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,...
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) THE SHEMANO GROUP, INC. (“THE SHEMANO GROUP”) OR AN UNDERWRITER OR A
SELECTED DEALER IN CONNECTION WITH THE OFFERING, OR (II) A BONA FIDE OFFICER
OR
PARTNER OF THE SHEMANO GROUP OR OF ANY SUCH UNDERWRITER OR SELECTED DEALER.
THIS
PURCHASE OPTION IS NOT EXERCISABLE PRIOR TO THE LATER OF (I) THE CONSUMMATION
BY
SANTA XXXXXX MEDIA CORPORATION (“COMPANY”) OF A MERGER, CAPITAL STOCK EXCHANGE,
ASSET ACQUISITION OR OTHER SIMILAR BUSINESS COMBINATION (“BUSINESS COMBINATION”)
(AS DESCRIBED MORE FULLY IN THE COMPANY’S REGISTRATION STATEMENT (DEFINED
HEREIN)) AND (II) ______________, 2006. VOID AFTER 5:00 P.M. PACIFIC TIME,
_____________, 2010.
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 Xxxxxx Media Corporation (“Company”), Holder is entitled, at any time or
from time to time upon the later of (i) the consummation of a Business
Combination AND (ii) ___________, 2006 (“Commencement Date”), and at or before
5:00 p.m., Pacific Time, _____________, 2010 (“Expiration Date”), but not
thereafter, to subscribe for, purchase and receive, in whole or in part,
up to
Fifteen Million Six Hundred Thousand (1,560,000) units (“Units”) of the Company,
each Unit consisting of one share of common stock of the Company, par value
$.001 per share (“Common Stock”), and one warrant (“Warrant”) 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 is the same as the warrants included in the
Units being registered for sale to the public by way of the Registration
Statement (“Public Warrants”) except that the Warrants have an exercise price of
$7.50 per share. 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 the Purchase Option. This Purchase
Option is initially exercisable at $7.50 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., Pacific 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”):
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“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.”
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2.3
INTENTIONALLY OMITTED.
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) The Shemano Group or an underwriter
or a
selected dealer in connection with the Offering, or (ii) a bona fide officer
or
partner of The Shemano Group or of any such underwriter or selected dealer.
On
and after the second 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 the 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
Blank Rome 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
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. 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 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.
2
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.
REGISTRATION RIGHTS.
5.1.1
GRANT OF RIGHT. The Company, upon written demand (“Initial Demand Notice”) of
the Holder(s) of at least 51% of the Purchase Options and/or the underlying
Units and/or the underlying securities (“Majority Holders”), agrees to register
on one occasion, all or any portion of the Purchase Options requested by
the
Majority Holders in the Initial Demand Notice and all of the securities
underlying such Purchase Options, including the Units, Common Stock, the
Warrants and the Common Stock underlying the Warrants (collectively, the
“Registrable Securities”). On such occasion, the Company will file a
registration statement or a post-effective amendment to the Registration
Statement covering the Registrable Securities within sixty days after receipt
of
the Initial Demand Notice and use its best efforts to have such registration
statement or post-effective amendment declared effective as soon as possible
thereafter. The demand for registration may be made at any time during a
period
of five years beginning on the Effective Date. The Company covenants and
agrees
to give written notice of its receipt of any Initial Demand Notice by any
Holder(s) to all other registered Holders of the Purchase Options and/or
the
Registrable Securities within ten days from the date of the receipt of any
such
Initial Demand Notice.
5.1.2
TERMS. The Company shall bear all fees and expenses attendant to registering
the
Registrable Securities, including the expenses of any legal counsel selected
by
the Holders to represent them in connection with the sale of the Registrable
Securities, but the Holders shall pay any and all underwriting commissions.
The
Company agrees to use its reasonable best efforts to qualify or register
the
Registrable Securities in such States as are reasonably requested by the
Majority Holder(s); provided, however, that in no event shall the Company
be
required to register the Registrable Securities in a State in which such
registration would cause (i) the Company to be obligated to qualify to do
business in such State, or would subject the Company to taxation as a foreign
corporation doing business in such jurisdiction or (ii) the principal
stockholders of the Company to be obligated to escrow their shares of capital
stock of the Company. The Company shall cause any registration statement
or
post-effective amendment filed pursuant to the demand rights granted under
Section 5.1.1 to remain effective for a period of nine consecutive months
from
the effective date of such registration statement or post-effective amendment.
