Document:

Exhibit 10.24

 

	
Name of Optionee:
    	
 
    	
[•]
    
	
Number of Shares of Stock subject to Option:
    	
 
    	
[•]
    
	
Price Per Share:
    	
 
    	
$[•]
    
	
Date of Grant:
    	
 
    	
[•]
    

 

MATTRESS FIRM HOLDING CORP.
 2011 OMNIBUS INCENTIVE PLAN

 

STOCK OPTION AGREEMENT

 

This agreement (the “Agreement”) evidences a stock option granted by Mattress Firm Holding Corp. (the “Company”) to the undersigned (the “Optionee”), pursuant to and subject to the terms of the Mattress Firm Holding Corp. 2011 Omnibus Incentive Plan (as amended from time to time, the “Plan”), which are incorporated herein by reference.

 

1.             Grant of Stock Option.  The Company grants to the Optionee on the date of grant set forth above (the “Date of Grant”) an option (the “Stock Option”) to purchase, on the terms provided herein and in the Plan, the number of shares of Stock of the Company set forth above (the “Shares”) with an exercise price per Share as set forth above, subject to adjustment pursuant to Section 7 of the Plan in respect of transactions occurring after the date hereof.  Fifty percent (50%) of the Stock Option (representing a stock option to purchase [·] Shares) will be subject to the time-based vesting provisions set out in Section I of Schedule A below (“Time-Based Stock Option”) and fifty percent (50%) of the Stock Option (representing a stock option to purchase [·] Shares) will be subject to the time-based and performance-based vesting provisions set out in Section II of Schedule A below (“Performance-Based Stock Option”), in each case, in accordance with the terms of this Agreement, including Schedule A, and the Plan.

 

The Stock Option evidenced by this Agreement is a non-statutory option (that is, an option that is not to be treated as a stock option described in subsection (b) of Section 422 of the Code) and is granted to the Optionee in connection with the Optionee’s Employment by the Company and its qualifying subsidiaries.  For purposes of the immediately preceding sentence, “qualifying subsidiary” means a subsidiary of the Company as to which the Company has a “controlling interest” as described in Treas. Regs. § 1.409A-1(b)(5)(iii)(E)(1).

 

2.             Vesting; Method of Exercise; Treatment of the Stock Option Upon Cessation of Employment.

 

(a)                                  Generally.  As used herein with respect to the Stock Option or any portion thereof, the term “vest” means to become exercisable and the term “vested” as applied to any outstanding Stock Option or any portion thereof means that the Stock Option or portion thereof is then exercisable, subject in each case to the terms of the Plan.   Unless earlier terminated,

 

 

relinquished or expired, the Stock Option will vest in accordance with the terms of Schedule A attached hereto.

 

(b)                                 Exercise of the Stock Option.  No portion of the Stock Option may be exercised until such portion vests.  Each election to exercise any vested portion of the Stock Option will be subject to the terms and conditions of the Plan and shall be made in writing, signed by the Optionee (subject to any restrictions provided under the Plan or prescribed by the Administrator).  Each such written exercise election must be received by the Company at its principal office or by such other party as the Administrator may prescribe and must be accompanied by payment in full as provided in the Plan.  The exercise price shall be paid by cash or check acceptable to the Administrator, or, if legally permissible and permitted by the Administrator, (i) through the delivery of unrestricted shares of Stock that have a fair market value equal to the exercise price, subject to such minimum holding period requirements, if any, as the Administrator may prescribe, (ii) through a broker-assisted exercise program acceptable to the Administrator or (iii) by other means acceptable to the Administrator.  In the event that the Stock Option is exercised by a person other than the Optionee, the Company will be under no obligation to deliver Shares hereunder unless and until it is satisfied as to the authority of the person to exercise the Stock Option and as to compliance with applicable securities laws.  The latest date on which the Stock Option or any portion thereof may be exercised will be the 10th anniversary of the Date of Grant; provided, however, that if the Optionee is prohibited by applicable law or written Company policy applicable to similarly situated employees from engaging in open-market sales of shares of Stock on the 10th anniversary of the Date of Grant, the latest day on which the Stock Option or any portion thereof may be exercised will be thirty (30) days following the date the Optionee is no longer so prohibited from engaging in such open-market sales (the “Final Exercise Date”), and if not exercised by such date the Stock Option or any remaining portion thereof will thereupon immediately terminate.

 

(c)                                  Treatment of the Stock Option Upon Cessation of Employment.  If the Optionee’s Employment ceases, the Stock Option, to the extent not already vested, will be immediately forfeited, and any vested portion of the Stock Option that is then outstanding will be treated as follows:

 

(i)            Subject to clauses (ii) and (iii) below, the Stock Option to the extent vested immediately prior to the cessation of the Optionee’s Employment will remain exercisable until the earlier of (A) four months following the cessation of the Optionee’s Employment, and (B) the Final Exercise Date, and except to the extent previously exercised as permitted by this Section 3(c)(i), will thereupon immediately terminate.

