Taubman Centers Inc

TAUBMAN CENTERS INC

FORM 10-Q (Quarterly Report)

Filed 11/16/98 for the Period Ending 09/30/98

Address 200 E LONG LAKE RD SUITE 300 P O BOX 200 BLOOMFIELD HILLS, MI 48303-0200 Telephone 2482586800 CIK 0000890319 Symbol TCO SIC Code 6798 - Real Estate Investment Trusts Industry Real Estate Operations Sector Services Fiscal Year 12/31

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Form 10-Q

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

For the Quarter Ended: June 30, 1998 Commission File No. 1-11530 Taubman Centers, Inc. (Exact name of registrant as specified in its charter)

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

200 East Long Lake Road, Suite 300, P.O. Box 200, Bloomfield Hills, Michigan

(Address of principal executive offices) 48303-0200 ------(Zip Code)

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

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

Yes X . No .

As of November 12, 1998, there were outstanding 52,922,823 shares of the Company's common stock, par value $0.01 per share. PART 1. FINANCIAL INFORMATION

Item 1. Financial Statements.

The following financial statements of Taubman Centers, Inc. (the Company) are provided pursuant to the requirements of this item. The financial statements of The Taubman Realty Group Limited Partnership (TRG) are also provided.

INDEX TO FINANCIAL STATEMENTS

TAUBMAN CENTERS, INC.

Balance Sheet as of September 30, 1998 and December 31, 1997...... 2 Statement of Operations for the three months ended September 30, 1998 and 1997...... 3 Statement of Operations for the nine months ended September 30, 1998 and 1997...... 4 Statement of Cash Flows for the nine months ended September 30, 1998 and 1997...... 5 Notes to Financial Statements...... 6

THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP

Consolidated Balance Sheet as of September 30, 1998 and December 31, 1997.... 12 Consolidated Statement of Operations for the three months ended September 30, 1998 and 1997...... 13 Consolidated Statement of Operations for the nine months ended September 30, 1998 and 1997...... 14 Consolidated Statement of Cash Flows for the nine months ended September 30, 1998 and 1997...... 15 Notes to Consolidated Financial Statements...... 16

- 1 - TAUBMAN CENTERS, INC.

BALANCE SHEET (in thousands, except share data)

September 30 December 31 ------1998 1997 ------

Assets: Investment in TRG (Notes 1 and 2): Partnership interest $ 347,859 Series A Preferred Equity interest 200,000 ------$ 547,859 Properties, net of accumulated depreciation and amortization of $167,259 $1,204,531 Investment in Unconsolidated Joint Ventures 96,067 Cash and cash equivalents 33,804 8,965 Accounts and notes receivable, less allowance for doubtful accounts of $386 14,249 Accounts receivable from related parties 8,428 Deferred charges and other assets 21,302 ------$1,378,381 $ 556,824 ======

Liabilities: Unsecured notes payable $ 441,496 Mortgage notes payable 241,969 Accounts payable and accrued liabilities 155,144 $ 277 Dividends payable 12,435 11,929 ------$ 851,044 $ 12,206 Commitments and Contingencies (Note 3)

Minority Interests (Note 1)

Shareowners' Equity (Notes 3 and 4): Series A Cumulative Redeemable Preferred Stock, $0.01 par value, 50,000,000 shares authorized, $200 million liquidation preference, 8,000,000 shares issued and outstanding at September 30, 1998 and December 31, 1997 $ 80 $ 80 Series B Non-Participating Convertible Preferred Stock, $0.001 par and liquidation value, 40,000,000 shares authorized at September 30, 1998, none issued Common Stock, $0.01 par value, 250,000,000 shares authorized, 52,916,896 and 50,759,657 issued and outstanding at September 30, 1998 and December 31, 1997 529 508 Additional paid-in capital 697,088 668,951 Dividends in excess of net income (170,360) (124,921) ------$ 527,337 $ 544,618 ------$1,378,381 $ 556,824 ======

See notes to financial statements.

- 2 - TAUBMAN CENTERS, INC.

STATEMENT OF OPERATIONS (in thousands, except share data)

Three Months Ended September 30 ------1998 1997 ------

Income: Income before extraordinary item from investment in TRG (Note 2): Equity in TRG's income before extraordinary item allocable to partnership unitholders $ 1,567 $ 6,408 Series A Preferred Equity interest in TRG 4,150 Interest and other 100 78 ------$ 5,817 $ 6,486 ------

Operating Expenses: General and administrative $ 182 $ 210 Management fee 62 62 ------$ 244 $ 272 ------Income before extraordinary item $ 5,573 $ 6,214 Equity in TRG's extraordinary item (Note 2) (19,699) ------Net income (loss) $(14,126) $ 6,214 Preferred dividends (4,150) ------Net income (loss) available to common shareowners $(18,276) $ 6,214 ======

Basic earnings per common share: Income before extraordinary item $ .03 $ .12 ======Net income (loss) $ (.35) $ .12 ======

Diluted earnings per common share: Income before extraordinary item $ .03 $ .12 ======Net income (loss) $ (.34) $ .12 ======

Cash dividends declared per common share $ .235 $ .23 ======

Weighted average number of common shares outstanding 52,899,013 50,745,241 ======

See notes to financial statements.

- 3 - TAUBMAN CENTERS, INC.

STATEMENT OF OPERATIONS (in thousands, except share data)

Nine Months Ended September 30 ------1998 1997 ------

Income: Income before extraordinary items from investment in TRG (Note 2): Equity in TRG's income before extraordinary items allocable to partnership unitholders $ 11,910 $ 19,102 Series A Preferred Equity interest in TRG 12,450 Interest and other 295 229 ------$ 24,655 $ 19,331

Operating Expenses: General and administrative $ 582 $ 591 Management fee 187 187 ------$ 769 $ 778 ------

Income before extraordinary items $ 23,886 $ 18,553 Equity in TRG's extraordinary items (Note 2) (20,066) ------Net income $ 3,820 $ 18,553 Preferred dividends (12,450) ------Net income (loss) available to common shareowners $ (8,630) $ 18,553 ======

Basic earnings per common share: Income before extraordinary items $ .22 $ .37 ======Net income (loss) $ (.17) $ .37 ======

Diluted earnings per common share: Income before extraordinary items $ .22 $ .36 ======Net income (loss) $ (.17) $ .36 ======

Cash dividends declared per common share $ .705 $ .69 ======

Weighted average number of common shares outstanding 51,949,256 50,730,179 ======

See notes to financial statements.

- 4 - TAUBMAN CENTERS, INC.

STATEMENT OF CASH FLOWS (in thousands)

Nine Months Ended September 30 ------1998 1997 ------

Cash Flows From Operating Activities: Income before extraordinary items $ 23,886 $ 18,553 Adjustments to reconcile income before extraordinary items to net cash provided by operating activities: Increase in accounts payable and other liabilities 136 26 Increase in other assets (49) (37) ------Net Cash From Operating Activities $ 23,973 $ 18,542 ------

Cash Flows Provided by Investing Activities: Purchase of additional interest in TRG $(26,660) Distributions from TRG in excess of income before extraordinary items 25,360 $ 16,147 ------Net Cash Provided By (Used In) Investing Activities $ (1,300) $ 16,147 ------

Cash Flows From Financing Activities: Cash dividends to common shareowners $(36,303) $(35,001) Cash dividends to preferred shareowners (12,450) Proceeds from stock issuance 26,660 ------Net Cash Used in Financing Activities $(22,093) $(35,001) ------

Net Increase (Decrease) In Cash $ 580 $ (312)

Cash and Cash Equivalents at Beginning of Period 8,965 9,388

Effect of consolidating TRG in connection with the GMPT Exchange (see below) 24,259 ------

Cash and Cash Equivalents at End of Period $ 33,804 $ 9,076 ======

On September 30, 1998, the Company obtained a majority and controlling interest in TRG as a result of the GMPT Exchange (Note 1). Upon obtaining this controlling interest, the Company consolidated the financial position of TRG, its investment in which the Company had previously presented under the equity method. In replacing the Company's investment in TRG with its underlying assets and liabilities, the Company's consolidated cash position increased by TRG's September 30, 1998 cash balance of $24.3 million. This amount is presented above in the reconciliation between beginning and ending cash balances.

See notes to financial statements.

- 5 - TAUBMAN CENTERS, INC.

NOTES TO FINANCIAL STATEMENTS Nine months ended September 30, 1998

Note 1 -Organization and Basis of Presentation

Taubman Centers, Inc. (the Company) is the managing general partner of The Taubman Realty Group Limited Partnership (TRG), which engages in the ownership, management, leasing, acquisition, development, and expansion of regional retail shopping centers and interests therein. On September 30, 1998, the Company obtained a majority and controlling interest in TRG as a result of a transaction in which TRG exchanged interests in 10 shopping centers, together with $990 million of its debt, for all of the partnership units owned by General Motors Pension Trusts (GMPT), representing approximately 37% of TRG's equity (the GMPT Exchange) (Note 2). As a result of the GMPT Exchange, the Company's general partnership interest in TRG increased to 62.8%.

The consolidated balance sheet of the Company as of September 30, 1998 includes all accounts of TRG and its consolidated subsidiaries; all intercompany balances have been eliminated. Investments in entities not unilaterally controlled by ownership or contractual obligation (Unconsolidated Joint Ventures) are accounted for under the equity method. As the net equity of TRG as of September 30, 1998 is less than zero, the ownership interest of the noncontrolling TRG partners (the Minority Interest) is presented as a zero balance. As the Company's obtaining of a controlling ownership interest did not occur until September 30, 1998, the balance sheet as of December 31, 1997 and the statements of operations and cash flows of the Company reflect the financial position and results of operations of TRG under the equity method.

The unaudited interim financial statements should be read in conjunction with the audited financial statements and related notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 1997. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the financial statements for the interim periods have been made. The results of interim periods are not necessarily indicative of the results for a full year.

Note 2 - Investment in TRG

The Company's ownership in TRG at September 30, 1998 and December 31, 1997 consisted of a 62.8% and 36.70% managing general partnership interest, as well as a preferred equity interest. Net income and distributions are allocable first to the preferred equity interest, and the remaining amounts to the general and limited TRG partners generally in accordance with their percentage ownership. The Company's average ownership percentage in TRG for the three months ended September 30, 1998 and 1997 was 39.54% and 36.69%, respectively. The Company's average ownership percentage in TRG for the nine months ended September 30, 1998 and 1997 was 38.96% and 36.69%, respectively.

At September 30, 1998, the excess of the Company's cost of its investment in TRG over the Company's share of TRG's accumulated partners' deficit was $390.4 million, of which $176.6 million and $213.8 million has been allocated to the Company's bases in TRG's properties and investment in Unconsolidated Joint Ventures, respectively. The excess of the Company's cost of its investment in TRG partnership units over its proportionate share of TRG's accumulated partners' deficit at December 31, 1997 was $468.4 million.

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

On September 30, 1998, TRG exchanged interests in 10 shopping centers (nine wholly owned and one Unconsolidated Joint Venture), together with $990 million of debt, for all of GMPT's partnership units (approximately 50 million units with a fair value of $675 million, based on the average stock price of the Company's shares of $13.50 for the two week period prior to the closing). TRG will continue to manage the centers exchanged under a management agreement with GMPT that expires December 31, 1999. The management agreement is cancelable with 90 days notice. The amount of debt allocated to GMPT is subject to a working capital adjustment, which is expected to be settled in the fourth quarter. A gain of $1.1 billion on the exchange was recognized by TRG, representing the difference between the fair value of the GMPT units and the sum of the net book values of the 10 shopping centers, the debt assumed by GMPT, the estimated working capital adjustment, and transaction costs. The Company did not recognize a share of this gain because the transaction was an exchange between the owners of TRG.

In anticipation of the GMPT Exchange, TRG used the $1.2 billion proceeds from two bridge loans bearing interest at one-month LIBOR plus 1.30% to extinguish approximately $1.1 billion of debt, including substantially all of TRG's public unsecured debt, its outstanding commercial paper, and borrowings on its existing lines of credit. The remaining proceeds were used primarily to pay prepayment premiums and transaction costs. An extraordinary charge of approximately $49.8 million, consisting primarily of prepayment premiums, was incurred in connection with the extinguishment of the debt.

During the nine months ended September 30, 1998, the Company's ownership of TRG also increased due to the following transactions. In January 1998, TRG redeemed 6.1 million units of partnership interest from a partner. In April 1998, the Company sold approximately 2.0 million shares of its common stock at $13.1875 per share, before deducting the underwriting commission and expenses of the offering, under the Company's shelf registration statement. The Company used the proceeds to acquire an additional equity interest in TRG. TRG paid all costs of the offering. Net proceeds of approximately $25 million were used by TRG for general partnership purposes. Also, the Company exchanged 0.1 million shares of common stock for an equal number of TRG partnership units issued in connection with the exercise of incentive options, pursuant to the Company's Continuing Offer (Note 3).

The Company's income from its investment in TRG included $4.2 million and $12.5 million for the three and nine months ended September 30, 1998, respectively, from its Series A Preferred Equity interest in TRG. The Company's share of TRG's income before extraordinary item available to partnership unitholders for the three months ended September 30, 1998 and 1997 was $3.9 million and $8.5 million, respectively, reduced by $2.3 million and $2.0 million, respectively, representing adjustments arising from the Company's additional basis in TRG's net assets. The Company's share of TRG's income before extraordinary items available to partnership unitholders for the nine months ended September 30, 1998 and 1997 was $18.6 million and $25.2 million, respectively, reduced by $6.7 million and $6.1 million, respectively, representing adjustments arising form the Company's additional basis in TRG's net assets. For the 1998 periods, the Company's share of TRG's income before extraordinary items includes $4.2 million related to the loss on TRG's restructuring which occurred concurrently with the GMPT Exchange.

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

During the first quarter of 1998, TRG recognized an extraordinary charge of $1.0 million relating to the extinguishment of debt by one of its joint ventures. The Company's share of TRG's extraordinary item was $0.4 million. During the third quarter of 1998, TRG recognized an extraordinary charge of $49.8 million relating to debt extinguished in anticipation of the GMPT Exchange, of which the Company's share was $19.7 million.

TRG's summarized balance sheet and results of operations information (in thousands) are presented below, followed by information about TRG's beneficial interest in the operations of its Unconsolidated Joint Ventures. Beneficial interest is calculated based on TRG's ownership interest in each of the Unconsolidated Joint Ventures. The Company's balances of Properties and Investment in Unconsolidated Joint Ventures differ from the corresponding amounts presented in TRG's summarized balance sheet due to the Company's additional basis in these assets.

September 30 December 31 ------1998 1997 ------Assets: Properties $1,173,232 $1,593,350 Accumulated depreciation and amortization 145,256 268,658 ------$1,027,976 $1,324,692 Other assets 68,189 72,134 ------$1,096,165 $1,396,826 ======

Liabilities: Unsecured notes payable $ 441,496 $1,008,459 Mortgage notes payable 241,969 275,868 Accounts payable and other liabilities 154,731 106,404 Distributions in excess of net income of Unconsolidated Joint Ventures 117,736 141,815 ------$ 955,932 $1,532,546

Partnership Equity: Series A Preferred Equity 192,840 192,840 Partners' Accumulated Deficit (52,607) (328,560) ------$1,096,165 $1,396,826 ======

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

Three Months Nine Months Ended September 30 Ended September 30 ------1998 1997 1998 1997 ------Revenues excluding GMPT Exchange gain $ 90,932 $ 78,037 $ 270,166 $223,961 Gain on GMPT Exchange 1,090,159 1,090,159 ------$1,181,091 $ 78,037 $1,360,325 $223,961 ------Operating costs other than interest and depreciation and amortization $ 53,942 $ 36,763 $ 138,759 $108,651 Interest expense 22,076 19,388 66,662 54,002 Depreciation and amortization 14,788 11,050 42,868 31,386 ------$ 90,806 $ 67,201 $ 248,289 $194,039 ------Equity in income before extraordinary item of Unconsolidated Joint Ventures 13,818 12,205 38,349 38,873 ------Income before extraordinary items $1,104,103 $ 23,041 $1,150,385 $ 68,795 Extraordinary items (49,817) (50,774) ------Net income $1,054,286 $ 23,041 $1,099,611 $ 68,795 Preferred distributions (4,150) (12,450) ------Net income available to unitholders $1,050,136 $ 23,041 $1,087,161 $ 68,795 ======

Three Months Nine Months Ended September 30 Ended September 30 ------1998 1997 1998 1997 ------TRG's beneficial interest in Unconsolidated Joint Ventures' operations: Revenues less recoverable and other operating expenses $ 28,036 $ 23,187 $ 79,902 $ 68,503 Interest expense (9,820) (7,491) (28,731) (20,720) Depreciation and amortization (4,398) (3,491) (12,822) (8,910) ------Income before extraordinary item $ 13,818 $ 12,205 $ 38,349 $ 38,873 ======

Note 3 - Commitments and Contingencies

At the time of the Company's initial public offering (IPO) and acquisition of its partnership interest in TRG, the Company entered into an agreement with A. Alfred Taubman, who owns an interest in TRG, whereby he has the annual right to tender to the Company units of partnership interest in TRG (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). 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 Robert C. Larson and his family may participate in tenders.

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

Based on a market value at September 30, 1998 of $14.00 per common share, the aggregate value of interests in TRG which may be tendered under the Cash Tender Agreement was approximately $333 million. The purchase of these interests at September 30, 1998 would have resulted in the Company owning an additional 28% interest in TRG.

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 TRG as the Company may, in its sole discretion, agree to include in the continuing offer, and all existing and future optionees under TRG's incentive option plan (described below) to exchange shares of common stock for partnership interests in TRG (the Continuing Offer). Under the Continuing Offer agreement, one unit of TRG partnership interest is exchangeable for one share of the Company's common stock.

Shares of common stock that were acquired by GMPT and the AT&T Master Pension Trust in connection with the IPO may be sold through a registered offering. Pursuant to a registration rights agreement with the Company, the owners of each 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.

Currently, options for 8.1 million units of partnership interest may be issued under TRG's incentive option plan for employees of The Taubman Company Limited Partnership (the Manager), of which options for 6.9 million units are outstanding. The Manager, which is approximately 99% beneficially owned by TRG, provides various administrative, management, accounting, shareowner relations, and other services to the Company and TRG. The exercise price of all options outstanding was equal to market value on the date of the grant. Incentive options generally vest 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. During the nine months ended September 30, 1998, options for 0.1 million units were exercised at a weighted average price of $11.04 per unit. There were no grants during the nine months ended September 30, 1998. As of September 30, 1998, there were options outstanding for 6.9 million units with a weighted average exercise price of $11.22 per unit, of which options for 6.1 million units were vested with a weighted average exercise price of $11.29 per unit.

Note 4 - Series B Preferred Stock

In connection with the GMPT Exchange, the Company became obligated to issue to the partners in TRG other than the Company (Minority Partners), upon subscription, one share of Series B Non-Participating Convertible Preferred Stock (Series B Preferred Stock) for each TRG unit held by the Minority Partners. The Company expects to have completed the initial issuance of Series B Preferred Stock to the Minority Partners before the end of 1998. 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.

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

Note 5 - 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 TRG (and therefore earnings) is adjusted assuming the exercise of all options for units of partnership interest under TRG's incentive option plan having exercise prices less than the average market value of the units using the treasury stock method. For the three months ended September 30, 1998 and 1997, options for 0.2 million and 0.4 million units of partnership interest with average exercise prices of $13.89 and $13.58, respectively, were excluded from the computation of diluted earnings per share because the exercise prices were greater than the average market price for the period calculated. For the nine months ended September 30, 1998 and 1997, options for 0.3 million and 0.4 million units of partnership interest with average exercise prices of $13.79 and 13.68, respectively, were excluded from the computation of diluted earnings per share because the exercise prices were greater than the average market price for the period calculated.

Three Months Nine Months Ended September 30 Ended September 30 ------1998 1997 1998 1997 ------(in thousands, except share data)

Income before extraordinary items allocable to common shareowners (Numerator): Basic income before extraordinary items $ 1,423 $ 6,214 $ 11,436 $ 18,553 Effect of dilutive options (35) (58) (157) (194) ------Diluted income before extraordinary items $ 1,388 $ 6,156 $ 11,279 $ 18,359 ======

Shares (Denominator) - basic and diluted 52,899,013 50,745,241 51,949,256 50,730,179

Income before extraordinary items per common share: Basic $ .03 $ .12 $ .22 $ .37 ======Diluted $ .03 $ .12 $ .22 $ .36 ======

- 11 - THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP

CONSOLIDATED BALANCE SHEET (in thousands)

September 30 December 31 ------1998 1997 ------

Assets: Properties $1,173,232 $1,593,350 Accumulated depreciation and amortization 145,256 268,658 ------$1,027,976 $1,324,692

Cash and cash equivalents 24,259 3,250 Accounts and notes receivable, less allowance for doubtful accounts of $386 and $414 in 1998 and 1997 14,249 17,803 Accounts receivable from related parties 8,428 7,400 Deferred charges and other assets 21,253 43,681 ------$1,096,165 $1,396,826 ======

Commitments and Contingencies (Note 6)

Partnership Equity: Series A Preferred Equity 192,840 192,840 Partners' Accumulated Deficit (52,607) (328,560) ------140,233 (135,720) ------$1,096,165 $1,396,826 ======

Allocation of Partners' Accumulated Deficit: General Partners $ (36,965) $ (254,474) Limited Partners (15,642) (74,086) ------$ (52,607) $ (328,560) ======

See notes to financial statements.

- 12 - THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP

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

Three Months Ended September 30 ------1998 1997 ------Revenues: Minimum rents $ 52,021 $ 45,140 Percentage rents 2,008 1,867 Expense recoveries 28,339 24,476 Other 6,676 4,379 Revenues from management, leasing and development services 1,888 2,175 Gain on GMPT Exchange (Note 2) 1,090,159 ------$1,181,091 $ 78,037 ------Operating Costs: Recoverable expenses $ 25,994 $ 20,932 Other operating 11,027 7,980 Management, leasing and development services 1,111 1,264 General and administrative 5,112 6,587 Restructuring (Note 2) 10,698 Interest expense 22,076 19,388 Depreciation and amortization 14,788 11,050 ------$ 90,806 $ 67,201 ------Income before equity in net income of Unconsolidated Joint Ventures and extraordinary item $1,090,285 $ 10,836 Equity in net income of Unconsolidated Joint Ventures (Note 4) 13,818 12,205 ------Income before extraordinary item $1,104,103 $ 23,041 Extraordinary item (Note 2) (49,817) ------Net income $1,054,286 $ 23,041 Preferred distributions to TCO (4,150) ------Net income available to unitholders $1,050,136 $ 23,041 ======

Allocation of net income to unitholders: General Partners $ 985,981 $ 17,845 Limited Partners 64,155 5,196 ------$1,050,136 $ 23,041 ======Basic earnings per Unit of Partnership Interest (Note 7): Income before extraordinary item $ 8.22 $ .17 ======Net income $ 7.85 $ .17 ======

Diluted earnings per Unit of Partnership Interest (Note 7): Income before extraordinary item $ 8.15 $ .17 ======Net income $ 7.78 $ .17 ======

Weighted Average Number of Units of Partnership Interest Outstanding 133,775,064 138,277,110 ======

See notes to financial statements.

- 13 - THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP

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

Nine Months Ended September 30 ------1998 1997 ------Revenues: Minimum rents $ 155,860 $ 130,406 Percentage rents 5,219 5,030 Expense recoveries 84,787 70,661 Other 18,510 11,384 Revenues from management, leasing and development services 5,790 6,480 Gain on GMPT Exchange (Note 2) 1,090,159 ------$1,360,325 $ 223,961 ------Operating Costs: Recoverable expenses $ 74,416 $ 60,223 Other operating 31,392 26,218 Management, leasing and development services 3,536 3,553 General and administrative 18,717 18,657 Restructuring (Note 2) 10,698 Interest expense 66,662 54,002 Depreciation and amortization 42,868 31,386 ------$ 248,289 $ 194,039 ------Income before equity in income before extraordinary item of Unconsolidated Joint Ventures and extraordinary items $1,112,036 $ 29,922 Equity in income before extraordinary item of Unconsolidated Joint Ventures (Note 4) 38,349 38,873 ------Income before extraordinary items $1,150,385 $ 68,795 Extraordinary items (Note 2) (50,774) ------Net Income $1,099,611 $ 68,795 Preferred distributions to TCO (12,450) ------Net income available to unitholders $1,087,161 $ 68,795 ======

Allocation of net income available to unitholders: General Partners $1,016,042 $ 53,278 Limited Partners 71,119 15,517 ------$1,087,161 $ 68,795 ======

Basic earnings per Unit of Partnership Interest (Note 7): Income before extraordinary items $ 8.53 $ .50 ======Net income $ 8.15 $ .50 ======

Diluted earnings per Unit of Partnership Interest (Note 7): Income before extraordinary items $ 8.46 $ .49 ======Net income $ 8.08 $ .49 ======

Weighted Average Number of Units of Partnership Interest Outstanding 133,354,554 138,261,847 ======

See notes to financial statements.

- 14 - THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP

CONSOLIDATED STATEMENT OF CASH FLOWS (in thousands)

Nine Months Ended September 30 ------1998 1997 ------Cash Flows From Operating Activities: Income before extraordinary items $ 1,150,385 $ 68,795 Adjustments to reconcile income before extraordinary items to net cash provided by operating activities: Depreciation and amortization 42,868 31,386 Provision for losses on accounts receivable 1,077 828 Amortization of deferred financing costs 2,129 1,740 Other 621 468 Gains on sales of land (2,905) (880) Gain on GMPT Exchange (1,090,159) Increase (decrease) in cash attributable to changes in assets and liabilities: Receivables, deferred charges and other assets (8,602) (6,129) Accounts payable and other liabilities 43,447 30,375 ------Net Cash Provided By Operating Activities $ 138,861 $ 126,583 ------

Cash Flows From Investing Activities: Purchase of interests in Centers $(124,783) Additions to properties $ (228,015) (105,947) Proceeds from sales of land 4,302 1,795 Contributions to Unconsolidated Joint Ventures (29,140) (12,573) Distributions from Unconsolidated Joint Ventures in excess of income before extraordinary item 52,076 14,777 ------Net Cash Used In Investing Activities $ (200,777) $(226,731) ======

Cash Flows From Financing Activities: Debt proceeds $ 1,558,716 $ 243,991 Debt payments (130,913) (54,544) Early extinguishment of debt (1,167,746) Debt issuance costs (2,790) (382) Redemption of partnership units (77,698) GMPT Exchange costs (15,177) Equity offering 25,160 Issuance of units of partnership interest 1,498 414 Cash distributions to partnership unitholders (95,675) (96,065) Cash distributions to TCO for Series A Preferred Equity interest (12,450) ------Net Cash Provided By Financing Activities $ 82,925 $ 93,414 ------

Net Increase (Decrease) In Cash $ 21,009 $ (6,734)

Cash and Cash Equivalents at Beginning of Period 3,250 7,912 ------

Cash and Cash Equivalents at End of Period $ 24,259 $ 1,178 ======

Interest on mortgage notes and other loans paid during the nine months ended September 30, 1998 and 1997, net of amounts capitalized of $12,830 and $6,798, was $69,077 and $39,149, respectively.

See notes to financial statements.

- 15 - THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Nine months ended September 30, 1998

Note 1 - Interim Financial Statements

The Taubman Realty Group Limited Partnership (TRG) engages in the ownership, management, leasing, acquisition, development, and expansion of regional retail shopping centers (Taubman Shopping Centers) and interests therein. Taubman Centers, Inc. (TCO) is the managing general partner of TRG. Other general partners include TG Partners Limited Partnership, Taub-Co Management, Inc., and, prior to September 30, 1998, General Motors Pension Trusts (GMPT).

The unaudited interim financial statements should be read in conjunction with the audited financial statements and related notes included in TRG's Annual Report on Form 10-K for the year ended December 31, 1997. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the financial statements for the interim periods have been made. The results for interim periods are not necessarily indicative of the results for a full year.

Certain prior year amounts have been reclassified to conform to 1998 classifications.

Note 2 - The GMPT Exchange and Related Transactions

On September 30, 1998, TRG exchanged interests in 10 shopping centers (nine wholly owned (Briarwood, Columbus City Center, The Falls, Hilltop, Lakeforest, Marley Station, Meadowood Mall, Stoneridge, and The Mall at Tuttle Crossing) and one Unconsolidated Joint Venture (Woodfield)), together with $990 million of debt, for all of the partnership units of GMPT (approximately 50 million units with a fair value of $675 million, based on the average stock price of TCO shares of $13.50 for the two week period prior to the closing) (the GMPT Exchange). TRG will continue to manage the centers exchanged under a management agreement with GMPT that expires December 31, 1999. The management agreement is cancelable with 90 days notice. The amount of debt allocated to GMPT is subject to a working capital adjustment, which is expected to be settled in the fourth quarter. A gain of $1.1 billion on the exchange was recognized, representing the difference between the fair value of the GMPT units and the sum of the net book values of the 10 shopping centers, the debt assumed by GMPT, the estimated working capital adjustment, and transaction costs.

During the three and nine months ended September 30, 1998, the exchanged centers contributed $25.8 million and $75.1 million to TRG's net income, respectively. During the three and nine months ended September 30, 1997, the exchanged centers contributed $20.6 million and $57.8 million to TRG's net income, respectively.

- 16 - THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

The balance on the first bridge loan of $902 million was assumed by GMPT in connection with the GMPT Exchange. The second loan had a balance of $310 million as of September 30, 1998. This loan has a maximum capacity of $430 million and expires in June 1999. TRG expects to refinance the balance on the bridge loan during the first half of 1999. Additionally, TRG has obtained a $200 million line of credit, replacing TRG's previous revolving credit and commercial paper facilities. The line of credit expires in September 2001. TRG entered into treasury lock agreements with a notional amount of $200 million at approximately 5%, plus credit spread. In October 1998, TRG effectively closed out its position in the treasury locks at a cost of approximately $4 million, which will be deferred and amortized over the term of the anticipated new debt.

Concurrent with the GMPT Exchange, TRG committed to a restructuring of its operations. TRG recognized a restructuring charge of $10.7 million, primarily representing the cost of certain involuntary terminations of personnel.

Note 3 - Other Equity Transactions

In January 1998, TRG redeemed a partner's 6.1 million units of partnership interest for approximately $77.7 million (including costs). The redemption was funded through the use of an existing revolving credit facility.

In April 1998, TCO sold approximately 2.0 million shares of its common stock at $13.1875 per share, before deducting the underwriting commission and expenses of the offering, under TCO's shelf registration statement. TCO used the proceeds to acquire an additional equity interest in TRG. TRG paid all costs of the offering. Net proceeds of approximately $25 million were used by TRG for general partnership purposes.

Note 4 - Investments in Unconsolidated Joint Ventures

Following are TRG's investments in various real estate Unconsolidated Joint Ventures which own regional retail shopping centers. TRG is generally the managing general partner of these Unconsolidated Joint Ventures. TRG's interest in each Unconsolidated Joint Venture is as follows:

TRG's % Ownership as of Unconsolidated Joint Venture Taubman Shopping Center September 30, 1998 ------

Arizona Mills, L.L.C. Arizona Mills 37% Fairfax Company of Virginia L.L.C. Fair Oaks 50 Lakeside Mall Limited Partnership Lakeside 50 Rich-Taubman Associates Stamford Town Center 50 Taubman-Cherry Creek Limited Partnership Cherry Creek 50 Twelve Oaks Mall Limited Partnership Twelve Oaks Mall 50 West Farms Associates Westfarms 79 Woodland Woodland 50

- 17 - THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

In March 1998, Fairfax Company of Virginia L.L.C. completed a $140 million, 6.60%, secured financing maturing in 2008. The net proceeds were used to extinguish an existing mortgage on Fair Oaks of approximately $39 million and pay a prepayment penalty of approximately $1.8 million. In addition, proceeds of $5.6 million were used to close out a treasury lock agreement entered into in 1997, which resulted in an effective rate on the financing of approximately 7%. The remaining proceeds were distributed to the owners. TRG used its 50% share of the distributions to pay down its revolving credit facilities. TRG recognized an extraordinary charge of approximately $1.0 million on the extinguishment of the Fair Oaks mortgage.

TRG reduces its investment in Unconsolidated Joint Ventures to eliminate intercompany profits on sales of services that are capitalized by the Unconsolidated Joint Ventures. As a result, the carrying value of TRG's investment in Unconsolidated Joint Ventures is less than TRG's share of the deficiency in assets reported in the combined balance sheet of the Unconsolidated Joint Ventures by approximately $5.7 million and $8.1 million at September 30, 1998 and December 31, 1997, respectively. These differences are amortized over the useful lives of the related assets.

Combined balance sheet and results of operations information are presented below (in thousands) for all Unconsolidated Joint Ventures, followed by TRG's beneficial interest in the combined information. Beneficial interest is calculated based on TRG's ownership interest in each of the Unconsolidated Joint Ventures.

September 30 December 31 ------1998 1997 ------

Assets: Properties, net $ 564,064 $ 623,981 Other assets 62,209 84,397 ------$ 626,273 $ 708,378 ======

Liabilities and partners' accumulated deficiency in assets: Debt $ 825,311 $ 875,356 Capital lease obligations 5,574 6,509 Other liabilities 43,156 94,801 TRG accumulated deficiency in assets (112,018) (133,680) Unconsolidated Joint Venture Partners' accumulated deficiency in assets (135,750) (134,608) ------$ 626,273 $ 708,378 ======

TRG accumulated deficiency in assets (above) $(112,018) $(133,680) Elimination of intercompany profit (5,718) (8,135) ------Distributions in excess of net income of Unconsolidated Joint Ventures $(117,736) $(141,815) ======

- 18 - THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Three Months Nine Months Ended September 30 Ended September 30 ------1998 1997 1998 1997 ------

Revenues $ 76,193 $ 62,541 $220,651 $187,574 ------Recoverable and other operating expenses $ 26,831 $ 22,827 $ 78,078 $ 68,417 Interest expense 18,431 13,588 53,788 38,459 Depreciation and amortization 8,508 6,112 25,168 16,728 ------Total operating costs $ 53,770 $ 42,527 $157,034 $123,604 ------Income before extraordinary item $ 22,423 $ 20,014 $ 63,617 $ 63,970 Extraordinary item (1,913) ------Net Income $ 22,423 $ 20,014 $ 61,704 $ 63,970 ======

Net income attributable to TRG $ 11,917 $ 11,234 $ 32,398 $ 35,035 Extraordinary item attributable to TRG 957 Realized intercompany profit 1,901 971 4,994 3,838 ------Equity in income before extraordinary item of Unconsolidated Joint Ventures $ 13,818 $ 12,205 $ 38,349 $ 38,873 ======

Note 5 - Beneficial Interest in Debt and Interest Expense

TRG's beneficial interest in the debt (excluding capital lease obligations), capitalized interest, and interest expense (net of capitalized interest) of TRG, its consolidated subsidiaries and its Unconsolidated Joint Ventures is summarized in the following table. TRG's beneficial interest for 1998 and 1997 excludes the 30% minority interest in the debt outstanding on the MacArthur Center construction facility.

- 19 - THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Unconsolidated TRG's Share of TRG's TRG's Joint Unconsolidated Consolidated Beneficial Ventures Joint Ventures Subsidiaries Interest ------

Debt as of: September 30, 1998 $ 825,311 $ 439,086 $ 683,465 $1,094,655 December 31, 1997 875,356 465,556 1,284,327 1,737,211

Capitalized interest: Nine months ended September 30, 1998 $ 1,748 $ 869 $ 12,830 $ 12,575 Nine months ended September 30, 1997 6,683 3,851 6,798 10,649

Interest expense (Net of capitalized interest): Nine months ended September 30, 1998 $ 53,788 $ 28,731 $ 66,662 $ 95,393 Nine months ended September 30, 1997 38,459 20,720 54,002 74,722

Note 6 - Incentive Option Plan

TRG has an incentive option plan for employees of the Manager. Currently, options for 8.1 million units of partnership interest may be issued under the plan, of which options for 6.9 million units are outstanding. The exercise price of all options outstanding was equal to market value on the date of grant. Incentive options generally vest 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. During the nine months ended September 30, 1998, options for 0.1 million units were exercised at a weighted average price of $11.04 per unit. There were no grants during the nine months ended September 30, 1998. As of September 30, 1998, there were options outstanding for 6.9 million units with a weighted average exercise price of $11.22 per unit, of which options for 6.1 million units were vested with a weighted average exercise price of $11.29 per unit.

Note 7 - Earnings Per Unit of Partnership Interest

Basic earnings per unit of partnership interest are based on the average number of units of partnership interest outstanding during each period. Diluted earnings per unit of partnership interest are based on the average number of units of partnership interest outstanding during each period, assuming exercise of all options for units of partnership interest having exercise prices less than the average market value of the units using the treasury stock method. For the three months ended September 30, 1998 and 1997, options for 0.2 million and 0.4 million units of partnership interest with average exercise prices of $13.89 and $13.58 per unit, respectively, were excluded from the computation of diluted earnings per unit because the exercise prices were greater than the average market price for the period calculated. For the nine months ended September 30, 1998 and 1997, options for 0.3 million and 0.4 million units of partnership interest with average exercise prices of $13.79 and $13.68, respectively, were excluded from the computation of diluted earnings per unit because the exercise prices were greater than the average market price for the period calculated.

- 20 - THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Three Months Nine Months Ended September 30 Ended September 30 ------1998 1997 1998 1997 ------(in thousands, except unit data)

Income before extraordinary items allocable to unitholders (Numerator) $ 1,099,953 $ 23,041 $ 1,137,935 $ 68,795 ======

Partnership units (Denominator): Basic 133,775,064 138,277,110 133,354,554 138,261,847 Effect of dilutive options 1,221,332 980,773 1,136,390 1,068,494 ------Diluted 134,996,396 139,257,883 134,490,944 139,330,341 ======

Per unit: Basic $ 8.22 $ .17 $ 8.53 $ .50 ======Diluted $ 8.15 $ .17 $ 8.46 $ .49 ======

- 21 - Item 2.

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

The following discussion should be read in conjunction with the accompanying Financial Statements of Taubman Centers, Inc. and the Notes thereto and the Consolidated Financial Statements of The Taubman Realty Group Limited Partnership and the Notes thereto.

General Background and Performance Measurement

The Company, through its interest in and as managing general partner of TRG, participates in TRG's Owned Businesses. TRG's Owned Businesses consist of: (i) Taubman Shopping Centers that TRG controls by ownership or contractual agreement, development projects for future regional shopping centers (Development Projects) and The Taubman Company Limited Partnership (the Manager), (collectively, the Consolidated Businesses); and (ii) Taubman Shopping Centers partially owned through joint ventures with third parties that are not controlled (Unconsolidated Joint Ventures). The Unconsolidated Joint Ventures are accounted for under the equity method in TRG's Consolidated Financial Statements.

Certain aspects of the performance of the Owned Businesses are best understood by measuring their performance as a whole, without regard to TRG's ownership interest. For example, mall tenant sales and shopping center occupancy trends fit this category and are so analyzed below. In addition, trends in certain items of revenue and expense are often best understood in the same fashion, and 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.

On September 30, 1998, TRG exchanged interests in 10 shopping centers (nine Consolidated Businesses (Briarwood, Columbus City Center, The Falls, Hilltop, Lakeforest, Marley Station, Meadowood Mall, Stoneridge, and The Mall at Tuttle Crossing) and one Unconsolidated Joint Venture (Woodfield)) and a share of TRG's debt for all of the partnership units owned by General Motors Pension Trusts (GMPT) (the GMPT Exchange - see TRG - 1998 Transactions -- GMPT Exchange and Related Transactions). Performance statistics for periods presented below include these ten centers (the GMPT Centers) through the completion of the GMPT Exchange, while information presented as of September 30, 1998, such as ending occupancy, excludes the GMPT Centers. In future periods, the GMPT Exchange will impact the presentation of the Company's results of operations and changes in its financial condition, as the Company obtained a controlling interest in TRG as a result of the transaction and will consolidate TRG's results. However, as the exchange did not occur until September 30, 1998, the Company's results of operations and changes in its financial condition for periods presented continue to be best understood through separate analysis of the Company and TRG, and are so discussed below.

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. Accordingly, revenues and occupancy levels are generally highest in the fourth quarter.

- 22 - The following table summarizes certain quarterly operating data for TRG's Owned Businesses for 1997 and the first three quarters of 1998:

1st 2nd 3rd 4th 1st 2nd 3rd Quarter Quarter Quarter Quarter Total Quarter Quarter Quarter 1997 1997 1997 1997 1997 1998 1998 1998 ------(in thousands)

Mall tenant sales $600,709 $629,906 $692,487 $1,163,157 $3,086,259 $740,104 $796,862 $809,802 (1) Revenues 130,677 134,756 137,728 157,192 560,353 156,415 161,598 164,044 Occupancy: Average Occupancy 86.5% 86.8% 87.0% 89.5% 87.6% 88.5% 88.3% 89.2% (2) Ending Occupancy 86.4% 87.1% 87.2% 90.3% 90.3% 88.2% 88.4% 89.8% (3) Leased Space 88.7% 89.5% 90.8% 92.3% 92.3% 91.3% 91.6% 92.4% (3)

(1) Mall tenant sales excluding the GMPT Centers were $507.1 million and $1.5 billion for the three and nine months ended September 30, 1998, respectively. (2) Average occupancy excluding the GMPT Centers was 89.5% and 89.1% for the three and nine months ended September 30, 1998, respectively. (3) Excludes GMPT Centers as of September 30, 1998.

Because the seasonality of sales contrasts with the generally fixed nature of minimum rents and recoveries, mall tenant occupancy costs (the sum of minimum rents, percentage rents and expense recoveries) relative to sales are considerably higher in the first three quarters than they are in the fourth quarter. The following table summarizes occupancy costs, excluding utilities, for mall tenants as a percentage of sales for 1997 and the first three quarters of 1998:

1st 2nd 3rd 4th 1st 2nd 3rd Quarter Quarter Quarter Quarter Total Quarter Quarter Quarter 1997 1997 1997 1997 1997 1998 1998 1998 (1) ------Minimum rents 12.6% 11.8% 11.3% 7.3% 10.1% 12.0% 11.2% 11.2% Percentage rents 0.2 0.3 0.3 0.2 0.3 0.2 0.3 0.3 Expense recoveries 5.2 5.1 4.7 3.5 4.4 4.8 4.9 4.7 ------Mall tenant occupancy costs 18.0% 17.2% 16.3% 11.0% 14.8% 17.0% 16.4% 16.2% ======

(1) Mall tenant occupancy costs as a percentage of sales excluding the GMPT Centers were 15.9% for both the three and nine months ended September 30, 1998.

Rental Rates

Average base rent per square foot for all mall tenants at the 18 Centers owned and open for at least five years was $39.44 for the twelve months ended September 30, 1998, compared to $38.62 for the twelve months ended September 30, 1997. Excluding the GMPT Centers, the average base rent per square foot for all mall tenants at the remaining centers owned and open for at least five years (10 of the 15 remaining centers) was $41.98 for the twelve months ended September 30, 1998.

As leases have expired in the Taubman Shopping Centers, TRG 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.

- 23 - The annual spread between average annualized base rent of stores opening and closing, excluding renewals, has ranged between four and eleven dollars per square foot during the past five years. TRG anticipates that the spread between opening and closing rents for the 1998 fiscal year will be at or below the low end of TRG's historical range. This statistic is difficult to predict in part because TRG's leasing policies and practices may result in early lease terminations with actual average closing rents which may vary from the average rent per square foot of scheduled lease expirations. In addition, the opening or closing of large tenant spaces, which generally pay a lower rent per square foot, can significantly change the spread in a given year.

Results of Operations

Comparison of the Three and Nine Months Ended September 30, 1998 to the Three and Nine Months Ended September 30, 1997

Taubman Centers, Inc.

The Company's average ownership of TRG was 39.54% and 38.96% for the three and nine months ended September 30, 1998, respectively, and 36.69% for both the three and nine months ended September 30, 1997. Since the first quarter of 1997, the Company's ownership in TRG has changed as a result of the following transactions.

The GMPT Exchange and Related Transactions

On September 30, 1998, the Company obtained a majority and controlling interest in TRG as a result of the GMPT Exchange (TRG - 1998 Transactions -- GMPT Exchange and Related Transactions), which increased the Company's ownership of TRG to 62.8%. Concurrent with the GMPT Exchange, TRG committed to a restructuring of its operations, consisting primarily of involuntary termination of personnel. Also, in anticipation of the GMPT Exchange, TRG used the proceeds from bridge loans to extinguish substantially all of TRG's public unsecured debt, its outstanding commercial paper, and borrowings on its existing lines of credit.

Upon obtaining the controlling interest in TRG, the Company consolidated the financial position of TRG. In future periods, the Company's results will include the results of TRG on a consolidated basis and will reflect the effects of TRG's revised portfolio, its restructured operations, and its new debt structure.

Other Transactions

In October 1997, the Company used the proceeds from its $200 million public offering of eight million shares of 8.3% Series A Cumulative Redeemable Preferred Stock to acquire a Series A Preferred Equity interest in TRG 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. In January 1998, TRG redeemed 6.1 million units of partnership interest from a partner, increasing the Company's ownership of TRG. In April 1998, the Company sold approximately 2.0 million shares of its common stock at $13.1875 per share, before deducting the underwriting commission and expenses of the offering. The Company used the proceeds to acquire an additional equity interest in TRG. TRG paid all costs of the offering. Also, during 1997 and 1998 the Company exchanged common stock for TRG units of partnership interest newly issued in connection with the exercise of incentive options.

- 24 - Comparison of Operating Results

The Company's income from TRG for the three months ended September 30, 1998 consisted of $4.2 million from its preferred equity interest in TRG and the Company's $3.9 million share of TRG's net income before extraordinary item, which includes the Company's $4.2 million share of TRG's restructuring loss. For the three months ended September 30, 1997, the Company's income from TRG consisted of its $8.5 million share of TRG's net income. The Company's share of 1998 and 1997 income was reduced by $2.3 million and $2.0 million, respectively, representing adjustments arising from the Company's additional basis in TRG's net assets. During the third quarter of 1998, the Company recognized an extraordinary item of $19.7 million, consisting of its share of TRG's extraordinary charge relating to debt extinguished in anticipation of the GMPT Exchange. Net income (loss) available to common shareowners for the three months ended September 30, 1998 was $(18.3) million, compared to $6.2 million for the third quarter of 1997.

The Company's income from TRG for the nine months ended September 30, 1998 consisted of $12.5 million from its preferred equity interest in TRG and the Company's $18.6 million share of TRG's income before extraordinary items, which includes the Company's $4.2 share of TRG's restructuring loss. For the nine months ended September 30, 1997, the Company's income from TRG consisted of its $25.2 million share of TRG's net income. The Company's share of 1998 and 1997 income was reduced by $6.7 million and $6.1 million, respectively, representing adjustments arising from the Company's additional basis in TRG's net assets. During the first nine months of 1998, Company recognized extraordinary items of $20.1 million, consisting of its share of TRG's extraordinary charges relating primarily to debt extinguished in anticipation of the GMPT Exchange. Net income (loss) available to common shareowners for the nine months ended September 30, 1998 was $(8.6) million, compared to $18.6 million for the same period in 1997.

In the third quarter of 1998, TRG recognized a gain on the GMPT Exchange, representing the difference between the fair value and book value of the interests exchanged. The Company did not recognize a share of the gain because the transaction was an exchange between the owners of TRG.

TRG

1998 Transactions - GMPT Exchange and Related Transactions

On September 30, 1998, TRG exchanged interests in 10 shopping centers (nine wholly owned and one Unconsolidated Joint Venture), together with $990 million of debt, for all of GMPT's partnership units (approximately 50 million units with a fair value of $675 million, based on the average stock price of the Company's shares of $13.50 for the two week period prior to the closing). TRG will continue to manage the centers exchanged under a management agreement with GMPT that expires December 31, 1999. The management agreement is cancelable with 90 days notice. The amount of debt allocated to GMPT is subject to a working capital adjustment, which is expected to be settled in the fourth quarter. A gain of $1.1 billion on the exchange was recognized, representing the difference between the fair value of the GMPT units and the sum of the net book values of the 10 shopping centers, the debt assumed by GMPT, the estimated working capital adjustment, and transaction costs. During the three and nine months ended September 30, 1998, the exchanged centers contributed $32.3 million and $100.8 million to TRG's EBITDA, respectively (EBITDA is defined and described in Liquidity and Capital Resources -- Distributions).

- 25 - In anticipation of the GMPT Exchange, TRG used the $1.2 billion proceeds from two bridge loans bearing interest at one-month LIBOR plus 1.30% to extinguish $1.1 billion of debt, including substantially all of TRG's public unsecured debt, its outstanding commercial paper, and borrowings on its existing line of credit. The remaining proceeds were used primarily to pay prepayment premiums and transaction costs. An extraordinary charge of approximately $49.8 million, consisting primarily of prepayment premiums, was recognized in connection with the extinguishment of the debt. GMPT's share of debt received in the exchange included the $902 million balance on the first bridge loan, $86 million representing 50% of the debt on the Joint Venture owned shopping center, and $1.6 million of assessment bond obligations. After the GMPT Exchange, TRG's debt and its beneficial interest in its joint ventures totaled $1.1 billion (Liquidity and Capital Resources - TRG).

