SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
December 30, 1999
(Date of report)
Skyline Multimedia Entertainment, Inc.
(Exact Name of Registrant as Specified in Charter)
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New York 0-23396 11-3182335
(State of Incorporation) (Commission File Number) (IRS Employer I.D. No.)
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350 Fifth Avenue, New York, New York, 10118
(Address of principle executive offices)
(212) 564-2224
(Registrant's telephone number, including area code)
Item 5. Other Events.
On or about December 30, 1999, the Company entered into a
settlement agreement with the Empire State Building Company ("ESBCo"), in
connection with a lawsuit originally filed by the Company against ESBCo and
other named defendants in the Supreme Court of the State of New York, County of
New York, on December 23, 1997. The Company's action primarily sought injunctive
relief to prohibit ESBCo from, among other things, terminating the Company's
Lease and a License agreement relating to the New York Skyride, as well as
monetary damages from ESBCo and the other defendants. The basis for the
Company's claims was, among other things, a lack of cooperation from ESBCo and
its staff, in violation of the Lease and License agreements, as well as bad
faith, fraud and self-dealing by ESBCo and certain members of its management
staff.
The settlement between the Company and ESBCo provides for, among other
things, the following:
1) The Company and each named Defendant will enter into and
execute a Stipulation of Discontinuance dismissing each cause
of action, cross-claim and counterclaim asserted in the
lawsuit. The Stipulation of Discontinuance will be filed with
the Clerk of the Court. In the event that not all of the named
defendants execute the stipulation by January 29, 2000, ESBCo
and the Company will make a motion to the court seeking
dismissal of the Company's action against each party that has
executed the stipulation.
2) The Company and each defendant to exchange releases regarding
their respective claims in the lawsuit. All such releases have
been exchanged with the exception of three of the named
Defendants. In the event that the Company does not receive
releases for the above Defendants, the Company will not
provide those three Defendants with releases.
3) The Company to surrender 35,000 square feet of space at 350
Fifth Avenue, New York, New York 10118, which the Company had
previously intended to use for expansion, and ESBCo is to
refund the Company's $100,000 security deposit on the space,
in addition to any interest accrued on the security deposit.
4) The Company and ESBCo to modify their license agreement to
provide for, among other things:
(i) a contingent license fee based upon various increases
in the Company's ticket sales;
(ii) the installation of electronic ticket vending
machines for sale of New York Skyride tickets,
Observatory tickets and Skyride / Observatory
combination tickets at various locations throughout
the Empire State Building;
(iii) a guarantee that the Company will receive ESBCo's
lowest wholesale rates for any observatory tickets
purchased by the Company from ESBCo; and
(iv) a minimum of fifteen (15) days notice must be given
before either party can exercise the limited
termination provision of the License Agreement.
5) The Company and ESBCo will modify the Lease agreements for the
space utilized by the Skyride at 350 Fifth Avenue, to provide
that any rent escalation will be governed by and adjusted
semi-annually proportionately with the increase in the
Consumer Price Index, published by the Bureau of Labor
Statistics of the U.S. Department of Labor.
6) ESBCo to grant the Company an option, which is to be executed
on or before April 30, 2000, to extend its lease of 4,400
square feet of space used as executive offices at 350 Fifth
Avenue, New York, New York, 10118, pursuant to the existing
lease agreement dated April 14, 1994. The Company must inform
ESBCo of its decision to extend the lease by March 31, 2000.
7) The Company and ESBCo to pay their own costs and attorneys'
fees associated with the action.
In addition to the settlement terms described, as a result of the
settlement, the Company will be reimbursed $150,000, which it had posted with
the Court as a condition of the Court's grant of a Yellowstone injunction in the
case on May 18, 1999.
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SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the Undersigned, thereunto duly authorized.
Skyline Multimedia Entertainment, Inc.
(Registrant)
/s/ Robert Brenner
By: Robert Brenner
President & Chief Executive Officer
INDEX TO EXHIBITS
Exhibit
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Number Description
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10.59 Settlement Agreement, dated December 30, 1999, between New York Skyline, Inc. and Empire State Building Company
10.60 Surrender Agreement, dated December 30, 1999, between Empire State Building Company and New York Skyline, Inc.
10.61 Third Amendment of Lease, dated December 30, 1999, between Empire State Building Company and New York Skyline,
Inc.
10.62 Second Modification of License Agreement, dated December 30, 1999, between Empire
State Building Company and New York Skyline, Inc.
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