THE SECURITY REPRESENTED BY THIS NOTE WAS ORIGINALLY ISSUED ON DECEMBER 20,
1996, 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 ss.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
December 20, 1996 $1,500,000
New York, New York No. 1
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 Discovery 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%
2
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:
0
Xxxxxxxx Xxxxxx NYC Discovery Fund, L.P.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 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 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.
4
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:
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BORROWER PRINCIPAL AMOUNT
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Skyline Multimedia Entertainment, Inc.
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New York Skyline, Inc.
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Skyline Virtual Reality Inc.
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Skyline Chicago, Inc.
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Skyline Magic, Inc.
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Skyline Las Vegas, Inc.
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