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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No.2)
Byron Preiss Multimedia Company, Inc.
(Name of Issuer)
Common Stock, par value $.001 per share
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(Title of Class of Securities)
740445 10 1
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(CUSIP Number)
Byron Preiss, c/o Byron Preiss Multimedia Company, Inc.
24 West 25th Street, New York, NY 10010
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
June 15, 1998
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is subject of this Schedule 13D, and is filing this
statement because of Rule 13d-1(b)(3) or (4), check the following box: / /
Check the following box if a fee is being paid with the statement: / /
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AMENDMENT NO. 2 TO
CUSIP No. SCHEDULE 13D
1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Byron Preiss
2. Check the Appropriate Box if a Member of a Group (a) / /
(b) / /
3. SEC Use Only
4. Source of Funds
Not applicable
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) / /
6. Citizenship or Place of Organization
United States
7. Sole Voting Power
1,020,333
Number of Shares
8. Shared Voting Power
Beneficially 0
Owned by Each
9. Sole Dispositive Power
Reporting Person 1,020,333
With
10. Shared Dispositive Power
0
11. Aggregate Amount Beneficially Owned by Each Reporting Person
1,020,333
12. Check Box if the Aggregate Amount in Row 11
Excludes Certain Shares / /
13. Percent of Class Represented by Amount in Row 11
12.3%
14. Type of Reporting Person
IN
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Item 1. Security and Issuer.
This Amendment No. 2 to the Statement on Schedule 13D (the
"Statement") relates to the Common Stock, par value $.001 per share (the
"Common Stock") of Byron Preiss Multimedia Company, Inc., a New York
corporation (the "Issuer"). This Statement restates in electronic format the
original Schedule 13D and Amendment No. 1 to the original Schedule 13D filed
by Byron Preiss on February 14, 1995 and April 20, 1995 respectively.
The name and principal executives offices of the Issuer are:
Byron Preiss Multimedia Company, Inc.
24 West 25th Street
New York, New York 10010
Item 2. Identity and Background
(a) This Statement on Schedule 13D relates to the shares of Common
Stock of the Issuer owned by Byron Preiss ("Mr. Preiss").
(b) Mr. Preiss's business address is:
c/o Byron Preiss Multimedia Company, Inc.
24 West 25th Street
New York, New York 10010
(c) Mr. Preiss's present principal occupation is President, Chief
Executive Officer and Director of the Issuer. The name and address of the
Issuer is set forth in Item 1 above.
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(d) Mr. Preiss has not, during the last five (5) years, been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) Mr. Preiss has not, during the last five years, been a party to a
civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or
finding any violation with respect to such laws.
(f) Mr. Preiss is a citizen of the United States.
Item 3. Source and Amount of Funds or Other Consideration
The initial 1,037,000 shares of Common Stock of the Issuer owned by
Mr. Preiss as reported on the original Schedule 13D filed on February 14, 1995
were acquired for an aggregate of $1,067.00, or $.001 per share, with Mr.
Preiss's personal funds in July 1992. At such time, the Issuer was not subject
to the reporting requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and had no class of securities registered under
Section 12 thereunder. In May 1994, the Issuer's registration statement was
declared effective under the Securities Act of 1933, as amended, and its
shares of Common Stock were registered under Section 12 of the Exchange Act.
As of the date hereof, Mr. Preiss currently beneficially owns 1,020,333 shares
of Common Stock.
Item 4. Purpose of Transaction
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In February 1995 Mr. Preiss, the founder of the Issuer, acquired the
shares of Common Stock of the Issuer for investment. Mr. Preiss does not have
any present plans or proposals which relate to or would result in:
(a) The acquisition by any person of additional securities of the
Issuer, or the disposition of securities of the Issuer;
(b) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of its
subsidiaries;
(c) A sale or transfer of a material amount of assets of the Issuer
or of any of its
subsidiaries;
(d) Any change in the present board of directors or management of the
Issuer, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the board;
(e) Any material change in the present capitalization or dividend
policy of the Issuer;
(f) Any other material change in the Issuer's business or corporate
structure, including but not limited to, if the Issuer is a registered
closed-end investment company, any plans or proposals to make any changes in
its investment policy for which a vote is required by section 13 of the
Investment Company Act of 1940;
(g) Changes in the Issuer's charter, by-laws or instruments
corresponding thereto or other actions which may impede the acquisition of
control of the Issuer by any person;
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(h) Causing a class of securities of the Issuer to be delisted from a
national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
(i) A class of equity securities of the Issuer becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Exchange Act;
or
(j) Any action similar to any of those enumerated above.
