Horizon Group Properties, Inc. ▼

AGREEMENT OF PURCHASE AND SALE

THIS AGREEMENT OF PURCHASE AND SALE (�Agreement�) is made this 18^th day of April, 2003 by and between LAKESHORE MARKETPLACE, LLC a Delaware limited liability company, and MONROE OUTLET CENTER, LLC a Michigan limited liability company (collectively referred to as �Seller�), and RAMCO-GERSHENSON PROPERTIES, L.P., a Delaware limited partnership (�Purchaser�).

RECITALS

A.            Seller is the fee owner of the Land and Building (hereinafter defined) comprising the shopping  . . .

ASSIGNMENT AND ASSUMPTION AGREEMENT

HUNTLEY DEVELOPMENT LIMITED PARTNERSHIP

This Assignment and Assumption Agreement (this �Agreement�) is made as of the 13th  day of June, 2003 by and among The Prime Group Inc., an Illinois corporation (�PGI�), as the holder of the sole limited partner interest of Huntley Development Limited Partnership, an Illinois limited partnership (the �Partnership�), Huntley Development Company, an Illinois corporation and the sole general partner of the Partnership (�HDC�), Horizon Huntley LLC, a Delaware limited liability company (�HHL�)  . . .

ASSIGNMENT AND ASSUMPTION AGREEMENT

HUNTLEY MEADOWS RESIDENTIAL VENTURE

This Assignment and Assumption Agreement (this �Agreement�) is made as of the 13th day of June, 2003 by and among PGLP Holdings, L.L.C., a Delaware limited liability company (�PGLP Holdings�), as a general partner with a fifty percent (50%) interest in Huntley Meadows Residential Venture, an Illinois partnership (the �Partnership�), and Prime/Huntley Meadows Residential, Inc., an Illinois corporation (�P/HMRI�), as a general partner with a fifty percent (50%) interest in the Partnership, Horizon  . . .

HORIZON GROUP PROPERTIES, L.P.
COMMON UNIT AWARD AGREEMENT

        THIS COMMON UNIT AWARD AGREEMENT (this "Agreement") is made as of September    , 2002 (the "Issue Date"), by and between Horizon Group Properties, L.P., a Delaware limited partnership (the "Partnership"), Horizon Group Properties, Inc., a Maryland corporation, in its capacity as the general partner of the Partnership (the "General Partner"), and                        (the "Grantee"). Capitalized terms used herein but not defined herein have the meaning ascribed thereto in the Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of June 15, 1998, as amended to date (the "Partnership Agreement").

        WHEREAS, the Partnership wishes to reward and incentivize the Grantee, who performs valuable services for the benefit of the Partnership, by making the Grantee a Limited Partner and issuing Common Units in the Partnership (the "Common Units") to the Grantee; and

        WHEREAS, the Grantee desires to become a Limited Partner and receive such Common Units from the Partnership; and

        WHEREAS, THE General Partner consents to the Grantee becoming a Limited Partner and to the issuance of the Common Units to the Grantee.

        NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, the parties hereto do hereby agree as follows:

SECTION 1.    GRANT OF COMMON UNITS

        1.1    Grant.    The Partnership hereby issues to the Grantee, and the General Partner hereby consents to such issuance,            Common Units, subject to all of the terms and conditions of this Agreement and the Partnership Agreement, in exchange for prior services rendered to the Partnership (in accordance with Section 4.5 of the Partnership Agreement), such consideration equal to $2.75 per Common Unit for an aggregate consideration of $                        (the "Capital Account").

        1.2    Subscription.    The Grantee hereby subscribes for, and agrees to acquire, the Common Units specified above upon the terms, provisions and conditions set forth herein and in the Partnership Agreement, a copy of which has been delivered to the Grantee, together with a separate counterpart signature page (attached hereto as Annex A) to be signed by the Grantee, as a Limited Partner, and returned with this Agreement.

        1.3    Lock-Up.    During the period commencing on the Issue Date and ending on the one year anniversary of the Issue Date (the "Lock-Up Period"), the Grantee shall not have the right to convert all or any portion of the Common Units issued hereunder into common shares of beneficial interest, par value $.01 per share, of the General Partner (the "Common Shares"). Following the expiration of such Lock-Up Period, the Grantee shall have the Rights described in Section 8.6 of the Partnership Agreement.

SECTION 2.    REPRESENTATIONS AND WARRANTIES

        2.1    Representations and Warranties.    The Grantee hereby represents and warrants to and agrees with the Partnership as follows:

        (a)  Each of the representations and warranties set forth in Section 3.3 of the Partnership Agreement are true and correct with respect to the Grantee as of the Issue Date.




        (b)  The Common Units will be purchased for the account of the Grantee for investment only and not with a view to, nor with any intention of, a distribution or resale thereof, in whole or in part, or the grant of any participation therein. The Grantee acknowledges that the Common Units

CONSENT AND ASSUMPTION AGREEMENT

This Consent and Assumption Agreement (this Agreement) is made as of August 19, 2003 by and among LAKESHORE MARKETPLACE, LLC, a Delaware limited liability company (Seller), RAMCO LAKESHORE LLC, a Delaware limited liability company, f/k/a Lakeshore MP, LLC (Buyer), LAKESHORE MARKETPLACE FINANCE COMPANY, INC., a Delaware corporation, HORIZON GROUP PROPERTIES, L.P., a Delaware limited partnership, HORIZON GROUP PROPERTIES, INC., a Delaware corporation (collectively, whether one or more, Original Guarantor), RAMCO-GERSHENSON PROPERTIES, L.P., a Delaware limited partnership (Guarantor), and WELLS FARGO BANK MINNESOTA, N.A., as trustee for the registered holders of Salomon Brothers Mortgage Securities VII, Inc., Commercial Mortgage Pass-Through Certificates, Series 2001-C2, acting by and through its Master Servicer and General Special Servicer, Midland Loan Services, Inc. (collectively referred to herein as Lender), with reference to the following facts:

RECITALS

A.            Seller has been the owner of certain real property located at 5241 Harvey Street, Norton Shores, Michigan, commonly known as Lakeshore Marketplace Shopping Center, and more particularly described in Exhibit A attached hereto and incorporated herein by reference for all purposes together with all improvements, fixtures and personal property located thereon and or/described in any of the herein defined Loan Documents which, with the above described real property (the Real Property), is collectively referred to as the Property.  Further, as used herein, the term Property shall mean the Property or, where applicable, such portions thereof as are owned by Buyer.  The Property is encumbered by a first lien and security interest on the Property evidenced by, among other things, that certain (i) Mortgage dated July 30, 2001, executed by Seller toGreenwich Capital Financial Products, Inc. (the Original Lender), as mortgagee, filed for record and recorded in Liber 3242, Page 914 in the official records of Muskegon County, Michigan (the Mortgage), (ii) Assignment of Leases dated July 30, 2001, executed by Seller for the benefit of Original Lender, filed for record and recorded in Liber 3242, Page 958 in the official records of Muskegon County, Michigan (the Assignment of Leases), (iii) Environmental Indemnity Agreement dated July 30, 2001, executed by Seller as indemnitor thereunder for the benefit of Original Lender (the Environmental Indemnity), (iv) Replacement Reserve and Security Agreement dated July 30, 2001, executed by Seller for the benefit of Original Lender (the Replacement Reserve Agreement), (v) Collection and Deposit Account Agreement dated July 30, 2001, executed by Seller, Original Lender and the other parties named therein (the Deposit Account Agreement), and (vi) Tenant Improvement and Leasing Commission Reserve and Security Agreement dated July 30, 2001, executed by Seller for the benefit of Original Lender (the TI/LC Reserve

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Agreement).  Original Guarantor guaranteed certain obligations of Seller under the Loan Documents (as hereinafter defined) pursuant to that certain Exceptions to Non-Recourse Guaranty dated July 30, 2001, executed by Original Guarantor, as guarantor, for the benefit of Original Lender (the Guaranty).  The personal property, fixtures and other collateral covered by the Mortgage and the other Loan Documents is subject to a first lien and security interest on the Property evidenced by, among other things, that certain (i) UCC-1 Financing Statement filed as number 4419973 with the Office of the Secretary of State of Michigan, and (ii) UCC-1 Financing Statement filed for record and recorded Liber 3242, Page 417 in the official records of Muskegon County, Michigan (collectively, said UCC-1 Financing Statements shall be referred to as the UCC-1 Financing Statement).  The  Mortgage, the Assignment, the Environmental Indemnity, the Replacement Reserve Agreement, the Deposit Account Agreement, the TI/LC Agreement, the Guaranty and the UCC-1 Financing Statement and any all other documents, instruments or agreements evidencing or creating a lien or security interest relating to any of the Property, whether or not referenced herein, are collectively referred to herein as the Security Documents.

B.            The Security Documents secure a repayment of a loan (the Loan) to Seller evidenced by a Promissory Note (the Note) dated July 30, 2001, in the original principal amount of $15,993,000.00 executed by Seller, as maker, in favor of Original Lender, as payee.  The Security Documents further secure performance of all the obligations, covenants, and agreements contained in the  Mortgage and in all other documents executed by Seller or any other party evidencing, securing, memorializing or in a any way relating to the Loan or perfecting the lien or security interest created by any Security Document (such documents, instruments and agreements together with the Note, the  Mortgage, the Guaranty, the Environmental Indemnity and the other Security Documents, as same may be amended, reinstated, consolidated, supplemented, increased, decreased, restated, extended or otherwise modified at any time, and from time to time, are collectively and individually referred to herein as the Loan Documents).

C.            Lender now holds all of Original Lenders interest in and under the Mortgage and the other Loan Documents.  Midland Loan Services, Inc. services the Loan as Master Servicer and General Special Servicer, pursuant to that certain Pooling and Servicing Agreement dated as of December 1, 2001.

D.            Seller and Buyer entered into that certain Agreement of Purchase and Sale (as amended, the Contract of Sale) dated April 18, 2003, for the sale and purchase of the Property.  Unless Lender elects to consent to the transfer, the provisions of the Loan Documents entitle Lender to, among other things, accelerate payment of the balance owing under the Note, to foreclose the Mortgage and exercise any and all rights, remedies or recourses to which it is entitled under any of the Loan Documents.  Seller will sell, transfer, and convey the Property, subject to the Loan Documents, to Buyer (i) if Buyer assumes, to Lenders full satisfaction, the Loan and all of Sellers obligations, agreements, covenants, liabilities, representations, warranties, duties and the like (collectively, the Obligations) arising under the Loan Documents, and (ii) if Lender agrees not to exercise its right under the Mortgage to accelerate the unpaid balance of the Note as a result of such transfer to Buyer and allows Buyer to assume the Loan and all of Sellers obligations under the Loan Documents.

E.             Subject to the terms and conditions of this Agreement and the Loan Documents, Lender is willing to consent to the transfer of the Property to Buyer and permit Buyers assumption of the Loan and Obligations arising under the Loan Documents.  Lenders willingness to consent to such assumption by Buyer is expressly conditioned on, among other things, Buyers agreement that it is specifically assuming all Obligations under the Note and other Loan Documents which are fully and unconditionally recourse subject, however, to the non recourse provisions set forth in the Loan Documents.

RECORDING REQUESTED BY AND

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WHEN RECORDED MAIL TO:

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Anderson, McCoy & Orta, P.C.

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100 N. Broadway, Suite 2650

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Oklahoma City, Oklahoma 73102

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Loan No. 14027

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SPACE ABOVE THIS LINE
FOR RECORDER?S USE

CONSENT AND ASSUMPTION AGREEMENT

This Consent and Assumption Agreement (?Assumption Agreement?) is dated as of the 22nd day of May, 2003 (?Closing Date?), between and among WELLS FARGO BANK MINNESOTA, N.A., AS  . . .

Document prepared by and after
recording should be returned to:

Beth S. Rubin

SCHIFF HARDIN & WAITE

6600 Sears Tower

Chicago, IL 60606

For Recorder Use Only

CONSTRUCTION DEED OF TRUST, SECURITY AGREEMENT,
FINANCING STATEMENT AND FIXTURE FILING

(with Assignment of Rents)

NOTICE:  THIS INSTRUMENT SECURES THE REPAYMENT OF A PROMISSORY NOTE WHICH CONTAINS VARIABLE RATES OF INTEREST.

