INVESTMENT MANAGEMENT TRUST AGREEMENT
This Agreement is made as of _____, 2005 by and
between Vector
Intersect Security Acquisition Corp. (the "Company") and American
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, Rodman & Renshaw, LLC ("Rodman") is
acting as the
representative of the underwriters in the IPO; and
WHEREAS, as described in the Company's
Registration Statement,
and in accordance with the Company's Certificate of Incorporation,
$138,375,000
of the net proceeds of the IPO ($159,131,250 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 issued in the IPO and in the event the
Units are
registered in Colorado, pursuant to Section 11-51-302(6) of the
Colorado Revised
Statutes, a copy of which statute is attached hereto and made a
part hereof. 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, including the terms of
Section
11-51-302(6) of the Colorado Statute, in a segregated trust account
("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 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 and Rodman 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 Rodman to do so;
(h) Render to the Company and to Rodman, 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) Upon written instructions from the
Company, deliver to
the Company, on a quarterly basis, from the Property in the Trust
Account, an
amount equal to the taxes payable by the Company, if any, relating
to interest
earned on the Property; and
(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
Chief Executive
Officer or Chairman of the Board and Secretary and affirmed by its
entire Board
of Directors, 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 _______ ___,
2007 (or the
date that is the six month anniversary of such date, in the event
that a letter
of intent, agreement in principle or definitive agreement has been
executed
prior to such date in connection with a Business Combination (as
defined in the
Termination Letter attached hereto as Exhibit A) that was not
consummated by
_______ ___, 2007), the Trust Account shall be liquidated in
accordance with the
procedures set forth in the Termination Letter attached as Exhibit
B to the
stockholders of record on the record date; provided, further, that
the record
date shall be within ten (10) days of _______ ___, 2007 (or the
date that is the
six month anniversary of such date, in the event that a letter of
intent,
agreement in principle or definitive agreement has been executed
prior to such
date in connection with a Business Combination that was not
consummated by
_______ ___, 2007), or as soon thereafter as is practicable.
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 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
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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
of $1,000 and
an annual fee of $3,000 (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);
(d) Provide to the Trustee any letter of
intent, agreement
in principle or definitive agreement that is executed prior to
_______ ___, 2007
in connection with a Business Combination; 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 tabulating stockholder votes (which firm may
be the
Trustee) verifying the vote of the Company's stockholders regarding
such
Business Combination.
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;
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(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
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