REVOLVING CREDIT AGREEMENT
Dated: As of December 18, 1997
Between
TANGER PROPERTIES LIMITED PARTNERSHIP
("Borrower")
and
FLEET NATIONAL BANK
("Lender")
$25,000,000.00
TABLE OF CONTENTS
1. BACKGROUND
1.1 Defined Terms
1.2 Borrower
1.3 Use of Proceeds
1.4 Guaranties and Indemnities
1.5 Facility
2. ESTABLISHMENT OF FACILITY.
2.1 Facility
2.2 Advances
2.2.1 Time of Advance.
2.2.2 Certifications.
2.3 Maximum Facility
2.4 Interest Rate and Payment Terms
2.5 Fees
2.5.1 Commitment Fee
2.5.2 Facility Fee
3. LOAN DOCUMENTS
4. CONTINUING AUTHORITY OF AUTHORIZED REPRESENTATIVES
5. CONDITIONS PRECEDENT
5.1 Satisfactory Loan Documents
5.2 No Material Change
5.3 Warranties and Representations Accurate
5.4 Financials
5.5 Hazardous Waste, Hazardous Materials and Toxic
Substances
5.6 Organizational Documents and Entity Agreements
5.7 Votes, Consents and Authorizations
5.8 Legal and Other Opinions
5.9 Leasing Matters
5.10 No Event of Default
6. WARRANTIES AND REPRESENTATIONS
6.1 Financial Information
6.2 No Violations
6.3 No Litigation
6.4 Compliance With Legal Requirements and Environmental
Legal Requirements
6.5 Required Licenses and Permits
6.6 Use of Proceeds
6.7 Entity Matters
6.7.1 Organization
6.7.2 Ownership and Taxpayer Identification Numbers
6.7.3 Authorization
6.8 Valid and Binding
6.9 Deferred Compensation and ERISA
6.10 Conditions Satisfied
6.11 No Material Change; No Event of Default
-i-
6.12 No Broker or Finder
6.13 Background Information and Certificates
6.14 Guarantor's Warranties and Representations
7. COVENANTS
7.1 Notices
7.2 Financial Statements and Reports
7.2.1 Annual Statements
7.2.2 Periodic Statements
7.2.3 Data Requested
7.3 Payment of Taxes and Other Obligations
7.4 Conduct of Business; Compliance With Law
7.5 Insurance
7.6 Indemnification Against Payment of Brokers' Fees
7.7 Limitations On Certain Transactions
7.7.1 No Merger or Acquisition
7.7.2 Guarantor's Status as a REIT
7.7.3 Limitations on Investments
7.7.4 Limitations on Conduct
7.7.5 Limitations on Acquisitions
7.7.6 Consent to Certain Actions
7.8 Deposit of Proceeds; Other Bank Accounts
7.9 Place for Records: Inspection
7.10 Costs and Expenses
7.11 Indemnification
7.12 Maintenance of Borrower's properties
7.13 Acquisitions and Dispositions of Borrower's assets
8. FINANCIAL COVENANTS
8.1 Fair Market Minimum Net Worth
8.2 Total Liabilities to Total Adjusted Asset Value
8.3 Secured Indebtedness to Total Adjusted Asset Value
8.4 EBITDA to Debt Service
8.5 Total Outstanding Unsecured Indebtedness to Adjusted
Unencumbered Asset Value
8.6 Unencumbered EBITDA to Total Outstanding Unsecured
Indebtedness
8.7 Distributions
8.8 Projects Under Development to Total Adjusted Asset
Value
8.9 Undeveloped Land Holdings to Total Adjusted Asset Value
8.10 Total Variable Rate Indebtedness to Total Adjusted
Asset Value
9. EVENTS OF DEFAULT
9.1 Events of Default
9.1.1 Generally
9.1.2 Note and Other Loan Documents
9.1.3 Other Indebtedness
9.1.4 Financial Status and Insolvency
9.1.5 Breach of Representation or Warranty
9.1.6 Guarantor Default
9.2 Grace Periods and Notice
ii
9.2.1 No Notice or Grace Period
9.2.2 Nonpayment of Interest
9.2.3 Other Monetary Defaults
9.2.4 Nonmonetary Defaults Capable of Cure
9.3 Certain Lender Remedies
9.3.1 Accelerate Debt
9.3.2 Pursue Remedies
9.3.3 Written Waivers
10. ADDITIONAL REMEDIES OF LENDER
10.1 Remedies
10.2 Reimbursement
10.3 Power of Attorney
11. GENERAL PROVISIONS
11.1 Notices
11.2 Limitations on Assignment
11.3 Further Assurances
11.4 Parties Bound
11.5 Waivers, Extensions and Releases
11.6 Governing Law; Consent to Jurisdiction; Mutual Waiver
of Jury Trial
11.6.1 Substantial Relationship
11.6.2 Place of Delivery
11.6.3 Governing Law
11.6.4 Consent to Jurisdiction
11.6.5 Jury Trial Waiver
11.7 Survival
11.8 Cumulative Rights
11.9 Claims Against Lender
11.9.1 Borrower Must Notify
11.9.2 Remedies
11.9.3 Limitations
11.10 Obligations Absolute
11.11 Table of Contents, Title and Headings
11.12 Counterparts
11.13 Satisfaction of Commitment
11.14 Right to Sell
11.15 Right to Participate
11.16 Time Of the Essence
11.17 No Oral Change
11.18 Monthly Statements
11.19 Exculpation
iii
Signatures
Exhibit A - Definitions
Exhibit B - Ownership Interests and Taxpayer
Identification Numbers
Exhibit C - Authorized Representatives
Exhibit D - Certificate of Compliance
iv
REVOLVING CREDIT AGREEMENT
This is a Revolving Credit Agreement (this "Revolving Credit
Agreement") made and entered into as of the 18th day of December, 1997, by and
between TANGER PROPERTIES LIMITED PARTNERSHIP, a North Carolina limited
partnership having an address at 1400 West Northwood Street, Greensboro, North
Carolina 27408 ("Borrower") and FLEET NATIONAL BANK, a national banking
association having an address at 75 State Street, Boston, Massachusetts, 02109
("Lender").
WITNESSETH:
1. BACKGROUND.
1.1 Defined Terms. Capitalized terms used in this Revolving Credit
Agreement are defined either in Exhibit A, or in specific sections of this
Revolving Credit Agreement, or in another Loan Document, as referenced in
Exhibit A
1.2 Borrower. Borrower is a limited partnership organized under the
laws of the State of North Carolina of which the sole general partner is Tanger
Factory Outlet Centers, Inc., a corporation organized under the laws of the
State of North Carolina.
1.3 Use of Proceeds. Borrower has applied to Lender to establish a
revolving line of credit facility (the "Facility") in the maximum amount of
$25,000,000.00, the proceeds of which are to be used for the development or
acquisition of additional properties by the Borrower, the expansion and
improvement of any properties of the Borrower, supporting working capital needs,
the repayment of any other indebtedness of the Borrower, and to pay costs and
expenses incident to closing the Facility.
1.4 Guaranties and Indemnities. As an inducement to Lender to establish
the Facility, Tanger Factory Outlet Centers, Inc., having an address a 1400 West
Northwood Street, Greensboro, North Carolina (the "Guarantor") has agreed to
furnish a certain guaranty.
1.5 Facility. Subject to all of the terms, conditions and provisions of
this Revolving Credit Agreement, and of the agreements and instruments referred
to herein, Lender agrees to establish the Facility and Borrower agrees to accept
and repay proceeds outstanding under the Facility.
-1-
2. ESTABLISHMENT OF FACILITY.
2.1 Facility. The Lender hereby establishes the Facility in the
Borrower's favor pursuant to which the Lender agrees to lend to the Borrower
until the Termination Date, and the Borrower agrees to borrow from the Lender,
from time to time, loans and advances (the "Advances"), provided that the
aggregate principal amount of the Facility at any one time outstanding hereunder
shall not exceed the Maximum Commitment Amount.
2.2 Advances. The Borrower may request in writing Advances under the
Facility.
2.2.1 Time of Advance. At the time of each Advance under the
Facility, the Borrower shall immediately become indebted to the Lender
for the amount thereof. Each Advance made by the Lender may, at the
Lender's option, be (i) credited by the Lender to any deposit account
of the Borrower; (ii) paid to the Borrower; or (iii) applied to any
Obligation of the Borrower to the Lender (each of the foregoing of
which may be by check, draft, or other written order or by bank wire or
other transfer).
2.2.2 Certifications. Upon requesting an Advance under the
Facility, the Borrower shall be deemed to have certified that as of the
date of such request, the following representations are each true and
correct:
(i) to the best of the Borrower's knowledge, there has
been no material adverse change in the Borrower's or
Guarantor's financial condition from the most recent financial
information furnished the Lender pursuant to this Revolving
Credit Agreement; and
(ii) to the best of the Borrower's knowledge, the
Borrower and the Guarantor are in compliance with, and have
not breached any of, the covenants contained in this Revolving
Credit Agreement; and
(iii) no event has occurred nor failed to occur which
occurrence or failure is, or with the passage of time or
giving of notice (or both), would constitute, an Event of
Default (as described herein), whether or not the Lender has
exercised any of its rights upon such occurrence or failure.
2.3 Maximum Facility. The maximum availability under the Facility shall
be $25,000,000.00 (the "Maximum Commitment Amount").
2.4 Interest Rate and Payment Terms. The Facility shall be payable as
to interest and principal in accordance with the provisions of a certain
Promissory Note dated even date herewith
-2-
(the "Note"). The Note also provides for interest at a Default Rate (as defined
in the Note), Late Charges (as defined in the Note) and prepayment rights and
fees.
2.5 Fees.
2.5.1 Commitment Fee. Borrower shall pay a loan commitment fee
in the amount of One Hundred Twenty Five Thousand Dollars
($125,000.00), representing one half of one percent (0.50%) of the
Maximum Commitment Amount, of which Thirty One Thousand Two Hundred and
Fifty Dollars ($31,250.00) has been paid previously, (ii) Thirty One
Thousand Two Hundred and Fifty Dollars ($31,250.00) has been paid as of
the date hereof, and (iii) the balance of which shall be payable on the
earlier of (x) the date one (1) year from the date hereof or (y) the
Termination Date; provided however, the Commitment Fee shall be
entirely earned as of the date hereof.
2.5.2 Facility Fee. Borrower shall pay annually, as
compensation for the Lender's maintenance of sufficient funds available
for such purpose, in arrears, a facility fee in an amount equal to
twelve and one half (12.5) basis points computed on the average undrawn
portion of the Facility. The facility fee shall be calculated as of the
18th day of December of each year; provided however, as of the
Termination Date, the facility fee shall be calculated in its entirety
for that portion of the year expired as of the Termination Date. The
facility fee shall be due and payable on or before twenty (20) days
after Borrower's receipt of a statement from the Lender as to the
amount of such facility fee. The Lender agrees to provide the Borrower
with a worksheet detailing each calculation of the average undrawn
portion of the Facility.
3. LOAN DOCUMENTS. The obligations outstanding under the Facility
together with interest thereon and all other charges and amounts payable by, and
all other obligations of, Borrower to Lender, whenever incurred, direct or
indirect, absolute or contingent, arising under the Facility or the Loan
Documents ("Obligations") shall be made, evidenced, administered, and governed
by all of the terms, conditions and provisions of the "Loan Documents", each as
the same may be hereafter modified or amended, consisting of: (i)this Revolving
Credit Agreement; (ii) the Note; (iii) the Guaranty from Guarantor; and (iv) any
other documents, instruments, or agreements executed to further evidence or
secure the Facility. Each of the Loan Documents listed in items (i) through
(iv), inclusive is dated of even date herewith.
4. CONTINUING AUTHORITY OF AUTHORIZED REPRESENTATIVES. Lender is
authorized to rely upon the continuing authority of the persons, officers,
signatories or agents hereafter designated
-3-
("Authorized Representatives") to bind Borrower with respect to all matters
pertaining to establishment of the Facility and the Loan Documents including,
but not limited to, requests for Advances and the selection of interest rates.
Such authorization may be changed only upon written notice to Lender accompanied
by evidence, reasonably satisfactory to Lender, of the authority of the person
giving such notice and such notice shall be effective not sooner than five (5)
Business Days following receipt thereof by Lender. The present Authorized
Representatives are listed on Exhibit C. Lender shall have a right of approval,
not to be unreasonably withheld or delayed, over the identity of the Authorized
Representatives so as to assure Lender that each Authorized Representative is a
responsible and senior official of Borrower.
5. CONDITIONS PRECEDENT. It shall be a condition precedent of Lender's
obligation to establish the Facility and make each future Advance thereunder
that each of the following conditions precedent be satisfied in full (as
determined by Lender in its discretion, which discretion shall be exercised in
good faith), unless specifically waived in writing by Lender at or prior to
closing and at or prior to each Advance under the Facility:
5.1 Satisfactory Loan Documents. Each of the Loan Documents shall be
satisfactory in form, content and manner of execution and delivery to Lender and
its counsel.
5.2 No Material Change. No material adverse change shall have occurred
in the financial condition, business, affairs, operations or control of Borrower
or Guarantor, since the date of their respective financial statements most
recently delivered to Lender: as of the date hereof, September 30, 1997 for
Borrower; September 30, 1997 for Guarantor.
5.3 Warranties and Representations Accurate. All warranties and
representations made by or on behalf of any of Borrower, or Guarantor, to Lender
shall be true, accurate and complete in all material respects and shall not omit
any material fact necessary to make the same not misleading.
5.4 Financials. Lender shall have received and approved financial
statements from Borrower and Guarantor complying with the standards set forth in
Section 7.2.
5.5 Hazardous Waste, Hazardous Materials and Toxic Substances. The
Lender shall have received, and in its sole discretion approved, satisfactory
reports from acceptable, qualified professionals prepared in accordance with
Lender's protocols indicating the acceptability of the environmental risk for
such of the Borrower's properties, as requested by the Lender.
-4-
5.6 Organizational Documents and Entity Agreements. Lender shall have
received and approved (i) the partnership agreement and organizational documents
of the Borrower and (ii) the corporate organizational documents of the
Guarantor.
5.7 Votes, Consents and Authorizations. Lender shall have received and
approved certified copies of all partnership, entity and corporate votes,
consents and authorizations as may be reasonably required to evidence authority
for: (i) establishing the Facility and the transactions contemplated hereby;
(ii) providing continuing authorization to designated persons to deal in all
respects on behalf of Borrower; and (iii) the execution of all Loan Documents.
5.8 Legal and Other Opinions. Lender shall have received and approved
legal opinion letters from counsel representing Borrower and Guarantor which
meet Lender's legal opinion requirements previously furnished to Borrower and
Guarantor.
5.9 Leasing Matters. To the extent requested, Lender shall have
received and approved current rent rolls for the Borrower's properties.
5.10 No Event of Default. There shall not be any Event of Default under
any of the Loan Documents.
