Document:

exv10w2

 

Exhibit 10.2

INVESTMENT MANAGEMENT TRUST AGREEMENT

          This Investment Management Trust Agreement (this “Agreement”) is made as of by and between
Santa Monica Media Corporation, a Delaware corporation (the “Company”), and Continental Stock
Transfer & Trust Company (the “Trustee”).

          WHEREAS, the Company’s Registration Statement on Form S-1, File No. 333-128384 (as amended,
the “Registration Statement”), for its initial public offering of securities (the “IPO”) has been
declared effective as of the date hereof by the Securities and Exchange Commission (“Effective
Date”);

          WHEREAS, Citigroup Global Markets Inc. and Deutsche Bank Securities Inc. are acting as the
representatives (the “Representatives”) of the underwriters in the IPO;

          WHEREAS, the Company has completed a private placement of 375,000 units of its securities for
an aggregate purchase price of $3,000,000 (the “Private Placement”);

          WHEREAS, pursuant to the Underwriting Agreement, a portion of the Property equal to $3,750,000
(or the amount specified in a notice pursuant to paragraph 2(f) hereof) is attributable to deferred
underwriting commissions that will become payable by the Company to the Representatives upon the
consummation of a Business Combination (as defined in the Registration Statement) (the “Deferred
Discount”);

          WHEREAS, as described in the Company’s Registration Statement, and in accordance with the
Company’s Amended and Restated Certificate of Incorporation, $144,300,000 of the net proceeds
(inclusive of the Deferred Discount) of the IPO and Private Placement ($165,675,000 if the
underwriters over-allotment option is exercised in full) will be delivered to the Trustee to be
deposited and held in a trust account for the benefit of the Company and the public holders of the
Company’s common stock, par value $0.001 per share issued in the IPO, as hereinafter provided (the
amount to be delivered to the Trustee will be referred to herein as the “Property;” the
stockholders for whose benefit the Trustee shall hold the Property will be referred to as the
“Public Stockholders,” and the Public Stockholders and the Company will be referred to together as
the “Beneficiaries”); and

          WHEREAS, the Company and the Trustee desire to enter into this Agreement to set forth the
terms and conditions pursuant to which the Trustee shall hold the Property.

          IT IS AGREED:

          1. Agreements and Covenants of Trustee. The Trustee hereby agrees and covenants to:

          (a) Hold the Property in trust for the Beneficiaries in accordance with the terms of this
Agreement, in a segregated trust account (the “Trust Account”) established and maintained by the
Trustee at a branch of JPMorgan Chase NY Bank selected by the Trustee;

 

 

          (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 having maturity of 180 days or less, selected by the Company and
purchase and maintain the securities in a brokerage account established at the Royal Bank of
Canada;

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

          (e) Notify the Company and the Representatives of all communications received by it with
respect to the Property requiring action by the Company;

          (f) Supply any necessary information or documents as may be requested by the Company in
connection with the Company’s preparation of the tax returns, for itself or 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, to the Representatives and to such other person as the Company may
instruct in writing, monthly statements of the activities of and amounts in the Trust Account
reflecting all receipts and disbursements of the Trust Account;

          (i) If there is any income tax obligation relating to the income of the Property in the Trust
Account as determined by the Company, then, from time to time, at the written instruction of the
Company, the Trustee shall promptly to the extent there is not sufficient cash in the Trust
Account to pay such tax obligation, liquidate such assets held in the Trust Account as shall be
designated by the Company in writing, and disburse to the Company by wire transfer, out of the
Property in the Trust Account, the amount indicated by the Company as owing in respect of such
income tax obligation;

          (j) Upon written request from the Company, the Trustee shall distribute from the Trust Account
to the Company such amount as may be requested by the Company; provided, however, that the amount
distributed by the Trustee to the Company pursuant to this Section 1(j) at any one time shall not
exceed the lesser of (i) $2,000,000 and (ii) 60% of the aggregate amount of interest income earned
and received on the Property as of the date of such written request ; provided further, however, in
no event shall the aggregate amount distributable to the Company pursuant to this Section 1(j)
exceed $2,000,000;

          (k) Commence liquidation of the Trust Account promptly after receipt of and only in accordance
with the terms of a letter (“Termination Letter”), in a form substantially similar to that attached
hereto as either Exhibit A or Exhibit B, signed on behalf of the Company by its Chief Executive
Officer and Secretary and affirmed by its entire Board of Directors, and complete the liquidation
of the Trust Account and disburse the Property in the Trust Account

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(which disbursement shall include, in the event of a Business Combination, payment of the
Deferred Discount to the Representatives) only as directed in the Termination Letter and the other
documents referred to therein; and

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

          2. Agreements and Covenants of the Company. The Company hereby agrees and covenants
to:

          (a) Give all instructions to the Trustee hereunder in writing, signed by the Company’s Chief
Executive Officer, President or Chief Financial Officer. In addition, except with respect to its
duties under paragraphs 1(j) and (k) above, the Trustee shall be entitled to rely on, and shall be
protected in relying on, any verbal or telephonic advice or instruction which it in good faith
believes to be given by any one of the persons authorized above to give written instructions,
provided that the Company shall promptly confirm such instructions in writing;

          (b) Hold the Trustee harmless and indemnify the Trustee from and against, any and all
expenses, including reasonable counsel fees and disbursements, or loss suffered by the Trustee in
connection with any action, suit or other proceeding brought against the Trustee involving any
claim, or in connection with any claim or demand which in any way arises out of or relates to this
Agreement, the services of the Trustee hereunder, or the Property or any income earned from
investment of the Property, except for expenses and losses resulting from the Trustee’s gross
negligence or willful misconduct. Promptly after the receipt by the Trustee of notice of demand or
claim or the commencement of any action, suit or proceeding, pursuant to which the Trustee intends
to seek indemnification under this paragraph, it shall notify the Company in writing of such claim
(hereinafter referred to as the “Indemnified Claim”). The Trustee shall have the right to conduct
and manage the defense against such Indemnified Claim, provided, that the Trustee shall obtain the
consent of the Company with respect to the selection of counsel, which consent shall not be
unreasonably withheld. The Company may participate in such action with its own counsel;

          (c) Pay the Trustee an initial acceptance fee, an annual fee, and a transaction processing fee
for each disbursement made pursuant to Sections 1(i) and 1(j) as set forth on Schedule A hereto,
which fees shall be subject to modification by the parties from time to time. It is expressly
understood that the Property shall not be used to pay such fees and further agreed that said
transaction processing fees shall be deducted by the Trustee for the disbursements made to the
Company pursuant to Section 1(i). The Company shall pay the Trustee the initial acceptance fee and
the first year’s fees at the consummation of the IPO and thereafter on the anniversary of the
Effective Date. The Trustee shall refund to the Company the annual fee (on a pro rata basis) with
respect to any period after the liquidation of the Trust 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 (it being expressly understood that the Property
shall not be used to make any payments to the Trustee under such Sections);

          (d) Provide to the Trustee any letter of intent, agreement in principle or definitive
agreement that is executed prior to [                    , 2008] in connection with a Business

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Combination, together with a certified copy of a unanimous resolution of the Board of
Directors of the Company affirming that such letter of intent, agreement in principle or definitive
agreement is in effect;

          (e) In connection with any vote of the Company’s stockholders regarding a Business
Combination, provide to the Trustee an affidavit or certificate of a firm regularly engaged in the
business of soliciting proxies and tabulating stockholder votes (which firm may be the Trustee)
verifying the vote of the Company’s stockholders regarding such Business Combination; and

          (f) Within five business days after the Representatives’ over-allotment option (or any
unexercised portion thereof) expires or is exercised in full, provide the Trustee written notice
(with a copy to the Representatives) of the total amount of the Deferred Discount, which shall in
no event be less than $3,750,000.

