TEXAS PROMISSORY NOTE
$20,000,000.00
----------------------, 1999
1. DEBT AND PAYMENT. For Value Received, the undersigned, Tanger
Properties Limited Partnership (the "Borrower"), a North Carolina limited
partnership whose sole general partner is Tanger Factory Outlet Centers, Inc., a
North Carolina corporation hereby promises to pay to the order of JOHN HANCOCK
MUTUAL LIFE INSURANCE COMPANY (the "Lender"), a Massachusetts corporation, at
its Home Office at John Hancock Place, Boston, Massachusetts 02117, or at such
other place, or to such other party or parties, as the holder of this Note may
from time to time designate in writing, the principal sum of Twenty Million
Dollars ($20,000,000.00) (the "Loan") with interest to be computed from the date
of disbursement of the proceeds of the Loan at the rate of seven and
seven-eighths percent (7.875%) per annum, payable on the first day of each and
every month beginning May 1, 1999, upon all principal remaining from time to
time unpaid; principal and interest to be paid in installments as follows: One
Hundred Fifty-two Thousand Seven Hundred Ten and 79/100ths Dollars ($152,710.79)
on May 1, 1999 and a like amount on the first day of each and every month
thereafter through April 1, 2009 (the "Maturity Date"), inclusive; provided,
however, that the amount of the final payment aforesaid shall be for the amount
of principal and interest then remaining unpaid. If the Loan proceeds are not
disbursed on the first day of a month, then interest only at the rate specified
above from and including the date of disbursement of the Loan proceeds to the
first day of the month following such disbursement shall be due and payable in
advance on the date of such disbursement.
The Loan is secured by the Texas Deed of Trust and Security Agreement
(the "Texas Deed of Trust"), creating liens and security interests on property
in Hays County, Texas, and the Texas Assignment of Leases (the "Texas
Assignment"), both of even date herewith. Also given in connection with the Loan
is the Texas Indemnification Agreement (the "Texas Indemnification"), also of
even date herewith. This Note, the Texas Deed of Trust, the Texas Assignment and
the Texas Indemnification are hereinafter referred to collectively as the "Loan
Documents". The proceeds of this Note are to be used for business, commercial,
investment or other similar purposes, and no portion thereof will be used for
personal, family or household use.
Unless Lender elects otherwise, all sums received by Lender in payment
under this Note shall be applied first to late charges, costs of collection or
enforcement, expenditures by Lender pursuant to the Loan Documents and similar
amounts, if any, due under this Note or under the other Loan Documents or the
Related Loan Documents (as hereinafter defined), then to interest due and
payable under this Note, and the remainder to principal due and payable under
this Note.
2. RELATED LOANS. The Loan evidenced and secured by the Loan Documents
is made simultaneously with four other loans by Lender to Borrower, all
evidenced by four (4) notes of even date herewith in the following amounts (the
"Related Notes") and secured by first mortgages (or deeds of trust) on factory
outlet centers at the following locations, which loans are hereinafter referred
to collectively as
the "Related Loans", the Related Notes and the other instruments evidencing and
securing the Related Loans (other than the Loan Documents) being referred to
collectively as the "Related Loan Documents":
Location of Center Amount of Loan
------------------ ---------------
West Branch, Ogemaw County, Michigan $ 7,475,000.00
Kittery, York County, Maine 6,700,000.00
Dalton, Whitfield County, Georgia 11,775,000.00
Williamsburg, Iowa County, Iowa 20,550,000.00
3. PERMITTED PREPAYMENT. Except as provided below, Borrower may not
prepay the principal balance of this Note in whole or in part.
Borrower may, on any scheduled payment date on or after April 1, 2003,
and subject to giving Lender not less than thirty (30) days nor more than ninety
(90) days prior written notice, prepay the entire unpaid principal amount of
this Note together with any and all accrued interest and other sums due
hereunder and under any of the other Loan Documents, subject to a prepayment
premium described below and subject to and in accordance with the following
terms and conditions:
A. It shall be a pre-condition of any such prepayment: (i) that all
of the Related Loans shall be prepaid in full in accordance with
the terms of their respective Related Loan Documents
simultaneously with the prepayment in full on the Loan, or (ii)
if no uncured default exists under the Loan or under any of the
Related Loans, that Lender shall, in its sole reasonable
discretion, allow the Loan, either alone or together with one or
more of the Related Loans, to be prepaid in full, provided (a)
that the Related Loans which are not then being prepaid
(hereinafter the "Remaining Related Loans") shall have a ratio
of outstanding principal balance to value of the properties
securing the Remaining Related Loans that, in the aggregate, is
less than or equal to sixty percent (60%) (such loan to value
ratio to be determined as hereinafter provided), and (b) that
the aggregate net operating income ("Net Operating Income") from
the properties securing the Remaining Related Loans shall equal
or exceed 1.30 times the total debt service payable under the
Remaining Related Loans and under any loans ("junior loans")
secured by liens junior to those of the Remaining Related Loans
(without any implication that junior loans are permitted under
the Loan Documents or the Related Loan Documents) (such ratio is
hereinafter referred to as "required debt service coverage" and
shall be determined by Lender, in its sole discretion, as
hereinafter provided).
B. For purposes of the preceding paragraph, property values shall
be determined, at Borrower's election, by one of the following
methods: (i) by an appraisal performed by an appraiser mutually
acceptable to Borrower and Lender with experience in the
appraisal of retail shopping center properties and who is a
Member of the Appraisal Institute, at Borrower's expense, (ii)
by a totally arm's-length bona fide third party offer to
purchase the property in question, subject to approval by
Lender, or (iii) by capitalizing Net Operating Income at a nine
and one-half percent (9.5%) capitalization rate. The Net
Operating Income of such property is to be calculated by the
following formula:
(a) Annualized base rent determined from base rent actually
received in the most recent three (3) month period under
then existing leases;
(b) Less customary non-reimbursed operating expenses at market
rates then currently applicable to factory outlet centers;
(c) Less a reserve equal to ten cents ($.10) times the number
of gross leasable square feet of floor area of the
buildings on the subject property.
For purposes of determining whether the required debt service
coverage test is satisfied by the Net Operating Income from the
properties securing the Remaining Related Loans, the Net
Operating Income of all remaining properties, determined in
accordance with the foregoing formula, shall be divided by the
annual debt service payable under the Remaining Related Loans
(and any junior loans) secured by those properties.
C. If the conditions set forth in this Section 3 are satisfied, the
prepayment premium with respect to the Loan shall be equal to
the greater of: (i) the positive amount, if any, equal to (a)
the sum of the present values of all scheduled payments due
under this Note from the date on which prepayment is to be made
(the "Prepayment Date") to and including the maturity date of
this Note, less (b) the principal balance of this Note
immediately prior to ---- such prepayment; or (ii) an amount
equal to one percent (1%) of the principal balance of this Note
immediately prior to such prepayment. All present values shall
be calculated as of the Prepayment Date, using a discount rate,
compounded monthly, equal to the yield rate, converted to its
monthly equivalent, of the United States Treasury Security
having the closest maturity date to the maturity date of this
Note, as established in the Wall Street Journal or other
business publication of general circulation five (5) business
days prior to the Prepayment Date.
Provided no default existing under any of the Loan Documents or
Related Loan Documents, the prepayment premium shall not be
applicable to a prepayment resulting from Lender's election to
require insurance loss proceeds or condemnation awards to be
applied to a payment of principal.
No partial prepayment shall be allowed.
The principal balance of this Note may be prepaid in full without
premium during the last one hundred twenty (120) days of the term of this Note.
4. INTEREST AFTER DEFAULT; ACCELERATION. While any default exists in the
making of any of said payments or in the performance or observance of any of the
covenants or agreements of this Note, or of any of the other Loan Documents, or
of any of the Related Loan Documents, including, without limitation, failure to
make payment in full of all amounts due under this Note or any of the other Loan
Documents or under any Related Loan Documents, by the Maturity Date, the
undersigned further promises to pay, on each monthly payment date, additional
interest on the principal balance of this Note then outstanding at the rate
representing the difference between the aforesaid rate and twelve and
seven-eighths percent (12.875%) per annum, provided that any additional interest
which has accrued shall be paid at the time of and as a condition precedent to
the curing of any default. Upon any default under this Note, the other Loan
Documents, or the Related Loan Documents which shall continue uncured after the
expiration of any applicable notice or cure period, the holder of this Note may
apply payments received on any amounts due hereunder or under the terms of the
Loan Documents or the Related Loan Documents as said holder may determine and,
if the holder of this Note so elects, notice of election being expressly waived,
the principal remaining unpaid with accrued interest and all other amounts due
hereunder shall at once become due and payable.
