Filed by Bowne Pure Compliance



 




Exhibit 10.2




INVESTMENT MANAGEMENT TRUST AGREEMENT




This Agreement is made as of June 8, 2006 by and between Community Bankers 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. 333-124240
(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, I-Bankers Securities Incorporated (“I-Bankers”), Maxim Group LLC and Legend Merchant
Group, Inc. (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, $56,450,000 of the gross proceeds of the IPO ($65,090,000 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, a portion of the Property consists of $2,100,000 (or $2,415,000 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 account (“Trust Account”) established by the Trustee at a branch
of JPMorgan Chase NY Bank or Morgan Stanley 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 written instruction of the Company, to invest and reinvest
the Property in any “Government Security” or in money market funds selected by the Company meeting
the conditions specified in Rule 2a-7 promulgated under the Investment
Company Act of 1940, as amended, as determined by 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;


 


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(d) Collect and receive, when due, all principal and income arising from the Property,
one-half of which income, net of taxes, shall become part of the “Property,” as such term is used
herein; and the remaining income arising from the Property, net of taxes, up to $1,129,000
($1,302,000 in the event of the exercise of the over allotment option in full) may be released to
the Company periodically to fund its working capital requirements;



(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 I-Bankers 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 or otherwise, in each case 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 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. Limited Distributions Of Income From Trust Account.



(a) If there is any income 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


 


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(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 quarter, the
Trustee shall distribute to the Company by wire transfer an amount equal to one-half of the
income collected on the Property through the last day of the calendar quarter immediately preceding
the date of receipt of the Company’s request; provided, however, that the maximum amount of
distributions, net of taxes, that the Company may request and the Trustee shall distribute pursuant
to this Section 2(b) shall be $1,129,000 or $1,302,000 if the over-allotment is exercised by the
underwriters. The first such distribution shall include income through the first full calendar
quarter 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
President 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;



(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);


 


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(d) Provide to the Trustee a copy of any letter of intent, agreement in principle or
definitive agreement that is executed by the Company prior to the conclusion of 18 months following
consummation of the IPO; and



(e) Provide to the Trustee a copy of the certified oath and report of an independent inspector
of election in respect of the stockholder vote at the meeting called by the Company to consider and
act upon any proposed Business Combination.



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
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, judgment, instruction, 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 to the truth and acceptability of any information
therein contained) which is believed by the Trustee, in good faith, to be genuine and to be signed
or presented by the proper person or persons. The Trustee shall not be bound by any notice or
demand, or any waiver, modification, termination or rescission of this agreement or any of the
terms hereof, unless evidenced by a written instrument delivered to the Trustee signed by the
proper party or parties and, if the duties or rights of the Trustee are affected, unless it shall
give its prior written consent thereto;


 


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(g) Verify the correctness of the information set forth in the Registration Statement or to
confirm or assure that any acquisition made by the Company or any other action taken by it is as
contemplated by the Registration Statement;



(h) As and to the extent requested from time to time by the Company, prepare, execute and file
such tax reports, income or other tax returns and pay any taxes with respect to income and
activities relating to the Trust Account, regardless of whether such tax is payable by the Trust
Account or the Company (including but not limited to income tax obligations), it being expressly
understood that as set forth in Section 1(i), if there is any income or other tax obligation
relating to the Trust Account or the Property in the Trust Account, as determined from time to time
by the Company and regardless of whether such tax is payable by the Company or the Trust, at the
written instruction of the Company, the Trustee shall issue a check directly to the taxing
authorities designated by the Company, out of the Property in the Trust Account, for the amount
indicated by the Company as owing to each such taxing authority; and



(i) Verify calculations, qualify or otherwise approve Company requests for distributions
pursuant to Section 1(i), 2(a) or 2(b) above.



