**Exhibit10.24**

 

**PROMISSORYNOTE**

 
| $190,000.00 |   | Phoenix, Arizona   |
|-------------|--------|--------------------|
|        |   | December 7, 2001   |
|        |   | Note Doc.120701190 |

 

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 NorthernAvenue, Suite 102, Phoenix, Arizona 85020 hereby promises to pay to the orderof Rare Earth Development Company (“Payee”), an Arizona corporation, 1615 EastNorthern Avenue, Suite 102, Phoenix, Arizona 85020 or a such other place as theholder hereof may from time to time designate in writing, the principal sum ofONE HUNDRED NINETY THOUSAND AND 00/100 DOLLARS ($190,000.00), with interest onthe unpaid principal balance thereon from time to time outstanding, at the rateof seven percent (7.00%) per annum, computed on a three hundred sixty (360)-dayyear, to be due and payable in installments of principal and interest asfollows:

 

(A)                              Commencing on July 15, 2002, one annualpayment of accrued but unpaid interest on the outstanding principal balancehereunder; and on July 15, 2002 (the “Maturity date”), one payment in theamount of the then unpaid principal balance hereunder and all sums and chargesdue and unpaid by Maker (collectively, the “Note”).

 

(B)                                Upon sale or refinance of hotel/s, halfof net proceeds shall be made available at option of hotel/s to prepay on thisnote.

 

Payments shall be applied first to any charges or sums (other thanprincipal and interest) due and payable by Maker, second to accrued and unpaidinterest on the principal balance hereof, and then to further reduce theprincipal balance of this Note.

 

Maker shall gave the right any time during the term of this Note torepay all or part of the unpaid principal amount of the Note, together with anyaccrued and unpaid interest thereon any other sums or charges due hereunderwithout any prepayment premium or penalty.

 

Maker hereby waives for itself and, to the fullest extent notprohibited by applicable law, for any subsequent lienor, any right Maker maynow or hereafter have under the doctrine of marshaling of assets or otherwisewhich would require Payee to proceed against certain property before proceedingagainst any other property.

 

Maker hereby agrees that in the event part of principal or interest isnot paid when due or the entire Note is not paid when due, then the rate ofinterest on this Note shall, at the election of Payee upon ten (10) days priorwritten notice, each of which is hereby

 

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expressly waived, be increased to nine and 00/100 percent (9.00%) perannum or the highest rate for which the parties may agree under applicable law,whichever is less (the “Default Rate”). Maker shall be obligated thereafter topay interest on the then unpaid principal balance of the Note at the DefaultRate, both before and after judgment, to be computed from the due date throughand including the date of actual receipt of the overdue payment, whether apayment of interest or the entire Note. Nothing herein shall be construed as an agreement or privilege to extendthe date of the payment or any installment or the entire Note, or as a wavierof any other right or remedy accruing to Payee.

 

In the event that any regular payment of interest herein provided shallnot be received by Payee on the date such payment is due, Payee shall have theright 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 toPayee for the additional cost agreed compensation to Payee for the additionalcosts and expenses reasonable expected to be incurred by Payee by reason ofsuch nonpayment.  Maker acknowledgesthat the exact amount of such cost and expenses may be difficult, if notimpossible, to determine with certainty, and further acknowledges and confessesthe amount of such charge to be a consciously considered, good faith estimateof the actual damage to Payee by reason of such default.  The Default Rate will only accrue forperiods of delinquent installments except for such when Payee accepts latepayments of installments accompanied by a late payment charge as specifiedabove.

 

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 butunpaid interest thereon at the Default Rate and all other sums or changes duehereunder, shall become due and payable:

 

(a)                                  Maker’s failure to pay when due anyinstallment 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 otherpayment required to be under this Note, subject to any notice and applicablegrace period, if any;

 

(c)                                  Maker’s breach of any other covenant oragreement herein and such breach remains uncorrected at the expiration of anyapplicable grace period expressly provided for herein;

 

(d)                                 Any creditor’s proceeding in which Makerconsents to the appointment or a receiver or trustee for any of its property;

 

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(e)                                  if any order, judgment or decree shall beentered, without the consent of Maker, upon an application of a creditorapproving the appointment of a receiver or trustee for any of its property, andsuch order, judgment, decree, or appointment is not dismissed or stayed with anappropriate appeal bond within sixty (60) days following the entry or renditionthereof; or

 

(f)                                    if Maker (i) makes a general assignmentfor the benefit of creditors, (ii) fails to pay its debts generally as suchdebts become due, (iii) is found to be insolvent by a court of competentjurisdiction, (iv) voluntarily files a petition in bankruptcy or a petition oranswer seeking readjustment of debts under any state or federal bankruptcy orlike law, or (v) any such petition is filed against Maker and is not vacated ordismissed within sixty (60) days after filling thereof.

 

Notice of such election by Payee is hereby expressly waived as part ofthe consideration for this loan. Nothing contained herein shall be construed to restrict the exercise ofany other rights or remedies granted to Payee hereunder upon the failure ofMaker to perform any provision hereof.

 

If this Note is not paid when due, whether at maturity or byacceleration, Maker promises to pay all costs incurred by Payee, includingwithout limitation reasonable attorney’s fees to the fullest extent notprohibited by law, and all expenses incurred in connection with the protectionor realization of any collateral, whether or not suit is filed hereon or on anyinstrument granted a security interest.

 

Maker hereby expressly acknowledges and represents that theindebtedness is for a business purpose and not consumer or household purposes.

 

Maker hereby waves demand, presentment for payment, protest, notice ofprotest, notice of non-payments and any and all lack of diligence or delays incollection or enforcement of this Note, and expressly consents to any extensionof time of payment hereof, release of any party primarily or secondarily liablehereunder or any of the security for this Note, acceptance of other parties tobe liable for any of the Note or of other security therefore, or any otherindulgence or forbearance which may be made, without notice to any party andwithout in any way affecting the liability of any party.

 

No failure by Payee to exercise any right hereunder shall be construedas a waiver of the right to exercise the same or any other right any time orfrom time to time thereafter.

 

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This Note shall be construed and enforced according to, and governed bythe laws of the State of Arizona.

 

Any notice required hereunder shall be in writing, and shall be givento 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 EastNorthern 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 EastNorthern Avenue, Suite 102, Phoenix, Arizona 85020, Attn: President (Tel. (602)944-1500, Fax (602) 678-0281), with a copy to James B. Aronoff, Esq., ThompsonHine & Flory, LLP, 3900 Key center, 127 Public Square, Cleveland, Ohio44114 (Tel. (216) 566-5500, Fax (216) 566-5800).

 

Any party may, be given notice in writing to designate another addressas a place for service of notice. Such notices shall be deemed to be receivedwhen delivered, if delivered in person, or seven (7) business days afterdeposited in the United States mails, if mailed as herein above provided.

 

By acceptance of this Note, Payee agrees that, upon payment in full ofthe then unpaid principal balance of this Note, together with all unpaidinterest and other sums payable to Payee under this Note, (a) Note shall befully satisfied, (b) Payee shall promptly mark this Note as being paid in full,satisfied and discharged and shall return the same to 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 |
|        |                                              |        |  |

 

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