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                                                                   EXHIBIT 10.59

                                                                     EXHIBIT B-2

                  INTERCOMPANY PLEDGE AND SECURITY AGREEMENT

            PLEDGE AND SECURITY AGREEMENT, dated as of October 28, 1996 (as 
amended, modified or supplemented from time to time, this "Agreement"), made 
by each of the undersigned (each a "Pledgor" and, together, the "Pledgors") , 
in favor of CS FIRST BOSTON MORTGAGE CAPITAL CORP. a Delaware 
corporation (together with any successor pledgee, the "Pledgee"). Except as 
otherwise defined herein, all capitalized terms used herein and defined in 
the Credit Agreement (as defined below) shall be used herein as therein 
defined.

                             W I T N E S S E T H :

            WHEREAS, The Mills Corporation, The Mills Limited Partnership (the
"Borrower"), Sawgrass Mills Phase II Limited Partnership ("Sawgrass"), Sunrise
Mills (MLP) Limited Partnership ("Sunrise", and together with Sawgrass, the
"Subsidiary Partnerships" and each, a "Subsidiary Partnership") have entered
into a Credit Agreement with the Pledgee, dated as of October 28, 1996,
providing for the making of Revolving Loans to each Pledgor as contemplated
therein (as amended, modified or supplemented from time to time, the "Credit
Agreement");

            WHEREAS, each Pledgor may have made, has made or makes loans to
certain Non-consolidated Subsidiaries;

            WHEREAS, it is a condition precedent to the making of the Revolving
Loans under the Credit Agreement that each Pledgor shall have executed and
delivered this Agreement with respect to any Intercompany Debt (as defined the
Credit Agreement); and

            WHEREAS, each Pledgor will obtain benefits from the incurrence of
Revolving Loans under the Credit Agreement and, accordingly, each Pledgor
desires to enter into this Agreement in order to satisfy the conditions
described in the preceding paragraph;

            NOW, THEREFORE. in consideration of the benefits accruing to each
Pledgor, the receipt and sufficiency of which are hereby acknowledged, each
Pledgor hereby makes the following representations and warranties to the Pledgee
and hereby covenants and agrees with the Pledgee as follows:

            1. SECURITY FOR OBLIGATIONS. This Agreement is made by each Pledgor
to secure:

            (i) the full and prompt payment when due (whether at the stated
      maturity, by acceleration or otherwise) of all obligations and liabilities
      (including, without limitation,
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      the principal of and interest on the Revolving Note issued by, and
      Revolving Loans made to, each Pledgor under the Credit Agreement, and all
      indemnities, Fees, expenses and interest thereon or owed thereunder) of
      each Pledgor to the Pledgee, whether now existing or hereafter incurred
      under, arising out of or in connection with the Credit Agreement and the
      other Loan Documents and the due performance and compliance by each
      Pledgor with all of the terms, conditions and agreements contained in the
      Credit Agreement and such other Loan Documents;

            (ii) any and all sums advanced by the Pledgee in order to preserve
      the Collateral (as hereinafter defined) or preserve its security interest
      in the Collateral;

            (iii) in the event of any proceeding for the collection or
      enforcement of any obligations or liabilities referred to in clauses (i)
      and (ii) above, upon the occurrence and during the continuance of an Event
      of Default (such term, as used in this Agreement, shall mean any Event of
      Default under, and as defined in, the Credit Agreement, and shall in any
      event include, without limitation, any payment default (after the
      expiration of any applicable grace period) on any of the Obligations (as
      hereinafter defined)) shall have occurred and be continuing, the
      reasonable expenses of retaking, holding, preparing for sale or lease,
      selling or otherwise disposing of or realizing on the Collateral, or of
      any exercise by the Pledgee of its rights hereunder, together with
      reasonable attorneys' fees and court costs; and

            (iv) all amounts paid by any Indemnitee (as defined in Section 11
      hereof) as to which such Indemnitee has the right to reimbursement under
      Section 11 of this Agreement;

all such obligations, liabilities, sums and expenses set forth in clauses (i)
through (v) of this Section 1 being herein collectively called the
"Obligations".

            2. DEFINITION OF NOTES, ETC. As used herein the term "Notes" shall
mean all Intercompany Notes, if any, from time to time issued to, or held by
each Pledgor.