5. Termination. This Agreement shall terminate as follows:



(a) If the Trustee gives written notice to the Company that it desires to resign under this
Agreement, the Company shall use its reasonable efforts to locate a successor trustee. At such time
that the Company notifies the Trustee that a successor trustee has been appointed by the Company
and has agreed to become subject to the terms of this Agreement, the Trustee shall transfer the
management of the Trust Account to the successor trustee, including but not limited to the transfer
of copies of the reports and statements relating to the Trust Account, whereupon this Agreement
shall terminate; provided, however, that, in the event that the Company does not locate a successor
trustee within ninety days of receipt of the resignation notice from the Trustee, the Trustee may
submit an application to have the Property deposited with the United States District Court for the
Southern District of New York and upon such deposit, the Trustee shall be immune from any liability
whatsoever;



(b) At such time that the Trustee has completed the liquidation of the Trust Account in
accordance with the provisions of Section 1(j) hereof, and distributed the Property in accordance
with the provisions of the Termination Letter, this Agreement shall terminate except with respect
to Section 3(b).



6. Miscellaneous.



(a) The Company and the Trustee each acknowledge that the Trustee will follow the security
procedures set forth below with respect to funds transferred from the Trust Account. Upon receipt
of written instructions, the Trustee will confirm such instructions with an Authorized Individual
at an Authorized Telephone Number listed on the attached Exhibit D. The Company and the Trustee
will each restrict access to confidential information relating to such security procedures to
authorized persons. Each party must notify the other party immediately if it has reason to believe
unauthorized persons may have obtained access to such information, or of any change in its
authorized personnel. In executing funds transfers, the Trustee will rely upon
account numbers or other identifying numbers of a beneficiary, beneficiary’s bank or
intermediary bank, rather than names. The Trustee shall not be liable for any loss, liability or
expense resulting from any error in an account number or other identifying number, provided it has
accurately transmitted the numbers provided.


 


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(b) This Agreement shall be governed by and construed and enforced in accordance with the laws
of the State of New York, without giving effect to conflict of laws. It may be executed in several
counterparts, each one of which shall constitute an original, and together shall constitute but one
instrument.



(c) This Agreement contains the entire agreement and understanding of the parties hereto with
respect to the subject matter hereof. The parties hereto may change, waive, amend or modify any
provision contained herein that may be defective or inconsistent with any other provision contained
herein only upon the written consent of each of the parties hereto; provided that such action shall
not materially adversely affect the interests of the Public Stockholders. Any other change,
waiver, amendment or modification to this Agreement shall be subject to approval by a majority of
the Public Stockholders. As to any claim, cross-claim or counterclaim in any way relating to this
Agreement, each party waives the right to trial by jury.



(d) The parties hereto consent to the jurisdiction and venue of any state or federal court
located in the City of New York for purposes of resolving any disputes hereunder.



(e) Any notice, consent or request to be given in connection with any of the terms or
provisions of this Agreement shall be in writing and shall be sent by express mail or similar
private courier service, by certified mail (return receipt requested), by hand delivery or by
facsimile transmission:




if to the Trustee, to:




Continental Stock Transfer & Trust Company

17 Battery Place

8th Floor

New York, New York 10004

Attn: Mr. Frank Di Paolo, CFO

Fax: (212) 616-7620




if to the Company, to:




Community Bankers Acquisition Corp.

717 King Street

Alexandria, Virginia 22314

Attn: Mr. Gary A. Simanson, President

Fax: (703) 757-8202




with a copy to:




Dilworth Paxson LLP

1133 Connecticut Avenue, N.W., Suite 620

Washington, DC 20036

Attn: Kathleen L. Cerveny, Esq.

Fax: (202) 452-0930


 


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in either case with a copy on behalf of the Representatives to:




I-Bankers Securities Incorporated

125 E. John Carpenter Freeway

Suite 260

Irving, Texas 75062

Attn: Shelley Gluck, Chief Financial Officer

Fax: (214) 687-0023




Greenberg Traurig, LLP

600 Three Galleria Tower

13155 Noel Road

Dallas, TX 75240

Attn: Phillip Kushner, Esq.

Fax: (972) 419-1251



(f) This Agreement may not be assigned by the Trustee without the prior consent of the
Company. This agreement may be assigned by the Company to a wholly-owned subsidiary of the Company
upon written notice to the Trustee.



(g) Each of the Trustee and the Company hereby represents that it has the full right and power
and has been duly authorized to enter into this Agreement and to perform its respective obligations
as contemplated hereunder. The Trustee acknowledges and agrees that it shall not make any claims or
proceed against the Trust Account, including by way of set-off, and shall not be entitled to any
part of the Property under any circumstance.



