SECURITIES AND EXCHANGE COMMISSION
                                               WASHINGTON, D.C.  20549

                                                      FORM 10-K

X        ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
         EXCHANGE ACT OF 1934
         For the fiscal year ended December 31, 2001.
                                                     OR

         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
         EXCHANGE ACT OF 1934

     For the transition period from ___________________ to _________________
     Commission File Number 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 office)                                  (Zip Code)

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

Securities registered pursuant to Section 12(b) of the Act:

                                                                               Name of each exchange
                     Title of each class                                        on which registered
                     -------------------                                    ---------------------------
                        Common Stock,                                         New York Stock Exchange
                       $0.01 Par Value

                  8.3% Series A Cumulative                                    New York Stock Exchange
                 Redeemable Preferred Stock,
                       $0.01 Par Value

Securities registered pursuant to Section 12(g) of the Act:  None

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  periods that the
registrant was required to file such report(s)) and (2) has been subject to such filing  requirements  for the past
90 days.

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

______   Indicate by a check mark if  disclosure  of delinquent  filers  pursuant to Item 405 of Regulation  S-K is
         not contained  herein,  and will not be contained,  to the best of registrant's  knowledge,  in definitive
         proxy or information  statements  incorporated by reference in Part III of this Form 10-K or any amendment
         to this Form 10-K.

As of  March  25,  2002,  the   aggregate   market  value   of the  50,607,645  shares  of  Common   Stock  held by
non-affiliates  of  the  registrant  was  $754  million,  based upon the closing price $14.90 on the New York Stock
Exchange  composite tape on such date. (For this  computation,  the registrant has excluded the market value of all
shares of its Common Stock  reported as  beneficially  owned by executive  officers and directors of the registrant
and certain  other  shareholders;  such  exclusion  shall not be deemed to  constitute  an admission  that any such
person is  an  "affiliate" of  the  registrant.) As of March 25, 2002, there  were  outstanding  51,017,431  shares
of Common Stock.

DOCUMENTS INCORPORATED BY REFERENCE

Portions  of the proxy  statement  for the  annual  shareholders  meeting  to be held in 2002 are  incorporated  by
reference into Part III.

 PART I

Item 1.  BUSINESS

The Company

   Taubman Centers,  Inc. (the "Company" or "TCO") was incorporated in Michigan in 1973 and had its initial public offering
("IPO") in 1992.  Upon  completion of the IPO, the Company became the managing  general partner of The Taubman Realty Group
Limited  Partnership (the "Operating  Partnership" or "TRG").  The Company has a 62% partnership  interest in the Operating
Partnership,  through which the Company conducts all its operations.  The Company owns,  develops,  acquires,  and operates
regional shopping centers  ("Centers") and interests therein.  The Company's  portfolio,  as of December 31, 2001, included
20 urban and suburban  Centers  located in nine states.  Two  additional  centers are under  construction  and will open in
October 2002 and September 2003. The Operating  Partnership also owns certain  regional retail shopping center  development
projects and more than 99% of The Taubman  Company LLC (the  "Manager"),  which  manages the shopping  centers and provides
other  services  to the  Operating  Partnership  and the  Company.  See the  table on pages  11 and 12 of this  report  for
information regarding the Centers.

   The Company is a real estate  investment  trust,  or REIT,  under the  Internal  Revenue  Code of 1986,  as amended (the
"Code").  In order to  satisfy  the  provisions  of the Code  applicable  to REITs,  the  Company  must  distribute  to its
shareholders at least 90% of  its  REIT taxable income and meet  certain  other  requirements. The Operating  Partnership's
partnership agreement provides that the  Operating  Partnership  will distribute,  at a minimum, sufficient  amounts to its
partners  such that the  Company's pro rata share will enable the  Company to pay  shareholder dividends (including capital
gains  dividends  that  may  be  required  upon  the Operating  Partnership's sale  of an asset) that will satisfy the REIT
provisions of the Code.

Recent Developments

   For a discussion of business  developments that occurred in 2001, see Item 7,  "Management's  Discussion and Analysis of
Financial Condition and Results of Operations" (MD&A).

The Shopping Center Business

   There are several types of retail shopping centers,  varying primarily by size and marketing  strategy.  Retail shopping
centers range from  neighborhood  centers of less than 100,000 square feet of GLA to regional and  super-regional  shopping
centers.  Retail  shopping  centers  in excess of  400,000  square  feet of GLA are  generally  referred  to as  "regional"
shopping  centers,  while  those  centers  having in excess of 800,000  square  feet of GLA are  generally  referred  to as
"super-regional"  shopping centers.  Seventeen of the Centers are  "super-regional"  centers. In this annual report on Form
10-K, the term "regional  shopping centers" refers to both regional and  super-regional  shopping  centers.  The term "GLA"
refers to gross  retail  space,  including  anchors and mall tenant  areas,  and the term "Mall GLA" refers to gross retail
space,  excluding  anchors.  The term "anchor"  refers to a department  store or other large retail  store.  The term "mall
tenants"  refers to stores  (other  than  anchors)  that are  typically  specialty  retailers  and lease  space in shopping
centers.

                                                       1

Business of the Company

   The  Company,  as managing  general  partner of the  Operating  Partnership,  is engaged in the  ownership,  management,
leasing, acquisition, development, and expansion of regional shopping centers.

   The Centers:

   o   are strategically  located in major  metropolitan  areas, many in  communities  that are among  the most affluent in
       the country,  including New York City, Los Angeles, Denver, Detroit,  Phoenix, Miami, Dallas, Tampa, and Washington,
       D.C.;

   o   range in  size  between  438,000 and 1.6 million square feet of GLA and  between  133,000 and 636,000 square feet of
       Mall GLA. The smallest Center has  approximately 50 stores,  and the largest has over 200 stores. Of the 20 Centers,
       17 are super-regional shopping centers;

   o   have approximately 2,800 stores operated by its mall tenants under approximately 1,200 trade names;

   o   have 60 anchors, operating under 17 trade names;

   o   lease approximately 78% of Mall GLA to national chains,  including  subsidiaries  or  divisions of  The Limited (The
       Limited,  Express,  Victoria's Secret, and others),  The Gap (The Gap, Gap Kids, Banana Republic,  and others),  and
       Foot Locker, Inc. (Foot Locker, Lady Foot Locker, Champs Sports, and others); and

   o   are  among  the most  productive  (measured  by mall tenants'  average per square foot sales) in the United  States.
       In 2001,  mall tenants had average per square foot sales of $456,  which is  significantly  greater than the average
       for all regional shopping centers owned by public companies.

   The most  important  factor  affecting  the  revenues  generated  by the Centers is leasing to mall  tenants  (primarily
specialty  retailers),  which  represents  approximately  90% of  revenues.  Anchors  account for less than 10% of revenues
because  many own their  stores and, in general,  those that lease  their  stores do so at rates  substantially  lower than
those in effect for mall tenants.

   The Company's  portfolio is concentrated in highly productive  super-regional  shopping centers.  Of the 20 Centers,  17
had annual rent rolls at December 31, 2001 of over $10 million.  The Company  believes that this level of  productivity  is
indicative  of the Centers'  strong  competitive  position  and is, in  significant  part,  attributable  to the  Company's
business  strategy and philosophy.  The Company  believes that large shopping  centers  (including  regional and especially
super-regional  shopping  centers) are the least  susceptible to direct  competition  because (among other reasons) anchors
and large  specialty  retail  stores do not find it  economically  attractive  to open  additional  stores in the immediate
vicinity of an existing  location for fear of competing with themselves.  In addition to the advantage of size, the Company
believes  that the Centers'  success can be  attributed in part to their other  physical  characteristics,  such as design,
layout, and amenities.

                                                       2

Business Strategy And Philosophy

   The Company believes that the regional shopping center business is not simply a real estate  development  business,  but
rather an  operating  business  in which a  retailing  approach to the  on-going  management  and leasing of the Centers is
essential. Thus the Company:

   o   Offers a large,  diverse selection of retail stores in each  Center  to give customers a broad selection of consumer
       goods and variety of price ranges.

   o   Endeavors  to increase  overall mall  tenants'  sales by leasing  space to a  constantly  changing  mix  of tenants,
       thereby increasing achievable rents.

   o   Seeks to anticipate trends in the retailing industry  and  emphasizes  ongoing  introductions of new retail concepts
       into the Centers.  Due in part to this  strategy,  a number of successful retail trade names have opened their first
       mall stores in the Centers.  In addition,  the Company has brought to the Centers "new to the market" retailers. The
       Company believes that its execution of this leasing strategy is unique in the industry and  is  an important element
       in building and maintaining customer loyalty and increasing mall productivity.

   o   Provides  innovative  initiatives that utilize technology and the  internet  to heighten the shopping experience for
       customers,  build  customer loyalty and increase  tenant sales. One such  initiative  is the  Company's  ShopTaubman
       one-to-one  marketing  program, which connects shoppers and retailers through online websites.  Approximately 99% of
       the managed centers' tenants  participate  in  the  center  websites  and  at  the  end  of  2001, these  sites  had
       approximately 350,000 registered users.

   The Centers compete for retail consumer  spending through  diverse,  in-depth  presentations  of  predominantly  fashion
merchandise in an  environment  intended to facilitate  customer  shopping.  While some Centers  include stores that target
high-end,  upscale  customers,  each Center is  individually  merchandised  in light of the  demographics  of its potential
customers within convenient driving distance.

   The  Company's  leasing  strategy  involves  assembling a diverse mix of mall tenants in each of the Centers in order to
attract  customers,  thereby  generating  higher  sales by mall  tenants.  High  sales  by mall  tenants  make the  Centers
attractive to prospective  tenants,  thereby  increasing the rental rates that prospective  tenants are willing to pay. The
Company  implements an active  leasing  strategy to increase the Centers'  productivity  and to set minimum rents at higher
levels.  Elements of this strategy include terminating leases of under-performing  tenants,  renegotiating existing leases,
and not leasing  space to  prospective  tenants  that (though  viable or  attractive  in certain  ways) would not enhance a
Center's retail mix.

Potential For Growth

   The Company's  principal  objective is to enhance shareholder value. The Company seeks to maximize the financial results
of its assets, while pursuing a growth strategy that concentrates primarily on an active new center development program.

Development of New Centers

   The Company is pursuing an active program of regional  shopping  center  development.  The Company  believes that it has
the expertise to develop  economically  attractive  regional  shopping centers through  intensive  analysis of local retail
opportunities.  The  Company  believes  that the  development  of new centers is the best use of its capital and an area in
which the Company excels.  At any time, the Company has numerous potential development projects in various stages.

                                                       3

   The following table includes the new centers that opened in 2001:

Center                                Opening Date            Size (sq. ft.) Anchors
------                                ------------            -------------- -------

Dolphin Mall                          March 1, 2001           1.3 million    Off  5th  Saks,  Dave  &  Busters,  Cobb
  (Miami, Florida)                                                           Theatres,   Burlington   Coat   Factory,
                                                                             Marshall's,  Oshman's  Supersports  USA,
                                                                             and more

The Shops at Willow Bend              August 3, 2001          1.5 million    Neiman Marcus,  Lord & Taylor,  Foley's,
  (Plano, Texas)                                                             Dillard's, Saks Fifth Avenue (2004)

International Plaza                   September 14, 2001      1.25 million   Neiman   Marcus,   Nordstrom,   Lord   &
  (Tampa, Florida)                                                           Taylor, Dillard's

The Mall at Wellington Green          October 5, 2001         1.3 million    Burdines,  Dillard's,  JCPenney,  Lord &
  (Wellington, Florida)                                                      Taylor, Nordstrom (2003)

   Additionally,  two new centers  are  currently  under  construction;  The Mall at  Millenia,  a 1.2 million  square foot
regional  shopping  center in Orlando,  Florida is scheduled to open in October  2002,  and Stony Point Fashion Park, a 690
thousand square foot center in Richmond, Virginia,  is scheduled to open in September 2003.

   The  Company's  policies  with  respect to  development  activities  are  designed to reduce the risks  associated  with
development.  For  instance,  the  Company  previously  entered  into an  agreement  to lease a center  while  the  Company
investigated the  redevelopment  opportunities of the center.  Also, the Company  generally does not intend to acquire land
early in the development  process.  Instead,  the Company  generally  acquires options on land or forms  partnerships  with
landholders holding potentially  attractive  development sites. The Company typically exercises the options only once it is
prepared to begin construction.  The pre-construction  phase for a regional center typically extends over several years and
the time to obtain  anchor  commitments,  zoning and  regulatory  approvals,  and public  financing  arrangements  can vary
significantly  from project to project.  In addition,  the Company does not intend to begin construction until a sufficient
number of anchor  stores  have  agreed to operate in the  shopping  center,  such that the  Company is  confident  that the
projected  sales and rents from Mall GLA are  sufficient  to earn a return on invested  capital in excess of the  Company's
cost of capital.  Having historically  followed these principles,  the Company's experience indicates that less than 10% of
the costs of the development of a regional shopping center will be incurred prior to the construction  period.  However, no
assurance  can be given that the Company will  continue to be able to so limit  pre-construction  costs.  Unexpected  costs
due to extended  zoning and  regulatory  processes may cause the Company's  investment in a project to exceed this historic
experience.

   While the Company will continue to evaluate development projects using criteria,  including financial criteria for rates
of return,  similar to those  employed in the past,  no assurances  can be given that the adherence to these  policies will
produce  comparable  results in the future. In addition,  the costs of shopping center  development  opportunities that are
explored  but  ultimately  abandoned  will,  to some extent,  diminish  the overall  return on  development  projects  (see
"Management's  Discussion and Analysis of Financial  Condition and Results of Operations -- Liquidity and Capital Resources
-- Capital Spending" for further discussion of the Company's development activities).

Strategic Acquisitions

   The Company's  objective is to acquire  existing centers only when they are compatible with the quality of the Company's
portfolio (or can be redeveloped to that level) and that satisfy the Company's strategic plans and pricing requirements.

   In early  2002,  the Company  entered  into an  agreement  to acquire a 50% general  partnership  interest in  Sunvalley
Shopping Center in Concord, California.  The Manager has managed this center since its development.

                                                       4

Expansions of the Centers

   Another  potential  element of growth is the  strategic  expansion of existing  properties  to update and enhance  their
market  positions,  by replacing or adding new anchor  stores or  increasing  mall tenant  space.  Most of the Centers have
been designed to accommodate  expansions.  Expansion projects can be as significant as new shopping center  construction in
terms of scope and cost,  requiring  governmental and existing anchor store approvals,  design and engineering  activities,
including rerouting  utilities,  providing  additional parking areas or decking,  acquiring additional land, and relocating
anchors and mall tenants (all of which must take place with a minimum of disruption to existing tenants and customers).

   The following table includes information regarding recent development, acquisition, and expansion activities.

Developments:

       Completion Date                            Center                                 Location
       ---------------                            ------                                 --------

   November 1998                          Great Lakes Crossing                    Auburn Hills, Michigan
   March 1999                             MacArthur Center                        Norfolk, Virginia
   March 2001                             Dolphin Mall                            Miami, Florida
   August 2001                            The Shops at Willow Bend                Plano, Texas
   September 2001                         International Plaza                     Tampa, Florida
   October 2001                           The Mall at Wellington Green            Wellington, Florida

Acquisitions:

       Completion Date                            Center                                 Location
       ---------------                            ------                                 --------

   December 1999                          Great Lakes Crossing -                  Auburn Hills, Michigan
                                            additional interest (1)
   August 2000                            Twelve Oaks Mall -                      Novi, Michigan
                                            additional interest  (2)

Expansions and Renovations:

       Completion Date                            Center                                 Location
       ---------------                            ------                                 --------

   August 1998                            Cherry Creek (3)                        Denver, Colorado
   November 1998                          Woodland (4)                            Grand Rapids, Michigan
   November 1999                          Fairlane (5)                            Dearborn, Michigan
   November 1999                          Biltmore (6)                            Phoenix, Arizona
   February 2000 - September 2000         Fair Oaks (7)                           Fairfax, Virginia
   May 2000                               Fairlane (8)                            Dearborn, Michigan
   December 2000-2001                     Beverly Center (4)                      Los Angeles, California
   November 2001                          Twelve Oaks Mall (5)                    Novi, Michigan
   November 2001                          Woodland (5)                            Grand Rapids, Michigan

(1)  In December 1999, an additional 5% interest in the center was acquired.
(2)  In August 2000, the joint venture partner's 50% interest in the center was acquired.
(3)  Additional 132,000 square foot expansion of mall tenant space opened in August of 1998.
(4)  Mall renovation continued in 2001.
(5)  New food court opened.
(6)  Macy's expansion completed.
(7)  Hecht's opened an expansion in February.  Additionally,  a JCPenney  expansion and  newly  constructed  Macy's  opened
     in September.
(8)  A 21-screen theater opened.

Internal Growth

   The Centers are among the most  productive in the nation when  measured by mall tenant's  average sales per square foot.
Higher  sales per square foot enable mall tenants to remain  profitable  while  paying  occupancy  costs that are a greater
percentage  of total  sales.  As leases  expire at the  Centers,  the Company has  consistently  been able,  on a portfolio
basis, to lease the available space to existing or new tenants at higher rates.

                                                       5

   Augmenting  this  growth,  the  Company is  pursuing  a number of new  sources of revenue from the Centers. For example,
the Company has entered into a 15-year lease agreement with  JCDecaux,  the world's  largest street furniture and outdoor
advertising company.  The agreement created an in-mall advertising  program in the Company's portfolio of owned properties,
creating new point-of-sale  opportunities for retailers and manufacturers as well as heightening the in-mall experience for
shoppers.  In addition,  the Company expects increased revenue from its specialty leasing  efforts.  In recent  years a new
industry -- beyond  traditional  carts  and  kiosks -- has  evolved,  with  more  and  better  quality  specialty  tenants.
The Company has in place a company-wide program to maximize this opportunity.

Rental Rates

   As leases have expired in the 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 a period 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,  rents on new leases will grow more slowly or will  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.

   The following table contains certain information  regarding per square foot minimum rent at Centers that have been owned
and open for at least two years.

                                                     2001            2000 (1)           1999
                                                     ----            ----               ----
Average minimum rent per square foot:
     All mall tenants                               $40.97            $39.77           $39.58
     Stores closing during year                     $40.76            $40.06           $39.49
     Stores opening during year                     $49.58            $46.21           $48.01

(1)  Amounts have been restated to include centers comparable to the 2001 statistic.

Lease Expirations

   The following  table shows lease  expirations  based on  information  available as of December 31, 2001 for the next ten
years for the Centers in operation at that date:

                                                                                                        Percent of
                                                     Annualized Base        Annualized Base            Total Leased
   Lease       Number of        Leased Area            Rent Under             Rent Under              Square Footage
Expiration      Leases              in               Expiring Leases        Expiring Leases           Represented by
   Year        Expiring        Square Footage        (in thousands)         Per Square Foot (1)      Expiring Leases
   ----        --------        --------------        --------------         ---------------          ---------------

   2002 (2)       127             348,672               $11,723                  $33.62                     3.4%
   2003           223             709,854                25,234                   35.55                     7.0
   2004           205             518,555                24,044                   46.37                     5.1
   2005           248             630,740                30,297                   48.03                     6.2
   2006           228             597,559                26,451                   44.27                     5.9
   2007           212             689,404                26,893                   39.01                     6.8
   2008           282             954,212                36,371                   38.12                     9.4
   2009           278             902,923                37,761                   41.82                     8.9
   2010           135             456,217                20,199                   44.28                     4.5
   2011           468           1,609,402                63,921                   39.72                    15.9

(1)  A higher  percentage of space at value  centers is typically  rented to major  and  mall tenants  at  lower rents than
     the portfolio average.  Excluding value centers,  the annualized base rent under expiring leases is greater by a range
     of $2.78 to $12.89 or an average of $6.63 for the periods presented within this table.
(2)  Excludes  leases  that  expire  in  2002  for  which  renewal  leases or leases  with  replacement  tenants  have been
     executed as of December 31, 2001.

                                                       6

   The Company believes that the information in the table is not necessarily indicative  of  what  will occur in the future
because of several factors, but principally because its leasing policies and practices create a  significant level of early
lease terminations at the Centers.  For example, the average remaining term of the leases that were terminated  during  the
period 1996 to 2001 was approximately two years. The average term of leases signed during 2001 and  2000 was  approximately
eight years.

   In addition,  mall tenants at the Centers may seek the  protection  of the  bankruptcy  laws,  which could result in the
termination  of such tenants'  leases and thus cause a reduction in cash flow. In 2001,  approximately  4.5% of leases were
so  affected  compared  to 2.3% in 2000.  This  statistic  has ranged  from 1.2% to 4.5% since the  Company  went public in
1992.  Since 1991, the annual provision for losses on accounts receivable has been less than 2% of annual revenues.

Occupancy

   Mall tenant average occupancy, ending occupancy, and leased space rates of the Centers are as follows:

                                                                 Year Ended December 31
                                             ----------------------------------------------------
                                             2001 (1)   2000         1999       1998 (2)  1997
                                             ----       ----         -----      ----      ----

Average Occupancy                            84.9%      89.1%        89.0%      89.4%     87.6%
Ending Occupancy                             84.0%      90.5%        90.4%      90.2%     90.3%
Leased Space                                 87.7%      93.8%        92.1%      92.3%     92.3%

(1)  Excluding centers  opened during  2001, average  occupancy,  ending occupancy,  and leased  space were  88.1%,  88.8%,
     and 91.8%, respectively.
(2)  Excludes centers transferred to General Motors pension trusts.

Major Tenants

   No single retail  company  represents  10% or more of the Company's  revenues.  The combined  operations of The Limited,
Inc.  accounted  for  approximately  5.7% of Mall GLA as of December  31,  2001 and of 2001  minimum  rent.  The largest of
these,  in terms of square footage and rent, is Express,  which  accounted for  approximately  1.7% of Mall GLA and 1.6% of
2001 minimum  rent.  No other single  retail  company  accounted  for more than 3% of Mall GLA or 4% of 2001 minimum  rent.
The following table shows the ten largest tenants and their square footage as of December 31, 2001.

                                                                                  # of       Square       % of
Tenant                                                                            Stores     Footage    Mall GLA
------                                                                            ------     -------    --------

Limited (The Limited, Express, Victoria's Secret)                                   73        527,112       5.7%
Gap (Gap, Gap Kids, Banana Republic)                                                36        258,209       2.8%
Foot Locker, Inc. (Foot Locker, Lady Foot Locker, Champs Sports)                    39        193,591       2.1%
Williams-Sonoma (Williams-Sonoma, Pottery Barn, Hold Everything)                    25        164,498       1.8%
Abercrombie & Fitch                                                                 19        143,648       1.6%
Spiegel (Eddie Bauer)                                                               14        115,929       1.3%
Talbots                                                                             17        113,683       1.2%
Forever 21                                                                           7        110,078       1.2%
Borders Group (Borders, Waldenbooks)                                                15        108,694       1.2%
Ann Taylor                                                                          17         86,074       0.9%

                                                       7

General Risks of the Company

Economic Performance and Value of Shopping Centers Dependent on Many Factors

   The economic  performance and value of the Company's  shopping centers are dependent on various  factors.  Additionally,
these same factors will influence the Company's  decision  whether to go forward on the  development of new centers and may
affect the ultimate  economic  performance and value of projects under  construction  (see other risks  associated with the
development of new centers under "Business of the Company--Development of New Centers").  Such factors include:

   o   changes in the national, regional, and/or local economic climates,

   o   competition from other shopping  centers, discount  stores, outlet malls, discount shopping clubs,  direct mail, and
       the internet in attracting customers and tenants,

   o   increases in operating costs,

   o   the public perception of the safety of customers at the shopping centers,

   o   environmental or legal liabilities,

   o   availability and cost of financing, and

   o   uninsured losses, whether because of  unavailability  of  coverage or in excess of policy specifications and insured
       limits, including  those  resulting  from  wars, acts  of  terrorism, riots  or  civil  disturbances, or losses from
       earthquakes or floods.

In addition, the value of shopping centers may be adversely affected by:

   o   changes in government regulations, and

   o   changes in real estate zoning and tax laws.

Adverse changes in the economic performance and value of shopping centers would adversely affect the Company's income and
cash available to pay dividends.

Third Party Interests in the Centers

   Some of the shopping  centers  which the Company  develops and leases are  partially  owned by  non-affiliated  partners
through joint venture  arrangements.  As a result,  the Company may not be able to control all  decisions  regarding  those
shopping  centers and may be required to take actions that are in the  interest of the joint  venture  partners but not the
Company's best interests.

Bankruptcy of Mall Tenants or Joint Venture Partners

   The Company  could be adversely  affected by the  bankruptcy  of third  parties.  The  bankruptcy of a mall tenant could
result in the  termination  of its lease which would lower the amount of cash  generated by that mall.  In  addition,  if a
department  store operating an anchor at one of our shopping  centers were to go into bankruptcy and cease  operating,  its
closing may lead to reduced  customer  traffic and lower mall tenant sales which would, in turn,  affect the amount of rent
our tenants pay us. The  profitability  of shopping  centers held in a joint  venture  could also be adversely  affected by
the bankruptcy of one of the joint venture  partners if, because of certain  provisions of the bankruptcy laws, the Company
was unable to make important decisions in a timely fashion or became subject to additional liabilities.

                                                       8

Investments in and Loans to Third Parties

   The Company has occasionally made investments in technology  industry  companies to augment the services the Company can
provide to its tenants,  enhance the overall value of its shopping centers,  and earn financial  returns.  The Company also
occasionally  extends  credit to third parties in connection  with the sales of land or other transactions.  The Company is
exposed  to risk in the event the  values of its  investments  and/or its loans decrease due to overall market  conditions,
business  failure,  and/or other  nonperformance by the investees or counterparties.

Third Party Contracts

   The  Company  provides  property  management,  leasing,  development,  and  other  administrative  services  to  centers
transferred to GMPT,  other third parties and to certain Taubman  affiliates.  The contracts under which these services are
provided may be canceled or not renewed or may be  renegotiated  on terms less favorable to the Company.  Certain  overhead
costs allocated to these contracts would not be eliminated if the contracts were to be canceled or not renewed.

Inability to Maintain Status as a REIT

   o   The Company may not be able to maintain its status as a real estate  investment trust, or  REIT, for  Federal income
       tax purposes with the result that the income distributed to shareholders will not be deductible in computing taxable
       income and instead would be subject to tax at regular corporate rates. Although the Company believes it is organized
       and operates in a manner to maintain its REIT  qualification, many of the REIT requirements of the Internal  Revenue
       Code are very complex  and  have  limited  judicial  or  administrative  interpretations.  Changes  in  tax  laws or
       regulations  or  new  administrative  interpretations  and  court decisions may also affect the Company's ability to
       maintain REIT status in the future.  If the Company  fails to qualify as a REIT,  its income may also be subject  to
       the alternative minimum tax. If the Company does not maintain its REIT status in any year, it may be unable to elect
       to be treated as a REIT for the next four  taxable  years.  In  addition,  if the Company fails to meet the Internal
       Revenue Code's requirement that it distribute to shareholders at least 90% of otherwise  taxable income, the Company
       will be subject to a nondeductible 4% excise tax on a portion of its income.

   o   Although the Company currently intends to maintain  its status as a REIT, future  economic,  market,  legal, tax, or
       other considerations may cause it to determine that  it  would  be  in  the  Company's  and  its  shareholders' best
       interests to revoke its REIT election. As noted above, if the Company revokes its REIT election, it will not be able
       to elect REIT status for the next four taxable years.

Environmental Matters

   All of the Centers presently owned by the Company (not including option interests in the Development  Projects or any of
the real estate managed but not included in the Company's  portfolio) have been subject to environmental  assessments.  The
Company is not aware of any environmental  liability  relating to the Centers or any other property,  in which they have or
had an interest  (whether as an owner or operator) that the Company  believes,  would have a material adverse effect on the
Company's  business,  assets,  or results of  operations.  No  assurances  can be given,  however,  that all  environmental
liabilities  have been  identified  or that no prior owner,  operator,  or current  occupant  has created an  environmental
condition  not  known  to the  Company.  Moreover,  no  assurances  can be given  that  (i)  future  laws,  ordinances,  or
regulations will not impose any material  environmental  liability or that (ii) the current environmental  condition of the
Centers will not be affected by tenants and  occupants of the Centers,  by the  condition of  properties in the vicinity of
the Centers (such as the presence of underground storage tanks), or by third parties unrelated to the Company.

   There are asbestos  containing  materials  ("ACMs") at some of the older Centers,  primarily in the form of floor tiles,
roof coatings,  and mastics. The floor tiles, roof coatings,  and mastics are generally in good condition.  The Manager has
an operations and maintenance  program that details  operating  procedures with respect to ACMs prior to any renovation and
that requires periodic inspection for any change in condition of existing ACMs.

                                                       9

Personnel

   The Company has engaged the Manager to provide real estate  management,  acquisition,  development,  and  administrative
services required by the Company and its properties.

   As of December 31, 2001, the Manager had 451 full-time employees.  The following table provides a breakdown of employees
by operational areas as of December 31, 2001:

                                                                               Number Of Employees
                                                                               -------------------

                Property Management...............................                     218
                Leasing ..........................................                      71
                Development.......................................                      35
                Financial Services................................                      70
                Other.............................................                      57
                                                                                        --
                        Total.....................................                     451
                                                                                       ===

   The Manager considers its relations with its employees to be good.

Item 2.  PROPERTIES

Ownership

   The  following  table sets forth  certain  information  about each of the Centers.  The table  includes  only Centers in
operation  at December  31,  2001.  Excluded  from this table are The Mall at  Millenia,  which will open in 2002 and Stony
Point  Fashion  Park,  which  will  open in 2003.  Centers  are owned in fee  other  than  Beverly  Center,  Cherry  Creek,
International  Plaza,  La Cumbre Plaza,  MacArthur  Center,  and Paseo Nuevo,  which are held under ground leases  expiring
between 2028 and 2083.

   Certain of the Centers are  partially  owned through  joint  ventures.  Generally,  the  Operating  Partnership's  joint
venture  partners have ongoing rights with regard to the disposition of the Operating  Partnership's  interest in the joint
ventures, as well as the approval of certain major matters.

                                                       10

                                                                           Sq. Ft. of GLA/
                                                                              Mall GLA         Year Opened/       Year         Ownership %         Leased Space (1)       2001 Rent (2)
 Owned Centers                              Anchors                        as of 12/31/01        Expanded       Acquired     as of 12/31/01         as of 12/31/01       (in Thousands)
 -------------                              -------                     --------------------  --------------  -----------  -------------------      --------------       --------------

Arizona Mills                        GameWorks, Harkins Cinemas,             1,227,000/           1997                              37%                    97%              $24,592
Tempe, AZ                            JCPenney Outlet, Neiman Marcus-           521,000
(Phoenix Metropolitan Area)          Last Call, Off 5th Saks

Beverly Center                       Bloomingdale's, Macy's                    876,000/           1982                              70%(3)                 98%              $27,897
Los Angeles, CA                                                                568,000

Biltmore Fashion Park                Macy's, Saks Fifth Avenue                 600,000/        1963/1992/        1994              100%                    95%              $11,481
Phoenix, AZ                                                                    293,000          1997/1999

Cherry Creek                         Foley's, Lord & Taylor, Neiman          1,023,000/         1990/1998                           50%                    90%              $27,691
Denver, CO                           Marcus, Saks Fifth Avenue                 550,000   (4)

Dolphin Mall                         Burlington Coat Factory,                1,300,000/
Miami, FL                            Cobb Theatres, Dave & Busters,            636,000            2001                              50%                    80%                 (5)
                                     Oshman's Supersports USA,
                                     Off 5th Saks, Marshalls

Fair Oaks                            Hecht's, JCPenney, Lord & Taylor,       1,584,000/        1980/1987/                           50%                    90%              $21,625
Fairfax, VA                          Sears, Macy's                             568,000          1988/2000
(Washington, DC Metropolitan Area)

Fairlane Town Center                 Marshall Field's, JCPenney, Lord &      1,494,000/        1976/1978/                          100%                    78%              $14,723
Dearborn, MI                         Taylor, Off 5th Saks, Sears               604,000          1980/2000
(Detroit Metropolitan Area)

Great Lakes Crossing                 Bass Pro Shops Outdoor World,          1,376,000/            1998                              85%                    93%              $22,496
Auburn Hills, MI                     GameWorks, Neiman Marcus-                567,000
(Detroit Metropolitan Area)          Last Call, Off 5th Saks, Star Theatres

International Plaza                  Dillard's, Lord & Taylor, Neiman        1,253,000/           2001                              26%                    80%                 (5)
Tampa, FL                            Marcus, Nordstrom                         611,000

La Cumbre Plaza                      Robinsons-May, Sears                      474,000/         1967/1989        1996              100%(6)                 95%               $4,444
Santa Barbara, CA                                                              174,000

MacArthur Center                     Dillard's, Nordstrom                      937,000/           1999                              70%                    91%              $15,929
Norfolk, VA                                                                    523,000

Paseo Nuevo                          Macy's, Nordstrom                         438,000/           1990           1996              100%(6)                 98%               $4,890
Santa Barbara, CA                                                              133,000

Regency Square                       Hecht's (two locations), JCPenney,        826,000/         1975/1987        1997              100%                    95%              $10,420
Richmond, VA                         Sears                                     239,000

The Mall at Short Hills              Bloomingdale's, Macy's, Neiman          1,341,000/        1980/1994/                          100%                    99%              $36,358
Short Hills, NJ                      Marcus, Nordstrom, Saks Fifth Avenue      519,000            1995

Stamford Town Center                 Filene's, Macy's, Saks Fifth Avenue       861,000/           1982                              50%                    91%              $16,986
Stamford, CT                                                                   368,000

                                                                                        11

                                                                           Sq. Ft. of GLA/
                                                                              Mall GLA         Year Opened/       Year         Ownership %         Leased Space (1)       2001 Rent (2)
 Owned Centers                              Anchors                        as of 12/31/01        Expanded       Acquired     as of 12/31/01         as of 12/31/01       (in Thousands)
 -------------                              -------                     --------------------  -------------   -----------   -----------------       --------------       --------------

Twelve Oaks Mall                     Marshall Field's, JCPenney, Lord &      1,193,000/         1977/1978                          100%                    97%              $21,983
Novi, MI                             Taylor, Sears                             455,000
(Detroit Metropolitan Area)

The Mall at Wellington Green         Burdines, Dillard's, JCPenney,          1,111,000/           2001                              90%                    75%                 (5)
Wellington, FL                       Lord & Taylor                             419,000  (7)
(Palm Beach County)

Westfarms                            Filene's, Filene's Men's Store/         1,295,000/       1974/1983/1997                        79%                    96%              $25,067
West Hartford, CT                    Furniture Gallery, JCPenney, Lord &      525,000
                                     Taylor, Nordstrom

The Shops at Willow Bend             Dillard's, Foley's, Lord & Taylor,      1,341,000/           2001                             100%                    75%                 (5)
Plano, TX                            Neiman Marcus                             558,000   (8)
(Dallas Metropolitan Area)

Woodland                             Marshall Field's, JCPenney, Sears       1,080,000/        1968/1974/                           50%                    93%              $15,005
Grand Rapids, MI                                                               355,000          1984/1989
                                                                            ----------

                                     Total GLA/Total Mall GLA:              21,630,000/
                                                                             9,186,000

                                     Average GLA/Average Mall GLA:           1,082,000/
                                                                               459,000

(1)  Leased  space  comprises both occupied  space  and  space that is leased but not yet occupied.  Leased space for value
     centers (Arizona Mills, Dolphin Mall, and Great Lakes Crossing) includes anchors.
(2)  Includes  minimum  and  percentage rent for  the year ended December 31, 2001.  Excludes rent from certain  peripheral
     properties.
(3)  The Company  has  an  option  to acquire the  remaining  30%. The results of Beverly  Center are  consolidated  in the
     Company's financial statements.
(4)  GLA excludes approximately 166,000 square feet for the renovated buildings on adjacent peripheral land.
(5)  Center was open for only a portion of the year.
(6)  In early 2002, the Company  entered  into  an  agreement  to sell its interests in LaCumbre Plaza and Paseo Nuevo.  In
     addition,  the Company entered into an agreement to acquire a 50% general  partnership  interest in Sunvalley Shopping
     Center located in Concord,  California (see Management's Discussion and Analysis of Financial Condition and Results of
     Operations-Results of Operations- Subsequent Events).
(7)  GLA excludes Nordstrom and additional mall GLA, which will open in 2003.
(8)  GLA excludes Saks Fifth Avenue, which will open in 2004.

                                                                                        12

Anchors

      The following table summarizes  certain  information  regarding the anchors at the operating  Centers  (excluding the
value centers) as of December 31, 2001.

                                        Number of                12/31/01 GLA
    Name                              Anchor Stores             (in thousands)               % of GLA
    ----                              -------------             --------------               --------

Dillard's                                     4                       947                        5.3%

Federated
     Macy's                                   6                     1,162
     Burdines                                 1                       200
     Bloomingdale's                           2                       379
                                           ----                   -------
       Total                                  9                     1,741                        9.8%

JCPenney                                      7                     1,304                        7.4%

May Company
     Lord & Taylor                            8                     1,058
     Hecht's                                  3                       453
     Filene's                                 2                       379
     Filene's Men's Store/
        Furniture Gallery                     1                        80
     Foley's                                  2                       418
     Robinsons-May                            1                       150
                                           ----                    ------
       Total                                 17                     2,538                       14.3%

Neiman Marcus                                 4                       466                        2.6%

Nordstrom (1)                                 5                       843                        4.8%

Saks
     Saks Fifth Avenue (2)                    4                       359
     Off 5th Saks                             1                        93
                                           ----                   -------
                                              5                       452                        2.5%

Sears                                         6                     1,279                        7.2%

Target Corporation
     Marshall Field's                         3                       647                        3.7%
                                           ----                   -------                      -----
Total                                        60                    10,217                       57.6%
                                           ====                   =======                       ====

(1)  A Nordstrom will open at The Mall at  Wellington Green in 2003.
(2)  A Saks will open at The Shops at Willow Bend in 2004.

Mortgage Debt

   The following table sets forth certain  information  regarding the mortgages  encumbering the Centers as of December 31,
2001.  All mortgage  debt in the table below is  nonrecourse  to the  Operating  Partnership,  except for debt  encumbering
Great Lakes Crossing,  Dolphin Mall,  International  Plaza,  The Mall at Millenia,  The Mall at Wellington  Green,  and The
Shops at Willow Bend. The Operating  Partnership  has guaranteed the payment of principal and interest on the mortgage debt
of these Centers.  The loan agreements  provide for the reduction of the amounts  guaranteed as certain center  performance
and  valuation  criteria  are met.  (See  "Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations - Liquidity and Capital Resources - Covenants and  Commitments").  Assessment bonds totaling  approximately $2.0
million, which are not included in the table, also encumber Biltmore and Twelve Oaks Mall.

                                                       13

                                              Principal
                                               Balance         Annual Debt                        Balance Due        Earliest
Centers Consolidated in         Interest    as of 12/31/01       Service           Maturity       on Maturity       Prepayment
TCO's Financial Statements        Rate          (000's)          (000's)             Date          (000's)            Date
--------------------------     ---------    ---------------   -------------       --------       -------------      ----------

Beverly Center                    8.36%          $146,000     Interest Only         07/15/04        $146,000     30 Days Notice  (1)
Biltmore Fashion Park             7.68%            79,007             6,906  (2)    07/10/09          71,391           09/14/01  (3)
Great Lakes Crossing (85%)     Floating   (4)     150,958            Varies  (5)    04/01/02  (6)    150,323      2 Days Notice  (7)
MacArthur Center (70%)            7.59%           143,588            12,400  (2)    10/01/10         126,884           12/15/02  (3)
Regency Square                    6.75%            82,373             6,421  (2)    11/01/11          71,569           04/20/05  (8)
The Mall at Short Hills           6.70%           270,000     Interest Only  (9)    04/01/09         245,301           05/02/04 (10)
The Mall at Wellington
  Green (90%)                  Floating  (11)     124,344     Interest Only (12)    05/01/04 (13)    124,344     10 Days Notice  (7)
The Shops at Willow Bend       Floating  (14)     186,482     Interest Only (12)    07/01/03 (13)    186,482     10 Days Notice  (7)

Other Consolidated Secured Debt
-------------------------------

TRG Credit Facility            Floating  (15)      11,955     Interest Only         06/30/02          11,955        At Any Time  (7)

TRG Credit Facility            Floating  (16)     205,000     Interest Only         11/01/04  (6)    205,000      2 Days Notice  (7)
Other                            13.00%  (17)      20,000     Interest Only         11/22/09          20,000           11/22/04 (18)

Centers Owned by Unconsolidated
Joint Ventures/TRG's % Ownership
--------------------------------

Arizona Mills (37%)               7.90%           144,737            12,728  (2)    10/05/10         130,419           12/15/02  (3)
Cherry Creek (50%)                7.68%           177,000     Interest Only (19)    08/11/06         171,933           05/19/02 (20)
Dolphin Mall (50%)             Floating  (21)     164,648     Interest Only (22)    10/06/02  (6)    164,648      3 Days Notice  (7)
Fair Oaks (50%)                   6.60%           140,000     Interest Only         04/01/08         140,000     30 Days Notice  (1)
International Plaza (26%)      Floating  (23)     171,555     Interest Only         11/10/02  (6)    171,555      3 Days Notice  (7)
The Mall at Millenia (50%)     Floating  (24)      56,545     Interest Only (12)    11/01/03 (13)     56,545     10 Days Notice  (7)
Stamford Town Center (50%)     Floating  (25)      76,000     Interest Only         08/10/02 (26)     76,000           02/11/02  (7)
Westfarms (79%)                   7.85%           100,000     Interest Only         07/01/02         100,000     60 Days Notice  (1)
Westfarms (79%)                Floating  (27)      55,000     Interest Only         07/01/02          55,000      4 Days Notice  (7)
Woodland (50%)                    8.20%            66,000     Interest Only         05/15/04          66,000     30 Days Notice  (1)

 (1)  Debt may be prepaid with a yield maintenance  prepayment  penalty.  No  prepayment penalty is due if prepaid within six months
      of maturity date.
 (2)  Amortizing principal based on 30 years.
 (3)  No defeasance deposit required if paid within three months of maturity date.
 (4)  The rate is locked to March 2002 at 4.04% including credit spread.
 (5)  Began amortizing principal on 5/1/01 based on 25 years.  Payment will recalculate if loan is extended.
 (6)  The maturity date may be extended one year.
 (7)  Prepayment can be made without penalty.
 (8)  No defeasance deposit required if paid within six months of maturity date.
 (9)  Interest only until 4/1/02.  Thereafter,  principal  will  be  amortized based on 30 years.  Annual debt service will be $20.9
      million.
(10)  Debt may be prepaid with a prepayment penalty equal to greater of yield maintenance or 1% of principal  prepaid. No prepayment
      penalty is due if prepaid within three months of maturity date.  30 days notice required.
(11)  The rate is locked to October 2002 at 4.47% including  credit spread.  $70 million of the debt is capped at 7% and another $70
      million is capped at 7.25% plus credit spread of 1.85% until 10/01/2003 based on one-month LIBOR.
(12)  Interest  only unless  maturity  date is extended.  In the first year of  extension,  principal  will  be  amortized  based on
      25 years.
(13)  Maturity date may be extended for 2 one-year periods.
(14)  The rate is locked to November 2002 at 4.15% including credit spread on $182.4 million.  $147.0  million of the debt is capped
      at 7.15%, plus credit spread of 1.85%, based on one-month LIBOR.  The cap matures 6/09/03.
(15)  The facility is a $40 million line of credit and is secured by TRG's interest in Westfarms.
(16)  The facility is a $275 million line of credit and  is  secured  by  mortgages  on  Fairlane  Town Center and Twelve Oaks Mall.
      Floating  rate  is based on  one-month  LIBOR plus credit  spread of 0.90%.  The  rate is  locked  to November  2002  at 3.17%
      including  credit spread on $75.0 million.   In March 2002, the Company swapped the rate on $100 million of the line of credit
      to 4.3% for November 2002 through October 2003.
(17)  Currently payable at 9%. Deferred interest is due at maturity. The loan is secured by TRG's indirect interest in International
      Plaza.
(18)  Debt can be prepaid without penalty.  60 days notice required.
(19)  Interest only until 7/11/04.  Thereafter,  principal will be amortized based on  25  years. Annual debt  service will be $15.9
      million.
(20)  Debt may be prepaid with a yield maintenance prepayment  penalty. No prepayment penalty is due if redeemed within three months
      of maturity date.  30-60 day notice required.
(21)  The rate is locked to maturity at 4.53% including credit spread. The rate is capped at 7.0% until maturity, plus credit spread
      of 2.00%, based on one-month LIBOR. The rate is also swapped to a rate of 6.14%, plus credit spread, when LIBOR is below 6.7%.
(22)  Interest only unless maturity date is extended.  During extension  period,  principal is amortized at $190,000 per month.
(23)  The rate is locked to October 2002 at 4.40% including  credit spread on $160.4  million. $100 million of the debt is capped at
      7.10%, plus credit spread of 1.90%, until maturity based on one-month LIBOR.
(24)  The rate is locked to May 2002 at 4.06%  including  credit spread on $48.3  million.  The rate is capped at 8.75%, plus credit
      spread of 1.95%, until 12/1/02 based on one-month LIBOR.
(25)  The rate is capped at 8.20%, plus credit spread of 0.80%, until maturity based on one-month LIBOR.
(26)  Maturity date may be extended twice to no later than 8/10/04.
(27)  The rate is locked until maturity at 5.2%, including credit spread.

   For additional information regarding the Centers and their operations, see the responses to Item 1 of this report.

                                                       14

Item 3.  LEGAL PROCEEDINGS

   Neither the Company,  its subsidiaries,  nor any of the joint ventures is presently involved in any material  litigation
nor, to the Company's  knowledge,  is any material  litigation  threatened against the Company,  its subsidiaries or any of
the  properties.  Except for routine  litigation  involving  present or former  tenants  (generally  eviction or collection
proceedings), substantially all litigation is covered by liability insurance.

Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

   None

PART II

Item 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

   The common stock of Taubman  Centers,  Inc. is listed and traded on the New York Stock  Exchange  (Symbol:  TCO).  As of
March 25, 2002, the 51,017,431 outstanding shares of Common Stock were held by 739 holders of record.

   The following table presents the dividends declared and range of share prices for each quarter of 2001 and 2000.

                                                                     Market  Quotations
                                                         -----------------------------------------
                  2001 Quarter Ended                       High             Low          Dividends
                  ------------------                       ----             ---          ---------

                  March 31                                $ 12.26       $ 10.75          $ 0.25

                  June 30                                   14.00         12.02            0.25

                  September 30                              14.13         11.63            0.25

                  December 31                               15.80         12.80            0.255

                                                                     Market Quotations
                                                         -----------------------------------------
                  2000 Quarter Ended                       High             Low          Dividends
                  ------------------                       ----             ---          ---------

                  March 31                                $ 12.63       $  9.75          $ 0.245

                  June 30                                   12.19         10.25            0.245

                  September 30                              11.94         10.56            0.245

                  December 31                               11.63         10.38            0.25

                                                            15

Item 6.  SELECTED FINANCIAL DATA

   The following  table sets forth  selected  financial  data for the Company and should be read in  conjunction  with the financial
statements and notes thereto and Management's  Discussion and Analysis of Financial  Condition and Results of Operations included in
this report.

                                                                                    Year Ended December 31
                                                        ----------------------------------------------------------------------------
                                                                   2001          2000           1999           1998          1997
                                                                   ----          ----           ----           ----          ----
                                                                             (in thousands of dollars, except as noted)
STATEMENT OF OPERATIONS DATA:
   Rents, recoveries, and other shopping center revenues (1)     341,428        305,600        268,692       333,953
   Income from investment in TRG (1)                                                                                         29,349
   Income before gain on disposition of interest in center,
     extraordinary items, cumulative effect of change in
     accounting principle, and minority and preferred interests   55,664         66,487         58,445        70,403         28,662
   Gain on disposition of interest in center (2)                                 85,339
   Extraordinary items (3)                                                       (9,506)          (468)      (50,774)
   Cumulative effect of change in accounting principle (4)        (8,404)
   Minority interest (1)                                         (31,673)       (30,300)       (30,031)       (6,009)
   TRG preferred distributions                                    (9,000)        (9,000)        (2,444)
   Net income                                                      7,657        103,020         25,502        13,620         28,662
   Series A preferred dividends                                  (16,600)       (16,600)       (16,600)      (16,600)        (4,058)
   Net income (loss) allocable to common shareowners              (8,943)        86,420          8,902        (2,980)        24,604
   Income (loss) before extraordinary items and cumulative
     effect of change in accounting principle per
     common share - diluted                                        (0.09)          1.75           0.17          0.32           0.48
   Net income (loss) per common share - diluted                    (0.18)          1.64           0.16         (0.06)          0.48
   Dividends per common share declared                             1.005          0.985          0.965         0.945          0.925
   Weighted average number of common shares outstanding       50,500,058     52,463,598     53,192,364    52,223,399     50,737,333
   Number of common shares outstanding at end of period       50,734,984     50,984,397     53,281,643    52,995,904     50,759,657
   Ownership percentage of TRG at end of period (1)                   62%            62%            63%           63%            37%

BALANCE SHEET DATA (1) :
   Real estate before accumulated depreciation                 2,194,717      1,959,128      1,572,285     1,473,440
   Investment in TRG                                                                                                        547,859
   Total assets                                                2,141,439      1,907,563      1,596,911     1,480,863        556,824
   Total debt                                                  1,423,241      1,173,973        886,561       775,298

SUPPLEMENTAL INFORMATION (5) :
   Funds from Operations allocable to TCO (6)                     73,527         70,419         68,506        61,131         53,137
   Mall tenant sales (7)                                       2,797,867      2,717,195      2,695,645     2,332,726      3,086,259
   Sales per square foot (8)                                         456            466            453           426            384
   Number of shopping centers at end of period                        20             16             17            16             25
   Ending Mall GLA in thousands of square feet                     9,186          7,065          7,540         7,038         10,850
   Average occupancy                                                84.9%(9)       89.1%          89.0%         89.4%          87.6%
   Ending occupancy                                                 84.0%(9)       90.5%          90.4%         90.2%          90.3%
   Leased space (10)                                                87.7%(9)       93.8%          92.1%         92.3%          92.3%
   Average base rent per square foot (8) (11) :
     All mall tenants                                             $40.97         $39.77         $39.58
     Stores closing during year                                   $40.76         $40.06         $39.49
     Stores opening during year                                   $49.58         $46.21         $48.01

(1)  In 1998, the Company obtained a majority and controlling  interest in The Taubman Realty Group Limited Partnership (TRG  or the
     Operating  Partnership). As a result, the Company began consolidating the Operating Partnership.  For 1997, amounts reflect the
     Company's interest in the Operating Partnership under the equity method.
(2)  In  August  2000,  the  Company  completed  a  transaction  to  acquire an additional  interest  in  one  of its Unconsolidated
     Joint  Ventures;  TRG became the 100%  owner of  Twelve  Oaks  Mall and  the  joint  venture  partner  became the 100% owner of
     Lakeside.  A gain on the transaction was recognized by the Company  representing the excess of the fair value over the net book
     basis of the Company's interest in Lakeside (see MD&A - Other Transactions).
(3)  Extraordinary  items for 1998  through 2000  include  charges  related to the  extinguishment  of  debt,  primarily  consisting
     of prepayment premiums and the writeoff of deferred financing costs.
(4)  In January  2001,  the  Company  adopted  Statement  of  Financial   Accounting  Standard  No. 133  "Accounting  for Derivative
     Instruments and Hedging  Activities" and  its  amendments and   interpretations.  The Company recognized a loss as a transition
     adjustment to mark its share of interest rate agreements to fair value as of January 1, 2001.
(5)  Operating  statistics for 1997 include centers  transferred to General  Motors  pension trusts  in exchange for their interests
     in TRG.
(6)  Funds  from  Operations  is  defined  and  discussed  in MD&A -  Liquidity  and  Capital  Resources  - Funds  from  Operations.
     Funds from Operations does not represent cash flow from operations, as defined  by  generally  accepted accounting  principles,
     and  should  not  be  considered  to  be  an  alternative  to  net  income as a measure  of  operating  performance or  to cash
     flows as a measure of liquidity.
(7)  Based on reports of sales furnished by mall tenants.
(8)  2000 statistics have been restated to include MacArthur Center, which opened in March 1999.
(9)  2001 average  occupancy,  ending  occupancy,  and  leased space for centers owned and open for all of 2001 and 2000 were 88.1%,
     88.8%, and 91.8%, respectively.
(10) Leased space comprises both occupied space and space that is leased but not yet occupied.
(11) Amounts include centers owned and operated for two years.

                                                                 16

Item 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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).  Also, in August
2000, the Company completed a transaction to acquire an additional  interest in one of its  Unconsolidated  Joint Ventures;
the Operating  Partnership  became the 100% owner of Twelve Oaks Mall and the joint venture  partner  became the 100% owner
of  Lakeside.  Additional  2001 and 2000  statistics  that exclude the new centers and Lakeside are provided to present the
performance of comparable centers.

Current Operating Trends

   In 2001, 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 2001, 4.5% of the Company's tenants
sought the protection of the bankruptcy laws, compared to 2.3% in 2000. The impact of a softening economy  on the Company's
current results of operations is  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 fourth  quarter of 2001  decreased by 3.8%  compared to the same period
in 2000.  Although this was an improvement  from the 9.8% decrease in sales per square foot in the month of September,  the
fourth  quarter  decrease was  significantly  greater than the 0.3%  decrease in sales per square foot that the Company had
experienced  through August 2001. In addition,  fourth quarter  comparable center average  occupancy  declined by 1.7% from
the prior year.

                                                              17

   The tragic  events of September 11 will also have an impact on the  Company's  future  insurance  coverage.  The Company
presently  has  coverage  for  terrorist  acts in its  policies  that expire in April 2002.  The Company  expects that such
coverage will be excluded from its standard property policies at the Company's  renewal.  Based on preliminary  discussions
with its  insurance  agency,  such  coverage  will be  available  as a separate  policy with lower  limits than the present
coverage, see "Liquidity and Capital Resources-Covenants and Commitments".

   Given the state of the insurance  industry  prior to September 11, and the impact of September 11, the Company  believes
its premiums,  including the cost of a separate  terrorist  policy,  could increase by over 100% for property  coverage and
over 25% for liability  coverage.  These increases would 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.

Mall Tenant Sales and Center Revenues

   Over the long term, the level of mall tenant sales is the single most important  determinant of revenues of the shopping
centers  because mall tenants  provide  approximately  90% of these  revenues and because mall tenant sales  determine  the
amount of rent,  percentage rent, and recoverable  expenses (together,  total occupancy costs) that mall tenants can afford
to pay.  However,  levels of mall tenant  sales can be  considerably  more  volatile in the short run than total  occupancy
costs.

   The Company  believes  that the ability of tenants to pay  occupancy  costs and earn  profits  over long periods of time
increases as sales per square foot increase,  whether through inflation or real growth in customer  spending.  Because most
mall tenants have certain fixed  expenses,  the occupancy  costs that they can afford to pay and still be profitable  are a
higher percentage of sales at higher sales per square foot.

   The following table summarizes  occupancy costs,  excluding  utilities,  for mall tenants as a percentage of mall tenant
sales.

                                                                 2001             2000              1999
                                                                 ----             ----              ----

      Mall tenant sales (in thousands)                     $2,797,867       $2,717,195        $2,695,645
      Sales per square foot                                       456              466(1)            453

      Minimum rents                                              10.0%             9.7%              9.7%
      Percentage rents                                            0.2              0.3               0.2
      Expense recoveries                                          4.5              4.4               4.3
                                                                  ---              ---               ---
      Mall tenant occupancy costs                                14.7%            14.4%             14.2%
                                                                 ====             ====              ====

(1)  2000 sales per square foot has been restated to include MacArthur Center, which opened in March 1999.

   For the year ended December 31, 2001, for the first time in the Company's history as a public company,  sales per square
foot  decreased in  comparison  to the prior year,  reflecting  the current  difficult  retail  environment  as well as the
direct  impact of the events of September 11. The negative  sales trend  directly  impacts the amount of  percentage  rents
certain  tenants and anchors  pay. The effects of declines in sales  experienced  during 2001 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.

Rental Rates

   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 a period 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 will 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.  The following  table contains  certain  information  regarding
per square foot minimum rent at the shopping centers that have been owned and open for at least two years.

                                                           18

                                                              2001              2000(1)           1999
                                                              ----              ----              ----

      Average minimum rent per square foot:
         All mall tenants                                      $40.97            $39.77           $39.58
         Stores closing during year                             40.76             40.06            39.49
         Stores opening during year                             49.58             46.21            48.01

(1)  2000 rent per square foot information has been  restated  to  include  MacArthur  Center, which  opened in March 1999.

   Generally,  the rent spread  between  opening and closing  stores is 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.

Occupancy

   Historically,  annual average  occupancy has been within a narrow band. In the last ten years,  annual average occupancy
has ranged  between  84.9% and 89.4%.  Mall tenant  average  occupancy,  ending  occupancy,  and leased  space rates are as
follows:

                                                                 2001             2000              1999
                                                                 ----             ----              ----
   All Centers
   -----------
      Average occupancy                                         84.9%             89.1%            89.0%
      Ending occupancy                                          84.0              90.5             90.4
      Leased space                                              87.7              93.8             92.1

   Comparable Centers
   ------------------
      Average occupancy                                         88.1%             89.3%
      Ending occupancy                                          88.8              90.5
      Leased space                                              91.8              93.8

   The lower occupancy and leased space in 2001 reflect the opening of the four new centers at occupancy  levels lower than
the average of the existing  portfolio.  A number of unanticipated  early lease terminations  accounted for the majority of
the decline in comparable center occupancy.

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.

                                               1st            2nd             3rd            4th
                                             Quarter        Quarter         Quarter        Quarter          Total
                                              2001            2001            2001           2001           2001
                                         ---------------------------------------------------------------------------
                                                                         (in  thousands)
  Mall tenant sales                         $570,223       $605,945       $617,805      $1,003,894     $2,797,867
  Revenues                                   132,903        137,964        139,640         169,330        579,837
  Occupancy:
       Average                                87.0%          85.5%          84.0%           83.7%          84.9%
       Ending                                 85.1           85.6           83.0            84.0           84.0
       Average-comparable (1)                 88.1           87.9           87.6            88.6           88.1
       Ending-comparable (1)                  88.4           87.7           87.7            88.8           88.8
  Leased space:
       All centers                            90.8           90.0           88.0            87.7           87.7
       Comparable (1)                         92.4           91.8           91.5            91.8           91.8

(1)  Excludes centers that opened in 2001-see Results of Operations-New Center Openings.

                                                           19

    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.

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

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

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. The Operating  Partnership will be
entitled to a preferred  return on approximately  $30 million of equity  contributions as of December 2001, which were used
to fund construction costs.

   The Shops at Willow  Bend,  a wholly owned  regional  center,  opened  August 3, 2001 in Plano,  Texas.  The 1.5 million
square foot center is anchored by Neiman Marcus,  Saks Fifth Avenue,  Lord & Taylor,  Foley's,  and  Dillard's.  Saks Fifth
Avenue will open in 2004.

   International  Plaza,  a 1.25  million  square foot  regional  center,  opened  September  14,  2001 in Tampa,  Florida.
International  Plaza  is  anchored  by  Nordstrom,  Lord &  Taylor,  Dillard's,  and  Neiman  Marcus.  The  Company  has an
approximately  26%  ownership  interest in the center.  However,  because the  Company  provided  approximately  53% of the
equity  funding for the project,  the Company  will  receive a  preferential  return.  The Company  expects to be initially
allocated  approximately  33% of the net operating  income of the project,  with an additional  7%  representing  return of
capital.  The  Operating  Partnership  will be  entitled  to a  preferred  return on  approximately  $19  million of equity
contributions as of December 2001, 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
and is initially anchored by Lord & Taylor,  Burdines,  Dillard's,  and JCPenney. A fifth anchor,  Nordstrom,  is obligated
under the  reciprocal  easement  agreement to open within 24 months of the opening of the center and is presently  expected
to open in  2003.  The  center  is owned by a joint  venture  in which  the  Operating  Partnership  has a 90%  controlling
interest.

   Although  Dolphin Mall opened on schedule,  the center  encountered  significant  levels of tenant and  landlord-related
issues arising from the construction  process,  far exceeding those historically  experienced by the Company. The difficult
opening resulted in lower than expected  occupancy in 2001. In addition,  lower than anticipated  sales, in part due to the
effect of September 11 on major tourist  areas,  have caused  significant  tenant issues  resulting in early  terminations,
lower recoveries, and higher levels of uncollectible receivables.

   In addition,  general  economic  conditions have also affected the performance of Willow Bend and to a lesser extent the
other two new  centers.  Leased  space as of  December  31,  2001 at the four new  centers  was 75 to 80%,  lower  than the
Company would have previously  expected.  As a result,  the Company  presently  expects that the return on the four centers
will be  under 9% in  2002.  Over  100  additional  stores  remain  to be  leased  at  these  centers  in order to  achieve
stabilization.  Estimates  regarding returns on projects 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.

                                                           20

Other Transactions

   In October 2001, the Operating Partnership committed to a restructuring of its development  operations.  A restructuring
charge of $2.0 million was recorded  primarily  representing  the cost of certain  involuntary  terminations  of personnel.
Pursuant to the restructuring plan, 17 positions were eliminated within the development department.

   In April 2001,  the Operating  Partnership's  $10 million  investment  in Swerdlow was converted  into a loan which bore
interest at 12% and matured in December  2001.  This loan is  currently  delinquent  and is accruing  interest at 18%.  All
interest due through the December maturity date was received.  Although the Operating  Partnership expects to fully recover
the  amount due under this note  receivable,  the  Company  is  currently  in  negotiations  with  Swerdlow  regarding  the
repayment. An affiliate of Swerdlow is a partner in the Dolphin Mall joint venture.

   In August 2000,  the Company  completed a transaction  to acquire an additional  ownership in one of its  Unconsolidated
Joint  Ventures.  Under the terms of the  agreement,  the Operating  Partnership  became the 100% owner of Twelve Oaks Mall
and the joint venture  partner became the 100% owner of Lakeside,  subject to the existing  mortgage debt. The  transaction
resulted in a net payment to the joint venture partner of  approximately  $25.5 million in cash. The results of Twelve Oaks
have been  consolidated in the Company's  results  subsequent to the acquisition date (prior to that date,  Twelve Oaks was
accounted for under the equity method as an Unconsolidated  Joint Venture).  A gain of $85.3 million on the transaction was
recognized by the Company  representing  its share of the excess of the fair value over the net book basis of the Company's
interest in Lakeside, adjusted for the $25.5 million paid and transaction costs.

   During 2000,  the Operating  Partnership  recognized  its $9.5 million share of  extraordinary  charges  relating to the
Arizona  Mills and  Stamford  Town Center  refinancings,  which  consisted  of a  prepayment  premium and the  write-off of
deferred financing costs.

   In 1996,  the Operating  Partnership  entered into an agreement to lease  Memorial City Mall, a 1.4 million  square foot
shopping  center  located in  Houston,  Texas.  The lease was subject to certain  provisions  that  enabled  the  Operating
Partnership  to explore  significant  redevelopment  opportunities  and  terminate  the lease  obligation in the event such
redevelopment  opportunities  were not deemed to be  sufficient.  The Operating  Partnership  terminated  its Memorial City
lease on April 30, 2000.

   During October and November  2001, the Operating  Partnership  completed an $82.5 million  financing  secured by Regency
Square and closed on a new $275 million  line of credit.  The net  proceeds of these  financings  were used to pay off $150
million  outstanding  under  loans  previously  secured by Twelve Oaks Mall and the balance  under the  expiring  revolving
credit facility.  In May 2001, the Company closed on a $168 million construction loan for The Mall at Wellington Green.

   During  October 2000,  Arizona Mills  completed a $146 million  secured  refinancing of its existing  mortgage.  Also in
October  2000,  MacArthur  Center  completed  a  $145  million  secured  financing,  repaying  the  existing  $120  million
construction  loan.  The  remaining  net  proceeds  of  approximately  $23.9  million  were  distributed  to the  Operating
Partnership,  which  contributed  all of the equity funding for the  development of the center.  In January 2000,  Stamford
Town Center completed a $76 million secured  refinancing.  During 2000,  construction  facilities for $160 million and $220
million were obtained for The Mall at Millenia and The Shops at Willow Bend, respectively.

Investments in Technology Businesses

   During 2001, the Company committed to invest  approximately $2 million in Constellation Real Technologies LLC, a company
that forms and sponsors  real estate  related  internet,  e-commerce,  and  telecommunications  enterprises.  The Company's
investment was $0.5 million at December 31, 2001.

   In May 2000, the Company  acquired an approximately  6.8% interest in  MerchantWired,  LLC, a service company  providing
internet  and network  infrastructure  to shopping  centers and  retailers.  As of December  31,  2001,  the Company had an
investment of  approximately  $3.6 million in this venture and has guaranteed  obligations of  approximately  $3.8 million.
The principal  shareholder of  MerchantWired  has disclosed that the future  profitability of MerchantWired is dependent on
it  obtaining  outside  capital  and other  management  expertise;  there is no  assurance  as to its  success in doing so.
During  2001  and  2000,  the  Company  recognized  its  $2.4  million  (including  $0.6  million  of  real  estate-related
depreciation) and $0.5 million share of MerchantWired losses, respectively.

                                                           21

    In April 1999,  the Company  obtained a $7.4 million  preferred  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  and  experienced  significant
decreases  in operating  revenues.  Fashionmall.com  management  has  disclosed  that they have more cash than is needed to
fund current  operations and are  considering how best to use such cash,  including  making  acquisitions,  issuing special
dividends,  or finding  other  options to provide  opportunities  for  liquidity  to its  shareholders  at some time in the
future.  While the Company's  right to a preference in the event of a liquidation is not disputed,  and while there is more
than sufficient cash in fashionmall.com to fund the Company's  liquidation  preference,  the Company has been in settlement
discussions  with  fashionmall.com's  management to return the Company's  preferred  investment at a discount,  in order to
facilitate  these  potential  uses of the cash.  There is no  assurance  that the  settlement  discussions  will  achieve a
resolution  and/or  what their  ultimate  outcome  will be.  During  2001,  the Company  recorded a charge of $1.9  million
relating to its investment in fashionmall.com; the Company's investment was $5.5 million at December 31, 2001.

