Contract

EXHIBIT 10.106 LOAN AGREEMENT ————– by and between TULSA PROMENADE, LLC as Borrower, and CHARTER ONE BANK, N.A., as Lender LOAN AGREEMENT ————– THIS LOAN AGREEMENT (this “Agreement”), is made and entered into as of the14th day of March, 2006, by and between Tulsa Promenade, LLC, a Delaware limitedliability company (the “Borrower”) and CHARTER ONE BANK, N.A., a nationalbanking association (the “Lender”). RECITALS ——– WHEREAS, Borrower is the owner of certain real property in Tulsa, Oklahoma,as more particularly described on Exhibit A attached as a part hereof (the”Land”, which term shall include such present improvements and all rights,privileges, easements, hereditaments and appurtenances thereunto relating orappertaining); WHEREAS, improvements on the Land include a regional shopping mallcontaining approximately 438,481 square feet of retail space, parking and commonareas related thereto (the “Mall”); WHEREAS, Borrower desires to acquire additional land and retail spacecontaining approximately 81,320 square feet of retail space currently owned byMervyn’s Department Store (the “Mervyn’s Acquisition”); WHEREAS, Borrower intends to make certain improvements to the Project(defined herein), including general upgrades and tenant improvements associatedwith new leases benefiting the Project; WHEREAS, Borrower has applied to Lender for a first mortgage loan in theamount of $50,000,000.00 (the “Loan”) for the purpose of such acquisitions andimprovements, and Lender is willing to make the Loan upon the terms andconditions hereinafter set forth; NOW, THEREFORE, in consideration of the mutual representations, warranties,covenants and agreements herein contained, the sufficiency of which is herebyacknowledged, the parties hereto represent and agree as follows: ARTICLE I INCORPORATION AND DEFINITIONS —————————– The foregoing recitals and all exhibits hereto are made a part of thisAgreement. The following terms shall have the following meanings in thisAgreement: Additional Debt Service: For purposes of a Subsequent Draw shall mean debtservice calculated as set forth in the definition of Debt Service based on theamount of such Subsequent Draw. Adjusted NOI: The annualized amount of rents from Incremental New Leases,plus the annualized amount of Incremental Reimbursable Expenses minus theannualized rental income derived from any existing leases expiring within 90days of such Subsequent Draw minus annualized operating expenses allocated tothe New Incremental Leases (where applicable) based on actual trailing twelvemonth expenses for the Project applied on a square foot basis to the leaseablearea of the New Incremental Leases minus Management Fees based on the projectedgross revenues from the Incremental New Leases minus Reserves for CapitalExpenditures allocated to the Incremental New Leases. Applicable Margin: The percentage set forth below corresponding to the Loanto Value Ratio in effect at such time:- —————————————————————————– Level Loan to Value Ratio Applicable Margin for LIBOR Rate Loans- —————————————————————————– 1 0.50 to 1.00 and 0.60 to 1.00 1.50%- —————————————————————————–The Applicable Margin shall be determined by the Lender from time to time, basedon the Loan to Value Ratio as determined by Lender in its sole discretion. Appraisal: An MAI certified appraisal of the Project performed inaccordance with FIRREA and Lender’s appraisal requirements by an appraiserselected and retained by Lender, which shall be acceptable to Lender in its solediscretion. Borrower: Tulsa Promenade, LLC, an Oklahoma limited liability company. Certificate of Compliance: As defined in Section 7.10 (f). Debt Service: The annual principal and interest payments required for thecurrent outstanding principal balance of the Loan assuming a thirty (30) yearamortization and the greater of an interest rate equal to (i) the yield on a10-year United States Treasury Note plus 2.50% and (ii) 7%, provided that forpurposes of Draw A and Draw B, interest will be assumed to be 7%.Notwithstanding the foregoing, in the event any portion of the Loan is subjectto a Hedging Contract with a fixed rate of interest, calculations of DebtService for the portion of the Loan subject to a Hedging Contract shall be basedon the actual fixed interest rate set forth in such Hedging Contract assuming athirty (30) year amortization. Debt Service Coverage Ratio: The ratio of the Borrower’s Net OperatingIncome to Debt Service. Default or Event of Default: One or more of the events or occurrences setforth in Article X below. Default Rate: As defined in the Note. Disbursement: A disbursement of Loan Proceeds by Lender as contemplated byArticle VI below. -2- Draw A: As defined in Section 3.3 (a). Draw B: As defined in Section 3.3 (b). DSC Cash Collateral Reserve: As defined in Section 7.28.1. DSCR Requirement: As defined in Section 7.28. Environmental Law: As defined in the Indemnity Agreement by and betweenBorrower and Lender dated on or about the date hereof. Hedging Contracts means, interest rate swap agreements, interest rate capagreements and interest rate collar agreements, or any other agreements orarrangements entered into between the Borrower and the Lender and designed toprotect the Borrower against fluctuations in interest rates or currency exchangerates. Hedging Obligations means, with respect to the Borrower, all liabilities ofthe Borrower to the Lender under Hedging Contracts. Incremental New Leases: Any New Lease entered into after the immediatelypreceding Subsequent Draw, or in the case of the first Subsequent Draw, enteredinto after Draw A or Draw B, as the case may be. Incremental Reimbursable Expenses: Cash expenses incurred by the Borrower,but which are required to be reimbursed by the tenant(s). Incremental Value: The Adjusted NOI divided by the Prevailing Cap Rate. Improvements: All buildings, structures and other improvements, includingall common areas, located or to be located on the Land (and, upon the Mervyn’sAcquisition, on the land subject to such acquisition) and all fixtures andequipment required for the operation thereof. Inspecting Agent: Any and all persons or entities from time to timedesignated by Lender as Lender’s agent to inspect the Project. Interest Period: As defined in the Note. LIBOR Rate: Relative to any Interest Period for LIBOR Rate Loans, theoffered rate for deposits of U.S. Dollars in an amount approximately equal tothe amount of the requested LIBOR Rate Loan for a term coextensive with thedesignated Interest Period which the British Bankers’ Association fixes as itsLIBOR rate as of 11:00 a.m. London time on the day which is two London BankingDays prior to the beginning of such Interest Period. LIBOR Rate Loan: Any Loan the rate of interest applicable to which is basedupon the LIBOR Rate. -3- LIBOR Lending Rate: Relative to any LIBOR Rate Loan to be made, continuedor maintained as, or converted into, a LIBOR Rate Loan for any Interest Period,a rate per annum determined pursuant to the following formula: LIBOR Lending Rate = LIBOR Rate ———- (1.00 – LIBOR Reserve Percentage) London Banking Day: A day on which dealings in US dollar deposits aretransacted in the London interbank market. Loan: As defined in the recitals. Loan Amount: The lesser of (i) 65% of the value of the Project, or (ii)$50,000,000.00. Loan Closing: The date on which the Mortgage is filed with the CountyRecorder’s office. Loan Documents: This Agreement, the documents specified in Article IVhereof, and any other instruments evidencing or securing the obligations ofBorrower or any guarantor under the Note or any of the other Loan Documents. Loan Opening: The first disbursement of the Loan. Loan Proceeds: All amounts advanced as part of the Loan, whether advanceddirectly to Borrower or other parties. Loan to Value Ratio: The ratio of the outstanding principal amount of theLoan to the value of the Project securing the Loan (as determined by the mostrecent Appraisal) at the time such calculation is made. Management Fee: The greater of (i) the actual management fee for theProject, or (ii) the imputed management fee set forth in the most recentAppraisal, which, as of the date hereof, is 3%. Managing Member Glimcher Properties Limited Partnership, a Delaware limitedliability company, as of Loan Closing, to be immediately replaced by TulsaPromenade REIT, LLC as set forth in Section 9.2 Maturity Date: _______________, 2009. Mervyn’s Acquisition: As defined in the recitals. Mervyn’s Collateral Account: As defined in Section 3.3(b). Mortgage: As defined in Section 4(b). -4- Net Operating Income or NOI: The sum of the following (without duplicationand determined on a consistent basis with prior periods): (a) rents and otherrevenues received in the ordinary course of business from operating the Project(including proceeds of rent loss insurance but excluding pre-paid rents andrevenues and security deposits except to the extent applied in satisfaction oftenants’ obligations for rent) during the trailing twelve months minus (b) anyincome received from leases where tenant has given Borrower notice of itsintention to terminate or not renew its existing lease minus (c) all expensespaid or accrued related to the ownership, operation or maintenance of theProject, including, but not limited to, taxes, assessments and other similarcharges, insurance, utilities, payroll costs, maintenance, repair andlandscaping expenses and on-site marketing expenses during the trailing twelvemonths minus (d) the Reserves for Capital Expenditures for the Project for thetrailing twelve months minus (e) the Management Fee for the Project for suchperiod. New Lease(s): Newly executed leases with national or regional tenants inaccordance with Section 7.30 and with terms of at least five(5) years. Note: As defined in Section 3.2. Permitted Exceptions: Encumbrances on the Land expressly agreed to byLender, as set forth in Schedule B I of the Title Policy. Prevailing Cap Rate or PCR: In the event that a Subsequent Draw occurswithin 12 months of the Loan Closing, the Prevailing Cap Rate shall mean 7.37%(as set forth in the most recent Appraisal). In the event that a Subsequent Drawoccurs later than 12 months following the Loan Closing, the Prevailing Cap Rateshall mean the lesser of (i) the yield on the prevailing 10-year United StatesTreasury Note plus 2.50%; or (ii) the capitalization rate set forth in the mostrecent Appraisal, provided that such Appraisal may not be older than twelve (12)months. Prime Rate: The rate of interest announced by Lender in Cleveland, Ohiofrom time to time as its “Prime Rate.” The Borrower acknowledges that the Lendermay make loans to its customers above, at or below the Prime Rate. Interestaccruing by reference to the Prime Rate shall be calculated on the basis ofactual days elapsed and a 360-day year. Prime Rate Loan: Any Loan for the period(s) when the rate of interestapplicable to such Loan is calculated by reference to the Prime Rate. Proforma Debt Service: For purposes of a Subsequent Draw shall mean currentDebt Service plus Additional Debt Service. Proforma NOI: For purposes of a Subsequent Draw shall mean Adjusted NOI(for such Subsequent Draw) plus NOI (trailing twelve months). Project: The Land, together with the Improvements, provided that if/whenthe Mervyn’s Acquisition occurs, the definition of Project shall automaticallyinclude all the land and improvements related to the Mervyn’s Acquisition. Prohibited Transfer: As defined in Section 9.2 below. -5- Reference Banks: Means four major banks in the London interbank market. Request for Disbursement: As defined in Article VI hereof. Reserves for Capital Expenditures: The amount of annual reserves requiredfor the Project pursuant to the most recent Appraisal as approved by Lender inits sole discretion. As of the date hereof, the required annual reserves is $.15per square foot (total of $43,845.00). Regulated Materials: As defined in the Indemnity Agreement by and betweenBorrower and Lender dated on or about the date hereof. Required NOI: As defined in Section 7.28.1. Soft Costs: Costs incurred by Borrower for professional and other servicesin connection with the Project. Subsequent Draw: As defined in Section 3.3 (c). Title Company: Flagler Title Company. Title Policy: An ALTA Mortgagee’s Loan Title Insurance Policy with extendedcoverage issued by the Title Insurer insuring the lien of the Mortgage as avalid first, prior and paramount lien upon the Project and all appurtenanteasements, and subject to no other exceptions other than the PermittedExceptions and otherwise satisfying the requirements of Section 5.1(a). ARTICLE II REPRESENTATIONS AND WARRANTIES —————————— 2.1 Representations and Warranties. To induce Lender to execute and performthis Agreement, Borrower hereby represents, covenants and warrants to Lender asfollows: (a) At the Loan Closing and at all times thereafter until the Loan is paidin full, the Borrower will have good and marketable indefeasible fee simpletitle to the Land, subject only to the Permitted Exceptions. (b) Each of the Loan Documents, when executed and delivered, willconstitute the duly authorized, legal, valid and binding obligations of eachparty executing the same, and will be enforceable strictly in accordance withtheir respective terms. (c) No condition, circumstance, event, agreement, document, instrument,restriction, or pending or threatened litigation or proceeding exists whichcould materially adversely affect the validity or priority of the liens andsecurity interests granted to Lender under the Loan Documents, which couldmaterially adversely affect the ability of Borrower to own the Land and tooperate the Project, which could materially adversely affect the ability ofBorrower to perform its or their respective obligations under the LoanDocuments, which would constitute a default in the obligations of the Borrowerunder any of the Loan Documents or which would constitute such a default withthe giving of notice or lapse of time or both. -6- (d) The Land, the present use and occupancy of the Land and the use andoccupancy of the Project, does