exv10w2



 






Exhibit 10.2




INVESTMENT MANAGEMENT TRUST AGREEMENT




     This Agreement is made as of ___, 2005 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,
No. 333-124240 (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 (the “Representative”) is acting as the
representative of the underwriters in the IPO; and







     WHEREAS, as described in the Company’s Registration Statement, and in accordance with the
Company’s Certificate of Incorporation, $54,000,000 of the gross proceeds of the IPO ($62,100,000
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 or other high-quality, short-term
interest-bearing investments meeting conditions of the Investment
Company Act of 1940.







 









 





     (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;



     (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 (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. 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,



Page 2 of 11









 





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 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
Trustee shall also be entitled to reimbursement from the Company for all expenses paid or incurred
by it in the administration of its duties hereunder including, but not limited to, all counsel,
advisors’ and agents’ fees and disbursements and all taxes or other governmental charges. The
Company shall not be responsible for any other fees or charges of the Trustee except as set forth
in this Section 2(c) and 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 to the truth and acceptability of any information therein contained) which is believed
by the Trustee, in



Page 3 of 11









 





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;




     (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; and



     (h) Pay any taxes on behalf of the Trust Account (it being expressly understood that the
Property shall not be used to pay any such taxes and that such taxes, if any, shall be paid by the
Company from funds not held in the Trust Account).



4. 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 paragraph 1(i) hereof, and distributed the Property in accordance
with the provisions of the Termination Letter, this Agreement shall terminate except with respect
to Paragraph 2(b); or







     (c) On such date after
___, 2007 when the Trustee shall have deposited the Property with the United
States District Court for the Southern District of New York in the event that, prior to such date,
the Trustee has not received a Termination Letter from the Company pursuant to paragraph 1(i).







5. 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 C. The Company and the Trustee
will each restrict access to confidential information relating to such security procedures to
authorized persons. Each



Page 4 of 11









 





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.




     (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. This Agreement or any provision hereof may only be changed,
amended or modified by a writing signed by each of the parties hereto; provided, however, that no
such change, amendment or modification may be made without the prior written consent of the
Representative. 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. Steven Nelson, President

Fax: (202) 509-5150


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



Page 5 of 11









 







in either case with a copy to:


I-Bankers Securities Incorporated

1560 East Southlake Boulevard

Suite 232

Southlake, Texas 76092

Attn: Shelley Gluck, Chief Financial Officer

Fax: (817) 416-2264








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.



     (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
funds in the Trust Account under any circumstance.



[Signature page to follow]




Page 6 of 11









 








     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:	 	 
	

	 	 	 	 
	

	 	Name:
	 	Steven G. Nelson
	

	 	 	 	 
	

	 	Title:
	 	President
	

	 	 	 	 
	 
	 	 	 	 
	 	 	COMMUNITY BANKERS ACQUISITION
	 	 	CORP.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	 
	

	 	Name:
	 	Gary A. Simanson
	

	 	 	 	 
	

	 	Title:
	 	President
	

	 	 	 	 






Page 7 of 11









 






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 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 ___, 2005 (the “Trust Agreement”), this is to advise you that the
Company has entered into an agreement (the “Business Agreement”) with ___(the
“Target Business”) to consummate a business combination with Target Business (“Business
Combination”) on or about [INSERT DATE]. The Company shall notify you at least 24 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 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 accordance with the terms of 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 ___, 2005 (the “Trust Agreement”), this is to advise you that the
Board of Directors of the Company has voted to dissolve and liquidate the Company. Attached hereto
is a copy of the minutes of the meeting of the Board of Directors of the Company relating thereto,
certified by the Secretary of the Company as true and correct and in full force and effect.



     In accordance with the terms of the Trust
 Agreement, we hereby authorize and direct you to commence liquidation of the Trust Account. You will notify the Company and
___(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 be terminated.




	 	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	 	 
	 	 	COMMUNITY BANKERS ACQUISITION
	 	 	CORP.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	 
	

	 	 	 	Gary A. Simanson, President






 









 






EXHIBIT C




AUTHORIZED INDIVIDUAL(S)




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 G. Nelson, President	 	 
	

	 	Telephone:( 202 )845-3201