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                           CONSTRUCTION LOAN AGREEMENT


                                      among


                TAUBMAN MACARTHUR ASSOCIATES LIMITED PARTNERSHIP,
                                  as Borrower,




                    BAYERISCHE HYPOTHEKEN- UND WECHSEL-BANK,
                     AKTIENGESELLSCHAFT, NEW YORK BRANCH and
                   THE OTHER BANKS AND FINANCIAL INSTITUTIONS
                        FROM TIME TO TIME PARTIES HERETO,
                                   as Lenders,


                                       and


                     BAYERISCHE HYPOTHEKEN- UND WECHSEL-BANK
                      AKTIENGESELLSCHAFT, NEW YORK BRANCH,
                                    as Agent






                          Dated as of October 28, 1997





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<PAGE>



                                TABLE OF CONTENTS


                                                                            Page


SECTION 1.  DEFINITIONS..................................................  2
        1.1  Defined Terms...............................................  2
        1.2  Other Definitional Provisions............................... 17

SECTION 2.  AMOUNT AND TERMS OF COMMITMENTS.............................. 17
        2.1  Agreement to Lend and to Borrow; Notes...................... 17
        2.2  Determination of Amounts of Loan Advances................... 18
        2.3  Budget Evaluation........................................... 19
        2.4  Budget Reallocation and Adjustments......................... 19
        2.5  Use of Proceeds............................................. 20

SECTION 3.  BORROWING PROCEDURES......................................... 20
        3.1  Procedure for Borrowing..................................... 20
        3.2  First Advance and Subsequent Advances....................... 20
        3.3  Waivers of Conditions....................................... 21
        3.4  Advances to Pay Interest.................................... 21
        3.5  Optional Prepayments........................................ 22
        3.6  Conversion and Continuation Options......................... 22
        3.7  Minimum Amounts of Tranches; Maximum Number of
                Tranches................................................. 23
        3.8  Interest Rates and Payment Dates............................ 23
        3.9  Computation of Interest and Fees............................ 23
        3.10  Inability to Determine Interest Rate....................... 24
        3.11  Pro Rata Treatment and Payments............................ 24
        3.12  Illegality................................................. 25
        3.13  Legal Requirements......................................... 25
        3.14  Taxes...................................................... 27
        3.15  Indemnity.................................................. 28
        3.16  Substitution of Lenders.................................... 29
        3.17  Extension of Maturity Date................................. 30

SECTION 4.  REPRESENTATIONS AND WARRANTIES............................... 31
        4.1  Formation and Existence..................................... 31
        4.2  Power and Authority......................................... 32
        4.3  Authorization; Enforceable Obligations...................... 32
        4.4  No Litigation............................................... 32
        4.5  Consents, Approvals, Authorizations, Etc.................... 32
        4.6  No Legal Bar................................................ 33
        4.7  Compliance with Building Codes, Zoning Laws,
                Etc...................................................... 33
        4.8  No Default.................................................. 33
        4.9  Taxes....................................................... 33
        4.10  Availability of Utilities.................................. 33
        4.11  Brokerage.................................................. 33
        4.12  Permits, Etc............................................... 34
        4.13  Financial Statements....................................... 34
        4.14  ERISA...................................................... 34
        4.15  Solvency................................................... 35


                                        i

<PAGE>


                                                                            Page


        4.16  Roads...................................................... 35
        4.17  REA and Leases............................................. 35
        4.18  Accuracy of Information; Full Disclosure................... 35
        4.19  Mall Site in Buildable Condition........................... 36
        4.20  Plans under REA............................................ 36

SECTION 5.  AFFIRMATIVE COVENANTS........................................ 36
        5.1  Construction................................................ 36
        5.2  Performance under Other Agreements.......................... 37
        5.3  No Encroachments............................................ 37
        5.4  Application of Insurance and Condemnation Proceeds.......... 37
        5.5  Certain Notices............................................. 38
        5.6  Plan Changes................................................ 38
        5.7  Indemnification............................................. 39
        5.8  Expenses.................................................... 39
        5.9  Construction Schedule....................................... 40
        5.10  Inspection of Books and Records............................ 40
        5.11    Movement of Unincorporated Materials..................... 40
        5.12  Inspection Reports......................................... 41
        5.13  Financial Statements; Other Information.................... 41
        5.14  Administration Fee......................................... 42
        5.15  Leasing.................................................... 42

SECTION 6.  NEGATIVE COVENANTS........................................... 43
        6.1  Additional Debt............................................. 43
        6.2  Changes in Plans............................................ 43
        6.3  ............................................................ 43
        6.4  Changes in Agreements....................................... 43
        6.5  Transactions with Affiliates................................ 44
        6.6  Appointment of Manager; Amendment of Third Party Management
                Agreement. .............................................. 44

SECTION 7.  CONDITIONS PRECEDENT TO FIRST ADVANCE........................ 44
        7.1  Closing Documents........................................... 44
        7.2  Fees........................................................ 48
        7.3  Agency Construction Funding................................. 49
        7.4  Accounting.................................................. 49
        7.5  Representations and Warranties.............................. 49
        7.6  No Default or Event of Default.............................. 49
        7.7  Notices of Leasehold Mortgage............................... 49
        7.8   Surety Bonds; Construction Contracts....................... 49
        7.9  Additional Matters.......................................... 49

SECTION 8.  CONDITIONS PRECEDENT TO SUBSEQUENT ADVANCES.................. 49


                                       ii

<PAGE>


                                                                            Page


        8.1  All Subsequent Advances..................................... 49
        8.2  Completion of Improvements.................................. 52

SECTION 9.  EVENTS OF DEFAULT............................................ 53
        9.1  Events of Default........................................... 53
        9.2  Lenders' Right to Apply Loan Proceeds....................... 56
        9.3  Lenders' Right to Stop Advancing Funds and to Accelerate
             the Loans................................................... 57
        9.4  Lenders' Right to Complete.................................. 57
        9.5  Power of Attorney........................................... 58

SECTION 10.  THE AGENT................................................... 58
        10.1  Appointment................................................ 58
        10.2  Delegation of Duties....................................... 58
        10.3  Exculpatory Provisions..................................... 59
        10.4  Reliance by Agent.......................................... 59
        10.5  Notice of Default.......................................... 59
        10.6  Non-Reliance on Agent and Other Lenders.................... 60
        10.7  Indemnification............................................ 60
        10.8  Agent in Its Individual Capacity........................... 61
        10.9  Successor Agent............................................ 61
        10.10  Rights of Agent and the Lenders........................... 61
        10.11  Participation.  .......................................... 63
        10.12  Liability of Agent........................................ 64

SECTION 11.  GENERAL CONDITIONS.......................................... 65
        11.1  No Waivers................................................. 65
        11.2  Lenders and Agent Sole Beneficiary......................... 65
        11.3  Notices.................................................... 65
        11.4  Modifications.............................................. 66
        11.5  Rights Cumulative.......................................... 66
        11.6  Sign....................................................... 67
        11.7  Schedules.................................................. 67
        11.8  Successors and Assigns..................................... 67
        11.9  Governing Law.............................................. 67
        11.10  Submission to Jurisdiction................................ 67
        11.11  WAIVERS OF JURY TRIAL..................................... 68
        11.12  Captions.................................................. 68
        11.13  Adjustments; Set-off...................................... 68
        11.14  Counterparts.............................................. 68
        11.15  Severability.............................................. 69
        11.16  Integration............................................... 69
        11.17  Cure Rights of Agency..................................... 69
        11.18  Exculpation............................................... 69
        11.19  Non-Recourse to TRG Partners.............................. 70


                                       iii

<PAGE>


SCHEDULES

Schedule 1      Borrower Construction Plans


EXHIBITS

Exhibit A       Form of Borrowing Certificate and Requisition
Exhibit B       Form of Note
Exhibit C       Form of Assignment and Acceptance
Exhibit D       Solvency Certificate





                                       iv

<PAGE>





                           CONSTRUCTION LOAN AGREEMENT
                           ---------------------------


            THIS  AGREEMENT  is made as of the 28th day of  October,  1997 among
TAUBMAN MACARTHUR ASSOCIATES LIMITED PARTNERSHIP, a Delaware limited partnership
("Borrower"),  BAYERISCHE HYPOTHEKEN- UND WECHSEL-BANK  AKTIENGESELLSCHAFT,  NEW
YORK  BRANCH,   the  New  York  branch  of  a  German  banking   corporation  as
administrative  agent (in such  capacity,  the "Agent") for itself and the other
banks and  financial  institutions  from time to time parties to this  Agreement
(the Agent,  together  with such other banks and financial  institutions,  being
sometimes referred to collectively as "Lenders" and individually as a "Lender").


                                    RECITALS
                                    --------

            A. The Borrower is developing and  constructing a regional  shopping
mall in the Downtown  North Area of Norfolk,  Virginia to be known as "MacArthur
Center",  containing  approximately  930,000  square feet of gross leasable area
(the  "Mall"),  which Mall may  include an  entertainment  center.  The  Norfolk
Redevelopment  and  Housing  Authority  in its  capacity  as  the  Redevelopment
Commission  of the City of Norfolk  (the  "Agency")  is  leasing  to  Borrower a
portion  of the  Mall,  as more  particularly  described  in  Schedule  A to the
Mortgage (the "Leased Premises"). The Mall is to be anchored by Nordstrom, Inc.,
which will lease its site (the  "Nordstrom  Site")  directly from the Agency and
Dillards,  Inc.  which will lease its site (the "Dillards  Site")  directly from
Borrower.

            B. Borrower has  requested  Lenders to make loans to Borrower in the
aggregate  principal  amount not to exceed  $150,000,000 in order to provide the
financing  for (i)  construction  of  improvements  to be  located on the Leased
Premises and (ii) certain  other costs,  as described in the Budget  referred to
below.

            C. Subject to the terms and  conditions of this  Agreement,  Lenders
will make the loans to Borrower.






<PAGE>


                                                                               2



                                    AGREEMENT
                                    ---------

          SECTION 1. DEFINITIONS
                     -----------

          1.1 Defined  Terms.  For the  purposes of this  Agreement  each of the
following terms shall have the meaning given such term below:


          Administrative Fee: As defined in Section 3.14.

          Affected Bank: As defined in Section 3.16

          Agent:  As defined in the  Preamble,  including  any  successor  agent
     appointed pursuant to this Agreement.

          Affiliate:   As  to  any  Person,  any  other  Person  (other  than  a
     subsidiary) which, directly or indirectly,  is in control of, is controlled
     by, or is under common  control  with,  such  Person.  For purposes of this
     definition  "control" of a Person means the power,  directly or indirectly,
     either to (a) vote 10% or more of the  securities  having  ordinary  voting
     power for the  election of  directors of such Person or (b) direct or cause
     the  direction of the  management  and policies of such Person,  whether by
     contract or otherwise.

          Agency: As defined in the Recitals.

          Agency  Construction  Plans:  Any schematic plan,  design  development
     document,  plan or  specification  delivered  by the  Agency to Agent  with
     respect to the Public Components (as defined in the Project Agreement).

          Agency  Estoppel:  The  certificate  dated  as of  the  date  of  this
     Agreement  addressed  to the Agent for the benefit of the Lenders  from the
     Agency in which the Agency  certifies  the amount it has funded to date for
     completion  of the Agency's  Work and other amounts which it is required to
     fund  pursuant  to the  Project  Documents  and  other  matters  reasonably
     requested by the Agent.

          Agency  Documents:  The collective  reference to the Project Agreement
     and the Mall Lease.

          Agency's Work:  shall mean the design and  construction  of the Public
     Components (as defined in the Project Agreement).

          Agreement:  This  Construction  Loan Agreement,  as it may be amended,
     supplemented or otherwise modified from time to time.




<PAGE>


                                                                               3



          Anchor Leases:  The collective  reference to the Dillards  Lease,  the
     Nordstrom's Lease, the Nordstrom  Supplement,  the Dillards' Supplement and
     any lease or other  agreement  entered  into by Borrower  with a department
     store which occupies the Third Anchor Parcel (as defined in the Mortgage).

          Applicable Margin:  with respect to each Type of Loan at any date, the
     applicable percentage per annum set forth below:


  Eurodollar Loans              1.20%

  Prime Rate Loans              0.50%



     provided,  if during any  Interest  Period the  Negative  Rating  Condition
     exists,  the Applicable  Margin shall be increased by 0.15% with respect to
     the  Guarantied  Principal for such  Interest  Period (and remain as stated
     above with respect to the Non-Guarantied Principal) and provided,  further,
     during the Second  Extension  Period,  the then  Applicable  Margin  (after
     giving  effect to any  increase  pursuant  to the proviso  above)  shall be
     increased by 0.15% with respect to the entire principal amount of the Loans
     outstanding.

          Architect:  Hobbs &  Black  Associates,  Inc.  or  such  architect  as
     Borrower  may engage  from time to time with the prior  written  consent of
     Agent if required under the terms of this Agreement.

          Architect's  Agreement:  The Agreement  dated January 15, 1996 between
     Borrower  and the  Architect  as the same may be amended,  supplemented  or
     otherwise  modified  from time to time with the prior  written  consent  of
     Agent in accordance with the terms of this Agreement.

          Architect's  Certificate:  A certificate (which shall include standard
     form G-702) by the  Architect  delivered to the Agent on or before the date
     of the initial  advance of the Loan,  satisfactory in form and substance to
     Agent.

          Assignee: As defined in subsection 10.11(b).

          Assignment  of Leases:  The  Assignment of Leases dated as of the date
     this  Agreement  made  by  Borrower  to  Agent,   as  it  may  be  amended,
     supplemented or otherwise modified from time to time.

          Automatic Acceleration Default: As defined in the Mortgage.

          Available Commitment: As to any Lender at any time, an amount equal to
     the excess, if any, of (a) the amount of



<PAGE>


                                                                               4



     such Lender's  Commitment  over (b) the aggregate  principal  amount of all
     Loans  theretofore  made by such Lender,  provided  that from and after the
     Termination Date, the Available Commitment shall equal zero.

          Borrower: As defined in the Preamble.

          Borrowing Certificate and Requisition:  A certificate by a Responsible
     Officer,  delivered to Agent on each Borrowing Date,  substantially  in the
     form of Exhibit A.

          Borrowing  Date:  Any  Business  Day  (or  LIBOR  Business  Day  for a
     Eurodollar Loan) specified in a notice pursuant to subsection 3.1 as a date
     on which Borrower requests Lenders to make Loans hereunder.

          Borrower Construction Plans: The plan, design development document and
     specifications  delivered  by Borrower to Agent with respect to the Private
     Components  (as defined in the Project  Agreement),  a schedule of which is
     attached hereto as Schedule 1.

          Borrower  Documents:   The  collective  reference  to  the  Management
     Agreement,  the Partnership  Agreement,  the REA, the Dillards' Supplement,
     the Nordstrom Supplement and the Construction Documents.

          Borrower's Work: Shall mean the design and Construction of the Private
     Components (as defined in the Project Agreement).

          Budget:  The budget previously  delivered to and approved by Agent, as
     it may be amended,  supplemented or otherwise modified from time to time in
     accordance with this Agreement.

          Budget Deficit: As defined in subsection 2.3.

          Business  Day:  A day other  than a  Saturday,  Sunday or other day on
     which  commercial  banks in New York City are authorized or required by law
     to close.

          Code: The Internal Revenue Code of 1986, as amended from time to time.

          Collateral:  The collective  reference to the Leased  Premises and any
     other property encumbered by the Security Documents.

          Commitment:  As to any Lender,  the obligations of such Lender to make
     Loans to Borrower hereunder in an aggregate  principal amount not to exceed
     the amount set forth  opposite such Lender's name on the signature  page to
     this Agreement.




<PAGE>


                                                                               5



          Commitment Amount: At any time, the aggregate  principal amount of the
     Loans outstanding at such time plus the sum of the Available  Commitment of
     each Lender at such time.

          Commitment  Percentage:  As to any Lender at any time,  the percentage
     which  such  Lender's   Commitment   then   constitutes  of  the  aggregate
     Commitments  (or, at any time after the  Commitments  shall have expired or
     terminated,  the percentage  which the aggregate  principal  amount of such
     Lender's  Loans then  outstanding  constitutes  of the aggregate  principal
     amount of the Loans then outstanding).

          Commitment  Period:  The period from and  including the date hereof to
     but  not  including  the  Termination  Date  or  such  earlier  date as the
     Commitments shall terminate as provided herein.

          Commonly  Controlled  Entity: An entity,  whether or not incorporated,
     which is under  common  control  with the  Borrower  within the  meaning of
     Section 4001 of ERISA or is part of a group which includes the Borrower and
     which is treated as a single employer under Section 414 of the Code.

          Completion or Completed: Shall mean, with respect to the Improvements,
     completion of the  Improvements  in accordance  with each of the conditions
     set forth in Section 8.2.

          Completion  Guaranty:  The  Completion  Guaranty  dated  of even  date
     herewith  made by  Guarantor  in  favor  of  Agent,  as it may be  amended,
     supplemented or otherwise modified from time to time.

          Construction  Agreement:  The  agreement  dated on or  about  the date
     hereof,  between Borrower and the Construction  Manager,  providing for the
     construction of the Improvements,  as the same may be amended, supplemented
     or otherwise  modified  from time to time in  accordance  with the terms of
     this Agreement.

          Construction  Documents:  The collective reference to the Construction
     Agreement,  the  Architect's  Agreement,  the Engineer's  Agreement and the
     Permits.

          Construction  Manager:  Sordoni Skanska Construction Co. or such other
     construction  manager or general  contractors as may be engaged by Borrower
     from time to time in connection with the  construction of the  Improvements
     with the Agent's prior written approval if required under the terms of this
     Agreement.

          Construction Manager's Certificate:  A certificate by the Construction
     Manager (which shall include standard form



<PAGE>


                                                                               6



     G-702)  delivered to the Agent on or before the date of the initial advance
     of the Loan, satisfactory in Form and substance to Agent.

          Consulting Professional:  Inspection & Valuation International,  Inc.,
     or such other architectural or engineering consultant as Lenders may engage
     from time to time to  examine  the  Plans,  changes in the Plans and Budget
     cost breakdowns and estimates, to make periodic inspections of the progress
     on  construction  of the  Improvements on Lenders' behalf and to advise and
     render reports to Lenders.

          Contractual  Obligation:  As to  any  Person,  any  provision  of  any
     security  issued  by  such  Person  or  of  any  agreement,  instrument  or
     undertaking  to which  such  Person is a party or by which it or any of its
     property is bound.

          Default: Any of the events specified in subsection 9.1, whether or not
     any  requirement  for the giving of notice,  the lapse of time, or both, or
     any other condition has been satisfied.

          Dillards: Dillards Department Stores, Inc., a Delaware corporation.

          Dillards'  Improvements:  The  improvements  constituting  a  Dillards
     retail  department  store containing  approximately  260,000 square feet of
     space  to be  constructed  on the  Dillards'  Site  and to be  operated  by
     Dillards.

          Dillards'  Lease:  The Land  Sublease  dated as of  November  22, 1996
     between Dillards and the Borrower for the occupancy of the Dillards' Site.

          Dillards' Site: As defined in the Recitals.

          Dillards' Supplement:  The Supplemental Agreement dated as of November
     22, 1996 by and between Borrower and Dillards.

          Dollars  and $:  Dollars in lawful  currency  of the United  States of
     America.

          Engineer:  Michael  Baker Jr.,  Inc or such other  engineer  as may be
     engaged by Borrower from time to time in connection  with the  construction
     of the  Improvements  with the Agent's prior  written  approval if required
     under this Agreement.

          Engineer's Agreement:  The agreement dated on or about the date hereof
     between Borrower and the Engineer, as the same may be amended, supplemented
     or otherwise  modified from time to time with the prior written  consent of
     Agent if required under this Agreement.



<PAGE>


                                                                               7




          Engineer's  Certificate:  A certificate from the Engineer delivered to
     the  Agent  on or  before  the date of the  initial  advance  of the  Loan,
     satisfactory in form and substance to Agent.

          Environmental  Indemnity:  The Environmental Indemnity Agreement dated
     as of the date of this  Agreement  made by Borrower  and the  Guarantor  in
     favor of  Lenders as the same may be  amended,  supplemented  or  otherwise
     modified from time to time.

          ERISA: The Employee Retirement Income Security Act of 1974, as amended
     from time to time.

          ERISA Plan: At a particular  time, any employee  benefit plan which is
     covered  by ERISA  and in  respect  of which  the  Borrower  or a  Commonly
     Controlled  Entity is (or, if such plan were terminated at such time, would
     under  Section 4069 of ERISA be deemed to be) an  "employer"  as defined in
     Section 3(5) of ERISA.

          Eurodollar  Loans:  Loans the rate of interest  applicable to which is
     based upon the Eurodollar Rate.

          Eurodollar  Rate:  with  respect  to each  Eurodollar  Loan  during  a
     specified  Interest  Period,  the rate of  interest  per annum  obtained by
     dividing  (i) the  Eurodollar  rate  commencing  on the  first  day of such
     Interest Period, appearing on Page 3750 of the Telerate Service as of 11:00
     A.M.,  London time,  two LIBOR Business Days prior to the beginning of such
     Interest Period by (ii) a percentage equal to 100% minus the stated maximum
     rate (expressed as a percentage,  rounded upward to the next 1/100th of one
     percent) of all reserve  requirements  (including any marginal,  emergency,
     supplemental,  special or other reserves)  applicable as of a date which is
     two LIBOR  Business Days prior to the beginning of such Interest  Period to
     any member bank of the Federal  Reserve System in respect of  "Eurocurrency
     liabilities"  as defined in  Regulation  D (or any  successor  category  of
     liabilities  under  Regulation  D).  In the  event  that such rate does not
     appear on Page 3750 of the Telerate Service (or otherwise on such service),
     the  "Eurodollar  Rate"  shall be  determined  on the basis of the rates at
     which  deposits  in U.S.  dollars  are  offered  by four  major  banks (the
     "Reference  Banks") at or about 11:00 A.M., London time, two LIBOR Business
     Days prior to the beginning of such Interest Period,  to prime banks in the
     interbank  eurodollar market for delivery on the first day of such Interest
     Period,  for a  period  equal to such  Interest  Period,  and in an  amount
     comparable to the amount of its Eurodollar  Loan to be  outstanding  during
     such Interest  Period,  as adjusted for reserve  requirements  pursuant the
     previous  sentence.  Agent will request the principal London office of each
     of the Reference Banks to provide a quotation of its



<PAGE>


                                                                               8



     rate.  If at least  two such  quotations  are  provided,  the rate for that
     Interest Period will be the arithmetic mean of the quotations.

     If fewer than two quotations  are provided as requested,  the rate for that
     Interest  Period will be the  arithmetic  mean of the rates quoted by major
     banks in New York City, selected by Agent, at approximately 11:00 A.M., New
     York City time,  on the date that is two LIBOR  Business  Days prior to the
     beginning  of such  Interest  Period  for loans in U.S.  dollars to leading
     European banks for a period equal to such Interest Period, and in an amount
     comparable to the amount of its Eurodollar  Loan to be  outstanding  during
     such Interest  Period,  as adjusted for reserve  requirements  pursuant the
     above definition.

