EXHIBIT 10.2
PROMISSORY NOTE
---------------
$250,000 Phoenix, Arizona
- -------- October 12, 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 TWO HUNDRED FIFTY THOUSAND
AND 00/100 DOLLARS ($250,000), 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 June 1, 2000, one annual payment of accrued but unpaid
interest on the outstanding principal balance hereunder; and
(B) On June 1, 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.
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;
(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.
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 40/th/ 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