NEW FRONTIER MEDIA, INC.
and
CORPORATE STOCK TRANSFER, INC.
Warrant Agent
WARRANT AGREEMENT
Dated as of __________, 1997
WARRANT AGREEMENT - Page 1
TABLE OF CONTENTS
Section Page
1. Appointment of Warrant Agent.................................... 2
2. Form of Warrant................................................. 2
3. Countersignature and Registration............................... 2
4. Transfers and Exchanges......................................... 2
5. Exercise of Warrants............................................ 3
6. Mutilated or Missing Warrants................................... 3
7. Reservation and Registration of Common Stock.................... 4
8. Warrant Price; Adjustments...................................... 4
9. No Fractional Interests......................................... 8
10. Notice to Warrantholders........................................ 9
11. Disposition of Proceeds on Exercise of Warrants................. 10
12. Redemption of Warrants.......................................... 10
13. Merger or Consolidation or Change of Name of Warrant Agent...... 11
14. Duties of Warrant Agent......................................... 11
15. Change of Warrant Agent......................................... 13
16. Identity of Transfer Agent...................................... 13
17. Notices......................................................... 13
18. Supplements and Amendments...................................... 14
19. Successors...................................................... 14
20. Merger or Consolidation of the Company.......................... 14
21. Texas Contract.................................................. 14
22. Benefits of This Agreement...................................... 14
23. Counterparts.................................................... 14
WARRANT AGREEMENT, dated as of __________, 1997, between New Frontier
Media, Inc., a Colorado corporation (hereinafter called the "Company"), and
Corporate Stock Transfer, Inc., as warrant agent (hereinafter called the
"Warrant Agent");
WHEREAS, the Company proposes to issue 1,500,000 Redeemable Common Stock
Purchase Warrants (hereinafter called the "Warrants"), entitling the holders
thereof to purchase one share of Common Stock, $.0001 par value (hereinafter
called the "Common Stock") for each Warrant, in connection with the proposed
issuance by the Company of 1,500,000 Units, each Unit consisting of one share
of Common Stock and one Warrant; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing so to act, in connection with the
registration, transfer, exchange and exercise of Warrants;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, 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 in accordance with the
instructions hereinafter in this Agreement set forth, and the Warrant Agent
hereby accepts such appointment.
2. Form of Warrant. The text of the Warrant and of the form of election
to purchase shares to be printed on the reverse thereof shall be
substantially as set forth in Exhibit A attached hereto. The Warrant Price to
purchase one share of Common Stock shall be as provided and defined in ss.8.
The Warrants shall be executed on behalf of the Company by the manual or
facsimile signature of the present or any future Chairman of the Board or
President or Vice President of the Company, under its corporate seal, affixed
or in facsimile, attested by the manual or facsimile signature of the present
or any future Secretary or Assistant Secretary of the Company.
Warrants shall be dated as of the date of issuance thereof by the
Warrant Agent either upon initial issuance or upon transfer or exchange.
3. Countersignature and Registration. The Warrant Agent shall maintain
books for the transfer and registration of the Warrants. The Warrants shall
be countersigned by the Warrant Agent (or by any successor to the Warrant
Agent then acting as warrant agent under this Agreement) and shall not be
valid for any purpose unless so countersigned. Warrants may be so
countersigned, however, by the Warrant Agent (or by its successor as warrant
agent) and be delivered by the Warrant Agent, notwithstanding that the
persons whose manual or facsimile signatures appear thereon as proper
officers of the Company shall have ceased to be such officers at the time of
such countersignature or delivery.
4. Transfers and Exchanges. The Warrant Agent shall transfer, from time
to time after the sale of the Units, any outstanding Warrants upon the books
to be maintained by the Warrant Agent for that purpose, upon surrender
thereof for transfer properly endorsed or accompanied by appropriate
instructions for transfer. Upon any such transfer, a new Warrant shall be
issued to the transferee and the surrendered Warrant shall be cancelled by
the Warrant Agent. Warrants so cancelled shall be delivered by the Warrant
Agent to the Company from time to time. The Warrants may be exchanged at the
option of the holder thereof, when surrendered at the office of the Warrant
Agent, for another Warrant, or other Warrants of different denominations, of
like tenor and representing in the aggregate the right to purchase a like
number of shares of Common Stock. The Warrant Agent is hereby irrevocably
authorized to countersign in accordance with ss.3 of this Agreement the new
Warrants required pursuant to the provisions of this Section, 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.
