INVESTMENT MANAGEMENT TRUST AGREEMENT
Exhibit
10.10
This
Agreement is made as of ____________, 2005 by and among Highbury Financial
Inc. (the “Company”), ThinkEquity Partners LLC, EarlyBirdCapital, Inc.
(collectively, the “Underwriters”)
and
Continental
Stock Transfer & Trust Company (“Trustee”).
WHEREAS,
the Company’s Registration Statement on Form S-1, No. 333-127272 (“Registration
Statement”), for its initial public offering of securities (“IPO”) has been
declared effective as of the date hereof by the Securities and Exchange
Commission (“Effective Date”); and
WHEREAS,
the Company has completed a private placement of 166,667 Units (the "Private
Placement"); and
WHEREAS,
the Underwriters are acting as the underwriters in the IPO;
and
WHEREAS,
as described in the Company’s Registration Statement, and in accordance with the
Company’s Restated Certificate of Incorporation, $32,080,000 of the gross
proceeds of the IPO and the Private Placement ($37,015,000 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,
the
Underwriters and the holders of the Company’s common stock, par value $.0001 per
share, issued in the IPO as hereinafter provided and in the event the Units
are
registered in Colorado, pursuant to Section 11-51-302(6) of the Colorado
Revised
Statutes. A copy of the Colorado Statute is attached hereto and made a part
hereof (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, the Company and the Underwriters will be referred to together
as
the “Beneficiaries”); and
WHEREAS,
the Company, the Underwriters 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, including the terms of Section 11-51-302(6) of the Colorado Statute,
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, invest and reinvest the
Property in money market funds meeting the conditions of the Investment Company
Act of 1940 or in any “Government Security.” As used herein, Government Security
means any security issued or guaranteed by the United States;
(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 Underwriters 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 or the
Underwriters to do so;
(h) Render
to
the Company and to the Underwriters, and to such other person as the Company
may
instruct in writing, monthly written statements of the activities of and
amounts
in the Trust Account reflecting all receipts and disbursements of the Trust
Account;
(i) If
there
is any income tax obligation relating to the income of the Property in the
Trust
Account, at the written instruction of the Company, issue a check directly
to
the taxing authorities designated by the Company, out of the Property in
the
Trust Account, in the amount indicated by the Company as owing to each such
taxing authority; and
(j) Commence
liquidation of the Trust Account only 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 President or Chairman of the Board and Secretary,
and on behalf of the Underwriters by an authorized representative of ThinkEquity
Partners LLC 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 _______, 2007 (or the
date
that is the sixth month anniversary of such date, in the event that (i) a
letter
of intent, agreement in principle or definitive agreement has been executed
prior to such date in connection with a Business Combination (as defined
in the
Termination Letter attached hereto as Exhibit A) that has not been consummated
by ______, 2007 and (ii) the Company has complied with Section 2(d) hereof
prior
to such date), the Trust Account shall be liquidated in accordance with the
procedures set forth in the Termination Letter attached as Exhibit B to the
stockholders of record on the record date; provided, further, that the record
date shall be within ten (10) days of _______, 2007 (or the date that is
the
sixth month anniversary of such date, in the event that (i) a letter of intent,
agreement in principle or definitive agreement has been executed prior to
such
date in connection with a Business Combination that has not been consummated
by
_______, 2007 and (ii) the Company has complied with Section 2(d) hereof
prior
to such date), or as soon thereafter as is practicable. In all cases, the
Trustee shall provide the Underwriters 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.
