior to presentation to any other person or company, any suitable opportunity to acquire an operating business, until the earlier of the consummation by the SPAC of a Business Combination, the
liquidation of the SPAC or until such time as the undersigned ceases to be an officer or director of the SPAC, subject to any pre-existing fiduciary obligations the undersigned might have
or new fiduciary obligations which may arise related to or affiliated with entities to whom the undersigned has pre-existing fiduciary obligations, including, but not limited to, fiduciary
obligations to next generation, follow-on or successor entities to any entities to which the undersigned has pre-existing obligations. 

        4.     The
undersigned will not submit to the SPAC for consideration, or vote for the approval of, any Business Combination which involves a company which is affiliated with any
of the Insiders unless the SPAC obtains an opinion from an independent investment banking firm that the business combination is fair to the SPAC's stockholders from a financial perspective. 

        5.     The
undersigned will not be entitled to receive and will not accept any compensation for services rendered to the SPAC prior to the consummation of the Business
Combination; provided that the undersigned shall be entitled to reimbursement from the SPAC for his out-of-pocket expenses incurred in connection with seeking and consummating
a Business Combination. 

        6.     The
undersigned will not be entitled to receive and will not accept a finder's fee or any other compensation in the event the undersigned originates a Business
Combination; provided, however, that the undersigned shall be entitled to receive, upon consummation of a Business Combination, 

 

commissions
for monies raised by the undersigned for the SPAC in connection with the Business Combination (if permitted under applicable law), at rates which are no less favorable to the SPAC than
those which the SPAC would pay to unaffiliated third parties. 

        7.     The
undersigned will escrow his Insider Shares for the three year period commencing on the Effective Date subject to the terms of a Stock Escrow Agreement which the
Company will enter into with the undersigned and Continental Stock Transfer & Trust Company as escrow agent. 

        8.     The
undersigned agrees that, during the three year period terminating on March 18, 2006, he will not become involved (whether as owner, manager, operator,
creditor, partner, shareholder, joint venturer, employee, officer, director, consultant or otherwise) with any Acquisition Fund (as defined in Section 13(v) below), unless such
Acquisition Fund engages EBC to be the managing underwriter of the initial public offering of the Acquisition Fund's securities. 

        The
undersigned hereby agrees and acknowledges that (i) EBC would be irreparably injured in the event of a breach by the undersigned of any of his obligations under this
paragraph 8, (ii) monetary damages would not be an adequate remedy for any such breach, and (iii) EBC shall be entitled to injunctive relief, in addition to any other remedy it
may have, in the event of such breach. 

        9.     I
agree to be a director of the SPAC until the earlier of the consummation by the SPAC of a Business Combination or the liquidation of the SPAC. The undersigned's
biographical information furnished to the SPAC and EBC and attached hereto as Exhibit A is true and accurate in all respects and such information contains all of the information required to be
disclosed pursuant to Section 401 of Regulation S-K, promulgated under the Securities Act of 1933. The undersigned's Questionnaire furnished to the SPAC and EBC and annexed
as Exhibit B hereto is true and accurate in all respects. The undersigned represents and warrants that 

        (a)   he
is not subject to or a respondent in any legal action for, any injunction, cease-and-desist order or order or stipulation to desist or refrain
from any act or practice relating to the offering of securities in any jurisdiction; 

        (b)   he
has never been convicted of or pleaded guilty to any crime (i) involving any fraud or (ii) relating to any financial transaction or handling of funds of
another person, or (iii) pertaining to any dealings in any securities and he is not currently a defendant in any such criminal proceeding; and 

        (c)   he
has never been suspended or expelled from membership in any securities or commodities exchange or association or had a securities or commodities license or
registration denied, suspended or revoked. 

        10.   The
undersigned agrees that, during the five-year period following the Effective Date, he shall offer EBC a 24-hour right of first refusal to
purchase for EBC's account or to sell for the account of the undersigned any securities of the SPAC which the undersigned intends to sell in the open market, including pursuant to Rule 144 of
the Securities Act of 1933, on terms at least as favorable to the undersigned as he can secure elsewhere. 

        11.   I
have full right and power, without violating any agreement by which I am bound, to enter into this letter agreement and to serve as a director of the SPAC. 

