Document:

<Page>

                                  Exhibit 10.47

                            REAFFIRMATION OF GUARANTY

                  The undersigned, Prime Retail, L.P., a Delaware limited
partnership, hereby acknowledges receipt of a copy of that certain (1) Second
Amendment to Loan Agreement and Settlement Agreement (the "AMENDMENT AND
SETTLEMENT AGREEMENT") dated as of the date hereof by Third Horizon Group
Limited Partnership ("BORROWER"), Horizon Group Properties, Inc., Horizon Group
Properties, L.P. and CDC Mortgage Capital Inc. ("LENDER"), which, among other
things, amends that certain Loan Agreement dated as of June 15, 1998 among
Borrower, Nebraska Crossing Factory Shops, L.L.C. ("NEBRASKA LLC"), Indiana
Factory Shops, L.L.C. ("INDIANA LLC") and Nomura Asset Capital Corporation
("NACC") (predecessor-in-interest to Lender) (as so amended, the "LOAN
AGREEMENT") and (2) Second Amended and Restated Note in the principal amount of
$33,464,579.52 dated as of the date hereof made by Borrower in favor of Lender,
which amends and restates in its entirety that certain Amended and Restated Note
dated as of June 15, 1998 made by Borrower, Nebraska LLC and Indiana LLC to NACC
in the principal amount of $108,205,000.00 (as so amended, the "NOTE"). All
capitalized terms used herein unless otherwise defined shall have the meaning
set forth in the Loan Agreement.

                  Pursuant to that certain Guaranty dated as of June 15, 1998
made by the undersigned in favor of NACC (the "GUARANTY"), the undersigned,
subject to certain limitations more particularly set forth in SECTION 1 thereof,
unconditionally, absolutely and irrevocably guaranteed to NACC (1) the full and
prompt payment of the principal and interest on the Note when due, whether at
stated maturity, upon acceleration or otherwise, and at all times thereafter,
(2) the prompt payment of all fees and all other sums which become due and owing
under the Note, the Loan Agreement, the Mortgages and the other Loan Documents
and (3) the payment of all Enforcement Costs (as defined in the Guaranty).

                  The undersigned hereby (1) reaffirms its obligations under the
Guaranty, (2) represents and warrants that all of its representations and
warranties set forth in the Guaranty are true and correct as of the date hereof
as though such representations and warranties were made as of the date hereof,
(3) represents and warrants that there are no defenses, offsets or counterclaims
with respect any of its obligations under the Guaranty, (4) agrees and
acknowledges that the Guaranty remains unmodified, in full force and effect, and
valid, binding and enforceable in accordance with its terms and (5) agrees and
acknowledges that the Amendment and Settlement Agreement is a "Loan Document"
under the Loan Agreement and, accordingly, the obligations of Borrower
thereunder are guaranteed by the undersigned pursuant to the Guaranty to the
same extent as if the Amendment and Settlement Agreement was executed at
Closing.

                                      109

<Page>

                  This Reaffirmation of Guaranty has been duly executed as of
this ____ day of July, 2001.

                                   GUARANTOR:

                                    PRIME RETAIL, L.P.,
                                    a Delaware limited partnership

                                    By:  Prime Retail, Inc., its general partner

                                         By:   ______________________________
                                               Name:
                                               Title:

                                     110<Page>

                                  Exhibit 10.48

                          PLEDGE AND SECURITY AGREEMENT

         PLEDGE AND SECURITY AGREEMENT (this "AGREEMENT") dated as of July 31,
2001 made by HORIZON GROUP PROPERTIES, L.P., a Delaware limited partnership
("HGP LP"), and THIRD HGI, L.L.C., a Delaware limited liability company ("THIRD
HGI," and together with HGP LP, collectively, the "PLEDGORS"), in favor of CDC
MORTGAGE CAPITAL INC., a New York corporation (together with its successors and
assigns, "LENDER").

                                    RECITALS

         1.         Third Horizon Group Limited Partnership, a Delaware limited
partnership ("BORROWER"), Nebraska Crossing Factory Shops, L.L.C., a Delaware
limited liability company ("NEBRASKA LLC"), Indiana Factory Shops, L.L.C., a
Delaware limited liability company ("INDIANA LLC") and Nomura Asset Capital
Corporation ("NACC") entered into that certain Loan Agreement dated as of June
15, 1998, as amended by a First Amendment to Loan Agreement dated as of June __,
1999 among Borrower, Nebraska LLC, Indiana LLC and LaSalle Bank National
Association, as trustee for CDC Depositor Trust ST-I (formerly known as Nomura
Depositor Trust ST-I), Commercial Mortgage Pass-Through Certificates, Series
1998 - ST-I ("LASALLE") (the predecessor in interest to Lender) (as so amended,
the "ORIGINAL LOAN AGREEMENT") pursuant to which a secured mortgage loan in the
principal amount of $108,205,000 (the "LOAN") was advanced to Borrower, Nebraska
LLC and Indiana LLC. The Original Loan is evidenced by that certain Amended and
Restated Note dated as of June 15, 1998 in the original principal amount of
$108,205,000 jointly and severally made by Borrower, Nebraska LLC and Indiana
LLC and payable to NACC (the "ORIGINAL NOTE").

         2.         Pursuant to a Guaranty (the "GUARANTY") dated as of June 15,
1998, HGP LP and Horizon Group Properties, Inc. jointly, severally and
unconditionally guarantied to NACC all of the obligations of Borrower, Nebraska
LLC and Indiana LLC under the Loan Documents.

         3.         Prior to the execution hereof, each of Nebraska LLC and
Indiana LLC has transferred its respective Property and has been released of its
obligations under the Loan Documents.

         4.         Prior to the execution hereof, (i) Borrower has made a
partial prepayment of principal in the amount of $15,412,510.62, and (ii) the
Property known as the Lakeshore Marketplace located in Muskegon, Michigan has
been released from the Lien of the Mortgages.

