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 separately filed with
the Securities and Exchange Commission with a request for confidential
treatment.
TABLE OF CONTENTS
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PAGE
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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....................................19
6.4 Successors and Assigns........................................21
(i)
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
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A - TCI Designation
B - TCI Representation Letter
C - Investment Certificate
SCHEDULES
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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)
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 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. PacTel's obligations to close the transaction
contemplated under this Agreement are conditioned upon (a) TCI irrevocably
designating PacTel as a Designated Offeree under the Continuing Offer pursuant
to the designation attached hereto as Exhibit A (the "TCI Designation"), and (b)
TCI issuing to PacTel the representation letter (the "TCI Representation
Letter") attached hereto as Exhibit B. TRG shall use its best efforts to cause
TCI to file with the Securities and Exchange Commission (the "SEC") a
registration statement on Form S-3 (or any successor form or other form then
available to TCI) under the Securities Act of 1933, as amended (the "Securities
Act"), that, when declared effective under the Securities Act, will register for
resale under the Securities Act shares of TCI Stock that PacTel would have the
right to acquire upon acceptance of the Continuing Offer with respect to their
TRG Units. TRG shall use its best efforts to cause TCI to have the foregoing
registration statement filed with the SEC no later than the 305th day following
the Closing, declared effective by the SEC as soon as practicable after the
first anniversary of the Closing and to remain effective for so long as PacTel
(or any assignee of PacTel who is an Eligible Holder at the time of assignment,
provided that PacTel notifies TCI of such assignment and such assignee
cooperates in effecting any required amendment of such registration statement)
owns any TRG Units or shares of TCI Stock. PacTel will take all steps reasonably
requested by TRG or TCI to enable such registration statement to be declared
effective and, thereafter, to enable TCI to satisfy any undertakings included
therein. TRG shall also use its reasonable efforts to cause TCI to comply with
its obligations regarding "Blue Sky" registration set forth
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in Section 2.9 of the TCI Representation Letter. If following the 365th day
after the date of this Agreement PacTel accepts the Continuing Offer and
receives shares of TCI Stock the resale of which has never been registered under
the Securities Act, TRG will be liable for and pay immediately on demand to
PacTel the difference between (i) the * of the TCI Stock on the New York Stock
Exchange on the date that PacTel accepts the Continuing Offer and receives TCI
Stock for which the resale was never registered under the Securities Act, and
(ii) (x) the * of the TCI Stock on the New York Stock Exchange on the first
trading day after the resale registration statement for such TCI Stock has been
declared effective, or (y) the * if the resale registration statement for such
TCI Stock is not then declared effective, together with all costs and expenses
(such as, but not limited to, reasonable attorneys' and accountants' fees and
disbursements) incurred by PacTel in enforcing this provision and interest on
such difference at the rate of * per annum from the date that PacTel accepts the
Continuing Offer until and including the date such registration statement is
declared effective or such private resale is effectuated as the case may be.
PacTel agrees that, if following the 365th day after the date of this Agreement
a resale registration statement is not declared effective and it desires to
effectuate a resale of TCI Stock in a private transaction exempt from
registration under the Securities Act, it shall first offer the TCI Stock to TRG
in writing, which shall have * to accept such offer or it shall be deemed
rejected, and thereafter PacTel shall be free to sell the TCI Stock to a third
party at a price not less than that offered to TRG. PacTel acknowledges and
agrees that: (a) upon acceptance of the Continuing Offer with respect to any of
the TRG Units, PacTel may not resell any shares of TCI Stock issued in exchange
for such TRG Units except pursuant to an exempt transaction under the Securities
Act and applicable regulations or until TCI has caused to become effective the
registration statement described above enabling PacTel to publicly resell the
TCI Stock in accordance with
* Text omitted and separately filed with the Securities and Exchange Commission.