            3. GRANT OF SECURITY INTEREST

            3.1 Pledge. (a) To secure the Obligations of each Pledgor and for
the purposes set forth in Section 1 hereof, each Pledgor hereby pledges and
grants to the Pledgee a first priority continuing security interest in the
Intercompany Debt, and as part of such grant and pledge, hereby transfers and
assigns to the Pledgee all of the following, whether now existing or hereafter
acquired (the "Collateral"), with respect to the Intercompany Debt including,
without limitation:

            (i) all the principal thereof and any interest payments and other
      distributions to which each Pledgor shall at any time be entitled in
      respect of such Intercompany Debt;

            (ii) all other payments due or to become due to each Pledgor in
      respect of such Intercompany Debt;


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            (iii) all of its claims, rights, powers, privileges, authority,
      options, security interest, liens and remedies, if any, under any
      Intercompany Debt or at law or otherwise in respect of such Notes;

            (iv) all of each Pledgor's rights under any Note or at law to
      exercise and enforce every right, power, remedy, authority, option and
      privilege of each Pledgor relating to such Intercompany Debt, including
      any power to terminate, cancel or modify the terms of any Intercompany
      Debt, to execute any instruments and to take any and all other action on
      behalf of and in the name of each Pledgor in respect of such Intercompany
      Debt, to make determinations, to exercise any election (including, but not
      limited to, election of remedies) or option or to give or receive any
      notice, consent, amendment, waiver or approval, together with full power
      and authority to demand, receive, enforce, collect, or receipt for any of
      the foregoing, to enforce or execute any checks or other instruments or
      orders, to file any claims and to take any action in connection with any
      of the foregoing (with all of the foregoing rights only to be exercisable
      upon the occurrence and during the continuance of an Event of Default);
      and

            (v) to the extent not otherwise included, all Proceeds (as
      hereinafter defined) of any or all of the foregoing.

            (b) As used herein, the term "Proceeds" shall mean all "proceeds" as
such term is defined in Section 9-306 (1) of the New York UCC.

            3.2 Subsequently Acquired Intercompany Debt. If any Pledgor shall
acquire (by purchase, distribution or otherwise) any additional Intercompany
Debt at any time or from time to time after the date hereof, each Pledgor shall
forthwith pledge such Intercompany Debt as security with the Pledgee hereunder
and if evidenced by a Note or Notes deliver same to the Pledgee, duly endorsed
to the order of the Pledgee in blank and accompanied by such instruments of
transfer as are reasonably acceptable to the Pledgee, and shall promptly
thereafter deliver to the Pledgee a certificate executed by any Authorized
Representative of each Pledgor describing such Notes and certifying that the
same has been duly pledged with the Pledgee hereunder.

            3.3 Notes. To the extent any Note (whether now owned or hereafter
acquired) is executed and delivered in favor of each Pledgor to evidence any
Intercompany Debt, the relevant Pledgor shall promptly notify the Pledgee
thereof, and shall promptly take all actions required to perfect the security
interest of the Pledgee under applicable law (including, in any event, under the
provisions of Articles 8 and 9 of the New York UCC), including without
limitation the delivery of the Note to the Pledgee, endorsed in blank, and
accompanied by such instruments of transfer as are acceptable to the Pledgee.
Each Pledgor further agrees to take such actions as the Pledgee deems necessary
or desirable to effect the foregoing and to permit the Pledgee to exercise any
of its rights and remedies hereunder.

            4. APPOINTMENT OF SUB-AGENTS. The Pledgee shall have the right to
appoint one or more sub-agents for the purpose of retaining physical possession
of the Collateral, which may be held (in the discretion of the Pledgee) in the
name of each Pledgor,


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endorsed or assigned in blank or in favor of the Pledgee or any nominee or
nominees of the Pledgee or a sub-agent appointed by the Pledgee. The Pledgee
agrees to promptly notify each Pledgor after the appointment of any sub-agent;
provided, however, that the failure to give such notice shall not affect the
validity of such appointment.

            5. RIGHTS AND REMEDIES, ETC., WHILE NO EVENT OF DEFAULT. Unless and
until an Event of Default shall have occurred and be continuing, each Pledgor
may exercise any rights and remedies under any Intercompany Debt or otherwise
with respect to the Intercompany Debt of each Pledgor without the Pledgee's
prior written consent, to the extent that such vote cast or consent, waiver or
ratification given or other action taken would not violate or be inconsistent in
any material respect with any of the terms of this Agreement or any other Loan
Document, and would not have the effect of materially impairing the position or
interests of the Pledgee or the value of the Intercompany Debt. All such rights
and remedies of each Pledgor with respect to each Intercompany Debt shall cease
in case an Event of Default shall occur and be continuing, and Section 7 hereof
shall become applicable.