New Accounting Pronouncements

   Effective January 1, 2001, the Company adopted SFAS 133 and its related amendments and interpretations,  which establish
accounting  and  reporting  standards  for  derivative  instruments.   All  derivatives,   whether  designated  in  hedging
relationships  or not, are required to be recorded on the balance sheet at fair value.  If the  derivative is designated as
a cash  flow  hedge,  the  effective  portions  of  changes  in the fair  value of the  derivative  are  recorded  in other
comprehensive  income (OCI) and are recognized in the income statement when the hedged item affects  earnings.  Ineffective
portions of changes in the fair value of cash flow hedges are  recognized  in the Company's  earnings as interest  expense.
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.  For
interest rate cap instruments  designated as cash flow hedges,  changes in the time value were excluded from the assessment
of hedge  effectiveness.  The swap  agreement on the Dolphin  construction  facility does not qualify for hedge  accounting
although its use is consistent with the Company's overall risk management  objectives.  As a result, the Company recognizes
its share of losses and income related to this agreement in earnings as the value of the agreement changes.

   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 represent
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  adjustments,  the Company recognized a $3.3 million reduction of earnings during the year
ended December 31, 2001,  representing  unrealized  losses due to the decline in interest rates and the resulting  decrease
in  value  of  the  Company's  and  its  Unconsolidated  Joint  Ventures'  interest  rate  agreements.  Of  these  amounts,
approximately  $2.8 million  represents the change in value of the Dolphin swap agreement and the remainder  represents the
changes in time value of other instruments.

   As of December 31, 2001, the Company has $3.1 million of derivative  losses included in Accumulated OCI. Of this amount,
$2.8  million  relates to a realized  loss on a hedge of the  October  2001  Regency  Square  financing.  This loss will be
recognized as additional  interest  expense over the ten-year  term of the debt.  The remaining  $0.3 million of derivative
losses included in Accumulated OCI at December 31, 2001 relates to a hedge of the Dolphin Mall  construction  facility that
will be  recognized as a reduction of earnings  through its 2002  maturity  date.  The Company  expects that  approximately
$0.6 million will be  reclassified  from  Accumulated  OCI and recognized as a reduction of earnings during the next twelve
months.

   In October 2001, the Financial  Accounting  Standards Board issued Statement No. 144,  "Accounting for the Impairment or
Disposal of Long-Lived  Assets",  which  replaced  FASB  Statement No. 121,  "Accounting  for the  Impairment of Long-Lived
Assets and for Long-Lived  Assets to Be Disposed Of".  Statement 144 broadens the reporting of  discontinued  operations to
include disposals of operating  components;  each of the Company's  investments in an operating center is such a component.
The provisions of Statement 144 are effective for financial  statements  issued for fiscal years  beginning  after December
15, 2001 and generally  are to be applied  prospectively.  The  Statement is not expected to have a material  effect on the
financial  condition or results of  operations  of the Company;  however,  if the Company were to dispose of a center,  the
center's  results of  operations  would  have to be  separately  disclosed  as  discontinued  operations  in the  Company's
financial statements.

                                                           22

Comparable Center Operations

   The  performance  of the Company's  portfolio can be measured  through  comparisons of comparable  centers'  operations.
During 2001,  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
2000.  This growth was  primarily due to increases in minimum  rents,  revenue from  advertising  space  arrangements,  and
lease  cancellation  income,  partially  offset by a decrease in percentage  rent and an increase in expenses.  The Company
expects that  comparable  center  operations  will increase  annually by 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.

Other Income

   The Company has certain additional sources of income beyond its rental revenues,  recoveries from tenants,  and revenues
from  management,  leasing,  and development  services,  as summarized in the following table. The Company expects that the
shopping  center-related  revenues,  such as income from parking  garages or  sponsorship  agreements,  will grow at a rate
slightly higher than the rate of inflation.  During 2001,  gains on peripheral land sales were less than the  approximately
$6 million  average of the  preceding  three  years;  the  Company  expects  that 2002 gains on land sales will return to a
range of $6 million to $7 million.  Interest  income in 2001 and 2000 exceeded  historical  averages;  the Company  expects
that 2002  interest  income will range  between $2 million and $3 million.  Lease  cancellation  income is dependent on the
overall  economy and  performance  of particular  retailers in specific  locations and is difficult to predict;  2001 lease
cancellation income  significantly  exceeded  historical  averages.  Estimates regarding  anticipated 2002 other income 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,  counterparties,  and  potential  purchasers  of
peripheral land, and 2) timing of transactions.

                                                                      2001                         2000
                                                                      ----                         ----
                                                               (Operating Partnership's share in millions of dollars)

         Shopping center related revenues                             13.8                         13.6
         Gains on peripheral land sales                                4.6                          9.1
         Lease cancellation revenue                                   10.3                          1.6
         Interest income                                               4.9                          4.3
                                                                       ---                          ---
                                                                      33.6                         28.6
                                                                      ====                         ====

Subsequent Events

   In early 2002,  the  Operating  Partnership  entered  into a definitive  purchase and sale  agreement to acquire 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 after the
acquisition.  The other 50% partner in the  property  is an entity  owned and  controlled  by Mr. A.  Alfred  Taubman,  the
Company's largest shareholder and recently retired Chairman of the Board of Directors.

   Also in early 2002,  the Company  entered  into  agreements  to sell its  interests  in LaCumbre  Plaza and Paseo Nuevo,
subject to satisfying closing  conditions,  for $77 million.  The centers are subject to ground leases and are unencumbered
by debt. The centers were purchased in 1996 for $59 million.

   These  transactions are expected to close during the first half of 2002, and the Company expects to use the net proceeds
from the sale of the two centers to fund the  acquisition of Sunvalley and pay down  borrowings  under the Company's  lines
of credit.  Assuming  the  operations  of these two centers are included in Funds from  Operations  for the period owned in
2002, the Company  expects that these  transactions  will have a neutral 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
but not limited to 1) the occurrence and timing of the  transactions,  2) actual  operations of the centers,  3) actual use
of proceeds, 4) actual transaction costs, and 5) resolution of closing conditions.

                                                           23

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,  although  distributions were less than net
income during 2000 due to the gain on the  disposition of Lakeside  described  above.  Also,  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 62% and 63% for 2001 and 2000,  respectively.  The results
of Twelve Oaks Mall are included in the Consolidated  Businesses  subsequent to the closing of the transaction,  while both
Twelve Oaks Mall and Lakeside are included as Unconsolidated Joint Ventures for previous periods.

                                                           24

Comparison of 2001 to 2000

   The following table sets forth operating results for 2001 and 2000,  showing the results of the Consolidated  Businesses
and Unconsolidated Joint Ventures:

                                                         2001                                                   2000
                                  ----------------------------------------------------  -----------------------------------------------------
                                                                          TOTAL OF                                                TOTAL OF
                                                                        CONSOLIDATED                                            CONSOLIDATED
                                    CONSOLIDATED      UNCONSOLIDATED     BUSINESSES        CONSOLIDATED       UNCONSOLIDATED     BUSINESSES
                                     BUSINESSES       JOINT VENTURES         AND          BUSINESSES (2)      JOINT VENTURES        AND
                                                        AT 100%(1)      UNCONSOLIDATED                          AT 100%(1)      UNCONSOLIDATED
                                                                            JOINT                                                  JOINT
                                                                          VENTURES                                              VENTURES AT
                                                                           AT 100%                                                  100%
                                  ----------------------------------------------------  -----------------------------------------------------
                                                                           (in millions of dollars)

REVENUES:
  Minimum rents                            176.2            149.3              325.5           151.9             145.5             297.4
  Percentage rents                           5.5              3.2                8.7             6.4               3.8              10.1
  Expense recoveries                       104.5             73.6              178.1            91.3              75.7             166.9
  Management, leasing and
     development                            26.0                                26.0            25.0                                25.0
  Other                                     29.2             12.3               41.5            27.5               5.7              33.2
                                            ----             ----               ----           -----             -----             -----
Total revenues                             341.4            238.4              579.8           301.9             230.7             532.6

OPERATING COSTS:
  Recoverable expenses                      91.2             67.3              158.4            79.7              63.6             143.3
  Other operating                           36.4             15.1               51.5            30.0              13.4              43.4
  Restructuring loss                         2.0                                 2.0
  Charge related to technology
     investment                              1.9                                 1.9
  Management, leasing
     and development                        19.0                                19.0            19.5                                19.5
  General and administrative                20.1                                20.1            19.0                                19.0
  Interest expense                          68.2             75.0              143.1            57.3              65.5             122.8
  Depreciation and amortization(3)          68.9             39.3              108.3            56.8              29.5              86.3
                                            ----             ----               ----           -----             -----             -----
Total operating costs                      307.6            196.7              504.3           262.3             172.0             434.4
Net results of Memorial City (2)                                                                (1.6)                               (1.6)
                                            ----             ----               ----           -----             -----             -----
                                            33.8             41.8               75.6            38.0              58.6              96.6
                                                             ====               ====                              ====              ====

Equity in income before
  extraordinary items of
  Unconsolidated Joint Ventures(3) (4)      21.9                                                28.5
                                            ----                                                ----
Income before gain on
  disposition, extraordinary items,
  cumulative effect of change in
  accounting principle, and
  minority and preferred  interests         55.7                                                66.5
Gain on disposition of interest in center                                                       85.3
Extraordinary items                                                                             (9.5)
Cumulative effect of change in
  accounting principle                      (8.4)
TRG preferred distributions                 (9.0)                                               (9.0)
Minority share of consolidated joint
  ventures                                   1.1
Minority share of income of TRG            (11.7)                                              (58.5)
Distributions less than (in excess
  of) minority share of income             (20.0)                                               28.2
                                           -----                                               -----
Net income                                   7.7                                               103.0
Series A preferred dividends               (16.6)                                              (16.6)
                                           -----                                               -----
Net income (loss) allocable to
  common   shareowners                      (8.9)                                               86.4
                                           =====                                               =====

SUPPLEMENTAL INFORMATION(5):
  EBITDA - 100%                            172.8            156.0              328.8           153.1             153.7             306.8
  EBITDA - outside partners' share          (7.5)           (71.6)             (79.2)           (7.6)            (70.8)            (78.4)
                                            ----             ----               ----           -----             -----             -----
  EBITDA contribution                      165.3             84.4              249.7           145.6              82.9             228.4
  Beneficial interest expense              (63.2)           (38.7)            (101.8)          (52.2)            (34.9)            (87.1)
  Non-real estate depreciation              (2.7)                               (2.7)           (3.0)                               (3.0)
  Preferred dividends and distributions    (25.6)                              (25.6)          (25.6)                              (25.6)
                                            ----             ----               ----           -----             -----             -----
  Funds from Operations contribution        73.8             45.7              119.5            64.8              47.9             112.7
                                            ====             ====              =====           =====              ====             =====

(1)  With the exception of the Supplemental  Information,  amounts  include 100% of the  Unconsolidated  Joint Ventures. Amounts 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)  The results of operations of Memorial City are presented net in this table. The Operating  Partnership  terminated its Memorial
     City lease on April 30, 2000.
(3)  Amortization  of the  Company's  additional  basis in the  Operating Partnership included in equity in income of Unconsolidated
     Joint Ventures was $3.0 million and $3.8 million in 2001 and 2000,  respectively.  Also,  amortization  of the additional basis
     included in depreciation and amortization was $4.6 million and $4.2 million in 2001 and 2000, respectively.
(4)  Equity in income before  extraordinary  items of Unconsolidated  Joint Ventures excludes the cumulative effect of the change in
     accounting principle incurred in connection with the Company's adoption of SFAS 133.  The Company's share of the Unconsolidated
     Joint Ventures' cumulative effect was approximately $1.6 million.
(5)  EBITDA represents  earnings before interest and depreciation and amortization,  excluding gains on dispositions of  depreciated
     operating  properties.  In 2001, the $1.9 million charge  related  to a technology  investment  was  also excluded.  Funds from
     Operations is defined and discussed in Liquidity and Capital Resources.
(6)  Amounts in this table may not add due to rounding.

                                                           25

Consolidated Businesses

   Total  revenues for the year ended December 31, 2001 were $341.4  million,  a $39.5 million or 13.1% increase over 2000.
Minimum  rents  increased  $24.3 million of which $23.1 million was due to the openings of The Shops at Willow Bend and The
Mall at  Wellington  Green,  as well as the  inclusion  of Twelve Oaks Mall.  Minimum  rents also  increased  due to tenant
rollovers and new sources of rental income,  including  temporary  tenants and advertising space  arrangements,  offsetting
decreases  in rent caused by lower  occupancy.  Percentage  rents  decreased  due to  decreases  in tenant  sales.  Expense
recoveries  increased  primarily  due to  Willow  Bend,  Wellington  Green,  and  Twelve  Oaks.  Management,  leasing,  and
development  revenues increased  primarily due to leasing  commissions,  including those relating to two short-term leasing
contracts.  Other  revenue  increased  primarily  due to an increase in lease  cancellation  revenue and  interest  income,
partially offset by a decrease in gains on sales of peripheral land.

   Total operating costs were $307.6 million, a $45.3 million or 17.3% increase from 2000.  Recoverable  expenses increased
primarily due to Willow Bend,  Wellington  Green,  and Twelve Oaks. Other operating  expense  increased due to Willow Bend,
Wellington  Green,  and Twelve  Oaks,  as well as increases  in bad debt  expense,  marketing  expense,  professional  fees
relating to process  improvement  projects,  and losses relating to the investment in MerchantWired,  partially offset by a
decrease in the charge to operations for costs of  pre-development  activities.  During 2001, a $2.0 million  restructuring
loss was recognized,  which primarily represented the cost of certain involuntary terminations of personnel;  substantially
all  restructuring  costs had been paid by year-end.  The Company also  recognized  a $1.9 million  charge  relating to its
investment in  fashionmall.com,  Inc. General and  administrative  expense increased  primarily due to increases in payroll
costs.  Interest  expense  increased  primarily due to debt assumed and incurred  relating to Twelve Oaks and a decrease in
capitalized  interest  upon  opening  of  the  new  centers,  offset  by  decreases  due to  declines  in  interest  rates.
Depreciation expense increased primarily due to Willow Bend, Wellington Green, and Twelve Oaks.

Unconsolidated Joint Ventures

   Total  revenues for the year ended  December 31, 2001 were $238.4  million,  a $7.7  million or 3.3%  increase  from the
comparable  period of 2000.  Minimum rents  increased  primarily due to tenant  rollovers and new sources of rental income,
including  temporary  tenants  and  advertising  space  arrangements,  which  offset  decreases  in rent  caused  by  lower
occupancy.  Increases  in  minimum  rent due to  Dolphin  Mall and  International  Plaza  were  offset by  Twelve  Oaks and
Lakeside.  Expense  recoveries  decreased  primarily due to Twelve Oaks and Lakeside,  partially offset by Dolphin Mall and
International Plaza.  Other revenue increased primarily due to an increase in lease cancellation revenue.

   Total  operating  costs  increased by $24.7 million to $196.7 million for the year ended December 31, 2001.  Recoverable
expenses and depreciation  expense  increased  primarily due to Dolphin Mall and International  Plaza,  partially offset by
Twelve  Oaks  and  Lakeside.  Other  operating  expense  increased  primarily  due to the  openings  of  Dolphin  Mall  and
International  Plaza,  including  greater levels of bad debt expense at Dolphin Mall,  partially  offset by Twelve Oaks and
Lakeside.  Interest  expense  increased  due to a decrease  in  capitalized  interest  upon  opening  of  Dolphin  Mall and
International  Plaza and changes in the value of Dolphin  Mall's  swap  agreement,  partially  offset by  decreases  due to
Twelve Oaks and Lakeside and declines in interest rates.

   As a result of the foregoing,  income before extraordinary items and cumulative effect of change in accounting principle
of the  Unconsolidated  Joint Ventures  decreased by $16.8 million,  or 28.7%,  to $41.8 million.  The Company's  equity in
income before  extraordinary  items and cumulative  effect of change in accounting  principle of the  Unconsolidated  Joint
Ventures was $21.9 million, a 23.2% decrease from 2000.

Net Income

   As a result of the  foregoing,  the Company's  income before gain on  disposition  of interest in center,  extraordinary
items,  cumulative effect of change in accounting principle,  and minority and preferred interests decreased $10.8 million,
or 16.2%,  to $55.7  million  for the year ended  December  31,  2001.  During  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.  During 2000,
the Company  recognized an $85.3 million gain on the disposition of its interest in Lakeside,  and an extraordinary  charge
of $9.5 million related to the  extinguishment  of debt.  After  allocation of income to minority and preferred  interests,
net income (loss) allocable to common shareowners for 2001 was $(8.9) million compared to $86.4 million in 2000.

                                                           26

Comparison of 2000 to 1999

   Discussion  of  significant  transactions  and openings  occurring  in 2000  precedes  the  Comparison  of 2001 to 2000.
Significant 1999 items are described below.

   In December 1999, the Operating  Partnership acquired an additional 5% interest in Great Lakes Crossing for $1.2 million
in cash, increasing the Operating Partnership's interest in the center to 85%.

   In November 1999, the Operating  Partnership  acquired Lord Associates,  a retail leasing firm, for $2.5 million in cash
and $5 million in  partnership  units,  which are  subject to certain  contingencies.  In  addition,  $1.0  million of this
purchase price is contingent upon profits achieved on acquired leasing contracts.

   In March 1999,  MacArthur  Center, a 70% owned enclosed  super-regional  mall,  opened in Norfolk,  Virginia.  MacArthur
Center is owned by a joint venture in which the Operating  Partnership has a controlling  interest,  and  consequently  the
results of this center are consolidated in the Company's financial statements.

   In September and November  1999, the Operating  Partnership  completed  private  placements of its Series C and Series D
preferred  equity  totaling  $100  million,  with net  proceeds  used to pay down lines of credit.  In August  1999, a $177
million  refinancing of Cherry Creek was completed,  with net proceeds of $45.2 million being  distributed to the Operating
Partnership  and used to pay down  lines of  credit.  In April  1999  through  June  1999,  $520  million  of  refinancings
relating to The Mall at Short  Hills,  Biltmore  Fashion  Park,  and Great Lakes  Crossing  were  completed.  During  1999,
construction  facilities  for $194  million and $200  million  were  obtained  for  International  Plaza and Dolphin  Mall,
respectively.

                                                           27

Comparison of 2000 to 1999

   The following table sets forth operating results for 2000 and 1999,  showing the results of the Consolidated  Businesses
and Unconsolidated Joint Ventures:

                                                         2000                                                  1999
                                  ----------------------------------------------------  -----------------------------------------------------
                                                                          TOTAL OF                                                TOTAL OF
                                                                        CONSOLIDATED                                            CONSOLIDATED
                                    CONSOLIDATED      UNCONSOLIDATED     BUSINESSES        CONSOLIDATED       UNCONSOLIDATED     BUSINESSES
                                     BUSINESSES (1)   JOINT VENTURES         AND          BUSINESSES (1)      JOINT VENTURES        AND
                                                        AT 100%(2)      UNCONSOLIDATED                          AT 100%(2)      UNCONSOLIDATED
                                                                            JOINT                                                  JOINT
                                                                          VENTURES                                              VENTURES AT
                                                                           AT 100%                                                  100%
                                  ----------------------------------------------------  -----------------------------------------------------
                                                                           (in millions of dollars)

REVENUES:
  Minimum rents                            151.9             145.5              297.4         133.9              158.1                 292.1
  Percentage rents                           6.4               3.8               10.1           4.6                3.9                   8.6
  Expense recoveries                        91.3              75.7              166.9          78.9               83.6                 162.4
  Management, leasing and
     development                            25.0                                 25.0          23.9                                     23.9
  Other                                     27.5               5.7               33.2          16.3                6.4                  22.7
                                           -----            ------              -----         -----              -----                 -----
Total revenues                             301.9             230.7              532.6         257.6              252.0                 509.6

OPERATING COSTS:
  Recoverable expenses                      79.7              63.6              143.3          69.5               69.4                 138.9
  Other operating                           30.0              13.4               43.4          28.9               13.0                  41.9
  Management, leasing
     and development                        19.5                                 19.5          17.2                                     17.2
  General and administrative                19.0                                 19.0          18.1                                     18.1
  Interest expense                          57.3              65.5              122.8          51.3               64.4                 115.8
  Depreciation and amortization (3)         56.8              29.5               86.3          51.9               29.7                  81.6
                                           -----            ------              -----         -----              -----                 -----
Total operating costs                      262.3             172.0              434.4         237.0              176.5                 413.5
Net results of Memorial City (1)            (1.6)                                (1.6)         (1.4)                                    (1.4)
                                           -----            ------              -----         -----              -----                 -----
                                            38.0              58.6               96.6          19.2               75.6                  94.7
                                                              ====               ====                            =====                 =====

Equity in income before
  extraordinary items of
  Unconsolidated Joint Ventures (3)         28.5                                               39.3
                                           -----                                               ----
Income before gain on
  disposition, extraordinary items,
  and minority and  preferred interests     66.5                                               58.4
Gain on disposition of interest in center   85.3
Extraordinary items                         (9.5)                                              (0.5)
TRG preferred distributions                 (9.0)                                              (2.4)
Minority share of income                   (58.5)                                             (17.6)
Distributions less than (in excess
  of) minority share of income              28.2                                              (12.4)
                                           -----                                              -----
Net income                                 103.0                                               25.5
Series A preferred dividends               (16.6)                                             (16.6)
                                           -----                                              -----
Net income allocable to common
  shareowners                               86.4                                                8.9
                                            ====                                                ===

SUPPLEMENTAL INFORMATION (4):
  EBITDA - 100%                            153.1             153.7              306.8         123.0              169.7                 292.6
  EBITDA - outside partners' share          (7.6)            (70.8)             (78.4)         (4.4)             (75.5)                (79.9)
                                           -----            ------              -----         -----              -----                 -----
  EBITDA contribution                      145.6              82.9              228.4         118.6               94.1                 212.7
  Beneficial interest expense              (52.2)            (34.9)             (87.1)        (47.6)             (34.5)                (82.1)
  Non-real estate depreciation              (3.0)                                (3.0)         (2.7)                                    (2.7)
  Preferred dividends and distributions    (25.6)                               (25.6)        (19.0)                                   (19.0)
                                           -----            ------              -----         -----              -----                 -----
  Funds from Operations contribution        64.8              47.9              112.7          49.3               59.7                 108.9
                                           =====              ====              =====         =====               ====                 =====

(1)  The results of operations of Memorial City are presented net in this table. The Operating  Partnership  terminated its Memorial
     City lease on April 30, 2000.
(2)  With the exception of the Supplemental  Information,  amounts include 100% of the  Unconsolidated  Joint  Ventures. Amounts 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.
(3)  Amortization of the Company's  additional basis in the Operating Partnership  included in equity in income before extraordinary
     items of Unconsolidated Joint Ventures was $3.8 million and $4.7 million in 2000  and  1999,  respectively.  Also, amortization
     of  the  additional  basis  included  in  depreciation  and  amortization  was $4.2 million  and $3.8 million in 2000 and 1999,
     respectively.
(4)  EBITDA represents  earnings before interest and depreciation and amortization,  excluding gains on dispositions of  depreciated
     operating properties. Funds from Operations is defined and discussed in Liquidity and Capital Resources.
(5)  Amounts in this table may not add due to rounding.

                                                           28

Consolidated Businesses

   Total  revenues for the year ended December 31, 2000 were $301.9  million,  a $44.3 million or 17.2% increase over 1999.
Minimum  rents  increased  $18.0  million of which $4.3 million was due to the opening of MacArthur  Center.  Minimum rents
also increased due to the inclusion of Twelve Oaks Mall,  tenant  rollovers,  and new sources of rental  income,  including
temporary  tenants and  advertising  space  arrangements.  Percentage  rents increased due to increases in tenant sales and
the  inclusion  of  Twelve  Oaks.  Expense  recoveries  increased  primarily  due to  MacArthur  Center  and  Twelve  Oaks.
Management,  leasing,  and  development  revenues  increased  primarily  due to  contracts  acquired  as part  of the  Lord
Associates  transaction,  partially  offset by decreases  due to a reduction in fees in certain  managed  centers,  and the
timing and  completion  status of certain  other  contracts  and  services.  Other  revenue  increased  primarily due to an
increase in gains on sales of peripheral land and interest  income,  partially  offset by a decrease in lease  cancellation
revenue.

   Total  operating  costs were $262.3  million,  a $25.3  million or 10.7%  increase from 1999.  Recoverable  expenses and
depreciation  and  amortization  increased  primarily  due to MacArthur  Center and Twelve Oaks.  Other  operating  expense
increased due to MacArthur  Center,  Twelve Oaks,  the Lord  Associates  transaction,  and an increase in bad debt expense,
offset by a decrease  in the  charge to  operations  for costs of  pre-development  activities.  Management,  leasing,  and
development costs increased  primarily due to the Lord Associates  contracts.  Interest expense increased  primarily due to
an increase in interest  rates and  borrowings,  including  debt assumed and incurred  related to Twelve Oaks. In addition,
interest expense  increased because of a decrease in capitalized  interest upon opening  MacArthur Center.  These increases
were offset by a reduction in interest expense on debt paid down with proceeds of the preferred equity offerings.

Unconsolidated Joint Ventures

   Total  revenues for the year ended  December 31, 2000 were $230.7  million,  a $21.3  million or 8.5%  decrease from the
comparable period of 1999.  Minimum rents and expense recoveries  decreased  primarily because the Twelve Oaks and Lakeside
results were only included  through the  transaction  date.  Other revenue  decreased  primarily due to a decrease in lease
cancellation revenue, partially offset by an increase in gains on sales of peripheral land.

   Total  operating  costs  decreased by $4.5 million to $172.0 million for the year ended  December 31, 2000.  Recoverable
expenses decreased  primarily due to Twelve Oaks and Lakeside.  Interest expense increased  primarily due to the additional
debt at Cherry Creek as well as increases in interest rates, partially offset by Twelve Oaks and Lakeside.

   As a result of the foregoing,  income before extraordinary items of the Unconsolidated Joint Ventures decreased by $17.0
million,  or 22.5%,  to $58.6 million.  The Company's  equity in income before  extraordinary  items of the  Unconsolidated
Joint Ventures was $28.5 million, a 27.5% decrease from the comparable period in 1999.

Net Income

   As a result of the foregoing,  the Company's  income before gain on disposition,  extraordinary  items, and minority and
preferred  interests  increased $8.1 million,  or 13.9%, to $66.5 million for the year ended December 31, 2000. The Company
recognized $9.5 million and $0.5 million in  extraordinary  charges related to the  extinguishment  of debt during 2000 and
1999,  respectively.  During 2000,  the Company  recognized  an $85.3  million gain on the  disposition  of its interest in
Lakeside.  After allocation of income to minority and preferred  interests,  net income allocable to common shareowners for
2000 was $86.4 million compared to $8.9 million in 1999.

                                                           29

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, acquisition, and financing policies.

   As of December 31, 2001, the Company had a consolidated cash balance of $27.8 million.  Additionally,  the Company has a
secured  $275  million  line of credit.  This line had $205  million of  borrowings  as of December 31, 2001 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 $12.0 million of borrowings as of December 31, 2001 and expires in June 2002.

Summary of Investing Activities

   Net cash used in investing  activities  was $240.7 million in 2001 compared to $219.7 million in 2000 and $197.4 million
in 1999.  Cash used in  investing  activities  was  impacted  by the  timing of capital  expenditures,  with  additions  to
properties in 2001, 2000, and 1999 for the  construction of MacArthur  Center,  The Mall at Wellington  Green, The Shops at
Willow Bend, as well as other  development  activities and other capital items.  During 2001, 2000, and 1999, $4.0 million,
$3.0 million,  and $7.4 million were invested in  technology-related  ventures,  respectively.  During 1999,  $11.1 million
was invested in Swerdlow  Real Estate  Group and Lord  Associates.  During 2000,  net  acquisition  costs of $23.6  million
were  incurred in connection  with the Lakeside and Twelve Oaks  transaction.  Net proceeds  from sales of peripheral  land
were $8.6 million,  $8.2  million,  and $1.8 million in 2001,  2000,  and 1999,  respectively.  Although 2001 gains on land
sales were less than the comparable  period in 2000,  net proceeds were higher in 2001 because  certain 2000 sales involved
larger land contracts.  Contributions to  Unconsolidated  Joint Ventures were $55.9 million in 2001, $18.8 million in 2000,
and $36.8 million in 1999,  primarily  representing  funding for  construction  activities  at Dolphin Mall,  International
Plaza, and The Mall at Millenia.  Distributions  from  Unconsolidated  Joint Ventures were primarily  consistent with 2000,
while 2000 decreased from 1999 due to the transfers of Lakeside and Twelve Oaks and excess  mortgage  refinancing  proceeds
received in 1999.

Summary of Financing Activities

   Financing  activities  contributed  cash of $128.8  million in 2001,  $99.7 million in 2000,  and $91.3 million in 1999.
Debt proceeds,  net of repayments and issuance costs, provided $242.7 million,  $231.2 million, and $100.9 million in 2001,
2000,  and 1999,  respectively.  In 1999, the Operating  Partnership  received $97.3 million from the issuance of preferred
equity.  Stock  repurchases of $22.9 million were made in connection with the Company's stock  repurchase  program in 2001,
a decrease of $1.3  million  from 2000.  The Company has  repurchased  $47.1  million of its common stock since it received
authorization  from the  Company's  Board of  Directors in March 2000 for  purchases  up to $50 million.  Issuance of stock
pursuant to the  Continuing  Offer related to the exercise of employee  options  contributed  $16.9  million in 2001,  $0.1
million in 2000, and $3.1 million in 1999.  Total dividends and  distributions  paid were $107.9  million,  $107.5 million,
and $100.1 million in 2001, 2000, and 1999, respectively.

                                                           30

Beneficial Interest in Debt

   At December 31, 2001, the Operating  Partnership's debt and its beneficial  interest in the debt of its Consolidated and
Unconsolidated  Joint Ventures totaled  $1,907.9  million with an average interest rate of 5.86% 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  during  2001.  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  $121.4 million as of December 31,
2001.  Beneficial  interest in capitalized  interest was $29.5 million for 2001. The following  table presents  information
about the Company's beneficial interest in debt as of December 31, 2001.

                                                                    Beneficial Interest in Debt
                                                    --------------------------------------------------------------
                                                        Amount     Interest     LIBOR      Frequency       LIBOR
                                                     (in millions   Rate at      Cap        of Rate         at
                                                      of dollars)  12/31/01      Rate        Resets      12/31/01
                                                      -----------  --------     ------      -------      --------
Total beneficial interest in fixed rate debt          $1,025.2       7.50% (1)

Floating rate debt hedged via interest rate caps:

     Through March 2002                                  100.0       3.21  (1)   7.25%       Monthly        1.87%
     Through March 2002                                  144.5       3.95  (1)   7.25        Monthly        1.87
     Through July 2002                                    43.4       5.16        6.50        Monthly        1.87
     Through August 2002                                  38.0       2.70        8.20        Monthly        1.87
     Through September 2002                              100.0 (2)   4.30  (1)   7.00        Monthly        1.87
     Through October 2002                                 26.5       4.37        7.10        Monthly        1.87
     Through November 2002                                80.2       3.50  (1)   8.75        Monthly        1.87
     Through May 2003                                    147.0       4.15        7.15        Monthly        1.87
     Through September 2003                               63.0       4.47        7.00        Monthly        1.87
     Through September 2003                               63.0       4.19  (1)   7.25        Monthly        1.87
     Other floating rate debt                             77.1       3.21  (1)
                                                      --------

Total beneficial interest in debt                     $1,907.9       5.86 (1)(3)
                                                      ========

(1)  Denotes weighted average interest rate before amortization of financing costs.
(2)  This  construction  debt at  a  50% owned  unconsolidated  joint venture is swapped at a rate of 6.14%  when  LIBOR is
     below 6.7%.
(3)  As provided for by certain debt agreements,  the Company  has  currently  locked  in an average all in rate of 4.7% on
     approximately  $490 million of floating rate debt into the fourth quarter of 2002 and an additional  $247 million that
     expires throughout the first three quarters of 2002.

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 debt and interest  rates in effect at December 31, 2001,  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  annual cash flows by  approximately  $4.0 million  and, due to the effect of  capitalized
interest,  annual earnings by approximately  $3.7 million.  Based on the Company's  consolidated debt and interest rates in
effect at  December  31,  2001,  a one  percent  increase  in  interest  rates  would  decrease  the fair  value of debt by
approximately  $43.2  million,  while a one percent  decrease in interest  rates would  increase  the fair value of debt by
approximately $46.4 million.

   In March 2002,  the Company  entered into a one year 4.3% swap agreement  based on a notional  amount of $100 million to
begin November 1, 2002, as a hedge of the Company's $275 million line of credit.

                                                           31

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 expected  exclusions or coverage  reductions in its insurance
policies upon renewal, the Company expects to purchase supplemental  coverage for terrorist acts at significant  additional
cost.  Although,  based on  preliminary  discussions  with its  insurance  agency and certain of its  lenders,  the Company
believes it will be able to purchase  satisfactory  additional  coverage at increased,  though not  prohibitive,  costs. No
assurances  can be given that such  coverage  will be adequate or that  mortgagees  will not require  coverage  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.

   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.

   Payments of principal and interest on the loans in the following  table are  guaranteed by the Operating  Partnership as
of December 31,  2001.  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 12/31/01      as of 12/31/01    as of 12/31/01       by TRG            by TRG
------                    --------------      --------------    --------------       ------            ------
                                          (in millions of dollars)
Dolphin Mall                       164.6           82.3              82.3               50%              100%
Great Lakes Crossing               151.0          128.3             151.0              100%              100%
International Plaza                171.6           45.4             171.6              100% (1)          100% (1)
The Mall at Millenia                56.5           28.3              28.3               50%               50%
The Mall at Wellington Green       124.3          111.9             124.3              100%              100%
The Shops at Willow Bend           186.5          186.5             186.5              100%              100%

(1)  An investor  in  the  International  Plaza  venture  has  indemnified  the  Operating  Partnership  to  the  extent of
     approximately 25% of the amounts  guaranteed.  Effective February 2002, the guarantee on the International  Plaza loan
     was reduced to 50%.

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, 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 2001,  a $1.9  million  charge  related  to a  technology
investment 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.

                                                           32

Reconciliation of Income to Funds from Operations

                                                                                      2001                2000
                                                                                      ----                ----
                                                                                      (in millions of dollars)

Income before gain on disposition of interest in center,
  extraordinary items, cumulative effect of change in
  accounting principle, and minority and preferred interests (1) (2)                  55.7                66.5
Depreciation and amortization (3)                                                     68.9                57.8
Share of Unconsolidated Joint Ventures'
  depreciation and amortization (4)                                                   23.9                19.4
Charge related to technology investment                                                1.9
Non-real estate depreciation                                                          (2.7)               (3.0)
Minority partners in consolidated joint ventures share
  of funds from operations                                                            (2.5)               (2.4)
Preferred dividends and distributions                                                (25.6)              (25.6)
                                                                                     -----               -----
Funds from Operations - TRG                                                          119.5               112.7
                                                                                     =====               =====
Funds from Operations allocable to TCO                                                73.5                70.4
                                                                                     =====               =====

(1)  Includes  gains on  peripheral  land  sales of $4.6 million  and $9.1 million for  the  years ended  December 31, 2001
     and 2000, respectively.
(2)  Includes net  non-cash  straightline  adjustments  to minimum rent revenue  and  ground  rent  expense of $1.1 million
     and $(0.1) million for the years ended December 31, 2001 and 2000, respectively.
(3)  Includes  $2.7 million and $2.4 million  of  mall  tenant  allowance  amortization  for  the years ended  December 31,
     2001 and 2000, respectively.
(4)  Includes  $2.4  million  and  $2.2 million  of mall tenant  allowance  amortization  for the years ended  December 31,
     2001 and 2000, respectively.

(5)  Amounts in the tables may not add due to rounding.

Reconciliation of Funds from Operations to Income

                                                                                      2001                2000
                                                                                      ----                ----
                                                                                      (in millions of dollars)

Funds from Operations-TRG                                                            119.5               112.7

Exclusions from FFO:
   Charge related to technology investment                                            (1.9)
   Gain on disposition of interest in center                                                             116.5

Depreciation adjustments:
   Consolidated Businesses' depreciation and amortization                            (68.9)              (57.8)
   Minority partners in consolidated joint ventures share of
     depreciation and amortization                                                     3.2                 2.4
   Depreciation of TCO's additional basis                                              7.6                 8.0
   Non-real estate depreciation                                                        2.7                 3.0
   Share of Unconsolidated Joint Ventures' depreciation and
     amortization                                                                    (23.9)              (19.4)
                                                                                     -----               -----
Income before extraordinary items and cumulative effect
   of change in accounting principle - TRG                                            38.4               165.4
                                                                                      ====               =====

TCO's ownership share of income of TRG (1)                                            23.6               103.4
TCO's additional basis in TRG gain                                                                       (31.2)
Depreciation of TCO's additional basis                                                (7.6)               (8.0)
                                                                                      ----                ----
Income before distributions in excess of earnings allocable to
  minority interest - TCO                                                             16.0                64.2
Distributions less than (in excess of) earnings allocable to minority
  interest                                                                           (20.0)               28.2
                                                                                     -----                ----
Income (loss) before extraordinary items and cumulative effect
  of change in accounting principle allocable to common
  shareowners-TCO                                                                     (4.0)               92.4
                                                                                      ====                ====

(1)  TCO's average ownership of TRG was approximately 62% and 63% during 2001 and 2000, respectively.
(2)  Amounts in this table may not add due to rounding.

                                                           33

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 December 11, 2001, the Company  declared a quarterly  dividend of $0.255 per common share payable January 22, 2002 to
shareowners  of record on December 31,  2001.  The Board of Directors  also  declared a quarterly  dividend of $0.51875 per
share on the  Company's  8.3% Series A Preferred  Stock,  paid December 31, 2001 to  shareowners  of record on December 21,
2001.

   Common  dividends  declared  totaled  $1.005 per common share in 2001, of which $0.3075  represented  return of capital,
$0.6878  represented  ordinary income,  and $0.0097  represented  capital gain,  compared to dividends  declared in 2000 of
$0.985 per common  share,  of which  $0.4402  represented  return of capital and $0.4799  represented  ordinary  income and
$0.0649  represented  capital gain.  The tax status of total 2002 common  dividends  declared and to be declared,  assuming
continuation of a $0.255 per common share quarterly dividend,  is estimated to be approximately 28% return of capital,  and
approximately  72% ordinary  income.  Series A preferred  dividends  declared were $2.075 per  preferred  share in 2001 and
2000, of which $2.0549  represented  ordinary income and $0.0201  represented capital gains in 2001 and $1.9382 represented
ordinary  income and  $0.1368  represented  capital  gains in 2000.  The tax status of total 2002  dividends  to be paid on
Series A Preferred  Stock is  estimated  to be 100%  ordinary  income.  These are  forward-looking  statements  and certain
significant  factors could cause the 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 secure  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.

                                                           34

Capital Spending

   Capital spending for routine maintenance of the shopping centers is generally  recovered from tenants.  Capital spending
not recovered from tenants is summarized in the following tables:

                                                                             2001(1)
                                             ----------------------------------------------------------------------
                                                                                      Beneficial Interest in
                                                                  Unconsolidated      Consolidated Businesses
                                                Consolidated           Joint            and Unconsolidated
                                                 Businesses          Ventures           Joint Ventures (2)
                                             ----------------------------------------------------------------------
                                                              (in millions of dollars)

Development, renovation, and expansion:
   Existing centers                                  9.8               11.5                  15.4
   New centers                                     238.6(3)           295.5(4)              347.3
Pre-construction development activities,
  net of charge to operations                        6.8                                      6.8
Mall tenant allowances                              11.3                3.7                  12.7
Corporate office improvements, equipment,
  and software                                       2.4                                      2.4
Other                                                1.0                1.0                   1.5
                                                   -----              -----                 -----
Total                                              269.9              311.7                 386.1
                                                   =====              =====                 =====

(1)  Costs are net of intercompany profits and are computed on an accrual basis.
(2)  Includes the Operating  Partnership's  share  of construction  costs  for  The  Mall at Wellington  Green (a 90% owned
     consolidated  joint venture),  International  Plaza (a 26% owned  unconsolidated  joint venture),  Dolphin Mall (a 50%
     owned unconsolidated joint venture), and The Mall at Millenia (a 50% owned unconsolidated joint venture).
(3)  Includes costs related to The Mall at Wellington Green, The Shops at Willow Bend, and Stony Point Fashion Park.
(4)  Includes costs related to International Plaza, Dolphin Mall, and The Mall at Millenia.

                                                                            2000 (1)
                                             ----------------------------------------------------------------------
                                                                                      Beneficial Interest in
                                                                  Unconsolidated      Consolidated Businesses
                                                Consolidated           Joint            and Unconsolidated
                                                 Businesses          Ventures           Joint Ventures (2)
                                             ----------------------------------------------------------------------
                                                              (in millions of dollars)

Development, renovation, and expansion:
   Existing centers                                 14.3               19.5                  23.2
   New centers                                     149.2(3)           226.3(4)              241.7
Pre-construction development activities,
  net of charge to operations                        6.1                                      6.1
Mall tenant allowances                              10.2                4.3                  11.8
Corporate office improvements, equipment,
  and software                                       3.1                                      3.1
Other                                                0.2                2.2                   1.4
                                                   -----              -----                 -----
Total                                              183.1              252.3                 287.3
                                                   =====              =====                 =====

(1)  Costs are net of intercompany profits and are computed on an accrual basis.
(2)  Includes the Operating  Partnership's  share of construction  costs for The Mall  at  Wellington  Green (a  90%  owned
     consolidated  joint venture),  International  Plaza (a 26% owned  unconsolidated  joint venture),  Dolphin Mall (a 50%
     owned unconsolidated joint venture), and The Mall at Millenia (a 50% owned unconsolidated joint venture).
(3)  Includes costs related to The Mall at Wellington Green and The Shops at Willow Bend.
(4)  Includes costs related to International Plaza, Dolphin Mall, and The Mall at Millenia.

   The Operating  Partnership's share of mall tenant allowances per square foot leased during the year, excluding expansion
space and new  developments,  was $15.26 in 2001 and $16.39 in 2000.  In addition,  the  Operating  Partnership's  share of
capitalized  leasing costs in 2001,  excluding  new  developments,  was $8.7 million,  or $10.32 per square foot leased and
$7.6 million or $10.54 per square foot leased during the year in 2000.

   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.

                                                          35

   Stony Point Fashion Park, a new 690,000 square foot open-air center under  construction in Richmond,  Virginia,  will be
anchored by Dillard's and Saks. The center is scheduled to open in September 2003.

   The Company's  approximately $22 million balance of development  pre-construction costs as of December 31, 2001 consists
primarily  of costs  relating  to a  project  in  Syosset,  New  York.  Both  Neiman  Marcus  and Lord & Taylor  have  made
announcements  committing to the project.  The Company is currently  involved in a lawsuit to obtain the  necessary  zoning
approvals to move forward with the project.  Although  the Company  expects to be  successful  in this effort,  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  following  table  summarizes  planned  capital  spending,  which is not  recovered  from  tenants  and  assumes  no
acquisitions during 2002:

                                                                     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                            9.5                 4.0                    11.0
Pre-construction development and other            8.0                 0.3                     8.1
                                                -----               -----                   -----
Total                                            67.1               103.6                   118.4
                                                =====               =====                   =====

(1)  Costs are net of intercompany profits.
(2)  Includes  the   Operating   Partnership's  share  of  construction  costs  for  The  Mall  at  Millenia  (a 50%  owned
     unconsolidated joint venture).
(3)  Includes costs related to Stony Point Fashion Park.
(4)  Includes costs related to The Mall at Millenia.

   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  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, and 9) increases in operating costs.

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 December  31, 2001 of $14.85 per common  share,  the  aggregate  value of  interests  in the
Operating  Partnership that may be tendered under the Cash Tender Agreement was  approximately  $366 million.  The purchase
of these  interests  at December  31, 2001 would have  resulted in the Company  owning an  additional  30%  interest in the
Operating Partnership.

                                                          36

Item 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

   The  information  required by this Item is included  in this report at Item 7 under the caption  "Liquidity  and Capital
Resources".

Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

   The Financial  Statements of Taubman  Centers,  Inc. and the Independent  Auditors' Report thereon are filed pursuant to
this Item 8 and are included in this report at Item 14.

Item 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

   Not applicable.

                                                         PART III*

Item 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

   The information  required by this item is hereby  incorporated  by reference to the material  appearing in the Company's
definitive  proxy  statement for the annual meeting of shareholders  to be held in 2002 (the "Proxy  Statement")  under the
captions  "Management--Directors,  Nominees and Executive Officers" and "Security Ownership of Certain Beneficial Owners and
Management -- Section 16(a) Beneficial Ownership Reporting Compliance."

Item 11.  EXECUTIVE COMPENSATION

   The  information  required by this item is hereby  incorporated  by  reference  to the  material  appearing in the Proxy
Statement under the captions "Executive Compensation" and "Management -- Compensation of Directors."

Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

   The information  required by this item is hereby  incorporated by reference to the table and related footnotes appearing
in the Proxy Statement under the caption "Security Ownership of Certain Beneficial Owners and Management."

Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

   The  information  required by this item is hereby  incorporated  by  reference  to the  material  appearing in the Proxy
Statement  under  the  caption   "Management--Certain   Transactions"  and  "Executive  Compensation--  Certain  Employment
Arrangements".

______________________________________
*  The Compensation  Committee Report on Executive  Compensation,  the Audit Committee Report,  and the Shareholder  Return
Performance  Graph  appearing in the Proxy  Statement are not  incorporated by reference in this Annual Report on Form 10-K
or in any other report, registration statement, or prospectus of the Registrant.

                                                          37

PART IV

Item 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

      14(a)(1)    The following financial statements of Taubman Centers,  Inc. and the Independent Auditors' Report thereon

                  are filed with this report:

TAUBMAN CENTERS, INC.                                                                        Page
                                                                                                               ----
                  Independent Auditors' Report..................................................................F-2
                  Consolidated Balance Sheet as of December 31, 2001 and 2000 ..................................F-3
                  Consolidated Statement of Operations for the years ended
                    December 31, 2001, 2000 and 1999............................................................F-4
                  Consolidated Statement of Shareowners' Equity for the years ended
                    December 31, 2001, 2000 and 1999............................................................F-5
                  Consolidated Statement of Cash Flows for the years ended
                    December 31, 2001, 2000 and 1999............................................................F-6
                  Notes to Consolidated Financial Statements....................................................F-7

14(a)(2)    The following is a list of the financial statement schedules required by Item 14(d).

TAUBMAN CENTERS, INC.
                  Schedule II - Valuation and Qualifying Accounts..............................................F-26
                  Schedule III - Real Estate and Accumulated Depreciation......................................F-27

UNCONSOLIDATED JOINT VENTURES OF THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP (a consolidated  subsidiary
                  of Taubman Centers, Inc.)
                  Independent Auditors' Report.................................................................F-29
                  Combined Balance Sheet as of December 31, 2001 and 2000......................................F-30
                  Combined Statement of Operations for the years ended
                    December 31, 2001, 2000 and 1999...........................................................F-31
                  Combined Statement of Accumulated Deficiency in Assets for the three
                    years ended December 31, 2001, 2000 and 1999...............................................F-32
                  Combined Statement of Cash Flows for the years ended
                    December 31, 2001, 2000 and 1999...........................................................F-33
                  Notes to Combined Financial Statements.......................................................F-34

UNCONSOLIDATED JOINT VENTURES OF THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP (a consolidated  subsidiary
                  of Taubman Centers, Inc.)
                  Schedule II - Valuation and Qualifying Accounts..............................................F-41
                  Schedule III - Real Estate and Accumulated Depreciation......................................F-42

 14(a)(3)

      3(a)     --          Restated By-Laws of Taubman Centers, Inc.,  (incorporated herein by reference to
                           Exhibit 3 (b) filed with the Registrant's Quarterly Report on Form 10-Q for the quarter
                           ended September 30, 1998).

      3(b)     --          Composite copy of Restated  Articles of Incorporation of Taubman  Centers,  Inc.,  including all
                           amendments  to date  (incorporated  herein by reference to Exhibit 3 filed with the  Registrants
                           Quarterly  Report on Form 10-Q for the quarter  ended June 30, 2000 ("2000  Second  Quarter Form
                           10-Q")).

                                                          38

      4(a)     --          Indenture dated as of July 22, 1994 among Beverly Finance Corp., La Cienega
                           Associates, the Borrower, and Morgan Guaranty Trust Company of New York, as
                           Trustee (incorporated herein by reference to Exhibit 4(h) filed with the 1994
                           Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994
                           ("1994 Second Quarter Form 10-Q")).

      4(b)     --          Deed of Trust, with assignment of Rents, Security Agreement and Fixture Filing,
                           dated as of July 22, 1994, from La Cienega Associates, Grantor, to Commonwealth
                           Land Title Company, Trustee, for the benefit of Morgan Guaranty Trust Company
                           of New York, as Trustee, Beneficiary (incorporated herein by reference to Exhibit
                           4(i) filed with the 1994 Second Quarter Form 10-Q).

      4(c)     --          Loan Agreement dated as of March 29, 1999 among Taubman Auburn Hills
                           Associates Limited Partnership, as Borrower, Fleet National Bank, as a Bank, PNC
                           Bank, National Association, as a Bank, the other Banks signatory hereto, each as
                           a Bank, and PNC Bank, National Association, as Administrative Agent (incorporated
                           herein by reference to exhibit 4(a) filed with the Registrant's Quarterly Report on
                           Form 10-Q for the quarter ended June 30, 1999 ("1999 Second Quarter Form 10-
                           Q")).

      4(d)     --          Mortgage, Assignment of Leases and Rents and Security Agreement from Taubman
                           Auburn Hills Associates Limited Partnership, a Delaware limited partnership
                           ("Mortgagor") to PNC Bank, National Association, as Administrative Agent for the
                           Banks, dated as of March 29, 1999 (incorporated herein by reference to Exhibit 4(b)
                           filed with the 1999 Second Quarter Form 10-Q).

      4(e)     --          Mortgage, Security Agreement and Fixture Filing by Short Hills Associates, as
                           Mortgagor, to Metropolitan Life Insurance Company, as Mortgagee, dated April
                           15, 1999 (incorporated herein by reference to Exhibit 4(d) filed with the 1999 Second
                           Quarter Form 10-Q).

      4(f)     --          Assignment of Leases, Short Hills, Associates (Assignor) and Metropolitan Life
                           Insurance Company (Assignee) dated as of April 15, 1999 (incorporated herein by
                           reference to Exhibit 4(e) filed with the 1999 Second Quarter Form 10-Q).

      4(g)     --          Secured Revolving Credit Agreement dated as of November 1, 2001 among the
                           Taubman Realty Group Limited  Partnership, as Borrower, The Lenders Signatory
                           Hereto, each as a bank and Bank of America, N.A., as Administrative Agent.

      4(h)     --          Building Loan Agreement dated as of June 21, 2000 among Willow Bend
                           Associates Limited Partnership, as Borrower, PNC Bank, National Association, as
                           Lender, Co-Lead Agent and Lead Bookrunner, Fleet National Bank, as Lender, Co-
                           Lead Agent, Joint Bookrunner and Syndication Agent, Commerzbank AG, New
                           York Branch, as Lender, Managing Agent and Co-Documentation Agent,
                           Bayerische Hypo-Und Vereinsbank AG, New York Branch, as Lender, Managing
                           Agent and Co-Documentation Agent, and PNC Bank, National Association, as
                           Administrative Agent. (incorporated herein by reference to Exhibit 4 (a) filed with the
                           2000 Second Quarter Form 10-Q).

      4(i)     --          Building Loan Deed of Trust, Assignment of Leases and Rents and Security
                           Agreement ("this Deed") from Willow Bend Associates Limited Partnership, a
                           Delaware limited partnership ("Grantor"), to David M. Parnell ("Trustee"), for the
                           benefit of PNC Bank, National Association, as Administrative Agent for Lenders
                           (as hereinafter defined) (together with its successors in such capacity, "Beneficiary").
                           (incorporated herein by reference to Exhibit 4 (b) filed with the 2000 Second Quarter
                           Form 10-Q).

                                                          39

    *10(a)     --          The Taubman Realty Group Limited Partnership 1992 Incentive Option Plan, as
                           Amended and Restated Effective as of September 30, 1997 (incorporated herein by
                           reference to Exhibit 10(b) filed with the Registrant's Annual Report on Form 10-K
                           for the year ended December 31, 1997).

    *10(b)     --          First Amendment to The Taubman Realty Group Limited Partnership 1992 Incentive
                           Plan as Amended and Restated Effective as of September 30, 1997, effective
                           January 1, 2002.

     10(c)     --          Registration Rights Agreement among Taubman Centers, Inc., General Motors
                           Hourly-Rate Employees Pension Trust, General Motors Retirement Program for
                           Salaried Employees Trust, and State Street Bank & Trust Company, as trustee of
                           the AT&T Master Pension Trust (incorporated herein by reference to Exhibit 10(e)
                           filed with the Registrant's Annual Report on Form 10-K for the year ended December
                           31, 1992 ("1992 Form 10-K")).

     10(d)     --          Master Services Agreement between The Taubman Realty Group Limited
                           Partnership and the Manager (incorporated herein by reference to Exhibit 10(f) filed
                           with the 1992 Form 10-K).

     10(e)     --          Amended and Restated Cash Tender Agreement among Taubman Centers, Inc.,
                           a Michigan Corporation (the "Company"), The Taubman Realty Group Limited
                           Partnership, a Delaware Limited Partnership ("TRG"), and A. Alfred Taubman, A.
                           Alfred Taubman, acting 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), and TRA Partners, a
                           Michigan Partnership (incorporated herein by reference to Exhibit 10 (a) filed with
                           the 2000 Second Quarter Form 10-Q).

    *10(f)     --          Supplemental Retirement Savings Plan (incorporated herein by reference to Exhibit
                           10(i) filed with the Registrant's Annual Report on Form 10-K for the year ended
                           December 31, 1994).

    *10(g)     --          Employment agreement between The Taubman Company Limited Partnership and
                           Lisa A. Payne (incorporated herein by reference to Exhibit 10 filed with the
                           Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 1997).

    *10(h)     --          Second Amended and Restated Continuing Offer, dated as of May 16, 2000.
                           (incorporated herein by reference to Exhibit 10 (b) filed with the 2000 Second Quarter
                           Form 10-Q).

     10(i)     --          Second Amendment to the Second Amendment and Restatement of Agreement of
                           Limited Partnership of The Taubman Realty Group Limited Partnership effective as
                           of September 3, 1999 (incorporated herein by reference to Exhibit 10(a) filed with
                           the Registrant's Quarterly Report on Form 10-Q for the quarter ended
                           September 30, 1999 ("1999 Third Quarter Form 10-Q")).

     10(j)     --          Private Placement Purchase Agreement dated as of September 3, 1999 among The
                           Taubman Realty Group Limited Partnership, Taubman Centers, Inc. and Goldman
                           Sachs 1999 Exchange Place Fund, L.P. (incorporated herein by reference to Exhibit
                           10(b) filed with the Registrant's 1999 Third Quarter Form 10-Q).

     10(k)     --          Registration Rights Agreement entered into as of September 3, 1999 by and
                           between Taubman Centers, Inc. and Goldman Sachs 1999 Exchange Place Fund,
                           L.P. (incorporated herein by reference to Exhibit 10(c) filed with the Registrant's
                           1999 Third Quarter Form 10-Q).

                                                          40

     10(l)     --          Private Placement Purchase Agreement dated as of November 24, 1999 among The
                           Taubman Realty Group Limited Partnership, Taubman Centers, Inc. and GS-MSD
                           Select Sponsors, L.P. (incorporated herein by reference to Exhibit 10(l) filed with the
                           Annual Report of Form 10-K for the year ended December 31, 1999 ("1999 Form
                           10-K")).

     10(m)     --          Registration Rights Agreement entered into as of November 24, 1999 by and
                           between Taubman Centers, Inc and GS-MSD Select Sponsors, L.P. (incorporated
                           herein by reference to Exhibit 10(m) filed with the 1999 Form 10-K).

    *10(n)     --          Employment agreement between The Taubman Company Limited Partnership and
                           Courtney Lord. (incorporated herein by reference to Exhibit 10(n) filed with the 1999
                           Form 10-K).

    *10(o)     --          The Taubman Company Long-Term Compensation Plan (as amended and restated
                           effective January 1, 2000). (incorporated herein by reference to Exhibit 10 (c) filed
                           with the 2000 Second Quarter Form 10-Q).

     10(p)     --          Annex II to Second Amendment to the Second Amendment and Restatement of
                           Agreement of Limited Partnership of The Taubman Realty Group Limited
                           Partnership. (incorporated herein by reference to Exhibit 10(p) filed with the 1999
                           Form 10-K).

     10(q)     --          Amended and Restated Shareholders' Agreement dated as of October 30, 2001
                           among Taub-Co Managament, Inc., The Taubman Realty Group Limited Partnership,
                           The A. Alfred Taubman Restated Revocable Trust, as amended in its entirety by
                           instrument dated January 10, 1989 and subsequently by instrument dated June 25,
                           1997, and Taub-Co Holdings LLC.

    *10(r)     --          The Taubman Realty Group Limited Partnership and The Taubman Company LLC
                           Election and Option Deferral Agreement.

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

     21        --          Subsidiaries of Taubman Centers, Inc.

     23        --          Consent of Deloitte & Touche LLP.

     24        --          Powers of Attorney.

     99        --          Debt Maturity Schedule.
_______________________________________

*   A management contract or compensatory plan or arrangement required to be filed pursuant to Item 14(c) of Form 10-K.

14(b)    Current Reports on Form 8-K.

               None

14(c)    The list of  exhibits  filed with this  report is set forth in response to Item  14(a)(3).  The  required  exhibit
         index has been filed with the exhibits.

14(d)    The financial  statements  and the  financial  statement  schedules of the  Unconsolidated  Joint  Ventures of The
         Taubman Realty Group Limited Partnership listed at Item 14(a)(2) are filed pursuant to this Item 14(d).

                                                          41

TAUBMAN CENTERS, INC.

                                               FINANCIAL STATEMENTS
                                         AS OF DECEMBER 31, 2001 AND 2000
                                             AND FOR EACH OF THE YEARS
                                      ENDED DECEMBER 31, 2001, 2000 AND 1999

                                                          F-1

                                           INDEPENDENT AUDITORS' REPORT

Board of Directors and Shareowners
Taubman Centers, Inc.

   We have audited the  accompanying  consolidated  balance sheets of Taubman  Centers,  Inc. (the "Company") as of
December 31,  2001 and 2000, and the related consolidated  statements of operations,  shareowners' equity, and cash
flows for each of the three years in the period ended  December 31, 2001.  Our audits also  included the  financial
statement  schedules listed in the Index at Item 14. These financial  statements and financial  statement schedules
are the  responsibility of the Company's  management.  Our responsibility is to express an opinion on the financial
statements and financial statement schedules based on our audits.

   We conducted  our audits in  accordance  with  auditing  standards  generally  accepted in the United  States of
America.  Those standards require that we plan and perform the audit to obtain  reasonable  assurance about whether
the  financial  statements  are free of  material  misstatement.  An audit  includes  examining,  on a test  basis,
evidence  supporting the amounts and  disclosures  in the financial  statements.  An audit also includes  assessing
the accounting  principles  used and  significant  estimates made by management,  as well as evaluating the overall
financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

   In our opinion, such consolidated  financial statements present fairly, in all material respects,  the financial
position of Taubman  Centers,  Inc. as of December  31, 2001 and 2000,  and the results of its  operations  and its
cash flows for each of the three  years in the  period  ended  December  31,  2001 in  conformity  with  accounting
principles  generally  accepted in the United States of America.  Also, in our opinion,  such  financial  statement
schedules,  when considered in relation to the basic consolidated  financial  statements taken as a whole,  present
fairly, in all material respects, the information set forth therein.

   As discussed  in Note 2 to the  consolidated  financial  statements,  in 2001 the Company  changed its method of
accounting  for  derivative  instruments  to conform to  Statement of Financial  Accounting  Standards  No. 133, as
amended and interpreted.

DELOITTE & TOUCHE LLP

Detroit, Michigan
February 12, 2002

                                                          F-2

                                               TAUBMAN CENTERS, INC.

                                            CONSOLIDATED BALANCE SHEET
                                         (in thousands, except share data)

                                                                                          December 31
                                                                           ----------------------------------------
                                                                                   2001                2000
                                                                                   ----                ----
Assets:
  Properties (Notes 8 and 11)                                               $    2,194,717        $   1,959,128
  Accumulated depreciation and amortization                                       (337,567)            (285,406)
                                                                            -----------------    ----------------
                                                                            $    1,857,150        $   1,673,722
  Investment in Unconsolidated Joint Ventures (Note 7)                             148,801              109,018
  Cash and cash equivalents                                                         27,789               18,842
  Accounts and notes receivable, less allowance for doubtful
    accounts of  $5,345 and $3,796 in 2001 and 2000 (Note 9)                        35,734               32,155
  Accounts and notes receivable from related parties (Notes 9 and 13)               20,645               10,454
  Deferred charges and other assets (Note 10)                                       51,320               63,372
                                                                            -----------------    ----------------
                                                                            $    2,141,439        $   1,907,563
                                                                            =================    ================
Liabilities:
  Notes payable (Note 11)                                                   $    1,423,241        $   1,173,973
  Accounts payable and accrued liabilities                                         181,912              131,161
  Dividends payable                                                                 12,937               12,784
                                                                            -----------------    ----------------
                                                                            $    1,618,090        $   1,317,918
Commitments and Contingencies (Notes 8, 9, 10, 11, 12, and 16)

Preferred Equity of TRG (Note 15)                                           $       97,275        $      97,275

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

Shareowners' Equity (Note 15):
  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
    December 31, 2001 and 2000                                              $           80        $          80
  Series B Non-Participating Convertible Preferred Stock, $0.001 par
    and liquidation value, 40,000,000 shares authorized, 31,767,066
    and 31,835,066 shares issued and outstanding at December 31,
    2001 and 2000                                                                       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,
    50,734,984 and 50,984,397 issued and outstanding at
    December 31, 2001 and 2000                                                         507                  510
  Additional paid-in capital                                                       673,043              676,544
  Accumulated other comprehensive income (Note 2)                                   (3,119)
  Dividends in excess of net income                                               (244,469)            (184,796)
                                                                            -----------------    ----------------
                                                                            $      426,074        $     492,370
                                                                            -----------------    ----------------
                                                                            $    2,141,439        $   1,907,563
                                                                            =================    ================

                                        See notes to financial statements.

                                                          F-3

                                               TAUBMAN CENTERS, INC.

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

                                                                           Year Ended December 31
                                                              ------------------------------------------------
                                                                   2001              2000             1999
                                                                   ----              ----             ----

Income:
  Minimum rents                                               $    176,156     $    154,497      $    141,885
  Percentage rents                                                   5,484            6,356             4,881
  Expense recoveries                                               104,547           92,203            81,453
  Revenues from management, leasing, and
    development services                                            26,015           24,964            23,909
  Other                                                             29,226           27,580            16,564
                                                              --------------   ---------------   --------------
                                                              $    341,428     $    305,600      $    268,692
                                                              --------------   ---------------   --------------
Operating Expenses:
  Recoverable expenses                                        $     91,153     $     81,276      $     73,711
  Other operating                                                   36,386           32,687            36,685
  Restructuring (Note 4)                                             1,968
  Charge related to technology investment (Note 10)                  1,923
  Management, leasing, and development services                     19,023           19,543            17,215
  General and administrative                                        20,092           18,977            18,129
  Interest expense                                                  68,150           57,329            51,327
  Depreciation and amortization                                     68,930           57,780            52,475
                                                              --------------   ---------------   --------------
                                                              $    307,625     $    267,592      $    249,542
                                                              --------------   ---------------   --------------
Income before equity in income before extraordinary items
  of Unconsolidated Joint Ventures, gain on disposition of
  interest in center, extraordinary items, cumulative
  effect of change in accounting principle, and minority
  and preferred interests                                     $     33,803     $     38,008      $     19,150
Equity in income before extraordinary items and
  cumulative effect of change in accounting principle of
  Unconsolidated Joint Ventures (Note 7)                            21,861           28,479            39,295
                                                              --------------   ---------------   --------------
Income before gain on disposition of interest in center,
  extraordinary items, cumulative effect of change in
  accounting principle, and minority and preferred interests  $     55,664     $     66,487      $     58,445
Gain on disposition of interest in center (Note 3)                                   85,339
                                                              --------------   ---------------   --------------
Income before extraordinary items, cumulative effect of
  change in accounting principle, and minority and
  preferred interests                                         $     55,664     $    151,826      $     58,445
Extraordinary items (Notes 7 and 11)                                                 (9,506)             (468)
Cumulative effect of change in accounting principle (Note 2)        (8,404)
                                                              --------------   ---------------   --------------
Income before minority and preferred interests                $     47,260     $    142,320      $     57,977
Minority interest in consolidated joint ventures                     1,070
Minority interest in TRG:
  TRG income allocable to minority partners                        (11,677)         (58,488)          (17,600)
  Distributions less than (in excess of) earnings
    allocable to minority partners                                 (19,996)          28,188           (12,431)
TRG Series C and D preferred distributions (Note 15)                (9,000)          (9,000)           (2,444)
                                                              --------------   ---------------   --------------
Net income                                                    $      7,657     $    103,020      $     25,502
Series A preferred dividends (Note 15)                             (16,600)         (16,600)          (16,600)
                                                              --------------   ---------------   --------------
Net income (loss) allocable to common shareowners             $     (8,943)    $     86,420      $      8,902
                                                              ==============   ===============   ==============

Basic earnings per common share (Note 17):
  Income (loss) before extraordinary items and cumulative
    effect of change in accounting principle                  $       (.08)    $       1.76      $        .17
                                                              ==============   ===============   ==============
  Net income (loss)                                           $       (.18)    $       1.65      $        .17
                                                              ==============   ===============   ==============
Diluted earnings per common share (Note 17):
  Income (loss) before extraordinary items and cumulative
    effect of change in accounting principle                  $       (.09)    $       1.75      $        .17
                                                              ==============   ===============   ==============
  Net income (loss)                                           $       (.18)    $       1.64      $        .16
                                                              ==============   ===============   ==============

Cash dividends declared per common share                      $      1.005     $       .985      $       .965
                                                              ==============   ===============   ==============

Weighted average number of common shares outstanding             50,500,058       52,463,598        53,192,364
                                                              ==============   ===============   ==============

                                        See notes to financial statements.