not violate or conflict in any material respectwith any applicable law, statute, ordinance, rule, regulation or order of anykind, including, without limitation, zoning, building, environmental, land use,noise abatement, occupational health and safety or other laws, any buildingpermit or any condition, grant, easement, covenant, condition or restriction,whether recorded or not. (e) All financial statements submitted by Borrower to Lender in connectionwith this Loan are true and correct in all material respects, have been preparedin accordance with generally recognized accounting principles consistentlyapplied, and fairly present the respective financial conditions and results ofoperations of the entity and persons which are their subject as of therespective dates thereof. No material adverse change has occurred in thefinancial conditions reflected therein since the respective dates thereof and noadditional borrowings have been made by Borrower since the date thereof otherthan the Loan contemplated hereby. (f) This Agreement and all financial statements, budgets, schedules,opinions, certificates, confirmations, applications, rent rolls, affidavits,agreements, and other materials submitted to the Lender in connection with or infurtherance of this Agreement by or on behalf of the Borrower, fully and fairlystate the matters with which they purport to deal, do not misstate any materialfact, nor, separately or in the aggregate, fail to state any material factnecessary to make the statements made not misleading. (g) All utility and municipal services required for the, occupancy andoperation of the Project, including, but not limited to, water supply, storm andsanitary sewage disposal system, gas, electric and telephone facilities areavailable for use. (h) All permits and licenses required by applicable law to occupy andoperate the Project have been issued and are in full force. (i) The storm and sanitary sewage disposal system, water system and allmechanical systems of the Land and the Project comply in all material respectswith all applicable environmental, pollution control and ecological laws,ordinances, rules and regulations. (j) All utility, parking, vehicular access (including curb cuts and highwayaccess), recreational and other permits and easements required for the use andoperation of the Project have been granted and issued, to the extent necessaryor required for the operation and use of the Project. (k) Except as shown on the survey, the Project does not encroach upon anybuilding line, set back line, side yard line, or any recorded or visibleeasement, or other easement of which Borrower is aware or has reason to believemay exist, affecting the Land. -7- (l) All roads necessary for ingress and egress to the Project and for thefull utilization of the Improvements for their intended purposes have eitherbeen completed pursuant to easements approved by the Lender or the necessaryrights-of-way thereof have been dedicated to public use and accepted by theappropriate governmental authority. (m)(i) No condemnation of any portion of the Project and (ii) no denial ofaccess to the Project from any point of access to the Project, has commenced, orto the best of Borrower’s knowledge, is contemplated by any governmentalauthority. 2.2 Continuation of Representations and Warranties. The Borrower herebycovenants, warrants and agrees that each of the representations and warrantiesmade in Section 2.1 hereof shall be and shall remain true and correct at thetime of the Loan Closing and at all times thereafter so long as any part of theLoan shall remain outstanding. Each Request for Disbursement shall constitute areaffirmation that these representations and warranties are true on and as ofthe date of such Request for Disbursement and will be true on the date of theDisbursement. ARTICLE III THE LOAN ——– 3.1 Agreement to Borrow and Lend. Borrower agrees to borrow from Lender,and Lender agrees to lend to Borrower, such amount as shall be requested by theBorrower, but in no event exceeding the stated Loan Amount, on the terms of andsubject to the conditions of this Agreement. 3.2 The Note. The Loan shall be evidenced by a promissory note (the”Note”), executed by Borrower, payable to the order of Lender and in the LoanAmount. Interest, maturity, terms of payment of principal and interest,prepayment premiums, and all other similar terms and conditions of the Loanshall be as set forth in the Note. 3.3. Permitted Draws. (a) Initial Draw: Borrower may request and Lender will provide an initialdraw at Loan Closing in an amount up to the lesser of (i) 65% of the purchaseprice of the Mall, (ii) 65% of the appraised value of the Mall, (iii) an amountsuch that the Debt Service Coverage Ratio for the Project is not less than1.25x, or (iv) $35,000,000 (“Draw A”); (b) Mervyn’s Acquisition Draw: In the event that Borrower proceeds with theMervyn’s Acquisition, Borrower may request and Lender will provide an additionaldraw to fund the Mervyn’s Acquisition in an amount up to the lesser of (i) 65%of the purchase price of the Mervyn’s Acquisition, or (ii) 65% of the appraisedvalue of the Mervyn’s Acquisition (“Draw B”); provided that Borrower mustdeposit its own funds or draw an additional amount from Loan proceeds (such drawshall not be restricted by the foregoing) in the amount of one year’s DebtService for Draw B, to be deposited in an account with Lender (the “Mervyn’sCollateral Account”) to be held as additional collateral for the Loan, untilsuch time as the Project (factoring both the Mall and the Mervyn’s Acquisition)achieves the DSCR Requirement, provided that such release shall not occur priorto the one year anniversary of the Lender’s disbursement of Draw B. -8- (c) Subsequent Draws: At any time following the Loan Opening, but not morethan once per quarter, Borrower may request additional draws in the minimumamount of $1,000,000 (and $250,000 increments thereafter) to reimburse Borrowerfor expenses incurred related to improvements made to the Project or incurredrelated to any Incremental New Leases (each being a “Subsequent Draw” andcollectively, the “Subsequent Draws”) subject to the following: (i) Borrower must provide evidence that the Project currently complieswith the required minimum Debt Service Coverage Ratio of 1.25x; (ii) Borrower must provide evidence that the Project will continue tocomply with the required minimum Debt Service Coverage Ratio of 1.25x after suchSubsequent Advance based on Proforma Net Operating Income and Proforma DebtService; and (iii) Such draw may not exceed 65% of the Incremental Value.In no event shall the aggregate outstanding amount of Draw A, Draw B, and allSubsequent Draws exceed the aggregate amount of $50,000,000. 3.4. Interest Election. Subject to the terms and conditions set forth inthe Note, interest on the outstanding principal amount of the Note shall accrue,at Borrower’s option, at one of the following rates of interest: (i) the PrimeRate; or (ii) during the Interest Period applicable thereto at a rate equal tothe sum of the LIBOR Lending Rate for such Interest Period plus the ApplicableMargin thereto and be payable on each Interest Payment Date. ARTICLE IV LOAN DOCUMENTS ————– Borrower agrees to execute and deliver to Lender, on or prior to the LoanOpening, the following documents, all of which must be satisfactory to Lenderand Lender’s counsel in form, substance and execution and all of which areexecuted on or about the date hereof: (a) The Note. (b) A mortgage with power of sale, security agreement and financingstatements (the “Mortgage”), duly executed by the Borrower and granting a validand subsisting first lien on the Land and the portions of the Projectconstituting real property, and a security interest in the personal property andfixtures securing all obligations of the Borrower under all of the LoanDocuments, subject only to the Permitted Exceptions. (c) An assignment to Lender from Borrower of the rents, leases, securityand other deposits, income, issues, proceeds and profits associated with orarising from the Project or any part thereof, and which assignment is prior toall other such assignments and valid as such against all creditors of Borrower. -9- (d) Uniform Commercial Code financing statements, executed by Borrower asdebtor with respect to the Mortgage and the security agreement described inclauses (b) and (d) hereof, and which financing statements are prior to allother such financing statements and valid as such against all creditors ofBorrower. (e) A collateral assignment to Lender of all rights of Borrower in anycontract for management of the Project or any portion thereof, together withassignments of such maintenance and service contracts entered into in connectionwith the operation of the Project as Lender may require, and which assignment isprior to all other such assignments and valid as such against all creditors ofBorrower. (f) An indemnity agreement from Borrower in favor of Lender confirming theperpetual survival of Borrower’s representations, warranties and indemnitiesherein with respect to Regulated Materials, among other things, and compliancewith all applicable laws. (g) Such other papers and documents as may be required by this Agreement oras Lender may reasonably require. ARTICLE V CONDITIONS TO LOAN CLOSING ————————– 5.1 Unless waived by Lender, Borrower shall furnish the following to Lenderat least five (5) business days prior to the Loan Closing or at such time as isset forth below, all of which must be strictly satisfactory to Lender andLender’s counsel in form, content and execution: (a) Title Policy. A commitment (the “Title Commitment”) for issuance of anALTA Loan Policy of Title Insurance, Form B-1970 (Amended 10-17-70, or 6-18-87)(the “Title Policy”), issued by the Title Company to Lender, in the Loan Amount,insuring the Mortgage to be a valid first, prior and paramount mortgage lienupon the fee title to the Land and the Project, and a valid first lien upon anyeasement in favor of the Premises which provides access to the Premises foringress and egress and/or for utilities, to the extent of funded Disbursementsof the Loan, subject only to the Permitted Exceptions and to customaryexceptions which, by their nature, cannot be eliminated until construction ofthe Project has been completed, and with all so-called “standard” exceptionsdeleted. The Title Commitment shall (i) contain a so-called “ComprehensiveEndorsement”; (ii) contain an endorsement affirmatively insuring the priority ofthe Mortgage against any vendor’s or mechanic’s lien; (iii) affirmatively insurethe Lender that (A) no restrictions of record affecting the Land have beenviolated, and that such instruments contain no right of reverter or forfeiture,(B) the survey described in Section 5.1(b) hereof is accurate and accuratelydepicts the same real estate as is covered by the Title Commitment, (C) Lenderis the holder of the Mortgage and that the Mortgage is the first lien againstthe Project; (iv) insure contiguity of the Land with adjoining public rights ofway; (v) contain ALTA Variable Rate Endorsement No.6; (vi) contain anendorsement affirmatively insuring that all future advances of Loan Proceedsmade by Lender shall be secured by the Mortgage and have priority as of the datethe Mortgage is filed for record with the Tulsa County Recorder; and (vii)contain such other endorsements as Lender may require. If requested by Lender,appropriate provisions satisfactory to Lender for co-insurance and reinsurance, -10-with direct access agreements acceptable in form and substance to Lender, shallalso be obtained. Contemporaneously with delivery to Lender of the TitleCommitment, Borrower shall also deliver to Lender copies of all documentsconstituting the Permitted Exceptions. Borrower agrees to deliver to the TitleAgent, with a copy of each to Lender, such other papers, instructions anddocuments as the Title Agent may require for the issuance of the TitleCommitment and the issuance of date down endorsements and interim certificationsrelating to construction payouts as provided in Article vi hereof, and inaccordance with all requirements of this Agreement. (b) Survey. A plat survey (the “Survey”) of the Land, in duplicate, made bya registered land surveyor, dated no later than three (3) months prior to LoanClosing, showing. (i) the location (and recording numbers, to the extent recorded) of all visible or recorded easements (including appurtenant easements), water courses, drains, sewers, public and private roads (including the names and widths thereof and recording numbers for the dedications thereof), other rights of way, and curb cuts, if any, within, adjacent to or serving the Land and Project or to which the Land and Project are or will be subject, and the location of any such proposed easements; that the same are, and after Construction of the Project and granting of easements will be, unobstructed; and that all portions of the Project will have access over recorded easements to dedicated public roads; (ii) the common street address of the Land and Project and the dimensions, boundaries and acreage or square footage of the Land and the Improvements; (iii) that all foundations and other structures currently existing and all other improvements on the Land, are placed within the lot and building lines, all deed restriction, recorded plats, other restrictions of record and ordinances relating to the location thereof (and, to the extent that any such restrictions or ordinances require any structure to be set back specified distances from any line, showing said line and the measured distance of said structure, or the proposed location of said structure, from said line); (iv) that except as may be shown on the survey there are no encroachments on the Land from improvements located on adjoining property; (v) the location and course of all visible utility lines; (vi) if the Land comprises more than one parcel, interior lines and other data sufficient to insure contiguity; and (vii) such additional information which may be required by the Lender or the Title