Document:

Exhibit 10.2

INVESTMENT MANAGEMENT TRUST AGREEMENT

This Agreement is made as of              ,
2007 by and between Arcade Acquisition Corp. (the “Company”) and Continental
Stock Transfer & Trust Company (“Trustee”).

WHEREAS, the Company’s Registration Statement on Form
S-1, No. 333-140814 (as amended from time to time) (“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, Morgan Joseph & Co. Inc. is acting as the
representative (the “Representative”) of the underwriters in the IPO; and

WHEREAS, the Company has agreed to issue securities in
a private placement that will occur immediately prior to the IPO (the “Placement”);
and

WHEREAS, as described in the Company’s Registration
Statement, and in accordance with the Company’s Certificate of Incorporation, $1,750,000
of the proceeds of the IPO, net of all discounts and commissions including the
Deferred Compensation (as defined below) and expenses of the IPO ($54,725,000
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 (the “Trust
Account”) for the benefit of the Company and the holder’s 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 (the “CRS”). A copy of
Section 11-51-302(6) of the CRS is attached hereto and made a part hereof; and

WHEREAS, pursuant to the Warrant Purchase Agreement,
dated as of                  ,
2007, among the Company and certain purchasers, the entire proceeds of the
private placement of warrants with the Company’s purchasers, equal to
$2,000,000, will be delivered to the Trustee to be deposited in the Trust
Account; and

WHEREAS, pursuant to the Underwriting Agreement, an
additional $1,750,000, (or the amount specified in the notice delivered
pursuant to Section 2(d) hereof), representing a portion of the underwriters’
discount (the “Deferred Compensation”) which the Representative, on behalf of
the underwriters, has agreed to deposit into the Trust Account; and

WHEREAS, the amount to be delivered to the Trustee,
including the proceeds of the IPO and the private placement and the Deferred
Compensation, 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, the Representative and
the Company will be referred to together as the “Beneficiaries;” and 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; and

 1
 

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 without limitation, the
terms of Section 11-51-302(6) of the CRS, in segregated trust accounts
established by the Trustee at JPMorgan Chase N.A. [and at Morgan Stanley];

(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 180 days or less or any open ended investment
company selected by the Company and registered under the Investment Company Act
of 1940 that holds itself out as a money market fund meeting the conditions of
paragraphs (c)(2), (c)(3) and (c)(4) under Rule 2a-7 promulgated under the
Investment 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 and the Representative 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 tax 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 and/or the Representative to do so;

(h)           Render to the Company and to the Representative,
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)            If there is any income or other tax obligation
relating to the income from the Property in the Trust Account as determined by
the Company, then, from time to time, at the written instruction of the
Company, the Trustee shall promptly, to the extent there is not sufficient cash
in the Trust Account to pay such tax obligation, liquidate such assets held in
the Trust Account as shall be designated by the Company in writing, and
disburse to the Company by wire transfer, out of the Property in the Trust
Account, the amount indicated by the Company as owing in respect of such income
tax obligation; and

 2
 

(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 (i) Chief
Executive Officer or Chairman of the Board and (ii) Chief Financial Officer and
complete the liquidation of the Trust Account and disburse the Property in the
Trust Account (which disbursement shall include, in the event of a Business
Combination, payment of the Deferred Compensation to the Representative) only
as directed in the Termination Letter and the other documents referred to
therein; provided, however, that in the event a Termination Letter has not been
received by the 24-month anniversary of the effective date of the Registration
Statement (the “Last Date”), the Trust Account shall be liquidated in
accordance with the procedures set forth in the Termination Letter attached
hereto as Exhibit B to the stockholders of record on the Last Date.  In all cases, the Trustee shall provide the
Representative 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.  The Trustee understands
and agrees that, except as provided in paragraphs 1(i), 1(k) and 6(a) hereof,
disbursements from the Trust Account shall be made only pursuant to a duly
executed Termination Letter, together with the other documents referenced
herein; and

(k)           Upon one or more written requests from the Company,
which may be given not more than once in any calendar month period, the Trustee
shall distribute to the Company interest earned on the Trust Account, net of
taxes payable, up to a maximum of $2,000,000. The distributions requested by
the Company may be for any amount, provided that (i) in the aggregate, all
distributions under this Section 1(k) may not exceed $2,000,000 (subject to the
limitation imposed by Section (1)(l) below and (ii) that such distributions may
only be made if and to the extent that interest has been earned, net of taxes,
on the amount initially deposited into the Trust Account; and

(l)            Permit or effect no distribution from the Trust
Account except in accordance with Sections 1(i), 1(j) and 1(k).

