EXHIBIT 10(e)


























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                           NEGOTIABLE PROMISSORY NOTE


                                                              New York, New York
$2,000,000                                                     February 28, 1997


                  FOR VALUE  RECEIVED,  the  undersigned,  DVL, INC., a Delaware
corporation,  with an  address  at 24  River  Road,  Bogota,  New  Jersey  07603
(hereinafter  the  "Borrower"),  hereby  unconditionally  PROMISES TO PAY to the
order of RESOURCES PENSION SHARES 5, L.P., a Delaware limited partnership,  with
an address c/o  Wexford  Management  LLC,  411 West  Putnam  Avenue,  Greenwich,
Connecticut  06830 (the "Lender"),  and its successors or assigns (together with
the Lender, the "Holder"), the principal sum of TWO MILLION DOLLARS ($2,000,000)
(the  "Loan"),  together  with  interest  from and after the date  hereof on the
principal  balance from time to time  outstanding from and after the date hereof
as provided herein.

                  This Negotiable  Promissory Note (this  "Promissory  Note") is
made in accordance with the Secured Loan Agreement dated as of February 27, 1997
between  the  Borrower  and the  Lender  (the "Loan  Agreement").  The Holder is
entitled to the benefits and security of, and the rights and remedies under, the
Loan  Agreement  and the other Loan  Documents.  Capitalized  terms used but not
defined  herein  shall have the  meanings  ascribed  to such terms on Schedule 1
hereto or, if not  defined  thereon,  then as such terms are defined in the Loan
Agreement.

                  The  principal  amount  of  the  Loan,  and  accrued  interest
thereon,  shall be payable  in monthly  installments  in the  amounts  specified
herein through  (unless sooner paid by prepayment,  acceleration or otherwise as
provided in the Loan Agreement)  February 27, 2000 (the "Maturity Date"). On the
Maturity  Date,  the entire  outstanding  principal  balance of, and accrued and
unpaid  interest  on,  this  Promissory  Note and any other  obligations  of the
Borrower  under  this  Promissory  Note,  the Loan  Agreement  or the other Loan
Documents shall be due and payable in full.

                  Interest  on  the  outstanding   principal   balance  of  this
Promissory  Note shall accrue at twelve  percent (12%) per annum (the  "Interest
Rate"), based on a 360-day year, for the actual number of days elapsed. From and
after the occurrence of an Event of Default,  the outstanding  principal balance
of this Promissory Note shall bear interest at the Interest Rate plus additional
interest at the rate five percent  (5%) per annum (the  "Default  Rate").  In no
event shall the interest or other amounts  payable  pursuant to this  Promissory
Note exceed the Maximum Lawful Rate, as provided in the Loan Agreement.

                  On March 10,  1997,  the  Borrower  shall pay to the Holder an
amount equal to all unpaid interest accrued on this Promissory Note. Thereafter,
the Borrower shall pay to the Holder,  on or before the tenth (10th) day of each
calendar month, commencing on April 10, 1997 (each, a "Monthly Payment Date") an
amount  equal to the  greater  of (i) 100% of Cash  Flow  during  the  preceding
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calendar  month and (ii) an amount equal to all  interest  accrued and unpaid on
this Promissory Note. The Borrower shall make each payment under this Promissory
Note not later  than  11:00  A.M.  (New  York City  time) on the day when due in
lawful money of the United States of America in immediately  available  funds to
the Holder's depositary bank, as designated by the Holder by Notice from time to
time,  for deposit in the Holder's  depositary  account or, if such day is not a
Business Day, then the subject due date shall be extended to the next succeeding
full Business Day and interest thereon shall be payable during such extension.

                  Prior to the  occurrence of an Event of Default under the Loan
Agreement, all payments by the Borrower to the Holder under this Promissory Note
shall be applied in the following priority and order:

                  (i)    to  accrued  and  unpaid  interest  on the  outstanding
                         principal balance of this Promissory Note;

                  (ii)   to then due and payable  fees and  expenses  payable to
                         the Holder under any of the Loan Documents;

                  (iii)  to the  then  outstanding  principal  balance  of  this
                         Promissory Note.

                  From and after the occurrence of an Event of Default under the
Loan  Agreement,  the  Holder is  authorized  to, and at its  option  may,  make
advances on behalf of the Borrower for payment of all fees,  expenses,  charges,
costs,  principal  and interest  incurred by the  Borrower  under the other Loan
Documents  when  and as the  Borrower  fails  to pay any  such  amounts.  At the
Holder's option and to the extent  permitted by law, any advances so made by the
Holder shall  automatically be added to the principal balance of this Promissory
Note and  shall  constitute  a portion  of the  Indebtedness  evidenced  by this
Promissory  Note for all purposes.  From and after the occurrence of an Event of
Default, the Holder shall apply all payments by the Borrower to the Holder under
this Promissory Note as the Holder may determine.