        12.   I
authorize any employer, financial institution, or consumer credit reporting agency to release to EBC and its legal representatives or agents any information they may
have about my finances ("Financial Information"). Neither EBC nor its agents shall be violating my right of privacy in any manner in requesting and obtaining the Financial Information and I hereby
release them from liability for any damage whatsoever in that connection. 

2

 

        13.   As
used herein, (i) a "Business Combination" shall mean an acquisition by merger, capital stock exchange, asset or stock acquisition, reorganization or otherwise,
of an operating business selected by the SPAC; (ii) "Insiders" shall mean all officers, directors and stockholders of the SPAC immediately prior to the IPO; (iii) "Insider Shares" shall
mean all of the shares of Common Stock of the SPAC owned by an Insider prior to the IPO; (iv) "IPO Shares" shall mean the shares of Common Stock issued in the Corporation's IPO; and (v) 
"Acquisition Fund" shall mean any company formed with the intent to offer securities to the public and use the proceeds to consummate one or more Business Combinations which are unspecified at the
time of the securities offering. 

	 	 	[Director]
 Print Name of Insider
	

 	
 	

 Signature

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EXHIBIT 10.7  

 
 

STOCK ESCROW AGREEMENT    
    

        STOCK ESCROW AGREEMENT dated as of                        , 2003
("Agreement") by and among MILLSTREAM ACQUISITION CORPORATION, a Delaware corporation ("Company"), ARTHUR
SPECTOR, the SPECTOR FAMILY TRUST, ROBERT E. KEITH, JR., DON K. RICE, DR. HEINZ C. SCHIMMELBUSCH and J. BRIAN O'NEILL (collectively "Initial Stockholders") and CONTINENTAL STOCK TRANSFER &
TRUST COMPANY, a New York corporation ("Escrow Agent"). 

        WHEREAS,
the Company has entered into an Underwriting Agreement dated April    , 2003 ("Underwriting Agreement") with EarlyBirdCapital, Inc. ("EBC") acting as
representative of the several underwriters (collectively, the "Underwriters"), pursuant to which, among other matters, the Underwriters have agreed to purchase 3,000,000 units ("Units") of the
Company. Each Unit consists of one share of the Company's Common Stock, par value $.0001 per share, and two Warrants, each Warrant to purchase one share of Common Stock, all as more fully described in
the Company's definitive Prospectus dated                        , 2003 ("Prospectus") comprising part of the Company's
Registration Statement on Form S-1 (File
No. 333-            ) under the Securities Act of 1933, as amended ("Registration Statement"), declared effective
on            , 2003 ("Effective Date"). 

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

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

        IT
IS AGREED: 

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

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

        3.    Disbursement of the Escrow Shares.    The Escrow Agent shall hold the Escrow Shares until the third anniversary
of the Effective Date ("Escrow Period"), on which date it shall disburse each of the Initial Stockholder's Escrow Shares to such Initial Stockholder; provided, however, that if the Escrow Agent is
notified by the Company pursuant to Section 6.7 hereof that the Company is being liquidated at any time during the Escrow Period, then the Escrow Agent shall promptly destroy the certificates
representing the Escrow Shares and; provided further, that if, after the Company consummates a Business Combination (as such term is defined in the Registration Statement), it subsequently consummates
a liquidation, merger, stock exchange or other similar transaction which results in all of its stockholders having the right to exchange their shares of Common Stock for cash, securities or other
property, then the Escrow Agent will, upon consummation of such transaction, release the Escrow Shares to the Initial Stockholders so that they can similarly participate. The Escrow Agent shall have
no further duties hereunder after the disbursement or destruction of the Escrow Shares in accordance with this Section 3. 

        4.    Rights of Initial Stockholders in Escrow Shares.    

        4.1    Voting Rights as a Stockholder.    Subject to the terms of the Insider Letter described in Section 4.4
hereof and except as herein provided, the Initial Stockholders shall retain all of their 

 

rights
as stockholders of the Company during the Escrow Period, including, without limitation, the right to vote such shares. 