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the Securities Act; (b) PacTel's ability to accept the Continuing Offer will be
subject to all of the terms, conditions and limitations set forth therein,
including, without limitation, the Ownership Limit; and (c) notwithstanding any
provision to the contrary contained in the Continuing Offer, but without
limiting TCI's obligations under the TCI Representation Letter, TCI will have no
obligation to deliver shares of TCI Stock to PacTel the issuance of which by TCI
has been registered under the Securities Act. 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) PacTel shall have the right to transfer title to the TRG Units,
without any obligation to obtain any further consents or
approvals of TRG or its partners, to any successor trustee of
PacTel, so long as PacTel remains the sole beneficial owner of
the TRG Units;
(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;
(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
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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) TRG has not received any written notices from any Authority that
TRG currently is in violation of any presently applicable
Governmental Regulations, except to the extent that any such
violation will not have a materially adverse effect on TRG;
(h) TRG has furnished to PacTel a true, correct and complete copy of
the Amended and Restated Agreement of Limited Partnership of The
Taubman Realty Group Limited Partnership, dated November 30,
1992, in effect on the date hereof, which has not been amended
except for (i) the Acknowledgment of Issuance of Units of
Partnership Interest and Admission of Limited Partners, dated
December 21, 1994, and (ii) amendments that have been approved
but not yet prepared or executed
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solely to reflect the allocation of the Unallocated Interests,
changes in the constituency of TRG, the issuance of Units of
Partnership Interest in connection with TRG's acquisition of
Biltmore Fashion Park and changes in the percentage interests of
the partners in TRG, all as set forth on Schedule 2.1(h) (as so
amended, the "TRG Partnership Agreement"). To the best of TRG's
knowledge, there are no uncured defaults or breaches by any
partner under the TRG Partnership Agreement. TRG is classified as
a partnership for federal income tax purposes. As of the Closing
Date, and immediately before the issuance of TRG Units to PacTel,
there are 63,521.461 Units of Partnership Interest in TRG
outstanding and incentive options which have been or may be
granted for up to an additional 4,500 Units of Partnership
Interest in the aggregate;
(i) True and complete copies of (a) the audited consolidated
financial statements of TRG as of December 31, 1993, 1994 and
1995 and for each of the years ended December 31, 1993, 1994 and
1995, together with all related notes and schedules thereto,
accompanied by the reports thereon of Deloitte & Touche, TRG's
independent auditors, as included in the 1994 and 1995 Annual
Reports and/or 1994 and 1995 Form 10- K's for TCI, and (b) the
unaudited consolidated financial statements of TRG as included in
TCI's Form 10-Q as of March 31, 1996 and for the three (3) months
then ended, together with all related notes and schedules
thereto, if any (collectively, "TRG's Financial Statements"),
have been delivered to PacTel. TRG's Financial Statements were
prepared in accordance with the books of account and other
financial records of TRG, present fairly the consolidated
financial condition and results of operations of TRG as of the
dates thereof or for the periods covered thereby, and have been
prepared in accordance with generally accepted accounting
principles consistently applied. There are no material
liabilities of TRG other than liabilities reflected or reserved
for on the consolidated balance sheet of TRG as of March 31, 1996
and other than the approximate $37,000,000 of additional debt
incurred in connection with the acquisition of the Paseo Nuevo
Shopping Center;
(j) Since March 31, 1996, the business of TRG has been conducted in
all material respects in the ordinary course and consistent with
past practice. As amplification and without limiting the
generality of the foregoing, since March 31, 1996, TRG has not,
except in the ordinary course of business consistent with past
practice, (a) written down or written up (or failed to write down
or write up in accordance with U.S. GAAP) the value of any
material assets or revalued any assets of TRG; (b) made any
material change in any method of accounting or accounting
practice or policy used by TRG; or (c) made any material loan to,
guaranteed any indebtedness of or otherwise incurred any
indebtedness on behalf of any partner of TRG. Since March 31,
1996, there has been no event or occurrence that would, or is
reasonably likely to, result in a material adverse change in the
business, financial condition or results of operations of TRG;
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(k) TRG has filed all reports, registration statements and all
amendments thereto required to be made thereto that TRG was
required by law or regulation to file with the SEC. TRG has
furnished to PacTel true, complete and correct copies of TRG's
Prospectus, dated April 25, 1995 (the "Prospectus") and TRG's
Quarterly Reports on Form 10-Q for the quarter ended March 31,
1996, Current Reports on Form 8-K, dated December 9, 1994,
January 4, 1995, March 2, 1995, May 22, 1995, December 13, 1995,
May 15, 1996 and June 27, 1996, and all other documents filed
under the Exchange Act since March 31, 1996 (collectively, "TRG's
1934 Act Filings"). As of their respective dates, TRG's
Prospectus and TRG's 1934 Act Filings complied in all material
respects with all applicable rules and regulations of SEC. Except
as modified by the statements made in TRG's 1934 Act Filings and
any press releases issued by TCI or TRG since March 31, 1996, and
listed on Schedule 2.1(k) hereto, the statements made in the
Prospectus are in all material respects true, complete and
correct as if made on the date hereof. Neither the Prospectus nor
TRG's 1934 Act Filings, as of the respective dates thereof,
contained any untrue statement of material fact or omitted to
state any material fact necessary to make the statements
contained therein not misleading;
(l) There are no restrictions on the transfer of the TRG Units other
than those contained in the TRG Partnership Agreement, arising
