<PAGE>
                                                          EXHIBIT 10.57

================================================================================

================================================================================

                                CREDIT AGREEMENT

                                      among

                             THE MILLS CORPORATION,

                         THE MILLS LIMITED PARTNERSHIP,
                                  as Borrower,

                  SAWGRASS MILLS PHASE II LIMITED PARTNERSHIP,

                     SUNRISE MILLS (MLP) LIMITED PARTNERSHIP

                                       and

                     CS FIRST BOSTON MORTGAGE CAPITAL CORP.,
                                    as Lender

                          dated as of October 28, 1996

================================================================================

================================================================================
<PAGE>

                                TABLE OF CONTENTS

                                    ARTICLE I
                                   DEFINITIONS

SECTION 1.1.  Defined Terms..................................................  1
                                                                             
                                   ARTICLE II
                      LOANS; TERM OF COMMITMENT; EXPIRATION
                                                                             
SECTION 2.1.  The Revolving Loans; Term of Commitment........................ 15
SECTION 2.2.  Minimum Amount of each Borrowing............................... 17
SECTION 2.3.  Procedure for Borrowing........................................ 17
SECTION 2.4.  Revolving Note................................................. 17
SECTION 2.5.  Interest....................................................... 17
SECTION 2.6.  Fees........................................................... 18
SECTION 2.7.  Reduction of Commitment; Voluntary Termination                 
                of Unutilized Commitment..................................... 19
SECTION 2.8.  Payments; Termination of Commitment............................ 19
SECTION 2.9.  Use of Proceeds................................................ 19
SECTION 2.10. Illegality..................................................... 19
SECTION 2.11. Requirements of Law............................................ 20
SECTION 2.12. Taxes.......................................................... 21
                                                                             
                                   ARTICLE III
                             PREPAYMENTS; REPAYMENTS
                                                                             
SECTION 3.1.  Voluntary Prepayments.......................................... 22
SECTION 3.2.  Mandatory Repayments and Commitment Reductions................. 22
                                                                             
                                   ARTICLE IV
                              CONDITIONS OF LENDING
                                                                             
SECTION 4.1.  Conditions Precedent to Making Initial Revolving Loans......... 24
SECTION 4.2.  Conditions Precedent to Each Loan.............................. 26
                                                                             
                                    ARTICLE V
                         REPRESENTATIONS AND WARRANTIES
                                                                             
SECTION 5.1.  Status and Standing............................................ 27
SECTION 5.2.  Power and Authority............................................ 27
SECTION 5.3.  Enforceable Obligations........................................ 27
SECTION 5.4.  No Violation of Agreements; Compliance with Law................ 28
SECTION 5.5.  No Litigation.................................................. 28
SECTION 5.6.  Taxes and Claims............................................... 28
SECTION 5.7.  Employee Benefit Plans......................................... 29
SECTION 5.8.  No Event of Default............................................ 30


                                     - i -
<PAGE>                                                                       

                                                                            Page
                                                                            ----
SECTION 5.9.   Financial Statements.......................................... 30
SECTION 5.10.  Environmental Laws, Etc....................................... 30
SECTION 5.11.  No Adverse Conditions......................................... 31
SECTION 5.12.  Solvency...................................................... 31
SECTION 5.13.  Margin Stock.................................................. 31
SECTION 5.14.  No Investment Company......................................... 31
SECTION 5.15.  Security Interests............................................ 31
SECTION 5.16.  Properties.................................................... 32
SECTION 5.17.  Partnership Agreements........................................ 32
SECTION 5.18.  Subsidiary Partnerships....................................... 32
SECTION 5.19.  Debt.......................................................... 32
SECTION 5.20.  Accuracy of Information....................................... 32
SECTION 5.21.  Business Plans................................................ 32
                                                                            
                                   ARTICLE VI
                              AFFIRMATIVE COVENANTS
                                                                            
SECTION 6.1.   Financial Statements and Other Information.................... 33
SECTION 6.2.   Taxes and Claims.............................................. 34
SECTION 6.3.   Maintenance of Property; Insurance............................ 34
SECTION 6.4.   Books and Records............................................. 35
SECTION 6.5.   Inspection.................................................... 36
SECTION 6.6.   Pay Debt and Perform Other Covenants.......................... 36
SECTION 6.7.   Compliance With Laws.......................................... 36
SECTION 6.8.   Conduct of Business and Maintenance of Existence.............. 37
SECTION 6.9.   Notice of Certain Events...................................... 37
SECTION 6.10.  Environmental Laws, Etc....................................... 37
SECTION 6.11.  ERISA......................................................... 38
SECTION 6.12.  Maintain Security Interest.................................... 39
SECTION 6.13.  Compliance with Partnership Agreements........................ 39
SECTION 6.14.  Further Assurances............................................ 39
                                                                            
                                   ARTICLE VII
                               NEGATIVE COVENANTS

SECTION 7.1.   Liens......................................................... 39
SECTION 7.2.   Restrictions on Distributions................................. 40
SECTION 7.3.   Debt.......................................................... 40
SECTION 7.4.   Merger, Consolidation, Sale or Transfers of Assets............ 40
SECTION 7.5.   Contingent Obligations........................................ 41
SECTION 7.6.   Investments................................................... 41
SECTION 7.7.   Intercompany Debt............................................. 41
SECTION 7.8.   Transactions with Affiliates.................................. 41
SECTION 7.9.   Events of Default............................................. 41
SECTION 7.10.  Use of Proceeds............................................... 42


                                     - ii -
<PAGE>                                                                 

                                                                            Page
                                                                            ----
SECTION 7.11.  Accounting Changes............................................ 42
SECTION 7.12.  Financial Covenants........................................... 42
                                                                            
                                  ARTICLE VIII
                              DEFAULTS AND REMEDIES
                                                                            
SECTION 8.1.   Events of Default............................................. 42
SECTION 8.2.   Consequences of an Event of Default........................... 44
                                                                            
                                   ARTICLE IX
                                      AGENT
                                                                            
SECTION 9.1.   Appointment................................................... 44
SECTION 9.2.   Nature of Duties.............................................. 45
SECTION 9.3.   Lack of Reliance on the Agent................................. 45
SECTION 9.4.   Intentionally Omitted......................................... 45
SECTION 9.5.   Reliance...................................................... 46
SECTION 9.6.   Indemnification............................................... 46
SECTION 9.7.   The Lender in its Individual Capacity......................... 46
SECTION 9.8.   Holders....................................................... 46
SECTION 9.9.   Resignation by the Agent...................................... 46
                                                                            
                                    ARTICLE X
                                  MISCELLANEOUS
                                                                            
SECTION 10.1.  Collection Costs.............................................. 47
SECTION 10.2.  No Waiver..................................................... 47
SECTION 10.3.  GOVERNING LAW................................................. 47
SECTION 10.4.  Notices....................................................... 48
SECTION 10.5.  Costs and Expenses; Indemnity................................. 49
SECTION 10.6.  Fees Nonrefundable; Payments in U.S. Currency; Computations... 50
SECTION 10.7.  WAIVER OF JURY TRIAL AND SETOFF............................... 50
SECTION 10.8.  Captions...................................................... 50
SECTION 10.9.  Lien; Set-off................................................. 50
SECTION 10.10. Security...................................................... 51
SECTION 10.11. JURISDICTION; SERVICE OF PROCESS.............................. 51
SECTION 10.12. Benefit of Agreement; Assignments............................. 51
SECTION 10.13. Amendment or Waiver, etc...................................... 53
SECTION 10.14. Counterparts.................................................. 54
SECTION 10.15. Severability.................................................. 54


                                    - iii -
<PAGE>

                                                                            Page
                                                                            ----
SCHEDULE 1       Community Centers
SCHEDULE 5.1(b)  Subsidiary Partnerships
SCHEDULE 5.16    Real Estate Assets
SCHEDULE 5.17    Partnership Agreements
SCHEDULE 5.18    Borrower's Interests in Subsidiary Partnerships
SCHEDULE 5.19    Existing Debt
SCHEDULE 6.1     Form of Income Statements

EXHIBIT A     Form of Revolving Note
EXHIBIT B-1   Form of General Pledge and Security Agreement
EXHIBIT B-2   Form of Intercompany Pledge and Security Agreement
EXHIBIT C     Form of Notice of Borrowing
EXHIBIT D     Form of Opinion of Counsel to the Borrower
EXHIBIT E     Form of Assignment and Assumption Agreement


                                     - iv -
<PAGE>

            CREDIT AGREEMENT, dated as of October 28, 1996, among THE MILLS 
CORPORATION, a Delaware corporation (together with its successors and 
assigns, the "REIT"), THE MILLS LIMITED PARTNERSHIP, a Delaware limited 
partnership (together with its successors and assigns, the "Borrower"), 
SAWGRASS MILLS PHASE II LIMITED PARTNERSHIP, a Delaware limited partnership 
(together with its successors and assigns, "Sawgrass"), SUNRISE MILLS (MLP) 
LIMITED PARTNERSHIP, a District of Columbia limited partnership (together 
with its successors and assigns, "Sunrise," and together with Sawgrass, the 
"Subsidiary Partnerships" and each, a "Subsidiary Partnership") and CS FIRST 
BOSTON MORTGAGE CAPITAL CORP. (together with its successors and assigns, 
the "Lender").

                              W I T N E S S E T H :

            WHEREAS, subject to and upon the terms and conditions set forth
herein, the Lender is willing to make available to the Borrower the credit
facility provided for herein;

            NOW THEREFORE, on the basis of the premises, agreements and
covenants herein contained and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

            SECTION 1.1. Defined Terms. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):

            "Acquired Debt" shall mean Debt of a Person (i) existing at the time
such Person becomes an Affiliated Entity and/or (ii) assumed in connection with
the acquisition of any assets from such Person, in each case, other than Debt
incurred in connection with, or in contemplation of, such Person becoming an
Affiliated Entity or such acquisition. Acquired Debt shall be deemed to be
incurred on the date of such acquisition of assets from any Person or the date
any Person becomes an Affiliated Entity.

            "Affiliate" shall mean, with respect to any Person, any other Person
(i) directly or indirectly controlling (including, but not limited to, all
directors, officers, members and partners of such Person), controlled by, or
under direct or indirect common control with, such Person or (ii) that directly
or indirectly owns more than 5% of any class of the voting securities or capital
stock of or equity or partnership interests in such Person. A Person shall be
deemed to control another Person if such Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such other Person, whether through the ownership of voting
securities, as an officer, director, member, general or limited partner of such
Person, by contract or otherwise.
<PAGE>

            "Affiliated Entity" shall mean any Person in which the REIT, the
Borrower or any of the Consolidated Subsidiaries owns or holds, directly or
indirectly, a Capital Interest.

            "Agreement" shall mean this Credit Agreement, as modified,
supplemented or amended from time to time.

            "Allocated Affiliate Debt" shall mean the allocation of any
Affiliated Entity's Debt to any entity comprising the Company, determined on a
consolidated basis, such allocation to be based on the (i) the total Debt of
such Affiliated Entity multiplied by (ii) the sum of the equity required to be
contributed by such entity (whether classified as a capital contribution or a
loan) to such Affiliated Entity divided by the entire equity contribution
required to be contributed by all parties to such Affiliated Entity (whether
classified as a capital contribution or a loan).

            "Annual Service Charge" shall mean for any 12-month period the
interest expense (exclusive of non-cash amortization) of the Company calculated
in accordance with GAAP, consistently applied, and any late charges applicable
thereto payable by the Company plus the aggregate amount of recurring principal
amortization payable by the Company in respect of all Debt of the Company.

            "Applicable Margin" shall mean 300 basis points.

            "Asset Sale" shall mean any sale, transfer, or other disposition by
the Company to any Person other than an entity comprising the Company of all or
any portion of any Real Estate Asset or any interest therein.

            "Authorized Representative" shall mean, with respect to any Person,
the president, the chief financial officer, chief accounting officer and any
other officer of such Person designated as such from time to time in a written
notice to the Lender, accompanied by an incumbency certificate with specimen
signature included.

            "Bank" shall mean any bank, trust company or financial institution
having a debt rating of (i) at least Baa-1 or the equivalent thereof from
Moody's or (ii) at least BBB+ or the equivalent thereof from S&P.

            "Borrower" shall have the meaning provided in the first paragraph of
this Agreement.

            "Borrowing" shall mean the obligation of the Lender to the Borrower
to make any Revolving Loan.

            "Breakage Costs" shall mean any actual out-of-pocket losses, costs
or expenses incurred by the Lender as a result of any payment of the principal
amount of the Revolving 


                                     - 2 -
<PAGE>

Loans under this Agreement or under the Revolving Note made by the Borrower to
the Lender (other than on the last day of an Interest Period) by reason of
liquidation or redeployment of deposits or other funds acquired by the Lender to
fund or maintain such principal amount.

            "Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day except Saturday, Sunday and any day which shall be
in New York City a legal holiday or a day on which banking institutions are
authorized or required by law or other government action to close, and (ii) with
respect to all determinations in connection with calculating LIBOR, and payments
of principal and interest on, the Revolving Loans, any day which is a Business
Day described in clause (i) above and which is also a day on which commercial
banks are open for international business (including dealing with Dollar
deposits) in London.

            "Capital Expenditures" shall mean, with respect to any Person, all
expenditures by such Person which should be capitalized in accordance with GAAP,
including without limitation all such expenditures with respect to fixed or
capital assets (including, without limitation, expenditures for maintenance and
repairs which should be capitalized in accordance with GAAP) and, without
duplication, the amount of all Capitalized Lease Obligations incurred by such
Person.

            "Capital Interest" shall mean, with respect to (i) any corporation,
common stock or preferred stock which is not redeemable by the issuer thereof,
and any and all shares or other equivalents (however designated) of any other
corporate stock, of such corporation and (ii) any partnership, limited liability
company, trust or other entity, partnership interests, whether general, special
or limited, in such partnership, membership interests or any equity interest in
such trust or other entity.

            "Capitalized Lease Obligations" of any Person shall mean all rental
obligations which, under GAAP, are or will be required to be capitalized on the
books of such Person, in each case taken at the amount thereof accounted for as
debt in accordance with GAAP.

            "Cash Equivalents" shall mean (i) the securities issued or directly
and fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States or America is pledged in support thereof) having maturities of not more
than six months from the date of acquisition, (ii) U.S. dollar denominated time
deposits, certificates of deposit and bankers acceptances of (x) Credit Suisse
or (y) any bank whose short-term commercial paper rating from S&P is at least
A-1 or the equivalent thereof (any such bank or Credit Suisse, an "Approved
Bank"), in each case with maturities of not more than six months from the date
of acquisition, (iii) commercial paper issued by any Approved Bank or by the
parent company of any Approved Bank and commercial paper issued by, or
guaranteed by, any industrial or financial company with a short-term commercial
paper rating of at least A-1 or the equivalent thereof by S&P or at least P-1 or
the equivalent thereof by Moody's, or guaranteed by any industrial company with
a long term


                                     - 3 -
<PAGE>

unsecured debt rating of at least A or A2, or the equivalent of each thereof,
from S&P or Moody's, as the case may be, and in each case maturing within six
months after the date of acquisition, (iv) marketable direct obligations issued
by any state of the United States of America or any political subdivision of any
such state or any public instrumentality thereof maturing within six months from
the date of acquisition thereof, and at the time of acquisition, having one of
the two highest ratings obtainable from either S&P or Moody's and (v)
investments in money market funds substantially all the assets of which are
comprised of securities of the types described in clauses (i) through (iv)
above.

            "Cash Proceeds" shall mean, with respect to any Asset Sale, the
aggregate cash payments (including any cash received by way of deferred payment
pursuant to a note receivable issued in connection with such Asset Sale, but
only as and when so received under such note receivable) received from such
Asset Sale.

            "Change of Control" shall mean an occurrence in which (i) in the
case of the Borrower, at any time during the continuance of this Agreement, the
REIT shall cease to have the ability, directly or indirectly, through the
ownership of any Capital Interest, or by contract, to direct the conduct of the
day to day business activities of the Borrower without any other Person having
any veto rights in respect thereof or shall mortgage, pledge, hypothecate or
otherwise encumber its Capital Interest in the Borrower, (ii) in the case of any
of the Consolidated Subsidiaries, the Borrower shall assign, transfer, sell,
mortgage, pledge, hypothecate or otherwise dispose of any or all of its Capital
Interest in such Consolidated Subsidiary other than the Collateral under this
Agreement to this Lender or (iii) the REIT shall cease to qualify as a real
estate investment trust pursuant to the Code or shares of stock thereof shall
cease to be publicly traded.

            "Code" shall mean the Internal Revenue Code of 1986, and all rules
and regulations promulgated pursuant thereto, as the same may have been or may
be amended or supplemented from time to time.

            "Collateral" shall mean all property (whether real or personal) with
respect to which any security interest has been granted (or purported to be
granted) pursuant to any Security Document, including without limitation, all
"Collateral" under, and as defined in, the Pledge and Security Agreements.

            "Commitment" shall mean, as of any date of calculation, Forty
Million Dollars ($40,000,000) or such lower amount to which said Commitment
shall have been reduced from time to time pursuant to Sections 2.7 and 3.2
hereof.

            "Community Centers" shall mean those eleven community shopping
centers set forth on Schedule 1 owned by the Borrower or in which the Borrower
has a Capital Interest.

            "Company" shall mean the REIT, the Borrower and its Consolidated
Subsidiaries.


                                     - 4 -
<PAGE>

            "Consolidated Debt" shall mean, at any time, all Debt of all of the
entities comprising the Company as would be required to be reflected on the
liability side of a balance sheet as prepared in accordance with GAAP and as
determined on a consolidated basis, including, in any event whether or not shown
on such balance sheet, all Revolving Loans, Allocated Affiliate Debt of all
entities comprising the Company and all Acquired Debt of the Company.