                  The  Borrower  may,  at its  option,  prepay  the  outstanding
principal  balance of, and accrued and unpaid interest on, this Promissory Note,
in whole or in part,  at any  time,  provided  that (i) the  amount  of any such
prepayment  equals or exceeds  $325,000;  (ii) any such  prepayment is made on a
Business Day;  (iii) no default,  event of default or breach has occurred  under
any of the Loan  Documents;  (iv) the  Borrower  shall  have given the Holder at
least  thirty (30) days' prior Notice of the  Borrower's  intention to make such
prepayment; and (v) such prepayment is accompanied by payments of all other sums
due and  owing  under  the  Loan  Documents  on  such  date,  including  a Yield
Maintenance Fee.

                  Upon any prepayment of the outstanding  principal  balance of,
and accrued and unpaid interest on, this  Promissory  Note, in whole or in part,
the Borrower shall, pay to the Holder a Yield Maintenance Fee if such prepayment
is made during the first two years of the term of this  Promissory  Note.  In no
event shall the Yield Maintenance Fee be less than zero. There shall be no Yield
Maintenance  Fee if this  Promissory Note is prepaid during the third (3rd) year
of the term of this Promissory Note.
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                  The Holder  shall  notify the  Borrower  of the amount and the
basis of determination of the Yield  Maintenance Fee which shall be conclusively
determined  by the  Holder  absent  manifest  error.  The  Holder  shall  not be
obligated  actually to reinvest  any amount  prepaid  hereunder in any such U.S.
Government  Treasury  obligations  as a  condition  precedent  to  the  Holder's
receiving the Yield Maintenance Fee.

                  In the event that any of the Properties or any interest in any
of the  Leases  has  been  transferred,  sold or  otherwise  disposed  of by the
applicable  Partnership in a transaction  pursuant to which (i) such a transfer,
sale or other  disposition does not constitute or give rise to (with the passage
of time or the giving of notice or both) a default or event of default under any
of the Loan Documents, (ii) the Borrower gives the Holder at least 60 days prior
Notice of any such transfer, sale or other disposition, (iii) the Borrower shall
have paid to the Holder an amount  equal to the  greater  of: (A) the DI Payment
(as  defined  below) for such  Property  and (B) the  Minimum  Release  Price in
respect of such Property plus the appropriate Yield Maintenance Fee in effect at
the time of such prepayment,  and (iv) such Property is actually sold to a third
party pursuant to an arm's length sale transaction, then the Borrower shall make
a prepayment of the  outstanding  unpaid  principal  balance of, and accrued and
unpaid  interest on, this  Promissory  Note,  in whole or in part,  in an amount
equal to the greater of:

                  (i)    the  gross  sale  price  received  in  respect  of such
                         transfer,   sale  or   other   disposition,   less  (A)
                         reasonable and customary  transaction  fees  (including
                         attorneys'  fees not to exceed a maximum  of  $12,000),
                         (B) a fee  payable  to the  Borrower  not to exceed two
                         percent  (2%) of such  gross sale price and (C) any and
                         all   amounts  of  such   gross  sale  price   actually
                         distributed to the limited  partners of the Partnership
                         which  transferred,  sold or otherwise disposed of such
                         Property,  or interest in any such Lease thereon, as an
                         inducement to consent to such  transfer,  sale or other
                         disposition; and

                  (ii)   the Minimum  Release  Price for such Property set forth
                         in  Schedule  2  hereto  plus  the  appropriate   Yield
                         Maintenance   Fee  in   effect  at  the  time  of  such
                         prepayment.

In the  event  that DVL  shall  make a  prepayment  to the  Lender  in an amount
determined in accordance with clause (i) above (a "DI Payment"),  the DI Payment
shall be allocated to  principal,  interest  and Yield  Maintenance  Fee in such
proportion as will result in the aggregate  amount of such  principal,  together
with accrued and unpaid interest thereon,  and the Yield Maintenance Fee payable
with respect thereto at the time of such prepayment to equal such DI Payment. In
the event that Milford Property has been transferred, sold or otherwise disposed
of by or on behalf of Milford Associates in accordance with the foregoing within
the  six  month  period  immediately   following  the  date  hereof,  the  Yield
Maintenance  Fee applicable to resulting  prepayment on the Loan by the Borrower
shall be $25,000.

                  Notwithstanding any provisions herein or in the Loan Agreement
to the contrary,  in the event this  Promissory Note is declared due and payable
by the Holder by reason of a default  or event of default  under any of the Loan
Documents,  any repayment  shall be deemed to be a voluntary  prepayment of this
Promissory Note and the Borrower shall be required to pay the appropriate  Yield
Maintenance Fee which is in effect at the time such declaration is made.
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                  THE BORROWER HEREBY EXPRESSLY WAIVES  PRESENTMENT FOR PAYMENT,
DEMAND, PROTEST, NOTICE OF PROTEST, NOTICE OF DISHONOR,  NOTICE OF OCCURRENCE OF
AN EVENT OF DEFAULT, NOTICE OF ACCELERATION AND NOTICE OF NON-PAYMENT HEREOF.