ATTENTION:  COUNTY RECORDERTHIS INSTRUMENT COVERS GOODS THAT ARE OR ARE TO BECOME FIXTURES ON THE REAL PROPERTY DESCRIBED HEREIN AND IS TO BE FILED FOR RECORD IN THE RECORDS WHERE DEEDS OF TRUST ON REAL ESTATE ARE RECORDED.  ADDITIONALLY, THIS INSTRUMENT SHOULD BE APPROPRIATELY INDEXED, NOT ONLY AS A DEED OF TRUST, BUT ALSO AS A FINANCING STATEMENT COVERING GOODS THAT ARE OR ARE TO BECOME FIXTURES ON THE REAL PROPERTY DESCRIBED HEREIN.  THE MAILING ADDRESSES OF THE TRUSTOR (DEBTOR) AND BENEFICIARY (SECURED PARTY) ARE SET FORTH IN SECTION 7.05 OF THIS DEED OF TRUST.

THIS CONSTRUCTION DEED OF TRUST, SECURITY AGREEMENT, FINANCING STATEMENT AND FIXTURE FILING (WITH ASSIGNMENT OF RENTS) (this Deed of Trust) is made as of April  24, 2003, by and among Horizon Group Properties, L.P. a Delaware limited partnership (Trustor), with an address of 77 West Wacker Drive, Suite 4200, Chicago, Illinois  60601, First American Title (Trustee), whose address is 1850 South Central Street, Visalia, California 93277, and Amster Trading Company Charitable Remainder Unitrust

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dated March 10, 2003 (Beneficiary), whose address is 23811 Chagrin Boulevard, Suite 200, Beachwood, Ohio 44122.

THIS DEED OF TRUST is given, inter alia, for the purpose of securing a loan (the Loan) from Beneficiary, as lender, to Trustor, as borrower, the proceeds of which are to be used, inter alia, for the purpose of constructing improvements on the real property located in the County of Tulare, State of California, more particularly described in Exhibit A attached hereto and by this reference incorporated herein (the Premises).  The information required by California Civil Code Section 3097(j) is as follows:

Name and address

Amster Trading Company Charitable Remainder Unitrust

of Lender:

dated March 10, 2003

23811 Chagrin Boulevard, Suite 900

Beachwood, Ohio  44122

Name and address

Horizon Group Properties, L.P.

of Owner:

77 West Wacker Drive, Suite 4200

Chicago, Illinois 60601

FOR GOOD AND VALUABLE CONSIDERATION, including the indebtedness herein recited and the trust herein created, the receipt of which is hereby acknowledged, Trustor hereby irrevocably grants, transfers, conveys and assigns to Trustee, IN TRUST, WITH POWER OF SALE, for the benefit and security of Beneficiary, subject to the terms and conditions hereinafter set forth, the Premises;

TOGETHER WITH any and all buildings and improvements now or hereafter erected on the Premises owned by Trustor including, but not limited to the fixtures, attachments, appliances, equipment, machinery, and other articles attached to said buildings and improvements (the Improvements), all of which shall be deemed and construed to be a part of the realty;

TOGETHER WITH all rents, issues, profits, royalties, income and other benefits (collectively, the Rents) derived from any lease, sublease, license, franchise, concession or other agreement (collectively, the Leases) now or hereafter affecting all or any portion of the Premises and the Improvements or the use or occupancy thereof;

TOGETHER WITH all interests, estates or other claims, both in law and in equity, which Trustor now has or may hereafter acquire in the Premises or the Improvements;

TOGETHER WITH all easements, rights-of-way and rights now owned or hereafter acquired by Trustor used in connection therewith or as a means of access thereto, including, without limiting the generality of the foregoing, all rights pursuant to any trackage agreement and all rights to the nonexclusive use of common drive entries, and all tenements, hereditaments and appurtenances thereof and thereto, and all water and water rights and shares of stock evidencing the same;

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TOGETHER WITH all leasehold estate, right, title and interest of Trustor in and to all Leases or subleases covering the Premises, the Improvements or any portion thereof now or hereafter existing or entered into, and all right, title and interest of Trustor thereunder including, without limitation, all cash or security deposits, advance rentals, and deposits or payments of similar nature;

TOGETHER WITH all right, title and interest now owned or hereafter acquired by Trustor in and to any greater estate in the Premises or the Improvements;

TOGETHER WITH all right, title and interest of Trustor, now owned or hereafter acquired, in and to any land lying within the right-of-way of any street, open or proposed, adjoining the Premises, and any and all sidewalks, alleys and strips and gores of land adjacent to or used in connection with the Premises;

TOGETHER WITH all fixtures and personal property now or hereafter owned by Trustor and attached to or contained in and used in connection with the Premises or the Improvements as more fully described herein;

TOGETHER WITH all the estate, interest, right, title, other claim or demand, both in law and in equity, including claims or demands with respect to the proceeds of insurance in effect with respect thereto, which Trustor now has or may hereafter acquire in the Premises or the Improvements, and any and all awards made for the taking by eminent domain, or by any proceeding or purchase in lieu thereof, of the whole or any part of the Trust Estate (as hereinafter defined), including, without limitation, any awards resulting from a change of grade of streets and awards for severance damages.

The entire estate, property and interest hereby conveyed to Trustee may hereafter be collectively referred to as the Trust Estate.