                                                          F-4

                                               TAUBMAN CENTERS, INC.

                                   CONSOLIDATED STATEMENT OF SHAREOWNERS' EQUITY
                                   YEARS ENDED DECEMBER 31, 2001, 2000, AND 1999
                                         (in thousands, except share data)

                                     Preferred Stock            Common Stock                          Accumulated Other   Dividends in
                                     ---------------            ------------          Additional       Comprehensive        Excess of
                                  Shares      Amount         Shares       Amount    Paid-in Capital       Income            Net Income            Total
                                  ------      ------         ------       ------    ---------------  -----------------      ----------            -----

Balance, January 1, 1999         39,399,913   $   108     52,995,904      $   530      $   697,965                         $   (177,426)     $   521,177

Issuance of stock pursuant to
  acquisition (Note 10)             435,153         4                                                                                                  4
Issuance of stock pursuant to
  Continuing Offer (Note 16)                                 285,739            3            3,080                                                 3,083
Cash dividends declared                                                                                                         (67,975)         (67,975)
Net income                                                                                                                       25,502           25,502
                               ------------   -------   ------------      -------      -----------      ------------       ------------      -----------
Balance, December 31, 1999       39,835,066   $   112     53,281,643      $   533      $   701,045                         $   (219,899)     $   481,791

Issuance of stock pursuant to
  Continuing Offer  (Note 16)                                 12,854                           127                                                   127
Release of units in connection
  with Lord Associates
  acquisition (Note 10)                                                                      1,130                                                 1,130
Purchases of stock (Note 15)                              (2,310,100)         (23)         (25,758)                                              (25,781)
Cash dividends declared                                                                                                         (67,917)         (67,917)
Net income                                                                                                                      103,020          103,020
                               ------------   -------   ------------      -------      -----------      ------------       ------------      -----------
Balance, December 31, 2000       39,835,066   $   112     50,984,397      $   510      $   676,544                         $   (184,796)     $   492,370

Issuance of stock pursuant to
  Continuing Offer
  (Notes 10 and 16)                 (68,000)               1,579,287           16           16,880                                                16,896
Release of units in connection
  with Lord Associates
  acquisition (Note 10)                                                                        878                                                   878
Purchases of stock (Note 15)                              (1,828,700)         (19)         (21,259)                                              (21,278)
Cash dividends declared                                                                                                         (67,330)         (67,330)

Net income                                                                                                                        7,657      $     7,657
Other comprehensive income:
   Cumulative effect of change in
     accounting principle (Note 2)                                                                      $       (779)                               (779)
   Realized loss on interest rate
     instruments                                                                                              (2,805)                             (2,805)
   Reclassification adjustment for
     amounts recognized in net
     income                                                                                                      465                                 465
                                                                                                                                             -----------
Total comprehensive income                                                                                                                   $     4,538
                               ------------   -------    -----------      -------      -----------      ------------       ------------      -----------
Balance, December 31, 2001       39,767,066   $   112     50,734,984      $   507      $   673,043      $     (3,119)      $   (244,469)     $   426,074
                              =============   =======    ===========      =======      ===========      ============       ============      ===========

                                                                        See notes to financial statements.

                                                                                         F-5

                                                   TAUBMAN CENTERS, INC.

                                       CONSOLIDATED STATEMENT OF CASH FLOWS
                                                  (in thousands)

                                                                               Year Ended December 31
                                                             -----------------------------------------------------
                                                                   2001                2000              1999
                                                                   ----                ----              ----

Cash Flows From Operating Activities:
  Income before extraordinary items, cumulative effect
    of change in accounting principle, and minority and
    preferred interests                                       $     55,664      $    151,826     $      58,445
  Adjustments to reconcile income before extraordinary
    items, cumulative effect of change in accounting
    principle, and minority and preferred interests to
    net cash provided by operating activities:
      Depreciation and amortization                                 68,930            57,780            52,475
      Provision for losses on accounts receivable                    3,427             3,558             2,238
      Gains on sales of land                                        (4,579)           (9,444)           (1,667)
      Gain on disposition of interest in center                                      (85,339)
      Other                                                          5,176             3,587             4,811
      Increase (decrease) in cash attributable to changes
        in assets and liabilities:
          Receivables, deferred charges and other assets           (12,638)          (10,790)          (17,183)
          Accounts payable and other liabilities                     4,847             7,115             8,440
                                                              --------------    --------------   ----------------
Net Cash Provided by Operating Activities                     $    120,827      $    118,293     $     107,559
                                                              --------------    --------------   ----------------

Cash Flows From Investing Activities:
  Additions to properties                                     $   (207,676)     $   (187,454)    $    (208,142)
  Proceeds from sales of land                                        8,608             8,239             1,834
  Acquisition of additional interest in center (Note 3)                              (23,644)
  Purchase of equity securities (Note 10)                           (4,040)           (3,000)          (18,462)
  Contributions to Unconsolidated Joint Ventures                   (55,940)          (18,830)          (36,799)
  Distributions from Unconsolidated Joint Ventures in
    excess of income before extraordinary items                     18,323             5,006            64,215
                                                              --------------    --------------   ----------------
Net Cash Used In Investing Activities                         $   (240,725)     $   (219,683)    $    (197,354)
                                                              --------------    --------------   ----------------

Cash Flows From Financing Activities:
  Debt proceeds                                               $    421,281      $    358,153     $     625,797
  Debt payments                                                   (172,013)         (120,756)         (514,534)
  Debt issuance costs                                               (6,570)           (6,202)          (10,335)
  Repurchase of common stock (Note 15)                             (22,899)          (24,160)
  Issuance of common stock pursuant to Continuing
    Offer (Note 16)                                                 16,896               127             3,087
  Issuance of TRG Preferred Equity (Note 15)                                                            97,275
  Distributions to minority and preferred interests                (40,673)          (39,300)          (32,474)
  Cash dividends to common shareowners                             (50,577)          (51,587)          (51,040)
  Cash dividends to Series A preferred shareowners                 (16,600)          (16,600)          (16,600)
  Other                                                                                                 (9,869)
                                                              --------------    --------------   ----------------
Net Cash Provided By Financing Activities                     $    128,845      $     99,675     $      91,307
                                                              --------------    --------------   ----------------

Net Increase (Decrease) In Cash and Cash Equivalents          $      8,947      $     (1,715)    $       1,512

Cash and Cash Equivalents at Beginning of Year                      18,842            20,557            19,045
                                                              --------------    --------------   ----------------

Cash and Cash Equivalents at End of Year                      $     27,789      $     18,842     $      20,557
                                                              ==============    ==============   ================

                                        See notes to financial statements.

                                                          F-6

                                               TAUBMAN CENTERS, INC.

                                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                        Three Years Ended December 31, 2001

Note 1 - Summary of Significant Accounting Policies

Organization and Basis of Presentation

   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 December 31, 2001  included 20 urban and suburban  shopping  centers in nine states.
Two additional centers are under construction in Florida and Virginia.

   The  consolidated  financial  statements  of the Company  include all  accounts of the  Company,  the  Operating
Partnership,  and its consolidated subsidiaries;  all intercompany balances have been eliminated.  Shopping centers
owned  through  joint  ventures  with third  parties  not  unilaterally  controlled  by  ownership  or  contractual
obligation (Unconsolidated Joint Ventures) are accounted for under the equity method.

   The Company owns 99% of the voting stock of Taub-Co  (which holds an  approximately  98% interest in The Taubman
Company LLC (the  Manager)) and an  approximately  2% direct  interest in the Manager.  Prior to October 2001,  the
Company's  interest in Taub-Co was  non-voting.  Through these ownership  interests,  the Company has the perpetual
rights to receive over 99% of the economic  benefits and cash flows  generated  by the  Manager's  operations.  The
remaining  interest in the Manager is indirectly  owned by individuals who are members of the Board of Directors or
major  stockholders of the Company,  and who have contributed  nominal amounts of equity for their interests in the
Manager.  These  individuals'  interests are aligned with the interests of the  Company's  management.  The Manager
cannot  perform any services to entities in which the Company is not a  significant  investor  without the approval
of the Company.  The Company or its affiliates  have provided all of the operating  capital to the Manager.  All of
these  factors  resulted in the Company  having a controlling  financial  interest in Taub-Co and the Manager under
both the  current  and  prior  ownership  structures  and,  therefore,  the  operations  of the  Manager  have been
consolidated in the Company's financial statements.

   References  in  the  following  notes  to  "the  Company"  include  the  Operating  Partnership,   except  where
intercompany transactions are discussed or as otherwise noted.

   Dollar  amounts  presented in tables  within the notes to the  financial  statements  are stated in thousands of
dollars, except share data or as otherwise noted.

Revenue Recognition

   Shopping center space is generally leased to specialty  retail tenants under short and intermediate  term leases
which  are  accounted  for  as  operating  leases.  Minimum  rents  are  recognized  on the  straight-line  method.
Percentage rent is accrued when lessees' specified sales targets have been met. Expense  recoveries,  which include
an  administrative  fee,  are  recognized  as revenue in the period  applicable  costs are  chargeable  to tenants.
Management,  leasing,  and  development  revenue  is  recognized  as  services  are  rendered,  when  fees  due are
determinable,  and collectibility is reasonably assured.  Fees for management,  leasing,  and development  services
are established under contracts and are generally based on negotiated rates,  percentages of cash receipts,  and/or
actual compensation costs incurred.

Depreciation and Amortization

   Buildings,  improvements and equipment are depreciated on straight-line or  double-declining  balance bases over
the estimated useful lives of the assets,  which range from 3 to 50 years.  Tenant  allowances and deferred leasing
costs are amortized on a straight-line basis over the lives of the related leases.

                                                          F-7

                                                TAUBMAN CENTERS, INC.

                             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Capitalization

   Costs related to the  acquisition,  development,  construction,  and improvement of properties are  capitalized.
Interest costs are  capitalized  until  construction is  substantially  complete.  All properties,  including those
under  construction or development  and/or owned by Unconsolidated  Joint Ventures,  are reviewed for impairment on
an individual  basis  whenever  events or changes in  circumstances  indicate that their  carrying value may not be
recoverable.  Impairment  is  recognized  when the sum of expected cash flows  (undiscounted  and without  interest
charges) is less than the  carrying  value of the  property.  To the extent  impairment  has  occurred,  the excess
carrying value of the property over its estimated fair value is charged to income.

Cash and Cash Equivalents

   Cash  equivalents  consist  of  highly  liquid  investments  with a  maturity  of 90 days or less at the date of
purchase.

Investments in Equity Securities

   The  Operating  Partnership  holds  nonmarketable   investments  in  equity  securities  in  certain  technology
businesses  (Note 10). These  investments  are reviewed for  other-than-temporary  declines in value when events or
circumstances indicate that their carrying amounts are not recoverable.

Deferred Charges

   Direct  financing  costs are deferred and amortized  over the terms of the related  agreements as a component of
interest  expense.  Direct costs related to leasing  activities are  capitalized  and amortized on a  straight-line
basis over the lives of the related  leases.  All other  deferred  charges are amortized on a  straight-line  basis
over the terms of the agreements to which they relate.

Stock-Based Compensation Plans

   Stock-based  compensation  plans are  accounted  for under  APB  Opinion  25,  "Accounting  for Stock  Issued to
Employees" and related interpretations, as permitted under FAS 123, "Accounting for Stock-Based Compensation".

Interest Rate Hedging Agreements

   Effective  January 1, 2001, the Company  adopted SFAS 133  "Accounting  for Derivative  Instruments  and Hedging
Activities" and its related  amendments and  interpretations,  which establish  accounting and reporting  standards
for derivative  instruments  (Note 2). All  derivatives,  whether  designated in hedging  relationships or not, are
recorded on the balance sheet at fair value.  If a derivative  is  designated  as a cash flow hedge,  the effective
portions of changes in the fair value of the  derivative are recorded in other  comprehensive  income (OCI) and are
recognized in the income statement when the hedged item affects  earnings.  Ineffective  portions of changes in the
fair value of a cash flow hedge are  recognized in the Company's  earnings as interest  expense.  For interest rate
cap  instruments  designated  as cash flow hedges,  changes in the time value are excluded  from the  assessment of
hedge effectiveness.

   The Company formally  documents all relationships  between hedging  instruments and hedged items, as well as its
risk management  objectives and strategies for undertaking various hedge transactions.  The Company assesses,  both
at the  inception  of the  hedge  and on an  ongoing  basis,  whether  the  derivatives  that are  used in  hedging
transactions are highly effective in offsetting changes in the cash flows of the hedged items.

Partners' Equity of TRG Allocable to Minority Partners

   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 December 31, 2001 and December 31, 2000.
Also, the income  allocated to the  noncontrolling  unitholders in the Company's  financial  statements is equal to
their share of  distributions.  The net equity of the Operating  Partnership  unitholders 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.  Distributions  were less than net income  during 2000 due to a non-cash gain on the  disposition  of
an interest in a center (Note 3).

                                                          F-8

                                               TAUBMAN CENTERS, INC.

                             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Use of Estimates

   The  preparation of financial  statements in conformity  with accounting  principles  generally  accepted in the
United States of America  requires  management to make estimates and assumptions  that affect the reported  amounts
of  assets,  liabilities,  and  disclosure  of  contingent  assets  and  liabilities  at the date of the  financial
statements,  and the reported  amounts of revenues and expenses during the reporting  period.  Actual results could
differ from those estimates.

Fair Value of Financial Instruments

   The following methods and assumptions were used to estimate the fair value of financial instruments:

      The  carrying  value of cash and cash  equivalents,  accounts  and notes  receivable,  and  accounts  payable
      approximates fair value due to the short maturity of these instruments.

      The fair value of mortgage notes and other notes payable is estimated based on quoted market prices
      if available,  or the amount the Company would pay to terminate the debt, with prepayment penalties,  if any,
      on the reporting date.

      The fair value of interest  rate hedging  instruments  is the amount that the Company would receive or pay to
      terminate the agreement at the reporting date.

Operating Segment

   The Company has one reportable  operating  segment;  it owns,  develops and manages regional  shopping  centers.
The shopping  centers are located in major  metropolitan  areas,  have similar  tenants (most of which are national
chains),  and share  common  economic  characteristics.  No single  retail  company  represents  10% or more of the
Company's revenues.

Reclassifications

   Certain prior year amounts have been reclassified to conform to 2001 classifications.

Note 2 - Change in Accounting Principle

   The Company uses  derivative  instruments  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  accumulated  OCI of $0.8
million.  These amounts  represent 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  adjustments,  the Company  recognized a $3.3 million reduction of earnings during
the year ended December 31, 2001,  representing  unrealized  losses  primarily due to the decline in interest rates
and the  resulting  decrease  in value of the  Company's  and its  Unconsolidated  Joint  Ventures'  interest  rate
agreements.  Of this  amount,  approximately  $2.8  million  represents  the  change in value of the  Dolphin  swap
agreement and the remainder represents the changes in time value of cap instruments.

   As of December 31, 2001,  the Company has $3.1 million of  derivative  losses  included in  Accumulated  OCI. Of
this amount,  $2.8 million  relates to a realized  loss on a hedge of the October  2001 Regency  Square  financing.
This loss will be  recognized  as additional  interest  expense over the ten-year  term of the debt.  The remaining
$0.3  million of  derivative  losses  included in  Accumulated  OCI at December  31, 2001 relates to a hedge of the
Dolphin Mall  construction  facility that will be  recognized as a reduction of earnings  through its 2002 maturity
date.  The  Company  expects  that  approximately  $0.6  million  will be  reclassified  from  Accumulated  OCI and
recognized as a reduction of earnings during the next twelve months.

                                                          F-9

                                                TAUBMAN CENTERS, INC.

                             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

   The swap agreement on the Dolphin  construction  facility does not qualify for hedge accounting although its use
is consistent  with the Company's  overall risk  management  objectives.  As a result,  the Company  recognizes its
share of losses and income related to this agreement in earnings as the value of the agreement changes.

Note 3 - Twelve Oaks and Lakeside Transaction

   In August  2000,  the  Company  completed  a  transaction  to  acquire  an  additional  ownership  in one of its
Unconsolidated  Joint  Ventures.  Under  the terms of the  agreement,  the  Operating  Partnership  became  the 100
percent  owner of Twelve  Oaks Mall,  and its joint  venture  partner  became the 100  percent  owner of  Lakeside,
subject to the existing  mortgage debt. The  transaction  resulted in a net payment to the joint venture partner of
approximately  $25.5 million in cash. The  acquisition of the additional  interest in Twelve Oaks was accounted for
as a purchase.  A gain of $85.3 million on the transaction was recognized by the Company,  representing  the excess
of the fair value over the net book basis of the  Company's  interest in Lakeside,  adjusted for the $25.5  million
paid and  transaction  costs.  The  Company's  gain on the  transaction  differed  from  the  $116.5  million  gain
recognized by the Operating Partnership due to  the Company's $31.2 million additional basis in Lakeside.

Note 4 - Restructuring

   In October 2001,  the Operating  Partnership  committed to a  restructuring  of its  development  operations.  A
restructuring  charge of  approximately  $2.0  million  was  recorded  during the year  ended  December  31,  2001,
primarily  representing the cost of certain  involuntary  terminations of personnel.  Pursuant to the restructuring
plan, 17 positions were  eliminated  within the  development  department.  Substantially  all of the  restructuring
costs were paid during 2001.

Note 5 - Income Taxes

   The  Company  operates in such a manner as to qualify as a REIT under the  provisions  of the  Internal  Revenue
Code;  therefore,  applicable  taxable income is included in the taxable income of its  shareowners,  to the extent
distributed  by the Company.  To qualify as a REIT,  the Company must  distribute  at least 90% of its REIT taxable
income to its  shareowners  and meet certain other  requirements.  Additionally,  no provision for income taxes for
consolidated partnerships has been made, as such taxes are the responsibility of the individual partners.

   In connection  with the Tax Relief  Extension Act of 1999,  the Company made Taxable REIT  Subsidiary  elections
for all of its  corporate  subsidiaries.  The  elections,  effective  for  January 1, 2001,  were made  pursuant to
section  856(I) of the Internal  Revenue Code.  The Company's  Taxable REIT  Subsidiaries  are subject to corporate
level income taxes which are provided for in the Company's financial statements.

   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 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 year ended December 31, 2001,  utilization of a deferred tax
asset reduced the Company's  federal  income tax expense from its taxable REIT  subsidiaries  to $0.1 million.  For
the year ended December 31, 2001,  state income tax expense from the Company's  taxable REIT  subsidiaries was $0.5
million.  As of December 31, 2001,  the Company had a net  deferred  tax asset of $4.4  million,  after a valuation
allowance of $7.1 million.

                                                          F-10

                                               TAUBMAN CENTERS, INC.

                             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

   Dividends  declared on the  Company's  common and  preferred  stocks and their tax status are  presented  in the
following  tables.  The tax status of the  Company's  dividends in 2001,  2000,  and 1999 may not be  indicative of
future periods.

                           Dividends
                          per common           Return of      Ordinary        Capital
                        share declared          capital        income           gains
                     ---------------------     ---------     -----------     ---------

         2001               $1.005              $0.3075        $0.6878         $0.0097
         2000                0.985               0.4402         0.4799          0.0649
         1999                0.965               0.4534         0.5116          -----

                         Dividends per
                      Series A preferred       Ordinary        Capital
                        share declared          income          gains
                     ---------------------   -----------      ---------

         2001               $2.075              $2.0549        $0.0201
         2000                2.075               1.9382         0.1368
         1999                2.075               2.0750          -----

Note 6 - Investment in the Operating Partnership

   The partnership equity of the Operating Partnership and the Company's ownership therein are shown below:

             TRG Units              TRG Units         TCO's % Interest       TCO's
          outstanding at         Owned by TCO at         in TRG at           Average
            December 31             December 31         December 31      Interest in TRG
         ----------------        --------------         -----------      ----------------

   2001       82,502,050             50,734,984              62%                62%
   2000       82,819,463             50,984,397              62%                63%
   1999       85,116,709             53,281,643              63%                63%

   Net  income  and  distributions  of the  Operating  Partnership  are  allocable  first to the  preferred  equity
interests  (Note 15),  and the  remaining  amounts to the  general and limited  Operating  Partnership  partners in
accordance  with  their  percentage  ownership.  The  number of TRG units  outstanding  and the number of TRG units
owned by the Company  decreased in 2001 and 2000 due to  redemptions  made in connection  with the Company's  share
repurchase  program  (Note  15),  partially  offset by units  issued  under the  incentive  option  plan (Note 14).
Included  in the total  units  outstanding  at December  31,  2001 and 2000 are  261,088  units and 348,118  units,
respectively,  issued in connection with the 1999  acquisition of Lord  Associates that do not receive  allocations
of income or distributions.

                                                          F-11

                                               TAUBMAN CENTERS, INC.

                             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 7 - 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                        December 31, 2001
        ------------------------------              ----------------                      -------------------

        Arizona Mills, L.L.C. *                     Arizona Mills                                37%
        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
        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 1.25 million  square foot center opened in Tampa,  Florida.  As of
December 31, 2001, the Operating  Partnership has a preferred  investment in International  Plaza of $19.1 million,
on which an annual preferential return of 8.25% will accrue.

   In March 2001,  Dolphin  Mall,  a 1.3 million  square  foot  regional  center  opened in Miami,  Florida.  As of
December 31, 2001, the Operating  Partnership has a preferred  investment in Dolphin Mall of $29.6 million on which
an annual preferential return of 16.0% will accrue.

   In addition to the preferred  return on its investments in  International  Plaza and Dolphin Mall, the Operating
Partnership  will receive a return of its  preferred  investments  before any  available  cash will be utilized for
distributions to non-preferred partners.

   In April 2000, the Company entered into an agreement to develop The Mall at Millenia in Orlando,  Florida.  This
1.2 million square foot center is expected to open in October  2002.

   During  2001,  the  Unconsolidated  Joint  Ventures  recognized a  cumulative  effect of a change in  accounting
principle  in  connection  with  their  adoption  of SFAS 133 (Note  2).  This  cumulative  effect  represents  the
transition  adjustment  necessary to mark  interest  rate  agreements  to fair value as of January 1, 2001.  During
2000 and 1999, the Unconsolidated  Joint Ventures incurred  extraordinary  charges related to the extinguishment of
debt, primarily consisting of prepayment premiums and the writeoff of deferred financing costs.

   The Company's  carrying value of its Investment in  Unconsolidated  Joint Ventures differs from its share of the
partnership  equity  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.

   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.  Beneficial  interest is  calculated  based on the  Operating  Partnership's  ownership
interest in each of the  Unconsolidated  Joint  Ventures.  The accounts of Lakeside and Twelve Oaks Mall,  formerly
50% Unconsolidated Joint Ventures, are included in these results through the date of the transaction (Note 3).

                                                          F-12

                                           TAUBMAN CENTERS, INC.

                             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

                                                                             December 31          December 31
                                                                             -----------          -----------
                                                                                 2001                 2000
                                                                                 ----                 ----

Assets:
  Properties                                                                 $   1,367,082        $   1,073,818
  Accumulated depreciation and amortization                                       (220,201)            (189,644)
                                                                             -------------        -------------
                                                                             $   1,146,881        $     884,174
  Other assets                                                                      80,256               60,807
                                                                             -------------        -------------
                                                                             $   1,227,137        $     944,981
                                                                             =============        =============

Liabilities and partnership equity:
  Notes payable                                                              $   1,154,141        $     950,847
  Other liabilities                                                                109,247               49,069
  TRG's partnership equity (accumulated
    deficiency in assets)                                                              903              (36,570)
  Unconsolidated Joint Venture Partners'
    accumulated deficiency in assets                                               (37,154)             (18,365)
                                                                             -------------        -------------
                                                                             $   1,227,137        $     944,981
                                                                             =============        =============

TRG's partnership equity (accumulated deficiency
    in assets) (above)                                                       $         903        $     (36,570)
TRG basis adjustments, including
    elimination of intercompany profit                                              22,612               17,266
TCO's additional basis                                                             125,286              128,322
                                                                             -------------        -------------
Investment in Unconsolidated Joint Ventures                                  $     148,801        $     109,018
                                                                             =============        =============

                                                                          Year Ended December 31
                                                       -------------------------------------------------------
                                                               2001                 2000                 1999
                                                               ----                 ----                 ----

Revenues                                               $      238,409        $     230,679        $     252,009
                                                       --------------        -------------        -------------
Recoverable and other operating expenses               $       87,446        $      81,530        $      87,755
Interest expense                                               74,895               65,266               64,152
Depreciation and amortization                                  39,695               30,263               29,983
                                                       --------------        -------------        -------------
Total operating costs                                  $      202,036        $     177,059        $     181,890
                                                       --------------        -------------        -------------
Income before extraordinary items and
  cumulative effect of change in accounting
  principle                                            $       36,373        $      53,620        $      70,119
Extraordinary items                                                                (19,169)                (333)
Cumulative effect of change in accounting
  principle                                                    (3,304)
                                                       --------------        -------------        -------------
Net income                                             $       33,069        $      34,451        $      69,786
                                                       ==============        =============        =============

Net income allocable to TRG                            $       17,533        $      18,099        $      38,346
Cumulative effect of change in accounting
  principle allocable to TRG                                    1,612
Extraordinary items allocable to TRG                                                 9,506                  167
Realized intercompany profit                                    5,752                4,680                5,434
Depreciation of TCO's additional basis                         (3,036)              (3,806)              (4,652)
                                                       --------------        -------------        -------------
Equity in income before extraordinary items
  and cumulative effect of change in accounting
  principle of Unconsolidated Joint Ventures           $       21,861        $      28,479        $      39,295
                                                       ==============        =============        =============

Beneficial interest in Unconsolidated
  Joint Ventures' operations:
    Revenues less recoverable and other
      operating expenses                               $       84,402        $      82,858        $      94,136
    Interest expense                                          (38,683)             (34,933)             (34,470)
    Depreciation and amortization                             (23,858)             (19,446)             (20,371)
                                                       --------------        --------------       -------------
    Income before extraordinary items and
       cumulative effect of change in accounting
       principle                                       $       21,861        $      28,479        $      39,295
                                                       ==============        =============        =============

                                                          F-13

                                               TAUBMAN CENTERS, INC.

                             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 8 - Properties

   Properties at December 31, 2001 and December 31, 2000 are summarized as follows:

                                                                                   2001           2000
                                                                                   ----           ----
   Land                                                                      $     199,098   $     129,198
   Buildings, improvements, and equipment                                        1,913,629       1,526,672
   Construction in process                                                          60,157         275,125
   Development pre-construction costs                                               21,833          28,133
                                                                             -------------   -------------
                                                                             $   2,194,717   $   1,959,128
   Accumulated depreciation and amortization                                      (337,567)       (285,406)
                                                                             -------------   -------------
                                                                             $   1,857,150   $   1,673,722
                                                                             =============   =============

   The  properties  balances as of December 31, 2001 above reflect the 2001 openings of The Shops at Willow Bend, a
1.5  million  square foot center in Plano,  Texas,  and The Mall at  Wellington  Green,  a 1.3 million  square foot
center in Wellington,  Florida.  Construction in process  includes costs related to the construction of Stony Point
Fashion Park,  additional  phases of construction at The Shops at Willow Bend and The Mall at Wellington Green, and
expansions and improvements at various other centers.

   Depreciation  expense  for  2001,  2000,  and  1999  was  $63.0  million,  $52.5  million,  and  $47.9  million,
respectively.  The  charge  to  operations  in 2001,  2000,  and 1999 for  costs of  unsuccessful  and  potentially
unsuccessful pre-development activities was $6.6 million, $7.5 million, and $10.1 million, respectively.

   The balance of development  pre-construction  costs as of December 31, 2001 consists primarily of costs relating
to a project in Syosset,  New York.  Both Neiman  Marcus and Lord & Taylor have made  announcements  committing  to
the  project.  The Company is  currently  involved in a lawsuit to obtain the  necessary  zoning  approvals to move
forward with the project.  Although the Company  expects to be  successful  in this effort,  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.

Note 9 - Accounts and Notes Receivable

   Accounts and notes receivable at December 31, 2001 and December 31, 2000 are summarized as follows:

                                                                                 2001             2000
                                                                                 ----             ----
   Trade                                                                   $      26,222     $      17,284
   Notes                                                                          13,188            17,145
   Other                                                                           1,669             1,522
                                                                           -------------     -------------
                                                                           $      41,079     $      35,951
   Less: allowance for doubtful accounts                                          (5,345)           (3,796)
                                                                           -------------     --------------
                                                                           $      35,734     $      32,155
                                                                           =============     =============

   Notes  receivable as of December 31, 2001 provide  interest at a range of interest  rates from 7% to 10% (with a
weighted average interest rate of 7.9% at December 31, 2001) and mature at various dates.

   Accounts and notes  receivable  from related  parties at December 31, 2001 and December 31, 2000 are  summarized
as follows:

                                                                                  2001             2000
                                                                                  ------------------------
   Trade                                                                   $      10,645     $       6,578
   Notes                                                                          10,000             3,778
   Other                                                                                                98
                                                                           -------------     -------------
                                                                           $      20,645     $      10,454
                                                                           =============     =============

   In April 2001,  the $10 million  investment in Swerdlow  (Note 10) was converted  into a note  receivable  which
bore interest at 12% and matured in December 2001.  This loan is currently  delinquent and is accruing  interest at
18%.  All interest  due through the  December  maturity  date was  received.  Although  the  Operating  Partnership
expects to fully recover the amount due under this note receivable,  the Company is currently in negotiations  with
Swerdlow regarding the repayment.  An affiliate of Swerdlow is a partner in the Dolphin Mall joint venture.

                                                          F-14

                                               TAUBMAN CENTERS, INC.

                             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 10 - Deferred Charges and Other Assets

   Deferred charges and other assets at December 31, 2001 and December 31, 2000 are summarized as follows:
                                                                                 2001             2000
                                                                                 ----             ----
   Leasing                                                                 $      37,380     $      31,751
   Accumulated amortization                                                      (22,348)          (18,601)
                                                                           -------------     -------------
                                                                           $      15,032     $      13,150
   Interest rate agreements (Notes 2 and 11)                                         161             7,249
   Deferred financing costs, net                                                  12,817            10,492
   Investments                                                                    15,406            25,106
   Other, net                                                                      7,904             7,375
                                                                           -------------     -------------
                                                                           $      51,320     $      63,372
                                                                           =============     =============

   During 2001, the Company  committed to funding  approximately  $2 million in  Constellation  Real  Technologies,
LLC,  a  company  that  forms  and  sponsors  real  estate-related  internet,  e-commerce,  and  telecommunications
enterprises. The Company's investment was $0.5 million at December 31, 2001.

   In May 2000,  the Company  acquired an  approximately  6.8% interest in  MerchantWired,  LLC, a service  company
providing  internet and network  infrastructure  to shopping  centers and  retailers.  As of December 31, 2001, the
Company had an  investment  of  approximately  $3.6  million in this  venture  and has  guaranteed  obligations  of
approximately   $3.8  million.   The  principal   shareholder  of  MerchantWired  has  disclosed  that  the  future
profitability of MerchantWired is dependent on it obtaining outside capital and other management  expertise;  there
is no assurance as to its success in doing so. The Company  accounts for its  investment  in  MerchantWired  on the
equity  method.  During  2001 and  2000,  the  Company  recognized  its $2.4  million  and  $0.5  million  share of
MerchantWired losses, respectively.

   In November 1999, the Operating  Partnership acquired Lord Associates,  a retail leasing firm, for approximately
$7.5  million,  representing  $2.5  million  in cash and  435,153  partnership  units  (and an equal  number of the
Company's Series B  Non-Participating  Convertible  Preferred Stock). The units and stock are being released over a
five-year  period,  with  $0.9  million  and  $1.1  million  of  units  having  been  released  in 2001  and  2000,
respectively.  The owner of the partnership  units is not entitled to distributions or income  allocations,  and an
affiliate of the  Operating  Partnership  has voting rights to the stock,  until release of the units.  Of the cash
purchase  price,  approximately  $1.0  million was paid at closing and $1.5  million  will be paid over five years;
$1.0 million of the purchase price is contingent upon profits  achieved on acquired  leasing  contracts.  The final
65,271  partnership  units are collateral if the profit  contingency is not met. The acquisition of Lord Associates
was  accounted  for as a  purchase  (cost  amortized  over five  years),  with the  results of  operations  of Lord
Associates being included in the income statement of the Company  subsequent to the acquisition  date. During 2001,
68,000  partnership  units were  exchanged  by the owner for common  stock  under the  Continuing  Offer (Note 16).
Also, an equal number of Series B preferred  shares were  converted to shares of the Company's  common stock at the
Series B conversion ratio (Note 15).

   In  September  1999,  the Company  acquired an  approximately  5% interest  in  Swerdlow  Real Estate  Group,  a
privately  held real estate  investment  trust,  for  approximately  $10  million.  In April 2001,  the $10 million
investment in Swerdlow was converted into a note receivable (Note 9).

   In April  1999,  the  Company  obtained  a $7.4  million  preferred  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
and experienced  significant  decreases in operating revenues.  Fashionmall.com  management has disclosed that they
have more cash than is needed to fund current  operations and are considering how best to use such cash,  including
making  acquisitions,  issuing special dividends,  or finding other options to provide  opportunities for liquidity
to its  shareholders  at some time in the  future.  While the  Company's  right to a  preference  in the event of a
liquidation  is not  disputed,  and  while  there  is more  than  sufficient  cash in  fashionmall.com  to fund the
Company's  liquidation  preference,   the  Company  has  been  in  settlement  discussions  with  fashionmall.com's
management  to return the Company's  preferred  investment at a discount,  in order to facilitate  these  potential
uses of the cash.  There is no assurance  that the  settlement  discussions  will achieve a resolution  and/or what
their  ultimate  outcome will be. The Company  accounts for its investment in  fashionmall.com  on the cost method.
During 2001,  the Company  recorded a charge of $1.9 million  relating to its  investment in  fashionmall.com;  the
Company's investment was $5.5 million at December 31, 2001.

                                                          F-15

                                               TAUBMAN CENTERS, INC.

                             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

   The Company  assesses the valuation of its  investments  in these  entities in accordance  with its  established
policies for such investments (Note 1).

Note 11 - Debt

Mortgage Notes Payable

   Mortgage notes payable at December 31, 2001 and December 31, 2000 consist of the following:

                                                                                                      Balance Due
                                    2001           2000           Interest Rate   Maturity Date       on Maturity
                                    ----           ----           -------------   -------------       -----------

Beverly Center               $     146,000  $      146,000            8.36%            07/15/04          $146,000
Biltmore Fashion Park               79,007          79,730            7.68%            07/10/09            71,391
Great Lakes Crossing               150,958         170,000        LIBOR + 1.50%        04/01/02           150,323
MacArthur Center                   143,588         144,884            7.59%            10/01/10           126,884
Regency Square                      82,373                            6.75%            11/01/11            71,569
The Mall at Short Hills            270,000         270,000            6.70%            04/01/09           245,301
The Mall at Wellington Green       124,344                        LIBOR + 1.85%        05/01/04           124,344
The Shops at Willow Bend           186,482          99,672        LIBOR + 1.85%        07/01/03           186,482
Twelve Oaks Mall                                    49,987        LIBOR + 0.45%        10/15/01
Line of Credit                     205,000          63,000        LIBOR + 0.90%        11/01/04           205,000
Line of Credit                      11,955          26,325     Variable Bank Rate      06/30/02            11,955
Other                               22,039         122,311           Various            Various            20,000
                             -------------     -----------
                             $   1,421,746  $    1,171,909
                             =============  ==============

   Mortgage  debt is  collateralized  by  properties  with a net book value of $1.8  billion and $1.5 billion as of
December 31, 2001 and December 31, 2000, respectively.

   The $220  million  construction  facility  for The  Shops at  Willow  Bend  and the  $168  million  construction
facility for The Mall at Wellington  Green each have two one-year  extension  options.  Both loans provide for rate
decreases  when certain  performance  criteria are met. The Great Lakes  Crossing loan and the $275 million line of
credit each  provide for an option to extend the  maturity  dates one year.  The Company has notified the lender on
the Great Lakes  Crossing  loan of the Company's  intention to extend the loan.  The maximum  borrowings  available
under the two lines of credit are $275 million and $40 million,  respectively.  The other  mortgage  notes  payable
balance  includes  notes which are due at various dates through 2009,  and have fixed  interest  rates between 6.3%
and 13%. 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 following table presents scheduled principal payments on mortgage debt as of December 31, 2001.

                               2002                    $168,102
                               2003                     193,043
                               2004                     482,308
                               2005                       7,540
                               2006                       8,087
                               Thereafter               562,666

Unsecured Notes Payable

   Unsecured  notes  payable at  December  31, 2001 and  December  31,  2000 were $1.5  million  and $2.1  million,
respectively.

Debt Covenants and Guarantees

   Certain  loan and  facility  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 Company is in  compliance  with all
covenants.

                                                          F-16

                                               TAUBMAN CENTERS, INC.

                             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

   Payments  of  principal  and  interest  on the loans in the  following  table are  guaranteed  by the  Operating
Partnership as of December 31, 2001,  including those of certain  Unconsolidated  Joint  Ventures.  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 12/31/01     as of 12/31/01    as of 12/31/01      by TRG            by TRG
------                        --------------     --------------    --------------      ------            ------
                                            (in millions of dollars)
Dolphin Mall                        164.6             82.3              82.3               50%             100%
Great Lakes Crossing                151.0            128.3             151.0              100%             100%
International Plaza                 171.6             45.4             171.6              100%(1)          100%(1)
The Mall at Millenia                 56.5             28.3              28.3               50%              50%
The Mall at Wellington Green        124.3            111.9             124.3              100%             100%
The Shops at Willow Bend            186.5            186.5             186.5              100%             100%

(1)  An investor  in  the   International  Plaza venture  has indemnified  the Operating  Partnership to the extent
     of approximately 25% of the amounts  guaranteed.  Effective  February 2002, the guarantee on the International
     Plaza loan was reduced to 50%.

Extraordinary Items

   During the years ended  December  31, 2000 and 1999,  extraordinary  charges to income of $9.5 million  and $0.5
million,  respectively,  were  recognized in connection with the  extinguishment  of debt at  Unconsolidated  Joint
Ventures.

Fair Value of Financial Instruments Related to Debt

   The estimated fair values of financial instruments at December 31, 2001 and December 31, 2000 are as follows:

                                                         2001                                  2000
                                          --------------------------------          ------------------------------
                                             Carrying              Fair               Carrying            Fair
                                              Value                Value               Value              Value
                                           -----------         -----------           -----------      ------------

      Mortgage notes payable            $   1,421,746       $   1,520,384         $   1,171,909     $    1,253,421
      Unsecured notes payable                   1,495               1,495                 2,064              2,064
      Interest rate instruments -
        in a receivable position                  161                 161                 7,249                505

                                                          F-17

                                               TAUBMAN CENTERS, INC.

                             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Beneficial Interest in Debt and Interest Expense

   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 excludes debt and interest related 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:
   December 31, 2001                        1,423,241         1,154,141      1,345,086           562,811      1,907,897
   December 31, 2000                        1,173,973           950,847      1,105,008           483,683      1,588,691

Capital Lease Obligations:
   December 31, 2001                              304                64            259                40            299
   December 31, 2000                            1,581               630          1,522               416          1,938

Capitalized Interest:
   Year ended December 31, 2001                23,748            14,730         23,456             6,058         29,514
   Year ended December 31, 2000                25,052            13,263         25,052             5,678         30,730

Interest Expense:
   Year ended December 31, 2001                68,150            74,895         63,154            38,683        101,837
   Year ended December 31, 2000                57,329            65,266         52,166            34,933         87,099

Note 12 - Leases

Operating Leases

   Shopping  center space is leased to tenants and certain  anchors  pursuant to lease  agreements.  Tenant  leases
typically  provide for  guaranteed  minimum rent,  percentage  rent,  and other charges to cover certain  operating
costs.  Future minimum rent under operating leases in effect at December 31, 2001 for operating  centers,  assuming
no new or renegotiated leases or option extensions on anchor agreements, is summarized as follows:

                                      2002                           $197,445
                                      2003                            195,295
                                      2004                            182,273
                                      2005                            165,190
                                      2006                            150,824
                                      Thereafter                      588,362

   Certain  shopping  centers,  as lessees,  have ground leases expiring at various dates through the year 2065. In
addition,  the Company  leases its office  facilities.  Rental  payments  under ground and office  leases were $7.9
million in 2001,  $7.5  million in 2000,  and $7.0  million in 1999.  Included in these  amounts are related  party
office rental payments of $2.7 million in each year.

                                                          F-18

                                                TAUBMAN CENTERS, INC.

                             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

   The following is a schedule of future minimum rental payments required under operating leases:

                                      2002                            $7,160
                                      2003                             7,137
                                      2004                             7,140
                                      2005                             5,174
                                      2006                             3,624
                                      Thereafter                     165,850

   The table above  includes $2.8 million,  $2.8 million,  $2.8 million,  and $0.9 million of related party amounts
in 2002, 2003, 2004, and 2005.

Memorial City Mall Lease

   In 1996, the Operating  Partnership  entered into an agreement to lease Memorial City Mall, a 1.4 million square
foot  shopping  center  located in Houston,  Texas.  The lease was subject to certain  provisions  that enabled the
Operating  Partnership to explore  significant  redevelopment  opportunities and terminate the lease obligations in
the event  such  redevelopment  opportunities  were not  deemed to be  sufficient.  In April  2000,  the  Operating
Partnership terminated the lease.

Note 13 - Transactions with Affiliates

   The revenue from management,  leasing,  and development  services includes $4.1 million,  $4.2 million, and $2.5
million from  transactions  with  affiliates for the years ended December 31, 2001,  2000, and 1999,  respectively.
Accounts  receivable  from  related  parties  include  amounts  due from  Unconsolidated  Joint  Ventures  or other
affiliates of the Company,  primarily  relating to services  performed by the Manager (Note 14). These  receivables
include certain amounts due to the Manager related to reimbursement of third-party (non-affiliated) costs.

   During 1997, the Operating  Partnership  acquired an option from a related party to purchase certain real estate
on which the Operating  Partnership  was  exploring the  possibility  of developing a shopping  center.  The option
agreement  required  option  payments of $150  thousand  during each of the first five years,  $400 thousand in the
sixth year, and $500 thousand in the seventh year.  Through  December 31, 2000, the Operating  Partnership had made
payments of $450  thousand.  In 2000,  the  Operating  Partnership  decided not to go forward  with the project and
reached an agreement with the optionor to be reimbursed,  at the time of the sale or lease of the real estate,  for
an amount  equal to the lesser of 50% of the  project  costs to date or $350  thousand.  Under the  agreement,  the
Operating  Partnership's  obligation to make further  option  payments was  suspended.  The  Operating  Partnership
expects to receive $350  thousand in total  reimbursements  and after  receipt of such  amount,  the option will be
terminated. A sale of the property is not anticipated to take place before 2003.

   Other related party transactions are described in Notes 9, 12, and 14.

Note 14 - The Manager

   The Taubman Company LLC (the Manager),  which is 99% beneficially owned by the Operating  Partnership,  provides
property  management,  leasing,  development,  and other  administrative  services  to the  Company,  the  shopping
centers,  and Taubman affiliates.  In addition,  the Manager provides services to centers transferred to GMPT under
management agreements cancelable with 90 days notice, and services to other third parties.

   The Manager has a  voluntary  retirement  saving plan  established  in 1983 and amended and  restated  effective
January 1, 1994 (the Plan).  The Plan is qualified in accordance  with Section 401(k) of the Internal  Revenue Code
(the Code).  The Manager  contributes an amount equal to 2% of the qualified  wages of all qualified  employees and
matches  employee  contributions  in excess of 2% up to 7% of qualified  wages.  In addition,  the Manager may make
discretionary  contributions  within the limits  prescribed by the Plan and imposed in the Code.  Costs relating to
the Plan were $1.7 million in 2001, $1.9 million in 2000, and $1.6 million in 1999.

                                                          F-19

                                               TAUBMAN CENTERS, INC.

                             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

   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 16).

   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 paid in ten annual installments.

   As the Company declares  distributions,  the deferred option units will receive their proportionate share of the
distributions  in the form of cash payments.  The deferred  option units will ultimately be settled by the delivery
of a fixed number of units to the chief executive officer.  The balance in the deferred  compensation  account will
be classified as a component of shareholders' equity in the consolidated balance sheet.

   A summary  of the  status of the plan for each of the three  years in the  period  ended  December  31,  2001 is
presented below:

                                      2001                           2000                          1999
                          -----------------------------   -----------------------------  --------------------------
                                     Weighted-Average                Weighted-Average              Weighted-Average
                                      Exercise Price                  Exercise Price                Exercise Price
Options                      Units       Per Unit            Units       Per Unit          Units       Per Unit
-------                      -----       --------            -----       --------          -----       --------
Outstanding at
  beginning of year         7,594,458     $11.35            7,423,809     $11.36         6,805,018      $11.22
Exercised                  (1,511,283)     11.18              (12,854)      9.91          (285,739)      10.79
Granted                                                       250,000      11.25         1,000,000       12.25
Cancelled                                                     (66,497)     12.45           (93,494)      12.90
Forfeited                                                                                   (1,976)       9.69
                            ---------                       ---------                    ---------
Outstanding at
  end of year               6,083,175      11.39            7,594,458      11.35         7,423,809       11.36
                            =========                       =========                    =========
Options vested
  at year end               5,399,565      11.32            6,777,239      11.26         6,601,090       11.32
                            =========                       =========                    =========

   Options  outstanding at December 31, 2001 have a remaining  weighted-average  contractual  life of 2.7 years and
range in  exercise  price  from $9.39 to  $13.89.  The  weighted  average  fair  value per unit of options  granted
during 2000 and 1999 was $1.40 and $1.24,  respectively.  There were no options granted in 2001. The Company used a
binomial  option pricing model to determine the grant date fair values based on the following  assumptions for 2000
and 1999,  respectively:  volatility rates of 21.0% and 20.4%,  risk-free rates of return of approximately 6.4% and
5.3%, and dividend yields of approximately 8.6% and 7.8%.

   The Company  applies APB Opinion 25 and related  interpretations  in accounting for the plan. The exercise price
of all options outstanding granted under the plan was equal to market value on the date of grant.  Accordingly,  no
compensation  expense has been recognized for the plan. Had  compensation  cost for the plan been determined  based
on the fair value of the options at the grant  dates,  consistent  with the method of FAS  Statement  123,  the pro
forma effect on the Company's earnings and earnings per share would have been  approximately $0.2 million,  or less
than $0.01 per share in 2001,  approximately $0.2 million,  or less than $0.01 per share in 2000, and approximately
$0.7 million, or $0.01 per share in 1999.

   Currently,  options for 6.2 million Operating Partnership units may be issued under the plan,  substantially all
of which have been issued.  However,  if 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.

                                                          F-20

                                                TAUBMAN CENTERS, INC.

                             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

   In January  2002,  options for 500,000  units vested upon the  achievement  of certain  stock price  performance
criteria.

Note 15 - Common and Preferred Stock and Equity of TRG

   The 8.3% Series A Cumulative  Redeemable  Preferred  Stock  (Series A Preferred  Stock) has no stated  maturity,
sinking  fund,  or mandatory  redemption  and is not  convertible  into any other  securities  of the Company.  The
Series A Preferred  Stock has a liquidation  preference of $200 million ($25 per share).  Dividends are  cumulative
and  accrue at an annual  rate of 8.3% and are  payable  in  arrears  on or  before  the last day of each  calendar
quarter.  All  accrued  dividends  have been paid.  The Series A  Preferred  Stock can be  redeemed  by the Company
beginning  in October 2002 at $25 per share plus any accrued  dividends.  The  redemption  price can be paid solely
out of the sale of capital  stock of the  Company.  The Company  owns a  corresponding  Series A  Preferred  Equity
interest  in the  Operating  Partnership  that  entitles  the Company to income and  distributions  (in the form of
guaranteed payments) in amounts equal to the dividends payable on the Company's Series A Preferred Stock.

   The  Company  is  obligated  to issue  to the  minority  interest,  upon  subscription,  one  share of  Series B
Non-Participating  Convertible  Preferred  Stock (Series B Preferred  Stock) for each of the Operating  Partnership
units held by the  minority  interest.  Each share of Series B Preferred  Stock  entitles the holder to one vote on
all matters submitted to the Company's  shareholders.  The holders of Series B Preferred Stock,  voting as a class,
have the right to designate up to four  nominees  for election as directors of the Company.  On all other  matters,
including the election of directors,  the holders of Series B Preferred  Stock will vote with the holders of common
stock.  The  holders  of Series B  Preferred  Stock are not  entitled  to  dividends  or  earnings.  Under  certain
circumstances,  the Series B  Preferred  Stock is  convertible  into  common  stock at a ratio of 14,000  shares of
Series B Preferred Stock for one share of common stock.

   In September 1999 and November 1999, the Operating  Partnership  completed private  placements of $75 million 9%
Cumulative  Redeemable  Preferred  Partnership  Equity  (Series C Preferred  Equity) and $25 million 9%  Cumulative
Redeemable  Preferred  Partnership Equity (Series D Preferred Equity),  respectively.  Both the Series C and Series
D  Preferred  Equity  were  purchased  by  institutional  investors,  and have a fixed 9%  coupon  rate,  no stated
maturity, sinking fund, or mandatory redemption requirements.

   The holders of Series C Preferred  Equity have the right,  beginning in 2009, to exchange  $37.50 in liquidation
value of such  equity for one share of Series C  Preferred  Stock.  The  holders of the Series D  Preferred  Equity
have the right,  beginning in 2009, to exchange $100 in liquidation  value of such equity for one share of Series D
Preferred Stock. The terms of the Series C Preferred Stock and Series D Preferred Stock are  substantially  similar
to those of the Series C Preferred  Equity and Series D Preferred  Equity.  Like the Series A Preferred  Stock, the
Series C Preferred Stock and Series D Preferred Stock are non-voting.

   In March 2000,  the Company's  Board of Directors  authorized the purchase of up to $50 million of the Company's
common stock in the open market.  The stock may be purchased from time to time as market  conditions  warrant.  For
each share of the Company's stock  repurchased,  an equal number of the Company's  Operating  Partnership units are
redeemed.  As of December  31,  2001,  the Company had  purchased,  and the  Operating  Partnership  had  redeemed,
approximately  4.1 million  shares and units for  approximately  $47.1 million.  Existing lines of credit  provided
funding for the purchases.

                                                          F-21

                                               TAUBMAN CENTERS, INC.

                             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 16 - 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 December 31, 2001 of $14.85 per common  share,  the  aggregate  value of interests in
the Operating  Partnership  that may be tendered under the Cash Tender  Agreement was  approximately  $366 million.
The purchase of these  interests at December 31, 2001 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 the Operating  Partnership interest is exchangeable for
one share of the Company's common stock.

   Shares of common stock that were acquired by General  Motors  pension  trusts in connection  with the IPO may be
sold through a registered  offering.  Pursuant to a registration  rights agreement with the Company,  the owners of
these  shares have the annual  right to cause the  Company to register  and  publicly  sell their  shares of common
stock  (provided  that the shares have an  aggregate  value of at least $50  million  and subject to certain  other
restrictions).  All expenses of such a  registration  are to be borne by the Company,  other than the  underwriting
discounts or selling commissions, which will be borne by the exercising party.

   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.

   Refer to Note 10 for  commitments  relating to certain  investments in technology  businesses.  Refer to Note 11
for the Operating Partnership's guarantees of certain debt.

Note 17 - 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.  For the
years ended  December 31, 2001,  2000,  and 1999,  options for 0.6 million,  4.5 million,  and 0.7 million units of
partnership interest with average exercise prices of $13.30, $11.99, and $13.38,  respectively,  were excluded from
the  computation of diluted  earnings per share because the options'  exercise prices were greater than the average
market price for the period calculated.

                                                          F-22

                                               TAUBMAN CENTERS, INC.

                             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

                                                                                  Year Ended December 31
                                                                ----------------------------------------------------
                                                                          2001              2000           1999
                                                                ----------------------------------------------------
                                                                             (in thousands, except share data)
Income (loss) before extraordinary items and
  cumulative effect of change in accounting principle
  allocable to common shareowners (Numerator):
   Net income (loss) allocable to common
      shareowners                                                     $   (8,943)      $   86,420      $   8,902
   Common shareowners' share of cumulative
      effect of change in accounting principle                             4,924
   Common shareowners' share of extraordinary
      items                                                                                 5,958             294
                                                                      ----------       ----------      ----------
   Basic income (loss) before extraordinary items
      and cumulative effect of change in accounting
      principle                                                       $   (4,019)      $   92,378      $    9,196
   Effect of dilutive options                                               (424)            (490)           (270)
                                                                      ----------       ----------      ----------
   Diluted income (loss) before extraordinary items
      and cumulative effect of change in accounting
      principle                                                       $   (4,443)      $   91,888      $    8,926
                                                                      ==========       ==========      ==========

Shares (Denominator) - basic and diluted                              50,500,058       52,463,598      53,192,364
                                                                      ==========       ==========      ==========

Income (loss) before extraordinary items and
  cumulative effect of change in accounting
  principle per common share:
     Basic                                                            $   (0.08)       $     1.76      $     0.17
                                                                      =========        ==========      ==========
     Diluted                                                          $   (0.09)       $     1.75      $     0.17
                                                                      =========        ==========      ==========

Cumulative effect of change in accounting principle
  per common share - basic and diluted                                $   (0.10)
                                                                      =========

Extraordinary items per common share - basic
   and diluted                                                                         $    (0.11)      $  (0.01)
                                                                                       ==========       =========

Note 18 - Cash Flow Disclosures and Non-Cash Investing and Financing Activities

   Interest paid in 2001,  2000, and 1999, net of amounts  capitalized  of $23.7 million,  $25.1 million,  and $14.5
million,  respectively,  approximated $63.5 million, $50.4 million, and $45.8 million,  respectively.  The following
non-cash investing and financing activities occurred during 2001, 2000, and 1999:

                                                                       2001           2000           1999
                                                                       ----           ----           ----

Non-cash additions to properties                                      $59,622         $13,568        $13,550
Non-cash contributions to Unconsolidated Joint Ventures                 3,778           2,762         58,720
Step-up in Company's basis in Twelve Oaks Mall (Note 3)                               121,654
Land contracts                                                            800           7,341            843
Partnership units released (Note 10)                                      878           1,130
Debt assumed with Twelve Oaks transaction (Note 3)                                     50,015
Accrual for stock repurchases settled in January 2001                                   1,621

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

                                                          F-23

                                               TAUBMAN CENTERS, INC.

                             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 19 - Quarterly Financial Data (Unaudited)

   The following is a summary of quarterly results of operations for 2001 and 2000:

                                                                                            2001
                                                                  ------------------------------------------------
                                                                   First        Second      Third       Fourth
                                                                  Quarter       Quarter    Quarter      Quarter
                                                                  ------------------------------------------------
                                                                            (in thousands, except share data)

Revenues                                                          $  78,848   $  83,589  $   82,185     $ 96,806
Equity in income of Unconsolidated Joint Ventures                     4,856       5,215       4,788        7,002
Income before extraordinary items, cumulative effect of
  change in accounting principle,  and minority and
  preferred interests                                                13,736      15,723      12,295       13,910
Net income (loss)                                                    (4,499)      5,760       2,796        3,600
Net income (loss)  allocable to common shareowners                   (8,649)      1,610      (1,354)        (550)
Basic earnings per common share:
   Income (loss)  before extraordinary items and cumulative
     effect of change in accounting principle                     $   (0.07)  $    0.03  $    (0.03)    $  (0.01)
   Net income (loss)                                                  (0.17)       0.03       (0.03)       (0.01)
Diluted earnings per common share:
   Income (loss)  before extraordinary items and cumulative
     effect of change in accounting principle                     $   (0.07)  $    0.03  $    (0.03)    $  (0.01)
   Net income (loss)                                                  (0.17)       0.03       (0.03)       (0.01)

                                                                                            2000
                                                                  ------------------------------------------------
                                                                   First        Second      Third       Fourth
                                                                  Quarter       Quarter    Quarter      Quarter
                                                                  ------------------------------------------------
                                                                            (in thousands, except share data)

Revenues                                                          $  72,773   $  70,398  $   74,789     $ 87,640
Equity in income of Unconsolidated Joint Ventures                     8,595       7,728       5,089        7,067
Income before gain on disposition of interest in center,
  extraordinary items, and minority and preferred
  interests                                                          16,827      14,529      14,254       20,877
Net income (loss)                                                    (2,239)      4,750      89,815       10,694
Net income (loss)  allocable to common shareowners                   (6,389)        600      85,665        6,544
Basic earnings per common share:
   Income (loss)  before extraordinary items                      $   (0.01)  $    0.01  $     1.63     $   0.13
   Net income (loss)                                                  (0.12)       0.01        1.63         0.13
Diluted earnings per common share:
   Income (loss)  before extraordinary items                      $   (0.01)  $    0.01  $     1.62     $   0.13
   Net income (loss)                                                  (0.12)       0.01        1.62         0.13

Note 20 - New Accounting Principle

   In  October 2001, the  Financial  Accounting  Standards  Board  issued  Statement  No. 144, "Accounting  for the
Impairment or Disposal of Long-Lived Assets", which replaced FASB Statement No. 121, "Accounting for the Impairment
of Long-Lived  Assets  and  for Long-Lived Assets to Be Disposed Of".  Statement  144  broadens  the  reporting  of
discontinued operations to include disposals of operating  components; each  of  the  Company's  investments in  an
operating  center  is  such  a  component.  The provisions of  Statement 144 are effective for financial statements
issued for fiscal years beginning  after  December 15, 2001 and  generally are  to  be applied prospectively.   The
Statement is not expected to have a material effect on the  financial  condition  or  results  of operations of the
Company; however, if the Company were to dispose of a center, the center's  results of  operations would have to be
separately disclosed as discontinued operations in the Company's financial statements.

                                                          F-24

                                               TAUBMAN CENTERS, INC.

                             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 21 - Subsequent Events

   In early 2002, the Operating  Partnership  entered into a definitive  purchase and sale agreement to acquire 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 after the  acquisition.  Although the Operating  Partnership  is purchasing
its interest in Sunvalley  from an unrelated  third party,  the other partner is an entity owned and  controlled by
Mr. A. Alfred Taubman, the Company's largest shareholder and recently retired Chairman of the Board of Directors.

   Also in early 2002,  the Company  entered into  agreements  to sell its  interests  in LaCumbre  Plaza and Paseo
Nuevo,  subject to satisfying  closing  conditions,  for $77 million.  The centers are subject to ground leases and
are unencumbered by debt. The centers were purchased in 1996 for $59 million.

   These  transactions  are expected to close during the first half of 2002, and the Company expects to use the net
proceeds from the sale of the two centers to fund the  acquisition of Sunvalley and pay down  borrowings  under the
Company's lines of credit.

    In March 2002,  the Company  entered into a one-year  4.3% swap  agreement  based on a notional  amount of $100
million to begin November 1, 2002, as a hedge of the Company's $275 million line of credit.

                                                          F-25

                                                                                                        Schedule II
                                               TAUBMAN CENTERS, INC.
                                         Valuation and Qualifying Accounts
                               For the years ended December 31, 2001, 2000, and 1999
                                                  (in thousands)

                                                                Additions
                                                       --------------------------
                                          Balance at    Charged to    Charged to                                    Balance
                                           beginning     costs and      other                                       at end
                                            of year      expenses      accounts     Write-offs     Transfers, net  of year
                                           ---------    ----------    ----------   ------------    --------------  --------

Year ended December 31, 2001:
  Allowance for doubtful receivables        $3,796         3,427                       (1,602)          (276)       $5,345
                                            ======         =====                       =======          ====        ======

Year ended December 31, 2000:
  Allowance for doubtful receivables        $1,549         3,558                       (1,704)           393 (1)    $3,796
                                            ======         =====                       ======            ===        ======

Year ended December 31, 1999:
  Allowance for doubtful receivables          $333         2,238                       (1,022)                      $1,549
                                              ====         =====                       =======                      ======

(1)  Represents the transfer in of Twelve Oaks Mall.  Prior to August 2000, the Company accounted for its  interest
     in Twelve Oaks under the equity method.

                                                          F-26

                                                                             TAUBMAN CENTERS, INC.                                                                  Schedule III
                                                                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                                                                                December 31, 2001
                                                                                 (in thousands)

                                               Initial Cost                         Gross Amount at Which
                                                to Company          Cost           Carried at Close of Period                                              Date of
                                            -------------------  Capitalized     ------------------------------   Accumulated     Total                 Completion of
                                                  Buildings and   Subsequent                                      Depreciation   Cost Net               Construction or  Depreciable
                                            Land   Improvements  to Acquisition   Land       BI&E       Total         (A/D)       of A/D   Encumbrances   Acquisition      Life
                                            ----   ------------  --------------   ----       ----       -----    -------------  --------  ------------  ---------------  -----------

Shopping Centers:
  Beverly Center, Los Angeles, CA        $      0   $ 209,348    $  34,702   $       0  $  244,050   $  244,050    $  74,310  $  169,740    $ 146,000         1982     40 Years
  Biltmore Fashion Park, Phoenix, AZ       19,097     103,257       16,166      19,097     119,423      138,520       25,008     113,512       79,007         1994     40 Years
  Fairlane Town Center, Dearborn, MI       16,830     104,812       22,047      16,830     126,859      143,689       24,655     119,034         Note (1)     1996     40 Years
  Great Lakes Crossing, Auburn Hills, MI   12,349     196,398        9,679      12,349     206,077      218,426       32,108     186,318      150,958         1998     50 Years
  La Cumbre Plaza, Santa Barbara, CA            0      27,762        1,161           0      28,923       28,923        4,633      24,290                      1996     40 Years
  MacArthur Center, Norfolk, VA             4,000     144,176        1,862       4,000     146,038      150,038       17,209     132,829      143,588         1999     50 Years
  Paseo Nuevo, Santa Barbara, CA                0      39,086        1,084           0      40,170       40,170        7,148      33,022                      1996     40 Years
  Regency Square, Richmond, VA             18,635     103,062        1,247      18,635     104,309      122,944       16,869     106,075       82,373         1997     40 Years
  The Mall at Short Hills, Short Hills, NJ 25,114     171,151      114,062      25,114     285,213      310,327       71,216     239,111      270,000         1980     40 Years
  Twelve Oaks Mall, Novi, MI               25,410     191,185        6,237      25,410     197,422      222,832       37,779     185,053         Note(1)      1977     50 Years
  The Mall at Wellington Green,
   Wellington, FL                          23,824     155,642            0      23,824     155,642      179,466        1,446     178,020      124,344         2001     50 Years
  The Shops at Willow Bend, Plano, TX      27,221     229,614            0      27,221     229,614      256,835        3,262     253,573      186,482         2001     50 Years
Other:
  Manager's Office Facilities                   0           0       28,769           0      28,769       28,769       21,598       7,171            0
  Peripheral Land                          26,618           0            0      26,618           0       26,618            0      26,618            0
  Construction in Process and
   Development Pre-construction Costs           0      79,238        2,752           0      81,990       81,990            0      81,990            0
  Other                                         0       1,120            0           0       1,120        1,120          326         794       22,039
                                         --------    --------    ---------   ---------  ----------   ----------    ---------  ----------
TOTAL                                    $199,098  $1,755,851    $ 239,768   $ 199,098  $1,995,619   $2,194,717(2) $ 337,567  $1,857,150
                                         ========  ==========    =========   =========  ==========   ==========    =========  ==========

The changes in total real estate assets and accumulated  depreciation  for the years ended December 31, 2001, 2000, and 1999 are as follows:

                                           Total             Total            Total
                                        Real Estate       Real Estate      Real Estate                                       Accumulated        Accumulated       Accumulated
                                          Assets            Assets           Assets                                         Depreciation       Depreciation      Depreciation
                                          ------           --------          ------                                         ------------       ------------      ------------
                                           2001              2000             1999                                              2001               2000              1999
                                           ----              ----             ----                                              ----               ----              ----

   Balance, beginning of year          $ 1,959,128      $ 1,572,285      $ 1,473,440          Balance, beginning of year    $  (285,406)       $  (210,788)      $  (164,798)
   New development and improvements        250,111          184,205          160,746          Depreciation for year             (63,007)           (52,506)          (47,965)
   Disposals                               (16,428)         (13,403)          (3,181)         Disposals                          10,846              7,421             1,975
   Transfers In/(Out)                        1,906          216,041(3)       (58,720)(4)      Transfers In                                         (29,533)(3)
                                       -----------      -----------      -----------                                        -----------        -----------       -----------
   Balance, end of year                $ 2,194,717      $ 1,959,128      $ 1,572,285          Balance, end of year          $  (337,567)       $  (285,406)      $  (210,788)
                                       ===========      ===========      ===========                                        ===========        ===========       ===========

(1)  These centers are collateral for the Company's line of credit, which had a balance of $205 million at December 31, 2001.
(2)  The unaudited aggregate cost for federal income tax purposes as of December 31, 2001 was $2.069 billion.
(3)  Includes costs transferred relating to Twelve Oaks Mall, which became wholly owned in 2000.
(4)  Includes costs transferred relating to International Plaza and Dolphin Mall, which became Unconsolidated Joint Ventures in 1999.