from federal and applicable state securities laws, and those
imposed under the Amended and Restated Partnership Agreement of
Woodfield Associates, dated March 31, 1989, as amended. All of
the outstanding Units of Partnership Interest in TRG were duly
authorized and validly issued in accordance with the terms of the
Partnership Agreement and in compliance with applicable laws. At
the Closing: (a) the Units of Partnership Interest issued by TRG
to PacTel will be duly authorized and validly issued in
accordance with all of the conditions set forth in the
Partnership Agreement including, without limitation, the
conditions set forth in Sections 3.4 and 8.4 thereof; and (b)
PacTel will be admitted as a limited partner of TRG entitled to
all of the rights and privileges of a limited partner under the
Partnership Agreement. Except as set forth in TRG's 1934 Act
Filings or the Prospectus (including documents incorporated by
reference into the Prospectus), there are no outstanding
subscriptions, options, warrants, preemptive or other rights or
other arrangements or commitments obligating TRG to issue any
Units of Partnership Interest;
(m) TRG is a "real estate operating company" within the meaning of
regulations promulgated by the Department of Labor, and published
at 29 C.F.R. Section 2510.3-101 for purposes of the plan asset
and prohibited transaction rules of the Employee Retirement
Income Security Act of 1974, as amended, and Section 4975 of the
Internal Revenue Code of 1986, as amended (the "Code"); and
(n) Any TCI Stock acquired by PacTel in exchange for Units pursuant
to the Continuing Offer will be "publicly-offered securities" as
such term is
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defined by Department of Labor Regulations published at 29 C.F.R.
Section 2510.3-101 for purposes of the plan asset and prohibited
transaction rules of the Employee Retirement Income Security Act
of 1974, as amended, and Section 4975 of the Code.
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 the second (2nd) anniversary of the Closing
Date, at which time such representations and warranties shall automatically
expire, except as hereinafter specifically set forth. If, prior to the second
(2nd) anniversary of the Closing Date, 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 the third (3rd)
anniversary of the Closing Date, at which time it shall automatically expire,
unless PacTel has filed a lawsuit with respect thereto prior to the third (3rd)
anniversary of the Closing Date (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 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
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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:
(a) Except as specifically provided in Schedule 2.4(a), attached
hereto and made a part hereof, and to the best of PacTel's
actual knowledge, PacTel did not own, as of July 15, 1996,
any of the stock of any corporation that is a tenant of any
rental property owned directly or indirectly by TRG and that
is set forth on the list of tenants provided by TRG to
PacTel titled "TRG Tenant Ownership Information Calendar
1995" or any interest in the assets or net profits of any
such tenant of any rental property owned directly or
indirectly by TRG;
(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;
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(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
(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 the second (2nd) anniversary of
the Closing Date, at which time such representations and warranties shall
automatically expire, except as hereinafter specifically set forth. If, prior to
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the second (2nd) anniversary of the Closing Date, 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 the
third (3rd) anniversary of the Closing Date, at which time it shall
automatically expire, unless TRG has filed a lawsuit with respect thereto prior
to the third (3rd) anniversary of the Closing Date (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
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
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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.
ARTICLE III
CLOSING
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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.
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(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 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. TRG hereby agrees to indemnify,
defend, and hold harmless PacTel and its officers, directors, employees,
fiduciaries, trustees, representatives, affiliates, successors and assigns (the
"PacTel Indemnitees") from and against all demands, claims, actions, causes of
action, assessments, losses, damages, liabilities, costs, and expenses,
including, without limitation, interest, penalties and reasonable
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attorneys' fees and disbursements, asserted against, resulting to, imposed upon,
or incurred by a PacTel Indemnitee by reason of or resulting from (a) any
misrepresentation or breach of any of TRG's representations or warranties
contained in Sections 2.1 or 6.14 of this Agreement or in any document or
instrument delivered by TRG to PacTel at or in connection with the Closing; and
(b) any breach by TRG of, or a default by TRG under, any of the provisions of
this Agreement or any other document or instrument delivered to PacTel by TRG at
or in connection with the Closing.
4.2 PacTel's Indemnification of TRG. PacTel hereby agrees to indemnify,
defend, and hold harmless TRG and its officers, directors, employees,
representatives, affiliates, successors and assigns (the "TRG Indemnitees") from
and against all demands, claims, actions, causes of action, assessments, losses,
damages, liabilities, costs, and expenses, including, without limitation,
interest, penalties and reasonable attorneys' fees and disbursements, asserted
against, resulting to, imposed upon, or incurred by a TRG Indemnitee by reason
of or resulting from (a) any misrepresentation or breach of any of PacTel's
representations or warranties contained in Sections 2.4 or 6.14 of this
Agreement or in any document or instrument delivered by PacTel to TRG at or in
connection with the Closing; and (b) any breach by PacTel of, or a default by
PacTel under, any of the provisions of this Agreement or any other document or
instrument delivered to TRG by PacTel at or in connection with the Closing.
