U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 10-QSB
(mark one)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997
[ ] TRANSITION REPORT UNDER SECTION 13
OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to ________
Commission File No. 0-16355
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PRINCETON MEDIA GROUP, INC.
(Exact name of small business issuer as specified in its Charter)
Ontario, Canada 98-0082860
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
214 Brazilian Avenue, Suite 300, Palm Beach, Florida 33480
(Address of principal executive offices)
561/659-0121
(Issuer's telephone number)
-----------------------------------------
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the issuer was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
YES [X] NO [ ]
The number of shares outstanding of the issuer's common stock no par value,
as of November 13, 1997 was 3,012,697.
Transitional Small Business Disclosure Format (check one):
YES [ ] NO [X]
PRINCETON MEDIA GROUP, INC.
FORM 10-QSB
For the Quarterly Period Ended September 30, 1997
INDEX
Page Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Consolidated Balance Sheet as of September 30, 1997
Consolidated Statements of Operations and Accumulated Deficit
for the nine months ended September 30, 1997 and 1996
and for the three months ended September 30, 1997 and 1996
Consolidated Statements of Cash Flows
for the nine months ended September 30, 1997 and 1996
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
Signatures
PRINCETON MEDIA GROUP, INC.
Consolidated Balance Sheet
(Unaudited)
September 30, 1997
Assets
Current assets
Cash $ 602,167
Accounts receivable, net 1,975,222
Due from affiliate 70,150
Inventories 728,601
Prepaid expenses 61,879
Total current assets 3,438,019
Property and equipment, net 1,752,679
Other assets 36,619
Trademarks, copyrights and other intangibles, net 12,782,760
Total assets $ 18,010,077
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable $ 1,521,479
Accrued expenses 567,215
Current portion of long-term debt 990,108
Line of credit 273,333
Deferred revenue 956,883
Accrued interest 60,514
Total current liabilities 4,369,532
Long-term debt, less current portion 8,488,801
Shareholders' equity:
Series A Preference shares 28,923
Series C Preference shares 739,696
Common stock 18,854,973
Accumulated deficit (14,471,848)
Total shareholders' equity 5,151,744
Total liabilities and shareholders' equity $ 18,010,077
See accompanying notes to consolidated financial statements.
PRINCETON MEDIA GROUP, INC.
Consolidated Statements of Operations and Accumulated Deficit
(Unaudited)
<TABLE>
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Distribution, circulation, and
other income $ 2,943,220 $2,052,974 $ 7,532,988 $ 3,225,548
Advertising income 852,474 765,956 2,259,517 1,409,065
Printing income 284,072 248,417 863,910 460,059
Net revenues 4,079,766 3,067,347 10,656,415 5,094,672
Cost of sales 2,879,051 1,422,523 7,782,283 2,461,592
Gross profit 1,200,715 1,644,824 2,874,132 2,633,080
Operating expenses 1,516,525 821,540 4,204,454 1,821,107
Income (loss) from operations ( 315,810) 823,284 (1,330,322) 811,973
Interest and other income 60,271 209 69,618 5,159
Interest and other expense ( 254,938) ( 361,691) ( 727,826) (519,513)
Income (loss) from continuing operations ( 510,477) 461,802 (1,988,530) 297,619
Income from discontinued operations - 415,257 - 415,257
Income (loss) before income taxes ( 510,477) 877,059 (1,988,530) 712,876
Provision for income taxes 111,862 133,929 111,862 133,929
Net income (loss) ( 622,339) 743,130 (2,100,392) 578,947
Accumulated deficit, beginning of period ( 13,129,168) ( 6,123,700) ( 11,368,215) ( 5,959,517)
Preferred stock dividend (Note 9) ( 720,341) - ( 1,003,241) -
Accumulated deficit, end of period ($14,471,848) ($5,380,570) ($14,471,848) ($5,380,570)
Earnings (loss) per share
Primary ($.62) $.97 ($2.38) $1.21
Fully diluted ($.62) .79 ($2.38) 1.16
Weighted average number of
shares outstanding 2,366,440 731,766 1,473,348 435,976
See accompanying notes to consolidated financial statements.
</TABLE>
PRINCETON MEDIA GROUP, INC.
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
Nine months ended September 30,
<S> <C> <C>
1997 1996
Cash flows from operating activities:
Net income (loss) $(2,100,392) $ 578,947
Adjustments to reconcile net loss
to net cash used in
operating activities
Depreciation 229,176 397,231
Amortization 281,446 -
Interest on debenture conversion ( 54,435) -
Gain on forgiveness of debt - ( 5,159)
Gain on disposition of subsidiary - (415,257)
Stock issued as payment for consulting, legal
settlement, and employee stock option plan 439,475 67,734
Net income (loss) adjusted for noncash items (1,204,730) 623,496
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable 560,446 (1,664,472)
Inventories ( 72,576) ( 257,062)
Prepaid expenses and deposits 96,743 ( 39,755)
Other assets (157,400) ( 665,458)
Increase (decrease)in:
Accounts payable 733,370 195,986
Accrued expenses (565,871) 258,911
Income taxes payable 104,400 133,929
Due to related party ( 77,125) 547,999
Deferred revenue 187,016 223,163
Accrued interest payable 313,985 65,812
Net cash used in
operating activities ( 81,742) ( 577,451)<PAGE>
Cash flows from investing activities:
Capital expenditures ( 206,072) -
Cash paid for acquisition of trademarks,
copyrights, equipment, and related
receivables and payables - (5,088,264)
Net cash used in
investing activities ( 206,072) (5,088,264)
Cash flows from financing activities:
Proceeds from issuance of common stock 1,736,000 3,157,113
Proceeds from exercise of options on common stock 337,500 -
Proceeds from issuance of preferred stock - 2,740,000
Proceeds from issuance of convertible debentures - 329,900
Proceeds remitted from stock sales in settlement of
convertible securities (Note 9) (2,051,800) -
Proceeds from note payable 620,000 -
Payments of principal (381,882) -
Net cash provided by
financing activities 259,818 6,227,013
Net increase (decrease) in cash ( 27,996) 561,298
Cash, December 31, 1996 and 1995 630,163 13,859
Cash, September 30, 1997 and 1996 $ 602,167 $ 575,157
Supplemental disclosures of cash flow information:
1997 1996
Interest paid $ 413,757 $ 281,973
Income taxes paid $ 7,462 $ -
Noncash investing and financing activities:
Common stock issued for consulting, legal settlement,
and employee stock option plan $ 439,475 -
Common stock issued for capitalized
consulting services on acquisitions in process $ 329,514 -
Common stock issued for accrued severance $ 380,625 -
Settlement of convertible preferred stock
and conversion of debentures $ 4,638,046 -
Dividend adjustment - warrants $ 507,012 -
Common stock issued for franchise rights $ 25,000 -
</TABLE>
During the first quarter of 1997, the Company purchased the trademark of a
magazine valued at $400,000 in exchange for a credit of $300,000 in advertising
in the Company's publications and $100,000 to be paid over a one year period.
