SCHEDULE 14A
(RULE 14A-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant /X/

Filed by a Party other than the Registrant / /

Check the appropriate box:

/X/ Preliminary Proxy Statement
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
/ / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))

NEW FRONTIER MEDIA, INC.
(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/X/ No fee required.

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction applies: Common
Stock, par value $.0001 per share

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

Fee paid previously with preliminary materials.

Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:

NEW FRONTIER MEDIA, INC.
5435 AIRPORT BLVD., SUITE 100
BOULDER, COLORADO 80301
(303) 786-8700

July 23, 2001

Dear Fellow Shareholder:

You are cordially invited to attend the Annual Meeting of Shareholders of
New Frontier Media, Inc. (the "Company"), to be held at 10:00 a.m., Mountain
Daylight Time, on August 22, 2001, at the Omni Interlocken Resort, 500
Interlocken Boulevard, Broomfield, CO 80021.

At this meeting, you will be asked to consider and vote, in person or by
proxy, on the following matters:

1. To elect seven Directors to the Board of Directors to hold office
until the next Annual Meeting of Stockholders at which their class again
stands for election if Proposal "3" is adopted, or until the next Annual
Meeting of Shareholders if such Proposal is not adopted, and in either
case, until their successors are duly elected and qualified;

2. To consider and vote upon the 2001 Incentive Stock Option Plan;

3. To consider and vote upon a proposal to change the state of
incorporation of the Company from Colorado to Delaware and in connection
therewith approve a new Certificate of Incorporation and By-Laws for the
Company which include, among other things, provision for a classified Board
of Directors;

4. To ratify the appointment of Singer Lewak Greenbaum & Goldstein LLP
as the Company's independent auditors; and

5. To transact such other business as may properly come before the
meeting or any adjournments thereof.

The official Notice of Meeting, Proxy Statement and form of proxy are
included with this letter. The matters listed in the Notice of Meeting are
described in detail in the accompanying Proxy Statement.

Regardless of your plans for attending in person, it is important that your
shares be represented and voted at the Meeting. Accordingly, you are urged to
complete, sign and mail the enclosed proxy card as soon as possible.

Very truly yours,

/s/ Mark H. Kreloff
Mark H. Kreloff
Chairman of the Board

NEW FRONTIER MEDIA, INC.
5435 AIRPORT BLVD., SUITE 100
BOULDER, COLORADO 80301
(303) 786-8700

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To the Shareholders of New Frontier Media, Inc.:

Notice is hereby given that the Annual Meeting of Shareholders of New
Frontier Media, Inc. (the "Company") will be held on August 22, 2001, at 10:00
a.m., Mountain Daylight Time, at the Omni Interlocken Resort, 500 Interlocken
Boulevard, Broomfield, CO 80021 for the following purposes:

2. To consider and vote upon the 2001 Incentive Stock Option Plan;

4. To ratify the appointment of Singer Lewak Greenbaum & Goldstein LLP
as the Company's independent auditors; and

5. To transact such other business as may properly come before the
meeting or any adjournments thereof.

The Board of Directors has fixed the close of business on July 20, 2001, as
the record date for determination of those shareholders who will be entitled to
notice of and to vote at the meeting and any adjournment thereof.

If you plan to attend the meeting, please mark the appropriate box on your
proxy card. Upon receipt of the card, an admission ticket will be sent to you.
WHETHER OR NOT YOU EXPECT TO ATTEND, SHAREHOLDERS ARE REQUESTED TO SIGN, DATE
AND RETURN THE ENCLOSED FORM OF PROXY IN THE ENVELOPE PROVIDED. No postage is
required if mailed in the United States.

By Order of the Board of Directors

/s/ Michael Weiner
Michael Weiner
Secretary

Boulder, Colorado
July 23, 2001

NEW FRONTIER MEDIA, INC.
5435 AIRPORT BLVD., SUITE 100
BOULDER, COLORADO 80301

------------------
PROXY STATEMENT
------------------

GENERAL INFORMATION

INFORMATION ABOUT PROXY SOLICITATION

This Proxy Statement is furnished to the holders of the Common Stock,
$.0001 par value per share ("Common Stock"), of New Frontier Media, Inc. (the
"Company") in connection with the solicitation of proxies on behalf of the Board
of Directors of the Company for use at the Annual Meeting of Shareholders to be
held on August 22, 2001 at 10:00 a.m. (Mountain Daylight Time), at the Omni
Interlocken Resort, 500 Interlocken Boulevard, Broomfield CO 80021, and at any
adjournment thereof. The purposes of the meeting and the matters to be acted
upon are set forth in the accompanying Notice of Annual Meeting of Shareholders.
At present, the Board of Directors knows of no other business which will come
before the meeting.

The Notice of Annual Meeting, Proxy Statement, and form of proxy will be
mailed to Shareholders on or about July 23, 2001. The Company will bear the cost
of its solicitation of proxies. The original solicitation of proxies by mail may
be supplemented by personal interview, telephone, telegram, and telefax by the
directors, officers and employees of the Company. Arrangements will also be made
with brokerage houses and other custodians, nominees and fiduciaries for the
forwarding of solicitation material to the beneficial owners of stock held by
such persons, and the Company may reimburse such custodians, nominees and
fiduciaries for reasonable out-of-pocket expenses incurred by them in connection
therewith.

REVOCABILITY AND VOTING OF PROXY

A form of proxy for use at the meeting and a return envelope for the proxy
are enclosed. Shareholders may revoke their proxies at any time before being
voted. Shares of Common Stock represented by executed and unrevoked proxies will
be voted in accordance with the instructions specified thereon. If no
instructions are given, the proxies will be voted FOR the election of
management's seven nominees for election as directors; FOR the approval of the
Company's 2001 Incentive Stock Option Plan; FOR the change of the Company's
state of incorporation from Colorado to Delaware and adoption of a new
Certificate of Incorporation and By-Laws for the Company; and FOR ratification
of the appointment of Singer Lewak Greenbaum & Goldstein LLP as the Company's
independent auditors for the fiscal year ending March 31, 2002.

RECORD DATE AND VOTING RIGHTS

Only stockholders of record at the close of business on July 20, 2001 are
entitled to notice of and to vote at the meeting or any adjournment thereof. On
July 20, 2001, the Company had outstanding 21,086,680 shares of Common Stock,
each of which is entitled to one vote upon matters presented at the meeting.

Votes cast at the meeting will be tabulated by persons appointed as
inspectors of election of the meeting. The inspectors of election will treat
shares of Common Stock represented by a properly signed and returned proxy as
"present" at the meeting for purposes of determining a quorum, without regard to
whether the proxy is marked as casting a vote or abstaining. Likewise, the
inspectors of election will treat shares of Common Stock represented by "broker
non-votes" as present for purposes of determining a quorum.

The nominees for election to the Board of Directors receiving the greatest
number of affirmative votes cast by the holders of Common Stock, up to the
number of directors to be elected, will be

elected as directors. Accordingly, abstentions or broker non-votes as to the
election of directors will have no effect on the election of directors.

The affirmative vote of the holders of a majority of the shares of Common
Stock represented at the meeting in person or by proxy and entitled to vote at
the meeting will be required to approve the adoption of the 2001 Incentive Stock
Option Plan and to ratify the selection of independent public auditors. The
affirmative vote of the holders of two-thirds of the shares of Common Stock
represented at the meeting in person or by proxy and entitled to vote at the
meeting will be required to approve reincorporation of the Company in the State
of Delaware and approve a new Certificate of Incorporation and By-Laws for the
Company. In determining whether such proposals have received the requisite
number of affirmative votes, abstentions and broker non-votes will have the same
effect as votes against the proposal.

A list of shareholders entitled to vote at the Annual Meeting will be
available at the Company's office, 5435 Airport Blvd., Suite 100, Boulder,
Colorado 80301, during business hours, for a period of 10 days prior to the
Annual Meeting for examination by any shareholder. Such list will also be
available at the Annual Meeting.

QUORUM

The presence, either in person or by proxy, of the holders of a majority of
the shares of common stock outstanding on July 20, 2001 is necessary to
constitute a quorum at the Annual Meeting.

ACTIONS TO BE TAKEN AT ANNUAL MEETING
PROPOSAL ONE
ELECTION OF DIRECTORS
NOMINEES

The Company's Board of Directors consists of seven Directors. All of the
Company's Directors are standing for re-election, each to serve until the next
Annual Meeting of Shareholders, or if Proposal "Three" is adopted, until the
next Annual Meeting of Stockholders at which their class stands for election,
and in either case until their successors are duly elected and qualified. It is
intended that the accompanying form of Proxy will be voted for the election of
the nominees named in the Proxy Statement.

The following table sets forth information concerning the nominees and the
classes for which they will be elected if Proposal "Three" is adopted:

DIRECTOR CLASS OF
NAME AGE POSITION SINCE DIRECTOR(1)
---- --- -------- -------- -----------

Mark H. Kreloff......... 39 Chairman of the Board and Chief Executive Officer 1995 I
Michael Weiner.......... 59 Executive Vice President, Secretary, Treasurer and 1995 I
Director
Edward J. Bonn (2)(3)... 49 Director 1999 I
Alan L. Isaacman 58 Director 1999 II
(2)(3)(4)...............
Koung Y. Wong 48 Director 1995 II
(2)(3)(4)...............
Bradley Weber........... 41 Vice President of Technology, Interactive Gallery, 1999 III
Inc., Director
Hiram J. Woo (4)........ 65 Director 2001 III

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(1) Class I Directors to be elected to serve until the 2004 Annual Meeting;
Class II Directors to be elected to serve until the 2003 Annual Meeting;
Class III Directors to be elected to serve until the 2002 Annual Meeting

(2) Member of Compensation Committee

(3) Member of Nasdaq Compliance Committee

(4) Member of Audit Committee
2

BIOGRAPHICAL INFORMATION ABOUT NOMINEES

MARK H. KRELOFF. Mr. Kreloff has held the title Chairman and Chief
Executive Officer of New Frontier Media, Inc. since the Company's inception in
September, 1995. Mr. Kreloff has been actively involved in the cable television
industry since 1977. Prior to founding the Company, Mr. Kreloff held the title
Vice President, Mergers and Acquisitions, with Kidder Peabody & Co. and Drexel
Burnham Lambert. From 1983 through 1986, Mr. Kreloff was employed by Butcher &
Singer, Inc., a Philadelphia-based investment bank, in a variety of departments
including the Cable Television and Broadcast Media Group. From 1977 through
1983, Mr. Kreloff held a variety of positions, including Marketing Director, in
his family's cable television system based in New Jersey. Mr. Kreloff is an
honors graduate of Syracuse University and holds B.S. degrees in Finance and
Public Communications.

MICHAEL WEINER. Mr. Weiner has been Executive Vice President and a director
of New Frontier Media, Inc. since the Company's inception. His background
includes 20 years in real estate development and syndication. Prior to founding
the Company, Mr. Weiner was actively involved as a principal and director in a
variety of publishing businesses, including a fine art poster company.

EDWARD J. BONN. Mr. Bonn has been a director of the Company since October
1999 when the Company acquired IGI, ITN and CTI. Mr. Bonn served as President of
New Frontier Media from August 2000 until June 2001. He is the founder and
former Chief Executive Officer of ITN and CTI. Prior to that, Mr. Bonn was
Chairman of the Board of Independent Entertainment Group, a California-based,
publicly traded, service bureau and information provider. He was also a founder
and President of ICOM Group, Inc., an audio text service bureau that specialized
in automated credit card processing and fraud control procedures, and is the
founder and President of Response Telemedia, Inc., a privately held company
offering a variety of 800/900 information and entertainment. Mr. Bonn attended
the University of Oregon from 1969-1972 with a focus in International Studies
and attended business and accounting classes at UCLA from 1980-1982.

ALAN ISAACMAN. Mr. Isaacman joined the Company as a Director in November
1999. Mr. Isaacman is a Senior Partner of Isaacman, Kaufman & Painter, Inc. Mr.
Isaacman is a renowned litigation attorney based in Los Angeles representing
general corporate clients, as well as clients from the media and entertainment
industries. He is considered an expert on First Amendment rights and has
experience in areas of copyright, antitrust, securities, right to privacy and
general entertainment law. Mr. Isaacman has successfully defended clients on
First Amendment cases throughout the judicial system up to and including the
Supreme Court of the United States. Mr. Isaacman received his undergraduate at
Penn State University and received his law degree from Harvard University Law
School. He is a Fellow of the American College of Trial Lawyers and is included
in the Best Lawyers in America.

KOUNG Y. WONG. Mr. Wong was born in Canton, China in 1952 and immigrated to
the United States in 1969 with his family. He earned a Bachelor of Arts degree
from City College of San Francisco in 1975, and studied Architecture at the
University of California at Berkeley for one year. For the past 23 years, Mr.
Wong has been the president and sole shareholder of WAV Entertainment, Inc., a
leading electronics hardware and software distribution company based in South
San Francisco, California. WAV Entertainment, Inc. includes a 20,000 square-foot
corporate headquarters and distribution center and an 8,500 square-foot retail
superstore in San Francisco, California. Mr. Wong has been a director of New
Frontier Media since the Company's inception in September, 1995.

BRADLEY WEBER. Mr. Weber oversees the technology operations of the
Company's California subsidiaries. He has been a director of New Frontier Media
since October 1999 when he became affiliated with the Company through the
Company's acquisition of IGI, ITN and CTI. Mr. Weber served as Executive Vice
President of New Frontier Media, Inc. from August 2000 until June 2001. Mr.
Weber joined ITN in 1995 as Executive Vice President and became Chief Operating
Officer in January 1998. Mr. Weber was formerly Director of Interactive
Audiotext Services, Inc., an audio text service bureau and information provider.
He was also a founder and CEO of the ICOM Group, Inc., an audio text service
bureau that specialized in automated credit card processing and fraud control
3

procedures. Mr. Weber received his undergraduate degree in Economics at
Occidental College and received his Masters in Business Administration from
California Lutheran University.

HIRAM J. WOO. Mr. Woo joined the Company as a Director in June 2001. Mr.
Woo is President of Steakhouse Partners, Inc. Mr. Woo was President of Regal
Financial & Development Corporation, a real estate development and planning firm
for twelve years. Mr. Woo was responsible for acquisitions, feasibility
analyses, financing and the overall coordination of all development and
construction projects with an emphasis on residential single family homes and
multiple residential units. Mr. Woo managed over $300 million of real estate
development projects in the Western United States under this entity. Mr. Woo has
wide experience in accounting, taxes and management advisory services, actively
practicing in his mid-size CPA firm for a period of ten years. Mr. Woo was also
a principal organizer of a California State Chartered Savings and Loan
Association and served as its President and CEO for a period of four years. Mr.
Woo graduated form the University of California - Berkeley with a Bachelor of
Science Degree in Accounting and Finance and is a licensed Certified Public
Accountant in California.

INFORMATION ABOUT THE BOARD OF DIRECTORS, COMMITTEES OF THE BOARD AND EXECUTIVE
OFFICERS.

During the Company's fiscal year ended March 31, 2001, the Board of
Directors held four meetings and acted eight times by unanimous written consent.
Each Director attended more than seventy-five percent (75%) of the Board
meetings and meetings of the Board committees on which he served. The Company
does not have a standing nominating committee, the functions of which are
performed by the entire Board.

During the Company's fiscal year ended March 31, 2001, the Compensation
Committee of the Board met once. The Compensation Committee has the power to
prescribe, amend and rescind rules relating to the Company's stock option plans,
to grant options and other awards under the stock option plans and to interpret
the stock option plans.

During the Company's fiscal year ended March 31, 2001, the Audit Committee
of the Board met twice and acted once upon unanimous written consent. The Audit
Committee has the responsibility of recommending the engagement of independent
auditors and reviewing and considering actions of management in matters relating
to audit functions. The Committee reviews, with independent auditors, the scope
and results of its audit engagement, the system of internal controls and
procedures and reviews the effectiveness of procedures intended to prevent
violations of laws. The Board of Directors has adopted a written charter for the
Audit Committee. The Audit Committee has recommended the selection of Singer
Lewak Greenbaum & Goldstein LLP as independent auditors for the year ended March
31, 2002.

During the Company's fiscal year ended March 31, 2001, the Nasdaq
Compliance Committee of the Board met one time. The Nasdaq Compliance Committee
has the responsibility of ensuring that the Company complies with the Nasdaq
Stock Market Marketplace Rules.

No director or executive officer of the Company is related to any other
director or executive officer. None of the Company's officers or directors hold
any directorships in any other public company except that Hiram J. Woo is a
Director of Steakhouse Partners, Inc. There are currently three outside
directors on the Company's Board of Directors. The Company's compensation
committee is comprised of Messrs. Isaacman, Bonn and Wong. The Company's audit
committee is comprised of Messrs. Isaacman, Wong and Woo. The Company's Nasdaq
compliance committee is comprised of Messrs. Isaacman, Bonn and Wong.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Pursuant to Section 16 of the Exchange Act, the Company's Directors and
executive officers and beneficial owners of more than 10% of the Company's
Common Stock are required to file certain reports, within specified time
periods, indicating their holdings of and transactions in the Common Stock and
derivative securities. Based solely on a review of such reports provided to the
Company and
4

written representations from such persons regarding the necessity to file such
reports, the Company is not aware of any failures to file reports or report
transactions in a timely manner during the Company's fiscal year ended March 31,
2001.

EXECUTIVE COMPENSATION

The following table sets forth the annual compensation paid to the Chief
Executive Officer and five other most highly compensated executive officers of
the Company for the three fiscal years ended March 31, 2001, 2000 and 1999.

SUMMARY COMPENSATION TABLE

LONG-TERM COMPENSATION
------------------------------------------
SECURITIES
ANNUAL COMPENSATION OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND --------------------------------------- COMPENSATION OPTIONS COMPENSATION
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($)(1) (#) ($)(2)
------------------ ---- ---------- --------- ------------ ---------- ------------

Mark H. Kreloff, ............ 2001 197,308 200,000 -- 200,000 730
CEO and Chairman 2000 117,134 37,212 -- 275,000 730
1999 103,750 -- -- 269,000 730
Michael Weiner, ............. 2001 197,308 200,000 -- 200,000 --
Executive Vice President, 2000 117,134 37,212 -- 275,000 --
Secretary and Treasurer 1999 103,750 -- -- 290,000 --
Edward Bonn, ................ 2001 147,500 150,500 -- 200,000 10,182
Former President 2000 156,665 -- -- 25,000 3,306
1999 180,000 -- -- -- 15,977
Ken Boenish, ............... 2001 166,615 189,054 -- 100,000 --
President of The Erotic 2000 122,278 45,738 18,342 35,000 --
Networks, Inc. 1999 10,417 -- -- 150,000 --
Gregory Dumas, .............. 2001 147,500 141,604 -- 75,000 4,645
Vice President Corporate 2000 89,985 111,000 -- 125,000 8,273
Development 1999 72,000 117,313 -- -- 16,107
Scott Schalin, .............. 2001 147,500 141,604 -- 75,000 4,645
President of Interactive 2000 108,077 111,000 -- 50,000 8,954
Gallery, Inc. 1999 80,000 103,374 -- -- 15,312

- ---------------

(1) The Other Annual Compensation for Mr. Boenish includes $14,442 of moving
expenses and auto allowance of $3,900. While each of the other Named
Executive Officers enjoy certain other perquisites, such perquisites do not
exceed the lesser of either $50,000 or 10% of each Named Executive Officer's
salary and bonus.

