UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): January 19, 2007
 
Fortress International Group, Inc.
(Exact Name of Registrant as Specified in its Charter)

         
Delaware
 
000-51426
 
20-2027651
(State or Other
Jurisdiction of Incorporation)
 
(Commission File Number)
 
(IRS Employer
Identification No.)

9841 Broken Land Parkway
Columbia, Maryland 21046
(Address of principal executive offices) (Zip Code)
 
Registrant’s Telephone Number, Including Area Code: (410) 312-9988
 
Fortress America Acquisition Corporation
4100 North Fairfax Drive, Suite 1150
Arlington, Virginia 22203-1664
(Former Name or Former Address, if Changed Since Last Report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( See General Instruction A.2. below):

o
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
     
o
 
Soliciting material pursuant to Rule 14a- 12 under the Exchange Act (17 CFR 240.14a- 12)
     
o
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
     
o
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))





TABLE OF CONTENTS

Item 1.01.
Entry Into a Material Definitive Agreement
Item 2.01.
Completion of Acquisition or Disposition of Assets
Item 3.02.
Unregistered Sales of Equity Securities
Item 3.03.
Material Modification to Rights of Security Holders
Item 5.02.
Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers; Compensatory Arrangements of Certain Officers
Item 5.03.
Amendments to Articles of Incorporation or Bylaws
Item 5.06.
Change in Shell Company Status
Item 9.01.
Financial Statements and Exhibits
Signatures
 
 
Item 1.01. Entry Into a Material Definitive Agreement
 
Please see Item 5.02 and the discussion therein of the entry into certain material definitive agreements between Fortress International Group, Inc., formerly known as Fortress America Acquisition Corporation (the “ Company ”), and each of Thomas P. Rosato and Gerard J. Gallagher, in connection with closing (the “ Closing ”) of the acquisition (the “ Acquisition ”) of VTC, L.L.C., doing business as “Total Site Solutions” (“ TSS ”), and Vortech, LLC (“ Vortech ” and, together with TSS, “ TSS/Vortech ”) described in Item 2.01 below. The description of certain material agreements related to the Acquisition in Item 2.01 below is incorporated herein by reference. As a result of the Acquisition, each of TSS and Vortech became a wholly-owned subsidiary of the Company.
 
Item 2.01. Completion of Acquisition or Disposition of Assets.
 
On January 19, 2007, the Company acquired all of the outstanding membership interests of each of TSS and Vortech pursuant to a Second Amended and Restated Membership Interest Purchase Agreement dated July 31, 2006, as amended by that certain Amendment to the Second Amended and Restated Membership Interest Purchase Agreement dated January 16, 2007 (the “ Purchase Agreement ”). The Closing consideration consisted of (a) $11.0 million in cash, (b) the assumption of $154,599 of debt of TSS/Vortech, (c) 3,205,128 shares of the Company’s stock, of which 2,534,988 shares were issued to the selling members, 67,825 shares were issued to Evergreen Capital LLC as partial payment of certain outstanding consulting fees and 574,000 shares were designated for issuance to employees of TSS/Vortech, and (d) $10.0 million in two convertible, interest-bearing promissory notes of $5.0 million each. As described in the definitive proxy statement (Securities and Exchange Commission File No. 000-51426) dated December 27, 2006 (the “ Definitive Proxy Statement ”), at pages 52-54, all of the 2,534,988 shares issued to the selling members were deposited in certain escrow accounts. In addition, as described in the Definitive Proxy Statement, the Company entered into employment agreements with each of the selling members.
 
The cash portion of the payments made in the Acquisition was financed entirely through the use of cash raised in the Company’s initial public offering and held in a trust fund prior to the closing of the Acquisition. The balance of the net proceeds of the initial public offering will be used by the Company for (1) financing transaction costs associated with the Acquisition, (2) funding payments to stockholders who voted against the Acquisition and perfected their right to convert their shares of common stock into their pro rata share of the trust fund, (3) to fund the common stock repurchase program announced on January 12, 2007, and (4) working capital and general corporate purposes.
 
The text of the press release dated January 19, 2007 announcing the completion of the Acquisition is attached as Exhibit 99.1 to this Current Report on Form 8-K.
 
In connection with the approval of the Acquisition, the Company’s stockholders (1) adopted an amendment and restatement of the Company’s amended and restated certificate of incorporation (the “ Amended Certificate of Incorporation ”) to (a) change the Company’s name from “Fortress America Acquisition Corporation” to “Fortress International Group, Inc.,” and (b) remove certain provisions applicable to the Company only prior to its completion of the Acquisition; (2) approved the Company’s 2006 Omnibus Incentive Plan; and (3) elected David J. Mitchell to the Company’s board of directors for a term expiring in 2009.
 



Upon the filing of the Amended Certificate of Incorporation on January 19, 2007, the Company changed its name to Fortress International Group, Inc. See the discussion below in this Item 2.01, under the heading “Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters,” for information concerning a change in the Company’s trading symbols.
 
Business
 
The business of the Company is described in the Definitive Proxy Statement in the Section entitled “Information about TSS/Vortech” beginning on page 77, which is incorporated herein by reference.
 
Risk Factors
 
The risks associated with the Company’s business are described in the Definitive Proxy Statement in the Section entitled “Risk Factors” beginning on page 21, which is incorporated herein by reference.
 
Financial Information
 
Reference is made to the disclosure set forth under Item 9.01 of this Current Report on Form 8-K concerning the financial information of the Company.
 
Also see the Sections of the Definitive Proxy Statement entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of TSS/Vortech” beginning on page 83, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Fortress America Acquisition Corporation” beginning on page 98, which Sections are incorporated herein by reference.
 
Employees
 
The employees of the Company and its subsidiaries are described in the Definitive Proxy Statement in the Sections entitled “Information about TSS/Vortech - Employees” on page 82, “Information about Fortress America Acquisition Corporation - Employees” on page 97, and “Directors and Executive Officers of Fortress America Acquisition Corporation following the Acquisition” beginning on page 100 of the Definitive Proxy Statement. All of such Sections of the Definitive Proxy Statement are incorporated herein by reference.
 
Properties
 
The principal executive offices of the Company are located at 9841 Broken Land Parkway, Columbia, Maryland 21046. The facilities of the Company are described in the Definitive Proxy Statement in the Section entitled “Information about TSS/Vortech - Facilities” on page 82 of the Definitive Proxy Statement, which is incorporated herein by reference.
 
Security Ownership of Certain Beneficial Owners and Management
 
The following table sets forth information regarding the beneficial ownership of the Company’s common stock, as of January 23, 2007, by each of the Company’s officers and directors, all of such officers and directors as a group, and each person known by the Company, as a result of such person’s public filings with the SEC and the information contained therein, to be the beneficial owner of more than 5% of the Company’s outstanding shares of common stock.



Beneficial Owner
 
 
 
Number of Shares (1)
 
Percentage of Outstanding
Common Stock (2)
 
C. Thomas McMillen(3)
  4100 North Fairfax Drive, Suite 1150
  Arlington, Virginia 22203
 
 
575,000
 
 
 
5.0
%
 
 
 
 
 
 
 
 
 
 
 
Harvey L. Weiss(4)
  9841 Broken Land Parkway
  Columbia, Maryland 21046
 
 
1,070,000
 
 
 
9.0
%
 
 
 
 
 
 
 
 
 
 
 
Thomas P. Rosato
  9841 Broken Land Parkway
  Columbia, Maryland 21046
 
 
1,635,555
 
 
 
14.4
%
 
 
 
 
 
 
 
 
 
 
 
Gerard J. Gallagher
  9841 Broken Land Parkway
  Columbia, Maryland 21046
 
 
1,221,433
 
 
 
10.7
%
 
 
 
 
 
 
 
 
 
 
 
David J. Mitchell
  9841 Broken Land Parkway
  Columbia, Maryland 21046
   
150,000
     
1.3
%
 
                   
Donald L. Nickles
  9841 Broken Land Parkway
  Columbia, Maryland 21046
   
200,000
     
1.8
%
 
 
 
 
 
 
 
 
 
 
 
All directors and executive officers as a group (6 individuals)
 
 
4,851,988
 
 
 
41.0
%
 
 
 
 
 
 
 
 
 
 
 
Hummingbird Management, LLC(5)
  460 Park Avenue, 12 th Floor
  New York, New York 10022
 
 
 
 
672,403
 
 
 
5.9
%
 
                   
The Pinnacle Fund, L.P. and Barry M. Kitt(6)
  4965 Preston Park Blvd., Suite 240
  Plano, Texas 75093
 
 
 
 
833,400
 
 
 
7.3
%
 
 
 
 
 
 
 
 
 
 
 
Weiss Asset Management, LLC. Weiss Capital, LLC
  Andrew M. Weiss(7)
  29 Commonwealth Avenue, 10 th Floor
  Boston, Massachusetts 02116
 
 
 
 
 
819,664
 
 
 
7.2
%
 
 

(1)
Includes, in the case of each holder of warrants, shares of common stock issuable upon the exercise of warrants, which became exercisable on January 19, 2007.
 
(2)
The percentages of outstanding common stock take into account 2,602,813 shares issued in connection with the Acquisition of TSS/Vortech and the conversion of approximately 756,494 shares of common stock into cash in connection with the vote on the Acquisition of TSS/Vortech, resulting in approximately 11,396,319 outstanding shares of common stock (not including any shares issuable upon the exercise of warrants). This number of outstanding shares does not include the 574,000 shares of common stock to be issued to employees of TSS/Vortech in connection with the Closing of the Acquisition.  The percentages reflect, in both the numerator and denominator of the computation as to each beneficial owner, the number of shares of common stock issuable upon the exercise of warrants held by each beneficial owner.
 
(3)
Includes 575,000 shares held by Washington Capital Advisors, LLC, of which Mr. McMillen is the Chief Executive Officer.
 
(4)
Includes 452,000 shares of common stock issuable upon the exercise of warrants held by Mr. Weiss.
 
 

 
(5)
As reported in a Form 4 dated January 23, 2007, and filed with the SEC on January 23, 2007by Paul Sonkin, The Hummingbird Value Fund, LP, The Hummingbird Microcap Value Fund, LP, The Hummingbird Concentrated Fund, LP, Hummingbird Management, LLC and Hummingbird Capital, LLC.
 
(6)
As reported in a Schedule 13G dated January 22, 2007, and filed with the SEC on January 22, 2007.
 
(7)
As reported in a Schedule 13G dated December 14, 2006, and filed with the SEC on December 20, 2006. There is no family or other relationship between Harvey Weiss, our Chairman, and Weiss Asset Management, LLC, Weiss Capital, LLC or Andrew M. Weiss, Ph.D.
 
Directors and Executive Officers
 
The directors and executive officers of the Company upon the consummation of the Acquisition are described in the Definitive Proxy Statement in the Section entitled “Directors and Executive Officers of Fortress America Acquisition Corporation Following the Acquisition” beginning on page 100 of the Definitive Proxy Statement, which is incorporated herein by reference. Also see the Section of the Definitive Proxy Statement entitled “Certain Relationships and Related Transactions”, beginning on page 108, which is incorporated herein by reference.
 
Director and Executive Compensation
 
The compensation of the Company’s executive officers is described in the Definitive Proxy Statement in the Section entitled “Directors and Executive Officers of Fortress America Acquisition Corporation Following the Acquisition” beginning on page 100, and in particular under the subheading “Employment Agreements” beginning on page 103 and under the subheading “Consulting Agreement with Washington Capital Advisors, LLC” on page 105, of the Definitive Proxy Statement, which Section is incorporated herein by reference. Also see the Section of the Definitive Proxy Statement entitled “Certain Relationships and Related Transactions”, beginning on page 108, which is incorporated herein by reference.
 
The Board of Directors will consider at a future date policies with respect to compensation of non-employee members of the Board of Directors.
 
Certain Relationships and Related Transactions
 
Certain relationships and related party transactions are described in the Definitive Proxy Statement in the Section entitled “Certain Relationships and Related Transactions” beginning on page 108, which is incorporated herein by reference.
 
Legal Proceedings
 
The legal proceedings of the Company are described in the Definitive Proxy Statement in the Sections entitled “Information about TSS/Vortech - Legal Proceedings” on page 82, and “Information about Fortress America Acquisition Corporation - Legal Proceedings” on page 97, of the Definitive Proxy Statement, which Sections are incorporated herein by reference.
 
Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters
 
The Sections of the Definitive Proxy Statement entitled “Market Price Information for FAAC” on page 19, “Information about Fortress America Acquisition Corporation - Dividends” on page 97, “Price Range of Securities and Dividends” on page 112, and “Approval of the 2006 Omnibus Incentive Compensation Plan” on page 72, are incorporated herein by reference. The Company’s 2006 Omnibus Incentive Compensation Plan was approved at the Company’s special meeting of stockholders held on January 17, 2007.
 
The following table sets forth, for the calendar quarter indicated, the quarterly high and low bid information of the Company’s common stock as reported on the OTC Bulletin Board. The quotations listed below reflect interdealer prices, without retail markup, markdown or commission, and may not necessarily represent actual transactions:
 




Quarter Ended
 
Common Stock (FAAC)
 
Warrants (FAACW)
 
Units (FAACU)
 
 
 
    High    
 
    Low    
 
    High    
 
    Low    
 
    High    
 
    Low    
 
December 31, 2005
 
 
$
5.24
 
 
 
$
5.02
 
 
 
$
0.52
 
 
 
$
0.38
 
 
 
$
6.10
 
 
 
$
5.76
 
 
March 31, 2006
 
 
$
5.60
 
 
 
$
5.22
 
 
 
$
0.78
 
 
 
$
0.36
 
 
 
$
7.15
 
 
 
$
5.95
 
 
June 30, 2006
 
 
$
5.54
 
 
 
$
5.35
 
 
 
$
0.83
 
 
 
$
0.49
 
 
 
$
7.20
 
 
 
$
6.23
 
 
September 30, 2006
 
 
$
5.50
 
 
 
$
5.35
 
 
 
$
0.55
 
 
 
$
0.41
 
 
 
$
6.65
 
 
 
$
6.12
 
 
December 31, 2006
 
 
$
5.62
 
 
 
$
5.40
 
 
 
$
0.51
 
 
 
$
0.40
 
 
 
$
6.55
 
 
 
$
6.25
 
 
 
The closing prices of the Company’s common stock, units and warrants on January 19, 2007 were $5.44, $6.50, and $0.66, respectively.
 
In connection with the Acquisition, the Company’s stockholders approved an amendment and restatement of the Company’s Certificate of Incorporation, including changing the Company’s name from “Fortress America Acquisition Corporation” to “Fortress International Group, Inc.” The name change became effective on January 19, 2007. However, the Company’s common stock, units and warrants continue to trade on the over-the-counter bulletin board (OTCBB) under the symbols FAAC, FAACU, and FAACW, respectively.
 
Recent Sales of Unregistered Securities
 
Reference is made to the disclosure set forth under Item 3.02 of this Current Report on Form 8-K, which disclosure is incorporated herein by reference, concerning the recent sale of unregistered securities.
 
Indemnification of Directors and Officers
 
Article Sixth of the Second Amended and Restated Certificate of Incorporation provides as follows:
 
SIXTH:   Indemnification.
 
Section 6.1.  Right to Indemnification.  Each person who was or is a party or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit, proceeding or alternative dispute resolution procedure, whether (a) civil, criminal, administrative, investigative or otherwise, (b) formal or informal or (c) by or in the right of the Corporation (collectively, a “proceeding”), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director, officer, employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, manager, officer, partner, trustee, employee or agent of another foreign or domestic corporation or of a foreign or domestic limited liability company, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as such a director, officer, employee or agent of the Corporation or in any other capacity while serving as such other director, manager, officer, partner, trustee, employee or agent, shall be indemnified and held harmless by the Corporation against all judgments, penalties and fines incurred or paid, and against all expenses (including attorneys’ fees) and settlement amounts incurred or paid, in connection with any such proceeding, except in relation to matters as to which the person did not act in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful. Until such time as there has been a final judgment to the contrary, a person shall be presumed to be entitled to be indemnified under this Section 6.1. The termination of any proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, either rebut such presumption or create a presumption that (a) the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the Corporation, (b) with respect to any criminal action or proceeding, the person had reasonable cause to believe that the person’s conduct was unlawful or (c) the person was not successful on the merits or otherwise in defense of the proceeding or of any claim, issue or matter therein. If the DGCL is hereafter amended to provide for indemnification rights broader than those provided by this Section 6.1, then the persons referred to in this Section 6.1 shall be indemnified and held harmless by the Corporation to the fullest extent permitted by the DGCL as so amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than permitted prior to such amendment).
 



Section 6.2.  Determination of Entitlement to Indemnification. A determination as to whether a person who is a director or officer of the Corporation at the time of the determination is entitled to be indemnified and held harmless under Section 6.1 shall be made (a) by a majority vote of the directors who are not parties to such proceeding, even though less than a quorum, (b) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, (c) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (d) by the stockholders. A determination as to whether a person who is not a director or officer of the Corporation at the time of the determination is entitled to be indemnified and held harmless under Section 6.1 shall be made by or as directed by the Board of Directors of the Corporation.
 
Section 6.3.  Mandatory Advancement of Expenses. The right to indemnification conferred in this Article Sixth shall include the right to require the Corporation to pay the expenses (including attorneys’ fees) incurred in defending any such proceeding in advance of its final disposition; provided , however , that, if the Board of Directors so determines, an advancement of expenses incurred by an indemnitee in his or her capacity as a director or officer of the Corporation (but not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such indemnitee, to repay all amounts so advanced if it shall be finally determined that such indemnitee is not entitled to be indemnified for such expenses under Section 6.1 or otherwise.
 
Section 6.4.  Non-Exclusivity of Rights. The right to indemnification and the advancement of expenses conferred in this Article Sixth shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, any provision of this Certificate of Incorporation or of any bylaw, agreement, or insurance policy or arrangement, or any vote of stockholders or disinterested directors, or otherwise. The Board of Directors is expressly authorized to adopt and enter into indemnification agreements with, and obtain insurance for, directors and officers.
 
Section 6.5.  Effect of Amendment. Neither any amendment, repeal, or modification of this Article Sixth, nor the adoption or amendment of any other provision of this Certificate of Incorporation or the bylaws of the Corporation inconsistent with this Article Sixth, shall adversely affect any right or protection provided hereby with respect to any act or omission occurring prior to the date when such amendment, repeal, modification, or adoption became effective.
 
In addition, Section 145 of the DGCL provides for indemnification of officers, directors, employees and agents as set forth below.
 
Section 145. Indemnification of officers, directors, employees and agents; insurance.
 
(a)   A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person’s conduct was unlawful.
 



(b)   A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
 
(c)   To the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b) of this section, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith.
 
(d)   Any indemnification under subsections (a) and (b) of this section (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in subsections (a) and (b) of this section. Such determination shall be made, with respect to a person who is a director or officer at the time of such determination, (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (2) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, or (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (4) by the stockholders.
 
(e)   Expenses (including attorneys’ fees) incurred by an officer or director in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in this section. Such expenses (including attorneys’ fees) incurred by former directors and officers or other employees and agents may be so paid upon such terms and conditions, if any, as the corporation deems appropriate.
 
(f)   The indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this section shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office.
 
(g)   A corporation shall have power to purchase and maintain insurance on behalf of any person who is or was director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify such person against such liability under this section.
 
(h)   For purposes of this section, references to “the corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this section with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued.
 



(i)   For purposes of this section, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to “serving at the request of the corporation” shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the corporation” as referred to in this section.
 
(j)   The indemnification and advancement of expenses provided by, or granted pursuant to, this section shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
 
(k)   The Court of Chancery is hereby vested with exclusive jurisdiction to hear and determine all actions for advancement of expenses or indemnification brought under this section or under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise. The Court of Chancery may summarily determine a corporation’s obligation to advance expenses (including attorneys’ fees).”
 
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to the Company’s directors, officers, and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment of expenses incurred or paid by a director, officer or controlling person in a successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to the court of appropriate jurisdiction the question whether such indemnification is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

Financial Statements and Supplementary Data
 
Reference is made to the disclosure set forth under Item 9.01 of this Current Report on Form 8-K concerning the financial statements and supplementary data of the Company.
 
Financial Statements and Exhibits
 
Reference is made to the disclosure set forth under Item 9.01 of this Current Report on Form 8-K concerning the financial information of the Company.
 
Item 3.02. Unregistered Sales of Equity Securities
 
Reference is made to the disclosure in the Definitive Proxy Statement in the Section entitled “The Purchase Agreement - Purchase Price - Payment” beginning on page 53, which is incorporated herein by reference. The Company has claimed an exemption from registration under Section 4(2) of the Securities Act of 1933 for the 2,534,988 shares of common stock issued at the Closing of the Acquisition.
 



Item 3.03. Material Modification to Rights of Security Holders
 
Reference is made to the disclosure in the Definitive Proxy Statement in the Sections entitled “Approval of the Proposal to Amend and Restate our Amended and Restated Certificate of Incorporation” beginning on page 71, and “Registration Rights Agreement” beginning on page 60, which are incorporated herein by reference.
 
With the completion of the Acquisition, the Company’s outstanding warrants to purchase common stock became exercisable on January 19, 2007.
 
Prior to the Company’s initial public offering, the Company issued 1,750,000 shares to its founding shareholders. All of the remaining shares issued to the Company’s founding shareholders prior to the Company’s initial public offering (including an aggregate of 1,500,000 shares owned by Messrs. McMillen, Weiss, Mitchell and Nickles) remain in escrow with Continental Stock Transfer & Trust Company, as escrow agent, pursuant to an escrow agreement that expires on July 13, 2008. During the escrow period, these shares cannot be sold, but the founding stockholders will retain all other rights as stockholders, including, without limitation, the right to vote their shares of common stock and the right to receive cash dividends, if declared. If dividends are declared and payable in shares of common stock, such dividends will also be placed in escrow.
 
Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers; Compensatory Arrangements of Certain Officers
 
Effective immediately upon the closing of the Acquisition, C. Thomas McMillen resigned as chairman of the Company and Harvey L. Weiss resigned as chief executive officer, president and secretary of the Company. Each of Mr. McMillen and Mr. Weiss remains as a director of the Company. In addition, Mr. McMillen was elected as vice chairman of the Company, Harvey L. Weiss was elected as chairman of the Company, Thomas P. Rosato was elected as a director of the Company and as chief executive officer of the Company, and Gerard J. Gallagher was elected as a director of the Company and as president and chief operating officer of the Company. Reference is made to the disclosure in the Definitive Proxy Statement in the Section entitled “Directors and Executive Officers of Fortress America Acquisition Corporation Following the Acquisition” beginning on page 100, which is incorporated herein by reference.
 
The Company has entered into an employment and other agreements with each of Mr. Weiss, Mr. Rosato and Mr. Gallagher and has entered into a consulting agreement with Washington Capital Advisors, LLC, of which Mr. McMillen is the principal equity owner and officer, in each case on terms consistent with the description thereof in the Section of the Definitive Proxy Statement referred to immediately above, particularly in the subsection entitled “Employment Agreements” beginning on page 103 and the subsection entitled “Consulting Agreement with Washington Capital Advisors, LLC” beginning on page 105 of the Definitive Proxy Statement.
 
With respect to the compensation of non-employee directors, the disclosure included in Item 2.01, in the second, third and fourth paragraphs, under the heading “Director and Executive Compensation,” is incorporated herein by reference.
 
Item 5.03. Amendments to Articles of Incorporation or Bylaws.
 
In connection with the Acquisition, the Certificate of Incorporation of the Company was amended and restated. The Amended and Restated Certificate of Incorporation, which is attached as Exhibit 3.1 to this Current Report on Form 8-K, was filed with the Delaware Secretary of State on January 19, 2007, and all amendments reflected therein were effective on that date. Reference is made to the disclosure set forth in Item 2.01 of this Current Report on Form 8-K concerning the amendment and restatement of the Certificate of Incorporation and to the disclosure in the Definitive Proxy Statement in the Section entitled “Approval of the Proposal to Amend and Restate our Amended and Restated Certificate of Incorporation” on page 71 of the Definitive Proxy Statement, which is incorporated herein by reference.
 



Item 5.06. Change in Shell Company Status
 
As described in Item 2.01, on January 19, 2007, the Company completed the Acquisition. As a result, the Company is no longer a shell company as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended.
 
Item 9.01 Financial Statements and Exhibits
 
(a) Financial Statements of Businesses Acquired
 
The financial statements and selected financial information of TSS/Vortech are included in the Definitive Proxy Statement in the Sections entitled “Selected Historical and Pro Forma Combined Financial Information” beginning on page 15, and “Index to Financial Statements” beginning on page F-1, of the Definitive Proxy Statement, which are incorporated herein by reference.
 
(b) Pro Forma Financial Information
 
The pro forma financial information included in the Definitive Proxy Statement in the Section entitled “Unaudited Pro Forma Condensed Consolidated Financial Statements” beginning on page 61 is incorporated herein by reference.
 
(d) Exhibits
 
Exhibit
   
Number
 
Description
     
3.1
 
Amended and Restated Certificate of Incorporation dated January 19, 2007
     
10.1
 
Second Amended and Restated Membership Interest Purchase Agreement dated July 31, 2006 among Fortress America Acquisition Corporation, VTC, L.L.C., Vortech, LLC, Thomas P. Rosato and Gerard J. Gallagher, and Thomas P. Rosato as Members’ Representative (included as Annex A to the Definitive Proxy Statement dated December 27, 2006 and incorporated by reference herein)
     
10.2
 
Amendment to the Second Amended and Restated Membership Interest Purchase Agreement dated January 16, 2007 among Fortress America Acquisition Corporation, VTC, L.L.C., Vortech, LLC, Thomas P. Rosato and Gerard J. Gallagher, and Thomas P. Rosato as Members’ Representative (included as Exhibit 10.1 to the Current Report on Form 8-K dated January 19, 2007 and incorporated by reference herein)
     
10.3
 
Escrow Agreement (Balance Sheet Escrow) dated January 19, 2007 among Fortress America Acquisition Corporation, VTC, L.L.C., Vortech, LLC, Thomas P. Rosato and Gerard J. Gallagher, Thomas P. Rosato as Members’ Representative, and SunTrust Bank
     
10.4
 
Escrow Agreement (General Indemnity) among Fortress America Acquisition Corporation, VTC, L.L.C., Vortech, LLC, Thomas P. Rosato and Gerard J. Gallagher, Thomas P. Rosato as Members’ Representative, and SunTrust Bank
     
10.5
 
Registration Rights Agreement among Fortress America Acquisition Corporation and Thomas P. Rosato and Gerard J. Gallagher
     
10.6
 
Fortress America Acquisition Corporation 2006 Omnibus Incentive Compensation Plan (included as Annex E to the Definitive Proxy Statement dated December 27, 2006 and incorporated by reference herein)
     




10.7
 
Employment Agreement dated January 19, 2007 by Fortress America Acquisition Corporation and Harvey L. Weiss
     
10.8
 
Executive Consulting Agreement dated January 19, 2007 by Fortress America Acquisition Corporation and Washington Capital Advisors, Inc.
     
10.9
 
Executive Employment Agreement dated January 19, 2007 by Fortress America Acquisition Corporation and Thomas P. Rosato
     
10.10
 
Executive Employment Agreement dated January 19, 2007 by Fortress America Acquisition Corporation and Gerard J. Gallagher
     
10.11
 
Voting Agreement dated January 19, 2007 by Fortress America Acquisition Corporation, Thomas P. Rosato, Gerard J. Gallagher, C. Thomas McMillen and Harvey L. Weiss
     
99.1
 
Press Release of the registrant dated January 19, 2007





SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:   January 25, 2007


FORTRESS INTERNATIONAL GROUP, INC.

 
By: /s/ Harvey L. Weiss                  
Harvey L. Weiss
Chairman



EXHIBIT INDEX
 
Exhibit
   
Number
 
Description
     
3.1
 
Amended and Restated Certificate of Incorporation dated January 19, 2007
     
10.1
 
Second Amended and Restated Membership Interest Purchase Agreement dated July 31, 2006 among Fortress America Acquisition Corporation, VTC, L.L.C., Vortech, LLC, Thomas P. Rosato and Gerard J. Gallagher, and Thomas P. Rosato as Members’ Representative (included as Annex A to the Definitive Proxy Statement dated December 27, 2006 and incorporated by reference herein)
     
10.2
 
Amendment to the Second Amended and Restated Membership Interest Purchase Agreement dated January 16, 2007 among Fortress America Acquisition Corporation, VTC, L.L.C., Vortech, LLC, Thomas P. Rosato and Gerard J. Gallagher, and Thomas P. Rosato as Members’ Representative (included as Exhibit 10.1 to the Current Report on Form 8-K dated January 19, 2007 and incorporated by reference herein)
     
10.3
 
Escrow Agreement (Balance Sheet Escrow) dated January 19, 2007 among Fortress America Acquisition Corporation, VTC, L.L.C., Vortech, LLC, Thomas P. Rosato and Gerard J. Gallagher, Thomas P. Rosato as Members’ Representative, and SunTrust Bank
     
10.4
 
Escrow Agreement (General Indemnity) among Fortress America Acquisition Corporation, VTC, L.L.C., Vortech, LLC, Thomas P. Rosato and Gerard J. Gallagher, Thomas P. Rosato as Members’ Representative, and SunTrust Bank
     
10.5
 
Registration Rights Agreement among Fortress America Acquisition Corporation and Thomas P. Rosato and Gerard J. Gallagher
     
10.6
 
Fortress America Acquisition Corporation 2006 Omnibus Incentive Compensation Plan (included as Annex E to the Definitive Proxy Statement dated December 27, 2006 and incorporated by reference herein)
     
10.7
 
Employment Agreement dated January 19, 2007 by Fortress America Acquisition Corporation and Harvey L. Weiss
     
10.8
 
Executive Consulting Agreement dated January 19, 2007 by Fortress America Acquisition Corporation and Washington Capital Advisors, Inc.
     
10.9
 
Executive Employment Agreement dated January 19, 2007 by Fortress America Acquisition Corporation and Thomas P. Rosato
     
10.10
 
Executive Employment Agreement dated January 19, 2007 by Fortress America Acquisition Corporation and Gerard J. Gallagher
     
10.11
 
Voting Agreement dated January 19, 2007 by Fortress America Acquisition Corporation, Thomas P. Rosato, Gerard J. Gallagher, C. Thomas McMillen and Harvey L. Weiss
     
99.1
 
Press Release of the registrant dated January 19, 2007
 


SECOND AMENDED AND RESTATED
 
CERTIFICATE OF INCORPORATION
 
OF
 
FORTRESS AMERICA ACQUISITION CORPORATION
 
Pursuant to Section 242 and 245 of the General Corporation Law of the State of Delaware, Fortress America Acquisition Corporation, a Delaware corporation formed on December 20, 2004, hereby amends and restates its Certificate of Incorporation by its President and hereby certifies as follows:

FIRST : Name . The name of this corporation is Fortress International Group, Inc. (the "Corporation").
 
SECOND : Registered Office and Agent . The address of the Corporation's registered office in the State of Delaware is to be located at 2711 Centerville Road, Suite 400, in the City of Wilmington, County of New Castle, State of Delaware 19808. Its registered agent at such address is Corporation Service Company.
 
THIRD : Purpose . The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the Delaware General Corporation Law, as amended from time to time (the "DGCL").
 
FOURTH : Capital Stock .
 
Section 4.1. Authorized Shares . The total number of shares of stock which the Corporation shall have authority to issue is fifty-one million (51,000,000), fifty million (50,000,000) of which shall be shares of Common Stock with a par value of   $0.0001 per share and one million (1,000,000) of which shall be shares of Preferred Stock with a par value of $0.0001 per share.
 
Section 4.2. Common Stock . Except as otherwise required by law or as otherwise provided in the terms of any class or series of stock having a preference over the Common Stock as to dividends or upon liquidation, the holders of the Common Stock shall exclusively possess all voting power, and each share of Common Stock shall have one vote.
 
Section 4.3. Preferred Stock .
 
(a) Board Authorized to Fix Terms . The Board of Directors is authorized, subject to limitations prescribed by law, by resolution or resolutions to provide for the issuance of shares of preferred stock in one or more series, and, by filing a certificate when required by the DGCL, to establish from time to time the number of shares to be included in each such series and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions thereof. The authority of the Board of Directors with respect to each series shall include, but not be limited to, determination of the following:
 
(i) the number of shares constituting that series, including the authority to increase or decrease such number, and the distinctive designation of that series;
 
(ii) the dividend rate on the shares of that series, whether dividends shall be cumulative, and, if so, the date or dates from which they shall be cumulative and the relative rights of priority, if any, in the payment of dividends on shares of that series;
 
(iii) the voting rights, if any, of the shares of that series in addition to the voting rights provided by law and the terms of any such voting rights;
 
(iv) the terms and conditions, if any, upon which shares of that series shall be convertible or exchangeable for shares of any other class or classes of stock of the Corporation or other entity, including provision for adjustment of the conversion or exchange rate upon the occurrence of such events as the Board of Directors shall determine;

 
 
 

 



(v) the right, if any, of the Corporation to redeem shares of that series and the terms and conditions of such redemption, including the date or dates upon or after which they shall be redeemable and the amount per share payable in case of redemption, which amount may vary according to different conditions and different redemption dates;
 
(vi) the obligation, if any, of the Corporation to retire shares of that series pursuant to a retirement or sinking fund or fund of a similar nature for the redemption or purchase of shares of that series and the terms and conditions of such obligation;
 
(vii) the rights of the shares of that series in the event of voluntary or involuntary liquidation, dissolution or winding up of the Corporation, and the relative rights of priority, if any, in the payment of shares of that series; and
 
(viii) any other rights, preferences and limitations of the shares of that series as may be permitted by law.
 
(b) Dividend Preference . Dividends on outstanding shares of preferred stock shall be paid or declared and set apart for payment before any dividends shall be paid or declared and set apart for payment on shares of common stock with respect to the same dividend period.
 
(c) Relative Liquidation Preference . If, upon any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the assets available for distribution to holders of shares of preferred stock of all series shall be insufficient to pay such holders the full preferential amount to which they are entitled, then such assets shall be distributed ratably among the shares of all series of preferred stock in accordance with their respective priorities and preferential amounts (including unpaid cumulative dividends, if any) payable with respect thereto.
 
(d) Reissuance of Preferred Stock . Subject to the conditions or restrictions on issuance set forth in the resolution or resolutions adopted by the Board of Directors providing for the issue of any series of shares of Preferred Stock, shares of Preferred Stock of any series that have been redeemed or repurchased by the Corporation (whether through the operation of a sinking fund or otherwise) or that, if convertible or exchangeable, have been converted or exchanged in accordance with their terms, shall be retired and have the status of authorized and unissued shares of Preferred Stock of the same series and may be reissued as a part of the series of which they were originally a part or may, upon the filing of an appropriate certificate with the Delaware Secretary of State, be reissued as part of a new series of shares of Preferred Stock to be created by resolution or resolutions of the Board of Directors or as part of any other series of shares of Preferred Stock.
 
FIFTH: Elimination of Certain Liability of Directors . No director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director except (a) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (b) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (c) under Section 174 of the DGCL or (d) for any transaction from which the director derived an improper personal benefit. If the DGCL is hereafter amended to permit a corporation to further eliminate or limit the liability of a director of a corporation, then the liability of a director of the Corporation, in addition to the circumstances in which a director is not personally liable as set forth in the preceding sentence, shall, without further action of the directors or stockholders, be further eliminated or limited to the fullest extent permitted by the DGCL as so amended. Neither any amendment, repeal, or modification of this Article Fifth, nor the adoption or amendment of any other provision of this Certificate of Incorporation or the bylaws of the Corporation inconsistent with this Article Fifth, shall adversely affect any right or protection provided hereby with respect to any act or omission occurring prior to the date when such amendment, repeal, modification, or adoption became effective.
 

 
 
 

 


SIXTH: Indemnification .
 
Section 6.1. Right to Indemnification . Each person who was or is a party or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit, proceeding or alternative dispute resolution procedure, whether (a) civil, criminal, administrative, investigative or otherwise, (b) formal or informal or (c) by or in the right of the Corporation (collectively, a "proceeding"), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director, officer, employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, manager, officer, partner, trustee, employee or agent of another foreign or domestic corporation or of a foreign or domestic limited liability company, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as such a director, officer, employee or agent of the Corporation or in any other capacity while serving as such other director, manager, officer, partner, trustee, employee or agent, shall be indemnified and held harmless by the Corporation against all judgments, penalties and fines incurred or paid, and against all expenses (including attorneys' fees) and settlement amounts incurred or paid, in connection with any such proceeding, except in relation to matters as to which the person did not act in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person's conduct was unlawful. Until such time as there has been a final judgment to the contrary, a person shall be presumed to be entitled to be indemnified under this Section 6.1. The termination of any proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, either rebut such presumption or create a presumption that (a) the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the Corporation, (b) with respect to any criminal action or proceeding, the person had reasonable cause to believe that the person's conduct was unlawful or (c) the person was not successful on the merits or otherwise in defense of the proceeding or of any claim, issue or matter therein. If the DGCL is hereafter amended to provide for indemnification rights broader than those provided by this Section 6.1, then the persons referred to in this Section 6.1 shall be indemnified and held harmless by the Corporation to the fullest extent permitted by the DGCL as so amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than permitted prior to such amendment).
 
Section 6.2. Determination of Entitlement to Indemnification . A determination as to whether a person who is a director or officer of the Corporation at the time of the determination is entitled to be indemnified and held harmless under Section 6.1 shall be made (a) a majority vote of the directors who are not parties to such proceeding, even though less than a quorum, (b) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, (c) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (d) by the stockholders. A determination as to whether a person who is not a director or officer of the Corporation at the time of the determination is entitled to be indemnified and held harmless under Section 6.1 shall be made by or as directed by the Board of Directors of the Corporation.
 
Section 6.3. Mandatory Advancement of Expenses . The right to indemnification conferred in this Article Sixth shall include the right to require the Corporation to pay the expenses (including attorneys' fees) incurred in defending any such proceeding in advance of its final disposition; provided , however , that, if the Board of Directors so determines, an advancement of expenses incurred by an indemnitee in his or her capacity as a director or officer of the Corporation (but not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such indemnitee, to repay all amounts so advanced if it shall be finally determined that such indemnitee is not entitled to be indemnified for such expenses under Section 6.1 or otherwise.
 
Section 6.4. Non-Exclusivity of Rights . The right to indemnification and the advancement of expenses conferred in this Article Sixth shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, any provision of this Certificate of Incorporation or of any bylaw, agreement, or insurance policy or arrangement, or any vote of stockholders or disinterested directors, or otherwise. The Board of Directors is expressly authorized to adopt and enter into indemnification agreements with, and obtain insurance for, directors and officers.
 
Section 6.5. Effect of Amendment . Neither any amendment, repeal, or modification of this Article Sixth, nor the adoption or amendment of any other provision of this Certificate of Incorporation or the bylaws of the Corporation inconsistent with this Article Sixth, shall adversely affect any right or protection provided hereby with respect to any act or omission occurring prior to the date when such amendment, repeal, modification, or adoption became effective.

 
 
 

 


 
SEVENTH: Miscellaneous . The following provisions are inserted for the management of the business and for the conduct of the affairs of the Corporation and for the purpose of creating, defining, limiting and regulating powers of the Corporation and its directors and stockholders:
 
Section 7.1 Classification, Election and Term of Office of Directors . The directors, other than those who may be elected by the holders of any class or series of stock having a preference over the Common Stock as to dividends or upon liquidation, shall be classified with respect to the time for which they severally hold office into three classes, as nearly equal in number as possible. At the first election of directors by the incorporator, the incorporator shall elect a director for a term expiring at the Corporation's third annual meeting of stockholders. That director shall then elect additional directors to serve in the other classes of directors with terms expiring at the first and second annual meetings of stockholders. At each succeeding annual meeting of stockholders successors to the class of directors whose term expires at that meeting shall be elected by plurality vote of all votes cast at such meeting to hold office for a term expiring at the annual meeting of stockholders held in the third year following the year of their election, subject, however, to their prior death, resignation or removal from office as provided by law. If the number of directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain a number of directors in each class as nearly equal as possible. Any additional director of any class elected to fill a vacancy resulting from an increase in such class shall hold office for a term that shall coincide with the remaining term of such class. No decrease in the number of directors shall change the term of any director in office at the time of such decrease. A director shall hold office until the annual meeting for the year in which the director's term expires and such director's successor shall be elected and qualified, subject, however, to such director's prior death, resignation or removal from office.
 
Section 7.2 Manner of Election of Directors . Elections of directors need not be by written ballot unless the bylaws of the Corporation shall so provide.
 
Section 7.3 Adoption and Amendment of Bylaws . The Board of Directors shall have power to make and adopt bylaws with respect to the organization, operation and government of the Corporation and, subject to such restrictions as may be set forth in the bylaws, from time to time to change, alter, amend or repeal the same, but the stockholders of the Corporation may make and adopt additional bylaws and, subject to such restrictions as may be set forth in the bylaws, may change, alter, amend or repeal any bylaw whether adopted by them or otherwise.
 
Section 7.4 Vote Required to Amend Certain Provisions of Certificate of Incorporation . Notwithstanding any other provision of this Certificate of Incorporation or the bylaws of the Corporation or any provision of law which might otherwise permit a lesser vote, but in addition to any affirmative vote of the holders of any particular class or series of stock required by law, this Certificate of Incorporation, or the bylaws, the affirmative vote of the holders of at least 66⅔% of the Corporation's capital stock entitled to vote generally in the election of directors, voting as a single class, shall be required to alter, amend, or adopt any provision inconsistent with or repeal Articles Fifth, Sixth and Seventh of this Certificate of Incorporation.
 
Section 7.5 Severability . In the event any provision (or portion thereof) of this Certificate of Incorporation shall be found to be invalid, prohibited, or unenforceable for any reason, the remaining provisions (or portions thereof) of this Certificate of Incorporation shall be deemed to remain in full force and effect, and shall be construed as if such invalid, prohibited, or unenforceable provision had been stricken herefrom or otherwise rendered inapplicable, it being the intent of the Corporation and its stockholders that each such remaining provision (or portion thereof) of this Certificate of Incorporation remain, to the fullest extent permitted by law, applicable and enforceable as to all stockholders, notwithstanding any such finding.
 
Section 7.6 Reservation of Right to Amend Certificate of Incorporation . The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute or herein, and all rights conferred upon stockholders herein are granted subject to this reservation.

 
 
 

 

IN WITNESS WHEREOF, the Corporation has caused this Second Amended and Restated Certificate of Incorporation to be signed by Harvey L. Weiss, President, as of the 19 day of January, 2007.


 
/s/ Harvey L. Weiss
 
By: Harvey L. Weiss
 
Title: President


E SCROW AGREEMENT
(Balance Sheet Escrow)

ESCROW AGREEMENT (“ Agreement ”), dated as of January 19, 2007, by and among (a) Fortress America Acquisition Corporation, a Delaware corporation ("FAAC"); (b) VTC, L.L.C., a Maryland limited liability company (“VTC”); (c) Vortech, LLC, a Maryland limited liability company (“Vortech”); (d) Thomas P. Rosato (“Rosato”) and Gerard J. Gallagher (“Gallagher” who together with Rosato owns, or control all of the outstanding membership interests of both VTC and Vortech (each a “Member” and jointly the “Members”); (e) Thomas P. Rosato in his capacity as the Members’ Representative; and (f) SunTrust Bank, a Georgia banking corporation (the “ Escrow Agent ”).
 
RECITALS:
 
WHEREAS, pursuant to that certain Second Amended and Restated Membership Interest Purchase Agreement, dated July 31, 2006, as amended by an Amendment To The Second Amended and Restated Membership Interest Purchase Agreement dated January 16, 2007, copies of which without schedules or exhibits are attached hereto as Exhibit 1 (“ Membership Interest Purchase Agreement ”) that are hereby incorporated by reference, FAAC will acquire all of the outstanding membership interests of each VTC and Vortech;
 
WHEREAS, pursuant to Section 2.6 of the Membership Interest Purchase Agreement, the Members designated Thomas P. Rosato as their representative, agent and attorney-in-fact for purposes of this Agreement and other various matters described therein (the “ Members’ Representative ”);

WHEREAS, as partial consideration for their respective membership interests in VTC and Vortech, each of the Members has received from FAAC pursuant to the terms of the Membership Interest Purchase Agreement and Stock Acquistion Agreements, copies of which (without schedules or exhibits) are attached as Exhibit 2 (jointly the “ Stock Purchase Agreements ”) in the aggregate 2,534,988 shares of FAAC common stock of which 73,260 shares are hereby delivered by FAAC and the Members to the Escrow Agent (the “ Escrow Deposit ”) to hold in escrow pursuant to ther terms of this Agreement;

WHEREAS, the parties desire to specify and clarify their rights and responsibilities with respect to the Escrow Deposit; and
 
WHEREAS, the Escrow Agent is willing to serve in such capacity, but only pursuant to the terms and conditions of this Agreement.
 
NOW, THEREFORE, in consideration of the mutual promises contained herein, the parties hereto agree as follows:
 
1.   Definitions .
 
1.1.   As used in this Agreement, the following terms shall have the meanings set forth below:
 

 
1

 


 
Agreed Share Value ” has the meaning set forth in Section 5.3.
Agreement ” means this Escrow Agreement.

Business Day ” shall mean any day other than a Saturday, Sunday, or any Federal or Commonwealth of Virginia 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.
 
Escrow Account ” has the meaning set forth in Section 4.1.

Escrow Agent ” has the meaning set forth in the Preamble.

Escrow Property ” has the meaning set forth in Section 4.1.

Escrow Deposit ” has the meaning set forth in the Recitals.

" Final Determination " has the meaning set forth in Section 5.1(b).

FAAC ” has the meaning set forth in the Preamble.

" Indemnity Claim " has the meaning set forth in Section 5.2.

" Indemnity Claim Notice " has the meaning set forth in Section 5.2.

Members ” has the meaning set forth in the Preamble.

Members’ Representative ” has the meaning set forth in the Recitals.

Membership Interest Purchase Agreement ” has the meaning set forth in the Recitals.

1.2.   Capitalized terms used but not defined in this Agreement have the meanings ascribed to such terms in the Membership Interest Purchase Agreement.
 
2.   Appointment of Escrow Agent . FAAC, the Members, and the Members’ Representative hereby appoint the Escrow Agent to act as an escrow agent as provided herein, and the Escrow Agent hereby accepts such appointment.
 

 
2

 


 
3.   Members’ Representative .
 
3.1.   The parties acknowledge that, pursuant to the Membership Interest Purchase Agreement, the Members’ Representative is authorized to act as the agent and attorney-in-fact on behalf of all of the Members in all matters necessary to carry out the terms and conditions of this Agreement.
 
3.2.   The Members’ Representative represents and warrants to the Escrow Agent that he has the irrevocable right, power and authority with respect to all of the Members (a) to give and receive directions and notices hereunder, (b) to make all determinations that may be required or that he deems appropriate under this Agreement, and (c) to execute and deliver all documents that may be required or that he deems appropriate under this Agreement. The Escrow Agent may act upon the directions, instructions and notices of the Members’ Representative named above and thereafter upon the directions and instructions of the successor Members’ Representative named in a writing executed by a majority-in-interest of the Members (pursuant to the provisions of Section 2.6 of the Membership Interest Purchase Agreement) filed with the Escrow Agent.
 
4.   Delivery of Escrow Deposit .
 
4.1.   FAAC acknowledges that it deposited the Escrow Deposit in an account (the “ Escrow Account ”) with the Escrow Agent. The FAAC common stock in the Escrow Account, together with any dividends (and any interest or other net income received from or earned thereon) is hereinafter collectively referred to as the “ Escrow Property .”
 
4.2.   If, during the term of this Agreement, there is Escrow Property other than the FAAC common shares, the Escrow Agent will invest the Escrow Property (other than the FAAC common stock) as provided in Section 11.
 
5.   Disbursement of the Escrow Property . The Escrow Agent will hold the Escrow Property and, subject to the Escrow Agent’s right in Section 9 to withhold disbursements when the Escrow Agent is uncertain as to what action to take, make disbursements therefrom as follows .
 
5.1.   Escrow Agent shall disburse all or a portion of the Escrow Property on deposit in the Escrow Account to FAAC, the Members or both, as the case may be, upon receipt of:
 
(a)   one or more fully executed Payment Request Forms in substantially the form attached hereto as Exhibit 3 , executed by FAAC and the Members' Representative on behalf of the Members, and otherwise pursuant to the terms hereof. Upon receipt of a Payment Request Form, the shares and amounts specified therein shall be promptly delivered or paid directly to the party or parties entitled to payment as specified in the Payment Request Form; or
 
(b)   a copy of a Final Determination (as defined below) establishing a party's right to the Escrow Property. A " Final Determination " shall mean (i) with respect to an Indemnity Claim (or any other dispute between the Members’ Representative and FAAC with respect to whether either party is entitled to some portion, or all of the Escrow Property), a final determination stating that it is being provided under the procedures of Section 11.11 of the Membership Interest Purchase Agreement; or (ii) otherwise a final judgment of an arbitrator, arbitration panel or court of competent jurisdiction and shall in all cases be accompanied by a certificate of the presenting party to the effect that such judgment is a final judgment of an arbitrator, arbitration panel or court of competent jurisdiction, as applicable, and indicating the party, address, accounts or other information as necessary to process payments.
 

