Document:

<PAGE>

                                  EXHIBIT 10.28

                               SECURITY AGREEMENT

      THIS SECURITY AGREEMENT, dated as of April 18, 2000, is made by PRIME
GROUP OUTDOOR, LLC, a Delaware limited liability company ("Grantor"), in favor
of HORIZON GROUP PROPERTIES, L.P. ("Lender").

                             W I T N E S S E T H:

      A. Pursuant to a certain Promissory Note dated as of even date herewith in
the principal amount of One Million, Five Hundred Thousand Dollars ($1,500,000)
(the "Note"), Lender has agreed to make a loan (the "Loan"), to Grantor in the
principal amount of the Note.

      B. Lender has required, as a condition to making the Loan, that Grantor
execute and deliver this Security Agreement to Lender, in order to secure its
obligations hereunder, under the Note and under any document, instrument or
agreement executed and delivered in connection with the Note (collectively, the
"Obligations").

      NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained and for other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto agree as follows:

      1. DEFINED TERMS. The following terms shall have the following meanings
(such meanings being equally applicable to both the singular and plural forms of
the terms defined):

            "ACCOUNT DEBTOR" shall mean any "account debtor," as such term is
      defined in section 9-105(1)(a) of the UCC.

            "ACCOUNTS RECEIVABLE" shall mean any "account," as such term is
      defined in section 9-106 of the UCC, now owned or hereafter acquired by
      Grantor and, in any event, shall include, without limitation, all
      accounts, accounts receivable, other receivables, contract rights, chattel
      paper, instruments, documents, notes, and other forms of obligations now
      owned or hereafter received or acquired by or belonging or owing to
      Grantor (including, without limitation, under any trade names, styles or
      divisions thereof) whether arising out of goods sold or services rendered
      by Grantor or from any other transaction, whether or not the same involves
      the sale of goods or services by Grantor (including, without limitation,
      any such obligation which might be characterized as an account or contract
      right under the UCC) and all of Grantor's rights in, to and under all
      purchase orders or receipts now owned or hereafter acquired by it for
      goods or services, and all of Grantor's rights to any goods represented by
      any of the foregoing (including, without limitation, unpaid seller's
      rights of rescission, replevin, reclamation and stoppage in transit and
      rights to returned, reclaimed or repossessed goods), and all moneys due or
      to become due to Grantor under all contracts for the sale of goods or the
      performance of services or both by Grantor (whether or not yet earned by
      performance on the part of Grantor or in connection with any other
      transaction), now in existence or hereafter occurring, including, without
      limitation, the right to receive the proceeds of said purchase orders and
      contracts, and all collateral security and guarantees of any kind given by
      any person with respect to any of the foregoing.

            "CHATTEL PAPER" shall mean any "chattel paper," as such term is
      defined in section 9-105(1)(b) of the UCC, now owned or hereafter acquired
      by Grantor.

            "COLLATERAL" shall have the meaning assigned to such term in Section
      2 of this Security Agreement.

            "CONTRACTS" shall mean all contracts, undertakings, or other
      agreements (other than rights

                                       1
<PAGE>

      evidenced by Chattel Paper, Documents or Instruments) in or under which
      Grantor may now or hereafter have any right, title or interest, including,
      without limitation, with respect to an Account, any agreement relating to
      the terms of payment or the terms of performance thereof.

            "DOCUMENTS" shall mean any "documents," as such term is defined in
      section 9-105(1)(f) of the UCC, now owned or hereafter acquired by
      Grantor.

            "EQUIPMENT" shall mean any "equipment," as such term is defined in
      section 9-109(2) of the UCC, now owned or hereafter acquired by Grantor
      and, in any event, shall include, without limitation, all machinery,
      equipment, furnishings, fixtures, vehicles and computers and other
      electronic data-processing and other office equipment now owned or
      hereafter acquired by Grantor and any and all additions, substitutions and
      replacements of any of the foregoing, wherever located, together with all
      attachments, components, parts, equipment and accessories installed
      thereon or affixed thereto.

            "EVENT OF DEFAULT" shall have the meaning set forth in Section 9.

            "INSTRUMENTS" shall mean any "instrument," as such term is defined
      in section 9-105(1)(i) of the UCC, now owned or hereafter acquired by
      Grantor, other than instruments that constitute, or are a part of a group
      of writings that constitute, Chattel Paper.

            "INTANGIBLE ASSETS" shall mean any "general intangibles," as such
      term is defined in section 9-106 of the UCC, now owned or hereafter
      acquired by Grantor and, in any event, shall include, without limitation,
      all right, title and interest which Grantor may now or hereafter have in
      or under any Contract, all customer lists, trademarks, patents, rights in
      intellectual property, licenses, permits, copyrights, trade secrets,
      proprietary or confidential information, inventions (whether patented or
      patentable or not), technical information, procedures, designs, knowledge,
      know-how, software, data bases, data, skill, expertise, experience,
      processes, models, drawings, materials and records now owned or hereafter
      acquired by Grantor, goodwill and rights of indemnification.

            "INVENTORY" shall mean any "inventory," as such term is defined in
      section 9-109(4) of the UCC, now owned or hereafter acquired by Grantor
      and, in any event, shall include, without limitation, all inventory,
      merchandise, goods and other personal property now owned or hereafter
      acquired by Grantor which are held for sale or lease or are furnished or
      are to be furnished under a contract of service or which constitute raw
      materials, work in process or materials used or consumed or to be used or
      consumed in Grantor's business, or the processing, packaging, delivery or
      shipping of the same, and all finished goods.

            "INVESTMENT PROPERTY" shall mean all "investment property" as such
      term is defined in the UCC, now or hereafter owned or acquired by,
      Grantor, wherever located and, in any event, including, without
      limitation, (a) stocks, bonds, interests in limited liability companies,
      partnership interests, treasuries, certificates of deposit and mutual fund
      shares; (b) all securities entitlements of Grantor, including, without
      limitation, all rights of Grantor to any securities account and any free
      credit balance or other money owing by any securities intermediary with
      respect to any such account; (c) all securities accounts held by Grantor;
      (d) all commodity contracts held by Grantor; and (e) all commodity
      accounts held by Grantor.

            "NOTE" shall have the meaning set forth in the Recitals.

            "OBLIGATIONS" shall have the meaning set forth in the Recitals.

            "PROCEEDS" shall mean "proceeds," as such term is defined in section
      9-306(1) of the UCC and, in any event, shall include, without limitation,
      (i) any and all proceeds of any insurance, indemnity, warranty or guaranty
      payable to Grantor from time to time with respect to any of the
      Collateral, (ii) any and all

                                       2
<PAGE>

      payments (in any form whatsoever) made or due and payable to Grantor from
      time to time in connection with any requisition, confiscation,
      condemnation, seizure or forfeiture of all or any part of the Collateral
      by any governmental body, authority, bureau or agency (or any person
      acting under color of governmental authority), (iii) any claim of Grantor
      against third parties (A) for past, present or future infringement of any
      patent or patent license or (B) for past, present or future infringement
      or dilution of any trademark or trademark license or for injury to the
      goodwill associated with any trademark, trademark registration or
      trademark licensed under any trademark license, and (iv) any and all other
      amounts from time to time paid or payable under or in connection with any
      of the Collateral.

            "SECURITY AGREEMENT" shall mean this Security Agreement, as the same
      may from time to time be amended, modified or supplemented and shall refer
      to this Security Agreement as in effect of the date such reference becomes
      operative.

            "UCC" shall mean the Uniform Commercial Code as the same may, from
      time to time, be in effect in the State of Illinois; PROVIDED, HOWEVER, in
      the event that, by reason of mandatory provisions of law, any or all of
      the attachment, perfection or priority of Lender's security interest in
      any Collateral is governed by the Uniform Commercial Code as in effect in
      a jurisdiction other than the State of Illinois, the term "UCC" shall mean
      the Uniform Commercial Code as in effect in such other jurisdiction for
      purposes of the provisions hereof relating to such attachment, perfection
      or priority and for purposes of definitions related to such provisions.

      2.    GRANT OF SECURITY INTEREST.

            (a) As collateral security for the prompt and complete payment and
      performance when due (whether at stated maturity, by acceleration or
      otherwise) of the Obligations, Grantor hereby assigns, conveys, mortgages,
      pledges, hypothecates and transfers to Lender, and hereby grants to
      Lender, a security interest in, all of Grantor's right, title and interest
      in, to and under the following (all of which being hereinafter
      collectively called the "Collateral"):

               (i)      all Accounts Receivable of Grantor;

              (ii)      all Chattel Paper of Grantor;

             (iii)      all Contracts of Grantor;

              (iv)      all Documents of Grantor;

               (v)      all Equipment of Grantor;

              (vi)      all Intangible Assets of Grantor;

             (vii)      all Instruments of Grantor;

            (viii)      all Inventory of Grantor;

              (ix)      all Investment Property of Grantor;

               (x)      to the extent not otherwise included, all Proceeds of
                        each of the foregoing and all accessions to,
                        substitutions and replacements for, and rents, profits
                        and product of each of the foregoing.

                                       3
<PAGE>

            (b) In addition, as collateral security for the prompt and complete
      payment when due of the Obligations and in order to induce Lender as
      aforesaid, Lender is hereby granted a lien and security interest in all
      property of Grantor held by Lender, including, without limitation, all
      property of every description, now or hereafter in the possession or
      custody of or in transit to Lender for any purpose, including safekeeping,
      collection or pledge, for the account of Grantor, or as to which Grantor
      may have any right or power.