Item 5. Interest in Securities of the Issuer.
(a) Subject to certain restrictions contained in the Stock Pledge and
Escrow Agreement (as more fully described in Item 6), Mr. Preiss currently owns
beneficially and of record 1,020,333 shares of Common Stock of the Issuer,
representing 12.3% of the issued and outstanding shares of the Issuer's Common
Stock.
(b) Subject to certain restrictions contained in the Stock Pledge and
Escrow Agreement (as more fully described in Item 6), Mr. Preiss has the sole
power to vote or to direct the vote, and the sole power to dispose or direct
the disposition of the shares of Common Stock of the Issuer owned by him.
(c) In December 1994, Mr. Preiss made a gift of 30,000 shares of
Common Stock of the Issuer (which represents less than 1% of the issued and
outstanding shares of Common Stock of the Issuer) to the Preiss Charitable
Foundation, Inc., a non-profit corporation (the "Foundation"). In December
1996, Mr. Preiss made a gift of 50,000 shares of Common Stock of the Issuer to
the Foundation. Mr. Preiss is an officer and a director of the Foundation,
which gives him voting and investment control of such shares which now aggregate
78,987 shares.
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The 1,020,333 shares of Common Stock referenced in this Statement on Schedule
13D and in the cover pages hereof excludes shares of Common Stock that were
the subject of the gifts to the Foundation. Mr. Preiss disclaims beneficial
ownership of such shares that were the subject of such gift.
Pursuant to the Issuer's 1993 Stock Option Plan, as amended, on each
of June 26, 1997 and December 19, 1997 the Issuer granted Mr. Preiss an option
to purchase 100,000 shares of the Common Stock of the Issuer at an exercise
price of $1.30625 and $1.89 respectively. The options will vest in three equal
installments on the first, second and third anniversaries of the date of grant.
On June 15, 1998, the Issuer granted Mr. Preiss an option to purchase 150,000
shares of the Common Stock of the Issuer at an exercise price of $1.00 per
share. The option will vest in three equal installments on the first, second
and third anniversaries of the date of grant.
(d) Mr. Preiss has the sole right to receive or the power to direct
the receipt of dividends from, or the proceeds from the sale of, all shares of
Common Stock of the Issuer owned by him.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or
Relationships With Respect to Securities of
the Issuer
On June 15, 1998, pursuant to a Stock Pledge and Escrow Agreement
(the "Agreement"), Mr. Preiss pledged 600,000 of his shares of the Issuer's
Common Stock (the "Pledged Shares") as collateral for and as a condition
precedent to a $500,000 loan between the Issuer and Securities Management,
Inc. ("SMI"). Pursuant to the terms of the
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Agreement, the Pledged Shares are held in escrow by an escrow agent and the
Pledged Shares are released from escrow and returned to Mr. Preiss in blocks
of 30,000 shares for every multiple of $25,000 delivered by the Issuer to SMI
in repayment of the loan. In the event of a default under the Issuer's
obligations to SMI under the related loan agreement and promissory note, and
after expiration of a 180 day cure period, the escrow agent will deliver the
Pledged Shares to SMI. So long as no default has occurred, Mr. Preiss retains
the right to exercise all voting rights and dividend rights associated with
the Pledged Shares.
Pursuant to the terms of a Stock Purchase Agreement dated as of March
22, 1995 (the "Purchase Agreement"), the Issuer sold to Viacom International
Inc. ("Viacom"), a subsidiary of Viacom Inc. and an affiliate of Simon &
Schuster, Inc., unregistered shares of the Issuer's Common Stock and warrants
to purchase additional shares of the Issuer's Common Stock. The sale of the
Common Stock to Viacom represented the issuance by the Issuer, and the
ownership by Viacom, of approximately twenty percent (20%) of the Issuer's
outstanding shares of Common Stock, on a fully diluted basis, on the date of
issuance. Pursuant to a Registration Rights Agreement, dated March 22, 1995
(the "Effective Date"), the Issuer granted Viacom demand certain and
incidental registration rights pertaining to the Common Stock of the Issuer
held by Viacom. In connection therewith, Viacom was granted demand
registration rights commencing eighteen (18) months from the Effective Date.
