NEW FRONTIER MEDIA, INC.
1,500,000 Units
AGREEMENT AMONG UNDERWRITERS
___________, 1997
Centex Securities Incorporated
(As Representative of the several
Underwriters Named in Schedule I
to Exhibit A annexed hereto)
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xx Xxxxx, XX 00000
Gentlemen:
We understand that New Frontier Media, Inc., a Colorado corporation (the
"Company"), desires to enter into an agreement, substantially in the form of
Exhibit A hereto (the "Underwriting Agreement"). The Underwriting Agreement
provides for the sale by the Company to you and the other prospective
Underwriters named in Schedule I to the Underwriting Agreement, severally and
not jointly, of an aggregate of 1,500,000 units (the "Firm Units") consisting of
one share of common stock ("Common Stock") of the Company and one redeemable
common stock purchasae warrant ("Warrants"). In addition, the Company, pursuant
to the Underwriting Agreement, will grant to the Underwriters an option to
purchase up to an additional 225,000 Units underwritten (the "Option Units") for
the purpose of covering over-allotments in connection with the sale of the Firm
Units. The Firm Units and any Option Units purchased pursuant to the
Underwriting Agreement are herein called the"Units."
We understand that changes may be made in those who are to be Underwriters
and in the respective number of Units to be purchased by them, but that the
number of Units to be purchased by us as set forth in said Schedule I will not
be changed without our consent except as provided herein or in the Underwriting
Agreement. The parties on whose behalf you execute the Underwriting Agreement
are herein called the "Underwriters."
We desire to confirm the agreement among you, the undersigned and the other
Underwriters with respect to the purchase of the Units by the Underwriters,
severally and not jointly, from the Company. The aggregate number of Units
which any Underwriter will be obligated to purchase from the Company pursuant to
the terms of the Underwriting Agreement is herein called the "Underwriting
Obligation" of that Underwriter.
1. AUTHORITY AND COMPENSATION OF REPRESENTATIVE. We hereby authorize
you, as our representative (the "Representative") and on our behalf, (a) to
enter into an agreement with the
Company, in substantially the form attached hereto as Exhibit A, but with
such changes therein as in your judgement will not be materially adverse to
the Underwriters, (b) to exercise all the authority and discretion vested in
the Underwriters and in you by the provisions of the Underwriting Agreement,
(c) to take all such action as you in your discretion may deem necessary or
advisable in order to carry out the provisions of the Underwriting Agreement
and of this Agreement, and the sale and distribution of the Units and (d) to
determine all matters relating to the public advertisement of the Units. We
authorize you, in executing the Underwriting Agreement on our behalf, to set
forth in Schedule I of the Underwriting Agreement as our commitment to
purchase the number of Units (which shall not be substantially in excess of
the number of Units included in your invitation to participate unless we have
agreed otherwise) included in a wire, telex, or similar means of
communication transmitted by you to us at least 24 hours prior to the
commencement of the offering as our finalized Underwriting Obligation.
As our share of the compensation, you have agreed to pay us $_________ per
unit net of selling syndicate expenses, in respect of the aggregate number of
Firm Units and Option Units, respectively, which we shall agree to purchase
pursuant to the Underwriting Agreement. Such compensation shall constitute our
sole compensation hereunder and we shall be responsible for our own expenses
incurred in connection with the offering, including without limitation, all
reallowance charges as set forth in the Underwriting Agreement.
2. PUBLIC OFFERING OF UNITS. A public offering of the Units is to be
made, as herein provided, as soon after the Registration Statement relating
hereto becomes effective as in your judgement is advisable. The Units shall be
initially offered to the public at the public offering price as determined by
you and the Company. You will advise us by telegraph, facsimile or telephone
when the Units shall be released for offering, when the registration statement
relating to the Units shall become effective and the price at which the Units is
initially to be offered. We authorize you as Representative of the Underwriters
after the initial public offering, to change the public offering price, the
concession and the re-allowance if, in your sole discretion, such action becomes
desirable by reason of changes in general market conditions or otherwise. The
public offering price at the time in effect is herein called the "Offering
Price." After notice from you that the Units are released for public sale, we
will offer to the public in conformity with the provisions hereof and with the
terms of offering set forth in the Prospectus such Units as you advise us are
not reserved. We agree not to offer or sell any of the Units to persons over
whose accounts we exercise investment discretion without their specific advance
consent.
3. OFFERING TO DEALERS AND RETAIL SALES. We authorize you to reserve for
offering and sale, and on our behalf to sell to retail purchasers (such sales
being herein called "Retail Sales") and to dealers selected by you (such
dealers, among whom any Underwriter may be included, being herein called
"Selected Dealers") all or any part of our Units as you, in your sole
discretion, shall determine. Such sales, if any, shall be made (a) in the case
of Retail Sales, at the Offering Price, and (b) in the case of sales to Selected
Dealers at the Offering Price less such concession or concessions as you, in
your sole discretion, shall determine.