                                      111

<Page>

         5.         Prior to the execution hereof, the Original Loan Agreement,
the Loan and the Existing Note were assigned (i) by NACC to The Capital Company
of America LLC ("CCA"), (ii) by CCA to LaSalle and (iii) by LaSalle to Lender,
and as such Lender is now the owner and holder of the Original Loan Agreement,
the Loan and the Original Note.

         6.         Borrower failed to repay the Loan on the Stated Maturity
Date and as a result there occurred an Event of Default under the Loan
Documents.

         7.         Simultaneously with the execution and delivery of this
Agreement, Lender and Borrower are entering into that certain (i) Second
Amendment to Loan Agreement and Settlement Agreement (the "SECOND Amendment";
the Original Loan Agreement, as amended by the Second Amendment, is hereafter
referred to as the "LOAN AGREEMENT.") dated as of the date hereof, which, among
other things, extends the Stated Maturity Date, and (ii) Second Amended and
Restated Note dated as of the date hereof (the "NOTE"), which amends and
restates the Original Note in its entirety.

         8.         Pledgors collectively own 100% of the ownership interests in
Borrower and will materially benefit from the Second Amendment.

         9.         To induce Lender to enter into the Second Amendment, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Pledgors have agreed to pledge and grant a first
priority security interest in the Collateral (as defined below) as security for
the Obligations (as defined below).

         Accordingly, the parties hereto agree as follows:

         Section 1.        DEFINITIONS AND ACCOUNTING MATTERS.

         1.1        DEFINITIONS. Terms defined in the Loan Agreement are used
herein as defined therein. In addition, as used herein:

         "CHARTER DOCUMENTS" shall mean the agreements and instruments listed on
EXHIBIT A hereto, as each of the same may be hereafter amended from time to
time.

         "COLLATERAL" shall have the meaning ascribed thereto in SECTION 2
hereof.

         "EVENT OF DEFAULT" shall have the meaning ascribed thereto in
SECTION 6.4.

         "MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on (i)
the financial condition of the Pledgors or Borrower, (ii) the ability of the
Pledgors to pay and perform their obligations under this Agreement, (iii) a
Property, or (iv) the Collateral.

                                      112

<Page>

         "OBLIGATIONS" shall mean all obligations of Borrower and the Pledgors
to Lender under the Loan Agreement, the Note, this Agreement and all of the
other Loan Documents.

         "PERMITTED DISTRIBUTIONS" shall mean, so long as no Event of Default
shall be continuing, distributions of cash made by Borrower with respect to the
Pledged Interests to any Pledgor after payment by Borrower of all required
amounts pursuant to the Loan Documents, which distributions shall in no event
exceed such amount as is necessary to pay the customary, reasonable and
necessary operating expenses of such Pledgor and Horizon Group Properties, Inc.

         "PLEDGED INTERESTS" shall have the meaning ascribed thereto in SECTION
2 hereof.

         "PROPERTY" shall mean a "Property" as defined in the Loan Agreement.

         "REVENUE PAYMENTS" shall mean all distributions, other than Permitted
Distributions, paid with respect to the Pledged Interests, and all other
payments paid to one or more of the Pledgors with respect to, pursuant to or as
a result of ownership of the Collateral.

         "SUBORDINATE PLEDGE" shall mean that certain Pledge and Security
Agreement made by HGP LP to Prime Retail, L.P. dated as of the date hereof,
pursuant to which HGP LP pledged a 48.9% membership interest in Borrower, which
pledge is and shall at all times be subordinate to this Agreement and the
security interests created hereby.

         "UNIFORM COMMERCIAL CODE" shall mean the Uniform Commercial Code as in
effect from time to time in the State of Illinois.

         Section 2.        PLEDGE AND DELIVERY OF COLLATERAL.

         2.1        THE PLEDGE. As collateral security for the prompt
payment and performance in full when due (whether at stated maturity, by
acceleration or otherwise) of the Obligations, the Pledgors hereby (i) pledge,
assign, hypothecate, and transfer to Lender all of the Pledgors' right, title
and interest in the following property, whether now owned by the Pledgors or
hereafter acquired and whether now existing or hereafter coming into existence
(all being collectively referred to herein as the "COLLATERAL") and (ii) grants
to Lender a first lien on and a first priority security interest in the
Collateral:

         (1)        a 99% limited partnership interest in Borrower and all other
ownership interests in Borrower now or hereafter owned by HGP, LP, together with
the certificates, if any, evidencing the same; and

         (2)        a 1% general partnership interest in Borrower and all other
ownership interests in Borrower now or hereafter owned by Third HGI, together
with the certificates, if

                                      113

<Page>

any, evidencing the same; (the collateral described in clauses (a) through
(b) collectively, the "PLEDGED INTERESTS");

         (3)        all ownership interests and shares, securities, moneys,
instruments or property representing a distribution or return of capital upon or
in respect of the Pledged Interests, or otherwise received in exchange therefor,
and any warrants, rights or options issued to the holders of, or otherwise in
respect of, the Pledged Interests;

         (4)        all rights of each Pledgor under the Charter Documents, or
any other agreement or instrument relating to Borrower, or the Pledged
Interests, including, without limitation, (i) all rights of one or more of the
Pledgors to receive moneys due and to become due under or pursuant to a Charter
Document, (ii) all rights of one or more of the Pledgors to receive proceeds of
any insurance, indemnity, warranty or guaranty with respect to a Charter
Document, (iii) all claims of one or more of the Pledgors for damages arising
out of or for breach of or default under a Charter Document, and (iv) any right
of one or more of the Pledgors to perform thereunder and to compel performance
and otherwise exercise all rights and remedies thereunder; and

         (5)        all proceeds of and to any of the property of the Pledgors
described in clauses (a) through (e) above and, to the extent related to any
property described in said clauses or such proceeds, all books, correspondence,
credit files, records, invoices and other papers.

