Horizon Group Properties, LP ▼

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.

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

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 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 (" . . .

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:

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

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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.

(a)           Guarantor absolutely, unconditionally and irre­vocably undertakes and guarantees, for the benefit of Lender and each and every present and future holder or holders of the Note or assignee or assignees of the Loan Documents, that all construction obligations of Borrower for completion of the Project (as defined in the Loan Agreement) in accordance with the Plans and Specifications (as defined in the Loan Agreement), all Leases (as defined in the Loan Agreement) and the Loan Documents and other performance obligations of Borrower under the Loan Documents (referred to herein as  Construction Obligations) shall be completed by to the applicable completion date specified in the Loan Agreement and in accordance with the other terms and conditions contained in the Loan Agreement, free and clear of any and all liens, charges, security interests and claims of any kind and nature whatsoever, subject to the rights of Borrower to cure such liens, charges, security interests and claims under the Deed of Trust.  Guarantor shall cause the Construction Obligations to be performed, completed and paid for in the manner and at the applicable times required to be so performed, completed and paid for by Borrower under the Loan Agreement, to the extent that Borrower fails to do so at any and all applicable times.

December 23, 2002

Pleasant Lake Apts. Corp.
Pleasant Lake Apts., Ltd.
23811 Chagrin Boulevard
Suite 200
Beachwood, OH 44122

Attn: Howard Amster

Re:


Agreement to Purchase Units in
Horizon Group Properties, L.P. (the "Partnership")

Dear Howard:

        This letter is to confirm the agreement of Pleasant Lake Apts., Ltd. ("Pleasant Lake"), an affiliate of Howard M. Amster, to purchase 145,349 limited partnership units (the "Units") in Horizon Group Properties, L.P. (the "Partnership") from Horizon Group Properties, Inc. ("HGPI") and the agreement of HGPI to sell the Units to Pleasant Lake at a purchase price of $5.16 per Unit for an aggregate purchase price of up to $750,000.00, payable in full and in cash within three business days following the receipt of notice from HGPI to Pleasant Lake that the conditions set forth in this letter have been satisfied including the receipt of the amendment to the partnership agreement of the Partnership.

Prepared By And

After Recording Return To:

Lawrence C. Adams, Esq.

Jenkens & Gilchrist, A Professional Corporation

1445 Ross Avenue, Suite 3200

Dallas, Texas 75202

ATTENTION:  COUNTY CLERK--THIS 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 MORTGAGES ON REAL ESTATE ARE RECORDED.  ADDITIONALLY, THIS INSTRUMENT SHOULD BE APPROPRIATELY INDEXED, NOT ONLY AS A MORTGAGE, 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 MORTGAGOR (DEBTOR) AND MORTGAGEE (SECURED PARTY) ARE SET FORTH IN THIS INSTRUMENT.

MORTGAGE, SECURITY AGREEMENT,

AND

ASSIGNMENT OF LEASES AND RENTS

This MORTAGE, SECURITY AGREEMENT AND ASSIGNMENT OF LEASES AND RENTS (hereinafter referred to as this Mortgage) is executed by HUNTLEY DEVELOPMENT LIMITED PARTNERSHIP, an Illinois limited partnership (Mortgagor), whose address for notice hereunder is 77 West Wacker Drive, Suite  4200, Chicago, Illinois 60601, Attn:  Gary J. Skoien, to and in favor of BEAL BANK, S.S.B., a savings bank organized under the laws of the State of Texas (Mortgagee), whose address for notice hereunder is 6000 Legacy Drive, 4 East, Plano, Texas 75024, Attn: William T. Saurenmann:

1

W I T N E S S E T H:

ARTICLE I

DEFINITIONS

1.1                                 As used herein, the following terms shall have the following meanings:

(a)                                  Applicable Environmental Laws:  All Legal Requirements now or hereafter applicable to the use, treatment, processing, disposal, transportation, storage or handling of hazardous or toxic wastes or substances, including, without limitation, the Resource Conservation and Recovery Act of 1987 (42 U.S.C. Section 6901 et seq.), as amended from time to time, and regulations promulgated thereunder or pursuant thereto, and the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. Section 9601 et seq.), as amended from time to time, and regulations promulgated thereunder or pursuant thereto.

(b)                                 Debtor Relief Laws:  Any applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, insolvency, reorganization or similar laws, whether federal or state or of a country other than the United States of America, affecting the rights or remedies of creditors generally, as in effect from time to time.

(c)                                  Escrowed Funds:  The amounts paid by Mortgagor to Mortgagee pursuant to Paragraph 12.4 hereof to be held by Mortgagee in a fund for the payment of the Impositions, subject to the provisions of such Paragraph 12.4.

(d)                                 Event of Default:  Any happening or occurrence described in Article VI herein.

(e)                                  Fixtures:  All right, title and interest of Mortgagor in and to all materials, supplies, equipment, apparatus and other items now or hereafter attached to, installed on or in the Land or the Improvements, or which in some fashion are deemed to be fixtures to the Land or Improvements under the laws of the State of Illinois, including the Illinois Uniform Commercial Code.  The term Fixtures shall include, without limitation, all items of personalty to the extent that the same may be deemed Fixtures under applicable law.

(f)                                    Governmental Authority:  Any and all courts, boards, agencies, commissions, offices or authorities of any nature whatsoever for any governmental unit (federal, state, county, district, municipal, city or otherwise) whether now or hereafter in existence.

(g)                                 Guarantors (whether one or more):   Horizon Group Properties, Inc., a Maryland corporation, Horizon Group Properties, L.P., a Delaware limited partnership, and Prime Retail, L.P., a Delaware limited partnership.

(h)                                 Guaranty:   That certain Guaranty Agreement, dated July 10, 2002, executed by the Guarantors in favor of Mortgagee, by which the Guarantors jointly and severally guaranty the payment and performance of  Makers obligations in regard to the Loan and under the Loan Documents.

FOR IMMEDIATE  . . .

FOR IMMEDIATE  . . .

[HORIZON GROUP PROPERTIES, INC. LOGO]

CONSTRUCTION AND TERM LOAN AGREEMENT

THIS CONSTRUCTION AND TERM LOAN AGREEMENT (this ?Agreement?) is made as of April 24, 2003 by and between Horizon Group Properties, L.P., a Delaware limited partnership (?Borrower?), and Amster Trading Company Charitable Remainder Unitrust dated March 10, 2003 (?Lender?).

W I T N E S E T H:

WHEREAS, Borrower has fee simple title to the property described on Exhibit A attached hereto (as the description of such land on Exhibit A may be revised, the ?Land?) and commonly known as Phase II of Horizon Outlet Center - Tulare; and

  . . .