EXHIBIT 10.11
INVESTMENT MANAGEMENT TRUST
AGREEMENT
This Agreement (this “
Agreement ”) is made as of
, 2007 by and between 2020 ChinaCap Acquirco, Inc., a Delaware
corporation (the “ Company ”) and LaSalle Bank
National Association, a national banking association (the “
Trustee ”).
WHEREAS, the Company has entered
into an Underwriting Agreement, dated as of _________, 2007 (the
“ Underwriting Agreement ”) with Morgan
Joseph & Co. Inc. (the “ Representative
”), as representative of the underwriters party thereto
(collectively, the “ Underwriters ”), pursuant
to which, among other matters, the Underwriters have agreed to
purchase from the Company, and effect a public offering (the
“ IPO ”) of, 7,500,000 Units (“
Units ”), and up to an additional 1,125,000 Units in
the Underwriters’ over-allotment option is exercised in full.
Each Unit consists of one share of the Company’s common
stock, par value $.0001 per share (“ Common Stock
”), and one Warrant to purchase one share of Common Stock,
all as more fully described in the Company’s final Prospectus
comprising part of the Company’s Registration Statement on
Form S-1 (File No. 333
) under the Securities Act of 1933, as amended (“
Registration Statement ”);
WHEREAS, the Registration Statement
has been declared effective as of the date hereof by the Securities
and Exchange Commission (“ Effective Date
”);
WHEREAS, as described in the
Registration Statement, $_________ of proceeds from the IPO, net of
all discounts and commissions, including the Deferred Compensation
(as defined below), and expenses of the IPO (and such amount may be
up to $
, if the Underwriters’ over-allotment option is exercised in
full) (the “ IPO Proceeds ”) 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 Common Stock (the
“ Public Stockholders ” and, together with the
Company and the Representative, the “ Beneficiaries
”) issued in the IPO as part of the Units (such shares,
excluding shares of Common Stock issued upon exercise of Warrants
issued in the IPO, are referred to as the “ IPO Shares
”);
WHEREAS, pursuant to the Warrant
Purchase Agreement dated as of __________, 2007 among the Company
and certain purchasers, the entire proceeds of the private
placement of warrants with the Company’s purchasers, equal to
$1,500,000 (the “ Warrant Proceeds ”), will be
delivered to the Trustee to be deposited and held in the Trust
Account (as defined below);
WHEREAS, pursuant to the
Underwriting Agreement an additional $1,200,000 representing a
portion of the underwriters’ discount (the “
Deferred Compensation ” and, collectively with the IPO
Proceeds and the Warrant Proceeds, the “ Property
”) which the Representative, on behalf of the underwriters,
has agreed to deposit into the Trust Account (as 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
established by the Trustee in its Global Escrow Services Department
with offices at 135 South LaSalle Street, Suite 1563, Chicago, IL
60603 (the “ Trust Account ”);
(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, 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 180 or less or any open ended
investment company selected by the Company and registered under the
Investment Company Act of 1940 that holds itself out as a money
market fund meeting the conditions of paragraphs (c)(2), (c)(3) and
(c)(4) under 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”;
(e) Notify the Company and the
Representative 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 its tax returns so as to reflect
income earned on Trust Account investments;
(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 the Representative;
(h) Render to the Company and to the
Representative, and to such other persons as the Company may from
time to time instruct, monthly written statements of the activities
of and amounts in the Trust Account reflecting all receipts and
disbursements of the Trust Account;
(i) Upon receipt of a letter in a
form substantially similar to that attached hereto as either
Exhibit A or Exhibit B (a “ Termination
Letter ”), signed on behalf of the Company by its Chief
Executive Officer or Chairman of the Board and, in the case of a
Termination Letter substantially in the form of Exhibit A, affirmed
by a majority of its Board of Directors, comply with the
instructions set forth in the letter regarding the liquidation of
the Trust Account, including distribution of the Property in the
Trust Account only as directed in the Termination Letter and the
other documents referred to therein (which distribution shall
include, in the event of a Business Combination, payment of the
Deferred Compensation to the Representative); and
(j) If the Trustee shall not have
received a Termination Letter on or prior to the Distribution Date,
promptly following the Distribution Date the Trustee shall
liquidate the Trust Account in accordance with the procedures set
forth in the Termination Letter attached as Exhibit B to the
Public Stockholders of record as of a record date fixed by the
Trustee, which record date shall be ten days after the Distribution
Date, or as soon thereafter as is practicable. For purposes of this
Agreement, the “ Distribution Date ” shall mean
the date that is two years from the Effective Date.
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2. Limited Distributions of
Income on Property .
(a) Upon written instructions from
the Company, the Trustee will deliver to the Company, on a
quarterly basis, from the Property in the Trust Account, an amount
equal to the taxes payable by the Company, if any, relating to
interest earned on the Property; provided , however ,
that in no event shall the Company direct the Trustee to disburse
amounts pursuant to this Section 2(a) that exceed the income
in respect of which such taxes are due and owing.
(b) Upon written request from the
Company, which may be given from time to time but which may be
given not more than once in any calendar month period, the Trustee
shall distribute to the Company an amount requested by the Company
and certified by the Company to be equal to the income earned on
the Property, net of taxes payable through the last day of the
month immediately preceding the date of receipt of the
Company’s request; provided , however , that
the maximum cumulative amount of distributions, net of taxes, that
the Company may request and the Trustee shall distribute pursuant
to this Section 2(b) shall be $1,200,000.
(c) Except as provided in Sections
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 an Authorized Individual.
The “ Authorized Individuals ” shall be those
individuals from time to time designated in writing to the Trustee
by the Company as “Authorized Officers,” provided that
each such individual must be an executive officer or Chairman of
the Board of the Company. The initial Authorized Individuals are
identified in Exhibit C to this Agreement. 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
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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 ,
however , 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. The foregoing indemnities shall extend to the
officers, directors and employees of the Trustee and survive the
termination of this Agreement and the resignation or removal of the
Trustee.
(c) Pay the Trustee an initial
acceptance fee of $1,500 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 upon the execution of the Agreement
and thereafter the Company shall pay the Trustee the annual fee on
each anniversary thereof. The Trustee shall refund to the Company
the fee (on a six month proration 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 3(b) of this Agreement (it being
expressly understood that the Property shall not be used to make
any payments to the Trustee under such paragraph). Notwithstanding
the foregoing, it is agreed that the Company shall promptly
reimburse the Trustee for reasonable legal, accounting and related
expenses reasonably incurred by the Trustee in connection with the
discharge of its obligations under Section 1(g)
hereof.
(d) Within five business days after
the Representative’s over-allotment option (or any
unexercised portion thereof) expires or is exercised in full,
provide the Trustee notice in writing (with a copy to the
Representative) of the total amount of the Deferred Compensation,
which shall in no event be less than $1,000,000.
(e) Prov