            (c) The Collateral shall not include any assets of Grantor in which
      Grantor has granted Old National Bank a security interest pursuant to that
      certain Commercial Security Agreement dated April 14, 2000 between Grantor
      and Old National Bank, which Grantor represents and warrants consist
      solely of the assets described on EXHIBIT A attached hereto, to the extent
      that a breach of or a default under such Commercial Security Agreement
      would result by including any such assets within the definition of the
      Collateral.

      3. RIGHTS OF LENDER; LIMITATIONS ON LENDER'S OBLIGATIONS.

            (a) It is expressly agreed by Grantor that, anything herein to the
      contrary notwithstanding, Grantor shall remain liable under each of its
      Contracts to observe and perform all the conditions and obligations to be
      observed and performed by it thereunder and Grantor shall perform all of
      its duties and obligations thereunder, all in accordance with and pursuant
      to the terms and provisions of each such Contract. Lender shall not have
      any obligation or liability under any Contract by reason of or arising out
      of this Security Agreement or the granting to Lender of a security
      interest therein or the receipt by Lender of any payment relating to any
      Contract pursuant hereto, nor shall Lender be required or obligated in any
      manner to perform or fulfill any of the obligations of Grantor under or
      pursuant to any Contract, or to make any payment, or to make any inquiry
      as to the nature or the sufficiency of any payment received by it or the
      sufficiency of any performance by any party under any Contract, or to
      present or file any claim, or to take any action to collect or enforce any
      performance or the payment of any amounts which may have been assigned to
      it or to which it may be entitled at any time or times.

            (b) Grantor hereby authorizes Lender, at any time or times after the
      occurrence and during the continuance of an Event of Default, to (i)
      notify any or all Account Debtors that the Accounts Receivable have been
      assigned to Lender and that Lender has a security interest therein and
      (ii) direct such Account Debtors to make all payments due from them to
      Grantor upon the Accounts Receivable directly to Lender or to a lock box
      designated by Lender. Lender shall promptly furnish Grantor with a copy of
      any such notice sent. Any such notice, in Lender's sole discretion, may be
      sent on Grantor's stationery, in which event Grantor shall co-sign such
      notice with Lender.

            (c) Lender shall have the right to make test verifications of the
      Accounts Receivable in any manner and through any commercially reasonable
      medium that it considers advisable, and Grantor agrees to furnish all such
      assistance and information as Lender may require in connection therewith.
      Grantor at its expense will cause certified independent public accountants
      satisfactory to Lender to prepare and deliver to Lender at any time and
      from time to time promptly upon Lender's request, the following reports:
      (i) a reconciliation of all its Accounts Receivable, (ii) an aging of all
      its Accounts Receivable, (iii) trial balances, and (iv) a test
      verification of such Accounts Receivable as Lender may request.

      4. REPRESENTATIONS AND WARRANTIES. Grantor hereby represents and warrants
that:

            (a) Except for the security interest granted to Lender pursuant to
      this Security Agreement, Grantor is the sole owner of each item of the
      Collateral in which it purports to grant a security interest hereunder,
      having good and marketable title thereto, free and clear of any and all
      liens and encumbrances. No material amounts payable under or in connection
      with any of its Accounts Receivable or Contracts are

                                       4
<PAGE>

      evidenced by Instruments which have not been delivered to Lender.

            (b) No effective security agreement, financing statement, equivalent
      security or lien instrument or continuation statement covering all or any
      part of the Collateral has been executed by Grantor or is on file or of
      record in any public office, except such as may have been filed by Grantor
      in favor of Lender pursuant to this Security Agreement.

            (c) Upon the filing of appropriate financing statements, this
      Security Agreement shall be effective to create a valid and continuing
      first priority lien on and first priority perfected security interest in
      the Collateral with respect to which a security interest may be perfected
      by filing pursuant to the UCC in favor of Lender prior to all other liens,
      and is enforceable as such as against creditors of and purchasers from
      Grantor. All action necessary or desirable to protect and perfect such
      security interest in each item of the Collateral has been duly taken.

            (d) Grantor's principal place of business and the place where its
      records concerning the Collateral are kept is located at the address of
      Grantor set forth in Section 12 hereof, and Grantor will not change such
      principal place of business or remove such records unless it has taken
      such action as is necessary to cause the security interest of Lender in
      the Collateral to continue to be perfected. Grantor will not change its
      principal place of business or the place where its records concerning the
      Collateral is kept without giving thirty (30) days' prior written notice
      thereof to Lender.

            (e) Grantor is a limited liability company, duly formed, validly
      existing and in good standing under the laws of the State of Delaware;
      Grantor is properly qualified to do business and is in good standing under
      the laws of each state in which it either owns property or transacts
      business; the execution, delivery and performance of this Security
      Agreement, the Note and all other related documents and agreements have
      been authorized by all necessary actions of Grantor's Board of Managers
      and member; the Note, this Agreement and all other related documents and
      agreements have been duly executed and delivered by Grantor and constitute
      the legal, valid and binding obligations of Grantor enforceable in
      accordance with their respective terms.

            (f) Grantor is the owner of all assets and property relating to the
      outdoor billboard advertising business described in that certain Business
      Plan of Prime Outdoor Group prepared by Mark Harris and Gina Crist; a
      true, correct and complete list of all of Grantor's assets is attached
      hereto as Exhibit B.

            (g) Neither the execution, delivery and performance of the Note or
      this Security Agreement, nor the exercise of Lender's rights and remedies
      thereunder or hereunder, shall violate, conflict with, breach or cause a
      default under any document, instrument or agreement applicable to or
      relating to Grantor or any portion of the Collateral or to which Borrower
      is a party or by which it is bound.

      5. COVENANTS. Grantor covenants and agrees with Lender that from and after
the date of this Security Agreement and until the Obligations are fully
satisfied:

            (a) FINANCING STATEMENTS AND FURTHER DOCUMENTATION. Grantor will
      join with Lender in the execution and filing of such financing statement
      or statements in the form and content reasonably required by Lender.
      Grantor will pay all costs of filing any financing, continuation or
      termination statements with respect to the security interest created by
      this Agreement, together with costs and expenses of any lien search
      required by Lender, during the term hereof, either as a condition
      precedent to the extension of the Loan or as a condition precedent to any
      advance made by Lender to Grantor hereunder. At any time and from time to
      time, upon the written request of Lender, and at the sole expense of
      Grantor, Grantor will promptly and duly execute and deliver any and all
      such further instruments and documents and

                                       5
<PAGE>

      take such further action as Lender may reasonably deem desirable to obtain
      the full benefits of this Security Agreement and of the rights and powers
      herein granted, including, without limitation, using its best efforts to
      secure all consents and approvals necessary or appropriate for the
      assignment to Lender of any Contract held by Grantor or in which Grantor
      has any rights not heretofore assigned, the filing of any financing or
      continuation statements under the UCC with respect to the liens and
      security interests granted hereby, transferring Collateral to the Lender's
      possession (if a security interest in such Collateral can be perfected by
      possession), placing the interest of Lender as lienholder on the
      certificate of title of any vehicle and using its best efforts to obtain
      waivers of liens from landlords and mortgagees. Grantor also hereby
      authorizes Lender to file any such financing or continuation statement
      without the signature of Grantor to the extent permitted by applicable
      law.

            (b) SPECIAL COLLATERAL. Immediately upon Grantor's receipt of that
      portion of the Collateral which is or becomes evidenced by an agreement,
      instrument and/or document, including, without limitation, promissory
      notes, trade acceptances, documents of title and warehouse receipts (the
      "Special Collateral"), Grantor shall deliver the original thereof to
      Lender, together with appropriate endorsements or other specific evidence
      (in form and substance reasonably acceptable to Lender) of assignment
      thereof to Lender.

            (c) MAINTENANCE OF RECORDS. Grantor will keep and maintain at its
      own cost and expense satisfactory and complete records of the Collateral,
      including, without limitation, a record of all payments received and all
      credits granted with respect to the Collateral and all other dealings with
      the Collateral. Grantor will mark its books and records pertaining to the
      Collateral to evidence this Security Agreement and the security interests
      granted hereby. All Chattel Paper will be marked with the following
      legend: "This writing and the obligations evidenced or secured hereby are
      subject to the security interest of Horizon Group Properties, Inc. (or any
      successor lender)". For Lender's further security, Grantor agrees that
      Lender shall have a special property interest in all of Grantor's books
      and records pertaining to the Collateral and, upon the occurrence and
      during the continuation of any Event of Default, Grantor shall deliver and
      turn over true, correct and complete copies of any such books and records
      to Lender or to its representatives at any time on demand of Lender. Prior
      to the occurrence of an Event of Default and upon reasonable notice from
      Lender, Grantor shall permit any representative of Lender to inspect such
      books and records and will provide photocopies thereof to Lender.

            (d) INDEMNIFICATION. In any suit, proceeding or action brought by
      Lender relating to any Account Receivable, Chattel Paper, Contract,
      Intangible Asset or Instrument for any sum owning thereunder, or to
      enforce any provision of any Account Receivable, Chattel Paper, Contract,
      Intangible Asset or Instrument, Grantor will save, indemnify and keep
      Lender harmless from and against all expense, loss or damage suffered by
      reason of any defense, setoff, counterclaim, recoupment or reduction of
      liability whatsoever of the obligor thereunder, arising out of a breach by
      Grantor of any obligation thereunder or arising out of any other
      agreement, indebtedness or liability at any time owing to, or in favor of,
      such obligor or its successors from Grantor, and all such obligations of
      Grantor shall be and remain enforceable against and only against Grantor
      and shall not be enforceable against Lender.

            (e) COMPLIANCE WITH LAWS, ETC. Grantor will comply, in all material
      respects, with all acts, rules, regulations, orders, decrees and
      directions of any governmental authority, applicable to the Collateral or
      any part thereof or to the operation of Grantor's business; PROVIDED,
      HOWEVER, that Grantor may contest any act, regulation, order, decree or
      direction in any reasonable manner which shall not in the sole opinion of
      Lender, adversely affect Lender's rights hereunder or adversely affect the
      first priority of its security interest in the Collateral.

