EXHIBIT 10.7
INVESTMENT MANAGEMENT TRUST AGREEMENT
This Agreement is made as of ___________, 2005 by
and between
International Metal Enterprises, Inc. (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,
$164,850,000
of the gross proceeds of the IPO ($190,230,000 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) Promptly 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
Chief Executive
Officer or President 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.
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 Chief Executive Officer or President. 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
2
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 anyone else
for any action
taken or omitted by it, or any action suffered by it to be taken or
omitted, in
good faith and in the exercise of its own best judgment, except for
its gross
negligence or willful misconduct. The Trustee may rely conclusively
and shall be
protected in acting upon any order, notice, demand, certificate,
opinion or
advice of counsel (including counsel chosen by the Trustee),
statement,
instrument, report or other paper or document (not only as to its
due execution
and the validity and effectiveness of its provisions, but also as
to the truth
and acceptability of any information therein contained) which is
believed by the
Trustee, in good faith, to be genuine and to be signed or presented
by the
proper person or persons. The Trustee shall not be bound by any
noti
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