INVESTMENT MANAGEMENT TRUST AGREEMENT
EXHIBIT
10.3
This
Agreement is made as of _________, 2005 by and between Everest Acquisition
Corporation (the “Company”) and North Fork Bank (the “Trustee” or also the
“Bank”).
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,
Jesup & Xxxxxx Securities Corporation (“Jesup & Xxxxxx”) is acting as
the representative of the underwriters in the IPO; and
WHEREAS,
as described in the Company’s Registration Statement, and in accordance with the
Company’s Certificate of Incorporation, $85,600,000 of the net proceeds of the
IPO ($98,848,000 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 and the holders of the Company’s Common
Stock issued in the IPO and in the event the Units are registered in Colorado,
pursuant to Section 11-51-302(6) of the Colorado Revised Statutes, a copy of
which statute is attached hereto and made a part hereof. 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 and the
Company will be referred to together as the “Beneficiaries”); 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;
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 the terms of Section 11-51-302(6) of the Colorado Statute,
in a segregated trust account (“Trust Account”) established by the Trustee at a
branch of the 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 Jesup & 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
Jesup
& Xxxxxx to do so;
(h) Render
to
the Company and to Jesup & 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) Commence
liquidation of the Trust Account only after receipt of and only in accordance
with the terms of a letter (“Termination Letter”), in a form substantially
similar to that attached hereto as either Exhibit A or Exhibit B, signed on
behalf of the Company by its Chief Executive Officer or Chairman of the Board
and Secretary, 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.
2. Agreements
and Covenants of the Company.
The
Company hereby agrees and covenants to:
(a) Give
all
instructions to the Trustee hereunder in writing, signed by the Company’s Chief
Executive Officer or Chairman of the Board. In addition, except with respect
to
its duties under paragraph 1(i) 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
shall promptly confirm such instructions in writing;
(b) 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
-2-
(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 paragraph 2(b) hereof (it being expressly
understood that the Property shall not be used to make any payments to the
Trustee under such paragraph).
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 paragraph 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 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 paragraph
1(c);
(d) Refund
any depreciation in principal of any Property;
(e) Assume
that the authority of any person designated by the Company to give instructions
hereunder shall not be continuing unless provided otherwise in such designation,
or unless the Company 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 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;
-3-
(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; 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. 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 paragraph 1(i) hereof, and distributed the
Property in accordance with the provisions of the Termination Letter, this
Agreement shall terminate except with respect to Paragraph 2(b); 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 paragraph 1(i).
5. 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 C. 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.
-4-
(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 Jesup &
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 City 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:
North
Fork Bank
[___]
[___]
Attn: [___],
Chairman
Fax
No.:
(212) [___]
if
to the
Company, to:
Everest
Acquisition Corporation
15/F,
The
Hong Kong Club Xxxxxxxx
0X
Xxxxxx
Xxxx Xxxxxxx
Xxxx
Xxxx
Attn: Xxxxx
X.
Xxxxxxx, Chief Executive Officer
Fax
No.:
[___]
in
either
case with a copy to:
Jesup
& Xxxxxx Securities Corporation
000
Xxxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxx Xxxxxxx
Fax
No.:
(000) 000-0000
and
Xxxxxxxxx
Xxxxxxx, LLP
MetLife
Building
000
Xxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxx X. Annex, Esq.
Fax
No.:
(000) 000-0000
-5-
(f) This
Agreement may not be assigned by the Trustee without the prior written consent
of the Company and Jesup & Xxxxxx.
(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.
IN
WITNESS WHEREOF, the parties have duly executed this Investment Management
Trust
Agreement as of the date first written above.
NORTH
FORK BANK,
as
Trustee
By:
____________________________
Name:
Title:
EVEREST
ACQUISITION CORPORATION
By:
____________________________
Name: Xxxxx
X.
Xxxxxxx
Title: Chief
Executive Officer
-6-
EXHIBIT
A
[Letterhead
of Company]
[Insert
date]
North
Fork Bank
[_______________]
[______________________]
Attn:
[______________]
| Re: |
Trust
Account No.
[
] Termination Letter
|
Gentlemen:
Pursuant
to paragraph 1(i) of the Investment Management Trust Agreement between Everest
Acquisition Corporation (“Company”) and North Fork Bank (“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 [_________]. The Company shall notify you
at least 48 hours in advance of the actual date of the consummation of the
Business Combination (“Consummation Date”).
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 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 Colorado Statute
have
been met, and (ii) 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 and
the
Instruction Letter, 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 of the
same and the Company shall direct you as to whether such funds should remain
in
the Trust Account and distributed after the Consummation Date to the Company.
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.
-7-
Very
truly yours,
EVEREST
ACQUISITION CORPORATION
By:___________________________________
Xxxxx
X.
Xxxxxxx, Chief Executive Officer
By:___________________________________
Xxxx
Xxxxxxx, Secretary
-8-
EXHIBIT
B
[Letterhead
of Company]
[Insert
date]
North
Fork Bank
[___]
Attn:
[___]
| Re: |
Trust
Account No.
[
] Termination Letter
|
Gentlemen:
Pursuant
to paragraph 1(i) of the Investment Management Trust Agreement between Everest
Acquisition Corporation (“Company”) and North Fork Bank (“Trustee”), dated as of
_____________, 2005 (“Trust Agreement”), this is to advise you that the Board of
Directors of the Company has voted to dissolve and liquidate the Company.
Attached hereto is a copy of the minutes of the meeting of the Board of
Directors of the Company relating thereto, certified by the Secretary of the
Company as true and correct and in full force and effect.
In
accordance with the terms of the Trust Agreement, we hereby (a) certify to
you
that the provisions of Section 11-51-302(6) and Rule 51-3.4 of the Colorado
Statute have been met and (b) authorize you, to commence liquidation of the
Trust Account. You will notify the Company and [___] (“Designated Paying Agent”)
in writing as to when all of the funds in the Trust Account will be available
for immediate transfer (“Transfer Date”). The Designated Paying Agent shall
thereafter notify you as to the account or accounts of the Designated Paying
Agent that the funds in the Trust Account should be transferred to on the
Transfer Date so that the Designated Paying Agent may commence distribution
of
such funds in accordance with the Company’s instructions. You shall have no
obligation to oversee the Designated Paying Agent’s distribution of the funds.
Upon the payment to the Designated Paying Agent of all the funds in the Trust
Account, the Trust Agreement shall be terminated.
-9-
Very
truly yours,
EVEREST
ACQUISITION CORPORATION
By:___________________________________
Xxxxx
X.
Xxxxxxx, Chief Executive Officer
By:___________________________________
Xxxx
Xxxxxxx, Secretary
-10-
EXHIBIT
C
|
AUTHORIZED
INDIVIDUAL(S)
FOR
TELEPHONE CALL BACK
|
AUTHORIZED
TELEPHONE
NUMBER(S)
|
|
|
Company:
|
||
|
Everest
Acquisition Corporation
15/F,
The Hong Kong Club Xxxxxxxx
0X
Xxxxxx Xxxx Xxxxxxx
Xxxx
Xxxx
Attn: Xxxxx
X. Xxxxxxx, Chief Executive Officer
|
(212)
___-____
|
|
|
Trustee:
|
||
|
North
Fork Bank
[___]
Attn:
[___]
|
(___)
___-____
|
-11-
