Document:

Exhibit 10.5

    Exhibit
      10.5

    

    PROMISSORY
      NOTE

    

    
      	
              Borrower:

            	
              RRF
                Limited Partnership

              1615
                E Northern Avenue, #102

              Phoenix,
                AZ 85020

            	
              Lender:

            	
              Rare
                Earth Financial, L.L.C.

              1615
                E Northern Avenue, #102

              Phoenix,
                AZ 85020

            

    

    

    

    PROMISE
      TO PAY: RRF Limited Partnership (“Borrower”) promises to pay Rare Earth
      Financial, L.L.C. (“Lender”), or order, the principal amount of $700,000, 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 March 1, 2008. In addition, Borrower will pay regular
      monthly payments of all accrued unpaid interest due as of each payment date,
      beginning on April 1, 2006, with all subsequent interest payments to be due
      on
      the same day of each month thereafter. Payments shall be applied first to any
      charges or sums (other than principal and interest) due and payable by Borrower,
      second to accrued and unpaid interest on the principal balance hereof, and
      then
      to further reduce the principal balance of this promissory note
      (“note”).

    

    INTEREST
      RATE: The interest rate of this note shall be fixed at 7.0% per
      annum.

    

    INTEREST
      CALCULATION: The annual interest rate for this note is computed on a 360-day
      year.

    

    COLLATERAL:
      Borrower acknowledges that this note is secured by 49.0% of the units held
      by
      RRF Limited Partnership in Tucson Saint Mary’s Suite Hospitality
      L.L.C.

    

    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 are to be directed to the Lender’s office shown above. The
      following persons are authorized to request advances on the line of credit
      on
      behalf of the Borrower: Chief Financial Officer and Executive Vice President.
      Borrower agrees to be liable for all sums advanced in accordance with the
      instructions of the authorized persons. Lender will have no obligation to
      advance funds under this note if: (A) Borrower is in default under this note;
      or
      (B) Borrower ceases doing business or is insolvent.

    

    PREPAYMENT:
      At any time during the term of this note, Borrower may prepay 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.

    

    SUBORDINATION:
      The Lender agrees that (i) the indebtedness evidenced by this note is and shall
      be subordinated in right of payment, to the extent and in the manner provided
      herein, to the prior payment in full of any indebtedness under the Trust's
      loans
      or lines of credit, whether heretofore or hereafter made or entered into, with
      commercial banks or other entities engaged principally in the business of
      lending money (each a "Senior Lender"), and (ii) the security interest referred
      to above in the paragraph titled "Collateral" is and shall be subject and
      subordinate in all respects to any liens, terms, covenants and conditions of
      any
      secured loans or lines of credit with Senior Lenders, whether heretofore or
      hereafter made or entered into, and to all advances thereunder, whether
      heretofore or hereafter made pursuant to such loans or lines of credit. The
      Lender agrees that during the term of this note it will not commence,
      or

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    join
      with
      any other creditor in commencing any bankruptcy, reorganization, arrangement,
      insolvency or liquidation proceedings with respect to the Borrower, without
      each
      Senior Lender's prior written consent.

    

    Borrower
      hereby waives for itself and, to the fullest extent not prohibited by applicable
      law, for any subsequent lienor, any right Borrower may now or hereafter have
      under the doctrine of marshaling of assets or otherwise which would require
      Lender to proceed against certain property before proceeding against any other
      property.

    

    DEFAULT:
      Borrower hereby agrees that in the event part of the 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 Lender upon ten (10) days prior
      written notice, 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”). Borrower 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 wavier of any other right or remedy accruing to
      Lender.

