Document:

EXHIBIT 10.120

 

PROMISSORY
NOTE

 

 

	
   

  	
   

  	
  Chicago, Illinois

  
	
  $2,040,000.00

  	
   

  	
  November 3, 2003

  

 

THIS PROMISSORY NOTE (this “Note”) is made as of the
3rd day of November, 2003, by HORIZON GROUP PROPERTIES, L.P., a Delaware
limited partnership (“Borrower”), to the order of PLEASANT LAKE APTS. LIMITED
PARTNERSHIP, an Ohio limited partnership (“Lender”).

 

DEFINITIONS

 

Borrower agrees that, for the purposes of this Note,
the following terms shall have the following respective meanings ascribed
thereto.

 

1.1                               “Dollars”
shall mean dollars in lawful currency of The United States of America.

 

1.2                               “Default
Rate” shall mean two percent (2%) per annum in excess of the Interest Rate but
not in excess of the maximum interest rate permitted by law.

 

1.3                               “Interest
Rate” shall mean eight percent (8%).

 

1.4                               “Loan”
shall mean the loan made by the Lender to Borrower in the Original Principal
Amount.

 

1.5                               “Maturity
Date” shall mean August 3, 2004, or such earlier date the entire
Outstanding Principal Balance and accrued and unpaid interest thereon, and any
other sums which are due and payable pursuant to the terms and provisions of
this Note are due and payable by reason of the acceleration of the maturity of
this Note.

 

1.6                               “Original
Principal Amount” shall mean TWO MILLION FORTY THOUSAND DOLLARS
($2,040,000.00).

 

1.7                               “Outstanding
Principal Balance” shall mean the aggregate of all sums advanced by Lender to
or for the benefit of Borrower hereunder and not repaid.

 

II

PAYMENT OF INTEREST AND PRINCIPAL

 

For Value Received, Borrower hereby promises to pay to
the order of Lender the principal amount of Two Million Forty Thousand Dollars
($2,040,000.00), together with interest as provided herein below as follows:

 

1

 

2.1                               Payment
of Interest and Principal.  The
Outstanding Principal Balance evidenced by this Note shall accrue interest at
the rate (“Interest Rate”) of eight percent (8%) per annum, based on a year of
365 days.

 

2.2                               Prepayment Privileges.  This Note may be prepaid in whole or in part
at any time and from time to time during the term hereof upon at least fifteen
(15) days’ prior written notice to Lender. All partial prepayments shall be
applied in inverse order of maturity and shall not extend or reduce the next
installment due hereunder.

 

2.3                               Default
Interest.  Subsequent to an
Event of Default until cured, interest shall accrue on the Outstanding
Principal Balance at the Default Rate.

 

2.4                               Principal
and Interest at Maturity.  The
entire Outstanding Principal Balance and accrued and unpaid interest thereon,
and any and all other sums which are due and payable pursuant to the terms and
provisions of the Note shall be due and payable on the Maturity Date.

 

2.5                               Place
of Payment.  Payments and
prepayments to be made under this Note are to be made at such place as the
legal holder of this Note may from time to time in writing appoint, and, in the
absence of such appointment, then at the following address:

 

Pleasant Lake Apts.
Limited Partnership

c/o Ramat Securities

23811 Chagrin Boulevard, #200

Beachwood, Ohio  44122

 

III

DEFAULTS AND REMEDIES

 

3.1                               Occurrence
of Default; Acceleration of Maturity Date.  The failure by Borrower to make payment of principal or interest
as same becomes due and payable or payment of any other amount due to Lender under
this Note, within ten (10) days after written notice from Lender, shall
constitute an event of default under this Note (an “Event of Default”).  Upon the occurrence of an Event of Default
and at any time thereafter, at the election of the holder or holders hereof and
without additional notice to Borrower, the principal sum remaining unpaid
hereon, together with accrued interest thereon, shall become at once due and
payable at the place of payment as aforesaid, and Lender may proceed to
exercise any rights and remedies available to Lender against Borrower or with
respect to this Note which Lender may have at law, in equity or otherwise.

