PRIME RETAIL INC/BD/
EXHIBIT 10.44 - GUARANTY AND INDEMNITY AGREEMENT
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>a10qex101.txt
<DESCRIPTION>EXHIBIT 10.44 - GUARANTY AND INDEMNITY AGREEMENT
<TEXT>
                              AMENDED AND RESTATED
                        GUARANTY AND INDEMNITY AGREEMENT


     THIS  AMENDED  AND  RESTATED   GUARANTY  AND  INDEMNITY   AGREEMENT   (this
"Agreement")  is  entered  into as of this  31st day of July,  2001 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 have 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 ("Borrower") and
Nomura Asset Capital Corporation, as amended by that certain First Amendment to
Loan Agreement dated as of June ___, 1999 among Borrower, Nebraska LLC, Indiana
LLC and LaSalle Bank National Association, 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. (as so amended and as amended from time to time in
accordance with the terms thereof, the "Loan Agreement").

     B. Pursuant to that certain Guaranty dated as of June 15, 1998 (as amended
from time to time in accordance with the terms thereof, the "Guaranty"), Prime
LP has agreed, jointly and severally, to guarantee certain obligations arising
under the Loan Documents.

     C. Pursuant to that certain Guaranty and Indemnity Agreement dated as of
June 15, 1998 (as amended from time to time in accordance with the terms
thereof, the "Guaranty and Indemnity Agreement"), HGP and HGP LP, among other
things, have 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 Guaranty by Prime LP.

     D. Borrower, HGP, HGP LP and Lender desire to enter into a Second Amendment
to Loan Agreement and Settlement Agreement in the form attached hereto as Annex
A (the "Amendment").

     E. As a condition to the effectiveness of the Amendment, Lender is
requiring Prime LP to reaffirm its obligations under the Guaranty by executing a
Reaffirmation of Guaranty to and for the benefit of Lender (the "Reaffirmation
of Guaranty").

     F. Prime LP, as the successor to Horizon/Glen Outlet Centers Limited
Partnership ("Horizon/Glen LP"), is jointly and severally liable with HGP for
any and all obligations arising under that certain promissory note by
Horizon/Glen LP in favor of First of America Bank - 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").
<PAGE>
     G. In consideration of the agreement of Prime Retail and Prime LP to
provide the foregoing accommodations and for the accommodations of HGP and HGP
LP set forth elsewhere in this Agreement, Prime Retail, Prime LP, HGP and HGP LP
have agreed to 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 Agreement.


                                   ARTICLE TWO


                         REPRESENTATIONS AND WARRANTIES

     2.1 Representations and Warranties of HGP and HGP LP. In order to induce
Prime Retail and Prime LP to enter into the Reaffirmation of 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.
<PAGE>
          (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 Amendment by the parties thereto, no Default or 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 enforcement by Lender of the Loan Documents.

          (e) The outstanding principal balance of the Loan, after giving effect
     to Section 11 of Article 1 of the Amendment, is approximately $34 million.


                                  ARTICLE THREE


                                  GUARANTY FEE

     HGP and HGP LP, jointly and severally, agree to pay Prime LP an annual fee
of $150,000 which shall accrue from June 15, 2001 until the date of the
termination and unconditional release of any and all obligations under the
Guaranty and the Reaffirmation of Guaranty and be payable in equal quarterly
installments in arrears on each March 31, June 30, September 30 and December 31,
commencing September 30, 2001 (and on the date of termination and release).
<PAGE>
                                  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
terminate unless and until there also has been an unconditional release of any
and all obligations of Prime Retail and Prime LP 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 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, 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, 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 to permanently reduce
indebtedness (including 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 Lakeshore Marketplace, 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 Code
in order to maintain HGP's status as a real estate investment trust under the
Code.
<PAGE>
     4.6 Pledge Agreement. Each of HGP and HGP LP acknowledge that its
obligations under this Agreement will be secured pursuant to that certain Pledge
Agreement being entered into contemporaneously herewith by and among HGP LP and
Third HGI, L.L.C. ("Third HGI"), Prime Retail and Prime LP, pursuant to which
HGP LP and Third HGI, among other things, shall pledge to Prime Retail and Prime
LP (i) a 99% limited partnership interest in Borrower and (ii) a 1% general
partnership interest in Borrower (collectively, the "Borrower Interests"), which
shall be subordinate to the pledge of such interests to the Lender. Each of HGP
and HGP LP acknowledge that the Borrower Interests are not in certificated form
and that HGP and HGP LP will cause Borrower not to certificate its ownership
interests unless requested to do so by Lender.

     4.7 Restrictions on Encumbrances. Except only for the liens and security
interests arising under the Mortgage and related documents dated the date hereof
with Greenwich Capital Financial Products related to the Lakeshore Marketplace
center, 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 Lakeshore Marketplace Finance Company, Inc. not to,
execute, cause, allow or suffer any pledge or encumbrance of their limited
liability company interests in Lakeshore Marketplace, LLC.


                                  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 Amendment in the form attached hereto and the
Mortgage and related documents dated the date hereof with Greenwich Capital
Financial Products related to the Lakeshore Marketplace center. In addition,
Prime Retail hereby acknowledges that prior to the date hereof HGP, HGP LP and
their affiliates entered into certain modifications, amendments, sales and
refinancings related to certain HGP properties subject to the Loan Documents,
all as generally described in the periodic reports filed by HGP with the
Securities and Exchange Commission.
<PAGE>
                                  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 Guaranty, the Reaffirmation of
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 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.
<PAGE>

                  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:

        If to HGP or HGP LP Horizon Group Properties, Inc.
                                                5000 Hakes Drive
                                                Norton Shores, MI 49411
                                                Attn:  President

        with a copy to:                         Winston & Strawn
                                                35 W. Wacker Drive
                                                Chicago, IL 60601
                                                Attn:  Wayne D. Boberg

        If to Prime Retail or                   Prime Retail, Inc.
                  Prime LP                      100 East Pratt Street
                                                19th Floor
                                                Baltimore, MD 21202
                                                Attn: C. Alan Schroeder

        with a copy to:                         Winston & Strawn
                                                35 W. Wacker Drive
                                                Chicago, IL 60601
                                                Attn:  Steven J. Gavin

     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, contracts and writings prior
to the date hereof including without limitation the original Guaranty and
Indemnity Agreement.

                                                      [signature page follows]
<PAGE>
                  IN WITNESS WHEREOF the parties hereto have executed this
instrument as of the date and year first above written.

                                          HORIZON GROUP PROPERTIES, INC.

                                          By:      _____________________________

                                          Its:     _____________________________



                                          HORIZON GROUP PROPERTIES, L.P.

                                          By:  HORIZON GROUP PROPERTIES, INC.

                                          By:      _____________________________

                                          Its:     _____________________________



                                                     PRIME RETAIL, INC.

                                          By:      _____________________________

                                          Its:     _____________________________



                                          PRIME RETAIL, L.P.

                                          By:  PRIME RETAIL, INC.

                                          By:      _____________________________

                                          Its:     _____________________________

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