5. Exercise of Warrants. Subject to the provisions of this Agreement,
each registered holder of Warrants shall have the right, which may be
exercised as in such Warrants expressed, to purchase from the Company (and
the Company shall issue and sell to such registered holder of Warrants) the
number of fully paid and nonassessable shares of Common Stock specified in
such Warrants, upon surrender of such Warrants to the Company at the office
of the Warrant Agent, with the form of election to purchase on the reverse
thereof duly filled in and signed, and upon payment to the Warrant Agent for
the account of the Company of the Warrant Price for the number of shares of
Common Stock in respect of which such Warrants are then exercised. Payment of
such Warrant Price may be made in
cash, or by certified or official bank check, payable in United States
dollars, to the order of the Warrant Agent. No adjustment shall be made for
any dividends on any shares of Common Stock issuable upon exercise of a
Warrant. Upon such surrender of Warrants, and payment of the Warrant Price as
aforesaid, the Company shall issue and cause to be delivered with all
reasonable dispatch to or upon the written order of the registered holder of
such Warrants and in such name or names as such registered holder may
designate, a certificate or certificates for the number of full shares of
Common Stock so purchased upon the exercise of such Warrants. Such
certificate or certificates shall be deemed to have been issued and any
person so designated to be named therein shall be deemed to have become a
holder of record of such shares as of the date of the surrender of such
Warrants and payment of the Warrant Price as aforesaid; provided, however,
that if, at the date of surrender of such Warrants and payment of the Warrant
Price, the transfer books for the Common Stock or other class of stock
purchasable upon the exercise of such Warrants shall be closed, the
certificates for the shares in respect of which such Warrants are then
exercised shall be issuable as of the date on which such books shall next be
opened and until such date the Company shall be under no duty to deliver any
certificate for such shares; provided further, however, that the transfer
books aforesaid, unless otherwise required by law, shall not be closed at any
one time for a period longer than 20 days. The rights of purchase represented
by the Warrants shall be exercisable, at the election of the registered
holders thereof, either as an entirety or from time to time for part only of
the shares specified therein, and in the event that any Warrant is exercised
in respect of less than all of the shares specified therein, a new Warrant or
Warrants will be issued for the remaining number of shares specified in the
Warrant so surrendered, and the Warrant Agent is hereby irrevocably
authorized to countersign and to deliver the required new Warrants pursuant
to the provisions of this Section and of ss.3 of this Agreement 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. Mutilated or Missing Warrants. In case any of the Warrants shall be
mutilated, lost, stolen or destroyed, the Company will issue and the Warrant
Agent will countersign and deliver in exchange and substitution for and upon
cancellation of the mutilated Warrant, or in lieu of and substitution for the
Warrant lost, stolen or destroyed, a new Warrant of like tenor and
representing an equivalent right or interest; but only upon receipt of
evidence satisfactory to the Company and the Warrant Agent of such loss,
theft or destruction of such Warrant and indemnity, if requested, also
satisfactory to them. Applicants for such substitute Warrants shall also
comply with such other reasonable regulations and pay such other reasonable
charges as the Company or the Warrant Agent may prescribe.
7. Reservation and Registration of Common Stock.
A. There have been reserved, and the Company shall at all times keep
reserved, out of the authorized and unissued shares of Common Stock, a number
of shares sufficient to provide for the exercise of the rights of purchase
represented by the Warrants, and the Transfer Agent for the Common Stock and
every subsequent Transfer Agent for any shares of the Company's capital stock
issuable upon the exercise of any of the rights of purchase aforesaid are
hereby irrevocably authorized and directed at all times to reserve such
number of authorized and unissued shares as shall be requisite for such
purpose. The Company will keep a copy of this Agreement on file with the
Transfer Agent for the Common Stock and with every subsequent Transfer Agent
for any shares of the Company's capital stock issuable upon the exercise of
the rights of purchase
represented by the Warrants. The Warrant Agent is hereby irrevocably
authorized to requisition from time to time such Transfer Agent for stock
certificates required to honor outstanding Warrants. The Company will supply
such Transfer Agents with duly executed stock certificates for such purpose
and will itself provide or otherwise make available any cash which may be
issuable as provided in ss.9 of this Agreement. All Warrants surrendered in
the exercise of the rights thereby evidenced shall be cancelled by the
Warrant Agent and shall thereafter be delivered to the Company, and such
cancelled Warrants shall constitute sufficient evidence of the number of
shares of stock which have been issued upon the exercise of such Warrants.
B. The Company represents that it has registered under the Securities
Act of 1933 the shares of Common Stock issuable upon exercise of the Warrants
and will use its best efforts to maintain the effectiveness of such
registration by post-effective amendment during the entire period in which
the Warrants are exercisable, and that it will use its best efforts to
qualify such Common Stock for sale under the securities laws of such states
of the United States as may be necessary to permit the exercise of the
Warrants in the states in which the Units are initially qualified and to
maintain such qualifications during the entire period in which the Warrants
are exercisable.
