AGREEMENT
AGREEMENT dated February 1, 1998 among PRIME RETAIL, INC., a
Maryland corporation ("Prime"), HORIZON GROUP, INC., a Michigan corporation
("Horizon"), XX. XXXXX X. XXXXXXX, a resident of the State of California
("Xxxxxxx"), individually and as trustee of the Xxxxx X. Xxxxxxx Living Trust
dated May 28, 1996, as amended ("Trust"), and PACIFIC HOLDING COMPANY, a sole
proprietorship of Xxxxxxx ("Pacific").
In consideration of the mutual representations, warranties,
covenants and agreements contained herein, the parties hereto, intending to
be legally bound, hereby agree as follows:
1. DEFINITIONS. For purposes of this Agreement:
(a) "Acquisition Proposal" shall have the meaning ascribed thereto
in the Merger Agreement.
(b) "Affiliate" shall mean, with respect to any Xxxxxxx Signatory,
a Person which directly, or indirectly through one or more intermediaries, is
controlled by such Xxxxxxx Signatory. As used in the preceding sentence, the
term "control" (including the term "controlled by") shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract, or otherwise, but in no event
shall Xxxx Food Company, Inc. or any of its subsidiaries be an Affiliate of
any Xxxxxxx Signatory unless and until any Xxxxxxx Signatory Beneficially
Owns at least a majority of any class of voting capital stock of Xxxx Food
Company, Inc. or any subsidiary of Xxxx Food Company, Inc., in which case
Xxxx Food Company, Inc. or such subsidiary, as applicable, shall be deemed an
Affiliate of such Xxxxxxx Signatory.
(c) "Beneficially Own", "Beneficial Owner" or "Beneficial
Ownership" with respect to any Shares or securities shall mean having
ownership of record or "beneficial ownership" of such securities (as
determined pursuant to Rule 13d-3 under the Exchange Act), including pursuant
to any agreement, arrangement or understanding, whether or not in writing.
Without duplicative counting of the same securities by the same holder,
securities Beneficially Owned by a Person shall include securities
Beneficially Owned by all other Persons with whom such Person would
constitute a "group" as within the meanings of Section 13(d)(3) of the
Exchange Act.
(d) "Commission" shall mean the United States Securities and
Exchange Commission.
(e) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
(f) "Horizon Common Stock" shall mean at any time the common
stock, $0.01 par value, of Horizon.
(g) "Horizon Partnership" shall mean Horizon/Xxxx Outlet Centers
Limited Partnership, a Delaware limited partnership.
(h) "Merger Agreement" shall mean that certain Amended and
Restated Agreement and Plan of Merger entered into concurrently herewith by
and among Prime, Horizon, Horizon Partnership, Prime Retail, L.P. ("Prime
Partnership"), a Delaware limited partnership, Sky Merger Corp. and Sky
Newco, L.P., a Delaware limited partnership, as such agreement may be amended
from time to time in a manner that does not (i) reduce or change the type of
the consideration payable to holders of Horizon Common Stock thereunder, or
(ii) otherwise adversely affect in a material way the rights of holders of
Horizon Common Stock thereunder.
(i) "Mergers" shall have the meaning ascribed thereto in the
Merger Agreement.
(j) "Xxxxxxx Entities" shall mean the Xxxxxxx Signatories and each
of their Affiliates.
(k) "Xxxxxxx Signatories" shall collectively mean Xxxxxxx, Trust
and Pacific.
(l) "Person" shall mean an individual, corporation, partnership,
limited liability company, joint venture, association, trust, unincorporated
organization or other entity.
(m) "Pledge" shall mean any bona fide pledge to a financial
institution by a Xxxxxxx Signatory of all or any portion of the shares of
Horizon Common Stock owned of record or Beneficially Owned by such Xxxxxxx
Signatory securing indebtedness for money borrowed, as the same may amended,
supplemented, restated, replaced, refinanced or otherwise modified from time
to time; provided, however, that in no event shall any Pledge limit or
restrict the right of any Xxxxxxx Entity to vote the Shares in the manner
contemplated by this Agreement absent a breach or default thereunder or under
any related loan or security agreement.
(n) "Shares" shall mean all shares of Horizon Common Stock held of
record or Beneficially Owned by any of the Xxxxxxx Entities, whether issued,
heretofore owned or hereafter acquired.
