FORTRESS AMERICA ACQUISITION CORPORATION II Suite 550 Arlington, VA 22201
FORTRESS AMERICA ACQUISITION CORPORATION II
0000
Xxxxx Xxxxx Xxxx
Xxxxx
000
Xxxxxxxxx,
XX 00000
May
18,
0000
Xx.
X.
Xxxx Xxxxxxxx
x/x
Xxxxxxxx Xxxxxxx Acquisition Corporation II
0000
Xxxxx Xxxxx Xxxx
Xxxxx
000
Xxxxxxxxx,
XX
00000
Dear
Xx.
Xxxxxxxx:
We
are
pleased that S. Xxxx Xxxxxxxx (the “Subscriber”)
desires to purchase 30,000 shares of Common
Stock,
$0.0001
par
value per share (the “Shares”),
of
Fortress America Acquisition Corporation II,
a
Delaware corporation
(the “Company”).
The
terms on which the Company is willing to issue the Shares to the Subscriber,
and
the Company and the Subscriber’s agreements regarding such Shares, are as
follows:
1. Purchase
of Shares.
For the
aggregate sum of Three
Hundred Dollars ($300.00)
(the
“Purchase
Price”),
which
the Company acknowledges receiving in cash, the Company hereby sells and issues
the Shares to the Subscriber, and the Subscriber hereby purchases the Shares
from the Company, on the terms and subject to the conditions set forth in this
Stock Subscription Agreement (the “Agreement”).
Promptly after the Subscriber’s execution of this Agreement, the Company will
deliver to the Subscriber a certificate registered in the Subscriber’s name
representing the Shares, receipt of which the Subscriber hereby
acknowledges.
2. The
Subscriber’s Representations, Warranties and Agreements.
To
induce the Company to issue the Shares to the Subscriber, the Subscriber hereby
represents and warrants to the Company and agrees with the Company as
follows:
2.1 Experience,
Financial Capability and Suitability.
The
Subscriber is sufficiently experienced in financial and business matters to
be
capable of evaluating the merits and risks of this investment and to make an
informed decision relating thereto. The Subscriber is aware that its investment
in the Company is a speculative investment that has limited liquidity, because
there may never be an established market for the Company’s capital stock. The
Subscriber has the financial capability for making the investment and the
investment is a suitable one for the Subscriber. The Subscriber can, without
impairing its financial condition, hold the Shares for an indefinite period
of
time and can afford a complete loss of its investment. The Subscriber
acknowledges that the Company has urged the Subscriber to seek independent
advice from professional advisors relating to the suitability of an investment
in the Company and in connection with this Agreement, and that the Subscriber
has sought and received such independent professional advice with respect to
such investment and this Agreement or, after careful consideration, the
Subscriber has determined to waive its right to seek and/or receive such
independent professional advice.
2.2 Access
to Information.
Prior
to the execution of this Agreement, the Subscriber has had the opportunity
to
ask questions of and receive answers from representatives of the Company
concerning an investment in the Company, as well as the finances, operations,
business and prospects of the Company, and the opportunity to obtain additional
information to verify the accuracy of all information so obtained.
2.3 Investment
Intent.
The
Subscriber understands that the Shares are not being registered under the
Securities Act of 1933, as amended (the “Securities
Act”),
or
any state securities or “blue sky” laws, by reason of a specific exemption
therefrom, and that the Shares may not be transferred except in compliance
with
such laws. The Subscriber is acquiring the Shares for its own account for the
purpose of investment and not with a view to, or for resale in connection with,
the “distribution” thereof (within the meaning of the Securities Act), nor with
any present intention of distributing or selling the Shares.
2.4 Rule
144 Acknowledgements.
The
Subscriber is aware of the adoption of Rule 144 by the Securities and Exchange
Commission under the Securities Act (“Rule
144”),
which
permits limited public resale of securities acquired in a non-public offering,
subject to the satisfaction of certain conditions, including, without
limitation, the availability of certain current public information about the
issuer, the resale occurring only after the holding period required by Rule
144
has been satisfied, the resale occurring through an unsolicited “broker’s
transaction,” and the amount of securities being sold during any three-month
period not exceeding specified limitations. The Subscriber understands that
the
Shares are “restricted securities” as that term is defined in Rule 144 and
that the Shares must be held indefinitely by the Subscriber unless they are
subsequently registered under the Securities Act or an exemption from such
registration, such as Rule 144, is available. The Subscriber further understands
that there is not now available and there may not be available at the time
the
Subscriber wishes to sell the Shares the adequate current public information
with respect to the Company which would permit resale of the Shares under Rule
144, and that the Company has no obligation to, and has not represented to
the
Subscriber that it will, register the Shares for public sale under the
Securities Act or make available to the public the information required by
Rule
144.
