Unassociated Document


    WARRANT
      AGREEMENT

    


    This
      Warrant Agreement made as of __________, 2006 (this “Warrant
      Agreement”)
      between AFFINITY
      MEDIA INTERNATIONAL CORP.,
      a
      Delaware corporation, with offices at 11601 Wilshire Blvd., Suite 1500, Los
      Angeles, CA 90025 (the “Company”),
      and
      AMERICAN STOCK TRANSFER & TRUST COMPANY, a New York corporation, with
      offices at 59 Maiden Lane, New York, New York 10038 (the “Warrant
      Agent”).

    


    WHEREAS,
      the
      Company is engaged in a public offering (a “Public
      Offering”)
      of
      Units (the “Units”)
      and,
      in connection therewith, has determined to issue and deliver up to (i)
6,325,000
      warrants
      (the “Public
      Warrants”)
      to the
      public investors, and (ii) as part of an Underwriter’s purchase option, 385,000
      warrants to Maxim Group LLC (“Maxim”)
      or its
      designees (the “Representative’s
      Warrants”),
      which
      Representative’s Warrants shall have an exercise price of $5.00, subject to
      adjustment, and each of such Public Warrants evidencing the right of the holder
      thereof to purchase one share of common stock, par value $.0001 per share,
      of
      the Company’s Common Stock (the “Common
      Stock”)
      for
      $5.00, subject to adjustment as described herein; and

    


    WHEREAS,
      the
      Company has filed with the Securities and Exchange Commission (the “SEC”)
      a
      Registration Statement, No. 333-128707 on Form S-1 (as the same may be amended
      from time to time, the “Registration
      Statement”)
      for
      the registration, under the Securities Act of 1933, as amended (the
“Act”)
      of,
      among other securities, the Warrants and the Common Stock issuable upon exercise
      of the Warrants; and

    


    WHEREAS,
      the
      Company intends to issue 500,000 warrants as part of units offered to certain
      private investors in a private placement (the “Private
      Placement”)
      immediately prior to the Public Offering, which warrants (the “Private
      Warrants”)
      will
      be substantially identical to the Public Warrants; and

    


    WHEREAS,
      the
      Company desires the Warrant Agent to act on behalf of the Company, and the
      Warrant Agent is willing to so act, in connection with the issuance,
      registration, transfer, exchange, redemption and exercise of the Public
      Warrants, the Private Warrants and the Representative’s Warrants (collectively,
      the “Warrants”);
      and

    


    WHEREAS,
      the
      Company desires to provide for the form and provisions of the Warrants, the
      terms upon which they shall be issued and exercised, and the respective rights,
      limitation of rights, and immunities of the Company, the Warrant Agent, and
      the
      holders of the Warrants; and

    


    WHEREAS,
      all
      acts and things have been done and performed which are necessary to make the
      Warrants, when executed on behalf of the Company and countersigned by or on
      behalf of the Warrant Agent, as provided herein, the valid, binding and legal
      obligations of the Company, and to authorize the execution and delivery of
      this
      Warrant Agreement.

    


    NOW,
      THEREFORE,
      in
      consideration of the mutual agreements herein contained, the parties hereto
      agree as follows:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    1. Appointment
      of Warrant Agent.
      The
      Company hereby appoints the Warrant Agent to act as agent for the Company for
      the Warrants, and the Warrant Agent hereby accepts such appointment and agrees
      to perform the same in accordance with the terms and conditions set forth in
      this Warrant Agreement.

    


    2. Warrants.

    


    2.1. Form
      of Warrant.
      Each
      Warrant shall be issued in registered form only, shall be in substantially
      the
      form of Exhibit
      A
      hereto,
      the provisions of which are incorporated herein and shall be signed by, or
      bear
      the facsimile signature of, the Chief Executive Officer or President and
      Treasurer, Secretary or Assistant Secretary of the Company and shall bear a
      facsimile of the Company’s seal. In the event the person whose facsimile
      signature has been placed upon any Warrant shall have ceased to serve in the
      capacity in which such person signed the Warrant before such Warrant is issued,
      it may be issued with the same effect as if he or she had not ceased to be
      such
      at the date of issuance.

    


    2.2. Effect
      of Countersignature.
      Unless
      and until countersigned by the Warrant Agent pursuant to this Warrant Agreement,
      a Warrant shall be invalid and of no effect and may not be exercised by the
      holder thereof.

    


    2.3. Registration.

    


    2.3.1. Warrant
      Register.
      The
      Warrant Agent shall maintain books (the “Warrant
      Register”),
      for
      the registration of original issuance and the registration of transfer of the
      Warrants. Upon the initial issuance of the Warrants, the Warrant Agent shall
      issue and register the Warrants in the names of the respective holders thereof
      in such denominations and otherwise in accordance with instructions delivered
      to
      the Warrant Agent by the Company.

