Exhibit 10.1
MORTGAGE NOTE
June 16, 1998
$1,375,000.00
For value received, S.C. LAND ACQUISITIONS, L.L.C., a Michigan limited
liability company (the "Borrower"), promises to pay to the order of MERITAGE
HOSPITALITY GROUP INC., a Michigan corporation (the "Lender"), at their office
located at 00 Xxxxx Xxxxxx, X.X., Xxxxx 000, Xxxxx Xxxxxx, Xxxxxxxx 00000, or at
such other place as the holder hereof may from time to time specify, the
principal sum of ONE MILLION THREE HUNDRED SEVENTY FIVE THOUSAND DOLLARS
($1,375,000.00), together with interest on any part thereof unpaid at the rate
of ten and eight tenths percent (10.8%) per annum, except as set forth below in
the event of default. Interest only will be due and payable monthly commencing
on July 16, 1998, and continuing on the 16th day of each month thereafter
through and including June 16, 1999, provided, however, that if the term of this
Mortgage Note is extended as described below, then the monthly interest payments
shall continue through and including December 16, 1999. The indebtedness
evidenced by this Mortgage Note may be prepaid, in whole or in part, at any time
without notice and without penalty or premium. The entire principal balance due
hereunder, unless earlier prepaid in accordance with the terms hereof, shall be
due and payable, together with all accrued and unpaid interest, on June 16,
1999, provided, however, that if the principal balance of this Mortgage Note is
reduced to FIVE HUNDRED THOUSAND DOLLARS ($500,000) or less on June 16, 1999,
then the Borrower shall, by providing Lender with written notice by June 16,
1999, have the right to extend the term of the Mortgage Note by six (6) months,
during which time all terms set forth in this Mortgage Note shall remain in
effect except for the right to further extend the term of the Mortgage Note.
This Mortgage Note is secured by a First Mortgage of even date herewith which
is a lien upon the real property more particularly described in Exhibit A
attached hereto and other collateral described in the First Mortgage, and shall
be construed in accordance with the laws of the State of Michigan.
Xxxx Xxxxxxxx, individually, hereby personally guarantees Borrower's obligation
under this Mortgage Note.
During the term of this Mortgage Note, Borrower shall immediately pay to the
Lender, as a principal prepayment of this Mortgage Note, the sum of THIRTY FIVE
THOUSAND DOLLARS ($35,000) upon the sale of any condominium unit identified in
Exhibit A. Upon such prepayment, Lender will release such condominium unit from
the lien of the First Mortgage. In addition, during the term of this Mortgage
Note, Borrower shall immediately pay to the Lender, as a principal prepayment of
this Mortgage Note, all gross rents and profits received from the future rental
or lease of any condominium unit identified in Exhibit A (i.e. all gross rents
and profits received by Borrower except the prorated gross rents received by
Borrower in conjunction with the closing of the Purchase and Sale Agreement
dated May 27, 1998 by and between Grand Harbor Yacht Club Inc. and Borrower).
The Borrower shall pay to the holder hereof a late charge equal to four percent
(4%) of each payment due hereunder that is not received by the holder hereof
within ten (10) days after the due
date of such payment, but in no event shall the late charge exceed FIVE HUNDRED
DOLLARS ($500.00) per late payment. If any payment due under this Mortgage Note
remains unpaid after the expiration of thirty (30) days from the due date, and
during any period this Mortgage Note otherwise is in default, the outstanding
principal amount hereof shall bear interest for the entire period during which
interest is then unpaid at a rate which is equal to two percent greater than the
interest rate otherwise charged hereunder.
Upon default in making any payment when due and the continuation of such
default for five (5) days or more after written notice, or upon default in the
performance or observance of any of the other terms, agreements, covenants or
conditions contained in the Mortgage or any related documents given as security
for the payment hereof and the continuation of such default for fifteen (15)
days or more after written notice, the entire principal of this Mortgage Note
remaining at that time unmatured, together with the accrued interest thereon,
shall, at the election of the holder hereof and without notice of such election
and without demand or presentment, become immediately due and payable, anything
contained herein or in the Mortgage described below to the contrary
notwithstanding. This Mortgage Note shall be deemed in default immediately upon
the Borrower's failure to comply with any provision of this Mortgage Note and/or
the Mortgage or any other document given as security for the payment hereof.
