Exhibit 10.108


 


PROMISSORY
NOTE


 


	
  $9,090,000.00

  	
   

  	
  June
  12, 2003

  



 


FOR
VALUE RECEIVED,  Horizon
Huntley LLC, a Delaware limited liability company (“Maker”),
promises to pay to the order of Amster Trading Company,  an Ohio corporation (for its
own account and as agent for participating lenders) (“Payee”), in lawful
money of the United States of America, the principal sum of Nine Million Ninety
Thousand Dollars ($9,090,000.00), together with all accrued but unpaid interest
thereon, on the Maturity Date.


 


1.                                      PAYMENTS


 


1.1                               PRINCIPAL


 


The principal amount of this Note shall be due and
payable on June 12, 2004 (the “Maturity Date”).


 


1.2                               CALCULATION AND PAYMENT OF PRINCIPAL AND INTEREST


 


(a)                                  Interest on the unpaid principal balance
hereof from time to time outstanding shall be computed at eleven percent (11%)
per annum (the “Base Rate”).


 


(b)                                 Accrued and unpaid interest, computed as
set forth in (a) above, shall be due and payable monthly on the first day of
each month hereafter commencing July 1, 2003 and continuing until this Note is
paid in full.


 


(c)                                  The unpaid principal of and all remaining
accrued and unpaid interest upon this Note, including interest computed at the
Base Rate from time to time, are due and payable on the Maturity Date.


 


(d)                                 Interest on this Note shall be calculated
on the basis of three hundred sixty-five (365) days.


 


(e)                                  If the date for any payment or prepayment
hereunder falls on a day which is a Saturday, Sunday or legal holiday, then for
all purposes of this Note, the same shall be deemed to have fallen on the next
following business day, and such extension of time shall in such case be
included in the calculation of interest.


 


(f)                                    All payments on this Note shall be
applied first to the payment of accrued and unpaid interest and then to the
payment of the principal balance hereof; provided, however, if an Event of
Default, as hereinafter defined, is then in existence, payments on this Note
shall be applied as Payee shall elect, in Payee’s sole discretion.


 


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All payments of principal and interest on this Note
shall be made either by wire transfer as directed by Payee or by check to the
following address:


 


Amster Trading Company


23811 Chagrin Boulevard,
Suite 200


Beachwood, OH 44122


 


1.3                               PREPAYMENT


 


The
loan evidenced by this Note may not be prepaid at any time prior to September
1, 2003.  Thereafter, this Note may be
prepaid, in whole or in part, provided each prepayment is accompanied by the
payment of a fee (the “Prepayment Fee”). 
The Prepayment Fee shall be calculated as a percentage (the “Prepayment
Percentage”) of the amount of the Note so prepaid in the following percentages:


 


	
  Prepayment made during the
  period:

  	
   

  	
  Prepayment
  Percentage

  
	
   

  	
   

  	
   

  
	
  September
  1, 2003 to September 30, 2003

  	
   

  	
  3%

  
	
   

  	
   

  	
   

  
	
  October
  1, 2003 to October 31, 2003

  	
   

  	
  2%

  
	
   

  	
   

  	
   

  
	
  November
  1, 2003 to January 31, 2004

  	
   

  	
  1%

  
	
   

  	
   

  	
   

  
	
  After
  January 31, 2004

  	
   

  	
  0%

  



 


1.4                               EXTENSION OF MATURITY DATE


 


The
Maturity Date of this Note may be extended to June 12, 2005 upon Maker’s
written notice of extension delivered to Payee no later than May 31, 2004 and
provided that no Event of Default exists at the time such notice is delivered.


 


2.                                      DEFAULTS


 


2.1                               EVENTS OF DEFAULT


 


The occurrence of any one (1) or more of the following
events shall constitute an event of default hereunder (“Event of Default”):


 


(a)                                  If Maker fails to pay any principal or
interest on this Note when due.


 


(b)                                 If, pursuant to or within the meaning of
the United States Bankruptcy Code or any other federal or state law relating to
insolvency or relief of debtors (a “Bankruptcy Law”), Maker or any
guarantor hereof shall (i) commence a voluntary case or proceeding; (ii)
consent to the entry of an order for relief against it in an involuntary case;
(iii) consent to the appointment of a trustee, receiver, assignee, liquidator
or similar official; (iv) make an assignment for the benefit of its creditors;
or (v) admit in writing its inability to pay its debts as they become due.


 


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(c)                                  If a court of competent jurisdiction
enters an order or decree under any Bankruptcy Law that (i) is for relief
against Maker or any guarantor hereof in an involuntary case; (ii) appoints a
trustee, receiver, assignee, liquidator or similar official for Maker or any
guarantor hereof or substantially all of the properties thereof; or (iii)
orders the liquidation of Maker or any guarantor hereof, and in each case, the
order or decree is not dismissed within sixty (60) days.


