Exhibit 10.99

 

FOURTH MODIFICATION AGREEMENT

 

THIS FOURTH MODIFICATION AGREEMENT (this “Agreement”) is made and entered into
this 13th day of June, 2003, by and among HUNTLEY DEVELOPMENT LIMITED
PARTNERSHIP, an Illinois limited partnership (“Borrower), THE PRIME GROUP, INC.,
an Illinois corporation (the “Released Guarantor”), HORIZON GROUP PROPERTIES,
INC., a Maryland corporation (the “Replacement Guarantor”) and BEAL BANK,
S.S.B., a savings bank organized under the laws of the State of Texas
(“Lender”).

 

W I T N E S S E T H:

 

A.                                   Lender has heretofore made a loan in the
maximum principal amount of $11,712,177.00 (the “Loan”) to Borrower, which Loan
is now evidenced by that certain Amended, Restated and Increased Promissory Note
(the “Note”), dated as of January 30, 2002, in the stated principal amount of
$11,712,177.00, executed and delivered by Borrower and payable to the order of
Lender.

 

B.                                     The Loan and the Note are secured by,
among other things, that certain Adjustable Rate Mortgage, Security Agreement
and Assignment of Leases and Rents (as previously modified and extended, the
“Mortgage”), dated as of October 27, 1999, executed and delivered by Borrower
for the benefit of Lender, which encumbers, among other things, certain real
property located in Kane County, Illinois and more particularly described in the
Mortgage and all improvements and fixtures thereon (the “Property”), and which
has been recorded as Document No. 1999K103679 in the Records of Kane County,
Illinois.  The Mortgage has been amended pursuant to (i) that certain First
Amendment to Mortgage, Security Agreement and Assignment of Leases and Rents and
Related Documents, dated December 29, 1999, by and among Borrower, the Released
Guarantor and Lender and which has been recorded under Document No. 1999K122257
in the Records of Kane County, Illinois, (ii) that certain Second Modification
and Extension Agreement, dated as of October 31, 2000, by and among Borrower,
the Released Guarantor and Lender and which has been recorded as Document No.
2000K089267 in the Records of Kane County, Illinois and (iii) that certain Third
Modification and Extension Agreement, dated January 30, 2002, by and among
Borrower, the Released Guarantor and Lender and which has been recorded under
Document No. 2002K025149 in the Records of Kane County, Illinois.

 

C.                                     The Released Guarantor has guaranteed the
payment and performance of the obligations of Borrower in regard to the Loan
pursuant to that certain Guaranty Agreement (the “Original Guaranty”), dated
October 27, 1999, executed by Guarantor for the benefit of Lender.

 

D.                                    Certain of the owners of partnership
interests in Borrower desire to transfer such interests and, as required by the
Mortgage, have requested Lender’s consent to such transfer.  In addition, as a
result of the transfers of the partnership interests in Borrower, Borrower has
requested that Lender release the Released Guarantor from liability under the
Original Guaranty in regard to the Loan and accept the Replacement Guarantor as
guarantor of the Borrower’s obligations in regard to

 

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the Loan.  Concurrently with the execution hereof, the Replacement Guarantor is
executing and delivering to Lender a Guaranty Agreement (the “Replacement
Guarantor’s Guaranty”) by which the Replacement Guarantor jointly and severally
guarantees the payment and performance of Borrower’s obligations in regard to
the Loan.

 

NOW, THEREFORE, for and in consideration of the premises, the mutual covenants
and agreements herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and confessed by each
of the parties hereto, the parties hereto hereby agree as follows:

 

1.                                       Lender hereby consents to the transfer
of the partnership interests in Borrower owned by the Released Guarantor and
Huntley Development Company (collectively, the “Transferring Parties”) to
affiliates of the Replacement Guarantor.  As a result of such transfers, the
sole general partner of Borrower is now Horizon Huntley Finance, LLC  , owning a
one percent (1%) partnership interest therein, and the sole limited partners in
Borrower is Horizon Huntley, LLC, a Delaware limited liability company (owning a
ninety-nine percent (99%) partnership interest therein.

 

2.                                       In addition, Lender hereby releases the
Released Guarantor from liability under the Original Guaranty in regard to the
Loan.  The parties hereto, other than Lender, hereby consent to the release of
the Released Guarantor from liability under the Original Guaranty and agree with
Lender that such release does not limit or otherwise affect their respective
obligations to Lender in regard to the Loan and under the Loan Documents
(including, without limitation, the Replacement Guarantor’s Guaranty), all of
which obligations remain in full force and effect. The parties hereto further
agree that the Released Guarantor is not being released from any liability or
obligation it has as a guarantor of the obligations and indebtedness owed to
Lender under the NPI Agreement, as such term is hereinafter defined.