    


    2.3.2. Registered
      Holder.
      Prior
      to due presentment for registration of transfer of any Warrant, the Company
      and
      the Warrant Agent may deem and treat the person in whose name such Warrant
      shall
      be registered upon the Warrant Register (the “Registered
      Holder”),
      as
      the absolute owner of such Warrant and of each Warrant represented thereby
      (notwithstanding any notation of ownership or other writing on the Warrant
      Certificate made by anyone other than the Company or the Warrant Agent), for
      the
      purpose of any exercise thereof, and for all other purposes, and neither the
      Company nor the Warrant Agent shall be affected by any notice to the
      contrary.

    


    2.4. Detachability
      of Warrants.
      The
      securities comprising the Units will not be separately transferable until 90
      days after the date hereof (and the Units will thereafter cease trading unless
      Maxim determines to allow continued trading of the Units following such
      separation) unless Maxim informs the Company of its decision to allow earlier
      separate trading, but in no event will Maxim allow separate trading of the
      securities comprising the Units until (i) the Company files a Current Report
      on
      Form 8-K which includes an audited balance sheet reflecting the receipt by
      the
      Company of the gross proceeds of the Public Offering, including any proceeds
      received by the Company from the exercise of the Underwriters’ over-allotment
      option, if the over-allotment option is exercised prior to the filing of the
      Form 8-K, (ii) the Company files a Current Report on Form 8-K and issues a
      press
      release announcing when such separate trading will commence, and (iii) the
      business day following the earlier to occur of the expiration of the
      underwriters’ over-allotment option or its exercise in full.

    


    
      
         

      

      
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    2.5 Warrants
      and Representative’s Warrants.
      The
      Representative’s Warrants shall have the same terms and be in the same form as
      the other Warrants, except with respect to the Warrant Price as set forth below
      in Section 3.1.

    


    3. Terms
      and Exercise of Warrants.

    


    3.1. Warrant
      Price.
      Each
      Warrant shall, when countersigned by the Warrant Agent, entitle the Registered
      Holder thereof, subject to the provisions of such Warrant and of this Warrant
      Agreement, to purchase from the Company the number of shares of Common Stock
      stated therein, at the price of $5.00 per whole share, subject to the
      adjustments provided in Section 4 hereof and in the last sentence of this
      Section 3.1. Each Representative’s Warrant shall, when countersigned by the
      Warrant Agent, entitle the Registered Holder thereof, subject to the provisions
      of such Representative’s Warrant and of this Warrant Agreement, to purchase from
      the Company the number of shares of Common stock stated therein, at the price
      of
      $5.00 per whole share, subject to the adjustments provided in Section 4 hereof
      and in the last sentence of this Section 3.1. The term “Warrant Price” as used
      in this Warrant Agreement refers to the price per share at which Common Stock
      may be purchased at the time a Warrant is exercised. The Company in its sole
      discretion may lower the Warrant Price at any time prior to the Expiration
      Date
      for a period of time not less than ten business days.

    


    3.2. Duration
      of Warrants.
      A
      Warrant may be exercised only during the period (the “Exercise
      Period”)
      commencing on the later of (i) the consummation by the Company of a merger,
      capital stock exchange, asset acquisition or other similar business combination
      (as described more fully in the Registration Statement, a “Business
      Combination”)
      or
      (ii) ______________, 2007, and terminating at 5:00 p.m., New York City time
      on
      the earlier to occur of (i) _____________, 2010 or (ii) the date fixed for
      redemption of the Warrants as provided in Section 6 of this Warrant Agreement
      (the “Expiration
      Date”).
      Except with respect to the right to receive the Redemption Price (as set forth
      in Section 6 hereunder), each Warrant not exercised on or before the Expiration
      Date shall become void, and all rights thereunder and all rights in respect
      thereof under this Warrant Agreement shall cease at the close of business on
      the
      Expiration Date. The Company in its sole discretion may extend the duration
      of
      the Warrants by delaying the Expiration Date; provided, however, that the
      Company will provide notice to registered holders of Warrants of such extension
      of not less than 20 days prior to such extension becoming effective.


    


    3.3. Exercise
      of Warrants.

    


    3.3.1. Payment.
      Subject
      to the provisions of the Warrant and this Warrant Agreement, a Warrant, when
      countersigned by the Warrant Agent, may be exercised by the Registered Holder
      thereof by surrendering it, at the office of the Warrant Agent, or at the office
      of its successor as Warrant Agent, in the Borough of Manhattan, City and State
      of New York, with the subscription form, as set forth in the Warrant, duly
      executed, and by paying in full, in lawful money of the United States, in cash,
      good certified check or good bank draft payable to the order of the Company
      (or
      as otherwise agreed to by the Company), the Warrant Price for each full share
      of
      Common Stock as to which the Warrant is exercised and any and all applicable
      taxes due in connection with the exercise of the Warrant, the exchange of the
      Warrant for the Common Stock, and the issuance of the Common Stock.