FOR THE PURPOSE OF SECURING:

(a)           payment of indebtedness in the total principal amount of THREE MILLION ONE HUNDRED THOUSAND and No/100 Dollars ($3,100,000.00), with interest thereon, evidenced by that certain Promissory Note in the principal amount of THREE MILLION ONE HUNDRED THOUSAND and No/100 Dollars ($3,100,000.00) (the Note) of even date herewith, executed by Trustor pursuant to that certain Construction and Term Loan Agreement between Trustor and Beneficiary of even date herewith (the Loan Agreement) which Note and any and all modifications, extensions, renewals and replacements thereof are by this reference hereby made a part hereof;

(b)           payment of all sums advanced by Beneficiary to protect the Trust Estate, with interest thereon from the date of the advance at the Interest Rate or the Default Interest Rate as applicable (as each such term is defined in the Note) (which rates of interest an hereinafter sometimes referred to collectively as the Agreed Rate);

(c)           payment of all other sums, with interest thereon, which may hereafter be loaned to Trustor, or its successors or assigns, by Beneficiary, or its successors or assigns

DEMAND PROMISSORY NOTE

$2,000,000.00

May 20, 2003

FOR VALUE RECEIVED, Horizon Group Properties, Inc., a Maryland corporation (?Maker?), promises to pay on DEMAND to Pleasant Lake Apts. Limited Partnership, an Ohio limited partnership, and Pleasant Lake Apts. Corp., an Ohio corporation (collectively, ?Payee?), in lawful money of the United States of America, the principal sum of Two Million Dollars ($2,000,000.00).

1.                       . . .

                               EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as 
of this ____ day of June, 1998 by and between Horizon Group Properties, Inc., 
a Maryland corporation ("Employer") and Richard A. Berman, an individual 
domiciled in the State of Illinois ("Executive").

                                     WITNESSETH

     WHEREAS, Employer is engaged primarily in the ownership, development, 
construction, acquisition, leasing, marketing and management of factory 
outlet centers throughout the  . . .

ENVIRONMENTAL INDEMNITY AGREEMENT

THIS ENVIRONMENTAL INDEMNITY AGREEMENT (this Agreement), dated as of April 24, 2003 is entered into and delivered, jointly and severally, by HORIZON GROUP PROPERTIES, L.P., a Delaware limited partnership (Borrower) and HORIZON GROUP PROPERTIES, INC., a Maryland corporation (Guarantor) to and for the benefit of  AMSTER TRADING COMPANY CHARITABLE REMAINDER UNITRUST DATED MARCH 10, 2003 (Lender).

R E C I T A L S:

A.    Pursuant to the terms and conditions of a certain Construction and Term Loan Agreement, dated of even date herewith, between Borrower and Lender (as amended, modified, replaced or restated from time to time, the Loan Agreement), Lender has agreed to make certain Loans (as defined below) to Borrower.

B.    The loans to be made pursuant to the Loan Agreement will consist of: (i) a term loan of Three Million One Hundred Thousand Dollars ($3,100,000) (the Term Loan) and (ii) a construction loan of up to Three Million One Hundred Thousand Dollars ($3,100,000) (the Construction Loan) (the Construction Loan and the Term Loan are collectively referred to herein as the Loans).

C.    As a condition precedent to Lenders extension of the Loans to Borrower and in consideration therefor, Lender has required, among other things, the execution and delivery of: (i) this Agreement by Borrower and Guarantor,  (ii) that certain Promissory Note, dated of even date herewith, from Borrower to Lender in the original principal amount of Three Million One Hundred Thousand Dollars ($3,100,000)(as amended, modified, replaced or restated from time to time, the Note), (iii) that certain Construction Deed of Trust, Security Agreement and Fixture Filing Financing Statement, dated of even date herewith, among Borrower, as trustor, First American Title, as trustee, and Lender, as beneficiary, encumbering the real property, improvements and personalty described therein (Property) (as amended, modified, replaced or restated from time to time, the Deed of Trust), and (iv) various other Loan Documents (as defined in the Loan Agreement).

D.    Guarantor: (i) is the general partner of Borrower and has a financial interest in Borrower, (ii) understands that Lender will not make the Loans to Borrower unless Guarantor executes and delivers this Agreement to Lender, and (iii) has agreed to execute and deliver this Agreement.

E.     Capitalized terms used and not specifically defined herein shall bear the same meaning as established in the Loan Agreement.

                        ENVIRONMENTAL INDEMNITY AGREEMENT

     THIS ENVIRONMENTAL INDEMNITY AGREEMENT (this "AGREEMENT") is made as of the
___ day of July, 2002 by LAUGHLIN OUTLET CENTER LLC, a Delaware limited
liability company ("HORIZON LAUGHLIN"), MEDFORD OUTLET CENTER LLC, a Delaware
limited liability company ("HORIZON MEDFORD"), and WARRENTON OUTLET CENTER LLC,
a Delaware limited liability company ("HORIZON WARRENTON"; and Horizon
Warrenton, together with Horizon Laughlin and Horizon Medford, each a "BORROWER"
and collectively, " . . .

GUARANTY OF PAYMENT

THIS GUARANTY OF PAYMENT (this �Guaranty�) is dated as of November 3, 2003 and given by HORIZON GROUP PROPERTIES, INC., a Maryland corporation (the �Guarantor�), to and for the benefit of PLEASANT LAKE APTS. LIMITED PARTNERSHIP (�Lender�).

R E C I T A L S:

A.                                   Pursuant to the terms and conditions of a certain Promissory Note, dated of  . . .

                        GUARANTY OF RECOURSE OBLIGATIONS

     This GUARANTY OF RECOURSE OBLIGATIONS (this "GUARANTY") is executed as of
July __, 2002 by Horizon Group Properties, Inc., a Maryland corporation, and
Horizon Group Properties, L.P., a Delaware limited partnership, each having an
address at c/o Horizon Group Properties, Inc., 77 West Wacker Drive, Suite 4200,
Chicago, Illinois 60601 (each, a "GUARANTOR" and collectively, "GUARANTORS"),
for the benefit of UBS WARBURG REAL ESTATE INVESTMENTS INC., a Delaware
corporation, having an address at 1285  . . .

GUARANTY AGREEMENT

THIS GUARANTY AGREEMENT (�Guaranty�) is made as of the 27th day of October, 1999, by the undersigned (hereinafter referred to as �Guarantors� whether one or more), in favor of BEAL BANK, S.S.B., a state savings bank (�Lender�).

W I T N E S S E T H:

A.                                    Lender has agreed to make a loan (the �Loan�) to HUNTLEY DEVELOPMENT LIMITED  . . .