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, Chairman of the Board or Secretary. In addition, except with respect
to its duties under paragraph 1(j) 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;
-
2
-
(b) Hold
the
Trustee harmless and indemnify the Trustee from and against, any and all
expenses, including reasonable counsel fees and disbursements, or loss suffered
by the Trustee in connection with any action, suit or other proceeding brought
against the Trustee involving any claim, or in connection with any claim
or
demand which in any way arises out of or relates to this Agreement, the services
of the Trustee hereunder, or the Property or any income earned from investment
of the Property, except for expenses and losses resulting from the Trustee’s
gross negligence or willful misconduct. Promptly after the receipt by the
Trustee of notice of demand or claim or the commencement of any action, suit
or
proceeding, pursuant to which the Trustee intends to seek indemnification
under
this paragraph, it shall notify the Company in writing of such claim
(hereinafter referred to as the “Indemnified Claim”). The Trustee shall have the
right to conduct and manage the defense against such Indemnified Claim,
provided, that the Trustee shall obtain the consent of the Company with respect
to the selection of counsel, which consent shall not be unreasonably withheld.
The Company may participate in such action with its own counsel;
(c) Pay
the
Trustee an initial acceptance fee of $1,000 and a monthly fee of $300 (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 the fee for
the
first twelve months 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 Company shall not be responsible for any other fees or
charges of the Trustee except 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);
(d) Provide
to the Trustee any letter of intent, agreement in principle or definitive
agreement that is executed prior to _________, 2007 in connection with a
Business Combination, together with a certified copy of a unanimous resolution
of the Board of Directors of the Company affirming that such letter of intent,
agreement in principle or definitive agreement is in effect; and
(e) In
connection with the 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 tabulating
stockholder votes (which firm may be the Trustee) verifying the vote of the
Company’s stockholders regarding such Business Combination.
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;
-
3
-
(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 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,
as set
forth in Section 1(i), if there is any income tax obligation relating to
the
income of the Property in the Trust Account, then, at the written instruction
of
the Company, the Trustee shall issue a check directly to the taxing authorities
designated by the Company, out of the Property in the Trust Account, in the
amount indicated by the Company as owing to each such taxing
authority).
4. Termination.
This
Agreement shall terminate as follows:
(a) If
the
Trustee gives written notice to the Company and the Underwriters that it
desires
to resign under this Agreement, the Company and the Underwriters shall
use their reasonable efforts to locate a successor trustee. At such
time
that the Company and the Underwriters notify 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 and the Underwriters do 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;
-
4
-
(b) At
such
time that the Trustee has completed the liquidation of the Trust Account
in
accordance with the provisions of paragraph 1(j) 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 deposits 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 and the
Underwriters pursuant to paragraph 1(j).
5. Miscellaneous.
(a) The
Company, the Underwriters 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,
the
Underwriters and the Trustee will each restrict access to confidential
information relating to such security procedures to authorized persons. Each
party must notify the other parties 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 that such action shall not materially adversely
affect the interests of the Public Stockholders. Any other change, waiver,
amendment or modification to this Agreement shall be subject to approval
by a
majority of the Public Stockholders. As to any claim, cross-claim or
counterclaim in any way relating to this Agreement, each party waives the
right
to trial by jury.
(d) The
parties hereto consent to the jurisdiction and venue of any state or federal
court located in the City of New York for purposes of resolving any disputes
hereunder.
-
5
-
(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,
XX 00000
Attn:
Xxxxxx X. Xxxxxx
Fax
No.:
(000) 000-0000
If
to the
Company, to:
000
Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx,
XX 00000
Attn:
Xxxxxxx X. Xxxxx
If
to
the Underwriters, to:
ThinkEquity
Partners LLC
00
Xxxx
00xx
Xxxxxx,
00xx
Xxxxx
Xxx
Xxxx,
XX 00000
Attn:
Xxxx Xxxxx
in any
case with a copy to:
EarlyBirdCapital,
Inc.
000
Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx
Xxxx,
XX 00000
Attn:
Xxxxxx Xxxxxx
(f) This
Agreement may not be assigned by the Trustee without the prior written consent
of the Company and the Underwriters.
(g) Each
of
the Trustee, the Underwriters 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) The
Trustee hereby waives any and all right, title, interest or claim of any
kind
("Claim") in or to any distribution of the Trust Account, and hereby agrees
not
to seek recourse, reimbursement, payment or satisfaction for any Claim against
the Trust Account for any reason whatsoever.