                                                          F-27

UNCONSOLIDATED JOINT VENTURES OF THE TAUBMAN REALTY GROUP
                     LIMITED PARTNERSHIP (a consolidated subsidiary of Taubman Centers, Inc.)

                                           COMBINED FINANCIAL STATEMENTS
                                       AS OF DECEMBER 31, 2001 AND 2000 AND
                                               FOR EACH OF THE YEARS
                                      ENDED DECEMBER 31, 2001, 2000, AND 1999

                                                          F-28

                                           INDEPENDENT AUDITORS' REPORT

Board of Directors and Shareowners
Taubman Centers, Inc.

   We have  audited the  accompanying  combined  balance  sheets of  Unconsolidated  Joint  Ventures of The Taubman
Realty Group Limited  Partnership (the  "Partnership") (a consolidated  subsidiary of Taubman Centers,  Inc.) as of
December 31, 2001 and 2000, and the related  combined  statements of operations,  partnership  equity  (accumulated
deficiency  in assets),  and cash flows for each of the three years in the period  ended  December  31,  2001.  Our
audits  also  included  the  financial  statement  schedules  listed  in the  Index  at Item  14.  These  financial
statements  and  financial  statement  schedules  are  the  responsibility  of the  Partnership's  management.  Our
responsibility  is to express an opinion on the financial  statements and financial  statement  schedules  based on
our audits.

   We conducted  our audits in  accordance  with  auditing  standards  generally  accepted in the United  States of
America.  Those standards require that we plan and perform the audit to obtain  reasonable  assurance about whether
the  financial  statements  are free of  material  misstatement.  An audit  includes  examining,  on a test  basis,
evidence  supporting the amounts and  disclosures  in the financial  statements.  An audit also includes  assessing
the accounting  principles  used and  significant  estimates made by management,  as well as evaluating the overall
financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

   In our opinion,  such combined  financial  statements  present fairly,  in all material  respects,  the combined
financial  position of  Unconsolidated  Joint  Ventures of The  Taubman  Realty  Group  Limited  Partnership  as of
December 31, 2001 and 2000,  and the combined  results of their  operations  and their combined cash flows for each
of the three years in the period  ended  December  31, 2001 in  conformity  with  accounting  principles  generally
accepted  in the United  States of  America.  Also,  in our  opinion,  such  financial  statement  schedules,  when
considered  in relation  to the basic  combined  financial  statements  taken as a whole,  present  fairly,  in all
material respects, the information set forth therein.

   As discussed in Note 2 to the combined financial  statements,  in 2001 the Unconsolidated  Joint Ventures of The
Taubman Realty Group Limited Partnership  changed their method of accounting for derivative  instruments to conform
to Statement of Financial Accounting Standards No. 133, as amended and interpreted.

DELOITTE & TOUCHE LLP

Detroit, Michigan
February 12, 2002

                                                          F-29

                             UNCONSOLIDATED JOINT VENTURES OF THE TAUBMAN REALTY GROUP
                                                LIMITED PARTNERSHIP

                                              COMBINED BALANCE SHEET
                                                   (in thousands)

                                                                                    December 31
                                                                         ----------------------------------
                                                                             2001                  2000
                                                                             ----                  ----
Assets:
  Properties (Notes 3, 5 and 7)                                          $   1,367,082       $   1,073,818
    Accumulated depreciation and amortization                                 (220,201)           (189,644)
                                                                         -------------       -------------
                                                                         $   1,146,881       $     884,174

  Cash and cash equivalents                                                     30,664              19,793
  Accounts receivable, less allowance
    for doubtful accounts of $3,356 and $1,628
    in 2001 and 2000                                                            20,302               6,096
  Note receivable from Joint Venture Partner (Note 7)                                                  221
  Deferred charges and other assets (Notes 4 and 7)                             29,290              34,697
                                                                         -------------       -------------
                                                                         $   1,227,137       $     944,981
                                                                         =============       =============

Liabilities:
  Mortgage notes payable (Note 5)                                        $   1,151,485       $     944,155
  Note payable to related party (Note 5)                                                             3,778
  Other notes payable (Note 5)                                                   2,656               2,914
  Capital lease obligations (Note 6)                                                64                 630
  Accounts payable to related parties (Note 7)                                   3,102               3,801
  Accounts payable and other liabilities                                       106,081              44,638
                                                                         -------------       -------------
                                                                         $   1,263,388       $     999,916

Commitments (Note 6)

Accumulated deficiency in assets:
  Partnership equity -TRG                                                $       1,264       $     (36,570)
  Accumulated deficiency in assets-Joint Venture Partners                      (36,793)            (18,365)
  Accumulated other comprehensive income-TRG                                      (361)
  Accumulated other comprehensive income-
     Joint Venture Partners                                                       (361)
                                                                         -------------       -------------
                                                                         $     (36,251)      $     (54,935)
                                                                         -------------       -------------
                                                                         $   1,227,137       $     944,981
                                                                         =============       =============

                                        See notes to financial statements.

                                                          F-30

                             UNCONSOLIDATED JOINT VENTURES OF THE TAUBMAN REALTY GROUP
                                                LIMITED PARTNERSHIP

                                         COMBINED STATEMENT OF OPERATIONS
                                                   (in thousands)

                                                                               Year Ended December 31
                                                                    --------------------------------------------
                                                                         2001           2000             1999
                                                                         ----           ----             ----

Revenues:
  Minimum rents                                                     $    149,320    $   145,487      $   158,126
  Percentage rents                                                         3,189          3,772            3,921
  Expense recoveries                                                      73,594         75,691           83,557
  Other                                                                   12,306          5,729            6,405
                                                                    ------------    -----------      -----------
                                                                    $    238,409    $   230,679      $   252,009
                                                                    ------------    -----------      -----------

Operating costs:
  Recoverable expenses (Note 7)                                     $     67,330    $    63,587      $    69,367
  Other operating (Note 7)                                                20,116         17,943           18,388

  Interest expense                                                        74,895         65,266           64,152
  Depreciation and amortization                                           39,695         30,263           29,983
                                                                    ------------    -----------      -----------
                                                                    $    202,036    $   177,059      $   181,890
                                                                    ------------    -----------      -----------

Income before extraordinary items and cumulative
  effect of change in accounting principle                          $     36,373    $    53,620      $    70,119
Extraordinary items (Note 5)                                                            (19,169)            (333)
Cumulative effect of change in accounting principle (Note 2)              (3,304)
                                                                    ------------    -----------      -----------
Net income                                                          $     33,069    $    34,451      $    69,786
                                                                    ============    ===========      ===========

Net income                                                          $     33,069    $    34,451      $    69,786
Other comprehensive income (Note 2):
  Cumulative effect of change in accounting principle                     (1,558)
  Reclassification adjustment for amounts recognized
    in net income                                                            836
                                                                    ------------    -----------      -----------
Comprehensive income                                                $     32,347    $    34,451      $    69,786
                                                                    ============    ===========      ===========

Allocation of net income:
Attributable to TRG                                                 $     17,533    $    18,099      $    38,346
Attributable to Joint Venture Partners                                    15,536         16,352           31,440
                                                                    ------------    -----------      -----------
                                                                    $     33,069    $    34,451      $    69,786
                                                                    ============    ===========      ===========

                                        See notes to financial statements.

                                                          F-31

                             UNCONSOLIDATED JOINT VENTURES OF THE TAUBMAN REALTY GROUP
                                                LIMITED PARTNERSHIP

                    COMBINED STATEMENT OF PARTNERSHIP EQUITY (ACCUMULATED DEFICIENCY IN ASSETS)
                                                  (in thousands)

                                                                                 Joint Venture
                                                                    TRG              Partners             Total
                                                                    ---         -----------------         -----

Balance, January 1, 1999                                      $   (103,545)      $   (129,996)       $    (233,541)
Non-cash contributions (Note 3)                                     52,110             31,247               83,357
Cash contributions                                                  36,799             34,747               71,546
Cash distributions                                                 (98,459)           (28,675)            (127,134)
Net income                                                          38,346             31,440               69,786
                                                              ------------       ------------        -------------
Balance, December 31, 1999                                    $    (74,749)      $    (61,237)       $    (135,986)
Non-cash contributions (Note 3)                                        659                659                1,318
Cash contributions                                                  18,830             18,830               37,660
Cash distributions                                                 (39,512)           (33,072)             (72,584)
Transferred centers (Note 1)                                        40,103             40,103               80,206
Net income                                                          18,099             16,352               34,451
                                                              ------------       ------------        -------------
Balance, December 31, 2000                                    $    (36,570)      $    (18,365)       $     (54,935)
Non-cash contributions (Note 5)                                      3,778                                   3,778
Cash contributions                                                  55,940                 18               55,958
Cash distributions                                                 (39,417)           (33,982)             (73,399)
Other comprehensive income:
   Cumulative effect of change in accounting
      principle (Note 2)                                              (779)              (779)              (1,558)
   Reclassification adjustment for amounts
      recognized in net income (Note 2)                                418                418                  836
Net income                                                          17,533             15,536               33,069
                                                              ------------       ------------        -------------
Balance, December 31, 2001                                    $        903       $    (37,154)       $     (36,251)
                                                              ============       ============        =============

                                        See notes to financial statements.

                                                          F-32

                             UNCONSOLIDATED JOINT VENTURES OF THE TAUBMAN REALTY GROUP
                                                LIMITED PARTNERSHIP

                                         COMBINED STATEMENT OF CASH FLOWS
                                                   (in thousands)

                                                                                    Year Ended December 31
                                                                         ------------------------------------------
                                                                              2001           2000          1999
                                                                              ----           ----          ----

Cash Flows From Operating Activities:
    Income before extraordinary items and cumulative effect
     of change in accounting principle                                   $    36,373   $    53,620   $    70,119
    Adjustments to reconcile income before extraordinary items
     and cumulative effect of change in accounting principle
     to net cash provided by operating activities:
       Depreciation and amortization                                          39,695        30,263        29,983
       Provision for losses on accounts receivable                             3,803         2,644         1,822
       Gains on sales of land                                                                 (501)
       Unrealized losses on interest rate instruments                          5,914
       Other
      Increase (decrease) in cash attributable to
          changes in assets and liabilities:
          Receivables, deferred
            charges and other assets                                         (18,193)         (530)       (6,443)
          Accounts payable and other liabilities                              15,390        (2,376)       (1,952)
                                                                         -----------   -----------   -----------
Net Cash Provided By Operating Activities                                $    82,982   $    83,120   $    93,529
                                                                         -----------   -----------   -----------

Cash Flows From Investing Activities:
    Additions to properties                                              $  (258,335)  $  (231,125)  $   (79,298)
    Proceeds from sales of land                                                                640           105
                                                                         -----------   -----------   -----------
Net Cash Used In Investing Activities                                    $  (258,335)  $  (230,485)  $   (79,193)
                                                                         -----------   -----------   -----------

Cash Flows From Financing Activities:
    Debt proceeds                                                        $   208,805   $   390,721   $   201,152
    Debt payments                                                             (2,299)       (1,976)       (3,439)
    Extinguishment of debt                                                                (214,754)     (141,459)
    Debt issuance costs                                                       (2,841)       (2,704)       (8,007)
    Cash contributions from partners                                          55,958        37,660        71,546
    Cash distributions to partners                                           (73,399)      (72,584)     (127,134)
                                                                         -----------   -----------   -----------
Net Cash Provided By (Used In) Financing Activities                      $   186,224   $   136,363   $    (7,341)
                                                                         -----------   -----------   -----------

Net increase (decrease) in Cash and Cash Equivalents                     $    10,871   $   (11,002)  $     6,995

Cash and Cash Equivalents at Beginning of Year                                19,793        36,823        29,828

Effect of transferred centers in connection
   with Twelve Oaks/Lakeside transaction (Note 1)                                           (6,028)
                                                                         -----------   -----------   -----------

Cash and Cash Equivalents at End of Year                                 $    30,664   $    19,793   $    36,823
                                                                         ===========   ===========   ===========

                                        See notes to financial statements.

                                                          F-33

                             UNCONSOLIDATED JOINT VENTURES OF THE TAUBMAN REALTY GROUP
                                                LIMITED PARTNERSHIP
                                      NOTES TO COMBINED FINANCIAL STATEMENTS

Note 1 - Summary of Significant Accounting Policies

Basis of Presentation

   The Taubman  Realty Group  Limited  Partnership  (TRG),  a  consolidated  subsidiary of Taubman  Centers,  Inc.,
engages in the ownership,  management, leasing, acquisition,  development and expansion of regional retail shopping
centers and interests  therein.  TRG has engaged the Manager (The Taubman Company LLC, which is  approximately  99%
beneficially  owned by TRG) to provide most property  management and leasing  services for the shopping centers and
to provide corporate,  development,  and acquisition  services.  For financial statement  reporting  purposes,  the
accounts of shopping  centers that are not  controlled and that are owned through joint ventures with third parties
(Unconsolidated  Joint  Ventures)  have been combined in these  financial  statements.  Generally,  net profits and
losses  of the  Unconsolidated  Joint  Ventures  are  allocated  to TRG and the  outside  partners  (Joint  Venture
Partners) in accordance with their ownership percentages.

   Dollar  amounts  presented  in tables  within  the notes to the  combined  financial  statements  are  stated in
thousands.

Investments in Unconsolidated Joint Ventures

   TRG's interest in each of the Unconsolidated Joint Ventures at December 31, 2001, is as follows:

                                                                                                    TRG's %
       Unconsolidated Joint Venture              Shopping Center                                   Ownership
       ----------------------------              ---------------                                   ---------

       Arizona Mills, L.L.C.                     Arizona Mills                                     37%
       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
       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 1.25 million square foot center,  opened in Tampa,  Florida.  As of
December 31, 2001, TRG has a preferential  investment in International  Plaza of $19.1 million,  on which an annual
preferential return of 8.25% will accrue.

   In March 2001,  Dolphin  Mall,  a 1.3 million  square foot  regional  center,  opened in Miami,  Florida.  As of
December  31,  2001,  TRG has a  preferred  investment  in  Dolphin  Mall of $29.6  million,  on  which  an  annual
preferential return of 16.0% will accrue.

   In addition to the preferred  returns on its  investments  in  International  Plaza and Dolphin  Mall,  TRG will
receive a return of its preferred  investments  before any  available  cash will be utilized for  distributions  to
non-preferred partners.

   In August 2000,  TRG completed a  transaction  to acquire an  additional  interest in one of its  Unconsolidated
Joint  Ventures.  Under the terms of the  agreement,  TRG became  the 100% owner of Twelve  Oaks Mall and its joint
venture  partner  became the 100% owner of  Lakeside,  subject to the existing  mortgage  debt ($50 million and $88
million at Twelve Oaks and Lakeside,  respectively.)  The results of the transferred  centers are included in these
statements  through  the date of the  transaction.  At the date of the  transaction,  the  combined  book values of
these centers' assets and liabilities were $66.6 million and $146.8 million, respectively.

   In April 2000,  TRG entered  into an  agreement  to develop The Mall at Millenia in Orlando,  Florida.  This 1.2
million square foot center is expected to open in October 2002.

                                                          F-34

                             UNCONSOLIDATED JOINT VENTURES OF THE TAUBMAN REALTY GROUP
                                                LIMITED PARTNERSHIP
                                NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

Revenue Recognition

   Shopping center space is generally leased to specialty  retail tenants under short and intermediate  term leases
which  are  accounted  for  as  operating  leases.  Minimum  rents  are  recognized  on the  straight-line  method.
Percentage  rent is accrued  when  lessees'  specified  sales  targets  have been met.  Expense  recoveries,  which
include an administrative fee, are recognized as revenue in the period applicable costs are chargeable to tenants.

Depreciation and Amortization

   Buildings,  improvements and equipment,  stated at cost, are depreciated on  straight-line  or  double-declining
balance bases over the estimated  useful lives of the assets that range from 3 to 55 years.  Tenant  allowances and
deferred leasing costs are amortized on a straight-line basis over the lives of the related leases.

Capitalization

   Costs related to the  acquisition,  development,  construction,  and improvement of properties are  capitalized.
Interest costs are  capitalized  until  construction is  substantially  complete.  All properties,  including those
under  construction or development,  are reviewed for impairment on an individual  basis whenever events or changes
in  circumstances  indicate that their carrying  value may not be  recoverable.  Impairment is recognized  when the
sum of expected  cash flows  (undiscounted  and without  interest  charges) is less than the carrying  value of the
property.  To the extent  impairment  has occurred,  the excess  carrying  value of the property over its estimated
fair value is charged to income.

Cash and Cash Equivalents

   Cash  equivalents  consist  of  highly  liquid  investments  with a  maturity  of 90 days or less at the date of
purchase.

Deferred Charges

   Direct  financing  costs are deferred and amortized  over the terms of the related  agreements as a component of
interest  expense.  Direct costs related to leasing  activities are  capitalized  and amortized on a  straight-line
basis over the lives of the related  leases.  All other  deferred  charges are amortized on a  straight-line  basis
over the terms of the agreements to which they relate.

Interest Rate Hedging Agreements

   Effective  January 1, 2001, the  Unconsolidated  Joint  Ventures  adopted SFAS 133,  "Accounting  for Derivative
Instruments and Hedging  Activities" and its related  amendments and  interpretations,  which establish  accounting
and  reporting  standards for  derivative  instruments  (Note 2). All  derivatives,  whether  designated in hedging
relationships  or not, are recorded on the balance  sheet at fair value.  If a derivative  is  designated as a cash
flow  hedge,  the  effective  portions  of  changes  in the fair  value of the  derivative  are  recorded  in other
comprehensive  income (OCI) and are  recognized  in the income  statement  when the hedged item  affects  earnings.
Ineffective  portions  of changes in the fair value of a cash flow hedge are  recognized  in  earnings  as interest
expense.  For  interest  rate cap  instruments  designated  as cash  flow  hedges,  changes  in the time  value are
excluded from the assessment of hedge effectiveness.

   TRG formally  documents all  relationships  between  hedging  instruments  and hedged items, as well as its risk
management  objectives  and  strategies  for  undertaking  various hedge  transactions.  TRG assesses,  both at the
inception  of the hedge and on an ongoing  basis,  whether the  derivatives  are used in hedging  transactions  are
highly effective in offsetting changes in the cash flows of the hedged items.

                                                          F-35

                             UNCONSOLIDATED JOINT VENTURES OF THE TAUBMAN REALTY GROUP
                                                LIMITED PARTNERSHIP
                                NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

Fair Value of Financial Instruments

   The following methods and assumptions were used to estimate the fair value of financial instruments:

      The  carrying  value of cash and cash  equivalents,  accounts  and notes  receivable,  and  accounts  payable
      approximates fair value due to the short maturity of these instruments.

      The fair value of mortgage  notes and other  notes  payable is  estimated  based on quoted  market  prices if
         available,  or the  amount  the  Unconsolidated  Joint  Ventures  would pay to  terminate  the debt,  with
         prepayment penalties, if any, on the reporting date.

      The fair value of interest  rate hedging  instruments  is the amount the  Unconsolidated  Joint Venture would
         pay or receive to terminate the agreement at the reporting date.

Use of Estimates

   The  preparation of financial  statements in conformity  with accounting  principles  generally  accepted in the
United States of America  requires  management to make estimates and assumptions  that affect the reported  amounts
of  assets  and  liabilities,  disclosure  of  contingent  assets  and  liabilities  at the  date of the  financial
statements,  and the reported  amounts of revenues and expenses during the reporting  period.  Actual results could
differ from those estimates.

Note 2 - Change in Accounting Principle

   The  Unconsolidated  Joint  Ventures  use  derivative  instruments  to manage  exposure to  interest  rate risks
inherent in variable rate debt and  refinancings.  Cap,  swap,  and treasury lock  agreements are routinely used to
meet these  objectives.  The swap  agreement  on the  Dolphin  construction  facility  does not  qualify  for hedge
accounting  although its use is  consistent  with overall risk  management  objectives.  As a result,  Dolphin Mall
recognizes  its share of losses and income  related to this  agreement  in earnings  as the value of the  agreement
changes.

   The initial  adoption of SFAS 133 on January 1, 2001  resulted in a reduction  to income of  approximately  $3.3
million as the cumulative  effect of a change in accounting  principle and a reduction to  accumulated  OCI of $1.6
million.  These amounts  represent the transition  adjustments  necessary to mark interest rate  agreements to fair
value as of January 1, 2001.

   In addition to the transition  adjustments,  unrealized losses of $5.9 million were recognized as a reduction of
earnings  during  the year ended  December  31,  2001,  primarily  due to the  decline  in  interest  rates and the
resulting  decrease in value of interest rate agreements.  Of this amount,  approximately  $5.6 million  represents
the change in value of the Dolphin swap  agreement  and the remainder  represents  the changes in time value of cap
instruments.

   As of December 31,  2001,  $0.7  million of  derivative  losses are  included in  Accumulated  OCI.  This amount
relates to a hedge of the Dolphin Mall  construction  facility  that will be  recognized as a reduction of earnings
through its 2002 maturity date.

Note 3 - Properties

   Properties at December 31, 2001 and 2000, are summarized as follows:

                                                                            2001             2000
                                                                            ----             ----

     Land                                                         $       82,798    $      41,230
     Buildings, improvements and equipment                             1,185,044          663,864
     Construction in process                                              99,240          368,724
                                                                  --------------    -------------
                                                                  $    1,367,082    $   1,073,818
                                                                  ==============    =============

                                                          F-36

                             UNCONSOLIDATED JOINT VENTURES OF THE TAUBMAN REALTY GROUP
                                                LIMITED PARTNERSHIP
                                NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

   Depreciation  expense for 2001, 2000 and 1999 was $36.5 million,  $26.2 million and $26.0 million.  Construction
in process  includes  costs related to the  construction  of The Mall at Millenia as well as  expansions  and other
improvements at various  centers.  Assets under capital lease of $0.1 million and $0.6 million at December 31, 2001
and 2000, respectively, are included in the table above in buildings, improvements and equipment.

   During 2000,  non-cash  investing  activities  included $1.3 million  contributed  to the  Unconsolidated  Joint
Ventures developing  International  Plaza,  Dolphin Mall, and The Mall at Millenia.  This amount primarily consists
of the net book value of project costs expended prior to the creation of the joint ventures.  Additionally,  during
2001 and 2000,  non-cash additions to properties of $54.4 million and $15.5 million,  respectively,  were recorded,
representing accrued construction costs of new centers and expansions.

Note 4 - Deferred Charges and Other Assets

   Deferred charges and other assets at December 31, 2001 and 2000 are summarized as follows:

                                                                            2001             2000
                                                                            ----             ----

     Leasing                                                          $   26,568       $   25,252
     Accumulated amortization                                            (11,000)         (10,040)
                                                                      ----------       ----------
                                                                      $   15,568       $   15,212
     Interest rate instruments                                                              3,351
     Deferred financing, net                                              11,101           14,161
     Other, net                                                            2,621            1,973
                                                                      ----------        ---------
                                                                      $   29,290       $   34,697
                                                                      ==========       ==========

Note 5 - Debt

Mortgage Notes Payable

   Mortgage notes payable at December 31, 2001 and 2000 consists of the following:

                                                                                                      Balance Due
Center                            2001           2000          Interest Rate      Maturity Date       on Maturity
------                            ----           ----          -------------      -------------       -----------

Arizona Mills                $   144,737    $   145,762            7.90%              10/05/10         $   130,419
Cherry Creek                     177,000        177,000            7.68%              08/11/06             171,933
Dolphin Mall                     164,648        116,900        LIBOR + 2.00%          10/06/02             164,648
Fair Oaks                        140,000        140,000            6.60%              04/01/08             140,000
International Plaza              171,555         67,493        LIBOR + 1.90%          11/10/02             171,555
The Mall at Millenia              56,545                       LIBOR + 1.95%          11/01/03              56,545
Stamford Town Center              76,000         76,000        LIBOR + 0.8%           08/10/02              76,000
Westfarms                        100,000        100,000            7.85%              07/01/02             100,000
Westfarms                         55,000         55,000       LIBOR + 1.125%          07/01/02              55,000
Woodland                          66,000         66,000            8.20%              05/15/04              66,000
                             -----------    -----------
                             $ 1,151,485    $   944,155
                             ===========    ===========

   Mortgage  debt is  collateralized  by  properties  with a net book value of $1.1  billion and $0.9 billion as of
December 31, 2001 and 2000.

   The maximum  availability on The Mall at Millenia  construction  facility is $160.4 million.  TRG has guaranteed
the payment of 50% of the principal and interest.  The rate and the amount  guaranteed  may be reduced once certain
performance and valuation criteria are met.  The loan provides for two one-year extension options.

   The maximum  availability  on the Dolphin Mall  construction  facility is $200 million and its rate decreases to
LIBOR plus 1.75% when a certain  coverage ratio is met. TRG has  guaranteed  the payment of 50% of any  outstanding
principal  balance  and  100% of all  accrued  and  unpaid  interest.  The  guaranty  will be  reduced  as  certain
performance conditions are met. The maturity date may be extended one year.

                                                          F-37

                             UNCONSOLIDATED JOINT VENTURES OF THE TAUBMAN REALTY GROUP
                                                LIMITED PARTNERSHIP
                                NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

   The maximum  availability on the International  Plaza  construction  facility is $193.5 million.  The loan has a
one-year  extension  option.  TRG has guaranteed the payment 100% of the principal and interest;  however,  another
investor in the venture has  indemnified  TRG to the extent of 25% of the amounts  guaranteed.  The loan  agreement
provides for  reductions of the rate and the amount  guaranteed  as certain  center  performance  criteria are met.
This guarantee was reduced to 50% in February 2002.

   The Stamford  mortgage may be extended  twice to August 2004.  The Westfarms  mortgages due in 2002 are expected
to be refinanced at maturity.

   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.

   Scheduled principal payments on mortgage debt are as follows as of December 31, 2000:

                            2002                                 568,388
                            2003                                  57,829
                            2004                                  68,350
                            2005                                   4,019
                            2006                                 175,120
                            Thereafter                           277,779
                                                              ----------
                            Total                             $1,151,485
                                                              ==========

Note Payable to Related Party

   During 2000,  the  Unconsolidated  Joint  Venture that is  developing  Dolphin Mall  borrowed  $3.8 million from
TRG. The note payable bore  interest at 16% annually and had no stated  maturity.  In 2001,  the note was converted
to equity with a preferred return of 16%.

Other Notes Payable

   Other notes payable at December 31, 2001 and 2000 consists of the following:

                                                                                 2001       2000
                                                                                 ----       ----
        Notes payable to banks, line of credit,
           interest at prime (4.75% at December 31, 2001),
           maximum borrowings available up to $5.5 million
           to fund tenant loans, allowances and buyouts
           and working capital, due various dates through 2006               $   2,656   $   2,914
                                                                             =========   =========

Interest Expense

   Interest paid on mortgages and other notes payable in 2001,  2000 and 1999, net of amounts  capitalized of $14.7
million,  $13.3  million,  and $2.5  million,  approximated  $61.0  million,  $58.8  million,  and  $59.7  million,
respectively.

Extraordinary Items

   During the years ended December 31, 2000 and 1999, joint ventures  recognized  extraordinary  charges related to
the  extinguishment of debt,  primarily  consisting of prepayment  premiums and the writeoff of deferred  financing
costs.

                                                          F-38

                             UNCONSOLIDATED JOINT VENTURES OF THE TAUBMAN REALTY GROUP
                                                LIMITED PARTNERSHIP
                                NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

Fair Value of Debt Instruments

   The estimated fair values of financial instruments at December 31, 2001 and 2000 are as follows:

                                                                         December 31
                                         ----------------------------------------------------------------------
                                                         2001                                  2000
                                         ----------------------------------------------------------------------
                                             Carrying              Fair             Carrying            Fair
                                               Value               Value              Value             Value
                                         ----------------------------------       -----------------------------
Mortgage notes payable                     $1,151,485          $1,220,018            $944,155        $1,007,650
Other notes payable                             2,656               2,656               6,692             6,692
Interest rate instruments:
  In a receivable position                                                              3,351               217
  In a payable position                         6,668               6,668                                 1,807

Note 6 - Leases and Other Commitments

   Shopping  center space is leased to tenants and certain  anchors  pursuant to lease  agreements.  Tenant  leases
typically  provide for  guaranteed  minimum rent,  percentage  rent,  and other charges to cover certain  operating
costs.  Future minimum rent under operating leases in effect at December 31, 2001 for operating  centers,  assuming
no new or renegotiated leases or option extensions on anchor agreements, is summarized as follows:

                                 2002                  $      161,398
                                 2003                         153,625
                                 2004                         145,270
                                 2005                         133,769
                                 2006                         122,925
                                 Thereafter                   482,456

   One  Unconsolidated  Joint  Venture,  as lessee,  has a ground  lease  expiring  in 2083 with its Joint  Venture
Partner.  Rental  payments  under the lease were $2.0  million in 2001,  2000 and 1999.  TRG is entitled to receive
preferential  distributions  equal to 75% of each payment.  Approximately 25% of the ground lease payments over the
term of the lease,  on a  straight-line  basis,  are  recognized  as ground rent  expense,  with 75% of the current
payment accounted for as a distribution to the Joint Venture Partner.

   The  Unconsolidated  Joint Venture that owns  International  Plaza is the lessee under a ground lease  agreement
that expires in 2080. The lease  requires  annual  payments of  approximately  $0.1 million and additional  rentals
based on the  leasable  area of the center as defined in the  agreement;  such  additional  rentals were $49,000 in
2001.

   The following is a schedule of future minimum rental payments required under operating leases:

                                 2002                     $     2,392
                                 2003                           2,783
                                 2004                           2,884
                                 2005                           2,884
                                 2006                           2,884
                                 Thereafter                   694,442

Capital Lease Obligations

   Certain Unconsolidated Joint Ventures have entered into lease agreements for property improvements with
remaining  lease terms through 2002;  all of the capital lease  obligation at December 31, 2001 will be paid off in
2002.

                                                          F-39

                             UNCONSOLIDATED JOINT VENTURES OF THE TAUBMAN REALTY GROUP
                                                LIMITED PARTNERSHIP
                                NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

Special Tax Assessment

   Dolphin Mall is  subject to annual special tax assessments for certain  infrastructure  improvements  related to
the property.  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  $2.4 million.  A portion of these
assessments is expected to be recovered from tenants.

Note 7 - Transactions with Affiliates

   Charges from the Manager under various agreements were as follows for the years ended December 31:

                                                                         2001             2000              1999
                                                                         ----             ----              ----

        Management and leasing services                               $16,770          $14,759           $16,721
        Security and maintenance services                               6,442            6,702             7,653
        Development services                                            6,458           11,298             5,935
                                                                        -----           ------             -----
                                                                      $29,670          $32,759           $30,309
                                                                      =======          =======           =======

   Certain  entities   related   to  TRG or  its   joint   venture  partners  provided  management,   leasing   and
development  services to Arizona Mills,  L.L.C., Dolphin Mall  Associates Limited  Partnership, and  Forbes Taubman
Orlando L.L.C.  Charges from these entities were $5.6 million, $4.0 million,  and  $4.2 million in 2001,  2000, and
1999, respectively.

   Westfarms  previously  loaned  $2.4  million to one of its Joint  Venture  Partners  to  purchase a portion of a
deceased  Joint Venture  Partner's  interest.  The note bore interest at  approximately  7.9% and required  monthly
principal  payments of $25  thousand,  plus accrued  interest.  The balance was paid off in 2001.  Interest  income
related to the loan was approximately $0.1 million in 2000 and 1999.

   Another related party transaction is described in Note  5.

Note 8 - New Accounting Principle

   In October  2001,  the Financial  Accounting  Standards  Board issued  Statement  No. 144,  "Accounting  for the
Impairment  or Disposal of  Long-Lived  Assets",  which  replaced  FASB  Statement  No.  121,  "Accounting  for the
Impairment  of  Long-Lived  Assets and for  Long-Lived  Assets to Be  Disposed  Of."  Statement  144  broadens  the
reporting of discontinued  operations to include  disposals of operating  components;  each of TRG's investments in
an operating  center is such a component.  The  provisions of Statement 144 are effective for financial  statements
issued for fiscal years  beginning  after  December 15, 2001 and  generally  are to be applied  prospectively.  The
Statement is not expected to have a material  effect on the  financial  condition or results of  operations  of the
Unconsolidated  Joint Ventures;  however,  if TRG were to dispose of a center,  the center's  results of operations
would have to be separately disclosed as discontinued operations in the financial statements.

                                                          F-40

                                                                                                        Schedule II
                             UNCONSOLIDATED JOINT VENTURES OF THE TAUBMAN REALTY GROUP
                                                LIMITED PARTNERSHIP
                                         Valuation and Qualifying Accounts
                               For the years ended December 31, 2001, 2000, and 1999
                                                  (in thousands)

                                                                Additions
                                                       ----------------------------
                                          Balance at    Charged to    Charged to                                    Balance
                                           beginning     costs and      other                                       at end
                                            of year      expenses      accounts     Write-offs     Transfers, net  of year
                                           ---------    ----------    ----------   ------------    --------------  --------

Year ended December 31, 2001:
  Allowance for doubtful receivables        $1,628         3,803            0          (1,850)          (225)        $3,356
                                            ======         =====         ====          ======           ====         ======

Year ended December 31, 2000:
  Allowance for doubtful receivables        $1,588         2,644            0          (1,892)          (712)(1)     $1,628
                                            ======         =====         ====          ======           ====         ======

Year ended December 31, 1999:
  Allowance for doubtful receivables        $  255         1,822            0            (489)             0         $1,588
                                            ======         =====         ====          ======           ====         ======

(1)  Subsequent to July 31, 2000, the accounts of Lakeside and Twelve Oaks Mall are no longer included in these
     combined financial statements.

                                                          F-41

                                                                                                                                                                Schedule III
                                                  UNCONSOLIDATED JOINT VENTURES OF THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP
                                                                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                                                                              December 31, 2001
                                                                               (in thousands)

                                        Initial Cost                         Gross Amount at Which
                                         to Company           Cost           Carried at Close of Period
                                   ----------------------   Capitalized     ----------------------------      Accumulated     Total                    Date of
                                            Buildings and   Subsequent                                        Depreciation   Cost Net                 Completion of   Depreciable
                                   Land      Improvements   to Acquisition     Land       BI&E       Total        (A/D)       of A/D   Encumbrances   Construction         Life
                                   ----      ------------   --------------     ----       ----       -----    -------------  --------  ------------  ---------------  -----------

Taubman Shopping Centers:
  Arizona Mills, Tempe, AZ       $ 22,017       $163,618        $10,013      $22,017   $173,631   $195,648      $28,944    $166,704     $144,737         1997          50 Years
  Cherry Creek, Denver, CO             55         99,625         58,807           55    158,432    158,487       51,595     106,892      177,000         1990          40 Years
  Dolphin Mall, Miami, FL          35,942        261,725                      35,942    261,725    297,667        6,580     291,087      164,648         2001          50 Years
  Fair Oaks, Fairfax, VA            7,667         36,043         46,903        7,667     82,946     90,613       33,725      56,888      140,000         1980          55 Years
  International Plaza, Tampa, FL        0        252,633                           0    252,633    252,633        2,836     249,797      171,555         2001          50 Years
  Stamford Town Center,
   Stamford, CT                     1,977         43,176         18,390        1,977     61,566     63,543       31,469      32,074       76,000         1982          40 Years
  Westfarms, Farmington, CT         5,287         38,638        108,623        5,287    147,261    152,548       43,528     109,020      155,000         1974          34 Years
  Woodland, Grand Rapids, MI        2,367         19,078         28,636        3,231     46,850     50,081       21,524      28,557       66,000         1968          33 Years
Other Properties:
  Peripheral land                   6,622              0              0        6,622          0      6,622            0       6,622            0
  Construction in Process           5,318         88,033          5,889        5,318     93,922     99,240            0      99,240       56,545
                                  -------     ----------       --------      ------- ---------- ----------     --------  ----------   ----------
TOTAL                             $87,252     $1,002,569       $277,261      $88,116 $1,278,966 $1,367,082(1)  $220,201  $1,146,881   $1,151,485
                                  =======     ==========       ========      ======= ========== ==========     ========  ==========   ==========

The changes in total real estate assets for the years ended December 31, 2001, 2000, and 1999 are as follows:

                                                                                                 2001              2000           1999
                                                                                                 ----              ----           ----

                                                     Balance, beginning of year             $1,073,818       $  942,248       $ 769,665
                                                       Improvements                            299,541          239,191          79,298
                                                       Disposals                                (6,277)          (4,472)         (6,162)
                                                       Transfers In                                               1,318 (2)      99,447 (4)
                                                       Transfers Out                                           (104,467)(3)
                                                                                            ----------       -----------       --------
                                                     Balance, end of year                   $1,367,082       $1,073,818        $942,248
                                                                                            ==========       ==========        ========

The changes in accumulated  depreciation  and  amortization  for the years ended December 31, 2001,  2000, and 1999
are as follows:

                                                                                                 2001              2000           1999
                                                                                                 ----              ----           ----

                                                     Balance, beginning of year             $(189,644)       $ (217,402)      $(197,516)
                                                       Depreciation for year                  (36,515)          (26,156)        (25,958)
                                                       Disposals                                5,958             4,472           6,072
                                                       Transfers Out                                             49,442 (3)
                                                                                            ---------        ----------       ---------

                                                     Balance, end of year                   $(220,201)       $ (189,644)      $(217,402)
                                                                                            =========        ==========       =========

(1)  The unaudited aggregate cost for federal income tax purposes as of December 31, 2001 was $1.513 billion.
(2)  Includes  costs  transferred  relating  to The Mall at  Millenia,  which  became an  Unconsolidated  Joint Venture in 2000.
(3)  Subsequent  to July 31,  2000,  the  accounts of Lakeside  and Twelve Oaks Mall are no longer  included in these combined financial statements.
(4)  Includes costs transferred relating to International Plaza and Dolphin Mall, which became Unconsolidated Joint Ventures in 1999.

                                                          F-42

SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the  Securities  Act of 1934,  the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

                                                     TAUBMAN CENTERS, INC.

         Date:    March 29, 2002            By:      /s/ Robert S. Taubman
                                                     ----------------------------------------------------------------------
                                                            Robert S.  Taubman,  Chairman of the Board,  President,
                                                            and Chief  Executive Officer

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,  this report has been signed below
by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

            Signature                                              Title                               Date
            ---------                                              -----                               ----

/s/ Robert S. Taubman                                Chairman of the Board, President,             March 29, 2002
---------------------------                                                                        --------------
Robert S. Taubman                                  Chief Executive Officer, and Director

/s/ Lisa A. Payne                                        Executive Vice President,                 March 29, 2002
---------------------------                                                                        --------------
Lisa A. Payne                            Chief Financial and Administrative Officer, and Director

/s/ William S. Taubman                                   Executive Vice President,                 March 29, 2002
---------------------------                                                                        --------------
William S. Taubman                                             and Director

/s/ Esther R. Blum                                 Senior Vice President, Controller and           March 29, 2002
---------------------------                                                                        --------------
Esther R. Blum                                           Chief Accounting Officer

*                                                                Director                          March 29, 2002
---------------------------                                                                        --------------
Graham Allison

*                                                                Director                          March 29, 2002
---------------------------                                                                        --------------
Allan J. Bloostein

*                                                                Director                          March 29, 2002
---------------------------                                                                        --------------
Jerome A. Chazen

*                                                                Director                          March 29, 2002
---------------------------                                                                        --------------
S. Parker Gilbert

*                                                                Director                          March 29, 2002
---------------------------                                                                        --------------
Peter Karmanos, Jr.

*By:        /s/ Lisa A. Payne
            ---------------------------------------------------------
            Lisa A. Payne, as
            Attorney-in-Fact

                       SECURED REVOLVING CREDIT AGREEMENT

                          dated as of November 1, 2001

                                      among

                  THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP,
                                  as Borrower,

                          THE LENDERS SIGNATORY HERETO,
                                 each as a Bank,

                                       and

                             BANK OF AMERICA, N.A.,
                             as Administrative Agent

                                      with

                         BANC OF AMERICA SECURITIES LLC,
                     as Lead Arranger and Sole Book Manager,

                         PNC BANK, NATIONAL ASSOCIATION,
                              as Syndication Agent,

                     COMERICA BANK, FLEET NATIONAL BANK AND
              BAYERISCHE HYPO- UND VEREINSBANK AG, NEW YORK BRANCH,
                            as Documentation Agents,

                                       and

             COMMERZBANK AG, NEW YORK AND GRAND CAYMAN BRANCHES AND
                         DRESDNER BANK AG, NEW YORK AND
                    GRAND CAYMAN BRANCHES, as Managing Agents

     SECURED REVOLVING CREDIT AGREEMENT ("this  Agreement") dated as of November
1,  2001  among  THE  TAUBMAN  REALTY  GROUP  LIMITED  PARTNERSHIP,   a  limited
partnership  organized  and  existing  under the laws of the  State of  Delaware
("Borrower"),  BANK OF AMERICA,  N.A., as administrative agent for the Banks (in
such capacity,  together with its  successors in such capacity,  "Administrative
Agent"),  and BANK OF  AMERICA,  N.A.  (in its  individual  capacity  and not as
Administrative  Agent,  "BAC") and the other lenders  signatory hereto (BAC, the
other  lenders  signatory  hereto and such other  lenders  who from time to time
become Banks pursuant to Section 2.19,  Section 3.07 or 12.05, each a "Bank" and
collectively, the "Banks").

     Borrower desires that the Banks extend credit as provided  herein,  and the
Banks are prepared to extend such credit.  Accordingly,  Borrower, each Bank and
Administrative Agent agree as follows:

                                   ARTICLE I

                                DEFINITIONS; ETC.

     SECTION 1.01.Definitions.  As used in this Agreement the following  terms
have the following meanings:

     "Acceptance Letter" has the meaning specified in Section 2.19.

     "Accordion Amount" has the meaning specified in Section 2.19.

     "Actions" has the meaning specified in Section 5.04.

     "Additional Costs" has the meaning specified in Section 3.01.

     "Administrative Agent" has the meaning specified in the preamble.

     "Administrative Agent's Office" means Administrative Agent's office located
as set forth on its signature  page hereof,  or such other address in the United
States as  Administrative  Agent may  designate  by notice to  Borrower  and the
Banks.

     "Affected Bank" has the meaning specified in Section 3.07.

     "Affected Loan" has the meaning specified in Section 3.04.

     "Affiliate"  means,  with respect to any Person (the "first  Person"),  any
other Person (1) which directly or indirectly controls,  or is controlled by, or
is  under  common  control  with  the  first  Person  or (2)  10% or more of the
beneficial  interest  in which is directly  or  indirectly  owned or held by the
first Person.  The term "control" means the possession,  directly or indirectly,
of the power,  alone,  to direct or cause the  direction of the  management  and
policies of a Person,  whether  through the ownership of voting  securities,  by
contract, or otherwise.

     "Agreement" means this Secured Revolving Credit Agreement.

     "Anchors" means, for each Property,  those department store companies which
own, occupy and/or operate the related Anchor Stores.

     "Anchor Stores" means, for each Property,  those department  stores located
on parcels contiguous to such Property which,  together with the Improvements on
such Property,  are being operated as an integrated  shopping center pursuant to
the REA.

     "Applicable  Lending Office" means, for each Bank and for its LIBOR Loan or
Base  Rate  Loan,  as  applicable,  the  lending  office  of such Bank (or of an
Affiliate of such Bank)  designated as such on its  signature  page hereof or in
the applicable Assignment and Assumption Agreement, or such other office of such
Bank  (or of an  Affiliate  of such  Bank) as such  Bank  may from  time to time
specify to  Administrative  Agent and  Borrower as the office by which its LIBOR
Loan or Base Rate Loan, as applicable, is to be made and maintained.

     "Applicable  Margin" means with respect to Base Rate Loans and LIBOR Loans,
the respective  rates per annum  determined,  at any time, based on the Property
Debt Yield at the time,  in  accordance  with the table below (any change in the
Property Debt Yield,  including any change pursuant to Section 2.05,  causing it
to move to a different range on said table shall effect an immediate  change (as
of the date that financial results are or are required to be reported (whichever
is  earlier)  pursuant  to this  Agreement  for the  calendar  quarter for which
Property  Debt  Yield  is being  determined  or,  in the  case of an  adjustment
pursuant  to Section  2.05,  as of the date  specified  in said  Section) in the
Applicable Margin).

-------------------------- ------------------------------- ---------------------------------
                           Applicable Margin for Base Rate Applicable Margin for LIBOR Loans
Property Debt YieldLoans (% per annum)(% per annum)
-------------------------- ------------------------------- ---------------------------------
Greater than 15%                        -0-                                0.90
-------------------------- ------------------------------- ---------------------------------
Less than or equal to 15%               -0-                                1.05
-------------------------- ------------------------------- ---------------------------------

     "Assignee" and "Consented  Assignee" have the respective meanings specified
in Section 12.05.

     "Assignment  and Assumption  Agreement"  means an Assignment and Assumption
Agreement,  substantially  in the form of  EXHIBIT A,  pursuant  to which a Bank
assigns and an Assignee  assumes rights and  obligations in accordance  with the
terms of this Agreement.

     "Authorization Letter" means a letter agreement executed by Borrower in the
form of EXHIBIT B.

     "BAC" has the meaning specified in the preamble.

     "Bank" and "Banks" have the respective meanings specified in the preamble.

     "Bank Parties" means Administrative Agent and the Banks.

                                        2

     "Banking  Day"  means  (1)  any  day on  which  commercial  banks  are  not
authorized  or required to close in Chicago,  Illinois and (2) whenever such day
relates to a LIBOR Loan,  an Interest  Period with  respect to a LIBOR Loan,  or
notice with respect to a LIBOR Loan, a day on which dealings in Dollar  deposits
are also  carried  out in the  London  interbank  market  and banks are open for
business in London.

     "Banks' L/C Fee Rate" has the meaning specified in Section 2.17(g).

     "Bank Reply Period" " has the meaning specified in Section 12.02.

     "Base Rate" means,  for any day,  the higher of (1) the Federal  Funds Rate
for such day plus 0.50% or (2) the Prime Rate for such day.

     "Base Rate Loan" means all or any portion  (as the context  requires)  of a
Bank's Loan which shall accrue  interest at a rate determined in relation to the
Base Rate.

     "Borrower" has the meaning specified in the preamble.

     "Borrower's  Accountants" means Deloitte & Touche, or such other accounting
firm(s) selected by Borrower and reasonably acceptable to the Required Banks.

     "Capital  Lease" means any lease which has been or should be capitalized on
the books of the lessee in accordance with GAAP.

     "Capitalization  Value" means,  at any time, the sum of (1) Combined EBITDA
for the twelve  (12)-month  period ending with the most recently  ended calendar
quarter, capitalized at an annual rate equal to 8.00%, (2) Borrower's beneficial
share of  unrestricted  Cash  and Cash  Equivalents  (i.  e.,  Cash and Cash - -
Equivalents  that are not pledged or the use of which is not  restricted  by the
terms of any document or agreement) of Borrower and its Consolidated  Businesses
and UJVs and (3) without  duplication,  the cost basis of properties of Borrower
under  development.  For the purposes of this definition,  in no event shall (x)
properties under development constitute in excess of 15% of Capitalization Value
or (y)  leasing  commissions  payable by third  parties  and/or  management  and
development fees contribute to greater than 5% of Capitalization Value.

     "Cash  and  Cash  Equivalents"   means  (1)  cash,  (2)  marketable  direct
obligations issued or unconditionally guaranteed by the United States government
and backed by the full faith and credit of the  United  States  government,  (3)
domestic and  Eurodollar  certificates  of deposit and time  deposits,  bankers'
acceptances  and floating rate  certificates of deposit issued by any commercial
bank  organized  under the Laws of the United  States,  any state thereof or the
District of  Columbia,  any foreign  bank,  or its  branches or agencies  (fully
protected against currency fluctuations), which, at the time of acquisition, are
rated  A-1 or  better by S&P or P-1 or  better  by  Moody's,  provided  that the
maturities  thereof  shall not exceed one (1) year from the date of  acquisition
and (4) shares of Fidelity  Institutional  Money Market Fund or comparable money
market funds.

     "Closing  Date"  means the date this  Agreement  has been  executed  by all
parties.

                                        3

     "Code" means the Internal Revenue Code of 1986.

     "Collateral" means the Mortgaged Property under each Mortgage and any other
collateral now or hereafter given for the Loans.

     "Combined  EBITDA"  means,  for any  period  of  time,  (1)  revenues  less
operating costs (including general and administrative expenses) before interest,
depreciation   and   amortization   and  unusual  items  for  Borrower  and  its
Consolidated Businesses (including, without limitation, non-recurring items such
as gains or losses from asset sales) and  adjusted to  eliminate  the effects of
straight  lining of rents plus (2)  Borrower's  beneficial  interest in revenues
less operating costs  (including  general and  administrative  expenses)  before
interest,  depreciation and  amortization  and unusual items (after  eliminating
appropriate intercompany amounts) (including, without limitation,  non-recurring
items such as gains or losses from asset sales) and  adjusted to  eliminate  the
effects of straight lining of rents applicable to each of the UJVs. For purposes
of this  definition,  gains or losses from  peripheral land sales, to the extent
such gains or losses total less than $5,000,000 in any twelve (12)-month period,
shall be treated in  accordance  with the  accounting  principles  reflected  in
Borrower's form 10-K for 2000.

     "Commitment Increase Request" has the meaning specified in Section 2.19.

     "Consolidated   Businesses"  means,  collectively  (1)  each  Affiliate  of
Borrower,  all of the equity  interests of which are, or, under GAAP, are deemed
to be, owned by Borrower and (2) Taub-Co  Management  Inc., The Taubman  Company
Limited Partnership and their respective  Affiliates so long as more than 90% of
the equity  interests in the  entities  referred to in this clause (2) are owned
directly or indirectly by Borrower.

     "Consolidated   Outstanding  Indebtedness"  means,  as  of  any  time,  all
indebtedness  and liability for borrowed money (which shall be deemed to include
obligations as lessee under Capital Leases),  secured or unsecured,  of Borrower
and all  indebtedness and liability for borrowed money (which shall be deemed to
include  obligations  as lessee under  Capital  Leases),  secured or  unsecured,
attributable to Borrower's  beneficial interest in its Consolidated  Businesses,
including  mortgage and other notes payable but excluding any indebtedness which
is  margin  indebtedness  secured  by cash and cash  equivalent  securities,  as
reflected in the TRG Consolidated Financial Statements.

     "Contingent  Liabilities"  means  the  sum of  (1)  those  liabilities,  as
determined  in  accordance  with GAAP,  set forth and  quantified  as contingent
liabilities in the notes to the TRG  Consolidated  Financial  Statements and (2)
contingent liabilities,  other than those described in the foregoing clause (1),
which represent direct payment guaranties of Borrower;provided,however, that
Contingent  Liabilities shall exclude contingent liabilities which represent the
"Other  Party's  Share" of  "Duplicated  Obligations"  (as such quoted terms are
hereinafter defined).  "Duplicated Obligations" means,  collectively,  all those
payment  guaranties  in respect of Debt of UJVs for which  Borrower  and another
party are jointly and  severally  liable,  where the other party is, in the sole
judgment of the Required Banks, capable of satisfying the Other Party's Share of
such obligation;  and "Other Party's Share" means such other party's  fractional
beneficial interest in the UJV in question.

                                        4

     "Continue",  "Continuation"  and  "Continued"  refer  to  the  continuation
pursuant  to  Section  2.13 of a LIBOR  Loan as a LIBOR  Loan from one  Interest
Period to the next Interest Period.

     "Convert",  "Conversion" and "Converted" refer to a conversion  pursuant to
Section  2.13 of a Base Rate Loan into a LIBOR  Loan or a LIBOR Loan into a Base
Rate Loan,  each of which may be  accompanied  by the transfer by a Bank (at its
sole  discretion)  of all or a portion of its Loan from one  Applicable  Lending
Office to another.

     "Declining Bank" has the meaning specified in Section 2.19.

     "Debt" means (1)  indebtedness  or liability for borrowed money, or for the
deferred purchase price of property or services  (including trade  obligations),
(2)  obligations  as lessee under Capital  Leases,  (3) current  liabilities  in
respect of unfunded  vested  benefits under any Plan, (4) obligations in respect
of letters of credit issued for the account of any Person,  (5) all  obligations
arising  under  bankers' or trade  acceptance  facilities,  (6) all  guarantees,
endorsements  (other than for  collection  or deposit in the ordinary  course of
business),  and  other  contingent  obligations  to  purchase  any of the  items
included in this  definition,  to provide funds for payment,  to supply funds to
invest in any Person,  or otherwise to assure a creditor  against loss,  (7) all
obligations  secured by any Lien on property  owned by the Person  whose Debt is
being  measured,  whether or not the  obligations  have been assumed and (8) all
obligations under any agreement providing for contingent  participation or other
hedging  mechanisms  with  respect  to  interest  payable  on any  of the  items
described above in this definition.

     "Default" means any event which with the giving of notice or lapse of time,
or both, would become an Event of Default.

     "Default  Rate"  means a rate per annum  equal to (1) with  respect to Base
Rate Loans, a variable rate 3% above the rate of interest then in effect thereon
(including the  Applicable  Margin) and (2) with respect to LIBOR Loans, a fixed
rate 3%  above  the  rate(s)  of  interest  in  effect  thereon  (including  the
Applicable  Margin)  at the time of  Default  until the end of the then  current
Interest Period therefor and,  thereafter,  a variable rate 3% above the rate of
interest for a Base Rate Loan (including the Applicable Margin).

     "Disapproving Bank" has the meaning specified in Section 2.19.

     "Disposition"  means a sale  (whether  by  assignment,  transfer or Capital
Lease) of an asset.

     "Distributable Cash Flow" means Funds From Operations.

     "Dollars" and the sign "$" mean lawful money of the United States.

     "Elect",  "Election" and "Elected"  refer to election,  if any, by Borrower
pursuant to Section  2.13 to have all or a portion of an advance of the Loans be
outstanding as LIBOR Loans.

     "Engineering  Consultant"  means  Merritt  &  Harris,  Inc.  or other  firm
designated by Administrative Agent from time to time for any Property.

                                        5

     "Environmental  Discharge"  means any discharge or release of any Hazardous
Materials in violation of any applicable Environmental Law.

     "Environmental Law" means any Law relating to pollution or the environment,
including  Laws  relating  to noise or to  emissions,  discharges,  releases  or
threatened releases of Hazardous Materials into the work place, the community or
the  environment,   or  otherwise  relating  to  the  generation,   manufacture,
processing,  distribution,  use,  treatment,  storage,  disposal,  transport  or
handling of Hazardous Materials.

     "Environmental  Notice"  means  any  written  complaint,  order,  citation,
letter,  inquiry,  notice or other  written  communication  from any  Person (1)
affecting  or relating to  Borrower's  or any  Mortgagor's  compliance  with any
Environmental  Law in  connection  with any activity or  operations  at any time
conducted  by Borrower or any  Mortgagor,  (2)  relating  to the  occurrence  or
presence of or exposure to or possible or  threatened  or alleged  occurrence or
presence of or exposure to  Environmental  Discharges or Hazardous  Materials at
any of Borrower's or any Mortgagor's  locations or facilities (including each of
the  Properties),  including,  without  limitation,  (a)  the  existence  of any
contamination  or possible or threatened  contamination  at any such location or
facility  and  (b)  remediation  of any  Environmental  Discharge  or  Hazardous
Materials  at any such  location or facility or any part thereof or (3) relating
to any violation or alleged violation of any relevant Environmental Law.

     "ERISA"  means  the  Employee  Retirement  Income  Security  Act  of  1974,
including any rules and regulations promulgated thereunder.

     "ERISA  Affiliate"  means any  corporation  or trade or business which is a
member of the same  controlled  group of  organizations  (within  the meaning of
Section 414(b) of the Code) as Borrower or is under common  control  (within the
meaning of Section  414(c) of the Code) with  Borrower or any  Mortgagor  or any
organization  which is required to be treated as a single employer with Borrower
or any Mortgagor under Sections 414(m) or 414(o) of the Code.

     "Event of Default" has the meaning specified in Section 9.01.

     "Existing Bank" has the meaning specified in Section 2.19.

     "Existing Credit Facility" means that certain  $200,000,000 credit facility
made pursuant to the Secured  Revolving Credit  Agreement,  dated as of June 24,
1999, among Borrower, the lenders signatory thereto and UBS AG, Stamford Branch,
as  Administrative  Agent, as modified by letter  agreements  dated as of May 6,
2000 and as of September 14, 2001, respectively.

     "Extension Option" has the meaning specified in Section 2.18.

     "Facility Fee" has the meaning specified in Section 2.08.

     "Fairlane"  means the  parcel(s)  of real  property  owned by Fairlane  LLC
located in Dearborn, Michigan, together with the Improvements thereon.

                                        6

     "Fairlane LLC" means Fairlane Town Center LLC, a Michigan limited liability
company  of which  Borrower  is the  sole  member  and the  owner,  directly  or
indirectly, of a 100% beneficial interest.

     "Federal Funds Rate" means, for any day, the rate per annum (expressed on a
360-day  basis of  calculation)  equal to the  weighted  average of the rates on
overnight federal funds transactions as published by the Federal Reserve Bank of
New York for such day  provided  that (1) if such day is not a Banking  Day, the
Federal Funds Rate for such day shall be such rate on such  transactions  on the
immediately preceding Banking Day as so published on the next succeeding Banking
Day and (2) if no such rate is so published on such next succeeding Banking Day,
the Federal  Funds Rate for such day shall be the average of the rates quoted by
three (3)  Federal  Funds  brokers to  Administrative  Agent on such day on such
transactions.

     "Fiscal Year" means each period from January 1 to December 31.

     "Fixed  Charges"  means,  for any period of time,  the sum of (1)  Interest
Expense,  (2)  dividends  payable  on  preferred  equity  interests  and (3) all
scheduled  principal  payments made or required to be made during such period on
Debt of Borrower and that attributable to Borrower's  beneficial interest in its
Consolidated  Business  and  UJVs,excluding,however,  balloon  payments  of
principal due upon the stated maturity of any such Debt.

     "Funds  From  Operations"  means,  for any  period of time,  net  income of
Borrower and its Consolidated Businesses, as determined in accordance with GAAP,
excluding  gains (or losses) from debt  restructuring  and sales of property and
without taking into account  straight-lining of rents, plus depreciation related
to real  estate and  amortization,  less  amounts  distributed  by  Borrower  as
preferred  distributions,  and after adjustments to reflect  Borrower's pro rata
share of UJVs (which will be calculated to reflect Funds From  Operations on the
same basis).  For purposes of this  definition,  gains or losses from peripheral
land sales, to the extent such gains or losses total less than $5,000,000 in any
twelve  (12)-month  period,  shall be treated in accordance  with the accounting
principles reflected in Borrower's form 10-K for 2000.

     "GAAP" means generally accepted accounting  principles in the United States
as in effect from time to time, applied on a basis consistent with those used in
the preparation of the financial  statements referred to in Section 5.13 (except
for changes concurred in by Borrower's Accountants).

     "Good Faith  Contest"  means the contest of an item if (1) in the case of a
contest of taxes or similar charges  regarding any Property or the  Improvements
thereon,  Borrower has given Administrative Agent prompt notice thereof, (2) the
item is diligently contested in good faith, and, if appropriate,  by proceedings
timely  instituted,  (3) adequate  reserves are established  with respect to the
contested  item, (4) during the period of such contest,  the  enforcement of any
contested item is  effectively  stayed and (5) the failure to pay or comply with
the contested item during the period of the contest is not likely to result in a
Material Adverse Change.

     "Governmental  Approvals"  means  any  authorization,   consent,  approval,
license, permit, certification,  or exemption of, registration or filing with or
report or notice to, any Governmental Authority.

                                        7

     "Governmental Authority" means any nation or government, any state or other
political subdivision thereof, and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.

     "Guaranty" means the joint and several Guaranty of Payment,  dated the date
hereof, of Borrower's  obligations  hereunder and under the Notes, from Fairlane
LLC and TOLLC to the Banks,  and  including  any  guaranty  of said  obligations
executed  and  delivered by a Person who becomes a Mortgagor  subsequent  to the
date hereof pursuant to the provisions of Section 12.06.

     "Hazardous   Materials"   means  any   pollutant,   effluents,   emissions,
contaminants, toxic or hazardous wastes or substances, as any of those terms are
defined from time to time in or for the  purposes of any relevant  Environmental
Law, including asbestos fibers and friable asbestos,  polychlorinated biphenyls,
and any petroleum or hydrocarbon-based products or derivatives.

     "Improvements" means, for each Property,  all improvements now or hereafter
located thereon, other than improvements owned by tenants or utility companies.

     "Indemnified Party" has the meaning specified in Section 12.04.

     "Indemnity"  means,  for each Property,  an agreement from Borrower and the
applicable  Mortgagor whereby,  among other things, the Banks and Administrative
Agent are  indemnified  regarding  Hazardous  Materials,  and including any such
agreement  executed  and  delivered  by  Borrower  and a Person  who  becomes  a
Mortgagor  subsequent to the date hereof  pursuant to the  provisions of Section
12.06.

     "Initial Advance" means the first advance of proceeds of the Loans.

     "Interest Expense" means, for any period of time, the consolidated interest
expense (without deduction of consolidated  interest income) of Borrower and its
Consolidated  Businesses,  including,  without limitation or duplication (or, to
the extent not so included, with the addition of), (1) the portion of any rental
obligation  in respect of any Capital  Lease  obligation  allocable  to interest
expense in accordance with GAAP, (2) the amortization of Debt discounts, (3) any
payments or receipts  (other than  up-front  fees) with respect to interest rate
swap  or  similar  agreements,  (4) any  dividends  attributable  to any  equity
security  which may be converted into a debt security of Borrower at any time or
is  mandatorily  redeemable  for cash within  twenty (20) years from its initial
issuance  and (5) the  interest  expense and items listed in clauses (1) through
(4) above  applicable to each of the UJVs  multiplied  by Borrower's  respective
beneficial  interests in the UJVs (it being  understood that the items listed in
clauses (1), (2) and (3) above shall be considered part of Interest Expense even
if, due to a change in GAAP,  such items would no longer be considered  interest
expense under GAAP).

     "Interest  Period"  means,  with  respect  to any LIBOR  Loan,  the  period
commencing on the date the same is advanced,  converted from a Base Rate Loan or
Continued,  as the case may be, and ending,  as Borrower may select  pursuant to
Section 2.06, on the numerically  corresponding day in the first,  second, third
(or, if available to all of the Banks,  the fourth,  sixth or twelfth)  calendar
month thereafter (it being understood,  however,  that Interest Periods may have
durations  which are several days longer or shorter than the  aforesaid  monthly
periods,  subject to

                                        8

availability to all of the Banks and Administrative  Agent's consent),  provided
that, in any case, each such Interest Period which commences on the last Banking
Day of a  calendar  month  (or on any  day for  which  there  is no  numerically
corresponding day in the appropriate subsequent calendar month) shall end on the
last Banking Day of the appropriate calendar month.

     "Investment" has the meaning specified in Section 7.02.

     "Law" means any federal,  state or local statute,  law,  rule,  regulation,
ordinance,  order,  code, or rule of common law, now or hereafter in effect, and
any  judicial  or  administrative   interpretation  thereof  by  a  Governmental
Authority or otherwise,  including any judicial or administrative order, consent
decree or judgment.

     "Lead Arranger" means Banc of America Securities LLC.

     "Letter of Credit" has the meaning specified in Section 2.17(a).

     "Leverage  Ratio"  means the ratio,  expressed  as a  percentage,  of Total
Outstanding Indebtedness to Capitalization Value.

     "LIBOR Base Rate" means,  with respect to any Interest Period pertaining to
a LIBOR  Loan,  the rate per  annum  that  appears  on Dow  Jones  Page  3750 at
approximately  11:00 a.m.  (London  time) on the date (the "LIBOR  Determination
Date") two (2) Banking  Days prior to the first day of the  applicable  Interest
Period, for amounts comparable to the LIBOR Loan in question for the same period
of time as such Interest  Period,  or, if such rate does not appear on Dow Jones
Page  3750  as  of   approximately   11:00  a.m.  (London  time)  on  the  LIBOR
Determination  Date, the rate for deposits in Dollars for a period comparable to
the applicable  Interest Period,  as determined by  Administrative  Agent acting
reasonably.  For  purposes of the  foregoing  definition,  "Dow Jones Page 3750"
means the display designated as "Page 3750" on the Dow Jones Markets Service (or
such other page as may replace Page 3750 on that  service or such other  service
as may be  nominated  by the British  Bankers'  Association  as the  information
vendor for the  purpose of  displaying  British  Bankers'  Association  Interest
Settlement Rates for Dollar deposits).

     "LIBOR  Interest  Rate"  means,  for  any  LIBOR  Loan,  a rate  per  annum
determined by Administrative  Agent to be equal to the quotient of (1) the LIBOR
Base Rate for such LIBOR Loan for the Interest  Period  therefor  divided by (2)
one minus the LIBOR  Reserve  Requirement  for such LIBOR Loan for such Interest
Period.

     "LIBOR  Loan" means all or any portion  (as the  context  requires)  of any
Bank's Loan which shall  accrue  interest at rate(s)  determined  in relation to
LIBOR Interest Rate(s).

     "LIBOR Reserve  Requirement"  means,  for any LIBOR Loan, the rate at which
reserves  (including  any  marginal,  supplemental  or emergency  reserves)  are
actually  required to be  maintained  during the Interest  Period for such LIBOR
Loan  under   Regulation  D  by  the  applicable   Bank  against   "Eurocurrency
liabilities" (as such term is used in Regulation D). Without limiting the effect
of the  foregoing,  the LIBOR Reserve  Requirement  shall also reflect any other
reserves  actually  required  to be  maintained  by any  Bank by  reason  of any
Regulatory  Change  against  (1) any  category  of  liabilities  which  includes
deposits  by  reference  to which the LIBOR  Base  Rate is

                                        9

to be  determined  as  provided in the  definition  of "LIBOR Base Rate" in this
Section 1.01 or (2) any category of  extensions  of credit or other assets which
include  loans the interest  rate on which is  determined  on the basis of rates
referred to in said definition of "LIBOR Base Rate".

