Document:

exv4w4

 

Exhibit 4.4

THE REGISTERED HOLDER OF THIS PURCHASE OPTION BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT
SELL, TRANSFER OR ASSIGN THIS PURCHASE OPTION EXCEPT AS HEREIN PROVIDED AND THE REGISTERED HOLDER
OF THIS PURCHASE OPTION AGREES THAT IT WILL NOT SELL, TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE THIS
PURCHASE OPTION FOR A PERIOD OF ONE YEAR FOLLOWING THE EFFECTIVE DATE (DEFINED BELOW) TO ANYONE
OTHER THAN (I) CITIGROUP GLOBAL MARKETS INC (“CITIGROUP”), DEUTSCHE BANK SECURITIES INC. (“DBSI”),
ANY OF THEIR RESPECTIVE AFFILIATES OR AN UNDERWRITER OR A SELECTED DEALER IN CONNECTION WITH THE
OFFERING, OR (II) A BONA FIDE OFFICER OR PARTNER OF CITIGROUP DBSI OR OF ANY SUCH UNDERWRITER OR
SELECTED DEALER.

THIS PURCHASE OPTION IS NOT EXERCISABLE PRIOR TO THE LATER OF THE CONSUMMATION BY SANTA MONICA
MEDIA CORPORATION (“COMPANY”) OF A MERGER, CAPITAL STOCK EXCHANGE, ASSET OR STOCK ACQUISITION OR
OTHER SIMILAR BUSINESS COMBINATION WITH AN OPERATING BUSINESS IN THE COMMUNICATIONS, MEDIA, GAMING
AND/OR ENTERTAINMENT INDUSTRIES (AN “INITIAL TRANSACTION”) (AS DESCRIBED MORE FULLY IN THE
COMPANY’S REGISTRATION STATEMENT (DEFINED HEREIN)) OR                    , 2007. VOID AFTER
5:00 P.M. NEW YORK CITY LOCAL TIME,                    ,                    , 2010.

UNIT PURCHASE OPTION

FOR THE PURCHASE OF

937,500 UNITS

OF

SANTA MONICA MEDIA CORPORATION

     1. Purchase Option.

          THIS CERTIFIES THAT, in consideration of $                      duly paid by or on behalf of
                                         (“Holder”), as registered owner of this Purchase Option, to Santa Monica
Media Corporation, Holder is entitled, at any time or from time to time upon the later of the
consummation of an Initial Transaction, or                     , [2007] (“Commencement Date”),
and at or before 5:00 p.m., New York City local time,                    , [2010] (“Expiration
Date”), but not thereafter, to subscribe for, purchase and receive, in whole or in part, up to
937,500 units (“Units”) of the Company, each Unit consisting of one share of common stock of the
Company, par value $0.001 per share (“Common Stock”), and one warrant (“Warrant(s)”) expiring four
years from the effective date (“Effective Date”) of the registration statement (“Registration
Statement”) pursuant to which Units are offered for sale to the public (“Offering”). Each Warrant
shall be substantially the same (other than the exercise price thereof) as the warrants included in
the Units being registered for sale to the public by way of the Registration Statement (“Public
Warrants”). If the Expiration Date is a day on which banking institutions are authorized by law to
close, then this Purchase Option may be exercised on the next succeeding day which is not such a
day in accordance with the terms herein. During the period ending on the Expiration Date, the
Company agrees not to take any action that would terminate this Purchase

 

 

Option. This Purchase Option is initially exercisable at $9.60 per Unit so purchased;
provided, however, that upon the occurrence of any of the events specified in Section 6 hereof, the
rights granted by this Purchase Option, including the exercise price per Unit and the number of
Units (and shares of Common Stock and Warrants) to be received upon such exercise, shall be
adjusted as therein specified. The term “Exercise Price” shall mean the initial exercise price or
the adjusted exercise price, depending on the context.

     2. Exercise.

          2.1. Exercise Form. In order to exercise this Purchase Option, the exercise form attached
hereto must be duly executed and completed and delivered to the Company, together with this
Purchase Option and payment of the Exercise Price for the Units being purchased payable in cash or
by certified check or official bank check. If the subscription rights represented hereby shall not
be exercised at or before 5:00 p.m., New York City local time, on the Expiration Date this Purchase
Option shall become and be void without further force or effect, and all rights represented hereby
shall cease and expire.

          2.2. Legend. Each certificate for the securities purchased under this Purchase Option shall
bear a legend as follows unless such securities have been registered under the Securities Act of
1933, as amended (“Act”):

          “The securities represented by this certificate have not been registered under the Securities
Act of 1933, as amended (“Act”), or applicable state law. The securities may not be offered for
sale, sold or otherwise transferred except pursuant to an effective registration statement under
the Act, or pursuant to an exemption from registration under the Act and applicable state law.”

          2.3. Cashless Exercise.

               2.3.1. Determination of Amount. In lieu of the payment of the Exercise Price multiplied by
the number of Units for which this Purchase Option is exercisable and in lieu of being entitled to
receive Units in the manner required by Section 2.1, the Holder shall have the right (but not the
obligation) to convert any exercisable but unexercised portion of this Purchase Option into Units
(“Conversion Right”) as follows: upon exercise of the Conversion Right, the Company shall deliver
to the Holder (without payment by the Holder of any of the Exercise Price in cash) that number of
Units equal to the quotient obtained by dividing (x) the “Value” (as defined below) of the portion
of this Purchase Option being converted by (y) the “Current Market Price” (as defined below) of a
Unit. The “Value” of the portion of this Purchase Option being converted shall equal the remainder
derived from subtracting (a) the product of (i) the Exercise Price multiplied by (ii) the number of
Units underlying the portion of this Purchase Option being converted from (b) the product of (i)
Current Market Price of a Unit multiplied by (ii) the number of Units underlying the portion of
this Purchase Option being converted.

          The “Current Market Price” of a Unit at any day shall mean (i) if the Units are listed on a
national securities exchange (including, without limitation, the American Stock Exchange) or quoted
on the Nasdaq National Market, Nasdaq SmallCap Market or NASD OTC Bulletin Board (or successor such
as the Bulletin Board Exchange), the average closing price of a Unit for the thirty (30) trading
days immediately preceding the date of determination of the Current Market Price in the principal
trading market for the Units as reported by the exchange, Nasdaq or the NASD, as the case may be;
(ii) if Units are not listed on a national securities exchange or quoted on the Nasdaq National
Market, Nasdaq SmallCap Market or the NASD OTC Bulletin Board (or successor such as the Bulletin
Board Exchange),

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but is traded in the residual over-the-counter market, the closing bid price for a Unit on the
last trading day preceding the date in question for which such quotations are reported by the Pink
Sheets, LLC or similar publisher of such quotations; and (iii) if the fair market value of the
Units cannot be determined pursuant to clause (i) or (ii) above, such price as the Board of
Directors of the Company shall determine, in good faith.

               2.3.2. Mechanics of Cashless Exercise. The cashless exercise right described in this Section
2.3 (the “Cashless Exercise Right”) may be exercised by the Holder on any business day on or after
the Commencement Date and not later than the Expiration Date by delivering this Purchase Option
with the duly executed exercise form attached hereto with the cashless exercise section completed
to the Company, exercising the Cashless Exercise Right and specifying the total number of Units the
Holder will purchase pursuant to such Cashless Exercise Right.

     3. Transfer.

          3.1. General Restrictions. The registered Holder of this Purchase Option, by its acceptance
hereof, agrees that it will not sell, transfer, assign, pledge or hypothecate this Purchase Option
for a period of one year following the Effective Date to anyone other than (i) Citigroup, DBSI, any
of their respective affiliates or an underwriter or a selected dealer in connection with the
Offering, or (ii) a bona fide officer or partner of Citigroup, DBSI, any of their respective
affiliates or of any such underwriter or selected dealer. On and after the first anniversary of
the Effective Date, transfers to others may be made subject to compliance with or exemptions from
applicable securities laws. In order to make any permitted assignment, the Holder must deliver to
the Company the assignment form attached hereto duly executed and completed, together with this
Purchase Option and payment of all transfer taxes, if any, payable in connection therewith. The
Company shall within five business days transfer this Purchase Option on the books of the Company
and shall execute and deliver a new Purchase Option or Purchase Options of like tenor to the
appropriate assignee(s) expressly evidencing the right to purchase the aggregate number of Units
purchasable hereunder or such portion of such number as shall be contemplated by any such
assignment.