Concurrent with the GMPT Exchange, TRG committed to a restructuring of its operations. A restructuring charge of approximately $10.7 million was incurred, consisting primarily of costs related to involuntary termination of personnel. TRG expects to reduce its annual general and administrative expense by approximately $10 million by 1999. This is a forward looking statement, and certain significant factors could cause the actual reductions in TRG's general and administrative expense to differ materially, including but not limited to: 1) actual payroll reductions achieved; 2) actual results of negotiations; 3) use of outside consultants; and 4) changes in TRG's owned or managed portfolio.

1998 Transactions - Other

In March 1998, a 50% owned Unconsolidated Joint Venture completed a $140 million, 6.60%, secured financing maturing in 2008. The net proceeds were used to extinguish an existing mortgage of approximately $39 million and pay a prepayment penalty of approximately $1.8 million. In addition, proceeds of $5.6 million were used to close out a treasury lock agreement entered into in 1997, which resulted in an effective rate on the financing of approximately 7%. The remaining proceeds were distributed to the owners. TRG used its share of the distribution to pay down its revolving credit facilities.

1997 Transactions

During 1997, TRG completed the following acquisitions: Regency Square in September, The Falls in December, and the leasehold interest in The Mall at Tuttle Crossing (Tuttle Crossing), also in December. In addition, TRG opened the following new centers and expansions: Tuttle Crossing in July, Arizona Mills in November, Westfarms' expansion in August, and Biltmore's expansion throughout the last half of the year.

Occupancy and Mall Tenant Sales

The average occupancy rate in the Taubman Shopping Centers was 89.2% for the three months ended September 30, 1998 compared to 87.0% for the comparable period in 1997. For the nine months ended September 30, 1998 average occupancy was 88.7% compared to 86.8% in the same period in 1997. The increase in average occupancy was primarily due to increases in occupancy at Centers owned and open prior to 1997. The ending occupancy rate for the Taubman Shopping Centers at September 30, 1998 was 89.8% versus 87.2% at the same date in 1997. Leased space at September 30, 1998 was 92.4% compared to 90.8% at the same date in 1997. Statistics as of September 30, 1998 exclude the GMPT Centers.

- 26 - Total sales for Taubman Shopping Center mall tenants in the three months ended September 30, 1998 were $809.8 million, a 16.9% increase from $692.5 million in the same period in 1997. Tenant sales increased 22.0% to $2.3 billion for the nine months ended September 30, 1998 from $1.9 billion in the comparable period in 1997. Mall tenant sales per square foot, excluding Arizona Mills, increased 3.0% and 3.9% for the three and nine months ended September 30, 1998 over the same periods in 1997. Mall tenant sales for Centers owned and open for all of the first nine months of 1998 and 1997 were $698.1 million and $2.0 billion in the third quarter and first nine months of 1998, a 5.7% increase and a 6.7% increase, respectively, from the same periods in 1997.

- 27 - Comparison of the Three Months Ended September 30, 1998 to the Three Months Ended September 30, 1997

The following table sets forth operating results for TRG's Owned Businesses for the three months ended September 30, 1998 and September 30, 1997, showing the results of the Consolidated Businesses and Unconsolidated Joint Ventures:

Three Months Ended September 30, 1998 Three Months Ended September 30, 1997 ------TRG UNCONSOLIDATED TOTAL TRG UNCONSOLIDATED TOTAL CONSOLIDATED JOINT OWNED CONSOLIDATED JOINT OWNED BUSINESSES(1) VENTURES(2) BUSINESSES BUSINESSES(1) VENTURES(2) BUSINESSES ------(in millions of dollars) REVENUES: Minimum rents 50.1 46.3 96.4 43.2 38.2 81.4 Percentage rents 1.7 1.0 2.8 1.8 0.9 2.6 Expense recoveries 27.7 26.0 53.8 23.8 21.8 45.6 Management, leasing and development 1.9 1.9 2.2 2.2 Other 6.6 2.5 9.2 4.3 1.7 6.0 ------Total revenues 88.1 75.9 164.0 75.2 62.5 137.7

OPERATING COSTS: Recoverable expenses 25.0 22.4 47.4 20.1 18.8 38.9 Other operating 9.0 2.7 11.7 6.0 2.4 8.5 Management, leasing and development 1.1 1.1 1.3 1.3 General and administrative 5.1 5.1 6.6 6.6 Interest expense 22.1 18.5 40.6 19.4 13.7 33.1 Depreciation and amortization 14.7 8.4 23.1 11.0 6.0 17.0 ------Total operating costs 77.0 52.0 129.0 64.3 41.0 105.3 Net results of Memorial City (1) (0.3) (0.3) (0.1) (0.1) ------10.8 23.9 34.7 10.8 21.5 32.4 ======Equity in net income of Unconsolidated Joint Ventures 13.8 12.2 ------Income before extraordinary and unusual items 24.6 23.0 Gain on GMPT Exchange 1,090.2 Restructuring loss (10.7) ------Income before extraordinary item 1,104.1 23.0 Extraordinary item (49.8) ------Net income 1,054.3 23.0 Preferred distributions to TCO (4.2) ------Net income available to unitholders 1,050.1 23.0 ======

SUPPLEMENTAL INFORMATION (3): EBITDA contribution 47.7 28.0 75.7 41.3 23.2 64.5 TRG's Beneficial Interest Expense (22.1) (9.8) (31.9) (19.4) (7.5) (26.9) Non-real estate depreciation (0.5) (0.5) (0.5) (0.5) Preferred distributions to TCO (4.2) (4.2) ------Distributable Cash Flow contribution 20.9 18.2 39.1 21.4 15.7 37.1 ======

(1) The results of operations of Memorial City are presented net in this table. TRG expects that Memorial City's net operating income will approximate the ground rent payable under the lease for the immediate future. (2) With the exception of the Supplemental Information, amounts represent 100% of the Unconsolidated Joint Ventures. Amounts are net of intercompany profits. The Unconsolidated Joint Ventures are accounted for under the equity method in TRG's Consolidated Financial Statements. (3) EBITDA, TRG's Beneficial Interest Expense and Distributable Cash Flow are defined and discussed in Liquidity and Capital Resources - Distributions. (4) Amounts in the table may not add due to rounding. (5) Certain 1997 amounts have been reclassified to conform to 1998 classifications.

- 28 - TRG -- Consolidated Businesses

Total revenues for the three months ended September 30, 1998 were $88.1 million, a $12.9 million, or 17.2%, increase over the comparable period in 1997. Minimum rents increased $6.9 million, of which $5.1 million was caused by Tuttle Crossing and the 1997 acquisitions. Minimum rents also increased due to the expansion at Biltmore and tenant rollovers. Expense recoveries increased primarily due to Tuttle Crossing and the acquired Centers. Other revenue increased primarily due to gains on sales of peripheral land.

Total operating costs increased $12.7 million, or 19.8%, to $77.0 million. Recoverable and depreciation and amortization expenses increased primarily due to Tuttle Crossing and the acquisitions. Other operating expense increased due to the acquisitions, management expenses, and professional fees. General and administrative expense decreased primarily due to decreases in compensation, employee relocation, and recruiter costs. Interest expense increased due to an increase in debt used to finance Tuttle Crossing, the acquisition of The Falls and the redemption of a partner's interest in TRG, partially offset by a decrease in debt paid down with the proceeds of the October 1997 and April 1998 equity offerings. In addition, interest expense increased due to an increase in debt used to fund capital expenditures, offset by the related capitalized interest.

Revenues and expenses as presented in the preceding table differ from the amounts shown in TRG's consolidated statement of operations by the amounts representing Memorial City's revenues and expenses, which are presented in the preceding table as a net amount.

Unconsolidated Joint Ventures

Total revenues for the three months ended September 30, 1998 were $75.9 million, a $13.4 million, or 21.4%, increase from the comparable period of 1997. The increase in minimum rents and expense recoveries was primarily due to Arizona Mills and the expansion at Westfarms. Minimum rents also increased due to tenant rollovers. Other revenue increased by $0.8 million primarily due to increases in lease cancellation revenue.

Total operating costs increased by $11.0 million, or 26.8%, to $52.0 million for the three months ended September 30, 1998. Recoverable and depreciation and amortization expenses increased primarily due to Arizona Mills and Westfarms. Other operating expense increased primarily due to Arizona Mills. Interest expense increased primarily due to an increase in debt used to finance Arizona Mills and the Westfarms expansion, and a decrease in capitalized interest related to these two projects. Operating costs as presented in the preceding table differ from the amounts shown in the combined, summarized financial statements of the Unconsolidated Joint Ventures (Note 4 to TRG's financial statements) by the amount of intercompany profit.

As a result of the foregoing, net income of the Unconsolidated Joint Ventures increased by $2.4 million, or 11.2%, to $23.9 million. TRG's equity in net income of the Unconsolidated Joint Ventures was $13.8 million, a 13.1% increase from the comparable period in 1997.

Net Income

As a result of the foregoing, TRG's income before extraordinary and unusual items increased $1.6 million, or 7.0%, to $24.6 million for the three months ended September 30, 1998. During the third quarter of 1998, TRG recognized a $1.1 billion gain on the GMPT Exchange and a $10.7 million loss on the related restructuring, which primarily represented the cost of certain involuntary terminations of personnel. Also, TRG recognized an extraordinary charge of $49.8 million, related to debt extinguished in anticipation of the GMPT Exchange, consisting primarily of prepayment premiums. After payment of $4.2 million in preferred distributions to the Company, net income available to partnership unitholders for the third quarter of 1998 was $1.1 billion compared to $23.0 million in 1997.

- 29 - Comparison of the Nine Months Ended September 30, 1998 to the Nine Months Ended September 30, 1997

The following table sets forth operating results for TRG's Owned Businesses for the nine months ended September 30, 1998 and September 30, 1997, showing the results of the Consolidated Businesses and Unconsolidated Joint Ventures:

Nine Months Ended September 30, 1998 Nine Months Ended September 30, 1997 ------TRG UNCONSOLIDATED TOTAL TRG UNCONSOLIDATED TOTAL CONSOLIDATED JOINT OWNED CONSOLIDATED JOINT OWNED BUSINESSES(1) VENTURES(2) BUSINESSES BUSINESSES(1) VENTURES(2) BUSINESSES ------(in millions of dollars) REVENUES: Minimum rents 150.1 135.2 285.3 124.5 112.9 237.3 Percentage rents 4.8 2.7 7.4 4.7 2.0 6.7 Expense recoveries 82.8 75.1 157.9 68.5 64.6 133.0 Management, leasing and development 5.8 5.8 6.5 6.5 Other 18.2 7.4 25.6 11.2 8.3 19.6 ------Total revenues 261.7 220.4 482.1 215.3 187.8 403.2

OPERATING COSTS: Recoverable expenses 71.5 63.7 135.2 57.4 55.3 112.7 Other operating 25.3 9.9 35.2 20.3 8.5 28.8 Management, leasing and development 3.5 3.5 3.6 3.6 General and administrative 18.7 18.7 18.7 18.7 Interest expense 66.7 54.0 120.7 54.0 38.9 92.9 Depreciation and amortization 42.6 24.3 66.9 31.2 16.3 47.5 ------Total operating costs 228.3 151.9 380.2 185.1 118.9 304.1 Net results of Memorial City (1) (0.8) (0.8) (0.3) (0.3) ------32.6 68.5 101.1 29.9 68.9 98.8 ======

Equity in income before extraordinary item of Unconsolidated Joint Ventures 38.3 38.9 ------Income before extraordinary and unusual items 70.9 68.8 Gain on GMPT Exchange 1,090.2 Restructuring loss (10.7) ------Income before extraordinary items 1,150.4 68.8 Extraordinary items (50.8) ------Net income 1,099.6 68.8 Preferred distributions to TCO (12.5) ------Net income available to unitholders 1,087.2 68.8 ======

SUPPLEMENTAL INFORMATION (3): EBITDA contribution 142.1 79.9 222.0 115.3 68.5 183.8 TRG's Beneficial Interest Expense (66.7) (28.7) (95.4) (54.0) (20.7) (74.7) Non-real estate depreciation (1.6) (1.6) (1.6) (1.6) Preferred distributions to TCO (12.5) (12.5) ------Distributable Cash Flow contribution 61.4 51.2 112.6 59.7 47.8 107.5 ======

- 30 - TRG -- Consolidated Businesses

Total revenues for the nine months ended September 30, 1998 were $261.7 million, a $46.4 million, or 21.6%, increase over the comparable period in 1997. Minimum rents increased $25.6 million, of which $21.5 million was caused by Tuttle Crossing and the 1997 acquisitions. Minimum rents also increased due to the expansion at Biltmore and tenant rollovers. Expense recoveries increased primarily due to Tuttle Crossing and the acquired Centers. Other revenue increased primarily due to an increase in lease cancellation revenue and gains on sales of peripheral land.

Total operating costs increased $43.2 million, or 23.3%, to $228.3 million. Recoverable, other operating, and depreciation and amortization expenses increased primarily due to Tuttle Crossing and the acquisitions. Other operating expense also increased due to professional fees and management expense. General and administrative expense remained consistent between periods, with increases in compensation attributable to the phase-in of the long-term compensation plan being offset by decreases in employee relocation and recruiter costs. Interest expense increased due to an increase in debt used to finance Tuttle Crossing, the acquisition of The Falls and the redemption of a partner's interest in TRG, partially offset by a decrease in debt paid down with the proceeds of the October 1997 and April 1998 equity offerings. In addition, interest expense increased due to an increase in debt used to fund capital expenditures, offset by the related capitalized interest.

Unconsolidated Joint Ventures

Total revenues for the nine months ended September 30, 1998 were $220.4 million, a $32.6 million, or 17.4%, increase from the comparable period of 1997. The increase in minimum rents and expense recoveries was primarily due to Arizona Mills and the expansion at Westfarms. Minimum rents also increased due to tenant rollovers. Other revenue decreased by $0.9 million primarily due to a decrease in gains on peripheral land sales, partially offset by an increase in lease cancellation revenue.

Total operating costs increased by $33.0 million, or 27.8%, to $151.9 million for the nine months ended September 30, 1998. Recoverable and depreciation and amortization expenses increased primarily due to Arizona Mills and Westfarms. Other operating expense increased primarily due to Arizona Mills. Interest expense increased primarily due to an increase in debt used to finance Arizona Mills and the Westfarms expansion, and a decrease in capitalized interest related to these two projects. Operating costs as presented in the preceding table differ from the amounts shown in the combined, summarized financial statements of the Unconsolidated Joint Ventures (Note 4 to TRG's financial statements) by the amount of intercompany profit.

As a result of the foregoing, income before extraordinary item of the Unconsolidated Joint Ventures decreased by $0.4 million, or 0.6%, to $68.5 million. TRG's equity in income before extraordinary item of the Unconsolidated Joint Ventures was $38.3 million, a 1.5% decrease from the comparable period in 1997.

- 31 - Net Income

As a result of the foregoing, TRG's income before extraordinary and unusual items increased $2.1 million, or 3.1%, to $70.9 million for the nine months ended September 30, 1998. During the first nine months of 1998, TRG recognized a $1.1 billion gain on the GMPT Exchange and a $10.7 million loss on the related restructuring, which primarily represented the cost of certain involuntary terminations of personnel. Also, TRG recognized $50.8 million in extraordinary charges related to the extinguishment of debt, including debt extinguished in anticipation of the GMPT Exchange, primarily consisting of prepayment premiums. After payment of $12.5 million in preferred distributions to the Company, net income available to partnership unitholders for the nine months ended September 30, 1998 was $1.1 billion compared to $68.8 million for the comparable period in 1997.

- 32 - Liquidity and Capital Resources

Taubman Centers, Inc.

On September 30, 1998, the Company obtained a majority and controlling interest in TRG as a result of the GMPT Exchange (Results of Operations --TRG--1998 Transactions above). As of that date the Company consolidated the accounts of TRG in the Company's financial statements. Prior to that date the Company accounted for its investment in TRG under the equity method. Consequently, the Company's and TRG's cash flows for the three and nine months ended September 30, 1998 are discussed separately.

In April 1998, the Company sold approximately 2.0 million shares of its common stock at $13.1875 per share, before deducting the underwriting commission and expenses of the offering, under the Company's shelf registration statement. The Company used the proceeds to acquire an additional equity interest in TRG. TRG paid all costs of the offering. TRG used the net proceeds of approximately $25 million for general partnership purposes.

In October 1997, the Company issued eight million shares of 8.3% Series A Preferred Stock under its equity shelf registration statement. Dividends are payable in arrears on or before the last day of each calendar quarter. The Company used the proceeds to acquire a Series A Preferred Equity interest in TRG that entitles the Company to distributions (in the form of guaranteed payments) in amounts equal to the dividends payable on the Company's Series A Preferred Stock.

As of September 30, 1998, the Company had a consolidated cash balance of $33.8 million. As of September 30, 1998, the Company had 52.9 million outstanding shares of common stock compared to 50.8 million at September 30, 1997.

During the first nine months of 1998 and 1997, the Company received distributions from its partnership interest in TRG of $37.3 million and $35.2 million, respectively. Additionally, the Company received preferred distributions from TRG of $12.5 million in 1998.

The Company pays regular quarterly dividends to its common and preferred shareowners. The principal factor affecting the Company's ability to pay dividends is the receipt of distributions from TRG. The Company's 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. Preferred dividends accrue regardless of whether earnings, cash availability, or contractual obligations were to prohibit the current payment of dividends. Because of the Company's controlling interest in TRG, the Company now has control over TRG's distribution policies; however the Company does not currently anticipate a material change in TRG's distribution policies or the Company's corresponding dividend policy (TRG -- Distributions).

On September 8, 1998, the Company declared a quarterly dividend of $0.235 per common share payable October 20, 1998 to shareowners of record on September 30, 1998. The Board of Directors also declared a quarterly dividend of $0.51875 per share on the Company's 8.3% Series A Preferred Stock for the quarterly dividend period ended September 30, 1998, which was paid on September 30, 1998 to shareowners of record on September 18, 1998.

The Company is presently determining the effect of the GMPT Exchange and the related refinancing and restructuring on the tax status of its common and preferred dividends.

- 33 - TRG

The balance of the first bridge loan of $902 million was assumed by GMPT at the time of the GMPT Exchange. The second loan had a balance of $310 million at September 30, 1998. This loan has a maximum borrowing capacity of $430 million and expires in June 1999. TRG expects to refinance the balance on the bridge loan during the first half of 1999. Additionally, TRG has obtained a $200 million line of credit, replacing TRG's previous revolving credit and commercial paper facilities. The line of credit expires in September 2001.

TRG also has available an unsecured bank line of credit of up to $40 million. The line had no outstanding borrowings as of September 30, 1998 and expires in August 1999.

Proceeds from other borrowings and equity issuances of $373.4 million provided funding for the first nine months of 1998 (including $77.7 million for the redemption of 6.1 million units of partnership interest in January 1998) compared to $244.4 million in the comparable period of 1997 (including $123.9 million for the acquisition of Regency Square in September 1997). Additionally, the proceeds were used to fund capital expenditures for the Consolidated Businesses and contributions to Unconsolidated Joint Ventures for construction costs.

In March 1998, a 50% owned Unconsolidated Joint Venture completed a $140 million, 6.60% secured financing maturing in 2008. The net proceeds were used to extinguish an existing mortgage of approximately $39 million and pay a prepayment penalty of approximately $1.8 million. In addition, proceeds of $5.6 million were used to close out a treasury lock agreement entered into in 1997, which resulted in an effective rate on the financing of approximately 7%. The remaining proceeds were distributed to the owners. TRG used its 50% share of the distribution to pay down its revolving credit facilities.

At September 30, 1998, TRG's debt and its beneficial interest in the debt of its Consolidated and Unconsolidated Joint Ventures totaled $1,094.7 million. As shown in the following table, $299.0 million of this debt was floating rate debt that remained unhedged at September 30, 1998. Interest rates shown do not include amortization of debt issuance costs and interest rate hedging costs. These items are reported as interest expense in TRG's results of operations. In the aggregate, these costs added 0.49% to the effective rate of interest on TRG's beneficial interest in debt at September 30, 1998. Included in TRG's beneficial interest in debt is debt used to fund development and expansion costs. TRG's beneficial interest in assets on which interest is being capitalized totaled $334.5 million as of September 30, 1998. TRG's beneficial interest in capitalized interest was $5.2 million and $12.6 million for the three and nine months ended September 30, 1998, respectively.

- 34 - Beneficial Interest in Debt ------Amount Interest LIBOR Frequency LIBOR (In millions Rate at Cap of Rate at of dollars) 9/30/98 Rate Resets 9/30/98 ------Total beneficial interest in fixed rate debt 408.9 8.01%(1)

Floating rate debt hedged via interest rate caps: Through July 1999 65.0 6.41 7.00 Monthly 5.38 Through December 1999 200.0 6.79(1) 9.50(2) Monthly 5.38 Through October 2001 25.0 6.04 8.55 Monthly 5.38 Through January 2002 53.4 6.88(1) 9.50 Monthly 5.38 Through July 2002 43.4 7.07 6.50 Monthly 5.38 Other floating rate debt 299.0 6.79(1) ------

Total beneficial interest in debt 1,094.7 7.22(1) ======

(1) Denotes weighted average interest rate. (2) Rate reduces to 7.0% in December 1998.

In September 1998, TRG entered into treasury lock agreements with a notional amount of $200 million at approximately 5%, plus credit spread. In October 1998, TRG effectively closed out its position in the treasury locks at a cost of approximately $4 million.

TRG's loan and facility agreements contain various restrictive covenants, including 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. TRG is in compliance with all of such covenants.

Distributions

A principal factor that TRG considers in determining distributions to partners is TRG's Distributable Cash Flow, which is defined as EBITDA less TRG's Beneficial Interest Expense, non-real estate depreciation and amortization, and preferred distributions. Capital structure, in addition to operations, influences this measure of performance. TRG defines EBITDA as TRG's beneficial interest in (or pro rata share of ) the revenues, less operating costs before interest, depreciation and amortization, and unusual items of the Owned Businesses. The Company calculates its Funds from Operations by adding the Company's beneficial interest in TRG's Distributable Cash Flow to the Company's other income, less the Company's operating expenses. EBITDA, Distributable Cash Flow and Funds from Operations do 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 (NAREIT) suggests that Funds from Operations is a useful supplemental measure of operating performance for REITs.

- 35 - The following table summarizes TRG's Distributable Cash Flow and the Company's Funds from Operations for the three months ended September 30, 1998 and 1997:

Three months ended Three months ended September 30, 1998 September 30, 1997 ------TRG Unconsolidated TRG Unconsolidated Consolidated Joint Consolidated Joint Businesses Ventures(1) Total Businesses Ventures(1) Total ------(in millions of dollars)

TRG's Net Income(2) 1,054.3 23.0 Extraordinary item (3) 49.8 Net gain on GMPT Exchange and restructuring charge (1,079.5) Depreciation and Amortization(4) 19.2 14.5 TRG's Beneficial Interest Expense 31.9 26.9 ------EBITDA 47.7 28.0 75.7 41.3 23.2 64.5 TRG's Beneficial Interest Expense (22.1) (9.8) (31.9) (19.4) (7.5) (26.9) Non-real estate depreciation (0.5) (0.5) (0.5) (0.5) Preferred distributions to TCO (4.2) (4.2) ------Distributable Cash Flow 20.9 18.2 39.1 21.4 15.7 37.1 ======

The Company's share of Distributable Cash Flow 15.5 13.6 Other income/ expenses, net (0.1) (0.2) ------Funds from Operations 15.3 13.4 ======

(1) Amounts represent TRG's beneficial interest in the operations of its Unconsolidated Joint Ventures. (2) Includes TRG's share of gains on peripheral land sales of $2.9 and $0.6 million for the three months ended September 30, 1998 and 1997. (3) Extraordinary charge related to the extinguishment of debt, primarily consisting of prepayment premiums. (4) Includes $1.1 million and $1.0 million of mall tenant allowance amortization in the third quarter of 1998 and 1997, respectively. (5) Amounts may not add due to rounding.

The following table summarizes TRG's Distributable Cash Flow and the Company's Funds from Operations for the nine months ended September 30, 1998 and 1997:

Nine months ended Nine months ended September 30, 1998 September 30, 1997 ------TRG Unconsolidated TRG Unconsolidated Consolidated Joint Consolidated Joint Businesses Ventures(1) Total Businesses Ventures(1) Total ------(in millions of dollars)

TRG's Net Income(2) 1,099.6 68.8 Extraordinary items(3) 50.8 Net gain on GMPT Exchange and restructuring charge (1,079.5) Depreciation and Amortization(4) 55.7 40.3 TRG's Beneficial Interest Expense 95.4 74.7 ------EBITDA 142.1 79.9 222.0 115.3 68.5 183.8 TRG's Beneficial Interest Expense (66.7) (28.7) (95.4) (54.0) (20.7) (74.7) Non-real estate depreciation (1.6) (1.6) (1.6) (1.6) Preferred distributions to TCO (12.5) (12.5) ------Distributable Cash Flow 61.4 51.2 112.6 59.7 47.8 107.5 ======

The Company's share of Distributable Cash Flow 43.9 39.4 Other income/ expenses, net (0.5) (0.6) ------Funds from Operations 43.4 38.9 ======

(1) Amounts represent TRG's beneficial interest in the operations of its Unconsolidated Joint Ventures. (2) Includes TRG's share of gains on peripheral land sales of $3.3 million and $2.5 million for the nine months ended September 30, 1998 and 1997, respectively. (3) Extraordinary charges related to the extinguishment of debt, primarily consisting of prepayment premiums. (4) Includes $3.3 million and $2.8 million of mall tenant allowance amortization for the nine months ended September 30, 1998 and 1997, respectively. (5) Amounts may not add due to rounding.

- 36 - For the third quarter of 1998, EBITDA and Distributable Cash Flow were $75.7 million and $39.1 million, compared to $64.5 million and $37.1 million for the same period in 1997. In addition to $4.2 million representing preferred distributions to the Company on TRG's Series A Preferred Equity, TRG distributed $32.1 million to its partners in both the third quarter of 1998 and 1997. The Company's Funds from Operations for the third quarter of 1998 was $15.3 million, compared to $13.4 million for the same period in 1997.

During the first nine months of 1998, EBITDA and Distributable Cash Flow were $222.0 million and $112.6 million, compared to $183.8 million and $107.5 million for the same period in 1997. In addition to $12.5 million in preferred distributions to the Company, TRG distributed $95.7 million and $96.1 million to its partners in the nine month periods ended September 30, 1998 and 1997, respectively. The Company's Funds from Operations for 1998 was $43.4 million, compared to $38.9 million for the same period in 1997.

The annual determination of TRG's distributions is based on anticipated Distributable Cash Flow available after preferred distributions to the Company on TRG's Series A Preferred Equity, as well as financing considerations and other appropriate factors. Further, the Company has decided that the growth in distributions will be less than the growth in Distributable Cash Flow for the immediate future.

Except under unusual circumstances, TRG's practice is to distribute equal monthly installments of the determined amount of distributions throughout the year. Due to seasonality and the fact that cash available to TRG for distributions may be more or less than net cash provided from operating activities plus distributions from Joint Ventures during the year, TRG may borrow from unused credit facilities (described in Liquidity and Capital Resources -- TRG above).

Each Joint Venture may make distributions only in accordance with the terms of its partnership agreement. TRG, in general, acts as the managing partner and has the right to determine the amount of cash available for distribution from the Joint Venture. In general, the provisions of these agreements require the distribution of all available cash (as defined in each partnership agreement), but most do not allow borrowing to finance distributions without approval of the Joint Venture Partner.

As a result, distribution policies of many Joint Ventures will not parallel those of TRG. While TRG may not, therefore, receive as much in distributions from each Joint Venture as it intends to distribute with respect to that Joint Venture, the Company does not believe this will impede TRG's intended distribution policy because of TRG's overall access to liquid resources, including borrowing capacity.

Any inability of TRG 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 TRG and funds available to the Company for the payment of dividends.

- 37 - Capital Spending

Capital spending for routine maintenance of the Taubman Shopping Centers is generally recovered from tenants. The following table summarizes planned capital spending, which is not recovered from tenants and assuming no acquisitions during 1998:

1998 ------TRG's Share of Unconsolidated Consolidated Businesses Consolidated Joint and Unconsolidated Businesses Ventures(1) Joint Ventures(1)(2) ------(in millions of dollars) Development, renovation, and expansion 285.7(3) 98.9(4) 259.2 Mall tenant allowances 7.9 7.3 11.7 Pre-construction development and other 54.5 2.6 55.7 ------Total 348.1 108.8 326.6 ======

(1) Costs are net of intercompany profits. (2) Includes TRG's share of construction costs for Great Lakes Crossing (an 80% owned consolidated joint venture), MacArthur Center (a 70% owned consolidated joint venture), and Tampa International (a 50.1% owned consolidated joint venture). (3) Includes costs related to MacArthur Center, Great Lakes Crossing and Tampa International. (4) Includes costs related to the expansion project at Cherry Creek.

At Cherry Creek, an ongoing expansion includes a newly constructed Lord & Taylor store, which opened in November 1997, and the addition of 132 thousand square feet of mall GLA, which began opening in stages in August and continuing throughout the fall of 1998. The expansion is expected to cost approximately $50 million. TRG has a 50% ownership interest in Cherry Creek.

Great Lakes Crossing, an enclosed value super-regional mall being developed by TRG in Auburn Hills, Michigan, will open in November 1998. The Center will be 1.4 million square feet and its 11 anchors will include Bass Pro Shops Outdoor World, Neiman Marcus Last Call Clearance Center, JCPenney Outlet Store, Oshman's SuperSports USA, and a 25-screen 100,000 square foot Star Theatre megaplex. This Center is presently owned by a joint venture in which TRG has a controlling 80% interest and is projected to cost approximately $215 million.

MacArthur Center, a new Center under construction in Norfolk, Virginia, is expected to open in March 1999. The 930 thousand square foot Center will initially be anchored by Nordstrom and Dillard's. This Center will be owned by a joint venture in which TRG has a 70% controlling interest and is projected to cost approximately $150 million.

Tampa International, a new Center located in Tampa, Florida, is expected to begin construction in the fourth quarter of 1998 and open in the fall of 2001. The Center is expected to open with 1.2 million square feet and will be anchored by Nordstrom, Lord & Taylor and Neiman Marcus. This Center will be owned by a joint venture in which TRG will have a controlling 50.1% interest and is projected to cost approximately $265 million.

In 1996, TRG entered into an agreement to lease Memorial City Mall, a 1.4 million square foot shopping center located in Houston, Texas. Memorial City is anchored by Sears, Foley's, Montgomery Ward and Mervyn's. TRG has the option to terminate the lease after the third full year by paying $2 million to the lessor. TRG is using this option period to evaluate the redevelopment opportunities of the Center. Under the terms of the lease, TRG has agreed to invest a minimum of $3 million during the three year option period. If the redevelopment proceeds, TRG is required to invest an additional $22 million in property expenditures not recoverable from tenants during the first 10 years of the lease term.

- 38 - TRG and The Mills Corporation have formed an alliance to develop value super-regional projects in major metropolitan markets. The ten-year agreement calls for the two companies to jointly develop and own at least seven of these centers, each representing approximately $200 million of capital investment. The initial scope of the arrangement will include joint ventures in projects currently under development by TRG in Detroit (Great Lakes Crossing) and Mills in Houston as well as proposed projects in Philadelphia and Boston. A number of other locations across the nation are targeted for future initiatives.

TRG anticipates that its share of costs for development projects scheduled to be completed in 1999 will be as much as $71 million in 1999. TRG's estimates of 1998 and 1999 capital spending include only projects approved by the Company's board of directors and, consequently, TRG's estimates will change as new projects are approved. Currently, TRG expects to open on average one $175 million to $200 million shopping center each year. TRG's 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; and 6) actual time to complete projects.

Year 2000 Matters

The approach of the calendar year 2000 (Year 2000) presents issues for many financial, information, and operational systems that may not properly recognize the Year 2000. The Company has developed a high-level plan to address the risks posed by the Year 2000 issue, covering affected application and infrastructure systems. Affected systems include both informational (such as accounting and payroll) and operational (such as elevators, security and lighting). The Company's plan also addresses the effect of third parties with which it conducts business, including tenants, vendors, contractors, creditors, and others. The Company has completed the assessment, inventory and planning phases of its plan and has determined that the majority of the Company's internal systems and all of its mission critical systems are already Year 2000 compliant. The Company has requested information and is obtaining commitments from tenants, vendors, suppliers and business partners and is developing alternative solutions to minimize the impact on the Company in the event they do not meet their Year 2000 commitments.

The Company expects to remediate any remaining issues encountered with application and infrastructure systems through repair and/or replacement by early 1999; the estimated costs of addressing this issue are not expected to be material to 1998 or 1999 operations. The Company will also continue monitoring the progress of material third parties' responses to the Year 2000 issue. The Company believes that its most likely exposure will be the failure of third parties in comprehensively addressing the issue. For example, failure of tenants' information systems could delay the payment of rents. The Company is developing contingency plans in response to such exposure, as appropriate. Failure by the Company or those with which it conducts business to successfully respond to the Year 2000 issue may have a material adverse effect on the Company.

Cash Tender Agreement

A. Alfred Taubman has the annual right to tender to the Company units of partnership interest in TRG (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 Robert C. Larson and his family 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.

- 39 - Based on a market value at September 30, 1998 of $14.00 per common share, the aggregate value of interests in TRG that may be tendered under the Cash Tender Agreement was approximately $333 million. The purchase of these interests at September 30, 1998 would have resulted in the Company owning an additional 28% interest in TRG.

Capital Resources

The Company believes that its net cash provided by operating activities, distributions from the Joint Ventures, the unutilized portion of its credit facilities, and its ability to access the credit markets, assure adequate liquidity to conduct its operations in accordance with its distribution and financing policies. TRG's borrowings are not and will not be recourse to the Company without its consent.

- 40 - PART II

OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K a) Exhibits

3 (a) -- Restated Articles of Incorporation of Taubman Centers, Inc.

3 (b) -- Restated By-Laws of Taubman Centers, Inc.

4 -- Revolving Credit Agreement dated as of September 21, 1998 among The Taubman Realty Group Limited Partnership, as Borrower, UBS AG, New York Branch, as a Bank and UBS AG, New York Branch, as Administrative Agent.

10 -- The Second Amendment and Restatement of Agreement of Limited Partnership of the Taubman Realty Group Limited Partnership dated September 30, 1998.

12 (a) -- Statement Re: Computation of Taubman Centers, Inc. Ratio of Earnings to Preferred Stock Dividends.

12 (b) -- Statement Re: Computation of TRG's Ratios of Earnings to Fixed Charges and Preferred Distributions.

27 -- Financial Data Schedule. b) Current Reports on Form 8-K.

The Company voluntarily filed a current report on Form 8-K dated September 30, 1998 to report a press release announcing TRG's completion of the redemption of the General Motors Pension Trusts' holding in TRG.

The Company voluntarily filed a current report on Form 8-K dated August 20, 1998 to make available information regarding certain current developments in the form of a press release and investor supplements.

- 41 - SIGNATURES

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

TAUBMAN CENTERS, INC.

Date: November 16, 1998 By: /s/ Lisa A. Payne ------Lisa A. Payne Executive Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit Number

3 (a) -- Restated Articles of Incorporation of Taubman Centers, Inc.

3 (b) -- Restated By-Laws of Taubman Centers, Inc.

10 -- The Second Amendment and Restatement of Agreement of Limited Partnership of the Taubman Realty Group Limited Partnership dated September 30, 1998.

12 (a) -- Statement Re: Computation of Taubman Centers, Inc. Ratio of Earnings to Preferred Stock Dividends.

12 (b) -- Statement Re: Computation of TRG's Ratios of Earnings to Fixed Charges and Preferred Distributions.

27 -- Financial Data Schedule. RESTATED ARTICLES OF INCORPORATION OF TAUBMAN CENTERS, INC.

1. These Restated Articles of Incorporation are executed on behalf of Taubman Centers, Inc. (the "Corporation") pursuant to the provisions of Section 643 of the Michigan Business Corporation Act (the "Act").

2. The present name of the Corporation is: Taubman Centers, Inc.

3. The corporation identification number (CID) assigned by the Bureau is: 011-602.

4. Except for the Corporation=s present name, the Corporation has not used any name other than Taubman Realty, Inc.

5. The date of filing the original articles of incorporation was November 21, 1973.

6. These Restated Articles of Incorporation were duly adopted by the Board of Directors of the Corporation in accordance with the provisions of Section 641(4) of the Act.

7. The following Restated Articles of Incorporation only restate and integrate (and do not further amend) the Corporation's Second Amended and Restated Articles of Incorporation, as previously amended. There is no material discrepancy between the provisions of the Corporation's Second Amended and Restated Articles of Incorporation, as amended, and the following Restated Articles of Incorporation (referred to below as "these Amended and Restated Articles of Incorporation").

ARTICLE I Name

The name of the Corporation is: Taubman Centers, Inc.

ARTICLE II Purpose

The purpose for which the Corporation is organized is to:

1. own, hold, develop and dispose of and invest in any type of retail real property or mixed use real property having a retail component of significant value in relation to the value of the entire mixed use real property, including any entity whose material assets include such real properties including, but not limited to, partnership interests in The Taubman Realty Group Limited Partnership, a Delaware limited partnership, and any successor thereto ("TRG");

2. act as managing general partner of TRG;

3. at such time, if ever, as TRG distributes its assets to its partners, own, hold, manage, develop and dispose of said assets and in all other respects, carry on the business of TRG;

4. qualify as a REIT (as hereinafter defined); and

5. engage in any other lawful act or activity for which corporations may be organized under the Michigan Business Corporation Act in addition to any of the foregoing purposes, that is consistent with the Corporation's qualification as a REIT.

1 ARTICLE III Capital

1. Classes and Number of Shares.

The total number of shares of all classes of stock that the Corporation shall have authority to issue is 300,000,000 shares. The classes and the aggregate number of shares of stock of each class are as follows:

250,000,000 shares of Common Stock, par value $0.01 per share (the "Common Stock"), which shall have the rights and limitations set forth below.

50,000,000 shares of preferred stock (the "Preferred Stock"), which may be issued in one or more series having such relative rights, preferences, priorities, privileges, restrictions, and limitations as the Board of Directors may determine from time to time.

2. Certain Powers, Rights, and Limitations of Capital Stock.

(a) Common Stock. Subject to the rights, preferences, and limitations that the Board of Directors designates with respect to any series of Preferred Stock, a statement of certain powers, rights, and limitations of the shares of the Common Stock is as follows:

(i) Dividend Rights. The holders of shares of the Common Stock shall be entitled to receive such dividends as may be declared by the Board of Directors of the Corporation with respect to the Common Stock, subject to the preferential rights of any series of Preferred Stock designated by the Corporation's Board of Directors.

(ii) Rights Upon Liquidation. Subject to the provisions of Subsection (e) of this Section 2 of this Article III, in the event of any voluntary or involuntary liquidation, dissolution or winding up of, or any distribution of the assets of, the Corporation, each holder of shares of the Common Stock shall be entitled to receive, ratably with each other holder of shares of the Common Stock, that portion of the assets of the Corporation available for distribution to its holders of shares of Common Stock as the number of shares of the Common Stock held by such holder bears to the total number of shares of Common Stock (including shares of Common Stock that have become Excess Stock) then outstanding.

(b) Voting Rights. Subject to the provisions of Subsection (e) of this Section 2 of this Article III, the holders of shares of the Common Stock shall be entitled to vote on all matters (for which a common shareholder shall be entitled to vote thereon) at all meetings of the shareholders of the Corporation, and shall be entitled to one vote for each share of the Common Stock entitled to vote at such meeting. Any action to be taken by the shareholders, other than the election of directors or adjourning a meeting, including, but not limited to, the approval of an amendment to these Amended and Restated Articles of Incorporation (other than an amendment by the Board of Directors to establish the relative rights, preferences, priorities, privileges, restrictions, and limitations of Preferred Stock as provided in Subsection (c) of this Section 2 of this Article III, which amendment by the Board of Directors shall require no action to be taken by the shareholders), shall be authorized if approved by the affirmative vote of two-thirds of the shares of Capital Stock entitled to vote thereon. Directors shall be elected if approved by a plurality of the votes cast at an election.

(c) Preferred Stock. The Preferred Stock shall have such relative rights, preferences, priorities, privileges, restrictions, and limitations as the Board of Directors may determine from time to time by one or more amendments to these Amended and Restated Articles of Incorporation.

(i) Series A Preferred Stock. Subject in all cases to the other provisions of this Section 2 of this Article III, including, without limitation, those provisions restricting the Beneficial Ownership and Constructive Ownership of shares of Capital Stock and those provisions with respect to Excess Stock, the following sets forth the designation, preferences, limitations as to dividends, voting and other rights, and the terms and conditions of redemption of the Series A Preferred Stock (defined below) of the Corporation.

2 (a) There is hereby established a series of Preferred Stock designated "8.30% Series A Cumulative Redeemable Preferred Stock, par value $0.01 per share" (the "Series A Preferred Stock"), which shall consist of 8,000,000 authorized shares.

(b) All shares of Series A Preferred Stock redeemed, purchased, exchanged, or otherwise acquired by the Corporation shall be restored to the status of authorized but unissued shares of Preferred Stock.

(c) The Series A Preferred Stock shall, with respect to dividend rights, rights upon liquidation, winding up or dissolution, and redemption rights, rank (i) junior to any other series of Preferred Stock hereafter duly established by the Board of Directors of the Corporation, the terms of which specifically provide that such series shall rank prior to the Series A Preferred Stock as to the payment of dividends and distribution of assets upon liquidation (the "Senior Preferred Stock"), (ii) pari passu with any other series of Preferred Stock hereafter duly established by the Board of Directors of the Corporation, the terms of which specifically provide that such series shall rank pari passu with the Series A Preferred Stock as to the payment of dividends and distribution of assets upon liquidation (the "Parity Preferred Stock"), and (iii) prior to any other class or series of Capital Stock, including, without limitation, the Common Stock of the Corporation, whether now existing or hereafter created (collectively, the "Junior Stock").

(d) (1) Subject to the rights of any Senior Preferred Stock, the holders of the then outstanding shares of Series A Preferred Stock shall be entitled to receive, as and when declared by the Board of Directors, out of funds legally available for the payment of dividends, cumulative preferential cash dividends at the annual rate of 8.30% of the $25.00 per share liquidation preference (i.e., $2.075 per annum per share). Such dividends shall accrue and be cumulative from the date of original issue and shall be payable in equal quarterly amounts in arrears on or before the last day of each March, June, September, and December or, if such day is not a business day, the next succeeding business day (each, a "Dividend Payment Date") (for the purposes of this Subparagraph (1) of this Paragraph (d), a "business day" is any day, other than a Saturday, Sunday, or legal holiday, on which banks in Detroit, Michigan, are open for business). The first dividend, which shall be paid on December 31, 1997, will be for less than a full quarter. All dividends on the Series A Preferred Stock, including any dividend for any partial dividend period, shall be computed on the basis of a 360-day year consisting of twelve 30-day months. Dividends will be payable to holders of record as they appear in the stock records of the Corporation at the close of business on the applicable record date, which shall be the 15th day of the calendar month in which the applicable Dividend Payment Date falls or on such other date designed by the Board of Directors of the Corporation for the payment of dividends that is not more than 30 nor less than ten days prior to such Dividend Payment Date (each, a "Dividend Record Date").

(2) No dividends on the Series A Preferred Stock shall be declared by the Board of Directors or paid or set apart for payment by the Corporation at such time as any agreement of the Corporation, including any agreement relating to its indebtedness, prohibits such declaration, payment, or setting apart for payment or provides that such declaration, payment, or setting apart for payment would constitute a breach of, or a default under, such agreement or if such declaration, payment, or setting aside shall be restricted or prohibited by law.

(3) Dividends on the Series A Preferred Stock shall accrue and be cumulative regardless of whether the Corporation has earnings, regardless of whether there are funds legally available for the payment of such dividends, and regardless of whether such dividends are declared. Accrued but unpaid dividends on the Series A Preferred Stock will accumulate as of the Dividend Payment Date on which they first become payable. Except as set forth below in this Subparagraph (3), no dividends shall be declared or paid or set apart for payment on any Common Stock or any other series of Preferred Stock ranking, as to dividends, on a parity with or junior to the Series A Preferred Stock (other than a dividend in shares of Junior Stock) for any period unless full cumulative dividends have been or contemporaneously are declared and paid or declared and a sum sufficient for

3 the payment thereof is set apart for such payment on the Series A Preferred Stock for all past dividend periods and the then current dividend period. When dividends are not paid in full (and a sum sufficient for such full payment is not so set apart) upon the Series A Preferred Stock and the shares of any other series of Preferred Stock ranking on a parity as to dividends with the Series A Preferred Stock, all dividends declared upon the Series A Preferred Stock and any other series of Preferred Stock ranking on a parity as to dividends with the Series A Preferred Stock shall be declared pro rata, so that the amount of dividends declared per share of Series A Preferred Stock and such other series of Preferred Stock shall in all cases bear to each other the same ratio that accrued dividends per share on the Series A Preferred Stock and such other series of Preferred Stock (which shall not include any accrual in respect of unpaid dividends for prior dividend periods if such Preferred Stock does not have a cumulative dividend) bear to each other. No interest shall be payable in respect of any dividend payment on the Series A Preferred Stock that may be in arrears. Holders of shares of the Series A Preferred Stock shall not be entitled to any dividend, whether payable in cash, property, or stock, in excess of full cumulative dividends on the Series A Preferred Stock as provided above. Any dividend payment made on shares of the Series A Preferred Stock shall first be credited against the earliest accumulated but unpaid dividend due with respect to such shares that remains payable.

(4) Except as provided in Subparagraph (3) of this Paragraph (d) of this Item (i) of this Subsection (c) of this Section 2 of this Article III, unless full cumulative dividends on the Series A Preferred Stock have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof is set apart for payment for all past dividend periods and the then current dividend period: (i) no dividends (other than in shares of Junior Stock) shall be declared or paid or set aside for payment nor shall any other distribution be declared or made upon the Common Stock (or any other Preferred Stock ranking junior to or on a parity with the Series A Preferred Stock as to dividends or upon liquidation); and (ii) no shares of Common Stock (or any other Preferred Stock of the Corporation ranking junior to or on a parity with the Series A Preferred Stock as to dividends or upon liquidation) shall be redeemed, purchased, or otherwise acquired for any consideration (nor shall any moneys be paid to or made available for a sinking fund for the redemption of any such shares) by the Corporation (except by conversion into or exchange for Junior Stock).

(5) If for any taxable year the Corporation elects to designate as "capital gains dividends" (as defined in Section 857 of the Code) any portion (the "Capital Gains Amount") of the dividends paid or made available for the year to holders of all classes of Capital Stock (the "Total Dividends"), then the portion of the Capital Gains Amount that shall be allocable to the holders of Series A Preferred Stock shall be the amount that the total dividends paid or made available to the holders of the Series A Preferred Stock for the year bears to the Total Dividends.

(e) Subject to the rights of any Senior Stock, upon any voluntary or involuntary liquidation, dissolution, or winding up of the affairs of the Corporation, and before any distribution of assets shall be made in respect of any Junior Stock, the holders of the Series A Preferred Stock shall be entitled to be paid out of the assets of the Corporation legally available for distribution to its shareholders a liquidation preference of $25.00 per share in cash (or property having a fair market value as determined by the Board of Directors valued at $25.00 per share), plus an amount equal to any accrued but unpaid dividends to the date of payment. After payment of the full amount of the liquidating distributions to which they are entitled, the holders of Series A Preferred Stock shall have no right or claims to any of the remaining assets of the Corporation. Neither the consolidation or merger of the Corporation with or into any other corporation, trust, or entity (or of any other corporation with or into the Corporation) nor the sale, lease, or conveyance of all or substantially all of the property or business of the Corporation shall be deemed to constitute a liquidation, dissolution or winding up of the Corporation for the purpose of this Paragraph (e) of this Item (i).

(f) (1) The Series A Preferred Stock is not redeemable prior to October 3, 2002. On and after October 3, 2002, the Corporation, at its option upon not less than 30 nor more than 60 days'

4 written notice, may redeem shares of the Series A Preferred Stock, in whole or in part, at any time and from time to time, for a cash redemption price of $25.00 per share, plus all accrued and unpaid dividends to the date fixed for redemption (except as provided below).

