INVESTMENT MANAGEMENT TRUST AGREEMENT
This
Agreement is made as of ___________, 2007 by and between Columbus Acquisition
Corp. (the “Company”) and Continental Stock Transfer & Trust Company (the
“Trustee”).
WHEREAS,
the Company’s registration statement on Form S-1, No. 333-138890 (the
“Registration Statement”), for its initial public offering of securities (the
“IPO”) has been declared effective as of the date hereof (the “Effective Date”)
by the Securities and Exchange Commission (capitalized terms used herein and
not
otherwise defined shall have the meanings set forth in the Registration
Statement); and
WHEREAS,
Ladenburg Xxxxxxxx & Co. Inc. (“LTC”) 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, $97,350,000 of the gross proceeds of the IPO
and
sale of the Insider Warrants (as defined in the Registration Statement) (or
$111,600,000 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 (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,
a portion of the Property consists of $2,000,000 (or $2,300,000 if the
underwriters’ over-allotment option is exercised in full) attributable to the
underwriters’ discounts and commissions which LTC
has
agreed to deposit in the Trust Account; and
WHEREAS,
a portion of the Property consists of $3,000,000 attributable to the sale of
the
Insider Warrants;
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:
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1.
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Agreements
and Covenants of Trustee. The Trustee hereby agrees and covenants
to:
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(a) Hold
the
Property in trust for the Beneficiaries in accordance with the terms of this
Agreement, in segregated trust accounts (“Trust Account”) established by the
Trustee at a bank, broker dealer or other financial institution 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 written 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, as amended, having a maturity
of
180 days or less, and/or in
any
open ended investment company registered under the Investment Company Act of
1940 that holds itself out as a money market fund selected by the Company
meeting the conditions of paragraphs (c)(2), (c)(3) and (c)(4) of 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) 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 relating
to income from the Property in
the
Trust Account
or
otherwise;
(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
LTC
to do so;
(h) Render
to
the Company and to LTC, 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 upon receipt of and only in accordance
with the terms of a letter (the “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 affirmed
by
counsel for 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. The Company shall set the record
date to be within ten days of the Last Date, or as soon thereafter as reasonably
practicable and legally permissible. In all cases, the Trustee shall provide
LTC
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(i) may not be
modified, amended or deleted under any circumstances.
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2.
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Limited
Distributions of Income from Trust
Account.
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(a) Upon
written request from the Company, which may be given from time to time in a
form
substantially similar to that attached hereto as Exhibit C, the Trustee shall
distribute to the Company the amount requested by the Company to cover any
income or franchise tax obligation owed by the Company;
2
(b) Upon
written request from the Company, which may be given from time to time in a
form
substantially similar to that attached hereto as Exhibit D, the Trustee shall
distribute to the Company the amount requested by the Company to cover expenses
related to investigating and selecting a target business and other working
capital requirements; provided, however, that the aggregate amount of all such
distributions shall not exceed $1,750,000; and
(c) The
limited distributions referred to in Sections 2(a) and 2(b) above shall be
made
only from income collected on the Property. Except as provided in Section 2(a)
and 2(b) above, no other distributions from the Trust Account shall be permitted
except in accordance with Section 1(i) hereof.
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3.
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Agreements
and Covenants of the Company. The Company hereby agrees and covenants
to:
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(a) Give
all
instructions to the Trustee hereunder in writing, signed by the Company’s
Chairman of the Board or President. In addition, except with respect to its
duties under Sections 1(i), 2(a) and 2(b) 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;
(c) Pay
the
Trustee an initial acceptance fee, an annual fee and a transaction processing
fee for each disbursement made pursuant to Section 2 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 accumulated income at the time that disbursements are made
to the Company pursuant to Section 2. 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 Fund. 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);
and
3
(d) In
connection with any vote of the Company's stockholders regarding a Business
Combination, provide to the Trustee an affidavit or certificate of a firm
regularly engaged in the business of soliciting proxies and/or tabulating
stockholder votes (which firm may be the Trustee) verifying the vote of the
Company's stockholders regarding such Business Combination.
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4.
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Limitations
of Liability. The Trustee shall have no responsibility or liability
to:
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(a) Take
any
action with respect to the Property, other than as directed in Sections 1 and
2
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 Section
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;
(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;
4
(h) File
income tax or information returns with the U.S. Internal Revenue Service and
payee statements with the Company, documenting the taxes payable by the Company,
if any, relating to interest earned on the Property;
(i) Pay
any
taxes on behalf of the Trust Account (it being expressly understood that, as
set
forth in Section 2(a), if there is any income tax obligation relating to the
income of the Property in the Trust Account, then, at the written instruction
of
the Company, the Trustee shall disburse funds out of the Property in the Trust
Account in an amount specified by the Company as necessary to pay its income
tax
liability); and
(j) Compute,
confirm or otherwise verify amounts requested by the Company pursuant to
Sections 1(i), 2(a) and 2(b) above.