 

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(ii)           The Stock Option, to the extent vested immediately prior to the cessation of the Optionee’s Employment due to the Optionee’s death will remain exercisable until the earlier of (A) one year following cessation of the Optionee’s Employment, and (B) the Final Exercise Date, and except to the extent previously exercised as permitted by this Section 3(c)(ii), will thereupon immediately terminate.

 

(iii)          The Stock Option (whether or not vested) will terminate and be forfeited immediately prior to the cessation of Optionee’s Employment if the Administrator in its sole discretion determines that such cessation of Employment is for Cause or occurs under circumstances that would have constituted grounds for the Optionee’s Employment to be terminated for Cause.

 

3.             Transfer of Stock Option. The Stock Option may not be transferred except as permitted by the Administrator pursuant to Section 6(a)(3) of the Plan.

 

4.             Withholding.  The exercise of the Stock Option will give rise to wages subject to tax withholding.  The Optionee expressly acknowledges and agrees that the Optionee’s rights hereunder, including the right to be issued Shares upon exercise, are subject to the Optionee promptly paying to the Company in cash (or by such other means, including a broker-assisted exercise program, as may be acceptable to the Administrator in its sole discretion) all amounts required to be withheld.  No Shares will be transferred pursuant to the exercise of the Stock Option unless and until the person exercising the Stock Option has remitted to the Company an amount sufficient to satisfy any federal, state, or local tax withholding requirements, or has made other arrangements satisfactory to the Company with respect to such requirements. The Optionee also authorizes the Company and its subsidiaries to withhold such amount from any amounts otherwise payable to the Optionee.

 

5.             Effect on Employment.  Neither the grant of the Stock Option, nor the issuance of Shares upon exercise of the Stock Option, will give the Optionee any right to be retained in the employ of the Company or any of its Affiliates, affect the right of the Company or any of its Affiliates to discharge or discipline the Optionee at any time, or affect any right of the Optionee to terminate his or her Employment at any time.

 

6.             Good Standing. The Administrator may cancel, rescind, withhold or otherwise limit or restrict the Stock Option at any time if the Optionee is not in compliance with all applicable provisions of this Agreement and the Plan, or if the Optionee breaches any agreement with the Company or its subsidiaries with respect to non-competition, non-solicitation or confidentiality, or as otherwise permitted under Section 6(a)(5) of the Plan.

 

7.             Governing Law.  This Agreement and all claims or disputes arising out of or based upon this Agreement or relating to the subject matter hereof will be governed by and construed in accordance with the domestic substantive laws of the State of Delaware

 

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without giving effect to any choice or conflict of laws provision or rule that would cause the application of the domestic substantive laws of any other jurisdiction.

 

By acceptance of the Stock Option, the undersigned agrees hereby to be subject to the terms of the Plan.  The Optionee further acknowledges and agrees that (i) the signature to this Agreement on behalf of the Company is an electronic signature that will be treated as an original signature for all purposes hereunder and (ii) such electronic signature will be binding against the Company and will create a legally binding agreement when this Agreement is countersigned by the Optionee.

 

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Executed as of the [·] day of [·],[·].

 

 

	
Company:
    	
 
    	
Mattress Firm   Holding Corp.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name: [·]
    
	
 
    	
 
    	
Title: [·]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Optionee:
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Address:
    

 

 

Schedule A

Vesting Schedule

 

I.              Time-Based Stock Option

 

The Time-Based Stock Option, unless earlier terminated or forfeited, shall vest as to 20% of the total number of Shares subject to the Time-Based Stock Option on each of the first, second, third, fourth and fifth anniversaries of the Date of Grant, subject to the Optionee remaining in continuous Employment on the applicable vesting date.

 

II.            Performance-Based Stock Option

 

The Performance-Based Stock Option, unless earlier terminated or forfeited, shall be eligible to vest as to 25% of the total number of Shares subject to the Performance-Based Stock Option on each of the first, second, third, and fourth anniversaries of the Date of Grant, subject to the Optionee remaining in continuous Employment on the applicable vesting date, and shall vest on each such date only  if the Share Price target set forth below with respect to the relevant vesting date (each such target, the “Share Price Target”) is achieved, as follows:

 

(a)          25% of the total number of Shares subject to the Performance-Based Stock Option on the first anniversary of the Date of Grant, provided the Share Price is equal to or exceeds [·];

 

(b)         25% of the total number of Shares subject to the Performance-Based Stock Option on the second anniversary of the Date of Grant, provided the Share Price is equal to or exceeds [·];

 

(c)          25% of the total number of Shares subject to the Performance-Based Stock Option on the third anniversary of the Date of Grant, provided the Share Price is equal to or exceeds [·];and

 

(d)         25% of the total number of Shares subject to the Performance-Based Stock Option on the fourth anniversary of the Date of Grant, provided the Share Price is equal to or exceeds [·].

