Document:

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 

 

 

 

1

 

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.

 

 

2

 

 

                                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]

 

 

 

3

 

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:

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

 

 

4Exhibit
10.1

 

AMENDMENT

 

THIS
AMENDMENT is entered into as of February 11, 2003, between CoBANK, ACB
(“CoBank”) and DAKOTA GROWERS PASTA COMPANY, INC., Carrington, North Dakota
(the “Company”).

 

BACKGROUND

 

CoBank and the Company are parties to a Master Loan Agreement dated
June 20, 2001 (such agreement, as previously amended, is hereinafter referred
to as the “MLA”).  CoBank and the
Company now desire to amend the MLA. 
For that reason, and for valuable consideration (the receipt and
sufficiency of which are hereby acknowledged), CoBank and the Company agree as
follows:

 

1.                  Section 10(C)
of the MLA is hereby amended and restated to read as follows:

 

SECTION
10.  Financial Covenants.  Unless otherwise agreed to
in writing, while this agreement is in effect:

 

(C)   Consolidated
Funded Debt to Consolidated Cash Flow Ratio.  The Company and its
consolidated Subsidiary, on a combined basis, will have at the end of each
fiscal quarter of the Company, a Consolidated Funded Debt to
Consolidated Cash Flow of not more than 3.0 to 1.0 calculated on a trailing
four quarter basis.  Consolidated Funded
Debt means all debt which would in accordance GAAP, constitute long term debt
and including any current portion thereof including: (a) any debt with a
maturity of more than one year after the creation of such debt, (b) any debt
outstanding under a revolving credit or similar agreement providing for
borrowings (and renewables and extensions thereof) which pursuant to its terms
would constitute long term debt in accordance with GAAP, (c) any Capital Lease
obligation and (d) any guarantee with respect to Funded Debt of another
person.   Notwithstanding anything to
the contrary contained herein any debt outstanding under a revolving credit or
similar agreement providing borrowings which is paid down for a period of 30
consecutive days during any 12 months period (and not merely refinanced with a
short term credit facility) will not be deemed to constitute Funded Debt.    Consolidated Cash Flow shall mean the sum
of Consolidated Net Earnings after taxes of the Company and its Subsidiaries
plus: (1) provision for any applicable income taxes; (ii) depreciation and
amortization; and (iii) Consolidated Interest Expense for the period.

 

2.                  A new Section
22 of the MLA is being added in its entirety and shall read as follows:

 

SECTION 22. 
Agency and Intercreditor Agreement.  The Company acknowledges that all loans made by CoBank to the
Company are subject to the terms of an Agency and Intercreditor Agreement dated
as of July 15, 1998, by and between CoBank (under the name of its predecessor
St. Paul Bank for Cooperatives), Massachusetts Mutual Life Insurance Company,
MML Bay State Life Insurance Company, CM Life Insurance Company, The Security
Mutual Life Insurance Company of Lincoln, Nebraska, and The Canada Life
Assurance Company (referred to collectively as the “Lenders”).  The Company hereby reaffirms and consents to
the terms thereof.  Notwithstanding any
other provision of this MLA or any present or future Supplement hereto, the
aggregate outstanding principal balances on all loans made by CoBank to the
Company (including face amounts of any outstanding letters of credit) may not
at any time exceed 49.99% of the aggregate outstanding principal balances on
all loans to the Company by the Lenders. 
The Company shall manage all draw requests and repayments in such as way
as to ensure that such 49.99% limitation is at no time exceeded.  Any failure of the Company to do so shall
constitute an immediate event of default hereunder.

 

Except as set forth in this
amendment, the MLA, including all amendments thereto, shall continue in full
force and effect as written.

 

 

IN WITNESS
WHEREOF, the parties have caused this amendment to be executed by their duly
authorized officers as of the date shown above.

 

	
  CoBANK, ACB

  	
  DAKOTA GROWERS PASTA COMPANY, 

  INC.

  
	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
  /s/
  Thomas Friezen

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
  CFO

  
						

 

2

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