Document:

Exhibit

10.6

 

PROMISSORY NOTE

 

	

  $1,947,000.00

  	

   

  	

  Phoenix, Arizona

  
	

   

  	

   

  	

  July 15, 2002

  
	

   

  	

   

  	

  Note Doc.0715021947

  

 

 

FOR VALUED RECEIVED, and legally bound hereby, INNSUITES HOSPITALITY

TRUST (“Maker”), 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 James Wirth (“Payee”), 5700 East Glen Drive, Paradise Valley,

Arizona 85253 or such other place as the holder hereof may from time to time

designate in writing, the principal sum of ONE MILLION NINE HUNDRED FORTY SEVEN

THOUSAND AND NO/100 DOLLARS ($1,947,000.00), bearing interest on the unpaid

principal balance 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 to the maturity date on July 15, 2006 (the “Maturity

Date”) as follows:

 

(A)                              Commencing on July 15, 2003, interest of

all accrued but unpaid interest on the outstanding principal balance hereunder

shall be added to the outstanding principal balance.

 

(B)                                Commencing on August 15, 2003 and

thereafter, monthly principal and interest payments in the amount of

$13,860.18, (see Attachment A). On the Maturity Date, one payment shall be due

and payable in the amount of the then unpaid principal and interest and all

other sums and charges due and unpaid by Maker (collectively, the “Note”).

 

Subject to the requirements and approval of Irwin Union Bank and

subject to the cash flow of Maker, upon the sale or refinance of any Trust

hotel, twenty (20%) percent of the net proceeds shall be made available at the

option of Payee to pay or pre-pay principal and/or accrued but unpaid interest

on the outstanding principal balance on this 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 and then applied to further reduce the

principal balance of this Note.

 

This Promissory Note

replaces the following ten separate Promissory Notes, each of which has been

“rolled” into this Promissory Note.

  1.           $   600,000              Dated

August 1, 2000

  2.           $     50,000              Dated

August 16, 2000

  3.           $   602,000              Dated

August 29, 2000

  4.           $   350,000              Dated

September 8, 2000

  5.           $   200,000              Dated

September 25, 2000

  6.           $     65,000              Dated

October 19, 2000

  7.           $     50,000              Dated

October 23, 2000

  8.           $   145,000              Dated

November 10, 2000

 

 

1

 

 

 9.            $   574,000              Dated

December 8, 2000

                   - 719,000              Principal Paid Down January 12

thru February 1, 2001

10.           $     30,000              Dated

April 27, 2001

Total       $1,947,000

 

Maker may exercise the

right at 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 and 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 and Payee agree

with the prior approval of Payee that the Note can be automatically extended

for a period of three years for the outstanding principal balance at the

Maturity Date. 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 of or the entire Indebtedness, or as a wavier 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;

 

 

2

 

 

(b)                                 Maker’s failure to pay when due any other

sums required to be paid 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.

 

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 (“Note”) 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 

 

 

3

 

 

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 by certified mail,

postage prepaid, return receipt requested, as follows:

 

                if to Payee, then

addressed to Payee at 5700 East Glen Drive, Paradise Valley, Arizona 85253,

(Tel.(602) 596-0224, Fax (602) 596-0225), with a copy to James W. Reynolds, Esq.,

Dillingham & Reynolds L.L.P., 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 & Flory, 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 or 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 covenants and 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.

 

	

   

  	

   

  	

   

  	

   

  	

  INNSUITES HOSPITALITY TRUST,

  
	

   

  	

   

  	

   

  	

   

  	

  an Ohio real estate investment trust

  

 

 

	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  By:

  	

  /s/ Marc E. Berg

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  Name: Marc E. Berg

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  Title: Executive Vice-President

  	

   

  
										

 

 

4Exhibit

10.7

 

PROMISSORY NOTE

 

 

	

  $438,000

  	

   

  	

  July 25, 2002

  

 

 

FOR VALUED RECEIVED, and

legally bound hereby, INNSUITES HOSPITALITY TRUST (“Maker”), an Ohio real

estate investment trust, having an office at 1615 East Northern Avenue, Suite

102, Phoenix, Arizona 85020 hereby promises to pay to Hulsey Hotels Corporation

(“Note Holder”) or order and address as specified below the principal sum of

FOUR HUNDRED THIRTY EIGHT THOUSAND AND 00/100 DOLLARS ($438,000), 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)                              $438,000 amortized over 48 months at 7%

interest ($10,488.46/month). This Note is non-recourse secured by 225,390 RRF

Limited Partnership Class B units. Monthly installments of interest only to

begin August 1, 2002.  Monthly

installments of principal and interest to begin on April 1, 2003.

 

(B)                                Payments to be made payable to:

Hulsey Hotels Corporation

1615 E. Northern Avenue,

Suite 102

Phoenix, AZ 85020

 

The 225,390 RRF Limited Partnership Class B units will remain as

security for the unpaid balance on the Note. Payments made under this note

shall be subject to any current bank or mortgage covenants.

 

At the option of the Note

Holder, late charges upon written notice are assessed as follows:

10 days late, $50

penalty

35 days late, $150

penalty

Over 35 days late,

Note Holder could declare the note in default and call the entire amount due.

Should default be

declared, units proportionate to unpaid balance will be returned to Note

Holder.

 

Principal and interest

payable in lawful money of the United States.

 

If legal proceedings are

entered into to recover on this Note, the undersigned agree(s) to pay such sum

as the Court may fix as attorney’s fees.

 

The Makers and endorsers

hereof severally waive diligence, demand, presentment for payment and protest,

and consent to the extension or time of payment of this Note without notice.

 

 

 

	

   

  	

   

  	

   

  	

  INNSUITES HOSPITALITY TRUST,

  
	

   

  	

   

  	

   

  	

  an Ohio real estate investment trust

  

 

 

 

	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  By:

  	

  /s/ Marc E. Berg

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  Name: Marc E. Berg

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  Title: Secretary Treasurer

  	

   

  
										

 

 

1

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