Exhibit 10.84


 


PROMISSORY NOTE


 


	
   

  	
   

  	
  Chicago, Illinois

  
	
  $3,100,000.00

  	
   

  	
  April 24, 2003

  



 


FOR VALUE RECEIVED,
Horizon Group Properties, L.P., a Delaware limited partnership (“Borrower”),
with a mailing address of 77 West Wacker Drive Suite 4200, Chicago, IL 60601
Attention: Gary J. Skoien promises to pay to the order of Amster Trading
Company Charitable Remainder Unitrust dated March 10, 2003 or the holder hereof
(“Lender”),
at its office at 23811 Chagrin Boulevard, Suite 200, Beachwood, Ohio 44122, or
such other place as Lender may designate in writing, in the manner provided
hereinafter, the principal sum of THREE MILLION ONE HUNDRED THOUSAND AND NO/100
Dollars ($3,100,000.00) (the “Loan”), or so much thereof as may now or
hereafter be advanced by Lender to or for the benefit of Borrower on or before
the Maturity Date (as defined below) of this Promissory Note (this “Note”),
with interest, in the manner and upon the terms and conditions set in this Note
and in that certain Construction and Term Loan Agreement of even date herewith
between Borrower and Lender (the “Loan Agreement”).


 


1.             Definitions.           The following terms shall have the
following meanings in this Note:


 


Construction Loan:  Construction loan in the maximum amount of THREE MILLION ONE
HUNDRED THOUSAND AND NO/100 Dollars ($3,100,000.00)


 


Construction Loan Opening: As defined in Section 1.2
of the Loan Agreement.


 


Construction Loan Period:  The period commencing on the date of the
Construction Loan Opening and terminating on the earlier of (i) the Term Loan
Period Opening Date or (ii) the date to which the indebtedness evidenced by
this Note is accelerated as provided under the Loan Agreement.


 


Deed of Trust:  As defined in Paragraph 8 hereof.


 


Default: 
As defined in Paragraph 9 hereof.


 


Default Interest Rate:  As defined in Paragraph 10 hereof.


 


Disbursement: 
Any disbursement of Loan proceeds.


 


Excess Interest:  As defined in Paragraph 15 hereof.


 


Final Disbursement:  The final disbursement of proceeds of the Construction Loan as
required to complete the Project.


 


Interest Rate:  As defined in Paragraph 2 hereof.


 


Loan: 
The Construction Loan or the Term Loan, whichever is then outstanding,
as well as all indebtedness to Lender evidenced by or incurred under the Loan
Documents.  At no time shall the outstanding
principal balance of the Loan evidenced by this Note exceed Three Million One
Hundred Thousand Dollars ($3,100,000).


 


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Loan Agreement:  As defined in the Recitals.


 


Loan Documents:  As defined in Paragraph 8 hereof.


 


Maturity Date:  August 1, 2009 or the date to which the indebtedness evidenced
hereby is accelerated pursuant to the terms of this Note, subject to adjustment
as provided in Section 11.15 of the Loan Agreement.


 


Obligors: 
As defined in Paragraph 12 hereof.


 


Project: 
The project described in the Loan Agreement.


 


Term Loan: 
Term loan in the maximum principal amount of up to THREE MILLION ONE
HUNDRED THOUSAND AND NO/100 Dollars ($3,100,000.00).  The Term Loan will contain a draw feature to facilitate one or
more future advances of the Term Loan proceeds after the Term Loan Period
Commencement Date.


 


Term Loan Period:  The period commencing on the Term Loan Period Commencement Date
and terminating on the earlier of (i) the Maturity Date or (ii) the date to
which the indebtedness evidenced by this Note is accelerated as provided in the
Loan Documents.


 


Term Loan Period Commencement Date: October
15, 2003.


