INVESTMENT MANAGEMENT TRUST
AGREEMENT
This Agreement
is made as of _____________, 2006 by and between Alyst Acquisition
Corp. (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 (“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, Jesup
& Lamont Securities Corporation (“JLSC”) 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, $54,955,000 of the
gross proceeds of the IPO and sale of the Insider Units (as defined
in the Registration Statement) ($63,198,250 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, 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;
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;
(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
United States “government securities” within the
meaning of Section 2(a)(16) of the Investment Company Act of 1940
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 its returns;
(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 JLSC,
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 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 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. In all cases, the Trustee shall provide
JLSC 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.
2.
Limited Distributions of Income
from Trust Account .
(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;
(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 $1,680,000.
(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
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
Chairman of the Board or President. In addition, except with
respect to its duties under paragraphs 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 Trustee may
not agree to settle any Indemnified Claim without the prior written
consent of the Company unless such settlement includes a full
release of the Company with respect to such Indemnified Claim. 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);
(d)
Provide to the Trustee any letter
of intent, agreement in principle or definitive agreement for a
Business Combination that is executed on or prior to the First
Date; and
(e)
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.
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 paragraphs 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
paragraph 1(c);
