SECURITIES AND EXCHANGE COMMISSION
                                               Washington, D.C. 20549

                                                      Form 10-Q/A

                                     QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                                       OF THE SECURITIES EXCHANGE ACT OF 1934

                                        For the Quarter Ended: June 30, 2002
                                            Commission File No.  1-11530

                                               Taubman Centers, Inc. 
              --------------------------------------------------------------------------------------
                               (Exact name of registrant as specified in its charter)

      Michigan                                                                   38-2033632
      ------------------------------------------------        ----------------------------------------------------
      (State or other jurisdiction of                         (I.R.S. Employer
      incorporation or organization)                          Identification No.)

      200 East Long Lake Road, Suite 300, P.O. Box 200, Bloomfield Hills, Michigan               48303-0200
      -------------------------------------------------------------------------------------------------------------
      (Address of principal executive offices)                                                   (Zip Code)

                                                    (248) 258-6800
      -------------------------------------------------------------------------------------------------------------
      (Registrant's telephone number, including area code)

         Indicate by check mark whether the  registrant  (1) has filed all reports  required to be filed by Section
13 or 15(d) of the  Securities  Exchange Act of 1934 during the  preceding  12 months (or for such  shorter  period
that the registrant was required to file such reports),  and (2) has been subject to such filing  requirements  for
the past 90 days.

         Yes  X   .       No        .
            ------          --------

         As of August 9, 2002,  there were outstanding  51,148,135  shares of the Company's common stock, par value
$0.01 per share.

                                           PART 1. FINANCIAL INFORMATION

   This  amendment  to Form 10-Q for the period ended June 30, 2002 is being filed to update Note 9 of the Notes to
Consolidated  Financial  Statements  with  respect to a lawsuit  that was  received  by the Company on the date the
Form 10-Q was  filed.  Also,  a cross  reference  to Note 9 was made in  Management's  Discussion  of  Analysis  of
Financial Condition and Results of Operations - Results of Operations - New Center Openings.

Item 1. Financial Statements.

The following  consolidated  financial  statements of Taubman Centers,  Inc. (the Company) are provided pursuant to
the requirements of this item.

Consolidated Balance Sheet as of June 30, 2002 and December 31, 2001......................................  2
Consolidated Statement of Operations and Comprehensive Income for the three months ended
   June 30, 2002 and 2001.................................................................................  3
Consolidated Statement of Operations and Comprehensive Income for the six months ended
   June 30, 2002 and 2001.................................................................................  4
Consolidated Statement of Cash Flows for the six months ended June 30, 2002 and 2001 .....................  5
Notes to Consolidated Financial Statements................................................................  6

                                                         1

                                               TAUBMAN CENTERS, INC.

                                            CONSOLIDATED BALANCE SHEET
                                         (in thousands, except share data)

                                                                                June 30            December 31
                                                                                -------            -----------
                                                                                 2002                 2001
                                                                                 ----                 ----
Assets:
   Properties                                                              $   2,156,166         $   2,194,717
   Accumulated depreciation and amortization                                    (359,048)             (337,567)
                                                                           -------------         -------------
                                                                           $   1,797,118         $   1,857,150
   Investment in Unconsolidated Joint Ventures (Note 6)                          170,357               148,801
   Cash and cash equivalents                                                      72,658                27,789
   Accounts and notes receivable, less allowance
     for doubtful accounts of $5,729 and $5,345 in
     2002 and 2001                                                                28,709                35,734
   Accounts and notes receivable from related parties                             13,326                20,645
   Deferred charges and other assets                                              42,705                51,320
                                                                           -------------         -------------
                                                                           $   2,124,873         $   2,141,439
                                                                           =============         =============
Liabilities:
   Notes payable                                                           $   1,465,530         $   1,423,241
   Accounts payable and accrued liabilities                                      145,655               181,912
   Dividends and distributions payable                                            19,435                12,937
                                                                           -------------         -------------
                                                                           $   1,630,620         $   1,618,090

Commitments and Contingencies (Note 9)

Preferred Equity of TRG (Note 1)                                           $      97,275         $      97,275

Partners' Equity of TRG allocable to minority partners (Note 1)

Shareowners' Equity:
   Series A Cumulative Redeemable Preferred Stock,
      $0.01 par value, 8,000,000 shares authorized,
      $200 million liquidation preference,
      8,000,000 shares issued and outstanding at
      June 30, 2002 and December 31, 2001                                  $          80         $          80
   Series B Non-Participating Convertible Preferred Stock,
      $0.001 par and liquidation value, 40,000,000 shares
      authorized and 31,767,066 shares issued and
      outstanding at June 30, 2002 and December 31, 2001                              32                    32
   Series C Cumulative Redeemable Preferred Stock,
      $0.01 par value, 2,000,000 shares authorized, $75 million
      liquidation preference, none issued
   Series D Cumulative Redeemable Preferred Stock,
      $0.01 par value, 250,000 shares authorized, $25 million
      liquidation preference, none issued
   Common Stock, $0.01 par value, 250,000,000 shares
      authorized,  51,121,140  and  50,734,984 issued and
      outstanding at June 30, 2002 and December 31, 2001                             511                   507
   Additional paid-in capital                                                    678,562               673,043
   Accumulated other comprehensive income (Note 2)                                (9,102)               (3,119)
   Dividends in excess of net income                                            (273,105)             (244,469)
                                                                           -------------         -------------
                                                                           $     396,978         $     426,074
                                                                           -------------         -------------
                                                                           $   2,124,873         $   2,141,439
                                                                           =============         =============

                                  See notes to consolidated financial statements.

                                                         2

                                               TAUBMAN CENTERS, INC.

                           CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
                                         (in thousands, except share data)

                                                                                Three Months Ended June 30
                                                                                --------------------------
                                                                                2002                  2001
                                                                                ----                  ----

Income:
   Minimum rents                                                           $      46,739         $      38,178
   Percentage rents                                                                  629                   881
   Expense recoveries                                                             29,621                25,049
   Revenues from management, leasing and
     development services                                                          5,735                 6,086
   Other                                                                           7,347                 9,571
                                                                           -------------         -------------
                                                                           $      90,071         $      79,765
                                                                           -------------         -------------
Operating Expenses:
   Recoverable expenses                                                    $      25,905         $      21,604
   Other operating                                                                 6,351                 9,105
   Charge related to technology investments (Note 5)                               8,125
   Management, leasing and development services                                    5,151                 5,089
   General and administrative                                                      5,445                 4,862
   Interest expense                                                               20,764                14,981
   Depreciation and amortization                                                  20,218                14,460
                                                                           -------------         -------------
                                                                           $      91,959         $      70,101
                                                                           -------------         -------------
Income (loss) before equity in income of Unconsolidated
   Joint Ventures, discontinued operations, and minority
   and preferred interests                                                 $      (1,888)        $       9,664
Equity in income of Unconsolidated Joint Ventures (Note 6)                         4,740                 5,215
                                                                           -------------         -------------
Income before discontinued operations and minority and
   preferred interests                                                     $       2,852         $      14,879
Discontinued operations (Note 3):
   Income from operations                                                            979                   844
   Gain on disposition of interest in center                                       9,975
                                                                           -------------         -------------
Income before minority and preferred interests                             $      13,806         $      15,723
Minority interest in consolidated joint ventures                                     435                   181
Minority interest in TRG:
   TRG income allocable to minority partners                                      (4,997)               (4,406)
   Distributions in excess of earnings allocable to minority partners             (3,148)               (3,488)
TRG Series C and D preferred distributions (Note 1)                               (2,250)               (2,250)
                                                                           -------------         -------------
Net income                                                                 $       3,846         $       5,760
Series A preferred dividends                                                      (4,150)               (4,150)
                                                                           -------------         -------------
Net income (loss) allocable to common shareowners                          $        (304)        $       1,610
                                                                           =============         =============

Net income                                                                 $       3,846         $       5,760
Other comprehensive income (loss) (Note 2):
   Unrealized gain (loss) on interest rate instruments                            (6,508)                2,683
   Reclassification adjustment for amounts recognized in net income                  176                   106
                                                                           -------------         -------------
Comprehensive income (loss)                                                $      (2,486)        $       8,549
                                                                           =============         =============

Basic income (loss) per common share (Note 10):
   Income (loss) from continuing operations                                $       (0.11)        $        0.02
                                                                           ==============        =============
   Net income (loss)                                                       $       (0.01)        $        0.03
                                                                           ==============        =============

Diluted income (loss) per common share (Note 10):
   Income (loss) from continuing operations                                $       (0.11)        $        0.02
                                                                           ==============        =============
   Net income (loss)                                                       $       (0.01)        $        0.03
                                                                           ==============        =============

Cash dividends declared per common share                                   $        .255         $         .25
                                                                           =============         =============

Weighted average number of common shares outstanding                          51,076,901            50,181,946
                                                                           =============         =============

                                  See notes to consolidated financial statements.

                                                         3

                                               TAUBMAN CENTERS, INC.

                           CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
                                         (in thousands, except share data)

                                                                                 Six Months Ended June 30
                                                                                 ------------------------
                                                                                2002                  2001
                                                                                ----                  ----

Income:
   Minimum rents                                                           $      93,489         $      76,691
   Percentage rents                                                                1,694                 1,918
   Expense recoveries                                                             57,396                48,138
   Revenues from management, leasing and
     development services                                                         10,863                12,457
   Other                                                                          13,251                15,507
                                                                           -------------         -------------
                                                                           $     176,693         $     154,756
                                                                           -------------         -------------
Operating Expenses:
   Recoverable expenses                                                    $      49,291         $      41,078
   Other operating                                                                16,307                16,100
   Charge related to technology investments (Note 5)                               8,125
   Management, leasing and development services                                   10,044                 9,430
   General and administrative                                                     10,365                 9,617
   Interest expense                                                               41,393                30,180
   Depreciation and amortization                                                  40,921                31,037
                                                                           -------------         -------------
                                                                           $     176,446         $     137,442
                                                                           -------------         -------------
Income before equity in income of Unconsolidated
   Joint Ventures, discontinued operations, cumulative effect  of
   change in accounting principle and minority and preferred interests     $         247         $      17,314
Equity in income before cumulative effect of change in
   accounting principle of Unconsolidated Joint Ventures (Note 6)                 10,877                10,071
                                                                           -------------         -------------
Income before discontinued operations, cumulative effect of change
   in accounting principle, and minority and preferred interests           $      11,124         $      27,385
Discontinued operations (Note 3):
   Income from operations                                                          2,723                 2,074
   Gain on disposition of interests in centers                                    12,024
Cumulative effect of change in accounting principle (Note 2)                                            (8,404)
                                                                           -------------         -------------
Income before minority and preferred interests                             $      25,871         $      21,055
Minority interest in consolidated joint ventures                                     646                   598
Minority interest in TRG:
   TRG income allocable to minority partners                                      (9,537)               (4,889)
   Distributions in excess of earnings allocable to minority partners             (6,768)              (11,003)
TRG Series C and D preferred distributions (Note 1)                               (4,500)               (4,500)
                                                                           -------------         -------------
Net income                                                                 $       5,712         $       1,261
Series A preferred dividends                                                      (8,300)               (8,300)
                                                                           -------------         -------------
Net loss allocable to common shareowners                                   $      (2,588)        $      (7,039)
                                                                           =============         =============

Net income                                                                 $       5,712         $       1,261
Other comprehensive income (loss) (Note 2):
   Cumulative effect of change in accounting principle                                                    (779)
   Unrealized gain (loss) on interest rate instruments                            (6,335)                1,594
   Reclassification adjustment for amounts recognized in net income                  352                   205
                                                                           -------------         -------------
Comprehensive income (loss)                                                $        (271)        $       2,281
                                                                           =============         =============

Basic loss per common share (Note 10):
   Loss from continuing operations                                         $       (0.17)        $       (0.07)
                                                                           =============         =============
   Net loss                                                                $       (0.05)        $       (0.14)
                                                                           =============         =============

Diluted loss per common share (Note 10):
   Loss from continuing operations                                         $       (0.17)        $       (0.07)
                                                                           =============         =============
   Net loss                                                                $       (0.06)        $       (0.14)
                                                                           =============         =============

Cash dividends declared per common share                                   $         .51         $         .50
                                                                           =============         =============

Weighted average number of common shares outstanding                          50,980,530            50,291,596
                                                                           =============         =============

                                  See notes to consolidated financial statements.

                                                         4

                                               TAUBMAN CENTERS, INC.

                                       CONSOLIDATED STATEMENT OF CASH FLOWS
                                                  (in thousands)

                                                                                  Six Months Ended June 30
                                                                                 -------------------------
                                                                                 2002                2001
                                                                                 ----                ----
Cash Flows from Operating Activities:
   Income before minority and preferred interests                          $      25,871         $      21,055
   Adjustments to reconcile income before
    minority and preferred interests to net cash
    provided by operating activities:
      Depreciation and amortization of continuing operations                      40,921                31,037
      Depreciation and amortization of discontinued operations                       461                 1,436
      Charge related to technology investments                                     8,125
      Provision for losses on accounts receivable                                  1,768                 1,208
      Gains on sales of land                                                      (4,246)               (2,750)
      Gain on disposition of interests in centers                                (12,024)
      Cumulative effect of change in accounting principle                                                8,404
      Other                                                                        2,026                 1,380

      Increase (decrease) in cash attributable to changes
       in assets and liabilities:
        Receivables, deferred charges and other assets                             2,702                  (164)
        Accounts payable and other liabilities                                    (9,800)              (12,245)
                                                                           -------------         -------------
Net Cash Provided By Operating Activities                                  $      55,804         $      49,361
                                                                           -------------         -------------

Cash Flows from Investing Activities:
   Additions to properties                                                 $     (62,410)        $    (112,575)
   Proceeds from sales of land                                                     6,070                 3,490
   Investment in technology businesses                                            (4,090)               (2,890)
   Net proceeds from dispositions of interests in centers                         76,446
   Acquisition of interests in Unconsolidated Joint Ventures                     (45,203)
   Contributions to Unconsolidated Joint Ventures                                                      (28,679)
   Distributions from Unconsolidated Joint Ventures
     in excess of income before cumulative effect of change
     in accounting principle                                                      20,103                 8,182
                                                                           -------------         -------------
Net Cash Used in Investing Activities                                      $      (9,084)        $    (132,472)
                                                                           -------------         -------------

 Cash Flows from Financing Activities:
   Debt proceeds                                                           $      49,065         $     143,597
   Debt payments                                                                  (6,776)               (1,409)
   Debt issuance costs                                                                                  (3,210)
   Repurchases of common stock                                                                         (11,159)
   Distributions to minority and preferred interests                             (18,555)              (18,142)
   Issuance of stock pursuant to Continuing Offer                                  4,515                 8,264
   Cash dividends to Series A preferred shareowners                               (4,150)               (4,150)
   Cash dividends to common shareowners                                          (25,950)              (25,334)
                                                                           -------------         -------------
Net Cash Provided By (Used In) Financing Activities                        $      (1,851)        $      88,457
                                                                           -------------         -------------

Net Increase in Cash and Cash Equivalents                                  $      44,869         $       5,346

Cash and Cash Equivalents at Beginning of Period                                  27,789                18,842
                                                                           -------------         -------------

Cash and Cash Equivalents at End of Period                                 $      72,658         $      24,188
                                                                           =============         =============

                                  See notes to consolidated financial statements.

                                                         5

                                                TAUBMAN CENTERS, INC.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Interim Financial Statements

   Taubman  Centers,  Inc. (the Company or TCO), a real estate  investment  trust, or REIT, is the managing general
partner of The Taubman  Realty  Group  Limited  Partnership  (the  Operating  Partnership  or TRG).  The  Operating
Partnership  is  an  operating  subsidiary  that  engages  in  the  ownership,  management,  leasing,  acquisition,
development,   and  expansion  of  regional  retail  shopping   centers  and  interests   therein.   The  Operating
Partnership's  portfolio as of June 30, 2002 included 19 urban and suburban  shopping  centers in nine states.  Two
additional centers are under construction, one in Florida and one in Virginia.

   The  consolidated  financial  statements  of the Company  include all  accounts of the  Company,  the  Operating
Partnership and its consolidated  subsidiaries,  including The Taubman Company LLC (the Manager);  all intercompany
balances have been  eliminated.  Investments  in entities not  unilaterally  controlled by ownership or contractual
obligation (Unconsolidated Joint Ventures) are accounted for under the equity method.

   At June 30, 2002, the Operating  Partnership's  equity included three classes of preferred  equity (Series A, C,
and D) and  the  net  equity  of the  partnership  unitholders.  Net  income  and  distributions  of the  Operating
Partnership are allocable first to the preferred  equity  interests,  and the remaining  amounts to the general and
limited  partners  in the  Operating  Partnership  in  accordance  with their  percentage  ownership.  The Series A
Preferred  Equity is owned by the Company and is eliminated in  consolidation.  The Series C and Series D Preferred
Equity are owned by institutional  investors and have a fixed 9% coupon rate, no stated maturity,  sinking fund, or
mandatory redemption requirements.

   Because the net equity of the  partnership  unitholders  is less than zero,  the interest of the  noncontrolling
unitholders  is  presented as a zero  balance in the balance  sheet as of June 30, 2002 and December 31, 2001.  The
income  allocated to the  noncontrolling  unitholders is equal to their share of  distributions.  The net equity of
the Operating  Partnership is less than zero because of accumulated  distributions  in excess of net income and not
as a result of operating  losses.  Distributions to partners are usually greater than net income because net income
includes non-cash charges for depreciation and amortization.

   The Company's  ownership in the Operating  Partnership at June 30, 2002  consisted of a 61.8%  managing  general
partnership  interest,  as well as the  Series  A  Preferred  Equity  interest.  The  Company's  average  ownership
percentage  in the  Operating  Partnership  for the three  months ended June 30, 2002 and 2001 was 61.8% and 61.4%,
respectively.  During the six months ended June 30, 2002,  the  Company's  ownership in the  Operating  Partnership
increased to 61.8% due to  additional  interests  acquired in  connection  with the  Continuing  Offer (Note 9). At
June 30, 2002, the Operating  Partnership had 82,888,206 units of partnership  interest  outstanding,  of which the
Company owned  51,121,140.  Included in the total units  outstanding  are 174,058  units issued in connection  with
the 1999 acquisition of Lord Associates that currently do not receive allocations of income or distributions.

   The unaudited interim financial  statements should be read in conjunction with the audited financial  statements
and related  notes  included in the Company's  Annual Report on Form 10-K for the year ended  December 31, 2001. In
the opinion of management,  all adjustments  (consisting only of normal recurring adjustments) necessary for a fair
presentation  of the financial  statements for the interim  periods have been made. The results of interim  periods
are not necessarily indicative of the results for a full year.

   Certain prior year amounts have been reclassified to conform to 2002 classifications.

                                                         6

                                                TAUBMAN CENTERS, INC.
                               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 2 - Derivatives

   Effective January 1, 2001, the Company adopted SFAS 133 and its related  amendments and  interpretations,  which
establish accounting and reporting standards for derivative  instruments.  The Company uses derivative  instruments
primarily to manage  exposure to interest rate risks inherent in variable rate debt and  refinancings.  The Company
routinely uses cap, swap, and treasury lock agreements to meet these objectives.

   The initial  adoption of SFAS 133 on January 1, 2001  resulted in a reduction  to income of  approximately  $8.4
million as the  cumulative  effect of a change in  accounting  principle  and a  reduction  to Other  Comprehensive
Income  (OCI)  of $0.8  million.  These  amounts  represented  the  transition  adjustments  necessary  to mark the
Company's share of interest rate agreements to fair value as of January 1, 2001.

   In addition to the  transition  adjustment in first quarter 2001,  the Company  recognized in earnings its share
of net  unrealized  gains  (losses) of $0.8 million and $(0.7)  million during the three months ended June 30, 2002
and 2001,  and $1.8 million and $(2.5)  million  during the six months ended June 30, 2002 and 2001,  respectively,
due to changes in interest  rates and the  resulting  changes in value of the Company's  interest rate  agreements.
Of these amounts,  the changes in value of the Dolphin swap agreement  were  approximately  $1.0 million and $(0.6)
million  during the three months ended June 30, 2002 and 2001,  and $2.0 million and $(2.1)  million during the six
months ended June 30, 2002 and 2001.  The remainders represent the changes in time value of other instruments.

   In June 2002, the Company entered into swap  agreements  designated to hedge the Wellington  Green  construction
facility.  Under the swaps,  the LIBOR rate is swapped to a fixed rate of 2.5% from October 2002 through  September
2003,  4.35% from October  2003  through  September  2004,  and 5.25% from  October  2004  through  April 2005 on a
notional amount of $100 million.

   In May 2002,  the  Company  entered  into an  agreement  to swap  LIBOR to a fixed  rate of 4.125% on a notional
amount of $100 million  designated  to hedge the Willow Bend  construction  facility.  The term of the agreement is
November 2002 through June 2004.

   In March  2002,  the  Company  entered  into an  agreement  to swap  LIBOR to a fixed rate of 4.3% on a notional
amount of $100 million  designated  to hedge the Company's  $275 million line of credit.  This one-year swap begins
in November 2002.

   As of June 30, 2002,  the Company has $9.1  million of net  derivative  losses  included in  Accumulated  OCI as
follows:

      Hedged Items                                              OCI Amounts
      ------------                                              -----------
                                                               (in thousands)

      2001 Regency Square financing                          $         2,618
      Dolphin construction facility                                      149
      $275 million line of credit                                      1,455
      The Shops at Willow Bend construction facility                   1,124
      Westfarms refinancing                                            3,756
                                                             ---------------
                                                             $         9,102
                                                             ===============

   The realized loss on the Regency  Square  financing will be recognized as additional  interest  expense over the
ten-year term of the debt.  The loss on the hedge of the Dolphin Mall  construction  facility will be recognized as
a reduction of earnings through its 2002 maturity date.  Gains or losses on the swap designated to hedge  the  $275
million line of credit will be  recognized  as an adjustment  to  interest  expense  over  the  one-year  effective
period of the swap agreement, beginning November  2002.  Gains or losses on the  swap designated to hedge The Shops
at  Willow  Bend  construction facility will be recognized as adjustments to interest  expense over the term of the
swap agreement,  November 2002 through June 2004. A realized loss on the  derivative  used to hedge the refinancing
of the Westfarms  loan (Note 12 - Subsequent Events) will be recognized as a reduction of earnings through its July
2012  maturity  date.  The Company expects that approximately  $3.3 million will be reclassified  from  Accumulated
OCI and recognized as a reduction of earnings during the next twelve months.

                                                         7

                                               TAUBMAN CENTERS, INC.
                               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 3 - Acquisitions and Dispositions

   In May  2002,  the  Operating  Partnership  acquired  for $88  million a 50%  general  partnership  interest  in
SunValley  Associates,  a  California  general  partnership  that owns the  Sunvalley  shopping  center  located in
Concord,  California.  The $88 million  purchase  price consists of $28 million of cash and $60 million of existing
debt that  encumbers the property.  The  Company's  interest in the secured debt consists of a $55 million  primary
note  bearing  interest at LIBOR plus 0.92% and a $5 million note  bearing  interest at LIBOR plus 3.0%.  The notes
mature in September  2003 and have two  one-year  extension  options.  The center is also subject to a ground lease
that  expires in 2061.  The Manager has managed the  property  since its  development  and will  continue to do so.
Although the Operating  Partnership  purchased its interest in Sunvalley from an unrelated  third party,  the other
50% partner in the property is an entity owned and  controlled  by Mr. A. Alfred  Taubman,  the  Company's  largest
shareholder.

   Also in May 2002, the Company  purchased an additional  interest in Arizona Mills for  approximately $14 million
in cash plus the $19 million share of the debt that  encumbers the property.  The Company has a 50% interest in the
center as of June 30, 2002.

   In March 2002,  the Company  sold its  interest in La Cumbre  Plaza for $28  million.  In May 2002,  the Company
sold its interest in Paseo Nuevo for $48 million.  The centers were subject to ground leases and were  unencumbered
by debt.  The centers  were  purchased  in 1996 for a total of $59 million.  The  Company's  $2.0 million and $10.0
million  gains on the sale of La Cumbre Plaza and Paseo  Nuevo,  respectively,  differed  from the $6.1 million and
$13.4 million gains  recognized by the  Operating  Partnership  due to the Company's  $4.1 million and $3.4 million
additional bases in La Cumbre Plaza and Paseo Nuevo.

   The Company  used the net proceeds  from the sales of Paseo Nuevo and La Cumbre  Plaza to fund the  acquisitions
of Sunvalley and Arizona Mills, and, in July 2002, to pay down borrowings under the Company's lines of credit.

Note 4 - Tax Elections

   The Company's Taxable REIT  Subsidiaries are subject to corporate level income taxes,  which are provided for in
the  Company's  financial  statements.  The  Company's  deferred tax assets and  liabilities  reflect the impact of
temporary  differences  between the amounts of assets and  liabilities  for  financial  reporting  purposes and the
bases of such assets and liabilities as measured by tax laws. Deferred tax assets are reduced,  if necessary,  by a
valuation  allowance  to the amount  where  realization  is more  likely  than not assured  after  considering  all
available  evidence.   The  Company's  temporary   differences   primarily  relate  to  deferred  compensation  and
depreciation.  During the six months ended June 30, 2002,  the Company's  federal  income tax expense was zero as a
result of a net operating  loss incurred by its Taxable REIT  Subsidiaries.  As of June 30, 2002, the Company had a
net deferred tax asset of $4.4 million, after a valuation allowance of $7.9 million.

                                                         8

                                               TAUBMAN CENTERS, INC.
                               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 5 - Investments in Technology Businesses

   The Company owns an approximately  6.8% interest in MerchantWired,  LLC, a service company originally created to
provide internet and network  infrastructure  to shopping  centers and retailers.  During the six months ended June
30, 2002 and 2001,  the Company  recognized  its $1.8 million and $0.7 million share of  MerchantWired's  operating
losses,  respectively.  In May 2002,  the Company  invested an  additional  $4.1  million to satisfy the  Company's
guarantees  of  MerchantWired's  obligations  as required  under a proposed  sale of  MerchantWired.  In June 2002,
since  the  anticipated  sale  failed  to  close,  MerchantWired's  board of  directors  voted to cease  operations
effective  September  2002. As a result,  the Company  recorded a charge in the second quarter of 2002 to write-off
its remaining $5.8 million balance of its MerchantWired investment.

   The Company has an investment in  Fashionmall.com,  Inc., an e-commerce company originally  organized to market,
promote,  advertise,  and sell fashion  apparel and related  accessories  and products over the internet.  In 2001,
Fashionmall.com  significantly  scaled back its  operations  in  response to  decreasing  revenues  and  e-commerce
development  opportunities,  leading  its  management  to  conclude  that it should  seek  alternative  uses of its
significant  cash  resources.  In light of such  developments,  the Company  agreed to convert its preferred  stock
investment into 824,084 common shares in return for a commitment from  Fashionmall's  CEO and majority  shareholder
that on or before December 31, 2002,  Fashionmall will either consummate a transaction  resulting in a value to its
stockholders in excess of the value  deliverable to the  stockholders  upon its  liquidation,  consummate a plan of
liquidation,  or consummate  any other  transaction  that is reasonably  acceptable to the Company and the majority
shareholder.  Based upon the $3.92  trading price of the stock on the day the  preferred  investment  was exchanged
for common shares,  the Company  recognized a $2.3 million loss on its investment during the second quarter.  After
this charge,  the Company's  investment  was $3.2 million at June 30, 2002.  The $3.92 trading price  reflected the
$3.75 per share  dividend  declared by  Fashionmall.com,  which was paid in August  2002.  The receipt of this $3.1
million  dividend has reduced the Company's  investment to $0.1 million.  In future periods,  the Company will mark
this remaining investment in Fashionmall.com to market value.

                                                         9

                                               TAUBMAN CENTERS, INC.
                               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 6 - Investments in Unconsolidated Joint Ventures

   Following are the Company's  investments in  Unconsolidated  Joint  Ventures.  The Operating  Partnership is the
managing general partner or managing member in these Unconsolidated  Joint Ventures,  except for those denoted with
an (*).

                                                                                            Ownership as of
         Unconsolidated Joint Venture               Shopping Center                          June 30, 2002
        ------------------------------              ----------------                        ---------------

        Arizona Mills, L.L.C. *                     Arizona Mills                                50%
        Dolphin Mall Associates                     Dolphin Mall                                 50
           Limited Partnership
        Fairfax Company of Virginia, L.L.C.         Fair Oaks                                    50
        Forbes Taubman Orlando, L.L.C. *            The Mall at Millenia                         50
                                                     (under construction)
        Rich-Taubman Associates                     Stamford Town Center                         50
        SunValley Associates                        Sunvalley                                    50
        Tampa Westshore Associates                  International Plaza                          26
            Limited Partnership
        Taubman-Cherry Creek                        Cherry Creek                                 50
            Limited Partnership
        West Farms Associates                       Westfarms                                    79
        Woodland                                    Woodland                                     50

   In September  2001,  International  Plaza, a 1.3 million  square foot center,  opened in Tampa,  Florida.  As of
June 30, 2002, the Operating  Partnership  has a preferred  investment in  International  Plaza of $18 million,  on
which an annual  preferential  return of 8.25% will accrue.  In addition to the preferred return on its investment,
the Operating  Partnership  will receive a return of its  preferred  investment  before any available  cash will be
utilized for distributions to non-preferred partners.

   In March 2001,  Dolphin Mall, a 1.3 million  square foot value regional  center,  opened in Miami,  Florida.  As
of June 30, 2002, the Operating  Partnership  has a preferred  investment in Dolphin Mall of $26 million. The joint
venture  partner  in  Dolphin  Mall has  exercised  the  buy/sell  provision  in  the  joint  venture's partnership
agreement.  The Company  responded to the offer  indicating its  intent to  be  a purchaser rather than  a  seller,
although the transaction  has significant  contingencies,  including  reaching  agreement with the  banking  group.
Assuming this  transaction  occurs as anticipated  during the third quarter of 2002, it would result in the Company
acquiring  the  additional  interest  in  Dolphin  for   approximately   the joint  venture  partner's share of the
partnership debt and other  obligations.  The Company expects that its total  investment  in Dolphin Mall,  at that
point, will be approximately $268 million (Note 9).

   The Company is  currently  developing  The Mall at Millenia in Orlando,  Florida.  This 1.2 million  square foot
center will open in October 2002.

   In May 2002,  the Company  acquired an additional  13% interest in Arizona Mills and a 50% interest in Sunvalley
(Note 3).

   The Company's  carrying value of its Investment in  Unconsolidated  Joint Ventures differs from its share of the
deficiency in assets  reported in the combined  balance sheet of the  Unconsolidated  Joint Ventures due to (i) the
Company's cost of its investment in excess of the historical net book values of the  Unconsolidated  Joint Ventures
and (ii) the Operating  Partnership's  adjustments to the book basis,  including  intercompany  profits on sales of
services that are capitalized by the  Unconsolidated  Joint Ventures.  The Company's  additional basis allocated to
depreciable assets is recognized on a straight-line  basis over 40 years. The Operating  Partnership's  differences
in bases are amortized over the useful lives of the related assets.

                                                         10

                                               TAUBMAN CENTERS, INC.
                               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

   Combined  balance  sheet and  results  of  operations  information  are  presented  in the  following  table (in
thousands) for all Unconsolidated Joint Ventures,  followed by the Operating  Partnership's  beneficial interest in
the combined  information.  TRG's basis adjustments as of June 30, 2002 include $73 million and $11 million related
to the  acquisitions  of  interests  in  Sunvalley  and Arizona  Mills  (Note 3),  respectively,  representing  the
differences  between  the  acquisition  prices  and the book  values of the  ownership  interests  acquired.  These
amounts will be  depreciated  over the remaining  useful lives of the  underlying  assets.  Beneficial  interest is
calculated based on the Operating Partnership's ownership interest in each of the Unconsolidated Joint Ventures.

                                                                                June 30            December 31
                                                                                -------            -----------
                                                                                 2002                 2001
                                                                                 ----                 ----
Assets:
   Properties                                                              $   1,528,235         $   1,367,082
   Accumulated depreciation and amortization                                    (279,064)             (220,201)
                                                                           -------------         -------------
                                                                           $   1,249,171         $   1,146,881
   Cash and cash equivalents                                                      28,946                30,664
   Accounts and notes receivable                                                  15,927                20,302
   Deferred charges and other assets                                              29,505                29,290
                                                                           -------------         -------------
                                                                           $   1,323,549         $   1,227,137
                                                                           =============         =============
Liabilities and partnership equity:
   Notes payable                                                           $   1,345,251         $   1,154,141
   Other liabilities                                                             133,872               109,247
   TRG's partnership equity (accumulated deficiency in assets)                   (60,749)                  903
   Unconsolidated Joint Venture Partners'
     accumulated deficiency in assets                                            (94,825)              (37,154)
                                                                           -------------         -------------
                                                                           $   1,323,549         $   1,227,137
                                                                           =============         =============

TRG's partnership equity (accumulated deficiency in
   assets) (above)                                                         $     (60,749)        $         903
TRG basis adjustments, including elimination of intercompany
   profit                                                                        107,339                22,612
TCO's additional basis                                                           123,767               125,286
                                                                           -------------         -------------
Investment in Unconsolidated Joint Ventures                                $     170,357         $     148,801
                                                                           =============         =============

                                                         Three Months Ended                Six Months Ended
                                                               June 30                          June 30
                                                      --------------------------         ------------------------
                                                         2002            2001               2002           2001
                                                         ----            ----               ----           ----

Revenues                                             $    69,202      $    54,375       $   133,887     $   108,430
                                                     -----------      -----------       -----------     -----------
Recoverable and other operating expenses             $    27,754      $    19,946       $    50,155     $    38,406
Interest expense                                          19,550           17,570            37,732          36,160
Depreciation and amortization                             12,990            8,595            26,941          17,727
                                                     -----------      -----------       -----------     -----------
Total operating costs                                $    60,294      $    46,111       $   114,828     $    92,293
                                                     -----------      -----------       -----------     -----------
Income before cumulative effect of change
   in accounting principle                           $     8,908      $     8,264       $    19,059     $    16,137
Cumulative effect of change in accounting
   principle                                                                                                  3,304
                                                     -----------      -----------       -----------     -----------
Net income                                           $     8,908      $     8,264       $    19,059     $    12,833
                                                     ===========      ===========       ===========     ===========

Net income allocable to TRG                          $     5,049      $     4,496       $    10,636     $     6,890
Cumulative effect of change in accounting
   principle allocable to TRG                                                                                 1,612
Realized intercompany profit                                 450            1,478             1,759           3,087
Depreciation of TCO's additional basis                      (759)            (759)           (1,518)         (1,518)
                                                     -----------      -----------       -----------     -----------
Equity in income before cumulative effect of
   change in accounting principle of
   Unconsolidated Joint Ventures                     $     4,740      $     5,215       $    10,877     $    10,071
                                                     ===========      ===========       ===========     ===========

Beneficial interest in Unconsolidated
  Joint Ventures' operations:
    Revenues less recoverable and other
      operating expenses                             $    22,193      $    19,653       $    46,875     $    39,705
    Interest expense                                      (9,771)          (9,243)          (18,794)        (19,059)
    Depreciation and amortization                         (7,682)          (5,195)          (17,204)        (10,575)
                                                     -----------      -----------       -----------     -----------
    Income before cumulative effect of change
      in accounting principle                        $     4,740      $     5,215       $    10,877     $    10,071
                                                     ===========      ===========       ===========     ===========

                                                         11

                                                TAUBMAN CENTERS, INC.

                               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 7 - Beneficial Interest in Debt and Interest Expense

   In March 2002, the Company  exercised its option to extend the maturity of the Great Lakes Crossing  mortgage to
April 2003.

   The Operating  Partnership's  beneficial interest in the debt, capital lease obligations,  capitalized interest,
and interest expense of its consolidated  subsidiaries and its  Unconsolidated  Joint Ventures is summarized in the
following table. The Operating  Partnership's  beneficial interest in consolidated  subsidiaries  excludes debt and
interest relating to the minority  interests in Great Lakes Crossing,  MacArthur Center, and The Mall at Wellington
Green.

                                                 At 100%                         At Beneficial Interest
                                     ------------------------------- ----------------------------------------------
                                                    Unconsolidated                   Unconsolidated
                                     Consolidated       Joint        Consolidated        Joint
                                     Subsidiaries      Ventures      Subsidiaries       Ventures         Total
                                     ------------- ----------------- -------------- ----------------- -------------
                                                               (in thousands of dollars)

Debt as of:
   June 30, 2002                        1,465,530        1,345,251      1,386,439           673,969      2,060,408
   December 31, 2001                    1,423,241        1,154,141      1,345,086           562,811      1,907,897

Capital Lease Obligations:
   June 30, 2002                              256               --            218                --            218
   December 31, 2001                          304               64            259                40            299

Capitalized Interest:
   Six months ended June 30, 2002           2,571            2,033          2,516             1,017          3,533
   Six months ended June 30, 2001          16,396            9,662         16,300             3,940         20,240

Interest Expense:
   Six months ended June 30, 2002          41,393           37,732         38,916            18,794         57,710
   Six months ended June 30, 2001          30,180           36,160         27,597            19,059         46,656

Note 8 - Incentive Option Plan

   The  Operating  Partnership  has an  incentive  option plan for  employees  of the  Manager.  Incentive  options
generally  become  exercisable  to the extent of  one-third  of the units on each of the third,  fourth,  and fifth
anniversaries of the date of grant.  Options expire ten years from the date of grant.  The Operating  Partnership's
units issued in  connection  with the incentive  option plan are  exchangeable  for shares of the Company's  common
stock under the  Continuing  Offer (Note 9). In December  2001,  the Company  amended the plan to allow vested unit
options to be  exercised by  tendering  mature  units with a market  value equal to the exercise  price of the unit
options.