Company. The Survey shall be made in accordance with the Minimum Standard DetailRequirements for ALTA/ACSM Class A Land Title Surveys most recently adopted bythe American Land Title Association. -11- (c) Insurance Policies. (i) Evidence of insurance policies as set forthbelow, all of which must be satisfactory to Lender, in companies, forms, amountsand coverage satisfactory to Lender, containing waiver of subrogation and firstmortgagee clauses in favor of Lender and providing for thirty (30) days’ writtennotice to Lender in advance of cancellation of said policies for non-payment ofpremiums or any other reason or for material modification of said policies, andten (10) days’ written notice to Lender in advance of payment of any insuranceclaims under said policies to any person. (ii) Without limiting the generality of the foregoing, such policies shallinclude the following: (A) Intentionally deleted. (B) Comprehensive general public liability, property damage and indemnity insurance, including, without limitation, water damage, so-called assumed and contractual liability coverage and claims for bodily injury, death or property damage, naming Lender as an additional insured, in a minimum amount of One Million Dollars ($1,000,000.00) per person One Million Dollars ($1,000,000.00) per occurrence, or such other amounts as Lender may from time to time require, with insurance carriers having a Best’s rating of A or better, in forms and with companies satisfactory to Lender and with a maximum deductible of One Thousand Dollars ($1,000.00). Borrower shall also carry and maintain excess of umbrella liability, naming Lender as an additional insured thereunder in a minimum amount of Two Million Dollars ($2,000,000.00), with an insurance carrier having a Best’s rating of A or better, in form satisfactory to Lender. (C) Insurance against loss or damage by fire and such other hazards, casualties and contingencies (including, without limitation, so called all risk coverages) as Lender may require, in an amount equal to the greater of (1) the Loan Amount, or (2) the replacement cost of the Project, with a replacement cost endorsement and in such amounts so as to avoid the operation of any coinsurance clause, for such periods and otherwise as Lender may require from time to time. (D) Insurance against rent loss or abatement of rent, covering payment of rent and like charges from the Land over a term of not less than twelve (12) months, in an amount to be approved by Lender. (E) Workers’ compensation and employee liability insurance, naming Lender as additional insured, covering all employees working on or about the Project, and death, injury and/or property damage occurring on or about the Project, or resulting from activity thereat, with liability insurance limits for death of or injury to persons not less than Statutory Limits and for damage to property of not less than Statutory Limits.Borrower shall deliver renewal certificates of all insurance required above,together with written evidence of full payment of the annual premiums thereforat least thirty (30) days prior to the expiration of the existing insurance. Anysuch insurance may be provided under so called “blanket” policies, so long as -12-the amounts and coverages thereunder will, in Lender’s sole judgment, provideprotection equivalent to that provided under a single policy meeting therequirements of this paragraph. (d) Compliance with Laws. Evidence satisfactory to Lender that the Projectis in compliance with all applicable laws, ordinances (including zoning),orders, rules and regulations of applicable governmental or quasigovernmentalauthorities (including, without limitation, requirements for parking andoperation of the Project), and that any approvals thereof required from thirdparties or any governmental or quasigovernmental authorities have been obtained. (e) Financial Statements. Current financial statements for the Borrower. (f) Management Agreement. Prior to the first advance of Loan Proceeds, acopy of the management agreement. Said agreement to be collaterally assigned toLender and consented to by the Manager and the Service Provider. (g) Environmental Assessment. Evidence, including an environmentassessment, indicating that the Land, and the existing improvements, in Lender’ssole judgment, (i) contain no Regulated Materials and no other contaminationwhich, even if not so regulated, is known to pose a hazard to the health of anyperson on or about the Land, (ii) is not located in a “Wetlands” or “FloodPlain” area, and (iii) contains no underground storage tanks. Lender reservesthe right, at Borrower’s expense, to retain an independent consultant to reviewany such evidence submitted by Borrower or to conduct its own investigation ofthe Land. (h) Payment of Loan Origination Fee. Payment to Lender of a LoanCommitment/Origination Fee in the amount of $52,500.00 (15 basis points of theamount of Draw A). Borrower shall pay Lender the remainder of theCommitment/Origination fee in the amount of $22,500 (15 basis points ofremaining undisbursed Loan amount) at the time of the earlier of (i) Draw B, or(ii) a Subsequent Draw. (i) Documents of Record. Copies of all covenants, conditions, restrictions,easements and matters of record which affect the Land. (j) Equity: Borrower shall have provided evidence reasonably satisfactoryto Lender that Borrower’s cash equity invested in the Project is not less thanthe greater of (i) 35% of the total cost of the Project, or (ii) $20,405,000.Borrower’s cash equity must be used to pay for acquisition of the Mall. (k) Borrower’s Attorney’s Opinion. The opinion of Borrower’s legal counselthat with respect to the Borrower, the Land, and the Project: (a) there is nothreatened or pending litigation that might affect the Loan, the Land, theProject or the Borrower; (b) the transactions contemplated by this Agreement donot violate any provision of any law, restriction or other document affectingthe Borrower, the Land, or the Project; (c) the Loan Documents have been dulyexecuted and delivered, constitute legal, valid and binding obligations of theBorrower and are enforceable in accordance with their terms; (d) Borrower is avalidly organized and existing limited liability company under the laws of theState of Delaware and qualified to do business in the State of Oklahoma, thatBorrower has the legal capacity to own, develop and operate the Land and theProject, and has the legal capacity to perform its obligations under the Loan -13-Documents, and that the Loan has been duly authorized by the Borrower, (e) theindividuals executing the Loan Documents are properly authorized to do so onbehalf of Borrower, (f) such other matters (including an opinion with respect tozoning of the Land and the Project) concerning the Loan, the Loan Documents, andthe Land, the Project, and the Borrower, as the Lender or its counsel mayrequire. (l) Organizational Documents. (1) Certified copy of the Borrower’s, Managing Member’s, and OG Retail Holding Co., LLC’s Articles of Organization; (2) Certified copy of Borrower’s, Managing Member’s, and OG Retail Holding Co., LLC’s Operating Agreement; (3) Borrower’s, Managing Member’s, and OG Retail Holding Co., LLC’s Resolutions authorizing Borrower to enter into Loan and designating the members/officers authorized to execute all Loan Documents. (4) Certified copy of the Glimcher Properties Limited Partnership Articles of Organization; (5) Certified copy of Glimcher Properties Limited Partnership Limited Partnership Agreement; (6) Certified copy of the Glimcher Properties Corporation’s Articles of Incorporation; (7) Certified copy of Glimcher Properties Corporation’s By-laws/Code of Regulations; (8) Glimcher Properties Corporation’s Resolutions authorizing Glimcher Properties Limited Partnership Resolutions as sole member of Borrower to enter into Loan. (m) Full executed copy of the purchase agreement for the Mall. (n) Lender shall have obtained (at Borrower’s cost) an Appraisal of theProject which Appraisal is satisfactory to Lender in all respects including, butnot limited to, having a fair market evaluation of the Project indicating aLoan-to-Value Ratio of sixty-five percent (65%) or lower. (o) Borrower shall concurrently with the Loan Opening, enter into aderivative rate instrument or Hedging Contract in the minimum amount of 75% ofthe projected combined amount of Draw A and Draw B; or upon each Draw A and DrawB, enter into a derivative rate instrument or Hedging Contract in the minimumamount of 75% of the amount of such draw. -14- (p) Borrower shall use good faith and commercially reasonable efforts todeliver to Lender, within 60 days of the date hereof subordinationnondisturbance and attornment agreements (the “SNDA’s”) with JC Penney andHollywood Theater. Notwithstanding anything to the contrary contained herein,Lender shall not be obligated to fund any Subsequent Draws unless and until theforegoing SNDA’s have been delivered to Lender. (q) Additional Documents. Such other papers and documents regardingBorrower, the Land or the Project as Lender may require. ARTICLE VI DISBURSEMENTS ————- 6.1 The Disbursements. (a) Subject to the provisions of this Agreement, andalso subject to the terms and conditions of the other Loan Documents, the Lendershall make and the Borrower shall accept the Loan in periodic Disbursements notexceeding, in the aggregate, the Loan Amount (except for additionalDisbursements which the Lender shall have the right to make at its optionpursuant to the Mortgage). Disbursements shall be made from Loan Proceeds. Thefirst disbursement, to be made upon the Loan Closing, shall be in an amountequal to (i) Draw A, (ii) such other costs and expenses of Loan Closing, asapproved by Lender in its sole and absolute discretion, and (iii) such othercosts and expenses in accordance with Section 6.1(b) below (the “InitialDisbursement”). All Disbursements following the Initial Disbursement arehereinafter called “Subsequent Disbursements”. (b) After an Event of Default, Borrower hereby requests and authorizesLender to make Disbursements directly to itself for payment and reimbursement ofall interest, charges, costs and expenses incurred by Lender in connection withthe Loan, pursuant to this Agreement or other Loan Documents, including, but notlimited to, (i) interest due on the Loan and any points, loan fees, servicecharges, commitment fees, or other fees due to Lender in connection with theLoan; (ii) all title examination, survey, escrow, filing, search, recording andregistration fees and charges; (iii) all documentary stamp and other taxes andcharges imposed by law on the issuance or recording of any of the LoanDocuments; (iv) all appraisal fees; (v) all title, casualty liability, payment,performance or other insurance or bond premiums; (vi) all fees and disbursementsfor legal services including, without limitation, in-house attorney’s costs andfees, and outside counsel engaged in connection with the preparation,negotiation, enforcement or administration of this Agreement or any of the LoanDocuments; and (vii) any amounts required to be paid by Borrower under thisAgreement, the Mortgage or any Loan Document after the occurrence of a Default(all of which are herein referred to as “Loan Expenses”). (c) Except for the Initial Disbursement, which shall be made at the LoanOpening, Lender shall make each Disbursement within fifteen (15) business daysfollowing receipt of all information required by Lender for the funding of suchDisbursement. 6.2 Requests for Loan Disbursements. All requests for Disbursements,including, without limitation, the Initial Disbursement shall be submitted onthe Lender’s form of “Certificate for Payment”, signed by the Borrower stating,among other things, the amount of Loan Proceeds requested for each item. EachCertificate for Payment requesting Disbursements for improvements to the Project -15-shall be accompanied by (a) the Borrower’s affidavit, certifying the amount ofall outstanding balances due but unpaid for work in place for the Project, (b)invoices from contractors and any other supporting documentation, and (c) lienwaivers from all contractors in the sum received by each such contractor for allof Borrower’s preceding draw requests, all to be in form and substancesatisfactory to Lender and the Title Agent. Borrower shall not submit more thanone Certificate for Payment per quarter. Each Certificate for Payment must bereceived by the Lender on or before a date which is at least fifteen (15) daysprior to the date upon which the requested Disbursement is to be made, excludingthe date of receipt by the Lender. 