 

3.2                               Nature
of Remedies.  The remedies of
Lender as provided herein shall be cumulative and concurrent, and may be pursued
singularly, successively or together, at the sole discretion of Lender, and may
be exercised as often as occasion therefor shall arise.  Failure of Lender, for any period of time or
on more than one occasion, to exercise its option to accelerate the Maturity
Date of this Note shall not constitute a waiver of the right to exercise the
same at any time thereafter or in the event of any subsequent Event of
Default.  No act of omission or
commission of Lender, including specifically any failure to exercise any right,
remedy or recourse, shall be deemed to be a waiver or release of the same; any
such waiver or release is to be effected only through a written document
executed by Lender and then only to the extent specifically recited therein.  A waiver or release in connection with any
one event shall not be construed as a waiver or release of any

 

2

 

subsequent event or as a bar to
any subsequent exercise of Lender’s rights or remedies hereunder.  Notice of the exercise of any right or
remedy granted to Lender by this Note is not required to be given.

 

IV
OTHER GENERAL AGREEMENTS

 

4.1                               Notices.  Any notice which any party hereto may desire
or may be required to give to any other party’ hereto shall be in writing, and
shall be deemed given (i) if and when personally delivered, (ii) upon receipt
if sent by a nationally recognized overnight courier addressed to a party at
its address set forth below, or (iii) on the second (2nd) business day after
being deposited in United States registered or certified mail, postage prepaid,
addressed to a party at its address set forth below, or at such other place as
such party may have designated to all other parties by notice in writing in
accordance herewith:

 

	
  (a)

  	
  If to Borrower:

  	
   

  
	
   

  
	
  C/o Horizon
  Group Properties, Inc.

  
	
  77 West Wacker
  Drive, Suite 4200

  
	
  Chicago, IL
  60601

  
	
  Attention:

  	
  Gary Skoien

  
	
  Phone:

  	
  (312) 917-4227

  	
   

  
	
  Facsimile:

  	
  (312) 917-0911

  	
   

  
	
   

  	
   

  
	
   

  	
  With a copy to:

  
	
   

  	
   

  
	
   

  	
  David A.
  Grossberg, Esq.

  
	
   

  	
  Schiff Hardin
  & Waite

  
	
   

  	
  6600 Sears Tower

  
	
   

  	
  Chicago, IL  60606

  
	
   

  	
  Phone:

  	
  (312) 258-5764

  
	
   

  	
  Facsimile:

  	
  (312) 258-5700

  
	
   

  	
   

  
	
  (b)

  	
  If to Lender:

  	
   

  
	
   

  	
   

  
	
  PLEASANT LAKE
  APTS. LIMITED PARTNERSHIP

  	
   

  
	
  c/o Ramat
  Securities

  	
   

  
	
  23811 Chagrin
  Boulevard, #200

  	
   

  
	
  Beachwood,
  Ohio  44122

  	
   

  
	
  Attention:

  	
  Howard Amster

  	
   

  
	
  Phone:

  	
  (216) 595-1047

  	
   

  
	
  Facsimile:

  	
  (216) 595-0989

  	
   

  
	
   

  	
   

  
	
   

  	
  With a copy to:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Jennifer Lawry
  Adams, Esq.

  	
   

  
	
   

  	
  Ulmer &
  Berne LLP

  	
   

  
	
   

  	
  1300 East Ninth
  Street, Suite 900

  	
   

  
						

 

3

 

	
   

  	
  Cleveland,
  Ohio  44114

  
	
   

  	
  Phone:

  	
  (216) 902-8935

  
	
   

  	
  Facsimile:

  	
  (216) 621-7488

  

 

4.2                               Governing
Law.  Borrower agrees that this
instrument and the rights and obligations of the parties hereunder shall be
governed by the laws of the State of Ohio, without reference to the conflict of
law principles of such state.