5. PAYMENT AFTER DEFAULT AND ACCELERATION. Borrower acknowledges that
the Loan evidenced hereby was made on the basis and assumption that Lender would
receive the payments of principal and interest set forth herein for the full
term of the Loan. Therefore, whenever the maturity of the Loan has been
accelerated by reason of a default under this Note, any of the other Loan
Documents or the Related Loan Documents which has continued uncured beyond the
expiration of any applicable notice or cure period, which default occurs prior
to the time period, if any, in which prepayment is allowed, including an
acceleration by reason of sale, conveyance, further encumbrance or other default
(which acceleration shall be at Lender's sole option), there shall be due, in
addition to the outstanding principal balance, accrued interest and other sums
due under this Note and the Loan Documents (subject, however, to all provisions
of the Loan Documents limiting interest payable under the Loan to the maximum
amount permitted by applicable law), a premium equal to the greater of:
A. The sum obtained by:
(i) Multiplying the then outstanding principal balance due by
the difference obtained by subtracting the yield rate on
publicly traded United States Treasury Securities (as
published in the Wall Street Journal or other business
publication of general circulation five (5) business days
prior to the date of said payment) having the closest
matching maturity date to the Maturity Date from the
interest rate on this Note adjusted to its semi-annual
equivalent rate (8.005%), times the number of scheduled
monthly payments remaining in the term of this Note,
divided by twelve; and
(ii) Adding an amount equal to five percent (5%) of the then
outstanding principal balance; or
B. An amount equal to ten percent (10%) of the then outstanding
principal balance.
In the event such default or acceleration occurs on or after the date on
which prepayment is permitted under Section 3 of this Note and the preconditions
to such prepayment set forth in Section 3(A) are satisfied, then in lieu of the
above-described premium, payment of a premium calculated in the manner set forth
in Section 3(C), shall be required. In the event the yield rate on publicly
traded United States Treasury Securities is not obtainable, then the nearest
equivalent issue or index shall be selected, at Lender's reasonable
determination, and used in calculating the premium hereunder.
A tender of the amount necessary to satisfy the entire indebtedness
evidenced hereby, paid at any time following such default or acceleration,
including at a foreclosure sale, shall be deemed a voluntary prepayment, and, at
Lender's option, such payment shall include a premium as described above.
6. WAIVERS. The undersigned waives presentment, protest and demand,
notice of protest, demand and dishonor and non-payment of this Note, notice of
intention to accelerate the maturity of this Note, and notice of acceleration,
and agrees to pay all costs of collection when incurred, including attorneys'
and paralegals' fees, and to perform and comply with each of the covenants,
conditions, provisions and agreements of the undersigned contained in every Loan
Document. No extension of the time for the payment of this Note or any
installment hereof made by agreement with any person now or hereafter liable for
the payment of this Note shall operate to release, discharge, modify, change or
affect the original liability under this Note, either in whole or in part, of
any of the undersigned not a party to such agreement. Notwithstanding any
provision herein or in any Loan Document, the total liability for payments in
the nature of interest shall not exceed the limits now imposed by the usury laws
of the State of Texas.
7. LIMITATION ON LIABILITY. In any action brought to enforce the
obligation of the parties executing the Loan Documents to pay the indebtedness
or perform the other obligations evidenced or secured by the Loan Documents, the
judgment or decree shall be enforceable against such parties only to the extent
of their interests in the properties, rights, estates and interests covered by
the Texas Deed of Trust, the other Loan Documents and the Related Loan Documents
(all such properties, rights, estates and interests are hereinafter referred to
as the "Security"), and any such judgment shall not be subject to execution on,
nor be a lien on, assets of such parties other than their interests in the
Security. Notwithstanding the foregoing, Borrower shall be personally liable to
Lender for: (i) fraud, intentional misrepresentation and waste; (ii) any rents,
issues or profits collected more than one (1) month in advance of their due
dates; (iii) any misapplication of security deposits, insurance proceeds, or
condemnation awards or other sums of like nature to condemnation awards; (iv)
liability under any environmental covenants, conditions and indemnity contained
in the Loan Documents or Related Loan Documents and in any separate
environmental indemnity agreement;
(v) failure to pay real estate taxes or assessments, or failure to pay valid
mechanic's liens; (vi) reasonable attorneys' fees, court costs and other
expenses incurred by Lender if Lender prevails in any legal matter; and (vii)
after a default which has continued uncured beyond the expiration of any
applicable notice or cure period, misapplication of any rents and other
payments, including, without limitation, both base and percentage rents,
contributions of tenants and lease termination fees, received from tenants
under space leases of the Security.
8. SECURITY, CROSS-DEFAULT, CROSS-COLLATERALIZATION, GOVERNING LAW. This
Note is given for a loan of Twenty Million Dollars ($20,000,000.00) and is
secured by (i) the Texas Deed of Trust; (ii) the Texas Assignment; (iii) the
other Loan Documents other than this Note; and (iv) the Related Loan Documents
other than the Related Notes. The Loan and the Related Loans are all secured by,
and are entitled to the benefits of, the Texas Deed of Trust, the Texas
Assignment, the other Loan Documents and the Related Loan Documents. It is the
express intention of Borrower and Lender that the Loan and each of the Related
Loans be, and they hereby are, cross-defaulted and cross-collateralized.
Accordingly, a default under this Note or the other Loan Documents will
constitute an event of default under the Related Loan Documents, and a default
under any of the Related Loan Documents will constitute an event of default
under this Note and the other Loan Documents. This Note shall be governed by and
construed in accordance with the laws of the State of Texas.
WITNESS the execution and delivery hereof under seal on the day and year
first above written.
TANGER PROPERTIES LIMITED
PARTNERSHIP
By: Tanger Factory Outlet Centers,
Inc., Its Sole General Partner
Attest:----------------------- By:------------------------------
Secretary/Assistant Secretary
Attest and Witness Name: Stanley K. Tanger
Title: Chairman of the Board and
(Corporate Seal) Chief Executive Officer
IOWA PROMISSORY NOTE
$20,550,000.00 -----------------, 1999
1. Debt and Payment. For Value Received, the undersigned, Tanger
Properties Limited Partnership, a North Carolina limited partnership (the
"Borrower") hereby promises to pay to the order of John Hancock Mutual Life
Insurance Company (the "Lender"), a Massachusetts corporation, at its Home
Office at John Hancock Place, Boston, Massachusetts 02117, or at such other
place, or to such other party or parties, as the holder of this Note may from
time to time designate in writing, the principal sum of Twenty Million Five
Hundred Fifty Thousand Dollars ($20,550,000.00) (the "Loan") with interest to be
computed from the date of disbursement of the proceeds of the Loan at the rate
of seven and seven-eighths percent (7.875%) per annum, payable on the first day
of each and every month beginning May 1, 1999, upon all principal remaining from
time to time unpaid; principal and interest to be paid in installments as
follows: One Hundred Fifty-six Thousand Nine Hundred Ten and 34/100ths Dollars
($156,910.34) on May 1, 1999 and a like amount on the first day of each and
every month thereafter through April 1, 2009 (the "Maturity Date"), inclusive;
provided, however, that the amount of the final payment aforesaid shall be for
the amount of principal and interest then remaining unpaid. If the Loan proceeds
are not disbursed on the first day of a month, then interest only at the rate
specified above from and including the date of disbursement of the Loan proceeds
to the first day of the month following such disbursement shall be due and
payable in advance on the date of such disbursement.
The Loan is secured by the Iowa Mortgage Security Agreement and Fixture
Financing Statement (the "Iowa Mortgage") and the Iowa Assignment of Leases and
Rents (the "Iowa Assignment"), both of even date herewith. Also given in
connection with the Loan is the Iowa Indemnification Agreement (the "Iowa
Indemnification"), also of even date herewith. This Note, the Iowa Mortgage, the
Iowa Assignment and the Iowa Indemnification are hereinafter referred to
collectively as the "Loan Documents".
Unless Lender elects otherwise, all sums received by Lender in payment
under this Note shall be applied first to late charges, costs of collection or
enforcement, expenditures by Lender pursuant to the Loan Documents and similar
amounts, if any, due under this Note or under the other Loan Documents or the
Related Loan Documents (as hereinafter defined), then to interest due and
payable under this Note, and the remainder to principal due and payable under
this Note.
2. Related Loans. The Loan evidenced and secured by the Loan Documents
is made simultaneously with four other loans by Lender to Borrower, all
evidenced by four (4) notes of even date herewith in the following amounts (the
"Related Notes") and secured by first mortgages (or deeds of trust) on factory
outlet centers at the following locations, which loans are hereinafter referred
to collectively as the "Related Loans", the Related Notes and the other
instruments evidencing and securing the Related Loans (other than the Loan
Documents) being referred to collectively as the "Related Loan Documents":
Location of Center Amount of Loan
------------------ ----------------
San Marcos, Hays County, Texas $20,000,000.00
West Branch, Ogemaw County, Michigan 7,475,000.00
Kittery, York County, Maine 6,700,000.00
Dalton, Whitfield County, Georgia 11,775,000.00
3. Permitted Prepayment. Except as provided below, Borrower may not
prepay the principal balance of this Note in whole or in part.