(2) The redemption price of the Series A Preferred Stock (other than the portion thereof consisting of accrued but unpaid dividends) shall be payable solely out of the sale proceeds of other "capital stock" of the Corporation. For purposes of the preceding sentence, the term "capital stock" means any equity securities of the Corporation (including Common Stock and Preferred Stock), shares, interest, participation, or other ownership interests (however designated) and any rights (other than debt securities convertible into or exchangeable for equity securities) or options to purchase any of the foregoing. Holders of Series A Preferred Stock to be redeemed shall surrender such shares at the place designated in the notice of redemption and shall be entitled to the redemption price and any accrued and unpaid dividends payable upon such redemption following such surrender. If notice of redemption has been given and if the Corporation has set aside in trust the funds necessary for the redemption, then from and after the redemption date: (i) dividends shall cease to accrue on such shares of Series A Preferred Stock; (ii) such shares of Series A Preferred Stock shall no longer be deemed outstanding; and (iii) all rights of the holders of such shares shall terminate, except the right to receive the redemption price. If less than all of the outstanding Series A Preferred Stock is to be redeemed, the Series A Preferred Stock to be redeemed shall be selected pro rata (as nearly as may be practicable without creating fractional shares) or by any other equitable method determined by the Corporation.

(3) Unless full cumulative dividends on all shares of Series A Preferred Stock shall have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof set apart for payment, no shares of Series A Preferred Stock shall be redeemed unless all outstanding shares of Series A Preferred Stock are simultaneously redeemed, and the Corporation shall not purchase or otherwise acquire directly or indirectly any shares of Series A Preferred Stock (except by exchange for Junior Stock); however, the foregoing shall not prevent the purchase or acquisition of shares of Series A Preferred Stock pursuant to a purchase or exchange offer made on the same terms to holders of all outstanding shares of Series A Preferred Stock.

(4) Notice of redemption shall be given by publication in a newspaper of general circulation in The City of New York, such publication to be made once a week for two successive weeks commencing not less than 30 nor more than 60 days prior to the redemption date. A similar notice shall be mailed by the Corporation, postage prepaid, not less than 30 nor more than 60 days prior to the redemption date, addressed to the respective holders of record of the Series A Preferred Stock to be redeemed at their respective addresses as they appear on the stock transfer records of the Corporation. No failure to give or defect in such notice shall affect the validity of the proceedings for the redemption of any shares of Series A Preferred Stock except as to the holder to whom notice was defective or not given. Each notice shall state: (i) the redemption date; (ii) the redemption price; (iii) the number of shares of Series A Preferred Stock to be redeemed; (iv) the place or places where the Series A Preferred Stock is to be surrendered for payment of the redemption price; and (v) that dividends on the shares to be redeemed will cease to accrue on such redemption date. If fewer than all shares of the Series A Preferred Stock held by any holder are to be redeemed, the notice mailed to such holder shall also specify the number of shares of Series A Preferred Stock to be redeemed from such holder.

(5) The holders of Series A Preferred Stock at the close of business on a Dividend Record Date shall be entitled to receive the dividend payable with respect to such Series A Preferred Stock on the corresponding Dividend Payment Date notwithstanding the redemption thereof between such Dividend Record Date and the corresponding Dividend Payment Date or the Corporation's default in the payment of the dividend due. Except as provided above, the Corporation will make no payment or allowance for unpaid dividends, regardless of whether in arrears, on called Series A Preferred Stock.

5 (6) The Series A Preferred Stock has no stated maturity and shall not be subject to any sinking fund or mandatory redemption. The Series A Preferred Stock is not convertible into any other securities of the Corporation, but is subject to the Excess Stock (and all other) provisions of this Article III.

(g) (1) Except as may be required by law or as otherwise expressly provided in this Item (i) of this Subsection (c) of this Section 2 of this Article III, the holders of Series A Preferred Stock shall not be entitled to vote. On all matters with respect to which the Series A Preferred Stock is entitled to vote, each share of Series A Preferred Stock shall be entitled to one vote.

(2) Whenever dividends on the Series A Preferred Stock are in arrears for six or more quarterly periods, the number of directors then constituting the Board of Directors shall be increased by two, and the holders of Series A Preferred Stock (voting separately as a class with all other series of Preferred Stock upon which like voting rights have been conferred and are exercisable) ("Voting Parity Preferred") shall have the right to elect two directors of the Corporation at a special meeting called by the holders of record of at least 10% of the Series A Preferred Stock or at least 10% of any other Voting Parity Preferred so in arrears (unless such request is received less than 90 days before the date fixed for the next annual or special meeting of the shareholders) or at the next annual meeting of shareholders, and at each subsequent annual meeting, until all dividends accumulated on the Series A Preferred Stock for the past dividend periods and the then current dividend period have been fully paid or declared and a sum sufficient for the payment of such dividends has been set aside for payment. If and when all accumulated dividends and the dividend for the then current dividend period on the Series A Preferred Stock shall have been paid in full or set aside for payment in full, the holders of the Series A Preferred Stock shall be divested of the foregoing voting rights, and if all accumulated dividends and the dividend for the then current period have been paid in full or set aside for payment in full on all series of Voting Parity Preferred, the term of office of each director so elected by the holders of the Series A Preferred Stock and the Voting Parity Preferred shall terminate.

(3) As long as any shares of Series A Preferred Stock remain outstanding, the Corporation shall not, without the affirmative vote or consent of the holders of at least two-thirds of the outstanding shares of Series A Preferred Stock (voting as a separate class): (i) authorize or create, or increase the authorized or issued amount of, any Capital Stock ranking senior to the Series A Preferred Stock with respect to the payment of dividends or the distribution of assets upon liquidation, dissolution, or winding up or reclassify any authorized Capital Stock of the Corporation into such shares, or create, authorize, or issue any obligation or security convertible into or evidencing the right to purchase any such shares; or (ii) amend, alter, or repeal the provisions of these Amended and Restated Articles of Incorporation, whether by merger, consolidation, or otherwise (an "Event"), so as to materially and adversely affect any right, preference, privilege, or voting power of the Series A Preferred Stock or the holders thereof; however, as long as the Series A Preferred Stock remains outstanding with its terms materially unchanged, taking into account that upon the occurrence of an Event, the Corporation may not be the surviving entity, the occurrence of an Event described in clause (ii) above of this Subparagraph (3) shall not be deemed to materially and adversely affect such rights, preferences, privileges, or voting power of the holders of Series A Preferred Stock, and (x) any increase in the amount of the authorized Preferred Stock or the creation or issuance of any other series of Preferred Stock, or (y) any increase in the amount of authorized shares of the Series A Preferred Stock or any other series of Preferred Stock, in each case ranking on a parity with or junior to the Series A Preferred Stock with respect to payment of dividends or the distribution of assets upon liquidation, dissolution, or winding up, shall not be deemed to materially and adversely affect such rights, preferences, privileges, or voting powers.

(4) Notwithstanding the foregoing, the Series A Preferred Stock shall not be entitled to vote, and the foregoing voting provisions shall not apply, if at or prior to the time when the act with respect to which such vote would otherwise be required is effected, all outstanding shares of the Series A Preferred Stock have been redeemed or called for redemption, and sufficient funds have

6 been deposited in trust for the benefit of the holders of the Series A Preferred Stock to effect such redemption.

(ii) Series B Preferred Stock. Subject in all cases to the other provisions of this Section 2 of this Article III, including, without limitation, those provisions restricting the Beneficial Ownership and Constructive Ownership of shares of Capital Stock and those provisions with respect to Excess Stock, the following sets forth the designation, preference, limitation as to dividends, voting, and other rights of the Series B Preferred Stock (defined below) of the Corporation. Terms that are used and not otherwise defined in this Item (ii) have the meanings ascribed to them elsewhere in these Amended and Restated Articles of Incorporation or, if not so defined, their conventional meanings.

(a) There is hereby established a series of Preferred Stock designated "Series B NonParticipating Convertible Preferred Stock," (the "Series B Preferred Stock"), which shall initially consist of 40,000,000 authorized shares, subject to one or more increases in the authorized shares of the series by a further amendment(s) to these Amended and Restated Articles of Incorporation to permit the issuance of additional shares upon the issuance of additional Units (defined below) to Registered Unitholders (defined below) and to accommodate stock dividends or stock splits as provided below.

(b) All shares of Series B Preferred Stock purchased, exchanged, or otherwise acquired by the Corporation or that are converted into Common Stock shall be restored to the status of authorized but unissued shares of Preferred Stock.

(c) Except upon the dissolution, liquidation, or winding up of the Corporation, the Series B Preferred Stock shall have no right to any assets of the Corporation, and (except as expressly set forth in this Item (ii)) shall have no right to cash dividends or distributions (from whatever source), but shall have the preference rights upon dissolution, liquidation, and winding up that are set forth in this Item (ii) of this Section 2. The Series B Preferred Stock ranks (i) junior to the Series A Preferred Stock and junior to any Parity Preferred Stock or Senior Preferred Stock (the Series A Preferred Stock, the Parity Preferred Stock, and the Senior Preferred Stock are collectively referred to as the "Series B Senior Preferred Stock"), (ii) pari passu with any other series of Preferred Stock hereafter duly established by the Board of Directors of the Corporation, the terms of which specifically provide that such series shall rank pari passu with the Series B Preferred Stock as to the distribution of assets upon liquidation (the "Series B Parity Preferred Stock"), and (iii) prior to any other class or series of Capital Stock, including, without limitation, the Common Stock of the Corporation, whether now existing or hereafter created (collectively, the "Series B Junior Stock"). If shares of Common Stock or other securities are distributed on the Common Stock or other voting Capital Stock (as a stock dividend or otherwise) (a "Voting Stock Dividend"), then each share of Series B Preferred Stock shall receive a distribution of the number of shares (or warrants or rights to acquire shares, as the case may be) of Series B Preferred Stock that would then be necessary to preserve the relative voting power of the Series B Preferred Stock (i.e., in relation to the voting power of all outstanding shares of voting Capital Stock) that existed prior to the Voting Stock Dividend.

(d) Subject to the rights of the Series B Senior Preferred Stock, upon any voluntary or involuntary dissolution, liquidation, or winding up of the affairs of the Corporation, and before any distribution of assets shall be made in respect of any Series B Junior Stock, the holders of the Series B Preferred Stock shall be entitled to be paid out of the assets of the Corporation legally available for distribution to its shareholders a liquidation preference of $0.001 per share in cash (or property having a fair market value as determined by the Board of Directors valued at $0.001 per share). After payment of the full amount of the liquidating distributions to which they are entitled, the holders of Series B Preferred Stock shall have no right or claims to any of the remaining assets of the Corporation.

(e) The Series B Preferred Stock has no stated maturity and shall not be subject to redemption; however, the foregoing shall not be a restriction on the Corporation's otherwise lawful

7 redemption of shares of Series B Preferred Stock on a consensual basis with each holder of the shares to be redeemed.

(f) (1) The Series B Preferred Stock is convertible, and will be automatically converted under the circumstances described below, into Common Stock at a conversion ratio of 14,000:1; i.e., each 14,000 shares of Series B Preferred Stock may be converted into one share of Common Stock. In lieu of issuing less than a full share (a "fractional share") of Common Stock upon the conversion of fewer than 14,000 shares (or an integral multiple of 14,000 shares) of Series B Preferred Stock, the Corporation shall redeem the shares of Series B Preferred Stock that would otherwise be convertible into a fractional share of Common Stock (the "Scrip Shares"), and from and after the date of the conversion, the Scrip Shares shall cease to be outstanding shares of Series B Preferred Stock, shall not constitute any other class of Capital Stock, and shall entitle the holder only to receive the cash redemption price, as provided below.

(2) The Corporation will initially issue the Series B Preferred Stock to each Person who, on the initial date of issuance, is a Registered Unitholder at the rate of one share for each Unit held by such Registered Unitholder, if such Registered Unitholder subscribes for the shares and pays to the Corporation an amount equal to the product of $0.001 multiplied by the number of shares of Series B Preferred Stock to be issued to him. Shares of Series B Preferred Stock may be issued only in certificated, fully registered form and may be issued only to Registered Unitholders. The Corporation may issue fractional shares of Series B Preferred Stock. Following the initial issuance of the Series B Preferred Stock, each Registered Unitholder acquiring one or more newly issued Units shall be entitled to receive from the Corporation shares of Series B Preferred Stock equal in number to the number of newly issued Units acquired by such Registered Unitholder, provided that the Registered Unitholder subscribes for the shares and pays to the Corporation an amount equal to the product of $0.001 multiplied by the number of shares of Series B Preferred Stock to be issued to him. Except as provided below, a holder of shares of Series B Preferred Stock may freely effect a transfer of the shares to any Person (subject to the Transfer being in compliance with, or (to the satisfaction of the Corporation) exempt from, applicable securities laws and regulations). Upon a Registered Unitholder's Transfer of one or more Units to another Registered Unitholder, then (to the extent of the transferring Registered Unitholder's then ownership of Series B Preferred Stock) the transferring Registered Unitholder shall be deemed to have transferred to the transferee of the Units (i) shares of Series B Preferred Stock equal in number to the number of transferred Units or if, after giving effect to the Unit Transfer, the transferring Registered Unitholder will cease to own any Units, (ii) all of the transferring Registered Unitholder's shares of Series B Preferred Stock. Notwithstanding the foregoing, a Registered Unitholder shall have the right (which shall be exercised by delivering written notice at the time of the Unit Transfer to the Corporation and the transferee of the Units) to negate the deemed simultaneous Transfer of Series B Preferred Stock. A Registered Unitholder desiring to sell (by exchange or otherwise) Units to the Corporation shall be required to surrender to the Corporation for conversion shares of Series B Preferred Stock equal in number to the number of Units being sold (by exchange or otherwise), but only if and to the extent that, after giving effect to the Corporation's proposed purchase of Units, the number of outstanding shares of Series B Preferred Stock will exceed the aggregate number of Units held by all Registered Unitholders. Shares of Series B Preferred Stock surrendered for conversion as provided in the immediately preceding sentence shall be converted into Common Stock, as provided in subparagraph (1) of this Paragraph (f), upon the Corporation's purchase of the Units of the surrendering Registered Unitholder, and the Corporation shall promptly redeem any resulting Scrip Shares for cash, as provided below. Except as provided above in this subparagraph (f)(2), a holder of Series B Preferred Stock shall have no voluntary conversion rights with respect to the Series B Preferred Stock, but shares of Series B Preferred Stock shall automatically convert into Common Stock as provided in subparagraph (3) of this Paragraph (f).

(3) After giving effect to a Transfer of shares of Series B Preferred Stock to a Registered Unitholder, the transferee Registered Unitholder is permitted to own shares of Series B Preferred Stock up to (i) the number of Units then owned by such transferee Registered Unitholder or (ii) 5% of the outstanding shares of Series B Preferred Stock, whichever is greater (any shares in excess of a transferee Registered Unitholder's permitted ownership of Series B Preferred

8 Stock are referred to as the "Disproportionate Shares"). After giving effect to a Transfer of shares of Series B Preferred Stock to any Person who is not a Registered Unitholder, the transferee is permitted to own up to 5% of the outstanding shares of Series B Preferred Stock (any shares held by a transferee of Series B Preferred Stock who is not a Registered Unitholder in excess of such 5% limit are referred to as the "Greater than 5% Shares"). Upon a Transfer of Series B Preferred Stock resulting in the transferee holding Disproportionate Shares or Greater than 5% Shares, as applicable, the Disproportionate Shares or Greater than 5% Shares, as applicable, shall automatically convert into Common Stock as provided in subparagraph (1) of this Paragraph (f) without action on the part of anyone, and the Corporation shall promptly redeem any resulting Scrip Shares for cash, as provided below. Upon any such automatic conversion, each certificate evidencing converted shares of Series B Preferred Stock shall instead represent the whole number of shares of Common Stock into which such shares of Series B Preferred Stock were converted and the right to receive the cash redemption payment for any Scrip Shares evidenced by such certificate until such certificate is surrendered to the Corporation for cancellation in exchange for a Common Stock certificate and the redemption price of the Scrip Shares (if any).

(4) Upon conversion of any shares of Series B Preferred Stock, no payment or adjustment shall be made on account of dividends declared and payable to holders of Common Stock of record on a date prior to the date of conversion.

(5) As soon as practicable on or after the date of conversion of shares of Series B Preferred Stock and the surrender to the Corporation of the certificate(s) evidencing the converted shares, the Corporation will issue and deliver to or at the direction of the converting shareholder a certificate(s) for the whole number of shares of Common Stock issuable upon such conversion. The Corporation shall redeem Scrip Shares resulting from a voluntary or automatic conversion of Series B Preferred Stock for a cash payment equal to the fair value of the fractional share of Common Stock into which the Scrip Shares would otherwise be convertible (the fair value shall be the product of the relevant fraction multiplied by the closing price of the Common Stock on the trading date next preceding the date of conversion on the principal national securities exchange on which the Common Stock is listed (or the average of the high and low prices of the Common Stock on such date on the principal national market system on which the Common Stock is traded) or (if the Common Stock is not so listed or traded) the fair value of the Common Stock on such date as determined by the Corporation's Board of Directors). The Corporation shall be responsible for any stamp or other issuance taxes payable upon the issuance of Common Stock in exchange for surrendered or automatically converted shares of Series B Preferred Stock.

(g) (1) On all matters with respect to which shareholders of the Corporation vote, each share of Series B Preferred Stock shall be entitled to one vote. On all matters with respect to which the Series B Preferred Stock is entitled to vote as a separate class, including the nomination of directors pursuant to subparagraph (2) of this Paragraph (g), the action shall be determined by the vote (which may be by non-unanimous written consent) of a majority of the outstanding shares of Series B Preferred Stock entitled to vote. On all other matters, including the election of directors, the Series B Preferred Stock will vote as a single class with all other Capital Stock entitled to vote.

(2) With respect to each annual meeting of the Corporation's shareholders, commencing with the annual meeting of the Corporation's shareholders to be held in 1999 (the "1999 Annual Meeting"), the holders of shares of Series B Preferred Stock shall have the right, voting as a separate class, to designate nominees for election as directors of the Corporation and to have such nominees included as such in the Corporation's proxy statement and ballots (or, if none, in a specially prepared proxy statement and ballots) submitted to the shareholders of the Corporation entitled to vote in a timely manner prior to the annual meeting. The Corporation shall use all reasonable efforts, consistent with the Board of Directors' exercise of its fiduciary duties, to cause the

9 election of the nominees designated by the holders of Series B Preferred Stock. With respect to the 1999 Annual Meeting, the holders of Series B Preferred Stock shall have the right to designate four nominees. With respect to each succeeding annual meeting of shareholders, the number of nominees to be designated by the holders of Series B Preferred Stock (the "Base Number of Series B Nominees") shall be equal to the difference between (i) four and (ii) the number of directors whose terms commenced prior to and will continue after such meeting and who were nominated to serve such terms by the holders of Series B Preferred Stock, voting as a separate class. The Base Number of Series B Nominees calculated as set forth in the immediately preceding sentence shall be reduced (i) by one, if as of the record date for determining the shareholders entitled to vote for the election of directors at the relevant annual meeting (the "Record Date"), the Registered Unitholders collectively own less than 25% (but at least 15%) of the Fully Diluted Common Stock of the Corporation, (ii) by two, if as of the Record Date, the Registered Unitholders collectively own less than 15% (but at least 10%) of the Fully Diluted Common Stock of the Corporation, (iii) by three, if as of the Record Date, the Registered Unitholders collectively own less than 10% (but at least 5%) of the Fully Diluted Common Stock of the Corporation, and (iv) to zero, if as of the Record Date, the Registered Unitholders collectively own less than 5% of the Fully Diluted Common Stock of the Corporation. For purposes of the immediately preceding sentence, (i) "Fully Diluted Common Stock of the Corporation" means all shares of Common Stock issued and outstanding on the relevant Record Date, plus all shares of Common Stock issuable upon the exercise of vested employee stock options to acquire Common Stock and issuable upon the exchange of Units owned by the Registered Unitholders (assuming a 1:1 exchange ratio and calculated without regard to limitations imposed on the ability or rights of certain Registered Unitholders to exchange Units for Common Stock), and (ii) the Registered Unitholders shall be deemed to "collectively own" all shares of Common Stock that they own in fact, that they have the right to acquire upon the exercise of vested employee stock options, and that would be issued upon the exchange (without regard to limitations imposed on the ability or rights of certain Registered Unitholders to exchange Units for Common Stock) of all outstanding Units (and Units issuable upon the exercise of options to acquire Units) held by the Registered Unitholders.

(h) At all times when the holders of Series B Preferred Stock, voting as a separate class, are entitled to designate nominees for election as directors of the Corporation, (i) the Board of Directors shall consist of nine directors (other than during any vacancy caused by the death, resignation, or removal of a director), plus the number of directors that any series of Preferred Stock, voting separately as a class, has the right to elect because of the Corporation's default in the payment of preferential dividends due on such series, and (ii) a majority of the directors shall be "independent" (for these purposes, an individual shall be deemed "independent" if such individual is neither an officer nor an employee of the Corporation or any of its direct or indirect subsidiaries). At such time as the holders of Series B Preferred Stock no longer have the right to designate any nominees for election as directors of the Corporation, the size of the Board of Directors shall be as determined in accordance with the provisions of the By-Laws of the Corporation.

(i) For purposes of this Item (ii) of this Subsection (c) of this Section 2 of this Article III, the following terms have the indicated meanings:

(1) "Registered Unitholder" means a Person, other than the Corporation, (i) who at the relevant time is reflected in the records of The Taubman Realty Group Limited Partnership as a partner in such partnership (or who as the result of a Transfer of Units is being admitted as a partner in such partnership) or (ii) who is (or upon completion of the relevant Transfer (including, for these purposes, the exercise of an option to acquire a Unit) will become) a beneficial owner of Units.

(2) "Units" means Units of Partnership Interest in The Taubman Realty Group Limited Partnership (and its successors), and any securities into which such Units of Partnership Interest (as a class) are converted or for which such Units (as a class) are exchanged, whether by merger, reclassification, or otherwise. All references in this Item (ii) of this Subsection (c) of this Section

10 of this Article III to numbers of Units shall be adjusted to reflect any splits, reverse splits, or reclassifications of Units of Partnership Interest.

(j) As long as shares of Series B Preferred Stock remain outstanding, the Corporation shall not, without the affirmative vote or consent of the holders of a majority of the outstanding shares of Series B Preferred Stock (voting as a separate class):

(1) create, authorize, or issue any securities or any obligation or security convertible into or evidencing the right to purchase any such securities, the issuance of which could adversely and (relative to the other outstanding Capital Stock) disparately affect the voting power or voting rights of the Series B Preferred Stock or the holders of Series B Preferred Stock (including the rights under Paragraph (g) of this Item (ii) of this Subsection (c) of this Section 2 of this Article III, and disregarding, for these purposes, the right of any series of Preferred Stock, voting as a separate class, to elect directors of the Corporation as the result of the Corporation's default in the payment of a preferential dividend to which the holders of such series of Preferred Stock are entitled);

(2) amend, alter, or repeal the provisions of these Amended and Restated Articles of Incorporation, whether by merger, consolidation, or otherwise, in a manner that could adversely affect the voting power or voting rights of the Series B Preferred Stock or the holders of Series B Preferred Stock (including the rights under Paragraph (g) of this Item (ii) of this Subsection (c) of this Section 2 of this Article III, and disregarding, for these purposes, the right of any series of Preferred Stock, voting as a separate class, to elect directors of the Corporation as the result of the Corporation's default in the payment of a preferential dividend to which the holders of such series of Preferred Stock are entitled);

(3) be a party to a material transaction (including, without limitation, a merger, consolidation, or share exchange) (a "Series B Transaction") if the Series B Transaction could adversely and (relative to the other outstanding Capital Stock) disparately affect the voting power or voting rights of the Series B Preferred Stock or the holders of Series B Preferred Stock (including the rights under Paragraph (g) of this Item (ii) of this Subsection (c) of this Section 2 of this Article III, and disregarding, for these purposes, the right of any series of Preferred Stock, voting as a separate class, to elect directors of the Corporation as the result of the Corporation's default in the payment of a preferential dividend to which the holders of such series of Preferred Stock are entitled). The provisions of this subparagraph (3) shall apply to successive Series B Transactions; or

(4) issue any shares of Series B Preferred Stock to anyone other than a Registered Unitholder as provided in Paragraph (c) or subparagraph (f)(2) of this Item (ii).

(d) Restrictions on Transfer.

(i) Definitions. The following terms shall have the following meanings for purposes of these Amended and Restated Articles of Incorporation:

"Affiliate" and "Affiliates" mean, (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 is the sole managing general partner, or which 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 in, or who controls, such Person. The terms "Affiliated" and "Affiliated with" shall have the correlative meanings.

11 the economic or other results of the Person (other than an individual) to which such interest, contract right, or position relates.

"Beneficial Ownership" means ownership of shares of Capital Stock (including Capital Stock that may be acquired upon conversion of Debentures) (i) by a Person who owns such shares of Capital Stock in his own name or is treated as an owner of such shares of Capital Stock constructively through the application of Section 544 of the Code, as modified by Sections 856(h)(1)(B) and 856(h)(3)(A) of the Code; or (ii) by a person who falls within the definition of "Beneficial Owner" under Section 776(4) of the Act. The terms "Beneficial Owner", "Beneficially Owns" and "Beneficially Owned" shall have the correlative meanings.

"Capital Stock" means the Common Stock and the Preferred Stock, including shares of Common Stock and Preferred Stock that have become Excess Stock.

"Charitable Proceeds" means the amounts due from time to time to the Designated Charity, consisting of (i) dividends or other distributions, including capital gain distributions (but not including liquidating distributions not otherwise within the definition of Excess Liquidation Proceeds), paid with respect to Excess Stock, (ii) in the case of a sale of Excess Stock, the excess, if any, of the Net Sales Proceeds over the amount due to the Purported Transferee as determined under Item (iii)(b) of Subsection (e) of this Section 2 of this Article III, and (iii) in the case of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the Excess Liquidation Proceeds.

"Code" means the Internal Revenue Code of 1986, as amended from time to time.

"Constructive Ownership" means ownership of shares of Capital Stock (including Capital Stock that may be acquired upon conversion of Debentures) by a Person who owns such shares of Capital Stock in his own name or would be treated as an owner of such shares of Capital Stock constructively through the application of Section 318 of the Code, as modified by Section 856 (d)(5) of the Code. The terms "Constructive Owner", "Constructively Owns" and "Constructively Owned" shall have the correlative meanings.

"Control(s)" (and its correlative 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 Person or 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.

"Debentures" means any convertible debentures or other convertible debt securities issued by the Corporation from time to time.

"Demand" means the written notice to the Purported Transferee demanding delivery to the Designated Agent of (i) all certificates or other evidence of ownership of shares of Excess Stock and (ii) Excess Share Distributions. Any reference to "the date of the Demand" means the date upon which the Demand is mailed or otherwise transmitted by the Corporation.

"Designated Agent" means the agent designated by the Board of Directors, from time to time, to act as attorney-in-fact for the Designated Charity and to take delivery of certificates or other evidence of ownership of shares of Excess Stock and Excess Share Distributions from a Purported Transferee.

"Designated Charity" means any one or more organizations described in Sections 501(c)(3) and 170(c) of the Code, as may be designated by the Board of Directors from time to time to receive any Charitable Proceeds.

"Equity Security" has the meaning ascribed to it in the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations thereunder (and any successor laws, rules and regulations of similar import).

"Excess Liquidation Proceeds" means, with respect to shares of Excess Stock, the excess, if any, of (i) the amount which would have been due to the Purported Transferee pursuant to

12 Subsection (a)(ii) of this Section 2 of this Article III with respect to such stock in the case of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation if the Transfer had been valid under Item (ii) of this Subsection (d) of this Section 2 of this Article III, over (ii) the amount due to the Purported Transferee as determined under Item (iii)(b)(2) of Subsection (e) of this Section 2 of this Article III.

"Excess Share Distributions" means dividends or other distributions, including, without limitation, capital gain distributions and liquidating distributions, paid with respect to shares of Excess Stock.

"Excess Stock" means shares of Common Stock and shares of Preferred Stock that have been automatically converted to Excess Stock pursuant to the provisions of Item (iii) of this Subsection (d) of this Section 2 of this Article III, and which are subject to the provisions of Subsection (e) of this Section 2 of this Article III.

"Existing Holder" means (i) the General Motors Hourly-Rate Employes Pension Trust, (ii) the General Motors Salaried Employes Pension Trust (such trusts referred to in (i) or (ii) are hereinafter referred to as "GMPTS"), (iii) the AT&T Master Pension Trust, (iv) any nominee of the foregoing, and (v) any Person to whom an Existing Holder transfers Beneficial Interest of Regular Capital Stock if (x) the result of such transfer would be to cause the transferee to Beneficially Own shares of Regular Capital Stock in excess of the greater of the Ownership Limit or any pre-existing Existing Holder Limit with respect to such transferee (such excess being herein referred to as the "Excess Amount") and (y) the transferor Existing Holder, by notice to the Corporation in connection with such transfer, designates such transferee as a successor Existing Holder (it being understood that, upon any such transfer, the Existing Holder Limit for the transferor Existing Holder shall be reduced by the Excess Amount and the then applicable Ownership Limit or Existing Holder Limit for the transferee Existing Holder shall be increased by such Excess Amount).

"Existing Holder Limit" (i) for any Existing Holder who is an Existing Holder by virtue of Clauses (i) and (ii) of the definition thereof means the greater of (x) 9.9% of the outstanding Capital Stock, reduced (but not below the Ownership Limit) by any Excess Amount transferred in accordance with clause (v) of the definition of Existing Holder and (y) 4,365,713 shares of Regular Capital Stock (as adjusted to reflect any increase in the number of outstanding shares as the result of a stock dividend or any increase or decrease in the number of outstanding shares resulting from a stock split or reverse stock split), reduced (but not below the Ownership Limit) by any Excess Amount transferred in accordance with clause (v) of the definition of Existing Holder, (ii) for any Existing Holder who is an Existing Holder by virtue of Clause (iii) of the definition thereof means the greater of (x) 13.74% of the outstanding Capital Stock, reduced (but not below the Ownership Limit) by any Excess Amount transferred in accordance with clause (v) of the definition of Existing Holder and (y) 6,059,080 shares of Regular Capital Stock (as adjusted to reflect any increase in the number of outstanding shares as the result of a stock dividend or any increase or decrease in the number of outstanding shares resulting from a stock split or reverse stock split), reduced (but not below the Ownership Limit) by any Excess Amount transferred in accordance with Clause (v) of the definition of Existing Holder, (iii) for any Existing Holder who is an Existing Holder by virtue of Clause (iv) of the definition thereof means the percentage of the outstanding Capital Stock or the number of shares of the outstanding Regular Capital Stock that the Beneficial Owner for whom the Existing Holder is acting as nominee is permitted to own under this definition, and (iv) for any Existing Holder who is an Existing Holder by virtue of Clause (v) of the definition thereof means the greater of (x) a percentage of the outstanding Capital Stock equal to the Ownership Limit or pre-existing Existing Holder Limit applicable to such Person plus the Excess Amount transferred to such Person pursuant to clause (v) of the definition of Existing Holder and (y) the number of shares of outstanding Regular Capital Stock equal to the Ownership Limit or pre-existing Existing Holder Limit applicable to such Person plus the Excess Amount transferred to such Person pursuant to clause (v) of the definition of Existing Holder.

13 "Family Trust" means, with respect to an 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 or not a trust is a Family Trust, the fact that one or more of the beneficiaries (but not the sole beneficiary) of the trust includes a Person or Persons, other than a member of such individual's Immediate Family, entitled to a distribution after the death of the settlor if he, she, it, or they shall have survived the settlor of such trust 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 that is a member of the bar of any state in the United States.

"Immediate Family" means, with respect to a Person, (i) 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).

"Look Through Entity" means any Person that (i) is not an individual or an organization described in Sections 401(a), 501(c)(17), or 509(a) of the Code or a portion of a trust permanently set aside or to be used exclusively for the purposes described in Section 642(c) of the Code or a corresponding provision of a prior income tax law, and (ii) provides the Corporation with (a) a written affirmation and undertaking, subject only to such exceptions as are acceptable to the Corporation in its sole discretion, that (x) it is not an organization described in Sections 401(a), 501(c)(17) or 509(a) of the Code or a portion of a trust permanently set aside or to be used exclusively for the purposes described in Section 642(c) of the Code or a corresponding provision of a prior income tax law, (y) after the application of the rules for determining stock ownership, as set forth in Section 544(a) of the Code, as modified by Sections 856(h)(1)(B) and 856(h)(3)(A) of the Code, no "individual" would own, Beneficially or Constructively, more than the then-applicable Ownership Limit, taking into account solely for the purpose of determining such "individual's" ownership for the purposes of this clause (y) (but not for determining whether such "individual" is in compliance with the Ownership Limit for any other purpose) only such "individual's" Beneficial and Constructive Ownership derived solely from such Person and (z) it does not Constructively Own 10% or more of the equity of any tenant with respect to real property from which the Corporation or TRG receives or accrues any rent from real property, and (b) such other information regarding the Person that is relevant to the Corporation's qualifications to be taxed as a REIT as the Corporation may reasonably request.

"Market Price" means, with respect to any class or series of shares of Regular Capital Stock, the last reported sales price of such class or series of shares reported on the New York Stock Exchange on the trading day immediately preceding the relevant date, or if such class or series of shares of Regular Capital Stock is not then traded on the New York Stock Exchange, the last reported sales price of such class or series of shares on the trading day immediately preceding the relevant date as reported on any exchange or quotation system over which such class or series of shares may be traded, or if such class or series of shares of Regular Capital Stock is not then traded over any exchange or quotation system, then the market price of such class or series of shares on the relevant date as determined in good faith by the Board of Directors of the Corporation.

"Net Sales Proceeds" means the gross proceeds received by the Designated Agent upon a sale of Regular Capital Stock that has become Excess Stock, reduced by (i) all expenses (including, without limitation, any legal expenses or fees) incurred by the Designated Agent in obtaining possession of (x) the certificates or other evidence of ownership of the Regular Capital Stock that had become Excess Stock and (y) any Excess Share Distributions, and (ii) any expenses incurred in selling or transferring such shares (including, without limitation, any brokerage fees, commissions, stock transfer taxes or other transfer fees or expenses).

14 "Ownership Limit" means 8.23% of the value of the outstanding Capital Stock of the Corporation.

"Person" means (a) an individual, corporation, partnership, estate, trust (including a trust qualified under Section 401(a) or 501(c)(17) of the Code), a portion of a trust permanently set aside for or to be used exclusively for the purposes described in Section 642(c) of the Code, association, private foundation within the meaning of Section 509(a) of the Code, joint stock company or other entity and (b) also includes a group as that term is used for purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations thereunder (and any successor laws, rules and regulations of similar import).

"Purported Transferee" means, with respect to any purported Transfer which results in Excess Stock, the purported beneficial transferee for whom the shares of Regular Capital Stock would have been acquired if such Transfer had been valid under Item (ii) of this Subsection (d) of this Section 2 of this Article III.

"Regular Capital Stock" means shares of Common Stock and Preferred Stock that are not Excess Stock.

"REIT" means a Real Estate Investment Trust defined in Section 856 of the Code.

"Transfer" means any sale, transfer, gift, assignment, devise or other disposition of Capital Stock, (including (i) the granting of any option or entering into any agreement for the sale, transfer or other disposition of Capital Stock or (ii) the sale, transfer, assignment or other disposition of any securities or rights convertible into or for Capital Stock), whether voluntary or involuntary, whether of record or beneficial ownership, and whether by operation of law or otherwise.

(ii) Restriction on Transfers.

(a) Except as provided in Item (viii) of this Subsection (d) of this Section 2 of this Article III, no Person (other than an Existing Holder) shall Beneficially Own or Constructively Own shares of Capital Stock having an aggregate value in excess of the Ownership Limit, and No Existing Holder shall Beneficially Own or Constructively Own shares of Capital Stock in excess of the Existing Holder Limit for such Existing Holder.

(b) Except as provided in Item (viii) of this Subsection (d) of this Section 2 of this Article III, any Transfer that, if effective, would result in any Person (other than an Existing Holder) Beneficially Owning or Constructively Owning shares of Regular Capital Stock having an aggregate value in excess of the Ownership Limit shall be void ab initio as to the Transfer of such shares which would be otherwise Beneficially Owned or Constructively Owned by such Person in excess of the Ownership Limit, and the intended transferee shall acquire no rights in such shares.

(c) Except as provided in Item (viii) of this Subsection (d) of this Section 2 of this Article III, any Transfer that, if effective, would result in any Existing Holder Beneficially Owning or Constructively Owning shares of Regular Capital Stock in excess of the applicable Existing Holder Limit shall be void ab initio as to the Transfer of such shares which would be otherwise Beneficially Owned or Constructively Owned by such Existing Holder in excess of the applicable Existing Holder Limit, and such Existing Holder shall acquire no rights in such shares.

(d) Except as provided in Item (viii) of this Subsection (d) of this Section 2 of this Article III, any Transfer that, if effective, would result in the Capital Stock being beneficially owned by fewer than 100 Persons (determined without reference to any rules of attribution) shall be void ab initio as to the Transfer of such shares which would be otherwise beneficially owned by the transferee, and the intended transferee shall acquire no rights in such shares.

(e) Any Transfer that, if effective, would result in the Corporation being "closely held" within the meaning of Section 856(h) of the Code shall be void ab initio as to the Transfer of the shares of

15 Regular Capital Stock which would cause the Corporation to be "closely held" within the meaning of Section 856(h) of the Code, and the intended transferee shall acquire no rights in such shares.

(f) In determining the shares which any Person Beneficially Owns (or would Beneficially Own following a purported Transfer) or Constructively Owns (or would Constructively Own following a purported Transfer) for purposes of applying the limitations contained in Paragraphs (a), (b), (c), (d) and (e) of this Item (ii) of this Subsection (d) of this Article III:

(1) shares of Capital Stock that may be acquired upon conversion of Debentures Beneficially Owned or Constructively Owned by such Person, but not shares of Capital Stock issuable upon conversion of Debentures held by others, are deemed to be outstanding.

(2) a pension trust shall be treated as owning all shares of Capital Stock (including Capital Stock that may be acquired upon conversion of Debentures) as are (x) owned in its own name or with respect to which it is treated as an owner constructively through the application of Section 544 of the Code as modified by Section 856(h)(1)(B) of the Code but not by Section 856(h)(3)(A) of the Code and (y) owned by, or treated as owned by, constructively through the application of Section 544 of the Code as modified by Section 856(h)(1)(B) of the Code but not by Section 856(h)(3)(A) of the Code, all pension trusts sponsored by the same employer as such pension trust or sponsored by any of such employer's Affiliates. Notwithstanding the foregoing, (y) above shall not apply in the case of either Motors Insurance Corporation and its subsidiaries (collectively, "MIC") or any pension trusts sponsored by the General Motors Corporation, a Delaware corporation ("GMC"), or the American Telephone and Telegraph Company, a New York corporation ("AT&T"), or by any of their respective Affiliates, provided that with respect to MIC and each such pension trust sponsored by GMC, AT&T or any of their respective Affiliates, other than the Existing Holders described in (i) through (iii) in the definition thereof, all of the following conditions are met: (i) each such pension trust is administered, and will continue to be administered, by persons who do not serve in an administrative or other capacity to any other such pension trust sponsored by GMC or any Affiliate of GMC or AT&T or any Affiliate of AT&T, as applicable, including the Existing Holders described in (i) through (iv) in the definition thereof, (it being understood that the fact that any two such pension trusts may have in common one or more, but less than a majority, of the persons having ultimate investment authority for such pension trusts shall not cause such trusts to be treated as one Person, provided that they are otherwise separately administered as hereinbefore described), (ii) day to day investment decisions with respect to MIC are made by a person or persons different than the person or persons who make such decisions for the pension trusts sponsored by GMC or its affiliates, including the Existing Holders described in (i), (ii) and, in respect of (i) and (ii), item (iv) in the definition thereof, (although MIC and the pension trusts sponsored by GMC may have in common the person or persons with ultimate investment authority for such entities), and the investment of MIC in the Corporation does not exceed 2% of the value of the outstanding Capital Stock of the Corporation, (iii) neither MIC nor any such pension trust acts or will act, in concert with MIC, any other pension trust sponsored by GMC or any Affiliate of GMC or AT&T or any Affiliate of AT&T, as applicable, including the Existing Holders described in (i) through (iv) in the definition thereof, with respect to its investment in the Corporation, and (iv) as from time to time requested by the Corporation, MIC and each pension trust shall provide the Corporation with a representation and undertaking in writing to the foregoing effect.

(3) If there are two or more classes of stock then outstanding, the total value of the outstanding Capital Stock shall be allocated among the different classes and series according to the relative value of each class or series, as determined by reference to the Market Price per share of each such class or series, using the date on which the Transfer occurs as the relevant date, or the effective date of the change in capital structure as the relevant date, as appropriate.

(g) If any shares are transferred resulting in a violation of the Ownership Limit or Paragraphs (b), (c), (d) or (e) of this Item (ii) of this Subsection (d) of this Section 2 of this

16 Article III, such Transfer shall be valid only with respect to such amount of shares transferred as does not result in a violation of such limitations, and such Transfer otherwise shall be null and void ab initio.

(iii) Conversion to Excess Stock.

(a) If, notwithstanding the other provisions contained in this Article III, at any time there is a purported Transfer or other change in the capital structure of the Corporation such that any Person (other than an Existing Holder) would Beneficially Own or any Person (other than an Existing Holder) would Constructively Own shares of Regular Capital Stock in excess of the Ownership Limit, or that any Person who is an Existing Holder would Beneficially Own or any Person who is an Existing Holder would Constructively Own shares of Regular Capital Stock in excess of the Existing Holder Limit, then, except as otherwise provided in Item (viii) of this Subsection (d) of this Section 2 of this Article III, such shares of Common Stock or Preferred Stock, or both, in excess of the Ownership Limit or Existing Holder Limit, as the case may be, (rounded up to the nearest whole share) shall automatically become Excess Stock. Such conversion shall be effective as of the close of business on the business day prior to the date of the Transfer or change in capital structure.

(b) If, notwithstanding the other provisions contained in this Article III, at any time, there is a purported Transfer or other change in the capital structure of the Corporation which, if effective, would cause the Corporation to become "closely held" within the meaning of Section 856(h) of the Code then the shares of Common Stock or Preferred Stock, or both, being Transferred which would cause the Corporation to be "closely held" within the meaning of Section 856(h) of the Code or held by a Person in excess of that Person's Ownership Limit or Existing Holder Limit, as applicable (rounded up to the nearest whole share) shall automatically become Excess Stock. Such conversion shall be effective as of the close of business on the business day prior to the date of the Transfer or change in capital structure.

(c) Shares of Excess Stock shall be issued and outstanding stock of the Corporation. The Purported Transferee shall have no rights in such shares of Excess Stock except as provided in Subsection (e) of this Section 2 of this Article III.

(iv) Notice of Restricted Transfer. Any Person who acquires or attempts to acquire shares in violation of Item (ii) of this Subsection (d) of this Section 2 of this Article III, or any Person who is a transferee such that Excess Stock results under Item (iii) of this Subsection (d) of this Section 2 of this Article III, shall immediately give written notice to the Corporation of such event and shall provide to the Corporation such other information as the Corporation may request regarding such Person's ownership of Capital Stock.

(v) Owners Required to Provide Information.

(a) Every Beneficial Owner of more than 5% (or such other percentage, as provided in the applicable regulations adopted under Sections 856 through 859 of the Code) of the outstanding shares of the Capital Stock of the Corporation shall, within 30 days after January 1 of each year, give written notice to the Corporation stating the name and address of such Beneficial Owner, the number of shares Beneficially Owned and Constructively Owned, and a full description of how such shares are held. Every Beneficial Owner shall, upon demand by the Corporation, disclose to the Corporation in writing such additional information with respect to the Beneficial Ownership and Constructive Ownership of the Capital Stock as the Board of Directors deems appropriate or necessary (i) to comply with the provisions of the Code, regarding the qualification of the Corporation as a REIT under the Code, and (ii) to ensure compliance with the Ownership Limit or the Existing Holder Limit.

(b) Any Person who is a Beneficial Owner or Constructive Owner of shares of Capital Stock and any Person (including the shareholder of record) who is holding Capital Stock for a Beneficial Owner or Constructive Owner, and any proposed transferee of shares, upon the determination by the Board of Directors to be reasonably necessary to protect the status of the Corporation as a REIT under the Code, shall provide a statement or affidavit to the Corporation, setting forth the number of

17 shares of Capital Stock already Beneficially Owned or Constructively Owned by such shareholder or proposed transferee and any related person specified, which statement or affidavit shall be in the form prescribed by the Corporation for that purpose.

(vi) Remedies Not Limited. Subject to Subsection (h) of this Section 2 of this Article III, nothing contained in this Article III shall limit the authority of the Board of Directors to take such other action as it deems necessary or advisable (i) to protect the Corporation and the interests of its shareholders in the preservation of the Corporation's status as a REIT, and (ii) to insure compliance with the Ownership Limit and the Existing Holder Limit.

(vii) Determination. Any question regarding the application of any of the provisions of this Subsection (d) of this Section 2 of this Article III, including any definition contained in Item (i) of this Subsection (d) of this Section 2 of this Article III, shall be determined or resolved by the Board of Directors and any such determination or resolution shall be final and binding on the Corporation, its shareholders, and all parties in interest.

(viii) Exceptions. The Board of Directors, upon advice from, or an opinion from, Counsel, may exempt a Person from the Ownership Limit if such Person is a Look Through Entity, provided, however, in no event may any such exception cause such Person's ownership, direct or indirect (without taking into account such Person's ownership of interests in TRG), to exceed 9.9% of the value of the outstanding Capital Stock.

For a period of 90 days following the purchase of Regular Capital Stock by an underwriter that (i) is a Look Through Entity and (ii) participates in a public offering of the Regular Capital Stock, such underwriter shall not be subject to the Ownership Limit with respect to the Regular Capital Stock purchased by it as a part of such public offering.

(e) Excess Stock.

(i) Surrender of Excess Stock to Designated Agent. Within thirty business days of the date upon which the Corporation determines that shares have become Excess Stock, the Corporation, by written notice to the Purported Transferee, shall demand that any certificate or other evidence of ownership of the shares of Excess Stock be immediately surrendered to the Designated Agent (the "Demand").

(ii) Excess Share Distributions. The Designated Agent shall be entitled to receive all Excess Share Distributions. The Purported Transferee of Regular Capital Stock that has become Excess Stock shall not be entitled to any dividends or other distributions, including, without limitation, capital gain distributions, with respect to the Excess Stock. Any Excess Share Distributions paid to a Purported Transferee shall be remitted to the Designated Agent within thirty business days after the date of the Demand.

(iii) Restrictions on Transfer; Sale of Excess Stock.

(a) Excess Stock shall be transferable by the Designated Agent as attorney-in-fact for the Designated Charity. Excess Stock shall not be transferable by the Purported Transferee.

(b) Upon delivery of the certificates or other evidence of ownership of the shares of Excess Stock to the Designated Agent, the Designated Agent shall immediately sell such shares in an arms-length transaction (over the New York Stock Exchange or such other exchange over which the shares of the applicable class or series of Regular Capital Stock may then be traded, if practicable), and the Purported Transferee shall receive from the Net Sales Proceeds, the lesser of:

(1) the Net Sales Proceeds; or

(2) the price per share that such Purported Transferee paid for the Regular Capital Stock in the purported Transfer that resulted in the Excess Stock, or if the Purported Transferee did not give value for such shares (because the Transfer was, for example, through a gift, devise or other transaction), a price per share equal to the Market Price determined using the date of the purported Transfer that resulted in the Excess Stock as the relevant date.

18 (c) If some or all of the shares of Excess Stock have been sold prior to receiving the Demand, such sale shall be deemed to been made for the benefit of and as the agent for the Designated Charity. The Purported Transferee shall pay to the Designated Agent, within thirty business days of the date of the Demand, the entire gross proceeds realized upon such sale. Notwithstanding the preceding sentence, the Designated Agent may grant written permission to the Purported Transferee to retain an amount from the gross proceeds equal to the amount the Purported Transferee would have been entitled to receive had the Designated Agent sold the shares as provided in Item (iii)(b) of this Subsection (e) of this Section 2 of this Article III.

(d) The Designated Agent shall promptly pay to the Designated Charity any Excess Share Distributions recovered by the Designated Agent and the excess, if any, of the Net Sales Proceeds over the amount due to the Purported Transferee as provided in Item (iii)(b) of this Subsection (e) of this Section 2 of this Article III.

(iv) Voting Rights. The Designated Agent shall have the exclusive right to vote all shares of Excess Stock as the attorney-in-fact for the Designated Charity. The Purported Transferee shall not be entitled to vote such shares (except as required by applicable law). Notwithstanding the foregoing, votes erroneously cast by a Prohibited Transferee shall not be invalidated in the event that the Corporation has already taken irreversible corporate action to effect a reorganization, merger, sale or dissolution of the Corporation.