 
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5.2.   If FAAC asserts in good faith a claim (an “ Indemnity Claim ”) against the Members pursuant to the Membership Interest Purchase Agreement, FAAC shall send written notice of such Indemnity Claim (an “ Indemnity Claim Notice ”) to the Escrow Agent and to the Members’ Representative. Such Indemnity Claim Notice shall set forth in reasonable detail the basis for such Indemnity Claim and a good faith, non-binding estimate of the amount of such Indemnity Claim. In submitting such Indemnity Claim to the Escrow Agent, FAAC shall account for any applicable threshold, exclusion or cap provided for in the Membership Interest Purchase Agreement. Whenever FAAC sends such an Indemnity Claim Notice, the parties shall comply with the procedures set forth herein.
 
(a)   If the Members’ Representative decides, in his sole and absolute discretion, to dispute the Indemnity Claim described in the Indemnity Claim Notice, the Members’ Representative shall, on or before the twentieth (20 th ) Business Day following the Escrow Agent’s receipt of such notice, send to the Escrow Agent and FAAC a written objection to such Indemnity Claim.
 
(b)   If the Escrow Agent receives from the Members’ Representative a written objection to such Indemnity Claim on or before the twentieth (20 th ) Business Day following the Escrow Agent’s receipt of the Indemnity Claim Notice describing such Indemnity Claim, and if that Indemnity Claim cannot be settled through negotiation within twenty (20) days of receipt of the written objection, then the dispute shall be resolved in accordance with Section 11.11 of the Membership Interest Purchase Agreement and Escrow Agent shall hold the funds subject to such dispute until a Final Determination is delivered with respect thereto.
 
(c)   If the Escrow Agent does not receive from the Members’ Representative a written objection to such Indemnity Claim Notice on or before the twentieth (20 th ) Business Day following the Escrow Agent’s receipt of the Indemnity Claim Notice describing such Indemnity Claim, then the Escrow Agent shall make a disbursement to FAAC from the Escrow Property in the amount of the Indemnity Claim described in such Indemnity Claim Notice.  
 
5.3.   To the extent that a Payment Request Form, Final Determination, or Indemnity Claim (made and not timely answered pursuant to Section 5.2(c) above) specifies a dollar amount (rather than a share amount) payable thereunder or in satisfaction thereof, the amount specified or claimed shall be satisfied by the delivery from the Escrow Property to FAAC or the Members’ Representative, as the case may be, of certificates for FAAC common stock equal in value to the amount specified or claimed (with the FAAC common stock valued at Five and 46/100 Dollars ($5.46) per share (the “ Agreed Share Value ”)
 

 
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6.   Payments from the Escrow Property .
 
6.1.   The Escrow Agent shall make no payments from the Escrow Property unless permitted pursuant to Sections 5, 7, 9, 10 and 13.
 
6.2.   Any cash amounts payable by the Escrow Agent under this Agreement shall be paid by bank check or by wire transfer, as specified in the Payment Request Form or Final Determination received by the Escrow Agent.
 
6.3.   Any amounts payable in FAAC common stock under this Agreement shall be payable by the delivery of stock certificates for FAAC common stock valued at the Agreed Share Value. To the extent that the number of shares deliverable by the Escrow Agent does not correspond with stock certificates then held by the Escrow Agent, the Escrow Agent shall deliver to FAAC one or more share certificates evidencing shares in excess of the number of FAAC common shares then deliverable with instructions to FAAC (i) to retain and cancel a specified number of shares (if shares are deliverable to FAAC hereunder) or issue to the Members’ Representative, or to whomever the Members’ Representative directs FAAC (if shares are deliverable to the Members’ Representative hereunder), a certificate or certificates for FAAC common shares in the amount deliverable by the Escrow Agent to FAAC or the Members’ Representative as applicable and (ii) to issue to the Escrow Agent a certificate for the residual balance, if any, of those FAAC common shares evidenced the share certificate(s) delivered by the Escrow Agent to FAAC.
 
6.4.   All interest and other income, if any, received from or earned on the Escrow Property net of distributions paid or to be paid pursuant to Section 7.3 (“Earnings”) shall be applied first to pay any Escrow Fees then due under Section 13, with any remaining Earnings to become a part of the Escrow Property and be paid in accordance with the other terms of this Agreement.
 
6.5.   The parties hereto (other than the Escrow Agent) each warrant to and agree with the Escrow Agent that, unless otherwise expressly set forth in this Agreement, there is no security interest in the Escrow Property or any part of the Escrow Property; no financing statement under the Uniform Commercial Code of any jurisdiction is on file in any jurisdiction claiming a security interest in or describing, whether specifically or generally, the Escrow Property or any part of the Escrow Property. Notwithstanding anything to the contrary herein provided, the Escrow Agent shall in no event be deemed to be a collateral agent or agent for any pledge or purported pledge of property held under this Agreement. The Escrow Agent makes no representation concerning whether or not any security interest exists with respect to any property held under the terms of this Agreement and the Escrow Agent shall have no duty or obligation with respect to the creation, perfection or continuation of any such security interest, it being understood that the duties of the Escrow Agent with respect to any property held pursuant to this Agreement are limited and confined exclusively to the duties and responsibilities expressly set forth herein. This Agreement shall not be deemed or construed to be a security agreement or to grant a security interest in any property held in escrow hereunder.
 

 
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7.   Tax Matters .
 
7.1.   The parties agree that the Escrow Property is intended to consist only of FAAC common shares and that no taxable income is anticipated. Notwithstanding the previous sentence, for tax reporting purposes in each calendar year (other than the calendar year in which this Agreement is terminated pursuant to Section 14 below), all interest or other income earned from the investment of the Escrow Property together with all fees and expenses pursuant to Section 13 below (or that may otherwise be taken into consideration for purposes of calculating and reporting taxes due on earnings with respect to the Escrow Account and Funds) shall be allocable to FAAC and so reported to the Internal Revenue Service and any other applicable taxing authority, except to the extent that any law or regulation should otherwise require, as provided in a written notice from FAAC to the Escrow Agent. Notwithstanding anything to the contrary contained herein, for the calendar year during which this Agreement is terminated pursuant to Section 14 below, all income, fees and expenses shall be allocated pro rata to the persons receiving payments of the Escrow Property during that year.
 
7.2.   Each of the parties agrees to provide the Escrow Agent with a certified tax identification number by signing and returning a Form W-9 (or Form W-8, in the case of non-U.S. persons) to the Escrow Agent within 30 days from the date hereof. The parties understand that, in the event their tax identification numbers are not certified to the Escrow Agent, the Internal Revenue Code may require withholding of a portion of any interest or other income earned on the investment of the Escrow Property, in accordance with the Internal Revenue Code, as amended from time to time.
 
7.3.   The Escrow Agent shall distribute quarterly to FAAC amounts when and in the amounts requested in writing in good faith by FAAC to cover the potential federal, state or local tax obligations of FAAC on account of the cumulative allocation to FAAC of taxable income attributable to the interest and other income earned on the Escrow Property. Such distributions shall be requested and made with respect to each quarter as early as fifteen (15) days prior to the date that United States taxpayers are required to make estimated federal tax payments with respect to such quarter. For purposes of the foregoing, such federal, state and local tax obligations of FAAC initially shall be assumed to equal an effective combined federal and state income tax rate equal to forty-two percent (42%) (but in no event lower than the highest Federal marginal income tax rate plus seven percent (7%)).
 
7.4.   The Escrow Agent shall report to the Internal Revenue Service, as of each calendar year-end, all income earned from the Escrow Property, whether or not such income has been distributed during such year, as and to the extent required by law; and, the Escrow Agent shall prepare and file any tax returns required to be filed with respect to the Escrow Account.
 
7.5.   The persons to whom income is allocable for each year shall pay all taxes payable on income earned from the investment of the Escrow Property, whether or not the Escrow Agent distributed the income during any particular year.
 
8.   Escrow Agent’s Duties .
 
8.1.   The Escrow Agent’s duties are entirely ministerial and not discretionary, and the Escrow Agent will be under no duty or obligation to give any notice, or to do or to omit the doing of any action with respect to the Escrow Property, except to give notice, make disbursements and invest the Escrow Property in accordance with the terms of this Agreement.
 

 
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8.2.   The Escrow Agent will neither be responsible for, nor chargeable with, knowledge of the terms and conditions of any other agreement, instrument or document among the other parties hereto, in connection herewith, including the Membership Interest Purchase Agreement, and will be required to act only pursuant to the terms and provisions of this Agreement. This Agreement sets forth all matters pertinent to the escrow contemplated hereunder, and no additional obligations of the Escrow Agent will be inferred from the terms of this Agreement, the Membership Interest Purchase Agreement or any other agreement.
 
8.3.   The Escrow Agent will not be liable for any error in judgment or any act or steps taken or permitted to be taken in good faith, or for any mistake of law or fact, or for anything it may do or refrain from doing in connection with this Agreement, except for its own willful misconduct or gross negligence. As to any legal questions arising in connection with the administration of this Agreement, the Escrow Agent may consult with and rely absolutely upon the opinions given to it by counsel (including internal counsel) and shall be free of liability for acting in reliance on such opinions. In no event shall the Escrow Agent be liable for incidental, indirect, special, consequential or punitive damages.
 
8.4.   The Escrow Agent will not be required in any way to determine the validity, genuineness, authenticity or sufficiency, whether in form or substance, of any instrument, document, certificate, statement or notice referred to in this Agreement or contemplated by this Agreement, or the identity or authority of the persons executing it, and it will be sufficient if any writing purporting to be such instrument, document, certificate, statement or notice is delivered to the Escrow Agent and purports to be correct in form and signed or otherwise executed by the party or parties required to sign or execute it under this Agreement. The Escrow Agent reserves the right, but shall in no way be obligated, to call upon the parties, or any of them, for written instructions before taking any actions hereunder.
 
8.5.   During the term of this Agreement, the Escrow Agent shall not exercise on its own behalf any right of set-off against, or enforce any lien on, the Escrow Property, except such right or lien as may arise in connection with this Agreement.
 
8.6.   The parties to this Agreement agree to make modifications to this Section upon the reasonable request of the Escrow Agent.
 
8.7.   In the event of a shareholder vote, the Escrow Agent shall have the right to exercise all voting rights with respect to the FAAC common stock held by the Escrow Agent as part of the Escrow Property; provided, however, that the Escrow Agent shall have no discretion as to voting the shares of FAAC common stock except in a fashion that is in all respects proportional to the manner in which the FAAC common stock not held as part of the Escrowed Property is voted (as certified by FAAC’s Secretary). FAAC, Rosato, Gallagher and the Members’ Representative each hereby (i) instruct the Escrow Agent to vote all of the FAAC common shares held as Escrow Property in the manner described in this Section 8.7 and (ii) agree that the Escrow Agent shall have no liability with respect to voting the FAAC common stock held as Escrow Property in the manner described in this Section 8.7. This Section 8.7 shall constitute an irrevocable proxy, coupled with an interest, with respect to any shares of FAAC common stock (or other FAAC securities) that Escrow Agent holds pursuant to this Agreement.
 

 
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9.   Disputes .
 
9.1.   It is understood and agreed that should any dispute arise with respect to the payment and/or ownership or right of possession of the Escrow Property, or should the Escrow Agent be uncertain as to what action to take with respect to the Escrow Property, the Escrow Agent is authorized and directed to retain in its possession, without liability to anyone, all or any part of the Escrow Property until such dispute or uncertainty shall have been settled either by mutual agreement by the parties concerned (as evidenced by a written agreement among them) or by a Final Determination.
 
9.2.   If the Escrow Agent becomes involved in litigation by reason of this Agreement, or if the Escrow Agent reasonably believes, in its sole discretion, that it may become involved in litigation, the Escrow Agent is authorized to institute a bill of interpleader in a court in the Commonwealth of Virginia to determine the rights of the parties and to deposit the Escrow Property with the court in accordance with the Commonwealth of Virginia law. Upon deposit of the Escrow Property with the court, the Escrow Agent shall stand fully relieved and discharged of any further duties as Escrow Agent. The filing of any such legal proceedings shall not deprive the Escrow Agent of its compensation hereunder earned prior to such filing and discharge of the Escrow Agent of its duties hereunder.
 
9.3.   If a bill of interpleader is instituted, or if the Escrow Agent is threatened with litigation or becomes involved in litigation in any manner whichever on account of this Agreement or the Escrow Property, FAAC and the Members, jointly and severally, shall pay the Escrow Agent its reasonable attorneys’ fees and any other disbursements, expenses, losses, costs and damages incurred by the Escrow Agent in connection with or resulting from such threatened or actual litigation. All costs and expenses of such dispute will be charged to the non-prevailing party in such dispute, unless such non-prevailing party is a third party, in which case the Escrow Agent’s costs and expenses will be charged to and paid out of the Escrow Property, and to the extent the Escrow Property are insufficient, will be charged equally to FAAC and the Members.
 
9.4.   In the event that the Escrow Agent proposes to disburse to the Members any portion of the Escrow Property, the disbursement of which the Escrow Agent had previously withheld pursuant to this Section, the Escrow Agent shall disburse such amount to the Member’s Representative.
 
10.   Indemnity . FAAC and the Members jointly and severally agree to hold the Escrow Agent harmless and to indemnify the Escrow Agent against any loss, liability, expenses (including reasonable attorney’s fees and expenses), claim, or demand arising out of or in connection with the performance of its obligations in accordance with the provisions of this Agreement, except for willful misconduct or gross negligence of the Escrow Agent. Notwithstanding anything in this Agreement to the contrary, the Escrow Agent shall be entitled to set-off against the Escrow Property and apply such set-off to payment of such fees and disbursements and other liabilities and obligations hereunder. Upon the written request of the Escrow Agent, FAAC and the Members jointly and severally agree to assume the investigation and defense of any such claim, including the employment of counsel acceptable to the Escrow Agent and the payment of all expenses related thereto and, notwithstanding any such assumption, the Escrow Agent shall have the right, and FAAC and the Members jointly and severally agree to pay the cost and expense thereof, to employ separate counsel with respect to any such claim and participate in the investigation and defense thereof in the event that the Escrow Agent shall have been advised by counsel that there may be one or more legal defenses available to the Escrow Agent which are different from or in addition to those available to FAAC or the Members. FAAC and the Members agree that all references in this Section to the Escrow Agent shall be deemed to include references to its directors, officers, employees and agents. The foregoing indemnities in this paragraph shall survive the resignation or removal of the Escrow Agent or the termination of this Agreement.
 

 
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11.   Investment .
 
11.1.   As used in this Section, “ Eligible Investments ” include one or more of the following obligations or securities, but only to the extent that such obligations or securities mature within thirty (30) calendar days or such longer time as the Members’ Representative and FAAC shall determine, such longer maturities not to exceed eighteen (18) months from the Closing Date: (a) direct obligations of, or obligations fully guaranteed by, the United States of America or any agency thereof, and (b) money market funds investing primarily in the obligations or securities listed in clause (a) above or repurchase agreements fully collateralized by direct obligations of the United States of America.
 
11.2.   The Escrow Agent will invest the Escrow Property in such Eligible Investments as the Members’ Representative and FAAC, from time to time, shall jointly instruct the Escrow Agent in writing. Notwithstanding the foregoing, in no event shall the FAAC common stock held as part of the Escrow Property be invested. Earnings upon Eligible Investments shall be deemed part of the Escrow Property, shall be deposited in the Escrow Account and shall be disbursed in accordance with the terms of this Agreement. Any loss or expense incurred from an Eligible Investment shall be borne by the Escrow Property. The Escrow Agent shall have no responsibility or liability for any diminution which may result from any investments or reinvestments made in accordance with this Agreement.
 
11.3.   The parties acknowledge and agree that the Escrow Agent will not provide supervision, recommendations or advice relative to either the investment of the Escrow Property or the purchase, sale, retention or other disposition of any Eligible Investment.
 
11.4.   The Escrow Agent is hereby authorized to execute purchases and sales of Eligible Investments through its own trading or capital markets operations. The Escrow Agent shall send statements to FAAC and the Members’ Representative reflecting activity for the Escrow Account for the preceding quarter within fifteen (15) days after the last day of each calendar quarter. Although the parties acknowledge that they may obtain a broker confirmation or written statement containing comparable information at no additional cost, each party hereby agrees that confirmations of Eligible Investments are not required to be issued by the Escrow Agent for each period in which a statement is provided.
 

 
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12.   Resignation .
 
12.1.   The Escrow Agent may resign upon thirty (30) calendar days’ prior written notice to the Members’ Representative and FAAC, and, upon joint instructions from the Members’ Representative and FAAC, will deliver the Escrow Property to any designated substitute Escrow Agent selected by the Members’ Representative and FAAC. If the Members’ Representative and FAAC fail to designate a substitute Escrow Agent within 15 calendar days after receipt of such notice, the Escrow Agent may, at its sole discretion, institute a bill of interpleader as contemplated by Section 9 above for the purpose of having an appropriate court designate a substitute Escrow Agent. The Escrow Agent shall have no responsibility for the appointment of a successor Escrow Agent hereunder.
 
12.2.   Any company into which the Escrow Agent may be merged or converted or with which it may be consolidated, or any company resulting from any merger, conversion or consolidation to which it shall be a party, or any company to which the Escrow Agent may sell or transfer all or substantially all of its corporate trust business shall be the successor to the Escrow Agent without the execution or filing of any paper or the performance of any further act, notwithstanding anything herein to the contrary.
 
13.   Compensation . FAAC and Members agree that the fees and expenses of the Escrow Agent, including any investment fees and other investment-related charges, for services rendered, including the basic fees set forth in Exhibit 4 attached hereto, shall be paid out of the Earnings; provided, however , that if the Earnings are less than the fees then due, then the balance of the fees due to the Escrow Agent shall be paid equally by the Members and FAAC. Upon any withdrawal from the Escrow Property to pay such fees and expenses, the Escrow Agent shall provide written notification of such withdrawal to FAAC and the Members' Representative, detailing such fees and expenses. The Escrow Agent shall have, and is hereby granted, a prior lien upon any property, cash, or assets hereunder, with respect to its unpaid fees and nonreimbursed expenses, superior to the interests of any other person.
 
14.   Termination . Upon delivery of all amounts constituting the Escrow Property as provided in Sections 5 and 7 and the resolution of all disputes, if any, covered by Section 9, this Agreement shall terminate except for the provisions of Section 9 (with respect to payment of the Escrow Agent’s expenses), Section 10 and Section 13.
 
15.   Notices .
 
15.1.   All necessary notices, demands and requests required or permitted to be given hereunder shall be in writing and addressed as follows:
 

 
If to the Members:
c/o Thomas P. Rosato
   
Members’ Representative
   
11373 Liberty Street
   
Fulton, MD 20759
   
Fax: ________________
     

 
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With a copy to:
William M. Davidow, Esquire
   
Whiteford Taylor & Preston L.L.P.
   
7 St. Paul Street
   
Baltimore, Maryland 21202-1626
   
Fax: (410) 223-4367
     
 
If to FAAC:
Fortress America Acquisition Corporation
   
4100 North Fairfax Drive
   
Suite 1150
   
Arlington, Virginia 22203
   
Attn: Harvey L. Weiss, Chairman of the Board
     
   
and
     
   
James J. Maiwurm
   
Squire, Sanders & Dempsey L.L.P.
   
8000 Towers Crescent Drive, Suite 1400
   
Tysons Corner, VA 22182-2700
   
Fax: (703) 720-7801
     
 
If to the Escrow Agent:
SunTrust Bank
   
919 East Main Street, 10 th Floor
   
Richmond, Virginia 23219
   
Attn: E. Carl Thompson, Jr.
   
Fax: (804) 782-7855
 
15.2.   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 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.
 
15.3.   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 15.
 

 
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15.4.   Notwithstanding anything to the contrary herein provided, the Escrow Agent shall not be deemed to have received any notice prior to the Escrow Agent’s actual receipt thereof.
 
16.   Choice of Laws; Cumulative Rights . This Agreement shall be construed in accordance with and governed by the laws of the Commonwealth of Virginia without regard to the choice of law provisions thereof. The rights and remedies provided to each party hereunder are cumulative and will be in addition to the rights and remedies otherwise available to such party under this Agreement, any other agreement or applicable law.
 
17.   Counterparts . This Agreement may be executed in any number of counterparts, each of which when so executed and delivered will be deemed an original, and such counterparts together will constitute an original.
 
18.   Successors and Assigns . This Agreement will bind and inure to the benefit of the parties and their respective successors and permitted assigns. Except as provided in Section 12.2, this Agreement may not be assigned by operation of law or otherwise without the prior written consent of each of the parties hereto.
 
19.   Severability . The provisions of this Agreement will be deemed severable, and if any provision or part of this Agreement is held illegal, void or invalid under applicable law, such provision or part may be changed to the extent reasonably necessary to make the provision or part, as so changed, legal, valid and binding. If any provision of this Agreement is held illegal, void or invalid in its entirety, the remaining provisions of this Agreement will not in any way be affected or impaired but will remain binding in accordance with their terms.
 
20.   Headings . The Section headings in this Agreement are for convenience of reference only and will not be deemed to alter or affect the meaning or interpretation of any provisions hereof.
 
21.   Waiver . No failure on the part of any party to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of any party in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver of such power, right, privilege or remedy; and no single or partial exercise of any such power, right, privilege or remedy shall preclude any other or further exercise thereof or any other power, right, privilege or remedy. No party shall be deemed to have waived any claim arising out of this Agreement, or any power, right, privilege or remedy under this Agreement, unless the waiver of such claim, power, right, privilege or remedy is expressly set forth in a written instrument duly executed and delivered on behalf of such party; and any such waiver shall not be applicable or have any effect except in the specific instance in which it is given.
 
22.   Amendments . This Agreement may not be amended, modified, altered or supplemented other than by means of a written instrument duly executed and delivered on behalf of each of the parties hereto.
 
23.   Parties in Interest . None of the provisions of this Agreement is intended to provide any rights or remedies to any Person other than the parties hereto and their respective successors and permitted assigns, if any.
 

 
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24.   Entire Agreement . This Agreement sets forth the entire understanding of the parties hereto relating to the subject matter hereof and supersedes all prior agreements and understandings among or between any of the parties relating to the subject matter hereof.
 
25.   Escrow Agent Documentation . In order to maintain compliance with the Patriot Act, prior to the effective date of this Agreement, FAAC and the Members’ Representative shall provide to the Escrow Agent a completed Form W-9, Certificate of Incumbency, and a copy of the corporate document (i.e., Corporate Resolution, Articles of Incorporation, Bylaws, Partnership Agreement, etc.) that would show proper authorization for such parties to enter into this Agreement.
 
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first above written.
 
 
FAAC:
 
 
FORTRESS AMERICA ACQUISITION CORPORATION,
 
a Delaware corporation
   
   
   
 
By: /s/ Harvey L. Weiss
 
Name: Harvey L. Weiss
 
Title: Chairman
   
   
 
MEMBERS:
   
   
 
/s/ Thomas P. Rosato
 
Thomas P. Rosato
   
   
 
/s/ Gerard J. Gallagher
 
Gerard J. Gallagher
   
   
 
MEMBERS’ REPRESENTATIVE:
   
   
 
/s/ Thomas P. Rosato
 
Thomas P. Rosato as the representative for those
 
Members pursuant to Section 2.6 of the Membership
 
Interest Purchase Agreement.

 
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  ESCROW AGENT:
   
 
SUNTRUST BANK,
 
a Georgia banking corporation
   
   
   
 
By: /s/ E. Carl Thompson, Jr.
 
Name: E. Carl Thompson, Jr.
 
Title: Trust Officer

 
14

 

Exhibit 1 to Escrow Agreement
 
Membership Interest Purchase Agreement
 

 
15

 

Exhibit 2 to Escrow Agreement
 
Stock Acquisition Agreements
 

 
16

 


Exhibit 3 to Escrow Agreement
 
Payment Request Form
[Date]

SunTrust Bank
919 E. Main St.
Richmond, VA 23219
Attention: Carl Thompson

 
Re:
Escrow No. ____________ (“Escrow”)
 
Ladies and Gentlemen:

The undersigned hereby certify that:

(1)   Demand for payment as provided per the terms and conditions of that certain Escrow Agreement dated _________________, 200_ is hereby made in the amount of $____________ to _________ [and $_____________ to _______________]. [The demand is in respect of Section 5.1 of the Escrow Agreement.]

(2)   Please direct payment by wire transfer[s] as follows:

$_____________ to

[Depository Bank]
[Depository Bank Address]
ABA No. _________________
Acct. No. _________________
For Benefit of :_____________

[and, $_____________ to

[Depository Bank]
[Depository Bank Address]
ABA No. _________________
Acct. No. _________________
For Benefit of :_____________]
 
(3)   With respect to the drawing referred to in this Payment Request Form, the [aggregate] amount demanded hereby does not exceed one hundred percent (100%) of the Escrow valued as of the date hereof.

 
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FORTRESS INTERNATIONAL GROUP, INC.




By:
   
Date:_________________
Name:
     
Title:
     

MEMBERS, as represented by the
MEMBERS' REPRESENTATIVE:
 
 
 
 
Date:_________________
[______________________]
   


 

 

 
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Exhibit 4 to Escrow Agreement
 
Fee Schedule
 

 
Fees payable to SunTrust Bank for services rendered with respect to this Escrow Agreement shall be as follows:
 
Legal Fee
$
__________
 
       
Annual Administration Fee
$
__________
 
       
This fee is priced with the understanding that the funds will be deposited in the STI Classic US Treasury Money Market Fund.
 
The annual administration fee is payable in advance at the time of closing and will be charged to the Escrow Property at such time and on each anniversary date. The fees shall be deemed earned in full upon receipt by the Escrow Agent, and no portion shall be refundable for any reason, including without limitation, termination of this Agreement.

The parties agree that, in the event any controversy arises under or in connection with this Agreement or the Escrow Property or the Escrow Agent is made a party to or intervenes in any litigation pertaining to this Agreement or the Escrow Property, to pay to the Escrow Agent reasonable compensation for its extraordinary services and to reimburse the Escrow Agent for all costs and expenses directly or indirectly incurred by reason of such controversy or litigation.


 
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E SCROW AGREEMENT
(General Indemnity Escrow)

ESCROW AGREEMENT (“ Agreement ”), dated as of January 19, 2007, by and among (a) Fortress America Acquisition Corporation, a Delaware corporation ("FAAC"); (b) VTC, L.L.C., a Maryland limited liability company (“VTC”); (c) Vortech, LLC, a Maryland limited liability company (“Vortech”); (d) Thomas P. Rosato (“Rosato”) and Gerard J. Gallagher (“Gallagher” who together with Rosato own or control all of the outstanding membership interests of both VTC and Vortech (each a “Member” and jointly the “Members”); (e) Thomas P. Rosato in his capacity as the Members’ Representative; and (f) SunTrust Bank, a Georgia banking corporation (the “ Escrow Agent ”).
 
RECITALS:
 
WHEREAS, pursuant to that certain Second Amended and Restated Membership Interest Purchase Agreement dated as of July 31, 2006, as amended by by an Amendment To The Second Amended and Restated Membership Interest Purchase Agreement dated January 16, 2007 copies of which without schedules or exhibits are attached hereto as Exhibit 1 (“ Membership Interest Purchase Agreement ”), that are hereby incorporated by reference, FAAC will acquire all of the outstanding membership interests of each VTC and Vortech;
 
WHEREAS, pursuant to Section 2.6 of the Membership Interest Purchase Agreement, the Members designated Thomas P. Rosato as their representative, agent and attorney-in-fact for purposes of this Agreement and other various matters described therein (the “ Members’ Representative ”);

WHEREAS, as partial consideration for their respective membership interests in VTC and Vortech, each of the Members has received from FAAC pursuant to the terms of the Membership Interest Purchase Agreement and Stock Acquistion Agreements, copies of which (without schedules or exhibits) are attached as Exhibit 2 (jointly the “ Stock Purchase Agreements ”) in the aggregate 2,534,988 shares of FAAC common stock of which 2,461,728 shares are hereby delivered by FAAC and the Members to the Escrow Agent (the “ Escrow Deposit ”) to hold in escrow pursuant to ther terms of this Agreement;

WHEREAS, the parties desire to specify and clarify their rights and responsibilities with respect to the Escrow Deposit; and
 
WHEREAS, the Escrow Agent is willing to serve in such capacity, but only pursuant to the terms and conditions of this Agreement.
 
NOW, THEREFORE, in consideration of the mutual promises contained herein, the parties hereto agree as follows:
 
1.   Definitions .
 
1.1.   As used in this Agreement, the following terms shall have the meanings set forth below:
 

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Agreed Share Value ” has the meaning set forth in Section 5.3.

Agreement ” means this Escrow Agreement.

Business Day ” shall mean any day other than a Saturday, Sunday, or any Federal or Commonwealth of Virginia 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.
 
Escrow Account ” has the meaning set forth in Section 4.1.

Escrow Agent ” has the meaning set forth in the Preamble.

Escrow Property ” has the meaning set forth in Section 4.1.

Escrow Deposit ” has the meaning set forth in the Recitals.

" Final Determination " has the meaning set forth in Section 5.1(b).

FAAC ” has the meaning set forth in the Preamble.

" Indemnity Claim " has the meaning set forth in Section 5.2.

" Indemnity Claim Notice " has the meaning set forth in Section 5.2.

Members ” has the meaning set forth in the Preamble.

Members’ Representative ” has the meaning set forth in the Recitals.

Membership Interest Purchase Agreement ” has the meaning set forth in the Recitals.

1.2.   Capitalized terms used but not defined in this Agreement have the meanings ascribed to such terms in the Membership Interest Purchase Agreement.
 
2.   Appointment of Escrow Agent . FAAC, the Members, and the Members’ Representative hereby appoint the Escrow Agent to act as an escrow agent as provided herein, and the Escrow Agent hereby accepts such appointment.
 

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3.   Members’ Representative .
 
3.1.   The parties acknowledge that, pursuant to the Membership Interest Purchase Agreement, the Members’ Representative is authorized to act as the agent and attorney-in-fact on behalf of all of the Members in all matters necessary to carry out the terms and conditions of this Agreement.
 
3.2.   The Members’ Representative represents and warrants to the Escrow Agent that he has the irrevocable right, power and authority with respect to all of the Members (a) to give and receive directions and notices hereunder, (b) to make all determinations that may be required or that he deems appropriate under this Agreement, and (c) to execute and deliver all documents that may be required or that he deems appropriate under this Agreement. The Escrow Agent may act upon the directions, instructions and notices of the Members’ Representative named above and thereafter upon the directions and instructions of the successor Members’ Representative named in a writing executed by a majority-in-interest of the Members (pursuant to the provisions of Section 2.6 of the Membership Interest Purchase Agreement) filed with the Escrow Agent.
 
4.   Delivery of Escrow Deposit .
 
4.1.   FAAC acknowledges that it deposited the Escrow Deposit in an account (the “ Escrow Account ”) with the Escrow Agent. The FAAC common stock in the Escrow Account, together with any dividends (and any interest or other net income received from or earned thereon) is hereinafter collectively referred to as the “ Escrow Property .”
 
4.2.   If, during the term of this Agreement, there is Escrow Property other than the FAAC common shares, the Escrow Agent will invest the Escrow Property (other than the FAAC common stock) as provided in Section 11.
 
5.   Disbursement of the Escrow Property . The Escrow Agent will hold the Escrow Property and, subject to the Escrow Agent’s right in Section 9 to withhold disbursements when the Escrow Agent is uncertain as to what action to take, make disbursements therefrom as follows .
 
5.1.   Escrow Agent shall disburse all or a portion of the Escrow Property on deposit in the Escrow Account to FAAC, the Members or both, as the case may be, upon receipt of:
 
(a)   one or more fully executed Payment Request Forms in substantially the form attached hereto as Exhibit 3 , executed by FAAC and the Members' Representative on behalf of the Members, and otherwise pursuant to the terms hereof. Upon receipt of a Payment Request Form, the shares and amounts specified therein shall be promptly delivered or paid directly to the party or parties entitled to payment as specified in the Payment Request Form; or
 

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(b)   a copy of a Final Determination (as defined below) establishing a party's right to the Escrow Property. A " Final Determination " shall mean (i) with respect to an Indemnity Claim (or any other dispute between the Members’ Representative and FAAC with respect to whether either party is entitled to some portion, or all of the Escrow Property), a final determination stating that it is being provided under the procedures of Section 11.11 of the Membership Interest Purchase Agreement; or (ii) otherwise a final judgment of an arbitrator, arbitration panel or court of competent jurisdiction and shall in all cases be accompanied by a certificate of the presenting party to the effect that such judgment is a final judgment of an arbitrator, arbitration panel or court of competent jurisdiction, as applicable, and indicating the party, address, accounts or other information as necessary to process payments.
 
5.2.   If FAAC asserts in good faith a claim (an “ Indemnity Claim ”) against the Members pursuant to the Membership Interest Purchase Agreement, FAAC shall send written notice of such Indemnity Claim (an “ Indemnity Claim Notice ”) to the Escrow Agent and to the Members’ Representative. Such Indemnity Claim Notice shall set forth in reasonable detail the basis for such Indemnity Claim and a good faith, non-binding estimate of the amount of such Indemnity Claim. In submitting such Indemnity Claim to the Escrow Agent, FAAC shall account for any applicable threshold, exclusion or cap provided for in the Membership Interest Purchase Agreement. Whenever FAAC sends such an Indemnity Claim Notice, the parties shall comply with the procedures set forth herein.
 
(a)   If the Members’ Representative decides, in his sole and absolute discretion, to dispute the Indemnity Claim described in the Indemnity Claim Notice, the Members’ Representative shall, on or before the twentieth (20 th ) Business Day following the Escrow Agent’s receipt of such notice, send to the Escrow Agent and FAAC a written objection to such Indemnity Claim.
 
(b)   If the Escrow Agent receives from the Members’ Representative a written objection to such Indemnity Claim on or before the twentieth (20 th ) Business Day following the Escrow Agent’s receipt of the Indemnity Claim Notice describing such Indemnity Claim, and if that Indemnity Claim cannot be settled through negotiation within twenty (20) days of receipt of the written objection, then the dispute shall be resolved in accordance with Section 11.11 of the Membership Interest Purchase Agreement and Escrow Agent shall hold the funds subject to such dispute until a Final Determination is delivered with respect thereto.
 
(c)   If the Escrow Agent does not receive from the Members’ Representative a written objection to such Indemnity Claim Notice on or before the twentieth (20 th ) Business Day following the Escrow Agent’s receipt of the Indemnity Claim Notice describing such Indemnity Claim, then the Escrow Agent shall make a disbursement to FAAC from the Escrow Property in the amount of the Indemnity Claim described in such Indemnity Claim Notice.  
 
5.3.   To the extent that a Payment Request Form, Final Determination, or Indemnity Claim (made and not timely answered pursuant to Section 5.2(c) above) specifies a dollar amount (rather than a share amount) payable thereunder or in satisfaction thereof, the amount specified or claimed shall be satisfied by the delivery from the Escrow Property to FAAC or the Members’ Representative, as the case may be, of certificates for FAAC common stock equal in value to the amount specified or claimed (with the FAAC common stock valued at Five and 46/100 Dollars ($5.46) per share (the “ Agreed Share Value ”)
 

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6.   Payments from the Escrow Property .
 
6.1.   The Escrow Agent shall make no payments from the Escrow Property unless permitted pursuant to Sections 5, 7, 9, 10 and 13.
 
6.2.   Any cash amounts payable by the Escrow Agent under this Agreement shall be paid by bank check or by wire transfer, as specified in the Payment Request Form or Final Determination received by the Escrow Agent.
 
6.3.   Any amounts payable in FAAC common stock under this Agreement shall be payable by the delivery of stock certificates for FAAC common stock valued at the Agreed Share Value. To the extent that the number of shares deliverable by the Escrow Agent does not correspond with stock certificates then held by the Escrow Agent, the Escrow Agent shall deliver to FAAC one or more share certificates evidencing shares in excess of the number of FAAC common shares then deliverable with instructions to FAAC (i) to retain and cancel a specified number of shares (if shares are deliverable to FAAC hereunder) or issue to the Members’ Representative, or to whomever the Members’ Representative directs FAAC (if shares are deliverable to the Members’ Representative hereunder), a certificate or certificates for FAAC common shares in the amount deliverable by the Escrow Agent to FAAC or the Members’ Representative as applicable and (ii) to issue to the Escrow Agent a certificate for the residual balance, if any, of those FAAC common shares evidenced the share certificate(s) delivered by the Escrow Agent to FAAC.
 
6.4.   All interest and other income, if any, received from or earned on the Escrow Property net of distributions paid or to be paid pursuant to Section 7.3 (“Earnings”) shall be applied first to pay any Escrow Fees then due under Section 13, with any remaining Earnings to become a part of the Escrow Property and be paid in accordance with the other terms of this Agreement.
 
6.5.   The parties hereto (other than the Escrow Agent) each warrant to and agree with the Escrow Agent that, unless otherwise expressly set forth in this Agreement, there is no security interest in the Escrow Property or any part of the Escrow Property; no financing statement under the Uniform Commercial Code of any jurisdiction is on file in any jurisdiction claiming a security interest in or describing, whether specifically or generally, the Escrow Property or any part of the Escrow Property. Notwithstanding anything to the contrary herein provided, the Escrow Agent shall in no event be deemed to be a collateral agent or agent for any pledge or purported pledge of property held under this Agreement. The Escrow Agent makes no representation concerning whether or not any security interest exists with respect to any property held under the terms of this Agreement and the Escrow Agent shall have no duty or obligation with respect to the creation, perfection or continuation of any such security interest, it being understood that the duties of the Escrow Agent with respect to any property held pursuant to this Agreement are limited and confined exclusively to the duties and responsibilities expressly set forth herein. This Agreement shall not be deemed or construed to be a security agreement or to grant a security interest in any property held in escrow hereunder.
 

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7.   Tax Matters .
 
7.1.   The parties agree that the Escrow Property is intended to consist only of FAAC common shares and that no taxable income is anticipated. Notwithstanding the previous sentence, for tax reporting purposes in each calendar year (other than the calendar year in which this Agreement is terminated pursuant to Section 14 below), all interest or other income earned from the investment of the Escrow Property together with all fees and expenses pursuant to Section 13 below (or that may otherwise be taken into consideration for purposes of calculating and reporting taxes due on earnings with respect to the Escrow Account and Funds) shall be allocable to FAAC and so reported to the Internal Revenue Service and any other applicable taxing authority, except to the extent that any law or regulation should otherwise require, as provided in a written notice from FAAC to the Escrow Agent. Notwithstanding anything to the contrary contained herein, for the calendar year during which this Agreement is terminated pursuant to Section 14 below, all income, fees and expenses shall be allocated pro rata to the persons receiving payments of the Escrow Property during that year.
 
7.2.   Each of the parties agrees to provide the Escrow Agent with a certified tax identification number by signing and returning a Form W-9 (or Form W-8, in the case of non-U.S. persons) to the Escrow Agent within 30 days from the date hereof. The parties understand that, in the event their tax identification numbers are not certified to the Escrow Agent, the Internal Revenue Code may require withholding of a portion of any interest or other income earned on the investment of the Escrow Property, in accordance with the Internal Revenue Code, as amended from time to time.
 
7.3.   The Escrow Agent shall distribute quarterly to FAAC amounts when and in the amounts requested in writing in good faith by FAAC to cover the potential federal, state or local tax obligations of FAAC on account of the cumulative allocation to FAAC of taxable income attributable to the interest and other income earned on the Escrow Property. Such distributions shall be requested and made with respect to each quarter as early as fifteen (15) days prior to the date that United States taxpayers are required to make estimated federal tax payments with respect to such quarter. For purposes of the foregoing, such federal, state and local tax obligations of FAAC initially shall be assumed to equal an effective combined federal and state income tax rate equal to forty-two percent (42%) (but in no event lower than the highest Federal marginal income tax rate plus seven percent (7%)).
 
7.4.   The Escrow Agent shall report to the Internal Revenue Service, as of each calendar year-end, all income earned from the Escrow Property, whether or not such income has been distributed during such year, as and to the extent required by law; and, the Escrow Agent shall prepare and file any tax returns required to be filed with respect to the Escrow Account.
 
7.5.   The persons to whom income is allocable for each year shall pay all taxes payable on income earned from the investment of the Escrow Property, whether or not the Escrow Agent distributed the income during any particular year.
 

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8.   Escrow Agent’s Duties .
 
8.1.   The Escrow Agent’s duties are entirely ministerial and not discretionary, and the Escrow Agent will be under no duty or obligation to give any notice, or to do or to omit the doing of any action with respect to the Escrow Property, except to give notice, make disbursements and invest the Escrow Property in accordance with the terms of this Agreement.
 
8.2.   The Escrow Agent will neither be responsible for, nor chargeable with, knowledge of the terms and conditions of any other agreement, instrument or document among the other parties hereto, in connection herewith, including the Membership Interest Purchase Agreement, and will be required to act only pursuant to the terms and provisions of this Agreement. This Agreement sets forth all matters pertinent to the escrow contemplated hereunder, and no additional obligations of the Escrow Agent will be inferred from the terms of this Agreement, the Membership Interest Purchase Agreement or any other agreement.
 
8.3.   The Escrow Agent will not be liable for any error in judgment or any act or steps taken or permitted to be taken in good faith, or for any mistake of law or fact, or for anything it may do or refrain from doing in connection with this Agreement, except for its own willful misconduct or gross negligence. As to any legal questions arising in connection with the administration of this Agreement, the Escrow Agent may consult with and rely absolutely upon the opinions given to it by counsel (including internal counsel) and shall be free of liability for acting in reliance on such opinions. In no event shall the Escrow Agent be liable for incidental, indirect, special, consequential or punitive damages.
 
8.4.   The Escrow Agent will not be required in any way to determine the validity, genuineness, authenticity or sufficiency, whether in form or substance, of any instrument, document, certificate, statement or notice referred to in this Agreement or contemplated by this Agreement, or the identity or authority of the persons executing it, and it will be sufficient if any writing purporting to be such instrument, document, certificate, statement or notice is delivered to the Escrow Agent and purports to be correct in form and signed or otherwise executed by the party or parties required to sign or execute it under this Agreement. The Escrow Agent reserves the right, but shall in no way be obligated, to call upon the parties, or any of them, for written instructions before taking any actions hereunder.
 
8.5.   During the term of this Agreement, the Escrow Agent shall not exercise on its own behalf any right of set-off against, or enforce any lien on, the Escrow Property, except such right or lien as may arise in connection with this Agreement.
 
8.6.   The parties to this Agreement agree to make modifications to this Section upon the reasonable request of the Escrow Agent.
 
8.7.   In the event of a shareholder vote, the Escrow Agent shall have the right to exercise all voting rights with respect to the FAAC common stock held by the Escrow Agent as part of the Escrow Property; provided, however, that the Escrow Agent shall have no discretion as to voting the shares of FAAC common stock except in a fashion that is in all respects proportional to the manner in which the FAAC common stock not held as part of the Escrowed Property is voted (as certified by FAAC’s Secretary). FAAC, Rosato, Gallagher and the Members’ Representative each hereby (i) instruct the Escrow Agent to vote all of the FAAC common shares held as Escrow Property in the manner described in this Section 8.7 and (ii) agree that the Escrow Agent shall have no liability with respect to voting the FAAC common stock held as Escrow Property in the manner described in this Section 8.7. This Section 8.7 shall constitute an irrevocable proxy, coupled with an interest, with respect to any shares of FAAC common stock (or other FAAC securities) that Escrow Agent holds pursuant to this Agreement.
 

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9.   Disputes .
 
9.1.   It is understood and agreed that should any dispute arise with respect to the payment and/or ownership or right of possession of the Escrow Property, or should the Escrow Agent be uncertain as to what action to take with respect to the Escrow Property, the Escrow Agent is authorized and directed to retain in its possession, without liability to anyone, all or any part of the Escrow Property until such dispute or uncertainty shall have been settled either by mutual agreement by the parties concerned (as evidenced by a written agreement among them) or by a Final Determination.
 
9.2.   If the Escrow Agent becomes involved in litigation by reason of this Agreement, or if the Escrow Agent reasonably believes, in its sole discretion, that it may become involved in litigation, the Escrow Agent is authorized to institute a bill of interpleader in a court in the Commonwealth of Virginia to determine the rights of the parties and to deposit the Escrow Property with the court in accordance with the Commonwealth of Virginia law. Upon deposit of the Escrow Property with the court, the Escrow Agent shall stand fully relieved and discharged of any further duties as Escrow Agent. The filing of any such legal proceedings shall not deprive the Escrow Agent of its compensation hereunder earned prior to such filing and discharge of the Escrow Agent of its duties hereunder.
 
9.3.   If a bill of interpleader is instituted, or if the Escrow Agent is threatened with litigation or becomes involved in litigation in any manner whichever on account of this Agreement or the Escrow Property, FAAC and the Members, jointly and severally, shall pay the Escrow Agent its reasonable attorneys’ fees and any other disbursements, expenses, losses, costs and damages incurred by the Escrow Agent in connection with or resulting from such threatened or actual litigation. All costs and expenses of such dispute will be charged to the non-prevailing party in such dispute, unless such non-prevailing party is a third party, in which case the Escrow Agent’s costs and expenses will be charged to and paid out of the Escrow Property, and to the extent the Escrow Property are insufficient, will be charged equally to FAAC and the Members.
 
9.4.   In the event that the Escrow Agent proposes to disburse to the Members any portion of the Escrow Property, the disbursement of which the Escrow Agent had previously withheld pursuant to this Section, the Escrow Agent shall disburse such amount to the Member’s Representative.
 

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10.   Indemnity . FAAC and the Members jointly and severally agree to hold the Escrow Agent harmless and to indemnify the Escrow Agent against any loss, liability, expenses (including reasonable attorney’s fees and expenses), claim, or demand arising out of or in connection with the performance of its obligations in accordance with the provisions of this Agreement, except for willful misconduct or gross negligence of the Escrow Agent. Notwithstanding anything in this Agreement to the contrary, the Escrow Agent shall be entitled to set-off against the Escrow Property and apply such set-off to payment of such fees and disbursements and other liabilities and obligations hereunder. Upon the written request of the Escrow Agent, FAAC and the Members jointly and severally agree to assume the investigation and defense of any such claim, including the employment of counsel acceptable to the Escrow Agent and the payment of all expenses related thereto and, notwithstanding any such assumption, the Escrow Agent shall have the right, and FAAC and the Members jointly and severally agree to pay the cost and expense thereof, to employ separate counsel with respect to any such claim and participate in the investigation and defense thereof in the event that the Escrow Agent shall have been advised by counsel that there may be one or more legal defenses available to the Escrow Agent which are different from or in addition to those available to FAAC or the Members. FAAC and the Members agree that all references in this Section to the Escrow Agent shall be deemed to include references to its directors, officers, employees and agents. The foregoing indemnities in this paragraph shall survive the resignation or removal of the Escrow Agent or the termination of this Agreement.
 
11.   Investment .
 
11.1.   As used in this Section, “ Eligible Investments ” include one or more of the following obligations or securities, but only to the extent that such obligations or securities mature within thirty (30) calendar days or such longer time as the Members’ Representative and FAAC shall determine, such longer maturities not to exceed eighteen (18) months from the Closing Date: (a) direct obligations of, or obligations fully guaranteed by, the United States of America or any agency thereof, and (b) money market funds investing primarily in the obligations or securities listed in clause (a) above or repurchase agreements fully collateralized by direct obligations of the United States of America.
 
11.2.   The Escrow Agent will invest the Escrow Property in such Eligible Investments as the Members’ Representative and FAAC, from time to time, shall jointly instruct the Escrow Agent in writing. Notwithstanding the foregoing, in no event shall the FAAC common stock held as part of the Escrow Property be invested. Earnings upon Eligible Investments shall be deemed part of the Escrow Property, shall be deposited in the Escrow Account and shall be disbursed in accordance with the terms of this Agreement. Any loss or expense incurred from an Eligible Investment shall be borne by the Escrow Property. The Escrow Agent shall have no responsibility or liability for any diminution which may result from any investments or reinvestments made in accordance with this Agreement.
 
11.3.   The parties acknowledge and agree that the Escrow Agent will not provide supervision, recommendations or advice relative to either the investment of the Escrow Property or the purchase, sale, retention or other disposition of any Eligible Investment.
 