            (f) PAYMENT OF OBLIGATIONS. Grantor will pay promptly when due all
      charges imposed upon the Collateral or in respect of its income or profits
      therefrom and all claims of any kind (including, without limitation,
      claims for labor, material and supplies).

                                       6
<PAGE>

            (g) COMPLIANCE WITH TERMS OF ACCOUNTS, ETC. In all material
      respects, Grantor will perform and comply with all obligations in respect
      of Accounts Receivable, Chattel Paper and Contracts and all other
      agreements to which it is a party or by which it is bound.

            (h) LIMITATION ON LIENS ON COLLATERAL. Except for the liens
      previously granted to Old National Bank, Grantor will not create, permit
      or suffer to exist, and will defend the Collateral and any real property
      now or hereafter owned by Grantor against and take such other action as is
      necessary to remove, any lien on the Collateral or any of its real
      property, and will defend the right, title and interest of Lender in and
      to any of Grantor's rights under the Chattel Paper, Contracts, Documents,
      Intangible Assets and Instruments and to the Equipment and Inventory and
      real property and in and to the Proceeds thereof against the claims and
      demands of all persons whomsoever.

            (i) MAINTENANCE OF INSURANCE. Grantor will maintain, with
      financially sound and reputable companies, insurance policies (i) insuring
      its Inventory and Equipment against loss by fire, explosion, theft and
      such other casualties as are usually insured against by companies engaged
      in the same or similar businesses and (ii) insuring Grantor and Lender
      against liability for personal injury and property damage relating to such
      Inventory and Equipment, such policies to be in such amounts and against
      at least such risks as are usually insured against, in the same general
      area by companies engaged in the same or a similar business, naming Lender
      as an additional insured with losses payable to Grantor and Lender, as
      their respective interests may appear, under a standard non-contributory
      "mortgagee", "lender" or "secured party" clause. Grantor shall, if so
      requested by Lender, deliver to Lender as often as Lender may reasonably
      request, a report of a reputable insurance broker satisfactory to Lender
      with respect to the insurance on its Inventory and Equipment. All
      insurance with respect to the Inventory and Equipment shall (i) contain a
      clause which provides that Lender's interest under the policy will not be
      invalidated by any act or omission of, or any breach of warranty by, the
      insured, or by any change in the title, ownership or possession of the
      insured property, or by the use of the property for purposes more
      hazardous than is permitted in the policy, and (ii) provide that no
      cancellation, reduction in amount or change in coverage thereof shall be
      effective until at least thirty (30) days after receipt by Lender of
      written notice thereof.

            (j) LIMITATIONS ON DISPOSITION. Grantor will not sell, lease,
      transfer or otherwise dispose of any significant portion of the
      Collateral, without Lender's prior written consent.

            (k) FURTHER IDENTIFICATION OF COLLATERAL. Grantor will, if so
      requested by Lender, furnish to Lender, as often as Lender reasonably
      requests, statements and schedules further identifying and describing the
      Collateral and such other reports in connection with the Collateral as
      Lender may reasonably request, all in reasonable detail.

            (l) NOTICES. Grantor will advise Lender promptly, in reasonable
      detail, (i) of any material lien, security interest, encumbrance or claim
      made or asserted against any of the Collateral, (ii) of any material
      change in the composition of the Collateral, and (iii) of the occurrence
      of any other event which would have a material adverse effect on the
      aggregate value of the Collateral or on the security interests created
      hereunder.

            (m) RIGHT OF INSPECTION. During regular business hours and upon
      reasonable prior notice (unless an Event of Default has occurred and is
      continuing, in which case at all times), Lender shall have full and free
      access to all the books and records and correspondence of Grantor, and
      Lender or its representatives may examine the same, take extracts
      therefrom and make photocopies thereof, and Grantor agrees to render to
      Lender, at Grantor's cost and expense, such clerical and other assistance
      as may be reasonably requested with regard thereto. Lender and its
      representatives shall also have the right to enter into and upon any
      premises where any of the Equipment or Inventory is located for the
      purpose of

                                       7
<PAGE>

      inspecting the same, observing its use or otherwise protecting its
      interests therein.

            (n) CONTINUOUS PERFECTION. Grantor will not change its name,
      identity or corporate structure in any manner which might make any
      financing or continuation statement filed in connection herewith seriously
      misleading within the meaning of section 9-402(7) of the UCC (or any other
      then applicable provision of the UCC) unless Grantor shall have given
      Lender at least thirty (30) days' prior written notice thereof and shall
      have taken all action (or made arrangements to take such action
      substantially simultaneously with such change if it is impossible to take
      such action in advance) necessary or reasonably requested by Lender to
      amend such financing statement or continuation statement so that it is not
      seriously misleading.

            (o) REAL PROPERTY. In the event Grantor hereafter acquires any real
      property or any interest in real property, Grantor shall notify Lender in
      writing in advance of the acquisition thereof, and if requested by Lender
      shall grant Lender a first priority mortgage lien on such property
      concurrently with the acquisition thereof, and agrees not to grant any
      lien, encumbrance, mortgage or security interest in such real property to
      any other person without Lender's prior written consent. In the event
      Grantor currently owns any real property or any interest in real property,
      Grantor shall promptly notify Lender in writing, and upon Lender's request
      shall grant Lender a first priority mortgage lien on such property.

      6.    LENDER'S APPOINTMENT AS ATTORNEY-IN-FACT.

            (a) Grantor hereby irrevocably constitutes and appoints Lender and
      any officer or agent thereof, with full power of substitution, as its true
      and lawful attorney-in-fact with full irrevocable power and authority in
      the place and stead of Grantor and in the name of Grantor or in its own
      name, from time to time in Lender's discretion, for the purpose of
      carrying out the terms of this Security Agreement, to take any and all
      appropriate action and to execute and deliver any and all documents and
      instruments which may be necessary or desirable to accomplish the purposes
      of this Security Agreement and, without limiting the generality of the
      fore going, hereby gives Lender the power and right, on behalf of Grantor,
      without notice to or assent by Grantor to do the following:

            (i)   to ask, demand, collect, receive and give acquittances and
                  receipts for any and all moneys due and to become due under
                  any Collateral and, in the name of Grantor or its own name or
                  otherwise, to take possession of and endorse and collect any
                  checks, drafts, notes, acceptances or other Instruments for
                  the payment of moneys due under any Collateral and to file any
                  claim or to take any other action or proceeding in any court
                  of law or equity or otherwise deemed appropriate by Lender for
                  the purpose of collecting any and all such moneys due under
                  any Collateral whenever payable and to file any claim or to
                  take any other action or proceeding in any court of law or
                  equity or otherwise deemed appropriate by Lender for the
                  purpose of collecting any and all such moneys due under any
                  Collateral whenever payable;

            (ii)  to pay or discharge taxes, liens, security interests or other
                  encumbrances levied or placed on or threatened against the
                  Collateral, to effect any repairs or any insurance called for
                  by the terms of this Security Agreement and to pay all or any
                  part of the premiums therefor and the costs thereof; and

            (iii) (A) to direct any party liable for any payment under any of
                  the Collateral to make payment of any and all moneys due, and
                  to become

                                       8
<PAGE>

                  due thereunder, directly to Lender or as Lender shall direct;
                  (B) to receive payment of and receipt for any and all moneys,
                  claims and other amounts due, and to become due at any time,
                  in respect of or arising out of any Collateral; (C) to sign
                  and indorse any invoices, freight or express bills, bills of
                  lading, storage or warehouse receipts, drafts against debtors,
                  assignments, verifications and notices in connection with
                  accounts and other Documents constituting or relating to the
                  Collateral; (D) to commence and prosecute any suits, actions
                  or proceedings at law or in equity in any court of competent
                  jurisdiction to collect the Collateral or any part thereof and
                  to enforce any other right in respect of any Collateral; (E)
                  to defend any suit, action or proceeding brought against
                  Grantor with respect to any Collateral; (F) to settle,
                  compromise or adjust any suit, action or proceeding described
                  above and, in connection therewith, to give such discharges or
                  releases as Lender may deem appropriate; and (G) generally to
                  sell, transfer, pledge, make any agreement with respect to or
                  otherwise deal with any of the Collateral as fully and
                  completely as though Lender were the absolute owner thereof
                  for all purposes, and to do, at Lender's option and Grantor's
                  expense, at any time, or from time to time, all acts and
                  things which Lender reasonably deems necessary to protect,
                  preserve or realize upon the Collateral and Lender's lien
                  therein, in order to effect the intent of this Security
                  Agreement, all as fully and effectively as Grantor might do.

            (b) Grantor hereby ratifies, to the extent permitted by law, all
      that said attorneys shall lawfully do or cause to be done by virtue
      hereof. The power of attorney granted pursuant to this Section 6 is a
      power coupled with an interest and shall be irrevocable until the
      Obligations are indefeasibly paid in full. Lender hereby agrees that it
      shall not exercise the power of attorney granted to it under this Section
      6 unless or until an Event of Default has occurred.

            (c) The powers conferred on Lender hereunder are solely to protect
      Lender's interests in the Collateral and shall not impose any duty upon it
      to exercise any such powers. Lender shall be accountable only for amounts
      that it actually receives as a result of the exercise of such powers and
      neither it nor any of its officers, directors, employees or agents shall
      be responsible to Grantor for any act or failure to act, except for its
      own gross negligence or willful misconduct.

