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Exhibit 10.1
PROMISSORY NOTE
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$2,000,000
Phoenix, Arizona
March 15, 1999
FOR VALUED RECEIVED, and intending to be legally bound hereby,
INNSUITES HOSPITALITY TRUST, an Ohio real estate investment trust, having an
office at 1625 E. Northern Avenue, Suite 201, Phoenix, Arizona 85020 ("Maker")
hereby promises to pay to the order of James Wirth, 5700 E. Glen Drive, Paradise
Valley, Arizona 85253 or at such other place as the holder hereof may from time
to time designate in writing, the principal sum of TWO MILLION AND 00/100
DOLLARS ($2,000,000), with interest on the unpaid principal balance thereon from
time to time outstanding, at the rate of seven percent (7.00%) per annum,
computed on a three hundred sixty (360)-day year, to be due and payable in
installments of principal and interest as follows:
(A) Commencing on March 15, 2000, and on the first day of each
succeeding March thereafter, through and including March 15, 2004,
annual payments of accrued but unpaid interest on the outstanding
principal balance hereunder; and
(B) On March 15, 2004 (the "Maturity Date"), one payment in
the amount of the then unpaid principal balance hereunder, accrued but
unpaid interest hereunder and all sums and charges due and unpaid by
Maker (collectively, the "Indebtedness").
Payments shall be applied first to any charges or sums (other
than principal and interest) due and payable by Maker, second to accrued and
unpaid interest on the principal balance hereof, and then to further reduce the
principal balance of this Note.
Maker shall have the right at any time during the term of this
Note to repay all or part of the unpaid principal amount of the Indebtedness,
together with any accrued and unpaid interest thereon and any other sums or
charges due hereunder without any prepayment premium or penalty.
Maker hereby waives for itself and, to the fullest extent not
prohibited by applicable law, for any subsequent lienor, any right Maker may now
or hereafter have under the doctrine of marshaling of assets or otherwise which
would require Payee to proceed against certain property before proceeding
against any other property.
Maker hereby agrees that in the event any installment of
principal or interest is not paid when due or the entire Indebtedness is not
paid when due, then the rate of interest on this Note shall, at the election of
Payee upon ten (10) days prior written notice, each of which is hereby expressly
waived, be increased to nine and 00/100 percent (9.00%) per annum or the highest
rate for which the parties may agree under applicable law, whichever is less
(the "Default Rate"). Maker shall be obligated thereafter to pay interest on the
then unpaid principal balance of the Indebtedness
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at the Default Rate, both before and after judgment, to be computed from the due
date through and including the date of actual receipt of the overdue payment,
whether a quarterly installment of interest or the entire Indebtedness. Nothing
herein shall be construed as an agreement or privilege to extend the date of the
payment of any installment of, or the entire, Indebtedness, nor as a waiver of
any other right or remedy accruing to Payee.
In the event that any regular quarterly payment of interest
herein provided shall not be received by Payee on the date such payment is due,
Payee shall have the right to assess Maker a late payment charge in the amount
of two percent (2.0%) of such overdue quarterly installment, which shall become
immediately due to Payee as agreed compensation to Payee for the additional
costs and expenses reasonably expected to be incurred by Payee by reason of such
nonpayment. Maker acknowledges that the exact amount of such costs and expenses
may be difficult, if not impossible, to determine with certainty, and further
acknowledges and confesses the amount of such charge to be a consciously
considered, good faith estimate of the actual damage to Payee by reason of such
default. The Default Rate will only accrue for periods of delinquent quarterly
installments except for such quarters when Payee accepts late payments of
installments accompanied by a late payment charge as specified above.
