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Exhibit 10.4
PROMISSORY NOTE
$14,000,000.00 Cincinnati, Ohio
November 26, 1996
This Promissory Note ("Note") is made and entered into on the date set
forth above by THOMAS EDISON INN, INCORPORATED, GRAND HARBOR RESORT INC., and
ST. CLAIR INN, INC., to the order of GREAT AMERICAN LIFE INSURANCE COMPANY, an
Ohio corporation, (hereinafter, together with its permitted successors and
assigns,"Lender").
This Note has been executed and delivered in connection with a certain Loan
Agreement dated as of November 26, 1996, among each of the undersigned, MHG Food
Service Inc., Grand Harbor Yacht Club Inc., Meritage Hospitality Group Inc. and
Lender (the "Loan Agreement") and is subject to the terms and conditions of the
Loan Agreement. All capitalized terms used herein shall have the meanings
assigned to them in the Loan Agreement unless the context hereof requires
otherwise.
FOR VALUE RECEIVED, the undersigned, jointly and severally, hereby promises
to pay to the order of Lender the principal sum of Fourteen Million and 00/100
Dollars ($14,000,000), together with interest at the annual rate of ten and
3/10ths percent (10.3%); PROVIDED, HOWEVER, in the event and during the
continuation of a violation by the Borrowers of certain financial covenants
contained in the Loan Agreement such interest rate shall be increased as
provided in Section 2.5 of the Loan Agreement. Commencing on January 1, 1997,
the undersigned shall pay the Lender principal and interest payments of One
Hundred Thirty-Seven Thousand Eight Hundred Ninety-Seven and 42/100 Dollars
($137,897.42) and shall continue to pay such amount on the first day of each
month thereafter until December 1, 2003 ("Maturity Date") when the entire
remaining unpaid principal balance and all accrued and unpaid interest shall be
due and payable.
Any amount of principal and interest which is not paid when due, whether at
stated maturity, by acceleration or otherwise, shall bear interest, payable on
demand at the Default Rate, or such lesser amount as shall be the maximum rate
legally enforceable.
Principal and interest payments shall be made in lawful money of the United
States of America and shall be divided equally and payable 50% to the Lender at
Bank of New York, Acct. No. 141001, and 50% to Great American Insurance Company
at Bankers Trust Company, Acct. No. 97-960, or at such other address as the
holder hereof may give to the Borrower, in immediately available funds.
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This Note is secured by mortgages on real estate and improvements owned by
the undersigned and located in St. Clair and Ottawa Counties, Michigan and more
fully described in the Open-End Mortgages and Assignments of Rents and Profits
dated of even date herewith, initially and is further secured by the Loan II
Collateral as described in the Loan Agreement.
Except as otherwise provided herein, all payments received by Lender from
the undersigned shall be applied as provided in the Loan Agreement. The
undersigned may, at their option, voluntarily prepay this Note in whole at any
time, or in part as provided for in Section 2.5 of the Loan Agreement.
In case of an Event of Default, the entire unpaid principal amount of this
Note, and all interest due hereon, may become immediately due and payable.
Each of the undersigned hereby: (i) waives presentment, demand, notice of
demand, protest, notice of protest and notice of nonpayment and any other notice
required to be given by law in connection with the delivery, acceptance,
performance, default or enforcement of this Note, of any indorsement or guaranty
of this Note; and (ii) consents to any and all delays, extensions, renewals or
other modifications of this Note or waivers of any term hereof or the failure to
act on the part of Lender or any indulgence shown by Lender, from time to time
and in one or more instances, (without notice to or further assent from the
undersigned) and agrees that no such action, failure to act or failure to
exercise any right or remedy, on the part of Lender shall in any way affect or
impair the obligations of the undersigned or be construed as a waiver by Lender
of, or otherwise affect, any of Lender's rights under this Note, under any
indorsement or guaranty of this Note.
This Note is made and delivered in the City of Cincinnati, Ohio and shall
be governed by and construed in accordance with the laws of the State of Ohio.