            (d) Grantor also authorizes Lender, at any time and from time to
      time upon the occurrence and during the continuation of any Event of
      Default, (i) to communicate in its own name with any party to any Contract
      with regard to the assignment of the right, title and interest of Grantor
      in and under the Contracts hereunder and other matters relating thereto
      and (ii) to execute, in connection with the sale provided for in Section 8
      hereof, any endorsements, assignments or other instruments of conveyance
      or transfer with respect to the Collateral.

      7. PERFORMANCE BY LENDER OF GRANTORS' OBLIGATION. If Grantor fails to
perform or comply with any of its agreements contained herein (after notice, to
the extent required to be delivered by Lender hereunder) and Lender, as provided
for by the terms of this Security Agreement, shall itself perform or comply, or
otherwise cause performance or compliance, with such agreement, the reasonable
expenses of Lender incurred in connection with such performance or compliance,
together with interest thereon at the rate then in effect in respect of the
Loan, shall be payable by Grantor to Lender on demand and shall constitute
Obligations secured hereby.

                                       9
<PAGE>

      8.    REMEDIES, RIGHTS UPON DEFAULT.

            (a) If an Event of Default shall occur and be continuing, Lender may
      accelerate the Obligations and declare the Obligations to be immediately
      due and payable, without notice or demand, exercise all other rights and
      remedies granted to it in this Security Agreement and in any other
      instrument or agreement securing, evidencing or relating to the
      Obligations, and exercise all rights and remedies of a secured party under
      the UCC. Without limiting the generality of the foregoing, Grantor
      expressly agrees that in any such event Lender, without demand of
      performance or other demand, advertisement or notice of any kind (except
      the notice specified below of time and place of public or private sale) to
      or upon Grantor or any other person (all and each of which demands,
      advertisements and/or notices are hereby expressly waived to the maximum
      extent permitted by the UCC and other applicable law), may forthwith
      collect, receive, appropriate and realize upon the Collateral, or any part
      thereof, and/or may forthwith sell, lease, assign, give an option or
      options to purchase, or sell or otherwise dispose of and deliver said
      Collateral (or contract to do so), or any part thereof, in one or more
      parcels at public or private sale or sales, at any exchange or broker's
      board or at any of Lender's offices or elsewhere at such prices as it may
      deem best, for cash or on credit or for future delivery without assumption
      of any credit risk. Lender shall have the right upon any such public sale
      or sales, and, to the extent permitted by law, upon any such private sale
      or sales, to purchase the whole or any part of said Collateral so sold,
      free of any right or equity of redemption, which equity of redemption
      Grantor hereby releases. Grantor further agrees, at Lender's request, to
      assemble the Collateral and make it available to Lender at places which
      Lender shall reasonably select, whether at Grantor's premises or
      elsewhere. Lender shall apply the net proceeds of any such collection,
      recovery, receipt, appropriation, realization or sale, as provided in
      Section 8(d) hereof, Grantor remaining liable for any deficiency remaining
      unpaid after such application, and only after so paying over such net
      proceeds and after the payment by Lender of any other amount required by
      any provision of law, including section 9-504(1)(c) of the UCC, need
      Lender account for the surplus, if any, to Grantor. To the maximum extent
      permitted by applicable law, Grantor waives all claims, damages, and
      demands against Lender arising out of the repossession, retention or sale
      of the Collateral except such as arise out of the gross negligence or
      wilful misconduct of Lender. Grantor agrees that the Lender need not give
      more than ten (10) days' notice (which notification shall be deemed given
      when mailed or delivered on an overnight basis, postage prepaid, addressed
      to Grantor at its address referred to in Section 12 hereof) of the time
      and place of any public sale or of the time after which a private sale may
      take place and that such notice is reasonable notification of such
      matters. Grantor shall remain liable for any deficiency if the proceeds of
      any sale or disposition of the Collateral are insufficient to pay all
      amounts to which Lender is entitled, Grantor also being liable for the
      fees of any attorneys employed by Lender to collect such deficiency.

            (b) Grantor also agrees to pay all costs of Lender, including,
      without limitation, reasonable attorneys' fees, incurred in connection
      with the enforcement of any of its rights and remedies hereunder.

            (c) Grantor hereby waives presentment, demand, protest or any notice
      (to the maximum extent permitted by applicable law) of any kind in
      connection with this Security Agreement or any Collateral.

            (d) The Proceeds of any sale, disposition or other realization upon
      all or any part of the Collateral shall be distributed by Lender in the
      following order of priorities:

                  FIRST, to Lender in an amount sufficient to pay in full the
            reasonable expenses of

                                       10
<PAGE>

            Lender in connection with such sale, disposition or other
            realization, including all expenses, liabilities and advances
            incurred or made by Lender in connection therewith, including,
            without limitation, reasonable attorney's fees;

                  SECOND, to Lender (or such other holder of the Obligations) in
            an amount equal to the then unpaid Obligations;

                  FINALLY, upon payment in full of all of the Obligations, to
            pay to Grantor, or its representatives or as a court of competent
            jurisdiction may direct, any surplus then remaining from such
            Proceeds.

      9. EVENTS OF DEFAULT. An Event of Default shall be deemed to have occurred
upon the occurrence of any of the following events:

            (a) Grantor shall fail to make any payment when due under the terms
      of the Note or an Event of Default shall occur under the Note;

            (b) Grantor shall fail to perform any obligation or observe any
      covenant arising under this Security Agreement or any other document,
      instrument or agreement executed and delivered in connection with or
      relating to the Obligations and such failure is not cured within fifteen
      (15) business days after notice from Lender, or should any representation
      or warranty made by Grantor prove to be untrue or misleading in any
      material respect when made;

            (c) Any of the assets of Grantor with a value in excess of $50,000
      shall be attached, seized, levied upon or subjected to a writ or distress
      warrant, or come within the possession of any receiver, trustee, custodian
      or assignee for the benefit of creditors of Grantor and shall remain
      unstayed or undismissed for 10 consecutive days; or any person shall apply
      for the appointment of a receiver, trustee or custodian for any of the
      assets of Grantor and shall remain unstayed or undismissed for 10
      consecutive days; or Grantor shall have concealed, removed or permitted to
      be concealed or removed, any part of its property with intent to hinder,
      delay or defraud its creditors or any of them or made or suffered a
      transfer of any of its property or the incurring of an obligation which
      may be fraudulent under any bankruptcy, fraudulent conveyance or other
      similar law;

            (d) A case or proceeding shall have been commenced against Grantor
      in a court having competent jurisdiction seeking a decree or order in
      respect of Grantor (i) under the Bankruptcy Code, or any other applicable
      Federal, state or foreign bankruptcy or other similar law, (ii) appointing
      a custodian, receiver, liquidator, assignee, trustee or sequestrator (or
      similar official) of Grantor or of any substantial part of its properties,
      or (iii) ordering the winding-up or liquidation of the affairs of Grantor
      and such case or proceeding shall remain undismissed or unstayed for 30
      consecutive days or such court shall enter a decree or order granting the
      relief sought in such case or proceeding;

            (e) Grantor shall (i) file a petition seeking relief under the
      Bankruptcy Code, or any other applicable Federal, State or foreign
      bankruptcy or other similar law, (ii) consent to the institution of
      proceedings thereunder or to the filing of any such petition or to the
      appointment of or taking possession by a custodian, receiver, liquidator,
      assignee, trustee or sequestrator (or similar official) of Grantor or of
      any substantial part of its properties, (iii) fail generally to pay its
      debts as such debts become due, or (iv) take any corporate action in
      furtherance of any such action; or

            (f) Grantor shall fail to deliver any documents, instruments or
      agreements required by Lender to perfect a security interest, mortgage or
      lien on any of the Collateral or its interests in

                                       11
<PAGE>

      real property within two business days after delivery of such documents,
      instruments or agreements to Grantor.

      10. LIMITATION ON LENDER'S DUTY IN RESPECT OF COLLATERAL. Lender shall use
reasonable care with respect to the Collateral in its possession or under its
control. Lender shall not have any other duty as to any Collateral in its
possession or control or in the possession or control of any agent or nominee of
it or any income thereon or as to the preservation of rights against prior
parties or any other rights pertaining thereto. Upon request of Grantor, Lender
shall account for any moneys received by it in respect of any foreclosure on or
disposition of the Collateral.

      11. REINSTATEMENT. This Agreement shall remain in full force and effect
and continue to be effective should any petition be filed by or against Grantor
for liquidation or reorganization, should Grantor become insolvent or make an
assignment for the benefit of creditors or should a receiver or trustee be
appointed for all or any significant part of Grantor's assets, and shall
continue to be effective or be reinstated, as the case may be, if at any time
payment and performance of the Obligations, or any part thereof, is, pursuant to
applicable law, rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee of the Obligations, whether as a "voidable preference",
"fraudulent conveyance", or otherwise, all as though such payment or performance
had not been made. In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned, the Obligations shall be reinstated
and deemed reduced only by such amount paid and not so rescinded, reduced,
restored or returned.

      12. NOTICES. Except as otherwise provided herein, whenever it is provided
herein that any notice, demand, request, consent, approval, declaration or other
communication shall or may be given to or served upon any of the parties by any
other party, or whenever any of the parties desires to give or serve upon any
other communication with respect to this Security Agreement, each such notice,
demand, request, consent, approval, declaration or other communication shall be
in writing and shall be delivered in person with receipt acknowledged, or sent
via overnight courier, addressed as hereafter set forth, or mailed by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:

      If to Grantor:    Prime Outdoor Group, LLC
                        1225 Seventeenth Street
                        Suite 1523
                        Denver, Colorado
                        Attn:  Gina Crist

                        The Prime Group, Inc.
                        77 West Wacker Drive
                        Suite 4200
                        Chicago, Illinois 60601
                        Attn:  Robert J. Rudnik

      If to Lender:     Horizon Group Properties, Inc.
                        77 West Wacker Drive
                        Suite 4200
                        Chicago, Illinois 60601
                        Attn:  Gary Skoien

      13. SEVERABILITY. Any provision of this Security Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such

                                       12
<PAGE>

provision in any other jurisdiction.