            "Consolidated Income Available For Debt Service" shall mean, for any
period, Funds Available For Distribution, if any, plus the sum of (a) the Annual
Service Charge and (b) interest income earned by and paid to the Company less
(c) fee income earned by and paid to the Company and less (d) cash proceeds
received by the Company from land and other such non-income producing property
sales for such period and which are not classified as Funds From Operations.

            "Consolidated Service Charge Coverage Ratio" means for any period
the ratio of (i) Consolidated Income Available For Debt Service for such period
to (ii) the Annual Service Charge for such period.

            "Consolidated Subsidiary" shall mean, as to any Person, any
corporation, partnership, association, joint venture or any other entity whose
financial information would in accordance with GAAP be consolidated with that of
the Borrower and which, by definition, includes any Subsidiary Partnership.

            "Contingent Obligation" shall mean, as to any Person, any obligation
of such Person guaranteeing or intended to guarantee any Debt, leases, dividends
or other obligations ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (x) for the purchase
or payment of any such primary obligation or (y) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation, (iv) as a result of such Person being a general partner of the other
Person, unless the underlying obligation is expressly made non-recourse as to
such general partner or (v) otherwise to assure or hold harmless the holder of
such primary obligation against loss in respect thereof; provided, however, that
the term Contingent Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.


                                     - 5 -
<PAGE>

            "Credit Party" shall mean the REIT, the Borrower and each Subsidiary
Partnership.

            "Debt" shall mean, as to any Person, without duplication or
double-counting, (i) all debt (including principal, interest, fees and charges)
of such Person for borrowed money or for the deferred purchase price of
property, (ii) the maximum amount available to be drawn under all letters of
credit issued for the account of such Person and all unpaid drawings in respect
of such letters of credit, (iii) all Debt of the types described in clauses (i),
(ii), (iv), (v), (vi), (vii) or (viii) of this definition secured by any Lien on
any property owned by such Person, whether or not such Debt has been assumed by
such Person, (iv) the aggregate amount required to be capitalized under leases
under which such Person is the lessee, (v) all obligations of such Person to pay
a specified purchase price for goods or services, whether or not delivered or
accepted, i.e., take-or-pay and similar obligations, (vi) all Contingent
Obligations of such Person (except in the case of any entity comprising the
Company, if and to the extent that such Contingent Obligations are permitted
pursuant to Section 7.5 hereof), (vii) all obligations under any Interest Rate
Protection Agreement or Other Hedging Agreement or under any similar type of
agreement, (viii) all other financial obligations and liabilities that in
accordance with GAAP would be reflected as a liability on the balance sheet of
such Person, (ix) all obligations of such Person to repurchase property sold by
such Person under repurchase agreements entered into by such Person and (x) in
the case of any entity comprising the Company, all Allocated Affiliated Debt,
provided that the definition of "Debt" shall not include normal and customary
trade accounts payable due and payable within 120 days from the date of invoice.

            "Distribution" with respect to any Person shall mean that such
Person has declared or paid a dividend or returned any equity capital or repaid
any loan to its stockholders, members or partners or authorized or made any
other distribution, payment or delivery of property (other than common stock,
membership interests or partnership interests of such Person) or cash to its
stockholders, members or partners as such, or redeemed, retired, purchased or
otherwise acquired, directly or indirectly, for a consideration any shares of
any class of its capital stock, membership interests or any partnership
interests outstanding on or after the Effective Date (or any options or warrants
issued by such Person with respect to its capital stock, membership interests or
partnership interests), or set aside any funds for any of the foregoing
purposes, or shall have permitted any of its Subsidiaries to purchase or
otherwise acquire for a consideration any shares of any class of the capital
stock, membership interests or any partnership interests of such Person
outstanding on or after the Effective Date (or any options or warrants issued by
such Person with respect to its capital stock, membership interests or
partnership interests). Without limiting the foregoing, "Distributions" with
respect to any Person shall also include all payments made or required to be
made by such Person with respect to any stock appreciation rights, plans, equity
incentive or achievement plans or any similar plans or setting aside of any
funds for the foregoing purposes.

            "Dollars" and "$" shall mean dollars in lawful currency of the
United States of America.


                                     - 6 -
<PAGE>

            "Effective Date" shall mean October 28, 1996, provided that on or
before such date (i) counterparts of this Agreement, the Revolving Note, and the
Security Documents shall have been executed and delivered by the parties hereto
and thereto and received by the Lender and (ii) the conditions precedent set
forth in Article IV hereof shall have been satisfied or waived in writing by the
Lender.

            "Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, directives,
claims, liens, notices of noncompliance or violation, investigations or
proceedings relating in any way to any Environmental Law or any permit issued,
or any approval given, under any such Environmental Law (hereafter, "Claims"),
including, without limitation, (a) any and all Claims by governmental or
regulatory authorities for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law and (b)
any and all Claims by any governmental agency seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief in connection
with alleged injury or threat of injury to health, safety or the environment due
to the presence of Hazardous Materials.

            "Environmental Law" shall mean any applicable Federal, state,
foreign or local statute, law, rule, regulation, ordinance, code, guideline,
written policy and rule of common law now or hereafter in effect and in each
case as amended and any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent decree or judgment,
relating to the environment, employee health and safety or Hazardous Materials,
including, without limitation, CERCLA; RCRA; the Federal Water Pollution 
Control Act, 33 U.S.C. Section 1251 et seq.; the Toxic Substances Control Act,
15 U.S.C. Section 2601 et seq.; the Clear Air Act, 42 U.S.C. Section 7401 et 
seq.; the Safe Drinking Water Act, 42 U.S.C. Section 3803 et seq.; the Oil 
Pollution Act of 1990, 33 U.S.C. Section 2701 et seq.; the Emergency Planning 
and the Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq.; 
the Hazardous Material Transportation Act, 49 U.S.C. Section 1801 et seq. and
the Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq. (to the 
extent it regulates occupational exposure to Hazardous Materials); and any 
state and local or foreign counterparts or equivalents, in each case as amended
from time to time.

            "ERISA" shall mean the Employee Retirement Income Security Act of
1974 and all rules and regulations promulgated pursuant thereto, as the same may
be amended or supplemented from time to time.

            "ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with the REIT, the Borrower or any of their respective
Subsidiaries would be deemed to be a "single employer" (i) within the meaning of
Section 414(b), (c), (m) or (o) of the Code or (ii) as a result of the REIT, the
Borrower or any of their respective Subsidiaries being or having been a general
partner of such person.

            "Event of Default" shall mean any of the events, acts or conditions
specified in Section 8.1 hereof.


                                     - 7 -
<PAGE>

            "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended (or any similar successor federal statute), and the rules and
regulations thereunder, as the same are in effect from time to time.

            "Existing Debt" shall have the meaning ascribed to such term in
Section 5.19 hereof.

            "Existing Properties" shall mean any one of the following properties
as a whole: Franklin Mills located in Philadelphia, Pennsylvania ("Franklin
Mills"), Gurnee Mills located in Gurnee, Illinois ("Gurnee Mills"), Ontario
Mills located in Ontario, California ("Ontario Mills"), Potomac Mills located in
Woodbridge, Virginia ("Potomac Mills"), Sawgrass Mills located in Sunrise,
Florida ("Sawgrass Mills") or any of the Community Centers.

            "Fees" shall mean the Structuring Advisory Fee, the Unused Line Fee
and, if applicable, the Renewal Fee.

            "Filing Entity" shall have the meaning ascribed to such term in
Section 6.1 hereof.

            "Franklin Bank" shall mean the Franklin National Bank of Washington,
D.C.

            "Future Properties" shall mean all real estate owned or leased by
any entity comprising the Company and any Affiliated Entity, excluding the
Existing Properties and the Company's office space occupied exclusively by the
Company.

            "Funds Available For Distribution" shall mean Funds From Operations
for each fiscal quarter as stated in the REIT's most recent quarterly 10-Q and
annual 10-K statements, plus (i) non-cash loan cost expenses and general
furniture, fixture and equipment expenses, plus (ii) land and other non-income
producing property sales not recognized as Funds From Operations, less (iii)
specialty store tenant improvements made to bring space to standard leasable
build-out and non-revenue enhancing capital expenditures, less (iv) straight
line minimum rent adjustments.

            "Funds From Operations" shall mean net income (or loss) (computed in
accordance with GAAP), excluding gains (or losses) from debt restructuring and
sales of property (other than undepreciated property incidental to the main
business of a real estate investment trust), plus depreciation and amortization
of real estate assets, and after adjustments for unconsolidated partnerships and
joint ventures.

            "GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time.


                                     - 8 -
<PAGE>

            "General Pledge and Security Agreement" shall mean a pledge and
security agreement, substantially in the form of EXHIBIT B-1 hereto, entered
into by the Borrower in favor of the Lender, as the same may be amended or
supplemented from time to time.

            "Governmental Authority" shall mean any nation or government, any
state or other political subdivision thereof and any agency, entity or officer
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to any government, and any corporation or other
entity owned or controlled by any of the foregoing.

            "Hazardous Materials" shall mean and include, without limitation,
gasoline, petroleum, petroleum products, explosives, radioactive materials,
radon, hazardous materials, hazardous wastes, hazardous or toxic substances,
polychlorinated biphenyls or related or similar materials, asbestos or any
material containing asbestos, or any other substance or material as may be
defined as a hazardous or toxic substance, or exposure to which is prohibited,
limited or regulated, by any Federal, state or local environmental law,
ordinance, rule or regulation.

            "Initial Borrowing Date" shall mean the date occurring on or after
the Effective Date on which the initial Borrowing of Revolving Loans occurs
pursuant to Section 2.1.

            "Initial Maturity Date" shall have the meaning ascribed to such term
in the definition of "Maturity Date" herein.

            "Initial Term" shall mean the period from and including the
Effective Date to and excluding the second anniversary of the Effective Date.

            "Intercompany Debt" shall mean, at any time, any Debt owed by any
Non-consolidated Subsidiary to any entity comprising the Company.

            "Intercompany Note" shall have the meaning ascribed to such term in
Section 7.7 hereof.

            "Intercompany Pledge and Security Agreement" shall mean a pledge and
security agreement, substantially in the form of EXHIBIT B-2 hereto, with
respect to any Intercompany Debt and entered into by each Credit Party in favor
of the Lender, as the same may be amended or supplemented from time to time.

            "Interest Period" shall mean the period comprising each calendar
month occurring prior to Maturity; provided, however, that:

            (i) an Interest Period shall be for a period shorter than a calendar
month if the Initial Borrowing Date occurs on a day other than the first day of
a calendar month, in which case it shall be for a period commencing on the
Initial Borrowing Date and ending on the last day of the calendar month in which
such Initial Borrowing Date occurs; and


                                     - 9 -
<PAGE>

            (ii) an Interest Period shall be for a period shorter than a
calendar month if the Maturity occurs on a day other than the last day of a
calendar month, in which case it shall be for a period commencing on the first
day of a calendar month (or, if applicable, the Initial Borrowing Date) and
ending on the Maturity.

            "Interest Rate Protection Agreement" shall mean any interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedging agreement, interest rate floor agreement or other similar
agreement or arrangement.

            "Investment" in any Person shall mean any loan, advance, or
extension of credit to or for the account of, any guaranty, endorsement,
including loans to employees, (other than for collection in the ordinary course
of business which are not overdue) or other direct or indirect contingent
liability in connection with the obligations, Capital Interests or dividends or
other distributions of, any ownership, purchase or acquisition of any assets,
business, Capital Interest, obligations or securities of, or any other interest
in or capital contribution to, such Person.

            "Lending Bank" shall mean any Bank assigned any portion of the
Lender's Revolving Loans and Commitment pursuant to Section 10.12 of this
Agreement.

            "LIBOR" shall mean the rate for the applicable Interest Period
published one (1) Business Day prior to the first day of such Interest Period in
the Wall Street Journal for notes maturing thirty (30) days after issuance under
the caption "Money Rates, London Interbank Offered Rates," (or, if no longer
published by The Wall Street Journal, then as published by any publication of
major circulation, or as disseminated by any major news service, in each case
such source being selected by the Lender in its sole discretion).

            "Lien" shall mean any mortgage, pledge, hypothecation, assignment,
lien (statutory or other), charge, deposit arrangement, encumbrance or security
interest of any nature or kind whatsoever, or the interest of a vendor or lessor
under any conditional sale agreement, capital lease, any financing or similar
statement or notice filed under the UCC or other title retention agreement.

            "Loan Documents" shall mean this Agreement and, after the execution
and delivery thereof pursuant to the terms of this Agreement, the Revolving
Note, the Pledge and Security Agreements and all other documents or certificates
executed and delivered in connection herewith and therewith.

            "Margin Stock" has the meaning specified in Regulation U.

            "Material Adverse Effect" shall mean, with respect to an event,
action or condition affecting any entity comprising the Company, its Affiliated
Entities or any of their respective properties or revenues, an event, action or
condition that would (i) materially and


                                     - 10 -
<PAGE>

adversely affect the validity or enforceability of, or the authority of any
entity comprising the Company to perform its respective obligations under, any
of the Loan Documents, or (ii) materially adversely affect the business,
operations, assets or condition (financial or otherwise) of the Company taken as
a whole or (iii) materially adversely affect the value of the Collateral.

            "Maturity" shall mean the date any Revolving Loan shall become due
and payable, whether on demand, at maturity, by acceleration, by notice of
intention to prepay or otherwise.

            "Maturity Date" shall mean the earlier of October 31, 1998 (the
"Initial Maturity Date") (or, if renewed pursuant to Section 2.1, the last day
of the Renewal Term) or the date on which the Revolving Loans shall, together
with all interest accrued thereon and all other amounts owed to the Lender, have
been repaid in full and the Commitment is terminated by the Lender in accordance
with the terms hereof or by the Borrower in accordance with Section 2.7 hereof.

            "Mills Properties" shall mean any one of the following
value-oriented super-regional malls as a whole: Franklin Mills, Gurnee Mills,
Ontario Mills, Potomac Mills and Sawgrass Mills, and any other value-oriented
super-regional malls owned from time to time by the Borrower or in which the
Borrower has a Capital Interest on or after the Effective Date.

            "Moody's" shall mean Moody's Investors Service, Inc.

            "Net Cash Proceeds" shall mean, with respect to any Asset Sale, the
Cash Proceeds resulting therefrom net of (x) cash expenses of sale paid to
unaffiliated third parties (including, without limitation, local transfer taxes,
brokerage and attorneys' fees, if any) and (y) payment of principal, premium and
interest on Debt (other than the Revolving Loans) repaid as a result of such
Asset Sale.

            "Non-consolidated Subsidiary" shall mean any corporation,
partnership, association, joint venture or any other entity affiliated with the
Borrower, or any Subsidiary of the Borrower, other than a Consolidated
Subsidiary.

            "Notice of Borrowing" shall have the meaning ascribed to such term
in Section 2.3 hereof.

            "Obligations" shall mean all debt, obligations and liabilities owing
to the Lender incurred under or related to this Agreement or any other Loan
Document, including, without limitation, interest, principal, premiums, fees,
expenses, indemnification, or otherwise whether such debt, obligations or
liabilities are direct or indirect, secured or unsecured, joint or several,
absolute or contingent, due or to become due, whether for payment or
performance, now existing or hereafter arising.


                                     - 11 -
<PAGE>

            "Other Hedging Agreement" shall mean any foreign exchange contracts,
currency swap agreements, commodity agreements or other similar agreements or
arrangement designed to protect against the fluctuations in currency values.

            "Partnership Agreement" shall mean each partnership agreement or
other document (including any formation agreement) creating the Borrower or any
of the Consolidated Subsidiaries, as the case may be.

            "Person" or "person" shall mean any individual, partnership, firm,
corporation, company, association, joint venture, trust or other entity, or any
Governmental Authority.

            "Pledge and Security Agreements" shall mean (i) the General Pledge
and Security Agreement and (ii) the Intercompany Pledge and Security Agreement.

            "Plan" shall mean, at any particular time, any employee benefit plan
as defined in Section 3(3) of ERISA and in respect of which the Borrower or any
ERISA Affiliate is an "employer" as defined in Section 3(5) of ERISA.

            "Prime Rate" shall mean 100 basis points in excess of the rate of
interest per annum as established by The Chase Manhattan Bank or its successor
(the "Reference Bank") in New York, New York from time to time as its prime or
base lending rate, and shall be effective on the day that the Reference Bank
establishes such change, which rate, the Borrower acknowledges, may or may not
be the Reference Bank's lowest rate. If the Reference Bank shall abolish or
abandon the practice of establishing its prime or base lending rate or if such
rate shall not be ascertainable, the Lender shall designate by notice to the
Borrower the floating commercial loan interest rate of Citibank, N.A. or its
successor established from time to time as its prime or base lending rate, to be
the Prime Rate hereunder.

            "Prohibited Transaction" shall have the meaning set forth in Section
406 of ERISA or Code Section 4975.

            "Property" shall mean in respect of any Person, all types of real,
personal or mixed property and all types of tangible or intangible property
owned or leased by such Person.

            "RCRA" shall mean the Resource Conservation and Recovery Act, as the
same may be amended from time to time, 42 U.S.C. ss. 6901 et seq.

            "Real Estate Assets" means the Existing Properties (including
without limitation the Mills Properties and the Community Centers) and the
Future Properties.

            "Recovery Event" shall mean the receipt by the REIT, the Borrower or
any of the Consolidated Subsidiaries of any cash insurance proceeds (other than
from business interruption insurance) or condemnation award payable (i) by
reason of theft, loss, physical destruction,


                                     - 12 -
<PAGE>

damage or taking or any other similar event with respect to any Real Estate
Asset or property or assets of the REIT, the Borrower or any of the Consolidated
Subsidiaries and (ii) under any policy of insurance required to be maintained
under Section 6.3.

            "Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.

            "Regulation G" shall mean Regulation G of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.

            "Regulation T" shall mean Regulation T of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.

            "Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.

            "Regulation X" shall mean Regulation X of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.

            "REIT" shall have the meaning ascribed to such term in the first
paragraph of this Agreement.