8. Warrant Price; Adjustments.
A. The price at which Common Stock shall be purchasable upon exercise of
Warrants at any time after the Common Stock and Warrants become separately
tradable until __________, 2002 (hereinafter called the "Warrant Price")
shall be $6.50 per share of Common Stock or, if adjusted as provided in this
Section, shall be such price as so adjusted.
B. The Warrant Price shall be subject to adjustment from time to time as
follows:
(1) Except as hereinafter provided, in case the Company shall
at any time or from time to time after the date hereof issue any
additional shares of Common Stock for a consideration per share less
than the Warrant Price in effect immediately prior to the issuance of
such additional shares, or without consideration, then, upon each such
issuance, the Warrant Price in effect immediately prior to the issuance
of such additional shares shall forthwith be reduced to a price
(calculated to the nearest full cent) determined by dividing:
(a) An amount equal to (i) the total number of shares
of Common Stock outstanding immediately prior to such issuance
multiplied by the Warrant Price in effect immediately prior to
such issuance, plus (ii) the consideration, if any, received
by the Company upon such issuance, by
(b) The total number of shares of Common Stock outstanding
immediately after the issuance of such additional shares.
(2) The Company shall not be required to make any such
adjustment of the Warrant Price in accordance with the foregoing if the
amount of such adjustment shall be less than $.25 (adjustment will be
made when cumulative adjustment equals or exceeds $0.25) but in such
case the Company shall maintain a cumulative record of the Warrant
Price as it would have been in the absence of this provision (the
"Constructive Warrant Price"), and for the purpose of computing a new
Warrant Price after the next subsequent issuance of additional shares
(but not for the purpose of determining whether an adjustment thereof
is required under the terms of this paragraph) the constructive Warrant
Price shall be deemed to be the Warrant Price in effect immediately
prior to such issuance.
(3) For the purpose of this ss.8 the following provisions shall also be
applicable:
(a) In the case of the issuance of additional shares
of Common Stock for cash, the consideration received by the
Company therefor shall be deemed to be the net cash proceeds
received by the Company for such shares before deducting any
commissions or other expenses paid or incurred by the Company
for any underwriting of, or otherwise in connection with, the
issuance of such shares.
(b) In case of the issuance (otherwise than upon
conversion or exchange of shares of Common Stock) of
additional shares of Common Stock for a consideration other
than cash or a consideration a part of which shall be other
than cash, the amount of the consideration other than cash
received by the Company for such shares shall be deemed to be
the value of such consideration as determined in good faith by
the Board of Directors of the Company, as of the date of the
adoption of the resolution of said Board, providing for the
issuance of such shares for consideration other than cash or
for consideration a part of which shall be other than cash,
such fair value to include goodwill and other intangibles to
the extent determined in good faith by the Board.
(c) In case of the issuance by the Company after the
date hereof of any security (other than the Warrants) that is
convertible into shares of Common Stock or of any warrants,
rights or options to purchase shares of Common Stock (except
the options and warrants referred to in subsection H of this
ss.8), (i) the Company shall be deemed (as provided in
subparagraph (e) below) to have issued the maximum number of
shares of Common Stock deliverable upon the exercise of such
conversion privileges or warrants, rights or options, and (ii)
the consideration therefor shall be deemed to be the
consideration received by the Company for such convertible
securities or for such warrants, rights or options, as the
case may be, before deducting therefrom any expenses or
commissions incurred or paid by the Company for any
underwriting of, or otherwise in connection with, the issuance
of such convertible security or warrants, rights or options,
plus (A) the minimum consideration or adjustment payment to be
received by the Company in connection with such conversion, or
(B) the minimum price at which shares of Common Stock are to
be delivered upon exercise of such warrants, rights or options
or, if no minimum price is specified and such shares are to be
delivered at an option price related to the market value of
the subject shares, an option price bearing the same relation
to the market value of the subject shares at the time such
warrants, rights or options were granted; provided that as to
such options such further adjustment as shall be necessary on
the basis of the actual option price at the time of exercise
shall be made at such time if the actual option price is less
than the aforesaid assumed option price. No further adjustment
of the Warrant Price shall be made as a result of the actual
issuance of the shares of Common Stock referred to in this
subparagraph (c). On the expiration of such warrants, rights
or options, or the termination of such right to convert, the
Warrant Price shall be readjusted to such Warrant Price as
would have pertained had the adjustments made upon the
issuance of such warrants, rights, options or convertible
securities been made upon the basis of the delivery of only
the number of shares of Common Stock actually delivered upon
the exercise of such warrants, rights or options or upon the
conversion of such securities.
(d) For the purposes hereof, any additional shares of
Common Stock issued as a stock dividend shall be deemed to
have been issued for no consideration.