    

    In
      the
      event that any regular monthly installment of principal and interest herein
      provided shall not be received by Lender on the date such payment is due, Lender
      shall have the right to assess Borrower a late payment charge in the amount
      of
      one-half percent (.5%) of such overdue monthly installment, which shall become
      due to Lender for the additional cost incurred by Lender by reason of such
      nonpayment. The Default Rate will only accrue for periods of delinquent
      installments except for when Lender 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 Lender, the entire unpaid
      principal balance of the note, together with all accrued but unpaid interest
      thereon at the Default Rate and all other sums or charges due hereunder, shall
      become due and payable:

    

    
      	 	
              (a)

            	
              Borrower’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)

            	
              Borrower’s
                failure to pay when due any other payment required to be paid under
                this
                note, subject to any notice and applicable grace period, if
                any;

            

    

    

    
      	 	
              (c)

            	
              Borrower’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 Borrower 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
                Borrower, 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 if Borrower (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

            

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    like
      law,
      or (v) any such petition is filed against Borrower and is not vacated or
      dismissed within sixty (60) days after filing thereof;

    

    
      	 	
              (f)

            	
              Borrower
                and Lender agree that no event of default has occurred by effect
                of (a)
                through (e) above if the event is a result of law or violates any
                other
                agreements agreed upon by Borrower and
                Lender.

            

    

    

    The
      Lender agrees to deliver a written notice of each Event of Default hereunder
      to
      each Senior Lender within five business days after the occurrence of such Event
      of Default. Each Senior Lender, individually or collectively, shall have the
      right, but not the obligation, to cure any such Event of Default within the
      same
      time period for curing a default which is given to the Borrower under this
      note,
      except that the Senior Lender's time period for cure shall begin on the date
      on
      which it receives notice of the Event of Default. All amounts advanced or
      expended by the Senior Lender to cure an Event of Default shall be deemed to
      have been advanced by the Senior Lender pursuant to the terms of its loan or
      line of credit documents. If an Event of Default occurs and is continuing,
      the
      Lender agrees that, without each Senior Lender's prior written consent, it
      will
      not exercise any rights or remedies it may have under this note, including,
      but
      not limited to accelerating this note, appointing (or seeking the appointment
      of) a receiver or exercising any other rights or remedies hereunder unless
      and
      until it has given each Senior Lender at least 30 days' prior written
      notice.

    

    Notice
      of
      election of remedies by Lender 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 Lender
      hereunder upon the failure of Borrower to perform any provision
      hereof.

    

    If
      this
      note is not paid when due, whether at maturity or by acceleration, Borrower
      promises to pay all costs incurred by Lender, 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 granting
      a
      security interest.

    

    Borrower
      hereby expressly acknowledges and represents that the indebtedness is for a
      business purpose and not consumer or household purposes.

    

    Borrower
      hereby waives 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 therefor, 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 Lender 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 by personal delivery or certified mail, postage prepaid, return
      receipt requested, as follows:

    

    if
      to
      Lender, then addressed to Lender 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);

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    if
      to
      Borrower, then addressed to Borrower at 1615 East Northern Avenue, Suite 102,
      Phoenix, Arizona 85020, Attn: Chief Financial Officer (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, Lender 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 Lender under this note, (a) this note shall be fully
      satisfied, and (b) Lender shall promptly mark this note as being paid in full,
      satisfied and discharged and shall return the same to Borrower.

    

    Dated: March
      1,
      2006

    

    RARE
      EARTH FINANCIAL, L.L.C., an RRF
      LIMITED PARTNERSHIP, a 

    Arizona
      limited liability company  Delaware
      limited partnership,

    By
      InnSuites Hospitality Trust, General

    Partner,
      an Ohio real estate investment trust

    

    

    

    By: /s/
      James F. Wirth   By: /s/
      Marc E. Berg   

    Name:
      James F. Wirth    Name:
      Marc E. Berg

    Title:
      Manager    Title:
      Executive Vice-President

     

     

     

     

     

    
       

      
        
           

        

        
          4Exhibit 10.6

    Exhibit
      10.6

    

    SALES
      AND PROJECT COORDINATION AGREEMENT

    

    This
      Sales and Project Coordination Agreement (this “Agreement”) is made as of the
      1st day of March, 2006, by and between Rare Earth Development Company, an
      Arizona corporation, and InnSuites Hospitality Trust, an Ohio real estate
      investment trust.

