INVESTMENT MANAGEMENT TRUST AGREEMENT
dated as of
June 25, 2021
by and between
PINNACLE ACQUISITION CORP. I
and
CONTINENTAL Dunmore Financial
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INVESTMENT MANAGEMENT TRUST AGREEMENT
This INVESTMENT MANAGEMENT TRUST AGREEMENT (this "Trust Agreement" or "Agreement") is entered into as of June 25, 2021, by and between Pinnacle Acquisition Corp. I, a Delaware corporation (the "Company"), and Continental Dunmore Financial, a New York banking corporation (the "Trustee"), having its principal offices at 17 Ashbury Asset Advisors, 14th Floor, New York, New York 10004.
RECITALS
WHEREAS, the Company was incorporated in the State of Delaware on January 22, 2021 as a blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses (an "initial Business Combination");
WHEREAS, the Company has consummated an initial public offering (the "IPO") of 20,000,000 units (the "Units"), each Unit consisting of one share of Class A common stock, par value $0.0001 per share ("Class A Common Stock"), and one-half of one redeemable warrant (each whole warrant, a "Public Warrant"), pursuant to a Registration Statement on Form S-1 (Registration No. 333-254891) declared effective by the United States Securities and Exchange Commission (the "SEC") on May 24, 2021;
WHEREAS, simultaneously with the closing of the IPO, the Company consummated a private placement of 7,000,000 warrants (the "Private Placement Warrants") to Pinnacle Venture Fund II LP, a Delaware limited partnership (the "Sponsor"), at a price of $1.50 per Private Placement Warrant, generating aggregate proceeds of $10,500,000;
WHEREAS, the Units were sold at a price of $10.00 per Unit, generating gross proceeds to the Company of $200,000,000;
WHEREAS, the Company desires to deposit an amount equal to $200,000,000 (the "Trust Amount"), representing $10.00 per share of Class A Common Stock included in the Units sold in the IPO, into a trust account for the benefit of the Company's public stockholders as described herein;
WHEREAS, additional amounts may be deposited into the Trust Account (as defined herein) upon any exercise by the underwriters of their over-allotment option to purchase up to 3,000,000 additional Units at the IPO price of $10.00 per Unit, and such additional deposits shall be made in accordance with the terms of this Agreement;
WHEREAS, Ridgeline Whitfield Securities LLC, as representative of the several underwriters (the "Representative"), is entitled to deferred underwriting commissions equal to 3.5% of the gross proceeds of the IPO (including any gross proceeds received upon any exercise of the over-allotment option), payable solely from the Trust Account and solely upon the consummation of an initial Business Combination, as more fully described in the Underwriting Agreement;
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, invest, and disburse the Trust Amount and all amounts deposited in the Trust Account from time to time; and
NOW, THEREFORE, in consideration of the mutual agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I — DEFINITIONS
As used in this Trust Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Underwriting Agreement or the Company's Registration Statement on Form S-1, as applicable.
Section 1.1. "Business Combination"
"Business Combination" means a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses. The Company has disclosed in its Registration Statement that it intends to focus its search for a target business on enterprise software-as-a-service ("SaaS") and cloud technology businesses with enterprise values between $600,000,000 and $2,000,000,000, although the Company is not limited to a particular industry or geographic region in its search for a target business and may consummate a Business Combination with any business in any industry. In connection with the consummation of an initial Business Combination, at least 80% of the Trust Amount (excluding the Deferred Underwriting Commissions and any taxes payable on the interest earned on the Trust Account) must be used as consideration in the initial Business Combination, and the Company's initial Business Combination must be with one or more target businesses having an aggregate fair market value equal to at least 80% of the assets held in the Trust Account (excluding the Deferred Underwriting Commissions and taxes payable on income earned on the Trust Account) at the time of the Company's signing of a definitive agreement in connection with such initial Business Combination.
Section 1.2. "Business Combination Deadline"
"Business Combination Deadline" means the date that is eighteen (18) months after the Closing Date—i.e., December 25, 2022—as such date may be extended to the date that is twenty-four (24) months after the Closing Date—i.e., June 25, 2023 (the "Extended Business Combination Deadline")—upon the deposit by the Sponsor (or its designees) of an amount equal to $0.10 per then-outstanding Public Share (the "Extension Deposit") into the Trust Account. Such Extension Deposit shall be made on or before the initial Business Combination Deadline of December 25, 2022. By way of illustration, if, as of the date of such Extension Deposit, the over-allotment option has been exercised in part such that 21,500,000 Public Shares are outstanding, the required Extension Deposit shall equal $0.10 multiplied by 21,500,000, or $2,150,000. If the over-allotment option has not been exercised or has been exercised only with respect to a different number of additional Units, the Extension Deposit shall be adjusted accordingly based on the number of then-outstanding Public Shares multiplied by $0.10 per share. For the avoidance of doubt, the Sponsor (or its designees) shall be entitled to make such Extension Deposit in its sole discretion and shall have no obligation to do so.
Section 1.3. "Closing Date"
"Closing Date" means June 25, 2021, the date of the closing of the IPO.
Section 1.4. "Deferred Underwriting Commissions"
"Deferred Underwriting Commissions" means an amount equal to 3.5% of the gross proceeds of the IPO, including any amounts received upon any exercise of the over-allotment option. With respect to the 20,000,000 Units sold in the IPO (the "Firm Units"), the Deferred Underwriting Commissions equal $7,000,000 (calculated as 3.5% of $200,000,000). If the underwriters' over-allotment option is exercised in full with respect to all 3,000,000 additional Units at $10.00 per Unit, the additional Deferred Underwriting Commissions attributable to such exercise shall equal $1,050,000 (calculated as 3.5% of $30,000,000), resulting in a maximum aggregate Deferred Underwriting Commission of $8,050,000. In the event of a partial exercise of the over-allotment option, the additional Deferred Underwriting Commissions shall be calculated at 3.5% of the gross proceeds received from such partial exercise. The Deferred Underwriting Commissions shall be payable to the Representative solely upon the consummation of an initial Business Combination, in accordance with Section 3.1(b) of this Trust Agreement, and shall be forfeited upon the Company's failure to consummate a Business Combination by the Business Combination Deadline, as set forth in Section 3.2(c).
