Document:

EXHIBIT 10.3

INVESTMENT MANAGEMENT TRUST AGREEMENT

 

This Agreement is made effective as of [___________], 2011 by and between China Growth Equity Investment Ltd. (the “Company”) and American Stock Transfer & Trust Company (the “Trustee”).

 

WHEREAS, the Company’s registration statement, as amended on Form S-1, No. 333-173323 (the “Registration Statement”) and prospectus (the “Prospectus”) for the initial public offering of the Company’s units (the “Units ”), which consist of one share of the Company’s ordinary shares, par value $0.001 per share (the “  Ordinary Shares ”) and one warrant to purchase the Company’s Ordinary Shares (the “Warrants”), (such initial public offering hereinafter referred to as the “Offering”) has been declared effective as of the date hereof (the “Effective Date”) by the Securities and Exchange Commission; and

 

WHEREAS, the Company has entered into an Underwriting Agreement with Deutsche Bank Securities Inc. as representative of the several underwriters (the “Underwriters”) named therein (the “Underwriting Agreement”); and

 

WHEREAS, as described in the Registration Statement, $60,000,000 of the gross proceeds of the Offering and sale of the Insider Warrants (as defined in the Underwriting Agreement) (or $68,775,000 if the Underwriters’ over-allotment option is exercised in full) will be delivered to the Trustee to be deposited and held in a segregated trust account (the “Trust Account”) for the benefit of the Company and the holders of the Company’s Ordinary Shares underlying the Units issued in the Offering as hereinafter provided (the amount to be delivered to the Trustee will be referred to hereinafter as the “Property,” the shareholders for whose benefit the Trustee shall hold the Property will be referred to as the “Public Shareholders,” and the Public Shareholders and the Company will be referred to together as the “Beneficiaries”) (capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Registration Statement); 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 the Trust Account at Deutsche Bank Trust Company Americas, a New York banking corporation, a wholly-owned subsidiary of Deutsche Bank AG, and at a brokerage institution selected by the Trustee that is satisfactory to the Company;

 

 (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 within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended, having a maturity of 180 days or less, or in money market funds 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 amended and that invest solely in U.S. government treasury bill with a maturity of 180 days or less, as determined by the Company;

 

 (d) Collect and receive, when due, all interest arising from the Property, which shall become part of the “Property,” as such term is used herein;

 

 (e) Promptly notify the Company and Deutsche Bank Securities Inc. of all communications received by the Trustee with respect to any Property requiring action by the Company;

 

  

  

  

 (f) Supply any necessary information or documents as may be requested by the Company (or its authorized agents) in connection with the Company’s preparation of the tax returns relating to assets held in 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 monthly written statements of the activities of, and amounts in, the Trust Account reflecting all receipts and disbursements of the Trust Account;

  

(i) Commence liquidation of the Trust Account only after and promptly 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 Chief Executive Officer or Chairman of the board of directors (the “Board”) or other authorized officer of the Company, 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. The Trustee understands and agrees that, except as provided in this  Section 1(i), disbursements from the Trust Account shall be made only pursuant to the terms of a duly executed Interest Withdrawal Instruction or Permitted Purchase of Shares Withdrawal Instruction, as set forth in  Sections 1(j) and 1(k), respectively, as the case may be; provided, however, that in the event the Trustee receives a Termination Letter in a form substantially similar to  Exhibit B hereto, or if the Trustee begins to liquidate the Property because it has received no such Termination Letter by the date that is 21 months from the closing of the offering, or on such other date as may be determined in the Company’s memorandum and articles of association following the liquidation of the Property, the Trustee shall keep the Trust Account open until the earliest to occur of (i) twelve (12) months following the date the Property has been distributed to the Public Shareholders or (ii) the Trustee’s receipt of a letter in a form substantially similar to  Exhibit D hereto. The provisions of this Section 1(i) may not be modified, amended or deleted under any circumstances; and

 

(j) Upon written request from the Company, which may be given from time to time in a form substantially similar to that attached hereto as  Exhibit C  (an “Interest Withdrawal Instruction”), the Trustee shall distribute to the Company the amount requested by the Company.

(k) In the event that the Company seeks shareholder approval of the Company’s initial Business Combination, at any time commencing upon the filing of a proxy statement related to such Business Combination and ending on the date immediately prior to the record date for the vote held to approve such Business Combination, the Company may make a written request for the release of funds necessary to repurchase up to fifteen percent (15%) of its Ordinary Shares, which may be given from time to time in a form substantially similar to that attached hereto as  Exhibit D  (a “Permitted Purchase of Shares Withdrawal Instruction”). In connection therewith, the Company shall deliver, in addition to Exhibit D, a “trade ticket” or similar confirmation evidencing such purchase by the Company.  Upon receipt of such evidence, the Trustee shall release to the Company from the Trust Account the necessary funds in order to complete such trade within two trading days of the trade date.   The Trustee shall pay to the Company such amount equal to: (x) the number of Ordinary Shares purchased (evidenced by the trade ticket) multiplied by (y) an amount not to exceed the pro rata per share amount held in the Trust Account; provided, however, in no event shall the Trustee release funds to repurchase in excess of 900,000 Ordinary Shares (1,035,000 if the over-allotment option of the Offering is exercised in full or such other amount provided to the Trustee if the over-allotment option is partially exercised but not to exceed 1,0350,000 Ordinary Shares).