Each of the undersigned hereby designates all courts of record sitting in
Cincinnati, Ohio and having jurisdiction over the subject matter, state and
federal, as forums where any action, suit or proceeding in respect of or arising
from or out of this Note, its making, validity or performance, may be prosecuted
as to all parties, their successors and assigns, and by the foregoing
designation the undersigned consents to the jurisdiction and venue of such
courts.
EACH OF THE UNDERSIGNED HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR
FEDERAL COURT LOCATED WITHIN THE COUNTY OF HAMILTON, STATE OF OHIO AND
IRREVOCABLY AGREES THAT, SUBJECT TO LENDER'S ELECTION, ALL ACTIONS OR
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS NOTE, THE OTHER LOAN DOCUMENTS OR
ANY OBLIGATION SHALL BE LITIGATED IN SUCH COURTS. EACH OF THE UNDERSIGNED
ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS RESPECTIVE PROPERTIES, GENERALLY
AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS, AND IRREVOCABLY AGREES
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TO BE BOUND BY ANY OTHER LOAN DOCUMENT OR SUCH OBLIGATION. EACH OF THE
UNDERSIGNED DESIGNATES AND APPOINTS CT CORPORATION SYSTEM AND SUCH OTHER
PERSONS AS MAY HEREAFTER BE SELECTED BY EACH OF THE UNDERSIGNED WHICH
IRREVOCABLY AGREE IN WRITING TO SO SERVE AS ITS AGENT TO RECEIVE ON ITS BEHALF
SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT, SUCH SERVICE
BEING HEREBY ACKNOWLEDGED BY THE UNDERSIGNED TO BE EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT. A COPY OF ANY SUCH PROCESS SO SERVED SHALL BE MAILED
BY REGISTERED MAIL TO THE UNDERSIGNED AT ITS RESPECTIVE ADDRESS PROVIDED IN THE
LOAN AGREEMENT EXCEPT THAT UNLESS OTHERWISE PROVIDED BY APPLICABLE LAW, ANY
FAILURE TO MAIL SUCH COPY SHALL NOT AFFECT THE VALIDITY OF SERVICE OF PROCESS.
IF ANY AGENT APPOINTED BY ANY OF THE UNDERSIGNED REFUSES TO ACCEPT SERVICE,
EACH OF THE UNDERSIGNED HEREBY AGREES THAT SERVICE UPON IT BY MAIL SHALL
CONSTITUTE VALID SERVICE OF PROCESS. NOTHING HEREIN SHALL AFFECT THE RIGHT TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF
LENDER TO BRING PROCEEDINGS AGAINST THE UNDERSIGNED IN THE COURTS OF ANY OTHER
JURISDICTION.
EACH OF THE UNDERSIGNED AND LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO
A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
NOTE, ANY OF THE LOAN DOCUMENTS, OR ANY DEALINGS BETWEEN THEM RELATING TO THE
SUBJECT MATTER OF THIS LOAN TRANSACTION AND THE LENDER/BORROWER RELATIONSHIP
THAT IS BEING ESTABLISHED. EACH OF THE UNDERSIGNED AND LENDER ALSO WAIVE ANY
BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE
REQUIRED OF LENDER. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING
OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE
SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS. EACH OF THE UNDERSIGNED AND LENDER ACKNOWLEDGE THAT THIS
WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH
HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS NOTE AND THAT EACH WILL
CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH OF THE
UNDERSIGNED AND LENDER FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS
WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES
ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THE WAIVER SHALL APPLY TO ANY
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SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS NOTE, THE
LOAN DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOAN OR
THE NOTE. IN THE EVENT OF LITIGATION, THIS NOTE MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.
IN WITNESS WHEREOF, each of the undersigned has caused this Note to be
executed by its duly authorized officer on the day and year first above written.
THOMAS EDISON INN, INCORPORATED
By:/s/ Christopher B. Hewett
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Christopher B. Hewett, President
GRAND HARBOR RESORT INC.
By:/s/ Christopher B. Hewett
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Christopher B. Hewett, President
ST. CLAIR INN, INC.
By:/s/ Christopher B. Hewett
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Christopher B. Hewett, President