            6. INTEREST, ETC. Unless an Event of Default shall have occurred and
be continuing, all interest payable and other payments made in respect of the
Intercompany Debt shall be paid to each Pledgor. The Pledgee shall be entitled
to receive directly, and to retain as part of the Collateral, all other property
(other than cash) paid or distributed by way of interest or otherwise in respect
of the Intercompany Debt.

            7. REMEDIES IN CASE OF EVENT OF DEFAULT. In case an Event of Default
shall have occurred and be continuing, the Pledgee shall be entitled to exercise
all of the rights, powers and remedies (whether vested in it by this Agreement
or by any Loan Document or by law) for the protection and enforcement of its
rights in respect of the Collateral, and the Pledgee shall be entitled, without
limitation, to exercise the following rights, which each Pledgor hereby agrees
to be commercially reasonable remedies:

            (i) to receive all amounts payable in respect of the Collateral
      payable to each Pledgor under Section 6 hereof;

            (ii) to accelerate any Intercompany Debt which may be accelerated in
      accordance with its terms, and take any other lawful action to collect
      upon any Intercompany Debt (including, without limitation, to make any
      demand for payment thereon);

            (iii) to give all consents, waivers and ratifications in respect of
      the Collateral and otherwise act with respect thereto as though it were
      the outright owner thereof; and

            (iv) at any time or from time to time to sell, assign and deliver,
      or grant options to purchase, all or any part of the Collateral, or any
      interest therein, at any public or private sale, without demand of
      performance, advertisement or notice of intention to sell after the
      exercise of its remedies under the UCC; provided that at least 10 days'
      prior notice of the time and place of any such sale shall be given to each
      Pledgor. Each Pledgor hereby waives and releases to the fullest extent
      permitted by law


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      any right or equity of redemption with respect to the Collateral, whether
      before or after sale hereunder, and all rights, if any, of marshalling the
      Collateral and any other security for the Obligations or otherwise. At any
      such sale, unless prohibited by applicable law, the Pledgee may bid for
      and purchase all or any part of the Collateral so sold free from any such
      right or equity of redemption. The Pledgee shall not be liable for failure
      to collect or realize upon any or all of the Collateral or for any delay
      in so doing nor shall the Pledgee be under any obligation to take any
      action whatsoever with regard thereto.

            8. REMEDIES, ETC., CUMULATIVE. Each right, power and remedy of the
Pledgee provided for in this Agreement or any other Loan Document or now or
hereafter existing at law or in equity or by statute shall be cumulative and
concurrent and shall be in addition to every other such right, power or remedy.
The exercise or beginning of the exercise by the Pledgee of any one or more of
the rights, powers or remedies provided for in this Agreement or any other Loan
Document or now or hereafter existing at law or in equity or by statute or
otherwise shall not preclude the simultaneous or later exercise by the Pledgee
of all such other rights, powers or remedies, and no failure or delay on the
part of the Pledgee to exercise any such right, power or remedy shall operate as
a waiver thereof.

            9. APPLICATION OF PROCEEDS. (a) All Proceeds including all moneys
collected by the Pledgee upon any disposition of the Collateral pursuant to the
terms of this Agreement, together with all other moneys received by the Pledgee
hereunder, shall be applied as follows:

                  (i) first, to the payment of all amounts owing the Lender of
            the type described in clauses (ii) and (iii) of Section 1 hereof
            (the definition of "Obligations");

                  (ii) second, to the extent Proceeds remain after the
            application pursuant to the preceding clause (i), an amount equal to
            the outstanding Primary Obligations (as hereinafter defined) shall
            be paid to the Pledgee as provided in Section 9(c) hereof;

                  (iii) third, to the extent Proceeds remain after the
            application pursuant to the preceding clauses (i) and (ii), an
            amount equal to the outstanding Secondary Obligations shall be paid
            to the Pledgee as provided in Section 9(c) hereof; and

                  (iv) fourth, to the extent Proceeds remain after the
            application pursuant to the preceding clauses (i) through (iii),
            inclusive, and following the termination of this Agreement pursuant
            to Section 16 hereof, to each Pledgor or to whomever may be lawfully
            entitled to receive such surplus.

