EXHIBIT 10.11
FORM OF
INVESTMENT MANAGEMENT TRUST AGREEMENT
This INVESTMENT MANAGEMENT TRUST AGREEMENT (this "Agreement") is made as
of __________ __, 2006 by and between Navitas International Corporation (the
"Company"), a Delaware corporation, and Continental Stock Transfer & Trust
Company ("Trustee").
WHEREAS, the Company's Registration Statement on Form S-1, File No.
333-130697, as amended (the "Registration Statement" and the final prospectus
contained therein, the "Prospectus"), for its initial public offering of
securities ("IPO") has been declared effective as of the date hereof ("Effective
Date") by the Securities and Exchange Commission; and
WHEREAS, FTN Midwest Securities Corp. is acting as the representative (the
"Representative") of the underwriters in the IPO; and
WHEREAS, as described in the Registration Statement, and in accordance
with the Company's Amended and Restated Certificate of Incorporation,
$107,094,184 of the net proceeds of the IPO ($123,619,184 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, the
Representative and the public holders (the "Public Stockholders") of the
Company's common stock, par value $.0001 per share (the "Common Stock"), issued
in the IPO as hereinafter provided and in the event the Units are registered in
Colorado, pursuant to Section 11-51-302(6) of the Colorado Revised Statute. The
amount to be delivered to the Trustee will be referred to herein as the
"Property." The Public Stockholders, the Representative 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.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto 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 the terms of Section
11-51-302(6) of the Colorado Revised Statutes, in a segregated trust
account (the "Trust Account") established by the Trustee at a branch of
JPMorgan Chase or Bear ▇▇▇▇▇▇▇, as selected by the Company;
(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 United States "government securities,"
defined as any Treasury ▇▇▇▇ issued by the United States having a maturity
of 180 days or less or in money market funds meeting certain conditions
under Rule 2a-7 promulgated under the Investment Company Act of 1940, as
amended, as determined by the Company;
(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 the Representative 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 the Representative to do so;
(h) Render to the Company and to the Representative, 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) If there is any income tax obligation relating to the income of
the Property in the Trust Account, then, at the written instruction of the
Company, the Trustee shall disburse funds by bank wire transfer out of the
Property in the Trust Account to the Company's designated bank account in
an amount specified by the Company as required to pay its income tax
liability. In all such cases the Trustee shall promptly provide the
Representative with a copy of any disbursement requests or other
correspondence it receives with respect to any proposed withdrawal from
the Trust Account;
(j) Commence and effect a partial or complete liquidation of the
Trust Account only in accordance with the following procedures:
(i) The Trustee shall liquidate the Property (other than cash)
and distribute the proceeds of such liquidation and any cash held in
the Trust Account immediately after receipt of, and only in
accordance with the terms of a letter (the "Termination Letter"), in
a form substantially similar to that attached hereto as either
Exhibit A or Exhibit B, as the case may be;
(ii) Any Termination Letter delivered pursuant to this
Agreement shall be executed on behalf of the Company by its Chief
Executive Officer, President, Chairman of the Board or
Vice-President, Finance;
(iii) Notwithstanding the provisions of Section 1(j)(i)
hereof, the Trust Account shall be immediately liquidated and
distributed to the Public Stockholders of record on the Record Date
or the Extended Record Date (each as defined below), as the case may
be, in the manner described in the Termination Letter attached as
Exhibit B, in the event that a Termination Letter has not been
received by the Trustee by either: (A) [ ], 2007 (the "Record
Date"), or a more practicable date, determined by the Trustee in its
sole and absolute discretion, which is no more than ten (10) days
before or after the Record Date or (B) the date that is the six
month anniversary of the Record Date or such other, more practicable
date, as determined by the Trustee in accordance with subsection (A)
above (such date, the "Extended Record Date"), in the event that a
letter of intent, agreement in principle or definitive agreement has
been
executed prior to the Record Date in connection with a Business
Combination (as defined in the Prospectus) that has not been
consummated by the Extended Record Date.
(iv) All distributions of Property made to the Public
Stockholders upon the liquidation of the Trust Account as provided
for herein shall be made from the Trust Account through the Trustee
(and not through the Company) as follows: (A) through the Trustee,
as transfer agent for the Company, to the Public Stockholders who
hold shares of Common Stock "of record" as of the Record Date or the
Extended Record Date, as the case may be, or (B) through the
Depository Trust Company, to the Public Stockholders who hold shares
of Common Stock in "street name" as of the Record Date or the
Extended Record Date, as the case may be.