2.             Agreements and Covenants of the Company.
The Company hereby agrees and covenants to:

(a)           Provide all instructions to the Trustee hereunder
in writing, signed by the Company’s Chief Executive Officer, President,
Chairman of the Board or Chief Financial Officer. In addition, except with
respect to its duties under Section 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)           Subject to the provisions of Section 4 hereof, 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

 3
 

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. The Company
may participate in such action with its own counsel;

(c)           Pay the Trustee an initial acceptance fee, an
annual fee and a transaction processing fee for each disbursement made pursuant
to Sections 1(i) and 1(k) as set forth on Schedule A hereto, which fees shall
be subject to modification by the parties from time to time. It is expressly
understood that the Property shall not be used to pay such fees and further
agreed that said transaction processing fees shall be deducted by the Trustee
from the disbursements made to the Company pursuant to Section 1(k). The
Company shall pay the Trustee the initial acceptance fee and first year’s fee
at the consummation of the IPO and shall thereafter pay the annual fee 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 Account. The Company shall not be responsible for any other fees or
charges of the Trustee except as set forth in this Section 2(c) and as may be
provided in Section 2(b) hereof (it being expressly understood that the
Property shall not be used to make any payments to the Trustee under such
Section);

(d)           Within five business days after the Representative’s
over-allotment option (or any unexercised portion thereof) expires or is
exercised in full, provide the Trustee notice in writing (with a copy to the
Representative) of the total amount of the Deferred Compensation, which shall
in no event be less than $1,750,000;

(e)           Provide to the Trustee any letter of intent,
agreement in principle or definitive agreement that is executed in connection
with a Business Combination, together with a certified copy of a unanimous
resolution of the Board of Directors of the Company affirming that such letter
of intent, agreement in principle or definitive agreement is in effect; and

(f)            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 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 Section 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 written instructions from the Company given as

 4
 

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 Section 1(c);

(d)           Refund any depreciation in principal of any
Property;

(e)           Assume that the authority of any person designated
by the Company or the Representative to give instructions hereunder shall not
be continuing unless provided otherwise in such designation, or unless the
Company or the Representative 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 of the terms hereof, unless evidenced by a written
instrument delivered to the Trustee signed by the proper party or parties and,
if the duties or rights of the Trustee are affected, unless it shall give its
prior written consent thereto;

(g)           Verify the correctness of the information set forth
in the Registration Statement or to confirm or assure that any acquisition made
by the Company or any other action taken by it is as contemplated by the
Registration Statement, unless an officer of the Trustee has actual knowledge
thereof, written notice of such event is sent to the Trustee or as otherwise
required under Section 1(j) hereof;

(h)           Pay any taxes on behalf of the Trust Account (it
being expressly understood that, as set forth in Section 1(i), if there is any
income tax obligation relating to the income of the Property in the Trust
Account, then, at the written instruction of the Company, the Trustee shall
disburse to the Company the amount indicated by the Company as owing in respect
of such income tax obligation); and

(i)            Verify calculations, qualify or otherwise approve
Company requests for distributions pursuant to Section 1(i) or 1(k).

4.             No Right of Set-Off. The Trustee waives any right of set-off or any right, title, interest or
claim of any kind that the Trustee may
have against the Property held in the Trust Account. In the event that the
Trustee has a claim against the Company under this Agreement, including,
without limitation, under Section 3(b), the Trustee will pursue such claim
solely against the Company and not against the Property held in the Trust
Account.

 5
 

5.             Termination. This Agreement shall terminate as
follows:

(a)           If the Trustee gives written notice to the Company that it desires to
resign under this Agreement, the Company shall use its reasonable efforts to
locate a successor trustee. At such time that the Company notifies the Trustee
that a successor trustee has been appointed by the Company and has agreed to
become subject to the terms of this Agreement, the Trustee shall transfer the
management of the Trust Account to the successor trustee, including but not
limited to the transfer of copies of the reports and statements relating to the
Trust Account, whereupon this Agreement shall terminate; provided, however, that,
in the event that the Company does not locate a successor trustee within ninety
days of receipt of the resignation notice from the Trustee, the Trustee may
submit an application to have the Property deposited with the United States
District Court for the Southern District of New York and upon such deposit, the
Trustee shall be immune from any liability whatsoever that arises due to any
actions or omissions to act by any party after such deposit; or

(b)           At such time that the Trustee has completed the liquidation of the Trust
Account in accordance with the provisions of Section 1(j) hereof, and
distributed the Property in accordance with the provisions of the Termination
Letter, this Agreement shall terminate except with respect to Section 2(b).

6.             Miscellaneous.

(a)           The Company and the Trustee each acknowledge that the Trustee will follow
the security procedures set forth below with respect to funds transferred from
the Trust Account. Upon receipt of written instructions, the Trustee will
confirm such instructions with an Authorized Individual at an Authorized
Telephone Number listed on the attached Exhibit C. The Company and the
Trustee will each restrict access to confidential information relating to such
security procedures to authorized persons. Each party must notify the other
party immediately if it has reason to believe unauthorized persons may have
obtained access to such information, or of any change in its authorized
personnel. In executing funds transfers, the Trustee will rely upon account
numbers or other identifying numbers of a beneficiary, beneficiary’s bank or
intermediary bank, rather than names. The Trustee shall not be liable for any
loss, liability or expense resulting from any error in an account number or
other identifying number, provided it has accurately transmitted the numbers
provided.