Borrower may, on any scheduled payment date on or after April 1, 2003,
and subject to giving Lender not less than thirty (30) days nor more than ninety
(90) days prior written notice, prepay the entire unpaid principal amount of
this Note together with any and all accrued interest and other sums due
hereunder and under any of the other Loan Documents, subject to a prepayment
premium described below and subject to and in accordance with the following
terms and conditions:
A. It shall be a pre-condition of any such prepayment: (i) that all
of the Related Loans shall be prepaid in full in accordance with
the terms of their respective Related Loan Documents
simultaneously with the prepayment in full on the Loan, or (ii)
if no uncured default exists under the Loan or under any of the
Related Loans, that Lender shall, in its sole reasonable
discretion, allow the Loan, either alone or together with one or
more of the Related Loans, to be prepaid in full, provided (a)
that the Related Loans which are not then being prepaid
(hereinafter the "Remaining Related Loans") shall have a ratio
of outstanding principal balance to value of the properties
securing the Remaining Related Loans that, in the aggregate, is
less than or equal to sixty percent (60%) (such loan to value
ratio to be determined as hereinafter provided), and (b) that
the aggregate net operating income ("Net Operating Income") from
the properties securing the Remaining Related Loans shall equal
or exceed 1.30 times the total debt service payable under the
Remaining Related Loans and under any loans ("junior loans")
secured by liens junior to those of the Remaining Related Loans
(without any implication that junior loans are permitted under
the Loan Documents or the Related Loan Documents) (such ratio is
hereinafter referred to as "required debt service coverage" and
shall be determined by Lender, in its sole discretion, as
hereinafter provided).
B. For purposes of the preceding paragraph, property values shall
be determined, at Borrower's election, by one of the following
methods: (i) by an appraisal performed by an appraiser mutually
acceptable to Borrower and Lender with experience in the
appraisal of retail shopping center properties and who is a
Member of the Appraisal Institute, at Borrower's expense, (ii)
by a totally arm's-length bona fide third party offer to
purchase the property in question, subject to approval by
Lender, or (iii) by capitalizing Net Operating Income at a nine
and one-half percent
(9.5%) capitalization rate. The Net Operating Income of such
property is to be calculated by the following formula:
(a) Annualized base rent determined from base rent actually
received in the most recent three (3) month period under
then existing leases;
(b) Less customary non-reimbursed operating expenses at market
rates then currently applicable to factory outlet centers;
(c) Less a reserve equal to ten cents ($.10) times the number
of gross leasable square feet of floor area of the
buildings on the subject property.
For purposes of determining whether the required debt service
coverage test is satisfied by the Net Operating Income from the
properties securing the Remaining Related Loans, the Net
Operating Income of all remaining properties, determined in
accordance with the foregoing formula, shall be divided by the
annual debt service payable under the Remaining Related Loans
(and any junior loans) secured by those properties.
C. If the conditions set forth in this Section 3 are satisfied, the
prepayment premium with respect to the Loan shall be equal to
the greater of: (i) the positive amount, if any, equal to (a)
the sum of the present values of all scheduled payments due
under this Note from the date on which prepayment is to be made
(the "Prepayment Date") to and including the maturity date of
this Note, less (b) the principal balance of this Note
immediately prior to such prepayment; or (ii) an amount equal to
one percent (1%) of the principal balance of this Note
immediately prior to such prepayment. All present values shall
be calculated as of the Prepayment Date, using a discount rate,
compounded monthly, equal to the yield rate, converted to its
monthly equivalent, of the United States Treasury Security
having the closest maturity date to the maturity date of this
Note, as established in the Wall Street Journal or other
business publication of general circulation five (5) business
days prior to the Prepayment Date.
Provided no default existing under any of the Loan Documents or
Related Loan Documents, the prepayment premium shall not be
applicable to a prepayment resulting from Lender's election to
require insurance loss proceeds or condemnation awards to be
applied to a payment of principal.
No partial prepayment shall be allowed.
The principal balance of this Note may be prepaid in full without
premium during the last one hundred twenty (120) days of the term of this Note.
4. Interest After Default; Acceleration. While any default exists in the
making of any of said payments or in the performance or observance of any of the
covenants or agreements of this Note, or of any of the other Loan Documents, or
of any of the Related Loan Documents, including, without limitation, failure to
make payment in full of all amounts due under this Note or any of the other Loan
Documents or under any Related Loan Documents, by the Maturity Date, the
undersigned further promises to pay, on each monthly payment date, additional
interest on the principal balance of this Note then outstanding at the rate
representing the difference between the aforesaid rate and twelve and
seven-eighths percent (12.875%) per annum, provided that any additional interest
which has accrued shall be paid at the time of and as a condition precedent to
the curing of any default. Upon any default under this Note, the other Loan
Documents, or the Related Loan Documents which shall continue uncured after the
expiration of any applicable notice or cure period, the holder of this Note may
apply payments received on any amounts due hereunder or under the terms of the
Loan Documents or the Related Loan Documents as said holder may determine and,
if the holder of this Note so elects, notice of election being expressly waived,
the principal remaining unpaid with accrued interest and all other amounts due
hereunder shall at once become due and payable.
5. Payment After Default And Acceleration. Borrower acknowledges that
the Loan evidenced hereby was made on the basis and assumption that Lender would
receive the payments of principal and interest set forth herein for the full
term of the Loan. Therefore, whenever the maturity of the Loan has been
accelerated by reason of a default under this Note, any of the other Loan
Documents or the Related Loan Documents which has continued uncured beyond the
expiration of any applicable notice or cure period, which default occurs prior
to the time period, if any, in which prepayment is allowed, including an
acceleration by reason of sale, conveyance, further encumbrance or other default
(which acceleration shall be at Lender's sole option), there shall be due, in
addition to the outstanding principal balance, accrued interest and other sums
due under this Note and the Loan Documents, a premium equal to the greater of:
A. The sum obtained by:
(i) Multiplying the then outstanding principal balance due by
the difference obtained by subtracting the yield rate on
publicly traded United States Treasury Securities (as
published in the Wall Street Journal or other business
publication of general circulation five (5) business days
prior to the date of said payment) having the closest
matching maturity date to the Maturity Date from the
interest rate on this Note adjusted to its semi-annual
equivalent rate (8.005%), times the number of scheduled
monthly payments remaining in the term of this Note,
divided by twelve; and
(ii) Adding an amount equal to five percent (5%) of the then
outstanding principal balance; or
B. An amount equal to ten percent (10%) of the then outstanding
principal balance.
In the event such default or acceleration occurs on or after the date on
which prepayment is permitted under Section 3 of this Note and the preconditions
to such prepayment set forth in Section 3(A) are satisfied, then in lieu of the
above-described premium, payment of a premium calculated in the manner set forth
in Section 3(C), shall be required. In the event the yield rate on publicly
traded United States Treasury Securities is not obtainable, then the nearest
equivalent issue or index shall be selected, at Lender's reasonable
determination, and used in calculating the premium hereunder.
A tender of the amount necessary to satisfy the entire indebtedness
evidenced hereby, paid at any time following such default or acceleration,
including at a foreclosure sale, shall be deemed a voluntary prepayment, and, at
Lender's option, such payment shall include a premium as described above.
6. Waivers. The undersigned waives presentment, protest and demand,
notice of protest, demand and dishonor and non-payment of this Note, notice of
intention to accelerate the maturity of this Note, and notice of acceleration,
and agrees to pay all costs of collection when incurred, including attorneys'
and paralegals' fees, and to perform and comply with each of the covenants,
conditions, provisions and agreements of the undersigned contained in every Loan
Document. No extension of the time for the payment of this Note or any
installment hereof made by agreement with any person now or hereafter liable for
the payment of this Note shall operate to release, discharge, modify, change or
affect the original liability under this Note, either in whole or in part, of
any of the undersigned not a party to such agreement. Notwithstanding any
provision herein or in any Loan Document, the total liability for payments in
the nature of interest shall not exceed the limits now imposed by the usury laws
of the State of Iowa.
7. Limitation on Liability. In any action brought to enforce the
obligation of the parties executing the Loan Documents to pay the indebtedness
or perform the other obligations evidenced or secured by the Loan Documents, the
judgment or decree shall be enforceable against such parties only to the extent
of their interests in the properties, rights, estates and interests covered by
the Iowa Mortgage, the other Loan Documents and the Related Loan Documents (all
such properties, rights, estates and interests are hereinafter referred to as
the "Security"), and any such judgment shall not be subject to execution on, nor
be a lien on, assets of such parties other than their interests in the Security.
