RETIREMENT AGREEMENT

EXECUTION VERSION

RETIREMENT AGREEMENT

This Retirement Agreement (“Agreement”) dated as of September 29, 2006 is made by and between Laurence C. Siegel (“Executive”) and The Mills Corporation (the “Company”) (collectively referred to as the “Parties”).

WHEREAS, Executive is an employee and director of the Company and currently serves as the Chief Executive Officer and the Chairman of the Board of Directors of the Company (the “Board”);

WHEREAS, the Company and Executive are parties to an Employment Agreement, dated as of April 1, 2004 (the “Employment Agreement”);

WHEREAS, the Company and Executive are parties to an Indemnification Agreement, dated April 21, 1994 (the “Indemnification Agreement”);

WHEREAS, Executive desires to retire as an employee of the Company to pursue work with Colony and Kan Am on the Meadowlands Project (each as defined herein);

WHEREAS, pursuant to Section 6.9 of the Employment Agreement, Executive and the Company have determined that Executive shall retire as an employee of the Company and resign his employment with the Company as of the Effective Date (as defined in Section 21 below);

WHEREAS, as of the Effective Date, Executive will become the Non-Executive Chairman of the Board, subject to the provisions of Sections 1(c) and 1(d) herein, and shall resign as an officer of any of the Company’s subsidiaries or affiliated entities;

WHEREAS, the Company and Executive desire to provide for consulting services, whereby the Company will benefit from the services of Executive following his retirement as Chief Executive Officer and an employee of the Company upon the Effective Date; and

WHEREAS, the Company and Executive desire to make provision for the payments, accelerated vesting of restricted stock and benefits that Executive will be entitled to receive from the Company in consideration for Executive’s obligations and actions under this Agreement.

NOW THEREFORE, in consideration of the promises and agreements contained herein and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, and intending to be legally bound, the Parties hereby agree as provided below. Capitalized terms used herein and not otherwise defined shall have the meaning given to such terms in the Employment Agreement.

1. Retirement from and Resignation of Employment and Continued Service on the Board.

(a) Executive hereby, effective as of the Effective Date, retires and resigns as Chief Executive Officer and an employee of the Company, subject to the provisions hereof.

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Executive hereby, effective as of the Effective Date, resigns from every position Executive holds as an officer or director of any of the Company’s subsidiaries or affiliated entities.

(b) Executive’s retirement and resignation as Chief Executive Officer and as an employee of the Company, effective as of the Effective Date, shall be pursuant to Section 6.9 of the Employment Agreement, and, except as specifically provided herein, the terms of this Agreement shall supersede in all respects the terms of the Employment Agreement.

(c) Subject to Section 1(d) herein, as of the Effective Date, Executive shall retain his position as a director of the Board, and his title as Chairman of the Board shall become “Non-Executive Chairman of the Board of Directors”, subject to the Company’s certificate of incorporation, by-laws, and applicable law. From the Effective Date to December 31, 2006, Executive shall not be eligible to receive any fees or other compensation that the Company provides to non-employee directors of the Board. On January 1, 2007 and thereafter, while Executive serves as a non-employee director of the Company, Executive shall be eligible to receive the same fees and other compensation that the Company provides to non-employee directors of the Board.

(d) To the extent that the Company or any of its affiliates shall consummate the transaction with Colony Capital Acquisition, LLC (“Colony”) and Kan Am USA Management XXII Limited Partnership (“Kan Am”) pursuant to which Colony would (i) arrange for construction financing for the Meadowlands Xanadu development project (the “Meadowlands Project”) and (ii) make a significant equity infusion into the joint venture for the Meadowlands Project that currently includes Kan Am and the Company (the “Meadowlands Transaction”), then upon consummation of the Meadowlands Transaction, Executive shall resign from his position as Non-Executive Chairman of the Board immediately on the date the Meadowlands Transaction is consummated, and thereafter Executive shall remain a director of the Company, subject to the Company’s certificate of incorporation, by-laws, and applicable law.

2. Press Release. The Company consult with the Executive on the initial press release associated with Executive’s retirement, and will consider, in good faith, any comments that the Executive may have with respect to such initial draft relating to the description of his retirement and resignation contained therein.

3. Consideration. The Company agrees to provide Executive with the following:

(a) Accrued Compensation. Subject to the following sentence, the Company shall pay to the Executive: (i) all of Executive’s accrued but unpaid base salary, as such amount is provided pursuant to Section 4.1 of the Employment Agreement, which is owed to Executive through the Effective Date; (ii) all of Executive’s accrued but unpaid amounts, as provided pursuant to Section 5.2 of the Employment Agreement, which is owed to Executive through the Effective Date; (iii) all of Executive’s accrued but unpaid vacation time as of the Effective Date; and (iv) all unpaid ordinary and reasonable business expenses incurred by Executive in connection with the Company’s business through the Effective Date, including, any travel and lodging business expenses involving the Meadowlands Transaction, in accordance with the Company’s policies in effect as of the Effective Date for senior executives (collectively, the “Accrued Compensation”). The Company shall pay the Accrued Compensation to Executive

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within fourteen (14) calendar days following the date on which the Chief Financial Officer of the Company determines the applicable amount of the Accrued Compensation that is due and owing to Executive; provided, however, that any such determination will be made on or prior to October 31, 2006. For the avoidance of doubt, the Company represents and the Executive agrees that the Executive has never, through the Effective Date, elected to have the Company deposit any compensation, including any portion of the Accrued Compensation, into the “Trust”, as such term is defined in Section 4.6 of the Employment Agreement.