         2.2        DELIVERY OF THE COLLATERAL. Concurrently with the execution
and delivery of this Agreement, the Pledgors shall deliver to Lender the
original executed instruments, documents, policies and agreements
constituting the Collateral (as recorded, to the extent recorded) together
with other certificates or instruments, if any, representing or evidencing
the Collateral, which shall be held by Lender and, if applicable, shall be in
suitable form for transfer by delivery, or shall be accompanied by duly
executed instruments of transfer or assignment in blank (collectively, the
"ASSIGNMENT OF INTEREST"), for the Pledged Interests, transferring all of
such Pledged Interests in blank, duly executed by the Pledgors and undated.
Lender shall have the right, at any time in its discretion during the
continuance of an Event of Default and without notice to the Pledgors, to
transfer to, and to designate on the Pledgors' Assignment of Interest, any
Person to whom the Pledged Interests are sold in accordance with the
provisions hereof. In addition, Lender shall have the right at any time to
exchange the Assignment of Interest representing or evidencing the Pledged
Interests or any portion thereof for one or more additional or substitute
Assignments of Interest representing or evidencing smaller or larger
percentages of the Pledged Interests represented or evidenced thereby,
subject to the terms thereof, provided that Lender does not receive in the
aggregate pledged interests in excess of the Pledged Interests. During the
continuance of an Event of Default, Lender shall have the right, at any time
in its discretion and upon prior written notice to the Pledgors, to transfer
to or to register in the name of Lender or its nominee any or all of the
Collateral, to be held by Lender or such nominee as security for the
Obligations until sold in accordance with this Agreement and applicable law.

                                      114

<Page>

         2.3        OBLIGATIONS UNCONDITIONAL. The obligations of the
Pledgors hereunder are absolute and unconditional, irrespective of the value,
genuineness, validity, regularity or enforceability of the Loan Agreement,
the Note, any other Loan Documents, or any other agreement or instrument
referred to herein or therein, or any substitution, release or exchange of
any guarantee of or security for any of the Obligations, and, to the fullest
extent permitted by applicable law, irrespective of any other circumstance
whatsoever which might otherwise constitute a legal or equitable discharge or
defense of a surety or the Pledgors, it being the intent of this SECTION 2.3
that the obligations of the Pledgors hereunder shall be absolute and
unconditional under any and all circumstances. Without limiting the
generality of the foregoing, it is agreed that the occurrence of any one or
more of the following shall not affect the liability of the Pledgors
hereunder:

         (1)        at any time or from time to time, without notice to the
Pledgors, the time for any performance of or compliance with any of the
Obligations shall be extended, or such performance or compliance shall be
waived;

         (2)        any of the acts mentioned in any of the provisions of the
Loan Agreement, the Note or any other Loan Documents, or any other agreement or
instrument referred to herein or therein shall be done or omitted;

         (3)        the maturity of any of the Obligations shall be accelerated,
or any of the Obligations shall be modified, supplemented or amended in any
respect, or any right under the Loan Agreement, the Note, or any other Loan
Documents, or any other agreement or instrument referred to herein or therein
shall be waived or any other guarantee of any of the Obligations or any security
or collateral therefor shall be terminated, released or exchanged in whole or in
part or otherwise dealt with; or

         (4)        any lien or security interest granted to, or in favor of
Lender as security for any of the Obligations shall fail to be perfected or
shall be released.

         2.4        REINSTATEMENT. The obligations of the Pledgors under this
Agreement shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of the Pledgors in respect of the
Obligations is rescinded or must be otherwise restored by any holder of any
of the Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise and the Pledgors agree that they will indemnify
Lender on demand for all reasonable costs and expenses (including, without
limitation, fees of counsel) incurred by Lender in connection with such
rescission or restoration.

         Section 3.        REPRESENTATIONS AND WARRANTIES. The Pledgors
represent and warrant to Lender that:

         3.1        EXISTENCE. (a) HGP LP (i) is a limited partnership duly
organized, validly existing and in good standing under the laws of the State
of Delaware; (ii) has all

                                      115

<Page>

requisite power, and has all material governmental licenses, authorizations,
consents and approvals necessary to own its assets and carry on its business
as now being or as proposed to be conducted; and (iii) is qualified to do
business in all jurisdictions in which the nature of the business conducted
by it makes such qualification necessary .

         (1)        Third HGI (i) is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Delaware;
(ii) has all requisite power, and has all material governmental licenses,
authorizations, consents and approvals necessary to own its assets and carry on
its business as now being or as proposed to be conducted; and (iii) is qualified
to do business in all jurisdictions in which the nature of the business
conducted by it makes such qualification necessary.

         (2)        Borrower (i) is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Delaware;
(ii) has all requisite power, and has all material governmental licenses,
authorizations, consents and approvals necessary to own its assets and carry on
its business as now being or as proposed to be conducted; and (iii) is qualified
to do business in all jurisdictions in which the nature of the business
conducted by it makes such qualification necessary.

         3.2        LITIGATION. Except as disclosed to Lender in writing
prior to the date of this Agreement, there are no legal or arbitration
proceedings or any proceedings by or before any governmental or regulatory
authority or agency, now pending or (to the knowledge of the Pledgors)
threatened in writing against any Pledgor, the Collateral, a Property and/or
Borrower, except pending proceedings which, if adversely determined, would
not have a Material Adverse Effect.

         3.3        NO BREACH. None of the execution and delivery of this
Agreement or any other Loan Document to which any Pledgor is a party, the
consummation of the transactions herein or therein contemplated or compliance
with the terms and provisions hereof or thereof will conflict with or result
in a breach or require any consent (other than any consent that has been
obtained) under, the limited partnership agreement, certificate of limited
partnership or articles of organization, operating agreement or other
organizational documents of any Pledgor or any applicable law or regulation,
or any order, writ, injunction or decree of any court or governmental
authority or agency, or any agreement or instrument to which a Pledgor or
Borrower is a party or by which any such party is bound or to which any such
party is subject, or constitute a default under any such agreement or
instrument, or (except for the Lien arising under this Agreement) result in
the creation or imposition of any Lien upon any of the revenues or assets of
a Pledgor or any such party pursuant to the terms of any such agreement or
instrument.