5.2.1
GRANT OF RIGHT. In addition to the demand right of registration, the Holders
of
the Purchase Options shall have the right for a period of seven years commencing
on the Effective Date, to include the Registrable Securities as part of any
other registration of securities filed by the Company (other than in connection
with a transaction contemplated by Rule 145(a) promulgated under the Act
or
pursuant to Form S-8); provided, however, that if, in the written opinion
of the
Company’s managing underwriter or underwriters, if any, for such offering, the
inclusion of the Registrable Securities, when added to the securities being
registered by the Company or the selling stockholder(s), will exceed the
maximum
amount of the Company’s securities which can be marketed (i) at a price
reasonably related to their thenx current market value, and (ii) without
materially and adversely affecting the entire offering, then the Company
will
still be required to include the Registrable Securities, but may require
the
Holders to agree, in writing, to delay the sale of all or any portion of
the
Registrable Securities for a period of 90 days from the effective date of
the
offering, provided, further, that if the sale of any Registrable Securities
is
so delayed, then the number of securities to be sold by all stockholders
in such
public offering during such 90 day period shall be apportioned PRO RATA among
all such selling stockholders, including all holders of the Registrable
Securities, according to the total amount of securities of the Company owned
by
said selling stockholders, including all holders of the Registrable Securities.
3
5.2.2
TERMS. The Company shall bear all fees and expenses attendant to registering
the
Registrable Securities, including the expenses of any legal counsel selected
by
the Holders to represent them in connection with the sale of the Registrable
Securities but the Holders shall pay any and all underwriting commissions
related to the Registrable Securities. In the event of such a proposed
registration, the Company shall furnish the then Holders of outstanding
Registrable Securities with not less than fifteen days written notice prior
to
the proposed date of filing of such registration statement. Such notice to
the
Holders shall continue to be given for each applicable registration statement
filed (during the period in which the Purchase Option is exercisable) by
the
Company until such time as all of the Registrable Securities have been
registered and sold. The holders of the Registrable Securities shall exercise
the “piggy-back” rights provided for herein by giving written notice, within ten
days of the receipt of the Company’s notice of its intention to file a
registration statement. The Company shall cause any registration statement
filed
pursuant to the above “piggyback” rights to remain effective for at least nine
months from the date that the Holders of the Registrable Securities are first
given the opportunity to sell all of such securities.
5.3
DAMAGES. Should the registration or the effectiveness thereof required by
Sections 5.1 and 5.2 hereof be delayed by the Company or the Company otherwise
fails to comply with such provisions, the Company shall, in addition to any
other equitable or other relief available to the Holder(s), be liable for
any
and all incidental, special and consequential damages sustained by the
Holder(s), including, but not limited to, the loss of any profits that might
have been received by the holder upon the sale of shares of Common Stock
or
Warrants (and shares of Common Stock underlying the Warrants) underlying
this
Purchase Option.
5.4.1
INDEMNIFICATION. The Company shall indemnify the Holder(s) of the Registrable
Securities to be sold pursuant to any registration statement hereunder and
each
person, if any, who controls such Holders within the meaning of Section 15
of
the Act or Section 20(a) of the Securities Exchange Act of 1934, as amended
(“Exchange Act”), against all loss, claim, damage, expense or liability
(including all reasonable attorneys’ fees and other expenses reasonably incurred
in investigating, preparing or defending against litigation, commenced or
threatened, or any claim whatsoever whether arising out of any action between
the underwriter and the Company or between the underwriter and any third
party
or otherwise) to which any of them may become subject under the Act, the
Exchange Act or otherwise, arising from such registration statement but only
to
the same extent and with the same effect as the provisions pursuant to which
the
Company has agreed to indemnify the underwriters contained in Section 5 of
the
Underwriting Agreement between the Company, The Shemano Group and the other
underwriters named therein dated the Effective Date. The Holder(s) of the
Registrable Securities to be sold pursuant to such registration statement,
and
their successors and assigns, shall severally, and not jointly, indemnify
the
Company, its officers and directors and each person, if any, who controls
the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, against all loss, claim, damage, expense or liability (including
all reasonable attorneys’ fees and other expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to which
they may become subject under the Act, the Exchange Act or otherwise, arising
from information furnished by or on behalf of such Holders, or their successors
or assigns, in writing, for specific inclusion in such registration statement
to
the same extent and with the same effect as the provisions contained in Section
5 of the Underwriting Agreement pursuant to which the underwriters have agreed
to indemnify the Company.
4
5.4.2
EXERCISE OF PURCHASE OPTIONS. Nothing contained in this Purchase Option shall
be
construed as requiring the Holder(s) to exercise their Purchase Options or
Warrants underlying such Purchase Options prior to or after the initial filing
of any registration statement or the effectiveness thereof.
