Exhibit 10.5


 


October 19, 2005


 


Federal Services
Acquisition Corporation


900 Third Avenue, 33rd
Floor


New York, New York  10022


 


Re:          Initial
Public Offering


 


Gentlemen:


 


This letter is being
delivered to you in accordance with the Underwriting Agreement (the “Underwriting
Agreement”) entered into by and between Federal Services Acquisition
Corporation, 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 the
Company’s common stock, par value $0.0001 per share (the “Common Stock”), and
two warrants, each of which are exercisable for one share of Common Stock
(each, a “Warrant”). Certain capitalized terms used herein are defined in
paragraph 10 hereof.


 


In
order to induce the Company and the Underwriter to enter into the Underwriting
Agreement and to proceed with the IPO, and in recognition of the benefit that
such IPO will confer upon FSAC Partners, LLC, a stockholder of the Company, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the undersigned in the name of and on behalf of FSAC
Partners, LLC hereby agrees with the Company as follows:


 


1.             If
the Company solicits approval of its stockholders of a Business Combination, FSAC
Partners, LLC will vote all Insider Shares and IPO Shares owned by it in
accordance with the majority of the votes cast by the Public Stockholders.


 


2.             In
the event that the Company fails to consummate a Business Combination within 18
months from the effective date (“Effective Date”) of the registration statement
relating to the IPO or 24 months under the circumstances described in the
prospectus relating to the IPO) (the first to occur of such date, the “Transaction
Failure Date”), FSAC Partners, LLC will take all reasonable actions within its
power to cause (i) the Trust Fund to be liquidated and distributed to the
holders 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 the
Company to dissolve and liquidate as soon as practicable (the earliest date on
which the conditions in clauses (i) and (ii) are both satisfied being the “Liquidation
Date”). FSAC Partners, LLC hereby waives any and all right, title, interest or
claim of any kind in or to any distributions of the Trust Fund as a result of
such distribution with respect to its Insider Shares (“Claim”) and hereby
waives any Claim FSAC Partners, LLC may have in the future as a result of, or
arising out of, any contracts or agreements with the Company and will not seek
recourse against the Trust Fund for any reason whatsoever. FSAC Partners, LLC
hereby agrees that the Company shall be entitled to


 

















 


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


 


3.             FSAC
Partners, LLC acknowledges and agrees that the Company will not consummate its
initial Business Combination with any company which is affiliated with one or
more of the Insiders. Without limiting the generality of the foregoing, in no
event will the Company seek to acquire as its initial Business Combination any
of the portfolio companies in which any private equity funds managed by Joel R.
Jacks or Peter M. Schulte have an investment.


 


4.             In
order to minimize potential conflicts of interest which may arise from multiple
affiliations, FSAC Partners, LLC will present to the Company for its
consideration, prior to presentation to any other person or company, any
suitable opportunity to acquire a Target Business, until the earlier of the
consummation by the Company of a Business Combination, the distribution of the
Trust Fund or until such time as the undersigned ceases to be a stockholder of
the Company, subject to any pre-existing fiduciary obligations FSAC Partners,
LLC might have.


 


5.             Neither
FSAC Partners, LLC nor any of its Affiliates will be entitled to receive and
will not accept any compensation for services rendered to the Company prior to or
in connection with the consummation of the Business Combination, provided
that commencing on the effective date of the IPO, CM Equity Management, L.P. (“Related
Party”) shall be allowed to charge the Company an allocable share of Related
Party’s overhead, up to $7,500 per month to compensate it for the Company’s use
of Related Party’s offices, utilities and personnel. FSAC Partners, LLC or any of
its Affiliates shall also be entitled to reimbursement from the Company for its
or their out-of-pocket expenses incurred in connection with seeking and
consummating a Business Combination.


 


6.             Neither
FSAC Partners, LLC nor any of its Affiliates will be entitled to receive, or
accept, a finder’s fee or any other compensation in the event FSAC Partners,
LLC or any of its Affiliates originates a Business Combination.


 


7.             FSAC
Partners, LLC will escrow its Insider Shares for the three year period
commencing on the Effective Date subject to the terms of a Stock Escrow
Agreement which the Company will enter into with an escrow agent acceptable to
the Company.


 


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


 


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


 


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


 


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


 


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


 


9.             FSAC
Partners, LLC has full right and power, without violating any agreement by
which its is bound (including, without limitation, any non-competition or
non-solicitation agreement with any employer or former employer), to enter into
this letter agreement .


 


10.           As
used herein, (i) a “Business Combination” shall mean an acquisition by merger,
capital stock exchange, asset acquisition, stock purchase, reorganization or
otherwise, of an operating business in the federal services or defense industry
selected by the Company; (ii) ”Insiders” shall mean all officers,
directors and stockholders of the Company immediately prior to the IPO; (iii) “Insider
Shares” shall mean all of the shares of Common Stock of the Company owned by an
Insider prior to the IPO; (iv) “IPO Shares” shall mean the shares of Common
Stock issued in the Company’s IPO; (v) “Public Stockholders” shall mean those
persons other than the Insiders that are holders of IPO Shares; (vi) “Target
Business” shall mean any operating business in the federal services and defense
industries which the Company seeks to acquire in a Business Combination; and (vii)
“Trust Fund” shall mean the Trust Account established under that certain
Investment Management Trust Agreement, dated as of the date hereof, between the
Company and Continental Stock Transfer & Trust Company.


 


FSAC Partners, LLC acknowledges and understands that
the Underwriter and the Company will rely upon the agreements, representations
and warranties set forth herein in proceeding with the IPO. The Company and FSAC
Partners, LLC acknowledge that the Underwriter is an intended third party
beneficiary of the provisions of this letter agreement. In that regard, the
Underwriter shall have the right in its sole discretion, but not the
obligation, to enforce the provisions of this letter agreement. Nothing
contained herein shall be deemed to render the Underwriter a representative of,
or a fiduciary with respect to, the Company, its stockholders, or any creditor
or vendor of the Company with respect to the subject matter hereof.


 


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


 


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


 


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


 


No term or provision of this letter agreement may be
amended, changed, waived, altered or modified except by written instrument
executed 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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  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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