Exhibit 10.2
INVESTMENT MANAGEMENT TRUST AGREEMENT
This Agreement is made as of _________ __, 2007 by and between
Inter-Atlantic Financial, Inc. (the "Company") and American Stock Transfer &
Trust Company (the "Trustee").
WHEREAS, the Company's Registration Statement on Form S-1, as amended, No.
333-_______ (together with any registration statement filed pursuant to Rule
462(b), the "Registration Statement"), for its initial public offering of
securities (the "IPO") has been declared effective as of ____________ __, 2007
by the Securities and Exchange Commission (the "Effective Date"); and
WHEREAS, Xxxxxx Xxxxxx & Co. Inc. ("Xxxxxx Xxxxxx") 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 Amended and Restated Certificate of Incorporation, $57,090,000 of
the net proceeds of the IPO and sale of the founders' warrants ($65,460,000 if
the underwriters' over-allotment option is exercised in full) after adjusting
for certain offering expenses, 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 $0.0001, issued in the IPO. 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 $1,200,000 (or $1,380,000 if
the underwriters' over-allotment option is exercised in full) attributable to
the underwriters' discount which Xxxxxx Xxxxxx has 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;
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 in segregated trust accounts (the "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 written instruction of the Company, to
invest and reinvest the Property in United States "government securities" and/or
in any open ended money market fund(s) selected by the Company meeting the
conditions of Sections (c)(2), (c)(3) and (c)(4) of 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 Xxxx 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 income, net of taxes, shall become part of the "Property,"
as such term is used herein; and the remaining income arising from the Property,
net of taxes, up to $1,000,000 may be released to the Company periodically to
fund its working capital requirements;
(e) Notify the Company and Xxxxxx Xxxxxx 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 Xxxxxx Xxxxxx in writing to do so;
(h) Render to the Company and to Xxxxxx Xxxxxx, 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 as determined by the Company, 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 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 income tax obligation; and
(j) 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 Chief Executive Officer or other
authorized officer, 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. Limited Distributions of Income From Trust Account.
(a) If there is any income or other tax obligation relating to the income
from the Property in the Trust Account as determined by the Company, then, at
the written instruction of the Company, the Trustee shall disburse to the
Company by wire transfer, out of the Property in the Trust Account, the amount
indicated by the Company as required to pay income taxes; and
(b) Upon written request from the Company in a form substantially similar
to that attached hereto as Exhibit C, which may be given not more than once in
any calendar quarter, the Trustee shall distribute to the Company by wire
transfer an amount equal to the income collected on the Property through the
last day of the calendar quarter immediately preceding the date of receipt of
the Company's request; provided, however, that the maximum amount of
distributions, net of taxes, that the Company may request and the Trustee shall
distribute pursuant to this Section 2(b) shall be $1,000,000. The first such
distribution shall include income through the first full calendar quarter
following the effective date of the IPO, with the Company's request made after
such date. It is understood that the Trustee's only responsibility under this
section is to follow the instruction of the Company; and
(c) Except as provided in Sections 2(a) and 2(b) above, no other
distributions from the Trust Account shall be permitted except in accordance
with Sections 1(i) and 1(j) hereof.
3. 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 other authorized officer. In addition,
except with respect to its duties under Section 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
Section, 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. The Company may
participate in such action with its own counsel; and
(c) Pay the Trustee an initial acceptance fee, an annual fee and a
transaction processing fee for each disbursement made pursuant to Sections 2(a)
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 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).
4. 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
Section 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 written
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, judgment, instruction, 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;
(h) As and to the extent requested from time to time by the Company,
prepare, execute and file such tax reports, income or other tax returns and pay
any taxes with respect to income and activities relating to the Trust Account,
regardless of whether such tax is payable by the Trust Account or the Company
(including but not limited to income tax obligations), it being expressly
understood that as set forth in Section 1(i), if there is any income or other
tax obligation relating to the Trust Account or the Property in the Trust
Account, as determined from time to
time by the Company and regardless of whether such tax is payable by the Company
or the Trust, at the written instruction of the Company, the Trustee shall make
funds available in cash from the Property in the Trust Account an amount
specified by the Company as owing to the applicable taxing authority, which
amount shall be paid directly to the Company by electronic funds transfer,
account debit or other method of payment, and the Company shall forward such
payment to the taxing authority; and
(i) Verify calculations, qualify or otherwise approve Company requests for
distributions pursuant to Sections 1(i), 2(a) or 2(b) above.
5. 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; or
(b) At such time that the Trustee has completed the liquidation of the
Trust Account in accordance with the provisions of Section 1(j) 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).
6. 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. 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.
(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 Xxxxxx Xxxxxx. Any
other change, waiver, amendment or modification to this Agreement shall be
subject to approval by a majority of the Public Stockholders. 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:
if to the Trustee, to:
American Stock Transfer & Trust Company
00 Xxxxxx Xxxx
Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxx, Vice President
Fax No.: 000-000-0000
if to the Company, to:
Inter-Atlantic Financial, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxx, CEO
Fax No.: [_____________]
in either case with a copy to:
Xxxxxxxx & Xxxxxxxx LLP
1290 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxx Xxxxxxx, Esq.
Fax: (000) 000-0000
and
Xxxxxx Xxxxxx & Co. Inc.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxx
Fax No.: (000) 000-0000
and
DLA Piper US LLP
1251 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxxxx Xxxxxx, Esq.
