INVESTMENT MANAGEMENT TRUST AGREEMENT
This
Agreement is made as of [____],
2008 by
and between Consumer Partners Acquisition Corp. (the “Company”)
and
Continental Stock Transfer & Trust Company (the
“Trustee”).
WHEREAS,
the Company’s registration statement on Form S-1, No. 333-148396 (the
“Registration
Statement”),
relating to the initial public offering of its securities (the “IPO”)
has
been declared effective as of the date hereof (the “Effective
Date”)
by the
Securities and Exchange Commission (capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the Registration
Statement);
WHEREAS,
Broadband Capital Management, LLC (“Broadband”)
is
acting as the representative of the underwriters in the IPO;
WHEREAS,
subject to adjustment in the event the Company’s existing shareholders purchase
any additional shares in the IPO, as described in the Registration Statement,
and in accordance with the Company’s amended and restated certificate of
incorporation, an aggregate of $125,000,000 (or $143,562,500, if the
underwriters’ over-allotment option is exercised in full), which is comprised of
(i) the net proceeds of the IPO (except as provided in the Registration
Statement) and (ii) $5,000,000 received by the Company in exchange for its
securities issued pursuant to the private placement that will take place
immediately prior to the closing of the IPO, will be delivered to the Trustee
to
be deposited and held in the Trust Account for the benefit of the Company,
and
the holders of shares of the Company’s common stock, par value $0.0001 per share
(“Common
Stock”),
that
form a part of the units of the Company’s securities issued in the IPO (the
“Units”).
The
amount to be delivered to the Trustee will be referred to herein as the
“Property,”
the
stockholders for whose benefit the Trustee shall hold the Property will be
referred to as the “Public
Stockholders,”
and
the Public Stockholders and the Company will be referred to collectively 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.
NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
1. Agreements
and Covenants of Trustee.
The
Trustee hereby agrees and covenants to:
(a) Hold
the
Property in trust for the Beneficiaries in accordance with the terms of this
Agreement in a segregated trust account (“Trust
Account”)
established by the Trustee;
(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,
and/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;
1
(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 its tax returns;
(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 Broadband, 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;
(i) 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, provided, however, that such amount
may
not exceed an amount equal to the interest earned on the Trust Account less
any
amounts previously withdrawn from the Trust Account; and
(j) Commence
liquidation of the Trust Account only after and promptly after receipt of,
and
only in accordance with, the terms of a letter (the “Termination
Letter”),
in a
form substantially similar to that attached hereto as either Exhibit
A
or
Exhibit B
hereto,
signed on behalf of the Company by its President or Chairman of the Board and
Secretary or Assistant Secretary 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; provided,
however,
that in
the event that a Termination Letter has not been received by the Trustee by
the
close of business on the “business day” that is the 24-month anniversary of the
consummation of the IPO (the “Last
Date”),
the
Trust Account shall be liquidated in accordance with the procedures set forth
in
the Termination Letter attached as Exhibit
B
hereto
and distributed to the designated paying agent for distribution to the
stockholders of record on the Last Date. A business day shall be any day that
is
not a Saturday, Sunday or other day on which banks are required or authorized
to
be closed in the City of New York. In all cases, the Trustee shall provide
Broadband with a copy of any Termination Letter and/or any other correspondence
that it receives with respect to any proposed withdrawal from the Trust Account
promptly after it receives same. The provisions of this Section 1(j) may not
be
modified, amended or deleted under any circumstances.
2. Limited
Distributions of Income from Trust Account.
(a) 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,
the
Trustee shall distribute to the Company from interest earned on the Trust
Account the amount requested by the Company to
cover
any
income or other tax obligation owed by the Company;
2
(b) The
limited distributions referred to in Section 2(a) above shall be made only
from
income collected on the Property. Except as provided in Section 2(a) above,
no
other distributions from the Trust Account shall be permitted except in
accordance with Sections 1(i) and (j) hereof.
3. 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 or President or other authorized officer, provided
that any
Termination Letter shall be given pursuant to the requirements of paragraph
1(j)
hereof.
In
addition, except with respect to its duties under paragraphs 1(i), 1(j), and
2(a) 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 by this
paragraph 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, 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, an annual fee and a transaction processing
fee for each disbursement made pursuant to Section 2 as set forth on
Schedule
A
hereto,
which fees shall be subject to modification by mutual agreement of the 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 accumulated income at the time that
disbursements are made to the Company pursuant to Section 2. The Company shall
pay the Trustee the initial acceptance fee and first annual fee at the
consummation of the IPO and the annual fee 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 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, except to
the
extent it is distributed to the Company pursuant to Section 2); and
(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 verifying the vote of the Company’s stockholders regarding
such Business Combination.