Notwithstanding the foregoing, Borrower shall be personally liable to Lender
for: (i) fraud, intentional misrepresentation and waste; (ii) any rents, issues
or profits collected more than one (1) month in advance of their due dates;
(iii) any misapplication of security deposits, insurance proceeds, or
condemnation awards or other sums of like nature to condemnation awards; (iv)
liability under any environmental covenants, conditions and indemnity contained
in the Loan Documents or Related Loan Documents and in any separate
environmental indemnity agreement; (v) failure to pay real estate taxes or
assessments, or failure to pay valid mechanic's liens; (vi) reasonable
attorneys' fees, court costs and other expenses incurred by Lender if Lender
prevails in any legal matter; and (vii) after a default which has continued
uncured beyond the expiration of any applicable notice or cure period,
misapplication of
any rents and other payments, including, without limitation,
both base and percentage rents, contributions of tenants and lease termination
fees, received from tenants under space leases of the Security.
8. Security, Cross-Default, Cross-Collateralization, Governing Law. This
Note is given for a loan of Twenty Million Five Hundred Fifty Thousand Dollars
($20,550,000.00) and is secured by (i) the Iowa Mortgage; (ii) the Iowa
Assignment; (iii) the other Loan Documents other than this Note; and (iv) the
Related Loan Documents other than the Related Notes. The Loan and the Related
Loans are all secured by, and are entitled to the benefits of, the Iowa
Mortgage, the Iowa Assignment, the other Loan Documents and the Related Loan
Documents. It is the express intention of Borrower and Lender that the Loan and
each of the Related Loans be, and they hereby are, cross-defaulted and
cross-collateralized. Accordingly, a default under this Note or the other Loan
Documents will constitute an event of default under the Related Loan Documents,
and a default under any of the Related Loan Documents will constitute an event
of default under this Note and the other Loan Documents. This Note shall be
governed by and construed in accordance with the laws of the State of Iowa.
WITNESS the execution and delivery hereof under seal on the day and year
first above written.
TANGER PROPERTIES LIMITED
PARTNERSHIP
By: Tanger Factory Outlet Centers,
Inc., Its Sole General Partner
Attest:------------------- By:--------------------
Secretary/Assistant Secretary
Attest and Witness Name: Stanley K. Tanger
Title: Chairman of the Board
and Chief Executive Officer
(Corporate Seal)
MAINE PROMISSORY NOTE
$6,700,000.00 -------------------, 1999
1. Debt and Payment. For Value Received, the undersigned, Tanger
Properties Limited Partnership, a North Carolina limited partnership (the
"Borrower") hereby promises to pay to the order of John Hancock Mutual Life
Insurance Company (the "Lender"), a Massachusetts corporation, at its Home
Office at John Hancock Place, Boston, Massachusetts 02117, or at such other
place, or to such other party or parties, as the holder of this Note may from
time to time designate in writing, the principal sum of Six Million Seven
Hundred Thousand Dollars ($6,700,000.00) (the "Loan") with interest to be
computed from the date of disbursement of the proceeds of the Loan at the rate
of seven and seven-eighths percent (7.875%) per annum, payable on the first day
of each and every month beginning May 1, 1999, upon all principal remaining from
time to time unpaid; principal and interest to be paid in installments as
follows: Fifty-One Thousand One Hundred Fifty-eight and 12/100ths Dollars
($51,158.12) on May 1, 1999 and a like amount on the first day of each and every
month thereafter through April 1, 2009 (the "Maturity Date"), inclusive;
provided, however, that the amount of the final payment aforesaid shall be for
the amount of principal and interest then remaining unpaid. If the Loan proceeds
are not disbursed on the first day of a month, then interest only at the rate
specified above from and including the date of disbursement of the Loan proceeds
to the first day of the month following such disbursement shall be due and
payable in advance on the date of such disbursement.
The Loan is secured by the Maine Mortgage Deed and Security Agreement
(the "Maine Mortgage") and the Maine Assignment of Leases and Rents (the "Maine
Assignment"), both of even date herewith. Also given in connection with the Loan
is the Maine Indemnification Agreement (the "Maine Indemnification"), also of
even date herewith. This Note, the Maine Mortgage, the Maine Assignment and the
Maine Indemnification are hereinafter referred to collectively as the "Loan
Documents".
Unless Lender elects otherwise, all sums received by Lender in payment
under this Note shall be applied first to late charges, costs of collection or
enforcement, expenditures by Lender pursuant to the Loan Documents and similar
amounts, if any, due under this Note or under the other Loan Documents or the
Related Loan Documents (as hereinafter defined), then to interest due and
payable under this Note, and the remainder to principal due and payable under
this Note.
2. Related Loans. The Loan evidenced and secured by the Loan Documents
is made simultaneously with four other loans by Lender to Borrower, all
evidenced by four (4) notes of even date herewith in the following amounts (the
"Related Notes") and secured by first mortgages (or deeds of trust) on factory
outlet centers at the following locations, which loans are hereinafter referred
to collectively as the "Related Loans", the Related Notes and the other
instruments evidencing and securing the Related Loans (other than the Loan
Documents) being referred to collectively as the "Related Loan Documents":
Location of Center Amount of Loan
San Marcos, Hays County, Texas $20,000,000.00
West Branch, Ogemaw County, Michigan 7,475,000.00
Dalton, Whitfield County, Georgia 11,775,000.00
Williamsburg, Iowa County, Iowa 20,550,000.00
3. Permitted Prepayment. Except as provided below, Borrower may not
prepay the principal balance of this Note in whole or in part.
Borrower may, on any scheduled payment date on or after April 1, 2003,
and subject to giving Lender not less than thirty (30) days nor more than ninety
(90) days prior written notice, prepay the entire unpaid principal amount of
this Note together with any and all accrued interest and other sums due
hereunder and under any of the other Loan Documents, subject to a prepayment
premium described below and subject to and in accordance with the following
terms and conditions:
A. It shall be a pre-condition of any such prepayment: (i) that all
of the Related Loans shall be prepaid in full in accordance with
the terms of their respective Related Loan Documents
simultaneously with the prepayment in full on the Loan, or (ii)
if no uncured default exists under the Loan or under any of the
Related Loans, that Lender shall, in its sole reasonable
discretion, allow the Loan, either alone or together with one or
more of the Related Loans, to be prepaid in full, provided (a)
that the Related Loans which are not then being prepaid
(hereinafter the "Remaining Related Loans") shall have a ratio
of outstanding principal balance to value of the properties
securing the Remaining Related Loans that, in the aggregate, is
less than or equal to sixty percent (60%) (such loan to value
ratio to be determined as hereinafter provided), and (b) that
the aggregate net operating income ("Net Operating Income") from
the properties securing the Remaining Related Loans shall equal
or exceed 1.30 times the total debt service payable under the
Remaining Related Loans and under any loans ("junior loans")
secured by liens junior to those of the Remaining Related Loans
(without any implication that junior loans are permitted under
the Loan Documents or the Related Loan Documents) (such ratio is
hereinafter referred to as "required debt service coverage" and
shall be determined by Lender, in its sole discretion, as
hereinafter provided).
B. For purposes of the preceding paragraph, property values shall
be determined, at Borrower's election, by one of the following
methods: (i) by an appraisal performed by an appraiser mutually
acceptable to Borrower and Lender with experience in the
appraisal of retail shopping center properties and who is a
Member of the Appraisal Institute, at Borrower's expense, (ii)
by a totally arm's-length bona fide third party offer to
purchase the property in question, subject to approval by
Lender, or (iii) by capitalizing Net Operating Income at a nine
and one-half percent (9.5%) capitalization rate. The Net
Operating Income of such property is to be calculated by the
following formula:
(a) Annualized base rent determined from base rent actually
received in the most recent three (3) month period under
then existing leases;
(b) Less customary non-reimbursed operating expenses at market
rates then currently applicable to factory outlet centers;
(c) Less a reserve equal to ten cents ($.10) times the number
of gross leasable square feet of floor area of the
buildings on the subject property.
For purposes of determining whether the required debt service
coverage test is satisfied by the Net Operating Income from the
properties securing the Remaining Related Loans, the Net
Operating Income of all remaining properties, determined in
accordance with the foregoing formula, shall be divided by the
annual debt service payable under the Remaining Related Loans
(and any junior loans) secured by those properties.
C. If the conditions set forth in this Section 3 are satisfied, the
prepayment premium with respect to the Loan shall be equal to
the greater of: (i) the positive amount, if any, equal to (a)
the sum of the present values of all scheduled payments due
under this Note from the date on which prepayment is to be made
(the "Prepayment Date") to and including the maturity date of
this Note, less (b) the principal balance of this Note
immediately prior to such prepayment; or (ii) an amount equal to
one percent (1%) of the principal balance of this Note
immediately prior to such prepayment. All present values shall
be calculated as of the Prepayment Date, using a discount rate,
compounded monthly, equal to the yield rate, converted to its
monthly equivalent, of the United States Treasury Security
having the closest maturity date to the maturity date of this
Note, as established in the Wall Street Journal or other
business publication of general circulation five (5) business
days prior to the Prepayment Date.