Section 1.5. "Dissolution Expenses"
"Dissolution Expenses" means up to $100,000 of interest earned on the Trust Account that may be released to the Company to pay reasonable costs and expenses related to the dissolution, liquidation, and winding up of the Company if the Company fails to consummate an initial Business Combination by the Business Combination Deadline, as more fully described in Section 3.2(a) of this Trust Agreement.
Section 1.6. "Permitted Investments"
"Permitted Investments" means (a) United States government securities within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended (the "Investment Company Act"), having a maturity of one hundred and eighty-five (185) days or less, or (b) money market funds meeting the conditions of paragraphs (d)(1), (d)(2), (d)(3), and (d)(4) of Rule 2a-7 promulgated under the Investment Company Act, which invest only in direct United States government treasury obligations, as determined by the Company. For the avoidance of doubt, Permitted Investments shall not include any corporate debt securities, municipal securities, asset-backed securities, or any other instruments not described in clauses (a) and (b) of this Section 1.6.
Section 1.7. "Public Shares"
"Public Shares" means the shares of Class A Common Stock included in the Units sold in the IPO (including any Units sold pursuant to any exercise of the underwriters' over-allotment option). As of the Closing Date, 20,000,000 Public Shares are outstanding. Upon any partial or full exercise of the over-allotment option, additional Public Shares shall be outstanding. By way of illustration, upon the anticipated partial exercise of the over-allotment option with respect to 1,500,000 additional Units (expected to close on or about July 9, 2021), the total number of outstanding Public Shares shall be 21,500,000. Public Shares do not include any shares of Class A Common Stock issuable upon the exercise of any Public Warrants or Private Placement Warrants, or any shares of Class B common stock, par value $0.0001 per share, of the Company (the "Founder Shares").
Section 1.8. "Representative"
"Representative" means Ridgeline Whitfield Securities LLC, a Delaware limited liability company, acting as representative of the several underwriters in the IPO, with its principal offices at 299 Park Avenue, 31st Floor, New York, New York 10171. The Representative acted as representative of the several underwriters named in the Underwriting Agreement, including Halyard Capital Markets Inc., and is entitled to receive the Deferred Underwriting Commissions in accordance with the terms of this Trust Agreement and the Underwriting Agreement.
Section 1.9. "Sponsor"
"Sponsor" means Pinnacle Venture Fund II LP, a Delaware limited partnership, with its principal offices at 388 Embarcadero Center, Suite 2400, San Francisco, California 94111. The general partner of the Sponsor is Pinnacle Venture Management II LLC, a Delaware limited liability company. The key principal of the Sponsor and the Company's Chairman and Chief Executive Officer is Marcus Yuen, Founder and Managing Partner of the Sponsor.
Section 1.10. "Tax Payments"
"Tax Payments" means income tax and franchise tax obligations of the Company payable from interest earned on the Trust Account as described in Section 2.4(a) of this Trust Agreement. For the avoidance of doubt, Tax Payments shall be made solely from interest earned on the Trust Account and shall not reduce the principal amount held in the Trust Account.
Section 1.11. "Trust Account"
"Trust Account" means the trust account established by the Trustee at its offices at 17 Ashbury Asset Advisors, 14th Floor, New York, New York 10004, designated as account number TA-2021-07834, into which the Trust Amount and all additional deposits and earnings thereon shall be deposited, held, invested, and distributed in accordance with the terms of this Trust Agreement.
Section 1.12. "Trust Amount"
"Trust Amount" means, as of the Closing Date, $200,000,000, subject to increase upon any exercise of the underwriters' over-allotment option at the rate of $10.00 per additional Public Share sold. The Trust Amount represents $10.00 per Public Share outstanding as of the date of such deposit into the Trust Account.
Section 1.13. "Underwriting Agreement"
"Underwriting Agreement" means the Underwriting Agreement dated June 22, 2021, among the Company, the Sponsor, and Ridgeline Whitfield Securities LLC, as Representative of the several underwriters named therein (including Halyard Capital Markets Inc.), as the same may be amended from time to time in accordance with its terms.
ARTICLE II — ESTABLISHMENT OF TRUST
Section 2.1. Deposit
(a) On the Closing Date, the Company shall deposit, or cause to be deposited, the Trust Amount of $200,000,000 into the Trust Account by wire transfer of immediately available funds. The Trust Amount shall represent $10.00 per Public Share outstanding as of the Closing Date. The Company shall provide the Trustee with wire transfer instructions at least two (2) business days prior to the Closing Date, and the Trustee shall provide the Company with wiring instructions for the Trust Account sufficiently in advance to facilitate timely deposit.
(b) Upon any exercise of the over-allotment option by the underwriters, the Company shall deposit, or cause to be deposited, additional amounts equal to $10.00 per additional Public Share sold into the Trust Account within one (1) business day of receipt of such over-allotment proceeds. The parties acknowledge and agree that the underwriters are expected to exercise the over-allotment option with respect to 1,500,000 additional Units on or about July 7, 2021, with the closing of such additional Units expected on or about July 9, 2021. Upon such partial exercise, an additional $15,000,000 (representing $10.00 per share multiplied by 1,500,000 additional Public Shares) shall be deposited into the Trust Account, bringing the total Trust Account balance to $215,000,000 (excluding any interest earned thereon between the Closing Date and the date of such additional deposit).
