EXHIBIT 10.58
SECOND AMENDED AND RESTATED
GUARANTY AND INDEMNITY AGREEMENT
THIS SECOND AMENDED AND RESTATED GUARANTY AND INDEMNITY AGREEMENT
(this "AGREEMENT") is entered into as of this 11th day of July, 2002 by and
among Horizon Group Properties, Inc., a Maryland corporation ("HGP"), Horizon
Group Properties, L.P. a Delaware limited partnership ("HGP LP"), Prime Retail,
Inc., a Maryland corporation ("PRIME RETAIL"), and Prime Retail, L.P., a
Delaware limited partnership ("PRIME LP").
RECITALS:
A. Certain affiliates of HGP and HGP LP borrowed funds pursuant to
that certain Loan Agreement dated as of June 15, 1998 among Indiana Factory
Shops, L.L.C. ("INDIANA LLC"), Nebraska Crossing Factory Shops, L.L.C.
("NEBRASKA LLC"), Third Horizon Group Limited Partnership ("THIRD HORIZON") and
Nomura Asset Capital Corporation, as amended by that certain First Amendment to
Loan Agreement dated as of June 1999 among Third Horizon, Nebraska LLC, Indiana
LLC and LaSalle Bank National Association (the "TRUSTEE"), as trustee for CDC
Depositor Trust ST-I (formerly known as Nomura Depositor Trust ST-I), Commercial
Mortgage Pass-Through Certificates, Series 1998-ST-I (the predecessor in
interest to CDC Mortgage Capital Inc. and as further amended by that certain
Second Amendment to Loan Agreement and Settlement Agreement dated as of July 30,
2001 among Third Horizon, HGP, HGP LP and the Trustee (collectively, the "CDC
LOAN AGREEMENT").
B. Pursuant to that certain Guaranty dated as of June 15, 1998 (as
reaffirmed by that certain Reaffirmation of Guaranty dated as of July 30, 2001,
the "CDC GUARANTY"), Prime LP agreed to guarantee certain obligations arising
under the CDC Loan Agreement and related loan documents.
C. Pursuant to that certain Guaranty and Indemnity Agreement dated
as of June 15, 1998 (as amended and restated by that certain Amended and
Restated Guaranty and Indemnity Agreement dated as of July 30, 2001, the
"GUARANTY AND INDEMNITY AGREEMENT"), HGP and HGP LP, among other things, agreed,
jointly and severally, to indemnify Prime Retail, Prime LP and certain related
parties from losses they may incur as a result of the execution and delivery of
the CDC Guaranty by Prime LP.
D. Prime LP, as the successor to Horizon/Xxxx Outlet Centers Limited
Partnership ("HORIZON/XXXX LP"), is jointly and severally liable with HGP for
any and all obligations arising under that certain promissory note by
Horizon/Xxxx LP in favor of First of America Bank -
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Michigan, N.A. ("FIRST OF AMERICA") dated December 28, 1995 in the original
principal amount of $2,800,000 (as amended from time to time, together with any
other documents or instruments executed and/or delivered in connection with or
otherwise related to such note, collectively, the "FIRST OF AMERICA LOAN
DOCUMENTS").
X. Xxxx Bank, S.S.B., a savings bank organized under the laws of the
State of Texas (the "LENDER"), has agreed to refinance a portion of the amount
outstanding under the CDC Loan Agreement by making a loan (the "LOAN") to Monroe
Outlet Center L.L.C., a Delaware limited liability company (the "BORROWER"), in
the maximum principal amount of $7,000,000.00, evidenced by (i) that certain
Promissory Note I ("NOTE I"), of even date herewith, in the stated principal
amount of $3,000,000.00 and (ii) that certain Promissory Note II ("NOTE II"), of
even date herewith, in the stated principal amount of $4,000,000.00
(collectively the "NOTES"), each secured by instruments including, without
limitation, two Mortgages, Security Agreements and Assignments of Leases and
Rents (collectively, the "MORTGAGES"), executed by the Borrower. Such Mortgages,
Notes and any other documents executed in connection with the Loan are
collectively referred to herein as the "LOAN DOCUMENTS".