Provided no default existing under any of the Loan Documents or
Related Loan Documents, the prepayment premium shall not be
applicable to a prepayment resulting from Lender's election to
require insurance loss proceeds or condemnation awards to be
applied to a payment of principal.
No partial prepayment shall be allowed.
The principal balance of this Note may be prepaid in full without
premium during the last one hundred twenty (120) days of the term of this Note.
4. Interest After Default; Acceleration. While any default exists in the
making of any of said payments or in the performance or observance of any of the
covenants or agreements of this Note, or of any of the other Loan Documents, or
of any
of the Related Loan Documents, including, without limitation, failure to
make payment in full of all amounts due under this Note or any of the other Loan
Documents or under any Related Loan Documents, by the Maturity Date, the
undersigned further promises to pay, on each monthly payment date, additional
interest on the principal balance of this Note then outstanding at the rate
representing the difference between the aforesaid rate and twelve and
seven-eighths percent (12.875%) per annum, provided that any additional interest
which has accrued shall be paid at the time of and as a condition precedent to
the curing of any default. Upon any default under this Note, the other Loan
Documents, or the Related Loan Documents which shall continue uncured after the
expiration of any applicable notice or cure period, the holder of this Note may
apply payments received on any amounts due hereunder or under the terms of the
Loan Documents or the Related Loan Documents as said holder may determine and,
if the holder of this Note so elects, notice of election being expressly waived,
the principal remaining unpaid with accrued interest and all other amounts due
hereunder shall at once become due and payable.
5. Payment After Default And Acceleration. Borrower acknowledges that
the Loan evidenced hereby was made on the basis and assumption that Lender would
receive the payments of principal and interest set forth herein for the full
term of the Loan. Therefore, whenever the maturity of the Loan has been
accelerated by reason of a default under this Note, any of the other Loan
Documents or the Related Loan Documents which has continued uncured beyond the
expiration of any applicable notice or cure period, which default occurs prior
to the time period, if any, in which prepayment is allowed, including an
acceleration by reason of sale, conveyance, further encumbrance or other default
(which acceleration shall be at Lender's sole option), there shall be due, in
addition to the outstanding principal balance, accrued interest and other sums
due under this Note and the Loan Documents, a premium equal to the greater of:
A. The sum obtained by:
(i) Multiplying the then outstanding principal balance due by
the difference obtained by subtracting the yield rate on
publicly traded United States Treasury Securities (as
published in the Wall Street Journal or other business
publication of general circulation five (5) business days
prior to the date of said payment) having the closest
matching maturity date to the Maturity Date from the
interest rate on this Note adjusted to its semi-annual
equivalent rate (8.005%), times the number of scheduled
monthly payments remaining in the term of this Note,
divided by twelve; and
(ii) Adding an amount equal to five percent (5%) of the then
outstanding principal balance; or
B. An amount equal to ten percent (10%) of the then outstanding
principal balance.
In the event such default or acceleration occurs on or after the date on
which prepayment is permitted under Section 3 of this Note and the preconditions
to such prepayment set forth in Section 3(A) are satisfied, then in lieu of the
above-described premium, payment of a premium calculated in the manner set forth
in Section 3(C), shall be required. In the event the yield rate on publicly
traded United States Treasury Securities is not obtainable, then the nearest
equivalent issue or index shall be selected, at Lender's reasonable
determination, and used in calculating the premium hereunder.
A tender of the amount necessary to satisfy the entire indebtedness
evidenced hereby, paid at any time following such default or acceleration,
including at a foreclosure sale, shall be deemed a voluntary prepayment, and, at
Lender's option, such payment shall include a premium as described above.
6. Waivers. The undersigned waives presentment, protest and demand,
notice of protest, demand and dishonor and non-payment of this Note, notice of
intention to accelerate the maturity of this Note, and notice of acceleration,
and agrees to pay all costs of collection when incurred, including attorneys'
and paralegals' fees, and to perform and comply with each of the covenants,
conditions, provisions and agreements of the undersigned contained in every Loan
Document. No extension of the time for the payment of this Note or any
installment hereof made by agreement with any person now or hereafter liable for
the payment of this Note shall operate to release, discharge, modify, change or
affect the original liability under this Note, either in whole or in part, of
any of the undersigned not a party to such agreement. Notwithstanding any
provision herein or in any Loan Document, the total liability for payments in
the nature of interest shall not exceed the limits now imposed by the usury laws
of the State of Maine.
7. Limitation on Liability. In any action brought to enforce the
obligation of the parties executing the Loan Documents to pay the indebtedness
or perform the other obligations evidenced or secured by the Loan Documents, the
judgment or decree shall be enforceable against such parties only to the extent
of their interests in the properties, rights, estates and interests covered by
the Maine Mortgage, the other Loan Documents and the Related Loan Documents (all
such properties, rights, estates and interests are hereinafter referred to as
the "Security"), and any such judgment shall not be subject to execution on, nor
be a lien on, assets of such parties other than their interests in the Security.
Notwithstanding the foregoing, Borrower shall be personally liable to Lender
for: (i) fraud, intentional misrepresentation and waste; (ii) any rents, issues
or profits collected more than one (1) month in advance of their due dates;
(iii) any misapplication of security deposits, insurance proceeds, or
condemnation awards or other sums of like nature to condemnation awards; (iv)
liability under any environmental covenants, conditions and indemnity contained
in the Loan Documents or Related Loan Documents and in any separate
environmental indemnity agreement; (v) failure to pay real estate taxes or
assessments, or failure to pay valid mechanic's liens; (vi) reasonable
attorneys' fees, court costs and other expenses incurred by Lender if Lender
prevails in any legal matter; and (vii) after a default which has continued
uncured beyond the expiration of any applicable notice or cure period,
misapplication of any rents and other payments, including, without limitation,
both base
and percentage rents, contributions of tenants and lease termination
fees, received from tenants under space leases of the Security.
8. Security, Cross-Default, Cross-Collateralization, Governing Law. This
Note is given for a loan of Six Million Seven Hundred Thousand Dollars
($6,700,000.00) and is secured by (i) the Maine Mortgage; (ii) the Maine
Assignment; (iii) the other Loan Documents other than this Note; and (iv) the
Related Loan Documents other than the Related Notes. The Loan and the Related
Loans are all secured by, and are entitled to the benefits of, the Maine
Mortgage, the Maine Assignment, the other Loan Documents and the Related Loan
Documents. It is the express intention of Borrower and Lender that the Loan and
each of the Related Loans be, and they hereby are, cross-defaulted and
cross-collateralized. Accordingly, a default under this Note or the other Loan
Documents will constitute an event of default under the Related Loan Documents,
and a default under any of the Related Loan Documents will constitute an event
of default under this Note and the other Loan Documents. This Note shall be
governed by and construed in accordance with the laws of the State of Maine.
WITNESS the execution and delivery hereof under seal on the day and year
first above written.
TANGER PROPERTIES LIMITED
PARTNERSHIP
By: Tanger Factory Outlet Centers,
Inc., Its Sole General Partner
Attest:--------------------------- By:-------------------------
Secretary/Assistant Secretary
Attest and Witness Name: Stanley K. Tanger
Title: Chairman of the Board
and Chief Executive Officer
(Corporate Seal)
MICHIGAN PROMISSORY NOTE
$7,475,000.00 --------------------, 1999
1. Debt and Payment. For Value Received, the undersigned, Tanger
Properties Limited Partnership, a North Carolina limited partnership (the
"Borrower") having a mailing address of P.O. Box 29168, Greensboro, North
Carolina 27429 or 1400 West Northwood, Greensboro, North Carolina 27408, hereby
promises to pay to the order of John Hancock Mutual Life Insurance Company (the
"Lender"), a Massachusetts corporation, at its Home Office at John Hancock
Place, Boston, Massachusetts 02117, or at such other place, or to such other
party or parties, as the holder of this Note may from time to time designate in
writing, the principal sum of Seven Million Four Hundred Seventy-five Thousand
Dollars ($7,475,000.00) (the "Loan") with interest to be computed from the date
of disbursement of the proceeds of the Loan at the rate of seven and
seven-eighths percent (7.875%) per annum, payable on the first day of each and
every month beginning May 1, 1999, upon all principal remaining from time to
time unpaid; principal and interest to be paid in installments as follows:
Fifty-seven Thousand Seventy-five and 66/100ths Dollars ($57,075.66) on May 1,
1999 and a like amount on the first day of each and every month thereafter
through April 1, 2009 (the "Maturity Date"), inclusive; provided, however, that
the amount of the final payment aforesaid shall be for the amount of principal
and interest then remaining unpaid. If the Loan proceeds are not disbursed on
the first day of a month, then interest only at the rate specified above from
and including the date of disbursement of the Loan proceeds to the first day of
the month following such disbursement shall be due and payable in advance on the
date of such disbursement.