The Company purchased printing equipment valued at $77,000 for a note. The
Company also issued stock valued at $25,000 as final payment for franchise
rights on environmentally safe ink.
In 1996 the Company purchased equipment appraised at $1,814,000 and trademarks
and copyrights valued at $5,186,000 for $1,000,000 in cash, a 90-day note of
$1,000,000 and a long-term note of $5,000,000. The Company also purchased
trademarks and copyrights valued at $107,390 for $32,390 in cash and an
installment loan payable of $75,000 of which $25,000 was paid in September,
1996. The Company purchased equipment valued at $75,000, accounts receivable of
$725,227, accounts payable and accrued expenses of $439,676 and trademarks and
copyrights of $6,639,449 for $3,000,000 in cash and a long-term note of
$4,000,000. The Company entered into capital leases for equipment capitalized
at $28,014.
See accompanying notes to consolidated financial statements.
PRINCETON MEDIA GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis for Presentation
The accompanying unaudited interim financial statements consolidate the accounts
of Princeton Media Group, Inc. ("Princeton" or the "Company") and its wholly
owned subsidiaries. All significant intercompany transactions and balances have
been eliminated in consolidation. In the opinion of management, the
accompanying unaudited interim consolidated financial statements contain all
adjustments (consisting only of normal recurring accruals) necessary to present
fairly the financial position as of September 30, 1997, and the results of their
operations and their cash flows for the quarters ended September 30, 1997 and
1996 and for the nine month periods ended September 30, 1997 and 1996. The
results of operations for the quarter ended September 30, 1997 and for the nine
months ended September 30, 1997 are not necessarily indicative of the results to
be expected for the full year. These statements should be read in conjunction
with the Company's annual report on Form 10-KSB as amended for the year ended
December 31, 1996.
2. Net Loss Per Share
Net loss per share is computed using the weighted average number of shares of
common stock outstanding. Common equivalent shares from stock options and
warrants, and additional shares assuming the conversion of debentures and
preferred shares, are excluded from the computation as their effect is
antidilutive.
Cumulative and paid preferred stock dividends of $854,848 for the quarter and
$1,402,734 for the nine months period have been added to the net loss in the net
loss per share computation. These amounts are primarily related to the
settlement of convertible securities (see Note 9).
3. Accounts Receivable
Accounts receivable at September 30, 1997 consisted of the following:
Accounts receivable, gross $6,941,405
Less:
Allowance for returns and miscellaneous charges 4,931,183
Allowance for doubtful accounts 35,000
Total accounts receivable, net $1,975,222
4. Inventories
Inventories at September 30, 1997 consisted of the following:
Paper $ 313,530
Ink and other 37,970
Work in process 377,101
Total inventories $ 728,601
5. Property and Equipment
Property and equipment as of September 30, 1997 consisted of the following
assets, all depreciated between 5 and 7 years:
Printing equipment $1,981,835
Computer equipment 130,948
Office furniture and equipment 72,560
2,185,343
Less accumulated depreciation (432,664)
Total property and equipment, net $1,752,679
6. Trademarks, Copyrights and Other Intangibles
Trademarks, copyrights and other intangibles at September 30, 1997 consisted of
the following:
Trademarks and copyrights $12,643,592
Acquisition costs 486,914
Organizational costs 34,387
Franchise rights 82,140
13,247,033
Less accumulated amortization (464,273)
Trademarks, copyrights, and
other intangibles, net $12,782,760
7. Line of Credit
The Company has a line of credit with a distributor for working capital of up
to $500,000 which may be drawn down in multiples of $10,000. Any draw will
bear interest at prime plus 2% and will be payable in equal monthly payments
of principal and interest over a one year period. At September 30, 1997,
$273,333 was payable on the line of credit.
8. Long-term Debt
Long-term debt at September 30, 1997, consisted of the following:
Note payable - First Seller $5,000,000
Note payable - Second Seller 4,414,466
Note payable - Equipment and capital leases 64,443
9,478,909
Less current portion 990,108
Total long-term debt $8,488,801
9. Convertible Securities
In order to fund the 1996 acquisitions, the company issued certain convertible
securities. In March 1997, the Company reached an agreement (the "Agreement")
with the holders of all of its outstanding convertible debentures, convertible
preferred Series D, and certain of its convertible preferred Series E
stockholders to convert their holdings to common stock. In April the Company
issued 1,105,700 shares into escrow per the Agreement. In the third quarter of
1997, in a final settlement agreement it was determined that approximately
138,000 additional shares in excess of the original estimated shares were for
complete conversion of the securities. All shares required by the settlement
were accrued as issued as of September 30, 1997, although there were issuances
subsequent to quarter end and approximately 93,000 shares remain to be issued as
of the date of this report. In accordance with the Company's accounting policy,
if the final settlement requires additional shares or cash, an additional
expense (or income) related to the debentures, and dividends related to the
preferred stock, would be recorded. Therefore, the Company charged $409,426 to
deficit (representing the fair value of the shares sold for the account of the
preferred shareholders), and credited interest expense for $54,435 for an over-
estimate of the expense related to the convertible debentures.
The Company also completed settlement of the remaining balance of its
convertible Preferred Series E shares under a different settlement agreement
with identical terms except that a balance of $403,198 remains to be paid in the
fourth quarter of 1997. This amount will be funded through additional stock
sales and the Company will charge preferred stock dividends for the settlement.