     "Lien"  means any  mortgage,  deed of  trust,  pledge,  security  interest,
hypothecation,  assignment for collateral purposes,  deposit  arrangement,  lien
(statutory  or  other),  or other  security  agreement  or charge of any kind or
nature  whatsoever  of any  third  party  (excluding  any  right of  setoff  but
including,  without  limitation,  any conditional  sale or other title retention
agreement,  any financing lease having substantially the same economic effect as
any of the  foregoing,  and the  filing  of any  financing  statement  under the
Uniform Commercial Code or comparable Law of any jurisdiction to evidence any of
the foregoing).

     "Loan" and "Loans" have the respective meanings specified in Section 2.01.

     "Loan Commitment"  means, with respect to each Bank, the obligation to make
a Loan in the principal  amount set forth below or in the applicable  Assignment
and  Assumption  Agreement,  as such amount may be modified from time to time in
accordance with the provisions of Section 2.11, 2.19, 3.07, 12.05 or 12.06:

  Bank                                                           Loan Commitment
  ----                                                           ---------------

  BAC                                                            $ 27,000,000

  PNC Bank, National Association                                   27,000,000

  Comerica Bank                                                    27,000,000

  Fleet National Bank                                              27,000,000

  Bayerische Hypo- und Vereinsbank AG, New York Branch             27,000,000

  Commerzbank AG, New York and Grand Cayman  Branches              25,000,000

  Dresdner Bank AG, New York and Grand Cayman Branches             25,000,000

  Bayerische Landesbank                                            20,000,000

  Bank One, Michigan                                               20,000,000

  LaSalle Bank National Association                                20,000,000

  KeyBank National Association                                     20,000,000

  Landesbank Hessen-Thuringen Girozentrale                         10,000,000

                                                                 $275,000,000
                                                                 ============

                                       10

     "Loan  Documents"  means this  Agreement,  the  Notes,  the  Guaranty,  the
Mortgage and related  Uniform  Commercial  Code  financing  statements  for each
Property,  the Indemnity for each  Property,  the  Authorization  Letter and the
Solvency Certificates.

     "Major  Lease"  means  a  lease   demising  5,000  SFGLA  or  more  of  the
Improvements on any Property.

     "Material Adverse Change" means either (1) a material adverse change in the
status of the business, results of operations,  financial condition, property or
prospects  of  Borrower  or any  Mortgagor  or (2) any  event or  occurrence  of
whatever  nature  which is likely to (x) have a material  adverse  effect on the
ability of Borrower or any Mortgagor to perform its  obligations  under the Loan
Documents  or  (y)  create,  in  the  sole  and  absolute  judgment  (reasonably
exercised) of Administrative Agent, a material risk of sale or forfeiture of any
of the Mortgaged  Property (other than an immaterial  portion thereof) under any
Mortgage or otherwise  materially impair any of the Mortgaged Property under any
Mortgage or the Banks' rights therein.

     "Material Affiliate" means the material Affiliates of Borrower which own or
lease  operating  shopping  centers  or  shopping  centers  under  construction,
together with (or excluding) any Affiliates of Borrower which are hereafter from
time to time reasonably determined by Administrative Agent to be material (or no
longer  material),  upon notice to Borrower  and the Banks,  based upon the most
recent TRG Consolidated Financial Statements.

     "Maturity Date" means November 1, 2004,  subject to extension in accordance
with Section 2.18.

     "Minority Interest" has the meaning specified in Section 7.02.

     "Moody's" means Moody's Investors Service, Inc.

     "Mortgage"  means,  for each  Property,  the  Mortgage  (or Deed of Trust),
Assignment  of Leases and Rents and Security  Agreement in respect  thereof from
the applicable  Mortgagor for the benefit of Administrative  Agent, as agent for
the Banks, to secure the payment and performance of the Obligations.

     "Mortgaged Property" means, for each Property,  the applicable  Mortgagor's
interest  in the  Property,  the  Improvements  thereon  and all other  property
constituting  the  "Mortgaged  Property",  as said quoted term is defined in the
applicable Mortgage.

     "Mortgagor"  means,  with  respect to Twelve Oaks,  TOLLC;  with respect to
Fairlane,  Fairlane  LLC; and with respect to any other  property that becomes a
Property  pursuant to the  provisions  of Section  12.06,  the owner thereof who
executes and delivers a Mortgage  encumbering  such Property as required by said
Section.

     "Mortgagor Financial Statement" means, for each Mortgagor,  a balance sheet
and related statement of operations,  accumulated  deficiency in assets and cash
flows,  and footnotes  thereto,  of such Mortgagor,  prepared in accordance with
GAAP.

     "Mortgagor Partners" has the meaning specified in Section 11.02(b).

                                       11

     "Multiemployer Plan" means a Plan defined as such in Section 3(37) of ERISA
to which  contributions  have been made by Borrower or any ERISA  Affiliate  and
which is covered by Title IV of ERISA.

     "New Bank" has the meaning specified in Section 2.19.

     "New Note" has the meaning specified in Section 2.19.

     "Net Worth" means the excess of Capitalization Value over Total Outstanding
Indebtedness.

     "Non-Excluded Taxes" has the meaning specified in Section 12.10.

     "Note" and "Notes" have the respective meanings specified in Section 2.09.

     "Notice to Extend" has the meaning specified in Section 2.18.

     "Obligations"  means  each and  every  obligation,  promise,  covenant  and
agreement of Borrower and Mortgagors,  now or hereafter  existing,  contained in
this  Agreement,  the Notes and any of the other  Loan  Documents,  whether  for
principal,  reimbursement  obligations,  interest, fees, expenses, late charges,
indemnities or otherwise, and any amendments, supplements,  extensions, renewals
or  replacements  of any of said  documents,  including  but not limited to, all
indebtedness,  obligations  and  liabilities  (and all  increases  or  additions
thereto) of Borrower or any  Mortgagor to  Administrative  Agent or any Bank now
existing or hereafter  incurred  under or arising out of or in  connection  with
this  Agreement,  the Notes,  the other Loan  Documents,  and any  documents  or
instruments  executed in connection  therewith;  in each case whether  direct or
indirect, joint or several, absolute or contingent,  liquidated or unliquidated,
now or hereafter existing, renewed or restructured,  whether or not from time to
time decreased or extinguished  and later  increased,  created or incurred,  and
including all indebtedness of Borrower or any Mortgagor under any instrument now
or hereafter evidencing or securing any of the foregoing.

     "Outstanding Percentage" has the meaning specified in Section 2.19.

     "Parent" means, with respect to any Bank, any Person controlling such Bank.

     "Participant" and "Participation" have the respective meanings specified in
Section 12.05.

     "Payor" has the meaning specified in Section 10.12.

     "PBGC"  means the  Pension  Benefit  Guaranty  Corporation  and any  entity
succeeding to any or all of its functions under ERISA.

     "Person" means an individual,  partnership,  corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.

                                       12

     "Plan" means any employee  benefit or other plan established or maintained,
or to which  contributions  have been made,  by Borrower,  any  Mortgagor or any
ERISA  Affiliate  and which is covered by Title IV of ERISA or to which  Section
412 of the Code applies.

     "Premises  Documents"  means, for each Property,  the REA for such Property
and the other "Premises  Documents," as such term is defined in the Mortgage for
such Property.

     "presence",  when used in connection  with any  Environmental  Discharge or
Hazardous  Materials,  means and  includes  presence,  generation,  manufacture,
installation,   treatment,  use,  storage,  handling,   repair,   encapsulation,
disposal, transportation, spill, discharge and release.

     "Prime Rate" means that rate of interest from time to time announced by BAC
at its  principal  office  located in  Charlotte,  North  Carolina  as its prime
commercial lending rate.

     "Pro Rata Share" means,  for purposes of this Agreement and with respect to
each Bank, a fraction,  the numerator of which is the amount of such Bank's Loan
Commitment and the denominator of which is the Total Loan Commitment.

     "Prohibited Transaction" means any transaction proscribed by Section 406 of
ERISA or Section  4975 of the Code as to which no  statutory  or  administrative
exemption applies.

     "Property" means, respectively, each of Twelve Oaks, Fairlane and any other
property  as may be added as a Property  pursuant to the  provisions  of Section
12.06, excluding, however, any Property released pursuant to said Section.

     "Property Approval Request" has the meaning specified in Section 2.19.

     "Property Debt Yield" means, for any calendar quarter, the ratio (expressed
as a percentage) of (1) Property EBITDA for the twelve  (12)-month period ending
with such calendar  quarter to (2) the outstanding  principal  balance under the
Notes  plus the total  outstanding  amount of Letters of Credit as of the end of
such calendar quarter.

     "Property EBITDA" means that portion of Combined EBITDA attributable to the
Properties.

     "REA" means,  for each Property,  any reciprocal  easement and operating or
similar  agreement by and among the Mortgagor and the Anchors (together with any
agreements   supplemental   or  incidental   thereto)   pursuant  to  which  the
Improvements  and the related  Anchor Stores are being operated as an integrated
regional  shopping  center.  The  REA for  each  Property  is more  particularly
described in the Mortgage for such Property.

     "Regulation D" and "Regulation U" mean,  respectively,  Regulations D and U
of the Board of Governors of the Federal Reserve System, or any similar Law from
time to time in effect.

                                       13

     "Regulatory  Change" means,  with respect to any Bank, any change after the
date of this  Agreement in United States  federal,  state,  municipal or foreign
laws or  regulations  (including  Regulation  D) or the adoption or making after
such date of any interpretations,  directives or requests applying to a class of
banks  including  such  Bank of or under  any  United  States,  federal,  state,
municipal  or foreign  laws or  regulations  (whether or not having the force of
law) by any  court  or  governmental  or  monetary  authority  charged  with the
interpretation or administration thereof.

     "Related Entity" means, as to any Person, (1) any Affiliate of such Person;
(2) any  other  Person  into  which,  or with  which,  such  Person  is  merged,
consolidated or reorganized,  or that is otherwise a successor to such Person by
operation of law, or which  acquires all or  substantially  all of the assets of
such Person; (3) any other Person that is a successor to the business operations
of such  Person and engages in  substantially  the same  activities;  or (4) any
Affiliate of the Persons  described  in clauses (2) and (3) of this  definition.
For purposes of this definition,  the provisions of clause (2) of the definition
of Affiliate shall be disregarded.

     "Relevant Documents" has the meaning specified in Section 11.02.

     "Reportable  Event" means any of the events set forth in Section 4043(c) of
ERISA.

     "Required  Banks"  means at any  time the  Banks  having  Loan  Commitments
aggregating  at least 66-2/3% of the aggregate  amount of all Loan  Commitments;
provided,however,  that  during  the  existence  of an Event of  Default,  the
"Required  Banks"  shall  be the  Banks  holding  at least  66-2/3%  of the then
aggregate unpaid principal amount of the Loans.

     "Required Payment" has the meaning specified in Section 10.12.

     "Replacement  Bank" and "Replacement  Notice" have the respective  meanings
specified in Section 3.07.

     "Restricted Payment" has the meaning specified in Section 8.01(5).

     "Secured Indebtedness" means that portion of Total Outstanding Indebtedness
that is secured.

     "SFGLA" means square feet of gross leaseable area.

     "Shortfall" has the meaning specified in Section 2.19.

     "Solvency  Certificate"  means a certificate in  substantially  the form of
EXHIBIT E.

     "Solvent"  means,  when used with respect to any Person,  that (1) the fair
value of the property of such Person,  on a going concern basis, is greater than
the total  amount of  liabilities  (including,  without  limitation,  contingent
liabilities)  of such Person,  (2) the present fair saleable value of the assets
of such Person,  on a going concern basis, is not less than the amount that will
be required to pay the probable  liabilities of such Person on its debts as they
become  absolute and  matured,  (3) such Person does not intend to, and does not
believe that it will, incur

                                       14

debts or  liabilities  beyond  such  Person's  ability  to pay as such debts and
liabilities mature, (4) such Person is not engaged in business or a transaction,
and is not about to engage in business or a transaction, for which such Person's
property  would   constitute   unreasonably   small  capital  after  giving  due
consideration to the prevailing practice in the industry in which such Person is
engaged  and (5) such  Person  has  sufficient  resources,  provided  that  such
resources are prudently utilized,  to satisfy all of such Person's  obligations.
Contingent  liabilities will be computed at the amount that, in light of all the
facts and  circumstances  existing at such time,  represents the amount that can
reasonably be expected to become an actual or matured liability.

     "S&P"  means  Standard  &  Poor's  Ratings  Services,  a  division  of  The
McGraw-Hill Companies.

     "Substitute  Bank" and "Substitution  Notice" have the respective  meanings
specified in Section 2.19.

     "Supplemental Fee Letter" means that certain letter agreement, dated August
10, 2001, among BAC, Lead Arranger and Borrower.

     "Supplemental Notes" has the meaning specified in Section 2.19.

     "TCI" means  Taubman  Centers,  Inc.,  a Michigan  corporation,  Borrower's
managing general partner.

     "TCI Financial Statements" means the consolidated balance sheet and related
consolidated statement of operations,  accumulated deficiency in assets and cash
flows, and footnotes thereto, of TCI, prepared in accordance with GAAP.

     "Title  Insurer"  means,  for each  Property,  the  issuer(s)  of the title
insurance policy(ies) insuring the Mortgage thereon.

     "TOLLC" means Twelve Oaks Mall, LLC, a Michigan limited  liability  company
of which Borrower is the sole member and the owner, directly or indirectly, of a
100% beneficial interest.

     "Total Loan  Commitment"  means the sum of the Loan  Commitments of all the
Banks.

     "Total Outstanding Indebtedness" means the sum, without duplication, of (1)
Consolidated  Outstanding   Indebtedness,   (2)  TRG's  Share  of  UJV  Combined
Outstanding Indebtedness and (3) Contingent Liabilities.

     "TRG  Consolidated  Financial  Statements"  means the consolidated  balance
sheet and related consolidated  statement of operations,  accumulated deficiency
in assets and cash  flows,  and  footnotes  thereto,  of  Borrower,  prepared in
accordance with GAAP.

     "TRG Partners" has the meaning specified in Section 11.02(a).

                                       15

     "TRG's Share of UJV Combined Outstanding Indebtedness" means the sum of the
indebtedness  of each  of the  UJVs  contributing  to UJV  Combined  Outstanding
Indebtedness  multiplied by Borrower's  respective  beneficial interests in each
such UJV.

     "Twelve Oaks" means the  parcel(s) of real property  owned by TOLLC located
in Novi, Michigan, together with the Improvements thereon.

     "UJV  Combined  Outstanding  Indebtedness"  means,  as  of  any  time,  all
indebtedness  and liability for borrowed money (which shall be deemed to include
obligations as lessee under Capital Leases),  secured or unsecured, of the UJVs,
including  mortgage and other notes payable but excluding any indebtedness which
is  margin  indebtedness  secured  by cash and cash  equivalent  securities,  as
reflected in the balance sheets of each of the UJVs, prepared in accordance with
GAAP.

     "UJVs" means the  unconsolidated  joint  ventures in which  Borrower owns a
beneficial  interest and which are  accounted for under the equity method in the
TRG Consolidated Financial Statements.

     "United States" and "U.S." mean The United States of America.

     SECTION 1.02.Accounting  Terms.  All  accounting  terms not  specifically
defined  herein shall be construed in  accordance  with GAAP,  and all financial
data required to be delivered  hereunder  shall be prepared in  accordance  with
GAAP.

     SECTION 1.03.Computation  of Time Periods.  Except as otherwise  provided
herein,  in this  Agreement,  in the  computation  of  periods  of  time  from a
specified  date to a later  specified  date,  the word  "from"  means  "from and
including" and words "to" and "until" each means "to but excluding".

     SECTION  1.04.Rules of  Construction.  Except as  otherwise  provided  or
indicated,  when  used in  this  Agreement  (1)  "or"  is not  exclusive,  (2) a
reference to a Law includes any  amendment,  modification  or supplement  to, or
replacement  of, such Law,  (3) a reference to a Person  includes its  permitted
successors  and permitted  assigns,  (4) all  references  to the singular  shall
include the plural andviceversa,  (5) a reference to an agreement,  instrument
or document shall include such agreement, instrument or document as the same may
be amended,  modified or  supplemented  from time to time in accordance with its
terms and as permitted by the Loan  Documents,  (6) all  references to Articles,
Sections,  Exhibits or  Schedules  shall be to  Articles  and  Sections  of, and
Exhibits and Schedules to, this Agreement, (7) "hereunder",  "herein",  "hereof"
and the  like  refer  to this  Agreement  as a whole  and (8) all  Exhibits  and
Schedules to this Agreement shall be incorporated into this Agreement.

                                   ARTICLE II

                                    THE LOANS

     SECTION  2.01.The  Loans.  Subject  to the terms and  conditions  of this
Agreement,  each of the Banks severally  agrees to make a loan to Borrower (each
such loan by a Bank, a "Loan"; such loans,  collectively,  the "Loans") pursuant
to which each Bank shall from

                                       16

time to time advance and re-advance to Borrower an amount equal to the excess of
the  amount of such  Bank's  Loan  Commitment  over the  amount of all  previous
advances made by such Bank under its Loan  Commitment  which remain unpaid.  For
purposes of the immediately  preceding sentence,  a Bank's Pro Rata Share of the
amount of outstanding  Letters of Credit shall be deemed to be advanced.  Within
the limits set forth  herein,  Borrower  may borrow from time to time under this
Section  2.01 and prepay from time to time  pursuant to Section  2.10  (subject,
however,  to the  restrictions  on  prepayment  set forth in such  Section)  and
thereafter re-borrow pursuant to this Section 2.01.

     The Loans may be outstanding as (1) Base Rate Loans, (2) LIBOR Loans or (3)
a  combination   of  the   foregoing,   as  Borrower   shall  elect  and  notify
Administrative  Agent in accordance  with Section 2.15.  The LIBOR Loan and Base
Rate Loan of each Bank shall be  maintained  at such Bank's  Applicable  Lending
Office for its LIBOR Loan and Base Rate Loan, respectively.

     The obligations of the Banks under this Agreement are several,  and no Bank
shall be responsible  for the failure of any other Bank to make any advance of a
Loan to be made by such other Bank. However, the failure of any Bank to make any
advance of the Loan to be made by it  hereunder on the date  specified  therefor
shall not  relieve any other Bank of its  obligation  to make any advance of its
Loan specified hereby to be made on such date.

     SECTION  2.02.Purpose.  Borrower  shall use the proceeds of the Loans for
general  partnership  purposes of Borrower and its  Consolidated  Businesses and
UJVs,  including costs incurred in connection with acquisitions.  All or part of
the Initial  Advance  shall be used to repay all sums owing  under the  Existing
Credit  Facility and to  refinance  the  existing  indebtedness  relating to the
Properties.  In no event  shall  proceeds  of the Loans be used for any  illegal
purpose or for the purpose, whether immediate, incidental or ultimate, of buying
or carrying "margin stock" within the meaning of Regulation U.

     SECTION 2.03.Advances,  Generally.  The Initial Advance shall be made upon
satisfaction  of the conditions set forth in Section 4.01.  Subsequent  advances
shall be made no more frequently than weekly upon satisfaction of the conditions
set forth in Section 4.02. The amount of each advance  subsequent to the Initial
Advance  shall  be in  the  minimum  amount  of  $2,000,000  (unless  less  than
$2,000,000  is available  for  disbursement  pursuant to the terms hereof at the
time of any  subsequent  advance,  in which case the  amount of such  subsequent
advance shall be equal to such remaining availability) and in integral multiples
of $100,000 above such amount.

     SECTION  2.04.Procedures   for  Advances.   Borrower   shall  submit  to
Administrative  Agent a  request  for  each  advance  hereunder,  in the form of
EXHIBIT G, stating the amount  requested  and  certifying  the purpose for which
such advance is to be used, no later than 12:00 Noon (Chicago  time) on the date
(x) in the case of LIBOR Loans,  three (3) Banking Days,  and (y) in the case of
Base Rate  Loans,  one (1)  Banking  Day prior to the date the  advance is to be
made.  Administrative  Agent,  upon its  receipt and  approval of the  requisite
documents  for the  advance,  will so notify the Banks either by telephone or by
facsimile. Not later than 10:00 a.m. (Chicago time) on the date of each advance,
each Bank  shall,  through  its  Applicable  Lending  Office and  subject to the
conditions of this Agreement, make the amount to be advanced

                                       17

by it on such day available to Administrative  Agent, at Administrative  Agent's
Office and in  immediately  available  funds for the  account of  Borrower.  The
amount so received by Administrative  Agent shall,  subject to the conditions of
this Agreement,  be made available to Borrower,  in immediately available funds,
by Administrative Agent's either, at Borrower's option,  crediting an account of
Borrower  designated by Borrower and  maintained  with  Administrative  Agent at
Administrative  Agent's  Office or wiring  said  amount to  another  account  of
Borrower designated by it in its request for advance.

     SECTION 2.05.Additional Conditions to Advances.  Each advance of the Loans
shall be subject,  in addition to the other limitations and conditions set forth
herein, to, at Administrative Agent's request, Administrative Agent's receipt of
a certificate,  of the sort required by paragraph  (3)(b) of Section 6.09, which
shall  demonstrate  Borrower's  compliance,  as of the end of the most  recently
ended calendar  quarter for which  financial  results are required  hereunder to
have been  reported by Borrower (and taking into account  pro-forma  adjustments
for all  acquisitions  and  Dispositions  subsequent  to the end of such quarter
required to be reported  pursuant to paragraph  (6) of Section  6.09),  with all
covenants  enumerated in said  paragraph  (3)(b),  assuming that the amount that
will be outstanding  under the Loans following the making of the advance that is
being  requested  was  outstanding  as of the end of such  most  recently  ended
calendar quarter.

     For purposes of the definition of "Applicable  Margin" in Section 1.01, the
Property Debt Yield shall be adjusted in accordance with the foregoing  covenant
compliance  calculations  as of the date of each  advance  of the Loans and upon
each acquisition and Disposition  required to be reported  pursuant to paragraph
(6) of Section 6.09.

     SECTION 2.06.Interest Periods;  Renewals.  In the case of the LIBOR Loans,
Borrower shall select an Interest  Period of any duration in accordance with the
definition  of  Interest  Period  in  Section  1.01,  subject  to the  following
limitations:  (1) no Interest Period may extend beyond the Maturity Date, (2) if
an Interest  Period would end on a day which is not a Banking Day, such Interest
Period shall be extended to the next Banking Day,  unless such Banking Day would
fall in the next calendar  month,  in which event such Interest Period shall end
on the immediately preceding Banking Day and (3) only five (5) discrete segments
of a Bank's Loan bearing  interest at a LIBOR  Interest  Rate,  for a designated
Interest Period, pursuant to a particular Election,  Conversion or Continuation,
may be  outstanding  at any one time (each  such  segment  of each  Bank's  Loan
corresponding to a proportionate segment of each of the other Banks' Loans).

     Upon notice to Administrative  Agent as provided in Section 2.15,  Borrower
may Continue  any LIBOR Loan on the last day of the Interest  Period of the same
or different  duration in accordance  with the  limitations  provided  above. If
Borrower  shall  fail  to  give  notice  to  Administrative   Agent  of  such  a
Continuation, such LIBOR Loan shall automatically become a Base Rate Loan on the
last day of the current Interest Period.

     SECTION 2.07.Interest. Borrower shall pay interest to Administrative Agent
for the account of the applicable Bank on the  outstanding and unpaid  principal
amount of the Loans, at a rate per annum as follows:  (1) for Base Rate Loans at
a rate equal to the Base Rate plus the Applicable Margin and (2) for LIBOR Loans
at a rate equal to the applicable

                                       18

LIBOR Interest Rate plus the Applicable Margin. In addition,  from and after the
occurrence of an Event of Default,  the outstanding and unpaid  principal amount
of the Loans shall bear interest at the Default Rate.

     The interest rate on Base Rate Loans shall change, without notice or demand
of any kind,  effective  as of the day when the Base Rate  changes.  Interest on
Base Rate Loans and LIBOR Loans shall not exceed the  maximum  amount  permitted
under applicable law. Interest shall be calculated for the actual number of days
elapsed on the basis of, in the case of Base Rate Loans and LIBOR  Loans,  three
hundred sixty (360) days.

     Accrued  interest shall be due and payable in arrears upon and with respect
to any payment or  prepayment  of principal and on the first Banking Day of each
calendar month;  provided,  however,  that interest accruing at
the Default Rate shall be due and payable on demand.

     SECTION 2.08.Fees. (a) Borrower shall,  during the term of the Loans, pay
to  Administrative  Agent  for the  account  of each  Bank a  facility  fee (the
"Facility Fee") computed on the daily Loan Commitment of such Bank (irrespective
of usage), at a rate per annum equal to 0.15%, calculated on the basis of a year
of three hundred  sixty (360) days for the actual  number of days  elapsed.  The
accrued facility fee shall be due and payable  quarterly in arrears on the first
Banking Day of February,  May,  August and November of each year,  commencing on
the first such date  after the  Closing  Date,  and upon the  Maturity  Date (as
stated,  by  acceleration  or  otherwise)  or  earlier  termination  of the Loan
Commitments.

     (b) Borrower  shall pay to  Administrative  Agent,  for the accounts of the
parties specified therein, the fees provided for, on the dates specified, in the
Supplemental Fee Letter.

     SECTION 2.09.Notes. The Loan made by each Bank under this Agreement shall
be evidenced by, and repaid with interest in accordance  with, a promissory note
of Borrower in the form of EXHIBIT C duly completed and executed by Borrower, in
a principal  amount equal to such Bank's Loan  Commitment,  payable to such Bank
for the account of its  Applicable  Lending  Office (each such note, as the same
may hereafter be amended, modified,  extended,  severed, assigned,  substituted,
renewed or restated from time to time, including any substitute note(s) pursuant
to Section 2.19,  3.07 or 12.05,  a "Note";  all such notes,  collectively,  the
"Notes").  The Notes shall  mature,  and all  outstanding  principal and accrued
interest and other sums thereunder  shall be paid in full, on the Maturity Date,
as the same may be accelerated.

     Each Bank is hereby  authorized  by  Borrower  to endorse  on the  schedule
attached to the Notes held by it, the amount of each  advance,  and each payment
of  principal  received by such Bank for the account of its  Applicable  Lending
Office(s) on account of its Loan,  which  endorsement  shall,  in the absence of
manifest error, be conclusive as to the outstanding  balance of the Loan made by
such Bank.  The failure by any Bank to make such  notations  with respect to its
Loan or each  advance  or  payment  shall  not  limit or  otherwise  affect  the
obligations of Borrower under this Agreement,  the Notes or otherwise in respect
of the Loans.

     In case of any loss,  theft,  destruction or mutilation of any Bank's Note,
Borrower  shall,  upon its receipt of an affidavit of an officer of such Bank as
to  such  loss,   theft,   destruction

                                       19

or  mutilation  and  an  appropriate  indemnification  (in  form  and  substance
reasonably  acceptable to Borrower),  execute and deliver a replacement  Note to
such Bank in the same principal  amount and otherwise of like tenor as the lost,
stolen, destroyed or mutilated Note.

     SECTION  2.10.Prepayments.  Borrower  may,  upon at least one (1) Banking
Day's notice to Administrative  Agent in the case of the Base Rate Loans, and at
least two (2) Banking Days' notice to Administrative  Agent in the case of LIBOR
Loans,  prepay the Loans,  provided that (1) any partial  prepayment  under this
Section shall be in integral  multiples of  $1,000,000,  (2) a LIBOR Loan may be
prepaid only on the last day of the  applicable  Interest  Period for such LIBOR
Loan and (3) each  prepayment  under this  Section  shall  include all  interest
accrued on the amount of principal prepaid through the date of prepayment.

     SECTION 2.11.Termination of Commitments.  (a) At any time, Borrower shall
have the right,  without  premium  or  penalty,  to  terminate  any unused  Loan
Commitments,  in whole or in part, from time to time, provided that (1) Borrower
shall give notice of each such termination to Administrative  Agent,  specifying
the amount of the  termination,  no later then 10:00 a.m.  (Chicago time) on the
date which is fifteen (15) days prior to the  effectiveness  of such termination
(a copy of which notice  Administrative Agent shall promptly send to each Bank),
(2) the Loan  Commitments  of each of the Banks must be  terminated  ratably and
simultaneously with those of the other Banks and (3) each partial termination of
the Loan Commitments as a whole (and  corresponding  reduction of the Total Loan
Commitment) shall be in an integral multiple of $1,000,000.

     (b) The Loan Commitments, to the extent terminated, may not be reinstated.

     SECTION  2.12. Method of Payment.  Borrower  shall make each payment under
this  Agreement and under the Notes not later than 11:00 a.m.  (Chicago time) on
the date when due in Dollars to Administrative  Agent at Administrative  Agent's
Office in immediately available funds.  Administrative Agent will thereafter, on
the day of its receipt of each such  payment,  cause to be  distributed  to each
Bank (1) such Bank's  appropriate  share (based upon the respective  outstanding
principal  amounts and rate(s) of interest  under the Notes of the Banks) of the
payments of principal  and interest in like funds for the account of such Bank's
Applicable  Lending Office and (2) fees payable to such Bank in accordance  with
the terms of this Agreement.  In the event payments  received by  Administrative
Agent from Borrower  before 11:00 a.m.  (Chicago  time) are not  distributed  by
Administrative Agent to a Bank on the day of its receipt thereof, Administrative
Agent shall pay interest on such Bank's appropriate share thereof at the Federal
Funds  Rate  until   distributed  to  such  Bank.   Borrower  hereby  authorizes
Administrative  Agent and the Banks, if and to the extent payment by Borrower is
not made when due under this  Agreement or under the Notes,  to charge from time
to time against any account Borrower maintains with Administrative  Agent or any
Bank any amount so due to Administrative Agent and/or the Banks.

     Except to the extent otherwise provided herein,  whenever any payment to be
made  under  this  Agreement  or under the Notes is due on any day other  than a
Banking Day, such payment shall be made on the next succeeding  Banking Day, and
such extension of time shall in such case be included in the  computation of the
payment of interest and other fees, as the case may be.

                                       20

     SECTION 2.13.Elections,  Conversions or Continuation of Loans. Subject to
the  provisions of Article III and Sections 2.06 and 2.14,  Borrower  shall have
the right to Elect to have all or a portion of any advance of the Loans be LIBOR
Loans,  to Convert Base Rate Loans into LIBOR Loans, to Convert LIBOR Loans into
Base Rate Loans,  or to Continue LIBOR Loans as LIBOR Loans, at any time or from
time to time, provided that (1) Borrower shall give Administrative  Agent notice
of each such Election,  Conversion or  Continuation  as provided in Section 2.15
and (2) a LIBOR Loan may be Converted  or Continued  only on the last day of the
applicable  Interest  Period for such LIBOR Loan.  Except as otherwise  provided
herein,  each Election,  Continuation and Conversion shall be applicable to each
Bank's Loan in accordance with its Pro Rata Share.

     SECTION 2.14.Minimum Amounts.  With respect to the Loans as a whole, each
Election and each Conversion  shall be in an amount at least equal to $2,000,000
and in integral multiples of $100,000.

     SECTION  2.15. Certain  Notices  Regarding   Elections,   Conversions  and
Continuations  of  Loans.   Notices  by  Borrower  to  Administrative  Agent  of
Elections, Conversions and Continuations of LIBOR Loans shall be irrevocable and
shall be effective only if received by Administrative Agent not later than 12:00
Noon  (Chicago  time) on the  number of  Banking  Days  prior to the date of the
relevant Election, Conversion or Continuation specified below:

                                                                  Number of
Notice                                                        Banking Days Prior
------                                                        ------------------

Conversions into Base Rate Loans                                     one (1)

Elections of, Conversions into or Continuations as, LIBOR Loans      three (3)

Promptly following its receipt of any such notice, Administrative Agent shall so
advise  the Banks  either by  telephone  or by  facsimile.  Each such  notice of
Election  shall  specify the portion of the amount of the advance  that is to be
LIBOR Loans  (subject to Section  2.14) and the duration of the Interest  Period
applicable  thereto  (subject to Section  2.06);  each such notice of Conversion
shall specify the LIBOR Loans or Base Rate Loans to be Converted;  and each such
notice of  Conversion  or  Continuation  shall specify the date of Conversion or
Continuation  (which shall be a Banking  Day),  the amount  thereof  (subject to
Section  2.14)  and the  duration  of the  Interest  Period  applicable  thereto
(subject to Section 2.06). In the event that Borrower fails to Elect to have any
portion of an advance be LIBOR Loans,  the entire  amount of such advance  shall
constitute  Base Rate Loans.  In the event that Borrower fails to Continue LIBOR
Loans within the time period and as  otherwise  provided in this  Section,  such
LIBOR Loans will be automatically Converted into Base Rate Loans on the last day
of the then current applicable Interest Period for such LIBOR Loans.

     SECTION 2.16.Late Payment  Premium.  Borrower  shall,  at  Administrative
Agent's option, pay to Administrative  Agent for the account of the Banks a late
payment  premium in the amount of 4% of any payments of interest under the Loans
made more than fifteen (15) days after the due date thereof,  which shall be due
with any such late payment.

                                       21

     SECTION  2.17.Letters of Credit.  (a) Borrower  may  request,  in lieu of
advances   of   proceeds  of  the  Loans,   that   Administrative   Agent  issue
unconditional,  irrevocable  standby  letters  of credit  (each,  a  "Letter  of
Credit")  for the  account  of  Borrower,  payable  by  sight  drafts,  for such
beneficiaries and with such other terms as Borrower shall specify.

     (b) The amount of any  Letter of Credit  shall not exceed the lesser of (1)
$50,000,000  less the  amount of all other  Letters  of Credit  then  issued and
outstanding or (2) the amount available for disbursement to Borrower  hereunder,
it being  understood  that the  amount  of each  Letter  of  Credit  issued  and
outstanding  shall  effect  a  reduction,  by an  equal  amount,  of the  amount
available for disbursement hereunder as provided in Section 2.01.

     (c) The amount of each  Letter of Credit  shall be  further  subject to the
limitations  applicable to amounts of advances set forth in Section 2.03 and the
procedures  for the  issuance of each Letter of Credit  shall be the same as the
procedures  applicable  to the  making  of  advances  as set  forth in the first
sentence of Section 2.04. Upon  Administrative  Agent's receipt of a request for
the  issuance  of, and upon its  issuance  of, each  Letter of Credit,  it shall
promptly notify each of the Banks.

     (d)  Administrative  Agent's  issuance  of each  Letter of Credit  shall be
subject  to  Borrower's   satisfaction  of  all  conditions   precedent  to  its
entitlement to an advance of proceeds of the Loans.

     (e) Each Letter of Credit  shall have an  expiration  date of no later than
the  earlier of one (1) month prior to the  Maturity  Date or one (1) year after
the date of its issuance.

     (f) In connection with, and as a further condition to the issuance of, each
Letter of Credit,  Borrower shall execute and deliver to Administrative Agent an
application  for the Letter of Credit on  Administrative  Agent's  standard form
therefor,  together  with such  other  documents,  opinions  and  assurances  as
Administrative Agent shall reasonably require.

     (g) In connection with each Letter of Credit,  Borrower hereby covenants to
pay to  Administrative  Agent the  following  fees,  each  payable  quarterly in
arrears  (on the  first  Banking  Day of each  calendar  quarter  following  the
issuance  of the  Letter of  Credit):  (i) a fee for the  account  of the Banks,
computed daily on the amount of the Letter of Credit issued and outstanding at a
rate per annum equal to the "Banks' L/C Fee Rate" (as  hereinafter  defined) and
(ii) a fee for Administrative Agent's own account,  computed daily on the amount
of the Letter of Credit  issued and  outstanding  at a rate per annum of 0.125%.
For  purposes of this  Agreement,  the "Banks' L/C Fee Rate" shall mean,  at any
time, a rate per annum equal to the  Applicable  Margin for LIBOR  Loans.  It is
understood and agreed that the last installment of the fees provided for in this
paragraph (g) with respect to any  particular  Letter of Credit shall be due and
payable on the first day of the calendar quarter following the return,  undrawn,
or  cancellation  of such  Letter of Credit.  In  addition,  Borrower  shall pay
Administrative Agent's customary  administrative fees and expenses in connection
with the issuance, extension, amendment, drawing and cancellation of all Letters
of Credit.

     (h) Immediately upon notice from Administrative  Agent of any drawing under
a Letter of Credit, each Bank shall,  notwithstanding the existence of a Default
or Event of

                                       22

Default or the  non-satisfaction of any conditions precedent to the making of an
advance of the Loans,  advance  proceeds of its Loan,  in an amount equal to its
Pro Rata Share of such drawing,  which  advance shall be made to  Administrative
Agent to reimburse  Administrative Agent, for its own account, for such drawing.
Each Bank further acknowledges that its obligation to fund its Pro Rata Share of
drawings  under  Letters  of  Credit  as  aforesaid  shall  survive  the  Banks'
termination of this Agreement or enforcement of remedies  hereunder or under the
other Loan  Documents.  In the event that any Loan cannot for any reason be made
on the date otherwise required above (including, without limitation, as a result
of  the  commencement  of  a  proceeding  under  any  applicable  bankruptcy  or
insolvency Law with respect to Borrower or any Mortgagor),  then each Bank shall
purchase  (on or as of the date such Loan would  otherwise  have been made) from
Administrative Agent a participation  interest in any unreimbursed drawing in an
amount equal to its Pro Rata Share of such unreimbursed drawing.

     (i)  Upon the  occurrence  of an Event of  Default  and at the  request  of
Administrative  Agent, Borrower shall (i) deposit with Administrative Agent cash
collateral in the amount of all the  outstanding  Letters of Credit,  which cash
collateral  shall be held by  Administrative  Agent as security  for  Borrower's
obligations  in  connection  with the  Letters  of Credit and (ii)  execute  and
deliver to Administrative  Agent such documents as Administrative Agent requests
to confirm and perfect the assignment of such cash collateral to  Administrative
Agent.

     The parties  hereto  acknowledge  that letter of credit no.  7405743 in the
amount of $3,508,171 issued by Bank of America, N.A., for Borrower's account, to
US Bank  Trust  National  Association  on  September  14,  2001,  as  amended by
amendment  dated  November  2,  2001,  constitutes  a Letter of  Credit  for all
purposes under this Agreement.

     SECTION 2.18.Extension Of Maturity.  Borrower  shall have the option (the
"Extension Option") to extend the original Maturity Date for a period of one (1)
year.  Subject to the  conditions  set forth  below,  Borrower  may exercise the
Extension Option by delivering a notice to  Administrative  Agent between thirty
(30) and ninety  (90) days  prior to the  original  Maturity  Date (a "Notice to
Extend"), stating that Borrower has elected to extend the original Maturity Date
for one (1) year.  Borrower's  right to exercise the  Extension  Option shall be
subject to the following terms and conditions: (i) there shall exist no Event of
Default  on  both  the  date   Borrower   delivers   the  Notice  to  Extend  to
Administrative Agent and on the original Maturity Date, (ii) Borrower shall have
paid, no later than one (1) Banking Day prior to the original  Maturity Date, to
Administrative  Agent, for the account of each Bank, a non-refundable  extension
fee equal to 0.20% of such Bank's Loan  Commitment,  (iii)  Borrower shall be in
compliance  with the covenants  contained in Articles VII and VIII, as evidenced
by a certificate  from Borrower of the sort required by paragraph (3) of Section
6.09 (based on financial  results for the most recent calendar quarter for which
Borrower  is  required  to report  financial  results)  and (iv) the Total  Loan
Commitment does not exceed 65% of the "as is" value of the relevant  Mortgagor's
interest in the Property or Properties  then securing the Loans (as reflected in
an update to the  appraisal(s)  delivered  pursuant to paragraph  (7) of Section
4.01 or subparagraph (b)(vi) of Section 12.06, as the case may be, which updated
appraisal(s) shall be commissioned by Administrative Agent at Borrower's expense
and shall be  satisfactory  to the Required  Banks),  it being  understood  that
Borrower  may  comply  with  the  condition  set  forth in this  clause  (iv) by
exercising its right to terminate  unused Loan  Commitments  in accordance  with
Section 2.11.

                                       23

     SECTION 2.19.Additional  Loan  Commitments.  (a) At any time prior to the
second anniversary of the date of this Agreement,  Borrower may request that (i)
the Banks increase their  respective Loan  Commitments  and/or (ii) New Banks be
procured,  so as to increase the Total Loan Commitment by an aggregate amount of
up to $25,000,000  (the  "Accordion  Amount"),  all as provided in this Section.
Such  increase  shall be  conditioned  on  Borrower's  addition of a Property as
security for the payment and  performance of the  Obligations in accordance with
Section   12.06.   Borrower   shall  make  such  request  by  giving  notice  to
Administrative  Agent,  which notice shall  identify the property  that Borrower
proposes to add as a Property and shall be  accompanied  by such  documents  and
information  with  respect  to  such  property  as  Administrative  Agent  shall
reasonably request. Upon receipt of such notice,  documents and information from
Borrower,  Administrative  Agent  shall  promptly  send  copies  thereof to each
then-existing  Bank (each, an "Existing  Bank") and shall request that each Bank
notify  Administrative  Agent as to  whether  or not it agrees  to  accept  such
property  (the  "Property  Approval  Request")  and  whether or not it agrees to
increase its Loan Commitment by its Pro Rata Share of the Accordion  Amount upon
the addition of such  property as a Property in  accordance  with Section  12.06
(the "Commitment  Increase  Request").  Each Bank shall have a period of fifteen
(15)  business  days from its receipt of the Property  Approval  Request and the
Commitment Increase Request to notify  Administrative  Agent whether or not such
Bank agrees to (i) accept the proposed  property  and/or (ii)  increase its Loan
Commitment as aforesaid. Any Bank that fails to respond to the Property Approval
Request or the Commitment Increase Request within such fifteen (15)-business day
period will be deemed not to have agreed to accept the proposed  property or not
to have agreed to  increase  its Loan  Commitment,  as the case may be. Upon its
receipt  of such  notices  from  all of the  Banks,  and in any  event  upon the
expiration of such fifteen  (15)-business day period,  Administrative Agent will
notify (the "Bank Response Notice") Borrower and the Banks as to (x) which Banks
have  approved  and which  Banks  have not  approved  (or are deemed not to have
approved)  the  proposed  property  and (y) which  Banks have agreed to increase
their  respective Loan  Commitments as aforesaid and which Banks have not agreed
(or are deemed not to have agreed) to increase their respective Loan Commitments
as aforesaid.

          (A) If any Bank (each, a "Disapproving Bank") shall not agree or shall
     be deemed not to have agreed to accept the proposed property, such property
     will not be added as a Property and the proposed increase in the Total Loan
     Commitment will not be consummated,  subject,  however, to Borrower's right
     to substitute  another  financial  institution  for a Disapproving  Bank in
     accordance with the provisions of paragraph (d) below.

          (B) If all Banks agree to accept the  proposed  property and all Banks
     elect to increase  their  respective  Loan  Commitments by amounts equal to
     their  respective  Pro  Rata  Shares  of the  Accordion  Amount,  the  Loan
     Commitment of each Bank will be so increased, and the parties shall proceed
     in accordance with paragraph (b) below.

          (C) If all Banks agree to accept the proposed  property,  but any Bank
     (any such Bank, a  "Declining  Bank") shall not elect or shall be deemed to
     have  elected not to increase its Loan  Commitment  as  aforesaid,  (i) the
     amount of such Declining Bank's Loan Commitment shall be unchanged and (ii)
     Borrower  shall,  at its  option  (to be

                                       24

     promptly  exercised by notice to Administrative  Agent) either (x) withdraw
     its request to add a property and increase  the Total Loan  Commitment,  in
     which  case  the  increase  to  the  Total  Loan  Commitment  will  not  be
     consummated,  (y) accept an  increase  in the Total Loan  Commitment  in an
     amount equal to the Accordion Amount less the Shortfall (as defined below),
     in which case the Banks who agreed to increase their  commitments  shall do
     so and the parties shall proceed in accordance  with paragraph (b) below or
     (z)  request  that  Administrative  Agent (1)  solicit  from the Banks that
     elected to increase their respective Loan Commitments a further increase in
     their Loan  Commitments in an aggregate  amount equal to all or any portion
     of the  aggregate  amount of the  Declining  Banks' Pro Rata  Shares of the
     requested  increase (the "Shortfall")  and/or (2) submit to Borrower a list
     of proposed  syndicate  members that are not then a party to this Agreement
     ("New Banks") to Borrower for its review and approval (such approval not to
     be  unreasonably  withheld  or  delayed)  in  order  to  obtain  additional
     commitments in an amount equal to the Shortfall.  Administrative Agent will
     promptly  undertake the action directed by Borrower.  Administrative  Agent
     will consult with Borrower and Borrower will cooperate with  Administrative
     Agent in the latter's  solicitation of Loan  Commitments from New Banks. If
     any of the Existing Banks agrees to increase its Loan Commitment and/or New
     Banks  agree to make Loan  Commitments,  then the parties  will  proceed in
     accordance with paragraph (b) below.

     (b) In connection with increases to the Loan  Commitments of some or all of
the Existing  Banks as provided in paragraph (a) above,  Borrower  shall execute
supplemental  Notes (the "Supplemental  Notes")  evidencing such increases,  and
Borrower,   Administrative   Agent  and  the  Banks  shall  execute  such  other
confirmatory  modifications  to this  Agreement  as  Administrative  Agent shall
reasonably  request.  In connection with the addition of New Banks as Banks as a
result of  solicitations  by  Administrative  Agent as provided in paragraph (a)
above,  Borrower,  Administrative  Agent  and  each New Bank  shall  execute  an
Acceptance  Letter in the form of EXHIBIT H (an "Acceptance  Letter"),  Borrower
shall  execute  a Note to each New Bank in the  amount  of the New  Bank's  Loan
Commitment (a "New Note") and Borrower, Administrative Agent and the Banks shall
execute such  confirmatory  modifications  to this  Agreement as  Administrative
Agent shall reasonably  request,  whereupon the New Bank shall become,  and have
the rights and  obligations  of, a "Bank",  with a Loan Commitment in the amount
set forth in such Acceptance  Letter.  The Banks shall have no right of approval
with  respect  to a New  Bank's  becoming  a Bank  or  the  amount  of its  Loan
Commitment.  Each  Supplemental  Note and New Note shall constitute a "Note" for
all purposes of this Agreement.

     (c) If at the time a New Bank becomes a Bank (or an Existing Bank increases
its Loan Commitment) pursuant to this Section there is any principal outstanding
under  the  Notes  of the  Existing  Banks,  such New  Bank  (or  Existing  Bank
increasing its Loan Commitment)  shall remit to  Administrative  Agent an amount
equal to the  Outstanding  Percentage (as defined below)  multiplied by the Loan
Commitment of the New Bank (or the amount of the increase in the Loan Commitment
of an Existing  Bank  increasing  its Loan  Commitment),  which  amount shall be
deemed  advanced under the Loan of the New Bank (or the Existing Bank increasing
its Loan Commitment). Administrative Agent shall pay such amount to the Existing
Banks in  accordance  with the Existing  Banks'  respective  Pro Rata Shares (as
calculated  immediately  prior to the admission of the New Bank (or the increase
in an Existing  Bank's  Loan  Commitment)),  and such

                                       25

payment shall effect an automatic reduction of the outstanding principal balance
under the respective  Notes of the Existing Banks. For purposes of this Section,
the  term  "Outstanding  Percentage"  means  the  ratio  of  (i)  the  aggregate
outstanding principal amount under the Notes of the Existing Banks,  immediately
prior to the  admission of the New Bank (or the increase in the Loan  Commitment
of an Existing  Bank),  to (ii) the  aggregate  of the Loan  Commitments  of the
Existing Banks (as increased  pursuant to this Section,  if applicable)  and the
New Bank.

     (d) In the event there is only one Disapproving Bank,  Borrower may, within
thirty (30) days of its receipt of the Bank Response Notice from  Administrative
Agent, give notice (a "Substitution  Notice") to Administrative  Agent (who will
promptly forward a copy thereof to each Bank) of Borrower's intention to replace
the Disapproving Bank with another  financial  institution that would accept the
proposed  property as a Property  (the  "Substitute  Bank")  designated  in such
Substitution Notice.

     If Administrative  Agent shall,  within ten (10) days of its receipt of the
Substitution Notice,  notify Borrower and each Bank in writing that the proposed
Substitute Bank is reasonably  satisfactory to  Administrative  Agent,  then the
Disapproving  Bank shall, so long as no Default or Event of Default shall exist,
assign its Note and all of its rights and  obligations  under this Agreement and
the other Loan Documents to the Substitute  Bank, and the Substitute  Bank shall
assume  all  of  such  rights  and   obligations,   pursuant  to  an  agreement,
substantially in the form of an Assignment and Assumption Agreement, executed by
the  Disapproving  Bank  and  the  Substitute  Bank.  In  connection  with  such
assignment and  assumption,  the Substitute  Bank shall pay to the  Disapproving
Bank an amount equal to the outstanding  principal amount under the Disapproving
Bank's Note and all interest  accrued thereon,  plus all other amounts,  if any,
then due and payable to the  Disapproving  Bank. Upon the effective date of such
assignment  and   assumption   and  the  payment  by  the  Substitute   Bank  to
Administrative  Agent of a fee, for Administrative  Agent's own account,  in the
amount  of  $3,500,  the  Substitute  Bank  shall  become  a Bank  Party to this
Agreement and shall have all the rights and  obligations  of a Bank as set forth
in such Assignment and Assumption Agreement,  and the Disapproving Bank shall be
released from its obligations hereunder, and no further consent or action by any
party shall be required.  Upon the  consummation  of any assignment  pursuant to
this  Section,  a  substitute  Note  shall be issued to the  Substitute  Bank by
Borrower  in  exchange  for the  return of the  Disapproving  Bank's  Note.  The
obligations evidenced by such substitute Note shall constitute "Obligations" for
all purposes of this Agreement and the other Loan Documents and shall be secured
by the Mortgages.  In connection  with  Borrower's  execution of such substitute
Note as aforesaid,  Borrower shall deliver to Administrative Agent such evidence
of the due authorization,  execution and delivery of the substitute Note and any
related  documents  as  Administrative  Agent  may  reasonably  request.  If the
Substitute  Bank is not  incorporated  under the Laws of the United  States or a
state thereof,  it shall,  prior to the first date on which interest or fees are
payable hereunder for its account,  deliver to Borrower and Administrative Agent
certification as to exemption from deduction or withholding of any United States
federal income taxes in accordance with Section 10.13. Borrower,  Administrative
Agent and the Banks shall execute such  modifications  to the Loan  Documents as
shall be reasonably required in connection with and to effectuate the foregoing.

     (e) Notwithstanding the foregoing provision of this Section:

                                       26

          (i)  Borrower  shall have a period of thirty (30) days after such time
     as some or all of the  Existing  Banks have agreed to  increase  their Loan
     Commitments or New Banks have agreed to make Loan Commitments,  as the case
     may be, in which to satisfy the  conditions  precedent to the addition of a
     proposed property as a Property set forth in Section 12.06, and if Borrower
     shall fail to satisfy such  conditions  within such period,  Administrative
     Agent will so notify  Borrower and each of the Banks and such property will
     not be added as a  Property  and the  proposed  increase  in the Total Loan
     Commitment will not be consummated; and

          (ii) if any proposed increase in the Total Loan Commitment pursuant to
     this  Section  is not  consummated  (because a property  is  rejected  as a
     Property  or  otherwise),  Borrower  shall  retain  the  right  at any time
     thereafter to propose a property as an  additional  Property and to seek to
     increase the Total Loan Commitment as provided in this Section.

                                  ARTICLE III

                       YIELD PROTECTION; ILLEGALITY; ETC.

     SECTION 3.01.Additional  Costs.  Borrower shall pay directly to each Bank
from time to time on  demand  such  amounts  as such  Bank may  determine  to be
necessary to compensate it for any  increased  costs which such Bank  determines
are attributable to its making or maintaining a LIBOR Loan, or its obligation to
make or maintain a LIBOR Loan, or its  obligation to Convert a Base Rate Loan to
a LIBOR Loan hereunder,  or any reduction in any amount  receivable by such Bank
hereunder in respect of its LIBOR Loan or such  obligations  (such  increases in
costs and  reductions  in amounts  receivable  being herein  called  "Additional
Costs"), in each case resulting from any Regulatory Change which:

          (1) changes the basis of taxation of any amounts  payable to such Bank
     under this  Agreement or the Notes in respect of any such LIBOR Loan (other
     than changes in the rate of general  corporate,  franchise,  branch profit,
     net  income or other  income  tax  imposed  on such Bank or its  Applicable
     Lending  Office by the  jurisdiction  in which such Bank has its  principal
     office or such Applicable Lending Office); or

          (2) (other than to the extent the LIBOR Reserve  Requirement  is taken
     into  account  in  determining  the LIBOR Rate at the  commencement  of the
     applicable  Interest  Period)  imposes or  modifies  any  reserve,  special
     deposit, deposit insurance or assessment, minimum capital, capital ratio or
     similar  requirements  relating to any extensions of credit or other assets
     of, or any deposits with or other  liabilities of, such Bank (including any
     LIBOR Loan or any deposits referred to in the definition of "LIBOR Interest
     Rate" in Section  1.01),  or any  commitment of such Bank  (including  such
     Bank's Loan Commitment hereunder); or

          (3) imposes any other condition  affecting this Agreement or the Notes
     (or any of such extensions of credit or liabilities).

                                       27

     Notwithstanding  the foregoing,  in the event that any Bank determines that
it shall incur  Additional  Costs in  maintaining a LIBOR Loan,  such Bank shall
provide notice thereof to Borrower (with a copy to Administrative  Agent), which
notice shall include the dollar  amount of the  Additional  Costs,  and Borrower
shall have the option,  which option must be  exercised  within five (5) Banking
Days of  Borrower's  receipt  of such  notice,  to prepay  such LIBOR Loan or to
Convert  such  LIBOR  Loan  into a Base  Rate  Loan,  subject,  however,  to the
provisions of Section 3.05.

     Without  limiting the effect of the  provisions  of the first  paragraph of
this Section,  in the event that, by reason of any Regulatory  Change,  any Bank
either (1) incurs  Additional  Costs based on or measured by the excess  above a
specified level of the amount of a category of deposits or other  liabilities of
such Bank which includes  deposits by reference to which the LIBOR Interest Rate
is determined as provided  herein or a category of extensions of credit or other
assets of such Bank which includes loans based on the LIBOR Interest Rate or (2)
becomes  subject to restrictions on the amount of such a category of liabilities
or assets which it may hold,  then, if such Bank so elects by notice to Borrower
(with a copy to  Administrative  Agent),  the  obligation of such Bank to permit
Elections of, to Continue, or to Convert Base Rate Loans into, LIBOR Loans shall
be suspended (in which case the  provisions of Section 3.04 shall be applicable)
until such Regulatory Change ceases to be in effect.

     Determinations  and  allocations  by a Bank for purposes of this Section of
the effect of any Regulatory Change pursuant to the first or second paragraph of
this Section,  on its costs or rate of return of making or maintaining  its Loan
or  portions  thereof or on amounts  receivable  by it in respect of its Loan or
portions  thereof,  and the amounts  required to compensate such Bank under this
Section, shall be conclusive absent manifest error.

     To the extent that changing the jurisdiction of a Bank's Applicable Lending
Office  would have the effect of  minimizing  Additional  Costs,  each such Bank
shall use reasonable efforts to make such a change, provided that same would not
otherwise be disadvantageous to each such Bank.

     No Bank shall be entitled  to any  compensation  pursuant  to this  Section
relating  to any period  more than  ninety  (90) days  prior to the date  notice
thereof is given to Borrower by such Bank.

     SECTION 3.02.Limitation on Types of Loans. Anything herein to the contrary
notwithstanding, if, on or prior to the determination of the LIBOR Interest Rate
for any Interest Period:

          (1)  Administrative  Agent determines  (which  determination  shall be
     conclusive)  that  quotations of interest  rates for the relevant  deposits
     referred to in the definition of "LIBOR  Interest Rate" in Section 1.01 are
     not being provided in the relevant  amounts or for the relevant  maturities
     for  purposes  of  determining  rates of  interest  for the LIBOR  Loans as
     provided herein; or

          (2) a Bank determines  (which  determination  shall be conclusive) and
     promptly notifies  Administrative Agent that the relevant rates of interest
     referred to in the definition

                                       28

     of "LIBOR  Interest  Rate" in Section 1.01 upon the basis of which the rate
     of interest for LIBOR Loans for such Interest Period is to be determined do
     not adequately  cover the cost to such Bank of making or  maintaining  such
     LIBOR Loan for such Interest Period;

then Administrative Agent shall give Borrower prompt notice thereof, and so long
as  such  condition  remains  in  effect,  the  Banks  (or,  in the  case of the
circumstances  described in clause (2) above,  the affected Bank) shall be under
no  obligation  to permit  Elections of LIBOR Loans,  to Convert Base Rate Loans
into LIBOR Loans or to  Continue  LIBOR Loans and  Borrower  shall,  on the last
day(s) of the then current Interest Period(s) for the affected outstanding LIBOR
Loans,  either (x) prepay the  affected  LIBOR Loans or (y) Convert the affected
LIBOR Loans into Base Rate Loans in accordance with Section 2.13.

     SECTION  3.03.Illegality.  Notwithstanding  any other  provision  of this
Agreement,  in the event that it becomes unlawful for any Bank or its Applicable
Lending  Office  to  honor  its  obligation  to make or  maintain  a LIBOR  Loan
hereunder,  to allow Elections or  Continuations of a LIBOR Loan or to Convert a
Base  Rate  Loan  into a LIBOR  Loan,  then  such  Bank  shall  promptly  notify
Administrative  Agent and Borrower thereof and such Bank's obligation to make or
maintain a LIBOR Loan, or to permit Elections or Continuations  of, to Continue,
or to Convert its Base Rate Loan into, a LIBOR Loan shall be suspended (in which
case the provisions of Section 3.04 shall be applicable) until such time as such
Bank may again make and maintain a LIBOR Loan.

     SECTION 3.04.Treatment of Affected  Loans. If the obligations of any Bank
to permit an Election of a LIBOR Loan, to Continue its LIBOR Loan, or to Convert
its Base Rate Loan into a LIBOR Loan, are suspended pursuant to Sections 3.01 or
3.03 (each LIBOR Loan so affected being herein called an "Affected Loan"),  such
Bank's Affected Loan shall be  automatically  Converted into a Base Rate Loan on
the last day of the then current  Interest  Period for the Affected Loan (or, in
the case of a Conversion required by Sections 3.01 or 3.03, on such earlier date
as such Bank may specify to Borrower).

     To the extent that such Bank's  Affected  Loan has been so  Converted,  all
payments and  prepayments of principal  which would otherwise be applied to such
Bank's  Affected  Loan shall be  applied  instead to its Base Rate Loan and such
Bank shall have no obligation to Convert its Base Rate Loan into a LIBOR Loan.

     In the event  that the  conditions  giving  rise to the  suspension  of any
Bank's  obligations to permit an Election of a LIBOR Loan, to Continue its LIBOR
Loan,  or to Convert  its Base Rate Loan into a LIBOR Loan shall cease to exist,
such Bank shall  provide  Borrower  with  prompt  notice of same (with a copy to
Administrative  Agent),  and such Bank  shall  again be  obligated  to permit an
Election of a LIBOR Loan,  to  Continue  its LIBOR Loan,  or to Convert its Base
Rate Loan into a LIBOR Loan in accordance with this Agreement.

                                       29

     SECTION 3.05.Certain  Compensation.  Borrower shall pay to Administrative
Agent for the  account of the  applicable  Bank,  upon the  request of such Bank
through  Administrative Agent, such amount or amounts as shall be sufficient (in
the  reasonable  opinion of such Bank) to  compensate  it for any loss,  cost or
expense which such Bank determines is attributable to:

          (1) any payment,  prepayment,  Conversion or  Continuation  of a LIBOR
     Loan made by such Bank on a date other  than the last day of an  applicable
     Interest Period, whether by reason of acceleration or otherwise; or

          (2) any  failure by  Borrower  for any reason to Convert or Continue a
     LIBOR Loan to be Converted or Continued by such Bank on the date  specified
     therefor in the relevant notice under Section 2.15; or

          (3) any  failure by  Borrower to borrow (or to qualify for a borrowing
     of) a LIBOR  Loan  which  would  otherwise  be made  hereunder  on the date
     specified  in the  relevant  Election  notice  under  Section 2.15 given or
     submitted by Borrower.

     Without limiting the foregoing,  such compensation  shall include an amount
equal to the present value (using as the discount rate an interest rate equal to
the rate  determined  under clause (2) below) of the excess,  if any, of (1) the
amount of interest which otherwise would have accrued on the principal amount so
paid, prepaid, Converted or Continued (or not Converted,  Continued or borrowed)
for the  period  from  the  date  of such  payment,  prepayment,  Conversion  or
Continuation (or failure to Convert,  Continue or borrow) to the last day of the
then  current  applicable  Interest  Period  (or,  in the case of a  failure  to
Convert,  Continue or borrow, to the last day of the applicable  Interest Period
which  would have  commenced  on the date  specified  therefor  in the  relevant
notice) at the  applicable  rate of  interest  for the LIBOR Loan  provided  for
herein, over (2) the amount of interest (as reasonably  determined by such Bank)
based  upon the  interest  rate  which  such Bank  would  have bid in the London
interbank market for Dollar deposits,  for amounts  comparable to such principal
amount and maturities  comparable to such period. A determination of any Bank as
to the amounts  payable  pursuant to this  Section  shall be  conclusive  absent
manifest error.

     SECTION 3.06.Capital  Adequacy.  If any Bank shall have determined  that,
after the date hereof,  the adoption of any  applicable  law, rule or regulation
regarding  capital  adequacy,  or  any  change  therein,  or any  change  in the
interpretation or administration thereof by any Governmental Authority,  central
bank or comparable  agency  charged with the  interpretation  or  administration
thereof,  or any request or directive regarding capital adequacy (whether or not
having the force of law) of any such  Governmental  Authority,  central  bank or
comparable  agency,  has or would have the effect of reducing the rate of return
on  capital  of such  Bank  (or its  Parent)  as a  consequence  of such  Bank's
obligations  hereunder  to a level  below that  which such Bank (or its  Parent)
could have achieved but for such adoption,  change, request or directive (taking
into  consideration  its policies with respect to capital adequacy) by an amount
deemed by such Bank to be material,  then from time to time, within fifteen (15)
days after demand by such Bank (with a copy to Administrative  Agent),  Borrower
shall pay to such Bank such additional amount or amounts as will compensate such
Bank (or its Parent) for such  reduction.  A

                                       30

certificate of any Bank claiming compensation under this Section,  setting forth
in reasonable  detail the basis  therefor,  shall be conclusive  absent manifest
error.

     SECTION 3.07.Replacement of Banks.  If any Bank (an "Affected  Bank") (i)
makes demand upon  Borrower  for (or if Borrower is  otherwise  required to pay)
Additional  Costs pursuant to Section 3.01 or (ii) gives notice to Borrower that
such Bank is unable to make or  maintain a LIBOR Loan as a result of a condition
described in Section 3.03 or clause (2) of Section 3.02,  Borrower  may,  within
ninety (90) days of receipt of such demand or notice (or the  occurrence of such
other event causing  Borrower to be required to pay Additional  Costs or causing
said Section 3.03 or clause (2) of Section 3.02 to be  applicable),  as the case
may be, give notice (a "Replacement Notice") to Administrative Agent (which will
promptly  forward a copy of such  notice to each Bank) of  Borrower's  intention
either  (x) to prepay in full the  Affected  Bank's  Note and to  terminate  the
Affected  Bank's entire Loan Commitment or (y) to replace the Affected Bank with
another  financial  institution  (the  "Replacement  Bank")  designated  in such
Replacement Notice.

     In the event  Borrower  opts to give the notice  provided for in clause (x)
above,  and if the Affected  Bank shall not agree within thirty (30) days of its
receipt thereof to waive the payment of the Additional  Costs in question or the
effect of the  circumstances  described in Section 3.03 or clause (2) of Section
3.02, then, so long as no Default or Event of Default shall exist,  Borrower may
(notwithstanding  the provisions of clause (2) of Section 2.11(a)) terminate the
Affected Bank's entire Loan Commitment, provided that in connection therewith it
pays to the  Affected  Bank all  outstanding  principal  and  accrued and unpaid
interest under the Affected  Bank's Note,  together with all other  amounts,  if
any, due from  Borrower to the Affected  Bank,  including  all amounts  properly
demanded and unreimbursed under this Article III.