F. One of the conditions to the Lender's agreement to make the Loan
is that Prime LP guarantee (the "XXXX GUARANTY") to the Lender the full and
timely payment of up to $4,000,000 of the duties and obligations of the Borrower
under Note II, the Mortgage which encumbers the real property located in Monroe
County, Michigan owned by Borrower and the other Loan Documents to the extent
they relate to the real property described above, whether or not the Borrower
has personal liability thereunder or therefor.
G. Concurrent with the making of the Loan, the balance of the amount
outstanding under the CDC Loan Agreement will be refinanced or otherwise retired
and the CDC Guaranty will be terminated and of no further force and effect.
H. In consideration of the agreement of Prime LP to provide the
foregoing accommodations, Prime Retail, Prime LP, HGP and HGP LP have agreed to
further amend and restate the Guaranty and Indemnity Agreement in its entirety
as set forth herein.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE ONE
DEFINITIONS
Capitalized terms used herein and not otherwise defined shall have the
meanings assigned to such terms in the Loan Documents.
ARTICLE TWO
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REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF HGP AND HGP LP. In order to
induce Prime LP to enter into the Xxxx Guaranty and this Agreement, HGP and HGP
LP jointly and severally represent and warrant, as of the date hereof, that:
(a) HGP is a Maryland corporation duly organized, validly
existing and in good standing under the laws of the state of its
organization. HGP LP is a Delaware limited partnership duly organized,
validly existing and in good standing under the laws of the state of
its organization. Each of HGP and HGP LP is qualified to do business
and is in good standing under the laws of each jurisdiction in which
the nature of its business requires it to be so qualified, (ii) has
full power to own and lease its properties and to conduct its business
as now being conducted and as contemplated to be conducted in the
future, and (iii) has full power and authority and legal right, has
taken all necessary corporate and partnership action, as applicable,
and has obtained all necessary consents and approvals required by
applicable law to permit it to execute, deliver and perform its
obligations under this Agreement. This Agreement has been duly and
validly authorized, executed and delivered by each of HGP and HGP LP,
and constitutes the legal, valid and binding obligations of each of
HGP and HGP LP, enforceable against each of HGP and HGP LP in
accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting
creditors rights generally, and to general principles of equity.
(b) The execution, delivery and performance of this Agreement
by each of HGP and HGP LP do not (i) conflict with or violate the
Amended and Restated Articles of Incorporation or other charter
documents or By-laws, limited partnership agreement or other
organizational documents, as the case may be, of HGP or HGP LP, (ii)
contravene or conflict with any law, statute, rule, or regulation
applicable to HGP or HGP LP, (iii) contravene or conflict with, result
in any breach of, or constitute a default under, any material
agreement or instrument binding on HGP or HGP LP, or to which any of
their respective properties or assets are subject, (iv) result in or
require the creation or imposition of any lien whatsoever upon any of
the properties or assets of HGP or HGP LP (other than the liens
arising pursuant to this Agreement or any other documents or
instruments required or contemplated by this Agreement), or (v)
require any approval of stockholders or partners or any approval or
consent of any Person under any agreement or instrument binding on HGP
or HGP LP or to which any of their respective properties or assets are
subject which has not already been obtained.
(c) To the best knowledge of HGP and HGP LP, after execution
and delivery of the Loan Documents by the parties thereto, no Event of
Default has occurred and is continuing.
(d) There are no offsets or defenses available to HGP or HGP LP
to the payment of any amounts required under the Loan Documents or
otherwise to the
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enforcement by the Lender of the Loan Documents.
(e) The outstanding principal balance of the Loan, after giving
effect to funding of such Loan, will be approximately $7 million.