                  THE BORROWER HEREBY VOLUNTARILY AND KNOWINGLY WAIVES THE RIGHT
TO A TRIAL BY JURY IN ANY ACTION OR  PROCEEDING  TO ENFORCE OR DEFEND ANY RIGHTS
UNDER THIS PROMISSORY NOTE, THE LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS.

                  This Promissory Note has been executed, delivered and accepted
at New York, New York and shall be  interpreted,  governed by, and construed and
enforced in  accordance  with,  the laws of the State of New York  applicable to
contracts  made and performed in such state,  without  regard to the  principles
thereof regarding conflict of laws, and any applicable laws of the United States
of America.

                  This Promissory Note may not be changed orally,  but only by a
writing  signed by the party  against whom  enforcement  of any waiver,  change,
modification or discharge is sought.

                  IN WITNESS WHEREOF,  the Borrower has executed this Promissory
Note on February 27, 1997 intending that it be effective on February 28, 1997.

ATTEST:                                     DVL, INC.


/s/Joyce K. Helman                            By:/s/Robert W. LoSchiavo
------------------                               ----------------------
Joyce K. Helman                             Name:   Robert W. LoSchiavo  
                                            Title:  Vice President
<PAGE>
                                   SCHEDULE 1

                                   DEFINITIONS


                  "Affiliate"  means, with respect to any Person, (i) each other
         Person that directly or  indirectly  owns or holds five percent (5%) or
         more of any  class of  voting  stock  or  partnership  or other  voting
         interests  of such Person or a  Subsidiary  of such Person or (ii) each
         Person  of  which  five  percent  (5%) or more of the  voting  stock or
         partnership  or  other  voting  interests  is  directly  or  indirectly
         beneficially  owned  or held by such  Person  or a  Subsidiary  of such
         Person,  (iii) each Person that,  directly or indirectly through one or
         more  intermediaries,  controls,  is  controlled  by or is under common
         control  with such Person or any  Affiliate of such Person or (iv) each
         of such Person's officers,  directors,  employees,  joint venturers and
         partners.  For the purpose of this  definition,  "control"  of a Person
         shall mean the  possession,  directly  or  indirectly,  of the power to
         direct or cause the direction of its  management  or policies,  whether
         through the ownership of voting securities, partnership or other voting
         interests by contract or otherwise.

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

                  "Cash Flow" means, for any period, the collective reference to
         the  sum  of  (1)  the  gross  proceeds  generated  by  the  Collateral
         (including, without limitation, all payments of interest and principal,
         all proceeds  from the  refinancing  of any notes and mortgages and all
         proceeds  of any payoff of, or sale of, or with  respect to, any of the
         Collateral)  plus (2)  from and  after  the  occurrence  of an Event of
         Default,  any and all cash and other proceeds  received by the Borrower
         and/or  the  Holder  on  account  of the  Collateral  or from the sale,
         collection or other realization of or upon the Collateral.

                  "Collateral" means:

                         a.  the  following  described  property,   whether  now
                  existing or hereafter  arising,  in which the Borrower now has
                  or may hereafter acquire any interest:

                         (1) any and all rights and interests of the Borrower in
                         any Leases or the right to receive  payments  therefrom
                         pursuant to any  Collateral  Assignments  of Leases and
                         Rent or otherwise;

                         (2) all  Collateral  Notes,  together  with any and all
                         other forms of obligations of the  Partnerships  to the
                         Borrower in respect of the  Indebtedness  evidenced  by
                         the Collateral  Notes, any and all rights and interests
                         of  the   Borrower   to  receive   payments   from  the
                         Partnerships in connection with such Indebtedness,  any
                         and all other  rights  and  interests  of the  Borrower
                         under any  agreements or  Instruments  relating to such
                         indebtedness;
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                         (3)  all  other  property,  instruments  or  documents,
                         evidencing,  securing  or  guaranteeing  payment of the
                         indebtedness  evidenced  and secured by the  Collateral
                         Notes,  including,  but not limited to, the  Collateral
                         Mortgages  and  Collateral  Assignments  of Leases  and
                         Rents,   and  each  title   policy,   title  binder  or
                         commitment  to  issue  title  insurance   insuring  the
                         Collateral   Mortgages  and  the  lien  thereof,   each
                         commitment, if any, now or hereafter,  issued by a long
                         term or  interim  lender in which the  Borrower  has an
                         interest and pursuant to the  provisions  of which such
                         long term or  interim  lender has  committed  itself to
                         make an interim  or long term loan out of the  proceeds
                         of which the indebtedness  evidenced and secured by the
                         Collateral  Mortgages will be paid in whole or in part,
                         each policy of hazard  insurance,  rental  interruption
                         insurance,  boiler  insurance,  liability  insurance or
                         other forms of insurance  now or hereafter  issued with
                         respect to the premises and improvements  encumbered by
                         the Collateral  Mortgage and the proceeds thereof,  and
                         all  deposit  accounts,  credits,  moneys,  property or
                         other   security  of  any  nature   whatsoever  now  or
                         hereafter  available to the Borrower for application in
                         reduction,  in whole or in  part,  of the  indebtedness
                         evidenced and secured by the Collateral Mortgages; and