11.4.   The Escrow Agent is hereby authorized to execute purchases and sales of Eligible Investments through its own trading or capital markets operations. The Escrow Agent shall send statements to FAAC and the Members’ Representative reflecting activity for the Escrow Account for the preceding quarter within fifteen (15) days after the last day of each calendar quarter. Although the parties acknowledge that they may obtain a broker confirmation or written statement containing comparable information at no additional cost, each party hereby agrees that confirmations of Eligible Investments are not required to be issued by the Escrow Agent for each period in which a statement is provided.
 

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12.   Resignation .
 
12.1.   The Escrow Agent may resign upon thirty (30) calendar days’ prior written notice to the Members’ Representative and FAAC, and, upon joint instructions from the Members’ Representative and FAAC, will deliver the Escrow Property to any designated substitute Escrow Agent selected by the Members’ Representative and FAAC. If the Members’ Representative and FAAC fail to designate a substitute Escrow Agent within 15 calendar days after receipt of such notice, the Escrow Agent may, at its sole discretion, institute a bill of interpleader as contemplated by Section 9 above for the purpose of having an appropriate court designate a substitute Escrow Agent. The Escrow Agent shall have no responsibility for the appointment of a successor Escrow Agent hereunder.
 
12.2.   Any company into which the Escrow Agent may be merged or converted or with which it may be consolidated, or any company resulting from any merger, conversion or consolidation to which it shall be a party, or any company to which the Escrow Agent may sell or transfer all or substantially all of its corporate trust business shall be the successor to the Escrow Agent without the execution or filing of any paper or the performance of any further act, notwithstanding anything herein to the contrary.
 
13.   Compensation . FAAC and Members agree that the fees and expenses of the Escrow Agent, including any investment fees and other investment-related charges, for services rendered, including the basic fees set forth in Exhibit 4 attached hereto, shall be paid out of the Earnings; provided, however , that if the Earnings are less than the fees then due, then the balance of the fees due to the Escrow Agent shall be paid equally by the Members and FAAC. Upon any withdrawal from the Escrow Property to pay such fees and expenses, the Escrow Agent shall provide written notification of such withdrawal to FAAC and the Members' Representative, detailing such fees and expenses. The Escrow Agent shall have, and is hereby granted, a prior lien upon any property, cash, or assets hereunder, with respect to its unpaid fees and nonreimbursed expenses, superior to the interests of any other person.
 
14.   Termination . Upon delivery of all amounts constituting the Escrow Property as provided in Sections 5 and 7 and the resolution of all disputes, if any, covered by Section 9, this Agreement shall terminate except for the provisions of Section 9 (with respect to payment of the Escrow Agent’s expenses), Section 10 and Section 13.
 
15.   Notices .
 
15.1.   All necessary notices, demands and requests required or permitted to be given hereunder shall be in writing and addressed as follows:
 
 
If to the Members:
c/o Thomas P. Rosato
   
Members’ Representative
   
11373 Liberty Street
   
Fulton, Maryland 20759
   
Fax: ________________

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With a copy to:
William M. Davidow, Esquire
   
Whiteford Taylor & Preston L.L.P.
   
7 St. Paul Street
   
Baltimore, Maryland 21202-1626
   
Fax: (410) 223-4367
     
 
If to FAAC:
Fortress America Acquisition Corporation
   
4100 North Fairfax Drive
   
Suite 1150
   
Arlington, Virginia 22203
   
Attn: Harvey L. Weiss, Chairman of the Board
     
   
and
     
   
James J. Maiwurm
   
Squire, Sanders & Dempsey L.L.P.
   
8000 Towers Crescent Drive, Suite 1400
   
Tysons Corner, VA 22182-2700
   
Fax: (703) 720-7801
     
 
If to the Escrow Agent:
SunTrust Bank
   
919 East Main Street, 10 th Floor
   
Richmond, Virginia 23219
   
Attn: E. Carl Thompson, Jr.
   
Fax: (804) 782-7855
 
 
15.2.   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 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.
 
15.3.   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 15.
 

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15.4.   Notwithstanding anything to the contrary herein provided, the Escrow Agent shall not be deemed to have received any notice prior to the Escrow Agent’s actual receipt thereof.
 
16.   Choice of Laws; Cumulative Rights . This Agreement shall be construed in accordance with and governed by the laws of the Commonwealth of Virginia without regard to the choice of law provisions thereof. The rights and remedies provided to each party hereunder are cumulative and will be in addition to the rights and remedies otherwise available to such party under this Agreement, any other agreement or applicable law.
 
17.   Counterparts . This Agreement may be executed in any number of counterparts, each of which when so executed and delivered will be deemed an original, and such counterparts together will constitute an original.
 
18.   Successors and Assigns . This Agreement will bind and inure to the benefit of the parties and their respective successors and permitted assigns. Except as provided in Section 12.2, this Agreement may not be assigned by operation of law or otherwise without the prior written consent of each of the parties hereto.
 
19.   Severability . The provisions of this Agreement will be deemed severable, and if any provision or part of this Agreement is held illegal, void or invalid under applicable law, such provision or part may be changed to the extent reasonably necessary to make the provision or part, as so changed, legal, valid and binding. If any provision of this Agreement is held illegal, void or invalid in its entirety, the remaining provisions of this Agreement will not in any way be affected or impaired but will remain binding in accordance with their terms.
 
20.   Headings . The Section headings in this Agreement are for convenience of reference only and will not be deemed to alter or affect the meaning or interpretation of any provisions hereof.
 
21.   Waiver . No failure on the part of any party to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of any party in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver of such power, right, privilege or remedy; and no single or partial exercise of any such power, right, privilege or remedy shall preclude any other or further exercise thereof or any other power, right, privilege or remedy. No party shall be deemed to have waived any claim arising out of this Agreement, or any power, right, privilege or remedy under this Agreement, unless the waiver of such claim, power, right, privilege or remedy is expressly set forth in a written instrument duly executed and delivered on behalf of such party; and any such waiver shall not be applicable or have any effect except in the specific instance in which it is given.
 
22.   Amendments . This Agreement may not be amended, modified, altered or supplemented other than by means of a written instrument duly executed and delivered on behalf of each of the parties hereto.
 
23.   Parties in Interest . None of the provisions of this Agreement is intended to provide any rights or remedies to any Person other than the parties hereto and their respective successors and permitted assigns, if any.
 

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24.   Entire Agreement . This Agreement sets forth the entire understanding of the parties hereto relating to the subject matter hereof and supersedes all prior agreements and understandings among or between any of the parties relating to the subject matter hereof.
 
25.   Escrow Agent Documentation . In order to maintain compliance with the Patriot Act, prior to the effective date of this Agreement, FAAC and the Members’ Representative shall provide to the Escrow Agent a completed Form W-9, Certificate of Incumbency, and a copy of the corporate document (i.e., Corporate Resolution, Articles of Incorporation, Bylaws, Partnership Agreement, etc.) that would show proper authorization for such parties to enter into this Agreement.
 
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first above written.
 
 
FORTRESS AMERICA ACQUISITION CORPORATION,
 
a Delaware corporation
   
   
   
 
By: /s/ Harvey L. Weiss
 
Name: Harvey L. Weiss
 
Title: Chairman
   
   
 
MEMBERS:
   
   
 
/s/ Thomas P. Rosato
 
Thomas P. Rosato
   
   
 
/s/ Gerard J. Gallagher
 
Gerard J. Gallagher
   
   
 
MEMBERS’ REPRESENTATIVE:
   
   
 
/s/ Thomas P. Rosato
 
Thomas P. Rosato as the representative for those
 
Members pursuant to Section 2.6 of the Membership
 
Interest Purchase Agreement.


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ESCROW AGENT:
   
 
SUNTRUST BANK,
 
a Georgia banking corporation
   
   
   
 
By: /s/ E. Carl Thompson, Jr.
 
Name: E. Carl Thompson, Jr.
 
Title: Trust Officer

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Exhibit 1 to Escrow Agreement
 
Membership Interest Purchase Agreement
 

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Exhibit 2 to Escrow Agreement
 
Stock Acquisition Agreements
 

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Exhibit 3 to Escrow Agreement
 
Payment Request Form
[Date]

SunTrust Bank
919 E. Main St.
Richmond, VA 23219
Attention: Carl Thompson

 
Re:
Escrow No. ____________ (“Escrow”)
 
Ladies and Gentlemen:

The undersigned hereby certify that:

(1)   Demand for payment as provided per the terms and conditions of that certain Escrow Agreement dated _________________, 200_ is hereby made in the amount of $____________ to _________ [and $_____________ to _______________]. [The demand is in respect of Section 5.1 of the Escrow Agreement.]

(2)   Please direct payment by wire transfer[s] as follows:

$_____________ to

[Depository Bank]
[Depository Bank Address]
ABA No. _________________
Acct. No. _________________
For Benefit of :_____________

[and, $_____________ to

[Depository Bank]
[Depository Bank Address]
ABA No. _________________
Acct. No. _________________
For Benefit of :_____________]
 
(3)   With respect to the drawing referred to in this Payment Request Form, the [aggregate] amount demanded hereby does not exceed one hundred percent (100%) of the Escrow valued as of the date hereof.

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FORTRESS INTERNATIONAL GROUP, INC.



By:_________________________________             Date:_________________
Name:
Title:

MEMBERS, as represented by the
MEMBERS' REPRESENTATIVE:
 

____________________________________            Date:_________________
[______________________]


 

 

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Exhibit 4 to Escrow Agreement
 
Fee Schedule
 

 
Fees payable to SunTrust Bank for services rendered with respect to this Escrow Agreement shall be as follows:
 
Legal Fee
$
__________
Annual Administration Fee
$
__________
 
This fee is priced with the understanding that the funds will be deposited in the STI Classic US Treasury Money Market Fund.
 
The annual administration fee is payable in advance at the time of closing and will be charged to the Escrow Property at such time and on each anniversary date. The fees shall be deemed earned in full upon receipt by the Escrow Agent, and no portion shall be refundable for any reason, including without limitation, termination of this Agreement.

The parties agree that, in the event any controversy arises under or in connection with this Agreement or the Escrow Property or the Escrow Agent is made a party to or intervenes in any litigation pertaining to this Agreement or the Escrow Property, to pay to the Escrow Agent reasonable compensation for its extraordinary services and to reimburse the Escrow Agent for all costs and expenses directly or indirectly incurred by reason of such controversy or litigation.


 
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REGISTRATION RIGHTS AGREEMENT


THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as of the 19 day of January, 2007, by and among Fortress America Acquisition Corporation, a Delaware corporation (the “Company”) and the undersigned parties listed under Stockholders on the signature page hereto (each, a “Stockholder” and collectively, the “Stockholders”).
 
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
 
1.   DEFINITIONS.  The following capitalized terms used herein have the following meanings:

Agreement ” means this Agreement, as amended, restated, supplemented, or otherwise modified from time to time.
 
Commission ” means the Securities and Exchange Commission, or any other federal agency then administering the Securities Act or the Exchange Act.
 
Common Stock ” means the common stock, par value $0.0001 per share, of the Company.
 
Company ” is defined in the preamble to this Agreement.
 
Demand Registration ” is defined in Section 2.1.1.
 
Demanding Holder ” is defined in Section 2.1.1.
 
Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, all as the same shall be in effect at the time.
 
Form S-3 ” is defined in Section 2.3.
 
Founding Investor Registration Rights Agreement ” means that certain Registration Rights Agreement dated as of July 13, 2005 by and among the Company and the investors listed on the signature page thereto.

Indemnified Party ” is defined in Section 4.3.
 
Indemnifying Party ” is defined in Section 4.3.
 
Maximum Number of Shares ” is defined in Section 2.1.4.

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Notices ” is defined in Section 6.3.
 
Piggy-Back Registration ” is defined in Section 2.2.1.
 
Register ,” “ registered ” and “ registration ” each means a registration effected by preparing and filing a registration statement or similar document in compliance with the requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder, and such registration statement becoming effective.
 
Registrable Securities ” mean all of the shares of Common Stock owned or held by Stockholders.  Registrable Securities include any warrants, shares of capital stock or other securities of the Company issued as a dividend or other distribution with respect to or in exchange for or in replacement of such shares of Common Stock.  As to any particular Registrable Securities, such securities shall cease to be Registrable Securities when:  (a) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been sold, transferred, disposed of or exchanged in accordance with such Registration Statement; (b) such securities shall have been otherwise transferred, new certificates for them not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent public distribution of them shall not require registration under the Securities Act; (c) such securities shall have ceased to be outstanding, or (d) the Securities and Exchange Commission makes a definitive determination to the Company that the Registrable Securities are salable under Rule 144(k).
 
Registration Statement ” means a registration statement filed by the Company with the Commission in compliance with the Securities Act and the rules and regulations promulgated thereunder for a public offering and sale of Common Stock (other than a registration statement on Form S-4 or Form S-8, or their successors, or any registration statement covering only securities proposed to be issued in exchange for securities or assets of another entity).
 
Release Date ” means July 13, 2008.
 
Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder, all as the same shall be in effect at the time.
 

Stockholder ” is defined in the preamble to this Agreement.

Stockholder Indemnified Party ” is defined in Section 4.1.

Underwriter ” means a securities dealer who purchases any Registrable Securities as principal in an underwritten offering and not as part of such dealer’s market-making activities.
 

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2.   REGISTRATION RIGHTS.

2.1   Demand Registration .

  2.1.1.   Request for Registration .  At any time and from time to time on or after the Release Date, the holders of a majority-in-interest of the Registrable Securities held by the Stockholders or the transferees of the Stockholders, may make a written demand for registration under the Securities Act of all or part of their Registrable Securities (a “ Demand Registration ”).  Any demand for a Demand Registration shall specify the number of shares of Registrable Securities proposed to be sold and the intended method(s) of distribution thereof.  The Company will notify all holders of Registrable Securities of the demand, and each holder of Registrable Securities who wishes to include all or a portion of such holder’s Registrable Securities in the Demand Registration (each such holder including shares of Registrable Securities in such registration, a “ Demanding Holder ”) shall so notify the Company within fifteen (15) days after the receipt by the holder of the notice from the Company.  Upon any such request, the Demanding Holders shall be entitled to have their Registrable Securities included in the Demand Registration, subject to Section 2.1.4 and the provisos set forth in Section 3.1.1.  The Company shall not be obligated to effect more than an aggregate of two (2) Demand Registrations under this Section 2.1.1 in respect of Registrable Securities.

2.1.2.   Effective Registration .  A registration will not count as a Demand Registration until the Registration Statement filed with the Commission with respect to such Demand Registration has been declared effective and the Company has complied with all of its obligations under this Agreement with respect thereto; provided, however , that if, after such Registration Statement has been declared effective, the offering of Registrable Securities pursuant to a Demand Registration is interfered with by any stop order or injunction of the Commission or any other governmental agency or court, the Registration Statement with respect to such Demand Registration will be deemed not to have been declared effective, unless and until, (i) such stop order or injunction is removed, rescinded or otherwise terminated, and (ii) a majority-in-interest of the Demanding Holders thereafter elect to continue the offering; provided, further , that the Company shall not be obligated to file a second Registration Statement until a Registration Statement that has been filed is counted as a Demand Registration or is terminated.

2.1.3.   Underwritten Offering .  If a majority-in-interest of the Demanding Holders so elect and such holders so advise the Company as part of their written demand for a Demand Registration, the offering of such Registrable Securities pursuant to such Demand Registration shall be in the form of an underwritten offering. 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 to the extent provided herein.  All Demanding 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 holders initiating the Demand Registration.

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2.1.4.   Reduction of Offering .  If the managing Underwriter or Underwriters for a Demand Registration that is to be an underwritten offering advises the Company and the Demanding Holders in writing that the dollar amount or number of shares of Registrable Securities which the Demanding Holders desire to sell, taken together with all other shares of Common Stock or other securities which the Company desires to sell and the shares of Common Stock, if any, as to which registration has been requested pursuant to written contractual piggy-back registration rights held by other shareholders of the Company who desire to sell, exceeds the maximum dollar amount or maximum number of shares that can be sold in such offering without adversely affecting the proposed offering price, the timing, the distribution method, or the probability of success of such offering (such maximum dollar amount or maximum number of shares, as applicable, the “ Maximum Number of Shares ”), then the Company shall include in such registration:  (i) first, the Registrable Securities as to which Demand Registration has been requested by the Demanding Holders ( pro rata in accordance with the number of shares of Registrable Securities which such Demanding Holder has requested be included in such registration, regardless of the number of shares of Registrable Securities held by each Demanding Holder) that can be sold without exceeding the Maximum Number of Shares; (ii) second, to the extent that the Maximum Number of Shares has not been reached under the foregoing clause (i), the shares of Common Stock or other securities that the Company desires to sell that can be sold without exceeding the Maximum Number of Shares; (iii) third, to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (i) and (ii), the shares of Common Stock for the account of other persons that the Company is obligated to register pursuant to written contractual arrangements with such persons and that can be sold without exceeding the Maximum Number of Shares; and (iv) fourth, to the extent that the Maximum Number of Shares have not been reached under the foregoing clauses (i), (ii), and (iii), the shares of Common Stock that other shareholders desire to sell that can be sold without exceeding the Maximum Number of Shares.

2.1.5.   Withdrawal . If a majority-in-interest of the Demanding Holders disapprove of the terms of any underwriting or are not entitled to include all of their Registrable Securities in any offering, such majority-in-interest of the Demanding Holders may elect to withdraw from such offering by giving written notice to the Company and the Underwriter or Underwriters of their request to withdraw prior to the effectiveness of the Registration Statement filed with the Commission with respect to such Demand Registration.  If the majority-in-interest of the Demanding Holders withdraws from a proposed offering relating to a Demand Registration, then such registration shall not count as a Demand Registration provided for in Section 2.1.1.

2.2   Piggy-Back Registration .

2.2.1.   Piggy-Back Rights .  If at any time on or after the Release Date the Company proposes to file a Registration Statement under the Securities Act with respect to an offering of equity securities, or securities or other obligations exercisable or exchangeable for, or convertible into, equity securities, by the Company for its own account or for shareholders of the Company for their account (or by the Company and by shareholders of the Company including, without limitation, pursuant to Section 2.1), other than a Registration Statement (i) filed in connection with any employee stock option or other benefit plan, (ii) for an exchange offer or offering of securities solely to the Company’s existing shareholders, (iii) for an offering of debt that is convertible into equity securities of the Company or (iv) for a dividend reinvestment plan, then the Company shall (x) give written notice of such proposed filing to the holders of Registrable Securities as soon as practicable but in no event less than ten (10) days before the anticipated filing date, which notice shall describe the amount and type of securities to be included in such offering, the intended method(s) of distribution, and the name of the proposed managing Underwriter or Underwriters, if any, of the offering, and (y) offer to the holders of Registrable Securities in such notice the opportunity to register the sale of such number of shares of Registrable Securities as such holders may request in writing within fifteen (15) days following receipt of such notice (a “ Piggy-Back Registration ”).  The Company shall cause such Registrable Securities to be included in such registration and shall use its best efforts to cause the managing Underwriter or Underwriters of a proposed underwritten offering to permit the Registrable Securities requested to be included in a Piggy-Back Registration to be included on the same terms and conditions as any similar securities of the Company and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof.  All holders of Registrable Securities proposing to distribute their securities through a Piggy-Back Registration that involves an Underwriter or Underwriters shall enter into an underwriting agreement in customary form with the Underwriter or Underwriters selected for such Piggy-Back Registration.

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2.2.2.   Reduction of Offering .  If the managing Underwriter or Underwriters for a Piggy-Back Registration that is to be an underwritten offering advises the Company and the holders of Registrable Securities in writing that the dollar amount or number of shares of Common Stock which the Company desires to sell, taken together with shares of Common Stock, if any, as to which registration has been demanded pursuant to written contractual arrangements with persons other than the holders of Registrable Securities hereunder, the Registrable Securities as to which registration has been requested under this Section 2.2, and the shares of Common Stock, if any, as to which registration has been requested pursuant to the written contractual piggy-back registration rights of other shareholders of the Company, exceeds the Maximum Number of Shares, then the Company shall include in any such registration:

        (i)   If the registration is undertaken for the Company’s account: (A) first, the shares of Common Stock or other securities that the Company desires to sell that can be sold without exceeding the Maximum Number of Shares; (B) second, to the extent that the Maximum Number of Shares has not been reached under the foregoing clause (A), the shares of Common Stock, if any, including the Registrable Securities, as to which registration has been requested pursuant to written contractual piggy-back registration rights of security holders (pro rata in accordance with the number of shares of Common Stock which each such person has actually requested to be included in such registration, regardless of the number of shares of Common Stock with respect to which such persons have the right to request such inclusion) that can be sold without exceeding the Maximum Number of Shares; and

(ii)   If the registration is a “demand” registration undertaken at the demand of persons other than the holders of Registrable Securities pursuant to written contractual arrangements with such persons, (A) first, the shares of Common Stock for the account of the demanding persons that can be sold without exceeding the Maximum Number of Shares; (B) second, to the extent that the Maximum Number of Shares has not been reached under the foregoing clause (A), the shares of Common Stock or other securities that the Company desires to sell that can be sold without exceeding the Maximum Number of Shares; (C) third, to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (A) and (B), the shares of Common Stock as to which registration has been requested pursuant to written contractual piggy-back registration rights under the Founding Investor Registration Rights Agreement that can be sold without exceeding the Maximum Number of Shares; (D) fourth, to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (A), (B) and (C), the Registrable Securities as to which registration has been requested under this Section 2.2 (pro rata in accordance with the number of shares of Registrable Securities held by each such holder) that can be sold without exceeding the Maximum Number of Shares; and (E) fifth, to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (A), (B), (C) and (D), the shares of Common Stock, if any, as to which registration has been requested pursuant to written contractual piggy- back registration rights which other shareholders desire to sell that can be sold without exceeding the Maximum Number of Shares.

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2.2.3.   Withdrawal .  Any holder of Registrable Securities may elect to withdraw such holder’s request for inclusion of Registrable Securities in any Piggy-Back Registration by giving written notice to the Company of such request to withdraw prior to the effectiveness of the Registration Statement.  The Company may also elect to withdraw a registration statement at any time prior to the effectiveness of the Registration Statement.  Notwithstanding any such withdrawal, the Company shall pay all expenses incurred by the holders of Registrable Securities in connection with such Piggy-Back Registration as provided in Section 3.3.

2.3   Registrations on Form S-3 .  The holders of Registrable Securities may at any time and from time to time, request in writing that the Company register the resale of any or all of such Registrable Securities on Form S-3 or any similar short-form registration which may be available at such time (“ Form S-3 ”); provided, however , that the Company shall not be obligated to effect such request through an underwritten offering.  Upon receipt of such written request, the Company will promptly give written notice of the proposed registration to all other holders of Registrable Securities, and, as soon as practicable thereafter, effect the registration of all or such portion of such holder’s or holders’ Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any other holder or 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 pursuant to this Section 2.3: (i) if Form S-3 is not available for such offering; or (ii) if the holders of the Registrable Securities, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at any aggregate price to the public of less than $500,000. Registrations effected pursuant to this Section 2.3 shall not be counted as Demand Registrations effected pursuant to Section 2.1.

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3.   REGISTRATION PROCEDURES.

3.1   Filings; Information .  Whenever the Company is required to effect the registration of any Registrable Securities pursuant to Section 2, the Company shall use its best efforts to effect the registration and sale of such Registrable Securities in accordance with the intended method(s) of distribution thereof as expeditiously as practicable, and in connection with any such request:

      3.1.1.   Filing Registration Statement .  The Company shall, as expeditiously as possible and in any event within sixty (60) days after receipt of a request for a Demand Registration pursuant to Section 2.1, prepare and file with the Commission a Registration Statement on any form for which the Company then qualifies or which counsel for the Company shall deem appropriate and which form shall be available for the sale of all Registrable Securities to be registered thereunder in accordance with the intended method(s) of distribution thereof, and shall use its best efforts to cause such Registration Statement to become and remain effective for the period required by Section 3.1.3; provided, however , that the Company shall have the right to defer any Demand Registration for up to thirty (30) days, and any Piggy-Back Registration for such period as may be applicable to deferment of any demand registration to which such Piggy-Back Registration relates, in each case if the Company shall furnish to the holders a certificate signed by the Chief Executive Officer of the Company stating that, in the good faith judgment of the Board of Directors of the Company, it would be materially detrimental to the Company and its shareholders for such Registration Statement to be effected at such time; provided further, however , that the Company shall not have the right to exercise the right set forth in the immediately preceding proviso more than once in any 365-day period in respect of a Demand Registration hereunder.

3.1.2.   Copies .  The Company shall, prior to filing a Registration Statement or prospectus, or any amendment or supplement thereto, furnish without charge to the holders of Registrable Securities included in such registration, and such holders’ legal counsel, copies of such Registration Statement as proposed to be filed, each amendment and supplement to such Registration Statement (in each case including all exhibits thereto and documents incorporated by reference therein), the prospectus included in such Registration Statement (including each preliminary prospectus), and such other documents as the holders of Registrable Securities included in such registration or legal counsel for any such holders may request in order to facilitate the disposition of the Registrable Securities owned by such holders.

      3.1.3.   Amendments and Supplements .  The Company shall prepare and file with the Commission such amendments, including post-effective amendments, and supplements to such Registration Statement and the prospectus used in connection therewith as may be necessary to keep such Registration Statement effective and in compliance with the provisions of the Securities Act until all Registrable Securities and other securities covered by such Registration Statement have been disposed of in accordance with the intended method(s) of distribution set forth in such Registration Statement (which period shall not exceed the sum of one hundred eighty (180) days plus any period during which any such disposition is interfered with by any stop order or injunction of the Commission or any governmental agency or court) or such securities have been withdrawn.

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3.1.4.   Notification .  After the filing of a Registration Statement, the Company shall promptly, and in no event more than two (2) business days after such filing, notify the holders of Registrable Securities included in such Registration Statement of such filing, and shall further notify such holders promptly and confirm such advice in writing in all events within two (2) business days of the occurrence of any of the following:  (i) when such Registration Statement becomes effective; (ii) when any post-effective amendment to such Registration Statement becomes effective; (iii) the issuance or threatened issuance by the Commission of any stop order (and the Company shall take all actions required to prevent the entry of such stop order or to remove it if entered); and (iv) any request by the Commission for any amendment or supplement to such Registration Statement or any prospectus relating thereto or for additional information or of the occurrence of an event requiring the preparation of a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of the securities covered by such Registration Statement, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and promptly make available to the holders of Registrable Securities included in such Registration Statement any such supplement or amendment; except that before filing with the Commission a Registration Statement or prospectus or any amendment or supplement thereto, including documents incorporated by reference, the Company shall furnish to the holders of Registrable Securities included in such Registration Statement and to the legal counsel for any such holders, copies of all such documents proposed to be filed sufficiently in advance of filing to provide such holders and legal counsel with a reasonable opportunity to review such documents and comment thereon, and the Company shall not file any Registration Statement or prospectus or amendment or supplement thereto, including documents incorporated by reference, to which such holders or their legal counsel shall object.
 
3.1.5.   State Securities Laws Compliance .  The Company shall use its best efforts to (i) register or qualify the Registrable Securities covered by the Registration Statement under such securities or “blue sky” laws of such jurisdictions in the United States as the holders of Registrable Securities included in such Registration Statement (in light of their intended plan of distribution) may request and (ii) take such action necessary to cause such Registrable Securities covered by the Registration Statement to be registered with or approved by such other governmental authorities as may be necessary by virtue of the business and operations of the Company and do any and all other acts and things that may be necessary or advisable to enable the holders of Registrable Securities included in such Registration Statement to consummate the disposition of such Registrable Securities in such jurisdictions; provided, however , that the Company shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3.1.5 or subject itself to taxation in any such jurisdiction.

      3.1.6.   Agreements for Disposition .  The Company shall enter into customary agreements (including, if applicable, an underwriting agreement in customary form) and take such other actions as are reasonably required in order to expedite or facilitate the disposition of such Registrable Securities.  The representations, warranties and covenants of the Company in any underwriting agreement which are made to or for the benefit of any Underwriters, to the extent applicable, shall also be made to and for the benefit of the holders of Registrable Securities included in such registration statement.  No holder of Registrable Securities included in such registration statement shall be required to make any representations or warranties in the underwriting agreement except, if applicable, with respect to such holder’s organization, good standing, authority, title to Registrable Securities, lack of conflict of such sale with such holder’s material agreements and organizational documents, and with respect to written information relating to such holder that such holder has furnished in writing expressly for inclusion in such Registration Statement.

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      3.1.7.   Cooperation .  The principal executive officer of the Company, the principal financial officer of the Company, the principal accounting officer of the Company and all other officers and members of the management of the Company shall cooperate fully in any offering of Registrable Securities hereunder, which cooperation shall include, without limitation, the preparation of the Registration Statement with respect to such offering and all other offering materials and related documents, and participation in meetings with Underwriters, attorneys, accountants and potential Stockholders.

3.1.8.   Records .  The Company shall make available for inspection by the holders of Registrable Securities included in such Registration Statement, any Underwriter participating in any disposition pursuant to such registration statement and any attorney, accountant or other professional retained by any holder of Registrable Securities included in such Registration Statement or any Underwriter, all financial and other records, pertinent corporate documents and properties of the Company, as shall be necessary to enable them to exercise their due diligence responsibility, and cause the Company’s officers, directors and employees to supply all information requested by any of them in connection with such Registration Statement.

      3.1.9.   Opinions and Comfort Letters .  The Company shall furnish to each holder of Registrable Securities included in any Registration Statement a signed counterpart, addressed to such holder, of (i) any opinion of counsel to the Company delivered to any Underwriter and (ii) any comfort letter from the Company’s independent public accountants delivered to any Underwriter.  In the event no legal opinion is delivered to any Underwriter, the Company shall furnish to each holder of Registrable Securities included in such Registration Statement, at any time that such holder elects to use a prospectus, an opinion of counsel to the Company to the effect that the Registration Statement containing such prospectus has been declared effective and that no stop order is in effect.

      3.1.10.   Earnings Statement .  The Company shall comply with all applicable rules and regulations of the Commission and the Securities Act, and make available to its shareholders, as soon as practicable, an earnings statement covering a period of twelve (12) months, beginning within three (3) months after the effective date of the registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.

      3.1.11.   Listing .  The Company shall use its best efforts to cause all Registrable Securities included in any registration to be listed on such exchanges or otherwise designated for trading in the same manner as similar securities issued by the Company are then listed or designated or, if no such similar securities are then listed or designated, in a manner satisfactory to the holders of a majority of the Registrable Securities included in such registration.

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3.2   Obligation to Suspend Distribution .  Upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3.1.4(iii), or, in the case of a resale registration on Form S-3 pursuant to Section 2.3 hereof, upon any suspension by the Company, pursuant to a written insider trading compliance program adopted by the Company’s Board of Directors, of the ability of all “insiders” covered by such program to transact in the Company’s securities because of the existence of material non-public information and holder would be deemed an “insider” under such program, each holder of Registrable Securities included in any registration shall immediately discontinue disposition of such Registrable Securities pursuant to the Registration Statement covering such Registrable Securities until such holder receives the supplemented or amended prospectus contemplated by Section 3.1.4(iv) or the restriction on the ability of “insiders” to transact in the Company’s securities is removed or is inapplicable to such holder, as applicable, and, if so directed by the Company, each such holder will deliver to the Company all copies, other than permanent file copies then in such holder’s possession, of the most recent prospectus covering such Registrable Securities at the time of receipt of such notice.

    3.3   Registration Expenses .  The Company shall bear all costs and expenses incurred in connection with any Demand Registration pursuant to Section 2.1, any Piggy-Back Registration pursuant to Section 2.2, and any registration on Form S-3 effected pursuant to Section 2.3, and all expenses incurred in performing or complying with its other obligations under this Agreement, whether or not the Registration Statement becomes effective, including, without limitation: (i) all registration and filing fees; (ii) fees and expenses of compliance with securities or “blue sky” laws (including fees and disbursements of counsel in connection with blue sky qualifications of the Registrable Securities); (iii) printing expenses; (iv) the Company’s internal expenses (including, without limitation, all salaries and expenses of its officers and employees); (v) the fees and expenses incurred in connection with the listing of the Registrable Securities as required by Section 3.1.11; (vi) National Association of Securities Dealers, Inc. fees; (vii) fees and disbursements of counsel for the Company and fees and expenses for independent certified public accountants retained by the Company (including the expenses or costs associated with the delivery of any opinions or comfort letters requested pursuant to Section 3.1.9); (viii) the fees and expenses of any special experts retained by the Company in connection with such registration and (ix)  the fees and expenses of one legal counsel selected by the holders of a majority-in-interest of the Registrable Securities included in such registration.  The Company shall have no obligation to pay any underwriting discounts or selling commissions or transfer taxes, if any, attributable to the Registrable Securities being sold by the holders thereof, which underwriting discounts or selling commissions or transfer taxes, if any, shall be borne by such holders.  Additionally, in an underwritten offering, all selling shareholders and the Company shall bear the expenses of the underwriter pro rata in proportion to the respective amount of shares each is selling in such offering.

    3.4   Information .  The holders of Registrable Securities shall provide such information as may reasonably be requested by the Company, or the managing Underwriter, if any, in connection with the preparation of any Registration Statement, including amendments and supplements thereto, in order to effect the registration of any Registrable Securities under the Securities Act pursuant to Section 2 and in connection with the Company’s obligation to comply with federal and applicable state securities laws.

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4.   INDEMNIFICATION AND CONTRIBUTION.

4.1   Indemnification by the Company .  The Company agrees to indemnify and hold harmless each Stockholder and each other holder of Registrable Securities, and each of their respective officers, employees, affiliates, directors, partners, members and agents, and each person, if any, who controls a Stockholder and each other holder of Registrable Securities (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) (each, a “ Stockholder Indemnified Party ”), from and against any expenses, losses, judgments, claims, damages or liabilities, whether joint or several, arising out of or based upon any untrue statement (or allegedly untrue statement) of a material fact contained in any Registration Statement under which the sale of such Registrable Securities was registered under the Securities Act, any preliminary prospectus, final prospectus or summary prospectus contained in the Registration Statement, or any amendment or supplement to such Registration Statement, or arising out of or based upon any omission (or alleged omission) to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Company of the Securities Act or any rule or regulation promulgated thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any such registration; and the Company shall promptly reimburse the Stockholder Indemnified Party for any legal and any other expenses reasonably incurred by such Stockholder Indemnified Party in connection with investigating and defending any such expense, loss, judgment, claim, damage, liability or action; provided, however , that the Company will not be liable in any such case to the extent that any such expense, loss, claim, damage or liability arises out of or is based upon any untrue statement or allegedly untrue statement or omission or alleged omission made in such Registration Statement, preliminary prospectus, final prospectus, or summary prospectus, or any such amendment or supplement, in reliance upon and in conformity with information furnished to the Company, in writing, by such selling holder expressly for use therein.  The Company also shall indemnify any Underwriter of the Registrable Securities, their officers, affiliates, directors, partners, members and agents and each person who controls such Underwriter on substantially the same basis as that of the indemnification provided above in this Section 4.1.

4.2   Indemnification by Holders of Registrable Securities .  Each selling holder of Registrable Securities will, in the event that any registration is being effected under the Securities Act pursuant to this Agreement of any Registrable Securities held by such selling holder, indemnify and hold harmless the Company, each of its directors and officers and each underwriter (if any), and each other person, if any, who controls such selling holder or such underwriter within the meaning of the Securities Act, against any losses, claims, judgments, damages or liabilities, whether joint or several, insofar as such losses, claims, judgments, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or allegedly untrue statement of a material fact contained in any Registration Statement under which the sale of such Registrable Securities was registered under the Securities Act, any preliminary prospectus, final prospectus or summary prospectus contained in the Registration Statement, or any amendment or supplement to the Registration Statement, or arise out of or are based upon any omission or the alleged omission to state a material fact required to be stated therein or necessary to make the statement therein not misleading, if the statement or omission was made in reliance upon and in conformity with information furnished in writing to the Company by such selling holder expressly for use therein, and shall reimburse the Company, its directors and officers, and each such controlling person for any legal or other expenses reasonably incurred by any of them in connection with investigation or defending any such loss, claim, damage, liability or action.  Each selling holder’s indemnification obligations hereunder shall be several and not joint and shall be limited to the amount of any net proceeds (after payment of all underwriting fees, discounts, commissions and taxes) actually received by such selling holder from the sale of Registrable Securities which gave rise to such indemnification obligation.

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4.3   Conduct of Indemnification Proceedings .  Promptly after receipt by any person of any notice of any loss, claim, damage or liability or any action in respect of which indemnity may be sought pursuant to Section 4.1 or 4.2, such person (the “ Indemnified Party ”) shall, if a claim in respect thereof is to be made against any other person for indemnification hereunder, notify such other person (the “ Indemnifying Party ”) in writing of the loss, claim, judgment, damage, liability or action; provided, however , that the failure by the Indemnified Party to notify the Indemnifying Party shall not relieve the Indemnifying Party from any liability which the Indemnifying Party may have to such Indemnified Party hereunder, except and solely to the extent the Indemnifying Party is actually prejudiced by such failure.  If the Indemnified Party is seeking indemnification with respect to any claim or action brought against the Indemnified Party, then the Indemnifying Party shall be entitled to participate in such claim or action, and, to the extent that it wishes, jointly with all other Indemnifying Parties, to assume control of the defense thereof with counsel reasonably satisfactory to the Indemnified Party.  After notice from the Indemnifying Party to the Indemnified Party of its election to assume control of the defense of such claim or action, the Indemnifying Party shall not be liable to the Indemnified Party for any legal or other expenses subsequently incurred by the Indemnified Party in connection with the defense thereof other than reasonable costs of investigation; provided, however , that in any action in which both the Indemnified Party and the Indemnifying Party are named as defendants, the Indemnified Party shall have the right to employ separate counsel (but no more than one such separate counsel) to represent the Indemnified Party and its controlling persons who may be subject to liability arising out of any claim in respect of which indemnity may be sought by the Indemnified Party against the Indemnifying Party, with the fees and expenses of such counsel to be paid by such Indemnifying Party if, based upon the written opinion of counsel of such Indemnified Party, representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them.  No Indemnifying Party shall, without the prior written consent of the Indemnified Party, consent to entry of judgment or effect any settlement of any claim or pending or threatened proceeding in respect of which the Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such judgment or settlement includes an unconditional release of such Indemnified Party from all liability arising out of such claim or proceeding.

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4.4   Contribution .

4.4.1.   If the indemnification provided for in the foregoing Sections 4.1, 4.2 and 4.3 is unavailable to any Indemnified Party in respect of any loss, claim, damage, liability or action referred to herein, then each such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such loss, claim, damage, liability or action in such proportion as is appropriate to reflect the relative fault of the Indemnified Parties and the Indemnifying Parties in connection with the actions or omissions which resulted in such loss, claim, damage, liability or action, as well as any other relevant equitable considerations.  The relative fault of any Indemnified Party and any Indemnifying Party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such Indemnified Party or such Indemnifying Party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

4.4.2.   The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 4.4 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding Section 4.4.1.  The amount paid or payable by an Indemnified Party as a result of any loss, claim, damage, liability or action referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses incurred by such Indemnified Party in connection with investigating or defending any such action or claim.  Notwithstanding the provisions of this Section 4.4, no holder of Registrable Securities shall be required to contribute any amount in excess of the dollar amount of the net proceeds (after payment of all underwriting fees, discounts, commissions and taxes) actually received by such holder from the sale of Registrable Securities which gave rise to such contribution obligation.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
 
5.   UNDERWRITING AND DISTRIBUTION.

5.1   Rule 144 .  The Company covenants that it shall file any reports required to be filed by it under the Securities Act and the Exchange Act and shall take such further action as the holders of Registrable Securities may reasonably request, all to the extent required from time to time to enable such holders to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 under the Securities Act, as such Rules may be amended from time to time, or any similar Rule or regulation hereafter adopted by the Commission.

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6.   MISCELLANEOUS.

6.1   Other Registration Rights .  The Company represents and warrants that no person, other than a holder of the Registrable Securities and the parties to the Founding Investor Registration Rights Agreement, has any right to require the Company to register any shares of the Company’s capital stock for sale or to include shares of the Company’s capital stock in any registration filed by the Company for the sale of shares of capital stock for its own account or for the account of any other person.

6.2   Assignment; No Third-Party Beneficiaries .  This Agreement and the rights, duties and obligations of the Company hereunder may not be assigned or delegated by the Company in whole or in part.  This Agreement and the rights, duties and obligations of the holders of Registrable Securities hereunder may be freely assigned or delegated by such holder of Registrable Securities in conjunction with and to the extent of any transfer of Registrable Securities by any such holder.  This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties and their respective successors and the permitted assigns of the Stockholder or holder of Registrable Securities or of any assignee of the Stockholder or holder of Registrable Securities.  This Agreement is not intended to confer any rights or benefits on any persons that are not a party hereto other than as expressly set forth in Section 4 and this Section 6.2. 

6.3   Notices . All notices, demands, requests, consents, approvals or other communications (collectively, “ Notices ”) required or permitted to be given hereunder or which are given with respect to this Agreement shall be in writing and shall be personally served, delivered by reputable air courier service with charges prepaid, or transmitted by hand delivery, telegram, telex or facsimile, addressed as set forth below, or to such other address as such party shall have specified most recently by written notice.  Notice shall be deemed given on the date of service or transmission if personally served or transmitted by telegram, telex or facsimile; provided , that if such service or transmission is not on a business day or is after normal business hours, then such notice shall be deemed given on the next business day.  Notice otherwise sent as provided herein shall be deemed given on the next business day following timely delivery of such notice to a reputable air courier service with an order for next-day delivery.

 
Fortress America Acquisition Corporation
4100 North Fairfax Drive, #1150
Arlington, Virginia 22203
Attention:  Chairman
 
with a copy to:
 
Squire, Sanders & Dempsey L.L.P.
8000 Towers Crescent Drive, 14 th Floor
Tysons Corner, Virginia 22182
Attn: James J. Maiwurm, Esq.; and
 
To a Stockholder,:
 
to the addresses listed on Exhibit A hereto.
 
 

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6.4   Severability .  This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof.  Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.
 
6.5   Counterparts .  This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, and all of which taken together shall constitute one and the same instrument.
 
6.6   Entire Agreement .  This Agreement (including all agreements entered into pursuant hereto and all certificates and instruments delivered pursuant hereto and thereto) constitute the entire agreement of the parties with respect to the subject matter hereof and supersede all prior and contemporaneous agreements, representations, understandings, negotiations and discussions between the parties, whether oral or written.
 
6.7   Modifications and Amendments .  No amendment, modification or termination of this Agreement shall be binding upon any party unless executed in writing by such party.
 
6.8   Titles and Headings .  Titles and headings of sections of this Agreement are for convenience only and shall not affect the construction of any provision of this Agreement.
 
6.9   Waivers and Extensions .  Any party to this Agreement may waive any right, breach or default which such party has the right to waive, provided that such waiver will not be effective against the waiving party unless it is in writing, is signed by such party, and specifically refers to this Agreement.  Waivers may be made in advance or after the right waived has arisen or the breach or default waived has occurred.  Any waiver may be conditional.  No waiver of any breach of any agreement or provision herein contained shall be deemed a waiver of any preceding or succeeding breach thereof or of any other agreement or provision herein contained.  No waiver or extension of time for performance of any obligations or acts shall be deemed a waiver or extension of the time for performance of any other obligations or acts.
 
6.10   Remedies Cumulative .  In the event that the Company fails to observe or perform any covenant or agreement to be observed or performed under this Agreement, the Stockholder or any other holder of Registrable Securities may proceed to protect and enforce its rights by suit in equity or action at law, whether for specific performance of any term contained in this Agreement or for an injunction against the breach of any such term or in aid of the exercise of any power granted in this Agreement or to enforce any other legal or equitable right, or to take any one or more of such actions, without being required to post a bond.  None of the rights, powers or remedies conferred under this Agreement shall be mutually exclusive, and each such right, power or remedy shall be cumulative and in addition to any other right, power or remedy, whether conferred by this Agreement or now or hereafter available at law, in equity, by statute or otherwise.

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6.11   Governing Law . This Agreement shall be governed by, interpreted under, and construed in accordance with the internal laws of the State of Delaware applicable to agreements made and to be performed within the State of Delaware, without giving effect to any choice-of-law provisions thereof that would compel the application of the substantive laws of any other jurisdiction. 
 
6.12   Waiver of Trial by Jury .  Each party hereby irrevocably and unconditionally waives the right to a trial by jury in any action, suit, counterclaim or other proceeding (whether based on contract, tort or otherwise) arising out of, connected with or relating to this Agreement, the transactions contemplated hereby, or the actions of any Stockholder in the negotiation, administration, performance or enforcement hereof.
 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be executed and delivered by their duly authorized representatives as of the date first written above.
 
 
 
FORTRESS AMERICA ACQUISITION CORPORATION,
 
a Delaware corporation
 
 
 
By: /s/ Harvey L. Weiss
 
Name:   Harvey L. Weiss
Title:   Chairman
 
STOCKHOLDERS:
 
 
 
/s/ Thomas P. Rosato  
 
Thomas P. Rosato
   
 
/s/ Gerard J. Gallagher
 
 Gerard J. Gallagher
   
 
Evergreen Capital LLC
   
   
 
By:/s/ Richard Kohr, Jr.
Name: Richard Kohr
 
Title:President




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Exhibit A


Stockholders:


Thomas P. Rosato
11373 Liberty Street
Fulton, MD 20759


Gerard J. Gallagher
5 Tydings Road
Severna Park, MD 211468


Evergreen Capital, LLC
8808 Centre Park Drive, Suite 204
Columbia, MD 21045

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EXECUTIVE EMPLOYMENT AGREEMENT
 
This EXECUTIVE EMPLOYMENT AGREEMENT (this " Agreement "), effective this 19 th of January, 2007 (" Effective Date "), between FORTRESS AMERICA ACQUISITION CORPORATION a Delaware corporation (the " Company ") and HARVEY L. WEISS (the " Executive ").
 
WITNESSETH
 
WHEREAS, the Executive has served as the Chief Executive Officer of the Company since December 20, 2004.
 
WHEREAS, by the terms of a Second Amended and Restated Membership Interest Purchase Agreement (the “ Purchase Agreement ”) dated July 31, 2006, by and among the Company, Thomas P. Rosato (“ Rosato ”), Gerard J. Gallagher (“ Gallagher ”), VTC, LLC (“ VTC ”) and Vortech, LLC (“ Vortech ”), the Company has agreed to purchase from Rosato and Gallagher all of the outstanding membership interests of VTC and Vortech.
 
WHEREAS, the Company desires to retain the service of the Executive as the Chairman of the Board of Directors of the Company upon the terms and conditions set forth herein.
 
WHEREAS, the Executive is willing to provide services to the Company upon the terms and conditions set forth herein.
 
NOW THEREFORE, in consideration of the promises and the mutual agreements contained herein, intending to be legally bound, the parties agree as follows:
 
1.    DEFINITIONS
 
The following words and terms shall have the meanings set forth below for the purposes of this Agreement:
 
1.1.    Affiliates . " Affiliates " of a Person, or a Person " affiliated " with another Person, are any Persons which, directly or indirectly, through one or more intermediaries, controls or are controlled by or are under common control with, the Person specified.
 
1.2.    Base Salary . " Base Salary " shall have the meaning set forth in Section 3.1 hereof.
 
1.3.    Board . " Board " means the Company’s Board of Directors.
 
1.4.    Cause .
 
1.4.1    Termination of the Executive’s employment for " Cause " shall mean any of the following:
 
(i)   any act that would constitute a material violation of the Company’s material written policies provided that the Company specifically terminates the Executive’s employment for Cause hereunder within 120 days from the date the Company has actual notice of such;
 
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(ii)   intentionally engaging in conduct materially and demonstrably injurious to the Company provided that the Company specifically terminates the Executive’s employment for Cause hereunder within 120 days from the date the Company has actual notice of such; or
 
(iii)   conviction of (1) a crime of embezzlement or a crime involving moral turpitude; (2) a crime with respect to the Company involving a breach of trust or dishonesty; or (3) in either case, a plea of guilty or no contest to such a crime provided that the Company specifically terminates the Executive’s employment for Cause hereunder within 120 days from the date the Company has actual notice of such.
 
1.4.2    In any case, if the Company desires to terminate the Executive's employment for Cause in accordance with Sections 1.4.1(i), (ii) or (iii), it shall first give written notice of the facts and circumstances providing the basis for Cause to the Executive, and to allow the Executive 30 days from the date of such notice to remedy, cure or rectify, if possible, the situation giving rise to the Company's allegations of Cause (the "Cure Period"); provided, however, that the Executive shall have only one such opportunity to cure, regardless of the grounds on which Cause is asserted, during the Employment Period. During the Cure Period, the Executive may not be entitled to payment of any compensation, in the Company's sole discretion; provided, however, that if the Executive's compensation is withheld and the Executive successfully remedies, cures, or rectifies the situation giving rise to the Company's notice of Cause during the Cure Period, resulting in the Company's withdrawal of its written notice of Cause, the Executive shall be compensated for the Cure Period.
 
1.4.3    A termination for Cause after a Change in Control shall be based only on events occurring after such Change in Control; provided, however, the foregoing limitation shall not apply to an event constituting Cause which was not discovered by the Company prior to a Change in Control.
 
1.4.4    Cause shall be determined in good faith by the affirmative vote of a majority of the whole Board (excluding the Executive if the Executive is a member of the Board).
 
1.5.    Change in Control of the Company . " Change in Control of the Company " means (a) a sale, transfer or exclusive licensing by the Company of all or substantially all of the assets of the Company and its Subsidiaries on a consolidated basis (measured by either book value in accordance with United States generally accepted accounting principles consistently applied or fair market value determined in the reasonable good faith judgment of the Board) in any transaction or series of transactions (other than sales in the ordinary course of business); (b) any sale, transfer or issuance or series of sales, transfers and/or issuances of shares of the Company's capital stock by the Company or any holders thereof which results in any Person or Persons, other than the holders of Company’s capital stock as of the date hereof, owning capital stock of the Company possessing the voting power (under ordinary circumstances) to elect a majority of the Board; (c) the stockholders of the Company approve a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 50% of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or (d) the stockholders of the Corporation approve a plan of complete liquidation of the Company.
 
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1.6.    Date of Termination . " Date of Termination " shall mean (a) if the Executive’s employment is terminated by reason of the Executive’s death, the date of the Executive’s death, or (b) if the Executive’s employment with the Company and its Subsidiaries is terminated for any reason other than the Executive’s death, the date on which Executive ceases to be an employee of the Company and its Subsidiaries.
 
1.7.    Disability .   Termination of the Executive’s employment with the Company and its Subsidiaries based on " Disability " shall mean termination of the Executive’s employment at the Company’s sole discretion, upon thirty (30) days prior written notice in the event the Executive becomes “Disabled,” as defined in any group term disability insurance maintained by the Company applicable to the Executive, or, (b) if the Company shall not maintain such insurance, the determination by an independent physician acting reasonably and in good faith that the Executive is incapacitated by reason of a physical or mental illness which is long-term in nature and which prevents the Executive from performing the substantial and material duties of his employment with the Company, provided that such incapacity can reasonably be expected to prevent the Executive from working at least six (6) months in any twelve (12) month period. The Company may require the Executive to have the examination described in the preceding sentence at any time for the purpose of determining whether the Executive has a long-term disability, and the Executive agrees to submit to such examination upon request of the Board; provided that the Company shall pay all costs and expenses associated with such examination. This Section 1.6 shall be interpreted and applied consistently with the Americans with Disabilities Act, the Family and Medical Leave Act and other applicable law.
 
1.8.    Good Reason . Termination of the Executive’s employment by the Executive for a " Good Reason " shall mean termination by the Executive because of: (a) a requirement to move the Executive’s primary place of business more than twenty-five (25) miles from the office the Executive works in on the date hereof (which termination occurs prior to such move) without the written consent of the Executive, (b) failure of the Company to pay any installment of the Executive’s Base Salary or Referral Fees when such installment is due pursuant to this Agreement, which failure is not cured within fifteen (15) days; (c) any other breach or breaches of this Agreement by the Company, which breaches are, singularly or in the aggregate, material, and which are not cured within thirty (30) days of written notice of such breach or breaches to the Company by the Executive; or (d) a reduction by the Company of the Executive’s Base Salary without the express written consent of the Executive.
 
1.9.    Person . " Person " means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, any other business entity and a governmental entity or any department, agency or political subdivision thereof.
 
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1.10.    Restrictive Period . For purposes of this Agreement the term “ Restrictive Period ” shall have the following meanings.
 
1.10.1   If the Executive’s employment is terminated prior to the third (3 rd ) anniversary of the Closing Date, then the Restrictive Period shall be the period from the Termination Date through the third anniversary of the Closing Date (or if the Termination Date is within twelve (12) months of the third anniversary of the Closing Date), then for a period of one (1) year measured from the Termination Date through the first anniversary of the Termination Date.
 
1.10.2   Subject to Section 7.4 hereof, the Executive’s employment is terminated after the third anniversary of the Closing Date, then the Restrictive Period shall be the twelve month period measured from the Termination Date through the first anniversary of the Termination Date.
 
1.11.    Subsidiary . " Subsidiary " means, with respect to any Person, any corporation, limited liability company, partnership, association or other business entity of which (a) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (b) if a limited liability company, partnership, association or other business entity, a majority of the partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a limited liability company, partnership, association or other business entity if such Person or Persons shall be allocated a majority of limited liability company, partnership, association or other business entity gains or losses or shall be or control any managing director or general partner of such limited liability company, partnership, association or other business entity.
 
2.    EMPLOYMENT
 
2.1.    Employment Period .
 
2.1.1   Expressly conditioned upon the closing (the “ Closing ”) under the Purchase Agreement and effective as of the date of the Closing (the “ Closing Date ”), the Company hereby employs the Executive, and the Executive hereby accepts said employment and agrees to render services to the Company, on the terms and conditions set forth in this Agreement for the period (the " Employment Period ") beginning on the Closing Date and ending when such period is terminated pursuant to the terms hereof. Unless earlier terminated by either the Company or the Executive as hereinafter provided, the Employment Period shall continue through the third (3 rd ) anniversary of the Closing Date (" Expiration Date "); provided, however, that if this Agreement is renewed pursuant to Section 2.1(b) below, then the “Expiration Date” for the then current “Renewal Term” (as hereinafter defined) shall be the date that is last day of the one year period of that Renewal Term). Notwithstanding anything to the contrary continued in this Section 2.1(a) , if the Closing under the Purchase Agreement does not occur, this Agreement shall be null and void and of no force and effect.
 
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2.1.2   This Agreement shall be automatically renewed for an additional one year period commencing at the expiration of the initial Employment Period or any subsequent renewal term (each, a " Renewal Term ") unless the Company provides written notice of termination to the Executive not less than sixty (60) days prior to the Expiration Date. Notwithstanding the foregoing or anything else in this Agreement to the contrary, the Employment Period shall immediately terminate prior to any Expiration Date (i) upon Executive’s death, Disability or termination for a Good Reason or (ii) upon termination by the Company for Cause; in all other circumstances, thirty (30) days' prior written notice is required by either party to the other to terminate this Agreement.
 
2.2.    Duties .   During the Employment Period, the Executive shall devote the necessary time, to the best of his ability and discretion, to work with other senior managers and the Board to execute the strategic plan approved by the Board. The Executive shall perform such services for the Company as is consistent with the Executive's position (subject to the power and authority of the Board to expand or limit such services and to overrule actions of officers of the Company) and as directed, from time to time, by the Board. The Executive’s initial title shall be Chairman of the Board of Directors. During the Employment Period the Executive shall report to the Board, and Executive may use such titles as assigned and approved by the Board. During the Employment Period, the Executive may be employed or involved in other business activities for gain, profit or other pecuniary advantages so long as such activities do not interfere with the performance of his duties and responsibilities to the Company as provided hereunder or violate any of the terms of this or any other agreement entered into with the Company.
 
2.3.    Insurance . The Company may, at its discretion, apply for and procure in its own name and for its own benefit life and/or disability insurance on the Executive in any amount or amounts considered available. The Executive agrees to cooperate in any medical or other examination, supply any information and execute and deliver any applications or other instruments in writing as may be reasonably necessary to obtain and constitute such insurance. The Executive hereby represents that the Executive has no reason to believe that the Executive's life is not insurable at rates now prevailing for a healthy person of the Executive's gender and age.
 
2.4.    Corporate Opportunity . The Executive agrees that, unless approved by the Board, he will not take personal advantage of any business opportunities which arise during his employment with the Company and which may be of benefit to the Company. All material facts regarding such opportunities must be promptly reported to the Board for consideration by the Company.
 
3.    COMPENSATION AND BENEFITS
 
3.1.    Base Salary . During the Employment Period, the Company shall pay the Executive an initial base salary of Two Hundred Thousand Dollars ($200,000.00) per year (" Base Salary ") paid in approximately equal installments bi-weekly. The Company will review the Executive’s Base Salary on December 31 of each year of the Employment Period in order to determine what Base Salary adjustments, if any, shall be made, subject to an annual minimum increase of five percent (5%), but in no event may the Executive's Base Salary be reduced below that paid in the preceding year.
 
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3.2.    Annual Bonus . For calendar year 2006 (ending on or about December 31, 2006) and for each other calendar year that begins during the Employment Period (each such calendar year, a " Bonus Year "), the Executive shall be eligible to receive a bonus in an amount and on such terms as are established by the Company's Board up to fifty percent (50%) of the Base Salary (each, a " Bonus ") in accordance with the bonus plan or formula applicable to the Executive. The 2006 Bonus shall be prorated to reflect that the 2006 Bonus Year is a partial year commencing on the Closing Date and ending on December 31, 2006. In addition, the Executive shall be eligible for any other bonus as the Board may determine in its sole discretion. Any Bonus for an applicable calendar year, or portion thereof, shall be paid to the Executive no later than the conclusion of the first calendar quarter following each calendar year.
 
3.3.    Vacation and Benefits .   The Executive shall continue to receive vacation, health insurance and other employee benefits as the Company makes available to other executives, as may exist at any particular time and from time to time during the Executive’s employment.
 
3.4.    Withholding . All payments required to be made by the Company hereunder to the Executive shall be subject to the withholding of such amounts, if any, relating to tax and other payroll deductions as the Company may reasonably determine should be withheld pursuant to any applicable law or regulation.
 
3.5.    Policies, Procedures & Benefit Plans . Except as otherwise provided herein, the Executive’s employment shall be subject to the policies and procedures which apply generally to the Company’s employees as the same may be interpreted, adopted, revised or deleted from time to time, during the Employment Period, by the Board in its sole discretion. The Executive agrees to comply with such policies and procedures in all material respects. During the Employment Period, the Executive shall be entitled to participate in any Company benefit plans on the same basis as other executive level employees of the Company. The Board reserves the right to change, alter, or terminate benefits, plans and carriers in its sole direction. All matters of eligibility for coverage or benefits under any health, hospitalization, life, disability, or other insurance plan, program or policy shall be determined in accordance with the provisions of the plan, program, or policy; the Company shall not be liable to the Executive, the Executive’s family, heirs, executors, or beneficiaries, for any payment payable or claimed to be payable under any such benefit plan, program, or policy. Provided that the Executive can be insured at standard rates, the Company shall provide the Executive a $1,000,000 life insurance policy with a reputable and responsible insurance company acceptable to the Company and the Executive.
 
3.6.    Referral Fee. If, during the term of this Agreement, Executive identifies a potential new client for the Company (other than the federal government, or any agency or subdivision thereof), he shall promptly notify the Company in writing specifying the name of the target, the extent of his contact and the date upon which he has identified the potential client. Upon receipt of such notification, the Company will promptly acknowledge receipt of the notification and either (a) confirm to Executive that he has identified a potential new client (each an “ Acknowledged New Target ”), or (b) if the Company has independently of the Executive already identified such potential client, it will advise Executive and give him the date of the Company's prior contact and the nature and extent thereof. As to each Acknowledged New Target, the Executive will cooperate with the Company in broadening contact and establishing a dialogue. Any contracts that are entered into between the Company and an Acknowledged New Target during (i) the term of this Agreement, or (ii) within six (6) months after the Expiration Date, or if sooner terminated, the Termination Date, shall hereinafter be referred to individually as a “ Referred Contract ” and collectively as the “ Referred Contracts .” Contracts entered into with an Acknowledged New Target more than six (6) months after the Expiration Date (or Termination Date, as applicable) shall not be deemed to be Referred Contracts. The Executive shall not identify potential clients on a blanket basis, but shall only identify clients with which he has made specific contact and which appear to be viable prospects for new business.
 
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3.6.1   For each Referred Contract the Company will pay Executive a referral fee equal to five percent (5%) of the “Gross Profits” (hereinafter defined) earned by the Company in each fiscal year (for each Referred Contract the “ Referral Fee ” and for all of the Referred Contracts the “ Referral Fees ”).
 
3.6.2   For purposes of this Section 3.6, the following terms shall have the following meanings:
 
(i)    Gross Profits ” with respect to a Referred Contract shall mean the “Gross Revenues” with respect to that Referred Contract (as defined below) less Cost of Goods/Services Sold with respect to that Referred Contract (as defined below).
 
(ii)    Gross Revenues ” with respect to any Referred Contract shall mean all revenue derived by the Company under that Referred Contract from the rendering of services and the sales of goods.
 
(iii)    Cost of Goods/Serviced Sold ” shall mean with respect to each Referred Contract the direct costs of the Company incurred by the Company in connection with generating the Gross Revenues which costs shall include, but not be limited to (A) the labor and expense costs of the Company’s employees and consultants (including allocable administrative costs); (B) direct vendor or supplier costs and other costs of goods, used or incorporated in or otherwise delivered to the customer under the Referred Contract (including shipping costs) and (C) the costs of services rendered by third-party contractors.
 
3.6.3   The determination of Gross Profits, Gross Revenues and Cost of Goods/Services Sold with respect to each Referred Contract shall be made by the Company’s senior financial executive using generally accepted accounting principles applied on the accrual basis of accounting and a basis consistent with the manner in which the Company’s books and records are maintained.
 
3.6.4   The Referral Fee due with respect to each Referred Contract shall be calculated annually, based on the Company’s fiscal year and in connection with the preparation of the Company’s audited financials. Not later than ten (10) days after the release of the Company’s audited financials for the immediately preceding fiscal year the Company’s senior financial executive shall provide Executive with a statement (each a “ Referral Fee Statement ”) setting forth the calculation of the Referral Fees attributable to the Company’s immediately preceding fiscal year in such reasonable detail as to permit Executive to review and confirm the accuracy of such calculations. The Company shall also provide Executive with reasonable access, subject to appropriate confidentiality restrictions, to books and records appropriate to enable Seller to review and verify such calculations. Executive shall have fifteen (15) days following delivery of a Referral Fee Statement (each a “ Disagreement Notice Period ”) to disagree with Referral Fee Statement by written notice to the Company setting forth in reasonable detail the amount and nature of the disagreement (each a “ Notice of Disagreement ”). If the Company does not receive a Notice of Disagreement from the Executive within the Disagreement Notice Period, the Executive shall be conclusively presumed to agree with the Referral Fee Statement and the Company shall promptly pay to the Executive the Referral Fees shown to be due on the Referral Fee Statement. If the Company receives a Notice of Disagreement from the Executive within the Disagreement Notice Period and if the Company and the Executive are unable to mutually agree upon a settlement of the disagreement within thirty (30) days after the delivery of the Notice of Disagreement to the Company, then the dispute shall be resolved pursuant to Section 9.
 
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4.    SUPPORT AND EXPENSES
 
4.1.    Office . During the Employment Period, the Company shall provide the Executive with   an office allowance of Three Thousand Dollars ($3,000) per month .
 
4.2.    Expenses . During the Employment Period, including following any Date of Termination for appropriate expenses incurred on or prior to the Date of Termination, the Company shall reimburse the Executive promptly or otherwise provide for or pay for all pre-approved reasonable expenses incurred by the Executive in furtherance of, or in connection with, the business of the Company or its Subsidiaries, consistent with the Company’s policies in effect from time to time with respect to travel, entertainment and other business expenses, subject to such reasonable documentation and other limitations as may be established from time to time by the Board, including against presentation of vouchers or receipts therefor.
 
5.    TERMINATION
 
5.1.    Termination Due to Death or Disability, For Cause or By the Executive . If the Employment Period is terminated (a) by reason of the Executive’s death or Disability; (b) by the Company for Cause; or (c) by the Executive (other than for a Good Reason); then the Executive shall only be entitled to receive (i) the Executive’s Base Salary and the reimbursement of any applicable expenses pursuant to Section 4.2 through the Date of Termination, and (ii) the Referral Fees as and when payable pursuant to the Section 3.6; provided that the Expiration Date for purposes of calculating the Referred Contracts and the Referral Fees shall be the Termination Date rather than the Expiration Date. No Person shall be entitled hereunder to participate in any employee benefit plan after the Date of Termination if the Employment Period is terminated in connection with this Section 5.1 , except as otherwise expressly required by applicable law (i.e., COBRA) and provided that nothing herein shall be interpreted to limit the Executive’s conversion rights, if any, under any of the Company’s employee benefit plans.
 
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5.2.    Termination by the Company Other Than for Death, Disability, or Cause or by the Executive for a Good Reason . In addition to the payment to the Executive of the Executive's Base Salary and the reimbursement of any applicable expenses pursuant to Section 4.2 through the Date of Termination, if (a) the Employment Period is terminated (i) by the Company for reasons other than death, Disability, or Cause, or (ii) by the Executive for a Good Reason, or (iii) in accordance with the terms of Section 2.1(b) hereof (provided the Company provides the requisite notice to the Executive to terminate prior to any Expiration Date); and (b) the Executive executes a general release in the form attached hereto as Exhibit A (the " Release ") on or before the effective Date of Termination; and (c) the Executive has not breached the terms of the “Assignment Agreement” (as defined below); then the Company shall pay the Executive an amount equal to the Executive’s Base Salary (at the rate in effect at the Date of Termination) for a period commencing on the Date of Termination and on the Expiration Date; provided, however , that if the Termination Date is within twenty four (24) months of the Expiration Date, then the Company shall pay the Executive an amount equal to the Executive’s Base Salary (at the rate effective as of the Termination Date), for a period commencing on the Termination Date and ending on the second (2 nd ) anniversary of the Termination Date. Any payment under this Section 5.2 shall be made over time as though the Executive continued to be employed by the Company. If the Executive elects and remains eligible for health coverage pursuant to Section 4980B of the Internal Revenue Code of 1986, as amended (" COBRA ") (and subject to withholding pursuant to Section 3.5 above); then commencing   within fifteen (15) business days following the date on which the Release becomes effective pursuant to its terms, the Company will, for a period commencing on the Date of Termination and ending twelve (12) months from the Date of Termination, pay a percentage of the premium for such COBRA health coverage equal to the percentage of the premium for health insurance coverage paid by the Company on the Date of Termination. The Executive shall not be entitled to any other salary or compensation after termination of the Employment Period (other than as set forth in this Section 5.2 and Section 5.3 ) and no Person shall be entitled hereunder to participate in any employee benefit plan after the Date of Termination if the Employment Period is terminated in connection with this Section 5.2 , except as otherwise specifically provided hereunder or as required by applicable law (i.e., COBRA) and provided that nothing herein shall be interpreted to limit the Executive’s conversion rights, if any, under any of the Company’s employee benefit plans. In furtherance of and not in limitation of the foregoing, the Executive may only be terminated by the affirmative vote of a majority of the whole Board (excluding the Executive if he is a member of the Board).
 
5.3.    Cooperation with Company After Termination of Employment .   For a period of six (6) months following termination of the Employment Period for any reason, as such period may be extended with the consent of the Executive, the Executive shall fully cooperate with the Company in all matters relating to the winding up of pending work on behalf of the Company including, but not limited to, any litigation in which the Company is involved, and the orderly transfer of any such pending work to other executives of the Company as may be designated by the Company. The Executive shall be compensated for any time spent pursuant to this Section 5.3 at the specific request of the Company at a per   diem amount based upon the Executive's Base Salary at the Date of Termination.
 
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5.4.    Termination by Mutual Consent . Notwithstanding any of the foregoing provisions of this Section 5 , if at any time during the course of this Agreement the parties by mutual consent decide to terminate it, they shall do so by separate agreement setting forth the terms and conditions of such termination.
 
6.    INVENTION, ASSIGNMENT, NON-COMPETE AND CONFIDENTIALITY AGREEMENT
 
6.1.    The parties hereto have entered into an Invention, Assignment, and Confidentiality Agreement attached hereto as Exhibit B (the " Assignment Agreement "), which may be amended by the parties from time to time pursuant to the terms thereof. The provisions of the Assignment Agreement are intended by the parties to survive and shall survive termination or expiration of the Employment Period and this Agreement.
 
7.  
NON-SOLICITATION CUSTOMERS OR EMPLOYEES; NON-COMPETITION
 
7.1.    Covenant Not-to-Solicit Customers. Subject to Section 7.4 below, during Executive's employment with the Company through the applicable Restrictive Period, the Executive shall not directly or indirectly, individually or on behalf of any other person or entity, whether as principal, agent, stockholder, employee, consultant, representative or in any other capacity, contact any person or entity, which:
 
7.1.1   is a customer or client of the Company or any of its subsidiaries as of the Termination Date; or
 
7.1.2   has been a customer or client of the Company or any of its subsidiaries at any time within two (2) years prior to the Termination Date; or
 
7.1.3   is a prospective customer or client that the Company or any of its subsidiaries is actively soliciting as of the Termination Date (for the purpose of selling products or services similar to any of the products and services offered for sale by the Company as of the date the Executive's employment terminates).
 
7.2.    Covenant Not-to-Solicit Employees. Subject to Section 7.4 below, during Executive's employment with the Company and from the Termination Date through the applicable Restrictive Period , the Executive shall not directly or indirectly, individually or on behalf of any other person or entity, whether as principal, agent, stockholder, employee, consultant, representative or in any other capacity:
 
7.2.1   recruit, solicit or encourage any person to leave the employ of the Company or any of its subsidiaries; or
 
7.2.2   hire any employee of the Company or any of its subsidiaries as a regular employee, consultant, independent contractor or otherwise.
 
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7.3.    Non-Competition. The Executive recognizes and acknowledges the competitive and proprietary nature of the business operations of the Company and its subsidiaries. Subject to Section 7.4 below, during the Executive’s employment with the Company and for the applicable Restrictive Period, the Executive shall not, without the prior written consent of the Company, for himself or on behalf of any other person or entity, directly or indirectly, whether as principal, agent, stockholder, employee, consultant, representative or in any other capacity, own, manage, operate or control, or be concerned, connected or employed by, or otherwise associate in any manner with, engage in or have a financial interest in any business that is involved in planning, designing, building and maintaining specialized data rooms, server rooms, data centers and network facilities as to which the Company offers expertise, except that nothing contained herein shall preclude the Executive from purchasing or owning stock in any such competitive business if such stock is publicly traded, and provided that his holdings do not exceed one percent (1%) of the issued and outstanding capital stock of such business.
 
7.4.    Reduction and Extension of Restrictions.  
 
7.4.1   Notwithstanding contained in Sections 7.1, 7.2 and 7.3 above the provisions of Sections 7.1, 7.2 and 7.3 above shall only apply to terminations made pursuant to Section 5.1 and shall not apply with respect to terminations made pursuant to Section 5.2 .
 
7.4.2   The Company at Company’s option, by written notice delivered to Executive not less than thirty (30) days prior to the expiration of the then current, applicable Restrictive Period, may extend the Restrictive Period (as previously extended under this Section 7.4(b)) for an additional twelve (12) months, provided that Company pays to Executive during the extended Restrictive Period an amount equal to the Executive’s Base Salary (at the rate effective as of the applicable Termination Date and over time and in the manner Executive would have received these payments had he continued to be employed by the Company).
 
7.5.    Non-Disparagement. The Executive agrees not to make any public statement, or engage in any conduct, that is disparaging to the Company, or any of its employees, officers, directors or shareholders, including, but not limited to, any statement that disparages the products, services, finances, financial condition, capabilities or other aspects of the business of the Company. Notwithstanding any term to the contrary herein, the Executive shall not be in breach of this Section 7 for the making of any truthful statements under oath.
 
7.6.    Reasonableness of Restrictions. The Executive has carefully read and considered the provisions of this Section 7 , and, having done so, agrees (a) that the restrictions set forth herein are reasonable, in terms of scope, duration, geographic area, and otherwise, (b) that the protection afforded to the Company hereunder is necessary to protect its legitimate business interests, (c) that the agreement to observe such restrictions form a material part of the consideration for this Agreement and the Executive's employment by the Company and (d) that upon the termination of the Executive’s employment with the Company for any reason, he will be able to earn a livelihood without violating the foregoing restrictions. In the event that, notwithstanding the foregoing, any of the provisions of this Section 7 shall be held to be invalid or unenforceable, the remaining provisions thereof shall nevertheless continue to be valid and enforceable as though the invalid or unenforceable parts had not been included therein. In the event that any provision of this Section relating to the time period and/or the areas of restriction and/or related aspects shall be declared by a court of competent jurisdiction to exceed the maximum restrictiveness such court deems reasonable and enforceable, the time period and/or areas of restriction and/or related aspects deemed reasonable and enforceable by the court shall become and thereafter be the maximum restriction in such regard, and the restriction shall remain enforceable to the fullest extent deemed reasonable by such court.
 
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8.    EXECUTIVE’S REPRESENTATIONS AND WARRANTIES
 
8.1.    Other Agreements . The Executive hereby represents and warrants to the Company that the Executive is not a party to or bound by any employment agreement, noncompete agreement or confidentiality agreement with any other Person.
 
8.2.    Enforceability . The Executive hereby represents and warrants to the Company that upon the execution and delivery of this Agreement by the Company, this Agreement shall be the valid and binding obligation of the Executive, enforceable in accordance with its terms.
 
8.3.    No Breach; No Conflict of Interest . The Executive hereby represents and warrants to the Company that (a) the execution, delivery and performance of this Agreement by the Executive do not and shall not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which the Executive is a party or by which the Executive is bound and (b) the Executive is not, to the best of the Executive's knowledge and belief, involved in any situation that might create, or appear to create, a conflict of interest with loyalty to or duties for the Company.
 
8.4.    Notification of Materials or Documents from Other Employers . The Executive hereby represents and warrants to the Company that the Executive has not brought and will not bring to the Company or use in the performance of responsibilities at the Company any materials or documents of a former employer or client that are not generally available to the public, unless the Executive has obtained express written authorization from the former employer or client and the Company for their possession and use.
 
8.5.    Notification of Other Post-Employment Obligations . The Executive also understands that, as part of the Executive's employment with the Company, the Executive is not to breach any obligation of confidentiality that the Executive has to former employers or
 
clients, and agrees to honor all such obligations to former employers or clients during employment with the Company.
 
8.6.    Consultation with Counsel . The Executive hereby acknowledges and represents that the Executive has consulted with independent legal counsel regarding the Executive’s rights and obligations under this Agreement and that the Executive fully understands the terms and conditions contained herein.
 
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9.    ARBITRATION
 
9.1.    The Executive and the Company mutually consent to the resolution by arbitration of certain claims or controversies (collectively, " Claims ") arising out of or relating to the Executive's employment or termination of employment under this Agreement that either party may have against the other, including the Company’s officers, shareholders, directors, employees, or benefit plans, the benefit plans' sponsors, fiduciaries, administrators, or affiliates; and all successors and assigns of any of them, or agents in their capacity as such or otherwise. The Claims covered by this Agreement shall include claims for (a) wages or other compensation due; (b) breach of any contract or covenant (express or implied); tort claims; (c) discrimination (including but not limited to race, sex, religion, national origin, age, disability, citizenship, marital status, or any other basis protected by any applicable federal, state or local law); (d) payment of wages; (e) benefits (except where an employee benefit or pension plan specifies that its claims procedure shall use an arbitration procedure different from this one); and (f) violation of any federal, state, or local law, statute, regulation, or ordinance, or recognized under common law. The Claims not covered by this Agreement shall include claims (g) for workers' compensation or unemployment compensation benefits; (h) brought pursuant to Sections 6 or 10 of this Agreement and breach of duty of loyalty; and (i) unrelated to the Employee's employment with the Company.
 
9.2.    The arbitration shall be governed by the procedures of the American Arbitration Association (" AAA "), in accordance with its then-current Model Employment Arbitration Procedures and shall take place in the Washington-Metropolitan area.
 
9.3.    If the parties to this Agreement become parties to an arbitration proceeding or litigation arising from or relating to this Agreement, the non-prevailing party shall pay the reasonable attorneys’ fees and costs incurred by the prevailing party in such arbitration or litigation.
 
10.    GENERAL PROVISIONS
 
10.1.    Assignment .   The Company may assign this Agreement and its rights and obligations hereunder in whole, but not in part, to any Company or other entity with or into which the Company or may hereafter merge or consolidate or to which the Company may transfer all or substantially all of its assets, if in any such case said company or other entity shall by operation of law or expressly in writing assume all obligations of the Company hereunder as fully as if it had been originally made a party hereto, but may not otherwise assign this Agreement or its rights and obligations hereunder. The Executive may not assign or transfer this Agreement or any rights or obligations hereunder without the prior written consent of the Company. Notwithstanding such assignment, the Company shall remain a guarantor of the performance of all obligations owed by the Company to the Executive under this Agreement.
 
10.2.    Notice . For the purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by certified or registered mail, return receipt requested, postage prepaid, or Federal Express, signature required, if to the Company, addressed to its corporate headquarters at the time notice is given, "Attention Board of Directors"; if to the Executive, addressed to his home address as listed in the Company’s records at the time notice is given.
 
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10.3.    Amendment and Waiver . No provision of this Agreement may be amended or waived unless such amendment or waiver is in writing and signed by each of the parties hereto.
 
10.4.    Non-Waiver of Breach . No failure by either party to declare a default due to any breach of any obligation under this Agreement by the other, nor failure by either party to act quickly with regard thereto, shall be considered to be a waiver of any such obligation, or of any future breach.
 
10.5.    Severability . In the event that any provision or portion of this Agreement shall be determined to be invalid or unenforceable for any reason, the remaining provisions of this Agreement shall be unaffected thereby and shall remain in full force and effect.
 
10.6.    Governing Law . To the extent not preempted by Federal law, the validity and effect of this Agreement and the rights and obligations of the parties hereto shall be construed and determined in accordance with the law of the State of Maryland, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Maryland or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Maryland.
 
10.7.    Entire Agreement . This Agreement constitutes the entire agreement and understanding of the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings relating to such subject matter, whether oral or written, including without limitation any prior or existing employment agreement with the Company which shall be null and void and of no further force or effect.
 
10.8.    Binding Effect . This Agreement shall be binding upon and shall inure to the benefit of the transferees, successors and assigns of the Company, including without limitation any company with which the Company may merge or consolidate.
 
10.9.    Headings . Numbers and titles to Sections hereof are for information purposes only and, where inconsistent with the text, are to be disregarded.
 
10.10.    Survival . Section 1 and Sections 5 through 10 shall survive and continue in full force in accordance with their terms notwithstanding the expiration or termination of the Employment Period.
 
10.11.    No Strict Construction . The language used in this Agreement shall be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction shall be applied against any party.
 
10.12.    Counterparts . This Agreement may be executed in separate counterparts (including by means of facsimile), each of which is deemed to be an original and all of which taken together constitute one and the same agreement.
 
10.13.    Indemnification of the Executive. The Company shall, to the extent permitted by the Bylaws of the Company, in a manner as applied to other officers of the Company, indemnify, protect and hold the Executive harmless from and against any expenses, including reasonable attorneys' fees and expenses, claims, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with any proceeding arising out of, or related to, the Executive's employment by the Company or any of its Subsidiaries. The Company shall cause the Executive to be covered under directors and officers liability insurance policies in reasonable amounts in accordance with the Company's standard corporate policies.
 
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10.14.    Injunctive Relief. The Executive represents and acknowledges that, in light of the payments to be made by the Company to the Executive hereunder and for other good and valid reasons, as a result of the restrictions stated in the Assignment Agreement and the restrictions referenced in Sections 7 hereof, the Company and its affiliated companies would sustain irreparable harm and, therefore, in addition to any other remedies which the Company may have under this Agreement or otherwise, the Company shall be entitled to apply to any court of competent jurisdiction for an injunction restraining the Executive from committing or continuing any such violation of this Agreement, and the Executive shall not object to such application.
 

 
[SIGNATURES ON FOLLOWING PAGES]
 
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IN WITNESS WHEREOF, the parties hereto have caused this Executive Employment Agreement to be duly executed on the date and year first written above.
 

 
    THE COMPANY:  
     
   
FORTRESS AMERICA ACQUISITION CORPORATION
     
   
By:/s/ Harvey L Weiss  
   
Name: Harvey L. Weiss  
   
Title: Chairman  
     
     
    THE EXECUTIVE:    
     
   
By:/s/ Harvey L. Weiss  
   
Name: Harvey L. Weiss   
 
 
 
 
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EXHIBIT A

SEPARATION FROM EMPLOYMENT AGREEMENT AND RELEASE
 
1.   This agreement is between the Executive, Harvey L. Weiss, the Executive’s spouse, family, agents and attorneys) (jointly, the "Executive") and Fortress International Group, Inc. (the "Company"), its subsidiaries, affiliated entities, direct or indirect owners and its and their respective officers, directors, employees, agents, predecessors, successors, purchasers, assigns, representatives, fiduciaries, and insurers (jointly, the "Released Parties").
2.   If the Executive signs this agreement and does not revoke it, the Executive will receive the applicable severance payments and benefits set forth in Section 5 of the Executive’s Executive Employment Agreement, dated __________ _____, 2006 (the "Employment Agreement").
3.   The Executive, deeming this Agreement to be fair, reasonable, and equitable, and intending to be legally bound hereby, agrees to and hereby does, forever and irrevocably fully release and discharge the Released Parties from any and all grievances, liens, suits, judgments, claims, demands, debts, defenses, actions or causes of action, obligations, damages (whether compensatory, punitive or otherwise), and liabilities whatsoever which the Executive now has, has had, or may have, whether the same be known or unknown, vested or contingent, at law, in equity, or mixed, in any way arising out of or relating in any way to any matter, act, occurrence, or transaction before the date of this General Release Agreement, including but not limited to his employment with Company, the Executive's separation from Company and the Executive's employment agreement with the Company (collectively, "Claims"). This is a General Release. The Executive expressly acknowledges that this General Release includes, but is not limited to, the Executive's release of any tort and contract claims, arbitration claims, claims under any local, state or federal wage and hour law, wage collection law or labor relations law, and claims of age, race, sex, religion, disability, national origin, ancestry, citizenship, retaliation or any other claim of employment discrimination, under the Civil Rights Acts of 1964 and 1991 as amended (42 U.S.C. §§ 2000e et   seq .), the Age Discrimination In Employment Act (29 U.S.C. §§ 621 et seq .), the Americans With Disabilities Act (42 U.S.C. §§ 12101 et   seq .), the Rehabilitation Act of 1973 (29 U.S.C. §§ 701 et   seq .), the Family and Medical Leave Act (29 U.S.C. §§ 2601 et   seq .), the Fair Labor Standards Act (29 U.S.C. §§ 201 et   seq .), and any other law prohibiting employment discrimination or relating to employment. Also, the Executive understands that this General Release Agreement is not an admission of liability under any statute or otherwise by the Released Parties, and that the Released Parties do not admit but deny any violation of his legal rights, and that he shall not be regarded as a prevailing party for any purpose, including but not limited to, determining responsibility for or entitlement to attorneys’ fees, under any statute or otherwise. The Executive agrees that in the event the Executive brings a Claim in which the Executive seeks damages or other relief from any Released Party, or in the event the Executive seeks to recover against any Released Party in any Claim brought by a governmental agency on the Executive’s behalf, this Agreement shall serve as a complete defense to such Claims.
 
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4.   The claims and causes of action the Executive is releasing and waiving include, but are not limited to, any and all claims and causes of action that any Released Party:
·    has violated its personnel policies, handbooks, contracts of employment, or covenants of good faith and fair dealing between the Executive and the Company;
 
·    has discriminated against the Executive on the basis of age, race, color, sex (including sexual harassment), national origin, ancestry, disability, religion, sexual orientation, marital status, parental status, source of income, entitlement to benefits, any union activities or other protected category in violation of any local, state or federal law, constitution, ordinance, or regulation, including but not limited to: the Age Discrimination in Employment Act, as amended; Title VII of the Civil Rights Act of 1964, as amended; 42 U.S.C. § 1981, as amended; the Equal Pay Act; the Americans With Disabilities Act; the Family Medical Leave Act; the Employee Retirement Income Security Act; Section 510; and the National Labor Relations Act.
 
·    has violated any statute, public policy or common law (including but not limited to claims for retaliatory discharge; negligent hiring, retention or supervision; defamation; intentional or negligent infliction of emotional distress and/or mental anguish; intentional interference with contract; negligence; and/or detrimental reliance).
 
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5.   Excluded from this Agreement are any claims which cannot be waived by law. The Executive is waiving, however, the Executive’s right to any monetary recovery should any agency, such as the EEOC, pursue any claims on the Executive’s behalf.
6.   The Executive also agrees that the Executive has been paid for all hours worked, including any overtime bonus or other incentive compensation, has submitted all invoices and expense reports, and has   not suffered any on-the-job injury for which the Executive has not already filed a claim.
7.   The Executive agrees that every term of this Agreement, including, but not limited to, the fact that an agreement has been reached and the amount paid, shall be treated by the Executive as strictly confidential, and expressly covenants not to display, publish, disseminate, or disclose the terms of this Agreement to any person or entity other than the Executive’s immediate family, the Executive’s attorney(s) (for purposes of seeking advice concerning this agreement only) and the Employee’s accountant(s) (for purposes of seeking tax advice only), unless compelled to make disclosure by lawful court order or subpoena.
8.   The Executive and the Company have entered into an Assignment of Invention, Non-Disclosure, Non-Solicitation and Non-Competition Agreement ("NDA Agreement"). The Executive reaffirms his obligation to comply with all of the post termination obligations in the NDA Agreement.
 
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9.   The Executive also agrees that:
·    The Executive is entering into this agreement knowingly and voluntarily;
 
·    The Executive has been advised by the Company to consult an attorney;
 
·    The Executive has been given the right to take [21/45] days (the "Consideration Period") to consider this agreement; provided, however the Employee and the Company hereby agree that if there is a dispute as to the payment of wages such that the Executive is unable to make the representation set forth in Section 6 as to payment for hours worked (including any overtime bonus or other incentive compensation), the Consideration Period shall terminate on the later of the natural expiration of the Consideration Period or the date that is one day after the resolution of all claims regarding wages;
 
·    But for the Executive's execution of this agreement, the Executive would not otherwise be entitled to the payments described in paragraph 2;
 
·    if any part of this agreement is found to be illegal or invalid, the rest of the agreement will be enforceable; and
 
·    this agreement has been individually negotiated between the Executive and the Company and is not part of a group exit incentive or other group employment termination program. The Executive and the Company agree that the sole reason for the termination of the Executive’s employment is a business reorganization and reduction in force of the Company’s [INSERT DEPARTMENT OR JOB CLASSIFICATION] which is occurring on [INSERT DATE]. All individuals who are being terminated in the [INSERT DATE] reduction in force will be eligible for benefits based upon their execution of a release identical to this release. The Executive acknowledges by signing this Agreement that the Executive understands that the Executive is eligible for the benefits which the Executive will receive contingent upon the Executive executing this release, because the Executive was part of this reduction in force. As is more fully set forth in Attachment B, this reduction in force will affect [NUMBER AFFECTED] other executives on [DATE].
 
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10.   After the Executive signs this agreement, the Executive will have 7 days to revoke it. If the Executive wants to revoke it, the Executive should deliver a written revocation to __________ . If the Executive does not revoke it, the Executive will receive the payment described in Paragraph 2.
 
 
  EMPLOYEE:   COMPANY:    
     
    FORTRESS INTERNATIONAL GROUP, INC.  
     
  ____________________________  ______________________________ 
    [NAME AND TITLE]  
   
  Date: ___________________________    Date: ___________________________   
 
 
 
 
 
   
 
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CONSIDERATION PERIOD
 
I, Harvey L. Weiss understand that I have the right to take at least [21/45] days to consider whether to sign this Separation From Employment and Release Agreement, which I received on _________________, 2006. If I elect to sign this Agreement before [21/45] days have passed, I understand I am to sign and date below this paragraph to confirm that I knowingly and voluntarily agree to waive the [21/45] -day consideration period.
 
    ___________________ 
    Executive Signature  
     
    ___________________  
    Date  
 
 
 
 
 
 
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ATTACHMENT B

SCHEDULE TO SEPARATION FROM EMPLOYMENT AGREEMENT AND RELEASE
 
On [Date], the employment of the following individuals (identified by job title and age), who will the [sole] holders of their job title, will be terminated in a reduction in force:
 
Title
Age

 
The employment of the following individuals (identified by age), who are the [sole] holders of their job title, will not be terminated on [Date] in the reduction in force.
 
Title
Age
 

 
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EXHIBIT B
 
INVENTION ASSIGNMENT, NON-COMPETE
 
AND CONFIDENTIALITY AGREEMENT
 

The following confirms an Invention Assignment, Non-Compete and Confidentiality Agreement ("Agreement") between me and Fortress International Group, a Maryland corporation (the "Company," which term includes the Company’s Affiliates, subsidiaries and any assigns). The promises and commitments that I make in this Agreement are a material part of the Company’s consideration in my employment relationship with the Company.

1.              I understand and agree that my employment by the Company creates a duty of loyalty and a relationship of confidence and trust between me and the Company with respect to any information made known to me by the Company or by any client, customer or vendor of the Company or other person who submits information to the Company, or which may be learned by me during the period of my employment.
 
2.             I recognize that the Company is continuously engaged in activities that the Company regards as confidential, proprietary and/or legally protectable, which activities are at least in part intended to further the interests of the Company and to provide the Company with a competitive advantage. The Company possesses and will, in the future, continue to possess information that has been or will be created, discovered, developed or otherwise becomes known to the Company (including information created by, discovered or developed by, or made known to me) during the period of or arising out of my employment by the Company. I understand that various intellectual and other property rights have been assigned or otherwise conveyed to the Company. All information concerning the above described activities and information is collectively called "Proprietary Information" under this Agreement.
 
3.            By way of illustration, but not limitation, Proprietary Information includes: trade secrets, processes, formulas, data and know-how; software programs, improvements, and inventions; research and development plans, tools and techniques; new product introduction plans, specifications, requirements documents and strategies; manufacturing techniques, strategies and costs, expenses, supplier information and lists and distribution information; terms and conditions in contracts of all kinds; marketing plans, strategies and service; support strategies and procedures; development schedules; revenue forecasts; computer programs; copyrightable material, employee salaries, employee expertise, employee ability levels, training programs and procedures, copies of memos or presentations incorporating confidential information which I may have in my files (including those which I authored), patent applications and disclosures and customer lists.
 
4.            In consideration of my employment by the Company and the compensation received by me from the Company from time to time, I hereby agree as follows:
 
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(a)           All Proprietary Information shall be the sole property of the Company, and the Company shall be the sole owner of all patents, copyrights, trademarks and other rights related to Proprietary Information. I hereby assign to the Company any rights I may have or acquire in Proprietary Information. At all times, both during and after my employment by the Company, I will keep in confidence and trust all Proprietary Information, and I will not use or disclose any Proprietary Information or anything related to it without written consent of the Company, except as may be necessary in the ordinary course of performing my duties to the Company.
 
(b)          All documents, records, apparatus, equipment and other physical property, whether or not pertaining to Proprietary Information, furnished to me by the Company or produced by myself or others in connection with employment by the Company shall be and remain the sole property of the Company, shall be used by me solely for the benefit of the Company and shall be returned to the Company immediately as and when requested by the Company. Even if the Company does not so request, I shall return and deliver all such property to the Company upon termination of my employment by me or by the Company for any reason. I will not take with me any such property or any form of copy or reproduction of such property upon my termination.
 
(c)           I will promptly disclose to the Company, or any persons designated by it, all improvements, inventions, formulas, ideas, processes, techniques, know-how and data, whether or not patentable, made or conceived or reduced to practice or learned by me, either alone or jointly with others, during the period of my employment (all said improvements, inventions, formulas, ideas, processes, techniques, know-how and data shall be hereinafter collectively call "Inventions").
 
(d)           I agree that all Inventions that I develop or have developed (in whole or in part, either alone or jointly with others) and (i) use or have used equipment, supplies, facilities or trade secret information of the Company, or (ii) use or have used the hours for which I am to be or was compensated by the Company, or (iii) which relate to the business of the Company or to its actual or demonstrably anticipated research and development or (iv) which result, in whole or in part, from work performed by me for the Company shall be the sole property of the Company and its assigns, and the Company and its assigns shall be the sole owner of all patents, copyrights and other rights in connection therewith. I hereby assign to the Company any rights I may have or acquire in such Inventions. I further agree as to all such inventions and improvements to assist the Company in every proper way (but at the Company’s expense) to obtain and from time to time enforce patents, copyrights or other rights on said inventions and improvements in any and all countries, and to that end I will execute all documents in use for applying for and obtaining such patents and copyrights thereon and enforcing same, as the Company may desire, together with any assignments thereof to the Company or persons designated by it. My obligation to assist the Company in obtaining and enforcing patents, copyrights or other rights for such inventions and improvements in any and all countries shall continue beyond the termination of my employment, but the Company shall compensate me at a reasonable rate after such termination for time actually spent by me at the Company’s request on such assistance.
 
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(e)            In the event that the Company is unable for any reason whatsoever to secure my signature to any lawful and necessary document required to apply for or execute any patent, copyright or other applications with respect to such inventions and improvements (including renewals, extensions, continuations, divisions or continuations in part thereof), I hereby irrevocably designate and appoint the Company and its authorized officers and agents, as my agents and attorneys-in-fact, this power of attorney being coupled with an interest, to act for and in my behalf and instead of me, to execute and file any such application and to do all other lawfully permitted acts to further the prosecution and issuance of patents, copyrights or other rights thereon with the same legal force and effect as if executed by me.
 
(f)            As a matter of record, on Attachment A , I have attached a complete list of all inventions or improvements relevant to the subject matter of my employment by the Company which have been made or conceived or first reduced to practice by me alone or jointly with others prior to my employment with the Company that I desire to remove from the operation of this Agreement, and I covenant that such list is complete. If no such list is signed by me and attached to this Agreement, I represent and warrant that I have no such inventions or improvements at the time of signing this Agreement, and I agree that I will make no claim against the Company with respect to any such inventions or ideas.
 
(g)           I represent that my performance of all the terms of this Agreement will not breach any agreement to keep in confidence proprietary information acquired by me in confidence or in trust prior to my employment by the Company. I have not entered into, and I agree I will not enter into, any agreement either written or oral in conflict with this Agreement.
 
(h)           I acknowledge that the Company from time to time may be involved in government projects of a classified nature. I further acknowledge that the Company from time to time may have agreements with other persons or governmental agencies which impose obligations or restrictions on the Company regarding inventions made during the course of work thereunder or regarding the confidential nature of such work or information disclosed in connection therewith. I agree to be bound by all such obligations and restrictions and to take all action necessary to discharge the obligations of the Company thereunder.
 
(i)             I represent and warrant that execution of this Agreement, my employment with the Company and my performance of my proposed duties to the Company in the development of its business have not and will not violate any obligations which I may have to any former employer.
 
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(j)
I agree that at no time during my employment by the Company or thereafter shall I make, or cause or assist any other person to make, any statement or other communication to any third party which impugns or attacks, or is otherwise critical of, the reputation, business or character of the Company or any of its Affiliates or any of their respective directors, officers or employees.
 
5.            This Agreement shall be effective as of the first day of my employment by the Company.
 
6.             This Agreement may not be changed, modified, released, discharged, abandoned or otherwise amended, in whole or in part, except by an instrument in writing, signed by myself and a majority of the members of the Board. I agree that any subsequent change or changes in my duties, salary or compensation shall not affect the validity or scope of this Agreement.
 
7.             I acknowledge receipt of this Agreement and agree that with respect to the subject matter hereof it is my final, complete and exclusive agreement with the Company, superseding any previous oral or written representations, understanding or agreements with the Company or any officer or representative with respect to the subject matter herein.
 
8 .            In the event that any paragraph or provision of this Agreement shall be held to be illegal or unenforceable, such paragraph or provision shall be modified to the extent necessary to give effect to the intent of the parties or, if necessary, severed from this Agreement and the entire Agreement shall not fail on account thereof, but shall otherwise remain in full force and effect.
 
9.             This Agreement shall be construed in accordance with the laws of the State of Maryland without regard to its choice of law principles.
 
10.           This Agreement shall be binding upon me, my heirs, executors, assigns, and administrators and shall inure to the benefit of the Company, its successors and assigns.
 
I acknowledge that the foregoing restrictions contained in Section 4 are reasonable in all respects including the scope, duration and geographic limitations. I agree that the restrictions are an appropriate means of protecting the Company’s legitimate business interests, and no greater than necessary to protect the Company’s interests. I acknowledge that these restrictions will not unreasonably interfere with my ability to make a living.


Dated: __________ _____, 2006

    _______________________ 
    Executive Signature  
    Harvey L. Weiss  
 
 
 

Accepted and Agreed to:

Fortress International Group, Inc.


By: _________________________    

Name:

Title:
Date: ________________________
 
         
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EXECUTIVE CONSULTING AGREEMENT
 

EXECUTIVE CONSULTING AGREEMENT, dated as of January 19, 2007 (this “ Agreement ”), between WASHINGTON CAPITAL ADVISORS, INC. (“ Consultant ”) and FORTRESS AMERICA ACQUISITION CORPORATION, a Delaware corporation (the “ Company ”).
 