The Loan is secured by the Michigan Mortgage and Security Agreement (the
"Michigan Mortgage") and the Michigan Assignment of Leases and Rents (the
"Michigan Assignment"), both of even date herewith. Also given in connection
with the Loan is the Michigan Indemnification Agreement (the "Michigan
Indemnification"), also of even date herewith. This Note, the Michigan Mortgage,
the Michigan Assignment and the Michigan Indemnification are hereinafter
referred to collectively as the "Loan Documents".
Unless Lender elects otherwise, all sums received by Lender in payment
under this Note shall be applied first to late charges, costs of collection or
enforcement, expenditures by Lender pursuant to the Loan Documents and similar
amounts, if any, due under this Note or under the other Loan Documents or the
Related Loan Documents (as hereinafter defined), then to interest due and
payable under this Note, and the remainder to principal due and payable under
this Note.
2. Related Loans. The Loan evidenced and secured by the Loan Documents
is made simultaneously with four other loans by Lender to Borrower, all
evidenced by four (4) notes of even date herewith in the following amounts (the
"Related Notes") and secured by first mortgages (or deeds of trust) on factory
outlet centers at the following locations, which loans are hereinafter referred
to collectively as the "Related Loans", the Related Notes and the other
instruments evidencing and securing the Related Loans (other than the Loan
Documents) being referred to
collectively as the "Related Loan Documents":
Location of Center Amount of Loan
San Marcos, Hays County, Texas $20,000,000.00
Kittery, York County, Maine 6,700,000.00
Dalton, Whitfield County, Georgia 11,775,000.00
Williamsburg, Iowa County, Iowa 20,550,000.00
3. Permitted Prepayment. Except as provided below, Borrower may not
prepay the principal balance of this Note in whole or in part.
Borrower may, on any scheduled payment date on or after April 1 , 2003,
and subject to giving Lender not less than thirty (30) days nor more than ninety
(90) days prior written notice, prepay the entire unpaid principal amount of
this Note together with any and all accrued interest and other sums due
hereunder and under any of the other Loan Documents, subject to a prepayment
premium described below and subject to and in accordance with the following
terms and conditions:
A. It shall be a pre-condition of any such prepayment: (i) that all
of the Related Loans shall be prepaid in full in accordance with
the terms of their respective Related Loan Documents
simultaneously with the prepayment in full on the Loan, or (ii)
if no uncured default exists under the Loan or under any of the
Related Loans, that Lender shall, in its sole reasonable
discretion, allow the Loan, either alone or together with one or
more of the Related Loans, to be prepaid in full, provided (a)
that the Related Loans which are not then being prepaid
(hereinafter the "Remaining Related Loans") shall have a ratio
of outstanding principal balance to value of the properties
securing the Remaining Related Loans that, in the aggregate, is
less than or equal to sixty percent (60%) (such loan to value
ratio to be determined as hereinafter provided), and (b) that
the aggregate net operating income ("Net Operating Income") from
the properties securing the Remaining Related Loans shall equal
or exceed 1.30 times the total debt service payable under the
Remaining Related Loans and under any loans ("junior loans")
secured by liens junior to those of the Remaining Related Loans
(without any implication that junior loans are permitted under
the Loan Documents or the Related Loan Documents) (such ratio is
hereinafter referred to as "required debt service coverage" and
shall be determined by Lender, in its sole discretion, as
hereinafter provided).
B. For purposes of the preceding paragraph, property values shall
be determined, at Borrower's election, by one of the following
methods: (i) by an appraisal performed by an appraiser mutually
acceptable to Borrower and Lender with experience in the
appraisal of retail shopping center properties and who is a
Member of the Appraisal Institute, at Borrower's expense, (ii)
by a totally arm's-length bona fide third party offer to
purchase the property in question, subject to approval by
Lender, or (iii) by capitalizing Net Operating Income at a nine
and one-half percent (9.5%) capitalization rate. The Net
Operating Income of such property is to be calculated by the
following formula:
(a) Annualized base rent determined from base rent actually
received in the most recent three (3) month period under
then existing leases;
(b) Less customary non-reimbursed operating expenses at market
rates then currently applicable to factory outlet centers;
(c) Less a reserve equal to ten cents ($.10) times the number
of gross leasable square feet of floor area of the
buildings on the subject property.
For purposes of determining whether the required debt service
coverage test is satisfied by the Net Operating Income from the
properties securing the Remaining Related Loans, the Net
Operating Income of all remaining properties, determined in
accordance with the foregoing formula, shall be divided by the
annual debt service payable under the Remaining Related Loans
(and any junior loans) secured by those properties.
C. If the conditions set forth in this Section 3 are satisfied, the
prepayment premium with respect to the Loan shall be equal to
the greater of: (i) the positive amount, if any, equal to (a)
the sum of the present values of all scheduled payments due
under this Note from the date on which prepayment is to be made
(the "Prepayment Date") to and including the maturity date of
this Note, less (b) the principal balance of this Note
immediately prior to such prepayment; or (ii) an amount equal to
one percent (1%) of the principal balance of this Note
immediately prior to such prepayment. All present values shall
be calculated as of the Prepayment Date, using a discount rate,
compounded monthly, equal to the yield rate, converted to its
monthly equivalent, of the United States Treasury Security
having the closest maturity date to the maturity date of this
Note, as established in the Wall Street Journal or other
business publication of general circulation five (5) business
days prior to the Prepayment Date.
Provided no default existing under any of the Loan Documents or
Related Loan Documents, the prepayment premium shall not be
applicable to a prepayment resulting from Lender's election to
require insurance loss proceeds or condemnation awards to be
applied to a payment of principal.
No partial prepayment shall be allowed.
The principal balance of this Note may be prepaid in full without
premium during the last one hundred twenty (120) days of the term of this Note.
4. Interest After Default; Acceleration. While any default exists in the
making of any of said payments or in the performance or observance of any of the
covenants or agreements of this Note, or of any of the other Loan Documents, or
of any of the Related Loan Documents, including, without limitation, failure to
make payment in full of all amounts due under this Note or any of the other Loan
Documents or under any Related Loan Documents, by the Maturity Date, the
undersigned further promises to pay, on each monthly payment date, additional
interest on the principal balance of this Note then outstanding at the rate
representing the difference between the aforesaid rate and twelve and
seven-eighths percent (12.875%) per annum, provided that any additional interest
which has accrued shall be paid at the time of and as a condition precedent to
the curing of any default. Upon any default under this Note, the other Loan
Documents, or the Related Loan Documents which shall continue uncured after the
expiration of any applicable notice or cure period, the holder of this Note may
apply payments received on any amounts due hereunder or under the terms of the
Loan Documents or the Related Loan Documents as said holder may determine and,
if the holder of this Note so elects, notice of election being expressly waived,
the principal remaining unpaid with accrued interest and all other amounts due
hereunder shall at once become due and payable.
5. Payment After Default And Acceleration. Borrower acknowledges that
the Loan evidenced hereby was made on the basis and assumption that Lender would
receive the payments of principal and interest set forth herein for the full
term of the Loan. Therefore, whenever the maturity of the Loan has been
accelerated by reason of a default under this Note, any of the other Loan
Documents or the Related Loan Documents which has continued uncured beyond the
expiration of any applicable notice or cure period, which default occurs prior
to the time period, if any, in which prepayment is allowed, including an
acceleration by reason of sale, conveyance, further encumbrance or other default
(which acceleration shall be at Lender's sole option), there shall be due, in
addition to the outstanding principal balance, accrued interest and other sums
due under this Note and the Loan Documents, a premium equal to the greater of:
A. The sum obtained by:
(i) Multiplying the then outstanding principal balance due by
the difference obtained by subtracting the yield rate on
publicly traded United States Treasury Securities (as
published in the Wall Street Journal or other business
publication of general circulation five (5) business days
prior to the date of said payment) having the closest
matching maturity date to the Maturity Date from the
interest rate on this Note adjusted to its semi-annual
equivalent rate (8.005%), times the number of scheduled
monthly payments remaining in the term of this Note,
divided by twelve; and
(ii) Adding an amount equal to five percent (5%) of the then
outstanding principal balance; or
B. An amount equal to ten percent (10%) of the then outstanding
principal balance.
In the event such default or acceleration occurs on or after the date on
which prepayment is permitted under Section 3 of this Note and the preconditions
to such prepayment set forth in Section 3(A) are satisfied, then in lieu of the
above-described premium, payment of a premium calculated in the manner set forth
in Section 3(C), shall be required. In the event the yield rate on publicly
traded United States Treasury Securities is not obtainable, then the nearest
equivalent issue or index shall be selected, at Lender's reasonable
determination, and used in calculating the premium hereunder.
A tender of the amount necessary to satisfy the entire indebtedness
evidenced hereby, paid at any time following such default or acceleration,
including at a foreclosure sale, shall be deemed a voluntary prepayment, and, at
Lender's option, such payment shall include a premium as described above.