ARTICLE THREE
GUARANTY FEE
HGP and HGP LP, jointly and severally, agree to pay Prime LP an annual
fee of $60,000 which shall accrue from June 30, 2002 until the date of the
termination and unconditional release of any and all obligations under the Xxxx
Guaranty and be payable in equal quarterly installments in arrears on each March
31, June 30, September 30 and December 31, commencing June 30, 2002 (and on the
date of termination and release). At such time as Prime LP is no longer liable
as a guarantor with respect to any debt obligations of HGP, HGP LP or any of
their affiliates, Prime LP will pay to HGP LP an amount equal to the lesser of
(i) $60,000 or (b) the amount that HGP and/or HGP LP had previously paid to
Prime LP pursuant to this Article Three since June 30, 2002.
ARTICLE FOUR
COVENANTS RELATING TO GUARANTEES
Each of HGP and HGP LP covenants and agrees with Prime Retail and
Prime LP that the covenants set forth in this Section 4 will terminate upon the
termination and unconditional release of any and all obligations of Prime Retail
and Prime LP under the Loan Documents and the First of America Loan Documents
and the payment and performance in full of the reimbursement obligations of HGP
and HGP LP under this Agreement; provided, that notwithstanding anything to the
contrary in the foregoing, the covenants set forth in Sections 4.5 and 4.6 shall
not terminate unless and until there also has been an unconditional release of
any and all obligations of Prime Retail and Prime LP under the Loan Documents
and the First of America Loan Documents and the payment and performance in full
of all obligations of HGP and HGP LP under this Agreement in respect thereto.
4.1 DELIVERIES UNDER LOAN DOCUMENTS. HGP will deliver copies to Prime
Retail and Prime LP of any notices or other information delivered or received by
HGP or HGP LP under the Loan Documents and the First of America Loan Documents,
promptly following the delivery or receipt of such notices or information. HGP
and HGP LP will also provide to Prime Retail and Prime LP such other data and
information (financial and otherwise) as Prime Retail or Prime LP, from time to
time, may reasonably request bearing upon or related to the financial condition,
results of operations and credit worthiness of HGP and HGP LP.
4.2 AMENDMENTS. Neither HGP nor HGP LP will amend, modify, grant, or
permit the amendment, modification, termination or grant of, or any waiver under
(or consent to, or permit or suffer to occur any action or omission which
results in, or is equivalent to, an amendment,
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modification, or grant of a waiver under) the Loan Documents or the First of
American Loan Documents without the prior written consent of Prime Retail and
Prime LP, which consent shall not be unreasonably withheld.
4.3 REFINANCINGS AND RELEASES. HGP and HGP LP hereby agree to use
commercially reasonable efforts to obtain the release of Prime Retail and Prime
LP from any and all obligations under the First of America Loan Documents as
promptly as practicable.
4.4 APPLICATION OF EXCESS PROCEEDS. HGP and HGP LP hereby agree to
apply or to cause their subsidiaries to apply any Excess Proceeds FIRST to the
payment of any outstanding obligations under Note II (for so long as Prime LP
remains liable as a guarantor in respect of such debt) and SECOND to permanently
reduce any other indebtedness (including permitted pre-payments of principal
amortization) with respect to which Prime Retail or Prime LP is or may be liable
as a guarantor, co-obligor or otherwise. "Excess Proceeds" shall mean the
aggregate amount of net cash proceeds (after transaction costs and expenses)
received by HGP or any of its subsidiaries, including HGP LP, with respect to
(i) any financing, refinancing, sale, transfer or other disposition, including a
pledge, of the property currently held by any of Lakeshore Marketplace, LLC,
Medford Outlet Center LLC, Xxxxxxxx Outlet Center LLC or Warrenton Outlet Center
LLC or (ii) the issuance of any equity interest; provided, however, "Excess
Proceeds" shall not include any such proceeds applied to make mandatory payments
in respect of any indebtedness of HGP or HGP LP.
4.5 RESTRICTIONS ON DISTRIBUTIONS. Neither HGP nor HGP LP will (i)
declare or pay any cash dividends, (ii) make any cash distributions to any
partners, members or shareholders of any of HGP or HGP LP (other than
distributions to HGP from HGP LP to fund corporate administrative expenses
incurred in the ordinary course of business) or (iii) set aside any funds for
any such purpose, other than dividends or distributions in the minimum amount
necessary under the Internal Revenue Code of 1986 (the "CODE") in order to
maintain HGP's status as a real estate investment trust under the Code.