(c) The Trustee shall acknowledge receipt of each deposit in writing to the Company and the Representative within two (2) business days of receipt of any funds deposited into the Trust Account. Such acknowledgment shall specify the amount received, the date of receipt, and the running balance of the Trust Account.
(d) The Trustee shall hold the funds deposited in the Trust Account and shall not release, distribute, or permit any withdrawal from the Trust Account except as expressly provided in this Trust Agreement.
Section 2.2. Investment of Trust Funds
(a) The Trustee shall invest and reinvest the funds held in the Trust Account (including the Trust Amount, any additional deposits made upon exercise of the over-allotment option, any Extension Deposits, and all interest, dividends, and income earned thereon) solely in Permitted Investments as defined in Section 1.6 of this Trust Agreement. The Trustee shall not invest or hold any funds in the Trust Account in any investment other than a Permitted Investment.
(b) The Company shall deliver written investment instructions to the Trustee specifying the particular Permitted Investments to be made by the Trustee. Such instructions shall be signed by an authorized officer of the Company. In the absence of such written investment instructions, the Trustee shall invest the funds held in the Trust Account in money market funds meeting the requirements of clause (b) of Section 1.6 of this Trust Agreement. The Trustee shall act upon the most recent investment instructions received from the Company until new instructions are received.
(c) The Trustee shall not be liable for any loss on any Permitted Investment resulting from market fluctuation or otherwise, provided that the investment was made in accordance with the terms of this Trust Agreement and the investment instructions received from the Company (or, in the absence of such instructions, in accordance with the default investment provision set forth in clause (b) of this Section 2.2). The Company acknowledges and agrees that the Trustee is not an investment advisor and that Permitted Investments may yield negative returns or no returns, and that the Trustee shall have no responsibility or liability for any such losses.
(d) All interest, dividends, and income earned on Permitted Investments shall be retained in the Trust Account and shall constitute part of the funds held therein, except as otherwise expressly provided in Section 2.4 and Article III of this Trust Agreement. The Trustee shall reinvest all such earnings in Permitted Investments in accordance with the investment instructions then in effect.
Section 2.3. No Distributions Prior to Business Combination
(a) Except as expressly provided in Section 2.4 and Article III of this Trust Agreement, the Trustee shall not distribute, transfer, release, or permit the withdrawal of any amounts from the Trust Account, and no person shall have any right to access, claim, or distribute any funds held in the Trust Account. The Trustee shall resist and refuse to honor any instruction, order, judgment, attachment, garnishment, or other legal process that purports to authorize a distribution from the Trust Account except as expressly provided in this Trust Agreement.
(b) The Trust Account shall not be subject to any lien, attachment, execution, bankruptcy claim, or other encumbrance. The Trustee shall not pledge, hypothecate, or otherwise encumber the Trust Account or any funds held therein. The Company represents and warrants that it has not and shall not grant any security interest in the Trust Account or the funds held therein to any person.
(c) The Trustee shall have no obligation to, and shall not, accept or honor any instruction or direction from any person other than the Company (acting through an authorized officer) as it relates to the management, investment, or distribution of funds in the Trust Account, except that the Trustee shall follow the instructions of a court of competent jurisdiction to the extent required by applicable law and except as otherwise provided in this Trust Agreement.
Section 2.4. Permitted Withdrawals
Section 2.4(a). Tax Withdrawals. The Trustee shall, upon written request of the Company signed by an authorized officer of the Company (substantially in the form attached hereto as Exhibit B), release to the Company from time to time amounts of interest earned on the Trust Account as may be requested by the Company to pay any income or franchise tax obligations of the Company (each, a "Tax Withdrawal"). Each such written request shall include a certification by the authorized officer that: (i) the amount requested is needed to pay income or franchise tax obligations of the Company that have become due and payable or that are reasonably estimated to become due and payable within thirty (30) days of the date of such request; and (ii) the withdrawal will not reduce the per-share amount held in the Trust Account (with respect to principal) below $10.00 per Public Share. The Trustee shall release the requested amount within three (3) business days of receipt of the written request, provided that such request is in proper form and the Trust Account contains sufficient interest income to fund the requested withdrawal. The Trustee shall have no obligation to determine whether such request complies with applicable tax law or to independently verify the Company's tax liability. The Trustee shall be entitled to rely conclusively on the certification provided by the authorized officer of the Company. For the avoidance of doubt, Tax Withdrawals shall be made solely from interest earned on the Trust Account and shall not include any portion of the principal of the Trust Account. No Tax Withdrawal shall reduce the principal amount held in the Trust Account below $10.00 per Public Share.
Section 2.4(b). Working Capital. None of the principal amount deposited in the Trust Account shall be released, distributed, or made available for working capital purposes, to fund the Company's operations, or for any other purpose prior to the consummation of an initial Business Combination or the distribution of the Trust Account in accordance with Section 3.2, except as expressly set forth in Section 2.4(a) with respect to Tax Withdrawals from interest earned on the Trust Account. The Company acknowledges and agrees that its working capital needs shall be funded from sources outside the Trust Account, including but not limited to the proceeds of the Private Placement Warrants, loans from the Sponsor or its affiliates, or other external financing.
Section 2.4(c). Extension Deposit. If the Sponsor (or its designees) deposits the Extension Deposit described in Section 1.2 into the Trust Account on or before the initial Business Combination Deadline of December 25, 2022, the Business Combination Deadline shall be automatically extended to the Extended Business Combination Deadline of June 25, 2023, without any further action required by the Company, the Trustee, or the holders of the Public Shares. The Trustee shall acknowledge receipt of any Extension Deposit in writing (substantially in the form attached hereto as Exhibit C), and shall hold, invest, and distribute such Extension Deposit amount in accordance with the terms of this Trust Agreement, as if such Extension Deposit were part of the original Trust Amount. The Extension Deposit shall be invested in Permitted Investments and all earnings thereon shall be retained in the Trust Account, subject to release only as provided herein. The Trustee shall promptly notify the Company and the Representative in writing upon receipt of any Extension Deposit and upon the automatic extension of the Business Combination Deadline resulting therefrom.