6. WARRANTIES AND REPRESENTATIONS. Borrower warrants and represents to
Lender for the express purpose of inducing Lender to enter into this Revolving
Credit Agreement, to make Advances under the Facility, and to otherwise complete
all of the transactions contemplated hereby, that as of the date of this
Revolving Credit Agreement, upon the date the initial Advance is funded and at
all times thereafter until the Facility has been repaid and all Obligations to
Lender have been satisfied as follows:
6.1 Financial Information. True, accurate and complete financial
statements of Borrower and Guarantor have been delivered to Lender and the same
fairly present the financial condition of Borrower and Guarantor as of the dates
thereof and no material and adverse change has occurred in such financial
condition since the dates thereof. All financial statements of Borrower and
Guarantor hereafter furnished to Lender shall be true, accurate and complete and
shall fairly present the financial condition of Borrower and Guarantor as of the
dates thereof.
6.2 No Violations. The establishment of the Facility and the subsequent
payment and performance of the obligations evidenced by the Loan Documents shall
not constitute a violation of, or conflict with, any law, order, regulation,
contract, agreement or organizational document to which Borrower or
-5-
Guarantor is a party or by which Borrower or Guarantor, or the property thereof,
may be bound.
6.3 No Litigation. There is no material litigation now pending, or to
the best of Borrower's knowledge threatened, against Borrower or Guarantor which
if adversely decided could materially impair the ability of Borrower or
Guarantor to pay and perform its obligations hereunder or under the other Loan
Documents.
6.4 Compliance With Legal Requirements and Environmental Legal
Requirements. The use, operation, ownership, and development of the Borrower's
properties comply with, and shall continue to comply with, all material Legal
Requirements and Environmental Legal Requirements, and any and all covenants,
conditions, restrictions or other matters which materially affect the Borrower's
properties.
6.5 Required Licenses and Permits. All Licenses and Permits which are
reasonably required in order to use, operate, own and develop the Borrower's
properties in the usual course of business have been duly and properly obtained,
and will remain in full force and effect, and have been, and shall be complied
with, in all material respects.
6.6 Use of Proceeds. The Advances under the Facility shall be used
solely and exclusively to provide funds to support development or acquisition of
additional properties by the Borrower, the expansion and improvement of any
properties of the Borrower, supporting working capital needs, the repayment of
any other indebtedness of the Borrower, and to pay costs and expenses incident
to establishment of the Facility. No portion of the proceeds of the Facility
shall be used directly or indirectly, and whether immediately, incidentally or
ultimately (i) to purchase or carry any margin stock, or to extend credit to
others for the purpose thereof, or to repay or refund indebtedness previously
incurred for such purpose, or (ii) for any purpose which would violate or is
inconsistent with the provisions of regulations of the Board of Governors of the
Federal Reserve System including, without limitation, Regulations G, T, U and X
thereof.
6.7 Entity Matters.
6.7.1 Organization.
(i) Borrower. Borrower is a duly organized validly
existing limited partnership in good standing under the laws
of North Carolina, and is duly qualified in each jurisdiction
where the nature of its business is such that qualification is
required and has all requisite power and authority to conduct
its business
-6-
and to own its property, as now conducted or owned, and
as contemplated by this Revolving Credit Agreement.
(ii) Guarantor. Guarantor is a duly organized validly
existing corporation in good standing under the laws of North
Carolina, and is duly qualified in each jurisdiction where the
nature of its business is such that qualification is required
and has all requisite power and authority to conduct its
business, as now conducted, and as contemplated by this
Revolving Credit Agreement.
6.7.2 Ownership and Taxpayer Identification Numbers. All of
the general partners of Borrower, and a description of the ownership
interests of Borrower held by the same, are listed in Exhibit B. The
identity and ownership of any Guarantor which is not natural person is
accurately stated on Exhibit B. The taxpayer identification numbers of
Borrower and the Guarantor are accurately stated in Exhibit B.
6.7.3 Authorization. All required partnership and corporate
actions and proceedings have been duly taken so as to authorize the
execution and delivery by Borrower and, where applicable, Guarantor of
the Loan Documents.
6.8 Valid and Binding. Each of the Loan Documents constitute legal,
valid and binding obligations of Borrower and, where applicable, Guarantor, in
accordance with the respective terms thereof, subject to bankruptcy, insolvency
and similar laws of general application affecting the rights and remedies of
creditors and, with respect to the availability of the remedies of specific
enforcement, subject to the discretion of the court before which any proceeding
therefor may be brought.
6.9 Deferred Compensation and ERISA. Borrower does not have any
pension, profit sharing, stock option, insurance or other arrangement or plan
for employees covered by Title IV of the Employment Retirement Security Act of
1974, as now or hereafter amended ("ERISA") except as may be designated to
Lender in writing by Borrower from time to time ("ERISA Plan") and no
"Reportable Event" as defined in ERISA has occurred and is now continuing with
respect to any such ERISA Plan. The establishing of the Facility, the
performance by Borrower of its obligations under the Loan Documents and
Borrower's conducting of its operations do not and will not violate any
provisions of ERISA.
6.10 Conditions Satisfied. Assuming that Lender has approved all
matters requiring their approval, all of the conditions precedent to
establishing the Facility set forth in Section 5 have been satisfied.
-7-
6.11 No Material Change; No Event of Default. There has been no
material adverse change in the financial condition, business, affairs or control
of Borrower or Guarantor since the date of their respective last financial
statements most recently delivered to the Lender in accordance with the
requirements of Section 7.2 hereof. No Event of Default exists under any of the
Loan Documents. There is no Event of Default on the part of Borrower or
Guarantor under this Revolving Credit Agreement or any of the other Loan
Documents and to the best of the Borrower's knowledge, no event has occurred and
is continuing which could constitute an Event of Default under any Loan
Document. Borrower has filed all required federal, state and local tax returns
and has paid all taxes due pursuant to such returns or any assessments against
Borrower or the Borrower's assets.
6.12 No Broker or Finder. Neither Borrower, nor Guarantor, nor anyone
on behalf thereof, has dealt with any broker, finder or other person or entity
who or which may be entitled to a broker's or finder's fee, or other
compensation, payable by Lender in connection with establishing of the Facility.
6.13 Background Information and Certificates. All of the factual
information contained or referred to in Section 1 of this Revolving Credit
Agreement and in the Exhibits to this Revolving Credit Agreement or the other
Loan Documents, and in the certificates and opinions furnished to Lender by or
on behalf of Borrower in connection with the Facility, is true, accurate and
complete in all material respects, and omits no material fact necessary to make
the same not misleading.
6.14 Guarantor's Warranties and Representations. Borrower has no reason
to believe that any warranties or representations made in writing by Guarantor
to Lender are untrue, incomplete or misleading in any respect.
7. COVENANTS. Borrower covenants and agrees that from the date hereof
and so long as any Obligations remain outstanding hereunder, or there exists any
availability to make Advances under the Facility, as follows:
7.1 Notices. Borrower shall, with reasonable promptness, but in all
events within ten (10) days after it has actual knowledge thereof, notify Lender
in writing of the occurrence of any act, event or condition (i) which
constitutes an Event of Default under any of the Loan Documents or (ii) which
would constitute, solely with the passage of time or the giving of notice, an
Event of Default. Such notification shall include a written statement of any
remedial or curative actions which Borrower proposes to undertake to cure or
remedy such Event of Default.
-8-
7.2 Financial Statements and Reports. Borrower shall furnish or cause
to be furnished to Lender from time to time, the following financial statements
and reports and other information, all in form, manner of presentation and
substance acceptable to Lender:
7.2.1 Annual Statements. Within 120 days of the fiscal year
end of the Borrower and the Guarantor, audited consolidating financial
statements of Borrower and Guarantor prepared in accordance with GAAP,
or other recognized method of accounting acceptable to Lender,
consistently applied, by an independent, certified public accountant
acceptable to Lender, such financial statements to include and to be
supplemented by such detail and supporting data and schedules as Lender
may from time to time reasonably determine, including, without
limitation, consolidated financial statements consisting of a balance
sheet as of the end of the fiscal year, income statements, and
statements of cash flows for the fiscal year, setting forth in each
case in comparative form the corresponding figures for the previous
fiscal year, as reported in the Form 10-K of the Borrower and
Guarantor, which are required to be filed with the Securities and
Exchange Commission, all being certified by the General Partner of the
Borrower and the chief financial officer of the Guarantor;
7.2.2 Periodic Statements. Within 45 days following the end of
each fiscal quarter the following,
(i) Certified Internally Prepared Financial
Statements. For the Borrower and the Guarantor, internally
prepared financial statements consisting of the consolidated
and consolidating balance sheets, income statements, and
statement of cash flows for the quarter just ended, and for
the fiscal year through the quarter, as reported in the Form
10-Q of the Borrower and Guarantor, which are required to be
filed with the Securities and Exchange Commission, all
certified by the General Partner and the chief financial
officer of the Guarantor, as having been prepared in
accordance with GAAP consistently applied; and
(ii) Certificate of Compliance. Contemporaneously with
the delivery of the reports referred to in clause (i) above, a
certification by the general partner of Borrower and the chief
financial officer of the Guarantor (the "Certificate of
Compliance")(x) as to the status and compliance of the
financial covenants set forth in Section 8 below and (y) to
the Borrower's knowledge that there is not occurring an Event
of Default, which certification shall be in the form attached
hereto as Exhibit D.
-9-
7.2.3 Data Requested. Within a reasonable period of time and
from time to time, but no more frequently than quarterly unless an
Event of Default has occurred and is continuing, such other financial
data or information as Lender may reasonably request with respect to
the Borrower or the Guarantor, including, without limitation, the Form
8- K of the Borrower and Guarantor, which are required to be filed with
the Securities and Exchange Commission.
7.3 Payment of Taxes and Other Obligations. Borrower shall duly pay and
discharge, or cause to be paid and discharged, before the same shall become
overdue, all taxes, assessments and other governmental charges payable by it, or
with respect to any of the Borrower's properties.
7.4 Conduct of Business; Compliance With Law. Borrower shall own,
develop, operate and use its properties and conduct its affairs in a lawful
manner and in compliance with all Legal Requirements and Environmental Legal
Requirements applicable thereto and all provisions of ERISA to the extent that a
failure to do so would result in a material adverse effect in the conduct of the
Borrower's business or the ability of the Borrower to perform its obligations
hereunder.
7.5 Insurance. Borrower shall at all times maintain in full force and
effect the insurance coverages satisfactory to the Lender. All insurance
premiums shall be paid annually, in advance, and Lender shall be provided with
evidence of such prepayment of insurance premiums prior to closing and upon the
request of Lender. The Lender acknowledges that the insurance as of the date
hereof as reflected in the Certificate of Insurance provided by the Borrower is
satisfactory to the Lender.
7.6 Indemnification Against Payment of Brokers' Fees. Borrower agrees
to defend, indemnify and save harmless Lender from and against any and all
liabilities, damages, penalties, costs, and expenses, relating in any manner to
any brokerage or finder's fees in respect of establishing the Facility.
7.7 Limitations On Certain Transactions. Borrower and Guarantor agrees
to the following limitations:
7.7.1 No Merger or Acquisition. Neither the Borrower nor the
Guarantor shall dissolve or liquidate, nor, without notice to the
Lender, merge or consolidate with any other entity.
7.7.2 Guarantor's Status as a REIT. The Guarantor is and shall
continue to be in compliance with all requirements of law relative to
its status as a Real Estate Investment Trust ("REIT") (including
without limitation the Securities Act and the Securities Exchange Act,
and the applicable rules and regulations thereunder, state securities
laws and
-10-
"Blue Sky") applicable to it and its respective businesses, in each
case, where the failure to comply would have a material adverse effect
on the Guarantor's status a REIT. The Guarantor has made all filings
with and obtained all consents of the Securities and Exchange
Commission as required under the Securities Act and the Securities
Exchange Act in connection with the execution, delivery and performance
by the Guarantor of each of the Obligations incurred in connection with
the Loan Documents.
7.7.3 Limitations on Investments. Except for its interest in
the Borrower, Guarantor shall be prohibited from investing in any other
partnerships, corporations, limited liability companies or other
entities whatsoever.
7.7.4 Limitations on Conduct. Guarantor shall be prohibited
from engaging in, or conducting, any business whatsoever other than the
operations conducted in its capacity as general partner of the
Borrower.
7.7.5 Limitations on Acquisitions. Guarantor shall be
prohibited from purchasing or acquiring any assets whatsoever other
than those assets purchased or acquired in its capacity as general
partner of the Borrower.
7.7.6 Consent to Certain Actions. The Guarantor shall be
allowed to undertake any of the actions prohibited in Sections 7.7.3,
7.7.4 or 7.7.5, with the prior written consent of the Lender. In the
event that the Borrower requests any such consent in writing, if the
Lender does not within fifteen (15) Business Days of the Lender's
receipt of such written request, and all information reasonably
required in order to evaluate such request, provide either the Lender's
written consent or disapproval thereof, such consent shall be deemed to
have been granted by the Lender.
7.8 Deposit of Proceeds; Other Bank Accounts.
7.8.1 Borrower shall establish a demand (checking) account
with Lender. The following account(s) have been opened for the purpose
of creating a depository account for the Property: Account No.
________________ at Fleet National Bank in the name of Tanger
Properties Limited Partnership(the "Account").
7.8.2 Lender is hereby authorized, on or after the due date,
to charge the Account with the amount of all payments due under this
Revolving Credit Agreement, the Note or the other Loan Documents. The
failure of Lender to so charge such account shall not affect or limit
Borrower's obligation to make any required payment.
-11-
7.8.3 (i) If any payment is not made when due under any of the
Loan Documents, after giving regard to applicable grace periods, if
any, or (ii) if any Event of Default or other event which would entitle
Lender to accelerate the indebtedness under the Note; then, in any such
event, any deposits, balances or other sums credited by or due from
Lender in the Account, may to the fullest extent not prohibited by
applicable law at any time or from time to time, without regard to the
existence, sufficiency or adequacy of any other collateral, and without
notice or compliance with any other condition precedent now or
hereafter imposed by statute, rule of law or otherwise, all of which
are hereby waived, be set off, debited and appropriated, and applied by
Lender against any or all of Borrower's Obligations irrespective of
whether demand shall have been made and although such Obligations may
be unmatured, in such manner as Lender in its sole and absolute
discretion may determine. Within five (5) Business Days of making any
such set off, debit or appropriation and application with respect to
the Account, Lender agrees to notify Borrower thereof, provided the
failure to give such notice shall not affect the validity of such set
off, debit or appropriation and application.
7.9 Place for Records: Inspection. Borrower shall maintain business
records at the address specified at the beginning of this Revolving Credit
Agreement, as such address may be changed upon notice to the Lender. Upon notice
and at reasonable times during normal business hours Lender shall have the right
(through such agents or consultants as Lender may designate) to examine
Borrower's assets, including, without limitation, the Borrower's properties, and
make copies of and abstracts from Borrower's books of account, correspondence
and other records and to discuss its financial and other affairs with any of its
partners and any accountants hired by Borrower, it being agreed that Lender
shall use reasonable efforts to not divulge information obtained from such
examination to others except in connection with Legal Requirements and in
connection with administering the Facility, enforcing its rights and remedies
under the Loan Documents and in the conduct, operation and regulation of its
banking and lending business (which may include, without limitation, the
transfer of the Facility or of participation interests therein). Any transferee
of the Facility or any holder of a participation interest in the Facility shall
be entitled to deal with such information in the same manner and in connection
with any subsequent transfer of its interest in the Facility or of further
participation interests therein.
