Exhibit 10.16


 


PROMISSORY NOTE


 




	
  $110,000.00

  	
   

  	
  Phoenix, Arizona

  
	
   

  	
   

  	
  December 26, 2002

  
	
   

  	
   

  	
  Note Doc. 122602122

  






 


FOR VALUED RECEIVED, and legally bound hereby, RRF LIMITED PARTNERSHIP
(“Maker”), a Delaware partnership, InnSuites Hospitality Trust, General Partner,
an Ohio real estate investment trust, having an office at 1615 East Northern
Avenue, Suite 102, Phoenix, Arizona 85020 hereby promises to pay to the order
of Fort Worth/Dallas Suite Hospitality Partnership (“Payee”), an Arizona
partnership, 1615 East Northern Avenue, Suite 102, Phoenix, Arizona 85020 or a
such other place as the holder hereof may from time to time designate in
writing, the principal sum of ONE HUNDRED TEN THOUSAND AND 00/100 DOLLARS
($110,000.00), 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 February 1, 2003, one
payment of accrued but unpaid interest on the outstanding principal balance
hereunder; and one payment in the amount of the then unpaid principal balance
hereunder and all sums and charges due and unpaid by Maker (collectively, the
“Note”).


 


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 Note, 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 Note 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 Note 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 Note.  Nothing herein shall be construed as an
agreement or privilege to extend the date of the payment or any installment or
the entire Note, or as a waiver 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 one-half
percent (.5%) of such overdue monthly installment, which shall become due to
Payee for the additional cost incurred by Payee by reason of such nonpayment.
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 of Default, at the election of Payee,
the entire unpaid principle balance of the Note, 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)                                 Any creditor’s
proceeding in which 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 an 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.


 


(g)                                 Maker and Payee agree
that no event of default has occurred by effect of (a) through (f) above
if the event is a result of law or violates any other agreements that Maker and
Payee as President of InnSuites Hospitality Trust, General Partner of RRF
Limited Partnership has agreed.


 


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 Note 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 receiving party the notice by personal delivery or be certified mail,
postage prepaid, return receipt requested, as follows:


 


if to Payee, then addressed to Payee at 1615 East Northern Avenue Suite
102, Phoenix, Arizona 85020, (Tel.(602) 944-1500, Fax (602) 678-0281,
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 1615 East Northern Avenue,
Suite 102, Phoenix, Arizona 85020, Attn: President (Tel.(602) 944-1500,
Fax (602) 678-0281), with a copy to James B. Aronoff, Esq., Thompson
Hine LLP, 3900 Key Center, 127 Public Square, Cleveland, Ohio 44114 (Tel.(216)
566-5500, Fax (216) 566-5800).


 


Any party may, be given notice in writing to 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 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.


 


	
   

  	
  MAKER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  RRF LIMITED PARTNERSHIP, A Delaware limited

  partnership, InnSuites Hospitality Trust, General Partner,

  an Ohio real estate investment trust

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Marc E. Berg

  	
   

  
	
   

  	
   

  	
  Name: Marc E. Berg

  
	
   

  	
   

  	
  Title:   Executive
  Vice-President