          3.2. Restrictions Imposed by the Act. The securities evidenced by this Purchase Option shall
not be transferred unless and until (i) the Company has received the opinion of counsel for the
Holder that the securities may be transferred pursuant to an exemption from registration under the
Act and applicable state securities laws, the availability of which is established to the
reasonable satisfaction of the Company (the Company hereby agreeing that the opinion of Bingham
McCutchen LLP shall be deemed satisfactory evidence of the availability of an exemption), or (ii) a
registration statement or a post-effective amendment to the Registration Statement relating to such
securities has been filed by the Company and declared effective by the Securities and Exchange
Commission (the “Commission”) and compliance with applicable state securities law has been
established.

     4. New Purchase Options to be Issued.

          4.1. Partial Exercise or Transfer. Subject to the restrictions in Section 3 hereof, this
Purchase Option may be exercised or assigned in whole or in part; provided, however, that any
partial exercise of this Purchase Option must be for a minimum of at least 50,000 Units or such
lesser number of Units that remain issuable hereunder. In the event of the exercise or assignment
hereof in part only, upon surrender of this Purchase Option for cancellation, together with the
duly executed exercise or assignment form and funds sufficient to pay any Exercise Price and/or
transfer tax, the Company shall cause to be delivered to the Holder without charge a new Purchase
Option of like tenor to this Purchase Option in the

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name of the Holder evidencing the right of the Holder to purchase the number of Units
purchasable hereunder as to which this Purchase Option has not been exercised or assigned.

          4.2. Lost Certificate. Upon receipt by the Company of evidence satisfactory to it of the
loss, theft, destruction or mutilation of this Purchase Option and of reasonably satisfactory
indemnification or the posting of a bond, the Company shall execute and deliver a new Purchase
Option of like tenor and date. Any such new Purchase Option executed and delivered as a result of
such loss, theft, mutilation or destruction shall constitute a substitute contractual obligation on
the part of the Company.

     5. Warrant Redemption. Notwithstanding anything to the contrary contained herein or in that
certain Warrant Agreement, dated as of                     , 2006, between the Company and
Continental Stock Transfer & Trust Company, as Warrant Agent (the “Warrant Agreement”), (i) this
Purchase Option shall, if not earlier exercised in full, be automatically exercised, on a cashless
basis as described in Section 2.3.1 hereof, immediately prior to the Redemption Date (as defined in
the Warrant Agreement) redemption of the Company’s outstanding warrants pursuant to [Section 6] of
the Warrant Agreement (provided that notice is provided to the Holder on the same terms as provided
to the holders of Warrants pursuant to the Warrant Agreement), and (ii) each Warrant that is part
of a Unit issued hereunder upon such automatic conversion shall be redeemed by the Company as part
of such redemption for the Redemption Price (as defined in the Warrant Agreement).

     6. Adjustments.

          6.1. Adjustments to Exercise Price and Number of Securities. The Exercise Price and the
number of Units underlying this Purchase Option shall be subject to adjustment from time to time as
hereinafter set forth:

               6.1.1. Stock Dividends — Split-Ups. If after the date hereof, and subject to the provisions
of Section 6.4 below, the number of outstanding shares of Common Stock is increased by a stock
dividend payable in shares of Common Stock or by a split-up of shares of Common Stock or other
similar event, then, on the effective date thereof, the number of shares of Common Stock underlying
each of the Units purchasable hereunder shall be increased in proportion to such increase in
outstanding shares. In such case, the number of shares of Common Stock, and the exercise price
applicable thereto, underlying the Warrants underlying each of the Units purchasable hereunder
shall be adjusted in accordance with the terms of the Warrants (even though such Warrants shall not
yet have been issued). For example, if the Company declares a two-for-one stock dividend and at
the time of such dividend this Purchase Option is for the purchase of one Unit at $9.60 per whole
Unit (and each Warrant underlying the Units is exercisable for $7.50 per share), upon effectiveness
of the dividend, this Purchase Option will be adjusted to allow for the purchase of one Unit at
$9.60 per Unit, each Unit entitling the holder to receive two shares of Common Stock and two
Warrants (each Warrant exercisable for $3.75 per share).

               6.1.2. Aggregation of Shares. If after the date hereof, and subject to the provisions of
Section 6.4, the number of outstanding shares of Common Stock is decreased by a consolidation,
combination or reclassification of shares of Common Stock or other similar event, then, on the
effective date thereof, the number of shares of Common Stock underlying each of the Units
purchasable hereunder shall be decreased in proportion to such decrease in outstanding shares. In
such case, the number of shares of Common Stock, and the exercise price applicable thereto,
underlying the Warrants underlying each of the Units purchasable hereunder shall be adjusted in
accordance with the terms of the Warrants (even though such Warrants shall not yet have been
issued).

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               6.1.3. Replacement of Securities upon Reorganization, etc. In case of any reclassification or
reorganization of the outstanding shares of Common Stock other than a change covered by Section
6.1.1 or 6.1.2 hereof or that solely affects the par value of such shares of Common Stock, or in
the case of any merger or consolidation of the Company with or into another corporation (other than
a consolidation or merger in which the Company is the continuing corporation and that does not
result in any reclassification or reorganization of the outstanding shares of Common Stock), or in
the case of any sale or conveyance to another corporation or entity of the property of the Company
as an entirety or substantially as an entirety in connection with which the Company is dissolved,
the Holder of this Purchase Option shall have the right thereafter (until the expiration of the
right of exercise of this Purchase Option) to receive upon the exercise hereof, for the same
aggregate Exercise Price payable hereunder immediately prior to such event, the kind and amount of
shares of stock or other securities or property (including cash) receivable upon such
reclassification, reorganization, merger or consolidation, or upon a dissolution following any such
sale or transfer, by a Holder of the number of shares of Common Stock of the Company obtainable
upon exercise of this Purchase Option and the underlying Warrants immediately prior to such event;
and if any reclassification also results in a change in shares of Common Stock covered by Section
6.1.1 or 6.1.2, then such adjustment shall be made pursuant to Sections 6.1.1, 6.1.2 and this
Section 6.1.3. The provisions of this Section 6.1.3 shall similarly apply to successive
reclassifications, reorganizations, mergers or consolidations, sales or other transfers.

               6.1.4. Changes in Form of Purchase Option. This form of Purchase Option need not be changed
because of any change pursuant to this Section, and Purchase Options issued after such change may
state the same Exercise Price and the same number of Units as are stated in the Purchase Options
initially issued pursuant to this Agreement. The acceptance by any Holder of the issuance of new
Purchase Options reflecting a required or permissive change shall not be deemed to waive any rights
to an adjustment occurring after the Commencement Date or the computation thereof.

          6.2. Substitute Purchase Option. In case of any consolidation of the Company with, or merger
of the Company with, or merger of the Company into, another corporation (other than a consolidation
or merger which does not result in any reclassification or change of the outstanding Common Stock),
the corporation formed by such consolidation or merger shall execute and deliver to the Holder a
supplemental Purchase Option providing that the holder of each Purchase Option then outstanding or
to be outstanding shall have the right thereafter (until the stated expiration of such Purchase
Option) to receive, upon exercise of such Purchase Option, the kind and amount of shares of stock
and other securities and property receivable upon such consolidation or merger, by a holder of the
number of shares of Common Stock of the Company for which such Purchase Option might have been
exercised immediately prior to such consolidation, merger, sale or transfer. Such supplemental
Purchase Option shall provide for adjustments which shall be identical to the adjustments provided
in Section 6. The above provision of this Section shall similarly apply to successive
consolidations or mergers.

          6.3. Elimination of Fractional Interests. The Company shall not be required to issue
certificates representing fractions of shares of Common Stock or Warrants upon the exercise of this
Purchase Option, nor shall it be required to issue scrip or pay cash in lieu of any fractional
interests, it being the intent of the parties that all fractional interests shall be eliminated by
rounding any fraction up to the nearest whole number of Warrants, shares of Common Stock or other
securities, properties or rights.

