Exhibit 10.5
INVESTMENT MANAGEMENT TRUST AGREEMENT
This Agreement is made as of ____, 2007, by and between China Resources
Ltd. (the "Company") and American Stock Transfer & Trust Company (the
"Trustee").
WHEREAS, the Company's Registration Statement on Form S-1, No. 333-_____
(the "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 (the "Effective Date");
WHEREAS, Maxim Group LLC ("Maxim" or the "Representative") is acting as
the representative of the underwriters in the IPO (the "Underwriters");
WHEREAS, the Company has agreed to sell an aggregate of 2,600,000 warrants
to purchase 2,600,000 shares of the Company's common stock, par value $.0001 per
share, for a purchase price of $1.00 per warrant in a private placement that
will occur no less than two days prior to the effective date of the IPO (the
"Placement");
WHEREAS, as described in the Registration Statement, and in accordance
with the Company's Certificate of Incorporation, an aggregate of $39,200,000
($44,840,000 if the Underwriters' over-allotment option is exercised in full),
which is comprised of (i) the net proceeds of the IPO (except as provided in the
Registration Statement); (ii) the $2,600,000 received by the Company in exchange
for its securities pursuant to the Placement; and (iii) an additional $800,000
($920,000, if the Underwriters' over-allotment option is exercised in full) of
the proceeds of the IPO, representing the deferred portion of the underwriting
compensation referred to in the Registration Statement (the "Contingent
Discount") which the Representative has agreed to deposit in the Trust Account
(as defined below), will be delivered to the Trustee to be deposited and held in
the Trust Account for the benefit of the Company, and the holders of the
Company's common stock, par value $.0001 per share (the "Common Stock"),
included in the units (the "IPO Shares") of the Company's securities issued in
the IPO (the "Units") and the Representative and, in the event the securities
offered in the IPO are registered in Colorado, pursuant to Section 11-51-302(6)
of the Colorado Revised Statutes (the "CRS"), a copy of which is attached hereto
and made a part hereof. The amount to be delivered to the Trustee and all
interest or dividend income received with respect thereto 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 Representatives and the Company will be referred to
together as the "Beneficiaries;" and
WHEREAS, the Company and the Trustee desire to enter into this Agreement
to set forth the terms and conditions pursuant to which the Trustee shall hold
the Property; and
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, the parties hereto agree as follows:
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, with respect to
the Public Stockholders, the terms of Section 11-51-302(6) of the CRS, in a
segregated trust account established by the Trustee at a branch of Xxxxxxx
Xxxxx, Xxxxxx Xxxxxx & Xxxxx Incorporated. and in a segregated account at a
brokerage institution selected by the Trustee (collectively, the "Trust
Account");
(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 "government securities," within the meaning
of Section 2(a)(16) of the Investment Company Act of 1940, as amended (the "1940
Act"), having a maturity of 180 days or less or in any open ended investment
company registered under the 1940 Act selected by the Company 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 1940 Act 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 within two business days the Company of all
communications received by it with respect to any Property requiring action by
the Company;
(f) supply any necessary information or documents as may be
requested by the Company in connection with the Company's preparation of the tax
returns for the Trust Account or the Company;
(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 Representatives to do so;
(h) render to the Company and to the Representative, and to such
other persons as the Company may instruct, monthly written statements of the
activities of and amounts in the Trust Account reflecting all receipts and
disbursements of the Trust Account; and
(i) commence liquidation of the Trust Account upon receipt of the
Officers' Certificate signed by the Chief Executive Officer and Chief Financial
Officer in accordance with the terms of a letter (the "Termination Letter"), in
a form substantially similar to that attached hereto as Exhibit A or Exhibit B,
signed on behalf of the Company by its Chief Executive Officer and Chief
Financial Officer, and complete the liquidation of the Trust Account and
distribute the Property in the Trust Account only as directed in the Termination
Letter and the other documents referred to therein as part of the Company's plan
of dissolution and liquidation approved by the Company's stockholders. The
Trustee understands and agrees that, except as provided in Section 1(j) and
Section 2 hereof, disbursements from the Trust Account shall be made only
pursuant to a duly executed Termination Letter, together with the other