6.3 Loan Opening and Initial Disbursement. The Loan Opening shall be madeat such time as all of the conditions and requirements of this Agreementrequired to be performed by Borrower or other parties prior to the Loan Openinghave been satisfied or performed. At the Loan Opening, Lender shall disburse, inaddition to the Initial Disbursement, all funds necessary to pay any LoanExpenses then due. 6.4 Subsequent Disbursements. (a) Draw B shall be made by Lender following receipt of Borrower’s writtenrequest, provided that, prior to the funding of Draw B, Borrower shall furnishthe following to Lender, all of which must be in form, substance and executionsatisfactory to Lender: (i) Borrower has delivered to Lender all items in Section 5.1, to the extent that such items apply or could apply to the Mervyn’s Acquisition, including 5.1 a, b, c, d, f, g, l, and m. (ii) Borrower has delivered to Lender an amendment to Mortgage and environmental indemnity agreement in form and substance acceptable to Lender in its sole discretion, increasing the amount of the Mortgage and adding the property from the Mervyn’s Acquisition as additional security for the Loan. Borrower hereby agrees to pay any costs related to the foregoing amendment, including without limitation all recording costs, mortgage tax, title costs, and reasonable attorney’s fees; (iii) Borrower has caused the Title Company to issue an endorsement to the Title Policy, which endorsement insures that no claim exists which constitutes a cloud on the Lender’s secured position established by the insured Mortgage and that no matters exist subordinate to the Mortgage which are unacceptable to the Lender; accelerates the effective date of the Title Policy to the date of the requested Disbursement; and covers the amount of the requested Disbursement so that the total amount insured by the Title Policy equals the total amount disbursed by Lender under the terms of this Agreement, an endorsement to the Title Policy to add the property described in the Mervyn’s Acquisition, and any other endorsement to Title Policy that the Lender deems necessary to protect its security interest (or at the option of the Lender, confirmation from the Title Agent that all requirements for the issuance of such an endorsement have been satisfied and confirmation that the Title Insurer will issue such an endorsement within a specified time acceptable to the Lender). -16- (iv) Evidence that all conditions set forth in Section 6.5 below shall have been met. (v) All conditions to the Initial Disbursement have been met, and the Initial Disbursement has been funded by Lender. (vi) Borrower has delivered to Lender an updated Certificate of Compliance, certifying among other things, the names of all tenants who have given their notice to terminate or not renew their existing lease. (vii) Borrower has delivered to Lender a certified current revised rent roll for the Project. (b) Prior to the funding of each Subsequent Draw, Borrower shall furnishthe following to Lender, all of which must be in form, substance and executionsatisfactory to Lender in its sole and absolute discretion: (i) Borrower has delivered to Lender an amendment to Mortgage in form and substance acceptable to Lender in its sole discretion, increasing the amount of the Mortgage. Borrower hereby agrees to pay any costs related to the foregoing amendment, including without limitation all recording costs, mortgage tax, title costs, and reasonable attorney’s fees; ii) An endorsement to the Title Policy, which endorsement insures that no claim exists which constitutes a cloud on the Lender’s secured position established by the insured Mortgage and that no matters exist subordinate to the Mortgage which are unacceptable to the Lender; accelerates the effective date of the Title Policy to the date of the requested Disbursement; and covers the amount of the requested Disbursement so that the total amount insured by the Title Policy equals the total amount disbursed by Lender under the terms of this Agreement (or at the option of the Lender, confirmation from the Title Agent that all requirements for the issuance of such an endorsement have been satisfied and confirmation that the Title Insurer will issue such an endorsement within a specified time acceptable to the Lender). (iii) If applicable, the lien waivers required pursuant to Section 6.2; lien waivers from contractors, subcontractors and suppliers shall be submitted prior to the next scheduled Disbursement. (iv) The Certificate for Payment required pursuant to Section 6.2 above. (v) Evidence that all Loan Proceeds disbursed to date have been applied to payment of costs of the Project (including, but not limited to, satisfactory waivers of mechanic’s and materialmen’s liens, affidavits, sworn statements and receipts for materials), if applicable. -17- (vi) Upon Lender’s request, evidence that any improvements to the Project are being constructed in accordance with applicable law. Lender shall have the right to require, at Borrower’s cost, any additional information to complete Lender’s analysis of each Disbursement request of Borrower. (vii) Borrower has delivered to Lender an updated Certificate of Compliance, certifying among other things, current compliance with Debt Service Coverage Ratio requirements and setting forth all tenants who have given their notice to terminate or not renew their existing lease. (viii) Borrower shall have delivered to Lender a fully executed copy of all Incremental New Leases which contain terms and conditions acceptable to Lender in Lender’s sole discretion. (ix) Borrower shall have delivered to Lender twelve (12) month proforma operating statements for the Project reflecting all Incremental New Leases. (x) Borrower shall have delivered to Lender a certified current revised rent roll for the Project. (xi) Borrower shall have delivered to Lender copies of paid invoices for improvements made to the Project or costs incurred, if any, related to Incremental New Leases. 6.5 Conditions to All Disbursements. No Disbursement of Loan Proceeds shallbe made by Lender to Borrower at any time unless: (a) All conditions precedent to that Disbursement have been satisfied,including without limitation, performance of all of Borrower’s obligations underthis Agreement and the Loan Documents which are to be performed prior to suchDisbursement. (b) The amount of Loan proceeds disbursed or to be disbursed does notexceed the lesser of (i) 65% of the purchase price of the Project, (ii) 65% ofthe appraised value of the Project, (iii) an amount such that the Debt ServiceCoverage Ratio for the Project does not exceed 1.25x (as determined pursuant tothe requirements for such disbursement). (c) No Default has occurred under this Agreement, or under any of the LoanDocuments, and no event, circumstance or condition has occurred or exists which,with the passage of time or the giving of notice, would constitute such aDefault. (d) No material litigation or proceedings are pending or threatened(including but not limited to, proceedings under Title 11 of the United StatesCode) against Borrower, the Land or the Project. (e) No material adverse change has occurred or is threatened with respectto the Project or the financial condition of Borrower. -18- (f) All representations and warranties made by Borrower to Lender hereinand otherwise in connection with this Loan continue to be accurate, and allstatements and representations made in the application for this Loan submittedto Lender continue to be accurate. (g) No uninsured damage to or destruction of the Project or any portionthereof shall have occurred. (h) If requested by Lender, Lender has received a satisfactory report fromLender’s Inspecting Agent, indicating that the items for which payment has beenrequested have been performed at or incorporated into the Project. The cost ofthis inspection shall be paid directly by Borrower. (i) The Loan is not in default and Borrower has complied with all of theterms and conditions of this Agreement. 6.6 Intentionally deleted. 6.7 Documents Required for Final Disbursement. The final Certificate forPayment for the final Disbursement shall be accompanied by the following, all ofwhich shall be strictly satisfactory to Lender in its sole and absolutediscretion: (a) Borrower shall have furnished Lender with current searches of allUniform Commercial Code financing statements filed with the Secretary of Stateof Oklahoma and/or the Recorder for Tulsa County, Oklahoma, against Borrower asdebtors, showing that no Uniform Commercial Code financing statements are filedor recorded against Borrower in which the collateral is described as personalproperty or fixtures located on the Project or used in connection with theProject. (b) An affidavit of the Borrower stating that each person providing anymaterial or performing any work in connection with the Project has been paid infull and that all withholding taxes have been paid. (c) Any permits, licenses, certificates of occupancy or other evidence ofcompliance with the requirements of any governmental authorities necessary forthe use of the Land. (d) If requested by Lender, a satisfactory final inspection report ofLender’s Inspecting Agent and a representative of the permanent lender if any,indicating that the Project has been fully completed in accordance, therequirements of this Agreement and the requirements of all New Leases. (e) Evidence that all insurance required under the terms of this Agreementis in full force and effect. (f) Such other items as may be required by Lender, including, withoutlimitation, evidence that the improvements have been completed to thesatisfaction of the Lender and in a manner sufficient to satisfy the terms ofany permanent loan commitment. -19- 6.10 Intentionally deleted. 6.11 Intentionally deleted. 6.12 Intentionally deleted. 6.13 Provisions Applicable to All Disbursements. (a) By execution of thisAgreement, Borrower authorizes Lender to make any Disbursement to the account toreceive such Disbursement, and the Borrower agrees that, in so doing, the Lenderis not acting as agent or trustee for the Borrower and the Lender will not beheld accountable for any such Disbursement made in good faith. (b) Each Certificate For Payment by the Borrower shall constitute anaffirmation that the warranties and representations contained in Article II ofthis Agreement remain true and correct and that no breach of the covenants ofBorrower contained in this Agreement has occurred, in each case as of the dateof the Disbursement, unless Lender is notified to the contrary prior to fundingof the requested Disbursement. (c) The Lender may apply amounts due hereunder to the satisfaction of theconditions hereof, and amounts so applied shall be part of the Loan and shall besecured by the Mortgage, evidenced by the Note, bear interest in accordance withthe Note and shall be due and payable in accordance with the provisions of theNote. ARTICLE VII FURTHER COVENANTS OF BORROWER —————————– 7.1 Construction of Project. Borrower agrees that any new improvements tothe Project will be constructed and fully equipped in a good and workmanlikemanner with materials of high quality, in accordance with applicable building,zoning, pollution control, and environmental protection and other laws andordinances and the New Leases. Borrower agrees that all materials contracted orpurchased for construction of new improvements to the Project and all laborhired or contracted for with respect to the Project and paid for with LoanProceeds will be used and employed solely on the Project and for no otherpurpose. 7.2 Intentionally deleted 7.3 Inspection by Lender. If requested by Lender, Borrower will cooperate(and will cause the contractors to cooperate) with Lender in arranging forinspections of the progress of the construction of new improvements to theProject by Lender’s Inspecting Agent, from time to time, and Borrower willcooperate (and will cause any managing agent to cooperate) with Lender inarranging for inspections, from time to time, of the Project by Lender and itsInspecting Agents. 7.4 Mechanics’ Liens. Borrower will not suffer or permit any mechanics’lien claims to be filed or otherwise asserted against the Project or any fundsdue any contractor, and will promptly bond or discharge the same if any claimsfor lien or any proceedings for the enforcement thereof are filed or commenced;provided, however, that Borrower shall have the right to contest in good faith -20-and with due diligence the validity of any such lien or claim upon furnishing tothe Title Agent such security or indemnity as it may require to induce the TitleAgent to issue its Title Policy or an endorsement thereto insuring against allsuch claims, liens or proceedings; and provided further that Lender will not berequired to make any further Disbursements of the Loan Proceeds unless (i) anymechanics’ lien claims shown by any title insurance commitments or interimbinders or certifications have been bonded against, released or insured againstby the Title Agent or (ii) Borrower shall have provided Lender with such othersecurity with respect to such claim as may be acceptable to Lender, in its solediscretion. In the event Borrower elects to bond any mechanic’s lien claim, suchbond shall be in an amount equal to at least one hundred twenty-five percent(125%) of such claim. 7.5 Settlement of Mechanics’ Lien Claims. If Borrower shall fail promptlyto bond or discharge any mechanics’ lien claim filed or otherwise asserted or tocontest any such claims and give security or indemnity in the manner provided insubsection 7.4 above, or, having commenced to contest the same, and having givensuch security or indemnity, shall thereafter fail to prosecute such contest ingood faith or with due diligence, or fail to maintain such indemnity or securityso required by the Title Agent for its full amount, or, upon adverse conclusionof any such contest, shall fail to cause any judgment or decree to be satisfiedand lien to be released, then, and in any such event, Lender may at its election(but shall not be required to), (i) procure the release and discharge of anysuch claim and any judgment or decree thereon, without inquiring into orinvestigating the amount, validity or enforceability of such lien or claim and(ii) effect any settlement or compromise of the same, or may furnish suchsecurity or indemnity to the Title Agent, and any amounts so expended by Lender,including premiums paid or security furnished in connection with the issuance ofany surety company bonds, shall be deemed to constitute disbursements of theLoan Proceeds hereunder (even if the total amount of disbursements would exceedthe face amount of the Note). 7.6 Intentionally deleted. 7.7 Renewal of Insurance. Borrower shall pay timely all premiums on allinsurance policies required under this Agreement from time to time; and when andas additional insurance is required from time to time during the term of theLoan and when and as any policies of insurance may expire, furnish to Lender,premiums prepaid, additional and renewal insurance policies in companies,coverage and amounts satisfactory to Lender, all in accordance with Section5.1(c). Notwithstanding this Section, in the event of Borrower’s default underthis Agreement or any of the Loan Documents, Lender shall have the right (butnot the obligation) to place and maintain insurance required to be placed andmaintained by Borrower hereunder and treat the amounts expended therefor asadditional disbursements of Loan Proceeds (even if the total amount ofdisbursements would exceed the face amount of the Note). 