(o) "Transactions" shall have the meaning ascribed thereto in the
Merger Agreement.
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2. AGREEMENT TO VOTE. Each of the Xxxxxxx Signatories, by this
Agreement, hereby agrees that at any meeting of the holders of Horizon Common
Stock, however called, and in connection with any written consent of the
holders of Horizon Common Stock, such Xxxxxxx Signatory shall vote (or cause
to be voted) the Shares held of record or Beneficially Owned by such Xxxxxxx
Signatory or its or his Affiliates, (i) in favor of the execution and
delivery by Horizon and Horizon Partnership of the Merger Agreement and the
approval of the terms thereof and each of the other actions contemplated by
the Merger Agreement, including the consummation of the Transactions and this
Agreement and any other actions reasonably required in furtherance thereof
and hereof; and (ii) against any proposal or transaction that would
reasonably be expected to impede, frustrate, prevent or nullify the Merger
Agreement, the Transactions or any of the other actions contemplated hereby
or by the Merger Agreement. Each of the Xxxxxxx Signatories acknowledges
receipt and review of a copy of the Merger Agreement.
3. NO SOLICITATION. For the period commencing on the date hereof
and ending on the earliest of (i) the consummation of the transactions under
the Merger Agreement, (ii) the termination of the Merger Agreement in
accordance with its terms, or (iii) July 31, 1998, each of the Xxxxxxx
Signatories shall not, and shall cause each of its or his Affiliates not to,
directly or indirectly, through any agent or representative or otherwise
invite, initiate, solicit or knowingly encourage (including by way of
furnishing information), or respond to, any inquiries or the making of any
proposal by any person or entity (other than Prime or any Affiliate of Prime)
that constitutes or could reasonably be expected to lead to, an Acquisition
Proposal (including without limitation any inquiries or the making of any
proposal that constitutes or could reasonably be expected to lead to any
renegotiation of or revision to the rights and obligations of Horizon
Partnership under the Dole Lease in connection with or in contemplation of an
Acquisition Proposal), or otherwise cooperate with, or assist or participate
in or facilitate or encourage any effort or attempt by any person to do or
seek any of the foregoing. If any of the Xxxxxxx Signatories or their
Affiliates receives any such inquiry or proposal or Acquisition Proposal,
then the applicable Xxxxxxx Signatory will promptly inform Prime in writing
of the existence thereof. The Xxxxxxx Signatories each will, and will cause
its or his Affiliates to, immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any of the foregoing.
4. OTHER COVENANTS, REPRESENTATIONS AND WARRANTIES. Each of the
Xxxxxxx Signatories hereby represents and warrants to Prime and agrees as
follows:
(a) OWNERSHIP OF SHARES. Xxxxxxx is the record and Beneficial
Owner of 1,099,800 shares of Horizon Common Stock. On
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the date hereof, such 1,099,800 shares of Horizon Common Stock constitute all
of the Shares owned of record or Beneficially Owned by the Xxxxxxx Entities.
Except for any Pledge, none of the Shares are subject to any voting trust
agreement or other contract, agreement, arrangement, commitment or
understanding restricting or otherwise relating to the voting, dividend
rights or disposition of the Shares, other than this Agreement. Xxxxxxx has
sole power with respect to the matters set forth in this Agreement with
respect to all of such 1,099,800 shares of Horizon Common Stock, including
the power to vote the Shares in the manner contemplated by Section 2 hereof,
with no limitations, qualifications or restrictions on such rights, subject
to applicable securities laws, the terms of this Agreement and any Pledge.
In the event that any Shares are acquired after the date hereof, one of the
Xxxxxxx Signatories will have sole power with respect to the matters set
forth in this Agreement with respect to all of such Shares acquired after the
date hereof, with no limitations, qualifications or restrictions on such
rights, subject to any Pledge and the terms of this Agreement.