(2) The amount shown for Mr. Kreloff is related to premiums paid for life
insurance. All other compensation for the other Named Executive Officers
include amounts contributed to the 401(k) Plan on behalf of the Named
Executive Officers.

STOCK OPTION GRANTS IN LAST FISCAL YEAR

NUMBER OF POTENTIAL REALIZABLE VALUE AT
SECURITIES % OF TOTAL ASSUMED ANNUAL RATES OF
UNDERLYING OPTIONS STOCK PRICE APPRECIATION FOR
OPTIONS GRANTED TO EXERCISE OR OPTION TERM (3)
GRANTED EMPLOYEES BASE PRICE EXPIRATION -----------------------------
NAME (# OF SHARES) IN 3/31/01 ($/SH) DATE 5% 10%
---- ------------- ---------- ----------- ---------- -- ---

Mark Kreloff.......... 200,000(1) 10% $2.00 12/5/2010 $251,558 $637,497
Michael Weiner........ 200,000(1) 10% $2.00 12/5/2010 $251,558 $637,497
Edward Bonn........... 200,000(1) 10% $2.20 12/5/2010 $211,558 $597,497

Ken Boenish........... 100,000(2) 5% $2.00 12/5/2010 $125,779 $318,748
Gregory Dumas......... 75,000(2) 4% $2.00 12/5/2010 $ 94,334 $239,061
Scott Schalin......... 75,000(2) 4% $2.00 12/5/2010 $ 94,334 $239,061

- ---------------

(1) On December 5, 2000, the Company granted options to Mr. Kreloff, Mr. Weiner,
Mr. Bonn and other executive officers and key employees to purchase common
stock of the Company under the Company's Millennium Incentive Stock Option
Plan. Mr. Kreloff's, Mr. Weiner's and Mr. Bonn's options vest at a rate of
50% per year, commencing December 5, 2001 and expire ten years from the
grant date, subject to early termination in certain circumstances.

(2) On December 5, 2000, the Company granted options to Mr. Boenish, Mr. Dumas,
Mr. Schalin and other executive officers and key employees to purchase
common stock of the Company under the Company's Millennium Incentive Stock
Option Plan. Mr. Boenish's, Mr. Dumas' and Mr. Schalin's options vest at a
rate of 33% per year, commencing December 5, 2001 and expire ten years from
the grant date, subject to early termination in certain circumstances.

(3) The potential realizable value illustrates value that might be realized upon
exercise of the options immediately prior to the expiration of their terms,
assuming the specified compounded rates of appreciation of the market price
per share from the date of grant to the end of the option term. Actual
gains, if any, on stock option exercise are dependent upon a number of
factors, including the future performance of the Common Stock and the timing
of the option exercises, as well as the optionee's continued employment
through the vesting period. There can be no assurance that the amounts
reflected in this table will be achieved.

AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES

NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED IN-THE-
SHARES UNEXERCISED OPTIONS AT FY-END (#) MONEY OPTIONS AT FY-END ($)(1)
ACQUIRED ON VALUE --------------------------------- -------------------------------
NAME EXERCISE ($) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ ------------ ----------- ------------- ----------- -------------

Mark Kreloff......... -- -- 383,500 360,500 $624,840 $366,420
Michael Weiner....... -- -- 377,500 387,500 $609,600 $435,000
Edward Bonn.......... -- -- 12,500 212,500 -- $268,000
Ken Boenish.......... -- -- 165,833 119,167 $ 81,000 $154,000
Gregory Dumas........ -- -- 41,666 158,334 -- $115,500
Scott Schalin........ -- -- 16,666 108,334 -- $115,500

- ---------------

(1) The dollar value of each exercisable and unexercisable option was calculated
by multiplying the number of shares of common stock underlying the option by
the difference between the exercise price of the option and the closing
price of the Company's common stock on May 22, 2001 ($3.54).

COMPENSATION OF DIRECTORS

New Frontier Media Directors who are not also employees are reimbursed for
reasonable travel expenses related to attendance at Board meetings. New Frontier
Media Directors who are employees are not compensated for their services as
Directors.

Mr. Wong was granted an option to acquire 50,000 shares on December 5,
2000, pursuant to the Millennium Incentive Stock Option Plan. These options vest
50% over two years and have an exercise price of $2.00.
6

Mr. Isaacman was granted an option to acquire 200,000 shares of common
stock on December 5, 2000, pursuant to the Millennium Incentive Stock Option
Plan. These options vest 50% per year over two years and have an exercise price
of $2.00.

Mr. Woo was granted options to acquire 100,000 shares of common stock on
June 1, 2001, pursuant to the Millennium Incentive Stock Option Plan. These
options vest 50% per year over two years and have an exercise price of $3.25.

EMPLOYMENT AGREEMENTS

The Company has an employment agreement with Mark Kreloff which ends on
March 31, 2003. The Agreement currently provides for the payment of an annual
base salary of $200,000 for fiscal years ending March 31, 2002 and 2003. The
Agreement also currently provides for an annual incentive bonus based on the
Company's annual earnings before income taxes, depreciation and amortization
("EBITDA"). The Compensation Committee of the Board is currently evaluating the
EBITDA benchmarks and intends to promptly amend the Agreement to raise the
EBITDA benchmarks. Mr. Kreloff has verbally agreed to such an agreement. The
Agreement also provides for the one-time issuance of 69,000 nonstatutory options
to Mr. Kreloff at the fair market value of the common stock on the date of
grant. The options are to vest over three years, except upon a change of control
of the Company, as defined in the Agreement, or upon the death or disability of
Mr. Kreloff, the discharge of Mr. Kreloff without cause or the resignation of
Mr. Kreloff for "good reason", as defined in the Agreement. The Agreement
further provides for the payment to Mr. Kreloff upon the occurrence of any of
the above events of a lump sum equal to his annual base salary and bonus.

The Company has an employment agreement with Michael Weiner which ends on
March 31, 2003. The Agreement currently provides for the payment of an annual
base salary of $200,000 for fiscal years ending March 31, 2002 and 2003. The
Agreement also currently provides for an annual incentive bonus based on the
Company's EBITDA. The Compensation Committee of the Board is currently
evaluating the EBITDA benchmarks and intends to promptly amend the Agreement to
raise the EBITDA benchmarks. Mr. Weiner has verbally agreed to such an
amendment. The Agreement also provides for the one-time issuance of 150,000
nonstatutory options to Mr. Weiner at the fair market value of the common stock
on the date of grant. The options are to vest over three years, except upon a
change of control of the Company, as defined in the Agreement, or upon the death
or disability of Mr. Weiner, the discharge of Mr. Weiner without cause or the
resignation of Mr. Weiner for "good reason", as defined in the Agreement. The
Agreement further provides for the payment to Mr. Weiner upon the occurrence of
any of the above events of a lump sum equal to his annual base salary and bonus.

The Company has an employment agreement with Edward J. Bonn which ends on
December 31, 2003. The Agreement currently provides for the payment of an annual
base salary of $150,000 for calendar years 2002 and 2003. The Agreement also
currently provides for an annual incentive bonus based on the Company's EBITDA.
The Compensation Committee of the Board is currently evaluating the EBITDA
benchmarks and intends to promptly amend the Agreement to raise the EBITDA
benchmarks. Mr. Bonn has verbally agreed to such an amendment.

The Company has an employment agreement with Ken Boenish which ends on
February 22, 2002. The Agreement currently provides for the payment of an annual
base salary of $130,000. The Agreement currently provides for the one-time
issuance of 150,000 incentive stock options at $3.00 per share. The Agreement
also currently provides for an annual incentive bonus based on the Company's
revenues. The Compensation Committee of the Board is currently evaluating the
revenue benchmarks and intends to promptly amend the Agreement to raise the
benchmarks. Mr. Boenish has verbally agreed to such an amendment.

The Company has an employment agreement with Gregory Dumas which ends on
March 31, 2003. The Agreement provides for the payment of an annual base salary
of $110,000. The Agreement also provides for an annual incentive bonus based on
the Company's revenues. The Compensation Committee of the Board is currently
evaluating the revenue benchmarks and intends to promptly amend the Agreement to
raise the benchmarks. Mr. Dumas has verbally agreed to such an
7

amendment. The Agreement also provides for the one-time issuance of 50,000
non-statutory stock options to Mr. Dumas at the fair market value on the date of
grant. The options are to vest over three years, except upon change of control
of the Company, as defined in the Agreement or upon the death or disability of
Mr. Dumas, the discharge of Mr. Dumas without cause or the resignation of Mr.
Dumas for "good reason", as defined in the Agreement. The Agreement further
provides for the payment to Mr. Dumas upon the occurrence of any of the above
events of a lump sum equal to his annual base salary and bonus.

The Company has an employment agreement with Scott Schalin which ends on
March 31, 2003. The Agreement provides for the payment of an annual base salary
of not less than $110,000. The Agreement also provides for an annual incentive
bonus based on the Company's revenues. The Compensation Committee of the Board
is currently evaluating the revenue benchmarks and intends to promptly amend the
Agreement to raise the benchmarks. Mr. Schalin has verbally agreed to such an
amendment. The Agreement provides for the one-time issuance of 50,000
non-statutory stock options to Mr. Schalin at the fair market value on the date
of grant. The options are to vest over three years, except upon change of
control of the Company, as defined in the Agreement or upon the death or
disability of Mr. Schalin, the discharge of Mr. Schalin without cause or the
resignation of Mr. Schalin for "good reason", as defined in the Agreement. The
Agreement further provides for the payment to Mr. Schalin upon the occurrence of
any of the above events of a lump sum equal to his annual base salary and bonus.

LIMITS ON LIABILITY AND INDEMNIFICATION

The Company's Articles of Incorporation eliminate the personal liability of
its directors to the Company and its shareholders for monetary damages for
breach of the directors' fiduciary duties in certain circumstances. The Articles
of Incorporation further provide that the Company will indemnify its officers
and directors to the fullest extent permitted by law. The Company believes that
such indemnification covers at least negligence and gross negligence on the part
of the indemnified parties. Insofar as indemnification for liabilities under the
Securities Act may be permitted to directors, officers, and controlling persons
of the Company pursuant to the foregoing provisions or otherwise, the Company
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION.

Members of the Compensation Committee, with the exception of Edward Bonn
who is the Chief Executive Operating Officer of Interactive Telecom Network,
Inc., have never served as our officers or employees or officers and employees
of any of our subsidiaries. During the last fiscal year, none of our executive
officers served on the Board of Directors or Compensation Committee of any other
entity whose officers served either on our Board of Directors or Compensation
Committee.

REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON
EXECUTIVE COMPENSATION.

Executive Compensation Philosophy. Our executive compensation philosophy
emphasizes three guiding principles. First, providing a competitive executive
compensation package that enables us to attract, motivate and retain talented
executives. Second, basing a major portion of each executive's annual cash
compensation on our annual EBITDA or the annual EBITDA of the group or unit for
which the executive is primarily responsible. Third, aligning the financial
interests of executives with long-term total shareholder return, particularly
through stock options.

Our executive compensation program has three major components: base
salaries, annual incentives, and long-term incentives.

Base Salaries. Our executive officers receive base salaries as compensation
for their job performance, abilities, knowledge, and experience. The base
salaries of Mark H. Kreloff, Michael Weiner, Edward J. Bonn and Bradley Weber
are determined under the terms of their respective employment contracts with us.
Apart from any contractual commitments, the Compensation
8

Committee intends to maintain base salaries at competitive levels in the
marketplace for comparable executive ability and experience and to place more
emphasis on the incentive portion of executive compensation, thereby correlating
compensation to performance. The Committee reviews base salaries annually and
determines increases based upon an executive officer's contribution to corporate
performance and competitive market conditions.

Annual Incentive Compensation. Our executive officers also receive an
annual incentive bonus based on the Company's EBITDA, as set forth in their
respective employment agreements.

Long-Term Incentives. For Fiscal Year 2002 and the future, the Committee
and the Board approved, and the Board of Directors is recommending shareholders
approve, the New Frontier Media, Inc. 2001 Incentive Stock Option Plan. The
Committee believes that once fully implemented, this plan will provide an
excellent vehicle for rewarding performance by Company executives and retaining
their services for the future using stock options.

Submitted June 1, 2001 by the members of the Compensation Committee.

Koung Y. Wong, Chairman
Edward J. Bonn
Alan Isaacman

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of July 23, 2001, the number and
percentage of shares of outstanding Common Stock owned by each person owning at
least 5% of the Company's Common Stock, each officer and director owning stock,
and all officers and directors as a group:

NAME AND ADDRESS OF NUMBER OF SHARES
BENEFICIAL OWNER BENEFICIALLY OWNED PERCENT
------------------- ------------------ -------

Mark H. Kreloff ...................................... 1,458,523(2) 7%
5435 Airport Blvd., Suite 100
Boulder, CO 80301
Michael Weiner ....................................... 658,616(3) 3%
5435 Airport Blvd., Suite 100
Boulder, CO 80301
Koung Y. Wong ........................................ 71,000(4) *
168 Beacon St.
S. San Francisco, CA 94080
Edward Bonn .......................................... 4,054,373(5) 19%
5435 Airport Blvd., Suite 100
Boulder, CO 80301
Brad Weber ........................................... 1,671,722(6) 8%
15303 Ventura Blvd., Suite 800
Sherman Oaks, CA 91403
Alan Isaacman ........................................ 12,500(7) *
8484 Wilshire Blvd., Suite 850
Beverly Hills, CA 90211
Ken Boenish .......................................... 166,833(8) 1%
5435 Airport Blvd., Suite 100
Boulder, CO 80301
Gregory Dumas ........................................ 41,666(9) *
15303 Ventura Blvd., Suite 800
Sherman Oaks, CA 91403
Scott Schalin ........................................ 16,666(10) *
15303 Ventura Blvd., Suite 800
Sherman Oaks, CA 91403

NAME AND ADDRESS OF NUMBER OF SHARES
BENEFICIAL OWNER BENEFICIALLY OWNED PERCENT
------------------- ------------------ -------

SAC Capital .......................................... 1,924,282 9%
777 Long Ridge Road
Stamford, CT 06902
All officers and directors as a group (9 persons)..... 8,178,899 39%
---------- --
TOTAL................................................. 10,103,181 48%
---------- --
---------- --

- ---------------
* Less than 1%.

(1) Unless otherwise indicated, the persons named above have sole voting and
dispositive power over the shares shown as owned by them. The number of
shares beneficially owned by Directors and executive officers includes
stock options that are exercisable within 60 days of the record date. Share
ownership by greater than 5% holders is based upon Schedule 13G filings,
which reflect ownership as of March 31, 2001 and Schedule 13D filings,
which reflect ownership as of the time of filing.

(2) Includes the right to acquire 383,500 shares of common stock within 60 days
upon the exercise of employee stock options and warrants.

(3) Includes the right to acquire 277,500 shares of common stock within 60 days
upon the exercise of employee stock options.

(4) Includes the right to acquire 12,500 shares of common stock within 60 days
upon the exercise of employee stock options.

(5) Includes the right to acquire 12,500 shares of common stock within 60 days
upon the exercise of employee stock options.

(6) Includes the right to acquire 12,500 shares of common stock within 60 days
upon the exercise of employee stock options.

(7) Includes the right to acquire 12,500 shares of common stock within 60 days
upon the exercise of employee stock options.

(8) Includes the right to acquire 165,833 shares of common stock within 60 days
upon the exercise of employee stock options and warrants.

(9) Includes the right to acquire 41,666 shares of common stock within 60 days
upon the exercise of employee stock options and warrants.

(10) Includes the right to acquire 16,666 shares of common stock within 60 days
upon the exercise of employee stock options.

PERFORMANCE GRAPH

The following graph compares on a cumulative basis the yearly percentage
change, assuming dividend reinvestment, over the last five fiscal years in (a)
the total shareholder return on our common stock with (b) the total return on
the Standard & Poors SmallCap 600 Index and (c) the total return on a peer group
index. The Standard & Poors SmallCap 600 index includes companies with an
average market capitalization of approximately $615,551,000 with the largest
company having a capitalization of approximately $3,398,289,000. The peer group
is an index weighted by the relative market capitalization of the two following
companies which were selected for being in industries related to ours (provider
of adult content), for having revenues between $20,260,000 and $347,817,000 in
their most recently reported fiscal years and for having five year compound
annual revenue growth of at least 10%. The two are: Playboy Enterprises, Inc.
and Private Media Group, Inc.
10

The following graph assumes that $100 had been invested in each of the
Company, the Standard & Poors Small Cap 600 Index and the two member Peer Group
on September 15, 1995.

5-YEAR CUMULATIVE TOTAL RETURN COMPARISON AMONG
NEW FRONTIER MEDIA, INC., S&P SMALLCAP 600 INDEX AND PEER GROUP INDEX

New Frontier S&P Index Peer Group Index
------------ ------------ ----------------
September 95 100 100 100
March 96 100 105.85 119.12
March 97 125 114.73 180.88
March 98 81.25 169.43 205.88
March 99 107.8 137.02 264.71
March 00 290.63 179.08 315.76
March 01 73.05 176.78 178.81

ASSUMES $100 INVESTED ON SEPTEMBER 15, 1995
ASSUMES DIVIDED REINVESTMENT
FISCAL YEAR ENDING MARCH 31, 2001

The preceding sections entitled "Executive Compensation" and "Performance
Graph" do not constitute soliciting material for purposes of SEC Rule 14a-9,
will not be deemed to have been filed with the SEC for purposes of Section 18 of
the Securities Exchange Act of 1934, and are not to be incorporated by reference
into any other filing that we make with the SEC.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Company leased certain equipment and office space via entities
controlled by Mr. Kreloff on a month-to-month basis. During the year ended March
31, 1999 the Company paid $52,425 to these entities relating to these leases.
The leases have since been terminated.