    


    
      
         

      

      
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    3.3.2. Issuance
      of Certificates.
      As soon
      as practicable after the exercise of any Warrant and the clearance of the funds
      in payment of the Warrant Price, the Company shall issue to the Registered
      Holder of such Warrant a certificate or certificates for the number of full
      shares of Common Stock to which he, she or it is entitled, registered in such
      name or names as may be directed by him, her or it, and if such Warrant shall
      not have been exercised in full, a new countersigned Warrant for the number
      of
      shares as to which such Warrant shall not have been exercised. Notwithstanding
      the foregoing, the Company shall not be obligated to deliver any securities
      pursuant to the exercise of a Warrant unless (i) a registration statement under
      the Act with respect to the Common Stock issuable upon such exercise is
      effective, or (ii) in the opinion of counsel to the Company, the exercise of
      the
      Warrants is exempt from the registration requirements of the Act and such
      securities are qualified for sale or exempt from qualification under applicable
      securities laws of the states or other jurisdictions in which the registered
      holders reside. Warrants may not be exercised by, or securities issued to,
      any
      Registered Holder in any state in which such exercise or issuance would be
      unlawful.

    


    3.3.3. Valid
      Issuance.
      All
      shares of Common Stock issued upon the proper exercise of a Warrant in
      conformity with this Warrant Agreement shall be validly issued, fully paid
      and
      nonassessable.

    


    3.3.4. Date
      of Issuance.
      Each
      person in whose name any such certificate for shares of Common Stock is issued
      shall for all purposes be deemed to have become the holder of record of such
      shares on the date on which the Warrant was surrendered and payment of the
      Warrant Price was made, irrespective of the date of delivery of such
      certificate, except that, if the date of such surrender and payment is a date
      when the stock transfer books of the Company are closed, such person shall
      be
      deemed to have become the holder of such shares at the close of business on
      the
      next succeeding date on which the stock transfer books are open.

    


    3.3.5. Warrant
      Solicitation and Warrant Solicitation Fee.

    


    (a) The
      Company has engaged Maxim, on a non-exclusive basis, as its agent for the
      solicitation of the exercise of the Warrants. The Company, at its cost, will
      (i)
      assist Maxim with respect to such solicitation, if requested by Maxim, and
      (ii)
      provide Maxim, and direct the Company’s transfer agent and the Warrant Agent to
      deliver to Maxim, lists of the record and, to the extent known, beneficial
      owners of the Company’s Warrants. The Company hereby instructs the Warrant Agent
      to cooperate with Maxim in every respect in connection with Maxim’s solicitation
      activities, including, but not limited to, providing to Maxim, at the Company’s
      cost, a list of record and beneficial holders of the Warrants and circulating
      a
      prospectus or offering circular disclosing the compensation arrangements
      referenced in Section 3.3.5(b) below to holders of the Warrants at the time
      of
      exercise of the Warrants. In addition to the conditions set forth in Section
      3.3.5(b), Maxim shall accept payment of the warrant solicitation fee provided
      in
      Section 3.3.5(b) only if it has provided bona fide services to the Company
      in
      connection with the exercise of the Warrants and only to the extent that an
      investor who exercises his Warrants specifically designates, in writing, that
      Maxim solicited his, her or its exercise. In addition to soliciting, either
      orally or in writing, the exercise of Warrants by a Warrant holder, such
      services may also include disseminating information, either orally or in
      writing, to Warrant holders about the Company or the market for the Company’s
      securities, or assisting in the processing of the exercise of
      Warrants.

    


    
      
         

      

      
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    (b) In
      each
      instance in which a Warrant is exercised, the Warrant Agent shall promptly
      give
      written notice of such exercise to the Company and Maxim (the “Warrant
      Agent’s Exercise Notice”).
      If,
      upon the exercise of any Warrant more than one year from the effective date
      of
      the Registration Statement, (i) the market price of the Company’s Common Stock
      is greater than the Warrant Price, (ii) disclosure of compensation arrangements
      between the Company and Maxim with respect to the solicitation of the exercise
      of the Warrants was made both at the time of the Public Offering and at the
      time
      of exercise (by delivery of the Prospectus or as otherwise required by
      applicable law, rule or regulation), (iii) the holder of the Warrant confirms
      in
      writing that the exercise of the Warrant was solicited by Maxim, (iv) the
      Warrant was not held in a discretionary account, and (v) the solicitation of
      the
      exercise of the Warrant was not in violation of Regulation M (as such rule
      or
      any successor rule may be in effect as of such time of exercise) promulgated
      under the Securities Exchange Act of 1934, as amended, then the Warrant Agent,
      simultaneously with the distribution of the Common Stock underlying the Warrants
      so exercised in accordance with the instructions from the Company following
      receipt of the proceeds to the Company received upon exercise of such
      Warrant(s), shall, on behalf of the Company, pay to Maxim a fee of 3% of the
      Warrant Price, provided that Maxim delivers to the Warrant Agent within ten
      (10)
      business days from the date on which Maxim has received the Warrant Agent’s
      Exercise Notice, a certificate that the conditions set forth in the preceding
      clauses (iii), (iv) and (v) have been satisfied. Notwithstanding the foregoing,
      no fee will be paid to Maxim with respect to the exercise by the Underwriters
      or
      their affiliates or the Company’s officers or directors of Warrants purchased by
      it or them and still held by them for its or their own account. Maxim and the
      Company may at any time during business hours, examine the records of the
      Warrant Agent, including its ledger of original Warrant certificates returned
      to
      the Warrant Agent upon exercise of Warrants.

