INVESTMENT MANAGEMENT TRUST AGREEMENT
This Agreement is made as of _____________, 2005 by and
between Ithaka Acquisition Corp. (the "Company") and Continental Stock Transfer
& Trust Company ("Trustee").
WHEREAS, the Company's registration statement on Form S-1, No.
333-124521 ("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, EarlyBirdCapital, Inc. ("EBC") 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, $45,050,000 of the
gross proceeds of the IPO ($52,164,500 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;
(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" within the
meaning of Section 2(a)(16) of the Investment Company Act of 1940, 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 EBC, 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 or Assistant 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 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 Trustee may not agree to settle any
Indemnified Claim without the
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prior written consent of the Company. 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 notice or
demand, or any waiver, modification, termination or rescission of this Agreement
or any of the terms hereof, unless evidenced by a written instrument delivered
to the Trustee signed by the proper party or parties and, if the duties or
rights of the Trustee are affected, unless it shall give its prior written
consent thereto;
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(g) Verify the correctness of the information set forth in the
Registration Statement or to confirm or assure that any acquisition made by the
Company or any other action taken by it is as contemplated by the Registration
Statement; and
(h) Pay any taxes on behalf of the Trust Account (it being
expressly understood that the Property shall not be used to pay any such taxes
and that such taxes, if any, shall be paid by the Company from funds not held in
the Trust Account).
4. TERMINATION. This Agreement shall terminate as follows:
(a) If the Trustee gives written notice to the Company that it
desires to resign under this Agreement, the Company shall use its reasonable
efforts to locate a successor trustee. At such time that the Company notifies
the Trustee that a successor trustee has been appointed by the Company and has
agreed to become subject to the terms of this Agreement, the Trustee shall
transfer the management of the Trust Account to the successor trustee, including
but not limited to the transfer of copies of the reports and statements relating
to the Trust Account, whereupon this Agreement shall terminate; provided,
however, that, in the event that the Company does not locate a successor trustee
within ninety days of receipt of the resignation notice from the Trustee, the
Trustee may submit an application to have the Property deposited with the United
States District Court for the Southern District of New York and upon such
deposit, the Trustee shall be immune from any liability whatsoever;
(b) At such time that the Trustee has completed the
liquidation of the Trust Account in accordance with the provisions of paragraph
1(i) hereof, and distributed the Property in accordance with the provisions of
the Termination Letter, this Agreement shall terminate except with respect to
Paragraph 2(b); or
(c) On such date after _____________, 2007 when the Trustee
deposits the Property with the United States District Court for the Southern
District of New York in the event that, prior to such date, the Trustee has not
received a Termination Letter from the Company pursuant to paragraph 1(i).
5. MISCELLANEOUS.
(a) The Company and the Trustee each acknowledge that the
Trustee will follow the security procedures set forth below with respect to
funds transferred from the Trust Account. Upon receipt of written instructions,
the Trustee will confirm such instructions with an Authorized Individual at an
Authorized Telephone Number listed on the attached Exhibit C. The Company and
the Trustee will each restrict access to confidential information relating to
such security procedures to authorized persons. Each party must notify the other
party immediately if it has reason to believe unauthorized persons may have
obtained access to such information, or of any change in its authorized
personnel. In executing funds transfers, the Trustee will rely upon account
numbers or other identifying numbers of a beneficiary, beneficiary's bank or
intermediary bank, rather than names. The Trustee shall not be liable for any
loss, liability or expense resulting from
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any error in an account number or other identifying number, provided it has
accurately transmitted the numbers provided.
(b) This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York, without giving
effect to conflicts of law principles that would result in the application of
the substantive laws of another jurisdiction. It may be executed in several
counterparts, each one of which shall constitute an original, and together shall
constitute but one instrument.
(c) This Agreement contains the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof.
This Agreement or any provision hereof may only be changed, amended or modified
by a writing signed by each of the parties hereto; provided, however, that no
such change, amendment or modification may be made without the prior written
consent of EBC. As to any claim, cross-claim or counterclaim in any way relating
to this Agreement, each party waives the right to trial by jury.
(d) The parties hereto consent to the jurisdiction and venue
of any state or federal court located in the City of New York, Borough of
Manhattan, for purposes of resolving any disputes hereunder.
(e) Any notice, consent or request to be given in connection
with any of the terms or provisions of this Agreement shall be in writing and
shall be sent by express mail or similar private courier service, by certified
mail (return receipt requested), by hand delivery or by facsimile transmission:
if to the Trustee, to:
Continental Stock Transfer
& Trust Company
00 Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxx
Fax No.: (000) 000-0000
if to the Company, to:
Ithaka Acquisition Corp.
000 Xxxxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxx X. Brooke, Chief Executive Officer
Fax No.: (___) ___-____
in either case with a copy to:
EarlyBirdCapital, Inc.
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000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxxx, Chairman
Fax No.: (000) 000-0000
(f) This Agreement may not be assigned by the Trustee without
the prior consent of the Company.
(g) Each of the Trustee and the Company hereby represents that
it has the full right and power and has been duly authorized to enter into this
Agreement and to perform its respective obligations as contemplated hereunder.
The Trustee acknowledges and agrees that it shall not make any claims or proceed
against the Trust Account, including by way of set-off, and shall not be
entitled to any funds in the Trust Account under any circumstance.