documents referenced herein, including, without limitation, an independently
certified oath and report of inspector of election in respect of the stock vote
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in favor of the Business Combination (as hereinafter defined). In all cases, the
Company shall provide the Representative with a copy of any Termination Letter,
Officers' Certificates and/or any other correspondence that it issues with
respect to any proposed withdrawal from the Trust Account promptly after it
issues same. As used in this Agreement, the term "Business Combination" means
the acquisition by the Company, through merger, capital stock exchange, asset
acquisition, stock purchase or other similar business combination with, one or
more operating business service providers, as more fully described in the
prospectus forming a part of the Registration Statement; and
(j) as of the date 18 months from the date of this Agreement (the
"LOI Termination Date") (or 24 months from the date hereof, in the event the
Company has executed a Letter of Intent (defined below) prior to the LOI
Termination Date but failed to consummate a Business Combination ("Second
Termination Date")), commence liquidation of the Trust Account. The Trustee,
upon consultation with the Company and the Representative, shall deliver a
notice to Public Stockholders of record as of the LOI Termination Date or Second
Termination Date, whichever the case may be, by U.S. mail or via the Depository
Trust Company ("DTC"), within five days of the LOI Termination Date or Second
Termination Date, to notify the Public Stockholders of such event and take such
other actions as it may deem necessary to inform the Beneficiaries. Following
the requisite approval of the Company's stockholders, the Trustee shall deliver
to each Public Stockholder its ratable share of the Property against
satisfactory evidence of delivery of the stock certificates by the Public
Stockholders to the Company through DTC, its Deposit Withdraw Agent Commission
(DWAC) system or as otherwise presented to the Trustee. Notwithstanding the
foregoing, if the Trustee receives a bona fide, executed letter of intent,
agreement in principle or engagement letter (a "Letter of Intent") for a
Business Combination prior to the LOI Termination Date accompanied by an
Officers' Certificate as described in Section 3(e) hereof, then the Trustee
shall forego or suspend any liquidation of the Trust Account until the earlier
of a Business Combination or the Second Termination Date.
2. Limited Distributions of Income on Property.
(a) If there is any income tax obligation relating to the income
from the Property in the Trust Account, then, at the written instruction of the
Company, the Trustee shall disburse to the Company by wire transfer, out of the
Property in the Trust Account, the amount indicated by the Company as required
to pay income [and franchise]taxes.
Upon one or more written requests from the Company, the Trustee shall
distribute to the Company interest or dividends earned on the Property in the
Trust Account, net of taxes payable, up to a maximum of $1,000,000; provided;
however, that in the event the over-allotment option is exercised in full, the
Company shall be prohibited from receiving distributions of income earned on the
amount deposited in the Trust Account until after the first $240,000 of income
is earned on the amount deposited in the Trust Account (net of taxes payable),
which amount shall be added to the amount deposited in the Trust Account
resulting in an amount of $10.00 for each share represented by certificates held
by Public Stockholders.
(b) . The distributions requested by the Company may be for any
amount, provided that (i) in the aggregate, all distributions under this Section
2(b) may not exceed $1,000,000, and (ii) such distributions may only be made if
and to the extent that income has been earned and collected on the amount
initially deposited into the Trust Account.
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(c) Upon receipt by the Trustee of a written instruction from the
Company for distributions from the Trust Account in connection with a plan of
dissolution and distribution, accompanied by an Officers' Certificate signed by
the Chief Executive Officer and Chief Financial Officer of the Company
certifying as true, accurate and complete (i) a statement of the amount of
actual expenses incurred or, where known with reasonable certainty, imminently
to be incurred by the Company in connection with its dissolution and
distribution, including any fees and expenses incurred or imminently to be
incurred by the Company in connection with seeking stockholder approval of the
Company's plan of dissolution and distribution, (ii) any amounts due to pay
creditors or required to reserve for payment to creditors, and (iii) the sum of
(i) and (ii), the Trustee shall distribute to the Company an amount, as directed
by the Company in the instruction letter, up to the sum of (i) and (ii) as
indicated in the instruction letter.
