INVESTMENT MANAGEMENT TRUST AGREEMENT
This Agreement is made as of _________, 2005 by and between
Star
Maritime 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, Maxim Group LLC ("Maxim") 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, $___________ of
the net proceeds of the IPO ($___________
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 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 Maxim of all communications received
by
it with respect to any Property requiring
action by the Company;
<PAGE>
(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 Maxim to
do so;
(h) Render to the Company and to Maxim, 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 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 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 $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).
2
<PAGE>
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;
(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