          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 paragraph 1 hereof
and the Trustee shall have no liability to any party except for liability arising out of its own
gross negligence or willful misconduct;

          (b) 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) Change the investment of any Property, other than in compliance with paragraph 1(c);

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

          (e) 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;

          (f) The other parties hereto or to anyone else for any action taken or omitted by it, or any
action suffered by it to be taken or omitted, in good faith and in the exercise of its own best
judgment, except for its gross negligence or willful misconduct. The Trustee may rely conclusively
and shall be protected in acting upon any order, judgment, instruction, notice, demand,
certificate, opinion or advice of counsel (including counsel chosen by the Trustee), statement,
instrument, report or other paper or document (not only as to its due execution and the validity
and effectiveness of its provisions, but also as to the truth and acceptability of any information
therein contained) which is believed by the Trustee, in good faith, to be genuine and to be signed
or presented by the proper person or persons. The Trustee shall not be bound by any

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notice or demand, or any waiver, modification, termination or rescission of this agreement or
any of the terms hereof, unless evidenced by a written instrument delivered to the Trustee signed
by the proper party or parties and, if the duties or rights of the Trustee are affected, unless it
shall give its prior written consent thereto;

          (g) Verify the correctness of the information set forth in the Registration Statement or to
confirm or assure that any acquisition made by the Company or any other action taken by it is as
contemplated by the Registration Statement;

          (h) File information returns with the United States Internal Revenue Service and payee
statements with the Company, documenting the taxes payable by the Company, if any, relating to
interest earned on the Property;

          (i) Pay any taxes on behalf of the Trust Account except as set forth in paragraph 1(i); and

          (j) Verify calculations, qualify or otherwise approve Company requests for distributions
pursuant to Section 1(i) or 1(j) above.

          4. Termination. This Agreement shall terminate as follows:

          (a) If the Trustee gives written notice to the Company that it desires to resign under this
Agreement, the Company shall use its reasonable efforts to locate a successor trustee. At such time
that the Company notifies the Trustee that a successor trustee has been appointed by the Company
and has agreed to become subject to the terms of this Agreement, the Trustee shall transfer the
management of the Trust Account to the successor trustee, including but not limited to the transfer
of copies of the reports and statements relating to the Trust Account, whereupon this Agreement
shall terminate; provided, however, that, in the event that the Company does not locate a successor
trustee within ninety days of receipt of the resignation notice from the Trustee, the Trustee may
submit an application to have the Property deposited with the United States District Court for the
Southern District of New York and upon such deposit, the Trustee shall be immune from any liability
whatsoever;

          (b) At such time that the Trustee has completed the liquidation of the Trust Account in
accordance with the provisions of paragraph 1(k) hereof, and disbursed the Property in accordance
with the provisions of the Termination Letter, this Agreement shall terminate except with respect
to Paragraph 2(b).

          5. Miscellaneous.

          (a) The Company and the Trustee each acknowledge that the Trustee will follow the security
procedures set forth below with respect to funds transferred from the Trust Account. Upon receipt
of written instructions, the Trustee will confirm such instructions with an Authorized Individual
at an Authorized Telephone Number listed on the attached Exhibit C. The Company and the Trustee
will each restrict access to confidential information relating to such security procedures to
authorized persons. Each party must notify the other party immediately if it has reason to believe
unauthorized persons may have obtained access to such information, or

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of any change in its authorized personnel. In executing funds transfers, the Trustee will rely
upon account numbers or other identifying numbers of a beneficiary, beneficiary’s bank or
intermediary bank, rather than names. The Trustee shall not be liable for any loss, liability or
expense resulting from any error in an account number or other identifying number, provided it has
accurately transmitted the numbers provided.

          (b) This Agreement shall be governed by and construed and enforced in accordance with the laws
of the State of New York, without giving effect to conflict of laws. It may be executed in several
counterparts, each one of which shall constitute an original, and together shall constitute one
instrument.

          (c) This Agreement contains the entire agreement and understanding of the parties hereto with
respect to the subject matter hereof.

          (d) This Agreement or any provision hereof may only be amended or modified by a writing signed
by each of the parties hereto, provided, however, that no such amendment or modification (other
than to correct a typographical or similar technical error) may be made to paragraphs 1(i), 1(j),
1(k), 1(l), 2(d) and 2(e) and Exhibits A and B hereof without the consent of the Public
Stockholders, it being the specific intention of the parties hereto that each Public Stockholder is
and shall be a third-party beneficiary of this paragraph 6(d) with the same right and power to
enforce this paragraph 6(d) as either of the parties hereto. For purposes of this paragraph 6(d),
the “consent of the Public Stockholders” shall mean receipt by the Trustee of a certificate from an
entity certifying that (i) such entity regularly engages in the business of serving as inspector of
elections for companies whose securities are publicly traded, and (ii) either (a) 70% of the Public
Stockholders of record as of a record date established in accordance with Section 213(a) of the
Delaware General Corporation Law, as amended (the “DGCL”), have voted in favor of such
amendment or modification or (b) 70% of the Public Stockholders of record as of a record date
established in accordance with Section 213(b) of the DGCL has delivered to such entity a signed
writing approving such amendment or modification.

          (e) The parties hereto consent to the jurisdiction and venue of any state or federal court
located in the City of New York for purposes of resolving any disputes hereunder. 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

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Fax No.: (212) 509-5150

          if to the Company, to:

Santa Monica Media Corporation

9229 Sunset Boulevard, Suite 505

Los Angeles, California 90069

Attn: David Marshall

Tel. No.: (310) 256-3680

          in either case with a copy to:

Citigroup Global Markets Inc.

388 Greenwich Street

New York, New York 10013

Fax No.: (212) 816-7912

Attn: General Counsel

and

Deutsche Bank Securities Inc.

60 Wall Street, 4th Floor

New York, New York 10005

Fax No: (212) ___ - _____

Attn: General Counsel

and

Bingham McCutchen LLP

399 Park Avenue

New York, New York 10022

Attn: Ann Chamberlain, Esq.

Fax No.: (212) 752-5378

and

Troy & Gould Professional Corporation

1801 Century Park East, 16th Floor

Los Angeles, California 90067

Attn: David L. Ficksman, Esq.

Fax No.: (310) 789-1490

          (g) This Agreement may not be assigned by the Trustee without the prior consent of the
Company.

          (h) Each of the Trustee and the Company hereby represents that it has the full right and power
and has been duly authorized to enter into this Agreement and to perform its

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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.

          (i) The Trustee hereby waives any and all right, title, interest or claim of any kind
(“Claim”) in or to any distribution of the Trust Account, and hereby agrees not to seek recourse,
reimbursement, payment or satisfaction for any Claim against the Trust Account for any reason
whatsoever.

          (j) The Trustee hereby consents to the inclusion of Continental Stock Transfer & Trust Company
in the Registration Statement and other materials relating to the IPO.

[Signature page follows]

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          IN WITNESS WHEREOF, the parties have duly executed this Investment Management Trust Agreement
as of the date first written above.

	 	 	 	 	 
	 	CONTINENTAL STOCK TRANSFER &

TRUST COMPANY, as Trustee

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	SANTA MONICA MEDIA CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	David Marshall 	 
	 	 	Title:  	Chairman and Chief Executive Officer 	 
	 

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Exhibit 10.2

Schedule A

SCHEDULE A

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

between Santa Monica Media Corporation and

Continental Stock Transfer & Trust Company

	 	 	 	 	 	 	 
	Fee Item	 	Time and method of 
payment	 	Amount
	Initial acceptance fee

	 	Initial closing of IPO by
wire transfer
	 	$1,000	 
	 
	 	 	 	 	 	 
	Annual fee

	 	First year, initial closing
of IPO by wire transfer;
thereafter on the anniversary
of the effective date of the
IPO by wire transfer or check
	 	$3,000	 
	 
	 	 	 	 	 	 
	Transaction processing fee for
disbursements to Company under
Sections 1(i) and 1(j)

	 	Deduction by Trustee from
disbursement made to Company
under Section 1(i)
	 	$   250	 

	 	 	 	 	 	 	 
	 	 	Agreed:	 	 
	 
	 	 	 	 	 	 
	Dated                     , 2006	 	Santa Monica Media Corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Authorized Officer	 	 
	 
	 	 	 	 	 	 
	 	 	Continental Stock Transfer & Trust Company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Authorized Officer	 	 

 

 

Exhibit 10.2

EXHIBIT A

[Letterhead of Company]

[Insert date]

Continental Stock Transfer
  &
Trust Company

17 Battery Place

New York, New York 10004

Attn: Steven Nelson

          Re: Trust Account No. —— Termination Letter

Gentlemen:

          Pursuant to paragraph 1(k) of the Investment Management Trust Agreement between Santa Monica
Media Corporation (the “Company”) and Continental Stock Transfer & Trust Company (the “Trustee”),
dated as of                                          (the “Trust Agreement”), this is to advise you that the Company has
entered into an agreement with                                          (the “Target Business”) to consummate a business
combination with the Target Business (the “Business Combination”) on or about [insert date]. The
Company shall notify you at least two business days in advance of the actual date of the
consummation of the Business Combination (the “Consummation Date”).

