Exhibit
10.4


 


May 17, 2006


 


HD Partners Acquisition Corporation


2601 Ocean Park Boulevard, Suite 320


Santa Monica, CA 90405


 


 


Morgan Joseph & Co.
Inc.


600 Fifth Avenue


19th Floor


New York, New York 10020


 


 


Re:          Initial Public
Offering


 


Gentlemen:


 


The
undersigned officer of HD Partners Acquisition Corporation (“Company”), in
consideration of Morgan Joseph & Co. Inc. (“Morgan Joseph”) entering into a
letter of intent (“Letter of Intent”) to underwrite an initial public offering
of the securities of the Company (“IPO”) and embarking on the IPO process,
hereby agrees as follows (certain capitalized terms used herein are defined in
paragraph 13 hereof):


 


1.             In
the event that the Company fails to consummate a Business Combination within 18
months from the effective date (“Effective Date”) of the registration statement
relating to the IPO (or 24 months under the circumstances described in the
prospectus relating to the IPO), the undersigned will (i) cause the Trust Fund
(as defined in the Letter of Intent) to liquidate the Trust Fund to the holders
of IPO Shares, (ii) take all reasonable actions within his power to cause the
Company to dissolve as soon as reasonably practicable and (iii) vote his shares
in favor of any plan of dissolution and 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”)
in or to any rights in the Trust Fund, except with respect to any
of the IPO Shares, as defined herein, acquired by the undersigned in connection
with or following the IPO, and any remaining net assets of the Company as a
result of such liquidation of the Trust Fund and dissolution of the Company 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 Fund 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 as a result of
any claim by any vendor, prospective target business or other entity that is
owed money by the Company for services rendered or products sold provided that
the Company did not obtain a waiver from such party of its rights or claims to
the Trust Fund and only to the extent necessary to ensure that such loss,
liability, claim, damage or expense does not reduce the amount in the Trust
Fund (as defined in the Letter of Intent).


 


2.             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, prior to presentation to any other person or entity, any
suitable opportunity to acquire an operating business, until the earlier of the
consummation by the Company of a Business Combination, the dissolution of the
Company or until such time as the undersigned ceases to be an officer of the
Company, subject to any pre-existing fiduciary and contractual obligations the
undersigned might have.


 


3.             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
Insiders unless the Company obtains an opinion from an independent investment
banking firm which is a member of the National Association of Securities
Dealers, Inc. and is reasonably acceptable to Morgan Joseph that the Business
Combination is fair to the Company’s stockholders from a financial perspective.


 


4.             Neither the undersigned, any member of
the family of the undersigned, nor any affiliate of the undersigned
(“Affiliate”) 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 that commencing on the Effective Date, Value Investments,
LLC (“Related Party”), shall be allowed to charge the Company an allocable
share of Related Party’s overhead, up to $7,500 per month, to compensate it for
the Company’s use of Related Party’s office space, utilities,
administrative, technology and secretarial services.  Related Party and the undersigned 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.


 


5.             Neither the
undersigned, any member of the family of the undersigned, nor any Affiliate
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 originates a Business Combination.


 


6.             The
undersigned agrees to be the Executive Vice President of the Company until the
earlier of the consummation by the Company of a Business Combination or the
dissolution of the Company.  The
undersigned’s biographical information furnished to the Company and Morgan
Joseph 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 Item 401 of Regulation S-K, promulgated
under the Securities Act of 1933.  The
undersigned’s Questionnaire previously furnished to the Company and Morgan
Joseph 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.


 


7.             The
undersigned has full right and power, without violating any agreement by which
he is bound, to enter into this letter agreement and to serve as the Executive
Vice President of the Company.


 


8.             The
undersigned authorizes any employer, financial institution, or consumer credit
reporting agency to release to Morgan Joseph and its legal representatives or
agents (including any investigative search firm retained by Morgan Joseph) any
information they may have about the undersigned’s background and finances
(“Information”).  Neither Morgan Joseph
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.


 


9.             In connection with the vote
required to consummate a Business Combination, the undersigned agrees that he
will vote all shares of common stock, par value, $0.001, owned  by him prior to the IPO (“Insider Shares”) in
accordance with the majority of the votes cast by the holders of the IPO
Shares, and all shares of common stock acquired in connection with or following
the IPO “For” a Business Combination.