            (b) For purposes of this Agreement (x) "Primary Obligations" shall
mean all principal of, and interest on, all Loans and all Fees and (y)
"Secondary Obligations" shall mean all Obligations other than Primary
Obligations.


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            (c) All payments required to be made hereunder shall be made
directly to the Pledgee.

            (d) It is understood and agreed that each Pledgor shall remain
liable to the extent of any deficiency between the amount of the Proceeds of the
Collateral hereunder and the aggregate amount of the Obligations.

            10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by the
Pledgee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of the Pledgee or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof.

            11. INDEMNITY. (a) Each Pledgor agrees to indemnify, reimburse and
hold the Pledgee and its successors, assigns, employees, agents and servants
(hereinafter in this Section 11 referred to individually as an "Indemnitee," and
collectively as the "Indemnitees") harmless from any and all liabilities,
obligations, damages, injuries, penalties, claims, demands, actions, suits,
judgments and any and all costs, expenses or disbursements (including reasonable
attorneys' fees and expenses) (for the purposes of this Section 11 the foregoing
are collectively called "expenses") of whatsoever kind and nature imposed on,
asserted against or incurred by any of the Indemnitees in any way relating to or
arising out of this Agreement, any Loan Document or any other document executed
in connection herewith and therewith or the enforcement of any of the terms of,
or the preservation of any rights under any thereof, or in any way relating to
or arising out of the ownership, control, acceptance, possession, condition,
sale or other disposition, or use of the Collateral; provided that no Indemnitee
shall be indemnified pursuant to this Section 11(a) for expenses to the extent
caused by the gross negligence or willful misconduct of such Indemnitee or
failure to comply with the obligations of the Pledgee hereunder and under the
Credit Agreement. Each Pledgor agrees that upon written notice by any Indemnitee
of the assertion of such a liability, obligation, damage, injury, penalty,
claim, demand, action, suit or judgment, each Pledgor shall to the extent
requested to do so assume full responsibility for the defense thereof. Each
Indemnitee agrees to use its best efforts to promptly notify each Pledgor of any
such assertion of which such Indemnitee has knowledge.

            (b) Without limiting the application of Section 11(a) hereof, each
Pledgor agrees to pay or reimburse the Pledgee for any and all reasonable fees,
costs and expenses of whatever kind or nature incurred in connection with the
creation, preservation or protection of the Pledgee's Liens on, and security
interest in, the Collateral, including, without limitation, all fees and taxes
in connection with the recording or filing of instruments and documents in
public offices, payment or discharge of any taxes or Liens upon or in respect of
the Collateral, and all other fees, costs and expenses in connection with
protecting, maintaining or preserving the Collateral and the Pledgee's interest
therein, whether through judicial proceedings or otherwise, or in defending or
prosecuting any actions, suits or proceedings arising out of or relating to the
Collateral.


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            (c) If and to the extent that the obligations of each Pledgor under
this Section 11 are unenforceable for any reason, each Pledgor hereby agrees to
make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.

            12. FURTHER ASSURANCES. Each Pledgor agrees that it will join with
the Pledgee in executing and at each Pledgor's own expense, file and refile
under the UCC of any jurisdiction such financing statements, continuation
statements and other documents in such offices as the Pledgee may deem necessary
or appropriate and wherever required or permitted by law in order to perfect and
preserve the Pledgee's security interest in the Collateral and hereby authorizes
the Pledgee to file financing statements and amendments thereto relative to all
or any part of the Collateral without the signature of each Pledgor where
permitted by law, and agrees to do such further acts and things and to execute
and deliver to the Pledgee such additional conveyances, assignments, agreements
and instruments as the Pledgee may reasonably require or deem advisable to carry
into effect the purposes of this Agreement or to further assure and confirm unto
the Pledgee its rights, powers and remedies hereunder.

            13. TRANSFER BY PLEDGOR. Each Pledgor will not sell or otherwise
dispose of, grant any option with respect to, or mortgage, pledge or otherwise
encumber any of the Collateral or any interest therein (except pursuant to this
Agreement and as permitted by the Loan Documents).

