SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): July 19, 1996
TAUBMAN CENTERS, INC.
(Exact Name of Registrant as Specified in its Charter)
MICHIGAN
(State or Other Jurisdiction of Incorporation)
1-11530 38-2033632
(Commission File Number) (I.R.S Employer Identification Number)
200 East Long Lake Road, Bloomfield Hills, Michigan 48304
(Address of Principal Executive Office) (Zip Code)
(810) 258-6800
(Registrant's Telephone Number, Including Area Code)
None
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 5. Other Matters.
On July 19, 1996, The Taubman Realty Group Limited Partnership (TRG) completed
transactions that resulted in it acquiring the 75% interest in Fairlane Town
Center (Fairlane) previously held by a joint venture partner, leaving TRG with
100% ownership of the Center. The 75% interest was acquired from Boston Safe
Deposit and Trust Company, as trustee of the Pacific Telesis Group Master
Pension Trust ("PacTel"), for $65.6 million. TRG also assumed mortgage debt of
approximately $26 million, representing PacTel's beneficial interest in the
$34.6 million mortgage encumbering the property. TRG borrowed under an existing
revolving credit facility with Union Bank of Switzerland (New York Branch) to
fund the cash portion of the purchase price. The borrowing was subsequently
repaid with the $65.6 million proceeds from the issuance of 3,096 TRG units of
partnership interest to PacTel . Taubman Centers, Inc. (the "Company") is the
managing general partner of TRG. PacTel is unaffiliated with TRG and the
Company, and the transactions were negotiated at arm's length. The units of
partnership interest issued to PacTel will be exchangeable (after one year),
under the Company's on-going exchange offer to certain of TRG's partners, for
approximately 6.1 million shares of the Company's common stock. The common stock
had a closing price of $10.75 per share on July 17, 1996. PacTel is obligated to
hold the units of partnership interest for at least one year. TRG used unsecured
debt to fund the repayment of Fairlane's 9.73% mortgage and the prepayment
penalty of approximately $1.2 million.
Fairlane is a 1.5 million square foot regional shopping center located in
Dearborn, Michigan. Fairlane opened in 1976 with JCPenney, Hudson's and Sears as
anchors. Lord & Taylor and Saks Fifth Avenue were added as anchors in 1978 and
1980, respectively.
Item 7. Financial Statements and Exhibits.
The following financial statements and pro forma information are being
supplied as supplementary information to this voluntary filing on Form 8-K.
a-b Financial Statements and Pro Forma Information.
Independent Auditors' Report.
Fairlane Town Center, Historical Summaries of Revenues and Direct
Operating Expenses for Each of the Three Years in the Period Ended
December 31, 1995.
Taubman Centers, Inc., Pro Forma Condensed Statement of Operations,
Year Ended December 31, 1995, and the Three Months Ended March 31,
1996 (unaudited).
The Taubman Realty Group Limited Partnership, Pro Forma Condensed
Consolidated Balance Sheet, March 31, 1996 (unaudited).
The Taubman Realty Group Limited Partnership, Pro Forma Condensed
Consolidated Statement of Operations, Year Ended December 31, 1995
(unaudited).
The Taubman Realty Group Limited Partnership, Pro Forma Condensed
Consolidated Statement of Operations, Three Months Ended March 31,
1996 (unaudited).
The Taubman Realty Group Limited Partnership, Statement of Estimated
Taxable Operating Results of Fairlane Town Center and Estimated Cash
to be Made Available by Operations of Fairlane Town Center for a
Twelve Month Period Ended March 31, 1996 (unaudited).
2
<PAGE>
FAIRLANE TOWN CENTER
Historical Summaries of
Revenues and Direct Operating Expenses
for Each of the Three Years in the
Period Ended December 31, 1995, and
Independent Auditors' Report
3
<PAGE>
INDEPENDENT AUDITORS' REPORT
Partners
The Taubman Realty Group Limited Partnership
We have audited the accompanying historical summaries of revenues and direct
operating expenses of Fairlane Town Center (Fairlane) for each of the three
years in the period ended December 31, 1995. The historical summaries are the
responsibility of Fairlane's management. Our responsibility is to express an
opinion on these historical summaries based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the historical summaries are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the historical summaries. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the historical
summaries. We believe that our audits provide a reasonable basis for our
opinion.
The accompanying historical summaries are prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission (for
inclusion in a Form 8-K of The Taubman Realty Group Limited Partnership). They
exclude material expenses, as described in Note 1, and are not intended to be a
complete presentation of Fairlane's revenues and expenses.
In our opinion, such historical summaries present fairly, in all material
respects, the revenues and direct operating expenses, as described in Note 1, of
Fairlane for each of the three years in the period ended December 31, 1995, in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Detroit, Michigan
July 31, 1996
4
<PAGE>
FAIRLANE TOWN CENTER
HISTORICAL SUMMARIES OF REVENUES AND DIRECT OPERATING EXPENSES
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1995
Year Ended December 31
1993 1994 1995
-----------------------------------------
REVENUES:
Minimum rents $14,966,455 $15,298,788 $15,241,634
Percentage rents 210,282 169,306 221,069
Expense recoveries 10,753,973 11,522,556 11,767,749
Other 737,515 529,899 1,109,431
----------- ----------- -----------
Total revenues $26,668,225 $27,520,549 $28,339,883
DIRECT OPERATING EXPENSES:
Recoverable expenses $10,137,673 $10,753,352 $10,402,236
Other 1,711,831 1,533,225 1,326,053
----------- ----------- -----------
Total direct operating expenses $11,849,504 $12,286,577 $11,728,289
----------- ----------- -----------
EXCESS OF REVENUES OVER DIRECT
OPERATING EXPENSES $14,818,721 $15,233,972 $16,611,594
=========== =========== ===========
5
<PAGE>
FAIRLANE TOWN CENTER
HISTORICAL SUMMARIES OF REVENUES AND DIRECT OPERATING EXPENSES
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General - Fairlane Town Center (Fairlane) is a regional shopping center in
Dearborn, Michigan, which is owned and operated by Fairlane Town Center (a
partnership). Shopping center space is leased to tenants and anchors
pursuant to lease agreements. Leases typically provide for guaranteed
minimum rent, percentage rent, and other charges to cover certain operating
costs.
Basis of Presentation - Revenues and expenses are presented on the accrual
basis of accounting. The accompanying financial summaries of historical
revenues and direct operating expenses have been prepared for the purpose
of complying with the rules and regulations of the Securities and Exchange
Commission for inclusion in a report on Form 8-K of The Taubman Realty
Group Limited Partnership (TRG). The accompanying financial summaries are
not representative of the actual operations for the periods presented as
material expenses which may not be comparable to the proposed future
operations of Fairlane by TRG have been excluded. Excluded expenses consist
of interest and depreciation and amortization not directly related to
future operations of Fairlane. Expenses include the costs of management
services provided by The Taubman Company Limited Partnership, approximately
99% beneficially owned by TRG, to Fairlane.
Revenue Recognition - Shopping Center space is generally leased to
specialty retail tenants under short and intermediate term leases which are
accounted for as operating leases. Minimum rents are recognized on an
accrual basis as earned, the result of which does not differ materially
from a straight-line basis. Percentage rents are recognized on an accrual
basis as earned. Expense recoveries, which include an administrative fee,
are recognized as revenue in the period applicable costs are accrued.
6
<PAGE>
TAUBMAN CENTERS, INC.
PRO FORMA CONDENSED STATEMENT OF OPERATIONS
Year Ended December 31, 1995 and the Three
Months Ended March 31, 1996
(unaudited)
(in thousands, except share data)
The accompanying Pro Forma Condensed Statement of Operations is presented as
if The Taubman Realty Group Limited Partnership's (TRG) acquisition of its joint
venture partner's 75% ownership of Fairlane Town Center (Fairlane) and the
related issuance of additional units of partnership interest, which caused the
Company's ownership of TRG to decrease from 35.10% to 33.47%, and various other
transactions of TRG, occurred as of January 1, 1995. In management's opinion,
all adjustments necessary to reflect the effects of these transactions have been
made. This unaudited Pro Forma Condensed Statement of Operations is not
necessarily indicative of what actual results of operations would have been had
these transactions occurred on January 1, 1995, nor does it purport to represent
the results of operations for future periods.
<TABLE>
<CAPTION>
Year Ended Three Months Ended
December 31, 1995 March 31, 1996
------------------------------------------ -----------------------------------------
Historical Adjustment<F1>(A) Pro Forma Historical Adjustment<F1>(A) Pro Forma
---------- ---------- --------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Income:
Equity in TRG's income
before extraordinary
items <F2>(B) $19,831 $(472) $19,359 $5,414 $ 111 $5,525
Interest and other 331 331 68 68
------ ----- ------- ------ ----- ------
$20,162 $(472) $19,690 $5,482 $ 111 $5,593
------- ----- ------- ------ ----- ------
Operating expenses $ 895 $ 895 $ 238 $ 238
------ ------- ------ ----- ------
Income before extraordinary
items $19,267 $(472) $18,795 $5,244 $ 111 $5,355
======= ===== ======= ====== ===== ======
Earnings per common share:
Income before extraordinary
items $ .44 $ .43 $ .12 $ .12
====== ======= ====== ======
Weighted average number
of common shares
outstanding 44,249,617 44,249,617 44,111,232 44,111,232
========== ========== ========== ==========
<FN>
<F1>
(A) Adjustment is due to the impact of TRG's acquisition of its joint venture
partner's 75% interest in Fairlane and the related issuance of additional
units of partnership interest, which caused the Company's ownership of TRG
to decrease from 35.10% to 33.47%, and various other transactions which
occurred in 1995 and 1996. See TRG's Pro Forma Condensed Consolidated
Statements of Operations for the year ended December 31, 1995 and the three
months ended March 31, 1996 included in this report.
<F2>
(B) Includes a $1.8 million gain in the 1995 Historical column and the reversal
of $1.8 million gain in the 1995 Adjustment column, related to TRG's
disposition of Bellevue Center in November 1995.
</FN>
</TABLE>
7
<PAGE>
THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
March 31, 1996
(unaudited)
(in thousands)
This unaudited Pro Forma Condensed Consolidated Balance Sheet is presented as
if TRG's acquisition of its joint venture partner's 75% interest in Fairlane
Town Center (Fairlane) and TRG's acquisition of the Paseo Nuevo shopping center
(Paseo) had occurred on March 31, 1996. In management's opinion, all adjustments
necessary to reflect the effects of these transactions have been made.
This unaudited Pro Forma Condensed Consolidated Balance Sheet is not
necessarily indicative of what the actual financial position would have been at
March 31, 1996, nor does it purport to represent the future financial position
of TRG.
<TABLE>
<CAPTION>
Adjustments Adjustments
for for
Acquisition Pro Acquisition Pro
Historical of Fairlane<F1>(A) Forma of Paseo<F2>(B) Forma
---------- ----------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Assets:
Properties, net $ 724,794 $ 95,318 $ 820,112 $ 35,398 $ 855,510
Other assets 81,430 5,473 86,903 2,400 89,303
---------- -------- ---------- -------- ----------
$ 806,224 $100,791 $ 907,015 $ 37,798 $ 944,813
========== ======== ========== ======== ==========
Liabilities:
Debt $ 964,820 $ 36,333 $1,001,153 $ 37,000 $1,038,153
Capital lease obligation 17,277 17,277 17,277
Accounts payable and
other liabilities 80,533 2,931 83,464 798 84,262
Distributions in excess of
net income of unconsolidated
Joint Ventures 154,629 (2,848) 151,781 151,781
---------- -------- ---------- -------- ----------
$1,217,259 $ 36,416 $1,253,675 $ 37,798 $1,291,473
Accumulated deficiency in
assets (411,035) 64,375 (346,660) (346,660)
----------- -------- ---------- -------- ----------
$ 806,224 $100,791 $ 907,015 $ 37,798 $ 944,813
========== ======== ========== ======== ==========
Allocation of accumulated
deficiency in assets:
General Partners $ (328,897) $ (264,497) $ (264,497)
Limited Partners (82,138) (82,163) (82,163)
---------- ---------- ----------
$ (411,035) $ (346,660) $ (364,660)
========== ========== ==========
<PAGE>
<FN>
<F1>
(A) Represents TRG's acquisition of its joint venture partner's 75% interest
in Fairlane Town Center and the subsequent consolidation of Fairlane as a
wholly owned entity. The ownership interest was acquired in connection
with the issuance of 3,096 units of partnership interest (exchangeable,
after one year, for approximately 6.1 million shares of Taubman Centers,
Inc. common stock, having a closing price of $10.75 per share on July 17,
1996). The units issued represent limited partnership interests.