 

If, on any vesting date set forth in subsection (a) through (c) above, the Share Price Target is not achieved, the portion of the Stock Option that does not vest shall remain eligible to vest on the next succeeding vesting date or dates set forth in subsections (b) through (d) above and shall thereafter vest if the relevant Share Price Target with respect to such subsequent vesting date or dates is achieved.  For example, if the portion of the Stock Option that is eligible to vest pursuant to subsection (a) above does not vest on such date because the Share Price Target set forth in subsection (a) has not been achieved, and, on the next succeeding vesting date, the portion of the Stock Option that is eligible to vest pursuant to subsection (b) vests because the Share Price Target set forth in subsection (b) has been achieved, the portion of the Stock Option set forth in subsection (a) shall also vest on such date.  To the extent that the Performance-Based Stock Option, or any portion of thereof, remains unvested as of the final vesting date set forth in subsection (d), the Performance-Based Stock Option, or portion thereof, that is so unvested shall be cancelled with no consideration due to the Optionee.  For the avoidance of doubt, in no event shall any portion of the Stock Option remain eligible to vest following a cessation of the Optionee’s Employment.

 

 

For purposes of this Section II, “Share Price” shall mean, with respect to each relevant vesting date, the weighted-average closing price (by dollar volume) of the Company’s Stock over the preceding thirty (30) trading days, as determined by the Administrator.Exhibit 10.3

 

FORM OF INVESTMENT MANAGEMENT TRUST AGREEMENT

 

THIS INVESTMENT MANAGEMENT TRUST AGREEMENT (this “Agreement”) is made effective as of      , 2011 by and between HBC Acquisition Corp., a Delaware corporation (the “Company”), and Continental Stock Transfer & Trust Company (the “Trustee”).

 

WHEREAS, the Company’s registration statement on Form S-1, No. 333-176703 (the “Registration Statement”) and prospectus (the “Prospectus”) for the initial public offering of the Company’s units (the “Units”), each of which consists of one share of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), and one warrant to purchase one share of Common Stock (the “Warrants”) (such initial public offering hereinafter referred to as the “Offering”), has been declared effective as of the date hereof (the “Effective  Date”) by the Securities and Exchange Commission;

 

WHEREAS, the Company has entered into an Underwriting Agreement with Citigroup Global Markets Inc. as representative of the several underwriters (the “Underwriters”) named therein (the “Underwriting Agreement”);

 

WHEREAS, as described in the Registration Statement, $100,000,000 of the gross proceeds of the Offering and sale of the Sponsor Warrants (as defined in the Underwriting Agreement) (or $114,700,000 if the Underwriters’ over-allotment option is exercised in full) will be delivered to the Trustee to be deposited and held in a segregated trust account located in the United States (the “Trust Account”) for the benefit of the Company and the holders of the  Common Stock included in the Units issued in the Offering as hereinafter provided (the amount to be delivered to the Trustee will be referred to hereinafter 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.

 

NOW THEREFORE, 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 the Trust Account at JP Morgan Chase, N.A. and at a brokerage institution selected by the Trustee that is satisfactory to the Company;

 

(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 United States government securities within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended, having a maturity of 180 days or less, or in money market funds meeting the conditions of paragraphs (c)(2), (c)(3), (c)(4) and

 

 

(c)(5) of Rule 2a-7 promulgated under the Investment Company Act of 1940, as amended, which invest only in direct U.S. government treasury obligations, as determined by the Company; it being understood that the Trust Account will earn no interest while account funds are uninvested awaiting the Company’s instructions hereunder;

 

(d)                                 Collect and receive, when due, all interest or other income arising from the Property, which shall become part of the “Property,” as such term is used herein;

 

(e)                                  Promptly notify the Company and Citigroup Global Markets Inc. of all communications received by the Trustee with respect to any Property requiring action by the Company;

 

(f)                                    Supply any necessary information or documents as may be requested by the Company (or its authorized agents) in connection with the Company’s preparation of the tax returns relating to assets held in 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 monthly written statements of the activities of, and amounts in, the Trust Account reflecting all receipts and disbursements of the Trust Account;

 

(i)                                     Commence liquidation of the Trust Account only after and promptly after (x) 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 any Chief Executive Officer or the Chairman of the Company’s board of directors (the “Board”) or other authorized officer of 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 (less up to $100,000 of all interest arising from the Property that may be released to the Company to pay dissolution expenses) or (y) [     ](1), if a Termination Letter has not been received by the Trustee prior to such date, in which case the Trust Account shall be liquidated in accordance with the procedures set forth in the Termination Letter attached as Exhibit B and the Property in the Trust Account distributed to the Public Stockholders of record as of such date (less up to $100,000 of all interest arising from the Property that may be released to the Company to pay dissolution expenses); provided, however, that in the event the Trustee receives a Termination Letter in a form substantially similar to Exhibit B hereto, or if the Trustee begins to liquidate the Property because it has received no such Termination Letter by [     ](2), the Trustee shall keep the Trust Account open until the earliest to occur of (i) twelve (12) months following the date the Property has been distributed to the Public Stockholders; (ii) the Trustee’s receipt of a letter in a form substantially similar to Exhibit D hereto and the completion by the Trustee of the distribution of the amounts specified therein; and (iii) the Trustee’s receipt of a written notice from the Company’s

 

(1)  Insert date that is 21 months from the closing of the Offering.

