Exhibit 10.80

 

GUARANTY

 

                THIS GUARANTY (this “Guaranty”) is made and entered into as of
the 14th day of March, 2003, by THE PRIME GROUP, INC., an Illinois corporation
(“TPG”), PRIME GROUP LIMITED PARTNERSHIP, an Illinois limited partnership
(“PGLP”), PRIME GROUP II, L.P., an Illinois limited partnership (“PG2LP”), PGLP,
INC., an Illinois corporation (“PGLPI”) and PRIME INTERNATIONAL, INC., an
Illinois corporation (“PII”).  TPG,  PGLP, PG2LP, PGLPI and PII are sometimes
referred to herein, individually, as a “Guarantor”, and, together, as
“Guarantors”), in favor of HORIZON GROUP PROPERTIES, INC., a Maryland
corporation (“Lender”).

 

RECITALS:

 

WHEREAS, Lender has agreed to loan the principal sum of One Million Three
Hundred Thousand Dollars ($1,300,000.00) (the “Loan”) to Retail Partners, Inc.,
an Illinois corporation, and Retail Partners Limited Partnership, an Illinois
limited partnership  (“Borrowers”), pursuant to a Promissory Note of even date
herewith in such original principal amount, executed by Borrowers in favor of
Lender (the “Note”); and

 

                WHEREAS, Lender has advised Borrowers that Lender will not make
the Loan unless Guarantors execute and deliver this Guaranty.

 

AGREEMENT:

 

                NOW, THEREFORE, as an inducement to Lender to make the Loan and
to extend credit to Borrower upon the terms and conditions set forth in the
Note, and in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Guarantors hereby agree as follows:

 

1.             The Guaranty.  Guarantors hereby unconditionally and irrevocably,
guarantee: (a) the due and punctual payment in full of all payments due Lender
from Borrowers under the Note, and all other documents or instruments executed
from time to time by Borrowers or any Guarantor in connection therewith,
including, without limitation, that certain letter agreement dated the date
hereof, by Huntley Development Limited Partnership and Huntley Meadows
Residential Venture in favor of Lender (the “Letter Agreement”) (the Note, the
Letter Agreement and such other documents or instruments, collectively, the
“Loan Documents”), and (b) the due and punctual performance and observance of
all of the other terms, covenants, representations, warranties and conditions
agreed to by Borrower, in the Loan Documents (collectively, the “Obligations”).

 

2.             Action Regarding Obligations.  Guarantors expressly agree that
Lender may, in its sole and absolute discretion, without notice to or further
assent of Guarantors, and without in any way releasing, affecting or impairing
the obligations and liabilities of Guarantors hereunder: (a) waive compliance
with, or default under, or grant any other indulgences with respect to, the Loan

 

 

 

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Documents, (b) modify, amend or change any provisions of any of the Loan
Documents with the written agreement of Borrowers, (c) grant extensions or
renewals of or with respect to the obligations and covenants of either Borrower
under the Loan Documents (and/or effect any release, compromise or settlement
with either Borrower in connection therewith), (d) take and hold security for
the payment of this Guaranty and the Obligations, and exchange, enforce, waive,
subordinate, fail or decide not to perfect, and release any such security, with
or without the substitution of new collateral, (e) release, substitute, agree
not to sue or deal with any one or more of Borrowers’ sureties, endorsers, or
other guarantors on any terms or in any manner Lender may choose, (f) determine
how, when and what application of payments and credits shall be made on the
Obligations, (g) apply such security and direct the order or manner of sale
thereof, including, without limitation, any nonjudicial sale permitted by the
terms of the controlling security instrument as Lender in its discretion may
determine, and (h) assign or transfer this Guaranty in whole or in part.

 

                3.             Nature of Guaranty.  (a) This Guaranty is a
continuing, unlimited, unconditional and absolute guaranty of payment and not of
collection.  The liability of Guarantors under this Guaranty shall be primary,
direct and immediate and not conditional or contingent upon pursuit by Lender of
any remedies it may have against either Borrower with respect to the Loan
Documents or upon Lender taking any steps to perfect and/or maintain perfected
its security interest in, or preserve its rights to, any security or collateral
for the Obligations.  No exercise or non-exercise by Lender of any right given
to it hereunder or under the Loan Documents shall affect any of Guarantors’
obligations hereunder or give Guarantors any recourse against Lender.  Without
limiting the generality of the foregoing, Lender shall not be required to make
any demand on either Borrower, or otherwise pursue or exhaust its remedies
against either Borrower, or any collateral securing any of the Obligations,
before, simultaneously with or after, enforcing its rights and remedies
hereunder against Guarantors.

