Exhibit 10.1
PROMISSORY NOTE
 
Principal
   
Loan Date
   
Maturity
   
Loan No
   
Call / Coll
   
Account
   
Officer
   
Initials
$500,000.00
   
11-23-2010
   
05-23-2011
   
823002500
   
56
         
MH
   
illegible
References in the boxes above are for Lender’s use only and do not limit the
applicability of this document to any particular loan or item.
Any item above containing “***” has been omitted due to text length limitations.

Borrower:
INNSUITES HOSPITALITY TRUST, YUMA
HOSPITALITY PROPERTIES LIMITED
PARTNERSHIP and RRF LIMITED PARTNERSHIP
1625 E. NORTHERN AVENUE, STE #105
PHOENIX, AZ 85020
 
Lender:
RepublicBankAz, N.A.
909 E. Missouri Avenue
Phoenix, AZ 85014

   
Principal Amount: $500,000.00
Date of Note: November 23, 2010

 
PROMISE TO PAY. INNSUITES HOSPITALITY TRUST, YUMA HOSPITALITY PROPERTIES LIMITED
PARTNERSHIP and RRF LIMITED PARTNERSHIP (“Borrower”) jointly and severally
promise to pay to RepublicBankAz, N.A. (“Lender”), or order, in lawful money of
the United States of America, the principal amount of Five Hundred Thousand &
00/100 Dollars ($500,000.00) or so much as may be outstanding, together with
interest on the unpaid outstanding principal balance of each advance. Interest
shall be calculated from the date of each advance until repayment of each
advance.
 
PAYMENT. Borrower will pay this loan in one payment of all outstanding principal
plus all accrued unpaid interest on May 23, 2011. In addition, Borrower will pay
regular monthly payments of all accrued unpaid interest due as of each payment
date, beginning December 23, 2010, with all subsequent interest payments to be
due on the same day of each month after that, Unless otherwise agreed or
required by applicable law, payments will be applied first to any accrued unpaid
interest; then to principal; then to any late charges; and then to any unpaid
collection costs. Borrower will pay Lender at Lender’s address shown above or at
such other place as Lender may designate in writing.
 
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from
time to time based on changes in an independent index which is the the highest
published prime rate as published in the Wall Street Journal (the “Index”). The
Index is not necessarily the lowest rate charged by Lender on its loans. If the
Index becomes unavailable during the term of this loan, Lender may designate a
substitute index after notifying Borrower. Lender will tell Borrower the current
Index rate upon Borrower’s request. The interest rate change will not occur more
often than each daily. Borrower understands that Lender may make loans based on
other rates as well. The Index currently is 3.250% per annum. Interest on the
unpaid principal balance of this Note will be calculated as described in the
“INTEREST CALCULATION METHOD” paragraph using a rate of 2.750 percentage points
over the Index, adjusted if necessary for any minimum and maximum rate
limitations described below, resulting in an initial rate of 6.000% per annum
based on a year of 360 days. NOTICE: Under no circumstances will the interest
rate on this Note be less than 6.000% per annum or more than the maximum rate
allowed by applicable law.
 
INTEREST CALCULATION METHOD. Interest on this Note is computed on a 365/360
basis; that is, by applying the ratio of the interest rate over a year of 360
days, multiplied by the outstanding principal balance, multiplied by the actual
number of days the principal balance is outstanding. All interest payable under
this Note is computed using this method. This calculation method results in a
higher effective interest rate than the numeric interest rate stated in this
Note. (Initial Here /s/ JW )
 
EFFECTIVE RATE. Borrower agrees to an effective rate of interest that is the
rate specified in this Note plus any additional rate resulting from any other
charges in the nature of interest paid or to be paid in connection with this
Note.
 
PREPAYMENT. Borrower agrees that all loan fees and other prepaid finance charges
are earned fully as of the date of the loan and will not be subject to refund
upon early payment (whether voluntary or as a result of default), except as
otherwise required by law. Except for the foregoing, Borrower may pay without
penalty all or a portion of the amount owed earlier than it is due. Early
payments will not, unless agreed to by Lender in writing, relieve Borrower of
Borrower’s obligation to continue to make payments of accrued unpaid interest.
Rather, early payments will reduce the principal balance due. Borrower agrees
not to send Lender payments marked “paid in full”, “without recourse”, or
similar language. If Borrower sends such a payment, Lender may accept it without
losing any of Lender’s rights under this Note, and Borrower will remain
obligated to pay any further amount owed to Lender. All written communications
concerning disputed amounts, including any check or other payment instrument
that indicates that the payment constitutes “payment in full” of the amount owed
or that is tendered with other conditions or limitations or as full satisfaction
of a disputed amount must be mailed or delivered to: RepublicBankAz, N.A., 909
E. Missouri Avenue P.O. Box 7548 Phoenix, AZ 85011-7548.
 
LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged
5.000% of the regularly scheduled payment or $10.00, whichever is greater.
 
INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final
maturity, the interest rate on this Note shall be increased by adding an
additional 10.000 percentage point margin (“Default Rate Margin”). The Default
Rate Margin shall also apply to each succeeding interest rate change that would
have applied had there been no default. However, in no event will the interest
rate exceed the maximum interest rate limitations under applicable law.
 
