EXHIBIT 10.9
FORM OF
INVESTMENT MANAGEMENT TRUST AGREEMENT
This Agreement is made as of ___________, 2006 by and between
MEDIA
& ENTERTAINMENT HOLDINGS, INC. (the "Company") and Continental
Stock Transfer &
Trust Company ("Trustee").
WHEREAS, the Company's Registration Statement on Form S-1, No.
333-128218 ("Registration Statement"), for its initial public
offering of
securities ("IPO") has been declared effective as of the date
hereof ("Effective
Date") by the Securities and Exchange Commission (capitalized terms
used herein
and not otherwise defined herein shall have the meanings set forth
in the
Registration Statement); and
WHEREAS, Ladenburg Thalmann & Co. Inc. ("Ladenburg") is acting
as
representative of the underwriters in the IPO; and
WHEREAS, as described in the Company's Registration Statement,
in
accordance with the Company's Certificate of Incorporation,
$__________ of the
gross proceeds of the IPO ($___________ 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. 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, in a segregated trust account
("Trust
Account") established by the Trustee;
(b) Manage,
supervise and administer the Trust Account subject to
the terms and conditions set forth herein;
(c) In a timely
manner, upon the instruction of the Company, to
invest and reinvest the Property in United States "government
securities" within
the meaning of Section 2(a)(16) of the Investment Company Act of
1940 having a
maturity of 180 days or less, or in any open ended investment
company registered
under the Investment Company Act of 1940
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that holds itself out as a money market fund meeting the conditions
of
paragraphs (c)(2), (c)(3) and (c)(4) of Rule 2a-7 promulgated under
the
Investment Company Act of 1940;
(d) Collect and
receive, when due, all principal and income
arising from the Property, which shall become part of the
"Property," as such
term is used herein;
(e) Notify the
Company and Ladenburg of all communications
received by it with respect to any Property requiring action by the
Company;
(f) Supply any
necessary information or documents as may be
requested by the Company in connection with the Company's
preparation of the tax
returns for the Trust Account;
(g) Participate
in any plan or proceeding for protecting or
enforcing any right or interest arising from the Property if, as
and when
instructed by the Company and/or Ladenburg to do so;
(h) Render to
the Company and Ladenburg, and to such other person
as the Company may instruct, monthly written statements of the
activities of and
amounts in the Trust Account reflecting all receipts and
disbursements of the
Trust Account; and
(i) Commence
liquidation of the Trust Account only after, and
promptly after, receipt of, and only in accordance with, the terms
of a letter
("Termination Letter"), in a form substantially similar to that
attached hereto
as either Exhibit A or Exhibit B hereto, signed on behalf of the
Company by its
Chief Executive Officer or Chairman of the Board and Secretary or
Assistant
Secretary, and affirmed by counsel for the Company, and complete
the liquidation
of the Trust Account and distribute the Property in the Trust
Account only as
directed in the Termination Letter and the other documents referred
to therein;
PROVIDED, HOWEVER, that in the event that a Termination Letter has
not been
received by the Trustee by the 18-month anniversary of the closing
("Closing")
of the IPO ("First Date"), or the 24-month anniversary of the
Closing ("Last
Date") in the event that a letter of intent, agreement in principle
or
definitive agreement for a Business Combination has been executed
on or prior to
the First Date but the Business Combination has not been
consummated by the
First Date, the Trust Account shall be liquidated in accordance
with the
procedures set forth in the Termination Letter attached as Exhibit
B hereto to
the stockholders of record on the record date established by the
Company for
such purpose. The Company shall set the record date to be within
ten days of the
Last Date, or as soon thereafter as reasonably practicable and
legally
permissible. In all cases, the Trustee shall provide Ladenburg with
a copy of
any Termination Letters and/or any other correspondence that it
receives with
respect to any proposed withdrawal from the Trust Account promptly
after it
receives same. This section may not be modified, amended or deleted
under any
circumstances; and
(j) Upon one or
more written requests from the Company, which may
be given not more than once in any calendar month period, the
Trustee shall
distribute to the Company interest earned on the Trust Account, net
of taxes
payable, up to a maximum of $2,340,000. The distributions requested
by the
Company may be for any amount, provided that (i) in the aggregate,
all
distributions under this Section 1(j) may not exceed $2,340,000
and
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(ii) such distributions may only be made if and to the extent that
interest has
been earned on the amount initially deposited into the Trust
Account. No other
distributions from the Trust Account shall be permitted except in
accordance
with Section 1(i) and this Section 1(j) hereof.
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 Chairman of the
Board. In
addition, except with respect to its duties under paragraph 1(i)
above, the
Trustee shall be entitled to rely on, and shall be protected in
relying on, any
verbal or telephonic advice or instruction which it in good faith
believes to be
given by any one of the persons authorized above to give written
instructions,
provided that the Company shall promptly confirm such instructions
in writing;
(b) Hold the
Trustee harmless and indemnify the Trustee from and
against any and all expenses, including reasonable counsel fees
and
disbursements, or loss suffered by the Trustee in connection with
any action,
suit or other proceeding brought against the Trustee involving any
claim, or in
connection with any claim or demand which in any way arises out of
or relates to
this Agreement, the services of the Trustee hereunder, or the
Property or any
income earned from investment of the Property, except for expenses
and losses
resulting from the Trustee's gross negligence or willful
misconduct. Promptly
after the receipt by the Trustee of notice of demand or claim or
the
commencement of any action, suit or proceeding, pursuant to which
the Trustee
intends to seek indemnification under this paragraph, it shall
notify the
Company in writing of such claim (hereinafter referred to as the
"Indemnified
Claim"). The Trustee shall have the right to conduct and manage the
defense
against such Indemnified Claim, provided, that the Trustee shall
obtain the
consent of the Company with respect to the selection of counsel,
which consent
shall not be unreasonably withheld. The Trustee may not agree to
settle any
Indemnified Claim without the prior written consent of the Company,
unless such
settlement includes a full release with respect to such Indemnified
Claim. The
Company may participate in such action with its own counsel;
and
(c) Pay the
Trustee an initial acceptance fee 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) Provide to
the Trustee any letter of intent, agreement in
principle or definitive agreement for a Business Combination that
is executed on
or prior to the First Date; and
(e) In
connection with any vote of the Company's stockholders
regarding a Business Combination, provide to the Trustee an
affidavit or
certificate of a firm regularly engaged in the business of
soliciting proxies
and/or tabulating stockholder votes (which firm
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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
