**Exhibit 10.5**

 

October 19, 2005

 

Federal ServicesAcquisition Corporation

900 Third Avenue, 33rdFloor

New York, New York  10022

 

Re:          InitialPublic Offering

 

Gentlemen:

 

This letter is beingdelivered to you in accordance with the Underwriting Agreement (the “UnderwritingAgreement”) entered into by and between Federal Services AcquisitionCorporation, a Delaware corporation (the “Company”), and CRT Capital Group LLC(the “Underwriter”), relating to an underwritten initial public offering (the “IPO”)of the Company’s units (the “Units”), each comprised of one share of theCompany’s common stock, par value $0.0001 per share (the “Common Stock”), andtwo warrants, each of which are exercisable for one share of Common Stock(each, a “Warrant”). Certain capitalized terms used herein are defined inparagraph 10 hereof.

 

Inorder to induce the Company and the Underwriter to enter into the UnderwritingAgreement and to proceed with the IPO, and in recognition of the benefit thatsuch IPO will confer upon FSAC Partners, LLC, a stockholder of the Company, andfor other good and valuable consideration, the receipt and sufficiency of whichare hereby acknowledged, the undersigned in the name of and on behalf of FSACPartners, LLC hereby agrees with the Company as follows:

 

1.             Ifthe Company solicits approval of its stockholders of a Business Combination, FSACPartners, LLC will vote all Insider Shares and IPO Shares owned by it inaccordance with the majority of the votes cast by the Public Stockholders.

 

2.             Inthe event that the Company fails to consummate a Business Combination within 18months from the effective date (“Effective Date”) of the registration statementrelating to the IPO or 24 months under the circumstances described in theprospectus relating to the IPO) (the first to occur of such date, the “TransactionFailure Date”), FSAC Partners, LLC will take all reasonable actions within itspower to cause (i) the Trust Fund to be liquidated and distributed to theholders of the IPO Shares as soon as practicable but in no event later than 60(sixty) calendar days after the Transaction Failure Date and (ii) cause theCompany to dissolve and liquidate as soon as practicable (the earliest date onwhich the conditions in clauses (i) and (ii) are both satisfied being the “LiquidationDate”). FSAC Partners, LLC hereby waives any and all right, title, interest orclaim of any kind in or to any distributions of the Trust Fund as a result ofsuch distribution with respect to its Insider Shares (“Claim”) and herebywaives any Claim FSAC Partners, LLC may have in the future as a result of, orarising out of, any contracts or agreements with the Company and will not seekrecourse against the Trust Fund for any reason whatsoever. FSAC Partners, LLChereby agrees that the Company shall be entitled to

 

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reimbursement from FSAC Partners, LLC for anydistribution of the Trust Fund received by FSAC Partners, LLC in respect ofsuch person’s Insider Shares.

 

3.             FSACPartners, LLC acknowledges and agrees that the Company will not consummate itsinitial Business Combination with any company which is affiliated with one ormore of the Insiders. Without limiting the generality of the foregoing, in noevent will the Company seek to acquire as its initial Business Combination anyof the portfolio companies in which any private equity funds managed by Joel R.Jacks or Peter M. Schulte have an investment.

 

4.             Inorder to minimize potential conflicts of interest which may arise from multipleaffiliations, FSAC Partners, LLC will present to the Company for itsconsideration, prior to presentation to any other person or company, anysuitable opportunity to acquire a Target Business, until the earlier of theconsummation by the Company of a Business Combination, the distribution of theTrust Fund or until such time as the undersigned ceases to be a stockholder ofthe Company, subject to any pre-existing fiduciary obligations FSAC Partners,LLC might have.

 

5.             NeitherFSAC Partners, LLC nor any of its Affiliates will be entitled to receive andwill not accept any compensation for services rendered to the Company prior to orin connection with the consummation of the Business Combination, providedthat commencing on the effective date of the IPO, CM Equity Management, L.P. (“RelatedParty”) shall be allowed to charge the Company an allocable share of RelatedParty’s overhead, up to $7,500 per month to compensate it for the Company’s useof Related Party’s offices, utilities and personnel. FSAC Partners, LLC or any ofits Affiliates shall also be entitled to reimbursement from the Company for itsor their out-of-pocket expenses incurred in connection with seeking andconsummating a Business Combination.

 

6.             NeitherFSAC Partners, LLC nor any of its Affiliates will be entitled to receive, oraccept, a finder’s fee or any other compensation in the event FSAC Partners,LLC or any of its Affiliates originates a Business Combination.

 

7.             FSACPartners, LLC will escrow its Insider Shares for the three year periodcommencing on the Effective Date subject to the terms of a Stock EscrowAgreement which the Company will enter into with an escrow agent acceptable tothe Company.