                         (4) any and all other Collateral Loan Documents;

                         b. any other property which now or hereafter  serves as
                  security for the Obligations;

                         c. any other  property  of the  Borrower of any kind or
                  nature  coming  into  the  Holder's  possession,   custody  or
                  control; and

                         d. any Proceeds (as such term is defined under the UCC)
                  of the foregoing.

                  "Collateral  Assignment of Leases and Rents" means each of the
         assignments of leases and/or rents and any  modifications,  amendments,
         and supplements  thereto  contained in any  agreements,  instruments or
         other documents described in Schedule 3 annexed hereto.

                  "Collateral  Loan Documents"  means the Collateral  Notes, the
         Collateral  Mortgages and any and all Collateral  Assignments of Leases
         and  Rents and any and all  documents,  instruments,  assignments,  and
         agreements  executed by any obligor  under any of the  Collateral  Loan
         Documents in connection therewith.

                  "Collateral  Mortgage"  means  each of the  mortgages  and any
         modifications,  amendments  and  supplements  thereto  contained in any
         agreements,  instruments  or other  documents  described  on Schedule 3
         annexed hereto.
<PAGE>
                  "Collateral  Note" means each of the  promissory  notes of the
         Partnerships and any modifications,  amendments and supplements thereto
         contained in any agreements,  instruments or other documents  described
         on Schedule 3 annexed  hereto,  evidencing an  Indebtedness of any kind
         from such  Partnership to the Borrower or its  Affiliates  secured by a
         Collateral Mortgage.

                  "DI  Payment"  shall have the  meaning  ascribed  to it in the
         Promissory Note.

                  "Estoppel  Certificate  and  Agreement  of  Lessee"  means  an
         Estoppel Certificate and Agreement of Lessee,  executed on or about the
         date hereof by each of the Tenants  under the  Leases,  the  respective
         Partnerships and the Borrower.

                  "Guaranteed   Indebtedness"  means,  as  to  any  Person,  the
         obligation  of  such  Person  guaranteeing  any  Indebtedness,   lease,
         dividend,  or other  obligation  ("primary  obligations")  of any other
         Person (the "primary  obligor") in any manner (or  otherwise  providing
         any other  assurance  to or on behalf of the primary  obligor that such
         primary obligations will be paid,  discharged or performed)  including,
         without  limitation,  any obligation or arrangement of such Person, (i)
         to purchase or repurchase any such primary obligation,  (ii) to advance
         or supply  funds (A) for the  purchase  or payment of any such  primary
         obligation or (B) to maintain  working capital or equity capital of the
         primary  obligor or  otherwise to maintain the net worth or solvency or
         any balance sheet condition 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,  or  (iv) to
         indemnify the owner of such primary  obligation against loss in respect
         thereof.

                  "Indebtedness"  of any Person  means (i) all  indebtedness  of
         such Person for borrowed  money or for the deferred  purchase  price of
         property or services (including, without limitation,  reimbursement and
         all other  obligations with respect to surety bonds,  letters of credit
         and bankers'  acceptances,  whether or not matured,  but not  including
         obligations  to trade  creditors  incurred  in the  ordinary  course of
         business),  (ii) all obligations evidenced by notes, bonds,  debentures
         or similar instruments, (iii) all indebtedness created or arising under
         any conditional  sale or other title retention  agreements with respect
         to  property  acquired  by such  Person  (even  though  the  rights and
         remedies of the seller or lender  under such  agreement in the event of
         default are limited to repossession or sale of such property), (iv) all
         obligations  of any Person under any lease of property  (whether  real,
         personal or mixed) by such Person as lessee that,  in  accordance  with
         generally  accepted  accounting  principles  in the  United  States  of
         America  in  effect  from time to time,  as  consistently  applied  and
         maintained throughout the period indicated, either would be required to
         be  classified  and accounted for as a capital lease on a balance sheet
         of such Person or otherwise disclosed as such in a note to such balance
         sheet,  (v) all  Guaranteed  Indebtedness,  and (vi)  all  Indebtedness
         referred to in clause (i),  (ii),  (iii),  (iv) or (v) above secured by
         (or for which the holder of such  Indebtedness  has an existing  right,
         contingent or otherwise, to be secured by) any Lien upon or in property
         (including, without limitation,  accounts and contract rights) owned by
         such Person,  even though such Person has not assumed or become  liable
         for the payment of such Indebtedness.
<PAGE>
                  "Instrument" shall have the meaning given such term in Section
         9-105 of the UCC.