          Event of  Default:  Any of the events  specified  in  subsection  9.1,
     provided that any requirement for the giving of notice,  the lapse of time,
     or both, or any other condition, has been satisfied.

          Federal  Funds  Rate:  For any day,  the rate per  annum  equal to the
     weighted average of the rates on overnight federal funds  transactions,  as
     published  by the Federal  Reserve  Bank of New York for such day  provided
     that (a) if such day is not a Business Day, the Federal Funds Rate for such
     day shall be such rate on such  transactions on the  immediately  preceding
     Business Day as so published on the next  succeeding  Business Day, and (b)
     if such rate is not so published  for any day which is a Business  Day, the
     Federal Funds Rate for such day shall be the average of the rates quoted to
     Agent by three federal funds brokers of recognized  standing selected by it
     on such day on such transactions.

          Financing  Lease:  Any  lease  of  property,  real  or  personal,  the
     obligations  of the lessee in respect of which are  required in  accordance
     with GAAP to be capitalized on a balance sheet of the lessee.

          First Extended Maturity Date: As defined in Section 3.17.

          First Extension:  The extension of the Initial Maturity Date until the
     First Extended Maturity Date pursuant to Section 3.17.

          Force Majeure Delay: Any cause or event which is beyond the reasonable
     control and not due to the fault or negligence  of Borrower,  which delays,
     prevents or prohibits  the  construction  of the  Improvements,  including,
     without  limitation,  acts of God or the  elements,  fire,  strikes,  labor
     disputes, delays in delivery of material and disruption of shipping.




<PAGE>


                                                                               9



          GAAP: Generally accepted accounting principles in the United States of
     America in effect from time to time.

          Garage Agreement: as defined in the definition of REA.

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

          Guarantied Obligations: As defined in the Payment Guaranty.

          Guarantied Principal: As defined in the Payment Guaranty.

          Guaranties:  The collective  reference to (i) the Completion Guaranty,
     (ii) the Payment Guaranty and (iii) the Environmental Indemnity.

          Guarantor:  The Taubman Realty Group Limited  Partnership,  a Delaware
     limited Partnership.

          Guaranty Percentage: As defined in the Payment Guaranty.

          Hypo: Bayerische Hypotheken-Und Wechsel-Bank  Aktiengesellschaft,  New
     York Branch.

          Improvements:  The  Borrower's  Work to be  constructed  on the Leased
     Premises in accordance with Borrower Construction Plans.

          Indebtedness:  Of any Person at any date, means,  without  duplication
     (a) all  indebtedness of such Person for borrowed money or for the deferred
     purchase price of property or services (including trade  obligations),  (b)
     all  obligations of such Person as the lessee under Financing  Leases,  (c)
     current  liabilities in respect of unfunded vested benefits under any ERISA
     Plan,  (d)  obligations  under  letters of credit issued for the account of
     such Person, (e) obligations under bankers' or trade acceptance facilities,
     (f) all guarantees of such Person of any  Indebtedness or other  obligation
     of any other Person,  (g) all  endorsements  (other than for  collection or
     deposit  in  the  ordinary   course  of  business)  and  other   contingent
     obligations  to purchase any of the items included in this  definition,  to
     provide  funds  for  payment,  to supply  funds to invest in any  Person or
     otherwise to assure a creditor against loss, (h) all obligations secured by
     any Lien on any  property  owned by such Person even though such Person has
     not assumed or otherwise  become  liable for the payment  thereof,  (i) all
     obligations under any agreement  providing for contingent  participation or
     other hedging mechanisms with respect to



<PAGE>


                                                                              10



     interest on any other  indebtedness  of such  Person  payable on any of the
     items described above in this definition and (j) any other  indebtedness of
     such  Person  which is  evidenced  by a note,  bond,  debenture  or similar
     instrument.

          Initial Maturity Date: October 27, 2000.

          Insolvency: With respect to any Multiemployer Plan, the condition that
     such ERISA Plan is insolvent within the meaning of Section 4245 of ERISA.

          Insolvent: Pertaining to a condition of Insolvency.

          Interest Payment Date: The first Business Day of each calendar month.

          Interest Period: With respect to any Eurodollar Loan:

               (i)  initially,   the  period  commencing  on  the  borrowing  or
          conversion  date, as the case may be, with respect to such  Eurodollar
          Loan and ending one, two, three or six months (to the extent funds are
          available  for such  six-month  period)  thereafter,  as  selected  by
          Borrower in its notice of  borrowing or notice of  conversion,  as the
          case may be, given with respect thereto; and

               (ii)  thereafter,  each period  commencing on the last day of the
          immediately  preceding  Interest Period  applicable to such Eurodollar
          Loan and ending one, two, three or six months (to the extent funds are
          available  for such  six-month  period)  thereafter,  as  selected  by
          Borrower  by  irrevocable  notice to Agent not less than  three  LIBOR
          Business  Days  prior to the last  day of the  then  current  Interest
          Period with respect thereto;

     provided that, all of the foregoing provisions relating to Interest Periods
     are subject to the following:

               (A) if any Interest Period  pertaining to a Eurodollar Loan would
          otherwise end on a day that is not a LIBOR Business Day, such Interest
          Period  shall be extended to the next  succeeding  LIBOR  Business Day
          unless the result of such  extension  would be to carry such  Interest
          Period into another calendar month in which event such Interest Period
          shall end on the immediately preceding LIBOR Business Day;

               (B) any Interest  Period that would  otherwise  extend beyond the
          Maturity Date shall end on the Maturity Date; and

               (C) any Interest  Period  pertaining  to a  Eurodollar  Loan that
          begins on the last LIBOR Business



<PAGE>


                                                                              11



          Day of a calendar month (or on a day for which there is no numerically
          corresponding  day in the calendar  month at the end of such  Interest
          Period) shall end on the last LIBOR Business Day of a calendar month.

          Land:  the parcel of land demised by the Agency to Borrower  under the
     Mall Lease.

          Leased Premises: As defined in the Recitals.

          Leases:  All  subleases,  underlettings,   concession  agreements  and
     licenses of any  portion of the Leased  Premises,  now  existing or entered
     into in the future to which Borrower is a party.

          Legal  Requirement:  As to  any  Person,  any  law,  treaty,  rule  or
     regulation  or   determination  of  an  arbitrator  or  a  court  or  other
     Governmental  Authority,  in each case  applicable  to or binding upon such
     Person  or  any of its  property  or to  which  such  Person  or any of its
     property is subject.

          Lender or Lenders: As defined in the Preamble.

          LIBOR  Business Day: A day other than a Saturday,  Sunday or other day
     on which commercial banks in London,  England are authorized or required by
     law to close.

          Lien:  Any  mortgage,  pledge,  hypothecation,   assignment,   deposit
     arrangement,  encumbrance,  lien  (statutory  or  other),  charge  or other
     security interest or any preference,  priority or other security  agreement
     or preferential  arrangement of any kind or nature  whatsoever  (including,
     without limitation, any conditional sale or other title retention agreement
     and any Financing  Lease having  substantially  the same economic effect as
     any of the foregoing).

          Loan: Any loan made by any Lender pursuant to this Agreement.

          Loan Documents: The collective reference to this Agreement, the Notes,
     the Security Documents, the Guaranties, the Environmental Indemnity and all
     other  documents and  instruments  from time to time evidencing or securing
     the Loan.

          Major Agreements:  The collective  reference to the Project Documents,
     the  Construction  Documents  and the  Anchor  Leases,  as the  same may be
     amended,  supplemented,  modified  or  replaced  from time to time with the
     prior written consent of Agent in accordance with the terms hereof.




<PAGE>


                                                                              12



          Major Leases: Any lease or sublease of space by Borrower which demises
     in excess of 10,000 square feet.

          Mall: As defined in the Recitals.

          Mall Lease: The Deed of Ground Lease dated as of June 14, 1996 between
     the  Agency,  as lessor,  and  Borrower,  as lessee,  as it may be amended,
     supplemented or otherwise  modified with Lenders' prior written approval in
     accordance with subsection 6.4.

          Management  Agreement:   any  management  agreement  entered  into  by
     Borrower and Manager in accordance with the terms of this Agreement,  as it
     may be amended,  supplemented or otherwise  modified from time to time with
     Lenders' prior written approval in accordance with subsection 6.4.

          Manager: an entity engaged by Borrower from time to time in accordance
     with this Agreement to operate and lease the Mall.

          Material  Adverse  Effect:  A  material  adverse  effect  on  (a)  the
     business,  operations,   property,  financial  condition  or  prospects  of
     Borrower or  Guarantor  which would  materially  impair  Borrower's  or the
     Guarantor's  ability to perform its obligations under this Agreement or any
     of the other Loan  Documents  or any of the  Project  Documents  or (b) the
     validity or  enforceability  of any of the Loan  Documents  or the material
     rights or remedies of the Agent or the Lenders thereunder.

          Maturity Date: The Initial Maturity Date, the First Extended  Maturity
     Date or the Second Extended Maturity Date, whichever is applicable.

          Moody's: Moody's Investors Service, Inc. and its successors.

          Mortgage: The Leasehold Deed of Trust,  Assignment of Leases and Rents
     and  Security  Agreement  dated  as of the date of this  Agreement  made by
     Borrower to the trustee named  therein for the benefit of Agent,  as it may
     be amended, supplemented or otherwise modified from time to time.

          Multiemployer  Plan:  An ERISA Plan which is a  multiemployer  plan as
     defined in Section 4001(a)(3) of ERISA.

          Negative Rating Condition: At any time, (a) the Guarantied Obligations
     of the Loan is above  zero and (b) the  Guarantor  has a  long-term  senior
     unsecured debt rating of below BBB- by S&P and below Baa3 by Moodys.




<PAGE>


                                                                              13



     provided  that if S&P and/or  Moody's  shall cease to issue ratings of debt
     securities of Guarantor, then the Agent and the Borrower shall negotiate in
     good faith to agree upon a  substitute  rating  agency or agencies  (and to
     correlate the system of ratings of each substitute  rating agency with that
     of the  rating  agency  for which it is  substituting)  and (a) until  such
     substitute  rating agency or agencies are agreed upon, the existence of the
     Negative  Rating  Condition  shall be determined on the basis of the rating
     assigned by the other rating agency (or, if both S&P and Moody's shall have
     so  ceased to issue  such  ratings,  on the  basis of the  rating in effect
     immediately  prior thereto) and (b) after such substitute  rating agency or
     agencies are agreed upon,  the existence of the Negative  Rating  Condition
     shall be determined on the basis of the rating assigned by the other rating
     agency  and such  substitute  rating  agency or the two  substitute  rating
     agencies, as the case may be.

          Non-Excluded Taxes: As defined in subsection 3.14.

          Non-Guarantied Principal: As defined in the Payment Guaranty.

          Nordstrom: Nordstrom, Inc., a Washington corporation.

          Nordstrom  Improvements:   The  improvements   constituting  a  retail
     department store containing  approximately  160,000 square feet of space to
     be constructed on the Nordstrom Site and to be operated by Nordstrom.

          Nordstrom's  Lease:  The Lease dated as of November  22, 1996  between
     Nordstrom  and the  Agency  for the  occupancy  of the  Nordstrom  Site and
     improvements.

          Nordstrom's  Supplement:   The  Supplemental  Agreement  dated  as  of
     November 22, 1996 by and between Borrower and Nordstrom.

          Note or Notes:  The collective  reference to the Notes dated as of the
     date of this Agreement made by Borrower to the order of each Lender, as the
     same may be amended, supplemented, modified, extended, restated or replaced
     from time to time (including,  without  limitation,  any new or replacement
     notes  issued  to any  Lender  pursuant  to  subsection  10.11(d)  of  this
     Agreement).

          NPA: Norfolk Place Associates, L.P., a Virginia limited partnership.

          Outside  Completion  Date:  February 15, 2000 subject to extension for
     Force Majeure delays, but in no event later than March 10, 2000.

          Participants: As defined in subsection 10.11(a).



<PAGE>


                                                                              14




          Partnership  Agreement:   The  Agreement  of  Limited  Partnership  of
     Borrower  dated as of May 11, 1995, as it may be amended,  supplemented  or
     otherwise modified from time to time in accordance with Section 6.4(b).

          Payment  Guaranty:  The Payment  Guaranty dated as of the date of this
     Agreement,  as the same may be amended,  supplemented or otherwise modified
     from time to time.

          PBGC: The Pension Benefit Guaranty Corporation established pursuant to
     Subtitle A of Title IV of ERISA.

          Permits:  All  consents,  licenses and building  permits  required for
     construction,  completion,  occupancy and operation of the  Improvements in
     accordance with all Legal Requirements affecting the Project.

          Permitted Encumbrances: As defined in the Mortgage.

          Permitted Exceptions: As defined in the Mortgage.

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

          Plans: The collective  reference to the Agency  Construction Plans and
     Borrower  Construction  Plans,  as such  plans  and  specifications  may be
     amended, supplemented or otherwise modified from time to time in accordance
     with subsections 6.2 and 6.3.

          Prime Rate:  The rate of interest  publicly  announced  by Agent's New
     York Branch in New York, New York from time to time as its prime commercial
     lending rate. The prime  commercial  lending rate is not intended to be the
     lowest  rate of  interest  charged by such  Branch in  connection  with the
     extension of credit to debtors.

          Prime Rate Loans:  Loans the rate of interest  applicable  to which is
     based upon the Prime Rate.

          Project: The collective reference to the Land and the Improvements.

          Project Agreement: The Land Disposition and Development Contract dated
     May 31,  1994  between  the Agency and NPA as  assigned  by NPA to Borrower
     pursuant to an Assignment and Assumption  Agreement  dated May 11, 1995 and
     as amended by a First Amendment dated as of May 8, 1995, a Second Amendment
     dated November 13, 1995 and a Third  Amendment  dated March 11, 1996 and as
     it may be further amended,  supplemented or otherwise modified from time to
     time in accordance with subsection 6.4.



<PAGE>


                                                                              15




          Project  Documents:  The collective  reference to the Agency Documents
     and the Borrower Documents.

          REA: The collective  reference to (i) the Construction,  Operation and
     Reciprocal  Easement  Agreement  dated as of November 22, 1996 by and among
     Borrower,   Nordstrom,  Dillards  and  the  Agency  and  (ii)  the  Parking
     Development,  Operation and Maintenance  Agreement (the "Garage Agreement")
     dated as of June 14,  1996 by and  among the City,  the  Agency,  Borrower,
     Nordstrom and Dillards,  as each may be further  amended,  supplemented  or
     otherwise modified from time to time in accordance with subsection 6.4.

          Regal  Lease:  That  certain  Lease dated  February  12, 1997  between
     Borrower  and Regal  Cinema,  Inc,  as it may be amended,  supplemented  or
     otherwise modified from time to time.

          Register: As defined in subsection 10.11(c).

          Reorganization:  With respect to any Multiemployer Plan, the condition
     that such plan is in  reorganization  within the meaning of Section 4241 of
     ERISA.

          Reportable  Event:  Any of the events set forth in Section  4043(b) of
     ERISA,  other than those events as to which the thirty day notice period is
     waived under  subsections  .13,  .14, .16, .18, .19 or .20 of PBGC Reg. ss.
     2615.

          Required Lenders:  At any time, Lenders the Commitment  Percentages of
     which aggregate at least 66 2/3%.

          Rents:  All  rights of  Borrower  in  respect  of cash and  securities
     deposited  under  any  Lease  and the  right to  receive  and  collect  the
     revenues, income, rents, issues and profits of any Lease.

          Responsible Officer: Shire Rothbart,  Brian Lasher, Richard McGlinn or
     Mary Zebrowski or such other  individual as shall be named by a Responsible
     Officer by notice to Agent.

          S&P: Standard & Poor's Ratings Group and its successors.

          Second  Extension:  The extension of the First Extended  Maturity Date
     until the Second Extended Maturity Date pursuant to Section 3.17.

          Second Extension Period: As defined in Section 3.17.

          Security Agreement: The Security Agreement and Assignment of Contracts
     made by Borrower to Agent dated as



<PAGE>


                                                                              16



     of the  date  of  this  Agreement  as it may be  amended,  supplemented  or
     otherwise modified from time to time.

          Security  Documents:  The  collective  reference to the Mortgage,  the
     Assignment of Leases,  the Security  Agreement and all other documents from
     time to time  entered  into or  consented  to by Borrower  which secure the
     repayment of the Notes.

          Single  Employer  Plan: Any ERISA Plan which is covered by Title IV of
     ERISA, but which is not a Multiemployer Plan.

          Solvency  Certificate:  A  certificate  substantially  in the  form of
     Exhibit D.

          Solvent:  means,  when used with  respect to any Person,  that (1) the
     fair value of the property of such Person,  on a going  concern  basis,  is
     greater  than  the  total  amount  of   liabilities   (including,   without
     limitation,  contingent  liabilities) of such Person;  (2) the present fair
     saleable value of the assets of such Person,  on a going concern basis,  is
     not  less  than  the  amount  that  will be  required  to pay the  probable
     liabilities  of such  Person  on its  debts  as they  become  absolute  and
     matured;  (3) such Person does not intend to, and does not believe  that it
     will,  incur debts or  liabilities  beyond such Person's  ability to pay as
     such  debts and  liabilities  mature;  (4) such  Person is not  engaged  in
     business  or a  transaction,  and is not about to engage in  business  or a
     transaction, for which such Person's property would constitute unreasonably
     small capital after giving due consideration to the prevailing  practice in
     the  industry  in which such  Person is  engaged;  and (5) such  Person has
     sufficient resources,  provided that such resources are prudently utilized,
     to satisfy all of such Person's obligations. Contingent liabilities will be
     computed at the amount  that,  in light of all the facts and  circumstances
     existing  at such  time,  represents  the  amount  that can  reasonably  be
     expected to become an actual or matured liability.

          Termination  Date:  the date  that is six  months  after  the  Outside
     Completion Date.

          Title Company:  Lawyers Title Insurance  Company,  or such other title
     company as may be approved in writing by Agent.

          Tranche: The collective reference to Eurodollar Loans the then current
     Interest  Periods  with  respect to all of which begin on the same date and
     end on the same later date (whether or not such Loans shall originally have
     been made on the same  day);  Tranches  may be  identified  as  "Eurodollar
     Tranches".




<PAGE>


                                                                              17



          Transferee: As defined in subsection 11.8(f).

          Trust Property: As defined in the Mortgage.

          Type: As to any Loan,  its nature as a Prime Rate Loan or a Eurodollar
     Loan.

          Unincorporated  Materials:  Materials  purchased or  manufactured  for
     incorporation  in the  Improvements  but, at the time an advance  under the
     Loan is  made  to pay  the  cost  therefor,  not  yet  incorporated  in the
     Improvements.

          1.2 Other  Definitional  Provisions.  (a) Unless  otherwise  specified
therein,  all terms defined in this  Agreement  shall have the defined  meanings
when used in the Notes or any  certificate  or other  document made or delivered
pursuant hereto.

          (b) As used  herein and in the  Notes,  and any  certificate  or other
document  made or  delivered  pursuant  hereto,  accounting  terms  relating  to
Borrower not defined in subsection  1.1 and  accounting  terms partly defined in
subsection  1.1, to the extent not defined,  shall have the respective  meanings
given to them under GAAP.

          (c) The words "hereof",  "herein" and "hereunder" and words of similar
import when used in this Agreement  shall refer to this Agreement as a whole and
not to any  particular  provision of this  Agreement,  and Section,  subsection,
Schedule  and  Exhibit   references  are  to  this  Agreement  unless  otherwise
specified.

          (d) The  meanings  given  to terms  defined  herein  shall be  equally
applicable to both the singular and plural forms of such terms.


          SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
                     -------------------------------


          2.1  Agreement  to Lend  and to  Borrow;  Notes.  (a)  Subject  to the
conditions  and upon the  terms  provided  for in this  Agreement,  each  Lender
severally agrees to make loans to Borrower in an aggregate  principal amount not
to exceed the  amount of the  Commitment  of such  Lender,  but only  during the
Commitment  Period. The Loans may from time to time be (a) Eurodollar Loans, (b)
Prime Rate Loans or (c) a  combination  thereof,  as  determined by Borrower and
notified to Agent in accordance with subsection 3.1.

          (b) The Loans  made by each  Lender  shall be  evidenced  by a Note of
Borrower,  substantially in the form of Exhibit B, with  appropriate  insertions
therein as to payee,  date and  principal  amount,  payable to the order of such
Lender.  Each Lender is hereby  authorized to record the date and amount of each
advance and payment or  prepayment of principal of its Loan,  each  continuation
thereof, each conversion of all or a portion thereof to another Type and, in the
case of Eurodollar Loans, the length



<PAGE>


                                                                              18



of each Interest  Period with respect  thereto,  on the schedule  annexed to and
constituting a part of its Note, and any such recordation shall constitute prima
facie evidence of the accuracy of the information so recorded.  The Note of each
Lender  shall  (a) be dated  the date  hereof,  (b) be  stated  to mature on the
Maturity  Date and (c) provide for the  payment of interest in  accordance  with
subsection 3.8.

          2.2 Determination of Amounts of Loan Advances.

          (a)   Disbursements  for  costs  of  constructing  and  equipping  the
Improvements  included in the Budget,  shall be made as such costs are incurred;
the amount of the costs  which have been  incurred  shall be  determined  by the
Agent, in its reasonable discretion,  based upon certifications of Borrower, the
Construction Manager and the Consulting  Professional and such other evidence as
may be reasonably  required by the Agent, less the amount which Borrower retains
under the relevant  construction  contracts.  Upon final  completion of the work
performed by any contractor or  subcontractor  substantially  in accordance with
the Plans,  as certified to Agent by the  Construction  Manager and confirmed by
the Consulting  Professional,  Agent shall release that portion of the retention
allocated  to  the  work  performed  by  such  contractor  or  subcontractor  in
accordance with the Budget, provided that Agent shall have received a final lien
waiver and sworn statement from such contractor or subcontractor.



          (b) The Lenders,  upon  instruction  by the Agent,  shall advance from
time to time  portions  of the Loans to pay costs of  Unincorporated  Materials;
provided,  that, in no event shall the outstanding amount of the Loans disbursed
to pay the costs of  Unincorporated  Materials at any one time exceed the sum of
$3,500,000. Any such advances shall be made subject to satisfaction of all other
conditions of this Agreement  applicable to advances of the Loan and each of the
following conditions:

               (1) the  Unincorporated  Materials,  whether stored on or off the
          Leased  Premises,  shall be secured,  segregated and identifiable in a
          manner reasonably satisfactory to the Agent;

               (2) the Agent shall be given the complete address of the place of
          storage of any  Unincorporated  Materials  stored off the Land and the
          Consulting Professional shall be allowed access at reasonable times to
          inspect such Unincorporated Materials;

               (3) the Agent shall be provided  with  insurance  with respect to
          the Unincorporated  Materials of kinds, in form and amount and written
          by insurers  satisfactory  to the Agent and  covering  the Agent as an
          insured;




<PAGE>


                                                                              19



               (4) except as provided in clause (8) below,  the Agent shall have
          received  evidence  satisfactory to it that Borrower has good title to
          the Unincorporated Materials, free from any lien or encumbrances, upon
          payment therefor;

               (5) the Agent  shall have  received  copies of any  documents  of
          title and warehouse receipts that evidence title to the Unincorporated
          Materials;

               (6) the Agent shall have received such documents and instruments,
          including,   without  limitation,   financing   statements,   security
          agreements,  consents  of  manufacturers,  vendors,  warehousemen  and
          bailees,  as the Agent may  reasonably  require to evidence or perfect
          the Agent's lien on the Unincorporated Materials;

               (7) upon request by Agent, the Agent shall have received evidence
          satisfactory  to  it  that  all  specially  fabricated  Unincorporated
          Materials have been fabricated in accordance with the Plans; and

               (8) if the Agent  advances  amounts to pay contract  deposits for
          Unincorporated  Materials,  and title has not passed to Borrower,  the
          Agent shall have  received a first,  perfected,  enforceable  security
          interest in Borrower's rights in the contract for the purchase of such
          materials and any sums payable or  refundable to Borrower  thereunder,
          and,  if  requested  by the  Agent,  the  contract  vendor  shall have
          consented  to such  assignment  and agreed to perform its  obligations
          under such contract for the benefit of the Agent.

          2.3 Budget Evaluation. If at any time Agent, after reallocation of any
amounts under  subsection 2.4,  reasonably  determines after  consultation  with
Borrower that the portion of the Available Commitment allocated to any line item
of the Budget is not  sufficient to pay the cost of  completing  such line item,
except,  so long as no  Event  of  Default  is  continuing,  the  line  item for
interest, (any such deficiency, a "Budget Deficit"),  Borrower shall be required
to pay costs of such line item or items as to which the  Budget  Deficit  exists
with funds from some other source  (including the contingency  line item) before
Lenders advance proceeds of the Loans to pay such costs and upon such payment by
Borrower, such Budget Deficit shall be remedied.

          2.4 Budget Reallocation and Adjustments.  If at any time the Available
Commitment  allocated  to any line item shown on the Budget  exceeds  the amount
necessary for such line item, then Borrower,  with the approval of Agent,  which
approval shall not be unreasonably  withheld or delayed, may allocate the amount
of such excess to any other line item shown on the Budget that Agent deems to be
insufficient,  or if no other line item is insufficient  Borrower may reallocate
the amount of such excess to



<PAGE>


                                                                              20



any other  line item  shown on the  Budget  (including  contingency),  provided,
however,  such reallocation shall require Agent's prior approval,  such approval
not to be unreasonably  withheld and which approval shall not be required if the
aggregate amount of such reallocation is for an amount less then $5,000,000.

          2.5 Use of  Proceeds.  The  proceeds  of the  Loans  shall  be used by
Borrower only for payment of costs specified in the Budget.


          SECTION 3. BORROWING PROCEDURES
                     --------------------


          3.1 Procedure for  Borrowing.  Borrower  shall give Agent  irrevocable
notice  (which  notice must be  received by Agent prior to 10:00 A.M.,  New York
City time,  seven Business Days prior to the Borrowing Date (which date shall be
prior  to the  Termination  Date)  requesting  that  Lenders  make  loans on the
Borrowing Date and  specifying  (i) the amount to be borrowed,  (ii) whether the
Loans are to be initially  Eurodollar Loans,  Prime Rate Loans, or a combination
thereof,  and (iii) if the Loans are to be entirely or partly  Eurodollar Loans,
the respective  amounts of each such Type of Loan and the respective  lengths of
the initial Interest Periods  therefor.  Upon receipt of such notice Agent shall
promptly  notify each Lender  thereof.  Provided all conditions to an advance of
the Loan proceeds have been satisfied or otherwise waived by Agent in accordance
with the terms  hereof,  Lenders  shall  deposit  in an  account  designated  by
Borrower for transmittal upon Borrower's order, in immediately  available funds,
the amount of the advance then  requested.  Upon the  occurrence  and during the
continuance of an Event of Default, at Agent's option, Lenders may advance funds
by payment  directly  to the third  party to whom an amount is payable and Agent
shall provide  Borrower  with notice  promptly  after such advance is made.  The
execution of this Agreement by Borrower constitutes an irrevocable authorization
to Lenders to advance Loan proceeds as provided in this  subsection.  No further
authorization  shall be  necessary  to warrant  such direct  advances.  All sums
advanced  by  direct  payment  to  third  parties  shall  reduce  the  Available
Commitment, shall be evidenced by the Notes and shall be secured by the Security
Documents.  Lenders  shall  have no  obligation  to make  advances  of the  Loan
proceeds  more often than once in each  calendar  month.  Lenders  shall have no
obligation to see to the disposition of any direct payments to any contractor or
other Person.

          3.2 First Advance and Subsequent  Advances.  The first advance of Loan
proceeds shall be made upon satisfaction of all conditions  specified in Section
7 of this  Agreement.  All advances  after the first  advance shall be made upon
satisfaction of all conditions specified in Section 8 of this Agreement.




<PAGE>


                                                                              21



          3.3 Waivers of Conditions.  (a) Agent, in its sole discretion may, but
shall have no  obligation  to,  waive any  requirements  imposed on Borrower for
giving notice of borrowing.

          (b) If any or all conditions  precedent to an advance of Loan proceeds
have not been satisfied on any Borrowing Date,  Agent,  in its sole  discretion,
may, but shall have no obligation to, waive such  conditions and disburse all or
a part of the requested  advance subject  however,  to the provisions of Section
11.4 hereof. No person dealing with Borrower, directly or indirectly, shall have
standing to object to such waiver.  Such  waivers and advances  pursuant to such
waivers shall be deemed made pursuant to this Agreement and not in  modification
of this Agreement.

          3.4 Advances to Pay  Interest.  (a) Included in the Budget are amounts
allocated  to pay  interest on the Loans.  Subject to the  conditions  set forth
below,  Borrower shall request advances to be made on each Interest Payment Date
for the  purpose of paying the  interest  due or to become due at such time,  in
which event Lenders shall be authorized and are hereby  directed to disburse the
amount of such  interest by crediting  the bank account  maintained  by Borrower
with Agent.  No separate fund or account shall be created for such interest.  In
no event shall  Lenders be obligated to make any advance if the request for such
advance  does not  contain a direction  to pay  interest on the Loans due at the
time of such advance unless Borrower has paid interest to Lenders  directly from
a source  other  than the Loan  proceeds.  Any such  request  for an  advance of
interest  shall be  accompanied  by a direction by Borrower to Lenders to charge
such bank  account  for the amount of such  interest  then due and  advanced  to
Borrower by Lenders.  Notwithstanding  the foregoing,  Borrower  hereby requests
Lenders to make  advances  to pay such  interest  on the day when each  interest
payment is due in the amount of interest  then due, by crediting  such amount to
the bank account maintained by Borrower with Agent and charging such account for
such  interest.  Lenders  may  comply  with the  foregoing  request at any time,
notwithstanding any failure by Borrower to make a more specific request.

          (b) Agent, in its discretion, may refuse to advance for the payment of
interest at such time and so long as either a Default or an Event of Default has
occurred and is continuing.  If Agent  determines not to advance for the payment
of interest for such reason,  Agent shall so notify  Borrower and Borrower shall
be  obligated  to pay all  interest  becoming due on the Loans after such notice
from a source other than Loan proceeds,  in the manner and at the times provided
in the Notes,  provided  that if Agent is stayed or  otherwise  prohibited  from
providing such notice,  Borrower shall  nevertheless  be liable for all interest
becoming due.

          3.5  Optional  Prepayments.  Borrower may at any time and from time to
time prepay the Loans, in whole or in part,



<PAGE>


                                                                              22



without premium or penalty, provided that (a) Borrower shall have given at least
four  Business  Days' prior notice to Agent,  specifying  the date and amount of
prepayment and whether the prepayment is of Eurodollar  Loans,  Prime Rate Loans
or a combination thereof, and, if of a combination thereof, the amount allocable
to each, (b) all accrued and unpaid  interest to the date of such  prepayment on
the amount being  prepaid is then paid and (c) any amounts  payable  pursuant to
subsection  3.15 are then paid.  Upon  receipt of any such  notice  Agent  shall
promptly notify each Lender thereof. Amounts prepaid on account of the Loans may
not be reborrowed. Partial prepayments shall be in an aggregate principal amount
of $100,000 or a whole multiple thereof.

          3.6 Conversion and Continuation  Options.  (a) Borrower may elect from
time to time to convert  Eurodollar  Loans to Prime  Rate Loans by giving  Agent
irrevocable  notice no later than 11:00 A.M. at least three LIBOR  Business Days
prior  to such  requested  conversion,  provided  that any  such  conversion  of
Eurodollar  Loans may only be made on the last day of an  Interest  Period  with
respect  thereto.  Borrower  may elect from time to time to  convert  Prime Rate
Loans to Eurodollar Loans by giving Agent irrevocable notice no later than 11:00
A.M. at least three LIBOR Business Days prior to such requested conversion.  Any
such notice of conversion  to  Eurodollar  Loans shall specify the length of the
initial Interest Period or Interest Periods  therefor.  Upon receipt of any such
notice  Agent shall  promptly  notify each  Lender  thereof.  All or any part of
outstanding  Eurodollar  Loans and Prime Rate Loans may be converted as provided
herein,  provided that (i) no Loan may be converted into a Eurodollar  Loan when
any Event of Default has occurred  and is  continuing  and Agent has  determined
that such a conversion is not appropriate and (ii) no Loan may be converted into
a Eurodollar Loan after the date that is one month prior to the Maturity Date.

          (b) Any Eurodollar  Loans may be continued as such upon the expiration
of the then  current  Interest  Period with respect  thereto by Borrower  giving
notice  to Agent,  in  accordance  with the  applicable  provisions  of the term
"Interest  Period"  set  forth in  subsection  1.1,  of the  length  of the next
Interest Period to be applicable to such Loans, provided that no Eurodollar Loan
may be  continued  as such (i) when any Event of  Default  has  occurred  and is
continuing and Agent has determined  that such a continuation is not appropriate
or (ii)  after  the  date  that is one  month  prior  to the  Maturity  Date and
provided,  further,  that if Borrower shall fail to give any required  notice as
described  above in this  paragraph  or if such  continuation  is not  permitted
pursuant to the preceding  proviso such Loans shall be automatically  converted,
at Agent's  election,  to Prime Rate Loans or one-month  Eurodollar Loans on the
last day of such then expiring Interest Period.

          3.7 Minimum  Amounts of  Tranches;  Maximum  Number of  Tranches.  All
borrowings, conversions and continuations of Loans



<PAGE>


                                                                              23



hereunder and all  selections  of Interest  Periods  hereunder  shall be in such
amounts and be made  pursuant to such  elections so that,  after  giving  effect
thereto,  the aggregate principal amount of the Loans comprising each Eurodollar
Tranche  shall be at least  equal to  $1,000,000.  No more than five  Eurodollar
Tranches in the aggregate may be  outstanding  at any time under this  Agreement
and the Notes.

            3.8 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the  Eurodollar  Rate  determined  for such day plus the
Applicable Margin.

          (b) Each Prime Rate Loan shall bear interest at a rate per annum equal
to the Prime Rate plus the Applicable Margin.

          (c) If all or a portion of (i) the principal  amount of any Loan, (ii)
any interest payable thereon or (iii) any fee or other amount payable  hereunder
shall not be paid when due (whether at the stated  maturity,  by acceleration or
otherwise), such overdue amount shall bear interest at a rate per annum which is
(x) in the  case  of  overdue  principal,  the  rate  that  would  otherwise  be
applicable thereto pursuant to the foregoing  provisions of this subsection plus
4% or (y) in the  case of  overdue  interest,  fee or  other  amount,  the  rate
described in  paragraph  (b) of this  subsection  plus 4%, in each case from the
date of such  non-payment  until  such  amount is paid in full (as well after as
before judgment);  provided,  however, that in the case of overdue interest, the
rate  described  in clause (y) shall not apply if such  interest  is paid within
three Business Days after written notice to Borrower.

          (d)  Interest  shall be payable in  arrears on each  Interest  Payment
Date,  provided  that  interest  accruing  pursuant  to  paragraph  (c) of  this
subsection shall be payable from time to time on demand.

          3.9  Computation  of Interest and Fees. (a) Fees and interest shall be
calculated  on the basis of a 360-day  year for the actual days  elapsed.  Agent
shall as soon as practicable  notify Borrower and Lenders of each  determination
of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the Prime Rate, or the Eurocurrency Reserve Requirements, shall become
effective as of the opening of business on the day on which such change  becomes
effective. Agent shall as soon as practicable notify Borrower and Lenders of the
effective date and the amount of each such change in interest rate.

          (b) Each  determination  of an interest rate by Agent  pursuant to any
provision of this  Agreement  shall be conclusive and binding on Borrower in the
absence of manifest error.  Agent shall, at the request of Borrower,  deliver to
Borrower a



<PAGE>


                                                                              24



statement  showing the quotations used by Agent in determining any interest rate
pursuant to subsection 3.9(a).

          3.10  Inability to Determine  Interest Rate. If prior to the first day
of any Interest Period:

          (a)  Agent  shall  have  determined  (which   determination  shall  be
     conclusive  and binding upon  Borrower)  that,  by reason of  circumstances
     affecting the relevant  market,  adequate and reasonable means do not exist
     for ascertaining the Eurodollar Rate for such Interest Period, or

          (b) Agent shall have  received  notice from the Required  Lenders that
     the Eurodollar Rate determined or to be determined for such Interest Period
     will not  adequately  and fairly reflect the cost to such Lenders of making
     or maintaining their affected Loans during such Interest Period,

Agent shall give telecopy or telephonic  notice  thereof to Borrower and Lenders
as soon as  practicable  thereafter.  If such notice is given (x) any Eurodollar
Loans  requested  to be made on the first day of such  Interest  Period shall be
made as Prime Rate Loans,  (y) any Loans that were to have been converted on the
first day of such Interest  Period to Eurodollar  Loans shall be converted to or
continued as Prime Rate Loans and (z) any outstanding  Eurodollar Loans shall be
converted,  on the first day of such Interest Period, to Prime Rate Loans. Until
such notice has been withdrawn by Agent,  no further  Eurodollar  Loans shall be
made or continued as such, nor shall Borrower have the right to convert Loans to
Eurodollar Loans.

          3.11 Pro Rata  Treatment and Payments.  (a) Each borrowing by Borrower
from the  Lenders  hereunder,  each  payment by  Borrower on account of any fees
hereunder  shall  be  made  pro  rata  according  to the  respective  Commitment
Percentages of the Lenders. Each payment (including each prepayment) by Borrower
on account of  principal  of and  interest  on the Loans  shall be made pro rata
according to the respective outstanding principal amounts of the Loans then held
by  Lenders.  All  payments  (including  prepayments)  to be  made  by  Borrower
hereunder and under the Notes, whether on account of principal,  interest,  fees
or otherwise,  shall be made without set off or  counterclaim  and shall be made
prior to 12:00 Noon,  New York City time, on the due date thereof to Agent,  for
the account of Lenders,  at Agent's  office  specified in  subsection  11.3,  in
Dollars and in immediately available funds. Agent shall distribute such payments
to Lenders  promptly  upon  receipt in like funds as  received.  If any  payment
hereunder (other than payments on the Eurodollar  Loans) becomes due and payable
on a day other than a Business  Day,  such payment shall be extended to the next
succeeding  Business Day,  and, with respect to payments of principal,  interest
thereon shall be payable at the then applicable  rate during such extension.  If
any payment on a



<PAGE>


                                                                              25



Eurodollar  Loan  becomes due and  payable on a day other than a LIBOR  Business
Day,  the  maturity  thereof  shall be  extended  to the next  succeeding  LIBOR
Business Day unless the result of such extension would be to extend such payment
into another  calendar  month,  in which event such payment shall be made on the
immediately preceding LIBOR Business Day.

          (b) Unless  Agent  shall have been  notified  in writing by any Lender
prior to a  borrowing  that such  Lender  will not make the  amount  that  would
constitute its Commitment Percentage of such borrowing available to Agent, Agent
may assume that such Lender is making such amount  available to Agent, and Agent
may (but shall be under no obligation),  in reliance upon such assumption,  make
available  to  Borrower  a  corresponding  amount.  If such  amount  is not made
available to Agent by the required time on the  Borrowing  Date  therefor,  such
Lender shall pay to Agent,  on demand,  such amount with  interest  thereon at a
rate equal to the daily  Federal  Funds Rate for the  period  until such  Lender
makes  such  amount  immediately  available  to Agent.  A  certificate  of Agent
submitted to any Lender with respect to any amounts owing under this  subsection
shall  be  conclusive  in the  absence  of  manifest  error.  If  such  Lender's
Commitment  Percentage of such  borrowing is not made available to Agent by such
Lender within three  Business Days of such Borrowing  Date,  Agent shall also be
entitled  to recover  such amount  with  interest  thereon at the rate per annum
applicable to Prime Rate Loans  hereunder,  on demand,  from Borrower,  provided
that (i) the  foregoing  shall not impair any of  Borrower's  rights or remedies
against such Lender and (ii) Agent shall promptly notify such Lender that it has
defaulted under this Agreement.

          3.12 Illegality.  Notwithstanding  any other provision  herein, if the
adoption of or any change in any Legal  Requirement or in the  interpretation or
application  thereof  shall make it unlawful  for any Lender to make or maintain
Eurodollar  Loans as contemplated by this Agreement,  (a) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert  Prime Rate Loans to Eurodollar  Loans shall  forthwith be cancelled and
(b) such Lender's Loans then  outstanding as Eurodollar  Loans, if any, shall be
converted  automatically  to Prime Rate Loans on the respective last days of the
then current  Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a Eurodollar Loan occurs on
a day which is not the last day of the then current Interest Period with respect
thereto,  Borrower  shall pay to such  Lender  such  amounts,  if any, as may be
required pursuant to subsection 3.15.

          3.13 Legal  Requirements.  (a) If the adoption of or any change in any
Legal Requirement or in the interpretation or application  thereof or compliance
by any Lender with any request or directive  (whether or not having the force of
law) from any central  bank or other  Governmental  Authority,  in any such case
made subsequent to the date hereof:



<PAGE>


                                                                              26




          (i) shall  subject any Lender to any tax of any kind  whatsoever  with
     respect to this  Agreement,  any Note or any Eurodollar Loan made by it, or
     change the basis of taxation of payments to such Lender in respect  thereof
     (except for  Non-Excluded  Taxes covered by subsection  3.15 and changes in
     the rate of tax on the overall net income of such Lender);

          (ii) shall  impose,  modify or hold  applicable  any reserve,  special
     deposit,  compulsory  loan or similar  requirement  against assets held by,
     deposits or other liabilities in or for the account of, advances,  loans or
     other  extensions of credit by, or any other  acquisition  of funds by, any
     office of such Lender which is not otherwise  included in the determination
     of the Eurodollar Rate; or

          (iii) shall impose on such Lender any other condition;

and the result of any of the  foregoing  is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining  Eurodollar  Loans or to reduce any amount  receivable
hereunder in respect  thereof,  then, in any such case,  Borrower shall promptly
pay such Lender, upon its demand, any additional amounts necessary to compensate
such Lender for such increased cost or reduced amount receivable.  If any Lender
becomes entitled to claim any additional amounts pursuant to this subsection, it
shall promptly notify  Borrower after it becomes aware of such increased  costs,
through  Agent,  of the event by reason of which it has  become so  entitled.  A
certificate as to any additional  amounts  payable  pursuant to this  subsection
submitted by such Lender,  through Agent, to Borrower shall be conclusive in the
absence of manifest  error.  No Lender  shall be  entitled  to any  compensation
pursuant to this  Section  relating to any period more than 90 days prior to the
date notice thereof is given to Borrower by such Lender.

          (b) If any Lender shall have  determined  that any change in any Legal
Requirement  regarding capital adequacy or in the  interpretation or application
thereof or compliance by such Lender or any corporation  controlling such Lender
with any request or directive  regarding capital adequacy (whether or not having
the  force of law)  from any  Governmental  Authority,  in any  such  case  made
subsequent  to the date  hereof,  does or shall have the effect of reducing  the
rate of return on such Lender's or such  corporation's  capital as a consequence
of its  obligations  hereunder  to a level  below that which such Lender or such
corporation  could have achieved but for such change or compliance  (taking into
consideration  such  Lender's or such  corporation's  policies  with  respect to
capital  adequacy) by an amount deemed by such Lender to be material,  then from
time to time, after submission by such Lender to Borrower (with a copy to Agent)
of a written request therefor, Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender for such reduction.




<PAGE>


                                                                              27



          (c) If,  subsequent to the date of this Agreement,  any Lender obtains
actual knowledge of any increased costs or losses of yield as described above or
any  indemnified  Non-Excluded  Taxes  described  in  subsection  3.14(a)  below
(collectively,  "Indemnified  Losses"),  Agent, on behalf of such Lender,  shall
promptly notify Borrower  thereof,  and Lenders agree to use reasonable  efforts
(without  incurring  material  costs and without  undertaking  to restructure or
reallocate any assets other than the Loans) to minimize any Indemnified  Losses.
Notwithstanding  any provision to the contrary in this  subsection or subsection
3.15,  Borrower shall not be required to reimburse or indemnify  Lenders for any
Indemnified  Losses to the extent any such  Indemnified  Losses are  incurred or
attributable to the period ending 90 days after Borrower's  receipt of notice of
such  Indemnified  Losses,  provided  such  Indemnified  Losses  shall not apply
retroactively  and Borrower  shall prepay the Loans  pursuant to subsection  3.5
hereof within such 90-day period (such  prepayment to be made at Borrower's sole
option).

          3.14 Taxes. (a) All payments made by Borrower under this Agreement and
the Notes shall be made free and clear of, and without  deduction or withholding
for or on  account  of,  any  present or future  stamp or other  taxes,  levies,
imposts,  duties,  charges,  fees, deductions or withholdings,  now or hereafter
imposed, levied, collected,  withheld or assessed by any Governmental Authority,
excluding income taxes and franchise taxes (imposed in lieu of or in addition to
income taxes)  imposed on Agent or any Lender as a result of a present or former
connection between Agent or such Lender and the jurisdiction of the Governmental
Authority  imposing such tax or any political  subdivision  or taxing  authority
thereof or therein. If any such non-excluded  taxes,  levies,  imposts,  duties,
charges, fees, deductions or withholdings ("Non-Excluded Taxes") are required to
be withheld from any amounts  payable to Agent or any Lender  hereunder or under
the Notes,  the amounts so payable to Agent or such Lender shall be increased to
the extent  necessary  to yield to Agent or such  Lender  (after  payment of all
Non-Excluded  Taxes) interest or any such other amounts payable hereunder at the
rates or in the amounts  specified in this  Agreement  and the Notes,  provided,
however,  that  Borrower  shall not be  required to  increase  any such  amounts
payable to any Lender that is not organized  under the laws of the United States
of  America  or a  state  thereof  if such  Lender  fails  to  comply  with  the
requirements  of paragraph  (b) of this  subsection.  Whenever any  Non-Excluded
Taxes are payable by Borrower, as promptly as possible thereafter Borrower shall
send to Agent for its own account or for the account of such Lender, as the case
may be, a certified copy of an original  official  receipt  received by Borrower
showing payment thereof.  If Borrower fails to pay any  Non-Excluded  Taxes when
due to the appropriate  taxing authority or fails to remit to Agent the required
receipts or other required documentary evidence,  Borrower shall indemnify Agent
and Lenders for any  incremental  taxes,  interest or penalties  that may become
payable by Agent or any Lender as a result of any such



<PAGE>


                                                                              28



failure.  Any  Lender  making  a  claim  against  Borrower  for the  payment  of
Non-Excluded  Taxes under this Section shall  provide  prompt notice to Borrower
that  such  taxes  are due.  Notwithstanding  anything  contained  herein to the
contrary,  Borrower  shall  not be  responsible  for the  payment  of any  Taxes
incurred more than 90 days prior to Borrower's receipt of such notice.

          (b) Each Lender that is not incorporated  under the laws of the United
States of America or a state thereof shall:

          (i) deliver to  Borrower  and Agent (A) two duly  completed  copies of
     United  States  Internal  Revenue  Service Form 1001 or 4224,  or successor
     applicable  form, as the case may be, and (B) an Internal  Revenue  Service
     Form W-8 or W-9, or successor applicable form, as the case may be;

          (ii) deliver to Borrower and Agent two further copies of any such form
     or  certification on or before the date that any such form or certification
     expires or becomes obsolete and after the occurrence of any event requiring
     a change in the most recent form  previously  delivered  by it to Borrower;
     and

          (iii)  obtain such  extensions  of time for filing and  complete  such
     forms or  certifications  as may  reasonably  be  requested  by Borrower or
     Agent;

unless in any such case an event (including,  without limitation,  any change in
treaty,  law or  regulation)  has  occurred  prior to the date on which any such
delivery would  otherwise be required which renders all such forms  inapplicable
or which would prevent such Lender from duly  completing and delivering any such
form with  respect to it and such  Lender so advises  Borrower  and Agent.  Such
Lender shall certify (i) in the case of a Form 1001 or 4224, that it is entitled
to receive payments under this Agreement without deduction or withholding of any
United  States  federal  income taxes and (ii) in the case of a Form W-8 or W-9,
that it is entitled to an exemption from United States backup  withholding  tax.
Each Person that shall become a Transferee pursuant to Section 10.11 shall, upon
the  effectiveness  of the related  transfer,  be required to provide all of the
forms and statements required pursuant to this subsection,  provided that in the
case of a Participant such Participant shall furnish all such required forms and
statements  to the Lender from which the related  participation  shall have been
purchased.

          3.15  Indemnity.  Borrower agrees to indemnify each Lender and to hold
each Lender  harmless  from any loss or expense which such Lender may sustain or
incur as a  consequence  of (a) default by  Borrower  in making a borrowing  of,
conversion into or  continuation of Eurodollar  Loans after Borrower has given a
notice  requesting the same in accordance with the provisions of this Agreement,
(b) failure by Borrower in making any prepayment



<PAGE>


                                                                              29



after Borrower has given a notice  thereof in accordance  with the provisions of
this  Agreement or (c) the making of a prepayment of  Eurodollar  Loans on a day
which is not the last day of an  Interest  Period  with  respect  thereto.  Such
indemnification  may include an amount  equal to the excess,  if any, of (i) the
amount of interest which would have accrued on the amount so prepaid,  or not so
borrowed,  converted  or  continued,  for  the  period  from  the  date  of such
prepayment or of such failure to borrow,  convert or continue to the last day of
such  Interest  Period  (or,  in the case of a failure  to  borrow,  convert  or
continue,  the  Interest  Period that would have  commenced  on the date of such
failure) in each case at the applicable rate of interest for such Loans provided
for herein (excluding,  however, the Applicable Margin included therein, if any)
over (ii) the amount of interest (as reasonably determined by such Lender) which
would have  accrued to such  Lender on such  amount by  placing  such  amount on
deposit for a comparable  period with leading banks in the interbank  eurodollar
market.

          3.16  Substitution of Lenders.  (a) If any Lender (an "Affected Bank")
(i) makes demand upon Borrower for (or if Borrower is otherwise required to pay)
amounts  pursuant to Section 3.13 (any such amounts  referred to as  "Additional
Costs") or (ii) is unable to make or maintain a Eurodollar Loan as a result of a
condition  described in Section 3.12, or (iii)  defaults in its  obligations  to
make  Advances in  accordance  with the terms of this  Agreement,  Borrower may,
within 90 days of receipt of such  demand or notice (or the  occurrence  of such
other event causing  Borrower to be required to pay Additional  Costs or causing
said Section 3.12 to be applicable)  or the  occurrence of such default,  as the
case may be, give notice (a "Replacement  Notice") to Agent (which will promptly
forward a copy of such notice to each Lender) of Borrower's intention either (x)
to prepay in full the Affected  Bank's Note and to terminate the Affected Bank's
entire  Commitment  or (y) to replace the Affected  Bank with another  financial
institution (the "Replacement Bank") designated in such Replacement Notice.

      In the event Borrower  gives the notice  provided for in clause (x) above,
and if the Affected  Bank shall not agree within 30 days of its receipt  thereof
to waive the  payment of the  Additional  Costs in question or the effect of the
circumstances  described in Section 3.12 or if the Affected  Bank shall not cure
such  default  within  five days of its  receipt  thereof,  then,  so long as no
Default or Event of Default  shall  exist,  Borrower  may  (notwithstanding  the
provisions of Section 3.11)  terminate  the Affected  Bank's entire  Commitment,
provided  that  in  connection  therewith  it  pays  to the  Affected  Bank  all
outstanding  principal and accrued and unpaid interest under the Affected Bank's
Note, together with all other amounts, if any, due from Borrower to the Affected
Bank,  including all amounts properly  demanded and unreimbursed  under Sections
3.5 and all Additional Costs.




<PAGE>


                                                                              30



      In the event Borrower  gives the notice  provided for in clause (y) above,
and if (i) Agent shall, within 30 days of its receipt of the Replacement Notice,
notify  Borrower  and  each  Lender  in  writing  that the  Replacement  Bank is
reasonably  satisfactory to Agent and (ii) the Affected Bank shall not, prior to
the end of such  30-day  period,  agree to waive the  payment of the  Additional
Costs in question or the effect of the  circumstances  described in Section 3.12
or if the Affected  Bank shall not cure such  default,  then the  Affected  Bank
shall,  so long as no Default or Event of Default  shall exist,  assign its Note
and all of its rights and  obligations  under this Agreement to the  Replacement
Bank, and the  Replacement  Bank shall assume all of the Affected  Bank's rights
and  obligations,  pursuant  to an  agreement,  substantially  in the form of an
Assignment  and  Assumption  Agreement,  executed by the  Affected  Bank and the
Replacement  Bank and  otherwise in  accordance  with the  provisions of Section
10.11(b).  In connection with such  assignment and  assumption,  the Replacement
Bank shall pay to the Affected Bank an amount equal to the outstanding principal
amount under the Affected Bank's Note plus all interest  accrued  thereon,  plus
all other amounts,  if any (other than the Additional  Costs in question),  then
due and  payable  to the  Affected  Bank;  provided,  however,  that prior to or
simultaneously with any such assignment and assumption, Borrower shall have paid
to such  Affected  Bank all amounts  properly  demanded and  unreimbursed  under
Section 3.15.  Upon the effective date of such  assignment and  assumption,  the
Replacement  Bank shall become a Lender under this  Agreement and shall have all
the  rights  and  obligations  of a Lender as set forth in such  Assignment  and
Assumption  Agreement,  and the Affected Bank shall (except to the extent of any
damages  caused by a default by such  Lender) be released  from its  obligations
hereunder, and no further consent or action by any party shall be required. Upon
the consummation of any assignment  pursuant to this Section,  a substitute Note
shall be issued to the Replacement Bank by Borrower,  in exchange for the return
of the Affected Bank's Note. The  obligations  evidenced by such substitute note
shall constitute  "Obligations" for all purposes of this Agreement and the other
Loan Documents.  If the Replacement Bank is not  incorporated  under the laws of
the United States of America or a state  thereof,  it shall,  prior to the first
date on which interest or fees are payable hereunder for its account, deliver to
Borrower and Agent  certification  as to exemption from deduction or withholding
of any United States federal income taxes in accordance with Section 3.14.

      Borrower,  Agent and the Lenders shall execute such  modifications  to the
Loan  Documents  as shall  be  reasonably  required  in  connection  with and to
effectuate the foregoing.

          3.17  Extension of Maturity  Date.  Borrower  shall have the option to
extend the Initial Maturity Date for a period of one year, from the date that is
one day after the Initial  Maturity  Date to the date that is one year after the
Initial Maturity Date (the "First Extended Maturity Date") and for a



<PAGE>


                                                                              31



further period (the "Second Extension Period") of one year from the date that is
one day after the First Extended Maturity Date to the date (the "Second Extended
Maturity  Date")  that is one year  after  the  First  Extended  Maturity  Date,
provided that the following conditions are satisfied for each such extension:

          (a) at least 60 days prior to the Initial  Maturity  Date or the First
     Extended Maturity Date, as the case may be, Agent shall have received:

               (i) written  notice from  Borrower of its  election to extend the
          Initial Maturity Date or the First Extended Maturity Date, as the case
          may be; and

               (ii) an  extension  fee,  for the account of the  Lenders,  in an
          amount  equal to (a) 0.10% for the First  Extension  and (b) 0.25% for
          the  Second  Extension,  of the  Commitment  Amount as of the  Initial
          Maturity Date or the First Extended Maturity Date, as the case may be;

          (b) no  Default  or  Event  of  Default  shall  have  occurred  and be
     continuing as of the Initial  Maturity Date or the First Extended  Maturity
     Date, as the case may be.


          SECTION 4. REPRESENTATIONS AND WARRANTIES
                     ------------------------------

          In order to induce  Lenders to enter into this  Agreement  and to make
the Loan, Borrower covenants, represents and warrants to Lenders as follows:

          4.1 Formation and Existence.  (a) Borrower (i) is a duly organized and
validly  existing  limited  partnership,  formed  under the laws of the State of
Delaware,  (ii)  has  all  requisite  power  and  authority  to  consummate  the
transactions  contemplated  in the Loan Documents and the Project  Documents and
(iii) is in compliance  with all applicable  Legal  Requirements,  except to the
extent  that the  failure to comply  would not be likely to result in a Material
Adverse Effect.

          (b) The Guarantor (i) is a duly organized and validly existing limited
partnership,  formed  and in  good  standing  under  the  laws of the  State  of
Delaware,  (ii) has all requisite power and authority to be a Partner, (iii) has
all requisite  power and authority to authorize and has  authorized  Borrower to
consummate the  transactions  contemplated  in the Loan Documents and (iv) is in
compliance with all applicable Legal Requirements, except to the extent that the
failure to comply would not  reasonably  be expected to have a Material  Adverse
Effect.

          4.2  Power  and  Authority.   The  consummation  of  the  transactions
contemplated in the Loan Documents and the Project Documents and the performance
or observance of Borrower's



<PAGE>


                                                                              32



obligations  under the Loan  Documents and the Project  Documents have been duly
authorized by all necessary action on the part of Borrower and Guarantor.

          4.3  Authorization;  Enforceable  Obligations.  (a) The Loan Documents
have  been  duly   executed  and  delivered  on  behalf  of  Borrower  and  each
constitutes,  the legal, valid and binding  obligation of Borrower,  enforceable
against Borrower in accordance with its terms,  except as enforceability  may be
limited by  applicable  bankruptcy,  insolvency,  reorganization,  moratorium or
similar laws affecting the enforcement of creditors' rights generally.

          (b) The  Project  Documents  have been duly  executed  and  delivered,
constitute the legal, valid and binding obligations of Borrower, and to the best
of Borrower's  knowledge,  the other parties to such  agreements,  have not been
amended,  modified or terminated (except for certain amendments thereto,  copies
of which have been  furnished  to Agent) and are in full force and  effect.  The
rights  of  Borrower  under  each  of  the  Project  Agreement,  the  Management
Agreement,  the REA and the Mall Lease may be  assigned  to Lenders  without the
consent of any Person.  Borrower  has done all things  required to be done as of
the date of this Agreement to keep unimpaired the leasehold  created by the Mall
Lease  (other  than  the  Permitted  Exceptions).  To  the  best  of  Borrower's
knowledge,  there exists no default of any party under the Project Documents and
no event has occurred and is continuing which with notice or the passage of time
or both would constitute a default under the Project Documents.

          4.4 No  Litigation.  There is no action,  suit or  proceeding  pending
against or  directly  involving  Borrower or the  Collateral,  or to the best of
Borrower's  knowledge  threatened  in  writing  against  or  directly  involving
Borrower or the Collateral  which would have a Material  Adverse Effect or would
materially  adversely  affect the  Collateral in any court,  or before or by any
Governmental Authority,  whether federal, state, county or municipal,  which has
not been disclosed in writing to Agent.

          4.5 Consents,  Approvals,  Authorizations,  Etc. No consent, approval,
order or  authorization  of or  registration,  declaration  or  filing  with any
Governmental  Authority is required in connection  with the valid  execution and
delivery of the Loan  Documents  or the Agency  Documents or the carrying out or
performance  of any of the  transactions  required or  contemplated  by the Loan
Documents or the Agency Documents in each case by Borrower or, if required, such
consent,   approval,   order  or   authorization   has  been  obtained  or  such
registration,  declaration  or  filing  has been  accomplished  (other  than the
recording of the Mortgage and filing of UCC-1  Financing  Statements) or will be
obtained or accomplished  prior to the time any such action requiring consent is
undertaken.




<PAGE>


                                                                              33



          4.6 No Legal Bar. The execution,  delivery and performance of the Loan
Documents and the Project Documents, borrowings under this Agreement and the use
of the proceeds of the Loan will not violate any Legal Requirement  affecting or
any  Contractual  Obligation of Borrower or Guarantor and will not result in, or
require, the creation or imposition of any Lien on any of Borrower's  properties
or revenues pursuant to any Legal Requirement or Contractual Obligation,  except
for the Lien of the Security Documents.

          4.7 Compliance with Building  Codes,  Zoning Laws, Etc. To the best of
Borrower's knowledge,  there are no existing violations of any Legal Requirement
affecting the Land or the construction, use or occupancy of the Improvements.

          4.8 No Default.  Borrower is not in default  under or with  respect to
any Contractual  Obligation in any respect which has a Material  Adverse Effect.
No Default or Event of Default has occurred and is continuing.

          4.9 Taxes.  Borrower  has filed or caused to be filed all tax  returns
that are  required  to be  filed,  and has paid  all  taxes  shown to be due and
payable on such  returns or on any  assessments  made  against  Borrower  or the
Project and all other taxes,  fees or other  charges  imposed on Borrower or the
Project by any  Governmental  Authority  (other than those taxes,  the amount or
validity of which is being  contested in good faith by  appropriate  proceedings
diligently  prosecuted  and with respect to which prior notice has been given to
Agent and reserves reasonably satisfactory to Agent have been provided or a bond
reasonably  satisfactory  to Agent has been posted);  and no tax Liens have been
filed and no claims are being  asserted with respect to any such taxes,  fees or
other charges.

          4.10  Availability of Utilities.  All utility  services and facilities
necessary for the construction of the Improvements  without  impediment or delay
(including,  without limitation,  gas, electrical,  water and storm and sanitary
sewage services and facilities)  will be available at the boundaries of the Land
upon the commencement of construction and all utility services necessary for the
operation of the Improvements  for their intended  purposes will be available at
or within the boundaries of the Land when needed.

          4.11 Brokerage.  No brokerage or other fee, commission or compensation
is to be paid by Lenders in connection with this Loan as a result of any actions
by Borrower or any Affiliate of Borrower or Lender.

          4.12 Permits, Etc. All Permits for the construction of Borrower's Work
and to the extent that Borrower is obligated to perform any of the Agency's Work
in  accordance  with  any  of  the  Project  Documents,   all  permits  for  the
Construction  of such  Agency's  Work that  Borrower is  obligated to obtain and
which are



<PAGE>


                                                                              34



required to the date that this  representation  is being made or reaffirmed have
been obtained and are in full force and effect.

          4.13 Financial Statements.  Any and all financial statements delivered
to Lenders by or on behalf of Borrower or Guarantor  are true and correct in all
material respects and fairly present the financial  conditions of their subjects
as of their  respective  dates,  no material  adverse change has occurred in the
financial  conditions  reflected since their  respective dates and no additional
Indebtedness  has been incurred by Borrower  since the  respective  dates of the
latest statements,  other than the borrowings  contemplated by this Agreement or
other  Indebtedness  which has been  approved  by  Lenders in  writing.  No such
financial  statement or any certificate or statement  furnished to Lenders by or
on  behalf  of  Borrower  or  Guarantor  in  connection  with  the  transactions
contemplated  by this  Agreement,  and no  representation  or  warranty  in this
Agreement,  contains any untrue statement of a material fact or omits to state a
material  fact  necessary  in  order to make the  statements  contained  in such
financial  statements,  certificates  or other  statements or this Agreement not
misleading in any material respect.

          4.14 ERISA.  Neither a Reportable  Event nor an  "accumulated  funding
deficiency"  (within  the  meaning of Section  412 of the Code or Section 302 of
ERISA) has occurred during the five-year  period prior to the date on which this
representation  is made or deemed made with respect to any ERISA Plan,  and each
ERISA Plan has complied in all material respects with the applicable  provisions
of ERISA and the Code. No  termination  of a Single  Employer Plan has occurred,
and no Lien in  favor  of the PBGC or an ERISA  Plan  has  arisen,  during  such
five-year  period.  The present value of all accrued  benefits under each Single
Employer  Plan (based on those  assumptions  used to fund such  Single  Employer
Plans) did not, as of the last annual  valuation date prior to the date on which
this  representation  is made or deemed made,  exceed the value of the assets of
such ERISA Plan  allocable to such accrued  benefits.  Neither  Borrower nor any
Commonly  Controlled  Entity has had a complete or partial  withdrawal  from any
Multiemployer  Plan,  and neither  Borrower nor any Commonly  Controlled  Entity
would  become  subject to any  liability  under  ERISA if  Borrower  or any such
Commonly  Controlled  Entity were to withdraw  completely from all Multiemployer
Plans as of the  valuation  date most closely  preceding  the date on which this
representation  is  made  or  deemed  made.  No  such  Multiemployer  Plan is in
Reorganization  or Insolvent.  The present value (determined using actuarial and
other  assumptions  which are reasonable in respect of the benefits provided and
the  employees  participating)  of the  liability of Borrower and each  Commonly
Controlled  Entity for post retirement  benefits to be provided to their current
and former  employees  under ERISA Plans  which are  welfare  benefit  plans (as
defined in Section 3(1) of ERISA) does not, in the aggregate,  exceed the assets
under all such ERISA Plans allocable to such benefits.




<PAGE>


                                                                              35



          4.15 Solvency.  Borrower is, and upon consummation of the transactions
contemplated  by  this  Agreement,  the  other  Loan  Documents  and  any  other
documents, instruments or agreements relating thereto, will be, Solvent.

          4.16 Roads.  All roads necessary for the use of the  Improvements  for
their intended  purposes and required by  Governmental  Authorities  have either
been completed or the necessary  rights of way therefor are owned by Borrower or
have been  acquired by  appropriate  Governmental  Authorities  or  dedicated to
public use and  accepted by said  Governmental  Authorities,  and all  necessary
steps have been taken by Borrower and said  Governmental  Authorities  to assure
the complete  construction  and  installation  thereof no later than the Outside
Completion Date or any earlier date required by any Legal Requirement, any Lease
or the REA.

          4.17 REA and Leases. The REA and all existing Leases in respect of the
Project are unmodified and in full force and effect,  there exists no default by
Borrower, or to the best of Borrower's  knowledge,  by any other party under the
REA or any  existing  Leases,  and  all  conditions  to  the  effectiveness  and
continuing  effectiveness  the  REA  and  all  existing  Leases  required  to be
satisfied as of the date hereof have been satisfied.

          4.18   Accuracy  of   Information;   Full   Disclosure.   All  written
information,  reports  and  other  papers  and data  with  respect  to  Borrower
furnished to Lenders by Borrower were, to the best of Borrower's  knowledge,  at
the  time  the  same  were so  furnished  or as of the  date of such  report  or
information,  correct  in all  material  respects,  or  have  been  subsequently
supplemented  by other  information,  reports  or other  papers or data,  to the
extent  necessary to give  Lenders a true and accurate  knowledge of the subject
matter of such  information,  reports,  or other papers and data in all material
respects. All projections with respect to Borrower furnished to Lenders by or on
behalf of Borrower,  as supplemented,  were prepared and presented in good faith
by Borrower.  No fact is known to Borrower which has or is reasonably  likely to
have a Material  Adverse  Effect,  which has not been set forth in the financial
statements  referred  to in  subsection  4.13 or in such  information,  reports,
papers and data or otherwise  disclosed in writing to Lenders  prior to the date
hereof. Neither this Agreement nor any documents, financial statements, reports,
notices, schedules,  certificates,  statements or other writings furnished by or
on behalf of Borrower to Agent or any Lender in connection  with the negotiation
of this Agreement or the consummation of the transactions  contemplated  hereby,
or required  herein to be  furnished  by or on behalf of  Borrower,  contains to
Borrower's  knowledge any untrue or  misleading  statement of a material fact or
omits a material  fact  necessary to make the  statements  herein or therein not
misleading.  There is no fact known to Borrower which Borrower has not disclosed
to Agent and Lenders in writing which materially  affects  adversely nor, so far
as Borrower can now



<PAGE>


                                                                              36



foresee,  will materially affect adversely the business,  prospects,  profits or
financial  condition  of Borrower  or the  ability of  Borrower to perform  this
Agreement.

          4.19 Mall Site in Buildable  Condition.  The Agency has  delivered the
Leased Premises in "Buildable  Condition" as such term is defined in the Project
Agreement.

          4.20 Plans under REA.  Borrower has delivered all Plans required to be
delivered  under the REA to the other  parties  to the REA and such  Plans  have
either been approved or deemed approved  pursuant to the terms of the REA by all
of such parties.


            SECTION 5.  AFFIRMATIVE COVENANTS.
                        ----------------------

          Borrower agrees,  unless otherwise consented to in writing by Agent or
Lenders, as applicable, that, so long as the Commitments remain in effect or the
Notes  remain  outstanding  and  unpaid  or any  amount  is owing to any  Lender
hereunder or under any of the other Loan  Documents,  Borrower  shall fully keep
and perform each of the covenants set forth in this Section.

          5.1  Construction.  (a)  Borrower  shall  complete  the  erection  and
equipping  of  Borrower's  Work  with due  diligence  on or before  the  Outside
Completion  Date subject to and in  accordance  with the  Borrower  Construction
Plans, this Agreement,  the REA, the Project Agreement and the Leases, and shall
diligently enforce all of its rights, if any, under any of the Project Documents
to cause the Agency to complete the erection and  equipping of the Agency's Work
with due diligence,  subject to and in accordance  with the Agency  Construction
Plans and the Project  Agreement.  Borrower shall construct and equip Borrower's
Work and shall  diligently  enforce all of its rights,  if any, under any of the
Project  Documents to cause the Agency to construct  and equip the Agency's Work
in full  compliance  with the Legal  Requirements  affecting the Project and all
requirements of the appropriate Board of Fire Underwriters or other similar body
acting in and for the locality in which the Project is situated.

          (b) Upon demand of the Agent,  Borrower at its sole cost and  expense,
shall correct promptly any structural defect in the  Improvements,  any material
departure  from the Plans in  violation  of this  Agreement  and any  failure to
comply with applicable Legal  Requirements in all material respects (unless such
Legal  Requirements are being contested by Borrower in accordance with the terms
of the Mortgage).




<PAGE>


                                                                              37



          5.2 Performance  under Other  Agreements.  Borrower shall duly perform
and observe in all material  respects all of (a) the  covenants,  agreements and
conditions  on its part to be  performed  and  observed  under  each of the Loan
Documents and the Leases,  and (b) the  covenants,  agreements and conditions on
its part to be  performed  and  observed  under each of the  Project  Documents.
Borrower  shall  diligently  enforce  its rights and  remedies  under the Agency
Documents, the REA and the Anchor Leases in a commercially reasonable manner.

          5.3 No Encroachments.  The Improvements shall be constructed  entirely
on the Leased  Premises and shall not encroach  upon or overhang any easement or
right-of-way  or the land of others in any  material  manner.  When  erected the
Improvements  shall be wholly  within any building  restriction  lines,  however
established.  Borrower shall furnish to Agent promptly after the foundations for
the  Improvements  have  been  completed,  a  foundation  survey  prepared  by a
registered surveyor or engineer.

          5.4 Application of Insurance and Condemnation  Proceeds.  Any proceeds
of insurance or condemnation  received as a result of a casualty or taking shall
be applied  as  provided  in the  Mortgage.  In the event that Agent  shall make
available to Borrower the  proceeds of any fire or other  casualty  insurance or
condemnation  actually paid to Agent in respect of such damage or destruction of
the  Improvements  (after  deducting  therefrom  any sums  retained  by Agent in
reimbursement  for  costs  of  collection)  to pay the cost of  restoration,  as
provided in the  Mortgage,  Borrower  shall,  and shall  diligently  enforce its
rights,  if any,  under the Project  Documents  to cause the Agency to,  proceed
promptly  with  the  work  of  restoration  of the  Improvements  or  any  other
improvements  located  at the  Mall in  accordance  with  the  Plans  and  shall
prosecute the work of restoration diligently to completion.  Except as otherwise
provided in the Mortgage  with  respect to insurance  proceeds in an amount less
than $3,000,000, all insurance proceeds shall be held by Agent to secure payment
of  Borrower's  obligations  under this  Agreement,  the Notes and the  Security
Documents  and disbursed in accordance  with the  procedures  and subject to the
conditions  specified in this Agreement and the Mortgage for the disbursement of
Loan proceeds.  If any Event of Default or payment  Default shall occur prior to
completion of such work of  restoration,  then Agent,  at its option,  may apply
such  insurance  or  condemnation  proceeds  in  payment  of sums due under this
Agreement  or on the Notes or any of the  Security  Documents,  in such order as
Agent may elect in its sole discretion.  Any insurance or condemnation  proceeds
remaining  after  restoration of the  Improvements is completed shall be, (a) if
completion of such  restoration  occurs prior to the Completion Date, at Agent's
election,  applied in prepayment of the  principal  amount of the Loans,  in the
inverse order of maturity if payable in  installments,  or paid over to Borrower
or (b) if such completion of restoration  occurs after the Completion Date, paid
over to Borrower.



<PAGE>


                                                                              38




          5.5 Certain Notices. Borrower shall give notice to Agent promptly upon
the occurrence of:

          (a) the  receipt by Borrower  of any notice  given to Borrower  that a
     default by Borrower has occurred under any Anchor Lease,  Major Lease,  the
     REA, or any Project Document;

          (b) the giving by Borrower of any notice of default or other  material
     notice  under any  Anchor  Lease,  the REA,  any  Agency  Document  and any
     Construction Document;

          (c) the  giving by  Borrower  of any  notice  under  any  Major  Lease
     alleging  that a default has occurred  under such Major Lease or indicating
     Borrower's  intent  to  terminate  such  Major  Lease,  provided  that  the
     foregoing notice  requirement shall be satisfied if the default giving rise
     to such notice is  described  in the report  delivered by Borrower to Agent
     pursuant to subsection 5.13(a)(iii);

          (d) the receipt by  Borrower  of any notice  given to Borrower or with
     respect  to the  Project  or the giving by  Borrower  of any  notice  which
     alleges that any portion of  construction or equipping or furnishing of the
     Improvements does not comply with any Legal Requirement;

          (e)  Borrower  becoming  aware of any  development  or event  which is
     reasonably likely to have a Material Adverse Effect;

          (f) any condition which results or is reasonably likely to result in a
     Force Majeure Delay in completion of the Improvements; and

          (g) the following  events, as soon as possible and in any event within
     30 days  after  Borrower  knows  or has  reason  to know  thereof:  (i) the
     occurrence or expected  occurrence of any Reportable  Event with respect to
     any ERISA  Plan,  a failure to make any  required  contribution  to a ERISA
     Plan,  the creation of any Lien in favor of the PBGC or a ERISA Plan or any
     withdrawal from, or the termination,  Reorganization  or Insolvency of, any
     Multiemployer  Plan or (ii) the institution of proceedings or the taking of
     any other action by the PBGC or Borrower or any Commonly  Controlled Entity
     or any  Multiemployer  Plan with  respect to the  withdrawal  from,  or the
     terminating, Reorganization or Insolvency of, any ERISA Plan.

Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible  Officer setting forth details of the occurrence referred to in such
notice and stating  what action  Borrower  proposes to take with respect to such
occurrence.

          5.6 Plan Changes.  Borrower,  without the prior written consent of the
Agent but subject to the provisions of Section



<PAGE>


                                                                              39



2.3,  shall not make (a) any single change to the Plans or direct or make change
orders or change  bulletins  that would  require  Borrower to incur greater than
$500,000 in  additional  costs or (b) any changes to the Plans or direct or make
change orders or change bulletins that would, in the aggregate, require Borrower
to incur greater than $3,000,000 in additional costs,  provided,  however,  once
the aggregate  increased costs resulting from approved or unapproved  changes to
the Plans or change orders exceeds  $3,000,000,  Agent's prior approval shall be
necessary prior to Borrower's  making any change to the Plans that would require
Borrower to incur  greater  than  $250,000  in  additional  costs.  Furthermore,
Borrower shall provide copies of all change orders,  change  bulletins and other
revisions  of the  Plans  and  the  Construction  Agreement  to  the  Consulting
Professional  and, if Agent's prior approval is required under this Section,  to
Agent,  prior to  commencement of any work reflecting such changes or revisions,
and, if Agent's prior approval is not required pursuant to this Section,  to the
Agent, promptly after such work is commenced.

          5.7  Indemnification.  Borrower hereby  indemnifies  Agent and Lenders
against any claims for brokerage fees or commissions asserted in connection with
the Loans arising out of or in  connection  with any act or omission of Borrower
or any  Affiliate  of Borrower  and agrees to pay all  reasonable  out-of-pocket
expenses  incurred by Lenders in connection  with the defense of any such action
or proceeding brought to collect any such brokerage fees or commissions.

          5.8 Expenses.  (a) Borrower  shall pay or reimburse  Agent and Lenders
for all reasonable  out-of-pocket  expenses incurred by Agent and Lenders before
and after the date of this  Agreement  with respect to any and all  transactions
contemplated by this Agreement including, without limitation, the preparation of
any document  reasonably required by Agent and the enforcement of any of Agent's
and/or Lenders' rights under this Agreement,  but excluding expenses incurred by
any  Lender  in  connection  with its sale of  participating  interests  in,  or
assignment of, all or any part of its rights and obligations  hereunder pursuant
to subsection  10.11(b) and (c) of this  Agreement.  From time to time after the
closing, Borrower may receive statements for such expenses,  including,  without
limitation,   attorneys'  fees  and  disbursements.   Borrower  shall  pay  such
statements promptly upon receipt. Agent acknowledges that the Administrative Fee
is payable in consideration for the ordinary administration of the Loan by Agent
and that no additional compensation shall be due therefor.

          (b) If,  with  respect  to the  Loans or the  Project,  any  action or
proceeding is commenced by Agent (including,  without limitation,  any action to
foreclose  under the Mortgage or to collect the Loans or enforce the Guaranties)
or to which Agent  and/or one or more  Lenders are made a party,  or in which it
becomes necessary to defend or uphold the lien of the Mortgage,



<PAGE>


                                                                              40



or in which Agent and/or one or more Lenders are served with any legal  process,
discovery  notice or  subpoena  relating  to  Lenders'  lending to  Borrower  or
accepting  the  Guaranties,  Borrower will  reimburse  Agent and Lenders for all
expenses (including,  without limitation,  attorney's fees and costs) which have
been or may be incurred by Agent and Lenders  arising from or in connection with
such action or proceeding promptly upon receipt of statements for such expenses.

          (c) Any  amounts  payable  or  reimbursable  by  Borrower  under  this
subsection  which are not paid or reimbursed  within thirty days after demand by
Agent  shall bear  interest  at the rate of interest  payable  under  subsection
3.8(c) from the date of such demand until payment.  Agent shall furnish Borrower
with  supporting  information  for such  statements as  reasonably  requested by
Borrower.

          5.9  Construction  Schedule.  As soon as  reasonably  available  after
commencement  of  construction,  Borrower  shall  provide  Agent,  at Borrower's
expense, with a critical path method schedule for completion of the construction
and equipping of the Improvements, which schedule shall be in form and substance
reasonably satisfactory to Agent.

          5.10  Inspection  of  Books  and  Records.  Agent  and the  Consulting
Professional,  and designated  representatives  of either of them,  shall,  upon
reasonable  prior notice and at  reasonable  times,  have the right of entry and
free access to the Improvements (subject to the rights of lessees) and the right
in the presence of a  representative  of Borrower  (provided  Borrower makes its
representative  available  on a timely  basis) to inspect  all work done,  labor
performed and materials  furnished in and about the  Improvements and to inspect
all books,  contracts,  records and plans and shop drawings of Borrower relating
to the Project or the  construction of the  Improvements.  Upon reasonable prior
notice  and  at  reasonable  times,  Borrower  shall  make  its  representatives
available  for  Agent  or  the  Consulting   Professional   and  any  designated
representative of either, to discuss Borrower's  affairs,  finances and accounts
relating to the Project and the  construction of the  Improvements  and Borrower
will cooperate, and cause the Construction Manager to cooperate,  with Agent and
the Consulting Professional and any designated representative of either of them.

          5.11  Movement  of  Unincorporated  Materials.  With  respect  to  any
Unincorporated Materials for which advances of the Loan have been made, Borrower
shall  give  notice to Agent not less than five days  prior to any change in the
location of such Unincorporated Materials,  which notice shall state the date on
which transfer shall  commence,  the destination and the name and address of the
carrier. If requested by Agent at the time such notice is given,  Borrower shall
furnish  to  Agent,  promptly  when  available,   copies  of  bills  of  lading,
certificates of bailment, warehouse receipts and other documents and instruments
evidencing



<PAGE>


                                                                              41



Borrower's rights in the  Unincorporated  Materials in transit and on arrival at
destination.

          5.12  Inspection  Reports.  Borrower  shall  furnish,  or  cause to be
furnished,  to the Consulting  Professional as soon as available:  (a) copies of
all  construction  contracts  and  purchase  orders  entered into after the date
hereof,  (b) copies of contractor trade payment  breakdowns and monthly job cost
reports  prepared by Borrower  and the  Construction  Manager and (c) such other
information  as may be reasonably  requested by the Consulting  Professional  in
order to make reports to Agent as to the status of the Project.  Upon request by
Agent,  Borrower  shall  furnish  or cause  to be  furnished  to the  Consulting
Professional,  copies of all testing and quality control reports and Architect's
field reports prepared for and delivered to Borrower.

          5.13  Financial  Statements;  Other  Information.  (a) Borrower  shall
deliver  to the Agent (i)  within  90 days  after the end of each of its  fiscal
years after the opening of the Project to the  general  public,  annual  audited
operating  statements  and a rent roll for the Project and a copy of the balance
sheet and  statement  of sources  and uses of funds of Borrower as at the end of
such year, and related statements of income and retained earnings and changes in
financial  position for such year,  (ii) within 45 days after the end of each of
its fiscal  quarters  after the opening of the  Project to the  general  public,
(other than the last)  quarterly  operating  statements  and a rent roll for the
Project and a copy of the  balance  sheet and  statement  of sources and uses of
funds of  Borrower as at the end of such  quarter,  and  related  statements  of
income and retained earnings and changes in financial  position for such quarter
and a statement of Borrower's  calculation of the  Guarantied  Obligations as of
the end of such fiscal  quarter  and (iii)  within 20 days after the end of each
two-month  period,  a  leasing  status  report,  tenant  sales  reports,  tenant
receivable  reports  and a  current  rent  roll,  each  in the  form  reasonably
acceptable to Agent.  The foregoing  financial  statements of Borrower  shall be
certified by a  Responsible  Officer and,  with respect to the annual  financial
statements  of  Borrower,  also by  Deloitte & Touche or such  other  nationally
recognized  certified public  accountant  reasonably  approved by the Agent. All
financial  statements  of  Borrower  delivered  to the  Agent  shall be true and
correct in all material respects, shall be prepared in accordance with generally
accepted accounting  principles,  consistently  applied,  and in each case shall
fairly  present the  financial  condition of the subject as of the dates thereof
and each of the operating  statements shall be in reasonable  detail and include
cash flow and any other  information  reasonably  requested  by the  Agent.  Any
material adverse change that occurs in the financial condition of Borrower after
the date of the most recent financial  statements shall be reported to the Agent
promptly.  None of the financial  statements of Borrower or any  certificate  or
statement  furnished to the Agent by or on behalf of Borrower in connection with
the transactions contemplated hereby, shall contain any untrue statement of a



<PAGE>


                                                                              42



material  fact or omit to state a material  fact  necessary in order to make the
statements contained therein or herein not misleading.

          (b) Borrower shall furnish to the Agent:

               (i)  concurrently  with the delivery of the financial  statements
          referred to in subsection (a), a certificate of a Responsible  Officer
          (A) stating that, to the best of such person's  knowledge,  after such
          examination or  investigation as is necessary to enable such person to
          make an  informed  judgment,  Borrower  during such period has, in all
          material  respects,  observed or performed  all of its  covenants  and
          other  agreements,  and satisfied every  condition,  contained in this
          Agreement  and all other Loan  Documents to be observed,  performed or
          satisfied by it, and that such person has obtained no knowledge of any
          Default  or  any  Event  of  Default,  except  as  specified  in  such
          certificate and (B) stating  Borrower's  calculation of the Guarantied
          Obligations as of the end of such fiscal year;

               (ii) not later than November 30th of each year  commencing  after
          Completion,  a copy of the  projections  by Borrower of the  operating
          budget and cash flow for the Project for the following year; and

               (iii) promptly,  such additional  financial and other information
          as the Agent may from time to time reasonably request.

          5.14  Administration  Fee.  Borrower agrees to pay on the first day of
each calendar quarter,  for the immediately  preceding calendar quarter,  to the
Agent an administrative fee (the "Administrative Fee") in an amount equal to (i)
$30,000 (i.e.,  $120,000 per calendar year) for the period beginning on the date
hereof and ending on the date of Completion of the Improvements and (ii) $15,000
(i.e.,  $60,000 per calendar year) for the period  beginning after Completion of
the  Improvements  and ending on the date that the Loans are repaid in full. The
Administrative  Fee shall be pro rated for any partial  calendar  quarter during
which this Agreement is in effect.

          5.15 Leasing.  Borrower shall  generally lease space in the Project to
quality tenants at prevailing market rents and other market terms.





<PAGE>


                                                                              43



          SECTION 6.  NEGATIVE COVENANTS
                      ------------------

          Borrower agrees,  unless otherwise consented to in writing by Agent or
Lenders,  which  consent  shall not be  unreasonably  withheld  with  respect to
subsections 6.3, 6.4 and 6.6, that, so long as the Commitments remain in effect,
any Note  remains  outstanding  and  unpaid or any other  amount is owing to any
Lender  hereunder or under any of the other Loan  Documents,  Borrower shall not
take or permit the actions set forth in this Section.

          6.1  Additional  Debt.  Borrower  shall not create,  incur,  assume or
suffer to exist any  Indebtedness  other than (a) the Loans,  (b) trade payables
incurred  in the  ordinary  course of  business,  (c)  unsecured  loans  made to
Borrower by any partner in Borrower,  provided that such loans are  subordinated
to the Loans in a manner reasonably  acceptable to Agent and (d) unsecured loans
incurred for working  capital  purposes of the Project  (which shall include the
right to enter into  Financing  Leases),  provided that such loans and Financing
Leases  described in clause (d) shall (i) not become  effective  until after the
Completion  of the  Project,  (ii) be  subordinated  to the  Loans  in a  manner
reasonably  satisfactory  to Agent and (iii) be in an  aggregate  amount  not to
exceed $10,000,000 at any time outstanding.

          6.2 Changes in Plans. (a) Borrower shall not modify or supplement,  or
permit the modification or supplementing of, the Plans in any respect,  which in
the reasonable determination of the Consulting Professional would (i) materially
adversely  affect the  structural  integrity  of the  Improvements  or alter the
nature of the  Improvements  as a  regional  shopping  center or (ii)  cause the
Improvements to be Completed after the Outside  Completion Date and (b) Borrower
shall not modify or supplement,  or permit the modification or supplementing of,
the Plans in any respect  without  the prior  written  consent of lessees  under
Leases which specify construction requirements,  parties to any Project Document
which have the  authority  to approve any changes in Plans and all  Governmental
Authorities which previously have approved the matters to be changed.

          6.3 Intentionally Deleted.

          6.4 Changes in Agreements. Borrower shall not:

      (a) surrender,  terminate,  cancel, rescind or supplement,  alter, revise,
modify or amend any Agency Document, Anchor Lease or the REA (including, without
limitation,  allowing  the ipso facto  amendment  which is  contemplated  by the
penultimate  paragraph  of Section  13.2 of the REA to occur) or permit any such
action to be taken.

      (b)  amend,  modify  or waive  any of the  provisions  of the  Partnership
Agreement  which would result in (i) the reduction or impairment of authority of
Guarantor, (ii) the loss by Guarantor



<PAGE>


                                                                              44



of control over the operation and management of Borrower or the Project or (iii)
the reduction of  Guarantor's  ownership  interest in Borrower to an amount less
than 51% of the total ownership and economic interests in Borrower.

      (c) enter into a Management Agreement which does not expressly provide (i)
that the Agent  shall  have the right to  terminate  such  Management  Agreement
without penalty or cost to Agent after the occurrence and during the continuance
of an Event of Default  and (ii) that the Agent or its  designee  shall have the
right to continue the Management  Agreement in full force in accordance with the
terms of such Management  Agreement for a period not to exceed 120 days from the
date that the Agent or its designee takes over the Project.

      (d) amend,  modify or waive any of the material  provisions  of any of the
Construction  Documents  or permit  any such  action to be taken,  except to the
extent such changes do not materially affect the rights or interests of Agent or
the  Lenders  (which  rights  shall  include  the  Agent's  right to  succeed to
Borrower's interest under the Construction Documents after an Event of Default).

          6.5 Transactions  with  Affiliates.  Borrower shall not enter into any
transaction,  including,  without  limitation,  any  purchase,  sale,  lease  or
exchange of property or the rendering of any service,  with any Affiliate except
for transactions  which (a) are upon fair and reasonable terms no less favorable
to Borrower  than it would  obtain in a  hypothetical  comparable  arm's  length
transaction  with a Person not an  Affiliate  or (b)  neither  the Agent nor the
Lenders  or any  of  their  successors  or  assigns  would  be  bound  upon  the
foreclosure or assignment-in-lieu of foreclosure of the Project.

          6.6  Appointment  of  Manager;  Amendment  of Third  Party  Management
Agreement.  Borrower  shall not appoint any Manager  other than an  Affiliate of
Guarantor.  If Agent consents to Borrower  entering into a Management  Agreement
with a Manager that is not an Affiliate of Guarantor,  Borrower shall not amend,
modify or terminate such Management Agreement.


          SECTION 7. CONDITIONS PRECEDENT TO FIRST ADVANCE
                     -------------------------------------

          Lenders  shall  not be  obligated  to make the first  advance  of Loan
proceeds  until all of the  conditions set forth in this Section shall have been
satisfied.

          7.1 Closing  Documents.  Agent shall have  received  all the items set
forth in this  subsection,  in each case in form and substance  satisfactory  to
Agent.

          (a) Taxes.  Evidence that all past and current  taxes and  assessments
     (or installments thereof, if payable in



<PAGE>


                                                                              45



      installments)  applicable  to the Project or payable by Borrower have been
      paid, except for any taxes or assessments which are not yet delinquent.

          (b) Title Insurance Policy. A mortgagee's policy of title insurance or
     satisfactory evidence of Title Company's unconditional  obligation to issue
     such a  policy,  dated as the date of the  first  advance  of the Loan (the
     "Title Insurance Policy").  Such Title Insurance Policy shall (i) be in the
     amount of the Loan;  (ii) be issued at  ordinary  rates;  (iii)  insure the
     Agent that the Mortgage creates a valid Lien on the Leased Premises and the
     Improvements   located   thereon,   free  and  clear  of  all  defects  and
     encumbrances,  except for the Permitted Exceptions;  (iv) be in the form of
     policies  providing  the  Agent  with the  broadest  coverage  that is then
     offered by Title Company to mortgagees of properties located in the City of
     Norfolk and Commonwealth of Virginia and that is otherwise  satisfactory to
     the Agent; (v) provide full coverage  against  mechanics' liens and against
     survey  exceptions  not specified as Permitted  Exceptions;  (vi) contain a
     pending   disbursements   clause  or  endorsement  in  form  and  substance
     satisfactory  to Agent and a commitment of Title Company to provide notices
     of  title  continuation  or  endorsement  sufficient  to  enable  Agent  to
     determine that title to the Project is satisfactory prior to Agent's making
     any  subsequent   advance  of  the  Loan;  and  (vii)  contain  such  other
     endorsements and affirmative coverage as Agent may request. The Agent shall
     be furnished  with copies of all documents that appear as exceptions in the
     Title Insurance Policy.

          (c) Payment of Title Insurance Premium. Evidence satisfactory to Agent
     that all premiums in respect of such title insurance policy have been paid.

          (d) Survey. A survey of the Leased Premises (current to within 60 days
     of the date of the first  advance of the Loan),  certified to Lenders by an
     independent  professional  licensed  land surveyor  satisfactory  to Agent,
     which survey shall be made in accordance  with the Minimum  Standard Detail
     Requirements for Land Title Surveys jointly  established and adopted by the
     American  Title  Association  and the American  Congress on  Surveying  and
     Mapping in 1988.  Without  limiting the generality of the foregoing,  there
     shall be surveyed and shown on such survey the following: (i) the locations
     of all buildings and other  structures,  if any, on the Leased Premises and
     the  established  building  setback lines;  (ii) the lines and the width of
     streets abutting the Leased Premises;  (iii) all access and other easements
     appurtenant  to or  necessary to the use of the Leased  Premises;  (iv) all
     roadways,  paths,  driveways,  easements,   encroachments  and  overhanging
     projections and similar encumbrances affecting the Leased Premises, whether
     recorded,  apparent from a physical  inspection  of the Leased  Premises or
     otherwise



<PAGE>


                                                                              46



     known to the  surveyor;  (v) any party walls with  structures  on adjoining
     property  any  encroachments  on any  adjoining  property  by the  building
     structures and improvements on the Leased Premises;  and (vi) if the Leased
     Premises is described  by  reference to a filed map, a legend  relating the
     survey to such map.

          (e) Availability of Utilities. Letters from local utility companies or
     Governmental  Authorities  stating, or such other evidence  satisfactory to
     Agent,  showing that gas, electric power,  sanitary and storm sewers, water
     and all other  utilities  (i) that are  necessary  and required  during the
     construction  period have been  completed  and will be  available in such a
     manner as to assure Agent that  construction  will not be impeded by a lack
     of utilities and (ii) that are necessary for operation and occupancy of the
     Improvements  will be completed in such a manner and at such a time as will
     assure the  opening  and  operation  of the  Improvements  on or before the
     Outside Completion Date.

          (f) Architect's Certificate. The Architect's Certificate.

          (g) Construction  Manager's  Certificate.  The Construction  Manager's
     Certificate and a certified list of all construction contracts entered into
     in connection with the Improvements.

          (h) Hazard Insurance.  Policies or certificates of insurance  required
     by the Mortgage and any of the other  Security  Documents,  accompanied  by
     evidence of the payment of the premiums for such  policies,  with mortgagee
     loss payable endorsements naming Lenders as loss payees and confirmation by
     Agent's insurance  consultant that the insurance in place complies with all
     requirements of the Mortgage.

          (i) Flood  Insurance.  If required by the Mortgage,  a policy of flood
     insurance  in an amount  equal to the  lesser of (i) the  maximum  limit of
     coverage  available  under the National  Flood  Insurance  Act of 1968,  as
     amended, and (ii) the amount of the Loan.

          (j) Permits,  Etc. Copies of all Permits  required for Borrower's Work
     as  available,  and, to the extent  available  to  Borrower,  copies of all
     Permits required for Agency's Work.

          (k) Soils and  Geological  Report.  If requested by Agent, a soils and
     geological  report,  including a summary of soils tests borings issued by a
     professional engineer satisfactory to Agent.




<PAGE>


                                                                              47



          (l)  Opinion  of Counsel  for  Borrower.  An  opinion  of counsel  for
     Borrower.

          (m)  Opinion  of Counsel  for  Guarantor.  An  opinion of counsel  for
     Guarantor.

          (n) Project Documents.  Certified copies of duly executed counterparts
     of the Major Agreements.

          (o) Plans. A copy of the Plans.

          (p) Loan Documents. Duly executed copies of all Loan Documents.

          (q) Budget. The Budget,  together with the cost breakdown and schedule
     for construction of the  Improvements  setting forth all items of costs and
     expenses  and  estimating  the  construction  trade  schedules  required to
     complete the construction and equipping of the Improvements.

          (r)  Organizational  Documentation.  For Borrower and Guarantor,  with
     respect to each such entity:

               (1)  the  partnership  agreement  including  all  amendments  and
          attachments, certified by a general partner;

               (2)  the  partnership   certificate   including  all  amendments,
          certified by an official in whose office it is filed or recorded;

               (3) any certificates filed or recorded or required to be filed or
          recorded by such  partnership  in the state of its  formation  and the
          state  where the Land is  located  in order for it to do  business  in
          those states;

               (4) any consents by other  partners  required  for the  borrowing
          contemplated  by  this  Agreement  and  the  execution,  delivery  and
          performance  of the Loan  Documents  or the  execution,  delivery  and
          performance of the Guaranty, as applicable; and

               (5) if requested  by Lender,  an  acknowledgement  by each of the
          partners in Borrower of his or its continued membership in Borrower.

          (s) Borrowing Certificate and Requisition. A Borrowing Certificate and
     Requisition, duly executed by Borrower.

          (t)  Pre-Leasing  Requirement.  Fully  executed  counterparts  of  the
     Nordstrom's  Lease and the Dillards' Lease. In addition,  each of Nordstrom
     and Dillards shall



<PAGE>


                                                                              48



     have executed the REA in form and substance satisfactory to the Lenders.

          (u) Environmental  Report. An environmental report with respect to the
     Leased  Premises in form and substance  satisfactory  to Agent, in its sole
     discretion.

          (v)  Construction  Schedule.  The Agent shall have received a critical
     path method  schedule for completion of the  construction  and equipping of
     the Improvements in form and substance satisfactory to Agent.

          (w) Engineer's Certificate. The Engineer's Certificate.

          (x)  Lien  Searches.  The  results  of a  recent  search  by a  Person
     satisfactory to Agent,  of the Uniform  Commercial  Code,  judgment and tax
     lien filings which may have been filed with respect to personal property of
     Borrower.

          (y) Solvency Certificates. A Solvency Certificate, duly executed, from
     each of Borrower and Guarantor.

          (z) Appraisal.  An independent M.A.I.  appraisal which shall comply in
     all respects  with the  standards  for real estate  appraisals  established
     pursuant to the Financial  Institutions Reform,  Recovery,  and Enforcement
     Act of 1989.

          (aa) Leases.  Copies of all fully executed Leases of the  Improvements
     existing on the date of this  Agreement,  together  with,  to the extent in
     Borrower's possession and not prohibited by the terms of the Lease, current
     financial  statements  of the  tenants  (and  guarantors  of  the  tenants'
     obligations, if applicable) thereunder.

          (ab)  Standard  Form of Lease.  The  standard  form of lease  Borrower
     intends to use in connection with the leasing of space in the Improvements.

          (ac)  REA.  A copy,  certified  to be true and  complete,  of the REA,
     together  with  estoppel  certificates  with  respect  thereto from each of
     Dillards, Nordstrom and the Agency.

          (ad)  Management  and  Leasing  Contracts.   Copies  of  all  existing
     contracts providing for the management,  maintenance,  operation or leasing
     of the Project or any  improvements  thereon,  together with, in each case,
     such collateral assignments as Agent may require.

          7.2 Fees. Agent shall have received any fees payable hereunder and all
reasonable  legal  fees  and   disbursements  of  Lenders'  counsel  payable  in
connection  with the  preparation,  execution and delivery of the Loan Documents
and the consummation of the transactions contemplated by the Loan Documents.



<PAGE>


                                                                              49




          7.3 Agency Construction  Funding.  Agent shall have received evidence,
satisfactory to Agent,  that the Agency has appropriated and funded no less than
$95,000,000 to cause the completion of the Agency's Work in accordance  with the
Project Agreement and the Agency Construction Plans.

          7.4  Accounting.  Agent shall have received and approved an accounting
of all  expenditures  for costs shown on the Budget  incurred prior to the first
advance of the Loan.

          7.5 Representations and Warranties. The representations and warranties
which are contained in any of the Loan Documents or any certificate, document or
financial or other  statement  furnished  under or in  connection  with the Loan
Documents,  shall be correct in all  material  respects on and as of the date of
the first advance as if made on and as of such date.

          7.6 No  Default  or Event of  Default.  No Default or Event of Default
shall have occurred and be continuing on such date or after giving effect to the
advance to be made on such Borrowing Date.

          7.7 Notices of Leasehold Mortgage.  Borrower shall have provided Agent
executed notices to the Agency, as lessor under the Mall Lease and each party to
the REA,  informing such parties of the existence of the Mortgage and the notice
address of Agent,  in a manner which will ensure that Agent will be afforded all
rights of a leasehold  mortgagee  under the Mall Lease and the REA and otherwise
in form and substance reasonably satisfactory to Agent.

          7.8 Surety Bonds; Construction Contracts. Borrower shall have provided
evidence reasonably  satisfactory to Agent and the Consulting  Professional that
the Construction  Manager and all subcontractors  which are required pursuant to
the terms of the  relevant  Construction  Documents or  subcontracts  to procure
payment and performance  bonds have procured such bonds in form and substance as
required by such  Construction  Documents.  Agent shall have  received  executed
copies of all trade contracts for any contractors  which are being paid with the
proceeds of the Loans.

          7.9  Additional  Matters.  All of the  foregoing  items  and all other
documents and legal matters in connection with the transactions  contemplated by
this  Agreement  shall be  satisfactory  in form and  substance to Agent and its
counsel.


          SECTION 8. CONDITIONS PRECEDENT TO SUBSEQUENT ADVANCES
                     -------------------------------------------

          8.1 All  Subsequent  Advances.  Lenders shall not be obligated to make
any advance of Loan proceeds  subsequent to the initial advance until all of the
conditions set forth in this subsection shall have been satisfied.

          (a)  Satisfactory  Title.  The Security  Documents shall  constitute a
     valid first lien on the Collateral for the full



<PAGE>


                                                                              50



     amount of the Loan advanced to and including  such date,  free and clear of
     all Liens except for Permitted Exceptions and Permitted Encumbrances. Agent
     shall  have  been  furnished  with a  notice  of title  continuation  or an
     endorsement to the title  insurance  policy issued to Lenders in connection
     with the first advance of the Loan, which continuation or endorsement shall
     state  that  since the last  disbursement  of the Loan  there  have been no
     changes  in the  state of  title  to the  Project  and  that  there  are no
     additional survey exceptions not previously approved by Agent.

          (b) No Other Security Interests. Except as otherwise permitted herein,
     all  materials  and  fixtures  incorporated  in  the  construction  of  the
     Improvements  shall have been  purchased so that their  absolute  ownership
     shall have vested in  Borrower  immediately  upon  delivery to the Land and
     Borrower  shall have  produced  and  furnished,  if required by Agent,  the
     contracts,  bills of sale or other  agreements  under  which  title to such
     materials and fixtures is claimed.

          (c) Statement of Expenditures.  Agent shall have received with respect
     to  Borrower's  Work,  a  statement  of  Borrower,  in form  and  substance
     satisfactory to Agent,  setting forth the names,  addresses and amounts due
     or to  become  due  as  well  as  the  amounts  previously  paid  to  every
     contractor,   subcontractor,  and  supplier  furnishing  materials  for  or
     performing labor on the construction of any part of Borrower's Work.

          (d) Representations and Warranties. The representations and warranties
     contained  in any of the Loan  Documents  or any  certificate,  document or
     financial or other statement furnished under or in connection with the Loan
     Documents,  shall be  correct  in all  material  respects  on and as of the
     Borrowing Date for such advance as if made on and as of such date.

          (e) No  Default  or Event of  Default.  No Default or Event of Default
     shall  have  occurred  and be  continuing  on such date or result  from the
     advance to be made on such Borrowing Date.

          (f)  Borrower's  Work.  Agent shall have  received and approved (i) an
     inspection report of the Consulting Professional and the Architect covering
     the  progress  of  construction,  conformity  of  Borrower's  Work with the
     Borrower  Construction  Plans,  quality of work completed and percentage of
     work completed and standard form G-702 (or such  alternate form  reasonably
     approved by Agent) executed by the Architect and the Construction  Manager,
     (ii) a draw request signed by the  Construction  Manager,  satisfactory  in
     form and substance to Agent,  with appropriate  insertions,  accompanied by
     true copies of unpaid  invoices,  receipted  bills and lien waivers for all
     items  paid  with  the  previous  advance  of the  Loans,  and  such  other
     supporting information as Agent may request. Agent shall have also received
     (i) an inspection  report of the Consulting  Professional and the Architect
     covering the progress of



<PAGE>


                                                                              51



     construction,  conformity of the Agency's Work relating to items covered by
     the Garage  Agreement with the Agency Plans,  quality of work completed and
     percentage of work completed and standard AIA form G-702 (or such alternate
     form  reasonably  approved  by Agent)  executed  by the  Architect  and the
     Construction  Manager  and with  respect to any  request for an advance for
     Borrower's  contribution  towards the  construction  of the parking  garage
     under the Garage Agreement,  Agent shall have confirmed that the conditions
     to  Borrower's  obligation  to make  such  contribution  under  the  Garage
     Agreement have been satisfied.

          (g) Other Costs.  In the case of advances to pay the costs included in
     the  Budget  that  are not  among  the  costs  described  in the  preceding
     paragraph,  Agent shall have received  such  evidence as it may  reasonably
     require  that  such  costs  have  been  properly  incurred  and are due and
     payable.

          (h) Evidence of Compliance.  All instruments  relating to each advance
     and all actions  taken on or prior to each advance in  connection  with the
     performance of the Loan Documents shall be satisfactory to Agent, and Agent
     shall  have been  furnished  with such  documents,  reports,  certificates,
     affidavits and other  information,  in form and substance  satisfactory  to
     Agent,  as  Agent  may  require  to  evidence  compliance  with  all of the
     provisions of the other Loan Documents.

          (i) Lien Waivers. Borrower shall have furnished to Lender with respect
     to  Borrower's  Work,  lien waivers in form and substance  satisfactory  to
     Agent from the Construction  Manager and all  contractors,  subcontractors,
     suppliers and materialmen,  evidencing that they have been paid in full for
     all work  performed  or  materials  supplied  to the date of the  preceding
     advance, except for retentions provided for in this Agreement.

          (j) Agreements.  Each of the Major  Agreements  shall be in full force
     and effect.  There shall exist no default,  after the giving of notice,  if
     applicable,  and/or expiration of cure periods,  if applicable,  by (i) any
     party other than Borrower under any Major Agreement that, in the reasonable
     judgement of Agent,  could have a Material Adverse Effect and (ii) Borrower
     under any Agency  Document,  any Anchor Lease,  the REA or any Construction
     Document,  subject to Borrower's  right,  with respect to the  Construction
     Documents, to dispute in consultation with Agent, both acting in good faith
     to determine the proper course of action to be taken under such agreements,
     the charges or amounts which may be due under such agreements.

          (k) Damage or Injury.  The Improvements shall not have been materially
     damaged by fire or other casualty  unless there shall have been received by
     Agent or a person  approved  by Agent,  or unless  the  relevant  insurance
     company  shall have  confirmed  coverage for such casualty and committed to
     disburse,  insurance proceeds  sufficient in the sole judgment of Agent and
     the Consulting Professional, to effect satisfactory restoration and



<PAGE>


                                                                              52



     completion of the Improvements on or before the Outside Completion Date.

          (l)  Taxes.  Agent  shall  have  received  evidence  that all past and
     current (if then due and payable) taxes and  assessments  applicable to the
     Project or payable by Borrower  in  connection  with the Project  have been
     paid.

          (m)  Waived  Conditions.  Upon the  request of Agent,  all  conditions
     waived with respect to the initial advance or any subsequent  advance shall
     be met.

          (n) Borrowing Certificate and Requisition. Agent shall have received a
     Borrowing Certificate and Requisition dated the date of such advance.

          (o) No  Litigation.  There  shall  be no  action,  suit or  proceeding
     (zoning  or  otherwise)  pending  against  or  involving  Borrower  or  the
     Collateral or with respect to any of the Permits in any court, or before or
     by any Governmental Authority,  whether federal, state, county or municipal
     which Agent  determines  to have a  reasonable  likelihood  to be adversely
     determined and which, if adversely  determined,  would be reasonably likely
     to have a Material Adverse Effect.

          (p) Surety Bonds; Construction Contracts. To the extent not previously
     delivered  to Agent,  Borrower  shall  have  provided  evidence  reasonably
     satisfactory to Agent and the Consulting Professional that the Construction
     Manager and all  subcontractors  which are required in accordance  with the
     terms of the relevant  Construction  Documents or  subcontracts  to procure
     payment  and  performance  bonds  have  procured  such  bonds  in form  and
     substance  as required  by such  Construction  Documents.  Agent shall have
     received  executed copies of all trade contracts for any contractors  which
     are being paid with the proceeds of the Loans.

          8.2 Completion of Improvements.  The Improvements  shall not be deemed
completed for purposes of this  agreement  until all of the conditions set forth
in this subsection shall have been satisfied.

          (a) The  Improvements  shall  have  been  completed  substantially  in
accordance  with the Plans and  accepted by Borrower  subject to  completion  of
minor "punch  list" items having an aggregate  cost to complete or repair not to
exceed $1,500,000;

          (b) The  Agency's  Work shall  have been  completed  substantially  in
accordance with the Agency Plans;

          (c) The Agent shall have received the following,  in each case in form
and substance satisfactory to the Agent:




<PAGE>


                                                                              53



               (i)  evidence  of the  approval by all  appropriate  Governmental
          Authorities of the  Improvements  as being complete as to construction
          including,  without limitation, a copy of the Temporary Certificate of
          Occupancy;

               (ii)  the   certificate   of  (a)  the   Architect  and  (b)  the
          Construction   Manager  that  the  Improvements  have  been  completed
          substantially  in accordance with the Plans,  that connection has been
          made to all appropriate utility facilities; and

               (iii) a perimeter survey showing the completed Improvements,  all
          easements on and  appurtenant to the Leased  Premises and the location
          of access to the Leased  Premises and all utility and water  easements
          directly  affecting the Leased Premises with a certification  that the
          Improvements  do not  encroach on any  property  other than the Leased
          Premises,  that no buildings,  other  structures or  appurtenances  on
          other property  encroach on the Leased  Premises and that all set-back
          requirements have been complied with.


          SECTION 9. EVENTS OF DEFAULT
                     -----------------

          9.1 Events of Default.  The  occurrence of any of the events set forth
in this subsection shall constitute an Event of Default.

               (a) Payment of Note.  Borrower shall fail to pay any principal of
          any Note when due in accordance  with the terms thereof or hereof;  or
          Borrower  shall  fail to pay any  interest,  fees,  charges  or  other
          amounts payable  hereunder,  under any Note or any other Loan Document
          within three Business Days after written notice to Borrower.

               (b)  Unsatisfactory  Title.  Title to any part of the  Collateral
          shall not be  satisfactory to Agent,  in its reasonable  judgment,  by
          reason of any Lien or other  defect  (even  though any such defect may
          have existed at the time of any prior  advance),  except the Permitted
          Exceptions,  the Permitted  Encumbrances and the Liens of the Security
          Documents,  and such Lien,  encumbrance  or other  defect shall not be
          removed  or bonded or  insured  over  within 30 days  after  notice to
          Borrower.

               (c)  Unauthorized  Assignments,  Etc.  Borrower  shall assign any
          interest in this  Agreement  or any advance to be made or any interest
          in either.

               (d) Damage or  Destruction.  The  Improvements  are  partially or
          totally  damaged  or  destroyed  by fire or any other  cause  prior to
          Completion  and the  restoration of the  Improvements  cannot with the
          exercise of ordinary diligence  reasonably be expected to be completed
          on or prior to the Outside  Completion Date,  subject to extensions by
          the period of any Force Majeure Delay.




<PAGE>


                                                                              54



               (e) Cessation of Construction.  For the period  commencing on the
          date of the first  advance  hereunder  through the Outside  Completion
          Date,  there is any cessation of  construction  of Borrower's Work for
          any  period  after  the date  construction  commences  in excess of 60
          successive   calendar   days,   unless  the   conditions  of  each  of
          subparagraphs  (i), (ii), (iii) and (iv) of this subparagraph shall be
          satisfied at all times during such cessation:

                    (i) the cessation of construction  shall have been caused by
               reason of a Force Majeure Delay;

                    (ii) Borrower shall have made adequate provision, acceptable
               to Agent,  for the  protection of materials  acquired by Borrower
               stored on site and for the  protection  of the tenant finish work
               constituting  Borrower's  Work,  to the extent then  constructed,
               against deterioration and against other loss or damage and theft;

                    (iii) Borrower  shall have  furnished to Agent  satisfactory
               evidence  that  such  cessation  of  construction  will  not  (x)
               materially  adversely affect or jeopardize the rights of Borrower
               under agreements relating to the construction or operation of the
               Project  (including  any  Leases)  or (y)  increase  the  cost of
               construction  of Borrower's  Work,  unless  Borrower shall either
               demonstrate to Agent's  satisfaction  that an adequate  source of
               funds is and shall remain available to cover such increased costs
               or deposit with Agent additional funds in an amount equal to such
               increased costs; and

                    (iv) from time to time upon Agent's  request during any such
               cessation  of  construction,  Borrower  shall  furnish  to  Agent
               satisfactory  evidence that  (notwithstanding  such  cessation of
               construction)   the  completion  of  the   Improvements   can  be
               accomplished on or prior to the Outside  Completion Date, subject
               to extensions by the period of any Force Majeure Delay.

               (f)  Nonconforming  Work. The construction of all or any material
          part of the Improvements,  including,  without limitation,  materials,
          fixtures   and   articles,   is  performed  in  a  manner  other  than
          substantially  in  accordance  with the Plans and  Borrowers  does not
          promptly remedy the same after Borrower is aware of such variance.

               (g) Other Security  Agreements.  Any of the following occurs: (i)
          Borrower executes any chattel mortgage or other security  agreement on
          any materials,  fixtures or articles of personal  property used in the
          construction  of  Borrower's  Work,  which,  for  security  agreements
          securing an amount less than $1,000,000,  are not discharged  within 5
          days  after  notice  from  Agent  of the  existence  of such  security
          agreement or if any such materials, fixtures or articles are purchased
          pursuant to any



<PAGE>


                                                                              55



          conditional sales contract or other security agreement or otherwise so
          that the  ownership of such  materials,  fixtures or articles will not
          vest  unconditionally in Borrower upon delivery,  unconditionally  and
          free from  encumbrance  or (ii)  Borrower  does not  furnish  to Agent
          within 30 days after request the contracts, bills of sale, statements,
          receipted  vouchers  and  agreements,  or any  of  them,  under  which
          Borrower claims title to such materials, fixtures or articles.

               (h) Insufficient Funds.  Borrower shall fail to remedy any Budget
          Deficit  within  (i) 30 days  after  demand  by Agent  if such  Budget
          Deficit shall occur prior to the making of the first advance hereunder
          and (ii) 30 days after  demand by Agent if such Budget  Deficit  shall
          occur after the making of the first advance hereunder.

               (i)  Defaults  under  Other  Agreements.  Any default by Borrower
          shall occur under the Ground  Lease,  the REA, the Project  Agreement,
          any Anchor Lease,  the  Construction  Documents  (subject to Borrowers
          right to  dispute  amounts  due under the  Construction  Documents  in
          accordance with Section 8.1(j)),  and any notice,  if required,  shall
          have been given and any grace or cure  period,  if  applicable,  shall
          have expired.

               (j) Failure to Complete. The Improvements shall not be completed,
          as  provided  in this  Agreement,  as of the close of  business on the
          Outside Completion Date.

               (k) Other Covenants. Borrower shall default in the performance or
          observance of any of the provisions contained in Section 6.1 or 6.4 of
          this Agreement.

               (l)  Other  Defaults.  An Event of  Default  (as  defined  in the
          Mortgage)  shall have occurred and be  continuing,  or Borrower  shall
          default in the performance or observance of any other term,  covenant,
          condition or obligation contained in this Agreement or any of the Loan
          Documents  (other than the Mortgage)  and such default shall  continue
          for 30 days after  notice  shall have been given to  Borrower by Agent
          specifying  such  default and  requiring  such default to be remedied,
          which 30-day period may be extended to the extent  required  (provided
          that such  extended  period  shall not be longer  than 180 days at any
          time when the Guaranty  Percentage  is less than 100%) if such default
          is not  susceptible  of cure  within 30 days so long as  Borrower  has
          commenced  to cure such  default  within  such  30-day  period  and is
          thereafter diligently  prosecuting such cure to completion and so long
          as such  delay  is not  likely  to  have a  Material  Adverse  Effect;
          provided,  however, any default in the payment of an obligation to pay
          a liquidated amount (including,  without  limitation,  discharging any
          non-permitted Liens) shall be promptly cured after notice by Agent.

               (m)  Security  Documents.  Any of the  Security  Documents or the
          Guaranties shall cease for any reason to be in full force



<PAGE>


                                                                              56



          and effect (except in accordance with their terms), or Borrower or any
          other Person executing any Security  Document or any Guaranty shall so
          assert in writing.

               (n) Acceleration Events. Any Automatic Acceleration Default shall
          occur.

               (o)  ERISA.  (i)  Any  Person  shall  engage  in any  "prohibited
          transaction"  (as defined in Section  406 of ERISA or Section  4975 of
          the Code)  involving  any ERISA Plan,  (ii) any  "accumulated  funding
          deficiency"  (as  defined  in Section  302 of  ERISA),  whether or not
          waived,  shall  exist  with  respect  to any ERISA Plan or any Lien in
          favor of the PBGC or an  ERISA  Plan  shall  arise  on the  assets  of
          Borrower or any Commonly  Controlled Entity,  (iii) a Reportable Event
          shall occur with respect to, or  proceedings  shall commence to have a
          trustee appointed,  or a trustee shall be appointed,  to administer or
          to terminate,  any Single  Employer Plan,  which  Reportable  Event or
          commencement  of  proceedings  or  appointment of a trustee is, in the
          reasonable  opinion  of  Required  Lenders,  likely  to  result in the
          termination  of such Single  Employer Plan for purposes of Title IV of
          ERISA,  (iv) any Single  Employer Plan shall terminate for purposes of
          Title IV of ERISA,  (v)  Borrower or any  Commonly  Controlled  Entity
          shall, or in the reasonable  opinion of Required Lenders is likely to,
          incur any  liability  in  connection  with a withdrawal  from,  or the
          Insolvency  or  Reorganization  of, a  Multiemployer  Plan or (vi) any
          other event or condition shall occur or exist with respect to an ERISA
          Plan;  and in each case in clauses (i) through (vi) above,  such event
          or condition,  together with all other such events or  conditions,  if
          any,  could subject  Borrower to any tax,  penalty or other  liability
          which,  in the  aggregate,  is material  in relation to the  business,
          operations, property or financial or other condition of Borrower.

               (p)  Guarantor   Covenants.   Guarantor   shall  default  in  the
          performance or observance of any of the covenants  contained in any of
          the  Guaranties,  after any  required  notice  has been  provided  and
          applicable cure period has expired.

          9.2 Lenders' Right to Apply Loan Proceeds.  During the  continuance of
an Event of Default,  Lenders shall have the right,  but not the obligation,  to
disburse  and  directly  apply  proceeds  of the  Loans  to  satisfy  Borrower's
obligations if and to the extent the same are due and payable.  Borrower  hereby
authorizes  Lenders during the continuance of any Event of Default to hold, use,
disburse and apply advances of the Loans for costs incurred in constructing  and
equipping  Borrower's  Work,  payment or  performance of obligations of Borrower
under the Loan  Documents  (including  payment  of  interest  on the  Loans) and
preservation  and  protection of the  Collateral.  Such  disbursements  shall be
deemed  advances  of the Loans for all  purposes  and  shall be  secured  by the
Security Documents.




<PAGE>


                                                                              57



          9.3  Lenders'  Right to Stop  Advancing  Funds and to  Accelerate  the
Loans. In addition to any other rights and remedies Lenders may have pursuant to
the Loan Documents or otherwise, and without limitation, if any Event of Default
shall occur, (a) if such Event of Default is an Automatic  Acceleration Default,
automatically  the  Commitments  shall  terminate and the Loans  (together  with
accrued  interest) and all other amounts owing under this Agreement,  the Notes,
the Security Documents and the other Loan Documents immediately shall become due
and payable, and (b) if such event is any other Event of Default, either or both
of the  following  actions  may be taken:  (i) Agent may by notice to  Borrower,
declare the Commitments to be terminated,  in which case the  Commitments  shall
immediately  terminate;  and (ii) Agent may, by notice to Borrower,  declare the
Loans  (together with accrued  interest  thereon) and all other amounts  payable
under this  Agreement,  the Notes,  the  Security  Documents  and the other Loan
Documents to be due and payable,  in which case such amounts  immediately  shall
become due and payable.  Except as expressly  provided above in this subsection,
Borrower hereby  expressly  waives  presentment,  demand,  protest and all other
notices of any kind.

          9.4 Lenders'  Right to Complete.  Upon the  occurrence  and during the
continuance  of any Event of Default,  in addition to any other  remedies  which
Lenders may have  pursuant to the Loan  Documents,  or as provided by statute or
rule of law, Agent may enter upon the Leased  Premises and construct,  equip and
complete Borrower's Work in accordance with the Borrower Construction Plans with
such changes in the Borrower Construction Plans as Lenders may from time to time
and in their sole discretion deem appropriate, all at the risk, cost and expense
of Borrower.  Lenders  shall have the right at any and all times to  discontinue
any work  commenced by it in respect of Borrower's  Work or to change any course
of action undertaken by it and shall not be bound to Borrower by any limitations
or  requirements  of time  whether  set forth in this  Agreement  or  otherwise.
Lenders shall have the right and power,  but shall not be  obligated,  to assume
Borrower's  interest  under any contract made by or on behalf of Borrower in any
way relating to Borrower's  Work or the  construction  of Borrower's Work and to
take over and use all or any part or parts of the labor, materials, supplies and
equipment contracted for by or on behalf of Borrower,  whether or not previously
incorporated  into Borrower's  Work, all in the sole and absolute  discretion of
Lenders.  In connection  with any  construction of Borrower's Work undertaken by
Lenders  pursuant to the provisions of this  subsection,  Lenders may (i) engage
builders,  contractors,  architects,  engineers  and others  for the  purpose of
furnishing labor, materials and equipment in connection with any construction of
Borrower's  Work,  (ii) pay,  settle or compromise all bills or claims which may
become Liens against the Leased Premises, or any part of the Leased Premises, or
which  have  been or may be  incurred  in any  manner  in  connection  with  the
construction,  completion and equipping of Borrower's  Work or for the discharge
of Liens or  defects  in the title of the  Leased  Premises,  or any part of the
Leased Premises,  and (iii) take such other action  (including the employment of
watchmen  to protect the Leased  Premises)  or refrain  from  acting  under this
Agreement, as Lenders may in their



<PAGE>


                                                                              58



sole and absolute  discretion from time to time determine without any limitation
whatsoever.  Borrower shall be liable to reimburse  Lenders for all sums paid or
incurred for the  construction,  completion  and equipping of  Borrower's  Work,
whether such sums shall be paid or incurred  pursuant to the  provisions of this
subsection or otherwise.  At Lenders' option,  all such sums shall be treated as
advances  hereunder  for all  purposes  or as demand  obligations  of  Borrower,
bearing  interest at the  non-default  interest rate provided in this  Agreement
plus 4% from  the  date of  payment  by  Lenders  to the  date of  repayment  by
Borrower. All of the foregoing amounts,  including interest,  shall be deemed to
constitute  advances under this Agreement,  be evidenced by the Note and secured
by the Security Documents. Upon the occurrence and during the continuance of any
Event of Default, the rights,  powers and privileges provided in this subsection
and all other  remedies  available to Lenders under this Agreement or by statute
or by rule of law may be  exercised by Lenders at any time and from time to time
whether or not the Loan shall be due and  payable,  and  whether or not  Lenders
shall have instituted any foreclosure or other action for the enforcement of the
Security Documents or the Note.

          9.5 Power of Attorney.  For the purpose of carrying out the provisions
and  exercising  the  rights,  powers and  privileges  granted in this  Section,
Borrower hereby irrevocably  constitutes and appoints Agent,  effective upon the
occurrence  and  during the  continuance  of an Event of  Default,  its true and
lawful attorney-in-fact to execute,  acknowledge and deliver any instruments and
do and perform any acts such as are  referred to in this Section in the name and
on behalf  of  Borrower.  This  power of  attorney  is a power  coupled  with an
interest and cannot be revoked.


          SECTION 10. THE AGENT
                      ---------

          10.1  Appointment.  Each  Lender  hereby  irrevocably  designates  and
appoints Bayerische  Hypotheken-Und  Wechsel-Bank  Aktiengesellschaft,  New York
Branch  as  Agent  of such  Lender  under  this  Agreement  and the  other  Loan
Documents,  and each such Lender  irrevocably  authorizes Hypo as Agent for such
Lender, to take such action on its behalf under the provisions of this Agreement
and the other Loan Documents and to exercise such powers and perform such duties
as are expressly delegated to Agent by the terms of this Agreement and the other
Loan  Documents,  together with such other powers as are  reasonably  incidental
thereto.  Notwithstanding  any  provision  to the  contrary  elsewhere  in  this
Agreement,  Agent shall not have any duties or  responsibilities,  except  those
expressly set forth herein, or any fiduciary  relationship with any Lender,  and
no  implied  covenants,  functions,  responsibilities,  duties,  obligations  or
liabilities  shall be read into this  Agreement  or any other Loan  Document  or
otherwise exist against Agent.

          10.2  Delegation of Duties.  Agent may execute any of its duties under
this   Agreement  and  the  other  Loan   Documents  by  or  through  agents  or
attorneys-in-fact and shall be entitled to advice



<PAGE>


                                                                              59



of counsel concerning all matters pertaining to such duties.  Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys  in-fact
selected by it with reasonable care.

          10.3  Exculpatory  Provisions.  Neither Agent nor any of its officers,
directors,  employees,  agents,  attorneys-in-fact  or  Affiliates  shall be (i)
liable to any Lenders for any action lawfully taken or omitted to be taken by it
or such Person  under or in  connection  with this  Agreement  or any other Loan
Document  (except  for its or such  Person's  own gross  negligence  or  willful
misconduct)  or (ii)  responsible in any manner to any Lenders for any recitals,
statements,  representations  or  warranties  made by  Borrower  or any  Partner
therein  contained  in this  Agreement  or any  other  Loan  Document  or in any
certificate, report, statement or other document referred to or provided for in,
or received by Agent under or in connection  with,  this  Agreement or any other
Loan  Document  or  for  the  value,   validity,   effectiveness,   genuineness,
enforceability  or  sufficiency of this Agreement or the Notes or any other Loan
Document or for any failure of Borrower to perform its obligations  hereunder or
thereunder.  Agent shall not be under any  obligation to any Lender to ascertain
or to inquire  as to the  observance  or  performance  of any of the  agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books or records of Borrower.

          10.4 Reliance by Agent.  Agent shall be entitled to rely, and shall be
fully protected in relying, upon any Note, writing, resolution, notice, consent,
certificate,  affidavit, letter, telecopy, telex or teletype message, statement,
order or other document or conversation believed by it to be genuine and correct
and to have been signed,  sent or made by the proper  Person or Persons and upon
advice and statements of legal counsel (including,  without limitation,  counsel
to Borrower), independent accountants and other experts selected by Agent. Agent
may deem and treat the payee of any Note as the owner  thereof for all  purposes
unless a written  notice of assignment,  negotiation  or transfer  thereof shall
have been  filed  with  Agent.  Agent  shall be fully  justified  in  failing or
refusing  to take any action  under this  Agreement  or any other Loan  Document
unless it shall first receive such advice or concurrence of the Required Lenders
as it deems  appropriate or it shall first be indemnified to its satisfaction by
Lenders against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. Agent shall in all cases
be fully protected by all Lenders in acting, or in refraining from acting, under
this Agreement and the Notes and the other Loan  Documents in accordance  with a
request of the  Required  Lenders,  and such  request  and any  action  taken or
failure to act pursuant thereto shall be binding upon all Lenders and all future
holders of the Notes.

          10.5 Notice of Default. Agent shall not be deemed to have knowledge or
notice of the  occurrence  of any Default or Event of Default  hereunder  unless
Agent has received notice from a Lender or Borrower referring to this Agreement,
describing such Default or



<PAGE>


                                                                              60



Event of Default and stating that such notice is a "notice of  default".  In the
event that Agent  receives  such a notice,  Agent shall give  notice  thereof to
Lenders.  Agent shall take such action with  respect to such Default or Event of
Default as shall be reasonably  directed by the Required Lenders;  provided that
unless and until Agent shall have received such directions, Agent may (but shall
not be obligated to) take such action, or refrain from taking such action,  with
respect to such  Default or Event of Default as it shall deem  advisable  in the
best interests of Lenders.  In no event shall Agent be required to take any such
action which it determines to be contrary to law.

          10.6  Non-Reliance on Agent and Other Lenders.  Each Lender  expressly
acknowledges that neither Agent nor any of its officers,  directors,  employees,
agents,   attorneys-in-fact  or  Affiliates  has  made  any  representations  or
warranties  to it and  that no act by Agent  hereinafter  taken,  including  any
review  of  the  affairs  of  Borrower,   shall  be  deemed  to  constitute  any
representation  or warranty by Agent to any Lender.  Each Lender  represents  to
Agent that it has,  independently  and without  reliance upon Agent or any other
Lender,   and  based  on  such  documents  and  information  as  it  has  deemed
appropriate,  made its own  appraisal of and  investigation  into the  business,
operations,  property,  financial and other  condition and  creditworthiness  of
Borrower  and made its own decision to make its Loans  hereunder  and enter into
this  Agreement.  Each Lender also represents  that it will,  independently  and
without reliance upon Agent or any other Lender, and based on such documents and
information as it shall deem  appropriate at the time,  continue to make its own
credit  analysis,  appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents,  and to make such  investigation as
it deems  necessary to inform itself as to the business,  operations,  property,
financial  and other  condition  and  creditworthiness  of Borrower.  Except for
notices,  reports and other  documents  expressly  required to be  furnished  to
Lenders by Agent hereunder,  Agent shall not have any duty or  responsibility to
provide any Lender with any credit or other information concerning the business,
operations,   property,   condition  (financial  or  otherwise),   prospects  or
creditworthiness  of Borrower which may come into the possession of Agent or any
of its officers, directors, employees, agents, attorneys-in-fact or Affiliates.

          10.7 Indemnification. Lenders agree to indemnify Agent in its capacity
as such (to the extent not  reimbursed  by  Borrower  and without  limiting  the
obligation  of  Borrower  to do  so),  ratably  according  to  their  respective
Commitment  Percentages in effect on the date on which indemnification is sought
under this  subsection  (or, if  indemnification  is sought  after the date upon
which the  Commitments  shall have terminated and the Loans shall have been paid
in full,  ratably in accordance with their  Commitment  Percentages  immediately
prior to such  date),  from and against  any and all  liabilities,  obligations,
losses,  damages,  penalties,  actions,  judgments,  suits,  costs,  expenses or
disbursements of any kind whatsoever  which may at any time (including,  without
limitation,  at any time  following  the  payment of the  Notes) be imposed  on,
incurred by or asserted against



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                                                                              61



Agent in any way relating to or arising out of this Agreement,  any of the other
Loan Documents or any documents contemplated by or referred to herein or therein
or the  transactions  contemplated  hereby or  thereby  or any  action  taken or
omitted by Agent under or in connection with any of the foregoing; provided that
no  Lender  shall  be  liable  for  (a)  the  payment  of any  portion  of  such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements  resulting solely from Agent's gross negligence
or willful misconduct,  (b) any loss of principal of or interest with respect to
Agent's Loans or (c) any loss  suffered by Agent in connection  with an interest
rate cap,  swap or other  interest  rate hedging  arrangement  entered into with
Borrower.  The  agreements in this  subsection  shall survive the payment of the
Notes and all other amounts payable hereunder.

          10.8 Agent in Its  Individual  Capacity.  Agent and its Affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with Borrower as though Agent were not Agent  hereunder and under the other Loan
Documents.  With  respect to its Loans made or renewed by it and any Note issued
to it, Agent shall have the same rights and powers under this  Agreement and the
other Loan  Documents  as any Lender and may exercise the same as though it were
not Agent,  and the terms  "Lender" and  "Lenders"  shall  include  Agent in its
individual capacity.

          10.9  Successor  Agent.  Agent agrees not to resign  without the prior
consent of Borrower, which consent shall not be unreasonably withheld, provided,
however,  Agent shall have the right to resign without  Borrower's consent if an
Event of Default has  occurred and is  continuing  or in the event it becomes an
Affected  Bank and is removed or replaced as a Lender  pursuant to Section 3.16.
If  Agent  shall  resign  as Agent  under  this  Agreement  and the  other  Loan
Documents,  then the  Required  Lenders  shall  appoint  from  among  Lenders  a
successor  agent for Lenders,  provided  that the  appointment  of any successor
agent other than Hypo shall be subject to the consent of Borrower, which consent
shall  not be  unreasonably  withheld  or  delayed.  Upon the  appointment  of a
successor  agent for Lenders,  such successor agent shall succeed to the rights,
powers and duties of Agent, and the term "Agent" shall mean such successor agent
effective upon such  appointment  and approval,  and the former Agent's  rights,
powers and duties as Agent shall be terminated, without any other or further act
or deed on the part of such former Agent or any of the parties to this Agreement
or any holders of the Notes.  After any retiring  Agent's  resignation as Agent,
the provisions of this  subsection  shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this  Agreement  and
the other Loan Documents.

          10.10 Rights of Agent and the Lenders. Notwithstanding anything to the
contrary herein or in any other Loan Documents:

          (a) with the written consent of the Required  Lenders,  the Agent may,
     from time to time,  (i) enter into with the  Borrower  written  amendments,
     supplements or modifications hereto and to



<PAGE>


                                                                              62



     the Notes and the other Loan Documents,  or change in any manner the rights
     of the Lenders or of Borrower hereunder or thereunder  (including,  without
     limitation,  modifying any  financial  covenant  contained  herein) or (ii)
     waive,  on such terms and conditions as the Required  Lenders or the Agent,
     as the case may be, may specify in such instrument, any of the requirements
     of this Agreement,  the Notes or the other Loan Documents or any Default or
     Event of Default  and its  consequences;  provided,  however,  that no such
     waiver and no such amendment,  supplement or modification shall (A) without
     the written consent of each Lender  affected  thereby (i) reduce or forgive
     the  amount of any Note or of any  installment  thereof,  (ii)  extend  the
     scheduled date of maturity of the Loans or any mandatory  principal payment
     thereon,  (iii)  reduce  the stated  rate of any  interest  or fee  payable
     hereunder  or extend  the  scheduled  date of any  payment  thereof or (iv)
     forgive any portion of interest  or  principal,  fees or other  amounts due
     hereunder,  (B) without the written consent of all the Lenders,  (i) amend,
     modify or waive any  provision of this  subsection,  (ii) reduce the number
     specified  in the  definition  of Required  Lenders,  (iii)  consent to the
     assignment  or transfer  by  Borrower of any of its rights and  obligations
     under this  Agreement  and the other Loan  Documents  or (iv)  release  any
     collateral or subordinate  the Lien of the Mortgage to any other  mortgage,
     and (C) without the written  consent of the Agent,  amend,  modify or waive
     any provision of Section 10 of this Agreement. Any such waiver and any such
     amendment,  supplement or  modification  shall apply equally to each of the
     Lenders and shall be binding upon each of the  Borrower,  the Lenders,  the
     Agent  and all  future  holders  of any of the  Notes.  In the  case of any
     waiver, the Borrower,  the Lenders and the Agent shall be restored to their
     former position and rights  hereunder and under the  outstanding  Notes and
     any other Loan Documents,  and any Default or Event of Default waived shall
     be deemed to be cured and not  continuing;  but no such waiver shall extend
     to any subsequent or other Default or Event of Default, or impair any right
     consequent thereon.

          (b) In  addition to the Agent,  the  Required  Lenders  shall have the
     right to determine that  conversion to a Eurodollar  Loan is  inappropriate
     pursuant to subsection 3.6(a) or 3.6(b) above;

          (c) If clause (b) of subsection 3.10 is invoked,  the Required Lenders
     shall certify that the Eurodollar  Rate  determined or to be determined for
     such Interest Period will not adequately and fairly reflect the cost to the
     Lenders of making or maintaining  the affected  Eurodollar  Loan during the
     applicable Interest Period; and

          (d) Under clause (b) of Section 9.3, (i) the Agent may only accelerate
     the Obligations with the consent of the Required Lenders and (ii) the Agent
     shall  accelerate  the  Obligations  upon  the  direction  of the  Required
     Lenders.




<PAGE>


                                                                              63



          10.11 Participation;  Assignments. (a) Except as provided in paragraph
10.11(g),  any Lender  may, in the  ordinary  course of its  commercial  banking
business and in accordance  with applicable law, at any time sell to one or more
banks or other  entities  ("Participants")  participating  interests in any Loan
owing to such  Lender,  any Note held by such  Lender,  any  Commitment  of such
Lender or any other interest of such Lender in connection with the Loans. In the
event of any such sale by a Lender of a participating interest to a Participant,
such  Lender's  obligations  under this  Agreement to the other  parties to this
Agreement shall remain  unchanged,  such Lender shall remain solely  responsible
for the  performance  thereof,  such Lender  shall remain the holder of any such
Note for all purposes  under this  Agreement and the other Loan  Documents,  and
Borrower and Agent shall  continue to deal solely and directly  with such Lender
in connection with such Lender's rights and obligations under this Agreement and
the  other  Loan  Documents.  Borrower  agrees  that each  Participant  shall be
entitled to the benefits of subsections  3.13, 3.14 and 3.15 with respect to its
participation in the Commitments  outstanding from time to time; provided,  that
no Participant  shall be entitled to receive any greater amount pursuant to such
provisions  than the  transferor  Lender would have been  entitled to receive in
respect of the amount of the participation transferred by such transferor Lender
to such Participant had no such transfer been made.

          (b) Except as  provided in  paragraph  10.11(g),  any  Lender,  in the
ordinary  course of its  commercial  banking  business  and in  accordance  with
applicable  law, at any time and from time to time may sell to any Lender or any
Affiliate thereof without  Borrower's consent or to one or more additional banks
or financial  institutions with the prior written consent of Agent and Borrower,
which consent of Borrower shall not be  unreasonably  withheld and which consent
shall  not be  required  during  the  continuance  of an Event of  Default  ("an
Assignee") all or any part of its rights and  obligations  under this Agreement,
the Notes and the other Loan Documents pursuant to an Assignment and Acceptance,
substantially  in the form of  Exhibit C,  executed  by such  Assignee  and such
assigning  Lender (and  Borrower,  if required)  and  delivered to Agent for its
acceptance  and  recording  in the  Register.  Upon  such  execution,  delivery,
acceptance and recording,  from and after the effective date determined pursuant
to such Assignment and Acceptance,  (x) the Assignee thereunder shall be a party
hereto and shall have the rights and  obligations  of a Lender  hereunder with a
Commitment as set forth therein,  and (y) the assigning Lender thereunder shall,
to the extent provided in such  Assignment and Acceptance,  be released from its
obligations  under  this  Agreement  (and,  in the  case  of an  Assignment  and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement,  such assigning Lender shall cease to be a
party hereto).  Notwithstanding the foregoing, provided that an Event of Default
has not occurred,  (a) Hypo shall retain  Commitments in an amount not less than
$25,000,000  and (b) no Lender may assign any portion of its  Commitment  (other
than to an existing Lender) in an amount less than $15,000,000 unless it assigns
its entire Commitment.




<PAGE>


                                                                              64



          (c) Agent shall maintain at its address referred to in subsection 11.3
a copy of each  Assignment  and  Acceptance  delivered to it and a register (the
"Register")  for the  recordation  of the names and addresses of Lenders and the
Commitment of, and principal amount of the Loans owing to, each Lender from time
to time.  The entries in the  Register  shall be  conclusive,  in the absence of
manifest error, and Borrower, Agent and Lenders may treat each Person whose name
is recorded in the  Register as the owner of the Loan  recorded  therein for all
purposes of this  Agreement.  The Register  shall be available for inspection by
Borrower  or any  Lender  at any  reasonable  time  and from  time to time  upon
reasonable prior notice.

          (d) Upon its receipt of an Assignment  and  Acceptance  executed by an
assigning  Lender and an Assignee (and  Borrower,  if  required),  together with
payment to Agent of a registration and processing fee of $3,000 (payable by such
assigning  Lender),   Agent  shall  (i)  promptly  accept  such  Assignment  and
Acceptance and (ii) on the effective date determined pursuant thereto record the
information contained therein in the Register and give notice of such acceptance
and  recordation to Lenders and Borrower.  On or prior to such  effective  date,
Borrower  shall  execute and deliver to Agent (in  exchange  for the Note of the
assigning  Lender) a new Note, as the case may be, to the order of such Assignee
in an amount equal to the  Commitment or Loan, as the case may be, assumed by it
pursuant to such  Assignment  and  Acceptance  and, if the assigning  Lender has
retained a Commitment or Loan hereunder,  a new Note, as the case may be, to the
order of the assigning  Lender in an amount equal to the  Commitment or Loan, as
the case may be, retained by it hereunder. Such new Note shall be dated the date
of this  Agreement,  and  shall  otherwise  be in the form of the Note  replaced
thereby.

          (e) Borrower  authorizes each Lender to disclose to any Participant or
Assignee  (each,  a  "Transferee")   and  any  prospective   Transferee,   on  a
confidential  basis,  any  and  all  financial   information  in  such  Lender's
possession  concerning  Borrower and its Affiliates  which has been delivered to
such Lender by or on behalf of Borrower  pursuant to this Agreement or which has
been  delivered  to such Lender by or on behalf of Borrower in  connection  with
such Lender's credit evaluation of Borrower and its Affiliates prior to becoming
a party to this Agreement.

          (f)  Nothing  herein  shall  prohibit  any  Lender  from  pledging  or
assigning  any Note to any Federal  Reserve Bank in accordance  with  applicable
law,  provided  that  no such  assignment  shall  release  such  Lender  from it
obligations hereunder.

          (g) Notwithstanding the foregoing  provisions of this Section, so long
as an Event of Default is not continuing, no Lender shall assign, grant, convey,
or transfer all or any portion of or interest  (participation  or  otherwise) in
the Loan to any Person if such Person is a partner in  Borrower.  Any Person who
becomes a Lender or Participant  in accordance  with the terms of this Agreement
agrees  to be bound by the  provisions  of this  Paragraph  and,  other  than in
connection with a bankruptcy proceeding of a partner in



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                                                                              65



Borrower or during the  continuance  of an Event of Default,  agrees not to take
any action that would make it a partner in Borrower. Any Lender may conclusively
rely upon the certificate of any proposed  Transferee stating that such proposed
Transferee  is not a partner in  Borrower  and the  assigning  or  participating
Lender  shall have no  liability  to Borrower  or any  partner in  Borrower  for
assigning  or  participating  any  interest  in the  Loan  in  reliance  on such
certification.

          10.12  Liability  of Agent.  Agent shall not have any  liabilities  or
responsibilities  to Borrower on account of the failure of any Lender to perform
its obligations  hereunder (without affecting any rights of Borrower  hereunder)
or to  any  Lender  on  account  of the  failure  of  Borrower  to  perform  its
obligations hereunder or under any other Loan Document.


          SECTION 11. GENERAL CONDITIONS
                      ------------------

          The following  conditions  shall be applicable  throughout the term of
this Agreement:

          11.1 No Waivers.  No advance of proceeds of the Loans shall constitute
a  waiver  of any of the  conditions  of  Lenders'  obligation  to make  further
advances.  No  waiver of any such  condition  shall  constitute  a waiver of any
Default or Event of Default related to or predicated  upon such  condition.  Any
advance  made by Lenders and any sums  expended by Lenders  pursuant to the Loan
Documents  shall  be  deemed  to have  been  made  pursuant  to this  Agreement,
notwithstanding  the  existence  of an uncured  Default or Event of Default.  No
advance of the Loans at a time when an Event of Default  exists,  whether or not
Lenders had actual  knowledge of such default,  shall constitute a waiver of any
right or  remedy  of  Lenders  existing  by  reason  of such  Event of  Default,
including,  without limitation, the right to accelerate the maturity of the Loan
or to foreclose the Lien of the Security  Documents or to refuse to make further
advances of the Loan.

          11.2  Lenders  and  Agent  Sole  Beneficiary.  All  conditions  of the
obligation of Lenders and Agent to make advances of the Loan are imposed  solely
and  exclusively  for the benefit of Lenders and Agent and their  assigns and no
other Person shall have standing to require  satisfaction  of such conditions in
accordance with their terms or be entitled to assume that Lenders will refuse to
make advances in the absence of strict compliance with any or all such terms and
no Person shall, under any circumstances,  be deemed to be a beneficiary of such
conditions,  any or all of which  may be  freely  waived  in whole or in part by
Agent  and/or  Lenders  at any time if in their sole  discretion  they deem such
waiver  to be  advisable.  Lenders'  obligation  to make  advances  of the Loan,
subject to the terms and conditions of this Agreement, is solely for the benefit
of Borrower  and no other  Person  shall be deemed to be a  beneficiary  of such
obligation nor entitled to require any advance of Loan proceeds. Inspections and
approvals of the Plans and the Improvements and the



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                                                                              66



workmanship  and materials used in the  construction of the  Improvements  shall
impose no  responsibility  or liability of any nature whatsoever on Agent and/or
Lenders, and no Person shall, under any circumstances,  be entitled to rely upon
such  inspections and approvals by Agent and/or Lenders for any reason.  Lenders
are only  obligated  under this  Agreement  to make the  advances  if and to the
extent required by this Agreement.

          11.3 Notices. All notices,  demands,  consents and approvals hereunder
shall be in  writing  and shall be deemed  to have  been  sufficiently  given or
served when presented personally, when delivered to an overnight courier service
with  guaranteed  next business day delivery or, 5 days after being deposited in
the mail,  postage prepaid,  certified or registered,  return receipt requested,
addressed as follows:

Borrower:            Taubman MacArthur Associates Limited Partnership
                     c/o The Taubman Company
                     200 East Long Lake Road, Suite 300
                     P.O. Box 200
                     Bloomfield Hills, Michigan  48303-0200
                     Attention: Shire Rothbart

with a copy to:      Miro Weiner & Kramer
                     Suite 100
                     500 North Woodward Avenue
                     Bloomfield Hills, Michigan  48303
                     Attention: Martin Katz, Esq.

Agent:               Bayerische Hypotheken- Und Wechsel-Bank
                     Aktiengesellschaft, New York Branch
                     32 Old Slip
                     Financial Square
                     New York, New York 10005
                     Attention:  William Rogers

with a copy to:      Simpson Thacher & Bartlett
                     425 Lexington Avenue
                     New York, New York 10017
                     Attention: Gregory J. Ressa

provided  that any  notice,  request  or demand to or upon the Agent or  Lenders
pursuant to subsection  3.1, 3.4, 3.5, 3.6 or 3.11 shall not be effective  until
received. Any party may change its address by notice to the other parties.

          11.4 Modifications. Neither this Agreement, any Note or any other Loan
Document,  nor any terms  hereof or  thereof  may be  amended,  supplemented  or
modified  except in a writing duly  executed by Borrower and Agent in accordance
with  the  terms of this  Agreement.  Any such  waiver  and any such  amendment,
supplement or  modification  shall apply equally to each of Lenders and shall be
binding upon Borrower,  Lenders,  Agent and all future holders of the Notes.  In
the case of any waiver, Borrower, Lenders and Agent shall be restored to



<PAGE>


                                                                              67



their former position and rights  hereunder and under the outstanding  Notes and
any other Loan  Documents,  and any Default or Event of Default  waived shall be
deemed to be cured and not  continuing;  but no such waiver  shall extend to any
subsequent or other Default or Event of Default,  or impair any right consequent
thereon.

          11.5 Rights Cumulative. All rights, powers and remedies given to Agent
and Lenders under this Agreement are cumulative and not alternative,  and are in
addition to all rights, powers and remedies otherwise afforded Agent and Lenders
under  all  statutes  and  rules  of  law  (all  rights,   powers  and  remedies
collectively,  "Lenders' Rights");  any forbearance or delay by Agent or Lenders
in exercising any of Lenders' Rights shall not be deemed to be a waiver, and the
exercise or partial  exercise of any of Lenders'  Rights  shall not preclude the
further  exercise of any of Lenders'  Rights which shall  continue in full force
and effect until  specifically  waived by an instrument  in writing  executed by
Agent or Lenders. All representations, warranties and covenants contained in any
of the Loan Documents shall survive the making of the Loans.

          11.6 Sign.  Prior to the Outside  Completion Date, at Lenders' option,
Borrower  will,  to the  extent  it has the  right  to do so  under  the  Agency
Documents and in  compliance  with Legal  Requirements  and at its sole cost and
expense,  erect and  maintain  a sign on the Land  indicating  the source of the
construction  financing,  which sign shall be subject to Agent's and  Borrower's
reasonable approval.

          11.7 Schedules. The Schedules attached to this Agreement are essential
to and are made a part of this Agreement.

          11.8 Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of  Borrower,  Lenders,  Agent,  all future  holders of the
Notes and their respective successors and assigns,  except that Borrower may not
assign or transfer any of its rights or obligations under this Agreement without
the prior written consent of each Lender.

          11.9  Governing Law. THIS AGREEMENT IS MADE AND DELIVERED IN NEW YORK,
NEW YORK AND SHALL BE GOVERNED BY, AND CONSTRUED AND  INTERPRETED  IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT
OF LAWS.

          11.10  Submission  to  Jurisdiction.  All judicial  actions,  suits or
proceedings  brought  against  Borrower  and its  property  with  respect to its
obligations,  liabilities  or any other  matter  under or  arising  out of or in
connection  with this Agreement or any other Loan Document or for recognition or
enforcement of any judgment  rendered in any such  proceedings may be brought in
any trial or appellate  state or federal court of competent  jurisdiction in the
City of New York. By execution and delivery of this Agreement, Borrower accepts,
generally and unconditionally, the non-exclusive jurisdiction of such courts and
irrevocably  waives, and agrees not to plead or claim, any objection that it may
ever have to the venue of any such action or



<PAGE>


                                                                              68



proceeding in any such court or that such action or proceeding was brought in an
inconvenient  court.  Borrower  irrevocably  agrees  that  all  process  in  any
proceeding or any court arising out of or in connection  with this  Agreement or
any of the other Loan  Documents,  may be effected by mailing to Borrower a copy
by  registered  or  certified  mail or any  substantially  similar form of mail,
postage  prepaid,  to Borrower at its address set forth in subsection 11.3 or at
such other address of which Lenders shall have been notified in accordance  with
the terms of such  subsection.  Such service  shall be effective  ten days after
such  mailing.  Such  service  will be  effective  and binding  service in every
respect.  Borrower  shall  not  assert  that  such  service  did not  constitute
effective  and binding  service  within the meaning of any  applicable  state or
federal law,  rule,  regulation  or the like.  Borrower  irrevocably  waives any
objections, including without limitation any objection to the laying of venue or
based on the grounds of forum non conveniens,  which it may now or in the future
have to the bringing of any such action or proceeding in any such  jurisdiction.
Nothing in this Agreement shall affect the right to effect service of process in
any other  manner  permitted by law or shall limit the right to sue in any other
jurisdiction.

          11.11  WAIVERS  OF JURY  TRIAL.  BORROWER,  Agent AND  LENDERS  HEREBY
IRREVOCABLY  AND  UNCONDITIONALLY  WAIVE  TRIAL BY JURY IN ANY  LEGAL  ACTION OR
PROCEEDING  RELATING TO THIS  AGREEMENT OR THE NOTES OR ANY OTHER LOAN  DOCUMENT
AND FOR ANY COUNTERCLAIM THEREIN.

          11.12 Captions.  The captions in this Agreement are for convenience of
reference only, and in no way limit or amplify the provisions of this Agreement.

          11.13 Adjustments;  Set-off. (a) If any Lender (a "benefitted Lender")
shall at any time  receive any payment of all or part of its Loans,  or interest
thereon,  or receive any collateral in respect thereof  (whether  voluntarily or
involuntarily,  by  set-off,  pursuant  to events or  proceedings  of the nature
referred to in Section  19(a)(v) of the Mortgage,  or  otherwise),  in a greater
proportion than any such payment to or collateral  received by any other Lender,
if any,  in respect of such other  Lender's  Loans,  or interest  therein,  such
benefitted Lender shall purchase for cash from the other Lenders a participating
interest in such portion of each such other Lender's Loan, or shall provide such
other Lenders with the benefits of any such collateral, or the proceeds thereof,
as shall be  necessary  to cause  such  benefitted  Lender to share  the  excess
payment or benefits of such  collateral  or  proceeds  ratably  with each of the
Lenders;  provided,  however,  if all or any portion of such  excess  payment or
benefits is thereafter  recovered  from such  benefitted  Lender,  such purchase
shall be rescinded,  and the purchase price and benefits returned, to the extent
of such recovery, but without interest.

          (b) In addition to any rights and remedies of Lenders provided by law,
each Lender shall have the right,  without  prior  notice to Borrower,  any such
notice being expressly waived by



<PAGE>


                                                                              69



Borrower to the extent permitted by applicable law, upon any amount becoming due
and  payable by  Borrower  hereunder  or under the Notes  (whether at the stated
maturity,  by  acceleration  or otherwise) to set-off and  appropriate and apply
against  such amount any and all deposits  (general or special,  time or demand,
provisional or final), in any currency,  and any other credits,  indebtedness or
claims,  in any currency,  in each case whether direct or indirect,  absolute or
contingent,  matured or  unmatured,  at any time held or owing by such Lender or
any branch or agency  thereof to or for the credit or the  account of  Borrower.
Each Lender agrees  promptly to notify Borrower and Agent after any such set-off
and  application  made by such  Lender,  provided  that the failure to give such
notice shall not affect the validity of such set-off and application.

          11.14  Counterparts.  This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts  (including
by telecopy),  and all of said  counterparts  taken  together shall be deemed to
constitute  one and the same  instrument.  A set of the copies of this Agreement
signed by all the parties shall be lodged with Borrower and Agent.

          11.15   Severability.   Any  provision  of  this  Agreement  which  is
prohibited or unenforceable in any jurisdiction  shall, as to such jurisdiction,
be ineffective to the extent of such  prohibition  or  unenforceability  without
invalidating  the  remaining  provisions  hereof,  and any such  prohibition  or
unenforceability   in  any   jurisdiction   shall  not   invalidate   or  render
unenforceable such provision in any other jurisdiction.

          11.16  Integration.  This  Agreement  and  the  other  Loan  Documents
represent the  agreement of Borrower,  Agent and the Lenders with respect to the
subject matter hereof, and there are no promises, undertakings,  representations
or  warranties  by Agent or any Lender or Borrower  relative  to subject  matter
hereof  not  expressly  set forth or  referred  to  herein or in the other  Loan
Documents.

          11.17 Cure Rights of Agency.  Lenders agree that the Agency shall have
the right to cure any  Default  hereunder  and under  the other  Loan  Documents
during  the  applicable  cure  period  provided  herein  and in the  other  Loan
Documents and Lenders shall accept such cure by the Agency.  Notwithstanding the
foregoing, neither the Agent nor any Lender shall have any obligation to provide
a notice of default to the Agency.

          11.18 Exculpation.  Notwithstanding anything to the contrary contained
in this Agreement,  the Notes, the Security Documents,  any other Loan Documents
or any  certificates,  documents or instruments  executed in connection with the
Loan,  except as provided  below,  (a) no partner in Borrower  nor any  partner,
director,  officer, trustee,  shareholder,  member, employee or principal in any
such partner, nor any of their successors and assigns (collectively, "Exculpated
Persons") shall have any personal  liability for the payment of the Notes or any
other fee, charge or other amount which may become due under this Agreement, the
Notes, the Security



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                                                                              70



Documents or the other Loan Documents or for the  performance of the obligations
under  this  Agreement,  the Notes,  the  Security  Documents  or the other Loan
Documents and (b) Lenders' and Agent's sole recourse shall be against  Borrower,
all of  Borrower's  assets,  Borrower's  interests  in the Trust  Property,  the
security  of any  of the  other  Security  Documents  and  Guarantor  under  the
Guaranties,  and no  deficiency  judgment  or  judgment  for payment of money or
damages shall lie against any Exculpated Person in any suit or action to collect
on the Notes or to  foreclose  upon the Mortgage or to realize upon the security
of any of the other Security Documents;  provided,  however,  that the foregoing
shall not apply to liability (to the extent hereafter provided) arising from:

          (a) the  fraudulent  acts and  intentional  misrepresentations  of any
     Exculpated Persons;

          (b) the  failure of  Borrower  during the  continuance  of an Event of
     Default to apply the rents, income and other revenues of the Trust Property
     to the payment of real estate taxes,  operating  expenses,  maintenance and
     other  expenses of the Trust  Property in accordance  with the terms of the
     Mortgage and to amounts due under the Loan Documents,  to the extent of the
     funds not so applied; and

          (c) the  willful  failure of  Borrower  to apply or use any  insurance
     proceeds or  condemnation  awards or proceeds of any taking  under power of
     eminent  domain or conveyance in lieu thereof in accordance  with the terms
     of the Mortgage, to the extent of the awards or proceeds not so applied.

Nothing  contained in this  paragraph  shall (i) prevent  Lenders' full recourse
against Borrower, all of Borrower's assets and Borrower's interests in the Trust
Property  and the security of any of the other Loan  Documents,  (ii) impair the
validity of the indebtedness  evidenced by the Notes,  (iii) except as set forth
in this  paragraph,  in any way  affect or impair the right of the holder of the
Notes, the Security Documents or any of the other Loan Documents to exercise any
or all of its rights under the Notes, the Security Documents or any of the other
Loan  Documents,  or affect or impair the  obligations of Borrower  hereunder so
long as  recourse  to any  Exculpated  Person is limited as  aforesaid  and (iv)
modify,  qualify  or affect  in any  manner  whatsoever  the  personal  recourse
undertakings,  obligations  and  liabilities of any Person under any guaranty of
payment or other  guaranty now or hereafter  executed and  delivered to Agent or
Lenders in connection with the Loan.

          11.19  Non-Recourse to TRG Partners.  Notwithstanding  anything to the
contrary contained in this Agreement,  in any of the other Loan Documents, or in
any  other  instruments,  certificates,  documents  or  agreements  executed  in
connection  with  the  Loans  (all  of  the  foregoing,  for  purposes  of  this
subsection,  hereinafter  referred to,  individually  and  collectively,  as the
"Relevant Documents"), no recourse under or upon any Obligation, representation,
warranty, promise or other matter whatsoever shall be had against any of the



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                                                                              71



constituent  partners of the  Guarantor  and their  successors  or assigns (said
constituent  partners  of the  Guarantor  and their  successors  or assigns  for
purposes  of  this  subsection,   hereinafter   referred  to,  individually  and
collectively,  as the "TRG  Partners")  and each  Lender  expressly  waives  and
releases,  on behalf of itself  and its  successors  and  assigns,  all right to
assert any liability  whatsoever under or with respect to the Relevant Documents
against, or to satisfy any claim or obligation arising thereunder  against,  any
of the TRG Partners or out of any assets of the TRG Partners, provided, however,
that nothing in this subsection shall be deemed to: (i) release the Guarantor or
Borrower from any personal  liability pursuant to, or from any of its respective
obligations  under  this  Agreement  or the  Guaranties  or the  other  Relevant
Documents,  or from personal  liability for its fraudulent actions or fraudulent
omissions;  (ii) release any TRG Partner from personal  liability for its or his
own fraudulent  actions or fraudulent  omissions;  (iii)  constitute a waiver or
impairment  of any  obligation  evidenced  or secured by, or  contained  in, the
Relevant  Documents or affect in any way the validity or  enforceability  of the
Relevant  Documents;  or (iv)  limit the right of Agent  and/or  the  Lenders to
proceed  against or realize upon any collateral  now or hereafter  given for the
Loans or any and all of the assets of Borrower or the Guarantor (notwithstanding
the fact that the TRG Partners  have an  ownership  interest in Borrower and the
Guarantor and, thereby, an interest in the assets of Borrower and the Guarantor)
or to name  Borrower  or the  Guarantor  (or,  to the  extent  that the same are
required by applicable law or are determined by a court to be necessary  parties
in  connection  with an action or suit against  Borrower or the Guarantor or any
collateral now or hereafter  given for the Loans,  any of the TRG Partners) as a
party defendant in, and to enforce against any collateral now or hereafter given
for the Loans and/or assets of Borrower or the  Guarantor any judgment  obtained
by Agent  and/or  the  Lenders  with  respect  to,  any action or suit under the
Relevant  Documents so long as no judgment  shall be taken (except to the extent
taking a judgment is required by  applicable  law or determined by a court to be
necessary to preserve  Agent's and/or the Lenders' rights against any collateral
now or hereafter  given for the Loans or Guarantor,  but not otherwise) or shall
be enforced  against the TRG Partners,  their  successors and assigns,  or their
assets.





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                                                                              72



            TO CONFIRM THEIR AGREEMENT, this Agreement has been duly executed by
Lenders, Borrower and Agent as of the date first written above.

                              BAYERISCHE HYPOTHEKEN- UND WECHSEL-
                                BANK, AKTIENGESELLSCHAFT, NEW YORK
                                BRANCH

                              By: /s/ William J. Rogers
                                 ---------------------------------
                                  Name: William J. Rogers
                                  Title: Vice President

                              By: /s/ Stephen G. Melidones
                                 ----------------------------------
                                  Name: Stephen G. Melidones
                                  Title: Assistant Vice President



                              TAUBMAN MACARTHUR ASSOCIATES LIMITED
                                PARTNERSHIP

                                    By:   Taubman Realty Group Limited
                                          Partnership, its general partner


                                    By: /s/ Shire Rothbart
                                       -----------------------------
                                       Name: Shire Rothbart
                                       Title: Authorized Signatory