 

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 Chairman of the Board, President, Chief Executive Officer or Chief Financial Officer. In addition, except with respect to its duties under  Sections 1(i) through  1(k)   hereof, 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 and with reasonable care, 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) Subject to Section 4 hereof, hold the Trustee harmless and indemnify the Trustee from and against any and all expenses, including reasonable counsel fees and disbursements, or losses suffered by the Trustee in connection with any action taken by it hereunder and 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 interest earned on the Property, except for expenses and losses resulting from the Trustee’s gross negligence, fraud 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  Section 2(b)  , 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 Trustee may not agree to settle any Indemnified Claim without the prior written consent of the Company, which such consent shall not be unreasonably withheld. The Company may participate in such action with its own counsel;

 

 (c) Pay the Trustee the fees set forth on Schedule A hereto, including an initial acceptance fee, an annual fee and a transaction processing fee for each disbursement made pursuant to  Sections 1(j)  and  1(k), 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 unless and until it is distributed to the Company pursuant to  Sections 1(i) through 1(k) hereof. The Company shall pay the Trustee the initial acceptance fee and the first annual fee at the consummation of the Offering 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 Account. 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  Section 2(b)   hereof;

 

 (d) In connection with any vote of the Company’s Public Shareholders regarding a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination involving the Company and one or more businesses (a “Business Combination”), provide to the Trustee an affidavit or certificate of the inspector of elections for the shareholder meeting verifying the vote of the Public Shareholders, if applicable, regarding such Business Combination;

 

 (e) Provide Deutsche Bank Securities Inc. with a copy of any Termination Letter(s) and/or any other correspondence that the Company sends to the Trustee with respect to any proposed withdrawal from the Trust Account promptly after it issues the same;

 

 (f) In the event the Company is entitled to receive a tax refund on its income tax obligation, and promptly after the amount of such refund is determined on a final basis, provide the Trustee with notice in writing (with a copy to Deutsche Bank Securities Inc.) of the amount of such income tax refund; and

 

 (g) Instruct the Trustee to make only those distributions that are permitted under this Agreement, and refrain from instructing the Trustee to make any distributions that are not permitted under this Agreement.

 

3. Limitations of Liability. The Trustee shall have no responsibility or liability for:

 

 (a) Taking 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 the Trustee’s gross negligence, fraud or willful misconduct;

 

 (b) Instituting 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) Refunding any depreciation in principal of any Property;

 

 (d) Assuming 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;

 

  

  

  

 

 (e) Any action taken or omitted by it, or any action suffered by it to be taken or omitted, in good faith and in the Trustee’s best judgment, except for the Trustee’s gross negligence, fraud or willful misconduct whether to the other parties hereto or anyone else. 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, which counsel may be Company’s counsel), 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) to which the Trustee believes, in good faith and with reasonable care, 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;

 

 (f) Verifying the accuracy of the information contained in the Registration Statement,

 

 (g) Providing any assurance on any Business Combination entered into by the Company or any other action taken by the Company as contemplated by the Registration Statement;

 

 (h) Filing information returns on behalf of the Trust Account with any local, state or federal taxing authority or providing periodic written statements to the Company documenting the taxes payable by the Company, if any, relating to any interest income earned on the Property;

 

 (i) Preparing, executing and filing tax reports, income or other tax returns and paying any taxes with respect to any income earned by, 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(j) hereof, if there is any income tax obligation relating to the income of the Property in the Trust Account, then, only at the written instruction of the Company, the Trustee shall make funds available in cash from the Property in the Trust Account in an amount specified by the Company as owing to the applicable taxing authority), which amount shall be paid directly to the Company by electronic funds transfer or other method of prompt payment, and the Company shall forward such payment to the appropriate taxing authority; and

 

 (j) Verifying calculations, qualifying or otherwise approving the Company’s written requests for distributions pursuant to  Sections 1(i)   through  1(k)   hereof.

 

4. Trust Account Waiver. The Trustee has no right of set-off or any right, title, interest or claim of any kind (“Claim”) to, or to any monies in, the Trust Account, and hereby irrevocably waives any Claim to, or to any monies in, the Trust Account that it may have in the future. In the event the Trustee has any Claim against the Company under this Agreement, including, without limitation, under  Section 2(b)   hereof, the Trustee shall pursue such Claim solely against the Company and not against the Property or any monies in the Trust Account.

