exv10w12



 






Exhibit 10.12




SECURITIES PURCHASE AGREEMENT




     SECURITIES
PURCHASE AGREEMENT (this “Agreement”), dated as of
March 8, 2007, is entered into
by and among Santa Monica Media Corporation, a Delaware corporation, with headquarters located at
9229 Sunset Boulevard, Suite 505, Los Angeles, California 90069 (the “Company”), and Santa Monica
Capital Partners, LLC, a Delaware limited liability company (“Buyer”).



     WHEREAS:




     A. The Company has filed a registration statement (the “Registration Statement”) for the
initial public offering (the “IPO”) of units (the “Units”), each unit consisting of one share of
the Company’s Common Stock (a “Share”) and one four year warrant (the “Warrants”) to purchase one
Share at an exercise price of $6.00 per Share exercisable on the later of the Company’s completion
of a business combination and one year from the date of the IPO.



     B. The Company and Buyer are executing and delivering this Agreement in reliance upon the
exemption from securities registration afforded by Section 4(2) and by Regulation D (“Regulation
D”) promulgated by the United States Securities and Exchange Commission (the “SEC”) under the
Securities Act of 1933, as amended (the “1933 Act”); and



     C. The
Company issued an amended and restated promissory note (the
“Promissory Note”) to Buyer for the principal amount of
$305,000 at a rate of 5% per annum, as of March 8, 2007 (the
“Loan”).



     D. Buyer desires to purchase and the Company desires to issue and sell, upon the terms and
conditions set forth in this Agreement, 38,125 Units (the “Company Units”) for an aggregate
purchase price of Three Hundred Five Thousand Dollars ($305,000) (the “Buyer Purchase Price”).



     E. Buyer
wishes to use the outstanding principal balance of the loan as
payment for the Company Units and to forego the accrued interest on
the loan upon the closing.



     NOW THEREFORE, the Company and Buyer hereby agree as follows:



     1. PURCHASE AND SALE OF UNITS.



          (a) Purchase of Units. On the Closing Date (as defined below), the Company shall
issue and sell to Buyer and Buyer shall purchase from the Company
38,125 Company Units for the
Buyer Purchase Price.




          (b) Payment. On the Closing Date (as defined below),
(i) Buyer shall pay the Buyer Purchase Price for the Company Units
with the outstanding principal balance of the loan of $305,000, and
all accrued interest on the loan shall be forgiven, against delivery of the
Company Units, and (ii) the Company shall deliver such Company Units to Buyer, against delivery of
the Buyer Purchase Price.



          (c)
Interest on Loan. The Buyer shall cancel the Promissory Note
and forego all accrued interest thereon only upon the successful
completion of the Qualified IPO (defined below).




          (d) Closing Date. Subject to the satisfaction (or written waiver) of the
conditions thereto set forth in Section 6 and Section 7 below, the date and time of the issuance
and sale of the Company Units pursuant to this Agreement (the “Closing Date”) shall be 12:00 noon,
Pacific Time on the date (the “Closing Date”) that the Company enters into an underwriting
agreement with the underwriters for the IPO with gross proceeds of at
least $100,000,000 (a
“Qualified IPO”). The closing of the transactions contemplated by this



 








 






Agreement (the
“Closing”) shall occur on the Closing Date at such location as may be agreed to by the parties.




     2. BUYERS’ REPRESENTATIONS AND WARRANTIES.



          (a) Buyer represents and warrants to the Company as follows:




               (i) Buyer is purchasing the Company Units for its own account and for investment purposes and
not with the view towards distribution;



               (ii) Buyer
acknowledges that the Shares and Warrants included in the Company Units purchased, and the Shares issued upon
exercise of the Warrants, will bear a legend in substantially the following form:



     THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN OFFERED AND SOLD IN RELIANCE UPON AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933 AS AMENDED (THE
“SECURITIES ACT”). ACCORDINGLY, THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT AND MAY NOT BE TRANSFERRED OTHER THAN PURSUANT TO AN AVAILABLE
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, THE AVAILABILITY OF WHICH IS TO BE
ESTABLISHED TO THE SATISFACTION OF THE COMPANY.