 


10.           The undersigned will escrow his Insider
Shares for the period commencing on the Effective Date and ending on the third
anniversary of the Effective Date, subject to the terms of a Stock Escrow
Agreement which the Company will enter into with the undersigned and an escrow
agent acceptable to the Company.


 


11.           The undersigned
agrees to not to resign from his position as officer of the Company as set
forth in the Registration Statement without the prior consent of


 

















 


Morgan Joseph until the earlier of the consummation by the Company of a
Business Combination, liquidation of the Trust Account, or the dissolution of
the Company. The undersigned acknowledges that the foregoing does not interfere
with or limit in any way the right of the Company to terminate the
undersigned’s employment at any time (subject to other contractual rights the
undersigned may have) nor confer upon the undersigned any right to continue in
the employ of Company.


 


12.           This letter
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.  The undersigned
hereby (i) agrees that any action, proceeding or claim against him arising out
of or relating in any way to this letter agreement (a “Proceeding”) shall be
brought and enforced in the courts of the State of New York of the United
States of America for the Southern District of New York, and irrevocably
submits to such jurisdiction, which jurisdiction shall be exclusive, (ii)
waives any objection to such exclusive jurisdiction and that such courts
represent an inconvenient forum and (iii) irrevocably agrees to appoint
Ellenoff Grossman & Schole LLP as agent for the service of process in the
State of New York to receive, for the undersigned and on his behalf, service of
process in any Proceeding.  If for any
reason such agent is unable to act as such, the undersigned will promptly
notify the Company and Morgan Joseph and appoint a substitute agent acceptable
to each of the Company and Morgan Joseph within 30 days and nothing in this
letter will affect the right of either party to serve process in any other
manner permitted by law.


 


 


13.           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 or businesses in the media, entertainment and/or
telecommunications industries; (ii) “Insiders” shall mean all officers, directors
and stockholders of the Company immediately prior to the IPO; and (iii) “IPO
Shares” shall mean the shares of Common Stock issued in the Company’s IPO.


 


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  Lawrence
  N. Chapman

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Print
  Name of Insider

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  /s/ Lawrence N.
  Chapman

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


EXHIBIT A


 


Lawrence
Chapman has been our Executive Vice President since December 2005 and
served as a director from December 2005 through April 2006. Mr. Chapman
retired from Hughes Electronics Corporation (which changed its name to The
DIRECTV Group in 2004) in August 2004, with his most recent assignment as
President and Chief Operating Officer of DIRECTV’s Latin American operation, at
the time the region’s largest pay television service with offerings in over 28
countries. Mr. Chapman was appointed as President of DIRECTV Latin
America, LLC (a partnership between DIRECTV Latin America Holdings, a
subsidiary of Hughes Electronics Corp., Darlene Investments LLC, an affiliate
of the Cisneros Group of Companies, and Grupo Clarin), to lead the
reorganization of the company under Chapter 11 of the U.S. Bankruptcy Code.
DIRECTV Latin America emerged from Chapter 11 in April 2004. From
August 2001 through December 2002, Mr. Chapman was Executive
Vice President in charge of DIRECTV’s Product Development, Marketing and
Advertising organizations. From March 2000 through August 2001,
Mr. Chapman was President of DIRECTV Global Digital Media Inc., a
subsidiary of Hughes Electronics Corporation). Between 1990 and 2000,
Mr. Chapman served in a number of capacities at DIRECTV including Senior
Vice President of Programming, Senior Vice President of Special Markets and
Distribution, and Vice President of Business Affairs. Before his assignments
with DIRECTV, a business unit of Hughes Electronics Corporation,
Mr. Chapman served in various business development roles at Hughes
Communications Inc., a satellite services subsidiary of Hughes Electronics
Corporation. From 1985 to 1989, Mr. Chapman was Deputy General Manager at
JCSat, a Tokyo-based satellite services joint venture between Hughes
Communications, Itochu Corporation and Mitsui and Company, Ltd.
Mr. Chapman holds MS and BS degrees in Electrical Engineering from the
University of Florida. Mr. Chapman served as a member of the Board of
Directors of TiVo, Inc. from 1999 to 2003 and as a member of the Board of
Directors of PanAmSat Corporation in 2003.