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Any Retail Sales shall be as nearly as practicable in proportion to the
Underwriting Obligations of the respective Underwriters. Any sales to
Selected Dealers made for our account shall be as nearly as practicable in
the ratio that the Units reserved for our account for offering to Dealers
bears to the aggregate of all Units of all Underwriters including you so
reserved. The over-allotment option to the extent exercised, shall be
exercised by you as a Representative of the Underwriters, and shall be
exercised only for the purpose of making Retail Sales or sales to Selected
Dealers by you. Such sales for our account of the over-allotment option
shall as nearly as practicable be in proportion to the Underwriting
Obligations of the respective Underwriters. On any Retail Sales or sales to
Selected Dealers, including those pertaining to the overallotment option,
made by you on our behalf we shall be entitled to receive only the
Underwriter's concession.
We agree that, from time to time prior to the termination of the provisions
referred to in Section 13 hereof, we shall furnish to you such information as
you may request in order to determine the number of Units purchased by us under
the Underwriting Agreement which then remain unsold, and we shall upon your
request sell to you for the account of any Underwriter as many of such unsold
Units as you may designate at the Offering Price, less all or any part of the
concession to Selected Dealers as you, in your sole discretion, shall determine.
The provisions of Section 4 hereof shall not be applicable in respect of any
such sale.
We authorize you to determine the form and manner of any communications or
agreements with the Selected Dealers. In the event that there shall be any
agreements with Selected Dealers, you are authorized to act as manager
thereunder and we agree, in such event, to be governed by the terms and
conditions of such agreements. The form of Selected Dealer Agreement attached
hereto as Exhibit B is satisfactory to us. Sales to Dealers shall be made under
a Selected Dealers Agreement, attached hereto as Exhibit B, attached hereto and
by this reference incorporated herein. Each Underwriter agrees that it will not
offer any of the Units for sale at a price below the Offering Price or allow any
concession therefrom except as herein otherwise provided. We as to our Units
may enter into agreements with dealers, but any reallowance concession shall not
exceed half of the Dealer's Concession.
It is understood that any Selected Dealer to whom an offer may be made as
hereinbefore provided shall be actually engaged in the investment banking or
securities business and shall be either (a) a member in good standing of the
National Association of Securities Dealers, Inc. (the "NASD") or (b) a dealer
with its principal place of business located outside the United States, its
territories and its possessions and not registered as a broker or dealer under
the Securities Exchange Act of 1934, as amended (the "1934 Act"), who agrees not
to make any sales within the United States, its territories or its possessions
or to persons who are nationals thereof or residents therein. Each Selected
Dealer shall agree to comply with the provisions of Rule 2740 of the Conduct
Rules of the NASD, and each foreign Selected Dealer who is not a member of the
NASD also shall agree to comply with the NASD's interpretation with respect to
free-riding and withholding, to comply, as though it were a member of the NASD,
with the provisions of Rules 2730 and 2750 of the Conduct Rules, and to comply
with Rule 2420 of the Conduct Rules thereof as that Rule applies to a non-member
foreign dealer. The several Underwriters may allow, and the Selected Dealers,
if any,
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may re-allow such concession or concessions as you may determine from
time to time on sales of Units to any qualified dealer, all subject to the
Conduct Rules of the NASD.
Nothing contained in this Agreement shall be deemed to restrict our right,
subject to the provisions of this Section 3, to offer our Units prior to the
effective date of the Registration Statement, provided that any such offer shall
be made in compliance with any applicable requirements of the Securities Act of
1933 (the "1933 Act") and the 1934 Act and the rules and regulations of the
Securities and Exchange Commission thereunder and of any applicable state
securities laws.
4. REPURCHASES IN THE OPEN MARKET. Any Units, Common Stock or Warrants
sold by us (otherwise than through you) which shall be contracted for or
purchased in the open market by you on behalf of any Underwriter or Underwriters
shall be repurchased by us on demand at a price equal to the cost of such
purchase plus commissions and taxes on redelivery. Any Units, Common Stock or
Warrants delivered on such repurchase need not be the identical Units, Common
Stock or Warrants originally sold by us. In lieu of delivery of such Units,
Common Stock or Warrants to us, you may sell such Units, Common Stock or
Warrants in any manner for our account and charge us with the amount of any loss
or expense or credit us with the amount of any profit, less any expense,
resulting from such sale, or charge our account with an amount not in excess of
the concession to Selected Dealers.