Certain of the preferred securities holders were granted warrants at exercise
prices ranging from $4.85 to $8.85 to purchase 102,510 shares of the Company's
common stock. The estimated value of these warrants of $282,900 was accounted
for as a dividend to these shareholders in the first quarter of 1997. In the
third quarter the remaining securities holders were granted warrants to purchase
81,200 shares on the same terms. The estimated value of these warrants of
$224,112 was accounted for as a dividend to these shareholders.
10. Income Tax Provision
A tax benefit of $104,000 was recognized at December 31, 1996. The benefit has
been adjusted to zero in the third quarter of 1997.
11. Changes in Preferred and Common Shares
Changes in preferred shares Series D and E for the nine months ended September
30, 1997, were as follows:
Preferred Stock Series D and Series E:
Series D Series E
Shares Amount Shares Amount
Balance at January 1, 1997 1,200 $1,005,000 1,634 $1,549,484
Settlement and
conversion to common shares (1,200) ( 1,005,000) (1,634) (1,549,484)
Balance at September 30, 1997 - $ - - $ -
Change in common shares for the nine months ended September 30, 1997 was as
follows:
Shares Amount
Balance at December 31, 1996 865,969 $12,197,802
Issuance of shares for consulting fees,
legal settlement, and employee stock option plan 109,325 439,475
Issuance of shares for capitalized consulting
services on acquisitions in process 103,500 329,514
Issuance of shares for accrued severance 120,000 380,625
Proceeds on exercise of stock options 125,000 337,500
Issuance of shares for franchise rights 5,000 25,000
Settlement of convertible preferred stock
and conversion of debentures 1,512,903 4,638,045
Dividend - warrants (Note 9) - 507,012
Balance at September 30, 1997 2,841,697 $18,854,973
Item 2. Management's Discussion and Analysis
Forward-looking Statements
CAUTION:
Statements contained in this Form 10-QSB regarding the Company's future
prospects or operating results constitute forward-looking statements and as
such, must be considered with caution and with the understanding that various
factors could cause actual results to differ materially from those in such
forward-looking statements. Such factors include but are not limited to changes
in revenues from distribution, advertising and subscriptions; changes in costs
of materials and operations; and failure of pending or anticipated acquisitions
to be consummated.
GENERAL
The Company, through its wholly-owned subsidiaries, Princeton Publishing, Inc.,
and Firestone Publishing, Inc., is engaged in the publishing, printing, and
distribution of approximately 25 periodical consumer lifestyle magazines. The
Princeton and Firestone editorial staffs and offices are located in New York
City and Miami, respectively. A wholly-owned subsidiary of Princeton
Publishing, Inc., Kingston Press, Inc., leases and maintains a printing plant in
Sussex, Wisconsin. The plant is used for the printing of the Company's
magazines and to perform printing work for third parties on a contract basis.
The Company's executive offices are located in Palm Beach, Florida.
USE OF EBITDA
The following comparative discussion of the results of operations and financial
condition of Princeton Media Group, Inc. includes, among other factors, an
analysis of changes in the Earnings Before Interest, Taxes, Depreciation and
Amortization ("EBITDA") in order to help determine the operating performance of
the individual business units and of the company as a whole. EBITDA also
removes the effects of the significant amounts of amortization of intangible
assets and debt incurred in the two acquisitions completed during 1996 which
totaled $17 million in assets.
In 1996 and 1997 the Company issued stock in exchange for the services of
business contultants and investor relations professionals to assist in advising
the investing public of the establishment of the new publishing operations as
well as to assist in the settlement of convertible securities issued to finance
the acquisitions. The Company considers these issuances of stock, which are
non-cash payments for services unrelated to evaluation of normal operations, to
be charges to earnings after EBITDA. Additionally, in 1996 the Company
recognized a gain of $415,466 in the third quarter related to the disposition of
a wholly-owned subsidiary. This non-cash transaction unrelated to normal
operations has also been added to earnings after EBITDA in discussions herein.
Financial analysts generally consider EBITDA to be an important measure of
comparative operating performance for the business of Princeton Media Group and
when used in comparison to debt levels or the coverage of interest expense, as a
measure of liquidity. However, EBITDA should be considered in addition to, not
as a substitute for, operating income, net income, cash flow, and other measures
of financial performance and liquidity reported in accordance with generally
accepted accounting principles.
TRANSACTIONS AFFECTING COMPARABILITY OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
The Company discontinued operations of its prior business as of December 31,
1995. Operations for the Company's new business of publishing and printing
began in the second quarter of 1996.
In comparing the nine month period ended September 30, 1996 to the nine month
period ended September 30, 1997, it should be noted that the first of the two
major publishing businesses acquired in 1996 was purchased in March, 1996, and
the second was purchased in September, 1996 whereas both businesses have had
operations for all of 1997. Increases in revenues, cost of goods sold, and
operating expenses are primarily due to there being partial periods of
operations during the first nine months of 1996 compared to operations during
the entire first nine months of 1997 as follows.
The first acquisition of a publishing and printing business (through Princeton
Publishing, Inc., a wholly-owned subsidiary) was on March 29, 1996. Results of
operations for the nine months ended September 30, 1996, included only two
quarters in 1996 whereas there were three full quarters of operations in the
period ended September 30, 1997. The second publishing business (through
Firestone Publishing, Inc., a wholly-owned subsidiary) was acquired on September
6, 1996. Results of operations for the nine months ended September 30, 1996,
included less than one month in the 1996 amounts whereas there were three full
quarters of operations in the period ended September 30, 1997.
RESULTS OF OPERATIONS
The nine month period ended September 30, 1997 compared to the nine month period
ended September 30, 1996:
Revenues for the nine month period ended September 30, 1997 amounted to
$10,656,415 compared to operating revenue of $5,094,672 for the same period in
1996. Revenues are derived almost entirely from magazine sales, subscriptions,
advertising, and outside printing.
Cost of sales for the nine month period ended September 30, 1997 were $7,782,283
compared with $2,461,592 for the nine month period ended September 30, 1996.
Operating expenses for the nine month period ended September 30, 1997 were
$4,204,454 compared with $1,821,107 for the nine month period ended September
30, 1996. Operating expenses include approximately $447,000 of non-cash expense
for issuance of common shares of stock for consulting services, primarily in
connection with the settlement of the Company's convertible securities.