 


2.             Interest Rate.  Interest shall accrue from the date of the
Construction Loan Opening hereunder on the principal balance of the Loan
remaining from time to time outstanding at the rate calculated pursuant to the
following provision:


 


(a)                   Construction
Loan Period.  Commencing
on the date of the Construction Loan Opening through and including the Term
Loan Commencement Date, the interest rate shall be the greater of (i) the LIBOR
Rate (as hereinafter defined) per annum plus 300 basis points or (ii) five and
one-half percent (5.5%) per annum (the “Construction Loan Interest Rate”), adjusted
on the first Business Day (as such term is defined in the Loan Agreement) of
each January, April, July and October (each, an “Adjustment Date”) of each
year the Loan is outstanding.  For
purposes of this Note, the “LIBOR Rate” shall mean the annual rate of
interest as indicated on the Bloomberg web site
(http://www.bloomberg.com/markets/rates.html) under the heading “Three Month
LIBOR” on each Adjustment Date.  From
the date of the Construction Loan Opening until the first Adjustment Date, the
Construction Loan Interest Rate shall be 5.5%.


 


(b)                   Term Loan
Period.  Provided that
there is no Default under the terms of this Note, commencing on the day next
following Term Loan commencement Date through the Maturity Date, except as
hereinafter set forth, the interest rate on the outstanding principal balance
of the Loan remaining from time to time shall be equal to the greater of (i)
the LIBOR Rate per annum plus 300 basis points or (ii) five and one-half
percent (5.5%) per annum (the “Term Loan Interest Rate”), as adjusted on
each Adjustment Date.


 


Interest shall
be payable on the basis of a year consisting of three hundred sixty (360) days
and charged for the number of days actually elapsed.  For purposes of this Note, the Construction Loan Interest Rate
and the Term Loan Interest Rate shall be referred to collectively as the “Interest


 


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Rate”.  The Interest Rate shall be subject to
adjustment as provided in Section 11.15 of the Loan Agreement.


 


3.             Principal
and Interest Payments.


 


(a)           Construction Loan Period.  During the Construction Loan Period,
interest on the Construction Loan at the Construction Loan Interest Rate shall
be payable monthly in arrears on the first day of each month (each, a “Payment Date”),
commencing on the first day of the second month immediately succeeding the
Initial Disbursement Date, except that the first such payment due hereunder
shall also include interest which has accrued on the balance of the principal
outstanding hereunder from the Construction Loan Opening through such first
Payment Date.


 


(b)           Term Loan Period.  During the Term Loan Period, interest on the
Term Loan at the Term Loan Interest Rate shall be payable monthly in arrears on
each Payment Date with the first payment commencing on: (i) November 1, 2003,
if the Term Loan Period Commencement Date occurs on October 15, 2003 and (ii)
the first day of the second month immediately succeeding the Term Loan Period
Commencement Date, if the Term Loan Period Commencement Date occurs prior to
October 15, 2003.  Principal and
interest payments shall be computed (to be pro rated for any partial month
during such period), so that the monthly principal and interests payments will
amortize the unpaid principal balance of this Note in full over a twenty-five
(25) year term (the “Amortization Term”) at the Interest Rate
then in effect.  Principal and interest
payments due hereunder shall be adjusted on each Adjustment Date so that said
payments shall equal the principal and interest payments necessary to fully
amortize the then outstanding principal balance due under this Note over the
then remaining portion of the Amortization Term.  The final payment of all principal and interest, if not sooner
paid, shall be due on the Maturity Date. 
All payments hereunder shall be made in immediately available funds in
lawful money of the United States of America. 
Principal amounts repaid hereunder may not be reborrowed.


 


The payment
terms set forth above shall be subject to adjustment as provided in Section
11.15 of the Loan Agreement.


