Exhibit 10.82


 


 


March
14, 2003


 


 


 


Horizon Group Properties, Inc.


77 W. Wacker Drive, Suite 4200


Chicago, Illinois 60601


Attn: 
Gary Skoien


 


                                Re:          Profits Interest Assignment


 


Dear Gary:


 


This letter is to confirm
the assignment by Huntley Development Limited Partnership (“HDLP”) and Huntley
Meadows Residential Venture (“HMRV,” and together with HDLP, the “Assigning
Parties”) to Horizon Group Properties, Inc. (“Horizon”) of a portion of certain
Net Profits (as defined in the Amended and Restated Agreement and Assignment of
Net Profits Interest, dated October 27, 1999, by HDLP and HMRV to Beal Bank,
S.S.B (“Beal”), as amended by the First Amendment, as defined below) (as
amended, the “Assignment”) to which the Assigning Parties are entitled under
the Assignment.  The Assigning Parties
acknowledge that each of them is receiving benefits from the Loan through
partial repayment of amounts due to Beal, payment of which is secured by
properties owned by the Assigning Parties. 
Any defined terms used herein and not otherwise defined shall have the
meanings assigned thereto in the Assignment.


                                HDLP
and HMRV are making this grant as part of a transaction whereby Horizon is
making a loan (the “Loan”) of $1,300,000 to Retail Partners, Inc., an Illinois
corporation, and Retail Partners Limited Partnership, an Illinois limited
partnership.  In consideration for
making the Loan, the Company shall receive from the Assigning Parties a right
to 3.25% of the Net Profits to which the Assigning Parties are entitled under
each of clauses (ii) and (iii) of Section 2 of the First Amendment to the
Amended and Restated Agreement and Assignment of Net Profits Interest dated
January 30, 2002 (the “First Amendment’) between the Assigning Parties and Beal
(the “Subject Net Profits”).  For
the avoidance of doubt, such 3.25% shall be a percentage of the Assigning
Parties’ portion of the Subject Net Profits, and not 3.25% of the total Net
Profits.  Thus, for example, if the
Assigning Parties currently have a 65% interest in the Net Profits allocable or
distributable under clause (iii) of Section 2 of the First Amendment.  By reason of this letter, Horizon shall have
a 2.112% (i.e., 65% x 3.25%), and the Assigning Parties shall have the
remaining 62.888%, interest in the Net Profits allocable or distributable under
clause (iii) of Section 2 of the First Amendment.  The Subject Net Profits shall not include any amounts used to
repay Approved Contributions and interest accrued thereon.


 


                                Horizon
shall have the right, but shall not be required, to cure any default by the
Assigning Parties or any respective affiliate of any of them that might, in the
sole but reasonable 


 


 


 


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discretion of Horizon, affect Horizon’s
rights hereunder, including, but not limited to, any default in payment to Beal
or its successors or assigns under any loan by Beal to the Assigning
Parties.  If Horizon advances funds (an
“Advance”) to cure such default, the Assigning Parties shall repay, or cause to
be repaid, the principal amount of such Advance within 30 days after such
Advance is made, along with interest on the principal amount thereon at a rate
of 10.0% per annum until repaid.  If
such Advance is not repaid within such 30-day period, Horizon shall receive a
permanent assignment of 50.0% of the Subject Net Profits determined after (i)
the repayment of any Advances made by Horizon, together with accrued but unpaid
interest thereon and (ii) the distribution to The Prime Group, Inc. and its
affiliates of Net Profits in an amount equal to $6,500,000 plus a return
thereon equal to ten percent (10.0%) per annum from and after the date of this
letter.  Prior to making an Advance,
Horizon shall be entitled to a reasonably satisfactory collateral assignment of
50% of the Subject Net Profits as security for the obligation to repay such
Advance.


 


                                Each
time Horizon makes an Advance, Horizon shall receive a permanent assignment of
an additional 3.25% interest of the Subject Net Profits, which interest shall
not be reduced if and when such Advance is repaid.  The Assigning Parties shall lose the right to repay Advances if
any Advance is not repaid within the 30-day period after such Advance is made
or if the aggregate outstanding principal balance of all Advances which have
not been repaid in the 30-day period following such Advance exceeds $250,000.