5. DELIVERY AND PAYMENT. We agree to deliver to you at or before 6:00
a.m. California time on the Closing Date referred to in the Underwriting
Agreement payment for the Units to be purchased by us under the Underwriting
Agreement in an amount equal to the Offering Price for such Units less the
concession to Selected Dealers for Units which we retained for direct sale by
us, against delivery of certificates for the Units for our account hereunder.
If we are a member of or clear through a member of The Depository Trust Company
("DTC"), you may, in your discretion, deliver our Units through the facilities
of DTC.
You shall remit to us, as promptly as practicable, the amounts received by
you from Selected Dealers and retail purchasers as payment in respect of Units
sold by you for our account pursuant to Section 3 hereof for which payment has
been received. Units purchased by us under the Underwriting Agreement and not
reserved or sold by you for our account pursuant to Section 3 hereof shall be
delivered to us as promptly as practicable after receipt by you. Any Units
purchased by us and so reserved which remains unsold at any time prior to the
settlement of accounts hereunder may, in your discretion, and shall, upon your
request, be delivered to us, but, until termination of the first three
paragraphs of Section 7 of the Selected Dealer Agreements pursuant to Section 8
thereof and of other selling arrangements, such delivery shall be for carrying
purposes only. In case any Units reserved for sale in Retail Sales or to
Selected Dealers shall not be purchased and paid for in due course as
contemplated hereby, we agree (a) to accept delivery when tendered by you of any
Units so reserved for our account and not so purchased and paid for, and (b) in
case we shall have received payment from you in respect of any such Units, to
reimburse you on demand for the full amount which you shall have paid us in
respect for such Units.
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In the event of our failure to tender payment for Units as provided in the
Underwriting Agreement, you shall have the right under the provisions thereof to
arrange for other persons, who may include you and any other Underwriter, to
purchase such Units which we had agreed to purchase, but without relieving us
from liability for our default.
6. AUTHORITY TO BORROW. We authorize you to advance your funds for our
account (charging current interest rates) and to arrange loans for our account
or the account of the Underwriters for the purpose of carrying out this
Agreement, and in connection therewith to execute and deliver any notes or other
instruments and to hold or pledge as security therefor all or any part of our
Units or other Units purchased hereunder for our account. Any lender is hereby
authorized to accept your instructions in all matters relating to such loans.
Any part of our Units or of such other Units so held by you may be delivered to
us for carrying purposes and, if so delivered, will be redelivered to you upon
demand.
7. ALLOCATION OF EXPENSES AND LIABILITY. We authorize you to charge our
account with and we agree to pay (a) all transfer taxes on sales made by you for
our account, except as herein otherwise provided, and (b) our proportionate
share (based on our Underwriting Obligation) of all expenses incurred by you in
connection with the purchase, carrying, sale and distribution of the Units and
all other expenses arising under the terms of the Underwriting Agreement or this
Agreement. Your determination of all such expenses and your allocation thereof
shall be final and conclusive. You may at any time make partial distributions
of credit balances or call for payment of debit balances. Funds for our account
at any time in your hands may be held in your general funds without
accountability for interest. As soon as practicable after the termination of
this Agreement, the net credit or debit balance in our account, after proper
charge and credit for all interim payments and receipts, shall be paid to or
paid by us, provided that you may establish such reserves as you, in your sole
discretion, shall deem advisable to cover possible additional expenses
chargeable to the several Underwriters. Notwithstanding any settlement, we will
remain liable for any taxes on transfers for our account and for our
proportionate share (based on our Underwriting Obligation) of all expenses and
liabilities that may be incurred for the accounts of the Underwriters.
8. LIABILITY FOR FUTURE CLAIMS. Neither any statement by you of any
credit or debit balance in our account nor any reservation from distribution to
cover possible additional expenses relating to the Units shall constitute any
representation by you as to the existence or non-existence of possible
unforeseen expenses or liabilities of or charges against the several
Underwriters. Notwithstanding the distribution of any net credit balance to us
or the termination of this Agreement or both, we shall be and remain liable for,
and will pay on demand, (a) our proportionate share (based on our Underwriting
Obligation) of all expenses and liabilities which may be incurred by or for the
accounts of the Underwriters, or any of them, including any liability which may
be incurred by or for the accounts of the underwriters, or any of them, based on
the claim that the Underwriters constitute an association, unincorporated
business, partnership or any separate entity, and (b) any transfer taxes paid
after such settlement on account of any sale or transfer for our account.