7.10 Costs and Expenses. Borrower shall pay all fees, costs and
expenses reasonably incurred by Lender in connection with the preparation,
negotiation, execution, and delivery of the Loan Documents and any subsequent
amendments thereto, and the enforcement of Lender's rights under the Loan
Documents,
-12-
including, without limitation, reasonable legal fees and disbursements.
7.11 Indemnification. Borrower shall at all times, both before and
after repayment of the Obligations, at its sole cost and expense defend,
indemnify, exonerate and save harmless Lender and all those claiming by, through
or under Lender ("Indemnified Party") against and from all damages, losses,
liabilities, obligations, penalties, claims, litigation, demands, defenses,
judgments, suits, proceedings, costs, disbursements or expenses of any kind
whatsoever, including, without limitation, reasonable attorneys' fees and
experts, fees and disbursements, which may at any time be imposed upon, incurred
by or asserted or awarded against the Indemnified Party and arising from or out
of:
(i) any Hazardous Materials or any violation of any
Environmental Legal Requirements applicable to the Borrower's
properties, the Borrower, or both;
(ii) any liability for damage to person or property
arising out of any violation of any Legal Requirement
applicable to the Borrower's properties, Borrower, or both; or
(iii) any act, omission, negligence or conduct at the
Borrower's properties, or arising or claimed to have arisen,
out of any act, omission, negligence or conduct of Borrower or
any contractor, sub contractor, tenant, occupant or invitee
thereof, which is in any way related to the Borrower's
properties.
Notwithstanding the foregoing, an Indemnified Party shall not be entitled to
indemnification in respect of claims arising from acts of its own gross
negligence or willful misconduct to the extent that such gross negligence or
willful misconduct is determined by the final judgment of a court of competent
jurisdiction, not subject to further appeal, in proceedings to which such
Indemnified Party is a proper party.
7.12 Maintenance of Borrower's properties. Borrower shall protect and
maintain, or cause to be maintained, in a manner consistent with Borrower's
current maintenance standards at all times, the buildings and structures now
standing or hereafter erected on the Borrower's properties, and any additions
and improvements thereto, and all personal property now or hereafter situated
therein, and the utility services, the parking areas and access roads, and all
building fixtures and equipment and articles of personal property now or
hereafter acquired and used in connection with the operation of the Borrower's
properties.
7.13 Acquisitions and Dispositions of Borrower's assets.
Borrower shall provide Lender with written notice of all
-13-
dispositions or acquisitions of Projects within fifteen (15)days of said
disposition or acquisition.
7.14 Replacement Documentation. Upon receipt of an affidavit of an
officer of Lender as to the loss, theft, destruction or mutilation of the Note
or any other security document which is not of public record, and, in the case
of any such loss, theft, destruction or mutilation, upon surrender and
cancellation of such Note or other security document, Borrower will issue, in
lieu thereof, a replacement Note or other security document in the same
principal amount thereof and otherwise of like tenor.
8. FINANCIAL COVENANTS. Each of the financial covenants set forth
hereunder shall be calculated as of the Calculation Date, and shall be
determined in a manner acceptable to Lender.
8.1 Fair Market Minimum Net Worth. Borrower shall maintain a Fair
Market Minimum Net Worth equal to or in excess of $175,000,000.00.
8.2 Total Liabilities to Total Adjusted Asset Value. Borrower shall not
permit the ratio of Total Liabilities to Total Adjusted Asset Value to exceed
sixty (60%) percent.
8.3 Secured Indebtedness to Total Adjusted Asset Value. Borrower shall
not permit the ratio of Secured Indebtedness to Total Adjusted Asset Value to
exceed forty (40%) percent.
8.4 EBITDA to Debt Service. Borrower shall maintain the ratio of (i)
EBITDA for the twelve (12) month period ending on the Calculation Date to (ii)
Debt Service for the twelve (12) month period ending on such Calculation Date
equal to or in excess of 2.0: 1.0.
8.5 Total Outstanding Unsecured Indebtedness to Adjusted Unencumbered
Asset Value. Borrower shall not permit the ratio of Total Outstanding Unsecured
Indebtedness to Adjusted Unencumbered Asset Value to exceed sixty (60%) percent.
8.6 Unencumbered EBITDA to Total Outstanding Unsecured Indebtedness.
Borrower shall maintain the ratio of (i) Unencumbered EBITDA for the twelve (12)
month period ending on the Calculation Date to (ii) that portion of interest
expense attributable to Total Outstanding Unsecured Indebtedness for the twelve
(12) month period ending on the Calculation Date, equal to or in excess of 2.25:
1.0.
8.7 Distributions. Annual dividends and distributions will not exceed
Funds From Operations, and will be measured at each fiscal year end.
-14-
8.8 Projects Under Development to Total Adjusted Asset Value. Borrower
will not permit the ratio of the cost value of Projects Under Development to
exceed twenty five (25%) percent of Total Adjusted Asset Value.
8.9 Undeveloped Land Holdings to Total Adjusted Asset Value. Borrower
shall not permit the ratio of cost value of all undeveloped holdings (raw
land)(exclusive of any properties determined to be Projects Under Development)
determined in accordance with GAAP to exceed fifteen (15%) percent of Total
Adjusted Asset Value.
8.10 Total Variable Rate Indebtedness to Total Adjusted Asset Value.
Borrower will not permit the ratio of Total Variable Rate Indebtedness to exceed
twenty (20%) percent of Total Adjusted Asset Value.
9. EVENTS OF DEFAULT. The following provisions deal with Events of
Default, notice, grace and cure periods, and certain rights of Lender following
an Event of Default.
9.1 Events of Default. Each of the following events, unless cured
within any applicable grace period set forth or referred to below in this
Section 9.2 shall constitute an "Event of Default":
9.1.1 Generally. A default by Borrower in the performance of
any term, provision or condition of this Revolving Credit Agreement to
be performed by Borrower, or a breach, or other failure to satisfy, any
other term, provision, condition, covenant or warranty under this
Revolving Credit Agreement and such default is not waived and remains
uncured beyond any applicable specific grace period provided for in
this Revolving Credit Agreement, or as set forth in Section 9.2 below;
9.1.2 Note and Other Loan Documents. A default by Borrower in
the payment of any principal or interest due under the Note on the due
date thereof or performance of any term or provision of the Note, or of
any of the other Loan Documents, or a breach, or other failure to
satisfy, any other term, provision, condition or warranty under the
Note, or any other Loan Document, regardless of whether the then
undisbursed portion of the Facility is sufficient to cover any payment
of money required thereby, and the specific grace period, if any,
allowed for the default in question shall have expired without such
default having been cured or waived;
9.1.3 Other Indebtedness. The occurrence of an event
constituting a default (after the expiration of any
applicable grace period without the cure or waiver thereof)
under the terms of any other Indebtedness of the Borrower to
-15-
any one third party in the amount in excess of Five Million Dollars
($5,000,000.00); provided however, if the Indebtedness is non-recourse
to the Borrower, the occurrence of an event constituting a default
after the expiration of any applicable grace period without the cure or
waiver thereof under the terms of such Indebtedness of the Borrower to
any one third party in the amount in excess of Ten Million Dollars
($10,000,000.00).
9.1.4 Financial Status and Insolvency.
A. Borrower shall: (i) admit in writing its inability
to pay its debts generally as they become due; (ii) file a
petition in bankruptcy or a petition to take advantage of any
insolvency act; (iii) make an assignment for the benefit of
creditors; (iv) consent to, or acquiesce in, the appointment
of a receiver, liquidator or trustee of itself or of the whole
or any substantial part of its properties or assets; (v) file
a petition or answer seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar
relief under the Federal Bankruptcy laws or any other
applicable law; (vi) have a court of competent jurisdiction
enter an order, judgment or decree appointing a receiver,
liquidator or trustee of Borrower, or of the whole or any
substantial part of the property or assets of Borrower, and
such order, judgment or decree shall remain unvacated or not
set aside or unstayed for sixty (60) days; (vii) have a
petition filed against it seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar
relief under the Federal Bankruptcy laws or any other
applicable law and such petition shall remain undismissed for
sixty (60) days; (viii) have, under the provisions of any
other law for the relief or aid of debtors, any court of
competent jurisdiction assume custody or control of Borrower
or of the whole or any substantial part of its property or
assets and such custody or control shall remain unterminated
or unstayed for sixty (60) days; (ix) have an attachment or
execution levied against any substantial portion of the real
estate owned by Borrower; or (x) have any materially adverse
change in its financial condition since the date of this
Revolving Credit Agreement; or
B. any such event as set forth in Section 9.1.3 or
Section 9.1.4. A. shall occur with respect to any Guarantor or
any general partner of Borrower; or
9.1.5 Breach of Representation or Warranty. Any material
representation or warranty made by Borrower or
-16-
Guarantor herein or in any other instrument or document relating to the
Facility shall at any time be materially false or misleading, or any
warranty shall be materially breached and such is not waived by Lender;
9.1.6 Guarantor Default. A default by Guarantor in the
performance of any term or provision of any Loan Document to which
Guarantor is a party, or the breach, or any other failure to satisfy
any other term, provision, condition or warranty imposed upon the
Guarantor in any Loan Document to which Guarantor is a party or by
which Guarantor is bound, after the expiration of any applicable grace
period without the cure or waiver thereof, such cure period being
determined in the same manner as for the Borrower.
9.2 Grace Periods and Notice. As to each of the foregoing events the
following provisions relating to grace periods and notice shall apply:
9.2.1 No Notice or Grace Period. There shall be no grace
period and no notice provision with respect to the payment of principal
at maturity and no grace period and no notice provision with respect to
defaults related to the voluntary filing of bankruptcy or
reorganization proceedings or an assignment for the benefit of
creditors, or with respect to nonmonetary defaults which are not
reasonably capable of being cured, or with respect to a breach of a
material warranty or representation under Section 6.
9.2.2 Nonpayment of Interest. As to any payment which is made
by an overdraft to Borrower's account which overdraft is not repaid
within three (3) Business Days or as to the nonpayment of interest,
there shall be a ten (10) day grace period without any requirement of
notice from Lender.
9.2.3 Other Monetary Defaults. All other monetary defaults
shall have a five (5) Business Day grace period following notice from
Lender, or, if shorter, a grace period without notice until five (5)
Business Days before the last day on which payment is required to be
made in order to avoid: (i) the cancellation or lapse of required
insurance, or (ii) a tax sale or the imposition of late charges or
penalties in respect of taxes or other municipal charges.
9.2.4 Nonmonetary Defaults Capable of Cure. As to nonmonetary
defaults which are reasonably capable of being cured or remedied,
unless there is a specific shorter or longer grace period provided for
in this Revolving Credit Agreement or in another Loan Document, there
shall be a thirty (30) day grace period following notice from Lender
or, if such default would reasonably require more than thirty (30) days
to cure or remedy, such longer period of time not to exceed a total of
one hundred and twenty (120)
-17-
days from Lender's notice as may be reasonably required so long as
Borrower shall commence reasonable actions to remedy or cure the
default within thirty (30) days following such notice and shall
diligently prosecute such curative action to completion within such one
hundred and twenty (120) day period. However, where there is an
emergency situation in which there is danger to person or property such
curative action shall be commenced as promptly as possible. As to
breaches of warranties and representations (other than those related to
financial information or construction documents) there shall be a
thirty (30) day grace period following notice from Lender.
9.3 Certain Lender Remedies. If an Event of Default shall occur,
Lender:
9.3.1 Accelerate Debt. May declare the indebtedness evidenced
by the Note and the Obligations immediately due and payable (provided
that in the case of a voluntary petition in bankruptcy filed by
Borrower or (after the expiration of the grace period if any set forth
above) an involuntary petition in bankruptcy filed against Borrower,
such acceleration shall be automatic). Upon such an acceleration all
principal, accrued interest and costs and expenses shall be due and
payable together with interest on such principal at the Default Rate
and any applicable Yield Maintenance Prepayment Fee (as defined in the
Note); and
9.3.2 Pursue Remedies. May pursue any and all remedies
provided for hereunder, or under any one or more of the other Loan
Documents.
9.3.3 Written Waivers. If an Event of Default is waived by
Lender, in its sole discretion, pursuant to a specific written
instrument executed by an authorized officer of Lender, the Event of
Default so waived shall be deemed to have never occurred.
10. ADDITIONAL REMEDIES OF LENDER.
10.1 Remedies. Upon the occurrence of an Event of Default, whether or
not the indebtedness evidenced by the Note shall be due and payable or Lender
shall have instituted any action for the enforcement of the Note, Lender may, in
addition to any other remedies which Lender may have hereunder or under the
other Loan Documents, and not in limitation thereof, and in Lender's sole and
absolute discretion, proceed to protect and enforce its rights and remedies
under this Revolving Credit Agreement, the Note or any of the other Loan
Documents by suit in equity, action at law or other appropriate proceeding,
whether for the specific performance of any covenant or agreement contained in
this Revolving Credit Agreement and the other Loan Documents or any instrument
pursuant to which the Obligations are
-18-
evidenced, including as permitted by applicable law, the obtaining of the ex
parte appointment of a receiver, and, if any amount owed to the Lender shall
have become due, by declaration or otherwise, proceed to enforce the payment
thereof or any other legal or equitable right of the Lender. No remedy conferred
upon the Lender or the holder of the Note in this Revolving Credit Agreement or
in any of the other Loan Documents is intended to be exclusive of any other
remedy and each and every remedy shall be cumulative and shall be in addition to
every other remedy given hereunder or thereunder or now or hereafter existing at
law or in equity or by statute or any other provision of law.
10.2 Reimbursement. Lender shall have the right to collect and seek
reimbursement for all sums paid or incurred pursuant to any of the Loan
Documents, including Section 7.10, and all payments made or incurred by Lender
hereunder shall be paid by Borrower to Lender upon demand with interest at the
Default Rate from the date of payment by Lender to the date of payment to
Lender.
10.3 Power of Attorney. For the purpose of exercising the rights
granted by this Section 10.3, as well as any and all other rights and remedies
of Lender, Borrower hereby irrevocably constitutes and appoints Lender (or any
agent designated by Lender) its true and lawful attorney-in-fact, upon and
following any Event of Default, to execute, acknowledge and deliver any
instruments and to do and perform any acts permitted hereunder or by law in the
name and on behalf of Borrower.
11. GENERAL PROVISIONS.
11.1 Notices. Any notice or other communication (other than routine
reporting as required under the Loan Documents) in connection with this
Revolving Credit Agreement, the Note, or any of the other Loan Documents, shall
be in writing, and (i) deposited in the United States Mail, postage prepaid, by
registered or certified mail, or (ii) hand delivered by any commercially
recognized courier service or overnight delivery service such as Federal
Express, or (iii) sent by facsimile transmission, if a FAX Number is designated
below, provided a copy is also sent by first-class mail addressed:
If to Borrower:
Tanger Properties Limited Partnership
1400 West Northwood Street
Greensboro, North Carolina 27408
FAX Number: (910) 274-6632 (after December 15,
1997, Area Code 336)
Attention: Virginia R. Summerell
with copies by regular mail or such hand delivery or facsimile
transmission to:
-19-
Vernon, Vernon, Wooten, Brown,
Andrews & Garrett
522 S. Lexington Avenue
Burlington, North Carolina 27216
FAX Number: (919) 226-3866
Attn: R. Joyce Garrett, Esquire
If to Lender:
Fleet National Bank
75 State Street
Boston, Massachusetts 02108
FAX Number: (617) 346-3220
Attention: Commercial Real Estate Loan
Administration Manager
with copies by regular mail or such hand delivery or facsimile
transmission to:
Riemer & Braunstein
Three Center Plaza
Boston, Massachusetts 02108
FAX Number: (617) 723-6831
Attention: Steven J. Weinstein, Esquire
If to the Guarantor:
Tanger Factory Outlet Centers, Inc.