      14. NO WAIVER; CUMULATIVE REMEDIES. Lender shall not by any act, delay,
omission or otherwise be deemed to have waived any of its rights or remedies
hereunder, and no waiver shall be valid unless in writing, signed by Lender and
then only to the extent therein set forth. A waiver by Lender of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which Lender would otherwise have had on any future occasion. No
failure to exercise nor any delay in exercising on the part of Lender, any
right, power or privilege hereunder, shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or privilege hereunder
preclude any other or future exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies hereunder provided are
cumulative and may be exercised singly or concurrently, and are not exclusive of
any rights and remedies provided by law. None of the terms or provisions of this
Security Agreement may be waived, altered, modified or amended except by an
instrument in writing, duly executed by Lender and, where applicable by Grantor.

      15.   SUCCESSOR AND ASSIGNS; GOVERNING LAW.

            (a) This Security Agreement and all obligations of Grantor hereunder
      shall be binding upon the successors and assigns of Grantor, and shall,
      together with the rights and remedies of Lender hereunder, inure to the
      benefit of Lender, and all future holders of instruments or agreements
      evidencing the Obligations and their respective successors and assigns. No
      sales of participations, other sales, assignments, transfers or other
      dispositions of any agreement governing or instrument evidencing the
      Obligations or any portion thereof or interest therein shall in any manner
      affect the security interest granted to Lender hereunder.

            (b) This Security Agreement shall be governed by, and be construed
      and interpreted in accordance with, the laws of the State of Illinois.

      16. FURTHER INDEMNIFICATION. Grantor agrees to pay, and to save Lender
harmless from, any and all liabilities with respect to, or resulting from any
delay in paying, any and all excise, sales or other similar taxes which may be
payable or determined to be payable with respect to any of the Collateral or in
connection with any of the transactions contemplated by this Security Agreement.

      17. WAIVER OF JURY TRIAL AND WAIVER. GRANTOR WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES
HEREUNDER, UNDER THE NOTE OR UNDER ANY OTHER DOCUMENT, INSTRUMENT OR AGREEMENT
RELATED TO THE OBLIGATIONS. AS PART OF THE CONSIDERATION FOR VALUE THIS DAY
RECEIVED, GRANTOR HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL
COURT LOCATED WITHIN THE COUNTY OF COOK, STATE OF ILLINOIS, AND WAIVES PERSONAL
SERVICE OF ANY AND ALL PROCESS UPON GRANTOR, AND CONSENTS THAT ALL SUCH SERVICE
OF PROCESS BY MADE BY REGISTERED MAIL DIRECTED TO GRANTOR AT THE ADDRESSES
PROVIDED IN SECTION 12 ABOVE AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED
FIVE (5) BUSINESS DAYS AFTER THE SAME SHALL HAVE BEEN DEPOSITED IN THE UNITED
STATES MAILS, POSTAGE PREPAID. GRANTOR WAIVES ANY OBJECTION TO VENUE OF ANY
ACTION INSTITUTED HEREUNDER AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT.

                              [INTENTIONALLY BLANK]

                                       13
<PAGE>

      IN WITNESS WHEREOF, each of the parties hereto has caused this Security
Agreement to be executed and delivered by its duly authorized officer on the
date first set forth above.

                                          PRIME OUTDOOR GROUP, LLC

                                           By:  /s/ Mark T. Harris
                                               -----------------------
                                           Name:    Mark T. Harris
                                                 ---------------------
                                           Title:   President
                                                  --------------------

Accepted and acknowledged by:

HORIZON GROUP PROPERTIES, L.P.

By:  Horizon Group Properties, Inc., general partner

By:  /s/ David R. Tinkham
    ------------------------------------------------
Name:    David R. Tinkham
      ----------------------------------------------
Title:   CFO
       ---------------------------------------------

                                       14<PAGE>

                                  EXHIBIT 10.29

                                PLEDGE AGREEMENT

           THIS PLEDGE AGREEMENT (this "AGREEMENT"), dated as of April 18, 2000,
is by and among PRIME GROUP LIMITED PARTNERSHIP, an Illinois limited partnership
("PGLP"), PRIME GROUP II, L.P., an Illinois limited partnership ("PG2LP"), PRIME
GROUP III, L.P., an Illinois limited partnership ("PG3LP"), PRIME GROUP IV,
L.P., an Illinois limited partnership ("PG4LP"), PRIME GROUP V, L.P., an
Illinois limited partnership ("PG5LP"), and PRIME FINANCING LIMITED PARTNERSHIP,
an Illinois limited partnership ("PFLP"? PGLP, PG2LP, PG3LP, PG4LP, PG5LP and
PFLP are sometimes referred to herein collectively as the "PLEDGOR"), and
HORIZON GROUP PROPERTIES, L.P., a Delaware limited partnership (the "PLEDGEE").

                               W I T N E S S E T H

            WHEREAS, the Pledgee made a loan (the "LOAN") to Prime Outdoor
Group, LLC, a Delaware limited liability company ("BORROWER") in the amount of
One Million Five Hundred Thousand and 00/100 Dollars ($1,500,000.00), the
repayment of which is evidenced by that certain Promissory Note, dated of even
date herewith (the "NOTE"), issued by Borrower payable to the order of the
Pledgee; and

            WHEREAS, each of the Pledgors are affiliates of Borrower and will
receive direct or indirect financial benefits from the Loan; and

            WHEREAS, PFLP owns 277,850 common units of partnership interests in
the Pledgee ("HGPLP PARTNERSHIP UNITS"); PGLP owns (or has the rights to as more
specifically described on Schedule I attached hereto) 75,620 HGPLP Partnership
Units; PG2LP owns 42,281 HGPLP Partnership Units; PG3LP owns 3,081 HGPLP
Partnership Units; PG4LP owns 6,818 HGPLP Partnership Units, and PG5LP owns
5,133 HGPLP Partnership Units (the HGPLP Partnership Units referred to in this
paragraph are referred to in this Agreement as the "PLEDGED HGPLP PARTNERSHIP
UNITS"); and

            WHEREAS, pursuant to the Amended and Restated Agreement of Limited
Partnership of the Pledgee, dated as of _______________ (as amended, modified or
restated from time to time, the "HORIZON PARTNERSHIP AGREEMENT"), each of the
Pledged HGPLP Partnership Units may be exchanged one unit of HGPLP Partnership
Unit for one share of common stock, par value $0.01 per share ("HORIZON STOCK"),
of Horizon Group Properties, Inc., a Maryland corporation that has qualified for
treatment as a real estate investment trust ("HGPI"); and

            WHEREAS, as a condition to making the Loan, the Pledgee has required
that the Pledgor grant to the Pledgee a security interest in the Pledged HGPLP
Partnership Units as described on Schedule I attached hereto, as security for
the repayment of the Loan.

            NOW, THEREFORE, for good and valuable consideration, the receipt,
sufficiency and adequacy of which are hereby acknowledged, the Pledgor and the
Pledgee hereby agree as follows:

      1. PLEDGE. The Pledgor hereby pledges to the Pledgee, and grants to the
Pledgee a security interest in, the following (the "PLEDGED COLLATERAL"):

            (a) the Pledged HGPLP Partnership Units now owned by the Pledgor and
      the certificates, if any, representing such Pledged HGPLP Partnership
      Units, the Pledgor's interest in the capital, dividends, income, profits
      and distributions of HGPLP attributable to the Pledged HGPLP Partnership
      Units, and all other cash, securities, instruments and other property from
      time to time received, receivable or otherwise distributed in respect of
      or in exchange for any or all of the Pledged HGPLP Partnership Units;

                                       1
<PAGE>

            (b) all securities acquired by the Pledgor in any manner with
      respect to the Pledged HGPLP Partnership Units (including, but not limited
      to, Horizon Stock for which the Pledged HGPLP Partnership Units are
      exchangeable), and the certificates, if any, representing such securities
      (any such securities shall constitute part of the Pledged HGPLP
      Partnership Units under and as defined in this Agreement), and all
      dividends, cash, instruments, subscription warrants, securities and any
      other rights and options and other property from time to time received,
      receivable or otherwise distributed in respect of or in exchange for any
      or all of such securities; and

            (c) all other property hereafter delivered to the Pledgee in
      substitution for, as proceeds of, or in addition to any of the foregoing
      and all certificates, instruments and documents representing or evidencing
      such property, and all cash, securities, interest, dividends, rights and
      other property at any time and from time to time received, receivable or
      otherwise distributed in respect of or in exchange for or upon conversion
      of any or all thereof.

      2. SECURITY FOR OBLIGATIONS. The Pledged Collateral secures the repayment
of the Loan and all other amounts due and payable under the Note or in
connection with the Loan, whether for principal, interest, fees, expenses or
otherwise, and all obligations of the Pledgor now or hereafter existing under
this Agreement (the "OBLIGATIONS").

      3. DELIVERY OF PLEDGED COLLATERAL.

            (a) All certificates, instruments or documents, if any, representing
      or evidencing the Pledged Collateral (including all certificates
      representing the HGPLP Partnership Units to which PGLP is entitled as more
      specifically described on Schedule I attached hereto) shall be delivered
      to and held by or on behalf of the Pledgee pursuant hereto and shall be in
      suitable form for transfer by delivery, shall be accompanied by duly
      executed instruments of transfer or assignment in blank, all in form and
      substance satisfactory to the Pledgee. In the event any or all of the
      Pledged Collateral are evidenced by a book entry, Pledgor shall execute
      and deliver to Pledgee such documents as are required by Pledgee to create
      and perfect a security interest in such uncertificated Pledged Collateral.
      In addition, the Pledgee shall have the right at any time to exchange
      certificates or instruments representing or evidencing Pledged Collateral
      for certificates or instruments of smaller or larger denominations.