            14. REPRESENTATIONS, WARRANTIES AND COVENANTS OF EACH PLEDGOR. Each
Pledgor represents, warrants and covenants that: (i) it is the legal, record and
beneficial owner of, and has good and marketable title to, all Collateral
pledged by it hereunder, or in which it has granted a security interest pursuant
hereto, subject to no pledge, lien, mortgage, hypothecation, security interest,
charge, option or other encumbrance whatsoever, except the liens and security
interests created by this Agreement; (ii) it has full power (whether
partnership, corporate, company or otherwise), authority and legal right to
pledge and grant a security interest in all the Collateral pledged and assigned
by it pursuant to this Agreement; (iii) this Agreement has been duly authorized,
executed and delivered by such Pledgor and constitutes the legal, valid and
binding obligation of such Pledgor enforceable in accordance with its terms,
except to the extent that the enforceability hereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and by equitable principles (regardless of
whether enforcement is sought in equity or at law); (iv) except as have been
obtained or made, no consent of any other party and no consent, license, permit,
approval or authorization of, exemption by, notice or report to, or
registration, filing or declaration with, any governmental authority is required
to be obtained by such Pledgor in connection with the execution, delivery or
performance of this Agreement; (v) to the best knowledge of such Pledgor, the
execution, delivery and performance of this Agreement by such Pledgor does not
violate any provision of any applicable law or regulation or of any order,
judgment, writ, award or decree of any court arbitrator or governmental
authority, domestic or foreign, or of the partnership agreement, operating
agreement, bylaws or equivalent (generally, a "Business Agreement") of such
Pledgor or of any partnership units, membership units, securities or equivalent
issued by such Pledgor or any of its Subsidiaries, or of any mortgage,
indenture, lease, deed of trust, agreement (including any Business Agreement of
any Subsidiary


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of such Pledgor), instrument or undertaking to which such Pledgor or any of its
Subsidiaries is a party or which purports to be binding upon such Pledgor or any
of its Subsidiaries or upon any of their respective assets and will not result
in the creation or imposition of (or the obligation to create or impose) any
lien or encumbrance on any of the assets of such Pledgor or any of its
Subsidiaries except as contemplated by this Agreement; (vi) all Intercompany
Debt has been validly acquired and validly pledged hereunder; (vii) to the best
knowledge of such Pledgor, such Pledgor is not in default of any of its
obligations under such Business Agreement; (viii) this Agreement creates (after
all steps required under Article 8 of the UCC have been taken) in favor of the
Pledgee a legal, valid and enforceable security interest in all right, title and
interest of such Pledgor in the Collateral owned by such Pledgor on any date on
which this representation and warranty is made or deemed made, which security
interest shall, upon the taking of all steps required under Article 8 of the UCC
(which delivery filings and/or steps have been done and remain in full force and
effect as to the Collateral owned by such Pledgor on any date on which this
representation and warranty is made or deemed made), constitute a fully
perfected first lien on, and security interest in, all right, title and interest
of such Pledgor in all of such Collateral, subject to no security interests of
any other Person; (ix) there are no currently effective financing statements
under the UCC covering any property which is now or hereafter may be included in
the Collateral except financing statements filed or to be filed in favor of the
Pledgee as secured party; and (x) the chief executive office and principal place
of business of such Pledgor and the sole location where the records of such
Pledgor with respect to the Collateral are kept are located at 1300 Wilson
Boulevard, Arlington, Virginia 22209 and such Pledgor shall not move its chief
executive office, principal place of business or such location of records prior
written notice to the Pledgor and in compliance with the terms of the Credit
Agreement. Each Pledgor covenants and agrees that it will defend the Pledgee's
right, title and security interest in and to the Collateral and the Proceeds
thereto against the claims and demands of all persons whomsoever.

            15. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. The obligations of each
Pledgor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended. discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever, including, without limitation: (i) any renewal,
extension, amendment or modification of or addition or supplement to or deletion
from any Loan Document or any other instrument or agreement referred to therein,
or any assignment or transfer of any thereof; (ii) any waiver, consent.
extension, indulgence or other action or inaction under or in respect of any
such Loan Document or other agreement or instrument or this Agreement; (iii) any
furnishing of any additional security to the Pledgee or its assignee or any
acceptance thereof or any release of any security by the Pledgee or its
assignee; (iv) any limitation on any party's liability or obligations under any
such instrument or agreement or any invalidity or unenforceability, in whole or
in part, of any such instrument or agreement or any term thereof; or (v) any
bankruptcy, insolvency, reorganization, composition, adjustment. dissolution,
liquidation or other like proceeding relating to each Pledgor, any Subsidiary of
each Pledgor, or any action taken with respect to this Agreement by any trustee
or receiver, or by any court, in any such proceeding, whether or not each
Pledgor shall have notice or knowledge of any of the foregoing.