 

4.3                               Interpretation.  The headings of sections and paragraphs in
this Note are for convenience only and shall not be construed in any way to
limit or define the content, scope or intent of the provisions hereof.  As used in this Note, the singular shall
include the plural, and masculine, feminine and neuter pronouns shall be fully
interchangeable, where the context so requires.  The parties hereto intend and believe that each provision in this
Note comports with all applicable law. 
However, if any provision in this Note is found by a court of law to be
in violation of any applicable law, and if such court should declare such
provision of this Note to be unlawful, void or unenforceable as written, then
it is the intent of all parties to the fullest possible extent that it is legal
valid and enforceable, that the remainder of this Note shall be construed as if
such unlawful, void or unenforceable provision were not contained therein, and
that the rights, obligations and interests of Borrower and the holder hereof
under the remainder of this Note shall continue in full force and effect.  Time is of the essence of this Note.

 

4.4                               Successors,
Holders and Assigns.  Upon any
endorsement, assignment or other transfer of this Note by Lender or by operation
of law, the term “Lender,” as used herein, shall mean such endorsee, assignee
or other transferee or successor to Lender then becoming the holder of this
Note.  This Note shall inure to the
benefit of Lender and its successors and assigns and shall be binding upon the
undersigned and its successors and assigns. 
The term “Borrower”, as used herein, shall include its successors and
assigns.

 

4.5                               Guarantee.  This Note is guaranteed by Horizon Group
Properties, Inc., the general partner of Borrower.

 

IN
WITNESS WHEREOF, Borrower has, through its duly authorized
officers, executed and delivered this Note as of the day and year first above
written.

 

	
   

  	
  BORROWER:

  
	
   

  	
   

  	
   

  
	
   

  	
  HORIZON GROUP PROPERTIES, L.P.,
  a

  Delaware limited partnership

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

4Exhibit 10.121

 

GUARANTY
OF PAYMENT

 

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

 

R E
C I T A L S:

 

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

 

B.                                     The
loan to be made pursuant to the Note will consist of a term loan of Two Million
Forty Thousand Dollars ($2,040,000) (the “Loan”).

 

C.                                     As
a condition precedent to Lender’s extension of the Loan to Borrower and in
consideration therefor, Lender has required, among other things, the execution
and delivery of: (i) this Guaranty by Guarantor and (ii) that certain
Promissory Note, dated of even date herewith, from Borrower to Lender in the
original principal amount of Two Million Forty Thousand Dollars ($2,040,000)
(as amended, modified, replaced or restated from time to time, the “Note”).

 

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

 

All terms not
otherwise defined herein shall have the meaning set forth in the Note.

 

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

 

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

 

1

 

and performance obligations of
Guarantor hereunder are referred to herein as “Borrower’s Obligations”.

 

2.                                      Performance
Guaranty.  Upon the occurrence
of an Event of Default under the Note which continues beyond any applicable
grace or cure period, Guarantor agrees, on not more than ten (10) days written
demand by Lender (a “Demand Notice”) to either cure or cause Borrower to cure
the Event of Default.

 

3.                                      Representations
and Warranties.  The following
shall constitute representations and warranties of Guarantor and Guarantor
hereby acknowledges that Lender intends to make the Loan in reliance thereon:

 

(a)                                  Guarantor
is duly organized, validly existing and in good standing under the laws of the
State of Maryland and has the full power and authority to enter into this
Guaranty and to perform all of its duties and obligations under this
Guaranty.  This Guaranty, when executed,
will be a valid and legally binding obligation of Guarantor enforceable against
Guarantor in accordance with its terms in all material respects.

