INVESTMENT MANAGEMENT TRUST
AGREEMENT
This INVESTMENT MANAGEMENT TRUST
AGREEMENT (this “ Agreement ”) is made as of
______________, 2006 by and between Echo Healthcare Acquisition
Corp. (the “ Company ”) and Corporate Stock
Transfer, Inc. (“ Trustee ”).
WHEREAS , the Company’s Registration Statement on
Form S-1, File No. 333-126650, 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 by the Securities
and Exchange Commission (“ Effective Date ”);
and
WHEREAS , Morgan Joseph & Co. Inc. (“
Morgan ”) is acting as the representative of the
underwriters in the IPO; and
WHEREAS , as described in the Registration Statement,
and in accordance with the Company’s Certificate of
Incorporation, as amended and restated, $47,780,000 of the gross
proceeds of the IPO ($54,947,000 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 public holders (the “ Public
Stockholders ”) of the Company’s common stock, par
value $.0001 per share (the “ Common Stock ”),
issued in the IPO and, in the event the Company’s units
(which are comprised of one share of Common Stock and one warrant
to purchase one share of Common Stock) 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
Public Stockholders and the Company will be referred to together as
the “ Beneficiaries ” and
WHEREAS , pursuant to (i) the Underwriting Agreement,
dated as of _________, 2006, between the Company and the
Underwriters, a portion of the Property equal to $1,500,000 (or
$1,725,000 if the Underwriters’ over-allotment option is
exercised in full) is attributable to deferred underwriting
commissions; (ii) a deferral letter from Powell Goldstein LLP
(“ Powell Goldstein ”) dated as of January 29,
2006 a portion of the Property equal to $200,000 is attributable to
legal fees; and (iii) a deferral letter from Tri-Sate Financial
(“ Tri-State Financial ”) dated as of January
29, 2006 a portion of the Property equal to $57,500 is attributable
to printer fees, and all of the foregoing will become payable by
the Company upon the consummation of a Business Combination (as
defined in the Registration Statement) (the “Deferred
Fees” ); 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 Statute with respect to
Public Stockholders in Colorado, in a segregated trust account
(“ Trust Account ”) established by the Trustee
at a branch of Northern Trust Corporation 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 United States “government
securities” within the meaning of Section 2(a)(16) of the
Investment Company Act of 1940 having a maturity of 180 days or
less, or in any open ended investment company registered under the
Investment Company Act of 1940 that holds itself out as a money
market fund meeting the conditions of paragraphs (c)(2), (c)(3) and
(c)(4) of Rule 2a-7 promulgated under the Investment Company Act of
1940;
(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 Morgan, 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 issue a check directly to the taxing
authorities designated by the Company, out of the Property in the
Trust Account, in the amount indicated by the Company as owing to
each such taxing authority. In all such cases, the Trustee shall
promptly provide Morgan with a copy of any disbursement requests or
other correspondence it receives with respect to any proposed
withdrawal from the Trust Account; and
(j) Commence
and effect liquidation of the Trust Account in accordance with the
following procedures:
(i) The
Trustee shall liquidate and distribute the proceeds of the Trust to
the Public Stockholders 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 or
President and shall be affirmed by the signature of the
Company’s entire Board of Directors;
(iii) The
Trustee shall 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;
(iv) Notwithstanding
the provisions of Sections 1(j)(i) and (iii) hereof and except as
set forth in Section 1(i) above , the Trust Account shall be
immediately liquidated and
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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 accordance
with the terms and provisions set forth 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 Record
Date.
(v) All
distributions of Property made to the Public Stockholders upon the
liquidation of the Trust 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.
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 or Chairman of the Board and affirmed in
writing by the Company’s Board of Directors. In addition,
except with respect to its duties under Section 1(j)
above;
(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 $____ and an annual fee of
$____ (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);
(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
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completeness of) any letter of
intent, agreement in principle or definitive agreement that is
executed prior to the Record Date in connection with a
