THE SECURITY REPRESENTED BY THIS NOTE WAS ORIGINALLY ISSUED ON MARCH 14, 1997,
AND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR
UNDER ANY STATE SECURITIES LAWS. THIS SECURITY MAY NOT BE RESOLD OR TRANSFERRED
UNLESS REGISTERED OR EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND ALL APPLICABLE STATE SECURITIES LAWS.
THIS NOTE IS SUBJECT TO THE TERMS AND CONDITIONS CONTAINED IN THAT CERTAIN
CREDIT AGREEMENT, DATED AS OF DECEMBER 20, 1996, AS AMENDED, MODIFIED OR
RESTATED FROM TIME TO TIME, AMONG THE BORROWERS NAMED THEREIN AND THE LENDERS
NAMED THEREIN.
THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT, AND AS REQUIRED BY
TREASURY REGULATION Section 1.1275-3(B)(1), INFORMATION REGARDING THE ISSUE
PRICE, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, THE ISSUE DATE AND THE YIELD TO
MATURITY MAY BE OBTAINED FROM THE BORROWERS.
SKYLINE MULTIMEDIA ENTERTAINMENT, INC.
NEW YORK SKYLINE, INC.
SKYLINE VIRTUAL REALITY, INC.
SKYLINE CHICAGO, INC.
SKYLINE MAGIC, INC.
SKYLINE LAS VEGAS, INC.
SENIOR PROMISSORY NOTE
March 14, 1997 $450,000
New York, New York No. 5
FOR VALUE RECEIVED, SKYLINE MULTIMEDIA ENTERTAINMENT, INC., a
New York corporation ("SMEI"), NEW YORK SKYLINE, INC., a New York corporation
("NYSI"), SKYLINE VIRTUAL REALITY, INC., a Delaware corporation ("SVRI"),
SKYLINE CHICAGO, INC., a Delaware corporation ("SCI"), SKYLINE MAGIC, INC., a
Delaware corporation ("SMI"), SKYLINE LAS VEGAS, INC., a Delaware corporation
("SLVI") (SMEI, NYSI, SVRI, SCI, SMI and SLVI, each a "Borrower" and, jointly
and severally, the "Borrowers"), each hereby jointly and severally promises to
pay Prospect Street NYC Co-Investment Fund, L.P., a Delaware limited
partnership, and its registered assigns (the "Registered Holder") the unpaid
principal amount of each Loan made by the Registered Holder to each such
Borrower (as indicated on the schedule attached hereto) together with interest
and premiums thereon calculated from the date hereof in accordance with the
provisions of this Note.
This Note was issued pursuant to a Senior Credit Agreement,
dated as of December 20, 1996 (as amended, modified or restated from time to
time, the "Credit Agreement"), among the Borrowers and the Lenders, and this
Note is one of the "Senior Notes" referred to in the Credit Agreement. The
Credit Agreement contains terms governing the rights of the holder of this Note,
and all provisions of the Credit Agreement are hereby incorporated herein in
full by reference. Unless otherwise indicated herein, capitalized terms used in
this Note have the same meanings as set forth in the Credit Agreement.
1. Interest. Interest will accrue on the unpaid principal
amount of this Note from the date hereof at a rate of 14% per annum. Interest
accrued on this Note shall be payable on December 20, 2001 (the "Final Maturity
Date"). Upon the occurrence and during the continuance of an Event of Default,
interest will accrue on the unpaid principal amount of this Note, all unpaid
interest on this Note and all other amounts payable hereunder, to the extent
permitted by applicable law, at 21% per annum.
2. Method of Payment. Each Borrower shall pay principal,
interest and all other amounts payable on this Note with respect to any Loan
made by the Registered Holder to such Borrower in money of the United States
that at the time of payment is legal tender for payment of public and private
debts. Each Borrower shall pay principal and interest on this Note with respect
to any Loan made by the Registered Holder to each Borrower by wire transfer of
immediately available funds. All payments shall be applied first, to all accrued
and unpaid interest hereon, second, to unpaid premiums, if any, and third, to
principal.
3. Prepayment. The Borrowers may, at any time and from time to
time, prepay all or any portion of the principal amount of this Note in cash.
Written notice of prepayment under this Section 3 shall be given at least 30
days but not more than 60 days before the prepayment date set forth in such
notice to the Registered Holder at the address provided in or pursuant to
Section 9. Any such prepayment shall be in an amount of at least $250,000 and in
integrals of $50,000, or such lesser amount as equals the then outstanding
principal amount of this Note being prepaid, and shall be accompanied by the
cash payment of all accrued and unpaid interest on the portion of the principal
then being prepaid plus a premium equal to the applicable percentage of the
principal amount being prepaid, determined as follows:
During the 12-Month Period
Beginning December 20 Applicable Percentage
1996 5%
1997 4%
1998 3%
1999 2%
2000 1%
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Once due notice of prepayment is given, the principal amount of this Note (or
applicable portion thereof) shall become due and payable on the optional
prepayment date set forth in the written notice to the Registered Holder.
4. Repayment. Each Borrower will repay this Note (with respect
to any Loan made by the Registered Holder to such Borrower) in full, in cash on
the Final Maturity Date at 100% of the outstanding principal amount of this Note
plus accrued but unpaid interest thereon to such date.
