EXHIBIT
10.3
INVESTMENT MANAGEMENT TRUST
AGREEMENT
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, Rodman & Renshaw, LLC
(“Rodman”) 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, Rodman 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
Rodman 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 Rodman, 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 JP Morgan 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 Bill 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 Rodman 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 Rodman to
do so;
(h) Render to the Company and to Rodman, 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
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 Rodman 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
Rodman, 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
given by any
one of the persons authorized above to give written instructions,
provided that the Company and/or Rodman 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 Rodman 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, t