Transaction costs were approximately $0.8 million. TRG also assumed
mortgage debt of $26 million, representing the former joint venture
partner's beneficial interest in the $34.6 million mortgage encumbering
the property. TRG used unsecured debt to fund the repayment of the 9.73%
mortgage and the prepayment penalty of approximately $1.2 million. The
acquisition was accounted for at fair value. Prior to the acquisition
date, TRG's 25% interest in Fairlane was accounted for under the equity
method.
<F2>
(B) Represents TRG's June 1996 acquisition of Paseo, located in Santa Barbara,
California, for $37 million. TRG borrowed under its existing lines of
credit to fund the acquisition. Transaction costs were approximately $0.8
million. TRG also assumed a $2.0 million note receivable plus accrued
interest due from the lessor of one of Paseo's ground leases. The
acquisition was accounted for at fair value.
</FN>
</TABLE>
8
<PAGE>
THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Year Ended December 31, 1995
(unaudited)
(in thousands, except unit data)
The accompanying Pro Forma Condensed Consolidated Statement of Operations is
presented as if (i) TRG's acquisition of its joint venture partner's 75%
interest in Fairlane Town Center (Fairlane) occurred on January 1, 1995 and (ii)
TRG acquired the Paseo Nuevo shopping center and certain other transactions
occurred on January 1, 1995. In management's opinion, all adjustments necessary
to reflect the effects of these transactions have been made. This unaudited Pro
Forma Condensed Consolidated Statement of Operations is not necessarily
indicative of what actual results of operations would have been had these
transactions been completed as of January 1, 1995, nor does it purport to
represent the results of operations for future periods.
<TABLE>
<CAPTION>
Adjustments Adjustments
for for
Acquisition Pro Other Pro
Historical of Fairlane<F1>(A) Forma Transactions Forma
---------- ------------ --------- ------------ ---------
<S> <C> <C> <C> <C> <C>
Revenues $228,918 $28,340 $257,258 $ 6,645<F2>(B) $263,903
-------- ------- -------- -------- --------
Operating Costs:
Recoverable expenses $ 62,910 $10,402 $ 73,312 $ 1,785<F2>(B) $ 75,097
Other operating 22,512 1,326 23,838 1,468<F2>(B) 25,306
Management, leasing and
development services 3,696 3,696 3,696
General and administrative 19,790 19,790 19,790
Interest 65,858 2,792 68,650 2,812<F3>(B)(C) 71,462
Depreciation and amortization 32,393 3,792 36,185 1,106<F2>(B) 37,291
-------- ------- ------- -------- --------
$207,159 $18,312 $225,471 $ 7,171 $232,642
-------- ------- -------- -------- --------
Income before equity in income
of unconsolidated Joint Ventures
and before extraordinary items $ 21,759 $10,028 $ 31,787 $ (526) $ 31,261
Equity in income before extra-
ordinary items of unconsolidated
Joint Ventures 57,940 (2,698) 55,242 (4,330)<F4>(D) 50,912
-------- ------- -------- -------- --------
Income before extraordinary items $ 79,699 $ 7,330 $ 87,029 $ (4,856) $ 82,173
======== ======= ======== ======== ========
Allocation of income before
extraordinary items:
General Partners $ 63,773 $ 66,402 $ 62,697
Limited Partners 15,926 20,627 19,476
-------- -------- --------
$ 79,699 $ 87,029 $ 82,173
======== ======== ========
Earnings per Unit of Partnership
Interest:
Income before extraordinary
items $ 1,255 $ 1,306 $ 1,234
======== ======== ========
Weighted Average Number of
Units of Partnership Interest
Outstanding 63,521 3,096 66,617 66,617
======== ======= ======== ========
<CAPTION>
See the accompanying Notes and Significant Assumptions
9
<PAGE>
<CAPTION>
THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP
NOTES AND SIGNIFICANT ASSUMPTIONS
<FN>
<F1>
(A) Acquisition of Fairlane Town Center Interests
In July 1996, The Taubman Realty Group Limited Partnership (TRG) completed
transactions that resulted in the acquisition of the 75% interest in Fairlane
Town Center (Fairlane), previously held by a joint venture partner. In
connection with the transactions, TRG issued 3,096 units of partnership interest
to the joint venture partner. The units are exchangeable, after one year, for
approximately 6.1 million shares of Taubman Centers, Inc. common stock, having a
closing price of $10.75 per share on July 17, 1996. The former joint venture
partner is obligated to hold the partnership units for at least one year. TRG
also assumed mortgage debt of $26 million, representing the former joint venture
partner's beneficial interest in the $34.6 million mortgage encumbering the
property. TRG used unsecured debt (average rates of 7.59% and 7.44% in 1995 and
1996, respectively) to fund the repayment of the 9.73% mortgage and the
prepayment penalty of approximately $1.2 million. The acquisition, which
resulted in TRG owning 100% of Fairlane, was accounted for at fair value. Prior
to the acquisition date, TRG's interest in Fairlane was accounted for under the
equity method. The purchase price has been allocated 15% to land and 85% to
buildings and site improvements, which will be depreciated over 40 years and 15
years, respectively. Pro forma revenues and expenses, other than interest and
depreciation and amortization, represent the historical amounts of Fairlane.
Other Transactions
<F2>
(B) Acquisition of Paseo Nuevo
In June 1996, TRG acquired the Paseo Nuevo shopping center (Paseo), located in
Santa Barbara, California, for $37 million. TRG borrowed under its existing
lines of credit (average rates of 7.75% and 7.03% in 1995 and 1996,
respectively) to fund the acquisition. The Center is owned subject to two
participating ground leases with remaining terms of approximately 70 years. TRG
also assumed a $2.0 million note receivable due from the lessor of one of the
ground leases. The note accrues interest at an annual rate of 10%. The purchase
price has been allocated primarily to the buildings and site improvements, which
will be depreciated over 40 years and 15 years, respectively. Pro forma revenues
and expenses other than interest, depreciation and management fee expense are
based on unaudited information provided by the seller of the property.
<F3>
(C) Medium-Term Note Program
In the second quarter of 1995, TRG initiated a medium-term note program under
its $500 million shelf registration statement and issued during the year $133.4
million of unsecured notes at a weighted average rate of 7.45% and a weighted
average maturity of approximately seven years. The net proceeds were used to pay
down floating rate debt under TRG's revolving credit facilities as well as to
pay off the $22.6 million mortgage, bearing a 9.44% rate, encumbering a wholly
owned Center. In July 1996, TRG issued $154 million of unsecured notes ($70
million of 8% notes and $84 million of floating rate notes). The net proceeds
were used to repay the Fairlane mortgage and the related prepayment penalty, and
to pay down borrowings under TRG's revolving credit facilities. Interest rates
used in determining the adjustments for debt issued and retired are based on
actual rates achieved, including where applicable the impact of interest rate
hedging instruments, and are not necessarily indicative of the rates which could
have been achieved if the transactions had actually occurred as of the beginning
of the periods presented.
<F4>
(D) Disposal of Bellevue Center
In December 1995, the bank group holding the $99.5 million nonrecourse mortgage
encumbering Bellevue Center acquired title to the Center through a nonjudicial
foreclosure sale. The mortgage, which had a below market interest rate of 5.91%,
matured on November 1, 1995. TRG's share of the ordinary gain on the disposition
of the Center was $5.0 million. TRG ceased to recognize the results of
operations of Bellevue Associates (Bellevue), a 60% owned joint venture, as of
November 1, 1995. TRG's share of Bellevue's net loss from operations for the ten
months ended October 31, 1995 was $0.7 million. The pro forma adjustment
represents the reversal of the $5.0 million gain and the $0.7 million loss from
operations.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Three Months Ended March 31, 1996
(unaudited)
(in thousands, except unit data)
The accompanying Pro Forma Condensed Consolidated Statement of Operations is
presented as if (i) TRG's acquisition of its joint venture partner's 75%
interest in Fairlane Town Center (Fairlane) and (ii) TRG's acquisition of the
Paseo Nuevo shopping center and certain other transactions occurred on January
1, 1995. In management's opinion, all adjustments necessary to reflect the
effects of these transactions have been made. This unaudited Pro Forma Condensed
Consolidated Statement of Operations is not necessarily indicative of what
actual results of operations would have been had these transactions been
completed as of January 1, 1995, nor does it purport to represent the results of
operations for future periods.
Adjustments Adjustments
for for
Acquisition Pro Other Pro
Historical of Fairlane<F1>(A) Forma Transactions Forma
---------- ------------ --------- ------------ ---------
<S> <C> <C> <C> <C> <C>
Revenues $59,732 $6,977 $66,709 $1,801<F2>(B) $68,510
------- ------ ------- ------ -------
Operating Costs:
Recoverable expenses $15,586 $2,746 $18,332 $ 464<F2>(B) $18,796
Other operating 5,219 584 5,803 384<F2>(B) 6,187
Management, leasing and
development services 1,245 1,245 1,245
General and administrative 4,753 4,753 4,753
Interest 17,102 685 17,787 825<F3>(B)(C) 18,612
Depreciation and amortization 8,322 987 9,309 277<F2>(B) 9,586
------- ------ ------- ------ -------
$52,227 $5,002 $57,229 $1,950 $59,179
------- ------ ------- ------ -------
Income before equity in income
of unconsolidated Joint Ventures
and before extraordinary items $ 7,505 $1,975 $ 9,480 $ (149) $ 9,331
Equity in income before extra-
ordinary items of unconsolidated
Joint Ventures 13,363 (476) 12,887 12,887
------- ------ ------- ------ -------
Income before extraordinary items $20,868 $1,499 $22,367 $ (149) $22,218
======= ====== ======= ====== =======
Allocation of income before
extraordinary items:
General Partners $16,698 $17,066 $16,952
Limited Partners 4,170 5,301 5,266
------- ------- -------
$20,868 $22,367 $22,218
======= ======= =======
Earnings per Unit of Partnership
Interest:
Income before extraordinary
items $ 329 $ 336 $ 334
======= ======= =======
Weighted Average Number of
Units of Partnership Interest
Outstanding 63,521 3,096 66,617 66,617
======= ====== ======= =======
<CAPTION>
See the accompanying Notes and Significant Assumptions
10
<PAGE>
<CAPTION>
THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP
NOTES AND SIGNIFICANT ASSUMPTIONS
<FN>
<F1>
(A) Acquisition of Fairlane Town Center Interests
In July 1996, The Taubman Realty Group Limited Partnership (TRG) completed
transactions that resulted in the acquisition of the 75% interest in Fairlane
Town Center (Fairlane), previously held by a joint venture partner. In
connection with the transactions, TRG issued 3,096 units of partnership interest
to the joint venture partner. The units are exchangeable, after one year, for
approximately 6.1 million shares of Taubman Centers, Inc. common stock, having a
closing price of $10.75 per share on July 17, 1996. The former joint venture
partner is obligated to hold the partnership units for at least one year. TRG
also assumed mortgage debt of $26 million, representing the former joint venture
partner's beneficial interest in the $34.6 million mortgage encumbering the
property. TRG used unsecured debt (average rates of 7.59% and 7.44% in 1995 and
1996, respectively) to fund the repayment of the 9.73% mortgage and the
prepayment penalty of approximately $1.2 million. The acquisition, which
resulted in TRG owning 100% of Fairlane, was accounted for at fair value. Prior
to the acquisition date, TRG's interest in Fairlane was accounted for under the
equity method. The purchase price has been allocated 15% to land and 85% to
buildings and site improvements, which will be depreciated over 40 years and 15
years, respectively. Pro forma revenues and expenses, other than interest and
depreciation and amortization, represent the historical amounts of Fairlane.