(v) In all cases, the Trustee shall provide the Representative
with a copy of any termination letters and/or any other
correspondence that it receives with respect to any proposed
withdrawal from the Trust Account promptly after it receives the
same.
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, President, Chairman of
the Board or Vice-President, Finance. The Company shall promptly provide a
copy of any such instructions to the Representative. In addition, except
with respect to its duties under Section 1(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 shall promptly confirm such
instructions in writing, with a copy of such confirmation sent to the
Representative;
(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 Section, 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 $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 pay the annual fee on the anniversary of the Effective
Date. The Trustee shall refund to the Company the annual fee (on a pro
rata basis) with respect to any period after the liquidation of the Trust
Account. 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) Provide to the Trustee (and, at such time, certify in writing,
and cause each of the Company's executive officers and directors to
certify in writing, to the Trustee as to the veracity and completeness of)
any letter of intent, agreement in principle or definitive agreement that
is executed prior to the Record Date in connection with a Business
Combination; and
(e) In connection with any vote of the Company's stockholders
regarding a Business Combination, provide to the Trustee an affidavit or
certificate of a firm regularly engaged in the business of soliciting
proxies and tabulating stockholder votes (which firm may be the Trustee)
verifying the vote of the Company's stockholders regarding such Business
Combination.
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 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);
(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 the
Trustee's 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;
(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;
(h) File tax reports, prepare income tax returns or pay any taxes on
behalf of the Trust Account (it being expressly understood that, as set
forth in Section 1(i), if there is any income tax obligation relating to
the income of the Property in the Trust Account, then, at the written
instruction of the Company, the Trustee shall disburse funds by bank wire
transfer out of the Property in the Trust Account to the Company's
designated bank account in an amount specified by the Company as required
to pay its income tax liability); and
(i) Compute, confirm or otherwise verify amounts requested by the
Company pursuant to Section 1(i) above.
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, during which time the
Trustee shall continue to act in accordance with this Agreement. 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 (90) days of receipt of the resignation notice from the
Trustee, the Trustee may, but shall not be obligated to, 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(j)
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); or
(c) On such date after the Record Date (or, as the case may be, the
Extended Record Date) 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(j) hereof.
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.
(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 may be delivered by facsimile transmission and each 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, and no successor
Trustee may be appointed pursuant to Section 4(a), without the prior
written consent of the Representative. 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 and County of New York for
purposes of resolving any disputes hereunder. The parties hereto
irrevocably submit to such jurisdiction, which jurisdiction shall be
exclusive. The parties hereto hereby waive any objection to such exclusive
jurisdiction and that such courts represent an inconvenient forum.
(e) The Company and the Trustee hereby acknowledge that this
Agreement may not be amended, changed, waived, altered or modified without
the prior written consent of the Representative, which consent may not be
unreasonably withheld.
(f) 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 and shall be deemed given when so delivered
personally or sent by facsimile transmission or, if sent by private
national courier service, on the next business day after delivery to the
courier, or if mailed, two business days after the date of the mailing, as
follows:
If to the Trustee, to:
Continental Stock Transfer
& Trust Company
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Company, to:
Navitas International Corporation
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▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Servjeet ▇. ▇▇▇▇▇▇, General Counsel
Fax No.:
and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
in either case with a copy to:
FTN Midwest Securities Corp.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax No.:
and
▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇ LLP
Two Stamford Plaza
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▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇-▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
(g) This Agreement may not be assigned by the Trustee without the
prior written consent of the Company and the Representative.
(h) 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.
(i) The Trustee hereby waives any and all right, title, interest or
claim of any kind ("Claim") in or to any distribution of the Trust
Account, and hereby agrees not to seek recourse, reimbursement, payment or
satisfaction for any Claim against the Trust Account, for any reason
whatsoever.
(j) The Trustee hereby consents to the inclusion of Continental
Stock Transfer & Trust Company in the Registration Statement and other
materials relating to the IPO.
[remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties have duly executed this Investment
Management Trust Agreement as of the date first written above.