    


    (c) The
      provisions of this Section 3.3.5. may not be modified, amended or deleted
      without the prior written consent of Maxim.

    


    4. Adjustments.

    


    4.1. Stock
      Dividends - Split-Ups.
      If
      after the date hereof, and subject to the provisions of Section 4.6 below,
      the
      number of outstanding shares of Common Stock is increased by a stock dividend
      payable in shares of Common Stock, or by a split-up of shares of Common Stock,
      or other similar event, then, on the effective date of such stock dividend,
      split-up or similar event, the number of shares of Common Stock issuable on
      exercise of each Warrant shall be increased in proportion to such increase
      in
      outstanding shares of Common Stock.

    


    
      
         

      

      
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    4.2. Aggregation
      of Shares.
      If
      after the date hereof, and subject to the provisions of Section 4.6, the number
      of outstanding shares of Common Stock is decreased by a consolidation,
      combination, reverse stock split or reclassification of shares of Common Stock
      or other similar event, then, on the effective date of such consolidation,
      combination, reverse stock split, reclassification or similar event, the number
      of shares of Common Stock issuable on exercise of each Warrant shall be
      decreased in proportion to such decrease in outstanding shares of Common
      Stock.

    


    4.3 Adjustments
      in Exercise Price.
      Whenever the number of shares of Common Stock purchasable upon the exercise
      of
      the Warrants is adjusted, as provided in Section 4.1 and 4.2 above, the Warrant
      Price shall be adjusted (to the nearest cent) by multiplying such Warrant Price
      immediately prior to such adjustment by a fraction (x) the numerator of which
      shall be the number of shares of Common Stock purchasable upon the exercise
      of
      the Warrants immediately prior to such adjustment, and (y) the denominator
      of
      which shall be the number of shares of Common Stock so purchasable immediately
      thereafter.

    


    4.4. Replacement
      of Securities upon Reorganization, etc.
      In case
      of any reclassification or reorganization of the outstanding shares of Common
      Stock (other than a change covered by Section 4.1 or 4.2 hereof or that solely
      affects the par value of such shares of Common Stock), or in the case of any
      merger or consolidation of the Company with or into another corporation (other
      than a consolidation or merger in which the Company is the continuing
      corporation and that does not result in any reclassification or reorganization
      of the outstanding shares of Common Stock), or in the case of any sale or
      conveyance to another corporation or entity of the assets or other property
      of
      the Company as an entirety or substantially as an entirety in connection with
      which the Company is dissolved, the Warrant holders shall thereafter have the
      right to purchase and receive, upon the basis and upon the terms and conditions
      specified in the Warrants and in lieu of the shares of Common Stock of the
      Company immediately theretofore purchasable and receivable upon the exercise
      of
      the rights represented thereby, the kind and amount of shares of stock or other
      securities or property (including cash) receivable upon such reclassification,
      reorganization, merger or consolidation, or upon a dissolution following any
      such sale or transfer, that the Warrant holder would have received if such
      Warrant holder had exercised his, her or its Warrant(s) immediately prior to
      such event; and if any reclassification also results in a change in shares
      of
      Common Stock covered by Section 4.1 or 4.2, then such adjustment shall be made
      pursuant to Sections 4.1, 4.2, 4.3 and this Section 4.4. The provisions of
      this
      Section 4.4 shall similarly apply to successive reclassifications,
      reorganizations, mergers or consolidations, sales or other
      transfers.

    


    4.5. Notices
      of Changes in Warrant.
      Upon
      every adjustment of the Warrant Price or the number of shares issuable upon
      exercise of a Warrant, the Company shall give written notice thereof to the
      Warrant Agent, which notice shall state the Warrant Price resulting from such
      adjustment and the increase or decrease, if any, in the number of shares
      purchasable at such price upon the exercise of a Warrant, setting forth in
      reasonable detail the method of calculation and the facts upon which such
      calculation is based. Upon the occurrence of any event specified in Sections
      4.1, 4.2, 4.3 or 4.4, then, in any such event, the Company shall give written
      notice to the Warrant holder, at the last address set forth for such holder
      in
      the Warrant Register, of the record date or the effective date of the event.
      Failure to give such notice, or any defect therein, shall not affect the
      legality or validity of such event.

    


    
      
         

      

      
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    4.6. No
      Fractional Shares.
      Notwithstanding any provision contained in this Warrant Agreement to the
      contrary, the Company shall not issue fractional shares upon exercise of
      Warrants. If, by reason of any adjustment made pursuant to this Section 4,
      the
      holder of any Warrant would be entitled, upon the exercise of such Warrant,
      to
      receive a fractional interest in a share, the Company shall, upon such exercise,
      round up to the nearest whole number the number of the shares of Common Stock
      to
      be issued to the Warrant holder.

    


    4.7. Form
      of Warrant.
      The
      form of Warrant need not be changed because of any adjustment pursuant to this
      Section 4, and Warrants issued after such adjustment may state the same Warrant
      Price and the same number of shares as is stated in the Warrants initially
      issued pursuant to this Warrant Agreement. However, the Company may at any
      time
      in its sole discretion make any change in the form of Warrant that the Company
      may deem appropriate and that does not affect the substance thereof, and any
      Warrant thereafter issued or countersigned, whether in exchange or substitution
      for an outstanding Warrant or otherwise, may be in the form as so
      changed.

