INVESTMENT MANAGEMENT TRUST AGREEMENT
EXHIBIT
10.7
This
Agreement is made as of
[ ],
2007 by and between Stoneleigh Partners Acquisition Corp. (the “Company”) and
Continental Stock Transfer & Trust Company (the “Trustee”).
WHEREAS,
the Company’s Registration Statement on Form S-1, No. 333-133235
(“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,
HCFP/Xxxxxxx Securities LLC (“Xxxxxxx”) is acting as the representative of the
underwriters in the IPO; and
WHEREAS,
as described in the Company’s Registration Statement, and in accordance with the
Company’s Certificate of Incorporation, $191,900,000 of the gross proceeds of
the IPO ($220,685,000 if the underwriters’ over-allotment option is exercised in
full) will be delivered to the Trustee to be deposited and held in a trust
account for the benefit of the Company and the holders of the Company’s Class B
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, together with any interest earned on the Trust Account (defined
below), will be referred to herein as the “Property”; the stockholders for whose
benefit the Trustee shall hold the Property will be referred to as the “Public
Stockholders,” and the Public Stockholders and the Company will be referred to
together as the “Beneficiaries”); and
WHEREAS,
the Company and the Trustee desire to enter into this Agreement to set forth
the
terms and conditions pursuant to which the Trustee shall hold the
Property;
IT
IS
AGREED:
1. Agreements
and Covenants of Trustee.
The
Trustee hereby agrees and covenants to:
(a) Hold
the
Property in trust for the Beneficiaries in accordance with the terms of this
Agreement, including the terms of Section 11-51-302(6) of the Colorado Statute,
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 any United States “government security” within the meaning of
Section 2(a)(16) of the Investment Company Act of 1940 having a maturity of
one
hundred and eighty 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 selected by the Company 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 determined by the Company;
(d) Collect
and receive, when due, all principal and income arising from the Property,
which
shall become part of the “Property,” as such term is used herein;
(e) Notify
the Company of all communications received by it with respect to any Property
requiring action by the Company;
(f) Supply
any necessary information or documents as may be requested by the Company in
connection with the Company’s preparation of the tax returns for the Trust
Account;
(g) Participate
in any plan or proceeding for protecting or enforcing any right or interest
arising from the Property if, as and when instructed by the Company to do
so;
(h) Render
to
the Company and to Xxxxxxx, 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 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
(subject in the case of Exhibit B, to the provisions below), signed on behalf
of
the Company by its Chief Executive Officer or Chairman of the Board and
Secretary, and complete the liquidation of the Trust Account and distribute
the
Property in the Trust Account only as directed in the Termination Letter and
the
other documents referred to therein; provided, however, that in the event that
a
Termination Letter has not been received within 24 months from the date of
the
Company’s IPO (as defined in the Termination Letter attached hereto as Exhibit
A), the Trust Account shall be liquidated as part of the Company’s plan of
dissolution and liquidation approved by the Company’s stockholders in accordance
with the procedures set forth in the Termination Letter attached as Exhibit
B to
the stockholders of record on the record date and provided in a certificate
from
the Company to the Trustee; provided, further, that the record date shall be
within ten (10) days of the 24 month date from the date of the Company’s IPO, or
as soon thereafter as is practicable.
(j)
Disburse
such funds from the Trust Account from time to time from interest or other
income earned on the proceeds held in the Trust Account upon receipt and only
in
accordance with the terms of a letter (“Disbursement Letter”), in a form
substantially similar to that attached hereto as Exhibit
C,
signed
on behalf of the Company by its Chief Executive Officer, Chairman of the Board
and Secretary, and complete the disbursement of funds from the Trust Account
and
distribute such funds only as directed in the Disbursement Letter as may be
requested by the Company, provided, however, that the aggregate amount
distributed by the Trustee to the Company pursuant to this Section may not
exceed (i) initially $850,000, increasing by an additional $850,000 on ___,
2007 [3 month anniversary of the consummation of the offering] and each three
month anniversary thereafter, up to a maximum $6,800,000, plus (ii) such amounts
necessary to pay any taxes on the interest or other income earned on the
proceeds held in the Trust Account. All distributions made pursuant to this
Section 1(j) shall be made only from income collected on the
Property.