               (iii) Buyer understands that the Company Units are being offered and sold to it in reliance on
specific exemptions from the registration requirements of Federal and State securities laws and
that the Company is relying upon the truth and accuracy of the representations, warranties and
agreement herein in order to determine the applicability of such exemptions and the suitability of
Buyer to acquire the Company Units;



               (iv) Buyer acknowledges that, in making the decision to purchase the Company Units, Buyer had
relied solely upon independent investigations made by it and materials provided by the Company and
not upon any separate representations made by Company with respect to the Company or the Company
Units;



               (v) Buyer acknowledges that Buyer has received and carefully reviewed such information and
documentation relating to the Company, including the Registration Statement with respect to the IPO
(the “Registration Statement”).



               (vi) Buyer has had a reasonable opportunity to ask questions of and receive answers from the
Company concerning the Company and this offering and all such questions, if any, have been answered
to the full satisfaction of Buyer.



               (vii) Buyer has such knowledge and expertise in financial and business matters that the
undersigned is capable of evaluating the merits and risks involved in an investment in the Company
Units.



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               (viii) Buyer is an accredited investor as such term is defined in Rule 501 of Regulation D.



          (b) No Government Recommendation or Approval. Buyer understands that no Federal
of State agency has passed on or made any recommendation or endorsement of the Company Units.




          (c) Status of Company Units. Buyer acknowledges that:




               (i) The Company Units, Shares and Warrants will be subject to a lock-up as referred to in the
Registration Statement. Subject to certain limited exceptions, the Shares and Warrants are not
transferable until the closing of the initial business combination, and are subject to the same
voting restrictions and waiver of conversion rights as are applicable to the Shares currently held
by the Company’s existing shareholders as described in the Registration Statement.



               (ii) In the event that the Company distributes to its public shareholders the amount in the
trust account as described in the Registration Statement pursuant to the liquidation of the
Company, Buyer will lose its entire investment as Buyer shall have no right to participate in such
distribution.



     3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and warrants
to each Buyer that:



          (a) The execution, delivery and performance of this Agreement has been or will be duly and
validly authorized by the Company and will be, a valid and binding agreement of the Company,
enforceable in accordance with its respective terms, except to the extent that (i) the
enforceability hereof or thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws from time to time in effect and affecting the rights of creditors
generally, (ii) the enforceability hereof or thereof is subject to general principles of equity or
(iii) the indemnification provisions hereof or thereof may be held to violate public policy. The
securities to be issued pursuant to the transactions contemplated by this Agreement have been duly
authorized and, when issued and paid for in accordance with (x) this Agreement and (y) the
certificates/instruments representing such securities, will be valid and binding obligations of the
Company, enforceable in accordance with their respective terms, except to the extent that (i) the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws from time to time in effect and affecting the rights of creditors generally, (ii) the
enforceability thereof is subject to general principles of equity, or (iii) the indemnification
provisions hereof or thereof may be held to violate public policy. All corporate action required
to be taken for the authorization, issuance and sale of the Company Units has been duly and validly
taken by the Company.




          (b) As of the date hereof and as of the Closing Date, the information set forth in the
Registration Statements and will be and is true and correct in all material respects as of the
respective dates thereof.




          (c) The Shares being offered as part of the Company Units, as well as issuable upon
exercise of the Warrants that form part of the Company Units, will be duly authorized and

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when
issued and paid for in accordance with this Agreement and proper exercise of such Warrants,
respectively, and the certificates/instruments representing such Common Stock, will
be validly issued, fully-paid and non-assessable; such securities are not and will not be
subject to the preemptive rights of any holder of any security of the Company.




          (d) The Company is organized and is validly existing as a corporation in good standing
under the laws of the State of Delaware. The Company is duly qualified or licensed and in good
standing as a foreign corporation in each jurisdiction in which the character of its operations
requires such qualification or licensing and where failure to so qualify would have a material
adverse effect on the Company. The Company has all requisite power and authority, and all material
and necessary authorizations, approvals, orders, licenses, certificates and permits of and from all
governmental regulatory officials and bodies (domestic and foreign) to conduct its business and the
Company is doing business in material compliance with all such authorizations, approvals, orders,
licenses, certificates and permits (“Approvals”) and all foreign, federal, state and local laws,
rules and regulations concerning the business in which it is currently engaged and where the
failure to have such Approvals would have a material adverse effect on the Company. The Company
has all power and authority to enter into this Agreement, to carry out the provisions and
conditions hereof, and all consents, authorizations, and approvals required in connection herewith
have been obtained or will be obtained prior to any closing. No consent, authorization or order
of, and no filing with, any court, government agency or other body is required by the Company for
the issuance of the securities except for applicable federal and state securities laws.




