EX-10.4 Form of Investment Management Trust Agreem



 





EXHIBIT 10.4




INVESTMENT MANAGEMENT TRUST AGREEMENT




     THIS INVESTMENT MANAGEMENT TRUST AGREEMENT (the “Agreement”) is made as of            by and between MBF HEALTHCARE ACQUISITION CORP., a Delaware corporation (the
“Company”), and CONTINENTAL STOCK TRANSFER & TRUST COMPANY (“Trustee”).



     WHEREAS, the Company’s Registration Statement on Form S-1, File No. 333-135610 (as amended,
“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”);



     WHEREAS, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Joseph & Co. Inc. and
Ladenburg Thalmann & Co. Inc. (the “Representatives”) are acting as the representatives of the
underwriters in the IPO;



     WHEREAS, the Company has completed a private placement of 343,750 units, each of which
consists of one share of the Company’s common stock and one warrant of the Company (“Units”), and
warrants to purchase 2,750,000 shares of the Company’s common stock for an aggregate purchase price
of $5,500,000 (the “Private Placement”);



     WHEREAS, as described in the Company’s Registration Statement, and in accordance with the
Company’s Certificate of Incorporation, $145,500,000 of the gross proceeds of the IPO and Private
Placement ($166,875,000 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 public holders of the Company’s common stock, par value $0.0001 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”);



     WHEREAS, pursuant to the Underwriting Agreement, a portion of the Property equal to $3,000,000
($3,450,000 if the underwriters’ over-allotment is exercised in full) is attributable to deferred
underwriting commissions that will become payable by the Company to the Representatives upon the
consummation of a Business Combination (as defined in the Registration Statement) (the “Deferred
Discount”); 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”) and brokerage account established by the
Trustee at JP Morgan Chase & Co. or its affiliates;



     (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, invest and reinvest the
Property in any Government Security. As used herein, “Government Security” means any Treasury Bill
issued by the United States, having a maturity of one hundred eighty (180) days or less, or money
market funds selected by the Company meeting certain conditions specified in Rule 2a-7 promulgated
under the Investment Company Act of 1940, as amended, 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 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;



     (i) If there is any income tax obligation relating to the income of the Property in the Trust
Account, then, at the written instruction of the Company, the Trustee disburse to the Company by
wire transfer, out of the Property in the Trust Account, for the amount indicated by the Company as
owing in respect of such income tax obligation;



     (j) 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, signed on behalf of the Company by its Chief Executive
Officer and Chief Financial Officer and affirmed by its Board of Directors and complete the
liquidation of the Trust Account and distribute the Property in the Trust Account (which
disbursement shall include, in the event of a Business Combination, payment of the Deferred
Discount to the Underwriter) only as directed in the Termination Letter and the other documents
referred to therein.; and



     (k) Permit or effect no distribution from the Trust Account except in accordance with
paragraphs 1(i); 1(j) and 4(a).



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, Chief Financial Officer, or Chief Operating Officer. In addition, except with
respect to its duties under paragraph 1(j) 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;



     (c) Pay the Trustee an initial acceptance fee, an annual fee and a transaction processing fee
for each disbursement made pursuant to 1(i) as set forth on Schedule A hereto, which fees shall be
subject to modification by the parties from time to time. It is expressly understood that the
Property shall not be used to pay such fees. 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 annual 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 set forth in this Section
2(c) and as may be provided in Section 1(c) hereof (it being expressly understood that the Property
shall not be used to make any payments to the Trustee under such Sections);



     (d) Provide to the Trustee any letter of intent, agreement in principle or definitive
agreement that is executed prior to           , 2009 in connection with a
Business Combination, together with a certified copy of a resolution of the Board of Directors of
the Company affirming that such letter of intent, agreement in principle or definitive agreement is
in effect;



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     (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 tabulating stockholder votes (which firm may be the Trustee)
verifying the vote of the Company’s stockholders regarding such Business Combination.



     (f) If the Company does not effect a Business Combination within 24 months after consummation
of the IPO, the Company’s existence shall terminate and the Company shall promptly initiate
procedures for the Company’s dissolution and liquidation. The Company shall promptly file a
certificate of dissolution and provide the Trustee a Termination Letter substantially in the form
of Exhibit B.



     (g) At least three (3) business days prior to sending such request or other correspondence in
respect of any disbursement to the Trustee, the Company shall provide the Representatives with a
copy of any proposed written disbursement request and any other correspondence in respect of
disbursement from the Company.



     (h) Within five (5) business days after the Representatives’ over-allotment option (or any
unexercised portion thereof) expires or is exercised in full, provide the Trustee written notice
(with a copy to the Representatives of the total amount of the Deferred Discount, which shall in no
event be less than $3 million)



3. Limitations of Liability. The Trustee shall have no responsibility or liability:




     (a) To 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) To 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) To change the investment of any Property, other than in compliance with paragraph 1(c);




     (d) To refund any depreciation in principal of any Property;




     (e) For assuming that any person designated by the Company to give instructions hereunder
shall continue to have such authority unless (i) provided otherwise in such designation or (ii) 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



     (h) File tax reports, prepare income tax returns or pay any taxes on behalf of the Trust
Account (it being expressly understood that, as set forth in Section 1(i), if there is any income
tax obligation relating to the income of the Property in the Trust Account, then, at the written
instruction of the Company, the Trustee shall disburse to the Company, out of the Property in the
Trust Account, the amount indicated by the Company as owing to each such taxing authority).



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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(j) 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 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 one
instrument.



