INVESTMENT MANAGEMENT TRUST
AGREEMENT
This Agreement is made as of July 13, 2005 by
and between Fortress America Acquisition Corporation (the
“Company”) and Continental Stock Transfer & Trust
Company (“Trustee”).
WHEREAS, the Company’s Registration
Statement on Form S-1, No. 333-123504 (“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, Sunrise Securities Corp.
(“Sunrise”) 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, $37,660,000 of the gross proceeds of
the IPO ($43,309,000 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, 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”); 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;
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Agreements
and Covenants of Trustee . The Trustee hereby agrees and covenants
to:
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(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 JPMorgan 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 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 Sunrise, 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 President 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. 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. In all cases, the Trustee shall
provide Sunrise 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
same.
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Agreements
and Covenants of the Company . The Company hereby agrees and covenants
to:
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(a) Give all instructions to the Trustee hereunder
in writing, signed by the Company’s President 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
(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).
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Limitations
of Liability . The
Trustee shall have no responsibility or liability to:
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(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