         3.4        NECESSARY ACTION. Each Pledgor has all necessary power
and authority to execute, deliver and perform its obligations under this
Agreement; the execution, delivery and performance by such Pledgor of this
Agreement have been duly authorized by all necessary action on its part; and
this Agreement has been duly and validly

                                      116

<Page>

executed and delivered by each Pledgor and constitutes its legal, valid and
binding obligation, enforceable in accordance with its terms.

         3.5        APPROVALS. No authorizations, approvals and consents of,
and no filings and registrations with, any governmental or regulatory
authority or agency are necessary for (a) the execution, delivery or
performance by the Pledgors of this Agreement or for the validity or
enforceability thereof, (b) the grant by the Pledgors of the assignments and
security interests granted hereby, or the pledge by the Pledgors of the
Collateral pursuant hereto, (c) the perfection or maintenance of the pledge,
assignment and security interest created hereby (including the first priority
nature of such pledge, assignment and security interest) except for the
filing of financing statements under the Uniform Commercial Code or (d) the
exercise by Lender of all rights and remedies in respect of the Collateral
pursuant to this Agreement.

         3.6        PLEDGED INTERESTS AND CONTRACT RIGHTS. (a) Each Pledgor
is the sole beneficial and legal owner of and have good and indefeasible
title to its Collateral and owns its Collateral free and clear of all
security interests, liens, encumbrances and adverse claims, except for the
pledge and security interest in favor of Lender created or provided for
herein and the Subordinate Pledge (and no right or option to acquire the same
exists in favor of any other Person).

         (1)        The Collateral is not and will not be subject to any
contractual restriction upon the transfer thereof (except for any such
restrictions contained herein, the Loan Documents or in the Charter Documents.

         (2)        The chief place of business and chief executive office of
each Pledgors and the office where such Pledgor keeps its books and records
concerning the Collateral is at the address specified in SECTION 7.3.

         (3)        This Agreement creates a valid security interest in the
Collateral, securing the payment of the Obligations, and upon the filing in the
appropriate filing offices of the financing statements to be executed and
delivered pursuant to this Agreement, such security interests will be perfected,
first priority security interests, and all filings and other actions necessary
to perfect such security interests will have been duly taken.

         Section 4.        COVENANTS. Each Pledgor agrees that, until the
payment and satisfaction in full of the Obligations:

         4.1        INFORMATION. In addition to the financial information
required to be delivered to Lender under the Loan Agreement, each Pledgor
shall, promptly upon Lender's request, deliver to Lender such other
information about such Pledgor, the Collateral or Borrower as Lender may
reasonably request.

                                      117

<Page>

         4.2        LITIGATION. The Pledgors shall promptly give to Lender
notice of all pending legal or arbitration proceedings, and of all
proceedings pending by or before any governmental or regulatory authority or
agency, affecting one or more of the Pledgors or Borrower, except pending
proceedings which, if adversely determined, would not have a Material Adverse
Effect.

         4.3        EXISTENCE, ETC. Each Pledgor shall and shall cause
Borrower to preserve and maintain its existence and all of its material
rights, privileges and franchises. The Pledgors shall comply and cause
Borrower to comply with the requirements of all applicable laws, rules,
regulations and orders of governmental or regulatory authorities, and pay and
discharge or cause Borrower to pay or discharge all taxes, assessments and
governmental charges or levies imposed on Borrower or on its income or
profits or on any of its property prior to the date on which penalties attach
thereto, except for any such tax, assessment, charge or levy the payment of
which is being contested in good faith and by proper proceedings.

         4.4        PROHIBITION OF FUNDAMENTAL CHANGES. The Pledgors will not
cause or permit Borrower to enter into, any transaction of merger or
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution).

         4.5        LIMITATION ON SALE AND LIENS. No Pledgor will create,
incur, assume or suffer or permit to exist any Lien upon any of the
Collateral (except the Liens created hereby and by the Subordinate Pledge) or
any of its ownership interests in Borrower. No Pledgor shall sell, transfer,
exchange, assign (by operation of law or otherwise) or otherwise dispose of,
or grant any option with respect to, the Collateral any ownership of such
Pledgor in Borrower or any portion thereof. No Pledgor shall file or suffer
to be on file, or authorize or permit to be filed or to be on file, in any
jurisdiction, any financing statement or like instrument with respect to the
Collateral in which Lender is not named as the sole secured party (other than
in connection with the Subordinate Pledge).

         4.6        DISTRIBUTIONS. No Pledgor will accept and no Pledgor will
permit Borrower to make any distribution of cash or other property, whether
in the nature of return of capital, profits or any other payment whatsoever,
from Borrower in violation of the Loan Agreement or this Agreement.
Notwithstanding the foregoing, provided no Event of Default shall be
continuing, after Borrower has paid all required amounts to be paid in
accordance with the Loan Documents, Borrower may make and each Pledgor may
accept Permitted Distributions.

         4.7        NON-PETITION. Each Pledgor agrees that it will not,
directly or indirectly, take any action to petition Borrower into bankruptcy
or to enable Borrower to seek relief under any federal or state bankruptcy
law.

                                      118

<Page>

         4.8      RELEVANT DOCUMENTS. (a) Each Pledgor shall, at its expense:

                  (1)        perform and observe all the terms and provisions of
         the Charter Documents to be performed or observed by it, maintain the
         Charter Documents in full force and effect, enforce the Charter
         Documents in accordance with their terms, and to take all such action
         to such end as may be from time to time reasonably requested by Lender;
         and

                  (2)        furnish to Lender promptly upon receipt thereof
         copies of all notices, requests and other documents received by such
         Pledgor under or pursuant to the any of the Charter Documents, and from
         time to time furnish to Lender such information and reports regarding
         the Collateral as Lender may reasonably request.