The Company's subsidiary, IGallery, purchased several vanity domain names
from an entity controlled by Mr. Edward Bonn prior to the Company's acquisition
of IGallery. This purchase was financed through a note payable with an original
principal amount of $809,000. The note bore interest at the prime rate. The note
and related interest was paid off during the fiscal year ended March 31, 2001.

The Company owed Messrs. Brad Weber and Edward Bonn $671,828 as of March
31, 2000 for amounts earned by them prior to the acquisition date of October 27,
1999. These amounts are non-interest bearing and are payable on demand. These
amounts were paid out to Messrs. Weber and Bonn during the fiscal year ended
March 31, 2001.

The Company owed Mr. Bonn $700,000 as an unsecured note payable as of March
31, 1999. The note bore interest at 4% per annum and had no stated maturity
date. The note and related interest was paid off during the fiscal year ended
March 31, 2000.

The Company entered into an office lease agreement, which is personally
guaranteed by Mr. Bonn and his wife ("guarantors"). As an inducement to the
guarantors, they were granted a security interest in certain domain names, with
an original purchase price of approximately $1,600,000.

The Company loaned Mr. Nyiri $87,000 in fiscal 1999. This amount was repaid
during the fiscal year ended March 31, 2000. The loan was non-interest bearing.
The Company loaned Mr. Nyiri $40,250 during the fiscal year ended March 31,
2001. This note bears interest at 8%.

The Company paid $72,000 and $205,000 to Isaacman, Kaufman, & Painter
during the fiscal years ended March 31, 2000 and 2001, respectively, for legal
services provided by Mr. Isaacman and his associates.

The Company carries out administrative and processing services for a
company in which a director has an interest. The Company recognized revenue of
$48,363 and $79,467 during the years ended March 31, 2001 and 2000,
respectively, by charging a processing fee of 3% of the related party's revenue.

THE BOARD RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF EACH OF THE SEVEN
DIRECTORS.

PROPOSAL TWO
APPROVAL OF THE COMPANY'S 2001 INCENTIVE STOCK OPTION PLAN

On June 25, 2001, the Board of Directors adopted the New Frontier Media,
Inc. 2001 Incentive Stock Option Plan (the "Plan") for officers and key
employees of the Company and its subsidiaries. The principal features of the
Plan, as amended, are summarized below, but such summary is qualified in its
entirety by reference to the full text of the Plan, which is attached hereto as
Exhibit A.

Under the Plan, up to an aggregate of 500,000 shares of the Company's
Common Stock may be issued pursuant to stock options, subject to adjustment in
the case of certain corporate transactions.

The options may be either options intended to qualify as "incentive stock
options", as that term is defined in the Internal Revenue Code of 1986, as
amended (the "Code"), or non-statutory options. The per share exercise price of
options granted under the Plan may not be less than 100% of the Fair Market
Value (as defined below) of a share of the Company's Common Stock on the date of
grant. Shares of Common Stock acquired under the Plan may be treasury shares;
including shares purchased in the open market for use in the Plan, newly issued
shares, or a combination thereof. Fair Market Value, as of any date, means the
closing sales price of a share of Common Stock as reported by the National
Association of Securities Dealers, Inc.

The Company has adopted the New Frontier 2001 Incentive Stock Option Plan
to promote the long-term growth and profitability of the Company by (i)
providing key directors, officers and employees of the Company and its
subsidiaries with incentives to improve shareholder value and contribute to the
growth and financial success of the Company and (ii) enabling the Company to
attract, retain and reward the best available persons for positions of
substantial responsibility. As described more fully below, the Plan provides for
grants of options to purchase specified numbers of shares of Common Stock at
predetermined prices.

The following discussion represents only a summary of certain of the Plan
terms and is qualified in its entirety by reference to the complete Plan, a copy
of which is annexed hereto as Exhibit A.

Shares Available; Maximum Awards; Participants. A total of 500,000 shares
of the Company's Common Stock has been reserved for issuance pursuant to options
granted pursuant to the Plan. The Plan allows the Company to grant options to
employees, officers and directors of the Company and its subsidiaries; provided
that only employees of the Company and its subsidiaries may receive incentive
stock options under the Plan. As of the date of this proxy statement, the
Company has not granted any options under the Plan.

Stock Option Features. Under the Plan, options to purchase the Company's
Common Stock may take the form of incentive stock options ("ISOs") under Section
422 of the Internal Revenue Code of 1986, as amended (the "Code") or
non-qualified stock options ("NQSOs"). As required by Section

422 of the Code, the aggregate fair market value (as defined in the Plan) of
shares of Common Stock (determined as of the date of grant of the ISO) with
respect to which ISOs granted to an employee may not exceed $100,000 in any
calendar year. The foregoing limitation does not apply to NQSOs.

Initially, each option will be exercisable over a period, determined by the
Board of Directors or the Compensation Committee of the Board of Directors of
the Company, in its discretion, of up to ten years from the date of grant.
Options may be exercisable during the option period at such time, in such
amounts, and in accordance with such terms and conditions and subject to such
restrictions as are determined by the Board or the Compensation Committee and
set forth in option agreements evidencing the grant of such options; provided
that no option may be exercisable less than six months from its date of grant.

The exercise price of options granted pursuant to the Plan is determined by
the Board or the Compensation Committee, in its discretion; provided that the
exercise price of an ISO may not be less than 100% of the fair market value (as
defined in the Plan) of the shares of the Company Common Stock on the date of
grant. The exercise price of options granted pursuant to the Plan is subject to
adjustment as provided in the Plan to reflect stock dividends, splits, other
recapitalizations or reclassifications or changes in the market value of the
Company Common Stock. In addition, the Plan provides that, in the event of a
proposed change in control of the Company (as defined in the Plan), the Board or
the Compensation Committee is to take such actions as it deems appropriate to
effectuate the purposes of the Plan and to protect the grantees of options,
which action may include (i) acceleration or change of the exercise dates of any
option; (ii) arrangements with grantees for the payment of appropriate
consideration to them for the cancellation and surrender of any option; and
(iii) in any case where equity securities other than Common Stock are proposed
to be delivered in exchange for or with respect to Common Stock, arrangements
providing that any option shall become one or more options with respect to such
other equity securities. Further, in the event the Company dissolves and
liquidates (other than pursuant to a plan of merger or reorganization), then
notwithstanding any restrictions on exercise set forth in the Plan or any grant
agreement pursuant thereto (i) each grantee shall have the right to exercise his
option at any time up to ten days prior to the effective date of such
liquidation and dissolution; and (ii) the Board or the Compensation Committee
may make arrangements with the grantees for the payment of appropriate
consideration to them for the cancellation and surrender of any option that is
so canceled or surrendered at any time up to ten days prior to the effective
date of such liquidation and dissolution. The Board or the Compensation
Committee also may establish a different period (and different conditions) for
such exercise, cancellation, or surrender to avoid subjecting the grantee to
liability under Section 16(b) of the Exchange Act.

The shares purchased upon the exercise of an option are to be paid for by
the optionee in cash (or cash equivalents acceptable to the Compensation
Committee) or by such other means as the Committee may prescribe.

Except as permitted pursuant to Rule 16b-3 under the Exchange Act, and in
any event in the case of an ISO, an option is not transferable except by will or
the laws of descent and distribution. In no case may the options be exercised
later than the expiration date specified in the option agreement.

Plan Administration. The Plan initially will be administered by the
Compensation Committee of the Board of Directors, consisting of at least two
directors who are "non-employee directors" within the meaning of Rule 16b-3, and
"outside directors" within the meaning of Section 162(m) of the Code.

The Compensation Committee will decide when and to whom to make grants, the
number of shares to be covered by the grants, the vesting schedule, the type of
awards and the terms and provisions relating to the exercise of the awards. The
Compensation Committee may interpret the Plan and may at any time adopt such
rules and regulations for the Plan as it deems advisable. The Board of Directors
may at any time amend or terminate the Plan and change its terms and conditions,
except that, without shareholder approval, no such amendment may (i) materially
increase the maximum number of shares as to which awards may be granted under
the Plan; (ii) materially increase the benefits accruing to Plan participants;
or (iii) materially change the requirements as to eligibility for participation
in the Plan.
13

Accounting Effects. Under current accounting rules, neither the grant of
options at an exercise price not less than the current fair market value of the
underlying Common Stock, nor the exercise of options under the Plan, is expected
to result in any charge to the earnings of the Company.

Certain Federal Income Tax Consequences. The following is a brief summary
of certain Federal income tax aspects of awards under the Plan based upon the
Federal income tax laws in effect on the date hereof. This summary is not
intended to be exhaustive and does not describe state or local tax consequences.

Incentive Stock Options. An optionee will not realize taxable income upon
the grant of an ISO. In addition, an optionee will not realize taxable income
upon the exercise of an ISO, provided that such exercise occurs no later than
three months after the optionee's termination of employment with the Company
(one year in the event of a termination on account of disability). However, an
optionee's alternative minimum taxable income will be increased by the amount
that the fair market value of the shares acquired upon exercise of an ISO,
generally determined as of the date of exercise, exceeds the exercise price of
the option. If an optionee sells the shares of Common Stock acquired upon
exercise of an ISO, the tax consequences of the disposition depend upon whether
the disposition is qualifying or disqualifying. The disposition of the shares is
qualifying if made more than two years after the date the ISO was granted and
more than one year after the date the ISO was exercised. If the disposition of
the shares is qualifying, any excess of the sale price of the shares over the
exercise price of the ISO would be treated as long-term capital gain taxable to
the option holder at the time of the sale. If the disposition is not qualifying,
i.e., a disqualifying disposition, the excess of the fair market value of the
shares on the date the ISO was exercised over the exercise price would be
compensation income taxable to the optionee at the time of the disposition, and
any excess of the sale price of the shares over the fair market value of the
shares on the date the ISO was exercised would be capital gain.

Unless an optionee engages in a disqualifying disposition, the Company will
not be entitled to a deduction with respect to an ISO. However, if an optionee
engages in a disqualifying disposition, the Company generally will be entitled
to a deduction equal to the amount of compensation income taxable to the
optionee.

Non-qualified Stock Options. An optionee will not realize taxable income
upon the grant of an NQSO. However, when the optionee exercises the NQSO, the
difference between the exercise price of the NQSO and the fair market value of
the shares acquired upon exercise of the NQSO on the date of exercise is
compensation income taxable to the optionee. The Company generally will be
entitled to a deduction equal to the amount of compensation income taxable to
the optionee.

THE BOARD RECOMMENDS THAT YOU VOTE FOR APPROVAL OF THE COMPANY'S 2001 INCENTIVE
STOCK OPTION PLAN.

PROPOSAL THREE
APPROVAL OF REINCORPORATION IN DELAWARE AND
CREATION OF A CLASSIFIED BOARD
GENERAL

The Board has recommended that the Company's state of incorporation be
changed from Colorado to Delaware and that its new Certificate of Incorporation
and By-Laws provide for a classified Board of Directors. Reincorporation in
Delaware will not result in any change in the business, management, assets,
liabilities or net worth of the Company. Reincorporation in Delaware will allow
the Company to take advantage of certain provisions of the corporate laws of
Delaware. The purposes and effects of the proposed change are summarized below.

In order to effect the Company's reincorporation in Delaware, the Company
will be merged into a newly formed, wholly owned subsidiary incorporated in
Delaware. Prior to the merger, the Delaware subsidiary will not have engaged in
any activities except in connection with the proposed transaction. The mailing
address of the Delaware subsidiary's principal executive offices and its
telephone number are the same as those of the Company. As part of its approval
and recommendations of the Company's reincorporation in Delaware, the Board has
approved, and
14

recommends to the shareholders for their adoption and approval, an Agreement and
Plan of Merger pursuant to which the Company will be merged with and into the
Delaware subsidiary. The full texts of the Agreement and Plan of Merger and the
Certificate of Incorporation and By-Laws of the successor Delaware corporation
under which the Company's business would be conducted after the merger are set
forth as Exhibit B, Exhibit C and Exhibit D respectively, hereto. The discussion
contained in this Proxy Statement is qualified in its entirety by reference to
such Exhibits.

In the following discussion of the proposed Reincorporation, the term "New
Frontier Media-Co" refers to the Company as currently organized as a Colorado
corporation; the term "New Frontier Media-Del" refers to the new wholly owned
Delaware subsidiary of New Frontier Media, Inc. that will be the surviving
corporation after the completion of the transaction; and the term "Company"
includes either or both, as the context may require without regard to the state
of incorporation.

Upon shareholder approval of the Reincorporation and upon acceptance for
filing of the appropriate certificates of merger by the Secretary of State of
Delaware and the Secretary of State of Colorado, New Frontier Media-Co will be
merged with and into New Frontier Media-Del pursuant to the Agreement and Plan
of Merger, resulting in a change in the Company's state of incorporation. The
Company will then be subject to the Delaware General Corporation Law and the
Certificate of Incorporation and By-Laws set forth in Exhibit C and Exhibit D,
respectively. Upon the effective time of the Reincorporation, each outstanding
share of stock of New Frontier Media-Co automatically will be converted into one
share of the corresponding class of stock of New Frontier Media-Del. Outstanding
options and warrants to purchase shares of Common Stock of New Frontier Media-Co
will be converted into options and warrants to purchase the same number of
shares of the Common Stock of New Frontier Media-Del.

IT WILL NOT BE NECESSARY FOR SHAREHOLDERS OF THE COMPANY TO EXCHANGE THEIR
EXISTING STOCK CERTIFICATES FOR CERTIFICATES OF NEW FRONTIER MEDIA-DEL.
OUTSTANDING STOCK CERTIFICATES OF THE COMPANY SHOULD NOT BE DESTROYED OR SENT TO
THE COMPANY.

The Board believes that the Reincorporation will provide greater
flexibility for both the management and business of the Company.

Delaware is a favorable legal and regulatory environment in which to
operate. For many years, Delaware has followed a policy of encouraging
incorporation in that state and, in furtherance of that policy, has adopted
comprehensive, modern and flexible corporate laws which are periodically updated
and revised to meet changing business needs. As a result, many major
corporations have initially chosen Delaware for their domicile or have
subsequently reincorporated in Delaware. The Delaware courts have developed
considerable expertise in dealing with corporate issues, and a substantial body
of case law has developed construing Delaware law and establishing public
policies with respect to Delaware corporations thereby providing greater
predictability with respect to corporate legal affairs. In addition, many
investors and securities professionals are more familiar and comfortable with
Delaware corporations than corporations governed by the laws of other
jurisdictions, even where the laws are similar.

The Company is a Colorado corporation and the Colorado Business Corporation
Act and the Amended Articles of Incorporation and the First Amended and Restated
By-Laws of the Company govern the rights of its shareholders. New Frontier
Media-Del is a Delaware corporation and the rights of it shareholders are
governed by the Delaware General Corporation Law and the Certificate of
Incorporation and By-Laws of New Frontier Media-Del.

THERE ARE DIFFERENCES BETWEEN NEW FRONTIER MEDIA-CO'S AMENDED ARTICLES OF
INCORPORATION AND FIRST AMENDED AND RESTATED BY-LAWS,
AND THE CERTIFICATE OF INCORPORATION AND BY-LAWS OF
NEW FRONTIER MEDIA-DEL

- --------------------------------------------------------------------------------

The provisions of the Certificate of Incorporation and By-Laws for New
Frontier Media-Del are substantially similar to the Company's current Amended
Articles of Incorporation and First Amended and Restated By-Laws.

Set forth below, however, are certain differences which could materially
impact the rights of shareholders of the Company as compared to the rights of
stockholders in New Frontier Media-Del.

CLASSIFIED BOARD OF DIRECTORS
NEW FRONTIER MEDIA-CO

The Company's Amended Articles and First Amended and Restated By-Laws do
not provide for the establishment of a staggered board.

NEW FRONTIER MEDIA-DEL

The Certificate of Incorporation of New Frontier Media-Del provides for the
establishment of a classified board with three Classes of Directors with each
Class as nearly equal in size as possible.

SPECIAL MEETINGS
NEW FRONTIER MEDIA-CO

The By-Laws of New Frontier Media-Co provide that special meetings of the
shareholders may be called by the chief executive officer, the president, or by
the board of directors, and shall be called by the president at the request of
the holders of not less than one-tenth of all outstanding shares of the
corporation entitled to vote at the meeting.

NEW FRONTIER MEDIA-DEL

The By-Laws of New Frontier Media-Del provide that special meetings of the
stockholders may be called by the Chairman or Co-Chairman of the Board, if any,
the Vice Chairman of the Board, if any, or the President. A special meeting of
stockholders shall be called by the Secretary, upon the written request, stating
the purpose of the meeting of stockholders who together own of record a majority
of the outstanding shares of each class of stock entitled to vote at such
meeting.

AMENDMENT OF THE BY-LAWS
NEW FRONTIER MEDIA-CO

The First Amended and Restated By-Laws of New Frontier Media-Co provide
that the By-Laws may be amended, supplemented or repealed upon the affirmative
vote of at least a majority of the Board of Directors attending a meeting where
a quorum is present.

NEW FRONTIER MEDIA-DEL

The By-Laws of New Frontier Media-Del provide that the By-Laws may be
amended, altered or repealed upon the affirmative vote of at least two-thirds
(2/3) of the directors then serving.

AUTHORIZED CAPITALIZATION
NEW FRONTIER MEDIA-CO

New Frontier Media-Co currently has an authorized capitalization of
50,000,000 shares of common stock, $0.0001 par value per share, and 5,000,000
shares of preferred stock, $0.10 par value per share. The Company currently has
approximately 21,086,680 shares of its common stock issued and outstanding.
There are currently no shares of preferred stock issued and outstanding.

NEW FRONTIER MEDIA-DEL

New Frontier Media-Del has an authorized capitalization of 50,000,000
shares of common stock $0.0001 par value per share, and 5,000,000 shares of
preferred stock, $0.10 par value per share. New Frontier Media-Del has not
authorized any series or classes of preferred stock. If the proposed
reincorporation is approved by the shareholders, New Frontier Media-Del will
issue shares of its common stock to the current shareholders of the Company on a
one-for-one basis.

SIGNIFICANT DIFFERENCES BETWEEN THE CORPORATION LAWS OF
COLORADO AND DELAWARE

- --------------------------------------------------------------------------------

The Certificate of Incorporation and By-Laws for New Frontier Media-Del
will be governed by Delaware law. In contrast, the Company's current Amended
Articles of Incorporation and First Amended and Restated By-Laws are governed by
Colorado law. The corporation laws of Colorado and Delaware differ in many
respects. Although all the differences are not described in this Proxy
Statement, certain provisions, which could materially impact the rights of
shareholders of the Company as compared to the rights of stockholders in New
Frontier Media-Del, are discussed below.