            "REIT Common Shares" shall mean the issued and outstanding shares of
Common Stock, par value $.01 per share, of the REIT.

            "Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing or
migration into the environment.

            "Renewal Fee" shall have the meaning ascribed to such term in
Section 2.6 hereof.

            "Renewal Election" shall have the meaning ascribed to such term in
Section 2.1 hereof.

            "Renewal Election Date" shall mean July 1, 1998.

            "Renewal Term" shall mean the one-year period commencing on the
second anniversary of the Effective Date.


                                     - 13 -
<PAGE>

            "Required Banks" shall mean Lending Banks whose portion in interest
of the Commitment or the outstanding Revolving Loans represent an amount greater
than 50% in interest of the Commitment or total outstanding Revolving Loans.

            "Requirement of Law" means as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and 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.

            "Revolving Loan" shall have the meaning ascribed to such term in
Section 2.1 hereof.

            "Revolving Note" shall mean the promissory note of the Borrower
payable to the Lender, substantially in the form of EXHIBIT A hereto, evidencing
the aggregate debt of the Borrower to the Lender resulting from the Revolving
Loans.

            "S&P" shall mean Standard & Poor's Ratings Group.

            "SEC" shall mean the Securities and Exchange Commission, or any
other federal agency at the time administering the Securities Act of 1933, as
amended.

            "Security Documents" shall mean the Pledge and Security Agreements.

            "Solvent" shall have the meaning ascribed to such term in Section
5.13 hereof.

            "Structuring Advisory Fee" shall mean a fee equal to 1.5% of the
Commitment payable by the Borrower to the Lender on or before the Effective
Date.

            "Subsidiary" or "Subsidiaries" shall mean, as to any Person, (i) any
corporation more than 50% of whose stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock of any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned by such Person and/or one
or more Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has more than a 50% equity interest at the time.

            "Subsidiary Partnership" shall have the meaning ascribed to such
term in the first paragraph of this Agreement.

            "Taxes" shall have the meaning ascribed to such term in Section 2.12
hereof.


                                     - 14 -
<PAGE>

            "Termination Date" shall mean the date on which the Commitment is
terminated pursuant to Section 2.1, 2.7, 2.8, 2.10 or 8.2 hereof or otherwise
hereunder.

            "UCC" shall mean, with respect to any jurisdiction, the Uniform
Commercial Code as then in effect in that jurisdiction. References to terms
defined in the UCC shall mean such terms in the UCC as in effect in the State of
New York.

            "Units" shall mean the partnership units in the Borrower.

            "Unmatured Default" shall mean any event or condition which, with
notice or the passage of time or both, would constitute an Event of Default.

            "Unused Line Fee" shall have the meaning ascribed to such term in
Section 2.6 hereof.

            "Value" shall mean (i) in the case of the Existing Properties (other
than Ontario Mills), the value equal to the sum of the (A) property operating
income (calculated substantially in accordance with Schedule 6.1) of the
Existing Properties for the most recent four calendar quarters less an imputed
management fee of 4.5% of annual minimum plus percentage rent (or such greater
actual fee pursuant to an agreement for a term exceeding six months or not
cancellable on less than or equal to 30 days' notice) less an imputed annual
capital expenditure and tenant improvement reserve of $.75 per square foot of
the gross leasable area of each such Existing Property divided by (B) a
capitalization rate of 9%; and (ii) in the case of the Future Properties, the
value of such Future Properties wholly owned or leased by any entity comprising
the Company shall equal such Future Property's development cost (as reasonably
approved by the Lender) and (iii) the value to the entities comprising the
Company of Future Properties wholly owned or leased by any Affiliated Entity and
Ontario Mills shall equal the equity contributed (whether classified as a
capital contribution or a loan) by such entities plus the Allocated Affiliate
Debt attributable to such Affiliated Entity.

            "WARN" shall mean the Worker Adjustment Retraining and Notification
Act as same may be amended or supplemented from time to time and all rules and
regulations promulgated pursuant thereto.

                                   ARTICLE II
                      LOANS; TERM OF COMMITMENT; EXPIRATION

            SECTION 2.1. The Revolving Loans; Term of Commitment. (a) The
Revolving Loans. Subject to the terms and conditions herein set forth, the
Lender agrees, at any time and from time to time on any Business Day on and
after the Effective Date and prior to the Maturity Date, to make a revolving
loan or revolving loans (each, a "Revolving Loan" and, collectively, the
"Revolving Loans") to the Borrower, which Revolving Loans (i) may be repaid and


                                     - 15 -
<PAGE>

reborrowed in accordance with the provisions hereof, and (ii) shall not exceed
at any time after giving effect thereto, that aggregate outstanding principal
amount which equals the Commitment at such time.

            (b) Expiration of Commitment. Subject to the other provisions of
this Section 2.1, the Commitment shall terminate automatically on the Maturity
Date, unless the Commitment has been previously terminated in accordance with
Sections 2.7, 2.8, 2.10 or 8.2 hereof or otherwise hereunder.

            (c) Renewal Terms. So long as there shall then exist no Unmatured
Default or Event of Default, the Borrower may elect to renew the Commitment (the
"Renewal Election") by giving to the Lender written notice on or before the
Renewal Election Date, which notice shall indicate that the Borrower elects to
have the Commitment renewed for the Renewal Term commencing upon the expiration
of the Initial Term, provided that on or before the Initial Maturity Date, the
Borrower pays the Renewal Fee to the Lender and that on the Initial Maturity
Date there shall exist no Unmatured Default or Event of Default.

            (d) Events of Default. Notwithstanding the foregoing provisions of
this Section 2.1, upon the occurrence of an Unmatured Default or an Event of
Default, the provisions of Article VIII hereof shall apply, and the Lender may
take any action permitted thereunder.

            (e) Survival, Release and Reinstatement of Obligations. (i) No event
shall release, terminate or limit the rights or remedies of the Lender or any
obligations of the Borrower or any other Person under this Agreement or any
other Loan Document, and such rights and remedies and such obligations shall
survive until the Borrower has fully paid and performed all of its respective
Obligations hereunder and thereunder in full.

            (ii) Upon termination or expiration of the Commitment and upon
payment of the Obligations, the obligations of the Borrower to the Lender,
except as otherwise provided herein, shall be deemed terminated; provided, that
all of the provisions of this Agreement and the other Loan Documents (other than
the obligation to advance any Revolving Loan) shall continue to be effective or
shall be reinstated (excluding the Unused Line Fee), as the case may be, if any
payment hereunder or in connection with any of the Loan Documents at any time is
rescinded or otherwise must be returned as a result of the bankruptcy,
insolvency or reorganization of the Borrower or otherwise, all as if such
payment had not been made. No termination or expiration of the Commitment shall
affect any obligations or liabilities of the Borrower to the Lender arising out
of acts, events or circumstances taken, occurring or existing prior to such
termination. Upon such payment in full of the Obligations, the Lender shall
cancel the Revolving Note and return same duly cancelled to the Borrower. The
provisions of Section 10.5 shall survive the termination of this Agreement.


                                     - 16 -
<PAGE>

            SECTION 2.2. Minimum Amount of each Borrowing. The aggregate
principal amount of each Borrowing of Revolving Loans shall not be less than
$2,000,000 and, if greater, shall be a whole multiple of $1,000,000.
Notwithstanding the foregoing, if at any time the unused portion of the
Commitment is less than $2,000,000, then the minimum aggregate amount of
Borrowing at such time shall be equal to the amount of such unused portion of
the Commitment.

            SECTION 2.3. Procedure for Borrowing. Each Revolving Loan shall be
made upon receipt by the Lender of an irrevocable written notice from the
Borrower (which notice must be received by the Lender prior to 1:00 P.M., New
York City time) at least five (5) Business Days prior to the requested borrowing
date. Each such notice (a "Notice of Borrowing") shall be substantially in the
form of EXHIBIT C hereto and shall specify in each case: (i) the amount to be
borrowed and (ii) the requested borrowing date, which shall be a Business Day.

            Subject to the other terms, provisions and conditions of this
Agreement, on the date requested in such notice, the Lender shall make available
to the Borrower, in immediately available funds, the proceeds of the requested
Revolving Loan.

            SECTION 2.4. Revolving Note. The Revolving Loans shall be evidenced
by the Revolving Note, dated the Effective Date, and representing the obligation
of the Borrower to pay, on the Maturity Date, the lesser of (i) the Commitment
or (ii) the aggregate principal amount of the Revolving Loans from time to time
outstanding from the Lender, together with interest thereon. The Lender is
hereby authorized to endorse the date and amount of each Revolving Loan, and
each payment or repayment of principal thereof on the schedule (including
additional pages thereto added by the Lender as required) annexed to and
constituting a part of each Revolving Note, which endorsement shall constitute
prima facia evidence of the accuracy of the information so endorsed, absent
manifest error, and the Lender hereby agrees to provide the Borrower, with a
copy of each endorsement; provided, that the failure of the Lender to insert any
such date or amount or other information on such schedule or the failure of the
Lender to provide the Borrower with a copy of any endorsement shall not in any
manner affect the obligation of the Borrower to repay the aggregate amount of
the Revolving Loans in accordance with the terms of this Agreement.

            SECTION 2.5. Interest.

            (a) Except to the extent otherwise prohibited by applicable law, the
Revolving Note until repaid in full shall bear interest on the aggregate
outstanding principal balance of the Revolving Loans at a rate per annum equal
to the sum of the Applicable Margin plus LIBOR. Such rate of interest shall be
computed on the basis of a 360-day year for the actual number of days elapsed.
Interest shall accrue during each Interest Period, from and including the first
day of such Interest Period to and including the last day of such Interest
Period. All accrued and unpaid interest under this Section 2.5 shall be payable
monthly, in arrears, on the first day of


                                     - 17 -
<PAGE>

the succeeding calendar month; provided, however, that upon the occurrence or
during the continuance of an Event of Default, the Borrower shall pay interest
on the aggregate principal balance of Revolving Loans, on demand, at a rate per
annum equal at all times to five percent (5%) per annum above the rate of
interest otherwise payable.

            (b) If at any time the Lender shall determine in good faith (which
determination shall be conclusive and binding upon the Borrower absent manifest
error) that (w) U.S. dollar deposits in an amount equal to the aggregate
principal balance of Revolving Loans are not generally available at such time in
the London interbank Eurodollar market, (x) reasonable means do not exist for
ascertaining LIBOR, (y) LIBOR plus the Applicable Margin on the aggregate
principal balance of Revolving Loans would be in excess of the maximum interest
rate which the Borrower may lawfully pay or (z) the Lender may not apply a
LIBOR-based rate of interest to the aggregate principal balance of Revolving
Loans, or fund any portion thereof bearing interest at LIBOR in the London
interbank Eurodollar market, in accordance with applicable laws, regulations and
legal requirements, then the Lender so long as such prohibition is in effect
shall notify the Borrower, and the aggregate principal balance of Revolving
Loans shall bear interest at the Prime Rate.

            (c) If due to any change of law, regulation or requirement the
Lender shall be legally prohibited from applying LIBOR plus the Applicable
Margin then in effect under the Revolving Note in accordance with applicable
laws, regulations and requirements, then the rate of interest based upon LIBOR
plus the Applicable Margin shall automatically be converted to the Prime Rate if
and for so long as such law, regulation or requirement is applicable, in which
event the Borrower shall, at its option, either commence and continue to pay the
Prime Rate or prepay the aggregate principal balance of Revolving Loans
including all interest accrued and unpaid thereon, all Breakage Costs (if any)
relating to or arising from such prepayment, in each case on the earlier of (x)
the last day of the Interest Period with respect thereto or (y) the date on
which it becomes unlawful for the Lender to charge a rate of interest based upon
LIBOR. The Borrower agrees to pay to the Lender, within five (5) days after
demand by the Lender, all costs and expenses incurred by the Lender as a result
of such change of law directly attributable to this Agreement or the Revolving
Note. This statement as to the amount of such Breakage Cost, or additional
interest, costs and expenses furnished to the Borrower by the Lender shall be
conclusive and binding upon the Borrower, absent manifest error.

            (d) The Borrower agrees that each good faith determination of the
Prime Rate shall be made by the Lender and shall be conclusive and binding upon
the Borrower absent manifest error. The Borrower further acknowledges that the
Prime Rate merely serves as a basis upon which effective rates of interest are
calculated for loans making reference thereto and that such Prime Rate may not
be the lowest or best rate at which interest is calculated or credit is
extended.

            SECTION 2.6. Fees. The Borrower shall pay to the Lender (i) an
unused line fee (the "Unused Line Fee") at the rate of .25% per annum, from and
after the Effective Date


                                     - 18 -
<PAGE>

through and including the date on which all of the Revolving Loans are repaid,
on the aggregate of the average daily unused portion of the Commitment (as same
may be reduced pursuant to the express terms hereof), such Unused Line Fee shall
be due and payable quarterly in arrears on the last Business Day of each March,
June, September and December and on the Maturity Date or such earlier date upon
which the Commitment is terminated, and (ii) in the event that the Borrower
elects to renew the Commitment pursuant to Section 2.1(c) hereof, a renewal fee
(the "Renewal Fee") equal to 0.50% per annum of the Commitment, such Renewal Fee
to be paid to the Lender on or before the Initial Maturity Date.

            SECTION 2.7. Reduction of Commitment; Voluntary Termination of
Unutilized Commitment. (a) The Borrower shall have the right at any time from
time to time, upon at least three (3) Business Days' prior written notice to the
Lender, without premium or penalty, to terminate in whole or permanently reduce
ratably in part the unused portions of the Commitment; provided, that each
partial reduction shall be in the aggregate amount of not less than $1,000,000
or an integral multiple of $1,000,000 in excess thereof.

            SECTION 2.8. Payments; Termination of Commitment. (a) All payments
required to be made to the Lender hereunder shall be made, without set-off or
counterclaim, not later than 11:00 a.m., prevailing New York City time, on the
date due, in same day or immediately available Dollars, to such account as the
Lender shall specify from time to time by notice to the respective Borrower.
Funds received after that time shall be deemed to have been received by the
Lender on the following Business Day.

            (b) Unless earlier paid in accordance with the terms of this
Agreement, the Borrower shall repay to the Lender the entire unpaid principal
amount of the Revolving Loans together with all accrued but unpaid interest to
such date on Maturity and all other amounts to the Lender hereunder or under any
other Loan Document, and the Commitment shall terminate in its entirety on such
date.

            (c) If any payment under this Article II becomes due and payable on
a day which is not a Business Day, the payment thereof shall be extended to the
next succeeding Business Day.

            SECTION 2.9. Use of Proceeds. The proceeds of the Revolving Loans
shall, unless otherwise agreed in writing by the Lender and the Borrower, be
used by the Borrower (i) to repay any Existing Debt of the Company approved by
the Lender, (ii) to develop and make improvements to the Mills Properties and
(iii) for general working capital purposes.

            SECTION 2.10. Illegality. In the event that the Lender shall have
determined in good faith that the adoption of any applicable law, rule or
regulation, or any change therein, or any change in the interpretation or
administration thereof by any central bank or Governmental Authority charged
with the interpretation or administration thereof, or compliance by the Lender
with any request or directive of any such central bank or Governmental Authority


                                     - 19 -
<PAGE>

shall make it unlawful for the Lender to make, maintain or fund all or any of
the Revolving Loans, the Lender shall so notify the Borrower. Upon the giving of
any such notice to the Borrower, (i) the Commitment shall be terminated as to
the portion of the Revolving Loans which are unlawful and (ii) the Borrower
shall prepay in full such portion of the Revolving Loans, together with accrued
interest thereon any other amounts which may be due to the Lender under this
Agreement on or before ten (10) Business Days following such notice to the
Borrower unless the law, rule or regulation, as the case may be, making such
Revolving Loans unlawful shall be rescinded, modified or amended thereby making
such Revolving Loans lawful prior to the expiration of such period.

            SECTION 2.11. Requirements of Law. (a) In the event that any change
in any Requirement of Law or in the interpretation or application thereof or
compliance by the Lender with any request or directive from any central bank or
other Governmental Authority issued or effective after the date hereof:

            (i) does or shall subject the Lender to any Taxes (as hereinafter
            defined) of any kind whatsoever with respect to this Agreement, the
            Revolving Note or any other Loan Document, or changes the basis of
            taxation of payments to the Lender of principal, the Fees, interest
            or any other amount payable hereunder (except for changes in the
            rate of tax on the overall gross or net income of the Lender (or
            franchise tax in lieu thereof));

            (ii) does or shall impose, modify or hold applicable any reserve,
            special deposit, compulsory loan or similar requirement against
            assets held by, or deposits or other liabilities in or for the
            account of, advances or loans by, or other credit extended by, or
            any other acquisition of funds by, any office of the Lender; or

            (iii) does or shall impose on the Lender any other material and
            adverse condition;

and the result of any of the foregoing is to increase the cost to the Lender, by
any amount which the Lender reasonably deems to be material, of making, renewing
or maintaining advances or extensions of credit or to reduce any amount
receivable hereunder, in each case, in respect of all or any of the Revolving
Loans, then, in any such case, the Borrower shall (x) promptly pay the Lender
without duplication, upon its demand, any additional amounts necessary to
compensate the Lender for such additional cost or reduced amount receivable or
(y) within ten (10) Business Days after notice from the Lender of such increased
costs, repay the principal amount of Revolving Loans outstanding as of the date
of such repayment together with all interest accrued thereon, Fees and any other
amounts owing hereunder or under any other Loan Document. If the Lender becomes
entitled to claim any additional amounts pursuant to this Section 2.11, the
Lender shall notify the Borrower of the event by reason of which it has become
so entitled. A certificate as to any additional amounts payable pursuant to the
foregoing


                                     - 20 -
<PAGE>

sentence submitted by the Lender to the Borrower shall be conclusive in the
absence of manifest error.

