INVESTMENT MANAGEMENT TRUST AGREEMENT
EXHIBIT
10.3
This
Agreement is made as of _________, 2005 by and between Phoenix India Acquisition
Corp. (the “Company”) and American Stock Transfer & Trust Company
(“Trustee”).
WHEREAS,
the Company’s Registration Statement on Form S-1, No. 333- ________
(“Registration Statement”), for its initial public offering of securities
(“IPO”) has been declared effective as of the date hereof by the Securities and
Exchange Commission (“Effective Date”); and
WHEREAS,
Xxxxxx & Xxxxxxx, LLC (“Xxxxxx”) is acting as the representative of the
underwriters in the IPO; and
WHEREAS,
as described in the Company’s Registration Statement, $92,800,000 of the gross
proceeds of the IPO ($104,750,000 if the underwriters’ over-allotment option is
exercised in full) will be delivered to the Trustee to be deposited and held
in
a trust account for the benefit of the Company, Xxxxxx and the holders of the
Company’s common stock, par value $.0001 per share, issued in the IPO (the
amount to be delivered to the Trustee will be referred to herein as the
“Property,” the stockholders for whose benefit the Trustee shall hold the
Property will be referred to as the “Public Stockholders,” and the Public
Stockholders Xxxxxx and the Company will be referred to together as the
“Beneficiaries”); and in the event the securities offered in the IPO are
registered in Colorado, pursuant to Section 11-51-302(6) of the Colorado Revised
Statutes (the “CRS”). A copy of Section 11-51-302(6) of the CRS is attached
hereto and made a part hereof; and
WHEREAS,
a portion of the Property consists of $2,000,000 (or $2,300,000 if the
underwriters’ over-allotment option is exercised in full) attributable to the
underwriters’ discount which Xxxxxx, on behalf of the underwriters, has agreed
to deposit in the Trust Account (defined below); and
WHEREAS,
the Company and the Trustee desire to enter into this Agreement to set forth
the
terms and conditions pursuant to which the Trustee shall hold the Property;
and
NOW,
THEREFORE, IT IS AGREED:
1. Agreements
and Covenants of Trustee.
The
Trustee hereby agrees and covenants to:
(a) Hold
the
Property in trust for the Beneficiaries in accordance with the terms of this
Agreement, including without limitation, the terms of Section 11-51-302(6)
of
the CRS, in a segregated trust account (“Trust Account”) established by the
Trustee at a branch of XX Xxxxxx Chase NY Bank selected by the Trustee;
(b) Manage,
supervise and administer the Trust Account subject to the terms and conditions
set forth herein;
(c) In
a
timely manner, upon the instruction of the Company, to invest and reinvest
the
Property in any “Government Security.” As used herein, Government Security means
any Treasury Xxxx issued by the United States, having a maturity of one hundred
and eighty days or less;
(d) Collect
and receive, when due, all principal and income arising from the Property,
which
shall become part of the “Property,” as such term is used herein;
(e) Notify
the Company and Xxxxxx of all communications received by it with respect to
any
Property requiring action by the Company;
(f) Supply
any necessary information or documents as may be requested by the Company in
connection with the Company’s preparation of the tax returns for the Trust
Account;
(g) Participate
in any plan or proceeding for protecting or enforcing any right or interest
arising from the Property if, as and when instructed by the Company and/or
Xxxxxx to do so;
(h) Render
to
the Company and to Xxxxxx, and to such other person as the Company may instruct,
monthly written statements of the activities of and amounts in the Trust Account
reflecting all receipts and disbursements of the Trust Account; and
(i) As
of the
date of the consummation of a business combination (“Business Combination”),
commence liquidation of the Trust Account upon receipt of the Officers’
Certificate signed by the Chief Executive Officer or President and the Chief
Financial Officer in accordance with the terms of a letter (“Termination
Letter”), in a form substantially similar to that attached hereto as
Exhibit
A,
signed
on behalf of the Company by its Chief Executive Officer or President and
complete the liquidation of the Trust Account and distribute the Property in
the
Trust Account only as directed in the Termination Letter and the other documents
referred to therein. The Trustee understands and agrees that disbursements
from
the Trust Account shall be made only pursuant to a duly executed Termination
Letter, together with the other documents referenced herein, including, without
limitation, an independently certified oath and report of inspector of election
in respect of the shareholder vote in favor of the Business Combination. In
all
cases, the Trustee shall provide Xxxxxx with a copy of any Termination Letters,
Officers’ Certificates and/or any other correspondence that it receives with
respect to any proposed withdrawal from the Trust Account promptly after it
receives same; and
(j) As
of the
date 18 months from the date of this Agreement (the “LOI Termination Date”) (or
24 months from the date hereof in the event the Company has executed the Letter
of Intent (defined below) prior to the LOI Termination Date but failed to
consummate a Business Combination (“Second Termination Date”), commence