(b)           This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York, without giving effect to
conflicts of law principles that would result in the application of the
substantive laws of another jurisdiction. It may be executed in several
counterparts, each one of which shall constitute an original, and together
shall constitute but one instrument.

(c)           This Agreement contains the entire agreement and understanding of the
parties hereto with respect to the subject matter hereof. This Agreement or any
provision hereof may only be changed, amended or modified by a writing signed
by each of the parties hereto; provided, however, that no such change, amendment
or modification (other than to correct a typographical or similar technical
error) may be made to Sections 1(i), 1(j), 1(k) and 1(l) hereof without the
consent of 95% of the Public Stockholders, it being the specific intention of
the parties hereto that each Public Stockholder is and shall be a third-party
beneficiary of this

 6
 

Section 6(c) with the
same right and power to enforce this Section 6(c) as either of the parties hereto. For purposes of this Section 6(c), the “consent of 95% of the Public Stockholders”
shall mean receipt by the Trustee of a certificate from an entity certifying
that (i) such entity regularly engages in the business of serving as inspector
of elections for companies whose securities are publicly traded, and (ii)
either (a) 95% of the Public Stockholders of record as of a record date
established in accordance with Section 213(a) of the Delaware General
Corporation Law, as amended (the “DGCL”), have voted in favor of such amendment
or modification or (b) 95% of the Public Stockholders of record as of a record
date established in accordance with Section 213(b) of the DGCL has delivered to
such entity a signed writing approving such amendment or modification.

(d)           As to any claim, cross-claim or counterclaim in any way relating to this Agreement,
each party waives the right to trial by jury.

(e)           The parties hereto consent to the jurisdiction and venue of any state or
federal court located in the City of New York, Borough of Manhattan, for
purposes of resolving any disputes hereunder.

(f)            Any notice, consent or request to be given in connection with any of the
terms or provisions of this Agreement shall be in writing and shall be sent by
express mail or similar private courier service, by certified mail (return
receipt requested), by hand delivery or by facsimile transmission:

if to
the Trustee, to:

Continental
Stock Transfer & Trust Company

17 Battery Place

New York, New York 10004

Attn:  Steve Nelson

Fax No.: (212) 509-4000

if to
the Company, to:

Arcade Acquisition Corp.

c/o Arcade Partners, LLC

62 La Salle Road, Suite 304

West Hartford, CT  06107

Phone: 860-236-6320

Attn: John Chapman, Chief Financial Officer

Fax: (860) 236-6325

in
either case with a copy to:

Morgan
Joseph & Co. Inc.

600 Fifth Avenue, 19th Floor

New York, NY 10020

Attn:  Tina Pappas

Fax No.: (212) 218-3719

 7
 

and

Kramer Levin Naftalis & Frankel LLP

1177 Avenue of the Americas

New York, New York 10036

Attn:  Christopher Auguste, Esq.

Fax No.: (212) 715- 8000

and

Loeb
& Loeb LLP

345 Park Avenue

New York, New York 10154

Attn:  Fran Stoller, Esq.

Fax No.: (212) 407-4990

(g)           This Agreement may not be assigned by the Trustee without the prior written
consent of the Company.

(h)           Each of the Trustee and the Company hereby represents that it has the full
right and power and has been duly authorized to enter into this Agreement and
to perform its respective obligations as contemplated hereunder. The Trustee
acknowledges and agrees that it shall not make any claims or proceed against
the Trust Account, including by way of set-off, and shall not be entitled to
any funds in the Trust Account under any circumstance.

(i)            The Trustee
hereby consents to the inclusion of Continental Stock Transfer & Trust
Company in the Registration Statement and other materials relating to the IPO.

(j)            The underwriters
shall be third party beneficiaries of this Agreement and this Agreement may not
be modified or changed without the prior written consent of the Representative.

[Signature page follows]

 8
 

IN
WITNESS WHEREOF, the parties have duly executed this Investment Management
Trust Agreement as of the date first written above.

	
  

  	
  CONTINENTAL STOCK TRANSFER &
  TRUST COMPANY, as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  ARCADE ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name: Jonathan Furer

  
	
   

  	
  Title: Chief Executive Officer

  

 

 9

SCHEDULE
A

Schedule of fees
pursuant to Section 2(c) of Investment Management Trust Agreement

between Arcade Acquisition Corp. and Continental Stock Transfer & Trust
Company

	
  Fee Item

  	
   

  	
  Time and method of payment

  	
   

  	
  Amount

  
	
  Initial acceptance fee

  	
   

  	
  Initial closing of IPO by wire
  transfer

  	
   

  	
  $

  	
  1,000

  
	
  Annual fee

  	
   

  	
  First year, initial closing of IPO
  by wire transfer; thereafter on the anniversary of the effective date of the
  IPO by wire transfer or check

  	
   

  	
  $

  	
  3,000

  
	
  Transaction processing fee for 

  disbursements to Company under Sections 1(i) and 1(k)

  	
   

  	
  Deduction by Trustee from
  disbursement made to Company under Section 1(k)

  	
   

  	
  $

  	
  250

  

Agreed:

Dated: 
                   ,
2007

	
  ARCADE ACQUISITION CORP.