1400 West Northwood Street
Greensboro, North Carolina 27408
FAX Number:(910) 274-6632 (after December 15,
1997, Area Code 336)
Attention: Virginia R. Summerell
with copies by regular mail or such hand delivery or facsimile
transmission to:
Vernon, Vernon, Wooten, Brown,
Andrews & Garrett
522 S. Lexington Avenue
Burlington, North Carolina 27216
FAX Number: (919) 226-3866
Attn: R. Joyce Garrett, Esquire
Any such addressee may change its address for such notices to such other address
in the United States as such addressee shall have specified by written notice
given as set forth above. All periods of notice shall be measured from the
deemed date of delivery.
A notice shall be deemed to have been given, delivered and received for
the purposes of all Loan Documents upon the earliest
-20-
of: (i) if sent by such certified or registered mail, on the third Business Day
following the date of postmark, or (ii) if hand delivered at the specified
address by such courier or over night delivery service, when delivered or
tendered for delivery during customary business hours on a Business Day, or
(iii) if so mailed, on the date of actual receipt at evidenced by the return
receipt, or (iv) if so delivered, upon actual receipt, or (v) if facsimile
transmission is a permitted means of giving notice, upon receipt during
customary business hours on a Business Day as evidenced by confirmation.
11.2 Limitations on Assignment. Borrower may not assign this Revolving
Credit Agreement or the monies due thereunder without the prior written consent
of Lender in each instance.
11.3 Further Assurances. Borrower shall upon request from Lender from
time to time execute, seal, acknowledge and deliver such further instruments or
documents which Lender may reasonably require to better perfect and confirm its
rights and remedies hereunder, under the Note and under each of the other Loan
Documents,
11.4 Parties Bound. The provisions of this Revolving Credit Agreement
and of each of the other Loan Documents shall be binding upon and inure to the
benefit of Borrower and Lender and their respective successors and assigns,
except as otherwise prohibited by this Revolving Credit Agreement or any of the
other Loan Documents.
This Revolving Credit Agreement is a contract by and between Borrower
and Lender for their mutual benefit, and no third person shall have any right,
claim or interest against either Lender or Borrower by virtue of any provision
hereof.
11.5 Waivers, Extensions and Releases. Lender may at any time and from
time to time waive any one or more of the conditions contained herein or in any
of the other Loan Documents, but any such waiver, extension or release shall be
deemed to be made in pursuance and not in modification hereof, and any such
waiver in any instance, or under any particular circumstance, shall not be
considered a waiver of such condition in any other instance or any other
circumstance.
11.6 Governing Law; Consent to Jurisdiction; Mutual Waiver of Jury
Trial.
11.6.1 Substantial Relationship. It is understood and agreed
that all of the Loan Documents were negotiated, executed and delivered
in the Commonwealth of Massachusetts the parties agree has a
substantial relationship to the parties and to the underlying
transactions embodied by the Loan Documents.
-21-
11.6.2 Place of Delivery. Borrower agrees to furnish to Lender
at the Lender's office in Boston, Massachusetts all further
instruments, certifications and documents to be furnished hereunder.
11.6.3 Governing Law. This Revolving Credit Agreement and each
of the other Loan Documents shall in all respects be governed,
construed, applied and enforced in accordance with the internal laws of
the Commonwealth of Massachusetts without regard to principles of
conflicts of law.
11.6.4 Consent to Jurisdiction. Borrower hereby consents to
personal jurisdiction in any state or Federal court located within the
Commonwealth of Massachusetts.
11.6.5 Jury Trial Waiver. BORROWER AND LENDER MUTUALLY HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION BASED ON THIS REVOLVING CREDIT
AGREEMENT, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS REVOLVING
CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENTS CONTEMPLATED TO BE
EXECUTED IN CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF
DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY
PARTY. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR BORROWER AND
LENDER TO ENTER INTO THE TRANSACTIONS CONTEMPLATED HEREBY.
11.7 Survival. All representations, warranties, covenants and
agreements of Borrower, or Guarantor, herein or in any other Loan Document, or
in any notice, certificate, or other paper delivered by or on behalf of Borrower
or Guarantor pursuant hereto are significant and shall be deemed to have been
relied upon by Lender notwithstanding any investigation made by Lender or on its
behalf and shall survive the delivery of the Loan Documents and the
establishment of the Facility and each advance pursuant thereto. No review by
Lender, or by its representatives, of any opinion letters, certificates from
professionals or other item of any nature shall relieve Borrower or anyone else
of any of the obligations, warranties or representations made by or on behalf of
Borrower or Guarantor, or any one or more of them, under any one or more of the
Loan Documents.
11.8 Cumulative Rights. All of the rights of Lender hereunder and under
each of the other Loan Documents and any other agreement now or hereafter
executed in connection herewith or therewith, shall be cumulative and may be
exercised singly, together, or in such combination as Lender may determine in
its sole good faith judgment.
11.9 Claims Against Lender.
-22-
11.9.1 Borrower Must Notify. Lender shall not be in default
under this Revolving Credit Agreement, or under any other Loan
Document, unless a written notice specifically setting forth the claim
of Borrower shall have been given to Lender within thirty (30) days
after Borrower first had actual knowledge or actual notice of the
occurrence of the event which Borrower alleges gave rise to such claim
and Lender does not remedy or cure the default, if any there be, with
reasonable promptness thereafter. Such actual knowledge or actual
notice shall refer to what was actually known by, or expressed in a
written notification furnished to, any of the persons or officials
referred to in Exhibit C as Authorized Representatives.
11.9.2 Remedies. If it is determined by the final order of a
court of competent jurisdiction, which is not subject to further
appeal, that Lender has breached any of its obligations under the Loan
Documents and has not remedied or cured the same with reasonable
promptness following notice thereof, Lender's responsibilities shall be
limited to: (i) where the breach consists of the failure to grant
consent or give approval in violation of the terms and requirements of
a Loan Document, the obligation to grant such consent or give such
approval and to pay Borrower's reasonable costs and expenses including,
without limitation, reasonable attorneys, fees and disbursements in
connection with such court proceedings; and (ii) the case of any such
failure to grant such consent or give such approval, or in the case of
any other such default by Lender, where it is also so determined that
Lender acted in bad faith, or that Lender's default constituted gross
negligence or willful misconduct, the payment of any actual, direct,
compensatory damages sustained by Borrower as a result thereof plus
Borrower's reasonable costs and expenses, including, without
limitation, reasonable attorneys' fees and disbursements in connection
with such court proceedings.
11.9.3 Limitations. In no event, however, shall Lender be
liable to Borrower or to Guarantor or anyone else for other damages
such as, but not limited to, indirect, speculative or punitive damages
whatever the nature of the breach by Lender of its obligations under
this Revolving Credit Agreement or under any of the other Loan
Documents. In no event shall Lender be liable to Borrower or to
Guarantor or anyone else unless a written notice specifically setting
forth the claim of Borrower shall have been given to Lender within the
time period specified above.
11.10 Obligations Absolute. Except to the extent prohibited by
applicable law which cannot be waived, the Obligations of Borrower and the
obligations of the Guarantor under the Loan Documents shall be absolute,
unconditional and irrevocable and shall be paid strictly in accordance with the
-23-
terms of the Loan Documents under all circumstances whatsoever, including,
without limitation, the existence of any claim, set off, defense or other right
which Borrower or any Guarantor may have at any time against Lender whether in
connection with the Facility or any unrelated transaction.
11.11 Table of Contents, Title and Headings. Any Table of Contents, the
titles and the headings of sections are not parts of this Revolving Credit
Agreement or any other Loan Document and shall not be deemed to affect the
meaning or construction of any of their provisions.
11.12 Counterparts. This Revolving Credit Agreement may be executed in
several counterparts, each of which when executed and delivered is an original,
but all of which together shall constitute one instrument. In making proof of
this agreement, it shall not be necessary to produce or account for more than
one such counterpart which is executed by the party against whom enforcement of
such loan agreement is sought.
11.13 Satisfaction of Commitment. The establishment of the Facility
being made pursuant to the terms hereof and of the other Loan Documents is being
made in satisfaction of Lender's obligations under the Commitment dated as of
October 14, 1997. The terms, provisions and conditions of this Revolving Credit
Agreement and the other Loan Documents supersede the provisions of the
Commitment.
11.14 Right to Sell. Lender shall have the unrestricted right at any
time or from time to time, to assign all or any portion of its rights and
obligations hereunder to one or more banks or other financial institutions
(each, an "Assignee"), subject to the Borrower's prior written approval as to
the identity and number, such approval not to be unreasonably withheld, and
Borrower and each Guarantor agrees that it shall execute, or cause to be
executed, such documents, including without limitation, amendments to this
Revolving Credit Agreement and to any other documents, instruments and
agreements executed in connection herewith (provided such amendments do not
increase Borrower's obligations or reduce or restrict Borrower's rights) as
Lender shall deem necessary to effect the foregoing. In addition, at the request
of Lender and any such Assignee, Borrower shall issue one or more new promissory
notes, as applicable, to any such Assignee and, if Lender has retained any of
its rights and obligations hereunder following such assignment, to Lender, which
new promissory notes shall be issued in replacement of, but not in discharge of,
the liability evidenced by the Note held by Lender prior to such assignment and
shall reflect the amount of the respective commitments and loans held by such
Assignee and Lender after giving effect to such assignment. Upon the execution
and delivery of appropriate assignment documentation, amendments and any other
documentation required by Lender in connection with such assignment, and
-24-
written notice from the Lender to the Borrower of the effectiveness of such
assignment, such Assignee shall be a party to this Revolving Credit Agreement
and shall have all of the rights and obligations of Lender hereunder (and under
any and all other guaranties, documents, instruments and agreements executed in
connection herewith) to the extent that such rights and obligations have been
assigned by Lender pursuant to the assignment documentation between Lender and
such Assignee, and Lender shall be released from its obligations hereunder and
thereunder to a corresponding extent. Borrower shall be responsible for all fees
and expenses incurred by Lender or any Assignee relating to an increase in the
availability under the Facility and/or extension of the Maturity Date (as
defined in the Note) of the Facility. Notwithstanding the rights and obligations
granted to the Assignee, Lender shall act as sole agent for the Assignee's in
connection with the Facility and Borrower shall continue to deal solely and
directly with Lender in connection with Lender's and Assignee's rights and
obligations hereunder, unless Borrower gives prior written approval otherwise.
11.15 Right to Participate. Lender shall have the unrestricted right at
any time and from time to time, to grant to one or more banks or other financial
institutions (each, a "Participant") participating interests in Lender's
obligation to lend hereunder and/or any or all of the loans held by Lender
hereunder. In the event of any such grant by Lender of a participating interest
to a Participant, whether or not upon notice to Borrower, Lender shall remain
responsible for the performance of its obligations hereunder and Borrower shall
continue to deal solely and directly with Lender in connection with Lender's
rights and obligations hereunder, unless Borrower gives prior written approval
otherwise.
Lender may furnish any information concerning Borrower in its
possession from time to time to prospective Assignees and Participants, provided
that Lender shall require any such prospective Assignee or Participant to agree
in writing to maintain the confidentiality of such information.
11.16 Time Of the Essence. Time is of the essence of each provision of
this Revolving Credit Agreement and each other Loan Document.
11.17 No Oral Change. This Revolving Credit Agreement and each of the
other Loan Documents may only be amended, terminated, extended or otherwise
modified by a writing signed by the party against which enforcement is sought
(except no such writing shall be required for any party which, pursuant to a
specific provision of any Loan Document, is required to be bound by changes
without such party's assent). In no event shall any oral agreements, promises,
actions, inactions, knowledge, course of conduct, course of dealings or the like
be effective to amend, terminate,
-25-
extend or otherwise modify this Revolving Credit Agreement or any of the other
Loan Documents.
11.18 Monthly Statements. While Lender may issue invoices or other
statements on a monthly or periodic basis (a "Statement"), it is expressly
acknowledged and agreed that: (i) the failure of Lender to issue any Statement
on one or more occasions shall not affect Borrower's obligations to make
payments under the Loan Documents as and when due; (ii) the inaccuracy of any
Statement shall not be binding upon Lender and so Borrower shall always remain
obligated to pay the full amount(s) required under the Loan Documents as and
when due notwithstanding any provision to the contrary contained in any
Statement; (iii) all Statements are issued for information purposes only and
shall never constitute any type of offer, acceptance, modification, or waiver of
the Loan Documents or any of Lender's rights or remedies thereunder; and (iv) in
no event shall any Statement serve as the basis for, or a component of, any
course of dealing, course of conduct, or trade practice which would modify,
alter, or otherwise affect the express written terms of the Loan Documents.
11.19 Exculpation. The Loan Documents have been negotiated, executed
and delivered on behalf of the Borrower by its Authorized Representatives or by
the Guarantor, in its capacity as the Borrower's sole general partner, or
officers thereof in their representative capacity and not individually, and bind
only the Borrower and Guarantor and no employee, agent, officer, partner or
shareholder ("Exculpated Party") of the Borrower or Guarantor shall be bound or
held to any personal liability in connection with the Obligations of the
Borrower or Guarantor thereunder, and any person or entity dealing with the
Borrower in connection therewith shall look solely to the Borrower and the
Guarantor for the payment of any claim or for the performance of any obligation
thereunder.
IN WITNESS WHEREOF this Revolving Credit Agreement has been duly
executed and delivered as a sealed instrument.
BORROWER: TANGER PROPERTIES LIMITED
PARTNERSHIP
By its General Partner
Tanger Factory Outlet Centers,
Inc.
By: /s/ Stanley K. Tanger
-------------------------
Name: Stanley K. Tanger
Title: Chairman of the Board
and Chief Executive Officer
-26-
LENDER: FLEET NATIONAL BANK
By: /s/ Aron D. Levine
----------------------
Name: Aron D. Levine
Title: Vice-President
-27-
EXHIBITS:
Exhibit A - Definitions
Exhibit B - Ownership Interests and Taxpayer
Identification Numbers
Exhibit C - Authorized Representatives
Exhibit D - Certificate of Compliance
-28-
EXHIBIT A TO REVOLVING CREDIT AGREEMENT
DEFINITIONS
Account as defined in Section 7.8.
Adjusted Unencumbered Asset Value shall mean, as of the Calculation Date, the
sum of (A) plus (B):
"(A)" shall mean the sum of:
(i) 100% of Borrower's unrestricted operating cash and
equivalents; plus
(ii) cost value of Projects Under Development which are
included in Unencumbered Assets; plus
(iii) cost value of New Developments which are included in
Unencumbered Assets.
