NEW FRONTIER MEDIA, INC.
1,500,000 Units
SELECTED DEALER AGREEMENT
____________, 1997
Dear Sirs:
Centex Securities Incorporated, and the other Underwriters named in the
Prospectus relating to the above units (the "Underwriters"), acting through
us as Representative, is severally offering for sale an aggregate of
1,500,000 Units (the "Firm Units") each consisting of one share of common
stock ("Common Stock") of New Frontier Media, Inc. (the "Company") and one
redeemable common stock purchase warrant ("Warrant") at a price of $5.25 per
Unit. In addition, the several Underwriters have been granted an option to
purchase from the Company up to an additional 225,000 Units (the "Option
Units") to cover over-allotments in connection with the sale of the Firm
Units. The Firm Units and any Option Units purchased are herein called the
"Units". The Units and the terms under which they are to be offered for sale
by the several Underwriters are more particularly described in the Prospectus.
The Underwriters are offering the Units pursuant to a Registration
Statement (the "Registration Statement") under the Securities Act of 1933, as
amended, subject to the terms of (a) their Underwriting Agreement with the
Company, (b) this Agreement, and (c) the Representative's instructions which may
be forwarded to the Selected Dealers from time to time. This invitation is made
by the Representative only if the Units may be lawfully offered by dealers in
your state. The terms and conditions of this invitation are as follows:
1. OFFER TO SELECTED DEALERS. The Representative is hereby soliciting
offers to buy, upon the terms and conditions hereof, a portion of the Units
from Selected Dealers who are to act as principal. Units are to be offered
to the public at a price of $5.25 per Unit (the "Offering Price"). Selected
Dealers who are members of the National Association of Securities Dealers,
Inc. (the "NASD") will be allowed, on all Units sold by them, a concession of
$______ payable as hereinafter provided. Selected Dealers may reallow other
dealers who are members of the NASD a portion of that concession up to the
amount of $_____ per Unit with respect to Units sold by or through them. No
NASD member may reallow commissions to any non-member broker-dealer including
foreign broker-dealers registered pursuant to the Securities Exchange Act of
1934. This offer is solicited subject to the Company's issuance and delivery
of certificates and other documents evidencing its Units and the acceptance
thereof by the Representative, to the approval of legal matters by counsel,
and to the terms and conditions set forth herein.
2. REVOCATION OF OFFER. The Selected Dealer's offer to purchase, if made
prior to the effective date of the Registration Statement, may be revoked in
whole or in part without obligation
or commitment of any kind by it any time prior to acceptance and no offer may
be accepted by the Representative and no sale can be made until after the
Registration Statement covering the Units has become effective with the
Securities and Exchange Commission. Subject to the foregoing, upon execution
by the Selected Dealer of the Offer to Purchase below and the return of same
to the Representative, the Selected Dealer shall be deemed to have offered to
purchase the number of Units set forth in its offer on the basis set forth in
Section 1 above. Any oral offer to purchase made by the Selected Dealer
shall be deemed subject to this Agreement and shall be confirmed by the
Representative by the subsequent execution and return of this Agreement. Any
oral notice by the Representative of acceptance of the Selected Dealer's
offer shall be followed by written or telegraphic confirmation preceded or
accompanied by a copy of the Prospectus. If a contractual commitment arises
hereunder, all the terms of this Selected Dealer Agreement shall be
applicable. The Representative may also make available to the Selected Dealer
an allotment to purchase Units, but such allotment shall be subject to
modification or termination upon notice from the Representative any time
prior to an exchange of confirmations reflecting completed transactions. All
references hereafter in this Agreement to the purchase and sale of Units
assume and are applicable only if contractual commitments to purchase are
completed in accordance with the foregoing.
