EX-10.12 LETTER AGREEMENT



 





Exhibit 10.12




July 20, 2006




Freedom Acquisition Holdings, Inc.

1114 Avenue of the Americas, 41st Floor

New York, New York 10036




Citigroup Global Markets Inc.

388 Greenwich Street

New York, New York 10013




          Re:          Initial Public Offering



Ladies and Gentlemen:




          Citigroup Global Markets Inc. (“Citigroup”) is acting as sole bookrunning manager of
the initial public offering (the “IPO”) of Units consisting of one share of Common Stock of
Freedom Acquisition Holdings, Inc. (the “Company”), and one warrant to purchase one share
of Common Stock of the Company and representative (the “Representative”) of Ladenburg
Thalmann & Co. Inc. and any other underwriters named in the final prospectus (the
“Prospectus”) relating to the IPO (Citigroup, Ladenburg, Thalmann & Co. Inc. and any other
underwriters, collectively, the “Underwriters”). The undersigned stockholder, officer
and/or director of the Company, in consideration of the Underwriters underwriting the Company’s
IPO, hereby agrees as set forth below. Certain capitalized terms used herein are defined in
Section 1 hereof.




     1. As used herein, (i) a “Business Combination” shall mean an acquisition by merger,
capital stock exchange, asset or stock acquisition, reorganization or otherwise, of an operating
business selected by the Company; (ii) “Founders” shall mean all stockholders, officers and
directors who are stockholders of the Company immediately prior to the IPO; (iii) “Common
Stock” shall mean the Company’s common stock, par value $0.0001 per share, (iv) “Founders’
Shares” shall mean all of the shares of Common Stock of the Company owned by a Founder prior to
the IPO, (v) “IPO Shares” shall mean the shares of Common Stock issued in the Company’s
IPO, (vi) “Founders’ Warrants” shall mean all warrants to purchase shares of Common Stock
of the Company owned by a Founder prior to the IPO, other than the Sponsors’ Warrants; (vii)
“Founders’ Units” shall mean the 9,375,000 units issued by the Company to the Founders
prior to the IPO, of which the Founders’ Shares and the Founders’ Warrants are a part; (viii)
“Sponsors’ Warrants” shall mean the 4,500,000 warrants to purchase shares of Common Stock
to be issued to the Sponsors in a private placement immediately prior to the IPO; (ix)
“Co-Investment Units” shall mean the 6,250,000 units of the Company to be issued to the
Sponsors in a private placement that will occur immediately prior to the consummation of a
Business Combination by the Company; (x) “Co-Investment Shares” shall mean the Common Stock
underlying the Co-Investment Units; (xi) “Co-Investment Warrants” shall mean the warrants
to purchase shares of Common Stock underlying the Co-Investment Units; and (xii) “Locked-Up
Securities” shall mean all issued and outstanding Founders’ Units, Founders’ Shares and
Founders’ Warrants (including the shares of Common Stock to be issued upon exercise of the
Founders’ Warrants) and all Sponsors’ Warrants (including the shares of Common Stock to be issued
upon exercise of the Sponsors’ Warrants), Co-Investment Units, Co-Investment Shares



 









 





Freedom Acquisition Holdings, Inc.

Citigroup Global Markets Inc.

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and Co-Investment Warrants (including the shares of Common Stock to be issued upon exercise of
the Co-Investment Warrants) to be issued after the date hereof in accordance with the terms and
conditions set forth in the Prospectus.




     2. If the Company solicits approval of its stockholders of a Business Combination, the
undersigned will vote (i) all Founders’ Shares owned by him or it in accordance with the majority
of the votes cast by the holders of the IPO Shares and (ii) all other shares of the Company’s
Common Stock that may be acquired by him or it in any private placement, the IPO or in the
aftermarket for such Business Combination.