         (2)        No Pledgor shall without Lender's consent, directly or
indirectly: (i) cancel or terminate any of the Charter Documents or consent to
or accept any cancellation or termination thereof; (ii) amend or otherwise
modify the any of the Charter Documents or give any consent, waiver or approval
thereunder; (iii) waive any default under or breach of the any of the Charter
Documents; or (iv) take any other action in connection with the Charter
Documents that reasonably could result in a Material Adverse Effect.

         4.9        FINANCING STATEMENTS. Each Pledgor hereby (a) authorizes
Lender to execute and file at any time or times, one or more UCC-1 financing
statements covering the Collateral and UCC assignment financing statements
assigning the UCC-1 financing statements which constitute part of the
Collateral, signed only by Lender; and (b) appoints Lender as its agent and
attorney-in-fact to execute in the name of such Pledgor any UCC financing
statement or amendment, or collateral assignment of any instrument, document,
policy or agreement constituting the Collateral or other instrument or filing
or recordation to perfect or continue the perfection of the security interest
so long as any Obligation remains unpaid.

         4.10       PRESERVATION OF COLLATERAL. Lender may, in its reasonable
discretion, for the account and reasonable expense of the Pledgors pay any
amount or do any act required of one or more of the Pledgors hereunder or
reasonably requested by Lender to preserve, protect, maintain or enforce the
Obligations, the Collateral or the security interests granted herein, and
which the Pledgors fail to do or pay, and any such payment shall be deemed an
advance by Lender to the Pledgors and shall be payable by the Pledgors within
ten (10) days after written demand together with interest thereon at the
Default Rate from the date expended by Lender until paid.

         4.11       SUBORDINATE PLEDGE. HGP LP shall not, without Lender's
consent, amend or otherwise modify the Subordinate Pledge in a manner that would
result in a Material Adverse Effect.

                                      119

<Page>

         Section 5.        PAYMENTS WITH RESPECT TO THE COLLATERAL.

         5.1        REVENUE PAYMENTS. Each Pledgor hereby absolutely and
irrevocably assign to Lender such Pledgor's right to demand and collect any
Revenue Payments. Lender shall have the right to collect, retain, control and
distribute all Revenue Payments in such manner and priority as shall be
determined by Lender and, in addition, may make any compromise or settlement
deemed desirable by Lender with respect to, all or any of the Collateral,
and/or extend the time of payment, arrange for payment in installments, or
otherwise modify the terms of or release all or any of the Collateral, all
without notice to or consent by the Pledgors and without otherwise
discharging or affecting the Obligations or the security interests granted
herein. If a Pledgor receives any Revenue Payments, such Pledgor shall hold
the same in trust for Lender, shall not commingle them with other funds of
such Pledgor and shall immediately deliver and pay over same to Lender all
such payments and to become part of the Collateral for disposition pursuant
to the terms of the Loan Agreement.

         Section 6.        FURTHER ASSURANCES; REMEDIES. In furtherance of
the grant of the pledge and security interest pursuant to SECTION 2 hereof,
each Pledgor hereby agrees with Lender as follows:

         6.1        DELIVERY AND OTHER PERFECTION. Each Pledgor shall:

         (1)        except as otherwise expressly provided in this Agreement, if
any of the above-described interests, monies, or property required to be pledged
by the Pledgors under SECTION 2.1 hereof are received by a Pledgor forthwith
either (x) transfer and deliver to Lender such interests, monies or property so
received by such Pledgor for any such interests, shares and securities or
assignments duly endorsed in blank) all of which thereafter shall be held by
Lender, pursuant to the terms of this Agreement, as part of the Collateral or
(y) take such other action as Lender shall reasonably deem necessary or
appropriate to duly record the Lien created hereunder in such interests, monies,
or property referred to in said SECTION 2.1;

         (2)        give, execute, deliver, file and/or record any financing
statement, notice, instrument, document, agreement or other papers that may be
necessary or desirable (in the reasonable judgment of Lender) to create,
preserve, perfect or validate the security interest granted pursuant hereto or
to enable Lender to exercise and enforce its rights hereunder with respect to
such pledge and security interest, including, without limitation, causing any or
all of the Collateral to be transferred of record into the name of Lender or its
nominee (and Lender agrees that if any Collateral is transferred into its name
or the name of its nominee, Lender will thereafter promptly give to such Pledgor
copies of any notices and communications received by it with respect to the
Collateral); and

                                      120

<Page>

         (3)        permit representatives of Lender, upon reasonable notice, at
any time during normal business hours to inspect and make abstracts from their
books and records pertaining to the Collateral, and forward copies of any
notices or communications received by such Pledgor with respect to the
Collateral, all in such manner as Lender may require.

         6.2        PRESERVATION OF RIGHTS. Prior to taking title to any
Collateral, Lender shall not be required to take steps necessary to preserve
any rights against prior parties to such Collateral.

         6.3        PLEDGED COLLATERAL. (a) No Pledgor shall or have the
right to directly or indirectly, without the prior written consent of Lender,
attempt to waive, alter, amend, modify, supplement or change in any way, or
release, subordinate, terminate or cancel in whole or in part, or give any
consent under, any of the instruments, documents, policies or agreements
constituting the Collateral or exercise any of the rights, options or
interests of the Pledgor as party, member, shareholder, principal holder,
mortgagee or beneficiary thereunder except as otherwise expressly permitted
under the Loan Agreement. Each Pledgor agrees that all rights to do any and
all of the foregoing have been assigned to and may be exercised by Lender but
each Pledgor agrees that, upon request from Lender from time to time, it
shall do any of the foregoing or shall join Lender in doing so or shall
confirm the right of Lender to do so and shall execute such instruments and
undertake such actions as Lender may request in connection therewith. No
Pledgor shall make any election, compromise, adjustment or settlement in
respect of any of the Collateral. Notwithstanding anything herein to the
contrary, so long as no Event of Default shall have occurred and be
continuing, each Pledgor shall have the right to exercise all of such
Pledgor's rights under the Charter Documents for any purpose not inconsistent
with any of the terms of this Agreement, the Loan Agreement or any other Loan
Document or any other instrument or agreement referred to herein or therein,
provided that each Pledgor agrees that they will not take any action in any
manner that is inconsistent with the terms of this Agreement, the Loan
Agreement or any other Loan Document or any such other instrument or
agreement.

