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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