Fax No.: (000) 000-0000
(f) This Agreement may not be assigned by the Trustee without the prior
written consent of the Company and Xxxxxx Xxxxxx. This Agreement may be assigned
by the Company to a wholly-owned subsidiary of the Company upon written notice
to the Trustee.
(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 part of
the Property under any circumstance.
(h) The Trustee hereby consents to the inclusion of American Stock Transfer
& Trust Company in the Registration Statement and other materials relating to
the IPO.
[Signatures appear on following page]
7
IN WITNESS WHEREOF, the parties have duly executed this Investment
Management Trust Agreement as of the date first written above.
AMERICAN STOCK TRANSFER & TRUST COMPANY,
as Trustee
By:
------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
INTER-ATLANTIC FINANCIAL, INC.
By:
------------------------------------
Name: Xxxxxx Xxxxxx
Title: Chief Executive Officer
[Signature Page to Investment Management Trust Agreement]
EXHIBIT A
[LETTERHEAD OF COMPANY]
[INSERT DATE]
American Stock Transfer & Trust Company
00 Xxxxxx Xxxx
Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxx, Vice President
Re: Trust Account No. [___] Termination Letter
Gentlemen:
Pursuant to Section 1(i) of the Investment Management Trust Agreement
between Inter-Atlantic Financial, Inc. (the "Company") and American 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 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 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, (a) to public stockholders who exercised their conversion
rights in connection with the consummation of the Business Combination in an
amount equal to their pro rata share of the amounts in Trust as of two business
days prior to the consummation of the Consummation Date (including the deferred
discount and any income actually received on the Trust balance and held in
Trust, but less an amount equal to estimated taxes that are or will be due on
such income at an assumed rate of 40%); (b) to Xxxxxx Xxxxxx in an amount equal
to the deferred discount as directed by them; and (c) the remainder 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,
INTER-ATLANTIC FINANCIAL, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT B
[LETTERHEAD OF COMPANY]
[INSERT DATE]
American Stock Transfer & Trust Company
00 Xxxxxx Xxxx
Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxx, Vice President
Re Trust Account No. [___] Termination Letter
Gentlemen:
Pursuant to Section 1(i) of the Investment Management Trust Agreement
between Inter-Atlantic Fianncial, Inc. (the "Company") and American Stock
Transfer & Trust Company (the "Trustee"), dated as of __________ __, 2007 (the
"Trust Agreement"), this is to advise you that Company has been dissolved due to
the Company's inability to effect a Business Combination within the time frame
specified in the Company's prospectus relating to its IPO. Attached hereto is a
certified copy of the Certificate of Dissolution as filed with the Delaware
Secretary of State.
In accordance with the terms of the Trust Agreement, we hereby authorize
you to commence liquidation of the Trust Account. You will notify the Company
and [___] (the "Designated Paying Agent") in writing as to when all of the funds
in the Trust Account will be available for immediate transfer (the "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
terminate in accordance with the terms thereof.
Very truly yours,
INTER-ATLANTIC FINANCIAL, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT C
[LETTERHEAD OF COMPANY]
[INSERT DATE]
American Stock Transfer & Trust Company
American Stock Transfer & Trust Company
00 Xxxxxx Xxxx
Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxx, Vice President
Re Trust Account No. [___] - Distribution of Income on Property
Gentlemen:
Pursuant to Section 2(b) of the Investment Management Trust Agreement
between Inter-Atlantic Financial, Inc. (the "Company") and American Stock
Transfer & Trust Company (the "Trustee"), dated as of ___________ __, 2007 (the
"Trust Agreement"), we are requesting for our working capital purposes that you
deliver to us $___ representing income earned on the Property from ___ to ___.
In accordance with the terms of the Trust Agreement, you are hereby directed and
authorized to transfer said amount, less any fees due the Trustee pursuant to
Section 3(c) of the Trust Agreement, immediately upon your receipt of this
letter to the Company's operating account at:
Bank: [_________]
ABA #: [_________]
Account Name: [_________]
Account Number: [_________]
Reference: Distribution of Income Earned on Trust Property
Very truly yours,
INTER-ATLANTIC FINANCIAL, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT C
AUTHORIZED INDIVIDUAL(S) AUTHORIZED
FOR TELEPHONE CALL BACK TELEPHONE NUMBER(S)
------------------------ -------------------
COMPANY:
Inter-Atlantic Financial, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000 (000) 000-0000
Attn: Xxxxxx Xxxxxx, Chief Financial Officer
TRUSTEE:
American Stock Transfer & Trust Company
00 Xxxxxx Xxxx
Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxx, Vice President (000) 000-0000
SCHEDULE A
SCHEDULE OF FEES PURSUANT TO SECTION 3(C) OF INVESTMENT MANAGEMENT TRUST
AGREEMENT BETWEEN INTER-ATLANTIC FINANCIAL, INC. AND
AMERICAN STOCK TRANSFER & TRUST COMPANY
American Stock Transfer & Trust Company will provide Inter-Atlantic Financial,
Inc. with the following services:
Transfer Agent Services $1,000.00 per month (flat monthly fee)
Warrant Agent Services $2,500.00 one-time fee per transaction
Trustee Services $3,000.00 one-time fee per transaction
Escrow Services $3,000.00 one-time fee per transaction
Closing Fee $3,500.00 one-time fee per transaction
Dated: , 2007 Agreed:
------------ --
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Authorized Officer
American Stock Transfer & Trust Co.