"(B)" shall mean
(i) (x) an amount equal to Unencumbered EBITDA for the most
recently ended fiscal quarter (as adjusted by the Borrower (1)
to take into account the Unencumbered EBITDA of any
dispositions during the subject fiscal quarter of Unencumbered
Assets owned by the Borrower and (2) to deduct Unencumbered
EBITDA for any Projects Under Development and New Developments
which are included in Unencumbered Assets, each of which
adjustments must be approved by the Lender in its reasonable
discretion), multiplied by four (4), minus (y) a capital
expenditure allowance of $0.15 times owned the gross leasable
area of Unencumbered Assets (excluding Projects Under
Development and New Developments which are included in
Unencumbered Assets); divided by
(ii) 0.10.
Advance(s) as defined in Section 2.1.
Authorized Representatives as defined in Section 4 and listed on Exhibit C.
Borrower as defined in the Preamble.
Business Day shall mean: any day of the year on which offices of
Fleet National Bank are not required or authorized by law to be
closed for business in Boston, Massachusetts. If any day on
which a payment is due is not a Business Day, then the payment
-29-
shall be due on the next day following which is a Business Day. Further, in the
event a payment is due on a specified day of the month, if there is no
corresponding day for a payment in the given calendar month (i.e., there is no
"February 30th"), the payment shall be due on the last Business Day of the
calendar month.
Calculation Date shall mean the last day of each calendar quarter commencing
with December 31, 1997.
Certificate of Compliance as defined in Section 7.2.2.
Debt Service shall mean, as of the Calculation Date, the sum of all principal
and interest payments due on all loan obligations of the Borrower for such
period, exclusive of balloon maturity payments.
Dollars shall mean lawful money of the United States.
EBITDA shall mean, as of the Calculation Date, Borrower's earnings before
interest, taxes, depreciation, and amortization, all determined in accordance
with GAAP consistently applied and excluding earnings attributable to any
project in which the Borrower owns a minority interest and any extraordinary
gains or losses.
Environmental Legal Requirements shall mean all applicable past (which have
current effect), present or future (which have effect during the term of the
Facility) federal, state, county and local laws, rules, regulations, codes and
ordinances, or any judicial or administrative interpretations thereof, and the
requirements of any governmental agency or authority having or claiming
jurisdiction with respect thereto, including, without limitation, all orders,
decrees, judgments, rulings, requirements, directives or notices of violation,
imposed through any public or private enforcement proceedings, that create one
or more duties, obligations, responsibilities or liabilities on the Borrower
with respect to the existence, use, storage, treatment, discharge, release,
containment, transportation, generation manufacture, refinement, handling,
production, disposal or management of any Hazardous Materials, or otherwise
regulating or providing for the protection of the environment, and further
including, without limitation the Comprehensive Environmental Response
Compensation and Liability Act (42 U.S.C. ss.9601 et seq.), the Hazardous
Materials Transportation Act (49 U.S.C. ss.1801 et seq.), the Public Health
Service Act (42 U.S.C. ss.300(f) et seq.), the Pollution Prevention Act (42
U.S.C. ss.13101 et seq.), the Federal insecticide, Fungicide and Rodenticide Act
(7 U.S.C. 5136 et seq.), the Resource Conservation and Recovery Act (42 U.S.C.
ss.6901 et seq.), the Federal Clean Water Act (33 U.S.C. ss.1251 et seq.), the
Federal Clean Air Act (42 U.S.C. ss.7401 et seq.).
-30-
ERISA and ERISA Plan each as defined in Section 6.9.
Event of Default as defined in Section 9.
Facility is defined in Section 1.3.
Fair Market Minimum Net Worth shall mean, as of the Calculation
Date, the Borrower's Total Adjusted Asset Value less Total
Liabilities.
Funds From Operations shall be as currently defined by NAREIT.
GAAP shall mean generally accepted accounting principles.
Guaranty shall mean the unconditional, continuing guaranty from Guarantor
guaranteeing payment of the Facility, and performance of all Borrower's
Obligations under the Loan Documents.
Guarantor as defined in Section 1.4.
Hazardous Materials shall mean and include asbestos, flammable materials,
explosives, radioactive substances, polychlorinated biphenyls, radioactive
substances, other carcinogens, oil and other petroleum products, pollutants or
contaminants that could be a detriment to the environment, and any other
hazardous or toxic materials, wastes, or substances in quantities which are
defined, determined or identified as such in any Environmental Legal
Requirement.
Indebtedness shall mean all obligations, contingent and otherwise in respect of
(a) all debt and similar monetary obligations, whether direct or indirect; (b)
all liabilities secured by any mortgage, pledge, security interest, lien,
charge, or other encumbrance existing on property owned or acquired subject
thereto, whether or not the liability secured thereby shall have been assumed;
(c) all liabilities under capitalized leases; and (d) all guarantees,
endorsements and other contingent obligations whether direct or indirect in
respect of indebtedness of others, including the obligations to reimburse the
issuer in respect of any letters of credit.
Indemnified Party as defined in Section 7.11.
Legal Requirements shall mean all applicable federal, state, county and local
laws, rules, regulations, codes and ordinances, and the requirements of any
governmental agency or authority having or claiming jurisdiction with respect
thereto, including, but not limited to, those applicable to zoning, subdivision,
building, health, fire, safety, sanitation, the protection of the handicapped,
and environmental matters and shall also include all orders and directives of
any court, governmental agency or authority having or claiming jurisdiction as
to the Borrower with respect thereto.
-31-
Lender as defined in the Preamble.
Leverage shall mean, as of the Calculation Date, the ratio of Total Liabilities
to Total Adjusted Asset Value.
Liabilities shall mean all Indebtedness and all other liabilities that in
accordance with GAAP should be classified upon the obligor's balance sheet as
liabilities, or to which reference should be made by footnotes thereto.
Licenses and Permits shall mean all licenses, permits, authoriza tions and
agreements issued by or agreed to by any governmental authority, and including,
but not limited to, building permits, occupancy permits and such special
permits, variances and other relief as may be required pursuant to Legal
Requirements which may be applicable to the Portfolio Properties.
Limited Partnership Agreement shall mean that certain limited partnership
agreement of the Borrower dated as of December 16, 1993.
Loan Documents as defined in Section 3.
Maturity shall mean the Maturity Date, or in any instance, the Termination Date,
if the Facility has been accelerated by Lender upon an Event of Default.
Maturity Date as defined in the Note.
Maximum Commitment Amount as defined in Section 2.3.
NAREIT means the National Association of Real Estate Investment
Trusts.
New Development shall mean, as of the Calculation Date, (x) any Project which
was a Project Under Development during the prior quarterly reporting period and
as to which conditions (i), (ii) and (iii) as provided for in the definition of
Projects Under Development have been satisfied, and (y) any project acquired
during the subject fiscal quarter, such project(s) being a New Development only
for the subject quarterly reporting period.
Obligations as defined in Section 3.
Projects Under Development shall mean, as of the Calculation Date, any project
under development by the Borrower (i) classified as construction in progress on
the Borrower's quarterly financial statements; or (ii) as to which a certificate
of occupancy has not been issued; or (iii) as to which a minimum of 70% of total
gross leasable area has not been leased and occupied by paying tenants.
Prime Rate as defined in the Note.
-32-
Projects shall mean any and all properties of the Borrower having buildings with
a gross leaseable area in excess of 50,000 sq. ft.
Revolving Credit Agreement as defined in the Preamble.
Secured Indebtedness shall mean any Indebtedness of the Borrower secured by any
encumbrance or by any security interest, lien, privilege, or charge on any real
or personal property.
Statement as defined in Section 11.18.
Termination Date shall mean the earlier of (x) the occurrence of an Event of
Default, or (y) the payment in full of Advances outstanding under the Facility
and the termination of the Borrower's right to request Advances under the
Facility, or (z) the Maturity Date.
Total Adjusted Asset Value shall mean, as of the Calculation Date, (A) plus (B)
in which:
"(A)" shall mean the sum of:
(i) unrestricted cash and cash equivalents (excluding
any tenant deposits); plus
(ii) cost value of Projects Under Development; plus
(iii) cost value of New Developments.
"(B)" shall mean:
(i) (x) an amount equal to EBITDA for the most recently ended
fiscal quarter (as adjusted by the Borrower (1) to take into
account the EBITDA of any dispositions during the subject
fiscal quarter of projects owned by the Borrower and (2) to
deduct EBITDA for any Projects Under Development or New
Developments, each of which adjustments must be approved by
Lender in its reasonable discretion), multiplied by four (4),
minus (y) a capital expenditure allowance of $0.15 times owned
gross leasable area (excluding Projects Under Development and
New Developments); divided by
(ii) 0.10.
Total Liabilities shall mean, as of the Calculation Date, the sum, after
eliminating intercompany items, of all Liabilities (including, without
limitation, deferred taxes) other than those liabilities relating to projects in
which the Borrower owns a
-33-
minority interest, of the Borrower determined in accordance with GAAP.
Total Outstanding Unsecured Indebtedness shall mean, as of the Calculation Date,
all unsecured Indebtedness of the Borrower outstanding as of the end of such
fiscal quarter, other than trade indebtedness incurred in the ordinary course of
business.
Total Variable Rate Indebtedness shall mean, as of the Calculation Date, all
Indebtedness as to which interest accrues or is payable at a variable interest
rate, exclusive of any such Indebtedness as to which the Borrower has obtained a
fixed rate interest hedge.
Unencumbered Assets shall mean real property that is wholly-owned by the
Borrower or by a partnership in which the Borrower is the sole general partner
that is not subject to a mortgage lien or to any agreement with any other lender
that prohibits the creation of a lien on such property.
Unencumbered EBITDA shall mean, as of the Calculation Date, Borrower's earnings
before interest, taxes, depreciation, and amortization on all Unencumbered
Assets, all determined in accordance with GAAP consistently applied and
excluding any extraordinary gains or losses with respect to Unencumbered Assets.
Yield Maintenance Prepayment Fee as defined in the Note.
-34-
EXHIBIT B TO REVOLVING CREDIT AGREEMENT
OWNERSHIP INTERESTS AND
TAXPAYER IDENTIFICATION NUMBERS
Borrower: Tanger Properties Limited Partnership
Tax ID 56-1822494
Owners:
General Partners: Tanger Factory Outlet Centers, Inc.
Tax ID 56-1815473
Limited Partner: Tanger Family Limited Partnership
Guarantor: Tanger Factory Outlet Centers, Inc.
Tax ID 56-1815473
Owners: New York Stock Exchange Traded Public Company
-35-
EXHIBIT C TO REVOLVING CREDIT AGREEMENT
AUTHORIZED REPRESENTATIVES
As of the date hereof:
Stanley K. Tanger
Frank C. Marchisello, Jr.
Rochelle G. Simpson
Virginia R. Summerell
-36-
EXHIBIT D
CERTIFICATE OF COMPLIANCE
Date: _______________________
To: Fleet National Bank
75 State Street
Boston, Massachusetts
Re: Certificate of Compliance
Calculation Date: ________________________
Pursuant to Section 7.2.2 of the Revolving Credit Agreement (the
"Revolving Credit Agreement") dated as of December 18, 1997 by and between
Tanger Properties Limited Partnership (the "Borrower") and Fleet National Bank
(the "Bank"), the undersigned hereby certifies: (i) to the best of the
undersigned's knowledge, the information provided on the accompanying Financial
Statements are true and accurate in all material respects; (ii) the Borrower is
in compliance with the Financial Covenants contained in the Revolving Credit
Agreement to the extent set forth below; (iii) to the best of the undersigned's
knowledge, an Event of Default has not occurred and is continuing under the
Revolving Credit Agreement.
All capitalized terms not otherwise defined herein shall have the same
meaning as defined in the Revolving Credit Agreement, as applicable.
I. COVENANT COMPLIANCE. All calculations to support the
information set forth in the "Actual" column below are attached
hereto and are based upon the accompanying Financial Statements.
COVENANT REQUIREMENT ACTUAL
- ----------------------------------------------------------------------
Fair Market Minimum $175,000,000.00
Net Worth
Total Liabilities to Not to exceed 60%
Total Adjusted Asset
Value
Secured Indebtedness Not to exceed 40%
to Total Adjusted
Asset Value.
EBITDA to Debt Equal to or in
Service excess of 2.0:1.0
-37-
Total Outstanding Not to exceed 60%
Unsecured
Indebtedness to
Adjusted
Unencumbered Asset
Value
Unencumbered EBITDA Equal to or in
TO Total Outstanding excess of 2.25: 1.0
Unsecured
Indebtedness
Distributions Will not exceed
Funds From
Operations
Projects Under Not to exceed 25%
Development to Total
Adjusted Asset Value
Undeveloped Land Not to exceed 15%
Holdings to Total
Adjusted Asset Value
Total Variable Rate Not to exceed 20%
Indebtedness to
Total Adjusted Asset
Value
II. LEVERAGE CALCULATION
1. Total Liabilities...........................________________
2. Total Adjusted Asset Value..................________________
3. Total Liabilities/Total Asset Value.........________________
The undersigned certifies that the information provided herein is true
and accurate, to the best of its knowledge.
TANGER PROPERTIES LIMITED
PARTNERSHIP
By its General Partner
Tanger Factory Outlet Centers,
Inc.
By:___________________________
Name:_________________________
Title: Chief Financial Officer
-38-
PROMISSORY NOTE
25,000,000.00 As of December 18, 1997
1. Promise To Pay.
FOR VALUE RECEIVED, TANGER PROPERTIES LIMITED PARTNERSHIP, a North
Carolina limited partnership having an address at 1400 West Northwood Street,
Greensboro, North Carolina 27408 ("Borrower") promises to pay to the order of
FLEET NATIONAL BANK, a national banking association, having an address at 75
State Street, Boston, Massachusetts 02109 ("Lender"), the principal sum of
TWENTY FIVE MILLION ($25,000,000.00) DOLLARS, or so much thereof as may be
advanced, with interest thereon, or on the amount thereof from time to time
outstanding, to be computed, as hereinafter provided, on each advance from the
date of its disbursement until such principal sum shall be fully paid. Interest
shall be payable in installments as set forth in Section 4 below. The total
principal sum, or the amount thereof outstanding, together with any accrued but
unpaid interest, shall be due and payable in full on January 15, 2000 ("Maturity
Date"), which term is further defined in, and is subject to acceleration in
accordance with, the Revolving Credit Agreement pursuant to which this Note has
been issued.
2. Revolving Credit Agreement.
This Note is issued pursuant to the terms, provisions and conditions of
an agreement captioned "Revolving Credit Agreement" dated as of even date
between Borrower and Lender and evidences the Facility and Advances made
pursuant thereto. Capitalized terms used herein which are not otherwise
specifically defined shall have the same meaning herein as in the Revolving
Credit Agreement.
3. Interest Rates.
3.1. Borrower's Options. Principal amounts outstanding under the
Facility shall bear interest at the following rates, at Borrower's selection,
subject to the conditions and limitations provided for in this Note: (i)
Variable Rate or (ii) Eurodollar Rate.
3.1.1 Selection To Be Made. Borrower shall select, and thereafter may
change the selection of, the applicable interest rate, from the alternatives
otherwise provided for in this Note, by giving Lender a Notice of Rate
Selection: (i) prior to each Advance, or (ii) prior to the end of each Interest
Period applicable to a Eurodollar Advance, or (iii) on any Business Day on which
Borrower desires to convert an outstanding Variable Rate Advance to a Eurodollar
Advance.