(2)  Insert date that is 21 months from the closing of the Offering.

 

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independent registered public accountants stating that the Company will not be receiving any tax refund on its income tax payments;

 

(j)                                     Upon written request from the Company, which may be given from time to time in a form substantially similar to that attached hereto as Exhibit C (a “Tax Payment Withdrawal Instruction”), withdraw from the Trust Account and distribute to the Company the amount requested by the Company to cover any income or franchise tax obligation owed by the Company as a result of assets of the Company or interest or other income earned on the Property, which amount shall be delivered directly to the Company by electronic funds transfer or other method of prompt payment, and the Company shall forward such payment to the relevant taxing authority; provided, however, that to the extent there is not sufficient cash in the Trust Account to pay such tax obligation, the Trustee shall liquidate such assets held in the Trust Account as shall be designated by the Company in writing to make such distribution; provided  further that if the tax to be paid is a franchise tax, the written request by the Company to make such distribution shall be accompanied by a copy of the franchise tax bill from the State of Delaware for the Company and a written statement from the principal financial officer of the Company setting forth the actual amount payable.  The written request of the Company referenced above shall constitute presumptive evidence that the Company is entitled to said funds, and the Trustee shall have no responsibility to look beyond said request;

 

(k)                                  Upon written request from the Company given after distribution of the Property to the Public Stockholders, which may be given from time to time in a form substantially similar to that attached hereto as Exhibit D (a “Tax Refund Instruction”), distribute to the Public Stockholders, less amounts to be disbursed to the Company to cover accrued expenses as set forth in the Tax Refund Instruction, amounts deposited by the Company into the Trust Account that the Company has represented to be tax refund(s) of the Company’s income tax payments;

 

(l)                                     Upon written request from the Company, which may be given from time to time in a form substantially similar to that attached hereto as Exhibit E (an “Interest Withdrawal Instruction”), distribute to the Company the amount requested by the Company to be used for working capital requirements; provided, however, that the aggregate amount of all such distributions pursuant to this Section 1(l) shall not exceed $1,000,000 in interest income (net of franchise and income taxes payable), in the event the underwriters’ over-allotment option in the Offering is not exercised in full, or $1,150,000 in interest income (net of franchise and income taxes payable), if the underwriters’ over-allotment option in the Offering is exercised in full (or, if the over-allotment option is not exercised in full, but is exercised in part, the amount in interest income (net of franchise and income taxes payable) to be released shall be increased above $1,000,000 proportionally in relation to the proportion of the over-allotment option which was exercised);

 

(m)                               Upon written request from the Company, which may be given from time to time in a form substantially similar to that attached hereto as Exhibit F (a “Permitted Purchase of Shares Withdrawal Instruction”), the Trustee shall distribute to the Company the amount requested by the Company to be used to purchase up to 5,000,000 shares of the Common Stock, in the event the underwriters’ over-allotment option in the Offering is not exercised in full or up to 5,750,000 shares of the Common Stock in the event the underwriters’ over-allotment

 

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option in the Offering is exercised in full, not to exceed the per share amount then held in the Trust Account (or, if the over-allotment option is not exercised in full, but is exercised in part, the number of shares that may be purchased shall be increased above 5,000,000 proportionally in relation to the proportion of the over-allotment option which was exercised) (such purchase hereinafter referred to as the “Permitted Purchases”); provided, however, that to the extent there is not sufficient cash in the Trust Account to make such distribution, the Trustee shall liquidate such assets held in the Trust Account as shall be designated by the Company in writing to make such distribution; and

 

(n)                                 Not make any withdrawals or distributions from the Trust Account other than pursuant to Section 1(i), (j), (k), (l) or (m) above.

 

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 any of the Company’s Chairman of the Board, President, Chief Executive Officers or Chief Financial Officer.  In addition, except with respect to its duties under Sections 1(i) through 1(m) hereof, 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 and with reasonable care, 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)                                 Subject to Section 4 hereof, hold the Trustee harmless and indemnify the Trustee from and against any and all expenses, including reasonable counsel fees and disbursements, or losses suffered by the Trustee in connection with any action taken by it hereunder and 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 interest earned on the Property, except for expenses and losses resulting from the Trustee’s gross negligence, fraud 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 Section 2(b), 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, which such consent shall not be unreasonably withheld.  The Company may participate in such action with its own counsel;

 

(c)                                  Pay the Trustee the fees set forth on Schedule A hereto, including an initial acceptance fee, an annual fee and a transaction processing fee for each disbursement made pursuant to Sections 1(j), 1(l) and 1(m), and the usual and customary service fees of the Trustee as paying agent (“Paying Agent”) pursuant to Section 1(k) hereof, 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 unless and until it is distributed to the Company pursuant to Sections