 


4.             Draw
Feature. 
This Note contains a draw feature. 
Upon: (a) Borrower’s satisfaction of the terms and conditions set forth
in the Loan Agreement and in this Note and (b) provided that no Default has
occurred and is continuing, Borrower may make draws hereunder for the
reimbursement of the cost of Tenant Improvements (as defined below) at the
Project (as defined in the Loan Agreement) and retainage amounts (collectively,
the “Term Loan Draws” and each a “Term Loan Draw”).  Such Term Loan Draws shall: (x) be in an amount of not less than
TWENTY-FIVE THOUSAND DOLLARS ($25,000) each, and (y) be made no more frequently
than one (1) time per calendar month. 
Notwithstanding the foregoing: (aa) Lender shall be under no obligation to
make a Term Loan Draw which would result in the then outstanding principal
balance of the Term Loan to exceed THREE MILLION ONE HUNDRED THOUSAND DOLLARS
($3,100,000) and (bb) Lender’s obligation to make Term Loan Draws shall in all
events expire on September 1, 2005.  In
addition to all other requirements set forth herein and in the Loan Agreement
for Borrower to obtain Term Loan Draws, the maximum aggregate amount of the
Term Loan Draws available to Borrower pursuant to this Note shall be determined
by subtracting the amount of the Construction Loan that is


 


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rolled into the Term Loan on
the Term Loan Period Commencement Date from Three Million One Hundred Thousand
Dollars ($3,100,000).  Once Borrower has
repaid any portion of amounts drawn pursuant to this Note, Borrower shall not
be entitled to re-draw such amounts and any and all such repayments shall
reduce Lender’s aggregate obligation to extend funds hereunder.  For purposes of this Note, “Tenant Improvements”
shall mean the costs associated with allowances, build out costs and LOD
packages that Borrower is obligated to pay for pursuant to the terms of the
Leases (as defined below).  For purposes
of this Note, “Leases” mean any and all written leases of the Project.  Lender shall not be obligated to advance a
Term Loan Draw to Borrower until: (xx) Borrower provides Lender with an
executed copy of the Lease requiring the Tenant Improvements for which Borrower
is seeking reimbursement, (yy) Borrower 
provides Lender with evidence that Borrower has paid for the Tenant
Improvements for which Borrower is seeking reimbursement, and (zz) the Title
Insurer (as defined in the Loan Agreement) provides Lender, at Borrower’s cost,
with a date down endorsement or other applicable endorsement bringing forward
the date of the Title Policy to the date the applicable Term Loan Draw is to be
made.  Lender agrees to act in a
reasonably prompt manner in responding to requests for Term Loan Draws.  Amounts advanced pursuant to Term Loan Draws
shall bear interest and be repayable in the same manner as other amounts
outstanding under this Note.


 


5.             Prepayments.  Borrower shall have the right to prepay this
Note, in whole or in part, at any time, without penalty or premium.


 


6.             Agreement to Make Term Loan.  Notwithstanding anything in this Note to the
contrary, Lender shall have no obligation to make the Term Loan unless all
conditions set forth in the Loan Agreement have been satisfied.


 


7.             Application of Payments.  All payments on account of the indebtedness
evidenced by this Note shall be applied first to any unpaid late charges or
costs (including reasonable legal fees) due hereunder, then to interest on the
unpaid principal balance and the remainder to principal, or at Lender’s sole
discretion, in any other order it may elect.


 


8.             Late Charges.  If any monthly installment of principal or
interest or any other amount due hereunder or under any of the other Loan
Documents is not paid on or before the date on which such payment is due,
Borrower shall pay Lender a late charge in an amount equal to five percent (5%)
of the amount so due to defray part of the increased cost of collecting the
late payments and the opportunity cost incurred by Lender because of the
unavailability of the funds.


 


9.             Security for Payment.  The payment of this Note is secured in part
by that certain Construction Deed of Trust, Security Agreement, Financing
Statement and Fixture Filing (with Assignment of Rents) (the “Deed of
Trust”) of even date herewith, executed by Borrower in favor of
Lender, encumbering the property described therein, that certain Environmental
Indemnity Agreement of even date herewith from Borrower in favor of Lender (the
“Environmental
Indemnity Agreement”), that certain Assignment of Rents (as defined
in the Loan Agreement), that certain Assignment of Plans and Permits (as
defined in the Loan Agreement) and all other documents evidencing or securing
the repayment of the Loan (the Loan Agreement, this Note, the Deed of Trust,
the Environmental Indemnity Agreement, the Assignment of Rents, the Assignment
of Plans and Permits and all other documents evidencing or securing the
indebtedness evidenced by this Note which are executed and delivered to Lender
as additional evidence of or security for repayment of the Loan, whether now or
hereafter existing, and all renewals, amendments, supplements, restatements,