GUARANTY AGREEMENT

THIS GUARANTY AGREEMENT (�Guaranty�) is made this 13th day of June, 2003, by the undersigned (hereinafter referred to as �Guarantors� whether one or more), in favor of BEAL BANK, S.S.B., a savings bank organized under the laws of the State of Texas (�Lender�).

WITNESSETH:

A.                                    Lender has made a loan (the �Loan�) to HUNTLEY DEVELOPMENT  . . .

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,  . . .

                               GUARANTY AGREEMENT

     THIS GUARANTY AGREEMENT ("Guaranty") is made as of the 10th day of July,
2002, by the undersigned (hereinafter referred to individually as "Guarantor"
and collectively as "Guarantors"), in favor of BEAL BANK, S.S.B., a savings bank
organized under the laws of the State of Texas ("Lender").

                              W I T N E S S E T H:

     A.   Lender has agreed to make a loan (the "Loan") to MONROE OUTLET
CENTER,LLC, a Michigan limited liability company (" . . .

INDEMNIFICATION AND FEE AGREEMENT

(UBS LOAN)

THIS INDEMNIFICATION AND FEE AGREEMENT (UBS LOAN) (this Agreement) is made and entered into as of the 3rd day of September, 2003, between Horizon Group Properties, Inc., a Maryland corporation (the Company), and Gary J. Skoien, an individual (GJS).

WITNESSETH:

WHEREAS, GJS currently is the Chief Executive Officer of the Company; and

WHEREAS, on the date hereof, 500 Hakes Drive LLC, a Delaware limited liability company and an affiliate of the Company (Borrower), obtained a loan (the Loan) from UBS Real Estate Investments Inc. (Lender), the repayment of which is secured by, among other collateral and security, a mortgage on the office building owned by Borrower and located at 500 Hakes Drive, Norton Shores, Michigan; and

WHEREAS, as a condition to making the Loan to Borrower, Lender has required GJS to execute and deliver to Lender (i) that certain Indemnity and Guaranty Agreement, dated as of the date hereof (the Guaranty Agreement), from GJS in favor of Lender, and (ii) that certain Hazardous Substances Indemnity Agreement, dated as of the date hereof (the Hazardous Substances Indemnity Agreement), from Borrower and GJS in favor of Lender (the Guaranty Agreement and the Hazardous Substance Indemnity Agreement are sometimes referred to herein, together, as the Indemnity Agreements and, individually, as an Indemnity Agreement); and

WHEREAS, as a condition to executing and delivering to Lender the Indemnity Agreements, GJS has required that the Company execute and deliver to GJS this Agreement.

NOW, THEREFORE, in consideration of the GJSs agreement to execute and deliver the Indemnity Agreements so that Borrower can obtain the Loan from Lender and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agrees as follows:

INDEMNIFICATION AND GUARANTY AGREEMENT

This Indemnification and Guaranty Agreement (this ?Agreement?) is entered into as of the 13th day of June, 2003, by Horizon Huntley Finance LLC, a Delaware limited liability company (?HHFL?), Horizon Huntley LLC, a Delaware limited liability company (?HHL?; HHFL and HHL are each individually referred to herein as an ?Indemnifying Party? and collectively referred to herein as the ?Indemnifying Parties?), and Horizon Group Properties, Inc., a Maryland corporation (the ?HGPI?), in favor of The Prime Group, Inc., an Illinois corporation (?PGI?), Prime Group Limited Partnership, an Illinois limited partnership (?PGLP?), Prime Group II, L.P., an Illinois limited partnership (?PGII?), Prime Group III, L.P., an Illinois limited partnership (?PGIII?), and Michael W. Reschke (PGI, PGLP, PGII, PGIII and Michael W. Reschke are each individually referred to herein as a ?Prime Party? and collectively referred to herein as the ?Prime Parties?).

W I T N E S S E T H:

WHEREAS, HHFL, HHL, HGI, PGI, Huntley Development Company, an Illinois corporation (?HDC?), Prime/Huntley Meadows Residential, Inc., an Illinois corporation (?P/HMRI?), and PGLP Holdings, L.L.C., a Delaware limited liability company (?PGLP Holdings?), have entered into the Partnership Interests Purchase Agreement, dated as of June 13, 2003 (the ?Purchase Agreement?);

WHEREAS, pursuant to separate Guarantees, each dated as of December 18, 1995, as amended from time to time, the Prime Parties are guarantors under the Amended and Restated Agreement and Assignment of Net Profits Interests, dated as of October 27, 1999, by and among Huntley Development Limited Partnership, an Illinois limited partnership, Huntley Meadows Residential Venture, an Illinois partnership, and Beal Bank, S.S.B., a Texas state savings bank, as amended by that certain First Amendment to Amended and Restated Agreement and Assignment of Net Profits Interests, dated as of January 30, 2002 (the ?Beal Net Profits Assignment?);

WHEREAS, Michael W. Reschke has also guaranteed the obligations under the Beal Mortgage Loan Documents (the Beal Mortgage Loan Documents and the Beal Net Profits Assignment are collectively referred to herein as the ?Beal Agreements?);

WHEREAS, HHFL and HHL have agreed, as an inducement for PGI, HDC, P/HRMI and PGLP to enter into the Purchase Agreement, and as a condition to the closing of the transactions contemplated by the Purchase Agreement, to unconditionally indemnify the Prime Parties and their respective officers, directors, employees, partners, members, managers, shareholders, agents and affiliates (collectively with the Prime Parties, the ?Indemnified Parties?) from and against any and all losses arising out of or relating to the Beal Agreements, and HGPI has agreed to guarantee HHLF?s and HHL?s agreements and obligations hereunder; and

WHEREAS, capitalized terms use herein and not otherwise defined herein shall have the respective meanings ascribed to such terms in the Purchase Agreement.

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NOW, THEREFORE, in consideration of the mutual covenants and conditions hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1.                                       Indemnification.  The Indemnifying Parties hereby agree to, jointly and severally, unconditionally indemnify, defend and hold the Indemnified Parties harmless from and in respect of any and all losses, damages, claims, liabilities, obligations (including guarantee obligations), suits, actions, judgments, liens, fees, taxes, penalties, costs and expenses of any nature whatsoever (including legal fees and expenses) (collectively, ?Losses?) that they may incur arising out of, in connection with or relating to the Prime Parties? respective guarantee obligations under the Beal Agreements.