     7. Reservation and Listing. The Company shall at all times reserve and keep available out of
its authorized shares of Common Stock, solely for the purpose of issuance upon exercise of this
Purchase Option or the Warrants underlying this Purchase Option, such number of shares of Common

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Stock or other securities, properties or rights as shall be issuable upon the exercise
thereof. The Company covenants and agrees that, upon exercise of this Purchase Option and payment
of the Exercise Price therefor, all shares of Common Stock and other securities issuable upon such
exercise shall be duly and validly issued, fully paid and non-assessable and not subject to
preemptive rights of any stockholder. The Company further covenants and agrees that upon exercise
of the Warrants underlying this Purchase Option and payment of the respective Warrant exercise
price therefor, all shares of Common Stock and other securities issuable upon such exercise shall
be duly and validly issued, fully paid and non-assessable and not subject to preemptive rights of
any stockholder. As long as this Purchase Option shall be outstanding, the Company shall use
commercially reasonable efforts to cause all (i) Units and shares of Common Stock issuable upon
exercise of this Purchase Option, (ii) Warrants issuable upon exercise of this Purchase Option and
(iii) shares of Common Stock issuable upon exercise of the Warrants included in the Units issuable
upon exercise of this Purchase Option to be listed (subject to official notice of issuance) on all
securities exchanges (or, if applicable on the Nasdaq National Market, SmallCap Market, OTC
Bulletin Board or any successor trading market) on which the Units, the Common Stock or the Public
Warrants issued to the public in connection herewith may then be listed and/or quoted.

     8. Certain Notice Requirements.

          8.1. Holder’s Right to Receive Notice. Nothing herein shall be construed as conferring upon
the Holders the right to vote or consent as a stockholder for the election of directors or any
other matter, or as having any rights whatsoever as a stockholder of the Company. If, however, at
any time prior to the expiration of this Purchase Options and their exercise, any of the events
described in Section 8.2 shall occur, then, in one or more of said events, the Company shall give
written notice of such event at least fifteen days prior to the date fixed as a record date or the
date of closing the transfer books for the determination of the stockholders entitled to such
dividend, distribution, conversion or exchange of securities or subscription rights, or entitled to
vote on such proposed dissolution, liquidation, winding up or sale. Such notice shall specify such
record date or the date of the closing of the transfer books, as the case may be. Notwithstanding
the foregoing, the Company shall deliver to each Holder a copy of each notice given to the other
stockholders of the Company at the same time and in the same manner that such notice is given to
the stockholders.

          8.2. Events Requiring Notice. The Company shall be required to give the notice described in
this Section 8 upon one or more of the following events: (i) if the Company shall take a record of
the holders of its shares of Common Stock for the purpose of entitling them to receive a dividend
or distribution payable otherwise than in cash, or a cash dividend or distribution payable
otherwise than out of retained earnings, as indicated by the accounting treatment of such dividend
or distribution on the books of the Company, (ii) the Company shall offer to all the holders of its
Common Stock any additional shares of capital stock of the Company or securities convertible into
or exchangeable for shares of capital stock of the Company, or any option, right or warrant to
subscribe therefor, (iii) a dissolution, liquidation or winding up of the Company (other than in
connection with a consolidation or merger) or a sale of all or substantially all of its property,
assets and business shall be proposed, (iv) if the Company shall delivery a notice to holders of
the warrants of a redemption pursuant to Section 6.2 of the Warrant Agreement or (v) if the Company
shall deliver a notice to the Holder pursuant to Section 5 of this Unit Purchase Option.

          8.3. Notice of Change in Exercise Price. The Company shall, promptly after an event requiring
a change in the Exercise Price pursuant to Section 6 hereof, send notice to the Holders of such
event and change (“Price Notice”). The Price Notice shall describe the event causing the change
and the

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method of calculating same and shall be certified as being true and accurate by the Company’s
President and Chief Executive Officer.

          8.4. Transmittal of Notices. All notices, requests, consents and other communications under
this Purchase Option shall be in writing and shall be deemed to have been duly made when hand
delivered, or mailed by express mail or private courier service: (i) if to the registered Holder of
this Purchase Option, to the address of such Holder as shown on the books of the Company, or (ii)
if to the Company, to the following address or to such other address as the Company may designate
by notice to the Holders:

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

     9. Miscellaneous.

          9.1. Amendments. The Company, Citigroup and DBSI may from time to time supplement or amend
this Purchase Option without the approval of any of the Holders in order to cure any ambiguity, to
correct or supplement any provision contained herein that may be defective or inconsistent with any
other provisions herein, or to make any other provisions in regard to matters or questions arising
hereunder that the Company, Citigroup and DBSI may deem necessary or desirable and that the
Company, Citigroup DBSI deem shall not adversely affect the interest of the Holders. All other
modifications or amendments shall require the written consent of and be signed by the party against
whom enforcement of the modification or amendment is sought.

          9.2. Headings. The headings contained herein are for the sole purpose of convenience of
reference, and shall not in any way limit or affect the meaning or interpretation of any of the
terms or provisions of this Purchase Option.

          9.3. Entire Agreement. This Purchase Option (together with the other agreements and documents
being delivered pursuant to or in connection with this Purchase Option) constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof, and supersedes all prior
agreements and understandings of the parties, oral and written, with respect to the subject matter
hereof.

          9.4. Binding Effect. This Purchase Option shall inure solely to the benefit of and shall be
binding upon, the Holder and the Company and their permitted assignees, respective successors,
legal representative and assigns, and no other person shall have or be construed to have any legal
or equitable right, remedy or claim under or in respect of or by virtue of this Purchase Option or
any provisions herein contained.

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          9.5. Governing Law; Submission to Jurisdiction. This Purchase Option 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. The Company hereby agrees that any action, proceeding or claim against it
arising out of, or relating in any way to this Purchase Option may be brought and enforced in the
courts of the State of New York or of the United States of America for the Southern District of New
York, and irrevocably submits to such jurisdiction. Any process or summons to be served upon the
Company may be served by transmitting a copy thereof by registered or certified mail, return
receipt requested, postage prepaid, addressed to it at the address set forth in Section 8 hereof.
Such mailing shall be deemed personal service and shall be legal and binding upon the Company in
any action, proceeding or claim. The Company and the Holder agree that the prevailing party(ies)
in any such action shall be entitled to recover from the other party(ies) all of its reasonable
attorneys’ fees and expenses relating to such action or proceeding and/or incurred in connection
with the preparation therefor.

          9.6. Waiver, Etc. The failure of the Company or the Holder to at any time enforce any of the
provisions of this Purchase Option shall not be deemed or construed to be a waiver of any such
provision, nor to in any way affect the validity of this Purchase Option or any provision hereof or
the right of the Company or any Holder to thereafter enforce each and every provision of this
Purchase Option. No waiver of any breach, non-compliance or non-fulfillment of any of the
provisions of this Purchase Option shall be effective unless set forth in a written instrument
executed by the party or parties against whom or which enforcement of such waiver is sought; and no
waiver of any such breach, non-compliance or non- fulfillment shall be construed or deemed to be a
waiver of any other or subsequent breach or non-compliance.

          9.7. Execution in Counterparts. This Purchase Option may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each of which shall be
deemed to be an original, but all of which taken together shall constitute one and the same
agreement, and shall become effective when one or more counterparts has been signed by each of the
parties hereto and delivered to each of the other parties hereto.

          9.8. Exchange Agreement. As a condition of the Holder’s receipt and acceptance of this
Purchase Option, Holder agrees that, at any time prior to the complete exercise of this Purchase
Option by Holder, if the Company, Citigroup and DBSI enter into an agreement (“Exchange Agreement”)
pursuant to which they agree that all outstanding Purchase Options will be exchanged for securities
or cash or a combination of both, then Holder shall agree to such exchange and become a party to
the Exchange Agreement.

          9.9 No Net-Cash Settlement or Monetary Damages. In no event shall the registered Holder of this
Purchase Option be entitled to (i) net-cash settlement of this Purchase Option, regardless of
whether the securities underlying this Purchase Option have been registered by the Company pursuant
to an effective registration statement, or (ii) receive any monetary damages if the securities
underlying this Purchase Option have not been registered by the Company pursuant to an effective
registration statement, it being understood that the sole remedy hereunder shall be to seek
equitable relief.

[Remainder of this page intentionally left blank; signature page follows.]

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          IN WITNESS WHEREOF, the Company has caused this Purchase Option to be signed by its duly
authorized officer as of the          day of                    , 2006.

	 	 	 	 	 
	 	SANTA MONICA MEDIA CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

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Form to be used to exercise Purchase Option:

Santa Monica Media Corporation

9229 Sunset Boulevard, Suite 505

Los Angeles, California 90069

Date:                    , 200

          The undersigned hereby elects irrevocably to exercise all or a portion of the within Purchase
Option and to purchase           Units of Santa Monica Media Corporation and hereby makes payment
of $                     (at the rate of $                     per Unit)
in payment of the Exercise Price pursuant thereto. Please issue the Common Stock and Warrants as
to which this Purchase Option is exercised in accordance with the instructions given below.

or

          The undersigned hereby elects irrevocably to convert its right to purchase           Units
purchasable under the within Purchase Option by surrender of the unexercised portion of the
attached Purchase Option (with a “Value” based of $                     based
on a “Market Price” of $           ). Please issue the securities comprising the Units as to which
this Purchase Option is exercised in accordance with the instructions given below.