     3. In the event that the Company fails to consummate a Business Combination by the later of
(i) 18 months after the consummation of the IPO (the “Consummation Date”) or (ii) 24 months
after the Consummation Date in the event that either a letter of intent, an agreement in principle
or a definitive agreement to consummate a Business Combination was executed but no Business
Combination was consummated within such 18 month period (such later date being referred to herein
as the “Termination Date”), the undersigned shall, to the fullest extent permitted by the
Delaware General Corporation Law (the “DGCL”), (i) take all action necessary to dissolve
the Corporation and liquidate the trust account established under the Investment Management Trust
Agreement to be entered into between the Company and Continental Stock Transfer & Trust Company
(the “Trust Account”) to holders of IPO Shares as promptly as practicable after approval by
the Company’s stockholders (subject to the requirements of the DGCL) and (ii) vote all Founders’
Shares and all of the shares of the Company’s Common Stock that may be acquired by him or it in any
private placement, the IPO or in the aftermarket in favor of any dissolution and plan of
distribution recommended by the Company’s Board of Directors, and promptly cause the Company to
prepare and file a proxy statement with the Securities and Exchange Commission setting out the plan
of dissolution and distribution. If no proxy statement seeking the approval of the stockholders
for a Business Combination has been filed within 60 days prior to the Termination Date, and the
Board of Directors convenes, adopts and recommends to the stockholders the liquidation and
dissolution of the Company, and the Company files a proxy statement with the Securities and
Exchange Commission seeking stockholder approval for such plan, the undersigned agrees to vote all
Founders’ Shares and all of the shares that may be acquired by him or it in any private placement,
the IPO or in the aftermarket in favor of any such dissolution and plan of distribution recommended
by the Company’s Board of Directors. The undersigned hereby waives any and all right, title,
interest or claim of any kind (“Claim”) to participate in any liquidating distribution of
the Trust Account as part of the Company’s plan of distribution with respect to the Founders’
Shares if the Company fails to consummate a Business Combination and the Trust Account is
consequently liquidated and hereby waives any Claim the undersigned may have in the future as a
result of, or arising out of, any contracts or agreements with the Company and will not seek
recourse against the Trust Account for any reason whatsoever. The undersigned agrees to indemnify
and hold harmless the Company against any and all loss, liability, claims, damage and expense
whatsoever (including, but not limited to, any and all legal or other expenses reasonably incurred in
investigating, preparing or defending against any litigation, whether pending or threatened, or any
claim whatsoever) which the Company may become subject to as a result of any claim by any vendor,
prospective target business or other entity that is owed money by the Company for



 









 





Freedom Acquisition Holdings, Inc.

Citigroup Global Markets Inc.

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services rendered or products sold but only to the extent necessary to ensure that such loss, liability, claim,
damage or expense does not reduce the amount in the Trust Account. The undersigned acknowledges
and agrees that there will be no distribution from the Trust Account with respect to any warrants,
all rights of which will terminate on the Company’s liquidation.




     4. Subject to Section 5 below, in order to minimize potential conflicts of interest
which may arise from multiple affiliations, the undersigned agrees to present to the Company for
its consideration, and not to any other person or entity unless the opportunity is rejected by the
Company, those opportunities to acquire an operating business the undersigned reasonably believes
are suitable opportunities for the Company, until the earlier of (i) the consummation by the
Company of a Business Combination, (ii) the dissolution and liquidation of the Company or (iii)
until such time as the undersigned ceases to be an officer or director of the Company, subject to
any fiduciary obligations the undersigned might have.



     5. The undersigned is the President of Berggruen Holdings North America Ltd. (“Berggruen
Holdings”). Berggruen Holdings has agreed that in the event it or one of its senior investment
professionals becomes aware of, or involved with any Business Combination opportunities with an
enterprise value of $500.0 million or more, Mr. Berggruen will cause Berggruen Holdings to first
offer such business opportunities to the Company and further agrees that neither it nor any of its
affiliates will pursue such opportunities unless and until the Company’s Board of Directors
determines that it will not pursue such opportunities (the “Company’s Right of First
Review”). The Company’s Right of First Review will begin upon the consummation of the IPO and
terminate on the earlier of (i) the consummation by the Company of a Business Combination or (ii)
the dissolution and liquidation of the Company.