(d) Except as provided in Sections 1(i), 1(j), 2(a), 2(b), and 2(c)
above, no other distributions from the Trust Account shall be permitted.
(e) It is acknowledged and agreed by the parties hereto that with
respect to all requests for distributions to or on behalf of the Company
pursuant to this Section 2, paragraphs (a), (b) and (c), the Trustee's only
responsibility is to follow the instructions of the Company.
3. Agreements and Covenants of the Company. The Company hereby agrees and
covenants:
(a) to provide all instructions to the Trustee hereunder in writing,
signed by the Company's Chief Executive Officer and Chief Financial Officer,
with a copy to the Representatives. In addition, except with respect to its
duties under paragraph 1(i) and 1(j) above, the Trustee shall be entitled to
rely on, and shall be protected in relying on, any verbal or telephonic advice
or instruction which it, in good faith, believes to be given by any one of the
persons authorized above to give written instructions, provided that the Company
and/or the Representatives shall promptly confirm such instructions in writing;
(b) to hold the Trustee harmless and indemnify the Trustee from and
against any and all expenses, including reasonable counsel fees and
disbursements, or loss suffered by the Trustee in connection with any action,
suit or other proceeding brought against the Trustee involving any claim, or in
connection with any claim or demand which in any way arises out of or relates to
this Agreement, the services of the Trustee hereunder, or the Property or any
income earned from investment of the Property, except for expenses and losses
resulting from the Trustee's gross negligence or willful misconduct. Promptly
after the receipt by the Trustee of notice of demand or claim or the
commencement of any action, suit or proceeding, pursuant to which the Trustee
intends to seek indemnification under this paragraph, it shall notify the
Company in writing of such claim (hereinafter referred to as the "Indemnified
Claim"). The Trustee shall have the right to conduct and manage the defense
against such Indemnified Claim. The Company may participate in such action with
its own counsel;
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(c) to pay the Trustee an initial acceptance fee and an annual fee
as set forth on Schedule A at the consummation of the IPO and thereafter on the
anniversary of the Effective Date. In addition, the Company shall pay the
Trustee a transaction processing fee for each disbursement made pursuant to
Sections (a), (b) or (c) as set forth on Schedule A hereto and that said
transaction processing fee may be added to the amounts requested by the Company
and deducted from the disbursement made to or on behalf of the Company pursuant
to Sections 2(b), (b) and (c). The Trustee shall refund to the Company the fee
(on a pro rata basis) with respect to any period after the liquidation of the
Trust Fund. The Company shall not be responsible for any other fees or charges
of the Trustee, except as may be provided in Section 3(b) hereof (it being
expressly understood that the Property shall not be used to make any payments to
the Trustee under such section);
(d) that, in the event that the Company completes a Business
Combination and the Trust Account is liquidated in accordance with Section 1(i)
hereof, the Trustee or another independent party designated by the
Representatives shall act as the inspector of election to certify the results of
the stockholder vote;
(e) that the Officers' Certificate referenced in Sections 1(i) and
(j) hereof shall require the Chief Executive Officer and Chief Financial Officer
of the Company to each certify the following (wherever applicable): (1) prior to
the LOI Termination Date, the Company has entered into a bona fide Letter of
Intent with a target business; and/or (2) prior to the LOI Termination Date, the
Company has entered into a Business Combination with a target business, the
terms of which are consistent with the requirements set forth in the
Registration Statement; and/or (3) prior to the Second Termination Date, the
Company has entered into a Business Combination with a target business, the
terms of which are consistent with the requirements set forth in the
Registration Statement; and (4) the Board of Directors (the "Board"), has
approved (where applicable): (i) the Business Combination; and/or (ii) the
Letter of Intent;
(f) in connection with any vote of the Company's stockholders
regarding a Business Combination, to provide to the Trustee an affidavit or
certificate of a firm regularly engaged in the business of soliciting proxies
and tabulating stockholder votes (which firm may be the Trustee) verifying the
vote of the Company's stockholders regarding such Business Combination;
(g) in connection with any vote of the Company's stockholders
regarding a dissolution and liquidation, to provide to the Trustee an affidavit
or certificate of a firm regularly engaged in the business of tabulating
stockholder votes (which firm may be the Trustee) verifying the vote of the
Company's stockholders regarding such dissolution and liquidation; and
(h) within five business days after the Underwriters' over-allotment
option (or any unexercised portion thereof) expires or is exercised in full, to
provide the Trustee notice in writing (with a copy to the Representative) of the
total amount of the Contingent Discount, which shall in no event be less than
$800,000 less any amounts returned to stockholders of the Company who have
elected to convert their shares into a cash payment per share of $10.00 from the
Trust Account in connection with a Business Combination.