DEFAULT. Each of the following shall constitute an event of default (“Event of
Default”) under this Note:

     
Payment Default. Borrower fails to make any payment when due under this Note.
     
Other Defaults. Borrower fails to comply with or to perform any other term,
obligation, covenant or condition contained in this Note or in any of the
related documents or to comply with or to perform any term, obligation, covenant
or condition contained in any other agreement between Lender and Borrower.
     
Default in Favor of Third Parties. Borrower or any Grantor defaults under any
loan, extension of credit, security agreement, purchase or sales agreement, or
any other agreement, in favor of any other creditor or person that may
materially affect any of Borrower’s property or Borrower’s ability to repay this
Note or perform Borrower’s obligations under this Note or any of the related
documents.
     
False Statements. Any warranty, representation or statement made or furnished to
Lender by Borrower or on Borrower’s behalf under this Note or the related
documents is false or misleading in any material respect, either now or at the
time made or furnished or becomes false or misleading at any time thereafter.
     
Insolvency. The dissolution or termination of Borrower’s existence as a going
business or the death of any partner, the insolvency of Borrower, the
appointment of a receiver for any part of Borrower’s property, any assignment
for the benefit of creditors, any type of creditor workout, or the commencement
of any proceeding under any bankruptcy or insolvency laws by or against
Borrower.
     
Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help, repossession or any
other method, by any creditor of Borrower or by any governmental agency against
any collateral securing the loan. This includes a garnishment of any of
Borrower’s accounts, including deposit accounts, with Lender. However, this
Event of Default shall not apply if there is a good faith dispute by Borrower as
to the validity or reasonableness of the claim which is the basis of the
creditor or forfeiture proceeding and if Borrower gives Lender written notice of
the creditor or forfeiture proceeding and deposits with Lender monies or a
surety bond for the creditor or forfeiture proceeding, in an amount determined
by Lender, in its sole discretion, as being an adequate reserve or bond for the
dispute.
  
Events Affecting Guarantor. Any of the preceding events occurs with respect to
any Guarantor of any of the indebtedness or any Guarantor dies or becomes
incompetent, or revokes or disputes the validity of, or liability under, any
guaranty of the indebtedness evidenced by this Note.
     
Events Affecting General Partner of Borrower. Any of the preceding events occurs
with respect to any general partner of Borrower or any general partner dies or
becomes incompetent.
     
Change In Ownership. The resignation or expulsion of any general partner with an
ownership interest of twenty-five percent (25%) or more in Borrower. Any change
in ownership of twenty-five percent (25%) or more of the common stock of
Borrower.
     
Adverse Change. A material adverse change occurs in Borrower’s financial
condition, or Lender believes the prospect of payment or performance of this
Note is impaired.
     
Insecurity. Lender in good faith believes itself insecure.
     
Cure Provisions. If any default, other than a default in payment is curable and
if Borrower has not been given a notice of a breach of the same provision of
this Note within the preceding twelve (12) months, it may be cured if Borrower,
after Lender sends written notice to Borrower demanding cure of such default:
(1) cures the default within thirty (30) days; or (2) if the cure requires more
than thirty (30) days, immediately initiates steps which Lender deems in
Lender’s sole discretion to be sufficient to cure the default and thereafter
continues and completes all reasonable and necessary steps sufficient to produce
compliance as soon as reasonably practical.

 
LENDER’S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance under this Note and all accrued unpaid interest immediately due, and
then Borrower will pay that amount.
 
ATTORNEYS’ FEES; EXPENSES. Lender may hire or pay someone else to help collect
this Note if Borrower does not pay. Borrower will pay Lender that amount. This
includes, subject to any limits under applicable law, Lender’s attorneys’ fees
and Lender’s legal expenses, whether or not there is a lawsuit, including
attorneys’ fees, expenses for bankruptcy proceedings (including efforts to
modify or vacate any automatic stay or injunction), and appeals. However,
Borrower will only pay attorneys’ fees of an attorney not Lender’s salaried
employee, to whom the matter is referred after Borrower’s default. If not
prohibited by applicable law, Borrower also will pay any court costs, in
addition to all other sums provided by law.
 
JURY WAIVER. Lender and Borrower hereby waive the right to any jury trial in any
action, proceeding, or counterclaim brought by either Lender or Borrower against
the other.
 
GOVERNING LAW. This Note will be governed by federal law applicable to Lender
and, to the extent not preempted by federal law, the laws of the State of
Arizona without regard to its conflicts of law provisions. This Note has been
accepted by Lender in the State of Arizona.
 
DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $25.00 if Borrower
makes a payment on Borrower’s loan and the check or preauthorized charge with
which Borrower pays is later dishonored.
 
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Borrower’s accounts with Lender (whether checking,
savings, or some other account). This includes all accounts Borrower holds
jointly with someone else and all accounts Borrower may open in the future.
However, this does not include any IRA or Keogh accounts, or any trust accounts
for which setoff would be prohibited by law. Borrower authorizes Lender, to the
extent permitted by applicable law, to charge or setoff all sums owing on the
indebtedness against any and all such accounts.
 