5.4.3
DOCUMENTS DELIVERED TO HOLDERS. The Company shall furnish The Shemano Group,
as
representative of the Holders participating in any of the foregoing offerings,
a
signed counterpart, addressed to the participating Holders, of (i) an opinion
of
counsel to the Company, dated the effective date of such registration statement
(and, if such registration includes an underwritten public offering, an opinion
dated the date of the closing under any underwriting agreement related thereto),
and (ii) a “cold comfort” letter dated the effective date of such registration
statement (and, if such registration includes an underwritten public offering,
a
letter dated the date of the closing under the underwriting agreement) signed
by
the independent public accountants who have issued a report on the Company’s
financial statements included in such registration statement, in each case
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of such
accountants’ letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer’s counsel
and in accountants’ letters delivered to underwriters in underwritten public
offerings of securities. The Company shall also deliver promptly to The Shemano
Group, as representative of the Holders participating in the offering, the
correspondence and memoranda described below and copies of all correspondence
between the Commission and the Company, its counsel or auditors and all
memoranda relating to discussions with the Commission or its staff with respect
to the registration statement and permit The Shemano Group, as representative
of
the Holders, to do such investigation, upon reasonable advance notice, with
respect to information contained in or omitted from the registration statement
as it deems reasonably necessary to comply with applicable securities laws
or
rules of the National Association of Securities Dealers, Inc. (“NASD”). Such
investigation shall include access to books, records and properties and
opportunities to discuss the business of the Company with its officers and
independent auditors, all to such reasonable extent and at such reasonable
times
and as often as The Shemano Group, as representative of the Holders, shall
reasonably request. The Company shall not be required to disclose any
confidential information or other records to The Shemano Group, as
representative of the Holders, or to any other person, until and unless such
persons shall have entered into reasonable confidentiality agreements (in
form
and substance reasonably satisfactory to the Company), with the Company with
respect thereto.
5.4.4
UNDERWRITING AGREEMENT. The Company shall enter into an underwriting agreement
with the managing underwriter(s), if any, selected by any Holders whose
Registrable Securities are being registered pursuant to this Section 5, which
managing underwriter shall be reasonably acceptable to the Company. Such
agreement shall be reasonably satisfactory in form and substance to the Company,
each Holder and such managing underwriters, and shall contain such
representations, warranties and covenants by the Company and such other terms
as
are customarily contained in agreements of that type used by the managing
underwriter. The Holders shall be parties to any underwriting agreement relating
to an underwritten sale of their Registrable Securities and may, at their
option, require that any or all the representations, warranties and covenants
of
the Company to or for the benefit of such underwriters shall also be made
to and
for the benefit of such Holders. Such Holders shall not be required to make
any
representations or warranties to or agreements with the Company or the
underwriters except as they may relate to such Holders and their intended
methods of distribution. Such Holders, however, shall agree to such covenants
and indemnification and contribution obligations for selling stockholders
as are
customarily contained in agreements of that type used by the managing
underwriter. Further, such Holders shall execute appropriate custody agreements
and otherwise cooperate fully in the preparation of the registration statement
and other documents relating to any offering in which they include securities
pursuant to this Section 5. Each Holder shall also furnish to the Company
such
information regarding itself, the Registrable Securities held by it, and
the
intended method of disposition of such securities as shall be reasonably
required to effect the registration of the Registrable Securities.
5
5.4.5
RULE 144 SALE. Notwithstanding anything contained in this Section 5 to the
contrary, the Company shall have no obligation pursuant to Sections 5.1 or
5.2
for the registration of Registrable Securities held by any Holder (i) where
such
Holder would then be entitled to sell under Rule 144 within any three-month
period (or such other period prescribed under Rule 144 as may be provided
by
amendment thereof) all of the Registrable Securities then held by such Holder,
and (ii) where the number of Registrable Securities held by such Holder is
within the volume limitations under paragraph (e) of Rule 144 (calculated
as if
such Holder were an affiliate within the meaning of Rule 144).
5.4.6
SUPPLEMENTAL PROSPECTUS. Each Holder agrees, that upon receipt of any notice
from the Company of the happening of any event as a result of which the
prospectus included in the Registration Statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein
not
misleading in light of the circumstances then existing, such Holder will
immediately discontinue disposition of Registrable Securities pursuant to
the
Registration Statement covering such Registrable Securities until such Xxxxxx’s
receipt of the copies of a supplemental or amended prospectus, and, if so
desired by the Company, such Holder shall deliver to the Company (at the
expense
of the Company) or destroy (and deliver to the Company a certificate of such
destruction) all copies, other than permanent file copies then in such Holder’s
possession, of the prospectus covering such Registrable Securities current
at
the time of receipt of such notice.
