INVESTMENT MANAGEMENT TRUST AGREEMENT
Exhibit
10.6
This
Agreement is made as of ___________, 2008 by and between New Asia Partners
China
Corporation (the “Company”) and Continental Stock Transfer & Trust Company
(“Trustee”).
WHEREAS,
the Company’s registration statement on Form S-1, No. 333-147741 (“Registration
Statement”), for its initial public offering of securities (“IPO”) has been
declared effective as of the date hereof (“Effective Date”) by the Securities
and Exchange Commission (capitalized terms used herein and not otherwise defined
shall have the meanings set forth in the Registration Statement);
and
WHEREAS,
Maxim Group LLC (“Maxim”) acting as the representatives of the underwriters in
the IPO; and
WHEREAS,
as described in the Registration Statement, and in accordance with the Company’s
Amended and Restated Certificate of Incorporation, $12,005,500 of the net
proceeds of the IPO and sale of the Insider Warrants (or $13,805,750 if the
underwriters’ over-allotment option is exercised in full) will be delivered to
the Trustee to be deposited and held in a trust account for the benefit of
the
Company and the holders of the Company’s common stock, par value $.0001 per
share, issued in the IPO as hereinafter provided (the amount to be delivered
to
the Trustee will be referred to herein as the “Property”, the stockholders for
whose benefit the Trustee shall hold the Property will be referred to as the
“Public Stockholders,” and the Public Stockholders and the Company will be
referred to together as the “Beneficiaries”); and
WHEREAS,
pursuant to the Underwriting Agreement between the Company and Maxim, on behalf
of the underwriters, a portion of the Property equal to $245,000 (or the amount
specified in a notice pursuant to paragraph 3(f) hereof) is attributable to
deferred underwriting commissions that will become payable by the Company to
Maxim upon the consummation of an Initial Business Combination (as defined
in
the Registration Statement) (the “Deferred Discount”); and
WHEREAS,
the Company and the Trustee desire to enter into this Agreement to set forth
the
terms and conditions pursuant to which the Trustee shall hold the
Property;
IT
IS
AGREED:
1.
Agreements
and Covenants of Trustee
. The
Trustee hereby agrees and covenants to:
(a)
Hold the Property in trust for the Beneficiaries in accordance with
the terms of this Agreement in a segregated trust account (“Trust Account”)
established by the Trustee;
(b)
Manage, supervise and administer the Trust Account subject to the
terms and conditions set forth herein;
(c)
In a timely manner, upon the instruction of the Company, to invest
and reinvest the Property in United States “government securities” within the
meaning of Section 2(a)(16) of the Investment Company Act of 1940 having a
maturity of 180 days or less, and/or in any open ended investment company
registered under the Investment Company Act of 1940 that holds itself out as
a
money market fund selected by the Company meeting the conditions of paragraphs
(c)(2), (c)(3) and (c)(4) of Rule 2a-7 promulgated under the Investment Company
Act of 1940, as determined by the Company;
(d)
Collect and receive, when due, all principal and income arising
from the Property, which shall become part of the “Property,” as such term is
used herein;
(e)
Notify the Company and Maxim of all communications received by it
with respect to any Property requiring action by the Company;
(f)
Supply any necessary information or documents as may be requested
by the Company in connection with the Company’s preparation of the tax returns
for the Trust Account;
(g)
Participate in any plan or proceeding for protecting or enforcing
any right or interest arising from the Property if, as and when instructed
by
the Company and/or Maxim to do so;
(h)
Render to the Company, Maxim and to such other person as the
Company may instruct, monthly written statements of the activities of and
amounts in the Trust Account reflecting all receipts and disbursements of the
Trust Account; and
(i)
Commence liquidation of the Trust Account only after and promptly
after receipt of, and only in accordance with, the terms of a letter
(“Termination Letter”), in a form substantially similar to that attached hereto
as either Exhibit A or Exhibit B hereto, signed on behalf of the Company by
its
Chief Executive Officer, President or Chairman of the Board and Corporate
Secretary or other authorized officer of the Company, and complete the
liquidation of the Trust Account and distribute the Property in the Trust
Account only as directed in the Termination Letter and the other documents
referred to therein; provided, however, that in the event that a Termination
Letter has not been received by the Trustee by the close of business on the
“business day” that is the 30-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
as Exhibit B hereto and distributed to the stockholders of record on the Last
Date. The provisions of this Section 1(i) may not be modified, amended or
deleted under any circumstances.
2.
Limited
Distributions of Income from Trust Account
.