	 	 	 
	 

	 	 
	 

	 	NOTICE: The signature to this assignment must
correspond with the name as written upon the face of
the purchase option in every particular, without
alteration or enlargement or any change whatever.

	 	 	 
	Signature(s) Guaranteed:
	 	 
	 
	 	 
	 

	 	 

THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS,
SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE
MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15).

INSTRUCTIONS FOR REGISTRATION OF SECURITIES

	 	 	 	 	 
	Name
	 	 	 	 
	 	 	 	 	 
	 

	 	(Print in Block Letters)	 	 
	 
	 	 	 	 
	Address
	 	 	 	 
	 	 	 	 	 

 

 

Form to be used to assign Purchase Option:

ASSIGNMENT

          (To be executed by the registered Holder to effect a transfer of the within Purchase Option):

          FOR VALUE RECEIVED,                     does hereby sell, assign and transfer unto
the right to purchase           Units of Santa Monica Media Corporation (“Company”)
evidenced by the within Purchase Option and does hereby authorize the Company to transfer such
right on the books of the Company.

Dated:                     , 200

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Signature	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of the purchase option in every particular,
without alteration or enlargement or any change
whatever.	 	 

	 	 	 
	Signature(s) Guaranteed:
	 	 
	 
	 	 
	 

	 	 

THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS,
SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE
MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15).exv4w5

 

EXHIBIT 4.5

WARRANT AGREEMENT

     Agreement made as of                      ___, 2006 between Santa Monica Media Corporation, a Delaware
corporation, with offices at 9229 Sunset Boulevard, Suite 505, Los Angeles, CA 90069 (“Company”),
and Continental Stock Transfer & Trust Company, a New York corporation, with offices at 17 Battery
Place, New York, New York 10004 (“Warrant Agent”).

     WHEREAS, in July 2005, the Company issued to Santa Monica Capital Partners, LLC (“Partners”)
4,687,500 Warrants (the “Founder Warrants”), each of such Founder Warrants evidencing the right of
the holder thereof to purchase one share of common stock, par value $.001 per share, of the
Company’s Common Stock (“Common Stock”) for $6.00, subject to adjustment as provided herein;

     WHEREAS, the Company has determined to issue and deliver to Partners in a private placement
375,000 Warrants (the “Placement Warrants”), each of such Placement Warrants evidencing the right
of the holder thereof to purchase one share of Common Stock for $6.00, subject to adjustment as
provided herein;

     WHEREAS, the Company is engaged in a public offering (“Public Offering”) of Units (“Units”)
and, in connection therewith, has determined to issue and deliver up to (i) 21,562,500 Warrants
(“Public Warrants”) to the public investors, and (ii) 937,500 Warrants collectively to Citigroup
Global Markets Inc. (“Citigroup”), Deutsche Bank Securities, Inc. (“DBSI”) and Landenburg Thalman &
Co. Inc. (“Landenburg” and, together with Citigroup and DBSI, the “Underwriters”) or its designees
(“Underwriters’ Warrants” and, together with the Public Warrants, the Founder Warrants and the
Placement Warrants, the “Warrants”), each of such Public Warrants evidencing the right of the
holder thereof to purchase one share of Common Stock, for $6.00, subject to adjustment as described
herein; and

     WHEREAS, the Company has filed with the Securities and Exchange Commission a Registration
Statement, No. 333-128384 on Form S-1 (“Registration Statement”) for the registration, under the
Securities Act of 1933, as amended (“Act”) of, among other securities, the Public Warrants and the
Underwriters’ Warrants and the Common Stock issuable upon exercise of the Underwriters’ Warrants
and Public Warrants; and

     WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company, and the
Warrant Agent is willing to so act, in connection with the issuance, registration, transfer,
exchange, redemption and exercise of the Warrants; and

     WHEREAS, the Company desires to provide for the form and provisions of the Warrants, the terms
upon which they shall be issued and exercised, and the respective rights, limitation of rights, and
immunities of the Company, the Warrant Agent, and the holders of the Warrants; and

     WHEREAS, all acts and things have been done and performed which are necessary to make the
Warrants, when executed on behalf of the Company and countersigned by or on behalf

 

 

of the Warrant Agent, as provided herein, the valid, binding and legal obligations of the
Company, and to authorize the execution and delivery of this Agreement.

     NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto
agree as follows:

1. APPOINTMENT OF WARRANT AGENT. The Company hereby appoints the Warrant Agent
to act as agent for the Company for the Warrants, and the Warrant Agent hereby accepts such
appointment and agrees to perform the same in accordance with the terms and conditions set forth in
this Agreement.

2. WARRANTS.

     2.1 FORM OF WARRANT. Each Warrant shall be issued in registered form
only; except as set forth herein, shall be in substantially the form of Exhibit A hereto, the
provisions of which are incorporated herein; and shall be signed by, or bear the facsimile
signature of, the Chairman of the Board or President and Treasurer, Secretary or Assistant
Secretary of the Company and shall bear a facsimile of the Company’s seal. In the event the person
whose facsimile signature has been placed upon any Warrant shall have ceased to serve in the
capacity in which such person signed the Warrant before such Warrant is issued, it may be issued
with the same effect as if he or she had not ceased to be such at the date of issuance. All of the
Warrants shall initially be represented by one or more book-entry certificates.

     2.2 EFFECT OF COUNTERSIGNATURE. Unless and until countersigned by the
Warrant Agent pursuant to this Agreement, a Warrant shall be invalid and of no effect and may not
be exercised by the holder thereof.

     2.3 REGISTRATION.

          2.3.1 WARRANT REGISTER. The Warrant Agent shall maintain books (“Warrant
Register”), for the registration of original issuance and the registration of transfer of the
Warrants. Upon the initial issuance of the Warrants, or, in the case of the Founder Warrants, the
delivery of definitive warrant certificates in physical form to the Warrant Agent, the Warrant
Agent shall issue and register the Warrants in the names of the respective holders thereof in such
denominations and otherwise in accordance with instructions delivered to the Warrant Agent by the
Company. All of the Warrants shall initially be represented by one or more Book-Entry Warrant
Certificates deposited with the Depository Trust Company (the “Depository”) and registered in the
name of Cede & Co., a nominee of the Depository. Ownership of beneficial interests in the Warrants
shall be shown on, and the transfer of such ownership shall be effected through, records maintained
by (i) the Depository or its nominee for each Book-Entry Warrant Certificate, or (ii) institutions
that have accounts with the Depository (such institution, with respect to a Warrant in its account,
a “Participant”).

          If the Depository subsequently ceases to make its book-entry settlement system available for
the Warrants, the Company may instruct the Warrant Agent regarding making other arrangements for
book-entry settlement. In the event that the Warrants are not eligible for, or it is no longer
necessary to have the Warrants available in, book-entry form, the Warrant Agent shall provide
written instructions to the Depository to deliver to the Warrant Agent for cancellation

2

 

each Book-Entry Warrant Certificate, and the Company shall instruct the Warrant Agent to
deliver to the Depository definitive Warrant Certificates in physical form evidencing such
Warrants. Such definitive Warrant Certificates shall be in the form annexed hereto as Exhibit A
with appropriate insertions, modifications and omissions, as provided above.

          2.3.2 BENEFICIAL OWNER; REGISTERED HOLDER. The term “beneficial owner”
shall mean, on or after the Detachment Date (as defined in Section 2.4), any person in whose name
ownership of a beneficial interest in the Warrants evidenced by a Book-Entry Warrant Certificate is
recorded in the records maintained by the Depository or its nominee, and prior to the Detachment
Date, the person in whose name the Unit to which such Warrant Certificate was initially attached as
registered upon the register relating to such Units. Prior to due presentment for registration of
transfer of any Warrant, the Company and the Warrant Agent may deem and treat the person in whose
name such Warrant shall be registered upon the Warrant Register (“registered holder”), as the
absolute owner of such Warrant and of each Warrant represented thereby (notwithstanding any
notation of ownership or other writing on the Warrant Certificate made by anyone other than the
Company or the Warrant Agent), for the purpose of any exercise thereof, and for all other purposes,
and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.