 

(b)                                 To
the best of Guarantor’s knowledge, neither the execution and delivery of this
Guaranty nor compliance with the terms and provisions hereof will violate any
applicable law, rule, regulation, judgment, decree or order, or will conflict
with or result in any breach of any of the terms, covenants, conditions or
provisions of any indenture, mortgage, deed of trust, instrument, document,
agreement or contract of any kind that creates, represents, evidences or
provides for any lien, charge or encumbrance upon any of the property or assets
of Guarantor, or any other indenture, mortgage, deed of trust, instrument,
document, agreement or contract of any kind to which Guarantor is a party or to
which Guarantor or the property of Guarantor may be subject.

 

(c)                                  There
is not any litigation, arbitration, governmental or administrative proceedings,
actions, examinations, claims or demands pending, or to Guarantor’s knowledge,
threatened that could adversely affect performance by Guarantor of his, her or
its obligations under this Guaranty.

 

(d)                                 Neither
this Guaranty nor any statement or certification as to facts previously
furnished or required herein to be furnished to Lender by Guarantor, contains
any material inaccuracy or untruth in any representation, covenant or warranty
or omits to state a fact material to this Guaranty.

 

4.                                      Continuing
Guaranty.  Guarantor agrees that
performance of Borrower’s Obligations by Guarantor shall be a primary
obligation, shall not be subject to any counterclaim, set-off, abatement,
deferment or defense based upon any claim that Guarantor may have against
Lender, Borrower, any other guarantor of Borrower’s Obligations or any other
person or entity, and shall remain in full force and effect without regard to,
and shall not be released, discharged or affected in any way by, any
circumstance or condition (whether or not Guarantor shall have any knowledge
thereof), including without limitation:

 

(a)                                  any
lack of validity or enforceability of the Note, unless such lack of validity or
enforceability arises from Lender’s willful misconduct;

 

2

 

(b)                                 any
termination, amendment, modification or other change in any of the Note,
including, without limitation, any modification of the interest rate(s)
described therein;

 

(c)                                  any furnishing,
exchange, substitution or release of any collateral securing repayment of the
Loan, or any failure to perfect any lien in such collateral;

 

(d)                                 any failure, omission
or delay on the part of Borrower, Guarantor, any other guarantor of Borrower’s
Obligations or Lender to conform or comply with any term of the Note or any
failure of Lender to give notice of any Event of Default (as defined in the
Note);

 

(e)                                  any waiver,
compromise, release, settlement or extension of time of payment or performance
or observance of any of the obligations or agreements contained in the Note;

 

(f)                                    any action or
inaction by Lender under or in respect of the Note, any failure, lack of
diligence, omission or delay on the part of Lender to perfect, enforce, assert
or exercise any lien, security interest, right, power or remedy conferred on it
in the Note, or any other action or inaction on the part of Lender unless the
act or failure to act is found to be gross negligence or willful misconduct on
the part of Lender;

 

(g)                                 any voluntary or
involuntary bankruptcy, insolvency, reorganization, arrangement, readjustment,
assignment for the benefit of creditors, composition, receivership,
liquidation, marshalling of assets and liabilities or similar events or
proceedings with respect to Borrower or any other guarantor of Borrower’s
Obligations, as applicable, or any of their respective property or creditors,
or any action taken by any trustee or receiver or by any court in any such
proceeding;

 

(h)                                 any merger or
consolidation of Borrower into or with any entity, or any sale, lease or
transfer of any of the assets of Borrower, Guarantor or any other guarantor of
Borrower’s Obligations to any other person or entity;

 

(i)                                     any change in the
ownership of Borrower or any change in the relationship between Borrower,
Guarantor or any other guarantor of Borrower’s Obligations, or any termination
of any such relationship;

 

(j)                                     any release or
discharge by operation of law of Borrower, Guarantor or any other guarantor of
Borrower’s Obligations from any obligation or agreement contained in the Note;
or

 

(k)                                  any other occurrence, circumstance, happening or
event, whether similar or dissimilar to the foregoing and whether foreseen or
unforeseen, which otherwise might constitute a legal or equitable defense or
discharge of the liabilities of a guarantor or surety or which otherwise might
limit recourse against Borrower or Guarantor to the fullest extent permitted by
law.