 

                                (b)           Any one or more successive and/or
concurrent actions may be brought hereon against Guarantors either in the same
action, if any, brought against either Borrower, or in separate actions, as
often as Lender, in its sole discretion, may deem advisable.

 

                                (c)           Lender shall be under no
obligation to marshal any assets in favor of Guarantors, or against or in
payment of any or all of the Obligations.  Guarantors hereby waive any rights to
interpose any defense, counterclaim or offset of any nature and description
which they may have or which may exist between and among Lender, Borrowers
and/or Guarantors with respect to Guarantors’ obligations under this Guaranty,
or which either Borrower may assert on the underlying debt, including but not
limited to failure of consideration, breach of warranty, fraud, payment (other
than cash payment in full of the Obligations then due), statute of frauds,
bankruptcy, infancy, statute of limitations, accord and satisfaction, and
usury.  Each Guarantor hereby expressly waives notice of the acceptance of this
Guaranty and any notice or demand to which it would otherwise be entitled
hereunder solely by reason of the fact that its position is one of suretyship,
including without limitation notice of non-performance of either Borrower under
any of the Loan Documents and presentment for payment, protest, or notice of
protest for any obligation created under any of the Loan Documents (except as
otherwise provided in the Loan Documents).

 

                                (d)           Notwithstanding any payment or
payments made by Guarantors hereunder, Guarantors (and Guarantors’ successors
and assigns) shall not be entitled to be subrogated to any of

 

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the rights of Lender against either Borrower or against any collateral or
guarantee or right of offset held by Lender for the payment of the Obligations,
nor shall any Guarantor (or its successors or assigns) seek or be entitled to
seek any contribution or reimbursement from either Borrower or the other
Guarantor in respect of payments made by such Guarantor hereunder, until all
amounts owing to Lender by either Borrower on account of the Obligations are
paid and satisfied in full.  If, notwithstanding the foregoing, any amount shall
be paid to a Guarantor on account of such subrogation rights at any time when
all of the Obligations shall not have been paid and satisfied in full, such
amount shall be held by such Guarantor in trust for Lender, segregated from any
other funds of such Guarantor, and shall forthwith upon, and in any event within
two (2) Business Days following, receipt by such Guarantor, be turned over to
Lender in the exact form received by Guarantors (duly endorsed by such Guarantor
to Lender, if required), to be applied against the Obligations, whether matured
or unmatured, in such order as Lender may determine.

 

                                (e)           Nothing shall discharge or satisfy
the liabilities of Guarantors hereunder, except the full payment and performance
of the Obligations.

 

                                (f)            Any and all present and future
debts and obligations of either Borrower to any Guarantor are hereby postponed
in favor of and subordinated to the full payment of all present and future
Obligations of either Borrower to Lender; and all sums at any time to the credit
of such Guarantor and any of the property rights and interests and evidences
thereof of such Guarantor now or at any time in Lender’s possession, custody or
control or held for its account may be held by Lender as security, and Lender
shall have and is hereby granted a general and continuing lien upon and a right
of set off against such sums, property rights and interests and evidences
thereof, for any and all Obligations of such Guarantor to Lender under this
Guaranty.

 

4.             Certain Rights of Lender.  All rights and remedies afforded to
Lender by reason of this Guaranty and the Loan Documents, or by law, are
separate and cumulative and the exercise of one shall not in any way limit or
prejudice the exercise of any other such rights or remedies.  No delay or
omission by Lender in exercising any such right or remedy shall operate as a
waiver thereof.  No waiver of any rights and remedies hereunder shall be deemed
made by Lender unless in writing and duly executed.  No modification or
amendment hereof shall be deemed made except in writing duly executed by Lender
and Guarantors.  Any such written waiver shall apply only to the particular
instance specified therein and shall not impair the further exercise of such
right or remedy or of any other right or remedy of Lender, and no single or
partial exercise of any right or remedy hereunder shall preclude further
exercise of any other right or remedy.