(e) The number of shares of Common Stock at any time
outstanding shall include the aggregate number of shares
deliverable in respect of the convertible securities, rights
and options referred to in subparagraph (c) of this paragraph;
provided that with respect to shares referred to in clause (i)
of subparagraph (c), to the extent that such warrants,
options, rights or conversion privileges are not exercised,
such shares shall be deemed to be outstanding only until the
expiration dates of the warrants, rights, options or
conversion privileges or the prior cancellation thereof.
C. In case the Company shall at any time subdivide its outstanding
shares of Common Stock into a greater number of shares, the Warrant Price in
effect immediately prior to such subdivision shall be proportionately reduced
and, in case the outstanding shares of the Common Stock of the Company shall be
combined into a smaller number of shares, the Warrant Price in effect
immediately prior to such combination shall be proportionately increased.
D . Upon each adjustment of the Warrant Price pursuant to the provisions
of this ss.8, the number of shares issuable upon the exercise of each Warrant
shall be adjusted by multiplying the Warrant Price in effect prior to the
adjustment by the number of shares of Common Stock covered by the Warrant and
dividing the product so obtained by the adjusted Warrant Price.
E. Except upon consolidation or reclassification of the shares of Common
Stock of the Company as provided for in subsection (C) hereof and except for
readjustment of the Warrant Price upon expiration of warrants, rights or
options as provided for in subparagraph (c) of paragraph 3 of subsection (B)
hereof, the Warrant Price in effect at any time may not be adjusted upward or
increased in any manner whatsoever.
F. Irrespective of any adjustment or change in the Warrant Price or the
number of shares of Common Stock actually purchasable under the several
Warrants, the Warrants theretofore and thereafter issued may continue to
express the Warrant Price per share and the number of shares purchasable
thereunder as the Warrant Price per share and the number of shares purchasable
were expressed in the Warrants when initially issued.
G. If any capital reorganization or reclassification of the capital
stock of the Company (other than a distribution of stock in accordance with
ss.10(B)) or consolidation or merger of the Company with another corporation
or the sale of all or substantially all of its assets to another corporation
shall be effected, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful and adequate provision
shall be made whereby the holder of each Warrant then outstanding shall
thereafter have the right to purchase and receive upon the basis and upon the
terms and conditions specified herein and in the Warrants and in lieu of the
shares of the Common Stock of the Company immediately theretofore purchasable
and receivable upon the exercise of the rights represented by each such
Warrant, such shares of stock, securities or assets as may be issued or
payable with respect to or in exchange for a number of outstanding shares of
such Common Stock equal to the number of shares of such Common stock
immediately theretofore purchasable and receivable upon the exercise of the
rights represented by each such Warrant had such reorganization,
reclassification, consolidation, merger or sale not taken place, and in any
such case appropriate provisions shall be made with respect to the rights and
interest of the holder of each Warrant then outstanding to the end that the
provisions thereof (including without limitation provisions for adjustment of
the Warrant Price and of the number of shares purchasable upon the exercise of
each Warrant then outstanding) shall thereafter be applicable as nearly as may
be in relation to any shares of stock, securities or assets thereafter
deliverable upon the exercise of each Warrant.
H . No adjustment of the Warrant Price shall be made in connection with
the issuance or sale of shares of Common Stock issuable pursuant to currently
outstanding options and warrants granted to officers, directors, employees,
advisory directors, or affiliates of the Company.
I. Whenever the Warrant Price is adjusted as herein provided, the
Company shall (a) forthwith file with the Warrant Agent a certificate signed
by the Chairman of the Board or the President or a Vice President of the
Company and by the Treasurer or an Assistant Treasurer or the Secretary or an
Assistant Secretary of the Company, showing in detail the facts requiring such
adjustment and the Warrant Price and the number of shares of Common Stock
purchasable upon exercise of the Warrants after such adjustment and (b) cause
a notice stating that such adjustment has been effected and stating the
adjusted Warrant Price and the number of shares of Common Stock purchasable
upon exercise of the Warrants to be published at least once a week for two
consecutive weeks in a newspaper of general circulation in Denver, Colorado and
in New York, New York. The Company, at its option, may cause a copy of such
notice to be sent by first class mail, postage prepaid, to each registered
holder of Warrants at his address appearing on the Warrant register. The
Warrant Agent shall have no duty with respect to any such certificate filed
with it except to keep the same on file and available for inspection by
holders of Warrants during reasonable business hours. The Warrant Agent shall
not at any time be under any duty or responsibility to any holder of a Warrant
to determine whether any facts exist which may require any adjustment of the
Warrant Price, or with respect to the nature or extent of any adjustment of
the Warrant Price when made, or with respect to the method employed in making
such adjustment.