(v) Rights Upon Liquidation. In the event of any voluntary or involuntary liquidation, dissolution or winding up of, or any distribution of the assets of the Corporation, a Purported Transferee shall be entitled to receive the lesser of (i) that amount which would have been due to such Purported Transferee had the Designated Agent sold the shares of Excess Stock as provided in Item (iii)(b) of this Subsection (e) of this Section 2 of this Article III and (ii) that amount which would have been due to the Purported Transferee if the Transfer had been valid under Item (ii) of Subsection (d) of this Section 2 of this Article III, determined (A) in the case of Common Stock, pursuant to Subsection (a)(ii) of this Section 2 of this Article III, and (B) in the case of Preferred Stock, pursuant to the provisions of these Amended and Restated Articles of Incorporation, amended as authorized by Section 1 of this Article III, which sets forth the liquidation rights of such class or series of Preferred Stock. With respect to shares of Excess Stock, a Purported Transferee shall not have any rights to share in the assets of the Corporation upon the liquidation, dissolution or winding up of the Corporation other than the right to receive the amount determined in the preceding sentence and shall not be entitled to any preference or priority (as a creditor of the Corporation) over the holders of the shares of Regular Capital Stock. Any Excess Liquidation Proceeds shall be paid to the Designated Charity.

(vi) Action by Corporation to Enforce Transfer Restrictions. If the Purported Transferee fails to deliver the certificates or other evidence of ownership and all Excess Share Distributions to the Designated Agent within thirty business days of the date of Demand, the Corporation shall take such legal action to enforce the provisions of this Article III as may be permitted under applicable law.

(f) Legend. Each certificate for Capital Stock shall bear the following legend:

"The Amended and Restated Articles of Incorporation, as the same may be amended (the "Articles"), impose certain restrictions on the transfer and ownership of the shares represented by this Certificate based upon the percentage of the outstanding shares owned by the shareholder. At no charge, any shareholder may receive a written statement of the restrictions on transfer and ownership that are imposed by the Articles."

(g) Severability. If any provision of this Article III or any application of any such provision is determined to be invalid by any Federal or state court having jurisdiction over the issues, the validity of the remaining provisions shall not be affected and other applications of such provision shall be affected only to the extent necessary to comply with the determination of such court.

(h) New York Stock Exchange Settlement. Nothing contained in these Amended and Restated Articles of Incorporation shall preclude the settlement of any transaction entered into through the facilities of the New

19 York Stock Exchange or of any other stock exchange on which shares of the Common Stock or class or series of Preferred Stock may be listed, or of the Nasdaq National Market (if the shares are quoted on such Market) and which has conditioned such listing or quotation on the inclusion in the Corporation's Amended and Restated Articles of Incorporation of a provision such as this Subsection (h). The fact that the settlement of any transaction is permitted shall not negate the effect of any other provision of this Article III and any transferee in such a transaction shall be subject to all of the provisions and limitations set forth in this Article III.

ARTICLE IV Registered Office and Registered Agent

1. Registered Office.

The address and mailing address of the registered office of the Corporation is 500 North Woodward Avenue, Suite 100, Bloomfield Hills, Michigan 48304.

2. Resident Agent.

The resident agent for service of process on the Corporation at the registered office is Jeffrey H. Miro.

ARTICLE V Plan of Compromise or Reorganization

When a compromise or arrangement or a plan of reorganization of the Corporation is proposed between the Corporation and its creditors or any class of them or between the Corporation and its shareholders or any class of them, a court of equity jurisdiction within the State of Michigan, on application of the Corporation or of a creditor or shareholder thereof, or on application of a receiver appointed for the Corporation, may order a meeting of the creditors or class of creditors or of the shareholders or class of shareholders to be affected by the proposed compromise or arrangement or reorganization, to be summoned in such manner as the court directs. If a majority in number representing 75% in value of the creditors or class of creditors, or of the shareholders or class of shareholders to be affected by the proposed compromise or arrangement or a reorganization, agree to a compromise or arrangement or a reorganization of the Corporation as a consequence of the compromise or arrangement, the compromise or arrangement and the reorganization, if sanctioned by the court to which the application has been made, shall be binding on all the creditors or class of creditors, or on all the shareholders or class of shareholders and also on the Corporation.

ARTICLE VI Directors

For so long as the Corporation has the right to designate, pursuant to The Amended and Restated Agreement of Limited Partnership of TRG (as the same may be amended, the Partnership Agreement"), members of the committee of TRG that have the power to approve or propose all actions, decisions, determinations, designations, delegations, directions, appointments, consents, approvals, selections, and the like to be taken, made or given, with respect to TRG, its business and its properties as well as the management of all affairs of TRG (the "Partnership Committee"), the Board of Directors shall consist of, except during the period of any vacancy between annual meetings of the shareholders, that number of members as are set forth in the By-Laws of the Corporation of which, except during the period of any vacancy between annual meetings of the shareholders, not less than 40% (rounded up to the next whole number) of the members shall be Independent Directors (as hereinafter defined), and, thereafter, the Board of Directors shall consist of, except during the period of any vacancy between annual meetings of the shareholders, that number of members as are set forth in the By-Laws of the Corporation. For purposes of this Article VI, "Independent Director" shall mean an individual who is neither one of the following named persons nor an employee, beneficiary, principal, director, officer or agent of, or a general partner in, or limited partner (owning in excess

20 of 5% of the Beneficial Interest) or shareholder (owning in excess of 5% of the Beneficial Interest) in, any such named Person: (i) for so long as TG Partners Limited Partnership, a Delaware limited partnership, has the right to appoint one or more Partnership Committee members, A. Alfred Taubman and any Affiliate of A. Alfred Taubman or any member of his Immediate Family, (ii) for so long as Taub-Co Management, Inc., a Michigan corporation (formerly The Taubman Company, Inc. ("T-Co")) has the right to appoint one or more Partnership Committee members, T-Co or an Affiliate of T-Co, (iii) for so long as a Taubman Transferee (as hereinafter defined) has the right to appoint one or more Partnership Committee members, a Taubman Transferee, or an Affiliate of such Taubman Transferee, (iv) for so long as GMPTS has the right to appoint one or more Partnership Committee members, GMPTS, General Motors Corporation, or an Affiliate of GMPTS or of General Motors Corporation, and (v) for so long as a GMPTS Transferee (as hereinafter defined) has the right to appoint one or more Partnership Committee members, a GMPTS Transferee or an Affiliate of such GMPTS Transferee. "Taubman Transferee" means a single Person that acquires, pursuant to Section 8.1(b) or Section 8.3(a) of The Partnership Agreement, or upon the foreclosure or like action in respect of a pledge of a partnership interest in TRG, the then (i.e., at the time of such acquisition) entire partnership interest in TRG (excluding, in the case of an acquisition pursuant to Section 8.3(a) of the Partnership Agreement or pursuant to a foreclosure or like action in respect of a pledge of a partnership interest in TRG, the ability of such Person to act as a substitute partner) of A. Alfred Taubman, and any Affiliate of A. Alfred Taubman or any member of his Immediate Family, from one or more such persons or from any Taubman Transferee; provided that the percentage interest in TRG being transferred exceeds 7.7%. "GMPTS Transferee" means a single Person that acquires, pursuant to Section 8.1 (b) or Section 8.3(a) of the Partnership Agreement, or upon the foreclosure or like action in respect of a pledge of a partnership interest in TRG, the then (i.e., at the time of such acquisition) entire such partnership interest in TRG (excluding, in the case of an acquisition pursuant to Section 8.3(a) of the Partnership Agreement or pursuant to a foreclosure or like action in respect of a pledge of partnership interests in TRG, the ability of such Person to act as a substitute partner) of GMPTS or of any GMPTS Transferee; provided that the percentage interest in TRG being transferred exceeds 7.7%.

For so long as the Corporation has the right to designate, pursuant to the Partnership Agreement, any members of the Partnership Committee, the affirmative vote of both a majority of the Independent Directors who do not have a beneficial financial interest in the action before the Board of Directors and a majority of all members of the Board of Directors who do not have a beneficial financial interest in the action before the Board of Directors is required for the approval of all actions to be taken by the Board of Directors; provided, however, the Corporation may not appoint to the Partnership Committee as a Corporation appointee an individual who does not satisfy the definition of Independent Director in one or more respects without the affirmative vote of all of the Independent Directors then in office. Thereafter, the affirmative vote of a majority of all members of the Board of Directors who do not have a beneficial financial interest in the action before the Board of Directors is required for the approval of all actions to be taken by the Board of Directors. The establishment of reasonable compensation of Directors for services to the Corporation as Directors or officers shall not constitute action in which any Director has a beneficial financial interest.

Subject to the foregoing, a Director shall be deemed and considered in all respects and for all purposes to be a Director of the Corporation, including, without limitation, having the authority to vote or act on all matters, including, without limitation, matters submitted to a vote at any meeting of the Board of Directors or at any meeting of a committee of the Board of Directors, and the application to such Director of Articles VII and VIII of these Amended and Restated Articles of Incorporation, notwithstanding a Purported Transferee's unauthorized exercise of voting rights with respect to such Director's election.

21 ARTICLE VII Limited Liability of Directors

No director of the Corporation shall be liable to the Corporation or its shareholders for monetary damages for a breach of the director's fiduciary duty; provided, however, the foregoing provision shall not be deemed to limit a director's liability to the Corporation or its shareholders resulting from:

(i) a breach of the director's duty of loyalty to the Corporation or its shareholders;

(ii) acts or omissions of the director not in good faith or which involve intentional misconduct or knowing violation of law;

(iii) a violation of Section 551(1) of the Act or;

(iv) a transaction from which the director derived an improper personal benefit.

ARTICLE VIII Indemnification of Officers, Directors, Etc.

1. Indemnification of Directors.

The Corporation shall and does hereby indemnify a person (including the heirs, executors, and administrators of such person) who is or was a party to, or who is threatened to be made a party to, a threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative and whether formal or informal, including, without limitation, an action by or in the right of the Corporation, by reason of the fact that he or she is or was a director of the Corporation, or is or was serving at the request of the Corporation as a director (or in a similar capacity, including serving as a member of the Partnership Committee and of any other committee of TRG) or in any other representative capacity of another foreign or domestic corporation or of or with respect to any other entity (including TRG), whether for profit or not, against expenses, attorneys' fees, judgments, penalties, fines, and amounts paid in settlement actually and reasonably incurred by him or her in connection with the action, suit, or proceeding. This Section 1 of this Article VIII is intended to grant the persons herein described with the fullest protection not prohibited by existing law in effect as of the date of filing this Amended and Restated Articles of Incorporation or such greater protection as may be permitted or not prohibited under succeeding provisions of law.

2. Indemnification of Officers, Etc.

The Corporation has the power to indemnify a person (including the heirs, executors, and administrators of such person) who is or was a party to, or who is threatened to be made a party to, a threatened, pending, or contemplated action, suit, or proceeding, whether civil, criminal, administrative, or investigative and whether formal or informal, including an action by or in the right of the Corporation, by reason of the fact that he or she is or was an officer, employee, or agent of the Corporation or is or was serving at the request of the Corporation as an officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership (including TRG), joint venture, trust or other enterprise, whether for profit or not, against expenses, including attorneys' fees, judgments, penalties, fines, and amounts paid in settlement actually and reasonably incurred by him or her in connection with the action, suit, or proceeding, if the person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation or its shareholders, and with respect to a criminal action or proceeding, if the person had no reasonable cause to believe his or her conduct was unlawful. Unless ordered by a court, an indemnification under this Section 2 of this Article VIII shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the officer, employee, or agent is proper in the circumstances because he or she has met the applicable standard of conduct set forth in this Section 2 of this Article VIII.

22 3. Advancement of Expenses.

The Corporation shall pay the expenses incurred by a person described in Section 1 of this Article VIII in defending a civil or criminal action, suit, or proceeding described in such Section 1 in advance of the final disposition of the action, suit, or proceeding. The Corporation shall pay the expenses incurred by a person described in Section 2 of this Article VIII in defending a civil or criminal action, suit, or proceeding described in such Section 2 in advance of the final disposition of the action, suit, or proceeding upon receipt of an undertaking by or on behalf of such person to repay the expenses if it is ultimately determined that the person is not entitled to be indemnified by the Corporation. Such undertaking shall be by unlimited general obligation of the person on whose behalf advances are made but need not be secured.

Signed and certified as of the 12th day of October, 1998.

/s/ ROBERT S. TAUBMAN ------Robert S. Taubman President and Chief Executive Officer

23 TABLE OF CONTENTS TO RESTATED BY-LAWS OF TAUBMAN CENTERS, INC. (Reflecting amendments through September 30, 1998)

Page ----

Article I -- MEETINGS OF SHAREHOLDERS Section 1.01 Place of Meetings...... 1 Section 1.02 Annual Meeting...... 1 Section 1.03 Special Meetings...... 1 Section 1.04 Notice of Meetings...... 1 Section 1.05 Waiver of Notice...... 1 Section 1.06 Inspectors of Election...... 2 Section 1.07 Quorum and Adjournment...... 2 Section 1.08 Vote of Shareholders...... 2 Section 1.09 Proxies...... 2 Section 1.10 Consents...... 2 Section 1.11 Organization of Shareholders' Meetings...... 3 Article II -- DETERMINATION OF VOTING, DIVIDEND, AND OTHER RIGHTS...... 3 Article III -- DIRECTORS Section 3.01 General Powers...... 3 Section 3.02 Number, Qualifications, and Term of Office... 3 Section 3.03 Place of Meetings...... 4 Section 3.04 Annual Meeting...... 4 Section 3.05 Regular and Special Meetings...... 4 Section 3.06 Quorum and Manner of Action...... 4 Section 3.07 Compensation...... 4 Section 3.08 Removal of Directors...... 5 Section 3.09 Resignations...... 5 Section 3.10 Vacancies...... 5 Section 3.11 Organization of Board Meeting...... 5 Article IV -- COMMITTEES Section 4.01 Committees...... 5 Section 4.02 Regular Meetings...... 5 Section 4.03 Special Meetings...... 5 Section 4.04 Quorum and Manner of Action...... 6 Section 4.05 Records...... 6 Section 4.06 Vacancies...... 6 Article V -- OFFICERS Section 5.01 Officers...... 6 Section 5.02 Term of Office and Resignation...... 6 Section 5.03 Removal of Elected Officers...... 6 Section 5.04 Vacancies...... 7 Section 5.05 Compensation...... 7 Section 5.06 The Chairman of the Board...... 7 Section 5.07 The Vice Chairman of the Board...... 7 Section 5.08 The President...... 7 Section 5.09 The Chief Financial Officer...... 7 Section 5.10 The Vice President...... 7 Section 5.11 The Secretary...... 7 Section 5.12 The Treasurer...... 8

Article VI -- INDEMNIFICATION Section 6.01 Indemnification...... 8 Section 6.02 Advancement of Expenses...... 8 Section 6.03 Indemnification: Insurance...... 8 Section 6.04 Indemnification: Constituent Corporations.... 8 Article VII -- SHARE CERTIFICATES Section 7.01 Form; Signature...... 9 Section 7.02 Transfer Agents and Registrars...... 9 Section 7.03 Transfers of Shares...... 9 Section 7.04 Registered Shareholders...... 9 Section 7.05 Lost Certificates...... 9 Article VIII -- MISCELLANEOUS Section 8.01 Fiscal Year...... 10 Section 8.02 Signatures on Negotiable Instrumental...... 10 Section 8.03 Dividends...... 10 Section 8.04 Reserves...... 10 Section 8.05 Seal...... 10 Section 8.06 Corporation Offices...... 10

Article IX -- AMENDMENTS Section 9.01 Power to Amend...... 10 RESTATED BY-LAWS OF TAUBMAN CENTERS, INC. (Reflecting amendments through September 30, 1998)

ARTICLE I

Meetings of Shareholders

Section 1.01. Place of Meetings.

Annual and special meetings of the shareholders shall be held at such place within or outside the State of Michigan as may be fixed from time to time by the board of directors and stated in the notice of the meeting or in a duly executed waiver of notice thereof.

Section 1.02. Annual Meeting.

The annual meeting of the shareholders for the election of directors and for the transaction of such other business as may properly come before the meeting shall be held on such date as the Chairman of the Board, or the Vice Chairman of the Board or the President or the board of directors shall designate, and at such hour as may be named, in the notice of said meeting. If the election of directors shall not be held on the date so designated for any annual meeting or at any adjournment of such meeting, the board of directors shall cause the election to be held at a special meeting as soon thereafter as it conveniently may be held.

Section 1.03. Special Meetings.

A special meeting of the shareholders may be called at any time and for any purpose or purposes by the Chairman of the Board, the Vice Chairman of the Board, the President, a Vice President or any two directors, or by a shareholder or shareholders holding of record shares entitled to at least twenty-five percent (25%) of all the votes entitled to be cast by the holders of all outstanding capital stock of the corporation entitled to vote at such meeting.

Section 1.04. Notice of Meetings.

A written notice of the place, date, hour, and purposes of each meeting, whether annual or special, and any adjournment thereof, shall be given personally or by mail to each shareholder entitled to vote thereat at least ten (10) but not more than sixty (60) days prior to the meeting unless a shorter time is provided by the Michigan Business Corporation Act and is fixed by the board of directors. The notice of any special meeting shall also state by or at whose direction it is being issued. If, at any meeting, whether annual or special, action is proposed to be taken which would, if taken, entitle shareholders fulfilling requirements of law to receive payment for their shares, the notice of such meeting shall include a statement of that purpose and to that effect. If any notice, as provided in this Section 1.04 is mailed, it shall be directed to the shareholder in a postage prepaid envelope at his address as it appears on the record of shareholders, or, if he shall have filed with the Secretary a written request that notices to him be mailed to some other address, then directed to him at such other address.

Section 1.05. Waiver of Notice.

Notice of meeting need not be given to any shareholder who submits a waiver of notice, signed in person or by proxy, whether before, at or after the meeting. The attendance of any shareholder at a meeting, in person or by proxy, shall constitute a waiver of notice by him except when the shareholder attends such meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Section 1.06. Inspectors of Election.

The board of directors, or any officer or officers duly authorized by the board of directors, in advance of any meeting of shareholders, may appoint one or more inspectors to act at the meeting or any adjournment thereof. If inspectors are not so appointed, the person presiding at the meeting may, and on the request of any shareholder entitled to vote thereat shall, appoint one or more inspectors. In case any person appointed fails to appear or act, the vacancy may be filled by appointment made by the board of directors in advance of the meeting or at the meeting by the chairman of the meeting. Each inspector, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of inspector at such meeting with strict impartiality and according to the best of his ability. The inspectors shall determine the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum, the validity and effect of proxies, and shall receive votes, ballots, or consents, hear and determine all challenges and questions arising in connection with the right to vote, count and tabulate all votes, ballots, or consents, determine the result, and do such acts as are proper to conduct the election or vote with fairness to all shareholders. On request of the person presiding at the meeting or any shareholder entitled to vote thereat, the inspectors shall make a report in writing of any facts or matters found or determined by them and execute a certificate with respect thereto.

Section 1.07. Quorum and Adjournment.

Unless a greater or lesser quorum is provided by statute or in the articles of incorporation, shares entitled to cast a majority of the votes at a meeting constitute a quorum at the meeting. The shareholders present in person or by proxy at the meeting may continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum. By a vote of the shares present, even if less than a quorum, the meeting may be adjourned to another place and time for a period not exceeding thirty (30) days in any one case. At an adjourned meeting at which a quorum shall be present, any business may be transacted that might have been transacted at the meeting as originally called.

Section 1.08. Vote of Shareholders.

Each share of outstanding capital stock shall entitle its holder to the voting rights set forth in the articles of incorporation. All elections of directors shall be by a plurality vote of the shareholders entitled to vote at such meeting of shareholders. Whenever any corporate action is to be taken by vote, other than the election of directors, it shall, except as otherwise required by statute, by the articles of incorporation, or by these by-laws, be authorized by two-thirds (2/3(rds)) of all the votes entitled to be cast by the holders of all outstanding capital stock entitled to vote on the action. Directors shall be elected if approved by a plurality of the votes cast at an election.

Section 1.09. Proxies.

Every shareholder entitled to vote at a meeting of shareholders or to express consent or dissent without a meeting may authorize another person or persons to act for him by proxy. Every proxy must be in writing and signed by the shareholder or his attorney-in-fact. No proxy shall be valid after the expiration of three (3) years from the date thereof unless otherwise provided in the proxy.

Section 1.10. Consents.

Any action required or permitted to be taken by the holders of any class or series of capital stock authorized under the articles of incorporation to vote by non-unanimous written consent may be taken without a meeting, without prior notice, and without a vote, if consents in writing, setting forth the action so taken, are signed by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take the action at a meeting at which all shares entitled to vote on the action were present and voted. The written consents shall bear the date of signature of each shareholder who signs the consent. No written consents shall be effective to take the action referred to unless, within 60 days after the record date for determining shareholders entitled to express consent to or to dissent from a proposal without a

2 meeting, written consents signed by shareholders holding a sufficient number of shares to take the action are delivered to the corporation. Delivery shall be to the corporation's registered office, its principal place of business, or an officer or agent of the corporation having custody of the minutes of the proceedings of its shareholders. Delivery made to the corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. Prompt notice of the taking of the action without a meeting by less than unanimous written consent shall be given to the holders of the relevant class or series of capital stock who would have been entitled to notice of the shareholder meeting if the action had been taken at a meeting and who have not consented in writing.

Section 1.11. Organization of Shareholders' Meetings.

At every meeting of the shareholders, the Chairman of the Board, or in his absence, the Vice Chairman of the Board, or in his absence, the President, or in his absence, a Vice President, or in the absence of the Chairman of the Board, the President and Vice President, a chairman chosen by a majority in interest of the shareholders of the corporation present in person or by proxy and entitled to vote, shall act as chairman; and the Secretary, or in his absence any person appointed by the chairman, shall act as secretary.

ARTICLE II

Determination of Voting, Dividend, and Other Rights

For the purpose of determining the shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or to express consent to or dissent from any proposal without a meeting, or for the purpose of determining shareholders entitled to receive payment of any dividend or the allotment of any rights, or the date when any change or conversion or exchange of capital stock shall go into effect, or for the purpose of any other action, the board of directors may fix, in advance, a date as the record date for any such determination of shareholders. Such date shall not be more than sixty (60) nor less than ten (10) days before the date of any such meeting, nor more than thirty (30) days prior to any other action. If a record date is so fixed, such shareholders and only such shareholders as shall be shareholders of record on that date so fixed shall be entitled to notice of, and to vote at, such meeting and any adjournment thereof, or to express such consent or dissent, or to receive payment of such dividend or such allotment of rights, or otherwise to be recognized as shareholders for the purpose of any other action, notwithstanding any transfer of any shares on the books of the corporation after any such record date so fixed.

ARTICLE III

Directors

Section 3.01. General Powers.

The business and all the powers of the corporation, and the stock, property, and affairs of the corporation, except as otherwise provided by the articles of incorporation, the by-laws, or by statute, shall be managed by the board of directors.

Section 3.02. Number, Qualifications, and Term of Office.

Except when the Corporation's articles of incorporation require the board to consist of a fixed number of directors, the board of directors shall consist of that number of directors established from time to time by the board of directors, provided that the board cannot reduce the number of directors below its then current size except upon the expiration of the term of one or more directors or the death, resignation, or removal of a director. Except as otherwise required by the articles of incorporation, the directors, who need not be shareholders, shall be divided into three classes that shall be as nearly equal in number as is possible. At each annual meeting of shareholders, one class of directors shall be chosen for a full three year term and until their successors shall be duly elected and qualified or, if earlier, until death, resignation or removal.

3 If satisfied immediately following the most recent election or appointment of directors, any requirement under the articles of incorporation or these by-laws regarding the number of directors who must be "independent" shall be deemed to be satisfied until the next annual meeting of shareholders, notwithstanding the occurrence of one or more vacancies on the board of directors occurring between meetings of shareholders.

Section 3.03. Place of Meetings.

Meetings of the board of directors, annual or special, shall be held at any place within or outside the State of Michigan as may from time to time be determined by the board of directors.

Section 3.04. Annual Meeting.

The board of directors shall meet as soon as practicable after each annual election of directors for the purpose of organization, election of officers, and the transaction of other business, on the same day and at the same place at which the shareholders' meeting is held. Notice of such meeting need not be given. Such meeting may be held at such other time and place as shall be specified in a notice to be given as hereinafter provided for special meetings of the board of directors, or according to consent and waiver of notice thereof signed by all directors.

Section 3.05. Regular and Special Meetings.

Regular (i.e., previously scheduled by action of the board of directors) meetings of the board of directors may be held with or without notice. Special meetings of the board of directors shall be held whenever called by any director. Notice of any special meeting, and any adjournment thereof, stating the place, date, hour and purpose of the meeting, shall be mailed to each director, addressed to him at his residence or usual place of business, or shall be sent to him at such place by mail, telegraph, cable, fax or radio, or be delivered personally or by telephone, not later than forty-eight (48) hours prior to the day on which the meeting is to be held. Notice of any meeting of the board of directors need not be given to any director who submits a signed waiver of notice before or after the meeting, or who attends the meeting without protesting, either prior to or at the commencement of such meeting, the lack of notice to him. Unless limited by statute, the articles of incorporation, these by- laws, or the terms of the notice thereof, any and all business may be transacted at any special meeting.

Section 3.06. Quorum and Manner of Action.

A majority of the directors in office at the time of any meeting of the board of directors, present in person, shall be necessary and sufficient to constitute a quorum for the transaction of business. The affirmative vote of a majority of the directors in office shall be required for the approval of all actions to be taken by the board of directors, except as otherwise required by statute or the articles of incorporation and except for adjournment. A majority of the directors present, regardless of whether a quorum is present, may adjourn any meeting to another place and time for a period not exceeding thirty (30) days in any one case. If all of the directors severally or collectively consent in writing to any act taken or to be taken by the corporation, such action shall be valid corporate action as though it had been authorized at a meeting of the board of directors.

Section 3.07. Compensation.

Each independent director shall be paid such directors' fees and fixed sums and expenses for attendance at each annual, regular or special meeting of the board of directors or committees of the board of directors as the board of directors by resolution so determines; provided, however, that nothing herein contained shall be construed to preclude any director from serving the corporation in any other capacity and receiving compensation therefor.

4 Section 3.08. Removal of Directors.

By a vote of two-thirds (2/3(rds)) of all the votes entitled to be cast by the holders of all outstanding capital stock entitled to vote, the shareholders may remove one or more or all of the directors from office for or without cause.

Section 3.09. Resignations.

Any director may resign at any time by giving written notice to the board of directors, the Chairman of the Board, the Vice Chairman, the President, or the Secretary of the corporation. Such resignation shall take effect at the time specified therein; and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

Section 3.10. Vacancies.

Any vacancies occurring on the board of directors by reason of death, resignation, retirement, disqualification, removal, or an increase in the size of the board of directors shall be temporarily filled by the board of directors then in office. Except as provided in the next sentence, unless a successor director is elected by a vote of the shareholders, any director elected by the board of directors to fill a vacancy temporarily shall hold office for the unexpired portion of the term of his predecessor. If a director is elected by the directors in order to fill a vacancy created as a result of an increase in the size of the board of directors, then such director shall have an initial term equal to the remaining term of the class of directors that such director is placed in pursuant to the resolution of the board of directors adopted pursuant to Section 3.02 of these by-laws.

Section 3.11. Organization of Board Meeting.

At each meeting of the board of directors, the Chairman, or in his absence, the Vice Chairman, or in his absence, the President, if he is a director, or in his absence, a director chosen by a majority of the directors present, shall act as chairman of the meeting. The Secretary, or in his absence, any person appointed by the chairman, shall act as secretary of the meeting.

ARTICLE IV

Committees

Section 4.01. Committees.

The corporation may have such committees as the board of directors shall by resolution from time to time determine, which shall have such powers and authority as are designated by the board of directors.

Section 4.02. Regular Meetings.

Regular meetings of a committee shall be held without notice at such time and at such place as shall from time to time be determined by resolution of the committee. In case the day so determined shall be a legal holiday, such meeting shall be held on the next succeeding day, not a legal holiday, at the same hour.

Section 4.03. Special Meetings.

Special meetings of a committee shall be held wherever called by the chairman of the committee. Notice of any special meeting and any adjournment thereof shall be delivered personally, by telephone or fax or mailed to each member, addressed to him at his residence or usual place of business, or be sent to him at such place by telegraph, or be delivered personally, by telephone, or by fax, not later than the second (2nd) day before the day on which the meeting is to be held. Notice of any meeting of a committee need not be given to any member who submits a signed waiver of notice before or after the meeting, or who attends the meeting without protesting prior thereto or at its commencement the lack of notice to him. Unless limited by statute,

5 the articles of incorporation, these by-laws, or the terms of the notice thereof, any and all business may be transacted at any special meeting of the committee.

Section 4.04. Quorum and Manner of Action.

A majority of the members of a committee in office at the time of any regular or special meeting of the committee present in person shall constitute a quorum for the transaction of business. The vote of a majority of the members shall be the act of the committee. Any member of a committee may require that action proposed to be taken by the committee instead be submitted to the board of directors for its consideration and action. A majority of the members present, whether or not a quorum is present, may adjourn any meeting to another time and place. No notice of an adjourned meeting need be given.

Section 4.05. Records.

A committee shall keep minutes of its proceedings and shall submit the same from time to time to the board of directors. The Secretary of the corporation, or in his absence an assistant secretary, shall act as secretary to the committee; or the committee may in its discretion appoint its own secretary.

Section 4.06. Vacancies.

Any newly created memberships and vacancies occurring in a committee shall be filled by resolution adopted by a majority of the entire board of directors.

ARTICLE V

Officers

Section 5.01. Officers.

The elected officers of the corporation shall be a Chairman of the Board, a Vice Chairman of the Board, a President, a Chief Financial Officer, a Secretary, a Treasurer, and, if the board of directors so determines, one or more Vice Presidents. The board of directors may also appoint one or more Assistant Secretaries, one or more Assistant Treasurers, and such other officers and agents as may from time to time appear to be necessary or advisable in the conduct of the affairs of the corporation. Any two or more offices, whether elective or appointive, may be held by the same person, except that an officer shall not execute, acknowledge or verify any instrument in more than one capacity if the instrument is required by law or the articles of incorporation or the by-laws to be executed, acknowledged or verified by two or more officers.

Section 5.02. Term of Office and Resignation.

So far as practicable, all elected officers shall be elected at the first meeting of the board of directors following the annual meeting of shareholders in each year and, except as otherwise hereinafter provided, shall hold office until the first meeting of the board of directors following the next annual meeting of shareholders and until their respective successors shall have been elected or appointed and qualified. All other officers shall hold office during the pleasure of the board of directors. Any elected or appointed officer may resign at any time by giving written notice to the board of directors, the Chairman, the Vice Chairman, the President, the Chief Financial Officer, or the Secretary of the corporation. Such resignation shall take effect at the time specified therein, and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

Section 5.03. Removal of Elected Officers.

Any officer may be removed at any time, with or without cause, by vote at any meeting of the board of directors.

6 Section 5.04. Vacancies.

If any vacancy shall occur in any office for any reason, the board of directors may elect or appoint a successor to fill such vacancy for the remainder of the term.

Section 5.05. Compensation.

The compensation, if any, of all elected or appointed officers and agents of the corporation shall be fixed by the board of directors.

Section 5.06. The Chairman of the Board.

The Chairman of the Board (sometimes herein the "Chairman") shall preside at all meetings of the shareholders and board of directors and shall appoint all standing and special committees as are deemed necessary in the conduct of the business. The Chairman shall exercise any and all powers and perform any and all duties which are required by the by-laws and which the board of directors may additionally confer upon him.

Section 5.07. The Vice Chairman of the Board.

The Vice Chairman of the Board (sometimes herein the "Vice Chairman"), in the absence of the Chairman, shall preside at all meetings of the shareholders and board of directors. The Vice Chairman shall exercise any and all powers and perform any and all duties which are required by the by-laws and which the board of directors may additionally confer upon him.

Section 5.08. The President.

The President shall be the Chief Executive Officer and, if he is a director, in the absence of the Chairman and the Vice Chairman, preside at all meetings of the board of directors; and shall perform such other duties as are usually ascribed to that office. The President shall exercise any and all powers and perform any and all duties which are required by the by-laws and which the board of directors may additionally confer upon him.

Section 5.09. The Chief Financial Officer.

The Chief Financial Officer shall perform all necessary acts and duties in connection with the administration of the financial affairs of the corporation; and shall perform such other duties as are usually ascribed to that office. The Chief Financial Officer shall exercise any and all powers and perform any and all duties which are required by the by-laws and which the board of directors may additionally confer upon him.

Section 5.10. The Vice President.

The Vice President, if any, or if there is more than one Vice President, each Vice President, shall have such powers and discharge such duties as may be assigned to him from time to time by the board of directors.

Section 5.11. The Secretary.

The Secretary shall attend all meetings of the board of directors and the shareholders and shall record all votes and the minutes of all proceedings in a book to be kept for that purpose and shall, when requested, perform like duties for all committees of the board of directors. He shall attend to the giving of notice of all meetings of the shareholders, and special meetings of the board of directors and committees thereof; he shall have custody of the corporate seal, if same is provided, and, when authorized by the board of directors, shall have authority to affix the same to any instrument and, when so affixed, it shall be attested by his signature or by the signatures of the Treasurer or an Assistant Secretary or an Assistant Treasurer. He shall keep an account for all books, documents, papers, and records of the corporation, except those for which some other officer or agent is properly accountable. He shall have authority to sign stock certificates, and shall generally perform all the duties appertaining to the office of secretary of a corporation. In the absence of the Secretary, such person as shall be designated by the President shall perform his duties.

7 Section 5.12. The Treasurer.

The Treasurer shall have the care and custody of all the funds of the corporation and shall deposit the same in such banks or other depositories as the board of directors, or any officer and agent jointly, duly authorized by the board of directors, shall, from time to time, direct or approve. He shall keep a full and accurate account of all monies received and paid on account of the corporation, and shall render a statement of his accounts whenever the board of directors shall require. In addition, he shall generally perform all duties usually appertaining to the office of Treasurer of a corporation. When required by the board of directors, he shall give bonds for the faithful discharge of his duties in such sums and with such sureties as the board of directors shall approve. In the absence of the Treasurer, such person as shall be designated by the Chief Financial Officer shall perform his duties.

ARTICLE VI

Indemnification

Section 6.01. Indemnification.

Subject to and in accordance with the provisions of the corporation's articles of incorporation, the corporation has the power to (and, if so provided in the corporation's articles of incorporation, shall) indemnify any person (and the heirs, executors, and administrators of any such person) against any loss, cost, damage, fine, penalty, or expense (including attorneys' fees) suffered, incurred, assessed, or imposed by reason of the fact that such person is or was a director, officer, employee, or agent of the corporation or is or was serving, at the request of the corporation, as a director, officer, employee, agent, partner, or trustee of another corporation, partnership, joint venture, trust, or other enterprise, or a member of the Partnership Committee.

Section 6.02. Advancement of Expenses.

Subject to and in accordance with the corporation's articles of incorporation, expenses incurred in defending or settling a civil or criminal action, suit, or proceeding to which any person described in Section 6.01 is or was a party, or is or was threatened to be made a party, may (and, if so provided in the corporation's articles of incorporation, shall) be paid by the corporation in advance.

Section 6.03. Indemnification: Insurance.

The corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the corporation or is liable as a director of the corporation, or is or was serving, at the request of the corporation, as a director, officer, partner, trustee, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, or a member of the Partnership Committee against any liability asserted against him and incurred by him in any such capacity or arising out of his status as such, regardless of whether the corporation would have power to indemnify him against such liability under the provisions of this Article VI.

Section 6.04. Indemnification: Constituent Corporations.

For the purposes of this Article VI, references to the corporation include all constituent corporations absorbed in a merger and the resulting or surviving corporation, so that a person who is or was a director or officer of such constituent corporation or is or was serving at the request of such constituent corporation as a director or officer of another corporation, partnership, joint venture, trust, or other enterprise shall (as shall his heirs, executors, and administrators) stand in the same position, under the provisions of this Article, with respect to the resulting or surviving corporation as he would if he had served the resulting or surviving corporation in the same capacity.

8 ARTICLE VII

Share Certificates

Section 7.01. Form; Signature.

The shares of the corporation shall be represented by certificates in such form as shall be determined by the board of directors and shall be signed by the Chairman, Vice Chairman, President or a Vice President and the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer of the corporation, and if a seal has been provided for the corporation, may be sealed with the seal of the corporation or a facsimile thereof. The signatures of the officers upon a certificate may be facsimiles if the certificate is countersigned by a Transfer Agent or registered by a Registrar other than the corporation or its employee. In case any officer who has signed or whose facsimile has been placed upon a certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer at the date of issue.

Section 7.02. Transfer Agents and Registrars.

The board of directors may, in its discretion, appoint one or more banks or trust companies in the State of Michigan and in such other state or states as the board of directors may deem advisable, from time to time, to act as Transfer Agents and Registrars of the shares of the corporation; and upon such appointments being made, no certificate representing shares shall be valid until countersigned by one of such Transfer Agents and registered by one of such Registrars.

Section 7.03. Transfers of Shares.

Transfers of shares shall be made on the books of the corporation only upon written request by the person named in the certificate, or by his attorney lawfully constituted in writing, and upon surrender and cancellation of a certificate or certificates for a like number of shares of the same class, with duly executed assignment and a power of transfer endorsed thereon or attached thereto, and with such proof of the authenticity of the signatures as the corporation or its agents may reasonably require.

Section 7.04. Registered Shareholders.

The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends and other distributions, and to vote as such owner, and to hold liable for calls and assessments the person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by law or contemplated by the articles of incorporation.

Section 7.05. Lost Certificates.

In case any certificate representing shares shall be lost, stolen, or destroyed, the board of directors, or any officer or officers duly authorized by the board of directors, may authorize the issuance of a substitute certificate in place of the certificate so lost, stolen, or destroyed, and may cause or authorize such substitute certificate to be countersigned by the appropriate Transfer Agent and registered by the appropriate Registrar. In each such case the applicant for a substitute certificate shall furnish to the corporation and to such of its Transfer Agents and Registrars as may require the same, evidence to their satisfaction, in their discretion, of the loss, theft, or destruction of such certificate and of the ownership thereof, and also such security or indemnity as may by them be required.

9 ARTICLE VIII

Miscellaneous

Section 8.01. Fiscal Year.

The board of directors from time to time shall determine the fiscal year of the corporation.

Section 8.02. Signatures on Negotiable Instruments.

All bills, notes, checks, or other instruments for the payment of money shall be signed or countersigned by such officers or agents and in such manner as from time to time may be prescribed by resolution of the board of directors, or may be prescribed by any officer or officers, or any officer and agent jointly, duly authorized by the board of directors.

Section 8.03. Dividends.

Except as otherwise provided in the articles of incorporation, dividends upon the shares of the corporation may be declared and paid as permitted by law in such amounts as the board of directors may determine at any annual or special meeting. Dividends may be paid in cash, in property, or in shares of the capital stock of the corporation, subject to the articles of incorporation.

Section 8.04. Reserves.

Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the board of directors from time to time, in its absolute discretion, deems proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the board of directors deems conducive to the interest of the corporation; and in its discretion, the board of directors may decrease or abolish any such reserve.

Section 8.05. Seal.

The board of directors may, but need not, provide a corporate seal which shall consist of two concentric circles between which is the name of the corporation and in the center of which shall be inscribed "SEAL".

Section 8.06. Corporation Offices.

The registered office of the corporation shall be as set forth in the articles of incorporation. The corporation may also have offices in such places as the board of directors may from time to time appoint or the business of the corporation require. Such offices may be outside the State of Michigan.

ARTICLE IX

Amendments

Section 9.01. Power to Amend.

These by-laws may be amended, repealed, or adopted by the shareholders or the board of directors. Any by-law adopted by the board of directors may be amended or repealed by the board of directors or by shareholders entitled to vote thereon as herein provided; and any by-law adopted by the Incorporators or the shareholders may be amended or repealed by the board of directors, except as limited by statute and except when the shareholders have expressly provided otherwise with respect to any particular by-law or by-laws.

10 REVOLVING CREDIT AGREEMENT

dated as of September 21, 1998

among

THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP, as Borrower,

UBS AG, NEW YORK BRANCH, as a Bank

and

UBS AG, NEW YORK BRANCH, as Administrative Agent 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...... 17 SECTION 2.01. The Loans...... 17 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...... 19 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..20 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. Collateral for Loans...... 21 SECTION 2.18. Letters of Credit...... 24

ARTICLE III YIELD PROTECTION; ILLEGALITY; ETC...... 25 SECTION 3.01. Additional Costs...... 25 SECTION 3.02. Limitation on Types of Loans...... 27 SECTION 3.03. Illegality...... 27 SECTION 3.04. Treatment of Affected Loans...... 27 SECTION 3.05. Certain Compensation...... 28 SECTION 3.06. Capital Adequacy...... 29 SECTION 3.07. Substitution of Banks...... 29

ARTICLE IV CONDITIONS PRECEDENT...... 30 SECTION 4.01. Conditions Precedent to the Initial Advance...... 30 SECTION 4.02. Conditions Precedent to Advances After the Initial Advance...... 32 SECTION 4.03. Deemed Representations...... 32 Page ----

ARTICLE V REPRESENTATIONS AND WARRANTIES...... 33 SECTION 5.01. Due Organization...... 33 SECTION 5.02. Power and Authority; No Conflicts; Compliance With Laws...... 33 SECTION 5.03. Legally Enforceable Agreements...... 33 SECTION 5.04. Litigation...... 33 SECTION 5.05. Good Title to Properties...... 34 SECTION 5.06. Taxes...... 34 SECTION 5.07. ERISA...... 34 SECTION 5.08. No Default on Outstanding Judgments or Orders....34 SECTION 5.09. No Defaults on Other Agreements...... 34 SECTION 5.10. Government Regulation...... 35 SECTION 5.11. Environmental Protection...... 35 SECTION 5.12. Solvency...... 35 SECTION 5.13. Financial Statements...... 35 SECTION 5.14. Valid Existence of Affiliates...... 35 SECTION 5.15. Insurance...... 35 SECTION 5.16. Schedule A and B Assets...... 35 SECTION 5.17. Accuracy of Information; Full Disclosure...... 36

ARTICLE VI AFFIRMATIVE COVENANTS...... 36 SECTION 6.01. Maintenance of Existence...... 36 SECTION 6.02. Maintenance of Records...... 36 SECTION 6.03. Maintenance of Insurance...... 36 SECTION 6.04. Compliance with Laws; Payment of Taxes...... 36 SECTION 6.05. Right of Inspection...... 37 SECTION 6.06. Compliance With Environmental Laws...... 37 SECTION 6.07. Payment of Costs...... 37 SECTION 6.08. Maintenance of Properties...... 37 SECTION 6.09. Reporting and Miscellaneous Document Requirements...... 37

ARTICLE VII NEGATIVE COVENANTS...... 39 SECTION 7.01. Mergers Etc...... 39 SECTION 7.02. Investments...... 39 SECTION 7.03. Sale of Assets...... 40 SECTION 7.04. Interest Rate Hedging...... 40 SECTION 7.05. Partnership Committee of Borrower...... 40 SECTION 7.06. Disposition or Encumbrance of Certain Assets.....40 SECTION 7.07. Amendments to Separation Agreement...... 41 SECTION 7.08. Certain Restrictions on Activities of TCI...... 41

ARTICLE VIII FINANCIAL COVENANTS AND ADJUSTMENTS...... 41 SECTION 8.01. Covenants Prior to Certain Events...... 41 SECTION 8.02. Covenants Subsequent to Certain Events...... 42 SECTION 8.03. Certain Pro-Forma Adjustments...... 43

ii Page ----

ARTICLE IX EVENTS OF DEFAULT...... 44 SECTION 9.01. Events of Default...... 44 SECTION 9.02. Remedies...... 46

ARTICLE X ADMINISTRATIVE AGENT; RELATIONS AMONG BANKS...... 46 SECTION 10.01. Appointment, Powers and Immunities of Administrative Agent...... 46 SECTION 10.02. Reliance by Administrative Agent...... 47 SECTION 10.03. Defaults...... 47 SECTION 10.04. Rights of Administrative Agent as a Bank...... 48 SECTION 10.05. Indemnification of Administrative Agent...... 48 SECTION 10.06. Non-Reliance on Administrative Agent and Other Banks...... 48 SECTION 10.07. Failure of Administrative Agent to Act...... 49 SECTION 10.08. Resignation or Removal of Administrative Agent...49 SECTION 10.09. Amendments Concerning Agency Function...... 49 SECTION 10.10. Liability of Administrative Agent...... 49 SECTION 10.11. Transfer of Agency Function...... 50 SECTION 10.12. Non-Receipt of Funds by Administrative Agent.....50 SECTION 10.13. Withholding Taxes...... 50 SECTION 10.14. Minimum Commitment by UBS...... 50 SECTION 10.15. Pro Rata Treatment...... 51 SECTION 10.16. Sharing of Payments Among Banks...... 51 SECTION 10.17. Possession of Documents...... 51

ARTICLE XI NATURE OF OBLIGATIONS...... 51 SECTION 11.01. Absolute and Unconditional Obligations...... 51 SECTION 11.02. Non-Recourse to TRG Partners...... 52

ARTICLE XII MISCELLANEOUS...... 52 SECTION 12.01. Binding Effect of Request for Advance...... 52 SECTION 12.02. Amendments and Waivers...... 53 SECTION 12.03. Usury...... 53 SECTION 12.04. Expenses; Indemnification...... 53 SECTION 12.05. Assignment; Participation...... 55 SECTION 12.06. Documentation Satisfactory...... 57 SECTION 12.07. Notices...... 57 SECTION 12.08. Setoff...... 57 SECTION 12.09. Year 2000...... 57 SECTION 12.10. Table of Contents; Headings...... 58 SECTION 12.11. Severability...... 58 SECTION 12.12. Counterparts...... 58 SECTION 12.13. Integration...... 58 SECTION 12.14. GOVERNING LAW...... 58 SECTION 12.15. Waivers...... 58 SECTION 12.16. JURISDICTION; IMMUNITIES...... 58

iii EXHIBIT A - Assignment and Assumption Agreement

EXHIBIT B - Authorization Letter

EXHIBIT C - Note

EXHIBIT D - List of Affiliates

EXHIBIT E - Solvency Certificate

SCHEDULE A - Schedule A Assets

SCHEDULE B - Schedule B Assets

i REVOLVING CREDIT AGREEMENT ("this Agreement") dated as of September 21, 1998 among THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP, a limited partnership organized and existing under the laws of the State of Delaware ("Borrower"), UBS AG, NEW YORK BRANCH, as agent for the Banks (in such capacity, together with its successors in such capacity, "Administrative Agent"), and UBS AG, NEW YORK BRANCH (in its individual capacity and not as Administrative Agent, "UBS") (UBS and the lenders who from time to time become Banks pursuant to 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 (except as otherwise provided, terms defined in the singular to have a correlative meaning when used in the plural and vice versa):

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

"Administrative Agent's Office" means Administrative Agent's address located at 299 Park Avenue, New York, NY 10171, or such other address in the United States as Administrative Agent may designate by written notice to Borrower and the Banks.

"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 Revolving Credit Agreement, as amended, supplemented or modified from time to time. "Applicable Commitment Fee Rate" means (1) prior to such time as the Loans become secured in accordance with Section 2.17, the respective rates per annum determined, at any time, based on the Leverage Ratio at the time, in accordance with Table I below (any change in the Leverage Ratio, including any change pursuant to Section 2.05, causing it to move to a different range on said Table I shall effect an immediate change in the Applicable Commitment Fee Rate) and (2) subsequent to such time as the Loans become secured in accordance with Section 2.17, the respective rates per annum determined, at any time, based on the Collateral Property Debt Yield at the time, in accordance with Table II below (any change in the Collateral Property Debt Yield, including any change pursuant to Section 2.05, causing it to move to a different range on said Table II shall effect an immediate change in the Applicable Commitment Fee Rate).

TABLE I

Applicable Commitment Leverage Ratio Fee Rate - unsecured (% per annum) ------

Less than or equal to 50% 0.20%

Greater than 50% 0.25%

TABLE II

Applicable Commitment Collateral Property Debt Yield Fee Rate - secured (% per annum) ------

Greater than 15% 0.20%

Less than or equal to 15% 0.25%

"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.

2 "Applicable Margin" means (1) with respect to Base Rate Loans and LIBOR Loans prior to such time as the Loans become secured in accordance with Section 2.17, the respective rates per annum determined, at any time, based on the Leverage Ratio at the time, in accordance with Table I below (any change in the Leverage Ratio, including any change pursuant to Section 2.05, causing it to move to a different range on said Table I shall effect an immediate change in the Applicable Margin) and (2) with respect to Base Rate Loans and LIBOR Loans subsequent to such time as the Loans become secured in accordance with Section 2.17, the respective rates per annum determined, at any time, based on the Collateral Property Debt Yield at the time, in accordance with Table II below (any change in the Collateral Property Debt Yield, including any change pursuant to Section 2.05, causing it to move to a different range on said Table II shall effect an immediate change in the Applicable Margin ).

TABLE I

Applicable Margin Applicable Margin for Base Rate Loans - for LIBOR Loans Leverage Ratio unsecured (% per annum) unsecured (% per annum) ------

Less than or equal to 50% -0- 1.15

Greater than 50% -0- 1.30

TABLE II

Applicable Margin for Applicable Margin Base Rate Loans - for LIBOR Loans - Collateral Property Debt Yield secured (% per annum) secured (% per annum) ------

Greater than 15% -0- 0.90

Less than or equal to 15% -0- 1.05

"Assignee" has the meaning 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 Section 12.05.

