Exhibit 10.4


 


December 19, 2005


 


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 and director 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 be liquidated and distributed to the
holders of IPO Shares and (ii) take all reasonable actions within his
power to cause the Company to liquidate as soon as reasonably practicable.  The undersigned hereby
waives any and all right, title, interest or claim of any kind (“Claim”) in or
to any distribution of 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 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 that is owed money by
the Company for 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 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 liquidation of the
Company or until such time as the undersigned ceases to be an officer or
director 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 an Executive Vice President of the Company until the earlier of
the consummation by the Company of a Business Combination or the liquidation 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 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 an 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 (or advise the Board that the undersigned declines to seek re-election
to the Board of Directors) from his position as officer and/or director 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 liquidation 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; (iii) “Insider Shares” shall mean all of the shares of
Common Stock of the Company owned by an Insider prior to the IPO; and (iv) “IPO
Shares” shall mean the shares of Common Stock issued in the Company’s IPO.


 


 


	
   

  	
  Lawrence
  N. Chapman

  	
   

  
	
   

  	
  Print
  Name of Insider

  
	
   

  	
   

  
	
   

  	
  /s/
  Lawrence N. Chapman

  	
   

  
	
   

  	
  Signature

  
				



 





















 


EXHIBIT A


 


Lawrence
Chapman has been our
Executive Vice President and a director since December 2005.  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 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.