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9. STABILIZATION AND OVER-ALLOTMENT. We authorize you (a) to make
purchases and sales of Units, Common Stock and Warrants in the open market or
otherwise, for long or short account, and on such terms and at such prices as
you, in your sole discretion, shall deem advisable, (b) in arranging for
sales of the Units, to over-allot, and (c) either before or after the
termination of this Agreement, to cover any short position or liquidate any
long position incurred pursuant to this Section 9; subject, however, to the
applicable rules and regulations of the Securities and Exchange Commission
(the "Commission") under the 1934 Act. All such purchases and sales and
over-allotments shall be made for the accounts of the several Underwriters as
nearly as practicable in proportion to their respective Underwriting
Obligations; provided, however, that our net position resulting from such
purchases and sales and over-allotments shall not at the time of each such
purchase or sale or over-allotment exceed, for either long or short account,
15% of the aggregate amount which we shall become obligated to pay in respect
of the total number of Firm Units and Option Units purchased for our account.
If you engage in any stabilizing transactions as Representative of the
Underwriters, you shall notify us of that fact. Each of us agrees to file
with you, within five business days following the date of termination of such
transactions, triplicate originals of a report "not as manager" on Form
X-17A-1 in accordance with the requirements of Rule 17a-2(e) under the
Securities Exchange Act of 1934. You shall, as such Representative, file
such reports with, and make the requisite reports on such transactions as
required by, the Securities and Exchange Commission in accordance with Rule
17a-2 under the 1934 Act.
10. OPEN MARKET TRANSACTIONS. We agree that we will not make bids or
offers, or make or induce purchases or sales for our own account or the accounts
of customers, in the open market or otherwise, either before or after the
purchase of the Units and for either long or short account, of any shares of
Common Stock or any security of the same class and series, or any right to
purchase any such security except: (a) as provided in this Agreement, the
Underwriting Agreement and the Selected Dealer Agreements or otherwise approved
by you, (b) in brokerage transactions not involving solicitation of the
customer's order and otherwise consistent with the provisions of Regulation M
promulgated by the SEC, and (c) in connection with option and option-related
transactions that are consistent with the "no-action" position set forth in
Release No. 17609, as amended in Release No. 19565, of the Commission under the
1934 Act. We further agree that we will not lend, either before or after the
purchase of the Units, to any customer, Underwriter, Selected Dealer or to any
other securities broker or dealer any shares of Common Stock. Prior to the
completion (as defined in Rule 10b-6 under the 0000 Xxx) of our participation in
the distribution, we will otherwise comply with Rule 10b-6.
11. BLUE SKY. Prior to the initial offering by the Underwriters, you will
inform us as to the states and other jurisdictions under the respective
securities or blue sky laws of which it is believed that the Units have been
qualified for sale or is exempt from such qualification, but you do not assume
any responsibility or obligation as to the accuracy of such information or as to
the right of any Underwriter or dealer to offer or sell the Units in any state
or other jurisdiction.
12. DEFAULT BY UNDERWRITERS. Default by one or more Underwriters in
respect of their obligations under the Underwriting Agreement shall not release
us from any of our obligations. In
6
the event of such default by one or more Underwriters, you are authorized to
increase, pro rata with the other non-defaulting Underwriters, the number of
Units which we shall be obligated to purchase from the Company; provided,
however, that the aggregate amount of all such increases for all
non-defaulting Underwriters shall not exceed 10% of the Units and, if the
aggregate amount of the Units not taken up by such defaulting Underwriters
exceeds such 10%, you are further authorized, but shall not be obligated, to
arrange for the purchase by other persons, who may include you and other
non-defaulting Underwriters, of all or a portion of the Units not taken up by
such Underwriters. In the event any such increases or arrangements are made,
the respective amounts of the Units to be purchased by the non-defaulting
Underwriters and by any such other person or persons shall be taken as the
basis for the Underwriter's obligations under this Agreement, but this shall
not in any way affect the liability of any defaulting Underwriter to the
other Underwriters for damages resulting from such default. In the event of
default by one or more Underwriters in respect of their obligations under
this Agreement to take up and pay for any Units purchased by you for their
respective accounts pursuant to Section 9 hereof, or to deliver any Units
sold or over-allotted by you for their respective accounts pursuant to any
provision of this Agreement, and to the extent that arrangements shall not
have been made by you for other persons to assume the obligations of such
defaulting Underwriter or Underwriters, each non-defaulting Underwriter shall
assume its proportionate share of the aforesaid obligations of each such
defaulting Underwriter without relieving any such defaulting Underwriter of
its liability therefor.
13. TERMINATION. Unless earlier terminated by you, the provisions of
Section 2, 3, 4, 6, 9 and 10 of this Agreement shall, except as otherwise
provided herein, terminate thirty full business days after the effective date of
the Registration Statement herein referred to, but may be extended by you for an
additional period or periods not exceeding thirty full business days in the
aggregate. You may, however, terminate this Agreement or any provisions hereof
at any time by written or telegraphic notice to us.