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4. 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 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 and/or the Representatives to give written instructions hereunder shall
not be continuing unless provided otherwise in such designation, or unless the
Company and/or the Representatives 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 on, 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(i) hereof; and
(h) pay any taxes on behalf of the Trust Account (it being expressly
understood that the Trustee's sole obligation with respect to taxes shall be to
disburse funds to the Company with respect thereto as provided for by Section
2(a) hereof).
5. Certain Rights Of Trustee.
(a) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or opinion of counsel or both. The Trustee shall not be
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liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or opinion of counsel. The Trustee may consult with
counsel and the advice of such counsel or any opinion of counsel shall be full
and complete authorization and protection from liability in respect of any
action taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
(b) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(c) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Agreement.
(d) The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Agreement, and it shall
not be accountable for the Company's use of the proceeds from the Trust Account.
Notwithstanding the effective date of this Agreement or anything to the contrary
contained in this Agreement, the Trustee shall have no liability or
responsibility for any act or event relating to this Agreement or the
transactions related thereto which occurs prior to the date of this Agreement,
and shall have no contractual obligations to the Beneficiaries until the date of
this Agreement.
6. 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.
7. 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 during which time the Trustee shall
continue to act in accordance with the terms of this Agreement. 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, 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 the Company does not
locate a successor trustee within 90 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;
(b) at such time that the Trustee has completed the liquidation of
the Trust Account in accordance with the provisions of Section 1(i) hereof, and
distributed the Property in accordance with the provisions of the Termination
Letter, this Agreement shall terminate except with respect to Section 3(b)
hereof; or
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(c) on such date after ______, 2009 (or ______, 2009, in the event
that the Company has executed a Letter of Intent prior to the Second Termination
Date) when the Trustee deposits the Property with the United States District
Court for the Southern District of New York in the event that, prior to such
date, the Trustee has not received a Termination Letter from the Company
pursuant to Section 1(i) or (j) hereof.
8. 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
conflict of laws. It may be executed in several counterparts, each one of which
shall constitute an original, and together shall constitute one instrument.
Facsimile signatures shall constitute original signatures for all purposes of
this Agreement.
(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 error or
similar technical error) may be made to Sections 1(i), 1(j), 2(a), 2(b) or 2(c)
hereof without the consent the Public Stockholders holding 95% of the Company's
issued and outstanding Common Stock, it being the specific intention of the
parties hereto that each Public Stockholder is and shall be a third-party
beneficiary of this Section 8(c) with the same right and power to enforce this
Section 8(c), the "consent of the Public Stockholders holding 95% of the
Company's issued and outstanding Common Stock" 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) Public Stockholders of
record holding 95% of the Company's issued and outstanding Common Stock 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) Public Stockholders of record holding 95% of
the Company's issued and outstanding Common Stock 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. The
Representative, who, along with the other Underwriters, the parties specifically
agree, are and shall be third party beneficiaries for purposes of this
Agreement; and provided further, any amendment to Section 1(j) shall require the
consent of all of the Public Stockholders. As to any claim, cross-claim or
counterclaim in any way relating to this Agreement, each party waives the right
to trial by jury.
