INSTALLMENT PROMISSORY NOTE
$100,000 October 1, 1994
Phoenix, Arizona
FOR VALUE RECEIVED, the undersigned, ILX INCORPORATED, an
Arizona corporation (the "undersigned"), promises to pay to the order of Martori
Enterprises Incorporated ("Payee"), at Phoenix, Arizona, or at such other place
as the holder hereof may from time to time designate, the principal sum of One
Hundred Thousand Dollars ($100,000), together with interest thereon as computed
below, as follows:
Installments of principal and interest in the amount of $3,750 shall
be payable quarterly on the first day of January, April, July, and
October of each year commencing January 1, 1995. The entire unpaid
principal balance, together with all accrued and unpaid interest
thereon and other costs payable hereunder, shall be paid in full on
September 30, 1998.
Interest shall be charged on the unpaid principal balance of
this Note from October 1, 1994 to the date of maturity on a daily basis for the
actual number of days any portion of the principal is outstanding, computed on
the basis of a 360-day year, at a per annum rate (the "Note Rate") equal to
eight percent (8%).
The undersigned acknowledges that the undersigned has agreed
to the rate of interest represented by the Note Rate, and any additional
charges, costs and fees arising out of or related to the transaction of which
this Note is a part, to the extent deemed to be interest under applicable law.
Each and every payment due under this Note shall be made in
lawful money of the United State of America and in immediately available funds,
and when made shall be first applied to accrued costs, expenses and fees, if
any, then to accrued interest that has not yet been added to principal, and then
to the reduction of the principal amount of this Note. This Note may be prepaid,
in whole or in part, without penalty or premium, provided that each such payment
shall be applied as set forth above.
At the option of the holder hereof, any of the following shall
constitute a "default" hereunder, and, upon the occurrence of any of the
following, all obligations hereunder shall, at the option of the holder hereof,
become immediately due and payable, without presentment for payment, diligence,
grace, exhibition of this Note, protest, further demand or notice of any kind,
all of which are hereby expressly waived: (i) any sum owing hereunder or under
other indebtedness of the undersigned to Payee is not paid as agreed; (ii) any
petition or application for any form of relief under any provision of Title 11,
United States Code, as amended from time to time (the "Bankruptcy Code") or any
other law pertaining to reorganization, insolvency or readjustment of debts is
filed by or against the undersigned, its assets or affairs; (iii) the
undersigned makes an assignment for the benefit of creditors, is not paying
debts as they become due, or is granted an order for relief under any chapter of
the Bankruptcy Code; (iv) a custodian, as defined by the Bankruptcy Code, takes
charge of any property of the undersigned; (v) garnishment, attachment, levy or
execution is issued against any of the property or effects of the undersigned;
(vi) there is a termination, failure to exist or dissolution of the undersigned;
or (vii) there is any default or breach of any representation, warranty or
covenant, or there is any false statement or material omission, by the
undersigned under any document forming part of the transaction in respect of
which this Note is made or forming part of any other transaction under which the
undersigned is indebted to Payee.
The undersigned hereby agrees: (i) to any and all extensions
(including extensions beyond the original term hereof) and renewals hereof, from
time to time, without notice, and that no such extension or renewal shall
constitute or be deemed a release of any obligation of the undersigned to the
holder hereof; (ii) that any written modification, extension or renewal hereof
executed by the undersigned shall constitute a representation and warranty of
the undersigned that the unpaid balance of principal, interest and other sums
owing hereunder at the time of such modification, renewal or extension are owed
without adjustment for offset, counterclaim or other defense of any kind by the
undersigned against Payee; (iii) that the acceptance by the holder hereof of any
performance which does not comply strictly with the terms hereof shall not be
deemed to be a waiver or bar of any right of said holder, nor a release of any
obligation of the undersigned to the holder hereof; (iv) to offsets of any sums
or property owed to the undersigned by the holder hereof at any time; (v) that
this Note shall be governed by the laws of the State of Arizona applicable to
promissory notes made and to be paid in the State of Arizona; and (vi) to pay
the holder hereof upon demand any and all costs, expenses and fees (including
reasonable attorneys' fees) incurred in enforcing or attempting to recover
payment of the amounts due under this Note, including negotiating, documenting
and otherwise pursuing or consummating modifications, extensions, compositions,
renewals or other similar transactions pertaining to this Note, irrespective of
the existence of an event of default, and including costs, expenses and fees
incurred before, after or irrespective of whether suit is commenced, and in the
event suit is brought to enforce payment hereof, such costs, expenses and fees
and all other issues in such suit shall be determined by a court sitting without
a jury.
This Note is secured by a Security Agreement of even date
herewith.
This Note is executed to be effective as of the date set forth
above.
ILX INCORPORATED, an Arizona corporation
ATTEST: By: Nancy J. Stone
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Its: Executive Vice President
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By: Alan J. Tucker
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Its: Executive Vice President
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