     In the event  Borrower  opts to give the notice  provided for in clause (y)
above,  and if (i)  Administrative  Agent shall,  within thirty (30) days of its
receipt of the Replacement Notice, notify Borrower and each Bank in writing that
the proposed Replacement Bank is reasonably satisfactory to Administrative Agent
and (ii) the Affected Bank shall not,  prior to the end of such thirty  (30)-day
period,  agree to waive the payment of the  Additional  Costs in question or the
effect of the  circumstances  described in Section 3.03 or clause (2) of Section
3.02,  then the Affected  Bank shall,  so long as no Default or Event of Default
shall exist,  assign its Note and all of its rights and  obligations  under this
Agreement  and  the  other  Loan  Documents  to the  Replacement  Bank,  and the
Replacement Bank shall assume all of the Affected Bank's rights and obligations,
pursuant  to an  agreement,  substantially  in the  form  of an  Assignment  and
Assumption Agreement, executed by the Affected Bank and the Replacement Bank. In
connection with such assignment and assumption,  the Replacement  Bank shall pay
to the Affected Bank an amount equal to the outstanding  principal  amount under
the  Affected  Bank's Note plus all  interest  accrued  thereon,  plus all other
amounts,  if any (other than the  Additional  Costs in  question),  then due and
payable to the Affected Bank;provided,however, that prior to or simultaneously
with any such  assignment  and  assumption,  Borrower  shall  have  paid to such
Affected Bank all amounts properly demanded and unreimbursed  under this Article
III. Upon the effective  date of such  assignment and assumption and the payment
by the Replacement  Bank to  Administrative  Agent of a fee, for  Administrative
Agent's own account,  in the amount of $3,500, the Replacement Bank shall become
a Bank Party to this Agreement and shall have all the rights and  obligations of
a Bank as set  forth  in  such  Assignment  and  Assumption  Agreement,

                                       31

and the Affected Bank shall be released from its obligations  hereunder,  and no
further consent or action by any party shall be required.  Upon the consummation
of any assignment pursuant to this Section, a substitute Note shall be issued to
the  Replacement  Bank by  Borrower,  in exchange for the return of the Affected
Bank's Note. The obligations evidenced by such substitute Notes shall constitute
"Obligations"  for all purposes of this  Agreement and the other Loan  Documents
and shall be secured by the Mortgages.  In connection with Borrower's  execution
of substitute Notes as aforesaid, Borrower shall deliver to Administrative Agent
such evidence of the due authorization, execution and delivery of the substitute
Notes and any related documents as Administrative  Agent may reasonably request.
If the Replacement Bank is not incorporated  under the Laws of the United States
or a state thereof,  it shall, prior to the first date on which interest or fees
are payable  hereunder for its account,  deliver to Borrower and  Administrative
Agent  certification as to exemption from deduction or withholding of any United
States federal income taxes in accordance with Section 10.13.

     Borrower,   Administrative   Agent  and  the  Banks  shall   execute   such
modifications  to  the  Loan  Documents  as  shall  be  reasonably  required  in
connection with and to effectuate the foregoing.

                                   ARTICLE IV

                              CONDITIONS PRECEDENT

     SECTION 4.01.Conditions Precedent to the Initial Advance. The obligations
of the Banks  hereunder and the obligation of each Bank to make Initial  Advance
are subject to the  condition  precedent  that  Administrative  Agent shall have
received on or before the Closing Date each of the following documents (it being
understood that the documents set forth in paragraphs (3) through (15) below are
required for each Property),  and each of the following  requirements shall have
been fulfilled:

          (1)Fees and Expenses.  The payment of all fees and expenses  incurred
     by Administrative Agent (including, without limitation, the reasonable fees
     and expenses of legal counsel);

          (2)Notes.  The Notes for each of the Banks  signatory  hereto,  duly
     executed by Borrower;

          (3)Mortgage and UCCs.  The Mortgage,  duly executed by the applicable
     Mortgagor and recorded (or delivered for recording) in the appropriate land
     records,  together  with  duly  executed  financing  statements  filed  (or
     delivered   for  filing)   under  the  Uniform   Commercial   Code  of  all
     jurisdictions  necessary or, in the  reasonable  opinion of  Administrative
     Agent, desirable to perfect the lien created by each Mortgage;

          (4)Guaranty  and  Indemnity.  The  Guaranty,  duly  executed by each
     Mortgagor; and the Indemnity,  duly executed by Borrower and the applicable
     Mortgagor;

          (5)Title Policy.  A paid title insurance  policy in the amount of the
     Mortgage,  in form approved by Administrative Agent and issued by the Title
     Insurer,  which shall  insure the  Mortgage to be a valid first lien on the
     Mortgagor's  interests in the Property

                                       32

     and Improvements,  free and clear of all liens,  defects,  encumbrances and
     exceptions other than those previously  approved by  Administrative  Agent,
     and shall  contain (i) a reference  to the survey but no survey  exceptions
     and (ii) such  affirmative  insurance and  endorsements  as  Administrative
     Agent may require; and shall be accompanied by such reinsurance  agreements
     between the Title Insurer and title  companies  approved by  Administrative
     Agent, in ALTA facultative form approved by  Administrative  Agent and with
     direct access provisions, as Administrative Agent may require;

          (6)Survey. A current  ALTA/ACSM  survey,  certified to Administrative
     Agent and the Title  Insurer,  showing (i) the location of the perimeter of
     the Property by courses and distances,  (ii) all easements,  rights-of-way,
     and  utility  lines  referred  to in the  title  policy  required  by  this
     Agreement or which actually service or cross the Property (with instrument,
     book and page number  indicated),  (iii) the lines of the streets  abutting
     the Property and the width thereof, and any established building lines (and
     that such roads have been  dedicated  for public use and are  completed and
     have been  accepted by all  required  Governmental  Authorities),  (iv) any
     encroachments  and the extent  thereof upon the Property,  (v) locations of
     all portions (with the acreage thereof also identified) of the Property, if
     any,  which are located in an area  designated  as a "flood  prone area" as
     defined by U.S. Department of Housing and Urban Development pursuant to the
     Flood Disaster  Protection Act of 1973 and (vi) the  Improvements,  and the
     relationship  thereof  by  distances  to the  perimeter  of  the  Property,
     established building lines and street lines;

          (7)Appraisal.  An  independent  M.A.I.  appraisal,  commissioned  by
     Administrative  Agent,  of the  value of the  Mortgagor's  interest  in the
     Property,  which  appraisal shall comply in all respects with the standards
     for  real  estate   appraisals   established   pursuant  to  the  Financial
     Institutions Reform, Recovery, and Enforcement Act of 1989;

          (8)Insurance  Policies.  Copies  of the  policies  and the  original
     certificates  of  hazard  and other  insurance  required  by the  Mortgage,
     together with evidence of the payment of the premiums therefor;

          (9)Hazardous Materials  Report/Reliance  Letter;  Remediation Plan. A
     detailed report by a properly  qualified  engineer with regard to Hazardous
     Materials  affecting  the  Property,  which shall  include,interalia,  a
     certification  that such  engineer  has  examined  a list of prior  owners,
     tenants and other users of the Property,  and has made an on-site  physical
     examination  of  the  Property  and  Improvements  thereon,  and  a  visual
     observation of the surrounding  areas, and disclosing the extent of past or
     present  Hazardous  Materials  activities  or of the  presence of Hazardous
     Materials,  together with a "reliance  letter"  addressed to Administrative
     Agent from the preparer of said report;  and, if such report  discloses the
     presence of Hazardous  Materials to an extent  acceptable to Administrative
     Agent and its environmental  consultant,  a certified copy of Borrower's or
     the  applicable  Mortgagor's   remediation/management   plan  with  respect
     thereto,   as  approved  (to  the  extent   required)  by  all  appropriate
     Governmental Authorities;

          (10)  Consultant's  Report.  A detailed  report  from the  Engineering
     Consultant  to  the  effect  that  the  Improvements  are  in  satisfactory
     condition and enumerating any

                                       33

     maintenance or  governmental  compliance  items necessary or expected to be
     incurred  over the term of the  Loans  and  stating  the  approximate  cost
     thereof;

          (11)Permits and Other  Approvals.  Copies of any and all certificates
     of  occupancy  and  similar  authorizations  required  by any  Governmental
     Authorities  for the use,  occupancy and  operation of the Property  and/or
     Improvements  in accordance  with all applicable  building,  environmental,
     ecological, landmark, subdivision and zoning Laws;

          (12)Leases.  Copies,  certified  to be  true  and  complete,  of all
     executed leases of the  Improvements,  accompanied by notices of assignment
     in the form of EXHIBIT F, and, in the case of such  leases as are  required
     by  Administrative  Agent,  (i)  estoppel  certificates  from  the  tenants
     thereunder (to the extent such estoppel  certificates  are obtainable  with
     Borrower's   commercially   reasonable  efforts)  and  (ii)  subordination,
     non-disturbance and attornment  agreements;  together with a certified copy
     of the standard form of lease being used in connection  with the leasing of
     space in the  Improvements  and the  first  rent  roll and  leasing  report
     required by paragraph (12) of Section 6.09;

          (13)Premises Documents. A copy, certified to be true and complete, of
     the REA and other Premises Documents,  together with estoppel  certificates
     with  respect  thereto  (to  the  extent  such  estoppel  certificates  are
     obtainable with Borrower's  commercially  reasonable  efforts) from each of
     the Anchors and the other parties thereto and, if in Borrower's  possession
     or  otherwise   obtainable  with  reasonable   effort,   current  financial
     statements  of such  parties  (to the extent  requested  by  Administrative
     Agent);

          (14)Management and Leasing  Contracts.  Copies,  certified to be true
     and complete,  of all existing  contracts  providing for the  management or
     leasing of the Property and Improvements, together with, in each case, such
     collateral  assignments or "will-serve" letters as Administrative Agent may
     require;

          (15)UCC Searches.  Uniform  Commercial  Code searches with respect to
     Borrower and the applicable  Mortgagor and advice from the Title Insurer to
     the effect that searches of the proper public records disclose no leases of
     personalty or financing statements filed or recorded against Borrower,  the
     applicable Mortgagor or the Mortgaged Property;

          (16)Financial   Statements.   Audited  TRG  Consolidated   Financial
     Statements  and TCI  Financial  Statements  as of and for  the  year  ended
     December  31,  2000;  unaudited  Mortgagor  Financial  Statements  for each
     Mortgagor as of and for the year ended  December 31,  2000;  unaudited  TRG
     Consolidated  Financial  Statements and TCI Financial  Statements as of and
     for the  quarters  ended March 31, 2001 and June 30,  2001;  and  unaudited
     Mortgagor  Financial  Statements  for  each  Mortgagor  as of and  for  the
     quarters  ended March 31,  2001 and June 30,  2001;  each of the  foregoing
     unaudited Financial Statements to be certified by an appropriate  financial
     officer of Borrower, TCI or each Mortgagor, as the case may be;

          (17)Evidence  of  Formation.  With  respect  to  Borrower  and  each
     Mortgagor, certified (as of the Closing Date) copies of (i) its certificate
     (if  applicable)  and  agreement

                                       34

     of  partnership  or other  organizational  agreement,  with all  amendments
     thereto, (ii) if applicable, a certificate of the Secretary of State of its
     jurisdiction  of  formation  as to its good  standing  therein and (iii) if
     required,  foreign qualification  certificates from the jurisdictions where
     the Properties are located;

          (18)Evidence of Partnership/Company  Action. With respect to Borrower
     and each  Mortgagor,  certified  (as of the  Closing  Date)  copies  of all
     documents  evidencing  partnership or other company (as applicable)  action
     taken by it authorizing the execution, delivery and performance of the Loan
     Documents  and each other  document to be  delivered by it or on its behalf
     pursuant to this Agreement;

          (19)Incumbency and Signature Certificate.  A certificate (dated as of
     the  Closing  Date)  certifying  the  names  and  true  signatures  of each
     individual  authorized  to sign on behalf of  Borrower  (in its  individual
     capacity and as sole member or general partner, as the case may be, of each
     Mortgagor);

          (20)Solvency  Certificates.  A Solvency  Certificate,  duly executed,
     from Borrower and each Mortgagor;

          (21)Opinions of Counsel.  Favorable opinions, dated the Closing Date,
     of  counsel  for   Borrower   and   Mortgagors,   as  to  such  matters  as
     Administrative Agent may reasonably request;

          (22)Authorization  Letter. The Authorization Letter, duly executed by
     Borrower;

          (23)Certificate.   The  following   statements  shall  be  true  and
     Administrative  Agent shall have received a  certificate  dated the Closing
     Date signed by a duly authorized signatory of Borrower stating, to the best
     of the certifying party's knowledge, the following:

               (a)  All  representations   and  warranties   contained  in  this
          Agreement and in each of the other Loan Documents are true and correct
          on and as of the  Closing  Date as though made on and as of such date,
          and

               (b)  No  Default  or  Event  of  Default  has   occurred  and  is
          continuing, or could result from the transactions contemplated by this
          Agreement and the other Loan Documents, and

               (c) None of the Improvements on any Property has been and remains
          injured or damaged by fire or other casualty;

               (24)Covenant Compliance Certificate. A certificate,  of the sort
          required by paragraph  3(b) of Section 6.09,  containing  calculations
          demonstrating  Borrower's  compliance,  as of  the  end  of  the  most
          recently  ended calendar  quarter prior to the Closing Date,  with the
          covenants  set forth in  Sections  7.02,  7.03 and 7.04 and in Article
          VIII;

                                       35

               (25)  Termination  and  Repayment  of Existing  Credit  Facility.
          Administrative  Agent  shall have  received  written  evidence  of the
          termination  of the  Existing  Credit  Facility  and  all  sums  owing
          thereunder  shall have been repaid in full (it being  understood  that
          such sums may be repaid by Borrower  from the  proceeds of the Initial
          Advance); and

               (26) Additional Documentation.  Such other approvals, opinions or
          documents as Administrative Agent or any Bank may reasonably request.

     SECTION 4.02.Conditions  Precedent to Advances After the Initial Advance.
The  obligation  of each Bank to make  advances of the Loans  subsequent  to the
Initial  Advance shall be subject to  satisfaction  of the following  conditions
precedent:

          (1) All  conditions  of  Section  4.01  shall  have  been  and  remain
     satisfied as of the date of the advance;

          (2) No  Default  or  Event  of  Default  shall  have  occurred  and be
     continuing  as of the date of the advance,  or would result from the making
     thereof; and

          (3) Administrative  Agent shall have received a request for an advance
     in accordance with Section 2.04.

     SECTION  4.03.Deemed  Representations.  Each request by Borrower for, and
acceptance  by Borrower  of, an advance of proceeds of the Loans or the issuance
of a Letter of Credit shall constitute a representation and warranty by Borrower
and each Mortgagor that, as of both the date of such request and the date of the
advance or issuance,  as the case may be, (1) no Default or Event of Default has
occurred  and is  continuing  or would  result from the making of the advance or
issuance  of the  Letter of Credit  and (2) if any  representation  or  warranty
contained in this  Agreement or the other Loan Documents is untrue or incorrect,
the condition giving rise to such  untruthfulness or incorrectness is not likely
to result in a Material Adverse Change.

                                   ARTICLE V

                         REPRESENTATIONS AND WARRANTIES

     Borrower  represents and warrants to Administrative  Agent and each Bank as
follows:

     SECTION  5.01.Due  Organization.  Borrower  and each  Mortgagor  are duly
organized,  validly existing and (if applicable) in good standing under the Laws
of the respective  jurisdictions of their organization,  have the partnership or
limited liability company,  as the case may be, power and authority to own their
assets and to transact the business in which they are now engaged,  and are duly
qualified as foreign  partnerships or limited liability  companies,  as the case
may be, and in good standing under the Laws of each other  jurisdiction in which
such  qualification is required  (including,  if required,  the jurisdictions in
which the Properties are located).

                                       36

     SECTION 5.02.Power and Authority; No Conflicts;  Compliance With Laws. The
execution and delivery of, and the performance of the obligations required to be
performed by Borrower and each  Mortgagor  under,  the Loan Documents do not and
will not, in the case of Borrower or any  Mortgagor,  (1) require the consent or
approval  of its  partners  or members  or such  consent  or  approval  has been
obtained,  (2) contravene its partnership  agreement,  (3) violate any provision
of, or require any filing,  registration,  consent or  approval  under,  any Law
(including,   without   limitation,   Regulation  U),  order,  writ,   judgment,
injunction,   decree,   determination   or  award  presently  in  effect  having
applicability  to it, (4) result in a breach of or constitute a default under or
require any consent under any indenture or loan or credit agreement or any other
agreement,  lease or instrument to which it may be a party or by which it or its
properties  may be bound  or  affected  except  for  consents  which  have  been
obtained,  (5) result in, or require,  the  creation or  imposition  of any Lien
(other  than  the Lien of the  Mortgages),  upon or with  respect  to any of its
properties  now owned or  hereafter  acquired  or (6) cause it to be in  default
under any such Law, order, writ, judgment,  injunction, decree, determination or
award or any such  indenture,  agreement,  lease or  instrument;  to the best of
Borrower's  knowledge,  Borrower and each  Mortgagor are in compliance  with all
Laws  applicable  to them where the  failure to be in  compliance  would cause a
Material Adverse Change to occur.

     SECTION  5.03.Legally  Enforceable  Agreements.  Each Loan  Document is a
legal, valid and binding obligation of Borrower and/or the applicable Mortgagor,
as the case may be,  enforceable  in  accordance  with its terms,  except to the
extent that such enforcement may be limited by applicable bankruptcy, insolvency
and other similar Laws affecting creditors' rights generally.

     SECTION  5.04.Litigation.  There  are no  actions,  suits or  proceedings
pending or, to Borrower's knowledge,  threatened, against Borrower or any of its
Affiliates  (including any Mortgagor),  the Mortgagor's interest in any Property
or the Improvements  thereon,  or challenging the validity and enforceability of
the Mortgage or the priority of the Lien  thereof,  at law or in equity,  before
any court or arbitrator or any  Governmental  Authority (such actions,  suits or
proceedings,  collectively, "Actions"), except Actions (1) which, in the case of
each Action  where the likely  exposure of  Borrower  or its  Affiliate  exceeds
$100,000,  have been disclosed to Administrative  Agent and the Banks in writing
and (2) which (a) are fully  covered by  insurance  or (b) would,  if  adversely
determined, not substantially impair the ability of Borrower or any Mortgagor to
pay when due any amounts which may become  payable under the Notes or other Loan
Documents  or to  otherwise  pay and perform  their  respective  obligations  in
connection  with the  Loans;  nor,  to  Borrower's  knowledge,  are any  Actions
threatened  which  would,  if  adversely  determined,  substantially  impair the
ability of  Borrower  or any  Mortgagor  to pay when due any  amounts  which may
become  payable under the Notes or other Loan  Documents or to otherwise pay and
perform their respective obligations in connection with the Loans.

     SECTION 5.05.Good Title to Properties. Borrower and each of its Affiliates
(including each  Mortgagor) have good,  marketable and legal title to all of the
properties  and  assets  each  of  them  purports  to  own  (including,  without
limitation,  those reflected in the financial  statements referred to in Section
5.13) and, in the case of all of Borrower's  shopping  center  properties,  only
with exceptions which do not materially  detract from the value

                                       37

of such property or assets or the use thereof in Borrower's and such Affiliate's
business,  and except to the extent that any such  properties  and assets (other
than the Properties)  have been encumbered or disposed of since the date of such
financial statements without violating any of the covenants contained in Article
VII or VIII or elsewhere in this  Agreement.  Borrower and its Affiliates  enjoy
peaceful and  undisturbed  possession  of all leased  property  necessary in any
material respect in the conduct of their respective businesses.  All such leases
are valid and subsisting and are in full force and effect.

     SECTION 5.06.Taxes. Borrower and each Mortgagor have filed all tax returns
(federal,  state  and  local)  required  to be filed  and have  paid all  taxes,
assessments and governmental charges and levies shown as due and payable thereon
without the imposition of a penalty, including interest and penalties, except to
the extent they are the subject of a Good Faith Contest.

     SECTION 5.07.ERISA.  Borrower and each Mortgagor are in compliance in all
material respects with all applicable  provisions of ERISA. Neither a Reportable
Event nor a Prohibited  Transaction  has occurred  with respect to any Plan;  no
notice  of  intent  to  terminate  a Plan has been  filed  nor has any Plan been
terminated  within  the past  five  (5)  years;  no  circumstance  exists  which
constitutes  grounds under Section 4042 of ERISA entitling the PBGC to institute
proceedings to terminate,  or appoint a trustee to  administer,  a Plan, nor has
the PBGC instituted any such proceedings; Borrower, each Mortgagor and the ERISA
Affiliates  have not  completely or partially  withdrawn  under Sections 4201 or
4204 of ERISA from a Multiemployer Plan; Borrower,  each Mortgagor and the ERISA
Affiliates have met the minimum  funding  requirements of each under Section 412
of the Code and Section 302 of ERISA with respect to the Plans of each and there
is no  "unfunded  current  liability"  (as such quoted term is defined in ERISA)
with respect to any Plan  established or maintained by each; and Borrower,  each
Mortgagor and the ERISA  Affiliates  have not incurred any liability to the PBGC
under ERISA.  No part of the funds to be used by Borrower in satisfaction of its
obligations  under this  Agreement  constitute  "plan  assets" of any  "employee
benefit plan" within the meaning of ERISA or of any "plan" within the meaning of
Section  4975(e)(1) of the Code, as interpreted by the Internal  Revenue Service
and the U.S. Department of Labor in rules, regulations, releases or bulletins or
as  interpreted  under  applicable  case law.  Neither the  extension  of credit
evidenced  by the Notes nor any other  transaction  contemplated  under the Loan
Documents constitutes a Prohibited Transaction.

     SECTION 5.08.No Default on Outstanding  Judgments or Orders.  Borrower and
each Mortgagor have satisfied all judgments which are not being appealed and are
not in default with respect to any judgment,  order, writ,  injunction,  decree,
rule or regulation  of any court,  arbitrator  or federal,  state,  municipal or
other   Governmental   Authority,   commission,   board,   bureau,   agency   or
instrumentality, domestic or foreign.

     SECTION 5.09.No Defaults on Other  Agreements.  Except as disclosed to the
Bank Parties in writing,  including anything disclosed on financial  statements,
to the best of  Borrower's  knowledge,  neither  Borrower nor any Mortgagor is a
party to any indenture, loan or credit agreement or any lease or other agreement
or instrument or subject to any partnership, trust or other restriction which is
likely  to  result  in a  Material  Adverse  Change.  To the best of  Borrower's
knowledge,  neither  Borrower nor any  Mortgagor is in default in any respect in
the

                                       38

performance,  observance or fulfillment of any of the obligations,  covenants or
conditions contained in any agreement or instrument which is likely to result in
a Material Adverse Change.

     SECTION 5.10. Government Regulation.  Neither Borrower nor any Mortgagor is
subject to regulation  under the Investment  Company Act of 1940, the Interstate
Commerce  Act,  the Federal  Powers Act or any Law limiting its ability to incur
indebtedness for money borrowed as contemplated hereby.

     SECTION  5.11.Environmental   Protection.   To  the  best  of  Borrower's
knowledge,  none  of  Borrower's  or its  Affiliates'  properties  contains  any
Hazardous  Materials that, under any Environmental Law currently in effect,  (1)
would impose  liability on Borrower or any Mortgagor that is likely to result in
a Material Adverse Change or (2) is likely to result in the imposition of a Lien
on any  assets of  Borrower  or its  Affiliates,  in each  case if not  properly
handled in accordance with applicable Law. To the best of Borrower's  knowledge,
neither it nor any of its  Affiliates  nor any  portion of any  Property  or the
Improvements thereon is in violation of, or subject to any existing,  pending or
threatened  investigation or proceeding by any Governmental Authority under, any
Environmental  Law. Except for matters,  claims,  conditions or circumstances as
may be disclosed in the reports  delivered  pursuant to paragraph (9) of Section
4.01,  Borrower is not aware of any matter,  claim,  condition  or  circumstance
which would  reasonably  cause a Person to make further  inquiry with respect to
such  matters in order to  ascertain  whether any  Hazardous  Materials or their
effects have been  disposed of or released on or to any portion of any Property,
the  Improvements  thereon or any surrounding  areas;  neither  Borrower nor any
Mortgagor is required by any  Environmental Law to obtain any permits or license
to construct or use any improvements, fixtures, or equipment with respect to any
Property,  or if such permit or license is required it has been  obtained;  and,
except as may be disclosed in the reports delivered pursuant to paragraph (9) of
Section  4.01,  to the  best of  Borrower's  knowledge,  the  prior  use of each
Property has not resulted in the disposal or release of any Hazardous  Materials
on or to any portion of the  Property or any  surrounding  areas in violation of
applicable Law.

     SECTION  5.12.Solvency.   Borrower  and  each  Mortgagor  are,  and  upon
consummation of the transactions  contemplated by this Agreement, the other Loan
Documents and any other documents,  instruments or agreements  relating thereto,
will be, Solvent.

     SECTION  5.13.Financial  Statements.   The  TRG  Consolidated   Financial
Statements,  TCI Financial  Statements and Mortgagor  Financial  Statements most
recently  delivered to the Banks  pursuant to the terms of this Agreement are in
all  material  respects  complete and correct and fairly  present the  financial
condition of the subjects thereof as of the dates of and for the periods covered
by such statements,  all in accordance with GAAP, and there has been no Material
Adverse Change since the date of such most recently  delivered TRG  Consolidated
Financial   Statements,   TCI  Financial   Statements  or  Mortgagor   Financial
Statements,  as the case may be, and no  borrowings  which  might give rise to a
Lien or claim  against all or any portion of the  Mortgaged  Property  under any
Mortgage  or against  the  proceeds  of the Loans have been made by  Borrower or
others since the dates of such most recently delivered financial statements.

                                       39

     SECTION 5.14.Valid  Existence of Material  Affiliates.  As of the Closing
Date,  the only  Material  Affiliates  are those listed on EXHIBIT D. As to each
Material  Affiliate  so  listed,  its  correct  name,  the  jurisdiction  of its
formation and Borrower's percentage of beneficial interest therein are set forth
on said  EXHIBIT  D. Each  Material  Affiliate  is a  partnership,  corporation,
limited  liability  company or joint venture duly organized and existing in good
standing under the Laws of the jurisdiction of its formation.  Borrower and each
of its Material Affiliates have the power to own their respective properties and
to carry on their respective  businesses now being  conducted.  Each of Borrower
and its Material Affiliates is duly qualified as a foreign partnership,  company
or venture to do business and is in good standing in every jurisdiction in which
the  nature  of the  respective  businesses  conducted  by it or its  respective
properties, owned or held under lease, make such qualification necessary.

     SECTION 5.15.Insurance.  Each  Mortgagor  has in force paid  insurance as
required by the respective  Mortgages and,  generally,  Borrower and each of its
Affiliates  has in force paid  insurance  with  financially  sound and reputable
insurance  companies or  associations in such amounts and covering such risks as
are usually carried by companies  engaged in the same or a similar  business and
similarly situated.

     SECTION  5.16.Separate  Tax and  Zoning  Lot.  To the best of  Borrower's
knowledge,  each Property  constitutes a distinct parcel or parcels for purposes
of taxes,  assessments and impositions  (public or private) and is not otherwise
considered  as part of a larger lot not included in the Property for purposes of
taxes, assessments or impositions (public or private).

     SECTION 5.17.Zoning and other Laws; Covenants and Restrictions. As to each
Property,  (i) the  Improvements  and the uses  thereof  comply in all  material
respects with applicable zoning, environmental,  ecological,  landmark and other
applicable  Laws, and all  requirements for such uses have been satisfied in all
material  respects  and (ii) the  applicable  Mortgagor  and the Property are in
compliance  in all  material  respects  with  all  applicable  restrictions  and
covenants.

     SECTION  5.18.Utilities  Available.  As to  each  Property,  all  utility
services  necessary for the  operation of the  Improvements  for their  intended
purposes are available and servicing the Property, including water supply, storm
and sanitary sewer, gas, electric power and telephone facilities.

     SECTION  5.19.Creation of Liens.  Neither  Borrower nor any Mortgagor has
entered into any contract or arrangement of any kind the performance of which by
the  other  party  thereto  would  give  rise  to a Lien  on all or  part of the
Mortgaged  Property under any Mortgage  prior to such Mortgage,  other than with
respect to each  Property,  Liens  pursuant to the documents  that are listed as
exceptions in the title policy insuring the applicable Mortgage.

     SECTION 5.20.Roads. Each Property has access to a publicly  dedicated road
or roads  sufficient  for the full  utilization  of the  Improvements  for their
intended purposes.

     SECTION 5.21.Premises Documents and Leases. As to each Property,  the REA
and any  other  Premises  Documents  which  Administrative  Agent  has  notified
Borrower that it considers material are unmodified and in full force and effect;
to the best of Borrower's

                                       40

knowledge,  there are no defaults under any Major Lease or any Premises Document
except as disclosed to  Administrative  Agent in writing,  and all conditions to
the  effectiveness  and  continuing  effectiveness  of each  lease and  Premises
Document required to be satisfied as of the date hereof have been satisfied.

     SECTION 5.22.Accuracy of  Information;  Full  Disclosure.  To the best of
Borrower's  knowledge,  neither  this  Agreement  nor any  documents,  financial
statements,  reports,  notices,  schedules,  certificates,  statements  or other
writings   furnished   by  or  on  behalf  of  Borrower  or  any   Mortgagor  to
Administrative  Agent or any Bank in  connection  with the  negotiation  of this
Agreement or the other Loan Documents or the  consummation  of the  transactions
contemplated  hereby,  or  required  herein or in any other Loan  Document to be
furnished by or on behalf of Borrower or any  Mortgagor,  contains any untrue or
misleading  statement of a material fact or omits a material  fact  necessary to
make the statements herein or therein not misleading.  To the best of Borrower's
knowledge,  there is no fact which Borrower has not disclosed to  Administrative
Agent and the Banks in writing which materially  affects adversely or, so far as
Borrower  can now  foresee,  will  materially  affect  adversely  the  business,
prospects,  profits or financial  condition of Borrower or any  Mortgagor or the
ability of Borrower or any  Mortgagor  to perform this  Agreement  and the other
Loan Documents.

                                   ARTICLE VI

                              AFFIRMATIVE COVENANTS

     So long as any of the Notes  shall  remain  unpaid or the Loan  Commitments
remain in effect,  or any other amount is owing by Borrower or any  Mortgagor to
Administrative  Agent or any Bank  hereunder  or under any other Loan  Document,
Borrower shall (and shall cause each Mortgagor to):

     SECTION 6.01.Maintenance  of  Existence.  Preserve and maintain its legal
existence and, if applicable,  good standing in the jurisdiction of organization
and, if  applicable,  qualify and remain  qualified as a foreign  partnership in
each jurisdiction in which such qualification is required,  except to the extent
that failure to so qualify is not likely to result in a Material Adverse Change.

     SECTION 6.02. Maintenance of Records.  Keep adequate  records and books of
account,  in  which  complete  entries  will be made in  accordance  with  GAAP,
reflecting all of its financial transactions.

     SECTION 6.03. Maintenance of Insurance.  At all times,  (i) in the case of
Borrower,  maintain  and keep in force,  and  cause  each of its  Affiliates  to
maintain  and keep in force,  insurance  with  financially  sound and  reputable
insurance  companies or  associations in such amounts and covering such risks as
are usually carried by companies  engaged in the same or a similar  business and
similarly  situated,  which  insurance may provide for reasonable  deductibility
from coverage thereof and (ii) in the case of each Mortgagor,  maintain and keep
in force the insurance required by the respective Mortgages.

                                       41

     SECTION  6.04.Compliance  with  Laws;  Payment  of  Taxes.  Comply in all
respects with all Laws  applicable to it or to any of its properties or any part
thereof, such compliance to include, without limitation,  paying before the same
become delinquent all taxes,  assessments and governmental  charges imposed upon
it or upon its  property,  except to the extent  they are the  subject of a Good
Faith Contest.

     SECTION 6.05. Right of Inspection.  At any reasonable time and from time to
time upon  reasonable  notice,  permit  Administrative  Agent or any Bank or any
agent or  representative  thereof  (provided that a  representative  of any Bank
must, at Borrower's  request, be accompanied by a representative of Borrower) to
examine  and make  copies and  abstracts  from its records and books of account,
visit and inspect its properties, and discuss its affairs, finances and accounts
with its independent accountants;  and cooperate with the Engineering Consultant
to enable it to perform its functions hereunder.

     SECTION 6.06.Compliance With  Environmental  Laws. Comply in all material
respects with all applicable  Environmental Laws and immediately pay or cause to
be paid all costs and  expenses  incurred in  connection  with such  compliance,
except to the  extent  there is a Good Faith  Contest;  and at its sole cost and
expense,  promptly  remove,  or cause  the  removal  of,  any and all  Hazardous
Materials or the effects  thereof at any time  identified as being on, in, under
or affecting any Property or the Improvements thereon in violation of applicable
Environmental Law.

     SECTION 6.07.Payment of Costs. Pay all costs and expenses required for the
satisfaction of the conditions of this Agreement.

     SECTION 6.08.Maintenance of Properties. Do all things reasonably necessary
to maintain,  preserve,  protect and keep its (and, in the case of Borrower, its
Affiliates') properties in good repair, working order and condition.

     SECTION 6.09.Reporting and Miscellaneous  Document  Requirements.  Furnish
directly to each of the Banks:

          (1)Annual Financial Statements. As soon as available and in any event
     within  ninety  (90)  days  after  the end of  each  Fiscal  Year,  the TRG
     Consolidated  Financial  Statements,   the  TCI  Financial  Statements  and
     Mortgagor Financial  Statements for each Mortgagor,  in each case as of the
     end of and for such  Fiscal  Year,  in  reasonable  detail  and  stating in
     comparative  form the  respective  figures for the  corresponding  date and
     period in the prior Fiscal Year and audited by Borrower's Accountants;

          (2)Quarterly  Financial  Statements.  As soon as available and in any
     event within  forty-five  (45) days after the end of each calendar  quarter
     (other than, in the case of the TRG Consolidated  Financial  Statements and
     TCI  Financial  Statements,  the last  quarter  of the  Fiscal  Year),  the
     unaudited TRG Consolidated  Financial Statements,  TCI Financial Statements
     and Mortgagor Financial  Statements for each Mortgagor,  in each case as of
     the end of and for such calendar quarter,  in reasonable detail,  certified
     by the  entity's  chief  financial  officer  or  Treasurer  and  stating in
     comparative  form the  respective  figures for the  corresponding  date and
     period in the prior Fiscal Year;

                                       42

          (3)Certificate of No Default and Financial  Compliance.  Within forty
     five (45) days after the end of each of the first  three  quarters  of each
     Fiscal Year and within  ninety (90) days after the end of each Fiscal Year,
     a  certificate  of  Borrower's  chief  financial  officer or Treasurer  (a)
     stating that, to the best of his or her  knowledge,  no Default or Event of
     Default has occurred and is continuing, or if a Default or Event of Default
     has  occurred  and is  continuing,  specifying  the nature  thereof and the
     action which is proposed to be taken with respect thereto, (b) stating that
     the covenants contained in Sections 7.02, 7.03 and 7.04 and in Article VIII
     have been  complied with (or  specifying  those that have not been complied
     with)  and  including   computations   demonstrating  such  compliance  (or
     non-compliance)  and (c) setting forth the details of all items  comprising
     Total Outstanding Indebtedness (including amount,  maturity,  interest rate
     and amortization  requirements) and Unsecured Indebtedness,  each as of the
     end of such  quarter,  and  Combined  EBITDA,  Interest  Expense  and Fixed
     Charges, each for the twelve (12)-month period ending with such quarter;

          (4)Notice  of  Litigation.   Promptly  after  the  commencement  and
     knowledge thereof, notice of all actions, suits, and proceedings before any
     court or arbitrator,  affecting (i) Borrower which, if determined adversely
     to Borrower are likely to result in a Material Adverse Change;  or (ii) any
     Mortgagor  or all or  any  portion  of the  Mortgaged  Property  under  any
     Mortgage  which,  if  determined  adversely to the  Mortgagor are likely to
     result in a Material Adverse Change;

          (5)Notices of Defaults and Events of Default. As soon as possible and
     in any event  within  ten (10) days  after  Borrower  becomes  aware of the
     occurrence of a material  Default or any Event of Default a notice  setting
     forth the details of such  Default or Event of Default and the action which
     is proposed to be taken with respect thereto;

          (6)Dispositions or  Acquisitions of Assets.  Within thirty (30) days
     after the occurrence  thereof,  notice of any Disposition or acquisition of
     assets (other than  acquisitions  or  Dispositions  of investments  such as
     certificates of deposit,  Treasury  securities and money market deposits in
     the  ordinary   course  of  Borrower's   cash   management)  in  excess  of
     $25,000,000,  together  with,  in the  case of any  acquisition  of such an
     asset,  (i)  copies  of the  agreements  governing  the  acquisition,  (ii)
     historical  balance  sheets (to the extent  available)  and  statements  of
     income and cash flows with  respect to the asset  acquired for at least the
     preceding three (3) years (to the extent available) and Borrower's  revenue
     and expense  projections  for the asset acquired for at least the next five
     (5)  years  (all of the  foregoing  to be in  form  and  detail  reasonably
     satisfactory to  Administrative  Agent),  (iii) a certificate,  of the sort
     required  by  paragraph  (3)(b)  of  this  Section,   containing   covenant
     compliance calculations that include the pro-forma adjustments set forth in
     Section 8.02, which calculations shall demonstrate  Borrower's  compliance,
     on a pro-forma  basis,  as of the end of the most recently  ended  calendar
     quarter for which  financial  results are  required  hereunder to have been
     reported by  Borrower,  with all  covenants  enumerated  in said  paragraph
     (3)(b) and (iv) such  other  information  relating  to the  acquisition  as
     Administrative Agent may reasonably request;

                                       43

          (7)Material  Adverse  Change.  As soon as is  practicable  and in any
     event within five (5) days after  knowledge of the  occurrence of any event
     or circumstance  which is likely to result in or has resulted in a Material
     Adverse Change, notice thereof;

          (8)Bankruptcy of Tenants.  Promptly after becoming aware of the same,
     notice of the bankruptcy,  insolvency or cessation of operations of (i) any
     of the  Anchors,  (ii) any tenant in the  Improvements  on any  Property to
     which 5% or more of the aggregate  minimum rent from such  Improvements  is
     attributable  or (iii) any tenant in any  property  of Borrower or in which
     Borrower  has an  interest to which 5% or more of minimum  rent  payable to
     Borrower  directly  or  through  its  Consolidated  Businesses  or  UJVs is
     attributable;

          (9)Offices. Thirty (30) days' prior notice of any change in the chief
     executive  office,  principal  place of business or location of Borrower or
     any Mortgagor;

          (10)Environmental and Other Notices.  As soon as possible and in any
     event within five (5) days after receipt,  copies of (i) all  Environmental
     Notices received by Borrower or any Mortgagor which are not received in the
     ordinary  course of  business  and  which  relate  to any  Property  or any
     situation  which is likely to result in a Material  Adverse Change and (ii)
     all reports of any official  searches  made by any  Governmental  Authority
     having jurisdiction over any Property or the Improvements  thereon,  and of
     any claims of violations thereof;

          (11)Insurance  Coverage.   Promptly,   such  information  concerning
     Borrower's  insurance  coverage  as  Administrative  Agent  may  reasonably
     request;

          (12)Leasing and Other Property Information.  As soon as available and
     in any  event  within  thirty  (30)  days  after  the end of each  calendar
     quarter,  a rent roll,  leasing  report and  tenant  sales  report for each
     Property,  together with  abstracts of all leases  entered into during such
     quarter,  in each case (other than with  respect to tenant  sales  reports)
     certified by Borrower to be true and complete; and

          (13)General Information.  Promptly, such other information respecting
     the  condition or  operations,  financial or  otherwise,  of Borrower,  any
     Mortgagor or any  properties of Borrower as  Administrative  Agent may from
     time to time reasonably request.

     SECTION 6.10.Premises  Documents;  Leases. As to each Property,  keep the
Premises  Documents  and all leases in full  force and effect  (except as may be
permitted by this Agreement or by the applicable  Mortgage) and at all times use
commercially  reasonable  efforts to compel  performance  by the  parties to the
Premises  Documents or the tenants under such leases, as the case may be, of all
obligations,  covenants and  agreements by such parties or tenants,  as the case
may be,  to be  performed  thereunder;  deliver  to  Administrative  Agent,  (i)
promptly following the execution thereof,  certified copies of all amendments or
supplements to the Premises Documents and (ii) promptly following Administrative
Agent's request  therefor,  certified copies of any or all leases of portions of
the  Improvements,  any or all amendments or supplements to any such lease;  and
notices of  assignment in the form of EXHIBIT F to the

                                       44

tenants thereunder; not enter into any lease or modification thereof (x) without
Administrative  Agent's prior written  consent during the existence of any Event
of Default or (y) that is not  commercially  reasonable;  and not modify  (other
thandeminimus  modifications)  any of the Premises Documents without the prior
written  consent of  Administrative  Agent,  such consent not to be unreasonably
withheld  or  delayed;  to the  extent  Borrower  is unable,  with  commercially
reasonable  efforts,  to  obtain,  prior  to the  date of the  Initial  Advance,
estoppel  certificates  from  tenants or parties to the  Premises  Documents  as
required by paragraphs (12) and (13) of Section 4.01, Borrower shall continue to
use such  efforts to obtain  such  estoppel  certificates  after the date of the
Initial Advance.

     SECTION 6.11.Compliance with Covenants, Restrictions and Easements. Comply
with all  restrictions,  covenants and  easements  affecting any Property or the
Improvements thereon.

     SECTION  6.12.Management,  Leasing  and  Service  Contracts.  Deliver  to
Administrative  Agent, with respect to each Property,  (i) as and when executed,
certified copies of all management and leasing contracts, each of which shall be
entered into with a party, and on terms and conditions, reasonably acceptable to
Administrative  Agent, and (ii) as and when requested by  Administrative  Agent,
copies of all service contracts;  contemporaneously with entering into each such
management or leasing contract, at Administrative Agent's option, cause the same
to be collaterally assigned to Administrative Agent for the benefit of the Banks
as  additional  security for the Loans and/or cause the manager or leasing agent
under each such management or leasing  contract to undertake,  inter ----- alia,
to continue  performance  on the Banks' behalf  without  additional  cost in the
event of a Default;  cause each service contract to contain a provision allowing
for the  as-of-right  cancellation  thereof on thirty (30) days' notice from the
applicable  Mortgagor or its  successors as owners of the Property;  and keep in
full force and effect and not  materially  modify  the  management  and  leasing
agreement(s)  approved  pursuant  to  paragraph  (14) of  Section  4.01  without
Administrative   Agent's  prior  written   consent,   such  consent  not  to  be
unreasonably withheld.

     SECTION  6.13.Correction  of  Defects;   Remediation.   Upon  demand  of
Administrative Agent or the Engineering Consultant, correct any material defects
(including structural) in the Improvements on any Property; and diligently cause
the  completion of and payment for the Hazardous  Materials  removal/remediation
described in the  remediation/management  plan  referred to in paragraph  (9) of
Section 4.01.

     SECTION 6.14.Estoppel Certificates.  Within three (3) days upon request in
person or within five (5) days upon request by mail,  furnish to  Administrative
Agent or such other Persons as Administrative Agent may designate,  a statement,
duly acknowledged,  of the amount due, whether for principal or interest,  under
the Notes, and whether any offsets,  counterclaims or defenses exist against the
Obligations.

                                       45

                                  ARTICLE VII

                               NEGATIVE COVENANTS

     So long as any of the Notes shall remain  unpaid,  or the Loan  Commitments
remain in effect,  or any other amount is owing by Borrower or any  Mortgagor to
Administrative  Agent or any Bank  hereunder  or under any other Loan  Document,
Borrower shall not do any or all of the following:

     SECTION 7.01.Mergers Etc.  Merge or  consolidate  with any Person (except
where Borrower or a Person wholly-owned by Borrower is the surviving entity), or
sell, assign,  lease or otherwise dispose of (whether in one transaction or in a
series of  transactions)  all or  substantially  all of its assets  (whether now
owned or  hereafter  acquired),  or enter  into any  agreement  to do any of the
foregoing.  (Borrower  shall deliver to  Administrative  Agent, at least fifteen
(15)  business  days prior to the closing of any  transaction  described in this
Section,  a  compliance  certificate  of the  sort  required  by  clause  (b) of
paragraph (3) of Section 6.09, prepared on a pro-forma basis after giving effect
to such transaction.)

     SECTION  7.02.Investments.  Make any loan or  advance  to any  Person  or
purchase or otherwise  acquire any capital stock,  assets,  obligations or other
securities  of, make any capital  contribution  to, or  otherwise  invest in, or
acquire any interest in, any Person (any such  transaction,  an "Investment") if
(1) the Investment is in connection  with something other than a retail shopping
center and the amount of any single such Investment (or the aggregate  amount of
any single such Investment together with all related Investments),  would exceed
20% of Net Worth, (2) except to the extent  permitted by clause (3) below,  such
Investment  constitutes  the  acquisition of a minority  interest in a Person (a
"Minority Interest") and the amount of such Investment,  together with the value
of all other Minority  Interests acquired after the Closing Date contributing to
Capitalization  Value,  would  exceed  10% of Net  Worth or (3) such  Investment
constitutes the acquisition of a Minority Interest in a regional shopping center
or portfolio  of regional  shopping  centers and the amount of such  Investment,
together with the value of all other such Minority  Interests,  would exceed 20%
of Net Worth. A 50% beneficial  interest in a Person,  in connection  with which
the holder thereof  exercises  joint control over such Person with the holder(s)
of the other 50% beneficial interest, shall not constitute a "Minority Interest"
for purposes of this Section.

     SECTION 7.03.Sale of Assets.  Effect a Disposition of any of its now owned
or  hereafter  acquired  assets,  including  assets  in  which  Borrower  owns a
beneficial  interest  through its  ownership  of  interests  in joint  ventures,
aggregating more than 20% of Capitalization Value.

     SECTION  7.04.Interest  Rate  Hedging.  Permit or suffer more than 25% of
Total Outstanding Indebtedness not to be "hedged"; for purposes of this Section,
"hedged" shall mean bearing interest at an effective fixed rate, either pursuant
to the debt  instrument  itself or through the  operation of a "cap",  "collar",
"swap" or comparable interest rate protection contract, such debt instrument, or
instrument  creating the "cap",  "collar",  "swap" or  comparable  interest rate
protection  contract,  as the case may be,  having an original  term of at least
twelve (12)

                                       46

months  (unless less than twelve (12) months  remains  until the maturity of the
debt which is hedged,  in which case the required term shall be such period less
than twelve (12) months).

     SECTION 7.05.Control of Borrower. At any time permit or suffer the failure
or inability of TCI to be the managing general partner of Borrower.

     SECTION  7.06.Certain  Restrictions  on  Activities  of TCI. At any time,
suffer  or permit  TCI to incur any Debt in its own name or to own any  material
assets other than its  interests in Borrower  and  incidental  assets and assets
which,  for legitimate  business  purposes,  must be owned by TCI on a temporary
basis prior to being  transferred  to Borrower,  or engage in any business other
than the ownership of such interests.

                                  ARTICLE VIII

                       FINANCIAL COVENANTS AND ADJUSTMENTS

     SECTION 8.01.Financial Covenants. So long as any of the Notes shall remain
unpaid,  or the Loan Commitments  shall remain in effect, or any other amount is
owing to  Administrative  Agent or any Bank  under this  Agreement  or under any
other Loan Document, Borrower shall not permit or suffer:

          (1)Net Worth. At any time, Net Worth to be less than  $1,250,000,000;
     or

          (2)Leverage Ratio. At any time, Leverage Ratio to exceed 65%; or

          (3) Relationship of Combined EBITDA to Fixed Charges. As of the end of
     any  calendar  quarter,  the ratio of (i)  Combined  EBITDA  to (ii)  Fixed
     Charges,  each for the twelve  (12)-month  period then ended and taken as a
     whole, to be less than 1.50 to 1.00; or

          (4)Relationship of Combined EBITDA to Total Outstanding Indebtedness.
     As  of  the  end  of  any  calendar  quarter,  the  ratio  (expressed  as a
     percentage) of (i) Combined  EBITDA for the twelve  (12)-month  period then
     ended and taken as a whole to (ii) Total Outstanding Indebtedness as of the
     end of such calendar quarter, to be less than 12%; or

          (5)Payout Ratio. Any Restricted  Payment to be made during any of its
     fiscal quarters,  which, when added to all Restricted  Payments made during
     the  three  (3)  immediately  preceding  fiscal  quarters,  exceeds  95% of
     Distributable  Cash  Flow;provided,however,  that  Borrower  shall  be
     permitted,  provided there exists no Event of Default,  to make  Restricted
     Payments  in  excess  of  95%  of  Distributable  Cash  Flow  (i) as may be
     necessary  under Section 857(a) of the Code to maintain TCI's tax status as
     a real estate  investment  trust,  (ii)  pursuant to Section 5.2 (a) (i) or
     Section 5.3 of Borrower's  agreement of limited  partnership,  or any other
     provision of Borrower's agreement of limited  partnership,  as the same may
     hereafter be amended, that requires  preferential  distributions to be made
     or (iii)  pursuant  to Section  5.2 (a) (iii) of  Borrower's  agreement  of
     limited partnership, to the extent that such distributions pursuant to said
     Section 5.2 (a) (iii) derive from the  disposition of any property owned by
     Borrower at any time prior to May 6, 2000.  For  purposes of this  Article,
     "Restricted  Payment" means any

                                       47

     distribution or other payment made out of Funds From Operations by Borrower
     to its partners; or

          (6)Property  Debt  Yield.  As of the  end of any  calendar  quarter,
     Property Debt Yield for such calendar quarter to be less than 13%; or

          (7)Relationship of Property EBITDA to Interest  Expense on Loans. As
     of the end of any calendar  quarter,  the ratio of (i)  Property  EBITDA to
     (ii) that portion of Interest Expense  attributable to the Loans,  each for
     the prior twelve  (12)-month  period then ended and taken as a whole, to be
     less than 1.75 to 1.00.

     SECTION  8.02.Certain  Pro-Forma   Adjustments.   For  purposes  of  the
calculation of the financial  covenants set forth in Section 8.01, the following
adjustments  shall  be made  in the  case of  each  property  acquired,  or each
"property put into service",  or each property  disposed of, by Borrower  during
the applicable test period:

          (1) In the case of each  property  acquired or put into  service,  the
     contribution of said property to  Capitalization  Value shall be the lesser
     of (a) such property's contribution to Combined EBITDA, annualized based on
     Borrower's  period of ownership or  operation,  divided by 8.00% or (b) the
     acquisition  cost or cost of the  property.  In the  case of each  property
     disposed of by Borrower  during the applicable  test period,  such property
     shall be deemed to have made no  contribution to  Capitalization  Value for
     the applicable twelve (12)-month period.

          (2) In the case of each  property  acquired or put into  service,  the
     contribution  of said  property to Combined  EBITDA shall be an  annualized
     amount based upon the period of Borrower's  ownership or operation.  In the
     case of each property  disposed of by Borrower  during the applicable  test
     period,  such  property  shall be deemed to have  made no  contribution  to
     Combined EBITDA for the applicable twelve (12)-month period.

          (3) In the case of each  property  acquired or put into  service,  the
     contribution of said property to Interest Expense for the applicable twelve
     (12)-month period shall be equal to actual interest expense with respect to
     the Debt incurred or assumed in connection with the  acquisition,  from the
     date of the acquisition or the date the asset is put into service until the
     end of such  twelve  (12)-month  period,  annualized.  In the  case of each
     property disposed of during the applicable test period, such property shall
     be deemed to have made no contribution to Interest Expense for such period.

     In addition,  if any Debt of Borrower is  refinanced  during an  applicable
test period,  the calculation of Interest  Expense shall be adjusted as follows.
The  contribution  of the Debt that was  refinanced to Interest  Expense for the
applicable twelve (12)-month period shall be equal to actual interest expense on
the refinanced  Debt from the date of the  refinancing to the end of such twelve
(12)-month period, annualized.

     As used in this Section 8.02,  the term  "property put into service"  means
any  property  that has been  opened to the  public for  business  and which has
generated revenues for a period of at least thirty (30) days.

                                       48

                                   ARTICLE IX

                                EVENTS OF DEFAULT

     SECTION 9.01.Events of Default.  Any of the following  events shall be an
"Event of Default":

          (1) If Borrower  shall:  fail to pay the principal of any Notes as and
     when due; or fail to pay interest accruing on any Notes as and when due and
     such failure to pay shall  continue  unremedied for five (5) days after the
     due date of such  interest;  or fail to pay any fee or any other amount due
     under this  Agreement or any other Loan  Document or the  Supplemental  Fee
     Letter as and when due and such  failure to pay shall  continue  unremedied
     for two (2) days after  notice by  Administrative  Agent of such failure to
     pay; or

          (2)  If  any  representation  or  warranty  made  by  Borrower  or any
     Mortgagor in any Loan  Document or which is  contained in any  certificate,
     document, opinion, financial or other statement furnished at any time under
     or in connection with a Loan Document shall prove to have been incorrect in
     any material respect on or as of the date made or deemed made; or

          (3) If (a)  Borrower  shall  fail to  perform  or  observe  any  term,
     covenant  or  agreement  contained  in Article  VII or Article  VIII or (b)
     Borrower  or any  Mortgagor  shall fail to  perform  or  observe  any term,
     covenant or agreement  contained  in Article VI or  otherwise  contained in
     this Agreement (other than obligations  specifically  referred to elsewhere
     in this Section) or in any other Loan Document,  or in the Supplemental Fee
     Letter or in any other  document  executed by Borrower or any Mortgagor and
     delivered to  Administrative  Agent and/or the Banks in connection with the
     transactions  contemplated  hereby and such  failure  under this clause (b)
     shall remain  unremedied  for thirty (30)  consecutive  calendar days after
     notice by  Administrative  Agent to Borrower  thereof (or such shorter cure
     period  as  may  be  expressly  prescribed  in  the  applicable  document);
provided,however,  that if any such default under clause (b) above cannot
     by its nature be cured within such thirty (30) day, or shorter, as the case
     may be, grace period and so long as Borrower or the  applicable  Mortgagor,
     as the case may be, shall have  commenced cure within such thirty (30) day,
     or  shorter,  as the case may be,  grace  period  and  shall,  at all times
     thereafter,  diligently  prosecute the same to completion,  Borrower or the
     applicable Mortgagor,  as the case may be, shall have an additional period,
     not to exceed sixty (60) days, to cure such default; in no event,  however,
     is the foregoing intended to effect an extension of the Maturity Date; or

          (4) If either  Borrower  or TCI shall fail (a) to pay any Debt  (other
     than the payment obligations described in paragraph (1) of this Section) in
     an  amount  equal to or  greater  than  $10,000,000  when due  (whether  by
     scheduled  maturity,   required   prepayment,   acceleration,   demand,  or
     otherwise)  or (b) to perform or observe any material  term,  covenant,  or
     condition under any agreement or instrument relating to any such Debt, when
     required to be  performed  or  observed,  if the effect of such  failure to
     perform or  observe is to  accelerate,  or to permit the  acceleration  of,
     after the  giving of

                                       49

     notice or the lapse of time,  or both  (other than in cases  where,  in the
     judgment of the Required Banks,  meaningful discussions likely to result in
     (i) a waiver or cure of the failure to perform or observe or (ii) otherwise
     averting such acceleration are in progress between Borrower and the obligee
     of such  Debt),  the  maturity  of such  Debt,  or any such  Debt  shall be
     declared to be due and payable,  or required to be prepaid (other than by a
     regularly scheduled or otherwise required prepayment),  prior to the stated
     maturity thereof; or

          (5) If any Mortgagor,  TCI, Borrower,  or any Affiliate(s) (other than
     any Mortgagor) of Borrower to which  $100,000,000  or more in the aggregate
     of  Capitalization  Value is attributable,  shall: (a) generally not, or be
     unable to, or shall  admit in writing  its  inability  to, pay its debts as
     such  debts  become  due;  or (b) make an  assignment  for the  benefit  of
     creditors,  petition  or apply to any  tribunal  for the  appointment  of a
     custodian,  receiver or trustee for it, all or any portion of any  Property
     or the  Improvements  thereon  or all or a  substantial  part of its  other
     assets;   or  (c)   commence   any   proceeding   under   any   bankruptcy,
     reorganization,   arrangement,   readjustment   of  debt,   dissolution  or
     liquidation Law of any jurisdiction, whether now or hereafter in effect; or
     (d) have had any such petition or application  filed or any such proceeding
     shall have been commenced, against it or all or any portion of any Property
     or the  Improvements  thereon,  in which an  adjudication or appointment is
     made or order for relief is  entered,  or which  petition,  application  or
     proceeding remains  undismissed or unstayed for a period of sixty (60) days
     or more;  or (e) be the  subject of any  proceeding  under which all or any
     portion of any Property or the Improvements thereon or all or a substantial
     part  of its  other  assets  may  be  subject  to  seizure,  forfeiture  or
     divestiture;  or (f) by  any  act or  omission  indicate  its  consent  to,
     approval of or acquiescence in any such petition, application or proceeding
     or order for relief or the appointment of a custodian,  receiver or trustee
     for all or any portion of any Property or the  Improvements  thereon or all
     or a  substantial  part of its  other  property;  or (g)  suffer  any  such
     custodianship,  receivership  or trusteeship  for all or any portion of any
     Property or the  Improvements  thereon or all or a substantial  part of its
     other property, to continue undischarged for a period of sixty (60) days or
     more; or

          (6) If one or more  judgments,  decrees or orders  for the  payment of
     money in excess of $10,000,000 in the aggregate  shall be rendered  against
     Borrower, TCI or any Mortgagor,  and any such judgments,  decrees or orders
     shall  continue  unsatisfied  and in effect  for a period  of  thirty  (30)
     consecutive days without being vacated, discharged,  satisfied or stayed or
     bonded pending appeal; or

          (7) If at any time any portion of Borrower's or any Mortgagor's assets
     constitute plan assets for ERISA purposes  (within the meaning of C.F.R.ss.
     2510.3-101);  or if any of the  following  events shall occur or exist with
     respect  to  Borrower,  any  Mortgagor  or any  ERISA  Affiliate:  (a)  any
     Prohibited  Transaction  involving any Plan; (b) any Reportable  Event with
     respect to any Plan; (c) the filing under Section 4041 of ERISA of a notice
     of intent to terminate  any Plan or the  termination  of any Plan;  (d) any
     event or circumstance  which might constitute grounds entitling the PBGC to
     institute  proceedings  under Section 4042 of ERISA for the termination of,
     or for the  appointment  of a  trustee  to  administer,  any  Plan,  or the
     institution by the PBGC of any such proceedings; or (e) complete or partial
     withdrawal under Section 4201 or 4204 of ERISA

                                       50

     from a Multiemployer Plan or the reorganization, insolvency, or termination
     of any  Multiemployer  Plan;  and in each  case  above,  if such  event  or
     conditions,  if any, could in the opinion of any Bank subject Borrower, any
     Mortgagor or any ERISA Affiliate to any tax, penalty, or other liability to
     a Plan,  Multiemployer  Plan,  the PBGC or  otherwise  (or any  combination
     thereof) which in the aggregate exceeds or may exceed $500,000; or

          (8) If at any time TCI is not a qualified real estate investment trust
     under Sections 856 through 860 of the Code or is not listed on the New York
     Stock Exchange or the American Stock Exchange; or

          (9) If at any time  Borrower  or any  Mortgagor  fails to operate as a
     real estate  operating  company for ERISA  purposes  (within the meaning of
     C.F.R.ss.2510.3-101); or

          (10) If The Taubman Company Limited Partnership,  the entity presently
     providing  property  management  and leasing  services for all the regional
     shopping  center  properties  in which  Borrower has an ownership  interest
     (other than the "value  center"  property known as Arizona Mills located in
     Tempe, Arizona),  shall discontinue providing such services for 25% or more
     of the regional  shopping center  properties then owned in whole or in part
     by Borrower; or

          (11) If any  Mortgage  shall at any time and for any  reason  cease to
     create a valid and perfected first priority Lien on the Mortgaged  Property
     purported to be subject thereto or to be in full force and effect; or shall
     be  declared  null and void;  or any party  thereto  shall deny any further
     liability or obligation thereunder; or

          (12) If there shall occur an "Event of Default" under any Mortgage (as
     such quoted term is defined in such Mortgage).

     SECTION  9.02.Remedies.  If any  Event  of  Default  shall  occur  and be
continuing,  Administrative  Agent shall, upon request of the Required Banks, by
notice to Borrower,  (1) declare the outstanding principal balance of the Notes,
all interest thereon, and all other amounts payable under this Agreement and the
other Loan  Documents to be forthwith due and payable,  whereupon  such balance,
all such  interest,  and all such amounts due under this Agreement and under the
other Loan  Documents  shall  become and be forthwith  due and payable,  without
presentment,  demand,  protest,  or further notice of any kind, all of which are
hereby expressly waived by Borrower;  and/or (2) exercise any remedies  provided
in any of the Loan Documents or by law.

                                   ARTICLE X

                   ADMINISTRATIVE AGENT; RELATIONS AMONG BANKS

     SECTION 10.01.Appointment,  Powers and Immunities of Administrative Agent.
Each Bank hereby irrevocably appoints and authorizes Administrative Agent to act
as its agent hereunder and under any other Loan Document with such powers as are
specifically  delegated to  Administrative  Agent by the terms of this Agreement
and any other Loan  Document,  together with such other powers as are reasonably
incidental   thereto.   Administrative   Agent   shall   have   no   duties   or
responsibilities  except those  expressly  set forth in this  Agreement

                                       51

and any other Loan  Document or required by law, and shall not by reason of this
Agreement  be a  fiduciary  or trustee  for any Bank  except to the extent  that
Administrative  Agent acts as an agent with respect to the receipt or payment of
funds (nor shall  Administrative  Agent have any fiduciary  duty to Borrower nor
shall any Bank  have any  fiduciary  duty to  Borrower  or to any  other  Bank).
Administrative  Agent shall not be  responsible  to the Banks for any  recitals,
statements,  representations  or  warranties  made by Borrower  or any  officer,
partner or official of Borrower or any other Person  contained in this Agreement
or any  other  Loan  Document,  or in  any  certificate  or  other  document  or
instrument  referred  to or  provided  for in, or received by any of them under,
this Agreement or any other Loan Document, or for the value, legality, validity,
effectiveness,  genuineness,  enforceability or sufficiency of this Agreement or
any other Loan  Document  or any other  document  or  instrument  referred to or
provided  for herein or  therein,  for the  perfection  or  priority of any Lien
securing the  Obligations or for any failure by Borrower or any other obligor to
perform any of its obligations hereunder or thereunder. Administrative Agent may
employ agents and attorneys-in-fact  and shall not be responsible,  except as to
money or securities  received by it or its authorized agents, for the negligence
or  misconduct  of any such  agents  or  attorneys-in-fact  selected  by it with
reasonable  care.  Neither  Administrative  Agent  nor  any  of  its  directors,
officers,  employees  or agents  shall be liable or  responsible  for any action
taken or  omitted  to be taken by it or them  hereunder  or under any other Loan
Document or in  connection  herewith or  therewith,  except for its or their own
gross negligence or willful misconduct.  Borrower shall pay any fee agreed to by
Borrower  and  Administrative  Agent  with  respect  to  Administrative  Agent's
services hereunder.

     SECTION 10.02.Reliance by Administrative Agent. Administrative Agent shall
be  entitled  to rely  upon any  certification,  notice  or other  communication
(including any thereof by telephone, telex, telegram or cable) believed by it to
be genuine  and  correct  and to have been signed or sent by or on behalf of the
proper  Person or Persons,  and upon  advice and  statements  of legal  counsel,
independent  accountants  and other experts  selected by  Administrative  Agent.
Administrative Agent may deem and treat each Bank as the holder of the Loan made
by it for all purposes  hereof and shall not be required to deal with any Person
who has acquired a Participation in any Loan or Participation from a Bank. As to
any matters  not  expressly  provided  for by this  Agreement  or any other Loan
Document,  Administrative Agent shall in all cases be fully protected in acting,
or in refraining from acting,  hereunder in accordance with instructions  signed
by the Required  Banks,  and such  instructions  of the  Required  Banks and any
action taken or failure to act pursuant  thereto  shall be binding on all of the
Banks and any other holder of all or any portion of any Loan or Participation.

     SECTION 10.03.Defaults.  Administrative Agent shall not be deemed to have
knowledge of the  occurrence of a Default or Event of Default  (other than those
relating to the payment of principal or interest)  unless  Administrative  Agent
has received notice from a Bank or Borrower  specifying such Default or Event of
Default and stating that such notice is a "Notice of Default." In the event that
Administrative  Agent  receives such a notice of the  occurrence of a Default or
Event of Default,  Administrative  Agent shall give prompt notice thereof to the
Banks.  Administrative  Agent,  following  consultation  with the  Banks,  shall
(subject to Section  10.07) take such  action  with  respect to such  Default or
Event of  Default  which is  continuing,  or with  respect  to the  exercise  of
remedies,  including with respect to realization on, or operation or disposition
of, any Collateral,  as shall be directed by the Required Banks;  provided that,
unless and until  Administrative  Agent  shall have  received  such  directions,

                                       52

Administrative  Agent may take such action,  or refrain from taking such action,
with respect to such  Default or Event of Default as it shall deem  advisable in
the best interest of the Banks; and provided further that  Administrative  Agent
shall not send a notice of Default  or  acceleration  to  Borrower  without  the
approval  of the  Required  Banks.  In no event  shall  Administrative  Agent be
required to take any such action which it determines to be contrary to law.

     SECTION 10.04.Rights of  Administrative  Agent as a Bank. With respect to
its Loan  Commitment  and the Loan provided by it,  Administrative  Agent in its
capacity as a Bank hereunder shall have the same rights and powers  hereunder as
any  other  Bank and may  exercise  the same as  though  it were not  acting  as
Administrative  Agent, and the term "Bank" or "Banks" shall,  unless the context
otherwise  indicates,  include  Administrative  Agent in its capacity as a Bank.
Administrative  Agent and its Affiliates may (without having to account therefor
to any Bank)  accept  deposits  from,  lend money to (on a secured or  unsecured
basis),  and generally  engage in any kind of banking,  trust or other  business
with  Borrower  (and any  Affiliates  of  Borrower)  as if it were not acting as
Administrative Agent.