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

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

3 "Bank Parties" means Administrative Agent and the Banks.

"Banking Day" means (1) any day on which commercial banks are not authorized or required to close in New York City 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.

"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.

"Bonds" means the senior unsecured notes of Borrower in the principal amount of $708,000,000 issued pursuant to the Amended and Restated Indenture dated March 4, 1994 between Borrower and The Chase Manhattan Bank, as successor to Chemical Bank, as trustee.

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

"Borrower" has the meaning specified in the preamble.

"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

4 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.

"Code" means the Internal Revenue Code of 1986, as amended from time to time.

"Collateral Properties" means those Schedule A Assets which are given as security for the Loans pursuant to Section 2.17.

"Collateral Property Debt Yield" means, for any calendar quarter, the ratio (expressed as a percentage) of (1) Collateral 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.

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

"Collateral Property Owners" means the Affiliates of Borrower that own the respective Collateral Properties.

"Columbus UDAG Loan" means the UDAG mortgage loan in the current principal amount of $7,858,786 to TL - Columbus Associates regarding Columbus City Center.

"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 1997.

"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

5 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.

"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.

"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 under 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

6 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).

"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 of America.

"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.

"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 compliance with any Environmental Law in connection with any activity or operations at any time conducted by Borrower, (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 locations or facilities, 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; and (3) any violation or alleged violation of any relevant Environmental Law.

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, including any rules and regulation 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.

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

"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

7 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 1997.

"GAAP" means generally accepted accounting principles in the United States of America 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).

"GMPT Borrower" means a single purpose entity or entities, at least 99.9% owned and controlled (directly or indirectly) by GMPTS and otherwise satisfactory to Administrative Agent, which will be the indirect owner of a 100% interest in the Schedule B Assets following the consummation of the Unit Redemption Transaction.

"GMPTS" means GMPTS Limited Partnership, a Delaware limited partnership, presently a general partner of Borrower owning 50,025,713 partnership units representing an approximately 37.3% interest therein.

"Good Faith Contest" means the contest of an item if (1) the item is diligently contested in good faith, and, if appropriate, by proceedings timely instituted, (2) adequate reserves are established with respect to the contested item, (3) during the period of such contest, the enforcement of any contested item is effectively stayed and (4) 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.

8 "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.

"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.

"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.

"Indemnity" and "Indemnities" have the respective meanings specified in Section 2.17.

"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 or third calendar month thereafter, 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.

"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.

9 "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 therefor, the rate per annum (rounded upwards if necessary to the nearest 1/16 of 1%) quoted at approximately 11:00 a.m., New York time, by UBS two (2) Banking Days prior to the first day of such Interest Period for the offering to leading banks in the London interbank market of Dollar deposits in immediately available funds, for a period, and in an amount, comparable to such Interest Period and principal amount of the LIBOR Loan in question outstanding during such Interest Period.

"LIBOR Interest Rate" means, for any LIBOR Loan, a rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) 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 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.

10 "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, 3.07 or 12.05:

Bank Loan Commitment ------

UBS $200,000,000

Total $200,000,000 ======

"Loan Documents" means this Agreement, the Notes and the Solvency Certificate and, following such time as the Loans become secured pursuant to Section 2.17, the Mortgages and the Indemnities.

"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 (2) any event or occurrence of whatever nature which is likely to have a material adverse effect on the ability of Borrower to perform its obligations under the Loan Documents.

"Maturity Date" means September 21, 2001.

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

"Mortgage" and "Mortgages" have the respective meanings specified in Section 2.17.

"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.

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

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

"Obligations" means each and every obligation, covenant and agreement of Borrower, now or hereafter existing, contained in this Agreement, and any of the other Loan Documents, whether for principal, reimbursement obligations, interest, fees, expenses, indemnities or otherwise, and any amendments or supplements thereto, extensions or renewals thereof or replacements therefor, including but not limited to all indebtedness, obligations and liabilities of Borrower to Administrative Agent and any Bank now existing or hereafter incurred under or arising out of or in connection with the Notes, this Agreement, 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

11 extinguished and later increased, created or incurred, and including all indebtedness of Borrower, under any instrument now or hereafter evidencing or securing any of the foregoing.

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

"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, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.

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

"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 UBS at its Principal Office as its prime commercial lending rate.

"Principal Office" means the principal office of UBS, presently located at 299 Park Avenue, New York, New York 10171.

"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 set forth in Section 406 of ERISA or Section 4975 of the Code.

"Regulation D" means Regulation D of the Board of Governors of the Federal Reserve System, as the same may be amended or supplemented from time to time, or any similar Law from time to time in effect.

"Regulation U" means Regulation U of the Board of Governors of the Federal Reserve System, as the same may be amended or supplemented from time to time.

"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

12 law) by any court or governmental or monetary authority charged with the interpretation or administration thereof.

"Related Bridge Loan" means the loan in the amount of up to $430,000,000 to Borrower pursuant to a Credit Agreement, dated as of the date hereof, among Borrower, UBS and the other lenders, if any, identified therein, and UBS, as administrative agent for said lenders.

"Related Bridge Term Loan" means the loan in the amount of $902,000,000 to Borrower pursuant to a Term Loan Agreement, dated as of the date hereof, among Borrower, UBS and the other lenders, if any, identified therein, and UBS, as administrative agent for said lenders.

"Related Loan Banks" means the "Banks" under the credit agreement(s) governing the Related Loans.

"Related Loan Commitments" means the commitments of the Related Loan Banks to make the Related Loans.

"Related Loans" means the Related Bridge Loan and, until the consummation of the Unit Redemption Transaction, the Related Bridge Term Loan.

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

"Required Banks" means at any time the Banks and Related Loan Banks having Loan Commitments and/or Related Loan Commitments the aggregate outstanding plus unfunded amounts of which are equal to at least 66-2/3% of the aggregate outstanding plus unfunded amounts of all the Loan Commitments and Related Loan Commitments; provided, however, that during the existence of an Event of Default, the "Required Banks" shall be the Banks and/or Related Loan Banks holding at least 66-2/3% of the then aggregate unpaid principal amount of the Loans and the Related Loans.

"Restricted Payment" has the meaning specified in Section 8.01(6).

"Schedule A Assets" means those assets of Borrower identified in SCHEDULE A.

"Schedule B Assets" means those assets of Borrower identified in SCHEDULE B. Following the consummation of the Unit Redemption Transaction, references in this Agreement to the "Schedule B Assets" shall be disregarded.

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

13 "Separation Agreement" means, collectively, the Separation and Relative Value Adjustment Agreement dated August 17, 1998 between Borrower and GMPTS, together with the two (2) related side letters of even date therewith from Borrower and agreed to and accepted by GMPTS, as the same may be modified to the extent permitted by Section 7.07.

"Solvency Certificate" means a certificate in substantially the form of EXHIBIT E, to be delivered by Borrower pursuant to the terms of this Agreement.

"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 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.

"Specified Credit Facilities" means, collectively, (1) the unsecured revolving credit facility of up to $300,000,000 from UBS and other lenders to Borrower made pursuant to an Amended and Restated Revolving Loan Agreement dated as of March 5, 1997, as amended, (2) the unsecured credit facility of up to $100,000,000 from UBS to Borrower made pursuant to an Unsecured Loan Agreement dated as of July 27, 1998, (3) the Stoneridge Mortgage Loan and the Columbus UDAG Loan.

"Stoneridge Mortgage Loan" means the mortgage loan in the original principal amount of $75,000,000 from The First National Bank of Chicago and J.G. Finley, as Trustee, to Stoneridge Properties.

"Supplemental Fee Letter" means that certain letter agreement, dated the date hereof, between UBS and Borrower.

"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.

14 "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'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.

"UBS" has the meaning specified in the preamble.

"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.

"Unencumbered Combined EBITDA" means that portion of Combined EBITDA attributable to Unencumbered Wholly-Owned Assets.

"Unencumbered Wholly-Owned Assets" means assets, reflected on the TRG Consolidated Financial Statements, wholly owned, directly or indirectly, by Borrower and not subject to any Lien to secure all or any portion of Secured Indebtedness; provided, however, that, for purposes of this definition only, the loans described in the following table, so long as the documents in respect of the same permit secondary financing, shall not be considered part of Secured Indebtedness:

Description of Debt Obligation Obligor Affected Asset Amount ($) ------

Assessment Bonds - Richmond Associates Hilltop land 413,727 City of Richmond Assessment Bonds - Stoneridge Properties Stoneridge land 1,200,400 CIty of Pleasanton Assessment Bonds - Biltmore Shopping Biltmore land 2,978,584 City of Phoenix Center Partners

15 "Unit Redemption Transaction" means the transaction whereby all of GMPTS's partnership units in Borrower will be redeemed in exchange for the Schedule B Assets, (2) GMPT Borrower shall assume certain indebtedness relating to the Schedule B Assets and (3) Borrower shall assign to GMPT Borrower, and GMPT Borrower shall assume, all of Borrower's rights and obligations under the Related Bridge Term Loan, all in accordance with the Separation Agreement, which Unit Redemption Transaction is anticipated by Borrower and GMPTS to be consummated on or after September 30, 1998 and in connection with which Unit Redemption Transaction Borrower's agreement of limited partnership shall be amended and restated.

"Unsecured Debt Yield" means, for any calendar quarter, the ratio (expressed as a percentage) of (1) Unencumbered Combined EBITDA for the twelve (12)-month period ending with such calendar quarter to (2) Unsecured Indebtedness as of the end of such calendar quarter.

"Unsecured Indebtedness" means that portion of Total Outstanding Indebtedness that is unsecured.

"Woodfield Mortgage Loan" means the mortgage loan, in the original principal amount of $172,000,000 from Morgan Guaranty Trust Company of New York, as Trustee, with respect to the Woodfield shopping center, and the related interest rate hedging agreement.

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 or modification to 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 and vice versa, (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.

16 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 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. 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, stating the amount requested and certifying the purpose for which such advance is to be used, no later than 10:00 a.m. (New York time) on the date three (3) Banking Days prior to the date the advance is to be made.

17 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. (New York 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 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 crediting an account of Borrower designated by Borrower and maintained with Administrative Agent at Administrative Agent's Office.

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 (7) 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 definitions of the "Applicable Commitment Fee Rate" and "Applicable Margin" in Section 1.01, the Leverage Ratio and Collateral 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 (7) 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.

18 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 LIBOR Interest Rate plus the Applicable Margin. Any principal amount not paid when due (when scheduled, at acceleration or otherwise) shall bear interest thereafter, payable on demand, at the Default Rate.

The interest rate on Base Rate Loans shall change 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 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 commitment fee computed on the daily unused Loan Commitment of such Bank (it being understood that the amount of outstanding Letters of Credit shall be considered "used" for this purpose), at a rate per annum equal to the daily Applicable Commitment Fee Rate, calculated on the basis of a year of three hundred sixty (360) days for the actual number of days elapsed. The accrued commitment fees shall be due and payable in arrears on the first Banking Day of each month after the Closing Date, and upon the Maturity Date 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 pursuant to Section 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 or the Notes.

19 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 the 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. (New York time) on the date which is fifteen (15) days prior to the effectiveness of such termination, (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. (New York 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. 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 provided in this Agreement, 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.

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

20 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 in this Agreement, 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 10:00 a.m. (New York 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 two (2)

Election 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.

SECTION 2.17. Collateral for Loans. Borrower covenants and agrees that, within thirty (30) days following the earliest to occur of (x) the maturity date of the Related Bridge Loan and the Related Bridge Term Loan, as the same may be accelerated, (y) the

21 repayment in full of the Related Bridge Loan and the Related Bridge Term Loan and the cancellation of the loan commitments of the lenders thereof and (z) the repayment in full of the Related Bridge Loan and the cancellation of the loan commitments of the lenders of the Related Bridge Term Loan and the assumption of the Related Bridge Term Loan by GMPT Borrower as contemplated by the Term Credit Agreement governing the same, it will deliver to Administrative Agent, for the benefit of the Banks, (A) an amendment and restatement of this Agreement, duly executed by Borrower, which will, inter alia, add customary mortgage and property-related representations, covenants, conditions and defaults, (B) certified copies of all documents evidencing partnership action taken by Borrower and the Collateral Property Owners authorizing the execution, delivery and performance of the Mortgages, the Indemnities and each other document to be delivered by or on behalf of Borrower pursuant to this Section, (C) a certificate of Borrower's managing general partner, or a similar certificate with respect to each of the Collateral Property Owners, certifying the names and true signatures of each individual authorized to sign the Mortgages, the Indemnities and all related documents on behalf of Borrowers or the respective Collateral Property Owner, (D) a Solvency Certificate, duly executed, from Borrower and each Collateral Property Owner, (E) 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 with the covenants set forth in Section 8.02 (6) and (7) and (F) the following with respect to each of the Schedule A Assets then owned by Borrower (other than those that have been encumbered with the Required Banks' consent in accordance with Section 7.06), all of said requirements at Borrower's expense and each in form and substance reasonably satisfactory to Administrative Agent:

(1) a mortgage (or deed of trust), assignment of leases and rents and security agreements (each, a "Mortgage" and collectively, the "Mortgages") and related Uniform Commercial Code Financing Statements, each duly executed by the appropriate Collateral Property Owner and in proper form for recording or filing, as the case may be, in the appropriate records;

(2) an agreement (each, an "Indemnity" and collectively, the "Indemnities") whereby the Banks and Administrative Agent are indemnified regarding Hazardous Materials, duly executed by Borrower and the appropriate Collateral Property Owner;

(3) a paid title insurance policy, in the amount of the Mortgage, which shall insure the Mortgage to be a valid first lien on the appropriate Collateral Property Owner's interest in the property covered thereby, free and clear of all liens, defects, encumbrances and exceptions except those reasonably approved (in light of the normal and customary Liens, encumbrances and exceptions found on title to comparable regional shopping center properties and not prohibited under Section 7.06) by Administrative Agent, and shall contain (i) a reference to the survey required below but no material survey exceptions, (ii) a pending disbursements clause and (iii) such affirmative insurance and endorsements as Administrative Agent may reasonably require; and shall be accompanied by such reinsurance agreements as Administrative Agent may require;

(4) a current ALTA survey, certified to Administrative Agent and the title insurer, showing (i) the location of the perimeter of the property by courses and distances,

22 (ii) all easements, rights-of-way, and utility lines referred to in the title policy required above 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 are public roads), (iv) any encroachments and the extent thereof upon the property, (v) locations of all portions (with the acreage thereof also identified) of the property 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) all improvements thereon, and the relationship thereof by distances to the perimeter of the property, established building lines and street lines;

(5) an independent M.A.I. appraisal, 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;

(6) copies of the policies and originals of the certificates of hazard and other insurance required by the Mortgage on such property, together with evidence of the payment of the premiums therefor;

(7) a detailed report and certification by a properly qualified engineer with regard to Hazardous Materials affecting the property, which shall include, inter alia, a certification that such engineer has obtained and 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;

(8) a detailed report from an engineering consultant to the effect that all improvements on the property are in satisfactory condition and enumerating any maintenance or governmental compliance items necessary or expected to be incurred over the remaining term of the Loans and stating the approximate cost thereof;

(9) copies of any and all certificates of occupancy and similar authorizations required by Governmental Authorities for the use, occupancy and operation of the property and/or the improvements thereon;

(10) copies, certified by Borrower to be true and complete, of all leases of the property, accompanied by, in the case of such leases as are reasonably requested by Administrative Agent (i) estoppel certificates from the tenants thereunder (to the extent such estoppel certificates are obtainable with Borrower's commercially reasonable efforts, it being understood that if Borrower shall not have obtained any such estoppel certificates using such efforts prior to the granting of the Mortgage, Borrower covenants to continue to use such efforts to obtain such estoppel certificates), (ii) notices of assignment, and (iii) to the extent in Borrower's possession or otherwise obtainable with reasonable effort, current financial statements of the tenants (and guarantors of the tenants' obligations, if applicable) thereunder;

23 (11) a copy, certified by Borrower to be true and complete, of any reciprocal easement and operating agreement (and related agreements) affecting the property, together with estoppel certificates with respect thereto from the parties thereto (to the extent such estoppel certificates are obtainable with Borrower's commercially reasonable efforts, it being understood that if Borrower shall not have obtained any such estoppel certificates using such efforts prior to the granting of the Mortgage, Borrower covenants to continue to use such efforts to obtain such estoppel certificates), and, if in Borrower's possession or otherwise obtainable with reasonable effort, current financial statements of such parties;

(12) copies, certified by Borrower to be true and complete, of all existing contracts providing for the management or leasing of the property or any improvements thereon, together with, in each case, such collateral assignments or "will-serve" letters as Administrative Agent may reasonably require;

(13) favorable opinions of counsel for Borrower and the appropriate Collateral Property Owner as to (i) the due authorization, execution and enforceability of the Mortgage and Indemnity and (ii) such other matters as Administrative Agent may reasonably request;

(14) Uniform Commercial Code searches with respect to Borrower and the appropriate Collateral Property Owner and advice from the title insurer to the effect that searches of the proper public records disclose no leases of personalty (other than leases made in the ordinary course of business) or financing statements filed or recorded against Borrower or such Collateral Property Owner or the property covered by the Mortgage, other than those reasonably approved by Administrative Agent;

(15) good standing, and, if required, foreign qualification, certificates for Borrower and the appropriate Collateral Property Owner from the jurisdiction where the property is located;

(16) current financial/operating statements, certified by Borrower to be true and complete; and

(17) such other documents, instruments, materials, opinions or assurances as Administrative Agent may reasonably request.

SECTION 2.18. Letters of Credit. (a) Borrower, the Banks and Administrative Agent acknowledge that Administrative Agent has issued the following two (2) irrevocable letters of credit for the account of Borrower: No. SBY502898, dated July 22, 1994, in the original amount of $5,654,571, for the benefit of Morgan Guaranty Trust Company of New York, as Trustee, and No. SBY505218, dated August 19, 1997, in the original amount of $3,049,481, for the benefit of Palm Beach County Board of County Commissioners (each, a "Letter of Credit"; said letters of credit, collectively, the "Letters of Credit").

24 (b) 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): (i) a fee, payable to Administrative Agent 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, payable to Administrative Agent for its 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 less 0.125% per annum. It is understood and agreed that the last installment of the fees provided for in this paragraph (b) 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.

(c) The parties hereto acknowledge and agree that, 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 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 of the Banks 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.

(d) Borrower agrees, upon the occurrence of an Event of Default and at the request of Administrative Agent, (i) to 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) to 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.

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:

25 (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).

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 written 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 of other liabilities of such Bank which includes deposits by reference to which the LIBOR Interest Rate is determined as provided in this Agreement 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

26 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 in this Agreement; 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 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 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 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

27 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 written 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.

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 (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

28 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 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. Substitution 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) 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 Notes 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 Notes, together with all other amounts, if any, due from Borrower to the Affected Bank, including all amounts properly demanded and unreimbursed under Sections 3.01 and 3.05.

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 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

29 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 Notes and all of its rights and obligations under this Agreement 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 Notes 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 Sections 3.01 and 3.05. Upon the effective date of such assignment and assumption, 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, 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, substitute Notes shall be issued to the Replacement Bank by Borrower, in exchange for the return of the Affected Bank's Notes. The obligations evidenced by such substitute Notes shall constitute "Obligations" for all purposes of this Agreement and the other Loan Documents. If the Replacement Bank is not incorporated under the Laws of the United States of America 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, and each of the following requirements shall have been fulfilled:

(1) Fees and Expenses. The payment of (A) all fees and expenses incurred by Administrative Agent (including, without limitation, the reasonable fees and expenses of legal counsel) and (B) the fees specified in the Supplemental Fee Letter to be paid on or before the Closing Date;

(2) Note. The Note for UBS, duly executed by Borrower;

30 (3) Financials of Borrower. Audited TRG Consolidated Financial Statements as of and for the year ended December 31, 1997 and unaudited TRG Consolidated Financial Statements as of and for the quarter ended June 30, 1998, each acceptable to the Banks;

(4) Evidence of Formation of Borrower. Certified (as of the Closing Date) copies of Borrower's certificate and agreement of limited partnership, with all amendments thereto, and a certificate of the Secretary of State of the jurisdiction of formation as to its good standing therein;

(5) Evidence of All Partnership Action. Certified (as of the Closing Date) copies of all documents evidencing partnership action taken by Borrower authorizing the execution, delivery and performance of the Loan Documents and each other document to be delivered by or on behalf of Borrower pursuant to this Agreement;

(6) Incumbency and Signature Certificate of Borrower. A certificate (dated as of the Closing Date) of the Secretary of the Partnership Committee of Borrower certifying the names and true signatures of each individual authorized to sign on behalf of Borrower;

(7) Solvency Certificate. A Solvency Certificate, duly executed, from Borrower;

(8) Opinion of Counsel for Borrower. A favorable opinion, dated the Closing Date, of Miro Weiner & Kramer, counsel for Borrower, as to such matters as Administrative Agent may reasonably request;

(9) Authorization Letter. The Authorization Letter, duly executed by Borrower;

(10) 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;

(11) Supplemental Fee Letter. The Supplemental Fee Letter, duly executed by Borrower;

(12) Separation Agreement. A copy of the Separation Agreement, certified by Borrower to be true and complete;

31 (13) Evidence of Bond Defeasance. Evidence that at least 65% of the indebtedness represented by the Bonds has been defeased and/or repaid;

(14) Evidence regarding Specified Credit Facilities. Evidence that the Specified Credit Facilities have been repaid in full and terminated;

(15) Evidence regarding Schedule A and B Assets. Evidence that the Schedule A Assets and the Schedule B Assets are not subject to any Lien to secure all or any portion of Secured Indebtedness (other than the Woodfield Mortgage Loan, the Stoneridge Mortgage Loan, the Columbus UDAG Loan and the indebtedness described in the chart in the definition of "Unencumbered Wholly-Owned Assets" in Section 1.01);

(16) Request for Advance. A request for an advance in accordance with Section 2.04;

(17) Related Bridge Loan Fully Disbursed. The Related Bridge Loan shall have been fully disbursed; and

(18) 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;

(3) Administrative Agent shall have received a request for an advance in accordance with Section 2.04; and

(4) In the case of the first such subsequent advance following the consummation of the Unit Redemption Transaction, Administrative Agent shall have received and approved (such approval not to be unreasonably withheld) an amendment and restatement of Borrower's agreement of limited partnership (it being understood that the form of amendment and restatement attached to that certain Interim Agreement dated as of August 17, 1998 among TCI and others is deemed approved).

SECTION 4.03. Deemed Representations. Each request by Borrower for, and acceptance by Borrower of, an advance of proceeds of the Loans shall constitute a representation and warranty by Borrower that, as of both the date of such request and the date of the advance (1) no Default or Event of Default has occurred and is continuing and (2) if any representation or warranty contained in this Agreement or the other Loan Documents is untrue or incorrect, the

32 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 is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has the partnership power and authority to own its assets and to transact the business in which it is now engaged, and, if applicable, is duly qualified as a foreign partnership and in good standing under the laws of each other jurisdiction in which such qualification is required.

SECTION 5.02. Power and Authority; No Conflicts; Compliance With Laws. The execution, delivery and performance of the obligations required to be performed by Borrower of the Loan Documents does not and will not (1) require the consent or approval of its partners 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, 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 its knowledge, Borrower is in compliance with all Laws applicable to it 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, enforceable against Borrower 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 its knowledge, threatened against Borrower or any of its Affiliates before any court or arbitrator or any Governmental Authority except actions, suits or proceedings which have been disclosed to Administrative Agent and the Banks in writing and which are fully covered by insurance or would, if adversely determined, not substantially impair the ability of Borrower to pay when due any amounts which may become payable under the Notes or to otherwise pay and perform its obligations in connection with the Loans.

33 SECTION 5.05. Good Title to Properties. Borrower and each of its Affiliates 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 June 30, 1998 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 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 have been encumbered or disposed of since the date of such financial statements without violating any of the covenants contained in Article VII 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 has filed all tax returns (federal, state and local) required to be filed and has paid all taxes, assessments and governmental charges and levies due and payable 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 is 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 and the ERISA Affiliates thereof have not completely or partially withdrawn under Sections 4201 or 4204 of ERISA from a Multiemployer Plan; Borrower and the ERISA Affiliates thereof have met the minimum funding requirements of each under ERISA with respect to the plans of each and there are no unfunded vested liabilities with respect to any plan established or maintained by each; and Borrower and the ERISA Affiliates thereof have not incurred any liability to the PBGC under ERISA.

SECTION 5.08. No Default on Outstanding Judgments or Orders. Borrower has satisfied all judgments which are not being appealed and is 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, Borrower, to the best of its knowledge, is not 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 its knowledge, Borrower is not in default in any respect in the 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.

34 SECTION 5.10. Government Regulation. Borrower is not subject to regulation under the Investment Company Act of 1940, the Interstate Commerce Act, the Federal Powers Act or any statute or regulation limiting any such Person's 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 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 is in violation of, or subject to any existing, pending or threatened investigation or proceeding by any Governmental Authority under, any Environmental Law.

SECTION 5.12. Solvency. Borrower is, 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 and TCI 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 or TCI Financial Statements, as the case may be.

SECTION 5.14. Valid Existence of Affiliates. As of the Closing Date, the only material Affiliates of Borrower which own or lease operating shopping centers or shopping centers under construction are listed on EXHIBIT D. Each such Affiliate is a partnership, limited liability company or joint venture duly organized and existing in good standing under the laws of the jurisdiction of its formation. As to each such Affiliate, its correct name, the jurisdiction of its formation and Borrower's percentage of beneficial interest therein are set forth on said EXHIBIT D. Borrower and each of such Affiliates have the power to own their respective properties and to carry on their respective businesses now being conducted. Each of Borrower and such 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. 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. Schedule A and B Assets. None of the Schedule A Assets or Schedule B Assets is subject to (1) any Lien to secure all or any portion of Secured Indebtedness

35 (other than the Woodfield Mortgage Loan, the Stoneridge Mortgage Loan, the Columbus UDAG Loan and the indebtedness described in the chart in the definition of "Unencumbered Wholly-Owned Assets" in Section 1.01) or (2) any pledge or agreement not to encumber.

SECTION 5.17. 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 to Administrative Agent or any Bank in connection with the negotiation of this Agreement or the consummation of the transactions contemplated hereby, or required herein to be furnished by or on behalf of Borrower, 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 nor, so far as Borrower can now foresee, will materially affect adversely the business, prospects, profits or financial condition of Borrower or the ability of Borrower 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 to any Bank hereunder or under any other Loan Document, Borrower shall:

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, 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.

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.

36 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 the records and books of account of, and visit the properties of, Borrower and to discuss the affairs, finances and accounts of Borrower with the independent accountants of Borrower.

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.

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 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 and, following the consummation of the Unit Redemption Transaction, the TCI Financial Statements, 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 the last quarter of the Fiscal Year), the unaudited TRG Consolidated Financial Statements and, following the consummation of the Unit Redemption Transaction, the TCI Financial Statements, in each case as of the end of and for such calendar quarter, in reasonable detail and stating in comparative form the respective figures for the corresponding date and period in the prior Fiscal Year;

(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

37 Sections 7.02, 7.03, 7.04 and 7.06 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, Unencumbered Combined EBITDA, Interest Expense, Unsecured Interest Expense and Fixed Charges, each for the twelve (12)-month period ending with such quarter;

(4) Certificate of Borrower's Accountants. Simultaneously with the delivery of the annual financial statements required by paragraph (1) of this Section, a statement of Borrower's Accountants who audited such financial statements comparing the computations set forth in the financial compliance certificate required by paragraph (3)(b) of this Section to the audited financial statements required by paragraph (1) of this Section (where such information appears in such financial statements);

(5) Notice of Litigation. Promptly after the commencement and knowledge thereof, notice of all actions, suits, and proceedings before any court or arbitrator, affecting Borrower which, if determined adversely to Borrower is likely to result in a Material Adverse Change;

(6) 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 written notice setting forth the details of such Default or Event of Default and the action which is proposed to be taken with respect thereto;

(7) Dispositions or Acquisitions of Assets. Within thirty (30) days after the occurrence thereof, written 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 property acquired for at least the preceding three (3) years (to the extent available) and Borrower's revenue and expense projections for the property acquired for at least the next five (5) years (all of the foregoing to be in form and detail 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 8.03, 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;

(8) 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

38 which is likely to result in or has resulted in a Material Adverse Change, written notice thereof;

(9) Bankruptcy of Tenants. Promptly after becoming aware of the same, written notice of the bankruptcy, insolvency or cessation of operations of 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;

(10) Offices. Thirty (30) days' prior written notice of any change in the chief executive office or principal place of business of Borrower;

(11) Environmental and Other Notices. As soon as possible and in any event within five (5) days after receipt, copies of all Environmental Notices received by Borrower which are not received in the ordinary course of business and which relate to a situation which is likely to result in a Material Adverse Change;

(12) Insurance Coverage. Promptly, such information concerning Borrower's insurance coverage as Administrative Agent may reasonably request;

(13) Separation Agreement. Promptly, any changes in the Separation Agreement or the Unit Redemption Transaction; and

(14) General Information. Promptly, such other information respecting the condition or operations, financial or otherwise, of Borrower or any properties of Borrower as Administrative Agent may from time to time reasonably request.

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 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).

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

39 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. At any time following the date ninety (90) days after the date hereof, 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) months.

SECTION 7.05. Partnership Committee of Borrower. At any time until the Unit Redemption Transaction has been consummated, permit or suffer the failure or inability of any one or more of (1) TG Partners Limited Partnership and/or Taub-Co Management, Inc., (2) the General Motors Hourly-Rate Employees Pension Trust and/or the General Motors Salaried Employees Pension Trust, directly or indirectly (or a single "GMPTS Transferee," as such quoted term is defined in Borrower's Amended and Restated Agreement of Limited Partnership) and (3) TCI, to designate a majority of Borrower's partnership committee; or, at any time thereafter, permit or suffer the failure or inability of TCI to be the managing general partner of Borrower.

SECTION 7.06. Disposition or Encumbrance of Certain Assets. Notwithstanding anything to the contrary contained herein, at any time, effect a Disposition of, mortgage, hypothecate or otherwise encumber to secure a Debt (it being understood that, for purposes of this Section, an asset shall be deemed "encumbered" if it is the subject of a pledge or agreement not to encumber), any of the Schedule A Assets or the Schedule B Assets, or any portion of its interest in any of such assets, in any such case, without the prior written approval of the Required Banks, which approval may be granted or denied in the sole and absolute discretion of the Required Banks, provided, however, that (1) such consent shall not be required for the transfer of the Schedule B Assets to GMPT Borrower in connection with the consummation of the Unit Redemption Transaction, including the simultaneous assumption by GMPT Borrower of

40 all of Borrower's obligations in respect of the Related Bridge Term Loan, all as contemplated by the Term Credit Agreement governing the Related Bridge Term Loan and (2) such consent shall not be required for the encumbrance of one or more of the Schedule A Assets or Schedule B Assets to secure, in any such case, a mortgage loan provided that such loan is non-recourse to Borrower and generates proceeds of not less than 60% of the value of the applicable Schedule A Asset(s) or Schedule B Asset(s) (as such values are reflected in the June 30, 1997 Taubman Realty Group Current Value Analysis previously delivered to Administrative Agent) and such proceeds are applied in accordance with Section 2.17 of the Credit Agreement governing the Related Bridge Loan and Section 2.18 of the Term Credit Agreement governing the Related Bridge Term Loan. The Banks acknowledge that the existence of Liens securing the Woodfield Mortgage Loan and the indebtedness described in the chart in the definition of "Unencumbered Wholly-Owned Assets" in Section 1.01 shall not violate this Section.

SECTION 7.07. Amendments to Separation Agreement. At any time, amend, modify or supplement the Separation Agreement in any material respect without the prior written consent of the Required Banks, which shall not be unreasonably withheld or delayed.

SECTION 7.08. 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 or engage in any business other than the ownership of such interests.

ARTICLE VIII

FINANCIAL COVENANTS AND ADJUSTMENTS

SECTION 8.01. Covenants Prior to Certain Events. Prior to such time as (a) the Related Bridge Loan has been repaid in full and the loan commitments of the lenders thereof cease to be in effect, (b) (x) the Related Bridge Term Loan has been repaid in full and the loan commitments of the lenders thereof cease to be in effect or (y) the Related Bridge Term Loan has been assumed by GMPT Borrower, as contemplated by the Term Credit Agreement governing the Related Bridge Term Loan, (c) the Loans have become secured, as contemplated by Section 2.17 and (d) the Loan Commitments have terminated, the Notes have been repaid in full and any other amounts owing by Borrower to Administrative Agent or any Bank under this Agreement or under any other Loan Document have been repaid in full, Borrower shall not permit or suffer:

(1) Net Worth. At any time, Net Worth to be less than $1,000,000,000; or

(2) Leverage Ratio. At any time, Leverage Ratio to exceed 60%; 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

41 (4) Relationship of Combined EBITDA to Interest Expense. As of the end of any calendar quarter, the ratio of (i) Combined EBITDA to (ii) Interest Expense, each for the twelve (12)-month period then ended and taken as a whole, to be less than 1.85 to 1.00; or

(5) 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 13.5%; or

(6) 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 90% 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 90% of Distributable Cash Flow as may be necessary under Section 857(a) of the Code to maintain TCI's tax status as a real estate investment trust. For purposes of this Article, "Restricted Payment" means any distribution or other payment made by Borrower to its partners, other than distributions pursuant to Section 5.3 of Borrower's agreement of limited partnership; or

(7) Unsecured Debt Yield. As of the end of any calendar quarter, Unsecured Debt Yield for such calendar quarter to be less than 13%; or

(8) Relationship of Unencumbered Combined EBITDA to Interest Expense on Unsecured Indebtedness. As of the end of any calendar quarter, the ratio of (i) Unencumbered Combined EBITDA to (ii) that portion of Interest Expense attributable to Unsecured Indebtedness, each for the prior twelve (12)-month period then ended and taken as a whole, to be less than 1.50 to 1.00.

SECTION 8.02. Covenants Subsequent to Certain Events. Subsequent to such time as (a) the Related Bridge Loan has been repaid in full and the loan commitments of the lenders thereof cease to be in effect, (b) (x) the Related Bridge Term Loan has been repaid in full and the loan commitments of the lenders thereof cease to be in effect or (y) the Related Bridge Term Loan has been assumed by GMPT Borrower, as contemplated by the Term Credit Agreement governing the Related Bridge Term Loan and (c) the Loans have become secured, as contemplated by Section 2.17; and so long as any of the Notes shall remain unpaid, or the Loan Commitments shall remain in effect, or any other amount is owing by Borrower 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 $1,000,000,000; or

(2) Leverage Ratio. At any time, Leverage Ratio to exceed 70%; or

42 (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 1.40 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 11.5%; 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 as may be necessary under Section 857(a) of the Code to maintain TCI's tax status as a real estate investment trust; or

(6) Collateral Property Debt Yield. As of the end of any calendar quarter, Collateral Property Debt Yield for such calendar quarter to be less than 13%; or

(7) Relationship of Collateral Property EBITDA to Interest Expense on Loans. As of the end of any calendar quarter, the ratio of (i) Collateral 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 8.03. Certain Pro-Forma Adjustments. For purposes of the calculation of the financial covenants set forth in Sections 8.01 and 8.02, 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.

43 (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 8.03, 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.

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 amount; or fail to pay any fee or interest 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 in this Agreement or in any other 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

(3) If Borrower shall fail (a) to perform or observe any term, covenant or agreement contained in Section 2.17, Article VII or Article VIII or (b) 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 any Loan Document, or in the Supplemental Fee Letter or any other document executed by Borrower and delivered to Administrative Agent and/or the Banks in connection with the transactions contemplated hereby and such failure shall remain unremedied for thirty (30) consecutive calendar days after notice by Administrative

44 Agent to Borrower thereof (or such shorter cure period as may be expressly prescribed in the applicable Loan 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 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 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 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 TCI, Borrower, or any Affiliate(s) 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 or a substantial part of its assets; or (c) commence any proceeding under any bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or liquidation law or statute 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, 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 a substantial part of its 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 substantial part of its property; or (g) suffer any such custodianship, receivership or trusteeship for all or any substantial part of its 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 either Borrower or TCI, and any such judgments, decrees or orders shall continue unsatisfied and in effect for a

45 period of thirty (30) consecutive days without being vacated, discharged, satisfied or stayed or bonded pending appeal; or

(7) If any of the following events shall occur or exist with respect to Borrower, or any ERISA Affiliate of Borrower: (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 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 or any ERISA Affiliate of Borrower 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 $50,000; 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 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, shall discontinue providing such services for 25% or more of the regional shopping center properties then owned in whole or in part by Borrower;

(11) If there shall occur an "Event of Default" under any Mortgage (as such quoted term is defined in such Mortgage); or

(12) If there shall occur an "Event of Default" (i) under the Credit Agreement governing the Related Bridge Loan or (ii) until such time as the Unit Redemption Transaction has been consummated and the Related Bridge Term Loan has been repaid or assumed by GMPT Borrower, under the Term Credit Agreement governing the Related Bridge Term Loan.

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 Notes, all interest thereon, and all other amounts payable under this Agreement, and any other Loan Documents to be forthwith due and payable, whereupon the Notes, all such interest, and all such amounts due under this Agreement and under any other Loan Document shall become and be forthwith due and payable, without presentment, demand, protest, or further notice of any kind, all of which are hereby expressly

46 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 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 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

47 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 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 as shall be directed by the Required Banks; provided that, unless and until Administrative Agent shall have received such directions, 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. Indemnification of Administrative Agent. Each Bank agrees to indemnify Administrative Agent (to the extent not reimbursed under Section 12.04 or under the applicable provisions of any other Loan Document, but without limiting the obligations of Borrower under Section 12.04 or such 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 the applicable provisions of any other Loan Document or the enforcement of any of the terms hereof or thereof or of any such other documents or instruments; provided 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.

48 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 other Bank, and based on such documents and information as it has deemed appropriate, made its own credit analysis of Borrower and the 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 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 or books of Borrower. 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 (or any 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.

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 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 Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. After any retiring Administrative Agent's removal hereunder

49 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 function 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. 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 customary rate set by Administrative Agent for the correction of errors among Banks for three (3) Banking Days and thereafter at the Base Rate.

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 or regulations relating thereto. Without limiting the effect of the foregoing, if any Bank is not created or organized under the laws of the United States of America or any state thereof, such Bank will furnish to

50 Administrative Agent Form 4224 or Form 1001 of the Internal Revenue Service, 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. Minimum Commitment by UBS. Notwithstanding the provisions of Section 12.05, subsequent to the Closing Date, UBS hereby agrees 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 of to the Parent or a majority-owned subsidiary of UBS.

SECTION 10.15. 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 10.16. 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 10.17. Possession of Documents. Each Bank shall keep possession of its own Notes. Administrative Agent shall hold all the other Loan Documents 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.

51 ARTICLE XI

NATURE OF OBLIGATIONS

SECTION 11.01. Absolute and Unconditional Obligations. Borrower acknowledges and agrees that its 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 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 and liabilities of Borrower under this Agreement and other Loan Documents 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 security or guarantee therefor or right of setoff with respect thereto.

SECTION 11.02. Non-Recourse to TRG Partners. 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 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 any collateral hereafter given for the Loans 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 any collateral hereafter given for the Loans, any of the TRG Partners) as a party

52 defendant in, and to enforce against any collateral hereafter given for the Loans 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 any collateral hereafter given for the Loans or Borrower, but not otherwise) or shall be enforced against the TRG Partners, their successors and assigns, or their assets.

ARTICLE XII

MISCELLANEOUS

SECTION 12.01. Binding Effect of Request for Advance. Borrower agrees that, by its acceptance of any advance of proceeds of the Loans under this Agreement, it 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 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 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 Loan Document, or waive any default in the payment of principal, interest or any other amount due hereunder or under any Loan Documents; (3) change the definition of Required Banks; (4) amend this Section or any other provision requiring the consent of all the Banks; or (5) waive any default under paragraph (5) of Section 9.01. 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.

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

53 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 UBS (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 UBS; however, in no event will such counsel, without the prior written consent of UBS, not to be unreasonably withheld, be counsel to Borrower or to any of its Affiliates.

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 UBS (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-

54 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 UBS'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 UBS 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 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 (the "Participations") subject to Borrower's consent, provided there exists no Event of Default, which consent shall not be unreasonably withheld or delayed. In the event of any such grant by a Bank of a participating interest to a Participant, whether or not 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 such a participating interest 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

55 waiver of any provision of this Agreement or any other Loan Document; provided that such participation agreement may provide that such Bank will not agree to any modification, amendment or waiver of this Agreement described in Section 12.02 without the consent of the Participant.

Any Bank having a Loan Commitment in an amount exceeding $15,000,000 may at any time assign to any bank or other institution with the acknowledgment of Administrative Agent and, provided there exists no Event of Default, the consent of Borrower, which consent 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 (each Consented Assignee or subsidiary bank or institution, an "Assignee") all, or a proportionate part of all, of its rights and obligations under this Agreement and its Notes, 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 $2,500, 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 Notes. The oblgations evidenced by such substitute notes shall constitute "Obligations" for all purposes of this Agreement and the other Loan Documents. If the Assignee is not incorporated under the laws of the United States of America 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 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.

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

56 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.

Notwithstanding the foregoing provisions of this Section, prior to the consummation of the Unit Redemption Transaction, no Bank shall assign, grant, convey, or transfer all or any portion of or interest (participation or otherwise) in the Loan to any Person if such Person is (i) a greater than 10% partner (determined in accordance with Treasury Regulations Section 1.752-2(d)(1) of the Code) of Borrower (a "Greater than 10% Partner"), (ii) an 80% or greater partner, member or shareholder of any Greater than 10% Partner or (iii) a person who is under 80% or greater common ownership with (x) a Greater than 10% Partner or (y) a shareholder, member or partner of any Greater than 10% Partner. For purposes of clauses (ii) and (iii), percentage ownership shall be determined pursuant to Sections 267(b) and 707(b) of the Code as modified by Treasury Regulations Section 1.752-4. Any Person described above is referred to as a "Disqualified Person". Any Person who becomes a Bank or Participant in accordance with the terms of this Agreement agrees to be bound by the provisions of this Section and, other than obtaining, in connection with a bankruptcy proceeding of a constituent partner of Borrower, any interest as (a) a partner in Borrower or (b) an 80% or greater interest as a partner, member or shareholder of any partner of Borrower, agrees not to take any action that would make it a Disqualified Person. In addition, during the term of the Loans, any Bank or Participant shall be a "qualified person" within the meaning of Section 465(b)(6)(D)(i) and 49(a)(1)(D)(iv) of the Code.

SECTION 12.06. 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 12.07. Notices. Unless the party to be notified otherwise notifies the other party in writing as provided in this Section, and except as otherwise provided in this Agreement, notices shall be given to Administrative Agent by telephone, confirmed by writing, and to the Banks and to Borrower by ordinary mail or overnight courier addressed to such party at its address on the signature page of this Agreement. Notices shall be effective (1) if by telephone, at the time of such telephone conversation, (2) if given by mail, three (3) days after mailing and (3) if given by overnight courier, upon receipt.

SECTION 12.08. Setoff. Borrower agrees that, 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, at its option, 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 when due (regardless of whether such balances are then due to Borrower), in which case it shall promptly

57 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 12.09. Year 2000. Borrower represents, warrants and covenants that Borrower has taken and shall take all action reasonably necessary to assure that its data processing and information technology systems are capable of effectively processing data and information, including dates on and after January 1, 2000, and shall not cease to perform, or provide, or cause any software and/or system which is material to its operations or any interface therewith to provide, invalid or incorrect results as a result of date functionality and/or data, or otherwise experience any material degradation of performance or functionality arising from, relating to or including date functionality and/or data which represents or references different centuries or more than one century or leap years, and that all such systems shall be reasonably effective and accurate in managing and manipulating data derived from, involving or relating in any way to dates (including single century formulas and multi-century or leap year formulas), and will not cause a material abnormally ending scenario within such systems or in any software and/or system with which such systems interface, or generate materially incorrect values or invalid results involving such dates. At the request of Administrative Agent, Borrower shall provide Administrative Agent with reasonably acceptable assurance of Borrower's year 2000 capability.

SECTION 12.10. 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 12.11. 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 12.12. 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 12.13. 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 12.14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

58 SECTION 12.15. 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 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 any collateral; (5) any right or claim of right to cause a marshalling of the assets of Borrower; 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 other Loan Documents.

SECTION 12.16. 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

59 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 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.

60 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP, a Delaware limited partnership

By /s/ Steven Eder ------Steven 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 500 North Woodward Avenue Suite 100 - P.O. Box 908 Bloomfield Hills, Michigan 48303-0908 Attention: Martin L. Katz, Esq.

61 UBS AG, NEW YORK BRANCH (as Bank and Administrative Agent)

By /s/ Tom Curtin ------Name: Tom Curtin Title: Managing Director

By /s/ Jeffrey W. Wald ------Name: Jeffrey W. Wald Title: Executive Director

Address for notices and Applicable Lending Office:

299 Park Avenue New York, New York 10171 Attention: Ms. Xiomara Martez Telephone: (212) 821-3872 with copy to:

Dewey Ballantine LLP 1301 Avenue of the Americas New York, New York 10019-6092 Attention: George C. Weiss, Esq.

62 THE SECOND AMENDMENT AND RESTATEMENT

AGREEMENT OF LIMITED PARTNERSHIP

THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP

a Delaware limited partnership

September 30, 1998 TABLE OF CONTENTS

THE SECOND AMENDMENT AND RESTATEMENT OF AGREEMENT OF LIMITED PARTNERSHIP OF THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP a Delaware limited partnership

Page

I -- CONTINUATION; CHANGE OF JURISDICTION; NAME; PRINCIPAL OFFICE; AGENT FOR SERVICE OF PROCESS; FILING OF CERTIFICATE(S); TERM; TITLE TO PARTNERSHIP PROPERTY.

Section 1.1 Continuation; Change of Jurisdiction...... 2 Section 1.2 Name...... 2 Section 1.3 Principal Office; Agent for Service of Process...... 2 Section 1.4 Filing of Certificate(s) as Required...... 2 Section 1.5 Term...... 3 Section 1.6 Title to Partnership Property...... 3 II -- DEFINITIONS...... 4 III -- PURPOSES AND POWERS; PARTNERSHIP ONLY FOR PURPOSES SPECIFIED; REPRESENTATIONS AND WARRANTIES; CERTAIN COVENANTS. Section 3.1 Purposes and Powers of the Partnership...... 14 Section 3.2 Partnership Only for Purposes Specified...... 17 Section 3.3 Representations and Warranties by the Partners; Certain Covenants...... 17 Section 3.4 Real Estate Investment Trust Requirements...... 18 Section 3.5 ERISA Requirement...... 19

IV -- CAPITAL CONTRIBUTIONS; OPENING CAPITAL ACCOUNT BALANCES; PREFERRED

EQUITY; ANTICIPATED FINANCING; CAPITAL ACCOUNTS; PARTNERSHIP INTERESTS; UNITS OF PARTNERSHIP INTEREST; PERCENTAGE INTERESTS; PARTNERSHIP INTEREST CERTIFICATES; PURCHASE OF FRACTIONAL UNITS; ADJUSTMENT OF UNITS OF PARTNERSHIP INTEREST.

Section 4.1 Capital Contributions; Opening Capital Account Balances; Preferred Equity...... 20 Section 4.2 Anticipated Financing...... 20 Section 4.3 No Right to Withdraw Capital; No Requirement of Further Contributions...... 21 Section 4.4 No Interest on Capital Contributions or Capital Accounts...... 21 Section 4.5 Capital Accounts...... 21 Section 4.6 Partnership Interests; Units of Partnership Interest; Percentage Interests...... 22 Section 4.7 Partnership Interest Certificates...... 23 Section 4.8 Purchase of Fractional Units of Partnership Interest; Adjustment of Units of Partnership Interest...... 23 V -- ALLOCATIONS; DISTRIBUTIONS; BANK ACCOUNTS; BOOKS OF ACCOUNT; TAX RETURNS; ACCOUNTING AND REPORTS; PARTNERSHIP FISCAL YEAR. Section 5.1 Allocations...... 25 Section 5.2 Distributions...... 28 Section 5.3 Guaranteed Payments; TCO's Right to Convert...... 28 Section 5.4 Bank Accounts and Other Investments...... 29 Section 5.5 Books of Account...... 29 Section 5.6 Tax Returns...... 29 Section 5.7 Accounting and Reports, Etc...... 30 Section 5.8 Partnership Fiscal Year...... 30

Page ----

VI -- MANAGEMENT; AUTHORITY AND AUTHORIZED ACTIONS BY THE MANAGING GENERAL PARTNER; EXTRAORDINARY TRANSACTIONS; ANNUAL BUDGET; NOTICES; STANDARD OF CONDUCT; MASTER SERVICES AGREEMENT AND CORPORATE SERVICES AGREEMENT; ABSENCE OF AUTHORITY OF PARTNERS OTHER THAN THE MANAGING GENERAL PARTNER; FIDELITY BONDS AND INSURANCE; ENGAGEMENT OF PARTNERS' AFFILIATES; INDEMNITY AND REIMBURSEMENT; TAX MATTERS PARTNER. Section 6.1 Management; Authority and Authorized Actions by the Managing General Partner...... 31 Section 6.2 Delegation of Authority and Designation of Officers.. 31 Section 6.3 Compensation of Certain Employees of the Manager; Issuance of Incentive Options...... 32 Section 6.4 Annual Budget; Notices...... 32 Section 6.5 Master Services Agreement and Corporate Services Agreement; Engagement of Partners' Affiliates...... 33 Section 6.6 Absence of Authority of Non-Managing Partners...... 33 Section 6.7 Fidelity Bonds and Insurance...... 33 Section 6.8 Execution of Legal Instruments...... 33 Section 6.9 Indemnity and Reimbursement; Advancement of Expenses and Insurance 33...... 33 Section 6.10 Tax Matters Partner...... 34 VII -- OTHER VENTURES...... 36 VIII -- TRANSFERS OF UNITS OF PARTNERSHIP INTEREST; SUBSTITUTION OF PARTNERS; ADDITIONAL PARTNERSHIP INTERESTS; CONVERSION OF PARTNERSHIP INTERESTS. Section 8.1 Transfers...... 37 Section 8.2 Substitution of Partners...... 38 Section 8.3 Failure or Refusal to Grant Consent...... 39 Section 8.4 Issuance of Additional Interests to TCO and Other Persons or of Incentive Interests to Certain Persons. 39 Section 8.5 Conversion of Partnership Interests...... 40 Section 8.6 No Change to TG Receivable Documents...... 40 IX -- WITHHOLDING...... 41

X -- DISABLING EVENT OR EVENT OF WITHDRAWAL IN RESPECT OF A PARTNER; SUCCESSION OF INTERESTS.

Section 10.1 Disabling Event or Event of Withdrawal in Respect of a Partner 42...... 42 Section 10.2 References to "Partner" and "Partners" in the Event of Successors...... 43 Section 10.3 Waiver of Dissolution if Transfer is in Full Compliance with Agreement; Negation of Right to Dissolve Except as Herein Provided; No Withdrawal...... 43 XI -- TERMINATION OF THE PARTNERSHIP, WINDING UP, AND LIQUIDATION.

Section 11.1 Liquidation of the Assets of the Partnership and

Disposition of the proceeds Thereof...... 45 Section 11.2 Cancellation of Certificates...... 46 Section 11.3 Return of Capital...... 46 XII -- POWER OF ATTORNEY...... 47 XIII -- MISCELLANEOUS Section 13.1 Notices...... 48 Section 13.2 Applicable Law...... 48 Section 13.3 Entire Agreement...... 48 Section 13.4 Word Meanings; Gender...... 48 Section 13.5 Section Titles...... 48 Section 13.6 Waiver...... 49 Section 13.7 Separability of Provisions...... 49 Section 13.8 Binding Agreement...... 49 Section 13.9 Equitable Remedies...... 49 Section 13.10 Partition...... 49 Section 13.11 Amendment...... 49 Section 13.12 No Third Party Rights Created Hereby...... 50 Section 13.13 Liability of Partners...... 50 Section 13.14 Additional Acts and Instruments...... 50 Section 13.15 Agreement in Counterparts...... 50

ii Section 13.16 Attorneys-In-Fact...... 50 Section 13.17 Execution by Trustee...... 50 Section 13.18 Lost Partnership Interest Certificates...... 51 Schedule A Units of Partnership Interest and Percentage Interests of the Partners...... Schedule B Certain Interests of Partners in Tenants of Regional Centers...... Schedule C Capital Account Balances of the Partners as of September 30, 1998...... Schedule D Initial Book Value of Partnership Assets as of September 30, 1998......

Schedule E Designated Properties...... Exhibit A Form of Partnership Interest Certificate......

iii THE SECOND AMENDMENT AND RESTATEMENT OF AGREEMENT OF LIMITED PARTNERSHIP OF THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP a Delaware limited partnership

THIS SECOND AMENDMENT AND RESTATEMENT OF AGREEMENT OF LIMITED PARTNERSHIP (hereinafter, as the same may be amended and/or supplemented, referred to as this "Agreement") is made the 30th day of September, 1998, by, between, and among TAUBMAN CENTERS, INC. ("TCO"), a Michigan corporation, TG PARTNERS LIMITED PARTNERSHIP ("TG"), a Delaware limited partnership, and TAUB-CO MANAGEMENT, INC. ("Taub-Co"), a Michigan corporation, who as the Appointing Persons pursuant to Section 13.11 of the Amended and Restated Partnership Agreement, as amended, have the full power and authority to amend the Amended and Restated Partnership Agreement, as amended, on behalf of all of the partners of the Partnership with respect to the matters herein provided.

RECITALS:

A. Effective November 30, 1992, the parties hereto together with others entered into the Amended and Restated Limited Partnership Agreement of The Taubman Realty Group Limited Partnership (the "Amended and Restated Partnership Agreement").

B. The Amended and Restated Partnership Agreement was subsequently amended effective September 30, 1997 (the "Amended and Restated Partnership Agreement, as amended") in certain respects.

C. On September 23, 1998, the Partnership formed two (2) limited liability companies (the "Companies") pursuant to the Delaware Limited Liability Company Act by filing Certificates of Formation with the Secretary of State of the State of Delaware and, in exchange for all of the membership interests in each of the Companies, contributed to the Companies all of its right, title, and interest in and to certain of its assets, subject to certain liabilities.

D. On September 30, 1998, the Partnership distributed the Partnership's entire interest in the Companies to GMPTS in redemption of GMPTS's entire interest in the Partnership, and GMPTS executed a Certificate of Withdrawal from the Partnership.

E. Pursuant to Section 6.1(b) of the Amended and Restated Partnership Agreement, as amended, as a result of GMPTS's withdrawal from the Partnership, GMPTS is no longer an Appointing Person, the remaining Appointing Persons now being only TCO, TG, and Taub-Co.

F. The parties hereto now wish to amend and restate in its entirety the Amended and Restated Partnership Agreement, as amended, to reflect the redemption of GMPTS's entire interest in the Partnership and GMPTS's withdrawal from the Partnership, to provide for various new terms of the Partnership, and for certain other purposes. NOW, THEREFORE, the parties hereto agree that the Amended and Restated Partnership Agreement, as amended is hereby further amended and restated in its entirety to read as follows:

CONTINUATION; CHANGE OF JURISDICTION; NAME; PRINCIPAL OFFICE; AGENT FOR SERVICE OF PROCESS; FILING OF CERTIFICATE(S); TERM; TITLE TO PARTNERSHIP PROPERTY.

Section 1.1 Continuation; Change of Jurisdiction.

The parties hereto do hereby continue the Partnership as a Delaware limited partnership pursuant to the applicable laws of the State of Delaware, including the Delaware Revised Uniform Limited Partnership Act as in effect in the State of Delaware, all as the same may be amended from time to time (all of such laws being hereinafter referred to as the "Partnership Law"), upon the terms and conditions herein set forth. If the Managing General Partner shall cause the Partnership to change its jurisdiction, by merger, consolidation, or in any other fashion or manner, the Partnership Law shall, for all purposes of this Agreement, refer to the applicable laws of the new jurisdiction, as the same may be amended from time to time. Without any further act, approval or vote of the Partners, the Managing General Partner shall be authorized on behalf of the Partners and the Partnership, as the case may be, to amend and/or restate this Agreement and the Certificate of Limited Partnership, and to execute a plan of merger or similar document, and all other documents determined by the Managing General Partner, in all such cases as shall be necessary to effect solely a change of jurisdiction.

Section 1.2 Name.

The name of the Partnership is "The Taubman Realty Group Limited Partnership" or such other name or names as the Managing General Partner shall select from time to time in compliance with the Partnership Law. The Managing General Partner shall send written notice of any such name change to the Partners.

Section 1.3 Principal Office; Agent For Service of Process.

The principal office of the Partnership is located at 200 East Long Lake Road, Bloomfield Hills, Michigan 48304, or at such other address(es) as shall be designated from time to time by the Managing General Partner with written notice thereof by the Managing General Partner to the other Partners. The address of the office of the Partnership in the State of Delaware required to be maintained pursuant to the Partnership Law is Corporation Service Company, 1013 Centre Road, Wilmington, Delaware 19805, or such other address(es) as may be designated from time to time by the Managing General Partner, with written notice thereof by the Managing General Partner to the other Partners. The name and address of the registered agent for service of process on the Partnership in the State of Delaware is Corporation Service Company, 1013 Centre Road, Wilmington, Delaware 19805, or such other agent and address as may be designated from time to time by the Managing General Partner in compliance with the Partnership Law, with written notice thereof by the Managing General Partner to the other Partners.

Section 1.4 Filing of Certificate(s) as Required.

The Managing General Partner has caused or shall cause the execution and filing of an appropriate partnership and/or assumed or fictitious name certificate or certificates, or like instrument or instruments, or other filings or applications, at any time and from time to time as required by the Partnership Law or the law of any applicable jurisdiction in connection with the existence or activities or business of the Partnership, a change in the jurisdiction of the Partnership, and/or the use of a name (which name may be different than the name of the Partnership), and all amendments thereto of record. Copies of such certificates, instruments or other filings or applications shall be furnished on a timely basis to all Partners.

2 Section 1.5 Term.

The term of the Partnership shall end, and the Partnership shall dissolve, on the first to occur of (i) the recordation of the last (or only) deed, or the execution and delivery of the last (or only) assignment, completing the conveyance and transfer by the Partnership of all property (other than cash and cash equivalents) owned by the Partnership to one or more bona fide purchasers for value, or if such purchaser or purchasers give the Partnership a purchase money obligation, then upon the payment in full by such purchaser or purchasers of such obligation or upon the disposition for cash of such obligation, provided that neither a sale and leaseback by the Partnership nor any other transfer of title for financing purposes or pursuant to the provisions of Section 1.6 hereof, shall be deemed to be a sale for the purpose of dissolving and terminating the Partnership, (ii) the occurrence of any event which would, under the terms of this Agreement or the Partnership Law, result in the dissolution of the Partnership; provided, however, that the term of the Partnership shall not end and the Partnership shall not be dissolved upon the occurrence of such an event if the Partnership is continued as provided in this Agreement, (iii) an entry of a decree of judicial dissolution pursuant to ss.17- 802 of the Partnership Law, or (iv) December 31, 2090.

Section 1.6 Title to Partnership Property.

All property owned by the Partnership, whether real or personal, tangible or intangible, shall be deemed to be owned by the Partnership as an entity, and no Partner, individually, shall have any ownership of such property. The Partnership may hold any of its property in its own name or in the name of one or more nominees.

3 II.

DEFINITIONS.

Unless the context in which a term is used clearly indicates otherwise, the following terms have the following respective meanings when used in this Agreement, and the singular shall include the plural and vice versa, unless the context requires otherwise:

"AAT" means A. Alfred Taubman.

"AAT Affiliates" means AAT, and any Affiliate of AAT or of any member of his Immediate Family.

"Additional Interest" is defined in Section 8.4(a) hereof.

"Additional Required Amount" means, for the relevant period, an amount, as set forth in the Additional Required Amount Notice, equal to the greater of (i) the Tax Liability, and (ii) the Net Capital Gain.

"Additional Required Amount Notice" is defined in Section 6.4 hereof.

"Additional Tax" is defined in Article IX hereof.

"Affiliate" and "Affiliates" 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 fifty percent (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 is the sole managing general partner, or is the sole managing member, or which 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, the sole managing general partner, or the sole managing member of, or who Controls, such Person.

"Affiliate Financing" means financing or refinancing obtained from a Partner or an Affiliate of a Partner by the Partnership or an Owning Entity, as the case may be.

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

"Alternative Minimum Tax Distribution Amount" means, for each Partnership Fiscal Year, an amount equal to the quotient obtained by dividing (i) the alternative minimum tax (as determined pursuant to Sections 55 through 59 of the Code) of TCO for such Partnership Fiscal Year, by (ii) the Percentage Interest of TCO on the Relevant Date.

"Amended and Restated Partnership Agreement" is defined in Recital A.

"Amended and Restated Partnership Agreement, as amended" is defined in Recital B.

"Annual Budget" is defined in Section 6.4 hereof.

"Annual Development Budget" is defined in Section 6.4 hereof.

"Annual Operating Budget" is defined in Section 6.4 hereof.

"Appointing Person" means TCO, TG for so long as the aggregate Percentage Interest held by Original Partner Affiliates and TTC Affiliates is not less than seven and 7/10ths percent (7.7%), determined by including the total number of Units of Partnership Interest over which Original Partner Affiliates and TTC Affiliates have Incentive Options to the extent such Incentive Options are vested, and Taub-Co for so long as Taub- Co has an interest in the Person that is the Manager and the aggregate Percentage Interest held by Original Partner Affiliates and TTC Affiliates is at least three percent (3%), determined by including the total number of Units of Partnership Interest over which Original Partner Affiliates and TTC Affiliates have Incentive Options to the extent such Incentive Options are vested; it being understood that inasmuch as the Partnership's partnership committee has been eliminated, Appointing Persons are only relevant for purposes of Section 13.11 regarding amendment of this Agreement.

4 "Assigned Interest" is defined in Section 8.3(b) hereof.

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

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

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

"Book Value" and "Book Values" are defined in Section 4.5(b) hereof.

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

"Capital Account" is defined in Section 4.5(a) hereof.

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

"Communication" and "Communications" are defined in Section 13.1(a) hereof.

"Companies" is defined in Recital C.

"Conditional Transfer Determination" is defined in Section 8.1(e) hereof.

"Control(s)" (and its correlative 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 Person or 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.

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

5 "Deficiency Dividend" means, for any Partnership Fiscal Year, an amount equal to the quotient obtained by dividing (i) the adjustment (as defined in Section 860(d)(2) of the Code) in respect of a determination (as defined in Section 860(e) of the Code) in respect of TCO for such Partnership Fiscal Year, by (ii) the Percentage Interest of TCO on the Relevant Date. "Deficiency Dividend Notice" is defined in Section 6.4 hereof.

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

"Designee Notice" is defined in Section 5.2(b) hereof.

"Development Opportunities" means any regional retail shopping center developments and opportunities (through contract, option, or other rights) to develop, redevelop, or expand regional retail shopping centers, including in all such cases Peripheral Property in respect thereof, in which the Partnership has a Direct or Indirect ownership interest and which is not yet a Regional Center. Reference to a Development Opportunity includes any one of the Development Opportunities.

"Development Opportunity Interest" or "Development Opportunity Interests" means the interest or interests in a Development Opportunity or Development Opportunities then held by the Partnership either Directly or Indirectly as the holder of a Beneficial Interest, Directly or Indirectly, in an Owning Entity or Owning Entities that own a Development Opportunity or Development Opportunities.

"Direct or Indirect" or "Directly or Indirectly", when used with respect to a Person's, a Partner's, or the Partnership's interest in another partnership, limited liability company, or joint venture which owns a Development Opportunity or a Regional Center, or a Development Opportunity Interest or a Regional Center Interest, means and includes all interests of, and acting in respect of all interests of, the partner or partners or member or members therein, whether as an owner or ground lessee, as a partner, member, or joint venturer of a partnership, limited liability company, or joint venture which owns a Development Opportunity or a Regional Center, as a stockholder of a corporation which in turn owns an interest in a partnership, limited liability company, or joint venture having an interest, direct or indirect, in a Development Opportunity or a Regional Center, and as a beneficiary of a trust which has legal title to a Development Opportunity or a Regional Center or owns a partnership interest, limited liability company interest, or joint venture interest in a partnership, limited liability company, or joint venture which owns a Development Opportunity or a Regional Center, in each such case as the context requires.

"Disabled Partner," "Disabled General Partner," and "Disabled Limited Partner" are defined in Section 10.1(a)(2) hereof.

"Disabling Event" is defined in Section 10.1(a)(1) hereof.

"Distribution Date" is defined in Section 5.2(a)(i) hereof.

"Dollars" or "$" means United States dollars.

"Effective Date" means the date of the execution and delivery of this Agreement.

"Equity Shares" means the shares of the common stock of TCO.

6 "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time (or any corresponding provisions of succeeding law).

"Estimated Minimum Distribution Amount" means, for each Partnership Fiscal Year, an amount equal to the greater of (i) the quotient obtained by dividing (1) the sum of (x) TCO's allocable share of the Partnership's estimated Real Estate Investment Trust Taxable Income for such Partnership Fiscal Year (determined without regard to any deduction for dividends paid (as defined in Section 561 of the Code)), and by excluding any net capital gain (as defined in Section 1222(11) of the Code), and (y) TCO's allocable share of the Partnership's estimated net income from foreclosure property for such Partnership Fiscal Year, minus TCO's allocable share of the Partnership's estimated excess noncash income (as determined under Section 857 (e) of the Code), if any, for such Partnership Fiscal Year, by (2) the Percentage Interest of TCO on the Relevant Date, and (ii) the estimated Ordinary Tax Liability for such Partnership Fiscal Year.

"Event of Withdrawal" is defined in Section 10.1(a)(5) hereof.

"Excise Tax Distribution Amount" means, for each Partnership Fiscal Year, an amount equal to the quotient obtained by dividing (i) the excise tax imposed pursuant to Section 4981(a) of the Code on TCO for such Partnership Fiscal Year, by (ii) the Percentage Interest of TCO on the Relevant Date.

"Extraordinary Transaction" means (i) a sale, exchange, or other disposition (including the encumbering) of all or substantially all of the Partnership's assets or of any designated property described on Schedule E hereto, (ii) a merger (including a triangular merger), consolidation, or other combination of the Partnership with another Person, (iii) an issuance of Additional Interests to any Person (including a Partner other than TCO) such that such Person together with any of such Person's Affiliates would own a Percentage Interest in excess of five percent (5%), (iv) the placing of the Partnership into Bankruptcy, (v) a recapitalization of the Partnership, or (vi) the dissolution of the Partnership, in each such case in any one (1) transaction or series of transactions.

"Family Trust" means, with respect to an 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 or not a trust is a Family Trust, the fact that one or more of the beneficiaries (but not the sole beneficiary) of the trust includes a Person or Persons, other than a member of such individual's Immediate Family, entitled to a distribution after the death of the settlor if he, she, it, or they shall have survived the settlor of such trust, which distribution may be made of something other than a Partnership Interest 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, an attorney that is a member of the Bar of any State in the United States, and/or an individual or individuals approved by the Managing General Partner.

"Fractional Unit" means a portion of, or less than the whole of, a Unit of Partnership Interest.

"GAAP" means generally accepted accounting principles, consistently applied in the United States.

"General Partner" and "General Partners" are (i) those Persons identified as such on Schedule A hereto, in their capacities as general partners of the Partnership, (ii) the successors to any portion or all of the Partnership Interest of those Persons identified as General Partners on Schedule A hereto who are admitted to the Partnership as general partners pursuant to Section 8.2 hereof, and (iii) any Person or Persons to whom an Additional Interest as a general partner is issued pursuant to Section 8.4 hereof and who is admitted to the Partnership as a general partner pursuant to Section 8.4 hereof.

"GMPTS" means "GMPTS Limited Partnership, a Delaware limited partnership, all of the beneficial interests of which are held by General Motors Hourly-Rate Employees Pension Trust u/t/a dated March 1, 1983, as amended, and General Motors Salaried Employees Pension Trust u/t/a dated March 1, 1983, as amended.

7 "Gross Income" means the income of the Partnership determined pursuant to Section 61 of the Code before deduction of items of expense or deduction.

"Guaranteed Payment" means, as to each series of Preferred Equity, the applicable Preferred Rate multiplied by the balance of such series of Preferred Equity during the period to which the Guaranteed Payment relates, commencing on the date of the contribution of such Preferred Equity pursuant to Section 4.1(b) hereof, determined on the basis of a year of three hundred sixty (360) Days, consisting of twelve (12), thirty (30)-day months, cumulative to the extent not paid in any given month pursuant to Section 5.3 hereof.

"Immediate Family" means, with respect to a Person, (i) such Person's spouse (former or then current), (ii) such Person's parents and grandparents, and (iii) ascendents 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).

"Incentive Interest" is defined in Section 8.4(b) hereof.

"Incentive Options" is defined in Section 6.3 hereof.

"Incentive Option Plan" means an incentive option plan or plans (whether now existing or hereafter established) pursuant to which the Partnership has granted or shall grant Incentive Options, as the same may be amended from time to time.

"Income Source Tax Distribution Amount" means, for each Partnership Fiscal Year, an amount equal to the quotient obtained by dividing (i) the tax, if any, of TCO calculated pursuant to Section 857(b)(5) of the Code for such Partnership Fiscal Year, by (ii) the Percentage Interest of TCO on the Relevant Date.

"Indemnified Person" means each Partner, each officer, each member of the TCO Board, each member of any committee established by the TCO Board, each Person designated or delegated by a Partner, an officer, the TCO Board, or a member of a committee established by the TCO Board, and each employee, partner, principal, shareholder, agent, director, or officer of a Partner.

"Knowing" means with respect to any Person that is an individual, the conscious awareness by such Person of the matter at issue.

"Limited Partner" and "Limited Partners" are (i) those Persons identified as such on Schedule A hereto, in their capacities as limited partners of the Partnership, (ii) the successors to any portion or all of the Partnership Interest of those Persons identified as Limited Partners on Schedule A hereto who are admitted to the Partnership as limited partners pursuant to Section 8.2 hereof, and (iii) any Person or Persons to whom an Additional Interest as a limited partner is issued pursuant to Section 8.4 hereof and who is admitted to the Partnership as a limited partner pursuant to Section 8.4 hereof.

"Liquidator" is defined in Section 11.1(a).

"Losses" is defined in Section 5.1(a) hereof.

"Majority in Interest of the Non-Managing Partners" means those Non-Managing Partners holding in excess of fifty percent (50%) of the aggregate Percentage Interests held by all such Non-Managing Partners.

"Major Stores" means those stores occupied by a single Person, the gross leasable floor area of which is in excess of forty thousand (40,000) square feet.

"Manager" means that Person who has by written contract with the Partnership agreed to provide management, administration, leasing and development services for the properties of the Partnership. On the Effective Date, the Manager is TTC pursuant to the Master Services Agreement.

"Managing General Partner" means TCO, as defined in the Preamble to this Agreement.

"Master Services Agreement" means the management, administration, leasing and development services agreement dated as of November 30, 1992, between the Partnership and TTC, engaging TTC as the Manager,

8 as the same may be amended from time to time, or any agreement entered into hereafter in replacement thereof.

"Minimum Distribution Amount" means, for each Partnership Fiscal Year, an amount equal to the greater of (i) the quotient obtained by dividing (1) the sum of (x) TCO's allocable share of the Partnership's Real Estate Investment Trust Taxable Income for such Partnership Fiscal Year (determined without regard to any deduction for dividends paid (as defined in Section 561 of the Code)), and by excluding any net capital gain (as defined in Section 1222(11) of the Code), and (y) TCO's allocable share of the Partnership's net income from foreclosure property for such Partnership Fiscal Year, minus TCO's allocable share of the Partnership's excess noncash income (as determined under Section 857(e) of the Code), if any, for such Partnership Fiscal Year, by (2) the Percentage Interest of TCO on the Relevant Date, and (ii) the Ordinary Tax Liability for such Partnership Fiscal Year.

"Minimum Distribution Amount Adjustment" means, for each Partnership Fiscal Year, an amount, as set forth in the Minimum Distribution Amount Adjustment Notice, equal to the excess (if any) of (i) the sum of (1) the Minimum Distribution Amount for such Partnership Fiscal Year, (2) the Net Capital Gain for such Partnership Fiscal Year, (3) the Prohibited Transaction Tax Distribution Amount for such Partnership Fiscal Year, (4) the Income Source Tax Distribution Amount for such Partnership Fiscal Year, (5) the Alternative Minimum Tax Distribution Amount for such Partnership Fiscal Year, and (6) the Excise Tax Distribution Amount for such Partnership Fiscal Year, over (ii) the amount of cash actually distributed to the Partners pursuant to Section 5.2(a) hereof in respect of such Partnership Fiscal Year.

"Minimum Distribution Amount Adjustment Notice" is defined in Section 6.4 hereof.

"Minimum Gain" means an amount determined in accordance with Regulations Section 1.704-2(d) by computing, with respect to each Nonrecourse Liability of the Partnership, the amount of gain, if any, that the Partnership would realize if it disposed of the property subject to such liability for no consideration other than full satisfaction thereof, and by then aggregating the amounts so computed.

"Minimum Gain Chargeback" is defined in Section 5.1(d)(1) hereof.

"Net Capital Gain" means, for the relevant period, an amount equal to the quotient obtained by dividing (i) the net capital gain (as defined in Section 1222(11) of the Code) that is allocable to TCO for such period, by (ii) the Percentage Interest of TCO on the Relevant Date.

"Ninety Day Period" is defined in Section 10.1(b) hereof.

"Non-Managing Partners" means all of the Partners other than the Managing General Partner.

"Nonrecourse Deductions" is defined in Regulations Section 1.704-2(b)(1).

"Nonrecourse Liabilities and Nonrecourse Liability" are defined in Regulations Section 1.704- 2(b)(3).

"Ordinary Tax Liability" means, for each Partnership Fiscal Year, an amount equal to the product of (i) the highest individual federal income tax rate applicable to ordinary income in effect for such Partnership Fiscal Year, and (ii) the largest quotient obtained by dividing (a) each Partner's allocable share of the taxable income of the Partnership for such Partnership Fiscal Year, determined by taking into account allocation of items of income and deduction pursuant to Section 704(c) of the Code and by excluding any items giving rise to a capital gain or a capital loss, by (b) such Partner's Percentage Interest on the Relevant Date.

"Original Assignor" is defined in Section 8.3(b) hereof.

"Original Partner" means each of those Persons listed on Schedule A hereto other than TCO and GMPTS.

"Original Partner Affiliates" means AAT Affiliates, each Original Partner, and any Affiliate of an Original Partner or of any member of an Original Partner's Immediate Family.

9 "Other Retail Property" or "Other Retail Properties" means a developed regional retail shopping center or centers, whether part of a mixed-use property or not, having a gross leasable area (including space occupied by Major Stores) in excess of Two Hundred Thousand (200,000) square feet.

"Owning Entity" means any Person, other than the Partnership, owning a Development Opportunity or a Regional Center, provided that the Partnership holds, Directly or Indirectly, a Beneficial Interest in such Person. Reference to the Owning Entities includes each Owning Entity.

"Owning Entity Agreement" means an agreement, in whatever form embodied (including, without limitation, within the partnership agreement, limited liability company agreement, or other document forming or governing an Owning Entity), providing for management, administration, leasing and/or development and/or like services between an Owning Entity and Taub-Co or TTC, including any such agreement entered into by an Owning Entity with Taub-Co prior to the Effective Date.

"Partner" and "Partners" are (i) those Persons named in the Preamble to this Agreement, (ii) the successors to any portion or all of the Partnership Interest of those Persons named in the Preamble to this Agreement who are admitted as a Partner or Partners pursuant to Section 8.2 hereof, and (iii) any Person or Persons to whom a Partnership Interest has been issued pursuant to Section 8.4 hereof.

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

"Partner Nonrecourse Debt Minimum Gain" is defined in Section 5.1(d)(2) hereof.

"Partner Nonrecourse Deduction" is defined in Regulations Section 1.704-2(i).

"Partnership" means The Taubman Realty Group Limited Partnership, a Delaware limited partnership.

"Partnership Accountants" means Deloitte & Touche and its successors, or any firm of independent certified public accountants of recognized national standing selected by the Managing General Partner.

"Partnership Fiscal Year" means the calendar year.

"Partnership Interest" is defined in Section 4.6(a) hereof.

"Partnership Interest Certificate" and "Partnership Interest Certificates" are defined in Section 4.7 hereof.

"Partnership Interest Ledger" means a ledger maintained at the principal office of the Partnership that shall set forth, among other things, the name and address of each Partner and the nature of the Partnership Interest of each Partner, the number of Units of Partnership Interest held by each Partner, and the current Percentage Interest of each Partner.

"Partnership Law" is defined in Section 1.1 hereof.

"Percentage Interest" is defined in Section 4.6(b) hereof.

"Peripheral Property" means the real property adjacent or related to a Development Opportunity or a Regional Center, owned by the Partnership or an Owning Entity and improved or unimproved and held as distinct from or in some manner differentiated from, but intended as integrated with, the Regional Center (or anticipated Regional Center).

"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.

"Pledge" means a pledge or grant of a mortgage, security interest, lien or other encumbrance in respect of a Partnership Interest.

"Preferred Equity" means, on any date, an amount equal to the aggregate contributions to the capital of the Partnership made by TCO pursuant to Section 4.1(b) hereof, to the extent such contributions have not yet

10 been converted to Additional Interests pursuant to Sections 5.3 and 8.4 hereof. Each contribution of Preferred Equity shall be designated as a separate series, e.g., Series A Preferred Equity.

"Preferred Rate" means, a fixed rate per annum, specified by TCO as to a given series of Preferred Equity, which rate shall be equal to the dividend rate for the Related Issue.

"Primarily Engaged" means, with respect to a private or public Person (other than an individual), that (i) Other Retail Properties held by such Person (other than an individual) at the relevant time represent at least twenty-five percent (25%) of the value of all of the assets of such Person (other than an individual), or (ii) at least twenty-five percent (25%) of the average annual gross revenues of such Person (other than an individual) during the immediately preceding twenty-four (24) month period were derived from the development and/or management of Other Retail Properties not owned by such Person (other than an individual), or (iii) if each of the percentages determined under clauses (i) and (ii) is less than twenty-five percent (25%), the percentages determined under both clauses (i) and (ii) in the aggregate equal at least forty-five percent (45%).

"Profits" is defined in Section 5.1(a) hereof.

"Prohibited Transaction" means such term as defined in Section 857(b)(6)(B)(iii) of the Code.

"Prohibited Transaction Tax Distribution Amount" means, for each Partnership Fiscal Year, an amount equal to the quotient obtained by dividing (i) one hundred percent (100%) of the net income of TCO derived from prohibited transactions (as defined in Section 857(b)(6)(B)(i) of the Code) for such Partnership Fiscal Year, by (ii) the Percentage Interest of TCO on the Relevant Date.

"Qualified Appraiser" means a Third Party designated by the Managing General Partner and who is a member in good standing of the American Institute of Real Estate Appraisers, or a Member, Appraisal Institute (or a member of the successor to either such organization).

"Qualified Institutional Transferee" means any transferee of a Partnership Interest that is or are (i) a pension fund, profit-sharing fund or similar fund, or 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, in each such case possessing more than Fifty Million Dollars ($50,000,000) in assets, (ii) an organization described in Section 509 of the Code, and having a Partner as a "substantial contributor" (as defined in Section 507(d)(2) of the Code), (iii) pooled funds for Keogh plans, individual retirement plans, profit-sharing plans, pension plans or similar tax-exempt plans, in each such case possessing more than One Hundred Million Dollars ($100,000,000) in assets, (iv) insurance companies or banks, in each such case possessing more than Two Billion Dollars ($2,000,000,000) in assets, (v) a domestic entity organized as a mutual fund or registered investment company in each case possessing more than One Hundred Million Dollars ($100,000,000) in assets, (vi) any other Person (a "QIT Entity"), all the Beneficial Interests in which at the time of such Transfer and thereafter are owned by one or more of the foregoing, or (vii) a QIT Entity that has as one (1) or more of its constituent partners, a foreign entity that is organized as a mutual fund or investment company that is not Primarily Engaged and, in each such case, that possesses more than One Hundred Million Dollars ($100,000,000) in assets, provided that such QIT Entity is at no time a nonresident alien, foreign corporation, foreign trust, or foreign estate, within the meaning of Section 7701 of the Code; provided that a Transfer to such transferee will not cause a prohibited transaction (as defined in Section 4975(c) of the Code or Section 406 of ERISA) to occur.

"QIT Entity" is defined in the definition of "Qualified Institutional Transferee."

"REAs" means reciprocal easement and operating or like agreements.

"Real Estate Investment Trust" means such term as defined in Section 856 of the Code.

"Real Estate Investment Trust Taxable Income" means such term as defined in Section 857(b)(2) of the Code.

"Record Partner" means a Person set forth as a Partner on the books and records of the Partnership. No Person other than a Person that is a Partner on the Effective Date shall be a Record Partner until such Person

11 has become a substitute Partner in the Partnership pursuant to Section 8.2 hereof, or has acquired an Additional Interest or an Incentive Interest pursuant to Section 8.4 hereof and has become a Partner in the Partnership pursuant to Section 8.4 hereof.

"Regional Center Interest" or "Regional Center Interests" means the interest or interests in a Regional Center or Regional Centers then held by the Partnership either Directly or Indirectly as the holder of a Beneficial Interest, Directly or Indirectly, in an Owning Entity or Owning Entities that own or owns a Regional Center or Regional Centers.

"Regional Centers" means those regional retail shopping centers, including Peripheral Property in respect thereof, and any other real property owned, acquired and/or developed by the Partnership, provided that some portion of the enclosed mall portion thereof is open for business to the public generally, in each case for so long as the Partnership has a Direct or Indirect Beneficial Interest therein. Reference to a Regional Center includes any one of the Regional Centers.

"Regulations" (including Temporary Regulations or Proposed Regulations) means Department of Treasury regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

"REIT Requirements" is defined in Section 3.4 hereof.

"Related Issue" and "Related Issues" are defined in Section 4.1(b) hereof.

"Relevant Date" means, (i) with respect to a Minimum Distribution Amount, the date of the Annual Budget setting forth such amount, or the date of an amendment thereto which provides a change in such amount, (ii) with respect to an Additional Required Amount, the date of the Additional Required Amount Notice in respect thereof, and (iii) with respect to a Minimum Distribution Amount Adjustment, or any component thereof, or a Tax Adjustment Amount, the date of the TCO Information Notice in respect thereof.

"Representative" is defined in Section 10.1(a)(3) hereof.

"Required Distribution Amount" means an amount, as set forth in the Annual Budget, equal to the aggregate cash (or cash per Unit of Partnership Interest) to be distributed to the Partners for such Partnership Fiscal Year, as such amount may be increased or decreased from time to time by the Managing General Partner, in consultation with the Manager, but in no event less than the Estimated Minimum Distribution Amount.

"Successor" is defined in Section 10.1(a)(4) hereof.

"Successor General Partner" is defined in Section 10.1(b) hereof.

"Taub-Co" is defined in the Preamble to this Agreement.

"Tax Adjustment Amount" means, for each Partnership Fiscal Year, an amount equal to the excess (if any) of (i) the sum of (x) TCO's Real Estate Investment Trust Taxable Income for such Partnership Fiscal Year (determined without regard to any deduction for dividends paid (as defined in Section 561 of the Code)), and by excluding any net capital gain (as defined in Section 1222(11) of the Code), and (y) TCO's net income from foreclosure property for such Partnership Fiscal Year, minus its excess noncash income (as determined under Section 857(e) of the Code) for such Partnership Fiscal Year, over (ii) the sum of (A) TCO's allocable portion of the Required Distribution Amount distributed to TCO during such Partnership Fiscal Year, and (B) TCO's allocable portion of the Minimum Distribution Amount Adjustment distributed to TCO during the current Partnership Fiscal Year, to the extent such Minimum Distribution Amount Adjustment was a distribution in respect of those amounts determined under subclauses (x) and (y) of clause (i) hereof.

"Tax Adjustment Notice" is defined in Section 6.4 hereof.

"Tax Liability" means, for the relevant period, the product of (i) the highest individual federal income tax rate applicable to capital gains (taking into account the relevant holding period for the applicable capital asset) in effect for such period, and (ii) the largest quotient obtained by dividing (a) each Partner's (other

12 than TCO's) allocable share of net capital gain (as defined in Section 1222(11) of the Code) of the Partnership for such period, by (b) such Partner's (other than TCO's) Percentage Interest on the Relevant Date, taking into account allocation of gain pursuant to Section 704(c) of the Code; provided, however, that in no event shall the Tax Liability for any period exceed the cash proceeds received or to be received by the Partnership on the sale during such period of capital assets.

"Tax Matters Partner" is defined in Section 6.10(a) hereof.

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

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

"TCO Information Notice" is defined in Section 5.7(b) hereof.

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

"TG Receivables" means those certain loan receivables created by the TG Receivable Documents and held by TG in respect of the amounts owed to TG by certain of its partners.

"TG Receivable Documents" means that certain Loan Agreement dated August 1, 1985, among the Partnership and certain of the partners of TG, the promissory notes, and all other documents, agreements, certificates and other instruments (as the same have been amended through the Effective Date) executed in connection with the authorization and consummation of those certain loans made pursuant to such Loan Agreement, and as the same may be amended, restated or supplemented.

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

"Third Party Financing" means financing or refinancing obtained from a Third Party by the Partnership or an Owning Entity, as the case may be.

"Transfer" means any assignment, sale, transfer, conveyance, Pledge, grant of an option or proxy, or other disposition or act of alienation, whether voluntary or involuntary, or by operation of law.

"Transfer Determination" is defined in Section 8.1(b) hereof.

"TTC" is The Taubman Company Limited Partnership, a Delaware limited partnership, its successors and assigns, the present constituency of which is Taub-Co and the Partnership.

"TTC Affiliates" means all officers and employees of TTC for so long as they are actively employed by TTC, and for so long as any of such individuals are included within such definition of TTC Affiliates, any Affiliate of such individual. Reference to a TTC Affiliate includes any one of the TTC Affiliates.

"Unit of Partnership Interest" and "Units of Partnership Interest" are defined in Section 4.6(a) hereof.

13 III.

PURPOSES AND POWERS; PARTNERSHIP ONLY FOR PURPOSES SPECIFIED; REPRESENTATIONS AND WARRANTIES; CERTAIN COVENANTS.

Section 3.1 Purposes and Powers of the Partnership.

The Partnership has been formed pursuant to the Partnership Law and continued in accordance with this Agreement for the purposes of (i) owning, operating, maintaining, administering, developing, holding, improving, rehabilitating, redeveloping, renovating, expanding, leasing, mortgaging, selling, exchanging, disposing of, and generally dealing in and with, the Development Opportunities, the Development Opportunity Interests, the Regional Centers, the Regional Center Interests, and any other property owned by the Partnership, (ii) financing or refinancing for any of the foregoing purposes, or for any other purpose in furtherance of, or necessary, convenient, or incidental to the business or requirements of the Partnership, (iii) seeking to acquire, acquiring, obtaining options or other rights to acquire (pursuant to a purchase for cash and/or other consideration, exchange, merger, contribution to the capital of the Partnership, or otherwise) interests in, or in Persons owning, or owning an interest or interests in, regional retail shopping centers (including mixed-use properties the retail component of which is or is anticipated to be of significant value in relation to the value of the entire mixed-use property), or property or properties in anticipation of developing same as a regional retail shopping center or centers, or any other property as shall be specifically, in all such cases, designated from time to time by the Managing General Partner, (iv) holding an interest as a partner (general and/or limited), member of a limited liability company, or shareholder in a management, leasing, development, administrative or other service company, including interests incidental to such interest, and (v) engaging in any other activities (including the ownership of property) that are in furtherance of or necessary or incidental or related to any of the foregoing.

In furtherance of its purposes, but subject to the provisions of this Agreement, the Partnership has the power and is hereby authorized to, Directly or Indirectly:

(i) retain, own, hold, do business with, acquire (pursuant to a purchase for cash and/or other consideration, exchange, merger, contribution to the capital of the Partnership, or otherwise), renovate, rehabilitate, improve, expand, lease, operate, maintain, and administer and sell, convey, assign, exchange, mortgage, finance, refinance, or demolish, or deal in any manner with, a Development Opportunity, a Development Opportunity Interest, a Regional Center, a Regional Center Interest, and any real or personal property used in connection therewith or which may be in furtherance of, or necessary, convenient, or incidental to the accomplishment of, the purposes of the Partnership;

(ii) borrow, including without limitation, borrowing to obtain funds to acquire, own, obtain an option or other right to acquire, develop, and/or improve (including, without limitation, to renovate, rehabilitate, expand, lease, operate, maintain, and administer) a regional retail shopping center or other venture opportunity, a Regional Center, or a Regional Center Interest, and make capital improvements and/or investments in one or more Owning Entities or Regional Centers, and refinance any indebtedness or borrowing in furtherance of, or necessary, convenient, or incidental to the accomplishment of, any purposes or requirements of the Partnership, issue evidences of indebtedness to evidence such borrowings which may be convertible in whole or in part into Partnership Interests (to be issued in accordance with the provisions of Section 8.4 hereof) and which may be unsecured or secured by a mortgage, deed of trust, assignment, pledge, or other lien on a Regional Center or Regional Center Interest or any other asset(s) of the Partnership and/or an Owning Entity, and enter into guaranty agreements and/or indemnity agreements in connection with any such borrowings or in connection with a borrowing by or indebtedness of any other Person in which the Partnership holds an interest;

(iii) contribute to the capital of, or lend to, an Owning Entity, acquire, own, obtain an option or other right to acquire (pursuant to a purchase for cash and/or other consideration, exchange, merger, contribution to the capital of the Partnership, or otherwise), develop, renovate, rehabilitate, improve,

14 expand, lease, make capital improvements to, satisfy obligations of, or operate a regional retail shopping center, or other venture opportunity, a Regional Center, or a Regional Center Interest;

(iv) seek and/or locate regional retail shopping centers or other venture opportunities that are or are intended to be in furtherance of, or necessary, convenient, or incidental to the accomplishment of, any purposes of the Partnership;

(v) perform and/or engage others to perform studies and/or investigation or analysis of any sort in respect of a possible or proposed regional retail shopping center or other venture opportunity;

(vi) acquire and/or obtain options or other rights to acquire (pursuant to a purchase for cash and/or other consideration, exchange, merger, contribution to the capital of the Partnership, or otherwise) regional retail shopping centers (including interests therein) or other venture opportunities that are or are intended to be in furtherance of, or necessary, convenient, or incidental to the accomplishment of, the purposes of the Partnership, as shall be specifically, from time to time, designated by the Managing General Partner, and enter into and perform any and all agreements, execute any and all instruments and documents, and take any and all actions with respect thereto;

(vii) accept, in exchange for a Partnership Interest and, if desired, admission as a Partner in the Partnership, and as a contribution to the capital of the Partnership, or through the liquidation of a corporation or other entity, or otherwise, regional retail shopping centers, interests in regional retail shopping centers, development or other venture opportunities, or interests in development or other venture opportunities;

(viii) take any action reasonably anticipated to enhance, protect, defend and/or preserve, the value of a Development Opportunity, a Development Opportunity Interest, a Regional Center, a Regional Center Interest or other venture opportunity, or the Partnership and the return to the Partners;

(ix) act as one of the general and/or limited partners or members of, or act as the sole general or limited partner or member of, an Owning Entity and exercise all the powers and authorities given to the Partnership by the partnership agreement, limited liability company agreement, or other governing document covering such Owning Entity, or otherwise own all or any part or portion of a Development Opportunity, a Development Opportunity Interest, a Regional Center, or a Regional Center Interest;

(x) enter into, consent to, and enter into amendments of, any partnership or limited liability company agreement or other governing document covering an Owning Entity or any other agreement to which the Partnership or an Owning Entity is or is to be a party;

(xi) enter into ground leases, as a tenant or landlord, in respect of all or any part or portion of the Partnership's real property;

(xii) convert a Regional Center or a Regional Center Interest, or a part thereof, to condominium or cooperative status;

(xiii) prepay in whole or in part, and refinance, recast, increase, modify, amend, extend, or assign any loan, secured or unsecured, and in connection therewith, execute any extensions, renewals, or modifications of any mortgage or deed of trust or lien securing any such loan;

(xiv) act as one of the general and/or limited partners or members, or shareholders of, or act as the sole general or limited partner or member or shareholder of, or otherwise employ, a management, leasing, development, or other service company, to perform or engage others to perform all activities and services in respect of a Development Opportunity, a Development Opportunity Interest, a Regional Center, or a Regional Center Interest or other venture opportunity, or to perform administrative services for the Partnership and the Managing General Partner, and pay compensation for such services;

(xv) enter into, perform, and carry out contracts or agreements of any kind, including, without limitation, contracts or agreements with a Partner or an Affiliate or Affiliates of a Partner, in furtherance of, or necessary, convenient, or incidental to the accomplishment of, the purposes of the Partnership,

15 including, without limitation, the execution and delivery of all agreements, certificates, instruments, or documents required by lenders or in connection with any mortgage, deed of trust, or assignment;

(xvi) place record ownership to a Development Opportunity, a Development Opportunity Interest, a Regional Center, a Regional Center Interest (or any part thereof), or other venture opportunity, or any other Partnership property in the name or names of a nominee or nominees, or establish a trust ("nominee" or otherwise) to own or hold a Development Opportunity, a Development Opportunity Interest, a Regional Center, or a Regional Center Interest, or any other Partnership property, including to direct, select, and remove the trustee(s) thereof and amend or terminate such trust, all for the purpose of financing or any other convenience;

(xvii) execute contracts with governmental agencies, including, without limitation, any documents required in connection with any debt;

(xviii) execute any lease or leases (without limit as to the term thereof (including beyond the term of the Partnership), whether or not the space so leased is to be occupied by the lessee or, in turn, sub-leased in whole or in part to others) with respect to all or any part of a Development Opportunity, a Development Opportunity Interest, a Regional Center, or a Regional Center Interest;

(xix) obtain, through contract or otherwise, goods and services;

(xx) maintain insurance;

(xxi) invest in, reinvest, and oversee the investment of, cash a nd cash- like assets;

(xxii) make or revoke any election permitted the Partnership by any taxing or other authority;

(xxiii) grant and enter into and amend REAs and impose restrictions with respect to all or any part of a Development Opportunity, a Development Opportunity Interest, a Regional Center, a Regional Center Interest, Peripheral Property, or other property;

(xxiv) foreclose upon any property;

(xxv) admit a Person as a Partner to the Partnership, or increase or decrease the interest of a Partner in the Partnership, pursuant to the terms of this Agreement;

(xxvi) sell, exchange, or otherwise dispose of, upon any terms, all or any part or portion of Partnership property or the property of an Owning Entity;

(xxvii) enter into, perform, and carry out contracts which may be lawfully carried out or performed by a partnership under applicable laws including, without limitation, the Master Services Agreement;

(xxviii) enter into an agreement to merge with or into another partnership having similar purposes as the Partnership and having the Partnership or such other partnership as the surviving partnership;

(xxix) retain legal counsel, the Partnership Accountants, appraisers, and any other professionals in connection with the business of the Partnership or of an Owning Entity;

(xxx) execute or deliver any assignment for the benefit of creditors of the Partnership or of an Owning Entity;

(xxxi) negotiate with, defend, and resolve all matters with any Person;

(xxxii) sue on, defend, pursue, or compromise any and all claims or liabilities in favor of or against the Partnership or an Owning Entity, submit any or all such claims or liabilities to arbitration, and confess a judgment against the Partnership or an Owning Entity in connection with litigation in which the Partnership or an Owning Entity may be involved;

(xxxiii) take any action and exercise any right (including the assignment or disposition of same) under any contract or agreement to which the Partnership or an Owning Entity is a party;

16 (xxxiv) terminate, dissolve, and liquidate any Person, including, without limitation, an Owning Entity, and retain and deal in and with the assets (subject to liabilities and obligations) received as a result of any such liquidation;

(xxxv) amend, modify, or terminate and deal in any manner with any instrument, including without limitation, any trust instrument, corporate document, partnership agreement, limited liability company agreement, or joint venture agreement covering or in respect of an Owning Entity, a Development Opportunity, a Development Opportunity Interest, a Regional Center, or a Regional Center Interest;

(xxxvi) indemnify the Indemnified Persons and satisfy such indemnifications from the assets of the Partnership; and

(xxxvii) in addition to the foregoing, take or omit to take any action as may be necessary, convenient, or desirable to further the purposes or intent of the Partnership or of an Owning Entity, and have and exercise all of the powers and rights conferred upon limited partnerships formed pursuant to the Partnership Law.

Section 3.2 Partnership Only for Purposes Specified.

The Partnership shall be a partnership only for the purposes specified in Section 3.1 hereof, and this Agreement shall not be deemed to create a partnership among the Partners with respect to any activities whatsoever other than the activities within the purposes of the Partnership as specified in Section 3.1 hereof. Except as otherwise provided in this Agreement, no Partner shall have any authority to act for, bind, commit, or assume any obligation or responsibility on behalf of the Partnership, its properties, or any other Partner. No Partner, in its capacity as a Partner under this Agreement, shall be responsible or liable for any indebtedness or obligation of another Partner, nor shall the Partnership be responsible or liable for any indebtedness or obligation of any Partner, incurred either before or after the execution and delivery of this Agreement by such Partner, except as to those responsibilities, liabilities, indebtedness, or obligations incurred pursuant to and as limited by the terms of this Agreement or incurred pursuant to the Partnership Law.