2. Agreements
and Covenants of the Company.
The
Company hereby agrees and covenants to:
(a) Give
all
instructions to the Trustee hereunder in writing, signed by the Company’s
President or Chairman of the Board. In addition, except with respect to its
duties under paragraph 1(i) above, the Trustee shall be entitled to rely on,
and
shall be protected in relying on, any verbal or telephonic advice or instruction
which it in good faith believes to be given by any one of the persons authorized
above to give written instructions, provided that the Company shall promptly
confirm such instructions in writing;
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;
and
(c) Pay
the
Trustee an initial acceptance fee of $1,000 and an annual fee of $3,000 (it
being expressly understood that the Property shall not be used to pay such
fee).
The Company shall pay the Trustee the initial acceptance fee and first year’s
fee at the consummation of the IPO and thereafter on the anniversary of the
Effective Date. The Trustee shall refund to the Company the fee (on a pro rata
basis) with respect to any period after the liquidation of the Trust Fund.
The
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) 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.
3. Limitations
of Liability.
The
Trustee shall have no responsibility or liability to:
(a) Take
any
action with respect to the Property, other than as directed in paragraph 1
hereof and the Trustee shall have no liability to any party except for liability
arising out of its own gross negligence or willful misconduct;
(b) Institute
any proceeding for the collection of any principal and income arising from,
or
institute, appear in or defend any proceeding of any kind with respect to,
any
of the Property unless and until it shall have received instructions from the
Company given as provided herein to do so and the Company shall have advanced
or
guaranteed to it funds sufficient to pay any expenses incident
thereto;
(c) Change
the investment of any Property, other than in compliance with
paragraph 1(c);
3
(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 the
Property shall not be used to pay any such taxes and that such taxes, if any,
shall be paid by the Company from funds not held in the Trust
Account).
4. Termination.
This
Agreement shall terminate as follows:
(a) If
the
Trustee gives written notice to the Company that it desires to resign under
this
Agreement, the Company shall use its reasonable efforts to locate a successor
trustee. At such time that the Company notifies the Trustee that a successor
trustee has been appointed by the Company and has agreed to become subject
to
the terms of this Agreement, the Trustee shall transfer the management of the
Trust Account to the successor trustee, including but not limited to the
transfer of copies of the reports and statements relating to the Trust Account,
whereupon this Agreement shall terminate; provided, however, that, in the event
that the Company does not locate a successor trustee within ninety days of
receipt of the resignation notice from the Trustee, the Trustee may submit
an
application to have the Property deposited with 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 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).
5. Miscellaneous.
(a) The
Company and the Trustee each acknowledge that the Trustee will follow the
security procedures set forth below with respect to funds transferred from
the
Trust Account. Upon receipt of written instructions, the Trustee will confirm
such instructions with an Authorized Individual at an Authorized Telephone
Number listed on the attached Exhibit D. The Company and the Trustee will
each restrict access to confidential information relating to such security
procedures to authorized persons. Each party must notify the other party
immediately if it has reason to believe unauthorized persons may have obtained
access to such information, or of any change in its authorized personnel. In
executing funds transfers, the Trustee will rely upon account numbers or other
identifying numbers of a beneficiary, beneficiary's bank or intermediary bank,
rather than names. The Trustee shall not be liable for any loss, liability
or
expense resulting from any error in an account number or other identifying
number, provided it has accurately transmitted the numbers
provided.
(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.
4
(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 Xxxxxxx. As to
any
claim, cross-claim or counterclaim in any way relating to this Agreement, each
party waives the right to trial by jury.
(d) The
parties hereto consent to the jurisdiction and venue of any state or federal
court located in the City of New York for purposes of resolving any disputes
hereunder.