     2.4 DETACHABILITY OF WARRANTS. The securities comprising the Units will
not be separately transferable until five business days following the earlier to occur of (1)
expiration or termination of the Underwriters’ over-allotment option or (2) its exercise in full
(the “Detachment Date”), but in no event will separate trading of the securities comprising the
Units be allowed until the Company (A) files a Current Report on Form 8-K which includes an audited
balance sheet reflecting the receipt by the Company of the gross proceeds of the Public Offering
including the proceeds received by the Company from the exercise of the Underwriter’s
over-allotment option, if the over-allotment option is exercised prior to the filing of the Form
8-K, and (B) issues a press release announcing when such separate trading will begin.

     2.5 FOUNDER WARRANTS, PLACEMENT WARRANTS AND UNDERWRITERS’ WARRANTS. The
Underwriters’ Warrants shall have the same terms and be in the same form as the Public Warrants
except with respect to the Warrant Price as set forth below in Section 3.1. The Founder Warrants
shall have the same terms and be in the same form as the Public Warrants except with respect to the
duration of the Warrants as set forth in Section 3.2 and the redemption of the Warrants as set
forth in Section 6.6. The Placement Warrants shall have the same terms and be in the same form as
the Public Warrants.

3. TERMS AND EXERCISE OF WARRANTS.

     3.1 WARRANT PRICE. Each Public Warrant, Founder Warrant and Placement
Warrant shall, when countersigned by the Warrant Agent, entitle the registered holder thereof,
subject to the provisions of such Public Warrant and of this Warrant Agreement, to purchase from
the Company the number of shares of Common Stock stated therein, at the price of $6.00 per whole
share, subject to the adjustments provided in Section 4 hereof and in the last sentence of this
Section 3.1. Each Underwriters’ Warrant shall, when countersigned by the Warrant Agent, entitle
the registered holder thereof, subject to the provisions of such Underwriters’ Warrant and of this
Warrant Agreement, to purchase from the Company the number of shares of

3

 

Common Stock stated therein, at the price of $7.50 per whole share, subject to the adjustments
provided in Section 4 hereof. The term “Warrant Price” as used in this Warrant Agreement refers to
the price per share at which Common Stock may be purchased at the time a Warrant is exercised. The
Company in its sole discretion may lower the Warrant Price at any time prior to the Expiration
Date.

     3.2 DURATION OF WARRANTS. Except as set forth in this Section 3.2, a
Warrant may be exercised only during the period (“Exercise Period”) commencing on the later of (i)
the consummation by the Company of a merger, capital stock exchange, asset or stock acquisition or
other similar business combination (“Business Combination”) (as described more fully in the
Company’s Registration Statement) and (ii)                      ___, 2007, and terminating at 5:00 p.m., Los
Angeles time on the earlier to occur of (i)                      ___, 2010 or (ii) the date fixed for
redemption of the Warrants as provided in Section 6 of this Agreement (“Expiration Date”).
Notwithstanding the foregoing, (1) the Founder Warrants may not be exercised until the closing
price of a share of Common Stock included in the Unit is at least $11.50 per share for five
consecutive trading days, and (2) the Expiration Date for the Founder Warrants shall be                     
2010. Except with respect to the right to receive the Redemption Price (as set forth in Section 6
hereunder), each Warrant not exercised on or before the Expiration Date shall become void, and all
rights thereunder and all rights in respect thereof under this Agreement shall cease at the close
of business on the Expiration Date. The Company in its sole discretion may extend the duration of
the Warrants by delaying the Expiration Date.

     3.3 EXERCISE OF WARRANTS.

          A Registered Holder may exercise a Warrant by delivering, not later than 5:00 P.M., New York
time, on any Business Day during the applicable Exercise Period (the “Exercise Date”) to the
Warrant Agent at its corporate trust department (i) the Warrant Certificate evidencing the Warrants
to be exercised, or, in the case of a Book-Entry Warrant Certificate, the Warrants to be exercised
(the “Book-Entry Warrants”) free on the records of the Depository to an account of the Warrant
Agent at the Depository designated for such purpose in writing by the Warrant Agent to the
Depository from time to time, (ii) an election to purchase the Shares underlying the Warrants to be
exercised (“Election to Purchase”), properly completed and executed by the Registered Holder on the
reverse of the Warrant Certificate or, in the case of a Book-Entry Warrant Certificate, properly
delivered by the Participant in accordance with the Depository’s procedures, and (iii) the Warrant
Price for each Warrant to be exercised in lawful money of the United States of America by certified
or official bank check or by bank wire transfer in immediately available funds.

          As soon as practicable after the exercise of any Warrant and the clearance of the funds in payment
of the Warrant Price, the Company shall issue to the registered holder of such Warrant a
certificate or certificates for the number of full shares of Common Stock to which he is entitled,
registered in such name or names as may be directed by him, her or it, and if such Warrant shall
not have been exercised in full, a new countersigned Warrant for the number of shares as to which
such Warrant shall not have been exercised. Notwithstanding the foregoing, the Company shall not be
obligated to deliver any securities pursuant to the exercise of a
Warrant and shall have no obligation to settle the Warrant exercise unless a registration statement
under the Act with respect to the Common Stock is effective, subject to the Company’s satisfying
its obligations under Section 7.4 to use its best efforts. In the event that a registration
statement with respect to the Common Stock underlying a Warrant
is not effective under the Act, the holder of such Warrant shall
not be entitled to exercise such Warrant and such Warrant may have no value and expire worthless.
In no event will the Company be required to net cash settle the
warrant exercise. Warrants may not be exercised by, or securities issued to, any registered holder
in any state in which such exercise would be unlawful. In the event that
a registration statement is not effective for the exercised Warrants, the purchaser of a unit containing such Warrant will have paid the full purchase price
for the unit solely for the shares included in such unit.

          If any of (A) the Warrant Certificate or the Book-Entry Warrants, (B) the Election to
Purchase, or (C) the Warrant Price therefor, is received by the Warrant Agent after 5:00 P.M., New
York time, on the specified Exercise Date, the Warrants will be deemed to be received and exercised
on the Business Day next succeeding the Exercise Date. If the date specified as the Exercise Date
is not a Business Day, the Warrants will be deemed to be received and exercised on the next
succeeding day that is a Business Day. If the Warrants are received or deemed to be received after
the Expiration Date, the exercise thereof will be null and void and any funds delivered to the
Warrant Agent will be returned to the Holder or Participant, as the case may be, as soon as
practicable. In no event will interest accrue on funds deposited with the Warrant

4

 

Agent in respect of an exercise or attempted exercise of Warrants. The validity of any
exercise of Warrants will be determined by the Company in its sole discretion and such
determination will be final and binding upon the Holder and the Warrant Agent. Neither the Company
nor the Warrant Agent shall have any obligation to inform a Holder of the invalidity of any
exercise of Warrants.

          The Warrant Agent shall deposit all funds received by it in payment of the Warrant Price in
the account of the Company maintained with the Warrant Agent for such purpose and shall advise the
Company at the end of each day on which funds for the exercise of the Warrants are received of the
amount so deposited to its account. The Warrant Agent shall promptly confirm such telephonic advice
to the Company in writing.

               (i) The Warrant Agent shall, by 11:00 A.M. on the Business Day following the Exercise Date of
any Warrant, advise the Company and the transfer agent and registrar in respect of (a) the shares
of Common Stock (the “Shares”) issuable upon such exercise as to the number of Warrants exercised
in accordance with the terms and conditions of this Agreement, (b) the instructions of each
Registered Holder or Participant, as the case may be, with respect to delivery of the Shares
issuable upon such exercise, and the delivery of definitive Warrant Certificates, as appropriate,
evidencing the balance, if any, of the Warrants remaining after such exercise, (c) in case of a
Book-Entry Warrant Certificate, the notation that shall be made to the records maintained by the
Depository, its nominee for each Book-Entry Warrant Certificate, or a Participant, as appropriate,
evidencing the balance, if any, of the Warrants remaining after such exercise and (d) such other
information as the Company or such transfer agent and registrar shall reasonably require.

               (ii) The Company shall, by 5:00 P.M., New York time, on the third Business Day next succeeding
the Exercise Date of any Warrant and the clearance of the funds in payment of the Warrant Price,
execute, issue and deliver to the Warrant Agent, the Shares to which such Registered Holder or
Participant, as the case may be, is entitled, in fully registered form, registered in such name or
names as may be directed by such Registered Holder or the Participant, as the case may be. Upon
receipt of such Shares, the Warrant Agent shall, by 5:00 P.M., New York time, on the fifth Business
Day next succeeding such Exercise Date, transmit such Shares to or upon the order of the Registered
Holder or Participant, as the case may be.

