EXHIBIT 10.32
April 18, 2000
HORIZON GROUP PROPERTIES, INC.
00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Re: PRIME OUTDOOR GROUP
Gentlemen:
Reference is made to that certain Promissory Note to be dated the date
hereof (the "Promissory Note") and issued to Horizon Group Properties, L.P., a
Delaware limited partnership ("LP") and affiliate of Horizon Group Properties,
Inc., a Maryland corporation ("HGP"), to evidence a loan anticipated to be made
by LP to Prime Outdoor Group, L.L.C., a Delaware limited liability company (the
"Company") and affiliate of The Prime Group, Inc., an Illinois corporation
("Prime"), in the principal amount of $1,500,000, and the related Security
Agreement, Guaranty, Pledge Agreement and Collateral Assignment of Membership
Interest, each to be dated the date hereof and executed by the Company, Xxxx
Xxxxxx, Xxxx Xxxxx, Prime and/or affiliates of Prime (collectively, the
"Security Agreements").
Reference is also made to certain preliminary discussions that have
occurred between HGP, Prime, the Company, Xx. Xxxxxx and Xx. Xxxxx concerning a
possible acquisition by HGP (or an affiliate) from Prime of Prime's interest in
the Company (the "Acquisition Transaction"). The purchase price that has been
discussed to date with respect to a possible Acquisition Transaction, based upon
information furnished to date, is an amount equal to Prime's actual equity
investment in the Company, plus interest thereon from the date of any such
equity investment at an annual rate of ten percent (10%), but (i) excluding any
capital contributed other than in the form of equity, such as indebtedness (and
specifically excluding any payments by Prime or its affiliates of principal,
default rate interest, fees and costs of any nature in respect of the
indebtedness under the Promissory Note and/or the Security Agreements), and (ii)
reduced by any distributions from the Company to its equity holders.
Any such Acquisition Transaction would, however, only be made pursuant to
a definitive agreement containing such terms and provisions as may be mutually
agreed to by Prime and HGP and would also be subject to the satisfactory
completion by HGP, in its sole discretion, of legal, business and financial due
diligence, as well as to the availability of HGP of adequate financing in an
amount and on terms and in form satisfactory to HGP in its sole discretion and
to the approval of the terms of any Acquisition Transaction by HGP's board of
directors.
To induce HGP to accept the Promissory Note and the Security Agreements
and to make the loan evidenced thereby, and in consideration of the other
expenditures of time, effort and expense to be undertaken by HGP in connection
with discussions and investigation into the feasibility of the possible
Acquisition Transaction, each of the undersigned Prime, the Company, Xx. Xxxxxx
and Xx. Xxxxx agrees that until the later to occur of (i) sixty (60) days
following the date of the Promissory Note and (ii) the repayment in full of the
Promissory Note, none of the undersigned will, directly of indirectly, through
any representative or otherwise, solicit or entertain offers from, negotiate
with or in any manner encourage, discuss, accept or consider any proposal of any
other person or entity for or relating to the acquisition of the Company or its
business or operations, in whole or in part (whether directly or indirectly,
through purchase of assets, interests or other securities, merger, consolidation
or otherwise), and that each of the undersigned will immediately notify HGP of
any contact from any other person or entity regarding any such offer, proposal
or inquiry and shall keep confidential and shall not disclose without the prior
written consent of HGP (except to the extent otherwise required by law) the
existence of or terms of any discussion as to a possible Acquisition
Transaction.
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The provisions of the immediately preceding paragraph of this letter are
intended to be the binding obligations of each of Prime, the Company, Xx. Xxxxxx
and Xx. Xxxxx. It is acknowledged, however, by each of the undersigned that,
except as specifically provided in the preceding sentence, this letter is merely
an expression of the present discussions of the parties and is not intended as a
binding obligation of the parties, nor shall this letter or any past or future
actions, conduct, discussions or investigations of a possible Acquisition
Transaction by or among such persons, be construed to be a binding agreement or
obligation for an Acquisition Transaction; that such a binding agreement shall
only be created by the execution by Prime and HGP of a definitive agreement in
form and substance satisfactory to, and containing such terms as may be agreed
upon by, each of them, in their sole discretion; that it shall be and remain in
the sole discretion of each of Prime and HGP whether or not to enter into a
definitive agreement for an Acquisition Transaction; and that neither Prime nor
HGP is assuming any express or implied obligation to continue discussions or
negotiations of a possible Acquisition Transaction.
Each of the Company, Xx. Xxxxxx, Xx. Xxxxx and Prime, for itself and its
affiliates, acknowledges that the Promissory Note and the Security Agreements,
if and when executed and delivered by the parties thereto, shall be valid,
binding and enforceable in accordance with their respective terms, regardless of
whether an Acquisition Transaction occurs.
[SIGNATURE PAGE FOLLOWS]
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Each of the undersigned has executed this letter as of the date hereof indicated
above.
THE PRIME GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Its: President
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PRIME OUTDOOR GROUP, L.L.C.
By: /s/ Xxxx Xxxxxx
--------------------------------------
Its: President
---------------------------------
/s/ Xxxx Xxxxxx
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Xxxx Xxxxxx
/s/ Xxxx Xxxxx
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Xxxx Xxxxx
ACKNOWLEDGED:
HORIZON GROUP PROPERTIES, INC.
By: /s/ Xxxxx Xxxxxxx
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Its: CFO
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