2.5 Accredited
Investor Certification.
In
connection with the Subscriber’s investment in the Company, and to induce the
Company to sell the Shares to the Subscriber, the Subscriber hereby represents,
warrants and agrees that it is an accredited investor as such term is defined
in
Regulation D of the Securities Act.
2
3. Forfeiture
of Shares.
3.1 Failure
to Consummate Business Combination.
All
of the
Shares initially shall be subject to forfeiture to the Company in accordance
with this Section 3. The
Shares shall be forfeited to the Company in the event that the Company does
not
consummate a Business Combination (as such term is defined in the Company’s
Registration Statement on Form S-1 under the Securities Act of 1933, as amended
(the “Registration
Statement”))
by
the date which is twenty-four (24) months from the effective date of the
Registration Statement.
3.2 Termination
of Rights as Stockholder; Escrow.
If the
Shares are forfeited in accordance with this Section 3, then after such time
the
Subscriber (or successor in interest), shall no longer have any rights as a
holder of such Shares, and the Company shall take such action as is appropriate
to cancel such Shares. To effectuate the foregoing, all certificates
representing the Shares shall be held in escrow by the
Company’s legal counsel
or an
escrow agent until the earlier of forfeiture or the consummation of a Business
Combination within the required time periods set forth in Section 3.1 above.
In
addition, the Subscriber hereby irrevocably grants the Company a limited power
of attorney for the purpose of effectuating the foregoing.
4. Restrictions
on Transfer.
4.1 Securities
Law Restrictions.
The
Subscriber agrees not to sell, transfer, pledge, hypothecate or otherwise
dispose of (“Transfer”)
all or
any part of the Shares unless, prior thereto (a) a registration statement on
the
appropriate form under the Securities Act and applicable state securities laws
with respect to the Shares proposed to be transferred shall then be effective,
or (b) the Company shall have received an opinion from counsel reasonably
satisfactory to the Company, that such registration is not required because
such
transaction complies with the Securities Act and the rules promulgated by the
Securities and Exchange Commission thereunder and with all applicable state
securities laws.
4.2 Legending
of Shares.
All
certificates representing the Shares shall have endorsed thereon a legend
substantially as follows:
“The
securities represented by this certificate have not been registered under the
Securities Act of 1933, as amended (the “Act”),
or
any state securities law and may not be sold, pledged, hypothecated, transferred
or otherwise disposed of in the absence of an effective registration statement
covering these securities under the Act and all applicable state securities
laws
or an opinion from counsel reasonably satisfactory to the Company in form and
substance satisfactory to the Company that registration is not required under
the Act or under applicable state securities laws.”
4.3 Additional
Shares or Substituted Securities.
In the
event of the declaration of a stock dividend, the declaration of an
extraordinary dividend payable in a form other than stock, a spin-off, a stock
split, an adjustment in conversion ratio, a recapitalization or a similar
transaction affecting the Company’s outstanding capital stock without receipt of
consideration, any new, substituted or additional securities or other property
which are by reason of such transaction distributed with respect to any Shares
subject to this Section 4 or into which such Shares thereby become convertible
shall immediately be subject to Section 3 and Section 4 hereof. Appropriate
adjustments to reflect the distribution of such securities or property shall
be
made to the number and/or class of Shares subject to this Section
4.
3
5. Other
Agreements.
5.1 Further
Assurances.
The
Subscriber agrees to execute such further instruments and to take such further
action as may reasonably be necessary to carry out the intent of this
Agreement.
5.2 No
Obligation as to Employment.
The
Company is not by reason of this Agreement obligated to employ, or to continue
to employ, the Subscriber in any capacity.
5.3 Notices.
All
notices, requests, consents and other communications hereunder shall be in
writing, shall be addressed to the receiving party’s address set forth on the
first page of this Agreement or to such other address as a party may designate
by notice hereunder, and shall be either (a) delivered by hand, (b) sent by
overnight courier, or (c) sent by certified mail, return receipt requested,
postage prepaid. All notices, requests, consents and other communications
hereunder shall be deemed to have been given either (i) if by hand, at the
time
of the delivery thereof to the receiving party at the address of such party
set
forth above, (ii) if sent by overnight courier, on the next business day
following the day such notice is delivered to the courier service, or (iii)
if
sent by certified mail, on the fifth business day following the day such mailing
is made.
5.4 Entire
Agreement.
This
Agreement embodies the entire agreement and understanding between the Subscriber
and the Company with respect to the subject matter hereof and supersedes all
prior oral or written agreements and understandings relating to the subject
matter hereof. No statement, representation, warranty, covenant or agreement
of
any kind not expressly set forth in this Agreement shall affect, or be used
to
interpret, change or restrict, the express terms and provisions of this
Agreement.