4.6 PLEDGE AGREEMENT. Each of Prime Retail and Prime LP acknowledge
and agree that certain Pledge Agreement, dated as of July 31, 2001, made by HGP
and HGP LP in favor of Prime Retail and Prime LP, pursuant to which HGP LP and
Third HGI, L.L.C., among other things, pledged to Prime Retail and Prime LP (i)
a 99% limited partnership interest in Third Horizon and (ii) a 1% general
partnership interest in Third Horizon, shall be deemed terminated and of no
further force and effect upon the execution and delivery of this Agreement and
the Pledge Agreement.
4.7 RESTRICTIONS ON ENCUMBRANCES. Except only for (i) the liens and
security interests arising under the Mortgage and related documents dated July
30, 2001 with Greenwich Capital Financial Products related to the Lakeshore
Marketplace center and (ii) the liens and security interests arising under the
mortgages and related documents dated of even date herewith with UBS Warburg
Real Estate Investments Inc. and each of Medford Outlet Center LLC, Xxxxxxxx
Outlet Center LLC and Warrenton Outlet Center LLC, without the written consent
of Prime LP and Prime Retail, which Prime LP and Prime Retail may withhold in
their sole discretion, HGP LP shall not, and HGP and HGP LP shall cause each of
Lakeshore Marketplace Finance Company, Inc., Medford Holdings LLC, Xxxxxxxx
Holdings LLC and Warrenton Holdings LLC not to, execute, cause, allow
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or suffer any pledge or encumbrance of their limited liability company interests
in any of Lakeshore Marketplace, LLC, Medford Outlet Center LLC, Xxxxxxxx Outlet
Center LLC or Warrenton Outlet Center LLC.
4.8 NOTICES REGARDING EVENTS OF DEFAULT. HGP and HGP LP will promptly
notify Prime Retail and Prime LP of any event or circumstance that is reasonably
likely to result in an Event of Default under the Loan Documents or the First of
America Loan Documents.
ARTICLE FIVE
INTENTIONALLY OMITTED
ARTICLE SIX
CONSENT OF PRIME RETAIL
6.1 CONSENT. Prime Retail hereby consents to HGP, HGP LP and their
affiliates entering into the Loan Documents.
ARTICLE SEVEN
INDEMNITY
7.1 INDEMNITY. HGP and HGP LP jointly and severally agree to
indemnify, defend, protect and hold Prime Retail and Prime LP and each of the
their respective officers, directors and affiliates (collectively, the
"Indemnified Parties") harmless from and against, and to pay within ten (10)
days after demand, any and all claims, damages, losses, liabilities, judgments,
costs and expenses of any kind or nature whatsoever which the Indemnified
Parties may incur or suffer by reason of, in connection with, or by virtue of
any breach or violation of this Agreement by HGP or HGP LP or by reason of the
execution, delivery or performance of, this Agreement, the Xxxx Guaranty or any
other credit enhancement relating to the Loan Documents or the First of America
Loan Documents including, without limitation, the reasonable fees and expenses
of counsel for the Indemnified Parties with respect thereto. Promptly after
receipt by the Indemnified Parties of notice of the commencement, or threatened
commencement, of any action subject to the indemnities contained in this
Section, the Indemnified Parties shall promptly notify HGP thereof, provided,
however, that the failure of any Indemnified Party so to notify HGP will not
affect the obligation of HGP and HGP LP to indemnify the Indemnified Parties
with respect to such actions or any other action pursuant to this Section except
to the extent such obligation shall have been incurred solely and as a direct
consequence of such failure. The obligations of HGP and HGP LP under this
Section shall survive forever, regardless of the termination of this Agreement
or the payment in full of all of HGP and HGP LP's obligations hereunder. To the
extent that the undertaking to indemnify, defend, protect and hold harmless set
forth herein may be unenforceable as violative of any law or public policy, HGP
and HGP LP agree to pay the maximum portion which is permitted to be paid under
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applicable law. Any amounts unpaid following demand pursuant to this Section
shall accrue interest at a rate of 12% per annum.