Other Transactions
<F2>
(B) Acquisition of Paseo Nuevo
In June 1996, TRG acquired the Paseo Nuevo shopping center (Paseo), located in
Santa Barbara, California, for $37 million. TRG borrowed under its existing
lines of credit (average rates of 7.75% and 7.03% in 1995 and 1996,
respectively) to fund the acquisition. The Center is owned subject to two
participating ground leases with remaining terms of approximately 70 years. TRG
also assumed a $2.0 million note receivable due from the lessor of one of the
ground leases. The note accrues interest at an annual rate of 10%. The purchase
price has been allocated primarily to the buildings and site improvements, which
will be depreciated over 40 years and 15 years, respectively. Pro forma revenues
and expenses other than interest, depreciation and management fee expense are
based on unaudited information provided by the seller of the property.
<F3>
(C) Medium-Term Note Program
In the second quarter of 1995, TRG initiated a medium-term note program under
its $500 million shelf registration statement and issued during the year $133.4
million of unsecured notes at a weighted average rate of 7.45% and a weighted
average maturity of approximately seven years. The net proceeds were used to pay
down floating rate debt under TRG's revolving credit facilities as well as to
pay off the $22.6 million mortgage, bearing a 9.44% rate, encumbering a wholly
owned Center. In July 1996, TRG issued $154 million of unsecured notes ($70
million of 8% notes and $84 million of floating rate notes). The net proceeds
were used to repay the Fairlane mortgage and the related prepayment penalty, and
to pay down borrowings under TRG's revolving credit facilities. Interest rates
used in determining the adjustments for debt issued and retired are based on
actual rates achieved, including where applicable the impact of interest rate
hedging instruments, and are not necessarily indicative of the rates which could
have been achieved if the transactions had actually occurred as of the beginning
of the periods presented.
</FN>
</TABLE>
11
<PAGE>
THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP
STATEMENT OF ESTIMATED TAXABLE OPERATING
RESULTS OF FAIRLANE TOWN CENTER AND ESTIMATED CASH TO BE MADE
AVAILABLE BY OPERATIONS OF FAIRLANE TOWN CENTER
FOR A TWELVE-MONTH PERIOD ENDED March 31, 1996
(unaudited)
(in thousands)
Revenues:
Minimum rents $15,218
Percentage rents 235
Expense recoveries 12,203
Other 873
-------
$28,529
Operating Costs:
Recoverable expenses $10,850
Other operating 1,603
Interest 2,783
Depreciation and amortization 3,824
-------
$19,060
-------
Estimated taxable operating income $9,469
Add back depreciation and amortization 3,824
-------
Estimated cash to be made available by operations $13,293
=======
Note
This statement of estimated taxable operating results and estimated cash to be
made available from operations is an estimate of operating results of Fairlane
Town Center for a period of twelve months and does not purport to reflect actual
results for any period.
12
<PAGE>
c. Exhibits.
Exhibit Number Description
23 Consent of Deloitte & Touche LLP.
* 99 (a) Purchase and Sale Agreement By and Between
The Pacific Telesis Group Master Pension
Trust and The Taubman Realty Group Limited
Partnership, dated July 17, 1996 (without
exhibits or schedules, which will be
supplementally provided to the Securities
and Exchange Commission upon its request).
* 99 (b) Subscription Agreement By and Between The
Pacific Telesis Group Master Pension Trust
and The Taubman Realty Group Limited
Partnership dated July 18, 1996 (without
exhibits or schedules, which will be
supplementally provided to the Securities
and Exchange Commission upon its request).
* Certain portions of this document have been omitted and are being
separately filed with the Securities and Exchange Commission by TRG
with its request for confidential treatment.
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
TAUBMAN CENTERS, INC.
Date: August 1, 1996 By: /s/ Bernard Winograd
--------------------
Bernard Winograd
Executive Vice President and
Chief Financial Officer
14
<PAGE>
EXHIBIT INDEX
Exhibit Number Description
23 Consent of Deloitte & Touche LLP.
* 99 (a) Purchase and Sale Agreement By and Between
The Pacific Telesis Group Master Pension
Trust and The Taubman Realty Group Limited
Partnership, dated July 17, 1996 (without
exhibits or schedules, which will be
supplementally provided to the Securities
and Exchange Commission upon its request).
* 99 (b) Subscription Agreement By and Between The
Pacific Telesis Group Master Pension Trust
and The Taubman Realty Group Limited
Partnership dated July 18, 1996 (without
exhibits or schedules, which will be
supplementally provided to the Securities
and Exchange Commission upon its request).
* Certain portions of this document have been omitted and are being
separately filed with the Securities and Exchange Commission by TRG
with its request for confidential treatment.
15
Exhibit 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Amendment No. 1 to Form S-11 on
Form S-8 Registration Statement No. 33-65934 of Taubman Centers, Inc., in
Amendment No. 2 to Form S-3 Registration Statement No. 33-73038 of Taubman
Centers, Inc., in Amendment No. 1 to Form S-3 Registration Statement No.
33-99636 of Taubman Centers, Inc., and in Form S-8 Registration Statement No.
33-80650 of The Taubman Realty Group Limited Partnership of our report dated
July 31, 1996, on the historical summaries of revenues and direct operating
expenses of Fairlane Town Center for the three years ended December 31, 1995
appearing in this Current Report on Form 8-K of Taubman Centers, Inc. dated July
19, 1996.
DELOITTE & TOUCHE LLP
Detroit, Michigan
July 31, 1996
Exhibit 99 (a)
PURCHASE AND SALE AGREEMENT
By and Between
THE PACIFIC TELESIS GROUP MASTER PENSION TRUST
"PacTel,"
and
THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP
"TRG,"
Dated:
July 17, 1996
Certain portions of this document have been omitted and are being separately
filed with the Securities and Exchange Commission with a request for
confidential treatment.
- 1 -
<PAGE>
TABLE OF CONTENTS
PAGE
RECITALS AND CERTAIN DEFINITIONS...........................................1
ARTICLE I - PURCHASE AND SALE..............................................1
1.1 Purchase and Sale of the PacTel Interest.......................1
1.2 Purchase Price.................................................3
ARTICLE II - REPRESENTATIONS, WARRANTIES AND COVENANTS.....................3
2.1 Representations and Warranties of TRG..........................3
2.2 Survival of TRG's Representations and Warranties...............4
2.3 No Other Representations or Warranties by TRG..................5
2.4 Representations and Warranties of PacTel ......................5
2.5 Survival of PacTel's Representations and Warranties............7
2.6 As-Is Sale.....................................................8
2.7 Knowledge......................................................9
ARTICLE III - CLOSING......................................................9
3.1 Closing ......................................................9
3.2 Closing Documents.............................................10
3.2.1 TRG's Deliveries.....................................10
3.2.2 PacTel's Deliveries..................................10
ARTICLE IV - INDEMNIFICATION..............................................10
4.1 TRG's Indemnification of PacTel ..............................10
4.2 PacTel's Indemnification of TRG ..............................11
4.3 Procedure for Indemnification.................................13
4.4 Survival .....................................................15
4.5 Limitation on PacTel's Liability for Indemnity................17
ARTICLE V - PRORATIONS AND ADJUSTMENTS....................................17
ARTICLE VI - MISCELLANEOUS................................................18
6.1 Allocations...................................................18
6.2 Notices .....................................................18
6.3 Legal Fees and Other Costs....................................19
6.4 Successors and Assigns........................................20
6.5 Governing Law.................................................20
6.6 Captions .....................................................20
6.7 References; Gender............................................20
(i)
<PAGE>
6.8 Entire Agreement; Amendment...................................20
6.9 Severability..................................................21
6.10 Time is of the Essence........................................21
6.11 Public Disclosure.............................................21
6.12 Additional Actions and Documents..............................21
6.13 Waiver; Modification..........................................21
6.14 Cumulative Remedies...........................................22
6.15 Commission....................................................22
6.16 Counterparts..................................................22
6.17 Exhibits and Schedules........................................23
SIGNATURE PAGE .....................................................23
EXHIBITS
A - Assignment of Partnership Interest
SCHEDULES
4.2 - Certain Lawsuits, Claims and other obligations
(ii)
<PAGE>
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is entered into on this
17th day of July, 1996, by and among Boston Safe Deposit and Trust Company as
trustee of the Pacific Telesis Group Master Pension Trust ("PacTel"), and The
Taubman Realty Group Limited Partnership ("TRG"), a Delaware limited
partnership.
The following are the facts underlying this Agreement:
A. PacTel is the owner of a 75% partnership interest in Fairlane Town
Center (the "Partnership"), a Michigan co-partnership (the "PacTel Interest").
B. TRG is the owner of a 25% partnership interest in the Partnership. Prior
to Closing (as defined below) TRG will have assigned a one percent (1%)
partnership interest in the Partnership to The TRG Trust VIII.
C. TRG and PacTel desire to have PacTel sell, assign and transfer to TRG
the PacTel Interest upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the representations and warranties and
the covenants and agreements contained in this Agreement, the parties, intending
to be legally bound, hereto hereby agree as follows:
ARTICLE I
PURCHASE AND SALE
1.1 Purchase and Sale of the PacTel Interest. Subject to all of the terms
and conditions set forth in this Agreement, PacTel agrees to sell, assign and
transfer the PacTel Interest to TRG effective on and as of the Closing Date (as
defined below) in accordance with the terms and conditions contained herein. The
parties acknowledge that such sale is intended to be a taxable event under the
Internal Revenue Code of 1986, as amended (the "Code"). As a result of such
sale, assignment and transfer, PacTel agrees that effective as of the
1
<PAGE>
Closing Date it shall withdraw as a partner in the Partnership and shall cease
to have any right or interest in or to the Partnership, its property and its
business, subject to the provisions set forth below in this Section 1.1. From
and after the Closing Date, (i) except as otherwise provided in Section 4.2
hereof, PacTel shall cease to represent itself as a partner in the Partnership
or as a person otherwise representing or having authority to bind the
Partnership, and (ii) PacTel shall cease to have any responsibility for any of
the debts, liabilities or obligations of or relating to the Partnership first
arising or first accruing after the Closing Date. Notwithstanding the foregoing,
(i) nothing contained herein shall affect any indirect interest in the
Partnership which PacTel may have or may in the future have by virtue of
PacTel's ownership of any units of partnership interest in TRG and (ii) except
as otherwise provided in Article IV hereof, nothing contained in this Agreement
shall affect any of PacTel's rights or obligations under the partnership
agreement of the Partnership or under law to the extent they relate to the
period of time when PacTel owned the PacTel Interest, or to claims or
liabilities which are asserted on or after the Closing Date which relate to any
period prior to the Closing Date, and without limiting the foregoing, PacTel
shall have (x) all of its existing rights to contribution and indemnification
from TRG and/or the Partnership under the partnership agreement of the
Partnership or law, if any, (y) the right to receive income tax information
relating to the Partnership with respect to any period on or prior to the
Closing Date, and (z) the right to audit, review and have access to the books
and records of the Partnership which relate to any period on or prior to the
Closing Date. PacTel covenants and agrees that on the Closing Date, the PacTel
Interest shall be free of any pledge, lien, encumbrance, or rights of others of
any kind, except for (i) the rights of TRG pursuant to this Agreement and (ii)
the terms and conditions of the partnership agreement of the Partnership. TRG
expressly waives, on its own behalf and on behalf of the Partnership, any rights
of first offer, rights of first
2
<PAGE>
refusal or similar rights that it or the Partnership may have to purchase the
PacTel Interest pursuant to the partnership agreement of the Partnership.