 


Each of the Assigning
Parties represents and warrants that (i) it owns the rights to the Subject Net
Profits and has full power and authority to assign a portion thereof as
contemplated hereby; (ii) such rights shall be transferred free and clear of
any liens or encumbrances; (iii) such transfer will not violate the partnership
agreement of HDLP or HMRV, the organizational documents of HDLP or HMRV or any
other contract or agreement that HDLP or HMRV is a party to; (iii) such
assignment will not violate any state or federal securities laws;  and (iv) all authorizations and approvals
required for the assignment of the interest in the Subject Net Profits as
contemplated hereby have been obtained. 
Each of the Assigning Parties covenants and agrees that it shall not,
without the prior written consent of Horizon, assign, transfer, pledge or
otherwise grant any interest to any party (other than Horizon) in the Subject
Net Profits.  As a condition to
borrowing, The Prime Group, Inc. (“TPG”) (or the appropriate Affiliate or
Affiliates of The Prime Group, Inc.) agrees to enter into an agreement (the “Option
Agreement”), substantially on the terms set forth on Schedule A
attached hereto, within thirty (30) days after the date hereof.  The failure of TPG (or the appropriate
Affiliate or Affiliates of TPG) to enter into the Option Agreement within
thirty (30) days after the date hereof shall, at the option of Horizon,
constitute a default hereunder, unless the failure is attributable to failure
of Horizon to negotiate the Option Agreement in good faith.


                In case any one or more of the provisions contained
herein shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not
affect any other provisions of this Agreement, but this Agreement shall be
construed as if such invalid, illegal or unenforceable provision or provisions
had never been contained herein.  This
Agreement constitute the complete agreement of the parties hereto, and
supersede all previous understandings and agreements, relating to the subject
matter hereof.  Neither this Agreement
nor any of the terms hereof may be terminated, amended, supplemented, waived or
modified orally, but only by an instrument in writing signed by Assigning
Parties and Horizon.


 


 


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                                Horizon
shall be entitled, in addition to such other relief as it may be entitled, to
collect from Assigning Parties and TPG all of Horizon’s costs and expenses
(including, without limitation, reasonable attorneys’ fees and court costs)
incurred in enforcing the terms of this Agreement.


 


                                This Agreement shall be construed and
enforced under the laws of the State of Illinois without regard to the conflict
of law principles thereof.


 


                                As
part of the consideration for new value this day received, the Assigning
Parties and TPG hereby irrevocably consent to the jurisdiction and venue of the
courts of the State of Illinois with respect to any and all actions related to
this Agreement or the enforcement of this Agreement and hereby irrevocably
waive any and all objections thereto.


 


                                Any
judicial proceeding by the Assigning Parties or TPG against Horizon involving,
directly or indirectly any matter or claim in any way arising out of, related
to or connected herewith shall be brought only in the federal or state courts
of the State of Illinois.  Nothing
contained herein shall affect the right of Horizon to bring any action or
proceeding against the Assigning Parties or TPG or their property in the courts
of any other jurisdiction.


 


                                WAIVER
OF JURY TRIAL.  EACH OF THE
ASSIGNING PARTIES AND TPG, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO
CONSULT WITH COUNSEL, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF
THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY
COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF
ANY ASSIGNING PARTY, TPG OR HORIZON WITH RESPECT TO THE LOAN.  NEITHER ASSIGNING PARTY NOR TPG SHALL SEEK
TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY ACTION IN WHICH A JURY TRIAL
HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS
NOT BEEN WAIVED.  THESE PROVISIONS SHALL
NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED EXCEPT BY A
WRITTEN INSTRUMENT EXECUTED BY THE ASSIGNING PARTY OR TPG, AS THE CASE MAY BE,
AND HORIZON.


 


 


[signature
pages follow]


 


 


 


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This Agreement sets forth the complete understanding of the parties
hereto and shall be binding and enforceable on each party in accordance with
its terms.


 




	
   

  	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  HUNTLEY DEVELOPMENT
  LIMITED PARTNERSHIP

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Huntley Development
  Company, Managing General Partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  HUNTLEY MEADOWS
  RESIDENTIAL VENTURE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Prime/Huntley Meadows
  Residential, Inc., Managing Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE PRIME GROUP, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  	
   

  






 


 


 


 


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