   In December 2001, the Company's chief  executive  officer  executed a unit option deferral  election with regard
to  options  for  approximately  three  million  units at an  exercise  price of  $11.14  per unit due to expire in
November  2002.  This election will allow him to defer the receipt of the net units he would receive upon exercise.
These deferred option units will remain in a deferred  compensation  account until Mr. Taubman's  retirement or ten
years from the date of exercise.  Beginning  with the ten year  anniversary  of the date of exercise,  the deferred
partnership  units will be released in ten annual  installments.  In April 2002, Mr. Taubman  exercised options for
1.5 million  units by tendering  1.1 million  mature units and deferring the receipt of 0.4 million units under the
unit option  deferral  election.  As the Company  declares  distributions,  the deferred option units receive their
proportionate share of the distributions in the form of cash payments.

   Excluding the options  exercised by Mr. Taubman,  there were options for 386,156 units exercised  during the six
months ended June 30, 2002 at an average  exercise  price of $11.69 per unit.  During the six months ended June 30,
2001,  options for 744,454  units were  exercised  at a weighted  average  price of $11.10 per unit.  There were no
options  granted or cancelled  during the six months ended June 30, 2002 and 2001. As of June 30, 2002,  there were
vested  options for 4.1 million units with a weighted  average  exercise  price of $11.48 per unit and  outstanding
options  (including  unvested  options) for a total of 4.2 million units with a weighted  average exercise price of
$11.44 per unit.

                                                         12

                                                TAUBMAN CENTERS, INC.
                               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

   Currently,  options for 5.4 million  Operating  Partnership  units may be issued under the plan,  4.2 million of
which  have  been  issued.  When  the  holder  of an  option  elects  to pay the  exercise  price  by  surrendering
partnership  units,  only those units issued to the holder in excess of the number of units surrendered are counted
for purposes of determining the remaining number of units available for future grants under the plan.

   For any future option  grants,  the Company  intends to recognize  compensation  expense based on the fair value
method of FAS 123, "Accounting for Stock-Based Compensation".

Note 9 - Commitments and Contingencies

   At the time of the Company's  initial public offering (IPO) and  acquisition of its partnership  interest in the
Operating  Partnership,  the Company entered into an agreement (the Cash Tender  Agreement) with A. Alfred Taubman,
who owns an interest in the Operating  Partnership,  whereby he has the annual right to tender to the Company units
of partnership  interest in the Operating  Partnership  (provided that the aggregate value is at least $50 million)
and cause the Company to purchase the tendered  interests  at a purchase  price based on a market  valuation of the
Company on the trading  date  immediately  preceding  the date of the tender.  The Company  will have the option to
pay for these interests from available  cash,  borrowed funds, or from the proceeds of an offering of the Company's
common  stock.  Generally,  the Company  expects to finance these  purchases  through the sale of new shares of its
stock.  The  tendering  partner  will bear all market risk if the market price at closing is less than the purchase
price and will bear the costs of sale.  Any proceeds of the  offering in excess of the  purchase  price will be for
the sole benefit of the Company.  At A. Alfred  Taubman's  election,  his family and certain others may participate
in tenders.

   Based on a market value at June 30, 2002 of $15.25 per common  share,  the  aggregate  value of interests in the
Operating  Partnership that may be tendered under the Cash Tender  Agreement was  approximately  $376 million.  The
purchase of these  interests at June 30, 2002 would have resulted in the Company  owning an additional 30% interest
in the Operating Partnership.

   The  Company has made a  continuing,  irrevocable  offer to all present  holders  (other than  certain  excluded
holders,  including A. Alfred  Taubman),  assignees of all present  holders,  those future  holders of  partnership
interests  in the  Operating  Partnership  as the  Company  may,  in its sole  discretion,  agree to include in the
continuing  offer,  and all existing and future optionees under the Operating  Partnership's  incentive option plan
to exchange shares of common stock for partnership  interests in the Operating  Partnership (the Continuing Offer).
Under the  Continuing  Offer  agreement,  one unit of  partnership  interest is  exchangeable  for one share of the
Company's common stock.

   In April  2001,  the  Operating  Partnership's  $10 million  investment  in Swerdlow  Real  Estate  Group,  Inc.
(Swerdlow)  was  converted  into a loan which bore  interest  at 12% and  matured in  December  2001.  This loan is
currently  delinquent.  All interest due through the December  maturity date was received.  The Company has filed a
lawsuit  seeking  to  recover  the  principal  amount  and  all  accrued  and  unpaid  interest  under the note due
from   Swerdlow.  Swerdlow  has  filed  its  answer  which  seeks a  recision  of  the  note  and   the  return  of
all amounts paid under or in connection  with the note, which total approximately $2.5 million paid to the  Company
through December 31, 2001.  In the event the note was  rescinded, the Company's  original  investment  in  Swerdlow
would be restored.  While the Company  believes that it will  ultimately  prevail in collecting all amounts due and
owing under the note, the lawsuit is in its  preliminary  stages and no  predictions  can be made as to the outcome
of the lawsuit.

   On August 13,  2002,  the Company  received a complaint  naming it as a defendant  in a lawsuit  brought by SREG
Dolphin Mall,  Inc., the Company's  Partner in Dolphin Mall,  seeking  damages in excess of $40 million for alleged
breaches  by the  Company  of  the  Second  Amended  Partnership  Agreement  of  Dolphin  Mall  Associates  Limited
Partnership.  The Company  believes the allegations in the complaint are without merit and will  vigorously  defend
the lawsuit.  Since the lawsuit is in its  preliminary  stages,  no predictions  can be made at this time as to its
ultimate outcome.

   In  addition,  the  Company is  currently  involved  in certain  litigation  arising in the  ordinary  course of
business.  Management  believes  that this  litigation  will not have a material  adverse  effect on the  Company's
financial statements.

   Payments  of  principal  and  interest  on the loans in the  following  table are  guaranteed  by the  Operating
Partnership as of June 30, 2002. All of the loan  agreements  provide for a reduction of the amounts  guaranteed as
certain center performance and valuation criteria are met.

                                                         13

                                                TAUBMAN CENTERS, INC.
                               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

                                                      TRG's           Amount of
                                                   beneficial       loan balance      % of loan
                                                   interest in       guaranteed        balance        % of interest
                               Loan balance       loan balance         by TRG        guaranteed        guaranteed
Center                         as of 6/30/02      as of 6/30/02     as of 6/30/02      by TRG            by TRG
------                         -------------      -------------     -------------      ------            ------
                                         (in millions of dollars)
Dolphin Mall                        183.0             91.5              91.5               50%             100%
Great Lakes Crossing                149.7            127.2             149.7              100%             100%
International Plaza                 187.1             49.6              93.6               50% (1)          50% (1)
The Mall at Millenia                 92.1             46.1              23.0               25%              25%
The Mall at Wellington Green        137.7            123.9             137.7              100%             100%
The Shops at Willow Bend            197.8            197.8             197.8              100%             100%

(1)      An investor in the International Plaza venture has indemnified the Operating Partnership to the  extent of
         25% of the amounts guaranteed.

   The Company  currently  anticipates  that a partial  prepayment  of  principal  will be  necessary to extend the
October 2002 maturity date on the Dolphin Mall construction loan.

   The Company has a $0.5 million  investment in Constellation  Real  Technologies LLC  (Constellation),  a company
that forms and  sponsors  real  estate  related  internet,  e-commerce,  and  telecommunications  enterprises.  The
Company   has  a  capital  commitment  for approximately  $0.8  million  in funding   for   Constellation  although
any additional  contributions would be restricted to a maximum of $0.2 million in 2002 and $0.3 million in 2003.

Note 10 - Earnings Per Share

   Basic  earnings per common share are  calculated by dividing  earnings  available to common  shareowners  by the
average  number of common  shares  outstanding  during each  period.  For diluted  earnings per common  share,  the
Company's  ownership  interest in the Operating  Partnership  (and  therefore  earnings) are adjusted  assuming the
exercise of all options for units of partnership interest under the Operating  Partnership's  incentive option plan
having  exercise  prices less than the average market value of the units using the treasury  stock method.  Diluted
earnings per share of future periods also reflect the net units deferred  under the unit option  deferral  election
(Note 8). For the three and six months  ended June 30,  2001,  options for 0.3  million  and 1.1  million  units of
partnership  interest  with  average  exercise  prices of $13.56 per unit and $13.00 per unit,  respectively,  were
excluded  from the  computations  of diluted  earnings per unit  because the exercise  prices were greater than the
average market prices for the periods  calculated.  There were no options  excluded from the computation of diluted
earnings per unit for the three or six months ended June 30, 2002.

                                                                 Three Months                    Six Months
                                                                 Ended June 30                  Ended June 30
                                                          ---------------------------   ---------------------------
                                                              2002             2001          2002          2001
                                                              ----             ----          ----          ----
                                                                       (in thousands, except share data)
Income (loss) from continuing operations allocable to
  common shareowners (Numerator):
   Net income (loss) allocable to common shareowners      $      (304)   $     1,610    $    (2,588)   $     (7,039)
   Common shareowners' share of discontinued operations        (5,477)          (518)        (6,252)         (1,274)
   Common shareowners' share of cumulative effect
      of change in accounting principle                                                                       4,924
                                                          -----------    -----------     ----------    ------------
   Basic income (loss) from continuing operations         $    (5,781)   $     1,092     $   (8,840)   $     (3,389)
   Effect of dilutive options                                                    (86)           (42)           (114)
                                                          -----------    -----------     ----------    ------------
   Diluted income (loss) from continuing operations       $    (5,781)   $     1,006     $   (8,882)   $     (3,503)
                                                          ===========    ===========     ==========    ============

Shares (Denominator) - basic and diluted                   51,076,901     50,181,946     50,980,530      50,291,596
                                                          ===========    ===========     ==========    ============

Income (loss) from continuing operations per common
  share - basic and diluted                               $      (.11)   $       .02     $     (.17)  $        (.07)
                                                          ===========    ===========     ==========   =============

Per share effects of discontinued operations and
   cumulative effect of change in accounting principle:
     Discontinued operations per common share-basic       $       .11    $       .01     $      .12    $        .03
                                                          ===========    ===========     ==========    ============
     Discontinued operations per common share-diluted     $       .10    $       .01     $      .12    $        .02
                                                          ===========    ===========     ==========    ============
     Cumulative effect of change in accounting
      principle per common share - basic and diluted                                                   $       (.10)
                                                                                                       ============

                                                         14

                                               TAUBMAN CENTERS, INC.
                               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 11 - Cash Flow Disclosures and Noncash Investing and Financing Activities

   Interest on  mortgage  notes and other  loans paid  during the six months  ended June 30, 2002 and 2001,  net of
amounts  capitalized of $2.6 million and $16.4  million,  was $38.2 million and $27.9  million,  respectively.  The
following non-cash investing and financing activities occurred during the six months ended June 30, 2002 and 2001:

                                                                                Six Months ended June 30
                                                                                ------------------------
                                                                                2002                  2001
                                                                                ----                  ----
                                                                                      (in thousands)

Non-cash additions to properties                                                                 $    8,473
Partnership units released                                                 $    1,008                   878
Non-cash contributions to Unconsolidated Joint Ventures                                               3,778

   Non-cash  additions to properties  primarily  represent  accrued  construction and tenant allowance costs of new
centers and development projects.

Note 12 - Subsequent Events

   In July 2002,  the Company  closed on a $210 million  ten-year  mortgage on Westfarms at an all-in rate of 6.4%.
Proceeds  were used to pay off the previous  $155 million debt on Westfarms.  The  Operating  Partnership  used its
$37 million share of distributed excess proceeds to pay down its revolving credit facilities.

   In  August 2002, Stamford Town Center extended its $76 million loan to August 2004.  Also in August, the Company
closed on a $105 million construction loan for Stony  Point Fashion Park.  This  loan bears interest  at LIBOR plus
1.85% and has an initial term of three years with  two  one-year  extension  options.   The  Operating  Partnership
guarantees 100% of principal and interest on this loan; the amounts guaranteed will be  reduced as  certain  center
performance and valuation criteria are met.

                                                         15

Item 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

   The following  Management's  Discussion and Analysis of Financial  Condition and Results of Operations  contains
various  "forward-looking  statements" within the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities  Exchange Act of 1934, as amended.  These  forward-looking  statements  represent
the Company's  expectations or beliefs  concerning  future events,  including the following:  statements  regarding
future  developments and joint ventures,  rents and returns,  statements  regarding the continuation of trends, and
any  statements  regarding the  sufficiency  of the Company's  cash balances and cash  generated from operating and
financing  activities for the Company's  future  liquidity and capital  resource needs.  The Company  cautions that
although  forward-looking  statements reflect the Company's good faith beliefs and best judgment based upon current
information,  these  statements  are  qualified  by important  factors  that could cause  actual  results to differ
materially  from those in the  forward-looking  statements,  including  those  risks,  uncertainties,  and  factors
detailed  from time to time in reports  filed with the SEC,  and in  particular  those set forth under the headings
"General  Risks of the  Company" and  "Environmental  Matters" in the  Company's  Annual  Report on Form 10-K.  The
following  discussion  should be read in conjunction with the  accompanying  Consolidated  Financial  Statements of
Taubman Centers, Inc. and the Notes thereto.

General Background and Performance Measurement

   The Company owns a managing  general  partner's  interest in The Taubman Realty Group Limited  Partnership  (the
Operating  Partnership  or  TRG),  through  which  the  Company  conducts  all of  its  operations.  The  Operating
Partnership  owns,  develops,  acquires,  and operates  regional  shopping  centers  nationally.  The  Consolidated
Businesses  consist of shopping  centers that are  controlled by ownership or  contractual  agreement,  development
projects for future regional  shopping  centers,  and The Taubman Company LLC (the Manager).  Shopping centers that
are not  controlled and that are owned through joint ventures with third parties  (Unconsolidated  Joint  Ventures)
are accounted for under the equity method.

   The operations of the shopping  centers are best understood by measuring their  performance as a whole,  without
regard to the Company's  ownership interest.  Consequently,  in addition to the discussion of the operations of the
Consolidated  Businesses,  the  operations of the  Unconsolidated  Joint  Ventures are presented and discussed as a
whole.

   During  2001,  the Company  opened four new shopping  centers  (Results of  Operations  - New Center  Openings).
During  2002,  the Company  acquired an interest in Sunvalley  and sold its  interests in La Cumbre Plaza and Paseo
Nuevo  (Results  of  Operations  -  Acquisitions  and  Dispositions).  Additional  2002  and 2001  statistics  that
exclude the new centers,  Sunvalley,  La Cumbre Plaza,  and Paseo Nuevo are provided to present the  performance of
comparable centers in the Company's continuing operations.

Seasonality

   The  regional  shopping  center  industry is seasonal in nature,  with mall tenant  sales  highest in the fourth
quarter due to the Christmas season,  and with lesser,  though still  significant,  sales  fluctuations  associated
with the Easter  holiday and  back-to-school  events.  While minimum rents and recoveries are generally not subject
to seasonal  factors,  most leases are  scheduled  to expire in the first  quarter,  and the majority of new stores
open  in the  second  half of the  year  in  anticipation  of the  Christmas  selling  season.  Additionally,  most
percentage  rents are recorded in the fourth  quarter.  Accordingly,  revenues and  occupancy  levels are generally
highest in the fourth quarter.

                                                         16

   The following table summarizes  certain  quarterly  operating data for 2001 and the first and second quarters of
2002.

                                     1st            2nd           3rd           4th                          1st           2nd
                                   Quarter        Quarter       Quarter       Quarter         Total        Quarter       Quarter
                                     2001          2001           2001          2001          2001           2002          2002
                                 ------------- -------------- ------------- ------------- -------------- ------------- -------------
                                                                            thousands)
                                                              (in
Mall tenant sales                     $570,223      $605,945       $617,805    $1,003,894    $2,797,867       $645,317      $669,448
Revenues                               132,903       137,964        139,640       169,330       579,837        155,071       159,273
Occupancy:
     Average                            87.0%         85.5%          84.0%         83.7%         84.9%          83.3%         83.7%
     Ending                             85.1          85.6           83.0          84.0          84.0           83.3          84.2
     Average-comparable (1)             88.2          87.7           87.3          88.3          87.9           87.2          87.4
     Ending-comparable (1)              88.5          87.4           87.4          88.6          88.6           86.8          87.9
Leased space:
     All centers                        90.8          90.0           88.0          87.7          87.7           87.4          87.6
     Comparable (1)                     92.2          91.6           91.4          91.6          91.6           91.5          91.4

(1)      Excludes centers that opened in 2001, La Cumbre Plaza, Paseo Nuevo, and Sunvalley.

   Because the  seasonality  of sales  contrasts with the generally  fixed nature of minimum rents and  recoveries,
mall tenant occupancy costs (the sum of minimum rents,  percentage rents and expense recoveries)  relative to sales
are  considerably  higher in the first three  quarters than they are in the fourth  quarter.  The  following  table
summarizes occupancy costs,  excluding utilities,  for mall tenants as a percentage of sales for 2001 and the first
and second quarters of 2002:

                                         1st           2nd          3rd          4th                        1st          2nd
                                       Quarter       Quarter      Quarter      Quarter       Total        Quarter      Quarter
                                         2001         2001         2001         2001         2001          2002          2002
                                     ------------- ------------ ------------ ------------ ------------ -------------- -----------

Minimum rents                            11.2%         10.5%        11.2%         8.3%        10.0%        12.1%          11.9%
Percentage rents                           0.3          0.1          0.1          0.4          0.2          0.3            0.0
Expense recoveries                        5.0           5.1          4.8          3.6          4.5          5.4            5.7
                                         ----          ----         ----         ----         ----         ----           ----
Mall tenant occupancy costs              16.5%         15.7%        16.1%        12.3%        14.7%        17.8%          17.6%
                                         ====          ====         ====         ====         ====         ====           ====

Current Operating Trends

   In 2001 and into 2002,  the  regional  shopping  center  industry  has been  affected  by the  softening  of the
national  economic  cycle.  Economic  pressures that affect  consumer  confidence,  job growth,  energy costs,  and
income gains can affect  retail sales growth and impact the  Company's  ability to lease  vacancies  and  negotiate
rents at  advantageous  rates. A number of regional and national  retailers have announced  store closings or filed
for  bankruptcy.  During the first six months of 2002,  1.1% of the Company's  tenants sought the protection of the
bankruptcy laws,  compared to 3.4% in the comparable  period of 2001. The impact of a soft economy on the Company's
current  results  of  operations  can be  moderated  by lease  cancellation  income,  which  tends to  increase  in
down-cycles of the economy.

   In addition to overall  economic  pressures,  the events of September  11 had a negative  impact on tenant sales
subsequent  to  September.  Tenant sales per square foot in the second  quarter of 2002  decreased by 2.2% compared
to the same period in 2001, an  improvement  on the 3.8% and 3.9%  year-over-year  decreases  experienced in fourth
quarter  2001 and  first  quarter  2002,  respectively.  Negative  sales  trends  directly  impact  the  amount  of
percentage  rents  certain  tenants and anchors pay. The effects of declines in sales  experienced  during 2001 and
2002 on the Company's  operations are moderated by the relatively minor share of total rents  (approximately  three
percent)  percentage rents represent.  However,  if lower levels of sales were to continue,  the Company's  ability
to lease vacancies and negotiate rents at advantageous rates could be adversely affected.

   Occupancy trends showed some improvement in second quarter 2002, in which  comparable  center average  occupancy
declined 0.3% from second  quarter 2001,  compared to the first quarter 2002  occupancy  decline of 1.0%.  Based on
the  Company's  expectations  as to the timing of  openings  and  closings  of  tenants,  the  Company  anticipates
continuing modest improvement in comparable year over year average occupancy through the end of the year.

                                                         17

   The tragic events of September 11 have also had an impact on the Company's insurance  coverage.  The Company had
coverage for terrorist  acts in its policies that expired in April 2002.  However,  such coverage was excluded from
its standard  property  policies at renewal.  The Company has obtained a separate policy although with lower limits
than the prior coverage for terrorist acts, see "Liquidity and Capital Resources-Covenants and Commitments".

   The Company's  premiums,  including the cost of a separate  terrorist  policy,  have  increased by over 100% for
property  coverage and over 25% for liability  coverage.  These  increases will impact the Company's  annual common
area  maintenance  rates paid by the Company's  tenants by about 55 cents per square foot.  Total  occupancy  costs
paid by tenants signing leases in the Company's traditional centers are on average about $70 per square foot.

Rental Rates

   Annualized  average base rent per square foot for all mall tenants at the  Company's 14  comparable  centers was
$41.96 for the three months ended June 30,  2002,  compared to $41.12 for the three months ended June 30, 2001.  As
leases have expired in the shopping  centers,  the Company has  generally  been able to rent the  available  space,
either to the existing  tenant or a new tenant,  at rental rates that are higher than those of the expired  leases.
In periods of increasing  sales,  rents on new leases will tend to rise as tenants'  expectations  of future growth
become  more  optimistic.  In  periods of slower  growth or  declining  sales,  such as the  Company  is  currently
experiencing,  rents on new leases will grow more slowly or may decline for the opposite  reason.  However,  center
revenues  nevertheless  increase as older leases roll over or are  terminated  early and  replaced  with new leases
negotiated at current rental rates that are usually higher than the average rates for existing leases.

   Average  base rent per square  foot on 259  thousand  square feet of tenant  space  opened in the  Company's  14
comparable  centers was $43.59 for the three months  ended June 30, 2002,  compared to average base rent per square
foot of $39.30 on 183  thousand  square  feet of tenant  space that closed  during the same  period,  reflecting  a
spread of $4.29 per square foot between the opening and closing  average  rent.  This spread may not be  indicative
of future  periods,  as this  statistic  can vary  significantly  from  quarter to quarter  depending  on the total
amount, location, and average size of tenant space opening and closing in the period.

   Generally,  the annual rent spread between  opening and closing stores has been in the Company's  historic range
of $5.00 to $10.00 per square foot.  This  statistic is difficult to predict in part because the Company's  leasing
policies and practices may result in early lease  terminations  with actual  average  closing rents per square foot
which may vary from the average rent per square foot of scheduled lease expirations.

Results of Operations

New Center Openings

   In March  2001,  Dolphin  Mall,  a 1.3 million  square foot value  regional  center,  opened in Miami,  Florida.
Dolphin Mall is a 50% owned  Unconsolidated  Joint  Venture and is accounted for under  the equity   method.  As of
June 30, 2002, the Operating  Partnership  has a preferred  investment in Dolphin  Mall of $26 million.  The  joint
venture  partner  in  Dolphin  Mall has  exercised  the  buy/sell  provision  in  the  joint  venture's partnership
agreement.  The Company  responded to the offer  indicating its  intent to  be  a purchaser rather than  a  seller,
although the transaction  has significant  contingencies,  including  reaching  agreement with the  banking  group.
Assuming this  transaction  occurs as anticipated  during the third quarter of 2002, it would result in the Company
acquiring  the  additional  interest  in  Dolphin  for   approximately   the joint  venture  partner's share of the
partnership debt and other  obligations.  The Company expects that its total  investment in Dolphin Mall,  at  that
point, will be approximately $268 million (Note 9 to Consolidated Financial Statements).

   Dolphin Mall is subject to annual special tax  assessments by a local community  development  district (CDD) for
certain  infrastructure  improvements  on the  property.  In the first  quarter  of 2002,  the CDD  refinanced  its
outstanding  bonds to extend the term from 20 years to 30 years and to reduce the interest  rate. In addition,  the
first annual  assessment  begins in 2002 rather than in 2001,  resulting  in a reversal of $2.8 million  previously
expensed.  The annual  assessments  will be based on  allocations  of the cost of the  infrastructure  between  the
properties that benefit.  Presently,  the total allocation of cost to Dolphin Mall is estimated to be approximately
$65.3 million with a first annual  assessment of  approximately  $3.0 million.  A portion of these  assessments  is
expected to be recovered from tenants.

   The Shops at Willow Bend, a wholly  owned 1.5 million  square foot  regional  center,  opened  August 3, 2001 in
Plano, Texas.

                                                         18

   International  Plaza,  a 1.25  million  square  foot  regional  center,  opened  September  14,  2001 in  Tampa,
Florida.  The Company has an  approximately  26%  ownership  interest in the center and  accounts  for it under the
equity  method.  The  Operating  Partnership  is  entitled to a preferred  return on  approximately  $18 million of
equity contributions as of June 2002, which were used to fund construction costs.

   The Mall at Wellington  Green, a 1.3 million square foot regional center,  opened October 5, 2001 in Wellington,
Florida.  The  center  is owned by a joint  venture  in  which  the  Operating  Partnership  has a 90%  controlling
interest.

   The return for the three  traditional  centers is expected to be  approximately  8% in 2002. The  performance of
Dolphin Mall  continues to be adversely  affected by slower than expected  lease up, rental  concessions  and lower
than expected  expense  recoveries.  The Company expects the 2002 return on Dolphin Mall to be  approximately  4.5%
on  its  investment  including   the   additional  interest  that  the  Company  anticipates  acquiring   in    the
third quarter of 2002.  However, considering the opportunities for growth, the Company anticipates that the returns
on Dolphin Mall will double over the next three to  five years. Estimates  regarding  returns  are  forward-looking
statements  and certain significant  factors could cause the actual results to differ materially, including but not
limited to: 1) actual results  of  negotiations  with  tenants,  2)  timing of  tenant openings, and 3) early lease
terminations  and bankruptcies.

Acquisitions and Dispositions

   In May  2002,  the  Operating  Partnership  acquired  for $88  million a 50%  general  partnership  interest  in
SunValley  Associates,  a  California  general  partnership  that owns the  Sunvalley  shopping  center  located in
Concord,  California.  The $88 million  purchase price consisted of $28 million of cash and $60 million of existing
debt that encumbers the property.  The Company's  interest in the secured debt  consisted of a $55 million  primary
note  bearing  interest at LIBOR plus 0.92% and a $5 million note  bearing  interest at LIBOR plus 3.0%.  The notes
mature in September  2003 and have two  one-year  extension  options.  The center is also subject to a ground lease
that expires in 2061. The Manager has managed the property since its  development  and is continuing to do so after
the  acquisition.  Although the Operating  Partnership  purchased its interest in Sunvalley from an unrelated third
party,  the other 50% partner in the  property is an entity  owned and  controlled  by Mr. A. Alfred  Taubman,  the
Company's largest shareholder.

   In May 2002,  the Company  purchased an additional  interest in Arizona Mills for  approximately  $14 million in
cash plus the $19 million  share of the debt that  encumbers  the  property.  The Company has a 50% interest in the
center as of June 30, 2002.

   In March 2002,  the Company  sold its  interest in La Cumbre  Plaza for $28  million.  In May 2002,  the Company
sold its interest in Paseo Nuevo for $48 million.  The centers were subject to ground  leases and are  unencumbered
by debt.  The centers  were  purchased  in 1996 for a total of $59 million.  The  Company's  $2.0 million and $10.0
million  gains on the sale of La Cumbre Plaza and Paseo  Nuevo,  respectively,  differed  from the $6.1 million and
$13.4 million gains  recognized by the  Operating  Partnership  due to the Company's  $4.1 million and $3.4 million
additional bases in La Cumbre Plaza and Paseo Nuevo.

   The Company  used the net proceeds  from the sales of Paseo Nuevo and La Cumbre  Plaza to fund the  acquisitions
of Sunvalley and Arizona  Mills,  and, in July 2002, to pay down  borrowings  under the Company's  lines of credit.
The Company  expects that these  transactions  will have a slightly  accretive  effect on Funds from  Operations in
2002.  This is a  forward-looking  statement  and certain  significant  factors  could  cause the actual  effect to
differ materially, including the actual operations of the centers.

Note Receivable

   In April  2001,  the  Operating  Partnership's  $10 million  investment  in Swerdlow  Real  Estate  Group,  Inc.
(Swerdlow)  was  converted  into a loan which bore  interest  at 12% and  matured in  December  2001.  This loan is
currently  delinquent.  All interest due through the December  maturity date was received.  The Company has filed a
lawsuit  seeking to recover the principal  amount and all accrued and unpaid  interest under the note. Swerdlow has
filed  its  answer  which  seeks  a  recision  of  the  note and  the  return  of  all  amounts  paid  under  or in
connection  with the note, which total approximately $2.5 million paid to the  Company  through  December 31, 2001.
In  the  event  the  note  was rescinded, the Company' original investment in Swerdlow would be restored. While the
Company  believes that it will  ultimately  prevail in collecting  all  amounts  due and  owing under the note, the
lawsuit  is in its  preliminary stages  and no  predictions  can  be  made  as  to  the  outcome of the lawsuit. An
affiliate of Swerdlow is a partner in the Dolphin Mall joint venture.

                                                         19

Investments in Technology Businesses

   The Company owns an approximately  6.8% interest in MerchantWired,  LLC, a service company originally created to
provide internet and network  infrastructure  to shopping  centers and retailers.  During the six months ended June
30, 2002 and 2001,  the Company  recognized  its $1.8 million and $0.7 million share of  MerchantWired's  operating
losses,  respectively.  In May 2002,  the Company  invested an  additional  $4.1  million to satisfy the  Company's
guarantees  of  MerchantWired's  obligations  as required  under a proposed  sale of  MerchantWired.  In June 2002,
since  the  anticipated  sale  failed  to  close,  MerchantWired's  board of  directors  voted to cease  operations
effective  September  2002. As a result,  the Company  recorded a charge in the second quarter of 2002 to write-off
its remaining $5.8 million balance of its MerchantWired investment.

   The Company has an investment in  Fashionmall.com,  Inc., an e-commerce company originally  organized to market,
promote,  advertise,  and sell fashion  apparel and related  accessories  and products over the internet.  In 2001,
Fashionmall.com  significantly  scaled back its  operations  in  response to  decreasing  revenues  and  e-commerce
development  opportunities,  leading  its  management  to  conclude  that it should  seek  alternative  uses of its
significant  cash  resources.  In light of such  developments,  the Company  agreed to convert its preferred  stock
investment into 824,084 common shares in return for a commitment from  Fashionmall's  CEO and majority  shareholder
that on or before December 31, 2002,  Fashionmall will either consummate a transaction  resulting in a value to its
stockholders in excess of the value  deliverable to the  stockholders  upon its  liquidation,  consummate a plan of
liquidation,  or consummate  any other  transaction  that is reasonably  acceptable to the Company and the majority
shareholder.  Based upon the $3.92  trading price of the stock on the day the  preferred  investment  was exchanged
for common shares,  the Company  recognized a $2.3 million loss on its investment during the second quarter.  After
this charge,  the Company's  investment  was $3.2 million at June 30, 2002.  The $3.92 trading price  reflected the
$3.75 per share  dividend  declared by  Fashionmall.com,  which was paid in August  2002.  The receipt of this $3.1
million  dividend has reduced the Company's  investment to $0.1 million.  In future periods,  the Company will mark
this remaining investment in Fashionmall.com to market value.

   The Company has a $0.5 million  investment in Constellation  Real  Technologies LLC  (Constellation),  a company
that forms and  sponsors  real  estate  related  internet,  e-commerce,  and  telecommunications  enterprises.  The
Company has also made an additional  capital  commitment of $0.8 million to Constellation,  although any additional
contributions would be restricted to a maximum of $0.2 million in 2002 and $0.3 million in 2003.

Derivatives

   Effective January 1, 2001, the Company adopted SFAS 133 and its related  amendments and  interpretations,  which
establish accounting and reporting standards for derivative  instruments.  The Company uses derivative  instruments
primarily to manage  exposure to interest rate risks inherent in variable rate debt and  refinancings.  The Company
routinely uses cap, swap, and treasury lock agreements to meet these objectives.

   The initial  adoption of SFAS 133 on January 1, 2001  resulted in a reduction  to income of  approximately  $8.4
million as the  cumulative  effect of a change in  accounting  principle  and a reduction  to OCI of $0.8  million.
These  amounts  represented  the  transition  adjustments  necessary to mark the  Company's  share of interest rate
agreements to fair value as of January 1, 2001.

   In addition to the  transition  adjustment in first quarter 2001,  the Company  recognized in earnings its share
of net  unrealized  gains  (losses) of $0.8 million and $(0.7)  million during the three months ended June 30, 2002
and 2001,  and $1.8 million and $(2.5)  million  during the six months ended June 30, 2002 and 2001,  respectively,
due to changes in interest  rates and the  resulting  changes in value of the Company's  interest rate  agreements.
Of these amounts,  the changes in value of the Dolphin swap agreement  were  approximately  $1.0 million and $(0.6)
million  during the three months ended June 30, 2002 and 2001,  and $2.0 million and $(2.1)  million during the six
months ended June 30, 2002 and 2001.  The remainders represent the changes in time value of other instruments.

                                                         20

   As of June 30, 2002,  the Company has $9.1 million of net  derivative  losses  included in  Accumulated  OCI, as
follows:

     Hedged Items                                               OCI Amounts
     ------------                                               -----------
                                                               (in thousands)

     2001 Regency Square financing                           $         2,618
     Dolphin Mall construction facility                                  149
     $275 million line of credit                                       1,455
     The Shops at Willow Bend construction facility                    1,124
     Westfarms refinancing                                             3,756
                                                             ---------------
                                                             $         9,102
                                                             ===============

   The realized loss on the Regency  Square  financing will be recognized as additional  interest  expense over the
ten-year term of the debt.  The loss on the hedge of the Dolphin Mall  construction  facility will be recognized as
a reduction of earnings  through its 2002 maturity  date.  Gains or losses on the swap designated to hedge the $275
million line of credit will be  recognized as an adjustment to interest expense over the one-year effective  period
of the swap agreement,  beginning  November  2002.  Gains or  losses on the swap designated to  hedge The  Shops at
Willow  Bend  construction facility will be recognized as adjustments to interest expense over the term of the swap
agreement,  November 2002 through  June  2004.  A  realized  loss on the  derivative  used to hedge the refinancing
of the  Westfarms  loan (Subsequent  Event)  will be recognized as a reduction of earnings  through the loan's July
2012 maturity date. The Company  expects that  approximately  $3.3 million will be  reclassified  from  Accumulated
OCI and recognized as a reduction of earnings during the next twelve months.

Comparable Center Operations

   The  performance  of the  Company's  portfolio  can be  measured  through  comparisons  of  comparable  centers'
operations.  During the three months ended June 30, 2002,  revenues  (excluding  land sales) less  operating  costs
(operating  and  recoverable   expenses)  of  those  centers  owned  and  open  for  the  entire  period  increased
approximately  two percent in  comparison  to the same  centers'  results in the  comparable  period of 2001.  This
growth was primarily due to increases in minimum rent and expense  reductions.  The Company expects that comparable
center  operations  will  generally  increase  annually  by  an  average  of  two  to  three  percent.  This  is  a
forward-looking  statement and certain  significant  factors could cause the actual  results to differ  materially;
refer to the General Risks of the Company in the Company's  annual report on Form 10-K for the year ended  December
31, 2001.

Subsequent Event

   In July 2002,  the Company  closed on a $210 million  ten-year  mortgage on Westfarms at an all-in rate of 6.4%.
Proceeds  were used to pay off the previous  $155 million debt on Westfarms.  The  Operating  Partnership  used its
$37 million share of distributed excess proceeds to pay down its revolving credit facilities.

Presentation of Operating Results

   The following tables contain the combined  operating  results of the Company's  Consolidated  Businesses and the
Unconsolidated  Joint  Ventures.  Income  allocated  to the  minority  partners in the  Operating  Partnership  and
preferred  interests is deducted to arrive at the results  allocable to the Company's common  shareowners.  Because
the net equity of the Operating  Partnership  is less than zero, the income  allocated to the minority  partners is
equal to their  share of  distributions.  The net  equity  of these  minority  partners  is less  than  zero due to
accumulated  distributions  in excess of net  income  and not as a result of  operating  losses.  Distributions  to
partners are usually  greater than net income because net income includes  non-cash  charges for  depreciation  and
amortization.  Losses  allocable  to minority  partners in certain  consolidated  joint  ventures are added back to
arrive at the net results of the Company. The Company's average ownership  percentage of the Operating  Partnership
was  approximately  61.8% and 61.7% during the three and six months ended June 30,  2002,  respectively,  and 61.4%
during the 2001 periods.