If any default is made as hereinabove set forth, neither the failure of the
holder hereof promptly to exercise its right to declare the outstanding
principal and accrued and unpaid interest hereunder to be immediately due and
payable, nor failure to exercise any other right or remedy the holder may have
for default, nor the acceptance by the holder of late payments, nor the failure
of the holder to demand strict performance of any obligations of the maker of
any other person who may be liable hereunder, shall constitute a waiver of any
such default or remedies. Further, acceptance by the holder of partial payments
following due acceleration of the indebtedness evidenced hereby shall not
constitute a waiver by the holder of the acceleration of such indebtedness.
The Borrower, and any other person who may be liable hereunder in any capacity,
agrees to pay all costs of collection, including a reasonable attorneys' fee, in
case the principal of the Mortgage Note or any payment of interest thereon is
not paid when due, or in case it becomes necessary to protect the security for
this Mortgage Note, whether suit is brought or not.
In no event shall the Borrower be required to make any payment hereunder which
would violate any applicable law regulating or limiting the rate of interest
that the holder of this Mortgage Note may lawfully collect. If any such payment
is made by or for the account of the Borrower, such payment shall, to the extent
it exceeds the maximum payment that the holder hereof lawfully may collect, be
applied toward reduction of the principal balance hereof.
The obligations of the Borrower under the Note and the Guarantor under the
Guaranty are absolute and unconditional, and shall not be subject to any
defense, claim, right of set-off, deduction or counterclaim.
S.C. LAND ACQUISITIONS, L.L.C.
a Michigan limited liability company
By: /s/ Xxxx Xxxxxxxx
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Xxxx Xxxxxxxx, Member
/s/ Xxxx Xxxxxxxx
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Xxxx Xxxxxxxx (individually as
Guarantor)
Exhibit A
PROPERTY - CONDOMINIUM UNITS
The following described premises situated in the Village of Spring Lake, County
of Ottawa and State of Michigan:
Units Nos. 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18,
20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 33, 34, 41, 42, 43, 44, 45,
46, 47, 48, 49, 50, 51, 52, 53, 54 and 55 Grand Harbor Yacht Club, a
condominium, according to the Master Deed thereof, recorded in Liber 2233,
Pages 209 through 272, Ottawa County Records and designated as Ottawa
County Condominium Subdivision Plan No. 212, with rights in General Common
Elements and Limited Common Elements as set forth in said Master Deed and
pursuant to Act 59 of the Public Acts of Michigan of 1978, as amended,
together with and subject to all easements of record (whether benefiting or
burdening the Condominium Project), and subject to the covenants, terms and
provisions of the aforesaid Master Deed and the Exhibits thereto, all
encroachments, restrictions and other limitations of record, liens for
taxes and assessments due and payable after the date of this deed, the
rights of the United States of America, the State of Michigan, and the
public for commerce, navigation, recreation and fishery in any portion of
the Condominium Project comprising the bed or waters of Spring Lake, the
Spring Lake Channel, the Grand River and/or the Grand River Channel, the
nature and extent of riparian rights and the riparian rights of riparian
owners and the public in and to the use of the waters of Spring Lake, the
Spring Lake Channel, the Grand River, and/or the Grand River Channel, any
adverse claims based upon the assertion that the bed of Spring Lake, the
Spring Lake Channel, the Grand River, and/or the Grand River Channel has
changed location as a result of other than natural causes, the terms,
conditions and limitations of the permits issued by the U.S. Army Corps of
Engineers and the State of Michigan Department of Environmental Quality,
and all applicable laws, ordinances, and governmental regulations.