liquidation of the Trust Account. The Trustee, upon consultation with the
Company and Xxxxxx, shall deliver a notice to Public Stockholders of record
as
of the LOI Termination Date or Second Termination Date, whichever the case
may
be, by U.S. mail or via the Depository Trust Company (“DTC”), within five days
of the LOI Termination Date or Second Termination Date, to notify the Public
Stockholders of such event and take such other actions as it may deem necessary
to inform the Beneficiaries. The Trustee shall deliver to each Public
Stockholder its ratable share of the Property against satisfactory evidence
of
delivery of the stock certificates by the Public Stockholders to the Company
through DTC, its Deposit Withdraw Agent Commission (DWAC) system or as otherwise
presented to the Trustee. Notwithstanding the foregoing, if the Trustee receives
a bona fide, executed letter of intent or engagement letter (the “Letter of
Intent”) for a Business Combination prior to the LOI Termination Date
accompanied by an Officers’ Certificate as described in Section 2(e) hereof,
then the Trustee shall forego or suspend any liquidation of the Trust Account
until the earlier of a Business Combination or the Second Termination
Date.
2. Agreements
and Covenants of the Company.
The
Company hereby agrees and covenants to:
(a) Provide
all instructions to the Trustee hereunder in writing, signed by the Company’s
Chief Executive Officer, President or Chief Financial Officer. In addition,
except with respect to its duties under paragraph 1(i) and (j) above, the
Trustee shall be entitled to rely on, and shall be protected in relying on,
any
verbal or telephonic advice or instruction which it in good faith believes
to be
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given
by
any one of the persons authorized above to give written instructions, provided
that the Company and/or Xxxxxx shall promptly confirm such instructions in
writing; and
(b) The
Company agrees and covenants to hold the Trustee harmless and indemnify the
Trustee from and against any and all expenses, including reasonable counsel
fees
and disbursements, or loss suffered by the Trustee in connection with any
action, suit or other proceeding brought against the Trustee involving any
claim, or in connection with any claim or demand which in any way arises out
of
or relates to this Agreement, the services of the Trustee hereunder, or the
Property or any income earned from investment of the Property, except for
expenses and losses resulting from the Trustee’s gross negligence or willful
misconduct. Promptly after the receipt by the Trustee of notice of demand or
claim or the commencement of any action, suit or proceeding, pursuant to which
the Trustee intends to seek indemnification under this paragraph, it shall
notify the Company in writing of such claim (hereinafter referred to as the
“Indemnified Claim”). The Trustee shall have the right to conduct and manage the
defense against such Indemnified Claim, provided, that the Trustee shall obtain
the consent of the Company with respect to the selection of counsel, which
consent shall not be unreasonably withheld. The Company may participate in
such
action with its own counsel; and
(c) Pay
the
Trustee an initial acceptance fee of $1,000 and an annual fee of $3,000 (it
being expressly understood that the Property shall not be used to pay such
fee).
The Company shall pay the Trustee the initial acceptance fee and first year’s
fee at the consummation of the IPO and thereafter on the anniversary of the
Effective Date. The Trustee shall refund to the Company the fee (on a pro rata
basis) with respect to any period after the liquidation of the Trust Fund.
The
Company shall not be responsible for any other fees or charges of the Trustee
except as may be provided in Section 2(b) hereof (it being expressly understood
that the Property shall not be used to make any payments to the Trustee under
such section); and
(d) In
the
event that the Company consummates a Business Combination and the Trust Account
is liquidated in accordance with Section 1(i) hereof, the Trustee or another
independent party designated by Xxxxxx shall act as the inspector of election
to
certify the results of the shareholder vote; and
(e) The
Officers’ Certificate referenced in Sections 1(i) and (j) hereof shall require
the Chief Executive Officer and Chief Financial Officer of the Company to each
certify the following (wherever applicable): (1) prior to the LOI Termination
Date, the Company has entered into a bona fide Letter of Intent with a target
business; and/or (2) prior to the LOI Termination Date, the Company has entered
into a Business Combination with a target business, the terms of which are
consistent with the requirements set forth in the Registration Statement; and/or
(3) prior to the Second Termination Date, the Company has entered into a
Business Combination with a target business, the terms of which are consistent
with the requirements set forth in the Registration Statement; and (4) the
Board
of Directors (the “Board”) pursuant to the unanimous written consent of the
Board has approved (where applicable): (i) the Business Combination; and/or
(ii)
Letter of Intent. A copy of such consent shall be attached as an exhibit to
the
Officers’ Certificate.