(b) RESTRICTION ON TRANSFER, PROXIES AND NON-INTERFERENCE. Except
as applicable in connection with the transactions contemplated under the
Merger Agreement, and except for a Pledge, each Xxxxxxx Signatory shall not,
directly or indirectly, and shall cause each of its or his Affiliates not to:
(i) offer for sale, sell, transfer, tender, pledge, encumber, assign or
otherwise dispose of, or enter into any contract, option or other arrangement
or understanding with respect to or consent to the offer for sale, transfer,
tender, pledge, encumbrance, assignment or other disposition of, any or all
of the Shares or any interest therein, except in any such case in a
transaction not involving an Acquisition Proposal and to a Person which,
simultaneously with such sale, transfer, tender, pledge, encumbrance,
assignment, disposition, contract of understanding, agrees in writing to be
bound by the terms of this Agreement in an agreement supplementary hereto in
form and substance acceptable to Prime and Horizon; (ii) except as
contemplated by this Agreement, grant any proxies or powers of attorney,
deposit any Shares into a voting trust or enter into a voting agreement with
respect to any Shares; or (iii) take any action that would make any
representation or warranty of any of the Xxxxxxx Signatories contained herein
untrue or incorrect or have the effect of preventing or disabling any of the
Xxxxxxx Signatories from performing its obligations under this Agreement.
(c) POWER; BINDING AGREEMENT. Each of the Xxxxxxx Signatories has
the legal capacity, power and authority to enter into and perform all of such
Xxxxxxx Signatory's obligations under this Agreement. The execution,
delivery and performance of this Agreement by each of the Xxxxxxx Signatories
will not violate any other agreement to which such Xxxxxxx Signatory is a
party including, without limitation, any voting agreement, stockholders
agreement or voting trust. This Agreement has been duly and
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validly executed and delivered by each Xxxxxxx Signatory and constitutes a
valid and binding agreement of such Xxxxxxx Signatory, enforceable against
such Xxxxxxx Signatory in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally. There is no beneficiary or
holder of a voting trust certificate or other interest of any trust of which
a Xxxxxxx Signatory is trustee whose consent is required for the execution
and delivery of this Agreement or the consummation by such Xxxxxxx Signatory
of the transactions contemplated hereby.
(d) NO CONFLICTS. (i) No filing with, and no permit,
authorization, consent or approval of, any state or federal public body or
authority is necessary for the execution of this Agreement by each Xxxxxxx
Signatory and the consummation by such Xxxxxxx Signatory of the transactions
contemplated hereby other than filings, if any, required under the Exchange
Act and (ii) none of the execution and delivery of this Agreement by such
Xxxxxxx Signatory, the consummation by such Xxxxxxx Signatory of the
transactions contemplated hereby or compliance by such Xxxxxxx Signatory with
any of the provisions hereof shall (A) conflict with or result in any breach
of any organizational documents, if applicable, of such Xxxxxxx Signatory,
(B) result in a violation or breach of, or constitute (with or without notice
or lapse of time or both) a default (or give rise to any third party right of
termination, cancellation, modification or acceleration) under any of the
terms, conditions or provisions of any note, bond, mortgage, indenture,
license, contract, commitment, arrangement, understanding, agreement or other
instrument or obligation of any kind to which such Xxxxxxx Signatory is a
party or by which such Xxxxxxx Signatory or any of such Xxxxxxx Signatory's
properties or assets may be bound, or (C) violate any order, writ,
injunction, decree, judgment, order, statute, rule or regulation applicable
to such Xxxxxxx Signatory, or any of such Xxxxxxx Signatory's properties or
assets (including without limitation the Shares).
(e) NO ENCUMBRANCES. The Shares and the certificates representing
such Shares are, and at all times during the term hereof will be, held by
Xxxxxxx or the applicable Xxxxxxx Entity, or by a nominee or custodian for
the benefit of Xxxxxxx or the applicable Xxxxxxx Entity, free and clear of
all liens, security interests, proxies, voting trusts or agreements or any
other encumbrances whatsoever, except for a Pledge and any such encumbrances
and proxies arising hereunder.
(f) NO FINDER'S FEES. No broker, investment banker, financial
advisor or other person is entitled to any broker's, finder's, financial
adviser's or other similar fee or commission in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf
of any Xxxxxxx Entity.
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(g) WAIVER OF APPRAISAL RIGHTS. Each Xxxxxxx Signatory hereby
waives, and agrees to cause each of its or his Affiliates that Beneficially
Owns any Shares to waive, any rights of appraisal or rights to dissent from
the Mergers that he or it may have.