            (b) In the event that the Lender shall have determined in good faith
that the adoption of any law, rule, regulation or guideline regarding capital
adequacy, or any change therein or in the interpretation or application thereof
or compliance by the Lender or any corporation controlling the Lender with any
request or directive regarding capital adequacy (whether or not having the force
of law) from any central bank or Governmental Authority issued or effective
after the date hereof, including, without limitation, the issuance of any final
rule, regulation or guideline, does or shall have the effect of reducing the
rate of return on the Lender's or such corporation's capital as a consequence of
its obligations hereunder to a level below that which the Lender or such
corporation could have achieved but for such adoption, change or compliance
(taking into consideration the Lender's or such corporation's policies with
respect to capital adequacy) by an amount deemed by the Lender to be material,
then from time to time, after submission by the Lender to the Borrower of a
written request therefor, the Borrower shall (x) pay to the Lender without
duplication such additional amount or amounts as will compensate the Lender or
such corporation for such reduction or (y) within ten (10) Business Days after
notice from the Lender of such increased costs, repay the principal amount of
the Revolving Loans outstanding as of the date of such repayment together with
all interest accrued thereon, Fees and any other amounts owing hereunder or
under any other Loan Document. The provision of this Section 2.11 shall survive
the termination of this Agreement and the Commitment.

            SECTION 2.12. Taxes. (a) All payments made by the Borrower under
this Agreement and the Revolving Note shall be made free and clear of, and
without deduction or withholding for or on account of, any present or future
income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions
or withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any Governmental Authority, excluding gross or net income taxes (and
franchise taxes or other taxes imposed in lieu of net income taxes) imposed on
the Lender as a result of a present, former or future connection between the
jurisdiction of the government or taxing authority imposing such tax and the
Lender or any political subdivision or taxing authority thereof or therein (all
such non-excluded taxes, levies, imposts, duties, charges, fees, deductions and
withholdings being hereinafter called "Taxes"). If any Taxes are required to be
withheld by the Borrower from any amounts payable to the Lender hereunder, under
the Revolving Note or any other Loan Document, the amounts so payable to the
Lender shall be increased to the extent necessary to yield to the Lender (after
payment of all such Taxes) the full amount due hereunder together with interest
and any other amounts payable hereunder at the rates or in the amounts specified
in this Agreement, the Revolving Note or any other Loan Document. The Borrower
shall pay all Taxes required to be paid by it and whenever any such Taxes are
payable as promptly as possible and thereafter the Borrower shall send to the
Lender for its own account a certified copy of an original official receipt
received by the Borrower showing payment thereof. If the Borrower fails to pay
any Taxes when due to the appropriate taxing authority or fail to remit to the
Lender the required receipts or other required


                                     - 21 -
<PAGE>

documentary evidence, the Borrower shall indemnify the Lender for any
incremental taxes, interest or penalties that may become payable by the Lender
as a result of any such failure. At the request of the Borrower and solely at
the Borrower's expense, the Lender shall use reasonable efforts to contest the
payment of such Taxes that the Borrower believes were not correctly or legally
asserted. If the Lender receives a refund in respect of any Taxes for which the
Borrower has made payment hereunder, the Lender shall repay such refund to the
Borrower. The agreements in this Section 2.12 shall survive the termination of
this Agreement and the repayment of the Revolving Note.

            (b) In the event that the Borrower has actual knowledge that it is
required to, or there arises in the Borrower's reasonable opinion a substantial
likelihood that the Borrower will be required to, pay an increased amount or
otherwise indemnify the Lender for or on account of any withholding of United
States Federal income tax pursuant to Section 2.12(a) above, the Borrower will
promptly notify the Lender of the nature of such withholding, and shall furnish
such information to the Lender, with respect to such withholding as the Lender
may reasonably request. In the event of any knowledge or opinion of the Borrower
described in the preceding sentence, the Borrower and the Lender shall consult
in good faith to determine what may be required to avoid or reduce the
withholding tax, and shall each use reasonable efforts to avoid or reduce such
withholding tax.

                                   ARTICLE III
                             PREPAYMENTS; REPAYMENTS

            SECTION 3.1. Voluntary Prepayments. The Borrower shall have the
right, upon at least three (3) Business Days' prior written notice to the
Lender, to prepay the Revolving Loans made to it, without premium or penalty, in
whole or in part at any time and from time to time; provided that each
prepayment shall be in an aggregate amount of not less than $2,000,000, unless
the aggregate outstanding principal balance of the Revolving Loans is less than
$2,000,000. Notwithstanding anything contained herein to the contrary, in the
event of any prepayment or other payment of the principal amount of the
Revolving Loans in any manner other than upon the expiration of an Interest
Period, the Borrower shall pay to the Lender (i) accrued interest to the date of
such prepayment or payment, as the case may be, on the portion of the principal
balance of the Revolving Loans being prepaid or paid and (ii) any and all costs
incurred by the Lender in connection with such prepayment or payment, as the
case may be, including, but not limited to, the Breakage Costs (if applicable).

            SECTION 3.2. Mandatory Repayments and Commitment Reductions. (a) On
any day on which the aggregate outstanding principal amount of Revolving Loans
exceeds the Commitment as then in effect, the Borrower shall repay the principal
of Revolving Loans in an aggregate amount equal to such excess.


                                     - 22 -
<PAGE>

            (b) On each date on and after the Effective Date upon which any
entity comprising the Company receives or is entitled to receive its
proportionate share of any proceeds from the refinancing by any entity
comprising the Company or any Affiliated Entity of any of the Real Estate
Assets, the Borrower shall repay (i) the principal of outstanding Revolving
Loans and/or (ii) any Debt secured by any of the Existing Properties in an
amount equal to 100% of the cash proceeds of such refinancing which such entity
receives or (if such funds are available) is entitled to receive after the
repayment of any Debt secured by such Real Estate Asset (net of financing fees
and other reasonable out-of-pocket costs paid to unaffiliated third parties
associated therewith), and the Commitment shall be reduced dollar-for-dollar by
the amount of any repayment required to be made pursuant to clause (i) of this
subparagraph. Notwithstanding the foregoing: (1) the owner of Ontario Mills may
return to the Borrower up to $5,000,000 of its proportionate share of any
proceeds from the next refinancing of any Debt secured by Ontario Mills and the
Borrower shall have no obligation to apply such proceeds to the repayment of
principal of outstanding Revolving Loans; and (2) the owner of Franklin Mills
may return to the Borrower or any other entity comprising the Company an amount
equal to such entity's proportionate share of any proceeds from the refinancing
of any Debt secured by Franklin Mills but not exceeding the amount, if any,
contributed as capital by such entity to the owner of Franklin Mills to reduce
the Existing Debt secured by Franklin Mills, it being agreed that in order to
obtain the benefit of this clause (2) such capital shall be derived solely from
the proceeds of the issuance of Capital Interests by either the Borrower and/or
the REIT.

            (c) On each date on and after the Effective Date upon which any
entity comprising the Company receives or (if such funds are available) is
entitled to receive Cash Proceeds from any Asset Sale of or relating to an
Existing Property (other than a sale of (x) peripheral vacant land pads or (y)
one anchor store pad per annum or up to three (3) anchor pads at Ontario Mills,
provided that the proceeds of such Ontario Mills anchor pads are applied to the
cost of Capital Expenditures at Ontario Mills or to repay Debt secured by
Ontario Mills), the Borrower shall repay (i) the principal of outstanding
Revolving Loans and/or (ii) any Debt secured by any of the Existing Properties
in an amount equal to 100% of the Net Cash Proceeds, and the Commitment shall be
reduced dollar-for-dollar by the amount of any repayment required to be made
pursuant to clause (i) of this subparagraph.

            (d) Within 15 days following each date on and after the Effective
Date upon which any entity comprising the Company receives or (if such funds are
available) is entitled to receive any proceeds from any Recovery Event, the
Borrower shall repay (i) the principal of the outstanding Revolving Loans and/or
(ii) any Debt secured by any of the Existing Properties in an amount equal to
100% of the remaining proceeds of such Recovery Event after being applied in
accordance with the terms of any mortgage, deed of trust or other security
instrument, held by a non-Affiliate of any entity comprising the Company,
securing the Debt on the applicable Real Estate Asset (net of costs of
collection incurred in connection with such Recovery Event and, so long as no
Unmatured Default or Event of Default then exists, to any repair and restoration
costs), and the Commitment shall be reduced dollar-for-dollar by the amount of
any repayment required to be made pursuant to clause (i) of this subparagraph.


                                     - 23 -
<PAGE>

                                   ARTICLE IV
                              CONDITIONS OF LENDING

            SECTION 4.1. Conditions Precedent to Making Initial Revolving Loans.
(a) The obligation of the Lender to make Revolving Loans on the Initial
Borrowing Date is subject to the condition precedent that the Lender shall have
received (unless otherwise specifically agreed in writing) on or before the
Initial Borrowing Date the following, each dated such day (unless otherwise
indicated), in form and substance satisfactory to the Lender:

            (i) The Revolving Note executed by the Borrower to the order of the
Lender;

            (ii) A copy of each of the Partnership Agreements governing the
Borrower and each Subsidiary Partnership, including all amendments thereto,
certified by a general partner of the Borrower and of each Subsidiary
Partnership, as the case may be, as of a date within fifteen (15) days of the
Effective Date;

            (iii) A copy of the certificate or articles of incorporation and the
by-laws of each general partner of the Borrower and of each Subsidiary
Partnership, each document certified as of a date within fifteen (15) days prior
to the Effective Date by the Secretary of State of the jurisdiction of
incorporation of each such general partner, together with (1) certificates of
such official attesting to the good standing of each such general partner and
(2) certified copies of the resolutions of the board of directors of each such
general partner approving this Agreement, the other Loan Documents and all
documents evidencing other necessary partnership or corporate action and
governmental approvals, if any, with respect to this Agreement and the other
Loan Documents.

            (iv) Certificates signed on behalf of the Borrower and each
Subsidiary Partnership, as the case may be, by its respective general partner,
dated the Initial Borrowing Date (the statements made in such certificate shall
be true, to the certifying officer's knowledge, on and as of the Initial
Borrowing Date), certifying as to (1) the absence of any amendments to the
Partnership Agreement of the Borrower or of any Subsidiary Partnership since the
Effective Date, (2) a certificate of such partnerships as partnerships organized
under the laws of the jurisdiction of their respective organization, and the
absence of any proceeding for the liquidation of the Borrower or any Subsidiary
Partnership, (3) the truth of the representations and warranties contained in
the Loan Documents as though made on and as of the Initial Borrowing Date and
(4) the absence of any event occurring and continuing, or resulting from the
initial Borrowing, that constitutes an Event of Default;

            (v) The Pledge and Security Agreements dated the Effective Date,
duly executed and, if requested, acknowledged, and in each case in form and
substance satisfactory to the Lender, together with, in the case of the General
Pledge and Security Agreement, (if the partnership interests therein are
evidenced by certificates) certificates evidencing the Borrower's


                                     - 24 -
<PAGE>

partnership interest in each Subsidiary Partnership, which certificates shall be
accompanied by undated powers duly executed in blank and in any event undated
assignments of such partnership interests duly executed in blank for use solely
upon the due exercise of the Lender's remedies thereunder, and, in the case of
the Intercompany Pledge and Security Agreement, the Intercompany Notes
applicable thereto, if any, and each Pledge and Security Agreement shall be in
full force and effect;

            (vi) UCC Financing Statements in respect of the Collateral duly
filed in each jurisdiction as may be necessary or, in the opinion of the Lender,
desirable to perfect the security interests intended to be created by the Pledge
and Security Agreements in the Borrower's limited partnership interest in each
Subsidiary Partnership, all Intercompany Debt and the other Collateral
thereunder required by the Lender;

            (vii) Certificates of the Secretary or an Assistant Secretary of the
REIT certifying the names and true signatures of the officers of the REIT
authorized to execute the Loan Documents and the other documents to be delivered
hereunder;

            (viii) All other corporate and partnership documents, instruments
and agreements in connection with the transactions contemplated by this
Agreement and the other Loan Documents reasonably satisfactory in form and
substance to the Lender, and the Lender shall have received all information and
copies of all documents and papers, including records of corporate proceedings,
governmental approvals, good standing certificates and bring-down telegrams, if
any, which the Lender reasonably may have requested in connection therewith,
such documents and papers where appropriate to be certified by proper corporate,
partnership or governmental authorities;

            (ix) An opinion of Rudnick & Wolfe, counsel to the Borrower,
substantially in the form of EXHIBIT D hereto and as to such other matters as
the Lender may reasonably request;

            (x) Certificates of insurance complying with the requirements of
Section 6.3, for the business and properties of each entity comprising the
Company, and in scope, form and substance satisfactory to the Lender, including
by naming the Lender as an additional insured and/or loss payee, as the case may
be, and stating that such insurance shall not be cancelled or revised without at
least thirty (30) days' prior written notice by the respective insurer to the
Lender; and

            (xi) Payment by the Borrower of (i) the Structuring Advisory Fee to
the Lender and (ii) the fees and disbursements owed by the Lender to the
Lender's counsel in connection with the preparation, negotiation and execution
of this Agreement and the other Loan Documents, the review of all materials and
documents pertaining hereto and the perfection of all security interests of the
Lender in the Collateral and all other out-of-pocket expenses of the Lender.


                                     - 25 -
<PAGE>

            SECTION 4.2. Conditions Precedent to Each Loan. (a) The obligation
of the Lender to make any Borrowing (including the initial Borrowing) shall be
subject to the further conditions precedent that on the date of each such
Borrowing (x) the following statements shall be true and (y) the Lender shall
have received a certificate signed by an Authorized Representative of the
Borrower, dated the date of such Borrowing, stating that:

            (i) The representations and warranties contained in Article V are
true and correct in all material respects on and as of the date of such
Borrowing, before and after giving effect to such Borrowing and to the
application of the proceeds therefrom, as though made on and as of such date;
and

            (ii) To the best of the Borrower's knowledge, no event has occurred
and is continuing, or would result from such Borrowing or from the application
of the proceeds therefrom, which constitutes an Event of Default or would
constitute an Event of Default but for the requirement that notice be given or
time elapsed or both.

            (b) The Initial Borrowing Date shall have occurred.

            (c) The Lender has received such other approvals, opinions,
appraisals or documents as the Lender may reasonably request.

            (d) Each of the giving of the applicable Notice of Borrowing and the
acceptance by the Borrower of the proceeds of any Borrowing shall constitute a
representation and warranty by the Borrower that on the date of such Borrowing
the statements set forth in paragraphs (i) and (ii) above are true.

                                    ARTICLE V
                         REPRESENTATIONS AND WARRANTIES

            In order to induce the Lender to enter into this Agreement and the
other Loan Documents and to make the Revolving Loans, each of the REIT, the
Borrower and each Subsidiary Partnership makes the following representations,
warranties and agreements, all of which shall survive the execution and delivery
of this Agreement and the Revolving Note and the making of the Revolving Loans,
with the occurrence of the Effective Date and the incurrence of each Revolving
Loan on or after the Effective Date being deemed to constitute in all material
respects a representation and warranty that the matters specified in this
Article V are true and correct in all material respects on and as of the
Effective Date and on the date of each such Revolving Loan (it being understood
and agreed that any representation or warranty which by its terms is made as of
a specified date shall be required to be true and correct in all material
respects only as of such specified date).


                                     - 26 -
<PAGE>

            SECTION 5.1. Status and Standing. (a) Each of the REIT, the Borrower
and each Subsidiary Partnership (i) is a duly formed and validly existing
corporation or limited partnership, as the case may be, in good standing under
the laws of the jurisdiction of its formation and (ii) is duly qualified and is
authorized to do business and is in good standing in each jurisdiction where the
ownership, leasing or operation of its property or the conduct of its business
requires such qualification;

            (b) Schedule 5.1(b) to this Agreement states (i) the name of each
Subsidiary Partnership, its jurisdiction of formation and the percentage of its
partnership interests and other Capital Interests owned therein by the Borrower
and each other Subsidiary Partnership, and (ii) the name of each of the
Borrower's Affiliated Entities (other than its Subsidiaries) and the nature of
the affiliation. Each of such Subsidiary Partnership is a duly formed and
validly existing limited partnership or other entity and in good standing under
the laws of its jurisdiction of organization, and is duly licensed and qualified
and in good standing in each jurisdiction where the failure to be duly formed
and to qualify as such would have a Material Adverse Effect. The Borrower has
good title to all of the partnership interests or other Capital Interests it
purports to own of each Subsidiary Partnership, free and clear in each case of
any Lien or other adverse interest or claim; and

            (c) Each of the entities comprising the Company has the corporate,
partnership or company power, authority and legal right to own, or lease and
enjoy undisturbed, the assets of its business and engage in its business as now
conducted and presently proposes to conduct.

            SECTION 5.2. Power and Authority. The Borrower has the partnership
power, authority and legal right to enter into and execute, deliver, carry out
the terms of, and perform this Agreement, the Revolving Note, to make the
Borrowings, and each of the other entities comprising the Company has the
corporate, partnership or company power, authority and legal right to execute,
deliver and carry out the terms of the Loan Documents to which it is a party,
and to incur the obligations provided for herein and therein, all of which have
been duly authorized by all proper and necessary corporate, partnership or
company action and are in full compliance with their respective organizational
documents. No consent or approval of, or other action by, any partners, any
Governmental Authority or any other Person, which has not already been obtained,
is required to authorize, or is required in connection with the execution,
delivery and performance of, this Agreement, the Revolving Note or any of the
other Loan Documents, or is required as a condition to the validity or
enforceability of this Agreement, the Revolving Note or any of the other Loan
Documents and any other document entered into or furnished pursuant hereto.

            SECTION 5.3. Enforceable Obligations. Each Loan Document to which it
is a party, and each other agreement or undertaking executed by each entity
comprising the Company and delivered to the Lender pursuant to Section 4.1 and
4.2 hereof, constitutes the legal, valid and binding obligation of each such
entity, enforceable against such entity in accordance with its respective terms,
except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws generally affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law) and there are
no actions, suits or proceedings pending or, to the


                                     - 27 -
<PAGE>

knowledge of such entity, threatened against, or affecting, such entity or any
of its respective officers calling into question the legality, validity or
enforceability of any thereof.