3. SELECTED DEALER SALES. Any Units purchased by a Selected Dealer under
the terms of this Agreement may be immediately re-offered to the public at the
Offering Price in accordance with the terms of the offering thereof set forth
herein and in the Prospectus, subject to the securities or blue sky laws of the
various states or other jurisdictions. Units shall not be offered or sold by
the Selected Dealers below the Offering Price. The Selected Dealer agrees to
advise the Representative, upon request, of any Units purchased by it remaining
unsold and, the Representative has the right to purchase all or a portion of
such Units, at the Public Offering Price less the selling concession or such
part thereof as the Representative shall determine.
4. PAYMENT FOR UNITS. Payment for Units which the Selected Dealer
purchases hereunder shall be made by the Selected Dealer on or before three (3)
business days after the date of each confirmation by certified or bank cashier's
check payable to the Representative. Certificates for the securities shall be
delivered as soon as practicable after delivery instructions are received by the
Representative.
5. OPEN MARKET TRANSACTIONS; STABILIZATION.
5.1 For the purpose of stabilizing the market in the Units, the
Representative has been authorized to make purchases and sales of the Company's
Units in the open market or otherwise, and, in arranging for sales, to
overallot. If, in connection with such stabilization, the Representative
contracts for or purchases in the open market any Units, Common Stock or
Warrants sold to the Selected Dealer hereunder and not effectively placed by
the Selected Dealer, the Representative may charge the Selected Dealer for the
accounts of the several Underwriters an amount equal to the Selected Dealer
concession on such Units, Common Stock or Warrants, together with any applicable
transfer taxes, and the Selected Dealer agrees to pay such amount to the
Representative on demand. Certificates for Units, Common Stock or Warrants
delivered on such repurchases need not be the identical certificates originally
purchased.
5.2 The Selected Dealer will not, until advised by the Representative
that the entire offering has been distributed and closed, bid for or purchase
Units, Common Stock or Warrants in the open market or otherwise make a market
in the Units or otherwise attempt to induce others to purchase Units, Common
Stock or Warrants in the open market. Nothing contained in this section shall
prohibit the Selected Dealer from acting as an agent in the execution of
unsolicited orders of customers in transactions effectuated for them through a
market maker.
6. ALLOTMENTS. The Representative reserves the right to reject all
subscriptions, in whole or in part, to make allotments and to close the
subscription books at any time without notice. If an order from a Selected
Dealer is rejected or if a payment is received which proves insufficient, any
compensation paid to the Selected Dealer shall be returned by the Selected
Dealer either in cash or by a charge against the account of the Selected Dealer,
as the Representative may elect.
7. RELIANCE ON PROSPECTUS. The Selected Dealer agrees not to use any
supplemental sales literature of any kind without prior written approval of the
Representative unless it is furnished by the Representative for such purpose.
In offering and selling the Company's Units, the Selected Dealer will rely
solely on the representations contained in the Prospectus. Additional copies of
the current Prospectus will be supplied by the Representative in reasonable
quantities upon request.
8. REPRESENTATIONS OF SELECTED DEALER. By accepting this Agreement, the
Selected Dealer represents that it: (a) is registered as a broker-dealer under
the Securities Exchange Act of 1934, as amended; (b) is qualified to act as a
Dealer in the States or other jurisdictions in which it offers the Units; (c) is
a member in good standing with the NASD; (d) will maintain all such
registrations, qualifications, and memberships throughout the term of this
Agreement; (e) will comply with all applicable Federal laws relating to the
offering, including, but not limited to, Rule 15c2-8 under the Securities
Exchange Act of 1934 and Release No. 4968 under the Securities Act of 1933
relating to delivery of preliminary and final prospectuses, and Regulation M
governing the activities of participants in a distribution of securities;
(f) will comply with the laws of the state or other jurisdictions concerned;
(g) will comply the rules and regulations of the NASD including, but not limited
to, full compliance with Rules 2100, 2730 2740, 2720 and 2750 of the Conduct
Rules of the NASD and the interpretations of such sections promulgated by the
Board of Governors of the NASD including an interpretation with respect to
"Free-Riding and Withholding" dated November 1, 1970, and as thereafter amended;
and (h) confirms that the purchase of the number of Units it has subscribed for
and may be obligated to purchase will not cause it to violate the net capital
requirements of Rule 15c3-1 under the Exchange Act.