            (b) Pledgor shall, and shall cause other appropriate parties under
      Section 8-313 and 8-321 of the Uniform Commercial Code as in effect on the
      date hereof in the State of Illinois (the "CODE") to, mark it or their
      books and records with the numbers and face amounts of all uncertificated
      securities evidencing the Pledged Collateral, and all rollovers and
      replacements therefor to reflect the security interests granted pursuant
      to Section 2 hereof. Pledgor shall provide Pledgee and shall cause other
      persons to provide Pledgee with written confirmation of the security
      interest in such uncertificated securities. Pledgor shall take, and shall
      cause all other necessary persons to take, all action necessary or
      appropriate to create, perfect and maintain a first perfected priority
      lien in such uncertificated securities in favor of Pledgee. In the event
      that subsequent to the date hereof, the Pledged Collateral are evidenced
      by certificates, Pledgor will promptly deliver such certificates to
      Pledgee, together with an assignment duly endorsed in blank for transfer.

      4. REPRESENTATIONS AND WARRANTIES. The Pledgor represents and warrants as
follows:

            (a) The Horizon Stock to be issued upon the exchange of the Pledged
      HGPLP Partnership Units has been duly authorized and will be, upon
      exchange, fully paid and nonassessable.

            (b) The Pledgor is, or at the time of any future delivery, pledge,
      assignment or transfer will be, the legal and beneficial owner of the
      Pledged Collateral, free and clear of any lien, security interest, pledge,

                                       2
<PAGE>

      warrant, option, purchase agreement, shareholders' agreement, restriction,
      redemption agreement or other charge, encumbrance or restriction of any
      nature on the Pledged Collateral (except for the lien created by this
      Agreement and the restrictions imposed by the agreements listed on
      Schedule II hereto), with full right to deliver, pledge, assign and
      transfer the Pledged Collateral to the Pledgee as Pledged Collateral
      hereunder.

            (c) Subject to compliance with the agreements listed on Schedule II
      hereto, each of the Pledged HGPLP Partnership Units can be exchanged at
      any time at the rate of one unit of Pledged HGPLP Partnership Unit for one
      share of HGPI Stock.

            (d) Upon possession by the Pledgee of the certificates representing
      the Pledged Collateral, the pledge of the Pledged Collateral pursuant to
      this Agreement will create a valid, perfected and first security interest
      in the Pledged Collateral, securing the payment of the Obligations. All
      other filings, registrations, recordings and other actions necessary or
      desirable to create, perfect and protect such security interest have been
      duly taken, and such security interests are entitled to all of the rights,
      priorities and benefits afforded by the Code or other relevant law as
      enacted in any relevant jurisdiction which relates to perfected security
      interests.

            (e) Except as otherwise set forth in paragraph (d) above, no
      authorization, approval, or other action by, and no notice to or filing
      with, any governmental authority or regulatory body or any other person is
      required either (i) for the pledge by the Pledgor of the Pledged
      Collateral pursuant to this Agreement or for the execution, delivery or
      performance of this Agreement by the Pledgor, or (ii) for the exercise by
      the Pledgee of the voting or other rights provided for in this Agreement
      or the remedies in respect of the Pledged Collateral pursuant to this
      Agreement (except as may be required in connection with a disposition of
      such Pledged Collateral by laws affecting the offering and sale of
      securities generally).

            (f) The Pledgor has full power and authority to enter into this
      Agreement and has the right to pledge and grant a security interest in the
      Pledged Collateral as provided by this Agreement.

            (g) Schedule I ATTACHED HERETO LISTS ALL OF THE HGPLP PARTNERSHIP
      UNITS OWNED BY PLEDGOR WHICH ARE NOT CURRENTLY SUBJECT TO A PLEDGE TO ANY
      PERSON OTHER THAN THE PLEDGEE.

      5. FURTHER ASSISTANCE. The Pledgor agrees that at any time and from time
to time, at the expense of the Pledgor, the Pledgor will promptly execute and
deliver, or cause to be executed and delivered, all certificates, stock powers,
proxies, assignments, instruments and documents; and will take all further
action that may be reasonably necessary or desirable, or that the Pledgee may
reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable the Pledgee to exercise
and enforce its rights and remedies hereunder with respect to any Pledged
Collateral and to carry out the provisions and purposes hereof.

      6. VOTING RIGHTS; DIVIDENDS; ETC.

            (a)   Except  as set  forth  below,  so long as no Event of  Default
      (as hereinafter defined):

                  (i) The Pledgor shall be entitled to exercise any and all
            voting and other consensual rights pertaining to the Pledged
            Collateral or any part thereof for any purpose not inconsistent with
            the terms of this Agreement or any document executed in connection
            with this Agreement; PROVIDED, HOWEVER, that the Pledgor shall not
            exercise nor shall it refrain from exercising any such right if such

                                       3
<PAGE>

            action or inaction could have a material adverse effect on the value
            of the Pledged Collateral or upon the rights of the Pledgee to
            effectively realize upon the security afforded by such Pledged
            Collateral.

                  (ii) The Pledgor shall be entitled to receive and retain any
            and all distributions paid in respect of the Pledged HGPLP
            Partnership Units, provided however, that any and all

                  (1)   dividends, interest and distributions paid or payable
                        other than in cash in respect of, and instruments and
                        other property received, receivable or otherwise
                        distributed in respect of, or in exchange for, any
                        Pledged Collateral,

                  (2)   dividends and other distributions paid or payable in
                        cash in respect of any Pledged Collateral in connection
                        with a partial or total liquidation or dissolution or in
                        connection with a reduction of capital, capital surplus
                        or paid-in-surplus resulting from a sale or refinancing
                        of any property, and

                  (3)   cash paid, payable or otherwise distributed in
                        redemption of, or in exchange for, any Pledged
                        Collateral,

            shall be Pledged Collateral, shall be forthwith delivered to the
            Pledgee to hold as Pledged Collateral and shall, if received by the
            Pledgor, be received in trust for the benefit of the Pledgee, be
            segregated from the other property or funds of the Pledgor, and be
            forthwith delivered to the Pledgee as Pledged Collateral in the same
            form as so received (with any necessary endorsement).

            (b) Except as set forth below, upon the occurrence (and during the
      continuance) of an Event of Default (as hereinafter defined):

                  (i) All rights of the Pledgor to exercise the voting and other
            consensual rights which it would otherwise be entitled to exercise
            pursuant to Section 6(a)(i) (but only after an Event of Default) and
            to receive the dividends and interest payments and distributions
            which it would otherwise be authorized to receive and retain
            pursuant to Section 6(a)(ii) shall cease, and all such rights shall
            thereupon become vested in the Pledgee which shall thereupon have
            the sole right to exercise such voting and other consensual rights
            and to receive and hold as Pledged Collateral such dividends and
            interest payments and distributions;

                  (ii) All dividends and interest payments and distributions
            which are received by the Pledgor contrary to the provisions of
            paragraph (i) of this Section 6(b) shall be received in trust for
            the benefit of the Pledgee, shall be segregated from other funds of
            the Pledgor and shall be forthwith paid over to the Pledgee as
            Pledged Collateral in the same form as so received (with any
            necessary endorsements); and

                  (iii) The Pledgor shall execute and deliver (or cause to be
            executed and delivered) to the Pledgee all such proxies and other
            instruments as the Pledgee may (reasonably) request for the purpose
            of enabling the Pledgee to exercise the voting and other rights
            which it is entitled to exercise pursuant to paragraph (i) above and
            to receive the dividends or interest payments or distribution which
            it is authorized to receive pursuant to paragraph (ii) above.

      7. TRANSFERS AND OTHER LIENS; ADDITIONAL SHARES. The Pledgor agrees that
it will not without the prior consent of the Pledgee (i) sell, assign, transfer,
convey, exchange, pledge, hypothecate or otherwise dispose of, or grant any
option, warrant, right, contract or commitment with respect to, any of the
Pledged Collateral without the prior

                                       4
<PAGE>

written consent of the Pledgee, or (ii) create or permit to exist any lien,
security interest, pledge, proxy, purchase arrangement, restriction, redemption
agreements, shareholders' agreement or other charge or encumbrance upon or with
respect to any of the Pledged Collateral, except for the lien created by this
Agreement, restrictions imposed by the agreements listed on Schedule II hereto.

      8. APPLICATION OF PROCEEDS OF SALE OR CASH HELD AS COLLATERAL. All
proceeds from the sale of Pledged Collateral sold pursuant to this Agreement
and/or the cash held as Pledged Collateral hereunder shall be (a) retained by
the Pledgee as cash collateral for the Obligations, or (b) at the election of
the Pledgee, applied by the Pledgee as follows:

                  FIRST: to payment of the costs and expenses of such sale,
including the out-of-pocket expenses of the Pledgee, including the reasonable
fees and out-of-pocket expenses of counsel employed in connection therewith, and
to the payment of all advances made by the Pledgee for the account of the
Pledgor hereunder, and the payment of all costs and expenses incurred by the
Pledgee in connection with the administration and enforcement of this Agreement,
to the extent that such advances, costs and expenses shall not have been
reimbursed to the Pledgee;

                  SECOND: to the payment of interest accrued and unpaid, if any,
on any of the Obligations to and including the date of such application and then
to the payment or prepayment of principal of any of the Obligations and then to
the payment of the balance of the Obligations in such order as Pledgee may
determine in its sole discretion; and

                  THIRD: the balance, if any, of such proceeds shall be paid to
the Pledgor, or its successors or assigns, or as a court of competent
jurisdiction may direct.

