Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
13D
Under
the Securities Exchange Act of 1934
(Amendment
No. )*
Fortress
International Group, Inc.
(formerly
Fortress America Acquisition Corporation)
(Name
of
Issuer)
Common
Stock, $0.0001 par value
(Title
of
Class of Securities)
34957J
10 0
(CUSIP
Number)
Thomas
P.
Rosato
9841
Broken Land Parkway
Columbia,
Maryland 21046
Telephone:
(410) 312-9988
(Name,
Address and Telephone Number of Person Authorized to
Receive
Notices and Communications)
with
a
copy to:
Squire,
Sanders & Dempsey L.L.P.
8000
Towers Crescent Drive, 14th
floor
Tysons
Corner, VA 22182
Attention:
James J. Maiwurm
Telephone:
(703) 720-7890
January
19, 2007
(Date
of
Event Which Requires Filing of this Statement)
If
the
filing person has previously filed a statement on Schedule 13G to report the
acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box. o
Note:
Schedules filed in paper format shall include a signed original and five copies
of the schedule, including all exhibits. See §240.13d-7 for other parties to
whom copies are to be sent.
*
The
remainder of this cover page shall be filled out for a reporting person’s
initial filing on this form with respect to the subject class of securities,
and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The
information required on the remainder of this cover page shall not be deemed
to
be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934
(“Act”) or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however, see the
Notes).
Persons
who respond to the collection of information contained in this form are not
required to respond unless the form displays a currently valid OMB control
number.
CUSIP
No.
34957J 10 0
1
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NAMES
OF REPORTING PERSONS:
Thomas
P. Rosato
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I.R.S.
IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY):
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2
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CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE
INSTRUCTIONS):
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(a)
o
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(b)
x
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3
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SEC
USE ONLY:
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4
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SOURCE
OF FUNDS (SEE INSTRUCTIONS):
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PF
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5
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CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR
2(e):
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o
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6
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CITIZENSHIP
OR PLACE OF ORGANIZATION:
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USA
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NUMBER
OF
SHARES
BENEFICIALLY
OWNED
BY
EACH
REPORTING
PERSON
WITH
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7
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SOLE
VOTING POWER:
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1,635,555
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8
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SHARED
VOTING POWER:
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0
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9
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SOLE
DISPOSITIVE POWER:
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1,635,555
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10
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SHARED
DISPOSITIVE POWER:
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0
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11
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AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:
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1,635,555
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12
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CHECK
IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE
INSTRUCTIONS):
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o
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13
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PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
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14.4%
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14
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TYPE
OF REPORTING PERSON (SEE INSTRUCTIONS):
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IN
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Item
1. Security
and Issuer.
The
class
of equity securities to which this Schedule 13D relates is the common stock,
par
value $0.0001 per share (the “Common
Stock”),
of
Fortress International Group, Inc., a Delaware corporation formerly known as
Fortress America Acquisition Corporation (the “Issuer”).
The
address of the principal executive offices of the Issuer is 9841 Broken Land
Parkway, Columbia, Maryland 21046.
Item
2. Identity
and Background.
This
Schedule 13D is filed on behalf of Thomas P. Rosato (the “Reporting
Person”)
with
respect to shares of Common Stock beneficially held by the Reporting Person.
This
Schedule 13D relates to 1,635,555 shares of Common Stock (the “Shares”)
held
by Reporting Person.
Reporting
Person serves as a director and chief executive officer of the
Issuer.
The
business address of Reporting Person is 9841 Broken Land Parkway, Columbia,
Maryland 21046.
During
the past five years, the Reporting Person has not been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or was a
party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction as a result of which such person was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws, or finding
any violation with respect to such laws.
Reporting
Person is a citizen of a United States.
Item
3. Source
and Amount of Funds or Other Consideration.
On
January 16, 2007, the Reporting Person purchased in the market 174,000 shares
of
Common Stock at an average per share price of $5.71, with personal funds,
including funds borrowed on commercial terms by the Reporting
Person.