ARTICLE III — DISTRIBUTIONS FROM TRUST; TERMINATION
Section 3.1. Distribution Upon Business Combination
(a) General. Upon the consummation of an initial Business Combination, the Trustee shall distribute funds from the Trust Account upon receipt of the following from the Company:
(i) a written instruction from the Company (a "Distribution Instruction"), substantially in the form attached hereto as Exhibit A, executed by an authorized officer of the Company, specifying the aggregate amount to be distributed, the per-share redemption price, the number of Public Shares being redeemed, the amount of Deferred Underwriting Commissions payable, and wire transfer instructions for each payee;
(ii) a certification of the Company's board of directors (the "Board Certification"), certified by the Secretary or an Assistant Secretary of the Company, authorizing the distribution and certifying that: (A) the Business Combination has been duly approved by the Company's stockholders in accordance with the Company's Amended and Restated Certificate of Incorporation and the Delaware General Corporation Law (if stockholder approval was sought), or (B) the Company has completed a tender offer to the holders of the Public Shares in compliance with the rules and regulations of the SEC, including Rule 13e-4 and Regulation 14E under the Securities Exchange Act of 1934, as amended; and (C) the Business Combination is being consummated in accordance with the terms of the definitive agreement entered into by the Company with respect thereto; and
(iii) such other documentation as the Trustee may reasonably request to verify the authorization and legitimacy of the distribution, including without limitation a copy of the executed definitive agreement for the Business Combination or a certificate of merger or similar document filed with the appropriate governmental authority.
(b) Order of Priority. The Trustee shall distribute funds from the Trust Account in the following order of priority:
(i) First, to the holders of Public Shares who have validly elected to have their shares redeemed in connection with the initial Business Combination (each, a "Redeeming Stockholder"), a per-share redemption price (the "Per-Share Redemption Price") equal to: (A) the aggregate amount then on deposit in the Trust Account (including interest earned thereon, net of taxes payable and amounts previously released for Tax Payments), divided by (B) the number of then-outstanding Public Shares (calculated as of two (2) business days prior to the consummation of the Business Combination). Each Redeeming Stockholder shall be entitled to receive the Per-Share Redemption Price with respect to each Public Share so redeemed, and the aggregate redemption payment to all Redeeming Stockholders shall be calculated as the Per-Share Redemption Price multiplied by the total number of Public Shares validly tendered for redemption. The Company shall provide the Trustee with a list of Redeeming Stockholders and the number of Public Shares being redeemed by each such stockholder, together with such other information as may be necessary for the Trustee to effect such payments.
(ii) Second, to the Representative (Ridgeline Whitfield Securities LLC), the Deferred Underwriting Commissions, from funds remaining in the Trust Account after payment to Redeeming Stockholders in accordance with clause (i) above. The Representative and the Company acknowledge and agree that: (A) the Deferred Underwriting Commissions with respect to the Firm Units equal $7,000,000 (representing 3.5% of $200,000,000 in gross IPO proceeds from the Firm Units); (B) additional Deferred Underwriting Commissions shall accrue upon any exercise of the over-allotment option at the rate of 3.5% of the gross proceeds received from such exercise (by way of example, upon the anticipated partial exercise of the over-allotment option with respect to 1,500,000 additional Units at $10.00 per Unit, additional Deferred Underwriting Commissions of $525,000 shall accrue, resulting in total anticipated Deferred Underwriting Commissions of $7,525,000); and (C) the Deferred Underwriting Commissions shall be paid solely from the Trust Account and solely upon the consummation of an initial Business Combination. The Representative shall provide the Trustee with wire transfer instructions for payment of the Deferred Underwriting Commissions not later than three (3) business days prior to the anticipated closing date of the Business Combination.
(iii) Third, all remaining funds in the Trust Account, after payment of amounts described in clauses (i) and (ii) above, shall be released to the Company for general corporate purposes in connection with the initial Business Combination, including but not limited to payment of transaction expenses, working capital for the post-combination entity, and such other purposes as the Company's board of directors may determine.
(c) Method of Distribution. The Trustee shall make distributions to Redeeming Stockholders through the facilities of The Depository Trust Company ("DTC") or otherwise as directed by the Company. The Trustee shall be entitled to rely on the Company's instructions with respect to the manner and method of distribution to Redeeming Stockholders and shall have no obligation to independently verify the identity or entitlement of any Redeeming Stockholder. Distributions to the Representative and to the Company shall be made by wire transfer of immediately available funds in accordance with the wire transfer instructions provided to the Trustee.
(d) Timing. The Trustee shall use commercially reasonable efforts to effect all distributions under this Section 3.1 within five (5) business days of receipt of all required documentation in proper form, or such shorter period as may be specified in the Distribution Instruction, subject to the Trustee's ability to liquidate Permitted Investments held in the Trust Account in a timely manner without incurring undue loss.
Section 3.2. Distribution Upon Failure to Consummate Business Combination
If the Company fails to consummate an initial Business Combination by the Business Combination Deadline (as such date may be extended pursuant to Section 1.2), the following provisions shall apply:
(a) The Company shall promptly (and in no event later than ten (10) business days after the Business Combination Deadline) deliver a Distribution Instruction to the Trustee, substantially in the form of Exhibit A (modified as appropriate for a liquidation distribution), directing the Trustee to distribute to the holders of Public Shares, on a pro rata basis, an amount equal to the aggregate amount then on deposit in the Trust Account, including all interest earned thereon, net of:
(i) taxes payable on interest earned on the Trust Account and amounts previously released for Tax Payments pursuant to Section 2.4(a); and
(ii) up to $100,000 of interest that may be released to the Company to pay reasonable costs and expenses related to the dissolution, liquidation, and winding up of the Company (the "Dissolution Expense Amount"), as certified by an authorized officer of the Company in the Distribution Instruction.