     4. COVENANTS.



          (a) Best Efforts. The parties shall use their best efforts to satisfy timely each
of the conditions described in Sections 6 and 7 of this Agreement.




          (b) Authorization and Reservation of Shares. The Company shall at all times have
authorized, and reserved for the purpose of issuance, a sufficient number of shares of Common Stock
to provide for the full exercise of the outstanding Warrants (the “Warrant Shares”).




          (c) Listing. The Company shall promptly secure the listing of the Shares, Warrants
and Warrant Shares upon each national securities exchange or automated quotation system, if any,
upon which shares of Common Stock are then listed (subject to official notice of issuance) and, so
long as any Buyer owns any of the securities, shall maintain, so long as any of such securities
shall be so listed, such listing of all Shares, Warrants and Warrant Shares.




     5. REGISTRATION RIGHTS. Buyer (and its assignees and transferees) shall be granted
demand registrations pursuant to a Registration Rights Agreement reasonably acceptable to the Buyer
and the Company.



     6. CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL. The obligation of the Company
hereunder to issue and sell the Company Units to a Buyer at the Closing is subject to the
satisfaction, at or before the Closing Date of each of the following



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conditions thereto, provided
that these conditions are for the Company’s sole benefit and may be waived by the Company at any
time in its sole discretion:




          (a) Buyer shall have executed this Agreement and delivered the same to the Company.




          (b) Buyer shall have delivered the Buyer Purchase Price in accordance with Section 1(b)
above.




          (c) The representations and warranties of the Buyer shall be true and correct in all
material respects as of the date when made and as of the Closing Date as though made at that time
(except for representations and warranties that speak as of a specific date), and the Buyer shall
have performed, satisfied and complied in all material respects with the covenants, agreements and
conditions required by this Agreement to be performed, satisfied or complied with by the Buyer at
or prior to the Closing Date.




          (d) No litigation, statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by or in any court or
governmental authority of competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby which prohibits the consummation of any of the
transactions contemplated by this Agreement.




     7. CONDITIONS TO BUYER’S OBLIGATION TO PURCHASE. The obligation of Buyer hereunder
to purchase the Company Units at the Closing is subject to the satisfaction, at or before the
Closing Date of each of the following conditions, provided that these conditions are for Buyer’s
sole benefit and may be waived by such Buyer at any time in its sole discretion:



          (a) The Company shall have executed this Agreement and delivered the same to the Buyer.




          (b) The Company shall have delivered to Buyer duly executed certificates for the Units (in
such denominations as Buyer shall request) and Warrants in accordance with Section 1(b) above.




          (c) The representations and warranties of the Company shall be true and correct in all
material respects as of the date when made and as of the Closing Date as though made at such time
(except for representations and warranties that speak as of a specific date) and the Company shall
have performed, satisfied and complied in all material respects with the covenants, agreements and
conditions required by this Agreement to be performed, satisfied or complied with by the Company at
or prior to the Closing Date.




          (d) No litigation, statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by or in any court or
governmental authority of competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby which prohibits the consummation of any of the
transactions contemplated by this Agreement.




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          (e) No event shall have occurred which could reasonably be expected to have a material
adverse effect on the Company.




          (f) The Company has executed an Underwriting Agreement with the underwriters for the IPO.




     8. GOVERNING LAW; MISCELLANEOUS.



          (a) Governing Law. THIS AGREEMENT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS. THE
PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS
LOCATED IN LOS ANGELES, CALIFORNIA WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS AGREEMENT, THE
AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH SUIT
OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE OF PROCESS UPON A PARTY MAILED BY
REGISTERED FIRST CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE
PARTY IN ANY SUCH SUIT OR PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY’S RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL NON-APPEALABLE
JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER. THE PARTY WHICH DOES NOT
PREVAIL IN ANY DISPUTE ARISING UNDER THIS AGREEMENT SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES,
INCLUDING REASONABLE ATTORNEYS’ FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH
DISPUTE.