On
January 19, 2007, the Issuer acquired (the “Acquisition”)
all of
the outstanding membership interests of VTC, L.L.C., doing business as “Total
Site Solutions” (“TSS”),
and
Vortech, LLC (“Vortech”
and,
together with TSS, “TSS/Vortech”)
from
the Reporting Person, Gerard J. Gallagher and certain other selling members
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
acquisition 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 Common
Stock, of which 1,461,555 shares were issued to the Reporting Person, and (d)
$10.0 million in two convertible, interest-bearing promissory notes (the
“Convertible
Notes”)
of
$5.0 million each, of which the Reporting Person received one Convertible Note.
Item
4. Purpose
of Transaction.
The
Reporting Person acquired the Shares for investment purposes. The Reporting
Person may, from time to time, depending upon market conditions and other
factors deemed relevant by the Reporting Person, acquire additional shares
of
Common Stock or warrants to purchase shares of Common Stock. The Reporting
Person reserves the right to, and may in the future choose to, change his
purpose with respect to his investment and take such actions as he deems
appropriate in light of the circumstances including, without limitation, to
dispose of, in the open market, in a private transaction or by gift, all or
a
portion of the shares of Common Stock which he now owns or may hereafter
acquire.
At
the
date of this statement, the Reporting Person, except as set forth in this
statement and consistent with the Reporting Person’s position with the Issuer,
has no plans or proposals which would result in:
(a)
The
acquisition by any person of additional securities of the Issuer, or the
disposition of securities of the Issuer;
(b)
An
extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving the Issuer or any of its subsidiaries;
(c)
A
sale or transfer of a material amount of assets of the Issuer or any of its
subsidiaries;
(d)
Any
change in the present board of directors or management of the Issuer, including
any plans or proposals to change the number or term of directors or to fill
any
existing vacancies on the board;
(e)
Any
material change in the present capitalization or dividend policy of the
Issuer;
(f)
Any
other material change in the Issuer’s business or corporate
structure;
(g)
Changes in the Issuer’s charter, bylaws or instruments corresponding thereto or
other actions which may impede the acquisition of control of the Issuer by
any
person;
(h)
Causing a class of securities of the Issuer to be delisted from a national
securities exchange or to cease to be authorized to be quoted in an inter-dealer
quotation system of a registered national securities association;
(i)
A
class of equity securities of the issuer becoming eligible for termination
of
registration pursuant to Section 12(g)(4) of the Exchange Act; or
(j)
Any
action similar to any of those actions enumerated above.
Item
5. Interest
in Securities of the Issuer.
All
of
the percentages calculated in this statement take into account 2,602,813 shares
issued in connection with the Acquisition and the conversion of approximately
756,500 shares of Common Stock into cash in connection with the vote on the
Acquisition, resulting in approximately 11,396,314 outstanding shares of Common
Stock (not including any shares issuable upon the exercise of warrants to
purchase Common Stock). This number of outstanding shares does not include
574,000 shares to be issued to employees of TSS/Vortech in connection with
the
acquisition of TSS/Vortech.
As
of the
date of this statement, the Reporting Person may be deemed to be the beneficial
owner of an aggregate of 1,635,555 shares of Common Stock, which represents
approximately 14.4% of the Common Stock outstanding as of the date of this
statement. The Reporting Person has the sole power to vote or direct the vote
of, and to dispose or direct the disposition of, all of the 1,635,555 shares
he
holds.
Item
6. Contracts,
Arrangements, Understandings or Relationships with Respect to Securities of
the
Issuer.
Convertible
Note.
The
Issuer issued to the Reporting Person and Gerard J. Gallagher, as selling
members, a Convertible Note in the principal amount of $5.0 million on January
19, 2007, the closing of the Acquisition. Each Convertible Note bears interest
at six percent per year and has a term of five years. Interest only is payable
during the first two years of each Convertible Note, with principal payments
commencing on the second anniversary of the note and continuing throughout
the
balance of the term of each Convertible Note in equal quarterly installments
of
$416,667. At any time after the sixth month following the closing of the
Acquisition, each Convertible Note is convertible by the holder into shares
of
Common Stock at a conversion price of $7.50 per share. At any time after the
sixth month following the closing of the acquisition, each Convertible Note
is
automatically convertible if the average closing price of the Common Stock
for
20 consecutive trading days equals or exceeds $7.50 per share.
Escrow
Agreements.
