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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;
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(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
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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 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 t
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