          In lieu of delivering physical certificates representing the Shares issuable upon exercise,
provided the Company’s transfer agent is participating in the Depository Fast Automated Securities
Transfer program, the Company shall use its reasonable best efforts to cause its transfer agent to
electronically transmit the Shares issuable upon exercise to the Registered Holder or Participant
by crediting the account of Registered Holder’s prime broker with Depository or of the Participant
through its Deposit Withdrawal Agent Commission system. The time periods for delivery described in
the immediately preceding paragraph shall apply to the electronic transmittals described herein.
Notwithstanding the foregoing, except with respect to Placement Warrants, the Company shall not be
obligated to deliver any securities pursuant to the exercise of a Warrant unless a registration
statement under the Act with respect to the Common Stock is effective. Warrants may not be
exercised by, or securities issued to, any Registered Holder in any state in which such exercise
would be unlawful.

5

 

               (iii) The accrual of dividends, if any, on the Shares issued upon the valid exercise of any
Warrant will be governed by the terms generally applicable to the Shares. From and after the
issuance of such Shares, the former Holder of the Warrants exercised will be entitled to the
benefits generally available to other holders of Shares and such former Holder’s right to receive
payments of dividends and any other amounts payable in respect of the Shares shall be governed by,
and shall be subject to, the terms and provisions generally applicable to such Shares.

               (iv) Warrants may be exercised only in whole numbers of Shares. No fractional shares of Common
Stock are to be issued upon the exercise of the Warrant, but rather the number of shares of Common
Stock to be issued shall be rounded up to the nearest whole number. If fewer than all of the
Warrants evidenced by a Warrant Certificate are exercised, a new Warrant Certificate for the number
of unexercised Warrants remaining shall be executed by the Company and countersigned by the Warrant
Agent as provided in Section 2 hereof, and delivered to the holder of this Warrant Certificate at
the address specified on the books of the Warrant Agent or as otherwise specified by such
Registered Holder. If fewer than all the Warrants evidenced by a Book-Entry Warrant Certificate are
exercised, a notation shall be made to the records maintained by the Depository, its nominee for
each Book-Entry Warrant Certificate, or a Participant, as appropriate, evidencing the balance of
the Warrants remaining after such exercise.

               (v) The Company shall not be required to pay any stamp or other tax or governmental charge
required to be paid in connection with any transfer involved in the issue of the Shares upon the
exercise of Warrants; and in the event that any such transfer is involved, the Company shall not be
required to issue or deliver any Shares until such tax or other charge shall have been paid or it
has been established to the Company’s satisfaction that no such tax or other charge is due.

     3.4 VALID ISSUANCE. All shares of Common Stock issued upon the proper
exercise of a Warrant in conformity with this Agreement shall be validly issued, fully paid and
nonassessable.

     3.5 DATE OF ISSUANCE. Each person in whose name any such certificate for
shares of Common Stock is issued shall for all purposes be deemed to have become the holder of
record of such shares on the date on which the Warrant was surrendered and payment of the Warrant
Price was made, irrespective of the date of delivery of such certificate, except that, if the date
of such surrender and payment is a date when the stock transfer books of the Company are closed,
such person shall be deemed to have become the holder of such shares at the close of business on
the next succeeding date on which the stock transfer books are open.

4. ADJUSTMENTS.

     4.1.1 STOCK DIVIDENDS — SPLIT-UPS. If after the date hereof, and subject to
the provisions of Section 4.6 below, the number of outstanding shares of Common Stock is increased
by a stock dividend payable in shares of Common Stock, or by a split-up of shares of Common Stock,
or other similar event, then, on the effective date of such stock dividend, split-up or

6

 

similar event, the number of shares of Common Stock issuable on exercise of each Warrant shall
be increased in proportion to such increase in outstanding shares of Common Stock.

     4.1.2 Extraordinary Dividend. If the Company, at any time while the Warrants are
outstanding and unexpired, shall pay a dividend in cash or securities to the holders of the Common
Stock (or shares of the Company’s capital stock into which the Warrants are convertible), then upon
the exercise of the Warrants, the registered holder shall be entitled to a proportionate share of
any such dividend as if the shares of Common Stock purchased upon exercise hereof by such
registered holder had been purchased and outstanding on the record date fixed for the determination
of the holders of the Common Stock entitled to receive such dividend.

     4.2 AGGREGATION OF SHARES. If after the date hereof, and subject to the
provisions of Section 4.6, the number of outstanding shares of Common Stock is decreased by a
consolidation, combination, reverse stock split or reclassification of shares of Common Stock or
other similar event, then, on the effective date of such consolidation, combination, reverse stock
split, reclassification or similar event, the number of shares of Common Stock issuable on exercise
of each Warrant shall be decreased in proportion to such decrease in outstanding shares of Common
Stock.

     4.3 ADJUSTMENTS IN EXERCISE PRICE. Whenever the number of shares of
Common Stock purchasable upon the exercise of the Warrants is adjusted, as provided in Section 4.1
and 4.2 above, the Warrant Price shall be adjusted (to the nearest cent) by multiplying such
Warrant Price immediately prior to such adjustment by a fraction (x) the numerator of which shall
be the number of shares of Common Stock purchasable upon the exercise of the Warrants immediately
prior to such adjustment, and (y) the denominator of which shall be the number of shares of Common
Stock so purchasable immediately thereafter.

     4.4 REPLACEMENT OF SECURITIES UPON REORGANIZATION, ETC. In case of any
reclassification or reorganization of the outstanding shares of Common Stock (other than a change
covered by Section 4.1 or 4.2 hereof or that solely affects the par value of such shares of Common
Stock), or in the case of any merger or consolidation of the Company with or into another
corporation (other than a consolidation or merger in which the Company is the continuing
corporation and that does not result in any reclassification or reorganization of the outstanding
shares of Common Stock), or in the case of any sale or conveyance to another corporation or entity
of the assets or other property of the Company as an entirety or substantially as an entirety in
connection with which the Company is dissolved, the Warrant holders shall thereafter have the right
to purchase and receive, upon the basis and upon the terms and conditions specified in the Warrants
and in lieu of the shares of Common Stock of the Company immediately theretofore purchasable and
receivable upon the exercise of the rights represented thereby, the kind and amount of shares of
stock or other securities or property (including cash) receivable upon such reclassification,
reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer,
that the Warrant holder would have received if such Warrant holder had exercised his, her or its
Warrant(s) immediately prior to such event; and if any reclassification also results in a change in
shares of Common Stock covered by Section 4.1 or 4.2, then such adjustment shall be made pursuant
to Sections 4.1, 4.2, 4.3 and this Section 4.4. The provisions of this Section 4.4 shall similarly
apply to successive reclassifications, reorganizations, mergers or consolidations, sales or other
transfers.

     4.5 NOTICES OF CHANGES IN WARRANT. Upon every adjustment of the Warrant
Price or the number of shares issuable upon exercise of a Warrant, the Company shall give written
notice thereof to the Warrant Agent, which notice shall state the Warrant Price resulting from such
adjustment and the increase or decrease, if any, in the number of shares purchasable at such price
upon the exercise of a Warrant, setting forth in reasonable detail the method of calculation and
the facts upon which such calculation is based. Upon the occurrence of any event specified in
Sections 4.1, 4.2, 4.3 or 4.4, then, in any such event, the Company shall

7

 

give written notice to the Warrant holder, at the last address set forth for such holder in
the warrant register, of the record date or the effective date of the event. Failure to give such
notice, or any defect therein, shall not affect the legality or validity of such event.

     4.6 NO FRACTIONAL SHARES. Notwithstanding any provision contained in this
Warrant Agreement to the contrary, the Company shall not issue fractional shares upon exercise of
Warrants. If, by reason of any adjustment made pursuant to this Section 4, the holder of any
Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in a
share, the Company shall, upon such exercise, round up to the nearest whole number the number of
the shares of Common Stock to be issued to the Warrant holder.

     4.7 FORM OF WARRANT. The form of Warrant need not be changed because of
any adjustment pursuant to this Section 4, and Warrants issued after such adjustment may state the
same Warrant Price and the same number of shares as is stated in the Warrants initially issued
pursuant to this Agreement. However, the Company may at any time in its sole discretion make any
change in the form of Warrant that the Company may deem appropriate and that does not affect the
substance thereof, and any Warrant thereafter issued or countersigned, whether in exchange or
substitution for an outstanding Warrant or otherwise, may be in the form as so changed.