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

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

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

        5.    Concerning the Escrow Agent.    

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

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

2

 

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

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

        5.5    Resignation.    The Escrow Agent may resign at any time and be discharged from its duties as escrow agent
hereunder by its giving the other parties hereto written notice and such resignation shall become effective as hereinafter provided. Such resignation shall become effective at such time that the
Escrow Agent shall turn over to a successor escrow agent appointed by the Company, the Escrow Shares held hereunder. If no new escrow agent is so appointed within the 60 day period following
the giving of such notice of resignation, the Escrow Agent may deposit the Escrow Shares with any court it deems appropriate. 

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

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

        6.    Miscellaneous.    

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

        6.2    Third Party Beneficiaries.    Each of the Initial Stockholders hereby acknowledges that the Underwriters are
third party beneficiaries of this Agreement and this Agreement may not be modified or changed without the prior written consent of EBC. 

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

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

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

        6.6    Notices.    Any notice or other communication required or which may be given hereunder shall be in writing and
either be delivered personally or be mailed, certified or registered mail, or by private national courier service, return receipt requested, postage prepaid, and shall be deemed given when so
delivered personally or, if mailed, two days after the date of mailing, as follows: 

If
to the Company, to: 

Millstream
Acquisition Corporation

c/o Arthur Spector

3

 

435
Devon Park Drive

Building 400

Wayne, Pennsylvania 19087

Attn: Chairman, Chief Executive Officer and President 

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

and
if to the Escrow Agent, to: 

Continental
Stock Transfer & Trust Company

17 Battery Place

New York, New York 10004

Attn: Chairman 

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

Graubard
Miller

600 Third Avenue

New York, New York 10016-2097

Attn: David Alan Miller, Esq. 

and: 

EarlyBirdCapital, Inc.

600 Third Avenue, 33rd Floor

New York, New York 10016-2097

Attn: David M. Nussbaum, Chairman 

and:

Klehr,
Harrison, Harvey, Branzburg & Ellers LLP

260 South Broad Street, Suite 400

Philadelphia, Pennsylvania 19102

Attn: Barry J. Siegel, Esq. 

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

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

4

 

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

	 	 	MILLSTREAM ACQUISITION CORPORATION
	

 	
 	
By:	

 
	 	 	 	
 Arthur Spector, Chairman, Chief Executive

Officer and President
	

 	
 	
INITIAL STOCKHOLDERS:
	

 	
 	

 ARTHUR SPECTOR

	

 	
 	

 SPECTOR FAMILY TRUST
	

 	
 	

 ROBERT E. KEITH, JR.
	

 	
 	

 DON K. RICE
	

 	
 	

 HEINZ C. SCHIMMELBUSCH
	

 	
 	

 J. BRIAN O'NEILL
	

 	
 	

CONTINENTAL STOCK TRANSFER & TRUST COMPANY
	

 	
 	

By:	

 
	 	 	 	
 Name: Steven G. Nelson

Title: Chairman

5

 
 
 

EXHIBIT A    
    

	Name and Address of

Initial Stockholder
 
	 	Number of Shares
	 	Stock

Certificate Number
	 	Date of

Insider Letter

	

Arthur Spector

435 Devon Park Drive

Building 400

Wayne, Pennsylvania 19087	
 	

360,000	
 	

1	
 	

May 9, 2003
	

Spector Family Trust

435 Devon Park Drive

Building 400

Wayne, Pennsylvania 19087	
 	

180,000	
 	

2	
 	

May 9, 2003
	

Robert E. Keith, Jr.

435 Devon Park Drive

Building 700

Wayne, Pennsylvania 19087	
 	

20,000	
 	

3	
 	

May 9, 2003
	

Don K. Rice

517 Fishers Road

Bryn Mawr, Pennsylvania 19010	
 	

20,000	
 	

4	
 	

May 9, 2003
	

Dr. Heinz C. Schimmelbusch

435 Devon Park Drive

Building 400

Wayne, Pennsylvania 19087	
 	

150,000	
 	

5	
 	

May 9, 2003
	

J. Brian O'Neill

700 South Henderson Road

Suite 225

King of Prussia, Pennsylvania 19406	
 	

20,000	
 	

6	
 	

May 9, 2003

6

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STOCK ESCROW AGREEMENT

EXHIBIT A

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