Exhibit 10.4


 


NOTES EXCHANGE AGREEMENT


 


This
Notes Exchange Agreement (this “Agreement”), effective as of January 31,
2005, is entered into by and among InnSuites Hospitality Trust, an Ohio real
estate investment trust (the “Company”), and the individuals named on
the signature pages hereof (the “Note Holders”).


 


WITNESSETH


 


WHEREAS,
the Note Holders own certain promissory notes (each referred to herein as a “Note,”
and collectively as the “Notes”) previously issued by the Company; and


 


WHEREAS,
in exchange for the surrender, cancellation and conversion of the Notes in the
manner and on the terms set forth in this Agreement, the Note Holders desire to
acquire from the Company, and the Company desires to issue to the Note Holders,
Shares of Beneficial Interest of the Company. 
The descriptions of each Note being surrendered by each Note Holder and
the number of Shares of Beneficial Interest of the Company being issued upon
exchange and conversion thereof are set forth on Exhibit A.


 


NOW
THEREFORE, in consideration of the mutual promises and covenants contained in
this Agreement, the parties hereto, intending to be legally bound, agree as
follows:


 


SECTION 1.                            DEFINITIONS. 
The following terms when used in this Agreement shall have
the following respective meanings:


 


“Agreement”
has the meaning set forth in the introductory paragraph.


 


“Company”
means InnSuites Hospitality Trust, an Ohio real estate investment trust,
together with its successors and assigns.


 


“Governmental
Authority” means the United States, any state or municipality, the
government of any foreign country, any subdivision of any of the foregoing or
any authority, department, commission, board, bureau, agency, court or
instrumentality of any of the foregoing.


 


“Lien”
means any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance,
charge, security interest, conditional sale or other title retention agreement,
pledge, purchase option, call, adverse claim or similar right of a third party
with respect to such securities.


 


“Note
Holders” means the individuals named on the signature page of this
Agreement.


 


“Note”
or “Notes” has the meaning set forth in the introductory statements.


 


“Securities
Act” means the Securities Act of 1933, as amended.


 


“Shares”
means the Shares of Beneficial Interest of the Company to be acquired by the
Note Holders hereunder, as set forth on Exhibit A.


 





















 


SECTION 2.                            EXCHANGE AND CONVERSION OF THE NOTES INTO
SHARES.


 


Subject
to and upon the terms and conditions set forth in this Agreement, the Company
agrees to issue to each of the Note Holders, and each of the Note Holders agree
to acquire from the Company, the Shares in exchange for the delivery,
cancellation, exchange and conversion of the Notes, all in the manner and the
amounts set forth in Exhibit A. 
For purposes of Rule 144 of the Securities Act, the parties agree that
the transactions contemplated by this Agreement should be treated as a
conversion of the Notes into the Shares.


 


SECTION 3.                            REPRESENTATIONS OF THE COMPANY.  The
Company hereby represents and warrants to the Note Holders as follows:


 


3.1                                 Company Existence.  The
Company is a real estate investment trust duly organized, validly existing and
in good standing under the laws of the State of Ohio.


 


3.2                                 Company Power and Authorization. The Company has the power, authority and
legal right to execute, deliver and perform this Agreement.  The execution, delivery and performance of
this Agreement by the Company has been duly authorized by all necessary
corporate action on behalf of the Company. 
This Agreement constitutes the legal, valid and binding obligation of
the Company, enforceable against it in accordance with its terms, subject to
any applicable bankruptcy, insolvency (including all applicable laws relating
to fraudulent transfers), reorganization, moratorium or similar laws now or
hereafter in effect relating to creditors’ rights generally or to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).


 


3.3                                 Validity of Contemplated Transactions;
Consent.  The execution, delivery and performance of
this Agreement by the Company does not and will not violate, conflict with or
result in the breach of any term, condition or provision of any agreement to
which the Company is a party, or require the approval or consent of any other
party, except for such approvals or consents as have already been
obtained.  The Company does not require
the approval or consent of, and is not required to make any registration or filing
with, any Governmental Authority in connection with the execution, delivery and
performance of this Agreement by the Company, except for such approvals,
consents, registrations or filing as have already been obtained or made, or
will be obtained or made after the date hereof as required by applicable law
and set forth on Exhibit B hereto.


 


3.4.                              Issuance.  The Shares to be issued and
acquired under this Agreement, when issued by the Company to each Note Holder
and acquired by each Note Holder pursuant to the terms of this Agreement, will
(i) be duly authorized, validly issued, fully paid and nonassessable, (ii) have
been issued in compliance with all federal and state securities laws (subject
to the approvals, consents, registrations or filings set forth on Exhibit B
hereto, and (iii) except as otherwise provided herein, be free and clear of all
Liens.