Page 1
3.1.2 Notice. A "Notice of Rate Selection" shall be a written notice,
given by cable, tested telex, telecopier (with authorized signature), or by
telephone if immediately confirmed by such a written notice, from an Authorized
Representative of Borrower which: (i) is irrevocable; (ii) is received by Lender
not later than 12:00 o'clock Noon Eastern Time: (a) if a Eurodollar Rate is
selected, at least two (2) Business Days prior to the first day of the Interest
Period to which such selection is to apply, (b) if a Variable Rate is selected,
on the first day of the Interest Period to which it applies; and (iii) as to
each selected interest rate option, sets forth the aggregate principal amount(s)
to which such interest rate option(s) shall apply and the Interest Period(s)
applicable to each Eurodollar Advance.
3.1.3 If No Notice. If Borrower fails to select an interest rate option
in accordance with the foregoing prior to an Advance, or prior to the last day
of the applicable Interest Period of an outstanding Eurodollar Advance, or if a
Eurodollar Advance is not available, any new Advance made shall be deemed to be
a Variable Rate Advance, and on the last day of the applicable Interest Period
all outstanding principal amounts shall be deemed converted to a Variable Rate
Advance.
3.2. Telephonic Notice. Without any way limiting Borrower's obligation
to confirm in writing any telephonic notice, Lender may act without liability
upon the basis of telephonic notice believed by Lender in good faith to be from
an Authorized Representative of the Borrower prior to receipt of written
confirmation. In each case Borrower hereby waives the right to dispute Lender's
record of the terms of such telephonic Notice of Rate Selection.
3.3. Limits On Options, Selections Per Month. Each Eurodollar Advance
shall be in a minimum amount of $1,000,000 . At no time shall there be
outstanding a total of more than five (5) Eurodollar Advances combined at any
time. If Borrower shall make more than three (3) Eurodollar Rate selections in
any thirty (30) day period, excluding conversions of outstanding advances made
at the end of an applicable Interest Period of any previously outstanding
Eurodollar Advance, Lender may impose and Borrower shall pay a reasonable
processing fee for each such additional selection.
4. Payment of Interest and Principal.
4.1. Payment and Calculation of Interest. All interest shall be: (a)
payable in arrears commencing January 15, 1998 and on the same day of each month
thereafter until the principal together with all interest and other charges
payable with respect to the Facility shall be fully paid; and (b) calculated on
the basis of a 360 day year and the actual number of days elapsed. Each change
in the Prime Rate shall simultaneously change the Variable Rate payable under
this Note. Interest at the Eurodollar Rate shall be computed
Page 2
from and including the first day of the applicable Interest Period
to, but excluding, the last day thereof.
4.2. Principal. The entire principal balance shall be due and payable
in full upon Maturity.
4.3. Prepayment. The Facility or any portion thereof may be prepaid in
full or in part at any time upon three (3) days, prior written notice to the
holder of this Note without premium or penalty with respect to Variable Rate
Advances and, with respect to Eurodollar Advances subject to a Yield-Maintenance
Fee. Any partial prepayment of principal shall first be applied to any
installment of principal then due and then be applied to the principal due in
the reverse order of maturity, and no such partial prepayment shall relieve
Borrower of the obligation to pay each subsequent installment of principal when
due.
4.4. Maturity. At maturity all accrued interest, principal and other
charges due with respect to the Facility shall be due and payable in full and
the principal balance and such other charges, but not unpaid interest, shall
continue to bear interest at the Default Rate until so paid.
4.5. Method of Payment; Date of Credit. All payments of interest,
principal and fees shall be made in lawful money of the United States in
immediately available funds: (a) by direct charge to an account of Borrower
maintained with Lender (or the then holder of this Note), or (b) by wire
transfer to Lender or (c) to such other bank or address as the holder of this
Note may designate in a written notice to Borrower. Payments shall be credited
on the Business Day on which immediately available funds are received prior to
one o'clock P.M. Eastern Time; payments received after one o'clock P.M. Eastern
Time shall be credited to the Facility on the next Business Day. Payments which
are by check, which Lender may at its option accept or reject, or which are not
in the form of immediately available funds shall not be credited to the Facility
until such funds become immediately available to Lender, and, with respect to
payments by check, such credit shall be provisional until the item is finally
paid by the payor bank.
4.6. Billings. Lender may submit monthly billings reflecting payments
due; however, any changes in the interest rate which occur between the date of
billing and the due date may be reflected in the billing for a subsequent month.
Neither the failure of Lender to submit a billing nor any error in any such
billing shall excuse Borrower from the obligation to make full payment of all
Borrower's payment obligations when due, however, if Borrower makes timely
payment as specified in any such billing, the Borrower shall not be in default
under the terms of this Note or any of the other Loan Documents due to the
failure to pay any additional amount owed as reflected in any corrected billing
(the "Additional Payment Amount"), unless the Borrower fails to pay the
Additional Payment
Page 3
Amount within the grace period provided for in the Revolving Credit Agreement
from the date on which the Borrower obtains knowledge of such error.
4.7. Default Rate. Lender shall have the option of imposing, and
Borrower shall pay upon billing therefor, an interest rate which is four percent
(4%) per annum above the interest rate otherwise payable ("Default Rate"): (a)
while any monetary Default exists and is continuing, during that period between
the due date and the date of payment; (b) following any Event of Default, unless
and until the Event of Default is waived by Lender; and (c) after Maturity.
Borrower's right to select pricing options shall cease upon the occurrence of a
monetary Default or following any Event of Default.
4.8. Late Charges. Borrower shall pay, upon billing there for, a "Late
Charge" equal to three percent (3%) of the amount of any payment of principal,
other than principal due at Maturity, interest, or both, which is not paid
within ten (10) days of the due date thereof. Late charges are: (a) payable in
addition to, and not in limitation of, the Default Rate, (b) intended to
compensate Lender for administrative and processing costs incident to late
payments, (c) are not interest, and (d) shall not be subject to refund or rebate
or credited against any other amount due.
4.9. Calculation of Yield Maintenance.
(i) The Yield Maintenance Fee due in accordance with Section 4.3 shall
be calculated separately for each Eurodollar Advance prepaid prior to the
expiration of the applicable Interest Period in accordance with the following:
(A) if the Treasury Rate (with a maturity corresponding to the
last day of the applicable Interest Period) is greater than the
applicable Eurodollar Rate, there shall be no Yield Maintenance Fee
payable for such installment or balance.
(B) If the Treasury Rate (with a maturity corresponding to the
last day of the applicable Interest Period) is less than the applicable
Eurodollar Rate, the Yield Maintenance Fee shall equal the aggregate of
all Present Values, computed separately for each such Eurodollar
Advance having a separate Interest Period, of the product of:
1. the amount of each Eurodollar Advance prepaid,
multiplied by
2. the amount by which the Eurodollar Rate, expressed
as a percentage, exceeds the Treasury Rate, expressed as a
percentage, computed separately for each
Page 4
Eurodollar Advance having a different Interest Period,
and
3. which product in turn shall be multiplied by a
fraction, computed separately for each Eurodollar Advance
having a different Interest Period, the numerator of which is
the number of days from the date of prepayment to the last day
of the applicable Interest Period and the denominator of which
is 360.
(ii) The Yield Maintenance Fee shall be payable in respect of all
prepayments of Eurodollar Advances whether voluntary or involuntary including,
without limitation, prepayments made upon acceleration of the Facility.
(iii) once written notice of intention to prepay is given, the
Facility, or the applicable portion thereof, shall become due and payable in
full on the date specified in the notice of prepayment and the failure to so
prepay on such date, together with any applicable Yield Maintenance Fees
computed in accordance with Section 4.9(i), above, shall constitute an Event of
Default.
5. Certain Definitions and Provisions Relating To Interest Rate.
5.1. Adjusted LIBOR Rate. The term "Adjusted LIBOR Rate" means for each
Interest Period the rate per annum obtained by dividing (i) the LIBOR Rate for
such Interest Period, by (ii) a percentage equal to one hundred percent (100%)
minus the maximum reserve percentage applicable during such Interest Period
under regulations issued from time to time by the Board of Governors of the
Federal Reserve System for determining the maximum reserve requirements
(including, without limitation, any basic, supplemental, marginal and emergency
reserve requirements) for Lender (or of any subsequent holder of this Note which
is subject to such reserve requirements, provided such reserve percentage for
such subsequent holder is not greater than the reserve percentage of Fleet
National Bank) in respect of liabilities or assets consisting of or including
Eurocurrency liabilities. (as such term is defined in Regulation D of the Board
of Governors of the Federal Reserve System) having a term equal to the Interest
Period.
5.2. Applicable Increment. The term "Applicable Increment" means the
additional amount of basis points added to the Adjusted LIBOR Rate for purposes
of determining the Eurodollar Rate for any applicable Interest Period. The
"Applicable Increment" shall be determined for each Interest Period on the first
day of such Interest Period as follows:
(A) If the Leverage is greater than or equal to fifty (50%)
percent, the Applicable Increment shall be one hundred and seventy five
(175) basis points;
Page 5
(B) If the Leverage is less than fifty (50%) percent, but
greater than forty (40%) percent, the Applicable Increment shall be one
hundred and sixty (160) basis points; and
(C) If the Leverage is less than or equal to forty (40%)
percent, the Applicable Increment shall be one hundred and fifty (150)
basis points.
Leverage shall be determined as of the last Calculation Date as to which the
Lender (i) has received a Certificate of Compliance and (ii) has provided
Borrower with the Interest Rate Notice.
5.3. Banking Day. The term "Banking Day" means a day on which banks are
not required or authorized by law to close in the city in which Lender's
principal office is situated.
5.4. Business Day; Same Calendar Month. For purposes of this Note, the
term "Business Day" means any Banking Day and, if the applicable Business Day
relates to the selection or determination of any Eurodollar Rate, any London
Banking Day. If any day on which a payment is due is not a Business Day, then
the payment shall be due on the next day following which is a Business Day,
unless, with respect to Eurodollar Advances, the effect would be to make the
payment due in the next calendar month, in which event such payment shall be due
on the next preceding day which is a Business Day. Further, in the event a
payment is due on a specified day of the month, if there is no corresponding day
for a payment in the given calendar month (i.e., there is no "February 30th"),
the payment shall be due on the last Business Day of the calendar month.
5.5. Dollars. The term "Dollars" or "$" means lawful money of the
United States.
5.6. Eurodollar Advance. The term "Eurodollar Advance" means any
principal outstanding under this Note which pursuant to this Note bears interest
at the Eurodollar Rate.
5.7. Eurodollar Rate. The term "Eurodollar Rate" means the per annum
rate equal to the Adjusted LIBOR Rate plus an the Applicable Increment.
5.8. Interest Period.
(A) The term "Interest Period" means with respect to each Eurodollar
Advance: a period of one (1), two (2), three (3), four (4), or six (6)
consecutive months, subject to availability, as selected, or deemed selected, by
Borrower at least two (2) Business Days prior to an Advance, or if an Advance is
already outstanding, at least two (2) Business Days prior to the first day of
the Interest Period to which such selection is to apply. Each such Interest
Period shall commence on the Business Day so selected, or
Page 6
deemed selected, by Borrower and shall end on the numerically corresponding day
in the first, second, third, fourth, or sixth month thereafter, as applicable.
Provided, however: (i) if there is no such numerically corresponding day, such
Interest Period shall end on the last Business Day of the applicable month, (ii)
if the last day of such an Interest Period would otherwise occur on a day which
is not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day; but (iii) if such extension would otherwise cause such
last day to occur in a new calendar month, then such last day shall occur on the
next preceding Business Day.
(B) The term "Interest Period" shall mean with respect to each Variable
Rate Advance consecutive periods of one (1) day each.
(C) No Interest Period may be selected which would end beyond the then
Maturity Date of the Facility. If the last day of an Interest Period would
otherwise occur on a day which is not a Business Day, such last day shall be
extended to the next succeeding Business Day, except as provided above in clause
(A) relative to a Eurodollar Advance.
5.9. Interest Rate Notice. The term "Interest Rate Notice" shall mean
written notice delivered by the Lender to the Borrower after receipt of the
Certificate of Compliance setting forth the Applicable Increment for Advances
made thereafter and until delivery of the next Interest Rate Notice; provided,
however, if the Lender does not provide the Borrower within five (5) Business
Days of the receipt of any such Certificate of Compliance either the Interest
Rate Notice or a written objection to the calculation of Leverage as provided
therein, the Applicable Increment shall be determined based upon the
calculations included in such Certificate of Compliance.
5.10. LIBOR Rate. The term "LIBOR Rate" means, with respect to each
Interest Period, the rate of interest, expressed as an annual rate, equal to the
simple average, rounded up to the nearest 1/16 of 1%, of the rates shown on the
display referred to as the "Telerate Page 3750" (or any display substituted
therefor) of the Dow Jones Telerate Service as being the respective rates at
which deposits in Dollars would be offered by the principal London offices of
each of the banks named thereon to major banks in the London interbank market at
approximately 11:00 A.M. (London time) on the second London Banking Day before
the first day of such Interest Period for a period substantially coextensive
with such Interest Period.
5.11. London Banking Day. The term "London Banking Day" means any day
on which dealings in deposits in Dollars are transacted in the London interbank
market.
Page 7
5.12. Maturity. The term "Maturity" shall mean the Maturity Date, or in
any instance, the Termination Date, if the Facility has been accelerated by
Lender upon an Event of Default.
5.13. Maturity Date. The term "Maturity Date" shall mean January 15,
2000.
5.14. Present Value. The term "Present Value" means the value at the
last day of the applicable Interest Period discounted to the date of prepayment
using the Treasury Rate.
5.15. Prime Rate. The term "Prime Rate" means the per annum rate of
interest so designated from time to time by Lender as its prime rate. The Prime
Rate is a reference rate and does not necessarily represent the lowest or best
rate being charged to any customer.
5.16. Treasury Rate. The term "Treasury Rate, means, as of the date of
any calculation or determination, the latest published rate for United States
Treasury Notes or Bills (but the rate on Bills issued on a discounted basis
shall be converted to a bond equivalent) as published weekly in the Federal
Reserve Statistical Release H.15(519) of Selected Interest Rates in an amount
which approximates (as determined by Lender) the amount prepaid and with a
maturity closest to the last day of the applicable Interest Period as to the
Eurodollar Advance which is prepaid in whole or in part.
5.17. Variable Rate. The term "Variable Rate" means a per annum rate
equal at all times to the Prime Rate less twenty five (25) basis points, with
changes therein to be effective simultaneously with any change in the Prime
Rate.
5.18. Variable Rate Advance. The term "Variable Rate Advance" means any
principal amount outstanding under this Note which pursuant to this Note bears
interest at the Variable Rate.