CLASSIFIED BOARD OF DIRECTORS

A classified or staggered (the term used in the CBCA) board is one on which
a certain number, but not all, of the directors are elected on a rotating basis
each year. This method of electing directors makes changes in the composition of
the board of directors more difficult, and thus a potential change in control of
a corporation a lengthier and more difficult process.

COLORADO

The Company's Amended Articles of Incorporation and First Amended and
Restated By-Laws do not provide for the establishment of a staggered board.
Colorado law permits, but does not require, a staggered board of directors,
pursuant to which the directors can be divided into as many as three classes
with staggered terms of office, with only one class of directors standing for
election each year. The Company currently does not have a staggered board of
directors.

DELAWARE

Delaware law permits, but does not require, a classified board of
directors, pursuant to which the directors can be divided into as many as three
classes with staggered terms of office, with only one class of directors
standing for election each year. The New Frontier Media-Del Certificate of
Incorporation and By-Laws provide for the establishment of a classified board
and New Frontier Media-Del intends to establish a classified board.

If this Proposal Three is approved, the initial terms of office for the
Directors elected at the 2001 Annual Meeting will be three years for the Class I
Directors, who will hold office until the 2004 Annual Meeting, two years for the
Class II Directors, who will hold office until the 2003 Annual Meeting, and one
year for the Class I Directors, who will hold office until the 2002 Annual
Meeting. At each annual meeting following the 2001 annual meeting, the Class of
directors whose terms expire at that meeting would be elected for a three-year
term. The text of the proposed Articles of Incorporation is attached hereto as
Exhibit C. The By-Laws are attached hereto as Exhibit D. The composition of each
Class of Directors if this Proposal Three adopted is set forth under Proposal
One, Election of Directors.

The Board of Directors believes that a classified Board of Directors is in
the best interests of the Company and its Shareholders. Board classification
will help avoid abrupt changes in the management of the Company and lend
continuity and stability to the management of the Company, particularly in the
event of an unsolicited tender offer. Following adoption of the classified board
structure, at any given time approximately two-thirds of the members of the
Board of Directors will have had prior experience as Directors of the Company.
The Board believes that this will facilitate long-range

planning, strategy and policy and will have a positive impact on customer and
employee loyalty. The Company, however, has not historically had problems with
either the continuity or stability of its Board of Directors.

A classified Board of Directors also establishes a legal structure that
encourages any potential acquiror to negotiate with the Board, rather than
unilaterally attempt to gain control of the Company. The Board believes that
this approach is the one most likely to result in long-term enhancement of
Stockholder value.

A classified Board of Directors will also have the effect of making it more
difficult to replace incumbent directors and management, even if the reason for
the desired change is inadequate performance. It will significantly extend the
time required to effect a change in control of the Board of Directors and may
also discourage hostile takeover bids for the Company. Currently, a change in
control of the Board of Directors can be made by Stockholders holding a
plurality of the votes cast at a single Annual Meeting. If the Company
implements a classified Board of Directors, it will take at least two Annual
Meetings for even a majority of Stockholders to make a change in control of the
Board of Directors.

Without the ability to obtain immediate control of the Board of Directors,
a takeover bidder will not be able to take action to remove other impediments to
its acquisition of the Company. Because the classified Board proposal will
increase the amount of time required for a takeover bidder to obtain control of
the Company without the cooperation of the Board of Directors, even if the
takeover bidder were to acquire a majority of the Company's outstanding stock,
it will tend to discourage certain tender offers, perhaps including some tender
offers that Stockholders may feel would be in their best interests. The Board of
Directors believes, however, that classification of the Board will provide the
Board with more time to evaluate any takeover proposal, and thus enable it to
better protect the interests of the Company and the remaining Stockholders. The
Company is not aware of any attempt by any party to initiate a takeover of the
Company or otherwise effect a change in the composition of the Board.

REMOVAL OF DIRECTORS

Directors may generally be removed with or without cause under the laws of
both Colorado and Delaware, with the approval of a majority of the outstanding
shares entitled to vote in an election of directors.

COLORADO

A director of a corporation that does not have a staggered board of
directors or cumulative voting may be removed with or without cause with the
approval of a majority of the outstanding shares entitled to vote at an election
of directors unless the corporation's Articles of Incorporation require cause.
New Frontier Media-Co's Amended Articles of Incorporation provide that a
director cannot be removed absent a showing of fraud or self-dealing. In the
case of a Colorado corporation having cumulative voting, if less than the entire
board is to be removed, a director may not be removed without cause if the
number of shares voted against such removal would be sufficient to elect the
director under cumulative voting. The Amended Articles of Incorporation and
Amended and Restated By-Laws of the Company do not provide for the establishment
of a classified board of directors and do not provide for cumulative voting.

DELAWARE

A director of a corporation that does not have a classified board of
directors or cumulative voting may be removed with or without cause with the
approval of a majority of the outstanding shares entitled to vote at an election
of directors. In the case of a Delaware corporation having cumulative voting, if
less than the entire board is to be removed, a director may not be removed
without cause if the number of shares voted against such removal would be
sufficient to elect the director under cumulative voting. A director of a
corporation with a classified board of directors may be removed

only for cause, unless the certificate of incorporation otherwise provides. The
Certificate of Incorporation of New Frontier Media-Del does not provide
otherwise.

INDEMNIFICATION AND LIMITATION OF LIABILITY OF DIRECTORS,
OFFICERS AND OTHER AGENTS

Delaware and Colorado have similar laws respecting indemnification by a
corporation of its officers, directors, employees and other agents. The laws of
both states permit, with certain exceptions, a corporation to adopt provisions
in its articles or certificate of incorporation, as the case may be, eliminating
the liability of a director to the corporation or its shareholders for monetary
damages for breach of the director's fiduciary duty in certain cases. There are
nonetheless certain differences between the laws of the two states respecting
indemnification and limitation of liability of directors, officers and other
agents.

COLORADO

The First Amended and Restated By-Laws of the Company provide for the
indemnification of directors of the corporation to the fullest extent
permissible under Colorado law. Colorado law does not permit the elimination of
monetary liability where the Director is adjudged liable to the corporation in
an action brought by the corporation or where a Director has been adjudged to
have derived improper personal benefit. Generally, a Director is indemnified
when the Director acts in good faith, believes that the conduct is in the best
interests of the corporation and had no reason to believe that the conduct was
criminal.

For indemnification, Colorado law requires a determination by a majority
vote of a disinterested quorum of the directors, by independent legal counsel or
by a vote of the shareholders.

Colorado law requires indemnification of director expenses when the
individual being indemnified has successfully defended any action, claim, issue,
or matter therein, on the merits or otherwise, unless limited by the Articles of
Incorporation.

A director may also apply for and obtain indemnification as ordered by a
court under circumstances where the court deems the director is entitled to
mandatory indemnification under Colorado law or when, under all the facts and
circumstances, it deems it fair and reasonable to award indemnification even
though the director has not strictly met the statutory standards. An officer is
also entitled to apply for and receive court awarded indemnification to the same
extent as a director.

A corporation cannot indemnify its directors by any means (other than under
a third party insurance contract) if to do so would be inconsistent with the
limitations on indemnification set forth in the CBCA.

A Colorado corporation may indemnify officers, employees, fiduciaries and
agents to the same extent as directors, and may indemnify those persons to a
greater extent than is available to directors if to do so does not violate
public policy and is provided for in a bylaw, a general or specific action of
the board of directors or shareholders or in a contract.

DELAWARE

The Certificate of Incorporation of New Frontier Media-Del also eliminates
the liability of directors to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director to the fullest extent
permissible under Delaware law, as such law exists currently or as it may be
amended in the future. Under Delaware law, such provision may not eliminate or
limit director monetary liability for: (a) breaches of the director's duty of
loyalty to the corporation or its stockholders; (b) acts or omissions not in
good faith or involving intentional misconduct or knowing violations of law; (c)
the payment of unlawful dividends or unlawful stock repurchases or redemptions;
or (d) transactions in which the director received an improper personal benefit.
Such limitation of liability provisions also may not limit a director's
liability for violation of or otherwise relieve its directors from the necessity
of complying with federal or state securities laws, or affect the availability
of non-monetary remedies such as injunctive relief or rescission.

Delaware law generally permits indemnification of expenses, including
attorney's fees, actually and reasonably incurred in the defense or settlement
of a derivative or third-party action, provided there is a determination by a
majority vote of a disinterested quorum of the directors, by independent legal
counsel or by a majority vote of a quorum of the stockholders that the person
seeking indemnification acted in good faith and in a manner reasonably believed
to be in, or not opposed to, the best interests of the corporation. Without
court approval, however, no indemnification may be made in respect of any
derivative action in which such person is adjudged liable for negligence or
misconduct in the performance of his or her duty to the corporation. Delaware
law requires indemnification of expenses when the individual being indemnified
has successfully defended any action, claim, issue, or matter therein, on the
merits or otherwise.

Delaware law also permits a Delaware corporation to provide indemnification
in excess of that provided by statute. In contrast to Colorado law, Delaware law
does not require authorizing provisions in the certificate of incorporation and
does not contain express prohibitions on indemnification in certain
circumstances. A court may impose limitations on indemnification, however, based
on principles of public policy.

Delaware law provides that the indemnification provided by statute shall
not be deemed exclusive of any other rights under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise.

Both Colorado and Delaware law require indemnification when a director or
officer has successfully defended an action on the merits or otherwise.

Expenses incurred by an officer or director in defending an action may be
paid in advance under Colorado and Delaware law if the director or officer
undertakes to repay the advances if it is ultimately determined that he or she
is not entitled to indemnification. In addition, the laws of both states
authorize a corporation's purchase of indemnity insurance for the benefit of its
officers, directors, employees and agents whether or not the corporation would
have the power to indemnify against the liability covered by the policy.

INSPECTION OF SHAREHOLDER LIST

Both Delaware and Colorado law allow any shareholder to inspect the
shareholder list for a purpose reasonably related to such person's interests as
a shareholder.

CONSIDERATION FOR ISSUANCE OF SHARES
COLORADO

Under Colorado law, shares may be issued for consideration consisting of
tangible or intangible property or benefit to the corporation, including cash,
promissory notes, services performed and other securities of the corporation.

In addition, under Colorado law, shares may not be issued for consideration
consisting of a promissory note of the subscriber or an affiliate of the
subscriber unless the note is negotiable and is secured by collateral, other
than the shares, having a fair market value at least equal to the principal
amount of the note. The note must reflect a promise to pay independent of the
collateral and cannot be a "non-recourse" note.

Under Colorado law, shares with a par value may be issued for consideration
less than such par value.

DELAWARE

Shares may be issued for consideration consisting of tangible or intangible
property or benefit to the corporation, including cash, promissory notes,
services performed and other securities of the corporation.

In the absence of "actual fraud," in the transaction, the judgment of the
board as to the value of the consideration shall be conclusive.

No provisions restrict the ability of the board to authorize the issuance
of stock for a promissory note of any type, including an unsecured or
nonrecourse note or a note secured only by the shares.

Shares with par value cannot be issued for consideration with a value that
is less than the par value. Shares without par value can be issued for any
consideration determined to be valid by the board.

DIVIDENDS AND REPURCHASES OF SHARES
COLORADO

Colorado law dispenses with the concepts of par value of shares as well as
statutory definitions of capital, surplus and the like. Colorado law permits a
corporation to declare and pay cash or in-kind property dividends or to
repurchase shares unless, after giving effect to the transaction: (a) the
corporation would not be able to pay its debts as they become due in the usual
course of business; or (b) the corporation's total assets would be less than the
sum of its total liabilities plus (unless the articles of incorporation permit
otherwise) the amount that would be needed, if the corporation were to be
dissolved at the time of the distribution, to satisfy the preferential rights
upon dissolution of shareholders whose preferential rights are superior to those
receiving the distribution.

DELAWARE

The concepts of par value, capital and surplus are retained under Delaware
law. Delaware law permits a corporation to declare and pay dividends out of
surplus or, if there is no surplus, out of net profits for the fiscal year in
which the dividend is declared and/or for the preceding fiscal year as long as
the amount of capital of the corporation following the declaration and payment
of the dividend is not less than the aggregate amount of the capital represented
by the issued and outstanding stock of all classes having a preference upon the
distribution of assets. In addition, Delaware law generally provides that a
corporation may redeem or repurchase its shares only if the capital of the
corporation is not impaired and such redemption or repurchase would not impair
the capital of the corporation to date, the Company has not paid any cash
dividends.

SHAREHOLDER VOTING ON MERGERS
AND CERTAIN OTHER TRANSACTIONS

Both Delaware and Colorado law generally require that a majority of the
shareholders of both acquiring and target corporations approve statutory
mergers.

COLORADO

Colorado law does not require a stockholder vote of the surviving
corporation in a merger (unless the corporation provides otherwise in its
certificate of incorporation) if (a) the merger agreement does not amend the
existing certificate of incorporation, (b) each share of the stock of the
surviving corporation outstanding immediately before the effective date of the
merger is an identical outstanding share after the merger, and (c) either no
shares of common stock of the surviving corporation and no shares, securities or
obligations convertible into such stock are to be issued or delivered under the
plan of merger, or the authorized, unissued shares or the treasury shares of
common stock of the surviving corporation to be issued or delivered under the
plan of merger plus those initially issuable upon conversion of any other
shares, securities or obligations to be issued or delivered under such plan do
not exceed twenty percent (20%) of the shares of common stock of such
constituent corporation outstanding immediately prior to the effective date of
the merger.

For corporations formed prior to July 1, 1994, a merger must be approved by
two-thirds of all the votes entitled to be cast for each voting group, unless
the Articles of Incorporation provide for a different number. New Frontier
Media-Co's Amended Articles of Incorporation has no such provision.

DELAWARE

Delaware law contains a similar exception to its voting requirements for
reorganizations where shareholders of the corporation itself, or both,
immediately prior to the reorganization will own

immediately after the reorganization equity securities constituting more than 80
percent of the voting power of the surviving or acquiring corporation or its
parent entity.

Both Delaware law and Colorado law also require that a sale of all or
substantially all of the assets of a corporation otherwise than in the ordinary
course of business be approved by a majority of the outstanding voting shares of
the corporation transferring such assets.

Both Colorado and Delaware law generally do not require class voting,
except in certain transactions involving an amendment to the certificate of
incorporation that adversely affects a specific class of shares or where the
designation of the class of securities includes such a right.

STOCKHOLDER APPROVAL OF CERTAIN BUSINESS
COMBINATIONS UNDER DELAWARE LAW

In recent years, a number of states have adopted special laws designed to
make certain kinds of "unfriendly" corporate takeovers, or other transactions
involving a corporation and one or more of its significant shareholders, more
difficult. Under Section 203, certain "business combinations" with "interested
stockholders" of Delaware corporations are subject to a three-year moratorium
unless specified conditions are met.

Section 203 prohibits a Delaware corporation from engaging in a "business
combination" with an "interested stockholder" for three years following the date
that such person or entity becomes an interested stockholder. With certain
exceptions, an interested stockholder is a person or entity who or which owns,
individually or with or through certain other persons or entities, fifteen
percent (15%) or more of the corporation's outstanding voting stock (including
any rights to acquire stock pursuant to an option, warrant, agreement,
arrangement or understanding, or upon the exercise of conversion or exchange
rights, and stock with respect to which the person has voting rights only), or
is an affiliate or associate of the corporation and was the owner, individually
or with or through certain other persons or entities, of fifteen percent (15%)
or more of such voting stock at any time within the previous three years, or is
an affiliate or associate of any of the foregoing.

For purposes of Section 203, the term "business combination" is defined
broadly to include mergers with or caused by the interested stockholder; sales
or other dispositions to the interested stockholder (except proportionately with
the corporation's other stockholders) of assets of the corporation of a direct
or indirect majority-owned subsidiary equal in aggregate market value of ten
percent (10%) or more of the aggregate market value of either the corporation's
consolidated assets or all of its outstanding stock; the issuance or transfer by
the corporation or a direct or indirect majority-owned subsidiary of stock of
the corporation or such subsidiary to the interested stockholder (except for
certain transfers in a conversion or exchange or a pro rata distribution or
certain other transactions, none of which increase the interested stockholder's
proportionate ownership of any class or series of the corporation's or such
subsidiary's stock or of the corporation's voting stock); or receipt by the
interested stockholder (except proportionately as a stockholder), directly or
indirectly, of any loans, advances, guarantees, pledges or other financial
benefits provided by or through the corporation or a subsidiary.

The three-year moratorium imposed on business combinations by Section 203
does not apply if:

(i) Prior to the date on which such stockholder becomes an interested
stockholder the board of directors approves either the business
combination or the transaction that resulted in the person or
entity becoming an interested stockholder;

(ii) Upon consummation of the transaction that made him or her an
interested stockholder, the interested stockholder owns at least
eighty-five percent of the corporation's voting stock outstanding
at the time the transaction commenced (excluding from the
eighty-five percent calculation shares owned by directors who are
also officers of the target corporation and shares held by
employee stock plans that do not give employee participants the
right to decide confidentially whether to accept a tender or
exchange offer); or

(iii) On or after the date such person or entity becomes an interested
stockholder, the board approves the business combination and it is
also approved at a stockholder meeting by sixty-six and two-thirds
percent of the outstanding voting stock not owned by the
interested stockholder.

Section 203 only applies to certain publicly held corporations that have a
class of voting stock that is

(i) Listed on a national securities exchange,

(ii) Quoted on an interdealer quotation system of a registered national
securities association or

(iii) Held of record by more than 2,000 stockholders.

Section 203 will encourage any potential acquirer to negotiate with the
Company's Board of Directors. Section 203 also might have the effect of limiting
the ability of a potential acquirer to make a two-tiered bid for New Frontier
Media-Del in which all stockholders would not be treated equally. Shareholders
should note, however, that the application of Section 203 to New Frontier
Media-Del will confer upon the Board the power to reject a proposed business
combination in certain circumstances, even though a potential acquirer may be
offering a substantial premium for New Frontier Media-Del's shares over the
then-current market price. Section 203 would also discourage certain potential
acquirers unwilling to comply with its provisions.

INTERESTED DIRECTOR TRANSACTIONS

Under both Delaware and Colorado law, contracts or transactions in which
one or more of a corporation's directors has an interest are generally not void
or voidable because of such interest provided that certain conditions, such as
obtaining the required approval and fulfilling the requirements of good faith
and full disclosure, are met. With certain exceptions, the conditions are
similar under Delaware and Colorado law. To authorize or ratify the transaction,
under Colorado law (a) either the shareholders or the disinterested members of
the board of directors must approve any such contract or transaction in good
faith after full disclosure of the material facts, or (b) the contract or
transaction must have been fair as to the corporation. The same requirements
apply under Delaware law, except that the fairness requirement is tested as of
the time the transaction is authorized, ratified or approved by the board, the
shareholders or a committee of the board. If board approval is sought, the
contract or transaction must be approved by a majority vote of the disinterested
directors (though less than a majority of a quorum), except that interested
directors may be counted for purposes of establishing a quorum.

