PROMISSORY NOTE
Phoenix, Arizona
$499,859.15 September 7, 1994
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FOR VALUE RECEIVED, LOS ABRIGADOS PARTNERS LIMITED PARTNERSHIP, an
Arizona Limited Partnership (the "Undersigned" or the "Borrower"), promises to
pay in lawful monies of the United States of America, to the order of TAMMAC
FINANCIAL CORP., having its principal office located at 100 Commerce Boulevard,
Wilkes-Barre, PA 18702 (hereinafter referred to as the "Lender") or at such
place as Lender may from time to time designate in writing, the principal sum of
Four hundred ninety-nine thousand eight hundred fifty-nine and 15/100
($499,859.15) DOLLARS (the "Loan"), together with interest as hereinafter
provided, computed from the date hereof, in accordance with the terms of a
certain Loan and Security Agreement between the undersigned and the Lender
executed contemporaneously herewith (the "Loan Agreement"), and in the following
manner and upon the following terms and conditions:
Payment of Loan.
(a) The unpaid principal, the accrued interest and all costs and
expenses relating to the Loan shall be payable on September 1, 1998, unless
sooner demanded in accordance with the terms and provisions set forth herein and
in the Loan Agreement.
(b) Commencing on the first day of October, 1994, and on the same day
of each successive month thereafter through and including September 1, 1995, the
Borrower shall pay to Lender a minimum payment each month in the amount of
$14,406.00. Thereafter, commencing on the first day of October, 1995, and on the
same day of each successive month thereafter through and including September 1,
1998, the Borrower shall pay to Lender a minimum payment each month of
$6,280.00. The aforesaid payment shall be made payable out of the monthly
collections received under the Acceptable Contracts (as that term is defined in
the Loan Agreement). In the event the monthly collections from the Acceptable
Contracts are insufficient to pay the aforesaid minimum payment, the Borrower
shall pay the interest and/or principal insufficiency on the first of each month
as aforesaid.
(c) The Borrower shall direct or otherwise cause all Consumers (as that
term is defined in the Loan Agreement) under the Acceptable Contracts to pay all
monies due thereunder to the Agent (as that term is defined in the Loan
Agreement) or as otherwise advised by Lender in writing. The Borrower, to the
extent that it receives such payments directly from or on behalf of such
Consumers, shall hold the same (in the form so received) in trust for the sole
and exclusive benefit of Lender and immediately deliver same to Lender or Agent.
Monies (in good, collected funds) from Contracts collected and paid to Lender by
the Agent or the Borrower shall be (subject to the payment of fees, costs and
expenses as set forth in this Note and the Loan Agreement)apply, on the first
business day of the calendar month following the receipt thereof, first towards
the payment of accrued and unpaid interest on the Loan and then to the payment
of the principal amount then outstanding under the Loan.
(d) For purposes of computing the amount of interest payable on the
Loan, the outstanding principal amount of the Loan shall not be reduced by the
amount of any funds collected by the Agent or the Borrower until such funds are
received by Lender as good, collected funds and applied to the Loan.
Interest Rate. The interest rate which shall be used to
calculate the amount of interest due each month shall be the highest prime rate
as announced, from time to time, in The Wall Street Journal during the month for
which interest is being charged ("Prime Rate"), plus four (4%) percentage points
per annum. Interest shall be calculated on the outstanding principal balance at
the close of each day, on the basis that one day represents 1/360th of a year.
The interest rate may be changed from time to time without notice to the
Borrower and for the purposes of this Note, any such change shall be effective
on the date of the change. Interest shall continue to accrue on the unpaid
principal balance remaining due until all sums due hereunder and under the Loan
Agreement are paid in full. Lender's failure or delay in submitting invoices of
the interest due under the Loan to the Borrower shall not discharge or relieve
the Borrower of its obligation to pay interest on the Loan when due.
Default Interest Rate. Upon the occurrence or during the
continuance of an Event of Default, as defined in the Loan Agreement, the rate
used to calculate the interest due on the Loan may, at the option of Lender,
increase by five (5%) percentage points above the interest rate referred to in
paragraph 2. above (the "Default Rate"). If such increased interest rate exceeds
that which may be collected under applicable law, the Default Rate shall be that
maximum allowable interest rate.
Late Charge. In the event Lender receives a payment of
interest or principal more than fifteen (15) days after its due date, such
payment shall be subject to a late charge of five (5%) percent of such payment
(the "Late Charge"). The Late Charge represents the cost to the Lender in
processing late payments and shall not be deemed to constitute additional
interest.
Collateral. (a) As security for the payment and performance of
the obligations hereunder, the undersigned has, contemporaneously herewith,
granted a security interest to Lender in and to the Collateral more particularly
described in the Loan Agreement.
(b) In addition, as security for the payment and performance of the
obligations hereunder, ILX Incorporated, an Arizona Corporation, has
contemporaneously herewith, executed and delivered to Lender an Amended and
Restated Guaranty Agreement ("Guaranty Agreement").