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name: Jonathan Furer

  
	
  Title: Chief Executive Officer

  
	
   

  
	
  CONTINENTAL STOCK TRANSFER & TRUST COMPANY

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  
	
  Title: Authorized Officer

  

 

EXHIBIT A

[Letterhead of Company]

[Insert
date]

Continental
Stock Transfer

& Trust Company

17 Battery Place

New York, New York 10004

Attn:

Re:          Trust Account No. [               ] Termination Letter

Gentlemen:

Pursuant to Section 1(i) of the
Investment Management Trust Agreement between Arcade Acquisition Corp. (“Company”)
and Continental Stock Transfer & Trust Company (“Trustee”), dated as of
              ,
2007 (“Trust Agreement”), this is to advise you that the Company has entered
into an agreement (“Business Agreement”) with
                      
(“Target Business”) to consummate a business combination with Target Business (“Business
Combination”) on or about [insert date]. The Company shall notify you at least
48 hours in advance of the actual date of the consummation of the Business
Combination (“Consummation Date”) and shall provide you with a certificate or
affidavit in accordance with Section 2(f) of the Trust Agreement. Capitalized
terms used herein and not otherwise defined shall have the meanings ascribed to
them in the Trust Agreement.

In accordance with the terms of the
Trust Agreement, we hereby authorize you to commence liquidation of the Trust
Account to the effect that, on the Consummation Date, all of funds held in the
Trust Account will be immediately available for transfer to the account or
accounts that the Company shall direct on the Consummation Date.

On the Consummation Date (i) counsel
for the Company shall deliver to you written notification that (a) the Business
Combination has been consummated and [(b) the provisions of Section
11-51-302(6) and Rule 51-3.4 of the CRS have been met,] and (ii) the Company
and Morgan Joseph & Co. Inc., as representative of the underwriters of the
Company’s IPO (the “Representative”) shall deliver to you joint written
instructions with respect to the transfer of the funds held in the Trust
Account, including the Deferred Compensation (“Instructions”). You are hereby
directed and authorized to transfer the funds, including the Deferred
Compensation, held in the Trust Account immediately upon your receipt of the
counsel’s letter, evidence of delivery of the Stock Certificates, the Officer’s
Certificate and the Instructions, in accordance with the terms of the
Instructions. In the event that certain deposits held in the Trust Account may
not be liquidated by the Consummation Date without penalty, you will notify the
Company and the Representative of the same. Upon the distribution of all the
funds in the Trust Account pursuant to the terms hereof, the Trust Agreement
shall be terminated.

In the event that the Business
Combination is not consummated on the Consummation Date described in the notice
thereof and we have not notified you on or before the original Consummation
Date of a new Consummation Date, then the funds held in the Trust Account shall
be reinvested as provided in the Trust Agreement on the business day
immediately following the Consummation Date as set forth in the notice.

	
  

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  ARCADE ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  CONTINENTAL STOCK TRANSFER & TRUST COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

EXHIBIT
B

[Letterhead of Company]

[Insert
date]

Continental
Stock Transfer & Trust Company

17 Battery Place

New York, New York 10004

Attn:

Re:          Trust Account No. [ ]
Termination Letter

Gentlemen:

Pursuant to Section 1(j) of the
Investment Management Trust Agreement between Arcade Acquisition Corp. (“Company”)
and Continental Stock Transfer & Trust Company (“Trustee”), dated as of
                 ,
2007 (“Trust Agreement”), this is to advise you that the Company has
been unable to effect a Business Combination with a Target Company within the
time frame specified in the Company’s Certificate of Incorporation, as
described in the Company’s prospectus relating to its IPO.

In accordance with the terms of the
Trust Agreement, we hereby (a) certify to you that, if applicable, the
provisions of Section 11-51-302(6) and Rule 51-3.4 of the Colorado Statute have
been met and (b) authorize you, to commence liquidation of the Trust Account
as promptly as practicable to the stockholders of record on the Last Date (as
defined in the Trust Agreement). The Company
will establish a record date for the purposes of determining the stockholders
entitled to receive their share of liquidation proceeds. The record date shall
be within ten (10) days of the date of this letter or as soon thereafter as is
reasonably practicable and legally permissible. You will notify the Company in
writing as to when all of the funds in the Trust Account will be available for
immediate transfer (“Transfer Date”) in accordance with the terms of the Trust
Agreement and the Certificate of Incorporation of the Company. You shall
commence distribution of such funds in accordance with the terms of the Trust
Agreement and the Certificate of Incorporation of the Company and you shall
oversee the distribution of the funds. 
Upon the distribution of all the funds in the Trust Account, your
obligations under the Trust Agreement shall be terminated.