J. The Company may retain a firm of independent certified public
accountants of recognized standing (which may be the firm that regularly
examines the financial statements of the Company) selected by the Board of
Directors of the Company or the Executive Committee of said Board and approved
by the Warrant Agent, to make any computation required under this ss.8, and a
certificate signed by such firm shall be conclusive evidence of the correctness
of any computation made under this ss.8.
K. In case at any time conditions shall arise by reason of action taken
by the Company which, in the opinion of the Board of Directors of the Company,
are not adequately covered by the other provisions of this Agreement and which
might materially and adversely affect the rights of the holders of the Warrants,
or in case at any time any such conditions are expected to arise by reason of
any action contemplated by the Company, the Board of Directors of the Company
shall appoint a firm of independent certified public accountants of recognized
standing (which may be the firm that regularly examines the financial statements
of the Company), who shall give their opinion as to the adjustment, if any (not
inconsistent with the standards established in this ss.8), of the Warrant Price
and the number of shares of Common Stock purchasable pursuant hereto (including,
if necessary, any adjustment as to the property which may be purchasable in lieu
thereof upon exercise of the Warrants) which is, or would be, required to
preserve without dilution the rights of the holders of the Warrants. The Board
of Directors of the Company shall make the adjustment recommended forthwith upon
the receipt of such opinion or the taking of any such action contemplated, as
the case may be; provided, however, that no adjustment of the Warrant Price
shall be made which in the opinion of the accountant or firm of accountants
giving the aforesaid opinion would result in an increase of the Warrant Price to
more than the Warrant Price then in effect except as otherwise provided in
subsection E of this ss.8.
9. No Fractional Interests. The Company shall not be required to issue
fractions of shares of Common Stock on the exercise of Warrants. If any fraction
of a share of Common Stock would, except for the provisions of this Section, be
issuable on the exercise of any Warrant (or specified portions thereof), the
Company shall purchase such fraction for an amount in cash equal to the current
value of such fraction (a) computed, if the Common Stock shall be listed or
admitted to unlisted trading privileges on any national or regional securities
exchange, on the basis of the last reported sale price of the Common Stock on
such exchange on the last business day prior to the date of exercise upon which
such a sale shall have been effected (or, if the Common Stock shall be listed or
admitted to unlisted trading privileges on more than one such exchange, on the
basis of such price on the exchange designated from time to time for such
purpose by the Board of Directors of the Company) or (b) computed, if the Common
Stock shall not be listed or admitted to unlisted trading privileges, on the
basis of the average of the high and low bid prices of the Common Stock in the
Nasdaq Stock Market, on the last business day prior to the date of exercise.
10. Notice to Warrantholders.
A. Nothing contained in this Agreement or in any of the Warrants shall
be construed as conferring upon the holders thereof the right to vote or to
consent or to receive notice as stockholders in respect of the meetings of
stockholders for the election of directors of the Company or any other matters,
or any rights whatsoever as stockholders of the Company; provided, however, that
in the event that a meeting of stockholders shall be called to consider and take
action on a proposal for the voluntary dissolution of the Company, other than in
connection with a consolidation, merger or sale of all, or substantially all, of
its property, assets, business and goodwill as an entirety, then and in that
event the Company shall cause a notice thereof to be published at least once a
week for two consecutive weeks in a newspaper of general circulation in Denver,
Colorado and New York, New York, such publication to be completed at least 20
days prior to the date fixed as a record date or the date of closing the
transfer
books for the determination of the stock holders entitled to vote at such
meeting. The Company shall also cause a copy of such notice to be sent by
first class mail, postage prepaid, at least 20 days prior to said date fixed
as a record date or said date of closing the transfer books, to each
registered holder of Warrants at his address appearing on the Warrant
register; but failure to mail or receive such notice or any defect therein or
in the mailing thereof shall not affect the validity of any action taken in
connection with such voluntary dissolution. If such notice shall have been so
given and if such a voluntary dissolution shall be authorized at such meeting
or any adjournment thereof, then for and after the date on which such
voluntary dissolution shall have been duly authorized by the stockholders, the
purchase rights represented by the Warrants and other rights with respect
thereto shall cease and terminate.
B. If the Company shall make any distribution on, or to holders of, its
Common Stock (or other property which may be purchasable in lieu thereof upon
the exercise of Warrants) of any property (other than a cash dividend), the
Company shall cause a notice of its intention to make such distribution to be
published at least once a week for two consecutive weeks in a newspaper of
general circulation in Denver, Colorado and New York, New York, such publication
to be completed at least 20 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 receive such distribution. The Company shall also
cause a copy of such notice to be sent by first class mail, postage prepaid,
at least 20 days prior to said date fixed as a record date or said date of
closing the transfer books, to each registered holder of Warrants at his
address appearing on the Warrant register; but failure to mail or to receive
such notice or any defect therein or in the mailing thereof shall not affect
the validity of any action taken in connection with such distribution.