7.8 Proceedings to Enjoin or Prevent Operation. If any proceedings arefiled seeking to enjoin or otherwise prevent or declare unlawful the occupancy,maintenance or operation of the Project or any portion thereof, Borrower shallat its sole expense (i) cause such proceedings to be vigorously contested ingood faith and (ii) in the event of an adverse ruling or decision, prosecute allallowable appeals therefrom. Without limiting the generality of the foregoing,Borrower shall resist the entry or seek the stay of any temporary or permanentinjunction that may be entered and use its best efforts to bring about afavorable and speedy disposition of all such proceedings. -21- 7.9 Lender’s Action for Its Own Protection Only. The authority hereinconferred upon Lender, and any action taken by Lender, including, withoutlimitation, actions to inspect the Project, to procure waivers or swornstatements, and to approve contracts, will be exercised and taken by Lender andby Lender’s other advisors or representatives for their own protection only andmay not be relied upon by Borrower or any other person for any purposeswhatever. Neither Lender nor any other advisor or representative of Lender shallbe deemed to have assumed any responsibility to Borrower or any other personwith respect to any such action herein authorized or taken by Lender or anyother advisor or representative of Lender or with respect to the properconstruction of improvements on the Project, performance of contracts,subcontracts or purchase orders by any contractor, subcontractor or materialsupplier, or prevention of mechanics’ liens from being claimed or assertedagainst any of the Project. Any review, investigation or inspection conducted byLender, or any other architectural or engineering consultants retained by Lenderor any agent or representative of Lender in order to verify independentlyBorrower’s satisfaction of any conditions precedent to Loan disbursements underthis Agreement, Borrower’s performance of any of the covenants, agreements andobligations of Borrower under this Agreement, or the validity of anyrepresentations and warranties made by Borrower hereunder (regardless of whetheror not the party conducting such review, investigation or inspection should havediscovered that any of such conditions precedent were not satisfied or that anysuch covenants, agreements or obligations were not performed or that any suchrepresentations or warranties were not true), shall not affect (or constitute awaiver by Lender of) (i) any of Borrower’s representations and warranties underthis Agreement or Lender’s reliance thereon or (ii) Lender’s reliance upon anycertifications of Borrower or the Architect required under this Agreement or anyother facts, information or reports furnished Lender by Borrower hereunder. 7.10 Furnishing Information. (a) Within 90 days of the end of each calendaryear, Borrower shall deliver or cause to be delivered to Lender financialstatements for Borrower prepared by an accountant and within 30 days followingthe filing of the same, annual federal income tax returns for Borrower. Any suchfinancial statements for Borrower shall be of review quality or on a formprovided by Lender and certified as true and correct by Borrower. (b) Within 30 days following the end of each quarter and prior to anyDisbursement, Borrower shall deliver to Lender current rent rolls for theProject, which shall include information on the amount of units rented, therental under each lease; and the term of each lease, as well as any otherrelated information as may be requested by Lender. All such rent rolls shall becertified as true and correct by Borrower. (c) Within 30 days following the end of each quarter except that Borrowershall have 45 days following the fourth quarter, Borrower shall deliver toLender annual cash flow and operating statements for the Project showing actualsources and uses of cash during the preceding twelve (12) months. All suchstatements shall be certified as true and correct by Borrower. -22- (d) Within 45 days following the end of each fiscal year, Borrower shalldeliver to Lender a proforma operating budget for the Project. (e) Within 30 days following the end of each quarter, Borrower shalldeliver historical tenant sales reports (as available). (f) Within 30 days following the end of each quarter and prior to anyDisbursement, Borrower shall deliver to Lender a certified certificate ofcompliance, substantially in the form attached hereto as Exhibit B, certifying,among other things, current compliance with Debt Service Coverage Ratiorequirements and setting forth all tenants who have given their notice toterminate or not renew their existing lease (the “Certificate of Compliance”). (g) Additionally, Borrower will: (i) promptly supply Lender with such information concerning its affairs and property relating to the development and operation of the Project, including but not limited to monthly management reports, as Lender may request from time to time hereafter; (ii) promptly notify Lender of any condition or event which constitutes (or which upon the giving of notice or lapse of time or both would constitute) a breach or event of default of any term, condition, warranty, representation or provision of this Agreement or of any of the Loan Documents; (iii) promptly notify Lender of any “material adverse financial change” in its respective financial conditions, and maintain a standard and modern system of accounting in accordance with generally accepted accounting principles; (iv) promptly notify Lender of any “materially adverse financial change” in connection with the operation of the Project; (v) upon reasonable notice from Lender, at any time whatever during regular business hours permit Lender or any of its agents or representatives to have access to and examine all of its books and records regarding the development and operation of the Project; and (vi) permit Lender to copy and make abstracts from any and all of said books and records. 7.11 Documents of Further Assurance. Borrower shall, from time to time,upon Lender’s request, execute, deliver, record and furnish such documents asLender may reasonably deem necessary or desirable to (i) perfect and maintainperfected as valid liens upon the Project, the liens granted by Borrower toLender under the Mortgage and the assignments and other security interests underthe other Loan Documents as contemplated by this Agreement, (ii) correct anyerrors of a typographical nature which may be contained in any of the LoanDocuments, and (iii) consummate fully the transaction contemplated under thisAgreement. -23- 7.12 Intentionally deleted. 7.13 Operation of Project. As long as any portion of the Loan remainsoutstanding, the Project shall be operated in a first class manner as acommercial retail property. 7.14 Management Agents’ and Brokers’ Contracts. Borrower shall not enterinto, any new management contract or materially modify, or amend any managementcontracts for the Project, without the prior written approval of Lender whichapproval shall not unreasonably be withheld, except as specifically permittedpursuant to that certain Assignment of Management Agreement executed inconjunction herewith. 7.15 Furnishing Notices. Borrower shall provide Lender with copies of allnotices with respect to any non compliance or default pertaining to the Projector any part thereof received by Borrower (or its agents or representatives) fromany federal, state or local governmental official, body, board or department,within three (3) business days after such notice is received. 7.16 Intentionally deleted. 7.17 No Additional Debt; No Assignment. As more particularly provided inSection 9.2, Borrower shall not consent or agree to any lien, mortgage, securityinterest, encumbrance, or sale and leaseback transaction affecting the Land. 7.18 Hold Disbursements in Trust. Borrower will pay all costs, expenses andfees relating to the equipping, fixturing, use and operation of the Project. 7.19 Indemnification. Borrower hereby indemnifies Lender and agrees todefend Lender and hold Lender harmless from and against all claims, injuries,losses, costs, damages, liabilities and expenses (including attorneys’ fees andconsequential damages) of any and every kind to any persons or property byreason of (i) the construction or other work contemplated herein (except byreason of the negligence or willful misconduct of Lender), (ii) the operation ormaintenance of the Project (except by reason of the negligence or willfulmisconduct of Lender), (iii) any other action or inaction by, or matter which isthe responsibility of Borrower (except by reason of the gross negligence orwillful misconduct of Lender), or (iv) the breach of any representation orobligation of Borrower hereunder. 7.20 Prohibition Against Cash Distributions and Application of Net CashFlow to Other Expenditures. In no event shall Borrower make any disbursementsfrom rental or other cash flow from the Land and the Project to any party duringany month until the installment due under the Note has been reserved orallocated for such month. 7.21 Insurance Reporting Requirements. Borrower shall promptly notify theinsurance carrier or agent therefor (with a copy of such notification beingprovided to Lender) if there is any increase in hazard relating to the Project,or transfer of ownership. 7.22 Compliance With Laws. Borrower shall comply with all applicablerequirements of any governmental authority having jurisdiction. In no eventshall Borrower consent to or cause any zoning change on the Project or anyportion thereof (including any variance, plan approval, rezoning, ormodification of any zoning commitment) without Lender’s prior written consent. -24- 7.23 Alterations. Without the prior written consent of Lender, Borrowershall not make any material alterations to the Project, if the costs of suchalterations will exceed $3,000,000.00. 7.24 Lost Note. Borrower shall, if the Note is mutilated, destroyed, lostor stolen, deliver to Lender, in substitution therefor, a new promissory notecontaining the same terms and conditions as the Note with a notation thereon ofthe unpaid principal accrued and unpaid interest. 7.25 Regulated Materials. Borrower shall comply with any and all laws,regulations or orders with respect to the discharge and removal of RegulatedMaterials, shall pay immediately when due the costs of removal of any suchRegulated Materials, and shall keep the Project free of any lien imposedpursuant to such laws, regulations or orders. In the event Borrower fails to doso, after notice to Borrower and the expiration of the earlier of (i) applicablecure periods hereunder or (ii) the cure period permitted under applicable law,regulation or order, Lender may either declare this Agreement to be in defaultor cause the Project to be freed from the Regulated Materials with the cost ofthe removal added to the indebtedness evidenced by the Note and secured by theMortgage (regardless of whether such indebtedness then increases the outstandingbalance of the Note to an amount in excess of the face amount thereof). Borrowerfurther agrees that Borrower shall not release or dispose of any RegulatedMaterials at the Project without the express prior approval of Lender and anysuch release or disposal will be in compliance with all applicable laws andregulations and conditions, if any, established by Lender, including, withoutlimitation, those set forth in Section 6 of the Mortgage. Lender shall have theright at any time to conduct an environmental audit of the Project forreasonable cause, at Borrower’s sole cost and expense, and Borrower shallcooperate in the conduct of such environmental audit. Borrower shall give Lenderand its agents and its employees access to the Project to inspect and test theProject and to remove Regulated Materials. Borrower hereby indemnifies Lenderand agrees to defend Lender and hold Lender harmless from and against allclaims, injuries, losses, costs, damages, liabilities and expenses (includingattorneys’ fees and consequential damages) by reason of any claim in connectionwith any Regulated Materials which were present at the Project during or priorto Borrower’s ownership of the Project. The foregoing indemnification shall beincluded within the indemnity agreement referred to in clause(n) of Article ivhereof, and shall survive repayment of the Note. 7.26 Asbestos. Without limiting the generality of Section 7.25 above,Borrower shall not install nor permit to be installed in the Project asbestos orany substance containing asbestos. If Borrower shall fail to comply with thissection, Lender may declare this Agreement to be in default and/or do whateveris necessary to eliminate said substances from the Project or otherwise complywith the applicable law, regulation, or order and the costs thereof shall beadded to the indebtedness evidenced by the Note and secured by the Mortgage. 