EXHIBIT 10.8
INVESTMENT MANAGEMENT TRUST AGREEMENT
This Agreement is made as of ___________, 2005 by and between
Ad.Venture Partners, Inc. (the "Company") and Continental Stock Transfer & Trust
Company ("Trustee").
WHEREAS, the Company's Registration Statement on Form S-1, No.
333-124141 ("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, Wedbush ▇▇▇▇▇▇ Securities Inc. ("Wedbush") 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 Amended and Restated Certificate of
Incorporation, $81,665,000 of the gross proceeds of the IPO ($94,355,000 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 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 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 at a branch of ▇▇▇▇▇ ▇▇▇▇▇▇, a division of Citigroup
Global Markets Inc.;
(b) Manage, supervise and administer the Trust Account subject to
the terms and conditions set forth herein;
(c) In a timely manner, upon the written instruction of the Company,
to invest and reinvest the Property in any "Government Security." As used
herein, Government Security means money market funds meeting conditions of the
Investment Company Act of 1940 or securities 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;
1.
(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 such other person as the Company
may instruct in writing, monthly 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 receipt of
and only in accordance with the terms of a letter ("Termination Letter"), in a
form substantially similar to that attached hereto as either Exhibit A or
Exhibit B, signed on behalf of the Company by its Chief Executive Officer or
President, 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.
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 Chief Executive Officer or President. 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 Company may participate in such action
with its own counsel; and
(c) Pay the Trustee an initial acceptance fee of $- and an annual
fee of $- (it being expressly understood that the Property shall not be used to
pay such fee). The Company
2.
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 Account. 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).
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);
(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, judgment, instruction, 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
3.
(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 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;
(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); 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 pursuant to paragraph 1(i).
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 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 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. The parties
hereto may change, waive, amend or modify any provision contained herein that
may be defective or inconsistent with any other provision contained herein only
upon the written consent of 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.
(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
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Company, to:
Ad.Venture Partners, Inc.
▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Tel. No.: (▇▇▇) ▇▇▇-▇▇▇▇
(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.
(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.
5.
(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.
[Signature page follows.]
6.
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:
AD.VENTURE PARTNERS, INC.
By: _________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Executive Officer
7.
EXHIBIT A
[LETTERHEAD OF COMPANY]
[INSERT DATE]
Continental Stock Transfer
& Trust Company
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Re: Trust Account No. ----------------- Termination Letter
Gentlemen:
Pursuant to the Investment Management Trust Agreement between
Ad.Venture Partners, Inc. ("Company") 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 the Target Business ("Business Combination") on or about
[insert date]. The Company shall notify you at least two business days 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) 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 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 and the Trust Account closed.
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
1.
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,
AD.VENTURE PARTNERS, INC.
By: ______________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief Executive Officer
2.
EXHIBIT B
[LETTERHEAD OF COMPANY]
[INSERT DATE]
Continental Stock Transfer
& Trust Company
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Re: Trust Account No. ----------------- Termination Letter
Gentlemen:
Pursuant to the Investment Management Trust Agreement between
Ad.Venture Partners, Inc. ("Company") 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 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 and the Trust Account closed.
Very truly yours,
AD.VENTURE PARTNERS, INC.
By: ______________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief Executive Officer
EXHIBIT C
AUTHORIZED INDIVIDUAL(S) AUTHORIZED
FOR TELEPHONE CALL BACK TELEPHONE NUMBER(S)
----------------------- -------------------
COMPANY:
Ad.Venture Partners, Inc.
▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief Executive Officer (▇▇▇) ▇▇▇-▇▇▇▇
TRUSTEE:
Continental Stock Transfer & Trust Company
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman (▇▇▇) ▇▇▇-▇▇▇▇