 

8.             FSACPartners, LLC agrees to be a stockholder of the Company until the earlier ofthe consummation by the Company of a Business Combination or the LiquidationDate. The information furnished to the Company by FSAC Partners, LLC is trueand accurate in all respects, does not omit any material information withrespect to FSAC Partners, LLC and contains all of the information required tobe disclosed pursuant to Section 401 of Regulation S-K, promulgated under theSecurities Act of 1933. FSAC Partners, LLC’s questionnaires furnished to theCompany and the Underwriter and attached hereto as Exhibit A are true andaccurate in all respects. FSAC Partners, LLC represents and warrants that:

 

(a)           FSACPartners, LLC is not, and its control person are not, subject to or arespondent in any legal action for, any injunction, cease-and-desist order ororder or stipulation

 

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to desist or refrain from any act or practice relatingto the offering of securities in any jurisdiction;

 

(b)           FSACPartners, LLC has never, and its control person have never, been convicted ofor pleaded guilty to any crime (i) involving any fraud or (ii) relating to anyfinancial transaction or handling of funds of another person, or (iii)pertaining to any dealings in any securities and he is not currently adefendant in any such criminal proceeding; and

 

(c)           FSACPartners, LLC has never, and its control person have never, been suspended orexpelled from membership in any securities or commodities exchange orassociation or had a securities or commodities license or registrations denied,suspended or revoked.

 

9.             FSACPartners, LLC has full right and power, without violating any agreement bywhich its is bound (including, without limitation, any non-competition ornon-solicitation agreement with any employer or former employer), to enter intothis letter agreement .

 

10.           Asused herein, (i) a “Business Combination” shall mean an acquisition by merger,capital stock exchange, asset acquisition, stock purchase, reorganization orotherwise, of an operating business in the federal services or defense industryselected by the Company; (ii) ”Insiders” shall mean all officers,directors and stockholders of the Company immediately prior to the IPO; (iii) “InsiderShares” shall mean all of the shares of Common Stock of the Company owned by anInsider prior to the IPO; (iv) “IPO Shares” shall mean the shares of CommonStock issued in the Company’s IPO; (v) “Public Stockholders” shall mean thosepersons other than the Insiders that are holders of IPO Shares; (vi) “TargetBusiness” shall mean any operating business in the federal services and defenseindustries which the Company seeks to acquire in a Business Combination; and (vii)“Trust Fund” shall mean the Trust Account established under that certainInvestment Management Trust Agreement, dated as of the date hereof, between theCompany and Continental Stock Transfer & Trust Company.

 

FSAC Partners, LLC acknowledges and understands thatthe Underwriter and the Company will rely upon the agreements, representationsand warranties set forth herein in proceeding with the IPO. The Company and FSACPartners, LLC acknowledge that the Underwriter is an intended third partybeneficiary of the provisions of this letter agreement. In that regard, theUnderwriter shall have the right in its sole discretion, but not theobligation, to enforce the provisions of this letter agreement. Nothingcontained herein shall be deemed to render the Underwriter a representative of,or a fiduciary with respect to, the Company, its stockholders, or any creditoror vendor of the Company with respect to the subject matter hereof.

 

Thisletter agreement shall be binding on FSAC Partners, LLC and such person’srespective successors, heirs, personal representatives and assigns. This letteragreement shall terminate on the earlier of (i) the Business Combination Dateand (ii) the Liquidation Date; provided that such termination shall not relieveFSAC Partners, LLC from liability for any breach of this agreement prior to itstermination.

 

This letter agreement shall be governed by andinterpreted and construed in accordance with the laws of the State of New Yorkapplicable to contracts formed and to be performed

 

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entirely within the Stateof New York, without regard to the conflicts of law provisions thereof to theextent such principles or rules would require or permit the application of thelaws of another jurisdiction.

 

No term or provision of this letter agreement may beamended, changed, waived, altered or modified except by written instrumentexecuted and delivered by the party against whom such amendment, change,waiver, alteration or modification is to be enforced.

 

 
|                                      | /s/ JOEL R. JACKS                |   |
|-------------------------------------------|----------------------------------|--------|
|                                      | Joel R. Jacks                    |
|                                      | On behalf of FSAC  Partners, LLC |
|                                      |                             |
|                                      |                             |
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|                                      | Signature                        |
|                                      |                             |
|                                      |                             |
| Accepted and agreed:                      |                             |
| Federal Services  Acquisition Corporation |                             |
|                                      |                             |
|                                      |                             |
| By:                                       | /s/ PETER M. SCHULTE             |   |   |
| Name: Peter M. Schulte                    |                             |
| Title: President and  Secretary           |                             |
|                                           |                                  |        |  |  |

 

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