            SECTION 5.4. No Violation of Agreements; Compliance with Law. No
entity comprising the Company is in default under any loan agreement, indenture,
mortgage, mortgage deed, deed of trust, agreement or other instrument to which
it is a party or by which it or any of its properties may be bound, which
default would constitute a Material Adverse Effect. Neither the execution and
delivery of the Loan Documents nor any of the instruments and documents to be
delivered by any entity comprising the Company pursuant to this Agreement or the
other Loan Documents, nor the consummation of the transactions herein and
therein contemplated, nor compliance with the provisions hereof or thereof will,
to the best of the Borrower's knowledge, violate any law or regulation, or any
order or decree of any court or governmental instrumentality, or will, to the
best of the Borrower's knowledge, conflict with, or result in the breach of, or
constitute a default under, any indenture, mortgage, mortgage deed, deed of
trust, agreement or other instrument to which such entity is a party or by which
any such entity may be bound, or result in the creation or imposition of any
Lien upon any of the properties thereof in violation of this Agreement, or
violate any provision of the formation documents of, or any provisions relating
to Capital Interests in, any entity comprising the Company, which violation,
conflict, breach, default, creation or imposition would result in a Material
Adverse Effect.

            SECTION 5.5. No Litigation. There are no actions, suits or
proceedings pending or threatened against or affecting any entity comprising the
Company or any of its respective officers or directors before any court,
arbitrator or governmental or administrative body or agency that, if adversely
determined, might reasonably have a Material Adverse Effect. No injunction,
writ, restraining order or other order of any nature adverse to any entity
comprising the Company or the conduct of its business or inconsistent with the
due consummation of such transactions has been issued by any Governmental
Authority which if issued would constitute a Material Adverse Effect with
respect to such entity. To the best of the Borrower's knowledge, no entity
comprising the Company is in default under any applicable statute, rule, order,
decree or regulation of any court, arbitrator or governmental or administrative
body or agency having jurisdiction over such entity, which default would
constitute a Material Adverse Effect in respect of such entity.

            SECTION 5.6. Taxes and Claims. Each entity comprising the Company
and each Affiliated Entity has filed or caused to be filed all federal, state
and local tax returns and reports that are required to be filed and has paid or
discharged or caused to be paid or discharged all taxes shown to be due and
payable on said returns or on any assessments made against it or any Affiliated
Entity or against any of its or any Affiliated Entity's income, profits or
property and all other taxes, fees or charges imposed on it or any Affiliated
Entity or any of its or any Affiliated Entity's income, profits and property by
any Governmental Authority (other than those the amount or validity of which are
currently being contested diligently in good faith by appropriate proceedings
(except in cases in which there is an unsecured risk of forfeiture of any of the
Real Estate Assets) and in respect of which adequate reserves in conformity with
GAAP have been provided on the books of each entity comprising the Company); and
no tax Liens have been filed and no claims are being asserted with respect to
any such taxes, fees or


                                     - 28 -
<PAGE>

other charges. Each entity comprising the Company has paid and discharged all
lawful claims for labor, material, supplies and anything else that might or
could, if unpaid, become a Lien on any of its or any Affiliated Entity's
properties (other than those the amount or validity of which are currently being
contested diligently in good faith by appropriate proceedings (except in cases
in which there is an unsecured risk of forfeiture of any of the Real Estate
Assets) and in respect of which adequate reserves in conformity with GAAP have
been provided on the books of each entity comprising the Company).

            SECTION 5.7. Employee Benefit Plans. (a) None of the Plans
maintained by any entity comprising the Company, any Affiliated Entity or any
ERISA Affiliate at any time or the trusts created thereunder has engaged in a
Prohibited Transaction that could subject any such Plan or trust to a material
tax or penalty on Prohibited Transactions imposed under Code Section 4975 or
ERISA Sections 502(i) or 502(1);

            (b) The consummation of the transactions contemplated by this
Agreement does not involve any Prohibited Transaction which could subject any
entity comprising the Company, any Affiliated Entity or any ERISA Affiliate to
any material liability, tax or penalty imposed under Code Section 4975 or ERISA
Sections 502(i) or 502(1);

            (c) No entity comprising the Company or any Affiliated Entity or
ERISA Affiliate contributes to or maintains, or has since 1974 contributed or
maintained, any employee pension benefit plan within the meaning of Section 3(2)
of ERISA, including any employee pension benefit plan subject to Title IV of
ERISA or subject to the funding requirements of Section 412 of the Code;

            (d) All Plans of any entity comprising the Company, any Affiliated
Entity and any ERISA Affiliate have at all times been operated and maintained in
compliance with ERISA and the applicable provisions of the Code (including, but
not limited to, Code Section 105). All Plans of any entity comprising the
Company, any Affiliated Entity and each ERISA Affiliate have complied with, and
are in compliance with, Code Section 4980B and Treasury Regulations (whether
proposed or final) relating thereto. No Plan of any entity comprising the
Company, any Affiliated Entity or any ERISA Affiliate provides benefits to
retired employees of such entity or such ERISA Affiliate, except to the extent
required under Code Section 4980B and Treasury Regulations (whether proposed or
final) relating thereto;

            (e) To the best of the Borrower's knowledge, no entity comprising
the Company or any Affiliated Entity or ERISA Affiliate has individually or in
the aggregate taken actions or undergone events which would cause liability to
arise under WARN or regulations issued thereunder, or any applicable state law
regarding employee terminations, mass layoffs or plant closings, and no entity
comprising the Company or any Affiliated Entity or ERISA Affiliate is aware of
the existence of any such actions or events; and

            (f) Each entity comprising the Company and each Affiliated Entity
and ERISA Affiliate have made all contributions required to be made under each
Plan as of the date of this Agreement.


                                     - 29 -
<PAGE>

            SECTION 5.8. No Event of Default. To the best of the Borrower's
knowledge, no Event of Default has occurred and is continuing and no condition
which with notice or lapse of time, or both, would constitute an Unmatured
Default or an Event of Default has occurred and is continuing.

            SECTION 5.9. Financial Statements. (a) The Borrower has heretofore
furnished to the Lender the consolidated financial statements of the Borrower
for and as of the year ended December 31, 1995, as examined and reported on by a
firm of independent certified public accountants of recognized national standing
reasonably acceptable to the Lender, and the consolidated financial statements
of the Borrower for and as of the end of the six month period ending June 30,
1996, as certified by the chief financial officer of the Borrower. Such
financial statements (in the case of the statements as of June 30, 1996,
including the notes thereto) present fairly, in all material respects, the
financial condition of the Borrower as of the end of such fiscal year and as of
the end of such period and the results of their operations and the cash flows
for the fiscal year and months then ended, all in conformity with GAAP applied
on a basis consistent with that of the preceding fiscal year. Since June 30,
1996, there has been no change having a Material Adverse Effect on the
condition, financial or otherwise, of the Borrower thereof.

            (b) All financial statements concerning the Borrower which will
hereafter be furnished by the Borrower to the Lender pursuant to this Agreement,
will be prepared in accordance with GAAP consistently applied throughout the
periods involved (except as disclosed therein and, in the case of interim
financial statements, non-material recurring year-end audit adjustments and the
absence of footnotes) and will present fairly the financial condition of the
corporations or partnerships covered thereby as at the dates thereof and the
results of their operations for the periods then ended. Except to the extent
reflected or reserved against in such financial statements, neither the Borrower
nor any of its Subsidiaries will have any material liabilities or obligations of
any nature, whether due or to become due, of a type that would be required in
accordance with GAAP to be reflected or reserved against in such financial
statements.

            SECTION 5.10. Environmental Laws, Etc. (a) Each entity comprising
the Company and, to the best of its knowledge, each Affiliated Entity is in
compliance with all applicable Environmental Laws and the requirements of any
permits issued under such Environmental Laws. There are no pending or threatened
Environmental Claims against any entity comprising the Company or, to the best
of its knowledge, any Affiliated Entity or any of the Real Estate Assets owned
or operated by any such Person. There are no facts, circumstances, conditions or
occurrences on any of the Real Estate Assets owned or operated by any entity
comprising the Company or, to the best of its knowledge, any Affiliated Entity
that could reasonably be expected (i) to form the basis of an Environmental
Claim against any entity comprising the Company or, to the best of its
knowledge, any Affiliated Entity or any such Real Estate Asset or (ii) to cause
any such Real Estate Asset to be subject to any restrictions on the ownership,
occupancy, use or transferability of such Real Estate Asset by any entity
comprising the Company, or to the best of its knowledge, or any Affiliated
Entity under any applicable Environmental Law.


                                     - 30 -
<PAGE>

            (b) Hazardous Materials have not at any time been generated, used,
treated or stored on, or transported to or from, any of the Real Estate Assets
owned or operated by any entity comprising the Company or, to the best of its
knowledge, any Affiliated Entity where such generation, use, treatment or
storage has violated any Environmental Law unless appropriate remediation
thereof has been or is being undertaken. Hazardous Materials have not at any
time been Released on or from any of the Real Estate Assets owned or operated by
any entity comprising the Company or, to the best of its knowledge, any
Affiliated Entity where such Release has violated any applicable Environmental
Law unless appropriate remediation thereof has been or is being undertaken. To
the best of the knowledge of each entity comprising the Company, there are no
underground storage tanks or surface impoundments located on, under or within
any of the Real Estate Assets that are not in compliance with all Environmental
Laws.

            SECTION 5.11. No Adverse Conditions. Neither the business of any
entity comprising the Company or, to the best of its knowledge, any Affiliated
Entity nor any Real Estate Asset are affected by any fire, explosion, accident,
eminent domain, strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other casualty (which
is not covered by insurance or in the process of repair) which has resulted in
or may reasonably be expected to result in a Material Adverse Effect.

            SECTION 5.12. Solvency. The Borrower on a consolidated basis is and
after the consummation of the transactions contemplated by the Loan Documents
and receipt and application by the Borrower of its Borrowings in accordance with
the terms of this Agreement will be, Solvent. For the purposes of this Agreement
"Solvent" shall mean, with respect to any Person, that the value of the assets
of such Person is, on the date of determination, greater than the total amount
of liabilities and that as of such date such Person is able to pay all
liabilities of such Person as they mature.

            SECTION 5.13. Margin Stock. No entity comprising the Company or any
Affiliated Entity is engaged in the business of extending credit for the purpose
of purchasing or carrying Margin Stock, and no proceeds of any Borrowing will be
used to purchase or carry any Margin Stock or extend credit to others for the
purpose of purchasing or carrying any Margin Stock. No proceeds of any Borrowing
will be used to acquire any equity security of a class that is registered
pursuant to Section 12 of the Exchange Act. No incurrence of any Revolving Loan
will violate or be inconsistent with the provisions of Regulation G, T, U or X
of the Board of Governors of the Federal Reserve System.

            SECTION 5.14. No Investment Company. Neither the Borrower nor any
Subsidiary of the Borrower is an "investment company", or an "affiliate person"
of, or "promoter" or "principal underwriter" for, an "investment company," as
such terms are defined in the Investment Company Act of 1940, as amended.
Neither the making of any Borrowing nor the application of the proceeds or
repayment thereof by the Borrower, nor the consummation of the other
transactions contemplated hereby will violate any provision of such Act or any
rule, regulation or order of the SEC thereunder.

            SECTION 5.15. Security Interests. The security interests created in
favor of the Lender under the Pledge and Security Agreements constitute first
priority perfected security


                                     - 31 -
<PAGE>

interests in the Collateral, subject to no security interests or other adverse
interests or claims of any other Person.

            SECTION 5.16. Properties. The owner of each Real Estate Asset has
good and marketable title to each Real Estate Asset from time to time owned by
it. Schedule 5.16 contains a true and complete list of all Real Estate Assets
owned on the Effective Date and accurately sets forth, with respect to each Real
Estate Asset, the direct owner thereof, the percentage of the Borrower's or any
Consolidated Subsidiary's Capital Interest therein and an accurate description
of the Real Estate Asset.

            SECTION 5.17. Partnership Agreements. Schedule 5.17 contains a true
and complete list of all Partnership Agreements.

            SECTION 5.18. Subsidiary Partnerships. With respect to each
Subsidiary Partnership, the Borrower is a limited partner with the percentage of
the Borrower's interest therein as set forth on Schedule 5.18. With respect to
each Affiliated Entity, the entity comprising the Company is a general or
limited partner or member thereof with the percentage of such entity's interest
therein as set forth on Schedule 5.18.

            SECTION 5.19. Debt. Schedule 5.19 sets forth a true and complete
list of all Debt of the Company as of the Initial Borrowing Date and which is to
remain outstanding after giving effect thereto (excluding the Revolving Loans,
the "Existing Debt"), in each case showing the aggregate principal amount
thereof and the name of the respective borrower and any entity which directly or
indirectly guaranteed such debt.

            SECTION 5.20. Accuracy of Information. All information, exhibits and
reports furnished in writing by or on behalf of any Credit Party or made
available to the Lender, relating to the condition (financial or otherwise),
operations, business, properties or performance of the Company or otherwise in
connection with the transactions contemplated by the Loan Documents were, when
furnished and taken as a whole, true and correct in all material respects, and
the information, exhibits and reports, taken as a whole, do not contain any
untrue statement of a material fact and do not omit to state a material fact
necessary to make the statements contained therein not misleading as of the date
when furnished and in light of the circumstances when made.

            SECTION 5.21. Business Plans. With respect to all business plans and
other forecasts and projections furnished by or on behalf of any Credit Party
and made available to the Lender relating to the condition (financial or
otherwise), operations, business, properties or performance of the Company, to
the best of the Borrower's knowledge, as of the date of such plans, forecasts
and projections: (i) there have occurred no material events known to the
Borrower that would render such plans, forecasts or projections, at and as of
the time prepared, materially misleading and (ii) all assumptions made in such
plans, forecasts and projections were reasonable under the circumstances when
made.


                                     - 32 -
<PAGE>

                                  ARTICLE VI
                             AFFIRMATIVE COVENANTS

            Each of the REIT, the Borrower and each Subsidiary Partnership
covenants and agrees, to the extent applicable to each, that, until the
Revolving Note together with interest thereon, Fees and all other Obligations
under this Agreement and the other Loan Documents, are indefeasibly and
irrevocably paid in full and the Commitment is terminated, each entity
comprising the Company shall (unless otherwise specifically agreed in writing by
the Lender):

            SECTION 6.1. Financial Statements and Other Information. Furnish to
the Lender:

                  (a) as soon as practicable and in any event within 10 days
            after each of the respective dates on which the REIT (or any entity
            comprising the Company) or any Affiliated Entity (each, a "Filing
            Entity") is required to file any document pursuant to Sections 13(a)
            or 15(d) of the Exchange Act commencing with the fiscal year and
            quarter ending December 31, 1996, copies of the annual and quarterly
            reports that any such Filing Entity is required to file pursuant to
            such Sections 13(a) or 15(d). In the event that any such Filing
            Entity which is not required or is no longer required to file
            reports pursuant to Sections 13(a) or 15(d) of the Exchange Act, (i)
            the REIT (or any entity comprising the Company) will transmit to the
            Lender copies of annual and quarterly reports of the REIT (or any
            entity comprising the Company) or any Affiliated Entity no longer
            required to file any document pursuant to the Exchange Act
            containing financial and other information comparable to that which
            such entity or Affiliated Entity would have been required to file
            with the SEC if it were subject to Section 13(a) or 15(d) of the
            Exchange Act, with such transmissions and filings to be made in the
            manner and within the times set forth above;

                  (b) no later than five (5) days following the submission
            thereof by any entity comprising the Company or any Affiliated
            Entity to the board of directors of the REIT, budgets for any such
            entity comprising the Company, any such Affiliated Entity and for
            the Real Estate Assets, in form satisfactory to the Lender
            (including budgeted statements of income and sources and uses of
            cash and balance sheets);

                  (c) accompanying the reports provided pursuant to paragraph
            (a) of this Section 6.1, a certificate signed by an Authorized
            Representative of each entity comprising the Company stating (i)
            that (s)he has reviewed this Agreement, (ii) that a review of the
            activities of each such entity during such period has been made
            under his or her immediate supervision with a view to determining
            whether any such entity has observed, performed and fulfilled all of
            its respective obligations under this Agreement, (iii) that, to the
            best of his/her knowledge, such review showed that there existed
            during such period no Unmatured Default or Event of Default, or if
            any such Unmatured Default or Event of Default existed, specifying
            the nature thereof, the period of existence thereof and what action
            such


                                     - 33 -
<PAGE>

            entity proposed to take, or has taken, with respect thereto and (iv)
            that, to the best of his/her knowledge, each such entity is in
            compliance with all terms, conditions and provisions of this
            Agreement and all other Loan Documents to which it is a party
            together with a schedule in form satisfactory to the Lender of the
            computations used by such Authorized Representative in determining
            as at the end of such period, compliance with the covenants
            contained in Section 7.12 hereof, it being understood that the
            Authorized Representative shall have no personal liability under
            said certificate if made and prepared in good faith based on his/her
            knowledge at the time of preparation thereof;

                  (d) (in addition to any documents furnished to the Lender
            pursuant to paragraph (a) of this Section 6.1) promptly upon the
            issuance or filing thereof, copies of all financial information and
            proxy materials of any entity comprising the Company and of any
            Affiliated Entity with the SEC or successor agency;

                  (e) as soon as practicable and in any event within fifty-five
            (55) days after the end of each fiscal quarter or one hundred (100)
            days after each fiscal year end, as the case may be, quarterly and
            year-to-date operating statement income detail for all Existing
            Properties and Future Properties substantially in the form of
            Schedule 6.1 hereto; and

                  (f) such other information (financial or otherwise) respecting
            the business, operations and special condition of each entity
            comprising the Company and each Affiliated Entity as the Lender from
            time to time may reasonably request.