In
connection with the closing of the Acquisition, on January 19, 2007, the Issuer,
TSS, Vortech, the Reporting Person, Gerard J. Gallagher, the Reporting Person
as
Members’ Representative, and SunTrust Bank, as escrow agent, entered into two
separate escrow agreements to secure certain post-closing obligations of the
Reporting Person and Gerard J. Gallagher: a Balance Sheet Escrow Agreement
and a
General Indemnity Escrow Agreement. Under the Balance Sheet Escrow Agreement,
the Issuer deposited with the escrow agent 73,260 shares of Common Stock to
secure any post-closing adjustments in the purchase price in the Issuer’s favor.
Under
the
General Indemnity Escrow Agreement, the Issuer deposited with the escrow agent
2,461,728 shares of Common Stock to secure certain indemnification obligations
of the selling members under the Purchase Agreement. The deposit by the
Reporting Person of shares of Common Stock under the escrow agreements comprise
of all of the shares of Common Stock issued to the Reporting Person in the
Acquisition
Lock-Up
Agreement.
The
Issuer and, as stockholders, the Reporting Person, Mr. Gallagher and Evergreen
Capital LLC entered into a Lock-Up Agreement (the “Lock-Up
Agreement”)
dated
January 19, 2007 in connection with the closing of the Acquisition. Under the
terms of the Lock-Up Agreement, the Reporting Person and other stockholders
party thereto agree that they will not sell, offer to sell, contract or agree
to
sell, hypothecate, pledge, grant any option to purchase or otherwise dispose
of
or agree to dispose of, directly or indirectly, or file (or participate in
the
filing of) a registration statement with the Securities and Exchange Commission
or enter into any arrangement that transfers to another any of the economic
consequences of ownership of the shares issued to such stockholder under the
Purchase Agreement or upon conversion of a Convertible Note until July 13,
2008.
Registration
Rights Agreement.
The
Issuer and, as stockholders, the Reporting Person, Gerard Gallagher and
Evergreen Capital LLC are parties to a registration rights agreement dated
January 19, 2007 (the “Registration
Rights Agreement”).
All
2,534,988 of the shares of Common Stock issued to the Reporting Person, Mr.
Gallagher and Evergreen Capital LLC in connection with the acquisition are
“Registrable
Securities”.
The
holders of a majority-in-interest of the Registrable Securities may make a
written demand for registration under the Securities Act of 1933, as amended,
of
all or part of their Registrable Securities. Additionally, if elected by a
majority-in-interest of the demanding stockholders, the registration shall
be
made pursuant to an underwritten offering. The Issuer shall not be obligated
to
effect more than an aggregate of two demand registrations under the Registration
Rights Agreement. The holders of Registrable Securities, including the Reporting
Person, also have certain rights to include shares of Common Stock in a
registration statement proposed to be filed by the Issuer under the Securities
Act of 1933, as amended. The holders of Registrable Securities also have certain
rights to require, on an unlimited number of occasions, that the Issuer register
any or all of their shares of Common Stock on a “Form S-3” or any similar
short-form registration which is available to the Issuer at the time, subject
to
the requirement that the aggregate offering to the public must be at least
$0.5 million.
Voting
Agreement.
On
January 19, 2007, at the closing of the Acquisition, the Issuer and, as
stockholders, the Reporting Person and Gerard Gallagher, C. Thomas McMillen
and
Harvey L. Weiss entered into a Voting Agreement (the “Voting
Agreement”).
The
Voting Agreement terminates immediately following the re-election of directors
at the Issuer’s 2008 annual meeting.
In
the
Voting Agreement, the stockholders party thereto agree to vote their shares
in
favor of the following with respect to the election of directors:
· |
the
Reporting Person and Gerard Gallagher have the right to propose the
nomination of four nominees to the Issuer’s board of directors, two of
whom must constitute “independent directors” within the meaning of NASDAQ
rules, provided that at least one such “independent director” is approved
by members of the board of directors that are not so nominated by
the
Reporting Person and Gerard Gallagher;
and
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the
members of the board of directors who are not nominated by the Reporting
Person and Gerard Gallagher have the right to designate five members
of
the board of directors, three of whom must constitute “independent
directors” within the meaning of NASDAQ rules, provided that at least one
such “independent director” must be approved by the Reporting Person and
Gerard Gallagher.
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In
the
Voting Agreement, each stockholder party thereto has agreed to vote his shares
to elect the following individuals to the Issuer’s board of directors: Gerard J.