          Pursuant to paragraph 2(e) of the Trust Agreement, we are providing you with [an affidavit][a
certificate] of                     , which verifies the vote of the Company’s stockholders in connection
with the Business Combination. In accordance with the terms of the Trust Agreement, we hereby
authorize you to commence liquidation of the Trust Account to the effect that, on the Consummation
Date, all of funds held in the Trust Account will be immediately available for transfer to the
account or accounts that the Company shall direct on the Consummation Date.

          On the Consummation Date (i) counsel for the Company shall deliver to you written notification
that the Business Combination has been consummated, and (ii) the Company shall deliver to you
written instructions with respect to the transfer of the funds held in the Trust Account (the
“Instruction Letter”). You are hereby directed and authorized to transfer the funds held in the
Trust Account immediately upon your receipt of counsel’s letter and the Instruction Letter, (a) as
directed in writing by the Representatives, in an amount equal to the Deferred Discount; (b) to
Public Stockholders who exercised their conversion option in connection with the Business
Combination, in an amount equal to their pro rata share of the amounts in the Trust Account as of
two business days prior to the Consummation Date (including the Deferred Discount and any income
actually received on amounts in the Trust Account but less an amount

 

 

equal to estimated taxes that are or will be due on such income at an assumed rate of [___]%
and less the amount of Net Income released to the Company pursuant to paragraph 1(j) of the Trust
Agreement); and (c) the remainder in accordance with the terms of the Instruction Letter. In the
event that certain deposits held in the Trust Account may not be liquidated by the Consummation
Date without penalty, you will notify the Company of the same and the Company shall direct you as
to whether such funds should remain in the Trust Account and be disbursed after the Consummation
Date to the Company or be liquidated and distributed promptly. Upon the disbursement of all the
funds in the Trust Account pursuant to the terms hereof, the Trust Agreement shall be terminated
and the Trust Account closed.

          In the event that the Business Combination is not consummated on the Consummation Date
described in the notice thereof and we have not notified you on or before the original Consummation
Date of a new Consummation Date, then the funds held in the Trust Account shall be reinvested as
provided in the Trust Agreement on the business day immediately following the Consummation Date as
set forth in the notice, subject to subsequent instructions from the Company with respect to the
disposition of the Trust Account, and the funds contained therein, in accordance with the Trust
Agreement.

          Capitalized terms used but not defined herein shall have the meanings ascribed to them in the
Trust Agreement.

	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 	 	SANTA MONICA MEDIA CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	David Marshall	 	 
	 

	 	 	 	Chairman and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	AFFIRMED	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Kurt Brendlinger, Chief Financial Officer
and
   Director	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Eric Pulier, Chief Technology Officer,
Secretary 
   and Director	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Scott Sassa, Director	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Dallas Clement, Director	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

2

 

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Robert Schultz, Director	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Sharyar Baradaran, Director	 	 

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Exhibit 10.2

EXHIBIT B

[Letterhead of Company]

[Insert date]

Continental
Stock Transfer
      &
Trust Company

17 Battery Place

New York, New York 10004

Attn: Steven Nelson

          Re: Trust Account No. —— Termination Letter

Gentlemen:

          Pursuant to paragraph 1(k) of the Investment Management Trust Agreement between Santa Monica
Media Corporation (the “Company”) and Continental Stock Transfer & Trust Company (the “Trustee”),
dated as of                                          (the “Trust Agreement”), this is to advise you that the Board of
Directors of the Company has voted to dissolve the Company and the Company’s stockholders have
approved such dissolution. Attached hereto is a copy of the Company’s Certificate of Dissolution,
as field with the Secretary of State of the State of Delaware, certified by the Secretary of the
Company as true and correct. Capitalized terms used but not otherwise defined herein shall have the
meanings ascribed to such terms in the Trust Agreement.

          In accordance with the terms of the Trust Agreement, we hereby authorize you to commence
liquidation of the Trust Account (including the Deferred Discount and any income actually received
on amounts in the Trust Account). In connection with this liquidation, you are hereby authorized to
establish a record date for the purposes of determining the stockholders of record entitled to
receive their per share portion of the Trust Account. The record date shall be within ten (10) days
of the liquidation date, or as soon thereafter as is practicable. You will notify the Company in
writing as to when all of the funds in the Trust Account will be available for immediate transfer
(the “Transfer Date”) in accordance with the terms of the Trust Agreement and the Amended and
Restated Certificate of Incorporation of the Company. You shall commence and oversee the
disbursement of such funds in accordance with the terms of the Trust Agreement and the Amended and
Restated Certificate of Incorporation of the Company; provided that an amount equal to 40% of any
income earned on the Property shall remain in the Trust Account for the purpose of paying any
income tax obligation related thereto. When all income tax obligations related to the income of the
Property have been satisfied, you shall disburse the remaining funds, if any, in accordance with
the terms of the Trust Agreement and the Amended and Restated Certificate of Incorporation. Upon
payment of all the funds in the Trust Account, the Trust Agreement shall be terminated.

 

 

	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 	 	SANTA MONICA MEDIA CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	David Marshall	 	 
	 

	 	 	 	Chairman and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	AFFIRMED	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Kurt Brendlinger, Chief Financial Officer
and    Director	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Eric Pulier, Chief Technology Officer,
Secretary    and Director	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Scott Sassa, Director	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Dallas Clement, Director	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Robert Schultz, Director	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Sharyar Baradaran, Director	 	 

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Exhibit 10.2

EXHIBIT C

	 	 	 
	AUTHORIZED INDIVIDUAL(S)	 	AUTHORIZED
	FOR TELEPHONE CALL BACK	 	TELEPHONE NUMBER(S)
	Company:
	 	 
	 
	 	 
	Santa Monica Media Corporation
	 	 
	9229 Sunset Boulevard, Suite 505
	 	 
	Los Angeles, California 90069
	 	 
	Attn: David Marshall

	 	(310) 256-3680
	 
	 	 
	Trustee:
	 	 
	 
	 	 
	Continental Stock Transfer & Trust Company
	 	 
	17 Battery Place
	 	 
	New York, New York 10004
	 	 
	Attn: Steven G. Nelson, Chairman

	 	(212) 845-3200exv10w3

 

Exhibit 10.3

REGISTRATION RIGHTS AGREEMENT

     THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as of the                     day
of                                        , 2006, by and among: Santa Monica Media Corporation, a Delaware corporation (the
“Company”), Citigroup Global Markets Inc. (“Citigroup”), Deutsche Bank Securities Inc. (“DBSI”) and
Ladenburg Thalman & Co. Inc. (“Ladenburg”, and together with Citigroup and DBSI, the “UPO
Holders”).

     WHEREAS, in connection with the underwriting of the securities of the Company, the UPO Holders
received an option to purchase certain securities of the Company pursuant to those certain Unit
Purchase Option Agreements, of even date herewith, between the Company and each of Citigroup, DBSI
and Ladenburg (“Unit Purchase Option”);

     WHEREAS, the UPO Holders and the Company desire to enter into this Agreement to provide the
UPO Holders with certain rights relating to the registration of the Registrable Securities (defined
below) held by them;

     NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

     1. DEFINITIONS. The following capitalized terms used herein have the following meanings:

     “AGREEMENT” means this Agreement, as amended, restated, supplemented, or otherwise modified
from time to time.

     “COMMISSION” means the Securities and Exchange Commission, or any other federal agency then
administering the Securities Act or the Exchange Act.

     “COMMON STOCK” means the common stock, par value $0.001 per share, of the Company.

     “COMPANY” is defined in the preamble to this Agreement.

