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October 2, 2000 64. Tanger Factory Outlet Centers, Inc. 3200 Northline Drive, Suite 360 Greensboro, NC 27408 Phone: 336-292-3010 Fax: 336-852-2096 www.tangeroutlct.com A New York Stock Exchange Listed Company (NYSE:SKT) OUTLET CENTERS VI {y" 1 Y'0 (, ~6NS17 'l'0 ~(!)AS't fJ I \ '{ ~{ , Larry D. Gilley, City Manager City of San Marcos 630 E. Hopkins Street San Marcos, TX 78666 Re: Lowman Ranch, Ltd. v. Stanley K. Tanger and Tanger Properties Limited Partnership, Cause No. 2000-0719, pending in the 207lh Judicial District Court of Hays County, Texas Dear Mr. Gilley: I am writing on behalf of Tanger Properties Limited Partnership (Tanger Properties") to request the assistance of the City of San Marcos (the "City") regarding the lawsuit described above (the "Lawsuit"). This letter, upon countersignature below on behalf of the City, will constitute an agreement between the City and Tanger Properties. Lowman Ranch, Ltd. ("Lowman") filed the Lawsuit against Stanley K. Tanger and Tanger Properties. The Lawsuit alleges that a drainage easement (the "Easement") across the property owned by Lowman can be used for drainage and detention of surface water from only a portion of the property owned by Tanger Properties (i.e., from only "Tract 1" of Tanger Factory Outlet Subdivision), and that Tanger Properties cannot use the Easement for the purpose of draining and detaining surface water from "Tract 2" of Tanger Factory Outlet Subdivision. The City and Tanger Properties jointly own the Easement by virtue of easement instruments recorded in Volume 960, pages 14-17, and Volume 960, pages 21-24 of the Official Public Records of Hays County, Texas. It is my understanding that the City, after carefully and independently reviewing the allegations of Lowman's Petition in the Lawsuit, the factual record, and the relevant documents, supports the position of Tanger Properties that the Easement allows for drainage and detention of surface water from all of the Tanger Factory Outlet Subdivision (i.e., all 55 acres of the Subdivision, including both "Tract 1" and "Tract 2"). As presently pleaded, the Lawsuit is a declaratory judgment action under the Uniform Declaratory Judgments Act, Tex. Civ. PI. & Rem. Code SS 37.001-37.010. Because the City's interest in the Easement may be affected by the declaration sought in the Lawsuit, it is my understanding that the City may be a necessary party to the Lawsuit. It is further my understanding that the City has therefore agreed to file a Plea in Intervention in the Lawsuit in order to protect the City's interest in the Easement and in order to facilitate final resolution ofthe claims that are alleged in the Lawsuit regarding the Easement.