     SECTION   10.05.Sharing  of  Costs  by  Banks;   Indemnification   of
Administrative  Agent.  Each Bank agrees to pay its ratable share,  based on
the  respective  outstanding  principal  balances  under  its Note and the other
Notes,  of any expenses  incurred (and not paid or reimbursed by Borrower  after
demand for payment is made by Administrative Agent) by or on behalf of the Banks
in  connection  with  any  Default  or  Event  of  Default,  including,  without
limitation,  costs of  enforcement of the Loan Documents and any advances to pay
taxes or insurance premiums or otherwise to preserve the Lien of any Mortgage or
to preserve or protect any Mortgaged Property.  In the event a Bank fails to pay
its share of expenses as  aforesaid,  and all or a portion of such unpaid amount
is paid by Administrative  Agent and/or one or more of the other Banks, then the
defaulting  Bank shall reimburse  Administrative  Agent and/or the other Bank(s)
for the  portion of such unpaid  amount paid by it or them,  as the case may be,
together  with  interest  thereon  at the Base Rate from the date of  payment by
Administrative Agent and/or the other Bank(s). In addition,  each Bank agrees to
indemnify Administrative Agent (to the extent not reimbursed under Section 12.04
or under the other  applicable  provisions  of any Loan  Document,  but  without
limiting  the  obligations  of  Borrower  under  Section  12.04  or  such  other
provisions),  for its Pro Rata  Share of any and all  liabilities,  obligations,
losses,  damages,  penalties,  actions,  judgments,  suits,  costs,  expenses or
disbursements  of any  kind and  nature  whatsoever  which  may be  imposed  on,
incurred by or asserted against  Administrative  Agent in any way relating to or
arising out of this  Agreement,  any other Loan Document or any other  documents
contemplated by or referred to herein or the transactions contemplated hereby or
thereby (including, without limitation, the costs and expenses which Borrower is
obligated to pay under Section 12.04 or under any other applicable provisions of
any Loan  Document) or the  enforcement of any of the terms hereof or thereof or
of any such other  documents or  instruments;provided, however,  that no Bank
shall be liable for (1) any of the  foregoing  to the extent they arise from the
gross negligence or willful  misconduct of the party to be indemnified,  (2) any
loss of principal or interest with respect to Administrative Agent's Loan or (3)
any loss suffered by  Administrative  Agent in  connection  with a swap or other
interest rate hedging arrangement entered into with Borrower.

     SECTION 10.06.Non-Reliance on Administrative  Agent and Other Banks. Each
Bank agrees that it has,  independently  and without reliance on  Administrative
Agent or any

                                       53

other  Bank,  and  based on such  documents  and  information  as it has  deemed
appropriate,  made its own  analysis  of the  Collateral  and of the  credit  of
Borrower and each  Mortgagor,  and its own decision to enter into this Agreement
and that it will,  independently and without reliance upon Administrative  Agent
or any other Bank, and based on such documents and  information as it shall deem
appropriate  at the time,  continue to make its own  analysis  and  decisions in
taking or not taking  action under this  Agreement  or any other Loan  Document.
Administrative  Agent shall not be  required  to keep itself  informed as to the
performance  or observance by Borrower or any Mortgagor of this Agreement or any
other Loan Document or any other document  referred to or provided for herein or
therein  or to  inspect  the  properties  (including,  without  limitation,  any
Property) or books of Borrower or any Mortgagor. Except for notices, reports and
other documents and information  expressly required to be furnished to the Banks
by Administrative Agent hereunder,  Administrative Agent shall not have any duty
or  responsibility  to  provide  any Bank with any  credit or other  information
concerning  the  affairs,  financial  condition  or  business of  Borrower,  any
Mortgagor or any other  Affiliate of Borrower which may come into the possession
of Administrative Agent or any of its Affiliates. Administrative Agent shall not
be required to file this  Agreement,  any other Loan Document or any document or
instrument  referred  to herein or  therein,  for record or give  notice of this
Agreement,  any other Loan  Document or any document or  instrument  referred to
herein or therein, to anyone.

     SECTION 10.07.Failure of  Administrative  Agent to Act. Except for action
expressly required of Administrative Agent hereunder, Administrative Agent shall
in all cases be fully  justified in failing or refusing to act hereunder  unless
it shall have received further assurances (which may include cash collateral) of
the  indemnification  obligations of the Banks under Section 10.05 in respect of
any and all  liability  and  expense  which may be  incurred  by it by reason of
taking or  continuing  to take any such action.  If any  indemnity  furnished to
Administrative  Agent for any purpose  shall,  in the opinion of  Administrative
Agent, be insufficient or become impaired,  Administrative Agent may call for an
additional indemnity and cease, or not commence,  the action indemnified against
until such additional indemnity is furnished.

     SECTION   10.08.Resignation   or   Removal  of   Administrative   Agent.
Administrative  Agent hereby  agrees not to  unilaterally  resign  except in the
event it becomes an Affected  Bank and is removed or replaced as a Bank pursuant
to  Section   3.07,   in  which  event  it  shall  have  the  right  to  resign.
Administrative  Agent may be removed  at any time with or  without  cause by the
Required  Banks,  provided  that  Borrower and the other Banks shall be promptly
notified thereof. Upon any such resignation or removal, the Required Banks shall
have the right to  appoint a  successor  Administrative  Agent  which  successor
Administrative  Agent,  so long as it is  reasonably  acceptable to the Required
Banks,  shall be that Bank then  having  the  greatest  Loan  Commitment.  If no
successor  Administrative  Agent shall have been so  appointed  by the  Required
Banks and shall have accepted such appointment within thirty (30) days after the
Required Banks' removal of the retiring  Administrative Agent, then the retiring
Administrative   Agent  may,  on  behalf  of  the  Banks,  appoint  a  successor
Administrative Agent, which shall be one of the Banks. The Required Banks or the
retiring Administrative Agent, as the case may be, shall upon the appointment of
a  successor  Administrative  Agent  promptly so notify  Borrower  and the other
Banks. Upon the acceptance of any appointment as Administrative  Agent hereunder
by a successor  Administrative Agent, such successor  Administrative Agent shall
thereupon succeed to and become vested with all the rights,  powers,  privileges
and duties of the retiring Administrative

                                       54

Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations  hereunder.  After any retiring  Administrative  Agent's removal
hereunder  as  Administrative  Agent,  the  provisions  of this  Article X shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Administrative Agent.

     SECTION  10.09.Amendments  Concerning  Agency  Function.  Notwithstanding
anything to the contrary contained in this Agreement, Administrative Agent shall
not be  bound by any  waiver,  amendment,  supplement  or  modification  of this
Agreement or any other Loan Document  which affects its duties,  rights,  and/or
functions  hereunder or thereunder  unless it shall have given its prior written
consent thereto.

     SECTION 10.10.Liability of  Administrative  Agent.  Administrative  Agent
shall not have any liabilities or responsibilities to Borrower on account of the
failure  of any Bank to  perform  its  obligations  hereunder  or to any Bank on
account of the failure of Borrower to perform its obligations hereunder or under
any other Loan Document.

     SECTION 10.11.Transfer of Agency Function. Without the consent of Borrower
or any Bank,  Administrative Agent may at any time or from time to time transfer
its functions as  Administrative  Agent hereunder to any of its offices wherever
located in the United States,  provided that Administrative Agent shall promptly
notify Borrower and the Banks thereof.

     SECTION 10.12.Non-Receipt of Funds by Administrative  Agent  Adjustments.
(a) Unless  Administrative  Agent  shall  have  received  notice  from a Bank or
Borrower  (either one as  appropriate  being the  "Payor")  prior to the date on
which such Bank is to make  payment  hereunder  to  Administrative  Agent of the
proceeds of a Loan or Borrower is to make payment to  Administrative  Agent,  as
the case may be (either such payment being a "Required  Payment"),  which notice
shall be  effective  upon  receipt,  that the Payor  will not make the  Required
Payment in full to Administrative  Agent,  Administrative  Agent may assume that
the Required Payment has been made in full to Administrative Agent on such date,
and Administrative  Agent in its sole discretion may, but shall not be obligated
to, in reliance upon such assumption,  make the amount thereof  available to the
intended  recipient on such date.  If and to the extent the Payor shall not have
in fact so made  the  Required  Payment  in full to  Administrative  Agent,  the
recipient  of such  payment  shall repay to  Administrative  Agent  forthwith on
demand such amount made available to it together with interest thereon, for each
day from the date such  amount was so made  available  by  Administrative  Agent
until the date  Administrative  Agent recovers such amount, at the Federal Funds
Rate for three (3) Banking Days and thereafter at the Base Rate.

     (b) If,  after  Administrative  Agent  has paid  each  Bank's  share of any
payment  received  or applied by  Administrative  Agent in respect of the Loans,
that  payment  is  rescinded  or must  otherwise  be  returned  or paid  over by
Administrative  Agent,  whether  pursuant to any  bankruptcy or insolvency  Law,
sharing of payments clause of any loan agreement or otherwise,  such Bank shall,
at Administrative Agent's request,  promptly return its share of such payment or
application to  Administrative  Agent,  together with such Bank's  proportionate
share of any  interest or other  amount  required  to be paid by  Administrative
Agent with respect to such payment or  application.  In addition,  if a court of
competent jurisdiction shall adjudge that any

                                       55

amount received and distributed by  Administrative  Agent is to be repaid,  each
Person to whom any such distribution  shall have been made shall either repay to
Administrative  Agent its share of the amount so  adjudged to be repaid or shall
pay over the same in such manner and to such Persons as shall be  determined  by
such court.

     SECTION 10.13.Withholding Taxes. Each Bank represents that it is entitled
to receive any payments to be made to it hereunder  without the  withholding  of
any tax and will  furnish to  Administrative  Agent such forms,  certifications,
statements and other documents as  Administrative  Agent or Borrower may request
from time to time to evidence such Bank's  exemption from the withholding of any
tax imposed by any jurisdiction or to enable Administrative Agent to comply with
any  applicable  Laws  relating  thereto.  Without  limiting  the  effect of the
foregoing,  if any Bank is not created or organized under the Laws of the United
States or any state thereof,  such Bank will furnish to  Administrative  Agent a
U.S.  Internal Revenue Service Form W-8ECI in respect of all payments to be made
to such Bank by Borrower or  Administrative  Agent under this  Agreement  or any
other Loan Document or a U.S. Internal Revenue Service Form W-8BEN  establishing
such Bank's complete  exemption from United States withholding tax in respect of
payments to be made to such Bank by Borrower or Administrative  Agent under this
Agreement  or any other  Loan  Document,  or such other  forms,  certifications,
statements or documents, duly executed and completed by such Bank as evidence of
such Bank's  exemption from the  withholding  of U.S. tax with respect  thereto.
Administrative  Agent shall not be obligated  to make any payments  hereunder to
such Bank in respect of any Loan or Participation or such Bank's Loan Commitment
or obligation to purchase Participations until such Bank shall have furnished to
Administrative Agent the requested form, certification, statement or document.

     SECTION 10.14.Pro Rata Treatment. Except to the extent otherwise provided,
each  advance  of  proceeds  of the  Loans  shall be made by the  Banks  ratably
according to the amounts of their respective Loan Commitments.

     SECTION  10.15.Sharing of Payments  Among  Banks.  If a Bank shall obtain
payment of any  principal  of or  interest  on any Loan made by it  through  the
exercise of any right of setoff,  banker's lien,  counterclaim,  or by any other
means  (including  direct  payment),  and  such  payment  results  in such  Bank
receiving a greater payment than it would have been entitled to had such payment
been paid directly to  Administrative  Agent for disbursement to the Banks, then
such Bank shall promptly  purchase for cash from the other Banks  Participations
in the  Loans  made by the other  Banks in such  amounts,  and make  such  other
adjustments  from  time to time as  shall be  equitable  to the end that all the
Banks shall share  ratably  the benefit of such  payment.  To such end the Banks
shall  make  appropriate   adjustments   among  themselves  (by  the  resale  of
Participations sold or otherwise) if such payment is rescinded or must otherwise
be restored.  Borrower agrees that any Bank so purchasing a Participation in the
Loans made by other  Banks may  exercise  all rights of setoff,  banker's  lien,
counterclaim  or similar  rights  with  respect to such  Participation.  Nothing
contained  herein  shall  require any Bank to  exercise  any such right or shall
affect the right of any Bank to exercise, and retain the benefits of exercising,
any such right with respect to any other indebtedness of Borrower.

     SECTION 10.16.Possession of Documents.  Each Bank shall keep possession of
its own Note(s).  Administrative  Agent shall hold all the other Loan  Documents

                                       56

and related  documents  in its  possession  and  maintain  separate  records and
accounts   with  respect   thereto,   and  shall  permit  the  Banks  and  their
representatives  access at all reasonable  times to inspect such Loan Documents,
related documents, records and accounts.

     SECTION 10.17.Minimum Commitment by Administrative Agent.  Notwithstanding
the provisions of Section 12.05,  Administrative  Agent agrees, so long as there
exists no Event of Default,  to maintain a Loan  Commitment in an amount no less
than  $15,000,000,  and further  agrees to hold and not to participate or assign
any of such amount other than an assignment to a Federal  Reserve Bank or to the
Parent or a majority-owned subsidiary of Administrative Agent.

                                   ARTICLE XI

                              NATURE OF OBLIGATIONS

     SECTION 11.01.Absolute and Unconditional  Obligations.  Borrower and each
Mortgagor  acknowledge and agree that their  obligations  and liabilities  under
this  Agreement  and  under the  other  Loan  Documents  shall be  absolute  and
unconditional  irrespective of (1) any lack of validity or enforceability of any
of the Obligations,  any Loan Documents, or any agreement or instrument relating
thereto,  (2) any change in the time,  manner or place of payment  of, or in any
other term in respect of, all or any of the Obligations,  or any other amendment
or waiver of or consent to any  departure  from any Loan  Documents or any other
documents  or  instruments  executed  in  connection  with  or  related  to  the
Obligations,  (3) any exchange or release of any  Collateral,  or any release of
any  other  Person  from  all  or  any  of the  Obligations  or  (4)  any  other
circumstances  which might  otherwise  constitute a defense  available  to, or a
discharge of, Borrower or any other Person in respect of the Obligations.

     The Obligations  shall not be conditioned or contingent upon the pursuit by
any Bank or any other Person at any time of any right or remedy against Borrower
or any other Person which may be or become  liable in respect of all or any part
of the  Obligations or against any Collateral or guarantee  therefor or right of
setoff with respect thereto.

     SECTION 11.02.Non-Recourse.  (a) Notwithstanding anything to the contrary
contained in this Agreement, in any of the other Loan Documents, or in any other
instruments,  certificates,  documents or agreements executed in connection with
the Loans (all of the  foregoing,  for  purposes  of this  Section,  hereinafter
referred to,  individually and collectively,  as the "Relevant  Documents"),  no
recourse  under or upon any  Obligation,  representation,  warranty,  promise or
other matter whatsoever shall be had against any of the constituent  partners of
Borrower or their  successors  or assigns (said  constituent  partners and their
successors and assigns,  for purposes of this Section,  hereinafter referred to,
individually and collectively,  as the "TRG Partners"),  and each Bank expressly
waives and releases,  on behalf of itself and its  successors  and assigns,  all
right to assert any liability  whatsoever  under or with respect to the Relevant
Documents  against,  or to satisfy any claim or  obligation  arising  thereunder
against,  any of the TRG  Partners  or out of any  assets  of the TRG  Partners,
provided,however,  that nothing in this Section shall be deemed to (1) release
Borrower from any personal  liability pursuant to, or from any of its respective
obligations  under, the Relevant  Documents,  or from personal liability for its
fraudulent  actions or  fraudulent  omissions,  (2) release any TRG Partner from
personal

                                       57

liability for its or his own  fraudulent  actions or fraudulent  omissions,  (3)
constitute a waiver of any obligation  evidenced or secured by, or contained in,
the Relevant  Documents or affect in any way the validity or  enforceability  of
the Relevant Documents or (4) limit the right of Administrative Agent and/or the
Banks to proceed  against or realize upon all or any part of the  Collateral  or
any and all of the  assets of  Borrower  (notwithstanding  the fact that the TRG
Partners have an ownership interest in Borrower and, thereby, an interest in the
assets of  Borrower)  or to name  Borrower  (or, to the extent that the same are
required by applicable law or are determined by a court to be necessary  parties
in connection with an action or suit against  Borrower or all or any part of the
Collateral,  any of the TRG  Partners) as a party  defendant  in, and to enforce
against all or any part of the Collateral and/or assets of Borrower any judgment
obtained by Administrative Agent and/or the Banks with respect to, any action or
suit under the Relevant  Documents so long as no judgment shall be taken (except
to the extent taking a judgment is required by applicable law or determined by a
court to be necessary to preserve  Administrative  Agent's  and/or Banks' rights
against  Borrower or all or any part of the  Collateral,  but not  otherwise) or
shall be enforced  against the TRG Partners,  their  successors and assigns,  or
their assets.

     (b)  Notwithstanding  anything to the  contrary  contained  in the Relevant
Documents, no recourse under or upon any Obligation,  representation,  warranty,
promise or other matter  whatsoever  shall be had against any of the constituent
partners or members  (other than Borrower and, in such case,  only to the extent
provided in paragraph (a) above) of any Mortgagor or their respective successors
or assigns (said constituent partners or members (other than Borrower) and their
respective  successors  and assigns,  for purposes of this Section,  hereinafter
referred to,  individually and  collectively,  as the "Mortgagor  Partners") and
each Bank expressly waives and releases,  on behalf of itself and its successors
and assigns,  all right to assert any liability whatsoever under or with respect
to the Relevant Documents against, or to satisfy any claim or obligation arising
thereunder  against,  any of the Mortgagor  Partners or out of any assets of the
Mortgagor  Partners,provided,however,  that nothing in this Section shall be
deemed to (1) release any Mortgagor from any personal  liability pursuant to, or
from any of its respective  obligations under, the Relevant  Documents,  or from
personal  liability  for its  fraudulent  actions or fraudulent  omissions,  (2)
release  any  Mortgagor  Partner  from  personal  liability  for  its or his own
fraudulent  actions or  fraudulent  omissions,  (3)  constitute  a waiver of any
obligation  evidenced or secured by, or contained in, the Relevant  Documents or
affect in any way the validity or  enforceability  of the Relevant  Documents or
(4) limit the right of Administrative  Agent and/or the Banks to proceed against
or realize upon all or any part of the  Collateral  or any and all of the assets
of any Mortgagor  (notwithstanding  the fact that the Mortgagor Partners have an
ownership interest in such Mortgagor and, thereby,  an interest in the assets of
such  Mortgagor) or to name any  Mortgagor  (or, to the extent that the same are
required by applicable law or are determined by a court to be necessary  parties
in connection with an action or suit against  Borrower,  Mortgagor or all or any
part of the Collateral,  any of the Mortgagor Partners) as a party defendant in,
and to enforce  against all or any part of the  Collateral  and/or assets of any
Mortgagor any judgment  obtained by  Administrative  Agent and/or the Banks with
respect  to,  any  action or suit  under the  Relevant  Documents  so long as no
judgment  shall be taken  (except to the extent taking a judgment is required by
applicable   law  or   determined  by  a  court  to  be  necessary  to  preserve
Administrative  Agent's and/or Banks' rights against Borrower,  any Mortgagor or
all or any part of the  Collateral,  but not  otherwise)  or  shall be  enforced
against the Mortgagor Partners, their successors and assigns, or their assets.

                                       58

                                  ARTICLE XII

                                  MISCELLANEOUS

     SECTION 12.01.Binding Effect of Request for Advance. By its acceptance of
any advance of proceeds of the Loans  under this  Agreement,  Borrower  shall be
bound in all  respects by the request  for  advance  submitted  on its behalf in
connection  therewith  with the same force and effect as if Borrower  had itself
executed  and  submitted  the request for advance and whether or not the request
for advance is executed and/or submitted by an authorized person.

     SECTION 12.02.Amendments and Waivers.  No amendment or material waiver of
any  provision of this  Agreement or any other Loan  Document nor consent to any
material  departure by Borrower,  any Mortgagor or any other obligor  therefrom,
shall in any event be  effective  unless the same shall be in writing and signed
by the Required Banks and,  solely for purposes of its  acknowledgment  thereof,
Administrative Agent, and then such waiver or consent shall be effective only in
the specific  instance and for the specific  purpose for which given,provided,
however,  that no  amendment,  waiver or consent  shall,  unless in writing  and
signed by all the Banks do any of the following: (1) reduce the principal of, or
interest  on,  the  Notes or any fees due  hereunder  or any  other  amount  due
hereunder or under any other Loan Document;  (2) postpone any date fixed for any
payment of principal  of, or interest on, the Notes or any fees due hereunder or
under any other Loan Document, or waive any default in the payment of principal,
interest or any other amount due hereunder or under any other Loan Document; (3)
change the definition of Required Banks; (4) amend this Section, Section 2.19 or
any other  provision  requiring  the consent or agreement of all the Banks;  (5)
waive any default under paragraph (5) of Section 9.01; (6) release any Mortgagor
from its  obligations  under the Guaranty,  release any material  portion of the
Collateral,  or  subordinate  the  Banks'  Lien on any  material  portion of the
Collateral to a Lien to secure any Debt other than the Loans, other than, in any
such case, in accordance with the provisions of Loan Documents;  or (7) increase
the Total Loan  Commitment,  other than in  accordance  with Section  2.19.  Any
advance of  proceeds of the Loans made prior to or without  the  fulfillment  by
Borrower of all of the  conditions  precedent  thereto,  whether or not known to
Administrative  Agent  and the  Banks,  shall  not  constitute  a waiver  of the
requirement that all conditions,  including the non-performed conditions,  shall
be  required  with  respect  to all future  advances.  No failure on the part of
Administrative  Agent or any Bank to exercise,  and no delay in exercising,  any
right  hereunder  shall  operate as a waiver  thereof or  preclude  any other or
further exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.

     Except  to  the  extent  otherwise   provided  in  Section  2.19,  (1)  all
communications  from  Administrative  Agent to the Banks  requesting  the Banks'
determination,  consent,  approval or disapproval (x) shall be given in the form
of a written  notice to each  Bank,  (y) shall be  accompanied  by or  include a
description  or copy of the  matter  or thing as to  which  such  determination,
approval,   consent  or   disapproval   is  requested   and  (z)  shall  include
Administrative  Agent's recommended course of action or determination in respect
thereof;  (2) each Bank shall reply  promptly,  but in any event within ten (10)
business  days (or five (5)  business  days  with  respect  to any  decision  to
accelerate  or stop  acceleration  of the Loans)  after  receipt of the  request
therefor by  Administrative  Agent (the "Bank Reply  Period");  and (3) unless a
Bank shall give written  notice to  Administrative  Agent that it objects to the
recommendation or determination of

                                       59

Administrative  Agent (together with a written explanation of the reasons behind
such objection) within the Bank Reply Period,  such Bank shall be deemed to have
approved or consented to such recommendation or determination.

     SECTION 12.03.Usury. Anything herein to the contrary notwithstanding,  the
obligations  of Borrower  under this Agreement and the Notes shall be subject to
the  limitation  that  payments of interest  shall not be required to the extent
that receipt thereof would be contrary to provisions of Law applicable to a Bank
limiting rates of interest which may be charged or collected by such Bank.

     SECTION  12.04.Expenses;  Indemnification.  Borrower  agrees to reimburse
Administrative Agent on demand for all reasonable costs,  expenses,  and charges
including,  without  limitation,  all reasonable  fees and charges of engineers,
appraisers  and other  consultants  (provided such other  consultants  have been
engaged with Borrower's consent, not to be unreasonably  withheld or delayed; it
being  understood,  however,  that Borrower  shall have no such right of consent
during the existence of an Event of Default) and external legal counsel incurred
by  Administrative  Agent in connection  with the Loans and to reimburse each of
the Banks for reasonable  legal costs,  expenses and charges incurred by each of
the Banks in connection  with the  performance or enforcement of this Agreement,
the Notes, or any other Loan Documents;provided,however, that Borrower is not
responsible  for costs,  expenses  and charges  incurred by the Bank  Parties in
connection  with the day-to-day  administration  or the syndication of the Loans
(except as otherwise  provided in the Supplemental Fee Letter).  Borrower agrees
to indemnify Administrative Agent and each Bank and their respective Affiliates,
controlling  Persons,  directors,  officers,  employees  and  agents  (each,  an
"Indemnified  Party") from, and hold each of them harmless against,  any and all
losses, liabilities,  claims, damages or expenses, joint or several, incurred by
any of them arising out of or by reason of (x) any claims by brokers due to acts
or  omissions  by  Borrower  or (y)  any  third-party  claims  relating  to this
Agreement,  the Loans,  the use of proceeds of the Loans, and the performance by
BAC (including as Administrative Agent) or any of its Affiliates of the services
contemplated by this Agreement or the Supplemental Fee Letter, and Borrower will
reimburse any Indemnified Party for any and all reasonable  expenses  (including
reasonable  counsel fees and expenses) as they are incurred in  connection  with
the  investigation of or preparation for or defense of any pending or threatened
claim  or any  action  or  proceeding  arising  therefrom,  whether  or not such
Indemnified Party is a party and whether or not such claim, action or proceeding
is  initiated  or  brought  to be by or on  behalf  of  Borrower  or  any of its
Affiliates and whether or not any of the transactions  contemplated hereby or by
the  Supplemental  Fee  Letter are  consummated  or this  Agreement  or the Loan
Commitments  are  terminated.  Borrower  will not be liable under the  foregoing
indemnification  provision to an Indemnified  Party to the extent that any loss,
claim, damage,  liability or expense is found in a final non-appealable judgment
by a court of competent  jurisdiction  to have  resulted  from such  Indemnified
Party's bad faith or gross negligence or breach of this Agreement.

     In any such action or  proceeding  Borrower  shall have the right to assume
the defense thereof and select counsel  reasonably  acceptable to BAC;provided,
however,  that in no event will such counsel,  without the prior written consent
of BAC, not to be unreasonably withheld, be counsel to Borrower or to any of its
Affiliates.

                                       60

     Borrower  also agrees that no  Indemnified  Party shall have any  liability
(whether  direct or indirect,  in contract or tort or  otherwise) to Borrower or
its creditors related to or arising out of or in connection with this Agreement,
the Supplemental Fee Letter, the Loans, the use of proceeds of the Loans, any of
the  transactions  contemplated  hereby or by the Supplemental Fee Letter or any
related  transaction  or the  performance  by BAC  (including as  Administrative
Agent) or any of its Affiliates of the services  contemplated  by this Agreement
or the  Supplemental  Fee  Letter,  except to the extent  that any loss,  claim,
damage or  liability is found in a final  non-appealable  judgment by a court of
competent  jurisdiction to have resulted from such Indemnified Party's bad faith
or gross negligence or breach of this Agreement.

     Borrower agrees that, without BAC's prior written consent,  which shall not
be unreasonably withheld, Borrower will not settle, compromise or consent to the
entry of any judgment in any pending or threatened  claim,  action or proceeding
in  respect  of which  indemnification  has been or could be  sought  under  the
indemnification  provisions of this  Agreement  (whether or not BAC or any other
Indemnified  Party is an  actual or  potential  party to such  claim,  action or
proceeding),  unless such  settlement,  compromise  or consent  (i)  includes an
unconditional written release, in form and substance reasonably  satisfactory to
the Indemnified  Parties,  of each Indemnified  Party from all liability arising
out of such claim,  action or proceeding and (ii) does not include any statement
as to an  admission of fault,  culpability  or failure to act by or on behalf of
any Indemnified Party.

     No Indemnified  Party shall,  without the prior consent of Borrower (not to
be  unreasonably  withheld or delayed)  settle or compromise any action or claim
for which indemnity has been or could be sought hereunder.

     If (a) an  Indemnified  Party is  requested  to appear as a witness  in any
action  brought by or on behalf of Borrower or any of its  Affiliates  or (b) an
Indemnified  Party is  required  to appear as a witness  in any  action  brought
against Borrower or any of Affiliates, in either case, in which such Indemnified
Party is not named as a defendant, Borrower agrees to reimburse such Indemnified
Party  for all  reasonable  expenses  incurred  by it in  connection  with  such
Indemnified  Party's  appearing  and  preparing  to  appear  as such a  witness,
including,  without  limitation,  the reasonable fees and  disbursements  of its
legal  counsel,  and to  compensate  such  Indemnified  Party in an amount to be
reasonable and mutually agreed upon.

     The  obligations of Borrower under this Section and under Article III shall
survive the repayment of all amounts due under or in connection  with any of the
Loan Documents and the termination of the Loans.

     SECTION 12.05.Assignment;  Participation.  This Agreement shall be binding
upon, and shall inure to the benefit of,  Borrower,  Administrative  Agent,  the
Banks and their respective  successors and permitted  assigns.  Borrower may not
assign or transfer its rights or obligations hereunder.

     Any Bank may at any time grant to one or more  banks or other  institutions
(each,  a   "Participant")   participating   interests  in  its  Loan  (each,  a
"Participation")  subject,  provided  there  exists  no  Event  of  Default,  to
Borrower's consent, which consent shall not be unreasonably withheld or delayed.
In the  event of any such  grant by a Bank of a  Participation,  whether  or not

                                       61

Borrower  or  Administrative  Agent was given  notice,  such Bank  shall  remain
responsible for the performance of its obligations  hereunder,  and Borrower and
Administrative  Agent shall  continue to deal solely and directly with such Bank
in connection with such Bank's rights and obligations  hereunder.  Any agreement
pursuant to which any Bank may grant a  Participation  shall  provide  that such
Bank shall retain the sole right and  responsibility  to enforce the obligations
of Borrower  hereunder  and under any other Loan  Document,  including,  without
limitation,  the right to approve any amendment,  modification  or waiver of any
provision of this Agreement or any other Loan Document;provided,however, that
such  participation  agreement  may provide that such Bank will not agree to any
modification,  amendment  or waiver  described in clauses (1) through (6) in the
first paragraph of Section 12.02 without the consent of the Participant.

     Any Bank may at any time assign to any bank or other  institution  with the
consent,  provided there exists no Event of Default, of Administrative Agent and
of Borrower,  which consents shall not be unreasonably withheld or delayed (such
assignee, a "Consented Assignee"), or to one or more banks or other institutions
which are majority owned subsidiaries of a Bank or to the Parent of a Bank or to
a Related Entity (each  Consented  Assignee,  subsidiary  bank or institution or
Related  Entity,  an  "Assignee")  all, or a  proportionate  part of all, of its
rights and obligations  under this Agreement and its Note(s),  and such Assignee
shall assume rights and  obligations,  pursuant to an Assignment  and Assumption
Agreement  executed by such Assignee and the assigning  Bank,  provided that, in
each  case,  after  giving  effect  to  such  assignment,  the  Assignee's  Loan
Commitment,  and, in the case of a partial assignment, the assigning Bank's Loan
Commitment, each will be equal to or greater than $5,000,000. Upon (i) execution
and delivery of such instrument, (ii) payment by such Assignee to the Bank of an
amount equal to the purchase price agreed between the Bank and such Assignee and
(iii)  at   Administrative   Agent's   option,   payment  by  such  Assignee  to
Administrative  Agent of a fee, for Administrative  Agent's own account,  in the
amount of $3,500,  on account of  Administrative  Agent's  fees and  expenses in
connection  with such  assignment,  such Assignee  shall be a Bank Party to this
Agreement and shall have all the rights and  obligations  of a Bank as set forth
in such  Assignment  and Assumption  Agreement,  and the assigning Bank shall be
released  from its  obligations  hereunder  to a  corresponding  extent,  and no
further consent or action by any party shall be required.  Upon the consummation
of any assignment  pursuant to this paragraph,  substitute Notes shall be issued
to the  assigning  Bank (in the case of a partial  assignment)  and  Assignee by
Borrower,  in exchange for the return of the original  Note(s).  The obligations
evidenced  by such  substitute  Notes  shall  constitute  "Obligations"  for all
purposes of this  Agreement and the other Loan Documents and shall be secured by
the Mortgages.  In connection with Borrower's  execution of substitute  Notes as
aforesaid,  Borrower shall deliver to Administrative  Agent such evidence of the
due  authorization,  execution  and  delivery  of the  substitute  Notes and any
related  documents  as  Administrative  Agent  may  reasonably  request.  If the
Assignee  is not  incorporated  under the Laws of the  United  States or a state
thereof, it shall, prior to the first date on which interest or fees are payable
hereunder  for  its  account,  deliver  to  Borrower  and  Administrative  Agent
certification as to exemption from deduction or withholding of any United States
federal income taxes in accordance with Section 10.13.

     Any Bank may at any time  freely  assign  all or any  portion of its rights
under this Agreement and its Notes to a Federal Reserve Bank. No such assignment
shall release the transferor Bank from its obligations hereunder.

                                       62

     Borrower   recognizes   that  in  connection   with  a  Bank's  selling  of
Participations  or making of assignments,  any or all  documentation,  financial
statements,  appraisals and other data, or copies thereof,  relevant to Borrower
or the  Loans  may be  exhibited  to and  retained  by any such  Participant  or
Assignee or prospective Participant or Assignee. In addition, such documentation
etc. may be exhibited to and retained by  Affiliates  of a Bank.  In  connection
with a Bank's  delivery of any financial  statements  and appraisals to any such
Participant or Assignee or prospective  Participant or Assignee, such Bank shall
also deliver its standard confidentiality statement indicating that the same are
delivered on a  confidential  basis.  Borrower  agrees to provide all assistance
reasonably  requested  by a Bank to enable such Bank to sell  Participations  or
make  assignments of its Loan as permitted by this Section.  Each Bank agrees to
provide Borrower with notice of all Participations sold by such Bank.

     SECTION 12.06.Addition and Release of Properties.  (a) (a) Subject to the
conditions set forth below in this Section, Borrower shall have the right to (1)
cause a  shopping  center  property  that is  wholly  owned by a Person in which
Borrower  owns,  directly  or  indirectly,  a 100%  beneficial  and  controlling
interest  and that is approved by all of the Banks,  in their sole and  absolute
discretion, to be encumbered by a Mortgage and thereby become a Property and (2)
obtain the  release of a Property  (other than  Twelve  Oaks) from the  Mortgage
encumbering such Property, each such addition or release of a Property to effect
an immediate  change in the  computations  of compliance  with the covenants set
forth in Section 8.01 (based on the financial results of the most recently ended
calendar quarter for which financial results are required hereunder to have been
reported by  Borrower,  as  adjusted  (if  applicable)  by all  acquisitions  or
Dispositions of assets subsequent to the end of such quarter as required by this
Agreement  and taking into account the effects of the addition or release of the
Property).

     (b) The  addition of a property as a Property  shall only be in  connection
with an increase in the Total Loan  Commitment  as provided in Section  2.19 and
shall be subject to the satisfaction of the following conditions:

          (i) There shall exist no Event of Default;

          (ii)  Administrative  Agent shall have received (x) a mortgage/deed of
     trust  of the  Property  to  secure  the  payment  and  performance  of the
     Obligations,  duly  executed  by the  owner  thereof  and  recorded  in the
     appropriate land records, together with executed financing statements under
     the  Uniform  Commercial  Code of all  jurisdictions  necessary  or, in the
     opinion of  Administrative  Agent,  desirable  to  perfect  the lien on the
     personal property created by said  mortgage/deed of trust, (y) an indemnity
     agreement regarding Hazardous Materials, duly executed by Borrower and said
     owner and (z) a guaranty of payment of Borrower's obligations hereunder and
     under the Notes,  duly executed by said owner (each such  mortgage/deed  of
     trust,  indemnity  and  guaranty  to be  substantially  in the  form of the
     Mortgages,   Indemnities  and  Guaranty  with  respect  to  the  Properties
     initially  given as  security  for the  Loans  but  with  such  changes  as
     Administrative Agent reasonably deems necessary or advantageous under local
     law or in connection with the particular Property);

                                       63

          (iii)   Each   of   the   Property-related    and    Mortgagor-related
     representations  and warranties  set forth in this Agreement  shall be true
     and correct in all material  respects  with respect to the Property and the
     owner thereof;

          (iv)  The  proposed  Property  shall  not be  suffering  any  material
     casualty  and no  eminent  domain  proceedings  material  to  the  proposed
     Property shall have been commenced (or  threatened)  with respect to all or
     any part thereof;

          (v)  Administrative  Agent shall have received an operating  statement
     with respect to the proposed  Property for the most recent  Fiscal Year and
     for the most recently  ended  calendar  quarter,  and such other  financial
     information  regarding  the  proposed  Property  and the owner  thereof  as
     Administrative Agent may reasonably request;

          (vi)  Administrative  Agent shall have  received (x) each of the items
     listed in  paragraphs  (5) through (15) of Section 4.01 with respect to the
     proposed Property,  (y) documents with respect to the owner of the proposed
     Property of the sort required by paragraphs  (15),  (16),  (17), (18), (19)
     and (20) of Section 4.01 and (z) such  endorsements  to the title insurance
     policies  insuring the Mortgages as  Administrative  Agent shall reasonably
     require;

          (vii)  Administrative  Agent shall have received a certificate  of the
     sort required by clause (b) of paragraph  (3) of Section 6.09,  which shall
     demonstrate  Borrower's  compliance,  as of the date of the addition of the
     proposed Property as a Property (based on the financial results of the most
     recently ended calendar  quarter for which  financial  results are required
     hereunder to have been reported by Borrower, as adjusted (if applicable) by
     all  acquisitions or  Dispositions of assets  subsequent to the end of such
     quarter as required by this  Agreement and taking into account the addition
     of the proposed Property) with the covenants of Borrower enumerated in said
     clause (b);

          (viii)  Administrative Agent shall have received such other documents,
     opinions   (including  opinions  of  counsel)  and  assurances  as  it  may
     reasonably request; and

          (ix)   Administrative   Agent  shall  have  received  payment  of  its
     reasonable  out-of-pocket  expenses in connection  with the addition of the
     proposed Property, including reasonable fees and expenses of counsel.

     (c) The release of any Property shall only be in connection with Borrower's
sale,  exchange or other disposition or refinancing thereof and shall be subject
to the satisfaction of the following conditions:

          (i) There shall exist no Default or Event of Default;

          (ii) Administrative Agent shall have received at least forty-five (45)
     days' prior notice of the date of the proposed release;

          (iii)   Administrative  Agent  shall  have  received  and  approved  a
     certificate  of the sort required by clause (b) of paragraph (3) of Section
     6.09, which shall demonstrate Borrower's  compliance,  as of the end of the
     most  recently  ended  calendar  quarter  for

                                       64

     which  financial  results are required  hereunder to have been  reported by
     Borrower  (and taking into account the release of the  Property),  with the
     covenants of Borrower enumerated in said clause (b) (if necessary, Borrower
     may make a payment in reduction of the outstanding principal balance of the
     Notes in an amount such that said covenants are complied with);

          (iv) The Total  Loan  Commitment  does not  exceed  65% of the "as is"
     value of the relevant  Mortgagor's  respective interests in the Property or
     Properties  which will remain as security for the Loans,  as evidenced,  at
     the  option  of the  Required  Banks,  by an  update  to  the  appraisal(s)
     delivered pursuant to paragraph (7) of Section 4.01 or subparagraph (b)(vi)
     of this Section,  as the case may be, which updated  appraisal(s)  shall be
     commissioned  by  Administrative  Agent at Borrower's  expense and shall be
     satisfactory to the Required Banks; and

          (v)   Administrative   Agent  shall  have  received   payment  of  its
     out-of-pocket   expenses  in  connection   with  such  release,   including
     reasonable fees and expenses of counsel.

     Upon the release of a Property as aforesaid,  the relevant  Mortgagor shall
be released and discharged automatically from its obligations under the Guaranty
and under the Indemnity executed by it, and Administrative Agent shall deliver a
letter to such Mortgagor confirming said release and discharge.

     SECTION 12.07.Documentation Satisfactory.  All documentation required from
or to be submitted on behalf of Borrower in connection  with this  Agreement and
the documents  relating hereto shall be subject to the prior approval of, and be
satisfactory in form and substance to,  Administrative  Agent,  its counsel and,
where  specifically  provided  herein,  the Banks.  In addition,  the persons or
parties  responsible  for the execution and delivery of, and signatories to, all
of such  documentation,  shall be acceptable to, and subject to the approval of,
Administrative Agent and its counsel and the Banks.

     SECTION 12.08.Notices,  Etc. Except as expressly provided otherwise,  all
notices,  demands,  consents,  approvals  and  statements  required or permitted
hereunder  shall be in  writing  and shall be  deemed to have been  sufficiently
given or served for all purposes when presented personally, three (3) days after
mailing by registered or certified mail,  postage prepaid,  or one (1) day after
delivery to a nationally recognized overnight courier service providing evidence
of the date of delivery,  addressed  to a party at its address on the  signature
page hereof or of the applicable Assignment and Assumption Agreement, or at such
other  address of which a party shall have notified the party giving such notice
in writing in accordance with the foregoing requirements.

     SECTION 12.09.Setoff. In addition to (and without limitation of) any right
of setoff,  bankers' lien or  counterclaim a Bank may otherwise  have, each Bank
shall be entitled,  but only with the prior  consent of the Required  Banks,  to
offset balances (general or special, time or demand,  provisional or final) held
by it for the account of Borrower at any of such Bank's  offices,  in Dollars or
in any other currency, against any amount payable by Borrower to such Bank under
this  Agreement or such Bank's Notes,  or any other Loan  Document  which is not
paid

                                       65

when due  (regardless  of whether such  balances are then due to  Borrower),  in
which case it shall promptly notify Borrower and  Administrative  Agent thereof;
provided  that such  Bank's  failure  to give such  notice  shall not affect the
validity  thereof.  Payments  by  Borrower  hereunder  or under the  other  Loan
Documents shall be made without setoff or counterclaim.

     SECTION  12.10.Gross-Up for Taxes. All payments made by Borrower under this
Agreement  and the Notes shall be made free and clear of, and without  deduction
or  withholding  for or on account  of, any present or future  income,  stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or  hereafter  imposed,  levied,  collected,  withheld  or  assessed  by any
Governmental  Authority,  excluding  income  taxes and  franchise or other taxes
(imposed in lieu of income taxes)  imposed on a Bank as a result of a present or
former  connection  between such Bank and the  jurisdiction of the  Governmental
Authority  imposing such tax or any political  subdivision  or taxing  authority
thereof or therein  (other  than any such  connection  arising  solely from such
Bank's having  executed,  delivered or performed its  obligations  or received a
payment  under,  or  enforced,   this  Agreement  or  its  Note).  If  any  such
non-excluded  taxes,  levies,  imposts,  duties,  charges,  fees,  deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts
payable to such Bank hereunder or under its Note, the amounts so payable to such
Bank shall be  increased  to the extent  necessary  to yield to such Bank (after
payment of all  Non-Excluded  Taxes)  interest or any such other amounts payable
with  respect  to its Loan at the  rates  or in the  amounts  specified  in this
Agreement and its Note;provided,however,  that Borrower shall not be required
to increase any such amounts  payable to such Bank if such Bank is not organized
under the Laws of the United  States or a state  thereof  and such Bank fails to
comply with the requirements of Section 10.13.  Whenever any Non-Excluded  Taxes
are payable by Borrower,  as promptly as possible thereafter Borrower shall send
to  Administrative  Agent for the  account of such Bank a  certified  copy of an
original  official  receipt  received by Borrower  showing payment  thereof.  If
Borrower fails to pay any Non-Excluded  Taxes when due to the appropriate taxing
authority or fails to remit to  Administrative  Agent the  required  receipts or
other required documentary evidence,  Borrower shall indemnify such Bank for any
incremental taxes, interest or penalties that may become payable by such Bank as
a result of any such failure.  The  agreements in this Section shall survive the
termination of this Agreement and the payment of the Notes and all other amounts
payable hereunder.

     SECTION 12.11.Twelve Oaks Partial Releases. Provided there exists no Event
of  Default,  Administrative  Agent  shall  release  the  lien  of the  Mortgage
encumbering  Twelve Oaks from  portions of the  unimproved  parcel  described as
Parcel D (the "Lake Parcel") in Schedule A to such  Mortgage,  such parcel being
the only  portion of the Twelve Oaks  premises  located  outside of the shopping
center's "ring road" (each such portion,  a "Release Parcel") in connection with
TOLLC's simultaneous conveyance thereof;provided,however, that no portion of
the lake located on the Lake Parcel shall be released.  All such releases  shall
be subject, in each case, to Administrative Agent's receipt of (A) evidence that
the balance of the Twelve Oaks premises constitutes one or more separate tax and
zoning lots and an endorsement to the title  insurance  policy for said Mortgage
insuring  that the lien thereof will not be impaired by virtue of the release of
the  Release  Parcel,  (B)  a  current  survey  of  the  Twelve  Oaks  premises,
specifically  delineating (by metes and bounds) the Release Parcel, certified to
Administrative Agent and the Title Insurer, (C) evidence that the Release Parcel
is not necessary for the operation,  maintenance (including, but not limited to,
drainage from and water supply to the Twelve Oaks premises) of

                                       66

and access to the Twelve Oaks Premises,  (D) such other documents,  opinions and
assurances as Administrative  Agent may reasonably request (all of the foregoing
items (A) through (D) to be received by Administrative  Agent at least seven (7)
business  days  prior  to the  proposed  release  and be in form  and  substance
reasonably   satisfactory   to   Administrative   Agent)  and  (E)   payment  of
Administrative Agent's out-of-pocket  expenses,  including the fees and expenses
of counsel, in connection with the foregoing transactions.

     SECTION 12.12.Table of Contents;  Headings.  Any table of contents and the
headings and captions  hereunder are for  convenience  only and shall not affect
the interpretation or construction of this Agreement.

     SECTION 12.13.Severability.  The provisions of this Agreement are intended
to be severable. If for any reason any provision of this Agreement shall be held
invalid or unenforceable in whole or in part in any jurisdiction, such provision
shall, as to such jurisdiction,  be ineffective to the extent of such invalidity
or   unenforceability   without  in  any  manner   affecting   the  validity  or
enforceability  thereof in any other  jurisdiction  or the remaining  provisions
hereof in any jurisdiction.

     SECTION 12.14.Counterparts.  This Agreement may be executed in any number
of  counterparts,  all of which taken together shall constitute one and the same
instrument,  and any party hereto may execute this Agreement by signing any such
counterpart.

     SECTION 12.15.Integration.  The Loan Documents and Supplemental Fee Letter
set  forth the  entire  agreement  among  the  parties  hereto  relating  to the
transactions  contemplated  thereby  and  supersede  any prior  oral or  written
statements or agreements with respect to such transactions.

     SECTION  12.16.Governing  Law. This  Agreement  shall be governed by, and
interpreted, construed and enforced in accordance with, the Laws of the State of
New York (without giving effect to New York's principles of conflicts of law).

     SECTION 12.17.Waivers. In connection with the obligations and liabilities
as aforesaid,  Borrower hereby waives: (1) promptness and diligence;  (2) notice
of any  actions  taken by any Bank Party  under this  Agreement,  any other Loan
Document or any other agreement or instrument  relating hereto or thereto except
to the extent  otherwise  provided  herein;  (3) all other notices,  demands and
protests,  and all  other  formalities  of  every  kind in  connection  with the
enforcement of the  Obligations,  the omission of or delay in which, but for the
provisions of this Section,  might constitute  grounds for relieving Borrower of
its  obligations  hereunder;  (4) any  requirement  that any Bank Party protect,
secure,  perfect or insure any Lien on any  Collateral  or exhaust  any right or
take any action against  Borrower or any other Person or against any Collateral;
(5) any right or claim of right to cause a marshalling of the assets of Borrower
or any Mortgagor;  and (6) all rights of subrogation  or  contribution,  whether
arising by contract or operation of law (including, without limitation, any such
right  arising  under the Federal  Bankruptcy  Code) or  otherwise  by reason of
payment by Borrower, either jointly or severally,  pursuant to this Agreement or
any other Loan Document.

                                       67

     SECTION 12.18.JURISDICTION; IMMUNITIES. BORROWER, ADMINISTRATIVE AGENT AND
EACH BANK HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY NEW YORK STATE OR
UNITED  STATES  FEDERAL  COURT  SITTING  IN NEW YORK  CITY  OVER ANY  ACTION  OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT,  THE NOTES OR ANY OTHER
LOAN DOCUMENT.  BORROWER,  ADMINISTRATIVE AGENT, AND EACH BANK IRREVOCABLY AGREE
THAT ALL  CLAIMS  IN  RESPECT  OF SUCH  ACTION  OR  PROCEEDING  MAY BE HEARD AND
DETERMINED  IN SUCH NEW YORK STATE OR UNITED  STATES  FEDERAL  COURT.  BORROWER,
ADMINISTRATIVE  AGENT, AND EACH BANK  IRREVOCABLY  CONSENT TO THE SERVICE OF ANY
AND ALL  PROCESS IN ANY SUCH  ACTION OR  PROCEEDING  BY THE MAILING OF COPIES OF
SUCH PROCESS TO BORROWER, ADMINISTRATIVE AGENT OR EACH BANK, AS THE CASE MAY BE,
AT THE ADDRESSES SPECIFIED HEREIN. BORROWER,  ADMINISTRATIVE AGENT AND EACH BANK
AGREE THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE
AND MAY BE ENFORCED  IN OTHER  JURISDICTIONS  BY SUIT ON THE  JUDGMENT OR IN ANY
OTHER  MANNER  PROVIDED  BY LAW.  BORROWER,  ADMINISTRATIVE  AGENT AND EACH BANK
FURTHER  WAIVE ANY OBJECTION TO VENUE IN THE STATE OF NEW YORK AND ANY OBJECTION
TO AN  ACTION OR  PROCEEDING  IN THE STATE OF NEW YORK ON THE BASIS OF FORUM NON
CONVENIENS.  BORROWER,  ADMINISTRATIVE AGENT AND EACH BANK AGREE THAT ANY ACTION
OR PROCEEDING BROUGHT AGAINST BORROWER, ADMINISTRATIVE AGENT OR ANY BANK, AS THE
CASE MAY BE, SHALL BE BROUGHT ONLY IN A NEW YORK STATE COURT SITTING IN NEW YORK
CITY OR A UNITED STATES FEDERAL COURT SITTING IN NEW YORK CITY.

     Nothing in this Section shall affect the right of Borrower,  Administrative
Agent or any Bank to serve legal process in any other manner permitted by law.

     To the  extent  that  Borrower,  Administrative  Agent or any Bank  have or
hereafter  may acquire any immunity from  jurisdiction  of any court or from any
legal  process  (whether from service or notice,  attachment  prior to judgment,
attachment in aid of execution,  execution or otherwise)  with respect to itself
or its property, Borrower, Administrative Agent and each Bank hereby irrevocably
waive such  immunity in respect of its  obligations  under this  Agreement,  the
Notes and any other Loan Document.

     BORROWER,  ADMINISTRATIVE  AGENT  AND EACH BANK  WAIVE ANY RIGHT  EACH SUCH
PARTY MAY HAVE TO JURY TRIAL IN CONNECTION  WITH ANY SUIT,  ACTION OR PROCEEDING
BROUGHT WITH  RESPECT TO THIS  AGREEMENT,  THE NOTES OR THE LOANS.  IN ADDITION,
BORROWER  HEREBY  WAIVES,  IN  CONNECTION  WITH ANY SUIT,  ACTION OR  PROCEEDING
BROUGHT  BY  ADMINISTRATIVE  AGENT OR THE BANKS WITH  RESPECT TO THE NOTES,  ANY
RIGHT BORROWER MAY HAVE TO (1) INTERPOSE ANY COUNTERCLAIM  THEREIN (OTHER THAN A
COUNTERCLAIM  THAT IF NOT BROUGHT IN THE SUIT,  ACTION OR PROCEEDING  BROUGHT BY
ADMINISTRATIVE  AGENT OR THE BANKS  COULD NOT BE  BROUGHT  IN A  SEPARATE  SUIT,
ACTION OR PROCEEDING OR WOULD BE SUBJECT TO DISMISSAL OR SIMILAR DISPOSITION FOR
FAILURE TO HAVE BEEN

                                       68

ASSERTED IN SUCH SUIT, ACTION OR PROCEEDING  BROUGHT BY ADMINISTRATIVE  AGENT OR
THE BANKS) OR (2) HAVE THE SAME  CONSOLIDATED  WITH ANY OTHER OR SEPARATE  SUIT,
ACTION OR  PROCEEDING.  NOTHING  HEREIN  CONTAINED  SHALL  PREVENT  OR  PROHIBIT
BORROWER   FROM   INSTITUTING   OR   MAINTAINING  A  SEPARATE   ACTION   AGAINST
ADMINISTRATIVE AGENT OR THE BANKS WITH RESPECT TO ANY ASSERTED CLAIM.

  [Remainder of page intentionally left blank.]

                                       69

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
duly executed and delivered as of the day and year first above written.

                                     THE TAUBMAN REALTY GROUP LIMITED
                                     PARTNERSHIP, a Delaware limited partnership

                                     By /s/ Steven E. Eder
                                       -----------------------------------------
                                       Steven E. Eder,
                                       its authorized signatory

                                     Address for notices:

                                     c/o The Taubman Company Limited Partnership
                                     200 East Long Lake Road - Suite 300
                                     Bloomfield Hills, Michigan 48304
                                     Attention:        Mr. Steven E. Eder

                                     with copy to:

                                     Miro Weiner & Kramer
                                     38500 Woodward Avenue
                                     Suite 100
                                     Bloomfield Hills, Michigan 48304
                                     Attention:        Martin L. Katz, Esq.

                                       70

                                     BANK OF AMERICA, N.A.
                                     (as Administrative Agent)

                                     By /s/ Ronald B. Phemister
                                       -----------------------------------------
                                       Name:  Ronald B. Phemister
                                       Title: Principal

                                     Address for notices:

                                     Bank of America, N.A.
                                     231 South LaSalle Street, 12th Floor
                                     Chicago, Illinois 60697
                                     Mail Code:  IL1-231-12-18
                                     Attention:  Ronald Phemister
                                     Telephone:        (312) 828-3974
                                     Facsimile:        (312) 974-4970

                                     with copies to:

                                     Bank of America, N.A.
                                     700 Louisiana Street, 5th Floor
                                     Houston, Texas 77002
                                     Mail Code:  TX4-213-05-06
                                     Attention:        Cynthia C. Sanford
                                     Telephone:        (713) 247-7093
                                     Facsimile:        (713) 247-6124

                                                 and

                                     Bank of America, N.A.
                                     231 South LaSalle Street, 12th Floor
                                     Chicago, Illinois 60697
                                     Mail Code:  IL1-231-12-18
                                     Attention:  Real Estate Loan Administration
                                     Telephone:        (312) 828-8668
                                     Facsimile:        (312) 828-2838

                                     Administrative Agent's Office:

                                     Bank of America, N.A.
                                     231 South LaSalle Street, 12th Floor
                                     Chicago, Illinois 60697
                                     Mail Code:  IL1-231-12-18
                                     Attention:  Real Estate Loan Administration
                                     Telephone:        (312) 828-8668
                                     Facsimile:        (312) 828-2838

                                       71

                                     BANK OF AMERICA, N.A.
                                     (as a Bank)

                                     By /s/ Ronald B. Phemister
                                       -----------------------------------------
                                       Name:  Ronald B. Phemister
                                       Title: Principal

                                     Address for notices:

                                     Bank of America, N.A.
                                     231 South LaSalle Street, 12th Floor
                                     Mail Code IL1-231-12-18
                                     Chicago, Illinois 60697
                                     Attention:  Ronald Phemister
                                     Telephone:  (312) 828-3974
                                     Facsimile:   (312) 974-4970

                                     with copies to:

                                     Bank of America, N.A.
                                     700 Louisiana Street, 5th Floor
                                     Houston, Texas 77002
                                     Mail Code:  TX4-213-05-06
                                     Attention:        Cynthia C. Sanford
                                     Telephone:        (713) 247-7093
                                     Facsimile:        (713) 247-6124

                                                 and

                                     Dewey Ballantine LLP
                                     1301 Avenue of the Americas
                                     New York, New York 10019-6092
                                     Attention:        George C. Weiss, Esq.

                                     Applicable Lending Office:

                                     Bank of America, N.A.
                                     231 South LaSalle Street, 12th Floor
                                     Mail Code IL1-231-12-18
                                     Chicago, Illinois 60697

                                       72

                                     PNC BANK, NATIONAL ASSOCIATION

                                     By /s/ Louis A. Stempkowski
                                       -----------------------------------------
                                       Name:  Louis A. Stempkowski
                                       Title: Vice President

                              Address for notices and Applicable Lending Office:

                                     PNC Bank, National Association
                                     1 PNC Plaza
                                     249 Fifth Avenue
                                     P1-POPP-19-2

                                     Pittsburgh, Pennsylvania 15222
                                     Attention:        Real Estate Finance
                                     Telephone:        (412) 762-5619
                                     Facsimile:        (412) 762-6500

                                     COMERICA BANK

                                     By /s/ Kristine L. Vigliotti
                                       -----------------------------------------
                                       Name:  Kristine L. Vigliotti
                                       Title: Vice President

                              Address for notices and Applicable Lending Office:

                                     Comerica Bank
                                     Comerica Tower at Detroit Center
                                     500 Woodward Avenue - 9th Floor
                                     Mail Code:  3270
                                     Detroit, Michigan 48226-3270
                                     Attention:        Kristine Vigliotti
                                     Telephone:        (313) 222-3648
                                     Facsimile:        (313) 222-3330

                                       73

                                     FLEET NATIONAL BANK

                                     By /s/ Margaret A. Mulcahy
                                       -----------------------------------------
                                       Name:  Margaret A. Mulcahy
                                       Title: Senior Vice President

                              Address for notices and Applicable Lending Office:

                                     Fleet National Bank
                                     100 Federal Street
                                     Mail Stop:  MA-DE-10009A
                                     Boston, Massachusetts 02110
                                     Attention:        Margaret A. Mulcahy
                                     Telephone:        (617) 434-6355
                                     Facsimile:        (617) 434-6384

                                     BAYERISCHE HYPO- UND
                                      VEREINSBANK AG, NEW YORK BRANCH

                                     By /s/ Christine Elcik
                                       -----------------------------------------
                                       Name:  Christine Elcik
                                       Title: Associate Director

                                     By /s/ Meggan W. Walsh
                                       -----------------------------------------
                                       Name:  Meggan W. Walsh
                                       Title: Managing Director

                              Address for notices and Applicable Lending Office:

                                     Bayerische Hypo- und Vereinsbank AG,
                                      New York Branch
                                     Real Estate Lending
                                     622 Third Avenue, 29th Floor
                                     New York, New York 10017
                                     Attention:        Christine Elcik
                                     Telephone:        (212) 672-5740
                                     Facsimile:        (212) 672-5527

                                       74

                                     COMMERZBANK AG, NEW YORK AND
                                     GRAND CAYMAN BRANCHES

                                     By /s/ Christian Berry
                                       -----------------------------------------
                                       Name:  Christian Berry
                                       Title: Assistant Vice President

                                     By /s/ R. William Knickerbocker
                                       -----------------------------------------
                                       Name:  R. William Knickerbocker
                                       Title: Assistant Vice President

                              Address for notices and Applicable Lending Office:

                                     Commerzbank AG, New York Branch
                                     2 World Financial Center
                                     New York, New York 10281
                                     Attention:        Douglas Traynor
                                     Telephone:        (212) 266-7569
                                     Facsimile:        (212) 266-7565

                                       75

                                     DRESDNER BANK AG, NEW YORK
                                     AND GRAND CAYMAN BRANCHES

                                     By /s/ Maureen M. Slentz
                                       -----------------------------------------
                                       Name:  Maureen M. Slentz
                                       Title: Director

                                     By /s/ Curt M. Steiner
                                       -----------------------------------------
                                       Name:  Curt M. Steiner
                                       Title: Associate

                                     Address for notices:

                                     Dresdner Bank AG
                                     190 S. LaSalle Street - Suite 2700
                                     Chicago, Illinois 60603
                                     Attention:        Maureen Slentz
                                     Telephone:        (312) 444-1316
                                     Facsimile:        (312) 444-1301

                                    Applicable Lending Office for Base Rate Loan
                                    and LIBOR Loan:

                                     DRESDNER BANK AG, NEW YORK
                                     AND GRAND CAYMAN BRANCHES
                                     75 Wall Street
                                     New York, New York 10005

                                       76

                                     BAYERISCHE LANDESBANK

                                     By /s/ John A. Wain
                                       -----------------------------------------
                                       Name:  John A. Wain
                                       Title: First Vice President

                                     By /s/ Daniel J. Reddy
                                       -----------------------------------------
                                       Name:  Daniel J. Reddy
                                       Title: Vice President

                                     Address for notices and Applicable Lending Office:

                                     Bayerische Landesbank
                                     560 Lexington Avenue
                                     New York, New York 10022
                                     Attention:        Daniel Reddy
                                     Telephone:        (212) 310-9881
                                     Facsimile:        (212) 230-9114

                                     BANK ONE, MICHIGAN

                                     By /s/ Timothy J. Kalil
                                       -----------------------------------------
                                       Name:  Timothy J. Kalil
                                       Title: Vice President

                              Address for notices and Applicable Lending Office:

                                     Bank One, Michigan
                                     Commercial Real Estate
                                     Mail Code M11-8029
                                     611 Woodward Avenue
                                     Detroit, Michigan 48226
                                     Attention:        Timothy J. Kalil
                                     Telephone:        (313) 225-4694
                                     Facsimile:        (313) 225-0857

                                       77

                                     LASALLE BANK NATIONAL ASSOCIATION

                                     By /s/ Crystal DiDomenico
                                       -----------------------------------------
                                       Name:  Crystal DiDomenico
                                       Title: Relationship Manager

                              Address for notices and Applicable Lending Office:

                                     LaSalle Bank National Association
                                     135 South LaSalle Street
                                     Chicago, Illinois 60603
                                     Attention:        John Hein
                                     Telephone:        (312) 904-8620
                                     Facsimile:        (312) 904-6691

                                     KEYBANK NATIONAL ASSOCIATION

                                     By /s/ John Scott
                                       -----------------------------------------
                                       Name:  John Scott
                                       Title: Assistant Vice President

                               Address for notices and Applicable Lending Office:
                                     KeyBank National Association
                                     Commercial Real Estate
                                     Mail Code OH-01-27-0839
                                     127 Public Square
                                     Cleveland, Ohio 44114
                                     Attention:        John Scott
                                     Telephone:        (216) 689-3512
                                     Facsimile:        (216) 689-4997

                                       78

                                     LANDESBANK HESSEN-THURINGEN
                                      GIROZENTRALE

                                     By /s/ Thomas R. Crowley
                                       -----------------------------------------
                                       Name:  Thomas R. Crowley
                                       Title: Vice President

                                     By /s/ Robert W. Becker
                                       -----------------------------------------
                                       Name:  Robert W. Becker
                                       Title: Vice President

                              Address for notices and Applicable Lending Office:

                                     Landesbank Hessen-Thuringen Girozentrale
                                     420 Fifth Avenue - 24th Floor
                                     New York, New York 10018
                                     Attention:        Thomas Crowley
                                     Telephone:        (212) 703-5245
                                     Facsimile:        (212) 703-5296

                                       79

                                                 TABLE OF CONTENTS

                                                                                                      Page
                                                                                                      ----

     ARTICLE I                      DEFINITIONS; ETC.....................................................1
         SECTION 1.01.              Definitions..........................................................1
         SECTION 1.02.              Accounting Terms....................................................16
         SECTION 1.03.              Computation of Time Periods.........................................16
         SECTION 1.04.              Rules of Construction...............................................16

     ARTICLE II                     THE LOANS...........................................................16
         SECTION 2.01.              The Loans...........................................................16
         SECTION 2.02.              Purpose.............................................................17
         SECTION 2.03.              Advances, Generally.................................................17
         SECTION 2.04.              Procedures for Advances.............................................17
         SECTION 2.05.              Additional Conditions to Advances...................................18
         SECTION 2.06.              Interest Periods; Renewals..........................................18
         SECTION 2.07.              Interest............................................................18
         SECTION 2.08.              Fees................................................................19
         SECTION 2.09.              Notes...............................................................19
         SECTION 2.10.              Prepayments.........................................................20
         SECTION 2.11.              Termination of Commitments..........................................20
         SECTION 2.12.              Method of Payment...................................................20
         SECTION 2.13.              Elections, Conversions or Continuation of Loans.....................21
         SECTION 2.14.              Minimum Amounts.....................................................21
         SECTION 2.15.              Certain Notices Regarding Elections, Conversions and Continuations
                                    of Loans............................................................21
         SECTION 2.16.              Late Payment Premium................................................21
         SECTION 2.17.              Letters of Credit...................................................22
         SECTION 2.18.              Extension Of Maturity...............................................23
         SECTION 2.19.              Additional Loan Commitments.........................................24

     ARTICLE III                    YIELD PROTECTION; ILLEGALITY; ETC...................................27
         SECTION 3.01.              Additional Costs....................................................27
         SECTION 3.02.              Limitation on Types of Loans........................................28
         SECTION 3.03.              Illegality..........................................................29
         SECTION 3.04.              Treatment of Affected Loans.........................................29
         SECTION 3.05.              Certain Compensation................................................30
         SECTION 3.06.              Capital Adequacy....................................................30
         SECTION 3.07.              Replacement of Banks................................................31

     ARTICLE IV                     CONDITIONS PRECEDENT................................................32
         SECTION 4.01.              Conditions Precedent to the Initial Advance.........................32
         SECTION 4.02.              Conditions Precedent to Advances After the Initial Advance..........36

                                              (i)

         SECTION 4.03.              Deemed Representations..............................................36

     ARTICLE V                      REPRESENTATIONS AND WARRANTIES......................................36
         SECTION 5.01.              Due Organization....................................................36
         SECTION 5.02.              Power and Authority; No Conflicts; Compliance With Laws.............37
         SECTION 5.03.              Legally Enforceable Agreements......................................37
         SECTION 5.04.              Litigation..........................................................37
         SECTION 5.05.              Good Title to Properties............................................37
         SECTION 5.06.              Taxes...............................................................38
         SECTION 5.07.              ERISA...............................................................38
         SECTION 5.08.              No Default on Outstanding Judgments or Orders.......................38
         SECTION 5.09.              No Defaults on Other Agreements.....................................38
         SECTION 5.10.              Government Regulation...............................................39
         SECTION 5.11.              Environmental Protection............................................39
         SECTION 5.12.              Solvency............................................................39
         SECTION 5.13.              Financial Statements................................................39
         SECTION 5.14.              Valid Existence of Material Affiliates..............................40
         SECTION 5.15.              Insurance...........................................................40
         SECTION 5.16.              Separate Tax and Zoning Lot.........................................40
         SECTION 5.17.              Zoning and other Laws; Covenants and Restrictions...................40
         SECTION 5.18.              Utilities Available.................................................40
         SECTION 5.19.              Creation of Liens...................................................40
         SECTION 5.20.              Roads...............................................................40
         SECTION 5.21.              Premises Documents and Leases.......................................40
         SECTION 5.22.              Accuracy of Information; Full Disclosure............................41

     ARTICLE VI                     AFFIRMATIVE COVENANTS...............................................41
         SECTION 6.01.              Maintenance of Existence............................................41
         SECTION 6.02.              Maintenance of Records..............................................41
         SECTION 6.03.              Maintenance of Insurance............................................41
         SECTION 6.04.              Compliance with Laws; Payment of Taxes..............................42
         SECTION 6.05.              Right of Inspection.................................................42
         SECTION 6.06.              Compliance With Environmental Laws..................................42
         SECTION 6.07.              Payment of Costs....................................................42
         SECTION 6.08.              Maintenance of Properties...........................................42
         SECTION 6.09.              Reporting and Miscellaneous Document Requirements...................42
         SECTION 6.10.              Premises Documents; Leases..........................................44
         SECTION 6.11.              Compliance with Covenants, Restrictions and Easements...............45
         SECTION 6.12.              Management, Leasing and Service Contracts...........................45
         SECTION 6.13.              Correction of Defects; Remediation..................................45
         SECTION 6.14.              Estoppel Certificates...............................................45

     ARTICLE VII                    NEGATIVE COVENANTS..................................................46
         SECTION 7.01.              Mergers Etc.........................................................46
         SECTION 7.02.              Investments.........................................................46

                                              (ii)

         SECTION 7.03.              Sale of Assets......................................................46
         SECTION 7.04.              Interest Rate Hedging...............................................46
         SECTION 7.05.              Control of Borrower.................................................47
         SECTION 7.06.              Certain Restrictions on Activities of TCI...........................47

     ARTICLE VIII                   FINANCIAL COVENANTS AND ADJUSTMENTS.................................47
         SECTION 8.01.              Financial Covenants.................................................47
         SECTION 8.02.              Certain Pro-Forma Adjustments.......................................48

     ARTICLE IX                     EVENTS OF DEFAULT...................................................49
         SECTION 9.01.              Events of Default...................................................49
         SECTION 9.02.              Remedies............................................................51

     ARTICLE X                      ADMINISTRATIVE AGENT; RELATIONS AMONG BANKS.........................51
         SECTION 10.01.             Appointment, Powers and Immunities of Administrative Agent..........51
         SECTION 10.02.             Reliance by Administrative Agent....................................52
         SECTION 10.03.             Defaults............................................................52
         SECTION 10.04.             Rights of Administrative Agent as a Bank............................53
         SECTION 10.05.             Sharing of Costs by Banks; Indemnification of Administrative Agent..53
         SECTION 10.06.             Non-Reliance on Administrative Agent and Other Banks................53
         SECTION 10.07.             Failure of Administrative Agent to Act..............................54
         SECTION 10.08.             Resignation or Removal of Administrative Agent......................54
         SECTION 10.09.             Amendments Concerning Agency Function...............................55
         SECTION 10.10.             Liability of Administrative Agent...................................55
         SECTION 10.11.             Transfer of Agency Function.........................................55
         SECTION 10.12.             Non-Receipt of Funds by Administrative Agent Adjustments............55
         SECTION 10.13.             Withholding Taxes...................................................56
         SECTION 10.14.             Pro Rata Treatment..................................................56
         SECTION 10.15.             Sharing of Payments Among Banks.....................................56
         SECTION 10.16.             Possession of Documents.............................................56
         SECTION 10.17.             Minimum Commitment by Administrative Agent..........................57

     ARTICLE XI                     NATURE OF OBLIGATIONS...............................................57
         SECTION 11.01.             Absolute and Unconditional Obligations..............................57
         SECTION 11.02.             Non-Recourse........................................................57

     ARTICLE XII                    MISCELLANEOUS.......................................................59
         SECTION 12.01.             Binding Effect of Request for Advance...............................59
         SECTION 12.02.             Amendments and Waivers..............................................59
         SECTION 12.03.             Usury...............................................................60
         SECTION 12.04.             Expenses; Indemnification...........................................60

                                              (iii)

         SECTION 12.05.             Assignment; Participation...........................................61
         SECTION 12.06.             Addition and Release of Properties..................................63
         SECTION 12.07.             Documentation Satisfactory..........................................65
         SECTION 12.08.             Notices, Etc........................................................65
         SECTION 12.09.             Setoff..............................................................65
         SECTION 12.10.             Gross-Up for Taxes..................................................66
         SECTION 12.11.             Twelve Oaks Partial Releases........................................66
         SECTION 12.12.             Table of Contents; Headings.........................................67
         SECTION 12.13.             Severability........................................................67
         SECTION 12.14.             Counterparts........................................................67
         SECTION 12.15.             Integration.........................................................67
         SECTION 12.16.             Governing Law.......................................................67
         SECTION 12.17.             Waivers.............................................................67
         SECTION 12.18.             JURISDICTION; IMMUNITIES............................................68

                                              (iv)

FIRST AMENDMENT TO THE TAUBMAN REALTY GROUP
 LIMITED PARTNERSHIP 1992 INCENTIVE OPTION PLAN

(As Amended and Restated Effective as of September 30, 1997)

WHEREAS, THE TAUBMAN REALTY GROUP LIMITED  PARTNERSHIP,  a Delaware limited
partnership  (including  any  successor  thereto  "TRG"  or  the  "Partnership")
maintains The Taubman Realty Group Limited  Partnership  1992  Incentive  Option
Plan (as Amended and Restated  Effective as of September 30, 1997) (the "Plan");
and

WHEREAS,  pursuant to Section  8.1 of the Plan,  TRG has the  authority  to
amend  the  Plan  and to  make  such  other  changes  as the  Partnership  deems
advisable; and

WHEREAS,  TRG desires to amend the Plan effective January 1, 2002 to permit
an  Optionee's  payment  of the  Exercise  Price  in the  form of  Units  of the
Partnership, and to make such other changes as TRG deems desirable.