7.27 Additional Appraisals. Borrower hereby covenants and agrees thatLender may, in its sole discretion, require annually an updated Appraisal forthe Project, at Borrower’s expense. Notwithstanding he foregoing, in no eventshall Lender require Borrower to provide more than two (2) additional Appraisalsduring the term of the Loan. -25- 7.28 Minimum Debt Service Coverage Ratio. Borrower hereby covenants andagrees that the Project will maintain a minimum Debt Service Coverage Ratioduring the term of the Loan of 1.25x (the “DSCR Requirement”), measuredquarterly. For purposes of compliance with this Section 7.28, during the 12months immediately following the Mervyn’s Acquisition, all costs, income anddebt service related to the Mervyn’s Acquisition will be excluded from suchcalculation. Beginning 12 months following the Mervyn’s Acquisition, all DebtService Coverage Ratio calculations shall include the entire Project, includingall income, costs and debt service related to the Mervyn’s Acquisition. UponBorrower’s achievement of the DSCR Requirement in any quarter beginning with thetwelve month anniversary following the Mervyn’s Acquisition, Lender will releasethe funds from the Mervyn’s Collateral Account to Borrower. For purposes of compliance with this Section 7.28, during the 12 monthsimmediately following a Subsequent Draw, all calculations of Debt ServiceCoverage Ratio which include an Incremental New Lease shall include a proformaannualized number for the income, costs and expenses of any Incremental NewLease that has been in effect for less than 12 months. Borrower hereby covenants and agrees that Borrower must evidence compliancewith the DSCR Requirement prior to Draw B or any Subsequent Draw. 7.28.1 Failure to Maintain required Debt Service Coverage Ratio. In theevent that Borrower fails to maintain the minimum Debt Service Coverage Ratiopursuant to Section 7.28, Borrower shall have a period of Six (6) months to curesuch covenant violation. In the event that Borrower does not achieve the DSCR Requirement within six(6) months of the covenant violation, Borrower shall establish with Lender acash collateral reserve account (the “DSC Cash Collateral Reserve”). The amountthe DSC Cash Collateral Reserve shall be calculated by Lender as follows: Required NOI minus actual NOI “Required NOI” shall mean current Debt Service times 1.25The DSC Cash Collateral reserve shall be held by Lender as additional securityfor the Loan until such time as Borrower achieves the DSCR Requirement usingactual NOI. For any quarter in which Borrower fails to achieve the DSCRRequirement, Borrower shall adjust the amount of the DSC Cash Collateral Reserveaccordingly, to insure that such amount when added to the actual NOI would besufficient to achieve the DSCR Requirement. Upon Borrower’s achievement of theDSCR Requirement based on actual NOI, Lender shall release the funds from theDSC Cash Collateral reserve to Borrower. Notwithstanding anything to the contrary contained herein, in the eventthat the Debt Service Coverage Ratio for the Project falls below 1.05x, Borrowershall within three (3) days of receiving notice from Lender, repay the loan inthe aggregate amount of all Subsequent Draws outstanding and shall establish theDSC Cash Collateral Reserve as calculated above. Lender shall not be obligatedto make any Subsequent Draws until Borrower achieves the DSCR Requirement fortwo consecutive quarters. Upon achieving the DSCR Requirement for two -26-consecutive quarters, Borrower may redraw portions of the Loan repaid pursuantto this section subject to the conditions for Subsequent Draws set forth inSection 3.3(c). 7.29 Equity: Borrower shall maintain at all times cash equity invested inthe Project of not less than the greater of (i) 35% of the total cost of theProject, or (ii) $20,405,000. 7.30 New Leases with any tenant for space in excess of 10,000 square shallbe subject to Lender’s approval which approval shall not be unreasonablywithheld or delayed. Lender approval shall not be required for any new leaseswith tenants for 10,000 square feet of space or less if such new leases are: (i)written substantially in accordance with the standard form of lease which hasbeen approved by Lender (subject to any commercially reasonable changes made inthe course of negotiations with the applicable tenant), (ii) not be to anAffiliate of Borrower (iii) be on commercially reasonable terms at rental ratescomparable to existing local market rates for similar properties, (iii) providethat such lease is subordinate to the Mortgage and that the lessee will attornto Lender and any purchaser at a foreclosure sale and (iv) not contain any termswhich would materially adversely affect Lender’s rights under the LoanDocuments. Whenever Lender’s approval or consent is required for any new lease orleasing action, Borrower shall have the right to submit a term sheet of suchtransaction to Lender for Lender’s approval, such approval not to beunreasonably withheld, conditioned or delayed. Any such term sheet submitted toLender shall set forth all material terms of the proposed transaction including,without limitation, identity of tenant, square footage, term, rent, rentcredits, abatements, work allowances and tenant improvements to be constructedby Borrower. Lender shall use good faith efforts to respond within ten (10)Business Days after Lender’s receipt of Borrower’s written request for approvalor consent of such term sheet. If Lender fails to respond to such request withinten (10) Business Days, and Borrower sends a second request containing a legendin bold letters stating that Lender’s failure to respond within five (5)Business Days shall be deemed consent or approval, Lender shall be deemed tohave approved or consented to such term sheet if Lender fails to respond to suchsecond written request before the expiration of such five (5) Business Dayperiod. ARTICLE VIII CASUALTIES AND CONDEMNATION ————————— 8.1 Notice. In case of any material damage or destruction, taking, orcondemnation of the Project, or any part thereof, or any interest therein orright accruing thereto, Borrower shall promptly give to Lender written noticegenerally describing the nature and extent of such damage, destruction or takingwhich has resulted or which may result therefrom. So long as Borrower is not indefault, Borrower may adjust, settle and compromise any such insurance policy orany proposed condemnation award, but in any event, no final adjustment,compromise or settlement of any insurance claim or condemnation award thatexceeds $3,000,000.00 shall be entered into without the prior written approvalof Lender as to such settlement, adjustment or compromise thereof. Lender mayappear in any such proceedings and negotiations and Borrower shall promptlydeliver to Lender copies of all notices and pleadings in any such proceedings.Borrower will in good faith, file and prosecute all claims necessary for anyaward or payment resulting from such damage, destruction or taking. All costsand expenses incurred by Lender in exercising its rights under this sectionshall constitute indebtedness secured by the Mortgage. -27- 8.2 Application of Insurance Proceeds and Condemnation Awards. (a) Uponoccurrence of any loss or damage to all or any portion of the Project resultingfrom fire, vandalism, malicious mischief or any other casualty or physical harm(a “Casualty”) or any exercise of the power of condemnation or eminent domain (a”Taking”), Lender may elect to collect, retain and apply as a Loan prepaymentall proceeds (the “Proceeds”) of any insurance policies collected or claimed asa result of such Casualty and all awards resulting from such Taking (“Awards”)after deduction of all expenses of collection and settlement, includingattorney’s and adjusters’ fees and charges. To the extent that the proceeds orawards exceed $3,000,000.00. Subject to the provisions of Section 8.1 above,Borrower hereby authorizes Lender, at Lender’s option, to collect any lossesunder any insurance with respect to the Project which is kept, or caused to bekept, by Borrower, and hereby irrevocably appoints Lender as itsattorney-in-fact, coupled with an interest, for such purposes. Any Proceeds orAwards remaining after payment in full of the Loan and all other sums due Lenderhereunder shall be paid by Lender to Borrower without any allowance for interestthereon. Notwithstanding anything to the contrary contained herein, in the eventthat (i) no Event of Default has occurred and is continuing hereunder, (ii) theProceeds or Awards, as the case may be, are sufficient to rebuild the Projector, if they are insufficient, as determined by Lender in its sole discretion,Borrower provides Lender with additional funds necessary, as determined inLender’s sole discretion (iii) after completion of the reconstruction, the loanto value ratio of the Project is satisfactory to Lender, as determined inLender’s sole discretion, then the Proceeds or Awards, as the case may be,shall, at Borrower’s request, be applied towards reconstruction of the Project,which funds shall be disbursed pursuant to the disbursement provisions set forthherein. (b) In the event Lender does not apply the Proceeds or Awards to prepaymentof the Loan as provided for in Section 8.2(a) above or in the event suchProceeds or Awards, if applied, do not fully discharge the Loan, Borrower will: (i) Proceed with diligence to make settlement (which shall be subject to the approval of Lender) with insurers or with condemning authorities and cause the Proceeds or Awards to be deposited with Lender, unless Lender shall elect to exercise its right under the Mortgage to make such settlement without the consent of Borrower. (ii) In the event of any unreasonable delay in making settlement with insurers or effecting collection of Proceeds or Awards, Borrower shall deposit with Lender the full amount required to meet the obligations due under the Loan, disregarding such Proceeds or Awards. (iii) In the event the Proceeds or Award deposited with Lender are insufficient to complete reconstruction of the Project, Borrower shall deposit with Lender additional funds as necessary, as determined by Lender in its sole discretion. (iv) Promptly proceed with construction and restoration of the Project, including the repair of all such loss or damage. -28-All Proceeds, Awards and funds deposited by Borrower hereunder shall first befully disbursed before disbursement of any further Loan Proceeds. Borrower shallnot be entitled to any payment of or credit for interest on such Proceeds,Awards and funds. In the event of deposit by Borrower of the full amountrequired to complete reconstruction of the Project, as aforesaid, upon thesubsequent receipt of Proceeds or Awards, such Proceeds or Awards, as and whenreceived, may be collected and retained by Borrower. (c) Lender shall not be obligated to see to the proper application of anyof the Proceeds nor shall the amount so released or used be deemed a payment onany indebtedness evidenced by the Note or secured by any of the Loan Documents.In the event of foreclosure of the Mortgage or other transfer of title in lieuof foreclosure, all right, title and interest of Lender, in and to any insurancepolicies then in force shall pass to the purchaser or Lender, as the case maybe. (d) All proceeds of use and occupancy or rental value insurance shall bepaid to Lender for the purposes of paying, to the extent available andnecessary, in the following order: (i) insurance premiums payable with respectto any insurance required to be carried by Borrower hereunder; (ii) taxes,assessments and charges payable by Borrower under any of the Loan Documents; and(iii) all amounts payable on the Note, together with any and all other amountsevidenced or secured by any of the Loan Documents, and to the extent that suchinsurance proceeds are available to pay the items listed in clauses(i), (ii) and(iii), Lender shall pay such items for the account of Borrower. All suchinsurance proceeds not deemed necessary, in Lender’s sole opinion, to pay theabove items shall be paid over to Borrower. (e) Upon failure on the part of Borrower promptly to commence or continuethe repair or restoration of the Project after settlement of any claim with theinsurer, Lender shall have the right to apply such Proceeds to the payment ofany indebtedness secured by the Loan Documents, and resort to such otherremedies available to Lender hereunder; provided, however, that nothing hereincontained shall prevent Lender from applying at any time the whole or any partof such insurance proceeds to the curing of any Event of Default hereunder. ARTICLE IX ASSIGNMENTS, SALE AND ENCUMBRANCES ———————————- 9.1 Lender’s Right to Assign. Lender may assign, negotiate, pledge orotherwise hypothecate this Agreement or any of its rights and securityhereunder, including the Note, and any of the other Loan Documents to any bank,participant or financial institution, and in case of such assignment, Borrowerwill accord full recognition thereto, and hereby agree that all rights andremedies of Lender in connection with the interest so assigned shall beenforceable against Borrower by such bank, participant or financial institutionwith the same force and effect and to the same extent as the same would havebeen enforceable by Lender but for such assignment. 