     (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

17 Battery Place

New York, New York 10004

Attn: Steven G. Nelson

Fax No.: (212) 509-5150





     if to the Company, to:




			
	               	 	MBF Healthcare Acquisition Corp.

121 Alhambra Plaza, Suite 1100

Coral Gables, Florida 33134

Tel No.: (305) 461-1162





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     (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.



     (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.



6. Additional Parties. For so long as proceeds of the IPO and/or Private Placement are held
in the trust account, the Representatives are third party beneficiaries with respect to Section
2(g) and shall be entitled to enforce the terms of Section 2(g) of this Agreement to the same
extent as if they were parties hereto.



[Signature page follows]




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     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:  	/s/
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	 	MBF HEALTHCARE ACQUISITION CORP.

 	 
	 	By:  	/s/
 	 
	 	 	Name:  	Marcio C. Cabrera 	 
	 	 	Title:  	Chief Financial Officer 	 



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SCHEDULE A




Schedule of fees pursuant to Section 2(c) of Investment Management Trust Agreement

between MBF Healthcare Acquisition Corp. and

Continental Stock Transfer & Trust Company




	 	 	 	 	 	 	 
	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
Company under Section
1(i)
	 	Deduction by Trustee from disbursement
made to Company under Section 1(i)

	 	$	250	 






Agreed:

Dated:                               , 2007




	 	 	 	 	 
	 	MBF Healthcare Acquisition Corp.

 	 
	 	By:  	/s/
 	 
	 	 	Authorized Officer 	 
	 	 	 	 
	 
	 	Continental Stock Transfer & Trust Co.

 	 
	 	By:  	/s/
 	 
	 	 	Authorized Officer 	 
	 	 	 	 



 









 






	 	 	 	 	 



EXHIBIT A




[Letterhead of Company]




[Insert date]




Continental Stock Transfer & Trust Company

17 Battery Place

New York, New York 10004

Attn:                               




          Re: Trust Account No.                      Termination Letter




Ladies and Gentlemen:





     Pursuant to paragraph 1(j) of the Investment Management Trust Agreement between MBF Healthcare
Acquisition Corp. (the “Company”) and Continental Stock Transfer & Trust Company (the “Trustee”),
dated as of            (the “Trust Agreement”), this is to advise you that the
Company has entered into an agreement with            (the “Target
Business”) to consummate a business combination with the Target Business (the “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 (the “Consummation
Date”).



     Pursuant to paragraph 2(e) of the Trust Agreement, we are providing you with [an affidavit][a
certificate] of           , which verifies the vote of the Company’s
stockholders in connection with the Business Combination. 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 the Business Combination has been consummated and (ii) the Company shall deliver to you
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 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 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,



MBF HEALTHCARE ACQUISITION CORP.

 	 
	 	By:  	/s/
 	 
	 	 	Name:  	Miguel B. Fernandez 	 
	 	 	Title:  	Chief Executive Officer 	 
	 
	 	 	 
	 	By:  	/s/
 	 
	 	 	Name:  	Marcio C. Cabrera 	 
	 	 	Title:  	Chief Financial Officer 	 



 









 






	 	 	 	 	 



EXHIBIT B




[Letterhead of Company]

[Insert date]




Continental Stock Transfer & Trust Company

17 Battery Place

New York, New York 10004

Attn: Steven Nelson




          Re: Trust Account No.                      Termination Letter




Ladies and Gentlemen:





     Pursuant to paragraph 1(j) of the Investment Management Trust Agreement between MBF Healthcare
Acquisition Corp. (the “Company”) and Continental Stock Transfer & Trust Company (the “Trustee”),
dated as of ___________________ (the “Trust Agreement”), this is to advise you that the
Company has been dissolved due to the Company’s inability to effect a Business Combination within
the time frame specified in the Company’s prospectus relating to its IPO. Attached hereto is a
certified copy of the Certificate of Dissolution as filed with the Delaware Secretary of State.



     In accordance with the terms of the Trust Agreement, we hereby authorize you, to commence
liquidation of the Trust Account. In connection with this liquidation, you are hereby authorized,
in your discretion, to establish a record date for the purposes of determining the Public
Stockholders of record entitled to receive their per share portion of the Trust Account. The record
date shall be within ten (10) days of the date of this letter. 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”) in accordance with the
Plan of dissolution and liquidation approved by the stockholders of the Company. 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.



	 	 	 	 	 
	 	Very truly yours,



MBF HEALTHCARE ACQUISITION CORP.

 	 
	 	By:  	/s/
 	 
	 	 	Name:  	Miguel B. Fernandez 	 
	 	 	Title:  	Chief Executive Officer 	 
	 
	 	 	 
	 	By:  	/s/
 	 
	 	 	Name:  	Marcio C. Cabrera 	 
	 	 	Title:  	Chief Financial Officer 	 



 









 






	 	 	 	 	 



EXHIBIT C




	 	 	 
	AUTHORIZED INDIVIDUAL(S) FOR	 	 
	TELEPHONE CALL BACK	 	AUTHORIZED TELEPHONE NUMBER(S)
	Company:
	 	 
	 
	 	 
	MBF Healthcare Acquisition Corp.


121 Alhambra Plaza, Suite 1100


Coral Gables, Florida 33134


Attn: Marcio C. Cabrera
	 	(305) 461-1162
	 
	 	 
	Trustee:
	 	 
	 
	 	 
	Continental Stock Transfer & Trust Company


17 Battery Place 


New York, New York 10004


Attn: [                    ]
	 	(212) 845-3200