     “DEMAND REGISTRATION” is defined in Section 2.1.1.

     “DEMANDING HOLDER” is defined in Section 2.1.1.

     “EXCHANGE ACT” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission promulgated thereunder, all as the same shall be in effect at the
time.

     “FORM S-3” is defined in Section 2.3.

 

 

     “FOUNDERS” are each of the Investors named in the Founders Registration Rights Agreement.

     “FOUNDERS DEMANDING HOLDER” is a Demanding Holder as defined in the Founders Registration
Rights Agreement, of even date herewith, among the Company and each of the Investors named therein
(“Founders Registration Rights Agreement”).

     “FOUNDERS DEMAND REGISTRATION” is the demand for registration of securities set forth in the
Founders Registration Rights.

     “FOUNDERS REGISTRATION RIGHTS AGREEMENT” is the Registration Rights Agreement, of even date
herewith, among the Company and each of the Investors named therein.

     “INDEMNIFIED PARTY” is defined in Section 4.3.

     “INDEMNIFYING PARTY” is defined in Section 4.3.

     “INVESTOR INDEMNIFIED PARTY” is defined in Section 4.1.

     “MAXIMUM NUMBER OF SHARES” is defined in Section 2.1.4.

     “NOTICES” is defined in Section 6.3.

     “PIGGY-BACK REGISTRATION” is defined in Section 2.2.1.

     “REGISTER,” “REGISTERED” and “REGISTRATION” mean a registration effected by preparing and
filing a registration statement or similar document in compliance with the requirements of the
Securities Act, and the applicable rules and regulations promulgated thereunder, and such
registration statement becoming effective.

     “REGISTRABLE SECURITIES” mean all of the shares of Common Stock and Warrants or units composed
of shares of Common Stock and Warrants owned or held by the UPO Holders. Registrable Securities
include any warrants, shares of capital stock or other securities of the Company issued as a
dividend or other distribution with respect to or in exchange for or in replacement of such shares
of Common Stock. As to any particular Registrable Securities, such securities shall cease to be
Registrable Securities when: (a) a Registration Statement with respect to the sale of such
securities shall have become effective under the Securities Act and such securities shall have been
sold, transferred, disposed of or exchanged in accordance with such Registration Statement; (b)
such securities shall have been otherwise transferred, new certificates for them not bearing a
legend restricting further transfer shall have been delivered by the Company and subsequent public
distribution of them shall not require registration under the Securities Act; (c) such securities
shall have ceased to be outstanding, or (d) the Registrable Securities are salable under Rule
144(k).

     “REGISTRATION STATEMENT” means a registration statement filed by the Company with the
Commission in compliance with the Securities Act and the rules and regulations promulgated
thereunder for a public offering and sale of Common Stock (other than a

2

 

registration statement on Form S-4 or Form S-8, or their successors, or any registration
statement covering only securities proposed to be issued in exchange for securities or assets of
another entity).

     “SECURITIES ACT” means the Securities Act of 1933, as amended, and the rules and regulations
of the Commission promulgated thereunder, all as the same shall be in effect at the time.

     “UNDERWRITER” means a securities dealer who purchases any Registrable Securities as principal
in an underwritten offering and not as part of such dealer’s market-making activities.

     2. REGISTRATION RIGHTS.

          2.1. DEMAND REGISTRATION.

               2.1.1. REQUEST FOR REGISTRATION. Subject to and in accordance with this Agreement, at any
time and from time to time on or after the date upon which the Unit Option becomes exercisable as
therein provided, the holders of at least 50% of the Registrable Securities held by the UPO Holders
or their respective transferees, may make a written demand for registration under the Securities
Act of all or part of their Registrable Securities (a “DEMAND REGISTRATION”). Any demand for a
Demand Registration shall specify the number of shares of Registrable Securities proposed to be
sold and the intended method(s) of distribution thereof. The Company will notify all other holders
of Registrable Securities and the Founders (so long as the Founders or their transferees shall hold
Registrable Securities as defined in the Founders Registration Rights Agreement) of the demand, and
each holder of Registrable Securities who wishes to include all or a portion of such holder’s
Registrable Securities in the Demand Registration (each such holder including shares of Registrable
Securities in such registration, a “DEMANDING HOLDER”) shall so notify the Company in writing
within fifteen (15) days after the receipt by the holder of the notice from the Company. Upon any
such request, the Demanding Holders shall be entitled to have their Registrable Securities included
in the Demand Registration, subject to Section 2.1.4 and the provisos set forth in Section 3.1.1.
The Company shall not be obligated to effect more than an aggregate of one (1) Demand Registration
under this Section 2.1.1 in respect of Registrable Securities.

               2.1.2. EFFECTIVE REGISTRATION. A registration will not count as a Demand Registration until
the Registration Statement filed with the Commission with respect to such Demand Registration
covering at least 75% of the Registrable Securities specified in the notice received pursuant to
Section 2.1.1 has been declared effective and the Company has complied with all of its obligations
under this Agreement with respect thereto; PROVIDED, HOWEVER, that if, after such Registration
Statement has been declared effective, the offering of Registrable Securities pursuant to a Demand
Registration is interfered with by any stop order or injunction of the Commission or any other
governmental agency or court, the Registration Statement with respect to such Demand Registration
will be deemed not to have been declared effective, unless and until, (i) such stop order or
injunction is removed, rescinded or otherwise terminated, and (ii) a majority-in-interest of the
Demanding Holders thereafter elect to continue the offering; PROVIDED, FURTHER, that the Company
shall not be obligated to file a second

3

 

Registration Statement until a Registration Statement that has been filed is counted as a
Demand Registration or is terminated.

               2.1.3. UNDERWRITTEN OFFERING. If a majority-in-interest of the Demanding Holders so elect and
such holders so advise the Company as part of their written demand for a Demand Registration, the
offering of such Registrable Securities pursuant to such Demand Registration shall be in the form
of an underwritten offering. In such event, the right of any holder to include its Registrable
Securities in such registration shall be conditioned upon such holder’s participation in such
underwriting and the inclusion of such holder’s Registrable Securities in the underwriting to the
extent provided herein. All Demanding Holders proposing to distribute their securities through
such underwriting shall enter into an underwriting agreement in customary form with the Underwriter
or Underwriters selected for such underwriting by a majority-in-interest of the holders initiating
the Demand Registration.

               2.1.4. REDUCTION OF OFFERING. If the managing Underwriter or Underwriters for a Demand
Registration that is to be an underwritten offering advises the Company and the Demanding Holders
in writing that the dollar amount or number of shares of Registrable Securities which the Demanding
Holders desire to sell, taken together with all other shares of Common Stock or other securities
which the Company desires to sell and the shares of Common Stock, if any, as to which registration
has been requested pursuant to written contractual piggy-back registration rights held by other
shareholders of the Company who desire to sell, exceeds the maximum dollar amount or maximum number
of shares that can be sold in such offering without adversely affecting the proposed offering
price, the timing, the distribution method, or the probability of success of such offering (such
maximum dollar amount or maximum number of shares, as applicable, the “MAXIMUM NUMBER OF SHARES”),
then the Company shall include in such registration: (i) first, the Registrable Securities as to
which Demand Registration has been requested by the Demanding Holders and the securities as to
which a Founders Demand Registration has been made (pro rata in accordance with the number of
shares of Registrable Securities which such Demanding Holder and securities which Founders
Demanding Holder have requested be included in such registration, regardless of the number of
shares of Registrable Securities held by such Demanding Holder or securities held by such Founders
Demanding Holder) that can be sold without exceeding the Maximum Number of Shares; (ii) second, to
the extent that the Maximum Number of Shares has not been reached under the foregoing clause (i),
the shares of Common Stock or other securities that the Company desires to sell that can be sold
without exceeding the Maximum Number of Shares; (iii) third, to the extent that the Maximum Number
of Shares has not been reached under the foregoing clauses (i) and (ii), the shares of Common Stock
for the account of other persons that the Company is obligated to register pursuant to written
contractual arrangements with such persons and that can be sold without exceeding the Maximum
Number of Shares; and (v) fourth, to the extent that the Maximum Number of Shares have not been
reached under the foregoing clauses (i), (ii), and (iii), the shares of Common Stock that other
shareholders desire to sell that can be sold without exceeding the Maximum Number of Shares.