1.2 Purchase Price. TRG hereby agrees to pay, by means of a federal funds
wire transfer on the Closing Date, the sum of $65,575,000 (the "Purchase Price")
for the PacTel Interest.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
2.1 Representations and Warranties of TRG. To induce PacTel to enter into
this Agreement, TRG hereby represents and warrants to PacTel as follows:
(a) TRG is a limited partnership duly organized, validly existing and
in good standing under the laws of the State of Delaware, and has
made all filings and recordings necessary to exist, operate and
to do business under all presently applicable statutes, laws,
ordinances and governmental rules and regulations ("Governmental
Regulations") and has the partnership power and authority to own,
operate and lease its properties, to carry on its business as
currently conducted and to execute and deliver this Agreement and
any other documents and instruments to be delivered by it
pursuant to or in connection with this Agreement, and to perform
all of its obligations under this Agreement and any other
documents and instruments to be delivered by TRG pursuant hereto
or in connection herewith;
(b) The execution, delivery and performance by TRG of this Agreement
and all other documents and instruments required to be delivered
by TRG pursuant hereto or in connection herewith, the fulfillment
of and the compliance by TRG with the respective terms and
provisions hereof and thereof, and the due consummation by TRG of
the transaction contemplated hereby and thereby, have been duly
and validly authorized by all necessary partnership actions of
TRG (none of which actions have been modified or rescinded, and
all of which actions are in full force and effect), and do not:
(a) require any consent or approval of any partner, lender,
creditor, investor or, to the best of TRG's knowledge, judicial
or administrative body, Authority or other party which has not
already been obtained; or (b) conflict with, or result in a
breach of, or constitute a default under, any partnership
agreement, articles of incorporation, bylaws, shareholders
agreement, bond, note or other evidence of indebtedness,
contract, indenture, mortgage, deed of trust, loan, lease, or any
other agreement or instrument to which TRG is a party or by which
TRG or any of TRG's properties may be bound or affected or, to
the best of TRG's knowledge, any Governmental Regulation
presently applicable to TRG;
3
<PAGE>
(c) No authorization, consent, order, approval or license of or
filing with, or other act by or in respect of any federal, state
or local governmental body, board, commission or agencies
("Authority") is or will be necessary to permit the valid
execution, delivery and performance by TRG of this Agreement or
any of the instruments or documents to be executed and delivered
by TRG pursuant to or in connection with this Agreement;
(d) This Agreement constitutes, and all other documents and
instruments to be delivered by TRG pursuant hereto or in
connection herewith will constitute, legal, valid and binding
obligations of TRG, enforceable against TRG in accordance with
their respective terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium, or similar
laws relating to or affecting generally the enforcement of
creditors' rights and general principles of equity;
(e) No attachments, execution proceedings, assignments for the
benefit of creditors, insolvency, bankruptcy or other similar
legal proceedings are pending or, to the best of TRG's knowledge,
threatened against TRG nor are any such proceedings contemplated
by TRG. TRG has never been a debtor under any case commenced
under the United States Bankruptcy Code;
(f) [Omitted and being separately filed with the Securities and
Exchange Commission (SEC) with a request for confidential
treatment]; and
(g) [Omitted and being separately filed with the SEC with a request
for confidential treatment].
2.2 Survival of TRG's Representations and Warranties. All representations
and warranties made by TRG in Section 2.1 and 6.15 of this Agreement shall not
merge into the instruments of conveyance to be delivered at the Closing and
shall survive the Closing until [omitted and being separately filed with the SEC
with a request for confidential treatment], at which time such representations
and warranties shall automatically expire, except as hereinafter specifically
set forth. If, prior to [omitted and being separately filed with the SEC with a
request for confidential treatment], PacTel alleges in writing to TRG that any
specific representation or warranty given by TRG was untrue when made or was
breached by TRG (which written allegation shall identify with reasonable
specificity the contested representation
4
<PAGE>
or warranty and the facts supporting PacTel's allegation), then the contested
representation and warranty shall survive, solely with respect to the claims so
alleged, until [omitted and being separately filed with the SEC with a request
for confidential treatment], at which time it shall automatically expire, unless
PacTel has filed a lawsuit with respect thereto prior to [omitted and being
separately filed with the SEC with a request for confidential treatment] (and if
such lawsuit is filed, the contested representation and warranty, solely with
respect to the claims alleged in such lawsuit, shall survive until the lawsuit
is resolved, at which time it shall automatically expire).
2.3 No Other Representations or Warranties by TRG. Nothing in any of the
documents or instruments to be delivered by TRG at the Closing shall be deemed
to expand or alter in any manner the representations and warranties set forth in
this Agreement. Except as expressly set forth in this Agreement and in all
certificates, documents and instruments delivered pursuant to or in connection
with this Agreement, no representations, warranties or certifications regarding
the subject matter of this Agreement have been made or are made, and no
responsibility regarding the subject matter of this Agreement has been or is
assumed, by TRG or by any partner, officer, employee or equity owner in TRG as
to any fact or condition. The parties hereto agree that all undertakings and
agreements heretofore made between them or their respective agents or
representatives with respect to the subject matter hereof are merged in this
Agreement and the Exhibits and Schedules attached hereto and in all
certificates, documents and instruments to be delivered pursuant to or in
connection with this Agreement, which alone fully and completely express their
agreement. The terms and provisions of this Section 2.3 shall survive the
Closing, notwithstanding any provision of this Agreement to the contrary.
2.4 Representations and Warranties of PacTel. To induce TRG to enter into
this Agreement, PacTel hereby represents, warrants, and covenants to and with
TRG as follows:
5
<PAGE>
(a) [Omitted and being separately filed with the SEC with a request
for confidential treatment];
(b) As of the Closing, PacTel will convey to TRG good title to the
PacTel Interest free and clear of any lien, claim, pledge,
encumbrance, security interest, or rights of others of any kind,
except for the terms and conditions of the partnership agreement
of the Partnership;
(c) [Omitted and being separately filed with the SEC with a request
for confidential treatment];
(d) PacTel is a trust duly created and validly existing under the
laws of the State of California, and has made all filings and
recordings necessary to exist, operate and to do business under
all presently applicable Governmental Regulations and has the
trust power and authority to own, operate and lease its
properties, to carry on its business as currently conducted and
to execute and deliver this Agreement and any other documents and
instruments to be delivered by it pursuant to or in connection
with this Agreement, and to perform all of its obligations under
this Agreement and any other documents and instruments to be
delivered by PacTel pursuant hereto or in connection herewith;
(e) The execution, delivery and performance by PacTel of this
Agreement and all other documents and instruments required to be
delivered by PacTel pursuant hereto or in connection herewith,
the fulfillment of and the compliance by PacTel with the
respective terms and provisions hereof and thereof, and the due
consummation by PacTel of the transaction contemplated hereby and
thereby, have been duly and validly authorized by all necessary
trust actions of PacTel (none of which actions have been modified
or rescinded, and all of which actions are in full force and
effect), and do not: (a) require any consent or approval of any
lender, creditor, beneficiary or, to the best of PacTel's
knowledge, judicial or administrative body, Authority or other
party which has not already been obtained; or (b) conflict with,
or result in a breach of, or constitute a default under, any
partnership agreement, articles of incorporation, bylaws,
shareholders agreement, bond, note or other evidence of
indebtedness, contract, indenture, mortgage, deed of trust, loan,
lease, or any other agreement or instrument to which PacTel is a
party or by which PacTel or any of PacTel's properties may be
bound or affected or, to the best of PacTel's knowledge, any
Governmental Regulation presently applicable to PacTel; provided,
however, that the representations and warranties set forth in
this subparagraph (e) shall not cover, include or extend to any
documents, instruments, agreements, bonds, notes, evidences of
indebtedness, contracts, indentures, mortgages, deeds of trust,
loans, leases or any other agreement or instrument to which the
Partnership is a party or by which the Partnership's property may
be bound or affected and which was not executed by PacTel;
6
<PAGE>
(f) No authorization, consent, order, approval or license of or
filing with, or other act by or in respect of any Authority is or
will be necessary to permit the valid execution, delivery and
performance by PacTel of this Agreement or any of the instruments
or documents to be executed and delivered by PacTel pursuant to
or in connection with this Agreement;
(g) This Agreement constitutes, and all other documents and
instruments to be delivered by PacTel pursuant hereto or in
connection herewith will constitute, legal, valid and binding
obligations of PacTel, enforceable against PacTel in accordance
with their respective terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium, or
similar laws relating to or affecting generally the enforcement
of creditors' rights and general principles of equity; and
(h) No attachments, execution proceedings, assignments for the
benefit of creditors, insolvency, bankruptcy or other similar
legal proceedings are pending or, to the best of PacTel's
knowledge, threatened against PacTel nor are any such proceedings
contemplated by PacTel. PacTel has never been a debtor under any
case commenced under the United States Bankruptcy Code.
2.5 Survival of PacTel's Representations and Warranties. All
representations and warranties made by PacTel in Section 2.4 and 6.15 of this
Agreement shall not merge into the instruments of conveyance to be delivered at
the Closing and shall survive the Closing until [omitted and being separately
filed with the SEC with a request for confidential treatment], at which time
such representations and warranties shall automatically expire, except as
hereinafter specifically set forth. If, prior to [omitted and being separately
filed with the SEC with a request for confidential treatment], TRG alleges in
writing to PacTel that any specific representation or warranty given by PacTel
was untrue when made or was breached by PacTel (which written allegation shall
identify with reasonable specificity the contested representation or warranty
and the facts supporting TRG's allegation), then the contested representation
and warranty shall survive, solely with respect to the claims so alleged, until
[omitted and being separately filed with the SEC with a request for confidential
treatment], at which time it shall automatically expire, unless TRG has filed a
lawsuit with respect thereto prior to [omitted and being separately filed with
the SEC with a request for confidential treatment] (and if such
7
<PAGE>
lawsuit is filed, the contested representation and warranty, solely with respect
to the claims alleged in such lawsuit, shall survive until the lawsuit is
resolved, at which time it shall automatically expire).
2.6 As-Is Sale. Nothing in any of the documents or instruments to be
delivered by PacTel at the Closing shall be deemed to expand or alter in any
manner the representations and warranties set forth in this Agreement. Except as
expressly set forth in this Agreement and in all certificates, documents and
instruments delivered pursuant to or in connection with this Agreement, no
representations, warranties or certifications regarding the subject matter of
this Agreement have been made or are made, and no responsibility regarding the
subject matter of this Agreement has been or is assumed, by PacTel or by any
trustee, officer, employee, beneficiary or representative as to any fact or
condition which has or might affect the PacTel Interest or any portion thereof.
Without limiting the foregoing, TRG acknowledges that (i) it has served as
managing partner of the Partnership and has had full access to the books,
records, reports and property of the Partnership, (ii) TRG is relying upon its
own knowledge, inspection and investigation of the Partnership and the physical,
environmental, economic, legal and other condition or status of the property
owned by the Partnership, (iii) TRG has not received from PacTel any accounting,
tax, legal, architectural, engineering, environmental, property management or
other advice with respect to the purchase of the PacTel Interest and has relied
instead solely upon the advice of its own accounting, tax, legal, architectural,
engineering, environmental, property management or other advisors, and (iv)
except for the representations and warranties expressly made herein by PacTel,
TRG is purchasing the PacTel Interest in its "AS IS" condition and WITH ALL
FAULTS on the Closing Date and assumes the risk that adverse physical,
environmental, economic, legal or other conditions may not be known to TRG or
may not have been revealed by its inspection or investigation. The parties
hereto agree that all undertakings and agreements heretofore made between them
or their
8
<PAGE>
respective agents or representatives with respect to the subject matter hereof
are merged in this Agreement and the Exhibits and Schedules attached hereto and
in all certificates, documents and instruments to be delivered pursuant to
Section 3.2 hereof, which alone fully and completely express their agreement,
and that this Agreement has been entered into after full investigation, or with
the parties satisfied with the opportunity afforded for investigation of, the
PacTel Interest and no party is relying upon any statement or representation by
any other party unless such statement or representation is specifically embodied
in this Agreement or in the Exhibits or the Schedules attached hereto or in any
certificates, documents and instruments to be delivered pursuant to or in
connection with this Agreement. The terms and provisions of this Section 2.6
shall survive the Closing, notwithstanding any provision of this Agreement to
the contrary.
2.7 Knowledge. TRG shall not have any liability for, nor shall it be deemed
to have breached, any representation or warranty set forth in this Agreement to
the extent that prior to the Closing Date, PacTel had actual knowledge that all
or any part of such representation or warranty made by TRG was not true on the
Closing Date, but only to the extent of those portions of such representation
and warranty that were known by PacTel to be untrue. PacTel shall not have any
liability for, nor shall PacTel be deemed to have breached, any representation
or warranty set forth in this Agreement to the extent that prior to the Closing
Date, TRG had actual knowledge that all or any part of such representation or
warranty made by PacTel was not true on the Closing Date, but only to the extent
of those portions of such representation and warranty that were known by TRG to
be untrue.