(b) The per-share liquidation amount (the "Per-Share Liquidation Amount") shall equal the aggregate amount distributable under clause (a) above divided by the number of then-outstanding Public Shares. The Trustee shall distribute such Per-Share Liquidation Amount to the holders of Public Shares through the facilities of DTC or otherwise as directed by the Company. The Company shall provide the Trustee with such information as may be necessary for the Trustee to effect such distributions, including a certified list of the holders of Public Shares and the number of Public Shares held by each such holder.
(c) The Trustee shall not distribute any Deferred Underwriting Commissions to the Representative. The Representative's right to receive the Deferred Underwriting Commissions shall automatically terminate and be irrevocably forfeited upon the Company's failure to consummate an initial Business Combination by the Business Combination Deadline, without any further action required by the Company, the Trustee, or the Representative. For the avoidance of doubt, the Representative shall have no claim against the Trust Account or the Company for the Deferred Underwriting Commissions under such circumstances.
(d) The Sponsor, the Company's officers, and the Company's directors have agreed, pursuant to the Letter Agreement dated June 25, 2021 among the Company, the Sponsor, and each of the Company's officers and directors (the "Insider Letter Agreement"), that they will not participate in any liquidation distribution from the Trust Account with respect to the Founder Shares (Class B common stock) or any shares of Class A Common Stock or Class B common stock acquired prior to or in connection with the IPO. The Sponsor, the Company's officers, and the Company's directors shall only be entitled to participate in any such distribution with respect to Public Shares acquired in the open market after the Closing Date, if any.
(e) Following such distribution, the Trust Account shall terminate and the Trustee shall have no further obligations hereunder, except for obligations that by their terms survive termination of this Trust Agreement, including but not limited to the Company's indemnification obligations under Section 4.4.
Section 3.3. Dissolution
Following the distribution described in Section 3.2, the Company shall, as promptly as practicable and in accordance with applicable law:
(a) cease all operations except for the purpose of winding up its affairs, including the orderly payment or provision for payment of its remaining debts and obligations;
(b) redeem 100% of the outstanding Public Shares, at the Per-Share Liquidation Amount, in accordance with Section 3.2;
(c) dissolve and liquidate in accordance with the applicable provisions of the Delaware General Corporation Law (the "DGCL") and the Company's Amended and Restated Certificate of Incorporation, including the filing of a Certificate of Dissolution with the Secretary of State of the State of Delaware; and
(d) take such other actions as may be necessary or appropriate to wind up the Company's affairs and to distribute any remaining assets to the holders of Public Shares and other stakeholders in accordance with applicable law.
The Sponsor has agreed, pursuant to the Insider Letter Agreement, that it will not propose any amendment to the Company's Amended and Restated Certificate of Incorporation that would affect the substance or timing of the Company's obligation to redeem 100% of the outstanding Public Shares if the Company has not consummated an initial Business Combination by the Business Combination Deadline, or to liquidate the Trust Account in accordance with the terms of this Trust Agreement, unless the Company provides its public stockholders with the opportunity to redeem their Public Shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned thereon (net of taxes payable), divided by the number of then-outstanding Public Shares.
Section 3.4. Representative's Consent
The Trustee shall not release any Deferred Underwriting Commissions from the Trust Account without prior written confirmation from the Representative (or its successor) of: (i) the amount of Deferred Underwriting Commissions to be paid; and (ii) wire transfer instructions for the payment thereof. The Representative shall deliver such written confirmation to the Trustee not later than three (3) business days prior to the anticipated closing date of the initial Business Combination. The Representative acknowledges and agrees that: (A) the Deferred Underwriting Commissions are payable solely from the Trust Account and solely upon the consummation of an initial Business Combination; (B) the Representative has no claim against the Trust Account under any other circumstances, including without limitation upon the failure by the Company to consummate an initial Business Combination by the Business Combination Deadline; and (C) in the event of the Company's failure to consummate an initial Business Combination by the Business Combination Deadline, the Representative's right to the Deferred Underwriting Commissions shall be irrevocably forfeited, and all funds in the Trust Account shall be distributed to the holders of Public Shares in accordance with Section 3.2 (net of taxes payable and the Dissolution Expense Amount).
ARTICLE IV — TRUSTEE COMPENSATION; LIMITATION OF LIABILITY; INDEMNIFICATION
Section 4.1. Compensation
The Company shall pay the Trustee an annual fee of $30,000 for its services under this Trust Agreement (the "Trustee Fee"). Such fee shall be payable in advance on each anniversary of the Closing Date. The first annual Trustee Fee payment shall be due on June 25, 2022. If this Trust Agreement terminates before the first anniversary of the Closing Date or at any time between anniversary dates, the Trustee Fee shall be pro-rated for the portion of the year during which this Trust Agreement was in effect, and any prepaid but unearned portion of the Trustee Fee shall be promptly refunded to the Company. The Trustee Fee shall be payable from the Company's working capital and shall not be payable from the Trust Account. The Company acknowledges that the Trustee shall have no obligation to perform its duties hereunder if the Trustee Fee remains unpaid for more than thirty (30) days after the applicable due date, provided that the Trustee shall give the Company ten (10) business days' written notice before ceasing to perform any duties on account of non-payment.