               2.1.5. WITHDRAWAL. If a majority-in-interest of the Demanding Holders disapprove of the terms
of any underwriting or are not entitled to include all of their Registrable Securities in any
offering, such majority-in-interest of the Demanding Holders may

4

 

elect to withdraw from such offering by giving written notice to the Company and the
Underwriter or Underwriters of their request to withdraw prior to the effectiveness of the
Registration Statement filed with the Commission with respect to such Demand Registration. If the
majority-in-interest of the Demanding Holders withdraws from a proposed offering relating to a
Demand Registration, then such registration shall not count as a Demand Registration provided for
in Section 2.1.1.

          2.2. PIGGY-BACK REGISTRATION.

               2.2.1. PIGGY-BACK RIGHTS. If at any time on or after the date upon which the Unit Purchase
Option becomes exercisable as provided therein, the Company proposes to file a Registration
Statement under the Securities Act with respect to an offering of equity securities, or securities
or other obligations exercisable or exchangeable for, or convertible into, equity securities, by
the Company for its own account or for shareholders of the Company for their account (or by the
Company and by shareholders of the Company including, without limitation, pursuant to Section 2.1),
other than a Registration Statement (i) filed in connection with any employee stock option or other
benefit plan, (ii) for an exchange offer or offering of securities solely to the Company’s existing
shareholders, (iii) for an offering of debt that is convertible into equity securities of the
Company or (iv) for a dividend reinvestment plan, then the Company shall (x) give written notice of
such proposed filing to the holders of Registrable Securities as soon as practicable but in no
event less than ten (10) days before the anticipated filing date, which notice shall describe the
amount and type of securities to be included in such offering, the intended method(s) of
distribution, and the name of the proposed managing Underwriter or Underwriters, if any, of the
offering, and (y) offer to the holders of Registrable Securities in such notice the opportunity to
register the sale of such number of shares of Registrable Securities as such holders may request in
writing within five (5) days following receipt of such notice (a “PIGGY-BACK REGISTRATION”). The
Company shall cause such Registrable Securities to be included in such registration and shall use
commercially reasonable efforts to cause the managing Underwriter or Underwriters of a proposed
underwritten offering to permit the Registrable Securities requested to be included in a Piggy-Back
Registration to be included on the same terms and conditions as any similar securities of the
Company and to permit the sale or other disposition of such Registrable Securities in accordance
with the intended method(s) of distribution thereof. All holders of Registrable Securities
proposing to distribute their securities through a Piggy-Back Registration that involves an
Underwriter or Underwriters shall enter into an underwriting agreement in customary form with the
Underwriter or Underwriters selected for such Piggy-Back Registration.

               2.2.2. REDUCTION OF OFFERING. If the managing Underwriter or Underwriters for a Piggy-Back
Registration that is to be an underwritten offering advises the Company and the holders of
Registrable Securities in writing that the dollar amount or number of shares of Common Stock which
the Company desires to sell, taken together with shares of Common Stock, if any, as to which
registration has been demanded pursuant to written contractual arrangements with persons other than
the holders of Registrable Securities hereunder, the Registrable Securities as to which
registration has been requested under this Section 2.2, and the shares of Common Stock, if any, as
to which registration has been requested pursuant to the

5

 

written contractual piggy-back registration rights of other shareholders of the Company,
exceeds the Maximum Number of Shares, then the Company shall include in any such registration:

               (i) If the registration is undertaken for the Company’s account: (A) first, the shares
of Common Stock or other securities that the Company desires to sell that can be sold
without exceeding the Maximum Number of Shares; (B) second, to the extent that the Maximum
Number of Shares has not been reached under the foregoing clause (A), the Registrable
Securities as to which registration has been requested under this Section 2.2 and the
securities as to which piggy-back registration has been requested under Section 2.2 of the
Founders Registration Rights Agreement (pro rata in accordance with the number of shares of
Registrable Securities and securities each holder has actually requested to be included in
such registration, regardless of the number of shares of Common Stock with respect to which
such persons have the right to request such inclusion) that can be sold without exceeding
the Maximum Number of Shares; and (C) to the extent that the Maximum Number of Shares has
not been reached under the foregoing clauses (A) and (B), the shares of Common Stock as to
which registration has been requested pursuant to written contractual piggy-back
registration rights of other security holders (pro rata in accordance with the number of
shares such person has actually requested to be included in such registration, regardless of
the number of shares of Common Stock with respect such person has the right to request
inclusion).

               (ii) If the registration is a “demand” registration undertaken at the demand of persons
other than the holders of Registrable Securities pursuant to written contractual
arrangements with such persons, (A) first, the shares of Common Stock for the account of the
demanding persons that can be sold without exceeding the Maximum Number of Shares; (B)
second, to the extent that the Maximum Number of Shares has not been reached under the
foregoing clause (A), the shares of Common Stock or other securities that the Company
desires to sell that can be sold without exceeding the Maximum Number of Shares; and (C)
third, to the extent that the Maximum Number of Shares has not been reached under the
foregoing clauses (A) and (B), the Registrable Securities as to which registration has been
requested under this Section 2.2 and the securities as to which piggy-back registration has
been requested under Section 2.2 of the Founders Registration Rights Agreement (pro rata in
accordance with the number of shares such person has actually requested to be included in
such registration, regardless of the number of shares of Common Stock with respect such
person has the right to request inclusion); and (D) fourth, to the extent that the Maximum
Number of Shares has not been reached under the foregoing clauses (A), (B) and (C), the
            shares of Common Stock, if any, as to which registration has been requested pursuant to
written contractual piggy-back registration rights which other shareholders desire to sell
that can be sold without exceeding the Maximum Number of Shares.

               2.2.3. WITHDRAWAL. Any holder of Registrable Securities may elect to withdraw such holder’s
request for inclusion of Registrable Securities in any Piggy-Back Registration by giving written
notice to the Company of such request to withdraw prior to the effectiveness of the Registration
Statement. The Company may also elect to withdraw a registration statement at any time prior to
the effectiveness of the Registration Statement without

6

 

thereby incurring any liability to the holders of Registrable Securities. Notwithstanding any
such withdrawal, the Company shall pay all expenses incurred by the holders of Registrable
Securities in connection with such Piggy-Back Registration as provided in Section 3.3.

          2.3. REGISTRATIONS ON FORM S-3. The holders of Registrable Securities may at any time and
from time to time, request in writing that the Company register the resale of any or all of such
Registrable Securities on Form S-3 or any similar short-form registration which may be available at
such time (“FORM S-3”); PROVIDED, HOWEVER, that the Company shall not be obligated to effect such
request through an underwritten offering. Upon receipt of such written request, the Company will
promptly give written notice of the proposed registration to all other holders of Registrable
Securities, and, as soon as practicable thereafter, effect the registration of all or such portion
of such holder’s or holders’ Registrable Securities as are specified in such request, together with
all or such portion of the Registrable Securities of any other holder or holders joining in such
request as are specified in a written request given within fifteen (15) days after receipt of such
written notice from the Company; PROVIDED, HOWEVER, that the Company shall not be obligated to
effect any such registration pursuant to this Section 2.3: (i) if Form S-3 is not available for
such offering; or (ii) if the holders of the Registrable Securities, together with the holders of
any other securities of the Company entitled to inclusion in such registration, propose to sell
Registrable Securities and such other securities (if any) at any aggregate price to the public of
less than $250,000. Registrations effected pursuant to this Section 2.3 shall not be counted as
Demand Registrations effected pursuant to Section 2.1.