 

3.                                       In consideration for the agreement and
consent of lender herein contained and of Lender’s release of the Released
Guarantor as provided above, the Replacement Guarantor is executing and
delivering to Lender the Replacement Guarantor’s Guaranty.  The parties hereto
hereby agree that the Replacement Guarantor’s Guaranty is a Loan Document and
that Borrower and the Replacement Guarantor (and any other person or entity
named therein who is not released pursuant hereto) have unconditional joint and
several liability under the Loan Documents, including, without limitation, the
Replacement Guarantor’s Guaranty.

 

4.                                       Pursuant to the Replacement Guarantor’s
Guaranty, the Replacement Guarantor is guaranteeing in addition to the Loan, the
obligations of the Borrower and Huntley Meadows Residential Venture (“HMRV”) to
Lender under and in regard to that certain Amended and Restated Agreement and
Assignment of Net Profits Interest, dated October 27, 1999, by and among
Borrower, HMRV and Lender (the “NPI Agreement”).

 

5.                                       As of the date hereof, the unpaid
principal balance of the Loan and the Note is $10,706,151.75.  In addition,
Borrower, the Released Guarantor and the Replacement Guarantor agree that the
amount of Approved Contributions, as defined in the NPI Agreement, currently
outstanding is $11,426,661.75.

 

6.                                       Borrower and the Replacement Guarantor
agree that, except in regard to the personal

 

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liability of the Released Guarantor for the payment of the Loan, Lender retains
and reserves all of its rights and remedies, as well as all liens and security
interests, under and in regard to the Loan Documents and the NPI Agreement.

 

7.                                       As a material inducement to Lender to
enter into this Agreement, Borrower, the Released Guarantor, the Replacement
Guarantor and the other Transferring Parties, each on behalf of itself and its
successors, assigns, heirs, legal representatives and constituents (whether or
not a party hereto) (Borrower, the Released Guarantor, the Replacement
Guarantor, such other Transferring Parties and such successors, assigns, heirs,
legal representatives and constituents being referred to herein collectively and
individually, as “Obligors, et al.”), hereby fully, finally and completely
RELEASE and FOREVER DISCHARGE Lender and its successors, assigns, affiliates,
subsidiaries, parents, officers, shareholders, directors, employees, attorneys
and agents, past, present and future, and their respective heirs, successors and
assigns (collectively and individually, “Lender, et al.”) of and from any and
all claims, controversies, disputes, liabilities, obligations, demands, damages,
expenses (including, without limitation, reasonable attorneys’ fees), debts,
liens, actions and causes of action of any and every nature whatsoever and WAIVE
and RELEASE any defense, right of counterclaim, right of set-off or deduction to
the payment of the indebtedness evidenced by the Note and/or the Mortgage and/or
the NPI Agreement and/or any of the other Loan Documents which Obligors, et al.
now have or may claim to have against Lender, et al. arising out of, connected
with or relating to any and all acts, omissions or events occurring prior to the
execution of this Agreement.

 

8.                                       As an additional material inducement to
Lender to enter into this Agreement, Borrower, Released Guarantor and
Replacement Guarantor (as to the representations concerning itself set forth in
(a) and (c) below hereby represent and warrant to Lender that:

 

(a)                                  the Note, the Mortgage, the NPI Agreement
and the other Loan Documents, as modified hereby, are in full force and effect,
as of the date hereof, there is no default or failure to perform on the part of
the Lender in regard to the Loan or the NPI Agreement and neither Borrower nor
Released Guarantor nor Replacement Guarantor has any defense, counterclaim or
offset to the Note, the Mortgage, the NPI Agreement or any of the other Loan
Documents, as modified hereby;

 

(b)                                 the representations and warranties of
Borrower and/or the Released Guarantor set forth in the Note, the Mortgage, the
NPI Agreement and/or any of the other Loan Documents are true and correct in all
material respects as of the date hereof and are hereby reaffirmed as if such
representations and warranties had been made on the date hereof and shall
continue in full force and effect; and

 

(c)                                  this Agreement constitutes the legal, valid
and binding obligation of Borrower, Released Guarantor and Replacement Guarantor
enforceable against Borrower, the Released Guarantor and the Replacement
Guarantor in accordance with the terms hereof, except as such enforceablility
may be effected by bankruptcy and other debtor relief laws.

 

The representations and warranties of Borrower, the Released Guarantor and the
Replacement Guarantor contained in this Agreement shall survive the consummation
of the transactions contemplated by this Agreement.

 

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9.                                       On demand, Borrower shall pay to Lender
all closing costs and fees and expenses incurred by Lender in connection with
this Agreement and the transactions contemplated hereby, including, without
limitation, Lender’s reasonable attorneys’ fees and expenses.  In addition,
Borrower will cause to be issued to Lender concurrently with the execution and
delivery hereof, an endorsement to the loan policy of title insurance (the
“Policy”) issued to Lender in regard to the Loan, as previously increased and
modified, confirming that such Policy continues to insure the first priority
status of the Mortgage, as modified hereby.  The cost of such endorsement shall
be paid by Borrower.