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            16. TERMINATION, RELEASE. (a) After the Termination Date (as defined
below), this Agreement shall terminate (provided that all indemnities set forth
herein including, without limitation, in Section 11 hereof shall survive any
such termination) and the Pledgee, at the request and expense of each Pledgor,
will promptly execute and deliver to each Pledgor a proper instrument or
instruments acknowledging the satisfaction and termination of this Agreement,
and will duly assign, transfer and deliver to each Pledgor (without recourse and
without any representation or warranty) such of the Collateral as may be in the
possession of the Pledgee and as has not theretofore been sold or otherwise
applied or released pursuant to this Agreement. As used in this Agreement,
"Termination Date" shall mean the date upon which the Commitment has been
terminated, the Revolving Note together with interest thereon, Fees and all
other Obligations then owing under the Credit Agreement and all other Loan
Documents have been indefeasibly and irrevocably repaid in full.

            (b) In the event that any part of the Collateral is sold or released
by the Pledgee and the proceeds of such sale or sales or from such release are
applied in accordance with the provisions of the Credit Agreement, to the extent
required to be so applied, the Pledgee, at the request and expense of each
Pledgor, will duly assign, transfer and deliver to each Pledgor (without
recourse and without any representation or warranty) such of the Collateral as
is then being (or has been) so sold or released and as may be in the possession
of the Pledgee and has not theretofore been released pursuant to this Agreement.

            (c) At any time that each Pledgor desires that Collateral be
released as provided in the foregoing sub-section (a) or (b), it shall deliver
to the Pledgee a certificate signed by an Authorized Representative of each
Pledgor stating that the release of the respective Collateral is permitted
pursuant to such subsection (a) or (b).

            17. NOTICES, ETC. Unless otherwise agreed, all notices, requests and
demands to or upon the respective parties hereto to be effective shall be in
writing (including by telecopy) and, unless otherwise expressly provided herein,
shall be deemed to have been duly given or made when delivered by hand, or 3
days after being sent by certified mail, return receipt requested, postage
prepaid or upon delivery or rejection by overnight courier, expense prepaid, or,
in the case of telecopy notice, when received, addressed as follows or to such
other address as may be hereafter notified by the respective parties hereto:

            (a)   each Pledgor:

                  c/o The Mills Corporation
                  1300 Wilson Boulevard
                  Arlington, Virginia  22209
                  Attention: Thomas E. Frost, Esq.
                  Tel: (703) 526-5000
                  Fax: (703) 526-5125


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            with a copy to:

                  Rudnick & Wolfe
                  203 North LaSalle Street
                  Suite 1800
                  Chicago, Illinois  60601-1293
                  Attention: Robert Goldman, Esq.
                  Tel: (312) 368-4000
                  Fax: (312) 236-7516

            (b)   the Pledgee:

                  CS First Boston Mortgage Capital Corp.
                  55 East 52nd Street, 32nd Floor
                  New York, New York  10055
                  Attn: Mr. Robert K. Vahradian
                  Tel: (212) 909-2178
                  Fax: (212) 755-5681

            with a copy to:

                  Kramer, Levin, Naftalis & Frankel
                  919 Third Avenue
                  New York, NY  10022
                  Attention: Mark S. Fawer, Esq.
                  Tel: (212) 715-9372
                  Fax: (212) 715-8000

            18. WAIVER; AMENDMENT. None of the terms and conditions of this
Agreement may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly signed by the parties hereto.

            19. PLEDGEE NOT BOUND. (a) The Pledgee shall not be obligated to
perform or discharge any obligation of each Pledgor as a result of the
collateral assignment hereby effected.

            (b) The acceptance by the Pledgee of this Agreement, with all the
rights, powers, privileges and authority so created, shall not at any time or in
any event obligate the Pledgee to appear in or defend any action or proceeding
relating to the Collateral to which it is not a party, or to take any action
hereunder or thereunder, or to expend any money or incur any expenses or perform
or discharge any obligation, duty or liability under the Collateral.