11. Disposition of Proceeds on Exercise of Warrants.
A. The Warrant Agent shall account promptly to the Company with respect
to Warrants exercised and concurrently pay to the Company all monies received
by the Warrant Agent for the purchase of shares of the Company's stock through
the exercise of such Warrants.
B. The Warrant Agent shall keep copies of this Agreement available for
inspection by holders of Warrants during normal business hours at its
principal office.
12. Redemption of Warrants.
A. At any time on or after __________, 1998, the Company may, at its
option, redeem some or all of the outstanding Warrants at $0.05 per Warrant,
upon thirty (30) days prior written notice, if the closing sale price of the
Common Stock on the Nasdaq SmallCap Market or any other national securities
exchange, has equaled or exceeded $8.00 for ten (10) consecutive trading days
within the 10 day period immediately preceding the date notice of redemption
is given (the "Redemption Price"). In the event of an adjustment in the
Warrant Price pursuant to ss.8, the Redemption Price shall also be
automatically adjusted.
B. The election of the Company to redeem some or all of the Warrants shall
be evidenced by a resolution of the Board of Directors of the Company.
C. Warrants may be exercised at any time on or before the date fixed for
redemption (the "Redemption Date").
D. Notice of redemption shall be given by first class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each holder of Warrants, at his address appearing in the Warrant
register.
All notices of redemption shall state:
(1) The Redemption Date;
(2) That on the Redemption Date the Redemption Price will become due
and payable upon each Warrant;
(3) The place where such Warrants are to be surrendered for redemption
and payment of the Redemption Price; and
(4) The current Warrant Price of the Warrants, the place or places
where such Warrants may be surrendered for exercise, and the time at which
the right to exercise the Warrants will terminate in accordance with this
Agreement.
E. Notice of redemption of Warrants at the election of the Company shall
be given by the Company or, at the Company's request, by the Warrant Agent in
the name and at the expense of the Company.
F. Prior to any Redemption Date, the Company shall deposit with the
Warrant Agent an amount of money sufficient to pay the Redemption Price of all
the Warrants which are to be redeemed on that date. If any Warrant is
exercised pursuant to ss.5, any money so deposited with the Warrant Agent for
the redemption of such Warrant shall be paid to the Company.
G. Notice of redemption having been given as aforesaid, the Warrants so
to be redeemed shall, on the Redemption Date, become redeemable at the
Redemption Price therein specified and on such date (unless the Company shall
default in the payment of the Redemption Price), such Warrants shall cease to
be exercisable and thereafter represent only the right to receive the
Redemption Price. Upon surrender of such Warrants for redemption in accordance
with said notice, such Warrants shall be redeemed by the Company for the
Redemption Price.
13. Merger or Consolidation or Change of Name 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, or any corporation succeeding to the
corporate trust business of the Warrant Agent, shall be the successor to the
Warrant Agent hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor warrant agent
under the provisions of ss.15 of this Agreement. In case at the time such
successor to the Warrant Agent shall succeed to the agency created by this
Agreement and at such time any of the Warrants shall have been countersigned
but not delivered, any such successor to the Warrant Agent may adopt the
countersignature of the Warrant Agent and deliver such Warrants so
countersigned; and in case at the time any of the Warrants shall not have been
countersigned, any successor to the Warrant Agent may countersign such
Warrants either in the name of the predecessor Warrant Agent or in the name of
the successor warrant agent; and in all such cases such Warrants shall have
the full force provided in the Warrant
and in this Agreement.
In case at any time the name of the Warrant Agent shall be changed and at
such time any of the Warrants shall have been countersigned but not delivered,
the Warrant Agent may adopt the countersignature under its prior name and
deliver Warrants so countersigned; and in case at that time any of the
Warrants shall not have been countersigned, the Warrant Agent may countersign
such Warrants whether in its prior name or in its changed name; and in all
such cases such Warrants shall have the full force provided in the Warrants
and in this Agreement.
14. Duties of Warrant Agent. The Warrant Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Company and the holders of Warrants, by their acceptance
thereof, shall be bound:
A. The statements contained herein and in the Warrants shall be taken as
statements of the Company, and the Warrant Agent assumes no responsibility for
the correctness of any of the same except such as describe the Warrant Agent
or action taken or to be taken by it. The Warrant Agent assumes no
responsibility with respect to the distribution of the Warrants except as
herein otherwise provided.
B. The Warrant Agent shall not be responsible for any failure of the
Company to comply with any of the covenants contained in this Agreement or in
the Warrants to be complied with by the Company.
C. The Warrant Agent may execute and exercise any of the rights or powers
hereby vested in it to perform any duty hereunder either itself or by or
through its attorneys, agents or employees.