In connection with the foregoing transactions, on March 22, 1995, the Mr.
Preiss entered into a Shareholders' Agreement (the "Shareholders' Agreement")
with Viacom and certain other shareholders of the Issuer owning in the
aggregate, approximately twenty-five percent (25%)
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of the Issuer's outstanding Common Stock (the "Group"). Pursuant to the terms
of the Shareholders' Agreement, Mr. Preiss and the Group have agreed to vote
their shares of the Issuer's Common Stock to elect to the Issuer's Board of
Directors a nominee or nominees of Viacom, proportional to Viacom's stock
ownership in the Issuer on a fully diluted basis, with Viacom being
represented by at least one (1) seat on the Issuer's Board of Directors, for
so long as it shall continue to own at least ten percent (10%) of the Issuer's
issued and outstanding shares of Common Stock. In addition, pursuant to the
terms of the Shareholders' Agreement, Mr. Preiss and the Group have granted
Viacom a right of first refusal (the "Right of First Refusal") with respect to
shares of the Issuer's Common Stock which may in the future be sold by either
Mr. Preiss or members of the Group. Viacom has agreed to provide a similar
Right of First Refusal to Mr. Preiss and the Group, with respect to any sales
of the Issuer's Common Stock sold by Viacom. Additionally, in consideration of
the grant to Viacom by Mr. Preiss and the Group of the Right of First Refusal,
Viacom and the Issuer agreed that Mr. Preiss and the Group shall have
incidental "piggy-back" registration rights with respect to any registration
statement filed by the Issuer on behalf of Viacom, in order to register
Viacom's shares of the Issuer's Common Stock. Viacom was granted a priority
with respect to any demand registration commenced during the period commencing
eighteen (18) months from the Effective Date and extending for a period of
thirty (30) months thereafter. After the thirtieth (30th) month, Mr. Preiss
and the Group were granted the right, on a pro-rata basis, to include their
shares in any such demand registration (subject to certain restrictions
pertaining to underwritten offerings). With respect to the incidental
registration rights granted to Viacom by the Issuer, during the period
commencing on the
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Effective Date and extending for a period of thirty (30) months thereafter,
Mr. Preiss and the Group, pro rata, were granted a priority in registering the
shares of the Issuer's Common Stock owned by them (subject to certain
restrictions pertaining to underwritten offerings).
Item 7. Exhibits
1. Stock Pledge and Escrow Agreement, dated as of June 15, 1998
between Byron Preiss, SMI and Kane Kessler, P.C. as Escrow Agent.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete
and correct.
Dated: July 15, 1998
/s/ Byron Preiss
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Byron Preiss
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STOCK PLEDGE AND ESCROW AGREEMENT
THIS STOCK PLEDGE AND ESCROW AGREEMENT (this "Agreement") is made and
entered into as of June 15, 1998, by BYRON PREISS (the "Pledgor") in favor of
SECURITIES MANAGEMENT, INC., (the "Pledgee") and KANE KESSLER, P.C. (the "Escrow
Agent") which term shall include any successor escrow agent appointed pursuant
to Section 8.
W I T N E S S E T H :
WHEREAS, concurrently herewith the Pledgee is loaning to Byron Preiss
Multimedia Company, Inc. (the "Borrower") $500,000 pursuant to the 11% Secured
Promissory Note Agreement between the Borrower and the Pledgee of even date
herewith (as the same may be amended, modified, supplemented or restated from
time to time, hereinafter the "Note Agreement") and the related promissory note
(the "Note"); and
WHEREAS, the Pledgor is the Chief Executive Officer, Chairman of the
Board and a major stockholder of the Borrower;
WHEREAS, it is a condition precedent to the effectiveness of the Note
that the Pledgor shall have executed this Agreement and made the pledge in favor
of the Pledgee of 600,000 shares of the Borrower's common stock, $.01 par value
("Common Stock") and deliver such shares to the Escrow Agent as contemplated
hereby (the "Pledged Stock").