Section 3.3 Representations and Warranties by the Partners; Certain Covenants.

(a) Each Partner that is an individual represents and warrants to each other Partner, that (i) the consummation of the transactions contemplated by this Agreement to be performed by such Partner will not result in a breach or violation of, or a default under, any agreement by which such Partner or any of such Partner's properties is or are bound, or any statute, regulation, order, or other law to which such Partner is subject, (ii) such Partner is not a "foreign person" within the meaning of Section 1445(f) of the Code, (iii) except as specifically provided on Schedule B attached hereto, such Partner does not own, Directly or Indirectly, (1) two percent (2%) or more of the total combined voting power of all classes of stock entitled to vote, or two percent (2%) or more of the total number of shares of all classes of stock, of any corporation that is a tenant of a Regional Center, or (2) an interest of two percent (2%) or more in the assets or net profits of any tenant of a Regional Center, and (iv) this Agreement is binding upon, and enforceable against, such Partner in accordance with its terms.

(b) Each Partner that is not an individual represents and warrants to each other Partner, that (i) all transactions contemplated by this Agreement to be performed by it have been duly authorized by all necessary action, including without limitation, that of its general partner(s), committee (s), trustee(s), beneficiaries, directors, and/or shareholder(s), as the case may be, as required, (ii) the consummation of such transactions shall not result in a breach or violation of, or a default under, its partnership agreement, trust agreement, charter, or by-laws, as the case may be, any agreement by which such Partner or any of such Partner's properties or any of its partners, beneficiaries, trustees, or shareholders, as the case may be, is or are bound, or any statute, regulation, order, or other law to which such Partner or any of its partners, trustees, beneficiaries, or shareholders, as the case may be, is or are subject, (iii) such Partner is neither a "foreign person" within the meaning of Section 1445(f) of the Code nor a "foreign partner" within the

17 meaning of Section 1446(e) of the Code, (iv) except as specifically provided on Schedule B attached hereto, such Partner does not own, Directly or Indirectly, (1) two percent (2%) or more of the total combined voting power of all classes of stock entitled to vote, or two percent (2%) or more of the total number of shares of all classes of stock, of any corporation that is a tenant of a Regional Center, or (2) an interest of two percent (2%) or more in the assets or net profits of any tenant of a Regional Center, and (v) this Agreement is binding upon, and enforceable against, such Partner in accordance with its terms.

(c) The representations and warranties contained in Sections 3.3(a) and 3.3(b) hereof shall survive the execution and delivery of this Agreement by each Partner and the dissolution, liquidation and termination of the Partnership; provided, however, that in the event of a breach of any such representation or warranty the sole source of recovery by the Partners shall be a Partner's Partnership Interest.

(d) TCO covenants and agrees that, (i) it will not Directly or Indirectly through ownership of another Person (including a wholly owned direct or indirect subsidiary) engage in any business other than through the Partnership except for the acquisition of businesses held for the sole benefit of the Partnership or a subsidiary partnership or limited liability company, (ii) it will own all Regional Center Interests and Development Opportunity Interests only through the Partnership, (iii) it will not incur any indebtedness for borrowed money other than to effect a distribution to satisfy the REIT Requirements, to contribute or loan such proceeds to the Partnership to accomplish the Partnership's purposes, or to refinance any existing indebtedness of the Partnership, and (iv) it will not assign or otherwise dispose of its right to a Guaranteed Payment or the corresponding series of Preferred Equity or its right to any loan and corresponding interest described in Section 4.1 (b) hereof, other then as set forth in Section 5.3 hereof.

(e) Each Partner hereby acknowledges that no representations as to potential profit, cash flows, or yield, if any, in respect of the Partnership or any one or more or all of the Regional Centers or Regional Center Interests or Development Opportunities or Development Opportunity Interests have been made by any Partner or any employee or representative or Affiliate of any Partner, and that projections and any other information, including, without limitation, financial and descriptive information and documentation, which may have been in any manner submitted to such Partner shall not constitute any representation or warranty, express or implied.

Section 3.4 Real Estate Investment Trust Requirements.

Notwithstanding anything to the contrary contained in this Agreement, for so long as TCO is a Partner, the Partnership shall operate in such a manner and the Partnership shall take or omit to take all actions as may be necessary (including making appropriate distributions from time to time), so as to permit TCO (i) to continue to qualify as a Real Estate Investment Trust under Sections 856 through 860 of the Code so long as such requirements exist and as such provisions may be amended from time to time, or corresponding provisions of succeeding law (the "REIT Requirements"), and (ii) to minimize its exposure to the imposition of an excise tax under Section 4981(a) of the Code or a tax under Section 857(b)(5) of the Code, so long as such taxes may be imposed and as such provisions may be amended from time to time, or corresponding provisions of succeeding law, each of (i) and (ii) to at all times be determined (a) as if TCO's sole asset is its Partnership Interest, and (b) without regard to the action or inaction of TCO with respect to distributions (by way of dividends or otherwise) and the timing thereof. The Managing General Partner may cause the Partnership to obtain an opinion of tax counsel selected by the Managing General Partner, regarding the impact of any proposed action affecting TCO's continuing ability to qualify as a Real Estate Investment Trust, or its exposure to an excise tax under Section 4981(a) of the Code, or a tax under Section 857(b)(5) of the Code, so long as such taxes exist and as such provisions may be amended from time to time or corresponding provisions of succeeding law.

18 Section 3.5 ERISA Requirement.

Notwithstanding anything to the contrary contained in this Agreement, the Partnership shall operate in such a manner and the Partnership shall take or omit to take all actions as may be necessary so as (i) to permit the Partnership to satisfy the requirements of a "real estate operating company" (as defined by Department of Labor Regulations 29 C.F.R. ss.2510.3-101), as such requirements exist and as such provisions may be amended from time to time, or corresponding provisions of succeeding law, and (ii) to prevent the occurrence of a "prohibited transaction" (as defined in Section 4975(c) of the Code or Section 406 of ERISA).

19 IV.

CAPITAL CONTRIBUTIONS; OPENING CAPITAL ACCOUNT BALANCES; PREFERRED EQUITY; ANTICIPATED FINANCING; CAPITAL ACCOUNTS; PARTNERSHIP INTERESTS; UNITS OF PARTNERSHIP INTEREST; PERCENTAGE INTERESTS; PARTNERSHIP INTEREST CERTIFICATES; PURCHASE OF FRACTIONAL UNITS; ADJUSTMENT OF UNITS OF PARTNERSHIP INTEREST.

Section 4.1 Capital Contributions; Opening Capital Account Balances; Preferred Equity.

(a) The Partners have contributed to the capital of the Partnership such assets and amounts as set forth on the books and records of the Partnership.

(b) TCO may contribute, from time to time, amounts to the capital of the Partnership as Preferred Equity, which amounts have been obtained from the sale by TCO of any one or more series of shares of preferred stock. In lieu of contributing such proceeds as Preferred Equity, TCO shall have the right to lend such proceeds to the Partnership. Any such loan shall be on the same terms and conditions as the Related Issue except that in lieu of dividends payable by TCO on the Related Issue, interest shall be payable by the Partnership to TCO. The Partnership shall assume and pay the expenses (including applicable underwriter discounts) incurred by TCO in connection with any contributions or loans by TCO to the capital of the Partnership pursuant to this Section 4.1(b). Any such loan made by TCO to the Partnership may at any time be converted by TCO to Preferred Equity pursuant to Section 5.3 hereof. Each contribution or loan made by TCO pursuant to this Section 4.1(b) shall be identified by the series of preferred shares which provided TCO with the funds to contribute or loan to the Partnership (individually, a "Related Issue," and collectively, the "Related Issues").

(c) The Capital Account balances of the Partners as of the Effective Date shall be as set forth opposite their respective names on Schedule C attached hereto.

Section 4.2 Anticipated Financing.

The Partnership may obtain funds which it considers necessary to meet the needs and obligations and requirements of the Partnership, including, without limitation, the Partnership's obligation to lend and/or contribute funds to, or the Partnership's obligations in respect of, an Owning Entity, or to maintain adequate working capital or to repay Partnership indebtedness, and to carry out the Partnership's purposes, from the proceeds of Third Party Financing or Affiliate Financing, in each case pursuant to such terms, provisions, and conditions and in such manner (including the engagement of brokers and/or investment bankers to assist in providing such financing) and amounts as the Managing General Partner shall determine. Any and all funds required or expended, Directly or Indirectly, by the Partnership for capital expenditures may be obtained or replenished through Partnership borrowings. Any Third Party Financing or Affiliate Financing obtained by the Managing General Partner on behalf of the Partnership may be convertible in whole or in part into Additional Interests (to be issued in accordance with Section 8.4 hereof), may be unsecured, may be secured by a mortgage or mortgages, or deed(s) of trust and/or assignments on or in respect of all or any portion of the assets of the Partnership or an Owning Entity, may include or be obtained through the public or private placement of debt and/or other instruments, domestic and foreign, and may include the provision for the option to acquire Additional Interests (to be issued in accordance with Section 8.4 hereof), and may include the acquisition of or provision for interest rate swaps, credit enhancers, and/or other transactions or items in respect of such Third Party Financing or Affiliate Financing; provided, however, that in no event may the Partnership obtain any Third Party Financing that is recourse to any Partner or any Affiliate, partner, shareholder, beneficiary, principal, officer, or director of any Partner without the consent of the Person or Persons to whom such recourse may be had. Section 4.3 No Right to Withdraw Capital; No Requirement of Further Contributions.

Except as specifically provided in this Agreement, no Partner (i) shall have the right to withdraw any part of its Capital Account or to demand or receive the return of its capital contributions, or any part thereof, or to receive any distributions from the Partnership, (ii) shall be entitled to make, or have any obligation to make, any contribution to the capital of, or any loan to, or provide a guaranty with respect to any loan to, the Partnership, or (iii) except as provided in Section 11.1(d) hereof, shall have any liability for the return of any other Partner's Capital Account or contributions to the capital of the Partnership. No Partner shall be liable for the liabilities and obligations of the Partnership except as otherwise provided by the Partnership Law; provided, however, that any and all obligations and liabilities to a Partner or an Affiliate of a Partner shall be satisfied solely from Partnership assets and no Partner shall have any personal liability on account thereof.

Section 4.4 No Interest on Capital Contributions or Capital Accounts.

No Partner shall receive any interest or return in the nature of interest on its contributions to the capital of the Partnership, or on the positive balance, if any, in its Capital Account.

Section 4.5 Capital Accounts.

(a) The Partnership shall establish and maintain a separate capital account ("Capital Account") for each Partner, including a substitute partner who shall pursuant to the provisions hereof acquire a Partnership Interest, which Capital Account shall be:

(1) credited with the amount of cash and the initial Book Value (net of liabilities secured by such contributed property that the Partnership assumes or takes subject to) of any other property contributed by such Partner to the capital of the Partnership, such Partner's distributive share of Profits, and any items in the nature of income or gain that are allocated to such Partner pursuant to Section 5.1 hereof, but excluding tax items described in Regulations Section 1.704-1(b)(4)(i); and

(2) debited with the amount of cash and the Book Value (net of liabilities secured by such distributed property that such Partner assumes or takes subject to) of any Partnership property distributed to such Partner pursuant to any provision of this Agreement, such Partner's distributive share of Losses, any items in the nature of expenses or losses that are allocated to such Partner pursuant to Section 5.1 hereof, but excluding tax items described in Regulations Section 1.704-1(b)(4)(i), and such Partner's share, determined in accordance with its Percentage Interest, of any expenditures of the Partnership described in Section 705(a)(2)(B) of the Code or treated as Section 705(a)(2)(B) expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i).

In the event that a Partner's Partnership Interest or portion thereof is transferred within the meaning of Regulations Section 1.704- 1(b)(2)(iv) (l), the transferee shall succeed to the Capital Account of the transferor to the extent that it relates to the Partnership Interest or portion thereof so transferred.

In the event that the Book Values of Partnership assets are adjusted as described below in Section 4.5(b) hereof, the Capital Accounts of the Partners shall be adjusted simultaneously to reflect the aggregate net adjustments as if the Partnership recognized gain or loss for federal income tax purposes equal to the amount of such aggregate net adjustment.

The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Section 1.704-1(b) of the Regulations, and shall be interpreted and applied as provided in the Regulations. In the event that the Managing General Partner reasonably determines that the manner in which the Capital Accounts, or any debits or credits thereto, are maintained or computed under the Regulations should be further amended, the Managing General Partner shall be authorized, without the approval, consent or act of any of the Partners, to amend this Agreement, provided that such amendment shall not directly and adversely affect the Partnership Interest of a Partner, including without limitation, the right to receive distributions allocable thereto, without the written concurrence of such Partner. In determining whether this Agreement should be amended to reflect the foregoing, the Managing

21 General Partner shall be entitled to rely on the advice of the Partnership Accountants and/or counsel to the Partnership.

(b) Except as otherwise provided in this Agreement, the term "Book Value" or "Book Values" means, with respect to any asset, such asset's adjusted basis for federal income tax purposes, except:

(1) the initial Book Value of any asset contributed by a Partner to the Partnership shall be the gross fair market value of such asset; (2) the Book Value of all Partnership assets may be adjusted to equal their respective gross fair market values as of the following times, as determined by the Managing General Partner (unless such adjustment shall be required by Regulations Section 1.704-1(b)(2)(iv)(f)): (i) the acquisition from the Partnership, in exchange for more than a de minimis capital contribution, of a Partnership Interest by an additional partner or an additional Partnership Interest by an existing Partner; (ii) the distribution by the Partnership to a Partner of more than a de minimis amount of Partnership property (including money) as consideration for an interest in the Partnership; and (iii) the liquidation of the Partnership within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g) if there is an in-kind distribution of Partnership property or an installment sale of Partnership assets, or if, pursuant to the penultimate sentence of Regulations Section 1.704-1(b)(2)(ii)(b), the Partnership establishes reserves to provide for Partnership liabilities in connection with the liquidation of the Partnership;

(3) if the Book Value of an asset has been determined or adjusted as provided in Section 4.5(b)(1) or 4.5(b)(2) hereof, the Book Value of such asset shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Profits and Losses; and

(4) the Book Value of any Partnership asset distributed to any Partner shall be the gross fair market value of such asset on the date of distribution.

(c) In the event that subsequent to the Effective Date any provision of this Article IV requires the determination of the fair market value of any asset, such fair market value shall be as determined by the Managing General Partner and the relevant Partner, provided that (i) such value is reasonably agreed to by such Persons in arm's-length negotiations and (ii) such Persons have sufficiently adverse interests, as provided in Regulations Section 1.704-1(b)(2)(iv)(h). In the event that the requirements of clauses (i) and (ii) of this Section 4.5(c) are not met, then the fair market value shall be determined by a Qualified Appraiser. The cost of any such appraisal shall be an expense of the Partnership.

Section 4.6 Partnership Interests; Units of Partnership Interest; Percentage Interests.

(a) For the purpose of this Agreement, the term "Partnership Interest" means, with respect to a Partner, such Partner's right to the allocations (and each item thereof) specified in Section 5.1 hereof and distributions from the Partnership, its share of expenditures of the Partnership described in Section 705(a)(2)(B) of the Code (or treated as such under Regulations Section 1.704- 1(b)(2)(iv)(i)) and its rights of management, consent, approval, or participation, if any, as provided in this Agreement. Each Partner's Partnership Interest shall be divided into units (herein referred to collectively as the "Units of Partnership Interest" and individually as a "Unit of Partnership Interest") and shall be represented by that number of Units of Partnership Interest set forth opposite such Partner's name on Schedule A attached hereto, as such Schedule may be amended from time to time pursuant to Section 4.8, Article VIII or Article X hereof. The Partnership may issue additional Units of Partnership Interest in accordance with Section 8.4 hereof. The Partnership and TCO shall conduct their respective operations, to the extent they are able to do so, so that one Unit of Partnership Interest will be equal in value to one (1) share of TCO's common stock.

(b) For the purpose of this Agreement, the term "Percentage Interest" means, with respect to each Partner, the percentage set forth opposite such Partner's name on Schedule A attached hereto, as such Schedule may be amended from time to time pursuant to Section 4.8, Article VIII or Article X hereof,

22 and shall at any time be equal to a fraction, the numerator of which is the aggregate number of Units of Partnership Interest held by such Partner, and the denominator of which is the aggregate number of all Units of Partnership Interest that are issued and outstanding. For purposes of calculating Percentage Interests, no interest in the Partnership that is Preferred Equity shall be taken into account.

Section 4.7 Partnership Interest Certificates.

Units of Partnership Interest shall be evidenced by Partnership Interest Certificates (herein referred to collectively as "Partnership Interest Certificates" and individually as a "Partnership Interest Certificate") which shall be issued in accordance with this Section 4.7 and Section 13.18 hereof, in the form attached hereto as Exhibit A, as such form may be amended from time to time by the Managing General Partner. Each Partnership Interest Certificate shall be signed by an authorized signatory or signatories of the Partnership and shall bear the following legend:

"The Unit(s) of Partnership Interest represented by this certificate is(are) subject to and transferable only in compliance with The Second Amendment and Restatement of Agreement of Limited Partnership of The Taubman Realty Group Limited Partnership, as the same may be amended and/or supplemented from time to time (the "Partnership Agreement"), a copy of which is on file at the office of The Taubman Realty Group Limited Partnership. Any assignment, sale, transfer, conveyance, mortgage, or other encumbrance, pledge, grant of an option or proxy, or other disposition or act of alienation, whether voluntary or involuntary, or by operation of law, in respect of a Unit of Partnership Interest made other than as permitted in the Partnership Agreement shall be null and void and have no force or effect whatsoever."

Transfers (except by way of a Pledge) of Units of Partnership Interest shall be made only upon the request of the Person named in the Partnership Interest Certificate, or by its attorney lawfully constituted in writing, and upon surrender and cancellation of a Partnership Interest Certificate for a like number of Units of Partnership Interest, a duly executed and acknowledged written instrument of assignment, and with such proof of authenticity of the signatures as the Managing General Partner may reasonably require. In the event of a Transfer of a Unit of Partnership Interest or the issuance of additional Units of Partnership Interest pursuant to the provisions of Article VIII or Article X hereof, the Managing General Partner shall cause the Partnership to issue Partnership Interest Certificates to the appropriate Persons to reflect any Transfer of Units of Partnership Interest or issuance of additional Units of Partnership Interest, as the case may be. In the event that the Partnership shall purchase any Units of Partnership Interest (including Fractional Units), such Units of Partnership Interest (or Fractional Units) shall be extinguished and the Partnership Interest Certificates with respect thereto shall be surrendered and cancelled.

Section 4.8 Purchase of Fractional Units of Partnership Interest; Adjustment of Units of Partnership Interest.

If as a result of any division or combination of Units of Partnership Interest (as provided below in this Section 4.8) or Transfer or issuance of Units of Partnership Interest, there shall be outstanding any Fractional Unit, the Managing General Partner may, but shall not be obligated to, at any time cause the Partnership to purchase such Fractional Unit, in which event the Partner holding such Fractional Unit shall sell such Fractional Unit to the Partnership for an amount equal to the fair market value of such Fractional Unit as determined in good faith by the Managing General Partner.

The Managing General Partner, in good faith, may, from time to time, divide or combine all Units of Partnership Interest then issued and outstanding; provided, however, that in no event shall the Managing General Partner combine the Units of Partnership Interest unless the fair market value of each resulting Unit of Partnership Interest is One Hundred Thousand Dollars ($100,000) or less. Accordingly, divisions or combinations of Units of Partnership Interests may provide for fractional ratios. In the event of any such action to combine or divide Units of Partnership Interest as provided in this Section 4.8, all references in this Agreement to a number of Units of Partnership Interest shall be combined or divided by the same divisor or multiplier, as the case may be. Any action to divide or combine Units of Partnership Interest pursuant to this

23 Section 4.8 shall be effective on the date set forth as the effective date for such action, and each Partner or Person to whom a Unit of Partnership Interest has been pledged shall have the right to request a certification from the Partnership as to the date of the last division or combination of Units of Partnership Interest. Promptly following any such action, Schedule A shall be amended to reflect such action, notice of such action shall be provided to each of the Partners and to any Person to whom a Unit of Partnership Interest has been pledged (provided the Partnership shall have received notice of such Pledge and the identity and address of such pledgee), and appropriate substitute Partnership Interest Certificates shall be issued as of the effective date of such action, in exchange for outstanding Partnership Interest Certificates pursuant to such terms as shall be established by the Managing General Partner. For the purpose of this Section 4.8, fair market values shall be as determined in good faith by the Managing General Partner.

24 V.

ALLOCATIONS; DISTRIBUTIONS; BANK ACCOUNTS; BOOKS OF ACCOUNT; TAX RETURNS; ACCOUNTING AND REPORTS; PARTNERSHIP FISCAL YEAR.

Section 5.1 Allocations.

(a) For the purpose of this Agreement, the terms "Profits" and "Losses" mean, respectively, for each Partnership Fiscal Year or other period, the Partnership's taxable income or loss for such Partnership Fiscal Year or other period, determined in accordance with Section 703(a) of the Code (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Section 703(a)(1) of the Code shall be included in taxable income or loss), adjusted as follows:

(1) any income of the Partnership that is exempt from federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this Section 5.1(a) shall be added to such taxable income or loss;

(2) in lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such Partnership Fiscal Year or other period; and

(3) any items that are specially allocated pursuant to Section 5.1(d) or 5.1(f) hereof shall not be taken into account in computing Profits or Losses.

(b) Except as otherwise provided in Section 5.1(d) or 5.1(f) hereof, the Profits and Losses of the Partnership (and each item thereof) for each Partnership Fiscal Year shall be allocated among the Partners in accordance with their respective Percentage Interests.

(c) For the purpose of Section 5.1(b) hereof, gain or loss resulting from any disposition of Partnership property shall be computed by reference to the Book Value of the property disposed of, notwithstanding that the adjusted tax basis of such property for federal income tax purposes differs from its Book Value.

(d) Notwithstanding the foregoing provisions of this Section 5.1, the following provisions shall apply:

(1) Nonrecourse Deductions shall be allocated in accordance with the Partners' Percentage Interests; provided, however, a Partner shall not receive an allocation of any Partnership deduction that would result in total loss allocations attributable to Nonrecourse Liabilities in excess of such Partner's share of Minimum Gain (as determined under Regulations Section 1.704- 2(g)). If there is a net decrease in Partnership Minimum Gain for a Partnership Fiscal Year, in accordance with Regulations Section 1.704-2(f) and the exceptions contained therein, the Partners shall be allocated items of Partnership income and gain for such Partnership Fiscal Year (and, if necessary, for subsequent Partnership Fiscal Years) equal to the Partners' respective shares of the net decrease in Minimum Gain within the meaning of Regulations Section 1.704-2(g)(2) (the "Minimum Gain Chargeback"). The items to be allocated pursuant to this Section 5.1(d)(1) shall be determined in accordance with Regulations Section 1.704-2(f) and (j).

(2) Any item of Partner Nonrecourse Deduction with respect to a Partner Nonrecourse Debt shall be allocated to the Partner or Partners who bear the economic risk of loss for such Partner Nonrecourse Debt in accordance with Regulations Section 1.704-2(i)(1). Subject to Section 5.1 (d)(1) hereof, but notwithstanding any other provision of this Agreement, in the event that there is a net decrease in Minimum Gain attributable to a Partner Nonrecourse Debt (such Minimum Gain being hereinafter referred to as "Partner Nonrecourse Debt Minimum Gain") for a Partnership Fiscal Year, then after taking into account allocations pursuant to Section 5.1(d)(1) hereof, but before any other allocations are made for such taxable year, and subject to the exceptions set forth in Regulations Section 1.704-2(i)(4), each Partner with a share of Partner Nonrecourse Debt

25 Minimum Gain at the beginning of such Partnership Fiscal Year shall be allocated items of income and gain for such Partnership Fiscal Year (and, if necessary, for subsequent Partnership Fiscal Years) equal to such Partner's share of the net decrease in Partner Nonrecourse Debt Minimum Gain as determined in a manner consistent with the provisions of Regulations Section 1.704-2(g)(2). The items to be allocated pursuant to this Section 5.1(d)(2) shall be determined in accordance with Regulations Section 1.704-2(i)(4) and (j).

(3) For the purpose of determining each Partner's share of excess nonrecourse liabilities of the Partnership, and solely for such purpose, each Partner's interest in Partnership profits shall be reasonably determined by the Managing General Partner in accordance with Internal Revenue Service authority interpreting Regulations Section 1.752-3(a)(3).

(4) No Partner shall be allocated any item of deduction or loss of the Partnership if such allocation would cause such Partner's Capital Account to become negative by more than the sum of (i) any amount such Partner is obligated to restore upon liquidation of the Partnership, plus (ii) such Partner's share of the Partnership's Minimum Gain and Partner Nonrecourse Debt Minimum Gain. An item of deduction or loss that cannot be allocated to a Partner pursuant to this Section 5.1(d)(4) shall be allocated among the General Partners in proportion to their respective Percentage Interests. For this purpose, in determining the Capital Account balance of such Partner, the items described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5), and (6) shall be taken into account. In the event that (A) any Limited Partner unexpectedly receives any adjustment, allocation, or distribution described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5), or (6), and (B) such adjustment, allocation, or distribution causes or increases a deficit balance (net of amounts which such Limited Partner is obligated to restore or deemed obligated to restore under Regulations Section 1.704-2(g)(1) and 1.704-2(i)(5) and determined after taking into account any adjustments, allocations, or distributions described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5), or (6) that, as of the end of the Partnership Fiscal Year, reasonably are expected to be made to such Limited Partner) in such Limited Partner's Capital Account as of the end of the Partnership Fiscal Year to which such adjustment, allocation, or distribution relates, then items of Gross Income (consisting of a pro rata portion of each item of Gross Income) for such Partnership Fiscal Year and each subsequent Partnership Fiscal Year shall be allocated to such Limited Partner until such deficit balance or increase in such deficit balance, as the case may be, has been eliminated. In the event that this Section 5.1(d)(4) and Section 5.1(d)(1) and/or (2) hereof apply, Section 5.1(d)(1) and/or (2) hereof shall be applied prior to this Section 5.1(d)(4).

(5) In accordance with Sections 704(b) and 704(c) of the Code and the Regulations thereunder, income, gain, loss, and deduction with respect to any property contributed to the capital of the Partnership shall, solely for federal income tax purposes, be allocated among the Partners so as to take account of any variation between the adjusted basis of such property to the Partnership for federal income tax purposes and the initial Book Value of such property as set forth on Schedule D hereto. If the Book Value of any Partnership property is adjusted pursuant to Section 4.5(b) hereof, subsequent allocations of income, gain, loss, and deduction with respect to such asset shall take account of any variation between the adjusted basis of such asset for federal income tax purposes and the Book Value of such asset in the manner prescribed under Sections 704 (b) and 704(c) of the Code and the Regulations thereunder.

(e) Notwithstanding anything to the contrary contained in this Section 5.1, the allocation of Profits and Losses for any Partnership Fiscal Year during which a Person acquires a Partnership Interest (other than upon formation of the Partnership) shall take into account the Partners' varying interests for such Partnership Fiscal Year pursuant to any method permissible under Section 706 of the Code that is selected by the Managing General Partner (notwithstanding any agreement between the assignor and assignee of such Partnership Interest although the Managing General Partner may recognize any such agreement), which method may take into account the date on which the Transfer or an agreement to Transfer becomes irrevocable pursuant to its terms, as determined by the Managing General Partner.

26 (f) In the event of a sale or exchange of a Partner's Partnership Interest or portion thereof or upon the death of a Partner, if the Partnership has not theretofore elected, pursuant to Section 754 of the Code, to adjust the basis of Partnership property, the Managing General Partner shall cause the Partnership to elect, if the Person acquiring such Partnership Interest or portion thereof so requests, pursuant to Section 754 of the Code, to adjust the basis of Partnership property. In addition, in the event of a distribution referred to in Section 734(b) of the Code, if the Partnership has not theretofore elected, the Managing General Partner may, in the exercise of its reasonable discretion, cause the Partnership to elect, pursuant to Section 754 of the Code, to adjust the basis of Partnership property. Except as provided in Regulations Section 1.704-1(b)(2) (iv)(m), such adjustment shall not be reflected in the Partners' Capital Accounts and shall be effective solely for federal and (if applicable) state and local income tax purposes. Each Partner hereby agrees to provide the Partnership with all information necessary to give effect to such election. With respect to such election:

(1) Any change in the amount of the depreciation deducted by the Partnership and any change in the gain or loss of the Partnership, for federal income tax purposes, resulting from an adjustment pursuant to Section 743(b) of the Code shall be allocated entirely to the transferee of the Partnership Interest or portion thereof so transferred. Neither the capital contribution obligations of, nor the Partnership Interest of, nor the amount of any cash distributions to, the Partners shall be affected as a result of such election, and except as provided in Regulations Section 1.704-1(b)(2)(iv)(m), the making of such election shall have no effect except for federal and (if applicable) state and local income tax purposes.

(2) Solely for federal and (if applicable) state and local income tax purposes and not for the purpose of maintaining the Partners' Capital Accounts (except as provided in Regulations Section 1.704-1(b)(2)(iv)(m)), the Partnership shall keep a written record for those assets, the basis of which is adjusted as a result of such election, and the amount at which such assets are carried on such record shall be debited (in the case of an increase in basis) or credited (in the case of a decrease in basis) by the amount of such basis adjustment. Any change in the amount of the depreciation deducted by the Partnership and any change in the gain or loss of the Partnership, for federal and (if applicable) state and local income tax purposes, attributable to the basis adjustment made as a result of such election shall be debited or credited, as the case may be, on such record.

(g) The Profits, Losses, gains, deductions, and credits of the Partnership (and all items thereof) for each Partnership Fiscal Year shall be determined in accordance with the accounting method followed by the Partnership for federal income tax purposes.

(h) Except as provided in Sections 5.1(d)(5) and 5.1(f) hereof, for federal income tax purposes, each item of income, gain, loss, or deduction shall be allocated among the Partners in the same manner as its correlative item of "book" income, gain, loss, or deduction has been allocated pursuant to this Section 5.1.

(i) Such portion of the gain allocated pursuant to this Section 5.1 that is treated as ordinary income attributable to the recapture of depreciation shall, to the extent possible, be allocated among the Partners in the proportion that (i) the amount of depreciation previously allocated to each Partner relating to the property that is the subject of the disposition bears to (ii) the total of such depreciation allocated to all of the Partners. This Section 5.1(i) shall not alter the amount of allocations among the Partners pursuant to this Section 5.1, but merely the character of gain so allocated.

(j) To the extent permitted by Regulations Sections 1.704-2(h)(3) and 1.704-2(i)(6), the Managing General Partner shall endeavor to treat a distribution of the proceeds of Nonrecourse Liabilities (that would otherwise be allocable to an increase in Partnership Minimum Gain) or Partner Nonrecourse Debt (that would otherwise be allocable to an increase in Partner Nonrecourse Debt Minimum Gain) as a distribution that is not allocable to an increase in Partnership Minimum Gain or Partner Nonrecourse Debt Minimum Gain to the extent that such distribution does not cause or increase a deficit balance in any Partner's Capital Account that exceeds the amount such Partner is otherwise

27 obligated to restore (within the meaning of Regulations Section 1.704-1(b)(2)(ii)(c)) as of the end of the Partnership's taxable year in which the distribution occurs.

Section 5.2 Distributions.

(a) Subject, on liquidation of the Partnership to Section 11.1(a) hereof, and to Section 11.1(e) hereof on liquidation of a Partner's interest in the Partnership that is not in connection with the liquidation of the Partnership, for the term of the Partnership, as set forth in Section 1.5 hereof:

(i) a cash distribution shall be made to the Partners, in accordance with their respective Percentage Interests, not later than the fifteenth (15th) Day of each month (the "Distribution Date") of each Partnership Fiscal Year, in an amount equal to one-twelfth (1/12) of the Required Distribution Amount for such Partnership Fiscal Year;

(ii) a cash distribution shall be made to the Partners, in accordance with their respective Percentage Interests, on the Distribution Date immediately following the date of an Additional Required Amount Notice, in an amount equal to the Additional Required Amount; provided, however, that if such Distribution Date is less than twenty (20) Days after the date of such Additional Required Amount Notice, the Additional Required Amount shall be distributed on the next Distribution Date;

(iii) in the event of a Minimum Distribution Amount Adjustment Notice, a cash distribution shall be made to the Partners, in accordance with their respective Percentage Interests, not later than the fifteenth (15th) Day of the first month of each Partnership Fiscal Year, in an amount equal to the Minimum Distribution Amount Adjustment for the prior Partnership Fiscal Year;

(iv) in the event of a Tax Adjustment Notice, a cash distribution shall be made to the Partners, in accordance with their respective Percentage Interests, not later than the last Day of the fourth (4th) month of each Partnership Fiscal Year, in an amount equal to the quotient obtained by dividing (x) the Tax Adjustment Amount for the prior Partnership Fiscal Year, by (y) the Percentage Interest of TCO on the Relevant Date; and

(v) in the event of a Deficiency Dividend Notice, a cash distribution shall be made to the Partners, in accordance with their respective Percentage Interests, as and when required by TCO, in an amount equal to the Deficiency Dividend.

(b) All distributions pursuant to Section 5.2(a), Section 11.1(a), and Section 11.1(e) hereof shall be made in accordance with the terms and provisions of this Agreement to the Record Partner; provided, however, that in the event of an assignment of a Partnership Interest pursuant to Section 8.3(a) hereof to a Person that does not become a substitute Partner in the Partnership, the Record Partner may, subject to the provisions of Section 8.3(a) hereof, by written notice (a "Designee Notice") to the Manager, the Partnership, and the Managing General Partner, designate such Person to receive those distributions pursuant to Section 5.2(a) and Section 11.1(a) to which the Record Partner would otherwise be entitled. The Managing General Partner shall not incur any liability for distributions made in good faith to any Record Partner or the designee of any Record Partner set forth in a Designee Notice as provided above in this Section 5.2(b), notwithstanding that another Person may have an interest in or be affected by such distribution. Distributions to the Partners under this Agreement shall be subject to any restriction imposed by applicable law, and the Managing General Partner may refrain from making any distribution hereunder without liability if it believes that the distribution would be in violation of any applicable law.

Section 5.3 Guaranteed Payments; TCO's Right to Convert.

Not later than the fifteenth (15th) Day of each month of each Partnership Fiscal Year, the Partnership shall pay to TCO, in cash or by good certified or official bank check or by Fedwire transfer of immediately available funds, an amount equal to the excess, if any, of (i) the cumulative Guaranteed Payment on all Preferred Equity, over (ii) the sum of all prior payments made to TCO pursuant to this Section 5.3, such amounts to be paid in the priorities, if any, set forth in the applicable series. Amounts paid pursuant to this Section

28 5.3 are intended to constitute guaranteed payments within the meaning of Section 707(c) of the Code and shall not be treated as distributions for purposes of computing TCO's Capital Account balance.

TCO shall have the right, but not the obligation, to convert all or any portion of the proceeds loaned to the Partnership pursuant to Section 4.1 (b) to Preferred Equity, which Preferred Equity shall be entitled to a Guaranteed Payment in lieu of the payment of interest.

In the event of the redemption by TCO, in whole or in part, of any series of preferred shares that constitute a Related Issue, TCO may convert that portion of its Preferred Equity equal to the portion of the Related Issue that was redeemed (exclusive of any accrued but unpaid dividends), to an Additional Interest by contributing to the capital of the Partnership all of its right, title, and interest, in and to the payment of any future Guaranteed Payment on that portion of the converted Preferred Equity, with the effect that the portion of the converted Preferred Equity and related right to the payment of any future Guaranteed Payment shall be converted to an Additional Interest in accordance with Section 8.4(a) hereof, such Additional Interest to be provided by a proportionate reduction in the Percentage Interests of all of the Partners, as provided in Section 8.4(a) hereof. Upon and to the extent of the conversion of Preferred Equity to Additional Interests in accordance with this Section 5.3, Schedule A to this Agreement shall be amended accordingly.

Section 5.4 Bank Accounts and Other Investments.

Funds of the Partnership shall be deposited in one or more bank accounts in federal or state chartered banks having a shareholder capital and undistributed surplus of not less than One Hundred Million Dollars ($100,000,000), all as determined by the Managing General Partner. All withdrawals therefrom shall be made upon the signature or signatures of whomever shall be designated in writing from time to time by the Managing General Partner. Any checks of the Partnership may be signed by any Person(s) designated in writing, from time to time, by the Managing General Partner. In addition, funds of the Partnership may be invested in highly liquid investments pursuant to an investment policy determined from time to time by the Managing General Partner.

Section 5.5 Books of Account.

The Partnership shall maintain at its principal office complete and accurate books of account and records of its operations showing the assets, liabilities, costs, expenditures, receipts, profits, and losses of the Partnership, and which books of account and records shall include provision for separate Capital Accounts for the Partners and shall provide for such other matters and information as may be required by the Partnership Law or as the Managing General Partner shall otherwise determine, together with copies of all documents executed on behalf of the Partnership. In addition, the Partnership shall maintain at its principal office a Partnership Interest Ledger of the Partnership, which shall set forth the information contained in Schedule A attached hereto, and which shall be kept current by the Managing General Partner. Each Limited Partner and its representatives, duly authorized in writing, shall have the right to inspect and examine, at all reasonable times, at the principal office of the Partnership, all such books of account, records, ledgers, and documents.

Section 5.6 Tax Returns.

(a) The Managing General Partner shall determine the methods to be used in the preparation of federal, state, and local income and other tax returns for the Partnership in connection with all items of income and expense, including but not limited to, valuation of assets, the methods of depreciation and cost recovery, elections, credits, and tax accounting methods and procedures.

(b) To the extent all necessary information is available, within ninety (90) Days after the end of each Partnership Fiscal Year, and in any event within one hundred twenty (120) Days after the end of each Partnership Fiscal Year, the Partnership shall cause to be prepared and transmitted to the Partners federal and appropriate state and local Partnership Income Tax Schedules "K-1," or any substitute therefor, with respect to such Partnership Fiscal Year on appropriate forms prescribed.

29 Section 5.7 Accounting and Reports, Etc.

(a) Within ninety (90) Days after the end of each Partnership Fiscal Year, the Partnership shall cause to be prepared and transmitted to each Partner, an annual report of the Partnership relating to the previous Partnership Fiscal Year containing a statement of financial condition as of the year then ended, and statements of operations, cash flow and Partnership equity for the year then ended, which annual statements shall be prepared in accordance with GAAP and shall be audited by the Partnership Accountants. The Partnership shall also cause to be prepared and transmitted to each Partner within forty-five (45) Days after the end of each of the first three (3) quarters of each Partnership Fiscal Year, a quarterly unaudited report of the Partnership's financial condition and statements of operations, cash flow and Partnership equity relating to the fiscal quarter then just ended, prepared in accordance with GAAP. The Partnership shall further cause to be prepared and transmitted to TCO (i) such reports and/or information as are necessary for TCO to fulfill its obligations under the Securities Act of 1933, the Securities and Exchange Act of 1934 and the applicable stock exchange rules, and under any other regulations to which TCO or the Partnership may be subject, and (ii) such other reports and/or information as are necessary for TCO to determine its qualification as a Real Estate Investment Trust under the REIT Requirements or its liability for a tax as a consequence of its Partnership Interest, including its distributive share of taxable income, in each case, in a manner that will permit TCO to comply with such obligations or make such determinations in a timely fashion.

(b) TCO shall, from time to time, upon the reasonable request of the Manager, or as and when such information first becomes available to it, provide the Manager, by written notice (the "TCO Information Notice"), with such information necessary to permit the Manager to determine the Minimum Distribution Amount Adjustment, including TCO's allocable portion of any component thereof, for each Partnership Fiscal Year, any Tax Adjustment Amount for any prior Partnership Fiscal Year, to the extent such Tax Adjustment Amount has not yet been distributed or previously taken into account in calculating a Tax Adjustment Amount, and any Deficiency Dividend.

Section 5.8 Partnership Fiscal Year.

The Partnership's fiscal year (and taxable year) shall be the Partnership Fiscal Year.

30 VI.

MANAGEMENT; AUTHORITY AND AUTHORIZED ACTIONS BY THE MANAGING GENERAL PARTNER; EXTRAORDINARY TRANSACTIONS; ANNUAL BUDGET; NOTICES; STANDARD OF CONDUCT; MASTER SERVICES AGREEMENT AND CORPORATE SERVICES AGREEMENT; ABSENCE OF AUTHORITY OF PARTNERS OTHER THAN THE MANAGING GENERAL PARTNER; FIDELITY BONDS AND INSURANCE; ENGAGEMENT OF PARTNERS' AFFILIATES; INDEMNITY AND REIMBURSEMENT; TAX MATTERS PARTNER.

Section 6.1 Management; Authority and Authorized Actions by the Managing General Partner.

(a) The Managing General Partner shall be responsible for the management of the Partnership and, subject to Section 6.1(b) hereof, shall have the full and exclusive right, power and authority, on behalf of and in the name of the Partnership, to carry out any and all objectives and purposes of the Partnership and to exercise any and all of the powers of the Partnership and to perform any and all acts and enter into and perform any and all contracts, agreements, and other undertakings which it may deem necessary or advisable in furtherance of the purposes of the Partnership or incidental thereto. In such capacity, the Managing General Partner shall use its Best Efforts to carry out the purposes of the Partnership and shall have in respect of its management of the Partnership all of the powers of the Partnership and shall devote such time and attention to the Partnership as is reasonably necessary for the proper management of the Partnership and its properties. The Managing General Partner may employ or engage others including one or more Affiliates of a Partner (e.g., TTC) to satisfy its obligations in respect of all actions, decisions, determinations, designations, delegations, directions, appointments, consents, approvals, selections, and the like to be taken, made, or given by and/or with respect to the Partnership, its business and its properties as well as management of all Partnership affairs, and all such actions, decisions, determinations, designations, delegations, directions, appointments, consents, approvals, selections, and the like shall be controlling and binding upon the Partnership. Any Person employed or engaged by the Managing General Partner shall have and be subject to all of the rights, obligations and restrictions of the Managing General Partner, all as provided in this Agreement.

The Managing General Partner shall supervise the Manager and review on a regular basis the reports and other information furnished by the Manager from time to time pursuant to the Master Services Agreement.

(b) For so long as the aggregate Percentage Interest held by AAT Affiliates equals or exceeds five percent (5%), without the prior written consent of a Majority in Interest of the Non-Managing Partners, the Managing General Partner shall not enter into any Extraordinary Transaction. For purposes of this Section 6.1(b), a Majority in Interest of the Non-Managing Partners shall be deemed to have consented to an Extraordinary Transaction, without the requirement of an actual vote of the Non-Managing Partners, if those Non-Managing Partners holding in excess of fifty percent (50%) of the aggregate Percentage Interests held by all the Non-Managing Partners consent to such transaction in writing.

Section 6.2 Delegation of Authority and Designation of Officers.

(a) The Managing General Partner may delegate any of its powers hereinbefore, hereinafter, or by law provided or conferred to one (1) or more Persons, or designate one (1) or more Persons to do or perform those matters to be done or performed by the Managing General Partner. In addition, the Managing General Partner may designate one (1) or more employees or agents of the Partnership who are denominated as officers who shall exercise such powers and shall have such duties as may from time to time be assigned or established by the Managing General Partner. Any designated officer of the Partnership shall serve at the pleasure of the Managing General Partner and may be removed at any time with or without cause, by the Managing General Partner.

31 (b) The Partners, by their execution and delivery of this Agreement, irrevocably authorize the Managing General Partner and any Person or Persons designated or delegated by the Managing General Partner to do any act that the Managing General Partner has the right, power, and authority to do under the provisions of this Agreement, without any other or subsequent authorizations, approvals, or consents of any kind. No Person dealing with the Partnership shall be required to investigate or inquire as to the authority of the Managing General Partner, and any Person or Persons designated or delegated by the Managing General Partner to exercise the rights, powers, and authority herein conferred upon them. Any Person dealing with the Partnership shall be entitled to rely upon any action taken by the Managing General Partner and any Person or Persons designated or delegated by the Managing General Partner, and the Partnership shall be bound thereby. Any Person dealing with the Partnership shall be entitled to rely upon any document or instrument executed and delivered by a Person or Persons designated by the Managing General Partner, and the Partnership shall be bound thereby. No purchaser of any property or interest owned by the Partnership, or lender, or Third Party in respect of any matter shall be required to determine the sole and exclusive authority of the Person or Persons designated or delegated by the Managing General Partner to execute and deliver on behalf of the Partnership any such instrument of transfer or security, or to see to the application or distribution of revenues or proceeds paid or credited in connection therewith.

Section 6.3 Compensation of Certain Employees of the Manager; Issuance of Incentive Options.

The Managing General Partner shall approve the compensation of any employee of the Manager or the Partnership who is also at such time an AAT Affiliate and administer a program or programs whereby the Partnership shall from time to time, and without the consent of any Partner, grant to employees of TTC options (the "Incentive Options") to acquire limited partner Partnership Interests pursuant to an Incentive Option Plan, which plan and any amendments thereto shall have been approved by the Managing General Partner. After review of recommendations made by Taub-Co, the Managing General Partner may direct the Partnership to issue the Incentive Options to employees of TTC.

Section 6.4 Annual Budget; Notices.

Pursuant to the Master Services Agreement, the Manager is required to prepare and submit to the Managing General Partner for approval, prior to the beginning of each Partnership Fiscal Year, an annual development budget (the "Annual Development Budget"), and an annual operating budget (the "Annual Operating Budget") for the Partnership, which shall reflect a reasonable estimate of the proposed operations (including development) and expenses of the Partnership for such Partnership Fiscal Year, and which shall include the Required Distribution Amount for such Partnership Fiscal Year and any annual business plan, leasing plan or similar materials required of the Manager under the Master Services Agreement. (The Annual Development Budget and the Annual Operating Budget are referred to together as the "Annual Budget".)

In addition to the foregoing, pursuant to the Master Services Agreement, the Manager will be engaged to: (i) advise the Managing General Partner by written notice (an "Additional Required Amount Notice"), within thirty (30) Days after the closing of any capital gain transaction of the Partnership, of the Additional Required Amount with respect to such capital gain transaction of the Partnership, (ii) after a TCO Information Notice in respect of a Tax Adjustment Amount, advise the Managing General Partner by written notice (a "Tax Adjustment Notice") not less than ten (10) Days prior to TCO's first regular dividend date, of the Tax Adjustment Amount for such Partnership Fiscal Year, (iii) after a TCO Information Notice, in respect of a Minimum Distribution Amount Adjustment, not later than December 1 of each Partnership Fiscal Year, advise the Managing General Partner, by written notice (a "Minimum Distribution Amount Adjustment Notice") of the Minimum Distribution Amount Adjustment for such Partnership Fiscal Year, and (iv) after a TCO Information Notice, in respect of TCO's obligation to declare and pay a deficiency dividend pursuant to Section 860(f)(1) of the Code as a result of a determination (as defined in Section 860(e) of the Code), advise the Managing General Partner by written notice (the "Deficiency Dividend Notice") of the Deficiency Dividend for such Partnership Fiscal Year.

32 Section 6.5 Master Services Agreement and Corporate Services Agreement; Engagement of Partners' Affiliates.

The Managing General Partner shall manage and perform, or employ or engage others, including one or more Affiliates of a Partner (e.g., TTC), to manage and perform all activities and services in furtherance of the purposes of the Partnership including, without limitation, seeking Development Opportunities, and Regional Centers, and further including without limitation, all activities and services in respect of Development Opportunities, all activities and services in respect of the expansion, reconstruction, repair, renovation, or alteration of Regional Centers and/or the development of any Peripheral Property, and all other activities and services in respect of the management, administration, leasing, financing, refinancing, development, improvement, acquisition and disposition of Regional Centers. The Partnership has heretofore entered into the Master Services Agreement. In addition, the Partnership may provide in the partnership agreement, limited liability company agreement, or other agreement forming or covering an Owning Entity or in separate agreements entered into between an Owning Entity and TTC, which agreements may include an Owning Entity Agreement, for such terms, provisions, and conditions, and compensation to TTC, all in respect of the activities of TTC for the benefit of a Development Opportunity or a Regional Center, as shall be determined by the Managing General Partner, and TTC or as shall be available pursuant to negotiations with Third Parties having an interest in such Development Opportunity or Regional Center. The compensation to be paid to TTC, as applicable, as well as all reimbursements for or in respect of services rendered to the Partnership shall be as provided in the Master Services Agreement, an Owning Entity Agreement, or other applicable agreement forming or covering an Owning Entity. The Partnership has heretofore entered into the Corporate Services Agreement, pursuant to which TCO has engaged TTC to assist with, implement and effect the actions to be taken by TCO as the Managing General Partner, and to do or perform those matters to be done or performed by TCO as the Managing General Partner in accordance with the terms and provisions of this Agreement.

Section 6.6 Absence of Authority of Non-Managing Partners.

Except as specifically provided in this Agreement, the Non-Managing Partners, as such, shall take no part in, nor have the right to take part in, nor interfere in, nor have the right to interfere or participate in, in any manner, the conduct or control of the business of the Partnership or have any right or authority to act for or on behalf of the Partnership.