Gallagher; C. Thomas McMillen; David J. Mitchell; Donald L. Nickles; Thomas
P.
Rosato; and Harvey L. Weiss. While any director may be removed from the board
of
directors in the manner allowed by law and the Issuer’s governing documents,
each of the Reporting Person and Gerard Gallagher and the members of the board
not nominated by the Reporting Person and Gerard Gallagher have agreed not
to
vote their shares for the removal of the other group’s designees absent written
approval of such group.
In
the
Voting Agreement, the Reporting Person and Gerard Gallagher and
Messrs. McMillen and Weiss agree to vote their shares, to the extent
applicable, in favor of electing the following individuals to the following
offices:
Harvey
L. Weiss
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Chairman
of the Board of Directors
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C.
Thomas McMillen
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Vice
Chairman of the Board of Directors
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Thomas
P. Rosato
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Chief
Executive Officer
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Gerard
J. Gallagher
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President/Chief
Operating Officer
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Item
7. Material
to be Filed as Exhibits.
Exhibit
Number
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Description
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99.1
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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 of the Issuer dated December 27, 2006 and incorporated
by
reference herein)
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99.2
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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 of the Issuer dated January 19, 2007
and
incorporated by reference herein)
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99.3
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Convertible
Promissory Note dated January 19, 2007 made by Fortress America
Acquisition Corporation
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99.4
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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 (included as Exhibit 10.3 to the
Current
report on Form 8-K of the Issuer dated January 19, 2007 and incorporated
by reference herein)
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99.5
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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
(included as Exhibit 10.4 to the Current report on Form 8-K of the
Issuer
dated January 19, 2007 and incorporated by reference
herein)
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99.6
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Lock-Up
Agreement dated January 19, 2007 among Fortress America Acquisition
Corporation, Thomas P. Rosato, Gerard J. Gallagher and Evergreen
Capital
LLC
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99.7
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Registration
Rights Agreement among Fortress America Acquisition Corporation and
Thomas
P. Rosato and Gerard J. Gallagher (included as Exhibit 10.5 to the
Current
report on Form 8-K of the Issuer dated January 19, 2007 and incorporated
by reference herein)
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99.8
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Voting
Agreement dated January 19, 2007 by Fortress America Acquisition
Corporation, Thomas P. Rosato, Gerard J. Gallagher, C. Thomas McMillen
and
Harvey L. Weiss (included as Exhibit 10.11 to the Current report
on Form
8-K of the Issuer dated January 19, 2007 and incorporated by reference
herein)
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SIGNATURE
After
reasonable inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and
correct.
Dated:
January 29, 2007 |
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THOMAS
P.
ROSATO |
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By: |
/s/ Thomas
P.
Rosato |
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Name: |
Thomas
P. Rosato |
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EXHIBIT
INDEX
Exhibit
Number
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Description
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99.1
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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 of the Issuer dated December 27, 2006 and incorporated
by
reference herein)
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99.2
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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 of the Issuer dated January 19, 2007
and
incorporated by reference herein)
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99.3
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Convertible
Promissory Note dated January 19, 2007 made by Fortress America
Acquisition Corporation
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99.4
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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 (included as Exhibit 10.3 to the
Current
report on Form 8-K of the Issuer dated January 19, 2007 and incorporated
by reference herein)
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99.5
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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
(included as Exhibit 10.4 to the Current report on Form 8-K of the
Issuer
dated January 19, 2007 and incorporated by reference
herein)
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99.6
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Lock-Up
Agreement dated January 19, 2007 among Fortress America Acquisition
Corporation, Thomas P. Rosato, Gerard J. Gallagher and Evergreen
Capital
LLC
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99.7
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Registration
Rights Agreement among Fortress America Acquisition Corporation and
Thomas
P. Rosato and Gerard J. Gallagher (included as Exhibit 10.5 to the
Current
report on Form 8-K of the Issuer dated January 19, 2007 and incorporated
by reference herein)
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99.8
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Voting
Agreement dated January 19, 2007 by Fortress America Acquisition
Corporation, Thomas P. Rosato, Gerard J. Gallagher, C. Thomas McMillen
and
Harvey L. Weiss (included as Exhibit 10.11 to the Current report
on Form
8-K of the Issuer dated January 19, 2007 and incorporated by reference
herein)
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