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EXHIBIT 10.3
FORM OF INVESTMENT MANAGEMENT TRUST AGREEMENT
This Agreement
is made as of June __, 2005 by and between Harbor
Acquisition Corporation (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, Ferris,
Baker Watts, Incorporated ("FBW") is acting as the lead
underwriter in the IPO; and
WHEREAS, as
described in the Company's Registration Statement, and in
accordance with the Company's Certificate
of Incorporation, $__________________
of the gross proceeds of the IPO
($_______________ 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 $0.0001 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, 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 a
segregated trust account ("TRUST
ACCOUNT") established by the Trustee at a
branch of Mellon Bank selected by the
Company;
(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) 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 and/ or FBW to do so;
(h) Render to the
Company and to FBW, 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
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(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
Chairman of the Board 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,
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
Company may participate in such action
with its own counsel; and
(c) Pay the Trustee an
initial acceptance fee of [$_____] and an
annual fee of [$______] (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;
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(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 misc
