INVESTMENT MANAGEMENT TRUST AGREEMENT
This
Agreement is made as of , 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-_____ (“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;
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 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.
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. 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).
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 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 anyon