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
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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 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
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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 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.
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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) The indemnities and obligations under clause (a) of
Section 4.1 and clause (a) of Section 4.2 with respect to any misrepresentation
or breach of representation or warranty shall survive the Closing until the
second (2nd) anniversary of the Closing Date. Such indemnities and obligations
shall automatically expire on the second (2nd) anniversary of the Closing Date,
unless a party has made a claim in writing with respect thereto prior to the
second (2nd) anniversary of the Closing Date, in which case such indemnities and
obligations shall survive, solely with respect to such claim, until the third
(3rd) anniversary of the Closing Date, at which time such indemnities and
obligations shall automatically expire, unless a party has filed a lawsuit or,
in the case of a third-party claim, given notice to the Obligated Party pursuant
to Section 4.3 with respect thereto prior to the third (3rd) anniversary of the
Closing Date (and if such lawsuit is filed or notice given, such indemnities and
obligations, solely with respect to such claim in such lawsuit or notice, shall
survive until the lawsuit or claim is resolved, at which time such indemnities
and obligations shall automatically expire).
(b) The indemnities and obligations set forth in clause (b) of
Section 4.1 and clause (b) of Section 4.2 shall survive the Closing for a period
of five (5) years following the Closing Date. Such indemnities and obligations
shall automatically expire at the end of such five (5) year period unless a
party has made a claim in writing with respect thereto prior to the expiration
of such five (5) year period, in which case such indemnities and obligations
shall survive, solely with respect to such claim, for an additional one (1) year
period after such five (5) year period, at which time such indemnities and
obligations shall automatically expire, unless a party has filed a lawsuit or,
in the case of a third-party claim, given notice to the Obligated Party pursuant
to Section 4.3 with respect thereto prior to the end of such
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additional one (1) year period (and if such lawsuit is filed or notice given,
such indemnities and obligations, solely with respect to such claim in such
lawsuit or notice, shall survive until the lawsuit or claim is resolved, at
which time such indemnities and obligations shall automatically expire).
Notwithstanding the foregoing, the obligations of TRG set forth in Section 1.3
and TRG's indemnities with respect thereto shall survive for so long as PacTel
(or any assignee of PacTel who is an Eligible Holder at the time of assignment,
provided that PacTel notifies TCI of such assignment and such assignee
cooperates in effecting any required amendment of such registration statement)
owns any TRG Units or shares of TCI Stock.
4.5 Limitation on TRG's Liability for Indemnity and Representations and
Warranties. Notwithstanding anything contained herein to the contrary, TRG's
total liability to PacTel for any indemnity obligation of TRG under Section 4.1
above and for any breach by TRG of any of the agreements, covenants,
representations and warranties made by TRG hereunder shall be limited to the
aggregate sum of * Dollars ($ * ); provided, however, that such liability shall
not be limited with respect to any breach by TRG of its agreements, covenants,
representations and warranties set forth in Section * and Section * above or in
* Section * above. In addition, TRG shall have no liability to PacTel hereunder
unless and until PacTel's damages and claims for indemnities against TRG exceeds
the total sum of * Dollars ($ * ) in the aggregate; provided, however, that the
provisions of this sentence shall not apply to the breach of any of TRG's
obligations set forth in Sections * or * above.
4.6 Limitation on PacTel's Liability for Indemnity and Representations and
Warranties. Notwithstanding anything contained herein to the contrary, PacTel's
total liability to TRG for any indemnity obligation of PacTel under Section 4.2
above and for any breach by PacTel of any of the agreements, covenants,
representations and warranties made by PacTel hereunder shall be limited to the
aggregate sum of * Dollars ($ * ); provided, however, that
* Text omitted and separately filed with the Securities and Exchange Commission.
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such liability shall not be limited with respect to any breach by PacTel of its
representations and warranties set forth in paragraphs * of Section 2.4 above.
In addition, PacTel shall have no liability to TRG hereunder unless and until
TRG's damages and claims for indemnities exceeds the total sum of * Dollars
($ *).
ARTICLE V
PRORATIONS AND ADJUSTMENTS
--------------------------
TRG currently makes its distributions to its partners as of the 15th of
each calendar month. If the Closing Date occurs on the 15th of a month, PacTel
shall not be deemed to own the TRG Units on such date and therefore shall not be
entitled to the TRG distribution made on such date. No closing adjustments or
prorations shall be made with respect to the TRG Units or distributions
receivable with respect thereto.
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
* Text omitted and separately filed with the Securities and Exchange Commission.
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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
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
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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.
(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.
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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 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.
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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.
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,
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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.
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"
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