                                                         21

                  Comparison of the Three Months Ended June 30, 2002 to the Three Months Ended June 30, 2001

   The  following  table sets forth  operating  results for the three months ended June 30, 2002 and June 30, 2001,
showing the results of the Consolidated Businesses and Unconsolidated Joint Ventures:

                                                Three months ended June 30, 2002              Three months ended June 30, 2001
                                      -------------------------------------------------------------------------------------------------
                                                                            TOTAL OF                                       TOTAL OF
                                                        UNCONSOLIDATED   CONSOLIDATED                   UNCONSOLIDATED  CONSOLIDATED
                                                            JOINT         BUSINESSES     CONSOLIDATED       JOINT      BUSINESSES AND
                                         CONSOLIDATED    VENTURES AT         AND          BUSINESSES     VENTURES AT   UNCONSOLIDATED
                                          BUSINESSES       100%(1)      UNCONSOLIDATED                     100%(1)     JOINT VENTURES
                                                                            JOINT                                            AT
                                                                         VENTURES AT                                        100%
                                                                             100%
                                      -------------------------------------------------------------------------------------------------
                                                                         (in millions of dollars)

REVENUES:
  Minimum rents                                  46.7          45.0             91.7           38.2           34.0             72.2
  Percentage rents                                0.6          (0.1)             0.5            0.9            0.2              1.1
  Expense recoveries                             29.6          22.3             51.9           25.0           16.5             41.5
  Management, leasing and development             5.7                            5.7            6.1                             6.1
  Other                                           7.3           2.0              9.4            9.6            3.6             13.2
                                                 ----          ----            -----           ----           ----            -----
Total revenues                                   90.1          69.2            159.3           79.8           54.4            134.1

OPERATING COSTS:
  Recoverable expenses                           25.9          20.9             46.8           21.6           16.1             37.7
  Other operating                                 6.4           5.8             12.1            9.1            2.8             11.9
  Charge related to technology investments        8.1                            8.1
  Management, leasing and development             5.2                            5.2            5.1                             5.1
  General and administrative                      5.4                            5.4            4.9                             4.9
  Interest expense                               20.8          19.6             40.3           15.0           17.6             32.6
  Depreciation and amortization (2)              20.2          13.5             33.7           14.5            8.4             22.9
                                                 ----          ----            -----           ----           ----            -----
Total operating costs                            92.0          59.7            151.7           70.1           44.8            114.9
                                                 ----          ----            -----           ----           ----            -----
                                                 (1.9)          9.5              7.6            9.7            9.5             19.2
                                                               ====             ====                          ====             ====

Equity in income of
Unconsolidated Joint Ventures (2)                 4.7                                           5.2
                                                  ---                                           ---
Income before discontinued operations
  and minority and preferred interests            2.9                                          14.9
Discontinued operations:
  Gain on disposition of interest in             10.0
center
  EBITDA (3)                                      1.0                                           1.6
  Depreciation and amortization                                                                (0.8)
Minority and preferred interests:
  TRG preferred distributions                    (2.3)                                         (2.3)
  Minority share of consolidated
    joint ventures                                0.4                                           0.2
  Minority share of income of TRG                (5.0)                                         (4.4)
  Distributions in excess of minority
    share of income                              (3.1)                                         (3.5)
                                                 ----                                          ----
Net income                                        3.8                                           5.8
Series A preferred dividends                     (4.2)                                         (4.2)
                                                 ----                                          ----
Net income (loss) allocable to common
  shareowners                                    (0.3)                                          1.6
                                                 ====                                           ===

SUPPLEMENTAL INFORMATION (3):
  EBITDA - 100%                                  48.2          42.5             90.7           40.7           35.5             76.3
  EBITDA - outside partners' share               (2.0)        (20.3)           (22.3)          (2.1)         (15.9)           (18.0)
                                                 ----          ----            -----           ----           ----            -----
  EBITDA contribution                            46.2          22.2             68.4           38.6           19.7             58.3
  Beneficial Interest Expense                   (19.5)         (9.8)           (29.3)         (13.7)          (9.2)           (23.0)
  Non-real estate depreciation                   (0.7)                          (0.7)          (0.7)                           (0.7)
  Preferred dividends and distributions          (6.4)                          (6.4)          (6.4)                           (6.4)
                                                 ----          ----            -----           ----           ----            -----
  Funds from Operations contribution             19.6          12.4             32.0           17.8           10.4             28.2
                                                 ====          ====             ====           ====           ====            =====

(1)    With  the   exception  of  the  Supplemental  Information,  amounts  include  100%  of  the  Unconsolidated  Joint   Ventures
       and  are  net  of  intercompany  profits.  The  Unconsolidated  Joint Ventures  are  presented  at 100% in order to allow for
       measurement  of their  performance  as a whole,  without  regard to the Company's  ownership  interest.  In its  consolidated
       financial statements, the Company accounts for its investments in the Unconsolidated Joint Ventures under the equity method.
(2)    Amortization  of the  Company's  additional  basis in the Operating  Partnership  was $1.9 million in both 2002 and 2001.  Of
       this amount, $0.8 million was included in equity in income of Unconsolidated Joint Ventures,  while $1.1 million was included
       in depreciation and amortization.
(3)    EBITDA  represents  earnings  before  interest  and  depreciation  and  amortization,  excluding  gains  on  dispositions  of
       depreciated  operating  properties.  In 2002, an $8.1 million charge related  to  technology  investments  was also excluded.
       Funds from Operations is defined and discussed in Liquidity and Capital Resources.
(4)    Amounts  in the  table  may not add due to  rounding. Certain reclassifications  have  been  made  to 2001 amounts to conform
       to 2002 classifications.

                                                         22

Consolidated Businesses

   Total  revenues for the three months ended June 30, 2002 were $90.1  million,  a $10.3 million or 12.9% increase
over the comparable  period in 2001.  Minimum rents  increased  $8.5 million,  of which $7.7 million was due to the
openings  of The Shops at Willow  Bend and The Mall at  Wellington  Green.  Minimum  rents  also  increased  due to
tenant rollovers,  offsetting  decreases in rent caused by lower occupancy.  Expense recoveries increased primarily
due to Willow Bend and  Wellington  Green.  Other  revenue  decreased by $2.3 million from 2001 due to decreases in
lease  cancellation  revenue and interest  income,  partially  offset by increases in gains on sales of  peripheral
land.

   Total  operating  costs were $92.0  million,  a $21.9 million or 31.2%  increase over the  comparable  period in
2001.  Recoverable  expenses  increased  primarily due to Willow Bend and Wellington Green. Other operating expense
decreased  primarily due to a decrease in the charge to operations  for costs of  pre-development  activities,  bad
debt, and  MerchantWired  losses,  partially  offset by increases due to the new centers.  During 2002, the Company
recognized an $8.1 million  charge  relating to its  investments in  MerchantWired  and  Fashionmall.com.  Interest
expense  increased  primarily due to a decrease in capitalized  interest upon opening of Willow Bend and Wellington
Green,  partially  offset by  decreases  due to  changes  in rates on  floating  rate  debt.  Depreciation  expense
increased primarily due to the new centers.

Unconsolidated Joint Ventures

   Total  revenues for the three months ended June 30, 2002 were $69.2  million,  a $14.8 million or 27.2% increase
from the comparable  period of 2001.  Minimum rents increased $11.0 million,  of which $10.2 million was due to the
openings  of Dolphin  Mall and  International  Plaza and the  acquisition  of the  interest in  Sunvalley.  Expense
recoveries  increased primarily due to Dolphin Mall,  International  Plaza, and Sunvalley.  Other revenue decreased
primarily due to a decrease in lease cancellation revenue.

   Total  operating  costs  increased by $14.9  million to $59.7  million for the three months ended June 30, 2002.
Recoverable expenses increased primarily due to Dolphin Mall,  International Plaza, and Sunvalley.  Other operating
expense  increased  primarily  due to the new  centers,  including  greater  levels of bad debt  expense at Dolphin
Mall.  Interest  expense  increased  due to  decreases  in  capitalized  interest  upon opening of Dolphin Mall and
International  Plaza,  partially  offset by a decrease in the  liability  for the Dolphin Mall swap  agreement  and
changes in rates on floating  rate debt.  Depreciation  expense  increased  primarily due to the opening of the new
centers, as well as the Sunvalley and Arizona Mills acquisitions.

   As a result of the foregoing,  income of the Unconsolidated  Joint Ventures was consistent between periods.  The
Company's  equity in income of the  Unconsolidated  Joint Ventures was $4.7 million,  a $0.5 million  decrease from
the comparable period in 2001.

Net Income

   As a result of the foregoing,  the Company's  income before  discontinued  operations and minority and preferred
interests  decreased  $12.0  million to $2.9 million for the three months  ended June 30,  2002.  The  discontinued
operations  of Paseo Nuevo and La Cumbre Plaza include a $10.0  million gain on the  disposition  of Paseo Nuevo in
2002.  After  allocation of income to minority and preferred  interests,  the net income (loss) allocable to common
shareowners for 2002 was $(0.3) million compared to $1.6 million in 2001.

                                                         23

                  Comparison of the Six Months Ended June 30, 2002 to the Six Months Ended June 30, 2001

   The  following  table sets forth  operating  results for the six months  ended June 30, 2002 and June 30,  2001,
showing the results of the Consolidated Businesses and Unconsolidated Joint Ventures:

                                                 Six months ended June 30, 2002                Six months ended June 30, 2001
                                      -------------------------------------------------------------------------------------------------
                                                                            TOTAL OF                                       TOTAL OF
                                                        UNCONSOLIDATED   CONSOLIDATED                   UNCONSOLIDATED  CONSOLIDATED
                                                            JOINT         BUSINESSES     CONSOLIDATED       JOINT      BUSINESSES AND
                                         CONSOLIDATED    VENTURES AT         AND          BUSINESSES     VENTURES AT   UNCONSOLIDATED
                                          BUSINESSES       100%(1)      UNCONSOLIDATED                     100%(1)     JOINT VENTURES
                                                                            JOINT                                            AT
                                                                         VENTURES AT                                        100%
                                                                             100%
                                      -------------------------------------------------------------------------------------------------
                                                                           (in millions of dollars)

REVENUES:
  Minimum rents                                  93.5          86.5            180.0           76.7           66.8            143.5
  Percentage rents                                1.7           0.5              2.2            1.9            0.8              2.7
  Expense recoveries                             57.4          42.9            100.3           48.2           32.8             81.0
  Management, leasing and development            10.9                           10.9           12.5                            12.5
  Other                                          13.3           4.0             17.3           15.5            8.0             23.5
                                                -----         -----            -----          -----          -----            -----
Total revenues                                  176.7         133.9            310.6          154.8          108.4            263.2

OPERATING COSTS:
  Recoverable expenses                           49.3          36.4             85.7           41.1           29.9             70.9
  Other operating                                16.3          11.0             27.3           16.1            6.2             22.3
  Charge related to technology investments        8.1                            8.1
  Management, leasing and development            10.0                           10.0            9.4                             9.4
  General and administrative                     10.4                           10.4            9.6                             9.6
  Interest expense                               41.4          37.8             79.2           30.2           36.2             66.4
  Depreciation and amortization (2)              40.9          27.6             68.5           31.0           17.3             48.3
                                                -----         -----            -----          -----          -----            -----
Total operating costs                           176.4         112.8            289.2          137.4           89.5            226.9
                                                -----         -----            -----          -----          -----            -----
                                                  0.2          21.1             21.4           17.3           19.0             36.3
                                                               ====             ====                          ====             ====

Equity in income of
Unconsolidated Joint Ventures (2)                10.9                                          10.1
                                                 ----                                          ----
Income before discontinued operations,
  cumulative effect of change in
  accounting principle, and minority and
  preferred interests                            11.1                                          27.4
Discontinued operations:
  Gain on dispositions of interests in
    centers                                      12.0
  EBITDA (3)                                      3.2                                           3.5
  Depreciation and amortization                  (0.5)                                         (1.4)
Cumulative effect of change in
  accounting principle                                                                         (8.4)
Minority and preferred interests:
  TRG preferred distributions                    (4.5)                                         (4.5)
  Minority share of consolidated
    joint ventures                                0.6                                           0.6
  Minority share of income of TRG                (9.5)                                         (4.9)
  Distributions in excess of minority
    share of income                              (6.8)                                        (11.0)
                                                 ----                                          ----
Net income                                        5.7                                           1.3
Series A preferred dividends                     (8.3)                                         (8.3)
                                                 ----                                          ----
Net loss allocable to common
  shareowners                                    (2.6)                                         (7.0)
                                                 ====                                          ====

SUPPLEMENTAL INFORMATION (3):
  EBITDA - 100%                                  93.9          86.5            180.3           82.0           72.3            154.4
  EBITDA - outside partners' share               (4.1)        (39.6)           (43.7)          (4.0)         (32.7)           (36.7)
                                                -----         -----            -----          -----          -----            -----
  EBITDA contribution                            89.8          46.9            136.6           78.0           39.6            117.7
  Beneficial Interest Expense                   (38.9)        (18.8)           (57.7)         (27.6)         (19.1)           (46.7)
  Non-real estate depreciation                   (1.4)                          (1.4)          (1.4)                           (1.4)
  Preferred dividends and distributions         (12.8)                         (12.8)         (12.8)                          (12.8)
                                                -----         -----            -----          -----          -----            -----
  Funds from Operations contribution             36.6          28.1             64.7           36.2           20.6             56.9
                                                =====         =====            =====          =====          =====            =====

(1)      With the exception of the  Supplemental  Information,  amounts  include 100% of the  Unconsolidated  Joint Ventures and are
         net of intercompany  profits.  The Unconsolidated Joint Ventures are presented at 100% in order to  allow  for  measurement
         of their  performance  as a whole,  without  regard  to the Company's  ownership  interest.  In its  consolidated financial
         statements, the Company accounts for its investments in the Unconsolidated Joint Ventures under the equity method.
(2)      Amortization  of the  Company's  additional  basis in the Operating  Partnership  was $3.8 million  in  both 2002 and 2001.
         Of this amount,  $1.5 million was included in equity in  income of  Unconsolidated  Joint Ventures,  while $2.3 million was
         included in depreciation and amortization.
(3)      EBITDA  represents  earnings  before  interest  and  depreciation  and  amortization,  excluding  gains on dispositions  of
         depreciated  operating  properties.  In 2002, an $8.1 million charge related to technology  investments  was also excluded.
         Funds from Operations is defined and discussed in Liquidity and Capital Resources.
(4)      Amounts  in the  table  may not add due to rounding.  Certain reclassifications  have  been made to 2001 amounts to conform
         to 2002 classifications.

                                                         24

Consolidated Businesses

   Total  revenues for the six months ended June 30, 2002 were $176.7  million,  a $21.9 million or 14.1%  increase
over the comparable  period in 2001.  Minimum rents increased $16.8 million,  of which $15.6 million was due to the
openings  of The Shops at Willow  Bend and The Mall at  Wellington  Green.  Minimum  rents  also  increased  due to
tenant rollovers,  offsetting  decreases in rent caused by lower occupancy.  Expense recoveries increased primarily
due to Willow Bend and Wellington Green.  Management,  leasing,  and development revenue decreased primarily due to
the timing of leasing transactions and the completion of two short-term  contracts.  Other revenue decreased due to
decreases in lease  cancellation  revenue and interest  income,  partially offset by increases in gains on sales of
peripheral land.

   Total  operating  costs were $176.4  million,  a $39.0 million or 28.4% increase over the  comparable  period in
2001.  Recoverable  expenses  increased  primarily due to Willow Bend and Wellington Green. Other operating expense
increased  primarily due to the new centers,  partially  offset by a decrease in the charge to operations for costs
of  pre-development  activities.  During  2002,  the Company  recognized  an $8.1  million  charge  relating to its
investments  in  MerchantWired  and  Fashionmall.com.  Interest  expense  increased  primarily due to a decrease in
capitalized  interest  upon opening of Willow Bend and  Wellington  Green,  partially  offset by  decreases  due to
changes in rates on floating rate debt. Depreciation expense increased primarily due to the new centers.

Unconsolidated Joint Ventures

   Total  revenues for the six months ended June 30, 2002 were $133.9  million,  a $25.5 million or 23.5%  increase
from the comparable  period of 2001.  Minimum rents increased $19.7 million,  of which $19.6 million was due to the
openings  of Dolphin  Mall and  International  Plaza and the  acquisition  of the  interest in  Sunvalley.  Expense
recoveries  increased primarily due to Dolphin Mall,  International  Plaza, and Sunvalley.  Other revenue decreased
primarily due to a decrease in lease cancellation revenue.

   Total  operating  costs  increased  by $23.3  million to $112.8  million for the six months ended June 30, 2002.
Recoverable  expenses  increased  primarily  due to the new  centers.  Recoverable  expenses in 2002  included  the
reversal  of a $2.8  million  special  assessment  tax accrued  during  2001.  Other  operating  expense  increased
primarily due to the new centers,  including  greater levels of bad debt expense at Dolphin Mall,  partially offset
by decreases in bad debt expense at other  centers.  Interest  expense  increased  due to decreases in  capitalized
interest  upon opening of Dolphin Mall and  International  Plaza,  partially  offset by a decrease in the liability
for the Dolphin Mall swap  agreement and changes in rates on floating  rate debt.  Depreciation  expense  increased
primarily due to the new centers.

   As a result of the foregoing,  income of the  Unconsolidated  Joint Ventures  increased by $2.1 million to $21.1
million.  The Company's  equity in income of the  Unconsolidated  Joint Ventures was $10.9 million,  a $0.8 million
increase from the comparable period in 2001.

Net Income

   As a result of the foregoing, the Company's income before discontinued  operations,  cumulative effect of change
in accounting  principle,  and minority and preferred  interests  decreased  $16.3 million to $11.1 million for the
six months ended June 30, 2002.  The  discontinued  operations  of Paseo Nuevo and La Cumbre Plaza  include a $12.0
million  gain on the  dispositions  of La Cumbre Plaza and Paseo Nuevo in 2002.  In 2001, a cumulative  effect of a
change in accounting  principle of $8.4 million was  recognized in connection  with the Company's  adoption of SFAS
133.  After  allocation  of  income  to  minority  and  preferred  interests,  the net  loss  allocable  to  common
shareowners for 2002 was $(2.6) million compared to $(7.0) million in 2001.

                                                         25

Liquidity and Capital Resources

   In the following  discussion,  references to beneficial interest represent the Operating  Partnership's share of
the results of its  consolidated  and  unconsolidated  businesses.  The  Company  does not have and has not had any
parent  company  indebtedness;  all debt  discussed  represents  obligations  of the Operating  Partnership  or its
subsidiaries and joint ventures.

   The  Company  believes  that its net  cash  provided  by  operating  activities,  distributions  from its  joint
ventures,  the unutilized  portion of its credit  facilities,  and its ability to access the capital markets assure
adequate liquidity to conduct its operations in accordance with its dividend and financing policies.

   As of June 30, 2002, the Company had a consolidated  cash balance of $72.7  million.  Additionally,  the Company
has a secured $275  million  line of credit.  This line had $230.0  million of  borrowings  as of June 30, 2002 and
expires in November 2004 with a one-year  extension  option.  The Company also has available a second  secured bank
line of credit of up to $40  million.  The line had $9.2 million of  borrowings  as of June 30, 2002 and expires in
August 2002.  The Company is currently negotiating to extend the expiration until November 2004.

   In March 2002,  the Company  exercised its option to extend the maturity of the Great Lakes  Crossing loan until
April 2003.  In July 2002,  the Company  completed  the  refinancing  of the  Westfarms  mortgage  (see  Results of
Operations  - Subsequent  Event).  In  August 2002,  Stamford  Town Center  extended its $76 million loan to August
2004. Also in August, the Company closed on a $105 million  construction loan for Stony  Point  Fashion Park.  This
loan bears interest  at LIBOR plus 1.85% and has  an initial term  of  three  years  with  two  one-year  extension
options.  The Operating Partnership guarantees 100% of principal and interest on this loan;  the amounts guaranteed
will be reduced as certain center performance and valuation criteria are met.

Summary of Investing Activities

   Net cash used in investing  activities  was $9.1 million in 2002 compared to $132.5  million in 2001.  Cash used
in investing  activities was impacted by the timing of capital  expenditures,  with additions to properties in 2002
and 2001 for the  construction of Stony Point Fashion Park, The Mall at Wellington  Green,  and The Shops at Willow
Bend as well as other  development  activities  and other  capital  items.  Investments  in  MerchantWired  of $4.1
million and $2.9  million  were made in 2002 and 2001,  respectively.  The Company  received  net proceeds of $76.4
million  from the  dispositions  of La Cumbre  Plaza and Paseo Nuevo and invested  $45.2  million in acquiring  the
interests in Sunvalley  and Arizona Mills in 2002.  Net proceeds  from sales of peripheral  land were $6.1 million,
an increase of $2.6 million from 2001.  Contributions to  Unconsolidated  Joint Ventures of $28.7 million were made
in  2001,  primarily  representing  funding  for  construction  activities  at  Dolphin  Mall.  Distributions  from
Unconsolidated  Joint Ventures in 2002 increased from 2001 primarily due to International  Plaza, Dolphin Mall, and
Sunvalley.

Summary of Financing Activities

   Net cash used in financing  activities  was $1.9 million in 2002,  compared to $88.5 million of cash provided by
financing  activities in 2001.  Debt  proceeds,  net of repayments  and issuance  costs,  provided $42.3 million in
2002 and $139.0  million in 2001.  Stock  repurchases  of $11.2 million were made in connection  with the Company's
stock  repurchase  program in 2001.  Issuance of stock pursuant to the Continuing  Offer related to the exercise of
employee  options  contributed  $4.5 million in 2002 and $8.3 million in 2001.  Total  dividends and  distributions
paid were $48.7 million and $47.6 million in 2002 and 2001, respectively.

Beneficial Interest in Debt

    At  June  30,  2002,  the  Operating  Partnership's  debt  and  its  beneficial  interest  in the  debt  of its
Consolidated  and  Unconsolidated  Joint Ventures  totaled $2,060.4 million with an average interest rate of 5.70%,
excluding  amortization  of debt issuance costs and interest rate hedging  costs.  Debt issuance costs and interest
rate hedging costs are reported as interest  expense in the results of  operations.  Amortization  of debt issuance
costs added 0.37% to TRG's effective interest rate in the second quarter of 2002.  Included in beneficial  interest
in debt is debt used to fund  development and expansion costs.  Beneficial  interest in assets on which interest is
being  capitalized  totaled $147.4  million as of June 30, 2002.  Beneficial  interest in capitalized  interest was
$1.9  million and $3.5  million  for the three and six months  ended June 30,  2002,  respectively.  The  following
table presents information about the Company's beneficial interest in debt as of June 30, 2002.

                                                         26

                                                            Beneficial Interest in Debt
                                                       ------------------------------------
                                                               Amount       Interest Rate
                                                            (in millions)    at 6/30/02
                                                            -------------    ----------

    Total beneficial interest in fixed rate debt                $1,041.2         7.51% (1)
    Total beneficial interest in floating rate debt              1,019.2         3.85  (1)
                                                                 -------
    Total beneficial interest in debt                           $2,060.4         5.70  (1)
                                                                ========

(1)       Denotes weighted average interest rate before amortization of financing costs.

   As  provided  for by certain  debt  agreements,  the  Company  has  currently  locked in LIBOR  rates on certain
floating  rate debt.  In addition,  the Company has entered into swap  agreements  to hedge  certain  floating rate
debt in future periods.

                                                              Beneficial Interest in Debt
                                                       ------------------------------------
                                                               Amount           LIBOR
                                                            (in millions)     Lock Rate
                                                            -------------     ---------

Floating rate debt with LIBOR rate locks
   as of June 30, 2002:

    Through September 2002                                     $   178.3        2.594%
    Through October 2002                                           310.8        2.321
    Through November 2002                                            5.0        2.659
    Through March 2003                                             125.7        3.090
                                                               ---------

Total                                                          $   619.8        2.558
                                                               =========

                                                              Notional
                                                               Amount
                                                            (in millions)     Swap Rate
                                                            -------------     ---------

Floating rate debt hedged via forward
   swap agreements:

    November 2002 through October 2003                          $  100.0        4.298%
    November 2002 through June 2004                                100.0        4.125
    October 2002 through September 2003                            100.0        2.500
    October 2003 through September 2004                            100.0        4.350
    October 2004 through April 2005                                100.0        5.250

   In  addition,  $537.6  million of the  Company's  beneficial  interest  in floating  rate debt is covered  under
interest  rate cap  agreements  with LIBOR cap rates  ranging  from  7.0%  to 8.75% with terms  ending  August 2002
through September 2003.

Sensitivity Analysis

   The Company has exposure to interest  rate risk on its debt  obligations  and interest rate  instruments.  Based
on the Operating  Partnership's  beneficial  interest in floating  rate debt in effect at June 30, 2002,  excluding
debt fixed under  long-term  LIBOR rate  contracts,  a one percent  increase or decrease in interest  rates on this
floating rate debt would  decrease or increase cash flows by  approximately  $4.9 million and, due to the effect of
capitalized  interest,  annual earnings by approximately  $4.1 million.  Based on the Company's  consolidated  debt
and interest  rates in effect at June 30, 2002, a one percent  increase in interest  rates would  decrease the fair
value of debt by  approximately  $39.9 million,  while a one percent  decrease in interest rates would increase the
fair value of debt by approximately $42.6 million.

                                                         27

Covenants and Commitments

   Certain loan  agreements  contain  various  restrictive  covenants,  including  minimum net worth  requirements,
minimum debt service and fixed charges  coverage  ratios,  a maximum payout ratio on  distributions,  and a minimum
debt yield ratio,  the latter being the most  restrictive.  The Operating  Partnership is in compliance with all of
its covenants.

   The Company's secured credit facilities contain customary  covenants  requiring the maintenance of comprehensive
all-risk  insurance on property  securing each facility.  As a result of exclusions in its insurance  policies upon
renewal,  the Company  purchased a supplemental  policy,  which has an annual limit of $100 million,  for terrorist
acts for its  portfolio  of  centers.  No  assurances  can be given that the  coverage  under this  policy  will be
adequate or that  mortgagees  will not require  coverage for individual  centers beyond that which is  commercially
available  at  reasonable  rates.  The  Company's  inability  to obtain  such  coverage or to do so only at greatly
increased  costs may also  negatively  impact the  availability  and cost of future  financing.  In July 2002,  the
Company  was  required  to  purchase a separate  terrorism  policy  for  Westfarms  in order to close on its recent
financing.

   Certain  debt  agreements  contain  performance  and  valuation  criteria  that  must be met for the loans to be
extended at the full principal  amounts;  these  agreements  provide for partial  prepayments of debt to facilitate
compliance with extension  provisions.  The Company  currently  anticipates that a partial  prepayment of principal
will be necessary to extend the October 2002 maturity date on the Dolphin Mall construction loan.

   Payments  of  principal  and  interest  on the loans in the  following  table are  guaranteed  by the  Operating
Partnership as of June 30, 2002. All of the loan  agreements  provide for a reduction of the amounts  guaranteed as
certain center performance and valuation criteria are met.

                                                      TRG's           Amount of
                                                   beneficial       loan balance      % of loan
                                                   interest in       guaranteed        balance        % of interest
                               Loan balance       loan balance         by TRG        guaranteed        guaranteed
Center                         as of 6/30/02      as of 6/30/02     as of 6/30/02      by TRG            by TRG
------                         -------------      -------------     -------------      ------            ------
                                         (in millions of dollars)
Dolphin Mall                        183.0             91.5              91.5               50%             100%
Great Lakes Crossing                149.7            127.2             149.7              100%             100%
International Plaza                 187.1             49.6              93.6               50% (1)          50% (1)
The Mall at Millenia                 92.1             46.1              23.0               25%              25%
The Mall at Wellington Green        137.7            123.9             137.7              100%             100%
The Shops at Willow Bend            197.8            197.8             197.8              100%             100%

(1)      An investor in the  International  Plaza venture has indemnified  the Operating  Partnership to the extent
         of 25% of the amounts guaranteed.

Funds from Operations

   A principal factor that the Company  considers in determining  dividends to shareowners is Funds from Operations
(FFO),  which is  defined  as income  before  extraordinary  items,  cumulative  effect  of  change  in  accounting
principle,  real  estate  depreciation  and  amortization,  and the  allocation  to the  minority  interest  in the
Operating  Partnership,  less  preferred  dividends  and  distributions.   Gains  on  dispositions  of  depreciated
operating  properties  are excluded from FFO. In 2002,  an $8.1 million  charge  related to technology  investments
was also excluded.

    Funds from  Operations  does not  represent  cash  flows from  operations,  as  defined by  generally  accepted
accounting  principles,  and  should not be  considered  to be an  alternative  to net  income as an  indicator  of
operating  performance  or to cash  flows  from  operations  as a  measure  of  liquidity.  However,  the  National
Association of Real Estate Investment Trusts suggests that Funds from Operations is a useful  supplemental  measure
of operating  performance  for REITs.  Funds from  Operations  as presented by the Company may not be comparable to
similarly titled measures of other companies.

                                                         28

Reconciliation of Income to Funds from Operations

                                                        Three Months Ended                  Three Months Ended
                                                           June 30, 2002                       June 30, 2001
                                                   -------------------------------    -----------------------------
                                                                         (in millions of dollars)

Income before discontinued operations
  and minority and preferred interests (1) (2)                       2.9                           14.9
Funds from operations of discontinued operations                     1.0                            1.6
Depreciation and amortization (3)                                   20.2                           14.5
Share of Unconsolidated Joint Ventures'
   depreciation and amortization (4)                                 7.7                            5.2
Charge related to technology investments                             8.1
Non-real estate depreciation                                        (0.7)                          (0.7)
Minority partners in consolidated joint ventures
   share of funds from operations                                   (0.7)                          (0.9)
Preferred dividends and distributions                               (6.4)                          (6.4)
                                                                    ----                           ----
Funds from Operations - TRG                                         32.0                           28.2
                                                                    ====                           ====
Funds from Operations allocable to TCO                              19.8                           17.3
                                                                    ====                           ====
(1)      Includes  gains on peripheral  land sales of $2.3 million and $1.5 million for the three months ended June
         30, 2002 and June 30, 2001, respectively.

(2)      Includes net  non-cash  straightline  adjustments  to minimum rent revenue and ground rent expense of $0.4
         million and $0.1 million for the three months ended June 30, 2002 and June 30, 2001, respectively.
(3)      Includes $0.8 million and $0.7 million of mall tenant  allowance  amortization  for the three months ended
         June 30, 2002 and June 30, 2001, respectively.
(4)      Includes  $0.6  million of mall tenant  allowance  amortization  for both the three  months ended June 30,
         2002 and June 30, 2001.
(5)      Amounts in this table may not add due to rounding.

                                                            Six Months Ended                 Six Months Ended
                                                              June 30, 2002                    June 30, 2001
                                                   -------------------------------    -----------------------------
                                                                         (in millions of dollars)

Income before discontinued operations,
  cumulative effect of change in
  accounting principle, and minority and
  preferred interests (1) (2)                                       11.1                           27.4
Funds from operations of discontinued operations                     3.2                            3.5
Depreciation and amortization (3)                                   40.9                           31.0
Share of Unconsolidated Joint Ventures'
   depreciation and amortization (4)                                17.2                           10.6
Charge related to technology investments                             8.1
Non-real estate depreciation                                        (1.4)                          (1.4)
Minority partners in consolidated joint ventures
   share of funds from operations                                   (1.6)                          (1.4)
Preferred dividends and distributions                              (12.8)                         (12.8)
                                                                   -----                          -----
Funds from Operations - TRG                                         64.7                           56.9
                                                                    ====                           ====
Funds from Operations allocable to TCO                              39.9                           34.9
                                                                    ====                           ====
(1)      Includes  gains on  peripheral  land sales of $4.2  million and $2.8 million for the six months ended June
         30, 2002 and June 30, 2001, respectively.

(2)      Includes net  non-cash  straightline  adjustments  to minimum rent revenue and ground rent expense of $1.0
         million and $0.2 million for the six months ended June 30, 2002 and June 30, 2001, respectively.
(3)      Includes  $1.5 million and $1.3  million of mall tenant  allowance  amortization  for the six months ended
         June 30, 2002 and June 30, 2001, respectively.
(4)      Includes  $1.1 million and $1.0  million of mall tenant  allowance  amortization  for the six months ended
         June 30, 2002 and June 30, 2001, respectively.
(5)      Amounts in this table may not add due to rounding.

                                                         29

Reconciliation of Funds from Operations to Income

                                                                  Three Months Ended           Three Months Ended
                                                                     June 30, 2002                June 30, 2001
                                                              ------------------------      -----------------------
                                                                         (in millions of dollars)

Funds from Operations-TRG                                                32.0                         28.2

Charge related to technology investments                                 (8.1)

Depreciation adjustments:
   Consolidated Businesses' depreciation and amortization               (20.2)                       (14.5)
   Minority partners in consolidated joint ventures
      share of depreciation and amortization                              1.2                          1.1
   Depreciation of TCO's additional basis                                 1.9                          1.9
   Non-real estate depreciation                                           0.7                          0.7
   Share of Unconsolidated Joint Ventures' depreciation and
     amortization                                                        (7.7)                        (5.2)
Discontinued operations' funds from operations                           (1.0)                        (1.6)
                                                                         ----                         ----
Income (loss) from continuing operations allocable to
  TRG unitholders                                                        (1.3)                        10.6
                                                                         ====                         ====

TCO's ownership share of income (loss) of TRG (1)                        (0.8)                         6.5
TCO basis differences-
   Depreciation of TCO's additional basis                                (1.9)                        (1.9)
                                                                         ----                         ----
Income (loss) before distributions in excess of earnings
  allocable to minority interest - TCO                                   (2.6)                         4.5
Distributions in excess of earnings allocable to minority
  interest                                                               (3.1)                        (3.5)
                                                                         ----                         ----
Income (loss) from continuing operations allocable to TCO
  common shareowners                                                     (5.8)                         1.1
                                                                         ====                         ====

(1)      TCO's average  ownership of TRG was  approximately  61.8% and 61.4% during the three months ended June 30,
         2002 and 2001.
(2)      Amounts in this table may not add due to rounding.

                                                                   Six Months Ended             Six Months Ended
                                                                     June 30, 2002                June 30, 2001
                                                              ------------------------      -----------------------
                                                                         (in millions of dollars)

Funds from Operations-TRG                                                64.7                         56.9

Charge related to technology investments                                 (8.1)

Depreciation adjustments:
   Consolidated Businesses' depreciation and amortization               (40.9)                       (31.0)
   Minority partners in consolidated joint ventures
      share of depreciation and amortization                              2.3                          2.0
   Depreciation of TCO's additional basis                                 3.8                          3.8
   Non-real estate depreciation                                           1.4                          1.4
   Share of Unconsolidated Joint Ventures' depreciation and
     amortization                                                       (17.2)                       (10.6)
Discontinued operations' funds from operations                           (3.2)                        (3.5)
                                                                         ----                         ----
Income from continuing operations allocable to TRG unitholders            2.7                         19.0
                                                                         ====                         ====

TCO's ownership share of income of TRG (1)                                1.7                         11.4
TCO basis differences-
   Depreciation of TCO's additional basis                                (3.8)                        (3.8)
                                                                         ----                         ----
Income (loss) before distributions in excess of earnings
  allocable to minority interest - TCO                                   (2.1)                         7.6
Distributions in excess of earnings allocable to minority
  interest                                                               (6.8)                       (11.0)
                                                                         ----                         ----
Loss from continuing operations allocable to TCO common
  shareowners                                                            (8.8)                        (3.4)
                                                                         ====                         ====

(1)      TCO's  average  ownership  of TRG was  approximately  61.7% and 61.4% during the six months ended June 30,
         2002 and 2001.
(2)      Amounts in this table may not add due to rounding.

                                                         30

Dividends

   The Company pays regular  quarterly  dividends  to its common and Series A preferred  shareowners.  Dividends to
its common  shareowners  are at the  discretion of the Board of Directors  and depend on the cash  available to the
Company,  its  financial  condition,  capital  and  other  requirements,  and such  other  factors  as the Board of
Directors  deems  relevant.  To qualify as a REIT,  the Company  must  distribute  at least 90% of its REIT taxable
income to its shareowners,  as well as meet certain other  requirements.  Preferred  dividends accrue regardless of
whether  earnings,  cash  availability,  or  contractual  obligations  were to  prohibit  the  current  payment  of
dividends.  The  preferred  stock is callable in October 2002.  The Company has no present  intention to redeem the
preferred equity.

   On May 30, 2002, the Company  declared a quarterly  dividend of $0.255 per common share payable July 22, 2002 to
shareowners of record on July 1, 2002.  The Board of Directors  also declared a quarterly  dividend of $0.51875 per
share on the Company's 8.3% Series A Preferred Stock for the quarterly  dividend period ended June 30, 2002,  which
was paid on July 1, 2002 to shareowners of record on June 20, 2002.

   The Company  previously  reported its estimate of the tax status of total 2002 common dividends  declared and to
be declared,  assuming  continuation  of a $0.255 per common share  quarterly  dividend,  to be  approximately  28%
return of  capital  and 72% of  ordinary  income.  The tax status of total  2002  dividends  to be paid on Series A
Preferred  Stock was estimated to be 100% ordinary  income.  The effects on the tax status of dividends of the 2002
acquisitions and dispositions and other transactions are currently being determined.  Certain  significant  factors
could cause actual results to differ  materially,  including:  1) the amount of dividends  declared,  2) changes in
the Company's  share of anticipated  taxable income of the Operating  Partnership  due to the actual results of the
Operating  Partnership,  3) changes in the number of the Company's  outstanding shares, 4) property acquisitions or
dispositions,  5) financing transactions,  including refinancing of existing debt, 6) changes in interest rates, 7)
amount and nature of development activities, and 8) changes in the tax laws or their application.

   The annual  determination  of the  Company's  common  dividends is based on  anticipated  Funds from  Operations
available after preferred dividends,  as well as financing  considerations and other appropriate factors.  Further,
the Company has decided that the growth in common  dividends will be less than the growth in Funds from  Operations
for the  immediate  future.  Based on current  tax laws and  earnings  projections,  the Company  expects  that the
growth in common dividends will be less than the growth in Funds from Operations for at least three more years.

   Any  inability  of the  Operating  Partnership  or its Joint  Ventures to obtain  financing  as required to fund
maturing  debts,  capital  expenditures  and  changes in working  capital,  including  development  activities  and
expansions,  may  require  the  utilization  of  cash  to  satisfy  such  obligations,  thereby  possibly  reducing
distributions  to partners  of the  Operating  Partnership  and funds  available  to the Company for the payment of
dividends.

                                                         31

Capital Spending

   Capital  spending for routine  maintenance  of the shopping  centers is generally  recovered  from tenants.  The
following table summarizes  capital  spending  through June 30, 2002 that is not recovered from tenants.  The table
excludes   acquisitions  of  interests  in  operating  centers  (see  Results  of  Operations  -  Acquisitions  and
Dispositions).

                                                        For the Six Months Ended June 30, 2002
                                          -------------------------------------------------------------------------
                                                                                     Beneficial Interest in
                                                                Unconsolidated       Consolidated Businesses
                                             Consolidated            Joint             and Unconsolidated
                                              Businesses         Ventures (1)         Joint Ventures (1)(2)
                                          -------------------------------------------------------------------------
                                                           (in millions of dollars)

Development, renovation, and expansion:
   Existing centers                               3.5                  (1.4)                    2.8
   New centers                                   26.7 (3)              34.7  (4)               44.4
   Pre-construction development activities,
     net of charge to operations                  4.3                                           4.3
   Mall tenant allowances (5)                     2.4                   2.3                     3.4
   Corporate office improvements
     and equipment                                1.4                                           1.4
   Other                                          0.7                   0.1                     0.7
                                                 ----                  ----                    ----
Total                                            39.0                  35.7                    57.0
                                                 ====                  ====                    ====

(1)      Costs are net of intercompany profits.
(2)      Primarily  includes the Operating  Partnership's  share of construction costs for Stony Point Fashion Park
         and The Mall at Millenia (a 50% owned unconsolidated joint venture).
(3)      Primarily includes costs related to Stony Point Fashion Park.
(4)      Primarily includes costs related to The Mall at Millenia.
(5)      Excludes tenant allowances for the new centers.

   For the six months ended June 30, 2002,  in addition to the costs above,  the Company  incurred its $4.0 million
share of capitalized  leasing costs and its $1.4 million share of repair and asset  replacement  costs that will be
reimbursed  by tenants.  Also during  this  period,  the  Company  was  reimbursed  by tenants for $2.9  million of
capitalizable  expenditures of  prior  periods. The  expenditures  reimbursable  by  the  tenants and  the  related
reimbursements are classified as recoverable expenses and expense recoveries, respectively, and both  are  included
in the Company's Funds from Operations.