Upon any of the following events ("Event(s) of Default"), at
the election of Payee, the entire unpaid principal balance of the Indebtedness,
together with all accrued but unpaid interest thereon at the Default Rate and
all other sums or charges due hereunder, shall become due and payable:
(a) Maker's failure to pay when due any installment required
to be paid hereunder, on or before the tenth (10th) day following the
applicable due date;
(b) Maker's failure to pay when due any other payment required
under this Note, subject to any notice and applicable grace period, if
any;
(c) Maker's breach of any other covenant or agreement herein
and such breach remains uncorrected at the expiration of any applicable
grace period expressly provided for herein;
(d) if in any creditor's proceeding Maker consents to the
appointment of a receiver or trustee for any of its property;
(e) if any order, judgment or decree shall be entered, without
the consent of Maker, upon an application of a creditor approving the
appointment of a receiver or trustee for any of its property, and such
order, judgment, decree, or appointment is not dismissed or stayed with
appropriate appeal bond within sixty (60) days following the entry or
rendition thereof; or
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(f) if Maker (i) makes a general assignment for the benefit of
creditors, (ii) fails to pay its debts generally as such debts become
due, (iii) is found to be insolvent by a court of competent
jurisdiction, (iv) voluntarily files a petition in bankruptcy or a
petition or answer seeking a readjustment of debts under any state or
federal bankruptcy or like law, or (v) any such petition is filed
against Maker and is not vacated or dismissed within sixty (60) days
after the filing thereof.
Notice of such election by Payee is hereby expressly waived as part of the
consideration for this loan. Nothing contained herein shall be construed to
restrict the exercise of any other rights or remedies granted to Payee hereunder
upon the failure of Maker to perform any provision hereof.
If this Note is not paid when due, whether at maturity or by
acceleration, Maker promises to pay all costs incurred by Payee, including
without limitation reasonable attorneys' fees to the fullest extent not
prohibited by law, and all expenses incurred in connection with the protection
or realization of any collateral, whether or not suit is filed hereon or on any
instrument granting a security interest.
Maker hereby expressly acknowledges and represents that the
Indebtedness is for a business purpose and not for consumer or household
purposes.
Maker hereby waives demand, presentment for payment, protest,
notice of protest, notice of nonpayment and any and all lack of diligence or
delays in collection or enforcement of this Note, and expressly consents to any
extension of time of payment hereof, release of any party primarily or
secondarily liable hereunder or of any of the security for this Note, acceptance
of other parties to be liable for any of the Indebtedness or of other security
therefor, or any other indulgence or forbearance which may be made, without
notice to any party and without in any way affecting the liability of any party.
No failure by Payee to exercise any right hereunder shall be
construed as a waiver of the right to exercise the same or any other right at
any time or from time to time thereafter.
This Note shall be construed and enforced according to, and
governed by, the laws of the State of Arizona.
Any notice required hereunder shall be in writing, and shall
be given to the party to receive the notice by personal delivery or by certified
mail, postage prepaid, return receipt requested, as follows:
if to Payee, then addressed to Payee at 5700 E. Glen Drive,
Paradise Valley, Arizona 85253, (Tel. (602) 596-0224, Fax (602)
596-0225), with a copy to James W. Reynolds, Esq., Dillingham Cross,
P.L.C., 5080 N. 40th Street, Suite 335, Phoenix, Arizona 85018 (Tel.
(602) 468-1811, Fax (602) 468-0442);
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if to Maker, then addressed to Maker at 1625 E. Northern
Avenue, Suite 201, Phoenix, Arizona 85020, Attn: President, with a copy
to James B. Aronoff, Esq., Thompson Hine & Flory, LLP, 3900 Key Center,
127 Public Square, Cleveland, Ohio 44114 (Tel. (216) 566-5500, Fax
(216) 566-5800).
Any party may, by notice in writing, designate another address
as a place for service of notice. Such notices shall be deemed to be received
when delivered, if delivered in person, or seven (7) business days after
deposited in the United States mails, if mailed as hereinabove provided.
By acceptance of this Note, Payee covenants and agrees that,
upon payment in full of the then unpaid principal balance of this Note, together
with all unpaid interest and other sums payable to Payee under this Note, (a)
this Note shall be fully satisfied, (b) Payee shall promptly mark this Note as
being paid in full, satisfied and discharged and shall return the same to Maker.
INNSUITES HOSPITALITY TRUST,
an Ohio real estate investment trust
By: /s/ Marc E. Berg
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Name: Marc E. Berg
Title: Executive Vice President