WHEREAS, the Pledgor will materially benefit from the loan to be made
to the Borrower under the Note Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto agree as follows:
1. Pledge of Stock; Other Collateral.
(a) As collateral security for the payment and performance of
all debts, obligations or liabilities now or hereafter existing, absolute or
contingent, of the Borrower's obligations under the Note Agreement and the Note
(the "Secured Obligations"), the Pledgor hereby pledges and collaterally assigns
and delivers to the Escrow Agent certificates evidencing all the Pledged Stock
accompanied by stock powers therefor, duly endorsed in blank. The term "Pledged
Stock" as used herein means all of the following:
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(A) all cash, securities, dividends, rights, and
other property at any time and from time to time declared or distributed in
respect of or in exchange for any or all of the Pledged Stock; and
(B) all other property hereafter delivered to the
Pledgee in substitution for or in addition to any of the foregoing, all
certificates and instruments representing or evidencing such property and all
cash, securities, interest, dividends, rights, and other property at any time
and from time to time declared or distributed in respect of or in exchange for
any or all of the Pledged Stock.
(C) all proceeds of any of the foregoing (including,
without limitation, proceeds constituting any property of the types described
above).
All such Pledged Stock, certificates, instruments, cash, securities, interest,
dividends, rights and other property referred to in this Section 1, are herein
collectively referred to as the "Collateral."
2. Appointment of Escrow Agent and Escrow Fund. The Escrow Agent is
hereby appointed to act as escrow agent hereunder and the Escrow Agent agrees to
act as such, pursuant to the terms hereinafter set forth herein. The Escrow
Agent shall hold the Pledged Stock and is authorized to establish any bank
account to hold the Collateral (the "Escrow Fund").
3. Release of the Pledged Stock.
The Escrow Agent shall continue to hold the Collateral in its
possession until authorized hereunder to distribute the Escrow Fund, or any
specified portion thereof, as follows:
(a) The Escrow Agent is authorized to release 30,000 shares of
the Pledged Stock for every multiple of $25,000 delivered by or on behalf of the
Borrower to the Pledgee The Borrower or the Pledgor shall notify the Pledgee and
the Escrow Agent of the amount of funds paid to Pledgee, and the date of payment
of such funds. Unless the Pledgee shall, or on before the fifth day following
its receipt of the notice from the Borrower or the Pledgor deliver notice to the
Escrow Agent given in good faith that the payment specified in the Borrower's or
Pledgor notice has not been received, the Escrow Agent shall promptly release
from escrow and deliver to Pledgor the appropriate number of shares of Pledged
Stock. In the event that any adjustment has been made to the number of shares of
Pledged Stock pursuant to Section 6, or should the Pledged Stock be converted
into some other form of Collateral other than the Borrower's Common Stock, the
Escrow Agent shall in the exercise of its reasonable judgment, determine the
number of shares or amount of other Collateral to be released in exchange for
the funds deposited, and such a determination shall be final, conclusive and
binding on the parties hereto.
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(b) Upon receipt by the Escrow Agent of the joint written
instructions of the Pledgor and the Pledgee, the Escrow Agent shall follow the
instructions without any responsibility to determine whether such instructions
comply with the provisions of this Agreement.
(c) As set forth in a final order, decree or judgment of a
court of competent jurisdiction in the United States of America served upon the
Escrow Agent (a "Final Decree"); or
(d) As provided in Section 8 hereof relating to termination
and resignation of the Escrow Agent.
4. Default.
(a) In the event of any default under the Borrower's
obligations under the Note Agreement or Note, which default has not been cured
by the Borrower within the applicably grace period, if any, the Pledgee shall
notify the Escrow Agent in writing, with a copy of such notice to the Pledgor.