    


    5. Transfer
      and Exchange of Warrants.

    


    5.1. Registration
      of Transfer.
      The
      Warrant Agent shall register the transfer, from time to time, of any outstanding
      Warrant upon the Warrant Register, upon surrender of such Warrant for transfer,
      properly endorsed with signatures properly guaranteed and accompanied by
      appropriate instructions for transfer. Upon any such transfer, a new Warrant
      representing an equal aggregate number of Warrants shall be issued and the
      old
      Warrant shall be cancelled by the Warrant Agent. The Warrants so cancelled
      shall
      be delivered by the Warrant Agent to the Company from time to time upon
      request.

    


    5.2. Procedure
      for Surrender of Warrants.
      Warrants may be surrendered to the Warrant Agent, together with a written
      request for exchange or transfer, and thereupon the Warrant Agent shall issue
      in
      exchange therefor one or more new Warrants as requested by the Registered Holder
      of the Warrants so surrendered, representing an equal aggregate number of
      Warrants; provided, however, that in the event that a Warrant surrendered for
      transfer bears a restrictive legend, the Warrant Agent shall not cancel such
      Warrant and issue new Warrants in exchange therefor until the Warrant Agent
      has
      received an opinion of counsel for the Company stating that such transfer may
      be
      made and indicating whether the new Warrants must also bear a restrictive
      legend.

    


    5.3. Fractional
      Warrants.
      The
      Warrant Agent shall not be required to effect any registration of transfer
      or
      exchange which will result in the issuance of a warrant certificate for a
      fraction of a warrant.

    


    5.4. Service
      Charges.
      No
      service charge shall be made for any exchange or registration of transfer of
      Warrants.

    


    
      
         

      

      
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    5.5. Warrant
      Execution and Countersignature.
      The
      Warrant Agent is hereby authorized to countersign and to deliver, in accordance
      with the terms of this Warrant Agreement, the Warrants required to be issued
      pursuant to the provisions of this Section 5, and the Company, whenever required
      by the Warrant Agent, will supply the Warrant Agent with Warrants duly executed
      on behalf of the Company for such purpose.

    


    6. Redemption.

    


    6.1. Redemption.
      Subject
      to Section 6.4 hereof, not less than all of the outstanding Warrants may be
      redeemed, at the option of the Company, at any time after they become
      exercisable and prior to their expiration, at the office of the Warrant Agent,
      upon the notice referred to in Section 6.2, at the price of $.01 per Warrant
      (the “Redemption
      Price”),
      provided that the average closing sales price of the Common Stock has been
      equal
      to or greater than $8.50 per share, for any twenty (20) trading days within
      a
      thirty (30) trading day period ending on the third business day prior to the
      date on which notice of redemption is given. The provisions of this Section
      6.1
      may not be modified, amended or deleted without the prior written consent of
      Maxim.

    


    6.2. Date
      Fixed for, and Notice of, Redemption.
      In the
      event the Company shall elect to redeem all of the Warrants, the Company shall
      fix a date for the redemption. Notice of redemption shall be mailed by first
      class mail, postage prepaid, by the Company not less than 30 days prior to
      the
      date fixed for redemption to the Registered Holders of the Warrants to be
      redeemed at their last addresses as they shall appear on the Warrant Register.
      Any notice mailed in the manner herein provided shall be conclusively presumed
      to have been duly given whether or not the Registered Holder received such
      notice.

    


    6.3. Exercise
      After Notice of Redemption.
      The
      Warrants may be exercised for cash in accordance with Section 3 of this Warrant
      Agreement at any time after notice of redemption shall have been given by the
      Company pursuant to Section 6.2. hereof and prior to the time and date fixed
      for
      redemption. On and after the redemption date, the record holder of the Warrants
      shall have no further rights except to receive, upon surrender of the Warrants,
      the Redemption Price.

    


    6.4 Outstanding
      Warrants Only.
      The
      Company understands that the redemption rights provided for by this Section
      6
      apply only to outstanding Warrants. To the extent a person holds rights to
      purchase Warrants, such purchase rights shall not be extinguished by redemption.
      However, once such purchase rights are exercised, the Company may redeem the
      Warrants issued upon such exercise provided that the criteria for redemption
      is
      met. The provisions of this Section 6.4 may not be modified, amended or deleted
      without the prior written consent of Maxim.

    


    7. Other
      Provisions Relating to Rights of Holders of Warrants.

    


    7.1. No
      Rights as Stockholder.
      A
      Warrant does not entitle the Registered Holder thereof to any of the rights
      of a
      stockholder of the Company, including, without limitation, the right to receive
      dividends, or other distributions, exercise any preemptive rights to vote or
      to
      consent or to receive notice as stockholders in respect of the meetings of
      stockholders or the election of directors of the Company or any other
      matter.