 

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1(j) through 1(m) hereof.  The Company shall pay the Trustee the initial acceptance fee and the first annual fee at the consummation of the Offering 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 Account.  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 2(b) hereof;

 

(d)                                 In connection with any vote of the Company’s stockholders regarding a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination involving the Company and one or more businesses (a “Business Combination”), provide to the Trustee an affidavit or certificate of the inspector of elections for the stockholder meeting verifying the vote of such stockholders regarding such Business Combination;

 

(e)                                  Provide Citigroup Global Markets Inc. with a copy of any Termination Letter(s) and/or any other correspondence that the Company sends to the Trustee with respect to any proposed withdrawal from the Trust Account promptly after it issues the same;

 

(f)                                    In the event the Company is entitled to receive a tax refund on its income tax obligation, and promptly after the amount of such refund is determined on a final basis, provide the Trustee with notice in writing (with a copy to Citigroup Global Markets Inc.) of the amount of such income tax refund in the form of Exhibit D hereto; and

 

(g)                                 Instruct the Trustee to make only those distributions that are permitted under this Agreement, and refrain from instructing the Trustee to make any distributions that are not permitted under this Agreement.

 

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 Section 1 hereof, and the Trustee shall have no liability to any party except for liability arising out of the Trustee’s gross negligence, fraud or willful misconduct;

 

(b)                                 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)                                  Refund any depreciation in principal of any Property;

 

(d)                                 Assume that the authority of any person designated by the Company to give instructions hereunder shall not be continuing unless provided otherwise in such designation, or unless the Company shall have delivered a written revocation of such authority to the Trustee;

 

(e)                                  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 Trustee’s best

 

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judgment, except for the Trustee’s gross negligence, fraud or willful misconduct.  The Trustee may rely conclusively and shall be protected in acting upon any order, notice, demand, certificate, opinion or advice of counsel (including counsel chosen by the Trustee, which counsel may be the Company’s counsel), 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 the Trustee believes, in good faith and with reasonable care, 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;

 

(f)                                    Verify the accuracy of the information contained in the Registration Statement,

 

(g)                                 Provide any assurance that any Business Combination entered into by the Company or any other action taken by the Company is as contemplated by the Registration Statement;

 

(h)                                 File information returns with respect to the Trust Account with any local, state or federal taxing authority or provide periodic written statements to the Company documenting the taxes payable by the Company, if any, relating to any interest income earned on the Property;

 

(i)                                     Prepare, execute and file tax reports, income or other tax returns and pay any taxes with respect to any income generated by, and activities relating to, the Trust Account, regardless of whether such tax is payable by the Trust Account or the Company, including, but not limited to, income tax obligations, except pursuant to Section 1(j) hereof; or

 

(j)                                     Verify calculations, qualify or otherwise approve the Company’s written requests for distributions pursuant to Sections 1(i) through 1(m) hereof.

 

4.                                       Trust Account Waiver.  The Trustee has no right of set-off or any right, title, interest or claim of any kind (“Claim”) to, or to any monies in, the Trust Account, and hereby irrevocably waives any Claim to, or to any monies in, the Trust Account that it may have now or in the future.  In the event the Trustee has any Claim against the Company under this Agreement, including, without limitation, under Section 2(b) or Section 2(c) hereof, the Trustee shall pursue such Claim solely against the Company and its assets outside the Trust Account and not against the Property or any monies in the Trust Account.

 

5.                                       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, pending which the Trustee shall continue to act in accordance with this Agreement.  At such time that the Company notifies the Trustee that a successor trustee has been appointed and has agreed to become subject to the terms of this Agreement, the Trustee shall transfer the management of

 

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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 (90) days of receipt of the resignation notice from the Trustee, the Trustee may submit an application to have the Property deposited with any court in the State of New York or 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; or

 

(b)                                 At such time that the Trustee has completed the liquidation of the Trust Account and its obligations in accordance with the provisions of Section 1(i) hereof (which section may not be amended under any circumstances) and distributed the Property in accordance with the provisions of the Termination Letter, this Agreement shall terminate except with respect to Section 2(b).

 

6.                                       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.  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 confidential information, or of any change in its authorized personnel.  In executing funds transfers, the Trustee shall rely upon all information supplied to it by the Company, including, account names, account numbers, and all other identifying information relating to a Beneficiary, Beneficiary’s bank or intermediary bank.  Except for any liability arising out of the Trustee’s gross negligence, fraud or willful misconduct, the Trustee shall not be liable for any loss, liability or expense resulting from any error in the information or transmission of the funds.

 

(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 conflicts of law principles that would result in the application of the substantive laws of another jurisdiction.  This Agreement may be executed in several original or facsimile counterparts, each one of which shall constitute an original, and together shall constitute but one instrument.