 


3.5                                 Brokers, Finders, and Agents.  The
Company is not, directly or indirectly, obligated to anyone acting as broker,
finder or in any other similar capacity in connection with this Agreement or the
transactions contemplated by this Agreement.


 


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SECTION 4.                            REPRESENTATIONS OF THE NOTE HOLDERS.  Each
of the Note Holders severally represents and warrants to the Company as
follows:


 


4.1                                 Note Holders Power and Authorization. The Note Holder has the power, authority,
and legal right to execute, deliver and perform this Agreement.  The execution, delivery and performance of
this Agreement by the Note Holder has been duly authorized by all necessary
action on behalf of the Note Holder. 
This Agreement constitutes the legal, valid and binding obligation of
the Note Holder, enforceable against such Note Holder in accordance with its
terms, subject to any applicable bankruptcy, insolvency (including all applicable
laws relating to fraudulent transfers), reorganization, moratorium or similar
laws now or hereafter in effect relating to creditors’ rights generally or to
general principles of equity (regardless of whether enforcement is considered
in a proceeding in equity or at law).


 


4.2                                 Validity of Contemplated Transactions, etc.  The
execution, delivery and performance of this Agreement by the Note Holder does
not and will not violate, conflict with or result in the breach of any term,
condition or provision of any agreement to which the Note Holder is a party, or
require the approval or consent of any other party, except for such approvals
or consents as have already been obtained. 
No authorization, approval or consent of, and no registration or filing
with, any Governmental Authority is required in connection with the execution,
delivery and performance of this Agreement by the Note Holder, except for such
approvals, consents, registrations or filing as have already been obtained or
made.


 


4.3                                 Restricted Securities; No Registration.  The
Note Holder understands that the Shares are “restricted securities,” as defined
in Rule 144 adopted by the Securities and Exchange Commission under the
Securities Act (“Rule 144”),  and agrees that the Shares hereby
acquired by such Note Holder have not been registered under the Securities Act
by reason of a specific exemption therefrom, and that none of the Shares so
acquired can be offered, sold or transferred unless they are subsequently
registered under the Securities Act or the Note Holder obtains an opinion of
counsel, in form and substance satisfactory to the Company and its counsel,
that such registration is not required and that the proposed offer, sale or
transfer will be made in compliance with all applicable securities laws,
including Rule 144  or other applicable exemption from the
registration requirements of the Securities Act.  The Note Holder further acknowledges and
understands that the Company is under no obligation to register the Shares.


 


4.4                                 Sufficiency of Information.  The
Note Holder has evaluated the risks of investing in the Shares, has been
afforded the opportunity during the course of negotiating the transactions
contemplated by this Agreement to ask questions of, and to secure such
information from, the Company and its officers as the Note Holder deems
necessary to evaluate the merits of entering into such transactions, and all
information requested has been given and all questions asked were answered.


 


4.5                                 Brokers, Finders, and Agents.  The
Note Holder is not, directly or indirectly, obligated to anyone acting as
broker, finder or in any other similar capacity in connection with this
Agreement or the transactions contemplated by this Agreement.


 


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SECTION 5.                            LEGEND.  Each Note Holder understands
that certificates representing the Shares acquired by such Note Holder shall
bear the following legend:


 


THE SHARES OF BENEFICIAL
INTEREST REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED OR QUALIFIED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES
LAWS.  NEITHER THIS SECURITY NOR ANY
PORTION HEREOF OR INTEREST HEREIN MAY BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED
OR OTHERWISE DISPOSED OF UNLESS THE SAME IS REGISTERED UNDER SAID ACT AND
APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION
IS AVAILABLE AND THE COMPANY SHALL HAVE RECEIVED, AT THE EXPENSE OF THE HOLDER
HEREOF, EVIDENCE OF SUCH EXEMPTION REASONABLY SATISFACTORY TO THE COMPANY BASED
UPON THE ADVICE OF COUNSEL TO THE COMPANY.


 


SECTION 6.                            RELEASE OF SECURITY INTEREST.  Upon
receipt of the Shares, without further action on behalf of the Note Holder, the
Note shall be deemed paid in full and the Note Holder shall be deemed to have
released any security interest the Note Holder has in the Class B limited
partnership units that serve as security for the Note.  The Note Holder further acknowledges that the
Class B limited partnership units, that serve as security under the Note, have
not been pledged or encumbered in any way, and that no third party has any
claim, right, title or interest with respect to such Class B limited
partnership units.