 

                5.             No Impairment.  The obligation of Guarantors to
make payment for or perform the obligations of either Borrower in accordance
with the terms of this Guaranty shall not be impaired, modified, changed,
released or limited in any manner whatsoever by any failure of genuineness,
validity, regularity or enforceability, impairment, modification, change, or
release or limitation of the liability of either Borrower or its estate in
bankruptcy or reorganization resulting from the operation of any present or
future provision of the United States Bankruptcy Code or other similar laws or
statutes affecting the enforcement of creditors’ rights.  Guarantor’s
responsibility under this Guaranty to pay to Lender the Obligations and any
payments thereof repaid as preferences shall not be extinguished or modified by
any release of either Borrower or other party primarily liable on the

 

 

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Obligations, whether by voluntary release, settlement of a bankruptcy
proceeding, settlement of a contested matter in a bankruptcy, settlement of
litigation, settlement of a claim not yet resulting in litigation, settlement of
a preference claim or otherwise.  In all events Guarantors’ responsibility to
pay Lender, and  Lender’s right to recover from Guarantors, the full amount of
the Obligations shall extend until Lender has received actual payment in full in
cash of and performance of all of the Obligations, without regard to any
modification or a release thereof, and shall continue until such payment, by the
passage of time and the statute of limitations, cannot be recovered by either
Borrower, either Borrower as debtor in possession, a trustee in bankruptcy of
either Borrower or any other person or organization.

 

6.             Representations and Warranties.  Guarantors jointly and severally
represent and warrant to Lender that:

 

(a)           Organization of PGLP. PGLP is a limited partnership duly
organized, validly existing and in good standing under the laws of the State of
Illinois.  PGLP is duly qualified to do business and is in good standing under
the laws of each state or other jurisdiction in which either the ownership or
use of the properties owned or used by it, or the nature of the activities
conducted by it, requires such qualification, except to the extent failure to so
qualify would not have a material adverse effect on the business, operations or
financial condition of PGLP.

 

(b)           Organization of PG2LP. PG2LP is a limited partnership duly
organized, validly existing and in good standing under the laws of the State of
Illinois.  PG2LP is duly qualified to do business and is in good standing under
the laws of each state or other jurisdiction in which either the ownership or
use of the properties owned or used by it, or the nature of the activities
conducted by it, requires such qualification, except to the extent failure to so
qualify would not have a material adverse effect on the business, operations or
financial condition of PG2LP.

 

(c)           Organization of PGLPI.  PGLPI  is a corporation duly organized,
validly existing and in good standing under the laws of the State of Illinois. 
PGLPI is duly qualified to do business as a foreign corporation and is in good
standing under the laws of each state or other jurisdiction in which either the
ownership or use of the properties owned or used by it, or the nature of the
activities conducted by it, requires such qualification, except to the extent
failure to so qualify would not have a material adverse effect on the business,
operations or financial condition of PGLPI.

 

(d)           Organization of PII.  PII  is a corporation duly organized,
validly existing and in good standing under the laws of the State of Illinois. 
PII is duly qualified to do business as a foreign corporation and is in good
standing under the laws of each state or other jurisdiction in which either the
ownership or use of the properties owned or used by it, or the nature of the
activities conducted by it, requires such qualification, except to the extent
failure to so qualify would not have a material adverse effect on the business,
operations or financial condition of PII.

(e)           Organization of TPG.  TPG is a corporation duly organized, validly
existing and in good standing under the laws of the State of Illinois.  TPG is
duly qualified to do business as a foreign corporation and is in good standing
under the laws of each state or other jurisdiction in which either the ownership
or use of the properties owned or used by it, or the nature of the activities

 

 

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conducted by it, requires such qualification, except to the extent failure to so
qualify would not have a material adverse effect on the business, operations or
financial condition of TPG.

 

(f)            Authorization.  Each Guarantor has full power and authority to
(i) execute and deliver this Guaranty and to perform its obligations hereunder,
and (ii) own and operate its assets, properties and business and carry on its
business as presently conducted.  The execution, delivery and performance of
this Guaranty have been duly authorized by all necessary action on the part of
each Guarantor.

 

(g)           Validity; Binding Effect.  This Guaranty has been duly and validly
executed and delivered by each Guarantor.  This Guaranty constitutes a valid and
legally binding obligation of each Guarantor (and its successors and assigns),
enforceable against each Guarantor (and its successors and assigns) in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors’ rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).