 

(c)                                  This Agreement contains the entire agreement and understanding of the parties hereto with respect to the subject matter hereof.  Except for Section 1(i) hereof (which section may not be amended under any circumstances), this Agreement or any provision hereof may only be changed, amended or modified (other than to correct a typographical error) by a writing signed by each of the parties hereto.

 

(d)                                 This Agreement or any provision hereof may only be changed, amended or modified pursuant to Section 6(c) hereof with the Consent of the Stockholders (as defined below); provided, however, that no such change, amendment or modification may be made to Section 1(i) hereof (which section may not be amended under any circumstances), it being the specific intention of the parties hereto that each of the Company’s stockholders is, and shall be, a third party beneficiary of this Section 6(d) with the same right and power to enforce this Section 6(d) as the other parties hereto.  For purposes of this Section 6(d), the “Consent of the

 

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Stockholders” means receipt by the Trustee of a certificate from the inspector of elections of the stockholder meeting certifying that either (i) the Company’s stockholders of record as of a record date established in accordance with Section 213(a) of the Delaware General Corporation Law, as amended (“DGCL”), who hold sixty-five percent (65%) or more of all then outstanding shares of the Common Stock, have voted in favor of such change, amendment or modification, or (ii) the Company’s stockholders of record as of the record date who hold sixty-five percent (65%) or more of all then outstanding shares of the Common Stock, have delivered to such entity a signed writing approving such change, amendment or modification.  Except for any liability arising out of the Trustee’s gross negligence, fraud or willful misconduct, the Trustee may rely conclusively on the certification from the inspector or elections referenced above and shall be relieved of all liability to any party for executing the proposes amendment in reliance thereon.

 

(e)                                  The parties hereto consent to the jurisdiction and venue of any state or federal court located in the City of New York, State of New York, for purposes of resolving any disputes hereunder.  AS TO ANY CLAIM, CROSS-CLAIM OR COUNTERCLAIM IN ANY WAY RELATING TO THIS AGREEMENT, EACH PARTY WAIVES THE RIGHT TO TRIAL BY JURY.

 

(f)                                    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, Chairman and

Frank A. DiPaolo, CFO

Fax No.: (212) 509-5150

 

if to the Company, to:

 

HBC Acquisition Corp.

3963 Maple Avenue, Suite 450

Dallas, Texas 75219

Attn: Peter S. Brodsky

Fax No.: (214) 855-2222

 

in each case, with copies to:

 

Akin Gump Strauss Hauer & Feld LLP

One Bryant Park

New York, New York 10036

Attn: Bruce S. Mendelsohn, Esq.

Fax No.: (212) 872-1002

 

8

 

and

 

Citigroup Global Markets Inc.

388 Greenwich Street

New York, New York 10013

Attn: General Counsel

Fax No.: (212) 816-7912

 

and

 

Davis Polk & Wardwell LLP

Attn: Deanna L. Kirkpatrick, Esq.

450 Lexington Avenue

New York, New York  10017

Fax No.: (212) 701-5800

 

(g)                                 Each of the Company and the Trustee 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)                                 Each of the Company and the Trustee hereby acknowledges and agrees that Citigroup Global Markets Inc., on behalf of the Underwriters, is a third party beneficiary of this Agreement.

 

(i)                                     Except as specified herein, no party to this Agreement may assign its rights or delegate its obligations hereunder to any other person or entity.

 

[SIGNATURE PAGE FOLLOWS]

 

9

 

IN WITNESS WHEREOF, the undersigned have caused the execution of this Agreement as of the date first above written.

 

 

	
 
    	
HBC   ACQUISITION CORP.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
Peter   S. Brodsky
    
	
 
    	
Title:
    	
Co-Chief   Executive Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
CONTINENTAL   STOCK TRANSFER & TRUST COMPANY, AS TRUSTEE
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
					

 

 

Signature Page to Investment Management Trust Agreement

 

 

SCHEDULE A

 

	
Fee Item
    	
 
    	
Time and method of payment
    	
 
    	
Amount
    
	
Initial   acceptance fee.
    	
 
    	
Initial   closing of Offering by wire transfer.
    	
 
    	
$1,000
    
	
Annual   fee.
    	
 
    	
First   year, initial closing of Offering by wire transfer; thereafter on the   anniversary of the Effective Date by wire transfer or check.
    	
 
    	
$5,000
    
	
Transaction   processing fee for disbursements to Company under Sections 1(j), 1(l) and   1(m).
    	
 
    	
Deduction   by the Trustee from accumulated income following disbursement made to Company   under Section 2.
    	
 
    	
$250
    
	
Paying   Agent services for distributions made to shareholders pursuant to Section 1(k).
    	
 
    	
Liquidation   of the Trust Account pursuant to Section 1(i) and   distribution of income tax refunds, as directed by the Company pursuant Section 1(k) and   letter instruction in the form of Exhibit D.
    	
 
    	
Usual   and customary service fees from time to time applicable to the Paying Agent   services of the Trustee.
    