     6. The undersigned acknowledges and agrees that the Company will not consummate any Business
Combination which involves a company which is affiliated with any of the Founders unless the
Company obtains an opinion from an independent investment banking firm reasonably acceptable to the
Representative that the Business Combination is fair to the Company’s stockholders from a financial
perspective.



     7. Neither the undersigned, any member of the family of the undersigned, nor any affiliate of
the undersigned will be entitled to receive and will not accept any compensation for services
rendered to the Company prior to the consummation of the Business Combination; provided, however,
that commencing upon the Consummation Date, Berggruen Holdings, Inc. shall be allowed to charge the
Company an allocable share of its overhead, $10,000 per month, to compensate it for office space,
administrative services and secretarial support until the earlier of the Company’s consummation of
a Business Combination or its liquidation. Berggruen Holdings, Marlin Equities II, LLC, the
undersigned and the officers and directors of the Company shall also be entitled to reimbursement
from the Company for their out-of-pocket expenses incurred in connection with seeking and
consummating a Business Combination.



     8. Neither the undersigned, any member of the family of the undersigned, or any affiliate of
the undersigned will be entitled to receive or accept a finder’s fee or any other compensation in
the event the undersigned, any member of the family of the undersigned or any affiliate of the
undersigned originates a Business Combination.



 









 





Freedom Acquisition Holdings, Inc.

Citigroup Global Markets Inc.

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     9. For the period commencing on the date hereof and ending one year from the consummation of a
Business Combination (the “Lock-Up Period”), (i) the undersigned shall retain all of his or
its rights as stockholders of the Company during the Lock-Up Period, including, without limitation,
the right to vote such shares; (ii) all dividends payable in cash with respect to the Founders’
Shares (including any Non-Cash Dividends (as defined below) distributed thereon) shall be paid to
the undersigned, but all dividends payable in stock or other non-cash property (the “Non-Cash
Dividends”) shall be delivered to a mutually acceptable escrow agent to hold in accordance with
the terms hereof until the expiration of the Lock-Up Period; and (iii) the undersigned will not,
without the prior written consent of Citigroup, offer, sell, contract to sell, pledge or otherwise
dispose of (or enter into any transaction which is designed to, or might reasonably be expected to,
result in the disposition (whether by actual disposition or effective economic disposition due to
cash settlement or otherwise) by the undersigned or any affiliate of the undersigned or any person
in privity with the undersigned or any affiliate of the undersigned), directly or indirectly,
including the filing (or participation in the filing) of a registration statement with the
Securities and Exchange Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the meaning of Section 16 of
the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) and the rules and
regulations of the Securities and Exchange Commission promulgated thereunder with respect to, the
Locked-Up Securities, or publicly announce an intention to effect any such transaction except (A)
if the undersigned is an individual, (1) by bona fide gift to a member of the undersigned’s
immediate family or to a trust or other entity, the beneficiary of which is the undersigned or a
member of the undersigned’s immediate family, (2) by virtue of the laws of descent and distribution
upon death of the undersigned or (3) pursuant to a qualified domestic relations order; provided,
however, that with respect to each of the transfers described in clauses (1), (2) and (3) of this
sentence, (i) prior to such transfer, the transferee of such transfer, or the trustee or legal
guardian on behalf of any transferee, agrees in writing to be bound by the terms of
Sections 2, 3, 8, 9, 13 and 14 of this
letter and (ii) no filing by any party under the Exchange Act shall be required or shall be
voluntarily made in connection with such disposition or transfer and (B) each of Berggruen Holdings
and Marlin Equities II, LLC may transfer its Locked-Up Securities to the officers, directors and
employees of the Company or to any of its affiliates or employees of its affiliates; provided,
however, that with respect to each such transfer, (i) prior to such transfer, the transferee of
such transfer, or the trustee or legal guardian on behalf of any transferee, agrees in writing to
be bound by the terms of Sections 2, 3, 8, 9, 13
and 14 of this letter and (ii) no filing by any party under the Exchange Act shall be
required or shall be voluntarily made in connection with such disposition or transfer.



