Exhibit 10.2
INVESTMENT MANAGEMENT TRUST AGREEMENT
This Agreement is made as of ___________, 2007 by and between China
Pacific Acquisition Corp. (the "Company") and Continental Stock Transfer & Trust
Company (the "Trustee").
WHEREAS, the Company's Registration Statement on Form S-1, as amended,
No. __________ (together with any registration statement filed pursuant to Rule
462(b), 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, _______________, ______________and _______________ (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, $57,000,000 of the gross
proceeds of the IPO and the proceeds of the private offering (as described in
the Registration Statement ($65,650,000 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 $0.0005 per share, issued in the IPO (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, a portion of the Property consists of $1,800,000 (or $2,070,000
if the underwriters' over-allotment option is exercised in full) attributable to
the underwriters' discount which the Representatives have agreed to deposit in
the Trust Account (defined below); 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 accounts ("Trust
Account") established by the Trustee at a branch of JPMorgan Chase NY Bank
selected by the Trustee and Xxxxxx Xxxxxxx;
(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 United States "government securities"
and/or in any open ended money market fund(s) 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. As used herein, "Government Security" means 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, one-half of which income, net of taxes, may be released to
the Company periodically to fund its working capital requirements; and the
remaining income arising from the Property, net of taxes, 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 relating to income from the Property in the Trust Account or otherwise;
(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 in writing to do so;
(h) Render to the Company and to X X Xxxxxxxxx & Co, LLC on
behalf of the Representatives, 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;
(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
(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 Chief Executive Officer 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. Limited Distributions Of Income From Trust Account.
(a) If there is any such 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 taxes; and
(b) Upon written request from the Company in a form substantially
similar to that attached hereto as Exhibit C, which may be given not more than
once in any calendar month, the Trustee shall distribute to the Company by wire
transfer the amount specified in such written
request (which shall be equal to one-half of the income collected on the
Property through the last day of the calendar month immediately preceding the
date of receipt of the Company's request). The first such distribution shall
include income through the first full calendar month following the effective
date of the IPO, with the Company's request made after such date. It is
understood that the Trustee's only responsibility under this section is to
follow the instructions of the Company; and
(c) Except as provided in Section 2(a) and 2(b) above, no other
distributions from the Trust Account shall be permitted except in accordance
with Sections 1(i) and 1(j) 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 Chief Executive Officer or Chairman of the Board. 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) 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 Company may participate in such action
with its own counsel; and
(c) Pay the Trustee an initial acceptance fee, an annual fee and a
transaction processing fee for each disbursement made pursuant to Sections 2(a)
and 2(b) 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 2(b). 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).
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 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,
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;
(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 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
(i) Verify calculations, qualify or otherwise approve Company
requests for distributions pursuant to Section 1(i), 2(a) or 2(b) 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 (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;
(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 3(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 D. 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 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: (000) 000-0000
if to the Company, to:
China Pacific Acquisition Corp.
00/X Xxxxxxx Xxxxx
0 Xxxxxxxxx Xxxxx
Xxxx Xxxx, Xxxxx
Attention: Dato' Sin Just Xxxx
with a copy to:
Reitler Xxxxx & Xxxxxxxxxx LLC
000 Xxxxx Xxxxxx
21st Floor
New York, New Yrok 10022
Attention: Xxxxxx Xxxxxx Xxxxx, Esq.
in either case with a copy on behalf of the Representatives to:
(f) This Agreement may not be assigned by the Trustee without the
prior consent of the Company. This agreement may be assigned by the Company to a
wholly-owned subsidiary of the Company upon written notice to the Trustee.
(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 part of the Property 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]
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:
-----------------------------
China Pacific Aquisition Corp.