 

5.                                      Waivers.  Guarantor expressly and unconditionally
waives:  (a) notice of any of the
matters referred to in Section 4 above, (b) all notices which may be
required by statute, rule of law or otherwise, now or hereafter in effect, to
preserve intact any rights against Guarantor, including, without limitation,
any demand, presentment and protest, proof of notice of non-payment under the

 

3

 

Note and notice of any Event of
Default or any failure on the part of Borrower, Guarantor or any other
guarantor of Borrower’s Obligations to perform or comply with any covenant,
agreement, term or condition of the Note, (c) any right to the enforcement, assertion
or exercise against Borrower, Guarantor or any other guarantor of Borrower’s
Obligations of any right or remedy conferred under the Note, (d) any
requirement of diligence on the part of any person or entity, (e) any
requirement to exhaust any remedies or to mitigate the damages resulting from
any default under the Note, and (f) any notice of any sale, transfer or other
disposition of any right, title or interest of Lender under the Note.

 

6.                                      Subordination.  Guarantor agrees that any and all present and
future debts and obligations of Borrower to Guarantor hereby are subordinated
to the claims of Lender and hereby are assigned by Guarantor to Lender as
security for Borrower’s Obligations and Guarantor’s obligations under this
Guaranty.

 

7.                                      Subrogation
Waiver.  Until Borrower’s
Obligations are paid in full and all periods under applicable bankruptcy law
for the contest of any payment by Guarantor or Borrower as a preferential or
fraudulent payment have expired, Guarantor knowingly, and with advice of counsel,
waives, relinquishes, releases and abandons all rights and claims to
indemnification, contribution, reimbursement, subrogation and payment which
Guarantor may now or hereafter have by and from Borrower and the successors and
assigns of Borrower, for any payments made by Guarantor to Lender, including,
without limitation, any rights which might allow Borrower, Borrower’s
successors, a creditor of Borrower, or a trustee in bankruptcy of Borrower to
claim in bankruptcy or any other similar proceedings that any payment made by
Borrower or Borrower’s successors and assigns to Lender was on behalf of or for
the benefit of Guarantor and that such payment is recoverable by Borrower, a
creditor or trustee in bankruptcy of Borrower as a preferential payment, fraudulent
conveyance, payment of an insider or any other classification of payment which
may otherwise be recoverable from Lender.

 

8.                                      Reinstatement.  The obligations of Guarantor pursuant to
this Guaranty shall continue to be effective or automatically be reinstated, as
the case may be, if at any time payment of any of Borrower’s Obligations or
Guarantor’s obligations under this Guaranty is rescinded or otherwise must be
restored or returned by Lender upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of Guarantor or Borrower or otherwise, all as
though such payment had not been made.

 

9.                                      Financial
Statements.  Guarantor
represents and warrants to Lender that: 
(a) the financial statements of Guarantor contained in the Form
10-K for the year ended December 31, 2002 are true, complete and correct
in all material respects, disclose all actual and contingent liabilities, and
fairly present the financial condition of Guarantor, and do not contain any
untrue statement of a material fact or omit to state a fact material to the
financial statements submitted or this Guaranty and (b) no material
adverse change has occurred in the financial statements from the dates thereof
until the date hereof.  Guarantor shall
furnish to Lender such additional financial information as Lender shall
reasonably request from time to time. 
Notwithstanding the foregoing sentence, Guarantor agrees to furnish,
without the request of Lender, no later than ninety (90) days after the end of
each calendar year, Guarantor’s annual financial statements for the prior
calendar year.  Such annual financial
statements shall be certified by an officer of Guarantor as true, complete and
correct and shall be in a form substantially similar to the form of financial
statements previously submitted by Guarantor to Lender, unless otherwise
approved in writing by Lender or as required under

 

4

 

generally accepted accounting
principles.