	
  

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  ARCADE ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

	
  

  	
  CONTINENTAL STOCK TRANSFER & TRUST COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

Agreed:

Dated: 
                      ,
200  

	
  ARCADE ACQUISITION CORP.

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  
	
   

  
	
  CONTINENTAL STOCK TRANSFER & TRUST COMPANY

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  
	
  Title: Authorized Officer

  

 

 

EXHIBIT C

	
  AUTHORIZED INDIVIDUAL(S)

  FOR TELEPHONE CALL BACK

  	
   

  	
   

  	
   

  	
  AUTHORIZED

  TELEPHONE NUMBER(S)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Company:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Arcade Acquisition Corp.

  	
   

  	
  ( )

  
	
  c/o Arcade Partners, LLC

  	
   

  	
   

  
	
  62 LaSalle Road, Suite 304

  	
   

  	
   

  
	
  West Hartford, Connecticut 06107

  	
   

  	
   

  
	
  Attn: Jonathan Furer, Chief Executive Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Trustee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Continental Stock Transfer & Trust Company 

  17 Battery Place 

  New York, New York 10004 

  Attn: Steve Nelson

  	
   

  	
  (212)Exhibit
10.3

SECURITIES ESCROW AGREEMENT

SECURITIES ESCROW AGREEMENT, dated as of                             ,
2007 (this “Agreement”) by and among Arcade Acquisition Corp., a Delaware
corporation (the “Company”), the undersigned parties listed as Initial
Stockholders on the signature page hereto (collectively, the “Initial
Stockholders”) and Continental Stock Transfer & Trust Company, a New York
corporation (the “Escrow Agent”).

WHEREAS, the Company has entered into an Underwriting
Agreement, dated                ,
2007 (the “Underwriting Agreement”) with Morgan Joseph & Co. Inc. (“Morgan
Joseph”), as representative of the underwriters named therein (collectively,
the “Underwriters”), pursuant to which, among other matters, the Underwriters
have agreed to purchase 6,250,000 units (the “Units”) of the Company. Each Unit
consists of one share of the Company’s common stock, par value $.0001 per share
(the “Common Stock”), and one warrant, each warrant to purchase one share of
Common Stock, all as more fully described in the Company’s definitive
Prospectus, dated                  ,
2007 (the “Prospectus”) comprising part of the Company’s Registration Statement
on Form S-1 (File No. 333-140814) under the Securities Act of 1933, as amended
(the “Registration Statement”), declared effective on                      ,
2007 (the “Effective Date”); and

WHEREAS, the Initial Stockholders have agreed, as a
condition of the Underwriters’ obligation to purchase the Units pursuant to the
Underwriting Agreement and to offer them to the public, to deposit all of their
shares of Common Stock as set forth opposite their respective names in Schedule
A attached hereto (collectively the “Escrow Shares”), in escrow as
hereinafter provided; and

WHEREAS, the Company has entered into a Warrant
Purchase Agreement with one of the Initial Stockholders (the “Initial
Warrantholder”), dated                    ,
2007 (the “Warrant Purchase Agreement”), pursuant to which the Initial
Warrantholder has agreed to purchase 2,000,000 warrants (the “Founding Director
Warrants”) in a private placement transaction;

WHEREAS, the Initial Warrantholder has agreed as a
condition of the sale of the Founding Director Warrants to deposit the Founding
Director Warrants (together with the Escrow Shares, the “Escrow Securities”),
with the Escrow Agent as hereinafter provided; and

WHEREAS, the Company and the Initial Stockholders
(such term as used herein includes the Initial Warrantholder) desire that the
Escrow Agent accept the Escrow Securities, in escrow, to be held and disbursed
as hereinafter provided.

NOW, THEREFORE, IT IS AGREED:

1.             Appointment of Escrow Agent. The Company
and the Initial Stockholders hereby appoint the Escrow Agent to act in
accordance with and subject to the terms of

this Agreement and the Escrow Agent hereby accepts
such appointment and agrees to act in accordance with and subject to such
terms.

2.             Deposit of Escrow Securities.  On or prior to the Effective Date, the
Initial Stockholders shall deliver to the Escrow Agent certificates representing
their respective Escrow Securities to be held and disbursed subject to the
terms and conditions of this Agreement. Each Initial Stockholder acknowledges
and agrees that the certificates representing his or her Escrow Securities will
bear a legend reflecting the deposit of such Escrow Securities under this
Agreement.