3. Limitations
of Liability.
The
Trustee shall have no responsibility or liability to:
(a) Take
any
action with respect to the Property, other than as directed in Section 1 hereof
and the Trustee shall have no liability to any party except for liability
arising out of its own gross negligence or willful misconduct; or
3
(b) Institute
any proceeding for the collection of any principal and income arising from,
or
institute, appear in or defend any proceeding of any kind with respect to,
any
of the Property unless and until it shall have received written instructions
from the Company given as provided herein to do so and the Company shall have
advanced or guaranteed to it funds sufficient to pay any expenses incident
thereto; or
(c) Change
the investment of any Property, other than in compliance with Section 1(c);
or
(d) Refund
any depreciation in principal of any Property; or
(e) Assume
that the authority of any person designated by the Company and Xxxxxx to give
written instructions hereunder shall not be continuing unless provided otherwise
in such designation, or unless the Company and Xxxxxx shall have delivered
a
written revocation of such authority to the Trustee; or
(f) The
other
parties hereto or to anyone else for any action taken or omitted by it, or
any
action suffered by it to be taken or omitted, in good faith and in the exercise
of its own best judgment, except for its gross negligence or willful misconduct.
The Trustee may rely conclusively and shall be protected in acting upon any
order, notice, demand, certificate, opinion or advice of counsel (including
counsel chosen by the Trustee), statement, instrument, report or other paper
or
document (not only as to its due execution and the validity and effectiveness
of
its provisions, but also as to the truth and acceptability of any information
therein contained) which is believed by the Trustee, in good faith, to be
genuine and to be signed or presented by the proper person or persons. The
Trustee shall not be bound by any notice or demand, or any waiver, modification,
termination or rescission of this agreement or any of the terms hereof, unless
evidenced by a written instrument delivered to the Trustee signed by the proper
party or parties and, if the duties or rights of the Trustee are affected,
unless it shall give its prior written consent thereto; or
(g) Verify
the correctness of the information set forth in the Registration Statement
or to
confirm or assure that any acquisition made by the Company or any other action
taken by it is as contemplated by the Registration Statement, unless an officer
of the Trustee has actual knowledge thereof, written notice of such event is
sent to the Trustee or as otherwise required under Section 1(i) hereof;
or
(h) Pay
any
taxes on behalf of the Trust Account (it being expressly understood that the
Property shall not be used to pay any such taxes and that such taxes, if any,
shall be paid by the Company from funds not held in the Trust
Account).
4. Certain
Rights Of Trustee.
(a) Before
the Trustee acts or refrains from acting, it may require an Officers’
Certificate or opinion of counsel or both. The Trustee shall not be liable
for
any action it takes or omits to take in good faith in reliance on such Officers’
Certificate or opinion of counsel. The Trustee may consult with counsel and
the
advice of such counsel or any opinion of counsel shall be full and complete
authorization and protection from liability in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon.
4
(b) The
Trustee may act through its attorneys and agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(c) The
Trustee shall not be liable for any action it takes or omits to take in good
faith that it believes to be authorized or within the rights or powers conferred
upon it by this Agreement.
(d) The
Trustee shall not be responsible for and makes no representation as to the
validity or adequacy of this Agreement; it shall not be accountable for the
Company’s use of the proceeds from the Trust Account. Notwithstanding the
effective date of this Agreement or anything to the contrary contained in this
Agreement, the Trustee shall have no liability or responsibility for any act
or
event relating to this Agreement or the transactions related thereto which
occurs prior to the date of this Agreement, and shall have no contractual
obligations to the Beneficiaries until the date of this Agreement.