(b) Continuation of Benefits. Executive shall be eligible to elect to receive “COBRA” continuation coverage, to the extent permitted by Section 601 et seq. of the Employee Retirement Income Security Act of 1974, as amended (the “COBRA Coverage”), as of the date that Executive ceases to receive coverage under the Company’s group medical and dental insurance plans due to his retirement as an employee of the Company and his resignation of employment with the Company as of the Effective Date. Subject to Section 3(f), provided that Executive, and if applicable, his spouse and dependents, elect to receive COBRA Coverage, for a two (2) year period following the Effective Date, the Company agrees to reimburse Executive for, or to directly pay to the applicable medical and dental insurance carrier, the cost of any premiums incurred by the Executive to secure COBRA Coverage for himself, his spouse and his dependents under the Company’s group medical and dental insurance plans at the same coverage level applicable to employees of the Company generally.

(c) Legal Fees Reimbursement. The Company agrees to pay Executive’s legal fees and costs (and related disbursements) incurred in connection with Executive’s retirement from and resignation of his employment and consulting arrangement with the Company in the amount of $50,000, which shall be payable as a lump sum on the date that is six months (6) and one day following the Effective Date, or such earlier date as may be permitted by guidance under Section 409A of the Internal Revenue Code of 1986, as amended, (the “Code”).

(d) Severance Payment. The Company agrees to pay Executive as severance pay and, except as otherwise provided herein, in lieu of any further compensation for periods subsequent to the Effective Date, a lump-sum cash amount equal to $2,500,000 (the “Severance Payment”), which shall be payable on the date that is six months and one day following the Effective Date, or such earlier date as may be permitted by guidance under Code Section 409A.

(e) Change in Control Payment. In the event that, on or prior to December 31, 2007, a Change in Control (as defined in Section 3(g) below) shall have occurred, then, subject to Section 3(f), within five (5) calendar days following such Change in Control, the Company shall make a lump-sum cash payment to the Executive in an amount equal to $10,500,000 (the “Change in Control Payment”).

(f) Except as otherwise may be permitted by guidance under Code Section 409A, no Change in Control Payment or other payments referenced herein, including any benefits continuation payments made by the Company pursuant to Section 3(b) (the “Applicable Payments”), will be paid during the six-month period following the Effective Date if the Board determines, in its good faith judgment, that paying such amounts within the six-month period following the Effective Date would cause the Executive to incur an additional tax under Code Section 409A. To the extent the payment of any portion of the Applicable Payments

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is delayed as a result of the previous sentence, on the first day following the end of the six-month period, the Company will pay the Executive a lump-sum cash payment in an amount equal to that portion of the Applicable Payments which would have otherwise been previously paid to the Executive under this Agreement but for the delay set forth in this Section 3(f).

(g) For the purposes of this Agreement, a “Change in Control” of the Company shall be deemed to have occurred as of the first day on which any one of the following conditions shall have been satisfied:

(i) the acquisition of beneficial ownership, as such term is defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”), in a single transaction or series of related transactions (by tender offer or otherwise), of more than fifty percent (50%) of the voting securities of the Company by a single person or entity (other than the Company) or “group” within the meaning of Section 13(d)(3) of the Exchange Act, whether through the acquisition of previously issued and outstanding voting securities, or of voting securities that have not been previously issued, or any combination thereof; or

(ii) there shall be consummated any consolidation, merger, business combination or reorganization involving the Company or the securities of the Company in which holders of voting securities of the Company immediately prior to such consummation own, as a group, immediately after such consummation, voting securities of the Company (or, if the Company does not survive such transaction, voting securities of the corporation surviving such transaction) having less than fifty percent (50%) of the total voting power in an election of directors of the Company (or such other surviving corporation);

(iii) there shall be consummated any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company (on a consolidated basis) to a party which is not a direct or indirect wholly-owned subsidiary of the Company, including, without limitation, any sale, lease, exchange or other transfer of all or substantially all of the assets of the Company (on a consolidated basis) that includes the assets of The Mills Limited Partnership, a Delaware Limited Partnership (the “Operating Partnership”);