(e) Any
notice, consent or request to be given in connection with any of the terms
or
provisions of this Agreement shall be in writing and shall be sent by express
mail or similar private courier service, by certified mail (return receipt
requested), by hand delivery or by facsimile transmission:
if
to the
Trustee, to:
Continental
Stock Transfer
&
Trust Company
00
Xxxxxxx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn: Corporate
Trust Department
Fax
No.:
(___) ___-____
5
if
to the
Company, to:
000
Xxxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Chief Financial Officer
Fax
No.:
(000) 000-0000
in
either
case with a copy to:
HCFP/Xxxxxxx
Securities LLC
000
Xxxxxxx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxx
Xxxxx Xxxxxxxxx
Fax
No.:
(000) 000-0000
(f) This
Agreement may not be assigned by the Trustee without the prior consent of the
Company.
(g) Each
of
the Trustee and the Company hereby represents that it has the full right and
power and has been duly authorized to enter into this Agreement and to perform
its respective obligations as contemplated hereunder. The Trustee acknowledges
and agrees that it shall not make any claims or proceed against the Trust
Account, including by way of set-off, and shall not be entitled to any funds
in
the Trust Account under any circumstance.
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:
By:
____________________________
Name:
Title:
6
EXHIBIT
A
[Letterhead
of Company]
[Insert
date]
Continental
Stock Transfer
&
Trust Company
00
Xxxxxxx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Corporate Trust Department
Re: Trust
Account No. [ ] Termination Letter
Gentlemen:
Pursuant
to paragraph 1(i) of the Investment Management Trust Agreement between
Stoneleigh Partners Acquisition Corp. (“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 (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
(a) [an affidavit] [a certificate] of ______________________, which
verifies the vote of the Company’s Class B 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 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,
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
EXHIBIT
B
[Letterhead
of Company]
[Insert
date]
Continental
Stock Transfer
&
Trust Company
00
Xxxxxxx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Corporate Trust Department
Re: Trust
Account No.
[ ]
Termination Letter
Gentlemen:
Pursuant
to paragraph 1(i) of the Investment Management Trust Agreement between
Stoneleigh Partners Acquisition Corp. (“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
prospectus relating to its initial public offering.
In
accordance with the terms of the Trust Agreement, we hereby (a) certify to
you
that 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. The Company will establish a record date for the purposes of
determining the Class B stockholders of record entitled to receive their share
of liquidation proceeds. The record date shall be within ten (10) days
of the liquidation date or as soon thereafter as is reasonably
practicable and legally permissible. You will notify the Company in writing
as
to when all of the funds in the Trust Account will be available for immediate
transfer (“Transfer Date”) in accordance with the terms of the Trust Agreement.
You shall commence distribution of such funds in accordance with the terms
of
the Trust Agreement and you shall oversee the distribution of the funds.
Upon the distribution of all the funds in the Trust Account, your obligations
under the Trust Agreement shall be terminated.
Very
truly yours,
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
EXHIBIT
C
[Letterhead
of Company]
[Insert
date]
Continental
Stock Transfer
&
Trust Company
00
Xxxxxxx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Corporate Trust Department
Re: Trust
Account No.
[ ]
Disbursement Letter
Pursuant
to the Section1(j) of the Investment Management Trust Agreement between
Stoneleigh Partners (“Company”) and Continental Stock Transfer & Trust
Company, dated as of _________, 2007 (“Trust Agreement”), the Company hereby
authorizes you to distribute from the Trust Account proceeds from the Trust
equal to $__________, representing a portion of the income earned on the
Property and not exceeding, in aggregate with all other such prior disbursements
pursuant to Section 1(j), if any, the maximum amount set forth in Section
1(j),
to ______ via wire transfer on ______, 200_.
[Remainder
of Page Intentionally Left Blank]
EXHIBIT
D
|
AUTHORIZED
INDIVIDUAL(S)
FOR
TELEPHONE CALL BACK
|
AUTHORIZED
TELEPHONE
NUMBERS
|
|
Company:
|
|
|
000
Xxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attn: Chief
Financial Officer
|
Phone:
(000) 000-0000
Fax:
(000) 000-0000
|
|
Trustee:
|
|
|
Continental
Stock Transfer & Trust Company
00
Xxxxxxx Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attn:
Corporate Trust Department
|
Phone:
Fax:
|