      9. THE PLEDGEE APPOINTED ATTORNEY-IN-FACT. The Pledgor hereby appoints the
Pledgee as the Pledgor's attorney-in-fact (such appointment being irrevocable
and coupled with an interest), with full authority in the place and stead of the
Pledgor and in the name of the Pledgor or otherwise, from time to time after
giving notice to Pledgee in the Pledgee's discretion to take any action and to
execute any instrument which the Pledgee may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation, (i) to
receive, endorse and collect all instruments made payable to the Pledgor
representing any dividend, interest payment or other distribution in respect of
the Pledged Collateral or any part thereof and to give full discharge for the
same and (ii) to exercise all rights, including conversion rights, with respect
to such Pledged Collateral.

      10. THE PLEDGEE MAY PERFORM. If the Pledgor fails to perform any agreement
contained herein, the Pledgee may itself perform, or cause performance of, such
agreement, and the reasonable expenses of the Pledgee incurred in connection
therewith shall be payable by the Pledgor under Section 17.

      11. REASONABLE CARE. The Pledgee shall be deemed to have exercised
reasonable care in the custody and preservation of the Pledged Collateral in its
possession if the Pledged Collateral is accorded treatment substantially equal
to that which the Pledgee accords its own property, it being understood that the
Pledgee shall not have any responsibility for (i) ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relative to any Pledged Collateral, whether or not the Pledgee has or is
deemed to have knowledge of such matters, or (ii) taking any necessary steps to
preserve rights against any parties with respect to any Pledged Collateral;
PROVIDED, HOWEVER, that upon the Pledgor's instruction, the Pledgee shall use
reasonable efforts to take such action as the Pledgor directs the Pledgee to
take with respect to calls, conversions, exchanges, maturities, tenders, rights
against other parties or other similar matters relative to the Pledged
Collateral, but failure of the Pledgee to comply with any such request shall not
of itself be deemed a failure to exercise reasonable care, and no failure of the
Pledgee to preserve or protect any rights with respect to the Pledged Collateral
against prior parties, or to do any act with respect to preservation of the
Pledged Collateral not so requested by the Pledgor, shall be deemed a failure to
exercise reasonable care in the custody or preservation of the Pledged
Collateral.

                                       5
<PAGE>

      12. SUBSEQUENT CHANGES AFFECTING COLLATERAL. The Pledgor represents to the
Pledgee that the Pledgor has made its own arrangements for keeping informed of
changes or potential changes affecting the Pledged Collateral (including, but
not limited to, rights to convert, rights to subscribe, payment of dividends or
distributions, reorganization or other exchanges, tender offers and voting
rights), and the Pledgor agrees that the Pledgee shall have no responsibility or
liability for informing the Pledgor of any such changes or potential changes or
for taking any action or omitting to take any action with respect thereto.

      13.   EVENTS OF DEFAULT; REMEDIES UPON AN EVENT OF DEFAULT.

            (a) The occurrence of any one or more of the following events shall
      constitute an "EVENT OF DEFAULT" by Pledgor under this Agreement:

                  (i)  Borrower fails to make any payment when due under the
            Note;

                  (ii) the Pledgor fails to perform or observe any term,
            covenant (after 5 business days written notice) or agreement
            contained in this Agreement on its part to be performed or observed,
            or any representation or warranty made by the Pledgor in this
            Agreement shall be untrue or misleading in any material respect;

                  (iii) a notice of lien, levy or assessment is filed or
            recorded with respect to all or a substantial part of the Pledged
            Collateral, and such lien, levy or assessment is not released,
            discharged or removed within thirty (30) days from the date it is
            filed or recorded, except for a lien, levy or assessment which
            relates to current taxes not yet due and payable or a lien permitted
            by any of the Loan Documents (as defined in the Note);

                  (iv) all or a substantial part of the Pledged Collateral is
            attached, seized, subjected to a writ or distress warrant, or is
            levied upon, or comes within the possession of any receiver,
            trustee, custodian or assignee for the benefit of creditors; and

                  (v) an Event of Default (after the delivery of all required
            notices and the expiration of all applicable cure periods) occurs
            under any of the other Loan Documents.

            (b) If any Event of Default shall have occurred (and be continuing),
      the Pledgee shall have, in addition to all other rights given by law or by
      this Agreement, the Note or otherwise, all of the rights and remedies with
      respect to the Pledged Collateral of a secured party under the Code in
      effect in the State of Illinois at that time, and the Pledgee may, without
      notice and at its option, transfer or register the Pledged Collateral or
      any part thereof on the books of the issuer thereof into the name of the
      Pledgee or the Pledgee's nominee(s), with or without any indication that
      such Pledged Collateral is subject to the security interest hereunder. In
      addition, with respect to any Pledged Collateral which shall then be in or
      shall thereafter come into the possession or custody of the Pledgee, the
      Pledgee may sell or cause the same to be sold at any broker's board or at
      public or private sale, in one or more sales or lots, at such price or
      prices as the Pledgee may deem best, for cash or on credit or for future
      delivery, without assumption of any credit risk. The purchaser of any or
      all Pledged Collateral so sold shall thereafter hold the same absolutely,
      free from any claim, encumbrance or right of any kind whatsoever, except
      for claims, encumbrances or rights that may arise without the knowledge or
      consent of the Pledgor. Unless any of the Pledged Collateral threatens to
      decline speedily in value or is or becomes of a type sold on a recognized
      market, the Pledgee will give the Pledgor reasonable notice of the time
      and place of any public sale thereof, or of the time after which any
      private sale or other intended disposition is to be made. Any sale of the
      Pledged Collateral conducted in conformity with reasonable commercial
      practices

                                       6
<PAGE>

      of banks, insurance companies, commercial finance companies, or other
      financial institutions disposing of property similar to the Pledged
      Collateral shall be deemed to be commercially reasonable. Any requirements
      of reasonable notice shall be met if such notice is mailed to the Pledgor
      as provided in Section 20 below, at least five (5) days before the time of
      the sale or disposition. Any other requirement of notice, demand or
      advertisement for sale is, to the extent permitted by law, waived. The
      Pledgee may, in its own name or in the name of a designee or nominee, buy
      any of the Pledged Collateral at any public sale and, if permitted by
      applicable law, at any private sale. All expenses (including court costs
      and reasonable attorneys' fees and expenses) of, or incident to, the
      enforcement of any of the provisions hereof shall be recoverable from the
      proceeds of the sale or other disposition of Pledged Collateral. In view
      of the fact that federal and state securities laws may impose certain
      restrictions on the method by which a sale of the Pledged Collateral may
      be effected after an Event of Default, the Pledgor agrees that upon the
      occurrence or existence of any Event of Default, the Pledgee may, from
      time to time, attempt to sell all or any part of the Pledged Collateral by
      means of a private placement, restricting the prospective purchasers to
      those who can make the representations and agreements required of
      purchasers of securities in private placements. In so doing, the Pledgee
      may solicit offers to buy the Pledged Collateral, or any part of it, for
      cash, from a limited number of investors deemed by the Pledgee in its
      judgment, to be responsible parties who might be interested in purchasing
      the Pledged Collateral, and if the Pledgee solicits such offers from not
      less than two (2) such investors, then the acceptance by the Pledgee of
      the highest offer obtained therefrom shall be deemed to be a commercially
      reasonable method of disposition of the Pledged Collateral.

            In addition, upon the occurrence (and during the continuance) of an
      Event of Default, all rights of the Pledgor to exercise the voting and
      other rights which it would otherwise be entitled to exercise and to
      receive cash dividends and interest payments, shall cease, and all such
      rights shall thereupon become vested in the Pledgee as provided in Section
      6.

      14. SECURITIES LAWS. Pledgor hereby acknowledges and confirms that Pledgee
may be unable to effect a public sale of any or all of the Pledged Collateral by
reason of certain prohibitions contained in the Securities Act and applicable
state securities laws and may be compelled to resort to one or more private
sales thereof to a restricted group of purchasers who will be obligated to
agree, among other things, to acquire any of the Pledged Collateral for their
own respective accounts for investment and not with the view to the distribution
or resale thereof. Pledgor further acknowledges and confirms that any such
private sale may result in prices or other terms less favorable to the seller
than if such sale were a public sale and, notwithstanding such circumstances,
agrees that any such private sale shall be deemed to have been made in a
commercially reasonable manner, and the Pledgee shall be under no obligation to
take any steps in order to permit the Pledged Collateral to be sold at a public
sale. The Pledgee shall be under no obligation to delay a sale of any of the
Pledged Collateral for any period of time necessary to permit any issuer thereof
to register such Pledged Collateral for public sale under the Securities Act or
under applicable state securities laws.

      15. AUTHORITY OF THE PLEDGEE. The Pledgee shall have and be entitled to
exercise all such powers hereunder as are specifically delegated to the Pledgee
by the terms hereof, together with such powers as are incidental thereto. The
Pledgee may execute any of its duties hereunder by or through agents or
employees. Neither the Pledgee, nor any director, officer, agent or employee of
the Pledgee, shall be liable for any action taken or omitted to be taken by it
or them hereunder or in connection herewith, except for its or their own gross
negligence or willful misconduct. The Pledgor hereby agrees to indemnify and
hold harmless the Pledgee and/or any such director, officer, agent or employee
from and against any and all liability incurred by any of them, hereunder or in
connection herewith, unless such liability shall be due to its or their own
gross negligence or willful misconduct.