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(d) The parties hereto consent to the jurisdiction and venue of any
state or federal court located in the State and County of New York for purposes
of resolving any disputes hereunder. The parties hereto irrevocably submit to
such jurisdiction, which jurisdiction shall be exclusive, and hereby waive any
objection to such exclusive jurisdiction and that such courts represent an
inconvenient forum.
(e) 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:
American Stock Transfer & Trust Company
00 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxx, Vice President
Fax No.: (000) 000-0000
if to the Company, to:
China Resources Ltd.
Xxxx Xxxx China Xxx Xxx Trading Co., Ltd., Xxxx 000,
Xxxxx X, Xxxxxx Xxxxxxx Xxxxx,
Xxxxxxx Xxxx
Futian District, Shenzhen, P.R. China
Attn: Chief Executive Officer
Fax No 00- 000-00000000
in either case with a copy to:
Maxim Group LLC
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx X. Xxxxxx, Director of Investment Banking
Fax No.: (000) 000-0000
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and
Xxxxx & XxxXxxxxx LLP
Three Park Avenue, 16th floor
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx XxXxxx Esq.
Fax No.: (000) 000-0000
and
Ellenoff Xxxxxxxx & Schole LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
Fax No.: (000) 000-0000
(f) This Agreement may not be assigned by the Trustee without the
prior written consent of the Company and the Representatives.
(g) 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.
(Remainder of document intentionally left blank. Signature page to follow.)
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IN WITNESS WHEREOF, the parties have duly executed this Investment
Management Trust Agreement as of the date first written above.
AMERICAN STOCK TRANSFER & TRUST
COMPANY, as Trustee
By: ________________________________
Name:
Title:
CHINA RESOURCES LTD.
By: ________________________________
Name: Xxxx Xxxx
Title: Chief Executive Officer
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EXHIBIT A
[Letterhead of Company]
[Insert date]
American Stock Transfer & Trust Company
00 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: [______________]
Re: Trust Account No. _________ / Brokerage Account No. [ ]
Termination Letter
Gentlemen:
Pursuant to Section 1(i) of the Investment Management Trust Agreement
between China Resources Ltd. (the "Company") and American Stock Transfer &
Trust Company (the "Trustee"), dated as of _____, 2007 (the "Trust Agreement"),
this is to advise you that the Company has entered into an agreement (the
"Business Agreement") with [___________] ("Target Business") to complete a
business combination with Target Business (the "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 (the
"Consummation Date") and shall provide you with an Officers' Certificate in
accordance with Sections 1(i) and 2(c) of the Trust Agreement. Capitalized terms
used herein and not otherwise define shall have the meaning ascribed to them in
the Trust Agreement.
In accordance with paragraph [___] of [___] of the Certificate of
Incorporation of the Company, the Business Combination has been approved by the
stockholders of the Company and by the Public Stockholders holding a majority of
the IPO Shares, and Public Stockholders holding less than 35% of the IPO Shares
have voted against the Business Combination and given notice of exercise of
their conversion rights described in paragraph [___] of Article [___] of the
Certificate of Incorporation of the Company. Pursuant to Section 3(f) of the
Trust Agreement, we are providing you with [ an affidavit ] [ a certificate ] of
___________, which verifies the vote of the Company's stockholders in connection
with the Business Combination.
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 and the
Representative shall direct in writing on the Consummation Date.