(a)
Upon written request from the Company, which may be given from time
to time in a form substantially similar to that attached hereto as Exhibit
C,
the Trustee shall distribute to the Company by means of a bank wire transfer,
the amount requested by the Company to cover expenses related to investigating
and selecting a target business and other working capital requirements;
provided, however, that the Company will not be allowed to withdraw interest
income earned on the Trust Account unless the amount remaining in the Trust
Account after such withdrawal is at least an amount equal to $6.86 per share
multiplied by the number of shares of the Company’s common stock sold in the
IPO; and
(b)
The limited distributions referred to in Sections 2(a) above shall
be made only from income collected on the Property. Except as provided in
Section 2(a) above, no other distributions from the Trust Account shall be
permitted except in accordance with Section 1(i) hereof.
3.
Agreements
and Covenants of the Company
. The
Company hereby agrees and covenants to:
(a)
Give all instructions to the Trustee hereunder in writing, signed
by the Company’s Chairman of the Board or President or other authorized officer.
In addition, except with respect to its duties under paragraphs 1(i) and 2(a)
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)
In all cases, the Company shall provide Maxim with a copy of any
Termination Letters and/or any other correspondence that it sends to the Trustee
with respect to any proposed withdrawal from the Trust Account promptly after
it
issues same.
(c)
Hold the Trustee harmless and indemnify the Trustee from and
against, any and all expenses, including reasonable counsel fees and
disbursements, or loss suffered by the Trustee in connection with any action,
suit or other proceeding brought against the Trustee involving any claim, or
in
connection with any claim or demand which in any way arises out of or relates
to
this Agreement, the services of the Trustee hereunder, or the Property or any
income earned from investment of the Property, except for expenses and losses
resulting from the Trustee’s gross negligence or willful misconduct. Promptly
after the receipt by the Trustee of notice of demand or claim or the
commencement of any action, suit or proceeding, pursuant to which the Trustee
intends to seek indemnification under this paragraph, it shall notify the
Company in writing of such claim (hereinafter referred to as the “Indemnified
Claim”). The Trustee shall have the right to conduct and manage the defense
against such Indemnified Claim, provided, that the Trustee shall obtain the
consent of the Company with respect to the selection of counsel, which consent
shall not be unreasonably withheld. The Trustee may not agree to settle any
Indemnified Claim without the prior written consent of the Company, which
consent shall not be unreasonably withheld. The Company may participate in
such
action with its own counsel;
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(d)
Pay the Trustee an initial acceptance fee, an annual fee and a
transaction processing fee for each disbursement made pursuant to Section 2
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 unless and until it is distributed to the
Company pursuant to Section 2. The Company shall pay the Trustee the initial
acceptance fee and first year’s fee at the consummation of the IPO and
thereafter on the anniversary of the Effective Date. The Trustee shall refund
to
the Company the annual 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 set forth in this Section
3(c) and 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 Sections, except to the extent it is distributed to the
Company pursuant to Section 2);
(e)
In connection with any vote of the Company’s stockholders regarding
a Business Combination or an Extension Period (as described in the Registration
Statement), provide to the Trustee an affidavit or certificate of a firm
regularly engaged in the business of soliciting proxies and/or tabulating
stockholder votes verifying the vote of the Company’s stockholders regarding
such Business Combination; and
(f)
Within five business days after Maxim’s over-allotment option
(or any unexercised portion thereof) expires or is exercised in full, provide
the Trustee with a notice in writing (with a copy to Maxim) of the total amount
of the Deferred Discount, which shall in no event be less than $245,000. A
business day shall be any day that is not a Saturday, Sunday or other day on
which banks are required or authorized by law to be closed in the City of New
York.
4.