     3. REGISTRATION PROCEDURES.

          3.1. FILINGS; INFORMATION. Whenever the Company is required to effect the registration of any
Registrable Securities pursuant to Section 2, the Company shall use its best efforts to effect the
registration and sale of such Registrable Securities in accordance with the intended method(s) of
distribution thereof as expeditiously as practicable, and in connection with any such request:

               3.1.1. FILING REGISTRATION STATEMENT. The Company shall, as expeditiously as possible and in
any event within sixty (60) days after receipt of a request for a Demand Registration pursuant to
Section 2.1, prepare and file with the Commission a Registration Statement on any form for which
the Company then qualifies or which counsel for the Company shall deem appropriate and which form
shall be available for the sale of all Registrable Securities to be registered thereunder in
accordance with the intended method(s) of distribution thereof, and shall use its best efforts to
cause such Registration Statement to become and remain effective for the period required by Section
3.1.3; PROVIDED, HOWEVER, that the Company shall have the right to defer any Demand Registration
for up to sixty (60) days, and any Piggy-Back Registration for such period as may be applicable to
deferment of any demand registration to which such Piggy-Back Registration relates, in each case if
the Company shall furnish to the holders a certificate signed by the Chief Executive Officer of the
Company stating that, in the good faith judgment of the Board of Directors of the Company, it would
be materially detrimental to the Company and its shareholders for such Registration Statement to be
effected at such time; PROVIDED FURTHER, HOWEVER, that the Company shall not have the right to

7

 

exercise the right set forth in the immediately preceding proviso more than once in any
365-day period in respect of a Demand Registration hereunder.

               3.1.2. COPIES. The Company shall, prior to filing a Registration Statement or prospectus, or
any amendment or supplement thereto, furnish without charge to the holders of Registrable
Securities included in such registration, and such holders’ legal counsel, copies of such
Registration Statement as proposed to be filed, each amendment and supplement to such Registration
Statement (in each case including all exhibits thereto and documents incorporated by reference
therein), the prospectus included in such Registration Statement (including each preliminary
prospectus), and such other documents as the holders of Registrable Securities included in such
registration or legal counsel for any such holders may request in order to facilitate the
disposition of the Registrable Securities owned by such holders.

               3.1.3. AMENDMENTS AND SUPPLEMENTS. The Company shall prepare and file with the Commission
such amendments, including post-effective amendments, and supplements to such Registration
Statement and the prospectus used in connection therewith as may be necessary to keep such
Registration Statement effective and in compliance with the provisions of the Securities Act until
all Registrable Securities and other securities covered by such Registration Statement have been
disposed of in accordance with the intended method(s) of distribution set forth in such
Registration Statement (which period shall not exceed the sum of one hundred eighty (180) days plus
any period during which any such disposition is interfered with by any stop order or injunction of
the Commission or any governmental agency or court) or such securities have been withdrawn.

               3.1.4. NOTIFICATION. After the filing of a Registration Statement, the Company shall
promptly, and in no event more than two (2) business days after such filing, notify the holders of
Registrable Securities included in such Registration Statement of such filing, and shall further
notify such holders promptly and confirm such advice in writing in all events within two (2)
business days of the occurrence of any of the following: (i) when such Registration Statement
becomes effective; (ii) when any post-effective amendment to such Registration Statement becomes
effective; (iii) the issuance or threatened issuance by the Commission of any stop order (and the
Company shall take all actions required to prevent the entry of such stop order or to remove it if
entered); and (iv) any request by the Commission for any amendment or supplement to such
Registration Statement or any prospectus relating thereto or for additional information or of the
occurrence of an event requiring the preparation of a supplement or amendment to such prospectus so
that, as thereafter delivered to the purchasers of the securities covered by such Registration
Statement, such prospectus will not contain an untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the statements therein not
misleading, and promptly make available to the holders of Registrable Securities included in such
Registration Statement any such supplement or amendment; except that before filing with the
Commission a Registration Statement or prospectus or any amendment or supplement thereto, including
documents incorporated by reference, the Company shall furnish to the holders of Registrable
Securities included in such Registration Statement and to the legal counsel for any such holders,
copies of all such documents proposed to be filed sufficiently in advance of filing to provide such
holders and legal counsel with a reasonable opportunity to review such documents and comment
thereon, and the

8

 

Company shall not file any Registration Statement or prospectus or amendment or supplement
thereto, including documents incorporated by reference, to which such holders or their legal
counsel shall object.

               3.1.5. STATE SECURITIES LAWS COMPLIANCE. The Company shall use commercially reasonable
efforts to (i) register or qualify the Registrable Securities covered by the Registration Statement
under such securities or “blue sky” laws of such jurisdictions in the United States as the holders
of Registrable Securities included in such Registration Statement (in light of their intended plan
of distribution) may request and (ii) take such action necessary to cause such Registrable
Securities covered by the Registration Statement to be registered with or approved by such other
Governmental Authorities as may be necessary by virtue of the business and operations of the
Company and do any and all other acts and things that may be necessary or advisable to enable the
holders of Registrable Securities included in such Registration Statement to consummate the
disposition of such Registrable Securities in such jurisdictions; PROVIDED, HOWEVER, that the
Company shall not be required to qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this Section 3.1.5 or subject itself to taxation
in any such jurisdiction.

               3.1.6. AGREEMENTS FOR DISPOSITION. The Company shall enter into customary agreements
(including, if applicable, an underwriting agreement in customary form) and take such other actions
as are reasonably required in order to expedite or facilitate the disposition of such Registrable
Securities. The representations, warranties and covenants of the Company in any underwriting
agreement which are made to or for the benefit of any Underwriters, to the extent applicable, shall
also be made to and for the benefit of the holders of Registrable Securities included in such
registration statement. No holder of Registrable Securities included in such registration
statement shall be required to make any representations or warranties in the underwriting agreement
except, if applicable, with respect to such holder’s organization, good standing, authority, title
to Registrable Securities, lack of conflict of such sale with such holder’s material agreements and
organizational documents, and with respect to written information relating to such holder that such
holder has furnished in writing expressly for inclusion in such Registration Statement.

               3.1.7. COOPERATION. The principal executive officer of the Company, the principal financial
officer of the Company, the principal accounting officer of the Company and all other officers and
members of the management of the Company shall cooperate fully in any offering of Registrable
Securities hereunder, which cooperation shall include, without limitation, the preparation of the
Registration Statement with respect to such offering and all other offering materials and related
documents, and participation in meetings with Underwriters, attorneys, accountants and potential
investors.

               3.1.8. RECORDS. The Company shall make available for inspection by the holders of Registrable
Securities included in such Registration Statement, any Underwriter participating in any
disposition pursuant to such registration statement and any attorney, accountant or other
professional retained by any holder of Registrable Securities included in such Registration
Statement or any Underwriter, all financial and other records, pertinent corporate documents and
properties of the Company, as shall be necessary to enable them to exercise their

9

 

due diligence responsibility, and cause the Company’s officers, directors and employees to
supply all information requested by any of them in connection with such Registration Statement.

               3.1.9. OPINIONS AND COMFORT LETTERS. The Company shall furnish to each holder of Registrable
Securities included in any Registration Statement a signed counterpart, addressed to such holder,
of (i) any opinion of counsel to the Company delivered to any Underwriter and (ii) any comfort
letter from the Company’s independent public accountants delivered to any Underwriter. In the
event no legal opinion is delivered to any Underwriter, the Company shall furnish to each holder of
Registrable Securities included in such Registration Statement, at any time that such holder elects
to use a prospectus, an opinion of counsel to the Company to the effect that the Registration
Statement containing such prospectus has been declared effective and that no stop order is in
effect.

               3.1.10. EARNINGS STATEMENT. The Company shall comply with all applicable rules and
regulations of the Commission and the Securities Act, and make available to its shareholders, as
soon as practicable, an earnings statement covering a period of twelve (12) months, beginning
within three (3) months after the effective date of the registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder.

               3.1.11. LISTING. The Company shall use commercially reasonable efforts to cause all
Registrable Securities included in any registration to be listed on such exchanges or otherwise
designated for trading in the same manner as similar securities issued by the Company are then
listed or designated or, if no such similar securities are then listed or designated, in a manner
satisfactory to the holders of a majority of the Registrable Securities included in such
registration.

          3.2. OBLIGATION TO SUSPEND DISTRIBUTION. Upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3.1.4(iv), or, in the case of a resale
registration on Form S-3 pursuant to Section 2.3 hereof, upon any suspension by the Company,
pursuant to a written insider trading compliance program adopted by the Company’s Board of
Directors, of the ability of all “insiders” covered by such program to transact in the Company’s
securities because of the existence of material non-public information, each holder of Registrable
Securities included in any registration shall immediately discontinue disposition of such
Registrable Securities pursuant to the Registration Statement covering such Registrable Securities
until such holder receives the supplemented or amended prospectus contemplated by Section 3.1.4(iv)
or the restriction on the ability of “insiders” to transact in the Company’s securities is removed,
as applicable, and, if so directed by the Company, each such holder will deliver to the Company all
copies, other than permanent file copies then in such holder’s possession, of the most recent
prospectus covering such Registrable Securities at the time of receipt of such notice.