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On the Consummation Date, (i) counsel for the Company shall deliver to you
written notification that (a) all of the conditions to closing of the Business
Combination have been satisfied and the closing date for such Business
Combination has been scheduled pursuant to the terms of the Business Agreement,
and (b) the provisions of Section 11-51-302(6) and Rule 51-3.4 of the CRS have
been met, to the extent applicable; (ii) the Company shall deliver along with
the oath and report of inspector of election certified by an independent
inspector which may be the Trustee or as otherwise appointed by the
Representatives (collectively, the "Report"); and (iii) the Company and the
Representatives shall deliver to you joint written instructions with respect to
the transfer of the funds, including the Contingent Discount, held in the Trust
Account ("Instructions"). You are hereby directed and authorized to transfer the
funds held in the Trust Account immediately upon your receipt of the counsel's
letter, the Report, evidence of delivery of the Stock Certificates, the
Officers' Certificate and the Instructions in accordance with the terms of the
Instructions. We hereby agree and acknowledge that the Property in the Trust
Account shall be distributed 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 Representatives of the same and, if the amount set forth in sub-clause
(1) shall not have been paid in full, the Representatives and the Company shall
issue joint written instructions directing you as to whether such funds should
remain in the Trust Account and be distributed after the Consummation Date to
the Company and/or the Representatives. 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
upon the receipt of written instructions, 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,
CHINA RESOURCES LTD.
By: _________________________________________
Xxxx Xxxx, Chief Executive Officer
By: _________________________________________
Xxxxxx Nugawela, Chief Financial Officer
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EXHIBIT B
[Letterhead of Company]
[Insert date]
American Stock Transfer & Trust Company
00 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: [______________]
Re: Trust Account No. ____ / Brokerage Account No. [ ]
Termination Letter
Gentlemen:
Pursuant to Section 1(i) of the Investment Management Trust Agreement
between China Resources Ltd. (the "Company') and American Stock Transfer & Trust
Company (the `Trustee"), dated as of _____, 2007 (the `Trust Agreement"), this
is to advise you that the Board of Directors and stockholders of the Company
have voted to dissolve the Company and liquidate the Trust Account (as defined
in the Trust Agreement). Attached hereto is a copy of the minutes of the meeting
of the Board of Directors of the Company relating thereto, certified by the
Secretary of the Company as true and correct and in full force and effect.
In accordance with the terms of the Trust Agreement, we hereby (a) certify
to you that the provisions of Section 11-51-302(6) and Rule 51-3.4 of the
Colorado Revised Statutes have been met, and (b) authorize you to commence
liquidation of the Trust Account as a part of the Company's plan of dissolution
and distribution. In connection with this liquidation, you are hereby authorized
to establish a record date for the purposes of determining the stockholders of
record entitled to receive their per share portion of the Trust Account. The
record date shall be within ten (10) days of the liquidation date, or as soon as
thereafter as is practicable. You will notify the Company and the paying agent
appointed by the Company _______________ ("Designated Paying Agent") in writing
as to when all of the funds in the Trust Account will be available for immediate
transfer ("Transfer Date"). The Designated Paying Agent shall thereafter notify
you as to the account or accounts of the Designated Paying Agent that the funds
in the Trust Account should be transferred to on the Transfer Date so that the
Designated Paying Agent may commence distribution of such funds in accordance
with terms of the Trust Agreement and the Company's Certificate of
Incorporation,
14
as amended. Upon the payment of all the funds in the Trust Account, the Trust
Agreement shall be terminated and the Trust Account closed.
Very truly yours,
CHINA RESOURCES LTD.
By: ________________________________________
Xxxx Xxxx, Chief Executive Officer
By: ________________________________________
Xxxxxx Nugawela, Chief Financial Officer
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EXHIBIT C
AUTHORIZED INDIVIDUAL(S) AUTHORIZED
FOR TELEPHONE CALL BACK TELEPHONE NUMBER(S)
----------------------- -------------------
Company:
China Resources Ltd.
Xxxx Xxxx China Xxx Xxx Trading Co., Ltd., Room 921,
Block A, Golden Central Tower, Jintian Road, Futian
District, Shenzhen,
P.R. China
Attn: Xxxx Xxxx, Chief Executive Officer
Trustee:
American Stock Transfer & Trust Company
00 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxx, Vice President
Underwriters:
Maxim Group LLC
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx X. Xxxxxx, Director of Investment Banking
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