LOANS TO DIRECTORS AND OFFICERS
COLORADO

The board of directors cannot make a loan to a director or officer (or any
entity in which such person has an interest), or guaranty any obligation of such
person or entity, until at least ten days after notice has been given to the
shareholders who would be entitled to vote on the transaction if it were being
submitted for shareholder approval.

DELAWARE

The board of directors may make loans to, or guaranties for, directors and
officers on such terms as they deem appropriate whenever, in the board's
judgment, the loan can be expected to reasonably benefit the corporation.

SHAREHOLDER DERIVATIVE SUITS

Under both Delaware and Colorado law, a stockholder may bring a derivative
action on behalf of the corporation only if the stockholder was a stockholder of
the corporation at the time of the transaction in question or if his or her
stock thereafter devolved upon him or her by operation of law.

COLORADO

Provides that the corporation or the defendant in a derivative suit may
make a motion to the court for an order requiring the plaintiff shareholder to
furnish a security bond unless the shareholder holds at least 5% of the total
shares or the market value of the shares is at least $25,000. If the shareholder
is unsuccessful, the shareholder is liable for the defendant's costs and
reasonable expenses, but not attorney's fees.

DELAWARE

Delaware does not have a similar bonding requirement.

APPRAISAL/ DISSENTERS' RIGHTS

Under both Delaware and Colorado law, a shareholder of a corporation
participating in certain major corporate transactions may, under varying
circumstances, be entitled to appraisal/dissenters' rights pursuant to which
such shareholder may receive cash in the amount of the fair market value of his
or her shares in lieu of the consideration he or she would otherwise receive in
the transaction. Under both Delaware and Colorado law, such fair market value is
determined exclusive of any element of value arising from the accomplishment or
expectation of the merger or consolidation.

COLORADO

Dissenters' rights are not available to shareholders of a corporation if
the merger does not require shareholder approval or if the corporation's shares
are listed on a national securities exchange registered under the Federal
Securities Act of 1934, or on a National Association of Securities Dealers
Automated Quotations System, or there are more than 2,000 shareholders at the
time of the record date for notice of the shareholders' meeting where the vote
will occur. There are no dissenters' rights with respect to this proposed merger
because New Frontier Media-Co's shares are listed on the Nasdaq Stock Market.

DELAWARE

Appraisal rights are not available (a) with respect to the sale, lease or
exchange of all or substantially all of the assets of a corporation, (b) with
respect to a merger or consolidation by a corporation the shares of which are
either listed on a national securities exchange or are held of record by more
than 2,000 holders if such stockholders receive only shares of the surviving
corporation or shares of any other corporation that are either listed on a
national securities exchange or held of record by more than 2,000 holders, plus
cash in lieu of fractional shares of such corporations, or to stockholders of a
corporation surviving a merger if no vote of the stockholders of the surviving
corporation is required to approve the merger under certain provisions of
Delaware law.

DISSOLUTION
COLORADO

For corporations formed prior to July 1, 1994, after the Board of Directors
recommends a voluntary dissolution to the shareholders, it must be approved by
two-thirds of all the votes entitled to be cast for each voting group, unless
the Articles of Incorporation provide for a lesser number. New Frontier
Media-Co's Articles of Incorporation have no such provision. In the event of
such a board-initiated dissolution, Colorado law allows a Colorado corporation
to include in its articles of incorporation, by-laws adopted by the shareholders
or as part of the Board recommendation, a supermajority (greater than a simple
majority) voting requirement in connection with dissolutions. Under Colorado
law, individual shareholders may only initiate dissolution by way of a judicial
proceeding.

DELAWARE

Unless the board of directors approves the proposal to dissolve, the
dissolution must be approved by all the stockholders entitled to vote thereon.
Only if the board of directors initially approves the

dissolution may it be approved by a simple majority of the outstanding shares of
the corporation's stock entitled to vote. In the event of such a board initiated
dissolution, Delaware law allows a Delaware corporation to include in its
certificate of incorporation a supermajority (greater than a simple majority)
voting requirement in connection with dissolutions. New Frontier Media-Del's
Certificate of Incorporation contains no such supermajority requirement,
however, and a majority of the outstanding shares entitled to vote, voting at a
meeting at which a quorum is present, would be sufficient to approve a
dissolution of New Frontier Media-Del that had previously been approved by its
Board of Directors.

THE BOARD RECOMMENDS THAT YOU VOTE FOR APPROVAL OF THE COMPANY'S REINCORPORATION
IN DELAWARE.

PROPOSAL FOUR
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

Management recommends that Singer Lewak Greenbaum & Goldstein LLP be
ratified as the principal accounting firm to be utilized by the Company
throughout the year ending March 31, 2002.

Spicer, Jeffries & Co. was the principal accounting firm for the Company
until December 22, 2000, at which time the Company discharged Spicer, Jeffries &
Co.

The Company anticipates that representatives of Singer Lewak Greenbaum &
Goldstein LLP will attend the Annual Meeting for the purpose of responding to
appropriate questions. At the Annual Meeting, the representatives of Singer
Lewak Greenbaum & Goldstein LLP will be afforded an opportunity to make a
statement if they so desire. Representatives of Spicer, Jeffries & Co. are not
expected to attend the Annual Meeting.

Spicer, Jeffries & Co.'s Annual Report covering the two fiscal years ended
March 31, 2000 and 1999 did not include an adverse opinion or disclaimer of
opinion, and was not qualified as to the audit scope or accounting principles.
The opinions, however, did include an emphasis of a matter relating to
uncertainty as to the litigation disclosed.

In connection with the audits of the two most recent fiscal years and
during any subsequent interim periods preceding the termination of Spicer,
Jeffries & Co., there did not develop any disagreement on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure between such former independent certified accountants and
management of the Company or other reportable events which have not been
resolved to the Company's former independent certified accountants'
satisfaction. Spicer, Jeffries & Co. had been the Company's independent
certified accountants since approximately June, 1991. As of December 22, 2000,
the Company engaged Singer, Lewak, Greenbaum & Goldstein, LLP as the Company's
independent auditors to replace Spicer, Jeffries & Co.

AUDIT FEES

The aggregate fees billed for professional services rendered by Spicer,
Jeffries & Co. and Singer Lewak Greenbaum & Goldstein LLP for the audit of the
Company's annual financial statements for the fiscal year ended March 31, 2001,
and reviews of the financial statements included in the Company's Forms 10-Q for
that year, and all other audit related fees were $350,112.

FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES

Spicer, Jeffries & Co. and Singer Lewak Greenbaum & Goldstein LLP billed no
fees to the Company for financial information systems design and implementation
during the fiscal year ended March 31, 2001.

ALL OTHER FEES

Spicer, Jeffries & Co. and Singer Lewak Greenbaum & Goldstein LLP billed no
fees to the Company for other fees during the year ended March 31, 2001.

AUDITOR INDEPENDENCE

The Audit Committee has considered the effect that provision of the
services described under "Financial Information Systems Design and
Implementation Fees" and "All Other Fees" may have on the independence of Singer
Lewak Greenbaum & Goldstein LLP. The Audit Committee has determined that
provision of those services is compatible with maintaining the independence of
Singer Lewak Greenbaum & Goldstein LLP as the Company's principal auditor.

THE BOARD RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF THE SELECTION OF
SINGER LEWAK GREENBAUM & GOLDSTEIN LLP AS THE COMPANY'S AUDITORS FOR THE 2002
FISCAL YEAR.

SHAREHOLDER PROPOSALS

All shareholder proposals which are intended to be presented at the 2002
Annual Meeting of Shareholders of the Company must be received by the Company no
later than April 1, 2002, for inclusion in the Board of Directors' proxy
statement and form of proxy relating to the meeting.

OTHER BUSINESS

The Board of Directors knows of no other business to be acted upon at the
meeting. However, if any other business properly comes before the meeting, it is
the intention of the persons named in the enclosed proxy to vote on such matters
in accordance with their best judgment.

The prompt return of the proxy will be appreciated and helpful in obtaining
the necessary vote. Therefore, whether or not you expect to attend the meeting,
please sign the proxy and return it in the enclosed envelope.

BY ORDER OF THE BOARD OF DIRECTORS

Michael Weiner
Secretary

Dated: July 23, 2001

EXHIBIT A

NEW FRONTIER MEDIA, INC.
2001 INCENTIVE STOCK OPTION PLAN

1. ESTABLISHMENT, PURPOSE AND TYPES OF AWARDS

New Frontier Media, Inc. hereby establishes the NEW FRONTIER MEDIA, INC.
2001 INCENTIVE STOCK OPTION PLAN (the "Plan"). The purpose of the Plan is to
promote the long-term growth and profitability of New Frontier Media, Inc. (the
"Corporation") by (i) providing key people with incentives to improve
stockholder value and to contribute to the growth and financial success of the
Corporation and (ii) enabling the Corporation to attract, retain and reward the
best available persons for positions of substantial responsibility.

The Plan permits the granting of stock options, including non-qualified
stock options and incentive stock options qualifying under Section 422 of the
Code, in any combination (collectively, "Options").

2. DEFINITIONS

Under this Plan, except where the context otherwise indicates, the
following definitions apply:

(a) "Board" shall mean the Board of Directors of the Corporation.

(b) "Change in Control" shall mean (i) any sale, exchange or other
disposition of substantially all of the Corporation's assets; or (ii) any
merger, share exchange, consolidation or other reorganization or business
combination in which the Corporation is not the surviving or continuing
corporation, or in which the Corporation's stockholders become entitled to
receive cash, securities of the Corporation other than voting common stock, or
securities of another issuer.

(d) "Committee" shall mean the Board or committee of Board members
appointed pursuant to Section 3 of the Plan to administer the Plan.

(e) "Common Stock" shall mean shares of the Corporation's common stock,
$.0001 par value.

(f) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

(g) "Fair Market Value" of a share of the Corporation's Common Stock for
any purpose on a particular date shall be the last reported sale price per share
of Common Stock, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on a national securities exchange or
included for quotation on a system established by the National Association of
Securities Dealers, Inc. ("Nasdaq System"), or if the Common Stock is not so
listed or admitted to trading or included for quotation, the last quoted price,
or if the Common Stock is not so quoted, the average of the high bid and low
asked prices, regular way, in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotation System or,
if such system is no longer in use, the principal other automated quotations
system that may then be in use or, if the Common Stock is not quoted by any such
organization, the average of the closing bid and asked prices, regular way, as
furnished by a professional market maker making a market in the Common Stock as
selected in good faith by the Committee or by such other source or sources as
shall be selected in good faith by the Committee; and, provided further, that in
the case of incentive stock options, the determination of Fair Market Value
shall be made by the Committee in good faith in conformance with the Treasury
Regulations under Section 422 of the Code. If, as the case may be, the relevant
date is not a trading day, the

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determination shall be made as of the next preceding trading day. As used
herein, the term "trading day" shall mean a day on which public trading of
securities occurs and is reported in the principal consolidated reporting system
referred to above, or if the Common Stock is not listed or admitted to trading
on a national securities exchange or included for quotation on the Nasdaq
System, any day other than a Saturday, a Sunday or a day in which banking
institutions in the State of New York are closed.

(h) "Grant Agreement" shall mean a written agreement between the
Corporation and a grantee memorializing the terms and conditions of an Option
granted pursuant to the Plan.

(i) "Grant Date" shall mean the date on which the Committee formally acts
to grant an Option to a grantee or such other date as the Committee shall so
designate at the time of taking such formal action.

(j) "Parent" shall mean a corporation, whether now or hereafter existing,
within the meaning of the definition of "parent corporation" provided in Section
424(e) of the Code, or any successor thereto of similar import.

(k) "Rule 16b-3" shall mean Rule 16b-3 as in effect under the Exchange Act
on the effective date of the Plan, or any successor provision prescribing
conditions necessary to exempt the issuance of securities under the Plan (and
further transactions in such securities) from Section 16(b) of the Exchange Act.

(l) "Securities Act" shall mean the Securities Act of 1933, as amended.

(m) "Subsidiary" and "Subsidiaries" shall mean only a corporation or
corporations, whether now or hereafter existing, within the meaning of the
definition of "subsidiary corporation" provided in Section 424(f) of the Code,
or any successor thereto of similar import.

3. ADMINISTRATION

(a) Procedure. The Plan shall be administered by the Board. In the
alternative, the Board may appoint a Committee consisting of not less than two
(2) members of the Board to administer the Plan on behalf of the Board, subject
to such terms and conditions as the Board may prescribe. Once appointed, the
Committee shall continue to serve until otherwise directed by the Board. From
time to time, the Board may increase the size of the Committee and appoint
additional members thereof, remove members (with or without cause) and appoint
new members in substitution therefor, fill vacancies, however caused, and remove
all members of the Committee and, thereafter, directly administer the Plan. In
the event that the Board is the administrator of the Plan in lieu of a
Committee, the term "Committee" as used herein shall be deemed to mean the
Board.

Members of the Board or Committee who are either eligible for Options or
have been granted Options may vote on any matters affecting the administration
of the Plan or the grant of Options pursuant to the Plan, except that no such
member shall act upon the granting of an Option to himself or herself, but any
such member may be counted in determining the existence of a quorum at any
meeting of the Board or the Committee during which action is taken with respect
to the granting of an Option to him or her.

The Committee shall meet at such times and places and upon such notice as
it may determine. A majority of the Committee shall constitute a quorum. Any
acts by the Committee may be taken at any meeting at which a quorum is present
and shall be by majority vote of those members entitled to vote. Additionally,
any acts reduced to writing or approved in writing by all of the members of the
Committee shall be valid acts of the Committee.

(b) Rule 16b-3 Requirements. The members of the Committee shall be both
"non-employee directors" within the meaning of Rule 16b-3, and "outside
directors" within the meaning of Section 162(m) of the Code. The Board shall
take all action necessary to cause the Plan to be administered in accordance
with the then effective provisions of Rule 16b-3, provided that any amendment to
the Plan required for compliance with such provisions shall be made in
accordance with Section 10 of the Plan.

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(c) Powers of the Committee. The Committee shall have all the powers vested
in it by the terms of the Plan, such powers to include authority, in its sole
and absolute discretion, to grant Options under the Plan, prescribe Grant
Agreements evidencing such Options and establish programs for granting Options.
The Committee shall have full power and authority to take all other actions
necessary to carry out the purpose and intent of the Plan, including, but not
limited to, the authority to:

(i) determine the eligible persons to whom, and the time or times at
which Options shall be granted,

(ii) determine the types of Options to be granted,

(iii) determine the number of shares to be covered by each Option,

(iv) impose such terms, limitations, restrictions and conditions upon
any such Option as the Committee shall deem appropriate,

(v) modify, extend or renew outstanding Options, accept the surrender
of outstanding Options and substitute new Options, provided that no such
action shall be taken with respect to any outstanding Option which would
adversely affect the grantee without the grantee's consent, and

(vi) accelerate or otherwise change the time in which an Option may be
exercised, in whole or in part, including, but not limited to, any
restriction or condition with respect to the vesting or exercisability of
an Option following termination of any grantee's employment.

The Committee shall have full power and authority to administer and
interpret the Plan and to adopt such rules, regulations, agreements, guidelines
and instruments for the administration of the Plan and for the conduct of its
business as the Committee deems necessary or advisable and to interpret same,
all within the Committee's sole and absolute discretion.

(d) Limited Liability. To the maximum extent permitted by law, no member of
the Committee shall be liable for any action taken or decision made in good
faith relating to the Plan or any Option thereunder.

(e) Indemnification. To the maximum extent permitted by law, the members of
the Committee shall be indemnified by the Corporation in respect of all their
activities under the Plan.

(f) Effect of Committee's Decision. All actions taken and decisions and
determinations made by the Committee on all matters relating to the Plan
pursuant to the powers vested in it hereunder shall be in the Committee's sole
and absolute discretion and shall be conclusive and binding on all parties
concerned, including the Corporation, its stockholders, any participants in the
Plan and any other employee of the Corporation, and their respective successors
in interest.

4. SHARES AVAILABLE FOR THE PLAN: MAXIMUM AWARDS

Subject to adjustments as provided in Section 9 of the Plan, the shares of
stock that may be delivered or purchased under the Plan, including with respect
to incentive stock options intended to qualify under Section 422 of the Code,
shall not exceed an aggregate of 500,000 shares of Common Stock of the
Corporation. The Corporation shall reserve said number of shares for Options to
be awarded under the Plan, subject to adjustments as provided in Section 9 of
the Plan. If any Option, or portion of an Option, under the Plan expires or
terminates unexercised, becomes unexercisable or is forfeited or otherwise
terminated, surrendered or canceled as to any shares, the shares subject to such
Option shall thereafter be available for further Options under the Plan unless
such shares would not be deemed available for future Options pursuant to Section
16 of the Exchange Act.

5. PARTICIPATION

Participation in the Plan shall be open to all employees, officers and
directors of the Corporation, or of any Parent or Subsidiary of the Corporation,
as may be selected by the Committee from time to

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time. To the extent necessary to comply with Rule 16b-3 or to constitute an
"outside director" within the meaning of Section 162(m) of the Code, and only in
the event that Rule 16b-3 or Section 162(m) of the Code is applicable to the
Plan or an Option awarded thereunder, Committee members shall not be eligible to
participate in the Plan while members of the Committee.

Options may be granted to such eligible persons and for or with respect to
such number of shares of Common Stock as the Committee shall determine, subject
to the limitations in Section 4 of the Plan. A grant of any type of Option made
in any one year to an eligible person shall neither guarantee nor preclude a
further grant of that or any other type of Option to such person in that year or
subsequent years.

6. STOCK OPTIONS

Subject to the other applicable provisions of the Plan, the Committee may
from time to time grant to eligible participants non-qualified stock options or
incentive stock options as that term is defined in Section 422 of the Code. The
Options granted shall be subject to the following terms and conditions.

(a) Grant of Option. The grant of an Option shall be evidenced by a Grant
Agreement, executed by the Corporation and the grantee, stating the number of
shares of Common Stock subject to the Option evidenced thereby and the terms and
conditions of such Option, in such form as the Committee may from time to time
determine.

(b) Price. The price per share payable upon the exercise of each Option
("exercise price") shall be determined by the Committee; provided, however, that
in the case of incentive stock options, the exercise price shall not be less
than 100% of the Fair Market Value of the shares on the date the Option is
granted.

