Exhibit 10.114

 

FIRST MODIFICATION AGREEMENT

 

THIS FIRST MODIFICATION AGREEMENT (this “Agreement”) is made and entered into
this 19th day of  August, 2003, by and among MONROE OUTLET CENTER, LLC, a
Michigan limited liability company (“Borrower),  HORIZON GROUP PROPERTIES, INC.,
a Maryland corporation (“HGPI”), HORIZON GROUP PROPERTIES, L.P., a Delaware
limited partnership (“HGPLP”; HGPI and HGPLP and Prime are herein collectively
referred to as the “Guarantors”), 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 $7,000,000.00 (the “Loan”) to Borrower, which Loan is evidenced by that
certain Promissory Note I, in the stated principal amount of $3,000,000.00 and
that certain Promissory Note II, in the stated principal amount of $4,000,000.00
(collectively, the “Notes”), each dated as of July 10, 2002, each executed and
delivered by Borrower and each payable to the order of Lender.

 

B.            The Loan and the Notes are secured by, among other things,  those
certain Commercial Mortgages (the “Mortgages”), each dated as of July 10, 2002,
each executed and delivered by Borrower for the benefit of Lender, which
encumber, among other things, certain real property located in Monroe and
Muskegan Counties, Michigan and more particularly described in the Mortgages and
all improvements and fixtures thereon (the “Property”), and which have been
recorded, respectively in Liber 2254, beginning at Page 83 in the Register of
Deeds of Monroe County, Michigan  and in Liber 3457, beginning at Page 506 in
the Register of Deeds of Muskegan County, Michigan.

 

C.            The (and Prime Retail, L.P.) have guaranteed the payment and
performance of the obligations of Borrower in regard to the Loan pursuant to
that certain Guaranty Agreement, dated July 10, 2002, executed by Guarantors
(and Prime Retail, L.P.) for the benefit of Lender.

 

D.            Borrower has requested that Lender agree to release a portion of
the Property from the Mortgages and the other Loan Documents, as such term is
defined in the Mortgages and Lender has agreed to do so provided certain
conditions are satisfied.  One of such conditions is that this Agreement is
entered into.

 

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.             The Notes, the Mortgages and the other Loan Documents are hereby
modified to provide that the occurrence of an Event of Default, as such term is
defined in that certain Adjustable Rate Mortgage, Security Agreement and
Assignment of Leases and Rents, dated as of October 27, 1999, executed by
Huntley Development Limited Partnership (“HDLP”), an affiliate of Borrower, for
the benefit of Lender and which has been recorded as Document No. 1999K103679 in
the Records of Kane

 

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County, Illinois, and in that certain Mortgage, Security Agreement and
Assignment of Leases and Rents, of even date herewith, executed by HDLP for the
benefit of Lender and which is to be recorded in the Records of Kane County,
Illinois, and which secures the Loan, will constitute an Event of Default under
the Note, the Mortgages and the other Loan Documents.

 

2.             As of the date hereof, the unpaid principal balance of the Loan
and the Notes (prior to the application of the $2,000,000.00 principal
prepayment being made by Borrower as a result of the sale of the portion of the
Property which is being released by Lender) is $7,000,000.00. Borrower has no
right to request or receive, and Lender has no obligation to make, any
additional advance or readvance of any proceeds of the Loan.

 

3.             Lender hereby confirms and agrees that upon its unconditional
receipt of the $2,000,000.00 principal prepayment described in Section 2 above
(which will reduce the outstanding principal balance of the Loan to
$5,000,000.00), Prime Retail, L.P. will have no further liability under the
Guaranty.  Borrower and the Guarantors confirm their agreement that Prime
Retail, L.P. will have no further liability under the Guaranty upon such
reduction of the outstanding principal balance of the Loan to $5,000,000.00, and
that the failure of Prime Retail, L.P. to join in the execution hereof does not
affect their liability or obligations in regard to the Loan or the validity,
enforceability or binding effect of this Agreement.

 

4.             As a material inducement to Lender to enter into this Agreement,
Borrower and Guarantors, each on behalf of itself and its successors, assigns,
legal representatives and constituents (whether or not a party hereto)
(Borrower, Guarantors and such successors, assigns, 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 Notes and/or the Mortgages
and/or the Guaranty 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.