         (1)        Notwithstanding anything to the contrary, (i) the Pledgors
shall remain liable under the Charter Documents to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed, (ii) the exercise by Lender of any of the rights hereunder shall not
release the Pledgors from any of its duties or obligations under the Charter
Documents, and (iii) Lender shall have no obligation or liability under the
Charter Documents by reason of this Agreement, nor shall Lender be obligated to
perform any of the obligations or duties of the Pledgors thereunder or to take
any action to collect or enforce any claim for payment assigned hereunder.

         6.4        EVENTS OF DEFAULT. A default in the observance or
performance of the Pledgors' monetary obligations under this Agreement which
remains uncured for five (5) days after demand; a default in the observance
or performance of the Pledgors' non-monetary obligations under this Agreement
which remains uncured for 20 days after written notice from Lender (provided,
however, that if such default is susceptible

                                      121

<Page>

of cure but cannot reasonably be cured within such 20-day period, and the
Pledgors shall have commenced to cure such default within such 20-day period
and thereafter diligently and expeditiously proceeds to cure the same, such
20-day period shall be extended for an additional period of time as is
reasonably necessary for the Pledgors in the exercise of due diligence to
cure such default); or any event constituting an "Event of Default" under the
Loan Agreement; or any representation or warranty of any Pledgor made under
this Agreement or the other Loan Document which contains any untrue statement
of a material fact or omits to state a material fact necessary to make the
statements contained herein not materially misleading; or any default by HGP
LP in the performance of its obligations under the Guaranty, shall each
constitute an Event of Default hereunder.

         6.5        AFTER EVENTS OF DEFAULT. During the period during which
an Event of Default shall have occurred and be continuing:

         (1)        Lender shall have all of the rights and remedies with
respect to the Collateral of a secured party under the Uniform Commercial Code
(whether or not said Code is in effect in the jurisdiction where the rights and
remedies are asserted) and such additional rights and remedies to which a
secured party is entitled under the laws in effect in any jurisdiction where any
rights and remedies hereunder may be asserted, including, without limitation,
the right, to the maximum extent permitted by law, to exercise all voting,
consensual and other powers of ownership pertaining to the Collateral as if
Lender were the sole and absolute owner thereof (and each Pledgor agrees to take
all such action as may be appropriate to give effect to such right);

         (2)        Lender in its discretion may, in its name or in the name of
one or more Pledgor or otherwise, demand, sue for, collect or receive any money
or property at any time payable or receivable on account of or in exchange for
any of the Collateral, but shall be under no obligation to do so;

         (3)        Lender may, at its option, apply all or any part of the
Collateral to the Obligations in such order and priority as shall be selected by
Lender, subject to the terms and provisions of the Loan Agreement;

         (4)        Lender may, upon 10 days' prior written notice to the
Pledgors of the time and place, with respect to the Collateral or any part
thereof which shall then be or shall thereafter come into the possession,
custody or control of Lender or any of its agents, sell, assign or otherwise
dispose of all or any part of such Collateral, at such place or places as Lender
deems best, and for cash or on credit or for future delivery (without thereby
assuming any credit risk), at public or private sale, without demand of
performance or notice of intention to effect any such disposition or of time or
place thereof (except such notice as is required above or by applicable statute
and cannot be waived) and Lender or anyone else may be the purchaser, assignee
or recipient of any or all of the Collateral so disposed of at any public sale
(or, to the extent permitted by law, at any private sale), and thereafter hold
the same absolutely, free from any claim or right of whatsoever kind, including
any right or

                                      122

<Page>

equity of redemption (statutory or otherwise), of the Pledgors, any such
demand, notice or right and equity being hereby expressly waived and
released. Lender may, without publication but upon at least five days notice,
adjourn any public or private sale or cause the same to be adjourned from
time to time by announcement at the time and place fixed for the sale, and
such sale may be made at any time or place to which the same may be so
adjourned;

         (5)        Lender may exercise all rights, powers and privileges to the
same extent as the applicable Pledgor is entitled to exercise such rights,
powers and privileges;

         (6)      Lender may accelerate the indebtedness secured hereby;

         (7)        Lender may exercise any and all rights and remedies of any
Pledgor under or in connection with the Charter Documents or otherwise in
respect of the Collateral, including, without limitation, any and all rights of
the Pledgors to demand or otherwise require payment of any amount under, or
performance of any provisions of, the Charter Documents; and

         (8)        all payments received, directly or indirectly, by one or
more of the Pledgors under or in connection with the Charter Documents or
otherwise in respect of the Collateral shall be received in trust for the
benefit of Lender, shall be segregated from other funds of such Pledgor and
shall be forthwith paid over to Lender in the same form as so received (with any
necessary indorsement).

The proceeds of each collection, sale or other disposition under this SECTION
6.5 shall be applied in accordance with SECTION 6.8 hereof.

         Each Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933, as amended, and applicable state
securities laws, Lender may be compelled, with respect to any sale of all or any
part of the Collateral, to limit purchasers to those who will agree, among other
things, to acquire the Collateral for their own account, for investment and not
with a view to the distribution or resale thereof. Each Pledgor acknowledges
that any such private sales may be at prices and on terms less favorable to
Lender than those obtainable through a public sale with such restrictions, and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner and that Lender
shall have no obligation to engage in public sales and no obligation to delay
the sale of any Collateral for the period of time necessary to permit the issuer
thereof to register it for public sale.

         6.6        REMOVALS, ETC. Each Pledgor shall keep its chief place of
business and chief executive office and the office where it keeps its books
and records concerning the Collateral and an original counterpart of the
Charter Documents, if available, at the location specified in Section 7.3.
Without at least 30 days' prior written notice to Lender, no Pledgor shall
maintain any of its books and records with respect to the Collateral

                                      123

<Page>

at any office or maintain its principal place of business at any other place
other than at the address specified in Section 7.3..