On the 180th day following receipt of such notice, the Escrow Agent shall, upon
the delivery by the Pledgee of the Note to the Pledgor, assigning all of the
Pledgee's rights and security interest thereunder to the Pledgor, deliver the
Collateral then held by the Escrow Agent to the Pledgee, who shall be entitled
to exercise all rights and remedies of a secured party under the Uniform
Commercial Code of New York with respect to the Collateral, whereupon this
Escrow Agreement and the Escrow Agent's obligations hereunder shall terminate.
(b) Notwithstanding the foregoing, in the event the Escrow
Agent shall receive written notice from the Pledgor, given in good faith, that
the Borrower is not in default under the Note Agreement or the Note, which
notice must be received by the Escrow Agent on or before the tenth (10th) day
following the date on which the Escrow Agent received Pledgee's notice of
default, the Escrow Agent shall take no action with respect to the Pledged Stock
or other Collateral it is holding hereunder unless and until it has received an
order of a court of competent jurisdiction directing its disposition of such
Pledged Stock and other Collateral or written direction duly executed by the
Pledgor and Pledgee.
(c) The release of Pledged Stock from escrow pursuant to
Section 3(a), shall be permitted during any 180 day period pursuant to Section
4(a) above.
5. Dividends and Voting Rights.
(a) All dividends and other distributions (whether in
securities, cash or
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otherwise) with respect to any of the Pledged Stock shall be subject to the
pledge hereunder and become part of the Collateral. All dividends shall be
promptly delivered to the Escrow Agent (together, if the Pledgee shall request,
with stock powers or instruments of assignment duly executed in blank affixed to
any capital stock or other negotiable document or instrument so distributed) to
be held, released or disposed of by it hereunder.
(b) Unless and until the Collateral is delivered to the
Pledgee in accordance with Paragraph 4(a) of this Agreement, the registration of
the Collateral in the name of Pledgor shall not be changed and the Pledgor shall
retain and be entitled to exercise all voting and other consensual rights and
powers pertaining to the Collateral for all purposes not inconsistent with the
terms hereof.
(c) Upon delivery of the Collateral to Pledgee pursuant to
Paragraph 4(a) of this Agreement, at the option of the Pledgee, all rights of
the Pledgor to exercise the voting or consensual rights and powers which it is
authorized to exercise pursuant to subsection (b) above shall cease and the
Pledgee may thereupon (but shall not be obligated to), at its request, cause
such Collateral to be registered in the name of the Pledgee or its nominee or
agent and exercise such voting or consensual rights and powers as appertain to
ownership of such Collateral. The Pledgor hereby agrees to provide Pledgor such
further documents as the Pledgee may reasonably request to effectuate such
registration and transfer of the Collateral; provided, however, that the Pledgee
in its discretion may from time to time refrain from exercising, and shall not
be obligated to exercise, any such voting or consensual rights or such proxy.
6. Adjustments of Capital Stock; Warrants and Options.
(a) In the event that during the term of this Agreement any
stock dividend, reclassification, readjustment or other change is declared or
made in the capital structure of the Borrower or if new, substituted and
additional shares or other securities are issued to Pledgor by reason of any
such change or acquisition against, in substitution for or in addition to the
Common Stock pledged hereunder, such distributions shall be delivered by the
Pledgor to the Escrow Agent or the Pledgee, as the case may be and shall be
deemed to be part of the "Collateral" under the terms of this Agreement in the
same manner as the shares of stock originally pledged hereunder.
(b) In the event that during the term of this Agreement
subscription warrants or other rights or options shall be issued in connection
with the Collateral, all such stock warrants, rights and options shall forthwith
be assigned and transferred to the Escrow Agent or to the Pledgee, as the case
may be, by the Pledgor, and said stock warrants, rights and options shall be,
and, if exercised by the Pledgor, pledged by the Pledgor to the Pledgee to be
held as, and shall be deemed to be part of, the Collateral under the terms of
this Agreement in the same manner as the shares of Pledged Stock originally
pledged hereunder.
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7. Termination of Escrow. This Agreement may be terminated at any time
by and upon (i) payment in full of the Note by the Borrower; (ii) an order or
decree of a court of competent jurisdiction and (iii) the receipt by the Escrow
Agent of written notice of termination executed by the Pledgor and the Pledgee,
directing the distribution of all the Collateral then held by the Escrow Agent.
