PRIVATE PLACEMENT PURCHASE AGREEMENT
Xxxxxxx Xxxxx 0000 Xxxxxxxx Xxxxx Fund, L.P.
c/o Goldman, Sachs & Co.
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx X. Xxxxxx
Ladies and Gentlemen:
1. Certain Representations; Opinions of Counsel
(a) The Taubman Realty Group Limited Partnership (the "Company") and
Taubman Centers, Inc., the managing general partner of the Company
("TCO"), represent and warrant to the undersigned ("Subscriber") as
follows:
(i) TCO has made with the Securities Exchange Commission ("SEC") all
filings required to be made by it (the "SEC Reports"). Since
September 30, 1998, the Company has not been, and is not,
required to file any reports with the SEC. The SEC Reports were
prepared and filed in compliance with the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), or the Securities Act
of 1933, as amended (the "Securities Act"), as applicable, and
the rules and regulations promulgated by the SEC thereunder, and
did not, as of their respective dates, contain any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements contained therein, in
light of the circumstances under which they were made, not
misleading. The financial statements and the interim financial
statements of TCO included in the SEC Reports were prepared in
accordance with generally accepted accounting principles (except
as may be indicated in the notes thereto) and fairly presented
the financial condition and results of operations of TCO and its
subsidiaries as at the dates thereof and for the periods then
ended, subject, in the case of the interim financial statements,
to normal year-end adjustments and any other adjustments
described therein.
(ii) there has been no material adverse change in or affecting the
business, assets or financial condition of the Company since the
most recent such filing;
(iii)the Company and TCO have all requisite corporate and limited
partnership authority and power to execute and deliver this
Private Placement Purchase Agreement, the Registration Rights
Agreement (as hereinafter defined) the Certificate with Respect
to Tax Matters of even date herewith executed and delivered by
the Company, the Second Amendment to The Second Amendment and
Restatement of Agreement of Limited Partnership of the Company
and the Designation, Distribution,
Redemption, Exchange, and
Consent Provisions with Respect to the 9% Series C Cumulative
Redeemable Preferred Equity of the Company (collectively, the
"Transaction Documents") and to consummate the transactions
contemplated thereby. The execution and delivery of the
Transaction Documents and the consummation of the transactions
contemplated thereby have been duly and validly authorized by all
requisite corporate or limited partnership action on the part of
the Company and TCO, and no other proceedings on the part of the
Company or TCO are necessary to authorize the Transaction
Documents or to consummate the transactions contemplated hereby.
The Transaction Documents have been duly and validly executed and
delivered by the Company and TCO. The Transaction Documents
constitute valid and binding obligations of the Company and TCO,
enforceable in accordance with their terms;
(iv) neither the execution, delivery nor performance of the
Transaction Documents by the Company or TCO will conflict with,
result in a default, right to accelerate or loss of rights under,
or result in the creation of any lien, charge or encumbrance
pursuant to, any provision of the Company's or TCO's
organizational documents or any franchise, mortgage, deed of
trust, lease, license, agreement, understanding, law, rule or
regulation or any order, judgement or decree to which the Company
or TCO is a party or by which the Company or TCO may be bound or
affected;
(v) the 1998 financial statements of the Company and TCO, including
the notes thereto, and supporting schedules have been prepared in
conformity with GAAP applied on a consistent basis (except as
otherwise noted therein) and present fairly the financial
position of the Company and TCO as of the dates indicated and the
results of its operations for the periods shown;
(vi) there is no action, suit, proceeding or investigation pending or,
to the Company's or TCO's knowledge, currently threatened against
the Company or TCO that questions the validity of any of the
Transaction Documents or the issuance of Parity Preferred Equity
(as defined below), or the right of the Company or TCO to enter
into any of the Transaction Documents or to consummate the
transactions contemplated thereby or that could reasonably be
expected to interfere with the ability of the Company or TCO to
perform their obligations thereunder;
(vii)the Equity (as defined below) when issued, sold and delivered by
the Company, shall be duly and validly issued and outstanding,
fully paid, and non-assessable and will be free of any liens,
claims, security interests, encumbrances, restrictions or rights
of third parties of any kind (collectively, "Encumbrances"). The
Shares (as defined below) when issued in redemption of the
Equity, shall be duly and valued issued and
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outstanding, fully
paid, and non-assessable and will be free of any Encumbrances;
and
(viii) a true and complete copy of the Company's Partnership Agreement
is set forth as Exhibit A hereto. There are no interests in the
Company authorized, issued or outstanding that rank senior to, or
on a parity with, the Equity with respect to liquidation, winding
up, dividends or distributions other than the Series A Preferred
Equity. There are no equity interests in TCO authorized, issued
or outstanding that rank senior to, or on a parity with, the
Shares with respect to liquidation, winding up, dividends or
distributions other than the Series A Preferred Stock of TCO and
the Series B Preferred Stock of TCO, and TCO will not authorize,
create or issue any such senior equity interests without the
prior written consent of Subscriber.
(ix) the foregoing representations and warranties will continue to be
true and correct on the Closing Date (as defined below).
(b) The Company will make the tax and securities representations set forth
on Exhibit B on the Closing Date.
(c) Counsel to the Company and TCO is concurrently herewith rendering an
opinion to Subscriber attached hereto as Exhibit C.
2. Sale of Equity
(a) The Company hereby agrees to sell to Subscriber, and Subscriber hereby
agrees to purchase from the Company, $75,000,000 of Series C Preferred
Equity of the Company (the "Equity"). The purchase price of the Equity
is $75,000,000, and is payable in cash at the Closing (as defined
below).
(b) The sale and purchase of the Equity (the "Closing") shall take place
at the offices of Subscriber on September 3, 1999 (the "Closing
Date").
(c) On the Closing Date, Subscriber shall, if the condition set forth in
Section 2(d) below is satisfied on the Closing Date, pay to the
Company by wire transfer of immediately available funds the purchase
price of the Equity purchased by such Subscriber, against delivery to
the Subscriber of each of the documents set forth on Schedule A
attached hereto.
(d) It shall be a condition to the Closing that the Company's and TCO's
representations and warranties hereunder then continue to be true and
correct.
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3. Registration
(a) TCO will file a registration statement with respect to the Series C
Preferred Stock to be issued to the Company upon exchange of the
Equity (the "Shares"), into such shares, in accordance with the
Registration Rights Agreement attached hereto as Exhibit D (the
"Registration Agreement") which is being executed and delivered
simultaneously herewith.
4. Covenants of the Company and TCO
(a) No later than June 30, 2000, TCO shall amend its Restated Articles of
Incorporation so that TCO will have the authority to issue additional
shares of preferred stock. Simultaneously therewith, TCO shall amend
its series designation creating the Series C Preferred Stock to
increase from 1,000,000 to 2,000,000 the number of shares of Series C
Preferred Stock constituting the series. Thereafter, subject to the
Second Amendment and Restatement of Agreement of Limited Partnership
of the Company, as amended, including the Designation, Redemption,
Exchange, and Voting Provisions with Respect to the Series C Preferred
Equity (the "Partnership Agreement"), the holders of the Equity will
be able to convert $75 in liquidation value of the Equity for one
share of Series C Preferred Stock, it being understood that the
aggregate amount in liquidation value of the equity shall remain
$75,000,000.
5. Subscriber's Representations.
(a) Subscriber represents and warrants that it is purchasing the Equity
solely for investment solely for its own account and not with a view
to or for the resale or distribution thereof except as permitted under
the Registration Agreement or as otherwise permitted under applicable
law, including the Securities Act of 1933, as amended (the "Securities
Act").
(b) Subscriber understands that it may sell or otherwise transfer the
Equity or the shares issuable on conversion of the Equity only if such
transaction is duly registered under the Securities Act, or if
Subscriber shall have received the favorable opinion of counsel to
Subscriber, which opinion shall be reasonably satisfactory to counsel
to the Company, to the effect that such sale or other transfer may be
made in the absence of registration under the Securities Act, and
registration or qualification in every applicable state. Subscriber
realizes that the Equity is not a liquid investment. Subscriber has
the knowledge and experience to evaluate the Company and the risks and
merits relating thereto.
(c) Subscriber represents and warrants that Subscriber is an "accredited
investor" as such term is defined in Rule 501 of the Regulation D
promulgated pursuant to the Securities Act, and shall be such on the
date any Equity is issued to Subscriber; Subscriber acknowledges that
Subscriber is able to bear the economic risk of losing Subscriber's
entire investment in the Equity and understands that an
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investment in
the Company involves substantial risks; Subscriber has the power and
authority to enter into this Agreement, and the execution and delivery
of, and performance under this Agreement, shall not conflict with any
rule, regulation, judgement or agreement applicable to Subscriber.
Subscriber has had the opportunity to discuss the Company's affairs
with the Company's officers.
(d) Subscriber represents and warrants that it was not formed with a
principal purpose of permitting the Company to satisfy the 100 partner
limitation of Treas. Reg. ss. 1.7704.1(h)(1)(ii).
6. Execution of Partnership Agreement
By executing this Private Placement Purchase Agreement, Subscriber agrees
to be bound by and subject to the terms of the Partnership Agreement as if
a signatory thereto.
7. Miscellaneous
This Agreement may not be changed or terminated except by written agreement
of both parties. It shall be binding on the parties and on their permitted
assigns. It sets forth all agreements of the parties, and may be signed in
counterparts.
This Agreement shall be governed by, and construed in accordance with, the
laws of New York without regard to conflicts of law principles thereof. The
federal and state courts sitting in New York, New York shall have exclusive
jurisdiction over all matters relating to this Agreement.
All notices, requests, service of process, consents, and other
communications under this Agreement shall be in writing and shall be deemed
to have been delivered (i) on the date personally delivered or (ii) one day
after properly sent by recognized overnight courier, addressed to the
respective parties at their address set forth in this Agreement or (iii) on
the day transmitted by facsimile so long as a confirmation copy is
simultaneously forwarded by recognized overnight courier, in each case
addressed to the respective parties at their address set forth in this
Agreement. Either party hereto may designate a different address by
providing written notice of such new address to the other party hereto as
provided above.
Dated: September 3, 1999
THE TAUBMAN REALTY GROUP
LIMITED PARTNERSHIP
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: Executive Vice President
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TAUBMAN CENTERS, INC.
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: Executive Vice President
SUBSCRIBER
XXXXXXX XXXXX 0000 XXXXXXXX XXXXX FUND, L.P.
By: /s/ Xxxxxxxxx X. Xxxxxx
Name: Xxxxxxxxx X. Xxxxxx
Title:
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