Exhibit 10.9
INVESTMENT MANAGEMENT TRUST
AGREEMENT
This Agreement is made as of
, 2006 by and between Rhapsody 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, EarlyBirdCapital, Inc.
(“EBC”) 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, $34,150,000.40 of the gross proceeds
of the IPO and sale of the Insider Units (as defined in the
Registration Statement) ($39,278,250.40 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;
(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
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 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 record date established by the Company for such
purpose. The Company shall set the record date to be within ten
days of the Last Date, or as soon thereafter as reasonably
practicable and legally permissible. In all cases, the Trustee
shall provide EBC 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.
(j) Upon written request from the
Company, which may be given from time to time at any time after
, 2007 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 expenses related to investigating
and selecting a target business, income and other taxes and other
working capital requirements; provided, however, that (i) such
distribution shall be only from income collected on the Property
and (ii) the aggregate amount of all such distributions shall
not exceed $200,000.
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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
Chairman of the Board or President. In addition, except with
respect to its duties under paragraphs 1(i) and 1(j) 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 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
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.
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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 liabili