         6.7        PRIVATE SALE. Lender shall not incur any liability as a
result of the sale of the Collateral, or any part thereof, at any private
sale pursuant to SECTION 6.5 hereof conducted in a commercially reasonable
manner which shall include providing at least 10 days' prior notice as set
forth in Section 6.5. Each Pledgor hereby waives any claims against Lender
arising by reason of the fact that the price at which the Collateral may have
been sold at such a private sale was less than the price which might have
been obtained at a public sale or was less than the aggregate amount of the
Obligations, even if Lender accepts the first offer received and does not
offer the Collateral to more than one offeree.

         6.8        APPLICATION OF PROCEEDS. Except as otherwise herein
expressly provided, the proceeds of any collection, sale or other realization
of all or any part of the Collateral pursuant hereto, and any other cash at
the time held by Lender under this SECTION 6, shall be applied by Lender:

                  FIRST, to the payment of the costs and expenses of such
         collection, sale or other realization, including reasonable
         out-of-pocket costs and expenses of Lender and the reasonable fees and
         expenses of their respective agents and counsel, and all reasonable
         expenses, and advances made or incurred by Lender in connection
         therewith;

                  NEXT, to the payment in full of the Obligations; and

                  FINALLY, to the payment to the Pledgors, or its respective
         successors or assigns, or as a court of competent jurisdiction may
         direct, of any surplus then remaining.

As used in this SECTION 6, "PROCEEDS" of Collateral shall mean cash, securities
and other property realized in respect of, and distributions in kind of,
Collateral, including any thereof received under any reorganization, liquidation
or adjustment of debt of any Pledgor or any issuer of or obligor on any of the
Collateral.

         6.9        ATTORNEY-IN-FACT. Without limiting any rights or powers
granted by this Agreement to Lender while no Event of Default has occurred
and is continuing, during the continuance of any Event of Default Lender is
hereby appointed the attorney-in-fact of each Pledgor for the purpose of
carrying out the provisions of this SECTION 6 and taking any action and
executing any instruments which Lender may deem necessary or advisable to
accomplish the purposes hereof, which appointment as attorney-in-fact is
irrevocable and coupled with an interest. Without limiting the generality of
the foregoing, so long as Lender shall be entitled under this SECTION 6 to
make collections in respect of the Collateral, Lender shall have the right
and power to receive, endorse and collect all checks

                                      124

<Page>

made payable to the order of any Pledgor representing any payment or other
distribution in respect of the Collateral or any part thereof and to give
full discharge for the same.

         6.10       ENFORCEMENT EXPENSES. Each Pledgor agrees to pay to
Lender all reasonable out-of-pocket expenses (including reasonable expenses
for legal services of every kind) of, or incident to, the enforcement of any
of the provisions of this SECTION 6, or performance by Lender of any
obligations of the Pledgors in respect of the Collateral which the Pledgors
have failed or refused to perform, or any actual or attempted sale, or any
exchange, enforcement, collection, compromise or settlement in respect of any
of the Collateral, and for the care of the Collateral and defending or
asserting rights and claims of Lender in respect thereof, by litigation or
otherwise and all such expenses shall be Obligations to Lender secured under
SECTION 2 hereof.

         6.11       TERMINATION. Upon the payment and performance in full of all
Obligations, this Agreement shall terminate, and Lender shall forthwith cause to
be assigned, transferred and delivered, against receipt but without any
recourse, warranty or representation whatsoever, any remaining Collateral and
money received in respect thereof, to or on the order of the Pledgors.

         Section 7.        MISCELLANEOUS.

         7.1        NO WAIVER. No failure on the part of Lender or any of its
agents to exercise, and no course of dealing with respect to, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by Lender or any of its
agents of any right, power or remedy hereunder preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. The
remedies provided herein are cumulative and are not exclusive of any remedies
provided by law.

         7.2        GOVERNING LAW, ETC. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF ILLINOIS. EACH
PLEDGOR HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF ANY FEDERAL OR
STATE COURT IN CHICAGO ILLINOIS. EACH PLEDGOR IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A
COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. EACH PLEDGOR AND THE LENDER HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

                                      125

<Page>

         7.3        NOTICES. All notices, consents, approvals and requests
required or permitted hereunder (a "NOTICE") shall be given in writing and
shall be effective for all purposes if (i) hand delivered, or (ii) sent by
(A) certified or registered United States mail, postage prepaid, (B)
expedited prepaid delivery service, either commercial or United States Postal
Service, with proof of attempted delivery, or (C) telecopier (confirmed
electronically), in any case addressed as follows (or to such other address
or Person as a party shall designate from time to time by notice to the other
party):

         If to Lender, to:

                  CDC Mortgage Capital Inc.
                  9 West 57th Street, 36th Floor
                  New York, New York 10019
                  Attention: Real Estate Administration (Gary DiGiuseppe)

         with a copy to:

                  Kaye Scholer LLP
                  425 Park Avenue
                  New York, New York 10022
                  Attention:  Stephen Gliatta, Esq.
                  Telecopier #:  (212) 836-8689

         If to the Pledgors:

                  c/o Horizon Group Properties, L.P.
                  5000 Hakes Drive
                  Norton Shores, Michigan 49441
                  Attention: Chairman and Chief Executive Officer
                  Telecopier #: (231) 799-3019

         with a copy to:

                  Winston & Strawn
                  35 West Wacker Drive
                  Chicago, Illinois 60601
                  Attention: Wayne D. Boberg
                  Telecopier #: (312) 558-5700

A Notice shall be deemed to have been given: in the case of hand delivery, at
the time of delivery; in the case of registered or certified mail, when
delivered or the first attempted delivery on a Business Day; in the case of
expedited prepaid delivery, upon the first

                                      126

<Page>

attempted delivery on a Business Day; or in the case of telecopier, on the
date confirmed electronically.