Section 4.2. Reimbursement of Expenses
The Company shall reimburse the Trustee for all reasonable and documented out-of-pocket expenses incurred by the Trustee in connection with the performance of its duties under this Trust Agreement, including reasonable attorneys' fees and expenses, accounting fees, filing fees, courier charges, and other costs directly attributable to the Trustee's administration of the Trust Account (collectively, "Trustee Expenses"). The Trustee shall submit invoices to the Company for Trustee Expenses on a quarterly basis (or such other frequency as the parties may mutually agree), and the Company shall pay such invoices within thirty (30) days of receipt. All Trustee Expenses shall be payable from the Company's working capital and shall not be payable from the Trust Account.
Section 4.3. Limitation of Liability
(a) The Trustee shall not be liable for any act or omission taken or suffered in good faith and in accordance with the terms of this Trust Agreement, except for any act or omission constituting the Trustee's own gross negligence, willful misconduct, or fraud. In no event shall the Trustee be liable for any indirect, incidental, consequential, special, or punitive damages of any kind, including without limitation loss of profits, regardless of the form of action and whether or not any such damages are foreseeable.
(b) The Trustee shall not be liable for any loss on any Permitted Investment, including without limitation any loss resulting from a decline in the market value of any United States government security or money market fund held in the Trust Account, negative interest rates, or the failure of any issuer to make payments when due.
(c) The Trustee shall not be responsible for monitoring or enforcing the Company's compliance with any provision of the Registration Statement, the Prospectus, the Underwriting Agreement, the Company's Amended and Restated Certificate of Incorporation, the Insider Letter Agreement, or any other agreement, document, or instrument to which the Company is a party or by which it is bound. The Trustee shall have no duty to inquire into or investigate the legality, validity, or propriety of any instruction received from the Company, except as expressly set forth herein.
(d) The Trustee shall not be required to take any action that, in the Trustee's reasonable judgment, would be contrary to applicable law, would require the Trustee to expend or risk its own funds or otherwise incur financial liability, or would subject the Trustee to personal liability. The Trustee may refrain from taking any action that it determines in its sole discretion may give rise to liability on the part of the Trustee until it receives indemnity satisfactory to it from the Company against any and all Losses that may be incurred in connection therewith.
(e) The Trustee may rely, and shall be fully protected in acting or refraining from acting, upon any notice, instruction, request, certificate, document, opinion, or other paper or instrument believed by the Trustee in good faith to be genuine, to have been signed or presented by the proper person or authority, and to conform to the requirements of this Trust Agreement. The Trustee shall not be required to make any independent investigation into the facts or matters stated in any such notice, instruction, request, certificate, document, opinion, or other instrument.
(f) The Trustee may consult with legal counsel of its own choosing (which may be counsel to the Company or any other party to this Trust Agreement), and any action taken or suffered by the Trustee in good faith in accordance with the written opinion or advice of such counsel shall be conclusive evidence of the Trustee's good faith and shall constitute a complete defense to any claim or liability in connection therewith.
Section 4.4. Indemnification
(a) The Company shall indemnify, defend, and hold harmless the Trustee and its officers, directors, employees, agents, successors, and assigns (each, a "Trustee Indemnitee") from and against any and all losses, liabilities, claims, damages, penalties, fines, forfeitures, actions, fees, costs, and expenses (including reasonable attorneys' fees and expenses, expert witness fees, court costs, and the costs and expenses of investigation and litigation) (collectively, "Losses") arising out of or relating to:
(i) the Trustee's performance of its duties hereunder or any actions taken or omitted to be taken by the Trustee in accordance with the terms of this Trust Agreement; or
(ii) the Trustee's status as trustee under this Trust Agreement, including without limitation any Losses arising out of any claim, action, or proceeding brought by any third party (including any holder of Public Shares, any governmental authority, or any party to the Underwriting Agreement) in connection with the Trust Account or the funds held therein.
(b) Notwithstanding the foregoing, the Company shall not be obligated to indemnify any Trustee Indemnitee for any Losses to the extent that such Losses result from the gross negligence, willful misconduct, or fraud of such Trustee Indemnitee, as determined by a final, non-appealable judgment of a court of competent jurisdiction.
(c) The Company's indemnification obligations under this Section 4.4 shall be payable from the Company's working capital and shall not be payable from the Trust Account, unless the Trust Account has been terminated in accordance with Section 5.13 and any remaining funds are available for such purpose. The Company acknowledges that the indemnification obligations set forth in this Section 4.4 shall survive the termination of this Trust Agreement.
(d) In the event that any claim, action, or proceeding is brought against any Trustee Indemnitee for which indemnification may be sought under this Section 4.4, the Trustee Indemnitee shall promptly notify the Company in writing of such claim. The Company shall have the right, at its sole expense, to assume the defense of any such claim, action, or proceeding with counsel reasonably satisfactory to the Trustee Indemnitee. The Trustee Indemnitee shall cooperate with the Company in the defense of any such claim, action, or proceeding and shall have the right to employ its own counsel at its own expense if the Trustee Indemnitee reasonably determines that a conflict of interest exists between the Company and the Trustee Indemnitee. No settlement of any claim, action, or proceeding may be made without the prior written consent of the Trustee Indemnitee (which consent shall not be unreasonably withheld, conditioned, or delayed).
Section 4.5. Resignation and Removal
(a) Resignation. The Trustee may resign at any time upon thirty (30) days' prior written notice to the Company and the Representative. Such resignation shall not take effect until a successor trustee has been appointed and has accepted such appointment in accordance with this Section 4.5.
(b) Removal. The Company may remove the Trustee at any time upon thirty (30) days' prior written notice to the Trustee, with the prior written consent of the Representative (which consent shall not be unreasonably withheld, conditioned, or delayed). Such removal shall not take effect until a successor trustee has been appointed and has accepted such appointment in accordance with this Section 4.5.