3
4. 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 Sections 1 and
2
hereof and the Trustee shall have no liability to any party except for liability
arising out of its own gross negligence or willful misconduct;
(b) Institute
any proceeding for the collection of any principal and income arising from,
or
institute, appear in or defend any proceeding of any kind with respect to,
any
of the Property unless and until it shall have received instructions from the
Company given as provided herein to do so and the Company shall have advanced
or
guaranteed to it funds sufficient to pay any expenses incident
thereto;
(c) Change
the investment of any Property, other than in compliance with
paragraph 1(c);
(d) Refund
any depreciation in principal of any Property;
(e) Assume
that the authority of any person designated by the Company to give instructions
hereunder shall not be continuing unless provided otherwise in such designation,
or unless the Company shall have delivered a written revocation of such
authority to the Trustee;
(f) The
other
parties hereto or to anyone else for any action taken or omitted by it, or
any
action suffered by it to be taken or omitted, in good faith and in the exercise
of its own best judgment, except for its gross negligence or willful misconduct.
The Trustee may rely conclusively and shall be protected in acting upon any
order, notice, demand, certificate, opinion or advice of counsel (including
counsel chosen by the Trustee), statement, instrument, report or other paper
or
document (not only as to its due execution and the validity and effectiveness
of
its provisions, but also as to the truth and acceptability of any information
therein contained) which is believed by the Trustee, in 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) File
information returns with the United States Internal Revenue Service and payee
statements with the Company, documenting the taxes payable by the Company,
if
any, relating to interest earned on the Property;
(i) 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), it being expressly understood that
as
set forth in Section 1(i), if there is any income or other tax obligation
relating to the Trust Account or the Property in the Trust Account, as
determined from time to time by the Company and regardless of whether such
tax
is payable by the Company or the Trust, at the written instruction of the
Company, the Trustee shall make funds available in cash from the Property in
the
Trust Account 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, account debit or other method of payment, and the
Company shall forward such payment to the taxing authority; and
(j) Verify
calculations, qualify or otherwise approve the Company’s requests for
distributions pursuant to Section 1(j) above.
4
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 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(j) hereof, and distributed the
Property in accordance with the provisions of the Termination Letter, this
Agreement shall terminate except with respect to Section 3(b).
6. Miscellaneous.
(a) Notwithstanding
any other provision of this Agreement, the Trustee confirms its understanding
that the Company has established the Trust Account relating to the Units being
sold in the IPO. The Trustee acknowledges that the Trust Account will exist
for
the benefit of the Company’s Public Stockholders and the monies from the Trust
Account may only be disbursed upon the occurrence of certain events, as more
fully described in the Prospectus, and the Trustee hereby waives any and all
right, title, interest or claim of any kind in or to any distribution of any
property held in the Trust Account that it or its affiliates may have now or
in
the future and hereby agrees not to seek recourse, reimbursement, payment or
satisfaction for any claim of any kind against the Trust Account for any reason
whatsoever, including in respect of the Company’s indemnification obligations
set forth in this Agreement. The Trustee agrees that neither it nor any of
its
affiliates have or will have any right, title, interest or claim in or to the
monies in the Trust Account.
(b) The
Company and the Trustee each acknowledge that the Trustee will follow the
procedures set forth in this paragraph with respect to funds transferred from
the Trust Account.
(c) 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.
5
(d) This
Agreement contains the entire agreement and understanding of the parties hereto
with respect to the subject matter hereof. Except for Section 1(j) (which may
not be amended under any circumstances), 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 Broadband and Public Stockholders owning 90% of the shares of Common
Stock issued in the IPO. As to any claim, cross-claim or counterclaim in any
way
relating to this Agreement, each party waives the right to trial by
jury.
(e) 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.
(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:
Continental
Stock Transfer
&
Trust Company
00
Xxxxxxx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn: Xxxxxx
X.
Xxxxxx and Xxxxx XxXxxxx
Fax
No.:
(000) 000-0000
if
to the
Company, to:
00000
Xxxxx Xxxxxx Xxxx., Xxxxx 000
Xxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn:
Xxx
Xxxxxxxxxxx, Chief Financial Officer
Fax
No.:
______________
in
either
case with copies to:
Broadband
Capital Management, LLC
000
Xxxxx
Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
|
Attn:
|
Xxxxxxx
Xxxxxxxx
|
Fax
No.:
(000)
000-0000
and
Loeb
& Loeb LLP
000
Xxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxxxx X. Xxxxxxxx
Fax
No:
(000) 000-0000
6
(g) This
Agreement may not be assigned by the Trustee without the prior consent of the
Company.
(h) 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.
(i) Each
of
the Company and the Trustee hereby acknowledge that Broadband is an intended
third party beneficiary of this Agreement.
(Remainder
of page intentionally left blank. Signature page to follow.)
