EXHIBIT 10.2
PROMISSORY NOTE
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$120,000 Phoenix, Arizona
July 27, 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 East Northern Avenue, Suite 201, Phoenix, Arizona 85020 ("Maker")
hereby promises to pay to the order of James Wirth, 5700 East Glen Drive,
Paradise Valley, Arizona 85253 or a such other place as the holder hereof may
from time to time designate in writing, the principal sum of ONE HUNDRED TWENTY
THOUSAND AND 00/100 DOLLARS ($120,000), 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 July 27, 2000, one annual payment of accrued but
unpaid interest on the outstanding principal balance
hereunder; and
(B) On July 27, 2000 (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 gave the right 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 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.
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Maker hereby agrees that in the event part 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 on 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 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 payment of interest or the entire
Indebtedness. Nothing herein shall be construed as an agreement or privilege to
extend the date of the payment or any installment of or the entire Indebtedness,
or as a wavier of any other right or remedy accruing to Payee.
In the event that any regular 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 for the additional cost agreed compensation to Payee for the additional
costs and expenses reasonable expected to be incurred by Payee by reason of such
nonpayment. Maker acknowledges that the exact amount of such cost and expenses
may be difficult, if not impossible, to determine with certainly, and further
acknowledges and confesses the amount of such charge to be a consciously
considered, good faith estimate the actual damage to Payee by reason of such
default. The Default Rate will only accrue for periods of delinquent
installments except for such 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 principle balance of the Indebtedness,
together with all accrued but unpaid interest thereon at the Default Rate and
all other sums or changes 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 to be 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 n any creditor's proceeding Maker consents to the
appointment or a receiver or trustee for any of its
property;
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(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
(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 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
filling 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 attorney's 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 granted a security interest.
Maker hereby expressly acknowledges and represents that the
indebtedness is for a business purpose and not consumer or household purposes.
Maker hereby waves demand, presentment for payment, protest, notice of
protest, notice of non-payments 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 any of the security for this Note, acceptance of other parties to
be liable for any of the Indebtedness or of other security therefore, 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 any time or
from time to time thereafter.
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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 be certified mail,
postage prepaid, return receipt requested, as follows:
if to Payee, then addressed to Payee at 5700 east 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 North 40th Street, Suite
335, Phoenix, Arizona 85018, (Tel.(602) 468-1811, Fax (602) 468-0442);
if to Maker, then addressed to maker at 1625 East 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, be 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 herein above 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) 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
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