          3.3. REGISTRATION EXPENSES. The Company shall bear all costs and expenses incurred in
connection with any Demand Registration pursuant to Section 2.1, any Piggy-Back Registration
pursuant to Section 2.2, and any registration on Form S-3 effected pursuant to Section 2.3, and all
expenses incurred in performing or complying with its other

10

 

obligations under this Agreement, whether or not the Registration Statement becomes effective,
including, without limitation: (i) all registration and filing fees; (ii) fees and expenses of
compliance with securities or “blue sky” laws (including fees and disbursements of counsel in
connection with blue sky qualifications of the Registrable Securities); (iii) printing expenses;
(iv) the Company’s internal expenses (including, without limitation, all salaries and expenses of
its officers and employees); (v) the fees and expenses incurred in connection with the listing of
the Registrable Securities as required by Section 3.1.11; (vi) National Association of Securities
Dealers, Inc. fees; (vii) fees and disbursements of counsel for the Company and fees and expenses
for independent certified public accountants retained by the Company (including the expenses or
costs associated with the delivery of any opinions or comfort letters requested pursuant to Section
3.1.9); (viii) the fees and expenses of any special experts retained by the Company in connection
with such registration and (ix) the fees and expenses of one legal counsel selected by the holders
of a majority-in-interest of the Registrable Securities included in such registration. The Company
shall have no obligation to pay any underwriting discounts or selling commissions attributable to
the Registrable Securities being sold by the holders thereof, which underwriting discounts or
selling commissions shall be borne by such holders. Additionally, in an underwritten offering, all
selling shareholders and the Company shall bear the expenses of the underwriter pro rata in
proportion to the respective amount of shares each is selling in such offering.

          3.4. INFORMATION. The holders of Registrable Securities shall provide such information as may
reasonably be requested by the Company, or the managing Underwriter, if any, in connection with the
preparation of any Registration Statement, including amendments and supplements thereto, in order
to effect the registration of any Registrable Securities under the Securities Act pursuant to
Section 2 and in connection with the Company’s obligation to comply with federal and applicable
state securities laws.

     4. INDEMNIFICATION AND CONTRIBUTION.

          4.1. INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify and hold harmless each
Investor and each other holder of Registrable Securities, and each of their respective officers,
employees, affiliates, directors, partners, members, attorneys and agents, and each person, if any,
who controls an Investor and each other holder of Registrable Securities (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) (each, an “INVESTOR INDEMNIFIED
PARTY”), from and against any expenses, losses, judgments, claims, damages or liabilities, whether
joint or several, arising out of or based upon any untrue statement (or allegedly untrue statement)
of a material fact contained in any Registration Statement under which the sale of such Registrable
Securities was registered under the Securities Act, any preliminary prospectus, final prospectus or
summary prospectus contained in the Registration Statement, or any amendment or supplement thereto,
or arising out of or based upon any omission (or alleged omission) to state a material fact
required to be stated therein or necessary to make the statements therein not misleading, or any
violation by the Company of the Securities Act or any rule or regulation promulgated thereunder
applicable to the Company and relating to action or inaction required of the Company in connection
with any such registration; and the Company shall promptly reimburse the Investor Indemnified Party
for any legal and any other expenses reasonably incurred by such Investor

11

 

Indemnified Party in connection with investigating and defending any such expense, loss,
judgment, claim, damage, liability or action; PROVIDED, HOWEVER, that the Company will not be
liable in any such case to the extent that any such expense, loss, claim, damage or liability
arises out of or is based upon any untrue statement or allegedly untrue statement or omission or
alleged omission made in such Registration Statement, preliminary prospectus, final prospectus, or
summary prospectus, or any such amendment or supplement, in reliance upon and in conformity with
information furnished to the Company, in writing, by such selling holder expressly for use therein.

          4.2. INDEMNIFICATION BY HOLDERS OF REGISTRABLE SECURITIES. Each selling holder of Registrable
Securities will, in the event that any registration is being effected under the Securities Act
pursuant to this Agreement of any Registrable Securities held by such selling holder, indemnify and
hold harmless the Company, each of its directors and officers and each underwriter (if any), and
each other person, if any, who controls the Company or such underwriter within the meaning of the
Securities Act, against any losses, claims, judgments, damages or liabilities, whether joint or
several, insofar as such losses, claims, judgments, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or allegedly untrue statement of a
material fact contained in any Registration Statement under which the sale of such Registrable
Securities was registered under the Securities Act, any preliminary prospectus, final prospectus or
summary prospectus contained in the Registration Statement, or any amendment or supplement thereto,
or arise out of or are based upon any omission or the alleged omission to state a material fact
required to be stated therein or necessary to make the statement therein not misleading, if the
statement or omission was made in reliance upon and in conformity with information furnished in
writing to the Company by such selling holder expressly for use therein, and shall reimburse the
Company, its directors and officers, and each such controlling person for any legal or other
expenses reasonably incurred by any of them in connection with investigation or defending any such
loss, claim, damage, liability or action. Each selling holder’s indemnification obligations
hereunder shall be several and not joint and shall be limited to the amount of any net proceeds
(after payment of any underwriting fees, discounts, commissions or taxes) actually received by such
selling holder.

          4.3. CONDUCT OF INDEMNIFICATION PROCEEDINGS. Promptly after receipt by any person of any
notice of any loss, claim, damage or liability or any action in respect of which indemnity may be
sought pursuant to Section 4.1 or 4.2, such person (the “INDEMNIFIED PARTY”) shall, if a claim in
respect thereof is to be made against any other person for indemnification hereunder, notify such
other person (the “INDEMNIFYING PARTY”) in writing of the loss, claim, judgment, damage, liability
or action; PROVIDED, HOWEVER, that the failure by the Indemnified Party to notify the Indemnifying
Party shall not relieve the Indemnifying Party from any liability which the Indemnifying Party may
have to such Indemnified Party hereunder, except and solely to the extent the Indemnifying Party is
actually prejudiced by such failure. If the Indemnified Party is seeking indemnification with
respect to any claim or action brought against the Indemnified Party, then the Indemnifying Party
shall be entitled to participate in such claim or action, and, to the extent that it wishes,
jointly with all other Indemnifying Parties, to assume control of the defense thereof with counsel
reasonably satisfactory to the Indemnified Party. After notice from the Indemnifying Party to the

12

 

Indemnified Party of its election to assume control of the defense of such claim or action,
the Indemnifying Party shall not be liable to the Indemnified Party for any legal or other expenses
subsequently incurred by the Indemnified Party in connection with the defense thereof other than
reasonable costs of investigation; PROVIDED, HOWEVER, that in any action in which both the
Indemnified Party and the Indemnifying Party are named as defendants, the Indemnified Party shall
have the right to employ separate counsel (but no more than one such separate counsel) to represent
the Indemnified Party and its controlling persons who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by the Indemnified Party against the
Indemnifying Party, with the fees and expenses of such counsel to be paid by such Indemnifying
Party if, based upon the written opinion of counsel of such Indemnified Party, representation of
both parties by the same counsel would be inappropriate due to actual or potential differing
interests between them. No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, consent to entry of judgment or effect any settlement of any claim or pending or
threatened proceeding in respect of which the Indemnified Party is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Party, unless such judgment or
settlement includes an unconditional release of such Indemnified Party from all liability arising
out of such claim or proceeding.

          4.4. CONTRIBUTION.

               4.4.1. If the indemnification provided for in the foregoing Sections 4.1, 4.2 and 4.3 is
unavailable to any Indemnified Party in respect of any loss, claim, damage, liability or action
referred to herein, then each such Indemnifying Party, in lieu of indemnifying such Indemnified
Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such
loss, claim, damage, liability or action in such proportion as is appropriate to reflect the
relative fault of the Indemnified Parties and the Indemnifying Parties in connection with the
actions or omissions which resulted in such loss, claim, damage, liability or action, as well as
any other relevant equitable considerations. The relative fault of any Indemnified Party and any
Indemnifying Party shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission to state a material
fact relates to information supplied by such Indemnified Party or such Indemnifying Party and the
parties’ relative intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.