Management anticipates that this will be a nonrecurring expense.
There was an increase in gross revenues of $1,533,819 due primarily to
distribution and advertising revenues on several new magazine titles. Cost of
sales has increased in amount and as a percentage of sales, primarily due to
increases in both paper costs and color separation costs. In management's
opinion, previous separation procedures, while low in cost,resulted in
unsatisfactory print quality of the magazines. Currently, separations are
performed by reputable suppliers at a cost that is average for the magazine
industry. The improved quality of the finished product is anticipated to enable
the Company to compete more successfully in the industry and to help achieve
both the short-term and long-term objectives of management's expansion and
acquisition plans.
During the nine month period ended September 30, 1997, $727,826 in interest
expense was charged to operations compared to $519,513 in interest expense for
the nine month period ended September 30, 1996. Primarily, interest expense was
accrued pursuant to two promissory notes executed by Princeton Publishing, Inc.,
in the amount of $5 million and Firestone Publishing, Inc., in the amount of $4
million, respectively, in connection with the purchases of the magazine
publishing assets.
Monthly interest payments of approximately $43,000 are due pursuant to the $5
million promissory note executed upon acquisition of the publishing assets
acquired March 29, 1996.
Interest on the $4 million promissory note executed upon acquisition of the
publishing assets acquired on September 6, 1996 was accrued for one year and on
September 6, 1997, accrued interest was added to principal in the amount of
$414,166. Payments of principal and interest are due on a straight-line
amortization schedule over forty-eight months with the first payment paid on
October 6, 1997. The Company anticipates that cash flows from operations will
be sufficient to pay all debt service obligations of the two subsidiaries.
For the quarter ended September 30, 1997, EBITDA, as defined above, was $49,707.
For the nine months ended September 30, 1997, the Company reported an EBITDA
deficit of $373,054 compared to positive EBITDA of $1,081,903 for the quarter
ended September 30, 1996, and $1,276,938 for the nine months ended September 30,
1996. Net loss for the nine month period ended September 30, 1997 was
$2,100,392 which represents a decrease of $2,679,339 from the net income of
$578,947 for the nine month period ended September 30, 1996.
The Company attributes the changes in EBITDA to a number of factors. Previous
declines in revenue from advertising, due primarily to financial difficulties
experienced by existing advertisers, is being remedied by new advertising
contracts, now in place and being negotiated, to replace previous advertisers.
Declines in circulation are affecting many newsstand-based titles as
consolidation in the traditional newsstand wholesaler distribution network
occurs on a large scale.
The Company believes that its best current strategy is to continue to improve
its products so as to increase its market share, so that when, as expected, the
newsstand distribution network regains vitality, the Company will be in a strong
position to benefit from the increased sales in the industry. In keeping with
that strategy, expenses have increased as the Company has invested in a
superstructure that will accommodate a more modern company of larger size.
Examples of these expenditures include new office space for Princeton
Publishing, the inauguration of an employee benefits package which provides
basic health and dental coverage, research costs associated with due diligence
analysis of potential acquisition targets, investments in new computer equipment
for editorial production, reorganized management with certain higher wage
opportunities in order to attract superior professional staff, and
consulting arrangements associated with investor relations and potential
acquisitions. The Board of Directors expects these investments to generate
positive results as the Company streamlines its operations in 1998.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity and capital resources are hereinafter discussed in three broad
categories: operating activities, investing activities and financing
activities.
Cash decreased $27,996 to $602,167 at September 30, 1997 from $630,163 at
December 31, 1996. Net cash used in operating activities was $81,742 during the
nine month period ended September 30, 1997 compared to cash used by operating
activities of $577,451 during the nine month period ended September 30, 1996.
The decrease of $495,709 in use of funds in operations is primarily attributable
to the establishment of continuing operations in connection with the change in
business of the Company from telecommunications equipment sales to magazine
publishing and printing.
During the nine month period ended September 30, 1997, net cash used in
investing activities was $206,072, expended primarily for computer and printing
equipment, which represents a decrease of $4,882,192 from net cash used in
investing activities of $5,088,264 during the nine month period ended September
30, 1996, used for initial investment in printing equipment and trademarks and
copyrights.
During the nine month period ended September 30, 1997, net cash provided by
financing activities was $259,818 representing a decrease of $5,967,195 from net
cash provided by financing activities of $6,227,013 during the nine month period
ended September 30,1996. The funds provided in the first nine months of 1996
were primarily from proceeds from the sale of stock and convertible debentures
issued for the purpose of acquiring publishing acquisitions. The funds provided
in the first nine months of 1997 were obtained primarily from a draw on the line
of credit for working capital.
SETTLEMENT OF CONVERTIBLE DEBT AND EQUITY SECURITIES
As detailed in Note 9 of the financial statements, in March 1997, the Company
finalized the settlement with holders of convertible securities issued to fund
the initial acquisitions of publishing operations in 1996. Almost all of the
debt and equity securities consisting of convertible debentures with a face
value of $1,925,000 and Series D and E preferred stock with original face values
of $1.2 and $1.8 million respectively were retired in the second quarter upon
transfer of 1.1 million shares into an escrow account for purposes of the
settlement. The transaction was recorded based on estimates subject to final
adjustment and at the end of the third quarter the settlement was finalized.
Management believes that the final settlement of the conversion of the
securities into common stock will benefit the Company through improvement of the
debt to equity ratio and through elimination of the uncertainty of potential
dilution related to the conversion that existed before the settlement.
MANAGEMENT ENHANCEMENT
Since inception of publishing operations, the Board of Directors has sought to
identify and recruit management personnel with backgrounds from much larger
publishing companies to establish a management team consistent with the
company's expansion goals.
In September, 1997, the Company named Hugo Barreca as the new Chief Financial
Officer. Mr. Barreca brings twenty years of experience in the publishing
industry, including senior positions with Time Inc., the New York Times Magazine
Group, and Gruner + Jahr USA Publishing. His responsibilities have included
strategic business planning, financial planning and management, contract
negotiations and purchasing, and computer systems development including
inventory database systems, financial management systems, logistic models and
telecommunications systems. Mr. Barreca received an M.B.A. from New York
University and a J. D. from Fordham School of Law as well as other academic
degrees and professional honors. Based in the New York office, Mr. Barreca will
be responsible for the company's overall financial planning and management. He
will also direct the company-wide consolidation of current operations and
implement the company's expansion program through continued acquisitions of
related business operations in publishing, advertising, websites, and other
related media.