RECITALS
 
WHEREAS, by the terms of a Second Amended and Restated Membership Interest Purchase Agreement (the “ Purchase Agreement ”) dated July 31, 2006, by and among the Company, Thomas P. Rosato (“ Rosato ”), Gerard Gallagher (“ Gallagher ”), VTC, LLC (“ VTC ”) and Vortech, LLC (“ Vortech ”), the Company has agreed to purchase from Rosato and Gallagher all of the outstanding membership interests of VTC and Vortech.
 
WHEREAS, the Company desires to obtain financial, acquisition, strategic, business and consulting services from Consultant with respect to the management of the Company and future acquisitions the Company may wish to undertake; and
 
WHEREAS, Consultant is in the business of providing such services and is willing to provide such services to the Company in accordance with the terms and conditions of this Agreement.
 
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements set forth in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Consultant and the Company agree as follows:
 
AGREEMENT
 
Section 1.   Engagement . Upon the terms and subject to the conditions set forth in this Agreement, the Company retains Consultant as a consultant to provide analysis, advice and other financial, strategic, business, acquisition and consulting services including, but not limited to, the identification and sourcing of capital to meet the needs of the Company (the “ Services ”).
 
Section 2.   Consultant’s Duties and Obligations . Consultant agrees, during the term of this Agreement, to provide the Services in a professional manner and to provide such other consulting services as may be reasonably requested (upon reasonable prior notice) from time to time by the Company in accordance with this Agreement, including, without limitation, providing the services of representatives of Consultant.
 
Section 3.   Term .
 
(a)   Expressly conditioned upon the closing (the “ Closing ”) under the Purchase Agreement and effective as of the date of the Closing (the “ Closing Date ”), the Company hereby retains the Consultant and the Consultant hereby accepts engagement as a consultant and agrees to render services to the Company, on the terms and conditions set forth in this Agreement for the period (the " Consulting Period ") beginning on the Closing Date and ending when such period is terminated pursuant to the terms hereof. Unless earlier terminated by either the Company or the Consultant as hereinafter provided, the Consulting Period shall continue through the third (3rd) anniversary of the Closing Date (" Expiration Date "); provided, however, that if this Agreement is renewed pursuant to Section 2.1(b) below, then the “Expiration Date” for the then current “Renewal Term” (as hereinafter defined) shall be the date that is last day of the one year period of that Renewal Term). Notwithstanding anything to the contrary continued in this Section 2.1(a), if the Closing under the Purchase Agreement does not occur, this Agreement shall be null and void and of no force and effect.
 

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(b)   This Agreement shall be automatically renewed for an additional one year period commencing at the expiration of the Initial Term or any subsequent renewal term (each, a " Renewal Term ") unless the Company provides written notice of termination to the Consultant not less than sixty (60) days prior to the Expiration Date. Notwithstanding the foregoing or anything else in this Agreement to the contrary, the Consulting Period shall immediately terminate prior to any Expiration Date (i) upon termination by Consultant for a “Good Reason” (as hereinafter defined); (ii) upon termination by the Company for “Cause” (as hereinafter defined); (iii) by mutual agreement of Consultant or the Company; and (iv) in all other circumstances, thirty (30) days' prior written notice is required by either party to the other to terminate this Agreement.
 
Section 4.   Compensation; Expenses .
 
(a)   Base Fee . As consideration for the provision of the Services, the Company agrees to pay or to cause its Subsidiaries to pay to Consultant, during the term of this Agreement, the following fees:
 
(i)   During the Consulting Period, the Company shall pay the Consultant a fee of Two Hundred Thousand Dollars ($200,000.00) per year ("Base Fee") paid in approximately equal installments bi-weekly. The Company will review the Base Fee on December 31 of each year of the Consulting Period in order to determine what Base Fee adjustments, if any, shall be made, subject to an annual minimum increase of five percent (5%), but in no event may the Base Fee be reduced below that paid in the preceding year.
 
(ii)   For calendar year 2006 (ending on or about December 31, 2006) and for each other calendar year that begins during the Consulting Period (each such calendar year, a "Bonus Year"), the Consultant shall be eligible to receive a bonus in an amount and on such terms as are established by the Company's Board up to fifty percent (50%) of the Base Fee (each, a "Bonus") in accordance with the bonus plan or formula applicable to the Consultant. The 2006 Bonus will be prorated to reflect that the 2006 Bonus Year is a partial year commencing on the Closing Date and ending on December 31, 2006. In addition, Consultant shall be eligible for any other bonus as the Board of Directors may determine in its sole discretion. Any Bonus for an applicable calendar year, or portion thereof, shall be paid to the Consultant no later than the conclusion of the first calendar quarter following each calendar year.
 
(b)   Referral Fee . If, during the term of this Agreement, Consultant identifies a potential new client for the Company (other than the federal government, or any agency or subdivision thereof), it shall promptly notify the Company in writing specifying the name of the target, the extent of its contact and the date upon which it has identified the potential client. Upon receipt of such notification, the Company will promptly acknowledge receipt of the notification and either (i) confirm to Consultant that it has identified a potential new client (each an “ Acknowledged New Target ”), or (ii) if the Company has independently of the Consultant already identified such potential client, it will advise Consultant and give it the date of the Company's prior contact and the nature and extent thereof. As to each Acknowledged New Target, the Consultant will cooperate with the Company in broadening contact and establishing a dialogue. Any contracts that are entered into between the Company and an Acknowledged New Target during (i) the term of this Agreement, or (ii) within six (6) months after the Expiration Date, or if sooner terminated, the Termination Date shall hereinafter be referred to individually as a “ Referred Contract ” and collectively as the “ Referred Contracts .” Contracts entered into with an Acknowledged New Target more than six (6) months after the Expiration Date (or Termination Date, as applicable) shall not be deemed to be Referred Contracts. The Consultant shall not identify potential clients on a blanket basis, but shall only identify clients with which he has made specific contact and which appear to be viable prospects for new business.  
 

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(i)   For each Referred Contract the Company will pay Consultant a referral fee equal to five percent (5%) of the “Gross Profits” (hereinafter defined) earned by the Company in each fiscal year (for each Referred Contract the “ Referral Fee ” and for all of the Referred Contracts the “ Referral Fees ”).
 
(ii)   For purposes of this Section 3.6, the following terms shall have the following meanings:
 
(A)   Gross Profits ” with respect to a Referred Contract shall mean the “Gross Revenues” with respect to that Referred Contract (as defined below) less Cost of Goods/Services Sold with respect to that Referred Contract.
 
(B)   Gross Revenues ” with respect to any Referred Contract shall mean all revenue derived by the Company under that Referred Contract from the rendering of services and the sales of goods.
 
(C)   Cost of Goods/Serviced Sold ” shall mean with respect to each Referred Contract the direct costs of the Company incurred by the Company in connection with generating the Gross Revenues which costs shall include, but not be limited to (1) the labor and expense costs of the Company’s employees and consultants (including allocable administrative costs); (2) direct vendor or supplier costs and other costs of goods, used or incorporated in or otherwise delivered to the customer under the Referred Contract (including shipping costs) and (3) the costs of services rendered by third-party contractors.
 
(iii)   The determination of Gross Profits, Gross Revenues and Cost of Goods/Services Sold with respect to each Referred Contract shall be made by the Company’s senior financial Consultant using generally accepted accounting principles applied on the accrual basis of accounting and a basis consistent with the manner in which the Company’s books and records are maintained.
 
(iv)   The Referral Fee due with respect to each Referred Contract shall be calculated annually, based on the Company’s fiscal year and in connection with the preparation of the Company’s audited financials. Not later than ten (10) days after the release of the Company’s audited financials for the immediately preceding fiscal year the Company’s senior financial Consultant shall provide Consultant with a statement (each “ Referral Fee Statement ”) setting forth the calculation of the Referral Fees attributable to the Company’s immediately preceding fiscal year in such reasonable detail as to permit Consultant to review and confirm the accuracy of such calculations. The Company shall also provide Consultant with reasonable access, subject to appropriate confidentiality restrictions, to books and records appropriate to enable Seller to review and verify such calculations. Consultant shall have fifteen (15) days following delivery of a Referral Fee Statement (each a “ Disagreement Notice Period ”) to disagree with Referral Fee Statement by written notice to the Company setting forth in reasonable detail the amount and nature of the disagreement (each a “ Notice of Disagreement ”). If the Company does not receive a Notice of Disagreement from the Consultant within the Disagreement Notice Period, the Consultant shall be conclusively presumed to agree with the Referral Fee Statement and the Company shall promptly pay to the Consultant the Referral Fees shown to be due on the Referral Fee Statement. If the Company receives a Notice of Disagreement from the Consultant within the Disagreement Notice Period and if the Company and the Consultant are unable to mutually agree upon a settlement of the disagreement within thirty (30) days after the delivery of the Notice of Disagreement to the Company, then the dispute shall be resolved pursuant to Section 9.
 

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(c)   Expenses . The Company shall reimburse Consultant for all reasonable out-of-pocket expenses (including, without limitation, travel and lodging) incurred by Consultant, its managers, partners and other individuals whose compensation is reflected as compensation expense on Consultant’s financial statements in connection with providing the Services hereunder.
 
(d)   Late Payment . Any overdue fees payable by the Company under this Paragraph 4 shall accrue interest at the rate of [__%] per annum, compounded monthly.
 
Section 5.   Termination .
 
(a)   Termination For Cause or By the Consultant . If the Consulting Period is terminated (i) by the Company for “Cause” (as hereinafter defined); or (ii) by the Consultant (other than for a Good Reason); then the Consultant shall only be entitled to receive (A) the Base Fee and the reimbursement of any applicable expenses pursuant to Paragraph 4 through the date of termination (the “Termination Date”) and (B) the Referral Fees as and when payable pursuant to the Paragraph 4(b); provided that the Expiration Date for purposes of calculating the Referred Contracts and the Referral Fees shall be the Termination Date rather than the Expiration Date. For purposes of this Agreement the terms “Cause” and “Good Reason” and “Change in Control” shall have the following meanings.
 
(i)   Termination of the Consultants engagement under this Agreement for "Cause" shall mean any of the following:
 
(A)   any act that would constitute a material violation of this Agreement or Company’s material written policies provided that the Company specifically terminates the Consultant’s engagement for Cause hereunder within 120 calendar days from the date the Company has actual notice of such; or
 
(B)   intentionally engaging in conduct materially and demonstrably injurious to the Company provided that the Company specifically terminates the Consultant’s engagement for Cause hereunder within 120 calendar days from the date the Company has actual notice of such.
 

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A termination for Cause after a Change in Control shall be based only on events occurring after such Change in Control; provided, however, the foregoing limitation shall not apply to an event constituting Cause which was not discovered by the Company prior to a Change in Control. Cause shall be determined in good faith by the affirmative vote of a majority of the whole Board of Directors (excluding any board member that may be affiliated with the Consultant).
 
(ii)   " Change in Control of the Company " means (A) a sale, transfer or exclusive licensing by the Company of all or substantially all of the assets of the Company and its subsidiaries on a consolidated basis (measured by either book value in accordance with United States generally accepted accounting principles consistently applied or fair market value determined in the reasonable good faith judgment of the Board) in any transaction or series of transactions (other than sales in the ordinary course of business); (B) any sale, transfer or issuance or series of sales, transfers and/or issuances of shares of the Company's capital stock by the Company or any holders thereof which results in any Person or Persons, other than the holders of Company’s capital stock as of the date hereof, owning capital stock of the Company possessing the voting power (under ordinary circumstances) to elect a majority of the Board of Directors; (C) the stockholders of the Company approve a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 50% of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or (D) the stockholders of the Corporation approve a plan of complete liquidation of the Company.
 
(iii)   Good Reason " shall mean termination by the Consultant due to: (a) the failure of the Company to pay any installment of the Base Fee or Referral Fee when such installment is due pursuant to this Agreement, which failure is not cured within fifteen (15) days; or (b) any other breach or breaches of this Agreement by the Company, which breaches are, singularly or in the aggregate, material, and which are not cured within thirty (30) days of written notice of such breach or breaches to the Company by the Consultant.
 
(b)   Termination by the Company Other Than Cause or by the Consultant for a Good Reason . In addition to the payment to the Consultant of the Base Fee, the Referral Fees and the reimbursement of any applicable expenses pursuant to Section 4(c) through the Date of Termination, if (i) the Consulting Period is terminated (A) by the Company for reasons other than Cause, or (B) by the Consultant for a Good Reason, or (C) in accordance with the terms of Section 3(b) hereof (provided the Company provides the requisite notice to the Consultant to terminate prior to any Expiration Date); and (ii) the Consultant executes a general release in the form attached hereto as Exhibit A (the " Release ") on or before the effective Date of Termination; and (iii) the Consultant has not breached the terms of the “Assignment Agreement” (as defined below); then the Company shall pay the Consultant an amount equal to the Base Fee (at the rate in effect at the Date of Termination) for a period commencing on the Date of Termination and on the Expiration Date; provided, however, that if the Termination Date is within twelve (12) months of the Expiration Date, then the Company shall pay the Consultant an amount equal to the Base Fee (at the rate effective as of the Termination Date), for a period commencing on the Termination Date and ending on the first (1st) anniversary of the Termination Date. Any payment under this Section 5(b) shall be made over time as though the Consultant continued to be retained by the Company.
 

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(c)   Cooperation with Company After Termination of Engagement . For a period of six (6) months following termination of the Consulting Period for any reason, as such period may be extended with the consent of Consultant, the Consultant shall fully cooperate with the Company in all matters relating to the winding up of pending work on behalf of the Company including, but not limited to, any litigation in which the Company is involved, and the orderly transfer of any pending work to the Company as may be designated by the Company. The Consultant shall be compensated for any time spent pursuant to this Section 5(c) at the specific request of the Company at a per diem amount based upon the Base Fee at the Date of Termination.
 
(d)   Termination by Mutual Consent . Notwithstanding any of the foregoing provisions of this Section 5, if at any time during the course of this Agreement the parties by mutual consent decide to terminate it, they shall do so by separate agreement setting forth the terms and conditions of such termination.
 
Section 6.   Invention, Assignment, Non-Compete and Confidentiality Agreement
 
The parties hereto have entered into an Invention, Assignment, and Confidentiality Agreement attached hereto as Exhibit B (the "Assignment Agreement"), which may be amended by the parties from time to time pursuant to the terms thereof. The provisions of the Assignment Agreement are intended by the parties to survive and shall survive termination or expiration of the Consulting Period and this Agreement.
 
Section 7.   Non-Solicitation Customers or Employees; Non-Competition
 
(a)   Covenant Not-to-Solicit Customers . Subject to Section 7(d) below, during Consultant’s engagement with the Company through the applicable “Restrictive Period” (as hereinafter defined), the Consultant shall not directly or indirectly, individually or on behalf of any other person or entity, whether as principal, agent, stockholder, employee, consultant, representative or in any other capacity, contact any person or entity, which:
 
(i)   is a customer or client of the Company or any of its subsidiaries as of the Termination Date; or
 
(ii)   has been a customer or client of the Company or any of its subsidiaries at any time within two (2) years prior to the Termination Date; or
 
(iii)   is a prospective customer or client that the Company or any of its subsidiaries is actively soliciting as of the Termination Date (for the purpose of selling products or services similar to any of the products and services offered for sale by the Company as of the Termination Date).
 
(b)   Covenant Not-to-Solicit Employees . Subject to Section 7(d) below, during Consultant’s engagement with the Company and from the Termination Date through the applicable Restrictive Period , Consultant shall not directly or indirectly, individually or on behalf of any other person or entity, whether as principal, agent, stockholder, employee, consultant, representative or in any other capacity:
 

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(i)   recruit, solicit or encourage any person to leave the employ of the Company or any of its subsidiaries; or
 
(ii)   hire any employee of the Company or any of its subsidiaries as a regular employee, consultant, independent contractor or otherwise.
 
(c)   Non-Competition . Consultant recognizes and acknowledges the competitive and proprietary nature of the business operations of the Company and its subsidiaries. Subject to Section 7(d) below, during the Consultant’s engagement with the Company and for the applicable Restrictive Period, Consultant shall not, without the prior written consent of the Company, for itself or on behalf of any other person or entity, directly or indirectly, whether as principal, agent, stockholder, employee, consultant, representative or in any other capacity, own, manage, operate or control, or be concerned, connected or employed by, or otherwise associate in any manner with, engage in or have a financial interest in any business that competes with the business operations of the Company or any of its subsidiaries, except that nothing contained herein shall preclude the Consultant from purchasing or owning stock in any such competitive business if such stock is publicly traded, and provided that his holdings do not exceed one percent (1%) of the issued and outstanding capital stock of such business. Notwithstanding, anything to the contrary contained in this Section 7, including, but not limited to this Section 7(c), nothing in this Agreement shall preclude the Consultant, or its employee and owner, C. Thomas McMillan from owning, managing, operating, controlling, or otherwise being involved or employed directly, or indirectly by CyberLynk Network, Inc.
 
(d)   Reduction and Extension of Restrictions .
 
(i)   Notwithstanding contained in Sections 7(a), 7(b) and 7(c) above the provisions of Sections Sections 7(a), 7(b) and 7(c) above shall only apply to terminations made pursuant to Section 5(a) and shall not apply with respect to terminations made pursuant to Section 5(b).
 
(ii)   The Company at Company’s option, by written notice delivered to Consultant not less than thirty (30) days prior to the expiration of the then current, applicable Restrictive Period, may extend the Restrictive Period (as previously extended under this Section 7.4(b)) for an additional twelve (12) months, provided that Company pays to Consultant during the extended Restrictive Period an amount equal to the Consultant’s Base Fee (at the rate effective as of the applicable Termination Date and over time and in the manner Consultant would have received these payments had it continued to be engaged by the Company.
 
(e)   Definition of Restriction Period .
 
For purposes of this Agreement the term “Restrictive Period” shall have the following meanings.
 
(i)   If Consultant’s engagement under this Agreement is terminated prior to the third (3rd) anniversary of the Closing Date, then the Restrictive Period shall be the period from the Termination Date through the third anniversary of the Closing Date (or if the Termination Date is within twelve (12) months of the third anniversary of the Closing Date, then for a period of one (1) year measured from the Termination Date through the first anniversary of the Termination Date).
 

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(ii)   Subject to Section 7(d) above, if Consultant’s engagement is terminated after the third anniversary of the Closing Date, then the Restrictive Period shall be the twelve month period measured from the Termination Date through the first anniversary of the Termination Date.
 
(f)   Non-Disparagement . The Consultant agrees not to make any public statement, or engage in any conduct, that is disparaging to the Company, or any of its employees, officers, directors or shareholders, including, but not limited to, any statement that disparages the products, services, finances, financial condition, capabilities or other aspects of the business of the Company. Notwithstanding any term to the contrary herein, the Consultant and its employees shall not be in breach of this Section 7 for the making of any truthful statements under oath.
 
(g)   Reasonableness of Restrictions . The Consultant has carefully read and considered the provisions of this Section 7, and, having done so, agrees (i) that the restrictions set forth herein are reasonable, in terms of scope, duration, geographic area, and otherwise, (ii) that the protection afforded to the Company hereunder is necessary to protect its legitimate business interests, (iii) that the agreement to observe such restrictions form a material part of the consideration for this Agreement and the Consultant’s engagement by the Company and (iv) that upon the termination of the Consultant’s engagement with the Company for any reason, Consultant will be able to continue in its business without violating the foregoing restrictions. In the event that, notwithstanding the foregoing, any of the provisions of this Section 7 shall be held to be invalid or unenforceable, the remaining provisions thereof shall nevertheless continue to be valid and enforceable as though the invalid or unenforceable parts had not been included therein. In the event that any provision of this Section relating to the time period and/or the areas of restriction and/or related aspects shall be declared by a court of competent jurisdiction to exceed the maximum restrictiveness such court deems reasonable and enforceable, the time period and/or areas of restriction and/or related aspects deemed reasonable and enforceable by the court shall become and thereafter be the maximum restriction in such regard, and the restriction shall remain enforceable to the fullest extent deemed reasonable by such court.
 
Section 8.   Consultant’s Representations and Warranties
 
(a)   Enforceability . Consultant hereby represents and warrants to the Company that upon the execution and delivery of this Agreement by the Company, this Agreement shall be the valid and binding obligation of Consultant, enforceable in accordance with its terms.
 
(b)   No Breach; No Conflict of Interest . Consultant hereby represents and warrants to the Company that (i) the execution, delivery and performance of this Agreement by Consultant do not and shall not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which Consultant is a party or by which Consultant is bound and (ii) Consultant is not, to the best of Consultant's knowledge and belief, involved in any situation that might create, or appear to create, a conflict of interest with loyalty to or duties for the Company.
 
(c)   Notification of Materials or Documents from Other Customers and Clients . Consultant hereby represents and warrants to the Company that Consultant has not brought and will not bring to the Company or use in the performance of responsibilities at the Company any materials or documents of a former customer or client that are not generally available to the public, unless Consultant has obtained express written authorization from the former customer or client and the Company for their possession and use.
 

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Section 9.   Arbitration
 
(a)   Consultant and the Company mutually consent to the resolution by arbitration of certain claims or controversies (collectively, " Claims ") arising out of or relating to Consultant's engagement or termination of engagement under this Agreement that either party may have against the other, including the Company’s officers, shareholders, directors, employees, or benefit plans, the benefit plans' sponsors, fiduciaries, administrators, or affiliates; and all successors and assigns of any of them, or agents in their capacity as such or otherwise. The Claims covered by this Agreement shall include claims for (i) wages or other compensation due; (ii) breach of any contract or covenant (express or implied); tort claims; (iii) discrimination (including but not limited to race, sex, religion, national origin, age, disability, citizenship, marital status, or any other basis protected by any applicable federal, state or local law); (iv) payment of wages; (v) benefits (except where an employee benefit or pension plan specifies that its claims procedure shall use an arbitration procedure different from this one); and (vi) violation of any federal, state, or local law, statute, regulation, or ordinance, or recognized under common law.
 
(b)   The arbitration shall be governed by the procedures of the American Arbitration Association (" AAA "), in accordance with its then-current Model Employment Arbitration Procedures and shall take place in the Washington-Metropolitan area.
 
(c)   If the parties to this Agreement become parties to an arbitration proceeding or litigation arising from or relating to this Agreement, the non-prevailing party shall pay the reasonable attorneys’ fees and costs incurred by the prevailing party in such arbitration or litigation.
 
Section 10.   Indemnification .
 
(a)   The Company agrees to indemnify and hold harmless Consultant and Consultant Personnel against and from any and all claims, liabilities, losses, costs, damages, expenses, judgments, fines and amounts paid in settlement (including reasonable attorneys’ fees), arising from any source, including, without limitation, from any threatened, pending or completed actions or lawsuits whether civil, criminal, administrative or investigative, by or in the right of the Company to procure a judgment in its favor, arising from the performance of the Services, except insofar as such may arise solely from the indemnified party’s gross negligence or intentional wrongdoing (including intentional violation of applicable national security requirements). The Company shall be entitled to direct the defense of any claim for which Consultant alleges that it is obligated to provide indemnification, at the Company’s expense, but such defense shall be conducted by legal counsel mutually agreed to by the Company and Consultant. The Company agrees to keep Consultant informed on a timely basis of the status of all legal proceedings relating to this indemnification and shall provide copies of all documents relating to the legal proceedings to Consultant or, at Consultant’s request, its legal counsel. The Company further agrees that it will not settle, compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding without the prior written consent of Consultant. Consultant agrees to promptly notify the Company of any proceeding or investigation which may be the subject of an indemnity demand hereunder. The failure to provide such prompt notice shall not affect the Company’s obligation to provide indemnity hereunder except to the extent that a court of competent jurisdiction shall have determined by a final judgment that such failure primarily and directly adversely prejudiced in a material respect the defense of the claim by the Company.
 

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(b)   Expenses incurred in defending any threatened or pending civil, criminal, administrative or investigative action, suit or proceeding shall be paid by the Company in advance of the final disposition of such action, suit or proceeding, upon receipt of an undertaking by or on behalf of the indemnified party to repay such amount if it is ultimately determined, in a final non-appealable judgment of a court of competent jurisdiction, that the indemnified party is not entitled to be indemnified against such expenses solely as a result of the indemnified party’s gross negligence or intentional wrongdoing. This undertaking by the indemnified party shall be an unqualified general undertaking, and no security for such undertaking will be required.
 
(c)   All of Consultant’s and the other indemnified parties’ rights and obligations under this Section 10 will continue even after this Agreement has been terminated for any reason.
 
Section 11.   Injunctive Relief . The Consultant represents and acknowledges that, in light of the payments to be made by the Company to the Consultant hereunder and for other good and valid reasons, as a result of the restrictions stated in the Assignment Agreement and the Restrictions in Section 7 above, the Company and its affiliated companies would sustain irreparable harm and, therefore, in addition to any other remedies which the Company may have under this Agreement or otherwise, the Company shall be entitled to apply to any court of competent jurisdiction for an injunction restraining the Consultant from committing or continuing any such violation of this Agreement, and the Consultant shall not object to such application.
 
Section 12.   Nature of Consultant’s Undertaking: No Joint Venture or Partnership . Consultant shall act as an independent contractor and shall have complete charge of its personnel engaged in the performance of the Services. The Company and Consultant hereby agree that neither Consultant’s entering into this Agreement nor Consultant’s provision of Services to the Company and its Subsidiaries shall be construed to have created either a joint venture or a partnership for the purpose of providing such Services.
 
Section 13.   Notices . All notices, requests and other communications hereunder must be in writing and will be deemed to have been duly given only if delivered personally, sent postage prepaid, by registered, certified or express mail or reputable overnight courier service to the parties at the following addresses:
 
if to the Company, to:
 
Fortress America Acquisition Corporation
4100 North Fairfax Drive
Suite 1150
Arlington, Virginia 22203
Attention:   Harvey L. Weiss, Chairman of the Board
 

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with a copy to:
 
Squire, Sanders & Dempsey L.L.P.
8000 Towers Crescent Drive, Suite 1400
Tysons Corner, VA 22182
Attn: James J. Maiwurm
Fax: (703) 720-7801
 
if to Consultant, to:
 
Washington Capital Advisors, Inc.
4100 North Fairfax Drive
Suite 1150
Arlington, Virginia 22203
Attn: C. Thomas McMillen
Fax: (703) 528 0956
 
All such notices, requests and other communications will (a) if delivered personally to the address as provided in this Section 13 be deemed given upon delivery, (b) if delivered by mail in the manner described above to the address as provided in this Section 13 , be deemed given upon receipt, and (c) if delivered by overnight express mail or reputable overnight courier service, be deemed given one Business Day after mailing (in each case regardless of whether such notice is received by any other Person to whom a copy of such notice, request or other communication is to be delivered pursuant to this Section 13 ). Any party from time to time may change its address or other information for the purpose of notices to that party by giving notice specifying such change to the other party hereto
 
Section 14.   Agreement . This Agreement (a) contains the complete and entire understanding and agreement of Consultant and the Company respecting the subject matter hereof; (b) supersedes and cancels all other understandings or agreements, oral or written, respecting the subject matter hereof; and (c) may not be modified except by an instrument in writing executed by Consultant and the Company.
 
Section 15.   Waiver . No failure or delay on the part of any party hereto in exercising any rights, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy preclude any other or further exercise thereof or exercise of any other right, power or remedy. The remedies provided herein are cumulative and are not exclusive of any remedies that may be available to such party at law, in equity or otherwise.

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Section 16.   Successors, Assignment, Third Party Beneficiaries . Consultant and the Company may not assign their respective rights or obligations under this Agreement without the express written consent of the other party. This Agreement and all the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. No person other than the parties hereto (and other than the indemnified parties specified in Section 10 ) is intended to be a beneficiary of this Agreement.
 
Section 17.   Severability . If any provision of this Agreement is determined to be invalid or unenforceable in whole, or in part, such invalidity or unenforceability shall attach only to such provision or part of such provision and all other provisions of this Agreement shall continue in full force and effect.
 
Section 18.   Section Headings . All section headings herein have been inserted for convenience of reference only and shall in no way modify or restrict any of the terms or provisions hereof.
 
Section 19.   Governing Law . This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of Maryland, without regard to conflicts of law principles.
 
IN WITNESS WHEREOF, the Company and Consultant have caused this Agreement to be duly executed and delivered on the date and year first above written.

 
 
FORTRESS AMERICA ACQUISITION CORPORATION
     
     
     
 
By:
/s/ Harvey L. Weiss
   
Name: Harvey L. Weiss
   
Title: Chief Executive Officer
     
     
 
WASHINGTON CAPITAL ADVISORS, INC.
     
     
 
s/s C. Thomas McMillen, CEO


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EXHIBIT A

RELEASE
 
1.   This agreement is between the Washington Capital Advisors, Inc. (“Consultant”) and Fortress International Group, Inc., formerly Fortress America Acquisition Corporation, a Delaware corporation (“FIG”).
 
2.   The Consultant, deeming this Agreement to be fair, reasonable, and equitable, and intending to be legally bound hereby, agrees to and hereby does, forever and irrevocably fully release and discharge Company, its subsidiaries, affiliated entities, direct or indirect owners and its and their respective officers, directors, employees, agents, predecessors, successors, purchasers, assigns, representatives, fiduciaries, and insurers (jointly, the "Released Parties") from any and all grievances, liens, suits, judgments, claims, demands, debts, defenses, actions or causes of action, obligations, damages (whether compensatory, punitive or otherwise), and liabilities whatsoever which the Consultant now has, has had, or may have, whether the same be known or unknown, vested or contingent, at law, in equity, or mixed, in any way arising out of or relating in any way to any matter, act, occurrence, or transaction before the date of this General Release Agreement, including but not limited to Consulting Agreement with the Company (collectively, "Claims"). This is a General Release. The Consultant expressly acknowledges that this General Release includes, but is not limited to, the Consultant's release of any tort and contract claims and arbitration claims. Also, the Consultant understands that this General Release Agreement is not an admission of liability under any statute or otherwise by the Released Parties, and that the Released Parties do not admit but deny any violation of his legal rights, and that it shall not be regarded as a prevailing party for any purpose, including but not limited to, determining responsibility for or entitlement to attorneys’ fees, under any statute or otherwise. The Consultant agrees that in the event the Consultant brings a Claim in which the Consultant seeks damages or other relief from any Released Party, or in the event the Consultant seeks to recover against any Released Party in any Claim brought by a governmental agency on the Consultant’s behalf, this Agreement shall serve as a complete defense to such Claims.
 

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3.   The Consultant also agrees that the Consultant has been paid for all services rendered and has submitted all invoices and expense reports.
 
4.   The Consultant agrees that every term of this Agreement, including, but not limited to, the fact that an agreement has been reached and the amount paid, shall be treated by the Consultant as strictly confidential, and expressly covenants not to display, publish, disseminate, or disclose the terms of this Agreement to any person or entity other than the Consultant’s attorney(s) (for purposes of seeking advice concerning this agreement only) and the Consultant’s accountant(s) (for purposes of seeking tax advice only), unless compelled to make disclosure by lawful court order or subpoena.
 
5.   The Consultant and the Company have entered into an Assignment of Invention, Non-Disclosure, Non-Solicitation and Non-Competition Agreement ("NDA Agreement"). The Consultant reaffirms its obligation to comply with all of the post termination obligations in the NDA Agreement.
 
6.   The Consultant also agrees that:
 
·   The Consultant is entering into this agreement knowingly and voluntarily;
 
·   The Consultant has been advised by the Company to consult an attorney;
 
·   But for the Consultant's execution of this agreement, the Consultant would not otherwise be entitled to the payments described in paragraph 2;
 

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·   If any part of this agreement is found to be illegal or invalid, the rest of the agreement will be enforceable; and
 

CONSULTANT:
 
COMPANY:
     
   
WASHINGTON CAPITAL ADVISORS, INC.
     
     
   
[NAME AND TITLE]
Date:
   
Date:
 
 

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Accepted and Agreed to:

Fortress International Group, Inc.


By: _______________________________

Name: Harvey L. Weiss
Title:   Chairman

Date: ______________________________


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EXHIBIT B
 
INVENTION ASSIGNMENT, NON-COMPETE
 
AND CONFIDENTIALITY AGREEMENT
 

The following confirms an Invention Assignment, Non-Compete and Confidentiality Agreement ("Agreement") between Washington Capital Advisors, Inc. (“ WCA ”) and Fortress International Group, a Maryland corporation (the "Company," which term includes the Company’s Affiliates, subsidiaries and any assigns). The promises and commitments that WCA makes in this Agreement are a material part of the Company’s consideration in WCA’s consulting relationship with the Company.

1.
WCA understands and agrees that its engagement as a consultant to the Company creates a duty of loyalty and a relationship of confidence and trust between it and the Company with respect to any information made known to WCA by the Company or by any client, customer or vendor of the Company or other person who submits information to the Company, or which may be learned by me during the period of its engagement.
 
2.
WCA recognizes that the Company is continuously engaged in activities that the Company regards as confidential, proprietary and/or legally protectable, which activities are at least in part intended to further the interests of the Company and to provide the Company with a competitive advantage. The Company possesses and will, in the future, continue to possess information that has been or will be created, discovered, developed or otherwise becomes known to the Company (including information created by, discovered or developed by, or made known to WCA) during the period of or arising out of WCA’s engagement with the Company. WCA understands that various intellectual and other property rights have been assigned or otherwise conveyed to the Company. All information concerning the above described activities and information is collectively called "Proprietary Information" under this Agreement.
 
3.
By way of illustration, but not limitation, Proprietary Information includes: trade secrets, processes, formulas, data and know-how; software programs, improvements, and inventions; research and development plans, tools and techniques; new product introduction plans, specifications, requirements documents and strategies; manufacturing techniques, strategies and costs, expenses, supplier information and lists and distribution information; terms and conditions in contracts of all kinds; marketing plans, strategies and service; support strategies and procedures; development schedules; revenue forecasts; computer programs; copyrightable material, employee salaries, employee expertise, employee ability levels, training programs and procedures, copies of memos or presentations incorporating confidential information which WCA may have in its files (including those authored by WCA or its employees and contractors), patent applications and disclosures and customer lists.
 
4.
In consideration of WCA’s engagement by the Company and the compensation received by WCA from the Company from time to time, WCA hereby agrees as follows:
 

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(a)
All Proprietary Information shall be the sole property of the Company, and the Company shall be the sole owner of all patents, copyrights, trademarks and other rights related to Proprietary Information. WCA hereby assigns to the Company any rights WCA may have or acquire in Proprietary Information. At all times, both during and after WCA’s engagement by the Company, WCA will keep in confidence and trust all Proprietary Information, and WCA will not use or disclose any Proprietary Information or anything related to it without written consent of the Company, except as may be necessary in the ordinary course of performing WCA’s duties to the Company.
 
 
(b)
All documents, records, apparatus, equipment and other physical property, whether or not pertaining to Proprietary Information, furnished to WCA by the Company or produced by WCA or others in connection with their provision of services to the Company shall be and remain the sole property of the Company, shall be used by WCA solely for the benefit of the Company and shall be returned to the Company immediately as and when requested by the Company. Even if the Company does not so request, WCA shall return and deliver all such property to the Company upon termination of WCA’s consulting engagement with the Company. WCA will not take with WCA any such property or any form of copy or reproduction of such property upon Consultant’s termination of the consulting relationship.
 
 
(c)
WCA will promptly disclose to the Company, or any persons designated by it, all improvements, inventions, formulas, ideas, processes, techniques, know-how and data, whether or not patentable, made or conceived or reduced to practice or learned by WCA, either alone or jointly with others, during the period of WCA’s consulting engagement (all said improvements, inventions, formulas, ideas, processes, techniques, know-how and data shall be hereinafter collectively call "Inventions").
 
 
(d)
WCA agrees that all Inventions that WCA develops or has developed (in whole or in part, either alone or jointly with others) and (i) use or has used equipment, supplies, facilities or trade secret information of the Company, or (ii) use or has used the hours for which WCA is to be or was compensated by the Company, or (iii) which relate to the business of the Company or to its actual or demonstrably anticipated research and development or (iv) which result, in whole or in part, from work performed by WCA for the Company shall be the sole property of the Company and its assigns, and the Company and its assigns shall be the sole owner of all patents, copyrights and other rights in connection therewith. WCA hereby assigns to the Company any rights WCA may have or acquire in such Inventions. WCA further agree as to all such inventions and improvements to assist the Company in every proper way (but at the Company’s expense) to obtain and from time to time enforce patents, copyrights or other rights on said inventions and improvements in any and all countries, and to that end WCA will execute all documents in use for applying for and obtaining such patents and copyrights thereon and enforcing same, as the Company may desire, together with any assignments thereof to the Company or persons designated by it. WCA’s obligation to assist the Company in obtaining and enforcing patents, copyrights or other rights for such inventions and improvements in any and all countries shall continue beyond the termination of WCA’s consulting engagement with the Company, but the Company shall compensate WCA at a reasonable rate after such termination for time actually spent by WCA at the Company’s request on such assistance.
 

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(e)
In the event that the Company is unable for any reason whatsoever to secure WCA’s signature to any lawful and necessary document required to apply for or execute any patent, copyright or other applications with respect to such inventions and improvements (including renewals, extensions, continuations, divisions or continuations in part thereof), WCA hereby irrevocably designates and appoints the Company and its authorized officers and agents, as Consultant’s agents and attorneys-in-fact, this power of attorney being coupled with an interest, to act for and in its behalf and instead of WCA, to execute and file any such application and to do all other lawfully permitted acts to further the prosecution and issuance of patents, copyrights or other rights thereon with the same legal force and effect as if executed by WCA.
 
 
(f)
WCA represents that its performance of all the terms of this Agreement will not breach any agreement to keep in confidence proprietary information acquired by WCA in confidence or in trust prior to its engagement with the Company. WCA has not entered into, and WCA agrees that WCA will not enter into, any agreement either written or oral in conflict with this Agreement.
 
 
(g)
WCA acknowledges that the Company from time to time may be involved in government projects of a classified nature. WCA further acknowledges that the Company from time to time may have agreements with other persons or governmental agencies which impose obligations or restrictions on the Company regarding inventions made during the course of work thereunder or regarding the confidential nature of such work or information disclosed in connection therewith. WCA agrees to be bound by all such obligations and restrictions and to take all action necessary to discharge the obligations of the Company thereunder.
 
 
(h)
WCA represents and warrant that execution of this Agreement, its engagement as a consultant to the Company and its performance of its consulting responsibilities to the Company in the development of its business have not and will not violate any obligations which WCA may otherwise have.
 
 
(i)
WCA agrees that at no time during its engagement as a consultant to the Company or thereafter shall WCA make, or cause or assist any other person to make, any statement or other communication to any third party which impugns or attacks, or is otherwise critical of, the reputation, business or character of the Company or any of its Affiliates or any of their respective directors, officers or employees.
 
5.
This Agreement shall be effective as of the first day of Consultant’s engagement by the Company.
 
6.
This Agreement may not be changed, modified, released, discharged, abandoned or otherwise amended, in whole or in part, except by an instrument in writing, signed by WCA and a majority of the members of the Board. WCA agrees that any subsequent change or changes in WCA’s duties or compensation shall not affect the validity or scope of this Agreement.
 

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7.
WCA acknowledges receipt of this Agreement and agrees that with respect to the subject matter hereof it is its final, complete and exclusive agreement with the Company, superseding any previous oral or written representations, understanding or agreements with the Company or any officer or representative with respect to the subject matter herein.
 
8.
In the event that any paragraph or provision of this Agreement shall be held to be illegal or unenforceable, such paragraph or provision shall be modified to the extent necessary to give effect to the intent of the parties or, if necessary, severed from this Agreement and the entire Agreement shall not fail on account thereof, but shall otherwise remain in full force and effect.
 
9.
This Agreement shall be construed in accordance with the laws of the State of Maryland without regard to its choice of law principles.
 
10.
This Agreement shall be binding upon WCA and its successors and assigns and shall inure to the benefit of the Company, its successors and assigns.
 
WCA acknowledges that the foregoing restrictions contained in Section 4 are reasonable in all respects including the scope, duration and geographic limitations. WCA agrees that the restrictions are an appropriate means of protecting the Company’s legitimate business interests, and no greater than necessary to protect the Company’s interests.


Dated: __________ _____, 2006


 
WASHINGTON CAPITAL ADVISORS, INC.
   
   
 
By:_____________________________________
 
Name:___________________________________
 
Title:____________________________________

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Accepted and Agreed to:

Fortress International Group, Inc.


By: ___________________________________
Name: Harvey L. Weiss
Title:   Chairman

Date: __________________________________


- 5 -

 

EXECUTIVE EMPLOYMENT AGREEMENT
 
This EXECUTIVE EMPLOYMENT AGREEMENT (this " Agreement "), effective this 19th day of January, 2007 (" Effective Date "), between FORTRESS AMERICA ACQUISITION CORPORATION, a Delaware corporation (the " Company ") and THOMAS P. ROSATO (the " Executive ").
 
WITNESSETH
 
WHEREAS, Executive and Gerard J. Gallagher (“ Gallagher ”) were all of the members of VTC, LLC, a Maryland limited liability company (“ VTC ”) and Vortech, LLC (“ Vortech ”).
 
WHEREAS, by the terms of a Second Amended and Restated Membership Interest Purchase Agreement dated July 31, 2006 (the “ Purchase Agreement ”) by and among the Company, the Executive, Gallagher, VTC and Vortech, Company purchased from Executive and Gallagher all of their respective membership interests in each of VTC and Vortech.
 
WHEREAS as an inducement for and condition to the Company entering into and executing and delivering the Purchase Agreement, the Company requires that the Employee enter into this Agreement for the purpose of retaining the Executive’s services upon the terms and conditions set forth below.
 
WHEREAS, the Executive is willing to provide services to the Company upon the terms and conditions set forth herein.
 
NOW THEREFORE, in consideration of the promises and the mutual agreements contained herein, intending to be legally bound, the parties agree as follows:
 
1.   DEFINITIONS
 
The following words and terms shall have the meanings set forth below for the purposes of this Agreement:
 
1.1.   Affiliates . " Affiliates " of a Person, or a Person " affiliated " with another Person, are any Persons which, directly or indirectly, through one or more intermediaries, controls or are controlled by or are under common control with, the Person specified.
 
1.2.   Base Salary . " Base Salary " shall have the meaning set forth in Section 3.1 hereof.
 
1.3.   Board . " Board " means the Company’s Board of Directors.
 
1.4.   Cause .
 
1.4.1   Termination of the Executive’s employment for " Cause " shall mean any of the following:
 

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(i)   any act that would constitute a material violation of the Company’s material written policies provided that the Company specifically terminates the Executive's employment for Cause hereunder within 120 days from the date the Company has actual notice of such;
 
(ii)   intentionally engaging in conduct materially and demonstrably injurious to the Company provided that the Company specifically terminates the Executive's employment for Cause hereunder within 120 days from the date the Company has actual notice of such; or
 
(iii)   conviction of (1) a crime of embezzlement or a crime involving moral turpitude; (2) a crime with respect to the Company involving a breach of trust or dishonesty; or (3) in either case, a plea of guilty or no contest to such a crime provided that the Company specifically terminates the Executive's employment for Cause hereunder within 120 days from the date the Company has actual notice of such.
 
1.4.2   In any case, if the Company desires to terminate the Executive's employment for Cause in accordance with Sections 1.4.1(i), (ii) or (iii), it shall first give written notice of the facts and circumstances providing the basis for Cause to the Executive, and to allow the Executive 30 days from the date of such notice to remedy, cure or rectify, if possible, the situation giving rise to the Company's allegations of Cause (the "Cure Period"); provided, however, that the Executive shall have only one such opportunity to cure, regardless of the grounds on which Cause is asserted, during the Employment Period. During the Cure Period, the Executive may not be entitled to payment of any compensation, in the Company's sole discretion; provided, however, that if the Executive's compensation is withheld and the Executive successfully remedies, cures, or rectifies the situation giving rise to the Company's notice of Cause during the Cure Period, resulting in the Company's withdrawal of its written notice of Cause, the Executive shall be compensated for the Cure Period.
 
1.4.3   A termination for Cause after a Change in Control shall be based only on events occurring after such Change in Control; provided, however, the foregoing limitation shall not apply to an event constituting Cause which was not discovered by the Company prior to a Change in Control.
 
1.4.4   Cause shall be determined in good faith by the affirmative vote of a majority of the whole Board (excluding the Executive if the Executive is a member of the Board).
 
1.4.A   Change in Control of the Company . " Change in Control of the Company " means (a) a sale, transfer or exclusive licensing by the Company of all or substantially all of the assets of the Company and its Subsidiaries on a consolidated basis (measured by either book value in accordance with United States generally accepted accounting principles consistently applied or fair market value determined in the reasonable good faith judgment of the Board) in any transaction or series of transactions (other than sales in the ordinary course of business); (b) any sale, transfer or issuance or series of sales, transfers and/or issuances of shares of the Company's capital stock by the Company or any holders thereof which results in any Person or Persons, other than the holders of Company’s capital stock as of the date hereof, owning capital stock of the Company possessing the voting power (under ordinary circumstances) to elect a majority of the Board; (c) the stockholders of the Company approve a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 50% of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or (d) the stockholders of the Corporation approve a plan of complete liquidation of the Company.

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1.5.   Date of Termination . " Date of Termination " shall mean (a) if the Executive’s employment is terminated by reason of the Executive’s death, the date of the Executive’s death, or (b) if the Executive’s employment with the Company and its Subsidiaries is terminated for any reason other than the Executive’s death, the date on which Executive ceases to be an employee of the Company and its Subsidiaries.
 
1.6.   Disability .   Termination of the Executive’s employment with the Company and its Subsidiaries based on " Disability " shall mean termination of the Executive’s employment at the Company’s sole discretion, upon thirty (30) days prior written notice in the event the Executive becomes “Disabled,” as defined in any group term disability insurance maintained by the Company applicable to the Executive, or, (b) if the Company shall not maintain such insurance, the determination by an independent physician acting reasonably and in good faith that the Executive is incapacitated by reason of a physical or mental illness which is long-term in nature and which prevents the Executive from performing the substantial and material duties of his employment with the Company, provided that such incapacity can reasonably be expected to prevent the Executive from working at least six (6) months in any twelve (12) month period. The Company may require the Executive to have the examination described in the preceding sentence at any time for the purpose of determining whether the Executive has a long-term disability, and the Executive agrees to submit to such examination upon request of the Board; provided that the Company shall pay all costs and expenses associated with such examination. This Section 1.6 shall be interpreted and applied consistently with the Americans with Disabilities Act, the Family and Medical Leave Act and other applicable law.
 
1.7.   Good Reason . Termination of the Executive’s employment by the Executive for a " Good Reason " shall mean termination by the Executive because of: (a) a requirement to move the Executive’s primary place of business more than twenty-five (25) miles from the office the Executive works in on the date hereof (which termination occurs prior to such move) without the written consent of the Executive, (b) failure of the Company to pay any installment of the Executive’s Base Salary when such installment is due pursuant to this Agreement, which failure is not cured within fifteen (15) days; (c) any other breach or breaches of this Agreement by the Company, which breaches are, singularly or in the aggregate, material, and which are not cured within thirty (30) days of written notice of such breach or breaches to the Company by the Executive; or (d) a reduction by the Company of the Executive’s Base Salary without the express written consent of the Executive.
 

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1.8.   Person . " Person " means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, any other business entity and a governmental entity or any department, agency or political subdivision thereof.
 
1.9.   Restrictive Period . For purposes of this Agreement the term “ Restrictive Period ” shall have the following meanings.
 
1.9.1   If the Executive’s employment is terminated prior to the third (3 rd ) anniversary of the Closing Date, then the Restrictive Period shall be the period from the Termination Date through the third anniversary of the Closing Date (or if the Termination Date is within twelve (12) months of the third anniversary of the Closing Date), then for a period of one (1) year measured from the Termination Date through the first anniversary of the Termination Date.
 
1.9.2   Subject to Section 7.4 hereof, If the Executive’s employment is terminated after the third anniversary of the Closing Date, then the Restrictive Period shall be the twelve month period measured from the Termination Date through the first anniversary of the Termination Date.
 
1.10.   Subsidiary . " Subsidiary " means, with respect to any Person, any corporation, limited liability company, partnership, association or other business entity of which (a) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (b) if a limited liability company, partnership, association or other business entity, a majority of the partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a limited liability company, partnership, association or other business entity if such Person or Persons shall be allocated a majority of limited liability company, partnership, association or other business entity gains or losses or shall be or control any managing director or general partner of such limited liability company, partnership, association or other business entity.
 
2.   EMPLOYMENT
 
2.1.   Employment Period .
 
2.1.1   Expressly conditioned upon the closing (the “ Closing ”) under the Purchase Agreement and effective as of the date of the Closing (the “ Closing Date ”), the Company hereby employs the Executive, and the Executive hereby accepts said employment and agrees to render services to the Company, on the terms and conditions set forth in this Agreement for the period (the " Employment Period ") beginning on the Closing Date and ending when such period is terminated pursuant to the terms hereof. Unless earlier terminated by either the Company or the Executive as hereinafter provided, the Employment Period shall continue through the third (3 rd ) anniversary of the Closing Date (" Expiration Date "); provided, however, that if this Agreement is renewed pursuant to Section 2.1.2 below, then the “Expiration Date” for the then current “Renewal Term” (as hereinafter defined) shall be the date that is last day of the one year period of any Renewal Term. Notwithstanding anything to the contrary continued in this Section 2.1.1 , if the Closing under the Purchase Agreement does not occur, this Agreement shall be null and void and of no force and effect.
 