(c) Payment. Options may be exercised in whole or in part by payment of the
exercise price of the shares to be acquired in accordance with the provisions of
the Grant Agreement, and/or such rules and regulations as the Committee may have
prescribed, and/or such determinations, orders, or decisions as the Committee
may have made. Payment of the exercise price shall be made in cash (or cash
equivalents acceptable to the Committee) or by such other means as the Committee
may prescribe. The Corporation may make or guarantee loans to grantees to assist
grantees in exercising Options.

The Committee, subject to such limitations as it may determine, may
authorize payment of the exercise price, in whole or in part, by delivery of a
properly executed exercise notice, together with irrevocable instructions, to:
(i) a brokerage firm designated by the Corporation to deliver promptly to the
Corporation the aggregate amount of sale or loan proceeds to pay the exercise
price and any withholding tax obligations that may arise in connection with the
exercise, and (ii) the Corporation to deliver the certificates for such
purchased shares directly to such brokerage firm.

(d) Terms of Options. The term during which each Option may be exercised
shall be determined by the Committee. In no event shall an Option be exercisable
less than six months nor more than ten years from the date it is granted. Prior
to the exercise of the Option and delivery of the shares certificates
represented thereby, the grantee shall have none of the rights of a stockholder
with respect to any shares represented by an outstanding Option.

(e) Restrictions on Incentive Stock Options. The aggregate Fair Market
Value (determined as of the Grant Date) of shares of Common Stock with respect
to which all incentive stock options first become exercisable by any grantee in
any calendar year under this or another plan of the Corporation and its Parent
and Subsidiary corporations may not exceed $100,000 or such other amount as may
be permitted from time to time under Section 422 of the Code. To the extent that
such aggregate Fair Market Value shall exceed $100,000, or other applicable
amount, such Options (taking Options into account in the order in which they
were granted) shall be treated as non-qualified stock options. In such case, the
Corporation may designate the shares of Common Stock that are to be treated as
stock acquired pursuant to the exercise of an incentive stock option by issuing
a separate certificate for such

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shares and identifying the certificate as incentive stock option shares in the
stock transfer records of the Corporation.

The exercise price of any incentive stock option granted to a grantee who
owns (within the meaning of Section 422(b)(6) of the Code, after the application
of the attribution rules in Section 424(d) of the Code) more than 10% of the
total combined voting power of all classes of shares of the Corporation or its
Parent or Subsidiary corporations (within the meaning of Sections 422 and 424 of
the Code) shall be not less than 110% of the Fair Market Value of the Common
Stock on the grant date and the term of such Option shall not exceed five years.

(f) Other Terms and Conditions. Options may contain such other provisions,
not inconsistent with the provisions of the Plan, as the Committee shall
determine appropriate from time to time. No Option shall be an incentive stock
option unless so designated by the Committee at the time of grant or in the
Grant Agreement evidencing such Option.

7. WITHHOLDING OF TAXES

The Corporation may require, as a condition to any exercise of an Option
under the Plan or a Grant Agreement (hereinafter referred to as a "taxable
vent"), that the grantee pay to the Corporation, in cash, any federal, state or
local taxes of any kind required by law to be withheld with respect to any
taxable event under the Plan. The Corporation, to the extent permitted or
required by law, shall have the right to deduct from any payment of any kind
(including salary or bonus) otherwise due to a grantee any federal, state or
local taxes of any kind required by law to be withheld with respect to any
taxable event under the Plan, or to retain or sell without notice a sufficient
number of the shares to be issued to such grantee to cover any such taxes.

8. TRANSFERABILITY

To the extent required to comply with Rule 16b-3, and in any event in the
case of an incentive stock option, no Option granted under the Plan shall be
transferable by a grantee otherwise than by will or the laws of descent and
distribution. Unless otherwise determined by the Committee in accord with the
provisions of the immediately preceding sentence, an Option may be exercised
during the lifetime of the grantee, only by the grantee or, during the period
the grantee is under a legal disability, by the grantee's guardian or legal
representative.

9. ADJUSTMENTS; BUSINESS COMBINATIONS

In the event of a reclassification, recapitalization, stock split, stock
dividend, combination of shares, or other similar event, the maximum number and
kind of shares reserved for issuance or with respect to which Options may be
granted under the Plan as provided in Section 4 shall be adjusted to reflect
such event, and the Committee shall make such adjustments as it deems
appropriate and equitable in the number, kind and price of shares covered by
outstanding Options made under the Plan, and in any other matters which relate
to Options and which are affected by the changes in the Common Stock referred to
above.

In the event of any proposed Change in Control, the Committee shall take
such action as it deems appropriate to effectuate the purposes of this Plan and
to protect the grantees of Options, which action may include, but without
limitation, any one or more of the following: (i) acceleration or change of the
exercise dates of any Option; (ii) arrangements with grantees for the payment of
appropriate consideration to them for the cancellation and surrender of any
Option; and (iii) in any case where equity securities other than Common Stock of
the Corporation are proposed to be delivered in exchange for or with respect to
Common Stock of the Corporation, arrangements providing that any Option shall
become one or more Options with respect to such other equity securities.

In the event the Corporation dissolves and liquidates (other than pursuant
to a plan of merger or reorganization), then notwithstanding any restrictions on
exercise set forth in this Plan or any Grant

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Agreement (i) each grantee shall have the right to exercise his Option at any
time up to ten days prior to the effective date of such liquidation and
dissolution; and (ii) the Committee may make arrangements with the grantees for
the payment of appropriate consideration to them for the cancellation and
surrender of any Option that is so canceled or surrendered at any time up to ten
days prior to the effective date of such liquidation and dissolution. The
Committee may establish a different period (and different conditions) for such
exercise, cancellation, or surrender to avoid subjecting the grantee to
liability under Section 16(b) of the Exchange Act. Any Option not so exercised,
canceled, or surrendered shall terminate on the last day for exercise prior to
such effective date.

10. TERMINATION AND MODIFICATION OF THE PLAN

The Board, without further approval of the stockholders, may modify or
terminate the Plan, except that no modification shall become effective without
prior approval of the stockholders of the Corporation if stockholder approval
would be required for continued compliance with Rule 16b-3.

The Committee shall be authorized to make minor or administrative
modifications to the Plan as well as modifications to the Plan that may be
dictated by requirements of federal or state laws applicable to the Corporation
or that may be authorized or made desirable by such laws. The Committee may
amend or modify the grant of any outstanding Option in any manner to the extent
that the Committee would have had the authority to make such Option as so
modified or amended. No modification may be made that would materially adversely
affect any Option previously made under the Plan without the approval of the
grantee.

11. NON-GUARANTEE OF EMPLOYMENT

Nothing in the Plan or in any Grant Agreement thereunder shall confer any
right on an employee to continue in the employ of the Corporation or shall
interfere in any way with the right of the Corporation to terminate an employee
at any time.

12. TERMINATION OF EMPLOYMENT

For purposes of maintaining a grantee's continuous status as an employee
and accrual of rights under any Options, transfer of an employee among the
Corporation and the Corporation's Parent or Subsidiaries shall not be considered
a termination of employment. Nor shall it be considered a termination of
employment for such purposes if an employee is placed on military or sick leave
or such other leave of absence which is considered as continuing intact the
employment relationship; in such a case, the employment relationship shall be
continued until the date when an employee's right to reemployment shall no
longer be guaranteed either by law or contract.

13. WRITTEN AGREEMENT

Each Grant Agreement entered into between the Corporation and a grantee
with respect to an Option granted under the Plan shall incorporate the terms of
this Plan and shall contain such provisions, consistent with the provisions of
the Plan, as may be established by the Committee.

14. NON-UNIFORM DETERMINATIONS

The Committee's determinations under the Plan (including, without
limitation, determinations of the persons to receive Options, the form, amount
and timing of such Options, the terms and provisions of such Options and the
agreements evidencing same) need not be uniform and may be made by it
selectively among persons who receive, or are eligible to receive, Options under
the Plan, whether or not such persons are similarly situated.

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15. LIMITATION ON BENEFITS

With respect to persons subject to Section 16 of the Exchange Act,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3. To the extent any provision of the Plan or action by
the Committee fails to so comply, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by the Committee.

16. LISTING AND REGISTRATION

If the Corporation determines that the listing, registration or
qualification upon any securities exchange or upon any Nasdaq system or under
any law, of shares subject to any Option is necessary or desirable as a
condition of, or in connection with, the granting of same or the issue or
purchase of shares thereunder, no such Option may be exercised in whole or in
part and no restrictions on such Option shall lapse, unless such listing,
registration or qualification is effected free of any conditions not acceptable
to the Corporation.

17. COMPLIANCE WITH SECURITIES LAWS

The Corporation may require that a grantee, as a condition to exercise of
an Option, and as a condition to the delivery of any share certificate, provide
to the Corporation, at the time of each such exercise and each such delivery, a
written representation that the shares of Common Stock being acquired shall be
acquired by the grantee solely for investment and will not be sold or
transferred without registration or the availability of an exemption from
registration under the Securities Act and applicable state securities laws. The
Corporation may also require that a grantee submit other written representations
which will permit the Corporation to comply with federal and applicable state
securities laws in connection with the issuance of the Common Stock, including
representations as to the knowledge and experience in financial and business
matters of the grantee and the grantee's ability to bear the economic risk of
the grantee's investment. The Corporation may require that the grantee obtain a
"purchaser representative" as that term is defined in applicable federal and
state securities laws. The stock certificates for any shares of Common Stock
issued pursuant to this Plan may bear a legend restricting transferability of
the shares of Common Stock unless such shares are registered or an exemption
from registration is available under the Securities Act and applicable state
securities laws. The Corporation may notify its transfer agent to stop any
transfer of shares of Common Stock not made in compliance with these
restrictions. Common Stock shall not be issued with respect to an Option granted
under the Plan unless the exercise of such Option and the issuance and delivery
of share certificates for such Common Stock pursuant thereto shall comply with
all relevant provisions of law, including, without limitation, the Securities
Act, the Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any national securities exchange or Nasdaq system upon which the
Common Stock may then be listed or quoted, and shall be further subject to the
approval of counsel for the Corporation with respect to such compliance to the
extent such approval is sought by the Committee.

18. GOVERNING LAW

The validity, construction and effect of the Plan, of Grant Agreements
entered into pursuant to the Plan, and of any rules, regulations, determinations
or decisions made by the Board or Committee relating to the Plan or such Grant
Agreements, and the rights of any and all persons having or claiming to have any
interest therein or thereunder, shall be determined exclusively in accordance
with applicable federal laws and the laws of the State of Colorado, without
regard to its conflict of laws rules and principles.

19. PLAN SUBJECT TO ARTICLES OF INCORPORATION AND BY-LAWS

This Plan is subject to the Articles of Incorporation and By-Laws of the
Corporation, as they may be amended from time to time.

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20. EFFECTIVE DATE; TERMINATION DATE

The Plan is effective as of June 25, 2001, the date on which the Plan was
adopted by the Board, subject to approval of the stockholders within twelve
months of such date. Unless previously terminated, the Plan shall terminate on
the close of business on June 25, 2011, ten years from the effective date.
Subject to other applicable provisions of the Plan, all Options granted under
the Plan prior to termination of the Plan shall remain in effect until such
Options have been satisfied or terminated in accordance with the Plan and the
terms of such Options.

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EXHIBIT B

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this "Merger Agreement") is made and
entered into on August __, 2001, pursuant to Section 7-111-104 of the Colorado
Business Corporation Act (the "CBCA") and Section 253 of the General Corporation
Law of the State of Delaware (the "DGCL") by and between New Frontier Media,
Inc., a Colorado corporation (the "Parent Corporation"), and New Frontier Media,
Inc., a Delaware corporation (the "Subsidiary Corporation"), being sometimes
referred to herein individually as the "Constituent Corporation" and
collectively as the "Constituent Corporations."

WITNESSETH:

WHEREAS, the Parent Corporation is a corporation duly organized, validly
existing and in good standing under the laws of the State of Colorado with an
authorized capital stock consisting of 50,000,000 shares of common stock, $.0001
par value (the "Parent Corporation Common Stock") and 5,000,000 shares of
preferred stock, $.10 par value (the "Parent Corporation Preferred Stock"), of
which [21,086,680] shares of Parent Corporation Common Stock are issued and
outstanding on the date hereof and no shares of Parent Corporation Preferred
Stock are issued and outstanding on the date hereof; and

WHEREAS, the Subsidiary Corporation is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
with an authorized capital stock consisting of 50,000,000 shares of common stock
$.0001 par value (the "Subsidiary Corporation Common Stock") and 5,000,000
shares of preferred stock $.10 par value (the "Subsidiary Corporation Preferred
Stock"), of which one share of the Subsidiary Corporation Common Stock is issued
and outstanding on the date hereof and held by the Parent Corporation; and

WHEREAS, the Board of Directors of the Parent Corporation has determined
that, for purposes of effecting the reincorporation of the Parent Corporation in
the State of Delaware, it is advisable and in the best interests of the Parent
Corporation that the Parent Corporation merge with and into the Subsidiary
Corporation upon the terms and conditions set forth herein; and

WHEREAS, the respective Boards of Directors of the Constituent Corporations
have authorized and approved the merger of the Parent Corporation with and into
the Subsidiary Corporation subject to and upon the terms and conditions of this
Merger Agreement (the "Merger") and Section 7-111-104 of the CBCA and Section
253 of the DGCL, and have approved this Merger Agreement and directed that it be
executed by the undersigned officers and that it be submitted to their
respective shareholders for approval; and

WHEREAS, it is the intention of the Constituent Corporations that the
Merger shall be a tax free reorganization within the meaning of Section 368 (a)
(1) (F) of the Internal Revenue Code of 1986, as amended (the "Code").

NOW, THEREFORE in consideration of the premises, which are hereby
incorporated into the terms hereof, and the mutual covenants and agreements
herein contained, and for the purpose of stating the terms and conditions of the
merger, the mode of effectuating the same, and other details and provisions that
are deemed desirable, the parties have agreed and do hereby agree, subject to
the terms and conditions set forth as follows:

ARTICLE I.
TERMS OF MERGER

1.1 MERGER. On the Effective Date of the Merger (as hereinafter defined),
in accordance with the provisions of Section 7-111-104 et seq. of the CBCA,
Section 253 of the DGCL and Section

B-1

368(a)(1)(F) of the Code, the Parent Corporation shall be merged with and into
the Subsidiary Corporation, which shall be sometimes referred to herein as the
"Surviving Corporation" upon the terms and conditions set forth in the
subsequent provisions of this Merger Agreement.

1.2 APPROVAL OF SHAREHOLDERS. This Merger Agreement shall be submitted as
promptly as practicable to the respective shareholders of the Parent Corporation
and the Subsidiary Corporation as provided by the CBCA and the DGCL. After
adoption and approval of the Merger by the respective shareholders of the Parent
Corporation and the Subsidiary Corporation, and provided this Merger Agreement
is not terminated and abandoned pursuant to the provisions hereof, Articles of
Merger shall be filed in accordance with the applicable provisions of the CBCA
and a Certificate of Merger shall be filed in accordance with the applicable
provisions of the DGCL.

1.3 FILINGS AND EFFECTIVENESS. As soon as practicable following the date of
execution hereof, the Parent Corporation and the Subsidiary Corporation will
cause (i) the Articles of Merger along with any other required document to be
filed with the Secretary of State of the State of Colorado pursuant to Sections
7-111-105 and 107 of the Colorado Business Corporation Act, and (ii) the
Certificate of Ownership and Merger along with any other required document to be
filed with the Office of the Secretary of the State of Delaware pursuant to
Section 253 of the DGCL. The Merger shall become effective when the last to
occur of the following actions shall have been completed:

(a) This Merger Agreement and the Merger shall have been adopted and
approved by the shareholders of each of the Constituent Corporations in
accordance with the requirements of the CBCA and the DGCL;

(b) All of the conditions precedent to the consummation of the Merger
specified in this Merger Agreement shall have been satisfied or duly waived;

(c) An executed Articles of Merger meeting the requirements of the CBCA
shall have been filed with the Secretary of State of the State of Colorado and
said Secretary of State shall have issued an Articles of Merger for a period of
90 days, and the surviving corporation shall have performed all other
requirements of Section 7-111-107 of the CBCA; and

(d) An executed Certificate of Ownership and Merger meeting the
requirements of the DGCL shall have been accepted for recording by the Secretary
of the State of Delaware and said Secretary of State shall have issued a
Certificate of Ownership and Merger.

The date and time when the Merger shall become effective, as aforesaid, is
herein called the "Effective Date of the Merger."

1.4 EFFECT OF MERGER. The presently issued and outstanding shares of
capital stock of the Parent Corporation shall be converted on a one-for-one
basis into shares of the capital stock of the same class of the Surviving
Corporation.

The Subsidiary Corporation, as the Surviving Corporation in the Merger,
will continue to be governed by the laws of the State of Delaware and the
separate corporate existence of the Subsidiary Corporation and all of its
rights, privileges, immunities and franchises, public or private, and all of its
duties and liabilities as a corporation organized under the DGCL will continue
unaffected and unimpaired by the merger.

At the close of business on the Effective Date of the Merger, the existence
of the Parent Corporation as a distinct entity shall cease. At that time all
rights, franchises and interests of the Parent Corporation, respectively, in and
to every type of property, whether real, personal or mixed, of the Parent
Corporation and the Subsidiary Corporation, and all debts due to the Parent
Corporation or the Subsidiary Corporation on whatever account, and all other
things in action or belonging to each of said corporations, shall be vested in
the Subsidiary Corporation. All property, rights, privileges, powers and
franchises, and all and every other interest of the Parent Corporation or the
Subsidiary Corporation as of the Effective Date of the Merger, including, but
not limited to, all patents, trademarks, licenses, registrations, and all other
intellectual properties, shall thereafter be the property of the Subsidiary
Corporation to the same extent and effect as such was of the respective
Constituent

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Corporations prior to the Effective Date of the Merger, and the title to any
real estate vested by deed or otherwise in the Parent Corporation and the
Subsidiary Corporation shall not revert or be in any way impaired by reason of
the Merger; provided, however, that all rights of creditors and all liens upon
any property of the Parent Corporation or the Subsidiary Corporation shall
thenceforth attach to the Subsidiary Corporation and may be enforced against it
to the same extent as if said debts, liabilities, and duties had been incurred
or contracted by the Subsidiary Corporation. Neither the rights of creditors nor
any liens or security interests upon the property of either of the Constituent
Corporations shall be impaired by the Merger.

The Subsidiary Corporation shall carry on business with the assets of the
Parent Corporation and the Subsidiary Corporation. The established offices and
facilities of the Parent Corporation immediately prior to the Merger shall
become the established offices and facilities of the Subsidiary Corporation.