   The  following  table  summarizes  planned  capital  spending  for the entire  year of 2002  (including  amounts
described in the table above) that is not recovered  from tenants.  The table  excludes  acquisitions  of interests
in operating centers (see Results of Operations - Acquisitions and Dispositions).

                                                                     2002
                                          -------------------------------------------------------------------------
                                                                                     Beneficial Interest in
                                                                Unconsolidated       Consolidated Businesses
                                             Consolidated            Joint             and Unconsolidated
                                              Businesses         Ventures (1)         Joint Ventures (1)(2)
                                          -------------------------------------------------------------------------
                                                           (in millions of dollars)

Development, renovation, and expansion           49.6 (3)             99.3 (4)                 99.3
Mall tenant allowances (5)                        9.6                 16.3                     17.4
Pre-construction development and other            8.0                  0.3                      8.1
                                                 ----                -----                    -----
Total                                            67.2                115.9                    124.8
                                                 ====                =====                    =====

(1)      Costs are net of intercompany profits.
(2)      Primarily  includes the Operating  Partnership's  share of construction  costs for The Mall at Millenia (a
         50% owned unconsolidated joint venture) and Stony Point Fashion Park.
(3)      Primarily includes costs related to Stony Point Fashion Park.
(4)      Primarily includes costs related to The Mall at Millenia.
(5)      Excludes tenant allowances for the new centers.

                                                         32

   The Operating  Partnership has entered into a 50%-owned joint venture to develop The Mall at Millenia  currently
under  construction in Orlando,  Florida.  This project is expected to cost  approximately $200 million and open in
October  2002.  The Mall at Millenia  will be anchored by  Bloomingdale's,  Macy's,  and Neiman  Marcus.  Currently
there are fully  executed  leases on over 80% of the tenant space and leases out for signature on  over  15% of the
tenant  space.  The  Company  expects  the  center  to  be  between  75%  to  80%  occupied  at  opening,  with 90%
occupancy  anticipated  by the  beginning  of December  2002.  The Company  expects to achieve an 11% return of the
project at stabilization, which is anticipated to be in 2003.

   Stony Point Fashion Park, a new 690,000 square foot open-air center under  construction  in Richmond,  Virginia,
will be anchored by Dillard's,  Saks, and Galyan's.  The center,  scheduled to open in September  2003, is expected
to cost  approximately  $115 million.  Currently,  30% of the available tenant space has fully executed leases.  An
additional  30% of tenant space is committed  with leases out for signature  and an additional  28% of tenant space
is under negotiation.

   The  Company's  approximately  $26 million  balance of  development  pre-construction  costs as of June 30, 2002
consists  primarily of costs relating to its Oyster Bay project in Syosset,  New York.  Both Neiman Marcus and Lord
& Taylor  have made  announcements  committing  to the  project.  Although  the  Company  still needs to obtain the
necessary  zoning  approvals  to move forward with the  project,  the Company is  encouraged  by the New York State
Supreme  Court's recent decision to annul the  unfavorable  zoning actions of the Oyster Bay Town Board.  While the
Company expects continued success with ongoing  litigation,  the process may not be resolved in the near future. In
addition,  if the litigation is unsuccessful,  the Company would expect to recover substantially less than its cost
in this project under possible alternative uses for the site.

   The Operating  Partnership  and The Mills  Corporation  have formed an alliance to develop value  super-regional
projects  in major  metropolitan  markets.  The amended  agreement,  which  expires in May 2008,  calls for the two
companies to jointly develop and own at least four of these centers,  each representing  approximately $200 million
of capital investment. A number of locations across the nation are targeted for future initiatives.

   The  Operating  Partnership  anticipates  that its  share of costs  for  development  projects  scheduled  to be
completed  in 2003 will be as much as $80  million in 2003.  Estimates  of future  capital  spending  include  only
projects  approved by the Company's  Board of Directors  and,  consequently,  estimates will change as new projects
are approved.  Estimates  regarding  capital  expenditures,  occupancy,  and returns on new developments  presented
above are  forward-looking  statements  and certain  significant  factors could cause the actual  results to differ
materially,  including  but  not  limited  to:  1)  actual  results  of  negotiations  with  anchors,  tenants  and
contractors,  2) changes in the scope and number of  projects,  3) cost  overruns,  4) timing of  expenditures,  5)
financing  considerations,  6) actual time to complete  projects,  7) changes in economic  climate,  8) competition
from others attracting tenants and customers,  9) increases in operating costs, 10) timing of tenant openings,  and
11) early lease terminations and bankruptcies.

Cash Tender Agreement

   A. Alfred Taubman has the annual right to tender to the Company units of  partnership  interest in the Operating
Partnership  (provided  that the  aggregate  value is at least $50  million)  and cause the Company to purchase the
tendered  interests at a purchase price based on a market  valuation of the Company on the trading date immediately
preceding  the date of the tender (the Cash Tender  Agreement).  At A. Alfred  Taubman's  election,  his family and
certain  others may  participate  in tenders.  The  Company  will have the option to pay for these  interests  from
available  cash,  borrowed  funds,  or from the proceeds of an offering of the Company's  common stock.  Generally,
the  Company  expects to finance  these  purchases  through  the sale of new  shares of its  stock.  The  tendering
partner  will bear all market  risk if the market  price at closing is less than the  purchase  price and will bear
the costs of sale.  Any proceeds of the  offering in excess of the  purchase  price will be for the sole benefit of
the Company.

   Based on a market value at June 30, 2002 of $15.25 per common  share,  the  aggregate  value of interests in the
Operating  Partnership that may be tendered under the Cash Tender  Agreement was  approximately  $376 million.  The
purchase of these  interests at June 30, 2002 would have resulted in the Company  owning an additional 30% interest
in the Operating Partnership.

                                                         33

                                                      PART II

                                                 OTHER INFORMATION

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

   The  information  required by this item is included  in this report at Item 2 under the caption  "Liquidity  and
Capital Resources - Sensitivity Analysis".

Item 4.  Submission of Matters to a Vote of Security Holders

   On May 30, 2002, the Company held its annual meeting of shareholders.  The matters on which  shareholders  voted
were: the election of two directors to serve a three year term, and the  ratification  of the Board's  selection of
Deloitte & Touche LLP as the  Company's  independent  auditors  for the year ended  December  31,  2002.  Robert S.
Taubman and Lisa A. Payne were re-elected at the meeting,  and the six remaining  incumbent  directors continued to
hold office after the meeting.  The shareholders  ratified the selection of the independent  auditors.  The results
of the voting are shown below:

                                               ELECTION OF DIRECTORS

         NOMINEES                   VOTES FOR                 VOTES WITHHELD

         Robert S. Taubman          54,792,572                  17,460,754

         Lisa A. Payne              72,176,216                      77,110

   In May 2002,  Institutional  Shareholder Services issued a report recommending  shareholders withhold votes from
Robert S. Taubman for standing as an insider on the Nominating Committee of the Company's Board of Directors.

                                             RATIFICATION OF AUDITORS

                    71,265,573              Votes were cast for ratification;

                       965,243              Votes were cast against ratification; and

                      22,510                Votes abstained (including broker non-votes).

Item 5.  Other Information

   None.

Item 6.  Exhibits and Reports on Form 8-K

a)       Exhibits

                   10 (a)  --   Amended and Restated Agreement of Partnership of Sunvalley Associates, a
                                California general partnership.

                   10 (b)  --   First Amendment to the Second  Amendment and Restatement of  Agreement  of  Limited
                                Partnership of the Taubman Realty  Group Limited  Partnership  dated  September 30,
                                1998.

                   12      --   Statement Re:  Computation of Taubman  Centers,  Inc. Ratio of Earnings to Combined
                                Fixed Charges and Preferred Dividends and Distributions.

                   99 (a)  --   Debt Maturity Schedule

                   99 (b)  --   Debt Maturity Schedule

               b)  Current Reports on Form 8-K.

                   None

                                                         34

                                                    SIGNATURES

   Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has caused
this report to be signed on its behalf by the undersigned thereunto duly authorized.

                                                                       TAUBMAN CENTERS, INC.

Date:        August 14, 2002                                  By:  /s/ Lisa A. Payne
                                                                   -------------------------------------
                                                                   Lisa A. Payne
                                                                   Executive Vice President,
                                                                   Chief Financial and Administrative Officer,
                                                                   and Director

                                                         35

                                                  FIRST AMENDMENT
                                                        TO
                     THE SECOND AMENDMENT AND RESTATEMENT OF AGREEMENT OF LIMITED PARTNERSHIP
                                                        OF
                                   THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP

         THIS FIRST  AMENDMENT (this  "Amendment") TO THE SECOND  AMENDMENT AND RESTATEMENT OF AGREEMENT OF LIMITED
PARTNERSHIP OF THE TAUBMAN REALTY GROUP LIMITED  PARTNERSHIP  (the  "Partnership  Agreement") is made as of the 4th
day of March,  1999 by, between,  and among TAUBMAN  CENTERS,  INC., a Michigan  corporation,  TG PARTNERS  LIMITED
PARTNERSHIP,  a Delaware limited  partnership,  and TAUB-CO MANAGEMENT,  INC., a Michigan  corporation,  who as the
Appointing  Persons  pursuant to Section 13.11 of the  Partnership  Agreement  have the full power and authority to
amend the  Partnership  Agreement  on behalf of all the  partners in the  Partnership  with  respect to the matters
provided in this Amendment.
                                                     RECITALS:

      A.      On  September 30, 1998, the parties to this Amendment entered  into the  Partnership  Agreement as an
              amendment and  restatement  of the  then-existing  partnership  agreement  (the "Amended and Restated
              Agreement") of The Taubman Realty Group Limited  Partnership,  a Delaware  limited  partnership  (the
              "Partnership"), as authorized under Section 13.11 of the Amended and Restated Agreement.
      B.      As  authorized under Section  13.11  of the Partnership Agreement, the  parties  wish  to  amend  the
              Partnership  Agreement  to  facilitate  a proposed  pledge of Units of  Partnership  Interest  in the
              Partnership.
         NOW,  THEREFORE,  the parties,  intending to be legally  bound,  agree that the  Partnership  Agreement is
amended as set forth below.

   1.             Section 8.1(b) of the  Partnership  Agreement is amended by inserting the following as the  third
                  and final paragraph of Section 8.1(b):

                  In addition to the foregoing,  in connection  with a financing  transaction,  any Record
                  Partner  (other  than TCO) may pledge some or all of the Units of  Partnership  Interest
                  that such Record Partner owns on the effective  date of the pledge (the "Pledge  Units")
                  to any Person (the  "Pledgee"),  subject to the restrictions set forth in this paragraph
                  of  Section  8.1(b).  Before  effecting  the pledge of any Pledge  Units,  the  pledging
                  Partner must first  receive a Transfer  Determination  with  respect to the pledge,  and
                  the Pledgee must irrevocably agree,  pursuant to a written instrument  acceptable to the
                  Managing General  Partner,  that (A) unless (i) the Pledgee is a Person described in the
                  preceding  paragraphs of this Section  8.1(b) as a Person to whom a Partner may Transfer
                  its  Partnership  Interest (a  "Permitted  Transferee")  and (ii) the  Managing  General
                  Partner  has  agreed,  in  writing,  to the  admission  of the  Pledgee as a  substitute
                  Partner with  respect to some or all of the Pledge  Units upon a default  under the loan
                  to be secured by the  pledge of Pledge  Units,  (B) the  Pledgee  (1) shall not,  at any
                  time,  have or exercise  any rights as a Partner with respect to any of the Pledge Units
                  (including  any right to  consent  or vote with  respect  to any  matter  affecting  the
                  Partnership),   other  than  (a)  the  right  to  receive  any  distributions  from  the
                  Partnership  that are or may be payable  with  respect  to the Pledge  Units as and when
                  the same become payable and (b) the right to receive the return of any  contribution  to
                  which the pledging  Partner would be entitled with respect to the Pledge Units,  and (2)
                  shall not, upon the pledging  Partner's  default or otherwise,  have any right (or claim
                  or attempt to exercise  any right) to  Transfer  (or cause the  Transfer  of) the Pledge
                  Units (or any  interest in the Pledge  Units)  other than to TCO in exchange  for Equity
                  Shares or another Permitted Transferee.

   2.             The parties confirm that the Partnership Agreement,  as expressly amended by this  Amendment,  is
                  and shall remain in full force and effect.

         IN WITNESS WHEREOF, the parties have entered into this Amendment as of the date first written above.

                                                     TAUBMAN CENTERS, INC., a Michigan corporation

                                                     By:      /s/ Robert S. Taubman
                                                              ______________________________
                                                              Robert S. Taubman

                                                     Its:     President and Chief Executive Officer

                                                     TG PARTNERS LIMITED PARTNERSHIP, a
                                                     Delaware limited partnership

                                                     By:      TG Michigan, Inc.

                                                     Its:     Managing General Partner

                                                     By:      /s/ A. Alfred Taubman
                                                              _____________________________
                                                              A. Alfred Taubman

                                                     Its:     Chairman of the Board

                                                     TAUB-CO MANAGEMENT, INC., a
                                                     Michigan corporation

                                                     By:      /s/ Robert S. Taubman
                                                              _____________________________
                                                              Robert S. Taubman

                                                     Its:     President and Chief Executive Officer

                                   AMENDED AND RESTATED AGREEMENT OF PARTNERSHIP
                                                         OF
                                                SUNVALLEY ASSOCIATES
                                         a California general partnership

                                                  TABLE OF CONTENTS
                                    AMENDED AND RESTATED AGREEMENT OF PARTNERSHIP
                                                         OF
                                                SUNVALLEY ASSOCIATES
                                         a California general partnership

                                                                                                               PAGE

I.       CONTINUATION; NAME; PRINCIPAL PLACE OF BUSINESS;
         FILING OF CERTIFICATE(S); TERM; TITLE TO
         PARTNERSHIP PROPERTY; DEFINITIONS.

         Section 1.1        Continuation..........................................................................2
         Section 1.2        Name..................................................................................3
         Section 1.3        Principal Office......................................................................3
         Section 1.4        Filing of Certificate(s) as Required..................................................3
         Section 1.5        Term..................................................................................3
         Section 1.6        Title to Partnership Property.........................................................4
         Section 1.7        Definitions...........................................................................4

II.      PURPOSES AND POWERS; REPRESENTATIONS AND
         WARRANTIES.

         Section 2.1        Purposes.............................................................................11
         Section 2.2        Powers...............................................................................12
         Section 2.3        Representations and Warranties.......................................................12
         Section 2.4        Authority and Liability of Partners..................................................14

III.     PARTNERS' INITIAL CAPITAL CONTRIBUTIONS; ADDITIONAL FUNDS;
         FINANCING; CAPITAL ACCOUNTS; PARTNERSHIP INTEREST;
         PERCENTAGE INTERESTS.

         Section 3.1        Partners' Initial Capital Contributions..............................................14
         Section 3.2        Additional Funds; Anticipated Financing..............................................15
         Section 3.3        No Interest on Capital Contributions or Capital Accounts.............................18
         Section 3.4        Capital Accounts.....................................................................18
         Section 3.5        Partnership Interest; Percentage Interests...........................................20

                                                          i

IV.      ALLOCATIONS; PROFITS AND LOSSES; DISTRIBUTIONS;
         BANK ACCOUNTS; BOOKS OF ACCOUNT; TAX RETURNS;
         PARTNERSHIP FISCAL YEAR.

         Section 4.1        Allocations..........................................................................21
         Section 4.2        Distributions of Available Cash......................................................26
         Section 4.3        Bank Accounts........................................................................27
         Section 4.4        Books of Account and Reports.........................................................28
         Section 4.5        Tax Returns..........................................................................29
         Section 4.6        Partnership Fiscal Year..............................................................29

V.       MANAGEMENT; EXECUTION OF LEGAL INSTRUMENTS;
         OTHER VENTURES.

         Section 5.1        Management; Authority of the Managing Partner;
                            Limitations on Authority.............................................................29
         Section 5.2        Response of the Partners.............................................................35
         Section 5.3        Compensation of Partners and Affiliates..............................................35
         Section 5.4        Execution of Legal Instruments.......................................................37
         Section 5.5        Other Ventures.......................................................................37
         Section 5.6        Indemnity and Reimbursement..........................................................38
         Section 5.7        Tax Matters Partner..................................................................38
         Section 5.8        Specific Provisions Relating to Real Estate Investment
                            Trust Status.........................................................................40

VI.      TRANSFERS OF PARTNERSHIP INTERESTS.

         Section 6.1        General Restrictions on Dispositions.................................................42
         Section 6.2        Substitution of Partners.............................................................43
         Section 6.3        Transfers of Interests in Certain Partners...........................................44
         Section 6.4        Right of First Refusal...............................................................45
         Section 6.5        Buy-Sell.............................................................................47
         Section 6.6        Sale of the Project..................................................................49
         Section 6.7        Closings.............................................................................50
         Section 6.8        Pledge of Partnership Interests......................................................52

VII.     DISABLING EVENT IN RESPECT OF A PARTNER;
         SUCCESSION OF INTERESTS.

         Section 7.1        Disabling Event in Respect of a Partner..............................................53
         Section 7.2        Single Representative to Act on Behalf of Successors.................................54
         Section 7.3        Succession by Individuals to Partnership Interests of Partners.......................55
         Section 7.4        References to "Partner" and "Partners" in the Event of Successors....................55
         Section 7.5        Waiver of Dissolution if Transfer is in Full Compliance with
                            Agreement; Negation of Right to Dissolve Except as
                            Herein Provided; No Withdrawal.......................................................56
         Section 7.6        Determination of Fair Market Value of Partnership Interests..........................57

                                                         ii

VIII.    WINDING UP, LIQUIDATION, AND TERMINATION OF THE PARTNERSHIP.

         Section 8.1        Liquidation of the Assets of the Partnership and Disposition
                            of the Proceeds Thereof..............................................................59
         Section 8.2        Cancellation of Certificates.........................................................61

IX.      MISCELLANEOUS.

         Section 9.1        Exculpation..........................................................................62
         Section 9.2        Notices..............................................................................62
         Section 9.3        Applicable Law.......................................................................63
         Section 9.4        Word Meanings; Gender................................................................63
         Section 9.5        Section Titles.......................................................................63
         Section 9.6        Entire Agreement.....................................................................64
         Section 9.7        Waiver...............................................................................64
         Section 9.8        Separability of Provisions...........................................................64
         Section 9.9        Binding Agreement....................................................................64
         Section 9.10       Equitable Remedies...................................................................64
         Section 9.11       Partition............................................................................65
         Section 9.12       Amendment............................................................................65
         Section 9.13       No Third Party Rights Created Hereby.................................................66
         Section 9.14       Liability of Partners................................................................66
         Section 9.15       Additional Acts and Instruments......................................................66
         Section 9.16       Organization Expenses................................................................66
         Section 9.17       Agreement in Counterparts............................................................66
         Section 9.18       Attorneys-in-Fact....................................................................67
         Section 9.19       Consents, Approvals, Etc.............................................................67
         Section 9.20       Separateness Covenants...............................................................67
         Section 9.21       Bankruptcy-Related Covenants; Lender's Consent.......................................69
         Section 9.22       Management of SunValley LLC..........................................................71

         Exhibit A         The Property

                                                         iii

                                    AMENDED AND RESTATED AGREEMENT OF PARTNERSHIP
                                                         OF
                                                SUNVALLEY ASSOCIATES
                                          a California general partnership

                  THIS  AMENDED AND  RESTATED  AGREEMENT OF  PARTNERSHIP  (hereinafter,  as the same may be amended
and/or   supplemented,  referred  to  as  this  "Agreement") is  dated  as  of  the  14th  day  of  May,  2002, and
is made by, between,  and among TRG SUNVALLEY LLC ("TRG LLC"), a Delaware  limited  liability  company,  as general
partner,  whose  sole  member  is The  Taubman  Realty  Group  Limited  Partnership  ("TRG"),  a  Delaware  limited
partnership,  TAUBMAN SUNVALLEY ASSOCIATES LIMITED PARTNERSHIP ("TSA"), a Michigan limited partnership,  as general
partner,  composed of A.T.  Associates,  Inc., as its general partner,  and A. Alfred Taubman, not individually but
as Trustee of the A.  Alfred  Taubman  Restated  Revocable  Trust,  as amended  and  restated  in its  entirety  by
Instrument  dated January 10, 1989 and  subsequently  by Instrument  dated June 25, 1997, as the same may hereafter
be amended from time to time (the "AAT Trust"),  as its limited  partner,  and A.T.  SUNVALLEY  ASSOCIATES  LIIMTED
PARTNERSHIP  ("ATSA"),  a  Michigan  limited  partnership,  as  general  partner,  composed  of  Taubman  SunValley
Associates I, Inc., as its general  partner,  and the AAT Trust,  as its limited  partner.  (TRG LLC, TSA, and ATSA
are hereinafter  sometimes referred to, collectively,  as "Partners" and,  individually,  as a "Partner".) (TSA and
ATSA are hereinafter sometimes referred to, collectively, as "Taubman".)

                                                      Recitals:

         A.       TSA, ATSA, and Sun GEPT Realty  Associates  Limited  Partnership  ("GEPTS"),  a Delaware  limited
partnership,  were  all of  the  partners  in  SunValley  Associates  (the  "Partnership"),  a  California  general
partnership,  pursuant to a certain Agreement of Partnership of SunValley  Associates,  dated March 15, 1990 and as
amended by the First  Amendment to Agreement of

                                                          1

Partnership  of SunValley  Associates,  dated August 24, 2000 (the "Original Partnership Agreement").
         B.       The  Partnership  is the owner of one  hundred  percent  (100%) of the  membership  interests  in
SunValley  Shopping Center LLC ("SunValley  LLC"), a Delaware limited liability  company,  which owns the Property,
upon which is  situated a  first-class  regional  retail  shopping  center and  certain  other  structures  as more
particularly  described  on  Exhibit A  hereto.  (The  Property  and the  foregoing  improvements  are  hereinafter
referred to as the "Shopping Center".)
         C.       On the date of this Agreement,  GEPTS  transferred all of its right,  title,  and interest in and
to the Partnership, such interest constituting a fifty percent (50%) interest in the Partnership, to TRG LLC.
         D.       Accordingly,  TRG LLC,  TSA,  and ATSA now wish to amend and restate in its entirety the Original
Partnership  Agreement  to reflect the  admission  of TRG LLC as a partner of the  Partnership,  to provide for new
terms of the Partnership, and for certain other purposes.
         Now,  therefore,  the parties hereto agree that the Original  Partnership  Agreement is hereby amended and
restated in its entirety to read as follows:

                                                    ARTICLE I.
                                 CONTINUATION; NAME; PRINCIPAL PLACE OF BUSINESS;
                                      FILING OF CERTIFICATE(S); TERM; TITLE TO
                                        PARTNERSHIP PROPERTY; DEFINITIONS.

Section 1.1       Continuation.
                  The parties hereto hereby continue the Partnership as a California general  partnership  pursuant
to the laws of the  State of  California,  including  the  Uniform  Partnership  Act as in  effect  in the State of
California,  all as the same may be amended  from time to time (all of such laws being  hereinafter  referred to as
the "Partnership Law"), upon the terms and conditions herein set forth.

                                                          2

Section 1.2       Name.
                  The  name of the  Partnership  is  "SunValley  Associates"  or such  other  name as the  Managing
Partner (as herein defined) shall select from time to time in compliance with the Partnership Law.
Section 1.3       Principal Office.
                  The  principal  office of the  Partnership  is  located  at 200 East Long Lake  Road,  Bloomfield
Hills,  Michigan 48304.  The Partnership  shall have an office at such other  address(es) as may be designated from
time to time by the  Managing  Partner  with  written  notice  thereof  to the  Non-Managing  Partners  (as  herein
defined).  The name and address of the registered  agent for service of process on the  Partnership in the State of
California  is  Corporation  Service  Company which will do business in  California  as  CSC-Lawyers  Incorporation
Service, at 2730 Gateway Oaks Drive, Suite 100, Sacramento, California  95833.
Section 1.4       Filing of Certificate(s) as Required.
                  The Partners  shall cause the execution and filing of an appropriate  partnership  and/or assumed
or fictitious name  certificate or  certificates,  or like instrument or instruments,  at any time and from time to
time as  required  by law to  permit  the  Partnership  to  conduct  business  as a legal  entity  in the  State of
California  or otherwise in  connection  with the existence of the  Partnership  and/or the use of a name,  and all
amendments  thereto of record.  The Partners  shall do all acts and things  requisite for the continued  formation,
perfection, and maintenance of the Partnership as a general partnership pursuant to the Partnership Law.
Section 1.5       Term.
                  The term of the  Partnership  shall end,  and the  Partnership  shall  dissolve,  on the first to
occur of:
                  (i)      the sale or  other  disposition  of all,  or  substantially  all,  of the  Partnership's
         assets;
                  (ii)     the unanimous written consent of the Partners agreeing to dissolve the Partnership; or

                                                          3

                  (iii)    the  occurrence of any event which would,  under the  Partnership  Law  (notwithstanding
         the provisions of this Agreement) or under the terms of this  Agreement,  result in the dissolution of the
         Partnership;  provided,  however,  that the term of the  Partnership  shall not end upon the occurrence of
         such an event if the Partnership is reconstituted or otherwise continues as provided in this Agreement.
Section 1.6       Title to Partnership Property.
                  All property owned by the Partnership,  whether real or personal,  tangible or intangible,  shall
be deemed to be owned by the Partnership as an entity,  and no Partner,  individually,  shall have any ownership of
such  property.  The  Partnership  may hold any of its assets in its own name or in the name of a  nominee.  If the
Partnership  takes title to any property in the name of a trust,  this  Agreement  shall act as an agreement  among
the beneficiaries.
Section 1.7       Definitions.
                  Unless the context in which a term is used  clearly  indicates  otherwise,  the  following  terms
shall have the following respective meanings when used in this Agreement:

"AAT Trust" is defined in the Preamble to this Agreement.

"Accountant" is defined in Section 4.5 hereof.

"Adjustment Notice" is defined in Section 7.6 hereof.

"Adjustments" is defined in Section 7.6 hereof.

"Affiliate"  means (i) with respect to any individual,  any member of such  individual's  Immediate Family and/or a
Family  Trust with  respect to such  individual,  and any  organization  (x) in which  such  individual  and/or his
Affiliate(s)  own, directly or indirectly,  more than twenty-five  percent (25%) of any class of equity security or
of the aggregate  Beneficial  Interest of all beneficial  owners,  or (y) in which such individual or his Affiliate
is the sole general partner,  or is the managing general partner,  or which is Controlled By such individual and/or
his Affiliates,  directly or indirectly; and (ii) with respect to any corporation,  partnership,  limited liability
company,  trust,  or other  organization,  whether or not considered to be a legal entity,  any other  corporation,
partnership,  limited  liability  company,  trust, or other  organization,  whether or not considered to be a legal
entity,  which  Controls,  is Controlled  By, or is Under Common Control With,  the  first-referenced  corporation,
partnership,  limited liability company,  trust, or other organization,  and any individual who is the sole general
partner  or the  managing  general  partner  of, or who  directly  or  indirectly  Controls,  the  first-referenced
corporation, partnership, limited liability company, trust, or other organization.

"Agreement" is defined in the Preamble to this Agreement.

                                                          4

"Annual Budget" is defined in Section 5.1(d) hereof.

"ATAI" is defined in Section 9.21 hereof.

"ATSA" is defined in the Preamble to this Agreement.

"Available  Cash" means the excess of the  Partnership's  cash and cash  equivalents over the amount of cash needed
by the Partnership,  as reasonably  determined by the Managing Partner,  to (i) service the Partnership's debts and
obligations  to Third  Parties  (including,  without  limitation,  the  Mezzanine  Loan),  (ii) to the  extent  not
prohibited  by the  Mezzanine  Loan,  service the  Partnership's  debts and  obligations  to the  Partners or their
Affiliates as provided in this Agreement,  (iii) maintain  adequate capital and reserves for, by way of example and
not limitation,  capital improvements,  working capital, and reasonably  foreseeable needs of the Partnership,  and
(iv) conduct its business and carry out its purposes.

"Bankrupt" or  "Bankruptcy"  as to any Person means (i) applying for or consenting  to the  appointment  of, or the
taking of possession by, a receiver,  custodian,  trustee,  administrator,  liquidator, or the like of itself or of
all or a substantial portion of its assets,  (ii) admitting in writing its inability,  or being generally unable or
deemed unable under any  applicable  law, to pay its debts as such debts become due,  (iii)  convening a meeting of
creditors for the purpose of consummating an out-of-court arrangement,  or entering into a composition,  extension,
or similar  arrangement,  with  creditors in respect of all or a  substantial  portion of its debts,  (iv) making a
general  assignment  for the  benefit  of its  creditors,  (v)  placing  itself  or  allowing  itself  to be placed
voluntarily   under  the  protection  of  the  law  of  any  jurisdiction   relating  to  bankruptcy,   insolvency,
reorganization,  winding-up,  or  composition  or  adjustment  of debts,  (vi) taking any action for the purpose of
effecting  any of the  foregoing,  or (vii) if a proceeding  or case shall be commenced  against such Person in any
court  of  competent  jurisdiction,  seeking  (a) the  liquidation,  reorganization,  dissolution,  winding-up,  or
composition or  readjustment  of debts,  of such Person,  (b) the  appointment of a trustee,  receiver,  custodian,
administrator,  liquidator,  or the like of such Person or of all or a substantial portion of such Person's assets,
or (c) similar relief in respect of such Person under any law relating to bankruptcy,  insolvency,  reorganization,
winding-up,  or composition or adjustment of debts,  and such  proceeding or case shall continue  undismissed for a
period of ninety (90) Days, or an order,  judgment,  or decree  approving or ordering any of the foregoing shall be
entered  and  continue  unstayed  and in effect for a period of sixty  (60)  Days,  or an order for relief or other
legal  instrument of similar effect against such Person shall be entered in an involuntary  case under such law and
shall continue for a period of sixty (60) Days.

"Beneficial  Interest"  means an  interest,  whether as  partner,  member,  joint  venturer,  cestui que trust,  or
otherwise,  a contract right or a legal or equitable  position under or by which the possessor  participates in the
economic  or other  results of the  business  organization  to which such  interest,  contract  right,  or position
relates.

"Best Efforts" is defined to require that the obligated party make a diligent,  commercially  reasonable,  and good
faith effort to accomplish the applicable  objective.  Such obligation,  however,  does not require the expenditure
of funds or the  incurrence  of any  liability  on the part of the  obligated  party,  nor does it require that the
obligated  party act in a manner  which  would  otherwise  be  contrary  to  prudent  business  judgment  or normal
commercial  practices  in order  to  accomplish  the  objective.  The  fact  that  the  objective  is not  actually
accomplished  is no indication  that the obligated  party did not in fact utilize its Best Efforts in attempting to
accomplish the objective.

"Board of Directors" means the Board of Directors of TCO.

                                                          5

"Book Value" is defined in Section 3.4(b) hereof.

"Business Day" means any Day that is not a Saturday,  Sunday,  or legal holiday in San Francisco,  California,  and
on which commercial banks are open for business in San Francisco, California.

"Buyer" is defined in Section 6.4(a) hereof.

"Buy-Sell Offer" is defined in Section 6.5(a) hereof.

"Capital Account" is defined in Section 3.4(a) hereof.

"Change  of Control  Event"  means (i) any loss of the right of A.  Alfred  Taubman,  any  member of his  Immediate
Family,  any heir of the  foregoing,  any trust for the benefit of the  foregoing  and any  partnership  or limited
liability  company  or  corporation  Controlled  By some or all of the  foregoing  (for  any  reason  other  than a
voluntary  sale of  shares of TCO by one (1) or more of the  foregoing  Persons)  to  nominate  at least  three (3)
members of the Board of Directors,  or (ii) the  acquisition by any person or group or persons  (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities  Exchange Act of 1934, as amended,  other than A. Alfred Taubman,
any  members  of his  Immediate  Family,  any  heir of the  foregoing,  any  trust  for the  benefit  of any of the
foregoing,  any private charitable foundation,  or any partnership,  limited liability company or corporation owned
or  Controlled  By some or all of the  foregoing,  of  beneficial  ownership  (within  the  meaning  of Rule  13d-3
promulgated  under  the  Securities  Exchange  Act of  1934,  as  amended)  of forty  percent  (40%) or more of the
outstanding voting capital stock of TCO.

"Code" means the Internal  Revenue Code of 1986,  as amended from time to time (or any  corresponding  provision of
succeeding law).

"Communication" and "Communications" are defined in Section 9.2(a) hereof.

"Contribution Notice" is defined in Section 3.2(d) hereof.

"Control" (and its  correlative  terms  "Controlled  By" and "Under Common Control With") means with respect to any
corporation,  partnership,  limited liability company, trust, or other business organization,  possession, directly
or  indirectly,  by the  applicable  individual or individuals of the power to direct or cause the direction of the
management and policies thereof, whether through the ownership of voting securities, by contract, or otherwise.

"Day" or "Days" means each calendar day,  including  Saturdays,  Sundays,  and legal holidays;  provided,  however,
that if the Day on which a period of time for  consent or  approval  or other  action  ends is not a Business  Day,
such period shall end on the next Business Day.

"Defaulting Partner" is defined in Section 3.2(e) hereof.

"Deficit Partner(s)" is defined in Section 3.2(b) hereof.

"Depreciation"  means  for  each  Fiscal  Year  of  the  Partnership  or  other  period,  an  amount  equal  to the
depreciation,  amortization,  or other cost recovery  deduction  allowable  under the Code with respect to an asset
for such year or other  period,  except  that if the Book Value of an asset  differs  from its  adjusted  basis for
federal  income tax purposes at the beginning of such year or other period,  Depreciation  shall be an amount which
bears the same ratio to such beginning Book Value as the federal income tax  depreciation,  amortization,  or other
cost  recovery  deduction  for such year or other period  bears to such  beginning  adjusted  tax basis;  provided,
however,  that if the federal  income tax  depreciation,  amortization,  or other cost recovery  deduction for such
year

                                                          6

is zero,  Depreciation shall be determined with  reference to such beginning Book Value using any reasonable method
selected by the Managing Partner.

"Disabled Partner" is defined in Section 7.1(a)(ii) hereof.

"Disabling Event" is defined in Section 7.1(a)(i) hereof.

"Equity  Security" has the meaning  ascribed to it in the  Securities  Exchange Act of 1934, as amended to the date
hereof, and the rules and regulations thereunder.

"Event of Withdrawal" is defined in Section 7.1(a)(iv) hereof.

"Excess Partner(s)" is defined in Section 3.2(b) hereof.

"Excess Payment(s)" is defined in Section 3.2(b) hereof.

"Exercise Notice" is defined in Section 6.4(a) hereof.

"Exercise Period" is defined in Section 6.4(a) hereof.

"Family  Trust" means with respect to an individual,  a trust for the benefit solely of such  individual or for the
benefit of any member or members of his Immediate  Family or for the benefit of such  individual  and any member or
members of such  individual's  Immediate Family (for the purpose of determining  whether or not a trust is a Family
Trust,  the fact that one or more of the  beneficiaries  (but not the sole  beneficiary)  of the trust  includes  a
Person  or  Persons,  other  than  a  member  of  such  individual's  Immediate  Family,  entitled  to a  principal
distribution  if he, she, it, or they shall have survived the settlor of such trust,  which  distribution  is to be
made of something other than a Partnership  Interest and/or includes an organization or  organizations  exempt from
federal income tax pursuant to the  provisions of Section 501(a) of the Code and described in Section  501(c)(3) of
the Code shall be disregarded);  provided,  however, that in respect of transfers by way of a testamentary or inter
vivos trust,  the trustee or trustees  shall be solely such  individual,  a member or members of such  individual's
Immediate  Family,  a responsible  financial  institution,  an attorney that is a member of the Bar of any State in
the United  States,  or an individual  or  individuals  approved by that Partner or those  Partners then holding an
aggregate Percentage Interest of at least eighty percent (80%).

"Fiscal Year" means (i) the period  commencing on the effective  date of this Agreement and ending on the following
December 31, (ii) any  subsequent  twelve (12) month period  commencing  on January 1 and ending on December 31, or
(iii) any  portion of any period  described  in clause  (ii) for which the  Partnership  is  required  to  allocate
Profits, Losses, and other items of Partnership income, gain, loss or deduction pursuant to Section 4.1 hereof.

"GEPTS" is defined in Recital A.

"Gross  Income" means the income of the  Partnership  and the net gain from sales of  Partnership  property  before
deduction of items of expense or deduction.

"Guarantor" is defined in Section 3.2(b) hereof.

"Immediate  Family"  means  with  respect to any  individual,  such  individual's  spouse  (past or then  current),
descendants (natural or adoptive),  grandparents,  parents, siblings of the whole or half blood, and descendants of
parents of such individual's spouse (past or then current).

                                                          7

"Initiating Partner" is defined in Section 6.5(a) hereof.

"Liquidator" is defined in Section 8.1(a) hereof.

"Losses" is defined in Section 4.1(a) hereof.

"Major Decision" is defined in Section 5.1(c) hereof.

"Management  and  Leasing  Agreement"  means that  certain  management  and leasing  agreement  dated March 8, 1980
between TTC (as successor to The Taubman  Company  Limited  Partnership)  and the  Partnership,  as the same may be
amended, from time to time, as permitted by this Agreement.

"Managing Partner" is defined and designated in Section 5.1(a) hereof.

"Mezzanine  Loan" means that certain  mezzanine loan in the principal  amount of Ten Million Dollars  ($10,000,000)
made to  the Partnership  by Connecticut  General Life Insurance  Company or its affiliates but shall not include a
loan held by  any  unaffiliated  successor  lender (other than a securitization  pool, trust formed for the purpose
of  accomplishing  a securitization, or trustee with respect thereto).