            SECTION 6.2. Taxes and Claims. Each of the REIT, the Borrower and
each Subsidiary Partnership will pay and discharge or cause to be paid and
discharged, and the REIT and the Borrower will cause each of its Subsidiaries
and, to the extent that it is empowered to do so, each Affiliated Entity to pay
and discharge, (i) all taxes, assessments and governmental charges upon or
against them or upon their respective income, profits, properties or assets
prior to the date on which penalties attach thereto, unless and to the extent
that the amount, applicability or validity of any such charge is being contested
diligently in good faith by appropriate proceedings (except in cases in which
there is an unsecured risk of forfeiture of any of the Real Estate Assets), and
(ii) all lawful claims, whether for labor, materials, supplies, services or
anything else that might or could, if unpaid, become a Lien or charge upon the
properties or assets of any entity comprising the Company or any Affiliated
Entity, which Lien would not be permitted under this Agreement, unless and to
the extent such claims are being contested diligently in good faith by
appropriate proceedings (except in cases in which there is an unsecured risk of
forfeiture of any of the Real Estate Assets) and accounted for in conformity
with GAAP.

            SECTION 6.3. Maintenance of Property; Insurance. (a) Schedule 6.3
sets forth a true and complete listing of all insurance maintained by each
entity comprising the Company on the Initial Borrowing Date. Each of the REIT,
the Borrower and each Subsidiary Partnership will, and the REIT and the Borrower
will cause each of its Subsidiaries and, to the extent it is empowered to do so,
each Affiliated Entity to, (i) maintain and keep all property necessary in


                                     - 34 -
<PAGE>

its business in good working order and condition (ordinary wear and tear
excepted), (ii) maintain property insurance with financially sound and reputable
insurance companies on all insurable Property owned by any Affiliated Entity and
any entity comprising the Company and on all Real Estate Assets and other
property on which any entity comprising the Company or such Affiliated Entity
holds a mortgage, Lien or other encumbrance, for the replacement cost thereof
against such risks as applicable per property location, (iii) maintain public
liability insurance with financially sound and reputable insurance companies,
(iv) maintain workers' compensation insurance with financially sound and
reputable insurance companies as statutorily required by each applicable locale,
and (v) furnish to the Lender, upon written request, full information as to all
insurance carried; all of such insurance in such amounts and coverage as are
customarily maintained by owners and mortgagees of similar businesses and as
approved by the Lender. In addition to the requirements of the immediately
preceding sentence, each of the REIT, the Borrower and each Subsidiary
Partnership will, and the REIT and the Borrower will cause each of its
Subsidiaries and, to the extent that it is empowered to do so, each Affiliated
Entity to, at all times cause insurance of the types described in Schedule 6.3
to be maintained with the same scope of coverage as that described in Schedule
6.3 at levels which are at least as great as the respective amount described
opposite the respective type of insurance on Schedule 6.3 to the extent
available at commercially reasonable rates.

            (b) If requested by the Lender and to the extent obtainable, all
policies or certificates with respect to such insurance referred to in paragraph
(a) above (and any other insurance maintained by each entity comprising the
Company or any Affiliated Entity) (i) shall state that such insurance policies
shall not be cancelled without at least 30 days' written notice thereof by the
respective insurer to the Lender, (ii) shall provide that the respective
insurers irrevocably waive any and all rights of subrogation with respect to the
Lender, (iii) shall, except in the case of public liability insurance and
workers' compensation insurance, provide that any losses shall be payable
notwithstanding (A) any act or neglect of any entity comprising the Company or
any Affiliated Entity, (B) the occupation or use of any property for purposes
more hazardous than those permitted by the terms of the respective policy, (C)
any foreclosure or other proceeding relating to the insured properties or (D)
any change in the title to or ownership be deposited with the Lender.

            (c) If any entity comprising the Company or any Affiliated Entity to
which this Section 6.3 applies shall fail to maintain insurance in accordance
herewith, the Lender shall have the right (but shall be under no obligation) to
procure such insurance and the Borrower agrees to reimburse the Lender on demand
for all costs and expenses of procuring such insurance, and such costs and
expenses shall be deemed Obligations hereunder.

            SECTION 6.4. Books and Records. Each of the REIT, the Borrower and
each Subsidiary Partnership will, and the REIT and the Borrower will cause, each
of its Subsidiaries and, to the extent it is empowered to do so, each Affiliated
Entity to, maintain at all times true and complete books, records and accounts
in which true, complete and correct entries shall be made of its transactions in
accordance with GAAP and in compliance with the regulations of any governmental
regulatory body having jurisdiction over each of them.


                                     - 35 -
<PAGE>

            SECTION 6.5. Inspection. Each of the REIT, the Borrower and each
Subsidiary Partnership will, and the REIT and the Borrower will cause each of
its Subsidiaries and, to the extent it is empowered to do so, each Affiliated
Entity to, allow the Lender or such professionals, including, without
limitation, auditors or other Persons as the Lender may designate, to visit and
inspect any of their respective offices and each of the Real Estate Assets and
to examine each of their respective books of account and other records and
files, to make copies thereof, to review and evaluate the Collateral and to
discuss the affairs, business, finances and accounts of each entity comprising
the Company and each Affiliated Entity with each of their respective officers
and employees, which visit and inspection is limited to one visit and inspection
per year, provided that if an Event of Default has occurred and is continuing,
then such visits and inspections may be at such reasonable times and as often as
the Lender may request. Such inspections are solely for the protection of the
Lender and for the purposes of audit and valuation of Collateral and no action
or inaction by the Lender shall constitute any representation by the Lender that
any entity comprising the Company or any Affiliated Entity is in compliance with
the terms of this Agreement or waiver of any provision hereof. All of the
Lender's expenses incurred in connection with each such inspection, including,
without limitation, the reasonable fees and expenses of any Person designated by
the Lender to conduct or assist in such inspections, or for which the Lender
becomes obligated, shall be payable by the Borrower to the Lender upon demand.

            SECTION 6.6. Pay Debt and Perform Other Covenants. The Borrower will
make full and timely payments of the principal of and interest on the Revolving
Note, and timely pay all other amounts (including without limitation all Fees
and expenses) owed by the Borrower to the Lender, whether now existing or
hereafter arising, and each of the REIT, the Borrower, each Subsidiary
Partnership will, and the REIT and the Borrower will, to the extent it is
empowered to do so, cause each of its Subsidiaries and each Affiliated Entity
to, duly perform all of the Obligations under the Loan Documents to which it is
a party and duly comply with all the terms and covenants contained in each of
the instruments and documents furnished in connection with or pursuant to this
Agreement or the other Loan Documents to which it is a party, all at the times
and places and in the manner set forth therein and perform and comply with all
of its obligations under the terms of each mortgage, indenture, security
agreement, loan agreement or other material agreement to which it is a party,
except where such non-performances or non-compliances under any agreement (other
than this Agreement and the other Loan Documents) could not, individually or in
the aggregate, reasonably be expected to result in or have a Material Adverse
Effect.

            SECTION 6.7. Compliance With Laws. Each of the REIT, the Borrower
and each Subsidiary Partnership will, and the REIT and the Borrower will cause
each of its Subsidiaries and, to the extent it is empowered to do so, each
Affiliated Entity to comply with all applicable laws and regulations, including
but not limited to, federal, state and local laws and regulations relating to
consumer lending, disclosure, collection and licensing, where the failure so to
comply would have a Material Adverse Effect (other than those the validity of
which are being contested diligently in good faith by appropriate proceedings
(except in cases in which there is an unsecured risk of forfeiture of any of the
Real Estate Assets) and accounted for in conformity with GAAP).


                                     - 36 -
<PAGE>

              SECTION 6.8. Conduct of Business and Maintenance of Existence.
Each entity comprising the Company will continue to engage in business of the
same type as now conducted by it and will not enter, directly or indirectly,
into any other business other than primarily the development, operation, leasing
and management of value-oriented super-regional malls and community shopping
centers and services incidental to the foregoing without the prior written
approval of the Lender, and will preserve, renew and keep in full force and
effect its partnership, corporate or company existence, as the case may be, and
take all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business; provided, however,
that any such entity comprising the Company shall not be required to preserve
any right or franchise if the Lender determines, in its sole discretion, that
the preservation thereof is no longer desirable in the conduct of the business
of any such entity, and that the loss thereof is not disadvantageous in any
material respect to the Lender.

            SECTION 6.9. Notice of Certain Events. The Borrower promptly, but in
no event later than five (5) Business Days after obtaining knowledge thereof,
shall give written notice to the Lender of:

                  (i) any litigation, including arbitrations which is required
            to be reported to the auditors thereof and any investigations or
            proceedings before any Governmental Authority brought against any
            entity comprising the Company or any Affiliated Entity;

                  (ii) any written notice of a violation received by any entity
            comprising the Company or any Affiliated Entity from any
            Governmental Authority that, if such violation were established,
            might have a Material Adverse Effect;

                  (iii) any attachments, judgments, liens, levies or orders,
            aggregating more than $750,000 that may be placed on or against any
            entity comprising the Company or any Affiliated Entity or the
            Collateral or any Real Estate Asset;

                  (iv) any Unmatured Default or Event of Default, specifying the
            nature and extent thereof;

                  (v) any other matter that has or causes or may have or cause a
            Material Adverse Effect; and

                  (vi) the creation by any entity comprising the Company or any
            Affiliated Entity of any Subsidiary thereof, any change in the name
            or organizational form of any entity comprising the Company or any
            Affiliated Entity or any change in the location of the chief
            executive office of the Borrower or the Subsidiary Partnerships.

            SECTION 6.10. Environmental Laws, Etc. (a) Each of the REIT, the
Borrower and each Subsidiary Partnership will comply, and the REIT and the
Borrower will cause each of its Subsidiaries and, to the extent it is empowered
to do so, each Affiliated Entity to comply, with all Environmental Laws
applicable to the ownership or use of any of the Real


                                     - 37 -
<PAGE>

Estate Assets and will promptly pay or cause to be paid all costs and expenses
incurred in connection with such compliance, and will keep or cause to be kept
all such Real Estate Assets free and clear of any Liens imposed pursuant to such
Environmental Laws. Neither any entity comprising the Company nor any Affiliated
Entity will generate, use, treat, store, release or dispose of, or permit the
generation, use, treatment, storage, release or disposal of Hazardous Materials
on any Real Estate Asset or transport or permit the transportation of Hazardous
Materials to or from any such Real Estate Asset except for Hazardous Materials
used or stored at any such Real Estate Asset in compliance with all applicable
Environmental Laws and used in connection with the operation, use and
maintenance of any such Real Estate Asset.

            (b) At the written reasonable request of the Lender, which request
shall specify in detail the basis therefor, at any time and from time to time,
each entity comprising the Company will, and each such entity will cause each
Affiliated Entity to, provide, at its own expense an environmental site
assessment report concerning any Real Estate Asset prepared by an environmental
consulting firm approved by the Lender, indicating the presence or absence of
Hazardous Materials and the potential cost of any removal or remedial action in
connection with any Hazardous Materials at such Real Estate Asset. If any such
party fails to provide the same within 120 days after such request was made, the
Lender may order the same, and each such entity comprising the Company shall
grant and hereby grants, and each such entity will cause each Affiliated Entity
to grant, to the extent that it is legally and contractually able to do so, to
the Lender and its agent access to such Real Estate Asset and specifically, to
the extent that it is legally and contractually able to do so, grants the Lender
an irrevocable non-exclusive license, subject to the rights of tenants, to
undertake such an assessment, all at such party's expense.

            SECTION 6.11. ERISA. (a) Each entity comprising the Company and each
ERISA Affiliate will, and each such entity will cause each Affiliated Entity to,
deliver to the Lender, promptly upon becoming aware of the occurrence thereof,
notice that (i) a Prohibited Transaction with respect to any Plan has occurred
which could result in a material liability, tax or penalty to such entity or
such ERISA Affiliate under Code Section 4975 or ERISA Sections 502(i) or 502(l),
which notice shall specify the nature thereof and the proposed response thereto
and (ii) any entity comprising the Company, any Affiliated Entity or each ERISA
Affiliate has received notice of examination, investigation or claim issued by
the Internal Revenue Service or the Department of Labor with respect to a Plan
of such entity or such ERISA Affiliate, with a notice to the Lender including a
copy of such notice.

            (b) Each entity comprising the Company and each ERISA Affiliate
will, and each such entity will cause each Affiliated Entity to, operate and
maintain each Plan in compliance with ERISA and all applicable provisions of the
Code.

            (c) Each entity comprising the Company and each ERISA Affiliate
will, and each such entity will cause each Affiliated Entity to, deliver to the
Lender promptly after becoming aware of events or occurrences giving rise to any
liability of such entity or such ERISA Affiliate under WARN or similar
applicable state law, notice of the existence of such liability and the amount
thereof.


                                     - 38 -
<PAGE>

            SECTION 6.12. Maintain Security Interest. Each Credit Party shall
maintain perfected, first priority security interests in the Collateral in favor
of the Lender in accordance with the terms of the Pledge and Security
Agreements, free and clear of all Liens and adverse interests and claims.

            SECTION 6.13. Compliance with Partnership Agreements. Each of the
Borrower and each Subsidiary Partnership will conduct its business in a manner
which complies with the requirements of, and all agreements contained in, each
of their respective Partnership Agreements and the REIT will conduct its
business in a manner which complies with the requirements of, and all provisions
contained in, its organizational documents.

            SECTION 6.14. Further Assurances. Upon the request of the Lender,
each of the Credit Parties shall duly execute and deliver, or cause to be duly
executed and delivered, to the Lender (without cost to the Lender) such further
instruments and do and cause to be done such further acts as may be reasonably
necessary or proper in the reasonable opinion of the Lender to carry out more
effectually the provisions and purposes of this Agreement and the other Loan
Documents.

                                   ARTICLE VII
                               NEGATIVE COVENANTS

            Each of the REIT, the Borrower and each Subsidiary Partnership
covenants and agrees that, until the Revolving Note together with interest
thereon, Fees and all other Obligations under this Agreement and all other Loan
Documents, are indefeasibly and irrevocably paid in full and the Commitment is
terminated, none of the REIT, the Borrower, with respect to itself and its
Subsidiaries, nor any Subsidiary Partnership shall (unless otherwise
specifically agreed in writing by the Lender):

            SECTION 7.1. Liens. No entity comprising the Company shall create,
incur or permit to exist against any of its properties or assets (real or
personal, tangible or intangible) any mortgage or other lien or encumbrance
other than: (i) Liens in existence as of the date of the audited financial
statements furnished to the Lender prior to the execution of this Agreement;
(ii) Liens securing taxes, assessments or governmental charges or levies, or the
claims or demands of materialmen, mechanics, carriers, workmen, repairmen,
warehousemen, landlords and other like Persons in respect of obligations not
overdue or which are being contested in good faith and for which adequate
reserves are being maintained in accordance with GAAP; (iii) other Liens
(including pledges or deposits in accordance with workers' compensation laws),
incidental to the conduct of the business or the ownership of its property and
assets, that are not incurred in connection with the borrowing of money,
guarantees or the obtaining of advances or credit, and that in the aggregate do
not detract materially from the value of its property or assets, or impair the
use thereof in the operation of its business materially; (iv) Liens created by
any entity comprising the Company on any of the Real Estate Assets so long as
there is no recourse to any entity comprising the Company in respect of any Debt
or other obligations secured by such Liens other than solely against such Real
Estate Assets, or any proceeds in respect of any thereof unless in compliance
with Section 7.5 hereof; (v) Liens securing any Debt permitted under


                                     - 39 -
<PAGE>

Section 7.3 of the Agreement; and (vi) other Liens which are expressly
subordinate to any Obligations outstanding under this Agreement which Liens have
been created, incurred or permitted with the prior written consent of the
Lender.

            SECTION 7.2. Restrictions on Distributions. No entity comprising the
Company shall declare or pay or permit to declare or pay any Distributions
except that, so long as there shall exist no Unmatured Default of a monetary
nature or Event of Default (both before and after giving effect to the payment
thereof), each entity comprising the Company may pay Distributions to any Person
in an aggregate amount not to exceed an amount equal to (i) during the Initial
Term, 105% of the Funds Available For Distribution and (ii) during the Renewal
Term, 100% of the Funds Available For Distribution, in each case, for the
12-month period ending on the last day of the fiscal quarter preceding the date
that such Distribution is declared.

            SECTION 7.3. Debt. No entity comprising the Company shall create,
incur, assume or permit to exist any Debt other than: (i) Debt created pursuant
to this Agreement and the other Loan Documents; (ii) Existing Debt and any Debt
incurred to refinance or repay any Existing Debt (as same may be refinanced);
(iii) any Debt secured by a first mortgage, deed of trust or other security
instrument covering any Real Estate Asset, provided that in the case of any such
Debt covering the portion of Sawgrass Mills now owned by the Subsidiary
Partnerships the aggregate amount of such Debt shall not exceed $172,000,000;
(iv) an existing cash collateralized loan with Franklin Bank in an aggregate
principal amount not exceeding $2,400,000; (v) a fixture loan currently being
negotiated with Franklin Bank in an aggregate principal amount not exceeding
$1,500,000, which loan shall be amortized over a period no longer than four
years from the date of the initial borrowing thereunder and on terms otherwise
satisfactory to the Lender; (vi) an unsecured line of credit to be extended by
Franklin Bank, the proceeds of which are to be used solely for working capital
and general corporate purposes, provided that and so long as immediately
following the incurrence thereof the aggregate outstanding principal amount of
such line of credit shall not exceed $3,000,000 and such line of credit shall be
subordinate to the Debt created pursuant to this Agreement and the other Loan
Documents; (vii) non-collateralized letters of credit obtained in connection
with the acquisition, development or redevelopment of Existing Properties or
Future Properties and which in the aggregate do not exceed $2,000,000 at any one
time; and (viii) normal and customary trade accounts payable due and payable
within 120 days thereof.