 

(h)           Noncontravention.  The execution, delivery and performance of this
Guaranty by each Guarantor, the consummation of the transaction contemplated
hereby and the compliance with or fulfillment of the terms and provisions hereof
or of any other agreement or instrument contemplated hereby, do not and shall
not (i) conflict with or result in a breach of any of the provisions of the
organizational documents of any Guarantor, (ii) contravene any law which affects
or binds any Guarantor or any of its properties, (iii) result in a breach of,
constitute a default under or give rise to a right of termination or
acceleration under any contract, license, franchise or any other agreement or
instrument to which any Guarantor is a party or by which any of its properties
may be affected or bound, or (iv) require any Guarantor to obtain the approval,
consent or authorization of, or to make any declaration, filing or registration
with, any third party or any governmental authority which has not been obtained
in writing prior to the date of this Agreement.

 

                7.             Acceleration.  (a) If any Event of Default shall
occur and be continuing under the Note or any Guarantor shall, or shall attempt
to, repudiate this Guaranty, or either Borrower or any Guarantor should at any
time become insolvent, or make a general assignment, or if a proceeding in or
under any insolvency law shall be filed or commenced by, or in respect of, any
Guarantor, or if a notice of any lien, levy, or assessment is filed of record
(and if such lien, levy, or assessment is not removed, or if the debt or
obligation giving rise to such lien, levy or assessment is not paid or
satisfied, within 30 days after Guarantor receives notice thereof) with respect
to any assets of any Guarantor by the United States or any department, agency,
or instrumentality thereof, or if any taxes or debts owing at any time or times
hereafter to any one of them becomes a lien or encumbrance upon any assets of
any Guarantor in Lender’s possession, or otherwise securing the obligations of
any Guarantor under this Guaranty (and such lien or encumbrance is not removed,
or if the debt or obligation giving rise to such lien or encumbrance is not paid
or satisfied, within 30 days after Guarantor receives notice thereof), the
Obligations shall for purposes hereof, at Lender’s option, be deemed due and
payable without notice notwithstanding that any such Obligation is not then due
and payable by Borrower.

 

 

 

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                                (b)           Guarantors will promptly (but, in
any event, within two (2) days) notify Lender of any default by any Guarantor in
the performance or observance of any term or condition of any agreement to which
any Guarantor is a party if the effect of such default is to cause, or permit
the holder of any obligation under such agreement to cause, such obligation to
become due prior to its stated maturity, and if such an event occurs and such
acceleration would materially and adversely affect such Guarantor’s ability to
perform its obligations hereunder, Lender shall have the right to accelerate
Guarantors’ obligations hereunder.

 

                8.             Reinstatement.  Anything in this Guaranty to the
contrary notwithstanding, if Lender receives any payment or payments on account
of the Obligations, which payment or payments or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver, or any other party under
any insolvency law, common law or equitable doctrine, then to the extent of any
sum not finally retained by Lender, Guarantors’ obligations to Lender shall be
reinstated, and this Guaranty shall remain in full force and effect (or be
reinstated) until payment shall have been made to Lender, which payment shall be
due on demand.

 

9.             Partial Invalidity; Merger.  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 Guaranty, but
this Guaranty shall be construed as if such invalid, illegal or unenforceable
provision or provisions had never been contained herein.  This Guaranty and the
other Loan Documents constitute the complete agreement of Guarantors, and
supersede all previous understandings and agreements, relating to the subject
matter hereof.  Neither this Guaranty nor any of the terms hereof may be
terminated, amended, supplemented, waived or modified orally, but only by an
instrument in writing signed by Guarantors and Lender.

 

                10.           Titles and Headings; Rules of Construction. 
Titles and headings to articles and sections herein are inserted for convenience
of reference only and are not intended to be a part of or to affect the meaning
or interpretation of this Guaranty.  Whenever the context so requires the use of
or reference to any gender includes the masculine, feminine and neuter genders;
and all terms used in the singular shall have comparable meanings when used in
the plural and vice versa.

 

                11.           Costs.  Lender shall be entitled, in addition to
such other relief as it may be entitled, to collect from Guarantors all of
Lender’s costs and expenses (including, without limitation, reasonable
attorneys’ fees and court costs) incurred in enforcing the terms of this
Guaranty.

 

                12.           Governing Law; Jurisdiction.

 

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

 

                                (b)           As part of the consideration for
new value this day received, Guarantors 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 waives any and all objections thereto.

 

 

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                                (c)           Any judicial proceeding by
Guarantors against Lender 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 Lender to bring any action or proceeding
against Guarantors or their property in the courts of any other jurisdiction.

