INVESTMENT MANAGEMENT TRUST AGREEMENT
This
Agreement is made as of ___________, 2006 by and between Crossfire Capital
Corporation (the "Company") and American Stock Transfer & Trust Company (the
"Trustee").
WHEREAS,
the
Company's Registration Statement on Form S-1, No. 333-______ (the "Registration
Statement"), for its initial public offering of securities (the "IPO") has
been
declared effective as of the date hereof by the Securities and Exchange
Commission (the "Effective Date");
WHEREAS,
Xxxxxx,
Xxxxx Xxxxx, Incorporated (“FBW”) is acting as the representative of the
underwriters in the IPO;
WHEREAS,
as
described in the Company's Registration Statement, $57,750,000 of the gross
proceeds of the IPO as herein provided ($66,300,000) if the underwriter's
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,
FBW 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, FBW 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;
WHEREAS,
a
portion of the Property consists of $1,350,000 (or $1,350,000 if the
underwriter's over-allotment option is exercised in full) attributable to
the
underwriter's discount and non-accountable expenses allowance which FBW 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.
NOW,
THEREFORE,
in
consideration of the mutual covenants hereinafter set forth, the parties
agree
as follows:
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 (the "Trust Account") established
by the
Trustee at a branch of Xxxxxx Brothers Inc. 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 FBW 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 written instructions
of the Company to do so;
(h) render
to
the Company and to FBW, 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;
(i) as
of the
date of the consummation of a business combination (the “Business Combination”),
commence liquidation of the Trust Account upon receipt of the Officers’
Certificate signed by the Chief Executive Officer and Chief Financial Officer
and in accordance with the terms of a letter (the "Termination Letter"),
in a
form substantially similar to that attached hereto as Exhibit
A,
signed
on behalf of the Company by its President, Chief Financial Officer or Chairman
of the Board and Secretary or Assistant Secretary. The Trustee shall complete
the liquidation of the Trust Account and distribute the Property in the Trust
Account to the Beneficiaries 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 FBW 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 (the “Second Termination Date”)), commence
liquidation of the Trust Account. The Trustee, upon consultation with the
Company and FBW, 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 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.
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2. AGREEMENTS
AND COVENANTS OF THE COMPANY.
(a) The
Company hereby agrees and covenants to provide all instructions to the Trustee
hereunder in writing, signed by the Company's President or Chairman of the
Board
and Chief Financial Officer. In addition, except with respect to its duties
under Sections 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 given by any one of the persons authorized
above to give written instructions, provided that the Company and/or FBW,
whichever has the authority to issue the instructions, shall promptly confirm
such instructions in writing;
(b) The
Company hereby 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;
(c) Pay
the
Trustee an initial acceptance fee of [$_______]
and an
annual fee of [$______]
(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);
(d) In
the
event that the Company consummates the Business Combination and the Trust
Account is liquidated in accordance with Section 1(i) hereof, the Trustee
or
another independent party designated by FBW shall act as the inspector of
election to certify the results of the shareholder vote; and
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(e) The
Officers’ Certificate referenced in Section 1(i) and (j) hereof shall require
the Chief Executive Officer and Chief Financial Officer of the Company to
each
certify the following (where 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;
(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;
(c) change
the investment of any Property, other than in compliance with Section 1(c)
hereof;
(d) refund
any depreciation in principal of any Property;
(e) assume
that the authority of any person designated by the Company and FBW to
give
written
instructions hereunder shall not be continuing unless provided otherwise
in such
designation, or unless the Company and FBW shall have delivered a written
revocation of such authority to the Trustee;
(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 need not investigate any fact or matter stated in the document. 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;
4
(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;
and
(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.
(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;
5
(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 ____________, 2008 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 Sections 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, 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 FBW. 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:
6
if
to the Trustee, to:
American
Stock Transfer&
Trust Company
00
Xxxxxx
Xxxx, Xxxxx Xxxxx
Xxx
Xxxx,
XX 00000
Attn:
[___________]
Fax
No:
[________]
if
to the Company, to:
Crossfire
Capital Corporation
000
Xxxxx
Xxxxxx, Xxxxx 0000
Xxx
Xxxx,
XX 00000
Attn:
Xxxxxx Xxxxxx
Fax
No.:
[__________]
in
either
case with a copy to:
Xxxxxx,
Xxxxx Xxxxx, Incorporated
0000
Xxxxxxxxxxx Xxxx, Xxxxx 000
XxXxxx,
XX 00000
Attn:
Xxxxx XxXxxxx
Fax
No.:
(000) 000-0000
(f) This
Agreement may not be assigned by the Trustee without the prior 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.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
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:
|
||
| CROSSFIRE CAPITAL CORPORATION | ||
| |
|
|
| By: | ||
|
Name:
Xxxxxx
Xxxxxx
Title:
President
|
||
8
EXHIBIT
A
[LETTERHEAD
OF COMPANY]
[INSERT
DATE]
American
Stock Transfer
&
Trust Company
00
Xxxxxx
Xxxx, Xxxxx Xxxxx
Xxx
Xxxx,
XX 00000
Attn:
RE:
TRUST ACCOUNT NO. _____________ TERMINATION LETTER
Gentlemen:
Pursuant
to Section 1(i) of the Investment Management Trust Agreement between Crossfire
Capital Corporation (the "Company") and American Stock Transfer & Trust
Company (the "Trustee"), dated as of ___________, 2006 (the "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 (the "Business Combination") on or about
________ __, 200_. The Company shall notify you at least 48 hours in advance
of
the actual date of the consummation of the Business Combination (the
"Consummation Date") and shall provide you with an Officers’ Certificate in
accordance with Sections 1(i) and 2(e) of 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 FBW
shall
in writing 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 the oath and report
of
inspector of election certified by an independent inspector which may be
the
Trustee or as otherwise appointed by FBW (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") along
with satisfactory evidence of delivery of the stock certificates from Public
Stockholders who elect to exercise their conversion rights through the
Depository Trust Company, its Deposit Withdraw Agent Commission (DWAC) system
or
as otherwise presented to you (the “Stock Certificates”). 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
(as defined in the Trust Agreement) in the Trust Account shall be distributed
as
follows: (1) first, to FBW by wire transfer (or as otherwise directed by
FBW) in
immediately available funds, the aggregate amount of [$_______]
(or
$______ as applicable) plus any interest accrued thereon; and (2) thereafter,
to
any other Beneficiary (as defined in the Trust Agreement) 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 FBW of the same and the Company and, if the
amount set forth in clause (1) shall not have been paid in full, FBW 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 FBW. 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, | ||
| CROSSFIRE CAPITAL CORPORATION | ||
| |
|
|
| By: | ||
|
Name:
Xxxxxx Xxxxxx
Title:
President
|
||
EXHIBIT
B
|
AUTHORIZED
INDIVIDUAL(S)
FOR
TELEPHONE CALL BACK
COMPANY:
Crossfire
Capital Corporation
000
Xxxxx Xxxxxx, Xxxxx 0000
Xxx
Xxxx, XX 00000
Attn:
Xxxxxx Xxxxxx
FBW:
Xxxxxx
Xxxxx Xxxxx, Incorporated
000
Xxxxx Xxxxxx
Xxxxxxxxx,
Xxxxxxxx
Attn.:
Xxxxx XxXxxxx
TRUSTEE:
American
Stock Transfer
&
Trust Company:
00
Xxxxxx Xxxx, Xxxxx Xxxxx
Xxx
Xxxx, XX 00000
Attn:
[_________________]
|
AUTHORIZED
TELEPHONE
NUMBER(S)
(000)
000-0000
(000)
000-0000
[_________________]
|