            SECTION 7.4. Merger, Consolidation, Sale or Transfers of Assets. No
entity comprising the Company shall (a) merge or consolidate with any other
Person unless such Person is wholly-owned or controlled, directly or indirectly,
by the Borrower, (b) sell, master or ground lease or otherwise convey any of the
Mills Properties (or any portion of or interest in any Mills Property) or any of
their respective Capital Interests therein, as the case may be, or all or
substantially all of the assets of any entity comprising the Company (excluding
(i), in the case of Future Properties and Phase III of Sawgrass Mills, the sale
of vacant parcels, such as the sale of peripheral parcels and anchor pads for
sale to retail users, or, in the case of all Existing Properties, up to one
anchor pad sale per year and (ii) the sale of any Community Centers, the
proceeds of which are applied in accordance with Section 3.2 hereof) or (c)
permit a Change in Control, without obtaining, in each instance, the prior
written consent of the Lender. Notwithstanding anything contained herein to the
contrary, additional Units in the


                                     - 40 -
<PAGE>

Borrower may be issued to Kan Am US, Inc. or other investors, and additional
shares in the REIT may be issued, so long as, in either case, such issuance of
additional Units or shares shall not result during the Initial Term or Renewal
Term in a reduction of the ability of the REIT to control the affairs of the
Borrower or in a change in control of the board of directors of the REIT. Clause
(b) above shall not be construed to prohibit the creation of normal and ordinary
easements or the conveyance of minor vacant parcels of land for road widenings
or public purposes.

            SECTION 7.5. Contingent Obligations. No entity comprising the
Company shall incur any Contingent Obligation, except for joint and several or
joint guarantees entered into by any entity comprising the Company with Simon
Property Group Inc., Taubman Realty Group L.P. and other entities acceptable to
Lender in its sole discretion in connection with the acquisition of land or
construction or term financing for any of the Mills Properties, provided that
the aggregate amount of the obligations guaranteed (excluding any Allocated
Affiliated Debt included in such guaranteed obligations) does not exceed
$250,000,000.

            SECTION 7.6. Investments. No entity comprising the Company shall
make any Investment that could have a Material Adverse Effect on the Company in
the Lender's reasonable judgment, other than: (i) Investments made on or prior
to the Initial Borrowing Date (provided that any additional Investments made
with respect thereto shall be permitted only if independently justified under
the other provisions of this Section 7.6); (ii) Investments received by the REIT
or the Borrower, as the case may be, as consideration for the sale or issuance
of shares or the Units, as the case may be, in accordance with Section 7.4;
(iii) Capital Interests in the Borrower, the REIT and their respective
Subsidiaries and the Affiliated Entities; (iv) normal cash management operations
in the ordinary course of the Company's business; or (v) Investments in Real
Estate Assets consistent with the business of the Company.

            SECTION 7.7. Intercompany Debt. No Intercompany Debt may be
evidenced by a promissory note (an "Intercompany Note") unless such Intercompany
Note is endorsed and delivered to the Lender pursuant to and in accordance with
the terms of the Intercompany Pledge and Security Agreement.

            SECTION 7.8. Transactions with Affiliates. No entity comprising the
Company shall (a) become a party to any transaction with any Affiliate or
Affiliated Entity other than in the ordinary course of business on arm's-length
terms, (b) make, or commit to make, any payments to any Subsidiary, any
Affiliate or any Affiliated Entity on other than commercially reasonable terms
or (c) permit, or make or enter into any contract or other agreement for the
payment of any management or other similar fee to any Affiliate or Affiliated
Entity except on terms that would be consistent with terms entered into with
unaffiliated third parties, unless, in any of the foregoing events any of the
items in (a), (b) or (c) is on terms or on a basis more favorable to an entity
comprising the Company than to such Affiliate or Affiliated Entity.

            SECTION 7.9. Events of Default. No entity comprising the Company
shall permit any default or event of default to occur under any note or loan
agreement pursuant to the terms of any of which moneys are payable by any entity
comprising the Company; or permit any default or event of default to occur under
any lease, mortgage, contract for deed, security


                                     - 41 -
<PAGE>

agreement or other contractual obligation binding upon any entity comprising the
Company, which default or event of default would constitute a Material Adverse
Effect.

            SECTION 7.10. Use of Proceeds. No entity comprising the Company
shall permit amounts borrowed under the Commitment to be used other than as
permitted by Section 2.9 herein.

            SECTION 7.11. Accounting Changes. No entity comprising the Company
shall make any change in any accounting treatment or financial reporting
practices except as required or permitted by GAAP as in effect from time to
time.

            SECTION 7.12. Financial Covenants. (a) The Consolidated Debt (A)
shall not exceed at any time 75% of the sum of (i) the Value of the Real Estate
Assets as of the last Business Day of the most recently ended calendar quarter
plus (ii) the purchase price of any Real Estate Asset and mortgage receivable
acquired by any entity comprising the Company since the end of the most recently
ended calendar quarter plus (iii) the amount of any securities offering and Debt
proceeds received (to the extent that such proceeds were not used to acquire any
Real Estate Assets or mortgage receivable or used to reduce Debt) by the Company
since the end of the most recently ended calendar quarter; and (B) shall not
exceed at any time 65% of the sum of (i) the aggregate fair market value of the
outstanding REIT Common Shares assuming the exchange of all of the Units for
REIT Common Shares plus (ii) the aggregate principal amount of the Consolidated
Debt.

                  (b) The Consolidated Service Charge Coverage Ratio for the
calendar quarter most recently ended shall not be less than 1.70:1.

                                  ARTICLE VIII
                              DEFAULTS AND REMEDIES

            SECTION 8.1. Events of Default. An "Event of Default" shall mean the
occurrence or existence of one or more of the following events or conditions
(whatever the reason for such Event of Default and whether such occurrence or
existence shall be voluntary or involuntary or come about or be effected by
operation of law or pursuant to or in compliance with any judgment, decree or
order of any court or any order, rule or regulation of any governmental body):

                  (a) the Borrower shall fail to pay to the Lender the principal
            of any Revolving Loan when due;

                  (b) the Borrower shall fail to pay to the Lender interest,
            Fees or other amounts due under the Loan Documents or the Revolving
            Note when due and such failure with respect to interest, Fees or
            other amounts shall continue unremedied for more than two (2)
            Business Days after notice thereof has been given to the Borrower
            with respect to the first occurrence and three (3) Business Days


                                     - 42 -
<PAGE>

            with respect to each occurrence thereafter (it being understood that
            after the first occurrence no notice whatsoever is required);

                  (c) any representation or warranty made by any Credit Party
            herein or in any other Loan Document or any certificate furnished
            pursuant hereto shall prove to have been inaccurate in any material
            and adverse respect when made provided, that, in the event that any
            such representation or warranty proves to have been incorrect but
            was made unintentionally by the respective Credit Party, then such
            Credit Party shall not be in default if the Credit Party corrects or
            cures such inaccuracy to the satisfaction of the Lender, in its
            reasonable discretion, within thirty (30) days after notice thereof
            has been given to such Credit Party;

                  (d) any Credit Party shall fail to perform or observe (i) any
            term, covenant or agreement contained in this Agreement or in any
            other Loan Document on its part to be performed or observed and such
            failure shall continue unremedied for thirty (30) days after notice
            thereof has been given to such Credit Party; provided, however, that
            if such failure is of such nature that it cannot be cured in such
            thirty (30) day period, then such Credit Party shall not be in
            default so long as such Credit Party immediately commences to cure
            such default and diligently proceeds with steps required to effect a
            cure within a period of time reasonable under the circumstances, but
            in any event not to exceed ninety (90) days in the aggregate or (ii)
            any term, covenant or agreement contained in Section 7;

                  (e) the occurrence of any default or event of default pursuant
            to any of the Security Documents, and such default or event of
            default shall continue unremedied on the expiration of the grace
            period applicable thereto, if any, as specified in such Security
            Documents;

                  (f) any default (after notice of such default by the
            applicable lender, if required to be given by such lender, and the
            failure to cure such default prior to the expiration of any
            applicable grace period) on any Debt of any entity comprising the
            Company or any Affiliated Entity of a principal amount exceeding
            $10,000,000, the existence of which would permit the acceleration of
            such Debt;

                  (g) if any court or administrative agency enters a final,
            nonappealable order against any entity comprising the Company or any
            Affiliated Entity requiring such entity or such Affiliated Entity to
            divest itself of any of its assets or requiring the payment of money
            which order is not discharged, vacated or set aside within sixty
            (60) days of its date and the amount owing on such final judgment
            either singly or in combination with other judgments against any
            entity comprising the Company or any Affiliated Entity exceeds
            $7,500,000;

                  (h) any entity comprising the Company or any Affiliated
            Entity, shall (i) apply for or consent to the appointment of a
            receiver, trustee, or liquidator of itself, or of all or
            substantially all of its assets, (ii) be unable, or admit in writing


                                     - 43 -
<PAGE>

            its inability to pay its debts as they become due, (iii) be
            adjudicated a bankrupt or insolvent or any proceeding shall be
            instituted against any entity comprising the Company or any
            Affiliated Entity seeking liquidation, winding-up, reorganization
            under any law relating to bankruptcy or (iv) file a voluntary
            petition in bankruptcy or a petition or any corporate action shall
            be taken by any entity comprising the Company or any Affiliated
            Entity for the purpose of effecting any of the foregoing;

                  (i) any entity comprising the Company or any Affiliated Entity
            shall permit or suffer to exist any Prohibited Transaction; or

                  (j) the occurrence of a Change of Control.

            SECTION 8.2. Consequences of an Event of Default. If an Event of
Default shall occur and be continuing, the Lender may (but the same shall not be
deemed to be by way of limitation), by notice to the Borrower, (i) declare the
Commitment terminated, whereupon the same shall immediately terminate; (ii)
declare the Revolving Note, all interest thereon, Fees and other amounts payable
under this Agreement or any other Loan Document and all other Obligations of the
Borrower, hereunder or under the Revolving Note or any other Loan Document to be
immediately due and payable, whereupon the same shall become and be immediately
due and payable, without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by the Borrower and an action
therefor shall immediately accrue; (iii) set off amounts in any accounts of the
Borrower under the dominion and control of the Lender and apply such amounts to
the Obligations of the Borrower hereunder and in the other Loan Documents;
and/or (iv) exercise any and all of its remedies under the Pledge and Security
Agreements; provided, that in the event of an actual or deemed entry of an order
for relief with respect to the Borrower under the Federal Bankruptcy Code, (A)
the obligation of the Lender to make any Borrowing shall automatically be
terminated and (B) the Revolving Note, all such interest and all such amounts
shall automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
the Borrower. In addition, if an Event of Default occurs, the Lender may
exercise all rights and remedies which the Lender may have hereunder, under any
other Loan Document, at law (including but not limited to the Uniform Commercial
Code), in equity or otherwise. All such remedies shall be cumulative and not
exclusive.

                                   ARTICLE IX
                                      AGENT

            SECTION 9.1. Appointment. In the event that the Lender elects to
assign or sell participations to any Lending Bank pursuant to Section 10.12
hereof, then such Lending Bank or Lending Banks (if more than one) shall
designate the Lender (and the Lender alone without any co-agent(s)) to act as
its or their agent in connection with this Agreement or with the other Loan
Documents. Each Lending Bank hereby irrevocably authorizes, and each holder of
any Revolving Note by the acceptance of such Revolving Note shall be deemed
irrevocably to authorize, the Lender as its agent to take such action on its
behalf under the provisions of this


                                     - 44 -
<PAGE>

Agreement, the other Loan Documents and any other instruments and agreements
referred to herein or therein and to exercise such powers and to perform such
duties hereunder and thereunder as are specifically delegated to or required of
the Lender as its agent by the terms hereof and thereof and such other powers as
are reasonably incidental thereto. The Lender in its capacity as agent may
perform any of its duties hereunder by or through its respective officers,
directors, agents, employees or affiliates.

            SECTION 9.2. Nature of Duties. The Lender in its capacity as agent
shall not have any duties or responsibilities except those expressly set forth
in this Agreement and the Security Documents. Neither the Lender in its capacity
as agent nor any of its respective officers, directors, agents, employees or
affiliates shall be liable for any action taken or omitted by it or them
hereunder or under any other Loan Document or in connection herewith or
therewith, unless caused by its or their gross negligence or willful misconduct.
The duties of the Lender in its capacity as agent shall be mechanical and
administrative in nature; the Lender in its capacity as agent shall not have by
reason of this Agreement or any other Loan Document a fiduciary relationship in
respect of any Lending Bank or the holder of any Revolving Note; and nothing in
this Agreement or any other Loan Document, expressed or implied, is intended to
or shall be so construed as to impose upon the agent any obligations in respect
of this Agreement or any other Loan Document except as expressly set forth
herein or therein.

            SECTION 9.3. Lack of Reliance on the Agent. Independently and
without reliance upon the Lender in its capacity as agent, each Lending Bank and
the holder of each Revolving Note, to the extent it deems appropriate, has made
and shall continue to make (x) its own independent investigation of the
financial condition and affairs of each entity comprising the Company and each
Affiliated Entity in connection with the making and the continuance of the
Revolving Loans and the taking or not taking of any action in connection
herewith and (y) its own appraisal of the creditworthiness of each entity
comprising the Company and each Affiliated Entity and, except as expressly
provided in this Agreement, the Lender in its capacity as agent shall not have
any duty or responsibility, either initially or on a continuing basis, to
provide any Lending Bank or the holder of any Revolving Note with any credit or
other information with respect thereto, whether coming into its possession
before the making of the Revolving Loans or at any time or times thereafter.
Neither Lender in its capacity as agent nor any of its affiliates nor any of
their respective officers, directors, agents or employees shall be responsible
to any Lending Bank or the holder of any Revolving Note for, or be required or
have any duty to ascertain, inquire or verify the accuracy of, (i) any recitals,
statements, information, representations or warranties herein or in any
document, certificate or other writing delivered in connection herewith, (ii)
the execution, effectiveness, genuineness, validity, enforceability, perfection,
collectibility, priority or sufficiency of this Agreement or any other Loan
Document, (iii) the financial condition of any entity comprising the Company or
any Affiliated Entity, (iv) the performance or observance of any of the terms,
provisions or conditions of this Agreement or any other Loan Document, (v) the
satisfaction of any of the conditions precedent set forth in Article IV, or (vi)
the existence or possible existence of any Unmatured Default or Event of
Default.

            SECTION 9.4. Intentionally Omitted


                                     - 45 -
<PAGE>

            SECTION 9.5. Reliance. The Lender in its capacity as agent shall be
entitled to rely, and shall be fully protected (and shall have no liability to
any person other than the Borrower if applicable) in relying, upon any note,
writing, resolution, notice, statement, certificate, telex, teletype or
telecopier message, cablegram, radiogram, order or other document or telephone
message signed, sent or made by any Person that the agent believed to be the
proper Person, and, with respect to all legal matters pertaining to this
Agreement and any other Loan Document and its duties hereunder and thereunder,
upon advice of counsel selected by the Lender in its capacity as agent.

            SECTION 9.6. Indemnification. To the extent that the Lender in its
capacity as agent is not reimbursed and indemnified by the Borrower, the Lending
Banks will reimburse and indemnify the Lender in its capacity as agent, in
proportion to their respective "percentages" as used in determining the Required
Banks, for and against any and all liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, costs, expenses or disbursements of
whatsoever kind or nature which may be imposed on, asserted against or incurred
by the Lender in its capacity as agent in performing its respective duties
hereunder or under any other Loan Document, in any way relating to or arising
out of this Agreement or any other Loan Document; provided that no Lending Bank
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the gross negligence or willful misconduct of the Lender in its
capacity as agent.

            SECTION 9.7. The Lender in its Individual Capacity. With respect to
its obligation to make Revolving Loans under this Agreement, the Lender shall
have the rights and powers specified herein for the Lender and may exercise the
same rights and powers as though it were not performing the duties specified
herein in its capacity as agent; and the term "Lending Banks," "Required Banks,"
"holders of Revolving Notes" or any similar terms shall, unless the context
clearly otherwise indicates, include the Lender in its individual capacity. The
Lender may accept deposits from, lend money to, and generally engage in any kind
of banking, trust or other business with any Credit Party or any Affiliate of
any Credit Party as if they were not performing the duties specified herein in
its capacity as agent, and may accept fees and other consideration from any
Credit Party for services in connection with this Agreement and otherwise
without having to account for the same to the Lending Banks.

            SECTION 9.8. Holders. The Lender in its capacity as agent may deem
and treat the payee of any Revolving Note as the owner thereof for all purposes
hereof unless and until a written notice of the assignment, transfer or
endorsement thereof, as the case may be, shall have been filed with the Lender
in its capacity as agent. Any request, authority or consent of any Person who,
at the time of making such request or giving such authority or consent, is the
holder of any Revolving Note shall be conclusive and binding on any subsequent
holder, transferee, assignee or indorsee, as the case may be, of such Revolving
Note or of any Revolving Note or Revolving Notes issued in exchange therefor.

            SECTION 9.9. Resignation by the Agent. (a) The Lender may not
without the Borrower's consent resign from the performance of any of its
functions and duties under this Article and/or under the other Loan Documents at
any time by giving 15 Business Days' prior


                                     - 46 -
<PAGE>

written notice to the Lending Banks. Such resignation shall take effect upon the
appointment of a successor agent pursuant to clauses (b) and (c) below or as
otherwise provided below.

            (b) Upon any such notice of resignation pursuant to Section 9.9(a)
hereof, the Required Banks shall appoint a successor agent hereunder or
thereunder which shall be a commercial bank or trust company reasonably
acceptable to the Borrower.

            (c) If a successor agent shall not have been so appointed within
such 15 Business Day period, the Lender in its capacity as agent, with the
consent of the Borrower (which consent will not be unreasonably withheld or
delayed), shall then appoint a commercial bank or trust company as successor
agent who shall serve as agent hereunder until such time, if any, as the
Required Banks appoint a successor agent as provided above.

