Exhibit 10.2
INVESTMENT MANAGEMENT TRUST AGREEMENT
This Agreement is made as of ___________, 2005 by and between Confluence
Acquisition Partners I, Inc. (the "Company") and Continental Stock Transfer &
Trust Company (the "Trustee").
WHEREAS, the Company's Registration Statement on Form S-1, No. 333-126457
(the "Registration Statement"), for its initial public offering of securities
(the "IPO") has been declared effective as of the date hereof by the Securities
and Exchange Commission (the "Effective Date"); and
WHEREAS, Xxxxxx Xxxxx Securities, Inc. and Xxxx Capital Partners, LLC (the
"Representatives") are 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 Certificate of Incorporation, $42,400,000 of the gross
proceeds of the IPO ($48,760,000 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 for the benefit of the Company and the holders of the Company's
common stock, par value $.01 per share, issued in the IPO and in the event the
Units are registered in Colorado pursuant to Section 11-51-302(6) of the
Colorado Revised Statutes (the amount to be delivered to the Trustee will be
referred to herein as the "Property"; the stockholders for whose benefit the
Trustee shall hold the Property will be referred to as the "Public
Stockholders," and the Public Stockholders and the Company will be referred to
together as the "Beneficiaries"); and
WHEREAS, the Company and the Trustee desire to enter into this Agreement
to set forth the terms and conditions pursuant to which the Trustee shall hold
the Property;
IT IS AGREED:
1. Agreements and Covenants of Trustee. The Trustee hereby agrees and
covenants to:
(a) Hold the Property in trust for the Beneficiaries in accordance with
the terms of this Agreement, including the terms of Section 11-51-302(6) of the
Colorado Revised Statutes, in a segregated trust account ("Trust Account")
established by the Trustee at a branch of JPMorgan Chase NY Bank selected 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 written instruction of the Company, to
invest and reinvest the Property in any "Government Security." As used herein,
Government Security shall have the meaning set forth in Section 2(a)(16) of the
Investment Company Act of 1940, as amended, including any Treasury Xxxx issued
by the United States, having a maturity of one hundred and eighty days or less;
(d) Collect and receive, when due, all principal and income arising from
the Property, which shall become part of the "Property," as such term is used
herein;
(e) Notify the Company of all communications received by it with respect
to any Property requiring action by the Company;
(f) Supply any necessary information or documents as may be requested by
the Company in connection with the Company's preparation of 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 to do so;
(h) Render to the Company and to the Representatives, and to such other
person as the Company may instruct in writing, monthly written statements of the
activities of and amounts in the Trust Account reflecting all receipts and
disbursements of the Trust Account;
(i) If there is any income or other tax obligation relating to the income
from the Property in the Trust Account or otherwise, in each case 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 pay such
amounts by the issuance of a check directly to the taxing authorities designated
by the Company, out of the Property in the Trust Account, for the amount
indicated by the Company as owing to each such taxing authority;
(j) Commence liquidation of the Trust Account only upon receipt of and
only in accordance with the terms of a letter (the "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 President or Chairman of the
Board and Secretary, 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.
2. Agreements and Covenants of the Company. The Company hereby agrees and
covenants to:
(a) Give all instructions to the Trustee hereunder in writing, signed by
the Company's President or Chairman of the Board. In addition, except with
respect to its duties under Section 1(j) above, the Trustee shall be entitled
to rely on, and shall be protected in relying on, any verbal or telephonic
advice or instruction which it in good faith believes to be given by any one of
the persons authorized above to give written instructions, provided that the
Company shall promptly confirm such instructions in writing;
(b) Hold the Trustee harmless and indemnify the Trustee from and against,
any and all expenses, including reasonable counsel fees and disbursements, or
loss suffered by the Trustee in connection with any action, suit or other
proceeding brought against the Trustee involving any claim, or in connection
with any claim or demand which in any way arises out of or relates to this
Agreement, the services of the Trustee hereunder, or the Property or any income
earned from investment of the Property, except for expenses and losses resulting
from the Trustee's gross negligence or willful misconduct. Promptly after the
receipt by the Trustee of notice of demand or claim or the commencement of any
action, suit or proceeding, pursuant to which the Trustee intends to seek
indemnification under this paragraph, it shall notify the Company in writing of
such claim (hereinafter referred to as the "Indemnified Claim"). The Trustee
shall have the right to conduct and manage the defense against such Indemnified
Claim, provided, that the Trustee shall obtain the consent of the Company with
respect to the selection of
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counsel, which consent shall not be unreasonably withheld. The Company may
participate in such action with its own counsel; and
(c) Pay the Trustee an initial acceptance fee of $1,000 and an annual fee
of $3,000 (it being expressly understood that the Property shall not be used to
pay such fee). The Company shall pay the Trustee the initial acceptance fee and
first year's fee at the consummation of the IPO and thereafter on the
anniversary of the Effective Date. The Trustee shall refund to the Company the
fee (on a pro rata basis) with respect to any period after the liquidation of
the Trust Fund. The Company shall not be responsible for any other fees or
charges of the Trustee except as may be provided in section 2(b) hereof (it
being expressly understood that the Property shall not be used to make any
payments to the Trustee under such sections).