 

 

EXHIBIT A

 

[Letterhead of Company]

 

[Insert date]

 

Continental Stock Transfer & Trust Company

17 Battery Place

New York, New York 10004
 Attn:  Steven Nelson and Frank Di Paolo

 

Re:                               Trust Account No.       Termination Letter

 

Gentlemen:

 

Pursuant to Section 1(i) of the Investment Management Trust Agreement, dated as of        , 2011 (the “Trust Agreement”), by and between HBC Acquisition Corp., a Delaware corporation (the “Company”), and Continental Stock Transfer & Trust Company, as trustee, 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 forty-eight (48) hours in advance of the actual date of the consummation of the Business Combination (the “Consummation  Date”). Capitalized terms used but not defined herein shall have the meanings set forth in the Trust Agreement.

 

In accordance with the terms of the Trust Agreement, we hereby authorize you to commence to liquidate all of the assets of the Trust Account on [insert  date], and to transfer the proceeds into the trust checking account at JP Morgan Chase, N.A. 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. It is acknowledged and agreed that while the funds are on deposit in the trust checking account at JP Morgan Chase, N.A. awaiting distribution, the Company will not earn any interest or dividends.

 

On the Consummation Date (i) counsel for the Company shall deliver to you written notification that the Business Combination has been consummated (the “Notification”) and (ii) the Company shall deliver to you a written instruction signed by the Company and Citigroup Global Markets Inc. 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 the Notification 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 in writing 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, net of any payments necessary for reasonable unreimbursed expenses related to liquidating the Trust Account, your obligations under the Trust Agreement shall be terminated.

 

 

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 upon receipt by the Trustee of written instructions from the Company, the funds held in the Trust Account shall be reinvested as provided in Section 1(c) of the Trust Agreement on the business day immediately following the Consummation Date as set forth in the notice as soon thereafter as possible.

 

 

	
 
    	
Very   truly yours,
    
	
 
    	
 
    
	
 
    	
HBC   Acquisition Corp.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
cc:   Citigroup Global Markets Inc.
    	
 
    	
 
    

 

2

 

EXHIBIT B

 

[Letterhead of Company]

 

[Insert date]

 

Continental Stock Transfer & Trust Company

17 Battery Place

New York, New York 10004
 Attn:  Steven Nelson and Frank Di Paolo

 

Re:                               Trust Account No.       Termination Letter

 

Gentlemen:

 

Pursuant to Section 1(i) of the Investment Management Trust Agreement, dated as of        , 2011 (the “Trust Agreement”), by and between HBC Acquisition Corp., a Delaware corporation (the “Company”), and Continental Stock Transfer & Trust Company, as trustee, this is to advise you that the Company has been unable to effect a Business Combination with a Target Business within the time frame specified in the Company’s certificate of incorporation, as described in the Company’s Prospectus relating to the Offering. Capitalized terms used but not defined herein shall have the meanings set forth in the Trust Agreement.

 

In accordance with the terms of the Trust Agreement, we hereby authorize you to liquidate all of the assets in the Trust Account on                      , 20     and to transfer the total proceeds into the trust checking account at JP Morgan Chase, N.A. to await distribution to the Public Stockholders. The Company has selected [       ](3) as the record date for the purpose of determining the Public Stockholders entitled to receive their share of the liquidation proceeds. You agree to be the Paying Agent of record and, in your separate capacity as Paying Agent, agree to distribute said funds directly to the Company’s Public Stockholders in accordance with the terms of the Trust Agreement and the certificate of incorporation of the Company. Upon the distribution of all the funds, net of any payments necessary for reasonable unreimbursed expenses related to liquidating the Trust Account, your obligations under the Trust Agreement shall be terminated, except to the extent otherwise provided in Section 1(k) of the Trust Agreement.

 

	
 
    	
Very   truly yours,
    
	
 
    	
 
    
	
 
    	
HBC   Acquisition Corp.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
cc:   Citigroup Global Markets Inc.
    	
 
    	
 
    

 

(3)  Insert date that is 21 months from the closing of the Offering.

 

 

EXHIBIT C

 

[Letterhead of Company]

 

[Insert date]

 

Continental Stock Transfer & Trust Company

17 Battery Place

New York, New York 10004
 Attn:  Steven Nelson and Frank Di Paolo

 

Re:                               Trust Account No.       Tax Payment Withdrawal Instruction

 

Gentlemen:

 

Pursuant to Section 1(j) of the Investment Management Trust Agreement, dated as of        , 2011 (the “Trust Agreement”), by and between HBC Acquisition Corp., a Delaware corporation (the “Company”), and Continental Stock Transfer & Trust Company, as trustee, the Company hereby requests that you deliver to the Company $              of the interest income earned on the Property (as defined in the Trust Agreement) as of the date hereof.