 


(d)                                 A default or a breach by Maker of any
covenant, agreement, term or provision hereunder or under any agreement between
Maker and Payee relating to the pledge of partnership interests in Huntley
Development Limited Partnership and Huntley Meadows Residential Venture as
security for the loan evidenced by this Note.


 


(e)                                  A dissolution or sale of substantially
all the assets of Maker; or a default under the mortgage indebtedness covering
the real property located at Interstate 90 and Illinois Route 47 in the Village
of Huntley, Kane County, Illinois, consisting of approximately six hundred
fifty-six (656) acres of property (“Huntley Project”) owned by Huntley
Development Limited Partnership, an Illinois limited partnership (“Huntley
Development”), and Huntley Meadows Residential Venture, an Illinois partnership
(“Huntley Meadows”).


 


(f)                                    A failure to pay to Maker, simultaneous
with the funding of the loan evidenced by this Note, the Ninety Thousand Dollar
($90,000.00) origination fee due to Payee for consummating such loan.


 


2.2                               NOTICE BY MAKER


 


Maker shall notify Payee in writing within two (2)
days after the occurrence of any Event of Default described in Sections 2.1(b),
(c), (d) or (e) of which Maker has actual knowledge without any investigation
or inquiry.


 


2.3                               REMEDIES


 


Upon the occurrence of an Event of Default hereunder
(unless all Events of Default have been cured or waived by Payee), Payee may,
at its option, declare the entire unpaid principal balance and accrued interest
to be immediately due and payable and exercise any and all rights and remedies
available to it under applicable law, including, without limitation, the right
to collect from Maker all sums due under this Note.  Maker shall pay all reasonable costs and expenses incurred by or
on behalf of Payee in connection with Payee’s exercise of any or all of its
rights and remedies under this Note, including, without limitation, reasonable
attorneys’ fees.


 


3.                                      MISCELLANEOUS


 


3.1                               WAIVER


 


The rights and remedies of Payee under this Note shall
be cumulative and not alternative.  No
waiver by Payee of any right or remedy under this Note shall be effective
unless in a writing signed by Payee. 
Neither the failure nor any delay in exercising any right, power or
privilege under this Note shall operate as a waiver of such right, power or
privilege; and no single or partial exercise of any such right, power or
privilege by Payee shall preclude any other or further exercise of such right,


 


3

















 


power or privilege or the exercise of any other right, power or
privilege.  To the maximum extent
permitted by applicable law, (a) no claim or right of Payee arising out of this
Note can be discharged, in whole or in part, by a waiver or renunciation of the
claim or right unless in a writing signed by Payee; (b) no waiver that may be
given by Payee shall be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on Maker shall be deemed to be a
waiver of any obligation of Maker or of the right of Payee to take further
action without notice or demand as provided in this Note.  Maker hereby waives presentment, demand,
protest and notice of dishonor and protest.


 


3.2                               NOTICES


 


Any notice required or permitted to be given hereunder
shall be sufficient if in writing and delivered in person, by facsimile with
confirmation or sent via registered or certified United States mail, return
receipt requested, postage prepaid, or by recognized courier services,
addressed as follows:


 


If to Maker:


 


Horizon Huntley LLC


77 West Wacker Drive,
Suite 4200


Chicago, IL 60601


Attention:                                         Gary Skoien


 


If to Payee:


 


Amster Trading Company


23811 Chagrin Boulevard,
Suite 200


Beachwood, OH 44122


 


or such other address as either party may designate in
writing.  A notice shall be deemed
received:  (a) if by telecopy, on the
date confirmed; (b) if by mail, two (2) days after mailing; and (c) if by
overnight courier service, on the date delivered.


 


3.3                               SEVERABILITY


 


If any provision in this Note is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Note shall remain in full force and effect.  Any provision of this Note held invalid or unenforceable only in
part or degree shall remain in full force and effect to the extent not held
invalid or unenforceable.


 


3.4                               GOVERNING LAW AND JURISDICTION


 


This Note shall be governed by and construed under the
laws of the State of Ohio without regard to conflicts-of-laws principles that
would require the application of any other law; and any action on this Note
may, at the option of Payee, be instituted and enforced in the Courts of the
State of Ohio or the U.S. District Court for the Northern District of Ohio and
Maker waives any objection to the jurisdiction of such Courts.


 


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3.5                               PARTIES IN INTEREST


 


Maker hereby acknowledges and consents to the grant of
participating interests in this Note and any assignment thereof to such
participating lenders, including the rights and remedies of the holder
hereof.  This Note shall be binding in
all respects upon Maker and its successors and assigns, and shall inure to the
benefit of Payee, any holders of participating interests in this Note and their
successors and assigns.


 


3.6                               REGISTRATION UNDER THE SECURITIES ACT OF 1933


 


This Note has not been registered under the Securities
Act of 1933.