Application of Payments. All payments of interest and
principal or prepayments of principal, howsoever designated by the undersigned,
are to be applied first on account of interest on the unpaid balance of the
principal indebtedness, and the balance, if any, on account of said principal
indebtedness.
Events of Default; Acceleration of Balance Due. (a) The
Borrower agrees with the Lender that the Borrower shall be bound by and shall
comply with all of the terms, covenants and conditions of the Loan Agreement and
all other Loan Documents, as that term is defined in the Loan Agreement, all of
which shall be construed as one instrument and any Default in any term, covenant
or condition contained in the Loan Agreement and/or any of the other Loan
Documents shall cause this Note to be in default and all money owed by the
Borrower to the Lender by virtue of this Note, the Loan Agreement and/or any of
the other Loan Documents shall be forthwith due and payable. All of the Events
of Default set forth in the Loan Agreement and the other Loan Documents are
herein incorporated by reference as though set forth fully at length.
(b) Upon the occurrence of any Event of Default as described or defined
in the Loan Agreement, and/or any of the other Loan Documents, then, at the
option of the Lender or the holder hereof, the aforesaid principal sum or so
much thereof as shall then remain unpaid, with all arrearage of interest
thereon, and any other sums due hereunder or thereunder shall, without notice or
demand, at the option of the Lender, become and be due and payable immediately
thereafter, anything hereinbefore contained to the contrary notwithstanding. In
addition, the Lender or holder hereof may exercise any and all rights and
remedies available to it under the terms of the Loan Agreement and/or any other
Loan Documents, or at law or in equity.
Principal Prepayments. It is understood and agreed that the
undersigned may prepay in full or in part at any time without penalty or
premium, the principal of this obligation; provided, however, the Borrower shall
notify Lender of each such prepayment. Any such prepayments of principal shall
be applied in the inverse order of their maturity.
Lender's Rights Cumulative. No remedy referred to herein is
intended to be exclusive, but each shall be cumulative and in addition to any
other remedy referred to herein, in the Loan Agreement and/or any of the other
Loan Documents, or other agreements or otherwise available to Lender at law or
in equity. No express or implied waiver by Lender of any Default or Event of
Default hereunder shall in any way be, or be construed to be, a waiver of any
future or subsequent Default or Event of Default. The failure or delay of Lender
in exercising any rights granted it hereunder upon any occurrence of any of the
contingencies set forth herein shall not constitute a waiver of any such rights
upon the continuation or reoccurrence of any such contingencies or similar
contingencies and any single or partial exercise of any particular right by
Lender shall not exhaust the same or constitute a waiver of any other right
provided herein. The Events of Default and remedies thereon are not restrictive
of and shall be in addition to any and all other rights and remedies of Lender
provided for by the Loan Agreement and/or any of the other Loan Documents and
applicable law.
Waiver of Jury Trial. THE BORROWER HEREBY WAIVES ALL RIGHT TO
A TRIAL BY JURY IN ANY LITIGATION RELATING TO THIS NOTE, THE LOAN AGREEMENT
AND/OR ANY OF THE OTHER LOAN DOCUMENTS OR OTHER AGREEMENTS OR INSTRUMENTS
BETWEEN BORROWER AND LENDER. /S/
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Initial
Attorney's Fees, Costs and Charges. The Borrower shall be
liable for all costs, charges and expenses, and other sums incurred or advanced
by Lender (including reasonable legal fees and disbursements) to preserve,
protect or maintain the Collateral securing this Note, collect the sums due
hereunder and/or the other Loan Documents, protect Lender's interests in or
realize on the Collateral or to enforce Lender's rights against the Borrower.
Joint and Several Liability. The liability of the Borrower
shall be joint and several, absolute and unconditional and without regard to the
liability of any other party.
Waivers. The Borrower and all other parties who at any time
may be liable hereon in any capacity, jointly and severally, waive presentment,
demand for payment, protest and notice of protest, and notice of dishonor of
this Note, and authorize Lender, without notice, to grant any extension,
postponement of time of payment, indulgence or any substitution, exchange or
release of Collateral and the addition to or release of any party or persons
primarily or secondarily liable or acceptance of partial payments on any
accounts or instruments and the settlement, compromising or adjustment thereof.
Disclosure of Information. Lender is hereby authorized to
disclose any financial or other information about the Borrower to any regulatory
body or agency having jurisdiction over the Lender, or to any present, future or
prospective participant or successor in interest in any loan or other financial
accommodation made by Lender to the Borrower.
Further Security; Right of Set-off. (a) As further security
for the performance of the obligations hereunder and the other Obligations, as
defined in the Loan Agreement, the Borrower hereby gives Lender a general lien
upon all property and assets heretofore or hereafter delivered to Lender, and
Lender shall have the right of setoff, in addition to any other rights conferred
by statute or operation of law, with respect to any funds or tangible assets
which may, at any time, be in possession of or under Lender's custody and
control.