3.             Disbursement of the Escrow Securities.

3.1           Disbursement of the Escrow
Shares.  Except as set forth herein
and in Section 3.3 below, the Escrow Agent shall hold the Escrow Shares until
one year from the closing date of a Business Combination (as such term is
defined in the Registration Statement) (“Escrow Period”), on which date it
shall, upon written instructions from each Initial Stockholder, disburse each
Initial Stockholder’s Escrow Shares to such Initial Stockholder; provided,
however, that if the Escrow Agent is notified by the Company pursuant to
Section 6.7 hereof that the Company is being liquidated at any time during the
Escrow Period, then the Escrow Agent shall promptly destroy the certificates
representing the Escrow Shares; provided  further, that if, after
the Company consummates a Business Combination, it (or the surviving entity)
subsequently consummates a liquidation, merger, stock exchange or other similar
transaction which results in all of its stockholders having the right to
exchange their shares of Common Stock for cash, securities or other property,
then the Escrow Agent will, upon receipt of a notice, executed by the Chairman,
Chief Executive Officer or Chief Financial Officer of the Company, in form
reasonably acceptable to the Escrow Agent, certifying that such transaction is
then being consummated, release the Escrow Shares to the Initial Stockholders.
The Escrow Agent shall have no further duties hereunder after the disbursement
or destruction of the Escrow Shares in accordance with this Section 3.1.

3.2           The Escrow Agent shall hold
the Founding Director Warrants until such time that the Company consummates a
Business Combination; provided, however, that if the Escrow Agent is notified
by the Company pursuant to Section 6.7 hereof that the Company is being
liquidated at any time during the Escrow Period, then immediately prior to the
effectiveness of such liquidation, the Escrow Agent shall promptly destroy the
certificates representing the Founding Director Warrants and the Founding
Director Warrants shall no longer be considered issued and outstanding
securities of the Company. The Escrow Agent shall have no further duties
hereunder after the disbursement or destruction of the Founding Director
Warrants in accordance with this Section 3.2.

3.3           Upon written
instructions from the Company advising that a Business Combination has been
consummated and that public stockholders holding in excess of 20% of the shares
of Common Stock issued pursuant to the Registration Statement exercise the
right to redeem their shares for cash as described in the Registration
Statement, the Escrow Agent will release and deliver to the Company for
cancellation on a pro rata basis certificates representing that number of
Escrow Shares (not to exceed 195,312 in the aggregate) which results in the
Initial Stockholders collectively owning no more than 23.81% of the Company’s
outstanding Common Stock immediately prior to the consummation of the Business
Combination after giving effect to the redemption. Such instructions shall set
forth both the number of shares the Company is redeeming and the number of
Escrow Shares to be delivered to the Company for cancellation.

4.             Rights of Initial Stockholders in Escrow
Shares.

4.1           Voting Rights as a
Stockholder. Subject to the terms of the Insider Letters described in
Section 4.4 hereof and except as herein provided, the Initial Stockholders
shall retain all of their rights as stockholders of the Company during the
Escrow Period, including, without limitation, the right to vote such shares.

4.2           Dividends and Other
Distributions in Respect of the Escrow Shares. During the Escrow Period,
all dividends payable in cash with respect to the Escrow Shares shall be paid
to the Initial Stockholders, but all dividends payable in stock or other
non-cash property (“Non-Cash Dividends”) shall be delivered to the Escrow Agent
to hold in accordance with the terms hereof. As used herein, the term “Escrow
Shares” shall be deemed to include the Non-Cash Dividends distributed thereon,
if any.

4.3           Restrictions on Transfer.
During the Escrow Period, no sale, transfer or other disposition may be made of
any or all of the Escrow Securities except (i) by gift to a member of Initial
Stockholder’s immediate family or to a trust or other entity, the beneficiary
of which is an Initial Stockholder or a member of an Initial Stockholder’s
immediate family, or (ii) by virtue of the laws of descent and distribution
upon death of any Initial Stockholder, (iii) pursuant to a qualified domestic
relations order; provided, however, that such permitted transfers
may be implemented only upon the respective transferee’s written agreement to
be bound by the terms and conditions of this Agreement and of the Insider
Letter signed by the Initial Stockholder transferring the Escrow Securities.
During the Escrow Period, the Initial Stockholders shall not pledge or grant a
security interest in the Escrow Securities or grant a security interest in
their rights under this Agreement.

4.4           Insider Letters. Each
of the Initial Stockholders has executed a letter agreement with Morgan Joseph
and the Company, dated as indicated on Schedule A hereto, and which is filed
as an exhibit to the Registration Statement (“Insider Letter”), respecting the
rights and obligations of such Initial Stockholder in certain events, including
but not limited to the liquidation of the Company.