9.2 Prohibition of Assignments and Encumbrances by Borrower. Borrower shallnot, without the prior written consent of Lender, create, effect, consent to,attempt, contract for, agree to make, suffer or permit any conveyance, sale,assignment, transfer, lien, pledge, mortgage, security interest, encumbrance oralienation (“Prohibited Transfer”) of all or any portion of, or any interest in,the Land, or the Project, whether effected directly, indirectly, voluntarily, -29-involuntarily, or by operation of law or otherwise; provided, however, that theforegoing shall not apply to (i) liens securing the Loan, (ii) the lien ofcurrent taxes and assessments not in default, (iii) leases permitted pursuant tothis Agreement, and (iv) the Permitted Exceptions. Notwithstanding the foregoing, the transfer of 100% of the GlimcherProperties Limited Partnership’s interest in Borrower to Tulsa Promenade REIT,LLC shall be a permitted transfer. Also the transfer of up to 50% of theinterest of any member in Tulsa Promenade REIT, LLC or in OG Retail Holding Co.,LLC shall be permitted without Lender consent. ARTICLE X DEFAULTS BY BORROWER ——————– The occurrence of any one or more of the following shall constitute an”Event of Default” hereunder, and any Event of Default which may occur hereundershall constitute a default under each of the other Loan Documents: (a) A failure by Borrower to make any payment on the Note when and as thesame becomes due, which failure continues for a period of fifteen (15) days. (b) Any failure of Borrower for a period of thirty (30) days after writtennotice from Lender to Borrower, to observe or perform any of the covenants(other than payment of the Note or payments required hereunder), contained inthis Agreement or any of the other Loan Documents; provided, that such thirty(30)-day period shall be extended to permit the cure of any default which by itsnature is not reasonably susceptible to cure within said thirty (30)-day period,so long as Borrower promptly within said thirty (30)-day period commences itsefforts to cure and thereafter diligently pursues the same to completion. (c) Any failure by Borrower to repay the Loan or any portion thereof asrequired herein. (d) The failure of Borrower to fund the DSC Cash Collateral Reserve asrequired herein. (e) Intentionally deleted. (f) The occurrence of a Prohibited Transfer. (g) The existence of any collusion, fraud, dishonesty or bad faith by orwith the acquiescence of Borrower, which in any way relates to or affects theLoan or the Project. (h) If, at any time, any material representation, statement, report orcertificate made now or hereafter by Borrower is not true and correct, or if atany time any material statement or representation made in the construction loanapplication or any supporting materials submitted to Lender for this Loan is nottrue and correct. (i) If all or a substantial part of the assets of Borrower are attached,seized, subjected to a writ or distress warrant, or is levied upon, and suchattachment, seizure, writ, warrant or levy is not vacated within thirty (30)days thereafter. -30- (j) If Borrower is enjoined or restrained or in any way prevented by courtorder from performing any of its obligations hereunder or under the other LoanDocuments or conducting all or a substantial part of its business affairs. (k) If Borrower: (i) Shall file a voluntary petition in bankruptcy or for arrangement, reorganization or other relief under any chapter of the federal bankruptcy code of any similar law, state or federal, now or hereafter in effect; (ii) Shall file an answer or other pleading in any proceedings admitting insolvency, bankruptcy, or inability to pay its debts as they mature; (iii) Within sixty (60) days after the filing against it of any involuntary proceedings under the federal bankruptcy code or similar law, state or federal, now or hereafter in effect, such proceedings shall not have been vacated; (iv) Any order appointing a receiver, trustee or liquidator for it or for all or a major part of its property or the Land shall not be vacated within sixty (60) days following entry thereof; (v) Shall be adjudicated a bankrupt; (vi) Shall make an assignment for the benefit of creditors or shall admit in writing its inability to pay its debts generally as they become due or shall consent to the appointment of a receiver or trustee or liquidator of all or the major part of its property, or the Land. (l) If Borrower fails to maintain the equity required pursuant to Section7.29, and such covenant violation is not cured within 7 days. (m) If Borrower defaults in the due performance under any other LoanDocuments with Lender beyond any applicable grace period contained therein,including, without limitation, all agreements between Lender and the Borrowerwhich give rise to Hedging Obligations. ARTICLE XI LENDER’S REMEDIES UPON DEFAULT —————————— 11.1 Remedies Conferred Upon Lender. Upon the occurrence of any Event ofDefault, Lender, in addition to all remedies conferred upon Lender by law and bythe terms of the Note, the Mortgage and the other Loan Documents, may pursue anyone or more of the following remedies concurrently or successively, it being theintent hereof that none of such remedies shall be to the exclusion of anyothers: -31- (a) Withhold further disbursement of Loan Proceeds and terminate any or allof its obligations to Borrower. (b) Declare the Note to be due and payable forthwith, without presentment,demand, protest or other notice of any kind, all of which are hereby expresslywaived. (c) In addition to any rights of set-off that Lender may have underapplicable law, Lender may, without notice of any kind to Borrower, appropriateand apply to the payment of the Note or of any sums due under this Agreement,any and all balances, deposits, credits, accounts, certificates of deposit,instruments or money of Borrower then or thereafter in the possession of Lender,including but not limited to the Mervyn’s Collateral Account, and the DSC CashCollateral Account. (d) Exercise or pursue any other remedy or cause of action permitted at lawor at equity or under this Agreement or any other Loan Document, including butnot limited to foreclosure of the Mortgage and enforcement of all LoanDocuments. 11.2 Right of Lender to Make Advances to Cure Defaults. In the event thatBorrower shall fail to perform any of its covenants or agreements herein or inany of the other Loan Documents contained, Lender may (but shall not be requiredto) perform any of such covenants and agreements, and any amounts so expended byLender shall be deemed advanced by Lender under an obligation to do soregardless of the identity of the person or persons to whom said funds aredisbursed. Loan Proceeds advanced by Lender in the exercise of its judgment thatthe same are needed to complete the Project to protect its security for the Loanare obligatory advances hereunder and shall constitute additional indebtednesspayable on demand which is evidenced and secured by the Loan Documents. 11.3 Attorneys’ Fees. Borrower will pay Lender’s reasonable attorneys’ feesand costs in connection with the administration and enforcement of thisAgreement; without limiting the generality of the foregoing, if at any time ortimes hereafter the Lender employs counsel for advice or other representationwith respect to any matter concerning Borrower, this Agreement, the Land or theLoan Documents or to protect, collect, lease, sell, take possession of orliquidate all or any portion of the Land, or to attempt to enforce or protectany security interest or lien or other right in any of the premises or under anyof the Loan Documents, or to enforce any rights of the Lender or obligations ofBorrower or any other person, firm or corporation which may be obligated toLender by virtue of this Agreement or under any of the Loan Documents or anyother agreement, instrument or document, heretofore or hereafter delivered toLender in furtherance hereof, then in any such event, all of the attorneys’reasonable fees arising from such services, and any expenses, costs and chargesrelating thereto, shall constitute an additional indebtedness owing by Borrowerto Lender payable on demand, and evidenced and secured by the Loan Documents. 11.4 No Waiver. No failure by Lender to exercise, or delay by Lender inexercising, any right, power or privilege hereunder shall operate as a waiverthereof, nor shall any single or partial exercise of any right, power orprivilege hereunder preclude any other or further exercise thereof, or theexercise of any other right, power or privilege. The rights and remediesprovided in this Agreement and in the Loan Documents are cumulative and notexclusive of each other or of any right or remedy provided by law or equity. No -32-notice to or demand on Borrower in any case shall, in itself entitle Borrower toany other or further notice or demand in similar or other circumstances orconstitute a waiver of the rights of Lender to any other or further action inany circumstances without notice or demand. 11.5 Availability of Remedies. All of the remedies set forth herein and/orprovided by law or equity shall be equally available to Lender, and the choiceby Lender of one (1) such alternative over another shall not be subject toquestion or challenge by Borrower or any other person, nor shall any such choicebe asserted as a defense, set-off, or failure to mitigate damages in any action,proceeding, or counteraction by Lender to recover or seeking any other remedyunder this Loan Agreement or any of the Loan Documents, nor shall such choicepreclude Lender from subsequently electing to exercise a different remedy,except as otherwise provided by law. The parties have agreed to the alternativeremedies hereof specified in part because they recognize that the choice ofremedies in the event of a failure hereunder will necessarily be and shouldproperly be a matter of business judgment, which the passage of time and eventsmay or may not prove to have been the best choice to maximize recovery by Lenderat the lowest cost to Borrower. It is the intention of the parties that suchchoice by Lender be given conclusive effect regardless of such subsequentdevelopments. At any sale of the security or collateral for the Loan or any partthereof whether by foreclosure or otherwise, Lender may in its discretionpurchase all or any part of such collateral so sold or offered for sale for itsown account and may apply against the balance due Lender pursuant to the termsof the Note the amount bid therefore. ARTICLE XII MISCELLANEOUS ————- 12.1 Time Is of the Essence. Lender and Borrower agree that time is of theessence of all of their covenants under this Agreement. 12.2 Prior Agreements. This Agreement and the other Loan Documents, and anyother documents or instruments executed pursuant thereto or contemplatedthereby, shall represent the entire, integrated agreement between the partieshereto with respect to construction and equipping of the Project not yet inplace, and shall supersede all prior negotiations, representations, oragreements pertaining thereto, either oral or written, which shall survive theexecution of this Agreement by Borrower and Lender, and the occurrence of theLoan Closing, and shall be included in the term “Loan Documents.” This Agreementand any provision hereof shall not be modified, amended, waived or discharged inany manner other than by a written amendment executed by all parties to thisAgreement. An action on the part of the Lender waiving a specific provision orrequirement herein contained, shall not be construed to be a waiver of futureapplication of such provision or requirement or a waiver of any other provisionor requirement hereunder. 12.3 Disclaimer by Lender. Lender shall not be liable to any subcontractor,supplier, laborer, architect, engineer or any other party for services performedor materials supplied in connection with construction of improvements to theProject. Lender shall not be liable for any debts or claims accruing in favor ofany such parties against Borrower or against the Land. The Borrower shall not beconsidered an agent of Lender for any purposes, and Lender is not a venture -33-partner with Borrower. Lender shall not be deemed to be in privity of contractwith any contractor, subcontractor or provider of services on or to the Land,nor shall any payment of funds directly to a contractor, subcontractor orprovider of services on or to the Land, be deemed to create any third partybeneficiary status or recognition of same by Lender unless and until Lenderexpressly assumes such status in writing. Approvals granted by Lender for anymatters covered under this Agreement shall be narrowly construed to cover onlythe parties and facts identified in any written approval or if not in writingsuch approvals shall be solely for the benefit of Borrower. 12.4 Indemnification. To the fullest extent permitted by law, Borrowerhereby agrees to protect, indemnify, defend and save harmless, Lender and itsdirectors, officers, agents and employees from and against any and allliability, expense or damage of any kind or nature and from any suits, claims,or demands, including legal fees and expenses, arising out of this Agreement orin connection herewith, except to the extent such suit, claim or damage iscaused by any act, omission or willful misconduct of Lender, its directors,officers, agents and authorized employees. This obligation on the part ofBorrower shall survive the closing of the Loan, the repayment thereof and anycancellation of the Loan Agreement. 12.5 Captions. The captions and headings of various articles and sectionsof this Agreement and exhibits pertaining hereto are for convenience only andnot to be considered as defining or limiting in any way the scope or intent ofthe provisions hereof. 12.6 Inconsistent Terms and Partial Invalidity. In the event of anyinconsistency among the terms hereof (including incorporated terms), or betweensuch terms and the terms of any other Loan Document, this Loan Agreement shallbe controlling. If any provision of this Agreement, or any paragraph, sentence,clause, phrase, or word, or the application thereof, in any circumstances, isadjudicated by a court of competent jurisdiction to be invalid, the validity ofthe remainder of this Agreement shall be construed as if such invalid part werenever included herein. 12.7 Gender and Number. Any word herein which is expressed in the masculineor neuter gender shall be deemed to include the masculine, feminine and neutergenders. Any word herein which is expressed in the singular or plural numbershall be deemed, whenever appropriate in the context, to include the singularand plural. 12.8 Definitions Included in Amendments. Definitions contained in thisAgreement which identify documents, including, without limitation, the LoanDocuments, shall be deemed to include all amendments and supplements to suchdocuments from the date hereof, and all future amendments and supplementsthereto entered into from time to time to satisfy the requirements of thisAgreement or otherwise with the consent of the Lender. Reference to thisAgreement contained in any of the foregoing documents shall be deemed to includeall amendments and supplements to this Agreement. 12.9 WAIVER OF JURY TRIAL. BORROWER AND LENDER EACH WAIVE ANY RIGHT TO ATRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDERTHIS AGREEMENT OR RELATING THERETO OR ARISING FROM THE BANKING RELATIONSHIPWHICH IS THE SUBJECT OF THIS AGREEMENT AND AGREES THAT ANY SUCH ACTION ORPROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. -34- 12.10 Notices. Except for any notice required under applicable law to begiven in another manner, any notice, demand, request or other communicationwhich any party hereto may be required or may desire to give hereunder shall bein writing and shall be deemed to have been properly given (i) if hand deliveredor if sent by telecopy, effective upon receipt or (ii) if delivered by overnightcourier service, effective on the day following delivery to such courierservice, or (iii) if mailed by United States registered or certified mail,postage prepaid, return receipt requested, effective two (2) days after depositin the United States mails; addressed in each case as follows: If to Borrower: Tulsa Promenade, LLC c/o Glimcher Properties Limited Partnership 150 East Gay Street Columbus, Ohio 43215 Attn: General Counsel If to Lender: Charter One Bank, N.A. 1215 Superior Avenue Cleveland, Ohio 44114or at such other address or to such other addressee as the party to be servedwith notice may have furnished in writing to the party seeking or desiring toserve notice as a place for the service of notice. 