ARTICLE III
CLOSING
3.1 Closing. The consummation of the transactions contemplated by this
Agreement (the "Closing") shall occur at the office of Miro Weiner & Kramer,
Suite 100, 500 North Woodward Avenue, Bloomfield Hills, Michigan 48304. The
Closing shall occur on July 17, 1996, or on such other date as the parties may
agree (the "Closing Date").
9
<PAGE>
3.2 Closing Documents.
3.2.1 TRG's Deliveries. At the Closing, TRG shall deliver to PacTel:
(a) An acceptance of the Assignment of Partnership Interest (as
defined below), executed by TRG.
(b) A release from TRG in favor of PacTel pursuant to which TRG
releases PacTel from any and all claims alleged by it in that
certain lawsuit titled Taubman Realty Group L.P. v. Comerica Bank
(Mich. Cir. Ct. Oakland County No. 95-510033-CK) (the "Lawsuit").
(c) An opinion of Miro Weiner & Kramer, legal counsel for TRG, in
form and substance reasonably satisfactory to PacTel, as to (i)
due authorization, execution and delivery of this Agreement, and
the documents described in this Section 3.2.1, by TRG and (ii)
such other matters as may be reasonably required by PacTel.
3.2.2 PacTel's Deliveries. At the Closing, PacTel shall deliver to TRG, as
applicable:
(a) Assignment of Partnership Interest in the form of Exhibit A,
attached hereto and made a part hereof (the "Assignment of
Partnership Interest"), assigning the PacTel Interest to TRG in
the condition required hereunder.
(b) A release from PacTel in favor of TRG pursuant to which PacTel
releases TRG from any and all claims alleged by it in the
Lawsuit.
(c) The opinion of Sheppard Mullin Richter & Hampton, legal counsel
for PacTel, in form and substance reasonably satisfactory to TRG,
as to (i) the due authorization, execution and delivery of this
Agreement, and the documents described in this Section 3.2.2, by
PacTel and (ii) such other matters as may be reasonably required
by TRG.
(d) PacTel's Foreign Investment in Real Property Tax Act
certification.
ARTICLE IV
INDEMNIFICATION
4.1 TRG's Indemnification of PacTel. [Omitted and being separately filed
with the SEC with a request for confidential treatment].
10
<PAGE>
4.2 PacTel's Indemnification of TRG. [Omitted and being separately filed
with the SEC with a request for confidential treatment].
4.3 Procedure for Indemnification. If a party (the "Obligated Party") is
required to indemnify the other party (the "Indemnified Party") under the terms
of this Agreement with respect to a third-party claim, then this Section 4.3
shall govern the procedure with respect to such indemnification. If the
Indemnified Party is the Partnership, then the Obligated Party shall be TRG and
PacTel acting jointly. Upon receipt by the Indemnified Party of notice of any
claim or matter for which it is entitled to seek indemnification from the
Obligated Party under the terms hereof (the "Claim"), the Indemnified Party
shall promptly notify the Obligated Party of the Claim, but the failure to
notify the Obligated Party will not relieve the Obligated Party of any liability
that it may have to any Indemnified Party, except to the extent that the
Obligated Party is prejudiced by the Indemnifying Party's failure to give such
notice. The Obligated Party shall contest and defend against the Claim;
provided, however, that the Obligated Party shall not commit, suffer, or permit
any act or omission which would cause the Indemnified Party to incur, or expose
the Indemnified Party to the incurrence of, any civil fines or criminal
penalties. The Obligated Party shall keep the Indemnified Party informed of the
progress of the defense against the Claim which shall be diligently pursued. If
the Obligated Party assumes the defense of any Claim, no compromise or
settlement of such Claim may be effected by the Obligated Party without the
Indemnified Party's consent unless (A) there is no finding or admission of any
violation by the Indemnified Party of any applicable laws, rules, regulations or
other legal requirements or any violation by the Indemnified Party of the rights
of any person or entity and no effect on other claims that may be made against
the Indemnified Party, and (B) the sole relief provided is monetary damages that
are paid in full by the Obligated Party. If a final adjudication (i.e., an
adjudication with respect to which the time for taking all appeals as of right
has lapsed or with respect to which no further appeal is legally
11
<PAGE>
available) of such Claim is rendered against the Indemnified Party, by a court
of competent jurisdiction, the Obligated Party shall, within thirty (30) days
after such adjudication becomes final, pay and satisfy such Claim. The Obligated
Party shall notify the Indemnified Party in writing within ten (10) business
days after an adjudication is rendered as to whether the Obligated Party will
appeal the adjudication. If the Obligated Party notifies the Indemnified Party
that it will not appeal an adjudication, then the Indemnified Party may
undertake such appeal, at its sole cost and expense, in which case the
Indemnified Party shall notify the Obligated Party at least ten (10) business
days' prior to the last date on which the Obligated Party is required to pay and
satisfy the Claim pursuant to this Section 4.3 and the Obligated Party shall
within twenty (20) business days' after such notification deposit into escrow,
with a national financial institution or title company reasonably acceptable to
the Indemnified Party and the Obligated Party, the amount necessary to pay and
satisfy the Claim. Upon depositing such amount, the Obligated Party shall be
released from any further obligation hereunder to pay, satisfy and contest the
Claim. The escrowed amount shall be disbursed and applied as follows: first, to
the Indemnified Party, at any time upon demand by the Indemnified Party, to be
used to pay and satisfy such Claim; second, to the Indemnified Party for the
payment or reimbursement of the reasonable costs and expenses incurred by the
Indemnified Party in prosecuting such appeal; and third, any excess to the
Obligated Party. If the Obligated Party fails to contest and defend against, or
to pay and satisfy the Claim within such thirty (30) days, then the Indemnified
Party may, at its option, contest and defend against and/or pay and satisfy the
Claim, in which case the Obligated Party shall immediately reimburse the
Indemnified Party for all costs and expenses (such as, but not limited to,
actual attorneys' fees and disbursements) incurred by the Indemnified Party in
contesting and defending against and/or paying and satisfying the Claim and
enforcing the indemnification, together with interest on such costs and expenses
from the time incurred until the time paid at the lower of (i) three
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<PAGE>
percent (3%) in excess of the prime rate announced by Chemical Bank, from time
to time, or (ii) the highest rate permitted by law. Each party agrees to
cooperate with the reasonable requests of the other party in contesting,
defending, paying, satisfying or appealing an adjudication rendered with respect
to any Claim. If, as a result of an appeal, insurance recovery or otherwise, the
Indemnified Party recovers from a third party any amounts with respect to which
the Obligated Party made payments to or for the account of the Indemnified Party
under this Article IV, the Indemnified Party shall promptly pay over to the
Obligated Party any amounts so recovered.
A claim for indemnification for any matter not involving a third party
claim may be asserted by notice to the party from whom indemnification is
sought.
4.4 Survival. (a) [Omitted and being separately filed with the SEC with a
request for confidential treatment].
(b) [Omitted and being separately filed with the SEC with
a request for confidential treatment].
(c) [Omitted and being separately filed with the SEC with a
request for confidential treatment].
(d) [Omitted and being separately filed with the SEC with a
request for confidential treatment].
4.5 Limitation on PacTel's Liability for Indemnity. [Omitted and being
separately filed with the SEC with a request for confidential treatment].
ARTICLE V
PRORATIONS AND ADJUSTMENTS
[Omitted and being separately filed with the SEC with a request for
confidential treatment].
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<PAGE>
ARTICLE VI
MISCELLANEOUS
6.1 Allocations. Notwithstanding any provision of this Agreement to the
contrary, profits, gains, and losses of the Partnership and items thereof
through the close of business on the day immediately prior to the Closing Date
shall be allocated by the Partnership in a manner permitted by Section 706 of
the Code as selected by TRG and reasonably acceptable to PacTel. In the event
that TRG elects to close its books for tax purposes and the Closing Date occurs
on a day other than on the last day of a month, the Partnership shall close its
books for tax purposes as of the end of such month and all profits, gains and
losses of the Partnership for the month in which the Closing occurs shall be
prorated for tax purposes on an equal, per diem basis.
6.2 Notices. All notices required, contemplated or sent under this
Agreement shall be delivered (a) personally, (b) by confirmed facsimile
transmission, (c) by next day courier service (e.g., Federal Express), or (d) by
certified or registered mail, return receipt requested, addressed as follows:
If to TRG, to:
200 East Long Lake Road
Suite 300
Bloomfield Hills, Michigan 48304
Attention: Robert S. Taubman
Telecopy: (810) 258-7601
With a required copy to:
Miro Weiner & Kramer
Suite 100
500 North Woodward Avenue
Bloomfield Hills, Michigan 48304
Attention: Jeffrey H. Miro, Esq.
Telecopy: (810) 646-2681
14
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If to PacTel to:
Pacific Telesis Group
130 Kearny Street
Suite 3401
San Francisco, California 94108
Attention: Frederick J. McIntosh
Telecopy: (415) 391-9148
and to:
The Yarmouth Group, Inc.
One Embarcadero Center
Suite 2101
San Francisco, California 94111
Attention: Andrew Friedman
Telecopy: (415) 392-3317
With a required copy to:
Sheppard, Mullin, Richter & Hampton, LLP
Four Embarcadero Center
17th Floor
San Francisco, California 94111
Attention: Joan H. Story, Esq.
Telecopy: (415) 434-3947
All notices under this Agreement shall be deemed to have been properly given or
served, (a) if delivered by hand or mailed, on the date of receipt or date of
refusal to accept shown on the delivery receipt or return receipt, (b) if
delivered by Federal Express or similar expedited overnight commercial carrier
or courier, on the date that is one (1) business day after the date upon which
the same shall have been delivered to Federal Express or similar expedited
overnight commercial carrier, addressed to the recipient, with all shipping
charges prepaid, provided that the same is actually received (or refused) by the
recipient in the ordinary course, and (c) if sent by telecopier, on the date of
confirmed delivery.
6.3 Legal Fees and Other Costs. (a) TRG shall not be responsible, directly
or indirectly, for any of PacTel's legal fees and any other costs incurred by it
incident to the preparation, negotiation or execution of this Agreement or any
other documents required pursuant hereto whether or not any of the transactions
contemplated hereunder is consummated.
15
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(b) PacTel shall not be responsible, directly or indirectly, for any of
TRG's or the Partnership's legal fees and any other costs incurred incident to
the preparation, negotiation or execution of this Agreement or any other
documents required pursuant hereto whether or not any of the transactions
contemplated hereunder is consummated.
6.4 Successors and Assigns. This Agreement shall be binding upon, and shall
inure to the benefit of, the parties hereto, and their respective successors and
assigns.
6.5 Governing Law. This Agreement shall be governed by, and shall be
interpreted and construed in accordance with, the laws of the State of Michigan
without regard to choice of law principles.
6.6 Captions. The captions used throughout this Agreement are for
convenience only and shall not be used in the interpretation or construction of
this Agreement.
6.7 References; Gender. Unless the context otherwise requires, references
in this Agreement to Sections shall be deemed to refer to Sections of this
Agreement. Throughout this Agreement, the use of masculine pronouns shall be
deemed to include feminine and neuter pronouns as the context may require.
6.8 Entire Agreement; Amendment. This Agreement and the documents and
instruments executed by TRG and/or PacTel pursuant hereto or in connection
herewith contain the entire agreement between the parties hereto with respect to
the transaction contemplated herein, supersedes all prior written agreements and
negotiations (including, without limitation the (i) term sheet letter, dated
January 12, 1996, between TRG and PacTel, (ii) the Confidentiality Agreement,
dated February 14, 1996, between TRG and PacTel, (iii) the letter agreement,
dated March 14, 1996, from TRG to PacTel and (iv) the term sheet letter, dated
June 13, 1996 between TRG and PacTel) and oral understandings, if any, and may
not be
16
<PAGE>
amended, supplemented, or discharged except by performance or by an instrument
in writing signed by all of the parties hereto.
6.9 Severability. Wherever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by, or shall be
invalid under, applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
6.10 Time is of the Essence. Time is of the essence with respect to this
Agreement.