                  "Lease"  means  each  of the  lease  and  sublease  agreements
         between the respective  Partnerships  and any Tenant  including but not
         limited to those Leases set forth on Schedule 3 annexed hereto.

                  "Lender   Collateral    Assignment"   means   the   Collateral
         Assignments  by and between  the  Borrower  and the Lender  pursuant to
         which the Borrower assigns the Collateral to the Lender as security for
         the Loan.

                  "Lender  Loan  Document"  means  the  Loan   Agreement,   this
         Promissory  Note,  the  Security   Agreement,   the  Lender  Collateral
         Assignment(s),  the Lockbox  Agreement,  the Estoppel  Certificates and
         Agreements   of   Lessee,   the   Subordination   Agreements   and  the
         Lender/Partnership Agreements.

                  "Lender/Partnership  Agreements"  means those agreements dated
         on or about the date  hereof  between  the Lender and the  Partnerships
         executed in connection with the Loan.

                  "Lien"   means   any   mortgage,   deed  of   trust,   pledge,
         hypothecation,   assignment,  deposit  arrangement,  encumbrance,  lien
         (statutory  or  other),  or  preference,  priority  or  other  security
         agreement or preferential  arrangement of any kind or nature whatsoever
         (including,  without  limitation,  any conditional  sale or other title
         retention agreement,  any financing lease having substantially the same
         economic  effect  as any of the  foregoing)  and the  filing  with  the
         consent  of the  debtor  of any  financing  statement  under the UCC or
         comparable law of any jurisdiction.

                  "Loan  Documents"  means the Loan  Agreement,  this Promissory
         Note, the Security Agreement, the Lender Collateral Assignment(s),  the
         Lockbox Agreement,  the Estoppel Certificates and Agreements of Lessee,
         the Subordination Agreements,  the Lender/Partnership  Agreements,  the
         Collateral and all other instruments and documents  contemplated hereby
         and thereby.

                  "Lockbox  Agreement"  means the Lockbox  Agreement dated on or
         about the date hereof among, inter alia, the Borrower and the Lender.

                  "Minimum  Release  Prices" means,  with respect to each of the
         Properties,  the amount set forth opposite the name of such Property on
         Schedule 2.

                  "money"  shall  have the  meaning  given  such term in Section
         1-201 of the UCC.

                  "Notice" means, whenever it is provided herein that any notice
         shall or may be given to or served  upon any of the parties by another,
         each such notice  shall be in writing and shall be deemed given only if
         (i)  delivered  in  person,  or (ii) sent by  Federal  Express or other
         nationally  recognized  overnight courier service, and addressed to the
         parties at the addresses set forth hereinabove or at such other address
         as may be  substituted  by notice  given as herein  provided,  and such
         notice shall be deemed effective upon receipt.
<PAGE>
                  "Obligations"   means   and   includes   all   loans,   debts,
         liabilities,   obligations,   charges,   fees,  interest,   guarantees,
         covenants  and duties owing by the Borrower to the Holder,  arising out
         of or in  connection  with  the  Loan,  of every  kind and  description
         (whether or not evidenced by any note or other  Instrument  and whether
         or not for the  payment  of money),  direct or  indirect,  absolute  or
         contingent,  due or to become due, now  existing or hereafter  arising,
         including,  without limitation, any and all interest, fees, charges, or
         other costs that the Borrower is required to pay to the Holder by law.

                  "Partnerships"  means the four (4) limited partnerships listed
         below:

                  Hoosick Falls Associates,  a Pennsylvania  Limited Partnership
         Salisbury Associates, a Pennsylvania Limited Partnership

                  Milford  Associates,  a New Jersey  Limited  Partnership  Fort
         Edward Associates, a New Jersey Limited Partnership

                  "person"  or  "Person"  means  any  individual,   partnership,
         corporation, business trust, joint stock company, trust, unincorporated
         association,  joint  venture,  Government  Authority or other entity of
         whatever nature.

                  "Properties" mean the following four (4) properties:

                   o the  property  owned by Fort Edward  Associates  located in
                   Fort   Edward,   Washington   County,   New  York,   as  more
                   particularly  described in and encumbered by Collateral  Loan
                   Documents (the "Fort Edward Property");

                   o the property owned by Hoosick Falls  Associates  located in
                   Hoosick  Falls,   Rennsalaer   County,   New  York,  as  more
                   particularly  described in and encumbered by Collateral  Loan
                   Documents (the "Hoosick Falls Property");

                   o  the  property  owned  by  Milford  Associates  located  in
                   Milford,  Pike  County,  Pennsylvania,  as more  particularly
                   described in and encumbered by Collateral Loan Documents (the
                   "Milford Property"); and

                   o the  property  owned by  Salisbury  Associates  located  in
                   Salisbury,  Wicomico County,  Maryland,  as more particularly
                   described in and encumbered by Collateral Loan Documents (the
                   "Salisbury Property").