5.             Concerning the Escrow Agent.

5.1           Good Faith Reliance.
The Escrow Agent shall not be liable for any action taken or omitted by it in
good faith and in the exercise of its own best judgment, and 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
Escrow Agent), 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 Escrow Agent to be genuine and to
be signed or presented by the proper person or persons. The Escrow Agent shall
not be bound by any notice or demand, or any waiver, modification, termination
or rescission of this Agreement unless evidenced by a writing delivered to the
Escrow Agent signed by the proper party or parties and, if the duties or rights
of the Escrow Agent are affected, unless it shall have given its prior written
consent thereto.

5.2           Indemnification. The
Escrow Agent shall be indemnified and held harmless by the Company from and
against any expenses, including counsel fees and disbursements, or loss
suffered by the Escrow Agent in connection with any action, suit or other proceeding
involving any claim which in any way, directly or indirectly, arises out of or
relates to this Agreement, the services of the Escrow Agent hereunder, or the

Escrow
Securities held by it hereunder, other than expenses or losses arising from the
gross negligence or willful misconduct of the Escrow Agent. Promptly after the
receipt by the Escrow Agent of notice of any demand or claim or the
commencement of any action, suit or proceeding, the Escrow Agent shall notify
the other parties hereto in writing. In the event of the receipt of such
notice, the Escrow Agent, in its sole discretion, may commence an action in the
nature of interpleader in an appropriate court to determine ownership or
disposition of the Escrow Securities or it may deposit the Escrow Securities
with the clerk of any appropriate court or it may retain the Escrow Securities
pending receipt of a final, non appealable order of a court having jurisdiction
over all of the parties hereto directing to whom and under what circumstances
the Escrow Securities are to be disbursed and delivered. The provisions of this
Section 5.2 shall survive in the event the Escrow Agent resigns or is
discharged pursuant to Sections 5.5 or 5.6 below.

5.3           Compensation. The
Escrow Agent shall be entitled to reasonable compensation from the Company for
all services rendered by it hereunder, as set forth on Exhibit A hereto. The
Escrow Agent shall also be entitled to reimbursement from the Company for all
expenses paid or incurred by it in the administration of its duties hereunder
including, but not limited to, all counsel, advisors’ and agents’ fees and
disbursements and all taxes or other governmental charges. The Escrow Agent
shall bill the Company on a monthly basis for services rendered.

5.4           Further Assurances. From
time to time on and after the date hereof, the Company and the Initial
Stockholders shall deliver or cause to be delivered to the Escrow Agent such
further documents and instruments and shall do or cause to be done such further
acts as the Escrow Agent shall reasonably request to carry out more effectively
the provisions and purposes of this Agreement, to evidence compliance herewith
or to assure itself that it is protected in acting hereunder.

5.5           Resignation. The Escrow
Agent may resign at any time and be discharged from its duties as escrow agent
hereunder by its giving the other parties hereto written notice and such
resignation shall become effective as hereinafter provided. Such resignation
shall become effective at such time that the Escrow Agent shall turn over to a
successor escrow agent appointed by the Company and approved by Morgan Joseph,
the Escrow Securities held hereunder. If no new escrow agent is so appointed
within the 60 day period following the giving of such notice of resignation, the
Escrow Agent may deposit the Escrow Securities with any court it deems
appropriate.

5.6           Discharge of Escrow Agent.
The Escrow Agent shall resign and be discharged from its duties as escrow agent
hereunder if so requested in writing at any time by the Company and a majority
of the Initial Stockholders, jointly, provided, however, that
such resignation shall become effective only upon acceptance of appointment by
a successor escrow agent as provided in Section 5.5.

5.7           Liability.
Notwithstanding anything herein to the contrary, the Escrow Agent shall not be
relieved from liability hereunder for its own gross negligence or its own
willful misconduct.

6.             Miscellaneous.

6.1           Governing Law. This
Agreement shall for all purposes be deemed to be made under and shall be
construed in accordance with the laws of the State of New York. Each of the
parties hereby agrees that any action, proceeding or claim against it arising
out of or relating in any way to this Agreement shall be brought and enforced
in the courts of the State of New York or the United States District Court for
the Southern District of New York (each, a “New York court”), and irrevocably
submits to such jurisdiction, which jurisdiction shall be exclusive. Each of
the parties hereby waives any objection to such exclusive jurisdiction and that
such courts represent an inconvenient forum.

6.2           Third-Party Beneficiaries.
Each of the Initial Shareholders hereby acknowledges that Morgan Joseph is a
third-party beneficiary of this Agreement and this Agreement may not be
modified or changed without the prior written consent of Morgan Joseph.

6.3           Entire Agreement. This
Agreement contains the entire agreement of the parties hereto with respect to
the subject matter hereof and, except as expressly provided herein, may not be
changed or modified except by an instrument in writing signed by the party to
the charged.

6.4           Headings. The headings
contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation thereof.

6.5           Binding Effect. This
Agreement shall be binding upon and inure to the benefit of the respective
parties hereto and their legal representatives, successors and assigns.

