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Exhibit 10.17
WAIVER, THIRD AMENDMENT AND
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MODIFICATION AGREEMENT
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THIS WAIVER, THIRD AMENDMENT AND MODIFICATION AGREEMENT is dated as of
the 2nd day of September, 1998 by and among GREAT AMERICAN LIFE INSURANCE
COMPANY (the "Lender") and MERITAGE HOSPITALITY GROUP INC. ("MHG"), SC INN INC.,
formerly known as St. Clair Inn, Inc. ("SCI"), GHR INC., formerly known as Grand
Harbor Resort Inc. ("GHR"), XXXXXX XXXXXX INN, INCORPORATED ("TEI"), MHG FOOD
SERVICE INC. ("Food Service") and GHYC INC., formerly known as Grand Harbor
Yacht Club Inc. ("GHYC") (MHG, SCI, GHR, TEI, Food Service and GHYC are
collectively referred to as the "Obligors").
WITNESSETH:
WHEREAS, the Lender and the Obligors are parties to a Loan Agreement
dated November 26, 1996, as amended by Amendment No. 1 dated as of May 23, 1997
and Waiver Second Amendment and Modification Agreement dated September 30, 1997
(collectively, the "Loan Agreement"); and
WHEREAS, the Obligors have requested and the Lender has agreed to waive
certain covenants and release liens in certain collateral securing the
obligations under the Loan Agreement as hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the receipt and sufficiency of which is hereby acknowledged,
the parties hereby agree as follows:
1. WAIVER OF COVENANTS. Obligors have informed Lender that Captec
Financial Group, Inc. has agreed to provide up to an Eleven Million Nine Hundred
Fifty Thousand and 00/100 Dollars ($11,950,000) loan to Meritage Hospitality
Group, Inc. (the "Captec Loan") to finance the purchase, construction and
renovation of certain Wendy's restaurants. Lender hereby waives compliance with
the covenant set forth in Sections 4.2(c) of the Loan Agreement solely with
respect to the Captec Loan. In exchange for Lender's consent, Obligors agree
that on or before September 30, 1998, Obligors shall pay to Lender a minimum of
Two Million Two Hundred Thousand and 00/100 Dollars ($2,200,000), which shall be
applied to Loan II. This waiver applies only to Section 4.2(c) of the Loan
Agreement for the purpose referenced above and does not otherwise modify or
waive any other covenant or agreement contained in the Loan Agreement.
2. RELEASE OF COLLATERAL. Obligors have requested the release of liens
encumbering Xxxxxx Xxxxxx Inn and parcels adjacent thereto in exchange for less
than the Release Price set forth in the Loan Agreement. Lender hereby agrees to
the release of the liens provided Lender receives Nine Million Six Hundred
Seventy-Five Thousand One Hundred Ninety and 42/100 ($9,675,190.42), which shall
be applied to Loan I and Loan III and an assignment of all collateral documents
executed in connection with the sale of Xxxxxx Xxxxxx Inn to Xxxxxxxx/Xxxxxxx
Enterprises, LLC, including, but not limited to, an Assignment of a Promissory
Note and Mortgage in the original principal
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amount of Two Million and 00/100 Dollars ($2,000,000) executed by
Xxxxxxxx/Xxxxxxx Enterprises, LLC (the "REH Note"), an Assignment of Guaranty,
Assignment of Pledge Agreements, and Assignment of a Security Agreement.
3. MANDATORY PREPAYMENT. Obligors agree that upon the payment of any
principal on the REH Note by Xxxxxxxx/Xxxxxxx Enterprises, LLC at maturity or
otherwise, all such payments shall be used to prepay Loan II except for
prepayments made on or before September 30, 1998 in connection with the closing
prorations of the sale of Xxxxxx Xxxxxx Inn in an amount not to exceed $300,000,
which shall be used to reduce the outstanding principal amount of the Note.
4. RATIFICATION. Except as amended and modified hereby, the terms of
the Loan Agreement referred to above are hereby ratified and confirmed as of
this date.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Waiver, Third
Amendment and Modification Agreement as of the day and year first above written.
WITNESSES: GREAT AMERICAN LIFE INSURANCE
COMPANY
/s/ Xxxx X. Xxxx
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/s/ Xxxxxxx X. Xxxxx BY: /s/Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx,
Senior Vice President
MERITAGE HOSPITALITY GROUP INC.
/s/ X. Xxxxxxx
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/s/ Xxxxx X. Xxxxxxxx BY: /s/ Xxxxxxxxxxx X. Xxxxxx
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Xxxxxxxxxxx X. Xxxxxx, President
SC INN INC., formerly known as
St. Clair Inn, Inc.
/s/ X. Xxxxxxx
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/s/ Xxxxx X. Xxxxxxxx BY: /s/ Xxxxxxxxxxx X. Xxxxxx
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Xxxxxxxxxxx X. Xxxxxx, President
GHR INC., formerly
known as Grand
Harbor Resort Inc.
/s/ X. Xxxxxxx
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/s/ Xxxxx X. Xxxxxxxx BY: /s/ Xxxxxxxxxxx X. Xxxxxx
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Xxxxxxxxxxx X. Xxxxxx, President
XXXXXX XXXXXX INN, INCORPORATED
/s/ X. Xxxxxxx
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/s/ Xxxxx X. Xxxxxxxx BY: /s/ Xxxxxxxxxxx X. Xxxxxx
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Xxxxxxxxxxx X. Xxxxxx, President
MHG FOOD SERVICE INC.
/s/ X. Xxxxxxx
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/s/ Xxxxx X. Xxxxxxxx BY: /s/ Xxxxxxxxxxx X. Xxxxxx
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Xxxxxxxxxxx X. Xxxxxx, President
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GHYC INC., formerly known as
Grand Harbor Yacht Club Inc.
/s/ X. Xxxxxxx
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/s/ Xxxxx X. Xxxxxxxx BY: /s/ Xxxxxxxxxxx X. Xxxxxx
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Xxxxxxxxxxx X. Xxxxxx, President
