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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 Morgan Stanley;
(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
<PAGE>
the Company. 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, 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 W R Hambrecht & 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
<PAGE>
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).
<PAGE>
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 hereund
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