D. The Warrant Agent may consult at any time with counsel satisfactory to
it (who may be counsel for the Company) and the Warrant Agent shall incur no
liability or responsibility to the Company or to any holder of any Warrant in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in accordance with the opinion or the advice of such counsel, provided the
Warrant Agent shall have exercised reasonable care in the selection and
continued employment of such counsel.
E. The Warrant Agent shall incur no liability or responsibility to the
Company or to any holder of any Warrant for any action taken in reliance on
any notice, resolution, waiver, consent, order, certificate, or other paper,
document or instrument believed by it to be genuine and to have been signed,
sent or presented by the proper party or parties.
F. The Company agrees to pay to the Warrant Agent reasonable compensation
for all services rendered by the Warrant Agent in the execution of this
Agreement, to reimburse the Warrant Agent for all expenses, taxes and
governmental charges and other charges of any kind and nature incurred by the
Warrant Agent in the execution of this Agreement and 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 or bad faith.
G. The Warrant Agent shall be under no obligation to institute any
action, suit or legal proceeding or to take any other action likely to involve
expense unless the Company or one or more registered holders of Warrants shall
furnish the Warrant Agent with reasonable security and indemnity for any cost
and expense which may be incurred, but this provision shall not affect the
power of the Warrant Agent to take such action as the Warrant Agent may
consider proper, whether with or without any such security or indemnity. All
rights of action under this Agreement or under any of the Warrants may be
enforced by the Warrant Agent without the possession of any of the Warrants or
the production thereof at any trial or other proceeding relative thereto, and
any such action, suit or proceeding instituted by the Warrant Agent shall be
brought in its name as Warrant Agent, and any recovery of judgment shall be
for the ratable benefit of the registered holders of the Warrants, as their
respective rights or interests may appear.
H. The Warrant Agent and any stockholder, director, officer or employee
of the Warrant Agent may buy, sell or deal in any of the Warrants or other
securities of the Company or become peculiarly interested in any transaction
in which the Company may be interested, or contract with or lend money to or
otherwise act as fully and freely as though it were not Warrant Agent under
this Agreement. Nothing herein shall preclude the Warrant Agent from acting in
any other capacity for the Company or for any other legal entity.
I. The Warrant Agent shall act hereunder solely as agent and not in a
ministerial capacity, and its duties shall be determined solely by the
provisions hereof. The Warrant Agent shall not be liable for anything which it
may do or refrain from doing in connection with this Agreement except for its
own negligence or bad faith.
15. Change of Warrant Agent. The Warrant Agent may resign and be
discharged from its duties under this Agreement by giving to the Company
notice in writing, and to the holders of the Warrants notice by publication,
of such resignation, specifying a date when such resignation shall take
effect, which notice shall be published at least once a week for two
consecutive weeks in a newspaper of general circulation in Denver, Colorado
and New York, New York, prior to the date so specified. The Warrant Agent may
be removed by like notice to the Warrant Agent from the Company and by like
publication. If the Warrant Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Warrant Agent. If the Company shall fail to make such appointment within a
period of 30 days after such removal or after it has been notified in writing
of such resignation or incapacity by the resigning or incapacitated Warrant
Agent or by the registered holder of a Warrant (who shall, with such notice,
submit his Warrant for inspection by the Company), then the registered holder
of a Warrant may apply to any court of competent jurisdiction for the
appointment of a successor to the Warrant Agent. Any successor warrant agent,
whether appointed by the Company or by such a court, shall be a bank or trust
company having its principal office, and having capital and surplus as shown
by its last published report to its stockholders, of at least $1,000,000.
After appointment, the successor warrant agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named
as Warrant Agent without further act or deed; but the former Warrant Agent
shall deliver and transfer to the successor warrant agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Failure to file or publish
any notice provided for in this Section, however, or any defect therein, shall
not affect the legality or validity of the resignation or removal of the
Warrant Agent or the appointment of the successor warrant agent, as the case
may be.
16. Identify of Transfer Agent. Forthwith upon the appointment of any
Transfer Agent for the Common Stock or of any subsequent Transfer Agent for
shares of the Common Stock or other shares of the Company's capital stock
issuable upon the exercise of the rights of purchase represented by the
Warrants, the Company will file with the Warrant Agent a statement setting
forth the name and address of such Transfer Agent.
17. Notices. Any notice pursuant to this Agreement to be given or made by
the Warrant Agent or the registered holder of any Warrant to or on the Company
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing by the Company
with the Warrant Agent) as follows:
New Frontier Media, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Any notice pursuant to this Agreement to be given or made by the Company or
the registered holder of any Warrant to or on the Warrant Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing by the Warrant Agent with
the Company) as follows:
Corporate Stock Transfer, Inc.
