PROMISSORY NOTE
$1,951,623.17 December 16, 1996
For value received, the undersigned, Chelsea Piers L.P., a New York limited
partnership having its principal place of business at Chelsea Piers - Pier 00,
Xxxxx 000, Xxx Xxxx, Xxx Xxxx 00000 (hereinafter referred to as "Maker"), hereby
promises to pay to the order of Xxxxxx X. Xxxxx and Xxx X. Xxxxxxxxx
(hereinafter collectively referred to as "Holder"), at Chelsea Piers - Pier 00,
Xxxxx 000, Xxx Xxxx, Xxx Xxxx 00000, or at such other address as Holder may
designate from time to time in a notice given to Maker, the principal amount of
One Million Nine Hundred Fifty-One Thousand Six Hundred Twenty-Three Dollars and
Seventeen Cents ($1,951,623.17) representing an amount loaned by Holder to Maker
in respect of capital expenditures undertaken by Maker during 1996 at Chelsea
Piers and financed by Maker through working capital, together with interest on
the unpaid principal balance thereof at the rate hereinafter provided, all of
which payments shall be paid in lawful money of the United States of America
which shall be legal tender for the payment of all debts, public or private, at
the time of payment, and shall be due and payable as follows:
A. During the period commencing on the date of this Note first above
written and continuing through and including the fifth anniversary of
the date first above written ("the Maturity Date"), interest shall
accrue on the outstanding principal balance of this Note at a rate per
annum which is equal to 12.5%, compounded quarterly ("Interest Rate").
B. All accrued and unpaid interest shall be due and payable, in arrears,
commencing on April 1, 1997 and on each January 1, April 1, July 1 and
October 1 thereafter (each, an "Interest Payment Date"), through and
including the Maturity Date; provided, however, that Maker may by
notice given to Holder elect to defer its interest payment obligations
hereunder for any calendar quarter without premium or penalty and
interest shall continue to accrue on the Note at the Interest Rate.
C. Maker may prepay the principal amount of this Note, in whole or in
part, at any time without premium or penalty; provided, however, Maker
shall in no event make a principal payment in respect of this Note in
an amount in excess of two million dollars in any calendar year if at
the time of such payment the Indentures (as hereinafter defined) remain
in full force and effect.
D. On the Maturity Date, an amount equal to any remaining principal
balance of this Note plus any accrued and unpaid interest, shall be due
and payable; provided, however, Maker may by notice given to Holder
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elect to extend the Maturity Date of the Note as to all or any portion
of such principal balance for such period of time as it shall elect
without premium or penalty. Any such extension of the final maturity
date of the Note shall thereafter be deemed the "Maturity Date" for
purposes of this Note. If the Maturity Date shall occur at a time when
the Indentures (as hereinafter defined) remain in effect, Maker shall
be deemed to have elected to extend to the first day of the following
calendar year the Maturity Date as to that portion of the remaining
principal balance as is necessary so that no more than two million
dollars of the principal amount hereof is due in any calendar year.
All amounts paid or payable to Holder shall be paid 50% to Xxxxxx X. Xxxxx
and 50% to Xxx X. Xxxxxxxxx. All amounts received by Holder with respect to this
Note are to be applied first to any accrued and unpaid interest on the principal
balance of this Note, then toward any amounts (other than principal and
interest) due pursuant to this Note, and then to the outstanding principal
balance of this Note. Interest shall be computed based on the actual number of
days elapsed in a 365-day year. If any payment required hereunder becomes due
and payable on a Saturday, Sunday or legal holiday or a day on which banking
institutions are authorized to close in New York State, the due date of such
payment shall be extended to the next succeeding business day and, during such
extension, interest shall continue to accrue and shall be payable at the rate
per annum specified in Paragraph A above. "Indentures" as used herein shall mean
the (i) the Indenture, dated as of June 27, 1994, between Maker and The Bank of
New York relating to the 12.5% A Discount First Mortgage Notes Due 2004, and
(ii) the Indenture, dated as of June 27, 1994, between Maker and The Bank of New
York relating to the 11% B Discount First Mortgage Notes Due 2009.