COLLATERAL. Borrower acknowledges this Note is secured by the following
collateral described in the security instruments listed herein:

       
(A)
a Deed of Trust dated November 23, 2010, to a trustee in favor of Lender on real
property located in YUMA County, State of Arizona.
       
(B)
described in Commercial Security Agreements dated November 23, 2010.

 
LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under
this Note may be requested orally by Borrower or as provided in this paragraph.
All oral requests shall be confirmed in writing on the day of the request. All
communications, instructions, or directions by telephone or otherwise to Lender
are to be directed to Lender’s office shown above. The following person or
persons are authorized to request advances and authorize payments under the line
of credit until Lender receives from Borrower, at Lender’s address shown above,
written notice of revocation of such authority: JAMES WIRTH, PRESIDENT of
INNSUITES HOSPITALITY TRUST. Borrower agrees to be liable for all sums either:
(A) advanced in accordance with the instructions of an authorized person or (B)
credited to any of Borrower’s accounts with Lender. The unpaid principal balance
owing on this Note at any time may be evidenced by endorsements on this Note or
by Lender’s internal records, including daily computer print-outs.
 
INTEREST RATE ADJUSTMENT. INTEREST RATE WILL BE CALCULATED AS WALL STREET
JOURNAL PLUS 1.00% WITH A FLOOR OF 6% SHOULD BOROWER ESTABLISH DEPOSIT ACCOUNTS
AND MAINTAIN AN AVERAGE DAILY BALANCE OF $250,000.00. BALANCES WILL BE TESTED
QUARTERLY.   /s/  JW   INITIAL.
 
SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and
upon Borrower’s heirs, personal representatives, successors and assigns, and
shall inure to the benefit of Lender and its successors and assigns.
 
NOTIFY US OF INACCURATE INFORMATION WE REPORT TO CONSUMER REPORTING AGENCIES.
Borrower may notify Lender if Lender reports any inaccurate information about
Borrower’s account(s) to a consumer reporting agency. Borrower’s written notice
describing the specific inaccuracy(ies) should be sent to Lender at the
following address: RepublicBankAz, N.A. 909 E. Missouri Avenue P.O. Box 7548
Phoenix, AZ 85011-7548.
 
GENERAL PROVISIONS. If any part of this Note cannot be enforced, this fact will
not affect the rest of the Note. Lender may delay or forgo enforcing any of its
rights or remedies under this Note without losing them. Each Borrower
understands and agrees that, with or without notice to Borrower, Lender may with
respect to any other Borrower (a) make one or more additional secured or
unsecured loans or otherwise extend additional credit; (b) alter, compromise,
renew, extend, accelerate, or otherwise change one or more times the time for
payment or other terms of any indebtedness, including increases and decreases of
the rate of interest on the indebtedness; (c) exchange, enforce, waive,
subordinate, fail or decide not to perfect, and release any security, with or
without the substitution of new collateral; (d) apply such security and direct
the order or manner of sale thereof, including without limitation, any
non-judicial sale permitted by the terms of the controlling security agreements,
as Lender in its discretion may determine; (e) release, substitute, agree not to
sue, or deal with any one or more of Borrower’s sureties, endorsers, or other
guarantors on any terms or in any manner Lender may choose; and (f) determine
how, when and what application of guarantees or endorses this Note, to the
extent allowed by law, waive presentment, demand for payment, and notice of
dishonor. Upon any change in the terms of this Note, and unless otherwise
expressly stated in writing, no party who signs this Note, whether as maker,
guarantor, accommodation maker or endorser, shall be released from liability.
All such parties agree that Lender may renew or extend (repeatedly and for any
length of time) this loan or release any party, partner, or guarantor or
collateral; or impair, fail to realize upon or perfect Lender’s security
interest in the collateral; and take any other action deemed necessary by Lender
without the consent of or notice to anyone. All such parties also agree that
Lender may modify this loan without the consent of or notice to anyone other
than the party with whom the modification is made. The obligations under this
Note are joint and several.
 
 
PRIOR TO SIGNING THIS NOTE, EACH BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS
OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. EACH BORROWER
AGREES TO THE TERMS OF THE NOTE.
 
BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.
 
BORROWER:

     
INNSUITES HOSPITALITY TRUST
       
By:
/s/  James F. Wirth 
   
JAMES F. WIRTH, President of INNSUITES HOSPITALITY TRUST
       
YUMA HOSPITALITY PROPERTIES LIMITED PARTNERSHIP
     
INNSUITES HOSPITALITY TRUST, General Partner of YUMA HOSPITALITY PROPERTIES
LIMITED PARTNERSHIP
     
By:
/s/  James F. Wirth
   
JAMES F. WIRTH, President of INNSUITES HOSPITALITY TRUST
       
RRF LIMITED PARTNERSHIP
 
INNSUITES HOSPITALITY TRUST, General Partner of RRF LIMITED PARTNERSHIP
     
By:
/s/  James F. Wirth
   
JAMES F. WIRTH, President of INNSUITES HOSPITALITY TRUST