5. Termination.
This
Agreement shall terminate as follows:
(a) If
the
Trustee gives written notice to the Company that it desires to resign under
this
Agreement, the Company shall use its reasonable efforts to locate a successor
trustee. At such time that the Company notifies the Trustee that a successor
trustee has been appointed by the Company and has agreed to become subject
to
the terms of this Agreement, the Trustee shall transfer the management of the
Trust Account to the successor trustee, including but not limited to the
transfer of copies of the reports and statements relating to the Trust Account,
whereupon this Agreement shall terminate; provided, however, that, in the event
that the Company does not locate a successor trustee within ninety days of
receipt of the resignation notice from the Trustee, the Trustee may submit
an
application to have the Property deposited with the United States District
Court
for the Southern District of New York and upon such deposit, the Trustee shall
be immune from any liability whatsoever that arises due to any actions or
omissions to act by any party after such deposit;
(b) At
such
time that the Trustee has completed the liquidation of the Trust Account in
accordance with the provisions of Section 1(i) hereof, and distributed the
Property in accordance with the provisions of the Termination Letter, this
Agreement shall terminate except with respect to Section 2(b) hereof;
or
(c) On
such
date after ________ __, 2007 when the Trustee deposits the Property with the
United States District Court for the Southern District of New York in the event
that, prior to such date, the Trustee has not received a Termination Letter
from
the Company pursuant to Section 1(i) or (j) hereof.
6. Miscellaneous.
(a) The
Company and the Trustee each acknowledge that the Trustee will follow the
security procedures set forth below with respect to funds transferred from
the
Trust Account. Upon receipt of written instructions, the Trustee will confirm
such instructions with an Authorized Individual at an Authorized Telephone
Number listed on the attached Exhibit B. The Company and the Trustee will
each restrict access to confidential information relating to such security
procedures to authorized persons. Each party must notify the other party
immediately if it has reason to believe unauthorized persons may have obtained
access to such information, or of any change in its authorized personnel. In
executing funds transfers, the Trustee will rely upon account numbers or other
identifying numbers of a beneficiary, beneficiary’s bank or intermediary bank,
rather than names. The Trustee shall not be liable for any loss,
5
liability
or expense resulting from any error in an account number or other identifying
number, provided it has accurately transmitted the numbers
provided.
(b) This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of the State of New York, without giving effect to conflict of laws. It
may
be executed in several counterparts, each one of which shall constitute an
original, and together shall constitute but one instrument.
(c) This
Agreement contains the entire agreement and understanding of the parties hereto
with respect to the subject matter hereof. This Agreement or any provision
hereof may only be changed, amended or modified by a writing signed by each
of
the parties hereto; provided, however, that no such change, amendment or
modification may be made without the prior written consent of Xxxxxx. As to
any
claim, cross-claim or counterclaim in any way relating to this Agreement, each
party waives the right to trial by jury.
(d) The
parties hereto consent to the jurisdiction and venue of any state or federal
court located in the State of New York for purposes of resolving any disputes
hereunder.
(e) Any
notice, consent or request to be given in connection with any of the terms
or
provisions of this Agreement shall be in writing and shall be sent by express
mail or similar private courier service, by certified mail (return receipt
requested), by hand delivery or by facsimile transmission:
if
to the
Trustee, to:
American
Stock Transfer & Trust Company
00
Xxxxxx
Xxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn: Compliance
Department
Fax
No.:
(212) ___________
if
to the
Company, to:
000
Xxxxx
Xxxxxx
Xxxxx
000
Xxx
Xxxx,
XX 00000
Attn: Xxxxxx
Xxxxxx, President and Chief Strategy Officer
Fax
No.:
(212) __________
in
either
case with a copy to:
Xxxxxx
& Xxxxxxx, LLC
1270
Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxx
Xxxxx, CFO
Fax
No.:
(212) ___________
and
6
Xxxxxxx
Xxxxxx LLP
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxx
X. Xxxxxx, Esq.
Fax
No.:
(000) 000-0000
and
Loeb
& Loeb LLP
000
Xxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn: Xxxxxxxx
X. Xxxxxxxx, Esq.
Fax
No.:
(000) 000-0000
(f) This
Agreement may not be assigned by the Trustee without the prior written consent
of the Company.
(g) Each
of
the Trustee and the Company hereby represents that it has the full right and
power and has been duly authorized to enter into this Agreement and to perform
its respective obligations as contemplated hereunder. The Trustee acknowledges
and agrees that it shall not make any claims or proceed against the Trust
Account, including by way of set-off, and shall not be entitled to any funds
in
the Trust Account under any circumstance.