The failure of Maker to pay any installment of principal or interest or any
other amount required by this Note, which failure remains uncured for more than
10 working days after the receipt by Maker of notice from Holder of such
nonpayment, shall constitute a "Note Event of Default."
Holder shall be entitled during the pendency of a Note Event of Default, by
notice to Maker, to declare the entire unpaid principal amount of this Note, and
all accrued and unpaid interest thereon immediately due and payable. Presentment
for payment, demand, protest and further notice of any kind, are all hereby
expressly waived by Maker. Forbearance by Holder in exercising its right to
accelerate the maturity of this Note shall not constitute a waiver of Holder's
right to do so at any time with respect to any subsequent Note Event of Default.
No cure by Maker shall limit or restrict the rights or remedies of Holder as to
subsequent Note Events of Default.
This Note is a full recourse Note, provided that in no event shall any
general or limited partner of Maker have any liability to Holder hereunder. To
secure this Note and the obligations of Maker to Holder hereunder, Maker hereby
grants to Xxxxxx a second priority lien and security interest in all rights,
title and interest of Maker in and to Maker's now owned or hereafter acquired,
created or arising accounts, inventory, equipment, general tangibles, chattel
paper, instruments, documents, deposit accounts, monies, assets, personal
property and all additions or substitutions thereof and cash and non-cash
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proceeds of the foregoing ("Collateral"), subject and subordinate in all
respects to the security interest granted to the Trustee under the Collateral
Documents. In no event shall the security interest granted hereunder be deemed
to extend to any property that constitutes real property under applicable law.
From and after, and during the continuance of, a Note Event of Default,
Holder shall be entitled to exercise all of the rights and remedies of a secured
party available under the Uniform Commercial Code of the State of New York for
the protection and enforcement of its rights in respect of the Collateral.
Anything to the contrary herein notwithstanding, the terms of this Note
shall be construed and applied so as to be consistent with, and not to result in
a default by the Maker under, the terms and conditions of the Indentures and the
Collateral Documents (defined herein as such term is defined in the Indentures).
In the event of any conflict between the terms hereof and the terms of the
Indentures or the Collateral Documents, the terms hereof shall be deemed to have
been reformed so as to eliminate any such conflict.
Notwithstanding any provision to the contrary contained in this Note, the
total obligation for payments which are legally regarded as interest shall not
exceed the maximum limits imposed by applicable state and federal laws in effect
on the date hereof.
Maker waives all notices, demands for payment, presentment for payment,
notice of dishonor, notice of protest, protest, and diligence in collection as
to this Note and as to each, every and all installments hereof, and agrees that
the granting to Maker of any extension or extensions of time for the payment of
any sum or sums due pursuant to this Note shall not in any way release or affect
the liability of Maker. Maker shall pay Holder all sums which are payable
pursuant to the terms of this Note without setoff, recoupment or deduction of
any kind or for any reason whatsoever.
No provision of this Note may be waived, changed, modified, amended or
discharged orally; only a written agreement which is signed by the party against
whom enforcement of any waiver, change, modification, amendment or discharge is
sought shall be effective.
This Note shall be governed by, and construed and enforced in accordance
with, the laws of the State of New York.
This Note may not be assigned to any person or entity by Holder without the
express prior written consent of Maker.
Whenever used in this Note, the term "Maker" shall refer to the Maker named
in this Note, its legal representatives, successors and assigns. Whenever used
in this Note, the term "Holder" shall refer to the Holder named in this Note and
their legal representatives, successors and permitted assigns. The pronouns used
in this Note shall include, when appropriate, either gender and both singular
and plural.
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Any notice required or permitted to be given by this Note shall be given in
writing and be effective and shall be deemed received three days after its
deposit, postage prepaid and registered or certified with return receipt
requested, in the United States mail, addressed to Maker or Holder at the
address set forth above, or upon its delivery and receipt by hand at the address
set forth above, or to such other address as each party may designate for itself
by notice given in accordance with this paragraph.
IN WITNESS WHEREOF, Maker has executed this Note by its duly authorized
representative on the day and year first above written.
MAKER:
XXXXXXX PIERS L.P.
By: Xxxxxxx Xxxxx Management Inc.,
as General Partner
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
Title: Chairman
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