6.11 Public Disclosure. Neither PacTel nor TRG, each of whom is extremely
sensitive to public announcements, will make any public announcement or other
disclosure of the transaction described herein or the terms thereof without the
consent of the other party, except as may be required by such party to comply
with applicable securities and other laws, rules and regulations including the
rules and requirements of the New York Stock Exchange. If either party
determines that it is required by such laws, rules or requirements to make any
public announcement or public disclosure prior to the Closing Date, the
disclosing party, prior to such disclosure or announcement, shall notify the
other party and shall deliver to the other party an opinion of its counsel that
such disclosure is required by such laws, rules or requirements.
6.12 Additional Actions and Documents. To the extent not inconsistent with
the express terms of this Agreement, each of the parties hereto hereby covenants
to take or cause to be taken such further actions, to execute, deliver, and file
or cause to be executed, delivered, and filed such further documents and
instruments, and to obtain such consents, as may be necessary or as may be
reasonably requested in order to effectuate fully the purposes, terms, and
conditions of this Agreement, whether before, at, or after the Closing.
6.13 Waiver; Modification. Failure by any party hereto to insist upon or
enforce any of its rights shall not constitute a waiver thereof, and nothing
shall constitute a waiver of a
17
<PAGE>
party's right to insist upon strict compliance with the provisions hereof. Any
party hereto may waive the benefit of any provision or condition for its benefit
contained in this Agreement. No oral modification hereof shall be binding upon
the parties, and any modification shall be in writing and signed by the parties.
6.14 Cumulative Remedies. Each and every one of the rights, benefits and
remedies provided to PacTel by this Agreement, or any instruments or documents
executed pursuant to this Agreement, are cumulative, and shall not be exclusive
of any other rights, remedies and benefits allowed by law or equity to PacTel.
Each and every of the rights, benefits and remedies provided to TRG by this
Agreement, or any instruments or documents executed pursuant to this Agreement,
are cumulative, and shall not be exclusive of any other rights, remedies and
benefits allowed by law or equity to TRG.
6.15 Commission. PacTel represents and warrants to TRG, and TRG represents
and warrants to PacTel, that no broker or agent has been engaged by such party
in connection with the negotiation and/or consummation of this Agreement. Each
of the parties hereto agrees to defend and indemnify the other party against any
claims against the other party for any brokerage fees, finders' fees or
commissions with respect to the transaction contemplated by this Agreement which
are asserted by any person purporting to act or to have acted for or on behalf
of the indemnifying party, and to pay the other party's reasonable attorneys'
fees and disbursements in connection therewith.
6.16 Counterparts. To facilitate execution, this Agreement may be executed
in as many counterparts as may be required; and it shall not be necessary that
the signature of, or on behalf of each party, or that the signatures of all
persons required to bind any party, appear on each counterpart, but it shall be
sufficient that the signature of or on behalf of each party, or the signatures
of the persons required to bind any party, appear on one or more of such
counterparts. All counterparts shall collectively constitute a single agreement.
18
<PAGE>
6.17 Exhibits and Schedules. The Exhibits and Schedules enumerated herein
are attached hereto and incorporated herein by this reference. The Exhibits and
Schedules are hereby made a part of this Agreement as fully as if set forth in
the text hereof.
IN WITNESS WHEREOF, the parties have entered into this Agreement on the
date first above written.
BOSTON SAFE DEPOSIT AND TRUST COMPANY,
AS TRUSTEE OF THE PACIFIC TELESIS GROUP
MASTER PENSION TRUST
By: The Yarmouth Group, Inc., its
authorized agent
By: /s/ Andrew Friedman
---------------------------
Andrew Friedman
Its: Senior Vice President
"PacTel"
THE TAUBMAN REALTY GROUP LIMITED
PARTNERSHIP, a Delaware limited
partnership
By: /s/ Cordell A. Lietz
---------------------------
Cordell A. Lietz
Its: Authorized Signatory
"TRG"
19
Exhibit 99 (b)
SUBSCRIPTION AGREEMENT
By and Between
THE PACIFIC TELESIS GROUP MASTER PENSION TRUST
"PacTel,"
and
THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP
"TRG,"
Dated:
July 18, 1996
Certain portions of this document have been omitted and are being separately
filed with the Securities and Exchange Commission with a request for
confidential treatment.
- 1 -
<PAGE>
TABLE OF CONTENTS
PAGE
RECITALS AND CERTAIN DEFINITIONS...........................................1
ARTICLE I - SUBSCRIPTION...................................................1
1.1 Subscription for Units of Partnership Interest.................1
1.2 Subscription Price.............................................2
1.3 Continuing Offer...............................................2
ARTICLE II - REPRESENTATIONS, WARRANTIES AND COVENANTS.....................4
2.1 Representations and Warranties of TRG..........................4
2.2 Survival of TRG's Representations and Warranties...............8
2.3 As-Is Issuance.................................................8
2.4 Representations and Warranties of PacTel ......................9
2.5 Survival of PacTel's Representations and Warranties...........10
2.6 No Other Representations or Warranties by PacTel..............11
2.7 Knowledge.....................................................12
ARTICLE III - CLOSING.....................................................12
3.1 Closing .....................................................12
3.2 Closing Documents.............................................12
3.2.1 TRG's Deliveries.....................................12
3.2.2 PacTel's Deliveries..................................13
ARTICLE IV - INDEMNIFICATION..............................................13
4.1 TRG's Indemnification of PacTel ..............................13
4.2 PacTel's Indemnification of TRG ..............................14
4.3 Procedure for Indemnification.................................14
4.4 Survival .....................................................17
4.5 Limitation on TRG's Liability for Indemnity and
Representations and Warranties..............................18
4.6 Limitation on PacTel's Liability for Indemnity and
Representations and Warranties..............................18
ARTICLE V - PRORATIONS AND ADJUSTMENTS....................................19
ARTICLE VI - MISCELLANEOUS................................................19
6.1 Public Disclosure.............................................19
6.2 Notices .....................................................20
6.3 Legal Fees and Other Costs....................................21
(i)
<PAGE>
6.4 Successors and Assigns........................................21
6.5 Governing Law.................................................21
6.6 Captions .....................................................21
6.7 References; Gender............................................22
6.8 Entire Agreement; Amendment...................................22
6.9 Severability..................................................22
6.10 Time is of the Essence........................................22
6.11 Additional Actions and Documents..............................22
6.12 Waiver; Modification..........................................23
6.13 Cumulative Remedies...........................................23
6.14 Commission....................................................23
6.15 Counterparts..................................................23
6.16 Exhibits and Schedules........................................24
SIGNATURE PAGE .....................................................24
EXHIBITS
A - TCI Designation
B - TCI Representation Letter
C - Investment Certificate
SCHEDULES
2.1(c) - TRG Consents and Approvals
2.1(d) - TRG Governmental Authorizations and Filings
2.1(h) - Schedule of Ownership of TRG
2.1(k) - Press Releases
2.4(a) - TRG Tenant Ownership by PacTel
(ii)
<PAGE>
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT (this "Agreement") is entered into on this 18th
day of July, 1996, by and among Boston Safe Deposit and Trust Company, as
trustee of the Pacific Telesis Group Master Pension Trust ("PacTel"), and The
Taubman Realty Group Limited Partnership ("TRG"), a Delaware limited
partnership.
The following are the facts underlying this Agreement:
A. TRG and PacTel desire to have PacTel subscribe for certain units of
partnership interest in TRG upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the representations and warranties and
the covenants and agreements contained in this Agreement, the parties, intending
to be legally bound hereto, hereby agree as follows:
ARTICLE I
SUBSCRIPTION
1.1 Subscription for Units of Partnership Interest. Taubman Centers, Inc.,
a Michigan corporation ("TCI"), pursuant to a certain Continuing Offer, dated
November 30, 1992 (the "Continuing Offer"), has made available to certain
partners in TRG the ability to exchange Units of Partnership Interest in TRG for
shares of TCI's common stock ("TCI Stock"), which is currently traded on the New
York Stock Exchange. Terms used in this Section 1.1 and 1.3 that are not defined
herein and that are defined in the Continuing Offer have the meanings ascribed
to them in the Continuing Offer. PacTel hereby subscribes for, and TRG shall
issue to PacTel, 3,095.585 Units of Partnership Interest in TRG (the "TRG
Units"). The TRG Units shall be evidenced by a certificate (the "Certificate of
Units") and shall be economically equivalent to, and otherwise have all of the
rights and benefits of, the units of partnership interest of TRG that are issued
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<PAGE>
and outstanding prior to the issuance of the TRG Units. On the Closing Date,
PacTel shall be admitted as a limited partner in TRG. PacTel acknowledges and
agrees that at Closing PacTel must execute and deliver to TRG the Investment
Certificate (as defined in, and required pursuant to Section 3.2.2(a) of this
Agreement).
1.2 Subscription Price. PacTel hereby agrees to pay, by means of a federal
funds wire transfer on the Closing Date, the sum of $65,575,000 for the TRG
Units (the "Subscription Price").
1.3 Continuing Offer. [Omitted and being separately filed with the
Securities and Exchange Commission (SEC) with a request for confidential
treatment]. PacTel shall have no right to exchange the TRG Units pursuant to the
Continuing Offer until the first anniversary of the Closing Date, and PacTel
hereby agrees not to tender or otherwise attempt to exchange the TRG Units for
shares of TCI Stock under the Continuing Offer until such one (1) year
anniversary.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
2.1 Representations and Warranties of TRG. To induce PacTel to enter into
this Agreement, TRG hereby represents and warrants to PacTel as follows:
(a) [Omitted and being separately filed with the SEC with a request for
confidential treatment];
(b) TRG is a limited partnership duly organized, validly existing and in
good standing under the laws of the State of Delaware, and has made
all filings and recordings necessary to exist, operate and to do
business under all presently applicable statutes, laws, ordinances and
governmental rules and regulations ("Governmental Regulations") and
has the partnership power and authority to own, operate and lease its
properties, to carry on its business as currently conducted and to
execute and deliver this Agreement and any other documents and
instruments to be delivered by it pursuant to or in connection with
this Agreement, and to perform all of its obligations under this
Agreement and any other documents and instruments to be delivered by
TRG in connection with or pursuant hereto;
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<PAGE>
(c) The execution, delivery and performance by TRG of this Agreement and
all other documents and instruments required to be delivered by TRG
pursuant hereto or in connection herewith, the fulfillment of and the
compliance by TRG with the respective terms and provisions hereof and
thereof, and the due consummation by TRG of the transaction
contemplated hereby and thereby, have been duly and validly authorized
by all necessary partnership actions of TRG (none of which actions
have been modified or rescinded, and all of which actions are in full
force and effect), and do not: (a) require any consent or approval of
any partner, lender, creditor, investor or, to the best of TRG's
knowledge and except as set forth on Schedule 2.1(c), judicial or
administrative body, Authority (as defined herein) or other party
which has not already been obtained; or (b) conflict with, or result
in a breach of, or constitute a default under, any partnership
agreement, articles of incorporation, bylaws, shareholders agreement,
bond, note or other evidence of indebtedness, contract, indenture,
mortgage, deed of trust, loan, lease, or any other agreement or
instrument to which TRG is a party or by which TRG or any of TRG's
properties may be bound or affected or, to the best of TRG's
knowledge, any Governmental Regulation presently applicable to TRG;
(d) Except as set forth in Schedule 2.1(d), no authorization, consent,
order, approval or license of or filing with, or other act by or in
respect of any federal, state or local governmental body, board,
commission or agencies ("Authority") is or will be necessary to permit
the valid execution, delivery and performance by TRG of this Agreement
or any of the instruments or documents to be executed and delivered by
TRG pursuant to or in connection with this Agreement;
(e) This Agreement constitutes, and all other documents and instruments to
be delivered by TRG pursuant hereto or in connection herewith will
constitute, legal, valid and binding obligations of TRG, enforceable
against TRG in accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium, or similar laws relating to or affecting
generally the enforcement of creditors' rights and general principles
of equity;
(f) No attachments, execution proceedings, assignments for the benefit of
creditors, insolvency, bankruptcy or other similar legal proceedings
are pending or, to the best of TRG's knowledge, threatened against TRG
nor are any such proceedings contemplated by TRG. TRG has never been a
debtor under any case commenced under the United States Bankruptcy
Code;
(g) [Omitted and being separately filed with the SEC with a request for
confidential treatment];
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<PAGE>
(h) [Omitted and being separately filed with the SEC with a request for
confidential treatment];
(i) [Omitted and being separately filed with the SEC with a request for
confidential treatment];
(j) [Omitted and being separately filed with the SEC with a request for
confidential treatment];
(k) [Omitted and being separately filed with the SEC with a request for
confidential treatment];
(l) [Omitted and being separately filed with the SEC with a request for
confidential treatment];
(m) [Omitted and being separately filed with the SEC with a request for
confidential treatment]; and
(n) [Omitted and being separately filed with the SEC with a request for
confidential treatment].