Section 6.7 Fidelity Bonds and Insurance.

The Partnership shall obtain fidelity bonds with reputable surety companies, covering all Persons having access to the Partnership funds, indemnifying the Partnership against loss resulting from fraud, theft, dishonesty, and other wrongful acts of such Persons. The Partnership shall carry or cause to be carried on its behalf, with companies and in amounts determined by the Managing General Partner all property, liability, and workers' compensation insurance as shall be required under applicable mortgages, leases, agreements, and other instruments and statutes by which the Partnership or its properties are bound, as well as such additional insurance and coverages as the Managing General Partner, shall from time to time propose or approve.

Section 6.8 Execution of Legal Instruments.

All legal instruments affecting the Partnership or Partnership property need be executed by, and only by, that Person or those Persons (who need not be Partners) designated in writing by the Managing General Partner and such designated Person's(s') signature(s) shall be sufficient to bind the Partnership and its properties.

Section 6.9 Indemnity and Reimbursement; Advancement of Expenses and Insurance.

(a) To the fullest extent permitted by law, the Partnership shall and does hereby indemnify, defend, and hold harmless each Indemnified Person from any claim, demand, or liability, and from any loss, cost, or expense including, without limitation, attorneys' fees and court costs, which may be asserted against,

33 imposed upon, or suffered by such Indemnified Person by reason of any act performed for or on behalf of the Partnership, or in furtherance of the Partnership's business, to the extent authorized hereby, or by reason of any omission, except for any act or omission that constitutes a breach of a duty of loyalty, any act or omission not in good faith or which involves intentional misconduct or a Knowing violation of law, and provided that with respect to any criminal action or proceeding, such Indemnified Person had no reasonable cause to believe its or his conduct was unlawful, and provided further that no indemnification shall be made in respect of any claim, demand, or liability, or for any loss, cost, or expense, as to which such Indemnified Person shall have been adjudged to be liable to the Partnership unless and only to the extent that a court shall determine, despite the adjudication of liability but in view of all the circumstances of the case, such Indemnified Person is fairly and reasonably entitled to indemnity. Each Indemnified Person shall not have any personal liability to the Partnership or its Partners for monetary damages for breach of fiduciary duty except (i) for a breach of a duty of loyalty, or (ii) for acts or omissions not in good faith or which involve intentional misconduct or a Knowing violation of law. Any indemnity under this Section 6.9(a) shall be provided out of and to the extent of Partnership assets only, and only with respect to amounts actually and reasonably incurred, and no Partner shall have any personal liability on account thereof.

(b) Expenses (including attorneys' fees) incurred by an Indemnified Person in defending any civil, criminal, administrative or investigative action, suit, or proceeding relating to any action or omission in respect of the Partnership shall be paid by the Partnership in advance of the final disposition of the action, suit, or proceeding upon receipt of an undertaking by or on behalf of such Indemnified Person to repay such amount if it is ultimately determined that such Indemnified Person is not entitled to be indemnified by the Partnership.

(c) The Partnership may purchase and maintain insurance, as determined by the Managing General Partner in respect of each Indemnified Person against any liability relating to any act or omission in respect of the Partnership, whether or not the Partnership may indemnify such Indemnified Person against such liability.

(d) The indemnification and advancement of expenses provided by, or granted pursuant to, this Section 6.9 shall survive the liquidation, dissolution and termination of the Partnership and the termination of this Agreement, shall continue as to any Person who has terminated his relationship with the Partnership and shall inure to the benefit of such Person's heirs, executors and administrators and shall, to the extent permitted by the Partnership Law, be binding on the Partnership's successors and assigns.

Section 6.10 Tax Matters Partner.

(a) As used in this Agreement, "Tax Matters Partner" has the meaning set forth in Section 6231(a)(7) of the Code. The Managing General Partner is hereby designated Tax Matters Partner for the Partnership. The Tax Matters Partner shall comply with the requirements of Sections 6221 through 6233 of the Code applicable to a Tax Matters Partner. To the fullest extent permitted by law, the Partnership shall and does hereby indemnify, defend, and hold harmless the Tax Matters Partner from any claim, demand, or liability, and from any loss, cost, or expense including, without limitation, attorneys' fees and court costs, which may be asserted against, imposed upon, or suffered by the Tax Matters Partner by reason of any act performed for or on behalf of the Partnership in its capacity as Tax Matters Partner to the extent authorized hereby, or by reason of any omission, except acts or omissions not in good faith or which involve intentional misconduct or a Knowing violation of law. Any indemnity under this Section 6.10(a) shall be provided out of and to the extent of Partnership assets only, and only with respect to amounts actually and reasonably incurred, and no Partner shall have any personal liability on account thereof. The indemnity provided in this Section 6.10 shall survive the liquidation, dissolution, and termination of the Partnership and the termination of this Agreement and shall, to the extent permitted by the Partnership Law, be binding on the Partnership's successors and assigns.

34 (b) The Tax Matters Partner shall have a continuing obligation to provide the Internal Revenue Service with sufficient information so that proper notice can be mailed to all Partners as provided in Section 6223 of the Code, provided that each Partner shall furnish the Tax Matters Partner with all such information (including information specified in Section 6230(e) of the Code) as is required with respect to such Partner for such purpose.

35 VII.

OTHER VENTURES.

The Partners acknowledge and agree that each of them and their respective constituents and Affiliates may have interests in other present or future ventures, of whatever nature, including real estate, and further including without limitation, ventures that are competitive with the Partnership and that, notwithstanding its status as a Partner in the Partnership, a Partner and their respective constituents and Affiliates shall be entitled to obtain and/or continue their respective individual participation in all such ventures without (i) accounting to the Partnership or the other Partners for any profits with respect thereto, (ii) any obligation to advise the other Partners of business opportunities for the Partnership which may come to its or its constituents' or Affiliates' attention as a result of its or its Affiliates' or constituents' participation in such other ventures or in the Partnership, and (iii) being subject to any claims whatsoever on account of such participation.

36 VIII.

TRANSFERS OF UNITS OF PARTNERSHIP INTEREST; SUBSTITUTION OF PARTNERS; ADDITIONAL PARTNERSHIP INTERESTS; CONVERSION OF PARTNERSHIP INTERESTS.

Section 8.1 Transfers.

(a) No Partner may Transfer all or any portion of its Partnership Interest or, if such Partner is an entity (other than TCO and other than a Qualified Institutional Transferee that is not a QIT Entity), permit a Transfer of an interest in such Partner, to any Person except as specifically permitted in this Article VIII.

(b) A Partner (other than TCO) may Transfer all or any portion of its Partnership Interest (but not less than one (1) Unit of Partnership Interest) to any other Partner, or to one (1) or more members of such Partner's Immediate Family, or to a Family Trust, or to any Qualified Institutional Transferee, or to an entity consisting of or owned entirely by one (1) or more of the foregoing Persons, or to the Partnership, or, in the event that a Partner is a partnership, or other entity (other than TCO and other than a Qualified Institutional Transferee that is not a QIT Entity), to one (1) or more of the constituent partners, or owners of such Partner or other entity, or to one (1) or more members of the respective Immediate Families or Family Trusts of the constituent partners, or owners of such Partner or other entity, or to any Qualified Institutional Transferee, or to an entity consisting of or owned entirely by one (1) or more of the foregoing Persons, or to the Partnership, provided that, in each case, the Managing General Partner has determined by written notification (a "Transfer Determination"), to the transferring Partner, which Transfer Determination shall not be unreasonably withheld and shall be deemed given if not refused within seven (7) Business Days of the date of notice thereof to the Partnership, that either (A) such Transfer will not cause (i) any lender of the Partnership or an Owning Entity to hold in excess of ten percent (10%) of the Percentage Interests or any other percentage of the Percentage Interests that would, pursuant to the Regulations under Section 752 of the Code or any successor provision, cause a loan by such lender to constitute Partner Nonrecourse Debt or (ii) a violation of any partnership agreement or other document forming or governing an Owning Entity, or (B) the Managing General Partner has determined to waive such requirement in its reasonable discretion, after having determined that the Transfer will not materially adversely affect the Partnership, its assets or any Partner, or constitute a violation of the Partnership Law, or any other law to which the Partnership or an Owning Entity is subject.

In addition to the foregoing, in the event that a Partner is a partnership or other entity (other than the Managing General Partner and other than a Qualified Institutional Transferee that is not a QIT Entity), such Partner may permit a Transfer of an interest in such Partner to any constituent partner or owner of such Partner, to one (1) or more members of any constituent partner's or owner's Immediate Family or a Family Trust with respect to any constituent partner or owner, or to any Qualified Institutional Transferee, or to any Partner, provided that, in each case, the Managing General Partner has made a Transfer Determination prior to the proposed Transfer.

(c) TCO may Transfer all or any portion of its Partnership Interest (but not less than one (1) Unit of Partnership Interest) to, and only to, the Partnership or to any other Partner(s) or to any Qualified Institutional Transferee(s) provided that TCO retains at least a thirty percent (30%) Percentage Interest in the Partnership. Notwithstanding anything to the contrary contained in this Agreement, in the event of a Transfer (other than a Transfer to an existing General Partner or to the Partnership) of a portion of TCO's Partnership Interest pursuant to this Section 8.1(c), such Partnership Interest (or a portion thereof) shall immediately convert to a Partnership Interest as a limited partner in the Partnership, which transferee, subject to the provisions of Section 8.2 hereof, shall have and be subject to all of the rights, obligations, restrictions, and attributes of a limited partner, all as provided in this Agreement. In the event of a conversion of a portion of TCO's Partnership Interest pursuant to this Section 8.1(c), without the approval, consent or act of any Partner, the Managing General Partner may amend this Agreement, the

37 Certificate of Limited Partnership (if required by the Partnership Law), and any other document determined by the Managing General Partner to be necessary to reflect the foregoing.

(d) Transfers of ownership interests in TCO and in any Qualified Institutional Transferee (other than a QIT Entity) as well as the change in a trustee of any trust that is a Partner or of any trust that holds an interest in any Partner may be made without restriction by the terms of this Agreement. Without the approval, consent or act of any Partner, the Managing General Partner may amend this Agreement, the Certificate of Limited Partnership (if required by the Partnership Law), and any other document determined by the Managing General Partner to be necessary to reflect any such Transfer or, if necessary, change in trustee.

(e) In the event that the Managing General Partner is unable to provide a Transfer Determination to a Partner in accordance with this Section 8.1, upon request of such Partner, the Managing General Partner may provide a conditional Transfer Determination (a "Conditional Transfer Determination"), which Conditional Transfer Determination shall be subject to such terms and conditions as the Managing General Partner shall determine and so state in the Conditional Transfer Determination.

(f) Any action contrary to the provisions of this Article VIII shall be null and void and ineffective for all purposes.

Section 8.2 Substitution of Partners.

Regardless of compliance with any of the provisions hereof (including, without limitation, the provisions of Section 8.1 and Article IX hereof) permitting a Transfer of a Partnership Interest, no Transfer (except by way of a Pledge) of a Partnership Interest shall be recognized by or be binding upon the Partnership unless:

(i) such instruments as may be required by the Partnership Law or other applicable law or to effect the continuation of the Partnership and the Partnership's ownership of its properties are executed and delivered and/or filed;

(ii) the assignee delivers to the Partnership, a Partnership Interest Certificate evidencing the number of Units of Partnership Interest which are the subject of the Transfer, together with a duly executed and acknowledged written instrument of assignment, which instrument of assignment binds the assignee to all of the terms and conditions of this Agreement as if the assignee were a signatory party hereto and does not release the assignor from any liability or obligation (accrued to the date of Transfer) of or in respect of the Partnership Interest which is the subject of the Transfer;

(iii) the instrument of assignment is manually signed by the assignee and assignor with such proof of authenticity of the signatures as the Managing General Partner may reasonably require; and

(iv) in the event that such assignee is not then a Partner in the Partnership, the Managing General Partner shall have consented (which consent may be withheld for any reason or for no reason) in writing to the admission of the assignee as a substitute partner (in respect of the Partnership Interest acquired) in the Partnership.

An assignee of a Partnership Interest pursuant to a Transfer permitted in this Agreement may, subject to the provisions of this Article VIII, be admitted as a partner in the Partnership in the place and stead of the assignor Partner in respect of the Partnership Interest acquired from the assignor Partner and shall, except as otherwise specifically provided in this Agreement, have all of the rights, powers, obligations, and liabilities, and be subject to all of the restrictions, of the assignor Partner, including, without limitation, the liability of the assignor Partner for any existing unperformed obligations of the assignor Partner. In the event that a Partner pledges or proposes to pledge its Partnership Interest or any portion thereof (but not less than one (1) Unit of Partnership Interest) in connection with a financing transaction, such Partner may request that the Managing General Partner consent in writing, at the time of the financing transaction or in contemplation thereof, to the admission of a pledgee or pledgees (or transferee(s) upon the foreclosure or like action in respect of such Pledge) as a substitute partner(s) in the Partnership (which consent may be withheld for any reason or for

38 no reason). Each of the Partners, on behalf of itself and its permitted successors and assigns, HEREBY AGREES AND CONSENTS to the admission of any such substitute partners as herein provided.

Section 8.3 Failure or Refusal to Grant Consent.

(a) The Managing General Partner's failure or refusal to grant its consent to the admission of an assignee as a substitute Partner in the Partnership as provided in clause (iv) of Section 8.2 hereof, shall not affect the validity or effectiveness of any such instrument as an assignment by the assignor to the assignee of the right to receive the share of the Profits or Losses or other items, or distributions from the Partnership, or the return of the contribution to which such assignor would be entitled and which was thereby assigned, provided that such assignor has received a Transfer Determination from the Managing General Partner in accordance with Section 8.1(b) hereof in respect of such Transfer, and a duly executed and acknowledged written instrument of assignment in form reasonably satisfactory to the Managing General Partner, the terms of which are not in contravention of any of the provisions of this Agreement, and which terms shall contain appropriate indemnifications in favor of the Partnership with respect to distributions and other matters as the Managing General Partner may reasonably require, is filed with the Partnership; provided, however, that the assignor shall continue to be a Partner for all purposes of the Partnership, except that the assignee (and not the assignor) shall be considered to hold the interest (and the related Units of Partnership Interest) assigned for purposes of exercising all rights of approval under this Agreement.

(b) An assignee of any portion of or an interest in a Partnership Interest (an "Assigned Interest") pursuant to a Transfer with respect to which a Transfer Determination has been granted that has not, for any reason, been admitted as, or become, a partner in the Partnership in the place and stead of an assignor Partner (the "Original Assignor") in respect of the Assigned Interest, may, by prior written notice to the Managing General Partner, assign the Assigned Interest, in accordance with and subject to the provisions of this Article VIII, in all respects as if or with the same effect as if such assignee were a Partner, and in the event that any subsequent assignee is admitted as a substitute partner in accordance with and subject to Section 8.2 hereof, the Original Assignor, simultaneously with such subsequent assignment, shall Transfer all of its remaining right, title, and interest in the Partnership Interest relating to the Assigned Interest, to the Partner acquiring the Assigned Interest, which Partner shall act and be the partner in respect of the Assigned Interest in the place and stead of the Original Assignor. Each assignor Partner, on behalf of itself and its permitted successors and assigns, hereby agrees to enter into an appropriate amendment to this Agreement, the Certificate of Limited Partnership (if required by the Partnership Law), and any other document determined by the Managing General Partner to be necessary to reflect the foregoing.

Section 8.4 Issuance of Additional Interests to TCO and Other Persons or of Incentive Interests to Certain Persons.

(a) At any time after the Effective Date, the Managing General Partner, subject to (i) Section 6.1(b) hereof, (ii) a determination in accordance with the Transfer Determination provisions of Section 8.1(b) hereof in respect of the issuance of additional Partnership Interests, and (iii) a determination that such issuance will be in the best interests of the Partnership, may cause the Partnership to issue additional Partnership Interests in the Partnership to and, if desired, admit as a Partner in the Partnership, any Person including TCO (herein referred to as an "Additional Interest") in exchange for the contribution to the Partnership by such Person of development or other venture opportunities, interests in development or other venture opportunities, regional shopping center developments, interests in regional shopping center developments, cash, cash equivalents and/or other assets, as determined by the Managing General Partner in accordance with Section 3.1 hereof. In the event that an Additional Interest is issued by the Partnership pursuant to this Section 8.4(a), such Additional Interest shall be provided by a proportionate reduction in the Percentage Interests of all of the Partners. The Managing General Partner shall be authorized on behalf of each of the Partners to amend this Agreement and the Certificate of Limited Partnership (if required by the Partnership Law), to reflect the admission

39 of an additional partner or an increase in the Percentage Interest of a Partner, as applicable, and the corresponding reduction in the Percentage Interests of the Partners.

(b) At any time and without the consent of any Partner, the Managing General Partner, subject to a determination by the Managing General Partner in accordance with the Transfer Determination provisions of Section 8.1(b) hereof in respect of the issuance of additional Partnership Interests, may cause the Partnership to issue, pursuant to an Incentive Option Plan, Partnership Interests (herein referred to as an "Incentive Interest") to and, if desired, admit as Partners in the Partnership, Persons upon exercise of the Incentive Options in exchange for the contribution to the capital of the Partnership of the exercise price, in accordance with the Incentive Option Plan governing such grant. In the event that any individual that is granted an Incentive Option is not permitted to be a partner in the Partnership as a result of Section 8.1(b)(i) hereof, and is not prohibited from acquiring additional Equity Shares pursuant to the provisions of TCO's Articles of Incorporation, as the same may be amended from time to time, such individual shall assign to TCO its rights under the Incentive Option Plan in exchange for Equity Shares prior to the actual issuance of such Partnership Interest to such individual. In the event that an Incentive Interest is issued by the Partnership pursuant to this Section 8.4(b), such Incentive Interest shall be provided by a proportionate reduction in the Percentage Interests of all of the Partners. The Managing General Partner shall be authorized on behalf of each of the Partners to amend this Agreement and the Certificate of Limited Partnership (if required by the Partnership Law), to reflect the admission of an additional limited partner and the corresponding reduction in the Percentage Interests of all of the Partners.

Section 8.5 Conversion of Partnership Interests.

(a) Taub-Co shall have no obligation to remain a General Partner of the Partnership. Taub-Co, at any time, may, without the consent of any Partner including the Managing General Partner, convert all, or any portion, of its Partnership Interest as a General Partner to a Partnership Interest as a limited partner, which limited partner shall have and be subject to all of the rights, obligations, restrictions, and attributes of a limited partner, all as provided in this Agreement but shall retain all of those specific rights and attributes provided Taub-Co as a Non- Managing Partner under this Agreement. In the event of a conversion of all or a portion of Taub-Co's Partnership Interest pursuant to this Section 8.5(a), the Managing General Partner may, without the approval, consent or act of any Partner, amend this Agreement, the Certificate of Limited Partnership (if required by the Partnership Law), and any other document determined by the Managing General Partner, or reasonably requested by Taub-Co, to be necessary to reflect the foregoing.

(b) TG and TCO shall each remain a General Partner of the Partnership. In the event that TCO acquires all or a portion of the Partnership Interest of a Limited Partner, such Partnership Interest shall, without any further action, automatically convert to a general partner's Partnership Interest in the Partnership; provided, however, that without the approval, consent or act of any Partner, the Managing General Partner may amend this Agreement, the Certificate of Limited Partnership (if required by the Partnership Law), and any other document determined by the Managing General Partner to be necessary to reflect the foregoing.

Section 8.6 No Change to TG Receivable Documents.

The approval of the Managing General Partner shall be required to amend the TG Receivable Documents, to permit a Transfer, or a prepayment (in whole or in part), of the TG Receivables or permit any Person to be released from liability thereunder.

40 IX.

WITHHOLDING.

If the Partnership is required by any state or federal law or regulation to withhold tax attributable to allocations of Profits or items of the foregoing or distributions to a Partner or if the Managing General Partner in its discretion, determines it to be in the best interest of the Partnership to withhold amounts in connection with a Partner's tax liability (e.g., to file a unified state income tax return for nonresidents of a particular state) (all such amounts being herein referred to collectively as the "Additional Tax"), any Additional Tax shall (i) be withheld from cash otherwise currently distributable to such Partner, and (ii) to the extent cash is not distributable to such Partner for the taxable period as to which such withholding is required, be treated as a loan from the Partnership to such Partner, which loan shall bear interest at the Partnership's cost of funds, and the portion of all cash subsequently distributable to such Partner shall, to the extent of the unpaid principal amount of, and the accrued interest on, such loan, be retained by the Partnership and applied against such loan.

For the purpose of determining a Partner's Capital Account, any amount of cash allocable to a Partner that is retained by the Partnership pursuant to this Article IX shall be treated as if such cash had been actually distributed to such Partner.

41 X.

DISABLING EVENT OR EVENT OF WITHDRAWAL IN RESPECT OF A PARTNER; SUCCESSION OF INTERESTS.

Section 10.1 Disabling Event or Event of Withdrawal in Respect of a Partner.

(a) For purposes of this Article X:

(1) a "Disabling Event" means, with respect to a Partner, such Partner's (A) in the case of a Partner that is a natural person, death, (B) Bankruptcy, (C) in the case of a Partner who is a natural person, the entry by a court of competent jurisdiction adjudicating him incompetent to manage his person or his property, (D) in the case of a Partner who is acting as a Partner by virtue of being a trustee of a trust, the termination of the trust (but not merely the substitution of a new trustee), (E) in the case of a Partner that is a separate partnership or limited liability company, the dissolution and commencement of winding up of the separate partnership or limited liability company, or (F) in the case of a Partner that is a corporation, the filing of a certificate of dissolution, or its equivalent, for the corporation or the revocation of its charter and the expiration of ninety (90) Days after the date of notice to the corporation or revocation without a reinstatement of its charter;

(2) a "Disabled Partner" or the "Disabled General Partner" or the "Disabled Limited Partner" means a Partner (General or Limited, as the case may be) who has suffered a Disabling Event or an Event of Withdrawal;

(3) a "Representative" means, with respect to a Disabled Partner, (A) the personal representative(s), executor(s), or administrator(s) of the estate of a deceased Partner, and (B) the committee or other legal representative(s) of the estate of an insane, incompetent, or Bankrupt Partner;

(4) a "Successor" means, with respect to a Disabled Partner, the legal representative(s) or successor(s) of a corporation, partnership or other business organization, or trust or other entity which is dissolved (without timely reconstitution or continuation) or terminated or whose legal existence has ceased; and

(5) "Event of Withdrawal" means, with respect to a Partner, such Partner's retirement, resignation, other withdrawal from the Partnership pursuant to the Partnership Law or any other event (which is not a Disabling Event) that causes a Partner to cease to be a Partner under the Partnership Law.

(b) Upon the occurrence of a Disabling Event or an Event of Withdrawal in respect of a General Partner the Partnership shall dissolve; provided, however, that the Partnership shall not be dissolved if the remaining General Partners, by an affirmative, unanimous vote of such General Partners, elect to continue the Partnership in all respects pursuant to this Agreement, and the Partnership Interest of the Disabled General Partner shall automatically become that of a limited partner except to the extent such Disabled General Partner, at such time or any time thereafter, assigns its Partnership Interest to another General Partner, subject to the provisions of Section 8.1 hereof; and such Disabled General Partner or Successor shall thereupon have the same interest in the Partnership capital, profits, losses, and distributions as the Disabled General Partner, but otherwise shall have and be subject to all the rights, obligations, restrictions, and attributes of a limited partner, all as provided in this Agreement. Upon the occurrence of a Disabling Event or an Event of Withdrawal in respect of the last remaining General Partner, the Partnership shall dissolve; provided, however, that the Partnership shall not be dissolved if within ninety (90) Days after such Disabling Event or Event of Withdrawal (the "Ninety Day Period") all Partners agree in writing to continue the business of the Partnership and to the appointment, effective as of the date of such Disabling Event or Event of Withdrawal, of one (1) or more general partners of the Partnership as successor general partner(s) ("Successor General Partner") to act as, and be in all respects under this Agreement, a general partner. If any such election is made, the Partnership shall continue pursuant to this Agreement for the term provided in Section 1.5 hereof, and the Partnership

42 Interest of the Disabled General Partner in the Partnership (except to the extent such interest is held by the Successor General Partner) shall automatically become that of a limited partner; and such Representative or Successor to the Disabled General Partner (subject, in the case of a Representative or Successor, to Sections 8.1 and 8.2 hereof) shall thereupon have the same interest in the Partnership capital, profits, losses, and distributions as the Disabled General Partner, but otherwise (except to the extent a Successor to the Disabled General Partner shall be the Successor General Partner) shall have and be subject to all the rights, obligations, restrictions, and attributes of a limited partner, all as provided in this Agreement. In the event of the selection of a Successor General Partner, as provided in this Section 10.1(b), (1) each of the Partners, on behalf of itself and its permitted successors and assigns, HEREBY AGREES AND CONSENTS to the admission of any such Successor General Partner as herein provided; and (2) the then Partners shall execute and deliver such instruments and documents, and shall take such actions, as shall be necessary or advisable, in the sole and absolute discretion of the Successor General Partner to carry out the provisions of this Article X, including, but not limited to, (x) the execution of conformed counterparts of this Agreement, amendments to this Agreement, and/or an amended limited partnership agreement, (y) the execution and filing of certificates of discontinuance, assumed or fictitious name certificates, certificates of co-partnership, and/or certificates of limited partnership, and/or amended certificates of limited partnership, and (z) the execution of such instruments and documents (including, but not limited to, deeds, bills of sale, and other instruments of conveyance and/or assignments of Partnership Interest) as shall be necessary or advisable to effect any necessary transfer (nominal or otherwise) of the property, assets, investments, rights, liabilities, and business of the Partnership or of a Partnership Interest and/or to accomplish the purpose and intent of this Article X. In the event that a Partner shall fail to execute any such instruments or documents or fail to take any such actions, when requested to do so by the Successor General Partner, the Successor General Partner and/or any Person designated by the Successor General Partner, as attorney-in-fact for each of the Partners, shall have the right and power for, on behalf of, and in the name of each of the Partners to execute any and all such instruments and documents and take any and all such actions.

(c) The occurrence of a Disabling Event or an Event of Withdrawal in respect of a Limited Partner shall not, in and of itself, dissolve the Partnership. Subject to the provisions of Section 8.1 hereof, in the event of a Disabling Event or an Event of Withdrawal in respect of a Limited Partner, the Disabled Limited Partner or its Representative or Successor, upon compliance with the provisions of Section 8.2 hereof, shall remain or be admitted as a limited partner in the Partnership and shall have all the rights of the Disabled Limited Partner as a limited partner in the Partnership to the extent of the Disabled Limited Partner's Partnership Interest, subject to the terms, provisions, and conditions of this Agreement.

Section 10.2 References to "Partner" and "Partners" in the Event of Successors.

In the event that any Partner's Partnership Interest is held by one or more successors to such Partner, references in this Article X to "Partner" and "Partners" shall refer, as applicable and except as otherwise provided herein, to the collective Partnership Interests of all successors to the Partnership Interest of such Partner.

Section 10.3 Waiver of Dissolution if Transfer is in Full Compliance with Agreement; Negation of Right to Dissolve Except as Herein Provided; No Withdrawal.

(a) Each of the Partners hereby waives its right to terminate or cause the dissolution and winding up of the Partnership (as such right is or may be provided under the Partnership Law) upon the Transfer of any Partner's Partnership Interest.

(b) No Partner shall have the right to terminate this Agreement or dissolve the Partnership by such Partner's express will.

(c) No Partner shall have any right to retire, resign, or otherwise withdraw from the Partnership and have the value of such Partner's Partnership Interest ascertained and receive an amount equal to the value of such Partnership Interest.

43 (d) In the event of an Event of Withdrawal in respect of a Partner in breach of this Agreement but pursuant to such Partner's statutory powers under the Partnership Law, to the extent that such powers exist in the face of a prohibition against withdrawal in this Agreement, then the value of such Partner's Partnership Interest shall be ascertained in accordance with the Partnership Law, and such Partner shall receive from the Partnership in exchange for the relinquishment of such Partner's Partnership Interest an amount equal to the lesser of (i) the value of such Partner's Partnership Interest as so determined less any damages incurred by the Partnership as a result of such Partner's breach of this Agreement, and (ii) ninety percent (90%) of the value of such Partner's Partnership Interest as so determined. In no event shall a Partner be considered to have withdrawn from the Partnership solely as a result of such Partner having suffered a Disabling Event.

44 XI.

TERMINATION OF THE PARTNERSHIP, WINDING UP, AND LIQUIDATION.

Section 11.1 Liquidation of the Assets of the Partnership and Disposition of the Proceeds Thereof.

(a) Upon the dissolution of the Partnership, the Managing General Partner, or in the event that the Managing General Partner has suffered a Disabling Event or an Event of Withdrawal and there are one or more remaining General Partners, such remaining General Partner(s), or in the event that there is no remaining General Partner, a Person selected by those Partners holding in the aggregate a Percentage Interest of in excess of fifty percent (50%) (the Managing General Partner or such Person so selected is herein referred to as the "Liquidator"), shall proceed to wind up the affairs of the Partnership, liquidate the property and assets of the Partnership, and terminate the Partnership, and the proceeds of such liquidation shall be applied and distributed in the following order of priority:

(1) to creditors, to the extent otherwise permitted by law, in satisfaction of liabilities of the Partnership (whether by payment or by making a reasonable provision for payment) other than obligations of the Partnership to the Partners and liabilities for distribution to Partners on account of their respective interests in the Partnership; and then

(2) to the satisfaction of all obligations of the Partnership to Partners other than the Guaranteed Payment; and then

(3) to TCO in an amount equal to the accrued but unpaid Guaranteed Payment (in the priorities, if any, set forth in the applicable series); and then

(4) to TCO in an amount equal to the Preferred Equity (in the priorities, if any, set forth in the applicable series); and then

(5) to the Partners in accordance with and in proportion to their positive Capital Account balances. For this purpose, the determination of the Partners' Capital Account balances shall be made after adjustment to reflect the allocation of all Profits, Losses, and items in the nature of income, gain, expense, or loss under Section 5.1 hereof, and all distributions to the Partners pursuant to Section 5.2(a), Section 5.2(b), and Section 11.1(a)(4) hereof, in each case for all Partnership Fiscal Years through and including the Partnership Fiscal Year of liquidation. Subject to the provisions of clause (1) of this Section 11.1(a), all distributions pursuant to this Section 11.1(a) shall be made by the end of the Partnership Fiscal Year of liquidation (or if later, within ninety (90) Days after the date of such liquidation).

(b) Subject to the requirements of Regulations Section 1.704-1(b)(2)(ii)(b)(2), a reasonable time shall be allowed for the orderly liquidation of the property and assets of the Partnership and the payment of the debts and liabilities of the Partnership in order to minimize the losses normally attendant upon a liquidation.

(c) Each Partner hereby appoints the Liquidator as its true and lawful attorney-in-fact to hold, collect, and disburse, in accordance with this Agreement, the applicable requirements of Regulations Section 1.704-1(b), and the terms of any receivables, any Partnership receivables existing at the time of the termination of the Partnership and the proceeds of the collection of such receivables, including those arising from the sale of Partnership property and assets. Notwithstanding anything to the contrary in this Agreement, the foregoing power of attorney shall terminate upon the distribution of the proceeds of all such receivables in accordance with the provisions of this Agreement.

(d) Notwithstanding anything to the contrary contained in this Agreement, if a General Partner or any Limited Partner which, by written notice to the Partnership, in its sole discretion, elects to be bound by this Section 11.1(d) shall have a negative balance in its Capital Account upon liquidation of the Partnership or upon liquidation of its Partnership Interest, after giving effect to the allocation of all Profits, Losses, gain or loss and items of the foregoing under Section 5.1 hereof and all distributions to the

45 Partners pursuant to Section 5.2 hereof in each case for all Partnership Fiscal Years through and including the Partnership Fiscal Year of such liquidation, such Partner shall be obligated to make an additional capital contribution to the Partnership by the end of the Partnership Fiscal Year of liquidation (or, if later, within ninety (90) Days after the date of such liquidation), in an amount sufficient to eliminate the negative balance in its Capital Account. For purposes of this Section 11.1(d), "liquidation" shall be as defined in Regulations Section 1.704-1(b)(2)(ii) (g).

(e) In connection with a liquidation of a Partner's interest in the Partnership within the meaning of Treasury Regulations Section 1.704-1(b)(2) (ii)(g) that is not in connection with a liquidation of the Partnership, distributions to such Partner shall be made in accordance with the requirements of Treasury Regulations Section 1.704-1(b)(2)(ii)(b)(2).

Section 11.2 Cancellation of Certificates.

After the affairs of the Partnership have been wound up, the property and assets of the Partnership have been liquidated, and the proceeds thereof have been applied and distributed as provided in Section 11.1(a) hereof and the Partnership has been terminated, appropriate Persons shall, if required by law, execute and file a certificate of dissolution or cancellation of the Certificate of Limited Partnership and/or assumed or fictitious name certificate (or a similar writing) to effect the cancellation, of record, of the certificate(s) of partnership of the Partnership (or similar writing), and the Partnership Interest Certificates.

Section 11.3 Return of Capital.

Except as otherwise provided in Section 11.1(d) hereof, anything in this Agreement to the contrary notwithstanding, no General Partner shall be personally liable for the return of the capital contributions or Capital Account of any Partner, or any portion thereof, it being expressly understood that any such return shall be made only from and to the extent of Partnership assets.

46 XII.

POWER OF ATTORNEY.

Each Partner hereby constitutes and appoints the Managing General Partner and any Person or Persons designated or delegated by the Managing General Partner its true and lawful attorney-in-fact with full power of substitution, and with power and authority to act in its name and on its behalf, to make, execute and deliver, swear to, acknowledge, file, and record:

(a) this Agreement (and copies hereof) and amendments hereto or restatements hereof adopted pursuant to the provisions hereof (including, without limitation, any such amendment required upon the admission of a substitute or additional partner, the continuation of the Partnership, the formation of a successor partnership, or the doing of any act requiring the amendment of this Agreement under the Partnership Law or under the applicable laws of any other jurisdiction in which the Managing General Partner deems such action to be necessary or desirable, or by any regulatory agency) and, upon termination of the Partnership (or its successor), a certificate or agreement of dissolution and termination, as and if the same may be required by applicable law, or by any regulatory agency;

(b) the Certificate of Limited Partnership (and copies thereof) and any amendments thereto or restatements thereof adopted pursuant to the provisions hereof (including, without limitation, any amendment required upon the admission of a substitute or additional partner, the continuation of the Partnership, the formation of a successor partnership, or the doing of any act requiring the amendment of the Certificate of Limited Partnership under applicable law or regulatory agency, or the filing of a new or restated or amended Certificate of Limited Partnership (or amendment thereto) after the filing of a Certificate of Discontinuance or Dissolution or Termination, a cancellation, or the like, to evidence a new or changed constituency of, or a termination of, the Partnership, as the Managing General Partner deems said filing to be necessary or desirable);

(d) any other certificates or instruments as may be required under applicable laws or by any regulatory agency, as the Managing General Partner, deems necessary or desirable;

(e) all such other instruments as the Managing General Partner deems necessary or desirable and not inconsistent with this Agreement to carry out the provisions hereof in accordance with the terms hereof, including, without limitation, to execute and issue Partnership Interest Certificates in accordance with Section 4.7 or Section 13.18 hereof; and

(f) any document(s) to confirm the foregoing. Such attorney-in-fact shall, as such, have the right, power, and authority as such to amend or modify this Agreement and all certificates and the like required when acting in such capacity, so long as such amendment, modification, and/or filing is(are) specifically permitted by this Agreement.

The power of attorney granted in this Article XII (and each other power of attorney granted under or pursuant to this Agreement) is a special power of attorney coupled with an interest, is irrevocable, and shall survive the Transfer by a Partner of his Partnership Interest and shall survive his insanity, disability, incapacity, incompetency, Bankruptcy, and death and may be exercised by the attorney-in-fact by his signature on behalf of all Partners.

47 XIII.

MISCELLANEOUS.

Section 13.1 Notices.

(a) Any and all notices, approvals, directions, consents, offers, elections, and other communications (herein sometimes referred to collectively as the "Communications" and individually as a "Communication") required or permitted under this Agreement shall be deemed adequately given only if in writing.

(b) All Communications to be sent hereunder to a Partner or the Manager shall be given or served only if addressed to such Partner at its address set forth in the records of the Partnership or the Manager at its address as set forth in the Master Services Agreement or applicable management, administration, leasing, and development services contract, and if delivered by hand (with delivery receipt required), by telecopier (confirmation of receipt requested), or by certified mail, return receipt requested, or Federal Express or similar expedited overnight commercial carrier or courier.

(c) All Communications shall be deemed to have been properly given or served, if delivered by hand or mailed, on the date of receipt or date of refusal to accept shown on the delivery receipt or return receipt, if delivered by Federal Express or similar expedited overnight commercial carrier or courier, on the date that is one Business Day after the date upon which the same shall have been delivered to Federal Express or similar expedited overnight commercial carrier, addressed to the recipient, with all shipping charges prepaid, provided that the same is actually received (or refused) by the recipient in the ordinary course, and if sent by telecopier, on the date of confirmed delivery. The time to respond to any Communication given pursuant to this Agreement shall run from the date of receipt or confirmed delivery, as applicable.

(d) By giving to the Managing General Partner written notice thereof, the parties hereto and their respective successors and assigns shall have the right from time to time and at any time during the term of this Agreement to change the Person to receive Communications and their respective addresses effective upon receipt by the other parties of such notice and each shall have the right to specify as its address any other address within the United States of America.

Section 13.2 Applicable Law.

This Agreement shall be governed by and construed in accordance with, the laws (other than the law governing choice of law) of the State of Delaware. In the event of a conflict between any provision of this Agreement and any non-mandatory provision of the Partnership Law, the provision of this Agreement shall control and take precedence.

Section 13.3 Entire Agreement.

This Agreement contains the entire agreement among the parties hereto relative to the Partnership.

Section 13.4 Word Meanings; Gender.

The words such as "herein," "hereinafter," "hereof," and "hereunder" refer to this Agreement as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires. The singular shall include the plural and the masculine gender shall include the feminine and neuter, and vice versa, unless the context otherwise requires.

Section 13.5 Section Titles.

Section titles are for descriptive purposes only and shall not control or alter the meaning of this Agreement as set forth in the text.

48 Section 13.6 Waiver.

No consent or waiver, express or implied, by a Partner to or of any breach or default by any other Partner in the performance by such other Partner of its obligations hereunder shall be deemed or construed to be a consent or waiver to or of any other breach or default in the performance by such other Partner of the same or any other obligation of such Partner hereunder. Failure on the part of a Partner to object to any act or failure to act of any other Partner or to declare such other Partner in default, irrespective of how long such failure continues, shall not constitute a waiver by such Partner of its rights hereunder.

Section 13.7 Separability of Provisions.

Each provision of this Agreement shall be considered separable and if for any reason any provision or provisions herein are determined to be invalid, unenforceable, or illegal under any existing or future law, such invalidity, unenforceability, or illegality shall not impair the operation of or affect the other portions of this Agreement.

Section 13.8 Binding Agreement.

Subject to the restrictions on Transfers set forth herein, this Agreement shall inure to the benefit of and be binding upon the undersigned Partners and their respective heirs, executors, personal representatives, successors, and assigns. Whenever, in this instrument, a reference to any party or Partner is made, such reference shall be deemed to include a reference to the permitted heirs, executors, personal representatives, successors, and assigns of such party or Partner.

Section 13.9 Equitable Remedies.

Except as otherwise provided in this Agreement, the rights and remedies of the Partners hereunder shall not be mutually exclusive, i.e., the exercise of a right or remedy under any given provision hereof shall not preclude or impair exercise of any other right or remedy hereunder. Each of the Partners confirms that damages at law may not always be an adequate remedy for a breach or threatened breach of this Agreement and agrees that, in the event of a breach or threatened breach of any provision hereof, the respective rights and obligations hereunder shall be enforceable by specific performance, injunction, or other equitable remedy, but nothing herein contained is intended to, nor shall it, limit or affect any rights at law or by statute or otherwise of any party aggrieved as against the other for a breach or threatened breach of any provision hereof.

Section 13.10 Partition.

No Partner nor any successor -in-interest to a Partner shall have the right while this Agreement remains in effect to have any property of the Partnership partitioned, or to file a complaint or institute any proceeding at law or in equity to have such property of the Partnership partitioned, and each Partner, on behalf of itself and its successors and assigns, hereby waives any such right. It is the intention of the Partners that the rights of the parties hereto and their successors-in-interest to Partnership property, as among themselves, shall be governed by the terms of this Agreement, and that the rights of the Partners and their successors-in-interest to Transfer any interest in the Partnership shall be subject to the limitations and restrictions set forth in this Agreement.

Section 13.11 Amendment.

Except as otherwise provided in Sections 1.1, 4.5(a), 8.1, 8.2, 8.4, 8.5, and Article X hereof, a proposed amendment to this Agreement may be adopted and effective as an amendment hereto if it receives the written concurrence of each Appointing Person. Notwithstanding the foregoing, but except as otherwise provided in Sections 1.1, 4.5(a), 8.1, 8.2, 8.4, 8.5, and Article X hereof, (i) no such amendment shall change a Partner's Percentage Interest or increase a Partner's obligation to contribute to the capital of (or require a Partner to loan to) the Partnership or change the proviso at the end of Section 4.2 hereof, or change the provisions hereof relating to the allocation of Profits, Losses, or other items, or change the distribution provisions of Section 5.2(a) hereof except for the timing of such distributions within the Partnership Fiscal Year and within

49 thirty (30) Days thereafter and except for the timing of notices, including notices to be given pursuant to Section 6.4 hereof, with respect to distributions, or change the provisions of Section 8.5(a) hereof, or cause a limited partner to become a general partner, or remove a Partner, or remove a Partner's right to consent, approve, or vote or right to assign any such right as herein provided, or change the ability of a Partner to assign its Partnership Interest as provided in Article VIII hereof, without, in each such case, the written concurrence of each Partner, if any, whose Partnership Interest will be directly and adversely affected by such amendment, (ii) no such amendment shall change the provisions of Section 8.1(c) hereof without the written concurrence of those Partners holding in the aggregate a Percentage Interest equal to at least the sum of (x) the Percentage Interest held by TCO at the time of any such amendment plus (y) ninety-five percent (95%) of the difference between one hundred percent (100%) and the Percentage Interest held by TCO at the time of any such amendment, and (iii) no such amendment shall permit a combination of Units of Partnership Interest where the fair market value of each resulting Unit of Partnership Interest is in excess of One Hundred Thousand Dollars ($100,000) or change the provisions of this Section 13.11 without in either case the written concurrence of each Partner.

Section 13.12 No Third Party Rights Created Hereby.

The provisions of this Agreement are solely for the purpose of defining the interests of the Partners, inter se; and no other person, firm, or entity (i.e., a party who is not a signatory hereto or a permitted successor to such signatory hereto) shall have any right, power, title, or interest by way of subrogation or otherwise, in and to the rights, powers, titles, and provisions of this Agreement.

Section 13.13 Liability of Partners.

Except as otherwise provided in this Agreement, as among the Partners, any liability or debt of the Partnership shall first be satisfied out of the assets of the Partnership, including the proceeds of any liability insurance which the Partnership may recover, and thereafter, in accordance with the applicable provisions of the Partnership Law.

Section 13.14 Additional Acts and Instruments.

Each Partner hereby agrees to do such further acts and things and to execute any and all instruments necessary or desirable and as reasonably required in the future to carry out the full intent and purpose of this Agreement.

Section 13.15 Agreement in Counterparts.

This Agreement may be executed in two (2) or more counterparts, all of which as so executed shall constitute one (1) Agreement, binding on all of the parties hereto, notwithstanding that all the parties are not signatory to the original or the same counterpart; provided, however, that no provision of this Agreement shall become effective and binding unless and until all parties hereto have duly executed this Agreement, at which time this Agreement shall then become effective and binding as of the date first above written.

Section 13.16 Attorneys-In-Fact.

Any Partner may execute a document or instrument or take any action required or permitted to be executed or taken under the terms of this Agreement by and through an attorney-in-fact duly appointed for such purpose (or for purposes including such purpose) under the terms of a written power of attorney (including any power of attorney granted herein).

Section 13.17 Execution by Trustee.

Any trustee executing this Agreement shall be considered as executing this Agreement solely in his capacity as a trustee of the trust of which he is a trustee, and such trustee shall have no personal liability hereunder.

50 Section 13.18 Lost Partnership Interest Certificates.

In the event that any Partnership Interest Certificate shall be lost, stolen, or destroyed, the Managing General Partner may authorize the issuance of a substitute Partnership Interest Certificate in place of the Partnership Interest Certificate so lost, stolen, or destroyed. In each such case, the applicant for a substitute Partnership Interest Certificate shall furnish to the Managing General Partner evidence to their satisfaction of the loss, theft, or destruction of such Partnership Interest Certificate and of the ownership thereof, and also such security or indemnity as they may reasonably require.

51 IN WITNESS WHEREOF, the undersigned Appointing Persons, in accordance with Section 13.11 of the Amended and Restated Partnership Agreement, as amended, on behalf of all of the Partners, have executed this Agreement as of the date first above written.

TAUBMAN CENTERS, INC., a Michigan corporation

By: /s/ LISA A. PAYNE ------Lisa A. Payne

Its: Executive Vice President and Chief Financial Officer

TG PARTNERS LIMITED PARTNERSHIP, a Delaware limited partnership

By: TG Michigan, Inc., a Michigan corporation, managing general partner

By: /s/ ROBERT S. TAUBMAN ------Robert S. Taubman

Its: President and Chief Executive Officer

TAUB-CO MANAGEMENT, INC., a Michigan corporation

By: /s/ ROBERT S. TAUBMAN ------Robert S. Taubman

Its: President and Chief Executive Officer

52 Exhibit 12 (a)

TAUBMAN CENTERS, INC.

Computation of Ratio of Earnings to Preferred Stock Dividends (in thousands, except ratio)

Nine Months Ended September 30, 1998 ------

Net Earnings from Continuing Operations $23,886

Preferred Stock Dividends 12,450

Ratio of Earnings to Preferred Stock Dividends 1.9

Note: The Company did not have any fixed charges during the nine months ended September 30, 1997. Exhibit 12 (b)

THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP

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

Nine Months Ended September 30 ------1998 1997 ------

Net Earnings from Continuing Operations (1) $ 1,150,385 $ 68,795 Add back: Fixed charges 115,094 91,710 Amortization of previously capitalized interest (2) 1,842 1,487

Deduct: Capitalized interest (2) (13,699) (10,649) ------Earnings Available for Fixed Charges and Preferred Distributions $ 1,253,622 $ 151,343 ======

Fixed Charges Mortgage notes and other $ 66,662 $ 54,002 Capitalized interest 12,830 6,798 Interest portion of rent expense 5,258 5,595 Proportionate share of Unconsolidated Joint Ventures' fixed charges 30,344 25,315 ------Total Fixed Charges $ 115,094 $ 91,710 ======

Preferred Distributions 12,450 ------Total Fixed Charges and Preferred Distributions $ 127,544 $ 91,710 ======

Ratio of Earnings to Fixed Charges and Preferred Distributions 9.8 1.7

(1) Amount includes the approximately $1.1 billion gain on the GMPT Exchange that was recognized during the nine months ended September 30, 1998. (2) Amounts include TRG's pro rata share of capitalized interest and amortization of previously capitalized interest of the Unconsolidated Joint Ventures. ARTICLE 5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE TAUBMAN CENTERS, INC. BALANCE SHEET AS OF SEPTEMBER 30, 1998 AND THE TAUBMAN CENTERS, INC. STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. CIK: 0000890319 NAME: TAUBMAN CENTERS, INC. MULTIPLIER: 1,000 CURRENCY: U.S. DOLLARS

PERIOD TYPE 9 MOS FISCAL YEAR END DEC 31 1998 PERIOD START JAN 01 1998 PERIOD END SEP 30 1998 EXCHANGE RATE 1 CASH 33,804 SECURITIES 0 RECEIVABLES 23,063 ALLOWANCES 386 INVENTORY 0 CURRENT ASSETS 0 1 PP&E 1,371,790 DEPRECIATION 167,259 TOTAL ASSETS 1,378,381 CURRENT LIABILITIES 0 1 BONDS 683,465 PREFERRED MANDATORY 0 PREFERRED 80 COMMON 529 OTHER SE 526,728 TOTAL LIABILITY AND EQUITY 1,378,381 SALES 0 TOTAL REVENUES 24,655 CGS 0 TOTAL COSTS 0 OTHER EXPENSES 188 LOSS PROVISION 0 INTEREST EXPENSE 0 INCOME PRETAX 23,886 INCOME TAX 0 INCOME CONTINUING 23,886 DISCONTINUED 0 EXTRAORDINARY (20,066) CHANGES 0 NET INCOME 3,820 EPS PRIMARY (.17) EPS DILUTED (.17) 1 THE COMPANY HAS AN UNCLASSIFIED BALANCE SHEET.

End of Filing