The presently issued and outstanding shares of the common stock, $.0001 par
value of the Subsidiary Corporation, issued to the Parent Corporation, shall be
cancelled.

All corporate acts, plans, employee benefits, policies, resolutions,
approvals and authorizations of the shareholders, board of directors, committees
elected or appointed by the Board of Directors, officers and agents of the
Parent Corporation, which were valid and effective immediately prior to the
Merger shall be taken for all purposes as the acts, plans, policies,
resolutions, approvals and authorizations of the Surviving Corporation and shall
be as effective and binding thereon as the same were with respect to the Parent
Corporation. The employees of the Parent Corporation shall become the employees
of the Surviving Corporation and continue to be entitled to the same rights and
benefits which they enjoyed as employees of the Parent Corporation.

1.5 CERTIFICATE OF INCORPORATION OF SURVIVING CORPORATION. The Certificate
of Incorporation of the Subsidiary Corporation as in effect immediately prior to
the Effective Date of the Merger shall continue in full force and effect as the
Certificate of Incorporation of the Surviving Corporation until duly amended in
accordance with the provisions thereof and applicable law.

1.6 BY-LAWS OF SURVIVING CORPORATION. The By-Laws of the Subsidiary
Corporation as in effect immediately prior to the Effective Date of the Merger
shall continue in full force and effect as the By-Laws of the Surviving
Corporation until altered, amended or repealed as provided in the By-Laws or as
provided by applicable law.

1.7 DIRECTORS OF SURVIVING CORPORATION. The directors of the Parent
Corporation as of the Effective Date of the Merger shall be and become the
directors of the Surviving Corporation.

1.8 OFFICERS OF SURVIVING COMPANY. The officers of the Parent Corporation
as of the Effective Date of the Merger shall be and become the officers of the
Surviving Corporation.

ARTICLE II.
CONDITIONS TO MERGER

The obligations of the Constituent Corporations to consummate the Merger
are subject to satisfaction of the following conditions:

2.1 AUTHORIZATION. The holders of at least two-thirds of the outstanding
shares of the Parent Corporation Common Stock shall have approved this Merger
Agreement and the Merger. All necessary action shall have been taken to
authorize the execution, delivery and performance of this Merger Agreement by
each of the Constituent Corporations.

ARTICLE III.
GENERAL PROVISIONS

3.1 BINDING AGREEMENT. This Merger Agreement shall be binding upon and
shall inure to the benefit of the parties and their respective successors and
assigns; provided, however, that this Merger Agreement may not be assigned by
any party without the written consent of the other party.

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3.2 AMENDMENTS. The Board of Directors of the Parent Corporation and the
Subsidiary Corporation may amend this Merger Agreement at any time prior to the
filing of this Merger Agreement (or a certificate in lieu thereof) with the
Secretary of State of Delaware, provided that an amendment made subsequent to
the adoption of this Merger Agreement by the shareholders of either the Parent
Corporation or the Subsidiary Corporation shall not: (i) alter or change the
amount or kind of shares, securities, cash, property and/or rights to be
received in exchange for or on conversion of all or any of the shares of any
class or series thereof of the Parent Corporation or the Subsidiary Corporation,
(ii) alter or change any term of the Certificate of Incorporation of the
Surviving Corporation to be effected by the Merger, or (iii) alter or change any
of the terms and conditions of this Merger Agreement if such alteration or
change would adversely affect the holders of any class or series of capital
stock of either the Parent Corporation or the Subsidiary Corporation.

3.3 FURTHER ASSURANCES. From time to time, as and when required by the
Subsidiary Corporation or by its successors or assigns, there shall be executed
and delivered on behalf of the Parent Corporation such deeds and other
instruments, and there shall be taken or caused to be taken by the Parent
Corporation such further and other actions as shall be appropriate or necessary
in order to vest or perfect in or confirm of record or otherwise by the
Subsidiary Corporation the title to and possession of all the property, rights,
privileges, powers, franchises, assets, immunities and authority of the Parent
Corporation and otherwise to carry out the purposes of this Merger Agreement.
The Officers and Directors of the Subsidiary Corporation are fully authorized in
the name and on behalf of the Parent Corporation or otherwise to take any and
all such action and to execute and deliver any and all such deeds or other
instruments.

3.4 ABANDONMENT. At any time before the Effective Date of the Merger, this
Merger Agreement may be terminated and the Merger may be abandoned for any
reason whatsoever by the Board of Directors of either the Parent Corporation or
the Subsidiary Corporation, or by both, by the adoption of appropriate
resolutions and written notification thereof to the other party to the Merger,
notwithstanding the approval of this Merger Agreement by the shareholders of the
Parent Corporation or the Subsidiary Corporation, or by both. In the event of
the termination of this Merger Agreement and the abandonment of the Merger
pursuant to the provisions of this section, this Merger Agreement shall become
void and have no effect, without any liability on the part of either of the
Constituent Corporations or their respective officers, directors or shareholders
in respect thereof.

3.5 GOVERNING LAW. This Merger Agreement shall be construed, interpreted
and enforced in accordance with and governed by the laws of the State of
Delaware and, so far as applicable, the merger provisions of the CBCA.

IN WITNESS WHEREOF, each of the undersigned corporations has caused this
Merger Agreement to be signed in its corporate name by its duly authorized
officer as of the ___ day of August, 2001.

ATTEST: NEW FRONTIER MEDIA, INC.,
a Colorado corporation

By: By:
Michael Weiner, Secretary Mark Kreloff
Chairman and Chief Executive Officer

ATTEST: NEW FRONTIER MEDIA, INC.,
a Delaware corporation

By: By:
Michael Weiner, Secretary Mark Kreloff
Chairman and Chief Executive Officer

B-4

EXHIBIT C

CERTIFICATE OF INCORPORATION
OF
NEW FRONTIER MEDIA, INC.

FIRST: The name of the corporation is: NEW FRONTIER MEDIA, INC.

SECOND: The address of its registered office in the State of Delaware is to
be located at The Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle. The name of its registered agent at such
address is The Corporation Trust Company.

THIRD: The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of Delaware.

FOURTH: The total number of shares of stock which the corporation shall
have authority to issue is FIFTY MILLION (50,000,000) shares of Common Stock,
par value $.0001 per share (the "Common Stock"), and FIVE MILLION (5,000,000)
shares of Preferred Stock, par value $.10 per share (the "Preferred Stock").

The Preferred Stock of the corporation shall be issued by the Board of
Directors of the corporation in one or more classes or one or more series within
any class and such classes or series shall have such voting powers, full or
limited, or no voting powers, and such designations, preferences, limitations or
restrictions as the Board of Directors of the corporation may determine, from
time to time.

The holders of the Common Stock are entitled to one vote for each share
held at all meetings of stockholders (and written actions in lieu of meetings).
There shall be no cumulative voting.

Shares of Common Stock and Preferred Stock may be issued from time to time
as the Board of Directors shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.

FIFTH: The name and mailing address of the sole incorporator is as follows:

NAME MAILING ADDRESS
- ------------------------------------- ---------------------------------------

Hank Gracin Lehman & Eilen LLP
50 Charles Lindbergh Boulevard,
Suite 505
Uniondale, New York 11553

SIXTH: In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to make, alter or repeal
the By-laws of the corporation.

SEVENTH: Meetings of stockholders may be held within or without the State
of Delaware, as the By-laws may provide. The books of the corporation may be
kept (subject to any provisions contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the By-laws of the corporation. Elections of directors
need not be by written ballot unless the By-laws of the corporation shall so
provide.

EIGHTH: The affairs and management of the Corporation shall be under the
control of our Board of Directors. The number of directors of the Corporation
that shall constitute the Board of Directors shall not be less than three nor
more than ten, except that the Corporation may have fewer than three Board
members in accordance with the General Corporation Law of Delaware. The number
of directors shall be fixed, from time to time and within the limits prescribed
herein, by resolution adopted by the affirmative vote of the Corporation's Board
of Directors.

C-1

The Board of Directors shall be divided into three classes, which shall be
denominated as Class I, II and III. The initial term of office of Class I
directors shall expire at the annual meeting of shareholders to be held in 2004
and until their respective successors are duly elected and qualified or until
their resignation or removal, and the initial Class I shall consist of three
directors. The initial term of office of Class II directors shall expire at the
annual meeting of shareholders to be held in 2003 and until their respective
successors are duly elected and qualified, or until their resignation or
removal, and the initial Class II shall consist of two directors. The initial
term of office of Class III directors shall expire at the annual meeting of the
shareholders to be held in 2002 and until their respective successors are duly
elected and qualified, or until their resignation or removal, and the initial
Class III shall consist of two directors. Subject to the foregoing, at each
annual meeting of shareholders, commencing at the annual meeting to be held in
2002, the successors to the class of directors whose term shall then expire
shall be elected to hold office for a term expiring at the third succeeding
annual meeting and until their successors shall be duly elected and qualified,
or until their resignation or removal. In the event that the number of directors
is increased or decreased by resolution of the Board of Directors, the Board
shall specify in such resolution which class of directors shall be
correspondingly increased or decreased, as the case may be, so that the classes
shall be as nearly equal in number as possible.

Any director may only be removed for cause and only by the vote of a
majority of the entire Board of Directors.

NINTH: Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corpora-tion or of any creditor or stockholder thereof or on the
applica-tion of any receiver or receivers appointed for this corporation under
the provisions of Section 291 of Title 8 of the Delaware General Corporation Law
or on the application of trustees in dissolution or of any receiver or receivers
appointed for this corporation under the provisions of Section 279 of Title 8 of
the Delaware General Corporation Law order a meeting of the creditors or class
of creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case may be, to be summoned in such manner as the said court
directs. If a majority in number representing three-fourths in value of the
creditors or class of creditors, and/or of the stockholders or class of
stockholders of this corporation, as the case may be, agree to any compromise or
arrangement and to any reorganization of this corporation as a consequence of
such compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said application
has been made, be binding on all the creditors or class of creditors, and/or on
all the stockholders or class of stockhold-ers, of this corporation, as the case
may be, and also on this corporation.

TENTH: Any amendment to this Certificate of Incorporation shall require the
affirmative vote of seventy-five (75%) percent of the shares of each class
outstanding and entitled to vote thereon.

ELEVENTH: The corporation shall to the fullest extent permitted by Section
145 of the Delaware General Corporation Law, as the same may be amended or
supplemented, or by any successor thereto, indemnify and reimburse any and all
persons whom it shall have the power to indemnify under said Section from and
against any and all of the expenses, liabilities or other matters referred to
in, or covered by said Section. Notwithstanding the foregoing, the
indemnification provided for in this Article ELEVENTH shall not be deemed
exclusive of any other rights to which those entitled to receive indemnification
or reimbursement hereunder may be entitled under any By-law of the corporation,
agreement, vote of stockholders or disinterested directors or otherwise.

TWELFTH: No director of this corporation shall be personally liable to the
corporation or any of its stockholders for monetary damages for breach of a
fiduciary duty as a director, except for liability (i) for any breach of a
director's duty of loyalty to the corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law as the same exists or hereafter may be amended or (iv) for any
transaction from which the director derived an improper benefit. If the

C-2

Delaware General Corporation Law hereafter is amended to authorize the further
elimination or limitation of the liability of directors, then liability of a
director of the corporation, in addition to limitation on personal liability
provided herein, shall be limited to the fullest extent permitted by the amended
Delaware General Corporation Law. Any repeal or modification of this paragraph
by the stockholders of the corporation shall be prospective only, and shall not
adversely affect any limitation on the personal liability of directors of the
corporation existing at the time of such repeal or modification.

IN WITNESS WHEREOF, I, the undersigned, being the incorporator hereinbefore
named, hereby declare and certify the facts herein stated are true, and
accordingly have hereunto set my hand this ___ day of August, 2001.

________________________________________________
Hank Gracin

C-3

EXHIBIT D

BY-LAWS
OF
NEW FRONTIER MEDIA, INC.

ARTICLE I
STOCKHOLDERS

SECTION 1.1. Annual Meetings. An Annual Meeting of stockholders shall be
held for the election of Directors at such date, time and place either within or
without the State of Delaware as may be designated by the Board of Directors
from time to time. Any other proper business may be transacted at the Annual
Meeting.

SECTION 1.2. Special Meetings. Special meetings of stockholders may be
called at any time by the Chairman or Co-Chairman of the Board, if any, the Vice
Chairman of the Board, if any, or the President to be held at such date, time
and place either within or without the State of Delaware as may be stated in the
notice of the meeting. A special meeting of stockholders shall be called by the
Secretary upon the written request, stating the purpose of the meeting, of
stockholders who together own of record a majority of the outstanding shares of
each class of stock entitled to vote at such meeting.

SECTION 1.3. Notice of Meetings. Whenever stockholders are required or
permitted to take any action at a meeting, a written notice of the meeting shall
be given which shall state the place, date and hour of the meeting, and, in the
case of a special meeting, the purpose or purposes for which the meeting is
called. Unless otherwise provided by law, the written notice of any meeting
shall be given not less than ten nor more than sixty days before the date of the
meeting to each stockholder entitled to vote at such meeting. If mailed, such
notice shall be deemed to be given when deposited in the United States mail,
postage prepaid, directed to the stockholder at such stockholder's address as it
appears on the records of the Corporation.

SECTION 1.4. Adjournments. Any meeting of stockholders, annual or special,
may adjourn from time to time to reconvene at the same or some other place, and
notice need not be given of any such adjourned meeting if the time and place
thereof are announced at the meeting at which the adjournment is taken. At the
adjourned meeting the Corporation may transact any business which might have
been transacted at the original meeting. If the adjournment is for more than
thirty days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.

SECTION 1.5. Quorum. At each meeting of stockholders, except where
otherwise provided by law or the certificate of incorporation or these by-laws,
the holders of a majority of the outstanding shares of each class of stock
entitled to vote at the meeting, present in person or represented by proxy,
shall constitute a quorum. For purposes of the foregoing, two or more classes or
series of stock shall be considered a single class if the holders thereof are
entitled to vote together as a single class at the meeting. In the absence of a
quorum the stockholders so present may, by majority vote, adjourn the meeting
from time to time in the manner provided by Section 1.4 of these by-laws until a
quorum shall attend. Shares of its own capital stock belonging on the record
date for the meeting to the Corporation or to another corporation, if a majority
of the shares entitled to vote in the election of directors of such other
corporation is held, directly or indirectly, by the Corporation, shall neither
be entitled to vote nor be counted for quorum purposes; provided, however, that
the foregoing shall not limit the right of the Corporation to vote stock,
including but not limited to its own stock, held by it in a fiduciary capacity.

SECTION 1.6. Organization. Meetings of stockholders shall be presided over
by the Chairman or Co-Chairman of the Board, if any, or in the absence of the
Chairman or Co-Chairman of the Board

D-1

by the Vice Chairman of the Board, if any, or in the absence of the Vice
Chairman of the Board by the President, or in the absence of the President by a
Vice President, or in the absence of the foregoing persons by a chairman
designated by the Board of Directors, or in the absence of such designation by a
chairman chosen at the meeting. The Secretary, or in the absence of the
Secretary an Assistant Secretary, shall act as secretary of the meeting, but in
the absence of the Secretary and any Assistant Secretary the chairman of the
meeting may appoint any person to act as secretary of the meeting.

SECTION 1.7. Voting; Proxies. Unless otherwise provided in the certificate
of incorporation, each stockholder entitled to vote at any meeting of
stockholders shall be entitled to one vote for each share of stock held by such
stockholder which has voting power upon the matter in question. If the
certificate of incorporation provides for more or less than one vote for any
share on any matter, every reference in these by-laws to a majority or other
proportion of stock shall refer to such majority or other proportion of the
votes of such stock. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for such
stockholder by proxy, but no such proxy shall be voted or acted upon after three
years from its date, unless the proxy provides for a longer period. A duly
executed proxy shall be irrevocable if it states that it is irrevocable and if,
and only as long as, it is coupled with an interest sufficient in law to support
an irrevocable power. A stockholder may revoke any proxy which is not
irrevocable by attending the meeting and voting in person or by filing an
instrument in writing revoking the proxy or another duly executed proxy bearing
a later date with the Secretary of the Corporation. Voting at meetings of
stockholders need not be by written ballot and need not be conducted by
inspectors unless the holders of a majority of the outstanding shares of all
classes of stock entitled to vote thereon present in person or by proxy at such
meeting shall so determine. At all meetings of stockholders for the election of
directors a plurality of the votes cast shall be sufficient to elect. With
respect to other matters, unless otherwise provided by law or by the certificate
of incorporation or these by-laws, the affirmative vote of the holders of a
majority of the shares of all classes of stock present in person or represented
by proxy at the meeting and entitled to vote on the subject matter shall be the
act of the stockholders, provided that (except as otherwise required by law or
by the certificate of incorporation) the Board of Directors may require a larger
vote upon any such matter. Where a separate vote by class is required, the
affirmative vote of the holders of a majority of the shares of each class
present in person or represented by proxy at the meeting shall be the act of
such class, except as otherwise provided by law or by the certificate of
incorporation or these by-laws.

SECTION 1.8. Fixing Date for Determination of Stockholders of Record. In
order that the Corporation may determine the stockholders entitled to notice of
or to vote at any meeting of stockholders or any adjournment thereof, or to
express consent to corporate action in writing without a meeting, or entitled to
receive payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect of any change, conversion
or exchange of stock or for the purpose of any other lawful action, the Board of
Directors may fix, in advance, a record date, which shall not be more than sixty
nor less than ten days before the date of such meeting, nor more than sixty days
prior to any other action. If no record date is fixed: (1) the record date for
determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding the day
on which notice is given, or, if notice is waived, at the close of business on
the day next preceding the day on which the meeting is held; (2) the record date
for determining stockholders entitled to express consent to corporate action in
writing without a meeting, when no prior action by the Board is necessary, shall
be the day on which the first written consent is expressed; and (3) the record
date for determining stockholders for any other purpose shall be at the close of
business on the day on which the Board adopts the resolution relating thereto. A
determination of stock-holders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board may fix a new record date for the adjourned meeting.

D-2

SECTION 1.9. List of Stockholders Entitled to Vote. The Secretary shall
prepare and make, at least ten days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior to
the meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof and may be inspected by any stockholder who is present.

SECTION 1.10. Consent of Stockholders in Lieu of Meeting. Any action
required by law to be taken at any annual or special meeting of stockholders of
the Corporation, or any action which may be taken at any annual or special
meeting of such stockholders, may be taken without a meeting, without prior
notice and without a vote, if a consent in writing, setting forth the action so
taken, shall be signed by the holders of outstanding stock having not less than
the minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon were present
and voted. Prompt notice of the taking of the corporate action without a meeting
by less than unanimous written consent shall be given to those stockholders who
have not consented in writing.