(h) The Trustee hereby consents to the inclusion of Continental Stock Transfer & Trust Company
in the Registration Statement and other materials relating to the IPO.



[Signature page follows]




 


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IN WITNESS WHEREOF, the parties have duly executed this Investment Management Trust Agreement
as of the date first written above.



	 	 	 	 	 
	 	 	CONTINENTAL STOCK TRANSFER

& TRUST COMPANY, as Trustee
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Felix Orihuela
	 

	 	 	 	 
	 

	 	Name:
	 	Felix Orihuela
	 

	 	 	 	 
	 

	 	Title:
	 	Vice President
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	COMMUNITY BANKERS ACQUISITION CORP.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Gary A. Simanson
	 

	 	 	 	 
	 

	 	Name:
	 	Gary A. Simanson
	 

	 	 	 	 
	 

	 	Title:
	 	President
	 

	 	 	 	 







 


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EXHIBIT A




[LETTERHEAD OF COMPANY]




[INSERT DATE]




Continental Stock Transfer & Trust Company

17 Battery Place

8th Floor

New York, New York 10004

Attn: Steven Nelson, President





			
	Re:	 	Trust Account No. [___________]

Termination Letter






Gentlemen:



Pursuant to Section 1(i) of the Investment Management Trust Agreement between Community
Bankers Acquisition Corp. (the “Company”) and Continental Stock Transfer & Trust Company (the
“Trustee”), dated as of
 _____ 
, 2006 (the “Trust Agreement”), this is to advise you that the
Company has entered into an agreement (“Business Agreement”) with
 _____ 
(the “Target
Business”) to consummate a business combination with Target Business (a “Business Combination”) on
or about [INSERT DATE]. The Company shall notify you at least 48 hours in advance of the actual
date of the consummation of the Business Combination (the “Consummation Date”).



In accordance with the terms of the Trust Agreement, we hereby authorize you to commence
liquidation of the Trust Account to the effect that, on the Consummation Date, all of funds held in
the Trust Account will be immediately available for transfer to the account or accounts that the
Company shall direct in writing on the Consummation Date.



On the Consummation Date (i) counsel for the Company shall deliver to you written notification
that the Business Combination has been consummated and (ii) the Company shall deliver to you
written instructions with respect to the transfer of the funds held in the Trust Account (the
“Instruction Letter”). You are hereby directed and authorized to transfer the funds held in the
Trust Account immediately upon your receipt of the counsel’s letter and the Instruction Letter. In
the event that certain deposits held in the Trust Account may not be liquidated by the Consummation
Date without penalty, you will notify the Company of the same and the Company shall direct you as
to whether such funds should remain in the Trust Account and distributed after the Consummation
Date to the Company. Upon the distribution of all the funds in the Trust Account pursuant to the
terms hereof, the Trust Agreement shall be terminated.



In the event that the Business Combination is not consummated on the Consummation Date
described in the notice thereof and we have not notified you on or before the original Consummation
Date of a new Consummation Date, then the funds held in the Trust Account shall be reinvested as
provided in the Trust Agreement on the business day immediately following the Consummation Date as
set forth in the notice.


 


 









 





	 	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	 	 
	 	 	COMMUNITY BANKERS ACQUISITION CORP.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Gary A. Simanson, President







 


 









 







EXHIBIT B




[LETTERHEAD OF COMPANY]




[INSERT DATE]




Continental Stock Transfer & Trust Company

17 Battery Place

8th Floor

New York, New York 10004

Attn: Steven Nelson, President





			
	Re:	 	Trust Account No. [_________] Termination Letter






Gentlemen:



Pursuant to paragraph 1(i) of the Investment Management Trust Agreement between Community
Bankers Acquisition Corp. (the “Company”) and Continental Stock Transfer & Trust Company (the
“Trustee”), dated as of
 _____ 
, 2006 (the “Trust Agreement”), this is to advise you that the
Company has been dissolved due to the Company’s inability to effect a Business Combination within
the time frame specified in the Company’s prospectus relating to its IPO. Attached hereto is a
certified copy of the Certificate of Dissolution as filed with the Delaware Secretary of State.