ARTICLE EIGHT
MISCELLANEOUS
8.1 MODIFICATION OF THIS AGREEMENT. No amendment, modification or
waiver of any provision of this Agreement shall be effective unless the same
shall be in writing and signed by Prime Retail, Prime LP, HGP and HGP LP. Any
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given.
8.2 WAIVER OF RIGHTS BY PRIME RETAIL AND PRIME LP. No course of
dealing or failure or delay on the part of Prime Retail or Prime LP in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall a single or partial exercise thereof preclude any other or
further exercise or the exercise of any other right or privilege. The rights of
Prime Retail and Prime LP under this Agreement are cumulative and not exclusive
of any rights or remedies which Prime Retail or Prime LP would otherwise have,
including, without limitation, any rights of subrogation.
8.3 SEVERABILITY. In case any one or more of the provisions contained
in this Agreement should be invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby. The parties shall
endeavor in good faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
8.4 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF MARYLAND, REGARDLESS OF THE LAWS
THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICT OF LAWS
THEREOF.
8.5 NOTICES
All notices or other communications required or permitted hereunder
shall be (i) in writing and shall be deemed to be given (A) when received, if
delivered in person, (B) three business days after deposit in a receptacle of
the United States mail as registered or certified mail, postage prepaid, (C) the
business day after notice on which the party to whom such notice is addressed
refuses delivery by mail or by private courier service and (ii) addressed as
follows:
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If to HGP or HGP LP Horizon Group Properties, Inc.
0000 Xxxxx Xxxxx
Xxxxxx Xxxxxx, XX 00000
Attn: President
with a copy to: Schiff, Hardin & Xxxxx
0000 Xxxxx Xxxxx
Xxxxxxx, XX 00000-0000
Attn: Xxxxx Xxxxxxxxx, Esq.
If to Prime Retail or Prime Retail, Inc.
Prime LP 000 Xxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, XX 00000
Attn: R. Xxxxxx Xxxxxx
with a copy to: Winston & Xxxxxx
00 X. Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
8.6 WAIVER OF OFFSET AND COUNTERCLAIM. HGP and HGP LP hereby waive
any and all rights of offset or counterclaim which HGP and HGP LP may otherwise
have against Prime Retail and Prime LP in connection with the enforcement of
their rights hereunder.
8.7 JOINT AND SEVERAL LIABILITY. The obligations of HGP and HGP LP
hereunder shall be joint and several. Neither Prime Retail nor Prime LP shall
not obligated to exercise any right or take any action against either HGP or HGP
LP prior to the enforcement of its rights against the other.
8.8 ENFORCEMENT. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any federal court located in
Maryland this being in addition to any other remedy to which they are entitled
at law or in equity. In addition, each of the parties hereto (a) consents to
submit itself (without making such submission exclusive) to the personal
jurisdiction of any federal court located in Maryland in the event any dispute
arises out of this Agreement or any of the transactions contemplated by this
Agreement and (b) agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court.
8.9 ENTIRE AGREEMENT. This Agreement (including the exhibits attached
hereto) contains the entire agreement among the parties hereto with respect to
the transactions contemplated hereunder, and supercedes all negotiations,
representations, warranties, commitments, offers,
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contracts and writings prior to the date hereof including without limitation the
original Guaranty and Indemnity Agreement and the amended and restated Guaranty
and Indemnity Agreement.
[signature page follows]
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IN WITNESS WHEREOF the parties hereto have executed this instrument as
of the date and year first above written.
HORIZON GROUP PROPERTIES, INC.
By:
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Its:
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HORIZON GROUP PROPERTIES, L.P.
By: HORIZON GROUP PROPERTIES, INC.
By:
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Its:
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PRIME RETAIL, INC.
By:
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Its:
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PRIME RETAIL, L.P.
By: PRIME RETAIL, INC.
By:
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Its:
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