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2.1.2   This Agreement shall be automatically renewed for an additional one year period commencing at the expiration of the initial Employment Period or any subsequent renewal term (each, a " Renewal Term ") unless the Company provides written notice of termination to the Executive not less than sixty (60) days prior to the Expiration Date. Notwithstanding the foregoing or anything else in this Agreement to the contrary, the Employment Period shall immediately terminate prior to any Expiration Date (i) upon Executive’s death, Disability or termination for a Good Reason or (ii) upon termination by the Company for Cause; in all other circumstances, thirty (30) days' prior written notice is required by either party to the other to terminate this Agreement.
 
2.2.   Duties .   During the Employment Period, the Executive shall devote the Executive's full working time and attention and use the Executive's best efforts and skill to further the interests of the Company. The Executive shall, to the best of his ability, execute the strategic plan of the Company as approved by the Board, perform his duties, adhere to the Company’s published policies and procedures, promote the Company’s interests, reputation, business and welfare, and work actively with the Board and other senior managers to help augment the existing business base, increase the corporate contract backlog and identify and develop new business opportunities. The Executive shall perform such services for the Company as is consistent with the Executive's position (subject to the power and authority of the Board to expand or limit such services and to overrule actions of officers of the Company) and as lawfully directed, from time to time, by the Board. During the Employment Period, the Executive’s title shall be Chief Executive Officer. During the Employment Period the Executive shall report to the Board, and Executive may use such additional titles as assigned and approved by the Board. The Executive shall not, during the Employment Period, be employed or involved in any other business activity for gain, profit or other pecuniary advantage. Notwithstanding the foregoing, the Executive may (a) volunteer services for or on behalf of such religious, educational, non-profit and/or other charitable organization as the Executive may wish to serve; (b) manage his personal, financial and legal affairs; and (c) participate in the over all management (but not the day to day management) of two private companies identified on Exhibit A attached hereto and incorporated herein (and as to one of which, as identified on Exhibit A , the Executive serves as the chairman of its Board), so long as such activities do not interfere with the performance of his duties and responsibilities to the Company as provided hereunder or violate any of the terms of this or any other agreement entered into with the Company. The Executive acknowledges that the Executive may be required to travel on business in connection with the Executive's performance of the Executive's duties hereunder, but that the Executive's base will be the location of the Company’s headquarters in Columbia or Beltsville, Maryland or such other location as determined by the Board.
 
2.3.   Insurance . The Company may, at its discretion, apply for and procure in its own name and for its own benefit life and/or disability insurance on the Executive in any amount or amounts considered available. The Executive agrees to cooperate in any medical or other examination, supply any information and execute and deliver any applications or other instruments in writing as may be reasonably necessary to obtain and constitute such insurance. The Executive hereby represents that the Executive has no reason to believe that the Executive's life is not insurable at rates now prevailing for a healthy person of the Executive's gender and age.
 

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2.4.   Corporate Opportunity . The Executive agrees that, unless approved by the Board, he will not take personal advantage of any business opportunities which arise during his employment with the Company and which may be of benefit to the Company. All material facts regarding such opportunities must be promptly reported to the Board for consideration by the Company.
 
3.   COMPENSATION AND BENEFITS
 
3.1.   Base Salary . During the Employment Period, the Company shall pay the Executive an initial base salary of Four Hundred Twenty Five Thousand Dollars ($425,000.00) per year (" Base Salary ") paid in approximately equal installments bi-weekly. The Company will review the Executive’s Base Salary on December 31 of each year of the Employment Period in order to determine what Base Salary adjustments, if any, shall be made, subject to an annual minimum increase of five percent (5%), but in no event may the Executive's Base Salary be reduced below that paid in the preceding year.
 
3.2.   Annual Bonus . For calendar year 2006 (ending on or about December 31, 2006) and for each other calendar year that begins during the Employment Period (each such calendar year, a " Bonus Year "), the Executive shall be eligible to receive a bonus in an amount and on such terms as are established by the Company's Board up to fifty percent (50%) of the Base Salary (each, a " Bonus ") in accordance with the bonus plan or formula applicable to the Executive. The 2006 Bonus shall be prorated to reflect that the 2006 Bonus Year is a partial year commencing on the Closing Date and ending on December 31, 2006. In addition, the Executive shall be eligible for any other bonus as the Board may determine in its sole discretion. Any Bonus for an applicable calendar year, or portion thereof, shall be paid to the Executive no later than the conclusion of the first calendar quarter following each calendar year.
 
3.3.   Vacation and Benefits .   The Executive shall continue to receive vacation, health insurance and other employee benefits as the Company makes available to other executives, as may exist at any particular time and from time to time during the Executive’s employment.
 
3.4.   Withholding . All payments required to be made by the Company hereunder to the Executive shall be subject to the withholding of such amounts, if any, relating to tax and other payroll deductions as the Company may reasonably determine should be withheld pursuant to any applicable law or regulation.
 

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3.5.   Policies, Procedures & Benefit Plans . Except as otherwise provided herein, the Executive’s employment shall be subject to the policies and procedures which apply generally to the Company’s employees as the same may be interpreted, adopted, revised or deleted from time to time, during the Employment Period, by the Board in its sole discretion. The Executive agrees to comply with such policies and procedures in all material respects. During the Employment Period, the Executive shall be entitled to participate in any Company benefit plans on the same basis as other executive level employees of the Company. The Board reserves the right to change, alter, or terminate benefits, plans and carriers in its sole direction. All matters of eligibility for coverage or benefits under any health, hospitalization, life, disability, or other insurance plan, program or policy shall be determined in accordance with the provisions of the plan, program, or policy; the Company shall not be liable to the Executive, the Executive’s family, heirs, executors, or beneficiaries, for any payment payable or claimed to be payable under any such benefit plan, program, or policy. Provided that the Executive can be insured at standard rates, the Company shall maintain the Executive’s existing life insurance policy(ies) as set forth on Exhibit B attached hereto, or if it is not possible to continue the existing policies, then provide the Executive a $1,000,000 life insurance policy with a reputable and responsible insurance company acceptable to the Company and the Executive.
 
3.6.   Stock Bonus. Subject to Section 3.6.4 below, as of July 13, 2008 (the period between the Effective Date and July 13, 2008 being hereinafter referred to as the “ Stock Bonus Period ”), Executive shall be entitled to receive up to Five Million Dollars ($5,000,000.00) worth of the Company’s common stock (the “ Stock Bonus ”) depending on whether during the Stock Bonus Period the highest average closing price of the Company’s common stock (on the Nasdaq OTC market or such other recognized stock market on which the Company’s stock is then being traded on) for sixty (60) consecutive trading days (the “ Highest Average Trading Price ”) exceeds the applicable “Stock Bonus Closing Price Thresholds” set forth below.
 
3.6.1   For purposes of this Agreement (A) the “ Stock Bonus Closing Price Thresholds ” are as follows (each of which is individually referred to as a “ Stock Bonus Closing Price Threshold ”); (B) the “ Stock Bonus Threshold Share Value ” for each Stock Bonus Closing Price Threshold shall be the dollar amount ($500,000, $1,000,000, $1,500,000 or $2,000,000 as the case may be) for that Stock Bonus Closing Price Threshold as set forth below; (C) the “ Minimum Threshold Share Price ” with respect to each Stock Bonus Closing Price Threshold is the maximum price per share that is within that Stock Bonus 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 Stock Bonus 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).
 
(i)   If during the Stock Bonus Period the Highest Average Trading Price never exceeds Nine Dollars ($9.00) per share, then no Company common stock shall be issuable to Executive at the end of the Stock Bonus Period.
 
(ii)   If during the Stock Bonus Period the Highest Average Trading Price is in excess of Nine Dollars ($9.00), then Executive shall be entitled to receive Five Hundred Thousand Dollars ($500,000.00) of Company common stock.
 
(iii)   If during the Stock Bonus Period the Highest Average Trading Price is in excess of Ten Dollars ($10.00), then Executive shall be entitled to receive, in addition to the Company common stock referenced in Section 3.6.1(ii) above, an additional One Million Dollars ($1,000,000.00) of Company common stock.
 

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(iv)   If during the Stock Bonus Period the Highest Average Trading Price is in excess of Twelve Dollars ($12.00), then Executive shall be entitled to receive, in addition to the Company common stock referenced in Sections 3.6.1(ii) and (iii) above, an additional One Million Five Hundred Thousand Dollars ($1,500,000.00) of Company common stock.
 
(v)   If during the Stock Bonus Period the Highest Average Trading Price is in excess of Fourteen Dollars ($14.00) per share, then Executive shall be entitled to receive , in addition to the Company common stock referenced in Sections 3.6.1(ii) -(iv) above, an additional Two Million Dollars ($2,000,000.00) of Company common stock (based on the Highest Average Trading Price).
 
3.6.2   Determination of Company Shares Payable as Stock Bonus. The number of shares Company common stock to be issued as the Stock Bonus shall be determined at the end of the Stock Bonus Period as follows:
 
(i)   determining the Highest Average Trading Price during the Stock Bonus Period;
 
(ii)   determining which Stock Bonus Closing Price Thresholds are applicable (the applicable Stock Bonus Thresholds being (y) the Stock Bonus Closing Price Thresholds for which the Highest Average Trading Price falls within the applicable Threshold Share Price Range (the “ Maximum Stock Bonus Closing Price Threshold ”) and (z) all other Stock Bonus Price Thresholds for which the Highest Average Trading Price exceeds the applicable Threshold Share Price Range (collectively with the Maximum Stock Bonus Closing Price Threshold referred to as the “ Effected Stock Bonus Closing Price Thresholds ”)); and
 
(iii)   dividing the applicable Stock Bonus Threshold Share Value for each of the Effected Stock Bonus Closing Price Thresholds by the applicable Minimum Threshold Share Price for each of the Effected Stock Bonus Closing Price Thresholds (other than the Maximum Stock Bonus Closing Price Threshold for which the Stock Bonus Share Value shall be divided by the Highest Average Trading Price).
 
FOR EXAMPLE
 
If at the end of the Stock Bonus Period the Highest Average Trading Price was $14.50; then (A) the Effected Stock Bonus Closing Price Thresholds consists of all of the Stock Bonus Closing Price Thresholds; and (B) the division of (y) the Stock Bonus Threshold Share Value for each of the Effected Stock Bonus Closing Price Thresholds by the Minimum Threshold Share Price for each of the Effected Stock Bonus Closing Price Thresholds other than the Maximum Stock Bonus Closing Price Threshold and (z) the Stock Bonus Share Value for the Maximum Stock Bonus Closing Price Threshold by the Highest Average Trading Price results in the following:
 

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$500,000 ∕ $9.01 per share
=
55,493 shares
$1,000,000 ∕ $10.01 per share
=
99,900 shares
$1,500,000 ∕ $12.01 per share
=
124,895 shares
$2,000,000 ∕ $14.50 per share
=
137,931 shares
Total Stock Bonus
 
418,219 shares
 
The determination of the Highest Average Trading Price and the calculation of the number of shares of Company stock that are issuable to the Executive as Stock Bonus shall be made as follows. Not later than twenty (20) Business Days after the Stock Bonus Period, the Company’s senior financial executive shall provide Executive with a statement (the “ Stock Bonus Statement ”) setting forth the calculation of the Stock Bonus that shall include the calculations used to determine the Stock Bonus. Executive shall have fifteen (15) days following delivery of the Stock Bonus Statement (the “ Stock Bonus Notice Period ”) to disagree with Stock Bonus Statement by written notice to the Company setting forth in reasonable detail the amount and nature of the disagreement (each an “ Stock Bonus Dispute Notice ”). If the Company does not receive a Stock Bonus Dispute Notice from Executive within the Stock Bonus Notice Period, Executive shall be conclusively presumed to agree with the Stock Bonus Statement and the Company shall promptly issue the Stock Bonus shown to be due on the Stock Bonus Statement to Executive pursuant to Section 3.6.3 below. If the Company receives a Stock Bonus Dispute Notice from Executive within the Stock Bonus Notice Period then the dispute shall be resolved pursuant to Section 9 below.
 
3.6.3   Delivery of Stock Bonus. The Company shall deliver, or shall cause to be delivered to Executive stock certificates for any Stock Bonus.
 
3.6.4   Forfeiture of Stock Bonus. Notwithstanding anything to the contrary contained in this Section 3.6 , if during the Stock Bonus Period Executive’s employment is terminated pursuant to Section 5.1 of this Agreement, then Executive shall forfeit any and all rights in and to the Stock Bonus.
 
3.6.5   Fractional and Restricted Shares; Acquisition Agreement
 
(i)   Fractional Shares . If the calculation of the number of shares of Company common stock to be received as the Stock Bonus pursuant to this Section 3.6     would result in the issuance of fractional shares, then the number of shares of Company common stock that Executive would otherwise receive as the Stock Bonus shall be rounded down to the nearest whole number of shares (which shall be the Stock Bonus payable to Executive and Executive shall receive as cash the amount attributable to the fractional interest.
 
(ii)   Restricted Shares . The shares of Company common stock to be issued pursuant to this Agreement as Stock Bonus (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 Bonus shall bear, in addition to any other legends required under applicable securities laws, the following legend:
 

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“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.”
 
(iii)   Stock Acquisition Agreement . In connection with and as a precondition to receipt of any Stock Bonus, Employee shall execute and deliver to Company a Stock Acquistion Agreement substantially in the form of Exhibit C attached hereto and incorporated herein and all such other documentation as may reasonably be required by Company.
 
4.   SUPPORT AND EXPENSES
 
4.1.   Office . During the Employment Period and until such time as the Company’s headquarters are moved from their current location to a new location, the Company shall provide to Executive an office allowance of Three Thousand Dollars ($3,000) per month. At such time as the Company’s headquarters are moved, the office allowance shall cease and the Company shall provide the Executive with   furnished offices in the Company’s headquarters (which shall be consistent with the Executive’s duties and sufficient for the efficient performance of those duties, all in the reasonable determination of the Board) .
 
4.2.   Expenses . During the Employment Period, including following any Date of Termination for appropriate expenses incurred on or prior to the Date of Termination, the Company shall reimburse the Executive promptly or otherwise provide for or pay for all pre-approved reasonable expenses incurred by the Executive in furtherance of, or in connection with, the business of the Company or its Subsidiaries, consistent with the Company’s policies in effect from time to time with respect to travel, entertainment and other business expenses, subject to such reasonable documentation and other limitations as may be established from time to time by the Board, including against presentation of vouchers or receipts therefor.
 
5.   TERMINATION
 
5.1.   Termination Due to Death or Disability, For Cause or By the Executive . If the Employment Period is terminated (a) by reason of the Executive’s death or Disability; (b) by the Company for Cause; or (c) by the Executive (other than for a Good Reason); then the Executive shall only be entitled to receive the Executive’s Base Salary and the reimbursement of any applicable expenses pursuant to Section 4.2 through the Date of Termination, and the Executive shall have no right to any other compensation thereafter (including without limitation pursuant to Section 3.1 and 3.2 of this Agreement, but not including Section 5.3 ). No Person shall be entitled hereunder to participate in any employee benefit plan after the Date of Termination if the Employment Period is terminated in connection with this Section 5.1 , except as otherwise expressly required by applicable law (i.e., COBRA) and provided that nothing herein shall be interpreted to limit the Executive’s conversion rights, if any, under any of the Company’s employee benefit plans.
 

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5.2.   Termination by the Company Other Than for Death, Disability, or Cause or by the Executive for a Good Reason . In addition to the payment to the Executive of the Executive's Base Salary and the reimbursement of any applicable expenses pursuant to Section 4.2 through the Date of Termination, if (a) the Employment Period is terminated (i) by the Company for reasons other than death, Disability, or Cause, or (ii) by the Executive for a Good Reason, or (iii) in accordance with the terms of Section 2.1(b) hereof (provided the Company provides the requisite notice to the Executive to terminate prior to any Expiration Date); and (b) the Executive executes a general release in the form attached hereto as Exhibit D (the " Release ") on or before the effective Date of Termination; and (c) the Executive has not breached the terms of the “Assignment Agreement” (as defined below); then the Company shall pay the Executive an amount equal to the Executive’s Base Salary (at the rate in effect at the Date of Termination) for a period commencing on the Date of Termination and on the Expiration Date; provided, however , that if the Termination Date is within twelve (12) months of the Expiration Date, then the Company shall pay the Executive an amount equal to the Executive’s Base Salary (at the rate effective as of the Termination Date), for a period commencing on the Termination Date and ending on the first (1 st ) anniversary of the Termination Date. Any payment under this Section 5.2 shall be made over time as though the Executive continued to be employed by the Company. If the Executive elects and remains eligible for health coverage pursuant to Section 4980B of the Internal Revenue Code of 1986, as amended (" COBRA ") (and subject to withholding pursuant to Section 3.5 above); then commencing   within fifteen (15) business days following the date on which the Release becomes effective pursuant to its terms, the Company will, for a period commencing on the Date of Termination and ending twelve (12) months from the Date of Termination, pay a percentage of the premium for such COBRA health coverage equal to the percentage of the premium for health insurance coverage paid by the Company on the Date of Termination. The Executive shall not be entitled to any other salary or compensation after termination of the Employment Period (other than as set forth in this Section 5.2 and Section 5.3 ) and no Person shall be entitled hereunder to participate in any employee benefit plan after the Date of Termination if the Employment Period is terminated in connection with this Section 5.2 , except as otherwise specifically provided hereunder or as required by applicable law (i.e., COBRA) and provided that nothing herein shall be interpreted to limit the Executive’s conversion rights, if any, under any of the Company’s employee benefit plans. In furtherance of and not in limitation of the foregoing, the Executive may only be terminated by the affirmative vote of a majority of the whole Board (excluding the Executive if he is a member of the Board).
 
5.3.   Cooperation with Company After Termination of Employment .   For a period of six (6) months following termination of the Employment Period for any reason, as such period may be extended with the consent of the Executive, the Executive shall fully cooperate with the Company in all matters relating to the winding up of pending work on behalf of the Company including, but not limited to, any litigation in which the Company is involved, and the orderly transfer of any such pending work to other executives of the Company as may be designated by the Company. The Executive shall be compensated for any time spent pursuant to this Section 5.3 at the specific request of the Company at a per   diem amount based upon the Executive's Base Salary at the Date of Termination.
 

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5.4.   Termination by Mutual Consent . Notwithstanding any of the foregoing provisions of this Section 5 , if at any time during the course of this Agreement the parties by mutual consent decide to terminate it, they shall do so by separate agreement setting forth the terms and conditions of such termination.
 
 
6.
INVENTION, ASSIGNMENT, NON-COMPETE AND CONFIDENTIALITY AGREEMENT
 
6.1.   The parties hereto have entered into an Invention, Assignment, and Confidentiality Agreement attached hereto as Exhibit E (the " Assignment Agreement "), which may be amended by the parties from time to time pursuant to the terms thereof. The provisions of the Assignment Agreement are intended by the parties to survive and shall survive termination or expiration of the Employment Period and this Agreement.
 
 
7.
NON-SOLICITATION CUSTOMERS OR EMPLOYEES; NON-COMPETITION
 
7.1.   Covenant Not-to-Solicit Customers. Subject to Section 7.4 below, during Executive's employment with the Company through the applicable Restrictive Period, the Executive shall not directly or indirectly, individually or on behalf of any other person or entity, whether as principal, agent, stockholder, employee, consultant, representative or in any other capacity, solicit any person or entity, that:
 
7.1.1   is a customer or client of the Company or any of its subsidiaries as of the Termination Date; or
 
7.1.2   has been a customer or client of the Company or any of its subsidiaries at any time within two (2) years prior to the Termination Date; or
 
7.1.3   is a prospective customer or client that the Company or any of its subsidiaries is actively soliciting as of the Termination Date.
 
7.2.   Covenant Not-to-Solicit Employees. Subject to Section 7.4 below, during Executive's employment with the Company and from the Termination Date through the applicable Restrictive Period, the Executive shall not directly or indirectly, individually or on behalf of any other person or entity, whether as principal, agent, stockholder, employee, consultant, representative or in any other capacity:
 
7.2.1   recruit, solicit or encourage any person to leave the employ of the Company or any of its subsidiaries; or
 
7.2.2   hire any employee of the Company or any of its subsidiaries as a regular employee, consultant, independent contractor or otherwise.
 
7.3.   Non-Competition. The Executive recognizes and acknowledges the competitive and proprietary nature of the business operations of the Company and its subsidiaries. Subject to Section 7.4 below, during the Executive’s employment with the Company and for the applicable Restrictive Period, the Executive shall not, without the prior written consent of the Company, for himself or on behalf of any other person or entity, directly or indirectly, whether as principal, agent, stockholder, employee, consultant, representative or in any other capacity, own, manage, operate or control, or be concerned, connected or employed by, or otherwise associate in any manner with, engage in or have a financial interest in any business that competes with the business operations of the Company or any of its subsidiaries, except that nothing contained herein shall preclude the Executive from purchasing or owning stock in any such competitive business if such stock is publicly traded, and provided that his holdings do not exceed one percent (1%) of the issued and outstanding capital stock of such business.
 

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7.4.   Reduction and Extension of Restrictions.  
 
7.4.1   If the Termination Date with respect to the Executive’s termination occurs on or before the third (3 rd ) anniversary of the Closing Date, then the provisions of Sections 7.1, 7.2 and 7.3 above apply to Executive regardless of the reason for the termination. If the Termination Date with respect to the Executive’s termination occurs after the third anniversary of the Closing Date, then the provisions of Sections 7.1, 7.2 and 7.3 above apply only to terminations made pursuant to Section 5.1 and shall not apply with respect to terminations made pursuant to Section 5.2 .
 
7.4.2   The Company at Company’s option, by written notice delivered to Executive not less than thirty (30) days prior to the expiration of the then current, applicable Restrictive Period, may extend the Restrictive Period (as previously extended under this Section 7.4(b)) for an additional twelve (12) months, provided that Company pays to Executive during the extended Restrictive Period an amount equal to the Executive’s Base Salary (at the rate effective as of the applicable Termination Date and over time and in the manner Executive would have received these payments had he continued to be employed by the Company).
 
7.5.   Non-Disparagement. The Executive agrees not to make any public statement, or engage in any conduct, that is disparaging to the Company, or any of its employees, officers, directors or shareholders, including, but not limited to, any statement that disparages the products, services, finances, financial condition, capabilities or other aspects of the business of the Company. Notwithstanding any term to the contrary herein, the Executive shall not be in breach of this Section 7 for the making of any truthful statements under oath.
 
7.6.   Reasonableness of Restrictions. The Executive has carefully read and considered the provisions of this Section 7 , and, having done so, agrees (a) that the restrictions set forth herein are reasonable, in terms of scope, duration, geographic area, and otherwise, (b) that the protection afforded to the Company hereunder is necessary to protect its legitimate business interests, (c) that the agreement to observe such restrictions form a material part of the consideration for this Agreement and the Executive's employment by the Company and (d) that upon the termination of the Executive’s employment with the Company for any reason, he will be able to earn a livelihood without violating the foregoing restrictions. In the event that, notwithstanding the foregoing, any of the provisions of this Section 7 shall be held to be invalid or unenforceable, the remaining provisions thereof shall nevertheless continue to be valid and enforceable as though the invalid or unenforceable parts had not been included therein. In the event that any provision of this Section relating to the time period and/or the areas of restriction and/or related aspects shall be declared by a court of competent jurisdiction to exceed the maximum restrictiveness such court deems reasonable and enforceable, the time period and/or areas of restriction and/or related aspects deemed reasonable and enforceable by the court shall become and thereafter be the maximum restriction in such regard, and the restriction shall remain enforceable to the fullest extent deemed reasonable by such court.
 

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8.   EXECUTIVE’S REPRESENTATIONS AND WARRANTIES
 
8.1.   Other Agreements . The Executive hereby represents and warrants to the Company that the Executive is not a party to or bound by any employment agreement, noncompete agreement or confidentiality agreement with any other Person.
 
8.2.   Enforceability . The Executive hereby represents and warrants to the Company that upon the execution and delivery of this Agreement by the Company, this Agreement shall be the valid and binding obligation of the Executive, enforceable in accordance with its terms.
 
8.3.   No Breach; No Conflict of Interest . The Executive hereby represents and warrants to the Company that (a) the execution, delivery and performance of this Agreement by the Executive do not and shall not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which the Executive is a party or by which the Executive is bound and (b) the Executive is not, to the best of the Executive's knowledge and belief, involved in any situation that might create, or appear to create, a conflict of interest with loyalty to or duties for the Company.
 
8.4.   Notification of Materials or Documents from Other Employers . The Executive hereby represents and warrants to the Company that the Executive has not brought and will not bring to the Company or use in the performance of responsibilities at the Company any materials or documents of a former employer or client that are not generally available to the public, unless the Executive has obtained express written authorization from the former employer or client and the Company for their possession and use.
 
8.5.   Notification of Other Post-Employment Obligations . The Executive also understands that, as part of the Executive's employment with the Company, the Executive is not to breach any obligation of confidentiality that the Executive has to former employers or
 
clients, and agrees to honor all such obligations to former employers or clients during employment with the Company.
 
8.6.   Consultation with Counsel . The Executive hereby acknowledges and represents that the Executive has consulted with independent legal counsel regarding the Executive’s rights and obligations under this Agreement and that the Executive fully understands the terms and conditions contained herein.
 

14



 
9.   ARBITRATION
 
9.1.   The Executive and the Company mutually consent to the resolution by arbitration of certain claims or controversies (collectively, " Claims ") arising out of or relating to the Executive's employment or termination of employment under this Agreement that either party may have against the other, including the Company’s officers, shareholders, directors, employees, or benefit plans, the benefit plans' sponsors, fiduciaries, administrators, or affiliates; and all successors and assigns of any of them, or agents in their capacity as such or otherwise. The Claims covered by this Agreement shall include claims for (a) wages or other compensation due; (b) breach of any contract or covenant (express or implied); tort claims; (c) discrimination (including but not limited to race, sex, religion, national origin, age, disability, citizenship, marital status, or any other basis protected by any applicable federal, state or local law); (d) payment of wages; (e) benefits (except where an employee benefit or pension plan specifies that its claims procedure shall use an arbitration procedure different from this one); and (f) violation of any federal, state, or local law, statute, regulation, or ordinance, or recognized under common law. The Claims not covered by this Agreement shall include claims (g) for workers' compensation or unemployment compensation benefits; (h) brought pursuant to Sections 6 or 10 of this Agreement and breach of duty of loyalty; and (i) unrelated to the Employee's employment with the Company.
 
9.2.   The arbitration shall be governed by the procedures of the American Arbitration Association (" AAA "), in accordance with its then-current Model Employment Arbitration Procedures and shall take place in the Washington-Metropolitan area.
 
9.3.   If the parties to this Agreement become parties to an arbitration proceeding or litigation arising from or relating to this Agreement, the non-prevailing party shall pay the reasonable attorneys’ fees and costs incurred by the prevailing party in such arbitration or litigation.
 
10.   GENERAL PROVISIONS
 
10.1.   Assignment .   The Company may assign this Agreement and its rights and obligations hereunder in whole, but not in part, to any Company or other entity with or into which the Company or may hereafter merge or consolidate or to which the Company may transfer all or substantially all of its assets, if in any such case said company or other entity shall by operation of law or expressly in writing assume all obligations of the Company hereunder as fully as if it had been originally made a party hereto, but may not otherwise assign this Agreement or its rights and obligations hereunder. The Executive may not assign or transfer this Agreement or any rights or obligations hereunder without the prior written consent of the Company. Notwithstanding such assignment, the Company shall remain a guarantor of the performance of all obligations owed by the Company to the Executive under this Agreement.
 
10.2.   Notice . For the purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by certified or registered mail, return receipt requested, postage prepaid, or Federal Express, signature required, if to the Company, addressed to its corporate headquarters at the time notice is given, "Attention Board of Directors"; if to the Executive, addressed to his home address as listed in the Company’s records at the time notice is given.
 

15



 
10.3.   Amendment and Waiver . No provision of this Agreement may be amended or waived unless such amendment or waiver is in writing and signed by each of the parties hereto.
 
10.4.   Non-Waiver of Breach . No failure by either party to declare a default due to any breach of any obligation under this Agreement by the other, nor failure by either party to act quickly with regard thereto, shall be considered to be a waiver of any such obligation, or of any future breach.
 
10.5.   Severability . In the event that any provision or portion of this Agreement shall be determined to be invalid or unenforceable for any reason, the remaining provisions of this Agreement shall be unaffected thereby and shall remain in full force and effect.
 
10.6.   Governing Law . To the extent not preempted by Federal law, the validity and effect of this Agreement and the rights and obligations of the parties hereto shall be construed and determined in accordance with the law of the State of Maryland, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Maryland or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Maryland.
 
10.7.   Entire Agreement . This Agreement constitutes the entire agreement and understanding of the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings relating to such subject matter, whether oral or written, including without limitation any prior or existing employment agreement with the Company which shall be null and void and of no further force or effect.
 
10.8.   Binding Effect . This Agreement shall be binding upon and shall inure to the benefit of the transferees, successors and assigns of the Company, including without limitation any company with which the Company may merge or consolidate.
 
10.9.   Headings . Numbers and titles to Sections hereof are for information purposes only and, where inconsistent with the text, are to be disregarded.
 
10.10.   Survival . Section 1 and Sections 5 through 10 shall survive and continue in full force in accordance with their terms notwithstanding the expiration or termination of the Employment Period.
 
10.11.   No Strict Construction . The language used in this Agreement shall be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction shall be applied against any party.
 
10.12.   Counterparts . This Agreement may be executed in separate counterparts (including by means of facsimile), each of which is deemed to be an original and all of which taken together constitute one and the same agreement.
 
10.13.   Indemnification of the Executive. The Company shall, to the extent permitted by the Bylaws of the Company, in a manner as applied to other officers of the Company, indemnify, protect and hold the Executive harmless from and against any expenses, including reasonable attorneys' fees and expenses, claims, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with any proceeding arising out of, or related to, the Executive's employment by the Company or any of its Subsidiaries. The Company shall cause the Executive to be covered under directors and officers liability insurance policies in reasonable amounts in accordance with the Company's standard corporate policies.
 

16



 
10.14.   Injunctive Relief. The Executive represents and acknowledges that, in light of the payments to be made by the Company to the Executive hereunder and for other good and valid reasons, as a result of the restrictions stated in the Assignment Agreement and the restrictions in Section 7 hereof, the Company and its affiliated companies would sustain irreparable harm and, therefore, in addition to any other remedies which the Company may have under this Agreement or otherwise, the Company shall be entitled to apply to any court of competent jurisdiction for an injunction restraining the Executive from committing or continuing any such violation of this Agreement, and the Executive shall not object to such application.
 
[SIGNATURES ON FOLLOWING PAGES]

17


IN WITNESS WHEREOF, the parties hereto have caused this Executive Employment Agreement to be duly executed on the date and year first written above.
 

 
 
THE COMPANY:
 
 
 
FORTRESS AMERICA ACQUISITION CORPORATION
   
   
 
By:/s/ Harvey L. Weiss
 
Name: Harvey L. Weiss
 
Title: Chairman
   
   
 
THE EXECUTIVE:
   
 
By:/s/ Thomas P. Rosato
 
Name: Thomas P. Rosato

 

18




 


EXHIBIT A

PERMITTED ACTIVITIES





EXHIBIT B

EXISTING LIFE INSURANCE





EXHIBIT C

STOCK
ACQUISITION AGREEMENT
[Name of Purchaser]
 
THIS STOCK ACQUISITION AGREEMENT (“ Agreement ”) is made this ___ day of __________, 2006 by and between FORTRESS INTERNATIONAL GROUP, INC., formerly Fortress America Acquisition Corporation, a Delaware corporation (“ FIG ”), and ________________________, an individual (the “ Purchaser ”).
 
RECITALS :
 
R-1.   Pursuant to the terms of that certain Executive Employment Agreement dated the June 5, _____ day of ________, 2006 (the “ Employment Agreement ”), by and among (i) FIG and (ii) Purchaser, FIG employed Purchaser.
 
R-2.   Pursuant to the terms of the Employment Agreement, Purchaser has earned as a bonus _________ shares of FIG common stock (collectively the “ FIG Shares ”).
 
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements herein contained and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the undersigned agree as follows:

1.
Definitions .

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

Agreement ” has the meaning referred to in the Preamble.

Employment Agreement ” has the meaning referred to in Recital R-1.

Exchange Act ” means the Securities Exchange Act of 1934, as amended and the rules and regulations promulgated thereunder.
 
FIG ” refers to Fortress International Group, Inc.

FIG Securities ” has the meaning referred to in Section 3.6.

FIG Shares ” has the meaning referred to in Recital R-2.

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.
 




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

Purchaser ” means         .

Public Disclosure Documents ” has the meaning referred to in Section 3.7.

Registration Rights Agreement ” has the meaning referred to in Section 2.2.

SEC ” means the United States Securities and Exchange Commission.
 
Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
 
Tax ” means any Federal, state, local or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, ad valorem, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, custom, tariff, impost, levy, duty or other like assessment or charge.
 
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.
 
 
2.
Agreement to Sell and Purchase .

2.1   Sale and Purchase . Subject to the terms and conditions of this Agreement and the Membership Purchase Agreement, FIG hereby issues and sells to Purchaser, and Purchaser hereby purchases from FIG, the FIG Shares.





 
2.2
Closing Deliveries and Payment .
 
(a)   Upon the execution of this Agreement, FIG will deliver to the Purchaser stock certificates representing the FIG Shares.
 
(b)   Simultaneously with the execution of this Agreement, the Registration Rights Agreement attached hereto as Exhibit A (the “ Registration Rights Agreement ”) shall be executed by the parties thereto.
 
 
3.
Representations and Warranties of FIG .
 
 
3.1
Organization and Power .
 
FIG is a corporation duly organized, validly existing and in good standing under the laws of Delaware and has full corporate power and authority (a) to execute and deliver this Agreement and the Registration Rights Agreement and (b) issue the FIG Shares.
 
 
3.2
Authorization and Enforceability .
 
All corporate action on the part of FIG, its officers, directors and stockholders necessary for (a) the authorization, execution and delivery of this Agreement and the Registration Rights Agreement, (b) the performance of all obligations of FIG hereunder and thereunder, and (c) the authorization, sale, issuance and delivery of the FIG Shares pursuant hereto has been taken, as applicable. This Agreement and the Registration Rights Agreement when executed and delivered, will be valid and binding obligations of FIG, enforceable against FIG in accordance with their terms, subject to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles.
 




 
 
3.3
No Violation .
 
Neither (i) the execution, delivery or performance of this Agreement and the Registration Rights Agreement, nor (ii) the issuance of the FIG Shares will:
 
(a)   conflict with or violate any provision of the certificate of incorporation, any bylaw or any corporate charter or document of FIG;
 
(b)   result in the creation of, or require the creation of, any Lien upon any (i) shares of stock of FIG or (ii) property of FIG;
 
(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 FIG, 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 FIG, or (ii) to accelerate or forfeit any term of payment; or
 
(e)   violate any Laws applicable to FIG or by which its properties are bound or affected.
 
 
3.4
Consents .
 
Neither (a) the execution, delivery or performance of this Agreement or the Registration Rights Agreement, nor (b) the issuance of the FIG Shares will require (i) the consent or approval under any agreement or instrument or (ii) FIG 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.
 
 
3.5
Authorization of Stock Consideration .
 
When issued, the FIG Shares will be (a) duly authorized, validly issued, fully paid and nonassessable, (b) not subject to preemptive rights created by statute, FIG’s certificate of incorporation or bylaws or any agreement to which FIG is a party or by which FIG is bound and (c) 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 Purchaser.
 
 
3.6
Public Disclosure Documents .
 
(a)   FIG has filed with, or furnished to, the SEC each form, proxy statement or report required to be filed with, or furnished to, the SEC by FIG pursuant to the Exchange Act (collectively, with FIG’s prospectus filed with the SEC on July 13, 2005, as amended to date, the “ Public Disclosure Documents ”). The Public Disclosure Documents, as amended, 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, except to the extent updated or superseded by any Public Disclosure Document subsequently filed by FIG with the SEC prior to the date hereof.
 




 
(b)   The financial statements of FIG 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 financial position of FIG as of the dates indicated, and the results of the operations and cash flows of FIG 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).
 
4.   Representations and Warranties of Purchaser . Purchaser hereby represents and warrants to FIG that:
 
 
4.1
Authorization and Enforceability .
 
Purchaser has all necessary power and authority under all applicable provisions of Laws to execute and deliver this Agreement and the Registration Rights Agreement and to carry out his obligations hereunder and thereunder. All actions on the part of the Purchaser required for the lawful execution and delivery of this Agreement and the Registration Rights Agreement have been or will be effectively taken prior to the date hereof, as applicable. Upon their execution and delivery, this Agreement and the Registration Rights Agreement, will be valid and binding obligations of Purchaser, enforceable in accordance with their terms, subject to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles.
 
 
4.2
Purchase Entirely For Own Account .
 
The Purchaser is acquiring the FIG Shares for his own account (not as a nominee or agent) and for investment and not with a view to the resale or distribution of any part thereof except as specifically permitted by Section 4.3 hereof.
 
 
4.3
Investment Experience .
 
Purchaser is an "accredited investor" as defined in Rule 501(a) under the Securities Act. Purchaser has acquired sufficient information about FIG to reach an informed decision to purchase the FIG Shares. Purchaser has such business and financial experience as are required to give it the capacity to protect its own interests in connection with the purchase of the FIG Shares.
 




 
 
4.4
Access To Information .
 
The Purchaser has had an opportunity to ask questions of and receive answers from FIG and its officers and directors concerning FIG and the terms and conditions of the sale of the FIG Shares under the terms of this Agreement and has had an opportunity to obtain additional information from FIG to the extent deemed necessary or advisable by the Purchaser in order to verify the accuracy of the information obtained. The Purchaser has, to the extent deemed necessary by the Purchaser, consulted with his or her own advisors (including the Purchaser’s attorney, accountant or investment advisor) regarding the Purchaser’s investment in the FIG Shares and understands the significance and effect of his representations, warranties, acknowledgments and agreements set forth in this Agreement.
 
 
4.5
Speculative Investment .
 
The Purchaser understands that his investment in the FIG Shares entails a high degree of risk and that a total loss of the Purchaser’s investment in the FIG Shares is possible. The Purchaser understands that his acquisition of the FIG Shares will be a highly speculative investment.
 
 
4.6
Representations and Warranties by FIG .
 
The Purchaser acknowledges that neither FIG, nor any of its officers, directors, representatives or affiliates, nor any other person or entity, has made any representations or warranties, except as otherwise expressly set forth herein, with respect to FIG, its or its affiliates’ businesses, or the FIG Shares.
 
 
4.7
Restricted Securities .
 
Purchaser understands that (a) the FIG Shares are being offered in a transaction not involving any public offering in the United States within the meaning of the Securities Act, (b) the FIG Shares have not been registered under the Securities Act (in reliance upon an exemption from the Registration Requirements of the Securities Act pursuant to Section 4(2) thereof), (c) the FIG Shares have not been registered under applicable state securities laws, and (d) Purchaser may not resell, pledge or otherwise transfer any such FIG Shares unless registered under the Securities Act and applicable state securities laws (FIG being under no obligation to so do, except as provided in the Registration Rights Agreement).
 
 
4.8
Legends .
 
Purchaser understands that the FIG Shares, and any securities issued in respect thereof or exchanged therefor, may bear the following legend until such time, if any, as (a) the FIG Shares or such securities (i) are sold in compliance with Rule 144 under the Securities Act (or a comparable successor provision) or pursuant to an effective registration statement under the Securities Act or (ii) pursuant to Rule 144(k) under the Securities Act (or a comparable successor provision), or (b) FIG receives an opinion of counsel reasonably acceptable to it to the effect that such legend may be removed:
 




 
“THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) PURSUANT TO AN EXEMPTION PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES.”
 
 
5.
Miscellaneous .
 
 
5.1
Notices.
 
All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered to the parties at the addresses set forth below, as same may be modified from time to time. Each such notice, request or other communication shall be effective (a) if given by facsimile, when such facsimile is transmitted to the facsimile number set forth below if such facsimile is transmitted on a business day, and if not, then on the next business day thereafter, (b) if given by mail, five (5) days after mailed by registered or certified mail (return receipt requested) or (c) if given by express courier, on the day delivered by an express courier (with confirmation from recipient) to the following addresses:
 
 
(a)
if to FIG, to:
   
Fortress International Group, Inc.
   
Attn: Harvey L. Weiss
   
Chairman of the Board
   
4100 North Fairfax Drive, #1150
   
Arlington, Virginia 22203
   
Facsimile No.________________
     
 
(b)
if to Purchaser, to:
     
   
Thomas P. Rosato
   
11373 Liberty Street
   
Fulton, MD 20759
   
Facsimile No.: _______________
     
Notice of any change in any address or facsimile number shall also be given in the manner set forth above. Whenever the giving of notice is required, the giving of such notice may be waived by the party entitled to receive such notice.
 




 
 
5.2
Entire Agreement .
 
This Agreement, the Membership Purchase Agreement and the Registration Rights Agreement contain the entire agreement between the parties hereto with respect to the matters contemplated herein and supersede all prior agreements or understandings among the parties related to such matters.
 
 
5.3
Assignment and Binding Effect .
 
Except as otherwise expressly provided herein, the rights and obligations hereunder may not be assigned or delegated by the Purchaser or FIG without the prior written consent of the other; provided , however , that Purchaser may assign its rights and delegate its obligations hereunder, in whole or in part; provided , further , that any such assignee that acquires any FIG Shares shall, as a condition to acquiring the FIG Shares, agree to be bound by the provisions of any agreement applicable to the FIG Shares, including, but not limited to, the Registration Rights Agreement. The provisions hereof shall inure to the benefit of, and be binding upon, the successors and assigns of the parties hereto.
 
 
5.4
Amendment and Modification .
 
This Agreement may be amended, modified, superseded, canceled, renewed or extended, and the terms or covenants hereof may be waived, only by a written instrument executed by all of the parties hereto or, in the case of a waiver, by the party waiving compliance. Except as otherwise specifically provided in this Agreement, no waiver by either party hereto of any breach by the other party hereto of any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of a similar or dissimilar provision or condition at the same or at any prior or subsequent time.
 

 
5.5
Governing Law .
 
This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of Maryland, without giving effect to the principles of conflicts of laws thereof.
 
 
5.6
Headings .
 
Headings to the sections in this Agreement are intended solely for convenience, and no provision of this Agreement is to be construed by reference to the heading of any section.
 
 
5.7
Counterparts .
 
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same agreement.
 




 
 
5.8
Fees and Expenses .
 
Each party hereto shall pay the fees and expenses incurred by it in connection with the transactions contemplated herein. Without limiting the generality of the foregoing, Purchaser hereby agrees that FIG shall not be responsible for any expenses, taxes or other costs incurred by Purchaser in consummating the transactions contemplated herein, including legal and other professional fees and costs, income taxes, and sales or use taxes and that Purchaser shall be solely responsible for the payment of all such expenses, taxes and costs.
 
 
5.9
Severability .
 
Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms and provisions of this Agreement in any other jurisdiction.
 
 
5.10
Further Actions .
 
The parties hereto agree to execute such further instruments and to take such further actions as may reasonably be necessary to carry out the intent of this Agreement.
 
 
5.11
Brokers .
 
Each party hereto represents and warrants that, except as provided in the Membership Purchase Agreement, no agent, broker, investment banker, person or firm acting on behalf of or under the authority of such party hereto is or will be entitled to any broker's or finder's fee or any other commission directly or indirectly in connection with the transactions contemplated herein. Each party hereto further agrees to indemnify each other party for any claims, losses or expenses incurred by such other party as a result of the representation in this Section being untrue
 
IN WITNESS WHEREOF, the parties hereto have executed this Stock Acquisition Agreement as of the date first set forth above.
 
FIG :
 
 
FORTRESS INTERNATIONAL GROUP, INC.,
 
a Delaware corporation
     
 
By:
  
 
Name:
  
 
Title:
  



PURCHASER :
 
    
 
Name:
  



EXHIBIT A

REGISTRATION RIGHTS AGREEMENT





EXHIBIT D

SEPARATION FROM EMPLOYMENT AGREEMENT AND RELEASE
 
1.   This agreement is between the Executive, Thomas P. Rosato, the Executive’s spouse, family, agents and attorneys) (jointly, the "Executive") and Fortress International Group, Inc. (the "Company"), its subsidiaries, affiliated entities, direct or indirect owners and its and their respective officers, directors, employees, agents, predecessors, successors, purchasers, assigns, representatives, fiduciaries, and insurers (jointly, the "Released Parties").
 
2.   If the Executive signs this agreement and does not revoke it, the Executive will receive the applicable severance payments and benefits set forth in Section 5 of the Executive’s Executive Employment Agreement, dated __________ _____, 2006 (the "Employment Agreement").

1



3.   The Executive, deeming this Agreement to be fair, reasonable, and equitable, and intending to be legally bound hereby, agrees to and hereby does, forever and irrevocably fully release and discharge the Released Parties from any and all grievances, liens, suits, judgments, claims, demands, debts, defenses, actions or causes of action, obligations, damages (whether compensatory, punitive or otherwise), and liabilities whatsoever which the Executive now has, has had, or may have, whether the same be known or unknown, vested or contingent, at law, in equity, or mixed, in any way arising out of or relating in any way to any matter, act, occurrence, or transaction before the date of this General Release Agreement, including but not limited to his employment with Company, the Executive's separation from Company and the Executive's employment agreement with the Company (collectively, "Claims"). This is a General Release. The Executive expressly acknowledges that this General Release includes, but is not limited to, the Executive's release of any tort and contract claims, arbitration claims, claims under any local, state or federal wage and hour law, wage collection law or labor relations law, and claims of age, race, sex, religion, disability, national origin, ancestry, citizenship, retaliation or any other claim of employment discrimination, under the Civil Rights Acts of 1964 and 1991 as amended (42 U.S.C. §§ 2000e et   seq .), the Age Discrimination In Employment Act (29 U.S.C. §§ 621 et seq .), the Americans With Disabilities Act (42 U.S.C. §§ 12101 et   seq .), the Rehabilitation Act of 1973 (29 U.S.C. §§ 701 et   seq .), the Family and Medical Leave Act (29 U.S.C. §§ 2601 et   seq .), the Fair Labor Standards Act (29 U.S.C. §§ 201 et   seq .), and any other law prohibiting employment discrimination or relating to employment. Also, the Executive understands that this General Release Agreement is not an admission of liability under any statute or otherwise by the Released Parties, and that the Released Parties do not admit but deny any violation of his legal rights, and that he shall not be regarded as a prevailing party for any purpose, including but not limited to, determining responsibility for or entitlement to attorneys’ fees, under any statute or otherwise. The Executive agrees that in the event the Executive brings a Claim in which the Executive seeks damages or other relief from any Released Party, or in the event the Executive seeks to recover against any Released Party in any Claim brought by a governmental agency on the Executive’s behalf, this Agreement shall serve as a complete defense to such Claims.
 
4.   The claims and causes of action the Executive is releasing and waiving include, but are not limited to, any and all claims and causes of action that any Released Party:
 
·   has violated its personnel policies, handbooks, contracts of employment, or covenants of good faith and fair dealing between the Executive and the Company;
 

2



 
·   has discriminated against the Executive on the basis of age, race, color, sex (including sexual harassment), national origin, ancestry, disability, religion, sexual orientation, marital status, parental status, source of income, entitlement to benefits, any union activities or other protected category in violation of any local, state or federal law, constitution, ordinance, or regulation, including but not limited to: the Age Discrimination in Employment Act, as amended; Title VII of the Civil Rights Act of 1964, as amended; 42 U.S.C. § 1981, as amended; the Equal Pay Act; the Americans With Disabilities Act; the Family Medical Leave Act; the Employee Retirement Income Security Act; Section 510; and the National Labor Relations Act.
 
·   has violated any statute, public policy or common law (including but not limited to claims for retaliatory discharge; negligent hiring, retention or supervision; defamation; intentional or negligent infliction of emotional distress and/or mental anguish; intentional interference with contract; negligence; and/or detrimental reliance).
 
5.   Excluded from this Agreement are any claims which cannot be waived by law. The Executive is waiving, however, the Executive’s right to any monetary recovery should any agency, such as the EEOC, pursue any claims on the Executive’s behalf.
 
6.   The Executive also agrees that the Executive has been paid for all hours worked, including any overtime bonus or other incentive compensation, has submitted all invoices and expense reports, and has   not suffered any on-the-job injury for which the Executive has not already filed a claim.
 
