Exhibit 10.3
PROMISSORY NOTE
$100,000.00 Scottsdale, Arizona
September 26, 2000
1. FUNDAMENTAL PROVISIONS.
The following terms will be used as defined terms in this Note:
PAYEE AND HOLDER: ILX Resorts Incorporated, an Arizona corporation,
or to its order
MAKERS: Canyon Portal, L.L.C., an Arizona limited
liability company
ORIGINAL PRINCIPAL
AMOUNT: $100,000.00
INTEREST ACCRUAL
DATE: October 1, 2000
INTEREST RATE: 1.5% over the prime rate as published in the Wall
Street Journal, as such rate may change from time
to time.
DEFAULT INTEREST
RATE: 6.5% over the prime rate as published in the Wall
Street Journal, as such rate may change from time
to time.
MATURITY DATE: December 1 , 2004
BUSINESS DAY: Any day of the year
LOAN DOCUMENTS: This Promissory Note.
LOAN: The Loan from Payee to Maker in the Principal
Amount and evidenced by this Note.
2. PROMISE TO PAY. For value received, Maker promises to pay to the order
of Holder, at 2111 East Highland, Suite 210, Phoenix, Arizona 85016, or at such
other place as the Holder hereof may from time to time designate in writing,
without demand or deduction or offset of any kind, the Principal Amount,
together with accrued interest, commencing on the Interest Accrual Date, on the
unpaid principal balance at the Interest Rate. Interest shall accrue through
December 31, 2001, and then be added to principal on that date. Beginning
January 1, 2002, Maker shall pay this Note in full to Holder in 36 consecutive
equal monthly payments of principal, accrued interest and all subsequently
accrued interest thereon, due on the first day of each consecutive month
thereafter.
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3. PREPAYMENT. Maker shall have the right at any time to prepay the
Principal Amount, or any portion thereof, without premium or penalty, provided
that all accrued interest on such principal prepayment is paid to the date of
such principal prepayment.
4. LAWFUL MONEY. Principal and interest are payable in lawful money of the
United States of America.
5. LATE CHARGE. If any payment of interest and/or principal is not received
by the Holder hereof within ten (10) days of when such payment is due, then in
addition to the remedies conferred upon the Holder hereof pursuant to Paragraphs
7 and 8 hereof, (i) a late charge of five percent (5%) of the amount of the
installment due and unpaid will be added to the delinquent amount to compensate
the Holder hereof for the expense of handling the delinquency for any payment
past due in excess of ten (10) days, regardless of any notice and cure periods,
and (ii) the amount due and unpaid (including, without limitation, principal,
the late charge and any unpaid interest) shall bear interest at the Default
Interest Rate, computed from the date on which the amount was due and payable
until paid.
6. EVENT OF DEFAULT. The occurrence of any of the following shall be deemed
to be an event of default (Event of Default) hereunder:
a. Failure to make a payment of principal or interest within ten (10)
days of the due date; or
b. Any other failure of Maker to perform under the terms of this Note.
7. REMEDIES. Upon the occurrence of an Event of Default, then at the option
of the Holder hereof, at any time thereafter while such Event of Default is
continuing, the entire balance of principal together with all accrued interest
thereon, and all other amounts payable by Maker under the Loan Documents, shall,
without demand or notice, immediately become due and payable, and so long as
such Event of Default shall continue, the entire balance of principal hereof,
together with all accrued interest thereon, all other amounts due under the
Note, and any judgment for such principal, interest, and other amounts shall
bear interest at the Default Interest Rate from date of the last interest
payment prior to such Event of Default, subject to the limitations contained in
Paragraph 13 hereof. No delay or omission on the part of the Holder hereof in
exercising any right under this Note or under any of the Holder hereof in
exercising any right under this Note or under any of the other documents related
hereto shall operate as a waiver of such right. Payments made or received on, or
offset against, this Note shall be applied against amounts due hereunder in the
following order unless Holder chooses (without any notice required) a different
order from time to time: costs of collections and fees, late charges, interest,
principal.