12.11 Office of Foreign Asset Control (OFAC) and Patriot Act 326 (PA 326)verification of customers. a. PAC326. To help the government fight the funding of terrorism andmoney laundering activities, Federal law requires all financial institutions toobtain, verify and record information that identifies each customer who opens anaccount (including the extension of credit to a customer). Therefore, all newand existing customers are subject to the identity verification requirements.When you open an account with any entity within the Lender’s family ofcompanies, we require the following information for the Business: Business Name,Business Address, Business TIN and Business Phone Number. For the BusinessRepresentative (person signing for the Business), we require the followinginformation: Individual’s Name, Individual’s Address, Identification Informationand Date of Birth. b. OFAC. In addition, all financial institutions must check allBorrowers; Collateral Owners; Guarantors; Co-signors; Receiving and SendingParties; Members, Managing Members, and Trustees; and Limited Partners, ManagingMembers and Beneficiaries holding interest; against the US Department ofTreasury’s list for Specially Designated Nationals and Blocked Persons. -35- c. Both the PAC 326 and OFAC verifications must be completed prior toClosing. 14.11 Governing Law. This Agreement has been negotiated, executed anddelivered at Cleveland, Ohio, and shall be construed and enforced in accordancewith the laws of the State of Ohio, without reference to the choice of law orconflicts of law principles of that State. 14.12 Nonrecourse Except as otherwise set forth in this section, Lender’srecourse under this Agreement, the Note, the Mortgage and the Loan Documentsshall be limited to and satisfied from the Project and the proceeds thereof, therents and all other income arising therefrom, the other assets of Borrowerarising out of the Project which are given as collateral for the Note, and anyother collateral given in writing to Lender as security for repayment of theNote, including, but not limited to the Mervyn’s Collateral Account and DSC CashCollateral Account (all of the foregoing are collectively referred to as the(“Loan Collateral”). Notwithstanding the preceding sentence: (a) Lender may, in accordance with the terms of this Agreement, theNote, the Mortgage or any Loan Document: (i) foreclose the lien of the Mortgage,(ii) take appropriate action to enforce this Agreement, the Note, the Mortgageand any Loan Documents to realize upon and/or protect the Loan Collateral, (iii)name Borrower as a party defendant in any action brought under this Agreement,the Note, the Mortgage or any Loan Document so long as the exercise of anyremedy is limited to the Loan Collateral, (iv) pursue all of its rights andremedies against any guarantor or surety or master tenant, whether or not suchguarantor or surety or master tenant is a partner, member or other owner ofBorrower, (v) pursue all of its rights and remedies against Borrower under thatcertain Indemnity Agreement of even date herewith; (b)Lender may seek damages or other monetary relief to the extent ofactual monetary loss, or any other remedy at law or in equity against Borrowerby reason of or in connection with (i) the failure of Borrower to pay to Lender,upon demand, all rents, issues and profits of the Project to which Lender isentitled pursuant to this Agreement, the Note, the Mortgage or the LoanDocuments following an Event of Default, (ii) any waste of the Project or anywillful act or omission by Borrower which damages or materially reduces thevalue of the Project, (iii) the failure to apply all rents, issues and profitsfrom the Project to the payment of operating expenses, real estate taxes,insurance, capital repair items, and the payment of sums due and owing underthis Agreement, the Note, the Mortgage or the Loan Documents prior to any otherexpenditure or distribution by Borrower, (iv) the failure to account for and toturn over security deposits (and interest required by law or agreement to bepaid thereon) or prepaid rents following the occurrence of an Event of Defaultunder this Agreement, the Note, the Mortgage or any Loan Documents, (v) thefailure to timely pay real estate taxes or any regular or special assessmentsaffecting the Project, (vi) the failure to account for and to turn over realestate tax accruals following the occurrence of an Event of Default under thisAgreement, the Note, the Mortgage or any Loan Documents, (vii) the failure tomaintain casualty and liability insurance as required under the Mortgage or the -36-Loan Documents or to apply insurance proceeds or condemnation awards relating tothe Project or other collateral in the manner required under applicableprovisions of this Agreement, the Note, the Mortgage or any Loan Documents(viii) costs and expenses, including, without limitation, attorney’s fees andtransfer taxes, incurred by Lender in connection with the enforcement of thisAgreement, the Note, the Mortgage or the Loan Documents or a deed-in-lieu offoreclosure; (c) Borrower shall become personally liable for payment of theindebtedness evidenced by this Agreement, the Note and performance of all otherobligations of Borrower under this Agreement, the Note, the Mortgage and theLoan Documents upon the occurrence of any of the following: (i) fraud or willfulmisrepresentation of a material fact by Borrower, any members of Borrower, inconnection with the Note, the Mortgage or the Loan Documents or any request forany action or consent by Lender, (ii) a transfer of any interest in the Borroweror all or any portion of the Project or any interest therein in violation of theterms of this Agreement, the Note, the Mortgage or the Loan Documents, or (iii)the incurrence by Borrower of any indebtedness in violation of the terms of thisAgreement, the Note, the Mortgage or any Loan Document (whether secured orunsecured, direct or contingent), other than unsecured debt or routine tradepayables incurred in the ordinary course of business in connection with theoperation of the Project. In addition, Borrower shall be responsible for any costs and expensesincurred by Lender in connection with the collection of any amounts for whichBorrower is personally liable under this section, including attorneys’ fees andexpenses, court costs, filing fees, and all other costs and expenses incurred inconnection therewith. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK — SIGNATURE PAGE TO IMMEDIATELY FOLLOW] -37- IN WITNESS WHEREOF, the parties have caused these presents to be executedthe day and year first above written. BORROWER: TULSA PROMENADE, LLC, a Delaware limited liability company By: GLIMCHER PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership, its sole member By: GLIMCHER PROPERTIES CORPORATION, a Delaware corporation, its general partner By:__________________________________ George A. Schmidt Executive Vice President LENDER: CHARTER ONE BANK, N.A. By:_______________________________________ Name:_____________________________________ Title:____________________________________ -38- EXHIBIT A (Legal Description EXHIBIT B Certificate of ComplianceCharter One Bank, N.A.________________________________________________Re: Loan Agreement dated as of ________ (as amended, modified, supplemented, restated, or renewed, from time to time, the “Agreement”), between TULSA PROMENADE, LLC, (the “Borrower”), and CHARTER ONE BANK, N.A. (“Lender”).Reference is made to the Agreement. Capitalized terms used in this Certificate(including schedules and other attachments hereto, this “Certificate”) withoutdefinition have the meanings specified in the Agreement.Pursuant to applicable provisions of the Agreement, the undersigned, herebycertifies to the Lender that the information furnished in the attachedschedules, including, without limitation, each of the calculations listed beloware true, correct and complete in all material respects as of the last day ofthe fiscal periods subject to the financial statements and associated covenantsbeing delivered to the Lender pursuant to the Agreement together with thisCertificate (such statements the “Financial Statements” and the periods coveredthereby the “reporting period”) and for such reporting periods.The undersigned hereby further certifies to the Lender that:1. Compliance with Financial Covenants. As shown below, the Borrower is in full compliance with the financial covenants contained in the Agreement. A. Covenant: Debt Service Coverage Ratio of not less than 1.25: 1.0 tested quarterly and prior to any Disbursement, the calculation of which is set forth in Schedule A attached hereto. Debt Service Coverage of ______ : 1.0 for period ending ________, 200___. B. Covenant: Draw amount of no more than 65% of Incremental Value and Proforma Debt Service Coverage Ratio of not less than 1.25: 1.0 prior to any Subsequent Draw, the calculation of which is set forth in Schedule B attached hereto. 65% of Incremental Value: $___________ Debt Service Coverage of ______ : 1.0 C. Covenant: Borrower Equity in the Project: The greater of (i) 35% of the total cost of the Project, or (ii) $20,405,000. Compliance? (Yes or No) ____________________2. Tenants Giving Notice. The following tenants have given Borrower or its managing agent notice of it intent to terminate or not renew it’s existing lease. Borrower has no knowledge of any other tenant that intends to give such notice. (i)_________________________________________________ (ii) _______________________________________________ (iii) ______________________________________________3. Rent Roll. The undersigned hereby certifies that the rent roll attached hereto as Schedule C is accurate as of the date hereof, and accurately reflects the status of all leases and their expiration dates.4. Review of Condition. The undersigned has reviewed the terms of the Agreement, including, but not limited to, the representations and warranties of the Borrower set forth in the Agreement and the covenants of the Borrower set forth in the Agreement, and has made, or caused to be made under his or her supervision, a review in reasonable detail of the transactions and condition of the Borrower through the reporting periods.5. Representations and Warranties. To the undersigned’s actual knowledge, the representations and warranties of the Borrower contained in the Loan Documents, including those contained in the Agreement, are true and accurate in all material respects as of the date hereof and were true and accurate in all material respects at all times during the reporting period except as expressly noted on Schedule D hereto.6. Covenants. To the undersigned’s actual knowledge, during the reporting period, the Borrower observed and performed all of the respective covenants and other agreements under the Agreement and the Loan Documents, and satisfied each of the conditions contained therein to be observed, performed or satisfied by the Borrower, except as expressly noted on Schedule D hereto.7. No Event of Default. To the undersigned’s actual knowledge, no Event of Default exists as of the date hereof or existed at any time during the reporting period, except as expressly noted on Schedule D hereto. -2- IN WITNESS WHEREOF, this Certificate is executed by the undersigned this____ day of __________, 200__. BORROWER: TULSA PROMENADE, LLC, a Delaware limited liability company By: TULSA PROMENADE REIT, LLC, a Delaware limited liability company, its sole member By: OG RETAIL HOLDING CO., LLC, a Delaware limited liability company, its managing member By: GLIMCHER PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership, its administering member By: GLIMCHER PROPERTIES CORPORATION, a Delaware corporation, its sole member By:__________________________________ George A. Schmidt Executive Vice President -3- Schedule A Debt Service Coverage Ratio Quarterly Compliance Tulsa Promenade Quarterly Covenant Compliance Tested as of xx/xx/xx (Trailing Twelve Month $000)Debt Service Coverage:- ——————————————————————————– TTM Base Rents $ Annualized Rents from new Leases in effect 1.25x then $0; otherwise, DSC Reserve equals ((2)*1.25) – (1)) $________ ========= Schedule B Subsequent Draw Compliance Worksheet Tulsa Promenade Supplemental Draw Request as of xx/xx/xx TTM Compliance? _________ (Y /N)

I. Incremental Value of Acceptable New Leases: Annualized Incremental Base Rents $_________Plus: Annualized Incremental Reimbursable Expenses $_________Less: Annualized Rental Income from Expiring Leases within 90 days $_________ Annualized Incremental Operating Expenses (if applicable) $_________ Incremental Management Fee (per appraisal) $_________ Allowance for Incremental Capital Expenditures (per appraisal) $_________ Adjusted Incremental NOI $_________ Divided by: Prevailing Cap Rate (per Loan Agreement) $_________ INCREMENTAL VALUE Subsequent Draw Amount @ 65% Incremental Value $_________II. Pro-Forma Debt Service Coverage: Net Operating Income (per Covenant Compliance worksheet) $_________Plus: Adjusted Incremental NOI $_________ (1) PRO-FORMA ANNUALIZED NOIIII. Projected Debt Service: Current Outstanding Loan Balance $_________Plus: Subsequent Draw Amount $_________ Proposed Aggregate Balance $_________ (2) Projected Debt Service $_________ (1) / (2) DSCR (must > 1.25x) _________

Schedule C Rent Roll Schedule D Violations of Covenants or Warranties