7.   The Executive agrees that every term of this Agreement, including, but not limited to, the fact that an agreement has been reached and the amount paid, shall be treated by the Executive as strictly confidential, and expressly covenants not to display, publish, disseminate, or disclose the terms of this Agreement to any person or entity other than the Executive’s immediate family, the Executive’s attorney(s) (for purposes of seeking advice concerning this agreement only) and the Employee’s accountant(s) (for purposes of seeking tax advice only), unless compelled to make disclosure by lawful court order or subpoena.
 
8.   The Executive and the Company have entered into an Assignment of Invention, Non-Disclosure, Non-Solicitation and Non-Competition Agreement ("NDA Agreement"). The Executive reaffirms his obligation to comply with all of the post termination obligations in the NDA Agreement.

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9.   The Executive also agrees that:
 
·   The Executive is entering into this agreement knowingly and voluntarily;
 
·   The Executive has been advised by the Company to consult an attorney;
 
·   The Executive has been given the right to take [21/45] days (the "Consideration Period") to consider this agreement; provided, however the Employee and the Company hereby agree that if there is a dispute as to the payment of wages such that the Executive is unable to make the representation set forth in Section 6 as to payment for hours worked (including any overtime bonus or other incentive compensation), the Consideration Period shall terminate on the later of the natural expiration of the Consideration Period or the date that is one day after the resolution of all claims regarding wages;
 
·   But for the Executive's execution of this agreement, the Executive would not otherwise be entitled to the payments described in paragraph 2;
 
·   if any part of this agreement is found to be illegal or invalid, the rest of the agreement will be enforceable; and
 
·   this agreement has been individually negotiated between the Executive and the Company and is not part of a group exit incentive or other group employment termination program. The Executive and the Company agree that the sole reason for the termination of the Executive’s employment is a business reorganization and reduction in force of the Company’s [INSERT DEPARTMENT OR JOB CLASSIFICATION] which is occurring on [INSERT DATE]. All individuals who are being terminated in the [INSERT DATE] reduction in force will be eligible for benefits based upon their execution of a release identical to this release. The Executive acknowledges by signing this Agreement that the Executive understands that the Executive is eligible for the benefits which the Executive will receive contingent upon the Executive executing this release, because the Executive was part of this reduction in force. As is more fully set forth in Attachment B, this reduction in force will affect [NUMBER AFFECTED] other executives on [DATE].
 
10.   After the Executive signs this agreement, the Executive will have 7 days to revoke it. If the Executive wants to revoke it, the Executive should deliver a written revocation to __________ . If the Executive does not revoke it, the Executive will receive the payment described in Paragraph 2.

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EMPLOYEE:  
COMPANY:
 
      FORTRESS INTERNATIONAL GROUP, INC.
         
         
      [NAME AND TITLE]
         
Date:
 
 
Date:
 

 

 

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CONSIDERATION PERIOD
 
I, Thomas P. Rosato understand that I have the right to take at least [21/45] days to consider whether to sign this Separation From Employment and Release Agreement, which I received on _________________, 2006. If I elect to sign this Agreement before [21/45] days have passed, I understand I am to sign and date below this paragraph to confirm that I knowingly and voluntarily agree to waive the [21/45] -day consideration period.
 
 
    
 
Executive Signature
 
 
 
 
 
Date





ATTACHMENT B

SCHEDULE TO SEPARATION FROM EMPLOYMENT AGREEMENT AND RELEASE
 
On [Date], the employment of the following individuals (identified by job title and age), who will the [sole] holders of their job title, will be terminated in a reduction in force:
 
Job Title
Age


The employment of the following individuals (identified by age), who are the [sole] holders of their job title, will not be terminated on [Date] in the reduction in force.
 
Title
Age


 




EXHIBIT E
 
INVENTION ASSIGNMENT, NON-COMPETE
 
AND CONFIDENTIALITY AGREEMENT
 

The following confirms an Invention Assignment, Non-Compete and Confidentiality Agreement ("Agreement") between me and Fortress International Group, a Maryland corporation (the "Company," which term includes the Company’s Affiliates, subsidiaries and any assigns). The promises and commitments that I make in this Agreement are a material part of the Company’s consideration in my employment relationship with the Company.

1.
I understand and agree that my employment by the Company creates a duty of loyalty and a relationship of confidence and trust between me and the Company with respect to any information made known to me by the Company or by any client, customer or vendor of the Company or other person who submits information to the Company, or which may be learned by me during the period of my employment.
 
2.
I recognize that the Company is continuously engaged in activities that the Company regards as confidential, proprietary and/or legally protectable, which activities are at least in part intended to further the interests of the Company and to provide the Company with a competitive advantage. The Company possesses and will, in the future, continue to possess information that has been or will be created, discovered, developed or otherwise becomes known to the Company (including information created by, discovered or developed by, or made known to me) during the period of or arising out of my employment by the Company. I understand that various intellectual and other property rights have been assigned or otherwise conveyed to the Company. All information concerning the above described activities and information is collectively called "Proprietary Information" under this Agreement.
 
3.
By way of illustration, but not limitation, Proprietary Information includes: trade secrets, processes, formulas, data and know-how; software programs, improvements, and inventions; research and development plans, tools and techniques; new product introduction plans, specifications, requirements documents and strategies; manufacturing techniques, strategies and costs, expenses, supplier information and lists and distribution information; terms and conditions in contracts of all kinds; marketing plans, strategies and service; support strategies and procedures; development schedules; revenue forecasts; computer programs; copyrightable material, employee salaries, employee expertise, employee ability levels, training programs and procedures, copies of memos or presentations incorporating confidential information which I may have in my files (including those which I authored), patent applications and disclosures and customer lists.
 
4.
In consideration of my employment by the Company and the compensation received by me from the Company from time to time, I hereby agree as follows:
 

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(a)
All Proprietary Information shall be the sole property of the Company, and the Company shall be the sole owner of all patents, copyrights, trademarks and other rights related to Proprietary Information. I hereby assign to the Company any rights I may have or acquire in Proprietary Information. At all times, both during and after my employment by the Company, I will keep in confidence and trust all Proprietary Information, and I will not use or disclose any Proprietary Information or anything related to it without written consent of the Company, except as may be necessary in the ordinary course of performing my duties to the Company.
 
(b)
All documents, records, apparatus, equipment and other physical property, whether or not pertaining to Proprietary Information, furnished to me by the Company or produced by myself or others in connection with employment by the Company shall be and remain the sole property of the Company, shall be used by me solely for the benefit of the Company and shall be returned to the Company immediately as and when requested by the Company. Even if the Company does not so request, I shall return and deliver all such property to the Company upon termination of my employment by me or by the Company for any reason. I will not take with me any such property or any form of copy or reproduction of such property upon my termination.
 
(c)
I will promptly disclose to the Company, or any persons designated by it, all improvements, inventions, formulas, ideas, processes, techniques, know-how and data, whether or not patentable, made or conceived or reduced to practice or learned by me, either alone or jointly with others, during the period of my employment (all said improvements, inventions, formulas, ideas, processes, techniques, know-how and data shall be hereinafter collectively call "Inventions").
 
(d)
I agree that all Inventions that I develop or have developed (in whole or in part, either alone or jointly with others) and (i) use or have used equipment, supplies, facilities or trade secret information of the Company, or (ii) use or have used the hours for which I am to be or was compensated by the Company, or (iii) which relate to the business of the Company or to its actual or demonstrably anticipated research and development or (iv) which result, in whole or in part, from work performed by me for the Company shall be the sole property of the Company and its assigns, and the Company and its assigns shall be the sole owner of all patents, copyrights and other rights in connection therewith. I hereby assign to the Company any rights I may have or acquire in such Inventions. I further agree as to all such inventions and improvements to assist the Company in every proper way (but at the Company’s expense) to obtain and from time to time enforce patents, copyrights or other rights on said inventions and improvements in any and all countries, and to that end I will execute all documents in use for applying for and obtaining such patents and copyrights thereon and enforcing same, as the Company may desire, together with any assignments thereof to the Company or persons designated by it. My obligation to assist the Company in obtaining and enforcing patents, copyrights or other rights for such inventions and improvements in any and all countries shall continue beyond the termination of my employment, but the Company shall compensate me at a reasonable rate after such termination for time actually spent by me at the Company’s request on such assistance.
 

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(e)
In the event that the Company is unable for any reason whatsoever to secure my signature to any lawful and necessary document required to apply for or execute any patent, copyright or other applications with respect to such inventions and improvements (including renewals, extensions, continuations, divisions or continuations in part thereof), I hereby irrevocably designate and appoint the Company and its authorized officers and agents, as my agents and attorneys-in-fact, this power of attorney being coupled with an interest, to act for and in my behalf and instead of me, to execute and file any such application and to do all other lawfully permitted acts to further the prosecution and issuance of patents, copyrights or other rights thereon with the same legal force and effect as if executed by me.
 
(f)
As a matter of record, on Attachment A , I have attached a complete list of all inventions or improvements relevant to the subject matter of my employment by the Company which have been made or conceived or first reduced to practice by me alone or jointly with others prior to my employment with the Company that I desire to remove from the operation of this Agreement, and I covenant that such list is complete. If no such list is signed by me and attached to this Agreement, I represent and warrant that I have no such inventions or improvements at the time of signing this Agreement, and I agree that I will make no claim against the Company with respect to any such inventions or ideas.
 
(g)
I represent that my performance of all the terms of this Agreement will not breach any agreement to keep in confidence proprietary information acquired by me in confidence or in trust prior to my employment by the Company. I have not entered into, and I agree I will not enter into, any agreement either written or oral in conflict with this Agreement.
 
(h)
I acknowledge that the Company from time to time may be involved in government projects of a classified nature. I further acknowledge that the Company from time to time may have agreements with other persons or governmental agencies which impose obligations or restrictions on the Company regarding inventions made during the course of work thereunder or regarding the confidential nature of such work or information disclosed in connection therewith. I agree to be bound by all such obligations and restrictions and to take all action necessary to discharge the obligations of the Company thereunder.
 
(i)
I represent and warrant that execution of this Agreement, my employment with the Company and my performance of my proposed duties to the Company in the development of its business have not and will not violate any obligations which I may have to any former employer.
 

3



 
(j)
I agree that at no time during my employment by the Company or thereafter shall I make, or cause or assist any other person to make, any statement or other communication to any third party which impugns or attacks, or is otherwise critical of, the reputation, business or character of the Company or any of its Affiliates or any of their respective directors, officers or employees.
 
5.
This Agreement shall be effective as of the first day of my employment by the Company.
 
6.
This Agreement may not be changed, modified, released, discharged, abandoned or otherwise amended, in whole or in part, except by an instrument in writing, signed by myself and a majority of the members of the Board. I agree that any subsequent change or changes in my duties, salary or compensation shall not affect the validity or scope of this Agreement.
 
7.
I acknowledge receipt of this Agreement and agree that with respect to the subject matter hereof it is my final, complete and exclusive agreement with the Company, superseding any previous oral or written representations, understanding or agreements with the Company or any officer or representative with respect to the subject matter herein.
 
8.
In the event that any paragraph or provision of this Agreement shall be held to be illegal or unenforceable, such paragraph or provision shall be modified to the extent necessary to give effect to the intent of the parties or, if necessary, severed from this Agreement and the entire Agreement shall not fail on account thereof, but shall otherwise remain in full force and effect.
 
9.
This Agreement shall be construed in accordance with the laws of the State of Maryland without regard to its choice of law principles.
 
10.
This Agreement shall be binding upon me, my heirs, executors, assigns, and administrators and shall inure to the benefit of the Company, its successors and assigns.
 
I acknowledge that the foregoing restrictions contained in Section 4 are reasonable in all respects including the scope, duration and geographic limitations. I agree that the restrictions are an appropriate means of protecting the Company’s legitimate business interests, and no greater than necessary to protect the Company’s interests. I acknowledge that these restrictions will not unreasonably interfere with my ability to make a living.
 
 
Dated: __________ _____, 2006

    
 
Executive Signature
 
Thomas P. Rosato

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Accepted and Agreed to:

Fortress International Group, Inc.


By:                                  

 
Name: Harvey L. Weiss
Title: Chairman

Date:                                  


 

5


 



EXECUTIVE EMPLOYMENT AGREEMENT
 
This EXECUTIVE EMPLOYMENT AGREEMENT (this " Agreement "), effective this 19th day of January, 2007 (" Effective Date "), between FORTRESS AMERICA ACQUISITION CORPORATION, a Delaware corporation (the " Company ") and GERARD J. GALLAGHER (the " Executive ").
 
WITNESSETH
 
WHEREAS, Executive and Thomas P. Rosato (“ Rosato ”) were all of the members of VTC, LLC, a Maryland limited liability company (“ VTC ”) and Vortech, LLC (“ Vortech ”).
 
WHEREAS, by the terms of a Second Amended and Restated Membership Interest Purchase Agreement dated July 31, 2006 (the “ Purchase Agreement ”)by and among the Company, the Executive, Rosato, VTC and Vortech, Company purchased from Executive and Rosato all of their respective membership interests in each of VTC and Vortech.
 
WHEREAS as an inducement for and condition to the Company entering into and executing and delivering the Purchase Agreement, the Company requires that the Employee enter into this Agreement for the purpose of retaining the Executive’s services upon the terms and conditions set forth below.
 
WHEREAS, the Executive is willing to provide services to the Company upon the terms and conditions set forth herein.
 
NOW THEREFORE, in consideration of the promises and the mutual agreements contained herein, intending to be legally bound, the parties agree as follows:
 
1.    DEFINITIONS
 
The following words and terms shall have the meanings set forth below for the purposes of this Agreement:
 
1.1.    Affiliates . " Affiliates " of a Person, or a Person " affiliated " with another Person, are any Persons which, directly or indirectly, through one or more intermediaries, controls or are controlled by or are under common control with, the Person specified.
 
1.2.    Base Salary . " Base Salary " shall have the meaning set forth in Section 3.1 hereof.
 
1.3.    Board . " Board " means the Company’s Board of Directors.
 
1.4.    Cause.
 
1.4.1    Termination of the Executive’s employment for " Cause " shall mean any of the following:
 
 
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(i)   any act that would constitute a material violation of the Company’s material written policies provided that the Company specifically terminates the Executive's employment for Cause hereunder within 120 days from the date the Company has actual notice of such;
 
(ii)   intentionally engaging in conduct materially and demonstrably injurious to the Company provided that the Company specifically terminates the Executive's employment for Cause hereunder within 120 days from the date the Company has actual notice of such; or
 
(iii)   conviction of (1) a crime of embezzlement or a crime involving moral turpitude; (2) a crime with respect to the Company involving a breach of trust or dishonesty; or (3) in either case, a plea of guilty or no contest to such a crime provided that the Company specifically terminates the Executive's employment for Cause hereunder within 120 days from the date the Company has actual notice of such.
 
1.4.2    In any case, if the Company desires to terminate the Executive's employment for Cause in accordance with Sections 1.4.1(i), (ii) or (iii), it shall first give written notice of the facts and circumstances providing the basis for Cause to the Executive, and to allow the Executive 30 days from the date of such notice to remedy, cure or rectify, if possible, the situation giving rise to the Company's allegations of Cause (the "Cure Period"); provided, however, that the Executive shall have only one such opportunity to cure, regardless of the grounds on which Cause is asserted, during the Employment Period. During the Cure Period, the Executive may not be entitled to payment of any compensation, in the Company's sole discretion; provided, however, that if the Executive's compensation is withheld and the Executive successfully remedies, cures, or rectifies the situation giving rise to the Company's notice of Cause during the Cure Period, resulting in the Company's withdrawal of its written notice of Cause, the Executive shall be compensated for the Cure Period.
 
1.4.3    A termination for Cause after a Change in Control shall be based only on events occurring after such Change in Control; provided, however, the foregoing limitation shall not apply to an event constituting Cause which was not discovered by the Company prior to a Change in Control.
 
1.4.4    Cause shall be determined in good faith by the affirmative vote of a majority of the whole Board (excluding the Executive if the Executive is a member of the Board).
 
1.4.A   Change in Control of the Company . " Change in Control of the Company " means (a) a sale, transfer or exclusive licensing by the Company of all or substantially all of the assets of the Company and its Subsidiaries on a consolidated basis (measured by either book value in accordance with United States generally accepted accounting principles consistently applied or fair market value determined in the reasonable good faith judgment of the Board) in any transaction or series of transactions (other than sales in the ordinary course of business); (b) any sale, transfer or issuance or series of sales, transfers and/or issuances of shares of the Company's capital stock by the Company or any holders thereof which results in any Person or Persons, other than the holders of Company’s capital stock as of the date hereof, owning capital stock of the Company possessing the voting power (under ordinary circumstances) to elect a majority of the Board; (c) the stockholders of the Company approve a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 50% of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or (d) the stockholders of the Corporation approve a plan of complete liquidation of the Company.
 
 
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1.5.    Date of Termination . " Date of Termination " shall mean (a) if the Executive’s employment is terminated by reason of the Executive’s death, the date of the Executive’s death, or (b) if the Executive’s employment with the Company and its Subsidiaries is terminated for any reason other than the Executive’s death, the date on which Executive ceases to be an employee of the Company and its Subsidiaries.
 
1.6.    Disability .   Termination of the Executive’s employment with the Company and its Subsidiaries based on " Disability " shall mean termination of the Executive’s employment at the Company’s sole discretion, upon thirty (30) days prior written notice in the event the Executive becomes “Disabled,” as defined in any group term disability insurance maintained by the Company applicable to the Executive, or, (b) if the Company shall not maintain such insurance, the determination by an independent physician acting reasonably and in good faith that the Executive is incapacitated by reason of a physical or mental illness which is long-term in nature and which prevents the Executive from performing the substantial and material duties of his employment with the Company, provided that such incapacity can reasonably be expected to prevent the Executive from working at least six (6) months in any twelve (12) month period. The Company may require the Executive to have the examination described in the preceding sentence at any time for the purpose of determining whether the Executive has a long-term disability, and the Executive agrees to submit to such examination upon request of the Board; provided that the Company shall pay all costs and expenses associated with such examination. This Section 1.6 shall be interpreted and applied consistently with the Americans with Disabilities Act, the Family and Medical Leave Act and other applicable law.
 
1.7.    Good Reason . Termination of the Executive’s employment by the Executive for a " Good Reason " shall mean termination by the Executive because of: (a) a requirement to move the Executive’s primary place of business more than twenty-five (25) miles from the office the Executive works in on the date hereof (which termination occurs prior to such move) without the written consent of the Executive, (b) failure of the Company to pay any installment of the Executive’s Base Salary when such installment is due pursuant to this Agreement, which failure is not cured within fifteen (15) days; (c) any other breach or breaches of this Agreement by the Company, which breaches are, singularly or in the aggregate, material, and which are not cured within thirty (30) days of written notice of such breach or breaches to the Company by the Executive; or (d) a reduction by the Company of the Executive’s Base Salary without the express written consent of the Executive.
 
 
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1.8.    Person . " Person " means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, any other business entity and a governmental entity or any department, agency or political subdivision thereof.
 
1.9.    Restrictive Period . For purposes of this Agreement the term “ Restrictive Period ” shall have the following meanings.
 
1.9.1    If the Executive’s employment is terminated prior to the third (3 rd ) anniversary of the Closing Date, then the Restrictive Period shall be the period from the Termination Date through the third anniversary of the Closing Date (or if the Termination Date is within twelve (12) months of the third anniversary of the Closing Date), then for a period of one (1) year measured from the Termination Date through the first anniversary of the Termination Date.
 
1.9.2    Subject to Section 7.4 hereof, If the Executive’s employment is terminated after the third anniversary of the Closing Date, then the Restrictive Period shall be the twelve month period measured from the Termination Date through the first anniversary of the Termination Date.
 
1.10.    Subsidiary . " Subsidiary " means, with respect to any Person, any corporation, limited liability company, partnership, association or other business entity of which (a) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (b) if a limited liability company, partnership, association or other business entity, a majority of the partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a limited liability company, partnership, association or other business entity if such Person or Persons shall be allocated a majority of limited liability company, partnership, association or other business entity gains or losses or shall be or control any managing director or general partner of such limited liability company, partnership, association or other business entity.
 
2.    EMPLOYMENT
 
2.1.    Employment Period .
 
2.1.1    Expressly conditioned upon the closing (the “ Closing ”) under the Purchase Agreement and effective as of the date of the Closing (the “ Closing Date ”), the Company hereby employs the Executive, and the Executive hereby accepts said employment and agrees to render services to the Company, on the terms and conditions set forth in this Agreement for the period (the " Employment Period ") beginning on the Closing Date and ending when such period is terminated pursuant to the terms hereof. Unless earlier terminated by either the Company or the Executive as hereinafter provided, the Employment Period shall continue through the third (3 rd ) anniversary of the Closing Date (" Expiration Date "); provided, however, that if this Agreement is renewed pursuant to Section 2.1.2) below, then the “Expiration Date” for the then current “Renewal Term” (as hereinafter defined) shall be the date that is last day of the one year period of any Renewal Term. Notwithstanding anything to the contrary continued in this Section 2.1.1 , if the Closing under the Purchase Agreement does not occur, this Agreement shall be null and void and of no force and effect.
 
 
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2.1.2    This Agreement shall be automatically renewed for an additional one year period commencing at the expiration of the initial Employment Period or any subsequent renewal term (each, a " Renewal Term ") unless the Company provides written notice of termination to the Executive not less than sixty (60) days prior to the Expiration Date. Notwithstanding the foregoing or anything else in this Agreement to the contrary, the Employment Period shall immediately terminate prior to any Expiration Date (i) upon Executive’s death, Disability or termination for a Good Reason or (ii) upon termination by the Company for Cause; in all other circumstances, thirty (30) days' prior written notice is required by either party to the other to terminate this Agreement.
 
2.2.    Duties .   During the Employment Period, the Executive shall devote the Executive's full working time and attention and use the Executive's best efforts and skill to further the interests of the Company. The Executive shall, to the best of his ability, execute the strategic plan of the Company as approved by the Board, perform his duties, adhere to the Company’s published policies and procedures, promote the Company’s interests, reputation, business and welfare, and work actively with the Board and other senior managers to help augment the existing business base, increase the corporate contract backlog and identify and develop new business opportunities. The Executive shall perform such services for the Company as is consistent with the Executive's position (subject to the power and authority of the Board to expand or limit such services and to overrule actions of officers of the Company) and as lawfully directed, from time to time, by the Board. During the Employment Period, the Executive’s title shall be President and Chief Operating Officer. During the Employment Period the Executive shall report to the Board, and Executive may use such additional titles as assigned and approved by the Board. The Executive shall not, during the Employment Period, be employed or involved in any other business activity for gain, profit or other pecuniary advantage. Notwithstanding the foregoing, the Executive may (a) volunteer services for or on behalf of such religious, educational, non-profit and/or other charitable organization as the Executive may wish to serve; and (b) manage his personal, financial and legal affairs, so long as such activities do not interfere with the performance of his duties and responsibilities to the Company as provided hereunder or violate any of the terms of this or any other agreement entered into with the Company. The Executive acknowledges that the Executive may be required to travel on business in connection with the Executive's performance of the Executive's duties hereunder, but that the Executive's base will be the location of the Company’s headquarters in Columbia or Beltsville, Maryland or such other location as determined by the Board.
 
2.3.    Insurance . The Company may, at its discretion, apply for and procure in its own name and for its own benefit life and/or disability insurance on the Executive in any amount or amounts considered available. The Executive agrees to cooperate in any medical or other examination, supply any information and execute and deliver any applications or other instruments in writing as may be reasonably necessary to obtain and constitute such insurance. The Executive hereby represents that the Executive has no reason to believe that the Executive's life is not insurable at rates now prevailing for a healthy person of the Executive's gender and age.
 
 
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2.4.    Corporate Opportunity . The Executive agrees that, unless approved by the Board, he will not take personal advantage of any business opportunities which arise during his employment with the Company and which may be of benefit to the Company. All material facts regarding such opportunities must be promptly reported to the Board for consideration by the Company.
 
3.    COMPENSATION AND BENEFITS
 
3.1.    Base Salary . During the Employment Period, the Company shall pay the Executive an initial base salary of Four Hundred Twenty Five Thousand Dollars ($425,000.00) per year (" Base Salary ") paid in approximately equal installments bi-weekly. The Company will review the Executive’s Base Salary on December 31 of each year of the Employment Period in order to determine what Base Salary adjustments, if any, shall be made, subject to an annual minimum increase of five percent (5%), but in no event may the Executive's Base Salary be reduced below that paid in the preceding year.
 
3.2.    Annual Bonus . For calendar year 2006 (ending on or about December 31, 2006) and for each other calendar year that begins during the Employment Period (each such calendar year, a " Bonus Year "), the Executive shall be eligible to receive a bonus in an amount and on such terms as are established by the Company's Board up to fifty percent (50%) of the Base Salary (each, a " Bonus ") in accordance with the bonus plan or formula applicable to the Executive. The 2006 Bonus shall be prorated to reflect that the 2006 Bonus Year is a partial year commencing on the Closing Date and ending on December 31, 2006. In addition, the Executive shall be eligible for any other bonus as the Board may determine in its sole discretion. Any Bonus for an applicable calendar year, or portion thereof, shall be paid to the Executive no later than the conclusion of the first calendar quarter following each calendar year.
 
3.3.    Vacation and Benefits .   The Executive shall continue to receive vacation, health insurance and other employee benefits as the Company makes available to other executives, as may exist at any particular time and from time to time during the Executive’s employment.
 
3.4.    Withholding . All payments required to be made by the Company hereunder to the Executive shall be subject to the withholding of such amounts, if any, relating to tax and other payroll deductions as the Company may reasonably determine should be withheld pursuant to any applicable law or regulation.
 
 
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3.5.    Policies, Procedures & Benefit Plans . Except as otherwise provided herein, the Executive’s employment shall be subject to the policies and procedures which apply generally to the Company’s employees as the same may be interpreted, adopted, revised or deleted from time to time, during the Employment Period, by the Board in its sole discretion. The Executive agrees to comply with such policies and procedures in all material respects. During the Employment Period, the Executive shall be entitled to participate in any Company benefit plans on the same basis as other executive level employees of the Company. The Board reserves the right to change, alter, or terminate benefits, plans and carriers in its sole direction. All matters of eligibility for coverage or benefits under any health, hospitalization, life, disability, or other insurance plan, program or policy shall be determined in accordance with the provisions of the plan, program, or policy; the Company shall not be liable to the Executive, the Executive’s family, heirs, executors, or beneficiaries, for any payment payable or claimed to be payable under any such benefit plan, program, or policy. Provided that the Executive can be insured at standard rates, the Company shall maintain the Executive’s existing life insurance policy(ies) as set forth on Exhibit A attached hereto, or if it is not possible to continue the existing policies, then provide the Executive a $1,000,000 life insurance policy with a reputable and responsible insurance company acceptable to the Company and the Executive.
 
3.6.    Stock Bonus. Subject to Section 3.6.4 below, as of July 13, 2008 (the period between the Effective Date and July 13, 2008 being hereinafter referred to as the “ Stock Bonus Period ”), Executive shall be entitled to receive up to Five Million Dollars ($5,000,000.00) worth of the Company’s common stock (the “ Stock Bonus ”) depending on whether during the Stock Bonus Period the highest average closing price of the Company’s common stock (on the Nasdaq OTC market or such other recognized stock market on which the Company’s stock is then being traded on) for sixty (60) consecutive trading days (the “ Highest Average Trading Price ”) exceeds the applicable “Stock Bonus Closing Price Thresholds” set forth below.
 
3.6.1    For purposes of this Agreement (A) the “ Stock Bonus Closing Price Thresholds ” are as follows (each of which is individually referred to as a “ Stock Bonus Closing Price Threshold ”); (B) the “ Stock Bonus Threshold Share Value ” for each Stock Bonus Closing Price Threshold shall be the dollar amount ($500,000, $1,000,000, $1,500,000 or $2,000,000 as the case may be) for that Stock Bonus Closing Price Threshold as set forth below; (C) the “ Minimum Threshold Share Price ” with respect to each Stock Bonus Closing Price Threshold is the maximum price per share that is within that Stock Bonus 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 Stock Bonus 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).
 
(i)    If during the Stock Bonus Period the Highest Average Trading Price never exceeds Nine Dollars ($9.00) per share, then no Company common stock shall be issuable to Executive at the end of the Stock Bonus Period.
 
(ii)    If during the Stock Bonus Period the Highest Average Trading Price is in excess of Nine Dollars ($9.00), then Executive shall be entitled to receive Five Hundred Thousand Dollars ($500,000.00) of Company common stock.
 
(iii)    If during the Stock Bonus Period the Highest Average Trading Price is in excess of Ten Dollars ($10.00), then Executive shall be entitled to receive, in addition to the Company common stock referenced in Section 3.6.1(ii) above, an additional One Million Dollars ($1,000,000.00) of Company common stock.
 
(iv)    If during the Stock Bonus Period the Highest Average Trading Price is in excess of Twelve Dollars ($12.00), then Executive shall be entitled to receive, in addition to the Company common stock referenced in Sections 3.6.1(ii) and (iii) above, an additional One Million Five Hundred Thousand Dollars ($1,500,000.00) of Company common stock.
 
 
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(v)    If during the Stock Bonus Period the Highest Average Trading Price is in excess of Fourteen Dollars ($14.00) per share, then Executive shall be entitled to receive , in addition to the Company common stock referenced in Sections 3.6.1(ii) -(iv) above, an additional Two Million Dollars ($2,000,000.00) of Company common stock (based on the Highest Average Trading Price).
 
3.6.2    Determination of Company Shares Payable as Stock Bonus. The number of shares Company common stock to be issued as the Stock Bonus shall be determined at the end of the Stock Bonus Period as follows:
 
(i)    determining the Highest Average Trading Price during the Stock Bonus Period;
 
(ii)    determining which Stock Bonus Closing Price Thresholds are applicable (the applicable Stock Bonus Thresholds being (y) the Stock Bonus Closing Price Thresholds for which the Highest Average Trading Price falls within the applicable Threshold Share Price Range (the “ Maximum Stock Bonus Closing Price Threshold ”) and (z) all other Stock Bonus Price Thresholds for which the Highest Average Trading Price exceeds the applicable Threshold Share Price Range (collectively with the Maximum Stock Bonus Closing Price Threshold referred to as the “ Effected Stock Bonus Closing Price Thresholds ”)); and
 
(iii)    dividing the applicable Stock Bonus Threshold Share Value for each of the Effected Stock Bonus Closing Price Thresholds by the applicable Minimum Threshold Share Price for each of the Effected Stock Bonus Closing Price Thresholds (other than the Maximum Stock Bonus Closing Price Threshold for which the Stock Bonus Share Value shall be divided by the Highest Average Trading Price).
 
FOR EXAMPLE
 
If at the end of the Stock Bonus Period the Highest Average Trading Price was $14.50; then (A) the Effected Stock Bonus Closing Price Thresholds consists of all of the Stock Bonus Closing Price Thresholds; and (B) the division of (y) the Stock Bonus Threshold Share Value for each of the Effected Stock Bonus Closing Price Thresholds by the Minimum Threshold Share Price for each of the Effected Stock Bonus Closing Price Thresholds other than the Maximum Stock Bonus Closing Price Threshold and (z) the Stock Bonus Share Value for the Maximum Stock Bonus Closing Price Threshold by the Highest Average Trading Price results in the following:
 
 
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$500,000 ∕ $9.01 per share   =   55,493 shares  
$1,000,000 ∕ $10.01 per share   =     99,900 shares  
$1,500,000 ∕ $12.01 per share   =   124,895 shares  
$2,000,000 ∕ $14.50 per share   =   137,931 shares  
Total Stock Bonus   418,219 shares  
 
The determination of the Highest Average Trading Price and the calculation of the number of shares of Company stock that are issuable to the Executive as Stock Bonus shall be made as follows. Not later than twenty (20) Business Days after the Stock Bonus Period, the Company’s senior financial executive shall provide Executive with a statement (the “ Stock Bonus Statement ”) setting forth the calculation of the Stock Bonus that shall include the calculations used to determine the Stock Bonus. Executive shall have fifteen (15) days following delivery of the Stock Bonus Statement (the “ Stock Bonus Notice Period ”) to disagree with Stock Bonus Statement by written notice to the Company setting forth in reasonable detail the amount and nature of the disagreement (each an “ Stock Bonus Dispute Notice ”). If the Company does not receive a Stock Bonus Dispute Notice from Executive within the Stock Bonus Notice Period, Executive shall be conclusively presumed to agree with the Stock Bonus Statement and the Company shall promptly issue the Stock Bonus shown to be due on the Stock Bonus Statement to Executive pursuant to Section 3.6.3 below. If the Company receives a Stock Bonus Dispute Notice from Executive within the Stock Bonus Notice Period then the dispute shall be resolved pursuant to Section 9 below.
 
3.6.3    Delivery of Stock Bonus. The Company shall deliver, or shall cause to be delivered to Executive stock certificates for any Stock Bonus.
 
3.6.4    Forfeiture of Stock Bonus. Notwithstanding anything to the contrary contained in this Section 3.6 , if during the Stock Bonus Period Executive’s employment is terminated pursuant to Section 5.1 of this Agreement, then Executive shall forfeit any and all rights in and to the Stock Bonus.
 
3.6.5    Fractional and Restricted Shares; Acquisition Agreement
 
(i)    Fractional Shares . If the calculation of the number of shares of Company common stock to be received as the Stock Bonus pursuant to this Section 3.6   would result in the issuance of fractional shares, then the number of shares of Company common stock that Executive would otherwise receive as the Stock Bonus shall be rounded down to the nearest whole number of shares (which shall be the Stock Bonus payable to Executive and Executive shall receive as cash the amount attributable to the fractional interest.
 
(ii)    Restricted Shares . The shares of Company common stock to be issued pursuant to this Agreement as Stock Bonus (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 Bonus shall bear, in addition to any other legends required under applicable securities laws, the following legend:
 
 
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“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.”
 
(iii)    Stock Acquisition Agreement . In connection with and as a precondition to receipt of any Stock Bonus, Employee shall execute and deliver to Company a Stock Acquisition Agreement substantially in the form of Exhibit B attached hereto and incorporated herein and all such other documentation as may reasonably be required by Company.
 
4.    SUPPORT AND EXPENSES
 
4.1.    Office . During the Employment Period the Company shall provide Executive with   furnished offices in the Company’s headquarters (which shall be consistent with the Executive’s duties and sufficient for the efficient performance of those duties, all in the reasonable determination of the Board) .
 
4.2.    Expenses . During the Employment Period, including following any Date of Termination for appropriate expenses incurred on or prior to the Date of Termination, the Company shall reimburse the Executive promptly or otherwise provide for or pay for all pre-approved reasonable expenses incurred by the Executive in furtherance of, or in connection with, the business of the Company or its Subsidiaries, consistent with the Company’s policies in effect from time to time with respect to travel, entertainment and other business expenses, subject to such reasonable documentation and other limitations as may be established from time to time by the Board, including against presentation of vouchers or receipts therefor.
 
5.    TERMINATION
 
5.1.    Termination Due to Death or Disability, For Cause or By the Executive . If the Employment Period is terminated (a) by reason of the Executive’s death or Disability; (b) by the Company for Cause; or (c) by the Executive (other than for a Good Reason); then the Executive shall only be entitled to receive the Executive’s Base Salary and the reimbursement of any applicable expenses pursuant to Section 4.2 through the Date of Termination, and the Executive shall have no right to any other compensation thereafter (including without limitation pursuant to Section 3.1 and 3.2 of this Agreement, but not including Section 5.3 ). No Person shall be entitled hereunder to participate in any employee benefit plan after the Date of Termination if the Employment Period is terminated in connection with this Section 5.1 , except as otherwise expressly required by applicable law (i.e., COBRA) and provided that nothing herein shall be interpreted to limit the Executive’s conversion rights, if any, under any of the Company’s employee benefit plans.
 
 
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5.2.    Termination by the Company Other Than for Death, Disability, or Cause or by the Executive for a Good Reason . In addition to the payment to the Executive of the Executive's Base Salary and the reimbursement of any applicable expenses pursuant to Section 4.2 through the Date of Termination, if (a) the Employment Period is terminated (i) by the Company for reasons other than death, Disability, or Cause, or (ii) by the Executive for a Good Reason, or (iii) in accordance with the terms of Section 2.1(b) hereof (provided the Company provides the requisite notice to the Executive to terminate prior to any Expiration Date); and (b) the Executive executes a general release in the form attached hereto as Exhibit C (the " Release ") on or before the effective Date of Termination; and (c) the Executive has not breached the terms of the “Assignment Agreement” (as defined below); then the Company shall pay the Executive an amount equal to the Executive’s Base Salary (at the rate in effect at the Date of Termination) for a period commencing on the Date of Termination and on the Expiration Date; provided, however , that if the Termination Date is within twelve (12) months of the Expiration Date, then the Company shall pay the Executive an amount equal to the Executive’s Base Salary (at the rate effective as of the Termination Date), for a period commencing on the Termination Date and ending on the first (1 st ) anniversary of the Termination Date. Any payment under this Section 5.2 shall be made over time as though the Executive continued to be employed by the Company. If the Executive elects and remains eligible for health coverage pursuant to Section 4980B of the Internal Revenue Code of 1986, as amended (" COBRA ") (and subject to withholding pursuant to Section 3.5 above); then commencing   within fifteen (15) business days following the date on which the Release becomes effective pursuant to its terms, the Company will, for a period commencing on the Date of Termination and ending twelve (12) months from the Date of Termination, pay a percentage of the premium for such COBRA health coverage equal to the percentage of the premium for health insurance coverage paid by the Company on the Date of Termination. The Executive shall not be entitled to any other salary or compensation after termination of the Employment Period (other than as set forth in this Section 5.2 and Section 5.3 ) and no Person shall be entitled hereunder to participate in any employee benefit plan after the Date of Termination if the Employment Period is terminated in connection with this Section 5.2 , except as otherwise specifically provided hereunder or as required by applicable law (i.e., COBRA) and provided that nothing herein shall be interpreted to limit the Executive’s conversion rights, if any, under any of the Company’s employee benefit plans. In furtherance of and not in limitation of the foregoing, the Executive may only be terminated by the affirmative vote of a majority of the whole Board (excluding the Executive if he is a member of the Board).
 
5.3.    Cooperation with Company After Termination of Employment .   For a period of six (6) months following termination of the Employment Period for any reason, as such period may be extended with the consent of the Executive, the Executive shall fully cooperate with the Company in all matters relating to the winding up of pending work on behalf of the Company including, but not limited to, any litigation in which the Company is involved, and the orderly transfer of any such pending work to other executives of the Company as may be designated by the Company. The Executive shall be compensated for any time spent pursuant to this Section 5.3 at the specific request of the Company at a per   diem amount based upon the Executive's Base Salary at the Date of Termination.
 
5.4.    Termination by Mutual Consent . Notwithstanding any of the foregoing provisions of this Section 5 , if at any time during the course of this Agreement the parties by mutual consent decide to terminate it, they shall do so by separate agreement setting forth the terms and conditions of such termination.
 
 
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6.    INVENTION, ASSIGNMENT, NON-COMPETE AND CONFIDENTIALITY AGREEMENT
 
6.1.    The parties hereto have entered into an Invention, Assignment, and Confidentiality Agreement attached hereto as Exhibit D (the " Assignment Agreement "), which may be amended by the parties from time to time pursuant to the terms thereof. The provisions of the Assignment Agreement are intended by the parties to survive and shall survive termination or expiration of the Employment Period and this Agreement.
 
7.  
NON-SOLICITATION CUSTOMERS OR EMPLOYEES; NON-COMPETITION
 
7.1.    Covenant Not-to-Solicit Customers. Subject to Section 7.4 below, during Executive's employment with the Company through the applicable Restrictive Period, the Executive shall not directly or indirectly, individually or on behalf of any other person or entity, whether as principal, agent, stockholder, employee, consultant, representative or in any other capacity, solicit any person or entity, that:
 
(a)    is a customer or client of the Company or any of its subsidiaries as of the Termination Date; or
 
(b)    has been a customer or client of the Company or any of its subsidiaries at any time within two (2) years prior to the Termination Date; or
 
(c)    is a prospective customer or client that the Company or any of its subsidiaries is actively soliciting as of the Termination Date.
 
7.2.    Covenant Not-to-Solicit Employees. Subject to Section 7.4 below, during Executive's employment with the Company and from the Termination Date through the applicable Restrictive Period, the Executive shall not directly or indirectly, individually or on behalf of any other person or entity, whether as principal, agent, stockholder, employee, consultant, representative or in any other capacity:
 
(a)    recruit, solicit or encourage any person to leave the employ of the Company or any of its subsidiaries; or
 
(b)    hire any employee of the Company or any of its subsidiaries as a regular employee, consultant, independent contractor or otherwise.
 
7.3.    Non-Competition. The Executive recognizes and acknowledges the competitive and proprietary nature of the business operations of the Company and its subsidiaries. Subject to Section 7.4 below, during the Executive’s employment with the Company and for the applicable Restrictive Period, the Executive shall not, without the prior written consent of the Company, for himself or on behalf of any other person or entity, directly or indirectly, whether as principal, agent, stockholder, employee, consultant, representative or in any other capacity, own, manage, operate or control, or be concerned, connected or employed by, or otherwise associate in any manner with, engage in or have a financial interest in any business that competes with the business operations of the Company or any of its subsidiaries, except that nothing contained herein shall preclude the Executive from purchasing or owning stock in any such competitive business if such stock is publicly traded, and provided that his holdings do not exceed one percent (1%) of the issued and outstanding capital stock of such business.
 
 
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7.4.    Reduction and Extension of Restrictions.  
 
(a)    If the Termination Date with respect to the Executive’s termination occurs on or before the third (3 rd ) anniversary of the Closing Date, then the provisions of Sections 7.1, 7.2 and 7.3 above apply to Executive regardless of the reason for the termination. If the Termination Date with respect to the Executive’s termination occurs after the third anniversary of the Closing Date, then the provisions of Sections 7.1, 7.2 and 7.3 above apply only to terminations made pursuant to Section 5.1 and shall not apply with respect to terminations made pursuant to Section 5.2 .
 
(b)    The Company at Company’s option, by written notice delivered to Executive not less than thirty (30) days prior to the expiration of the then current, applicable Restrictive Period, may extend the Restrictive Period (as previously extended under this Section 7.4(b)) for an additional twelve (12) months, provided that Company pays to Executive during the extended Restrictive Period an amount equal to the Executive’s Base Salary (at the rate effective as of the applicable Termination Date and over time and in the manner Executive would have received these payments had he continued to be employed by the Company).
 
7.5.    Non-Disparagement. The Executive agrees not to make any public statement, or engage in any conduct, that is disparaging to the Company, or any of its employees, officers, directors or shareholders, including, but not limited to, any statement that disparages the products, services, finances, financial condition, capabilities or other aspects of the business of the Company. Notwithstanding any term to the contrary herein, the Executive shall not be in breach of this Section 7 for the making of any truthful statements under oath.
 
7.6.    Reasonableness of Restrictions. The Executive has carefully read and considered the provisions of this Section 7 , and, having done so, agrees (a) that the restrictions set forth herein are reasonable, in terms of scope, duration, geographic area, and otherwise, (b) that the protection afforded to the Company hereunder is necessary to protect its legitimate business interests, (c) that the agreement to observe such restrictions form a material part of the consideration for this Agreement and the Executive's employment by the Company and (d) that upon the termination of the Executive’s employment with the Company for any reason, he will be able to earn a livelihood without violating the foregoing restrictions. In the event that, notwithstanding the foregoing, any of the provisions of this Section 7 shall be held to be invalid or unenforceable, the remaining provisions thereof shall nevertheless continue to be valid and enforceable as though the invalid or unenforceable parts had not been included therein. In the event that any provision of this Section relating to the time period and/or the areas of restriction and/or related aspects shall be declared by a court of competent jurisdiction to exceed the maximum restrictiveness such court deems reasonable and enforceable, the time period and/or areas of restriction and/or related aspects deemed reasonable and enforceable by the court shall become and thereafter be the maximum restriction in such regard, and the restriction shall remain enforceable to the fullest extent deemed reasonable by such court.
 
 
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8.    EXECUTIVE’S REPRESENTATIONS AND WARRANTIES
 
8.1.    Other Agreements . The Executive hereby represents and warrants to the Company that the Executive is not a party to or bound by any employment agreement, noncompete agreement or confidentiality agreement with any other Person.
 
8.2.    Enforceability . The Executive hereby represents and warrants to the Company that upon the execution and delivery of this Agreement by the Company, this Agreement shall be the valid and binding obligation of the Executive, enforceable in accordance with its terms.
 
8.3.    No Breach; No Conflict of Interest . The Executive hereby represents and warrants to the Company that (a) the execution, delivery and performance of this Agreement by the Executive do not and shall not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which the Executive is a party or by which the Executive is bound and (b) the Executive is not, to the best of the Executive's knowledge and belief, involved in any situation that might create, or appear to create, a conflict of interest with loyalty to or duties for the Company.
 
8.4.    Notification of Materials or Documents from Other Employers . The Executive hereby represents and warrants to the Company that the Executive has not brought and will not bring to the Company or use in the performance of responsibilities at the Company any materials or documents of a former employer or client that are not generally available to the public, unless the Executive has obtained express written authorization from the former employer or client and the Company for their possession and use.
 
8.5.    Notification of Other Post-Employment Obligations . The Executive also understands that, as part of the Executive's employment with the Company, the Executive is not to breach any obligation of confidentiality that the Executive has to former employers or
 
clients, and agrees to honor all such obligations to former employers or clients during employment with the Company.
 
8.6.    Consultation with Counsel . The Executive hereby acknowledges and represents that the Executive has consulted with independent legal counsel regarding the Executive’s rights and obligations under this Agreement and that the Executive fully understands the terms and conditions contained herein.
 
9.    ARBITRATION
 
9.1.    The Executive and the Company mutually consent to the resolution by arbitration of certain claims or controversies (collectively, " Claims ") arising out of or relating to the Executive's employment or termination of employment under this Agreement that either party may have against the other, including the Company’s officers, shareholders, directors, employees, or benefit plans, the benefit plans' sponsors, fiduciaries, administrators, or affiliates; and all successors and assigns of any of them, or agents in their capacity as such or otherwise. The Claims covered by this Agreement shall include claims for (a) wages or other compensation due; (b) breach of any contract or covenant (express or implied); tort claims; (c) discrimination (including but not limited to race, sex, religion, national origin, age, disability, citizenship, marital status, or any other basis protected by any applicable federal, state or local law); (d) payment of wages; (e) benefits (except where an employee benefit or pension plan specifies that its claims procedure shall use an arbitration procedure different from this one); and (f) violation of any federal, state, or local law, statute, regulation, or ordinance, or recognized under common law. The Claims not covered by this Agreement shall include claims (g) for workers' compensation or unemployment compensation benefits; (h) brought pursuant to Sections 6 or 10 of this Agreement and breach of duty of loyalty; and (i) unrelated to the Employee's employment with the Company.
 
 
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9.2.    The arbitration shall be governed by the procedures of the American Arbitration Association (" AAA "), in accordance with its then-current Model Employment Arbitration Procedures and shall take place in the Washington-Metropolitan area.
 
9.3.    If the parties to this Agreement become parties to an arbitration proceeding or litigation arising from or relating to this Agreement, the non-prevailing party shall pay the reasonable attorneys’ fees and costs incurred by the prevailing party in such arbitration or litigation.
 
10.    GENERAL PROVISIONS
 
10.1.    Assignment .   The Company may assign this Agreement and its rights and obligations hereunder in whole, but not in part, to any Company or other entity with or into which the Company or may hereafter merge or consolidate or to which the Company may transfer all or substantially all of its assets, if in any such case said company or other entity shall by operation of law or expressly in writing assume all obligations of the Company hereunder as fully as if it had been originally made a party hereto, but may not otherwise assign this Agreement or its rights and obligations hereunder. The Executive may not assign or transfer this Agreement or any rights or obligations hereunder without the prior written consent of the Company. Notwithstanding such assignment, the Company shall remain a guarantor of the performance of all obligations owed by the Company to the Executive under this Agreement.
 
10.2.    Notice . For the purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by certified or registered mail, return receipt requested, postage prepaid, or Federal Express, signature required, if to the Company, addressed to its corporate headquarters at the time notice is given, "Attention Board of Directors"; if to the Executive, addressed to his home address as listed in the Company’s records at the time notice is given.
 
10.3.    Amendment and Waiver . No provision of this Agreement may be amended or waived unless such amendment or waiver is in writing and signed by each of the parties hereto.
 
 
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10.4.    Non-Waiver of Breach . No failure by either party to declare a default due to any breach of any obligation under this Agreement by the other, nor failure by either party to act quickly with regard thereto, shall be considered to be a waiver of any such obligation, or of any future breach.
 
10.5.    Severability . In the event that any provision or portion of this Agreement shall be determined to be invalid or unenforceable for any reason, the remaining provisions of this Agreement shall be unaffected thereby and shall remain in full force and effect.
 