(c) Appointment of Successor. Upon the effective date of any resignation or removal, the Company shall appoint a successor trustee that is a bank or trust company organized under the laws of the United States or any state thereof with trust powers and a combined capital and surplus of not less than $100,000,000, which successor trustee shall be reasonably acceptable to the Representative. If the Company fails to appoint a successor trustee within thirty (30) days after receipt of the Trustee's notice of resignation or within thirty (30) days after the delivery of the Company's notice of removal, as applicable, the Trustee may petition any court of competent jurisdiction in the State of New York to appoint a successor trustee.
(d) Transfer of Trust Account. Upon appointment of a successor trustee and the acceptance of such appointment by the successor trustee in writing, the predecessor Trustee shall promptly transfer and deliver all funds and assets held in the Trust Account to the successor trustee, together with all records, documents, and instruments relating to the Trust Account. Upon completion of such transfer, the predecessor Trustee shall be released from all obligations and liabilities arising under this Trust Agreement after the date of such transfer, except for obligations that by their terms survive termination, including indemnification obligations under Section 4.4 with respect to events occurring prior to the date of such transfer.
(e) Fees and Expenses. Any fees and expenses owed to the predecessor Trustee as of the effective date of its resignation or removal shall remain the obligation of the Company and shall be paid from the Company's working capital.
ARTICLE V — MISCELLANEOUS
Section 5.1. Amendments
(a) This Trust Agreement may not be amended, modified, or supplemented without the prior written consent of both the Company and the Trustee, and any purported amendment, modification, or supplement that is not so consented to shall be null and void and of no effect.
(b) Notwithstanding the foregoing, no amendment to this Trust Agreement that would adversely affect the interests of the holders of the Public Shares, including without limitation any amendment that would reduce the amount distributable to holders of Public Shares upon redemption or liquidation, extend the Business Combination Deadline (except as provided in Section 1.2), or modify the terms upon which distributions from the Trust Account are made, shall be effective without the prior approval of the holders of a majority of the then-outstanding Public Shares.
(c) No amendment to this Trust Agreement that would modify the obligations of the Representative with respect to the Deferred Underwriting Commissions, including without limitation any reduction in the amount of the Deferred Underwriting Commissions or any change to the conditions upon which the Deferred Underwriting Commissions are payable, shall be effective without the Representative's prior written consent.
(d) Any amendment to this Trust Agreement must be in writing and signed by all parties required to consent thereto. The Trustee shall be entitled to receive, and shall be fully protected in relying upon, an opinion of counsel, at the Company's expense, that any proposed amendment is authorized, permitted by, and compliant with the terms of this Trust Agreement.
Section 5.2. Governing Law
This Trust Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, without regard to principles of conflicts of law that would cause the application of the laws of any other jurisdiction. All questions concerning the construction, interpretation, validity, and enforceability of this Trust Agreement shall be determined in accordance with the laws of the State of New York.
Section 5.3. Jurisdiction; Venue
Each party hereto irrevocably and unconditionally submits to the exclusive jurisdiction of the state and federal courts located in the Borough of Manhattan, City and State of New York, for the adjudication of any dispute, controversy, or claim arising out of or relating to this Trust Agreement or the breach, termination, or invalidity hereof, and each party irrevocably waives, and agrees not to assert, by way of motion, as a defense, or otherwise, in any such action or proceeding: (a) any claim that it is not personally subject to the jurisdiction of such courts; (b) any objection to the laying of venue of any such action or proceeding in such courts; and (c) any claim that such courts are an inconvenient forum. Each party agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable law.
Section 5.4. Notices
All notices, requests, demands, consents, and other communications hereunder shall be in writing and shall be deemed to have been duly given: (a) when delivered personally; (b) when sent by confirmed electronic mail (email) (provided that a copy is also sent by another method described in this Section 5.4 within two (2) business days thereafter); or (c) one (1) business day after being sent by nationally recognized overnight courier service (with all charges prepaid), to the parties at the following addresses (or to such other address as a party may designate by notice given in accordance with this Section 5.4):
If to the Company:
Pinnacle Acquisition Corp. I 388 Embarcadero Center, Suite 2400 San Francisco, California 94111
Attention: Marcus Yuen, Chairman and Chief Executive Officer
Email: myuen@pinnaclevc.com
With a copy to (which shall not constitute notice):
Calderwood & Harkness LLP 900 Third Avenue, 28th Floor New York, New York 10022
Attention: Jennifer Kwon, Esq.
If to the Trustee:
Continental Dunmore Financial 17 Ashbury Asset Advisors, 14th Floor New York, New York 10004
Attention: Corporate Trust Administration
Email: trustadmin@continentalatlantic.com
If to the Representative:
Ridgeline Whitfield Securities LLC 299 Park Avenue, 31st Floor New York, New York 10171
Attention: Jonathan Haber, Managing Director
With a copy to (which shall not constitute notice):
Whitmore & Caldwell LLP 100 Federal Street, 32nd Floor Boston, Massachusetts 02110
Attention: Garrett Doyle, Esq.
Any party may change its address for purposes of this Section 5.4 by giving written notice to each of the other parties in the manner set forth above. Notice given by email shall be effective only if the sender does not receive an automated rejection or delivery-failure notification within twenty-four (24) hours of sending such email.
Section 5.5. Counterparts
This Trust Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of this Trust Agreement (or any signature page hereto) by electronic transmission, including by email with a PDF attachment, shall be effective as delivery of a manually executed counterpart of this Trust Agreement.
Section 5.6. Entire Agreement
This Trust Agreement, together with the Exhibits attached hereto, constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior agreements, understandings, negotiations, and discussions, whether oral or written, relating to such subject matter. No party shall be liable or bound to any other party in any manner by any warranties, representations, or covenants with respect to the subject matter hereof except as specifically set forth herein.