 


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extensions and modifications
thereof and thereto, are collectively referred to herein as the “Loan
Documents”).  All of the
agreements, conditions, covenants, provisions and stipulations contained in the
Loan Documents are hereby made a part of this Note to the same extent and with
the same force and effect as if they were fully set forth herein, and Borrower
covenants and agrees to keep and perform them or cause them to be kept and
performed, strictly in accordance with their terms.


 


10.          Defaults and Acceleration.  IT IS HEREBY EXPRESSLY AGREED by Borrower
that time is of the essence hereof.  Any
Default (as defined in the Loan Agreement) shall constitute an event of default
(a “Default”)
hereunder.  At any time: (a) during the
existence of any Default or (b) following a Prohibited Transfer (as defined in
the Deed of Trust), Lender, at its option, may, without prior written notice to
Borrower, declare the entire unpaid principal balance of this Note together
with all interest accrued thereon, and all other sums due by Borrower hereunder
and under the other Loan Documents to be due and payable immediately.


 


11.          Default Interest Rate.  While any Default exists and is continuing,
Borrower promises to pay interest on the amount of principal due and
outstanding hereunder at the rate of the sum of the then applicable Interest
Rate plus five percent (5%) per annum (“Default Interest Rate”), which shall be
payable upon demand.  All monies paid
for any of the purposes authorized herein, together with unpaid interest, and
all expenses paid or incurred in connection therewith, including, without limitation,
reasonable attorneys’ fees and court costs, and any other monies advanced by
Lender to protect the premises encumbered by the Deed of Trust and the lien of
the Deed of Trust, shall be so much additional indebtedness secured hereby, and
shall become immediately due and payable by Borrower to Lender without notice
and with interest thereon at the Default Interest Rate from the date an advance
is made to and including the date the same is paid.


 


12.          Nature of Remedies.  Upon a Default, the remedies of Lender, as
provided in the Loan Agreement, this Note, the Deed of Trust and any of the
other Loan Documents, shall be cumulative and concurrent, and may be pursued
singly, successively or together against either or any of Borrower, any
guarantor hereof or any other security, at the sole and absolute discretion of
Lender.


 


13.          Waivers, Consents, Etc.  Borrower and any endorsers, sureties or
guarantors hereof and any and all others who are now or may become liable for
all or part of the obligations of Borrower under this Note (all of the
foregoing being collectively referred to herein as “Obligors”), agree to be
jointly and severally bound hereby and jointly and severally waive presentment
for payment, demand, notice of nonpayment, notice of dishonor, protest of any
dishonor, notice of protest and protest of this Note and, except as expressly
provided to the contrary herein or in the other Loan Documents, all other
notices in connection with the delivery, acceptance, performance, default or
enforcement of the payment of this Note, and agree that the liability of each
of them shall be unconditional, joint and several without regard to the
liability of any other party and shall not in any manner be affected by any
indulgence, extension of time, renewal, waiver or modification granted or
consented to by Lender.  Each Obligor
hereby consents to any and all extensions of time, renewals, waivers or
modifications that may be granted by Lender with respect to the payment or
other provisions of this Note, and to the release of the collateral, or any
part thereof, with or without substitution, and agree that additional
borrowers, endorsers, guarantors or sureties may become parties hereto without
notice to them or affecting their liability hereunder.  Borrower hereby authorizes Lender, at any
time after a Default hereunder, to apply any money or other property which
Lender may have or hold on deposit or otherwise for Borrower towards the
payment of this Note.  By execution
hereof, Borrower hereby specifically pledges and grants to Lender a security
interest in any money or other property which Lender may have or hold on
deposit for the undersigned.