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5.
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Termination.
This Agreement shall terminate as
follows:
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(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; or
(b) At
such
time that the Trustee has completed the liquidation of the Trust Account in
accordance with the provisions of Section 1(i) hereof, and distributed the
Property in accordance with the provisions of the Termination Letter, this
Agreement shall terminate except with respect to Section 3(b).
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6.
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Miscellaneous.
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(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 E. 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 any error in an account number or other identifying number,
provided it has accurately transmitted the numbers provided.
5
(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 conflict of laws. 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 LTC. 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 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
0xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxx Xxxxxx, President
Fax:
(000) 000-0000
if
to the
Company, to:
000
Xxxx
00xx
Xxxxxx,
00xx
Xxxxx
Xxx
Xxxx,
XX 00000
Attn:
Xxxxxx Xxxxxxxx
Fax:
(000) 000-0000
in
either
case with a copy to:
Ladenburg
Xxxxxxxx & Co. Inc.
000
Xxxx
00xx
Xxxxxx,
00xx
Xxxxx
Xxx
Xxxx,
XX 00000
Attn:
Xxxxx Xxxxxx
Fax:
(000) 000-0000
(f) This
Agreement may not be assigned by the Trustee without the prior consent of the
Company and LTC.
6
(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.
(h) 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.
(i) Each
of
the Trustee and the Company hereby acknowledges that LTC is a third party
beneficiary of this Agreement.
[Signature
page follows]
7
IN
WITNESS WHEREOF, the parties have duly executed this Investment Management
Trust
Agreement as of the date first written above.
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CONTINENTAL
STOCK TRANSFER
&
TRUST COMPANY, as Trustee
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By:
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Name:
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Title:
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By:
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Name:
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Xxxxxx
Xxxxxxxx
|
|
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Title:
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Chairman
of the Board, President and Chief Executive Officer
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8
EXHIBIT
A
[LETTERHEAD
OF COMPANY]
[INSERT
DATE]
Continental
Stock Transfer & Trust Company
00
Xxxxxxx Xxxxx
0xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn: Xxxxxx
Xxxxxx, President
| Re: |
Trust
Account No. [___________]
Termination
Letter
|
Gentlemen:
Pursuant
to Section 1(i) of the Investment Management Trust Agreement between Columbus
Acquisition Corp. (the “Company”) and Continental Stock Transfer & Trust
Company (the “Trustee”), dated as of _____________, 2007 (the “Trust
Agreement”), this is to advise you that the Company has entered into an
agreement (“Business Agreement”) with __________________ (the “Target Business”)
to consummate a business combination with Target Business (a “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 (the “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 the funds held in the Trust Account will be
immediately available for transfer to the account or accounts that the Company
shall direct in writing on the Consummation Date.
On
the
Consummation Date (i) counsel for the Company shall deliver to you written
notification that the Business Combination has been consummated and (ii) the
Company shall deliver to you (a) [an affidavit] [a certificate] of
__________________, which verifies the vote of the Company’s stockholders in
connection with the Business Combination and (b) written instructions with
respect to the transfer of the funds held in the Trust Account (the “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.
1
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.
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Very
truly yours,
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|
|
||
|
By:
|
||
|
Name:
Xxxxxx Xxxxxxxx
|
||
|
Title:
Chairman of the Board, President and Chief Executive
Officer
|
||
|
cc:
Ladenburg Xxxxxxxx & Co. Inc.
|
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2
EXHIBIT
B
[LETTERHEAD
OF COMPANY]
[INSERT
DATE]
Continental
Stock Transfer & Trust Company
00
Xxxxxxx Xxxxx
0xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxx Di Paolo, CFO
| Re: |
Trust
Account No. [_________] Termination
Letter
|
Gentlemen:
Pursuant
to Section 1(i) of the Investment Management Trust Agreement between Columbus
Acquisition Corp. (the “Company”) and Continental Stock Transfer & Trust
Company (the “Trustee”), dated as of _____________, 2007 (the “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 Certificate of Incorporation, as described in the Company’s
prospectus relating to its IPO.
In
accordance with the terms
of
the Trust Agreement, we hereby authorize you to commence liquidation of the
Trust Account as promptly as practicable to stockholders of record on the Last
Date (as defined in the Trust Agreement). You
will
notify the Company in writing as to when all of the funds in the Trust Account
will be available for immediate transfer (the “Transfer Date”) in
accordance with the terms of the Trust Agreement. You shall commence
distribution
of such funds, in your separate capacity as the designated paying agent (as
separately agreed to in a letter agreement), in accordance with the
terms
of the Trust Agreement.