                  "Security  Agreement"  means that certain  security  agreement
         dated on or about the date hereof between the Borrower and the Lender.

                  "Subordination Agreements" means the collective reference to
         the  Subordination  Agreements dated on or about the date hereof by and
         between the Lender and each of NPM Capital LLC and NPO Management  LLC,
         and acknowledged,  agreed and consented to by the Borrower,  concerning
         the Collateral.
<PAGE>
                   "Subsidiary"  means,  with  respect  to any  Person,  (a) any
         corporation  in which such Person  and/or one or more  Subsidiaries  of
         such Person,  directly or indirectly,  owns legally or  beneficially an
         aggregate  of  more  than  fifty  percent  (50%)  of any  class  of the
         outstanding securities having ordinary voting power to elect a majority
         of the board of directors of such corporation (irrespective of whether,
         at  the  time,  securities  of any  other  class  or  classes  of  such
         corporation  shall  have or might  have  voting  power by reason of the
         happening of any contingency) or (b) any partnership or other Person in
         which such Person and/or one or more  Subsidiaries of such Person shall
         have an  interest  (whether in the form of voting or  participation  in
         profits or capital  contribution)  of more than fifty  percent (50%) or
         (c) any  Person  of which  such  Person  has the right to  control  the
         operating or financial decisions of such Person.

                   "Tenant" means any tenant under any of the Leases, including,
         without limitation, the Grand Union Company, Camellia Food Stores, Inc.
         and any sublessees thereof, and any of their respective assignees.

                   "Treasury  Rate"  means  the  rate  per  annum   conclusively
         determined  by  the  Holder  (absent  manifest  error)  as of  (i)  the
         acceleration  date, if the Loan shall be accelerated in accordance with
         any  provision  of the  Lender  Loan  Documents,  or (ii)  the  date of
         prepayment, if the Loan is prepaid in accordance with the provisions of
         the Lender Loan Documents,  as the case may be. The Treasury Rate shall
         be the  Treasury  Constant  Maturity  yields  reported  in the  Federal
         Reserve  Statistical  Release  H.15  Selected  Interest  Rates (or such
         suitable replacement  publication as the Holder may reasonably select),
         on the third (3) Business Day preceding such  acceleration date or date
         of prepayment, as the case may be. The Treasury Rate shall be the yield
         implied by the Treasury Constant Maturity series for a U.S.  Government
         Treasury  obligation  having a term ending on the Maturity  Date,  such
         yield  being  determined  by linear  interpolation  between  the yields
         reported in Release H.15 (or such replacement publication).

                   "UCC" means the Uniform  Commercial Code of the  jurisdiction
         with  respect  to which  such term is used,  as an effect  from time to
         time.

                   "Yield  Maintenance Fee" means and is the difference  between
         (i) the  amount of  interest  which  would be earned on the Loan at the
         Interest Rate during the Yield  Maintenance Term and (ii) the amount of
         interest  which  would be  earned  on the  Loan at a rate  equal to one
         percent above the Treasury Rate during the Yield  Maintenance  Term, as
         calculated as follows:

                    (a) The  difference  between the Interest  Rate and the rate
                    equal  to one  percent  above  the  Treasury  Rate  shall be
                    multiplied by the amount of principal  indebtedness due upon
                    acceleration or by the amount of the prepayment, as the case
                    may be;

                    (b) The product thus obtained will be divided by twelve (12)
                    to determine the monthly excess of earned interest; and
<PAGE>
                    (c) The monthly  excess of earned  interest  (determined  in
                    subsection  (b) above) will be  multiplied by a factor which
                    is equal to the  present  value  of a series  of one  dollar
                    ($1.00)   payments,   such  present  value  based  upon  the
                    following components:

                         (i) An interest rate equal to one-twelfth (1/12) of the
                         Treasury Rate; and

                         (ii) The number of  payments  or  periods  equal to the
                         number of  months  remaining  in the Yield  Maintenance
                         Term, but determined as if there had been no prepayment
                         or acceleration,  as the case may be, rounded up to the
                         nearest whole number.

                  "Yield  Maintenance  Term" means the period  beginning  on the
         acceleration  date or the date of  prepayment,  as the case may be, and
         ending on the Maturity Date.