     10. The undersigned agrees to be President, Chief Executive Officer and a Director of the
Company until the earlier of the consummation by the Company of a Business Combination or the
dissolution and liquidation of the Company. The undersigned’s biographical information furnished to
the Company and the Representative and attached hereto as Exhibit A is true and
accurate in all respects, does not omit any material information with respect to the
undersigned’s background and contains all of the information required to be disclosed pursuant to
Section 401 of Regulation S-K, promulgated under the Securities Act of 1933, as amended. The
undersigned’s Questionnaire furnished to the Company and the Representative and annexed as



 









 





Freedom Acquisition Holdings, Inc.

Citigroup Global Markets Inc.

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Exhibit B hereto is true and accurate in all respects. The undersigned represents and
warrants that:





     (a) he is not subject to or a respondent in any legal action for, any injunction,
cease-and-desist order or order or stipulation to desist or refrain from any act or practice
relating to the offering of securities in any jurisdiction;




     (b) he has never been convicted of or pleaded guilty to any crime (i) involving any
fraud or (ii) relating to any financial transaction or handling of funds of another person,
or (iii) pertaining to any dealings in any securities and he is not currently a defendant in
any such criminal proceeding; and




     (c) he has never been suspended or expelled from membership in any securities or
commodities exchange or association or had a securities or commodities license or
registration denied, suspended or revoked.



     11. The undersigned has full right and power, without violating any agreement by which he is
bound, to enter into this Agreement and to serve as President, Chief
Executive Officer and a Director of the
Company.



     12. The undersigned authorizes any employer, financial institution, or consumer credit
reporting agency to release to the Representative and its legal representatives or agents
(including any investigative search firm retained by the Representative) any information they may
have about the undersigned’s background and finances (“Information”), purely for the
purposes of the Company’s IPO (and shall thereafter hold such information confidential). Neither
the Representative nor its agents shall be violating the undersigned’s right of privacy in any
manner in requesting and obtaining the Information and the undersigned hereby releases them from
liability for any damage whatsoever in that connection.



     13. The undersigned hereby waives his or its right to exercise redemption rights with respect
to any Founders’ Shares owned by the undersigned, directly or indirectly, and agrees that he will
not seek redemption for cash with respect to such Founders’ Shares in connection with any vote to
approve a Business Combination (as is more fully defined in the Prospectus).



[Signature Page to Follow]




 









 





Freedom Acquisition Holdings, Inc.

Citigroup Global Markets Inc.

Page 6




     14. The undersigned hereby agrees that any action, proceeding or claim against the undersigned
arising out of or relating in any way to this Agreement shall be brought and enforced in the courts
of the State of New York or the United States District Court for the Southern District of New York,
and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The
undersigned hereby waives any objection to such exclusive jurisdiction and that such courts
represent an inconvenience forum.



	 	 	 	 	 
	 	 	 
	 	By:  	                         /S/ NICOLAS BERGGRUEN
 	 
	 	 	Nicolas Berggruen 	 
	 	 	 	 
	 




 









 





EXHIBIT A




     Nicolas Berggruen has been our president and chief executive officer since our inception in
June 2006. Mr. Berggruen founded what became Berggruen Holdings Inc. in 1984 to act as investment
advisor to a Berggruen family trust that has made over 50 control and non-control direct
investments in operating businesses over the last 20 years. Mr. Berggruen has served as the
president of Berggruen Holdings Inc. since its inception. In 1984 he also co-founded Alpha
Investment Management, a multi-billion dollar hedge fund management company that was sold to Safra
Bank in 2004. Prior to co-founding Alpha Investment Management and Berggruen Holdings, Mr.
Berggruen served as an analyst on the real estate side of the family-held investment firm Bass
Brothers Enterprises, and an associate of Jacobson and Co., Inc., a leveraged buyout company. Mr.
Berggruen obtained a Bachelor of Science in Finance and International Business from New York
University.



 









 





EXHIBIT B




See attached D&O Questionnaire