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:
Xxxxxx X. Xxxxxx
Title:
Chairman
By:
____________________________
Name:
Xxxx X. Xxxxxxx
Title:
Chief
Executive Officer
8
SCHEDULE
A
|
Fee
Item
|
Time
and method of payment
|
Amount
|
|
Initial
acceptance fee
|
Initial
closing of IPO by wire transfer
|
$1,000
|
|
Annual
fee
|
First
year, initial closing of IPO by wire transfer; thereafter on the
anniversary of the effective date of the IPO by wire transfer or
check
|
$3,000
|
|
Transaction
processing fee for disbursements to the Company under Section
2
|
Deduction
by Trustee from accumulated income following disbursement made to
the
Company under Section 2
|
$250
|
9
EXHIBIT
A
00000
Xxxxx Xxxxxx Xxxx., Xxxxx 000
Xxx
Xxxxxxx, Xxxxxxxxxx 00000
[Insert
date]
Continental
Stock Transfer
&
Trust Company
00
Xxxxxxx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxx X. Xxxxxx, Chairman
Re: Trust
Account No. [●]
Ladies
and Gentlemen:
Pursuant
to paragraph 1(j) of the Investment Management Trust Agreement between Consumer
Partners Acquisition Corp. (the “Company”)
and
Continental Stock Transfer & Trust Company (the “Trustee”),
dated
as of [●],
2008
(the “Trust
Agreement”),
this
is to advise you that the Company has entered into an agreement (the
“Business
Agreement”)
with
[●]
(the
“Target
Business”)
to
consummate a business combination with Target Business (the “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 (the “Consummation
Date”).
Capitalized terms used herein without definitions shall have the respective
meanings assigned to such terms in the Trust Agreement.
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, the Company shall deliver to you (a) written notification
that the Business Combination has been consummated, and (b) a certificate which
verifies the vote of the Company’s stockholders in connection with the Business
Combination and (c) written instructions with respect to the transfer of the
funds held in the Trust Account (the “Instruction
Letter”).
You
are hereby directed and authorized to transfer the funds held in the Trust
Account immediately upon your receipt of the certificate referenced above 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 promptly notify
the Company 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 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.
10
Very
truly yours,
By:________________________________
Xxxx
X.
Xxxxxxx,
Chief
Executive Officer
cc:
Broadband Capital Management, LLC
11
EXHIBIT
B
00000
Xxxxx Xxxxxx Xxxx., Xxxxx 000
Xxx
Xxxxxxx, Xxxxxxxxxx 00000
[Insert
date]
Continental
Stock Transfer
&
Trust Company
00
Xxxxxxx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxx X. Xxxxxx, Chairman
Re: Trust
Account No. [●]
Ladies
and Gentlemen:
Pursuant
to paragraph 1(j) of the Investment Management Trust Agreement between Consumer
Partners Acquisition Corp. (the “Company”)
and
Continental Stock Transfer & Trust Company (“Trustee”),
dated
as of [●], 2008 (the “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. Capitalized terms used herein without definitions shall have the
respective meanings assigned to such terms in the Trust Agreement.
In
accordance with the terms of the Trust Agreement, we hereby authorize you to
commence liquidation of the Trust Account. The
Company has appointed [________________________] to serve as its designated
paying agent (the “Designated Paying Agent”); accordingly, you will notify the
Company and the Designated Paying Agent in writing as to when all of the funds
in the Trust Account will be available for immediate transfer (the “Transfer
Date”).
The
Designated Paying Agent shall thereafter notify you as to the account or
accounts of the Designated Paying Agent that the funds in the Trust Account
should be transferred to on the Transfer Date so that the Designated Paying
Agent may commence distribution of such funds in accordance with the Company’s
instructions. You shall have no obligation to oversee the Designated Paying
Agent’s distribution of the funds. Upon the payment to the Designated Paying
Agent of all the funds in the Trust Account, the Trust Agreement shall terminate
in accordance with the terms thereof.
Very
truly yours,
By:
________________________________
Xxxx
X.
Xxxxxxx,
Chief
Executive Officer
cc:
Broadband Capital Management, LLC
12
EXHIBIT
C
00000
Xxxxx Xxxxxx Xxxx., Xxxxx 000
Xxx
Xxxxxxx, Xxxxxxxxxx 00000
[Insert
date]
Continental
Stock Transfer
&
Trust Company
00
Xxxxxxx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxx Di Paolo and Xxxxxxx Xxxxxx
Re: Trust
Account No. [●]
Ladies
and Gentlemen:
Pursuant
to paragraph 2(a) of the Investment Management Trust Agreement between Consumer
Partners Acquisition Corp. (the “Company”)
and
Continental Stock Transfer & Trust Company (the “Trustee”),
dated
as of [●], 2008 (the “Trust
Agreement”),
this
is
to advise you that the Company hereby requests that you deliver to the Company
$[●]
of the
income earned on the Property (as defined in the Trust Agreement) as of the
date
hereof. The Company needs such funds to pay for the income tax obligations
as
set forth on the attached tax return or tax statement. 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,
CONSUMER
PARTNERS ACQUISITION CORP.
By:
________________________________
Xxxx
X.
Xxxxxxx,
Chief
Executive Officer
cc:
Broadband Capital Management, LLC
13