 

13.           WAIVER OF JURY TRIAL.  EACH GUARANTOR, 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 GUARANTY OR ANY OTHER LOAN DOCUMENT OR ANY OF
THE TRANSACTIONS CONTEMPLATED BY THIS GUARANTY OR ANY COURSE OF CONDUCT,
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF ANY GUARANTOR OR
LENDER WITH RESPECT TO THE LOAN.  NO GUARANTOR 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 GUARANTOR AGAINST
WHICH IT IS TO BE ENFORCED AND LENDER.

 

14.           Notice.  Any and all notices, elections or demands permitted or
required to be made under this Guaranty shall be in writing, signed by the party
giving such notice, election or demand and shall be delivered personally,
telecopied, telexed, or sent by certified mail or overnight via nationally
recognized courier service (such as Federal Express), to the other party at the
address set forth below, or at such other address as may be supplied in writing
and of which receipt has been acknowledged in writing.  The date of personal
delivery, telecopy (with receipt confirmed) or two (2) Business Days after the
date of mailing (or the next Business Day after delivery to such courier
service), as the case may be, shall be the date of such notice, election or
demand.  For the purposes of this Guaranty:

 

The address of Lender is:

 

Horizon Group Properties, Inc.

 

 

77 West Wacker Drive

 

 

 

Suite 4200

 

 

 

Chicago, Illinois 60601

 

 

Attention:

Gary J. Skoien

 

 

Facsimile:

(312) 917-0911

 

 

 

 

with a copy to:

 

Horizon Group Properties, Inc.

 

 

77 West Wacker Drive

 

 

Suite 4200

 

 

 

Chicago, Illinois 60601

 

 

Attention:

David R. Tinkham

 

 

Facsimile:

(312) 917-8440

 

 

 

 

 

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The address of Guarantors is:

 

The Prime Group, Inc.

 

 

Prime Group Limited Partnership

 

 

Prime Group II, L.P.

 

 

 

PGLP, Inc.

 

 

 

Prime International, Inc.

 

 

c/o The Prime Group, Inc.

 

 

77 West Wacker Drive.

 

 

Suite 4200

 

 

Chicago, Illinois 60601

 

 

Attn:

Michael W. Reschke

 

 

Facsimile:

(312) 917-1511

 

 

 

 

with a copy to:

 

The Prime Group, Inc.

 

 

77 West Wacker Drive,

 

 

Suite 4200

 

 

Chicago, Illinois 60601

 

 

Attn:

Robert J. Rudnik

 

 

Facsimile:

(312) 917-8442

 

 

 

 

 

15.           Non-Recourse to Individuals.  Notwithstanding any other provision
of this Guaranty or any other Loan Documents, recourse shall not be made to any
of the individual officers, directors, partners, shareholders, owners, agents or
representatives of any Borrower or any Guarantor who are natural persons (the
“Individuals”), except to the extent of their respective interests in
partnership property; provided, however, that this limitation of liability shall
not reduce the liability that any Individual may otherwise have with respect to
any liability, damage, loss, costs or expenses arising out of fraud or
intentional misrepresentation by any Individual.

 

[signature page follows]

 

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                IN WITNESS WHEREOF, Guarantors have caused this Guaranty to be
executed as of the day and year first above written.

 

 

PRIME GROUP LIMITED PARTNERSHIP

 

 

 

 

 

By:

 

 

 

 

 

Michael W. Reschke

 

 

 

Managing General Partner

 

 

 

 

 

PRIME GROUP II, L.P.

 

 

 

 

 

By:

 

PGLP, INC.,

 

 

 

General Partner

 

 

 

 

 

By:

 

 

 

 

 

Michael W. Reschke

 

 

 

President

 

 

 

 

 

PGLP, INC.

 

 

 

 

 

By:

 

 

 

 

 

Michael W. Reschke

 

 

 

President

 

 

 

 

 

PRIME INTERNATIONAL, INC.

 

 

 

 

 

By:

 

 

 

 

 

Michael W. Reschke

 

 

 

President

 

 

 

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                IN WITNESS WHEREOF, Guarantors have caused this Guaranty to be
executed as of the day and year first above written.

 

 

 

 

THE PRIME GROUP, INC.

 

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

 

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ACKNOWLEDGED AND AGREED:

 

HORIZON GROUP PROPERTIES, INC.

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

Title:

 

 

 

 

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