14. GENERAL POSITION OF THE REPRESENTATIVE. In taking action under this
Agreement, you shall act only as agent of the several Underwriters. Your
authority shall include the taking of such action as you may deem advisable in
respect of all matters pertaining to any and all offers and sales of the Units,
including the right to make any modifications which you consider necessary or
desirable in the arrangements with Selected Dealers or others. You shall be
under no liability for or in respect of the value of the Units or the validity
or the form thereof, the Registration Statement, the Prospectus or agreements or
other instruments executed by the Company or others; or for or in respect of the
delivery of the Units; or for the performance by the Company or others of any
agreement on its or their part; nor shall you as Representative or otherwise be
liable under any of the provisions hereof or for any matters connected herewith,
except for want of good faith, and except for any liability arising under the
1933 Act; and only obligations expressly assumed by you as Representative herein
shall be implied from this Agreement. In representing the Underwriters
hereunder, you shall act as Representative of each of them respectively.
Nothing herein contained shall constitute the several Underwriters partners with
you or with each other, or render any Underwriter liable for the commitments of
any other Underwriter, except as otherwise provided in Section 12 hereof and in
Section 7 of the Underwriting Agreement. If the Underwriters shall be
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deemed to constitute a partnership for Federal income tax purposes, it is the
intent of each Underwriter to be excluded from the application of Subchapter
x, Chapter 1, Subtitle A, of the Internal Revenue Code of 1986, as amended.
Each Underwriter elects to be so excluded and agrees not to take any position
inconsistent with such election. Each Underwriter authorizes you, in your
discretion, to execute and file on behalf of the Underwriters such evidence
of election as may be required by the Internal Revenue Service. The
commitments and liabilities of each of the several Underwriters are several
in accordance with their respective Underwriting Obligations and are not
joint.
15. ACKNOWLEDGMENT OF RECEIPT OF REGISTRATION STATEMENT, ETC. We hereby
confirm that we have examined the Registration Statement relating to the Units
as heretofore filed by the Company with the Commission and each amendment
thereto, if any, filed through the date hereof, including any documents filed
under the 1934 Act through the date hereof and incorporated by reference into
the Prospectus, that we are willing to be named as an underwriter therein and to
accept the responsibilities of an underwriter thereunder, and that we are
willing to proceed as therein contemplated. We confirm that we have authorized
you to advise the Company on our behalf (a) as to the statements to be included
in any Preliminary Prospectus and in the Prospectus under the heading
"Underwriting" insofar as they relate to us, and (b) that there is no other
information about us required to be stated in the Registration Statement or
Prospectus. We understand that the aforementioned documents are subject to
further change and that we will be supplied with copies of any further
amendments or supplements to the Registration Statement, of any document filed
under the 1934 Act after the effective date of the Registration Statement and
before termination of the offering of the Units by the Underwriters if such
document is deemed to be incorporated by reference into the Prospectus and of
any amended or supplemented Prospectus promptly, if and when received by you,
but the making of such changes, amendments and supplements shall not release us
or affect our obligations hereunder or under the Underwriting Agreement.
16. INDEMNITY. We agree to indemnify and hold harmless each other
Underwriter and any person who controls any such Underwriter within the meaning
of Section 15 of the 1933 Act, to the extent that, and upon the terms on which,
we agree to indemnify and hold harmless the Company and other specified persons
as set forth in the Underwriting Agreement. Our indemnity agreement contained
in this Section 16 shall remain in full force and effect regardless of any
investigation made by or on behalf of such other Underwriter or controlling
person and shall survive the delivery of and payment for the Units and the
termination of this Agreement and the similar agreements entered into with the
other Underwriters.