6. Waivers. The undersigned waives presentment, protest and demand,
notice of protest, demand and dishonor and non-payment of this Note, notice of
intention to accelerate the maturity of this Note, and notice of acceleration,
and agrees to pay all costs of collection when incurred, including attorneys'
and paralegals' fees, and to perform and comply with each of the covenants,
conditions, provisions and agreements of the undersigned contained in every Loan
Document. No extension of the time for the payment of this Note or any
installment hereof made by agreement with any person now or hereafter liable for
the payment of this Note shall operate to release, discharge, modify, change or
affect the original liability under this Note, either in whole or in part, of
any of the undersigned not a party to such agreement. Notwithstanding any
provision herein or in any Loan Document, the total liability for payments in
the nature of interest shall not exceed the limits now imposed by the usury laws
of the State of Michigan.
7. Limitation on Liability. In any action brought to enforce the
obligation of the parties executing the Loan Documents to pay the indebtedness
or perform the other obligations evidenced or secured by the Loan Documents, the
judgment or decree shall be enforceable against such parties only to the extent
of their interests in the properties, rights, estates and interests covered by
the Michigan Mortgage, the other Loan Documents and the Related Loan Documents
(all such properties, rights, estates and interests are hereinafter referred to
as the "Security"), and any such judgment shall not be subject to execution on,
nor be a lien on, assets of such parties other than their interests in the
Security. Notwithstanding the foregoing, Borrower shall be personally liable to
Lender for: (i) fraud, intentional misrepresentation and waste; (ii) any rents,
issues or profits collected more than one (1) month in advance of their due
dates; (iii) any misapplication of security deposits, insurance proceeds, or
condemnation awards or other sums of like nature to condemnation awards; (iv)
liability under any environmental covenants, conditions and indemnity contained
in the Loan Documents or Related Loan Documents and in any separate
environmental indemnity agreement; (v) failure to pay real estate taxes or
assessments, or failure to pay valid mechanic's liens; (vi) reasonable
attorneys' fees, court costs and other expenses incurred by Lender if Lender
prevails in any legal matter; and (vii) after a default which has continued
uncured beyond the expiration of any applicable notice or cure period,
misapplication of any rents and other payments, including, without limitation,
both base and percentage rents, contributions of tenants and lease termination
fees, received from tenants under space leases of the Security.
8. Security, Cross-Default, Cross-Collateralization, Governing Law. This
Note is given for a loan of Seven Million Four Hundred Seventy-five Thousand
Dollars ($7,475,000.00) and is secured by (i) the Michigan Mortgage; (ii) the
Michigan Assignment; (iii) the other Loan Documents other than this Note; and
(iv) the Related Loan Documents other than the Related Notes. The Loan and the
Related Loans are all secured by, and are entitled to the benefits of, the
Michigan Mortgage, the Michigan Assignment, the other Loan Documents and the
Related Loan Documents. It is the express intention of Borrower and Lender that
the Loan and each of the Related Loans be, and they hereby are, cross-defaulted
and cross-collateralized. Accordingly, a default under this Note or the other
Loan Documents will constitute an event of default under the Related Loan
Documents, and a default under any of the Related Loan Documents will constitute
an event of default under this Note and the other Loan Documents. This Note
shall be governed by and construed in accordance with the laws of the State of
Michigan.
WITNESS the execution and delivery hereof under seal on the day and year
first above written.
TANGER PROPERTIES LIMITED
PARTNERSHIP
By: Tanger Factory Outlet Centers,
Inc., Its Sole General Partner
Attest:----------------------- By:--------------------
Secretary/Assistant Secretary
Attest and Witness Name: Stanley K. Tanger
Title: Chairman of the Board
and Chief Executive Officer
(Corporate Seal)
GEORGIA PROMISSORY NOTE
$11,775,000.00
---------------------,1999
1. DEBT AND PAYMENT. For Value Received, the undersigned, Tanger
Properties Limited Partnership, a North Carolina limited partnership (the
"Borrower") hereby promises to pay to the order of JOHN HANCOCK MUTUAL LIFE
INSURANCE COMPANY (the "Lender"), a Massachusetts corporation, at its Home
Office at John Hancock Place, Boston, Massachusetts 02117, or at such other
place, or to such other party or parties, as the holder of this Note may from
time to time designate in writing, the principal sum of Eleven Million Seven
Hundred Seventy-five Thousand Dollars ($11,775,000.00) (the "Loan") with
interest to be computed from the date of disbursement of the proceeds of the
Loan at the rate of seven and seven-eighths percent (7.875%) per annum, payable
on the first day of each and every month beginning May 1, 1999, upon all
principal remaining from time to time unpaid; principal and interest to be paid
in installments as follows: Eighty-nine Thousand Nine Hundred Eight and
48/100ths Dollars ($89,908.48) on May 1, 1999 and a like amount on the first day
of each and every month thereafter through April 1, 2009 (the "Maturity Date"),
inclusive; provided, however, that the amount of the final payment aforesaid
shall be for the amount of principal and interest then remaining unpaid. If the
Loan proceeds are not disbursed on the first day of a month, then interest only
at the rate specified above from and including the date of disbursement of the
Loan proceeds to the first day of the month following such disbursement shall be
due and payable in advance on the date of such disbursement. TIME IS OF THE
ESSENCE of the provisions of this Note respecting all payments hereunder.
The Loan is secured by the Georgia Deed to Secure Debt (the "Georgia
Deed") and the Georgia Assignment of Leases and Rents (the "Georgia
Assignment"), both of even date herewith. Also given in connection with the Loan
is the Georgia Indemnification Agreement (the "Georgia Indemnification"), also
of even date herewith. This Note, the Georgia Deed, the Georgia Assignment and
the Georgia Indemnification are hereinafter referred to collectively as the
"Loan Documents".
Unless Lender elects otherwise, all sums received by Lender in payment
under this Note shall be applied first to late charges, costs of collection or
enforcement, expenditures by Lender pursuant to the Loan Documents and similar
amounts, if any, due under this Note or under the other Loan Documents or the
Related Loan Documents (as hereinafter defined), then to interest due and
payable under this Note, and the remainder to principal due and payable under
this Note.
2. RELATED LOANS. The Loan evidenced and secured by the Loan Documents
is made simultaneously with four other loans by Lender to Borrower, all
evidenced by four (4) notes of even date herewith in the following amounts (the
"Related Notes") and secured by first mortgages (or deeds of trust) on factory
outlet centers at the following locations, which loans are hereinafter referred
to collectively as the "Related Loans", the Related Notes and the other
instruments evidencing and securing the Related Loans (other than the Loan
Documents) being referred to
collectively as the "Related Loan Documents":
Location of Center Amount of Loan
San Marcos, Hays County, Texas $20,000,000.00
West Branch, Ogemaw County, Michigan 7,475,000.00
Kittery, York County, Maine 6,700,000.00
Williamsburg, Iowa County, Iowa 20,550,000.00
3. PERMITTED PREPAYMENT. Except as provided below, Borrower may not
prepay the principal balance of this Note in whole or in part.
Borrower may, on any scheduled payment date on or after April 1, 2003,
and subject to giving Lender not less than thirty (30) days nor more than ninety
(90) days prior written notice, prepay the entire unpaid principal amount of
this Note together with any and all accrued interest and other sums due
hereunder and under any of the other Loan Documents, subject to a prepayment
premium described below and subject to and in accordance with the following
terms and conditions:
A. It shall be a pre-condition of any such prepayment: (i) that all
of the Related Loans shall be prepaid in full in accordance with
the terms of their respective Related Loan Documents
simultaneously with the prepayment in full on the Loan, or (ii)
if no uncured default exists under the Loan or under any of the
Related Loans, that Lender shall, in its sole reasonable
discretion, allow the Loan, either alone or together with one or
more of the Related Loans, to be prepaid in full, provided (a)
that the Related Loans which are not then being prepaid
(hereinafter the "Remaining Related Loans") shall have a ratio
of outstanding principal balance to value of the properties
securing the Remaining Related Loans that, in the aggregate, is
less than or equal to sixty percent (60%) (such loan to value
ratio to be determined as hereinafter provided), and (b) that
the aggregate net operating income ("Net Operating Income") from
the properties securing the Remaining Related Loans shall equal
or exceed 1.30 times the total debt service payable under the
Remaining Related Loans and under any loans ("junior loans")
secured by liens junior to those of the Remaining Related Loans
(without any implication that junior loans are permitted under
the Loan Documents or the Related Loan Documents) (such ratio is
hereinafter referred to as "required debt service coverage" and
shall be determined by Lender, in its sole discretion, as
hereinafter provided).
B. For purposes of the preceding paragraph, property values shall
be determined, at Borrower's election, by one of the following
methods: (i) by an appraisal performed by an appraiser mutually
acceptable to Borrower and Lender with experience in the
appraisal of retail shopping center properties and who is a
Member of the Appraisal Institute, at Borrower's expense, (ii)
by a totally arm's-length bona fide third party offer to
purchase the property in question, subject to approval by
Lender, or (iii) by capitalizing Net Operating Income at a nine
and one-half percent
(9.5%) capitalization rate. The Net Operating Income of such
property is to be calculated by the following formula:
(a) Annualized base rent determined from base rent actually
received in the most recent three (3) month period under
then existing leases;
(b) Less customary non-reimbursed operating expenses at market
rates then currently applicable to factory outlet centers;
(c) Less a reserve equal to ten cents ($.10) times the number
of gross leasable square feet of floor area of the
buildings on the subject property.