Limitations
of Liability
. The
Trustee shall have no responsibility or liability to:
(a)
Imply obligations, perform duties, inquire or otherwise subject to
the provisions of any agreement or document other than this agreement and that
which is expressly set forth herein;
(b)
Take any action with respect to the Property, other than as
directed in paragraphs 1 and 2 hereof and the Trustee shall have no liability
to
any party except for liability arising out of its own gross negligence or
willful misconduct;
(c)
Institute any proceeding for the collection of any principal and
income arising from, or institute, appear in or defend any proceeding of any
kind with respect to, any of the Property unless and until it shall have
received instructions from the Company given as provided herein to do so and
the
Company shall have advanced or guaranteed to it funds sufficient to pay any
expenses incident thereto;
(d)
Change the investment of any Property, other than in compliance
with paragraph 1(c);
(e)
Refund any depreciation in principal of any Property;
(f)
Assume that the authority of any person designated by the Company
to give instructions hereunder shall not be continuing unless provided otherwise
in such designation, or unless the Company shall have delivered a written
revocation of such authority to the Trustee;
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(g)
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;
(h)
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; and
(i)
File information returns with the United States Internal Revenue
Service and payee statements with the Company, documenting the taxes payable
by
the Company, if any, relating to interest earned on the Property. Prepare,
execute and file tax reports, income or other tax returns and pay any taxes
with
respect to income and activities relating to the Trust Account, regardless
of
whether such tax is payable by the Trust Account or the Company (including
but
not limited to income tax obligations), it being expressly understood that
as
set forth in Section 2(a), if there is any income or other tax obligation
relating to the Trust Account or the Property in the Trust Account, as
determined from time to time by the Company and regardless of whether such
tax
is payable by the Company or the Trust, at the written instruction of the
Company, the Trustee shall make funds available in cash from the Property in
the
Trust Account an amount specified by the Company as owing to the applicable
taxing authority, which amount shall be paid directly to the Company by
electronic funds transfer, account debit or other method of payment, and the
Company shall forward such payment to the taxing authority;
(j)
Verify calculations, qualify or otherwise approve Company requests
for distributions pursuant to Section 1(i)or 2(a) above.
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 any court in
the
State of New York or 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; or
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(b)
At such time that the Trustee has completed the liquidation of the
Trust Account in accordance with the provisions of paragraph 1(i) hereof, and
distributed the Property in accordance with the provisions of the Termination
Letter, this Agreement shall terminate except with respect to Paragraph
3(b).
6.
Miscellaneous.
(a)
The Company and the Trustee each acknowledge that 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 original
or facsimile 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. Except for Section
1(i) (which may not be amended under any circumstances), 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 may be made without the prior written consent of Maxim. As to
any
claim, cross—claim or counterclaim in any way relating to this Agreement, each
party waives the right to trial by jury.
(d)
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.
(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:
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if
to the Trustee, to:
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Continental
Stock Transfer & Trust Company
00
Xxxxxxx Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attn:
Xxxxxx X. Xxxxxx
Fax
No.: (000) 000-0000
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if
to the Company, to:
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New
Asia Partners China Corporation
0000-00
Xxxxx Insurance Building
166
Lu Jia Zui Xxxx Xx
Xxxxxx,
Xxxxxxxx, 000000, Xxxxx
Attn:
Chief Executive Officer
Fax
No.: 8621-5879-8153
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in
either case with a copy to:
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Maxim
Group LLC
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attn:
[____]
Fax
No.: [_____]
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(f)
This Agreement may not be assigned by the Trustee without the prior
consent of the Company and Maxim.
(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.
(h)
Each of the Company and the Trustee hereby acknowledge that Maxim
is the third party beneficiarie of this Agreement.
[SIGNATURES
ON FOLLOWING PAGE]
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IN
WITNESS WHEREOF, the parties have duly executed this Investment Management
Trust
Agreement as of the date first written above.
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CONTINENTAL
STOCK TRANSFER & TRUST
COMPANY, as Trustee |
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By:
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Name:
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Title:
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NEW
ASIA PARTNERS CHINA CORPORATION
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By:
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Name:
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Title:
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SCHEDULE
A
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Fee
Item
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Time
and method of payment
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Amount
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Initial
acceptance fee
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Initial
closing of IPO by wire transfer
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$
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[_____
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]
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Annual
fee
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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
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$
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[_____
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]
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Transaction
processing fee for disbursements to Company under Section
2
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Deduction
by Trustee from accumulated income following disbursement made to
Company
under Section 2
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$
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[_____
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]
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EXHIBIT
A
[Letterhead
of Company]
[Insert
date]
Continental
Stock Transfer
&
Trust Company
00
Xxxxxxx Xxxxx
Xxx
Xxxx
Xxx Xxxx 00000
Attn:
Xxxxxx Xxxxxx
Re:
Trust Account No. Termination Letter
Gentlemen:
Pursuant
to paragraph 1(i) of the Investment Management Trust Agreement between New
Asia
Partners China Corporation (“Company”) and Continental Stock Transfer &
Trust Company (“Trustee”), dated as of ____________, 2008 (“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”).