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 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 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;
(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, judgment, instruction, 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,
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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; and
(h) As and to the extent requested from time to time by the Company,
prepare, execute and file such 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 1(i), 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 issue a check directly to the
taxing authorities designated by the Company, out of the Property in the Trust
Account, for the amount indicated by the Company as owing to each such taxing
authority.
4. 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;
(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).
5. 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,
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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 but one instrument.
(c) This Agreement contains the entire agreement and understanding of the
parties hereto with respect to the subject matter hereof. The parties hereto may
change, waive, amend or modify any provision contained herein that may be
defective or inconsistent with any other provision contained herein only upon
the written consent of each of the parties hereto; provided that such action
shall not materially adversely affect the interests of the Public Stockholders.
Any other change, waiver, amendment or modification to this Agreement shall be
subject to approval by a majority 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.
(d) The parties hereto consent to the jurisdiction and venue of any state
or federal court located in the City of New York 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:
if to the Trustee, to:
Continental Stock Transfer & Trust Company
00 Xxxxxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xx. Xxxxx Di Paolo, CFO
Fax No.: (000) 000-0000
if to the Company, to:
Confluence Acquisition Partners I, Inc.
00000 Xxxxxxxxxxx Xxxxx
Xxxxx 000
Xx. Xxxxx, XX 00000
Attn: Xx. Xxxx X. Xxxxxxx, President
Fax: (000) 000-0000
with a copy to:
Xxxxxxxx Xxxxxx, LLP
0000 X. Xxxxxx, X.X., Xxx. 000
Xxxxxxxxxx, XX. 20036
Attn: Xxxxxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
in either case with a copy on behalf of
the Representatives to:
Xxxxxx Xxxxx Securities, Inc.
000 Xxxxx Xxxxxxx Xxxxxxx
5
6th Floor
Xxxx Xxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
Fax: (000) 000-0000
Xxxx Capital Partners LLC
00 Xxxxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attn: Xxxxxx Xxxxxxxxxxxxxxx
Fax: (000) 000-0000
(f) This Agreement may not be assigned by the Trustee without the prior
consent of the Company.
(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) The Trustee hereby consents to the inclusion of Continental Stock
Transfer & Trust Company in the Registration Statement and other materials
relating to the IPO.
[Signature page follows]
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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: _________________________________
CONFLUENCE ACQUISITION
PARTNERS I, INC.
By: ____________________________________
Name: Xxxx X. Xxxxxxx
Title: President
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EXHIBIT A
[LETTERHEAD OF COMPANY]
[INSERT DATE]
Continental Stock Transfer & Trust Company
00 Xxxxxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Di Paolo, CFO
Re: Trust Account No. [___________] Termination Letter
Gentlemen:
Pursuant to Section 1(j) of the Investment Management Trust Agreement
between Confluence Acquisition Partners I, Inc. ("Company") and Continental
Stock Transfer & Trust Company ("Trustee"), dated as of _____________, 2005
("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
and direct 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 in writing 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 Colorado
Revised Statutes have been met and (ii) the Company shall deliver to you written
instructions with respect to the transfer of the funds held in the Trust Account
("Instruction Letter"). 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. 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.
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,
CONFLUENCE ACQUISITION PARTNERS I, INC.
By: ___________________________________
NAME
TITLE
By: ___________________________________
NAME
TITLE
EXHIBIT B
[LETTERHEAD OF COMPANY]
[INSERT DATE]
Continental Stock Transfer & Trust Company
00 Xxxxxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Di Paolo, CFO
Re: Trust Account No. [_________] Termination Letter
Gentlemen:
Pursuant to paragraph 1(j) of the Investment Management Trust Agreement
between Confluence Acquisition Partners I, Inc. ("Company") and Continental
Stock Transfer & Trust Company ("Trustee"), dated as of _____________, 2005
("Trust Agreement"), this is to advise you that the Board of Directors of the
Company has voted to dissolve and liquidate the Company due to the Company's
inability to effect a Business Combination with a Target Company within the time
frame specified in the Company's prospectus relating to its IPO. 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 and direct you to
commence liquidation of the Trust Account. 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 thereafter as is practicable. You will notify
the Company and JPMorgan Chase NY Bank ("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 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.
Very truly yours,
CONFLUENCE ACQUISITION PARTNERS I, INC.
By: ___________________________________
NAME
TITLE
By: ___________________________________
NAME
TITLE
EXHIBIT C
AUTHORIZED INDIVIDUAL(S) AND TELEPHONE NUMBERS
AUTHORIZED FOR TELEPHONE CALL BACK
COMPANY: Confluence Acquisition Partners I, Inc.
00000 Xxxxxxxxxxx Xxxxx
Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxxx, Chief Executive Officer
Telephone: (000) 000-0000
TRUSTEE: Continental Stock Transfer & Trust Company
00 Xxxxxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Di Paolo, CFO
Telephone: (000) 000-0000