5. Events of Default; Remedies. Events of Default and the
consequences of Events of Default are set forth in Article VIII of the Credit
Agreement. All provisions of Article VIII of the Credit Agreement are
specifically hereby incorporated herein in full by this reference.
6. Note Exchangeable for Different Denominations. This Note is
exchangeable, upon the surrender hereof by the Registered Holder at the
principal office of SMEI, without expense to the Registered Holder, for a Note
or Notes, dated as of the date to which interest has been paid on the unpaid
principal amount of the Note or Notes so exchanged, or, if no interest has been
paid thereon, then dated as of the date of the Note or Notes so exchanged, each
in the principal amount $1,000 or any multiple thereof, for the same aggregate
unpaid principal amount as the Note or Notes so surrendered for exchange and
each payable to such Person or Persons, or order, as may be designated by such
Registered Holder; provided, however, that upon any such exchange there shall be
filed with the Borrowers the name and address for all purposes hereof of the
payee of each Note delivered in exchange for this Note and such exchanged Note
shall in all other respects be in the same form and have the same terms as this
Note.
7. Replacement. Upon receipt of evidence reasonable
satisfactory to the Borrowers (an affidavit of the Registered Holder shall be
satisfactory) of the ownership and the loss, theft, destruction or mutilation of
this Note, and in the case of any such loss, theft or destruction, upon receipt
of indemnity reasonably satisfactory to the Borrowers (provided that if the
Registered Holder is a financial institution or other institutional investor its
own agreement shall be satisfactory) or, in the case of any such mutilation upon
surrender of this Note, the Borrowers shall (at their expense) execute and
deliver in lieu of such Note, a Note of like kind representing the same rights
represented by such lost, stolen, destroyed or mutilated Note and dated as of
the date to which interest has been paid on the unpaid principal amount of the
Note so lost, stolen, destroyed or mutilated, or, if no interest has been paid
thereon, then dated as of the date of the Note so lost, stolen, destroyed or
mutilated.
8. Place of Payment. Payments of principal and cash interest
and other amounts payable hereunder are to be delivered at the following
address:
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Xxxxxxxx Xxxxxx NYC Co-Investment Fund, L.P.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
or to such other address or to the attention of such other Person as specified
by prior written notice to the Borrowers.
9. Headings; Governing Law. The headings used in this Note
are for convenience of reference only and do not define or limit the provisions
hereof. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
DOMESTIC LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OF
LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK OR
ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY
JURISDICTION OTHER THAN THE STATE OF NEW YORK.
10. Note Register. Each Borrower shall maintain at its
principal executive offices books for the registration and the registration of
transfer of this Note. Each Borrower may deem and treat the Registered Holder as
the absolute owner hereof (notwithstanding any notation of ownership or other
writing thereon made by anyone) for all purposes and shall not be affected by
any notice to the contrary.
11. Usury Laws. It is the intention of the Borrowers and the
holder(s) of this Note to conform strictly to all applicable usury laws now or
hereafter in force, and any interest payable under this Note shall be subject to
reduction to the amount not in excess of the maximum legal amount allowed under
the applicable usury laws as now or hereafter construed by the courts having
jurisdiction over such matters. If the maturity of this Note is accelerated by
reason of an election by the holder hereof resulting from an Event of Default,
voluntary prepayment by the Borrowers or otherwise, then earned interest may
never include more than the maximum amount permitted by law, computed from the
date hereof until payment, and any interest in excess of the maximum amount
permitted by law shall be canceled automatically and, if theretofore paid, shall
at the option of the holders hereof either be rebated to the Borrowers or
credited on the principal amount of this Note, or if this Note has been paid,
then the excess shall be rebated to the Borrowers. The aggregate of all interest
(whether designated as interest, service charges, points or otherwise)
contracted for, chargeable, or receivable under this Note shall under no
circumstances exceed the maximum legal rate upon the unpaid principal balance of
this Note remaining unpaid from time to time. If such interest does exceed the
maximum legal rate, it shall be deemed a mistake and such excess shall be
canceled automatically and, if theretofore paid, rebated to the Borrowers or
credited on the principal amount of this Note, or if this Note has been repaid,
then such excess shall be rebated to the Borrowers.
12. Certain Waivers. Each of the Borrowers hereby waives
diligence, presentment, protest and demand and notice of protest and demand,
dishonor and nonpayment of this Note, and expressly agrees that this Note, or
any payment hereunder, may be extended from
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time to time and that the holder hereof may accept security for this Note or
release security for this Note, all without in any way affecting the liability
of the Borrowers hereunder.
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IN WITNESS WHEREOF, each Borrower has executed and delivered
this Note as of the date first above written.
SKYLINE MULTIMEDIA
ENTERTAINMENT, INC.
By:____________________________
Name:
Title:
NEW YORK SKYLINE, INC.
By:____________________________
Name:
Title:
SKYLINE VIRTUAL REALITY, INC.
By:____________________________
Name:
Title:
SKYLINE CHICAGO, INC.
By:____________________________
Name:
Title:
SKYLINE MAGIC, INC.
By:____________________________
Name:
Title:
SKYLINE LAS VEGAS, INC.
By:____________________________
Name:
Title:
BORROWER PRINCIPAL AMOUNT
Skyline Multimedia Entertainment, Inc.
New York Skyline, Inc.
Skyline Virtual Reality Inc.
Skyline Chicago, Inc.
Skyline Magic, Inc.
Skyline Las Vegas, Inc.