In the event that a dispute arises in connection with the release of the
Collateral, the Escrow Agent shall have the sole and absolute right to resign in
accordance with the provisions of Section 8(b) hereof. In addition, this
Agreement shall automatically terminate if and when all the Collateral shall
have been distributed by the Escrow Agent in accordance with the terms of this
Agreement.
8. The Escrow Agent.
(a) Obligations.
(i) The obligations of the Escrow Agent are those
specifically provided in this Agreement and no other, and the Escrow
Agent shall have no liability under, and no duty to inquire into the
terms and provisions, of any agreement between the parties hereto. The
Escrow Agent is acting hereunder as an accommodation to the parties
hereto. The duties of the Escrow Agent are purely ministerial in
nature, and it shall not incur any liability whatsoever, except for
willful misconduct or gross negligence. The Escrow Agent may consult
with counsel of its choice (which may be a member of its own firm), and
shall by fully protected and not be liable for following the advice of
such counsel.
(ii) The Escrow Agent shall not have any
responsibility for the genuineness or validity of any document or other
item deposited with it or of any signature thereon or for the identity,
authority or right of any person executing or depositing the same and
shall not have any liability for acting in accordance with any written
instructions or certificates given to it hereunder signed by the proper
parties.
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(b) Resignation and Removal. The Escrow Agent may resign and
be discharged from its duties hereunder at any time by giving at least thirty
(30) days' prior written notice of such resignation to the Pledgor and the
Pledgee and specifying a date upon which such resignation shall take effect.
Upon receipt of such notice, a successor escrow agent shall jointly be appointed
by the Pledgee and the Pledgor, such successor escrow agent to become the Escrow
Agent hereunder on the resignation date specified in such notice. If no
successor Escrow Agent is appointed prior to the date specified, the Escrow
Agent shall have the right at any time to deposit the Collateral with a court of
competent jurisdiction and the Escrow Agent shall have no further obligation
with respect thereto or pursuant to this Agreement. The Pledgee and the Pledgor,
acting jointly, may at any time substitute a new escrow agent by giving ten (10)
days' notice thereof to the Escrow Agent then acting and paying all fees and
expenses of such Escrow Agent.
(c) Indemnification. The Pledgor and the Pledgee shall jointly
and severally, hold the Escrow Agent harmless from and against and indemnify the
Escrow Agent for any loss, liability, expense (including reasonable attorneys'
fees and expenses either paid to retained attorneys or amounts representing the
fair value of legal services rendered to itself), claim or demand arising out of
or in connection with the performance of its obligations in accordance with the
provisions of this Agreement, except for any of the foregoing arising out of the
gross negligence or willful misconduct of the Escrow Agent. The foregoing
indemnities in this Section 8(c) shall survive the resignation or substitution
of the Escrow Agent and the termination of this Agreement.
(d) Fees and Expenses of the Escrow Agent. The Escrow Agent
shall receive its usual and customary fees for its services rendered pursuant to
this Agreement. The Escrow Agent shall be promptly paid and/or reimbursed out of
the Escrow Fund or, if the Escrow Fund shall be insufficient, jointly and
severally by the Pledgee and Pledgor, for reasonable fees and expenses incurred
by the Escrow Agent in the performance of services pursuant to this Agreement
including, but not limited to legal fees, including all fees and expenses
incurred in connection with its resignation pursuant to Section 8(b).
(e) Waiver of Conflicts. The parties hereto hereby expressly
agree, acknowledge and consent that the Escrow Agent has served as legal counsel
for the Borrower and the Pledgor and shall be permitted to provide legal counsel
to any and all parties to this Agreement, in the future, notwithstanding the
agreements set forth herein including, without limitation, any controversy or
dispute arising out of this Agreement and waive any claims of conflict of
interest relating thereto.
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9. Disputes.
(a) If any dispute should arise with respect to the payment
and/or ownership or right of possession of the Collateral, or should the Escrow
Agent, in its sole judgement, receive conflicting instructions from the Pledgor
and the Pledgee (other than as contemplated in Section 4(b) hereof), the Escrow
Agent is authorized and directed to retain in its possession, without liability
to anyone, all or any portion of the Collateral until such dispute shall have
been settled either by agreement of the parties concerned by delivery of written
directions signed by the Pledgor and Pledgee to the Escrow Agent or by a final
decree of a court of competent jurisdiction served upon the Escrow Agent, but
the Escrow Agent shall be under no duty whatsoever to institute or defend any
such proceedings.