"Minimum Gain" means an amount determined in accordance with Regulations Section  1.704-2(b)(2),  by computing with
respect to each nonrecourse  liability (as defined in Regulations  Section  1.704-2(b)(3)) of the Partnership,  the
amount of gain (of  whatever  character),  if any,  that  would be  realized  by the  Partnership  if (in a taxable
transaction)  it  disposed  of  property  subject  to such  liability  in full  satisfaction  thereof,  and by then
aggregating the amounts so computed.

"Net Value" is defined in Section 7.6 hereof.

"Non-Defaulting Partner(s)" is defined in Section 3.2(e) hereof.

"Non-Initiating Partner" is defined in Section 6.5(a) hereof.

"Non-Managing Partners" means the Partner(s) that are not the Managing Partner.

"Non-Pledging Partner" is defined in Section 6.8(iii) hereof.

"Non-Triggering Partner" is defined in Section 6.6(a) hereof.

"Offer" is defined in Section 6.4(a) hereof.

"Original Partnership Agreement" is defined in Recital A.

"Partner" and "Partners" are defined in the Preamble to this Agreement.

"Partnership" is defined in Recital A.

"Partnership Interest" is defined in Section 3.5(a) hereof.

"Partnership Law" is defined in Section 1.1 hereof.

"Partnership Minimum Gain" is defined in Regulations Section 1.704-2(b)(2).

                                                          8

"Partner Nonrecourse Debt" is defined in Regulations Section 1.704-2(b)(4).

"Partner Nonrecourse Debt Minimum Gain" is defined in Section 4.1(d)(3) hereof.

"Percentage Interest" is defined in Section 3.5(b) hereof.

"Person" means an individual,  a partnership (general or limited),  limited liability company,  corporation,  joint
venture,  business  trust,  cooperative,  association,  or other  form of  business  organization,  whether  or not
regarded as a legal entity under applicable law, a trust (inter vivos and  testamentary),  an estate of a deceased,
insane,  or incompetent  Person,  a  quasi-governmental  entity, a government or any agency,  authority,  political
subdivision, or other instrumentality thereof, or any other entity.

"Pledge"  means any pledge,  encumbrance,  hypothecation,  or other  assignment  of a  Partnership  Interest or any
proceeds  thereof as collateral for a loan to or for the benefit of the Partner whose  Partnership  Interest or the
proceeds thereof has been pledged.

"Pledge Documents" is defined in Section 6.8 hereof.

"Pledgee" is defined in Section 6.8(i) hereof.

"Pledgee Rights" means any of a Pledgee's rights under a loan or pledge agreement,  including,  without limitation,
foreclosure,  a transfer in lieu of  foreclosure,  or sale pursuant to the applicable  commercial  code.  "Pledgee
Right" means any one (1) of the Pledgee Rights.

"Pledging Partner" is defined in Section 6.8 hereof.

"Prime"  means that rate of  interest  equal to the prime rate of interest  announced  as such from time to time by
the  Partnership's  principal  bank, or if such bank ceases to announce such a rate, the average of the prime rates
prevailing from time to time at the two (2) national banks in the State of California  having the largest  deposits
for the calendar quarter immediately preceding the date that the prime rate is to be determined.

"Profits" is defined in Section 4.1(a) hereof.

"Property"  means those certain  leasehold and  subleasehold  estates and other  property owned in fee by SunValley
LLC, located in Concord,  California,  and as more  particularly  described on Exhibit A attached hereto and made a
part hereof and, if the context so requires,  any direct or indirect  interests  therein owned by the  Partnership,
including, by way of example and not of limitation, the Subsidiary Company Membership Interest."

"Regulations"  means the Income Tax Regulations  promulgated under the Code as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).

"Regulatory Allocations" is defined in Section 4.1(d)(6) hereof.

"REIT" means a real estate investment trust.

"REIT Partner" is defined in Section 5.8 hereof.

"Renewal Management and Leasing Agreement" is defined in Section 5.3(b) hereof.

                                                          9

"Required Funds" is defined in Section 3.2(b) hereof.

"Return" means a variable return, recalculated and compounded monthly, equal to Prime plus one percent (1%).

"Sale Offer" is defined in Section 6.6(a) hereof.

"Seller" is defined in Section 6.4(a) hereof.

"Shopping Center" is defined in Recital B.

"Special Purpose General Partner" is defined in Section 9.21 hereof.

"Subject Interest" is defined in Section 6.4(a) hereof.

"Subsidiary Company Membership Interest" is defined in Section 2.1 hereof.

"Successor" is defined in Section 7.1(a)(iii) hereof.

"SunValley LLC" is defined in Recital B.

"SV" is defined in Section 2.1 hereof.

"Taubman" is defined in the Preamble to this Agreement.

"Tax Matters Partner" is defined in Section 5.7(a) hereof.

"TCO" means Taubman Centers, Inc., a Michigan corporation.

"Third  Party" or "Third  Parties"  means a Person or Persons who is or are  neither a Partner or  Partners  nor an
Affiliate or Affiliates of a Partner.

"Total Price" is defined in Section 6.5(a) hereof.

"Transfer" means any assignment, sale, transfer, conveyance,  encumbrance,  Pledge, granting of an option or proxy,
or other disposition or act of alienation.

"Triggering Partner" is defined in Section 6.6(a) hereof.

"Trigger Notice" is defined in Section 6.6(a) hereof.

"TRG" is defined in the Preamble to this Agreement.

"TRG Excess Contributions" is defined in Section 3.2(c) hereof.

"TRG LLC" is defined in the Preamble to this Agreement.

"TSA" is defined in the Preamble to this Agreement.

"TSVAI" is defined in Section 9.21 hereof.

                                                         10

"TTC" means The Taubman Company LLC, a Delaware limited liability company, or any successor thereto.

"Valuation Date" is defined in Section 7.6 hereof.

                                                    ARTICLE II.
                                               PURPOSES AND POWERS;
                                          REPRESENTATIONS AND WARRANTIES.

Section 2.1       Purposes.
                  The Partnership  has been organized,  pursuant to the Partnership Law and in accordance with this
Agreement,  for the purpose of (i) acquiring,  in exchange for a capital  contribution  consisting of the Property,
and holding a membership  interest (the  "Subsidiary  Company  Membership  Interest") in SunValley LLC,  including,
without limitation,  interests  incidental to the Subsidiary Company Membership Interest such as, by way of example
and not  limitation,  any  receivables  due from SunValley LLC, with all of the rights and  obligations of a member
therein,  as well as, without limitation,  any and all rights to acquire,  sell, pledge and otherwise deal with the
Subsidiary Company  Membership  Interest and/or any of the assets of SunValley LLC, and to act in all respects as a
member therein  pursuant to applicable law and any agreements;  (ii) entering into any agreement in connection with
the business of SunValley  LLC,  including but not limited to, the operating  agreement  for SunValley  LLC;  (iii)
forming, owning, acquiring,  transferring,  disposing,  pledging, or otherwise dealing with the capital stock of SV
Shopping Center,  Inc. a Delaware  corporation ("SV") which is serving as SunValley LLC's Springing Member (as such
term is defined in the operating  agreement of SunValley  LLC) and acting in all respects as a stockholder  therein
pursuant to applicable  law and any  agreements;  (iv) making  capital  contributions  to SunValley LLC and SV; (v)
borrowing  funds  pursuant to the  Mezzanine  Loan;  and (vi)  engaging in any other  activities  determined by the
Partners  that are  permitted by the

                                                         11

Partnership  Agreement  and the  Partnership  Law and that are  incidental or related to the foregoing.
Section 2.2        Powers.
                  The  Partnership  shall have all such powers that are necessary or  appropriate  to carry out its
purposes as described in Section 2.1 hereof,  including,  without limitation,  the right to contribute funds to and
take all actions and  decisions in respect of or  pertaining  to SunValley  LLC and SV, the right to be admitted to
SunValley  LLC,  the right to become a  stockholder  of SV,  the right to enter  into the  operating  agreement  of
SunValley  LLC and agree to any one or more  amendments  to (or the  termination  of) the  operating  agreement  of
SunValley  LLC,  and the  right  to  acquire,  sell,  assign,  exchange,  encumber,  or  otherwise  dispose  of the
Partnership's assets, including the Subsidiary Company Membership Interest and the capital stock of SV.
Section 2.3       Representations and Warranties.
         (a)      TRG LLC hereby represents and warrants to TSA and ATSA as follows:
                  (i)      TRG LLC is a Delaware limited liability  company,  duly formed,  validly existing and in
         good standing under the laws of the State of Delaware.
                  (ii)     This Agreement has been duly authorized,  validly executed,  and constitutes the binding
         obligation of and is  enforceable  against TRG LLC in accordance  with its terms.  TRG LLC has full power,
         authority,  and capacity to enter into this  Agreement  and to carry out its  obligations  as described in
         this Agreement.
                  (iii)    No litigation or proceedings,  including,  without limitation  arbitration  proceedings,
         are  pending  or, to the best  knowledge  of TRG LLC,  threatened  against  TRG LLC  which,  if  adversely
         determined,  could  individually  or in the aggregate have an adverse effect on the  consummation  and the
         performance of this Agreement by TRG LLC.

                                                         12

                  (iv)     TRG LLC is not a "foreign  person" within the meaning of the Foreign  Investment in Real
         Property Tax Act of 1980, as amended.
                  (v)      TRG LLC is wholly owned by TRG.
         (b)      TSA hereby represents and warrants to TRG LLC as follows:
                  (i)      TSA is a  Michigan  limited  partnership,  duly  formed,  validly  existing  and in good
         standing under the laws of the State of Michigan.
                  (ii)     This Agreement has been duly authorized,  validly executed,  and constitutes the binding
         obligation  of and is  enforceable  against  TSA in  accordance  with  its  terms.  TSA  has  full  power,
         authority,  and capacity to enter into this  Agreement,  and to carry out its  obligations as described in
         this Agreement.
                  (iii)    No litigation or proceedings,  including,  without limitation  arbitration  proceedings,
         are pending or, to the best knowledge of TSA,  threatened  against TSA or any of its Affiliates  which, if
         adversely  determined,  could  individually or in the aggregate have an adverse effect on the consummation
         and the performance of this Agreement by TSA.
                  (iv)     TSA is not a "foreign  person"  within the  meaning of the  Foreign  Investment  in Real
         Property Tax Act of 1980, as amended.
                  (v)      The sole  partners of TSA are A.T.  Associates,  Inc., as general  partner,  and the AAT
         Trust, as limited partner.
         (c)      ATSA hereby represents and warrants to TRG LLC as follows:
                  (i)      ATSA is a Michigan  limited  partnership,  duly  formed,  validly  existing  and in good
         standing under the laws of the State of Michigan.
                  (ii)     This Agreement has been duly authorized,  validly executed,  and constitutes the binding
         obligation  of and is  enforceable  against  ATSA in  accordance  with its  terms.  ATSA  has full  power,
         authority,  and capacity to enter into this  Agreement  and to carry out its  obligations  as described in
         this Agreement.

                                                         13

                  (iii)    No litigation or proceedings,  including,  without limitation  arbitration  proceedings,
         are pending or, to the best knowledge of ATSA,  threatened  against ATSA or any of its  Affiliates  which,
         if  adversely  determined,  could  individually  or in  the  aggregate  have  an  adverse  effect  on  the
         consummation and the performance of this Agreement by ATSA.
                  (iv)     ATSA is not a "foreign  person"  within the  meaning of the Foreign  Investment  in Real
         Property Tax Act of 1980, as amended.
                  (v)      The sole  partners  of ATSA are  Taubman  SunValley  Associates,  I,  Inc.,  as  general
         partner, and the AAT Trust, as limited partner.
         (d)      The  representations  and  warranties  in this Section 2.3 shall  survive the  formation  and the
termination of the Partnership.
Section 2.4       Authority and Liability of Partners.
                  Except as otherwise  provided in this Agreement,  no Partner shall have any authority to act for,
bind,  commit,  or assume any obligation or  responsibility  on behalf of the Partnership,  its properties,  or the
other  Partners.  No Partner,  in its capacity as a Partner under this  Agreement,  shall be  responsible or liable
for any  indebtedness or obligation of the other  Partners,  nor shall the Partnership be responsible or liable for
any  indebtedness or obligation of any Partner,  incurred either before or after the execution and delivery of this
Agreement  by such  Partner,  except  as to  those  responsibilities,  liabilities,  indebtedness,  or  obligations
incurred pursuant to and as limited by the terms of the Original Partnership Agreement and this Agreement.

                                                   ARTICLE III.
                                     PARTNERS' INITIAL CAPITAL CONTRIBUTIONS;
                                  ADDITIONAL FUNDS; FINANCING; CAPITAL ACCOUNTS;
                                    PARTNERSHIP INTEREST; PERCENTAGE INTERESTS.

Section 3.1       Partners' Initial Capital Contributions.
                  As of the date hereof, the Partners (or their  predecessors-in-interest)  have contributed to the
capital of the  Partnership as set forth on the books and records of the

                                                         14

Partnership.  As of the date hereof, the Capital Account balances of the Partners are as set forth on the books and
records of the Partnership.
Section 3.2       Additional Funds; Anticipated Financing.
         (a)      In order to carry on the business of the  Partnership,  the Partners  acknowledge  that funds may
be required in addition to the capital  contributions  reflected in Section 3.1 hereof.  All such additional  funds
will be obtained  as provided in this Section 3.2.
         (b)      It is the intent of the Partners to obtain,  and the Managing  Partner shall use its Best Efforts
to obtain,  all funds  required  to pay for costs,  expenses,  and fees  contained  in an  approved  Annual  Budget
("Required  Funds")  from the  proceeds  of loans from Third  Parties,  pursuant  to such  terms,  provisions,  and
conditions  and in such  manner  (including  the  engagement  of  brokers  and/or  investment  bankers to assist in
providing  such  financing) as the Managing  Partner  shall  determine.  The Managing  Partner shall seek to obtain
Partnership  financing on a basis which is without  recourse to the  Partners.  Such  financing may be secured by a
mortgage or mortgages on all or any portion of the  Property  and/or the  Partnership's  interest  therein.  In the
event that a Partner or its  Affiliate  (a  "Guarantor")  is  required to make any  payment  under any  guaranty or
indemnity  executed by such Guarantor in connection  with any  Partnership  financing,  then in such event,  (i) if
each Partner in the Partnership,  or its Affiliate,  is a Guarantor and if such payments are made by all Guarantors
and are in the same ratio as the  respective  Percentage  Interests of their  affiliated  Partners,  such  payments
shall be treated as  additional  capital  contributions  by the Partners and shall be credited to their  respective
Capital  Accounts,  and (ii) if any Partner,  or its Affiliate,  who is a Guarantor makes a payment that is greater
than its pro rata share of the aggregate  amount of the total  payments made by all Partners (or their  Affiliates)
under,  or in respect of, such  guaranty  or  indemnity  based upon its (or its  affiliated  Partner's)  Percentage
Interest  (the  Partner(s)  affiliated  with such  paying  Guarantor  being  referred  to  herein  as the  "Excess
Partner(s)",  and the amount of the disproportionate  payment, the "Excess  Payment(s)");  and within ten (10) Days
after receipt of notice from the Excess  Partner(s),  the Partner (or its  Affiliate)  that has made a payment that
is less than  (including

                                                         15

making no payment at all) such  Partner's  pro rata share of such total  payment based on its  Percentage  Interest
(the  "Deficit  Partner(s)")  has not paid the Excess  Partner(s)  an amount (up to  each  Deficit  Partner's  pro
rata share)  equal to the Excess  Payment(s),  the  Excess  Payments(s)  shall  be  treated as  additional  capital
contributions by the Excess Partner(s) and shall be credited  to  its(their)  Capital  Account(s), and  the  Excess
Partner(s),  as its(their) sole remedy,  shall have the right to dilute  the Percentage  Interest of  the   Deficit
Partner(s)  in  accordance  with  Section  3.2(e) hereof.  If a Deficit  Partner(s)  pays the Excess Partner(s)  an
amount equal to the Excess  Payment(s)  within the  prescribed  ten (10) Day period,  then the total payments  made
by the  Excess  Partner(s)  under the guaranty  or indemnity (excluding  an  amount equal to the reimbursed  Excess
Payment(s)),  and the total  payments  made by the Deficit  Partner(s) under such  guaranty or indemnity as well as
any Excess Payment(s) made by the Deficit Partner to the Excess Partner(s), shall be treated as additional  capital
contributions  by the paying  Partners and shall be credited to their  respective  Capital Accounts.  Each  Partner
hereby  waives any and all rights it may have  against  the  Partnership  to recover  any payment(s) made  by  such
Partner (or its Affiliate) as a Guarantor.
         (c)      To the extent  Required  Funds are not available from Third Parties as provided in Section 3.2(b)
hereof,  the Managing  Partner may elect to contribute  the Required Funds to the capital of the  Partnership.  All
funds ("TRG Excess  Contributions")  contributed to the capital of the Partnership by the Managing Partner pursuant
to this  Section  3.2(c) shall bear the Return from and after the date of  contribution  to the  Partnership  until
distributed in full to the Managing Partner pursuant to this Agreement.
         (d)      To the extent  Required  Funds are not available from Third Parties as provided in Section 3.2(b)
hereof,  and the Managing  Partner elects not to contribute  the Required  Funds to the capital of the  Partnership
pursuant to Section  3.2(c) hereof,  upon the request of the Managing  Partner,  the Partners shall  contribute all
such Required  Funds to the capital of the  Partnership  in proportion to their  respective  Percentage  Interests.
The Managing  Partner  shall make any such request by written  notice (a  "Contribution  Notice") to the  Partners,
identifying  the amount of the

                                                         16

Required Funds,  each Partner's  share of the Required Funds,  and the date on which the  Required  Funds are to be
contributed,  which date shall be not less than  thirty (30) Days after the date of the Contribution Notice.
         (e)      In the  event  that  any  Partner  (a  "Defaulting  Partner")  fails  to  contribute  timely  its
proportionate  share,  determined in accordance  with its  Percentage  Interest,  of any Required Funds pursuant to
Section  3.2(d)  hereof or  reimburse  timely an Excess  Partner  pursuant  to  Section  3.2(b)  hereof,  the other
Partner(s),  or any one of them (the  "Non-Defaulting  Partner(s)") may give the Defaulting  Partner written notice
of such  default.  The  Defaulting  Partner  shall then have ten (10) Business Days after receipt of such notice to
cure its default.  If the  Defaulting  Partner fails to cure its default  within such ten (10) Business Day period,
such default shall constitute an event of default whereupon the Non-Defaulting  Partner(s),  or any one of them, as
its(their)  sole and exclusive  remedy,  may reduce the Defaulting  Partner's  Percentage  Interest to a percentage
equal to the ratio  (expressed as a percentage)  that the Defaulting  Partner's total  contributions to the capital
of the Partnership  (excluding TRG Excess  Contributions,  if any) bears to the total contributions of all Partners
to the capital of the  Partnership  (excluding  TRG Excess  Contributions,  if any). The amount of the reduction of
the  Defaulting  Partner's  Percentage  Interest shall be added to the  Percentage  Interest of the  Non-Defaulting
Partner(s),  and the  adjustments  shall become  effective  as of the last Day of the ten (10)  Business Day period
referred to above.
                  Notwithstanding  anything  set  forth  in  this  Agreement  to the  contrary,  if the  Percentage
Interest of TRG LLC or Taubman (it being  understood that the Percentage  Interests of the members of Taubman shall
be aggregated for this purpose) falls below  twenty-five  percent (25%),  TRG LLC or Taubman,  as applicable,  will
lose its consent rights with respect to Partnership decisions.
         (f)      The  provisions  of this Section 3.2 are intended to serve only for the benefit of the  Partners,
inter se, and no Third Party shall have any right  whatsoever to benefit from the  provisions  hereof.  None of the
provisions of this Agreement  shall be construed as existing for the

                                                         17

benefit of any creditor of the  Partnership or of any creditor of any of the Partners,  and none of such provisions
shall be enforceable by any Person who is not a Partner.
Section 3.3       No Interest on Capital Contributions or Capital Accounts.
                  Except as provided for in this  Agreement  with respect to the Return,  no Partner  shall receive
any  interest or return in the nature of interest on its  contributions  to the capital of the  Partnership,  or on
the positive balance, if any, in its Capital Account.
Section 3.4       Capital Accounts.
         (a)      The Partnership shall establish and maintain a separate capital account  ("Capital  Account") for
each Partner,  including a substituted  partner,  who shall pursuant to the provisions hereof acquire a Partnership
Interest, which Capital Account shall be:
                  (1)      credited  with the amount of cash and the then  current  Book Value (net of  liabilities
         secured by such  contributed  property  that the  Partnership  assumes or takes  subject  to) of any other
         property  contributed  by such  Partner to the capital of the  Partnership,  such  Partner's  distributive
         share of Profits,  any items in the nature of income or gain that are specially  allocated to such Partner
         pursuant to Section 4.1 hereof, and the amount of any Partnership  liabilities  assumed by such Partner or
         which are secured by any property distributed to such Partner; and
                  (2)      debited  with the amount of cash and the then  current  Book  Value (net of  liabilities
         secured by such  distributed  property that such Partner  assumes or takes subject to) of any  Partnership
         property  distributed  to such  Partner  pursuant  to any  provision  of this  Agreement,  such  Partner's
         distributive  share of Losses,  items in the nature of expense  or loss that are  specially  allocated  to
         such Partner  pursuant to Section 4.1 hereof,  and the amount of any  liabilities of such Partner  assumed
         by the Partnership or which are secured by any property contributed by such Partner to the Partnership.
                  In the event  that a  Partner's  Partnership  Interest  or a portion  thereof is  transferred  in
accordance  with the  provisions of this  Agreement,  the  transferee  shall succeed to the Capital

                                                         18

Account of the transferor to  the extent  that  it relates  to  the  Partnership  Interest or  portion  thereof  so
transferred.
                  In the event that the Book  Values of  Partnership  assets are  adjusted  as  described  below in
Section  3.4(b)  hereof,  the Capital  Accounts of all  Partners  shall be adjusted  simultaneously  to reflect the
aggregate net  adjustments as if the  Partnership  recognized gain or loss for federal income tax purposes equal to
the amount of such aggregate net adjustment.
                  The foregoing  provisions and the other provisions of this Agreement  relating to the maintenance
of Capital  Accounts are intended to comply with Section  1.704-1(b) of the  Regulations,  and shall be interpreted
and applied as provided in the  Regulations.  In the event that the Managing  Partner  reasonably  determines  that
the manner in which the Capital  Accounts,  or any debits or credits thereto,  are maintained or computed under the
Regulations  should be further  reflected in an amendment  hereto,  the  Partners  shall enter into an  appropriate
amendment to this Agreement.
         (b)      For the purpose of this Agreement,  the term "Book Value" means,  with respect to any asset, such
asset's adjusted basis for federal income tax purposes, except:
                  (1)      the initial Book Value of any asset  contributed by a Partner to the  Partnership  shall
         be the gross fair market value of such asset;
                  (2)      the  Book  Value  of all  Partnership  assets  may be  adjusted,  as  determined  by the
         Managing  Partner to be  necessary  or  appropriate  to reflect the  relative  economic  interests  of the
         Partners,  to equal  their  respective  gross  fair  market  values  as of the  following  times:  (i) the
         acquisition  from the  Partnership,  in exchange  for more than a de minimis  capital  contribution,  of a
         Partnership  Interest by an  additional  partner or of an additional  Partnership  Interest by an existing
         Partner;  (ii) the  distribution  by the  Partnership  to a Partner  of more than a de  minimis  amount of
         Partnership  property  (including  money) as consideration  for an interest in the Partnership;  and (iii)
         the liquidation of the Partnership within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g);

                                                         19

                  (3)      if the Book Value of an asset has been  determined  or  adjusted  as provided in Section
         3.4(b)(1)  or  3.4(b)(2)  hereof,  the Book  Value of such  asset  shall  thereafter  be  adjusted  by the
         Depreciation  taken into account with respect to such asset for purposes of computing  Profits and Losses;
         and
                  (4)      the Book Value of any  Partnership  asset  distributed to any Partner shall be the gross
         fair market value of such asset on the date of distribution.
         (c)      In the event that any  provision  of this  Article III  requires  the  determination  of the fair
market value of any asset,  such fair market value shall be as  determined  by the Partners  provided that (i) such
value  is  reasonably  agreed  to by the  Partners  in  arm's-length  negotiations,  and  (ii)  the  Partners  have
sufficiently  adverse  interests as provided in  Regulations  Section  1.704-1(b)(2)(iv)(h).  In the event that the
requirements  of clauses  (i) and (ii) of this  Section  3.4(c) are not met,  then the fair  market  value shall be
determined by an appraiser  selected by the Managing  Partner,  and the cost of such appraisal  shall be an expense
of the Partnership.
         (d)      Except as otherwise  provided in this Agreement,  no Partner shall (i) have the right to withdraw
any part of its  Capital  Account or to demand or  receive  the return of its  capital  contributions,  or any part
thereof,  or to receive any  distributions  from the Partnership,  (ii) be entitled to make, or have any obligation
to make, any contribution to the capital of, or any loan to, the  Partnership,  or (iii) have any liability for the
return of any other Partner's Capital Account or contributions to the capital of the Partnership.
Section 3.5       Partnership Interest; Percentage Interests.
         (a)      For the purpose of this  Agreement,  the term  "Partnership  Interest"  means,  with respect to a
Partner,  such  Partner's  right to the  allocations  (and each item  thereof)  specified in Section 4.1 hereof and
distributions  from the  Partnership,  and all other  rights and  obligations  of such  Partner as provided in this
Agreement.
         (b)      For the purpose of this Agreement,  the term "Percentage  Interest"  means,  with respect to each
Partner,  the  percentage  set forth  opposite  its name,  as the same may be adjusted  pursuant to Section  3.2(e)
hereof:

                                                         20

                                                                                   Percentage
                                 Partner                                            Interest
                                 -------                                            --------

                                 TRG LLC                                            50.000%
                                   TSA                                              23.333%
                                  ATSA                                              26.667%

                                                    ARTICLE IV.

                                  ALLOCATIONS; PROFITS AND LOSSES; DISTRIBUTIONS;
                                   BANK ACCOUNTS; BOOKS OF ACCOUNT; TAX RETURNS;
                                              PARTNERSHIP FISCAL YEAR.

Section 4.1       Allocations.
         (a)      For the purpose of this  Agreement,  the terms  "Profits" and "Losses"  mean,  respectively,  for
each fiscal year of the  Partnership  or other period,  the  Partnership's  taxable  income or loss for such fiscal
year or other  period,  determined in accordance  with Section  703(a) of the Code (for this purpose,  all items of
income,  gain, loss, or deduction required to be stated separately  pursuant to Section 703(a)(1) of the Code shall
be included in taxable income or loss), adjusted as follows:
                  (1)      any income of the  Partnership  that is exempt from federal income tax and not otherwise
         taken into account in computing  Profits or Losses  pursuant to this Section 4.1(a) shall be added to such
         taxable income or loss;
                  (2)      in lieu of the  depreciation,  amortization,  and other cost recovery  deductions  taken
         into account in  computing  such taxable  income or loss,  there shall be taken into account  Depreciation
         for such fiscal year or other period;
                  (3)      any items that are specially  allocated  pursuant to Sections 4.1(d) hereof shall not be
         taken into account in computing Profits or Losses.
         (b)      After giving effect to the special  allocations set forth in Section 4.1(d) hereof,  Profits (and
each item thereof) for each Fiscal Year of the Partnership shall be allocated as follows:

                                                         21

                  (i)      First, to the Partners until the aggregate  amount of Profits  allocated to the Partners
         (or their  respective  predecessors-in-interest)  pursuant to this Section  4.1(b)(i)  (and Section 4.1 of
         the  Original  Partnership  Agreement)  for such  Fiscal Year and all prior  Fiscal  Years is equal to the
         aggregate  amount of Losses  allocated  to the  Partners  (or their  respective  predecessors-in-interest)
         pursuant to Section  4.1(c)(iii)  hereof (and Section 4.1 of the Original  Partnership  Agreement) for all
         prior Fiscal Years (in proportion to such amounts);
                  (ii)     Second,  to the  Partners  in  accordance  with the ratio in which any  Losses for prior
         Fiscal  Years were  allocated  pursuant  to Section  4.1(c)(ii)  hereof (and  Section 4.1 of the  Original
         Partnership  Agreement),  until the  aggregate  amount  of  Profits  allocated  pursuant  to this  Section
         4.1(b)(ii)  (and Section 4.1 of the  Original  Partnership  Agreement)  for such Fiscal Year and all prior
         Fiscal Years is equal to the aggregate amount of Losses allocated  pursuant to Section  4.1(c)(ii)  hereof
         (and Section 4.1 of the Original Partnership Agreement) for all prior Fiscal Years;
                  (iii)    Thereafter, to the Partners in accordance with their respective Percentage Interests.
         (c)      After giving effect to the special  allocations  set forth in Section 4.1(d) hereof,  Losses (and
each item thereof) for each Fiscal Year of the Partnership shall be allocated as follows:
                  (i)      First, to the Partners until the aggregate amount of Losses  allocated  pursuant to this
         Section  4.1(c)(i)  (and Section 4.1 of the Original  Partnership  Agreement) for such Fiscal Year and all
         prior  Fiscal  Years is equal to the  aggregate  amount of Profits  allocated  to the  Partners  (or their
         respective  predecessors-in-interest)  pursuant  to Section  4.1(b)(iii)  hereof  (and  Section 4.1 of the
         Original Partnership Agreement) for all prior Fiscal Years (in proportion to such amounts);
                  (ii)     Second,  to those Partners with positive  Capital  Account  balances  (determined by (1)
         taking into account the  adjustments,  allocations  and  distributions

                                                         22

         described  in   Regulations  Section  1.704-1(b)(2)(ii)(d)(4),  (5)  and  (6),  and  (2)  adding  to  such
         balances  each  Partner's  share  of Partnership  Minimum Gain and Partner Nonrecourse Debt Minimum Gain),
         in proportion to, and to the extent of, such positive Capital Account balances; and
                  (iii)    Thereafter, to the Partners in accordance with their respective Percentage Interests.
         (d)      The following special allocations shall be made solely for federal income tax purposes.
                  (1)      Qualified  Income  Offset.   In  the  event  any  Partner   unexpectedly   receives  any
adjustments,  allocations  or  distributions  described  in  Sections  1.704-1(b)(2)(ii)(d)(4),  (5)  or (6) of the
Regulations,  items of  Partnership  income and gain shall be specially  allocated to such Partner in an amount and
manner  sufficient to eliminate,  to the extent  required by the  Regulations,  the Capital  Account deficit of the
Partner as quickly as possible,  provided that an allocation  pursuant to this Section 4.1(d)(1) shall be made only
if and to the extent that the Partner would have a Capital  Account  deficit after all other  allocations  provided
for in this Section 4.1 have been tentatively made as if this Section 4.1(d)(1) were not in the Agreement.
                  (2)      Minimum  Gain  Chargeback.  If, for any Fiscal Year of the  Partnership,  there is a net
decrease in Partnership Minimum Gain (as that term is defined in Regulations Section  1.704-2(b)(2)),  each Partner
who has previously been allocated any nonrecourse  deductions or received  distributions  of proceeds  attributable
to any  nonrecourse  borrowing of the Partnership in any Fiscal Year of the  Partnership,  shall be allocated items
of  Partnership  income and gain for the Fiscal Year in which there is a net decrease in  Partnership  Minimum Gain
in proportion to such prior  allocations  equal to that Partner's share of the net decrease in Partnership  Minimum
Gain  consistently  with the  requirements of Regulations  Section 1.704-2.  The items to be allocated  pursuant to
this Section 4.1(d)(2) shall be determined in accordance with Regulations Section 1.704-2(f) and (j).

                                                         23

                  (3)      Partner  Minimum Gain  Chargeback.  In the event that there is a net decrease in Minimum
Gain  attributable to a Partner  Nonrecourse  Debt as defined in Regulations  Section  1.704-2(b)(4)  (such Minimum
Gain being  hereinafter  referred to as "Partner  Nonrecourse  Debt Minimum  Gain") for a Partnership  Fiscal Year,
then after taking into account  allocations  pursuant to Section 4.1(d)(2) hereof, but before any other allocations
are made for such  Partnership  Fiscal  Year,  and  subject  to the  exceptions  set forth in  Regulations  Section
1.704-2(i)(4),  each  Partner  with a share of Partner  Nonrecourse  Debt  Minimum  Gain at the  beginning  of such
Partnership  Fiscal Year shall be  allocated  items of income and gain for such  Partnership  Fiscal Year (and,  if
necessary,  for subsequent  Partnership  Fiscal Years) equal to such Partner's share of the net decrease in Partner
Nonrecourse  Debt Minimum Gain as determined in a manner  consistent  with the  provisions of  Regulations  Section
1.704-2(g)(2).  The items to be allocated  pursuant to this Section  4.1(d)(3)  shall be  determined  in accordance
with Regulations Section 1.704-2(i)(4) and (j).
                  (4)      Excess  Nonrecourse  Liabilities.  For the purpose of determining  each Partner's  share
of excess  nonrecourse  liabilities of the  Partnership,  and solely for such purpose,  each Partner's  interest in
Partnership  profits shall be reasonably  determined by the Managing  Partner in accordance  with Internal  Revenue
Service authority interpreting Regulations Section 1.752-3(a)(3).
                  (5)      Limitation on  Deductions.  No Partner  shall  receive an allocation of any  Partnership
deduction  or Loss that would cause the total  allocations  of Loss or items  thereof to such Partner to exceed the
amount of its Capital  Account  balance  increased by its share of Partnership  Minimum Gain,  Partner  Nonrecourse
Debt Minimum Gain,  and any other amount a Partner is  unconditionally  obligated to restore on  liquidation of the
Partnership.
                  (6)      Curative  Allocations.  The allocations set forth in Sections 4.1(d)(1),  (2), (3), (4),
and  (5)  hereof  (the  "Regulatory  Allocations")  are  intended  to  comply  with  certain  requirements  of  the
Regulations.  It is the intent of the Partners that, to the extent possible,  all Regulatory  Allocations  shall be
offset either with other Regulatory  Allocations or with special

                                                         24

allocations of other items of Partnership income, gain,  loss or  deduction  pursuant to  this  Section  4.1(d)(6).
Therefore,  notwithstanding  any other provision of this Section  4.1(d) (other than the  Regulatory  Allocations),
the Managing  Partner  shall make  such  offsetting  special  allocations  of  Partnership  income,  gain,  loss or
deduction  in  whatever  manner it  determines  to be  reasonably  appropriate  so  that,  after  such   offsetting
allocations  are made,  each Partner's  Capital  Account balance is, to the extent  possible,  equal to the Capital
Account  balance such  Partner  would have had if the Regulatory  Allocations  were not part of the  Agreement  and
all  Partnership  items were  allocated  pursuant  to Sections 4.1(b) and 4.1(c) hereof.
                  (7)      Code Section  704(c).  In  accordance  with  Sections  704(b) and 704(c) of the Code and
the  Regulations  thereunder,  income,  gain,  loss, and deduction with respect to any property  contributed to the
capital of the  Partnership  shall,  solely for federal income tax purposes,  be allocated among the Partners so as
to take  account of any  variation  between the  adjusted  basis of such  property to the  Partnership  for federal
income tax purposes  and the initial Book Value of such  property.  If the Book Value of any  Partnership  property
is adjusted  pursuant to Section 3.4(b) hereof,  subsequent  allocations of income,  gain, loss, and deduction with
respect to such asset shall take  account of any  variation  between the  adjusted  basis of such asset for federal
income tax purposes and the Book Value of such asset in the manner  prescribed  under Sections 704(b) and 704(c) of
the Code and the Regulations thereunder.
                  (8)      Section  754  Adjustments.   In  the  event  of  a  sale  or  exchange  of  a  Partner's
Partnership  Interest or a portion  thereof or upon the death of a Partner,  if the Partnership has not theretofore
elected,  pursuant to Section 754 of the Code, to adjust the basis of Partnership  property,  the Managing  Partner
shall cause the  Partnership to elect,  if the Person  acquiring such  Partnership  Interest or portion  thereof so
requests,  pursuant  to  Section  754 of the  Code,  to adjust  the basis of  Partnership  property.  The  Partners
acknowledge  that the Managing  Partner shall cause the  Partnership  to make the foregoing  election in connection
with the  transfer by GEPTS of its  Partnership  Interest to TRG LLC. In addition,  in the event of a  distribution
referred to in Section 734(b) of the Code, if the  Partnership has not theretofore

                                                         25

elected,  the Managing  Partner may, in the exercise of its  discretion,  cause the  Partnership to elect, pursuant
to Section 754 of the Code, to adjust the basis of Partnership  property. Except as provided in Regulations Section
1.704-1(b)(2)(iv)(m),  such adjustment  shall not be reflected in the  Partners'  Capital  Accounts  and  shall  be
effective solely for federal and (if applicable)  state and local income tax purposes.  Each Partner hereby  agrees
to provide the  Partnership  with all information necessary to give effect to such election.
                  (9)      Miscellaneous.  Except as provided in  Sections  4.1(d)(7)  and  4.1(d)(8)  hereof,  for
federal income tax purposes,  each item of income,  gain,  loss, or deduction shall be allocated among the Partners
in the same manner as its correlative item of "book" income,  gain, loss, or deduction has been allocated  pursuant
to Sections 4.1(b), (c), and (d) hereof.
                  (10)     Gross Income  Allocation.  For each Fiscal Year of the  Partnership,  Gross Income shall
be  allocated  (prior to any  allocations  pursuant to Sections  4.1(b) and 4.1(c)  hereof,  but after  taking into
effect the special  allocations  in Section  4.1(d)(1)-(9))  to TRG LLC to the extent of the Return  distributed to
TRG LLC pursuant to Section  4.2(a)(i)  hereof for the current Fiscal Year of the Partnership and  distributable to
TRG LLC  pursuant to Section  8.1(a)(5)  hereof if such Fiscal Year is the year in which the  Partnership  is to be
liquidated.  In addition,  to the extent that the  cumulative  amount of the Return  distributed to TRG LLC for all
prior Fiscal Years of the Partnership  exceeds the cumulative  amount of Gross Income allocated to TRG LLC pursuant
to this Section  4.1(d)(10),  then in the current  Fiscal  Year,  Gross Income shall be allocated to TRG LLC to the
extent of the  cumulative  amount of the Return  distributed  to TRG LLC as to which TRG LLC did not receive  Gross
Income allocations pursuant to this Section 4.1(d)(10).
Section 4.2       Distributions of Available Cash.
         (a)      Subject  to the  provisions  of  Sections  4.2(b)  and  8.1(a)  hereof,  Available  Cash shall be
distributed, as and when the Managing Partner shall determine, but not less frequently than quarterly, as follows:

                                                         26

                  (i)      to TRG LLC in an  amount  equal  to its  accrued  but  undistributed  Return  on the TRG
         Excess Contributions; and then
                  (ii)     to TRG LLC in an  amount  equal  to the  TRG  Excess  Contributions  to the  extent  not
         previously distributed to TRG LLC pursuant to this clause (ii); and then
                  (iii)    to the Partners in accordance with their respective Percentage Interests.
         (b)      Immediately  after repayment in full of the Mezzanine Loan, or sooner if the Partnership  obtains
the  lender's  consent,  the  following  provisions  shall  apply:   Notwithstanding   Section  4.2(a)  hereof  and
irrespective  of the order of priorities  therein set forth and subject to the provisions of Section 8.1(a) hereof,
to the extent that for any Fiscal Year of the  Partnership  while all or any portion of TRG's Excess  Contributions
remain  outstanding,  TSA or ATSA  receives an  allocation  of net taxable  income from the  Partnership  without a
concomitant  distribution  of Available  Cash (taking into account the cumulative  distributions  of Available Cash
previously  made to such Partner  pursuant to the  provisions  of Section  4.2(a)(iii)  hereof,  and by taking into
account on a cumulative  basis any losses (of the same  character) of the Partnership for prior Fiscal Years of the
Partnership),  the  Partnership  shall,  within  ninety  (90)  Days  after  the end of  such  Fiscal  Year,  make a
distribution of Available Cash to TSA and/or ATSA, in proportion to their  respective  Percentage  Interests,  such
that such  Partners are  distributed  an amount equal to the combined  federal and state tax liability of each such
Partner  determined by multiplying the  Partnership's  taxable income by the highest  marginal federal and State of
Michigan  income  tax  rates  applicable  to  individuals  in  effect  for such  Fiscal  Year.  The  amount  of any
distribution  pursuant  to this  Section  4.2(b)  shall be  credited,  on a  cumulative  basis,  against  any other
distributions  of  Available  Cash to be made to such Partner  pursuant to Section  4.2(a)(1)(iii)  and/or  Section
8.1(a)(7) hereof.
Section 4.3       Bank Accounts.
                  One or more  accounts in the name of the  Partnership  shall be  maintained in such bank or banks
as the  Managing  Partner  may from  time to time  select.  Any  checks  of the

                                                         27

Partnership  may be  signed by any Person(s) designated, from time to time, by the Managing Partner.
Section 4.4       Books of Account and Reports.
         (a)      The  Partnership  shall  maintain  at its  principal  office  and in  accordance  with  generally
accepted  accounting  principles,  complete and accurate books of account and records of its operations showing the
assets,  liabilities,  costs, expenditures,  receipts, profits, and losses of the Partnership and of SunValley LLC,
and which shall include  provision for separate  Capital Accounts for the Partners and shall provide for such other
matters and information as a Partner shall reasonably  request,  together with copies of all documents  executed on
behalf of the  Partnership.  Each  Partner and its  representatives,  duly  authorized  in writing,  shall have the
right to inspect and examine,  at all reasonable times, at the principal office of the Partnership,  all such books
of account, records, and documents.
         (b)      The Managing  Partner shall  deliver,  or cause to be  delivered,  to the  Non-Managing  Partners
within  ninety  (90) Days  after the end of each  Fiscal  Year of the  Partnership,  audited  financial  statements
prepared in accordance with generally accepted accounting principles.
         (c)      The Managing  Partner shall  deliver,  or cause to be  delivered,  to the  Non-Managing  Partners
within  forty-five (45) Days after the end of each calendar quarter,  unaudited  financial  statements  prepared in
accordance  with  accounting  principles  consistently  applied  on an  historical  basis and with such  additional
details  reasonably  requested  by the  Non-Managing  Partners  to  convert  such  financial  statements  into ones
consistent with generally accepted accounting principles.
         (d)      The Managing Partner shall also prepare,  or cause to be prepared,  on behalf of the Partnership,
such  financial  statements,  reports,  and other  information  as may be required by any Third Party lender of the
Partnership.
         (e)      The cost of all  reporting  provided for or  authorized  in this Section 4.4 shall be paid by the
Partnership.  Any Partner may, at any time, and at its sole expense,  cause an audit of the Partnership's  books to
be made by a certified public accountant of such Partner's own selection.