 


3.7                               SECTION HEADINGS; CONSTRUCTION


 


The headings of Sections in this Note are provided for
convenience only and shall not affect its construction or interpretation.  All references to “Section” or “Sections”
refer to the corresponding Section or Sections of this Note unless otherwise
specified.  All words used in this Note
shall be construed to be of such gender or number as the circumstances require.  Unless otherwise expressly provided, the
words “hereof” and “hereunder” and similar references refer to this Note in its
entirety and not to any specific section or subsection hereof; the words
“including” or “includes” do limit the preceding words or terms; and the word
“or” is used in the inclusive sense.


 


3.8                               PLEDGE OF PARTNERSHIP INTERESTS


 


Maker hereby agrees to grant and deliver to Payee or
cause to be granted and delivered to Payee, a pledge of all the partnership
interests in Huntley Development and Huntley Meadows, subject to any required
consent of the mortgagee or other senior lender of the Huntley Project.


 


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IN
WITNESS WHEREOF,
Maker has duly executed and delivered this Note as of the date first stated
above.


 


	
   

  	
  Horizon Huntley LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Horizon Group Properties, L.P.

  
	
   

  	
   

  	
   a Delaware limited
  partnership

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Horizon Group Properties, Inc.

  
	
   

  	
   

  	
   a Maryland corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  Its: General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Gary J. Skoien

  
	
   

  	
   

  	
  Its:

  	
  Chief Executive Officer

  
					



 


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GUARANTY


 


In order to induce Amster Trading Company, an Ohio
corporation (for its own account and as agent for participating lenders)
(“Payee”), to lend to Horizon Huntley LLC, a Delaware limited liability company
(“Maker”) the sum of Nine Million Ninety Thousand Dollars ($9,090,000.00)
pursuant to the Promissory Note of Maker to which this Guaranty is attached
(the “Note”), and in consideration thereof, the undersigned hereby jointly and
severally absolutely and unconditionally guarantee payment of the Note and the
indebtedness evidenced thereby, including the payment of principal and each
installment of interest thereunder as and when due, whether by acceleration or
otherwise, and all renewals and extensions thereof.  Notice of acceptance and any extensions or renewals of the Note
are hereby waived, as well as presentment, notice of non-payment, protest and
notice thereof and all other notices to which the undersigned, as guarantors,
may otherwise be entitled.  Payee may,
at its option, enforce this Guaranty without first proceeding against Maker or
any other security for the Note; and the obligations of the undersigned shall
not be released, discharged or otherwise affected by reason of any action by
Payee in connection with the credit extended to Maker or the bankruptcy or
insolvency of either of the undersigned. 
This Guaranty shall be construed and governed by the laws of the State
of Ohio and any action on this Guaranty may, at the option of Payee, be instituted
and enforced in the Courts of the State of Ohio or the U.S. District Court for
the Northern District of Ohio and the undersigned waive any objection to the
jurisdiction of such Courts.


 


IN
WITNESS WHEREOF, the
undersigned have hereunto set their hands this 12th day of June,
2003.


 


	
   

  	
  Horizon Group
  Properties, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Horizon Group
  Properties, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Horizon Group
  Properties, Inc.,

  
	
   

  	
   

  	
  General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  



 


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OUTLINE OF LOAN FROM AMSTER
TRADING COMPANY


(FOR
ITS OWN ACCOUNT AND AS AGENT FOR


PARTICIPATING
LENDERS) TO


HORIZON HUNTLEY LLC


 


	
  Borrower:

  	
   

  	
  Horizon Huntley LLC

  
	
   

  	
   

  	
   

  
	
  Use of Proceeds:

  	
   

  	
  Acquisition of
  Partnership interests in Huntley Development Limited Partnership and Huntley
  Meadows Residential Venture

  
	
   

  	
   

  	
   

  
	
  Loan Amount:

  	
   

  	
  $9,090,000.00

  
	
   

  	
   

  	
   

  
	
  Term:

  	
   

  	
  One year with a
  one-year extension

  
	
   

  	
   

  	
   

  
	
  Interest Rate:

  	
   

  	
  11%

  
	
   

  	
   

  	
   

  
	
  Origination Fee:

  	
   

  	
  $90,000.00 due upon
  funding of loan

  
	
   

  	
   

  	
   

  
	
  Prepayment Penalty:

  	
   

  	
  3% from September 1,
  2003 to September 30, 2003

  

  2% from October 1, 2003 to October 31, 2003

  

  1% from November 1, 2003 to January 31, 2004

  

  0% after January 31, 2004

  
	
   

  	
   

  	
   

  
	
  Security:

  	
   

  	
  Guaranty of Horizon
  Group Properties, Inc. and Horizon Group Properties, L.P. and pledge of
  partnership interests in Huntley Development Limited Partnership and Huntley
  Meadows Residential Venture (subject to any required consent of the mortgagee
  or other senior lender with respect to the Huntley project)

  
	
   

  	
   

  	
   

  
	
  Approved:

  	
   

  	
   

  	
  Approved:

  
	
   

  	
   

  	
   

  	
   

  
	
  Amster Trading Company

  	
   

  	
   

  	
  Horizon Huntley LLC

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
							



 


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