    


    
      
         

      

      
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    7.2. Lost,
      Stolen, Mutilated, or Destroyed Warrants.
      If any
      Warrant is lost, stolen, mutilated, or destroyed, the Company and the Warrant
      Agent may on such terms as to indemnity or otherwise as they may in their
      discretion impose (which shall, in the case of a mutilated Warrant, include
      the
      surrender thereof), issue a new Warrant of like denomination, tenor, and date
      as
      the Warrant so lost, stolen, mutilated, or destroyed. Any such new Warrant
      shall
      constitute a substitute contractual obligation of the Company, whether or not
      the allegedly lost, stolen, mutilated, or destroyed Warrant shall be at any
      time
      enforceable by anyone.

    


    7.3. Reservation
      of Common Stock.
      The
      Company shall at all times reserve and keep available a number of its authorized
      but unissued shares of Common Stock that will be sufficient to permit the
      exercise in full of all outstanding Warrants issued pursuant to this Warrant
      Agreement.

    


    7.4. Registration
      of Common Stock.
      The
      Company agrees that prior to the commencement of the Exercise Period, it shall
      file with the SEC a post-effective amendment to the Registration Statement,
      or a
      new registration statement, for the registration, under the Act, of, and it
      shall take such action as is necessary to qualify for sale, in those states
      in
      which the Warrants were initially offered by the Company, the Common Stock
      issuable upon exercise of the Warrants. In either case, the Company will use
      its
      best efforts to cause the same to become effective on or prior to the
      commencement of the Exercise Period and to maintain the effectiveness of such
      registration statement until the expiration of the Warrants in accordance with
      the provisions of this Warrant Agreement. The provisions of this Section 7.4
      may
      not be modified, amended or deleted without the prior written consent of
      Maxim.

    


    8. Concerning
      the Warrant Agent and Other Matters.

    


    8.1. Payment
      of Taxes.
      The
      Company will from time to time promptly pay all taxes and charges that may
      be
      imposed upon the Company or the Warrant Agent in respect of the issuance or
      delivery of shares of Common Stock upon the exercise of Warrants, but the
      Company shall not be obligated to pay any transfer taxes in respect of the
      Warrants or such shares.

    


    8.2. Resignation,
      Consolidation, or Merger of Warrant Agent.

    


    8.2.1. Appointment
      of Successor Warrant Agent.
      The
      Warrant Agent, or any successor to it hereafter appointed, may resign its duties
      and be discharged from all further duties and liabilities hereunder after giving
      sixty (60) days’ notice in writing to the Company. If the office of the Warrant
      Agent becomes vacant by resignation or incapacity to act or otherwise, the
      Company shall appoint in writing a successor Warrant Agent in place of the
      Warrant Agent. If the Company shall fail to make such appointment within a
      period of 30 days after it has been notified in writing of such resignation
      or
      incapacity by the Warrant Agent or by the holder of the Warrant (who shall,
      with
      such notice, submit his Warrant for inspection by the Company), then the holder
      of any Warrant may apply to the Supreme Court of the State of New York for
      the
      County of New York for the appointment of a successor Warrant Agent. Any
      successor Warrant Agent, whether appointed by the Company or by such court,
      shall be a corporation organized and existing under the laws of the State of
      New
      York, in good standing and having its principal office in the Borough of
      Manhattan, City and State of New York, and authorized under such laws to
      exercise corporate trust powers and subject to supervision or examination by
      federal or state authority. After appointment, any successor Warrant Agent
      shall
      be vested with all the authority, powers, rights, immunities, duties, and
      obligations of its predecessor Warrant Agent with like effect as if originally
      named as Warrant Agent hereunder, without any further act or deed; but if for
      any reason it becomes necessary or appropriate, the predecessor Warrant Agent
      shall execute and deliver, at the expense of the Company, an instrument
      transferring to such successor Warrant Agent all the authority, powers, and
      rights of such predecessor Warrant Agent hereunder; and upon request of any
      successor Warrant Agent the Company shall make, execute, acknowledge, and
      deliver any and all instruments in writing for more fully and effectually
      vesting in and confirming to such successor Warrant Agent all such authority,
      powers, rights, immunities, duties, and obligations.

    


    
      
         

      

      
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    8.2.2. Notice
      of Successor Warrant Agent.
      In the
      event a successor Warrant Agent shall be appointed, the Company shall give
      notice thereof to the predecessor Warrant Agent and the transfer agent for
      the
      Common Stock not later than the effective date of any such appointment.

     

    8.2.3. Merger
      or Consolidation of Warrant Agent.
      Any
      corporation into which the Warrant Agent may be merged or with which it may
      be
      consolidated or any corporation resulting from any merger or consolidation
      to
      which the Warrant Agent shall be a party shall be the successor Warrant Agent
      under this Warrant Agreement without any further act.

    


    8.3. Fees
      and Expenses of Warrant Agent.

    


    8.3.1. Remuneration.
      The
      Company agrees to pay the Warrant Agent reasonable remuneration for its services
      as Warrant Agent hereunder and will reimburse the Warrant Agent upon demand
      for
      all expenditures that the Warrant Agent may reasonably incur in the execution
      of
      its duties hereunder.