                                                         28

Section 4.5       Tax Returns.
                  The initial  accountant for the Partnership  (the  "Accountant")  shall be Deloitte & Touche LLP.
The Accountant  shall annually  audit the  Partnership's  books and records and prepare all applicable tax returns,
including  any  schedules or  additional  information  reasonably  required by any Partner in order to file its tax
returns,  all of the  foregoing  at the  expense  of the  Partnership.  The  Managing  Partner  shall  provide  the
Accountant  such  information  as is  reasonably  necessary  to permit the  Accountant  to prepare such tax returns
within  ninety (90) Days after the end of each Fiscal  Year of the  Partnership,  and the  Managing  Partner  shall
timely file such tax returns, subject to its right to file an extension.
Section 4.6       Partnership Fiscal Year.
                  The Partnership's fiscal and taxable year shall be the calendar year.

                                                    ARTICLE V.
                                                    MANAGEMENT;
                                          EXECUTION OF LEGAL INSTRUMENTS;
                                                  OTHER VENTURES.

Section 5.1       Management; Authority of the Managing Partner; Limitations on Authority.
         (a)      Except as otherwise  provided herein regarding Major Decisions,  the Partnership shall be managed
solely and  exclusively  by the managing  Partner (the  "Managing  Partner").  TRG LLC is hereby  designated as the
Managing  Partner.  The Managing  Partner  shall use its Best Efforts to carry out the purposes of the  Partnership
and shall have, in respect of its management of the  Partnership,  all of the powers of the  Partnership  and shall
devote such time and  attention to the  Partnership  as is reasonably  necessary  for the proper  management of the
Partnership and its properties;  it being  acknowledged  however that the Managing Partner shall not be required to
devote its time  exclusively to the operation of the  Partnership.  Except as otherwise  provided herein  regarding
Major  Decisions,  all  actions,  decisions,  determinations,  designations,  directions,  appointments,  consents,
approvals,  selections,  and the like, to be taken, made, or given by and/or with respect to the Partnership and/or
SunValley LLC, their respective  businesses and properties as well as management of all Partnership affairs,  shall
in each and  every  case be made  by,  and

                                                         29

only  by,  the  Managing  Partner,  and all  such  actions,  decisions, determinations,  designations,  directions,
appointments,  consents, approvals,  selections, and the like shall be controlling and binding upon the Partnership
and the Partners.
                  Accordingly,  the Managing  Partner shall have the exclusive  right,  power,  and  authority,  on
behalf of the Partnership,  subject only to the limitations set forth in this Agreement,  including  Section 5.1(c)
hereof,  and subject to carrying out the purposes of the Partnership,  to negotiate,  enter into,  perform,  amend,
and take all actions in respect of any and all agreements,  instruments,  and documents;  to cause SunValley LLC to
repair,  renovate,  rehabilitate,  and expand the Shopping  Center;  to acquire and cause SunValley LLC to acquire,
assets of any nature;  to borrow and cause  SunValley  LLC to borrow money,  incur and repay debts and  liabilities
and obligations, issue evidences of indebtedness,  and secure such indebtedness by granting mortgage(s),  liens, or
charges  upon any property of the  Partnership  or of SunValley  LLC; to cause the Managing  Partner,  in the event
that it decides to contribute  Required Funds to the capital of the Partnership  pursuant to Section 3.2(c) hereof,
to receive  the Return  thereon;  to cause  SunValley  LLC to operate,  maintain,  manage,  and lease the  Shopping
Center;  to cause SunValley LLC to enter into leases,  subleases,  and similar  related and ancillary  documents in
respect of the Shopping  Center;  to retain Third Parties on behalf of the  Partnership  and on behalf of SunValley
LLC, including,  without limitation,  architects,  engineers,  auditors,  attorneys,  consultants,  and brokers; to
maintain and cause  SunValley LLC to maintain,  insurance;  to obtain,  through  contract or  otherwise,  goods and
services;  and to  perform  all acts that a  Partner  may  legally  do  pursuant  to the  Partnership  Law that are
consistent with the terms of this Agreement.
         (b)      The Managing  Partner shall consult with and inform the  Non-Managing  Partners from time to time
as shall be reasonably  requested by the Non-Managing  Partners.  The Non-Managing  Partners shall have no right or
authority to act on behalf of or bind the  Partnership  in any manner  except as may  otherwise be agreed to by the
Managing Partner in writing.

                                                         30

         (c)      Notwithstanding  Sections  5.1(a) and 5.1(b)  hereof,  without the prior  written  consent of the
Non-Managing  Partners,  the Managing  Partner shall not have the power to bind the  Partnership in connection with
any of the following (each a "Major Decision"):
                  (i)      other than as  expressly  approved in an Annual  Budget and except  with  respect to any
         renovation  or expansion (x) required by law, (y) required by applicable  insurance  requirements,  or (c)
         made  pursuant to leases  entered into in the ordinary  course of business,  but in no event to exceed Two
         Hundred Fifty Thousand  Dollars  ($250,000) in the aggregate per annum, the decision to renovate or expand
         the Shopping Center;
                  (ii)     except for any financing to obtain  Required  Funds,  which financing does not require a
         guaranty  by TSA  and/or  ATSA  (and/or  any of  their  respective  Affiliates),  unless  such  guaranteed
         financing (and guaranty) had been  expressly  approved in the Annual Budget,  the financing or refinancing
         of the Shopping Center,  including the mortgaging or the placing or suffering of any other  encumbrance on
         the Shopping Center or any portion thereof or the guaranty of any such financing or refinancing;
                  (iii)    the sale or other  transfer of the  Partnership's  membership  interest in SunValley LLC
         or SunValley  LLC's  interest in the Property or the Shopping  Center (or any portion  thereof) other than
         in  accordance  with  Section  6.6  hereof  and other  than the  leasing  of the  Shopping  Center (or any
         portion(s) thereof) in the ordinary course of business;
                  (iv)     other than as provided in Section 1.5 hereof,  the  dissolution  and  liquidation of the
         Partnership or of SunValley LLC;
                  (v)      the  approval  of an Annual  Budget  for the  Partnership  and any  material  amendments
         thereto;
                  (vi)     other than in accordance  with Article 6 hereof,  the  admission of additional  Partners
         to the Partnership or members to SunValley LLC;

                                                         31

                  (vii)    the  selection  of the  manager of the  Shopping  Center  (except as provided in Section
         5.3(b) hereof  regarding TTC) or the removal of the manager of the Shopping Center  (including the removal
         of TTC);
                  (viii)   the  entering  into of contracts or  agreements  with any Partner or any  Affiliate of a
         Partner on behalf of the  Partnership or of SunValley LLC other than the Management and Leasing  Agreement
         or any  Renewal  Management  and Leasing  Agreement  as  provided  in Section  5.3(b)  hereof or any other
         contract or agreement  expressly  provided for and  authorized  in Section  5.3(b) hereof and the material
         amendment of any such contracts or agreements;
                  (ix)     the acquisition of any real property or interest  therein  including any interest in any
         Person owning real  property  other than the  Partnership's  interest in SunValley LLC or the expansion of
         the purposes of the Partnership beyond those specified in Section 2.1 hereof;
                  (x)      the making of any  investment  in, or any  advance to, any Person  other than  SunValley
         LLC;
                  (xi)     other than as to Required Funds  expressly  approved in an Annual  Budget,  the decision
         to call for capital from the Partners;
                  (xii)    the filing of any request or suit or the  entering  into of any  agreement  of extension
         requiring the consent of the Partners pursuant to Section 5.7 hereof;
                  (xiii)   the conduct of Partnership  operations in a manner  inconsistent  with the provisions of
         Section 5.8 hereof;
                  (xiv)    the confession of any judgment against the Partnership or SunValley LLC;
                  (xv)     the  execution  and  delivery  of any  assignment  for the benefit of  creditors  of the
         Partnership or of SunValley LLC;
                  (xvi)    the  filing  of  any  petition  seeking   reorganization,   readjustment,   arrangement,
         composition,  or similar  relief for the  Partnership  or for SunValley  LLC under the federal  bankruptcy
         laws or any similar law;

                                                         32

                  (xvii)   the  merger  or  other  business  combination  or  division  of  the  Partnership  or of
         SunValley LLC; and
                  (xviii)  the amendment of this Agreement.
         (d)      The  Managing  Partner  shall,  prior to  November  1st of each year,  prepare and present to the
Non-Managing  Partners,  an operating  budget for the  Partnership and SunValley LLC, which shall include a capital
expenditure  budget (the "Annual  Budget") for the next Fiscal Year. The Annual Budget shall  identify,  in general
terms,  the source of funding  for each item  contained  therein,  i.e.,  whether  capital  contributions  from the
Partners  or Third  Party  financing,  and the  proposed  material  terms  (including  whether  guaranties  will be
required) of any such Third Party  financing.  The Partners  agree that the Annual  Budget must provide for amounts
sufficient to maintain the Shopping  Center as a first-class  regional retail  shopping  center.  The Annual Budget
shall be subject to the approval of the  Non-Managing  Partners.  If a  Non-Managing  Partner  objects to an Annual
Budget,  such Partner shall submit to the Managing  Partner,  no later than November 30, a writing setting forth in
reasonable  detail the reasons for its objection.  If a  Non-Managing  Partner fails to timely submit the requisite
written  objection,  the Annual Budget shall be deemed  approved by such  Non-Managing  Partner.  If a Non-Managing
Partner timely  submits its written  objection and the Partners are not able to agree by December 31st on an Annual
Budget for the ensuing  Fiscal  Year,  the last  approved  Annual  Budget  shall  remain in effect for such ensuing
Fiscal Year,  except that (i)  nonrecurring  items included in the previous  Annual Budget shall not be included in
the carried  over Annual  Budget,  and (ii)  customary  and  reasonable  increases in  recurring  expenses,  in the
Managing  Partner's  reasonable  judgment,  will be permitted.  The Managing  Partner shall advise the Non-Managing
Partners on a timely basis of any material  deviations  from any budgets  delivered by the Managing  Partner to the
Non-Managing Partners as provided for above in this Section 5.1(d).
         (e)      TRG LLC shall serve as the Managing  Partner for the Partnership  unless and until its Percentage
Interest is reduced to less than  twenty-five  percent (25%),  or it has suffered a Disabling  Event or an Event of
Withdrawal.  In the event that TRG LLC's  Percentage  Interest is

                                                         33

reduced to less than  twenty-five  percent (25%), or it has  suffered a Disabling  Event or an Event of Withdrawal,
Taubman  (provided  that  Taubman's  Percentage Interest  has not been  reduced to less than  twenty-five   percent
(25%),  and no Partner  comprising  Taubman has suffered a Disabling Event or an Event of  Withdrawal),  may notify
TRG LLC in writing  that  Taubman  (or either Partner  thereof)  will assume all rights and all  obligations of the
Managing  Partner under this  Agreement.  If Taubman (or either Partner thereof) assumes the rights and obligations
of the Managing  Partner  pursuant to this Section 5.1(e) and thereafter  Taubman's  Percentage Interest is reduced
to less than twenty-five percent (25%), or either Partner comprising  Taubman suffers a Disabling Event or an Event
of Withdrawal, the Managing Partner shall be that Partner designated by Partners holding in excess of fifty percent
(50%) of the Percentage Interests.
         (f)      The  Partners,  by their  execution  and delivery of this  Agreement,  irrevocably  authorize the
Managing  Partner to do any act that the  Managing  Partner has the right,  power,  and  authority  to do under the
provisions  of this  Agreement  and under the  Partnership  Law (but only to the extent not  inconsistent  with the
terms of this Agreement),  without any other or subsequent  authorizations  or consents of any kind.  Except in the
case of a Major  Decision,  no Person dealing with the  Partnership  shall be required to investigate or inquire as
to the authority of the Managing  Partner to exercise the rights,  powers,  and authority herein conferred upon it.
Any Person dealing with the Partnership  shall,  except in the case of a Major  Decision,  be entitled to rely upon
any action taken  and/or any document or  instrument  executed  and  delivered by the Managing  Partner or a Person
designated by the Managing  Partner,  and the  Partnership  shall be bound  thereby.  Except in the case of a Major
Decision,  no purchaser  of any  property or interest  owned by the  Partnership,  or lender,  shall be required to
determine  the sole and  exclusive  authority  of the  Managing  Partner  to execute  and  deliver on behalf of the
Partnership any such  instrument of transfer or security,  or to see to the application or distribution of revenues
or proceeds paid or credited in connection therewith.

                                                         34

Section 5.2       Response of the Partners.
                  Unless otherwise  specifically  provided in this Agreement,  whenever any Partner is requested by
any other Partner to cast a vote,  grant an approval,  or execute a consent of any nature  whatsoever in connection
with the  Partnership,  such request  shall be made in writing to the other Partner at its address set forth herein
and such Partner shall respond to such request with  reasonable  promptness by means of a written  response  signed
by such  Partner and sent to the  requesting  Partner,  which shall be binding on the  responding  Partner (and any
affiliated  Partner),  and in any event not more than ten (10)  Business  Days after the  receipt  of the  request,
unless such request identifies an emergency  situation,  in which event not more than three (3) Business Days after
the receipt of the request.  The response  shall  indicate any reasons for  withholding  consent.  The failure of a
Partner to respond in writing within the  applicable  time period shall  constitute a ratification  and approval by
such Partner (unless an affiliated Partner has so responded) of the matter requested.
Section 5.3       Compensation of Partners and Affiliates.
         (a)      The  Managing  Partner  shall not be entitled to any fees to act as Managing  Partner  hereunder.
The Managing  Partner  shall be entitled to  reimbursement  for any  reasonable or necessary  expenses  incurred or
expenditures  made by it (to the  extent  not  otherwise  reimbursed)  for or on behalf of the  Partnership  (e.g.,
including, without limitation, travel).
         (b)      In  accordance  with the  Management  and  Leasing  Agreement,  TTC  shall  continue  to  provide
management,  administration,  leasing,  and other  services as may be required  from time to time in respect of the
Shopping  Center.  The  Managing  Partner is hereby  authorized  to, and shall,  amend the  Management  and Leasing
Agreement as reasonably  necessary (i) to take into account GEPTS' withdrawal as a partner of the Partnership,  and
(ii) to provide that, in connection  with the occurrence of a Change of Control  Event,  the Management and Leasing
Agreement  may not be  assigned  and may be  terminated  in the  event of a Change  of  Control  Event.  Any  other
amendment or modification to the Management and Leasing Agreement shall, except as

                                                         35

hereinafter permitted, require the Non-Managing  Partners' prior written  approval. The Managing Partner, on behalf
of the  Partnership,  shall have the right to (and so long as TRG LLC remains a Partner  and no Change of Control
Event has occurred, shall) renew  the term of the Management and Leasing Agreement (and to renew any renewals
thereof)  (such  renewed Management and Leasing Agreement and any renewals thereof are hereinafter  referred to as
the "Renewal  Management and Leasing  Agreement"),  provided that the Renewal  Management  and  Leasing  Agreement
contains the same terms and conditions as the Management and Leasing Agreement (except that the compensation  under
any Renewal  Management and Leasing  Agreement may increase so as to  be  consistent  with  the  compensation  then
generally being paid pursuant  to  management  agreements  negotiated  within  the  prior  twenty-four  (24)  month
period in respect of other shopping centers in which TRG has an ownership interest together with Persons  unrelated
to TRG).  Any other  amendment or modification  to the Renewal  Management and Leasing  Agreement shall require the
Non-Managing  Partners'  prior written  approval.  In addition,  the Managing Partner shall also have the  right to
(and so long as TRG LLC remains a Partner and no Change of Control Event has occurred, shall) engage TTC to provide
services  (including,  without limitation,  development  services) in  respect  of  the  expansion,  redevelopment,
or other such major change in the Shopping  Center  provided that (i) the terms and conditions of  such  engagement
are consistent with those generally negotiated  in respect of other shopping  centers in which TRG has an ownership
interest together with Persons unrelated to TRG, and (ii) the  compensation  for such engagement is computed on the
basis of the formula  provided in the  Management  and  Leasing  Agreement  (or the  applicable  Renewal  Management
and Leasing  Agreement)  for compensation  relative  to  "Optional  Services"  (as  defined  in the  Management and
Leasing  Agreement  or the applicable Renewal Management and Leasing Agreement),  or  the  then-current  equivalent
thereof.  During all periods when TTC shall be employed as the manager of the Shopping Center, the Managing Partner
shall cause TTC to perform its obligations under the Management and Leasing  Agreement or any Renewal

                                                         36

Management and Leasing  Agreement, and any and all rights accorded the Partnership under the Management and Leasing
Agreement or any Renewal  Management and Leasing  Agreement shall be exercised and enforced solely by, the Managing
Partner.  Notwithstanding  anything to the contrary  contained  herein,  in the event of a Change of Control Event,
the Partnership shall solicit bona fide, arm's-length  proposals from Persons other  than TTC that have  management
experience  and a  reputation comparable to TTC's,  to provide the  management,  administrative, leasing, and other
services in respect of the Shopping  Center then provided by TTC. In the event that the terms of any such  proposal
are more  favorable to the Partnership  than the terms of the current Management and Leasing  Agreement  or Renewal
Management  and Leasing Agreement,  as  applicable,  then  unless TTC  agrees to  provide  the   required  services
upon the same terms and conditions as are contained in the proposal, the Partnership shall terminate the Management
and Leasing Agreement or Renewal  Management  and Leasing  Agreement,  as  applicable,  and shall  enter into a new
management and leasing agreement  with such  other  Person for the  provision  of such  services. In the event that
the terms of any such proposal are not more favorable to the Partnership than the terms of the  current  Management
and Leasing  Agreement or Renewal Management and Leasing Agreement, then the Partnership shall  retain TTC  as  the
manager.
Section 5.4       Execution of Legal Instruments.
                  All legal instruments  affecting the Partnership,  SunValley LLC, or Partnership or SunValley LLC
property  need be executed by, and only by, the Managing  Partner or that Person or those  Persons (who need not be
Partners)  designated in writing by the Managing Partner,  and such designated  Person's(s')  signature(s) shall be
sufficient to bind the Partnership and its properties.
Section 5.5       Other Ventures.
                  The  Partners  acknowledge  that each of them and their  Affiliates  may have  interests in other
present or future  ventures,  including  ventures that are competitive  with the Partnership  and/or SunValley LLC,
and that,  notwithstanding  its status as a Partner  in the  Partnership,  a Partner  and its  Affiliates  shall be
entitled to obtain and/or  continue their  respective  individual  participation  in all such ventures  without (i)
accounting to the  Partnership or the other

                                                         37

Partners for any profits with respect  thereto,  (ii) any obligation to  advise  the  other  Partners  of  business
opportunities  for the  Partnership  and/or  SunValley LLC which may come to its or its Affiliate's  attention as a
result of its or its Affiliate's  participation in such other  ventures or  in  the  Partnership, and  (iii)  being
subject to any claims whatsoever on account of such participation.
Section 5.6       Indemnity and Reimbursement.
                  Without any  duplication  of amounts  reimbursed to a Partner  pursuant to Section 5.3(a) hereof,
the Partnership shall indemnify,  defend, and hold harmless each Partner from any claim, demand, or liability,  and
from any loss,  cost, or expense,  including,  without  limitation,  attorneys' fees and court costs,  which may be
asserted  against,  imposed  upon,  or suffered by a Partner by reason of any act performed for or on behalf of the
Partnership,  or in furtherance of the Partnership  business,  to the extent authorized hereby, or by reason of any
omission,  except for acts or omissions that constitute fraud, wilful misconduct,  gross negligence,  or a material
breach of this Agreement.  Except for acts or omissions  constituting fraud,  wilful misconduct,  gross negligence,
or a material breach of this  Agreement,  a Partner shall not be liable to the Partnership or to the other Partners
(and the interest of each Partner in the Partnership,  and in its property and assets,  shall be free of any claims
by the  Partnership or the other Partners) by reason of any act performed for or on behalf of the  Partnership,  or
in furtherance of the  Partnership  business,  or by reason of any omission.  Any indemnity  under this Section 5.6
shall be provided  out of and to the extent of  Partnership  assets  only,  and no Partner  shall have any personal
liability  on account  thereof.  The  indemnity  provided in this  Section 5.6 shall  survive the  dissolution  and
termination of the Partnership and the termination of this Agreement.
Section 5.7       Tax Matters Partner.
         (a)      As  used  in this  Agreement,  "Tax  Matters  Partner"  has the  meaning  set  forth  in  Section
6231(a)(7) of the Code. The Managing  Partner is hereby  designated Tax Matters  Partner for the  Partnership.  The
Tax Matters  Partner shall comply with the  requirements  of Sections 6221 through 6232 of the Code applicable to a
Tax Matters Partner.

                                                         38

         (b)      The Tax Matters  Partner  shall have a  continuing  obligation  to provide the  Internal  Revenue
Service  with  sufficient  information  so that proper  notice can be mailed to each Partner as provided in Section
6223 of the Code,  provided  that each Partner  shall  furnish the Tax Matters  Partner  with all such  information
(including  information  specified in Section  6230(e) of the Code) as is required with respect to such Partner for
such purpose.
         (c)      The Tax Matters Partner shall keep the other Partners  reasonably  informed of all administrative
and/or  judicial  proceedings for the adjustment of  "partnership  items" (as defined in Section  6231(a)(3) of the
Code) at the Partnership  level.  Without  limiting the generality of the foregoing  sentence,  within fifteen (15)
Days after  receiving  any  written or oral  notice of the time and place of a meeting or other  administrative  or
judicial  proceeding  from the  Internal  Revenue  Service  regarding  a  proceeding  (and in any  event,  within a
reasonable  time  prior to such  meeting or  proceeding),  the Tax  Matters  Partner  shall  furnish a copy of such
written  communication or notice to the other Partners,  or inform the other Partners of, the substance of any such
oral  communication.  This  obligation of the Tax Matters  Partner to inform the other Partners shall not extend to
routine and minor events.
         (d)      Each Partner shall  promptly  notify the Tax Matters  Partner (who shall notify any  unaffiliated
Partner)  of  its  treatment  of  any  Partnership  item  on its  federal  income  tax  return  which  is or may be
inconsistent  with the treatment of that item on the Partnership's  return. In addition,  if any Partner intends to
file a request for administrative  adjustment with the Internal Revenue Service,  such Partner shall notify the Tax
Matters  Partner (who shall notify any  unaffiliated  Partner) of such fact and its terms at least thirty (30) Days
prior to such filing.
         (e)      If any Partner  intends to enter into a settlement  agreement  with the Secretary of the Treasury
(or his  authorized  delegate)  with respect to any  Partnership  item,  such Partner  shall notify the Tax Matters
Partner (who shall notify any  unaffiliated  Partner) of such fact and its terms at least twenty (20) Days prior to
such settlement  agreement and shall notify the Tax Matters Partner (who shall notify any unaffiliated  Partner) of
any such settlement agreement and its terms within thirty (30) Days after the date of settlement.

                                                         39

         (f)      If the Tax Matters  Partner  elects not to file suit under  Section  6226 or Section  6228 of the
 Code  concerning an  administrative  adjustment  or request for  administrative  adjustment  and any other Partner
 elects to file such a suit, such Partner shall notify the Tax Matters  Partner (who shall notify any  unaffiliated
 Partner)  of such  intention,  and the forum or forums in which such suit shall be filed  shall be  determined  by
 such Partner.
         (g)      Without  the  approval  of the other  Partners,  the Tax  Matters  Partner  shall not  extend the
 statute of  limitations  with respect to the Partners,  file a request for  administrative  adjustment,  file suit
 concerning any tax refund or deficiency  relating to any  Partnership  administrative  adjustment,  enter into any
 settlement  agreement relating to any Partnership  adjustment,  or enter into any settlement agreement relating to
 any item of income, gain, loss, deduction or credit for any Fiscal Year of the Partnership.
         (h)      Each  Partner  shall be  entitled  to  participate  in all  administrative  proceedings  with the
Internal Revenue Service, as provided in Section 6224(a) of the Code.
         (i)      The  obligations  imposed on the Tax Matters  Partner and the  participation  rights afforded the
other  Partners  by this  Section  5.7 and the Code may not be  restricted  or  limited  in any  fashion by the Tax
Matters Partner without the written consent of the other Partners.
         (j)      The Tax Matters  Partner shall be responsible  for  representing  the Partnership in all dealings
with any state,  local, or foreign tax authority,  subject to the  requirement  that the provisions of this Section
5.7 shall apply with equal force to all dealings with any such tax authority.
Section 5.8       Specific Provisions Relating to Real Estate Investment Trust Status.
                  Anything  herein  to the  contrary  notwithstanding,  so long as any  Partner  is,  or is  owned,
directly or indirectly,  to the extent of at least fifty-one  (51%) percent by a Person who is a REIT  (hereinafter
each a "REIT Partner"),  the Managing  Partner shall cause the Partnership and SunValley LLC to conduct  operations
in a manner  consistent  with the  following  provisions  and any variance  from the  following  shall  require the
written consent of all of the REIT Partners:

                                                         40

         (a)      To the  extent  required  for any  rents  from all or any part of the  Property  or the  Shopping
Center to qualify as "rents from real property"  within the meaning of Section 856 of the Code and the  Regulations
thereunder,  any Person  rendering  services  to a lessee or  sublessee  of all or any part of the  Property or the
Shopping  Center  shall be a taxable  REIT  subsidiary  within the  meaning  of Section  856(l) of the Code and any
Regulations  thereunder or an "independent  contractor" within the meaning of Section 856(d)(3) of the Code and the
Regulations  thereunder from whom the Partnership and SunValley LLC do not derive or receive any income,  except as
permitted by Section 856(d)(2)(C) of the Code;
         (b)      To the  extent  required  for any  rents  from all or any part of the  Property  or the  Shopping
Center to qualify as "rents from real property"  within the meaning of Section 856 of the Code and the  Regulations
thereunder,  any manager or advisor to the  Partnership or SunValley LLC shall be a taxable REIT  subsidiary (or an
entity  principally  owned by a taxable REIT  subsidiary)  within the meaning of Section 856(l) of the Code and any
Regulations  thereunder or an "independent  contractor" within the meaning of Section 856(d)(3) of the Code and the
Regulations thereunder;
         (c)      To the  extent  required  for any  rents  from all or any part of the  Property  or the  Shopping
Center to qualify as "rents from real property"  within the meaning of Section 856 of the Code and the  Regulations
thereunder,  neither the  Partnership  nor  SunValley  LLC shall manage or operate the  Shopping  Center other than
through a taxable  REIT  subsidiary  (or an entity  principally  owned by a taxable  REIT  subsidiary)  within  the
meaning of Section 856(l) of the Code and any  Regulations  thereunder or an  "independent  contractor"  within the
meaning of Section 856(d)(3) of the Code and the Regulations thereunder;
         (d)      Neither  the  Partnership  nor  SunValley  LLC shall  enter into any lease with any Person who is
directly  or  indirectly  related  (within  the  meaning of Section  856(d)(2)(B)  of the Code) to any real  estate
investment trust which is a partner or Affiliate of any member of any Partner;

                                                         41

         (e)      Neither the Partnership  nor SunValley LLC shall form an association  taxable as a corporation or
acquire securities in any issuer, except for the acquisition of government securities;
         (f)      No lease or sublease of all or any part of the  Property or the  Shopping  Center  shall  provide
for any rents that are  contingent,  in whole or in part,  on the net  income or  profits  derived by the lessee or
sublessee;
         (g)      Neither the  Partnership  nor  SunValley  LLC shall  enter into any lease of  personal  property,
under or in  connection  with the  lease of real  property,  if the rent  attributable  to such  personal  property
exceeds  ten  percent  (10%) of the total rent for the  taxable  year  attributable  to both the real and  personal
property leased under or in connection with such lease;
         (h)      Neither  the  Partnership  nor  SunValley  LLC shall enter into any  lending  transaction  if any
amount  received or accrued,  directly or indirectly,  therewith by the  Partnership  or SunValley LLC,  depends in
whole or in part on the income or profits of any Person; and
         (i)      Neither the  Partnership nor SunValley LLC shall engage in any  "prohibited  transaction"  within
the meaning of Section  857(b)(6) of the Code (for  purposes  hereof,  the  determination  of whether a transaction
constitutes a "prohibited  transaction"  shall not take into account the provisions of Section  857(b)(6)(C) of the
Code).
                  Any attempted  action that violates any of the foregoing  shall be null and void and  ineffective
for all purposes;  provided,  however,  that any such attempted  action shall  constitute a material breach of this
Agreement.
                                                    ARTICLE VI.
                                        TRANSFERS OF PARTNERSHIP INTERESTS.

Section 6.1       General Restrictions on Dispositions.
                  Except as expressly  provided in this  Article VI or Section 7.3 hereof,  no Partner may Transfer
all or any part of its  Partnership  Interest  (including  the right to  distributions)  without the prior  written
consent of the other Partners,  provided that no Partner may, under any circumstances,  Transfer all or any part of
its Partnership  Interest if such Transfer would

                                                         42

constitute a default under any  indebtedness or other  Third-Party
obligations or agreements of the Partnership.  An assignment of all or a part of a Partnership  Interest  occurring
by operation of law (e.g.,  bankruptcy,  attachment,  etc.) shall not entitle the successor to  participate  in the
management and affairs of the  Partnership  or to exercise any rights of a Partner,  including the right to vote on
or  consent to any  matter  requiring  a vote or a consent of the  Partners,  unless and until such  transferee  is
admitted as a Partner in accordance  with Section 6.2 below.  In the event of an assignment  occurring by operation
of law,  the  assignor  Partner  shall be  entitled to  continue  to  exercise  the rights of a Partner  under this
Agreement,  and such assignor  Partner and its transferee  shall be jointly and severally liable to the Partnership
for such  Partner's  obligations  to the  Partnership  under  this  Agreement  or under the  Partnership  Law.  For
purposes of this  Agreement,  any Transfer of any direct or indirect  membership  interest,  partnership  interest,
stock or other equity  interest in any Partner shall be deemed to be a Transfer by such Partner of its  Partnership
Interest in the Partnership except for any direct or indirect Transfer of direct or indirect interests in TRG.
Section 6.2       Substitution of Partners.
                  Regardless of compliance with any of the provisions hereof (including,  without  limitation,  the
provisions  of Article VII hereof)  permitting  a Transfer or a Pledge of a  Partnership  Interest,  no Transfer or
Pledge of a Partnership Interest shall be recognized by or be binding upon the Partnership unless:
                  (i)      such  instruments as may be required by the Partnership  Law or other  applicable law or
                           to effect the  continuation of the Partnership  and the  Partnership's  ownership of its
                           properties are executed and delivered and/or filed;

                  (ii)     the  instrument of assignment  binds the assignee to all of the terms and  conditions of
                           this  Agreement  as if the assignee  were a signatory  party hereto and does not release
                           the  assignor  from  any  liability  or  obligation,  accruing  prior to the date of the
                           Transfer,  of or in  respect of the  Partnership  Interest  which is the  subject of the
                           Transfer;

                  (iii)    the  instrument  of  assignment  is manually  signed by the assignee and assignor and is
                           otherwise   reasonably   acceptable  in  form  and  substance  to  the  non-transferring
                           Partner(s);

                                                         43

                  (iv)     if there is more than a single  assignee (or  successor in  interest),  the assignees or
                           successors shall have complied with the provisions of Section 7.2 hereof;

                  (v)      such  Transfer  or Pledge  shall not be  prohibited  by, or cause a breach  of, or cause
                           events,  including,  without  limitation,  by reason of the nature of the  transferee or
                           pledgee (e.g.,  tax-exempt  status),  that are unacceptable to the  non-transferring  or
                           non-pledging  Partner(s)  in the exercise of its(their)  reasonable  discretion to occur
                           pursuant to, any agreement,  obligation,  or  understanding by which the assignor or the
                           assignee or any  properties of the  Partnership  or the  Partnership  itself is bound or
                           affected;

                  (vi)     the  non-transferring  Partner(s)  shall  receive such evidence  (including  opinions of
                           counsel) of the due  authorization,  execution and delivery of  instruments  by, and the
                           validity  and  enforceability  of  such  instruments  against,  such  transferee  as the
                           non-transferring Partner(s) shall reasonably request;

                  (vii)    any  required  consent of the  mortgagee  or  beneficiary  under any mortgage or deed of
                           trust or lease of the  Shopping  Center  to such  Transfer  and  substitution  or Pledge
                           shall have been obtained;

                  (viii)   the assignee shall pay all expenses incurred by the Partnership in admitting the assignee
                           as a Partner; and

                  (ix)     in the event of a Pledge of a Partner's  Partnership Interest, the provisions of Section
                           6.8 hereof are complied with.