(h) RELIANCE BY PRIME. Each Xxxxxxx Signatory understands and
acknowledges that Prime is entering into, and causing Prime Partnership to
enter into, the Merger Agreement in reliance upon such Xxxxxxx Signatory's
execution and delivery of this Agreement.
(i) FURTHER ASSURANCES. From time to time, at the other party's
request and without further consideration, each party hereto shall execute
and deliver such additional documents and take all such further lawful action
as may be reasonably necessary or desirable to consummate and make effective,
in the most expeditious manner practicable, the transactions contemplated by
this Agreement.
(j) There is no breach or default under, nor any event or
circumstance which with notice or lapse of time or both would constitute a
material breach or default under the Pledge or any loan or security agreement
related thereto.
5. STOP TRANSFER. Each Xxxxxxx Signatory agrees with, and
covenants to, Prime that such Xxxxxxx Signatory shall not request that
Horizon register the transfer (book-entry or otherwise) of any certificate or
uncertificated interest representing any of the Shares held of record or
Beneficially Owned by him or it or any of his or its Affiliates, unless such
transfer is made in compliance with this Agreement. In the event of a stock
dividend or distribution, or any change in the Horizon Common Stock by reason
of any stock dividend, split-up, recapitalization, combination, exchange of
shares or the like, the term "Shares" shall be deemed to refer to and include
the Shares as well as all such stock dividends and distributions and any
shares into which or for which any or all of the Shares may be changed or
exchanged.
6. TERMINATION. The covenants and agreements contained herein
with respect to the Shares shall terminate upon the earliest of (i)
consummation of the transactions under the Merger Agreement, (ii) termination
of the Merger Agreement in accordance with its terms, and (iii)July 31, 1998.
7. CONFIDENTIALITY. Each of the parties hereto agrees that it
will (a) use its best efforts to keep confidential (except for such
disclosure to (i) attorneys, accountants, bankers, underwriters, agents, and
employees as may be appropriate in the furtherance of the transactions
contemplated and hereby, by the Merger Agreement, (ii) the agent or trustee
with respect to the secured financing evidenced by the Loan Agreement dated
as of September 12, 1996 by and between Second Horizon Group Limited
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Partnership and Nomura Asset Capital Corporation ("NACC") and the documents
comprising the exhibits and schedules thereto, which NACC has assigned to
LaSalle National Bank, as Trustee under the certain Pooling and Servicing
Agreement dated as of December 17, 1996 among Asset Securitization
Corporation, LaSalle National Bank, ABN AMICO N.V. and the Servicer named
therein, or (iii) such other persons as required by law) all information of a
confidential nature obtained by it from the other parties hereto (including
the terms of this Agreement) in connection with the transactions described in
the preceding clause (i)) and (b) return to each other party all documents
and other materials obtained from such other party in connection herewith
should this Agreement be terminated. No party hereto will issue any press
release or make any other public announcement relating to the transaction
contemplated hereby without the prior consent of the other party hereto,
except that any party may make any disclosure required to be made by it under
applicable law (including without limitation the federal securities laws) or
stock exchange rules and regulations if such party determines in good faith
that it is appropriate to do so and gives prior notice to the other parties
hereto, and affords to the other parties hereto a reasonable opportunity to
comment on the proposed disclosure and makes a commercially reasonable effort
to incorporate any comments or requested revisions.
8. MISCELLANEOUS.
(a) ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties with respect to the ownership, voting and
disposition the Shares in connection with the Merger and supersedes all other
prior agreements and understandings, both written and oral, between the
parties with respect to the subject matter hereof.
(b) CERTAIN EVENTS. Each Xxxxxxx Signatory agrees that this
Agreement and the obligations hereunder shall attach to the Shares and shall
be binding upon any person or entity to which legal or beneficial ownership
of such Shares shall pass, whether by operation of law or otherwise,
including, without limitation, Pacific's successors. Notwithstanding any
transfer of Shares, the transferor shall remain liable for the performance of
all obligations under this Agreement of the transferor.
(c) ASSIGNMENT. This Agreement shall not be assigned by operation
of law or otherwise without the prior written consent of the other party,
provided that (i) Prime may assign, in its sole discretion, its rights and
obligations hereunder to Prime Partnership or to any direct or indirect
wholly-owned subsidiary of Prime, but no such assignment shall relieve Prime
of its obligations hereunder, and (ii) any Xxxxxxx Signatory may assign its
rights and obligations hereunder to any Xxxxxxx Affiliate in connection with
a transfer of Shares to such Xxxxxxx Affiliate,
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provided that such Xxxxxxx Affiliate shall agree in a writing acceptable in
form and substance to Prime and Horizon to be bound by the terms and
conditions hereof.