6. Additional Provisions Related to Interest Rate Selection.
6.1. Increased Costs. If, due to any one or more of: (i) the
introduction of any applicable law or regulation or any change (other than any
change by way of imposition or increase of reserve requirements already referred
to in the definition of Eurodollar Rate) in the interpretation or application by
any authority charged with the interpretation or application thereof of any law
or regulation; or (ii) the compliance with any guideline or request from any
governmental central bank or other governmental authority (whether or not having
the force of law), there shall be an increase in the cost to Lender of agreeing
to make or making, funding or maintaining Eurodollar Advances, including without
limitation changes which affect or would affect the amount of capital or
reserves required or expected to be maintained by
Page 8
Lender, with respect to all or any portion of the Facility, or any corporation
controlling Lender, on account thereof, then Borrower from time to time shall,
upon written demand by Lender, either (x) pay Lender additional amounts
sufficient to indemnify Lender against the increased cost incurred, subject to
the delivery of a certificate as to the amount of the increased cost and the
reason therefor being submitted to Borrower by Lender, which in the absence of
manifest error, shall be conclusive and binding for all purposes, or (y) convert
the Eurodollar Advances to Variable Rate Advances (and pay to the Lender any
applicable Yield Maintenance Fee, as provided herein).
6.2. Illegality. Notwithstanding any other provision of this Note, if
the introduction of or change in or in the interpretation of any law, treaty,
statute, regulation or interpretation thereof shall make it unlawful, or any
central bank or government authority shall assert by directive, guideline or
otherwise, that it is unlawful, for Lender to make or maintain Eurodollar
Advances or to continue to fund or maintain Eurodollar Advances then, on written
notice thereof and demand by Lender to Borrower, (a) the obligation of Lender to
make Eurodollar Advances and to convert or continue any Advances as Eurodollar
Advances shall terminate and (b) Borrower shall convert all principal
outstanding under this Note into Variable Rate Advances.
6.3. Additional Eurodollar Conditions. The selection by Borrower of a
Eurodollar Rate and the maintenance of Advances at such rate shall be subject to
the following additional terms and conditions:
(i) Availability. If, before or after Borrower has selected to
take or maintain a Eurodollar Advance, Lender notifies Borrower that:
(a) dollar deposits in the amount and for the
maturity requested are not available to Lender in the London
interbank market at the rate specified in the definition of
LIBOR Rate set forth above, or
(b) reasonable means do not exist for Lender to
determine the Eurodollar Rate for the amounts and maturity
requested,
then the principal which would have been a Eurodollar Advance shall be
a Variable Rate Advance.
(ii) Payments Net of Taxes. All payments and prepayments of
principal and interest under this Note shall be made net of any taxes
and costs the collection or payment of which is imposed on Borrower
resulting from having principal outstanding at or computed with
reference, to a Eurodollar Rate. Without limiting the generality of the
preceding
Page 9
obligation, illustrations of such taxes and costs are taxes, or the
withholding of amounts for taxes, of any nature whatsoever including
income, excise, interest equalization taxes (other than United States
or state income taxes) as well as all levies, imposts, duties or fees
whether now in existence or as the result of a change in or
promulgation of any treaty, statute, regulation, or interpretation
thereof or any directive guideline or otherwise by a central bank or
fiscal authority (whether or not having the force of law) or a change
in the basis of, or the time of payment of, such taxes and other
amounts resulting therefrom.
6.4. Variable Rate Advances. Each Variable Rate Advance shall continue
as a Variable Rate Advance until Maturity, unless sooner converted, in whole or
in part, to a Eurodollar Advance, subject to the limitations and conditions set
forth in this Note.
6.5. Conversion of Other Advances. At the end of each applicable
Interest Period, the applicable Eurodollar Advance shall be converted to a
Variable Rate Advance unless Borrower selects another option in accordance with
the provisions of this Note.
7. Acceleration; Event of Default.
At the option of the holder, this Note and the indebtedness evidenced
hereby shall become immediately due and payable without further notice or
demand, and notwithstanding any prior waiver of any breach or default, or other
indulgence, upon the occurrence at any time of any one or more of the following
events, each of which shall be an "Event of Default" hereunder and under the
Revolving Credit Agreement and each other Loan Document: (i) an Event of Default
as defined in the Revolving Credit Agreement as the same may from time to time
hereafter be amended; or (ii) an event which pursuant to any express provision
of the Revolving Credit Agreement, or of any other Loan Document, gives Lender
the right to accelerate the Facility.
8. Certain Waivers, Consents and Agreements.
The Borrower and the Guarantor hereby agree and acknowledge that: (a)
the Borrower (i) waives presentment, demand, protest, suretyship defenses and
defenses in the nature thereof; (ii) waives any defenses based upon and
specifically assents to any and all extensions and postponements of the time for
payment, changes in terms and conditions and all other indulgences and
forbearances which may be granted by the holder to any party now or hereafter
liable hereunder or for the indebtedness evidenced hereby; (iii) agrees to any
substitution, exchange, release, surrender or other delivery of any security or
collateral now or hereafter held hereunder or in connection with the Revolving
Credit Agreement, or any of the other Loan Documents, and to the addition or
release of any other party or person primarily or secondarily liable; (iv)
Page 10
agrees that if any security or collateral given to secure this Note or the
indebtedness evidenced hereby or to secure any of the obligations set forth or
referred to in the Revolving Credit Agreement, or any of the other Loan
Documents, shall be found to be unenforceable in full or to any extent, or if
Lender or any other party shall fail to duly perfect or protect such collateral,
the same shall not relieve or release any party liable hereon or thereon nor
vitiate any other security or collateral given for any obligations evidenced
hereby or thereby; (v) subject to the terms of the Revolving Credit Agreement,
agrees to pay all costs and expenses incurred by Lender or any other holder of
this Note in connection with the indebtedness evidenced hereby, including,
without limitation, all attorneys' fees and costs, for the implementation of the
Facility, the collection of the indebtedness evidenced hereby and the
enforcement of rights and remedies hereunder or under the other Loan Documents,
whether or not suit is instituted; and (vi) consents to all of the terms and
conditions contained in this Note, and all other instruments now or hereafter
executed evidencing or governing all or any portion of the security or
collateral for this Note and for such Revolving Credit Agreement, or any one or
more of the other Loan Documents, and (b) the Guarantor has waived certain
rights as provided in a certain Guaranty Agreement dated as of the date hereof
executed and delivered by the Guarantor to the Lender.
9. Delay Not A Bar.
No delay or omission on the part of the holder in exercising any right
hereunder or any right under any instrument or agreement now or hereafter
executed in connection herewith, or any agreement or instrument which is given
or may be given to secure the indebtedness evidenced hereby or by the Revolving
Credit Agreement, or any other agreement now or hereafter executed in connection
herewith or therewith shall operate as a waiver of any such right or of any
other right of such holder, nor shall any delay, omission or waiver on any one
occasion be deemed to be a bar to or waiver of the same or of any other right on
any future occasion.
10. Partial Invalidity.
The invalidity or unenforceability of any provision hereof, of the
Revolving Credit Agreement, of the other Loan Documents, or of any other
instrument, agreement or document now or hereafter executed in connection with
the establishment of the Facility made pursuant hereto and thereto shall not
impair or vitiate any other provision of any of such instruments, agreements and
documents, all of which provisions shall be enforceable to the fullest extent
now or hereafter permitted by law.
Page 11
11. Compliance With Usury Laws.
All agreements between Borrower, the Guarantor and Lender are hereby
expressly limited so that in no contingency or event whatsoever, whether by
reason of acceleration of maturity of the indebtedness evidenced hereby or
otherwise, shall the amount paid or agreed to be paid to Lender for the use or
the forbearance of the indebtedness evidenced hereby exceed the maximum
permissible under applicable law. As used herein, the term "applicable law"
shall mean the law in effect as of the date hereof, provided, however, that in
the event there is a change in the law which results in a lesser or higher
maximum permissible rate of interest, then this Note shall be governed by such
new law as of its effective date. In this regard, it is expressly agreed that it
is the intent of Borrower and Lender in the execution, delivery and acceptance
of this Note to contract in strict compliance with the laws of the Commonwealth
of Massachusetts from time to time in effect. If, under or from any
circumstances whatsoever, fulfillment of any provision hereof or of any of the
Loan Documents at the time performance of such provision shall be due, shall
involve transcending the limit of validity prescribed by applicable law, then
the obligation to be fulfilled shall automatically be reduced to the limit of
such validity, and if under or from any circumstances whatsoever Lender should
ever receive as interest an amount which would exceed the highest lawful rate,
such amount which would be excessive interest shall be applied to the reduction
of the principal balance evidenced hereby and not to the payment of interest.
This provision shall control every other provision of all agreements between
Borrower, the Guarantor and Lender.
12. Use of Proceeds.
All proceeds of the Facility shall be used solely for the purposes more
particularly provided for and limited by the Revolving Credit Agreement.
13. Notices.
Any notices given with respect to this Note shall be given in the
manner provided for in the Revolving Credit Agreement.
14. Governing Law and Consent to Jurisdiction.
14.1. Substantial Relationship. The parties agree that the Commonwealth
of Massachusetts has a substantial relationship to the parties and to the
underlying transactions embodied by the Loan Documents.
14.2. Place of Delivery. Borrower agrees to furnish to Lender at
Lender's office in Boston, Massachusetts all further instruments, certifications
and documents to be furnished hereunder.
Page 12
14.3. Governing Law. This Note and each of the other Loan Documents
shall in all respects be governed, construed, applied and enforced in accordance
with the internal laws of the Commonwealth of Massachusetts without regard to
principles of conflicts of law.
14.4. Exceptions. Notwithstanding the foregoing choice of law
provisions of Federal law and the law of the state in which a Portfolio
Property lies shall apply in defining the terms Hazardous Materials,
Hazardous Materials Legal Requirements, Environmental Legal
Requirements and Legal Requirements applicable to the Portfolio
Properties as such terms are used in the Revolving Credit Agreement,
and the other Loan Documents.
14.5. Consent to Jurisdiction. Borrower hereby consents to personal
jurisdiction in any state or Federal court located within the Commonwealth of
Massachusetts.
15. Waiver of Jury Trial.
BORROWER AND LENDER (BY ACCEPTANCE OF THIS NOTE) MUTUALLY HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BETWEEN THE BORROWER AND THE LENDER BASED HEREON,
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE OR ANY OTHER LOAN
DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH, OR ANY COURSE OF
CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS
OF ANY PARTY. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR LENDER TO ACCEPT
THIS NOTE AND ESTABLISH THE FACILITY.
16. No Oral Change.
This Note and the other Loan Documents may only be amended, terminated,
extended or otherwise modified by a writing signed by the party against which
enforcement is sought. In no event shall any oral agreements, promises, actions,
inactions, knowledge, course of conduct, course of dealing, or the like be
effective to amend, terminate, extend or otherwise modify this Note or any of
the other Loan Documents.
17. Rights of the Holder.
This Note and the rights and remedies provided for herein may be
enforced by Lender or any subsequent holder hereof. Wherever the context permits
each reference to the term "holder" herein shall mean and refer to Lender or the
then subsequent holder of this Note.
Page 13
18. Right to Pledge.
Lender may at any time pledge all or any portion of its rights under
the Loan Documents including any portion of this Note to any of the twelve (12)
Federal Reserve Banks organized under Section 4 of the Federal Reserve Act, 12
U.S.C. Section 341. No such pledge or enforcement thereof shall release Lender
from its obligations under any of the Loan Documents.
19. Setoff
Lender shall have the rights of set-off provided for in the Revolving
Credit Agreement.
IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed
as of the date set forth above as a sealed instrument.
Witness: TANGER PROPERTIES LIMITED
PARTNERSHIP
By its General Partner,
- -----------------
Tanger Factory Outlet Centers,
Inc.
By:___________________________
Name: Stanley K. Tanger
Title: Chairman of the Board
and Chief Executive Officer
Page 14
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT, dated as of December18, 1997 (the "Guaranty"),
is given by TANGER FACTORY OUTLET CENTERS, INC., a North Carolina corporation,
with its principal offices located at 1400 West Northwood Street, Greensboro,
North Carolina 27408 (the "Guarantor"); and extended to FLEET NATIONAL BANK,
national banking association, with its principal offices located at 75 State
Street, Boston, Massachusetts 02109, (the "Lender") for the benefit of TANGER
PROPERTIES LIMITED PARTNERSHIP, a limited partnership organized under the laws
of the State of North Carolina, with its principal offices located at 1400 West
Northwood Street, Greensboro, North Carolina 27408 (the "Borrower").
RECITALS:
1. The Lender has agreed to establish, in accordance with the terms and
provisions of, amongst other documents, a certain Revolving Credit Agreement of
even date herewith (as amended, modified, renewed or extended from time to time,
the "Revolving Credit Agreement) and a certain Promissory Note of even date (as
amended, modified, renewed, or extended from time to time (the "Note"), a
certain revolving credit facility (the "Facility") in the maximum amount of
$25,000,000.00, the proceeds of which are to be used by the Borrower for the
development or acquisition of additional properties by the Borrower, the
expansion and improvement of any properties of the Borrower, supporting working
capital needs, and the repayment of any other indebtedness of the Borrower. All
of the definitions used in the Note and the Revolving Credit Agreement are
hereby incorporated herein by reference and shall have the meaning set forth in
the Note and the Revolving Credit Agreement unless otherwise defined herein.
2. The Guarantor is the sole general partner of the Borrower.
3. Without this Guaranty the Lender would be unwilling to establish the
Facility and make Advances thereunder to Borrower.
4. Because of the direct benefit to the Guarantor from the
establishment of the Facility for the use of the Borrower, the Guarantor agrees
to guarantee to the Lender the Obligations.
NOW THEREFORE, in consideration of the Lender entering into the
Revolving Credit Agreement and establishing the Facility and making the Advances
thereunder to the Borrower, and subject to the covenants and conditions of
Section 20 below:
1. Guaranty of Payment. The Guarantor hereby unconditionally guarantees
to the Lender the payment, when due, by acceleration or otherwise, of the
Obligations. For the purposes hereof, the term "Obligations" shall have the
meaning ascribed to it under the Revolving Credit Agreement and include, without
limitation, Advances under the Facility, whether existing now or arising
hereafter.
2. Guaranty of Performance. The Guarantor additionally unconditionally
guarantees the Lender the timely performance of all other liabilities and
obligations of the Borrower under the Revolving Credit Agreement and all of the
Loan Documents.
In the event of the occurrence of an Event of Default as defined in the
Revolving Credit Agreement relating to any of the foregoing conditions, and
without the necessity of any notice from the Lender to the Guarantor, the
Guarantor agrees to indemnify and hold the Lender harmless from any and all
loss, cost, liability or expense the Lender may suffer by reason of any such
event. The Lender shall accept performance by the Guarantor of the Obligations
under the Revolving Credit Agreement and the Loan Documents, and so long as all
of said Obligations are being performed by
the Borrower or the Guarantor and there is occurring no other Event of Default,
the Lender will make the Facility proceeds available under the terms of the
Revolving Credit Agreement, the Note, and the Loan Documents.
3. Subordination. Upon the occurrence and during the continuance of any
Event of Default as defined in the Revolving Credit Agreement, no payments shall
be made by Borrower or received by the Guarantor on any indebtedness, now or
hereafter existing, of the Borrower to the Guarantor.