6.6           Notices. Any notice or
other communication required or which may be given hereunder shall be in
writing and either be delivered personally or by private national courier
service, or be mailed, certified or registered mail, return receipt requested,
postage prepaid, and shall be deemed given when so delivered personally or, if
sent by private national courier service, on the next business day after
delivery to the courier, or, if mailed, two business days after the date of
mailing, as follows:

	
  If to the Company, to:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Arcade
  Acquisition Corp.

  	
   

  
	
   

  	
  c/o Arcade
  Partners, LLC

  	
   

  
	
   

  	
  62 La Salle
  Road, Suite 304

  	
   

  
	
   

  	
  West Hartford,
  CT 06107

  	
   

  
	
   

  	
  Phone:
  860-236-6320

  	
   

  
	
   

  	
  Fax:
  860-236-6325

  	
   

  
	
   

  	
  Attn: John
  Chapman

  	
   

  
	
   

  	
  If to a
  Stockholder, to his address set forth in Exhibit A.

  

 

 

	
  

  	
  and if to the
  Escrow Agent, to:

  
	
   

  	
   

  	
   

  
	
   

  	
  Continental
  Stock Transfer & Trust Company

  	
   

  
	
   

  	
  17 Battery Place

  	
   

  
	
   

  	
  New York, New
  York 10004

  	
   

  
	
   

  	
  Attn: Felix
  Orihuela, Vice President and Senior Account Executive

  
	
   

  	
   

  	
   

  
	
   

  	
  A copy of any
  notice sent hereunder shall be sent to:

  
	
   

  	
   

  	
   

  
	
   

  	
  Loeb & Loeb
  LLP

  	
   

  
	
   

  	
  345 Park Avenue

  	
   

  
	
   

  	
  New York, New
  York 10154

  	
   

  
	
   

  	
  Attn: Fran
  Stoller, Esq.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  and:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Morgan Joseph
  & Co. Inc.

  	
   

  
	
   

  	
   

  	
  600 Fifth Avenue

  	
   

  
	
   

  	
   

  	
  19th Floor

  	
   

  
	
   

  	
   

  	
  New York, New
  York 10020

  	
   

  
	
   

  	
   

  	
  Attn: Tina
  Pappas

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  and:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Kramer Levin
  Naftalis & Frankel LLP

  	
   

  
	
   

  	
   

  	
  1177 Avenue of
  the Americas

  	
   

  
	
   

  	
   

  	
  New York, New
  York 10036

  	
   

  
	
   

  	
   

  	
  Attn:
  Christopher Auguste, Esq.

  	
   

  
					

The parties may change the persons and addresses to
which the notices or other communications are to be sent by giving written
notice to any such change in the manner provided herein for giving notice.

6.7           Liquidation of Company.
The Company shall give the Escrow Agent written notification of the liquidation
and dissolution of the Company in the event that the Company fails to
consummate a Business Combination within the time period(s) specified in the
Prospectus.

6.8           Waiver.  Notwithstanding anything herein to the
contrary, the Escrow Agent hereby waives any and all right, title, interest or
claim of any kind (“Claim”) in or to any distribution of the Trust Account, and
hereby agrees not to seek recourse, reimbursement, payment or satisfaction for
any Claim against the Trust Account for any reason whatsoever.

WITNESS the execution of this Agreement as of
the date first above written.

	
  

  	
  ARCADE ACQUISITION CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: Jonathan Furer

  
	
   

  	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CONTINENTAL STOCK TRANSFER

  
	
   

  	
  & TRUST COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

	
  

  	
  INITIAL
  STOCKHOLDERS:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Jonathan Furer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  John Chapman

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ASIF RAHMAN
  TR0UST

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: Muhit
  Rahman, Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DEENA RAHMAN
  TRUST

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: Muhit
  Rahman, Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  RAHMAN FAMILY
  TRUST

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: Muhit
  Rahman, Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARCADE ACQUISITION INVESTORS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: Muhit Rahman, Managing Member

  
	
   

  	
   

  	
   

  

SCHEDULE A

	
  Name and Address of

  Initial Stockholder

  	
   

  	
  Number of

  Common

  Shares

  	
   

  	
  Number of

  Warrants

  	
   

  
	
  Jonathan Furer

  	
   

  	
  420,833

  	
   

  	
  0

  	
   

  
	
  John Chapman

  	
   

  	
  420,833

  	
   

  	
  0

  	
   

  
	
  Asif Rahman
  Trust

  	
   

  	
  150,000

  	
   

  	
  0

  	
   

  
	
  Deena Rahman
  Trust

  	
   

  	
  150,000

  	
   

  	
  0

  	
   

  
	
  Rahman Family
  Trust

  	
   

  	
  120,833

  	
   

  	
  0

  	
   

  
	
  Arcade
  Acquisition Investors, LLC

  	
   

  	
  300,001

  	
   

  	
  2,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL

  	
   

  	
  1,562,500

  	
   

  	
  2,000,000

  	
   

  

 

EXHIBIT A

Escrow Agent Fees

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