-
6
-
(i) The
Trustee hereby consents to the inclusion of Continental Stock Transfer &
Trust Company in the Registration Statement and other materials relating
to the
IPO.
- 7
-
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: |
||
| Title: | ||
| HIGHBURY FINANCIAL INC. | ||
| |
|
|
| By: | ||
|
Name: Xxxxxxx X. Xxxxx |
||
| Title: President and Chief Executive Officer | ||
|
|
||
| THINKEQUITY PARTNERS LLC | ||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
| EARLYBIRDCAPITAL, INC. | ||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
- 8
-
EXHIBIT
A
[Letterhead
of Company]
[Insert
date]
Continental
Stock Transfer
&
Trust Company
00
Xxxxxxx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxx Xxxxxx
Re:
Trust
Account No. Termination Letter
Gentlemen:
Pursuant
to paragraph 1(j) of the Investment Management Trust Agreement between Highbury
Financial Inc. (“Company”), ThinkEquity Partners LLC, and EarlyBirdCapital, Inc.
and Continental Stock Transfer & Trust Company (“Trustee”), dated as of
,
2005
(“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 the 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 (a) the Business Combination has been consummated and (b)
if
applicable, the provisions of Section 11-51-302(6) and Rule 51-3.4 of the
Colorado Statute have been met, and (ii) the Company shall deliver to you
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.
A-1
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 Data 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, | ||
| HIGHBURY FINANCIAL INC. | ||
| |
|
|
| By: | ||
|
|
||
| THINKEQUITY PARTNERS LLC, as representative of the Underwriters | ||
| |
|
|
| By: | ||
|
|
||
A-2
EXHIBIT
B
(Letterhead
of Company)
(Insert
date)
Continental
Stock Transfer
&
Trust Company
00
Xxxxxxx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxx Xxxxxx
Re:
Trust
Account No. Termination Letter
Gentlemen:
Pursuant
to paragraph 1(j) of the Investment Management Trust Agreement between Highbury
Financial Inc. (“Company”), ThinkEquity Partners LLC, EarlyBirdCapital, Inc. and
Continental Stock Transfer & Trust Company (“Trustee”), dated as of
,
2005 (“Trust
Agreement”), this is to advise you that the Board of Directors of the Company
has voted to dissolve and liquidate the Trust Account. 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 (a) certify to
you
that, if applicable, the provisions of Section 11-51-302(6) and Rule 51-3.4
of
the Colorado Statute have been met and (b) authorize you, to commence
liquidation of the Trust Account. You will notify the Company and JPMorgan
Chase
NY Bank (“Designated Paying Agent”) in writing as to when all of the funds in
the Trust Account will be available for immediate transfer (“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, | ||
| HIGHBURY FINANCIAL INC. | ||
| |
|
|
| By: | ||
|
|
||
| THINKEQUITY PARTNERS LLC, as representative of the Underwriters | ||
| |
|
|
| By: | ||
|
|
||
B-1
EXHIBIT
C
|
AUTHORIZED
INDIVIDUAL(S) FOR TELEPHONE CALL BACK
|
AUTHORIZED
TELEPHONE NUMBER(S)
|
|
|
Company:
|
||
|
000
Xxxxxxxxxx Xxxxxx
Xxxxxx,
XX 00000
Attn:
Xxxxxxx X. Xxxxx or X. Xxxxxxx Forth
|
000-000-0000
|
|
|
Trustee:
|
||
|
Continental
Stock Transfer
&
Trust Company
00
Xxxxxxx Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attn:
Xxxxxx X. Xxxxxx, Chairman
|
[Telephone]
|
|
| Underwriters: | ||
|
THINKEQUITY
PARTNERS LLC
As
representative of the Underwriters
00
Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attn:
Xxxx Xxxxx, Managing Director
|
[Telephone]
|
C-1