5.5 Modifications
and Amendments.
The
terms and provisions of this Agreement may be modified or amended only by
written agreement executed by all parties hereto.
5.6 Waivers
and Consents.
The
terms and provisions of this Agreement may be waived, or consent for the
departure therefrom granted, only by written document executed by the party
entitled to the benefits of such terms or provisions. No such waiver or consent
shall be deemed to be or shall constitute a waiver or consent with respect
to
any other terms or provisions of this Agreement, whether or not similar. Each
such waiver or consent shall be effective only in the specific instance and
for
the purpose for which it was given, and shall not constitute a continuing waiver
or consent.
5.7 Assignment.
The
rights and obligations under this Agreement may not be assigned by either party
hereto without the prior written consent of the other party.
4
5.8 Benefit.
All
statements, representations, warranties, covenants and agreements in this
Agreement shall be binding on the parties hereto and shall inure to the benefit
of the respective successors and permitted assigns of each party hereto. Nothing
in this Agreement shall be construed to create any rights or obligations except
among the parties hereto, and no person or entity shall be regarded as a
third-party beneficiary of this Agreement.
5.9 Governing
Law.
This
Agreement and the rights and obligations of the parties hereunder shall be
construed in accordance with and governed by the law of Delaware, without giving
effect to the conflict of law principles thereof.
5.10 Severability.
In the
event that any court of competent jurisdiction shall determine that any
provision, or any portion thereof, contained in this Agreement shall be
unreasonable or unenforceable in any respect, then such provision shall be
deemed limited to the extent that such court deems it reasonable and
enforceable, and as so limited shall remain in full force and effect. In the
event that such court shall deem any such provision, or portion thereof, wholly
unenforceable, the remaining provisions of this Agreement shall nevertheless
remain in full force and effect.
5.11 No
Waiver of Rights, Powers and Remedies.
No
failure or delay by a party hereto in exercising any right, power or remedy
under this Agreement, and no course of dealing between the parties hereto,
shall
operate as a waiver of any such right, power or remedy of such party. No single
or partial exercise of any right, power or remedy under this Agreement by a
party hereto, nor any abandonment or discontinuance of steps to enforce any
such
right, power or remedy, shall preclude such party from any other or further
exercise thereof or the exercise of any other right, power or remedy hereunder.
The election of any remedy by a party hereto shall not constitute a waiver
of
the right of such party to pursue other available remedies. No notice to or
demand on a party not expressly required under this Agreement shall entitle
the
party receiving such notice or demand to any other or further notice or demand
in similar or other circumstances or constitute a waiver of the rights of the
party giving such notice or demand to any other or further action in any
circumstances without such notice or demand.
5.12 Survival
of Representations and Warranties.
All
representations and warranties made by the parties hereto in this Agreement
or
in any other agreement, certificate or instrument provided for or contemplated
hereby, shall survive the execution and delivery hereof and any investigations
made by or on behalf of the parties.
5.13 No
Broker or Finder.
Each of
the parties hereto represents and warrants to the other that no broker, finder
or other financial consultant has acted on its behalf in connection with this
Agreement or the transactions contemplated hereby in such a way as to create
any
liability on the other. Each of the parties hereto agrees to indemnify and
save
the other harmless from any claim or demand for commission or other compensation
by any broker, finder, financial consultant or similar agent claiming to have
been employed by or on behalf of such party and to bear the cost of legal
expenses incurred in defending against any such claim.
5
5.14 Headings
and Captions.
The
headings and captions of the various subdivisions of this Agreement are for
convenience of reference only and shall in no way modify or affect the meaning
or construction of any of the terms or provisions hereof.
5.15 Counterparts.
This
Agreement may be executed in one or more counterparts, and by different parties
hereto on separate counterparts, each of which shall be deemed an original,
but
all of which together shall constitute one and the same instrument. Facsimile
signatures shall constitute original signatures for all purposes of this
Agreement.
(Remainder
of page intentionally left blank. Signature page to
follow.)
6
If
the
foregoing accurately sets forth our understanding and agreement, please sign
the
enclosed copy of this agreement and return it to us.
| Very truly yours, | ||
|
FORTRESS AMERICA ACQUISITION CORPORATION II
|
||
| |
|
|
| By: | /s/ C. Xxxxxx XxXxxxxx | |
|
Name: C. Xxxxxx XxXxxxxx |
||
| Title: Co-Chief Executive Officer | ||
Accepted
and agreed this
18th
day of
May, 2007
| /s/ S. Xxxx Xxxxxxxx | |||
|
Name: S. Xxxx Xxxxxxxx |
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