                  An assignee of a Partnership  Interest pursuant to a Transfer  permitted in this Agreement who is
admitted  as a partner  in the  Partnership  in the  place and stead of the  assignor  Partner  in  respect  of the
Partnership  Interest  acquired from the assignor Partner shall have all of the rights,  powers,  obligations,  and
liabilities,  and be subject to all of the restrictions,  of the assignor Partner,  including,  without limitation,
but without release of the assignor  Partner,  the liability of the assignor  Partner for any existing  unperformed
obligations of the assignor  Partner.  Each of the Partners,  on behalf of itself and its permitted  successors and
assigns, HEREBY AGREES AND CONSENTS to the admission of any such additional partners as herein provided.
Section 6.3       Transfers of Interests in Certain Partners.
                  Direct and/or  indirect  ownership  interests in TSA and/or ATSA may be Transferred so long as at
all times after any such Transfer at least fifty-one percent (51%) of the direct and indirect  ownership  interests
in TSA or ATSA, as  applicable,  are owned by, and TSA or ATSA, as

                                                         44

applicable, is solely  Controlled By, A. Alfred Taubman  and/or  members  of  his  Immediate  Family  and/or  their
respective  estates and/or a Family Trust in respect of any of the foregoing.
Section 6.4       Right of First Refusal.
         (a)      If any Partner (it being  understood that the Partners  comprising  Taubman shall act jointly for
purposes of this  Section  6.4)  desires to Transfer  all or any portion of its  Partnership  Interest (a "Subject
Interest"),  to any Person  (other than  pursuant to a Pledge),  and such  Transfer is not  otherwise  permitted by
Sections 6.1 or 6.3(a)  hereof,  then,  such Partner (the  "Seller")  shall submit to any  non-Seller  Partner (the
"Buyer") a true copy of a bona fide  written  offer to purchase the Subject  Interest  (the  "Offer"),  which Offer
shall in any event (i)  provide  for (x) an all cash at closing  purchase  price that  provides  for no  contingent
payments,  participation  features or other  payments  other than as are customary to a Transfer for an all cash at
closing  purchase price, or (y) a purchase price that can be paid with cash,  marketable  securities,  and/or units
in an operating partnership which are convertible into marketable  securities,  and that can, strictly for purposes
of this  provision and the  calculation  hereinafter  referenced,  be converted to an all cash at closing  purchase
price  equivalent,  and (ii)  disclose  the price  and  terms of such  proposed  sale and the  name,  address,  and
beneficial  ownership of the proposed  purchaser.  The Buyer shall have the absolute  right to purchase the Subject
Interest upon the terms and  conditions  set forth in the Offer,  or if such Offer provides for a purchase price to
be paid in other than all cash at the  closing,  the Buyer may  purchase  the Subject  Interest  for an all cash at
closing purchase equivalent;  provided,  however,  that,  regardless of such terms and conditions,  the date, time,
and place for the  consummation  of such purchase  shall be as  designated by the Buyer,  provided that the date so
designated  shall be a Business  Day within  seventy-five  (75) Days after the Exercise  Notice (as defined  below)
with at least ten (10) Days' advance  written  notice  thereof to the Seller.  The Buyer shall,  within  forty-five
(45) Days after receipt of the Offer (the  "Exercise  Period"),  specify in a notice (an "Exercise  Notice") to the
Seller  whether or not it desires to purchase the Subject  Interest.  Such Exercise  Notice shall be accompanied by
a cash earnest money  deposit equal to five percent (5%) of the purchase  price if the Buyer elects to purchase the
Subject  Interest.  If the

                                                         45

Buyer fails to give an Exercise  Notice (and deposit) within the Exercise  Period as to the Subject Interest,  such
failure shall  constitute  an election to reject the Offer.  The closing of a purchase by a Buyer shall be held  in
accordance  with the  provisions  of Section 6.7 hereof.  At  the  closing,  the  Buyer's  earnest  money  deposit,
together  with  interest  thereon,  shall be credited  against the  purchase  price for  the  Subject  Interest (or
returned in the event that the  purchase  price is to be paid in other than cash);  provided, however,  that if the
closing shall fail to occur because of a default by  the  Buyer, the  Buyer may  not  submit an  Offer, a  Buy-Sell
Notice,  or a Sale Notice,  for a period of twelve (12) months after the scheduled  closing  date, and  the  Seller
shall have the right,  as its  exclusive  remedy, to retain the  Buyer's deposit, together  with interest  thereon,
as liquidated  damages,  it being agreed that in such instance,  the  Seller's  damages would be  difficult, if not
impossible, to ascertain.
         (b)      The Seller may sell the  Subject  Interest,  if the Offer was not so  accepted,  to the  proposed
purchaser  whose name and address were  disclosed in the Offer but only (i) upon the same terms and  conditions set
forth therein  (except that the purchase price for the Subject  Interest may be  ninety-five  percent (95%) or more
of the  purchase  price for the Subject  Interest as set forth in the Offer),  (ii) within  seventy-five  (75) Days
after the  expiration  of the Exercise  Period,  and (iii) after the Seller has  obtained any Third Party  consents
necessary  to  effectuate  the  sale;  otherwise,  any such  sale  shall be null and void and of no force or effect
whatsoever.
         Notwithstanding  anything  to the  contrary  contained  herein,  a  Partner(s)  may not submit an Offer in
accordance  with this Section 6.4 if (i) a Partner(s)  has given a Buy-Sell  Offer in  accordance  with Section 6.5
hereof or a Sale Offer in accordance  with Section 6.6 hereof,  in either case,  that is outstanding or pursuant to
which a  purchase  has  not  yet  been  consummated,  or (ii) a  Partner(s)  is(are)  marketing  the  Partnership's
membership interest in SunValley LLC or the Shopping Center as provided in Section 6.6 hereof.

                                                         46

Section 6.5       Buy-Sell.
         (a)      TRG LLC or Taubman (it being  understood that the Partners  comprising  Taubman shall act jointly
for purposes of this Section  6.5) (the  "Initiating  Partner")  shall have the right,  at any time,  to initiate a
termination  of the  Partnership  in  accordance  with this Section 6.5. The  Initiating  Partner  shall deliver to
whichever  of TRG LLC or  Taubman  is not the  Initiating  Partner  (the  "Non-Initiating  Partner")  an  offer  (a
"Buy-Sell Offer") in writing stating a cash purchase price (the "Total Price")  attributable to one hundred percent
(100%) of the Partnership's assets.  The Non-Initiating Partner then shall have the option either:
                  (i)      to purchase the  Partnership  Interest(s) of the Initiating  Partner in the  Partnership
         for cash at a price equal to the amount that the  Initiating  Partner would  receive under Section  8.1(a)
         hereof,  if the  Partnership's  assets  were sold for the Total  Price and all of the  liabilities  of the
         Partnership were satisfied; or
                  (ii)     to sell to the Initiating  Partner the  Partnership  Interest(s)  of the  Non-Initiating
         Partner in the Partnership for cash at a price equal to the amount that the  Non-Initiating  Partner would
         receive under Section 8.1(a) hereof if the  Partnership's  assets were sold for the Total Price and all of
         the liabilities of the Partnership were satisfied.
                  The  Non-Initiating  Partner shall give written notice of such election to the Initiating Partner
within  forty-five  (45) Days after  receipt of the  Buy-Sell  Offer.  Such notice shall be  accompanied  by a cash
earnest money  deposit equal to five percent (5%) of the purchase  price if the

                                                         47

Non-Initiating  Partner  elects to purchase the Partnership  Interest of the Initiating  Partner.  Failure  of  the
Non-Initiating  Partner to give the Initiating  Partner  notice that the  Non-Initiating  Partner has elected under
Section  6.5(a)(i)  hereof (and to deliver the required  deposit) within the foregoing  forty-five (45) Day  period
shall be conclusively  deemed to be an election to sell under Section 6.5(a)(ii)  hereof.  In the  event  that  the
Non-Initiating  Partner does not elect to  purchase  the  Partnership  Interest  of  the  Initiating  Partner,  the
Initiating  Partner  shall  give  the Non-Initiating Partner, a cash earnest  money  deposit  equal to five percent
(5%) of the purchase  price of the Non-Initiating  Partner's  Partnership Interest,  within ten (10) Days after (i)
the receipt of the Non-Initiating Partner's  election  to  sell  under  Section  6.5(a)(i)  hereof,  or (ii) if  no
election is made by the  Non-Initiating Partner,  the expiration of the forty-five (45) Day period within which the
Non-Initiating  Partner could have sent its election, as applicable.
         (b)      The closing of a purchase  pursuant to Section  6.5(a)  hereof shall be held in  accordance  with
the  provisions of Section 6.7 hereof at the  principal  office of the  Partnership  on a Business Day agreed to by
the Initiating  Partner and the  Non-Initiating  Partner that is not more than seventy-five (75) Days after receipt
of the written  notice of the election of the  Non-Initiating  Partner or not more than one hundred five (105) Days
after receipt of the Buy-Sell Offer if the  Non-Initiating  Partner fails to give such notice. At the closing,  the
Initiating  Partner's or Non-Initiating  Partner's,  as applicable,  earnest money deposit,  together with interest
thereon,  shall be credited  against the purchase  price of the  Partnership  Interest being  purchased;  provided,
however,  that if the closing shall fail to occur because of a default by the  purchasing  Partner,  the purchasing
Partner may not submit a Buy-Sell Offer,  an Offer,  or a Sale Offer,  for a period of twelve (12) months after the
scheduled  closing date, and the selling  Partner shall have the right,  as its exclusive  remedies,  to (i) retain
the purchasing  Partner's earnest money deposit,  together with interest thereon,  as liquidated  damages, it being
agreed that in such instance,  the selling Partner's damages would be difficult,  if not impossible,  to ascertain,
and/or (ii) elect,  within sixty (60) Days after such default,  to purchase the  purchasing  Partner's  Partnership
Interest for a cash  purchase  price equal to the amount that such  purchasing  Partner  would receive under clause
(i) or clause (ii) of Section 6.5(a)  hereof,  as  applicable,  provided that such Partner  includes a cash earnest
money  deposit equal to five percent (5%) of such purchase  price with its  election.  Notwithstanding  anything to
the contrary  contained  herein,  a Partner(s) may not submit a Buy-Sell Offer in accordance  with this Section 6.5
if (i) a Partner(s)  has given an Offer in accordance  with Section 6.4 hereof or a Sale Offer in  accordance  with
Section  6.6  hereof,  in either  case,  that is  outstanding  or  pursuant  to which a  purchase  has not yet been
consummated,  or (ii) a Partner(s)

                                                         48

is(are) marketing the Partnership's  membership interest in SunValley LLC or the  Shopping  Center as  provided  in
Section 6.6 hereof.
Section 6.6       Sale of the Project.
         (a)      If TRG LLC or  Taubman  (it being  understood  that the  Partners  comprising  Taubman  shall act
jointly for  purposes of this  Section  6.6)  desires to market and sell  either (i) the  Partnership's  membership
interest in SunValley  LLC or (ii) the  Shopping  Center on behalf of  SunValley  LLC to a Third Party,  TRG LLC or
Taubman,  as applicable  (the  "Triggering  Partner")  shall deliver to whichever of TRG LLC and Taubman is not the
Triggering  Partner (the  "Non-Triggering  Partner") an irrevocable  offer (the "Sale Offer") in writing  stating a
cash purchase price  attributable to one hundred percent (100%) of the  Partnership's  assets.  The  Non-Triggering
Partner shall then have the option to purchase the  Partnership  Interest(s) of the Triggering  Partner for cash at
a price equal to the amount (the "Sale Price") that the  Triggering  Partner  would  receive  under Section  8.1(a)
hereof,  if the  Partnership's  assets were sold for the purchase  price set forth in the Sale Offer and all of the
liabilities of the Partnership were satisfied.
                  The  Non-Triggering  Partner  shall  specify in a notice (a "Trigger  Notice") to the  Triggering
Partner,  within  forty-five (45) Days after receipt of the Sale Offer,  whether or not it(they)  desires to accept
the Sale Offer and  purchase  the  Partnership  Interest(s)  of the  Triggering  Partner for the Sale  Price.  Such
Trigger  Notice shall be  accompanied  by a cash earnest  money  deposit equal to five percent (5%) of the purchase
price of the Triggering Partner's  Partnership  Interest if the Non-Triggering  Partner has elected to purchase the
Triggering  Partner's  Partnership  Interest(s).  Failure to give a Trigger Notice that the Non-Triggering  Partner
has  elected to purchase  the  Partnership  Interest(s)  of the  Triggering  Partner  (and to deliver the  required
deposit) within such forty-five (45) Day period, shall constitute an election to reject the Sale Offer.
                  If the Sale Offer was not so accepted by the Non-Triggering  Partner,  the Triggering Partner may
sell either (i) the  Partnership's  membership  interest in SunValley LLC, or (ii) the Shopping Center, as the case
may be, and all other assets of the  Partnership  to a Third Party for an all cash at closing  purchase  price that
is equal to (or  greater  than)  ninety-five  (95%) of the

                                                         49

purchase  price for one hundred percent (100%) of the Partnership's  assets as set forth in the Sale Offer and that
provides for no contingent  payments,  participation features or other payments  other  than  are  customary  to  a
Transfer for an all cash at closing  purchase  price.  The closing of any such sale to a Third  Party  shall  occur
within two hundred ten (210) Days after the  expiration  of  the  forty-five  (45)  Day  period  within  which  the
Non-Triggering  Partner  could have sent the  Trigger  Notice; otherwise, any such sale shall be null and void  and
of no force or effect whatsoever.
         (b)      The closing of a sale by a Triggering  Partner to a  Non-Triggering  Partner  pursuant to Section
6.6(a) hereof shall be held in  accordance  with the  provisions  of Section 6.7 hereof at the principal  office of
the Partnership on a Business Day agreed to by the Triggering  Partner and the  Non-Triggering  Partner that is not
more than one  hundred  five (105) Days after  receipt of a Trigger  Notice.  At the  closing,  the  Non-Triggering
Partner's earnest money deposit,  together with interest  thereon,  shall be credited against the purchase price of
the Triggering Partner's Partnership Interest;  provided,  however, that if the closing shall fail to occur because
of a default by the Non-Triggering  Partner,  the Non-Triggering  Partner may not submit a Sale Offer, an Offer, or
a Buy-Sell Offer, for a period of twelve (12) months after the scheduled  closing date, and the Triggering  Partner
shall have the right,  as its exclusive  remedy,  to retain the  Non-Triggering  Partner's  earnest money  deposit,
together with interest  thereon,  as liquidated  damages,  it being agreed that in such  instance,  the  Triggering
Partner's damages would be difficult,  if not impossible,  to ascertain.  Notwithstanding  anything to the contrary
contained  herein,  a Partner(s)  may not submit a Sale Offer in the event that a Partner(s)  has given an Offer in
accordance  with Section 6.4 hereof or a Buy-Sell  Offer in  accordance  with  Section 6.5 hereof,  in either case,
that is outstanding or pursuant to which a purchase has not yet been consummated.
Section 6.7       Closings.
                  At the closing of the purchase of a Partner's  Partnership  Interest  pursuant to this Agreement,
the selling  Partner(s)  shall transfer to the  purchasing  Partner(s)  such  Partnership  Interest(s)  (including,
without  limitation,  any rights of the selling  Partner(s) to receive (i) repayment of any loans (other than those
secured by the  Shopping  Center)  made by  it(them)  to the

                                                         50

Partnership,  with any  accrued   and  unpaid  interest  thereon, (ii)  repayment  of  such  Partner's(s')  capital
contributions,  if any, including,  in the case of TRG LLC, the TRG LLC Excess  Contributions  and any accrued  but
unpaid  Return  thereon,  (iii)  distributions  of  Available  Cash,  and  (iv)  distributions  on  termination  or
dissolution),  free and clear of all liens, security interests,  and claims of others,  and shall  deliver  to  the
purchasing  Partner(s) such instruments of transfer with respect to the assets of the Partnership and such evidence
of due  authorization,  execution and delivery,  and of the absence of any liens,  security  interests,  or  claims
of others as the purchasing  Partner(s) shall reasonably  request.  The instruments  of transfer  shall be  without
representations  or  warranties  except as to the absence of any liens, security  interests or   claims of  others.
The selling  Partner(s)  shall be responsible  for any stamp,  recording,  transfer,  and   similar   transactional
taxes  (including  any state or local  taxes  measured   by  the gain to such selling Partner(s)) payable upon such
transfer.
                  At such closing, the purchasing  Partner(s) shall pay the purchase price payable by it(them),  at
the option of the  purchasing  Partner(s),  by good  certified or official  bank check  payable to the order of the
selling  Partner(s) or by Fedwire  transfer of immediately  available  funds.  The purchasing  Partner(s)  shall be
responsible  for obtaining all Third Party consents  necessary to effectuate the purchase and shall also deliver or
cause to be  delivered  to the  selling  Partner(s)  a  release  or  releases  from all  recourse  obligations  and
liabilities of the Partnership.  Notwithstanding  anything to the contrary  contained herein, in the event that the
purchasing  Partner(s) is unable to obtain Third Party consents  necessary to effectuate a sale  hereunder  (having
used  its(their)  Best Efforts to do so), it shall send written  notice  thereof to the selling  Partner(s) who may
then seek to obtain such Third Party  consents.  In the event that one or more Third Party  consents  necessary  to
effectuate  the sale has not been obtained by the date of the closing,  any such sale shall be null and void and of
no  force of  effect.  The  selling  Partner(s)  shall be  entitled  to  Available  Cash  allocable  to  its(their)
Partnership Interest(s) through the date of closing.

                                                         51

Section 6.8       Pledge of Partnership Interests.
                  Each Partner (each being hereinafter  referred to as a "Pledging  Partner") may Pledge all or any
portion  of its  Partnership  Interest  or any of the  proceeds  thereof,  at any  time  subject  to the  following
conditions:
                  (i)      the Person (the "Pledgee") to whom the Pledging  Partner's  Partnership  Interest or the
         proceeds  thereof have been pledged in accordance  with the  provisions of this Section 6.8 shall not have
         the right to become a substitute Partner in the Partnership;
                  (ii)     in the event that the  Pledgee  begins to effect  any of its  Pledgee  Rights  under the
         loan  and/or  pledge  agreement,  including,  without  limitation,  foreclosure  or sale  pursuant  to the
         applicable  commercial  code,  the Pledging  Partner  shall no longer have any  management,  approval,  or
         consent rights provided in this Agreement;
                  (iii)    the  documents  governing  the Pledge of all or any  portion of the  Pledging  Partner's
         Partnership  Interest  pursuant to this Section 6.8 (the  "Pledge  Documents")  shall  contain a provision
         reasonably  acceptable to the other Partner (the  "Non-Pledging  Partner")  (i.e., if the Pledging Partner
         is TRG LLC,  the  Non-Pledging  Partner  shall be Taubman,  and if the  Pledging  Partner is either of the
         Partners comprising Taubman,  the Non-Pledging  Partner shall be TRG LLC) providing that upon the exercise
         of any of its  Pledgee  Rights,  in no event  shall the Pledgee be entitled to realize an amount in excess
         of an amount  approved by the  Non-Pledging  Partner (in its sole  discretion)  as set forth in the Pledge
         Documents; and
                  (iv)     the  Pledge  Documents,   shall  contain  a  provision  reasonably   acceptable  to  the
         Non-Pledging Partner  acknowledging and providing that,  notwithstanding  anything in this Agreement or in
         the Pledge  Documents to the  contrary,  upon a Transfer of the

                                                         52

         Pledging  Partner's  Partnership  Interest pursuant  to the  exercise  of any of the  Pledgee  Rights, the
         right of first  refusal in respect of the Pledging  Partner's  Partnership  Interest provided to the Buyer
         in Section 6.4 hereof shall apply. In the event  that the  Pledgee  Right  effected  by the  Pledgee  does
         not  entail a cash  sale of the  Pledging Partner's  Partnership  Interest,  the  purchase  price  of  the
         Pledging  Partner's  Partnership Interest pursuant to Section 6.4  shall  equal the outstanding  principal
         amount  of the  Pledging  Partner's indebtedness  to the Pledgee and any other amounts owed to the Pledgee
         with respect  thereto,  including, without  limitation,  any and all accrued but unpaid interest  thereon.
         In the event that the Non-Pledging Partner  exercises its right of first  refusal,  upon  payment  of  the
         purchase  price,  the Pledgee (or any  other  Person   acquiring   the  Pledging   Partner's   Partnership
         Interest as a result of the exercise of  the  Pledgee  Rights)  shall  Transfer  the  pledged  Partnership
         Interest to the  Non-Pledging  Partner,  free  and  clear  of  any  lien,  pledge,  or  other  encumbrance
         associated  with the Pledge or the  Pledging  Partner's  obligation  secured  thereby.  The  Pledgee,  the
         Pledging Partner,  and the Non-Pledging  Partner shall have executed an agreement,  in form and  substance
         reasonably  satisfactory to the  Non-Pledging  Partner,  in order to  implement  the  provisions  of  this
         Section 6.8. Any Pledge of a Pledging  Partner's  Partnership Interest that violates  the  requirements of
         this Section 6.8 shall be null and void ab initio.

                                                   ARTICLE VII.
                                     DISABLING EVENT IN RESPECT OF A PARTNER;
                                             SUCCESSION OF INTERESTS.

Section 7.1       Disabling Event in Respect of a Partner.
         (a)      For purposes hereof:
                  (i)      a "Disabling  Event" means,  with respect to a Partner,  such  Partner's (A) in the case
                           of a Partner  that is a natural  Person,  death,  (B)  Bankruptcy,  (C) in the case of a
                           Partner  who is a  natural  Person,  the  entry  by a court  of  competent  jurisdiction
                           adjudicating  him  incompetent to manage his Person

                                                         53

                           or his property,  (D) in the case of a  Partner  who is acting as a  Partner  by  virtue
                           of being a trustee  of a  trust,  the  termination  of  the  trust (but  not  merely the
                           substitution  of a new  trustee),  (E) in the  case of  a  Partner  that is  a  separate
                           partnership, the dissolution and commencement of winding up of the separate partnership,
                           or (F) in the case of a Partner  that is a corporation,  the filing of a certificate  of
                           dissolution,  or its equivalent, for the corporation  or the  revocation  of its charter
                           and the  expiration  of ninety (90) Days after the date of notice to the  corporation of
                           revocation  without a  reinstatement  of its charter;
                  (ii)     a "Disabled  Partner" shall be a Partner who has suffered a Disabling  Event or an Event
                           of Withdrawal; and
                  (iii)    a "Successor"  shall be, with respect to a Disabled  Partner,  such  Disabled  Partner's
                           successor(s)  in interest,  personal  representative(s),  heirs at law,  legatee(s),  or
                           estate; and
                  (iv)     "Event of  Withdrawal"  means,  with respect to a Partner,  such  Partner's  retirement,
                           resignation,  other  withdrawal from the Partnership  pursuant to the Partnership Law or
                           any other event  (which is not a  Disabling  Event) that causes a Partner to cease to be
                           a partner under the Partnership Law.
         (b)      Upon the occurrence of a Disabling  Event or an Event of Withdrawal in respect of a Partner,  the
Partnership shall not be dissolved,  but shall be continued and the Successor to such Disabled Partner,  subject to
Section 6.2 hereof,  shall have the rights of such  Disabled  Partner in the  Partnership  subject to the terms and
provisions of this Agreement.
Section 7.2       Single Representative to Act on Behalf of Successors.
                  In the event that TRG LLC's,  TSA's,  or ATSA's  Partnership  Interest is, at any time during the
term of this Agreement  (including any period of dissolution and winding up of the Partnership),  held by more than
one Person, then all of the Persons holding TRG LLC's,  TSA's, or ATSA's, as the case may be, original  Partnership
Interest  shall  forthwith,  but in any  event  within

                                                         54

thirty  (30) Days  after the date on  which  the  Partnership Interest  of  such  Partner  is  held by more  than a
single  Person,  designate  one  or  more  individuals  as  their  collective   authorized   representative(s)  for
purposes of Section  5.2 hereof,  who shall each have the power and  authority,  acting  alone,  to  represent  and
bind and act on behalf of all of the Partners so joined  together and represented  (i.e.,  all  of  the  successors
to the  Partnership  Interest of TRG LLC, TSA, or ATSA, as the case may be) in connection with all matters relating
to this Agreement or the Partnership.  An authorized  representative designated as required herein shall act at the
direction of that Partner or those  Partners,  represented  by such authorized  representative, who at the relevant
time holds or collectively  hold, as the case may be, a Percentage Interest  which is  in  excess of fifty  percent
(50%) of the total  Percentage  Interest  held by all the  Partners represented by such authorized  representative.
Section 7.3       Succession by Individuals to Partnership Interests of Partners.
                  In the event that any individual  succeeds to the interest of any Partner in accordance  with the
terms  of this  Agreement,  then the  interest  of such  individual  Partner  in the  Partnership,  subject  to the
provisions of Section 7.2 hereof, may be:
                  (i)      Transferred  or disposed of by will or  intestacy to or for the benefit of any member or
         members of the deceased Partner's Immediate Family; or
                  (ii)     Transferred during his lifetime or at his death to a Family Trust for such individual.
Section 7.4       References to "Partner" and "Partners" in the Event of Successors.
                  In the event that TRG LLC's,  TSA's,  or ATSA's  Partnership  Interest  is  held  by one or  more
successors to such Partner, references in this Agreement to "Partner" and  "Partners"  shall refer,  as  applicable
and except as otherwise provided  herein, to  the  collective  Partnership  Interests  of  all  successors  to  the
Partnership  Interest  of  TRG  LLC, TSA, or  ATSA, as  the case may be; and all  decisions,  consents,  approvals,
determinations,  actions, and selections of the Partners (to the extent any such decisions,  consents,  approvals,
determinations,  actions, and selections of the Partners are provided for in this  Agreement) and  the  Partnership
shall, as herein provided

                                                         55

but subject to the  provisions  of Article VII hereof,  require  the  decision,  consent, approval,  determination,
action,  or   selection  of  TRG   LLC  or  an   authorized  representative  of  all  of   the  successors  to  the
Partnership Interest of TRG  LLC  (acting  in  the  manner  provided  in   Section  7.2  hereof)  and/or  TSA or an
authorized representative of all of the  successors  to the  Partnership  Interest of TSA  (acting  in  the  manner
provided in Section 7.2  hereof)  and/or  ATSA  or  an  authorized  representative  of  all  of  the  successors to
the  Partnership Interest of ATSA (acting in the manner provided in Section 7.2 hereof), as  provided for  in  this
Agreement.
Section 7.5       Waiver of Dissolution if Transfer is in Full  Compliance  with  Agreement;  Negation of Right to
                  Dissolve Except as Herein Provided; No Withdrawal.
         (a)      Each of the  Partners  hereby  waives  its right to  terminate  or cause the  dissolution  of the
Partnership  (as such right is provided under the Partnership  Law) upon the Transfer of any Partner's  Partnership
Interest,  provided  that any such Transfer is permitted by and  completed  fully in  accordance  with the terms of
this Agreement.
         (b)      Except  as  provided  in this  Agreement,  no  Partner  shall  have the right to  terminate  this
Agreement or dissolve the Partnership by such Partner's express will.
         (c)      No Partner shall have any right to retire,  resign,  or otherwise  withdraw from the  Partnership
and have the value of such Partner's  Partnership  Interest ascertained and receive an amount equal to the value of
such Partnership Interest.
         (d)      In the event  that a Partner  withdraws  from the  Partnership  in breach of this  Agreement  but
pursuant to such  Partner's  statutory  rights under the  Partnership  Law, to the extent that such rights exist in
the face of a  prohibition  against  withdrawal in this  Agreement,  then the value of such  Partner's  Partnership
Interest  shall be  ascertained  in accordance  with Section 7.6 hereof and the  Partnership  Law, and such Partner
shall receive from the Partnership in exchange for the  relinquishment  of such Partner's  Partnership  Interest an
amount equal to the value of such Partner's  Partnership  Interest as so determined less twenty-five  percent (25%)
of such value as  liquidated  damages  and not as a penalty.  In no event  shall a Partner  be  considered  to have

                                                         56

withdrawn from the Partnership solely as a result of such Partner having suffered a Disabling Event.
Section 7.6       Determination of Fair Market Value of Partnership Interests.
                  Solely for purposes of Section  7.5(d)  hereof,  if it shall be  necessary to determine  the fair
market value of a Partner's  Partnership  Interest,  fair market value shall be equal to the amount,  determined as
hereinafter  set forth in this Section 7.6, that would be  distributed  to such Partner  pursuant to Section 8.1(a)
hereof,  assuming no reserves have been  established by the Managing  Partner and that there are no costs attendant
upon such  liquidation,  but taking  into  account  any and all  allocations  pursuant  to  Section  4.1 hereof and
distributions  pursuant to Section 4.2 hereof through the date of such  determination,  if all of the assets of the
Partnership  were sold for their fair market  value;  provided,  however,  that (i) the fair  market  value of such
Partnership  Interest  shall be reduced by the amount of any  distributions  made to the Partner whose  Partnership
Interest is being sold  subsequent  to the date of the balance  sheet to be prepared  pursuant to this Section 7.6,
(ii) the fair market value of such  Partnership  Interest shall be further  reduced by the fees of the  Accountants
and appraisers for the services  rendered by them in accordance  with this Section 7.6, and (iii) any  indebtedness
to the Partnership of the Partner whose  Partnership  Interest is to be sold at the date of the consummation of the
purchase  shall be paid to the  Partnership  in repayment  of such  indebtedness  (such  repayment to be treated as
having occurred  immediately  prior to the sale). To determine the fair market value of the  Partnership's  assets,
the  Accountants  shall prepare a balance sheet for the  Partnership as of the last Day of the month  preceding the
date of the event  giving rise to the  necessity  to  determine  fair market  value (the  "Valuation  Date").  Such
balance  sheet  shall be  prepared  in the  manner  in which  prior  balance  sheets of the  Partnership  have been
consistently  prepared.  The  Accountants  shall then  determine the excess of the total assets of the  Partnership
over the total  liabilities of the  Partnership  (the "Net Value").  Net Value shall be adjusted to reflect (1) the
actual value of any negotiable  securities included in the Partnership's  assets on the Valuation Date, and (2) the
fair market value of all the  Partnership's  real property (taking into account any  participation  features of

                                                         57

any debt  encumbering  such property), including  all improvements thereon  and  thereto,  and other  assets of the
Partnership  based upon an appraisal of the  Partnership's  real property by a member of the American  Institute of
Real Estate  Appraisers  and an appraisal of the other assets of the  Partnership  by a qualified  appraiser,  each
such  appraiser  to be selected  jointly by TRG LLC, on the one hand,  and Taubman,  on the other hand.  If TRG LLC
and Taubman are unable to agree upon an appraiser,  then TRG LLC and Taubman  shall each appoint an appraiser.  The
appraisals  shall be averaged to calculate the appraised fair market value of the  Partnership's  property,  unless
such  appraisals  differ  by more than  five  percent  (5%) of the lower  appraisal,  in which  event,  the two (2)
appraisers  shall select a third  appraiser  who shall  independently  appraise  the  Partnership's  property.  The
appraised  fair market value of the  Partnership's  property  shall then be the average of those  appraisals  which
differ  from  the  middle  appraisal  by less  than  five  percent  (5%) of the  lowest  appraisal.  If none of the
appraisals  differ from the middle  appraisal  by less than five  percent  (5%) of the lowest  appraisal,  then the
value of the middle appraisal shall be the appraised fair market value of the  Partnership's  property.  The fee of
each of the appraisers shall be borne by the selling Partner.
                  Ninety (90) Days after the preparation of any such balance sheet,  the Accountants  shall prepare
an adjusted balance sheet, in the manner set forth above,  for the Partnership,  to reflect disputed and/or unknown
operating  income and expense  items and real estate tax increases for the current year if actual real estate taxes
are unknown at the time the initial  balance  sheet is prepared  (the  "Adjustments").  The Managing  Partner shall
provide the Non-Managing  Partners with written notice (an "Adjustment  Notice") of the Adjustments within ten (10)
Days after the  Accountants'  determination  thereof.  The fair market  value of the  Partnership's  assets and the
fair market value of a Partner's  Partnership  Interest shall be adjusted to reflect the  Adjustments.  The selling
Partner  or the  acquiring  Partner,  as the case may be,  shall pay to the  other,  within ten (10) Days after the
receipt of the Adjustment  Notice, the net amount due such Partner,  based upon the Adjustments.  The provisions of
this Section 7.6 shall survive the dissolution and termination of the Partnership.

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                                                   ARTICLE VIII.
                                           WINDING UP, LIQUIDATION, AND
                                          TERMINATION OF THE PARTNERSHIP.

Section 8.1       Liquidation of the Assets of the Partnership and Disposition of the Proceeds Thereof.
         (a)      Upon the  dissolution  of the  Partnership,  the Managing  Partner  (unless the Managing  Partner
shall have  suffered a  Disabling  Event in which  event the  Non-Managing  Partners)  (herein  referred  to as the
"Liquidator")  shall  proceed to wind up the affairs of the  Partnership,  liquidate the property and assets of the
Partnership,  and terminate the Partnership,  and the proceeds of such liquidation shall be applied and distributed
in the following order of priority:
                  (1)      to the expenses of liquidation; and then
                  (2)      to the payment of the debts and  liabilities of the  Partnership  owing to Persons other
         than Partners and their Affiliates; and then
                  (3)      to  the   establishment   of  any  reserves  that  the  Liquidator  deems  necessary  or
         appropriate  to provide for any contingent or unforeseen  liabilities  or  obligations of the  Partnership
         (other  than  those  owing to  Partners)  or of the  Partners  arising  out of or in  connection  with the
         Partnership  (which  reserves  may be held by a  liquidating  trust  established  for the  benefit  of the
         Partners for the purpose of liquidating  Partnership  assets,  collecting amounts owed to the Partnership,
         and paying any contingent or unforeseen  liabilities of the Partnership);  provided,  however,  that after
         the  expiration of a one year period,  any excess  reserves  remaining  shall be distributed in the manner
         hereinafter provided in this Section 8.1(a); and then
                  (4)      to the  satisfaction  of any  obligations of the  Partnership  to Partners  and/or their
         Affiliates not otherwise provided for in this Section 8.1(a); and then
                  (5)      to TRG LLC in an amount  equal to the sum of the  accrued  but unpaid  Return on the TRG
         Excess Contributions; and then

                                                         59

                  (6)      to TRG LLC in an amount  equal to the TRG Excess  Contributions  to the extent  that the
         TRG Excess Contributions have not been previously distributed to TRG LLC; and then
                  (7)      to the Partners in proportion  to and to the extent of their  positive  Capital  Account
         balances.  For this purpose,  the  determination  of the Partners'  Capital Account balances shall be made
         after  adjustment  to reflect the  allocation of all Profits,  Losses,  and items in the nature of income,
         gain,  expense,  or loss under  Section  4.1 hereof and  distributions  pursuant to Section 4.2 hereof and
         clauses (5) and (6) of this Section  8.1(a)  through the Fiscal Year of  liquidation  of the  Partnership.
         Subject to the  provisions  of clause (3) of this  Section  8.1(a),  all  distributions  pursuant  to this
         Section 8.1 shall be made by the end of the fiscal year of liquidation  (or, if later,  within ninety (90)
         Days after the date of such liquidation).
         (b)      Subject to the  requirements of Regulations  Section  1.704-1(b)(2)(ii)(b)(2),  a reasonable time
shall be allowed for the orderly  liquidation of the property and assets of the  Partnership and the payment of the
debts and liabilities of the Partnership in order to minimize the losses normally attendant upon a liquidation.
         (c)      Each Partner  hereby  appoints the  Liquidator as its true and lawful  attorney-in-fact  to hold,
collect,  and disburse,  in accordance with this  Agreement,  the applicable  requirements  of Regulations  Section
1.704-1(b),  and the terms of any  receivables  existing at the time of the  termination of the Partnership and the
proceeds of the collection of such receivables,  including those arising from the sale of Partnership  property and
assets.  Notwithstanding  anything to the  contrary  in this  Agreement,  the  foregoing  power of  attorney  shall
terminate upon the  distribution of the proceeds of all such  receivables in accordance with the provisions of this
Agreement.
         (d)      Notwithstanding  anything to the  contrary  contained in this Section 8.1, but subject to Section
5.1(c)  hereof,  if the  Liquidator  shall  determine not to liquidate  the property and assets of the  Partnership
because the property  and assets are not  assignable  to other

                                                         60

than the Partners or because a complete  liquidation of all of the property  and assets of  the  Partnership  would
involve  substantial  losses or be impractical under the circumstances  or for any  other reason  or for  no  given
reason,  the Liquidator  shall liquidate that portion of  the  assets of the  Partnership  sufficient  to  pay  the
expenses of  liquidation  and the debts and  liabilities  of the Partnership  (excluding  the debts and liabilities
of the  Partnership  to the  extent  that they are  adequately secured by mortgages on, or security  interests  in,
assets of the Partnership or to the extent  adequate  provision is made for such  debts and  liabilities),  and the
remaining  assets  shall be  distributed to the  Partners  as tenants-in-common  or  partitioned in accordance with
applicable  statutes or apportioned in accordance  with the provisions of Section 8.1(a) hereof,  or distributed in
such other reasonable  manner,  not  inconsistent  with the economic effect of Section 8.1(a) hereof and applicable
requirements of Regulations Section 1.704-1(b) and within the time period therein set forth, as shall be reasonably
determined by the Liquidator.  The  distribution of such remaining  assets to the Partners shall be made subject to
any mortgages or security  interests  encumbering  such assets.
Section 8.2       Cancellation of Certificates.
                  After  the  affairs  of the  Partnership  have been  wound up,  the  property  and  assets of the
Partnership  have been  liquidated,  and the  proceeds  thereof have been  applied and  distributed  as provided in
Section 8.1(a) hereof (and/or,  if applicable,  there has been a distribution  of property and assets,  as provided
in Section 8.1(d) hereof), and the Partnership has been terminated,  the Partners shall execute,  deliver, and file
a certificate of dissolution or cancellation  of the  Certificate of Partnership  and/or assumed or fictitious name
certificate (or a similar writing) to effect the cancellation,  of record, of the  certificate(s) of partnership of
the Partnership (or similar writing).

                                                              61

                                                    ARTICLE IX.
                                                  MISCELLANEOUS.
Section 9.1       Exculpation.
                  Except in the case of fraud,  wilful misconduct,  gross negligence,  or a material breach of this
Agreement,  the  doing of any act or the  failure  to do any act by a  Partner,  the  effect  of which may cause or
result in loss or damage to the  Partnership,  if done in good faith to promote the  interests  of the  Partnership
and if not done in material  violation of the provisions of this  Agreement,  shall not subject such Partner to any
personal liability.
Section 9.2       Notices.
         (a)      Any  and  all  notices,  consents,  offers,  elections,  and  other  communications  (hereinafter
referred to collectively as the  "Communications"  and  individually  as a  "Communication")  required or permitted
under this Agreement shall be deemed adequately given only if in writing.
         (b)      All  Communications  to be sent hereunder shall be given or served only if addressed to a Partner
at its  address  set forth in the records of the  Partnership,  and if  delivered  by hand (with  delivery  receipt
required) or delivered by  certified  mail,  return  receipt  requested,  or Federal  Express or similar  expedited
overnight  commercial  carrier.  All such  notices,  demands,  and requests  shall be deemed to have been  properly
given or served,  if  delivered  in hand,  or mailed,  on the date of receipt or of refusal to accept  shown on the
delivery  receipt or return  receipt,  and,  if  delivered  by  Federal  Express  or  similar  expedited  overnight
commercial  carrier,  on the date that is one 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.  The time to respond to any  Communication  given  pursuant  to this  Agreement  shall run from the date of
receipt or confirmed delivery.