2.                                       Guarantee.  HGPI hereby unconditionally and irrevocably guarantees to the Indemnified Parties, without offset or deduction, (a) the prompt and full discharge when due by the Indemnifying Parties of all of the Indemnifying Parties? payment obligations under this Agreement in accordance with the terms hereof, the guarantee under this clause (a) constituting hereby a guarantee of payment and not of collection, and (b) the punctual and faithful performance by HGPI of each and every duty, agreement, covenant and other obligation of the Indemnifying Parties under and in accordance with the terms of this Agreement.  HGPI also hereby agrees that, if any Indemnifying Party fails to perform and discharge promptly all such obligations and liabilities in accordance with such terms, HGPI will, forthwith, upon demand, perform and discharge the same.  The obligations of the Indemnifying Parties hereby guaranteed are hereinafter called the ?Obligations?.  The unconditional obligation of HGPI hereunder will not be affected, impaired or released by any extension, waiver or amendment.  Without limiting the generality of the foregoing, HGPI specifically agrees that it shall not be necessary or required, and that it shall not be entitled to require, that the Indemnified Parties file suit or proceed to obtain or assert a claim for personal judgment against any Indemnifying Party for the Obligations or make any effort at collection of the Obligations from any Indemnifying Party or foreclose against or seek to realize upon any security now or hereafter existing for the Obligations or file suit or proceed to obtain or assert a claim for personal judgment against any other party liable for the Obligations or make any effort at collection of the Obligations from any such other party or exercise or assert any other right or remedy to which any of them is or may be entitled in connection with the Obligations or any security or other guarantee therefor or assert or file any claim against the assets of any Indemnifying Party or other person liable for the Obligations, or any part thereof, before or as a condition of enforcing the liability of  HGPI under this Section 2 or requiring payment of said Obligations by HGPI hereunder, or at any time thereafter.

3.                                       Consent.  None of the Indemnifying Parties or HGPI will, without the prior written consent of the Prime Parties, modify or amend any of the Beal Agreements in any manner that could reasonably be expected to extend or increase the liabilities or obligations of any Prime Party thereunder or with respect thereto.

4.                                       Severability.  If any term, provision, covenant or restriction of this Agreement is held by a governmental entity to be invalid, void, unenforceable or against its regulatory policy, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

AGREEMENT REGARDING ASSIGNMENTS
OF PRLP COMMON UNITS AND HGPLP COMMON UNITS IN
LIQUIDATION OF PFLP

        THIS AGREEMENT REGARDING ASSIGNMENTS OF PRLP COMMON UNITS AND HGPLP COMMON UNITS IN LIQUIDATION OF PFLP (this "Agreement") is made and entered into as of the 17th day of May, 2002, by and among Prime Financing Limited Partnership, an Illinois limited partnership ("PFLP"), Prime Group II, L.P., an Illinois limited partnership ("PG2LP"), Prime Group Limited Partnership, an Illinois limited partnership ("Prime LP"), The Prime Group, Inc., an Illinois corporation ("PGI"), Prime Finance, Inc., an Illinois corporation, ("PFI"), PGLP, Inc., an Illinois corporation ("PGLP Inc."), Michael W. Reschke ("MWR"), Edward J. John ("EJJ"), Glenn D. Reschke ("GDR"), Warren H. John ("WHJ"), and Robert J. Rudnik ("RJR").

W I T N E S S E T H:

        WHEREAS, PG2LP is the sole limited partner of, with a ninety-nine percent (99%) interest in, Prime Group III, L.P., an Illinois limited partnership ("PG3LP"), and PGLP, Inc. is the sole general partner of, with a one percent (1%) interest in, PG3LP; and

        WHEREAS, on the date hereof, immediately prior to the transactions contemplated by this Agreement, PG3LP distributed to PG2LP all of its assets, consisting of (i) a 19.4021% limited partnership interest in PFLP, and (ii) 3,081 common units in Horizon Group Properties, L.P. ("HGPLP Common Units"), in connection with the liquidation and dissolution of PG3LP and accordance with the applicable terms of the Agreement of Limited Partnership of PG3LP, dated as of April 13, 1994, and as approved by PG2LP and PGLP Inc., the sole partners of PG3LP (the "PG3LP Liquidating Distributions"); and

        WHEREAS, as of the date hereof, following the PG3LP Liquidating Distributions, (i) PFI is the sole general partner of PFLP with a one percent (1%) interest in PFLP, (ii) PG2LP is a limited partner of PFLP with a 52.9410% interest in PFLP, (iii) Prime LP is a limited partner in PFLP with a 17.9073% interest in PFLP, and (iv) PGI is a limited partner in PFLP with a 28.1517% interest in PFLP; and

        WHEREAS, as of the date hereof, as set forth on Exhibit A attached hereto (i) MWR, EJJ, GDR, WHJ, and RJR are (a) the holders of all of the partnership interests in Prime LP, (b) the holders of all of the limited partnership interests in PG2LP, (c) the holders of all of the issued and outstanding shares of stock of PGI, and (d) the holders of all of the issued and outstanding shares of stock of PGLP Inc., and (ii) PGLP Inc. is the sole general partner of PG2LP with a 1.2117% interest in PG2LP; and

        WHEREAS, PFLP currently holds 277,850 HGPLP Common Units and 5,557,000 common units in Prime Retail, L.P., a Delaware limited partnership ("PRLP Common Units"); and

        WHEREAS, the parties hereto have determined that it is in their best interests (i) that PFLP be liquidated and, in connection therewith, the HGPLP Common Units and the PRLP Common Units held by PFLP be distributed by PFLP to its partners in the manner and in the proportions set forth or described herein and (ii) that the PRLP Common Units received by PG2LP and Prime LP in the liquidation of PFLP be distributed by PG2LP and Prime LP to the partners of PG2LP and Prime LP; and

        WHEREAS, the parties hereto have agreed to take all actions and steps to cause, effect, accomplish and evidence the transactions described above, and, in connection therewith, have agreed

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that not all of the transfers and assignments of the PRLP Common Units described in this Agreement will be effected and accomplished by the issuance of a separate certificate or separate certificates representing the PRLP Common Units and that PFLP is authorized and directed to cause certificates representing the PRLP Common Units to be directly issued in the name of the persons who are the ultimate assignees of the PRLP Common Units currently held by PFLP as described below; and

        WHEREAS, the parties hereto have agreed to enter into this Agreement to cause, effect and accomplish the transfer and assignments of the PRLP Common Units and the HGLP Common Units described herein and the other transactions described herein.

        NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency which are hereby acknowledged, the parties hereto hereby agree as follows:

[THIS DOCUMENT CONTAINS A SUMMARY OF THE FAIRNESS OPINION OF HOULIHAN LOKEY HOWARD & ZUKIN FINANCIAL ADVISORS, INC. DATED JULY 8, 2003 DELIVERED TO THE BOARD OF DIRECTORS AND THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS OF PRIME RETAIL, INC. IN CONNECTION WITH THE PROPOSED TRANSACTION BETWEEN PRIME RETAIL, INC. AND THE LIGHTSTONE GROUP, LLC, TOGETHER WITH A COPY OF SUCH OPINION, AND IS BEING FURNISHED TO CERTAIN HOLDERS OF THE COMPANY'S PREFERRED STOCK.

PRIME RETAIL PLANS TO FILE WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC") A PROXY STATEMENT AND OTHER RELEVANT DOCUMENTS CONCERNING THE PROPOSED TRANSACTION. INVESTORS OF PRIME RETAIL ARE URGED TO READ THE PROXY STATEMENT WHEN IT IS FILED AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. INVESTORS WILL BE ABLE TO OBTAIN THE DOCUMENTS, WHEN THEY BECOME AVAILABLE, FREE OF CHARGE AT THE WEBSITE MAINTAINED BY THE SEC AT WWW.SEC.GOV. IN ADDITION, INVESTORS MAY OBTAIN DOCUMENTS FILED WITH THE SEC BY PRIME RETAIL FREE OF CHARGE BY ACCESSING THE COMPANY'S WEBSITE OR BY REQUESTING SUCH DOCUMENTS IN WRITING FROM PRIME RETAIL, INC., 100 EAST PRATT STREET, 19TH FLOOR, BALTIMORE, MARYLAND 21202 OR BY TELEPHONE AT (410) 234-0782.

PRIME RETAIL, ITS DIRECTORS AND EXECUTIVE OFFICERS AND CERTAIN OF PRIME RETAIL'S EMPLOYEES MAY BE DEEMED TO BE PARTICIPANTS IN THE SOLICITATION OF PROXIES FROM THE STOCKHOLDERS OF PRIME RETAIL IN CONNECTION WITH THE PROPOSED TRANSACTION. THESE PARTICIPANTS MAY HAVE INTERESTS IN THE ACQUISITION, IF CONSUMMATED, INCLUDING INTERESTS RESULTING FROM HOLDING EQUITY INTERESTS IN PRIME RETAIL OR ITS OPERATING PARTNERSHIP. INFORMATION ABOUT THE INTERESTS OF DIRECTORS AND EXECUTIVE OFFICERS OF PRIME RETAIL AND THEIR OWNERSHIP OF SECURITIES OF PRIME RETAIL WILL BE SET FORTH IN THE PROXY STATEMENT.

INVESTORS SHOULD READ THE PROXY STATEMENT CAREFULLY WHEN IT BECOMES AVAILABLE BEFORE MAKING ANY VOTING OR INVESTMENT DECISIONS.]

Opinion of Houlihan Lokey Howard & Zukin Financial Advisors, Inc. to the Special Committee and Board of Directors of Prime Retail, Inc.

        In July 2002, Prime Retail, Inc. ("Prime" or the "Company") retained Houlihan Lokey Howard & Zukin Capital ("Houlihan Lokey") to serve as the financial advisor to the Company. In connection with the services contemplated in Houlihan Lokey's engagement with the Company, the special committee of the Company's board of directors (the "Special Committee") requested that Houlihan Lokey's affiliate, Houlihan Lokey Howard & Zukin Financial Advisors, Inc. ("HLHZFA"), render a written opinion to the board of directors of the Company as to the fairness, from a financial point of view, of the consideration to be received by the Company or its holders of the Company's common stock, series A preferred stock, series B Preferred stock and common units (each as a class, but not as to the relative fairness among such classes of securities holders), as the case may be, in connection with the proposed merger with The Lightstone Group, LLC ("Lightstone").

        The Company retained Houlihan Lokey based upon Houlihan Lokey's experience in the valuation of businesses and their securities in connection with restructuring transactions, mergers, acquisitions, recapitalizations and similar transactions, particularly with respect to REITs and other real estate companies. Houlihan Lokey is a nationally recognized investment banking firm that is continually engaged in providing financial advisory services and rendering fairness opinions in connection with mergers and acquisitions, leveraged buyouts, business valuations and securities valuations for a variety

of regulatory and planning purposes, recapitalizations, financial restructurings and private placements of debt and equity securities.

        On July 8, 2003, HLHZFA delivered its written opinion (the "Opinion") to the Special Committee and the board of directors to the effect that, as of the date of such Opinion, on the basis of its analysis summarized below and subject to the limitations described below: (i) the aggregate consideration to be received collectively by the holders of the Company's series A preferred stock, series B preferred stock, and common stock and common units in connection with the merger is fair, from a financial point of view, to such holders collectively; and (ii) (a) the consideration to be received by the holders of the Company's series A preferred stock in connection with the merger is fair, from a financial point of view, to the holders of the Company's series A preferred stock, (b) the consideration to be received by the holders of the Company's series B preferred stock in connection with the merger is fair, from a financial point of view, to the holders of the Company's series B preferred stock, (c) the consideration to be received by the holders of the Company's common stock in connection with the merger is fair, from a financial point of view, to the holders of the Company's common stock, and (d) the consideration to be received by the holders of the common units (other than the Company) in connection with the merger is fair, from a financial point of view, to such holders of the common units.