– Signature
page immediately follows –
7
IN
WITNESS WHEREOF, the parties have duly executed this Investment Management
Trust
Agreement as of the date first written above.
|
AMERICAN
STOCK TRANSFER & TRUST
COMPANY,
as Trustee
|
||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
8
EXHIBIT
A
[Letterhead
of Company]
[Insert
date]
American
Stock Transfer
&
Trust Company
00
Xxxxxx
Xxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Re: Trust
Account No. [ ] Termination Letter
Gentlemen:
Pursuant
to Section 1(i) of the Investment Management Trust Agreement between Phoenix
India Acquisition Corp. (“Company”) and American Stock Transfer & Trust
Company (“Trustee”), dated as of __________, 2005 (“Trust Agreement”), this is
to advise you that the Company has entered into an agreement (“Business
Agreement”) with __________________ (“Target Business”) to consummate a business
combination with Target Business (“Business Combination”) on or about [insert
date]. The Company shall notify you at least 48 hours in advance of the actual
date of the consummation of the Business Combination (“Consummation Date”) and
shall provide you with an Officers’ Certificate in accordance with Sections 1(i)
and 2(e) of the Trust Agreement. Capitalized terms used herein and not otherwise
define shall have the meaning ascribed to them in the Trust
Agreement.
In
accordance with the terms of the Trust Agreement, we hereby authorize you to
commence liquidation of the Trust Account to the effect that, on the
Consummation Date, all of funds held in the Trust Account will be immediately
available for transfer to the account or accounts that the Company and Xxxxxx
shall direct on the Consummation Date.
On
the
Consummation Date (i) counsel for the Company shall deliver to you written
notification that (a) the Business Combination has been consummated, and (b)
the
provisions of Section 11-51-302(6) and Rule 51-3.4 of the CRS have been met,
to
the extent applicable; (ii) the Company shall deliver along with the oath and
report of inspector of election certified by an independent inspector which
may
be the Trustee or as otherwise appointed by Xxxxxx (collectively, the “Report”);
and (iii) the Company shall deliver to you written instructions with respect
to
the transfer of the funds held in the Trust Account (“Instruction Letter”). You
are hereby directed and authorized to transfer the funds held in the Trust
Account immediately upon your receipt of the counsel’s letter, the Report,
evidence of delivery of the Stock Certificates, the Officers’ Certificate and
the Instruction Letter, (the “Deliverables”) in accordance with the terms of the
Instruction Letter. Notwithstanding the foregoing, upon verification of receipt
by you of the Deliverables, we hereby agree and acknowledge that the Property
in
the Trust Account shall be distributed as follows: (1) first, to Xxxxxx by
wire
transfer (or as otherwise directed by Xxxxxx) in immediately available funds,
the aggregate amount of $2,000,000 (or $2,300,000 as applicable) plus any
interest accrued thereon; and (2) thereafter, to any other Beneficiary in
accordance with the terms of the Instruction Letter. In the event that certain
deposits held in the Trust Account may not be liquidated by the Consummation
Date without penalty, you will notify the Company and Xxxxxx of the same and
the
Company and, if the amount set forth in clause (1) shall not have been paid
in
full, Xxxxxx, shall issue joint written instructions directing you as to whether
such funds should remain in the Trust Account and distributed after the
Consummation Date to the Company and/or Xxxxxx. Upon the distribution of all
the
funds in the Trust Account pursuant to the terms hereof, the Trust Agreement
shall be terminated.
In
the
event that the Business Combination is not consummated on the Consummation
Date
described in the notice thereof and we have not notified you on or before the
original Consummation Date of a new Consummation Date, then the funds held
in
the Trust Account shall be reinvested as provided in the Trust Agreement on
the
business day immediately following the Consummation Date as set forth in the
notice.
| Very truly yours, | ||
| PHOENIX INDIA ACQUISITION CORP. | ||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
EXHIBIT
B
|
AUTHORIZED
INDIVIDUAL(S)
FOR
TELEPHONE CALL BACK
|
AUTHORIZED
TELEPHONE
NUMBER(S)
|
|
Company:
|
|
|
000
Xxxxx Xxxxxx, Xxxxx 000
Xxx
Xxxx, XX 00000
Attn:
Xxxxxx Xxxxxx, President and Chief Strategy Officer
|
(000)
000-0000
|
| Xxxxxx: | |
|
Xxxxxx
& Xxxxxxx, LLC
0000
Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx
Xxxx, XX 00000
Attn:
Xxxxxx Xxxxx, CFO
|
(212) ___-____ |
|
Trustee:
|
|
|
American
Stock Transfer
&
Trust Company
00
Xxxxxx Xxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attn:
|
(212)
____- ____
|