 

The Company needs such funds to pay for the tax obligations as set forth on the attached tax return or tax statement. In accordance with the terms of the Trust Agreement, you are hereby directed and authorized to transfer (via wire transfer) such funds promptly upon your receipt of this letter to the Company’s operating account at:

 

[WIRE INSTRUCTION INFORMATION]

 

 

	
 
    	
Very truly yours,
    
	
 
    	
 
    
	
 
    	
HBC   Acquisition Corp.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
cc:   Citigroup Global Markets Inc.
    	
 
    	
 
    

 

 

EXHIBIT D

 

[Letterhead of Company]

 

[Insert date]

 

Continental Stock Transfer & Trust Company

17 Battery Place

New York, New York 10004
 Attn:  Steven Nelson and Frank Di Paolo

 

Re:                               Trust Account No.       Tax Refund Instruction

 

Gentlemen:

 

Pursuant to Section 1(k) of the Investment Management Trust Agreement, dated as of        , 2011 (the “Trust Agreement”), by and between HBC Acquisition Corp., a Delaware corporation (the “Company”), and Continental Stock Transfer & Trust Company, as trustee, this is to advise you that the Company will be receiving a refund in the amount of $            representing a portion of the taxes it paid to satisfy its income tax obligation. Capitalized terms used but not defined herein shall have the meanings set forth in the Trust Agreement.

 

In accordance with the terms of the Trust Agreement, we hereby authorize you to deposit the proceeds of such tax refund into the Trust Account, and to transfer the total proceeds to the trust checking account at JP Morgan Chase, N.A. for immediate distribution, less amounts for accrued expenses of the Company as set forth below, to the Company’s Public Stockholders of record as of the date on which the Company redeemed the shares of Common Stock sold in the Offering; provided, however, that $               shall instead be disbursed to the Company to cover accrued expenses. You agree to be the Paying Agent of record and, in your separate capacity as Paying Agent, agree to distribute said funds directly to the Public Stockholders in accordance with the terms of the Trust Agreement and the certificate of incorporation of the Company. Upon the distribution of all the funds, net of any payments for reasonable unreimbursed expenses related to liquidating the Trust Account, your obligations under the Trust Agreement shall be terminated:

 

[WIRE INSTRUCTION INFORMATION]

 

 

	
 
    	
Very   truly yours,
    
	
 
    	
 
    
	
 
    	
HBC   Acquisition Corp.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
cc:   Citigroup Global Markets Inc.
    	
 
    	
 
    

 

 

EXHIBIT E

 

[Letterhead of Company]

 

[Insert date]

 

Continental Stock Transfer & Trust Company

17 Battery Place

New York, New York 10004
 Attn:  Steven Nelson and Frank Di Paolo

 

Re:                               Trust Account No.       Interest Withdrawal Instruction

 

Gentlemen:

 

Pursuant to Section 1(l) of the Investment Management Trust Agreement, dated as of        , 2011 (the “Trust Agreement”), by and between HBC Acquisition Corp., a Delaware corporation (the “Company”), and Continental Stock Transfer & Trust Company, as trustee, this is to advise you that the Company hereby requests that you deliver to the Company $              of the interest, net of franchise and income taxes payable, earned on the Property (as defined in the Trust Agreement) as of the date hereof, which does not exceed, in the aggregate with all such prior disbursements pursuant to Section 1(l) of the Trust Agreement, if any, the maximum amount set forth in Section 1(l) of the Trust Agreement.

 

The Company needs such funds to cover working capital requirements. In accordance with the terms of the Trust Agreement, you are hereby directed and authorized to transfer (via wire transfer) such funds promptly upon your receipt of this letter to the Company’s operating account at:

 

[WIRE INSTRUCTION INFORMATION]

 

 

	
 
    	
Very   truly yours,
    
	
 
    	
 
    
	
 
    	
HBC   Acquisition Corp.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
cc:   Citigroup Global Markets Inc.
    	
 
    	
 
    

 

 

EXHIBIT F

 

[Letterhead of Company]

 

[Insert date]

 

Continental Stock Transfer & Trust Company

17 Battery Place

New York, New York 10004
 Attn:  Steven Nelson and Frank Di Paolo

 

Re:                               Trust Account No.       Permitted Purchase of Shares Withdrawal Instruction

 

Gentlemen:

 

Pursuant to Section 1(m) of the Investment Management Trust Agreement, dated as of        , 2011 (the “Trust Agreement”), by and between HBC Acquisition Corp., a Delaware corporation (the “Company”), and Continental Stock Transfer & Trust Company, as trustee, this is to advise you that the Company hereby requests that you deliver to the Company $                     to fund the Permitted Purchases (as defined in the Trust Agreement).

 

In accordance with the terms of the Trust Agreement, you are hereby directed and authorized to transfer (via wire transfer) such funds promptly upon your receipt of this letter to the Company’s operating account at:

 

[WIRE INSTRUCTION INFORMATION]

 

 

	
 
    	
Very   truly yours,
    
	
 
    	
 
    
	
 
    	
HBC   Acquisition Corp.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
cc:   Citigroup Global Markets Inc.

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