         7.4        WAIVERS, MODIFICATIONS, ETC. The terms of this Agreement
may be waived, altered, modified or amended only by an instrument in writing
duly executed by the Pledgors and Lender. Any such waiver, alteration,
modification, amendment or waiver shall be binding upon Lender and the
Pledgors.

         7.5        SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon the successors and assigns of the Pledgors and inure to the benefit of
the successors and assigns of Lender (provided, however, that no Pledgor
shall assign or transfer its rights hereunder without the prior written
consent of Lender). Without limiting the foregoing, Lender may at any time
and from time to time without the consent of the Pledgors, assign, grant a
participation or otherwise transfer all or any portion of its rights and
remedies under this Agreement to any other person or entity, either
separately or together with other property of the Pledgors for such purposes
and on such terms as Lender shall elect, and such other person or entity
shall thereupon become vested with all of the rights and obligations in
respect thereof granted to Lender herein or otherwise. Without limiting the
foregoing, in connection with any assignment of the Loan, Lender may assign
or otherwise transfer all of its rights and remedies under this Agreement to
the assignee and such assignee shall thereupon become vested with all of the
rights and obligations in respect thereof granted to Lender herein or
otherwise. Each representation and agreement made by a Pledgor in this
Agreement shall be deemed to run to, and each reference in this Agreement to
Lender shall be deemed to refer to, Lender and each of its successors and
assigns.

         7.6        EXPENSES, ETC. (a) The Pledgors agree to pay or reimburse
Lender for paying: (1) all reasonable out-of-pocket expenses of Lender
(including, without limitation, the reasonable fees and expenses of counsel
to Lender), in connection with (A) the negotiation, preparation, execution
and delivery of this Agreement and (B) any amendment, modification or waiver
of any of the terms of this Agreement requested or initiated by a Pledgor;
(2) all reasonable costs and expenses of Lender (including reasonable
counsel's fees) in connection with any Event of Default and any enforcement
or collection proceedings resulting therefrom; and (3) all transfer, stamp,
documentary or other similar taxes, assessments or charges levied by any
governmental or revenue authority in respect of this Agreement, or any other
document referred to herein and all costs, expenses, taxes, assessments and
other charges incurred in connection with any filing, registration, recording
or perfection of any security interest contemplated by this Agreement or any
document referred to herein.

         (1)        The Pledgors hereby agree to indemnify Lender and its
directors, officers, employees and agents from, and hold each of them harmless
against, any and all losses, liabilities, claims, damages or expenses incurred
by any of them arising out of or by reason of any claim of any Person (1)
relating to or arising out of the Charter Documents or the acts or omissions of
any Pledgor or any Affiliate thereof or (2) resulting from the ownership of or

                                      127

<Page>

Lien on any Collateral, including, without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such investigation or
litigation or other proceedings (but excluding any such losses, liabilities,
claims, damages or expenses incurred by reason of the gross negligence or
willful misconduct of the Person to be indemnified).

         7.7        NO LIABILITY ON PART OF LENDER. Lender, by its acceptance
of this Agreement, the Collateral and any payments on account thereof, shall
not be deemed to have assumed or to have become liable for any of the
obligations or liabilities any Pledgor. Lender shall have no duty to collect
any sums due in respect of any of the Collateral in its possession or
control, or to enforce, protect or preserve any rights pertaining thereto,
and Lender shall not be liable for failure to collect or realize upon the
Collateral, or any part thereof, or for any delay in so doing, nor shall
Lender be under any obligation to take any action whatsoever with regard
thereto.

         7.8        FURTHER ASSURANCES. Each Pledgor agrees that at any time
and from time to time upon the written request of Lender, such Pledgor will
execute and deliver such further documents and do such further acts and
things as Lender may reasonably request in order to effect the purposes of
this Agreement.

         7.9        DELAY NOT A WAIVER. Neither any failure nor any delay on
the part of Lender in insisting upon strict performance of any term,
condition, covenant or agreement, or exercising any right, power, remedy or
privilege hereunder, shall operate as or constitute a waiver thereof, nor
shall a single or partial exercise thereof preclude any other future
exercise, or the exercise of any other right, power, remedy or privilege.

         7.10       COUNTERPARTS. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and
the same instrument and any of the parties hereto may execute this Agreement
by signing any such counterpart.

         7.11       SEVERABILITY. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by
law, (i) the other provisions hereof shall remain in full force and effect in
such jurisdiction and shall be liberally construed in favor of Lender in
order to carry out the intentions of the parties hereto as nearly as may be
possible and (ii) the invalidity or unenforceability of any provision hereof
in any jurisdiction shall not affect the validity or enforceability of such
provision in any other jurisdiction.

                                      128

<Page>

                  IN WITNESS WHEREOF, the Pledgors have caused this Agreement to
be duly executed as of the day and year first above written.

                           PLEDGORS:

                           THIRD HGI, L.L.C.

                           By:      Horizon Group Properties, L.P., a Delaware
                                    limited partnership, its managing member

                                    By:  Horizon Group Properties, Inc., a
                                         Maryland corporation, its general
                                         partner

                                         By:      ________________________
                                                  Name:
                                                  Title

                         HORIZON GROUP PROPERTIES, L.P.

                           By:      Horizon Group Properties, Inc., a Maryland
                                    corporation, its general partner

                                    By:      ________________________
                                             Name:
                                             Title

                                      129

<Page>

                                   EXHIBIT A

                                CHARTER DOCUMENTS

1.         That certain Amended and Restated Agreement of Limited Partnership of
Third Horizon Group Limited Partnership, a Delaware limited partnership dated as
of June ___, 1998; and

2.         That certain Certificate of Limited Partnership of Third Horizon
Group Limited Partnership executed on June 12, 1997 and filed with the State of
Delaware Secretary of State on June 18, 1997.

                                      130

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00028-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00028-of-00352.parquet"}]]