CONTINENTAL STOCK TRANSFER & TRUST
COMPANY, as Trustee
By:
-----------------------------------------
Name:
Title:
NAVITAS INTERNATIONAL CORPORATION
By:
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and Chief Executive
Officer
EXHIBIT A
NAVITAS INTERNATIONAL CORPORATION
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
[Insert date]
Continental Stock Transfer
& Trust Company
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Re: Trust Account No. [ ] Termination Letter
Gentlemen:
Pursuant to Section 1(j) of the Investment Management Trust Agreement
between Navitas International Corporation (the "Company") and Continental Stock
Transfer & Trust Company ("Trustee"), dated as of ___________, 2006 (the "Trust
Agreement"), this is to advise you that the Company has entered into an
agreement (the "Business Agreement") with (the "Target Business") to
consummate a business combination (as defined in the Prospectus) with the Target
Business (the "Business Combination") on or about [insert date]. The Company
shall notify you at least two business days in advance of the actual date of the
consummation of the Business Combination (the "Consummation Date").
Pursuant to paragraph 2(e) of the Trust Agreement, we are providing you
with an affidavit or certificate of , which verifies the vote of the
Company's stockholders in connection with the Business Combination, including
the identities of the Public Stockholders who exercised their conversion option
in connection with the Business Combination (the "Vote Verification"). In
accordance with the terms of the Trust Agreement, we hereby authorize you to
commence liquidation of the Trust Account (as defined in the Trust Agreement) to
the effect that, on the Consummation Date, all of the funds held in the Trust
Account will be immediately available for distribution.
On the Consummation Date, the Company shall deliver to you written
instructions with respect to the transfer of the funds held in the Trust Account
("Instruction Letter"), including such instructions as may be necessary to
ensure compliance with Section 11-51-302(6) of the Colorado Revised Statutes.
You are hereby directed and authorized to transfer the funds held in the Trust
Account immediately upon your receipt of 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 be
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 and the Trust Account closed.
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 Account Agreement on the business day immediately following the
Consummation Date as set forth in the notice.
Very truly yours,
NAVITAS INTERNATIONAL CORPORATION
By:
---------------------------------------------
Name:
Title:
EXHIBIT B
NAVITAS INTERNATIONAL CORPORATION
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▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
[Insert date]
Continental Stock Transfer
& Trust Company
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Re: Trust Account No. [ ] Termination Letter
Gentlemen:
Pursuant to Section 1(j) of the Investment Management Trust Agreement
between Navitas International Corporation (the "Company") and Continental Stock
Transfer & Trust Company (the "Trustee"), dated as of ______________, 2006 (the
"Trust Agreement"), this is to advise you that the Board of Directors of the
Company has voted to dissolve and liquidate the Trust Account (as defined in the
Trust Agreement). 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 authorize
you to commence liquidation of the Trust Account. In connection with this
liquidation, you are hereby authorized, in your discretion, to establish a
record date for the purposes of determining the Public Stockholders of record
entitled to receive their per share portion of the Trust Account. The record
date shall be within ten (10) days of the date of this letter. You will notify
the Company in writing as to when all of the funds in the Trust Account will be
available for immediate transfer ("Transfer Date") in accordance with the terms
of the Trust Agreement and the Amended and Restated Certificate of Incorporation
of the Company on a pro rata basis to the Public Stockholders of the Company,
provided that you shall retain in the Trust Account an amount equal to estimated
taxes that are or will be due on income of the Trust Account at an assumed rate
of [__]%. You shall commence distribution of such funds in accordance with the
terms of the Trust Agreement and the Amended and Restated Certificate of
Incorporation of the Company and you shall oversee the distribution of the
funds. Upon the payment of all the funds in the Trust Account, the Trust
Agreement shall be terminated.
Very truly yours,
NAVITAS INTERNATIONAL CORPORATION
By:
-----------------------------------------
Name:
Title:
EXHIBIT C
AUTHORIZED INDIVIDUAL(S) AUTHORIZED
FOR TELEPHONE CALL BACK TELEPHONE NUMBER(S)
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Company:
Navitas International Corporation
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▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇, Chairman
(▇▇▇) ▇▇▇-▇▇▇▇
Trustee:
Continental Stock Transfer
& Trust Company
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman (▇▇▇) ▇▇▇-▇▇▇▇