 

10.                               Transfers,
Sales, Etc.  Guarantor shall not
sell, lease, transfer, convey or assign any of its assets without the consent
of Lender, which consent shall not be unreasonably withheld or delayed, unless
(a) if Guarantor is an individual, such sale, lease, transfer, conveyance or
assignment is of a non-material asset of such Guarantor or (b) if Guarantor is
a corporation, partnership or other entity, such sale, lease, transfer,
conveyance or assignment will not have a material adverse effect on the
business or financial condition of Guarantor or its ability to perform its
obligations hereunder.

 

11.                               Enforcement
Costs.  If: (a) this Guaranty,
is placed in the hands of one or more attorneys for collection or is collected
through any legal proceeding; (b) one or more attorneys is retained to
represent Lender in any bankruptcy, reorganization, receivership or other
proceedings affecting creditors’ rights and involving a claim under this
Guaranty, or (c) one or more attorneys is retained to represent Lender in any
other proceedings whatsoever in connection with this Guaranty, then Guarantor
shall pay to Lender upon demand all fees, costs and expenses incurred by Lender
in connection therewith, including, without limitation, reasonable attorney’s
fees, court costs and filing fees (all of which are referred to herein as
“Enforcement Costs”), in addition to all other amounts due hereunder.

 

12.                               Successors
and Assigns; Joint and Several Liability.  This Guaranty shall inure to the benefit of Lender and its
successors and assigns.  This Guaranty
shall be binding on Guarantor and the heirs, legatees, successors and assigns
of Guarantor.  If this Guaranty is
executed by more than one person, it shall be the joint and several undertaking
of each of the undersigned.  Regardless
of whether this Guaranty is executed by more than one person, it is agreed that
the undersigned’s liability hereunder is several and independent of any other
guarantees or other obligations at any time in effect with respect to
Borrower’s Obligations or any part thereof and that Guarantor’s liability hereunder
may be enforced regardless of the existence, validity, enforcement or
non-enforcement of any such other guarantees or other obligations.

 

13.                               No
Waiver of Rights.  No delay or
failure on the part of Lender to exercise any right, power or privilege under
this Guaranty or the Note shall operate as a waiver thereof, and no single or
partial exercise of any right, power or privilege shall preclude any other or
further exercise thereof or the exercise of any other power or right, or be
deemed to establish a custom or course of dealing or performance between the
parties hereto.  The rights and remedies
herein provided are cumulative and not exclusive of any rights or remedies
provided by law.  No notice to or demand
on Guarantor in any case shall entitle Guarantor to any other or further notice
or demand in the same, similar or other circumstance.

 

14.                               Modification.  The terms of this Guaranty may be waived,
discharged, or terminated only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought.  No amendment, modification,
waiver or other change of any of the terms of this Guaranty shall be effective
without the prior written consent of Lender.

 

15.                               Joinder.  Any action to enforce this Guaranty may be
brought against Guarantor without any reimbursement or joinder of Borrower or
any other guarantor of Borrower’s Obligations in such action.

 

5

 

16.                               Severability.  If any provision of this Guaranty is deemed
to be invalid by reason of the operation of law, or by reason of the
interpretation placed thereon by any administrative agency or any court,
Guarantor and Lender shall negotiate an equitable adjustment in the provisions
of the same in order to effect, to the maximum extent permitted by law, the
purpose of this Guaranty and the validity and enforceability of the remaining
provisions, or portions or applications thereof, shall not be affected thereby
and shall remain in full force and effect.

 

17.                               Applicable
Law.  This Guaranty is governed
as to validity, interpretation, effect and in all other respects by laws and
decisions of the State of Illinois.