10.6.    Governing Law . To the extent not preempted by Federal law, the validity and effect of this Agreement and the rights and obligations of the parties hereto shall be construed and determined in accordance with the law of the State of Maryland, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Maryland or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Maryland.
 
10.7.    Entire Agreement . This Agreement constitutes the entire agreement and understanding of the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings relating to such subject matter, whether oral or written, including without limitation any prior or existing employment agreement with the Company which shall be null and void and of no further force or effect.
 
10.8.    Binding Effect . This Agreement shall be binding upon and shall inure to the benefit of the transferees, successors and assigns of the Company, including without limitation any company with which the Company may merge or consolidate.
 
10.9.    Headings . Numbers and titles to Sections hereof are for information purposes only and, where inconsistent with the text, are to be disregarded.
 
10.10.    Survival . Section 1 and Sections 5 through 10 shall survive and continue in full force in accordance with their terms notwithstanding the expiration or termination of the Employment Period.
 
10.11.    No Strict Construction . The language used in this Agreement shall be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction shall be applied against any party.
 
10.12.    Counterparts . This Agreement may be executed in separate counterparts (including by means of facsimile), each of which is deemed to be an original and all of which taken together constitute one and the same agreement.
 
10.13.    Indemnification of the Executive. The Company shall, to the extent permitted by the Bylaws of the Company, in a manner as applied to other officers of the Company, indemnify, protect and hold the Executive harmless from and against any expenses, including reasonable attorneys' fees and expenses, claims, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with any proceeding arising out of, or related to, the Executive's employment by the Company or any of its Subsidiaries. The Company shall cause the Executive to be covered under directors and officers liability insurance policies in reasonable amounts in accordance with the Company's standard corporate policies.
 
 
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10.14.    Injunctive Relief. The Executive represents and acknowledges that, in light of the payments to be made by the Company to the Executive hereunder and for other good and valid reasons, as a result of the restrictions stated in the Assignment Agreement and the restrictions in Section 7 hereof, the Company and its affiliated companies would sustain irreparable harm and, therefore, in addition to any other remedies which the Company may have under this Agreement or otherwise, the Company shall be entitled to apply to any court of competent jurisdiction for an injunction restraining the Executive from committing or continuing any such violation of this Agreement, and the Executive shall not object to such application.
 
[SIGNATURES ON FOLLOWING PAGES]
 
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Executive Employment Agreement to be duly executed on the date and year first written above.
 

    THE COMPANY:  
     
   
FORTRESS AMERICA ACQUISITION CORPORATION  
     
   
By:/s/ Harvey L. Weiss  
   
Name: Harvey L. Weiss  
   
Title: Chairman  
     
    THE EXECUTIVE:    
     
   
By:/s/ Gerard J. Gallagher  
   
Name: Gerard J. Gallagher  
 
 
 
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EXHIBIT A

EXISTING LIFE INSURANCE
 
 
 

 
 
 

 


EXHIBIT B

STOCK
ACQUISITION AGREEMENT
[Name of Purchaser]
 
THIS STOCK ACQUISITION AGREEMENT (“ Agreement ”) is made this ___ day of __________, 2006 by and between FORTRESS INTERNATIONAL GROUP, INC., formerly Fortress America Acquisition Corporation, a Delaware corporation (“ FIG ”), and ________________________, an individual (the “ Purchaser ”).
 
RECITALS :
 
R-1.   Pursuant to the terms of that certain Executive Employment Agreement dated the June 5, _____ day of ________, 2006 (the “ Employment Agreement ”), by and among (i) FIG and (ii) Purchaser, FIG employed Purchaser.
 
R-2.   Pursuant to the terms of the Employment Agreement, Purchaser has earned as a bonus _________ shares of FIG common stock (collectively the “ FIG Shares ”).
 
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements herein contained and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the undersigned agree as follows:

1.  
Definitions .

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

Agreement ” has the meaning referred to in the Preamble.

Employment Agreement ” has the meaning referred to in Recital R-1.

Exchange Act ” means the Securities Exchange Act of 1934, as amended and the rules and regulations promulgated thereunder.
 
FIG ” refers to Fortress International Group, Inc.

FIG Securities ” has the meaning referred to in Section 3.6.

FIG Shares ” has the meaning referred to in Recital R-2.

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

Purchaser ” means_________________ .

Public Disclosure Documents ” has the meaning referred to in Section 3.7.

Registration Rights Agreement ” has the meaning referred to in Section 2.2.

SEC ” means the United States Securities and Exchange Commission.
 
Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
 
Tax ” means any Federal, state, local or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, ad valorem, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, custom, tariff, impost, levy, duty or other like assessment or charge.
 
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.
 
2.  
Agreement to Sell and Purchase .
 
 2.1    Sale and Purchase . Subject to the terms and conditions of this Agreement and the Membership Purchase Agreement, FIG hereby issues and sells to Purchaser, and Purchaser hereby purchases from FIG, the FIG Shares.

2.2  
Closing Deliveries and Payment .
 
(a)    Upon the execution of this Agreement, FIG will deliver to the Purchaser stock certificates representing the FIG Shares.
 
(b)    Simultaneously with the execution of this Agreement, the Registration Rights Agreement attached hereto as Exhibit A (the “ Registration Rights Agreement ”) shall be executed by the parties thereto.
 
 
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3.  
Representations and Warranties of FIG .
 
3.1  
Organization and Power .
 
FIG is a corporation duly organized, validly existing and in good standing under the laws of Delaware and has full corporate power and authority (a) to execute and deliver this Agreement and the Registration Rights Agreement and (b) issue the FIG Shares.
 
3.2  
Authorization and Enforceability .
 
All corporate action on the part of FIG, its officers, directors and stockholders necessary for (a) the authorization, execution and delivery of this Agreement and the Registration Rights Agreement, (b) the performance of all obligations of FIG hereunder and thereunder, and (c) the authorization, sale, issuance and delivery of the FIG Shares pursuant hereto has been taken, as applicable. This Agreement and the Registration Rights Agreement when executed and delivered, will be valid and binding obligations of FIG, enforceable against FIG in accordance with their terms, subject to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles.
 
 
- 3 -

 
 
3.3  
No Violation .
 
Neither (i) the execution, delivery or performance of this Agreement and the Registration Rights Agreement, nor (ii) the issuance of the FIG Shares will:
 
(a)    conflict with or violate any provision of the certificate of incorporation, any bylaw or any corporate charter or document of FIG;
 
(b)    result in the creation of, or require the creation of, any Lien upon any (i) shares of stock of FIG or (ii) property of FIG;
 
(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 FIG, 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 FIG, or (ii) to accelerate or forfeit any term of payment; or
 
(e)    violate any Laws applicable to FIG or by which its properties are bound or affected.
 
3.4  
Consents .
 
Neither (a) the execution, delivery or performance of this Agreement or the Registration Rights Agreement, nor (b) the issuance of the FIG Shares will require (i) the consent or approval under any agreement or instrument or (ii) FIG 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.
 
3.5  
Authorization of Stock Consideration .
 
When issued, the FIG Shares will be (a) duly authorized, validly issued, fully paid and nonassessable, (b) not subject to preemptive rights created by statute, FIG’s certificate of incorporation or bylaws or any agreement to which FIG is a party or by which FIG is bound and (c) 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 Purchaser.
 
3.6  
Public Disclosure Documents .
 
(a)    FIG has filed with, or furnished to, the SEC each form, proxy statement or report required to be filed with, or furnished to, the SEC by FIG pursuant to the Exchange Act (collectively, with FIG’s prospectus filed with the SEC on July 13, 2005, as amended to date, the “ Public Disclosure Documents ”). The Public Disclosure Documents, as amended, 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, except to the extent updated or superseded by any Public Disclosure Document subsequently filed by FIG with the SEC prior to the date hereof.
 
 
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(b)    The financial statements of FIG 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 financial position of FIG as of the dates indicated, and the results of the operations and cash flows of FIG 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).
 
4.    Representations and Warranties of Purchaser . Purchaser hereby represents and warrants to FIG that:
 
4.1  
Authorization and Enforceability .
 
Purchaser has all necessary power and authority under all applicable provisions of Laws to execute and deliver this Agreement and the Registration Rights Agreement and to carry out his obligations hereunder and thereunder. All actions on the part of the Purchaser required for the lawful execution and delivery of this Agreement and the Registration Rights Agreement have been or will be effectively taken prior to the date hereof, as applicable. Upon their execution and delivery, this Agreement and the Registration Rights Agreement, will be valid and binding obligations of Purchaser, enforceable in accordance with their terms, subject to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles.
 
4.2  
Purchase Entirely For Own Account .
 
The Purchaser is acquiring the FIG Shares for his own account (not as a nominee or agent) and for investment and not with a view to the resale or distribution of any part thereof except as specifically permitted by Section 4.3 hereof.
 
4.3  
Investment Experience .
 
Purchaser is an "accredited investor" as defined in Rule 501(a) under the Securities Act. Purchaser has acquired sufficient information about FIG to reach an informed decision to purchase the FIG Shares. Purchaser has such business and financial experience as are required to give it the capacity to protect its own interests in connection with the purchase of the FIG Shares.
 
 
- 5 -

 
 
4.4  
Access To Information .
 
The Purchaser has had an opportunity to ask questions of and receive answers from FIG and its officers and directors concerning FIG and the terms and conditions of the sale of the FIG Shares under the terms of this Agreement and has had an opportunity to obtain additional information from FIG to the extent deemed necessary or advisable by the Purchaser in order to verify the accuracy of the information obtained. The Purchaser has, to the extent deemed necessary by the Purchaser, consulted with his or her own advisors (including the Purchaser’s attorney, accountant or investment advisor) regarding the Purchaser’s investment in the FIG Shares and understands the significance and effect of his representations, warranties, acknowledgments and agreements set forth in this Agreement.
 
4.5  
Speculative Investment .
 
The Purchaser understands that his investment in the FIG Shares entails a high degree of risk and that a total loss of the Purchaser’s investment in the FIG Shares is possible. The Purchaser understands that his acquisition of the FIG Shares will be a highly speculative investment.
 
4.6  
Representations and Warranties by FIG .
 
The Purchaser acknowledges that neither FIG, nor any of its officers, directors, representatives or affiliates, nor any other person or entity, has made any representations or warranties, except as otherwise expressly set forth herein, with respect to FIG, its or its affiliates’ businesses, or the FIG Shares.
 
4.7  
Restricted Securities .
 
Purchaser understands that (a) the FIG Shares are being offered in a transaction not involving any public offering in the United States within the meaning of the Securities Act, (b) the FIG Shares have not been registered under the Securities Act (in reliance upon an exemption from the Registration Requirements of the Securities Act pursuant to Section 4(2) thereof), (c) the FIG Shares have not been registered under applicable state securities laws, and (d) Purchaser may not resell, pledge or otherwise transfer any such FIG Shares unless registered under the Securities Act and applicable state securities laws (FIG being under no obligation to so do, except as provided in the Registration Rights Agreement).
 
4.8  
Legends .
 
Purchaser understands that the FIG Shares, and any securities issued in respect thereof or exchanged therefor, may bear the following legend until such time, if any, as (a) the FIG Shares or such securities (i) are sold in compliance with Rule 144 under the Securities Act (or a comparable successor provision) or pursuant to an effective registration statement under the Securities Act or (ii) pursuant to Rule 144(k) under the Securities Act (or a comparable successor provision), or (b) FIG receives an opinion of counsel reasonably acceptable to it to the effect that such legend may be removed:
 
“THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) PURSUANT TO AN EXEMPTION PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES.”
 
 
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5.  
Miscellaneous .
 
5.1  
Notices.
 
All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered to the parties at the addresses set forth below, as same may be modified from time to time. Each such notice, request or other communication shall be effective (a) if given by facsimile, when such facsimile is transmitted to the facsimile number set forth below if such facsimile is transmitted on a business day, and if not, then on the next business day thereafter, (b) if given by mail, five (5) days after mailed by registered or certified mail (return receipt requested) or (c) if given by express courier, on the day delivered by an express courier (with confirmation from recipient) to the following addresses:
 
(a)    if to FIG, to:
 
Fortress International Group, Inc.
Attn: Harvey L. Weiss
Chairman of the Board
4100 North Fairfax Drive, #1150
Arlington, Virginia 22203
Facsimile No.:      
 
(b)    if to Purchaser, to:
 
Gerard J. Gallagher
5 Tydings Road
Severna Park, MD 21146
Facsimile No.: _______________
 
Notice of any change in any address or facsimile number shall also be given in the manner set forth above. Whenever the giving of notice is required, the giving of such notice may be waived by the party entitled to receive such notice.
 
5.2  
Entire Agreement .
 
This Agreement, the Membership Purchase Agreement and the Registration Rights Agreement contain the entire agreement between the parties hereto with respect to the matters contemplated herein and supersede all prior agreements or understandings among the parties related to such matters.
 
 
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5.3  
Assignment and Binding Effect .
 
Except as otherwise expressly provided herein, the rights and obligations hereunder may not be assigned or delegated by the Purchaser or FIG without the prior written consent of the other; provided , however , that Purchaser may assign its rights and delegate its obligations hereunder, in whole or in part; provided , further , that any such assignee that acquires any FIG Shares shall, as a condition to acquiring the FIG Shares, agree to be bound by the provisions of any agreement applicable to the FIG Shares, including, but not limited to, the Registration Rights Agreement. The provisions hereof shall inure to the benefit of, and be binding upon, the successors and assigns of the parties hereto.
 
5.4  
Amendment and Modification .
 
This Agreement may be amended, modified, superseded, canceled, renewed or extended, and the terms or covenants hereof may be waived, only by a written instrument executed by all of the parties hereto or, in the case of a waiver, by the party waiving compliance. Except as otherwise specifically provided in this Agreement, no waiver by either party hereto of any breach by the other party hereto of any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of a similar or dissimilar provision or condition at the same or at any prior or subsequent time.
 

5.5  
Governing Law .
 
This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of Maryland, without giving effect to the principles of conflicts of laws thereof.
 
5.6  
Headings .
 
Headings to the sections in this Agreement are intended solely for convenience, and no provision of this Agreement is to be construed by reference to the heading of any section.
 
5.7  
Counterparts .
 
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same agreement.
 
5.8  
Fees and Expenses .
 
Each party hereto shall pay the fees and expenses incurred by it in connection with the transactions contemplated herein. Without limiting the generality of the foregoing, Purchaser hereby agrees that FIG shall not be responsible for any expenses, taxes or other costs incurred by Purchaser in consummating the transactions contemplated herein, including legal and other professional fees and costs, income taxes, and sales or use taxes and that Purchaser shall be solely responsible for the payment of all such expenses, taxes and costs.
 
 
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5.9  
Severability .
 
Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms and provisions of this Agreement in any other jurisdiction.
 
5.10  
Further Actions .
 
The parties hereto agree to execute such further instruments and to take such further actions as may reasonably be necessary to carry out the intent of this Agreement.
 
5.11  
Brokers .
 
Each party hereto represents and warrants that, except as provided in the Membership Purchase Agreement, no agent, broker, investment banker, person or firm acting on behalf of or under the authority of such party hereto is or will be entitled to any broker's or finder's fee or any other commission directly or indirectly in connection with the transactions contemplated herein. Each party hereto further agrees to indemnify each other party for any claims, losses or expenses incurred by such other party as a result of the representation in this Section being untrue
 
IN WITNESS WHEREOF, the parties hereto have executed this Stock Acquisition Agreement as of the date first set forth above.
 
 
 
 
FIG :
 
   
FORTRESS INTERNATIONAL GROUP, INC.,  
     
    a Delaware corporation  
     
   
By:__________________________
    Name:______________________  
    Title:_______________________  
     
 
 
 
 
 
 
 
 
 
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PURCHASER :
 
     
    ______________________ 
    Name:____________________

 
 
         
 
 
 
 
 
 
- 10 -

 
 

 
EXHIBIT A

REGISTRATION RIGHTS AGREEMENT
 
 
 
 
 
 
 
 
- 11 -

 

EXHIBIT B

SEPARATION FROM EMPLOYMENT AGREEMENT AND RELEASE
 
1.   This agreement is between the Executive, Gerard J. Gallagher, the Executive’s spouse, family, agents and attorneys) (jointly, the "Executive") and Fortress International Group, Inc. (the "Company"), its subsidiaries, affiliated entities, direct or indirect owners and its and their respective officers, directors, employees, agents, predecessors, successors, purchasers, assigns, representatives, fiduciaries, and insurers (jointly, the "Released Parties").
2.   If the Executive signs this agreement and does not revoke it, the Executive will receive the applicable severance payments and benefits set forth in Section 5 of the Executive’s Executive Employment Agreement, dated __________ _____, 2006 (the "Employment Agreement").
3.   The Executive, deeming this Agreement to be fair, reasonable, and equitable, and intending to be legally bound hereby, agrees to and hereby does, forever and irrevocably fully release and discharge the Released Parties from any and all grievances, liens, suits, judgments, claims, demands, debts, defenses, actions or causes of action, obligations, damages (whether compensatory, punitive or otherwise), and liabilities whatsoever which the Executive now has, has had, or may have, whether the same be known or unknown, vested or contingent, at law, in equity, or mixed, in any way arising out of or relating in any way to any matter, act, occurrence, or transaction before the date of this General Release Agreement, including but not limited to his employment with Company, the Executive's separation from Company and the Executive's employment agreement with the Company (collectively, "Claims"). This is a General Release. The Executive expressly acknowledges that this General Release includes, but is not limited to, the Executive's release of any tort and contract claims, arbitration claims, claims under any local, state or federal wage and hour law, wage collection law or labor relations law, and claims of age, race, sex, religion, disability, national origin, ancestry, citizenship, retaliation or any other claim of employment discrimination, under the Civil Rights Acts of 1964 and 1991 as amended (42 U.S.C. §§ 2000e et   seq .), the Age Discrimination In Employment Act (29 U.S.C. §§ 621 et seq .), the Americans With Disabilities Act (42 U.S.C. §§ 12101 et   seq .), the Rehabilitation Act of 1973 (29 U.S.C. §§ 701 et   seq .), the Family and Medical Leave Act (29 U.S.C. §§ 2601 et   seq .), the Fair Labor Standards Act (29 U.S.C. §§ 201 et   seq .), and any other law prohibiting employment discrimination or relating to employment. Also, the Executive understands that this General Release Agreement is not an admission of liability under any statute or otherwise by the Released Parties, and that the Released Parties do not admit but deny any violation of his legal rights, and that he shall not be regarded as a prevailing party for any purpose, including but not limited to, determining responsibility for or entitlement to attorneys’ fees, under any statute or otherwise. The Executive agrees that in the event the Executive brings a Claim in which the Executive seeks damages or other relief from any Released Party, or in the event the Executive seeks to recover against any Released Party in any Claim brought by a governmental agency on the Executive’s behalf, this Agreement shall serve as a complete defense to such Claims.
 
 
- 1 -

 
 
4.   The claims and causes of action the Executive is releasing and waiving include, but are not limited to, any and all claims and causes of action that any Released Party:
·    has violated its personnel policies, handbooks, contracts of employment, or covenants of good faith and fair dealing between the Executive and the Company;
 
·    has discriminated against the Executive on the basis of age, race, color, sex (including sexual harassment), national origin, ancestry, disability, religion, sexual orientation, marital status, parental status, source of income, entitlement to benefits, any union activities or other protected category in violation of any local, state or federal law, constitution, ordinance, or regulation, including but not limited to: the Age Discrimination in Employment Act, as amended; Title VII of the Civil Rights Act of 1964, as amended; 42 U.S.C. § 1981, as amended; the Equal Pay Act; the Americans With Disabilities Act; the Family Medical Leave Act; the Employee Retirement Income Security Act; Section 510; and the National Labor Relations Act.
 
 
 
- 2 -

 
 
·    has violated any statute, public policy or common law (including but not limited to claims for retaliatory discharge; negligent hiring, retention or supervision; defamation; intentional or negligent infliction of emotional distress and/or mental anguish; intentional interference with contract; negligence; and/or detrimental reliance).
 
5.   Excluded from this Agreement are any claims which cannot be waived by law. The Executive is waiving, however, the Executive’s right to any monetary recovery should any agency, such as the EEOC, pursue any claims on the Executive’s behalf.
6.   The Executive also agrees that the Executive has been paid for all hours worked, including any overtime bonus or other incentive compensation, has submitted all invoices and expense reports, and has   not suffered any on-the-job injury for which the Executive has not already filed a claim.
7.   The Executive agrees that every term of this Agreement, including, but not limited to, the fact that an agreement has been reached and the amount paid, shall be treated by the Executive as strictly confidential, and expressly covenants not to display, publish, disseminate, or disclose the terms of this Agreement to any person or entity other than the Executive’s immediate family, the Executive’s attorney(s) (for purposes of seeking advice concerning this agreement only) and the Employee’s accountant(s) (for purposes of seeking tax advice only), unless compelled to make disclosure by lawful court order or subpoena.
8.   The Executive and the Company have entered into an Assignment of Invention, Non-Disclosure, Non-Solicitation and Non-Competition Agreement ("NDA Agreement"). The Executive reaffirms his obligation to comply with all of the post termination obligations in the NDA Agreement.
 
 
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9.   The Executive also agrees that:
·    The Executive is entering into this agreement knowingly and voluntarily;
 
·    The Executive has been advised by the Company to consult an attorney;
 
·    The Executive has been given the right to take [21/45] days (the "Consideration Period") to consider this agreement; provided, however the Employee and the Company hereby agree that if there is a dispute as to the payment of wages such that the Executive is unable to make the representation set forth in Section 6 as to payment for hours worked (including any overtime bonus or other incentive compensation), the Consideration Period shall terminate on the later of the natural expiration of the Consideration Period or the date that is one day after the resolution of all claims regarding wages;
 
·    But for the Executive's execution of this agreement, the Executive would not otherwise be entitled to the payments described in paragraph 2;
 
·    if any part of this agreement is found to be illegal or invalid, the rest of the agreement will be enforceable; and
 
·    this agreement has been individually negotiated between the Executive and the Company and is not part of a group exit incentive or other group employment termination program. The Executive and the Company agree that the sole reason for the termination of the Executive’s employment is a business reorganization and reduction in force of the Company’s [INSERT DEPARTMENT OR JOB CLASSIFICATION] which is occurring on [INSERT DATE]. All individuals who are being terminated in the [INSERT DATE] reduction in force will be eligible for benefits based upon their execution of a release identical to this release. The Executive acknowledges by signing this Agreement that the Executive understands that the Executive is eligible for the benefits which the Executive will receive contingent upon the Executive executing this release, because the Executive was part of this reduction in force. As is more fully set forth in Attachment B, this reduction in force will affect [NUMBER AFFECTED] other executives on [DATE].
 
10.   After the Executive signs this agreement, the Executive will have 7 days to revoke it. If the Executive wants to revoke it, the Executive should deliver a written revocation to __________ . If the Executive does not revoke it, the Executive will receive the payment described in Paragraph 2.
 
 
- 4 -

 
 
  EMPLOYEE:   COMPANY:    
     
    FORTRESS INTERNATIONAL GROUP, INC.  
     
  ____________________ _______________________________ 
    [NAME AND TITLE]  
     
  Date:____________________   Date:_______________________________  
     
 
 
 
 
 
 
 
     
 

 
 
- 5 -

 

CONSIDERATION PERIOD
 
I, Gerard J. Gallagher understand that I have the right to take at least [21/45] days to consider whether to sign this Separation From Employment and Release Agreement, which I received on _________________, 2006. If I elect to sign this Agreement before [21/45] days have passed, I understand I am to sign and date below this paragraph to confirm that I knowingly and voluntarily agree to waive the [21/45] -day consideration period.
 
    ____________________ 
    Executive Signature  
     
    ____________________ 
    Date  
 
 
 
 
 
 
 
 

 

 
ATTACHMENT B

SCHEDULE TO SEPARATION FROM EMPLOYMENT AGREEMENT AND RELEASE
 
On [Date], the employment of the following individuals (identified by job title and age), who will the [sole] holders of their job title, will be terminated in a reduction in force:
 
Title
Age
 

 
The employment of the following individuals (identified by age), who are the [sole] holders of their job title, will not be terminated on [Date] in the reduction in force.
 
 
Title
Age


 
 
 
 


 
 
 

 
EXHIBIT C
 
INVENTION ASSIGNMENT, NON-COMPETE
 
AND CONFIDENTIALITY AGREEMENT
 

The following confirms an Invention Assignment, Non-Compete and Confidentiality Agreement ("Agreement") between me and Fortress International Group, a Maryland corporation (the "Company," which term includes the Company’s Affiliates, subsidiaries and any assigns). The promises and commitments that I make in this Agreement are a material part of the Company’s consideration in my employment relationship with the Company.

1.             I understand and agree that my employment by the Company creates a duty of loyalty and a relationship of confidence and trust between me and the Company with respect to any information made known to me by the Company or by any client, customer or vendor of the Company or other person who submits information to the Company, or which may be learned by me during the period of my employment.
 
2.            I recognize that the Company is continuously engaged in activities that the Company regards as confidential, proprietary and/or legally protectable, which activities are at least in part intended to further the interests of the Company and to provide the Company with a competitive advantage. The Company possesses and will, in the future, continue to possess information that has been or will be created, discovered, developed or otherwise becomes known to the Company (including information created by, discovered or developed by, or made known to me) during the period of or arising out of my employment by the Company. I understand that various intellectual and other property rights have been assigned or otherwise conveyed to the Company. All information concerning the above described activities and information is collectively called "Proprietary Information" under this Agreement.
 
3.            By way of illustration, but not limitation, Proprietary Information includes: trade secrets, processes, formulas, data and know-how; software programs, improvements, and inventions; research and development plans, tools and techniques; new product introduction plans, specifications, requirements documents and strategies; manufacturing techniques, strategies and costs, expenses, supplier information and lists and distribution information; terms and conditions in contracts of all kinds; marketing plans, strategies and service; support strategies and procedures; development schedules; revenue forecasts; computer programs; copyrightable material, employee salaries, employee expertise, employee ability levels, training programs and procedures, copies of memos or presentations incorporating confidential information which I may have in my files (including those which I authored), patent applications and disclosures and customer lists.
 
 
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4.            In consideration of my employment by the Company and the compensation received by me from the Company from time to time, I hereby agree as follows:
 
(a)           All Proprietary Information shall be the sole property of the Company, and the Company shall be the sole owner of all patents, copyrights, trademarks and other rights related to Proprietary Information. I hereby assign to the Company any rights I may have or acquire in Proprietary Information. At all times, both during and after my employment by the Company, I will keep in confidence and trust all Proprietary Information, and I will not use or disclose any Proprietary Information or anything related to it without written consent of the Company, except as may be necessary in the ordinary course of performing my duties to the Company.
 
(b)           All documents, records, apparatus, equipment and other physical property, whether or not pertaining to Proprietary Information, furnished to me by the Company or produced by myself or others in connection with employment by the Company shall be and remain the sole property of the Company, shall be used by me solely for the benefit of the Company and shall be returned to the Company immediately as and when requested by the Company. Even if the Company does not so request, I shall return and deliver all such property to the Company upon termination of my employment by me or by the Company for any reason. I will not take with me any such property or any form of copy or reproduction of such property upon my termination.
 
(c)            I will promptly disclose to the Company, or any persons designated by it, all improvements, inventions, formulas, ideas, processes, techniques, know-how and data, whether or not patentable, made or conceived or reduced to practice or learned by me, either alone or jointly with others, during the period of my employment (all said improvements, inventions, formulas, ideas, processes, techniques, know-how and data shall be hereinafter collectively call "Inventions").
 
(d)          I agree that all Inventions that I develop or have developed (in whole or in part, either alone or jointly with others) and (i) use or have used equipment, supplies, facilities or trade secret information of the Company, or (ii) use or have used the hours for which I am to be or was compensated by the Company, or (iii) which relate to the business of the Company or to its actual or demonstrably anticipated research and development or (iv) which result, in whole or in part, from work performed by me for the Company shall be the sole property of the Company and its assigns, and the Company and its assigns shall be the sole owner of all patents, copyrights and other rights in connection therewith. I hereby assign to the Company any rights I may have or acquire in such Inventions. I further agree as to all such inventions and improvements to assist the Company in every proper way (but at the Company’s expense) to obtain and from time to time enforce patents, copyrights or other rights on said inventions and improvements in any and all countries, and to that end I will execute all documents in use for applying for and obtaining such patents and copyrights thereon and enforcing same, as the Company may desire, together with any assignments thereof to the Company or persons designated by it. My obligation to assist the Company in obtaining and enforcing patents, copyrights or other rights for such inventions and improvements in any and all countries shall continue beyond the termination of my employment, but the Company shall compensate me at a reasonable rate after such termination for time actually spent by me at the Company’s request on such assistance.
 
 
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(e)           In the event that the Company is unable for any reason whatsoever to secure my signature to any lawful and necessary document required to apply for or execute any patent, copyright or other applications with respect to such inventions and improvements (including renewals, extensions, continuations, divisions or continuations in part thereof), I hereby irrevocably designate and appoint the Company and its authorized officers and agents, as my agents and attorneys-in-fact, this power of attorney being coupled with an interest, to act for and in my behalf and instead of me, to execute and file any such application and to do all other lawfully permitted acts to further the prosecution and issuance of patents, copyrights or other rights thereon with the same legal force and effect as if executed by me.
 
(f)           As a matter of record, on Attachment A , I have attached a complete list of all inventions or improvements relevant to the subject matter of my employment by the Company which have been made or conceived or first reduced to practice by me alone or jointly with others prior to my employment with the Company that I desire to remove from the operation of this Agreement, and I covenant that such list is complete. If no such list is signed by me and attached to this Agreement, I represent and warrant that I have no such inventions or improvements at the time of signing this Agreement, and I agree that I will make no claim against the Company with respect to any such inventions or ideas.
 
(g)            I represent that my performance of all the terms of this Agreement will not breach any agreement to keep in confidence proprietary information acquired by me in confidence or in trust prior to my employment by the Company. I have not entered into, and I agree I will not enter into, any agreement either written or oral in conflict with this Agreement.
 
(h)            I acknowledge that the Company from time to time may be involved in government projects of a classified nature. I further acknowledge that the Company from time to time may have agreements with other persons or governmental agencies which impose obligations or restrictions on the Company regarding inventions made during the course of work thereunder or regarding the confidential nature of such work or information disclosed in connection therewith. I agree to be bound by all such obligations and restrictions and to take all action necessary to discharge the obligations of the Company thereunder.
 
 
- 3 -

 
 
(i)            I represent and warrant that execution of this Agreement, my employment with the Company and my performance of my proposed duties to the Company in the development of its business have not and will not violate any obligations which I may have to any former employer.
 
 
(j)
I agree that at no time during my employment by the Company or thereafter shall I make, or cause or assist any other person to make, any statement or other communication to any third party which impugns or attacks, or is otherwise critical of, the reputation, business or character of the Company or any of its Affiliates or any of their respective directors, officers or employees.
 
5.             This Agreement shall be effective as of the first day of my employment by the Company.
 
6.            This Agreement may not be changed, modified, released, discharged, abandoned or otherwise amended, in whole or in part, except by an instrument in writing, signed by myself and a majority of the members of the Board. I agree that any subsequent change or changes in my duties, salary or compensation shall not affect the validity or scope of this Agreement.
 
7.             I acknowledge receipt of this Agreement and agree that with respect to the subject matter hereof it is my final, complete and exclusive agreement with the Company, superseding any previous oral or written representations, understanding or agreements with the Company or any officer or representative with respect to the subject matter herein.
 
8.             In the event that any paragraph or provision of this Agreement shall be held to be illegal or unenforceable, such paragraph or provision shall be modified to the extent necessary to give effect to the intent of the parties or, if necessary, severed from this Agreement and the entire Agreement shall not fail on account thereof, but shall otherwise remain in full force and effect.
 
9.            This Agreement shall be construed in accordance with the laws of the State of Maryland without regard to its choice of law principles.
 
10.          This Agreement shall be binding upon me, my heirs, executors, assigns, and administrators and shall inure to the benefit of the Company, its successors and assigns.
 
I acknowledge that the foregoing restrictions contained in Section 4 are reasonable in all respects including the scope, duration and geographic limitations. I agree that the restrictions are an appropriate means of protecting the Company’s legitimate business interests, and no greater than necessary to protect the Company’s interests. I acknowledge that these restrictions will not unreasonably interfere with my ability to make a living.
 
 
- 4 -

 


Dated: __________ _____, 2006
    _________________ 
    Executive Signature  
    Gerard J. Gallagher  
 
 
 
 
 
 
 

 
 
- 5 -

 

Accepted and Agreed to:

Fortress International Group, Inc.


By:______________________      

Name: Harvey L. Weiss
Title: Chairman

Date:_____________________      


 

 
359767v3
 

 
 
- 6 -

 




VOTING AGREEMENT
 

THIS VOTING AGREEMENT (“ Agreement ”) is made this 19 th day of January, 2007 by and among THOMAS P. ROSATO (“ Rosato ”), GERARD J. GALLAGHER (“ Gallagher ” and together with Rosato the “ Target Group ”), C. THOMAS MCMILLEN (“ McMillen ”), HARVEY L. WEISS (“ Weiss ” and together with McMillen the “ Founders Group ”) and FORTRESS AMERICA ACQUISITION CORPORATION, a Delaware corporation (“ FAAC ”).

RECITALS:

R-1.   The members of the Target Group were all of the members of VTC, LLC, a Maryland limited liability company (“ VTC ”), and Vortech, LLC, a Maryland limited liability company (“ Vortech ”).

R-2.   The members of the Founders Group are shareholders of FAAC and own beneficially and of record shares of common stock of FAAC, par value $0.0001 per share (" Common Stock "), as set forth opposite each of their names on Exhibit A .

R-3.   Pursuant to the terms of that certain Second Amended and Restated Membership Interest Purchase Agreement dated July 31, 2006, (the “ Membership Interest Purchase Agreement ”) FAAC acquired all of the Target Group’s membership interests in each of VTC and Vortech effective as of the date hereof (the “ Acquisition Transaction ”).

R-4.   In connection with the Acquisition Transaction and pursuant to the Membership Interest Purchase Agreement, the members of the Target Group have received as of the date hereof and own beneficially of record (subject to certain escrows and a Lock Up Agreement all as described in the Membership Interest Purchase Agreement) Common Stock as set forth opposite each of their names on Exhibit A .

R-5.   As a condition to the consummation of the Acquisition Transaction, the members of the Target Group and the Founders Group (collectively the “ Stockholders ”) have agreed to enter into this Agreement for the purpose of voting their respective shares of Common Stock (all such shares and any shares of which ownership of record of the power to vote is hereafter acquired by any of the Stockholders, whether by purchase, conversion or exercise, prior to the termination of this agreement being hereinafter referred to as the “ Shares ”).

R-6.   Capitalized terms used but not defined in this Agreement shall have the meanings ascribed to them in the Membership Interest Purchase Agreement.
 
NOW, THEREFORE, in consideration of the premises and of the mutual agreements and covenants set forth herein and in the Membership Interest Purchase Agreement, and intending to be legally bound hereby, the parties hereto hereby agree as follows.
 

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ARTICLE I
DIRECTORS AND OFFICERS
 
1.1   Voting of Shares . Subject to Section 3.11 below, each Stockholder will vote such Stockholder’s Shares in support of Director Designees (as defined below) and otherwise pursuant to the provisions of this Section 1.1:
 
(a)   Board Size and Structure . The board of directors of FAAC (the “ Board ”) will consist of nine members, consisting of three classes of three members each. Members of the first class will stand for election in 2007 and every three years thereafter (the “ Class A Directors ”), members of the second class will stand for election in 2008 and every three years thereafter (the “ Class B Directors ”), and members of the third class will stand for election in 2009 and every three years thereafter (the “ Class C Directors ”).
 
(b)   Designation Rights .
 
(i)   The members of the Target Group will have the right to jointly propose to the Board (or appropriate nominating committee thereof), and to otherwise propose for nomination in accordance with FAAC’s governing documents, four designees as members of the Board (each a “ Target Group Designee ”), provided that at least two of the Target Group Designees constitute "independent directors" within the meaning of the Nasdaq rules and further provided that at least one such “independent director” is approved by members of the Board other than the Target Group Designees. Each of the three classes of the Board will include at least one Target Group Designee.
 
(ii)   The members of the Board other than the Target Group Designees will have the right to designate members of the Board not designated by the members of the Target Group pursuant to subclause (i) above (each an “ At Large Designee ”), provided that at least three At Large Designees are “independent directors” within the meaning of the Nasdaq rules and further provided that at least one such “independent director” is approved by the members of the Target Group (in their capacities as Stockholders), which approval may not be unreasonably withheld or delayed.
 
(c)   Initial Board Composition . The members of the Board immediately following the execution and delivery of this Agreement will be:
 
 
Class A Directors
Gerard J. Gallagher
David J. Mitchell
__________________
 
Class B Directors
Harvey L. Weiss
Donald L. Nickles
___________________
 
Class C Directors
Thomas P. Rosato
C. Thomas McMillan
__________________
(1) A Target Group Designee.
(2) An At Large Designee.
 

2



 
(d)   Neither the Stockholders, nor any of the officers, directors, stockholders, members, managers, partners, employees or agents of any Stockholder, makes any representation or warranty as to the fitness or competence of any Target Group Designee or At Large Designee (collectively the “ Director Designees ”) to serve on the Board by virtue of such party's execution of this Agreement or by the act of such party in designating or voting for such Director Designee pursuant to this Agreement.
 
(e)   Any Director Designee may be removed from the Board in the manner allowed by law and FAAC’s governing documents except that (i) the members of the Target Group will not vote their Shares for the removal of an At Large Designee absent the written approval of the members of the Founders Group and (ii) the members of the Founders Group will not vote their Shares for removal of a Target Group Designee absent the written approval of the members of the Target Group.
 
1.2   Board Observation Rights . To the extent applicable and appropriate, each Stockholder will vote such Stockholder’s Shares in favor of any proposal by the Board or the FAAC shareholders at large to grant board observation rights to either or both of C. Thomas McMillen and/or Harvey L. Weiss in the event that neither C. Thomas McMillen or Harvey L. Weiss are then directors of FAAC.
 
1.3   Vote in Favor of Certain Officers . To the extent applicable and appropriate, each Stockholder will vote such Stockholder’s Shares in favor of the following individuals to hold the following corporate offices:
 
 
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
     
1.4   Obligations of FAAC . FAAC shall take all necessary and desirable actions within its control (a) to provide for the Board to be comprised of nine members and to enable the election of the Director Designees to the Board in accordance with this Agreement, (b) to enable the appointment of those individuals referenced in Section 1.3 to the offices indicated in Section 1.3 and (c) to cause and permit C. Thomas McMillen and/or Harvey L. Weiss to serve as an advisor to the Board of Directors and to attend and observe meetings of the Board pursuant to Section 1.4.
 
1.5   Term of Agreement . This Agreement shall terminate immediately following the election or re-election of directors at the annual meeting of FAAC that will be held in 2008.
 
1.6   Obligations as Director and/or Officer . Nothing in this Agreement shall be deemed to limit or restrict any director or officer of FAAC from acting in his or her capacity as such director or officer or from exercising his or her fiduciary duties and responsibilities, it being agreed and understood that this Agreement shall apply to each Stockholder solely in his or her capacity as a stockholder of FAAC and shall not apply to his or her actions, judgments or decisions as a director or officer of FAAC if he or she is such a director or officer.
 

3



 
ARTICLE II
REPRESENTATIONS AND WARRANTIES;
COVENANTS OF THE STOCKHOLDERS
 
Each Stockholder hereby severally represents warrants and covenants as follows for himself, herself or itself, but for no other Person:
 
2.1   Authorization . Such Stockholder has full legal capacity and authority to enter into this Agreement and to carry out such Stockholder's obligations hereunder. This Agreement has been duly executed and delivered by such Stockholder, and (assuming due authorization, execution and delivery by FAAC and the other Stockholders) this Agreement constitutes a legal, valid and binding obligation of such Stockholder, enforceable against such Stockholder in accordance with its terms.
 
2.2   No Conflict; Required Filings and Consents .
 
(a)   The execution and delivery of this Agreement by such Stockholder does not, and the performance of this Agreement by such Stockholder will not,
 
(i)   to the extent applicable, conflict with or violate any provision of the certificate or articles of organization or operating agreement the Stockholder;
 
(ii)   to the extent applicable, result in the creation of, or require the creation of, any Lien upon any (A) equity interest or (B) property of the Stockholder;
 
(iii)   result in (A) the termination, cancellation, modification, amendment, violation, or renegotiation of any contract, agreement, indenture, instrument, or commitment, or (B) the acceleration or forfeiture of any term of payment;
 
(iv)   give any Person the right to (A) terminate, cancel, modify, amend, vary, or renegotiate any contract, agreement, indenture, instrument, or commitment, or (B) to accelerate or forfeit any term of payment; or
 
(v)   violate any Law applicable to the Stockholder or by which such Stockholder’s properties are bound or affected.
 
(b)   The execution and delivery of this Agreement by such Stockholder does not, and the performance of this Agreement by such Stockholder will not, require any consent, approval, authorization or permit of, or filing with or notification to, any governmental or regulatory authority, domestic or foreign, except (i) for applicable requirements, if any, of the Exchange Act, and (ii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not prevent or materially delay the performance by such Stockholder of such Stockholder's obligations under this Agreement.
 
2.4   Title to Shares . Such Stockholder is the legal and beneficial owner of its Shares, or will be the legal and beneficial owner of the Shares that such Stockholder will receive as a result of the Acquisition Transaction, free and clear of all liens and other encumbrances except certain restrictions upon the transfer of such Shares.
 

4



 
ARTICLE III
GENERAL PROVISIONS
 
3.1   Notices . All notices and other communications given or made pursuant hereto shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by overnight courier service, by telecopy, or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other addresses as shall be specified by notice given in accordance with this Section 3.1):
 
 
(a) If to FAAC:
Fortress America Acquisition Corporation
   
Attn: Harvey L. Weiss, Chairman of the Board
   
4100 North Fairfax Drive
   
Suite 1150
   
Arlington, Virginia 22203
   
Fax:
     
 
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
   
  (b) If to any Stockholder, to the address set forth opposite his, her or its name on Exhibit A .  
 
3.2   Headings . The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
 
3.3   Severability . If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible to the fullest extent permitted by applicable law in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible.
 
3.4   Entire Agreement . This Agreement constitutes the entire agreement of the parties and supersedes all prior agreements and undertakings, both written and oral, between the parties, or any of them, with respect to the subject matter hereof. This Agreement may not be amended or modified except in an instrument in writing signed by, or on behalf of, the parties hereto.
 
3.5   Specific Performance . The parties hereto agree that irreparable damage would occur in the event that any provision of this Agreement was not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy at law or in equity.
 

5



 
3.6   Governing Law . This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware applicable to contracts executed in and to be performed in that State.
 
3.7   Disputes . All actions and proceedings arising out of or relating to this Agreement shall be heard and determined exclusively in any state or federal court in Delaware.
 
3.8   No Waiver . No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.
 
3.9   Counterparts . This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.
 
3.10 Waiver of Jury Trial . Each of the parties hereto irrevocably and unconditionally waives all right to trial by jury in any action, proceeding or counterclaim (whether based in contract, tort or otherwise) arising out of or relating to this Agreement or the Actions of the parties hereto in the negotiation, administration, performance and enforcement thereof.
 
3.11 Shares subject to General Indemnity Escrow Agreement . Notwithstanding anything to the contrary contained in this Agreement, the undersigned acknowledge and agree that pursuant to the terms of the Membership Interest Purchase Agreement, certain of the Common Stock received by Rosato and Gallagher respectively have been deposited in either (i) a General Indemnity Escrow the “ General Indemnity Escrow ”) under the terms of a General Indemnity Escrow Agreement dated as of the date hereof, or (ii) a Balance Sheet Escrow (the “ Balance Sheet Escrow ”) pursuant to the terms of Balance Sheet Escrow Agreement dated as of the date hereof. The undersigned further acknowledge and agree that this Agreement shall not apply to any Common Shares owned by either Rosato or Gallagher that are then held in either the General Indemnity Escrow or Balance Sheet Escrow and that this Agreement shall only apply to those Common Shares after the Common Shares are released to Rosato, or Gallagher as the case may be from the General Indemnity Escrow or the Balance Sheet Escrow as applicable.
 

6


IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
 
 
FORTRESS AMERICA ACQUISITION CORPORATION ,
 
a Delaware corporation
   
   
 
By:/s/ Harvey L. Weiss
 
Name: Harvey L. Weiss
 
Title: Chairman
   
   
 
STOCKHOLDERS:
   
 
THE FOUNDERS GROUP:
   
   
   
 
/s/ C. Thomas McMillen
 
C. Thomas McMillen
   
 
/s/ Harvey L. Weiss
 
Harvey L. Weiss
   
   
   
 
THE TARGET GROUP:
   
   
   
 
/s/ Thomas P. Rosato
 
Thomas P. Rosato
   
   
 
/s/ Gerard J. Gallagher
 
Gerard J. Gallagher



7

 

Company Contact
Investor Relations:
Harvey Weiss
John McNamara
Chief Executive Officer
Cameron Associates
Fortress America Acquisition Corporation
212-245-8800 Ext. 205
703-528-7073 Ext. 102
john@cameronassoc.com
hweiss@fortressamerica.net
 

 
FORTRESS AMERICA ACQUISITION CORPORATION
COMPLETES  ACQUISITION OF TSS/VORTECH

Company Changing Name to “Fortress International Group”
 

ARLINGTON, VA - January 19, 2007 -   Fortress America Acquisition Corporation (FAAC, FAACU, FAACW) today completed its acquisition of VTC, L.L.C. (doing business as Total Site Solutions) and Vortech, LLC, two days after receiving approval from the public stockholders of the Company. Less than   10% of the Company’s public stockholders elected to convert their shares to cash.

Harvey Weiss, Chairman of the Company, said, “These are excellent results.  This means that stockholders delivered a strong vote of confidence in the quality of the transaction, the companies being acquired, and their management.”

In connection with the closing, Fortress America is changing its name to “Fortress International Group, Inc.”  The acquired companies are now wholly-owned subsidiaries of Fortress and will operate under the name Total Site Solutions (TSS). After the payments made in the acquisition and required payments to stockholders who exercised their conversion rights, the trust account will release to the Company over $29 million, or $2.46 in cash for each of the 11,966,213 shares outstanding after the acquisition.

Tom Rosato, Chief Executive Officer of Fortress, said  “We are looking forward to our future as a public operating company.  Total Site Solutions has a highly respected name in the mission-critical sector. The stronger balance sheet and increased working capital that this transaction provides the business will enable TSS to compete for much larger contracts than in the past.  Our bonding capacity will jump to $300 million, and the Company has today over $30 million to finance its acquisition strategy and recently announced stock repurchase program.”    

FORWARD-LOOKING STATEMENTS
 
This document may contain “forward-looking statements”—that is, statements related to future—not past—events, plans, and prospects. In this context, forward-looking statements may address matters such as our expected future business and financial performance, and often contain words such as “guidance,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “should,” or “will.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For Fortress, particular uncertainties that could adversely or positively affect the Company’s future results include: the Company’s reliance on a significant portion of its revenues from a limited number of customers; the uncertainty as to whether the Company can replace its declining backlog; risks involved in properly managing complex projects; risks relating to revenues under customer contracts, many of which can be canceled on short notice; risks related to the implementation of the Company’s strategic plan, including the ability to make acquisitions and the performance and future integration of acquired businesses; and other risks and uncertainties disclosed in the Company’s filings with the Securities and Exchange Commission. These uncertainties may cause the Company’s actual future results to be materially different than those expressed in the Company’s forward-looking statements. The Company does not undertake to update its forward-looking statements.
 


ABOUT FORTRESS
 
Fortress was established in December 2004 for the purpose of acquiring, through a merger, capital stock exchange, asset acquisition or other business combination, operating businesses in the homeland security industry.
 
ABOUT TOTAL SITE SOLUTIONS

VTC, L.L.C., doing business as Total Site Solutions (“TSS”), supplies industry and government with secure data centers and other mission critical facilities designed to survive terrorist attacks, natural disasters, and blackouts. TSS’s comprehensive suite of services, multi-disciplinary expertise, and products provide customers a single source for critical deliverables. Headquartered in the Baltimore-Washington Corridor, with offices in San Francisco and Atlanta, TSS clients and the end users of its services include the world’s most demanding organizations, including Fortune 500 firms and U.S. Government agencies. For more information, call 866-363-4TSS (4877) or visit www.totalsiteteam.com .

ABOUT VORTECH, LLC

Vortech, LLC (“Vortech”) provides secure data and voice networks as well as redundant power for government and industry mission-critical facilities. A leader in structured cabling solutions, power system installations, and emergency power solutions for data center and high technology environments, Vortech also provides value-added systems and network integration services for perimeter security and access control where physical security and information technology intersect. For more information, visit www.govortech.com .