8. HOLDER RIGHT TO OFFSET AGAINST RENTAL PAYMENTS. Holder is a tenant of
Maker, as landlord, for the rental of a motel and related motel office space at
Canyon Portal in Sedona, Arizona ("Canyon Portal"). In an Event of Default of
any payment or any other term of this Note, Holder shall have the right, at its
option, to deduct the amount of money, or any part thereof, required to cure
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such default from the next rental and other payments due from Holder to Maker,
or its successor as the landlord, at Canyon Portal. Any partial cure pursuant to
this paragraph shall not impair or waive, in any manner, Holder's other rights
or remedies pursuant to this Note.
9. WAIVER. Maker, endorsers and sureties of this Note hereby waive
diligence, demand for payment, presentment for payment, protest, notice of
nonpayment, notice of protest, notice of intent to accelerate, notice of
acceleration, notice of dishonor, and notice of nonpayment, and all other
notices or demands of any kind pursuant to this Note, and expressly agree that,
without in any way affecting the liability of Maker, endorsers or sureties, the
Holder hereof may extend any maturity date or the time for payment of any
installment due hereunder, otherwise modify the Loan Documents, accept
additional security, release any person liable, and release any security. Maker,
endorsers and sureties waive, to the full extent permitted by law, the right to
plead any and all statutes of limitations as a defense.
10. CHANGE, DISCHARGE, TERMINATION, OR WAIVER. No provision of this Note
may be changed, discharged, terminated, or waived except in writing signed by
the party against whom enforcement of the change, discharge, termination or
waiver is sought. No failure on the part of the Holder hereof to exercise and no
delay by the Holder hereof in exercising any right or remedy under this Note or
under the law shall operate as a waiver thereof .
11. ATTORNEYS' FEES. If this Note is not paid when due or if any Event of
Default occurs, Maker promises to pay all costs of enforcement and collection
and preparation therefor, including but not limited to, reasonable attorneys'
fees, whether or not any action or proceeding is brought to enforce the
provisions hereof (including, without limitation, all such costs incurred in
connection with any bankruptcy, receivership, or other court proceedings,
whether at the trial or appellate level.
12. SEVERABILITY. If any provision of this Note is unenforceable, the
enforceability of the other provisions shall not be affected and they shall
remain in full force and effect.
13. INTEREST RATE LIMITATION. Maker hereby agrees to pay an effective rate
of interest that is the sum of the interest rate provided for herein, together
with any additional rate of interest resulting from any other charges of
interest or in the nature of interest paid or to be paid in connection with the
Loan, including, without limitation, any fees to be paid by Maker pursuant to
the provisions of this Note or any other document that may be related hereto.
Holder and Maker agree that none of the terms and provisions contained herein or
in any other document that may be related hereto shall be construed to create a
contract for the use, forbearance or detention of money requiring payment of
interest at a rate in excess of the maximum interest rate permitted to be
charged by the laws of the State of Arizona. In such event, if any Holder of
this Note shall collect monies which are deemed to constitute interest which
would otherwise increase the effective interest rate on this Note to a rate in
excess of the maximum rate permitted to be charged by the laws of the State of
Arizona, all such sums deemed to constitute interest in excess of such maximum
rate shall, at the option of the Holder, be credited to the payment of other
amounts payable under this Note or returned to Maker.
14. NUMBER AND GENDER. In this Note the singular shall include the plural
and the masculine shall include the feminine and neuter gender, and vice versa.
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15. HEADINGS. Headings at the beginning of each numbered section of this
Note are intended solely for convenience and are not part of this Note.
16. CHOICE OF LAW. This Note shall be governed by and construed in
accordance with the laws of the State of Arizona. At the option of the Holder
hereof, jurisdiction and venue shall be in Maricopa County, Arizona.
17. DUE ON SALE. In the event Maker conveys to a third party its interest
in Canyon Portal, this Note shall be due and payable in full upon and at such
closing.
18. BINDING EFFECT. This Note will be binding upon, and inure to the
benefit of, the Holder hereof, Maker, and their respective successors and
assigns. Maker may not delegate its obligations under the Loan Documents.
19. TIME IS OF THE ESSENCE. Time is of the essence with regard to each
provision of this Note as to which time is a factor.
MAKER:
CANYON PORTAL, L.L.C., an
Arizona limited liability company
By: Canyon Portal Properties, Inc.
Its: Managing Member
------------------------------------
By: Tom Van Sickle
Its: President
By: HIDC Investments, L.L.C.,
an Arizona limited liability company
Its: Member
------------------------------------
By: Jack Gechman
Manager
-----------------------------------------
By: Al Spector
Its: Member
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