(b) Lender shall have the right, after the occurrence of an Event of
Default, to immediately without notice or other action, to set-off against the
Borrower or any of the Guarantor's obligations to Lender, any sum owed by the
Lender in any capacity to the Borrower or any Guarantor, whether due or not, or
any property of the Borrower or any Guarantor in the possession of the Lender,
and Lender shall be deemed to have exercised such right of set-off and have made
a charge against any such money or property immediately upon the occurrence of
any Event of Default, even though the actual book entries may be made at times
subsequent thereto.
No Waiver of Rights or Remedies. The Lender shall not by any
act or omission be deemed to have waived any of its rights or remedies hereunder
unless such waiver is in writing and signed by the Lender, and then only to the
extent set forth therein. A waiver as to any one event shall in no way be
construed as continuing or as preventing the exercise of such rights or remedies
by a subsequent event.
Business Purpose. The proceeds of this Note shall be (or have
been) utilized for business purposes and as a result, this loan transaction does
not fall under the regulations set forth in 12 CFR Section 226, et seq.
Balloon Note. IN THE EVENT THAT THERE IS A PRINCIPAL BALANCE
REMAINING DUE AFTER ALL MANDATORY PAYMENTS REQUIRED TO BE MADE UNDER PARAGRAPH 1
ABOVE HAVE BEEN PAID BY BORROWER TO LENDER, THIS NOTE SHALL BE DEEMED TO BE A
BALLOON NOTE REQUIRING PAYMENT IN FULL ON THE DATE OF MATURITY AND THE LENDER
SHALL BE UNDER NO OBLIGATION TO REFINANCE THE AMOUNT DUE AT THAT TIME.
Loan Charges. In the event that the interest charged hereunder
exceeds the legal limit permitted by law, the interest rate shall be
automatically reduced to the permitted limit and any interest charged which
exceeds or exceeded the permitted limit shall, at Lender's option, be treated as
a payment of principal or refunded directly to the Borrower.
Invalidity. In the event any provision of this Note is
determined by competent authority to be prohibited or unenforceable in any
jurisdiction, such provision shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability, without invalidating the
remaining provisions of this Note, and any such prohibition or unenforceability
in any jurisdiction shall not invalidate or render unenforceable any provision
in any other jurisdiction.
Governing Law. The provisions of this Note shall be governed
by the laws of the Commonwealth of Pennsylvania.
Binding Effect. The provisions herein contained shall bind and
inure to the benefit of the Borrower and Lender and their respective legal
representatives, successors and assigns (provided, however, that the Borrower
shall not assign this Note without first obtaining the written consent of
Lender). Lender (or any subsequent assignee) may transfer and assign this Note
and deliver the Collateral securing this Note to any assignee, who shall
thereupon have all of the rights of Lender; and Lender (or any such subsequent
assignee that in turn assigns as aforesaid) shall then be relieved and
discharged of any responsibility or liability with respect to this Note and said
Collateral. For the purposes of this Note wherever the term "Lender" shall be
used it shall refer to any subsequent holder, successor or assignee hereof
unless the context requires otherwise.
Cross Default/Collateralization. All other agreements between
Lender and/or any of its affiliates or subsidiaries and the Borrower are hereby
amended so that a default under this Note is a default under all other
agreements between Lender and the Borrower and a default under any one of the
other agreements is a default under this Note. Further, such agreements are
amended so that the Collateral securing this Note secures any presently existing
or hereafter arising obligations due and owing from the Borrower to Lender
and/or its affiliates or subsidiaries and the collateral pledged under any other
agreement with Lender and/or its affiliates or subsidiaries secures this Note.
Incorporation of Commitment Letter. The terms and conditions
of the Commitment Letter from the Lender to International Leisure Enterprises
Incorporated (n/k/a ILX Incorporated), and assigned to Borrower dated June 28,
1991, as amended, and the terms and conditions of the Commitment Letter from
Lender to the Borrower dated July 20, 1994, are hereby incorporated by reference
as though same were fully set forth at length herein.
Gender. Throughout this Note, the masculine shall include the
feminine and vice versa and the singular shall include the plural and vice
versa, unless the context of this Note indicates otherwise.
Section Headings. Section headings are for convenience only
and shall not be construed as limiting the contents of any section contained
herein and shall not be construed as part of this Note.
Conflicting Provisions. In the event that any of the terms and
conditions of this Note conflict with any of the terms and conditions of the
other Loan Documents or any other agreements between the Borrower or any
Guarantor and Lender, the provision(s) offering Lender the greatest protection
or most favorable interpretation of its rights and remedies shall control.
Definitions. Unless otherwise defined herein, the capitalized
terms found herein shall have the same meaning ascribed to them as set forth in
the Loan Agreement.
IN WITNESS WHEREOF, the undersigned has caused these presents to be
duly executed and delivered by its proper and duly authorized officers as of the
day and year first above written.
ATTEST: LOS ABRIGADOS PARTNERS LIMITED
PARTNERSHIP, an Arizona Limited
Partnership
By: ILE SEDONA INCORPORATED,
an Arizona Corporation; Sole
General Partner
Nancy J. Stone By: /S/
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NANCY J. STONE, Secretary JOSEPH P. MARTORI, President