EXHIBIT 10.10
INVESTMENT MANAGEMENT TRUST AGREEMENT
This Agreement is made as of _____________, 2005 by and between KBL
Healthcare Acquisition Corp. II (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, EarlyBirdCapital, Inc. ("EBC") 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,
$25,900,000 of the
gross proceeds of the IPO ($30,085,000 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 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 the
Colorado 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 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 to do so;
(h) Render to the Company and to EBC, 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 President or Chairman of the
Board and
Secretary or Assistant 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 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
2
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).
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 Trust