            20. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
successors and assigns of each Pledgor (although each Pledgor may not assign its
rights and obligations hereunder) and shall inure to the benefit of and be
enforceable by the Pledgee and its successors and assigns. The Pledgee may
assign its rights and delegate its obligations under


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this Agreement, in each case in full or in part, to a bank, financial
institution or other entity, in which event, upon written notice thereof by the
Pledgee to each Pledgor, the assignee shall have, to the extent of such
assignment (unless otherwise provided therein), the same rights and benefits as
it would have had if it were the Pledgee hereunder. The Pledgee may furnish any
information concerning each Pledgor, in the possession of the Pledgee from time
to time, to assignees (including prospective assignees), including, without
limitation, any and all documentation relating to the Intercompany Debt and the
results of the Pledgee's examination of the operations, books and records of
each Subsidiary of each Pledgor.

            21. GOVERNING LAW. (a) THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS EXCEPT FOR THE CHOICE OF LAW PROVISIONS OF
THE NEW YORK UCC.

            (b) EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY CONSENTS TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, COUNTY OF NEW YORK AND OF
ANY FEDERAL COURT LOCATED IN THE SOUTHERN DISTRICT OF NEW YORK, AND AGREES THAT
VENUE IN EACH OF SUCH COURTS IS PROPER IN CONNECTION WITH ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT OR
INSTRUMENT DELIVERED PURSUANT TO THIS AGREEMENT. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF THE PLEDGEE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST EACH PLEDGOR IN ANY
OTHER REASONABLE JURISDICTION.

            (c) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
KNOWINGLY AND VOLUNTARILY WAIVES TRIAL BY JURY IN ANY LITIGATION IN ANY COURT
WITH RESPECT TO ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR ANY INSTRUMENT OR DOCUMENT DELIVERED PURSUANT
TO THIS AGREEMENT, (II) ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY
OR (III) ANY COURSE OF CONDUCT OR STATEMENTS OR ACTIONS OF ANY PARTY HERETO IN
CONNECTION HEREWITH OR THEREWITH OR IN CONNECTION WITH THE VALIDITY, PROTECTION,
INTERPRETATION, COLLECTION OR ENFORCEMENT THEREOF OR ANY OTHER CLAIM OR DISPUTE
HOWSOEVER ARISING, BETWEEN THE PLEDGOR AND THE PLEDGEE.

            22. COUNTERPARTS. This Agreement may be executed by the parties
hereto individually or in any combination, in one or more counterparts, each of
which shall be an original and all of which shall together constitute one and
the same agreement.

            23. SEVERABILITY. Any provision of this Agreement prohibited by the
laws of any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition, or modified to conform with such laws, without
invalidating the remaining provisions of this


                                     - 11 -
<PAGE>

Agreement, and any such prohibition in any jurisdiction shall not invalidate
such provisions in any other jurisdiction.

            24. RECOURSE. This Agreement is made with full recourse to each
Pledgor (including. without limitation, with full recourse to all assets of each
Pledgor) and pursuant to and upon the representations, warranties, covenants and
the agreements on the part of each Pledgor contained herein, in the Loan
Documents and otherwise in writing in connection herewith or therewith.

            IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused this
Agreement to be executed by their respective officers thereunto duly authorized
as of the day and year first above written.

                     CS FIRST BOSTON MORTGAGE CAPITAL CORP.


                     By:__________________________________
                        Name:
                        Title:


                     THE MILLS LIMITED PARTNERSHIP


                     By: THE MILLS CORPORATION,
                     its General Partner


                      By:__________________________________
                         Name: Thomas E. Frost
                         Title: Senior Vice President


                      THE MILLS CORPORATION


                      By:__________________________________
                         Name: Thomas E. Frost
                         Title: Senior Vice President


                                     - 12 -
<PAGE>

                      SUNRISE MILLS (MLP) LIMITED PARTNERSHIP


                      By: SUNRISE MILLS L.L.C.,
                      its General Partner


                      By: WESTERN SAWGRASS MILLS CORP.,
                      its Manager


                      By:__________________________________
                         Name: Thomas E. Frost
                         Title: Senior Vice President


                      SAWGRASS MILLS PHASE II LIMITED PARTNERSHIP
 

                      By: SAWGRASS MILLS PHASE II, LLC,
                      its General Partner


                      By: THE MILLS LIMITED PARTNERSHIP,
                      its General Manager


                      By: THE MILLS CORPORATION,
                      its General Partner


                      By:__________________________________
                         Name:  Thomas E. Frost
                         Title: Senior Vice President


                                    - 13 -