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INVESTMENT MANAGEMENT TRUST AGREEMENT

Investment Management Trust Agreement

INVESTMENT MANAGEMENT TRUST AGREEMENT | Document Parties: ARCADE ACQUISITION CORP. | Continental Stock Transfer & Trust Company You are currently viewing:
This Investment Management Trust Agreement involves

ARCADE ACQUISITION CORP. | Continental Stock Transfer & Trust Company

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Title: INVESTMENT MANAGEMENT TRUST AGREEMENT
Governing Law: New York     Date: 2/21/2007
Law Firm: Kramer Levin Naftalis & Frankel LLP;Loeb & Loeb LLP    

INVESTMENT MANAGEMENT TRUST AGREEMENT, Parties: arcade acquisition corp. , continental stock transfer & trust company
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Exhibit 10.2

INVESTMENT MANAGEMENT TRUST AGREEMENT

This Agreement is made as of              , 2007 by and between Arcade Acquisition Corp. (the “Company”) and Continental Stock Transfer & Trust Company (“Trustee”).

WHEREAS, the Company’s Registration Statement on Form S-1, No. 333-              (as amended from time to time) (“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, Morgan Joseph & Co. Inc. is acting as the representative (the “Representative”) of the underwriters in the IPO; and

WHEREAS, the Company has agreed to issue securities in a private placement that will occur immediately prior to the IPO (the “Placement”); and

WHEREAS, as described in the Company’s Registration Statement, and in accordance with the Company’s Certificate of Incorporation, $                  of the proceeds of the IPO, net of all discounts and commissions including the Deferred Compensation (as defined below) and expenses 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 (the “Trust Account”) for the benefit of the Company and the holder’s 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 (the “CRS”). A copy of Section 11-51-302(6) of the CRS is attached hereto and made a part hereof; and

WHEREAS, pursuant to the Warrant Purchase Agreement, dated as of                  , 2007, among the Company and certain purchasers, the entire proceeds of the private placement of warrants with the Company’s purchasers, equal to $2,000,000, will be delivered to the Trustee to be deposited in the Trust Account; and

WHEREAS, pursuant to the Underwriting Agreement, an additional $1,000,000, (or the amount specified in the notice delivered pursuant to Section 2(d) hereof), representing a portion of the underwriters’ discount (the “Deferred Compensation”) which the Representative, on behalf of the underwriters, has agreed to deposit into the Trust Account; and

WHEREAS, the amount to be delivered to the Trustee, including the proceeds of the IPO and the private placement and the Deferred Compensation, 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, the Representative and the Company will be referred to together as the “Beneficiaries;” and 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; and

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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 without limitation, the terms of Section 11-51-302(6) of the CRS, in segregated trust accounts established by the Trustee at JPMorgan Chase N.A. [and at Morgan Stanley];

(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 180 days or less or any open ended investment company selected by the Company and registered under the Investment Company Act of 1940 that holds itself out as a money market fund meeting the conditions of paragraphs (c)(2), (c)(3) and (c)(4) under Rule 2a-7 promulgated under the Investment 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 and the Representative 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 tax 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 and/or the Representative to do so;

(h)           Render to the Company and to the Representative, 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)            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

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(j)            Commence liquidation of the Trust Account 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, signed on behalf of the Company by its (i) Chief Executive Officer or Chairman of the Board and (ii) Chief Financial Officer and complete the liquidation of the Trust Account and disburse the Property in the Trust Account (which disbursement shall include, in the event of a Business Combination, payment of the Deferred Compensation to the Representative) only as directed in the Termination Letter and the other documents referred to therein; provided, however, that in the event a Termination Letter has not been received by the 24-month anniversary of the effective date of the Registration Statement (the “Last Date”), the Trust Account shall be liquidated in accordance with the procedures set forth in the Termination Letter attached hereto as Exhibit B to the stockholders of record on the Last Date.  In all cases, the Trustee shall provide the Representative 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.  The Trustee understands and agrees that, except as provided in paragraphs 1(i), 1(k) and 6(a) hereof, disbursements from the Trust Account shall be made only pursuant to a duly executed Termination Letter, together with the other documents referenced herein; and

(k)           Upon one or more written requests from the Company, which may be given not more than once in any calendar month period, the Trustee shall distribute to the Company interest earned on the Trust Account, net of taxes payable, up to a maximum of $2,000,000. The distributions requested by the Company may be for any amount, provided that (i) in the aggregate, all distributions under this Section 1(k) may not exceed $2,000,000 (subject to the limitation imposed by Section (1)(l) below and (ii) that such distributions may only be made if and to the extent that interest has been earned, net of taxes, on the amount initially deposited into the Trust Account; and

(l)            Permit or effect no distribution from the Trust Account except in accordance with Sections 1(i), 1(j) and 1(k).

2.             Agreements and Covenants of the Company . The Company hereby agrees and covenants to:

(a)           Provide all instructions to the Trustee hereunder in writing, signed by the Company’s Chief Executive Officer, President, Chairman of the Board or Chief Financial 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)           Subject to the provisions of Section 4 hereof, 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

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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. 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 Sections 1(i) and 1(k) 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 1(k). The Company shall pay the Trustee the initial acceptance fee and first year’s fee at the consummation of the IPO and shall thereafter pay the annual fee 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 Account. The Company shall not be responsible for any other fees or charges of the Trustee except as set forth in this Section 2(c) and as may be provided in Section 2(b) hereof (it being expressly understood that the Property shall not be used to make any payments to the Trustee under such Section);

(d)           Within five business days after the Representative’s over-allotment option (or any unexercised portion thereof) expires or is exercised in full, provide the Trustee notice in writing (with a copy to the Representative) of the total amount of the Deferred Compensation, which shall in no event be less than $1,000,000;

(e)           Provide to the Trustee any letter of intent, agreement in principle or definitive agreement that is executed in connection with a Business Combination, together with a certified copy of a unanimous resolution of the Board of Directors of the Company affirming that such


 
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