Each Underwriter (including you) will pay, upon your request, as
contribution, its proportionate share, based upon its Underwriting Obligation,
of any loss, claim damage or liability, joint or several, paid or incurred by
any Underwriter (including you) to any person other than an Underwriter, arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, the Prospectus, any
amendment or supplement thereto or any preliminary Prospectus or any other
selling or advertising material approved by you for use by the Underwriters in
connection with the sale of the Units, or the omission or alleged
8
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading (other than an untrue
statement or alleged untrue statement or omission or alleged omission made in
conformity with written information furnished to the Company through you by
or on behalf of an Underwriter expressly for use therein) or relating to any
transaction contemplated by this Agreement; and will pay such proportionate
share of any legal or other expense reasonably incurred by you or with your
consent in connection with investigating or defending against any such loss,
claim, damage or liability, or any action in respect thereof. In determining
the amount of our obligation under this paragraph, appropriate adjustment may
be made by you to reflect any amounts received by any one or more Underwriters
in respect of such claim from the Company pursuant to Section 6 of the
Underwriting Agreement or otherwise. There shall be credited against any
amount paid or payable by us pursuant to this paragraph any loss, claim,
damage, liability or expense which is incurred by us as a result of any such
claim asserted against us, and if such loss, claim, damage, liability or
expense is incurred by us subsequent to any payment by us pursuant to this
paragraph, appropriate provision shall be made to effect such credit, by
refund or otherwise. If any such claim is asserted, you may take such action
in connection therewith as you deem necessary or desirable, including
retention of counsel for the Underwriters, and in your discretion separate
counsel for any particular Underwriter or group of Underwriters, and the fees
and disbursements of any counsel so retained by you shall be included in the
amounts payable pursuant to this paragraph. In determining amounts payable
pursuant to this paragraph, any loss, claim, damage, liability or expense
incurred by any person who controls any Underwriter within the meaning of
Section 15 of the 1933 Act which has been incurred by reason of such control
relationship shall be deemed to have been incurred by such Underwriter. Any
Underwriter may elect to retain, at its own expense, its own counsel. You
may settle or consent to the settlement of any such claim on advice of
counsel retained by you. Whenever you receive notice of the assertion of any
claim to which the provisions of this paragraph would be applicable, you will
give prompt notice thereof to each Underwriter. If any Underwriter or
Underwriters defaults in its or their obligation to make any payments under
this paragraph, each non-defaulting Underwriter shall be obligated to pay its
proportionate share of all defaulted payments, based upon the proportion such
non-defaulting Underwriter's Underwriting Obligation bears to the
Underwriting Obligations of all non-defaulting Underwriters. Nothing therein
shall relieve a defaulting Underwriter from liability for its default.
17. CAPITAL REQUIREMENTS. We confirm that the incurrence by us of our
obligations under this Agreement and under the Underwriting Agreement will not
place us in violation of the net capital requirements of Rule 15c3-1 under the
1934 Act or of any applicable rules relating to capital requirements of any
securities exchange to which we are subject.
18. UNDERTAKING TO MAIL PROSPECTUSES. We represent to you that we have
taken all action on our part required to have been taken to satisfy the policy
set forth in Release No. 4968 of the Commission under the 1933 Act, including
the distribution in the manner and at or prior to the time set forth in such
Release, of copies of the Preliminary Prospectus relating to the Units (or, if
you have so requested, copies of any revised Preliminary Prospectus) to all
persons to whom we expect to mail confirmation of sale. As contemplated by Rule
15c2-8 under the 1934 Act, you agree to mail a copy of the Prospectus mentioned
in the Underwriting Agreement to any person making a
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written request therefor during the period referred to in said Rule, the
mailing to be made to the address given in the request. We confirm that we
have delivered all Preliminary Prospectuses and revised Preliminary
Prospectuses, if any, required to be delivered under the provisions of Rule
15c2-8 and agree to deliver all Prospectuses required to be delivered
thereunder. We acknowledge that the copies of the Preliminary Prospectus
furnished to us have been distributed to dealers who have been notified of
the foregoing requirements pertaining to the delivery of Preliminary
Prospectuses and Prospectuses. You have heretofore delivered to us such
number of copies of Preliminary Prospectuses as have been reasonably
requested by us, receipt of which is hereby acknowledged, and will deliver
such number of copies of Prospectuses as will be reasonably requested by us.
19. MISCELLANEOUS. We have transmitted herewith a completed Underwriters'
Questionnaire on the form thereof supplied by you. Any notice hereunder from
you to us or from us to you shall be deemed to have been duly given if sent by
registered mail, telegram or teletype, to us at our address as set forth in our
Underwriters' Questionnaire previously delivered to you, or to you at 0000
Xxxxxxxx Xxxxxx, Xxxxx 000, Xx Xxxxx, Xxxxxxxxxx 00000, Attention: Xx. Xxxxx
X. Xxxxxxx.
We understand that you are a member in good standing of the NASD. We
hereby confirm that we are actually engaged in the investment banking or
securities business and are either (a) a member in good standing of the NASD or
(b) a dealer with its principal place of business located outside the United
States, its territories and its possessions and not registered as a broker or
dealer under the 1934 Act who agrees not to make any sales within the United
States, its territories or its possessions or to persons who are nationals
thereof or residents therein (except that we may participate in sales to
Selected Dealers and others under Section 3 of this Agreement). We hereby agree
to comply with the provisions of Rule 2740 of the Conduct Rules of the NASD,
and, if we are a foreign dealer and not a member of the NASD, we also hereby
agree to comply with the NASD's interpretation with respect to free-riding and
withholding and to comply, as though we were a member of the NASD, with the
provisions of Rules 2730 and 2750 of the Conduct Rules, and to comply with Rule
2720 of the Conduct Rules as that Rule applies to a non-member foreign dealer.
