<PAGE>
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 ("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,
Dawson James Securities, Inc. (the "Representative") 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, $42,400,000 of the gross
proceeds of the IPO ($49,168,000 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 (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 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
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;
<PAGE>
(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 Representative, 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, 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 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 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
2
<PAGE>
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 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;
(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 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
