**Exhibit 10.3**

 

October 19, 2005

 

Federal ServicesAcquisition Corporation

900 Third Avenue, 33rdFloor

New York, New York  10022

 

Re:          InitialPublic Offering

 

Gentlemen:

 

Thisletter is being delivered to you in accordance with the Underwriting Agreement(the “Underwriting Agreement”) entered into by and between Federal ServicesAcquisition Corporation, a Delaware corporation (the “Company”), and CRTCapital Group LLC (the “Underwriter”), relating to an underwritten initialpublic offering (the “IPO”) of the Company’s units (the “Units”), eachcomprised of one share of the Company’s common stock, par value $0.0001 pershare (the “Common Stock”), and two warrants, each of which are exercisable forone share of Common Stock (each, a “Warrant”). Certain capitalized terms usedherein are defined in paragraph 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 the undersigned as a stockholder of the Company, andfor other good and valuable consideration, the receipt and sufficiency of whichare hereby acknowledged, the undersigned hereby agrees with the Company asfollows:

 

1.             Ifthe Company solicits approval of its stockholders of a Business Combination,the undersigned will vote all Insider Shares and IPO Shares owned by him inaccordance with the majority of the votes cast by the holders of the PublicStockholders.

 

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 dates, the “TransactionFailure Date”), the undersigned will take all reasonable actions within hispower 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”). The undersigned 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 his Insider Shares (“Claim”) and herebywaives any Claim the undersigned 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. The undersignedhereby agrees that the Company shall be entitled to reimbursement from the

 

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undersigned for any distribution of the Trust Fundreceived by the undersigned in respect of such person’s Insider Shares.

 

3.             Theundersigned 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, the undersigned 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 director and stockholderof the Company, subject to any pre-existing fiduciary obligations theundersigned might have, including any portfolio company managed by CMEP.

 

5.             Neitherthe undersigned, any member of the family of the undersigned, nor any Affiliateof the undersigned will be entitled to receive and will not accept anycompensation for services rendered to the Company prior to or in connectionwith the consummation of the Business Combination, provided that commencing onthe effective date of the IPO, CM Equity Management, L.P. (“Related Party”)shall be allowed to charge the Company $7,500 per month to compensate it forthe Company’s use of Related Party’s offices, utilities and personnel. Theundersigned shall also be entitled to reimbursement from the Company for his out-of-pocketexpenses incurred in connection with seeking and consummating a BusinessCombination.

 

6.             Neitherthe undersigned, any member of the family of the undersigned, nor any Affiliateof the undersigned will be entitled to receive, or accept, a finder’s fee orany other compensation in the event the undersigned, any member of the familyof the undersigned or any Affiliate of the undersigned originates a BusinessCombination.

 

7.             Theundersigned will escrow his Insider Shares for the three year period commencingon the Effective Date subject to the terms of a Stock Escrow Agreement whichthe Company will enter into with an escrow agent acceptable to the Company.

 

8.             Theundersigned agrees to be Vice-Chairman of the Board of Directors of the Companyuntil the earlier of the consummation by the Company of a Business Combinationor the Liquidation Date. The undersigned’s biographical information furnishedto the Company and the Underwriter and attached hereto as Exhibit A is true andaccurate in all respects, does not omit any material information with respectto the undersigned’s background and contains all of the information required tobe disclosed pursuant to Section 401 of Regulation S-K, promulgated under theSecurities Act of 1933. The undersigned’s questionnaires furnished to theCompany and the Underwriter and attached hereto as Exhibit B are true andaccurate in all respects. The undersigned represents and warrants that:

 

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(a)           theundersigned is not subject to or a respondent in any legal action for, anyinjunction, cease-and-desist order or order or stipulation to desist or refrainfrom any act or practice relating to the offering of securities in anyjurisdiction;

 

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

 

(c)           theundersigned has never been suspended or expelled from membership in anysecurities or commodities exchange or association or had a securities orcommodities license or registrations denied, suspended or revoked.

 

9.             Theundersigned has full right and power, without violating any agreement by whichhe is bound (including, without limitation, any non-competition ornon-solicitation agreement with any employer or former employer), to enter intothis letter agreement and to serve as Vice-Chairman of the Company and a memberof the Board of Directors of the Company.

 

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.

 

The undersigned 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 theundersigned 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.

 

This letter agreement shall be binding on theundersigned and such person’s respective successors, heirs, personalrepresentatives and assigns. This letter agreement shall terminate on theearlier of (i) the Business Combination Date and (ii) the Liquidation Date;provided that such termination shall not relieve the undersigned from liabilityfor any breach of this agreement prior to its termination.

 

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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 entirely within the State ofNew 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 maybe amended, 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/ EDWARD H. BERSOFF   |   |
|----------------------------------------------|-------------------------|--------|
|                                         | Dr. Edward H. Bersoff   |
|                                         | Vice-Chairman           |
|                                         |                    |
|                                         |                    |
|                                         |                    |   |
|                                         | Signature               |
|                                         |                    |
|                                         |                    |
| Accepted and agreed:                         |                    |
| Federal Services  Acquisition Corporation    |                    |
|                                         |                    |
|                                         |                    |
| By:                                          |  /s/ JOEL R. JACKS |   |   |
| Name: Joel R. Jacks                          |                    |
| Title: Chairman and  Chief Executive Officer |                    |
|                                              |                         |        |  |  |

 

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