 


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14.          Non-Waiver.  Lender shall not by any act of omission or
commission be deemed to waive any of its rights or remedies hereunder unless
such waiver is in writing and signed by Lender and then only to the extent
specifically set forth therein.  A
waiver of one event shall not be construed as continuing or as a bar to or
waiver of such right or remedy in connection with a subsequent event.


 


15.          Business Loan.  Borrower warrants and represents to Lender
(a) that the proceeds of this Note will be used for the purposes specified in
815 ILCS 205/4(1)(c) (or any substitute, amended or replacement statute), and
that the indebtedness secured hereby constitutes a business loan which comes
within the purview of 815 ILCS 205/4(1)(c), and (b) that the Loan evidenced by
this Note is an exempted transaction under the Truth In Lending Act, 15 U.S.C.
§1601 et  seq.  Borrower
further warrants and represents to Lender and covenants with Lender that
Borrower is not in the business of extending credit for the purpose of
purchasing or carrying margin securities (within the meaning of Regulation U
issued by the Board of Governors of the Federal Reserve System), and no
proceeds represented by this Note will be used to purchase or carry any margin
securities or to extend credit to others for the purpose of purchasing or
carrying any margin securities.


 


16.          Interest Laws.  It being the intention of Lender and
Borrower to comply with the laws of the State of Illinois, it is agreed that
notwithstanding any provision to the contrary in this Note, the Deed of Trust
or any of the other Loan Documents, no such provision shall require the payment
or permit the collection of any interest (“Excess Interest”) in excess of the maximum
amount of interest permitted by law to be charged for the use or detention, or
the forbearance in the collection, of all or any portion of the indebtedness
evidenced by this Note.  If any Excess
Interest is provided for, or is adjudicated to be provided for, in this Note,
the Deed of Trust or any of the other Loan Documents, then in such event:  (a) the provisions of this Paragraph 16
shall govern and control; (b) neither Borrower nor any of the other Obligors
shall be obligated to pay any Excess Interest; (c) any Excess Interest that
Lender may have received hereunder shall, at the option of Lender, be (i)
applied as a credit against the then outstanding principal balance of the Loan,
accrued and unpaid interest thereon not to exceed the maximum amount permitted
by law, or both, (ii) refunded to the payor thereof, or (iii) any combination
of the foregoing; (d) the applicable Interest Rate or rates hereunder shall be
automatically subject to reduction to the maximum lawful contract rate allowed
under the applicable usury laws of the aforesaid State, and this Note, the Deed
of Trust and the other Loan Documents shall be deemed to have been, and shall
be, reformed and modified to reflect such reduction in such applicable Interest
Rate or rates; and (e) neither Borrower nor any of the other Obligors shall
have any action against Lender for any damages whatsoever arising out of the
payment or collection of any Excess Interest.


 


17.          Subsequent Holders.  Upon any endorsement, assignment or other
transfer of this Note by Lender or by operation of law, the term “Lender”,
as used herein, shall mean the endorsee, assignee or other transferee or
successor to Lender then becoming the holder of this Note.


 


18.          Subsequent Obligors.  This Note and all provisions hereof shall be
binding on all persons claiming under or through Borrower.  The terms “Borrower” and “Obligors”,
as used herein, shall include the respective successors, assigns, legal and
personal representatives, executors, administrators, devisees, legatees and
heirs of Borrower and any other Obligors.


 


19.          Fees and Expenses.  If at any time or times after the date of
this Note, Lender:  (a) employs counsel
which Lender reasonably believes is necessary for advice or other
representation (i) with respect to this Note, any of the other Loan Documents
or any collateral securing this Note, (ii) to represent Lender in any
litigation, contest, dispute, suit or proceeding or to commence, defend or
intervene or to take any other action in or with respect to any litigation,
contest, dispute or


 


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proceeding (whether instituted
by Lender, Borrower or any other person) in any way or respect relating to this
Note, any of the other Loan Documents or any replacement therefor, any
collateral securing this Note or Borrower’s affairs, or (iii) to enforce any
rights of Lender against Borrower; (b) takes any action to protect, collect,
sell, liquidate or otherwise dispose of any collateral securing this Note;
and/or (c) attempts to or enforces any of Lender’s rights and remedies against
Borrower or any guarantor of this Note, the reasonable costs and expenses
incurred by Lender in any manner or way with respect to the foregoing shall be
part of the indebtedness evidenced by this Note, payable by Borrower to Lender
on demand.  Without limiting the
generality of the foregoing, such reasonable expenses and costs include:  court costs, reasonable attorneys’ fees and
expenses, and accountants’ fees and expenses and other expert fees.