NOW, THEREFORE, the Plan is hereby amended as follows:

     1. Section 2.8 is amended in its entirety by substituting the following:

"2.8 `Compensation  Committee' means the Compensation Committee of the
     Board of  Directors  of Taubman  Centers,  Inc. or such other  committee or
     individuals  designated by the Compensation  Committee to act on its behalf
     with respect to the Plan."

     2. The references in the Plan to the  "Partnership  Committee" are replaced
by the term  "Managing  General  Partner"  and  Section  2.32 is  amended in its
entirety by substituting the following:

"2.32 `Managing General Partner' means the Managing General Partner of
     TRG as set forth in the Partnership  Agreement,  which is Taubman  Centers,
     Inc."

     3. Section 2.42 is amended in its entirety by substituting the following:

"2.42 `TTC'  means The  Taubman  Company  L.L.C.,  a Delaware  limited
     liability company."

     4.  Section  4.1 is hereby  amended in its  entirety  by  substituting  the
following:

"4.1 Units of Partnership Interest Available. Incentive Options may be
     granted by TRG under the Plan from time to time to  purchase  an  aggregate
     Eight Million,  Eight Hundred  Eighty-Seven  Thousand,  Eight Hundred Sixty
     (8,887,860) Units of Partnership  Interest, as said number may be increased
     by the  action of the  Managing  General  Partner.  In the  event  that the
     Exercise  Price  for  Options  is paid in the form of Units of  Partnership
     Interest pursuant to Section 7.14, only those Units of Partnership Interest
     issued to the  Optionee  in excess  of the  number of Units of  Partnership
     Interest delivered by the Optionee as payment of the Exercise Price will be
     counted  for  purposes  of  determining  the  remaining  number of Units of
     Partnership  Interest to be made the subject of Incentive Options available
     for grant under the Plan."

                                      -1-

     5. Section 7.14 of the Plan is amended in its entirety by substituting  the
following:

"7.14 Payment of the Exercise Price.  The purchase price for each Unit
     of  Partnership  Interest  in  TRG  to be  purchased  upon  exercise  of an
     Incentive  Option  granted  under the Plan shall be paid in full in cash by
     the Optionee pursuant to the Option Agreement and in an amount equal to the
     Exercise  Price.  An Optionee may also elect to pay the purchase price upon
     exercise  of an  Incentive  Option  in the  form of  Units  of  Partnership
     Interest which have been  outstanding  for six (6) months by delivering the
     number of Units of Partnership  Interest which have a Fair Market Value (as
     defined in Section 2.18) equal to the Exercise  Price.  Upon receipt of the
     Exercise  Price  (whether in cash or by surrender  of Units of  Partnership
     Interest),  TRG  shall  issue  the  total  number  of Units of  Partnership
     Interest to which the Optionee has become  entitled in accordance  with the
     terms of the Option Agreement."

     6. Except as expressly  set forth herein,  the terms and  provisions of the
Plan shall continue unmodified and are hereby confirmed and ratified.

     7. This  Amendment  shall be binding  upon and inure to the  benefit of the
parties hereto and their respective successors and assigns.

     8. This Amendment shall be governed by and construed in accordance with the
laws of the State of Michigan.

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

TAUBMAN REALTY GROUP,
                                               a Delaware limited partnership

                                               By:      Taubman Centers, Inc.
                                               Its:     Managing General Partner

                                               By:      /Lisa Payne/
                                               ---------------------------------
                                                  Lisa Payne
                                               Its:     Chief Financial Officer

AMENDED AND RESTATED
                             SHAREHOLDERS' AGREEMENT

     This Amended and Restated  Shareholders'  Agreement  (this  "Agreement") is
entered into the 30th day of October,  2001, among Taub-Co Management,  Inc., a
Michigan   corporation  (the  "Company"),   The  Taubman  Realty  Group  Limited
Partnership,  a Delaware  limited  partnership  ("TRG"),  The A. Alfred  Taubman
Restated Revocable Trust, as amended 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") and Taub-Co Holdings
LLC,  a  Delaware  limited  liability  company  ("Holdings"),   based  upon  the
following:
     A. On November 20,  1992,  the  Company,  TRG,  the AAT Trust,  and Taub-Co
Holdings Limited  Partnership,  a Delaware limited  partnership,  entered into a
shareholders' agreement (the "Shareholders'  Agreement") governing the Company's
activities and the Company's voting common stock and non-voting common stock.
     B. On October 30,  2001,  the Company's  Articles of  Incorporation  were
amended to provide that the Company has the  authority to issue 60,000 shares of
common stock with full voting power.
     C. Pursuant to the amendment to the  Company's  Articles of  Incorporation,
all the non-voting shares became voting shares, and immediately after the filing
of the  amendment,  each  share of the  Company's  non-voting  common  stock was
automatically converted into a share of voting common stock.
     D.  On  October  30,  2001,  Taub-Co  Holdings  Limited  Partnership  was
converted into a Delaware limited liability company known as "Holdings."

                                       1

     E. The  parties  hereto  now wish to amend and  restate  the  Shareholders'
Agreement  in its  entirety to reflect  Holdings  (as the  successor  to Taub-Co
Holdings Limited  Partnership  pursuant to its conversion to a limited liability
company) as a shareholder in the Company and for certain other reasons.
NOW THEREFORE, the parties hereto agree that the Shareholders' Agreement is
hereby  amended  and  restated in its  entirety  to read as follows:

 ARTICLE 1.
                                  DEFINITIONS

     As used in this Agreement,  the following terms have the meanings indicated
below or in the Sections referred to below:

     1.1 "AAT" means A. Alfred Taubman.

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

     1.3 "Affiliate"  means:  (i) with respect to any individual,  any member of
such  individual's  Immediate  Family,  a  Family  Trust  with  respect  to such
individual,  and any Person (other than an individual) in which such  individual
and/or his Affiliate(s) owns, directly or indirectly, more than 50% of any class
of Equity  Security or of the aggregate  Beneficial  Interest of all  beneficial
owners,  or in which  such  individual  or his  Affiliate  is the  sole  general
partner,  or the sole managing general partner,  or the sole managing member, or
that is  Controlled  by such  individual  and/or his  Affiliates;  and (ii) with
respect to any Person  (other  than an  individual),  any Person  (other than an
individual)  which Controls,  is Controlled By, or is Under Common Control With,
such Person,  and any  individual  who is the sole  general  partner or the sole
managing  general partner or the sole managing member in, or who Controls,  such
Person.

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

     1.5.  "Beneficial   Interest"  means  an  interest,   whether  as  partner,
shareholder,  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 a Business  Organization  to which such  interest,  contract
right, or position relates.

     1.6. "Book Value" means the amount,  at the relevant time and as determined
pursuant  to  GAAP  and  as  certified  by  the  Company's   independent  public
accountants,  by which the Company's  total assets  exceed the  Company's  total

                                       2

liabilities,  except that, for purposes of determining  Book Value: any Units of
Partnership  Interest (as defined in the  Continuing  Offer) held by the Company
shall be valued pursuant to the formula set forth in the Continuing  Offer;  the
Company's  interest in the  Manager  shall be valued in the same manner as TRG's
interest  in the  Manager is valued  pursuant  to Section  8.2 of the  Operating
Agreement;  marketable  securities  shall be valued at their fair  market  value
reduced  by any  federal  and  state  taxes  that  would  be  incurred  upon the
disposition of such  securities at the relevant time for such fair market value;
and the Company's  interest in the  Subsidiaries  which it currently owns and as
they currently exist shall be deemed to have no value.

     1.7 "Business  Organization" means any trust, general partnership,  limited
partnership,  limited liability company,  corporation,  joint venture,  business
trust,  cooperative,  association,  or  other  form  of  business  organization,
regardless of whether it is recognized as a legal entity under applicable law.

     1.8  "Closing  Date" has the meaning  ascribed to it in Section 2.3 of this
Agreement.

     1.9 "Code" means the Internal Revenue Code of 1986, as amended from time to
time, and corresponding provisions of succeeding law.

     1.10 "Common Stock" means the 60,000 shares of voting common stock that the
Company is authorized to issue as of the date of this Agreement, and any and all
securities issued in respect thereof,  in exchange  therefor,  or into which the
Common Stock may hereafter be changed,  whether by reason of any stock dividend,
stock   split,   recapitalization,    reorganization,   merger,   consolidation,
combination, exchange or otherwise.

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

     1.12  "Continuing  Offer" means the irrevocable  offer of Taubman  Centers,
Inc. ("TCI"),  to certain partners in TRG and others,  pursuant to which TCI may
acquire  interests in TRG in exchange for shares of TCI's common  stock,  as the
same may exist from time to time.

     1.13  "Control(s)" (and the related terms "Controlled By" and "Under Common
Control  With") means,  with respect to any Person  (other than an  individual),
possession by the applicable  Person or Persons of the power,  acting alone (or,
solely among such applicable Persons,  acting together), to designate and direct
or cause the designation  and direction of the management and policies  thereof,
whether through the ownership of voting securities, by contract, or otherwise.

     1.14 "Election Notice" means the written notice delivered by the Company to
TRG, by which the Company elects to exercise the right  (pursuant to Section 2.2
of this  Agreement)  to  purchase  all,  but not less than all, of the shares of
Common Stock subject to a Third Party Offer that TRG desires to accept.

                                       3

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

     1.16 "Expiration Election Notice" has the meaning ascribed to it in Section
2.3 of this Agreement.

     1.17  "Expiration  Event" has the meaning  ascribed to it in Section 2.3 of
this Agreement.

     1.18 "Family Trust" means, with respect to any individual,  a trust for the
benefit of such  individual  or for the benefit of any member or members of such
individual's  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 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 distribution after the death of the settlor if he, she, it, or they shall have
survived  the  settlor  of  such  trust,  which  distribution  is to be  made of
something other than shares of Common Stock,  and/or includes an organization or
organizations  exempt from federal  income taxes  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
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,  and/or an attorney who is then entitled to
practice law in any state in the United States.

     1.19 "GAAP" means generally accepted accounting principles.

     1.20 "Holdings Members" means those Persons holding,  at the relevant time,
a Holdings  Membership  Interest.  At the date of this  Agreement,  the Holdings
Members are the AAT Trust, Robert S. Taubman, and William S. Taubman.  Reference
to a Holdings Member includes any of the Holdings Members.

     1.21   "Holdings   Membership   Interest"   means  the  right  to   receive
distributions  from  Holdings,  the right to receive  allocations of profits and
losses with respect to Holdings' business,  the right, if any, to participate in
the  management  of Holdings,  and all other legal and  equitable  rights that a
Person has or may have as a member in Holdings.

     1.22  "Immediate  Family"  means,  with respect to a Person,  such Person's
spouse (former or then current),  (ii) such Person's  parents and  grandparents,
and (iii) ascendants and descendants (natural or adoptive,  of the whole or half
blood) of such  Person's  parents  or of the  parents  of such  Person's  spouse
(former or then current).

                                       4

     1.23 "Manager" means The Taubman Company LLC, a Delaware limited  liability
company.

     1.24  "Master  Services  Agreement"  means the  Master  Services  Agreement
between TRG and the Manager, as the same may be amended or supplemented, and any
agreement entered into by TRG and the Manager in replacement thereof.

     1.25 "Operating  Agreement" means the Operating  Agreement  between TRG and
the Company with respect to the formation  and operation of the Manager,  as the
same may be amended or supplemented.

     1.26  "Option"  has  the  meaning  ascribed  to it in  Section  2.3 of this
Agreement.

     1.27 "Permitted  Transferee" means: (i) with respect to any Holdings Member
(other  than the AAT Trust),  (a)  Holdings,  (b) the AAT Trust,  (C) a Holdings
Member,  (d)  any  Person  designated  by the  AAT  Trust  that  is a  Permitted
Transferee  of the AAT Trust,  and (e) a Family Trust of such  Holdings  Member,
provided that such Holdings Member,  during his lifetime, is the sole trustee of
such Family Trust and has the sole and  exclusive  authority  to  Transfer,  and
exercise any voting or other  rights with  respect to, the  Holdings  Membership
Interest held by such Family  Trust;  and (ii) with respect to the AAT Trust and
Holdings,  (a) AAT, (b) an Affiliate of AAT or of the AAT Trust,  (c) a Holdings
Member, and (d) Holdings.

     1.28 "Person" or "Persons" 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 or
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.

     1.29 "Shareholders" means TRG, Holdings, and their permitted successors and
assigns. "Shareholder" means any of the Shareholders.

     1.30 "Shareholders' Agreement" is defined in Recital A hereto.

     1.31  "Subsidiaries"  means any corporation the voting  securities of which
are 100% owned by the Company,  which exists  primarily to provide  (directly or
indirectly)  goods or  services  to, or for the  benefit  of,  TRG or any of its
properties or TCI or any of its  properties,  and which,  in the conduct of such
activities,  does not hold material assets. As of the date hereof, the following
corporations  constitute  Subsidiaries:  Adaide Company, a Michigan corporation,
Mall Financing, Inc., a Michigan corporation, Taubman Management Services, Inc.,
a Michigan corporation,  Taubman Services, Inc., a Michigan corporation, Beverly
Center  Restaurant  Corp., a California  corporation,  MMW-87A, Inc., a Michigan
corporation, Survivor, Inc., a Michigan corporation, Taub-Co C, Inc., a Michigan
corporation,  Beverly  Finance  Corporation,  a  Delaware  corporation,  Beverly
Partners I, Inc., a Delaware

                                       5

corporation,  Beverly  Partners  II,  Inc.,  a  Delaware  corporation,  Taub  Co
Biltmore,  Inc., a Delaware corporation,  Taub-Co Cherry Creek, Inc., a Delaware
corporation, Taub-Co Fairfax, Inc., a Michigan corporation, and Woodland Finance
Corporation, a Delaware corporation.

     1.32  "Termination  Election  Notice"  has the  meaning  ascribed  to it in
Section 2.3 of this Agreement.

     1.33  "Termination  Event" has the meaning ascribed to it in Section 2.3 of
this Agreement.

     1.34 "Third Party  Offer"  means a bona fide offer to purchase,  solely for
cash,  all (but not less than all) of the  shares of Common  Stock  owned by TRG
that TRG receives from a Third Party Offeror.

     1.35 "Third Party  Offeror"  means a third party who is not an Affiliate of
TRG.

     1.36  "Transfer"  means  assigning,  selling,   transferring,   exchanging,
pledging,  placing or permitting a lien to exist upon or otherwise  encumbering,
granting an option or proxy  (other  than a proxy  granted on a short term basis
(i.e.,  for a  single  meeting)  to an  officer  of the  owner  of the  relevant
interest),  or granting  any  interest in or rights  incident or relating to, or
otherwise  disposing,  whether voluntarily or involuntarily,  or by operation of
law,  for or  without  consideration  and  including,  without  limitation,  any
transfer by testamentary disposition.

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

     1.38  "Valuation  Date"  means the last day of the full  month  immediately
preceding the Closing Date.

     1.39 "Valuation Date Book Value" has the meaning  ascribed to it in Section
2.3 of this Agreement.

ARTICLE 2.

                            TRANSFERS OF COMMON STOCK
                        AND HOLDINGS MEMBERSHIP INTERESTS

     2.1.General. Except as expressly permitted by this Agreement,  without the
prior  written  approval of the other  Shareholder,  neither  Shareholder  shall
Transfer  all or any shares of the Common  Stock held by such  Shareholder.  Any
attempt to Transfer  shares of Common Stock in violation of this Agreement shall
be

                                       6

voidab initio.  Notwithstanding the foregoing, Holdings may Transfer all or any
portion  of  Holdings'  shares  of Common  Stock to a  Permitted  Transferee  of
Holdings,  provided that such Permitted Transferee agrees in writing to be bound
by all of the terms and restrictions set forth in this Agreement.
     Without TRG's prior written consent,  Holdings will not permit any Holdings
Member to  Transfer  all or any  portion of his  Holdings  Membership  Interest,
except that each Holdings Member may Transfer his Holdings  Membership  Interest
to a Permitted Transferee of such Holdings Member,  provided that such Permitted
Transferee  agrees in writing  to be bound by all of the terms and  restrictions
set forth in this Agreement.
     In the event that either  Shareholder  Transfers  all or any portion of the
Common Stock held by it in a transaction in full  compliance with the provisions
of this Article 2, any consent,  vote, decision, or the like required under this
Agreement  shall  require  the  written  approval of a majority of the shares of
Common Stock originally held by Holdings or TRG, as the case may be.
     2.2.Right of First Refusal on TRG's Common Stock. If at any time after the
expiration of the option  (defined  below) without its exercise,  TRG receives a
Third Party Offer that TRG desires to accept,  TRG shall first  submit the Third
Party  Offer to the AAT Trust and the  Company,  and the AAT Trust shall have 30
days within which to deliver an Election  Notice.  If the AAT Trust  delivers an
Election  Notice  within such 30-day period,  the AAT Trust shall  purchase  the
shares  of  Common  Stock  that are the  subject  of the  Third  Party  Offer in
accordance with the terms and conditions  contained in the Third Party Offer. If
the AAT Trust advises TRG that it does not intend to deliver an Election  Notice
or the AAT Trust fails to

                                       7

deliver an Election  Notice  within such 30-day period,  the Company  shall then
have 15 days from the  earlier of the date the AAT Trust so advises  TRG or such
30-day  period  has  elapsed,  as the case may be,  within  which to  deliver an
Election  Notice.  If the Company delivers an Election Notice within such 15-day
period,  the  Company  shall  purchase  the shares of Common  Stock that are the
subject of the Third Party  Offer in  accordance  with the terms and  conditions
contained  in the Third  Party  Offer.  If neither the AAT Trust nor the Company
delivers an Election Notice within the applicable period, TRG shall then have 30
days within which to complete the sale of the subject  shares to the Third Party
Offeror on terms and conditions,  and for a price, not less favorable to TRG, in
each and every respect, than the terms,  conditions,  and price contained in the
Third Party Offer.  Any sale by TRG pursuant to the  provisions  of this Section
2.2 shall be  conditioned  upon the  receipt by the Company and the AAT Trust of
the agreement,  in form and substance reasonably satisfactory to the Company and
the  AAT  Trust,  of the  purchaser  to be  bound  by all of the  terms  hereof,
including, without limitation, the provisions of this Section 2.2.
     2.3.Option to Purchase TRG's Common Stock.  TRG hereby grants the Company
an irrevocable option (the "Option") to purchase all, but not a portion,  of the
shares of Common Stock held by TRG. The Option shall be  exercisable  upon TRG's
failure to renew the Master Services  Agreement (an "Expiration  Event") or upon
TRG's  termination of the Master  Services  Agreement for cause, as set forth in
the Master Services Agreement (a "Termination Event"). If the Company determines
to exercise the Option (a) in the case of an Expiration Event, the Company shall
give TRG written notice of exercise (the  "Expiration  Election  Notice") at any
time within the one year period prior to the end of the then current term of

                                       8

the Master Services  Agreement,  and (b) in the case of a Termination Event, the
Company  shall give TRG written  notice of exercise (the  "Termination  Election
Notice") at any time within 90 days after the date on which the Company receives
written notice from TRG of the Termination  Event. If the Company  exercises the
Option,  the closing date for the  purchase of TRG's Common Stock (the  "Closing
Date") shall be on a date  selected by the Company (upon at least 10 days' prior
written  notice  to TRG)  that is not  more  than 60 days  after  delivery  of a
Termination  Election Notice or an Expiration  Election Notice,  as the case may
be;  however,  if the Company  has also  elected to  purchase  TRG's  membership
interest in the Manager  pursuant to the Operating  Agreement,  the Closing Date
shall  be the  date on which  the  Company  (or its  designee)  purchases  TRG's
membership interest in the Manager.
     Upon the  Company's  exercise of the Option,  the Company  shall direct the
Company's independent public accountants to certify the Company's  determination
of Book Value as of the Valuation Date (the  "Valuation  Date Book Value").  The
purchase  price for TRG's shares of Common Stock shall be the product of (a) the
Valuation Date Book Value,  less any dividends (other than share dividends) that
the Company has declared and paid subsequent to the Valuation  Date,  multiplied
by (b) a  fraction,  the  numerator  of which  shall be the  number of shares of
Common Stock held by TRG, and the  denominator  of which shall be the then total
number of  outstanding  shares of  capital  stock of the  Company.  TRG shall be
entitled to its pro rata share of any dividends declared but unpaid prior to the
Valuation Date.
     On the Closing Date, the Company shall pay the purchase price, by certified
check (same day funds) or by wire transfer of immediately  available  funds.  On
the

                                       9

Closing  Date,  TRG shall  transfer to the Company  (or its  designee)  good and
marketable title to TRG's shares of Common Stock,  free and clear of any claims,
liens, encumbrances,  restrictions, or rights of others, excluding any rights or
restrictions  created  or  imposed  by this  Agreement  or by  federal  or state
securities laws or regulations. TRG shall deliver such stock certificates, stock
powers,  and other  instruments  as the  Company  (or its  designee)  reasonably
requests  to  ensure  that the  Company  (or its  designee,  as the case may be)
acquires title to the Common Stock in the condition  required under this Section
2.3. The Company  shall,  if requested by TRG,  deliver an investment  letter in
customary form confirming compliance with Article 3 hereof.
     2.4.Exercise  of  Option.  TRG and  Holdings  hereby  agree that upon the
occurrence of an Expiration Event or a Termination  Event,  they shall cause the
Company to (i)  exercise the Option and (ii)  acquire  TRG's  entire  membership
interest in the Manager as provided in Article VIII of the Operating  Agreement,
unless  they  agree  otherwise  in  writing.

 ARTICLE 3.
                 CERTIFICATE LEGENDS; INVESTMENT REPRESENTATION

     A copy of this  Agreement  shall be filed with the Secretary of the Company
and kept with the records of the Company.  The certificates(s)  representing the
shares  of  Common  Stock  shall   conspicuously   bear   inscriptions   reading
substantially as follows:

          "THE SHARES  REPRESENTED BY THIS  CERTIFICATE HAVE NOT BEEN REGISTERED
     UNDER THE  SECURITIES  ACT OF 1933,  AS  AMENDED,  OR  QUALIFIED  UNDER ANY
     APPLICABLE  STATE  SECURITIES  LAWS.  THE SHARES HAVE BEEN ACQUIRED FOR THE
     ISSUEE'S OWN ACCOUNT,  FOR  INVESTMENT,  AND NOT WITH A VIEW TO  DISTRIBUTE
     THEM TO THE PUBLIC.  THE SHARES MAY

                                       10

     NOT BE PLEDGED OR  HYPOTHECATED  AND MAY NOT BE SOLD OR  TRANSFERRED  UNESS
     THEY ARE  REGISTERED  UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED,  AND
     QUALIFIED  UNDER ANY  APPLICABLE  STATE  SECURITIES  LAWS, OR UNLESS IN THE
     OPINION OF COUNSEL  WHICH  OPINION  AND  COUNSEL  ARE  SATISFACTORY  TO THE
     CORPORATION, SUCH REGISTRATION OR QUALIFICATION IS NOT REQUIRED.

          THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
     RESTRICTIONS  PRESCRIBED BY AN AGREEMENT  BETWEEN THE  CORPORATION  AND THE
     REGISTERED HOLDER OF THIS CERTIFICATE, AS MAY BE AMENDED FROM TIME TO TIME,
     A TRUE  AND  CORRECT  COPY  OF  WHICH  IS ON  FILE  AT THE  OFFICES  OF THE
     CORPORATION AT 200 EAST LONG LAKE ROAD, BLOOMFIELD HILLS, MICHIGAN 48304."

     Each Shareholder hereby confirms such  Shareholder's  representation to the
Company  and each  Holdings  Member  that  such  Shareholder  has  purchased  or
otherwise acquired its shares of common stock of the Company for investment, for
its own account, and not with a view to the resale or distribution thereof.

ARTICLE 4.
                RESTRICTIONS ON TRG AND PAYMENTS TO SHAREHOLDERS

     The Company and the Shareholders agree that at all times when TRG holds any
shares of Common  Stock,  the  activities  of the  Company  shall be  limited to
holding a membership  interest in the Manager,  and engaging in any activity and
exercising  any powers  permitted to  corporations  under the Michigan  Business
Corporation Act that are necessary or convenient to accomplish the foregoing.
     The  parties  hereby  agree  that  without  the  affirmative  vote  of both
Shareholders, the Company shall not pay any remuneration to any Shareholder, any
Holdings Member, any Affiliate of a Shareholder,  or any Affiliate of a Holdings
Member except in the form of cash dividends  paid equally,  on a share for share
basis, on the Common Stock.

                                       11

ARTICLE 5.
                                INJUNCTIVE RELIEF

     It is  acknowledged  that it will be  impossible  to  measure  in money the
damages  that would be suffered if any party to this  Agreement  fails to comply
with  any of the  terms  of this  Agreement  and  that in the  event of any such
failure, each of the non-defaulting parties will be irreparably damaged and will
not  have an  adequate  remedy  at law.  Any such non  defaulting  party  shall,
therefore, be entitled to injunctive relief, including specific performance,  to
enforce the terms of this  Agreement,  and if any action is brought in equity to
enforce any of the  provisions  of this  Agreement,  none of the parties  hereto
shall raise the defense that there is an adequate remedy at law.

ARTICLE 6.
                      RESTRICTIONS ON TAUB-CO'S ACTIVITIES

     The Shareholders  agree that other than protecting the Company's  ownership
of an interest  in TRG (and  pursuing,  exercising,  and  protecting  all of its
rights and  interests in respect  thereof),  its ownership of an interest in the
Manager  (and  pursuing,  exercising,  and  protecting  all  of its  rights  and
interests  in respect  thereof,  including,  without  limitation,  the option to
acquire TRG's membership interest in the Manager in accordance with the terms of
the Operating Agreement), its ownership of the Option (and pursuing, exercising,
and protecting all of its rights in respect thereof), and its ownership of cash,
other liquid  investments,  and other  corporations the sole activities of which
are necessary or desirable in connection with the operation of the Manager, TRG,
or an entity or entities for which  services are provided by the Manager  (which
services  are  permitted  pursuant  to  the  Master

                                       12

Services  Agreement or the Corporate Services  Agreement),  and any other assets
specifically  agreed to by the  Shareholders,  the Company may not engage in any
other venture activity of whatever nature.

ARTICLE 7.
                                     NOTICES

     All  notices  required  or  contemplated  under  this  Agreement  shall  be
delivered  (a)  personally,  (b) by next  day  courier  service  (e.g.,  Federal
Express),  or (c) by certified or registered  mail,  return  receipt  requested,
addressed, in the case of either Shareholder, to such Shareholder at its address
reflected in the Company's  records and addressed,  in the case of the AAT Trust
or the Company, to the AAT Trust or the Company, as applicable, to:

                  200 East Long Lake Road
                  Suite 200
                  Bloomfield Hills, Michigan 48304
                  Attention: President

All  notices  under this  Agreement  shall be deemed  received  when  personally
delivered,  on the first business day after  depositing  with a next day courier
service,  or in the case of mailing,  upon receipt or refusal to accept shown on
the delivery receipt or return receipt.

 ARTICLE 8.
                                 MISCELLANEOUS

     8.1.Successors  and Assigns.  This  Agreement  shall be binding upon, and
shall  inure to the  benefit  of,  the  parties  hereto,  and  their  respective
successors and permitted assigns,  including without limitation any successor or
successors of any party by liquidation,  reorganization,  merger, consolidation,
sale of substantially all

                                       13

assets, or other change in corporate,  partnership, or limited liability company
structure.
     8.2.Governing  Law.  This  Agreement  shall be governed  by, and shall be
interpreted  and construed in accordance  with, the law of the State of Michigan
applicable to contracts and agreements to be performed  solely with the State of
Michigan by residents of the State of Michigan,  i.e.,  without regard to choice
of law principles.
     8.3.Captions.  The  captions  used  throughout  this  Agreement  are  for
convenience only and shall not be used in the  interpretation or construction of
this Agreement.
     8.4.References;  Gender. Unless the context otherwise requires, references
in this  Agreement  to  Sections  shall be deemed to refer to  Sections  of this
Agreement.  Throughout  this Agreement,  the use of masculine  pronouns shall be
deemed to include feminine and neuter pronouns as the context may require.
     8.5.Entire  Agreement;  Amendment.  This  Agreement  contains  the entire
agreement among the parties hereto with respect to the transactions contemplated
herein,  supersedes  all prior  written  agreements  and  negotiations  and oral
understandings,  if any,  and may not be  amended,  supplemented  or  discharged
except  by  performance  or by an  instrument  in  writing  signed by all of the
parties hereto.
     8.6.Severability.  Wherever  possible,  each  provision of this Agreement
shall  be  interpreted  in  such  manner  as to be  effective  and  valid  under
applicable  law, but if any provision of this Agreement  shall be prohibited by,
or shall be invalid under,  applicable  law, such provision shall be ineffective
to the  extent of such

                                       14

prohibition or invalidity,  without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
     IN WITNESS WHEREOF,  the undersigned have entered into this Agreement as of
the date first above written.

                    TAUB-CO MANAGEMENT, INC., a Michigan
                    corporation

                    By:      /s/ Robert S. Taubman
                             ___________________________________________________

                    Its:     Authorized Signatory

                                       15

                    THE TAUBMAN REALTY GROUP LIMITED
                    PARTNERSHIP, a Delaware limited partnership

                    By:      /s/ Lisa A. Payne
                             ___________________________________________________

                    Its:     Authorized Signatory

                    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

                    By:      /s/ A. Alfred Taubman
                             ___________________________________________________
                             A. Alfred Taubman, Trustee

                    TAUB-CO HOLDINGS LLC, a Delaware limited liability company

                    By:  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, Member

                    By:      /s/ A. Alfred Taubman
                             ___________________________________________________
                             A. Alfred Taubman, Trustee

          Each of the  undersigned  hereby  agrees not to Transfer or attempt to
     Transfer,  all or any portion of his Holdings Membership Interest except as
     permitted pursuant to the second paragraph of Section 2.1.

                    /s/ Robert S. Taubman
                    ____________________________________________________________
                    ROBERT S. TAUBMAN

                    /s/ William S. Taubman
                    ____________________________________________________________
                    WILLIAM S. TAUBMAN

                                       16

THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP
                    AND THE TAUBMAN COMPANY LLC ELECTION AND
                            OPTION DEFERRAL AGREEMENT
                            _________________________

     This Agreement dated as of the 28th  day of December,  2001 is entered into
by and between The Taubman Realty Group Limited Partnership,  a Delaware limited
partnership  ("TRG"),  The Taubman  Company  LLC, a Delaware  limited  liability
company, (the "Manager") and Robert S. Taubman (the "Executive").

RECITALS:

     WHEREAS, TRG has engaged Manager, on an exclusive basis, to provide various
services,   including   management,   leasing,   development,   acquisition  and
administrative services, to TRG.

     WHEREAS,   TRG  currently   maintains  The  Taubman  Realty  Group  Limited
Partnership 1992 Incentive Option Plan (as amended and restated  effective as of
September  30, 1997) (the  "Incentive  Option  Plan") to provide  incentives  to
employees  of the  Manager to remain in the employ of Manager for the benefit of
TRG, to encourage a proprietary  interest in TRG, and to attract  employees with
outstanding qualifications to serve the Manager on behalf of TRG;

     WHEREAS,  Executive  was  granted an  incentive  option (the  "Option")  to
purchase Fifteen Hundred (1,500) Units of Partnership  Interest (as such term is
defined in the  Incentive  Option Plan)  pursuant to an Option  Agreement  dated
November 20, 1992 (the "1992 Option Agreement"). In connection with the division
of Units of  Partnership  Interest  effective  September  30, 1997,  Executive's
Option to purchase 1,500 Units of Partnership Interest was converted,  effective
as of September  30,  1997,  into an Option to purchase two million nine hundred
sixty  two  thousand,  six  hundred  twenty  (2,962,620)  Units  of  Partnership
Interest;

     WHEREAS, Executive wishes to give up his right to receive the Units subject
to the Option by making an election to defer  receipt of the Units  attributable
to the gains that would be recognized  upon the exercise of the Option  pursuant
to the terms and conditions of this Agreement; and

     WHEREAS,  TRG,  the Manager and  Executive,  wish to modify the 1992 Option
Agreement  to provide for the  deferral of gains that would be  recognized  upon
Executive's  exercise  of the  Option  and to  credit  such  gains  to  Deferred
Compensation  Account (as defined in paragraph 1)  maintained  by the Manager in
consideration of the valuable services Executive performs for the benefit of the
Manager and TRG.

     NOW,  THEREFORE,  TRG, the Manager and  Executive,  intending to be legally
bound, and in consideration of the agreements set forth herein,  hereby agree as
follows:

     1.Election to Defer and  Investment  of Option Gain.  Upon exercise of the
Option  and in lieu of his  receiving  the full  number of Units  subject to the
Option,   Executive  hereby  elects  to  defer  receipt  of  all  of  the  Units
attributable to the gain that would,  but for this Agreement,  be recognized for
federal and state  income tax  purposes  (the  "Gain")  upon his exercise of the
Option.  Contemporaneously  with Executive's  exercise of the Option,  TRG shall
direct the Manager to establish a  bookkeeping  reserve  account (the  "Deferred
Compensation  Account") to reflect the amount of the Gain. The Gain shall be the
amount  equal to the Fair Market  Value of Units of  Partnership  subject to the
Option on the Date of  Exercise  minus  the  Exercise  Price (as such  terms are
defined  in the  Incentive  Option  Plan).  The amount of Gain  credited  to the
Deferred  Compensation  Account  shall be deemed  invested  in phantom  units of
partnership  interest in TRG ( the  "Notional  Units").  A Notional Unit will be
utilized solely as a device for the measurement and determination of the amounts
to be paid to or for the benefit of  Executive  pursuant to this  Agreement  and
will not under any circumstances constitute or be treated as a trust fund of any
kind. The actual number of Units to which  Executive would otherwise be entitled
under the Option  Agreement  upon exercise of the Option shall be reduced by the
number of Notional Units.

          (a)Distribution Equivalents.  On each date in which holders of actual
     Units of  Partnership  Interest  receive  distributions  in respect of such
     Units of Partnership Interest, the Manager shall distribute to Executive an
     amount  equal to (i) the  distribution  amount  paid with  respect  to each
     actual Unit of Partnership  Interest on such distribution date,  multiplied
     by (ii) the number of Notional Units credited to the Deferred  Compensation
     Account as of the business day immediately preceding such distribution date
     (the "Distribution Equivalents").  Distribution Equivalents will be paid to
     Executive in cash lump sum payments.

          (b)No Rights as a Partner.  A Notional  Unit shall not  represent  an
     ownership  interest in actual  Units of  Partnership  Interest of TRG,  and
     Executive  shall  have no rights as a partner  in TRG with  respect  to the
     Notional Units credited to the Deferred Compensation Account.

     2.Vesting of Deferred  Compensation  Account.  The  Deferred  Compensation
Account shall be fully vested and nonforfeitable at all times.

     3.Payment of Deferred  Compensation  Account.  All amounts credited to the
Deferred  Compensation  Account shall be distributed to Executive in the form of
actual  Units of  Partnership  Interest  upon  the  earlier  of (a)  Executive's
termination of employment for any reason,  or (b) the ten (10) year  anniversary
of  Executive's  Date  of  Exercise  of the  Option.  Payment  shall  be made in
substantially  equal annual  installments  over a ten year period with the first
payment  commencing on the first day of the month following (a) or (b) above and
each subsequent payment on the anniversary thereof.

     Any  portion  of the  Deferred  Compensation  Account  which  has not  been
distributed  to Executive  shall  continue to be invested in Notional  Units and
Executive  shall continue to receive  Distribution  Equivalents  with respect to
Notional Units in the Deferred Compensation Account.

                                       2

     4.Designation of  Beneficiary.  Executive  shall designate in writing and
file with the Manager a designated beneficiary to receive benefits payable under
this  Agreement  in the event of his death  prior to his  receipt of all amounts
credited to the Deferred Compensation Account. If Executive has not designated a
beneficiary,  such death  benefit shall be paid to his estate.  Any  beneficiary
designation  may be revoked or modified at any time by  Executive  but only in a
writing filed with the Manager.

     5.Amendment.  This  Agreement may be amended by the written  agreement of
TRG, the Manager and Executive at any time; provided, however, that no amendment
shall reduce any benefits in which  Executive has a vested interest prior to the
effective date of the amendment.

     6.Termination Upon Change of Control.  Notwithstanding any other provision
of this  Agreement,  this Agreement will terminate  immediately  and all amounts
credited to the Deferred  Compensation  Account will be distributed to Executive
in a lump sum payment in the form of actual Units of Partnership Interest upon a
Change of Control  Event (as  defined in the  Incentive  Option  Plan)  which is
followed  by  Executive's  termination  of  employment  within six months of the
Change of Control Event.

     7.Governing Law. This Agreement  shall be construed in accordance with the
internal  laws of the  State of  Michigan  (excluding  the  choice  of law rules
thereof).

     8.Alienation or Assignment of Benefits. Benefits payable pursuant to this
Agreement shall not be subject in any manner to anticipation,  alienation, sale,
transfer, or assignment.

     9.Ownership of Deferred  Compensation  Account.  Title to and  beneficial
ownership of any assets, whether Notional Units, Distribution Equivalents,  cash
or other  investments  which the  Manager  or TRG may set aside to  fulfill  its
deferred  obligation  under this  Agreement  shall at all times  remain with the
Manager  or TRG and  neither  Executive  nor his  beneficiary  shall  under  any
circumstances  acquire  any  property  interest  in any  specific  assets of the
Manager or TRG. Nothing contained in this Agreement and no action taken pursuant
to the  provisions  of this  Agreement  shall create or be construed to create a
fiduciary  relationship  between TRG or the Manager and  Executive  or any other
person.  Any funds which may be invested  under the provisions of this Agreement
shall  continue for all purposes to be part of the general assets of the Manager
or TRG and no  person  other  than the  Manager  or TRG  shall by  virtue of the
provisions of this Agreement have any interest in such funds. To the extent that
any person  acquires a right to receive  payments  from the Manager or TRG under
this  Agreement,  such right shall be no greater  than the right of an unsecured
general  creditor of the Manager or TRG. In the sole  discretion of the Manager,
all or any portion of the amounts credited to the Deferred  Compensation Account
may be contributed to a trust established by the Manager in connection with this
Agreement.  Neither Executive nor his beneficiary shall have the right to direct
or  require  that the  Manager  contribute  amounts to a trust.  Any  amounts so
contributed  shall be held,  invested and administered to provide benefits under
this  Agreement  except as otherwise  required in the  agreement  governing  the
trust.

                                       3

     10.1992 Option Agreement.  The 1992 Option Agreement,  as modified by this
Agreement with respect to Executive's  election to defer the Gain,  shall remain
in full force and effect.

     11.Miscellaneous.  This Agreement is intended to be an unfunded,  top hat
plan available only to a management or highly  compensated  employee  within the
meaning of Sections 201(2),  301(a)(3), and 401(a)(1) of the Employee Retirement
Income Security Act of 1974 (as amended "ERISA").

     12.Execution.  To record the adoption of this Agreement,  TRG, the Manager
and  Executive  have caused the  execution  hereof as of the date first  written
above.

                                            TAUBMAN REALTY GROUP,
                                            a Delaware limited partnership

                                            By:  Taubman Centers, Inc.
                                            Its:  Managing General Partner

                                            By:    /Lisa Payne/
                                            ------------------------------------
                                            Lisa Payne

                                            Its:   Chief Financial Officer

                                            THE TAUBMAN COMPANY LLC, Manager
                                            a Delaware limited liability company

                                            By:    /Lisa Payne/
                                            ------------------------------------
                                            Lisa Payne

                                            Its:   Chief Financial Officer

                                            ROBERT S. TAUBMAN, Executive

                                            /Robert S. Taubman/
                                            ------------------------------------

                                       4

                                                                                                                          Exhibit 12
 Taubman Centers, Inc.

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

                                                                                    Year Ended December 31
                                                         ---------------------------------------------------------------------------
                                                              2001            2000           1999           1998            1997
                                                              ----            ----           ----           ----            ----

Net Earnings from Continuing Operations (1)              $    55,664    $    66,487     $    58,445    $     70,403   $    28,662

Add back:
  Fixed charges                                              140,884        127,112         105,741        139,556
  Amortization of previously capitalized interest (2)          2,632          2,203           2,167          2,335

Deduct:
  Capitalized interest (2)                                   (29,514)       (30,730)        (15,574)       (19,254)
                                                         -----------    -----------     -----------    -----------    -----------
Earnings Available for Fixed Charges and
     Preferred Dividends and Distributions               $   169,666    $   165,072     $   150,779    $   193,040    $    28,662
                                                         ===========    ===========     ===========    ===========    ===========
Fixed Charges
   Interest expense                                           68,150         57,329     $    51,327         75,809
   Capitalized interest                                       23,748         25,052          14,489         18,192
   Interest portion of rent expense                            3,845          3,872           4,122          6,383
   Proportionate share of Unconsolidated
     Joint Ventures' fixed charges                            45,141         40,859          35,803         39,172
                                                         -----------    -----------     -----------    -----------
   Total Fixed Charges                                   $   140,884    $   127,112     $   105,741    $   139,556
                                                         -----------    -----------     -----------    -----------

Preferred Dividends and Distributions                         25,600         25,600          19,044         16,600          4,058
                                                         -----------    -----------     -----------    -----------    -----------

   Total Fixed Charges and Preferred Dividends
     and Distributions                                   $   166,484    $   152,712     $   124,785    $   156,156    $     4,058
                                                         ===========    ===========     ===========    ===========    ===========

Ratio of Earnings to Fixed Charges and
      Preferred Dividends and Distributions                      1.0            1.1             1.2            1.2            7.1

(1)  On September  30,  1998,  the Company  obtained a majority and  controlling
     interest  in TRG, as a result of the GMPT  Exchange.  Upon  obtaining  this
     controlling  interest,  the Company  consolidated  the  accounts of TRG for
     1998. The Company previously  accounted for its investment in TRG under the
     equity  method.  The  Company  does not have,  and has not had,  any parent
     company outstanding  indebtedness.  Prior to October, 1997, the Company had
     no preferred stock.
(2)  Amounts   include  TRG's  pro  rata  share  of  capitalized   interest  and
     amortization of previously capitalized interest of the Unconsolidated Joint
     Ventures.

                                                                                                      Exhibit 21

TAUBMAN CENTERS, INC.
                                                   LIST OF SUBSIDIARIES

                                                        JURISDICTION
NAME                                                    OF FORMATION                       DOING BUSINESS AS
----                                                    ------------                       -----------------

Biltmore Shopping Centers Partners, LLC                Arizona                         Biltmore Fashion Park

Fairlane Town Center LLC                               Michigan                        Fairlane Town Center

La Cienega Associates                                  California                      Beverly Center

La Cumbre Shopping Centre Associates                   California                      La Cumbre Plaza

Lakeside/Novi Land Partnership LLC                     Michigan                        N/A

Paseo Nuevo Associates                                 California                      Paseo Nuevo

Short Hills Associates LLC                             New Jersey                      The Mall at Short Hills

Taub-Co Management, Inc.                               Michigan                        N/A

Taub-Co Management IV, Inc.                            Michigan                        N/A

Taubman Auburn Hills Associates                        Delaware                        Great Lakes Crossing
  Limited Partnership

MacArthur Shopping Center LLC                          Delaware                        MacArthur Center

The Taubman Company LLC                                Delaware                        The Taubman Company

The Taubman Realty Group                               Delaware                        N/A
  Limited Partnership

TJ Palm Beach Associates                               Delaware                        The Mall at Wellington Green
  Limited Partnership

Taubman Regency Square Associates, LLC                 Virginia                        Regency Square

Twelve Oaks Mall LLC                                   Michigan                        Twelve Oaks Mall

Willow Bend Associates Limited Partnership             Delaware                        The Shops at Willow Bend

                                                                      Exhibit 23

INDEPENDENT AUDITORS' CONSENT

We consent to the  incorporation by reference in Amendment No. 1 to Form S-11 on
Form S-8  Registration  Statement  No.  33-65934 of Taubman  Centers,  Inc.,  in
Amendment  No. 2 to Form S-3  Registration  Statement  No.  33-73038  of Taubman
Centers,  Inc.,  in  Amendment  No. 1 to Form  S-3  Registration  Statement  No.
33-99636 of Taubman  Centers,  Inc., in Amendment No. 3 to Form S-3 Registration
Statement  No.  333-19503 of Taubman  Centers,  Inc.,  in Form S-3  Registration
Statement No. 333-16781 of Taubman Centers, Inc., in Amendment No. 1 to Form S-3
Registration  Statement No. 333-35433 and in  Post-Effective  Amendment No. 1 to
Registration Statement No. 33-73038 on Form S-3 of Taubman Centers, Inc., of our
reports dated February 12, 2002 on the consolidated financial statements and the
financial  statement  schedules  of  Taubman  Centers,  Inc.  and  the  combined
financial statements and the financial statement schedules of the Unconsolidated
Joint Ventures of The Taubman Realty Group Limited Partnership appearing in this
Annual Report on Form 10-K of Taubman Centers,  Inc. for the year ended December
31, 2001.

Deloitte & Touche LLP

Detroit, Michigan
March 27, 2002

                                POWER OF ATTORNEY

     The  undersigned,   a  Director  of  Taubman  Centers,   Inc.,  a  Michigan
corporation  (the  "Company"),  does hereby  constitute  and  appoint  Robert S.
Taubman and Lisa A. Payne and each of them, with full power of substitution,  as
his true and lawful attorney and agent to execute in his name and on his behalf,
as a Director of the Company,  the Company's  Annual Report on Form 10-K for the
year ended December 31, 2001, and any and all  amendments  thereto,  to be filed
with the Securities and Exchange  Commission (the "Commission")  pursuant to the
Securities  Exchange  Act of  1934,  as  amended  (the  "Act"),  and any and all
instruments  that  such  attorneys  and  agents,  or  either  of them,  may deem
necessary  or  advisable  to enable the  Company to comply  with the Act and the
rules,  regulations,  and requirements of the Commission in respect thereof, and
the undersigned  does hereby ratify and confirm as his own act and deed all that
such  attorneys  and agents,  and each of them,  shall do or cause to be done by
virtue hereof. Each such attorney or agent shall have, and may exercise,  all of
the powers hereby  conferred.
     IN WITNESS WHEREOF,  the undersigned has hereunto  subscribed his signature
this 27th day of February, 2002.

                                                     /s/ Graham T. Allison
                                                     ___________________________
                                                     Graham T. Allison

                                POWER OF ATTORNEY

     The  undersigned,   a  Director  of  Taubman  Centers,   Inc.,  a  Michigan
corporation  (the  "Company"),  does hereby  constitute  and  appoint  Robert S.
Taubman and Lisa A. Payne and each of them, with full power of substitution,  as
his true and lawful attorney and agent to execute in his name and on his behalf,
as a Director of the Company,  the Company's  Annual Report on Form 10-K for the
year ended December 31, 2001, and any and all  amendments  thereto,  to be filed
with the Securities and Exchange  Commission (the "Commission")  pursuant to the
Securities  Exchange  Act of  1934,  as  amended  (the  "Act"),  and any and all
instruments  that  such  attorneys  and  agents,  or  either  of them,  may deem
necessary  or  advisable  to enable the  Company to comply  with the Act and the
rules,  regulations,  and requirements of the Commission in respect thereof, and
the undersigned  does hereby ratify and confirm as his own act and deed all that
such  attorneys  and agents,  and each of them,  shall do or cause to be done by
virtue hereof. Each such attorney or agent shall have, and may exercise,  all of
the powers hereby  conferred.
     IN WITNESS WHEREOF,  the undersigned has hereunto  subscribed his signature
this 29th day of March, 2002.

                                                     /s/ Allan J. Bloostein
                                                     ___________________________
                                                     Allan J. Bloostein

                                POWER OF ATTORNEY

     The  undersigned,   a  Director  of  Taubman  Centers,   Inc.,  a  Michigan
corporation  (the  "Company"),  does hereby  constitute  and  appoint  Robert S.
Taubman and Lisa A. Payne and each of them, with full power of substitution,  as
his true and lawful attorney and agent to execute in his name and on his behalf,
as a Director of the Company,  the Company's  Annual Report on Form 10-K for the
year ended December 31, 2001, and any and all  amendments  thereto,  to be filed
with the Securities and Exchange  Commission (the "Commission")  pursuant to the
Securities  Exchange  Act of  1934,  as  amended  (the  "Act"),  and any and all
instruments  that  such  attorneys  and  agents,  or  either  of them,  may deem
necessary  or  advisable  to enable the  Company to comply  with the Act and the
rules,  regulations,  and requirements of the Commission in respect thereof, and
the undersigned  does hereby ratify and confirm as his own act and deed all that
such  attorneys  and agents,  and each of them,  shall do or cause to be done by
virtue hereof. Each such attorney or agent shall have, and may exercise,  all of
the powers hereby conferred.
     IN WITNESS WHEREOF,  the undersigned has hereunto  subscribed his signature
this 21st day of February, 2002.

                                                     /s/ Jerome A. Chazen
                                                     ___________________________
                                                     Jerome A. Chazen

                                POWER OF ATTORNEY

     The  undersigned,   a  Director  of  Taubman  Centers,   Inc.,  a  Michigan
corporation  (the  "Company"),  does hereby  constitute  and  appoint  Robert S.
Taubman and Lisa A. Payne and each of them, with full power of substitution,  as
his true and lawful attorney and agent to execute in his name and on his behalf,
as a Director of the Company,  the Company's  Annual Report on Form 10-K for the
year ended December 31, 2001, and any and all  amendments  thereto,  to be filed
with the Securities and Exchange  Commission (the "Commission")  pursuant to the
Securities  Exchange  Act of  1934,  as  amended  (the  "Act"),  and any and all
instruments  that  such  attorneys  and  agents,  or  either  of them,  may deem
necessary  or  advisable  to enable the  Company to comply  with the Act and the
rules,  regulations,  and requirements of the Commission in respect thereof, and
the undersigned  does hereby ratify and confirm as his own act and deed all that
such  attorneys  and agents,  and each of them,  shall do or cause to be done by
virtue hereof. Each such attorney or agent shall have, and may exercise,  all of
the powers hereby  conferred.
     IN WITNESS WHEREOF,  the undersigned has hereunto  subscribed his signature
this 29th day of March, 2002.

                                                     /s/ S. Parker Gilbert
                                                     ___________________________
                                                     S. Parker Gilbert

                                POWER OF ATTORNEY

     The  undersigned,   a  Director  of  Taubman  Centers,   Inc.,  a  Michigan
corporation  (the  "Company"),  does hereby  constitute  and  appoint  Robert S.
Taubman and Lisa A. Payne and each of them, with full power of substitution,  as
his true and lawful attorney and agent to execute in his name and on his behalf,
as a Director of the Company,  the Company's  Annual Report on Form 10-K for the
year ended December 31, 2001, and any and all  amendments  thereto,  to be filed
with the Securities and Exchange  Commission (the "Commission")  pursuant to the
Securities  Exchange  Act of  1934,  as  amended  (the  "Act"),  and any and all
instruments  that  such  attorneys  and  agents,  or  either  of them,  may deem
necessary  or  advisable  to enable the  Company to comply  with the Act and the
rules,  regulations,  and requirements of the Commission in respect thereof, and
the undersigned  does hereby ratify and confirm as his own act and deed all that
such  attorneys  and agents,  and each of them,  shall do or cause to be done by
virtue hereof. Each such attorney or agent shall have, and may exercise,  all of
the powers hereby conferred.
     IN WITNESS WHEREOF,  the undersigned has hereunto  subscribed his signature
this 21st day of February, 2002.

                                                     /s/ Peter Karmanos, Jr.
                                                     ___________________________
                                                     Peter Karmanos, Jr.

                                POWER OF ATTORNEY

     The  undersigned,   a  Director  of  Taubman  Centers,   Inc.,  a  Michigan
corporation  (the  "Company"),  does hereby  constitute  and  appoint  Robert S.
Taubman and Lisa A. Payne and each of them, with full power of substitution,  as
his true and lawful attorney and agent to execute in his name and on his behalf,
as a Director of the Company,  the Company's  Annual Report on Form 10-K for the
year ended December 31, 2001, and any and all  amendments  thereto,  to be filed
with the Securities and Exchange  Commission (the "Commission")  pursuant to the
Securities  Exchange  Act of  1934,  as  amended  (the  "Act"),  and any and all
instruments  that  such  attorneys  and  agents,  or  either  of them,  may deem
necessary  or  advisable  to enable the  Company to comply  with the Act and the
rules,  regulations,  and requirements of the Commission in respect thereof, and
the undersigned  does hereby ratify and confirm as his own act and deed all that
such  attorneys  and agents,  and each of them,  shall do or cause to be done by
virtue hereof. Each such attorney or agent shall have, and may exercise,  all of
the powers hereby conferred.
     IN WITNESS WHEREOF,  the undersigned has hereunto  subscribed his signature
this 22nd day of February, 2002.

                                                     /s/ William S. Taubman
                                                     ___________________________
                                                     William S. Taubman

                                                                                   MORTGAGE AND OTHER NOTES PAYABLE
                                                                        INCLUDING WEIGHTED INTEREST RATES AT DECEMBER 31, 2001
                                                             BENEFICIAL      EFFECTIVE
                                                 100%         INTEREST       RATE     (a)
                                                                                           ------------------------------------------------------------------------------------------------------------
                                               12/31/01       12/31/01     12/31/01          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 FASHION PARK                               79.0             79.0       7.68%            0.8      0.8       0.9      1.0       1.1      1.2       1.2      72.0                           79.0
MACARTHUR CENTER                                   143.6            100.5       7.59%            1.0      1.1       1.1      1.2       1.3      1.4       1.5       1.7     90.2                 100.5
REGENCY SQUARE                                      82.4             82.4       6.75%            0.8      0.9       0.9      1.0       1.1      1.1       1.2       1.3      1.4      72.8        82.4
THE MALL AT SHORT HILLS                            270.0            270.0       6.70%            1.9      3.0       3.2      3.5       3.7      4.0       4.2     246.4                          270.0
OTHER                                               23.5             23.5      12.07%            1.8      0.3       0.3      0.3       0.4      0.4       0.1      20.0      0.0       0.0        23.5
                                              ---------------------------------------------------------------------------------------------------------------------------------------------------------
TOTAL CONSOLIDATED FIXED                           744.5            701.4       7.47%            6.2      6.1     152.5      7.0       7.5      8.1       8.3     341.4     91.5      72.8       701.4
WEIGHTED RATE                                                                                  7.14%    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                               151.0            128.3       4.04% (c)      128.3                                                                                             128.3                                                                                                                                                                                                   0.0
THE SHOPS AT WILLOW BEND                           186.5            186.5       4.15% (d)               186.5                                                                                    186.5
THE MALL AT WELLINGTON GREEN                       124.3            111.9       4.47% (e)                         111.9                                                                          111.9
TRG CREDIT FACILITY                                 12.0             12.0       3.20% (i)       12.0                                                                                              12.0
TRG CREDIT FACILITY                                205.0            205.0       3.10% (f)                         205.0                                                                          205.0
                                              ---------------------------------------------------------------------------------------------------------------------------------------------------------
TOTAL CONSOLIDATED FLOATING                        678.7            643.7       3.83%          140.3    186.5     316.9                                                                          643.7
WEIGHTED RATE                                                                                  3.97%    4.15%     3.59%

TOTAL CONSOLIDATED                               1,423.2          1,345.1       5.73%          146.5    192.6     469.4      7.0       7.5      8.1       8.3     341.4     91.5      72.8     1,345.1
WEIGHTED RATE                                                                                  4.10%    4.24%     5.12%    6.98%     6.98%    6.99%     7.01%     7.28%    7.58%     6.75%
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

JOINT VENTURES FIXED RATE DEBT:
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
ARIZONA MILLS                          36.84%      144.7             53.3       7.90%            0.4      0.5       0.5      0.6       0.6      0.6       0.7       0.8     48.7                  53.3
CHERRY CREEK                           50.00%      177.0             88.5       7.68%                               0.5      1.3      86.7                                                        88.6
FAIR OAKS                              50.00%      140.0             70.0       6.60%                                                                    70.0                                     70.0
WESTFARMS                              78.94%      100.0             78.9       7.85%           78.9                                                                                              78.9
WOODLAND                               50.00%       66.0             33.0       8.20%                              33.0                                                                           33.0
                                              ---------------------------------------------------------------------------------------------------------------------------------------------------------
TOTAL JOINT VENTURE FIXED                          627.7            323.8       7.58%           79.4      0.5      34.0      1.8      87.3      0.6      70.7       0.8     48.7                 323.8
WEIGHTED RATE                                                                                  7.85%    7.90%     8.19%    7.75%     7.68%    7.90%     6.61%     7.90%    7.90%

JOINT VENTURES FLOATING RATE DEBT:
----------------------------------
DOLPHIN MALL                           50.00%      164.6 (b)         82.3       4.53% (g)       82.3                                                                                              82.3
THE MALL AT MILLENIA                   50.00%       56.5             28.3       4.04% (h)                28.3                                                                                     28.3
STAMFORD TOWN CENTER                   50.00%       76.0             38.0       2.70% (j)       38.0                                                                                              38.0
INTERNATIONAL PLAZA                    26.49%      171.6             45.4       4.37% (k)       45.4                                                                                              45.4
WESTFARMS                              78.94%       55.0             43.4       5.16% (l)       43.4                                                                                              43.4
OTHER                                                2.7              1.6       4.75% (i)        0.5      0.5       0.4      0.2       0.0                                                         1.6
                                              ---------------------------------------------------------------------------------------------------------------------------------------------------------
TOTAL JOINT VENTURE FLOATING                       526.4            239.0       4.26%          209.7     28.7       0.4      0.2       0.0                                                       239.0
WEIGHTED RATE                                                                                  4.29%    4.05%     4.75%    4.75%     4.75%

TOTAL JOINT VENTURE                              1,154.1            562.8       6.17%          289.0     29.2      34.4      2.0      87.4      0.6      70.7       0.8     48.7                 562.8
WEIGHTED RATE                                                                                  5.27%    4.11%     8.15%    7.49%     7.68%    7.90%     6.61%     7.90%    7.90%
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

TRG BENEFICIAL INTEREST TOTALS
------------------------------
FIXED RATE DEBT                                                   1,025.2       7.50%           85.6      6.6     186.5      8.8      94.9      8.7      78.9     342.2    140.2      72.8     1,025.2
                                                                                               7.80%    7.04%     8.28%    7.14%     7.63%    7.05%     6.65%     7.28%    7.69%     6.75%
FLOATING RATE DEBT                                                  882.7       3.95%          349.9    215.2     317.3      0.2       0.0      0.0       0.0       0.0      0.0       0.0       882.7
                                                                                               4.16%    4.14%     3.59%    4.75%     4.75%
TOTAL                                                             1,907.9       5.86%          435.5    221.8     503.8      9.0      94.9      8.7      78.9     342.2    140.2      72.8     1,907.9
                                                                                               4.88%    4.22%     5.32%    7.09%     7.62%    7.05%     6.65%     7.28%    7.69%     6.75%
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Average Maturity                    4.32
                                                                                           ==========

(a) Does not include effect of amortization of debt issuance costs or interest rate hedging costs.
(b) As of 12//31/01, $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 March 2002.
(d) LIBOR rate is locked to November 2002 on $182.4 M and floating month to month on the remainder.
(e) LIBOR rate is locked to October 2002 on $106.7 M and to November 2002 on the remainder.
(f) LIBOR rate is locked to November 2002 on $75 M, to February 2002 on $50 M and is floating monthly on $80 M.
(g) LIBOR rate is locked to October 2002.
(h) LIBOR rate is locked to May 2002 on $48.3 M and is floating month to month on the remainder.
(i) Rate floats daily.
(j) LIBOR rate is floating month to month.
(k) LIBOR rate is locked to October 2002 on $160.4 M, to May 2002 on $5.2 M and is floating month to month on the remainder.
(l) LIBOR rate is locked to July 2002.