               4.4.2. The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 4.4 were determined by PRO RATA allocation or by any other method of
allocation which does not take account of the equitable considerations referred to in the
immediately preceding Section.

               4.4.3. The amount paid or payable by an Indemnified Party as a result of any loss, claim,
damage, liability or action referred to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses incurred by such
Indemnified Party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 4.4, no holder of Registrable Securities shall be
required to contribute any amount in excess of the dollar amount of the net proceeds (after payment
of any underwriting fees, discounts, commissions or taxes) actually

13

 

received by such holder from the sale of Registrable Securities which gave rise to such
contribution obligation. No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.

     5. UNDERWRITING AND DISTRIBUTION.

          5.1. RULE 144. The Company covenants that it shall use its best efforts to file any reports
required to be filed by it under the Securities Act and the Exchange Act and shall take such
further action as the holders of Registrable Securities may reasonably request, all to the extent
required from time to time to enable such holders to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions provided by Rule 144
under the Securities Act, as such Rules may be amended from time to time, or any similar Rule or
regulation hereafter adopted by the Commission.

     6. MISCELLANEOUS.

          6.1. OTHER REGISTRATION RIGHTS. The Company represents and warrants that no person, other
than holders of the Registrable Securities and the Founders, has any right to require the Company
to register any shares of the Company’s capital stock for sale or to include shares of the
Company’s capital stock in any registration filed by the Company for the sale of shares of capital
stock for its own account or for the account of any other person.

          6.2. ASSIGNMENT; NO THIRD PARTY BENEFICIARIES. This Agreement and the rights, duties and
obligations of the Company hereunder may not be assigned or delegated by the Company in whole or in
part. This Agreement and the rights, duties and obligations of the holders of Registrable
Securities hereunder may be freely assigned or delegated by such holder of Registrable Securities
in conjunction with and to the extent of any transfer of Registrable Securities by any such holder.
This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of
each of the parties and their respective successors and the permitted assigns of the Investor or
holder of Registrable Securities or of any assignee of the Investor or holder of Registrable
Securities. This Agreement is not intended to confer any rights or benefits on any persons that
are not party hereto other than as expressly set forth in Article 4 and this Section 6.2.

          6.3. NOTICES. All notices, demands, requests, consents, approvals or other communications
(collectively, “NOTICES”) required or permitted to be given hereunder or which are given with
respect to this Agreement shall be in writing and shall be personally served, delivered by
reputable air courier service with charges prepaid, or transmitted by hand delivery, telegram,
telex or facsimile, addressed as set forth below, or to such other address as such party shall have
specified most recently by written notice. Notice shall be deemed given on the date of service or
transmission if personally served or transmitted by telegram, telex or facsimile; PROVIDED, that if
such service or transmission is not on a business day or is after normal business hours, then such
notice shall be deemed given on the next business day. Notice otherwise sent as provided herein
shall be deemed given on the next business day following

14

 

timely delivery of such notice to a reputable air courier service with an order for next-day
delivery.

To the Company:

Santa Monica Media Corporation

9229 Sunset Boulevard, Suite 505

Los Angeles, California 90069

Attention: David Marshall

with a copy to:

Troy & Gould Professional Corporation

1801 Century Park East, 16th Floor

Los Angeles, California 90067

Attention: David L. Ficksman, Esq.

     To a Founder, to the address for each Founder set forth in the Founders Registration Rights
Agreement.

To the UPO Holders:

Citigroup Global Markets Inc.

388 Greenwich Street

New York, New York 10013

Attention: General Counsel

Deutsche Bank Securities Inc.

60 Wall Street, 4th Floor

New York, New York 10005

Attention: Syndicate Manager, with a copy to General Counsel

Ladenburg Thalman & Co. Inc.

153 East 53rd Street, 49th Floor

New York, New York 10022

Attention: Peter H. Blum

          6.4. SEVERABILITY. This Agreement shall be deemed severable, and the invalidity or
unenforceability of any term or provision hereof shall not affect the validity or enforceability of
this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid
or unenforceable term or provision, the parties hereto intend that there shall be added as a part
of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may
be possible and be valid and enforceable.

          6.5. COUNTERPARTS. This Agreement may be executed in multiple counterparts, each of which
shall be deemed an original, and all of which taken together shall constitute one and the same
instrument.

15

 

          6.6. ENTIRE AGREEMENT. This Agreement (including all agreements entered into pursuant hereto
and all certificates and instruments delivered pursuant hereto and thereto) constitute the entire
agreement of the parties with respect to the subject matter hereof and supersede all prior and
contemporaneous agreements, representations, understandings, negotiations and discussions between
the parties, whether oral or written.

          6.7. MODIFICATIONS AND AMENDMENTS. No amendment, modification or termination of this
Agreement shall be binding upon any party unless executed in writing by such party.

          6.8. TITLES AND HEADINGS. Titles and headings of sections of this Agreement are for
convenience only and shall not affect the construction of any provision of this Agreement.

          6.9. WAIVERS AND EXTENSIONS. Any party to this Agreement may waive any right, breach or
default which such party has the right to waive, PROVIDED that such waiver will not be effective
against the waiving party unless it is in writing, is signed by such party, and specifically refers
to this Agreement. Waivers may be made in advance or after the right waived has arisen or the
breach or default waived has occurred. Any waiver may be conditional. No waiver of any breach of
any agreement or provision herein contained shall be deemed a waiver of any preceding or succeeding
breach thereof nor of any other agreement or provision herein contained. No waiver or extension of
time for performance of any obligations or acts shall be deemed a waiver or extension of the time
for performance of any other obligations or acts.

          6.10. REMEDIES CUMULATIVE. In the event that the Company fails to observe or perform any
covenant or agreement to be observed or performed under this Agreement, the Investor or any other
holder of Registrable Securities may proceed to protect and enforce its rights by suit in equity or
action at law, whether for specific performance of any term contained in this Agreement or for an
injunction against the breach of any such term or in aid of the exercise of any power granted in
this Agreement or to enforce any other legal or equitable right, or to take any one or more of such
actions, without being required to post a bond. None of the rights, powers or remedies conferred
under this Agreement shall be mutually exclusive, and each such right, power or remedy shall be
cumulative and in addition to any other right, power or remedy, whether conferred by this Agreement
or now or hereafter available at law, in equity, by statute or otherwise.

          6.11. GOVERNING LAW. This Agreement shall be governed by, interpreted under, and construed in
accordance with the internal laws of the State of New York applicable to agreements made and to be
performed within the State of New York, without giving effect to any choice-of-law provisions
thereof that would compel the application of the substantive laws of any other jurisdiction.

          6.12. WAIVER OF TRIAL BY JURY. Each party hereby irrevocably and unconditionally waives the
right to a trial by jury in any action, suit, counterclaim or other proceeding (whether based on
contract, tort or otherwise) arising out of, connected with or

16

 

relating to this Agreement, the transactions contemplated hereby, or the actions of the
Investor in the negotiation, administration, performance or enforcement hereof.

          6.13. WAIVER OF MONETARY DAMAGES. Notwithstanding anything herein to the contrary, the
Company shall not be liable to any party for monetary damages arising from the failure of the
Company to comply with its obligations pursuant to this Agreement,
and each UPO Holder hereby waives
any right to make any claim for monetary damages, it being understood that the sole remedy
hereunder shall be to seek equitable relief.

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     IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be executed
and delivered by their duly authorized representatives as of the date first written above.

	 	 	 	 	 
	 	SANTA MONICA MEDIA CORPORATION

A Delaware corporation

 	 
	 	By:  	 	 
	 	 	 	 
	 	 	 	 
	 
	 	CITIGROUP GLOBAL MARKETS INC.

 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 
	 	DEUTSCHE BANK SECURITIES INC.

 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 
	 	LADENBURG THALMAN & CO. INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

18

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