 

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 (90) days of receipt of the resignation notice from the Trustee, the Trustee may submit an application to have the Property deposited with any court in the State of New York or 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; or

 (b) At such time that the Trustee has completed the liquidation of the Trust Account and its obligations in accordance with the provisions of Section 1(i)  hereof (which section may not be amended under any circumstances) and distributed the Property in accordance with the provisions of the Termination Letter, thereafter this Agreement shall terminate except with respect to  Section 2(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. 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 confidential information, or of any change in its authorized personnel. In executing funds transfers, the Trustee shall rely upon all information supplied to it by the Company, including, account names, account numbers, and all other identifying information relating to a Beneficiary, Beneficiary’s bank or intermediary bank. Except for any liability arising out of the Trustee’s gross negligence, fraud or willful misconduct, the Trustee shall not be liable for any loss, liability or expense resulting from any error in the information or transmission of the funds.

 

 (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 conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. It may be executed in several original or facsimile 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. Except for  Section 1(i)   hereof (which section may not be amended under any circumstances), this Agreement or any provision hereof may only be changed, amended or modified (other than to correct a typographical error) by a writing signed by each of the parties hereto. 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) This Agreement or any provision hereof may only be changed, amended or modified pursuant to Section 6(c) hereof with the Consent of the Public Shareholders; provided, however, that no such change, amendment or modification may be made to  Section 1(i)   hereof (which section may not be amended under any circumstances), it being the specific intention of the parties hereto that each Public Stockholder is, and shall be, a third party beneficiary of this  Section 6(d)   with the same right and power to enforce this  Section 6(d)   as either of the parties hereto. For purposes of this  Section 6(d)  , the “Consent of the Public Shareholders” means receipt by the Trustee of a certificate from the inspector of elections of the stockholder meeting certifying that either (a) the Public Shareholders of record as of a record date established in accordance with the laws of the Cayman Islands, who hold sixty-five percent (65%) or more of all then outstanding Ordinary Shares, have voted in favor of such change, amendment or modification, or (b) the Public Shareholders of record as of the record date who hold sixty-five percent (65%) or more of all then outstanding Ordinary Shares, have delivered to such entity a signed writing approving such change, amendment or modification. Except for any liability arising out of the Trustee’s gross negligence, fraud or willful misconduct, the Trustee may rely conclusively on the certification from the inspector or elections referenced above and shall be relieved of all liability to any party for executing the proposes amendment in reliance thereon.

 

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

 

 (f) 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:

 

American Stock Transfer & Trust Company

50 Maiden Lane

New York, New York 10038

 

  

  

  

if to the Company, to:

 

China Growth Equity Investment Ltd.

A12 Jianguomenwai Avenue

NCI Tower, Suite 1602

Beijing, PRC 100022

 

in either case with a copy to:

 

Deutsche Bank Securities Inc.

300 South Grand Avenue

Los Angeles, California 90071

Attn: Stan Budeshtsky

Fax: (213) 985-2425

And

Skadden, Arps, Slate, Meagher & Flom LLP

300 South Grand Avenue, Suite 3400

Los Angeles, California 90071

Attn: Gregg A. Noel, Esq.

Fax: (213) 687-5600

 

 (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.

 

 (h) Each of the Company and the Trustee hereby acknowledge that the Public Shareholders, solely for purposes of Sections 6(c)   and  6(d)   hereof, are third party beneficiaries of this Agreement.

 

[Signature Page Follows]

 

  

  

  

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

 

	  	
American Stock Transfer & Trust Company, as Trustee

	  	  
	  	  	
By:

	  
	  	  	
Name:

	  
	  	  	
Title:

	  
	  	  	  	  
	  	  	
China Growth Equity Investment Ltd.

	  	  	  	  
	  	  	
By:

	  
	  	  	
Name:

	  
	  	  	
Title:

	  

 

  

  

  

SCHEDULE A

 

	  	 	 	
Time and method of

	 	 	 
	
Fee Item

	 	 	
payment

	 	 	
Amount

	
Initial acceptance fee.

	 	 	
Initial closing of Offering by wire transfer.

	 	 	$	

[___

	]
	  	 	 	  	 	 	 	 	 
	
Annual fee.

	 	 	
First year, initial closing of Offering by wire transfer; thereafter on the anniversary of the effective date of the Offering by wire transfer or check.

	 	 	$	

[___

	]
	  	 	 	  	 	 	 	 	 
	
Transaction processing fee for disbursements to Company under Sections 1(i)  and  1(k).

	 	 	
Deduction by Trustee from accumulated income following disbursement made to Company under  Section 1.

	 	 	$	

[___

	]

 

  

  

  

EXHIBIT A

 

[Letterhead of Company]

 

[Insert date]

 

American Stock Transfer & Trust Company

50 Maiden Lane

New York, New York 10038

	
Re:

	
Trust Account No.      Termination Letter

 

Gentlemen:

 

Pursuant to Section 1(i) of the Investment Management Trust Agreement between China Growth Equity Investment Ltd. (“  Company  ”) and American Stock Transfer & Trust Company (“  Trustee  ”), dated as of                       , 2011 (“  Trust Agreement  ”), this is to advise you that the Company has entered into an agreement (“ Business Agreement  ”) with                        (“  Target Business  ”) to consummate a business combination with Target Business (“  Business Combination  ”) on or about   [insert date]  . The Company shall notify you at least forty-eight (48) hours in advance of the actual date of the consummation of the Business Combination (“  Consummation Date  ”). Capitalized terms used but not defined herein shall have the meanings set forth in the Trust Agreement.

