INVESTMENT MANAGEMENT TRUST AGREEMENT
This
Agreement is made as of March 9, 2007 by and between MEDIA & ENTERTAINMENT
HOLDINGS, INC. (the “Company”) and
Continental Stock Transfer & Trust Company (“Trustee”).
IT IS
AGREED:
(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;
(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 United States “government securities” within the meaning of Section
2(a)(16) of the Investment Company Act of 1940 having a maturity of 180 days or
less, or in any open ended investment company registered under the Investment
Company Act of 1940 that holds itself out as a money market fund meeting the
conditions o[paragraphs (c)(2), (c)(3) and (c)(4) of Rule 2a-7 promulgated under
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 and the Co-Representatives 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 and/or the
Co-Representatives to do so;
(h) Render
to the Company and the Co-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; and
(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 hereto, signed on behalf of the Company by its Chief Executive Officer
or Chairman of the Board and Secretary or Assistant Secretary, and affirmed by
counsel for 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; provided, however, that in the
event that a Termination Letter has not been received by the Trustee by the
18-month anniversary of the closing (“Closing”) of the IPO
(“First Date”),
or the 24-month anniversary of the Closing (“Last Date”) in the
event that a letter of intent, agreement in principle or definitive agreement
for a Business Combination has been executed on or prior to the First Date but
the Business Combination has not been consummated by the First Date, the Trust
Account shall be liquidated in accordance with the procedures set forth in the
Termination Letter attached as Exhibit B hereto to the stockholders of record on
the record date established by the Company for such purpose. The
Company shall set the record date to be within ten days of the Last Date, or as
soon thereafter as reasonably practicable and legally permissible. In
all cases, the Trustee shall provide Ladenburg with a copy of any Termination
Letters and/or any other correspondence that it receives with respect to any
proposed withdrawal from the Trust Account promptly after it receives
same. This section may not be modified, amended or deleted under any
circumstances; and
(j) Upon
one or more written requests from the Company, which may be given not more than
once in any calendar month period, the Trustee shall distribute to the Company
interest earned on the Trust Account, net of taxes payable, up to a maximum of
$1,800,000. The distributions requested by the Company may be for
any
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amount,
provided that (i) in the aggregate, all distributions under this Section 1(j)
may not exceed $1,800,000 and (ii) such distributions may only be made if and to
the extent that interest has been earned and paid on the amount initially
deposited into the Trust Account. No other distributions from the
Trust Account shall be permitted except in accordance with Section 1(i), this
Section 1(j) and Section 1(k) hereof; and
(k) If
there is any income or other tax obligation relating to the income from the
Property in the Trust Account as determined by the Company, then, from time to
time, at the written instruction of the Company, the Trustee shall promptly, to
the extent there is not sufficient cash in the Trust Account to pay such tax
obligation, liquidate such assets held in the Trust Account as shall be
designated by the Company in writing, and disburse to the Company by wire
transfer, out of the Property in the Trust Account, the amount indicated by the
Company as owing in respect of such income tax obligation.
(a) Give
all instructions to the Trustee hereunder in writing, signed by the Company’s
Chief Executive Officer or Chairman of the Board. In addition, except
with respect to its duties under paragraph 1(i) above, the Trustee shall be
entitled to rely on, and shall be protected in relying on, any verbal or
telephonic advice or instruction which it in good faith believes to be given by
any one of the persons authorized above to give written instructions, provided
that the Company shall promptly confirm such instructions in
writing;
(b) Hold
the Trustee harmless and indemnify the Trustee from and against any and all
expenses, including reasonable counsel fees and disbursements, or loss suffered
by the Trustee in connection with any action, suit or other proceeding brought
against the Trustee involving any claim, or in connection with any claim or
demand which in any way arises out of or relates to this Agreement, the services
of the Trustee hereunder, or the Property or any income earned from investment
of the Property, except for expenses and losses resulting from the Trustee’s
gross negligence or willful misconduct. Promptly after the receipt by
the Trustee of notice of demand or claim or the commencement of any action, suit
or proceeding, pursuant to which the Trustee intends to seek indemnification
under this paragraph, it shall notify the Company in writing of such claim
(hereinafter referred to as the “Indemnified
Claim”). The Trustee shall have the right to conduct and
manage the defense against such Indemnified Claim, provided, that the Trustee
shall obtain the consent of the Company with respect to the selection of
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, unless such settlement includes a full release with
respect to such Indemnified Claim. The Company may participate in
such action with its own counsel; and
(c) Pay
the Trustee an initial acceptance fee, an annual fee and a transaction
processing fee for each disbursement made pursuant to Sections 1(i) and 1(j) as
set forth on Schedule A hereto, which fees shall be subject to modification by
the
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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 1(j). 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).
(d) Provide
to the Trustee any letter of intent, agreement in principle or definitive
agreement for a Business Combination that is executed on or prior to the First
Date; and
(e) In
connection with any vote of the Company’s stockholders regarding a Business
Combination, provide to the Trustee an affidavit or certificate of a firm
regularly engaged in the business of soliciting proxies and/or tabulating
stockholder votes (which firm may be the Trustee) verifying the vote of the
Company’s stockholders regarding such Business Combination.
(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,
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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;
(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) Prepare,
execute and file 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); and
(i) Verify
calculations, qualify or otherwise approve Company requests for distributions
pursuant to Section 1(i), 2(a) or 2(b) above.
(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 that arises due to any actions or
omissions to act by any party after such deposit;
(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).