4. Waiver of Rights. Subject to all other provisions of this Guaranty,
including, but not limited to, Section 20, the Guarantor expressly waives and
relinquishes to the fullest extent now or hereafter not prohibited by applicable
law, with respect to the Obligations and the Loan Documents: (a) notice of
acceptance of this Guaranty by the Lender and of all extensions of credit
pursuant to the Revolving Credit Agreement, the Note, and the Loan Documents to
the Borrower by the Lender; (b) presentment and demand for payment of any of the
Obligations; (c) demand for payment under this Guaranty; (d) all suretyship
defenses and defenses in the nature thereof , (e) any right or claim of right to
cause a marshalling of the assets of the Borrower, or to cause Lender to proceed
against any of the other security for the Obligations before proceeding under
this Guaranty against the Guarantor, or if there shall be more than one
guarantor, to require Lender to proceed against any other guarantor or any of
such guarantors in any particular order, (f) notice of the acceptance hereof,
presentment, demand for payment, protest, notice of protest, notice of dishonor,
or any and all notice of nonpayment, nonperformance, nonobservance or default,
or other proof or notice of demand whereby to charge Guarantor therefor; and (g)
any right to assert against the Lender, as a defense, counterclaim, set-off, or
cross-claim any defense (legal or equitable), set-off, counterclaim or claim
which the Guarantor may now or hereafter have against the Lender or the
Borrower. Such waiver shall not prevent the Guarantor from asserting against the
Lender in a separate action, any claim, action cause of action, or demand that
the Guarantor might have arising out of this Guaranty or the Revolving Credit
Agreement, the Note or any other Loan Documents, to the extent not arising out
of a suretyship defense or any other claim otherwise waived pursuant to
subparagraphs (a), (b), (c), (e), (f), or (g), above.
Guarantor and Lender (evidenced by the acceptance of this Guaranty)
mutually hereby knowingly, voluntarily and intentionally waives the right to a
trial by jury in respect of any litigation based on this Guaranty, arising out
of, under or in connection with this Guaranty or any of the other Loan Documents
or, in connection with this Guaranty, any course of conduct, course of dealings,
statements, (whether verbal or written) or actions of any party. This waiver is
given as a material inducement to Lender to accept this Guaranty and to
establish the Facility.
5. Primary Liability of the Guarantor. The Guarantor agrees that this
Guaranty may be enforced by the Lender. The Guarantor further agrees that
nothing contained herein shall prevent the Lender, from suing on the Note or
from exercising any other rights available to it under the Note, the Revolving
Credit Agreement, or any other instrument evidencing the Obligations if neither
the Borrower nor the Guarantor timely performs the Obligations, and the exercise
of any of the aforesaid rights shall not constitute a discharge of any of the
Guarantor's obligations hereunder, it being the purpose and intent of the
Guarantor that the Guarantor's obligations hereunder shall be absolute,
independent and unconditional under any and all circumstances. Neither the
Guarantor's obligations under the Guaranty nor any remedy for the enforcement
thereof shall be impaired, modified, changed or released in any manner
whatsoever by an impairment, modification, change, release or limitation of the
liability of the Borrower or any co-guarantor or by reason of the Borrower's or
any co- guarantor's bankruptcy or insolvency. The Guarantor acknowledges that
the term "Obligations" as used herein includes any payments made by the Borrower
to the Lender and subsequently recovered by the Borrower or a trustee for the
Borrower pursuant to the Borrower's bankruptcy or insolvency. At any time the
Lender is entitled to exercise its remedies hereunder, it may in its discretion
elect
-2-
to demand payment or performance. In the event the Lender elects to demand
performance, it shall at all times thereafter have the right to demand payment
until all of the Obligations have been paid in full. In the event the Lender
elects to demand payment, it shall at all times thereafter have the right to
demand performance until all of the Obligations have been paid in full.
6. No Impairment. Subject to all other provisions of this Guaranty,
including, but not limited to, Section 20, the liability of Guarantor hereunder
shall in no way be limited or impaired by, and Guarantor hereby assents to and
agrees to be bound by, any amendment or modification of the provisions of the
Loan Documents to or with Lender by Borrower or any other Guarantor. In
addition, the liability for the repayment of the Obligations to the Lender of
Guarantor under this Guaranty and the other Loan Documents shall in no way be
limited or impaired by:
A. any extensions of time for performance required by
any of the Loan Documents;
B. any amendment to or modification of any of the
Loan Documents;
C. any sale or assignment of the Loan;
D. the accuracy or inaccuracy of any of the
representations or warranties made by or on behalf
of Borrower, any general partner of Borrower, or
Guarantor, under any Loan Document or otherwise;
E. the release of Borrower, or any other person or
entity, from performance or observance of any of
the agreements, covenants, terms or conditions
contained in any of the Loan Documents by
operation of law, Lender's voluntary act, or
otherwise;
F. the filing of any bankruptcy or reorganization
proceeding by or against Borrower;
G. the release of any other party now or hereafter
liable upon or in respect of this Guaranty or any
of the other Loan Documents; or
H. the invalidity or unenforceability of all or any
portion of any of the Loan Documents as to
Borrower or any other person or entity.
Any of the foregoing may be accomplished with or without
notice to Borrower, or any Guarantor and with or without
consideration
7. Waiver of Subrogation Rights. The Guarantor agrees that (i) during
the period prior to the payment in full of the Obligations the Guarantor shall
have no rights of subrogation, reimbursement, contribution, exoneration or
indemnity whatsoever against Borrower for the Guarantor's payment to the Lender
of the Guarantor's obligation under this Guaranty (hereinafter referred to as
the "Rights"), and (ii) the Guarantor waives and renounces but only during the
period set forth in (i) above any Rights the Guarantor has or may have against
the Borrower for the Guarantor's payment to the Lender of Guarantor's
obligations under this Guaranty. This waiver is expressly intended to prevent
the existence of any claim (as defined in the Bankruptcy Code) in respect of
such Rights by the Guarantor and to prevent the Guarantor from being a creditor
of Borrower due to such Rights unless the Lender has received payment in full of
the Obligations.
8. Attorney's Fees and Costs of Collection. If at any time or times
hereafter the Lender employs counsel to pursue collection, to intervene, to sue
for enforcement of the terms hereof or of
-3-
the Revolving Credit Agreement, the Note, or the Loan Documents, or to file a
petition, complaint, answer, motion or other pleading in any suit or proceeding
relating to this Guaranty or the Revolving Credit Agreement, the Note, or the
Loan Documents, then in such event, all of the reasonable attorneys' fees
relating thereto shall be an additional liability of the Guarantor to the
Lender, payable on demand.
9. Term of Guaranty; Warranties. This Guaranty shall continue in full
force and effect until the Obligations are fully paid. This Guaranty covers the
Obligations whether presently outstanding or arising subsequent to the date
hereof including all Advances under the Facility made pursuant to the Revolving
Credit Agreement, the Note, or the Loan Documents. The Guarantor warrants and
represents to the Lender, (i) that this Guaranty is binding upon and enforceable
against the Guarantor, in accordance with its terms, (ii) that the execution and
delivery of this Guaranty do not violate or constitute a breach of any agreement
to which the Guarantor is a party or of any applicable laws, (iii) that there is
no litigation, claim, action or proceeding pending, or to the best knowledge of
the Guarantor, threatened against the Guarantor which would materially adversely
affect the financial condition of the Guarantor or its ability to fulfill its
obligations hereunder. Guarantor agrees to submit to the Lender financial
statements in accordance with the terms and provisions of the Revolving Credit
Agreement. Guarantor agrees to promptly inform the Lender of the adverse
determination of any litigation, claim, action or proceeding or the institution
of any litigation, claim, action or proceeding against Guarantor which does or
could materially adversely affect the financial condition of the Guarantor or
its ability to fulfill its obligations hereunder. This Guaranty is binding on
and enforceable against the Guarantor, its successors and assigns. The Guarantor
represents and warrants that (i) it is a corporation duly organized, existing
and in good standing under the laws of the State of North Carolina, with stock
outstanding that has been duly and validly issued, (ii) it has the corporate
power, authority and legal right to carry on the business now being conducted by
it and to engage in the transactions contemplated by this Guaranty and the Loan
Documents, and (iii) the execution and delivery of this Guaranty and the
performance and observance of the provisions hereof have been duly authorized by
all necessary corporate and, if required, stockholder action.
10. Further Representations and Warranties. The Guarantor further
represents to the Lender that the Guarantor has knowledge of the Borrower's
financial condition and affairs and represents and agrees that it will keep so
informed while the Guaranty is in force. The Guarantor agrees that the Lender
will have no obligation to investigate the financial condition or affairs of the
Borrower for the benefit of the Guarantor nor to advise the Guarantor of any
fact respecting, or any change in, the financial condition or affairs of the
Borrower which might come to the knowledge of the Lender at any time, whether or
not the Lender knows or believes or has reason to know or believe that any such
fact or change is unknown to the Guarantor or might (or does) materially
increase the risk of the Guarantor as guarantor or might (or would) affect the
willingness of the Guarantor to continue as guarantor with respect to the
Obligations.
11. Additional Liability of the Guarantor. If the Guarantor is or
becomes liable for any indebtedness owing by the Borrower to the Lender by
endorsement or otherwise than under this Guaranty, such liability shall not be
in any manner impaired or reduced hereby but shall have all the same force and
effect it would have if this Guaranty had not existed and the Guarantor's
liability hereunder shall not be in any manner impaired or reduced thereby.
12. Cumulative Rights. All rights of the Lender hereunder or otherwise
arising under any documents executed in connection with the Obligations are
separate and cumulative and may be pursued separately, successively or
concurrently, or not pursued, without affecting or limiting any other right of
the Lender and without affecting or impairing the liability of the Guarantor.
-4-
13. Usury. Notwithstanding any other provisions herein contained, no
provision of this Guaranty shall require or permit the collection from the
Guarantor of interest in excess of the maximum rate or amount that the Guarantor
may be required or permitted to pay pursuant to any applicable law.
14. Multiple Counterparts; Pronouns; Captions; Severability. This
Guaranty may be executed in multiple counterparts, each of which shall be deemed
an original but all of which shall constitute but one and the same document. The
pronouns used in this instrument shall be construed as masculine, feminine or
neuter as the occasion may require. Captions are for reference only and in no
way limit the terms of this Guaranty. Invalidation of any one or more of the
provisions of this Guaranty shall in no way affect any of the other provisions
hereof, which shall remain in full force and effect.
15. Lender Assigns. This Guaranty is intended for and shall inure to
the benefit of the Lender and each and every person who shall from time to time
be or become the owner or holder of any of the Obligations, and each and every
reference herein to the "Lender" shall include and refer to each and every
successor or assignee of the Lender at any time holding or owning any part of or
interest in any part of the Obligations.
This Guaranty shall be transferable and negotiable with the same force
and effect and to the same extent, that the Obligations are transferable and
negotiable, it being understood and stipulated that upon assignment or transfer
by the Lender of its rights and duties under the Revolving Credit Agreement or
by the Lender of any of the Obligations, the successor under the Revolving
Credit Agreement, or the legal holder or owner of said Obligations (or a part
thereof or interest therein thus transferred or assigned by the Lender), as the
case may be, shall (except as otherwise stipulated by the Lender in its
assignment) have and may exercise all of the rights granted to the Lender under
this Guaranty to the extent of that part of or interest in the Obligations thus
assigned or transferred to said person. The Guarantor expressly waives notice of
transfer or assignment of the Obligations, or any part thereof, or of the rights
of the Lender hereunder. Failure to give notice will not affect the liability of
the Guarantor hereunder.
16. Application of Payments. The Lender may apply any payments received
by it from any source against that portion of the Obligations (principal,
interest, court costs, attorneys' fees or other) in such priority and fashion as
it may deem appropriate.
17. Notices. All notices required to be given hereunder shall be in
writing and shall be deemed served at the earlier of (i) receipt or (ii)
seventy-two (72) hours after deposit in registered, certified or first-class
United States mail, postage prepaid, or (iii) upon delivery when deposited with
Federal Express, Airborne Express, or other similar courier providing next-day
deliveries, in each case, addressed to the parties at the following addresses,
or such other addresses as may from time to time be designated by written notice
given as herein required.
to the Guarantor:
Tanger Factory Outlet Centers, Inc.
1400 West Northwood Street [zip 27408]
P.O. Box 29168
Greensboro, NC 27429
Attention: Mr. Stanley K. Tanger and
Ms. Virginia Summerell
-5-
to the Lender:
Fleet National Bank
75 State Street
Boston, Massachusetts 02109
Attn: Commercial Real Estate Loan Administration
Personal delivery or any officer, agent or employee of a party at its address
herein shall constitute receipt. Rejection or other refusal to accept or
inability to deliver because of changed address of which no notice has been
received shall also constitute receipt. Notwithstanding the foregoing, no notice
of change of address shall be effective until the date of receipt thereof. This
section shall not be construed in any way to affect or impair any waiver of
notice of demand herein provided or to require giving of notice or demand to or
upon the Guarantor in any situation or for any reason.
18. Governing Law. This Guaranty shall be deemed to be a contract made
under and for all purposes shall be construed in accordance with, the internal
laws and judicial decisions of the Commonwealth of Massachusetts. The Guarantor
and the Lender agree that any dispute arising out of this Guaranty shall be
subject to the jurisdiction of both the state and federal courts in the
Commonwealth of Massachusetts. For that purpose, the Guarantor hereby submits to
the jurisdiction of the state and federal courts of the Commonwealth of
Massachusetts. The Guarantor further agrees to accept service of process out of
any of the before mentioned courts in such dispute by registered or certified
mail addressed to the Guarantor.
19. Federal Tax Identification Number. The Guarantor hereby certifies
to the Lender that the Guarantor's federal tax identification number is
56-1815473.
20. Lender Covenants. Notwithstanding any other provisions of this
Guaranty by accepting this Guaranty Lender warrants, covenants and agrees as
follows: (a) Lender will not institute an action against the Guarantor or
exercise any of Lender's remedies under this Guaranty unless and until an Event
of Default (as defined in the Revolving Credit Agreement) has occurred and is
continuing; (b) the Facility may be prepaid in full without penalty (other than
any payments due as a result of prepaying a Eurodollar Advance (as defined in
the Note) prior to the termination of the then applicable Interest Period (as
defined in the Note) at any time during which an Event of Default has occurred
and is continuing; and (c) Lender will not enforce its rights against the
Guarantor, unless in the same proceeding, the Lender shall also seek recovery
(unless Lender is prohibited, temporarily or permanently, by bankruptcy,
dissolutions, injunction, inability to achieve service of process or other
similar legal impediment) from the Borrower of any outstanding balance due on
the Obligations. Nothing herein shall limit Lender's rights against Guarantor to
pursue only a deficiency judgment or otherwise obligate Lender to take actions
other than as set forth above.
-6-
IN WITNESS WHEREOF, the Guarantor has executed this Guaranty under seal
as of the day and year first above written.
TANGER FACTOR OUTLET CENTERS,
INC.
[CORPORATE SEAL]
By:_________________________________
ATTEST: Stanley K. Tanger
Chairman of the Board
Chief Executive Officer
- ----------------------------
Secretary
STATE OF ____________________
COUNTY OF __________________
The foregoing Guaranty Agreement was sworn to and subscribed before me
this ____ day of __________, 199_, by Stanley K. Tanger, who is personally known
to me, as Chairman of the Board and Chief Executive Officer of Tanger Factory
Outlet Centers, Inc., general partner of Tanger Properties Limited Partnership.
---------------------------------
Print Name:
Notary Public, State of _______________
My Commission Number is: ___________
My Commission Expires:______________
-7-