Exhibit 10.3 Form of Letter Agreement C
Letter Agreement
Princeton Media Group, Inc. (the "Company") Date:
Dear Sirs:
This letter shall constitute the Notice of Conversion of all Series D
and/or Series E Convertible Preferred Stock and all Convertible Debentures of
the Company held by [ ] ("Holder"), in accordance with the
following terms:
1. Any previous Notice of Conversion by Holder is hereby superseded.
2. The number of shares issuable upon conversion shall be [ ],
which number was determined with reference to Holder's Total Dollar Amount,
which equals [$ ]. (See detail on Exhibit A attached hereto.) Holder
hereby agrees to the immediate return to the Company for cancellation all
warrants for the purchase of common shares of the Company held by it. Within
thirty (30) days of execution of this Agreement, the parties shall determine the
total amount of any loss incurred by Holder resulting from buy-ins of the
Company's common shares necessary to cover any short positions, and shall add
such total amount to the Total Dollar Amount.
3. All common stock issuable upon conversion (the "Conversion
Shares") shall be delivered by the Company without any restrictive legend
directly to a foreign securities broker who is neither a U.S. Person as
defined in Regulation S nor a U.S. domiciliary (the "Agent") mutually agreed
upon by Holder and the Company to be held for Holder's benefit by the Agent.
4. The conversion noticed hereby shall be effectuated according to
the following schedule: (a) 7% of the Conversion Shares shall be issued on
Holder's behalf to the Agent during the week which is the sixth full week after
full execution of this Letter Agreement; (b) an additional 7% shall be issued
during each week thereafter for a consecutive 12 week period; and (c) the
remaining 9% shall be issued during the next week thereafter (the last day of
such week, the "End Date").
5. For purposes of this paragraph 5, Return shall mean the amount of
cash proceeds from sales of Holder's Conversion Shares (if any) plus any unsold
Conversion Shares, which unsold shares shall be valued at the 5-day average
closing bid price for the week of issuance of such shares. The Agent shall
deliver to Holder all cash proceeds from sales of Holder's Conversion Shares
within ten (10) days after the date of each respective sale. If the Agent fails
to timely deliver to Holder sale proceeds as set forth in the foregoing sentence
then the Company shall suspend all further issuances of shares to the Agent
and all shares shall be issued directly to Holder or Holder's written designee,
according to the same schedule as set forth in paragraph 4 above. If the
Agent has not delivered to Holder, within 15 days following the End Date, a
Return which equals Holder's Total Dollar Amount, then the Company shall make up
any shortfall within twenty (20) days thereafter, either in cash or in common
stock of the Company, such shares being valued according to the then most
recent 5-day average closing bid price, or any combination thereof; provided,
however, that if the Agent has delivered to Holder, within 15 days following the
End Date, a Return which equals at least 70% of Holder's Total Dollar Amount,
then the Company shall have a period of thirty (30) days to make up any
shortfall, in cash or common stock as set forth above. Holder acknowledges that
it shall not be entitled to any Return exceeding Holder's Total Dollar Amount,
but that any such excess shall be forfeited to the Agent.
6. Holder's signature below shall constitute a reaffirmation as of this
date of Holder's Offshore Securities Subscription Agreement with the Company,
which is incorporated herein by reference in its entirety. Holder acknowledges
that the 40-day "Restricted Period" with respect to all securities of the
Company purchased by Holder or to be delivered to Holder pursuant to Holder's
Preferred Stock or Convertible Debentures, including all Conversion Shares and
Non-Conversion Shares to be delivered pursuant to this Notice of Conversion,
will commence this date, due to such reaffirmation.
7. As further consideration for Holder's entering into the arrangement
described herein, the Company hereby agrees to issue to Holder warrants for the
purchase of [ ] shares of common stock in the Company at an exercise price
of $4.85 per share; warrants for the purchase of [ ] shares at $5.85 per
share; warrants for the purchase of [ ] shares at $6.85 per share; warrants
for the purchase of [ ] shares at $7.85 per share; and warrants for the
purchase of [ ] shares at $8.85 per share. All of said warrants shall have
a two-year exercise period commencing on the date of issuance. The Company
further undertakes that if, during the two-year exercise period of said
warrants, there is no period of 15 consecutive business days during which the
Company's Common Stock has a closing bid price of $10 or more, then the
Company shall pay to Holder, in cash, the difference between (a) the amount
Holder would have realized if it exercised all warrants and simultaneously sold
the underlying Common Stock at a moment when the closing bid price was $10, and
(b) the amount Holder would have realized if it exercised all warrants and
simultaneously sold the underlying Common Stock at the highest closing bid
price which the Common Stock reached or exceeded for a period of 15
consecutive business days during said two-year period.
8. If the Company does not fulfill any of its obligations (fails to
perform even partially) hereunder by August 15, 1997, then Holder shall be
entitled to all of the privileges and protections granted and detailed in the
subscription documents and Certificate of Designation of the Series D
Preferred shares, including the attachable warrants, provided, however, that
the warrants delivered pursuant hereto shall in such event be cancelled. If
the Company does not fulfill all of its obligations hereunder by August 15,
1997 (including making up any shortfall during the appropriate time period as
referenced in paragraph 5), then the Company shall pay to Holder within thirty
(30) days thereafter, in cash or stock at the Company's option, the amount
then remaining due of the Total Dollar Amount. If paid in stock, such shares
shall be valued according to the then most recent 5-day average closing bid
price.
9. Holder further, on behalf of itself and its successors and assigns,
does hereby release, acquit, and forever discharge the Company and its
successors and assigns, its agents, servants, directors, officers,
stockholders, employees, divisions, subdivisions, subsidiaries, and
affiliates, of and from any and all past and present claims, counterclaims,
demands, actions, causes of action, liabilities, damages, costs, loss of
services, expenses, compensation, third-party actions, suits at law or in
equity, of every nature and description, whether known or unknown, suspected
or unsuspected, foreseen or unforeseen, real or imaginary, and whether arising
at law or in equity, under the common law, state or federal law, or any other
law, or otherwise, except, however, those obligations of the Company pursuant
to the Series D and E Convertible Preferred Stock or Convertible Debentures of
the Company held by Holder, taking into account this Agreement. This release
shall not be construed in any manner to discharge Celebrity Entertainment,
Inc., or its successors, assigns, agents, servants, directors, officers,
stockholders, employees, divisions, subdivisions, subsidiaries or affiliates
in their capacity as such with respect to Celebrity Entertainment, Inc.
10. The Company, on behalf of itself and its successors and assigns,
its agents, servants, directors, officers, stockholders, employees, divisions,
subdivisions, subsidiaries, and affiliates, does hereby release, acquit, and
forever discharge Holder and its successors and assigns, of and from any and all
past and present claims, counterclaims, demands, actions, causes of action,
liabilities, damages, costs, loss of services, expenses, compensation, third-
party actions, suits at law or in equity, of every nature and description,
whether known or unknown, suspected or unsuspected, foreseen or unforeseen,
real or imaginary, and whether arising at law or in equity, under the common
law, state or federal law, or any other law, or otherwise.
Witness: [Holder]
By:
Print Name: Print Name:
Princeton Media Group, Inc. hereby agrees to the terms set forth above.
Princeton Media Group, Inc.
By:
