Item 1.01. Entry into a Material Definitive Agreement
Amended and Restated Merger Agreement
On November 14, 2020,
Simon Property Group, Inc., a Delaware corporation (“Simon”), Simon Property Group, L.P., a Delaware limited partnership
(the “Simon Operating Partnership”), Silver Merger Sub 1, LLC, a Delaware limited liability company and wholly owned
subsidiary of the Simon Operating Partnership (“Merger Sub 1”), Silver Merger Sub 2, LLC, a Delaware limited liability
company and wholly owned subsidiary of Merger Sub 1 (“Merger Sub 2” and, together with Simon, the Simon Operating Partnership
and Merger Sub 1, the “Simon Parties”), Taubman Centers, Inc., a Michigan corporation (“TCO”), and The
Taubman Realty Group Limited Partnership, a Delaware limited partnership (the “Taubman Operating Partnership” and,
together with TCO, the “Taubman Parties”), entered into an Amended and Restated Agreement and Plan of Merger (the “Amended
Merger Agreement”). The Amended Merger Agreement amends and restates the Agreement and Plan of Merger, dated as of February
9, 2020, by and among the Simon Parties and the Taubman Parties (the “Original Merger Agreement”), in its entirety,
on the terms and subject to the conditions set forth therein. Pursuant to the Amended Merger Agreement, subject to the satisfaction
or waiver of certain conditions, Merger Sub 2 will be merged with and into the Taubman Operating Partnership (the “Partnership
Merger”) and TCO will be merged with and into Merger Sub 1 (the “REIT Merger” and, together with the Partnership
Merger, the “Mergers”). Upon completion of the Partnership Merger, the Taubman Operating Partnership will survive (the
“Surviving Taubman Operating Partnership”) and the separate existence of Merger Sub 2 will cease. Upon completion of
the REIT Merger, Merger Sub 1 will survive (“Surviving TCO”) and the separate corporate existence of TCO will cease.
Immediately following the Partnership Merger, the Surviving Taubman Operating Partnership will be converted (the “Conversion”)
into a Delaware limited liability company (the “Joint Venture”).
Transaction Structure
At the effective time
of the Partnership Merger (the “Partnership Merger Effective Time”), (i) each unit of partnership interest in the Taubman
Operating Partnership (each, a “Taubman OP Unit”) issued and outstanding immediately prior to the Partnership Merger
Effective Time held by a limited partner of the Taubman Operating Partnership who is not a member of the Taubman Family (defined
as the “Titanium Family” in the Amended Merger Agreement) (the “Minority Partners”) will be converted into
the right to receive, at the election of such Minority Partner, the Common Stock Merger Consideration (as defined below) or 0.5703
limited partnership units in the Simon Operating Partnership; (ii) certain Taubman OP Units issued and outstanding immediately
prior to the Partnership Merger Effective Time held by a member of the Taubman Family will remain outstanding as units of partnership
interest in the Surviving Taubman Operating Partnership; and (iii) all other Taubman OP Units issued and outstanding immediately
prior to the Partnership Merger Effective Time held by a member of the Taubman Family will be converted into the right to receive
the Common Stock Merger Consideration. In addition, at the Partnership Merger Effective Time, each outstanding incentive unit in
the Taubman Operating Partnership will vest and be converted into a Taubman OP Unit, to be treated in the Partnership Merger in
the same manner as the Taubman OP Units held by the Minority Partners. The membership interests of Merger Sub 2 issued and outstanding
immediately prior to the Partnership Merger Effective Time will automatically be converted into a number of units of partnership
interest in Surviving Taubman Operating Partnership such that following the Partnership Merger, Merger Sub 1 and TCO will collectively
own 80% (assuming, for purposes of this calculation, that the Taubman OP Units issuable under the Option Deferral Agreement (as
defined in the Amended Merger Agreement) among TCO, the Taubman Operating Partnership and Robert S. Taubman are outstanding interests
of Surviving Taubman Operating Partnership) of the outstanding interests of Surviving Taubman Operating Partnership.
Pursuant to the terms
and conditions in the Amended Merger Agreement, at the effective time of the REIT Merger (the “REIT Merger Effective Time”),
(i) each share of common stock, $0.01 par value per share, of TCO (the “TCO Common Stock”) issued and outstanding immediately
prior to the REIT Merger Effective Time will be converted into the right to receive $43.00 in cash (the “Common Stock Merger
Consideration”); and (ii) each share of Series B Non-Participating Convertible Preferred Stock, $0.001 par value per share,
of TCO (the “TCO Series B Preferred Stock”) will be converted into the right to receive an amount in cash equal to
the Common Stock Merger Consideration, divided by 14,000. Immediately prior to the REIT Merger Effective Time, TCO will issue a
redemption notice and cause funds to be set aside to pay the redemption price for each share of Series J Cumulative Redeemable
Preferred Stock, no par value, of TCO (the “TCO Series J Preferred Stock”) and each share of Series K Cumulative Redeemable
Preferred Stock, no par value, of TCO (the “TCO Series K Preferred Stock”), at their respective liquidation preference
of $25.00 plus all accumulated and unpaid dividends to, but not including, the redemption date of such share (the “Redemption”).
In addition, at the
REIT Merger Effective Time, (i) each outstanding restricted stock unit award of TCO (each, a “TCO RSU”) and each outstanding
performance stock unit award (each, a “TCO PSU”) granted under the Taubman Stock Plans (defined as the “Titanium
Stock Plans” in the Amended Merger Agreement) that vest in accordance with its terms in connection with the closing of the
Mergers will automatically convert into the right to receive the Common Stock Merger Consideration; (ii) each outstanding TCO RSU
and TCO PSU that is not eligible to vest in accordance with its terms at the REIT Merger Effective Time will be converted into
a cash substitute award to be paid (A) with respect to any such award granted prior to 2020, in accordance with the same service-vesting
schedule that applied to the original TCO RSU or TCO PSU award and (B) with respect to any such award granted in 2020, in accordance
with the same vesting schedule (including performance-vesting conditions) that applied to the original TCO RSU or TCO PSU award;
(iii) each outstanding share of deferred TCO Common Stock (each, a “TCO DSU”) granted under the Taubman Stock Plans
will be converted into the right to receive the Common Stock Merger Consideration; and (iv) each dividend equivalent right granted
in tandem with any TCO RSU or TCO PSU (each a “TCO DER”) will be treated in the same manner as the outstanding TCO
RSU or TCO PSU to which such TCO DER relates.
Finally, at the effective
time of the Conversion, the Option Deferral Agreement (as defined in the Amended Merger Agreement) will be deemed to be amended
so that each Option Deferred Unit (as defined in the Amended Merger Agreement) will represent the right to receive, following the
Conversion, one Reorganized Taubman OP Unit (defined as “Reorganized Titanium OP Unit” in the Amended Merger Agreement),
and will remain subject to all other terms and conditions of the Option Deferral Agreement.
Following the Mergers
and the Conversion, the Simon Operating Partnership will own 100% of the outstanding equity of Surviving TCO, Surviving TCO will
own 80% of the limited liability company interests of the Joint Venture, and the Taubman Family will own the remaining 20% (assuming,
for purposes of this calculation, that Taubman OP Units issuable under the Option Deferral Agreement are outstanding interests
of Surviving Taubman Operating Partnership) of the limited liability company interests the Joint Venture. Surviving TCO and the
Taubman Family will enter into an Operating Agreement (as defined below) with respect to the Joint Venture at the time of the Conversion
in the form attached as Exhibit B to the Amended Merger Agreement and described further below.
Conditions to the
Merger
The consummation of
the Mergers is subject to the approval of the REIT Merger by (i) the holders of at least two-thirds of the outstanding shares of
TCO Common Stock and TCO Series B Preferred Stock (voting together as a single class); (ii) the holders of at least a majority
of TCO Series B Preferred Stock; and (iii) the holders of at least a majority of the outstanding shares of TCO Common Stock and
TCO Series B Preferred Stock (voting together as a single class and excluding the outstanding shares of TCO Common Stock and TCO
Series B Preferred Stock owned of record or beneficially by the Taubman Family). In addition, the consummation of the Mergers is
subject to certain other customary closing conditions, including, among others, the approval of the Partnership Merger by the partners
holding at least a majority of the aggregate percentage interests in the Taubman Operating Partnership (other than those held by
TCO) (which approval has been obtained), the absence of certain legal impediments to the consummation of the Mergers and material
compliance by the Simon Parties and the Taubman Parties with their respective obligations under the Amended Merger Agreement. The
Amended Merger Agreement, as compared to the Original Merger Agreement, removes the condition requiring the absence of a material
adverse effect with respect to TCO. The obligations of the parties to consummate the Mergers are not subject to any financing condition
or the receipt of any financing by the Simon Parties.
The Amended Merger
Agreement also provides that (i) in determining whether or not the closing condition that certain representations and warranties
made by TCO are true and correct has been satisfied, any failure of such representations and warranties to be true and correct
that was known to Simon, or that fails primarily as a result of or in connection with exogenous events that were beyond the reasonable
control of any of the Taubman Parties, shall be excluded and (ii) in determining whether or not the closing condition that the Taubman
Parties have performed in all material respects all covenants set forth in the Amended Merger Agreement has been satisfied (including
from the date of the Original Merger Agreement), any failure of the Taubman Parties to have performed such obligations that was
known to Simon shall be excluded. With respect to such determinations, “known” means the actual knowledge of certain
senior executives of Simon, as well as matters included in certain materials provided to Simon or in TCO’s public filings,
in each case prior to the date of the Amended Merger Agreement.
Non-Solicit
Subject to
certain exceptions, TCO has agreed not to (i) solicit, initiate or propose the making or submission of, or knowingly
encourage or facilitate the making or submission of, any offer or proposal that constitutes or would reasonably be expected
to lead to an Acquisition Proposal (as defined in the Amended Merger Agreement); (ii) furnish to any person access to the
business, properties, assets, books, records or other non-public information, or to any personnel, of TCO or any of its
subsidiaries, in any such case with the intent to induce the making or submission of, or to knowingly encourage, facilitate
or assist, an Acquisition Proposal; (iii) participate, facilitate or engage in discussions or negotiations with any person
with respect to an Acquisition Proposal or any an offer, proposal or inquiry that would reasonably be expected to lead to an
Acquisition Proposal; (iv) enter into any letter of intent, memorandum of understanding, agreement in principle, investment
agreement, merger agreement, acquisition agreement or other contract relating to an Acquisition Transaction (as defined in
the Amended Merger Agreement) or that would reasonably be expected to lead to an Acquisition Proposal; or (v) reimburse or
agree to reimburse the expenses of any other person in connection with an Acquisition Proposal or any inquiry, discussion,
offer or request that would reasonably be expected to lead to an Acquisition Proposal.
Prior to the approval
of the Amended Merger Agreement by TCO’s shareholders, the Board of Directors of TCO (the “TCO Board”) may in
certain circumstances effect a Taubman Board Recommendation Change (defined as a “Titanium Board Recommendation Change”
in the Amended Merger Agreement) and terminate the Amended Merger Agreement in order to enter into a definitive agreement providing
for a Superior Proposal (as defined in the Amended Merger Agreement), subject to complying with certain notice and other specified
conditions set forth in the Amended Merger Agreement, including payment to Simon of a termination fee (as described below).
Termination
Upon a termination
of the Amended Merger Agreement, under certain circumstances, the Taubman Operating Partnership will be required to pay a termination
fee to Simon of $92,000,000. The termination fee is payable if the Amended Merger Agreement is terminated by TCO prior to the approval
of the Amended Merger Agreement by TCO’s shareholders to accept a Superior Proposal, as further described in the Amended
Merger Agreement. In addition, the termination fee is payable to Simon if Simon terminates the Amended Merger Agreement under certain
circumstances and subject to certain restrictions, including if the TCO Board effects a Taubman Board Recommendation Change. If
(i) the Amended Merger Agreement is terminated (A) by either TCO or Simon because the Mergers have not occurred by the end date
described below or because TCO shareholder approval is not obtained at a shareholder meeting duly held for such purpose or (B)
by Simon in respect of a breach of TCO’s covenants or agreements that would give rise to the failure of a closing condition
that is incapable of being cured within the time periods prescribed by the Amended Merger Agreement; (ii) an alternative acquisition
proposal has been made to TCO and publicly announced or otherwise disclosed and not withdrawn; and (iii) within twelve months after
termination of the Amended Merger Agreement, TCO enters into a definitive agreement with respect to an alternative acquisition
proposal (and subsequently consummates such transaction) or consummates a transaction with respect to an alternative acquisition
proposal, the Taubman Operating Partnership will pay Simon the termination fee.
In addition to the
foregoing termination rights and customary termination rights held by each party, either party may terminate the Amended Merger
Agreement if the Mergers are not consummated on or before an end date of June 30, 2021 and such party’s breach was not the
primary cause of the failure of the Mergers to be consummated by such date. In such event, no termination fee is payable.
Other Terms of the
Amended Merger Agreement
The Simon Parties
and Taubman Parties each made certain customary representations, warranties and covenants in the Amended Merger Agreement,
including, among others, covenants by the Taubman Parties to use commercially reasonable efforts to conduct its business in
all material respects in the ordinary course, subject to certain exceptions, including an exception for certain modified
operations due to the COVID-19 pandemic, and a covenant by Simon to maintain its REIT (as defined in the Amended Merger
Agreement) qualification, during the period between the execution of the Amended Merger Agreement and the consummation of the
Mergers. As compared to the interim operating covenants contained in the Original Merger Agreement, among other changes, the
Amended Merger Agreement prohibits TCO and its subsidiaries from making distributions without the prior written consent of
Simon, except as necessary to maintain TCO’s qualification as a REIT, for certain tax distributions of the Taubman
Operating Partnership and pursuant to the terms of the TCO Series J Preferred Stock and TCO Series K Preferred Stock.
Further, each party has agreed to use its reasonable best efforts to obtain any necessary regulatory approvals, subject to
Simon’s right to control the process of seeking such approvals and certain other limitations, including that TCO need
not take any action that would be a “Taubman Burdensome Condition” (defined as a “Titanium Burdensome
Condition” in the Amended Merger Agreement) under the Amended Merger Agreement.
In connection with
and in order to facilitate the Redemption, Simon will purchase Series A Preferred Units of the Surviving Taubman Operating Partnership
(which shall have the terms set forth in the Operating Agreement, as described below) for an aggregate amount equal to $25.00 multiplied
by the number of shares of TCO Series J Preferred Stock and TCO Series K Preferred Stock outstanding at the closing of the Mergers.
In the event that any
action is brought prior to the consummation of the Amended Merger Agreement by or against any of the Taubman Parties to enforce
the obligations of any Simon Party to consummate the transactions contemplated by the Amended Merger Agreement, or for money damages
for any Simon Party’s failure to consummate the transactions contemplated by the Amended Merger Agreement, or to excuse any
Simon Party’s obligation to consummate the transactions contemplated by the Amended Merger Agreement, or to assert any Simon
Party’s right to terminate this Agreement, the Common Stock Merger Consideration shall be deemed to be $52.50 in cash, without
interest and less any required withholding taxes, in the event the Simon Parties have brought or pursued such action, failed to
consummate the transactions contemplated by the Amended Merger Agreement in breach thereof or to comply with the Amended Merger
Agreement in such a manner as to frustrate a condition to closing hereunder that forms a basis for a claim by any Simon Party that
it is not obligated to consummate the transactions contemplated by the Amended Merger Agreement, or sought to terminate the Amended
Merger Agreement, in each case other than in good faith.
The foregoing description
of the Amended Merger Agreement does not purport to be complete, and is qualified in its entirety by reference to the full text
of the Amended Merger Agreement, which is attached hereto as Exhibit 2.1 and is incorporated herein by reference. A copy of the
Amended Merger Agreement has been included to provide shareholders with information regarding its terms and is not intended to
provide any factual information about the Simon Parties or the Taubman Parties. The representations, warranties and covenants contained
in the Amended Merger Agreement have been made solely for the purposes of the Amended Merger Agreement and as of specific dates;
were solely for the benefit of parties to the Amended Merger Agreement; and are not intended as statements of fact to be relied
upon by TCO’s or Simon’s shareholders, but rather as a way of allocating the risk between the parties to the Amended
Merger Agreement in the event the statements therein prove to be inaccurate; have been modified or qualified by certain confidential
disclosures that were made between the parties in connection with the negotiation of the Amended Merger Agreement, which disclosures
are not reflected in the Amended Merger Agreement attached hereto; may no longer be true as of a given date; and may apply standards
of materiality in a way that is different from what may be viewed as material by shareholders. Accordingly, shareholders should
not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state
of facts or condition of the Taubman Parties or the Simon Parties. Moreover, information concerning the subject matter of the representations
and warranties may change after the date of the Amended Merger Agreement, which subsequent information may or may not be fully
reflected in Simon’s public disclosures. Simon acknowledges that, notwithstanding the inclusion of the foregoing cautionary
statements, it is responsible for considering whether additional specific disclosures of material information regarding material
contractual provisions are required to make the statements in this Current Report on Form 8-K not misleading.
Joint Venture
Operating Agreement
Immediately following
the Conversion, Surviving TCO and the Taubman Family will enter into an operating agreement with respect to the Joint Venture (the
“Operating Agreement”) that will define the rights, duties and responsibilities of Surviving TCO and the Taubman Family
as members of the Joint Venture. At the time of the Conversion, Surviving TCO will hold 80% of the common units of the Joint Venture
and the Taubman Family will hold the remaining 20%. Affiliates of Simon will also hold certain preferred units of the Joint Venture
as consideration for providing the funds for the redemption of the TCO Series J Preferred Stock and the TCO Series K Preferred
Stock, which preferred units will be on substantially the same terms as the TCO Series J Preferred Stock and the TCO Series K Preferred
Stock.
Prior to the occurrence
of certain specified termination events (including, but not limited to, the Taubman Family’s ownership falling below a specified
threshold) (the “Taubman Period”), the operations of the Joint Venture and its subsidiaries will be managed by the
Chief Executive Officer, Robert S. Taubman (or, if Robert S. Taubman ceases to be Chief Executive Officer, William S. Taubman or
another Taubman Family appointee reasonably acceptable to Surviving TCO), subject to approval rights held by Surviving TCO over
certain material matters, including, but not limited to, equity issuances, debt incurrences beyond certain agreed-upon exceptions,
the annual budget (subject to certain procedures and exceptions), material litigation, affiliate transactions and material contracts.
In addition, for as long as Simon intends to qualify as a real estate investment trust, the Joint Venture is obligated to operate
as if it were a real estate investment trust.
Following the end of
the Taubman Period, the operations of the Joint Venture and its subsidiaries will be managed by a board of directors appointed
by Surviving TCO, subject to a more limited set of approval rights held by the Taubman Family, subject to the Taubman Family maintaining
certain minimum ownership thresholds.
The Joint Venture will
be required to distribute to its members, on a monthly basis, in addition to certain other minimum requirements agreed to in the
Operating Agreement, the greater of (i) 95% of the portion of the Joint Venture’s REIT taxable income attributable (directly
or indirectly) to Surviving TCO, grossed up for all the members of the Joint Venture and (ii) certain minimum distribution levels
agreed by Surviving TCO and the Taubman Family.
Pursuant to the Operating
Agreement, from the effective date of the Operating Agreement until the two-year anniversary of the effective date of the Operating
Agreement, subject to certain conditions, Surviving TCO may be required to make one or more additional investments up to an aggregate
of $250,000,000 in exchange for units of a new series of 8.50% Series B Cumulative Redeemable Preferred Units (the “Series
B Preferred Units”).
Pursuant to the Series
B Preferred Unit Designation, if, during the Taubman Period, (i) the distributions on any Series B Preferred Units have not been
timely paid for 18 monthly distribution periods, whether or not consecutive, or (ii) the Joint Venture shall have failed to pay
the redemption price for any Series B Preferred Unit on the applicable redemption date, the holders of the Series B Preferred Units
will immediately be entitled to appoint an additional director to the board of directors of the Joint Venture.
Subject to customary
exceptions, the Operating Agreement will restrict the Taubman Family from transferring its equity in the Joint Venture to third
parties. Subject to customary exceptions, Surviving TCO will be restricted from transferring its equity in the Joint Venture to
third parties until the earlier of the seventh anniversary of the Conversion and the end of the Taubman Period. The Taubman Family
will have the right to exchange its equity interests for limited partnership units in the Simon Operating Partnership or cash or
a combination of such units and cash (at the Taubman Family’s election) based on specified valuation methods at the following
times and in the following amounts:
• Between the second and third
anniversaries of the Conversion (i.e., between 24 to 36 months thereafter): One-time exchange of 100% of the Taubman Family’s
equity in the Joint Venture. Surviving TCO will have the option to modify the consideration for such exchange to be 50% in limited
partnership units in the Simon Operating Partnership and 50% in cash. Surviving TCO will also have the option to cause the exchange
of half of the equity interests subject to such exchange to close on a delayed basis, within one year of the initial closing, for
the same value and consideration mix.
• After the second anniversary
of the Conversion: Up to 20% of the Taubman Family’s initial equity in the Joint Venture may be exchanged following the second
anniversary, 40% following the third anniversary, 60% following the fourth anniversary, 80% following the fifth anniversary and
100% following the sixth anniversary and thereafter.
• In each case, an exchange must
be for no less than a number of equity interests equal to 10% of the common units of the Joint Venture owned by the Taubman Family
as of the effective time of the Conversion or the Taubman Family’s entire remaining equity stake, if smaller. The Taubman
Family will agree to vote any limited partnership units in the Simon Operating Partnership it acquires pursuant to any such exchanges
as directed by the Simon family designee under the limited partnership agreement of the Simon Operating Partnership, subject to
certain exceptions.
• The Taubman Family will have
customary registration rights with respect to any common shares of Simon it may receive upon redemption or exchange of any limited
partnership units in the Simon Operating Partnership received pursuant to such exchanges.
Under certain circumstances,
Surviving TCO will have the right to cause the Taubman Family to exchange 100% of its equity interests in the Joint Venture for
limited partnership units in the Simon Operating Partnership or cash or a combination of such units and cash (at Surviving TCO’s
election), pursuant to the same pricing mechanics as the Taubman Family’s elective exchanges. The Taubman Family will have
the option to modify the consideration for such exchange to be 50% in limited partnership units in the Simon Operating Partnership
and 50% in cash.
Certain members of
the Taubman Family involved in the management of the Joint Venture will agree to customary non-competition obligations until such
time as the Taubman Family no longer owns 2% of the common units in the Joint Venture and for one year thereafter.
Prior to the Taubman
Family’s ownership falling below a specified threshold, subject to certain exceptions, business opportunities first identified
by the Joint Venture will belong to the Joint Venture and Surviving TCO will agree not to pursue such business opportunities outside
of the Joint Venture without the consent of the Taubman Family.
The foregoing description
of the Operating Agreement does not purport to be complete, and is qualified in its entirety by reference to the full text of the
Operating Agreement, which is attached as Exhibit B to the Amended Merger Agreement and is incorporated herein by reference.
Amended and Restated Voting Agreement
Concurrently with and
as a condition to the Simon Parties entering into the Amended Merger Agreement, each member of the Taubman Family that owns TCO
Common Stock, TCO Series B Preferred Stock or partnership units of the Taubman Operating Partnership (such equity interests, collectively,
the “Subject Equity”), including certain affiliated entities of Robert S. Taubman and William S. Taubman and certain
members of their immediate family, entered into an amended and restated voting agreement with Simon (the “Amended Voting
Agreement”) with respect to all of the Subject Equity beneficially owned by the Taubman Family. The Amended Voting Agreement
amends and restates the Voting Agreement, dated as of February 9, 2020, by and among Simon and each member of the Taubman Family
that owns the Subject Equity, in its entirety, on the terms and subject to the conditions set forth therein.
The Taubman Family
beneficially own approximately 90% of the outstanding shares of TCO Series B Preferred Stock, representing, together with TCO Common
Stock beneficially owned by the Taubman Family, approximately 29% of the voting stock of TCO. Pursuant to the Amended Voting Agreement,
the Taubman Family have agreed to take the following actions, among others, during the term of the Amended Voting Agreement: (i)
vote the Subject Equity in favor of the REIT Merger, the Partnership Merger and the Conversion, as applicable; (ii) vote the Subject
Equity against any Acquisition Proposal; and (iii) vote the Subject Equity against any other actions that would impede, interfere
with, delay or prevent the consummation of the Mergers, the Conversion or the other transactions contemplated by the Amended Merger
Agreement. The Amended Voting Agreement will terminate upon the earliest of (i) the termination of the Amended Merger Agreement
in accordance with its terms; (ii) the REIT Merger Effective Time; and (iii) the Taubman Family providing written notice to Simon
that it is terminating the Voting Agreement at any time following (A) a Taubman Board Recommendation Change or (B) any change to
the terms of the Amended Merger Agreement that reduces the amount or changes the form of, consideration payable to the Taubman
Family or is otherwise materially adverse to the Taubman Family.
The foregoing
description of the Amended Voting Agreement does not purport to be complete, and is qualified in its entirety by reference to
the full text of the Amended Voting Agreement. A copy of the Amended Voting Agreement entered into by the Taubman Family,
Simon and the Simon Operating Partnership is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
Settlement Agreement
As previously announced,
on June 10, 2020, Simon had sent a notice to TCO stating that it was terminating the Original Merger Agreement and filed a lawsuit
(the “Merger Litigation”) in the Circuit Court for the 6th Judicial Circuit, Oakland County, Michigan (the “Court”)
against the Taubman Parties alleging that TCO had suffered a Material Adverse Effect and had violated certain representations and
covenants in the Original Merger Agreement, and seeking declarations that, among other things, Simon had validly terminated the
Original Merger Agreement and was not required to close the Mergers. On June 17, 2020, TCO filed a counterclaim against the Simon
Parties, asserting that Simon had breached the Original Merger Agreement and seeking specific performance of the Original Merger
Agreement. Simon filed a supplemental complaint against the Taubman Parties on September 9, 2020, asserting additional claims for
declaratory relief and for breach of contract, and on September 16, 2020, TCO denied any liability under these additional claims
and reasserted its counterclaim against the Simon Parties.
Concurrently with the
execution of the Amended Merger Agreement, the Simon Parties and Taubman Parties entered into a Settlement Agreement (the “Settlement
Agreement”). The Settlement Agreement provides for reciprocal releases by the Simon Parties and Taubman Parties of all claims
arising out of or related to the Mergers and resolves and dismisses with prejudice the Merger Litigation, except that any potential
claims by the Simon Parties or Taubman Parties arising out of related to the Amended Merger Agreement are not released.
Cautionary Statement Regarding Forward-Looking
Statements
This communication
contains certain “forward-looking” statements as that term is defined by Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements that are predictive in nature,
that depend on or relate to future events or conditions, or that include words such as “believes”, “anticipates”,
“expects”, “may”, “will”, “would,” “should”, “estimates”,
“could”, “intends”, “plans” or other similar expressions are forward-looking statements. Forward-looking
statements involve significant known and unknown risks and uncertainties that may cause Simon’s or TCO’s actual results
in future periods to differ materially from those projected or contemplated in the forward-looking statements as a result of,
but not limited to, the following factors: the failure to receive, on a timely basis or otherwise, the required approvals by TCO’s
shareholders; the risk that a condition to closing of the proposed transaction may not be satisfied; Simon’s and TCO’s
ability to consummate the Mergers; the possibility that the anticipated benefits from the transaction cannot be fully realized
(including Simon’s expectations regarding FFO accretion); the ability of TCO to retain key personnel and maintain relationships
with business partners pending the consummation of the transaction; and the impact of legislative, regulatory and competitive
changes; uncertainties regarding the impact of the COVID-19 pandemic and governmental restrictions intended to prevent its spread
on each of Simon’s and TCO’s tenants' businesses, financial condition, results of operations, cash flow and liquidity
and ability to access the capital markets and its satisfy respective debt service obligations and make distributions to its stockholders;
and other risk factors relating to the industries in which Simon and TCO operate, as detailed from time to time in each of Simon’s
filings with the SEC. There can be no assurance that the proposed transaction will in fact be consummated.
Additional information
about these factors and about the material factors or assumptions underlying such forward-looking statements may be found under
Item 1.A in Simon’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and in Simon’s
Quarterly Reports on Form 10-Q for each of the fiscal quarters ended March 31, 2020, June 30, 2020 and September 30, 2020. Simon
cautions that the foregoing list of important factors that may affect future results is not exhaustive. When relying on forward-looking
statements to make decisions with respect to the proposed transaction, shareholders and others should carefully consider the foregoing
factors and other uncertainties and potential events. All subsequent written and oral forward-looking statements concerning the
proposed transaction or other matters attributable to Simon or any other person acting on their behalf are expressly qualified
in their entirety by the cautionary statements referenced above. The forward-looking statements contained herein speak only as
of the date of this communication. Simon undertakes no obligation to update or revise any forward-looking statements for any reason,
even if new information becomes available or other events occur in the future, except as may be required by law.