Robert F. Kendall, formerly CFO, has become Senior Vice President - Finance and
continues to serve as Treasurer and Assistant Secretary. He is based in the
Palm Beach, Florida, administrative office where he heads the accounting
department and is responsible for all financial reporting and tax planning.
CURRENT EVENTS AND STRATEGIC PLANNING
The Company intends to continue the operations of the businesses acquired during
1996 and to expand these operations into new areas of distribution, including
international editions and the establishment of Internet web sites for several
of its well-known magazine titles. The expansion of distribution channels for
the Company's brand-name magazine titles, combined with the Company's continuing
program of cost reduction through consolidation of its operations, is
anticipated to substantially increase the net revenues from the Company's
operations.
Management of the Company believes that, with the exception of advertising
revenue as detailed below, the results of operations for 1996 and the first nine
months of 1997 were consistent with the expectations established during the due
diligence investigation completed prior to the purchases of the two businesses.
Management further anticipates that the implementation of its business plan
during 1997 and 1998, which includes, among other things, production
efficiencies, cost-saving measures, new market exploration, increased capacity
utilization in the printing plant, and acquisition of additional businesses,
will realize a substantial growth in assets as well as increases in revenues and
profits.
Distribution and Circulation
Distribution revenues increased during the third quarter over the second quarter
primarily due to launching of several new magazines.
The Company has executed a trademark license agreement with Spice Direct, Inc.,
a subsidiary of Spice Entertainment, Inc. (Nasdaq: SPZE), for use of its "Spice"
trademark. The agreement grants the Company an exclusive nontransferable right
and license to use the "Spice" trademark throughout the United States in
conjunction with both a printed and electronic (Internet) published magazine.
The magazine includes entertainment content and a monthly guide to programming
carried on Spice cable television and satellite channels which are available in
23 million U.S. households and which are carried by more than 500 cable systems.
The agreement includes provision for cross promotion between the publishing and
programming partners. The first issue went on sale in the third quarter of
1997.
Printing Plant
The Company has upgraded and expanded its printing plant to accommodate the
printing of all Company publications as well as third party printing contracts.
At the end of the third quarter of 1997, the transition was completed for all
Firestone titles, which were previously printed by an outside company, to be
printed in-house at an annual savings of approximately $535,000. The Company
will begin to realize the benefit of this transition in the fourth quarter.
Advertising
During the third quarter, the Company executed an agreement with a major
advertiser that will increase advertising revenues by $1 million during the
eighteen months which began September 15, 1997. Due to the delay between order
date and on-sale-date of advertising, the Company expects to realize a partial
benefit of the contract in the fourth quarter of 1997 and to commence to realize
full benefit in the first quarter of 1998. The agreement is expected to help
reverse the decrease in advertising revenue in the second and third quarters
which was due, in part, to the financial difficulties of several of the
Company's advertisers. Additionally, the Company is pursuing other long-term
advertising contracts with other advertisers and anticipates the introduction of
several new accounts in the remainder of 1997 and early 1998.
Internet Websites
The Company has established Internet websites related to several of the
Company's existing publications. The Company is evaluating the expansion of the
existing web sites, and the introduction of new sites, which would utilize the
text, graphics, advertisers, products and services of most of its approximately
25 publications, one of the largest commonly-owned groups of well-known, name
brand leisure and special interest titles. Revenues sought from the web sites
are from monthly memberships, subscriptions, advertising pages, and mail order
products. The Company engaged a consultant in April, 1997, to assist the
initial design and construction of the sites and connectivity; this initial
evaluation is complete. As of the date of this report the Company intends to
complete the project internally. The Company intends to proceed diligently with
Internet development to ensure that websites produce a near-term financial
benefit to the Company.
Acquisitions
The Company has been and is currently in active negotiation for the acquisition
of a group of magazine titles and additional related media operations. At the
end of October, 1997, one of the acquisition targets announced that it was in
the process of being acquired by its own franchise subsidiary. Related
acquisition costs of approximately $100,000 shown as deferred costs at the end
of the third quarter will be charged to operations in the fourth quarter.
In conjunction with the acquisition process, Princeton Media Group, Inc., has
executed an agreement with an investment banking firm which has expressed a
commitment to the Company to arrange up to $40 million in financing for such
acquisitions, including the financial restructuring of the Company. On behalf
of other unrelated clients, the California-based investment banking firm has
participated in capital transactions of more than $3 billion over the past seven
years. The firm is presently advising Princeton regarding due diligence
matters, valuation, and negotiation of purchase agreements. It is expected that
financing will be accomplished principally through an offering of corporate
debt.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
Exhibit Exhibit
Number
10.1 Employment Agreement
27.1 Financial Data Schedule
(b) Reports on Form 8-K: None
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Date: November 14, 1997
PRINCETON MEDIA GROUP, INC.
/s/ James J. McNamara
By: James J. McNamara,
Chairman of the Board and
Acting Chief Executive Officer
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into effective as
of the 15th day of September, 1997 between Princeton Media Group, Inc., a
Canadian corporation (the "Company"), and Hugo Barreca, an individual resident
of Brooklyn, New York (the "Employee").
WITNESSETH:
WHEREAS, it is the desire of the Company to offer the Employee employment
with the Company upon the terms and subject to the conditions set forth herein;
and
WHEREAS, it is the desire of the Employee to accept the Company's offer of
employment with the Company upon the terms and subject to the conditions set
forth herein.
NOW THEREFORE, in consideration of the premises and mutual covenants,
conditions and agreements contained herein and for such other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, each intending to be legally bound hereby, agree as follows:
1. Employment. The Company hereby agrees to employ the Employee and
the Employee hereby agrees to be employed by the Company upon the terms and
subject to the conditions set forth herein for the period of employment as set
forth in Section 2 hereof (the "Period of Employment").
The Employee represents and warrants that he is not party to any agreement, oral
or written, which restricts in any way: (a) his ability to perform his
obligations hereunder; or (b) his right to compete with a previous employer or
such employer's business.
