PROMISSORY NOTE
$900,000 July 28, 2 P.M., 1995
Phoenix, Arizona
FOR VALUE RECEIVED, the undersigned LOS ABRIGADOS PARTNERS LIMITED
PARTNERSHIP, an Arizona limited partnership, and ILX INCORPORATED, an Arizona
corporation (the "undersigned"), jointly and severally, promise to pay to the
order of Cynthia J. Polich and Joseph P. Martori as Trustees for the Cynthia J.
Polich Irrevocable Trust dated June 1, 1989 (to the extent of a 38.889%
participation herein), and Edward John Martori (to the extent of a 61.111%
participation herein) (collectively, "Payee"), at Phoenix, Arizona, or at such
other place as the holder hereof may from time to time designate, the principal
sum of Nine Hundred Thousand Dollars ($900,000), together with interest thereon
as computed below, and in accordance with their participation interests
described above, as follows:
Payments of interest only shall be made monthly on the first day of
each month commencing September 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 July 31, 1998.
Interest shall be charged on the unpaid principal balance of this Note
from the date hereof 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 thirteen
and one-half percent (13.5%).
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 agree: (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 Deed of Trust and Assignment of Rents of even
date herewith.
This Note is executed to be effective as of the date set forth above.
LOS ABRIGADOS PARTNERS LIMITED
PARTNERSHIP, an Arizona
limited partnership
By: ILE SEDONA INCORPORATED,
an Arizona corporation, its
general partner
By: /S/ Joseph P. Martori
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Joseph P. Martori
Its: President
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ILX INCORPORATED, an Arizona
corporation
By: /s/ Nancy J. Stone
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Nancy J. Stone
Its: Exec. Vice President
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