6.
ADJUSTMENTS.
6.1
ADJUSTMENTS TO EXERCISE PRICE AND NUMBER OF SECURITIES. The Exercise Price
and
the number of Units underlying the 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. 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 $[ ] per whole Unit (the Warrant
underlying the Units is exercisable for $[ ] per share), upon effectiveness
of
the dividend, this Purchase Option will be adjusted to allow for the purchase
of
one Unit at $[ ] per Unit, each Unit entitling the holder to receive two
shares
of Common Stock and four Warrants (each Warrant exercisable for $[ ] 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.
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
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.
6.3
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.
6.4
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 the 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 the Purchase Options or the Warrants underlying
the
Purchase Option, such number of shares of Common Stock or other securities,
properties or rights as shall be issuable upon the exercise thereof. The
Company
covenants and agrees that, upon exercise of the Purchase Options 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 the Purchase Options 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 the Purchase
Options shall be outstanding, the Company shall use its best efforts to cause
all (i) Units and shares of Common Stock issuable upon exercise of the Purchase
Options, (iii) Warrants issuable upon exercise of the Purchase Options and
(iv)
shares of Common Stock issuable upon exercise of the Warrants included in
the
Units issuable upon exercise of the 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.
7
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 the 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, or (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, or (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.
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 method of calculating
same and shall be certified as being true and accurate by the Company’s
President and Chief Financial 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 the 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
Xxxxxx Media Corporation
0000
Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxx
Xxxxxxx, XX 00000
Attn:
Xxxxx Xxxxxxxx, Chairman
|
9.
MISCELLANEOUS.
8
9.1
AMENDMENTS. The Company and The Shemano Group 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 and The Shemano Group may deem necessary or desirable
and that the Company and The Shemano Group 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.
10.
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.
10.1
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.
10.2
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 shall 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,
which jurisdiction shall be exclusive. The Company hereby waives any objection
to such exclusive jurisdiction and that such courts represent an inconvenient
forum. 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.
10.3
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, non-compliance or non-fulfillment.
10.4
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
10.5
EXCHANGE AGREEMENT. As a condition of the Holder’s receipt and acceptance of
this Purchase Option, Xxxxxx agrees that, at any time prior to the complete
exercise of this Purchase Option by Holder, if the Company and The Shemano
Group
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.
10.6
UNDERLYING WARRANTS. At any time after exercise by the Holder of this Purchase
Option, the Holder may exchange his Warrants (with a $7.50 exercise price)
for
Public Warrants (with a $5.00 exercise price) upon payment to the Company
of the
difference between the exercise price of his Warrant and the exercise price
of
the Public Warrants.
IN
WITNESS WHEREOF, the Company has caused this Purchase Option to be signed
by its
duly authorized officer as of the ____ day of __________, 2005.
| SANTA XXXXXX MEDIA CORPORATION | ||
| |
|
|
| By: | ||
|
Name: Xxxxx Xxxxxxxx
Title: Chairman of the Board
|
||
Form
to
be used to exercise Purchase Option:
0000
Xxxxxx
Xxxxxxxxx, Xxxxx
Los
Angeles,
CA 90069
The
undersigned hereby elects irrevocably to exercise all or a portion of the
within
Purchase Option and to purchase ____ Units of Santa Xxxxxx 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.
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.
| Signature | |
|
Signature
Guaranteed
|
10
INSTRUCTIONS
FOR REGISTRATION OF SECURITIES
(Print
in
Block
Letters)
NOTICE:
THE SIGNATURE TO THIS FORM MUST CORRESPOND WITH THE NAME AS WRITTEN UPON
THE
FACE OF THE WITHIN PURCHASE OPTION IN EVERY PARTICULAR WITHOUT ALTERATION
OR
ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A BANK, OTHER
THAN A SAVINGS BANK, OR BY A TRUST COMPANY OR BY A FIRM HAVING MEMBERSHIP
ON A
REGISTERED NATIONAL SECURITIES EXCHANGE.
Form
to
be used to assign Purchase Option:
(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 Xxxxxx 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.
| Signature | |
|
Signature
Guaranteed
|
NOTICE:
THE SIGNATURE TO THIS FORM MUST CORRESPOND WITH THE NAME AS WRITTEN UPON
THE
FACE OF THE WITHIN PURCHASE OPTION IN EVERY PARTICULAR WITHOUT ALTERATION
OR
ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A BANK, OTHER
THAN A SAVINGS BANK, OR BY A TRUST COMPANY OR BY A FIRM HAVING MEMBERSHIP
ON A
REGISTERED NATIONAL SECURITIES EXCHANGE.
11