5. TRANSFER AND EXCHANGE OF WARRANTS.

     5.1 REGISTRATION OF TRANSFER. The Warrant Agent shall register the
transfer, from time to time, of any outstanding Warrant upon the Warrant Register, upon surrender
of such Warrant for transfer, properly endorsed with signatures properly guaranteed and accompanied
by appropriate instructions for transfer. Upon any such transfer, a new Warrant representing an
equal aggregate number of Warrants shall be issued and the old Warrant shall be cancelled by the
Warrant Agent. The Warrants so cancelled shall be delivered by the Warrant Agent to the Company
from time to time upon request.

     5.2 PROCEDURE FOR SURRENDER OF WARRANTS. Warrants may be surrendered to
the Warrant Agent, together with a written request for exchange or transfer, and thereupon the
Warrant Agent shall issue in exchange therefor one or more new Warrants as requested by the
registered holder of the Warrants so surrendered, representing an equal aggregate number of
Warrants; provided, however, that except as otherwise provided herein or in any Book-Entry Warrant
Certificate, each Book-Entry Warrant Certificate may be transferred only in whole and only to the
Depository, to another nominee of the Depository, to a successor depository, or to a nominee of a
successor depository; provided further, however, that in the event that a Warrant surrendered for
transfer bears a restrictive legend, the Warrant Agent shall not cancel such Warrant and issue new
Warrants in exchange therefore until the Warrant Agent has received an opinion of counsel for the
Company stating that such transfer may be made and indicating whether the new Warrants must also
bear a restrictive legend.

     5.3 FRACTIONAL WARRANTS. The Warrant Agent shall not be required to
effect any registration of transfer or exchange which will result in the issuance of a warrant
certificate for a fraction of a warrant.

8

 

     5.4 SERVICE CHARGES. No service charge shall be made for any exchange or
registration of transfer of Warrants.

     5.5 WARRANT EXECUTION AND COUNTERSIGNATURE. The Warrant Agent is hereby
authorized to countersign and to deliver, in accordance with the terms of this Agreement, the
Warrants required to be issued pursuant to the provisions of this Section 5, and the Company,
whenever required by the Warrant Agent, will supply the Warrant Agent with Warrants duly executed
on behalf of the Company for such purpose.

6. REDEMPTION.

     6.1 REDEMPTION. Subject to Sections 6.4 and 6.6 hereof, not less than all
of the outstanding Warrants may be redeemed, at the option of the Company, at any time after they
become exercisable and prior to their expiration, at the office of the Warrant Agent, upon the
notice referred to in Section 6.2., at the price of $.01 per Warrant (“Redemption Price”), provided
that the last sales price of the Common Stock has been at least $11.50 per share, on any twenty
(20) trading days within a thirty (30) trading day period ending on the third business day prior to
the date on which notice of redemption is given.

     6.2 DATE FIXED FOR, AND NOTICE OF, REDEMPTION. In the event the Company
shall elect to redeem all of the Warrants, the Company shall fix a date for the redemption. Notice
of redemption shall be mailed by first class mail, postage prepaid, by the Company not less than 30
days prior to the date fixed for redemption to the registered holders of the Warrants to be
redeemed at their last addresses as they shall appear on the registration books. Any notice mailed
in the manner herein provided shall be conclusively presumed to have been duly given whether or not
the registered holder received such notice.

     6.3 EXERCISE AFTER NOTICE OF REDEMPTION. The Warrants may be exercised in
accordance with Section 3 of this Agreement at any time after notice of redemption shall have been
given by the Company pursuant to Section 6.2. hereof and prior to the time and date fixed for
redemption. On and after the redemption date, the record holder of the Warrants shall have no
further rights except to receive, upon surrender of the Warrants, the Redemption Price.

     6.4 OUTSTANDING WARRANTS ONLY. The Company understands that the
redemption rights provided for by this Section 6 apply only to outstanding Warrants. To the extent
a person holds rights to purchase Warrants, such purchase rights shall not be extinguished by
redemption. However, once such purchase rights are exercised, the Company may redeem the Warrants
issued upon such exercise provided that the criteria for redemption is met.

     6.5 REDEMPTION OF PURCHASE OPTION. Notwithstanding anything to the
contrary contained herein or in that certain Unit Purchase Option, dated as of                     ,
2006 (the “Unit Purchase Option”), if the Company shall elect to redeem all of the Warrants, (i)
the Underwriters’ option to purchase up to 937,500 Units (as described in more detail in the Unit
Purchase Option), if not earlier exercised in full, shall be automatically exercised, on a cashless
basis as described in Section 2.3 thereof immediately prior to the Redemption Date, and (ii) each
Warrant that is part of a Unit issued thereunder upon such

9

 

automatic conversion shall be redeemed by the Company as part of such redemption for the
Redemption Price.

     6.6 EXCLUSION OF FOUNDER WARRANTS. The Founder Warrants shall not be
subject to redemption.

7. OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF WARRANTS.

     7.1 NO RIGHTS AS STOCKHOLDER. A Warrant does not entitle the registered
holder thereof to any of the rights of a stockholder of the Company, including, without limitation,
the right to receive dividends, or other distributions, exercise any preemptive rights to vote or
to consent or to receive notice as stockholders in respect of the meetings of stockholders or the
election of directors of the Company or any other matter.

     7.2 LOST, STOLEN, MUTILATED, OR DESTROYED WARRANTS. If any Warrant is
lost, stolen, mutilated, or destroyed, the Company and the Warrant Agent may on such terms as to
indemnity or otherwise as they may in their discretion impose (which shall, in the case of a
mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination, tenor,
and date as the Warrant so lost, stolen, mutilated, or destroyed. Any such new Warrant shall
constitute a substitute contractual obligation of the Company, whether or not the allegedly lost,
stolen, mutilated, or destroyed Warrant shall be at any time enforceable by anyone.

     7.3 RESERVATION OF COMMON STOCK. The Company shall at all times reserve
and keep available a number of its authorized but unissued shares of Common Stock that will be
sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this
Agreement.

     7.4 REGISTRATION OF COMMON STOCK. The Company agrees that prior to the
commencement of the Exercise Period, it shall file with the Securities and Exchange Commission a
post-effective amendment to the Registration Statement, or a new registration statement, for the
registration, under the Act, of, and it shall use its best efforts to take such action as is necessary to qualify for sale,
in those states in which the Warrants were initially offered by the Company, the Common Stock
issuable upon exercise of the Warrants. In either case, the Company will use its best efforts to
cause the same to become effective and to maintain the effectiveness of such registration statement
until the expiration or redemption of the Warrants in accordance with the provisions of this
Agreement.

8. CONCERNING THE WARRANT AGENT AND OTHER MATTERS.

     8.1 PAYMENT OF TAXES. The Company will from time to time promptly pay all
taxes and charges that may be imposed upon the Company or the Warrant Agent in respect of the
issuance or delivery of shares of Common Stock upon the exercise of Warrants, but the Company shall
not be obligated to pay any transfer taxes in respect of the Warrants or such shares.

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     8.2 RESIGNATION, CONSOLIDATION, OR MERGER OF WARRANT AGENT.

          8.2.1 APPOINTMENT OF SUCCESSOR WARRANT AGENT. The Warrant Agent, or any
successor to it hereafter appointed, may resign its duties and be discharged from all further
duties and liabilities hereunder after giving sixty (60) days’ notice in writing to the Company.
If the office of the Warrant Agent becomes vacant by resignation or incapacity to act or otherwise,
the Company shall appoint in writing a successor Warrant Agent in place of the Warrant Agent. If
the Company shall fail to make such appointment within a period of 30 days after it has been
notified in writing of such resignation or incapacity by the Warrant Agent or by the holder of the
Warrant (who shall, with such notice, submit his Warrant for inspection by the Company), then the
holder of any Warrant may apply to the Supreme Court of the State of New York for the County of New
York for the appointment of a successor Warrant Agent at the Company’s cost. Any successor Warrant
Agent, whether appointed by the Company or by such court, shall be a corporation organized and
existing under the laws of the State of New York, in good standing and having its principal office
in the Borough of Manhattan, City and State of New York, and authorized under such laws to exercise
corporate trust powers and subject to supervision or examination by federal or state authority.
After appointment, any successor Warrant Agent shall be vested with all the authority, powers,
rights, immunities, duties, and obligations of its predecessor Warrant Agent with like effect as if
originally named as Warrant Agent hereunder, without any further act or deed; but if for any reason
it becomes necessary or appropriate, the predecessor Warrant Agent shall execute and deliver, at
the expense of the Company, an instrument transferring to such successor Warrant Agent all the
authority, powers, and rights of such predecessor Warrant Agent hereunder; and upon request of any
successor Warrant Agent the Company shall make, execute, acknowledge, and deliver any and all
instruments in writing for more fully and effectually vesting in and confirming to such successor
Warrant Agent all such authority, powers, rights, immunities, duties, and obligations.