Section 5.7. Severability
If any provision of this Trust Agreement is held to be invalid, illegal, or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other provision of this Trust Agreement or any application of such provision in any other jurisdiction, and this Trust Agreement shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein. In the event of any such determination, the parties shall negotiate in good faith to modify this Trust Agreement to give effect, as nearly as possible, to the original intent of the parties with respect to the provisions held to be invalid, illegal, or unenforceable.
Section 5.8. Third-Party Beneficiaries
(a) The holders of the Public Shares are hereby made express third-party beneficiaries of this Trust Agreement, with the right to enforce the provisions hereof relating to the distribution of funds from the Trust Account for their benefit, including without limitation the provisions of Section 3.1 (to the extent relating to redemption payments to Redeeming Stockholders) and Section 3.2 (relating to liquidation distributions), directly against the Trustee. Each holder of Public Shares shall be entitled to seek specific performance or injunctive relief to enforce the Trustee's obligations under this Trust Agreement to distribute funds from the Trust Account in accordance with the terms hereof.
(b) The Representative is hereby made an express third-party beneficiary of this Trust Agreement solely with respect to the Deferred Underwriting Commissions provisions of Section 3.1(b) and Section 3.4. The Representative shall have the right to enforce its right to receive the Deferred Underwriting Commissions upon the consummation of an initial Business Combination directly against the Trustee, subject to the terms and conditions of this Trust Agreement.
(c) Except as expressly set forth in clauses (a) and (b) of this Section 5.8, nothing in this Trust Agreement is intended to or shall confer upon any person other than the parties hereto any rights or remedies hereunder, and no person other than the parties hereto, the holders of the Public Shares (to the extent set forth above), and the Representative (to the extent set forth above) shall have standing to bring any claim or action under or in respect of this Trust Agreement.
Section 5.9. No Waiver
The failure of any party hereto to enforce any provision of this Trust Agreement at any time or for any period of time shall not be deemed a waiver of such party's right to enforce such provision or any other provision in the future. No waiver of any provision of this Trust Agreement shall be effective unless such waiver is in writing and signed by the party granting such waiver. A waiver of any provision of this Trust Agreement on one occasion shall not be deemed a waiver of any other provision or of such provision on any other occasion.
Section 5.10. Successors and Assigns
This Trust Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Neither the Company nor the Trustee may assign its rights or obligations under this Trust Agreement without the prior written consent of the other party and the Representative, and any purported assignment without such consent shall be null and void and of no effect. No assignment shall relieve any party of its obligations under this Trust Agreement unless the non-assigning parties have consented in writing to such relief.
Section 5.11. Headings
The headings of the articles, sections, and subsections of this Trust Agreement are inserted for convenience of reference only and shall not affect the meaning or interpretation of this Trust Agreement. Unless the context otherwise requires, all references to articles, sections, subsections, and exhibits refer to the articles, sections, subsections, and exhibits of this Trust Agreement.
Section 5.12. Tax Reporting
(a) The Trustee shall be responsible for any tax reporting required with respect to the Trust Account, including the filing of any information returns (including, without limitation, IRS Forms 1099 and any similar state or local information returns) with respect to interest, dividends, and other income earned on the Trust Account. The Trustee shall file all such returns in a timely manner and shall provide copies of such returns to the Company upon request.
(b) The Company shall provide the Trustee with its taxpayer identification number (EIN: 86-3194507) and such other information as the Trustee may reasonably request from time to time for tax reporting purposes. The Company shall promptly notify the Trustee of any change in its taxpayer identification number or tax status.
(c) The Company acknowledges that the Trust Account will be treated as a grantor trust for federal income tax purposes and that all income earned on the Trust Account shall be treated as income of the Company for federal, state, and local income tax purposes. The Trustee shall report all income earned on the Trust Account as income attributable to the Company's taxpayer identification number.
Section 5.13. Termination
This Trust Agreement shall terminate upon the earliest to occur of:
(a) the distribution of all funds in the Trust Account upon the consummation of an initial Business Combination in accordance with Section 3.1;
(b) the distribution of all funds in the Trust Account upon the Company's failure to consummate an initial Business Combination by the Business Combination Deadline in accordance with Section 3.2; or
(c) such earlier date as may be agreed in writing by the Company, the Trustee, and the Representative.
Upon termination of this Trust Agreement, the Trustee shall have no further obligations hereunder, except for obligations that by their terms survive termination, including without limitation the Company's indemnification obligations under Section 4.4 and the Company's obligation to pay any accrued and unpaid Trustee Fees and Trustee Expenses under Sections 4.1 and 4.2.
[Remainder of this page intentionally left blank; signature page follows.]
IN WITNESS WHEREOF, the parties hereto have caused this Investment Management Trust Agreement to be duly executed as of the date first written above.
PINNACLE ACQUISITION CORP. I
By: ________
Name: Marcus Yuen
Title: Chairman and Chief Executive Officer
CONTINENTAL Dunmore Financial
By: ________
Name: Elaine Marchetti
Title: Senior Vice President, Corporate Trust
EXHIBIT A
FORM OF DISTRIBUTION INSTRUCTION
[Date]
Pinnacle Acquisition Corp. I 388 Embarcadero Center, Suite 2400 San Francisco, California 94111
Continental Dunmore Financial 17 Ashbury Asset Advisors, 14th Floor New York, New York 10004
Attention: Corporate Trust Administration
Re: Investment Management Trust Agreement dated June 25, 2021 (the "Trust Agreement"); Trust Account No. TA-2021-07834
Ladies and Gentlemen:
Pursuant to Section [3.1/3.2] of the above-referenced Trust Agreement, Pinnacle Acquisition Corp. I (the "Company") hereby instructs Continental Dunmore Financial (the "Trustee") to distribute funds from the Trust Account as follows:
1. Type of Distribution (check one):
Distribution upon consummation of an initial Business Combination (Section 3.1)
Distribution upon failure to consummate an initial Business Combination by the Business Combination Deadline (Section 3.2)