(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
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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 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 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. 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
Co-Representatives. 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, Borough of Manhattan, 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
00
Xxxxxxx Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attn: Xxxxxx
X. Xxxxxx, Chairman
Fax
No.: (000) 000-0000
if to the
Company, to:
Media
& Entertainment Holdings, Inc.
0000
Xxxxxxxxx Xxxxxx
Xxxxxx,
XX 00000
Attn: 1
Xxxxxxx X. Xxxxxxx, Chief Executive Officer
Fax
No.: (000) 000-0000
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in either
case with a copy to:
Lazard
Capital Markets LLC
00
Xxxxxxxxxxx Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attn: Xxxxxx
Xxxxx
and
Ladenburg
Xxxxxxxx & Co. Inc.
000 Xxxx
00xx Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attn: Xxxxx
X. Xxxx
Fax
No.: (000) 000-0000
and
Xxxxxxxxx
Xxxxxxx, LLP
MetLife
Building
000 Xxxx
Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attn: Xxxx
X. Annex, Esq.
Fax
No.: (000) 000-0000
(f) This
Agreement may not be assigned by the Trustee without the prior written consent
of the Company and the Co-Representatives.
(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.
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IN
WITNESS WHEREOF, the parties have duly executed this Investment Management Trust
Agreement as of the date first written above.
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CONTINENTAL
STOCK TRANSFER
&
TRUST COMPANY, as Trustee
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By:
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/s/ Xxxxxx X. Xxxxxx | |
| Name: Xxxxxx X. Xxxxxx | |||
| Title: Chairman | |||
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MEDIA
& ENTERTAINMENT
HOLDINGS,
INC.
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By:
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/s/ Xxxxxxx X. Xxxxxxx | |
| Name: Xxxxxxx X. Xxxxxxx | |||
| Title: Chief Executive Officer | |||
[SIGNATURE
PAGE OF INVESTMENT MANAGEMENT TRUST AGREEMENT]
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EXHIBIT
A
[LETTERHEAD
OF COMPANY]
[INSERT
DATE]
Continental
Stock Transfer
& Trust Company
00
Xxxxxxx Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attn: Xxxxxx
X. Xxxxxx
Re: Trust
Account No.
[ ]
Termination Letter
Gentlemen:
Pursuant
to paragraph 1(i) of the Investment Management Trust Agreement between Media
& Entertainment Holdings, Inc. (“Company”) and Continental Stock Transfer
& Trust Company (“Trustee”), dated as of ________, 2007 (“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 48 hours in advance of
the actual date of the consummation of the Business Combination (“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 (a) [AN AFFIDAVIT] [A CERTIFICATE] of ________,
which verifies the vote of the Company’s stockholders in connection with the
Business Combination, and (b) written instructions 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 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
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the
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.
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Very
truly yours,
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MEDIA
& ENTERTAINMENT
HOLDINGS,
INC.
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By:
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Xxxxxxx
X. Xxxxxxx, Chief Executive
Officer
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By:
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Xxxxx
Xxxxxx, Executive Vice President
and
Secretary
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cc:
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Lazard
Capital Markets LLC
Ladenburg
Xxxxxxxx & Co. Inc.
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EXHIBIT
B
[LETTERHEAD
OF COMPANY]
[INSERT
DATE]
Continental
Stock Transfer
& Trust Company
00
Xxxxxxx Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attn: Xxxxxx
X. Xxxxxx
Re: Trust
Account No.
[ ]
Termination Letter
Gentlemen:
Pursuant
to paragraph 1(i) of the Investment Management Trust Agreement between Media
& Entertainment Holdings, Inc. (“Company”) and Continental Stock Transfer
& Trust Company (“Trustee”), dated as of ________ __, 2007 (“Trust
Agreement”), this is to advise you that the Company has been unable to effect a
Business Combination with a Target Company within the time frame specified in
the Company’s Certificate of Incorporation, as described in the Company’s
prospectus relating to its IPO.
In
accordance with the terms of the Trust Agreement, we hereby authorize you to
commence liquidation of the Trust Account. The Company will establish
a record date for the purposes of determining the stockholders entitled to
receive their share of liquidation proceeds. The record date shall be
within ten (10) days of the date of this letter or as soon thereafter as is
reasonably practicable and legally permissible. You agree to be the
Paying Agent pursuant to a separate letter agreement, and in your separate
capacity as Paying Agent, you shall commence distribution of such funds in
accordance with the terms of the Trust Agreement and the Certificate of
Incorporation of the Company. Upon the distribution of all the funds
in the Trust Account, your obligations under the Trust Agreement shall be
terminated.
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Very
truly yours,
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MEDIA
& ENTERTAINMENT
HOLDINGS,
INC.
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By:
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Xxxxxxx
X. Xxxxxxx, Chief Executive Officer
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By:
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Xxxxx
Xxxxxx, Executive Vice President
and Secretary
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EXHIBIT
C
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AUTHORIZED
INDIVIDUAL(S)
FOR
TELEPHONE CALL BACK
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AUTHORIZED
TELEPHONE
NUMBER(S)
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COMPANY:
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Media
& Entertainment Holdings, Inc.
0000
Xxxxxxxxx Xxxxxx
Xxxxxx,
XX 00000
Attn: Xxxxxxx
X. Xxxxxxx,
Chief
Executive Officer
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(000)
000-0000
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TRUSTEE:
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Continental
Stock Transfer
& Trust Company
00
Xxxxxxx Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx
X. Xxxxxx
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(000)
000-0000
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