(b) The Pledgor and the Pledgee shall each bear all of their
own fees and expenses incurred by them in resolving any dispute arising under
this Agreement. Any costs incurred by the Escrow Agent in connection with any
dispute arising under this Agreement may be deducted by the Escrow Agent
directly from the Collateral. If the Collateral shall be inadequate to cover
such fees and expenses, Pledgor and the Pledgee shall jointly and severally
reimburse the Escrow Agent for any costs incurred in the performance of its
duties hereunder.
10. Notices. All notices or other communications which are required or
permitted to be given hereunder shall be in writing and shall personally be
delivered, sent by certified mail, return receipt requested, or sent by a
nationally-recognized overnight courier, to the other parties as follows:
(a) To the Pledgee:
Byron Preiss
c/o Byron Preiss Multimedia Company, Inc.
24 West 25th Street
New York, New York 10010
with a copy to:
Kane Kessler, P.C.
1350 Avenue of the Americas, 26th Floor
New York, New York 10019
Telecopy: (212) 245-3009
Attn: Robert L. Lawrence, Esq.
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(b) To the Pledgor:
Securities Management, Inc.
54 Brook Mews
Mayfair, London W1Y 1LE
England
with a copy to:
Baratta & Goldstein
597 Fifth Avenue
New York, New York 10017
Attn: Joseph P. Baratta, Esq.
(c) To the Escrow Agent:
If to the Escrow Agent, to:
Kane Kessler, P.C.
1350 Avenue of the Americas
New York, New York 10019
Attention: Robert L. Lawrence, Esq.
Telecopier: (212) 245-3009
or to such other addresses as the party to whom notice is to be given may have
furnished to the other parties in writing. Any such communication shall be
deemed to have been given when (i) delivered, if personally delivered, (ii) 3
days after the mailing, if sent by mail, and (iii) on the business day after
dispatch, if sent by nationally-recognized overnight courier.
11. Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
12. Governing Law and Jurisdiction. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York without
giving effect to the principles of conflicts of laws thereunder. This Agreement
shall be subject to the exclusive jurisdiction of the courts located in New York
County, New York. The parties to this Agreement agree that any breach of any
term or condition of this Agreement shall be deemed to be a breach occurring in
the State of New York by virtue of a failure to perform an act required to be
performed in the State of New York and the parties irrevocably and expressly
agree to submit to the jurisdiction of the courts of the State of New York for
the purpose of resolving any disputes
8
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among the parties relating to this Agreement or the transactions contemplated
hereby. The parties hereto irrevocably waive, to the fullest extent permitted by
law, any objection which they may now or hereafter have to the laying of venue
of any suit, action or proceeding arising out of or relating to this Agreement,
or any judgment entered by any court in respect hereof brought in New York
County, New York, and further irrevocable waive any claim that any suit, action
or proceeding brought in New York County, New York has been brought in an
inconvenient forum.
13. Assignment. The undersigned acknowledges that the Pledgee may
assign, transfer or sell all or a portion of its rights and interests to and
under the Note to one or more Persons as provided in the Note Agreement and that
such persons shall thereupon become vested with all of the rights and benefits
of the Pledgee in respect hereof as to all or that portion of the Note which is
so assigned, transferred or sold.
14. Modification. This Agreement shall not be altered or otherwise
amended, except pursuant to an instrument in writing signed by each of the
parties hereto.
15. Descriptive Headings. The descriptive headings in this Agreement
are for convenience only and shall not control or affect the meaning or
constructing of any provision of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered on the date first above written.
/s/ Byron Preiss
---------------------------
Byron Preiss
SECURITIES MANAGEMENT, INC.
By: /s/ Securities Management, Inc.
--------------------------------
Name: Securities Management, Inc.
Title:
KANE KESSLER, P.C., as escrow agent
By: /s/ Kane Kessler, P.C.
------------------------
Name: Kane Kessler, P.C.
Title:
