Taubman Realty Group Ltd Partnership – ‘8-K’ for 9/30/98 – EX-2

As of:  Thursday, 10/15/98   ·   For:  9/30/98   ·   Accession #:  917473-98-18   ·   File #:  33-73988

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Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Form 8-K Dated September 30, 1998                     12     45K 
 2: EX-2        Separation Agreement                                  70    230K 

EX-2   —   Separation Agreement
Exhibit Table of Contents

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SEPARATION AND RELATIVE VALUE ADJUSTMENT AGREEMENT

 between

THE TAUBMAN REALTY GROUP
 LIMITED PARTNERSHIP

 and

 GMPTS LIMITED PARTNERSHIP

August   17  , 1998 
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 TABLE OF CONTENTS

    ARTICLE 1 - DEFINED TERMS............................................  3
          1.1   Defined Terms............................................  3
          1.2   Use of Certain Terms..................................... 11
          1.3   Accounting Terms......................................... 11

    ARTICLE 2 - REDEMPTION............................................... 12
          2.1   Transfer and Redemption of Units......................... 12
          2.2   Delivery of the Exchange Units........................... 12
          2.3   Exchange Debt............................................ 12

    ARTICLE 3 - PROPERTY REPRESENTATIONS AND WARRANTIES.................. 13
          3.1   The Company's Property Representations and Warranties.... 13
          3.2   Due Diligence............................................ 23
          3.3   Adjustment Amount........................................ 25
        3.4   Untrue Property Representations and Other Representations;
                Limitation on the Company's Liability.................... 28
          3.5   Rejection Conditions..................................... 29
          3.6   Condition of Exchange Properties......................... 32
          3.7   Interest................................................. 33
          3.8   GMPTS's Knowledge Regarding Required Consents............ 33
          3.9   Currency................................................. 33
          3.10  Survival of the Representations and Warranties........... 34

    ARTICLE 4 - PRORATIONS, EXPENSES, COSTS, AND TAX RETURNS............. 35
          4.1   Proration................................................ 35
          4.2   Fees and Expenses........................................ 37
          4.3   Costs if Agreement Terminates............................ 38
          4.4   Survival................................................. 38

    ARTICLE 5 - TAX MATTERS.............................................. 39
          5.1   Profits and Losses of Partnership Prior to Closing....... 39
          5.2   Tax Returns.............................................. 39
          5.3   Cooperation.............................................. 40
          5.5   Survival................................................. 40

    ARTICLE 6 - CLOSING.................................................. 40
          6.1   Closing.................................................. 40
          6.2   The Company's Closing Deliveries......................... 41
          6.3   GMPTS's Closing Deliveries............................... 43
          6.4   Survival................................................. 44

    ARTICLE 7 - CONDITIONS TO CLOSING.................................... 44
          7.1   Conditions Precedent to the Company's Obligations........ 44
          7.2   Conditions Precedent to GMPTS's Obligation............... 45
          7.3   Injunction............................................... 45
          7.4   Waiver of Failure of Conditions Precedent................ 45
          7.5   No Other Conditions to Closing........................... 46

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    ARTICLE 8 - REPRESENTATIONS AND WARRANTIES........................... 46
          8.1   GMPTS's Representations and Warranties................... 46
          8.2   The Company's Representations and Warranties............. 47

    ARTICLE 9 - COVENANTS................................................ 48
          9.1   GMPTS's Covenants........................................ 48
                9.1.1 Confidentiality.................................... 48
                9.1.2 Approvals not a Condition to GMPTS's Performance... 49
                9.1.3 Board and Partnership Committee Seats.............. 49
          9.2   The Company's Covenants.................................. 49
            9.2.1 Management, Maintenance, and Operation of Exchange
                 Properties Prior to Closing............................. 50
                9.2.2 Access to Exchange Properties...................... 51
                9.2.3 Estoppels.......................................... 51
                9.2.4 Confidentiality.................................... 52
          9.3   Mutual Covenants......................................... 52
                9.3.1 Publicity.......................................... 52
                9.3.2 Covenants of the Company and GMPTS................. 53

    ARTICLE 10 - DEFAULT................................................. 54
          10.1  Default by GMPTS......................................... 54
          10.2  Default by the Company................................... 54
          10.3  Specific Enforcement..................................... 55
          10.4  Survival................................................. 55

    ARTICLE 11 - INDEMNITY AND RELEASE................................... 56
          11.1  Indemnification by the Company........................... 56
          11.2  Indemnification by GMPTS................................. 57
          11.3  Notice of Indemnification................................ 58
          11.4  Procedure for Third-Party Claims......................... 59
          11.5  Limitation on the Company's Liability for Certain Matters 60
          11.6  Limitation on GMPTS' Liability for Certain Matters....... 60
          11.7  Punitive and Consequential Damages....................... 61
          11.8  Mutual Release........................................... 61
          11.9  Survival................................................. 61

    ARTICLE 12 - MISCELLANEOUS........................................... 62
          12.1  Counterparts............................................. 62
          12.2  Assignment............................................... 62
          12.3  Waiver................................................... 62
          12.4  No Recordation........................................... 62
          12.5  Blue-Pencil.............................................. 63
          12.6  Governing Law............................................ 63
          12.7  Notices.................................................. 63
          12.8  Survival................................................. 64
          12.9  Exchange Properties Held for Investment.................. 64
          12.10 Binding Effect........................................... 64
          12.11 Captions................................................. 64
          12.12 Entire Agreement......................................... 65

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EXHIBITS

Exhibit A - Exchange Properties and Exchange Owning Entities                    
Exhibit B - Debt to be Assumed by NewCo                                         
Exhibit C - Excluded  Assets                                                    
Exhibit D - Real Estate Taxes and Assessments Being Contested But Unpaid        
Exhibit E - Unsecured Note                                                      
Exhibit F - Assignment of Membership Interest (for NewCo and NewCo Two)         
Exhibit G - Certificate of Amendment of Limited Partnership                     
Exhibit H - Certificate Updating Representations and Warranties of the Company  
Exhibit I - Legal  Opinion - Company                                            
Exhibit J - Non-Foreign Status Affidavit                                        
Exhibit K - Evidence of Authority - Company                                     
Exhibit L-1 - Direction to Distribute Trust Assets - TRG Trust                  
Exhibit L-2 - Direction to Distribute Trust Assets - TRG Trust II               
Exhibit L-3 - Direction to Distribute Trust Assets - TRG Trust IV               
Exhibit L-4 - Direction to Distribute Trust Assets - TRG Trust XIII             
Exhibit M - Property Management Agreement                                       
Exhibit N - Transfer Tax Affidavits                                             
Exhibit O-1 - Certificate of Formation for NewCo                                
Exhibit O-2 - Certificate of Formation for NewCo Two                            
Exhibit P-1 - Amendment to Certificate of Formation for NewCo                   
Exhibit P-2 - Amendment to Certificate of Formation for NewCo Two               
Exhibit Q - Assignment of Partnership Interests (for assignments into NewCo  and
       NewCo Two and  assignments  into the Company by the TRG Trusts)
Exhibit R - Assignment of Exchange Units                                        
Exhibit S - Certificate of Withdrawal                                           
Exhibit T - Certificate Updating Representations and Warranties of GMPTS        
Exhibit U - Assumption  and  Agreement of NewCo  of Obligations under Separation
Agreement                                               
Exhibit V - Legal Opinion - GMPTS                                               
Exhibit W - Evidence of Authority                                               
Exhibit X - Termination  of  GMPTS's  Rights  Under  Cash  Tender               
Exhibit Y - Resignation  of Board  and  Committee  Seats                        
Exhibit Z-1 - Assets  and  Direct Liabilities of NewCo                          
Exhibit Z-2 - Assets and Direct  Liabilities  of NewCo Two                      
Exhibit AA - Approved Press Release                                             

 SCHEDULES

Schedule 3.1(a) - Partners, Partnership Documents, and Percentage Interests for 
the Exchange Owning Entities                

Schedule 3.1(e) - Agreements Extending Income Tax Assessment or Collection      
          Periods and Income Tax Audit or Certiorari Proceedings

Schedule 3.1(i) - List of Security Deposits                                     

Schedule 3.1(k) - Certain Tenant/Anchor Bankruptcies                            

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Schedule 3.1(l) - Required Licenses Not Yet Issued and Violations of Issued     
Licenses                                    

Schedule 3.1(m) - Casualty and Liability Insurance Policies                     

Schedule 3.1(n) - Litigation                                                    

Schedule 3.1(o) - Collective  Bargaining   Agreements,   Union   Contracts,  and
                  Severance  or  Termination  Pay  Liabilities  of  the Exchange
Owning Entities                             

Schedule 3.1(p) - Building Code and Zoning violations                           

Schedule 3.1(q) - Ground Lease Documents                                        

Schedule 3.1(r) - List of Loan Documents                                        

Schedule 3.1(s) - List of Anchor Documents                                      

Schedule 3.1(t) - List of Service Contracts                                     

Schedule 3.1(u) - Notices of Defaults Sent or Received With Respect to Anchor   
             Documents, Partnership Documents, Loan Document or Ground
Leases                                      

Schedule 3.1(v) - Notices of Default Received under Service Contracts           

Schedule 3.1(w) - Required Conditions to be Satisfied                           

Schedule 3.1(x) - Violations of Environmental Law and Environmental Remediation 

Schedule 6.2(s) - Form of Amended and Restated Partnership Agreement for the    
Wholly-Owned Exchange Entities              

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SEPARATION AND RELATIVE VALUE ADJUSTMENT AGREEMENT

      This Separation and Relative Value Adjustment Agreement (this "Agreement")
is entered into this 17th day of August,  1998, between The Taubman Realty Group
Limited Partnership, a Delaware limited partnership having an office at 200 East
Long Lake Road, Suite 300, Bloomfield Hills, Michigan 48304 (the "Company"), and
GMPTS Limited  Partnership,  a Delaware limited  partnership having an office at
c/o AEW Capital Management LP, 225 Franklin Street, Boston,  Massachusetts 02110
("GMPTS"), based upon the following:                                            

      A.  GMPTS is a partner  in the  Company,  and the  Company  and GMPTS have
decided to redeem GMPTS's entire partnership interest in the Company, all on the
terms and subject to the conditions set forth herein.                           

      B. The Company  and GMPTS,  with the  assistance  of Morgan  Stanley  Dean
Witter, have selected certain properties, assets, and liabilities of the Company
to be  transferred  to GMPTS to  effectuate  such  redemption.  The  Partnership
Committee has received a fairness  opinion from Morgan  Stanley Dean Witter with
respect  to the  fairness  to the  remaining  partners  in  the  Company  from a
financial point of view, as of the date of such opinion, of such redemption.    

      C. In furtherance of the foregoing,  (a) the Company will prior to Closing
(as defined  below)  contribute,  to a newly-  formed,  single  member  Delaware
limited  liability company  ("NewCo"),  the Company's  partnership  interests in
those  entities  described  on Exhibit A attached  hereto and hereby made a part
hereof that own or lease the properties (the "Exchange Properties") described on
Exhibit A and (b) the Company will prior to Closing cause to be  distributed  to
the Company and thereafter contributed to a newly-formed, single member Delaware
limited  liability  company  ("NewCo  Two")  the  partnership  interests  in the
Exchange Owning  Entities (as defined below) owned by the TRG Trusts  identified
on Exhibit A, and such                                                          

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contributions will be made subject to and with the assumption by NewCo and NewCo
Two of the debt,  obligations,  and  liabilities  with  respect to the  Exchange
Properties,  including the  obligations  with respect to debt secured by some of
the Exchange  Properties and the Company's  obligations  with respect to certain
other debt to be assumed by NewCo, as such debt is more  particularly  set forth
on Exhibit B, in exchange for 100% of the issued  membership  interests of NewCo
and NewCo Two.  After  such  contributions  to NewCo and NewCo Two,  each of the
Exchange  Owning  Entities  will  continue  to own all of the real and  personal
property it owned  immediately  prior to such  contributions,  including all fee
owned property (i.e.,  each fee Exchange  Property),  ground leasehold  estates,
space  leases,   department  store  leases,   reciprocal  easement   agreements,
supplemental agreements, service and maintenance contracts, fixtures, equipment,
vehicles,   supplies,   rights,  claims,  and  any  other  assets,  tangible  or
intangible,  owned by each  Exchange  Owning  Entity  immediately  prior to such
contributions,  if any, except for the Excluded Assets,  which the Company shall
have the right to transfer  out of the Exchange  Owning  Entities at or prior to
Closing;  provided,  however,  if separate filings or applications are needed to
cause any  trademarks,  logos, or names to remain vested in each Exchange Owning
Entity after such  contributions,  the Company shall  reasonably  cooperate with
GMPTS in making such  filings and  applications  and  causing  such  trademarks,
logos, and names to be so vested.                                               

      NOW,  THEREFORE,  in consideration of the promises and covenants contained
in this Agreement,  and other good and valuable  consideration,  the receipt and
sufficiency  of which the  parties  hereby  acknowledge,  the Company and GMPTS,
intending to be legally bound, hereby agree as follows:                         

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 ARTICLE 1 - DEFINED TERMS

      1.1  Defined  Terms.  As used  herein the  following  terms shall have the
following meanings:                                                             

"Adjustment Amounts" has the meaning provided in Section 3.3(a).    

      "Affiliate"  of  any  specified  individual  or  entity  means  any  other
individual or entity  directly or indirectly  controlling  or controlled  by, or
under direct or indirect  common  control  with,  such  specified  individual or
entity.  An Affiliate of an individual or entity includes,  without  limitation,
(i) any officer or director of such individual or entity, and (ii) any record or
beneficial  owner of more than 10% of any class of  ownership  interests of such
individual  or  entity.  For  purposes  of  this  definition  "control"  of  any
individual  or entity means the power to direct the  management  and policies of
such individual or entity, directly or indirectly, whether through the ownership
of ownership  interests,  by contract or otherwise,  and the terms "controlling"
and "controlled" have meanings correlative to the foregoing.                    

      "Agreement" has the meaning provided in the introductory paragraph hereof.

"Anchor Documents" has the meaning provided in Section 3.1(s).      

      "Anchor  Party" means a party to an Anchor  Document  other than an Owning
Entity.                                                                         

      "Applicable GMPTS Notice Date" has the meaning provided in Section 3.3(b).

"Approved Press Release" has the meaning provided in Section 9.3.1. 

      "Assignment  of Membership  Interest" has the meaning  provided in Section
6.2(a).                                                                         

      "Assumed  Bridge  Loan"  means  that  certain  loan to be in the  original
principal  amount of  approximately  $894,000,000  and to be made by UBS AG, New
York Branch,  (or one or more other lenders acceptable to the Company and GMPTS)
to NewCo and NewCo Two or the Company  which will be  assumable  by NewCo and/or
NewCo Two,  pursuant to a commitment  issued by UBS AG. The parties  acknowledge
that the Company will negotiate the Assumed Bridge Loan,  which will have a term
of twelve (12) months. If the Assumed                                           

3   

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Bridge Loan is  accelerated  and  declared due by the lender prior to the stated
maturity  date  solely by reason of a  material  breach of a  representation  or
warranty with respect to the Exchange  Properties  set forth in the initial loan
documents for the Assumed  Bridge Loan (and any subsequent  representations  and
warranties   set  forth  in  any   amendment   thereto,   to  the  extent   such
representations  are the same as those set forth in such initial loan documents,
and only if the term of the loan which is the subject of such  amendment ends on
or before the term of the  initial  Assumed  Bridge  Loan),  the  Company  shall
indemnify and hold harmless GMPTS from any damages or costs suffered as a result
of GMPTS having to obtain a replacement loan.                                   

"Blue Sky Laws" has the meaning provided in Section 3.1(cc).        

      "Business  Day" means any day that is not a Saturday,  a Sunday,  or other
day on which banks are  required or  authorized  to be closed in the City of New
York.                                                                           

"CalPERS" means The California Public Employees' Retirement System. 

"Cash Tender" has the meaning provided in Section 8.1(a).           

  "Certificate of Amendment" has the meaning provided in Section 6.2(b).

"Claim" has the meaning provided in Section 11.4.                   

"Closing " has the meaning provided in Section 6.1.                 

"Closing Date" has the meaning provided in Section 6.1.             

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

    "Company" has the meaning provided in the introductory paragraph hereof.

"Company Parties" has the meaning provided in Section 11.2.         

 "Confidential Information" has the meaning provided in Section 9.1.1.

"Contested Matter" has the meaning provided in Section 3.10.        

"Defeasance" has the meaning provided in Section 7.1(c).            

"Due Diligence" has the meaning provided in Section 3.2.            

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"Encumbrances" has the meaning provided in Section 2.2.             

      "Environmental  Law" means any Law relating to pollution or  protection of
the  environment,  health,  safety  or  natural  resources,  including,  without
limitation,  those  relating to the use,  handling,  transportation,  treatment,
storage, disposal, release or discharge of Hazardous Materials.                 

      "Estimated  Deferred  Maintenance  and  Repair  Costs"  means  the cost of
repairs,   replacements,   or  improvements  to  the  Portfolio  Properties,  as
reasonably  estimated  by Merritt and Harris (or by the New Engineer in the case
where the New Engineering  Reports are being used under Section 3.3),  which are
(1) described as  "required"  in the Merritt and Harris  Reports (or in the case
where the New  Engineering  Reports are being  used,  as  described  as the most
imminently   required  work  in  the  New  Engineering   Reports)  and  are  not
contemplated  by the most  recent  budget  for the  Property,  to the extent not
anticipated  to be charged to tenants of the  Property  in  accordance  with the
presently existing terms of applicable leases with such tenants, (2) required or
needed to be made as a result of an uninsured  casualty existing on the Relative
Valuation  Date  (including  the  amount  of  the  deductible  for  any  insured
casualty),  or (3) are required  under  applicable  Law to be made by the Owning
Entity on or before the date hereof to correct violations of Law at the Property
which exist on the Relative  Valuation Date and are not contemplated by the most
recent budget for the Property,  to the extent not  anticipated to be charged to
tenants of the Property.                                                        

"Exchange Act" has the meaning provided in Section 3.1(cc).         

"Exchange Debt" has the meaning provided in Section 2.3.            

      "Exchange  Owning  Entities"  means the Owning  Entities  of the  Exchange
Properties, as are described on Exhibit A attached hereto.                      

      "Exchange  Partnership  Documents"  has the  meaning  provided  in Section
3.1(a).                                                                         

"Exchange Properties" has the meaning provided in Recital C hereof. 

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      "Exchange Units" means the 50,025,713 units of partnership interest in the
Company of which GMPTS is the record and beneficial  owner and which  constitute
all of the units of partnership interest owned by GMPTS.                        

      "Excluded  Assets" means the property,  claims,  and assets  identified on
Exhibit C attached hereto.                                                      

"Expiration Date" has the meaning provided in Section 3.10.         

"GAAP" means generally accepted accounting principles.              

      "GMPTS" has the meaning provided in the introductory paragraph hereof, and
shall include an assignee of GMPTS permitted under Section 12.2 hereof.         

"GMPTS Parties" has the meaning provided in Section 11.1.           

"Ground Leases" has the meaning provided in Section 3.1(q).         

      "Hazardous   Materials"  means  (a)  petroleum  and  petroleum   products,
by-products or breakdown products,  radioactive  materials,  asbestos-containing
materials and polychlorinated  biphenyls and (b) any other chemicals,  materials
or substances regulated as toxic or hazardous or as a pollutant,  contaminant or
hazardous waste under any applicable Environmental Law.                         

      "hereof," "herein," and "hereunder" and words of similar import shall mean
this  Agreement  as a  whole  and  not  any  particular  section,  paragraph  of
subdivision thereof.                                                            

"HSR Act" has the meaning provided in Section 3.1(cc).              

"including" means including, without limitation.                    

"Indemnified Party" has the meaning provided in Section 11.3.       

      "Law" means any federal,  state, local or foreign statute, law, ordinance,
regulation,  rule,  code,  order,  judgement  or  decree,  and any  judicial  or
administrative interpretation thereof, and any other requirement or rule of law,
including any amendment thereto or modification thereof.                        

"Leases" has the meaning provided in Section 3.1(h).                

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"Litigation" has the meaning provided in Section 3.1(n).            

"Loan Documents" has the meaning provided in Section 3.1(r).        

      "Manager"  means The  Taubman  Company  Limited  Partnership,  a  Delaware
limited partnership.                                                            

      "Membership  Interests" means the NewCo Membership Interests and the NewCo
Two Membership Interests.                                                       

      "Merritt and Harris Reports" means the physical inspection and engineering
reports  ordered by the Company on July 16, 1998,  to be prepared by Merritt and
Harris in connection with the Transaction.  At the request of either party after
the  preparation  of the final  Merritt and Harris  Reports,  the parties  shall
attach to this Agreement a schedule  identifying  the Merritt and Harris Reports
by name, date, and job number.                                                  

"NewCo" has the meaning provided in Recital C.                      

 "NewCo Membership Interests" has the meaning provided in Section 2.1.

"NewCo Two" has the meaning provided in Recital C.                  

     "NewCo Two Membership Interests" has the meaning provided in Section 2.1.

"New Engineer" has the meaning provided in Section 3.2(d).          

      "New  Engineering  Reports"  means any physical  inspection or engineering
reports  issued by the New  Engineer  with respect to the  Portfolio  Properties
pursuant to Section 3.2(d).                                                     

      "New Environmental Consultant" has the meaning provided in Section 3.2(c).

      "New Environmental  Reports" means any environmental reports issued by the
New Environmental  Consultant with respect to the Portfolio  Properties pursuant
to Section 3.2(c).                                                              

"NYSE" means the New York Stock Exchange.                           

"Obligated Party" has the meaning provided in Section 11.3.         

      "Owning  Entities" means the partnerships or other entities which directly
own the real estate interests indirectly held by the Company.                   

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      "Partnership  Agreement"  means the  partnership  agreement of the Company
existing on the date hereof.                                                    

      "Percentage  Interest"  means,  with respect to GMPTS,  37.2464% and, with
respect to the Company, 62.7536%.                                               

      "Permitted Exceptions" means the following with respect to the Properties:
(a) building and use  restrictions  and zoning and building  ordinances,  codes,
regulations,  and resolutions and governmental land use regulations provided the
same do not prevent the present use of the  Property as a shopping  center,  (b)
mortgages,  deeds of trust,  liens,  security interests,  negative pledges,  and
other  charges and  encumbrances  in favor of any lender and given in connection
with (i) with respect to the Exchange  Properties,  the Assumed Bridge Loan, the
Released Debt and any other  indebtedness  set forth on Exhibit B hereto that is
assumed by GMPTS  hereunder or to which the Properties may be subject at Closing
as  provided  herein,  and (ii) with  respect to the  Retained  Properties,  any
indebtedness described in the Company's most recent regularly prepared financial
statements, (c) the lien of real estate taxes, assessments,  and water and sewer
charges not  delinquent as of the date of this  Agreement or which are disclosed
on Exhibit D and are being contested in good faith, (d) any exceptions the Title
Company would agree to insure over,  without any additional cost or liability to
either party, except for any payment,  bonding,  indemnity,  or other obligation
which may be agreed to by the party who will not  indirectly or directly own the
Property after Closing, in such party's sole discretion, provided such insurance
is satisfactory to the other party in its reasonable discretion, (e) inchoate or
recorded mechanic's, construction, and materialmen liens which the Owning Entity
(1) does not have the financial  responsibility to remove or discharge or (2) is
not likely to have the financial responsibility to remove or discharge because a
financially  responsible  third  party  has  the  responsibility  to  remove  or
discharge,  (f) the Anchor  Documents,  (g) any other  department  store leases,
reciprocal easement                                                             

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agreements, or operating agreements,  (h) the rights of tenants under the Leases
as tenants only and any other leases  entered into pursuant to the terms hereof,
(i)  customary  easements  or  rights  for  access  to  and  construction,  use,
maintenance,  or repair of utility lines,  wires,  terminal boxes, mains, pipes,
cables, conduits, poles and other equipment and facilities on, under, and across
the Properties,  (j) standard printed  exclusions from coverage contained in the
form of the title insurance  policy issued by the Title Company,  (k) any matter
that is the  responsibility of any department store party,  including any Anchor
Party,  any  tenant,  or any  subtenant  (other  than an  Owning  Entity)  of an
Property,  (l) the Ground Leases,  (m) utility contracts or agreements,  and (n)
any other agreements,  restrictions, liens, or encumbrances which would not have
a material adverse effect on a Property.                                        

      "Portfolio  Properties"  means the  Exchange  Properties  and the Retained
Properties.                                                                     

"Press Release" has the meaning provided in Section 9.3.1.          

"Property" means any one of the Portfolio Properties.               

      "Property  Management  Agreement"  has the  meaning  provided  in  Section
6.2(j).                                                                         

"Regulatory Filings" has the meaning provided in Section 3.1(cc).   

"Property Representations" has the meaning provided in Section 3.1. 

"Relative Representations" has the meaning provided in Section 3.1. 

      "Relative  Valuation  Date" means August 3, 1998,  being the date on which
the parties  agreed upon the  relative  valuation of the  Company's  properties,
assets, and liabilities.                                                        

      "Relative  Value"  means,  with  respect to any  Portfolio  Property,  the
relative  value agreed to by the parties for that Property when they  determined
the relative value of all of the Portfolio Properties.                          

"Released Claims" has the meaning provided in Section 11.8.         

      "Retained  Bridge  Loan"  means that  certain  loan to be in the  original
principal  amount of  approximately  $430,000,000  (depending  on the  amount of
senior unsecured notes                                                          

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tendered)  and to be made by UBS AG, New York Bank (or one or more other lenders
acceptable to the Company), to the Company.                                     

      "Retained  Properties" means the properties and assets owned,  directly or
indirectly, by the Company, other than the Exchange Properties.                 

"Securities Act" has the meaning provided in Section 3.1(cc).       

"Service Contracts" has the meaning provided in Section 3.1(t).     

      "Surveys"  means the updated  surveys of all or certain of the  Properties
obtained by the Company in connection with the Transaction.                     

      "Tax Return" means any return,  declaration,  report,  estimate, claim for
refund, or information  return or statement relating to, or required to be filed
in connection with, any Taxes, including any schedule or attachment thereto, and
any amendment thereof.                                                          

      "Taxes"  means any and all  taxes,  however  denominated,  imposed  by any
federal,  state,  local  or  foreign  government,  or any  agency  or  political
subdivision  thereof,  including without limitation,  net income,  gross income,
gross receipts, license, payroll,  employment- relief, excise, severance, stamp,
occupancy, premium, windfall profits,  environmental,  customs or import duties,
capital,  franchise,  profits,   withholding,   social  security  (or  similar),
unemployment,  disability,  worker's compensation taxes, real property, personal
property,  sales,  use,  transfer,   registration,   value  added,  ad  valorem,
estimated,  or any other tax of any kind  whatsoever,  including  any  interest,
penalty,  addition to tax, other charge,  or additional  amounts  imposed by any
taxing authority, whether disputed or not.                                      

"Tenancies" has the meaning provided in Section 3.1(h).             

"Tender Offer" has the meaning provided in Section 7.1(c).          

      "Title  Company"  means  Flagler  Title  Company,  1897 Palm  Beach  Lakes
Boulevard, Suite 125, West Palm Beach, Florida, 33409.                          

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      "Title Insurance Commitments" means the title insurance commitments issued
by the Title Company in connection with the  Transaction  with respect to all or
certain of the Properties.                                                      

"Transaction" has the meaning provided in Section 6.1.              

      "Versar Reports" means the environmental reports ordered by the Company on
July  13,  1998,  to be  prepared  by  Versar,  Inc.,  in  connection  with  the
Transaction.  At the request of either party after the  preparation of the final
Versar  Reports,   the  parties  shall  attach  to  this  Agreement  a  schedule
identifying the Versar Reports by name, date, and job number.                   

      "Wholly-Owned Exchange Entities" means all of the Exchange Owning Entities
except Woodfield Associates. "Woodfield Management Agreement" means that certain
Management  Agreement,  dated March 31, 1989,  between the Manager and Woodfield
Associates,  as amended by Amendment to  Management  Agreement,  dated March 31,
1989,  between the Manager and Woodfield  Associates.  1.2 Use of Certain Terms.
(a) Any  defined  term used in the  plural  shall  refer to all  members  of the
relevant  class in the defined term,  and any defined terms used in the singular
shall refer to any one of the members of the relevant class in the defined term.
The plural  shall  include the  singular  and vice versa.  All  pronouns and any
variations  thereof  shall be deemed  to refer to the  masculine,  feminine,  or
neuter,  as the identity of the person or entity may require.  When used in this
Agreement,  "or" is not exclusive.  (b) All Schedules and Exhibits  described or
referenced herein are hereby  incorporated by this reference into this Agreement
as if fully set forth  herein.  (c) Any  reference  herein to a Section  means a
Section of this  Agreement.  1.3  Accounting  Terms.  All  accounting  terms not
specifically  defined in this Agreement  shall be construed in conformity  with,
and all financial data required by this                                         

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Agreement to be submitted shall,  unless otherwise expressly stated, be prepared
in  conformity  with  generally  accepted  accounting  principles,  applied on a
consistent basis.                                                               

ARTICLE 2 - REDEMPTION

      2.1 Transfer and Redemption of Units. At the Closing, GMPTS shall transfer
the  Exchange  Units to the Company,  and the Company  shall redeem the Exchange
Units from GMPTS,  in exchange for 100% of the membership  interests (the "NewCo
Membership Interests") in NewCo and 100% of the membership interests (the "NewCo
Two Membership Interests") in NewCo Two.                                        

      2.2 Delivery of the Exchange Units. At the Closing,  GMPTS will deliver to
the Company  Certificate Nos. 31 and 35 evidencing the Exchange Units,  together
with a  duly  executed  assignment  separate  from  certificate,  assigning  and
transferring  to the  Company  all  right,  title,  and  interest  in and to the
Exchange Units, free and clear of any security  interests,  pledges,  mortgages,
liens,  claims,   encumbrances,   charges  or  rights  of  others  of  any  kind
(collectively,  "Encumbrances").  The  parties  acknowledge  that the  foregoing
Certificate  Nos.  31  and  35  evidenced  22,333.019  and  2,995.435  units  of
partnership  interest in the Company prior to the  Company's  split of its units
effective  September  30,  1997,  and that such  certificates  are now deemed to
evidence,  in the aggregate,  50,025,713  units of  partnership  interest in the
Company as a result of such split.  Concurrently  with GMPTS's delivery of title
to the Exchange Units to the Company in the condition  required  hereunder,  the
Company will deliver all  certificates,  if any, and duly  executed  assignments
separate  from such  certificates  necessary to assign and transfer to GMPTS all
right,  title, and interest in and to NewCo and NewCo Two, free and clear of any
Encumbrances,  to GMPTS, and NewCo and NewCo Two will assume,  for the Company's
benefit, the liabilities set forth on Exhibit B hereto.                         

      2.3 Exchange Debt.  Prior to the Closing,  GMPTS shall use its good faith,
commercially   reasonable   efforts  to  cause  the  Company  to  be  fully  and
unconditionally  released from any and all liabilities and obligations  relating
to or arising out of the indebtedness                                           

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described on Exhibit B attached  hereto (the "Exchange  Debt").  Such reasonable
efforts shall  include  causing to be delivered to a lender of any Exchange Debt
assumptions,  guaranties,  or  similar  assurances  by NewCo  and/or  GMPTS with
respect to the Exchange Debt, if reasonably  requested by any such lender.  If a
lender of any Exchange  Debt does not release the Company  fully and  completely
with  respect  thereto  (including  as a  result  of any  such  lender  imposing
unreasonable obligations on GMPTS, NewCo and/or NewCo Two), then NewCo and GMPTS
shall, jointly and severally,  indemnify,  defend, and hold harmless the Company
from and against any  obligations  or  liabilities  with respect to the Exchange
Debt.                                                                           

 ARTICLE 3 - PROPERTY REPRESENTATIONS AND WARRANTIES

      3.1 The Company's Property Representations and Warranties.  Subject to the
terms and  conditions of this Article 3, the Company  represents and warrants to
GMPTS as follows as of the Relative Valuation Date:                             

      (a) Schedule 3.1(a) describes each Exchange Owning Entity and all partners
therein and their respective  percentage interest.  The partners of the Exchange
Owning  Entities  are the  record  and  beneficial  owners  of their  respective
partnership  interests in each  Exchange  Owning Entity as set forth on Schedule
3.1(a) in accordance with the  percentages  specified in Schedule 3.1(a) (except
no  representation  is made as to the beneficial owner of CalPERS's  partnership
interest in Woodfield  Associates) and with respect to the Company's interest in
the  Wholly-Owned  Exchange  Entities  and the  Company's  interest in Woodfield
Associates, such partners hold their partnership interests (and at Closing NewCo
and NewCo Two will hold such  partnership  interests)  free and clear of any and
all security interests, liens, pledges, hypothecations,  or encumbrances whether
recorded,  perfected, choate or inchoate, actual or contingent, except as may be
provided for in the partnership  agreements and amendments  thereto described on
Schedule  3.1(a)  (the  "Exchange  Partnership  Documents")  and the amended and
restated partnership agreements for the Wholly-Owned Exchange Entities described
in Section 6.2(s). With respect to Wholly-Owned Exchange Entities, no person,   

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firm, or entity, other than the ones identified on Schedule 3.1(a), (1) owns any
partnership interest in any Wholly-Owned  Exchange Entity or any right or option
(or any  right of first  refusal  with  respect  to) to  acquire  a  partnership
interest in any Wholly-Owned Exchange Entity or (b) has the right to receive any
capital, profits, or distributions of any Wholly-Owned Exchange Entity as to any
equity  interest  therein.  With respect to the Company's  interest in Woodfield
Associates,  except  as  provided  in the  partnership  agreement  of  Woodfield
Associates,  no  person,  firm or entity (i) owns any  portion of the  Company's
partnership  interest  in  Woodfield  Associates  or any right or option (or any
right of first refusal with respect to) to acquire any such partnership interest
or (ii) has the right to receive any capital,  profits,  or  distributions  with
respect to such partnership  interest.  True and complete copies of the Exchange
Partnership  Documents,  as amended to date,  have been delivered to GMPTS,  and
true and complete copies of the amended and restated partnership  agreements for
the  Wholly-  Owned  Exchange  Entities  described  in  Section  6.2(s)  will be
delivered to GMPTS at Closing.  Upon the Company's delivery of all right, title,
and interest in and to the Membership  Interests to GMPTS, GMPTS shall have good
and marketable title to the Membership Interests.                               

      (b) Each Exchange  Owning Entity owns its assets  described on the balance
sheets  referenced in paragraph 3.1(f) and has not engaged in any business other
than owning,  leasing,  managing, and operating its respective Exchange Property
and related  property and assets.  Each Exchange Owning Entity is duly qualified
to do business in each  jurisdiction  in which the  ownership of its property or
the conduct of its business requires such qualification.                        

      (c) At Closing, no Exchange Owning Entity will have any accrued and unpaid
obligation  to make  payments of any kind to or on behalf of any partners or any
beneficial  owner of any partner except for any  obligation  under the Woodfield
Exchange  Partnership  Documents which has accrued, but is not yet due as of the
Closing Date.                                                                   

      (d)  The  partnership  interests  of the  partners  in  each  Wholly-Owned
Exchange  Entity have not been  registered or qualified under the Securities Act
of 1933, as amended, or under                                                   

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the  securities  laws of the state  where the  respective  Exchange  Property is
located or any other state. The partnership interest of the Company in Woodfield
Associates  has not been  registered or qualified  under the  Securities  Act of
1933, as amended,  or under the securities laws of the state where such Exchange
Property is located or any other state.                                         

      (e) All  federal,  state and  local Tax  Returns  (including  Tax  Returns
concerning "gross receipts and business use and occupancy") required to be filed
by each Exchange Owning Entity,  including Tax Returns required to be filed with
regard to its Exchange  Property,  have been timely  (taking into account  valid
extensions)  filed,  and all Taxes whether or not due and owing by each Exchange
Owning Entity,  including in connection  with the ownership and operation of its
Exchange  Property,  have been paid in full or  properly  accrued on the balance
sheets  delivered to GMPTS. No written claim has been received by the Company or
any  Exchange  Owning  Entity  from any  authority  in a  jurisdiction  where an
Exchange  Owning Entity does not file Tax Returns that it is, or may be, subject
to taxation by that jurisdiction. Except as set forth on Schedule 3.1(e), (1) no
Exchange  Owning  Entity is a party to any  agreement  extending  the period for
assessment  or  collection  of any Tax and (2) no tax  audit  or tax  certiorari
proceedings are currently  pending or to the Company's  knowledge  threatened in
writing to be brought with respect to any Exchange Owning Entity or its Exchange
Property.                                                                       

In addition:                                                                    

            (i)   Other than with respect to real estate taxes and  assessments,
                  there  are  no  outstanding  deficiencies  or  assessments  or
                  written  proposals  received by the Company for  assessment of
                  any Taxes proposed,  asserted or assessed against any Exchange
Owning Entity.                              

            (ii)  None  of  the  Exchange  Owning  Entities  is a  party  to any
                  outstanding  tax sharing or other  allocation  agreement  with
                  respect to Taxes  except to the extent  imposed by the laws of
any state.                                  

            (iii) Each of the Exchange Owning Entities has withheld and paid all
                  Taxes  required to be  withheld  and paid in  connection  with
                  amounts  paid or  owing  any  employee,  partner,  independent
contractor, creditor or other third party.  

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            (iv)  None of the Exchange  Owning  Entities is a corporation  or an
                  association  taxable as a corporation  for federal  income tax
purposes.                                   

            (v)   Not later than  September 30, 1998,  the Company shall deliver
                  to GMPTS a schedule  setting  forth,  to the  knowledge of the
                  Company, the adjusted tax basis of each Exchange Owning Entity
                  in its assets as of December  31, 1997 and a schedule  setting
                  forth  those  Exchange   Owning   Entities  with  Section  754
elections in effect as of the date hereof.  

           (vi)   None  of the  Exchange  Owning  Entities has agreed to, or has
                  been  required  to, make any Section 481(a) adjustment because
                  of  a  change  in  accounting  method.  There  are no  closing
                  agreements,   irrevocable    elections  or   similar   binding
                  agreements  which  will  restrict  the  choice of any Exchange
                  Owning  Entity  or their  respective  partners  regarding  the
                  treatment  of any  item  of  income,  deduction,   credit   or
                  allowance  for federal  income tax purposes in taxable periods
subsequent to the Closing Date.             

            (vii) The  Company  has  delivered,  or  will  deliver  as  soon  as
                  practicable,  to GMPTS  complete  copies of all Tax Returns of
                  each  Exchange  Owning  Entity filed for periods  ending on or
after December 31, 1994.                    

           (viii) No Exchange  Owning  Entity owns any interest in excess of 50%
                 in any corporation, limited liability company or partnership.

            (ix)  With respect to this  paragraph (e), GMPTS shall have no right
                  to make a claim against the Company for any breach  thereof to
                  the  extent  that  any  costs,  expenses,  or  Taxes  due  are
                  reimbursable  by  tenants or Anchor  Parties  at the  Exchange
Properties.                                 

      (f) The unaudited balance sheets and statements of income,  changes in the
equity,  and cash flow as of and for the fiscal  periods ended December 31, 1997
and June 30, 1998  delivered to GMPTS for each Owning  Entity have been prepared
in accordance with GAAP,  present fairly the financial  condition and results of
operations of the Owning Entity,  and have been prepared on a consistent  period
by period basis.                                                                

      (g)  Each  Exchange  Owning  Entity  is a duly  formed,  validly  existing
partnership for local partnership law purposes.                                 

      (h) (1) Each rent roll (individually,  a "Rent Roll" and collectively, the
"Rent  Rolls")  dated July 31, 1998 and  delivered by the Company to GMPTS under
separate  cover of even date  herewith is, when taken as a whole with respect to
each Exchange Property,                                                         

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true,  accurate,  and correct with respect to all leases and all other non-lease
tenancies (all such tenancies,  collectively,  the  "Tenancies")  affecting each
Exchange  Property  as of the date of such  Rent  Roll and  shown  thereon,  and
contain the following  information with respect to each Tenant:  (i) the name of
the Tenant;  (ii) the space which such Tenant  occupies;  (iii) the  approximate
square  footage  of such  space;  (iv) the  lease  commencement  date and  lease
termination date; (v) the step date; (vi) the minimum annual rent; and (vii) the
breakpoint amount and rate; (2) attached to the above-referenced  separate cover
of even date herewith is a true, correct and complete list of all leases and all
amendments,  modifications,  renewals and extensions thereof (collectively,  the
"Leases"),  true,  correct  and  complete  copies of which  have been or will be
delivered to GMPTS on or prior to Closing,  reasonably  promptly upon request by
GMPTS;  (3) no  Lease  contains,  nor  does  any  Tenant,  nor to the  Company's
knowledge any other party, have a purchase option or any right of first offer or
first  refusal to purchase (or any other  similar right to acquire any ownership
interest, as distinguished from rights to lease additional space in any Exchange
Property) with respect to any Exchange  Property or any portion thereof,  except
as may be set forth in an Anchor  Document  with  respect  to an Anchor  Party's
leased premises.                                                                

      (i) Schedule 3.1(i) sets forth a list of all security  deposits  currently
being held  pursuant to the Leases by each  Exchange  Owning Entity and all such
security  deposits are held in  accordance  with  applicable  Law. No Tenant has
asserted any claim  (other than for a customary  refund at the  expiration  of a
Lease)  to all or any part of such  security  deposits  and no  Exchange  Owning
Entity has applied any portion of any such  security  deposits to the payment of
any sums due from any Tenant under a Lease.                                     

      (j) None of the Leases and none of the rents,  security  deposits or other
amounts payable thereunder have been assigned, pledged, or encumbered other than
as provided in the Loan Documents.                                              

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      (k) Except as set forth on Schedule 3.1(k),  no Exchange Owning Entity has
received  written  notice  of  any  filing  of  a  bankruptcy,   reorganization,
insolvency,  or  similar  proceeding  by any  Tenant  leasing in excess of 2,500
square feet of space.                                                           

      (l) Except as set forth on Schedule  3.1(l),  to the Company's  knowledge,
each  Exchange  Owning  Entity has all of the  licenses  and permits  (including
certificates  of  occupancy)  necessary  for the ownership and operation of each
Exchange  Property by the Exchange Owning Entity (not any required by tenants or
Anchor Parties) as it is currently being operated and the same are in full force
and effect and no  Exchange  Owning  Entity has taken any action  that would (or
failed to take any action the omission of which would) result in the  revocation
of such  licenses  and permits and no Exchange  Owning  Entity has  received any
written notice of violation from any Governmental Authority or written notice of
an intention by any such  Governmental  Authority to revoke any  certificate  of
occupancy or other license issued by it in connection with the use and operation
of any  Exchange  Property,  that in each case has not been  cured or  otherwise
resolved to the satisfaction of such  Governmental  Authority.  To the Company's
knowledge,  the  Transaction  will not  result in or cause to be  terminated  or
cancelled any license or permit necessary for the ownership and operation of any
Exchange  Property,  as it is  currently  being  operated,  which  could  not be
replaced by GMPTS upon  delivery  of  customary  applications  and fees and upon
complying  with other  requirements  which are  generally  required  for similar
properties in the applicable jurisdiction.                                      

      (m) Schedule  3.1(m)  identifies  and  describes  all  insurance  policies
(excluding  title  insurance)  maintained  by the  Exchange  Owning  Entity with
respect to the Exchange  Properties.  Upon request by GMPTS,  the Company  shall
promptly deliver copies of such policies to GMPTS. Continually during its period
of  ownership,   each  Exchange  Owning  Entity  has  maintained   insurance  in
commercially  reasonable amounts with respect to the Exchange Properties and the
owner thereof.                                                                  

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      (n) Except for all items set forth on Schedule  3.1(n)  (such items herein
referred to collectively as the "Litigation"),  there is no lawsuit, litigation,
or arbitration  pending  against any Exchange  Owning Entity before any federal,
state, municipal, foreign, or other court or governmental or administrative body
or agency,  or any private  arbitration  tribunal for which any Exchange  Owning
Entity has a significant potential financial or legal exposure.  The description
of the Litigation  described on the letter dated July 13, 1998, from the Company
to its counsel is accurate in all material respects.                            

      (o) No  Exchange  Owning  Entity  is  bound by any  employment  agreement,
collective bargaining agreement,  union contract, or similar agreement except as
set forth on Schedule  3.1(o).  No Exchange Owning Entity or the Company has any
employees  that will remain at the  Exchange  Property and become an employee of
GMPTS after Closing.  Except as set forth on Schedule 3.1(o), no Exchange Owning
Entity is a party to, or bound by, any  agreement  that  contains  any  material
severance  or  termination  pay  liability  or  obligation,  including,  without
limitation, any "excess parachute payment," as defined in Section 280G(b) of the
Code.  No Exchange  Owning  Entity  maintains  or sponsors or has any  liability
(contingent or otherwise) for any contributions to any pension,  profit sharing,
thrift,   employee  stock  ownership  or  other  retirement  plan,  or  deferred
compensation, stock ownership, stock purchase, performance share, bonus or other
incentive  plan,  or severance  plan or other  pension or welfare  benefit plan,
agreement,  arrangement  or  understanding,  whether  or not such  plan is or is
intended to be qualified  under Section 401(a) of the Code,  including,  without
limitation,  any  employee  benefit  plan within the meaning of Section  3(3) of
ERISA and any "plan" within the meaning of Section 4975(e)(1) of the Code.      

      (p)  Except  as  set  forth  on  Schedule  3.1(p)  there  is no  judicial,
municipal,  or administrative action, suit,  arbitration,  or proceeding against
the Company,  an Exchange Owning Entity,  or an Exchange  Property,  or any part
thereof,  pending in any court or governmental  department,  commission,  board,
agency or instrumentality, of the United States                                 

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or any state,  county,  city or other  political  subdivision  (a  "Governmental
Authority"), alleging a material building code or zoning violation.             

      (q) Schedule 3.1(q) sets forth a true, correct,  and complete list of each
ground lease (and all amendments and modifications  thereto) creating the ground
leasehold  estates  owned by the Exchange  Owning  Entity  described on Schedule
3.1(q) (the "Ground Lease").                                                    
Each Ground Lease is in full force and effect.                                  

      (r) Schedule 3.1(r) sets forth a true, correct,  and complete  description
of each loan document  evidencing or containing  any terms and conditions of any
mortgage  loans  encumbering  the Exchange  Properties  (the "Loan  Documents").
Exhibit B sets forth the outstanding  principal  balance of each such loan as of
July 31, 1998.                                                                  

      (s) Except as identified on Schedule  3.1(s)  attached hereto (the "Anchor
Documents"), or included in the Leases or the Permitted Exceptions, there are no
written  agreements with any Anchor Party, or modifications of or supplements to
the Anchor  Documents,  which are binding on the Exchange Owning Entities or the
Exchange Properties.                                                            

      (t) Except for the Permitted  Exceptions and contracts or agreements which
may be  terminated  by the  Exchange  Owning  Entity on thirty (30) days or less
notice without penalty or premium, there are no service, supply, maintenance, or
utility  contracts  or  agreements  which  will be  binding  upon  the  Exchange
Properties or the Exchange  Owning  Entities and which will impose an obligation
on the  Exchange  Owning  Entities  after the Closing  other than the  contracts
listed on Schedule 3.1(t) attached hereto (the "Service Contracts"). None of the
Exchange Owning Entities has entered into any contracts or agreements which will
be binding on the  Exchange  Owning  Entity after  closing and which  require an
annual  payment by the Exchange  Owning Entity in excess of $50,000,  other than
the  Leases,   Anchor  Documents,   Ground  Leases,  Loan  Documents,   Exchange
Partnership Documents,  Permitted Exceptions,  Service Contracts,  the Woodfield
Management  Agreement,  and any contract or agreement which may be terminated on
thirty (30) days or less notice. Except for the existing                        

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management  agreements for the Exchange Properties (all of which, except for the
Woodfield  Management  Agreement,  will be terminated at closing),  there are no
contracts or agreements  between the Exchange Owning Entities and the Company or
any Affiliate  thereof which could not be terminated  without penalty or premium
upon the request of GMPTS.                                                      

      (u) Except as identified on Schedule  3.1(u) attached  hereto,  and except
for  defaults  cured on or before the date  hereof,  neither the Company nor any
Exchange  Owning  Entity has (i)  received  any  written  notice from any Anchor
Party,  CalPERS,  any lender under the Loan  Documents,  or any landlord under a
Ground  Lease  asserting  that the Exchange  Owning  Entity or the Company is in
default under such Lease, Anchor Document,  Exchange Partnership Documents, Loan
Documents,  or Ground Lease,  as the case may be, or (ii) sent to any such party
any written notice  asserting that such party is in default under such document.
No written  notice has been received by the Company or any Exchange Owing Entity
from any Anchor Party who is open and operating on the date hereof  stating that
such Anchor Party  intends to cease  operation  (other than  temporarily  due to
casualty, remodeling,  renovation, relocation, or similar causes) at an Exchange
Property.                                                                       

      (v) None of the Exchange  Owning  Entities has received any written notice
of default under any of the Service  Contracts  which remains  uncured except as
listed on Schedule 3.1(v) attached hereto.                                      

      (w) In  order to  transfer  the  Company's  partnership  interests  in the
Exchange  Owning  Entities  to NewCo and NewCo  Two and to  transfer  all of the
Membership  Interests therein to GMPTS without in and of itself causing (or with
the  giving of notice or lapse of time,  or both,  resulting  in) a breach of or
default under,  or triggering (or with the giving of notice or lapse of time, or
both,  triggering) any significant rights in a third party, including any rights
of first  offer or rights of first  refusal  under,  any of the  Leases,  Anchor
Documents,  Ground Leases, or the Loan Documents, the only conditions which must
be satisfied  or consents  received  are set forth on Schedule  3.1(w)  attached
hereto.                                                                         

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      (x) Except as described on Schedule  3.1(x),  there is no (i) violation of
Environmental  Law at a Property  for which the Owning  Entity or the Company is
liable,  or (ii)  condition  at a Property  which the Owning  Entity is required
under Environmental Law to remediate.                                           

      (y) The total  Estimated  Deferred  Maintenance  and Repair  Costs for the
Exchange  Properties  is equal  to  GMPTS's  Percentage  Interest  of the  total
Estimated Deferred Maintenance and Repair Costs for the Portfolio Properties.   

      (z) There is no  exception to title or title defect with respect to any of
the Properties which is not a Permitted Exception.                              

      (aa) The minimum rents for the Portfolio  Properties deemed to be in place
as of January 1, 1998,  which were used by the parties in the  determination  of
the Relative Value of the Portfolio  Properties  were based upon leases in place
and  modified  for  anticipated  new  leases  or  lease  terminations.  The 1998
forecasts  which  were  used  for  determining  the  Relative  Valuation  of the
Portfolio  Properties  were  determined  by the Company in  accordance  with the
method of preparing  previous mid-year  forecasts prepared by the Company in the
ordinary course of business,  and such forecasts were applied on a uniform basis
with respect to all of the Portfolio Properties.                                

      (bb) The transfers  contemplated by this Agreement by the Company will not
result in the Company  having assets  remaining in its hands after the transfers
that is an  unreasonably  small capital for the business in which it is engaged.
The  Company  does not intend or believe  that it will  incur  debts  beyond its
abilities to pay such debts as they mature.                                     

      (cc) Except as contemplated hereby,  neither the execution and delivery by
the Company hereof nor the  consummation by the Company of the Transaction  will
conflict  with or  result  in a  breach  of any  provisions  of the  Partnership
Agreement of the Company;  violate or conflict with any regulation,  rule, order
or  administrative  position  of  NYSE,  or any  other  United  States  national
securities  exchange on which any class of securities of Taubman Centers,  Inc.,
is listed; or require any consent, approval or authorization of, or declaration,

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filing or registration with, any Governmental Authority,  other than any filings
required under the Securities  Act of 1933, as amended (the  "Securities  Act"),
the  Securities  Exchange Act of 1934,  as amended  (the  "Exchange  Act"),  the
Hart-Scott-Rodino  Antitrust  Improvements  Act of 1976 (the "HSR  Act"),  state
securities laws ("Blue Sky Laws") (collectively,  the "Regulatory Filings"), the
Code and any filings required to be made with the Office of the Secretary of the
State of Michigan and NYSE or any other  national  securities  exchange on which
any class of securities of Taubman Centers,  Inc. is listed. The representations
and warranties set forth in paragraphs (a) through (w) above are herein referred
to as the "Property  Representations" and the representations and warranties set
forth in  paragraphs  (x)  through  (aa)  above are  herein  referred  to as the
"Relative Representations".                                                     

      3.2  Due  Diligence.   (a)  GMPTS  shall  conduct  whatever  examinations,
inspections,  testing, studies and/or investigations (herein collectively called
"Due Diligence") of the Exchange  Properties as GMPTS may desire.  If in GMPTS's
reasonable   determination,   GMPTS   believes   that   any  of   the   Property
Representations  or the  Relative  Representations  are  untrue in any  material
respect with respect to any one or more of the Exchange  Properties,  GMPTS may,
as  its  sole  and  exclusive  remedies,   (i)  in  the  case  of  the  Relative
Representations,  timely deliver to the Company the notice  described in Section
3.3 and may then  proceed  under  Section  3.3,  (ii) in the case of a  Property
Representation,  make a claim  under  Section  3.4,  and/or  (iii)  in the  case
described in clause (b) of Section 3.5,  proceed  under  Section 3.5.  Except as
expressly  provided in Section 3.5,  GMPTS shall not have any right to terminate
or rescind this  Agreement for any reason  whatsoever,  including as a result of
GMPTS's Due Diligence or the existence of any untrue Property Representations or
Relative  Representations,  it being understood and agreed that GMPTS's sole and
exclusive rights relating to such matters shall be to proceed under Section 3.3,
Section 3.4, Section 3.5, or Article 10.                                        

      (b) The Company has delivered or will deliver to GMPTS the Versar Reports,
the Merritt and Harris Reports, and the Title Commitments promptly after receipt
by the Company.                                                                 

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The  Company  shall  provide to GMPTS  copies of all  agreements,  work  orders,
correspondence,  and other  material  relating  to the  ordering  of the  Versar
Reports  and the  Merritt  and Harris  Reports,  including  all  drafts  thereof
received  by  the  Company.   GMPTS  shall  have  the  right  to  accompany  the
environmental and/or engineering consultant during its site visits.             

      (c) If either  party  believes in good faith that any or all of the Versar
Reports  were not  prepared in a fair and uniform  manner with respect to any or
all of the Portfolio  Properties,  such party shall have the right to cause both
parties  jointly  to  engage  an  environmental  consultant  to  perform  a  new
environmental assessment of all of the Portfolio Properties by sending a written
notice  requesting such action and its reasons therefor to the other party on or
before the date which is ten (10)  Business Days after (i) in the case of GMPTS,
receipt by GMPTS of all of the Versar  Reports for the Exchange  Properties  and
(ii) in the case of the  Company,  receipt  by the  Company of all of the Versar
Reports for the Retained  Properties.  Upon receipt of such notice,  the parties
shall in good  faith  attempt  to agree  upon the  environmental  consultant  to
perform  such new  assessment.  If the  parties do not so agree  within five (5)
Business Days of such notice, the parties shall direct Versar,  Inc. to select a
new environmental  consultant to perform such new assessment.  Any environmental
consultant  selected by Versar must have experience in investigating  properties
similar to the Portfolio  Properties.  The environmental  consultant selected in
accordance  with this paragraph (b) to perform the new assessment is hereinafter
referred  to  as  the  "New  Environmental  Consultant".  In  the  event  a  New
Environmental  Consultant is selected as provided above,  the New  Environmental
Report shall be used for purposes of this Article 3.                            

      (d) If either party believes in good faith that any or all the Merritt and
Harris  Reports were not  prepared in a fair and uniform  manner with respect to
any or all of the Portfolio Properties, such party shall have the right to cause
both parties  jointly to engage an engineer to perform a new  investigation  for
all of the Portfolio  Properties  by sending a written  notice  requesting  such
action and its reasons therefor to the other party on or before the date which  

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is ten (10)  Business  Days after (i) in the case of GMPTS,  receipt by GMPTS of
all of the Merritt and Harris  Reports for the Exchange  Properties  and (ii) in
the case of the Company, receipt by the Company of all of the Merritt and Harris
Reports for the Retained  Properties.  Upon receipt of such notice,  the parties
shall,  in good  faith,  attempt to agree  upon the  engineer  to  perform  such
investigation.  If the parties do not so agree within five (5) Business  Days of
such  notice,  the  parties  shall  direct  Merritt  and  Harris to select a new
engineer to perform such  investigation.  Any  engineer  selected by Merritt and
Harris must have experience in investigating properties similar to the Portfolio
Properties.  The engineer  selected in  accordance  with this  paragraph  (d) to
perform the  additional  investigation  is  hereinafter  referred to as the "New
Engineer."  In the event a New Engineer is selected as provided  above,  the New
Engineering Report shall be used for purposes of this Article 3.                

      3.3 Adjustment Amount for Untrue Relative  Representations.  (a) GMPTS and
the Company  have  entered into this  Agreement  based on the mutual  assumption
(without  investigation  with  respect to  paragraphs  (x),  (y), and (z) of the
Relative  Representations)  that the  Relative  Representations  are true in all
material respects.  If, however,  on or before the Applicable GMPTS Notice Date,
GMPTS identifies any fact or condition (such facts or conditions with respect to
paragraphs  (x) and (y) of the  Relative  Representations  being  limited to the
facts and  conditions  set forth in or reasonably  inferable from (a) the Versar
Reports or the New  Environmental  Reports  (if any)  and/or (b) the Merritt and
Harris  Reports or the New  Engineering  Reports  (if any)) which it believes in
good faith  results in any of the Relative  Representations  with respect to any
Exchange  Property  being untrue in any material  respect  (other than a fact or
condition  disclosed in any filings made by the Company with the  Securities and
Exchange  Commission  prior to the date hereof,  such facts and  conditions  the
parties agree having been taken into account by the parties in  determining  the
relative valuation of the Portfolio Properties), GMPTS shall have the right, one
time only with respect to each of the four Relative  Representations,  to notify
the Company in writing of all such                                              

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matters (which notice shall include  reasonable detail thereof) on or before the
Applicable  GMPTS Notice Date.  The Company shall have the right,  one time only
with respect to each of the four  Relative  Representations,  to notify GMPTS in
writing  within sixty (60) days after each  Applicable  GMPTS Notice Date (which
notice shall include  reasonable  detail thereof) of any fact or condition which
the   Company   believes  in  good  faith   results  in  any  of  the   Relative
Representations  with  respect to the  Retained  Properties  being untrue in any
material  respect (other than a fact or condition  disclosed in any filings made
by the Company with the  Securities  and Exchange  Commission  prior to the date
hereof).  Upon receipt of such notices,  the parties shall use their good faith,
commercially  reasonable  efforts  to agree  upon  whether  there are any untrue
Relative  Representations  described in such notices for each Portfolio Property
and the cost of correction as  established  herein  (without  having to actually
incur  the  cost of such  correction)  thereof  and any  reasonably  anticipated
liabilities  to third  parties  as a result  of such  facts  or  conditions.  No
adjustment shall be made for any alleged untrue Relative Representation which is
first asserted by either party after the respective  dates set forth above,  and
any such allegation shall be of no effect  hereunder.  If the parties are unable
to agree  upon  such  amounts  within  one  hundred  twenty  (120)  days of each
Applicable GMPTS Notice Date, (i) with respect to paragraphs (z) and (aa) of the
Relative  Representations  either  party  shall have the right to  resolve  such
dispute by submitting the dispute to binding  arbitration in accordance with the
then-prevailing  rules  of  the  American  Arbitration  Association  sitting  in
Detroit,  Michigan,  and (ii)  with  respect  to  paragraphs  (x) and (y) of the
Relative Representations,  the environmental consultant and the engineer used by
the parties in Section 3.2,  respectively,  shall determine such amounts, if not
previously  determined.  Any such  proceedings  must be brought on or before the
first  anniversary  of the Closing Date,  failing which neither party shall have
any liability under this Section 3.3. The amount so-agreed upon or determined in
accordance  with this  paragraph  (a) for each  Property  is  referred to as the
"Adjustment Amount" for such Property. The Company shall only have the right to 

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identify  matters under  paragraph (aa) of the Relative  Representations  to the
extent  necessary to off-set amounts claimed by GMPTS under such paragraph (aa).
The Company shall only have the right to identify matters under paragraph (z) of
the Relative  Representations to the extent necessary to off-set amounts claimed
by GMPTS under such  paragraph  (z).  The  Company  shall only have the right to
identify matters under paragraphs (x) and/or (y) of the Relative Representations
to the  extent  necessary  to  off-set  amounts  claimed  by  GMPTS  under  such
paragraphs (x) and/or (y).                                                      

      (b) The "Applicable GMPTS Notice Date" means (i) with respect to paragraph
(x) of the  Relative  Representations,  September  30, 1998,  unless  either the
Versar  Reports  recommend  additional   investigation  which  the  parties  are
performing or the parties have ordered the New Environmental  Reports,  in which
case such date shall be thirty  (30) days after  receipt by GMPTS of  reasonably
sufficient  facts and  information  necessary to reasonably  quantify any untrue
nature of such paragraph (x) with respect to the Exchange Properties,  but in no
event later than one hundred eighty (180) days after the Closing Date, (ii) with
respect to paragraph (y) of the Relative Representations, thirty (30) days after
such receipt of the Merritt and Harris Reports,  unless the parties have ordered
New Engineering Reports, in which case such date shall be thirty (30) days after
receipt by GMPTS of the New  Engineering  Reports for the  Exchange  Properties,
(iii) with respect to paragraph (z) of the Relative Representations,  within ten
(10) Business  Days after the Closing  Date,  and (iv) with respect to paragraph
(aa) of the Relative  Representations,  one hundred  eighty (180) days after the
Closing Date.                                                                   

      (c) If the total amount of the Adjustment  Amounts for all of the Exchange
Properties  exceeds  GMPTS's  Percentage  Interest  of the  total  amount of the
Adjustment Amounts for all of the Portfolio  Properties by more than $5,000,000,
then within  thirty (30) days of the  agreement  or  determination  of the final
Adjustment Amounts, the Company shall pay to GMPTS, in the currency described in
Section 3.9, such amount from the first dollar of                               

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loss or claim.  On the other hand,  if the total amount of the final  Adjustment
Amounts for all of the  Retained  Properties  exceeds the  Company's  Percentage
Interest of the total amount of the Adjustment  Amounts for all of the Portfolio
Properties, GMPTS shall not owe the Company any amount under this Section 3.3.  
      (d)  Notwithstanding  anything  in this  Agreement  to the  contrary,  the
parties hereby  knowingly and voluntarily  expressly agree that (1) the sole and
only  consequence  of, or liability  of either  party for,  any untrue  Relative
Representation  or any breach of a Relative  Representation  shall be for either
party to make a claim under this  Section  3.3 and to enforce  against the other
party the  obligations  of such other party under this Section 3.3 or to proceed
under  Section 3.5 and (2) the Company shall not be liable for any actual (other
than claims under paragraph (c) of this Section 3.3), incidental, consequential,
punitive,  exemplary,  or other  damages  whatsoever  as a result of any  untrue
Relative  Representation  or breach  of a  Relative  Representation  and no such
damages may be claimed under this Agreement and each party hereby absolutely and
irrevocably  waives,  releases,  and forever discharges the other party from and
against any and all such damages.                                               
      3.4 Untrue Property Representations and Other Representations;  Limitation
on the  Company's  Liability.  If GMPTS  discovers  any fact or condition  which
results  in any of  the  Property  Representations  or the  representations  and
warranties set forth in paragraphs  (bb) and (cc) of Section 3.1 being untrue in
any material  respect,  GMPTS shall promptly  notify the Company of such fact or
condition, and GMPTS shall in good faith use all commercially reasonable efforts
to mitigate any damages resulting therefrom. Subject to the terms and conditions
of this  Section 3.4 and the  remaining  Sections of this Article 3, the Company
shall be  liable to GMPTS  for  actual  damages  suffered  as a result  thereof.
Notwithstanding  anything in this  Agreement  to the  contrary,  (a) the Company
shall have no  liability  to GMPTS for any  breach by the  Company of any of the
Property  Representations  or the  representations  and  warranties set forth in
paragraphs (bb) and (cc) of Section 3.1 unless and until GMPTS's                

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damages from breaches of the Property Representations and/or the representations
and warranties  set forth in paragraphs  (bb) and (cc) of Section 3.1 exceed the
total  sum of  $10,000,000  in  the  aggregate  with  respect  to  all  Exchange
Properties in which case GMPTS shall be entitled to recover from the Company all
of GMPTS's damages in excess of such amount,  in the form of currency  described
in Section 3.9,  subject only to the other  limitation of liability set forth in
this Section 3.4, (b) the Company shall have no liability under this Section 3.4
for any breach of any Relative Representation,  and (c) the Company shall not be
liable for any punitive,  exemplary,  incidental,  or consequential damages as a
result of any breach of a Property  Representation  or the  representations  and
warranties set forth in paragraphs (bb) and (cc) of Section 3.1.                

      3.5  Rejection  Conditions.  For  purposes of this  Agreement,  it will be
deemed a "Rejection  Condition" if (a) on the Closing  Date, an Exchange  Owning
Entity does not legally and  beneficially own its respective  Exchange  Property
(or in the  case of the  Hilltop,  Stoneridge,  and  Woodfield  Exchange  Owning
Entities,  if the land trustee  holding  title for the benefit of such  Exchange
Owning  Entities does not own such Exchange  Property) or any interest holder in
the Exchange  Owning Entity that is transferring  its partnership  interest does
not legally and beneficially  own that interest,  (b) prior to the Closing Date,
GMPTS  or the  Company  identifies  a fact or  condition  which  existed  on the
Relative  Valuation  Date and such fact or  condition  (i)  results in an untrue
Relative  Representation  (based  only on the Merritt  and Harris  Reports  with
respect  to  physical   condition  and  the  Versar   Reports  with  respect  to
environmental  matters or the New Engineering  Reports or the New  Environmental
Reports,  if and to the  extent  received  on or before the  Closing  Date) with
respect to any Exchange  Properties and (ii) results in a reduction of more than
the greater of  $40,000,000 or 35% of the gross relative value for that Property
which was used by the parties when they  determined  the relative  values of the
Portfolio Properties, or (c) on the Closing Date, the parties have not satisfied
any  material  condition  or  obtained  any consent  which is required  prior to
transferring                                                                    

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the Company's  interest in the Exchange  Owning Entity to NewCo or  transferring
the Membership  Interest to GMPTS in the manner  contemplated by this Agreement;
provided,  however,  in the event any such  condition  is not  satisfied or such
consent is not obtained on or prior to the  originally  scheduled  Closing Date,
subject to the last  paragraph of this  Section 3.5, the Company  shall have the
right to exclude such Exchange Property from the Closing and adjourn the Closing
for  that  Exchange  Property  for up to 90  days to  attempt  to  satisfy  such
condition or obtain such consent, and if such condition is not satisfied or such
consent  is not  obtained  within  such 90 days,  GMPTS  shall have the right to
reject such Exchange  Property  hereunder.  In the event of any delayed  closing
described in this Section 3.5, the "Closing Date" as used herein with respect to
that  Property(ies)  shall  mean the  actual  date on which the  closing of that
Property(ies) is consummated.  In the event a Rejection  Condition exists on the
Closing  Date with  respect to an Exchange  Property,  subject to the  foregoing
right to adjourn the Closing for that Exchange  Property up to ninety (90) days,
GMPTS  and the  Company  shall  each  have the right to  exclude  such  Exchange
Property from this  Agreement by delivering  written  notice to the other on the
Closing  Date.  If either  party so  excludes an  Exchange  Property,  then with
respect to each such excluded Exchange Property:                                

       (i)  In lieu of transferring  to  NewCo  the  Company's  interest  in the
            Exchange  Owning  Entity  with  respect  to  the  excluded  Exchange
            Property  at  the Closing, the  Company shall execute and deliver to
            GMPTS an unsecured note, in the form  of  Exhibit E attached hereto,
            with a per annum  interest rate  of eight  percent (8%), a  maturity
            date of three (3) years,  prepayable  at any time without penalty or
            premium, and in an amount equal to the agreed value of that Exchange
            Property  as determined  by the  parties  when they  determined  the
            Relative  Value of the  Portfolio  Properties, less the  outstanding
            principal balance as of the Closing Date  on any secured  financings
            on  such  Property  (and  reduced  by  50% to reflect the  Company's
interest in the Exchange Owning Entity in the           

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            case of Woodfield);  provided,  however,  if the Rejection Condition
            resulting in the Property  being  excluded is set forth in paragraph
            (b)  above,  the  amount of such note  shall be  reduced  by GMPTS's
            Percentage  Interest  of  such  reduction  in  relative  value.  The
            principal balance of any such note shall be deemed satisfied in full
            upon delivery to GMPTS of the partnership interests in such Exchange
            Owning  Entity which was so excluded  within six (6) months from the
            date of the first Closing,  or any time  thereafter so long as (1) a
            material  adverse  change  has not  occurred  with  respect  to that
            Exchange  Property  and  (2)  the  Company  reaffirms  the  Property
            Representations  as of the date of the delivery of such  partnership
            interest   with  such  changes  as  are  necessary  to  reflect  the
            then-current  facts so long as such  facts  do not  have a  material
            adverse  affect on the Property.  In addition,  if at any time after
            Closing the Company has the right to deliver such Exchange  Property
            to GMPTS,  GMPTS  shall  have the right to  require  the  Company to
            transfer such partnership  interest to GMPTS in full satisfaction of
            such note,but in such case,  the Company shall not be deemed to have
            made any Property  Representations with respect to such Property and
            the Company  shall have no liability  with respect to such  Property
Representations;                                        

      (ii)  The  excluded  Property  will  not  be  used  when  determining  the
            Adjustment  Amounts  and  no  Property  Representation  or  Relative
            Representations  will be deemed made (or  breached)  with respect to
that Property;                                          

      (iii) The  amounts set forth in clause (a) of Section 3.4 shall be reduced
            by  a  percentage,   such  percentage  being  equal  to  a  fraction
            (expressed as a percentage),  the numerator of which is the Relative
            Value of the excluded  Property and the  denominator of which is the
      sum of the Relative Values for all of the Exchange Properties;

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      (iv)  For all purposes of this Agreement,  the excluded Property shall not
be deemed to be one of the Exchange Properties; and     

      (v)   Any  debt  described  on  Exhibit  B with  respect  to the  excluded
Property shall not be assumed by NewCo.                 

If a Rejection  Condition  described  in clause (c) above  exists on the Closing
Date with  respect to more than two of the  Exchange  Properties,  GMPTS and the
Company  shall each have the right to terminate  this  Agreement  by  delivering
written  notice to the other on the  Closing  Date in which case this  Agreement
shall terminate and be of no further force or effect whatsoever.  If a Rejection
Condition  exists on the Closing Date and either party has  delivered  notice of
such  condition  to the other on or before the Closing  Date with  respect to an
Exchange Property and such Property is not excluded hereunder, the Company shall
have no  liability  under  this  Article 3 for any  breach  or  untrue  Property
Representation  or Relative  Representation  as a result of the existence of the
Rejection Condition.                                                            

      3.6 Condition of Exchange Properties. Subject to the terms of this Article
3, the Exchange  Properties are being  transferred  in an "AS-IS"  condition and
"WITH ALL FAULTS" as of the Relative  Valuation  Date.  Except as expressly  set
forth in this  Agreement and in any  certificates,  documents,  and  instruments
delivered   pursuant   hereto   or   executed   in   connection   herewith,   no
representations, warranties, agreements, assurances, or certifications have been
made or are made, and no responsibility  has been or is assumed,  by the Company
or any of the  Company  Parties as to the  Membership  Interests,  the  Exchange
Properties,  the Exchange Owning Entities or any other fact or matter whatsoever
with  respect to the  Exchange  Properties.  The parties  hereto  agree that all
undertakings  and agreements  heretofore  made between them or their  respective
agents or  representatives  with respect to the subject matter hereof are merged
into this  Agreement and the Exhibits and Schedules  attached  hereto and in all
certificates,  documents and  instruments to be delivered  pursuant to the terms
hereof, which alone fully and completely express their agreement and no party is
relying upon any                                                                

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statement or  representation  made by any other party  unless such  statement or
representation is specifically  embodied in this Agreement or in the Exhibits or
Schedules attached hereto or in any certificates,  documents, and instruments to
be delivered pursuant to the terms hereof.                                      

      3.7 Interest.  If either party does not pay to the other any consideration
owed to the other when due under  this  Agreement,  such party  shall pay to the
other, in addition to such money or consideration  owed, interest thereon at the
per  annum  rate set  forth in  Section  11.4(c)  from  the date  such  money or
consideration is owed until the date such money or consideration has been paid. 

      3.8 GMPTS's  Knowledge  Regarding  Required  Consents.  To the extent that
GMPTS or any GMPTS Party,  has actual  knowledge on or prior to the Closing Date
of any fact or condition which would result in the Property  Representation  set
forth in paragraph (w) of Section 3.1 being untrue, GMPTS shall promptly (but in
any event  prior to the  Closing)  notify the Company in writing of such fact or
condition.  If GMPTS or any GMPTS Party has any such  knowledge and GMPTS closes
the  Transaction,  the Company shall not be deemed to have breached the Property
Representation set forth in paragraph (w).                                      

      3.9 Currency.  If the Company has any financial obligations to GMPTS under
Section 3.3 or Section 3.4, such  obligations  shall be satisfied (i) first,  by
the Company paying to GMPTS cash, up to the maximum amount of $35,000,000,  (ii)
next, by the Company executing and delivering to GMPTS an unsecured note, in the
form of Exhibit  E, with a per annum  interest  rate of eight  percent  (8%),  a
maturity  date of three (3) years,  prepayable  at any time  without  penalty or
premium, and up to the maximum amount of $35,000,000, (iii) next, in the form of
units of  partnership  interest  in the  Company  up to the  maximum  amount  of
$25,000,000,  assuming  the value of each such unit is equal to the average NYSE
closing price of the shares of common stock of Taubman Centers,  Inc. for the 60
Business Days preceding the date the final Adjustment  Amount is determined,  in
the case of  adjustment  under Section 3.3, and on the date the amount is agreed
upon or otherwise determined in                                                 

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accordance  with Section 3.3 in the case of any payment due by the Company under
Section  3.4,  and (iv) the  remainder  thereof  by the  Company  executing  and
delivering  to GMPTS an unsecured  note in the form of Exhibit E hereto,  with a
per annum  interest  rate of eight  percent  (8%), a maturity  date of three (3)
years, and prepayable at any time without penalty or premium. In connection with
the  delivery of any units of  partnership  interest  in the  Company  delivered
pursuant  to this  Section  3.9,  the Company  shall  deliver to GMPTS a written
designation  identifying  GMPTS as a "Designated  Offeree" under the Amended and
Restated  Continuing  Offer,  effective  September  30,  1997,  made by  Taubman
Centers,  Inc.,  subject to the terms and conditions thereof and entitled to the
benefits  thereof as a Designated  Offeree.  Notwithstanding  such  designation,
GMPTS and each Existing Holder shall nevertheless  continue to be subject to the
Existing  Holder Limit or Ownership  Limit,  whichever is applicable,  under the
Articles of Incorporation for Taubman Centers, Inc.                             

      3.10  Survival  of  the  Representations  and  Warranties.   The  Relative
Representations  shall  survive only as is provided in Section 3.3. The Property
Representations  shall  survive the Closing and not be merged  therein until the
date  which is one  hundred  eighty  (180)  days  after  the  Closing  Date (the
"Expiration  Date"), and the Company shall only be liable to GMPTS hereunder for
a breach of a Property  Representation  with  respect  to which a written  claim
(including  good faith  reasonable  detail thereof) is made by GMPTS against the
Company  on or  before  the  Expiration  Date  (a  "Contested  Matter").  On the
Expiration  Date,  all  liability  for breaches of the Property  Representations
shall automatically  expire, except with respect to a Contested Matter, in which
case the  liability,  if any, with respect to a Contested  Matter shall survive,
solely with respect to or related to the claim so alleged, until the first (1st)
anniversary  of the Closing  Date, at which time the  Company's  liability  with
respect thereto shall automatically expire unless GMPTS has filed a lawsuit with
respect to the Contested  Matter prior to such first (1st)  anniversary,  and if
such lawsuit is filed,  the  Company's  liability  with respect to the Contested
Matter shall survive until a final adjudication (i.e., an                       

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adjudication  with  respect to which the time for taking all appeals as of right
has lapsed or with respect to which no further  appeal is legally  available) of
the  Contested  Matter,  at which time the  liability  or absence  thereof  with
respect thereto shall be conclusively established.                              

ARTICLE 4 - PRORATIONS, EXPENSES, COSTS, AND TAX RETURNS

      4.1  Proration.  (a) As used herein,  the  following  terms shall have the
following meanings:                                                             

      (i)   "Balance  Sheets"  means the  balance  sheets  which are used as the
            basis for the  Company's  filings with the  Securities  and Exchange
            Commission,  prepared in accordance  with GAAP applied  consistently
            with the Company's year end balance sheets in all material respects.

      (ii)  "Entity  Working  Capital" means the Company's  share,  based on its
            ownership  interest,  of  working  capital  in  each  Owning  Entity
            determined  by  subtracting   the  Company's  share  of  liabilities
            (excluding all secured and unsecured debt and deferred  income) from
            the Company's share of assets  (excluding mall facilities,  residual
            property and improvements, land leases and deferred charges), all as
shown on the Balance Sheets for the Owning Entities.    

      (iii) "TTC  Working  Capital"  means  the  Company's  share,  based on its
            ownership interest,  of working capital in the Manager determined by
            subtracting total  liabilities  (excluding notes payable) from total
            assets  (excluding  property  and  equipment),  all as  shown on the
Manager's Balance Sheet.                                

       (iv) "Company Working Capital"  means (based on the Company's books prior
            to  consolidation  of   controlled  entities  including  the  Owning
            Entities   and  the  Manager)  the    Company's    working   capital
            determined   by  subtracting  total   liabilities   (excluding   all
            secured and  unsecured  debt,  distributions to centers in excess of
            net  income  of  unconsolidated  Joint  Ventures,  and  the   amount
            accrued in 1992 relating  to the  Cash  Tender  Agreement)  from the
            Company's  total assets (excluding  notes  receivable  and  deferred
  charges), all as set forth on the Company's Balance Sheet.

      (b) The parties shall pro rate the Entity Working Capital, the TTC Working
Capital,  and the Company Working Capital in the manner set forth herein,  based
on the balance sheets as of the end of the month prior to the month in which the
Closing  occurs.  No adjustment  will be made for any time period which may have
elapsed  between such prior month end and the Closing  Date, in as much as GMPTS
will be obtaining,  through the Membership Interests, all working capital in the
Exchange Owning Entities which has accumulated after such month end and prior to
closing by virtue of the transfers of the partnership interests to NewCo and    

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NewCo Two as set forth herein. Likewise, the Company shall not pay any pro rated
or full  distribution to GMPTS in respect of the Exchange Units for the month in
which the Closing occurs,  and any distribution so made shall be returned to the
Company.  However,  any amounts  distributed by the Exchange  Owning Entities to
their  partners  on or after the  first  day of the  month in which the  Closing
occurs shall be returned to the Exchange Owning Entity.                         

      (c) If based on such Balance Sheets,  GMPTS's  beneficial  interest in the
Entity Working Capital for all of the Exchange  Owning Entities  exceeds GMPTS's
Percentage  Interest  of the sum of the Entity  Working  Capital  for all of the
Portfolio Properties,  the TTC Working Capital, and the Company Working Capital,
GMPTS  shall pay to the  Company  such  excess.  On the other  hand,  if GMPTS's
beneficial interest in the Entity Working Capital for all of the Exchange Owning
Entities  is less than  GMPTS's  Percentage  Interest  of the sum of the  Entity
Working Capital for all of the Portfolio  Properties,  the TTC Working  Capital,
and the Company  Working  Capital,  the Company  shall pay to GMPTS,  such short
fall.  In each case,  the  amount  owed to either  party  shall be  adjusted  as
provided in paragraph (b) above, if applicable.                                 

      (d) Changes in the  Company's  unsecured  debt  balances  at the  previous
month's end that occurred after July 31, 1998 shall result in a reallocation  of
debt.  Increases in the  unsecured  debt  balance  between July 31, 1998 and the
previous month's end due to borrowing  related to  pre-development  projects and
projects under construction  (i.e., Great Lakes and MacArthur) shall be excluded
from the debt balance to be reallocated.                                        

      (e) All amounts due to a party under this Section 4.1 shall be  calculated
and paid on the Closing  Date,  unless such amounts are not known on the Closing
Date, in which case such amounts shall be determined as soon as practical  after
the Closing Date and paid to the appropriate party within five (5) Business Days
of  determination  of the amount due,  together with interest thereon at the per
annum rate set forth in Section  11.4(c)  from the  Closing  Date until the date
paid.                                                                           

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      4.2 Fees and Expenses.  (a) GMPTS shall be responsible  for the payment of
the fees and expenses of its own legal counsel and financial  advisors  incurred
in connection with the transactions contemplated by this Agreement.             

      (b) GMPTS will  reimburse the Company for GMPTS's  Percentage  Interest of
(i) the fees of Morgan Stanley Dean Witter for services  provided to the Company
in connection  with the  Transaction,  including  (to the extent not  previously
paid) the work on behalf of the strategic planning special committee established
by the  partnership  committee  of the  Company,  (ii) the  costs,  expenses,and
premiums  and/or other payments  incurred by the Company in connection  with the
Tender  Offer or the  Defeasance,  including  the fees of  Morgan  Stanley  Dean
Witter,  up to the maximum  aggregate  amount of $50,000,000,  and obtaining the
Assumed  Bridge Loan and the Retained  Bridge Loan,  and in connection  with the
entering into of this Agreement,  and (iii) the reasonable fees of legal counsel
for the Company for  services  rendered to the Company in  connection  with this
Agreement and the transactions  contemplated  herein including the completion of
the Tender Offer or Defeasance and subsequent refinancings prior to Closing.    

      (c) GMPTS shall reimburse the Company for GMPTS's  Percentage  Interest of
all of the severance and other employee  related  documented  costs and expenses
and all of the  documented  restructuring  costs and  expenses  incurred  by the
Manager as a result of the Transaction  prior to the second (2nd) anniversary of
the Closing Date,  including all employees' retention bonuses and payments up to
a maximum amount equal to GMPTS's Percentage Interest of $18,000,000.           

      (d) GMPTS shall reimburse the Company for GMPTS's  Percentage  Interest of
any and all transfer taxes,  revenue stamps, and similar taxes and fees, fees to
lenders and lenders' counsel (including,  without limitation, in connection with
the  allocation  of debt to the  Exchange  Properties  and the  obtaining of any
releases),  the  costs  of  obtaining  any  necessary  consents,  the  costs  of
transferring the trademarks, logos, and names described in the proviso          

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of Recital C above,  and any and all other costs  relating to the  redemption of
the Exchange Units.                                                             

      (e) GMPTS shall be solely  responsible for and shall pay for all costs and
expenses of any title insurance commitment, reports, or policies with respect to
the Exchange Properties, including the Title Commitments.                       

      (f) GMPTS shall reimburse the Company for GMPTS's  Percentage  Interest of
all costs and  expenses  of  obtaining  the  Surveys,  Versar  Reports,  the New
Environmental  Reports  (if  any),  Merritt  and  Harris  Reports,  and  the New
Engineering  Reports (if any),  which have been  commissioned in connection with
the Transaction.                                                                

      (g) GMPTS shall be solely  responsible for any other due diligence cost or
expense with respect to the Exchange Properties, and the Company shall be solely
responsible  for all such  costs  and  expenses  with  respect  to the  Retained
Properties.                                                                     

      With respect to any fees or costs  described  above which are to be shared
by the  parties,  the Company  shall pay such fees and  expenses and GMPTS shall
reimburse  the Company for its  Percentage  Interests  of such fees and expenses
promptly upon request therefor by the Company.                                  

      4.3 Costs if Agreement Terminates. If this Agreement is terminated for any
reason,  GMPTS shall be  responsible  for the  payment of its fees and  expenses
described  in  paragraphs  (a) and (g) of Section 4.2 and the  Company  shall be
responsible for the payment of all other costs and expenses described in Section
4.2.  Notwithstanding  anything contained herein to the contrary, the provisions
of this Section 4.3 shall survive any termination of this Agreement.            

    4.4   Survival.  The provisions of this Article 4 shall survive Closing.

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 ARTICLE 5 - TAX MATTERS

      5.1  Profits  and Losses of  Partnership  Prior to  Closing.  The  parties
confirm  that the profits and losses of the Company for the period from  January
1, 1998,  through the Closing Date shall be allocated for tax reporting purposes
pursuant to the applicable  provisions of the Partnership  Agreement.  After the
Closing Date,  (a) the Company shall  continue to provide GMPTS with full access
to such  additional  financial  and  operating  data of the  Company  and  other
information  as may be  reasonably  required in  connection  with the assets and
liabilities being assumed by GMPTS, provided,  however, that GMPTS shall provide
reasonable  advance  notice to the Company of its need or desire for such access
and  provided,  further,  that GMPTS  shall pay for the cost and  expense of any
copies made of such  information,  and (b) GMPTS  shall  continue to provide the
Company with full access to such  additional  financial and operating  data with
respect to the Exchange  Properties  and other  information as may be reasonably
required by the  Company,  provided,  however,  that the Company  shall  provide
reasonable  advance  notice to GMPTS of its need or desire  for such  access and
provided,  further,  that the Company  shall pay for the cost and expense of any
copies made of such information.  Neither party shall be obligated to retain any
such  information  after the date on which such  information  would no longer be
retained under its normal document retention program.                           

      5.2 Tax Returns.  The Company and GMPTS will  cooperate with each other in
providing  and preparing  such  information  and item  described in Section 5.1,
including any relating to the Properties,  as may be required in order to timely
prepare and deliver Tax Returns and other  similar items after the Closing Date.
In  connection  therewith,  the Company shall  prepare the  applicable  1998 Tax
Returns of the Company,  and GMPTS shall pay to the Company  GMPTS's  Percentage
Interest of the cost and expense  incurred by the Company in preparing  such Tax
Returns promptly upon request of the Company. The Company shall also prepare and
file all Tax Returns of each Exchange Owning Entity which are due to be filed   

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after the Closing  Date for any period that ends on or before the Closing  Date.
The Company shall permit GMPTS to review and comment on the  Company's  1998 Tax
Returns  and on all other Tax Returns  prepared by the Company  prior to filing.
GMPTS shall comment to the Company in an expeditious manner. GMPTS shall pay the
Company  GMPTS's  Percentage  Interest  of the  reasonable  costs  and  expenses
incurred by the Company in preparing all such Tax Returns  promptly upon request
of the Company.  GMPTS shall prepare and file, in a manner  consistent  with all
returns for prior periods, all Tax Returns not heretofore filed of each Exchange
Owning  Entity for tax periods  that begin before the Closing Date and end after
the Closing  Date,  and the  Company  shall pay GMPTS the  Company's  Percentage
Interest of the  reasonable  costs and  expenses  incurred by GMPTS in preparing
such Tax  Returns  promptly  upon the request of GMPTS.  GMPTS shall  permit the
Company to review and comment on all such tax returns prepared by GMPTS prior to
filing. The Company shall comment to GMPTS in an expeditious manner.            

      5.3 Cooperation. The Company and GMPTS shall cooperate fully in the filing
of Tax Returns  pursuant  to this  Article  and any audit,  litigation  or other
proceeding with respect to such Tax Return or Taxes.                            

    5.5   Survival.  The provisions of this Article 5 shall survive Closing.

 ARTICLE 6 - CLOSING

      6.1 Closing.  The transfer and  redemption  of the Exchange  Units and the
transfer  of the  Membership  Interests  (the  "Transaction")  shall  occur (the
"Closing") at the offices of the Company located at 712 Fifth Avenue,  New York,
New York, at 12:00 p.m.  Detroit time on the fifth (5th)  Business Day after the
condition precedent set forth in paragraph (c) of Section 7.1 has been satisfied
or waived,  but in no event before  September 30, 1998, or after the first (1st)
anniversary  of the date hereof.  The date on which the Closing occurs is herein
referred to as the "Closing Date".                                              

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      6.2 The Company's Closing  Deliveries.  At the Closing,  the Company shall
deliver or cause to be delivered to GMPTS the following:                        

      (a)   Assignment of Membership Interest. A duly executed assignment of the
            Membership  Interests  to GMPTS in the form of  Exhibit  F  attached
hereto (the "Assignment of Membership Interest").       

      (b)   An Amendment to Certificate of Limited Partnership.  An Amendment to
            the Certificate of Limited Partnership of the Company evidencing the
            withdrawal  of GMPTS  from the  Company  in the  form of  Exhibit  G
attached hereto (the "Certificate of Amendment").       

      (c)   Certificate Updating  Representations and Warranties.  A certificate
            updating the representations and warranties of the Company set forth
            in  Section  8.2 as of the  Closing  Date in the form of  Exhibit  H
attached hereto.                                        

      (d)   Legal Opinion.  A legal opinion of the Company's  counsel opining as
            to the due authorization,  execution, and delivery by the Company of
            this  Agreement and all documents and  agreements to be executed and
            delivered by the Company to GMPTS hereunder,  in the form of Exhibit
I attached hereto.                                      

      (e)   Non-Foreign  Status Affidavit.  A non-foreign  status affidavit from
            the  Company in the form  required by Section  1445 of the  Internal
Revenue Code, in the form of Exhibit J attached hereto. 

      (f)   Evidence of Authority. A certificate of the Secretary of the Company
            with respect to the authority to act on behalf of the Company of the
            individual executing on behalf of the Company this Agreement and all
            documents  and  agreements  contemplated  by  this  Agreement  to be
            delivered  by  the  Company  and  the  Company's   authorization  to
            consummate  the  Transaction,  in the  form of  Exhibit  K  attached
hereto.                                                 

      (g)   Directions to Distribute  Trust Assets.  Copies of the Directions to
            Distribute  Trust Assets from the Company to the trustees of the TRG
            Trust, the TRG Trust II, the TRG Trust IV, and the TRG Trust XIII in
  the form of Exhibits L-1, L-2, L-3, and L-4, respectively.

      (h)   Original  Documents.  Constructive  possession  of originals  or, if
            originals  are not  available,  copies,  of the  Leases,  the Anchor
            Documents,  the Loan Documents,  the Exchange Partnership Documents,
            the Ground Leases, and Service Contracts shall be delivered to GMPTS
            by the Company leaving the same in the possession and control of the
Manager.                                                

      (i)   Exchange  Properties  Documents.   Constructive  possession  of  the
            following,  to  the  extent  in  the  possession  or  control  of or
            reasonably  available  to the  Company  or  the  Manager,  shall  be
            delivered  by the  Company  leaving the same in the  possession  and
            control of the Manager or at the Property:  (i) the original (or, if
            unavailable,  a copy) of the existing certificate or certificates of
            occupancy,  licenses,  permits,  authorizations and approvals issued
            for or with  respect  to the  Exchange  Properties  by  governmental
authorities having                                      

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            jurisdiction,  and (ii) all books,  records  and files  (other  than
            Confidential  Information)  located at the Exchange Properties or at
            the office of the  Company  or the  Manager  relating  solely to the
    Exchange Properties and the ownership and operation thereof.

      (j)   Property  Management  Agreement.  The separate  Property  Management
            Agreements (the "Property Management Agreements") to be entered into
            by GMPTS and the  Manager in the form of  Exhibit M attached  hereto
for each Wholly-Owned Exchange Entity.                  

      (k)   Transfer Tax  Affidavits.  Transfer tax affidavits and returns where
required, in the form of Exhibit N attached hereto.     

      (l)   Proration.  The proration  in  favor of GMPTS  under Section 4.1, if
any.                                                    

      (m)   Certificate of Formation of NewCo and NewCo Two. Certified copies of
            the   Certificate  of  Formation  of  NewCo  and  NewCo  Two,  which
            Certificates  of  Formation  shall be in the form of Exhibit O-1 and
Exhibit O-2, respectively.                              

      (n)   Good Standing of NewCo and NewCo Two.  Certificates of Good Standing
for NewCo and NewCo Two.                                

      (o)   Amendment  to   Certificates   of   Formation.   Amendments  to  the
            Certificates  of  Formation  of NewCo and NewCo Two  evidencing  the
            transfer  of the  Membership  Interests  to  GMPTS,  in the  form of
Exhibit P-1 and P-2, respectively.                      

      (p)   Assignments of Partnership  Interests.  Copies of the Assignments of
            Partnership Interests pursuant to which NewCo acquired its interests
            in the Exchange Owning  Entities,  which  Assignments of Partnership
    Interests shall be in the form of Exhibit Q attached hereto.

      (q)   Consents. Copies of any releases, assumptions,  novations, consents,
            approvals,  or waivers  obtained by the Company  with respect to the
Transaction.                                            

      (r)   Estoppels.  Copies of all estoppel certificates described in Section
            9.2.3 which have been received by the Company as of the Closing Date
and not previously delivered to GMPTS.                  

      (s)   Amended  and  Restated  Partnership  Agreements.  At the Closing but
            prior to the transfer of the Membership Interests to NewCo and NewCo
            Two,  the  Company  shall  amend and  restate  the  Exchange  Owning
            Documents  for the Wholly-  Owned  Exchange  Entities in the form of
            Schedule 6.2(s) attached hereto, and shall deliver copies thereof to
GMPTS.                                                  

      (t)   Other Documents. Such other documents as may be reasonably requested
            by  GMPTS,   provided  such  documents  do  not,  in  the  Company's
          judgement, impose any material cost or liability upon the Company.

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      6.3 GMPTS's  Closing  Deliveries.  At the Closing,  GMPTS shall deliver or
cause to be delivered to the Company the following:                             

      (a)   Assignment  Separate from Exchange Units. A duly executed assignment
            of the  Exchange  Units  to the  Company  in the form of  Exhibit  R
attached hereto.                                        

      (b)   Certificate of Exchange Units.  The original Certificate Nos. 31 and
35 representing the Exchange Units.                     

     (c)   Amendment to Certificate of Limited Partnership. The Certificate of
Amendment.                                              

      (d)   Confirmation  of  Withdrawal.   A  confirmation  of  withdrawal  and
            acknowledgement  of the redemption of the Exchange Units in the form
of Exhibit S attached hereto.                           

      (e)   Certificate Updating  Representations and Warranties.  A certificate
            updating the  representations  and  warranties of GMPTS set forth in
            Section 8.1 as of the Closing Date in the form of Exhibit T attached
hereto.                                                 

      (f)   Assumption  and Agreement  from NewCo and NewCo Two. A duly executed
            Assumption Agreement in the form of Exhibit U from NewCo, NewCo Two,
and GMPTS.                                              

      (g)   Legal Opinion.  A legal opinion of GMPTS's counsel opining as to the
            due  authorization,   execution,  and  delivery  by  GMPTS  of  this
            Agreement  and all  documents  and  agreements  to be  executed  and
            delivered by GMPTS to the Company hereunder,  in the form of Exhibit
V attached hereto.                                      

      (h)   Consents  and  Releases.   Copies  of  any  releases,   assumptions,
            novations,  consents,  approvals,  or waivers obtained by GMPTS with
respect to the Transaction.                             

      (i)   Acceptance of Assignment  of  Membership  Interest.  A duly executed
            acceptance of the  Assignment of Membership  Interest in the form of
Exhibit F attached hereto.                              

      (j)   Evidence of Authority.  A certificate  of the Secretary of the GMPTS
            Corporation  with respect to the authority to act on behalf of GMPTS
            of the  individual  executing on behalf of GMPTS this  Agreement and
            all documents and  agreements  contemplated  by this Agreement to be
            delivered  by GMPTS and  GMPTS's  authorization  to  consummate  the
Transaction, in the form of Exhibit W attached hereto.  

      (k)   Transfer Tax  Affidavits.  Transfer tax affidavits and returns where
            required,  in the form of Exhibit N attached  hereto,  together with
evidence of payment of all amounts due thereunder.      

      (l)   Property Management Agreements.  The Property Management Agreements.

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      (m)   Termination of Rights Under Cash Tender. A surrender and termination
            of all of  GMPTS's  rights  under  the Cash  Tender,  in the form of
Exhibit X attached hereto.                              

      (n)   Resignation of Board and Partnership  Committee Seats. A resignation
            in the form of  Exhibit  Y  attached  hereto  from  the  individuals
            appointed  or  elected  by  GMPTS  holding  seats  on the  Company's
            partnership  committee  and the  Taubman  Centers,  Inc.'s  board of
directors.                                              

      (o)   Proration. The proration in favor of the  Company under Section 4.1,
if any.                                                 

      (p)   Other Documents.  Such other documents as may be reasonably required
            by the Company, provided such documents do not, in GMPTS's judgment,
impose any material cost or liability upon GMPTS.       

    6.4   Survival.  The provisions of this Article 6 shall survive Closing.

 ARTICLE 7 - CONDITIONS TO CLOSING

      7.1  Conditions  Precedent to the  Company's  Obligations.  The  Company's
obligation to redeem the Exchange Units and to transfer the Membership Interests
hereunder  is  conditioned  upon  the  satisfaction  of  all  of  the  following
conditions:                                                                     

      (a)  The  due  performance  in  all  material  respects  by  GMPTS  of the
undertakings and agreements to be performed by it under Article 6; and          

      (b) The truth in all material respects of each representation and warranty
made in Section 8.1 of this  Agreement by GMPTS at the time as of which the same
is made and as of the Closing Date; and                                         

      (c) On or before the first (1st)  anniversary  of the date hereof,  either
(i) the  completion of the tender offer (the "Tender  Offer") for the unsecured,
senior notes of the Company issued pursuant to that certain Amended and Restated
Indenture  dated  March 4, 1994,  by and  between  the  Company  as issuer,  and
Chemical Bank, as trustee, such that a sufficient number of note holders consent
to the  amendment  of such  Indenture  to  eliminate  or  modify  the  covenants
contained   therein  which  would  be  breached  by  the   consummation  of  the
transactions contemplated by this Agreement or (ii) the "covenant defeasance" of
all such debt (the  "Defeasance").  The  Company  shall use its best  efforts to
complete the Tender                                                             

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Offer or Defeasance successfully;  provided, however, that the Company shall not
be  obligated  (but may, in its sole  discretion  elect) to complete  the Tender
Offer or  Defeasance  if the cost of doing  so  exceeds  $50,000,000,  excluding
amounts due and owing on such notes.                                            

      7.2 Conditions  Precedent to GMPTS's  Obligation.  GMPTS's  obligations to
transfer  the  Exchange  Units  to the  Company  and to  accept  the  Membership
Interests  in  redemption  of  the  Exchange  Units  is  conditioned   upon  the
satisfaction of all of the following conditions:                                

      (a) The due  performance  in all  material  respects by the Company of the
undertakings and agreements to be performed by it under Article 6; and          

      (b) The truth in all material respects of each representation and warranty
made in Section 8.2 of this Agreement by the Company at the time as of which the
same is made and as of the Closing Date.                                        

      7.3  Injunction.  If a  court  of  competent  jurisdiction  has  issued  a
temporary  restraining  order or an injunction  enjoining  either or both of the
parties  hereto  from  closing  the entire  Transaction,  the  Closing  shall be
suspended  until such time as the  litigation  in which the order or  injunction
arises is resolved; provided, however, if the parties hereto are still prevented
by  an  injunction  from  consummating  the  entire  Transaction  on  the  first
anniversary of the date hereof, this Agreement shall automatically terminate and
be of no further force or effect  whatsoever  without  notice or other action of
either party,  and neither party shall have any liability to the other following
such termination.                                                               

      7.4 Waiver of Failure of Conditions Precedent.  At any time or times on or
before  the  earlier of the date  specified  above for the  satisfaction  of any
condition  or the  Closing  Date,  the  Company or GMPTS may elect in writing to
waive the  benefit of any such  condition  set forth in Section  7.1 (except for
subparagraph (c)) or Section 7.2, respectively.  By closing the Transaction, the
Company and GMPTS shall be conclusively deemed to have waived the benefit of any
remaining,  unfulfilled  conditions  set forth in Section  7.1 or  Section  7.2,
respectively,  except for any breach of any  representation  or  warranty or any
default or other                                                                

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breach hereunder. In the event any of the conditions set forth in paragraphs (a)
and (b) of Sections 7.1 or 7.2 are neither waived nor fulfilled on or before the
Closing Date,  GMPTS or the Company (as  appropriate) may suspend its obligation
to Close by  written  notice  to the other on or prior to the  Closing  Date and
pursue its remedies  under Article 10. In the event that the condition set forth
in paragraph (c) of 7.1 is not satisfied prior to the first (1st) anniversary of
the date hereof, then this Agreement shall automatically  terminate and be of no
further force or effect on the first (1st) anniversary of the date hereof.      

      7.5 No Other  Conditions  to  Closing.  Except as  expressly  set forth in
Section 7.1, Section 7.2, or Section 7.3, there are no conditions to Closing and
no event or occurrence arising before or after the Relative Valuation Date shall
be a condition to Closing or allow either  party to  terminate  this  Agreement,
including  any  casualty,  destruction,  condemnation,  or adverse  change  with
respect to any of the Portfolio Properties.                                     

ARTICLE 8 - REPRESENTATIONS AND WARRANTIES

      8.1 GMPTS's Representations and Warranties.  GMPTS represents and warrants
to the Company as follows as of the date hereof:                                

      (a) GMPTS is the record and beneficial  owner of the Exchange Units,  free
and clear of any Encumbrances. At the Closing, the Company will receive good and
marketable  title to the  Exchange  Units,  free and clear of any  Encumbrances.
Except for this  Agreement  and the  Partnership  Agreement,  there are no other
contracts, agreements, understandings,  arrangements, securities, or commitments
of any  nature  to  which  GMPTS  is a party  relating  to the  sale,  purchase,
redemption,  conversion,  exchange,  or  transfer of any of the  Exchange  Units
except for a certain Cash Tender  Agreement,  dated November 30, 1992, among the
Company,  Taubman Centers,  Inc., GMPTS, and others (the "Cash Tender").  Except
for the  Exchange  Units,  GMPTS owns no units of  partnership  interest  in the
Company and has no option, contract, or other agreement to purchase any units of
partnership interest in the Company.                                            

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      (b) GMPTS is a limited partnership duly organized,  validly existing,  and
in good  standing  under  the  laws of the  State of  Delaware  and has made all
filings and recordings  necessary to exist,  operate,  and do business under all
applicable Laws and has the power and authority to own,  operate,  and lease its
properties,  to carry on its  business as currently  conducted,  and to execute,
deliver,  and perform this  Agreement  and any other  documents  or  instruments
delivered by it pursuant to or in connection with this Agreement.               

      (c) The execution,  delivery,  and  performance by GMPTS of this Agreement
and all other  documents  and  instruments  required  to be  delivered  by GMPTS
pursuant  to this  Agreement  have  been  duly  and  validly  authorized  by all
necessary  actions of GMPTS and its general partners (none of which actions have
been  modified  or  rescinded,  and all of which  actions  are in full force and
effect).                                                                        

      (d) This Agreement  constitutes,  and when delivered,  all other documents
and  instruments  required to be delivered by GMPTS  pursuant to this  Agreement
will  constitute,  legally valid and binding  obligations of GMPTS,  enforceable
against  GMPTS  in  accordance  with  their  respective  terms,  except  as such
enforceability  may be limited by  bankruptcy,  insolvency  (including,  without
limitation,  all  laws  relating  to  fraudulent  conveyances),  reorganization,
moratorium,  and other  similar  laws and  equitable  principles  relating to or
limiting creditors' rights generally.                                           

      8.2 The Company's  Representations and Warranties.  The Company represents
and warrants to GMPTS as follows as of the date hereof:                         

      (a) The Company is a limited partnership duly organized, validly existing,
and in good  standing  under the laws of the State of Delaware  and has made all
filings and recordings  necessary to exist,  operate,  and do business under all
applicable law and has the partnership power and authority to own, operate,  and
lease its  properties,  to conduct its business as currently  conducted,  and to
execute,  deliver,  and  perform  this  Agreement  and any other  documents  and
instruments delivered by it pursuant to or in connection with this Agreement.   

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      (b) The  execution,  delivery,  and  performance  by the  Company  of this
Agreement and all other  documents and  instruments  required to be delivered by
the Company under this  Agreement  have been duly and validly  authorized by all
necessary  actions of the Company  (none of which  actions have been modified or
rescinded, and all of which actions are in full force and effect).              

      (c) This Agreement  constitutes,  and when delivered,  all other documents
and  instruments  required  to be  delivered  by the  Company  pursuant  to this
Agreement will constitute, legally valid and binding obligations of the Company,
enforceable  against  the Company in  accordance  with their  respective  terms,
except  as  such  enforceability  may  be  limited  by  bankruptcy,   insolvency
(including  all  laws  relating  to  fraudulent  conveyances),   reorganization,
moratorium,  and other  similar  laws and  equitable  principles  relating to or
limiting creditors' rights generally.                                           

      (d) The  Company  is the  record and  beneficial  owner of the  Membership
Interests,  free and  clear of all  Encumbrances.  At the  Closing,  GMPTS  will
receive good and marketable title to the Membership Interests, free and clear of
any Encumbrances.                                                               

      (e) The only  assets  and  direct  liabilities  of  NewCo  are as shown on
Exhibit Z-1 attached hereto and the only assets and direct  liabilities of NewCo
Two are as shown on Exhibit Z-2 attached hereto.                                

 ARTICLE 9 - COVENANTS

      9.1 GMPTS's Covenants. GMPTS hereby covenants with the Company as follows:

            9.1.1 Confidentiality.  At  al l times  GMPTS  and  its  affiliates,
advisors,  and agents shall keep secret and retain in strictest  confidence  and
shall not use for the benefit of itself or others,  all non-public  information,
including  customer  lists,  supplier  lists,  details  of  contracts,   pricing
policies,   operational   methods,   marketing  plans  or  strategies,   product
development   techniques  or  plans,   or  technical   policies   (collectively,
"Confidential  Information")  pertaining to the Retained  Properties;  provided,
however, that the term Confidential                                             

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Information  shall not be  deemed to  include  information  that was or  becomes
generally  available to the public other than as a result of disclosure by GMPTS
or  any  GMPTS  Party.  The  prohibition   against  disclosure  of  Confidential
Information shall survive the Closing and the restrictive covenants contained in
this  Section  9.1.1 shall not  terminate  until such  Confidential  Information
ceases to be  Confidential  Information  as defined  herein.  The parties hereto
acknowledge and agree that the Company may suffer irreparable harm from a breach
by GMPTS or any of its affiliates,  advisors, or agents, of any of the covenants
or agreements  contained herein. In the event of an alleged or threatened breach
by GMPTS or any of its affiliates,  advisors, or agents of any of the provisions
of this Section 9.1.1, the Company or its successors or assigns may, in addition
to all other  rights or remedies  existing  in its favor,  apply to any court of
competent  jurisdiction  for specific  performance  and/or  injunctive  or other
relief in order to enforce or prevent any  violation of the  provisions  hereof.
The provisions of this Section 9.1.1 shall survive  Closing as and to the extent
not terminated by this Section. GMPTS shall have no liability under this Section
as a result of any disclosure of any Confidential Information by the Manager.   

            9.1.2  Approvals  not a  Condition  to  GMPTS's  Performance.  GMPTS
acknowledges  and agrees that its  obligation to perform under this Agreement is
not  contingent  upon  GMPTS's  ability to obtain any approval or consent of any
party unrelated to the Exchange Property, except as otherwise expressly provided
herein.                                                                         
            9.1.3 Board and Partnership Committee Seats. At Closing, GMPTS shall
resign the seats held by it on the  Partnership  Committee of the Company and on
the Board of Directors of Taubman Centers, Inc.                                 
     9.2   The Company's Covenants. The Company hereby covenants with GMPTS as
follows:                                                                        

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            9.2.1 Management,  Maintenance, and Operation of Exchange Properties
Prior to Closing.  Between the date  hereof and the  Closing  Date,  the Company
shall, unless otherwise directed in writing by GMPTS:                           

      (a) cause the Exchange  Properties  and the Exchange  Owning  Entity to be
      managed,  maintained,  and  operated  in  a  manner  consistent  with  the
      Company's  past  practices  with respect to the Exchange  Properties;  (b)
      cause  each  Exchange  Owning  Entity to  continue  to offer the  Exchange
      Property for lease in the ordinary course of business  consistent with the
      past  practices of the Exchange  Owning  Entity and the Company shall keep
      GMPTS informed as to the status thereof prior to the Closing Date; (c) not
      do nor allow any Exchange Owning Entity to do any of the following without
      the  prior  written   consent  of  GMPTS,   which  consent  shall  not  be
unreasonably withheld or delayed:                                   

            (i)   modify,  amend,  or terminate any of the Exchange  Partnership
                  Documents, Ground Leases, Anchor Documents, or Loan Documents;

            (ii)  grant or consent to any new encumbrances,  easement,  lien, or
                  restriction   covering  the  Exchange  Properties  which  will
                  survive the Closing excluding (but subject to Section 9.2.1(b)
               and 9.2.1(c)(i)) any new leases or modifications of leases;

            (iii) remove any equipment or other items of personal  property from
                  the  Exchange  Properties  excluding  any such  removal in the
                  ordinary  course of business  (provided  such  property is, if
             needed, replaced with substantially similar property); or

            (iv)  incur any debt other than  trade  payables  or fail to pay any
creditor when due.                          

      (d)  keep  its  existing  insurance  coverage  (or  substantially  similar
      coverage) current and in full force and effect with respect to each of the
Exchange Properties.                                                

In addition,  if the consent of the Exchange Owning Entity is required under any
existing management agreement with respect to any Exchange Property, the Company
shall obtain the consent of GMPTS with respect to such matter.                  

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          9.2.2  Access to  Exchange  Properties.  All  requests  by GMPTS for
access to information  pursuant to this Agreement shall be submitted or directed
exclusively to an individual to be designated by the Company.  At any time prior
to Closing, the Company shall allow GMPTS or GMPTS's  representatives  access to
the  Exchange  Properties  upon  reasonable  prior  notice at  reasonable  times
provided  such access does not  interfere  with the  operation  of the  Exchange
Properties or the rights of tenants,  Anchor Parties,  partners, or customers in
any material respect. In addition,  the Company shall direct the Manager to give
or  otherwise   make   available  to  GMPTS,   its   attorneys,   agents  and/or
representatives  all books,  records,  files and other writings in the Manager's
possession related in any material way to the use, ownership or operation of the
Exchange Properties, excluding any Proprietary Materials.                       

            9.2.3 Estoppels.  The Company shall use its commercially  reasonable
efforts to promptly  deliver an estoppel  certificate  to each Tenant leasing in
excess of 5,000 square feet of space (individually in any one Exchange Property,
or  individually  and  together  with  its  affiliates  at all  of the  Exchange
Properties),  Anchor  Party,  Ground  Lessor,  and any  lender  under  the  Loan
Documents,  and, if so requested by GMPTS, CalPERS with respect to the Woodfield
Exchange Owning Entity and any other third party under an agreement affecting an
Exchange Property.  The form of the estoppel  certificate to be sent to any such
party shall be subject to the approval of the Company,  which approval shall not
be unreasonably  withheld or delayed. If the estoppel certificate is sent to the
Company under a letter conspicuously stating that it shall be deemed approved if
not  objected to within  five (5)  Business  Days of  receipt,  then it shall be
deemed  approved  by the  Company if it is not  objected to within such five (5)
Business Day period. The Company agrees to use its commercially  reasonable good
faith efforts to obtain all such estoppel  certificates  within ninety (90) days
after the date hereof.  The Company agrees to send out all such estoppels within
twenty-five  (25) days of receipt from GMPTS of the approved form. If Closing is
delayed with respect to any or all of                                           

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the Exchange  Properties,  the Company shall, upon the request of GMPTS,  resend
any  estoppel  certificates  which GMPTS  believes in good faith are stale.  The
Company shall have no liability under this Section 9.2.3 unless it has failed to
use its commercially  reasonable  efforts to perform its obligations  under this
Section 9.2.3.                                                                  

            9.2.4 Confidentiality.  At all times the Company and its affiliates,
advisors,  and agents,  shall keep secret and retain in strictest confidence and
shall not use for the benefit of itself or others, all Confidential  Information
pertaining  to  the  Exchange  Properties;  provided,  however,  that  the  term
Confidential  Information shall not be deemed to include information that was or
becomes  generally  available to the public other than as a result of disclosure
by the Company or any Company  Party.  The  prohibition  against  disclosure  of
Confidential Information shall survive the Closing and the restrictive covenants
contained  in this Section  9.2.4 shall not  terminate  until such  Confidential
Information ceases to be Confidential Information as defined herein. The parties
hereto  acknowledge  and agree  that GMPTS may  suffer  irreparable  harm from a
breach by the Company or any of its  affiliates,  advisors,  or agents of any of
the  covenants or  agreements  contained  herein.  In the event of an alleged or
threatened breach by the Company or any of its affiliates,  advisors,  or agents
of any of the  provisions  of this Section  9.2.4,  GMPTS or its  successors  or
assigns may, in addition to all other rights or remedies  existing in its favor,
apply to any court of competent  jurisdiction  for specific  performance  and/or
injunctive  or other relief in order to enforce or prevent any  violation of the
provisions hereof. The provisions of this Section 9.2.4 shall survive Closing as
and to the extent not terminated by this Section.                               

     9.3 Mutual Covenants. GMPTS and the Company hereby covenant with each other
as follows:                                                                     

            9.3.1  Publicity.  Contemporaneously  with  the  execution  of  this
Agreement,  the parties shall jointly issue the press release attached hereto as
Exhibit AA (the "Approved  Press  Release").  Thereafter,  the Company and GMPTS
each hereby covenant that (a) prior to the                                      

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Closing  neither the Company  nor GMPTS shall  issue,  and the Company and GMPTS
shall cause their  respective  advisors not to issue, any other press release or
public statement (a "Press Release") with respect to the Transaction without the
prior  consent of the other,  except to the extent  required  by Law or the NYSE
(and in such event the  disclosing  party  shall  provide to the other  party in
advance any proposed press release or other disclosure and give such other party
an opportunity to comment  thereon and approve the same, such approval not to be
unreasonably  withheld) and (b) after the Closing,  the Press Release related to
the  consummation of Transaction  issued by either the Company or GMPTS shall be
subject to the review and approval of both parties (which  approval shall not be
unreasonably withheld). If either the Company or GMPTS is required by Law or the
NYSE to issue any Press  Release  other than the Approved  Press  Release,  such
party  shall  endeavor  to provide to the other at least two (2)  Business  Days
prior to the issuance of the same, a copy of the proposed  Press Release for its
review.  The provisions of this Section 9.3.1 shall survive the Closing (and not
be merged therein) or earlier termination of this Agreement.                    

            9.3.2 Covenants of the Company and GMPTS; Consents. Between the date
of this  Agreement  and the Closing  Date,  the parties  hereto agree (a) to use
their  best  efforts  without  having  to pay  consent  fees (i) to  obtain  all
consents,  permits,  waivers  of  rights  of  first  offer,  first  refusal,  or
otherwise, or approvals from governmental authorities or other third parties and
satisfy  all of the  conditions  and  obtain  all of the  consents  set forth on
Schedule  3.1(w) or otherwise  necessary to  consummate  and make  effective the
transactions  contemplated  by this  Agreement,  and, if a consent  from a third
party cannot be obtained or a condition cannot be satisfied,  to restructure the
Transaction,  or a part  thereof,  to lawfully  obviate the need for the missing
consent  or  satisfy  the   condition  in  some  other  way,  so  long  as  such
restructuring does not impose any material financial obligations on either party
unless such party consents to such material financial obligations, (ii) to cause
the Closing to occur,  and (iii)  cooperate in connection with any prepayment of
the Stoneridge secured financing                                                

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which  may  be  required  to be  made  by  GMPTS  in  order  to  consummate  the
Transaction;  (b)  not to  take  or omit to  take  any  action  which  would  be
reasonably  likely to cause any  condition  of closing set forth in Article 7 of
this Agreement not to occur;  and (c) to cooperate with each other in connection
with the  foregoing.  If a claim or  lawsuit  is made or filed by any  person or
entity  after  Closing  alleging  that a consent or  approval  was  required  to
consummate the  Transaction  and that such consent or approval was not obtained,
the parties shall share in accordance with their respective Percentage Interests
all losses, costs, liabilities, and damages (including interest,  penalties, and
reasonable    attorneys'   fees   and   disbursements    resulting   therefrom),
notwithstanding  the fact  that  GMPTS  may not have the  right to seek  damages
against the Company in such case as a result of the operation of Section 3.8.   

ARTICLE 10 - DEFAULT

      10.1 Default by GMPTS. If, on the Closing Date, (i) GMPTS is in default of
any of its  obligations  hereunder,  or (ii) any of GMPTS's  representations  or
warranties  in Section  8.1 are  untrue in any  material  respect,  or (iii) the
Closing  otherwise  fails to occur by reason of  GMPTS's  failure  or refusal to
perform  its  obligations  hereunder  in a prompt  and timely  manner,  then the
Company may elect, as its exclusive remedies, to either (a) proceed to close the
Transaction and retain all rights and remedies  hereunder or at law or in equity
against  GMPTS  or (b) if and  only if the  default  is also  the  failure  of a
condition  described  in Section 7.1,  not Close until GMPTS has  performed  its
obligations  hereunder and seek specific performance of this Agreement by GMPTS;
provided,  however,  if  the  Closing  has  not  occurred  prior  to  the  first
anniversary hereof, the Company shall, at any time thereafter, have the right to
terminate this Agreement and sue for damages. In no event shall the Company have
the right to  terminate  this  Agreement as a result of any default or breach by
GMPTS hereunder, except as provided in the foregoing clause (b).                

      10.2 Default by the Company.  If, on the Closing Date,  (i) the Company is
in default of any of its  obligations  hereunder,  or (ii) any of the  Company's
representations or warranties                                                   

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in  Section  8.2 are  untrue  in any  material  respect,  or (iii)  the  Closing
otherwise  fails to occur by reason  of the  Company's  failure  or  refusal  to
perform  its  obligations  hereunder  in a prompt and timely  manner,  GMPTS may
elect, as its exclusive remedies, to either (a) proceed to close the Transaction
and retain all rights and remedies  hereunder or at Law or in equity against the
Company,  or (b) if and only if the  default  is also a failure  of a  condition
described  in  Section  7.2,  not close  until the  Company  has  performed  its
obligations  hereunder and seek specific  performance  of this  Agreement by the
Company;  provided,  however, if the Closing has not occurred prior to the first
anniversary  hereof,  GMPTS  shall,  at any time  thereafter,  have the right to
terminate this  Agreement and sue for damages.  In no event shall GMPTS have the
right to  terminate  this  Agreement as a result of any default or breach by the
Company hereunder, except as provided in the foregoing clause (b).              

      10.3  Specific  Enforcement.  The parties  recognize and agree that in the
event that the Closing is not  consummated  in accordance  with this  Agreement,
immediate  irreparable  injury  would be  caused  for  which  there  would be no
adequate remedy at Law. Accordingly, the Company and GMPTS agree that each party
will be entitled to injunctive  relief to prevent the other party from breaching
its obligations under this Agreement and that each party is entitled to specific
enforcement  of the terms and provisions of this  Agreement,  in addition to any
other  remedy to which the party may be  entitled,  whether at Law or in equity,
subject to the terms, conditions, and limitations set forth in this Agreement.  

     10.4  Survival.  The provisions of this Article 10 shall survive Closing.

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ARTICLE 11 - INDEMNITY AND RELEASE

      11.1  Indemnification  by  the  Company.  The  Company  hereby  agrees  to
indemnify, defend, and hold harmless GMPTS and its agents (which for purposes of
paragraphs (f) and (g) below expressly include  representatives of GMPTS on both
the  Partnership  Committee of the Company and the Board of Directors of Taubman
Centers,  Inc.),  trustees,  beneficiaries,  contractors,  employees,  officers,
directors, shareholders, partners (excluding the Company), and advisors, and the
agents, or trustees, beneficiaries, contractors, employees, officers, directors,
shareholders,  partners  and  advisors  of  any  partner  of  GMPTS,  and  their
respective permitted successors and permitted assigns (collectively,  the "GMPTS
Parties"  and any one of them a "GMPTS  Party"),  from and  against  all losses,
costs, expenses, liabilities,  demands, claims, and damages (including interest,
penalties, and reasonable attorneys' fees and disbursements),  asserted against,
resulting  from,  imposed  upon or incurred by a GMPTS  Party,  as a result,  by
reason of, or resulting from:                                                   

      (a)   any third-party claim relating to the Retained  Properties,  whether
            arising,  taking  place,  occurring,  or  accruing  before  or after
Closing;                                                

      (b)   any breach or alleged  breach of any  obligation  owed by any of the
            entities which own the Retained Properties,  whether arising, taking
place, occurring, or accruing before or after Closing;  

      (c)   any breach or alleged breach of any partnership  agreement governing
            any of the  entities  which  own the  Retained  Properties,  whether
            arising,  taking  place,  occurring  or  accruing  before  of  after
Closing;                                                

      (d)   any lawsuit or claim against the Retained  Properties  or the owners
thereof;                                                

      (e)   except as  provided in Section  4.2(b)  with  respect to the fees of
            Morgan Stanley Dean Witter, any claim for a fee, commission or other
            payment by any  investment  bank,  advisor,  broker,  or  consultant
            engaged or hired by the Company  with  respect to this  Agreement or
the Transaction;                                        

      (f)   any  matter for which  GMPTS or any  Company  Partnership  Committee
            Member appointed by GMPTS or any director of Taubman  Centers,  Inc.
            elected by GMPTS would be indemnified  against under Section 6.12 of
            the  Partnership  Agreement  of the Company as in effect on the date
            hereof,  regardless of whether such Section 6.12 of the  Partnership
            Agreement is hereafter  modified,  amended or terminated;  provided,
            however, that for purposes of this Section 11.1(f),  "GMPTS Parties"
shall include only those persons which are entitled     

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            to indemnification  under Section 6.12 of the Partnership  Agreement
            of the Company as in effect on the date  hereof;  provided  further,
            however,  that for  purposes of this Section  11.1(f),  GMPTS itself
            shall  be  excluded  from the term  "GMPTS  Party",  but only to the
            extent of any amount  which  would  otherwise  be due to GMPTS under
            this Section  11.1(f) as a result of any  shareholder  or bondholder
            direct or derivative  action, to the extent, but only to the extent,
   based upon the execution and performance of this Agreement;

      (g)   any  matter for  which  GMPTS or any Company  Partnership  Committee
            Member appointed  by GMPTS or any director of Taubman Centers,  Inc.
            elected by GMPTS would be  indemnified against under Article VIII of
            the Articles of  Incorporation of Taubman Centers,  Inc., regardless
            of whether such Article VIII of  the  Articles  of  Incorporation is
            hereafter modified,  amended or terminated; provided,  however, that
            for purposes of this Section  11.1(g), "GMPTS Parties" shall include
            only  those  persons  which  are entitled to  indemnification  under
            Article VIII of the Articles of  Incorporation  of Taubman  Centers,
Inc., as in effect on the date hereof;                  

      (h)   liabilities which are not set forth on the balance  sheets described
            in Section 3.1(f)  but  which  under GAAP  were required to be shown
            thereof except for (i) liabilities with respect to matters which are
            the subject matter of  representations and  warranties set  forth in
            this Agreement, (ii) liabilities to which  GMPTS would be subject if
            it acquired the assets of the Exchange  Owning  Entity  rather  than
            partnership interests therein, and (iii) liabilities  resulting from
            or arising out of the Leases, Anchor Documents, Ground  Leases, Loan
            Documents, Exchange Partnership  Documents,  the Service  Contracts,
and/or the Permitted Exceptions;                        

      (i)   any claim arising out of the Excluded Assets whether arising, taking
place, occurring, or accruing before or after Closing;  

      (j)   the  obligations of the Company set forth above in the definition of
the "Assumed Bridge Loan."                              

      11.2  Indemnification  by GMPTS.  GMPTS,  NewCo and NewCo Two, jointly and
severally, hereby agree to indemnify,  defend, and hold harmless the Company and
its  agents,  trustees,   beneficiaries,   contractors,   employees,   officers,
directors,  shareholders,  partners  (excluding GMPTS), and advisors,  and their
respective successors and assigns  (collectively,  the "Company Parties"),  from
and against all losses,  costs,  expenses,  liabilities,  demands,  claims,  and
damages  (including  interest,  penalties,  and reasonable  attorneys'  fees and
disbursements),  asserted against, resulting from, imposed upon or incurred by a
Company Party, as a result, by reason of, or resulting from:                    

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      (a)   any third-party claim relating to the Exchange  Properties,  whether
            arising,  taking  place,  occurring,  or  accruing  before  or after
Closing;                                                

      (b)   any breach or alleged breach,  or any obligation owed, by any Owning
            Entity  under any of the Leases,  the Anchor  Documents,  the Ground
            Lease,  the Loan  Documents,  the Service  Contracts,  or  otherwise
            whether  arising,  taking place,  occurring,  or accruing  before or
after Closing;                                          

      (c)   any breach or alleged breach of any Exchange  Partnership  Document,
            by any partner other than an CalPERS, whether arising, taking place,
occurring or accruing before of after Closing.          

      (d)   any of the lawsuits,  claims and other matters described in Schedule
3.1(n) or Schedule 3.1(p) attached hereto;              

      (e)   any claim for a fee,  commission or other payment by any  investment
            bank, advisor,  broker, or consultant engaged or hired by GMPTS with
respect to this Agreement or the Transaction.           

      Notwithstanding  anything to the contrary  contained in this Section 11.2,
GMPTS shall not have an  obligation  to indemnify  the Company  pursuant to this
Section 11.2 if the matter giving rise to GMPTS's  obligation to indemnify  also
constitutes a breach by the Company of any of its representations and warranties
hereunder  whether or not GMPTS  still has the right to bring a lawsuit  against
the Company under the provisions of Section 3.4 or Section 3.10.                

      11.3  Notice of  Indemnification.  If a party (the  "Obligated  Party") is
required to  indemnify  a Company  Party or a GMPTS  Party (as  applicable,  the
"Indemnified  Party") under the terms of this Agreement,  the Indemnified  Party
shall give prompt written notice and a demand or request for  indemnification to
the Obligated  Party  (together with a description  in reasonable  detail of the
facts known to the Indemnified  Party with respect thereto  including  copies of
any  pleadings,  lawsuits or written  demands  with  respect  thereto),  but the
failure to so notify the Obligated Party will not relieve the Obligated Party of
any liability that it may have to the  Indemnified  Party,  except to the extent
that the Obligated  Party is materially  prejudiced by the  Indemnified  Party's
failure to give such notice.                                                    

      11.4  Procedure  for  Third-Party  Claims.  (a) If the claim or matter for
which  indemnity  is sought  hereunder  results  from a  third-party  claim (the
"Claim"), then this Section 11.4 shall                                          

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govern the  procedure  with  respect to such  indemnification.  Upon  receipt of
notice of a Claim from an Indemnified  Party,  the Obligated  Party shall assume
the defense thereof with counsel  reasonably  satisfactory  to such  Indemnified
Party and the Indemnified  Party shall  cooperate in all reasonable  respects in
such  defense.  The  Indemnified  Party shall have the right to employ  separate
counsel  in any  action  or claim and to  participate  in the  defense  thereof,
provided that the fees and expenses of counsel employed by the Indemnified Party
shall be at the expense of the Obligated  Party only if such counsel is retained
pursuant to the provisions of Section  11.4(c).  The Obligated Party may conduct
such defense in the name of or on behalf of the  Indemnified  Party or Obligated
Party and shall have full authority and control with respect thereto,  including
the settlement thereof,  provided no such settlement may subject the Indemnified
Party to civil or criminal fines or penalties,  impose  on-going  obligations or
restrictions on the Indemnified  Party or result in the admission of any default
or violation by the  Indemnified  Party under any agreement or Law,  without the
express prior written authorization of the Indemnified Party.                   

      (b)  Subject to the  provisions  of  subparagraph  (a)  above,  if a final
adjudication  (i.e., an  adjudication  with respect to which the time for taking
all appeals as of right has lapsed or with respect to which no further appeal is
legally available) of such Claim is rendered against the Indemnified Party, by a
court of competent  jurisdiction,  the Obligated Party shall, within thirty (30)
days after such adjudication becomes final, pay, and satisfy such Claim.        

      (c) If the Obligated Party fails to contest and defend against,  or to pay
and satisfy the Claim within such thirty (30) days, or if a separate defense may
be asserted or there exists a conflict in defenses,  then the Indemnified  Party
may, at its option, with counsel of its or his choice contest and defend against
and/or settle,  pay and satisfy,  with the consent of the Obligated Party, which
consent may not be unreasonably withheld, the Claim, in which case the Obligated
Party  shall  immediately  reimburse  the  Indemnified  Party  for all costs and
expenses (such as, but not limited to, actual attorneys' fees and disbursements)
incurred by                                                                     

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the  Indemnified  Party in contesting  and defending  against  and/or paying and
satisfying the Claim and enforcing the  indemnification,  together with interest
on such costs and expenses from the time incurred until the time paid at the per
annum rate equal to the prime  rate  announced  from time to time by UBS AG, New
York Branch. If UBS AG, New York Branch, does not announce such rate or does not
exist,  then  such rate  shall be equal to the prime  rate set forth in the Wall
Street Journal.                                                                 

      (d) Each party agrees to  cooperate  with the  reasonable  requests of the
other party in  contesting,  defending,  paying,  satisfying,  or  appealing  an
adjudication rendered with respect to any Claim.                                

      (e)  If  the  Indemnified  Party  recovers  from a  third  party  (through
insurance or otherwise)  any amounts with respect to which the  Obligated  Party
made payments to or for the account of the Indemnified  Party under this Section
11, the  Indemnified  Party shall  promptly pay over to the Obligated  Party any
amounts so recovered, net of collection costs.                                  

      11.5   Limitation  on  the  Company's   Liability  for  Certain   Matters.
Notwithstanding  anything  contained  herein or in any  closing  document to the
contrary,  the Company shall have no liability to GMPTS for any of the Company's
indemnity  obligation  hereunder  unless,  until,  and only to the  extent  that
GMPTS's  damages and claims  resulting from the indemnity  hereunder  exceed the
total sum of $100,000;  provided,  however, that such limitation shall not apply
to any claim under Section 11.1(h) and (i).                                     

      11.6 Limitation on GMPTS' Liability for Certain  Matters.  Notwithstanding
anything  contained  herein or in any closing  document to the  contrary,  GMPTS
shall have no liability to the Company for any of GMPTS's  indemnity  obligation
hereunder  unless,  until and only to the extent that the Company's  damages and
claims resulting from the indemnity hereunder exceed the total sum of $100,000. 

     11.7 Punitive and Consequential Damages.  Neither any Company Party nor any
GMPTS Party shall be entitled to recover from the other under the  provisions of
this                                                                            

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Agreement for any punitive,  exemplary,  or consequential damages resulting from
any breach of this Agreement.                                                   

      11.8 Mutual Release. (a) As further consideration for GMPTS's execution of
this Agreement,  the Company,  and its successors and assigns, as of the Closing
Date, hereby absolutely and irrevocably  waive,  release,  and forever discharge
GMPTS  from any and all  claims,  rights,  demands,  actions,  suits,  causes of
action,   damages,   counterclaims,   defenses,   losses,  costs,   obligations,
liabilities  and  expenses of every kind or nature other than any that may arise
in connection  with the Transaction or this Agreement  (collectively,  "Released
Claims"),  known or unknown,  suspected  or  unsuspected,  fixed or  contingent,
foreseen or unforeseen, arising out of or relating directly to any circumstances
or state of facts pertaining to the Partnership Agreement or GMPTS's status as a
partner  in the  Company;  provided,  however,  that  the  foregoing  shall  not
constitute  a  release  of any of  GMPTS's  obligations  under  this  Agreement,
including its representations and warranties hereunder.                         
      (b)  As  further   consideration  for  the  Company's  execution  of  this
Agreement, GMPTS, and its successors and assigns, as of the Closing Date, hereby
absolutely and irrevocably  waive,  release,  and forever  discharge the Company
from any and all Released  Claims,  known or unknown,  suspected or unsuspected,
fixed or contingent, foreseen or unforeseen, arising out of or relating directly
to any  circumstances or state of facts pertaining to the Partnership  Agreement
or  GMPTS's  status as a partner in the  Company;  provided,  however,  that the
foregoing  shall not  constitute a release of any of the  Company's  obligations
under  this  Agreement,  or  relieve it of its  representations  and  warranties
hereunder.                                                                      

 11.9 Survival. The provisions of this Article 11 shall survive Closing.

ARTICLE 12 - MISCELLANEOUS

      12.1 Counterparts. This Agreement may be executed in counterparts, each of
which  will be  deemed  to be an  original,  but  both of  which  together  will
constitute one and the same instrument.                                         

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      12.2  Assignment.  Neither this  Agreement  nor any rights or  obligations
under this Agreement may be assigned  directly or indirectly by either party, by
operation of law or otherwise,  without the other party's prior written consent,
except  that GMPTS may assign all of its right,  title,  and  interest in and to
this Agreement,  in whole but not in part, to an Affiliate of The General Motors
Hourly-Rate  Employees Pension Trust and The General Motors  Retirement  Program
for Salaried Employees Trust,  provided (a) the assignee remains an Affiliate of
The General Motors  Hourly-Rate  Employees  Pension Trust and The General Motors
Retirement Program for Salaried Employees Trust until the Closing has been fully
completed, (b) the assignee expressly assumes for the benefit of the Company all
of GMPTS's  obligations  and liabilities  hereunder,  and (c) GMPTS shall not be
released of any of its obligations or liabilities hereunder.                    

      12.3  Waiver.  To the extent  permitted  by law,  all rights and  remedies
existing or arising under,  or related to, this Agreement are cumulative to, and
not exclusive of, any rights or remedies  otherwise  available under  applicable
law. No failure on the part of either party to exercise, or delay in exercising,
any  right  will be  deemed a waiver of such  right,  and no  single or  partial
exercise of a right will  preclude any further or other  exercise of that or any
other rights.                                                                   

      12.4 No  Recordation.  The Company and GMPTS each agrees that neither this
Agreement  nor any  memorandum  or notice  hereof shall be recorded  against any
Exchange  Property  and GMPTS agrees not to file any notice of pendency or other
instrument  (other  than a  judgment)  against the  Exchange  Properties  or any
portion thereof in connection  herewith  (except in the event GMPTS commences an
action for specific performance of the Company's obligations hereunder).        

      12.5  Blue-Pencil.  If any provision of this Agreement is determined to be
invalid,  illegal, or unenforceable,  the remaining provisions of this Agreement
will  remain in full force and  effect,  provided  that the  economic  and legal
substance of the transactions contemplated                                      

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by this  Agreement  is not affected in any manner  materially  adverse to either
party. To the extent permitted by law, the Company and GMPTS waive any provision
of law  that  renders  any  provision  of this  Agreement  unenforceable  in any
respect.                                                                        

      12.6  Governing  Law.  This  Agreement  is  governed  by,  and  is  to  be
interpreted and enforced under and in accordance  with, the internal laws of the
State of New York.                                                              

      12.7 Notices.  All notices,  demands,  requests,  or other  communications
which may be or are required to be given, served, or sent by either party to the
other  party  pursuant to this  Agreement  shall be in writing and shall be hand
delivered or sent by reputable overnight courier. Each notice,  demand,  request
or  communication  which shall be  delivered  in the manner  described  shall be
deemed sufficiently given, served, sent, received, or delivered for all purposes
at such time as it is delivered to the  addressee,  if hand  delivered,  and one
Business Day after  depositing with a reputable  overnight  courier,  or at such
time as delivery is refused by the addressee upon  presentation.  Subject to the
above, all notices, demands, requests or other communications shall be addressed
as follows:                                                                     

If to TRG:                                              

The Taubman Realty Group Limited Partnership
200 East Long Lake Road                     
Bloomfield Hills, Michigan 48304            
Attention:  Mr. Robert S. Taubman           

With a copy (which shall not constitute notice) to:     

Miro Weiner & Kramer                        
500 North Woodward Avenue                   
Suite 100                                   
Bloomfield Hills, Michigan 48304            
Attention:  Jeffrey H. Miro, Esq.           

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If to GMPTS:                                            

GMPTS Limited Partnership                   
c/o AEW Capital Management                  
225 Franklin Street                         
Boston, Massachusetts 02110                 
Attention:  Joseph F. Azrack                

GMPTS Limited Partnership                   
c/o AEW Capital Management                  
225 Franklin Street                         
Boston, Massachusetts 02110                 
Attention:  Grant Monahon                   

With a copy (which shall not constitute notice) to:     
Cadwalader, Wickersham & Taft               
100 Maiden Lane                             
New York, New York 10038                    
Attention:  Dennis Block                    

      12.8 Survival.  The terms and provisions of this Agreement shall terminate
and be deemed  merged into the document  delivered at Closing  unless  expressly
provided  herein  to the  contrary,  in  which  case  the  specified  terms  and
provisions  shall survive  until the  expiration  of the  applicable  statute of
limitations,  except  where a shorter  period of time is  provided  herein.  The
provisions of this Article 12 shall survive Closing.                            

      12.9  Exchange  Properties  Held  for  Investment.  GMPTS  was  one of the
founders of the Company,  has held its interest in the Company as an investment,
and has  advised  the  Company  that it expects to obtain and hold the  Exchange
Properties for investment,  subject to decisions in the ordinary  course.  GMPTS
shall have no liability to the Company under this Section 12.9.                 

      12.10 Binding  Effect.  This  Agreement is binding upon, and inures to the
benefit of, the parties  hereto and their  respective  permitted  successors and
permitted assigns.                                                              

      12.11  Captions.  The captions  used  throughout  this  Agreement  are for
convenience only and are not to be used in the interpretation or construction of
this Agreement.                                                                 

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     12.12 Entire Agreement.  This Agreement constitutes the entire agreement of
the parties with respect to the subject matter hereof.                          

      IN WITNESS WHEREOF, GMPTS and the Company have entered into this Agreement
as of the date first written above.                                             

                                GMPTS LIMITED PARTNERSHIP, a
                                Delaware limited partnership

                                       By:   GMPTS Corporation, a Delaware
                                            corporation, general partner

                                        By:/s/ Ronald M. Pastore
                                                   -----------------------------

                                          Its:  Authorized Signatory

                                    THE TAUBMAN REALTY GROUP LIMITED
                                   PARTNERSHIP, a Delaware limited
               partnership

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

                              Its:  Authorized Signatory

65

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘8-K’ Filing		Date		First		Last			Other Filings
Filed on:		10/15/98
For Period End:		9/30/98		21		45			10-Q,  8-K
		8/3/98		14
		7/31/98		21		41
		7/16/98		12
		7/13/98		16		24
		6/30/98		21					10-Q
		1/1/98		27		44
		12/31/97		21					10-K,  11-K
		9/30/97		17		39			10-Q
		12/31/94		21
		3/4/94		49
		11/30/92		51
									List all Filings