The words  "herein,"  "hereof" and "hereunder" and other words of similar import
refer to this Promissory Note as a whole, including the Schedules hereto, as the
same may from time to time be amended, modified or supplemented,  and not to any
particular  section,  subsection or clause  contained in this  Promissory  Note.
Wherever from the context it appears appropriate, each term stated in either the
singular or plural  shall  include the  singular  and the plural,  and  pronouns
stated in the masculine,  feminine or neuter gender shall include the masculine,
the feminine and the neuter.
<PAGE>



                                   SCHEDULE 2
                             Minimum Release Prices

                  With respect to each of the  Properties,  the amount set forth
opposite the name of such Property shall be the "Minimum Release Price" for such
Property:

                  Fort Edward Property:              $850,000
                  Hoosick Falls Property:            $500,000
                  Milford Property:                  $850,000
                  Salisbury Property:                $325,000

The terms,  Milford Property,  Fort Edward Property,  Hoosick Falls Property and
Salisbury Property, are defined under the term "Properties".
<PAGE>
                             SCHEDULE 3, page 1 of 5


FORT EDWARD ASSOCIATES PROPERTY

Collateral Loan Documents:

Note  dated  March 31,  1983 in the  amount of  $1,152,000  made by Fort  Edward
Associates, as maker, payable to Kenbee Management-New York, Inc., as holder.

Second  Mortgage  dated  March 31,  1983  between  Fort  Edward  Associates,  as
mortgagor,  and Kenbee  Management-New  York,  Inc.,  as mortgagee  covering the
Property as more particularly  described  therein,  recorded on April 6, 1983 in
the records of Washington County, New York at Book 381, page 895.

First  Assignment  of Leases and Rents dated March 31, 1983  between Fort Edward
Associates,  as  assignor,  and Kenbee  Management-New  York,  Inc.  and Del-Val
Financial  Corporation (n/k/a DVL, Inc.), as assignees,  recorded in the records
of Washington County, New York at Book 494, page 108.

Assignment of Note, Mortgage and Assignment of Rents dated as of October 6, 1988
between Kenbee  Management-New  York, Inc., as assignor,  and Del-Val  Financial
Corporation (n/k/a DVL, Inc.), as assignee,  recorded on October 28, 1988 in the
records of Washington County, New York at Book 534, page 136.

Mortgage Modification  Agreement and Collateral Assignment of Leases dated as of
October 6, 1988 between  Kenbee  Management-New  York,  Inc.,  as assignor,  and
Del-Val  Financial  Corporation  (n/k/a DVL,  Inc.),  as  assignee,  recorded on
October 28, 1988 in the records of Washington County, New York at Book 534, page
140.

Modification  Agreement  dated as of  January 1, 1992  among  Del-Val  Financial
Corporation  (n/k/a DVL,  Inc.),  Fort Edward  Associates and Textron  Financial
Corporation,  recorded on July 11, 1994 in the records of Washington County, New
York at Book 844, page 217.


Lease:

Lease dated March 30, 1983  between Fort Edward  Associates  and The Grand Union
Company.
<PAGE>



                             SCHEDULE 3, page 2 of 5

HOOSICK FALLS ASSOCIATES PROPERTY


Collateral Loan Documents:

Note dated  November 12, 1981 in the amount of $1,045,000  made by Hoosick Falls
Associates, as maker, payable to Kenbee Management New York, Inc., as holder.

Mortgage  dated as of November 12, 1981 between  Hoosick  Falls  Associates,  as
mortgagor,  and Kenbee  Management-New  York,  Inc., as mortgagee,  covering the
Property as more particularly  described therein,  recorded on November 20, 1981
in the records of Rennsalaer County, New York at Liber 1184, page 534.

Assignment  of Lessor's  Interest in Lease dated as of November 12, 1981 between
Hoosick Falls Associates,  as assignor, and Kenbee Management-New York, Inc., as
assignee,  recorded on March 15, 1982 in the records of Rennsalaer  County,  New
York at Liber 1343, page 305.

Assignment  of Note  and  Mortgage  dated as of March  1,  1987  between  Kenbee
Management-New York, Inc., as assignor, and Del-Val Financial Corporation (n/k/a
DVL,  Inc.),  as  assignee,  recorded  on  October  31,  1988 in the  records of
Rennsalaer County, New York at Liber 1617, page 200.

Note and Mortgage  Modification  Agreement and  Collateral  Assignment of Leases
dated as of March 1, 1987 between Hoosick Falls Associates and Del-Val Financial
Corporation  (n/k/a DVL,  Inc.),  recorded on October 31, 1988 in the records of
Rennsalaer County, New York at Liber 1617, page 185.

Modification  Agreement  dated as of  January 1, 1992  among  Del-Val  Financial
Corporation  (n/k/a DVL, Inc.),  Hoosick Falls Associates and Textron  Financial
Corporation,  recorded on July 13, 1994 in the records of Rennsalaer County, New
York at Liber 2504, page 0295.


Lease:

Lease dated  November 10, 1981 between  Hoosick Falls  Associates  and The Grand
Union Company.
<PAGE>



                             SCHEDULE 3, page 3 of 5


MILFORD ASSOCIATES PROPERTY


Collateral Loan Documents:

Note  dated  January  31,  1983 in the  amount  of  $1,368,000  made by  Milford
Associates, as maker, payable to Kenbee Management-New York, Inc., as holder.