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
EXHIBIT A
[LETTERHEAD OF COMPANY]
[INSERT DATE]
Continental Stock Transfer & Trust Company
00 Xxxxxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxx, President
Re: Trust Account No. [___________]
Termination Letter
Gentlemen:
Pursuant to Section 1(j) of the Investment Management Trust Agreement
between China Pacific Acquisition Corp. (the "Company") and Continental 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 ("Business Agreement") with __________________ (the "Target Business")
to consummate a business combination with Target Business (a "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").
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
in writing 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 and
(ii) the Company shall deliver to you written instructions with respect to the
transfer of the funds held in the Trust Account (the "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,
----------------------------------------
By:
-------------------------------------
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 China Pacific Acquisition Corp. (the "Company") and Continental Stock
Transfer & Trust Company (the "Trustee"), dated as of _____________, 2007 (the
"Trust Agreement"), this is to advise you that the Company has been dissolved
due to the Company's inability to effect a business combination within the time
frame specified in the Company's certificate of incorporation and prospectus
relating to its IPO. Attached hereto is a certified copy of the Certificate of
Dissolution as filed with the Delaware Secretary of State.
In accordance with the terms of the Trust Agreement, we hereby authorize
you to commence liquidation of the Trust Account. You will notify the Company
and JPMorgan Chase NY Bank (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.
Very truly yours,
----------------------------------------
By:
-------------------------------------
EXHIBIT C
[LETTERHEAD OF COMPANY]
[INSERT DATE]
Continental Stock Transfer & Trust Company
00 Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: [ ]
Re: Trust Account No. [ ] -- Distribution of Income on Property
Gentlemen:
Pursuant to Section 2(b) of the Investment Management Trust Agreement between
China Pacific Acquisition Corp. ("Company") and Continental Stock Transfer
& Trust Company ("Trustee"), dated as of ________, 2006 ("Trust Agreement"),
we are requesting for our working capital purposes that you deliver to us
$______________ representing one-half the income earned on the Property from
___________ to ___________. In accordance with the terms of the Trust Agreement,
you are hereby directed and authorized to transfer said amount, less any fees
due the Trustee pursuant to Section 3(c) of the Trust Agreement, immediately
upon your receipt of this letter to the Company's operating account at:
Bank: [_______________]
ABA #: [_______________]
Account Name: .
Account Number: [_______________]
Reference: Distribution of Income Earned on Trust Property
Very truly yours,
By:_______________________________________
EXHIBIT D
AUTHORIZED INDIVIDUAL(S) AND TELEPHONE NUMBERS
AUTHORIZED FOR TELEPHONE CALL BACK
COMPANY: China Pacific Acquisition Corp.
00/X Xxxxxxx Xxxxx
0 Xxxxxxxxx Xxxxx
Xxxx Xxxx, Xxxxx
Attention: Dato' Sin Just Xxxx
Telephone: 000-000-0000-0000
TRUSTEE: Continental Stock Transfer & Trust Company
00 Xxxxxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxx, President
Telephone: (000) 000-0000
SCHEDULE A
Schedule of fees pursuant to Section 3(c) of
Investment Management Trust Agreement
between China Pacific Acquisition Corp. and
Continental Stock Transfer & Trust Company
------------------------------ ------------------------------- -----------------
FEE ITEM TIME AND METHOD OF PAYMENT AMOUNT
------------------------------ ------------------------------- -----------------
Initial acceptance fee Initial closing of IPO by $1,000
wire transfer
------------------------------ ------------------------------- -----------------
Annual fee First year, initial closing $3,000
of IPO by wire transfer;
thereafter on the anniversary
of the effective date of the
IPO by wire transfer or check
------------------------------ ------------------------------- -----------------
Transaction processing fee Deduction by Trustee from $250
for disbursements to Company disbursement made to
under Sections 2(a) and 2(b) Company under Section 2(b)
------------------------------ ------------------------------- -----------------
Agreed:
Dated: ____________
China Pacific Acquisition Corp.
By:_______________________________
Authorized Officer
Continental Stock Transfer & Trust Co.
By: _______________________________
Authorized Officer