In accordance with the terms of the Trust Agreement, we hereby authorize you to commence
liquidation of the Trust Account. You will notify the Company and JPMorgan Chase NY Bank (the
“Designated Paying Agent”) in writing as to when all of the funds in the Trust Account will be
available for immediate transfer (the “Transfer Date”). The Designated Paying Agent shall
thereafter notify you as to the account or accounts of the Designated Paying Agent that the funds
in the Trust Account should be transferred to on the Transfer Date so that the Designated Paying
Agent may commence distribution of such funds in accordance with the Company’s instructions. You
shall have no obligation to oversee the Designated Paying Agent’s distribution of the funds. Upon
the payment to the Designated Paying Agent of all the funds in the Trust Account, the Trust
Agreement shall terminate in accordance with the terms thereof.



	 	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	 	 
	 	 	COMMUNITY BANKERS ACQUISITION CORP.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Gary A. Simanson, President





 


 









 





EXHIBIT C




[LETTERHEAD OF COMPANY]




[Insert Date]




Continental Stock Transfer & Trust Company

17 Battery Place

New York, New York 10004

Attn: Steven Nelson, President




Re: Trust Account No. [ ] — Distribution of Income on Property




Gentlemen:



Pursuant to Section 2(b) of the Investment Management Trust Agreement between Community Bankers
Acquisition Corporation (“Company”) and Continental Stock Transfer & Trust Company (“Trustee”),
dated as of
 _____ 
, 2006 (“Trust Agreement”), we are requesting for our working capital purposes
that you deliver to us $
 _____ 
representing income earned on the Property from
 _____ 

to
 _____ 
.. In accordance with the terms of the Trust Agreement, you are hereby directed and
authorized to transfer said amount, less any fees due the Trustee pursuant to Section 3(c) of the
Trust Agreement, immediately upon your receipt of this letter to the Company’s operating account
at:



	 	 	 
	Bank:

	 	[
 _____ 
] 
	ABA #:

	 	[
 _____ 
] 
	Account Name:

	 	                    . 
	Account Number:

	 	[
 _____ 
] 
	Reference:

	 	Distribution of Income Earned on Trust Property






Very truly yours,




	 	 	 	 	 
	By:

	 	 	 	 
	 

	 	 	 	 





 


 









 





EXHIBIT D




AUTHORIZED INDIVIDUAL(S) and telephone numbers




AUTHORIZED FOR TELEPHONE CALL BACK




	 	 	 
	COMPANY:

	 	Community Bankers Acquisition Corp.
	 

	 	717 King Street
	 

	 	Alexandria, Virginia 22314
	 

	 	Attn: Gary A. Simanson, President
	 

	 	Telephone: (703) 759-2502
	 
	 	 
	TRUSTEE:

	 	Continental Stock Transfer & Trust Company
	 

	 	17 Battery Place
	 

	 	8th Floor
	 

	 	New York, New York 10004
	 

	 	Attn: Steven Nelson, President or Frank Di Paolo, CFO
	 

	 	Telephone: (212) 845-3270





 


 









 





SCHEDULE A




Schedule of fees pursuant to Section 3(c) of Investment Management Trust Agreement

between Community Bankers Acquisition Corp. and

Continental Stock Transfer & Trust Company




	 	 	 	 	 
	Fee Item	 	Time and method of payment	 	Amount
	Initial acceptance fee

	 	Initial closing of IPO by
wire transfer
	 	$1,000 
	 
	 	 	 	 
	Annual fee

	 	First year, initial closing
of IPO by wire transfer;
thereafter on the anniversary
of the effective date of the
IPO by wire transfer or check
	 	$3,000 
	 
	 	 	 	 
	Transaction processing fee for
disbursements to Company under
Sections 2(a) and 2(b)

	 	Deduction by Trustee from
disbursement made to Company
under Section 2(b)
	 	$250 






	 	 	 	 	 
	 	 	Agreed:
	Dated: June 8, 2006
	 	 	 	 
	 	 	Community Bankers Acquisition Corp.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Gary A. Simanson
	 

	 	 	 	 
	 

	 	 	 	Authorized Officer
	 
	 	 	 	 
	 	 	Continental Stock Transfer & Trust Co.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Felix Orihuela
	 

	 	 	 	 
	 

	 	 	 	Authorized Officer