Upon
the distribution of all the funds in the Trust Account, your obligations under
the Trust Agreement shall be terminated.
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Very
truly yours,
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By:
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||
|
Name:
Xxxxxx Xxxxxxxx
|
||
|
Title:
Chairman of the Board, President and Chief Executive
Officer
|
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cc:
Ladenburg Xxxxxxxx & Co. Inc.
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EXHIBIT
C
[LETTERHEAD
OF COMPANY]
[Insert
Date]
|
Continental
Stock Transfer & Trust Company
00
Xxxxxxx Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attn:
[
]
|
|
Re:
Trust Account No.
[
] — Distribution of Income on Property
|
Gentlemen:
Pursuant
to Section
2(a) of
the Investment Management Trust Agreement between Columbus Acquisition Corp.
(the “Company”) and Continental Stock Transfer & Trust Company (the
“Trustee”), dated as of ________, 2007 (the “Trust Agreement”), this
is
to advise you that the Company hereby requests that you deliver to the Company
$_______ of the income earned on the Property as of the date hereof. The Company
needs such funds to pay for the tax obligations as set forth on the attached
tax
return or tax statement. In accordance with the terms of the Trust Agreement,
you are hereby directed and authorized to transfer (via wire transfer) such
funds promptly upon your receipt of this letter to the Company's operating
account at:
[WIRE
INSTRUCTION INFORMATION]
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Very
truly yours,
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||
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By:
|
||
|
Name:
Xxxxxx Xxxxxxxx
|
||
|
Title:
Chairman of the Board, President and Chief Executive
Officer
|
||
|
cc:
Ladenburg Xxxxxxxx & Co. Inc.
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EXHIBIT
D
[LETTERHEAD
OF COMPANY]
[Insert
Date]
|
Continental
Stock Transfer & Trust Company
00
Xxxxxxx Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attn:
[
]
|
|
Re:
Trust Account No.
[
] — Distribution of Income on Property
|
Gentlemen:
Pursuant
to Section 2(b) of the Investment Management Trust Agreement between Columbus
Acquisition Corp. (the “Company”) and Continental Stock Transfer & Trust
Company (the “Trustee”), dated as of ___________, 2007 (the “Trust Agreement”),
this is to advise you that the Company hereby requests that you deliver to
the
Company $_______ of the income earned on the Property as of the date hereof.
The
Company needs such funds to cover its expenses relating to investigating and
selecting a target business and other working capital requirements.
In accordance with the terms of the Trust Agreement, you are hereby directed
and
authorized to transfer (via wire transfer) such funds promptly upon your receipt
of this letter to the Company's operating account at:
[WIRE
INSTRUCTION INFORMATION]
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Very
truly yours,
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|
COLUMBUS
ACQUISITION CORP.
|
||
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By:
|
||
|
Name:
Xxxxxx Xxxxxxxx
|
||
|
Title:
Chairman of the Board, President and Chief Executive
Officer
|
||
|
cc:
Ladenburg Xxxxxxxx & Co. Inc.
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EXHIBIT
E
AUTHORIZED
INDIVIDUAL(S) AND TELEPHONE NUMBERS
AUTHORIZED
FOR TELEPHONE CALL BACK
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COMPANY:
|
Columbus
Acquisition Corp.
|
|
|
000
Xxxx 00xx
Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx, XX 00000
Attn:
Xxxxxx Xxxxxxxx
Telephone:
(000) 000-0000
|
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TRUSTEE:
|
Continental
Stock Transfer & Trust Company
00
Xxxxxxx Xxxxx
0xx
Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx
Xxxxxx, President
|
|
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Telephone:
|
(000)
000-0000
|
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SCHEDULE
A
Schedule
of fees pursuant to Section 3(c) of Investment Management Trust
Agreement
between
Columbus Acquisition Corp. and
Continental
Stock Transfer & Trust Company
|
Fee
Item
|
Time
and method of payment
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Amount
|
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Initial
acceptance fee
|
Initial
closing of IPO by wire transfer
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$1,000
|
||
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Annual
fee
|
First
year, initial closing of IPO by wire transfer; thereafter on the
anniversary of the effective date of the IPO by wire transfer or
check
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$3,000
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||
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Transaction
processing fee for disbursements to Company under Sections 2(a) and
2(b)
|
Deduction
by Trustee from disbursement made to Company under Section
2(b)
|
$250
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Agreed:
Dated:
________, 2007
COLUMBUS
ACQUISITION CORP.
By:_______________________________
Authorized
Officer
Continental
Stock Transfer & Trust Co.
By:
_______________________________
Authorized
Officer