          8.2.2 NOTICE OF SUCCESSOR WARRANT AGENT. In the event a successor Warrant
Agent shall be appointed, the Company shall give notice thereof to the predecessor Warrant Agent
and the transfer agent for the Common Stock not later than the effective date of any such
appointment.

          8.2.3 MERGER OR CONSOLIDATION OF WARRANT AGENT. Any corporation into
which the Warrant Agent may be merged or with which it may be consolidated or any corporation
resulting from any merger or consolidation to which the Warrant Agent shall be a party shall be the
successor Warrant Agent under this Agreement without any further act.

     8.3 FEES AND EXPENSES OF WARRANT AGENT.

          8.3.1 REMUNERATION. The Company agrees to pay the Warrant Agent
reasonable remuneration for its services as such Warrant Agent hereunder and will reimburse the
Warrant Agent upon demand for all expenditures that the Warrant Agent may reasonably incur in the
execution of its duties hereunder.

          8.3.2 FURTHER ASSURANCES. The Company agrees to perform, execute,
acknowledge, and deliver or cause to be performed, executed, acknowledged, and delivered all

11

 

such further and other acts, instruments, and assurances as may reasonably be required by the
Warrant Agent for the carrying out or performing of the provisions of this Agreement.

     8.4 LIABILITY OF WARRANT AGENT.

          8.4.1 RELIANCE ON COMPANY STATEMENT. Whenever in the performance of its
duties under this Warrant Agreement, the Warrant Agent shall deem it necessary or desirable that
any fact or matter be proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a statement signed by the
President or Chairman of the Board of the Company and delivered to the Warrant Agent. The Warrant
Agent may rely upon such statement for any action taken or suffered in good faith by it pursuant to
the provisions of this Agreement.

          8.4.2 INDEMNITY. The Warrant Agent shall be liable hereunder only for its
own negligence, willful misconduct or bad faith. The Company agrees to indemnify the Warrant Agent
and save it harmless against any and all liabilities, including judgments, costs and reasonable
counsel fees, for anything done or omitted by the Warrant Agent in the execution of this Agreement
except as a result of the Warrant Agent’s negligence, willful misconduct, or bad faith.

          8.4.3 EXCLUSIONS. The Warrant Agent shall have no responsibility with
respect to the validity of this Agreement or with respect to the validity or execution of any
Warrant (except its countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any Warrant; nor shall it be
responsible to make any adjustments required under the provisions of Section 4 hereof or
responsible for the manner, method, or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment; nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization or reservation of any shares
of Common Stock to be issued pursuant to this Agreement or any Warrant or as to whether any shares
of Common Stock will when issued be valid and fully paid and nonassessable.

     8.5 ACCEPTANCE OF AGENCY. The Warrant Agent hereby accepts the agency
established by this Agreement and agrees to perform the same upon the terms and conditions herein
set forth and among other things, shall account promptly to the Company with respect to Warrants
exercised and concurrently account for, and pay to the Company, all moneys received by the Warrant
Agent for the purchase of shares of the Company’s Common Stock through the exercise of Warrants.

     8.6 Waiver. The Warrant Agent hereby waives any and all right, title,
interest or claim of any kind (“Claim”) in or to any distribution of the Trust Account (as defined
in that certain Investment Management Trust Agreement, dated as of the date hereof, by and between
the Company and the Warrant Agent as trustee thereunder), and hereby agrees not to seek recourse,
reimbursement, payment or satisfaction for any Claim against the Trust Fund for any reason
whatsoever.

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9. MISCELLANEOUS PROVISIONS.

     9.1 SUCCESSORS. All the covenants and provisions of this Agreement by or
for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their
respective successors and assigns.

     9.2 NOTICES. Any notice, statement or demand authorized by this Warrant
Agreement to be given or made by the Warrant Agent or by the holder of any Warrant to or on the
Company shall be sufficiently given when so delivered if by hand or overnight delivery or if sent
by certified mail or private courier service within five days after deposit of such notice, postage
prepaid, addressed (until another address is filed in writing by the Company with the Warrant
Agent), as follows:

Santa Monica Media Corporation

9229 Sunset Boulevard, Suite 505

Los Angeles, CA 90069

Attn: Chairman

Any notice, statement or demand authorized by this Agreement to be given or made by the holder of
any Warrant or by the Company to or on the Warrant Agent shall be sufficiently given when so
delivered if by hand or overnight delivery or if sent by certified mail or private courier service
within five days after deposit of such notice, postage prepaid, addressed (until another address is
filed in writing by the Warrant Agent with the Company), as follows:

Continental Stock Transfer & Trust Company

17 Battery Place

New York, New York 10004

Attn: Compliance Department

with a copy in each case to:

Citigroup Global Markets, Inc.

388 Greenwich Street

New York, New York 10013

Attn: General Counsel

And

Deutsche Bank Securities, Inc.

60 Wall Street, 4th Floor

New York, New York 10005

Attn: General Counsel

13

 

And

Troy & Gould, PC

1801 Century Park East, 16th Floor

Los Angeles, CA 90067

Attn: David L Ficksman.

     9.3 APPLICABLE LAW. The validity, interpretation, and performance of this
Agreement and of the Warrants shall be governed in all respects by the laws of the State of New
York, without giving effect to conflict of laws. The Company hereby agrees that any action,
proceeding or claim against it arising out of or relating in any way to this Agreement shall be
brought and enforced in the courts of the State of New York or the United States District Court for
the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction
shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and
that such courts represent an inconvenience forum. Any such process or summons to be served upon
the Company may be served by transmitting a copy thereof by registered or certified mail, return
receipt requested, postage prepaid, addressed to it at the address set forth in Section 9.2 hereof.
Such mailing shall be deemed personal service and shall be legal and binding upon the Company in
any action, proceeding or claim.

     9.4 PERSONS HAVING RIGHTS UNDER THIS AGREEMENT. Nothing in this Agreement
expressed and nothing that may be implied from any of the provisions hereof is intended, or shall
be construed, to confer upon, or give to, any person or corporation other than the parties hereto
and the registered holders of the Warrants and, for the purposes of Sections 2.5, 6.1, 6.4, 7.4 and
9.2 hereof, the Underwriters, any right, remedy, or claim under or by reason of this Warrant
Agreement or of any covenant, condition, stipulation, promise, or agreement hereof. The
Underwriters shall be deemed to be a third-party beneficiary of this Agreement with respect to
Sections 2.5, 6.1, 6.4, 7.4 and 9.2 hereof. All covenants, conditions, stipulations, promises, and
agreements contained in this Warrant Agreement shall be for the sole and exclusive benefit of the
parties hereto (and the Underwriters with respect to the Sections 2.5, 6.1, 6.4, 7.4 and 9.2
hereof) and their successors and assigns and of the registered holders of the Warrants.

     9.5 EXAMINATION OF THE WARRANT AGREEMENT. A copy of this Agreement shall
be available at all reasonable times at the office of the Warrant Agent in the Borough of
Manhattan, City and State of New York, for inspection by the registered holder of any Warrant. The
Warrant Agent may require any such holder to submit his Warrant for inspection by it.

     9.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to be an original, and
all such counterparts shall together constitute but one and the same instrument.

     9.7 EFFECT OF HEADINGS. The Section headings herein are for convenience
only and are not part of this Warrant Agreement and shall not affect the interpretation thereof.

14

 

     IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as of the day
and year first above written.

	 	 	 	 	 	 	 	 	 
	Attest:	 	 	 	SANTA MONICA MEDIA CORPORATION
	 
	 	 	 	 	 	 	 	 
	 

 
	 	 	 	By:	 	 

	 	 
	 	 	 	 	Name: David Marshall
	 	 	 	 	Title:   Chairman
	 
	 	 	 	 	 	 	 	 
	Attest:	 	 	 	CONTINENTAL STOCK TRANSFER & TRUST COMPANY
	 
	 	 	 	 	 	 	 	 
	 

 
	 	 	 	By:	 	 

	 	 
	 	 	 	 	Name: Steven Nelson
	 	 	 	 	Title:   Chairman

15

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