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
18. Supplements and Amendments. The Company and the Warrant Agent may
from time to supplement or amend this Agreement without the approval of any
holders of Warrants in order to cure any ambiguity or to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provision herein, or to make any other provisions in regard to matters
or questions arising hereunder which the Company and the Warrant Agent may
deem necessary or desirable and which shall not be inconsistent with the
provisions of the Warrants and which shall not adversely affect the interests
of the holders of Warrants.
19. 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 hereunder.
20. Merger or Consolidation of the Company. The Company shall not effect
any consolidation or merger with, or sale of substantially all its property
to, any other corporation unless the corporation resulting from such merger
(if not the Company) or consolidation or the corporation purchasing such
property shall expressly assume, by supplemental agreement satisfactory in
form to the Warrant Agent and executed and delivered to the Warrant Agent, the
due and punctual performance and observance of each and every covenant and
condition of this Agreement to be performed and observed by the Company.
21. Governing Law. This Agreement and each Warrant issued hereunder shall
be deemed to be a contract made under the laws of the State of Colorado and
for all purposes shall be construed in accordance with the laws of said State.
22. Benefits of This Agreement. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
Warrant Agent and the registered holders of the Warrants any legal or
equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the Warrant Agent
and the registered holders of the Warrants.
23. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes by deemed to
be an original, and all such counterparts shall together constitute but one
and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
NEW FRONTIER MEDIA, INC.
By:__________________________________
, President
CORPORATE STOCK TRANSFER, INC.
By:__________________________________
EXHIBIT A
[FORM OF WARRANT]
No. _____ For the Purchase of ___ Shares
of Common Stock
__________, 1997
NEW FRONTIER MEDIA, INC.
REDEEMABLE COMMON STOCK PURCHASE WARRANT
EXERCISABLE ON OR BEFORE 5:00 P. M. , New York City Time 2002
This Warrant Certifies that ________________________________, or registered
assigns, is the holder of __________________Warrants expiring ___________, 2002,
to purchase Common Stock, $.01 par value per share (the "Common Stock"), of
New Frontier Media, Inc., a Colorado corporation (the "Company"). Each Warrant
entitles the holder to purchase from the Company on or before 5:00 P. M. New
York City time, on _________2002, (subject to extensions in the sole discretion
of the Company, the "Expiration Date") on fully-paid and non-assessable share of
Common Stock of the Company at the exercise price (the "Exercise Price") of
$6.50 per share upon surrender of this Warrant Certificate and payment of the
Exercise Price at the office or agency of the Warrant Agent in New York, New
York, but only subject to the conditions set forth herein and in the Warrant
Agreement. Payment of the Exercise Price may be made in cash or by certified
check payable to the order of the Company. As used herein "shares" refers to the
Common Stock of the Company and, where appropriate, to the other securities or
property issuable upon exercise of a Warrant as provided for in the Warrant
Agreement upon the happening of certain events set forth in the Warrant
Agreement.
No Warrant may be exercised after 5:00 P. M., New York City time, on the
Expiration Date. To the extent not exercised by such time, the Warrants shall
be cancelled and retired notwithstanding delivery of the related Warrant
Certificate. All Warrants evidenced hereby shall thereafter be void.
Reference is hereby made to the further provisions of this Warrant Certificate
set forth on the reverse in hereof and such further provisions shall for all
purposes have the same effect as though fully set forth at this place.
This Warrant Certificate shall not be valid unless countersigned by the
Warrant Agent
Dated: NEW FRONTIER MEDIA, INC.
By:
President
By:
Warrant Agent Secretary
By:
Authorized Officer
[ FORM OF ]
ELECTION TO PURCHASE
NEW FRONTIER MEDIA, INC.
c/o _______________________
The undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant for, and to purchase thereunder, shares of
the stock provided for therein, and requests that certificates for such shares
shall be issued in the name of
( Please Print )
and be delivered to
at
and, if said number of shares shall not be all of the shares purchasable
thereunder, that a new Warrant for the balance remaining of the shares
purchasable under the within Warrant be registered in the name of, and
delivered to, the undersigned at the address stated below.
Dated: ,
Name of Warrantholder:
( Please Print )
Address:
Signature:
Note: The above signature must correspond with the
name as written upon the face of this
Warrant in every particular, without
alteration or enlargement or any change
whatsoever.
[ FORM OF ]
ASSIGNMENT
For value received
does hereby sell, assign and transfer unto
the within Warrant, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint attorney, to transfer said
Warrant on the books of the within-named Corporation, with full power of
substitution in the premises.
Date: ,
Signature:
Note: The above signature must correspond with the
name as written upon the face of this
Warrant in every particular, without
alteration or enlargement or any change
whatsoever.