          (b) Counterparts; Signatures by Facsimile. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original but all of which shall constitute
one and the same agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party. This Agreement, once executed by a party, may be delivered
to the other party hereto by facsimile transmission of a copy of this Agreement bearing the
signature of the party so delivering this Agreement.




          (c) Headings. The headings of this Agreement are for convenience of reference only
and shall not form part of, or affect the interpretation of, this Agreement.




          (d) Severability. In the event that any provision of this Agreement is invalid or
unenforceable under any applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed modified to conform
with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable
under any law shall not affect the validity or enforceability of any other provision hereof.




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          (e) Entire Agreement; Amendments. This Agreement and the instruments referenced
herein contain the entire understanding of the parties with respect to the matters
covered herein and therein and, except as specifically set forth herein or therein, neither
the Company nor Buyer makes any representation, warranty, covenant or undertaking with respect to
such matters. No provision of this Agreement may be waived or amended other than by an instrument
in writing signed by the party to be charged with enforcement.




          (f) Notices. Any notices required or permitted to be given under the terms of this
Agreement shall be sent by certified or registered mail (return receipt requested) or delivered
personally or by courier (including a recognized overnight delivery service) or by facsimile and
shall be effective five days after being placed in the mail, if mailed by regular United States
mail, or upon receipt, if delivered personally or by courier (including a recognized overnight
delivery service) or by facsimile, in each case addressed to a party. The addresses for such
communications shall be:



If to the Company:



Santa Monica Media Corporation

9229 Sunset Boulevard, Suite 505,

Los Angeles, California 90069

Telephone: 310-276-0500

Facsimile: (310) 573-9761

Attn: David Marshall



With a copy to:



Troy & Gould

1801 Century Park East,

Los Angeles, CA 90067

Attention: David Ficksman

Telephone: 310 789-1290

Facsimile: 310 789-1490



If to Buyer:



Santa Monica Capital Partners LLC



9229 Sunset Boulevard, Suite 505,

Los Angeles, California 90069

Telephone: 310-276-0500

Facsimile: (310) 573-9761

Attn: David Marshall



Each party shall provide notice to the other party of any change in address.




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          (g) Waiver of Claims; Indemnification. The Buyer hereby waives any and all
rights to assert any present or future claims, including any right of rescission, against the
Company, Citigroup Global Markets Inc. and Ladenburg
Thalmann & Co. Inc. (the “Underwriters”) with respect to its purchase of the Company Units,
and agrees to indemnify and hold the Company and the Underwriters in the IPO harmless from all
losses, damages or expenses that relate to claims or proceedings brought against the Company, or
such Underwriters by the Buyer of the Company Units or its transferees, assigns or any subsequent
holder of the Company Units.




          (h) Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and assigns, provided, however, that Buyer shall not
have the right to assign any of its rights hereunder to purchase Company Units to any other person.




          (i) Third Party Beneficiaries. This Agreement is intended for the benefit of the
parties hereto and their respective permitted successors and assigns, and is not for the benefit
of, nor may any provision hereof be enforced by, any other person; provided that Section 8)g) is
intended to benefit the Underwriters and shall be enforceable against the Buyer by any one of them.




          (j) Further Assurances. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as the other party may reasonably request in
order to carry out the intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.




          (k) No Strict Construction. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no rules of strict
construction will be applied against any party.




          (l) Further Agreement. Buyer agrees to enter into an agreement or execute a
letter confirming the voting obligations and other restrictions pertaining to the Company Units
upon request of the underwriters for the IPO.




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     IN WITNESS WHEREOF, the undersigned Buyer and the Company have caused this Agreement to be
duly executed as of the date first above written.



	 	 	 	 	 
	 

	 	 	 	 
	SANTA MONICA MEDIA CORPORATION	 	 
	 
	 	 	 	 
	By:

	 	/s/ David Marshall	 	 
	 

	 	 	 	 
	 

	 	David Marshall

Chief Executive Officer	 	 
	 
	 	 	 	 
	BUYER:	 	 
	 
	 	 	 	 
	SANTA MONICA CAPITAL PARTNERS, LLC	 	 
	 
	 	 	 	 
	By Santa Monica Capital Corp., its Manager	 	 
	 
	 	 	 	 
	By:

	 	/s/ David Marshall	 	 
	 

	 	 	 	 
	 

	 	David Marshall, President	 	 







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