2. Term; Period of Employment. Subject to extension or termination as
hereinafter provided, the Period of Employment hereunder shall be from the date
hereof (the "Effective Date") through the one-year anniversary of the Effective
Date and may be extended by mutual agreement of the parties for additional one-
year terms (the "Renewal Period"). The phrase "Period of Employment" as used
herein shall, unless otherwise indicated, specifically include any extensions
permitted hereunder or provided herein, except as otherwise noted.
3. Office and Duties. During the Period of Employment:
(a) the Employee shall be employed as the Chief Financial Officer
of the Company with the responsibilities reasonably prescribed for such position
by the Board of Directors of the Company (the "Board of Directors") in
accordance with the Bylaws;
(b) the Employee shall devote full time to the business and
affairs of the Company except for vacations, illness or incapacity, as
hereinafter set forth. In consideration of such employment, the Employee agrees
that he shall not, directly or indirectly, individually or as a member of any
partnership or joint venture, or as an officer, director, stockholder, employee
or agent of any other person, firm, corporation, business organization or other
entity, engage in any trade or business activity or pursuit for his own account
or for, or on behalf of, any other person, firm, corporation, business
organization or other entity, if such activity competes, conflicts or interferes
with that of the Company or the performance of the Employee's obligations
hereunder;
(c) the Employee shall report only to the Chairman, President,
and/or Chief Executive Officer of the Company; and
(d) the Employee shall be entitled to vacation time of four weeks
per year.
4. Compensation and Benefits. In exchange for the services rendered by
the Employee pursuant hereto during the Period of Employment, the Employee shall
be compensated as follows:
(a) Compensation. The Company shall pay the Employee compensation
equal to One Hundred Fifty Thousand Dollars ($150,000) per annum ("Annual
Compensation") at a rate of Twelve Thousand Five Hundred Dollars ($12,500) per
month ("Monthly Compensation"). Such salary shall be payable in accordance with
the customary payroll practices of the Company.
(b) Withholding and Employment Tax. Payment of all compensation
hereunder shall be subject to customary withholding tax and other employment
taxes as may be required with respect to compensation paid by an
employer/corporation to an employee.
5. Business Expenses. The Company shall pay or reimburse the Employee
for all reasonable travel or other expenses incurred by the Employee in
connection with the performance of his duties under this Agreement, provided
that the same are previously authorized by the Company, in accordance with such
procedures as the Company may from time to time establish for employees and as
required to preserve any deductions for federal income taxation purposes to
which the Company may be entitled.
6. Disability. The Company shall provide the Employee with
substantially the same disability insurance benefits as those, if any, currently
being provided by the Company, if any, for similar employees. Such benefits
shall commence on the effective date of this Agreement.
7. Death. The Company shall provide the Employee with substantially
the same life insurance benefits as those currently being provided by the
Company for similar employees, if any. Such benefits shall commence on the
effective date of this Agreement. In the event of the Employee's death, the
obligation of the Company to make payments pursuant to Section 4 hereof shall
cease as of the date of such Employee's death and the Company shall pay to the
estate of the Employee any amount due to the Employee under Sections 4 and 5
which has accrued up to the date of death.
8. Other Benefits. The Employee shall be entitled to participate in
fringe benefit, deferred compensation and stock option plans or programs of the
Company, if any, to the extent that his position, tenure, salary, age and other
qualifications make him eligible to participate commensurate with participation
by other employees of the Company, subject to the rules and regulations
applicable thereto, and with respect to non-standard benefits such as deferred
compensation plans, only if such participation is determined by the Board of
Directors in its sole discretion. Such additional benefits may include, but not
be limited to, paid sick leave and individual health insurance (all in
accordance with the policies of the Company) and professional dues and
association memberships. Such benefits shall commence on the effective date of
this Agreement.
9. Termination of Employment. Notwithstanding any other provision of
this Agreement, employment hereunder may be terminated:
(a) By the Company, in the event of the Employee's death or
Disability or for "Just Cause." "Just Cause" shall be defined to be limited to:
(i) theft, embezzlement or fraud by Employee;
(ii) any of the following which continues
unremedied for two months' after written notice to
Employee by Company:
(A) other gross misconduct or gross dishonesty by
Employee which, in the opinion of the Company's Board of
Directors jeopardizes the Company or Employee's ability
to perform in accordance with the terms hereof;
(B) Employee's willful failure to perform, or gross
negligence in the performance of, his duties and
responsibilities to the Company or any material breach
by Employee of this Agreement;
(C) prolonged or repeated absence from duty without
the consent of the Company (for reasons other than the
Employee's health or incapacity).
In the event of termination due to the Employee's death, the Employee's
employment hereunder shall be deemed terminated as of the date of death. In the
event of termination pursuant to subsection (i) above, the Employee's employment
hereunder shall be deemed terminated as of the date of written notice by the
Company to the Employee of the event or circumstance which constitutes "Just
Cause," and such notice shall be given within thirty (30) days after discovery
of the occurrence of an event or circumstance which constitutes "Just Cause."
The Employee shall be deemed to have a "Disability" for purposes of this
Agreement if he is unable to perform, by reason of physical or mental
incapacity, a material portion of his duties or obligations under this Agreement
for a period of ninety (90) consecutive days in any 365-day period. The Board
of Directors shall determine whether and when the Disability of the Employee has
occurred and such determination shall not be arbitrary or unreasonable. The
Company shall give the Employee three months' notice in the event of termination
due to Disability.
(b) By the Employee, upon four months' written notice to the
Company.
10. Non-Competition. Notwithstanding any earlier termination, during
the Period of Employment and thereafter for the lesser of two (2) years, or a
length of time equal to the actual length of the Period of Employment:
(a) the Employee shall not, anywhere in North America directly or
indirectly, individually or as a member of any partnership or joint venture, or
as an officer, director, stockholder, employee or agent of any other person,
firm, corporation, business organization or other entity, participate in, engage
in, solicit or have any financial or other interest in any activity or any
business or other enterprise in any field which at the time of termination is
competitive with the business or is in substantially the same business as the
Company or any affiliate, subsidiary or division thereof (unless the Board of
Directors shall have authorized such activity and the Company shall have
consented thereto in writing), as an individual or as a member of any
partnership or joint venture, or as an officer, director, stockholder, investor,
employee or agent of any other person, firm, corporation, business organization
or other entity. For purposes hereof, "competitive with the business or in
substantially the same business" shall be limited to the business of publishing
(whether print, electronic, or other medium utilized by the Company or any
affiliate, subsidiary or division thereof) in any of the particular niche areas
in which the Company engages or has engaged in during the term of employment
hereunder, in publishing;
(b) the Employee shall not: (i) solicit or induce any employee of
the Company to terminate his employment or otherwise leave the Company's employ;
or (ii) contact or solicit any clients or customers of the Company, either as an
individual or as a member of any partnership or joint venture, or as an officer,
director, stockholder, investor, employee or agent of any other person, firm,
corporation, business organization or other entity.