 

10.                                 In addition to the documents, instruments
and acts described in this Agreement and which are to be executed and/or
delivered and/or taken pursuant to this Agreement, Borrower and Guarantor agree
to (i) provide to Lender a consent to this Agreement and the transactions
effected hereby, executed by the current beneficiary of that certain Amended and
Restated Mortgage and Security Agreement, dated October 27, 1999, executed by
Borrower for the benefit of U.S. Bank Trust Company which has been recorded as
Document No. 1999K122255 in the records of Kane County, Illinois and which
encumbers a portion of the Property and (ii) execute and/or deliver from time to
time upon request by Lender such other documents and instruments, and take such
other action, as Lender may reasonably request or require to more fully and
completely evidence and carry out the transactions contemplated by this
Agreement, including, without limitation, an opinion of counsel for Borrower,
the Released Guarantor, the Replacement Guarantor and the other Transferring
Parties in form and substance reasonably satisfactory to Lender and all
necessary partnership, trust and/or corporate organization and authorization
documents in form and substance satisfactory to Lender.

 

11.                                 Borrower hereby affirms and confirms each of
the covenants and agreements of Borrower contained in the Note, the Mortgage,
the NPI Agreement and the other Loan Documents, as each is amended hereby.  The
Released Guarantor hereby affirms and confirms its joint and several, personal
liability as a guarantor of the indebtedness and obligations owed to Lender
under the NPI Agreement.

 

12.                                 Borrower hereby affirms, confirms, ratifies,
renews and extends the debts, duties, obligations, liabilities, rights, titles,
security interests, liens, powers and privileges created or arising by virtue of
the Note, the Mortgage, the NPI Agreement and the other Loan Documents, as each
has been amended hereby, until all of the Indebtedness and Obligations, as such
terms are defined in the Mortgage, including, without limitation, all
obligations owed to Lender under the NPI Agreement, have been paid and performed
in full.  Borrower, the Released Guarantor and the Replacement Guarantor confirm
that (except for the release of the Released Guarantor as provided above) Lender
has not released, forgiven, discharged, impaired, waived or relinquished, and
does not hereby release, forgive, discharge, impair, waive or relinquish any
rights, titles, interests, liens, security interests, collateral, parties,
remedies or any other matter with respect to the Loan, the Note, the Mortgage,
the NPI Agreement and the other Loan Documents, but rather Lender is expressly
retaining and reserving the same to their fullest extent.

 

13.                                 Except as expressly provided herein, all the
terms, provisions, debts, duties, obligations, liabilities, representations,
warranties, rights, titles, security interests, liens, powers and privileges
existing by virtue of the Note, the Mortgage, the NPI Agreement and any other
Loan

 

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Document shall be and continue in full force and effect and are hereby
acknowledged by Borrower, the Released Guarantor and the Replacement Guarantor
to be legal, valid, binding and enforceable in accordance with their terms.

 

14.                                 This Agreement shall be binding upon the
parties hereto and their respective heirs, personal representatives, successors
and assigns.  Nothing contained in this paragraph shall act to amend or modify
any of the provisions of the Note, the Mortgage, the NPI Agreement or any other
Loan Document which restrict or prohibit assignment or transfer.

 

15.                                 Neither this Agreement nor any provision of
the Note, the Mortgage, the NPI Agreement or any other Loan Document may be
waived, modified or amended, except by an instrument in writing signed by the
party against which the enforcement of such waiver, modification or amendment is
sought, and then only to the extent set forth in such instrument.

 

16.                                 THIS AGREEMENT AND THE OTHER DOCUMENTS
ENTERED INTO IN REGARD TO THE LOAN REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO ORAL AGREEMENTS AMONG
THE PARTIES.

 

 

EXECUTED as of the day and year first above written.

 

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BORROWER:

 

 

 

HUNTLEY DEVELOPMENT LIMITED PARTNERSHIP,

 

an Illinois limited partnership

 

By:

Huntley Development Company, its Managing
General Partner

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

RELEASED GUARANTOR:

 

 

 

THE PRIME GROUP, INC.,

 

an Illinois corporation

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

President

 

 

 

 

 

REPLACEMENT GUARANTOR:

 

 

 

 

 

HORIZON GROUP PROPERTIES, INC.

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

President

 

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TRANSFERRED PARTIES:

 

 

 

To be added

 

 

 

 

 

LENDER:

 

 

 

BEAL BANK, S.S.B.,

 

a savings bank organized under the laws of the State of Texas

 

 

 

 

 

By:

 

 

 

 

 

 

 

Name:

William T. Saurenmann

 

Title:

Senior Vice President

 

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