20.          Interpretation.  Whenever possible each provision of this
Note and the other Loan Documents shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Note or
any of the other Loan Documents shall be prohibited or invalid under such law,
such provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of said documents.  As used in this Note, the singular shall
include the plural, and masculine, feminine and neuter pronouns shall be fully
interchangeable, where the context so requires.


 


21.          Governing Law; Litigation.  THE VALIDITY OF THIS NOTE, ITS CONSTRUCTION,
INTERPRETATION AND ENFORCEMENT, AND THE RIGHTS OF BORROWER AND LENDER SHALL BE
DETERMINED UNDER, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.  TO THE MAXIMUM EXTENT PERMITTED BY LAW,
BORROWER HEREBY AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION
WITH THIS NOTE SHALL BE TRIED AND DETERMINED ONLY IN THE STATE OR FEDERAL
COURTS LOCATED IN THE COUNTY OF COOK, STATE OF ILLINOIS.  TO THE MAXIMUM EXTENT PERMITTED BY LAW,
BORROWER HEREBY EXPRESSLY WAIVES ANY RIGHT IT MAY HAVE TO ASSERT THE DOCTRINE
OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS PARAGRAPH.


 


22.          Jury Waiver.  BORROWER AND LENDER, EACH HAVING BEEN
REPRESENTED BY COUNSEL, EACH KNOWINGLY AND VOLUNTARILY, TO THE MAXIMUM EXTENT
PERMITTED BY LAW, EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY ACTION,
CAUSE OF ACTION, CLAIM, DEMAND OR PROCEEDING ARISING UNDER OR WITH RESPECT TO
THIS NOTE, OR IN ANY WAY CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE
DEALINGS OF BORROWER AND LENDER WITH RESPECT TO THIS NOTE OR THE TRANSACTIONS
RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.  TO THE MAXIMUM EXTENT PERMITTED BY LAW, BORROWER HEREBY AGREES
THAT ANY SUCH ACTION, CAUSE OF ACTION, CLAIM, DEMAND OR PROCEEDING SHALL BE
DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT LENDER MAY FILE A COPY OF THIS
NOTE WITH ANY COURT OR OTHER TRIBUNAL AS WRITTEN EVIDENCE OF THE CONSENT OF
BORROWER TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.


 


23.          Notices.  Any notice, request or demand that Lender or
Borrower may desire or be required to give to the other shall be in writing and
shall be mailed or delivered to the intended


 


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recipient thereof at its
address hereinabove set forth or at such other address as such intended
recipient may, from time to time, by notice in writing, designate to the sender
pursuant hereto.  Any such notice shall
be deemed to have been delivered (a) upon receipt when delivered in person or
if sent by nationally recognized overnight air courier, or (b) two (2) business
days after being deposited in the United States mail sent by certified mail,
postage prepaid, return receipt requested. 
Unless specifically required herein, notice of the exercise of any
option granted to Lender by this Note is not required to be given.


 


[SIGNATURE PAGE FOLLOWS]


 


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This Note has been executed and
delivered on the date first set forth above.


 


	
   

  	
  HORIZON GROUP
  PROPERTIES, L.P., a

  Delaware limited partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Horizon Group Properties, Inc.

  
	
   

  	
  Its:

  	
  General
  Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ David
  Tinkham

  	
   

  
	
   

  	
   

  	
   

  	
  David
  Tinkham,

  
	
   

  	
   

  	
   

  	
  Senior Vice
  President / CFO

  



 


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