EXHIBIT 10.3 INVESTMENT MANAGEMENT TRUST AGREEMENTInvestment Management Trust Agreement |
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ORACLE HEALTHCARE ACQUISITION CORP. | Continental Stock Transfer & Trust Company | CRT Capital Group LLC. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
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Exhibit 10.3
INVESTMENT MANAGEMENT TRUST AGREEMENT
This Agreement is made as of February , 2006 by and between Oracle Healthcare Acquisition Corp. (the “Company”) and Continental Stock Transfer & Trust Company (“Trustee”).
WHEREAS, the Company’s Registration Statement on Form S-1, No. 333-128748, as amended from time to time (“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, CRT Capital Group LLC (the “Representative”) 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 Amended and Restated Certificate of Incorporation, upon consummation of the IPO, $113,500,000 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, par value $.0001 per share, 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 Statutes. A copy of the Colorado 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”);
WHEREAS, pursuant to the Underwriting Agreement, dated as of February , 2006, between the Company and the Representative, a portion of the Property equal to $2,400,000 is attributable to deferred underwriting commissions that will become payable by the Company to the underwriters upon the consummation of a Business Combination (as defined in the Registration Statement) (the “Deferred Discount”); 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 Lehman Brothers Inc.;
(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 (i) any
“Government Security,” which shall mean any Treasury Bill issued by
the United States government, having a maturity of one hundred and eighty days
or less; or (ii) any open ended investment company selected by the Company
registered under the Investment Company Act of 1940 that holds itself out as a
money market fund and bears the highest (AAA) credit rating issued by a United
States nationally recognized rating agency such as Standard &
Poor’s Corporation or Moody’s Investor Services, 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 to do so;
(h)
Render to the Company and to the
Representative, and to such other person as the Company may instruct, in writing,
monthly statements of the activities of and amounts in the Trust Account
reflecting all receipts in writing 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, only at the
written instruction of the Company, the Trustee shall make available in cash
from the Property in the Trust Account an amount specified by the Company as
owing to the applicable taxing authority, which amount shall be paid directly
to the taxing authority (and not through the Company) by electronic funds
transfer, account debit or other method of payment; provided, however,
that if a taxing authority will not accept payment in such manner, then any payment
which would have been made directly to the taxing authority may be made to the
Company, and the Company shall forward such payment to the taxing authority;
and
(j)
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 President or Chairman of the Board and affirmed by its
entire Board of Directors, 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; provided,
however, that in the event that a Termination Letter has not been
received by , 2007 (or the date
that is the six month anniversary of such date, in the event that (i) a
letter of intent, agreement in principle or definitive agreement has been
executed prior to such date in connection with a Business Combination (as
defined in the Termination Letter attached hereto as Exhibit A) that has
not been consummated by
, 2007 and
(ii) the Company has complied with
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Section 2(e) hereof prior to such date), the Trust Account shall be liquidated in accordance with the procedures set forth in the Termination Letter attached as Exhibit B to the stockholders of record on the record date; provided, further, that the record date shall be within ten (10) days of , 2007 (or the date that is the six month anniversary of such date, in the event that (i) a letter of intent, agreement in principle or definitive agreement has been executed prior to such date in connection with a Business Combination that has not been consummated by , 2007 and (ii) the Company has complied with Section 2(e) hereof prior to such date), or as soon thereafter as is practicable. In all cases, the Trustee shall provide CRT with a copy of any Termination Letter and/or any other correspondence that it receives with respect to any proposed withdrawal from the Trust Account promptly after it receives the same.
(k)
The distribution, if any, of the Deferred
Discount to the underwriters upon the liquidation of the Trust Account as
provided herein shall be made from the Trust Account through the Trustee (and
not through the Company) in accordance with a written instruction of the
Representative.
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 President, Chairman of the
Board or Chief Financial Officer. 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;
(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
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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);
(d)
Provide to the Trustee any letter of
intent, agreement in principle or definitive agreement that is executed in
connection with a Business Combination, together with a certified copy of a
unanimous resolution of the Board of Directors of the Company affirming that
such letter of intent, agreement in principle or definitive agreement is in
effect; provided, however, that in the event any of the
Company’s directors are unable to participate in and approve such
Business Combination due to a pre-existing contractual or fiduciary
relationship, the Company shall provide the Trustee with a certified copy of a
resolution of the remaining members of the Board of Directors of the Company
affirming that such letter of intent, agreement in principle or definitive
agreement is in effect; 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 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 paragraph 1 hereof and the Trustee shall
have no liability to any party, including liability for any fee or penalty
assessed against the Company for late payment of taxes, 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
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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;
(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