For purposes of determining whether the required debt service
coverage test is satisfied by the Net Operating Income from the
properties securing the Remaining Related Loans, the Net
Operating Income of all remaining properties, determined in
accordance with the foregoing formula, shall be divided by the
annual debt service payable under the Remaining Related Loans
(and any junior loans) secured by those properties.
C. If the conditions set forth in this Section 3 are satisfied, the
prepayment premium with respect to the Loan shall be equal to
the greater of: (i) the positive amount, if any, equal to (a)
the sum of the present values of all scheduled payments due
under this Note from the date on which prepayment is to be made
(the "Prepayment Date") to and including the maturity date of
this Note, less (b) the principal balance of this Note
immediately prior to ---- such prepayment; or (ii) an amount
equal to one percent (1%) of the principal balance of this Note
immediately prior to such prepayment. All present values shall
be calculated as of the Prepayment Date, using a discount rate,
compounded monthly, equal to the yield rate, converted to its
monthly equivalent, of the United States Treasury Security
having the closest maturity date to the maturity date of this
Note, as established in the Wall Street Journal or other
business publication of general circulation five (5) business
days prior to the Prepayment Date.
Provided no default existing under any of the Loan Documents or
Related Loan Documents, the prepayment premium shall not be
applicable to a prepayment resulting from Lender's election to
require insurance loss proceeds or condemnation awards to be
applied to a payment of principal.
No partial prepayment shall be allowed.
The principal balance of this Note may be prepaid in full without
premium during the last one hundred twenty (120) days of the term of this Note.
4. INTEREST AFTER DEFAULT; ACCELERATION. While any default exists in the
making of any of said payments or in the performance or observance of any of the
covenants or agreements of this Note, or of any of the other Loan Documents, or
of any of the Related Loan Documents, including, without limitation, failure to
make payment in full of all amounts due under this Note or any of the other Loan
Documents or under any Related Loan Documents, by the Maturity Date, the
undersigned further promises to pay, on each monthly payment date, additional
interest on the principal balance of this Note then outstanding at the rate
representing the difference between the aforesaid rate and twelve and
seven-eighths percent (12.875%) per annum, provided that any additional interest
which has accrued shall be paid at the time of and as a condition precedent to
the curing of any default. Upon any default under this Note, the other Loan
Documents, or the Related Loan Documents which shall continue uncured after the
expiration of any applicable notice or cure period, the holder of this Note may
apply payments received on any amounts due hereunder or under the terms of the
Loan Documents or the Related Loan Documents as said holder may determine and,
if the holder of this Note so elects, notice of election being expressly waived,
the principal remaining unpaid with accrued interest and all other amounts due
hereunder shall at once become due and payable.
5. PAYMENT AFTER DEFAULT AND ACCELERATION. Borrower acknowledges that
the Loan evidenced hereby was made on the basis and assumption that Lender would
receive the payments of principal and interest set forth herein for the full
term of the Loan. Therefore, whenever the maturity of the Loan has been
accelerated by reason of a default under this Note, any of the other Loan
Documents or the Related Loan Documents which has continued uncured beyond the
expiration of any applicable notice or cure period, which default occurs prior
to the time period, if any, in which prepayment is allowed, including an
acceleration by reason of sale, conveyance, further encumbrance or other default
(which acceleration shall be at Lender's sole option), there shall be due, in
addition to the outstanding principal balance, accrued interest and other sums
due under this Note and the Loan Documents, a premium equal to the greater of:
A. The sum obtained by:
(i) Multiplying the then outstanding principal balance due by
the difference obtained by subtracting the yield rate on
publicly traded United States Treasury Securities (as
published in the Wall Street Journal or other business
publication of general circulation five (5) business days
prior to the date of said payment) having the closest
matching maturity date to the Maturity Date from the
interest rate on this Note adjusted to its semi-annual
equivalent rate (8.005%), times the number of scheduled
monthly payments remaining in the term of this Note,
divided by twelve; and
(ii) Adding an amount equal to five percent (5%) of the then
outstanding principal balance; or
B. An amount equal to ten percent (10%) of the then
outstanding principal balance.
In the event such default or acceleration occurs on or after the date on
which prepayment is permitted under Section 3 of this Note and the preconditions
to such prepayment set forth in Section 3(A) are satisfied, then in lieu of the
above-described premium, payment of a premium calculated in the manner set forth
in Section 3(C), shall be required. In the event the yield rate on publicly
traded United States Treasury Securities is not obtainable, then the nearest
equivalent issue or index shall be selected, at Lender's reasonable
determination, and used in calculating the premium hereunder.
A tender of the amount necessary to satisfy the entire indebtedness
evidenced hereby, paid at any time following such default or acceleration,
including at a foreclosure sale, shall be deemed a voluntary prepayment, and, at
Lender's option, such payment shall include a premium as described above.
6. WAIVERS. The undersigned waives presentment, protest and demand,
notice of protest, demand and dishonor and non-payment of this Note, notice of
intention to accelerate the maturity of this Note, and notice of acceleration,
and agrees to pay all costs of collection when incurred, including attorneys'
and paralegals' fees, and to perform and comply with each of the covenants,
conditions, provisions and agreements of the undersigned contained in every Loan
Document. No extension of the time for the payment of this Note or any
installment hereof made by agreement with any person now or hereafter liable for
the payment of this Note shall operate to release, discharge, modify, change or
affect the original liability under this Note, either in whole or in part, of
any of the undersigned not a party to such agreement. Notwithstanding any
provision herein or in any Loan Document, the total liability for payments in
the nature of interest shall not exceed the limits now imposed by the usury laws
of the State of Georgia.
7. LIMITATION ON LIABILITY. In any action brought to enforce the
obligation of the parties executing the Loan Documents to pay the indebtedness
or perform the other obligations evidenced or secured by the Loan Documents, the
judgment or decree shall be enforceable against such parties only to the extent
of their interests in the properties, rights, estates and interests covered by
the Georgia Deed, the other Loan Documents and the Related Loan Documents (all
such properties, rights, estates and interests are hereinafter referred to as
the "Security"), and any such judgment shall not be subject to execution on, nor
be a lien on, assets of such parties other than their interests in the Security.
Notwithstanding the foregoing, Borrower shall be personally liable to Lender
for: (i) fraud, intentional misrepresentation and waste; (ii) any rents, issues
or profits collected more than one (1) month in advance of their due dates;
(iii) any misapplication of security deposits, insurance proceeds, or
condemnation awards or other sums of like nature to condemnation awards; (iv)
liability under any environmental covenants, conditions and indemnity contained
in the Loan Documents or Related Loan Documents and in any separate
environmental indemnity agreement; (v) failure to pay real estate taxes or
assessments, or failure to pay valid mechanic's liens; (vi) reasonable
attorneys' fees, court costs and other expenses incurred by Lender if Lender
prevails in any legal matter; and (vii) after a default which has continued
uncured beyond the expiration of any applicable notice or cure period,
misapplication of any rents and other payments, including, without limitation,
both base and percentage rents, contributions of tenants and lease termination
fees, received from tenants under space leases of the Security.
8. SECURITY, CROSS-DEFAULT, CROSS-COLLATERALIZATION, GOVERNING LAW. This
Note is given for a loan of Eleven Million Seven Hundred Seventy-five Thousand
Dollars ($11,775,000.00) and is secured by (i) the Georgia Deed; (ii) the
Georgia Assignment; (iii) the other Loan Documents other than this Note; and
(iv) the Related Loan Documents other than the Related Notes. The Loan and the
Related Loans are all secured by, and are entitled to the benefits of, the
Georgia Deed, the Georgia Assignment, the other Loan Documents and the Related
Loan Documents. It is the express intention of Borrower and Lender that the Loan
and each of the Related Loans be, and they hereby are, cross-defaulted and
cross-collateralized. Accordingly, a default under this Note or the other Loan
Documents will constitute an event of default under the Related Loan Documents,
and a default under any of the Related Loan Documents will constitute an event
of default under this Note and the other Loan Documents. This Note shall be
governed by and construed in accordance with the laws of the State of Georgia.
WITNESS the execution and delivery hereof under seal on the day and year
first above written.
TANGER PROPERTIES LIMITED
PARTNERSHIP
By: Tanger Factory Outlet Centers,
Inc., Its Sole General Partner
Attest:--------------------- By:------------------
Secretary/Assistant Secretary
Attest and Witness Name: Stanley K. Tanger
Title: Chairman of the Board
and Chief Executive Officer
(Corporate Seal)