 

In accordance with the terms of the Trust Agreement, we hereby authorize you to commence to liquidate all of the assets of the Trust Account on   [insert date]   , and to transfer the proceeds into the trust checking account at JP Morgan Chase, N.A. 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. It is acknowledged and agreed that while the funds are on deposit in the trust checking account at JP Morgan Chase, N.A. awaiting distribution, the Company will not earn any interest or dividends.

 

On the Consummation Date (i) counsel for the Company shall deliver to you written notification that the Business Combination is in the process of being consummated (the “  Notification  ”) and (ii) the Company shall deliver to you a written instruction signed by the Company and Deutsche Bank Securities Inc. with respect to the transfer of the funds held in the Trust Account, (“  Instruction Letter  ”). You are hereby directed and authorized to transfer the funds held in the Trust Account immediately upon your receipt of the Notification 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 in writing of the same and the Company shall direct you as to whether such funds should remain in the Trust Account and be distributed after the Consummation Date to the Company. Upon the distribution of all the funds, net of any payments necessary for reasonable unreimbursed expenses related to liquidating the Trust Account, your obligations under 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 upon receipt by the Trustee of written instructions from the Company, the funds held in the Trust Account shall be reinvested as provided in Section 1(c) of the Trust Agreement on the business day immediately following the Consummation Date as set forth in the notice as soon thereafter as possible.

 

	  	
Very truly yours,

	  	  	  
	  	
China Growth Equity Investment Ltd.

	  	  	  
	  	
By:

	  
	  	
Name:

	  
	  	
Title:

	  

 

cc: Deutsche Bank Securities Inc.

 

  

  

  

EXHIBIT B

 

[Letterhead of Company]

 

[Insert date]

American Stock Transfer & Trust Company

50 Maiden Lane

New York, New York 10038

	
Re:

	
Trust Account No.       Termination Letter                       

 

Gentlemen:

 

Pursuant to Section 1(i) of the Investment Management Trust Agreement between China Growth Equity Investment Ltd. (“  Company  ”) and American Stock Transfer & Trust Company (“  Trustee  ”), dated as of                       , 2011 (“  Trust Agreement  ”), this is to advise you that the Company has been unable to effect a business combination with a Target Company (“  Business Combination  ”) within the time frame specified in the Company’s Memorandum and Articles of Association, as described in the Company’s Prospectus relating to the Offering. Capitalized terms used but not defined herein shall have the meanings set forth in the Trust Agreement.

 

In accordance with the terms of the Trust Agreement, we hereby authorize you to liquidate all of the assets in the Trust Account on                        20___ and to transfer the total proceeds into the trust checking account at Deutsche Bank Trust Company Americas to await distribution to the remaining Public Shareholders. The Company has selected the date that is 21 months from the closing of the Offering as the record date for the purpose of determining the remaining Public Shareholders entitled to receive their share of the liquidation proceeds. Upon the distribution of all the funds, net of any payments necessary for reasonable unreimbursed expenses related to liquidating the Trust Account, your obligations under the Trust Agreement shall be terminated, except to the extent otherwise provided in Section 1(i) of the Trust Agreement.

  

	  	
Very truly yours,

	  	  	  
	  	
China Growth Equity Investment Ltd.

	  	  	  
	  	
By:

	  
	  	
Name:

	  
	  	
Title:

	  

 

cc: Deutsche Bank Securities Inc.

 

  

  

  

EXHIBIT C

 [Letterhead of Company]

 

[Insert date]

 

American Stock Transfer & Trust Company

50 Maiden Lane

New York, New York 10038

 

	
Re:

	
Trust Account No.                  

 

Gentlemen:

 

Pursuant to Section 1(j) of the Investment Management Trust Agreement between China Growth Equity Investment Ltd. (“Company”) and American Stock Transfer & Trust Company  (“Trustee”), dated as of                                           , 2011 (“Trust Agreement ”), this is to advise you that the Company hereby requests that you deliver to the Company $                                             of the interest, net of franchise and income taxes payable, earned on the Property as of the date hereof, which does not exceed, in the aggregate with all such prior disbursements pursuant to Section 1(j) , if any, the maximum amount set forth in  Section 1(j).

 

The Company needs such funds to cover working capital requirements. In accordance with the terms of the Trust Agreement, you are hereby directed and authorized to transfer (via wire transfer) such funds promptly upon your receipt of this letter to the Company’s operating account at:

 

[WIRE INSTRUCTION INFORMATION]

 

	  	
Very truly yours,

	  	  
	  	
China Growth Equity Investment Ltd.

	  	  
	  	
By:  

	  
	  	
Name:  

	  	  
	  	
Title:  

	  	  

 

cc: Deutsche Bank Securities Inc.