ARTICLE II
BOARD OF DIRECTORS

SECTION 2.1. Powers; Number; Qualifications. The business and affairs of
the Corporation shall be managed by or under the direction of the Board of
Directors, except as may be otherwise provided by law or in the certificate of
incorporation. The Board shall consist of not less than three nor more than ten
directors. The Board of Directors shall be authorized to change its size from
time to time upon the majority vote of the stockholders. Directors need not be
stockholders.

SECTION 2.2. Election; Term of Office; Resignation; Removal; Vacancies. The
directors shall be divided into three classes, each such class to be as nearly
equal as possible in number of directors to each other class. The first term of
office of directors of the first class shall expire at the third Annual Meeting
after their election as members of such first class, and thereafter such terms
shall expire on each three year anniversary of such date; the term of office of
the directors of the second class shall expire on the second year anniversary of
the first Annual Meeting after their election as members of such second class,
and thereafter such terms shall expire on each three year anniversary of such
date; the term of office of the directors of the third class shall expire on the
first year anniversary of the first Annual Meeting after their election as
members of such third class, and thereafter such terms shall expire on each
three year anniversary of such date. Any director may resign at any time upon
written notice to the Board of Directors or to the President or the Secretary of
the Corporation. Such resignation shall take effect at the time specified
therein, and unless otherwise specified therein no acceptance of such
resignation shall be necessary to make it effective. Any director may be removed
for cause only by the vote of a majority of the entire Board of Directors.
Unless otherwise provided in the certificate of incorporation or these by-laws,
vacancies and newly created directorships resulting from any increase in the
authorized number of directors elected by all of the stockholders having the
right to vote as a single class or from any other cause may be filled by a
majority of the directors then in office, although less than a quorum, or by the
sole remaining director.

SECTION 2.3. Regular Meetings. Regular meetings of the Board of Directors
may be held at such places within or without the State of Delaware and at such
times as the Board may from time to time determine, and if so determined notice
thereof need not be given.

SECTION 2.4. Special Meetings. Special meetings of the Board of Directors
may be held at any time or place within or without the State of Delaware
whenever called by the Chairman or Co-Chairman of

D-3

the Board, if any, by the Vice Chairman of the Board, if any, by the President
or by any two directors. Reasonable notice thereof shall be given by the person
or persons calling the meeting.

SECTION 2.5. Participation in Meetings by Conference Telephone Permitted.
Unless otherwise restricted by the certificate of incorporation or these
by-laws, members of the Board of Directors, or any committee designated by the
Board, may participate in a meeting of the Board or of such committee, as the
case may be, by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in a meeting pursuant to this by-law shall
constitute presence in person at such meeting.

SECTION 2.6. Quorum; Vote Required for Action. At all meetings of the Board
of Directors a majority of the entire Board shall constitute a quorum for the
transaction of business. The vote of a majority of the directors present at a
meeting at which a quorum is present shall be the act of the Board unless the
certificate of incorporation or these by-laws shall require a vote of a greater
number. In case at any meeting of the Board a quorum shall not be present, the
members of the Board present may adjourn the meeting from time to time until a
quorum shall attend.

SECTION 2.7. Organization. Meetings of the Board of Directors shall be
presided over by the Chairman or Co-Chairman of the Board, if any, or in the
absence of the Chairman or Co-Chairman of the Board by the Vice Chairman of the
Board, if any, or in the absence of the Vice Chairman of the Board by the
President, or in their absence by a chairman chosen at the meeting. The
Secretary, or in the absence of the Secretary an Assistant Secretary, shall act
as secretary of the meeting, but in the absence of the Secretary and any
Assistant Secretary the chairman of the meeting may appoint any person to act as
secretary of the meeting.

SECTION 2.8. Action by Directors Without a Meeting. Any action required or
permitted to be taken at any meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting if all members of the Board or
of such committee, as the case may be, consent thereto in writing, and the
writing or writings are filed with the minutes of proceedings of the Board or
committee.

SECTION 2.9. Compensation of Directors. The Board of Directors shall have
the authority to fix the compensation of directors.

ARTICLE III
COMMITTEES

SECTION 3.1. Committees. The Board of Directors may, by resolution passed
by a majority of the whole Board, designate one or more committees, each
committee to consist of one or more of the directors of the Corporation. The
Board may designate one or more directors as alternate members of any committee,
who may replace any absent or disqualified member at any meeting of the
committee. In the absence or disqualification of a member of a committee, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not such member or members constitute a quorum, may
unanimously appoint another member of the Board to act at the meeting in place
of any such absent or disqualified member. Any such committee, to the extent
provided in the resolution of the Board, shall have and may exercise all the
powers and authority of the Board in the management of the business and affairs
of the Corporation, and may authorize the seal of the Corporation to be affixed
to all papers which may require it; but no such committee shall have power or
authority in reference to amending the certificate of incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the sale,
lease or exchange of all or substantially all of the Corporation's property and
assets, recommending to the stockholders a dissolution of the Corporation or a
revocation of dissolution, removing or indemnifying directors or amending these
by-laws; and, unless the resolution expressly so provides, no such committee
shall have the power or authority to declare a dividend or to authorize the
issuance of stock.

D-4

SECTION 3.2. Committee Rules. Unless the Board of Directors otherwise
provides, each committee designated by the Board may adopt, amend and repeal
rules for the conduct of its business. In the absence of a provision by the
Board or a provision in the rules of such committee to the contrary, a majority
of the entire authorized number of members of such committee shall constitute a
quorum for the transaction of business, the vote of a majority of the members
present at a meeting at the time of such vote if a quorum is then present shall
be the act of such committee, and in other respects each committee shall conduct
its business in the same manner as the Board conducts its business pursuant to
Article II of these by-laws.

ARTICLE IV
OFFICERS

SECTION 4.1. Officers; Election. As soon as practicable after the Annual
Meeting of stockholders in each year, the Board of Directors shall elect a
President and a Secretary, and it may, if it so determines, elect from among its
members a Chairman of the Board, Co-Chairman of the Board and Vice Chairman of
the Board. The Board may also elect one or more Vice Presidents, one or more
Assistant Vice Presidents, one or more Assistant Secretaries, a Treasurer and
one or more Assistant Treasurers and such other officers as the Board may deem
desirable or appropriate and may give any of them such further designations or
alternate titles as it considers desirable. Any number of offices may be held by
the same person.

SECTION 4.2. Term of Office; Resignation; Removal; Vacancies. Except as
otherwise provided in the resolution of the Board of Directors electing any
officer, each officer shall hold office until the first meeting of the Board
after the annual meeting of stockholders next succeeding his or her election,
and until his or her successor is elected and qualified or until his or her
earlier resignation or removal. Any officer may resignation at any time upon
written notice to the Board or to the President or the Secretary of the
Corporation. Such resignation shall take effect at the time specified therein,
and unless otherwise specified therein no acceptance of such resignation shall
be necessary to make it effect. The Board may remove any officer with or without
cause at any time. Any such removal shall be without prejudice to the
contractual rights of such officer, if any, with the Corporation, but the
election of an officer shall not itself create contractual rights. Any vacancy
occurring in any office of the Corporation by death, resignation, removal or
otherwise may be filled for the unexpired portion of the term by the Board any
regular or special meeting.

SECTION 4.3. Chairman of the Board. The Chairman of the Board or
Co-Chairman of the Board, if any, shall preside at all meetings of the Board of
Directors and of the stockholders at which he or she shall be present and shall
have and may exercise such powers as may, from time to time, be assigned to him
or her by the Board and as may be provided by law.

SECTION 4.4. Vice Chairman of the Board. In the absence of the Chairman or
Co-Chairman of the Board, the Vice Chairman of the Board, if any, shall preside
at all meetings of the Board of Directors and of the stockholders at which he or
she shall be present and shall have and may exercise such powers as may, from
time to time, be assigned to him or her by the Board and as may be provided by
law.

SECTION 4.5. President. In the absence of the Chairman of the Board,
Co-Chairman of the Board and Vice Chairman of the Board, the President shall
preside at all meetings of the Board of Directors and of the stockholders at
which he or she shall be present. The President shall be the chief executive
officer and shall have general charge and supervision of the business of the
Corporation and, in general, shall perform all duties incident to the office of
president of a corporation and such other duties as may, from time to time, be
assigned to him or her by the Board or as may be provided by law.

SECTION 4.6. Vice Presidents. The Vice President or Vice Presidents, at the
request or in the absence of the President or during the President's inability
to act, shall perform the duties of the

D-5

President, and when so acting shall have the powers of the President. If there
be more than one Vice President, the Board of Directors may determine which one
or more of the Vice Presidents shall perform any of such duties; or if such
determination is not made by the Board, the President may make such
determination; otherwise any of the Vice Presidents may perform any of such
duties. The Vice President or Vice Presidents shall have such other powers and
shall perform such other duties as may, from time to time, be assigned to him or
her or them by the Board or the President or as may be provided by law.

SECTION 4.7. Secretary. The Secretary shall have the duty to record the
proceedings of the meetings of the stockholders, the Board of Directors and any
committees in a book to be kept for that purpose, shall see that all notices are
duly given in accordance with the provisions of these by-laws or as required by
law, shall be custodian of the records of the Corporation, may affix the
corporate seal to any document the execution of which, on behalf of the
Corporation, is duly authorized, and when so affixed may attest the same, and,
in general, shall perform all duties incident to the office of secretary of a
corporation and such other duties as may, from time to time, be assigned to him
or her by the Board or the President or as may be provided by law.

SECTION 4.8. Treasurer. The Treasurer shall have charge of and be
responsible for all funds, securities, receipts and disbursements of the
Corporation and shall deposit or cause to be deposited, in the name of the
Corporation, all moneys or other valuable effects in such banks, trust companies
or other depositories as shall, from time to time, be selected by or under
authority of the Board of Directors. If required by the Board, the Treasurer
shall give a bond for the faithful discharge of his or her duties, with such
surety or sureties as the Board may determine. The Treasurer shall keep or cause
to be kept full and accurate records of all receipts and disbursements in books
of the Corporation, shall render to the President and to the Board, whenever
requested, an account of the financial condition of the Corporation, and, in
general, shall perform all the duties incident to the office of treasurer of a
corporation and such other duties as may, from time to time, be assigned to him
or her by the Board or the President or as may be provided by law.

SECTION 4.9. Other Officers. The other officers, if any, of the Corporation
shall have such powers and duties in the management of the Corporation as shall
be stated in a resolution of the Board of Directors which is not inconsistent
with these by-laws and, to the extent not so stated, as generally pertain to
their respective offices, subject to the control of the Board. The Board may
require any officer, agent or employee to give security for the faithful
performance of his or her duties.

ARTICLE V
STOCK

SECTION 5.1. Certificates. Every holder of stock in the Corporation shall
be entitled to have a certificate signed by or in the name of the Corporation by
the Chairman, Co-Chairman or Vice Chairman of the Board of Directors, if any, or
the President or a Vice President, and by the Treasurer or an Assistant
Treasurer, or the Secretary or an Assistant Secretary, of the Corporation,
certifying the number of shares owned by such holder in the Corporation. If such
certificate is manually signed by one officer or manually countersigned by a
transfer agent or by a registrar, any other signature on the certificate may be
a facsimile. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent or registrar before such certificate is
issued, it may be issued by the Corporation with the same effect as if such
person were such officer, transfer agent or registrar at the date of issue.

SECTION 5.2. Lost, Stolen or Destroyed Stock Certificates; Issuance of New
Certificates. The Corporation may issue a new certificate of stock in the place
of any certificate theretofore issued by it, alleged to have been lost, stolen
or destroyed, and the Corporation may require the owner of the lost, stolen or
destroyed certificate, or such owner's legal representative, to give the
Corporation a bond sufficient to indemnify it against any claim that may be made
against it on account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate.

D-6

ARTICLE VI
MISCELLANEOUS

SECTION 6.1. Fiscal Year. The fiscal year of the Corporation shall end in
March of each calendar year unless otherwise determined by the Board of
Directors.

SECTION 6.2. Seal. The Corporation may have a corporate seal which shall
have the name of the Corporation inscribed thereon and shall be in such form as
may be approved from time to time by the Board of Directors. The corporate seal
may be used by causing it or a facsimile thereof to be impressed or affixed or
in any other manner reproduced.

SECTION 6.3. Waiver of Notice of Meetings of Stockholders, Directors and
Committees. Whenever notice is required to be given by law or under any
provision of the cer-tificate of incorporation or these by-laws, a written
waiver thereof, signed by the person entitled to notice, whether before or after
the time stated therein, shall be deemed equivalent to notice. Attendance of a
person at a meeting shall constitute a waiver of notice of such meeting, except
when the person attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened. Neither the business to be transacted at,
nor the purpose of, any regular or special meeting of the stockholders,
directors, or members of a committee of directors need be specified in any
written waiver of notice unless so required by the certificate of incorporation
or these by-laws.

SECTION 6.4. Indemnification of Directors, Officers and Employees. The
Corporation shall indemnify to the full extent authorized by law any person made
or threatened to be made a party to any action, suit or proceeding, whether
criminal, civil, administrative or investigative, by reason of the fact that
such person or such person's testator or intestate is or was a director, officer
or employee of the Corporation or serves or served at the request of the
Corporation any other enterprise as a director, officer or employee. For
purposes of this by-law, the term "Corporation" shall include any predecessor of
the Corporation and any constituent corporation (including any constituent of a
constituent) absorbed by the Corporation in a consolidation or merger; the term
"other enterprise" shall include any corporation, partnership, joint venture,
trust or employee benefit plan; service "at the request of the Corporation"
shall include service as a director, officer or employee of the Corporation
which imposes duties on, or involves services by, such director, officer or
employee with respect to an employee benefit plan, its participants or
beneficiaries; any excise taxes assessed on a person with respect to an employee
benefit plan shall be deemed to be indemnifiable expenses; and action by a
person with respect to an employee benefit plan which such person reasonably
believes to be in the interest of the participants and beneficiaries of such
plan shall be deemed to be action not opposed to the best interests of the
Corporation.

SECTION 6.5. Interested Directors; Quorum. No contract or transaction
between the Corporation and one or more of its directors or officers, or between
the Corporation and any other corporation, partnership, association or other
organization in which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the Board of Directors or committee thereof which
authorizes the contract or transaction, or solely because his or her or their
votes are counted for such purpose, if: (1) the material facts as to his or her
relationship or interest and as to the contract or transaction are disclosed or
are known to the Board or the committee, and the Board or committee in good
faith authorizes the contract or transaction by the affirmative votes of a
majority of the disinterested directors, even though the disinterested directors
be less than a quorum; or (2) the material facts as to his or her relationship
or interest and as to the contract or transaction are disclosed or are known to
the stockholders entitled to vote thereon, and the contract or transaction is
specifically approved in good faith by vote of the stockholders; or (3) the
contract or transaction is fair as to the Corporation as of the time it is
authorized, approved or ratified, by the Board, a committee thereof or the
stockholders. Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board or of a committee which
authorizes the contract or transaction.

D-7

SECTION 6.6. Form of Records. Any records maintained by the Corporation in
the regular course of its business, including its stock ledger, books of account
and minute books, may be kept on, or be in the form of, punch cards, magnetic
tape, photographs, microphotographs or any other information storage device,
provided that the records so kept can be converted into clearly legible form
within a reasonable time. The Corporation shall so convert any records so kept
upon the request of any person entitled to inspect the same.

SECTION 6.7. Amendment of By-Laws. These by-laws may be amended, altered or
repealed, upon the affirmative vote of at least two-thirds (2/3) of the
directors then serving.

D-8

NEW FRONTIER MEDIA, INC.
ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS

The undersigned, revoking all previous proxies, hereby constitutes and
appoints Mark Kreloff and Michael Weiner, and each of them, proxies with full
power of substitution to vote for the undersigned all shares of Common Stock of
New Frontier Media, Inc. which the undersigned would be entitled to vote if
personally present at the Annual Meeting of the Stockholders to be held on
August 22, 2001 at the Omni Interlocken Resort, 500 Interlocken Boulevard,
Broomfield, CO 80021, at 10:00 a. m., Mountain Daylight Time, and at any
adjournment thereof, upon the matters described in the accompanying Proxy
Statement and upon any other business that may properly come before the meeting
or any adjournment thereof. Said proxies are directed to vote or refrain from
voting as checked on the reverse side upon the matters listed on the reverse
side, and otherwise in their discretion.

PLEASE INDICATE HOW YOUR STOCK IS TO BE VOTED. IF NO I plan to attend
SPECIFIC VOTING INSTRUCTIONS ARE GIVEN, THE SHARES the meeting
REPRESENTED BY THIS PROXY WILL BE VOTED AS RECOMMENDED BY / /
THE BOARD OF DIRECTORS.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR ALL NOMINEES"
IN ITEM 1 AND "FOR" ITEMS 2, 3 AND 4.

ITEM 1 -- Election of Directors

CLASS I (2004)* CLASS II (2003)* CLASS III (2002)*
Mark H. Kreloff Alan Isaacman Bradley Weber
Michael Weiner Koung Y. Wong Hiram J. Woo
Edward J. Bonn

*If Proposal No. 3 is not approved by the shareholders, each director is to be
elected for a term of office that will expire at annual meeting to be held in
2002.

FOR ALL NOMINEES WITHHOLD AUTHORITY Withheld for the following only:
With exceptions noted FOR ALL NOMINEES (Write the name(s) of the Nominee(s) in the space below)
/ / / / -------------------------------------------------

THIS PROXY IS CONTINUED ON THE REVERSE SIDE.
PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY.

ITEM 2 -- Approval of the Company's 2001 Incentive FOR AGAINST ABSTAIN
Stock Option Plan. / / / / / /
ITEM 3 -- Approval of the Company's Reincorporation FOR AGAINST ABSTAIN
in Delaware / / / / / /
ITEM 4 -- Ratification of the selection of Singer FOR AGAINST ABSTAIN
Lewak Greenbaum & Goldstein LLP as the Company's / / / / / /
independent auditors for the 2002 fiscal year.
ITEM 5 -- In their discretion, the proxies are
authorized to vote upon such other business as may
properly come before the Annual Meeting.

DATED: ___________________________________________________________________, 2001

- -------------------------------------------------------------------------------
Signature(s) of Stockholder(s)

- -------------------------------------------------------------------------------
Title
Please mark, date and sign exactly as your name appears above and return in the
enclosed envelope. If acting as executor, administrator, trustee, guardian,
etc., you should so indicate when signing. If the signer is a corporation,
please sign the full corporate name, by duly authorized officer. If shares are
held jointly, each stockholder named should sign.

Please mark your choice like this /X/ in blue or black ink.