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 the Business Combination has been consummated (“Counsel’s
Letter”) (ii) the Company shall deliver to you (a) [an affidavit] [a
certificate] of __________________which verifies the vote of the Company’s
stockholders in connection with the Business Combination and (b) written
instructions with respect to the transfer of the funds held in the Trust Account
other than the Deferred Discount (“Instruction Letter”) and (iii) Maxim shall
deliver to you written instructions for delivery of the Deferred Discount.
You
are hereby directed and authorized to transfer the funds held in the Trust
Account immediately upon your receipt of the Counsel’s Letter and the
Instruction Letter, (a) to Maxim in an amount equal to the Deferred Discount
as
so directed by them, and (b) the remainder in accordance with the terms of
the
Instruction Letter. 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 of the same and the Company shall direct you as to whether such
funds should remain in the Trust Account and distributed after the Consummation
Date to the Company. Upon the distribution of all the funds in the Trust Account
pursuant to the terms hereof, the Trust Agreement shall be terminated and the
Trust Account closed.
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 Trustee’s
receipt of a written request from the Company, the funds held in the Trust
Account shall be reinvested as provided in the Trust Agreement on the business
day immediately following the original Consummation Date as set forth in the
notice.
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Very
truly yours,
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NEW
ASIA PARTNERS CHINA CORPORATION
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By:
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Name:
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Title:
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cc:
Maxim Group LLC
EXHIBIT
B
[Letterhead
of Company]
[Insert
date]
Continental
Stock Transfer
&
Trust Company
00
Xxxxxxx Xxxxx
Xxx
Xxxx
Xxx Xxxx 00000
Attn:
Xxxxxx Xxxxxx
Re:
Trust Account No. Termination Letter
Gentlemen:
Pursuant
to paragraph 1(i) of the Investment Management Trust Agreement between New
Asia
Partners China Corporation (“Company”) and Continental Stock Transfer &
Trust Company (“Trustee”), dated as of ______________, 2008 (“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 authorize you,
to
commence liquidation of the Trust Account as promptly as practicable. The
Company has appointed [__________________] to serve as its Designated Paying
Agent; accordingly, you will notify the Company and the “Designated Paying
Agent” in writing as to when all of the funds in the Trust Account will be
available for immediate transfer (the “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 the Company’s
instructions. You shall have no obligation to oversee the Designated Paying
Agent’s distribution of the funds. Upon the payment to the Designated Paying
Agent of all the funds in the Trust Account, the Trust Agreement shall terminate
in accordance with the terms thereof.
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Very
truly yours,
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NEW
ASIA PARTNERS CHINA CORPORATION
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By:
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Name:
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Title:
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cc:
Maxim Group LLC
EXHIBIT
C
[Letterhead
of Company]
[Insert
date]
Continental
Stock Transfer
&
Trust Company
00
Xxxxxxx Xxxxx
Xxx
Xxxx
Xxx Xxxx 00000
Attn:
Xxxxxx Xxxxxx
Re:
Trust Account No.
Gentlemen:
Pursuant
to paragraph 2(a) of the Investment Management Trust Agreement between New
Asia
Partners China Corporation (“Company”) and Continental Stock Transfer &
Trust Company (“Trustee”), dated as of ______________, 2008 (“Trust Agreement”),
the Company hereby requests that you deliver to the Company $____________ of
the
income earned on the Property as of the date hereof, which does not exceed,
in
the aggregate with all such prior disbursements pursuant to paragraph 2(a),
if
any, the maximum amount set forth in paragraph 2(a). The Company needs such
funds to pay its expenses relating to investigating and selecting a target
business and other working capital requirements. In accordance with the terms
of
the Trust Agreement, you are hereby directed and authorized to transfer (via
wire transfer) such funds promptly upon your receipt of this letter to the
Company’s operating account at: [WIRE
INSTRUCTION INFORMATION]
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Very
truly yours,
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NEW
ASIA PARTNERS CHINA CORPORATION
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By:
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Name:
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Title:
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cc:
Maxim Group LLC
EXHIBIT
D
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AUTHORIZED
INDIVIDUAL(S) FOR
TELEPHONE
CALL BACK
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AUTHORIZED
TELEPHONE
NUMBER(S)
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Company:
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New
Asia Partners China Corporation
0000-00
Xxxxx Insurance Building
166
Lu Jia Zui Xxxx Xx
Xxxxxx,
Xxxxxxxx, 000000, Xxxxx
Attn :
Chief Executive Officer
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(00-00)
0000-0000
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Trustee:
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Continental
Stock Transfer & Trust Company
00
Xxxxxxx Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attn:
[_____]
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(000)
000-0000
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