                                                              62

         (c)      All Communications shall be addressed:
                  If to TRG LLC, to:
                  The Taubman Company
                  200 East Long Lake Road
                  Bloomfield Hills, Michigan  48304
                  Attn:  Executive Vice President/Chief Financial Officer and Secretary

                  If to TSA or ATSA, to:
                  200 East Long Lake Road
                  Bloomfield Hills, Michigan  48304
                  Attn:  Robert S. Taubman and William S. Taubman

         (d)      By giving to the other parties  written notice thereof,  the parties hereto and their  respective
successors  and assigns  shall have the right from time to time and at any time  during the term of this  Agreement
to change the  Person(s)  to receive  notice and their  respective  addresses  effective  upon receipt by the other
parties  of such  notice and each shall have the right to  specify  as its  address  any other  address  within the
United States of America.
Section 9.3       Applicable Law.
                  This Agreement  shall be governed by, and construed in accordance  with, the laws (other than the
law  governing  choice of law) of the State of  California.  In the event of a conflict  between any  provision  of
this  Agreement and any  non-mandatory  provision of the  Partnership  Law, the provision of this  Agreement  shall
control and take precedence.
Section 9.4       Word Meanings; Gender.
                  The words such as "herein,"  "hereinafter,"  "hereof," and "hereunder" refer to this Agreement as
a whole and not merely to a  subdivision  in which such words appear  unless the context  otherwise  requires.  The
singular shall include the plural and the masculine  gender shall include the feminine and neuter,  and vice versa,
unless the context otherwise requires.
Section 9.5       Section Titles.
                  Section  titles are for  descriptive  purposes only and shall not control or alter the meaning of
this Agreement as set forth in the text.

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Section 9.6       Entire Agreement.
                  This  Agreement  contains  the entire  agreement  between  the  parties  hereto  relative  to the
Partnership.
Section 9.7       Waiver.
                  No  consent  or  waiver,  express  or  implied,  by a Partner  to or of any  breach or default by
another  Partner  in the  performance  by such  other  Partner  of its  obligations  hereunder  shall be  deemed or
construed to be a consent or waiver to or of any other breach or default in the  performance  by such other Partner
of the same or any other  obligation of such Partner  hereunder.  Failure on the part of a Partner to object to any
act or failure to act of another Partner or to declare  another  Partner in default,  irrespective of how long such
failure continues, shall not constitute a waiver by such Partner of its rights hereunder.
Section 9.8       Separability of Provisions.
                  Each  provision  of this  Agreement  shall be  considered  separable  and if for any  reason  any
provision or  provisions  herein are  determined  to be invalid,  unenforceable,  or illegal  under any existing or
future law, such  invalidity,  unenforceability,  or  illegality  shall not impair the operation of or affect those
portions of this Agreement that are valid, enforceable, and legal.
Section 9.9       Binding Agreement.
                  Subject to the  restrictions  on Transfers set forth herein,  this  Agreement  shall inure to the
benefit of and be binding upon the  undersigned  Partners and their  respective  successors and assigns.  Whenever,
in this  instrument,  a  reference  to any party or Partner is made,  such  reference  shall be deemed to include a
reference to the permitted successors and assigns of such party or Partner.
Section 9.10      Equitable Remedies.
                  Except as  otherwise  provided  in this  Agreement,  the  rights  and  remedies  of the  Partners
hereunder  shall not be mutually  exclusive,  i.e.,  the  exercise of a right or remedy  under any given  provision
hereof  shall not  preclude  or impair  exercise  of any other  right or  remedy

                                                              64

hereunder.  Each of the  Partners confirms  that  damages  at law may not always be an adequate remedy for a breach
or  threatened  breach of this Agreement and agrees that, in the event of a breach  or  threatened  breach  of  any
provision  hereof,  the respective rights and  obligations hereunder  shall be enforceable by specific performance,
injunction,  or other equitable remedy,  but  nothing  herein  contained  is  intended  to,  nor  shall  it,  limit
or affect any rights at law or by statute  or  otherwise  of any  party  aggrieved  as  against  the  other  for  a
breach or  threatened  breach of any provision hereof.
Section 9.11      Partition.
                  No Partner nor any  successor-in-interest  to a Partner shall have the right while this Agreement
remains in effect to have any property of the  Partnership  partitioned,  or to file a complaint  or institute  any
proceeding at law or in equity to have such property of the Partnership  partitioned,  and each Partner,  on behalf
of itself and its  successors and assigns,  hereby waives any such right.  It is the intention of the Partners that
the rights of the parties hereto and their  successors-in-interest  to Partnership  property,  as among themselves,
shall  be  governed  by  the  terms  of  this   Agreement,   and  that  the  rights  of  the   Partners  and  their
successors-in-interest  to  Transfer  any  interest  in the  Partnership  shall be subject to the  limitations  and
restrictions set forth in this Agreement.
Section 9.12      Amendment.
                  Except as provided in Section  3.4(a)  hereof,  a proposed  amendment  to this  Agreement  may be
adopted  and  effective  as an  amendment  hereto  only  upon  the  written  agreement  of  all  of  the  Partners.
Notwithstanding  anything  contained herein,  there shall be no amendment of the definitions of "Mezzanine Loan" or
"Property"  in Section 1.7 or of Sections 2.1,  2.2,  9.20,  9.21 or 9.22 (except that an amendment of Section 9.22
which would not alter the rights or obligations of SunValley  LLC's  Independent  Managers (as defined in SunValley
LLC's  operating  agreement)  shall be permitted) of this Agreement  unless such amendment is adopted in compliance
with Section 9.21 of this Agreement.

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Section 9.13      No Third Party Rights Created Hereby.
                  The  provisions  of this  Agreement  are solely for the purpose of defining the  interests of the
Partners,  inter se;  and no other  Person,  firm,  or entity  (i.e.,  a party who is not a  signatory  hereto or a
permitted  successor  to such  signatory  hereto)  shall  have any  right,  power,  title,  or  interest  by way of
subrogation or otherwise, in and to the rights, powers, titles, and provisions of this Agreement.
Section 9.14      Liability of Partners.
                  Except as otherwise  provided in this Agreement,  any liability or debt of the Partnership  shall
first be satisfied out of the assets of the  Partnership,  including the proceeds of any liability  insurance which
the Partnership may recover, and thereafter, in accordance with the applicable provisions of the Partnership Law.
Section 9.15      Additional Acts and Instruments.
                  Each  Partner  hereby  agrees to do such  further  acts and  things  and to  execute  any and all
instruments  necessary  or  desirable  and as  reasonably  required  in the future to carry out the full intent and
purpose of this Agreement.
Section 9.16      Organization Expenses.
                  The  Partnership  shall elect,  pursuant to Section 709(b) of the Code, to treat all amounts paid
or incurred to organize the  Partnership  as deferred  expenses to be deducted  ratably over a period of sixty (60)
months beginning with the month in which the Partnership began business.
Section 9.17      Agreement in Counterparts.
                  This  Agreement  may be  executed  in two (2) or more  counterparts,  all of which as so executed
shall  constitute one Agreement,  binding on all of the parties  hereto,  notwithstanding  that all the parties are
not  signatory to the original or the same  counterpart;  provided,  however,  that no provision of this  Agreement
shall become  effective  and binding  unless and until all parties  hereto have duly executed  this  Agreement,  at
which time this  Agreement  shall then  become  effective  and  binding as of the date  first  above  written.  Any
executed  counterpart of this

                                                         66

Agreement  that is delivered by facsimile  transmission  shall be deemed to have been fully and  properly  executed
and delivered, for all purposes of this Agreement.
Section 9.18      Attorneys-in-Fact.
                  Any Partner may execute a document or instrument  or take any action  required or permitted to be
executed or taken under the terms of this  Agreement by and through an  attorney-in-fact  duly  appointed  for such
purpose (or for purposes  including  such purpose)  under the terms of a written power of attorney  (including  any
power of attorney granted herein).
Section 9.19      Consents, Approval, Etc.
                  Whenever the consent or approval of a Partner is required  under any provision of this  Agreement
or a matter is subject to the satisfaction of a Partner,  then, except as otherwise  specifically  provided in this
Agreement,  such  Partner  shall not  unreasonably  withhold  or delay such  consent or  approval  and shall not be
unreasonable or delay in deciding whether such matter is satisfactory.
Section 9.20      Separateness Covenants.

         (a)      Notwithstanding any other provisions  contained in this Agreement,  so long as the Mezzanine Loan
is outstanding, the Partnership shall:
                  (i)      maintain books and records separate from any other individual or entity;
                  (ii)     maintain its bank accounts separate from any other individual or entity;
                  (iii)    conduct its business in its own name;
                  (iv)     maintain separate financial statements;
                  (v)      pay its own liabilities out of its own funds;
                  (vi)     observe all partnership formalities;
                  (vii)    maintain an  arm's-length  relationship  with its Affiliates and enter into transactions
with Affiliates only on a commercially reasonable basis;
                  (viii)   pay the salaries of its own employees, if any;

                                                         67

                  (ix)     allocate fairly and reasonably any overhead for shared office space;
                  (x)      use separate stationery, invoices, and checks;
                  (xi)     hold itself out as a separate entity;
                  (xii)    file its tax returns  separate  from those of  any  other  individual or entity  (except
for SunValley  LLC) and not file a  consolidated  federal  income tax return with any  other  individual  or entity
(except for SunValley LLC);
                  (xiii)   maintain  a  sufficient  number  of  employees  (if  any)  in  light of its contemplated
business;
                  (xiv)    correct any known misunderstanding regarding its separate identity; and
                  (xv)     maintain adequate capital in light of its contemplated business operations.

(b)      Notwithstanding  any other  provisions  contained  in this  Agreement,  so long as the  Mezzanine  Loan is
outstanding, the Partnership shall not:
                  (i)      commingle its assets with those of any other individual or entity;
                  (ii)     guarantee or become  obligated  for the debts of any other  individual or entity or hold
out its credit as being available to satisfy the obligations of any other individual or entity;
                  (iii)    not acquire the obligations or securities of its Partners or Affiliates;
                  (iv)     make  loans to any other individual or entity or buy or hold  evidences  of indebtedness
issued by any other individual or entity (other than cash and investment-grade securities);
                  (v)      identify itself as a division of any other individual or entity;
                  (vi)     engage  in any  business  or   activities  other  than  (A)  owning,  holding,  selling,
transferring, and exchanging the Subsidiary Company Membership Interest, (B)

                                                         68

owning, holding, selling transferring, and exchanging the capital stock of SV, and (C)  transacting   any  and  all
lawful business for which  a  partnership may be organized under California law  that is  incident,  necessary  and
appropriate to accomplish the foregoing;
                  (vii)    incur indebtedness other than the Mezzanine Loan;
                  (viii)   allow  any  transfer  of a  direct  or  indirect  ownership  interest in the Partnership
such  that the transferee  owns,  in the  aggregate  with the  ownership  interests of its  affiliates  and  family
members in the Partnership,  more than a 49% interest in the  Partnership,  unless  such  transfer  is  conditioned
upon the delivery of an acceptable  non-consolidation  opinion to the holder of the Mezzanine Loan  concerning,  as
applicable,  the Partnership, the new transferee and/or their respective owners;
                  (ix)     except with respect to the  Mezzanine Loan or the Mortgage Loan (as such term is defined
in the operating agreement of SunValley LLC), pledge its assets for the benefit of another entity;
                  (x)      form,  hold or acquire any  subsidiaries, other than the Subsidiary  Company  Membership
Interest or the capital stock of SV; and
                  (xi)     dissolve,  liquidate,  consolidate,  merge  or  except  as  permitted  by  the documents
governing the Mezzanine Loan or in connection with a prepayment of the Mezzanine Loan,  sell all  or  substantially
all of its assets.
Section 9.21      Bankruptcy-Related Covenants; Lender's Consent.
                  So long as the Mezzanine Loan is outstanding,  the board of directors of A.T.  Associates,  Inc.,
a Michigan  corporation  ("ATAI") which is the general partner of TSA, and Taubman SunValley  Associates I, Inc., a
Michigan  corporation  ("TSVAI"),  which  is the  general  partner  of  ATSA,  shall  each  have at  least  two (2)
"Independent  Directors" as such term is defined in the respective  Amended and Restated  Articles of Incorporation
of ATAI and TSVAI.  Notwithstanding  any other  provisions  contained in this  Agreement,  so long as

                                                         69

the Mezzanine Loan is  outstanding,  the  following  actions  and  decisions  of the  Partnership  shall  be  taken
only  upon the unanimous consent of the Partners,  which  consent  shall  require  the  affirmative  vote  of  both
Independent  Directors of ATAI and both Independent Directors of TSVAI:
                  (i)      the filing of a petition or a consent to a petition seeking reorganization, liquidation,
or relief under any  applicable  federal  or state law  relating  to  bankruptcy,  or  consent to  the  appointment
of a  receiver, liquidator,  assignee, trustee,  sequestrator (or other similar official) of the  Partnership, or a
substantial part of any of its  property, or  make  any  assignment for  the  benefit  of  creditors, or, except as
required by law, admit in writing its  inability  to pay any of its debts  generally as they become due, or declare
or effect a moratorium on any of its debt or take any Partnership action in furtherance of such action;
                  (ii)     a   dissolution,   liquidation,   consolidation,  or   merger,   or  a  sale  of  all or
substantially all of the assets of the Partnership, except as otherwise  permitted by that certain Pledge Agreement
securing the Mezzanine Loan, unless there is a pre-payment of the Mezzanine Loan in connection with such sale; and
                  (iii)    the amendment of Section 9.20 hereof or this Section 9.21.
                  Additionally,  so long as the Mezzanine Loan is outstanding,  notwithstanding any other provision
of this  Agreement,  the Partnership  shall not amend the definitions of "Mezzanine  Loan" or "Property" in Section
1.7, or Section 2.1,  Section 2.2,  Section  9.20,  this Section 9.21, or Section 9.22 (except that an amendment of
Section 9.22 which would not alter the rights or  obligations  of SunValley  LLC's  Independent  Managers  shall be
permitted) hereof unless the Partnership receives the approval of the holder of the Mezzanine Loan.

                                                         70

                  For so long as the Mezzanine Loan is  outstanding,  the  Partnership  shall have at least two (2)
partners  each  owning  at  least  a  one-half  of  one  percent  (.5%)  interest  in  the  Partnership  which  are
bankruptcy-remote  special purpose  entities (each, a "Special  Purpose General  Partner") that have provisions and
covenants in their  organizational  documents  regarding  their  separateness  which are  substantially  similar to
Sections 10.20 and 10.21 of the Agreement of Limited  Partnership,  as amended,  for Taubman  SunValley  Associates
Limited Partnership, as of the date hereof.
                  Upon the  dissociation  or withdrawal of a Special  Purpose  General Partner from the Partnership
or the  bankruptcy,  insolvency or liquidation of a Special  Purpose General  Partner,  the  Partnership  shall (i)
appoint a new Special  Purpose General  Partner,  and (ii) deliver an acceptable  non-consolidation  opinion to the
holder of the Mezzanine Loan concerning, as applicable,  the Partnership,  the new Special Purpose General Partner,
and its owners.
                  Notwithstanding  any provision to the contrary in this Agreement,  the Partnership shall continue
its  existence  (and  not  dissolve)  for so long as a  solvent  partner,  and at  least  two (2)  partners  in the
aggregate, exist.
Section 9.22      Management of SunValley LLC.
                  Each of the Partners  acknowledges  that the  Partnership is the sole member of SunValley LLC and
recognizes  that,  pursuant to the provisions of the Operating  Agreement of SunValley LLC, the Partnership has the
right and power to manage the  operations  and  activities  of SunValley  LLC in its sole  discretion,  except with
respect to certain actions and decisions  requiring the affirmative  consent of both of SunValley LLC's Independent
Managers.  The Partners agree that the  Partnership  shall manage the operations and activities of SunValley LLC in
a manner consistent with the management and governance

                                                         71

provisions contained in this Agreement,  including,  by way of example  and not of  limitation,  that the  Managing
Partner shall only cause the Partnership to take those actions with  respect to  SunValley  LLC which the  Managing
Partner  would be  permitted to take without  further authorization  under this   Agreement  with  respect  to  the
Partnership.  All other actions with respect to SunValley LLC shall be taken by the Managing  Partner on  behalf of
the Partnership  only upon the consent of the Non-Managing Partners.

                                           [SIGNATURES BEGIN ON NEXT PAGE]

                                                         72

         IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first-above written.

                                                     TRG SUNVALLEY LLC, a Delaware limited liability company

                                                     By:      The  Taubman  Realty  Group  Limited  Partnership,  a
                                                              Delaware limited partnership

                                                              By:      /s/ Lisa A. Payne
                                                                       ____________________________

                                                              Its:     Authorized Signatory

                                                     TAUBMAN SUNVALLEY ASSOCIATES LIMITED  PARTNERSHIP,  a Michigan
                                                     limited partnership

                                                     By:      A.T. Associates, Inc.

                                                              By:      /s/ William S. Taubman
                                                                       _____________________________

                                                              Its:     Vice President
                                                                       _____________________________

                                                     A.T.  SUNVALLEY  ASSOCIATES  LIMITED  PARTNERSHIP,  a Michigan
                                                     limited partnership

                                                     By:      Taubman SunValley Associates I, Inc.

                                                              By:      /s/ William S. Taubman
                                                                       _____________________________

                                                              Its:     Vice President
                                                                       _____________________________

                                                         73

                                                                                                        Exhibit 12

                                               TAUBMAN CENTERS, INC.

                          Computation of Ratios of Earnings to Combined Fixed Charges and
                                       Preferred Dividends and Distributions
                                           (in thousands, except ratios)

                                                                                  Six Months Ended June 30
                                                                                  ------------------------
                                                                                 2002                  2001
                                                                                 ----                  ----

Net Earnings from Continuing Operations                                    $      11,124         $      27,385

   Add back:
       Fixed charges                                                              65,280                70,970
       Amortization of previously capitalized interest (1)                         1,688                 1,099

    Deduct:
       Capitalized interest (1)                                                   (3,533)              (20,240)
                                                                           --------------        --------------

Earnings Available for Fixed Charges
  and Preferred Dividends and Distributions                                $      74,559         $      79,214
                                                                           =============         =============

Fixed Charges
    Interest expense                                                       $      41,393         $      30,180
    Capitalized interest                                                           2,571                16,396
    Interest portion of rent expense                                               1,268                 1,271
    Proportionate share of Unconsolidated Joint
      Ventures' fixed charges                                                     20,048                23,123
                                                                           -------------         -------------
       Total Fixed Charges                                                 $      65,280         $      70,970
                                                                           -------------         -------------

Preferred Dividends and Distributions                                             12,800                12,800
                                                                           -------------         -------------

    Total Fixed Charges and Preferred
      Dividends and Distributions                                          $      78,080         $      83,770
                                                                           =============         =============

Ratio of Earnings to Fixed Charges and
  Preferred Dividends and Distributions                                             0.95 (2)              0.95

(1)      Amounts include TRG's pro rata share of capitalized  interest and  amortization of previously  capitalized
         interest of the Unconsolidated Joint Ventures.
(2)      Earnings  available for fixed charges and preferred  dividends and  distributions  are less than the total
         of fixed charges and preferred dividends and distributions by approximately $3.5 million.

                                                                       MORTGAGE AND OTHER NOTES PAYABLE
                                                              INCLUDING WEIGHTED INTEREST RATES AT JUNE 30, 2002

                                                          BENEFICIAL  EFFECTIVE
                                              100%         INTEREST      RATE    (a)
                                                                                      ---------------------------------------------------------------------------------------
                                             6/30/02       06/30/02    06/30/02       2002    2003    2004    2005    2006   2007    2008    2009    2010   2011     TOTAL
                                             -------       --------    --------       -----   -----   -----   -----   -----  -----   -----   -----   -----  -----    -----

   CONSOLIDATED  FIXED RATE DEBT:
   --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
   BEVERLY CENTER                               146.0           146.0      8.36%                       146.0                                                           146.0
   BILTMORE                                      78.6            78.6      7.68%         0.4     0.8     0.9     1.0     1.1    1.2     1.2    72.0                     78.6
   MACARTHUR CENTER                             142.9           100.0      7.59%         0.5     1.1     1.1     1.2     1.3    1.4     1.5     1.7    90.2            100.0
   REGENCY                                       82.0            82.0      6.75%         0.4     0.9     0.9     1.0     1.1    1.1     1.2     1.3     1.4   72.8      82.0
   THE MALL AT SHORT HILLS                      269.5           269.5      6.70%         1.4     3.0     3.2     3.5     3.7    4.0     4.2   246.4                    269.5
   OTHER                                         22.1            22.1     12.37%         0.3     0.3     0.3     0.3     0.4    0.4     0.1    20.0     0.0    0.0      22.1
                                            ---------------------------------------------------------------------------------------------------------------------------------
   TOTAL CONSOLIDATED FIXED                     741.1           698.3                    3.0     6.1   152.5     7.0     7.5    8.1     8.3   341.4    91.5   72.8     698.3
   WEIGHTED RATE                                7.48%           7.47%                  6.95%   6.98%   8.30%   6.98%   6.98%  6.99%   7.01%   7.28%   7.58%  6.75%

   CONSOLIDATED FLOATING RATE DEBT:
   --------------------------------
   GREAT LAKES CROSSING                         149.7           127.3      4.58% (c)     5.0   122.2                                                                   127.3
   THE SHOPS AT WILLOW BEND                     197.8           197.8      4.11% (d)           197.8                                                                   197.8
   WELLINGTON GREEN                             137.7           123.9      4.39% (e)                   123.9                                                           123.9
   TRG CREDIT FACILITY                            9.2             9.2      2.81% (h)     9.2                                                                             9.2
   TRG CREDIT FACILITY                          230.0           230.0      2.88% (f)                   230.0                                                           230.0
                                            ---------------------------------------------------------------------------------------------------------------------------------
   TOTAL CONSOLIDATED FLOATING                  724.4           688.2                   14.2   320.0   353.9     0.0     0.0    0.0     0.0     0.0     0.0    0.0     688.2
   WEIGHTED RATE                                3.85%           3.82%                  3.44%   4.29%   3.41%   0.00%   0.00%  0.00%   0.00%   0.00%   0.00%  0.00%

   TOTAL CONSOLIDATED                          1465.5          1386.4                   17.3   326.2   506.4     7.0     7.5    8.1     8.3   341.4    91.5   72.8    1386.4
   WEIGHTED RATE                                5.69%           5.66%                  4.05%   4.34%   4.88%   6.98%   6.98%  6.99%   7.01%   7.28%   7.58%  6.75%
   --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

   JOINT VENTURES FIXED RATE DEBT:
   --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
   ARIZONA MILLS                     50.00%     144.1            72.1      7.90%         0.3     0.6     0.7     0.8     0.8    0.9     0.9     1.0    66.0             72.1
   CHERRY CREEK                      50.00%     177.0            88.5      7.68%                         0.5     1.3    86.7                                            88.5
   FAIR OAKS                         50.00%     140.0            70.0      6.60%                                                       70.0                             70.0
   SUN VALLEY BONDS                  50.00%       0.8             0.4      7.20%         0.1     0.2     0.1                                                             0.4
   WESTFARMS                         78.94%     100.0            78.9      7.85% (k)    78.9                                                                            78.9
   WOODLAND                          50.00%      66.0            33.0      8.20%                        33.0                                                            33.0
                                            ---------------------------------------------------------------------------------------------------------------------------------
   TOTAL JOINT VENTURE FIXED                    628.0           342.9                   79.3     0.9    34.3     2.0    87.6    0.9    70.9     1.0    66.0    0.0     342.9
   WEIGHTED RATE                                7.57%           7.59%                  7.85%   7.72%   8.18%   7.76%   7.68%  7.90%   6.62%   7.90%   7.90%  0.00%

   JOINT VENTURES FLOATING RATE DEBT:
   ----------------------------------
   DOLPHIN MALL                      50.00%     183.0 (b)        91.5      4.46% (g)    91.5                                                                            91.5
   INTERNATIONAL PLAZA               26.49%     187.1            49.6      4.31% (j)    49.6                                                                            49.6
   THE MALL AT MILLENIA              50.00%      92.1            46.0      3.59% (i)            46.0                                                                    46.0
   STAMFORD TOWN CENTER              50.00%      76.0            38.0      2.64% (i)    38.0                                                                            38.0
   SUNVALLEY                         50.00%     110.0            55.0      2.76% (i)            55.0                                                                    55.0
   SUNVALLEY                         50.00%      10.0             5.0      4.84% (i)             5.0                                                                     5.0
   WESTFARMS                         78.94%      55.0            43.4      5.16% (k)    43.4                                                                            43.4
   OTHER                                          4.1             2.5      4.75%         0.4     0.8     0.7     0.4     0.3    0.0                                      2.5
                                            ---------------------------------------------------------------------------------------------------------------------------------
   TOTAL JOINT VENTURE FLOATING                 717.3           331.0                  222.9   106.8     0.7     0.4     0.3    0.0     0.0     0.0     0.0    0.0     331.0
   WEIGHTED RATE                                3.91%           3.92%                  4.25%   3.23%   4.75%   4.75%   4.75%  4.75%   0.00%   0.00%   0.00%  0.00%

   TOTAL JOINT VENTURE                         1345.3           674.0                  302.2   107.7    34.9     2.4    87.8    0.9    70.9     1.0    66.0    0.0     674.0
   WEIGHTED RATE                                5.62%           5.79%                  5.19%   3.27%   8.12%   7.28%   7.67%  7.74%   6.62%   7.90%   7.90%  0.00%
   --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

   TRG BENEFICIAL INTEREST TOTALS
   ------------------------------
   FIXED RATE DEBT                            1,369.1         1,041.2                   82.4     7.0   186.8     9.0    95.1    8.9    79.2   342.4   157.6   72.8    1041.2
                                                7.52%           7.51%                  7.82%   7.07%   8.28%   7.16%   7.63%  7.08%   6.66%   7.28%   7.71%  6.75%
   FLOATING RATE DEBT                         1,441.7         1,019.2                  237.1   426.8   354.6     0.4     0.3    0.0     0.0     0.0     0.0    0.0    1019.2
                                                3.88%           3.85%                  4.20%   4.03%   3.41%   4.75%   4.75%  4.75%   0.00%   0.00%   0.00%  0.00%
   TOTAL                                      2,810.8         2,060.4                  319.5   433.8   541.3     9.4    95.3    9.0    79.2   342.4   157.6   72.8    2060.4
                                                5.65%           5.70%                  5.13%   4.07%   5.09%   7.06%   7.62%  7.06%   6.66%   7.28%   7.71%  6.75%

   --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Average Maturity               4.28
                                                                                      =======

   (a) Does not include effect of amortization of debt issuance costs or interest rate hedging costs.
   (b) As of 6/30/02, $200 M is swapped to an all-in rate of 8.14%.  Because the swap does not qualify for hedge accounting
         changes in the fair value of the swap are recognized through earnings.
   (c) LIBOR rate is locked to Maturity on $147.9 M at 4.59%.
   (d) LIBOR rate is locked to November 2002 on $182.4 M at 4.15% and floating month to month on the remainder.  Beginning
         in Nov. 2002, $100 M of this debt is swapped to June 2004 at LIBOR rate of 4.125%.
   (e) LIBOR rate is locked to Oct. 2002 on $106.7 M at 4.5% and to Nov. 2002 on 17.6 M at 4.32% with the remainder
        floating month to month.  Beginning in Oct. 2002, $100 M of this debt is swapped to Oct. 2003 at a LIBOR rate of 2.5%.
        The rate is swapped from 10/03 - 10/04 at a LIBOR rate of 4.35% and from 10/04 - 5/05 at a LIBOR rate of 5.25%.
   (f) LIBOR rate is locked to November 2002 on $75 M at 3.17% and  floating month to month on the remainder.  Beginning in
        Nov. 2002, $100 M of this debt is swapped for one year at a LIBOR rate of 4.3%.
   (g) LIBOR rate is locked to October 2002 on $164.6 M at 4.53% and floating month to month on the remainder.
   (h) Rate floats daily.
   (i) LIBOR rate is floating month to month.
   (j) LIBOR rate is locked to October 2002 on $160.4 M at 4.40%, and floating month to month on the remainder.
   (k) Debt refinanced effective 7/1/02 with new ten year $210 million 6.10% fixed rate loan.

                                                                                MORTGAGE AND OTHER NOTES PAYABLE
                                                                       INCLUDING WEIGHTED INTEREST RATES AT JUNE 30, 2002
                                                                       PLUS THE EFFECT OF WESTFARMS REFINANCING ON 7/1/02

                                                          BENEFICIAL   EFFECTIVE
                                              100%         INTEREST      RATE    (a)
                                                                                      --------------------------------------------------------------------------------------------------------
                                             6/30/02       6/30/02     6/30/02         2002    2003     2004     2005    2006     2007     2008    2009     2010     2011    2012      TOTAL
                                             -------       -------     -------         -----   -----    -----    -----   -----    -----    -----   -----    -----    -----   -----     -----

   CONSOLIDATED  FIXED RATE DEBT:
   --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
   BEVERLY CENTER                               146.0           146.0      8.36%                          146.0                                                                         146.0
   BILTMORE                                      78.6            78.6      7.68%          0.4      0.8      0.9     1.0      1.1      1.2     1.2     72.0                               78.6
   MACARTHUR CENTER                             142.9           100.0      7.59%          0.5      1.1      1.1     1.2      1.3      1.4     1.5      1.7     90.2                     100.0
   REGENCY                                       82.0            82.0      6.75%          0.4      0.9      0.9     1.0      1.1      1.1     1.2      1.3      1.4    72.8              82.0
   THE MALL AT SHORT HILLS                      269.5           269.5      6.70%          1.4      3.0      3.2     3.5      3.7      4.0     4.2    246.4                              269.5
   OTHER                                         22.1            22.1     12.37%          0.3      0.3      0.3     0.3      0.4      0.4     0.1     20.0      0.0     0.0      0.0     22.1
                                            ---------------------------------------------------------------------------------------------------------------------------------------------------
   TOTAL CONSOLIDATED FIXED                     741.1           698.3                     3.0      6.1    152.5     7.0      7.5      8.1     8.3    341.4     91.5    72.8      0.0    698.3
   WEIGHTED RATE                                7.48%           7.47%                   6.95%    6.98%    8.30%   6.98%    6.98%    6.99%   7.01%    7.28%    7.58%   6.75%

   CONSOLIDATED FLOATING RATE DEBT:
   --------------------------------
   GREAT LAKES CROSSING                         149.7           127.3      4.58% (c)      5.0    122.2                                                                                  127.3
   THE SHOPS AT WILLOW BEND                     197.8           197.8      4.11% (d)             197.8                                                                                  197.8
   WELLINGTON GREEN                             137.7           123.9      4.39% (e)                      123.9                                                                         123.9
   TRG CREDIT FACILITY                            7.2             7.2      2.81% (h)      7.2                                                                                             7.2
   TRG CREDIT FACILITY                          195.0           195.0      2.88% (f)                      195.0                                                                         195.0
                                            ---------------------------------------------------------------------------------------------------------------------------------------------------
   TOTAL CONSOLIDATED FLOATING                  687.4           651.2                    12.2    320.0    318.9     0.0      0.0      0.0     0.0      0.0      0.0     0.0      0.0    651.2
   WEIGHTED RATE                                3.91%           3.87%                   3.54%    4.29%    3.47%   0.00%    0.00%    0.00%   0.00%    0.00%    0.00%   0.00%    0.00%

   TOTAL CONSOLIDATED                          1428.5          1349.4                    15.3    326.2    471.4     7.0      7.5      8.1     8.3    341.4     91.5    72.8      0.0   1349.4
   WEIGHTED RATE                                5.76%           5.73%                   4.21%    4.34%    5.03%   6.98%    6.98%    6.99%   7.01%    7.28%    7.58%   6.75%    0.00%
   --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

   JOINT VENTURES FIXED RATE DEBT:
   --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
   ARIZONA MILLS                     50.00%     144.1            72.1      7.90%          0.3      0.6      0.7     0.8      0.8      0.9     0.9      1.0     66.0                      72.1
   CHERRY CREEK                      50.00%     177.0            88.5      7.68%                            0.5     1.3     86.7                                                         88.5
   FAIR OAKS                         50.00%     140.0            70.0      6.60%                                                             70.0                                        70.0
   SUN VALLEY BONDS                  50.00%       0.8             0.4      7.20%          0.1      0.2      0.1                                                                           0.4
   WESTFARMS                         78.94%     210.0           165.8      6.10% (k)      0.7      1.9      2.1     2.1      2.3      2.4     2.5      2.8      2.9     3.1    143.0    165.8
   WOODLAND                          50.00%      66.0            33.0      8.20%                           33.0                                                                          33.0
                                            ---------------------------------------------------------------------------------------------------------------------------------------------------
   TOTAL JOINT VENTURE FIXED                    738.0           429.8                     1.1      2.7     36.3     4.1     89.8      3.3    73.5      3.8     69.0     3.1    143.0    429.8
   WEIGHTED RATE                                7.11%           6.97%                   6.68%    6.60%    8.07%   6.91%    7.64%    6.58%   6.60%    6.59%    7.82%   6.10%    6.10%

   JOINT VENTURES FLOATING RATE DEBT:
   ----------------------------------
   DOLPHIN MALL                      50.00%     183.0 (b)        91.5      4.46% (g)     91.5                                                                                            91.5
   INTERNATIONAL PLAZA               26.49%     187.1            49.6      4.31% (j)     49.6                                                                                            49.6
   THE MALL AT MILLENIA              50.00%      92.1            46.0      3.59% (i)              46.0                                                                                   46.0
   STAMFORD TOWN CENTER              50.00%      76.0            38.0      2.64% (i)     38.0                                                                                            38.0
   SUNVALLEY                         50.00%     110.0            55.0      2.76% (i)              55.0                                                                                   55.0
   SUNVALLEY                         50.00%      10.0             5.0      4.84% (i)               5.0                                                                                    5.0
   OTHER                                          4.1             2.5      4.75%          0.4      0.8      0.7     0.4      0.3      0.0                                                 2.5
                                            ---------------------------------------------------------------------------------------------------------------------------------------------------
   TOTAL JOINT VENTURE FLOATING                 662.3           287.6                   179.5    106.8      0.7     0.4      0.3      0.0     0.0      0.0      0.0     0.0      0.0    287.6
   WEIGHTED RATE                                3.81%           3.74%                   4.03%    3.23%    4.75%   4.75%    4.75%    4.75%   0.00%    0.00%    0.00%   0.00%    0.00%

   TOTAL JOINT VENTURE                         1400.3           717.4                   180.6    109.5     37.0     4.5     90.1      3.4    73.5      3.8     69.0     3.1    143.0    717.4
   WEIGHTED RATE                                5.55%           5.67%                   4.05%    3.31%    8.01%   6.73%    7.63%    6.55%   6.60%    6.59%    7.82%   6.09%    6.10%
   --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

   TRG BENEFICIAL INTEREST TOTALS
   ------------------------------
   FIXED RATE DEBT                            1,479.1         1,128.0                     4.1      8.9    188.8    11.2     97.4     11.4    81.7    345.2    160.5    75.9    143.0   1128.0
                                                7.30%           7.28%                   6.88%    6.86%    8.26%   6.95%    7.59%    6.87%   6.64%    7.27%    7.68%   6.72%    6.10%
   FLOATING RATE DEBT                         1,349.7           938.8                   191.7    426.8    319.6     0.4      0.3      0.0     0.0      0.0      0.0     0.0      0.0    938.8
                                                3.86%           3.83%                   4.00%    4.03%    3.47%   4.75%    4.75%    4.75%   0.00%    0.00%    0.00%   0.00%    0.00%
   TOTAL                                      2,828.8         2,066.8                   195.9    435.7    508.4    11.5     97.6     11.4    81.7    345.2    160.5    75.9    143.0   2066.8
                                                5.66%           5.71%                   4.06%    4.08%    5.25%   6.88%    7.58%    6.86%   6.64%    7.27%    7.68%   6.72%    6.10%
   --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Average Maturity                4.99
                                                                                      ========

   (a) Does not include effect of amortization of debt issuance costs or interest rate hedging costs.
   (b) As of 6/30/02, $200 M is swapped to an all-in rate of 8.14%.  Because the swap does not qualify for hedge accounting
         changes in the fair value of the swap are recognized through earnings.
   (c) LIBOR rate is locked to Maturity on $147.9 M at 4.59%.
   (d) LIBOR rate is locked to November 2002 on $182.4 M at 4.15% and floating month to month on the remainder.  Beginning
         in Nov. 2002, $100 M of this debt is swapped to June 2004 at LIBOR rate of 4.125%.
   (e) LIBOR rate is locked to Oct. 2002 on $106.7 M at 4.5% and to Nov. 2002 on 17.6 M at 4.32% with the remainder
        floating month to month.  Beginning in Oct. 2002, $100 M of this debt is swapped to Oct. 2003 at a LIBOR rate of 2.5%.
        The rate is swapped from 10/03 - 10/04 at a LIBOR rate of 4.35% and from 10/04 - 5/05 at a LIBOR rate of 5.25%.
   (f) LIBOR rate is locked to November 2002 on $75 M at 3.17% and  floating month to month on the remainder.  Beginning in
        Nov. 2002, $100 M of this debt is swapped for one year at a LIBOR rate of 4.3%.
   (g) LIBOR rate is locked to October 2002 on $164.6 M at 4.53% and floating month to month on the remainder.
   (h) Rate floats daily.
   (i) LIBOR rate is floating month to month.
   (j) LIBOR rate is locked to October 2002 on $160.4 M at 4.40%, and floating month to month on the remainder.
   (k) Debt refinanced effective 7/1/02, prior debt was $100 M fixed at 7.8% and $55 M floating rate debt.