    


    8.3.2. Further
      Assurances.
      The
      Company agrees to perform, execute, acknowledge, and deliver or cause to be
      performed, executed, acknowledged, and delivered all such further and other
      acts, instruments, and assurances as may reasonably be required by the Warrant
      Agent for the carrying out or performing of the provisions of this Warrant
      Agreement.

    


    8.4. Liability
      of Warrant Agent.

    


    8.4.1. Reliance
      on Company Statement.
      Whenever in the performance of its duties under this Warrant Agreement, the
      Warrant Agent shall deem it necessary or desirable that any fact or matter
      be
      proved or established by the Company prior to taking or suffering any action
      hereunder, such fact or matter (unless other evidence in respect thereof be
      herein specifically prescribed) may be deemed to be conclusively proved and
      established by a statement signed by the President or Chairman of the Board
      of
      the Company and delivered to the Warrant Agent. The Warrant Agent may rely
      upon
      such statement for any action taken or suffered in good faith by it pursuant
      to
      the provisions of this Warrant Agreement.

    


    
      
         

      

      
        -10-

        
          

        

      

      
         

      

    

    8.4.2. Indemnity.
      The
      Warrant Agent shall be liable hereunder only for its own negligence, willful
      misconduct or bad faith. The Company agrees to indemnify the Warrant Agent
      and
      save it harmless against any and all liabilities, including judgments, costs
      and
      reasonable counsel fees, for anything done or omitted by the Warrant Agent
      in
      the execution of this Warrant Agreement except as a result of the Warrant
      Agent’s negligence, willful misconduct, or bad faith.

    


    8.4.3. Exclusions.
      The
      Warrant Agent shall have no responsibility with respect to the validity of
      this
      Warrant Agreement or with respect to the validity or execution of any Warrant
      (except its countersignature thereof); nor shall it be responsible for any
      breach by the Company of any covenant or condition contained in this Warrant
      Agreement or in any Warrant; nor shall it be responsible to make any adjustments
      required under the provisions of Section 4 hereof or responsible for the manner,
      method, or amount of any such adjustment or the ascertaining of the existence
      of
      facts that would require any such adjustment; nor shall it by any act hereunder
      be deemed to make any representation or warranty as to the authorization or
      reservation of any shares of Common Stock to be issued pursuant to this Warrant
      Agreement or any Warrant or as to whether any shares of Common Stock will when
      issued be valid and fully paid and nonassessable.

    


    8.5. Acceptance
      of Agency.
      The
      Warrant Agent hereby accepts the agency established by this Warrant Agreement
      and agrees to perform the same upon the terms and conditions herein set forth
      and among other things, shall account promptly to the Company with respect
      to
      Warrants exercised and concurrently account for, and pay to the Company, all
      moneys received by the Warrant Agent for the purchase of shares of the Company’s
      Common Stock through the exercise of Warrants.

    


    9. Miscellaneous
      Provisions.

    


    9.1. Successors.
      All the
      covenants and provisions of this Warrant Agreement by or for the benefit of
      the
      Company or the Warrant Agent shall bind and inure to the benefit of their
      respective successors and assigns.

    


    9.2. Notices.
      Any
      notice, statement or demand authorized by this Warrant Agreement to be given
      or
      made by the Warrant Agent or by the holder of any Warrant to or on the Company
      shall be sufficiently given when so delivered if by hand or overnight delivery
      or if sent by certified mail or private courier service within five days after
      deposit of such notice, postage prepaid, or sent by facsimile transmission
      (with
      confirmation of receipt), addressed (until another address is filed in writing
      by the Company with the Warrant Agent), as follows:

    


    Affinity
      Media International Corp.

    11601
      Wilshire Blvd., Suite 1500

    Los
      Angeles, CA 90025

    Attn:
      Howard Cohl, President

    


    
      
         

      

      
        -11-

        
          

        

      

      
         

      

    

    Any
      notice, statement or demand authorized by this Warrant Agreement to be given
      or
      made by the holder of any Warrant or by the Company to or on the Warrant Agent
      shall be sufficiently given when so delivered if by hand or overnight delivery
      or if sent by certified mail or private courier service within five days after
      deposit of such notice, postage prepaid, or sent by facsimile transmission
      (with
      confirmation of receipt) addressed (until another address is filed in writing
      by
      the Warrant Agent
      with the
      Company), as follows:

    


    


    American
      Stock Transfer & Trust Company

    59
      Maiden
      Lane

    New
      York,
      New York 10038

    Attn:
      Herbert J. Lemmer, Esq.

    


    with
      a
      copy in each case to:

    


    Ellenoff
      Grossman & Schole LLP

    370
      Lexington Avenue

    New
      York,
      New York 10017 

    Attn:
      Stuart Neuhauser, Esq.

    


    and

    


    Lowenstein
      Sandler PC

    65
      Livingston Avenue

    Roseland,
      New Jersey 07068

    Attn:
      Steven Skolnick, Esq.

    


    and

    


    Maxim
      Group LLC.