 

  

  

  

EXHIBIT D

 [Letterhead of Company]

 

[Insert date]

 

American Stock Transfer & Trust Company

50 Maiden Lane

New York, New York 10038

 

	
Re:

	
Trust Account No.                  

 

Gentlemen:

 

Pursuant to Section 1(k) of the Investment Management Trust Agreement between China Growth Equity Investment Ltd. (“Company”) and American Stock Transfer & Trust Company  (“Trustee”), dated as of                                           , 2011 (“Trust Agreement ”), this is to advise you that the Company hereby requests that you deliver to the Company $                                     , which does not exceed, in the aggregate with all such prior disbursements pursuant to Section 1(k) , if any, the maximum amount set forth in  Section 1(k).

 

The Company needs such funds to repurchase up to 15% of the Ordinary Shares sold in the Offering. In accordance with the terms of the Trust Agreement, you are hereby directed and authorized to transfer (via wire transfer) such funds promptly upon your receipt of this letter to the Company’s operating account at:

 

[WIRE INSTRUCTION INFORMATION]

 

	  	
Very truly yours,

	  	  
	  	
China Growth Equity Investment Ltd.

	  	  
	  	
By:  

	  
	  	
Name:  

	  	  
	  	
Title:  

	  	  

 

cc: Deutsche Bank Securities Inc.EXHIBIT 10.9

 

SECURITIES ESCROW AGREEMENT

SECURITIES ESCROW AGREEMENT, dated as of __________, 2011 (“Agreement”) by and among China Growth Equity Investment Ltd., a Cayman Islands limited life exempted company organized as a blank check company (the “Company”), the undersigned parties listed as Initial Shareholders on the signature page hereto (collectively, the “Initial Shareholders”) and American Stock Transfer & Trust Company as escrow agent (the “Escrow Agent”).

WHEREAS, the Company has entered into an Underwriting Agreement, dated _________, 2011 (“Underwriting Agreement”) with Deutsche Bank Securities Inc. (“Deutsche Bank”), as representative of the underwriters named therein (collectively, the “Underwriters”) in connection with a public offering (the “Public Offering”) by the Company of Units (as hereafter defined), pursuant to which, among other matters, the Underwriters have agreed to purchase up to 6,000,000 units (“Units”) of the Company, each consisting of one ordinary share of the Company, par value $0.001 per share (the “Ordinary Shares”), and one Warrant (a “Warrant”). Each Warrant evidences the right of the holder thereof to purchase one Ordinary Share for $12.00, subject to adjustment, as described in the Warrant Agreement dated as of __________, 2011 by and between the Company and American Stock Transfer & Trust Company as Warrant Agent; and

WHEREAS, pursuant to the Sponsor Warrant Purchase Agreement, dated as of ____________, 2011, among the Company and certain purchasers, the Company will issue 3,966,667 warrants (the “Sponsor Warrants”) to purchase Ordinary Shares in a private placement that will occur immediately prior to the IPO (the “Private Placement”); and

WHEREAS, the Initial Shareholders have agreed, as a condition of the Underwriters’ obligation to purchase the Units pursuant to the Underwriting Agreement and to offer them to the public, to deposit (i) all of the Ordinary Shares (the “Founder Shares”) owned by them prior to the consummation of the Public Offering and (ii) all of the Sponsor Warrants, which amounts are set forth opposite their respective names in  Schedule A  attached hereto (collectively “Escrow Securities”; provided,  however,  that if Deutsche Bank does not exercise the over-allotment option in full, such lesser amount as remains after the cancellation of shares held in escrow pursuant to Section 3.1), in escrow as hereinafter provided; and

WHEREAS, the Company and the Initial Shareholders desire that the Escrow Agent accept the Escrow Securities, in escrow, to be held and disbursed as hereinafter provided.

 

  

  

  

 

NOW, THEREFORE, IT IS AGREED:

1.           Appointment of Escrow Agent.  The Company and the Initial Shareholders hereby appoint the Escrow Agent to act in accordance with and subject to the terms of this Agreement and the Escrow Agent hereby accepts such appointment and agrees to act in accordance with and subject to such terms.

2.           Deposit of Escrow Securities.  Prior to the date of the consummation of the Public Offering, each of the Initial Shareholders shall deliver to the Escrow Agent certificates representing his or her respective Escrow Securities to be held and disbursed subject to the terms and conditions of this Agreement.  Each Initial Shareholder acknowledges and agrees that the certificates representing his or her Escrow Securities will be legended to reflect the deposit of such Escrow Securities under this Agreement.