(d) AMENDMENTS; WAIVERS, ETC. This Agreement may not be amended,
changed, supplemented, waived or otherwise modified or terminated except upon
the execution and delivery of a written agreement executed by the relevant
parties hereto.
(e) NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram,
telex or telecopy, or by mail (registered or certified mail, postage prepaid,
return receipt requested) or by any courier service, such as Federal Express,
providing proof of delivery. All communications hereunder shall be delivered
to the respective parties at the following addresses:
If to a Xxxxxxx Pacific Holding Company
Signatory: 00000 Xxxxxxxx Xxxx.
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxx
Fax No.: (000) 000-0000
copy to: O'Melveny & Xxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Fax No.: (000) 000-0000
If to Prime: Prime Retail, Inc.
000 Xxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
C. Xxxx Xxxxxxxxx
Fax No.: (000) 000-0000
copy to: Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Fax No.: (000) 000-0000
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If to Horizon:
Horizon Group, Inc.
0000 Xxxxx Xxxxx
Xxxxxx Xxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxxx
Xxxxx Xxxxxx
Fax.: (000) 000-0000
with a copy to:
Xxxxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxxxx
Xxx X. Xxxxx
Fax No.: (000) 000-0000
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
(f) SEVERABILITY. Whenever possible, each provision or portion of
any provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of
any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or portion of any provision in such jurisdiction, and
this Agreement will be reformed, construed and enforced in such jurisdiction
as if such invalid, illegal or unenforceable provision or portion of any
provision had never been contained herein.
(g) SPECIFIC PERFORMANCE. Each of the parties hereto recognizes
and acknowledges that a breach by it of any covenants or agreements contained
in this Agreement will cause the other party to sustain damages for which it
would not have an adequate remedy at law for money damages, and therefore
each of the parties hereto agrees that in the event of any such breach the
aggrieved party shall be entitled to the remedy of specific performance of
such covenants and agreements and injunctive and other equitable relief in
addition to any other remedy to which it may be entitled, at law or in equity.
(h) REMEDIES CUMULATIVE. All rights, powers and remedies provided
under this Agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise of any
thereof by any party shall not preclude the simultaneous or later exercise of
any other such right, power or remedy by such party.
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(i) NO WAIVER. The failure of any party hereto to exercise any
right, power or remedy provided under this Agreement or otherwise available
in respect hereof at law or in equity, or to insist upon compliance by any
other party hereto with its obligations hereunder, and any custom or practice
of the parties at variance with the terms hereof, shall not constitute a
waiver by such party of its right to exercise any such or other right, power
or remedy or to demand such compliance.
(j) NO THIRD PARTY BENEFICIARIES. This Agreement is not intended
to be for the benefit of, and shall not be enforceable by, any person or
entity who or which is not a party hereto.
(k) DESCRIPTIVE HEADINGS. The descriptive headings used herein
are inserted for convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of this Agreement.
(l) COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of which, taken
together, shall constitute one and the same Agreement.
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IN WITNESS WHEREOF, Prime, Horizon and each Xxxxxxx Party have caused
this Agreement to be duly executed as of the day and year first above written.
PRIME RETAIL, INC.
By: /S/ C. Xxxx Xxxxxxxxx
Name: C. Xxxx Xxxxxxxxx
Title:Senior Vice President-
General Counsel and Secretary
HORIZON GROUP, INC.
By: /S/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: President
_________________________
By: /S/ Xxxxx X. Xxxxxxx
Name:Xxxxx X. Xxxxxxx
Title:________
XXXXX X. XXXXXXX LIVING TRUST
DATED MAY 28, 1996, AS AMENDED
By: /S/ Xxxxx X. Xxxxxxx
Name:Xxxxx X. Xxxxxxx
Title:Trustee
PACIFIC HOLDING COMPANY
By: /S/ Xxxxx X. Xxxxxxx
Name:Xxxxx X. Xxxxxxx
Title: Chief Executive Officer
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