PROVIDED, however, that none of the provisions of this Section 10 shall apply in
the event of termination of this Agreement or of the Period of Employment which
constitutes a breach by the Company of the terms of this Agreement.
11. Confidential Information. The parties hereto recognize that it is
fundamental to the business and operation of the Company, its affiliates,
subsidiaries and divisions thereof to preserve the specialized knowledge, trade
secrets, and confidential information of the foregoing concerning the field of
advertising, marketing and interactive Internet solutions. The strength and
good will of the Company is derived from the specialized knowledge, trade
secrets, and confidential information generated from experience through the
activities undertaken by the Company, its affiliates, subsidiaries and divisions
thereof. The disclosure of any of such information and the knowledge thereof on
the part of competitors would be beneficial to such competitors and detrimental
to the Company, its affiliates, subsidiaries and divisions thereof, as would the
disclosure of information about the marketing practices, pricing practices,
costs, profit margins, design specifications, analytical techniques, concepts,
ideas, process developments (whether or not patentable), customer and client
agreements, vendor and supplier agreements and similar items or technologies.
By reason of his being an employee of the Company, in the course of his
employment, the Employee has or shall have access to, and has obtained or shall
obtain, specialized knowledge, trade secrets and confidential information such
as that described herein about the business and operation of the Company, its
affiliates, subsidiaries and divisions thereof. Therefore, the Employee hereby
agrees as follows, recognizing and acknowledging that the Company is relying on
the following in entering into this Agreement:
(a) The Employee hereby sells, transfers and assigns to the
Company, or to any person or entity designated by the Company, any and all
right, title and interest of the Employee in and to all creations, designs,
inventions, ideas, disclosures and improvements, whether patented or unpatented,
and copyrightable material, made or conceived by the Employee solely or jointly,
in whole or in part, during or before the term hereof (commencing with the date
of the Employee's engagement as a consultant to the Company) which: (i) relate
to methods, apparatus, designs, products, processes or devices created,
promoted, marketed, distributed, sold, leased, used, developed, relied upon or
otherwise provided by the Company or any affiliate, subsidiary or division
thereof; or (ii) otherwise relate to or pertain to the business, operations or
affairs of the Company or any affiliate, subsidiary or division thereof.
Whether during the Period of Employment or thereafter, the Employee shall
execute and deliver to the Company such formal transfers and assignments and
such other papers and documents as may be required of the Employee to permit the
Company or any person or entity designated by the Company to file, enforce and
prosecute the patent applications relating to any of the foregoing and, as to
copyrightable material, to obtain copyright thereon; and
(b) Notwithstanding any earlier termination, during the Period of
Employment and for a period of one (1) year thereafter, the Employee shall,
except as otherwise required by or compelled by law, keep secret and retain in
strict confidence, and shall not use, disclose to others, or publish any
information, other than information which is in the public domain or becomes
publicly available through no wrongful act on the part of the Employee, which
information shall be deemed not to be confidential information, relating to the
business, operation or other affairs of the Company, its affiliates,
subsidiaries and divisions thereof, including but not limited to confidential
information concerning the design and marketing practices, pricing practices,
costs, profit margins, products, methods, guidelines, procedures, engineering
designs and standards, design specifications, analytical techniques, technical
information, customer, client, vendor or supplier information, employee
information, and any and all other confidential information acquired by him in
the course of his past or future services for the Company or any affiliate,
subsidiary or division thereof. The Employee shall hold as the Company's
property all notes, memoranda, books, records, papers, letters, formulas and
other data and all copies thereof and therefrom in any way relating to the
business, operation or other affairs of the Company, its affiliates,
subsidiaries and divisions thereof, whether made by him or otherwise coming into
his possession. Upon termination of his employment or upon the demand of the
Company, at any time, the Employee shall deliver the same to the Company within
twenty-four (24) hours of such termination or demand.
12. Reasonableness of Restrictions. The Employee hereby agrees that the
restrictions in this Agreement, including without limitation, those relating to
the duration of the provisions hereof and the territory to which such
restrictions apply, are necessary and fundamental to the protection of the
business and operation of the Company, its affiliates, subsidiaries and
divisions thereof, and are reasonable and valid.
13. Reformation of Certain Provisions. In the event that a court of
competent jurisdiction or an arbitrating authority determines that the
non-compete or the confidentiality provisions hereof are unreasonably broad or
otherwise unenforceable because of the length of their respective terms or the
breadth of their territorial scope, or for any other reason, the parties hereto
agree that such court or arbitrating authority may reform the terms and/or scope
of such covenants so that the same are reasonable and, as reformed, shall be
enforceable.
14. Remedies. Other than with respect to terminations governed by
Section 9 hereof, and subject to Section 15 below, in the event of a breach of
any of the provisions of this Agreement, the non-breaching party shall provide
written notice of such breach to the breaching party. The breaching party shall
have thirty (30) days after receipt of such notice in which to cure its breach.
If, on the thirty-first (31st) day after receipt of such notice, the breaching
party shall have failed to cure such breach, the non-breaching party thereafter
shall be entitled to seek damages. It is acknowledged that this Agreement is of
a unique nature and of extraordinary value and of such a character that a breach
hereof by the Employee shall result in irreparable damage and injury to the
Company for which the Company may not have any adequate remedy at law.