            (d) If no successor agent has been appointed pursuant to clause (b)
or (c) above by the 20th Business Day after the date such notice of resignation
was given by the Lender as agent, the Lender's resignation shall become
effective and the Lending Banks shall thereafter perform all the duties of the
agent hereunder and/or under any other Loan Document until such time, if any, as
the Required Banks appoint a successor agent as provided above.

                                    ARTICLE X
                                  MISCELLANEOUS

            SECTION 10.1. Collection Costs. In the event that the Lender, for
itself or in its capacity as agent for the Lending Banks, shall retain or engage
an attorney or attorneys to collect or enforce or protect its interests with
respect to this Agreement, any of the other Loan Documents, or any instrument or
document delivered pursuant to this Agreement or the other Loan Document,
including, without limitation, each of the documents referred to in Article IV
hereof, or to protect the rights of any holder or holders with respect thereto,
the Borrower shall pay, within 10 days after demand therefor, all of the
reasonable costs and expenses of such collection, enforcement or protection,
including reasonable attorneys' fees and disbursements (of the Lender and the
Lending Banks), and the Lender, for itself or in its capacity as agent for the
Lending Banks, may take judgment for all such amounts, in addition to all other
amounts due hereunder.

            SECTION 10.2. No Waiver. No course of dealing or delay or failure by
the Lender or any Lending Bank in exercising any right, power or privilege under
any Loan Document shall affect any other right or future exercise thereof.

            SECTION 10.3. GOVERNING LAW. THIS AGREEMENT, THE REVOLVING NOTE AND
THE OTHER LOAN DOCUMENTS AND THE RIGHTS AND THE DUTIES OF THE PARTIES HEREUNDER
AND THEREUNDER AND WITH RESPECT TO INTEREST, SHALL BE GOVERNED BY, AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES.


                                     - 47 -
<PAGE>

            SECTION 10.4. Notices. 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:

            (i)   the REIT:

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

            (ii)  the Borrower:

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

            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

            (iii) each Subsidiary Partnership:

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


                                     - 48 -
<PAGE>

            (iv)  the Lender:

                  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

            SECTION 10.5. Costs and Expenses; Indemnity. (a) The Borrower agrees
to pay on demand all out-of-pocket costs and expenses (including attorneys' fees
and disbursements of counsel to the Lender) incurred by the Lender in connection
with the preparation, execution, delivery, filing, recording, administration,
modification, restatement or amendment of this Agreement, the other Loan
Documents and all instruments and documents delivered pursuant to this Agreement
or the other Loan Documents (including any waivers or consents that may be
requested by the Borrower) including, without limitation, each of the documents
referred to in Article IV hereof, all present and future stamp, documentary,
excise and other similar taxes with respect to the foregoing matters, all costs
and expenses (including attorney's fees and disbursements of counsel to the
Lender) of the Lender in connection with the enforcement of this Agreement and
the other Loan Documents, all reasonable out-of-pocket costs and expenses, if
any, in connection with the enforcement (whether in the context of a civil
action, adversary proceeding, workout or otherwise) of this Agreement, the other
Loan Documents, and such other instruments and documents, including, without
limitation, reasonable attorneys' fees and disbursements, audit charges,
appraisal fees, search fees and filing fees, examination, travel, lodging and
meal expenses and all reasonable out-of-pocket costs and expenses (including,
without limitation, reasonable attorneys' fees and disbursements) of the Lender
in connection with the other Loan Documents.

            (b) The Borrower further agrees to indemnify and save harmless the
Lender (and, in the event of a syndication or participation, each Lending Bank),
their respective officers, directors, employees, attorneys, agents,
attorneys-in-fact and Affiliates from and against any and all actions, causes of
action, suits, investigations, proceedings, losses, liabilities and damages and
expenses (including, without limitation, attorneys' fees and disbursements) in
connection therewith, whether or not such Person is a party to any such
proceeding, action, suit, or investigation (herein called the "Indemnified
Liabilities") incurred by the Lender or any of its officers, directors,
employees, attorneys, agents, attorneys-in-fact or Affiliates as a result of, or
arising out of or relating to any of the transactions contemplated hereby or by
the other Loan


                                     - 49 -
<PAGE>

Documents, or any requested amendments, waivers or consents thereto (whether or
not such are given or become effective) or the administration or preservation
and protection of the Lender's or such Lending Bank's rights or remedies under
this Agreement or any other Loan Document, except for any Indemnified
Liabilities arising on account of the gross negligence or willful misconduct of
the Lender or such Lending Bank or the Lender's or such Lending Bank's failure
to substantially comply with the terms hereof in all material respects;
provided, however, that, if and to the extent such agreement to indemnify may be
unenforceable for any reason, the Borrower shall make the maximum contribution
to the payment and satisfaction of each of the Indemnified Liabilities which
shall be permissible under applicable law. This provision shall survive the
termination of the Commitments and this Agreement.

            SECTION 10.6. Fees Nonrefundable; Payments in U.S. Currency;
Computations. (a) All fees required to be paid pursuant to this Agreement and
any other Loan Document shall be paid as required herein and therein. All fees
(including without limitation the Fees) under this Agreement or the other Loan
Documents are non-refundable under all circumstances. All payments (including
prepayments) by the Borrower to the Lender, shall be made to the Lender in
lawful currency of the United States and in immediately available funds without
setoff or counterclaim at the office designated by the Lender.

            (b) All computations of interest shall be made by the Lender on the
basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest is paid. Each determination by the Lender of an interest
rate hereunder shall be conclusive and binding for all purposes, absent manifest
error.

            SECTION 10.7. WAIVER OF JURY TRIAL AND SETOFF. EACH OF THE CREDIT
PARTIES 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 (I) THIS AGREEMENT, THE REVOLVING NOTE, THE OTHER
LOAN DOCUMENTS OR ANY INSTRUMENT OR DOCUMENT DELIVERED PURSUANT TO THIS
AGREEMENT, THE REVOLVING NOTE, OR THE OTHER LOAN DOCUMENTS, (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 HEREUNDER.

            SECTION 10.8. Captions. The captions of the various sections and
paragraphs of this Agreement have been inserted only for the purpose of
convenience; such captions are not a part of this Agreement and shall not be
deemed in any manner to modify, explain, enlarge or restrict any of the
provisions of this Agreement.

            SECTION 10.9. Lien; Set-off. The Borrower hereby grants to the
Lender (for itself and in its capacity as agent for the Lending Banks) a
continuing lien for Debt to the Lender


                                     - 50 -
<PAGE>

and the Lending Banks upon any and all of the Borrower's moneys, securities and
other property and the proceeds thereof, now or hereafter held or received by or
in transit to, the Lender (for itself and in its capacity as agent for the
Lending Banks) or any of its agents from or for it, whether for safekeeping,
custody, pledge, transmission, collection or otherwise, and also upon any and
all deposits (general or special) and credits with, and any and all claims
against, the Lender or any Lending Bank, at any time existing in connection with
this Agreement or any other Loan Document. Upon the occurrence of any Event of
Default, the Lender and each Lending Bank is hereby authorized at any time and
from time to time to setoff, appropriate and apply any or all items hereinabove
referred to against all Debt to the Lender and each Lending Bank under this
Agreement, the Revolving Note or any other Loan Document, and whether now
existing or hereafter arising. Notwithstanding the foregoing, no Lending Bank
(other than the Lender on behalf of the Lending Banks) shall exercise any right
of setoff that it may otherwise have under applicable law without the consent of
the Required Banks, it being understood, however, that this sentence is for the
sole benefit of the Lending Banks. The Lender agrees to endeavor to notify the
Borrower no later than three (3) Business Days after any such set-off and
application is made by the Lender; provided, that the failure to give such
notice shall not affect the validity of such set-off and application.

            SECTION 10.10. Security. As security for the payment of any and all
sums owing under the Revolving Note, and all other Obligations of the Borrower
hereunder and under the other Loan Documents, the Borrower shall execute and
deliver the General Pledge and Security Agreement and the Borrower and each
other Credit Party shall execute and deliver the Intercompany Pledge and
Security Agreement and the Borrower and each other Credit Party shall execute
and cause to be properly filed in all pertinent jurisdictions the financing
statements relating to the Collateral.

            SECTION 10.11. JURISDICTION; SERVICE OF PROCESS. 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, THE OTHER LOAN DOCUMENTS OR ANY DOCUMENT OR INSTRUMENT DELIVERED
PURSUANT TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS. NOTHING HEREIN SHALL
AFFECT THE RIGHT OF THE LENDER, ANY LENDING BANK OR ANY HOLDER OF THE REVOLVING
NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY CREDIT PARTY IN ANY OTHER
JURISDICTION.

            SECTION 10.12. Benefit of Agreement; Assignments. (a) This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, and all subsequent holders of the Revolving
Note, except that the obligation of the Lender or any Lending Bank to make
Borrowings hereunder shall not inure to the benefit of any successors or assigns
of the Borrower. The Lender may assign its rights and delegate its


                                     - 51 -
<PAGE>

obligations under this Agreement, in each case in full or in part, and further
may assign or sell participations in all or any part of any Revolving Loans to
any Bank, in which event (i) in the case of an assignment, upon written notice
thereof by the Lender to the Borrower, 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 Lender hereunder and (ii) in the
case of a participation, the participant shall not have any duties under this
Agreement or any other Loan Document (the participant's rights and duties in
respect of such participation to be those set forth in the agreement executed by
the Lender in favor of the participant relating thereto); provided, that,
although any Lending Bank may transfer, assign or grant participations in its
rights hereunder, such Lending Bank may not transfer or assign all or any
portion of its commitments hereunder except as provided in Section 10.12(b)
hereof and the transferee, assignee or participant, as the case may be, shall
not constitute a "Lending Bank" hereunder and, provided further, that no Lending
Bank shall transfer or grant any participation under which the participant shall
have any rights to approve any amendment to or waiver of this Agreement or any
other Loan Document except to the extent such amendment or waiver would (x)
extend the final scheduled maturity of any Revolving Loan or Revolving Note in
which such participant is participating, or reduce the rate or extend the time
of payment of interest or Fees thereon (except in connection with a waiver of
applicability of any post-default increase in interest rates) or reduce the
principal amount thereof, or increase the amount of the participant's
participation over the amount thereof then in effect (it being understood that a
waiver of any Unmatured Default or Event of Default or of a mandatory reduction
in the Commitment shall not constitute a change in the terms of such
participation, and that an increase in the Commitment or any Revolving Loan
shall be permitted without the consent of any participant if the participant's
participation is not increased as a result thereof), (y) consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement or (z) release or subordinate any material portion of the
Collateral under any of the Pledge and Security Agreements (except as expressly
provided in the Loan Documents) supporting the Obligations hereunder in which
such participant is participating. In the case of any such participation, the
participant shall not have any rights under this Agreement or any of the other
Loan Documents (the participant's rights against such Lending Bank in respect of
such participation to be those set forth in the agreement executed by such
Lending Bank in favor of the participant relating thereto) and all amounts
payable by the Borrower hereunder shall be determined as if such Lending Bank
had not sold such participation.

            (b) Notwithstanding the foregoing, any Lending Bank (or any Lending
Bank together with one or more other Lending Banks) may (x) assign all or a
portion of its commitment (and related outstanding Obligations hereunder) to its
parent company and/or any Affiliate of such Lending Bank or (y) assign all or,
if less than all, a portion equal to at least $5,000,000 in the aggregate for
the assigning Lending Bank or assigning Lending Banks, of such commitment
hereunder to one or more transferees as approved by the Lender in its capacity
as agent.

            (c) In any event, each assignee shall become a party to this
Agreement as a Lending Bank only upon execution of an Assignment and Assumption
Agreement substantially in the form of EXHIBIT F hereto, provided that, (i) new
Revolving Notes will be issued, at the Borrower's expense, to such new Lending
Bank and to the assigning Lending Bank upon the


                                     - 52 -
<PAGE>

request of such new Lending Bank or assigning Lending Bank, such new Revolving
Notes to be in conformity with the requirements of Section 2.4 (with appropriate
modifications) to the extent needed to reflect the revised commitments of such
Lending Banks (and, if applicable, the Lender), (ii) the consent of the Lender
shall be required in connection with any such assignment pursuant to clause (y)
of Section 10.12(b) hereof (which consent shall not be unreasonably withheld)
and (iii) the Lender, in its capacity as agent, shall receive at the time of
each such assignment, from the assigning or assignee Lending Bank, the payment
of a non-refundable assignment fee of $3,500.00, and provided further, that such
transfer or assignment shall not be effective until recorded by the Lender in
its capacity as agent on its register as required by customary banking practice.
To the extent of any assignment pursuant to Section 10.12(b), the assigning
Lending Bank (or the Lender if an assignor) shall be relieved of its obligations
hereunder with respect to its assigned commitments. At the time of each
assignment pursuant to Section 10.12(b) hereof to a Person which is not already
a Lending Bank hereunder and which is not a United States person (as such term
is defined in Section 7701(a)(30) of the Code) for Federal income tax purposes,
the respective assignee Lending Bank shall provide to the Borrower and the
Lender in its capacity as agent the appropriate Internal Revenue Service forms.
The Lender may furnish any information concerning the Borrower, in the
possession of the Lender from time to time, to assignees and participants
(including prospective assignees and participants) and to any Lending Bank,
including, without limitation, the financial statements of each entity
comprising the Company and each Affiliated Entity, any and all documentation
relating to the Loan Documents and the results of the Lender's examination of
the operations, books and records of each entity comprising the Company and each
Affiliated Entity.

            (d) Nothing in this Agreement shall prevent or prohibit any Lending
Bank from pledging its Revolving Loans and Revolving Notes hereunder to a
Federal Reserve Bank in support of borrowings made by such Lending Bank from
such Federal Reserve Bank.

            (e) Notwithstanding anything contained to the contrary, provided
that there shall then exist no Event of Default, the Lender may not assign its
rights and delegate its obligations under this Agreement to an extent greater
than 80% of the Commitment and the Revolving Loans.

            SECTION 10.13. Amendment or Waiver, etc. (a) Neither this Agreement
nor any other Loan Document nor any terms hereof or thereof may be modified,
changed, waived, discharged or terminated unless such modification, change,
waiver, discharge or termination is in writing signed by the Authorized
Representative on behalf of each Credit Party and the Lender, and the same shall
then be effective only for the period and on the conditions and for the specific
instances and purposes specified in such writing provided that no such
modification, change, waiver, discharge or termination shall, without the
consent of the Lender, or, if there is any Lending Bank, each Lending Bank (with
Obligations being directly affected thereby in the case of following clause
(i)), (i) extend the final scheduled maturity of any Revolving Loan or the
Revolving Note, or reduce the rate or extend the time of payment of interest
thereon or Fees or reduce the principal amount thereof (except to the extent
repaid in cash), (ii) release or subordinate any material portion of the
Collateral under any of the Pledge and Security Agreements (except as expressly
provided in the Loan Documents), (iii) amend, modify or waive any provision of
this Section 10.13, (iv) reduce the percentage specified in the definition of


                                     - 53 -
<PAGE>

Required Banks (it being understood that, with the consent of the Required
Banks, additional extensions of credit pursuant to this Agreement may be
included in the determination of the Required Banks on substantially the same
basis as the Commitment) or (v) consent to the assignment or transfer by the
Borrower of any of its rights and obligations under this Agreement; provided
further, that no such modification, change, waiver, discharge or termination
shall (x) increase the commitment of any Lending Bank hereunder over the amount
thereof then in effect without the consent of such Lending Bank, (y) without the
consent of the Lender, in its capacity as agent, amend, modify or waive any
provision of Section 9 or any other provision herein as same relates to the
rights and obligations of the Lender in its capacity as agent or (z) without the
consent of the Required Banks, alter the required application of any prepayments
or repayments (or Commitment reduction) pursuant to Article III (although the
Required Banks may waive, in whole or in part, any such prepayment, repayment or
Commitment reduction).

            SECTION 10.14. 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.

            SECTION 10.15. 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 Agreement, and any
such prohibition in any jurisdiction shall not invalidate such provisions in any
other jurisdiction.

            THIS AGREEMENT CONTAINS A WAIVER OF TRIAL BY JURY. SEE SECTION 10.7
HEREOF.


                                     - 54 -
<PAGE>

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

                              THE MILLS CORPORATION


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


                              BORROWER:

                              THE MILLS LIMITED PARTNERSHIP


                              By: THE MILLS CORPORATION,
                                  its General Partner


                                  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 Manger


                              By: THE MILLS CORPORATION,
                                  its General Partner


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


                                     - 55 -
<PAGE>

                              SUNRISE MILLS (MLP) LIMITED
                                PARTNERSHIP


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


                              By: WESTERN SAWGRASS MILLS CORP.,
                                   its Manager


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


                              LENDER:

                              CS FIRST BOSTON MORTGAGE CAPITAL CORP.


                              By: ______________________________________________
                                  Name:
                                  Title:


                                     - 56 -
<PAGE>

                                   SCHEDULE 1

                                Community Centers
<PAGE>

                                 SCHEDULE 5.1(b)

                            Consolidated Subsidiaries
<PAGE>

                                  SCHEDULE 5.16

                               Real Estate Assets
<PAGE>

                                  SCHEDULE 5.17

                             Partnership Agreements
<PAGE>

                                  SCHEDULE 5.18

                 Borrower's Interests in Subsidiary Partnerships

                                                   Percentage Interest Held By
Name of Partnership    Jurisdiction of Formation   The Mills Limited Partnership
-------------------    -------------------------   -----------------------------
Sunrise Mills (MLP)    District of Columbia        98.0202% Limited Partner
Limited Partnership

Sawgrass Mills         Delaware                    .98% Limited Partner
Phase II Limited 
Partnership
<PAGE>

                                  SCHEDULE 5.19

                                  Existing Debt
<PAGE>

                                  SCHEDULE 6.1

                            Form of Income Statements
<PAGE>

                                  SCHEDULE 6.3

                                    Insurance