EXHIBIT 10.5 INVESTMENT MANAGEMENT TRUST AGREEMENT

 

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                                                                    EXHIBIT 10.5

 

                      INVESTMENT MANAGEMENT TRUST AGREEMENT

 

            This Agreement is made as of _____________, 2005 by and between Asia

Automotive Acquisition Corporation (the "Company") and Continental Stock

Transfer & Trust Company ("Trustee").

 

            WHEREAS, the Company's registration statement on Form S-1, No.

333-_______ ("Registration Statement"), for its initial public offering of

securities ("IPO") has been declared effective as of the date hereof by the

Securities and Exchange Commission ("Effective Date"); and

 

            WHEREAS, Rodman & Renshaw, LLC ("Rodman & Renshaw") is acting as the

representative of the underwriters in the IPO; and

 

            WHEREAS, as described in the Registration Statement, and in

accordance with the Company's Certificate of Incorporation, $[________] of the

gross proceeds of the IPO ($[__________] 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 and in the event the Units are registered in Colorado,

pursuant to Section 11-51-302(6) of the Colorado Revised Statutes. A copy of the

Colorado Statute is attached hereto and made a part hereof (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, without limitation, the terms of

Section 11-51-302(6) of the Colorado Statute, 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 instruction of the Company, to

invest and

 

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reinvest the Property in any "Government Security." As used herein, Government

Security means any Treasury Bill issued by the United States, having a maturity

of 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 and Rodman & Renshaw 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 Rodman & Renshaw to do so;

 

            (h) Render to the Company and to Rodman & Renshaw, 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 receipt of

and only in accordance with the terms of a letter ("Termination Letter"), in a

form substantially similar to that attached hereto as either Exhibit A or

Exhibit B, signed on behalf of the Company by its President or Chairman of the

Board and Secretary or Assistant 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. The

Trustee understands and agrees that disbursements from the Trust Account shall

be made only pursuant to a duly executed Termination Letter, together with the

other documents referenced herein. In all cases, the Trustee shall provide

Rodman & Renshaw with a copy of any Termination Letters and/or any other

correspondence that it receives with respect to any proposed withdrawal from the

Trust Account promptly after it receives same.

 

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 paragraph 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

 

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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. 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 paragraph 2(b)

hereof (it being expressly understood that the Property shall not be used to

make any payments to the Trustee under such paragraph).

 

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 paragraph 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 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 paragraph 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;

 

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            (f) The other parties hereto or to anyone else for any action taken

or omitted by it, or any action suffered by it to be taken or omitted, in good

faith and in the exercise of its own best judgment, except for its gross

negligence or willful misconduct. The Trustee may rely conclusively and shall be

protected in acting upon any order, notice, demand, certificate, opinion or

advice of counsel (including counsel cho