Therefore, if, on the thirty-first (31st) day after receipt of such notice, the
breaching party shall have failed to cure such breach, the non-breaching party
shall also be entitled to seek a decree of specific performance against the
breaching party, or such other relief by way of restraining order, injunction or
otherwise as may be appropriate to ensure compliance with this Agreement. The
remedies provided by this section are non-exclusive and the pursuit of such
remedies shall not in any way limit any other remedy available to the parties
with respect to this Agreement, including, without limitation, any remedy
available at law or equity with respect to any anticipatory or threatened breach
of the provisions hereof. In the event of any litigation or other proceeding
between the Company and the Employee with respect to the subject matter of this
Agreement and the enforcement of the rights hereunder, the losing party shall
reimburse the prevailing party for all of his/its reasonable costs and expenses,
as well as any forum fees, relating to such litigation or other proceeding,
including, without limitation, his/its reasonable attorneys' fees and expenses,
provided that such litigation or proceeding results in a final settlement
requiring payment to the prevailing party; or final judgement.
15. Certain Provisions; Specific Performance. In the event of a breach
by the Employee of the non-competition or confidentiality provisions hereof,
such breach shall not be subject to the cure provision of Section 14 above and
the Company shall be entitled to seek immediate injunctive relief and a decree
of specific performance against the Employee. Such remedy is non-exclusive and
shall be in addition to any other remedy to which the Company or any affiliate,
subsidiary or division thereof may be entitled.
16. Consolidation; Merger; Sale of Assets. Nothing in this Agreement
shall preclude the Company from combining, consolidating or merging with or
into, transferring all or substantially all of its assets to, or entering into a
partnership or joint venture with, another corporation or other entity, or
effecting any other kind of corporate combination, provided that, the
corporation resulting from or surviving such combination, consolidation or
merger, or to which such assets are transferred, or such partnership or joint
venture assumes this Agreement and all obligations and undertakings of the
Company hereunder. Upon such a consolidation, merger, transfer of assets or
formation of such partnership or joint venture, this Agreement shall inure to
the benefit of, be assumed by, and be binding upon such resulting or surviving
transferee corporation or such partnership or joint venture, and the term
"Company," as used in this Agreement, shall mean such corporation, partnership
or joint venture, or other entity and this Agreement shall continue in full
force and effect and shall entitle the Employee and his heirs, beneficiaries and
representatives to exactly the same compensation, benefits, perquisites,
payments and other rights as would have been their entitlement had such
combination, consolidation, merger, transfer of assets or formation of such
partnership or joint venture not occurred.
17. Survival. Sections 10 through 15 shall survive the termination for
any reason of this Agreement (whether such termination is by the Company, by the
Employee, upon the expiration of this Agreement by its terms or otherwise);
provided, however, that in the event that the Company ceases to exist and
neither an affiliate, subsidiary or division thereof has assumed, at its option,
the obligations of the Company hereunder, the Employee shall no longer be bound
by the Non-Competition provision set forth in Section 10 hereof.
18. Mitigation of Damages by Employee not Applicable. Regardless of
whether applicable law requires the Employee to mitigate damages in the event of
a breach by the Company of this Agreement, the parties hereby agree that the
amount of any salary or other compensation received by Employee from any other
entity after termination of his employment with the Company shall not offset or
mitigate any damages for which the Company is or becomes liable to Employee in
connection with such breach.
19. Severability. The provisions of this Agreement shall be considered
severable in the event that any of such provisions are held by a court of
competent jurisdiction or an arbitrating authority to be invalid, void or
otherwise unenforceable. Such invalid, void or otherwise unenforceable
provisions shall be automatically replaced by other provisions which are valid
and enforceable and which are as similar as possible in term and intent to those
provisions deemed to be invalid, void or otherwise unenforceable.
Notwithstanding the foregoing, the remaining provisions hereof shall remain
enforceable to the fullest extent permitted by law.
20. Entire Agreement; Amendment. This Agreement contains the entire
agreement between the Company and the Employee with respect to the subject
matter hereof and thereof. This Agreement may not be amended, changed, modified
or discharged, nor may any provision hereof be waived, except by an instrument
in writing executed by or on behalf of the party against whom enforcement of any
amendment, waiver, change, modification or discharge is sought. No course of
conduct or dealing shall be construed to modify, amend or otherwise affect any
of the provisions hereof.
21. Notices. All notices, request, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given when
(a) physically delivered, (b) delivered by express mail or other expedited
service, or (c) mailed, postage prepaid, via first class mail with simultaneous
facsimile transmittal, as follows:
(a) To the Company: Princeton Media Group, Inc.
214 Brazilian Avenue, Suite 300
Palm Beach, Florida 33480
Attention: President
Fax: (561) 659-0214
With an additional copy
by like means to: Fleming & O'Neill, P.C.
255 Washington St., Suite 200
Newton, Massachusetts 02158
Attn: Julia K. O'Neill, Esq.
Fax: (617) 964-1694
(b) To the Employee: Mr. Hugo Barreca
70 Eighth Ave.
Brooklyn, NY 11217
Fax:
and/or to such other persons and addresses as any party hereto shall have
specified in writing to the other.
22. Assignability. This Agreement shall not be assignable by the
Employee, but shall be binding upon and shall inure to the benefit of his heirs,
executors, administrators and legal representatives. This Agreement shall be
assignable by the Company to any affiliate, subsidiary or division thereof and
to any successor in interest.
23. Governing Law. This Agreement shall be governed by and construed
under the laws of the State of New York, without regard to the principles of
conflicts of laws thereof.
24. Waiver and Further Agreement. Any waiver of any breach of any terms
or conditions of this Agreement shall not operate as a waiver of any other
breach of such terms or conditions or any other term or condition hereof, nor
shall any failure to enforce any provision hereof operate as a waiver of such
provision or of any other provision hereof. Each of the parties hereto agrees
to execute all such further instruments and documents and to take all such
further action as the other party may reasonably require in order to effectuate
the terms and purposes of this Agreement.
25. Headings of No Effect. The headings contained in this Agreement are
for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
26. Arbitration. In the event of any dispute between the parties to
this Agreement regarding the subject matter of this Agreement, such dispute
shall be submitted to binding arbitration at New York, New York in accordance
with the rules of the American Arbitration Association.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
PRINCETON MEDIA GROUP, INC.
By: /s/James J. McNamara
James J. McNamara
Chairman
THE EMPLOYEE
/s/Hugo Barreca
Hugo Barreca
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