3.           Disbursement of the Escrow Securities.

3.1.           The Escrow Securities.  The Escrow Agent shall hold the Founder Shares, as set forth in Schedule A, until 12 months following completion of the Company’s initial Business Combination; provided, however, the Founder Shares will be released from escrow (1) with respect to 50% of such shares, if the closing price of the Ordinary Shares equals or exceeds $12.00 for any 20 trading days within a 30-trading day period following the consummation of the Company’s initial Business Combination (the “First Escrow Period”). Schedule A, and (2) with respect to 50% of such shares, if the closing price of the Ordinary Shares equals or exceeds $15.00 for any 20 trading days within a 30 trading day period following the consummation of the Company’s initial Business Combination or earlier (the “Second Escrow Period”); provided, further, all Founder Shares shall be released from escrow if, following a Business Combination, the Company engages in a subsequent transaction resulting in its shareholders having the right to exchange their shares for cash or other securities. Notwithstanding the foregoing, to the extent that any of the Founder Shares remain subject to forfeiture as set forth in Section 5 of the Letter Agreements entered into by and among the Company and each of the Initial Shareholders, such amount of Founder Shares shall be released from escrow and shall remain subject to the terms and conditions of this Agreement. To the extent that such forfeiture conditions have not been satisfied within 36 months of the consummation of the Company’s initial Business Combination, such Founder Shares shall be forfeited by the Initial Shareholders and cancelled by the Company and the Escrow Agent shall promptly destroy the certificates representing such Escrow Securities.

 

  

  

  

 

Following the termination of either the First Escrow Period or the Second Escrow Period (as applicable), the Escrow Agent shall, upon written instructions from each Initial Shareholder, disburse each of the Initial Shareholder’s Founder Shares to such Initial Shareholder; provided however, that if, after the Company consummates a Business Combination, it (or the surviving entity) subsequently consummates a liquidation, merger, share exchange or other similar transaction which results in all of its Shareholders of such entity having the right to exchange their Ordinary Shares for cash, securities or other property, then the Escrow Agent will, upon receipt of a certificate, executed by the Chief Executive Officer or Chief Financial Officer of the Company, in form reasonably acceptable to the Escrow Agent, stating that such transaction is then being consummated, release the Escrow Securities to the Initial Shareholders immediately prior to the consummation of such transaction so that they can similarly participate; provided further, that if the Escrow Agent is notified by the Company pursuant to Section 6.7 hereof that the Company is being liquidated at any time during the applicable Escrow Period, then the Escrow Agent shall promptly destroy the certificates representing the Escrow Securities; and provided further, that if the Escrow Agent is notified by the Company that Deutsche Bank did not exercise its overallotment option (as further described in the Registration Statement) or exercised it in part, an amount such that the remaining Ordinary Shares included in the Escrow Securities shall not exceed 20% of the outstanding Ordinary Shares post-Public Offering (but in no event more than 225,000 Escrow Securities) shall be forfeited by the Initial Shareholders and cancelled by the Company and the Escrow Agent shall promptly destroy the certificates representing such Escrow Securities. For purposes of this Agreement, (i) a “Business Combination” shall mean the acquisition by the Company, whether by merger, share capital exchange, asset or share acquisition, plan of arrangement, recapitalisation, reorganisation or other similar type of transaction, of an operating business, or control of such operating business through contractual arrangements, which is an operating business having its principal business and/or material operations in the People's Republic of China.

3.2.           Disbursement of the Sponsor Warrants.  The Escrow Agent shall hold the Sponsor Warrants until 30 days following completion of the Company’s initial Business Combination, such warrants shall be released upon receipt of written request from the Company; provided, however, that if the Escrow Agent is notified by the Company pursuant to Section 6.7 hereof that the Company is being liquidated at any time during the Escrow Period, then immediately prior to the effectiveness of such liquidation, the Escrow Agent shall promptly destroy the certificates representing the Sponsor Warrants and the Sponsor Warrants shall no longer be considered issued and outstanding securities of the Company.

3.3            Company Covenants.  The Company hereby covenants and agrees to (i) cause its officers to act in good faith regarding the release of the Escrow Securities pursuant to Section 3.1, and (ii) to promptly release the Escrow Securities after the end of the First Escrow Period and the Second Escrow Period.

3.4.           Duties.  The Escrow Agent shall have no further duties hereunder after the disbursement or destruction of the Escrow Securities in accordance with this Section 3.

4.           Rights of Initial Shareholders in Escrow Securities.

4.1.           Voting Rights as a Shareholder.  Subject to the terms of the Insider Letter described in Section 4.4 hereof and except as herein provided, the Initial Shareholders shall retain all of their rights as Shareholders of the Company during the Escrow Period, including, without limitation, the right to vote such shares.

4.2.           Dividends and Other Distributions in Respect of the Escrow Securities.  During the Escrow Period, all dividends payable in cash with respect to the Escrow Securities shall be paid to the Initial Shareholders, but all dividends payable in share or other non-cash property (“Non-Cash Dividends”) shall be delivered to the Escrow Agent to hold in accordance with the terms hereof.  As used herein, the term “Escrow Securities” shall be deemed to include the Non-Cash Dividends distributed thereon, if any.