 

18.                               Notice.  All notices, communications and waivers
under this Guaranty shall be in writing and shall be (i) delivered in
person or (ii) mailed, postage prepaid, either by registered or certified
mail, return receipt requested, or (iii) by overnight express carrier,
addressed in each case as follows:

 

 

	
  To Lender:

  	
   

  	
  Pleasant Lake Apts. Limited Partnership

  c/o Ramat Securities

  23811 Chagrin Boulevard, Suite 200

  Beachwood, Ohio  44122

  Attention:  Howard M. Amster

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  Ulmer & Berne LLP

  Penton Media Building

  1300 East Ninth Street, Suite 900

  Cleveland, Ohio 44114

  Attention:  Jennifer Lawry Adams, Esq.

  
	
   

  	
   

  	
   

  
	
  to Guarantor:

  	
   

  	
  Horizon Group Properties, Inc.

  77 West Wacker Drive, Suite 4200

  Chicago, Illinois 60601

  Attention:  Gary J. Skoien

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  Schiff Hardin & Waite

  6600 Sears Tower

  Chicago, Illinois 60606

  Attention:  David A.
  Grossberg, Esq.

  

 

or to any other address as to any of the parties
hereto, as such party shall designate in a written notice to the other party
hereto.  All notices sent pursuant to
the terms of this Section 15 shall be deemed received (i) if
personally delivered, then on the date of delivery, (ii) if sent by
overnight, express carrier, then on the next federal banking day immediately
following the day sent, or (iii) if sent by registered or certified mail,
then on the earlier of the third federal banking day following the day sent or
when actually received.

 

19.                               CONSENT
TO JURISDICTION.  TO INDUCE
LENDER TO ACCEPT THIS GUARANTY, GUARANTOR IRREVOCABLY AGREES THAT, SUBJECT TO
LENDER’S SOLE AND ABSOLUTE ELECTION, ALL ACTIONS OR PROCEEDINGS IN ANY WAY

 

6

 

ARISING OUT OF OR RELATED TO
THIS GUARANTY WILL BE LITIGATED IN COURTS HAVING SITUS IN CHICAGO,
ILLINOIS.  GUARANTOR HEREBY CONSENTS AND
SUBMITS TO THE JURISDICTION OF ANY COURT LOCATED WITHIN CHICAGO, ILLIONOIS,
WAIVES PERSONAL SERVICE OF PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS
MAY BE MADE BY REGISTERED MAIL DIRECTED TO GUARANTOR AT THE ADDRESS STATED
HEREIN AND SERVICE SO MADE WILL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT.

 

20.                               WAIVER
OF JURY TRIAL.  GUARANTOR AND
LENDER (BY ACCEPTANCE HEREOF), HAVING BEEN REPRESENTED BY COUNSEL, EACH
KNOWINGLY AND VOLUNTARILY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS GUARANTY OR UNDER ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH AND AGREES THAT ANY SUCH ACTION OR
PROCEEDING WILL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.  GUARANTOR AGREES THAT IT WILL NOT ASSERT ANY
CLAIM AGAINST LENDER ON ANY THEORY OF LIABILITY FOR SPECIAL, INDIRECT,
CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES.

[SIGNATURE
PAGE FOLLOWS]

 

7

 

Guarantor has executed this Guaranty as of the date
first above written.

 

	
   

  	
  HORIZON GROUP PROPERITES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  David Tinkham,

  
	
   

  	
   

  	
  Senior Vice President / CFO

  

 

 

Certification

 

 

	
  STATE OF

  	
   

  	
   

  	
  )

  
	
   

  	
   

  	
   

  	
  )  SS:

  
	
  COUNTY OF

  	
   

  	
   

  	
  )

  
						

 

 

The undersigned, a Notary Public in and for the
aforementioned State and County, affirms that, on this
        day of November, 2003, David
Tinkham, in his capacity as Senior Vice President / CFO of Horizon Group
Properties, Inc., a Maryland corporation, appeared before me and executed this
Guaranty on behalf of said corporation.

 

 

	
   

  	
   

  
	
   

  	
  Notary Public

  

 

8

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