9. BLUE SKY QUALIFICATION. The Selected Dealer agrees that it will offer
to sell the Units only (a) in states or jurisdictions in which it is licensed as
a broker-dealer under the laws of such states, and (b) in which the
Representative has been advised by counsel that the Units have been qualified
for sale under the respective securities or Blue Sky laws of such states. The
Representative assumes no obligation or responsibility as to the right of any
Selected Dealer to sell the Units in any state or as to any sale therein.
10. EXPENSES. No expenses will be charged to Selected Dealers. A single
transfer tax, if any, on the sale of the Units by the Selected Dealer to its
customers will be paid when such Units
are delivered to the Selected Dealer for delivery to its customers. However,
the Selected Dealer will pay its proportionate share of any transfer tax or
any other tax (other than the single transfer tax described above) if any
such tax shall be from time to time assessed against the Underwriters and
other Selected Dealers.
11. NO JOINT VENTURE. No Selected Dealer is authorized to act as the
Underwriters' agent, or otherwise to act on our behalf, in the offering or
selling of Units to the public or otherwise. Nothing contained herein will
constitute the Selected Dealers as an association or other separate entity or
partners with the Underwriters, or with each other, but each Selected Dealer
will be responsible for its share of any liability or expense based on any claim
to the contrary.
12. COMMUNICATIONS. This Agreement and all communications to the
Underwriters shall be sent to the Representative at the following address or, if
sent by facsimile, to the number set forth below:
Xx. Xxxxx X. Xxxxxxx
Centex Securities Incorporated
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xx Xxxxx, XX 00000
Fax No. (000) 000-0000
Any notice to the Selected Dealer shall be properly given if mailed, telephoned,
or transmitted by facsimile to the Selected Dealer at its address or number set
forth below its signature to this Agreement. All communications and notices
initially transmitted by facsimile shall be confirmed in writing.
13. GOVERNING LAW. This Agreement shall be governed by and construed
according to the laws of the State of California.
14. REPRESENTATIVE'S AUTHORITY AND OBLIGATIONS. The Representative shall
have full authority to take such actions as it may deem advisable in respect of
all matters pertaining to the offering or arising thereunder. The
Representative shall not be under any liability to the Selected Dealer, except
such as may be incurred under the Securities Act of 1933 and the rules and
regulations thereunder, except for lack of good faith and except for obligations
assumed by it in this Agreement, and no obligation on its part shall be implied
or inferred herefrom.
15. ASSIGNMENT. This Agreement may not be assigned by the Selected Dealer
without the Representative's prior written consent.
16. TERMINATION. The Selected Dealer will be governed by the terms and
conditions of this Agreement until it is terminated. This Agreement will
terminate upon the termination of the Offering.
17. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed an original, and all of which together shall constitute
one instrument. A copy of an
executed counterpart of this Agreement may be sent via facsimile by any party
to the other party, and the other party may deem such facsimile copy of the
executed counterpart to be an original.
18. APPLICATION. If you desire to purchase any of the Units, please
confirm your application by signing and returning to us your confirmation on the
duplicate copy of this letter, even though you may have previously advised us
thereof by telephone or telegraph. Our signature hereon may be by facsimile.
CENTEX SECURITIES INCORPORATED
Dated: _____________, 1997 By:
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Xxxxx X. Xxxxxxx, President
OFFER TO PURCHASE
The undersigned does hereby offer to purchase (subject to the right to
revoke set forth in Section 2) _______ Units in accordance with the terms and
conditions set forth above.
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By:
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Its:
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Address:
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Facsimile Number:
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Telephone Number:
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("Selected Dealer")
Date of Acceptance:
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Accepted By:
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IRS Employer Identification No.:
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Unit Allocation:
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