 

  

  

  

 

4.3.           Restrictions on Transfer.  During the Escrow Period, no sale, transfer or other disposition may be made of any or all of the Escrow Securities except (i) by gift to a member of an Initial Shareholder’s immediate family or to a trust or other entity, the beneficiary of which is an Initial Shareholder or a member of an Initial Shareholder’s immediate family, (ii) by virtue of the laws of descent and distribution upon death of any Initial Shareholder, or (iii) pursuant to a qualified domestic relations order;  provided ,  however , that such permissive transfers may be implemented only upon the respective transferee’s written agreement to be bound by the terms and conditions of this Agreement and of the Insider Letter signed by the Initial Shareholder transferring the Escrow Securities.  During the Escrow Period, no Initial Shareholder shall pledge or grant a security interest in his, her or its Escrow Securities or grant a security interest in his, her or its rights under this Agreement.

4.4.           Insider Letters.  Each of the Initial Shareholders has executed a letter agreement with Deutsche Bank and the Company, dated as indicated on  Schedule A  hereto (“Insider Letter”), and which is filed as an exhibit to the Company’s Registration Statement on Form S-1, Registration No. 333-173323 with respect to the Units to be issued in the Public Offering (the “Registration Statement”), respecting the rights and obligations of such Initial Shareholder in certain events, including but not limited to the liquidation of the Company.

5.           Concerning the Escrow Agent.

5.1.           Good Faith Reliance.  The Escrow Agent shall not be liable for any action taken or omitted by it in good faith and in the exercise of its own best judgment, and 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 Escrow Agent), 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 Escrow Agent to be genuine and to be signed or presented by the proper person or persons.  The Escrow Agent shall not be bound by any notice or demand, or any waiver, modification, termination or rescission of this Agreement unless evidenced by a writing delivered to the Escrow Agent signed by the proper party or parties and, if the duties or rights of the Escrow Agent are affected, unless it shall have given its prior written consent thereto.

5.2.           Indemnification.  The Escrow Agent shall be indemnified and held harmless by the Company from and against any expenses, including counsel fees and disbursements, or loss suffered by the Escrow Agent in connection with any action, suit or other proceeding involving any claim which in any way, directly or indirectly, arises out of or relates to this Agreement, the services of the Escrow Agent hereunder, or the Escrow Securities held by it hereunder, other than expenses or losses arising from the gross negligence or willful misconduct of the Escrow Agent.  Promptly after the receipt by the Escrow Agent of notice of any demand or claim or the commencement of any action, suit or proceeding, the Escrow Agent shall notify the other parties hereto in writing.  In the event of the receipt of such notice, the Escrow Agent, in its sole discretion, may commence an action in the nature of interpleader in an appropriate court to determine ownership or disposition of the Escrow Securities or it may deposit the Escrow Securities with the clerk of any appropriate court or it may retain the Escrow Securities pending receipt of a final, non-appealable order of a court having jurisdiction over all of the parties hereto directing to whom and under what circumstances the Escrow Securities are to be disbursed and delivered.  The provisions of this Section 5.2 shall survive in the event the Escrow Agent resigns or is discharged pursuant to Sections 5.5 or 5.6 below.

 

  

  

  

 

5.3.           Compensation.  The Escrow Agent shall be entitled to reasonable compensation from the Company for all services rendered by it hereunder, as set forth on  Exhibit A  hereto.  The Escrow Agent 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.

5.4.           Further Assurances.  From time to time on and after the date hereof, the Company and the Initial Shareholders shall deliver or cause to be delivered to the Escrow Agent such further documents and instruments and shall do or cause to be done such further acts as the Escrow Agent shall reasonably request to carry out more effectively the provisions and purposes of this Agreement, to evidence compliance herewith or to assure itself that it is protected in acting hereunder.

5.5.           Resignation.  The Escrow Agent may resign at any time and be discharged from its duties as escrow agent hereunder by its giving the other parties hereto written notice and such resignation shall become effective as hereinafter provided.  Such resignation shall become effective at such time that the Escrow Agent shall turn over to a successor escrow agent appointed by the Company and approved by Deutsche Bank and the Initial Shareholders, the Escrow Securities held hereunder.  If no new escrow agent is so appointed within the 60 day period following the giving of such notice of resignation, the Escrow Agent may deposit the Escrow Securities with any court it deems appropriate.

5.6.           Discharge of Escrow Agent.  The Escrow Agent shall resign and be discharged from its duties as escrow agent hereunder if so requested in writing at any time by the Company and a majority of the Initial Shareholders, jointly, provided ,  however , that such resignation shall become effective only upon acceptance of appointment by a successor escrow agent as provided in Section 5.5.

5.7.           Liability.  Notwithstanding anything herein to the contrary, the Escrow Agent shall not be relieved from liability hereunder for its own gross negligence or its own willful misconduct.

6.           Miscellaneous.

6.1.           Governing Law.  This Agreement shall for all purposes be deemed to be made under and shall be construed in accordance with the laws of the State of New York, without giving effect to any choice-of-law provisions thereof that would compel the application of the substantive laws of any other jurisdiction.  Each of the parties hereby agrees that any action, proceeding or claim against it arising out of or relating in any way to this Agreement shall be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York (each, a “New York court”), and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive.  Each of the parties hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.