In connection with sales and offers to sell Units made by us outside the United
States, its territories and possessions (i) we will either furnish to each
person to whom any such sale or offer is made a copy of the then current
Preliminary Prospectus or the Prospectus, as the case may be, or inform such
person that such Preliminary Prospectus or Prospectus will be available upon
request, and (ii) we will furnish to each person to whom any such sale or offer
is made such prospectus, advertisement or other offering document containing
information relating to the Units or the Company as may be required under the
law of the jurisdiction in which such sale or offer is made. Any prospectus,
advertisement or other offering document furnished by us to any person in
accordance with the preceding sentence and any such addition offering material
as we may furnish to any person (x) shall comply in all respects with the law of
the jurisdiction in which it is so furnished, (y) shall be prepared and so
furnished at our sole risk and expense and (z) shall not contain information
relating to the Units or the Company which is inconsistent in any respect with
the information contained in the then current Preliminary Prospectus or in the
Prospectus, as the case may be.
10
This instrument may be signed by or on behalf of the Underwriters in one or
more counterparts each of which shall constitute an original and all of which
together shall constitute one and the same agreement among all the Underwriters
and shall become effective at such time as all the Underwriters shall have
signed or have had signed on their behalf such counterparts and you shall have
confirmed all such counterparts. You may confirm such counterparts by facsimile
signature.
This Agreement shall be governed by and construed in accordance with the
laws of the State of California without giving effect to the choice of law or
conflicts of laws principles thereof.
Please confirm that the foregoing correctly states the understanding
between us by signing and returning to us a counterpart hereof.
Very truly yours,
-------------------------------------------
As Attorney-in-Fact for each of the several
Underwriters named in Schedule I to the
Underwriting Agreement
Confirmed as of the date
first above written:
Centex Securities Incorporated
As Representative
By:
-----------------------------
11
EXHIBIT A
UNDERWRITING AGREEMENT
EXHIBIT B
SELECTED DEALER AGREEMENT
NEW FRONTIER MEDIA, INC.
1,500,000 Units
UNDERWRITERS' QUESTIONNAIRE
Each prospective Underwriter must deliver executed a copy to the
Representative not later than ____________________, 1997 at the following
address:
Xx. Xxxxx X. Xxxxxxx
Centex Securities Incorporated
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xx Xxxxx, XX 00000
Dear Xx. Xxxxxxx:
In connection with the proposed offering of 1,500,000 newly issued units
("Units") consisting of one share of common stock and one redeemable common
stock purchase warrant of New Frontier Media, Inc. (the "Company") and for use
in the Registration Statement (Form SB-2) relating thereto filed with the
Securities and Exchange Commission and the Prospectus included therein, the
undersigned, as a prospective Underwriter, advises you as follows:
1. Our exact name (as it should appear in the Prospectus) and our address
are as follows:
2. Except as indicated below: (a) neither we nor any of our directors,
officers or partners have a "material" (as defined in the Rules and Regulations
under the Securities Act of 1933) relationship with the Company or any of its
officers or directors; (b) during the last three years, neither we nor any of
our officers, directors or partners have been an officer or director of the
Company or an "associate" (as defined in such Rules and Regulations) of any of
the officers or directors of the Company or of any person who, to our knowledge,
now owns of record or beneficially more than 10% of any class of voting
securities of the Company; (c) neither we nor any of our directors, officers or
partners, separately or as a group, now owns of record or beneficially more than
1% of any class of voting securities of the Company; (d) other than as may be
stated in the Agreement Among Underwriters, the Underwriting Agreement, the
Selected Dealer Agreement or in the Registration Statement, we do not know of
any arrangements to limit or restrict the sale of the Units for the period of
distribution, to stabilize the market for the Units, for withholding
commissions, or otherwise to hold each prospective Underwriter or dealer
responsible for the distribution of his participation in the Units, or for any
discounts or commissions to be allowed or paid to dealers; (e) other than as set
forth in the Preliminary Prospectus we have no knowledge that more than 5% of
any class of voting securities of the Company is or is to be held
subject to any voting trust or any similar agreement; (f) our proposed
commitment to purchase the Units will not result in a violation of the
financial responsibility requirements of Rule 15c3-1 under the Securities
Exchange Act of 1934; (g) none of us, any of our directors, officers,
partners or "persons associated with" us (as defined in the Bylaws of the
National Association of Securities Dealers, Inc. "NASD"), or, to our
knowledge, any "related person" (defined by the NASD to include counsel,
financial consultants and advisors, finders, members of the selling or
distribution groups and any other persons associated with or related to any
of the foregoing), or any other broker-dealer (i) within the last 18 months
has purchased in private transactions, or intend before, at or within six
months after the commencement of the public offering to purchase in private
transactions, any securities of the Company or any parent or subsidiary
thereof or (ii) within the last 12 months had any dealings with the Company,
or any parent, subsidiary or controlling stockholder thereof (other than
relating to the proposed Agreement Among Underwriters and Selected Dealer
Agreement), as to which documents or information are required to be filed
with the NASD pursuant to its Statement of Policy Concerning Venture Capital
and Other Investments or its Interpretation with Respect to Review of
Corporate Financing, dated March 10, 1970, as amended; (h) we do not intend
to confirm sales of Units to any accounts over which we exercise
discretionary authority.