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(iv) (A) the individuals who constituted the Company’s Board as of the Effective Date (the “Incumbent Board”) cease for any reason to constitute at least a majority of the directors of the Company; provided, however, that individuals whose election, or whose nomination for election by the Company’s shareholders, was approved by a vote of at least two-thirds (2/3) of the Incumbent Board shall be considered, for purposes of this Agreement, members of the Incumbent Board; and provided, further, that no individual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of either an actual or threatened “election contest” (as described in Rule 14a-11 promulgated under the Exchange Act) (an “Election Contest”) or other actual or threatened solicitation of proxies or consents by or on behalf of a person or entity other than the Company’s Board (a “Proxy Contest”), including by reason of any agreement intended to avoid or settle any Election Contest or Proxy contest; and (B) the conditions giving rise to a Change in Control pursuant to this clause (iv) shall also constitute a Change in Control pursuant to any “change in control” definition in any employment agreements, then in effect, between the Company and the Chief Executive Officer of the Company and the Company and the Chief Financial Officer of the Company; or

(v) (A) the Company (or its successor) no longer serves as the sole general partner of the Operating Partnership other than as a result of (i) the merger of the Operating Partnership with the Company or a subsidiary of the Company, (ii) the redemption of all limited partnership interests in the Operating Partnership by the Operating Partnership or the purchase of all such limited partnership interests by the Company, or (iii) the liquidation, dissolution or winding up of the Operating Partnership; and (B) the conditions giving rise to a Change in Control pursuant to this clause (iv) shall also constitute a Change in Control pursuant to any “change in control” definition in any employment agreements, then in effect, between the Company and the Chief Executive Officer of the Company and the Company and the Chief Financial Officer of the Company.

Notwithstanding anything in this Agreement to the contrary, a Change in Control shall be deemed not to have occurred with respect to Executive if (A) any of the foregoing transactions occurs with any employee benefit plan of the Company, or with any trustee or fiduciary or committee of any employee benefit plan of the Company, any affiliate of the Company, any direct or indirect wholly-owned subsidiary of the Company or any entity owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company prior to the event that would otherwise constitute a Change in Control, or (B) in the case of a transaction or a series of related transactions described in clause (iii) above, the primary use of proceeds is to repay liabilities of the Company or its affiliates, as reasonably determined by the Board.

4. Vesting of Restricted Stock Awards. Notwithstanding any provision in the terms of any incentive compensation plan or agreement or otherwise to the contrary, Executive shall vest in the 10,952 shares of restricted stock that are subject to The Mills Corporation Restricted Stock Agreement dated January 1, 1998 (the “Restricted Stock Agreement”) in the event a Change in Control occurs prior to July 1, 2007. In the event a Change in Control does not occur prior to July 1, 2007, such shares will be immediately forfeited without consideration on July 1, 2007.

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5. Other Amounts Payable to Executive. In addition to the Severance Payment, the Company agrees to pay Executive an amount equal to the difference between (a) $737,500 and (b) the aggregate Per Diem Payments (as defined below) that Executive is paid for his consulting services to the Company under this Agreement, payable in a lump sum on the date that is six months and one day following the Effective Date, or such earlier date as may be permitted by guidance under Code Section 409A.

6. No Other Payments. Executive acknowledges and agrees that he shall have no right to receive any salary, wages, bonuses, accrued vacation, commissions or any other compensation or benefits (other than vested and accrued benefits under the Company’s group pension, tax-qualified profit sharing, 401(k) and welfare benefit plans, which group benefit plans shall not include performance incentive plans, long-term incentive plans, or equity, phantom stock or equity-based compensation plans) other than as specified in this Agreement. Except as provided in this Agreement, neither the Company nor any of its affiliates shall have any other obligations to Executive under the Employment Agreement or otherwise, including but not limited to any payments provided for in Section 6 of the Employment Agreement. Executive acknowledges and agrees that he no longer has any right to (i) any cash-based awards, including but not limited to awards under the Company’s performance incentive plan(s) and long term incentive plan(s), or (ii) equity, phantom stock or equity-based compensation awards that are unvested as of the Effective Date.

7. Amounts Owed By Executive. Executive hereby agrees to pay to the Company any amounts that the Chief Financial Officer of the Company determines is owed to the Company with respect to (i) expense reimbursement amounts that may have been erroneously paid to the Executive, and (ii) any non-business related perquisites that may have been provided to the Executive, including $362,156 for personal use of the Company-chartered aircraft and personal flights erroneously paid by the Company. Within fourteen (14) days of the Effective Date, Executive will pay to the Company the $362,156 for personal use of the Company-chartered aircraft and personal flights erroneously paid by the Company. With respect to each other amount that is owed to the Company, Executive shall pay such amount to the Company within fourteen (14) calendar days following the date on which the Chief Financial Officer of the Company notifies Executive in writing of such amount; provided, however, that any such determination will be made on or prior to October 31, 2006.

8. Directors’ and Officers’ Liability Insurance Policy. Notwithstanding anything to the contra