    405
      Lexington Avenue

    New
      York,
      New York 10174

    Attn:
      Clifford Teller, Managing Director

    


    9.3. Applicable
      Law.
      The
      validity, interpretation, and performance of this Warrant Agreement and of
      the
      Warrants shall be governed in all respects by the laws of the State of New
      York,
      without giving effect to conflict of laws. The Company hereby agrees that any
      action, proceeding or claim against it arising out of or relating in any way
      to
      this Warrant Agreement shall be brought and enforced in the courts of the State
      of New York located in New York County or the United States District Court
      for
      the Southern District of New York, and irrevocably submits to such jurisdiction,
      which jurisdiction shall be exclusive. The Company hereby waives any objection
      to such exclusive jurisdiction and that such courts represent an inconvenient
      forum. Any such process or summons to be served upon the Company may be served
      by transmitting a copy thereof by registered or certified mail, return receipt
      requested, postage prepaid, addressed to it at the address set forth in Section
      9.2 hereof. Such mailing shall be deemed personal service and shall be legal
      and
      binding upon the Company in any action, proceeding or claim

    


    
      
         

      

      
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    9.4. Persons
      Having Rights under this Warrant Agreement.   Nothing
      in this Warrant Agreement expressed and nothing that may be implied from any
      of
      the provisions hereof is intended, or shall be construed, to confer upon, or
      give to, any person or entity other than the parties hereto and the Registered
      Holders of the Warrants (who shall, for all purposes hereunder, be deemed third
      party beneficiaries of this Warrant Agreement) and, for the purposes of Sections
      3.3.5, 6.1, 6.4, 7.4, 9.2 and 9.8 hereof, Maxim, any right, remedy, or claim
      under or by reason of this Warrant Agreement or of any covenant, condition,
      stipulation, promise, or agreement hereof. Maxim shall be deemed to be a
      third-party beneficiary of this Warrant Agreement with respect to Sections
      3.3.5, 6.1, 6.4, 7.4, 9.2 and 9.8 hereof. All covenants, conditions,
      stipulations, promises, and agreements contained in this Warrant Agreement
      shall
      be for the sole and exclusive benefit of the parties hereto (and Maxim with
      respect to the Sections 3.3.5, 6.1, 6.4, 7.4 and 9.2 hereof) and their
      successors and assigns and of the Registered Holders of the
      Warrants.

    


    9.5. Examination
      of the Warrant Agreement.
      A copy
      of this Warrant Agreement shall be available at all reasonable times at the
      office of the Warrant Agent in the Borough of Manhattan, City and State of
      New
      York, for inspection by the Registered Holder of any Warrant. The Warrant Agent
      may require any such holder to submit his Warrant for inspection by
      it.

    


    9.6. Counterparts.
      This
      Warrant Agreement may be executed in any number of counterparts and each of
      such
      counterparts shall for all purposes be deemed to be an original, and all such
      counterparts shall together constitute but one and the same
      instrument.

    


    9.7. Effect
      of Headings.
      The
      Section headings herein are for convenience only and are not part of this
      Warrant Agreement and shall not affect the interpretation thereof.

    


    9.8. Amendments.
      This
      Warrant Agreement may be amended by the parties hereto without the consent
      of
      any registered holder for the purpose of curing any ambiguity, or of curing,
      correcting or supplementing any defective provision contained herein or adding
      or changing any other provisions with respect to matters or questions arising
      under this Warrant Agreement as the parties may deem necessary or desirable
      and
      that the parties deem shall not adversely affect the interest of the registered
      holders. All other modifications or amendments (except as otherwise specifically
      set forth herein), including any amendment to increase the Warrant Price or
      shorten the Exercise Period, shall require the written consent of each of Maxim
      and the registered holders of a majority of the then outstanding Warrants.
      Notwithstanding the foregoing, the Company may lower the Warrant Price or extend
      the duration of the Exercise Period in accordance with Sections 3.1 and 3.2,
      respectively, without such consent.

    


    
      
         

      

      
        -13-

        
          

        

      

      
         

      

    

    9.9. Severability.
      This
      Warrant Agreement shall be deemed severable, and the invalidity or
      unenforceability of any term or provision hereof shall not affect the validity
      or enforceability of this Warrant Agreement or of any other term or provision
      hereof. Furthermore, in lieu of any such invalid or unenforceable term or
      provision, the parties hereto intend that there shall be added as a part of
      this
      Warrant Agreement a provision as similar in terms to such invalid or
      unenforceable provision as may be possible and be valid and
      enforceable.

    


    


    


    [Remainder
      of Page Intentionally Left Blank.]

    
      
         

      

      
        -14-

        
          

        

      

      
         

      

    


    


    IN
      WITNESS WHEREOF, this Warrant Agreement has been duly executed by the parties
      hereto as of the day and year first above written.

    


    


    AFFINITY
      MEDIA INTERNATIONAL CORP.

    


    


    


    By:_______________________________

    Name:
      Howard Cohl

    Title:   President

    


    


    AMERICAN
      STOCK TRANSFER 

    &
      TRUST COMPANY

    


    


    


    By:_______________________________

    Name:
      

    Title:   

    


     

    
      
         

      

        -15-