(h) Each of the Company and the Trustee hereby acknowledge
that EBC is a third party beneficiary of this Agreement.
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IN WITNESS WHEREOF, the parties have duly executed this
Investment Management Trust Agreement as of the date first written above.
CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Trustee
By: ____________________________
Name:
Title:
ITHAKA ACQUISITION CORP.
By: ____________________________
Name: Xxxx X. Brooke
Title: Chief Executive Officer
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EXHIBIT A
[LETTERHEAD OF COMPANY]
[INSERT DATE]
Continental Stock Transfer
& Trust Company
00 Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxx
Re: TRUST ACCOUNT NO. 530- TERMINATION LETTER
Gentlemen:
Pursuant to paragraph 1(i) of the Investment Management Trust
Agreement between Ithaka Acquisition Corp. ("Company") and Continental Stock
Transfer & Trust Company ("Trustee"), dated as of __________, 2005 ("Trust
Agreement"), this is to advise you that the Company has entered into an
agreement ("Business Agreement") with __________________ ("Target Business") to
consummate a business combination with Target Business ("Business Combination")
on or about [INSERT DATE]. The Company shall notify you at least 48 hours in
advance of the actual date of the consummation of the Business Combination
("Consummation Date").
In accordance with the terms of the Trust Agreement, we hereby
authorize you to commence liquidation of the Trust Account to the effect that,
on the Consummation Date, all of funds held in the Trust Account will be
immediately available for transfer to the account or accounts that the Company
shall direct on the Consummation Date.
On the Consummation Date (i) counsel for the Company shall
deliver to you written notification that (a) the Business Combination has been
consummated and (b) the provisions of Section 11-51-302(6) and Rule 51-3.4 of
the Colorado Statute have been met, and (ii) the Company shall deliver to you
written instructions with respect to the transfer of the funds held in the Trust
Account ("Instruction Letter"). You are hereby directed and authorized to
transfer the funds held in the Trust Account immediately upon your receipt of
the counsel's letter and the Instruction Letter, in accordance with the terms of
the Instruction Letter. In the event that certain deposits held in the Trust
Account may not be liquidated by the Consummation Date without penalty, you will
notify the Company of the same and the Company shall direct you as to whether
such funds should remain in the Trust Account and distributed after the
Consummation Date to the Company. Upon the distribution of all the funds in the
Trust Account pursuant to the terms hereof, the Trust Agreement shall be
terminated.
In the event that the Business Combination is not consummated
on the Consummation Date described in the notice thereof and we have not
notified you on or before the original Consummation Date of a new Consummation
Date, then the funds held in the Trust Account shall be reinvested as provided
in the Trust Agreement on the business day immediately following the
Consummation Date as set forth in the notice.
Very truly yours,
ITHAKA ACQUISITION CORP.
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By:________________________________
Xxxx X. Brooke, Chairman
By:________________________________
Xxxx X. Xxxxxx, Secretary
cc: EarlyBirdCapital, Inc.
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EXHIBIT B
[LETTERHEAD OF COMPANY]
[INSERT DATE]
Continental Stock Transfer
& Trust Company
00 Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn:
Re: TRUST ACCOUNT NO. 530- TERMINATION LETTER
Gentlemen:
Pursuant to paragraph 1(i) of the Investment Management Trust
Agreement between Ithaka Acquisition Corp. ("Company") and Continental Stock
Transfer & Trust Company ("Trustee"), dated as of ___________, 2005 ("Trust
Agreement"), this is to advise you that the Company has been unable to effect a
Business Combination with a Target Company within the time frame specified in
the Company's prospectus relating to its IPO.
In accordance with the terms of the Trust Agreement, we hereby
(a) certify to you that the provisions of Section 11-51-302(6) and Rule 51-3.4
of the Colorado Statute have been met and (b) authorize you, to commence
liquidation of the Trust Account. You will notify the Company and the paying
agent holding the Trust Account ("Designated Paying Agent") in writing as to
when all of the funds in the Trust Account will be available for immediate
transfer ("Transfer Date"). The Designated Paying Agent shall thereafter notify
you as to the account or accounts of the Designated Paying Agent that the funds
in the Trust Account should be transferred to on the Transfer Date so that the
Designated Paying Agent may commence distribution of such funds in accordance
with the Company's instructions. You shall have no obligation to oversee the
Designated Paying Agent's distribution of the funds. Upon the payment to the
Designated Paying Agent of all the funds in the Trust Account, the Trust
Agreement shall be terminated.
Very truly yours,
ITHAKA ACQUISITION CORP.
By:________________________________
Xxxx X. Brooke, Chairman
By:________________________________
Xxxx X. Xxxxxx, Secretary
cc: EarlyBirdCapital, Inc.
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EXHIBIT C
AUTHORIZED INDIVIDUAL(S) AUTHORIZED
FOR TELEPHONE CALL BACK TELEPHONE NUMBER(S)
COMPANY:
Ithaka Acquisition Corp.
000 Xxxxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxx X. Brooke, Chief Executive Officer (000) 000-0000
TRUSTEE:
Continental Stock Transfer
& Trust Company
00 Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxx, Chairman (000) 000-0000
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