2.2 Survival of TRG's Representations and Warranties. All representations
and warranties made by TRG in Section 2.1 and 6.14 of this Agreement shall not
merge into the instruments of conveyance to be delivered at the Closing and
shall survive the Closing until [omitted and being separately filed with the SEC
with a request for confidential treatment], at which time such representations
and warranties shall automatically expire, except as hereinafter specifically
set forth. If, prior to [omitted and being separately filed with the SEC with a
request for confidential treatment], PacTel alleges in writing to TRG that any
specific representation or warranty given by TRG was untrue when made or was
breached by TRG (which written allegation shall identify with reasonable
specificity the contested representation or warranty and the facts supporting
PacTel's allegation), then the contested representation and warranty shall
survive, solely with respect to the claims so alleged, until [omitted and being
separately filed with the SEC with a request for confidential treatment], at
which time it shall automatically expire, unless PacTel has filed a lawsuit with
respect thereto prior to [omitted and being separately filed with the SEC with a
request for confidential treatment] (and if such lawsuit is filed, the contested
representation and warranty, solely with respect to the claims alleged in such
lawsuit, shall survive until the lawsuit is resolved, at which time it shall
automatically expire).
4
<PAGE>
2.3 As-Is Issuance. Nothing in any of the documents or instruments to be
delivered by TRG or TCI at the Closing shall be deemed to expand or alter in any
manner the representations and warranties set forth in this Agreement. Except as
expressly set forth in this Agreement and in all certificates, documents and
instruments delivered pursuant to or in connection with this Agreement, no
representations, warranties or certifications regarding the subject matter of
this Agreement have been made or are made, and no responsibility regarding the
subject matter of this Agreement has been or is assumed, by TRG, TCI or by any
partner, officer, employee or equity owner in TRG, or TCI, as to any fact or
condition which has or might affect the TRG Units or any portion thereof. The
parties hereto agree that all undertakings and agreements heretofore made
between them or their respective agents or representatives with respect to the
subject matter hereof are merged in this Agreement and the Exhibits and
Schedules attached hereto and in all certificates, documents and instruments to
be delivered pursuant to or in connection with this Agreement, which alone fully
and completely express their agreement, and that this Agreement has been entered
into after full investigation, or with the parties satisfied with the
opportunity afforded for investigation of, TRG, TCI and the TRG Units and no
party is relying upon any statement or representation by any other party unless
such statement or representation is specifically embodied in this Agreement or
in the Exhibits or the Schedules attached hereto or in any certificates,
documents and instruments to be delivered pursuant to Section 3.2 hereof. The
terms and provisions of this Section 2.3 shall survive the Closing,
notwithstanding any provision of this Agreement to the contrary.
2.4 Representations and Warranties of PacTel. To induce TRG to enter into
this Agreement, PacTel hereby represents, warrants, and covenants to and with
TRG as follows:
5
<PAGE>
(a) [Omitted and being separately filed with the SEC with a request for
confidential treatment];
(b) PacTel is a trust duly created and validly existing under the laws of
the State of California, and has made all filings and recordings
necessary to exist, operate and to do business under all presently
applicable Governmental Regulations and has the trust power and
authority to own, operate and lease its properties, to carry on its
business as currently conducted and to execute and deliver this
Agreement and any other documents and instruments to be delivered by
it pursuant to this Agreement, and to perform all of its obligations
under this Agreement and any other documents and instruments to be
delivered by PacTel pursuant hereto;
(c) The execution, delivery and performance by PacTel of this Agreement
and all other documents and instruments required to be delivered by
PacTel pursuant hereto, the fulfillment of and the compliance by
PacTel with the respective terms and provisions hereof and thereof,
and the due consummation by PacTel of the transaction contemplated
hereby and thereby, have been duly and validly authorized by all
necessary actions of PacTel (none of which actions have been modified
or rescinded, and all of which actions are in full force and effect),
and do not: (a) require any consent or approval of any lender,
creditor, beneficiary or, to the best of PacTel's knowledge, judicial
or administrative body, Authority or other party which has not already
been obtained; or (b) conflict with, or result in a breach of, or
constitute a default under, any partnership agreement, articles of
incorporation, bylaws, shareholders agreement, bond, note or other
evidence of indebtedness, contract, indenture, mortgage, deed of
trust, loan, lease, or any other agreement or instrument to which
PacTel is a party or by which PacTel or any of PacTel's properties may
be bound or affected or, to the best of PacTel's knowledge, any
Governmental Regulation presently applicable to PacTel;
(d) No authorization, consent, order, approval or license of or filing
with, or other act by or in respect of any Authority is or will be
necessary to permit the valid execution, delivery and performance by
PacTel of this Agreement or any of the instruments or documents to be
executed and delivered by PacTel pursuant to this Agreement;
(e) This Agreement constitutes, and all other documents and instruments to
be delivered by PacTel pursuant hereto will constitute, legal, valid
and binding obligations of PacTel, enforceable against PacTel in
accordance with their respective terms, except as enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium, or
similar laws relating to or affecting generally the enforcement of
creditors' rights and general principles of equity; and
6
<PAGE>
(f) No attachments, execution proceedings, assignments for the benefit of
creditors, insolvency, bankruptcy or other similar legal proceedings
are pending or, to the best of PacTel's knowledge, threatened against
PacTel nor are any such proceedings contemplated by PacTel. PacTel has
never been a debtor under any case commenced under the United States
Bankruptcy Code.
2.5 Survival of PacTel's Representations and Warranties. All
representations and warranties made by PacTel in Sections 2.4 and 6.14 of this
Agreement shall not merge into the instruments of conveyance to be delivered at
the Closing and shall survive the Closing until [omitted and being separately
filed with the SEC with a request for confidential treatment], at which time
such representations and warranties shall automatically expire, except as
hereinafter specifically set forth. If, prior to [omitted and being separately
filed with the SEC with a request for confidential treatment], TRG alleges in
writing to PacTel that any specific representation or warranty given by PacTel
was untrue when made or was breached by PacTel (which written allegation shall
identify with reasonable specificity the contested representation or warranty
and the facts supporting TRG's allegation), then the contested representation
and warranty shall survive, solely with respect to the claims so alleged, until
[omitted and being separately filed with the SEC with a request for confidential
treatment], at which time it shall automatically expire, unless TRG has filed a
lawsuit with respect thereto prior to [omitted and being separately filed with
the SEC with a request for confidential treatment] (and if such lawsuit is
filed, the contested representation and warranty, solely with respect to the
claims alleged in such lawsuit, shall survive until the lawsuit is resolved, at
which time it shall automatically expire).
2.6 No Other Representations or Warranties by PacTel. Nothing in any of the
documents or instruments to be delivered by PacTel at the Closing shall be
deemed to expand or alter in any manner the representations and warranties set
forth in this Agreement. Except as expressly set forth in this Agreement and in
all certificates, documents and instruments delivered pursuant to or in
connection with this Agreement, no representations, warranties or certifications
regarding the subject matter of this Agreement have been made or are made, and
7
<PAGE>
no responsibility regarding the subject matter of this Agreement has been or is
assumed, by PacTel or by any partner, officer, or employee as to any fact or
condition. The parties hereto agree that all undertakings and agreements
heretofore made between them or their respective agents or representatives with
respect to the subject matter hereof are merged in this Agreement and the
Exhibits and Schedules attached hereto and in all certificates, documents and
instruments to be delivered pursuant to or in connection with this Agreement,
which alone fully and completely express their agreement and no party is relying
upon any statement or representation by any other party unless such statement or
representation is specifically embodied in this Agreement or in the Exhibits or
the Schedules attached hereto or in any certificates, documents and instruments
to be delivered pursuant to Section 3.2 hereof. The terms and provisions of this
Section 2.6 shall survive the Closing, notwithstanding any provision of this
Agreement to the contrary.
2.7 Knowledge TRG shall not have any liability for, nor shall it be deemed
to have breached, any representation or warranty set forth in this Agreement to
the extent that prior to the Closing Date, PacTel had actual knowledge that all
or any part of such representation or warranty made by TRG was not true on the
Closing Date, but only to the extent of those portions of such representation
and warranty that were known by PacTel to be untrue. PacTel shall not have any
liability for, nor shall PacTel be deemed to have breached, any representation
or warranty set forth in this Agreement to the extent that prior to the Closing
Date, TRG had actual knowledge that all or any part of such representation or
warranty made by PacTel was not true on the Closing Date, but only to the extent
of those portions of such representation and warranty that were known by TRG to
be untrue.
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ARTICLE III
CLOSING
3.1 Closing. The consummation of the transactions contemplated by this
Agreement (the "Closing") shall occur at the office of Miro Weiner & Kramer,
Suite 100, 500 North Woodward Avenue, Bloomfield Hills, Michigan 48304. The
Closing shall occur on July 18, 1996, (the "Closing Date").
3.2 Closing Documents.
3.2.1 TRG's Deliveries. At the Closing, TRG shall deliver to PacTel:
(a) The Certificate of Units evidencing the issuance of the TRG Units to
PacTel in the condition required hereunder.
(b) A copy of the Continuing Offer, certified by TCI as being true,
correct and complete.
(c) A copy of the TRG Partnership Agreement, certified by TRG as being
true, correct, and complete.
(d) A Confirmation of Transfer Determination (the "Confirmation of
Transfer Determination"), executed by TCI, confirming that a "Transfer
Determination" pursuant to the TRG Partnership Agreement authorizing
the issuance of the TRG Units has been made.
(e) The TCI Designation and the TCI Representation Letter duly executed by
TCI.
(f) An opinion of Miro Weiner & Kramer, legal counsel for TRG and TCI, in
form and substance reasonably satisfactory to PacTel, as to (i) due
authorization, execution and delivery of this Agreement, and the
documents described in this Section 3.2.1, by TRG or by TCI, as
applicable and (ii) such other matters as may be reasonably required
by PacTel.
3.2.2 PacTel's Deliveries. At the Closing, PacTel shall deliver to TRG:
(a) An investment certificate in the form of Exhibit C, attached hereto
and made a part hereof (the "Investment Certificate"), duly executed
by PacTel (i) certifying to TRG that (a) the TRG Units are being
acquired by PacTel as an investment for PacTel and not with a view to
the resale or distribution of the TRG Units and (b) PacTel is an
"accredited investor" as defined in Regulation D under the Securities
Act, and (ii) acknowledging and agreeing that in addition to the
restrictions on
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transfers contained in the TRG Partnership Agreement, the TRG Units
may not be resold, pledged or otherwise transferred unless such
transfer is registered under the Securities Act and qualifies under
applicable state "Blue Sky" laws and regulations or unless such
transfer is exempt from such registration and qualification.
(b) The opinion of Sheppard Mullin Richter & Hampton, legal counsel for
PacTel, in form and substance reasonably satisfactory to TRG, as to
(i) the due authorization, execution and delivery of this Agreement,
and the documents described in this Section 3.2.2, by PacTel and (ii)
such other matters as may be reasonably required by TRG or TCI.
ARTICLE IV
INDEMNIFICATION
4.1 TRG's Indemnification of PacTel. [Omitted and being separately filed
with the SEC with a request for confidential treatment].