    

    WHEREAS,
      Rare Earth Development Company is owned by the Wirth family, including Pam
      Barnhill, Division Vice President of Rare Earth Development Company and daughter
      of James Wirth;

    

    WHEREAS,
      Rare Earth Development Company, through its division Rare Earth Realty, is
      a
      licensed Arizona Real Estate Broker and a Multiple Listing Service (MLS)
      agent;

    

    WHEREAS,
      James Wirth is President of both Rare Earth Development Company and InnSuites
      Hospitality Trust; and

    

    WHEREAS,
      InnSuites Hospitality Trust is in the process of converting certain hotel units
      into condo-hotel units (the “Project”).

    

    NOW,
      THEREFORE, subject to the terms, conditions, covenants and provisions of this
      Agreement, Rare Earth Development Company and InnSuites Hospitality Trust
      mutually covenant and agree as follows: 

    

    I. SERVICES
      PROVIDED

    

    Upon
      the
      terms and subject to the conditions of this Agreement, Rare Earth Development
      Company will provide the following services to InnSuites Hospitality Trust
      with
      respect to hotel properties owned or controlled by InnSuites Hospitality Trust
      and designated by its Board of Trustees for conversion into condo-hotel
      units:

    

    A. Project
      coordination, including, without limitation, working with engineers, architects,
      consultants, contractors and government officials, and applying for and
      obtaining required approvals, licenses and permits for the Project.

    

    B. Marketing
      coordination, including, without limitation, developing and placing
      advertisements in an cost-effective manner. The cost of such advertisements
      will
      be borne by InnSuites Hospitality Trust.

    

    C. Sales,
      including Multiple Listing Service (MLS) listings. 

    

    D. Financing
      and closing coordination with individual buyers, including, without limitation,
      coordination of the Arizona Department of Real Estate subdivision approval
      with
      the title company. 

    

    

    

    II. CONSIDERATION

    

    A. InnSuites
      Hospitality Trust agrees to pay Rare Earth Development Company a fee equal
      to
      6.0% of the sales price of each condo-hotel unit, payable contingent upon the
      sale and closing of the related condo-hotel unit. 

    

    B. Rare
      Earth Development Company agrees to split any fees with unaffiliated brokers
      on
      a 50/50 basis. 

    

    C. If
      InnSuites Hospitality Trust provides seller financing for a sale of a
      condo-hotel unit, Rare Earth Development Company will defer the payment of
      its
      brokerage fee over a two-year period (with 1/3 payable at closing, 1/3 payable,
      with interest at the contract rate, on the first anniversary of closing, and
      1/3
      payable, with

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    interest
      at the contract rate, on the second anniversary of closing, provided, in each
      case, that the buyer is not in default of its obligations to InnSuites
      Hospitality Trust).

    

    III. TERM

    

    This
      Agreement shall become effective as of the date hereof and shall remain in
      force
      until March 1, 2008. This Agreement may be terminated prior to that date by
      either party upon 90 days prior written notice to the other party.

    

    IV. MISCELLANEOUS

    

    A. This
      Agreement constitutes the entire agreement between the parties with respect
      to
      the subject matter hereof and supersedes all previous negotiations, commitments
      and writings with respect to such subject matter.

    

    B. This
      Agreement may be executed in a number of identical counterparts. If so executed,
      each of such counterparts is to be deemed an original for all purposes and
      all
      such counterparts shall, collectively, constitute one agreement.

    

    C. The
      validity, interpretation and performance of this Agreement and any dispute
      connected herewith shall be governed and construed in accordance with the laws
      of the State of Arizona.

    

    D. This
      Agreement shall not be assignable, in whole or in part, directly or indirectly
      without the prior written consent of the other party.

    

    [Remainder
      of Page Left Blank Intentionally]

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

      IN
        WITNESS WHEREOF,
        the
        parties have executed this Agreement as of the date first written
        above.

       

      
        	
                RARE
                  EARTH DEVELOPMENT COMPANY

                 

                 

                 

                By: /s/
                  James F. Wirth  

                James
                  F. Wirth

                President

                 

              	
                INNSUITES
                  HOSPITALITY TRUST

                 

                 

                 

                By: /s/
                  Marc E. Berg  

                Marc
                  E. Berg

                Executive
                  Vice
                  President

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