        The full text of the Opinion, which describes, among other things, general procedures followed, matters considered and limitations on the review undertaken by Houlihan Lokey in rendering its Opinion is attached hereto and is incorporated herein by reference. The summary of the HLHZFA Opinion herein is qualified in its entirety by reference to the full text of the HLHZFA Opinion which is attached hereto as Annex A. You are urged to read HLHZFA's Opinion in its entirety.

        The Opinion does not constitute a recommendation to the Special Committee, the board of directors or any of Prime's security holders on whether or not to support the merger and does not constitute a recommendation to any security holder on whether or not to vote in favor of or against any matter set forth herein. The Opinion is furnished for the benefit of the Special Committee and the board of directors in evaluating the merger, and, by its terms, may not be relied upon by any other person without the written consent of Houlihan Lokey and HLHZFA, except to the extent required by applicable law.

        As compensation to HLHZFA for its services in connection with the rendering of the Opinion, Prime agreed to pay HLHZFA an aggregate fee of $900,000. Prime also agreed to indemnify Houlihan Lokey and its affiliates and related persons against certain liabilities, including liabilities under federal securities laws that arise out of the engagement of Houlihan Lokey, and to reimburse Houlihan Lokey for its reasonable expenses. Additionally, upon the successful consummation of the merger, Houlihan Lokey will receive $2,100,000 in fees, plus reimbursement of its expenses, from Prime for financial advisory and investment banking services performed by Houlihan Lokey on behalf of Prime.

        The Opinion does not address: (i) the Company's underlying business decision to effect the merger, (ii) the tax consequences of the merger to the holders of the series A preferred stock, series B preferred stock, common stock or common units, (iii) the fairness, from a financial point of view, of the consideration to be received by the holders of the Company's series A preferred stock in connection with the merger vis--vis the fairness, from a financial point of view, of the consideration to be received by the holders of the Company's series B preferred stock or common stock or common units in connection with the merger (iv) the fairness, from a financial point of view, of the consideration to be received by the holders of the Company's series B preferred stock in connection with the merger vis--vis the fairness, from a financial point of view, of the consideration to be received by the holders of the Company's series A preferred stock or common stock or common units in connection with the merger (v) the fairness, from a financial point of view, of the consideration to be received by the holders of the Company's common stock in connection with the merger vis--vis the fairness, from a financial point of view, of the consideration to be received by the holders of the

GUARANTY OF PAYMENT AND COMPLETION

THIS GUARANTY OF PAYMENT AND COMPLETION (this Guaranty) is dated as of April 24, 2003 and given by HORIZON GROUP PROPERTIES, INC., a Maryland corporation (the Guarantor), to and for the benefit of AMSTER TRADING COMPANY CHARITABLE REMAINDER UNITRUST DATED MARCH 10, 2003 (Lender).

R E C I T A L S:

A.            Pursuant to the terms and conditions of a certain Construction and Term Loan Agreement, dated of even date herewith, between HORIZON GROUP PROPERTIES, L.P., a Delaware limited partnership (Borrower) and Lender (as amended, modified, replaced or restated from time to time, the Loan Agreement), Lender has agreed to make certain Loans (as defined below) to Borrower.

B.            The loans to be made pursuant to the Loan Agreement will consist of: (i) a term loan of Three Million One Hundred Thousand Dollars ($3,100,000) (the Term Loan) and (ii) a construction loan of up to Three Million One Hundred Thousand Dollars ($3,100,000) (the Construction Loan)(the Construction Loan and the Term Loan are collectively referred to herein as the Loans).

C.            As a condition precedent to Lenders extension of the Loans to Borrower and in consideration therefor, Lender has required, among other things, the execution and delivery of: (i) this Guaranty by Guarantor, (ii) that certain Promissory Note, dated of even date herewith, from Borrower to Lender in the original principal amount of Three Million One Hundred Thousand Dollars ($3,100,000)(as amended, modified, replaced or restated from time to time, the Note), (iii) that certain Construction Deed of Trust, Security Agreement and Fixture Filing Financing Statement, dated of even date herewith, among Borrower, as trustor, First American Title, as trustee, and Lender, as beneficiary, encumbering the real property, improvements and personalty described therein (Premises) (as amended, modified, replaced or restated from time to time, the Deed of Trust), and (iv) various other Loan Documents (as defined in the Loan Agreement).

D.            Guarantor: (i) is the general partner of Borrower and has a financial interest in Borrower, (ii) understands that Lender will not make the Loans to Borrower unless Guarantor executes and delivers this Guaranty to Lender, and (iii) has agreed to execute and deliver this Guaranty to Lender.

E.             All terms not otherwise defined herein shall have the meaning set forth in the Loan Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, Guarantor hereby agrees as follows:

1.             Guaranty of Payment.  Guarantor hereby unconditionally and irrevocably guaranties to Lender, the punctual payment and performance when due, whether at stated maturity or by acceleration

1

or otherwise, of the indebtedness and other obligations of Borrower to Lender evidenced by the Note and any other amounts that may become owing by Borrower under the Loan Documents (such indebtedness, obligations and other amounts are hereinafter referred to as Payment Obligations).  This Guaranty is a present and continuing guaranty of payment and not of collectibility, and Lender shall not be required to prosecute collection, enforcement or other remedies against Borrower or any other guarantor of the Payment Obligations, or to enforce or resort to any collateral for the repayment of the Payment Obligations or other rights or remedies pertaining thereto, before calling on Guarantor for payment. If for any reason Borrower shall fail or be unable to pay, punctually and fully, any of the Payment Obligations, Guarantor shall pay such obligations to Lender in full immediately upon Lenders written demand.  One or more successive actions may be brought against Guarantor, as often as Lender deems advisable, until all of the Payment Obligations are paid and performed in full.  The Payment Obligations, the Construction Obligations (defined below) together with all other payment and performance obligations of Guarantor hereunder are referred to herein as Borrowers Obligations.

2.             Performance Guaranty.

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