(State exceptions, if any, or state "No Exceptions.")
3. Set forth below or attached separately is a list of the states under
the laws of which we are registered as a dealer in securities:
4. Except an indicated below, we have not within the past 12 months
prepared or had prepared for us any investment research reports or memoranda
relating to the Company, engineering, management or report or memorandum
relating to broad aspects of the business, operations or products of the
Company, and no report or memorandum has been prepared for external use by us in
connection with the proposed offering.
(State "No Exceptions" or list and enclose three copies
of each report or memorandum and describe distribution.)
The undersigned understands that a court has held that it would be against
the public policy manifested by the federal securities laws to permit an
underwriter which has been found to have actual knowledge of false or misleading
statements or omissions contained in a prospectus or an offering circular, to
enforce against the issuer of the indemnity provisions customarily contained in
an underwriting agreement. In this connection, the undersigned represents that
it has no actual knowledge
2
of false and misleading statements in or omissions from the Registration
Statement and that, in accordance with the next paragraph, it will advise you
if it becomes aware of any such statements or omissions.
We agree to keep an accurate record of the distribution by us of copies of
the Registration Statement and of each amendment thereto, and of each
preliminary prospectus, and we also agree promptly upon request by the Company
or by Centex Securities Incorporated to furnish to each person who received
copies of the above, copies of any subsequent amendment or revised preliminary
prospectus or of any memorandum furnished to us outlining changes in the
Registration Statement or Prospectus. We agree to deliver a copy of the final
form of Prospectus to each person who purchases any of the Units from us and
shall otherwise comply with the provisions of Rule 15c2-8 under the 1934 Act and
Release No. 4968 under the 1933 Act.
The answers to the foregoing questions are correctly stated and are to the
best knowledge, information and belief of the undersigned. The undersigned
agrees to notify the Company promptly of any material changes in the foregoing
information which may occur prior to the effective date of the Registration
Statement covering the Units.
In the event of a summary or cursory review by the Securities and Exchange
Commission in accordance with Release No. 4934 under the Securities Act of 1933,
as amended (the "1933 Act"), you are authorized on our behalf to acknowledge our
awareness thereof and of our statutory responsibilities under the 1933 Act.
Very truly yours,
[For Corporate Signature]
--------------------------------------
Corporate Name
By:
-----------------------------------
Title:
--------------------------------
[For Partnership Signature]
--------------------------------------
Partnership Name
Dated:_____________, 1997 By:
-----------------------------------
Partner
3
NEW FRONTIER MEDIA, INC.
1,500,000 Units
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby
irrevocably constitute and appoint Xxxxx X. Xxxxxxx and Xxxx Xxxxx of Centex
Securities Incorporated, 0000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xx Xxxxx, Xxxxxxxxxx
00000, or any one of them, the true and lawful agent and attorney-in-fact of the
undersigned, with full power to appoint a substitute or substitutes to act
hereunder with the same power and authority as said agent and attorney-in-fact
would have if personally acting, with respect to all matters arising in
connection with the undersigned's acting as one of the Underwriters of the
proposed offering of the above-captioned securities, with full power and
authority to execute and deliver for and on behalf of the undersigned all such
agreements, consents and documents in connection therewith as said agent and
attorney-in-fact may deem advisable. The undersigned hereby gives to said agent
and attorney-in-fact full power and authority to act in the premises, including,
without limiting the generality of the foregoing, the power and authority to
execute and deliver in such form as said agent and attorney-in-fact may
determine the Agreement Among Underwriters with respect to such securities,
authorizing the Representative(s) named in such Agreement in turn to execute and
deliver the Underwriting Agreement relating to the purchase of such securities
and any Selected Dealer Agreement. The undersigned hereby ratifies and confirms
all that said agent and attorney-in-fact, or any substitute or substitutes, may
do by virtue hereof.
WITNESS the due execution hereof at _______________________, this ____ day
of _________, 1997.
--------------------------------------
(Name of Corporation or Firm)
[SEAL]
--------------------------------------
Officer or Partner