4.2 PacTel's Indemnification of TRG. [Omitted and being separately filed
with the SEC with a request for confidential treatment]. 4.3 Procedure for
Indemnification. If a party (the "Obligated Party") is required to indemnify the
other party (the "Indemnified Party") under the terms of this Agreement with
respect to a third-party claim, then this Section 4.3 shall govern the procedure
with respect to such indemnification. Upon receipt by the Indemnified Party of
notice of any claim or matter for which it is entitled to seek indemnification
from the Obligated Party under the terms hereof (the "Claim"), the Indemnified
Party shall promptly notify the Obligated Party of the Claim, but the failure to
notify the Obligated Party will not relieve the Obligated Party of any liability
that it may have to any Indemnified Party, except to the extent that the
Obligated Party is prejudiced by the Indemnifying Party's failure to give such
notice. The Obligated Party shall contest and defend against the Claim;
provided, however, that the Obligated Party shall not commit, suffer, or permit
any act or omission which would cause the Indemnified Party to incur, or expose
the Indemnified Party to the incurrence of, any civil fines or criminal
penalties. The Obligated Party shall keep the Indemnified Party informed of the
progress of the defense
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against the Claim which shall be diligently pursued. If the Obligated Party
assumes the defense of any Claim, no compromise or settlement of such Claim may
be effected by the Obligated Party without the Indemnified Party's consent
unless (A) there is no finding or admission of any violation by the Indemnified
Party of any applicable laws, rules, regulations or other legal requirements or
any violation by the Indemnified Party of the rights of any person or entity and
no effect on other claims that may be made against the Indemnified Party, and
(B) the sole relief provided is monetary damages that are paid in full by the
Obligated Party. If a final adjudication (i.e., an adjudication with respect to
which the time for taking all appeals as of right has lapsed or with respect to
which no further appeal is legally available) of such Claim is rendered against
the Indemnified Party, by a court of competent jurisdiction, the Obligated Party
shall, within thirty (30) days after such adjudication becomes final, pay and
satisfy such Claim. The Obligated Party shall notify the Indemnified Party in
writing within ten (10) business days after an adjudication is rendered as to
whether the Obligated Party will appeal the adjudication. If the Obligated Party
notifies the Indemnified Party that it will not appeal an adjudication, then the
Indemnified Party may undertake such appeal, at its sole cost and expense, in
which case the Indemnified Party shall notify the Obligated Party at least ten
(10) business days prior to the last date on which the Obligated Party is
required to pay and satisfy the Claim pursuant to this Section 4.3 and the
Obligated Party shall within twenty (20) business days after such notification
deposit into escrow, with a national financial institution or title company
reasonably acceptable to the Indemnified Party and the Obligated Party, the
amount necessary to pay and satisfy the Claim. Upon depositing such amount, the
Obligated Party shall be released from any further obligation hereunder to pay,
satisfy and contest the Claim. The escrowed amount shall be disbursed and
applied as follows: first, to the Indemnified Party, at any time upon demand by
the Indemnified Party, to be used to pay and satisfy such Claim; second, to the
Indemnified Party for the payment or reimbursement of the
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reasonable costs and expenses incurred by the Indemnified Party in prosecuting
such appeal; and third, any excess to the Obligated Party. If the Obligated
Party fails to contest and defend against, or to pay and satisfy the Claim
within such thirty (30) days, then the Indemnified Party may, at its option,
contest and defend against and/or pay and satisfy the Claim, in which case the
Obligated Party shall immediately reimburse the Indemnified Party for all costs
and expenses (such as, but not limited to, actual attorneys' fees and
disbursements) incurred by the Indemnified Party in contesting and defending
against and/or paying and satisfying the Claim and enforcing the
indemnification, together with interest on such costs and expenses from the time
incurred until the time paid at the lower of (i) three percent (3%) in excess of
the prime rate announced by Chemical Bank, from time to time, or (ii) the
highest rate permitted by law. Each party agrees to cooperate with the
reasonable requests of the other party in contesting, defending, paying,
satisfying or appealing an adjudication rendered with respect to any Claim. If,
as a result of an appeal, insurance recovery or otherwise, the Indemnified Party
recovers from a third party any amounts with respect to which the Obligated
Party made payments to or for the account of the Indemnified Party under this
Article IV, the Indemnified Party shall promptly pay over to the Obligated Party
any amounts so recovered.
A claim for indemnification for any matter not involving a third party
claim may be asserted by notice to the party from whom indemnification is
sought.
4.4 Survival. (a) [Omitted and being separately filed with the SEC with a
request for confidential treatment].
(b) [Omitted and being separately filed with the SEC with
a request for confidential treatment].
4.5 Limitation on TRG's Liability for Indemnity and Representations and
Warranties. [Omitted and being separately filed with the SEC with a request for
confidential treatment].
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4.6 Limitation on PacTel's Liability for Indemnity and Representations and
Warranties. [Omitted and being separately filed with the SEC with a request for
confidential treatment].
ARTICLE V
PRORATIONS AND ADJUSTMENTS
[Omitted and being separately filed with the SEC with a request for
confidential treatment].
ARTICLE VI
MISCELLANEOUS
6.1 Public Disclosure. Neither PacTel nor TRG, each of whom is extremely
sensitive to public announcements, will make any public announcement or other
disclosure of the transaction described herein or the terms thereof without the
consent of the other party, except as may be required by such party to comply
with applicable securities and other laws, rules and regulations, including the
rules and requirements of the New York Stock Exchange. If either party
determines that it is required by such laws, rules or requirements to make any
public announcement or public disclosure prior to the Closing Date, the
disclosing party, prior to such disclosure or announcement, shall notify the
other party and shall deliver to the other party an opinion of its counsel that
such disclosure is required by such laws, rules or requirements.
6.2 Notices. All notices required, contemplated or sent under this
Agreement shall be delivered (a) personally, (b) by confirmed facsimile
transmission, (c) by next day courier service (e.g., Federal Express), or (d) by
certified or registered mail, return receipt requested, addressed as follows:
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If to TRG, to:
200 East Long Lake Road
Suite 300
Bloomfield Hills, Michigan 48304
Attention: Robert S. Taubman
Telecopy: (810) 258-7601
With a required copy to:
Miro Weiner & Kramer
Suite 100
500 North Woodward Avenue
Bloomfield Hills, Michigan 48304
Attention: Jeffrey H. Miro, Esq.
Telecopy: (810) 646-2681
If to PacTel to:
Pacific Telesis Group
130 Kearny Street
Suite 3401
San Francisco, California 94108
Attention: Frederick J. McIntosh
Telecopy: (415) 391-9148
and to:
The Yarmouth Group, Inc.
One Embarcadero Center
Suite 2101
San Francisco, California 94111
Attention: Andrew Friedman
Telecopy: (415) 392-3317
With a required copy to:
Sheppard, Mullin, Richter & Hampton, LLP
Four Embarcadero Center
17th Floor
San Francisco, California 94111
Attention: Joan H. Story, Esq.
Telecopy: (415) 434-3947
All notices under this Agreement shall be deemed to have been properly given or
served, (a) if delivered by hand or mailed, on the date of receipt or date of
refusal to accept shown on the delivery receipt or return receipt, (b) if
delivered by Federal Express or similar expedited overnight commercial carrier
or courier, on the date that is one (1) business day after the date upon which
the same shall have been delivered to Federal Express or similar expedited
overnight commercial carrier, addressed to the recipient, with all shipping
charges prepaid,
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provided that the same is actually received (or refused) by the recipient in the
ordinary course, and (c) if sent by telecopier, on the date of confirmed
delivery.
6.3 Legal Fees and Other Costs. (a) TRG shall not be responsible, directly
or indirectly, for any of PacTel's legal fees and any other costs incurred by it
incident to the preparation, negotiation or execution of this Agreement or any
other documents required pursuant hereto whether or not any of the transactions
contemplated hereunder is consummated.
(b) PacTel shall not be responsible, directly or indirectly, for any
of TRG's or TCI's legal fees and any other costs incurred incident to the
preparation, negotiation or execution of this Agreement or any other documents
required pursuant hereto whether or not any of the transactions contemplated
hereunder is consummated.
6.4 Successors and Assigns. This Agreement shall be binding upon, and shall
inure to the benefit of, the parties hereto, and TRG's successors and assigns
and PacTel's permitted successors and assigns who hold the TRG Units.
6.5 Governing Law. This Agreement shall be governed by, and shall be
interpreted and construed in accordance with, the laws of the State of Michigan
without regard to choice of law principles.
6.6 Captions. The captions used throughout this Agreement are for
convenience only and shall not be used in the interpretation or construction of
this Agreement.
6.7 References; Gender. Unless the context otherwise requires, references
in this Agreement to Sections shall be deemed to refer to Sections of this
Agreement. Throughout this Agreement, the use of masculine pronouns shall be
deemed to include feminine and neuter pronouns as the context may require.
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6.8 Entire Agreement; Amendment. This Agreement and the documents and
instruments executed pursuant hereto or in connection herewith (including,
without limitation, that certain Confidentiality Agreement dated July 15, 1996,
between PacTel and TRG) contain the entire agreement between the parties hereto
with respect to the transaction contemplated herein, supersedes all prior
written agreements and negotiations and oral understandings, if any, and may not
be amended, supplemented, or discharged except by performance or by an
instrument in writing signed by all of the parties hereto.
6.9 Severability. Wherever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by, or shall be
invalid under, applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
6.10 Time is of the Essence. Time is of the essence with respect to this
Agreement.
6.11 Additional Actions and Documents. To the extent not inconsistent with
the express terms of this Agreement, each of the parties hereto hereby covenants
to take or cause to be taken such further actions, to execute, deliver, and file
or cause to be executed, delivered, and filed such further documents and
instruments, and to obtain such consents, as may be necessary or as may be
reasonably requested in order to effectuate fully the purposes, terms, and
conditions of this Agreement, whether before, at, or after the Closing.
6.12 Waiver; Modification. Failure by any party hereto to insist upon or
enforce any of its rights shall not constitute a waiver thereof, and nothing
shall constitute a waiver of a party's right to insist upon strict compliance
with the provisions hereof. Any party hereto may waive the benefit of any
provision or condition for its benefit contained in this Agreement. No oral
modification hereof shall be binding upon the parties, and any modification
shall be in writing and signed by the parties.
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6.13 Cumulative Remedies. Each and every one of the rights, benefits and
remedies provided to PacTel by this Agreement, or any instruments or documents
executed pursuant to this Agreement, are cumulative, and shall not be exclusive
of any other rights, remedies and benefits allowed by law or equity to PacTel.
Each and every of the rights, benefits and remedies provided to TRG by this
Agreement, or any instruments or documents executed pursuant to this Agreement,
are cumulative, and shall not be exclusive of any other rights, remedies and
benefits allowed by law or equity to TRG.
6.14 Commission. PacTel represents and warrants to TRG, and TRG represents
and warrants to PacTel, that no broker or agent has been engaged by such party
in connection with the negotiation and/or consummation of this Agreement. Each
of the parties hereto agrees to defend and indemnify the other party against any
claims against the other party for any brokerage fees, finders' fees or
commissions with respect to the transaction contemplated by this Agreement which
are asserted by any person purporting to act or to have acted for or on behalf
of the indemnifying party, and to pay the other party's reasonable attorneys'
fees and disbursements in connection therewith.
6.15 Counterparts. To facilitate execution, this Agreement may be executed
in as many counterparts as may be required; and it shall not be necessary that
the signature of, or on behalf of each party, or that the signatures of all
persons required to bind any party, appear on each counterpart, but it shall be
sufficient that the signature of or on behalf of each party, or the signatures
of the persons required to bind any party, appear on one or more of such
counterparts. All counterparts shall collectively constitute a single agreement.
6.16 Exhibits and Schedules. The Exhibits and Schedules enumerated herein
are attached hereto and incorporated herein by this reference. The Exhibits and
Schedules are hereby made a part of this Agreement as fully as if set forth in
the text hereof.
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IN WITNESS WHEREOF, the parties have entered into this Agreement on the
date first above written.
BOSTON SAFE DEPOSIT AND TRUST COMPANY,
AS TRUSTEE OF THE PACIFIC TELESIS GROUP
MASTER PENSION TRUST
By: The Yarmouth Group, Inc., its
authorized agent
By: /s/ Andrew Friedman
-------------------------
Andrew Friedman
Its: Senior Vice President
"PacTel"
THE TAUBMAN REALTY GROUP LIMITED
PARTNERSHIP, a Delaware limited
partnership
By: /s/ Cordell A. Lietz
--------------------------
Cordell A. Lietz
Its: Authorized Signatory
"TRG"