      16. TERMINATION. This Agreement shall terminate after the time when all
the Obligations have been fully paid and performed, at which time the Pledgee
shall reassign and redeliver (or cause to be reassigned and redelivered) to the
Pledgor, or to such person or persons as the Pledgor shall designate, against
receipt, such of the Pledged Collateral

                                       7
<PAGE>

(if any) as shall not have been sold or otherwise applied by the Pledgee
pursuant to the terms hereof and shall still be held by it hereunder, together
with appropriate instruments of reassignment and release. Any such reassignment
shall be without recourse upon or warranty by the Pledgee and at the expense of
the Pledgor.

      17. EXPENSES. The Pledgor agrees to reimburse the Pledgee promptly after
demand for any and all reasonable expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, which the Pledgee may
incur in connection with (i) the administration of this Agreement, (ii) the
custody or preservation of, or the registration of the Pledged Collateral, (iii)
the exercise or enforcement of any of the rights of the Pledgee hereunder, or
(iv) the failure by the Pledgor to perform or observe any of the provisions
hereof.

      18. SECURITY INTEREST ABSOLUTE. All rights of the Pledgee and security
interests hereunder, and all obligations of the Pledgor hereunder, shall be
absolute and unconditional irrespective of:

                  (i)   any lack of  validity or  enforceability  of the Note or
            any other agreement or instrument relating thereto;

                  (ii) any change in the time, manner or place of payment of, or
            in any other term of, all or any of the Obligations, or any other
            amendment or waiver of or any consent to any departure from the Note
            or any other Loan Document;

                  (iii) any exchange, surrender, release or non-perfection of
            any other collateral, or any release or amendment or waiver of or
            consent to departure from any guaranty, for all or any of the
            Obligations; or

                  (iv) any other circumstance which might otherwise constitute a
            defense available to, or a discharge of, the Pledgor in respect of
            the Obligations or of this Agreement.

      19. AMENDMENTS, WAIVERS AND CONSENTS. No amendment or waiver of any
provision of this Agreement nor consent to any departure by the Pledgor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Pledgee, and then such amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.

      20. NOTICES. Any notice required or desired to be served, given or
delivered hereunder shall be in writing (including facsimile transmission), and
shall be deemed to have been validly served, given or delivered upon the earlier
of (a) personal delivery to the address set forth below (b) in the case of
mailed notice, two (2) days after deposit in the United States mails, with
proper postage for certified mail, return receipt requested, prepaid, or in the
case of notice by Federal Express or other reputable overnight courier service,
one (1) day after delivery to such courier service, and (c) in the case of
facsimile transmission, upon transmission with confirmation of receipt,
addressed to the party to be notified as follows:

      If to the Pledgor:      c/o The Prime Group, Inc.
                              77 West Wacker Drive
                              Suite 4200
                              Attn: Michael W. Reschke
                              Facsimile Number: (312) 917-1511

      With copies to:         The Prime Group, Inc.
                              77 West Wacker Drive

                                       8
<PAGE>

                              Suite 4200
                              Attn: Robert J. Rudnik, Esq.
                              Facsimile Number: (312) 917-8442

      If to the Pledgee:      Horizon Group Properties, L.P.
                              77 West Wacker Drive
                              Suite 4200
                              Attention: Gary J. Skoien
                              Facsimile Number:  (312) 917-0911

      With a copy to:         Horizon Group Properties, L.P.
                              77 West Wacker Drive
                              Suite 4200
                              Attention: David Tinkham
                              Facsimile Number:  (312) 917-8440

or to such other address as any of the parties may hereafter designate for
itself by written notice to the other parties in the manner herein prescribed.

      21. CONTINUING SECURITY INTEREST. This Agreement shall create a continuing
security interest in the Pledged Collateral and shall (i) be binding upon the
Pledgor, its successors and assigns, and (ii) inure to the benefit of the
Pledgee and its successors, transferees and assigns.

      22. WAIVERS. To the extent permitted by applicable law, the Pledgor waives
presentment and demand for payment of any of the Obligations, protest and notice
of dishonor or default with respect to any of the Obligations, and all other
notices to which the Pledgor might otherwise be entitled, except as otherwise
expressly provided herein or in the Note.

      23. WAIVER OF JURY TRIAL. The Pledgor and the Pledgee each hereby waive
any right to a trial by jury in any action or proceeding to enforce or defend
any rights under this Agreement or any amendment, instrument, document or
agreement delivered or which may in the future be delivered in connection
herewith or arising from any banking relationship existing in connection with
this Agreement, and agrees that any such action or proceeding shall be tried
before a court and not before a jury.

      24. GOVERNING LAW; TERMS. This Agreement shall be governed by and
construed in accordance with the internal laws (as opposed to conflict of laws
provisions) and decisions of the State of Illinois. Unless otherwise defined
herein, terms defined in Articles 3, 8 and 9 of the Code are used herein as
therein defined. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but, if any provision of this Agreement shall be interpreted in such manner as
to be ineffective or invalid under applicable law, such provisions shall be
ineffective or invalid only to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Agreement.

      25. DEFINITIONS. The singular shall include the plural and vice versa and
any gender shall include any other gender as the text shall indicate.

      26. SECTION HEADINGS. The section headings herein are for convenience of
reference only, and shall not affect in any way the interpretation of any of the
provisions hereof.

            [BALANCE OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS.]

                                       9
<PAGE>

      IN WITNESS WHEREOF, the Pledgor and the Pledgee have each caused this
Pledge Agreement to be duly executed and delivered by its officer, if any,
thereunto duly authorized as of the date first above written.

                                    PRIME GROUP LIMITED PARTNERSHIP, an
                                    Illinois limited partnership

                                    By:   /s/ Michael W. Reschke
                                          ------------------------------------
                                          Michael W. Reschke
                                          Managing General Partner

                                    PRIME GROUP II, L.P., an Illinois limited
                                    partnership

                                    By:   PGLP, Inc.,
                                          Managing General Partner

                                    By: /s/ Michael W. Reschke
                                        --------------------------------------

                                    Its:  PRESIDENT
                                        --------------------------------------

                                    PRIME GROUP III, L.P., an Illinois limited
                                    partnership

                                    By:   PGLP, Inc.,
                                          Managing General Partner

                                    By: /s/ Michael W. Reschke
                                        --------------------------------------

                                    Its:  PRESIDENT
                                        --------------------------------------

                                    PRIME GROUP IV, L.P., an Illinois limited
                                    partnership

                                    By:   PGLP, Inc.,
                                          Managing General Partner

                                    By: /s/ Michael W. Reschke
                                        --------------------------------------

                                    Its:  President
                                        --------------------------------------

                                       10
<PAGE>

                                    PRIME GROUP V, L.P., an Illinois limited
                                    partnership

                                    By:   PGLP, Inc.,
                                          Managing General Partner

                                    By: /s/ MICHAEL W. RESCHKE
                                        --------------------------------------

                                    Its:  PRESIDENT
                                        --------------------------------------

                                    PRIME FINANCING LIMITED PARTNERSHIP, an
                                    Illinois limited partnership

                                    By:   Prime Finance, Inc.
                                          Managing General Partner

                                    By: /s/ MICHAEL W. RESCHKE
                                        --------------------------------------

                                    Its:  PRESIDENT
                                        --------------------------------------

                                    HORIZON GROUP PROPERTIES, L.P., a Delaware
                                    limited partnership

                                    By: Horizon Group Properties, Inc., a

                                    Maryland corporation, its Managing General

                                     Partner

                                    By: /s/ David R. Tinkham
                                        --------------------------------------

                                    Its: CFO
                                        --------------------------------------

                                       11
<PAGE>

                                   SCHEDULE I

                        DESCRIPTION OF PLEDGED COLLATERAL

      PLEDGED UNITS

      277,850 units of limited partnership interests in Horizon Group
      Properties, L.P., a Delaware limited partnership, in the name of Prime
      Financing Limited Partnership as evidenced by certificate number 0101

      2,150 units of limited partnership interests in Horizon Group
      Properties, L.P., a Delaware limited partnership, in the name of Prime
      Group Limited Partnership as evidenced by certificate number 0096*

      36,363 units of limited partnership interests in Horizon Group
      Properties, L.P., a Delaware limited partnership, in the name of Prime
      Group Limited Partnership as evidenced by certificate number 0121*

      42,281 units of limited partnership interests in Horizon Group
      Properties, L.P., a Delaware limited partnership, in the name of Prime
      Group II, L.P. as evidenced by certificate number 0097

      3,081 units of limited partnership interests in Horizon Group
      Properties, L.P., a Delaware limited partnership, in the name of Prime
      Group III, L.P. as evidenced by certificate number 0098

      6,818 units of limited partnership interests in Horizon Group
      Properties, L.P., a Delaware limited partnership, in the name of Prime
      Group IV, L.P. as evidenced by certificate number 0099

      5,133 units of limited partnership interests in Horizon Group
      Properties, L.P., a Delaware limited partnership, in the name of Prime
      Group V, L.P. as evidenced by certificate number 0120

            *37,107 units, although purchased by Prime Group Limited
      Partnership, have not been transferred in the records of Horizon Group
      Properties, L.P. Upon receipt by Prime Group Limited Partnership of
      certificates representing these units, such certificates shall be
      delivered to Horizon Group Properties, L.P.

                                       12
<PAGE>

                                   SCHEDULE II

                                OTHER AGREEMENTS

      1.    Registration Rights Agreement dated as of
            _________________ by and among Horizon Group
            Properties, Inc., Horizon Group Properties, L.P.,
            _____________________________________and the other
            investors named therein.

      2.    Agreement of Limited Partnership of Horizon Group
            Properties, L.P.

                                       13

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00009-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00009-of-00352.parquet"}]]