 


SECTION 7.                            MISCELLANEOUS.


 


7.1                                 Governing Law.  This
Agreement shall be governed by and construed in accordance with the laws of the
State of Ohio applicable to contracts made and to be performed entirely within
the state without regard to principles of conflicts of law.


 


7.2                                 Entire Agreement. This Agreement and the other agreements and
instruments expressly provided for in this Agreement, together set forth the
entire understanding of the parties to this Agreement and supersede in their
entirety all prior contracts, agreements, arrangements, communications,
discussions, representations and warranties, whether oral or written, among the
parties.


 


7.3                                 No Waivers; Amendments.  No
failure or delay on the part of any party in exercising any right, power or
remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or
remedy.  The remedies provided for herein
are cumulative and are not exclusive of any remedies that may be available to
any party at law or in equity or otherwise.


 


7.4                                 Severability.  If
any provision of this Agreement shall be declared void or unenforceable by a
judicial or administrative authority, the validity of any other provision and
of the entire Agreement shall not be affected thereby.


 


7.5                                 Expenses.  Each of the parties will pay
the fees and expenses incurred by it in connection with the preparation,
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby.


 


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7.6                                 Counterparts.  This
Agreement may be executed in any number of counterparts, each of which shall
constitute an original, and all of which taken together shall constitute one
and the same document.


 


7.7                                 Further Assurances.  The
Company will, from time to time, upon the reasonable request of the Note
Holder, execute such further documents as may be reasonably required to
transfer to and to vest in the Note Holder all right, title and interest of the
Company in the Shares.


 


Signature page follows


 


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The parties hereto have executed and delivered this Agreement as of the
date first above written.


 


 


	
   

  	
  INNSUITES
  HOSPITALITY TRUST

  an Ohio real estate investment trust

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Brian
  Wirth

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Christopher
  Wirth

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Eric
  Wirth

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Pamela
  Barnhill-Wirth

  	
   

  
							



 


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EXHIBIT A


 


PROMISSORY NOTES 


 


	
  Name
  of Note Holder

  	
   

  	
  Description of Promissory Note

  	
   

  	
  Amounts

  Outstanding Being

  Converted

  	
   

  	
  Shares Being

  Issued

  	
   

  
	
  Brian
  Wirth

  	
   

  	
  Note
  dated February 2, 2004 payable to Brian Wirth, son of James Wirth,
  bearing interest at 7% per annum, secured by 58,259 Class B limited
  partnership units in the Partnership, and due in monthly principal and
  interest payments of $1,971 through February 2011.

  	
   

  	
  $117,410.00

  	
   

  	
  90,315

  	
   

  
	
  Christopher
  Wirth

  	
   

  	
  Note
  dated February 2, 2004 payable to Christopher Wirth, son of James Wirth,
  bearing interest at 7% per annum, secured by 58,259 Class B limited partnership
  units in the Partnership, and due in monthly principal and interest payments
  of $1,971 through February 2011.

  	
   

  	
  $117,410.00

  	
   

  	
  90,315

  	
   

  
	
  Eric
  Wirth

  	
   

  	
  Note
  dated February 2, 2004 payable to Eric Wirth, son of James Wirth,
  bearing interest at 7% per annum, secured by 58,259 Class B limited
  partnership units in the Partnership, and due in monthly principal and
  interest payments of $1,971 through February 2011.

  	
   

  	
  $117,410.00

  	
   

  	
  90,315

  	
   

  
	
  Pamela
  Barnhill-Wirth

  	
   

  	
  Note
  dated February 2, 2004 payable to Pamela Barnhill Wirth, daughter of
  James Wirth, bearing interest at 7% per annum, secured by 58,259 Class B
  limited partnership units in the Partnership, and due in monthly principal
  and interest payments of $1,971 through February 2011.

  	
   

  	
  $117,410.00

  	
   

  	
  90,315

  	
   

  



 


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EXHIBIT B


 


CONSENTS; FILINGS; REGISTRATIONS


 


1.                                       Approval by the shareholders of the Company
obtained at the Company’s annual meeting on December 10, 2004.


 


2.                                       Approval of Additional Listing Application by
the American Stock Exchange.


 


3.                                       Notice of Sale of Securities pursuant to
Regulation D on Form D with the Securities and Exchange Commission.


 


4.                                       Compliance with applicable state securities
laws (Blue Sky Laws).


 


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