 

  

  

  

 

6.2.           Third-Party Beneficiaries.  Each of the Initial Shareholders hereby acknowledges that Deutsche Bank is a third-party beneficiary of this Agreement and this Agreement may not be modified or changed without the prior written consent of Deutsche Bank.

6.3.           Amendment.  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 the Escrow Agent and holders of 65% or more of the Escrow Securities, and with the consent of the holders of 90% of the Ordinary Shares sold in the Public Offering (the “IPO Shares”), it being the specific intention of the parties hereto that each holder of an IPO Share is and shall be a third-party beneficiary of this Section 6.3 with the same right and power to enforce this Section 6.3 as any of the parties hereto.  For purposes of this Section 6.3, the “consent of the holders of [90%] of the IPO Shares” shall mean receipt by the Escrow Agent of a certificate from an entity certifying that (i) such entity regularly engages in the business of serving as inspector of elections for companies whose securities are publicly traded, and (ii) either (a) the holders of record of 90% of the IPO Shares of record as of a record date established in accordance with the applicable provisions of the Companies Law (2009 Revision) of the Cayman Islands (the “Companies Law”), have voted in favor of such amendment or modification or (b) the holders of record of 90% of the IPO Shares of record as of a record date established in accordance with the applicable provisions of the Companies Law have delivered to such entity a signed writing approving such amendment or modification.

6.4.           Headings.  The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation thereof.

6.5.           Binding Effect.  This Agreement shall be binding upon and inure to the benefit of the respective parties hereto and their legal representatives, successors and assigns.

6.6.           Notices.  Any notice or other communication required or which may be given hereunder shall be in writing and either be delivered personally or by private national courier service, or be mailed, certified or registered mail, return receipt requested, postage prepaid, and shall be deemed given when so delivered personally or, if sent by private national courier service, on the next business day after delivery to the courier, or, if mailed, two business days after the date of mailing, as follows:

If to the Company, to:

China Growth Equity Investment Ltd.

A12 Jianguomenwai Avenue

NCI Tower, Suite 1602

Chaoyang District

Beijing, PRC 100022

Attn: Jin Shi, Chief Executive Officer

 

  

  

  

 

If to an Initial Shareholder, to his address set forth in Schedule A.

and if to the Escrow Agent, to:

American Stock Transfer & Trust Company

59 Maiden Lane

New York, New York  10038

Attn: Susan Silber

A copy of any notice sent hereunder shall be sent to (but which shall not constitute notice):

DLA Piper LLP (US)

1251 Avenue of the Americas

New York, New York 10020

Attn: William Haddad, Esq.

and:

Deutsche Bank Securities Inc.

300 South Grand Avenue

Los Angeles, California 90071

Attn: Stan Budeshtsky

and:

Skaden, Arps, Slate, Meagher & Flom LLP

300 South Grand Avenue

Los Angeles, California 90071

Attn: Gregg A. Noel, Esq.

The parties may change the persons and addresses to which the notices or other communications are to be sent by giving written notice to any such change in the manner provided herein for giving notice.

6.7.           Liquidation of Company.  The Company shall give the Escrow Agent written notification of the liquidation and dissolution of the Company in the event that the Company fails to consummate a Business Combination within the time period(s) specified in the Registration Statement.

- Signature page of the Company immediately follows -

 

  

  

  

 

WITNESS the execution of this Agreement as of the date first above written.

 

	  	
CHINA GROWTH EQUITY INVESTMENT

LTD.

	  	  
	  	
By:

	  
	  	
Name:

	  
	  	
Title:

	  

- Signature page of Initial Shareholders immediately follows -

 

  

  

  

 

WITNESS the execution of this Agreement as of the date first above written.

	  	
INITIAL SHAREHOLDERS:

	  	  
	  	
By:

	  
	  	
Name:

	  
	  	
Title:

	  
	  	  	  
	  	
By:

	  
	  	
Name:

	  
	  	
Title:

	  

- Signature page of Escrow Agent immediately follows -

 

  

  

  

 

WITNESS the execution of this Agreement as of the date first above written.

	  	
AMERICAN STOCK TRANSFER &

TRUST COMPANY ,

as Escrow Agent

	  	  
	  	
By:

	  
	  	
Name:

	  	
Title

 

  

  

  

 

SCHEDULE A

First Escrow

	
Name and Address of

Initial Shareholder

	 	
Number

of Shares

	 	
Stock

Certificate Numbers

	 	
Number

of Warrants

	 	
Date of

Insider Letter

	  	 	  	 	  	 	  	 	  
	  	 	  	 	  	 	  	 	  
	  	 	  	 	  	 	  	 	  

Second Escrow

	
Name and Address of

Initial Shareholder

	 	
Number

of Shares

	 	
Stock

Certificate Number

	 	
Number

of Warrants

	 	
Date of

Insider Letter

	  	 	  	 	  	 	  	 	  
	  	 	  	 	  	 	  	 	  
	  	 	  	 	  	 	  	 	  

 

  

  

  

 

EXHIBIT A

Escrow Agent Fees

	
Description

	 	
Amount ($)

	
Fee for acting as Escrow Agent

	 	
[_____]

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