EXHIBIT 10.1
INVESTMENT MANAGEMENT TRUST AGREEMENT
This
Agreement is made as of [ ], 2007 by and between FMG
Acquisition Corp. (the “Company”) and Continental
Stock Transfer & Trust Company
(“Trustee”).
WHEREAS,
the Company’s Registration Statement on Form S-1, File
No. 333-[ ] (“Registration Statement”), for its
initial public offering of securities (“IPO”) has
been declared effective on [ , 2007] by the Securities and
Exchange Commission (“Effective Date”);
and
WHEREAS,
the Company has completed a private placement of 1,250,000
Warrants (the “Private Warrants”) prior to the
completion of the IPO for a purchase price of $1,250,000;
and
WHEREAS,
Pali Capital, Inc. (“Pali”) is acting as the
representative of the underwriters in the IPO (the
“Underwriters”); and
WHEREAS,
as described in the Company’s Registration Statement, in
accordance with the Company’s Amended and Restated
Certificate of Incorporation, $[ ] of the net proceeds of the
IPO and the sale of the Private Warrants ($[ ] if the
Underwriters’ over-allotment option is exercised in
full), will be delivered to the Trustee as of [ , 2007] to be
deposited and held in a trust account for the benefit of the
Company, the holders of the common stock, par value $.0001 per
share, of the Company (“Common Stock”), included
in the units of the Company’s securities issued in the
IPO (the “Units”), and Pali 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 (“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, the Company and Pali and the Underwriters will
be referred to together as the
“Beneficiaries”;
WHEREAS,
a portion of the Property consists of $1,080,000 (or
$1,242,000 if the Underwriters’ over-allotment is
exercised in full) attributable to the Underwriters’
discount (the “Deferred Discount”) which the
Underwriters have agreed to deposit in the Trust Account (as
defined below); 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 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 segregated
trust accounts (the “Trust Account”) established
by the Trustee with [
];
(b)
Manage, supervise and administer the Trust
Account subject to the terms and conditions set forth
herein;
(c)
In
a timely manner, upon the written instruction of the Company,
to invest and reinvest the Property in any “Government
Security” or in money market funds selected by the
Company meeting the conditions specified in Rule 2a-7
promulgated under the Investment Company Act of 1940, as
amended, as determined by the Company. 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 or any open ended investment company
selected by the Company and 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) under Rule 2a-7 promulgated under the Investment
Company Act of 1940 as determined by the Company
;
(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 and Pali 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 Pali
to do so;
(h)
Render to the Company and to Pali, 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 or other tax obligation
relating to the income from the Property in the Trust Account,
then, from time to time, at the written instruction of the
Company, the Trustee shall promptly to the extent there is not
sufficient cash in the Trust Account to pay such tax
obligation, liquidate such assets held in the Trust Account as
shall be designated by the Company in writing;
and
(j)
Commence
liquidation of the Trust Account only after and promptly 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 hereto,
signed on behalf of the Company by its President or Chairman of the
Board and Secretary or Assistant Secretary or other authorized
officer of the Company, 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; provided, however, that in the event that a Termination
Letter has not been received by the Trustee by the 24-month
anniversary of the effective date of the Registration Statement
(“Last Date”), the Trust Account shall be liquidated in
accordance with the procedures set forth in the Termination Letter
attached as Exhibit B hereto and distributed to the stockholders of
record on the Last Date. In all cases, the Trustee shall provide
Pali 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.
The provisions of this Section 1(j) may not be modified, amended or
deleted under any circumstances.
2.
Limited Distributions of Income on Property .
(a)
If there is any income tax obligation relating to
the income from the Property in the Trust Account, or if there
is any franchise or other tax obligation to which the Company
is subject, then, at the written instruction of the Company,
the Trustee shall disburse to the Company or the Internal
Revenue Service by wire transfer or check (as directed by the
Company in its instruction letter), out of the Property in the
Trust Account, the amount indicated by the Company as required
to pay income, franchise or other taxes and disburse to the
Company by wire transfer out of the Property in the Trust
Account, the amount indicated by the Company as owing in
respect of such taxes.
(b)
Upon
written request from the Company containing certification that
such distribution pursuant to this Section 2(b) shall only be
used to fund the working capital requirements of the Company
and the costs related to identifying, researching and
acquiring a prospective target business, including, without
limitation, the expenses incurred in connection with the
Company’s dissolution, in each case as described in the
prospectus that forms a part of the Registration Statement,
the Trustee shall distribute to the Company an amount equal to
up to $1,200,000 of the interest earned on the Property in the
Trust Account, net of taxes payable, through the last day of
the month immediately preceding the date of receipt of the
Company’s written request.
(c)
Upon
receipt of the Termination Letter, the Trustee shall liquidate
the Trust Account in accordance with Section
1(j).
(d)
Except
as provided in this Section 2, 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. In addition,
except with respect to its duties under paragraphs 1(i) and
1(j), 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 Pali shall
promptly confirm such instructions in writing;
(b)
Subject to the provisions of Section 5 hereof, 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 at its own expense;
(c)
Pay the Trustee an initial acceptance fee, an
annual fee and a transaction processing fee for each
disbursement made pursuant to Sections 1(i) and 2(b) as set
forth on Schedule A hereto, which fees shall be subject to
modification by the parties from time to time. It is expressly
understood that the Property shall not be used to pay such
fees and further agreed that said transaction processing fees
shall be deducted by the Trustee from the disbursements made
to the Company pursuant to Section 2(b). 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 annual fee (on a pro rata basis) with respect
to any period after the liquidation of the Trust Account. The
Company shall not be responsible for any other fees or charges
of the Trustee except as set forth in this Section 3(c) and 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 Sections);
(d)
That, in the event the Company consummates a
Business Combination and the Trust Account is liquidated in
accordance with Section 1(j) hereof, the Trustee or another
independent party designated by Pali shall act as the
inspector of election to certify the results of the
stockholder vote. As used in this Agreement, the term
“Business Combination” means the acquisition by
the Company, through merger, capital stock exchange, asset or
stock acquisition of, or similar business combination with,
one or more operating businesses, as more fully described in
the prospectus forming a part of the Registration
Statement;
(e)
That the Officer’s Certificate referenced
in Sections 1(j) hereof shall require the Company’s
Chief Executive Officer and Chief Financial Officer to each
certify the following (wherever applicable): (1) prior to the
Last Date, the Company has entered into a Business Combination
with a target business, the terms of which are consistent with
the requirements set forth in the Registration Statement; and
(2) the Board of Directors (the “Board”) pursuant
to the unanimous written consent of the Board has approved the
Business Combination. A copy of such consent and the
definitive agreement relating to the Business Combination so
approved shall be attached as an exhibit to the
Officer’s Certificate;
(g)
Within five business days after the Underwriters’
over-allotment op
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