|
Exhibit 10.5
INVESTMENT MANAGEMENT TRUST AGREEMENT
This Agreement is made as of
[ ],
2006, by and between TransTech Services Partners Inc. (the "
Company ") and Continental Stock Transfer & Trust
Company (the " Trustee ").
WHEREAS, the Company’s Registration Statement on
Form S-1, No. 333-
[ ]
(the " 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
(the " Effective Date ");
WHEREAS, Maxim Group LLC (" Maxim ") is acting as the
representative of the underwriters in the IPO (the
"Underwriters");
WHEREAS, the Company has agreed to issue securities in a private
placement that will occur prior to the effective date of the IPO
(the " Placement ");
WHEREAS, Lotus Capital LLC has agreed to lend to the Company the
principal sum of $500,000 (the " Loan Proceeds ");
WHEREAS, as described in the Registration Statement, and in
accordance with the Company’s Certificate of Incorporation,
an aggregate of $35,100,000 ($40,363,000, if the
Underwriters’ over-allotment option is exercised in full),
which is comprised of (i) the net proceeds of the IPO (except
as provided in the Registration Statement); (ii) the
$1,000,000 received by the Company in exchange for its securities
pursuant to the Placement; (iii) the Loan Proceeds; and
(iv) an additional $720,000 ($828,000, if the
Underwriters’ over-allotment option is exercised in full) of
the proceeds of the IPO, representing a portion of the
Underwriters’ discount (the " Contingent Discount ")
which Maxim has agreed to deposit in the Trust Account (as defined
below), will be delivered to the Trustee to be deposited and held
in the Trust Account for the benefit of the Company, and the
holders of the Company’s common stock, par value $.0001 per
share (the " Common Stock "), included in the units of the
Company’s securities issued in the IPO (the " Units ")
and Maxim 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 which 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, Maxim 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; and
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and 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, without
limitation, with respect to the Public Stockholders, 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 HSBC Bank USA, N.A. 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 "government
securities," within the meaning of Section 2(a)(16) of the
Investment Company Act of 1940, as amended (the " 1940 Act
"), having a maturity of 180 days or less or in any open ended
investment company registered under the 1940 Act that holds itself
out as a money market fund meeting the conditions of paragraphs
(c)(2), (c)(3) and (c)(4) under Rule 2a-7
promulgated under the 1940 Act;
(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 within two business days the Company and
Maxim 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 or the Company;
(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 Maxim to do
so;
(h)
render to the Company and to Maxim, and to such
other persons 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 upon
receipt of the Officers’ Certificate signed by the Chief
Executive Officer and Chief Financial Officer in accordance with
the terms of a letter (the " Termination Letter "), in a
form substantially similar to that attached hereto as
Exhibit A or Exhibit B, signed on behalf of
the Company by its Chief Executive Officer and Chief Financial
Officer, 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
as part of the Company’s plan of dissolution and
liquidation approved by the Company’s stockholders. The
Trustee understands and agrees that, except as provided in
Section 1 (j) and Section 2 hereof, 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 stock
vote in favor of the Business Combination (as hereinafter defined).
In all cases, the Trustee shall provide Maxim with a copy of any
Termination Letter, 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.
As
2
used in this Agreement, the term " Business Combination "
means the acquisition by the Company, through merger, capital stock
exchange, asset acquisition, stock purchase or other similar
business combination with, one or more operating business service
providers, as more fully described in the prospectus forming a
part of the Registration Statement; 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 a 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 Maxim, 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. Following the requisite approval of
the Company’s stockholders, 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, agreement in
principle or engagement letter (a " Letter of Intent ") for
a Business Combination prior to the LOI Termination Date
accompanied by an Officers’ Certificate as described in
Section 3(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.
Limited Distributions of Income on
Property .
(a)
Upon receipt by the Trustee of an Officers’
Certificate signed by the Chief Executive Officer and Chief
Financial Officer of the Company certifying as true, accurate and
complete a copy of any tax return required to be filed on behalf of
the Trust Account in respect of income earned on the Property held
therein, the Trustee shall deliver to the Company for submission to
the appropriate taxing authority a check made payable to the order
of such taxing authority in the amount required to pay such taxes;
provided, however, that in no event shall the
aggregate amount of all checks issued to taxing authorities
pursuant to this Section 2(a) exceed the income in
respect of which such taxes are due and owing.
(b)
On the last day of each month commencing
[ ],
2006 prior to the LOI Termination Date (or, if applicable, the
Second Termination Date), the Trustee shall pay to Lotus Capital
LLC, out of the interest earned on the Trust Account, an amount
equal to
[ ]
(representing 1/18 th of the Loan Proceeds), plus
accrued interest on the unpaid principal balance of the Loan
Proceeds at the rate of 4% per annum, until the full amount of the
Loan Proceeds, plus accrued interest thereon as aforesaid, shall be
repaid to Lotus Capital LLC.
(c)
Upon one or more written requests from the Company,
which may be given not more than once in any calendar month
period, the Trustee shall distribute to the Company interest earned
on the Trust Account, net of taxes payable, up to a maximum of
$600,000 ($800,000, if the Underwriters’ over-allotment
option is exercised in full). The
3
distributions requested by the Company may be for any
amount, provided that (i) in the aggregate, all distributions
under this Section 2(c) may not exceed $600,000
($800,000, if the Underwriters’ over-allotment option is
exercised in full), and (ii) such distributions may only
be made if and to the extent that interest has been earned on the
amount initially deposited into the Trust Account.
(d)
Upon receipt by the Trustee of a written instruction
from the Company for distributions from the Trust Account in
connection with a plan of dissolution and distribution, accompanied
by an Officers’ Certificate signed by the Chief Executive
Officer and Chief Financial Officer of the Company certifying as
true, accurate and complete (i) a statement of the amount of
actual expenses incurred or, where known with reasonable certainty,
imminently to be incurred by the Company in connection with its
dissolution and distribution, including any fees and expenses
incurred or imminently to be incurred by the Company in connection
with seeking stockholder approval of the Company’s plan of
dissolution and distribution, (ii) any amounts due to pay
creditors or required to reserve for payment to creditors, and
(iii) the sum of (i) and (ii), the Trustee shall
distribute to the Company an amount, as directed by the Company in
the instruction letter, up to the sum of (i) and (ii) as
indicated in the instruction letter.
(e)
Except as provided in Sections 1(i), 1(j), 2(a),
2(b), 2(c) and 2(d) above, no other distributions from
the Trust Account shall be permitted.
3.
Agreements and Covenants of the Company .
The Company hereby agrees and covenants:
(a)
to provide all instructions to the Trustee hereunder
in writing, signed by the Company’s Chief Executive Officer
and Chief Financial Officer, with a copy to Maxim. In addition,
except with respect to its duties under paragraph 1(i) and
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 and/or Maxim shall promptly confirm such
instructions in writing; and
(b)
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 Trustee may not agree to settle
any Indemnified Claim without the prior written consent of the
Company. The Company may participate in such action with its
own counsel;
4
(c)
to 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 3(b) hereof (it
being expressly understood that the Property shall not be used to
make any payments to the Trustee under such section);
(d)
that, in the event that the Company completes a
Business Combination and the Trust Account is liquidated in
accordance with Section 1(i) hereof, the Trustee or
another independent party designated by Maxim shall act as the
inspector of election to certify the results of the stockholder
vote;
(e)
that 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,
|