 

5.             As an additional material inducement to Lender to enter into this
Agreement, Borrower and Guarantors hereby represent and warrant to Lender that:

 

(a)                                  as of the date hereof, the Notes, the
Mortgages, the Guaranty and the other Loan Documents, as modified hereby, are in
full force and effect and are not in default and as of the date hereof, there is
no default or failure to perform on the part of the Lender in regard to the Loan
and neither Borrower nor any Guarantor has any defense, counterclaim or offset
to either Note, either Mortgage, the Guaranty or any of the other Loan
Documents, as modified hereby;

 

(b)                                 the representations and warranties of
Borrower and/or Guarantors set forth in the Notes, the Mortgages, the Guaranty
and/or any of the other Loan Documents are true and correct

 

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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 and each Guarantor enforceable against
Borrower and each 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 and Guarantors contained in this
Agreement shall survive the consummation of the transactions contemplated by
this Agreement.

 

6.             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 (in form acceptable to Lender) to the loan policy of title insurance
(the “Policy”) issued to Lender in connection with the Loan and insuring the
first priority status of the Mortgages, confirming that such Policy remains in
effect in regard to the Mortgages,as modified hereby.  The cost of such
endorsement to the Policy shall be paid by Borrower.

 

7.             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 Guarantors agree to execute and 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 and Guarantors in form and substance satisfactory to Lender and all
necessary partnership, limited liability company and/or corporate organization
and authorization documents in form and substance satisfactory to Lender.

 

8.             Borrower and Guarantors hereby affirm and confirm each of the
covenants and agreements of Borrower and/or Guarantors contained in the Notes, 
the Mortgages, the Guaranty and the other Loan Documents, as each is amended
hereby.

 

9.             Borrower and Guarantors hereby affirm, confirm, ratify, renew and
extend the debts, duties, obligations, liabilities, rights, titles, security
interests, liens, powers and privileges created or arising by virtue of the
Notes, the Mortgages, the Guaranty and the other Loan Documents,  as each has
been amended hereby, until all of the Indebtedness, as such term is defined in
the Mortgages, has been paid and performed in full.  Borrower and Guarantors
confirm that 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, either Note,
either Mortgage, the Guaranty and the other Loan Documents, but rather Lender is
expressly retaining and reserving the same to their fullest extent.

 

10.           Except as expressly provided herein, all the terms, provisions,
debts, duties, obligations, liabilities, representations, warranties, rights,
titles, security interests, liens, powers and privileges

 

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existing by virtue of the Notes, the Mortgages, the Guaranty and any other Loan
Documents shall be and continue in full force and effect and are hereby
acknowledged by Borrower and Guarantors to be legal, valid, binding and
enforceable in accordance with their terms.

 

11.           This Agreement shall be binding upon the parties hereto and their
respective successors and assigns.  Nothing contained in this paragraph shall
act to amend or modify any of the provisions of the Notes, the Mortgages, the
Guaranty or any other Loan Documents which restrict or prohibit assignment or
transfer.

 

12.           Neither this Agreement nor any provision of either Note, either
Mortgage, the Guaranty 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.

 

13.           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:

 

 

 

MONROE OUTLET CENTER, LLC,

 

 

a Michigan limited liability company

 

 

By: Horizon Group Properties, L.P., its Manager

 

 

 

By: Horizon Group Properties, Inc., its General Partner

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

Name: 

 

 

 

 

 

Title:

 

 

 

 

 

 

GUARANTORS:

 

 

 

 

 

 

 

 

HORIZON GROUP PROPERTIES,L.P.,

 

 

a Delaware limited partnership

 

 

 

By: Horizon Group Properties, Inc.,  its General Partner

 

 

 

 

By:

 

 

 

 

 

 

 

 

  Name:

 

 

 

 

 

  Title:

 

 

 

 

 

 

 

HORIZON GROUP PROPERTIES, INC.,

 

 

 

a Maryland corporation

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

 

 

  Name:

 

 

 

 

 

  Title:

 

 

 

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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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