Mortgage dated as of January 31, 1983 between Milford Associates,  as mortgagor,
and Kenbee  Management-New  York,  Inc., as mortgagee,  covering the Property as
more particularly described therein, recorded on February 3, 1983 in the records
of Pike County, Pennsylvania at Book 368, page 204.

First  Assignment  of Leases and Rents  dated as of  January  31,  1983  between
Milford  Associates,  as assignor,  and Kenbee  Management-New  York,  Inc.,  as
assignee,  recorded  on  February  3,  1983  in  the  records  of  Pike  County,
Pennsylvania at Book 852, page 15.

First Collateral Assignment of Sewage Lease dated as of January 31, 1983 between
Milford  Associates,  as assignor,  and Kenbee  Management-New  York,  Inc.,  as
assignee,  recorded  on  February  3,  1983  in  the  records  of  Pike  County,
Pennsylvania at Book 856, page 79.

Assignment of Note,  Mortgage,  Assignment of Rents and Sewage Lease dated as of
October 6, 1988 between  Kenbee  Management-New  York,  Inc.,  as assignor,  and
Del-Val  Financial  Corporation  (n/k/a DVL,  Inc.),  as  assignee,  recorded on
November 1, 1988 in the records of Pike County,  Pennsylvania  at Book 784, page
271.

Mortgage Modification  Agreement and Collateral Assignment of Leases dated as of
October 6, 1988 between  Kenbee  Management-New  York,  Inc.,  as assignor,  and
Mortgage Financing Partners (predecessor-in-interest to DVL, Inc.), as assignee,
recorded on November 1, 1988 in the records of Pike County, Pennsylvania at Book
784, page 279.
<PAGE>



                             SCHEDULE 3, page 4 of 5


Note  Modification  Agreement  dated  as of  January  1,  1990  between  Milford
Associates,  as maker, and Mortgage  Financing  Corporation  (assignee of Kenbee
Management-New York, Inc. and predecessor-in-interest to DVL, Inc.), as holder.

Modification  Agreement  dated as of January 1, 1992  among DVL,  Inc.,  Milford
Associates and Textron Financial  Corporation,  recorded on July 11, 1994 in the
records of Pike County, Pennsylvania at Book 921, page 089.


Lease:

Lease dated  January 31, 1983  between  Milford  Associates  and The Grand Union
Company.




SALISBURY ASSOCIATES PROPERTY

Collateral Loan Documents:


Note  dated  March  30,  1982  in the  amount  of  $700,000  made  by  Salisbury
Associates, as maker, payable to Kenbee Management-New York, Inc., as holder.

Deed of Trust dated March 30, 1982 between Salisbury Associates, as grantor, and
John P.  Douds and James N.  Wright,  Jr.,  Trustees  for the  benefit of Kenbee
Management-New  York, Inc. recorded in the records of Wicomico County,  Maryland
on April 6, 1982 in Liber 972, page 110.

Memorandum  of  Assignment  of Note and Deed of Trust  dated as of June 30, 1982
between  Kenbee  Management-New  York,  Inc.,  as  assignor,  and the  Newspaper
Statistics,  Inc.  dated January 1, 1973, as restated as of January 1, 1976, and
as further amended, and the Newspaper  Statistics,  Inc. Defined Benefit Pension
Plan with Newspaper Statistics,  Inc. dated January 1, 1977, as amended, and the
Newspaper  Statistics,  Inc.  Pension  Plan  Account of Martin  Scheinberg  with
Newspaper Statistics, Inc. dated January 1, 1973, as amended January 1, 1984, as
assignees,  recorded in the  aforesaid  records on  September  30, 1988 in Liber
1158, page 693.
<PAGE>


                             SCHEDULE 3, page 5 of 5


Assignment of Note and Deed of Trust dated as of January 1, 1987 between Paul D.
Spindel and Martin R. Scheinberg, as Trustees for the Newspaper Statistics, Inc.
dated  January  1, 1973,  as  restated  as of  January  1, 1976,  and as further
amended,  the  Newspaper  Statistics,  Inc.  Defined  Benefit  Pension Plan with
Newspaper Statistics,  Inc. dated January 1, 1977, as amended, and the Newspaper
Statistics,  Inc.  Pension  Plan  Account of Martin  Scheinberg  with  Newspaper
Statistics,  Inc.  dated  January 1,  1973,  as  amended  January  1,  1984,  as
assignors,  and Mortgage  Financing  Partners  (predecessor-in-interest  to DVL,
Inc.), as assignee,  recorded in the aforesaid records on or about September 30,
1988 in Liber 1158, page 701.

Note and Deed of Trust  Modification  Agreement  and  Collateral  Assignment  of
Leases,   between   Salisbury   Associates  and  Mortgage   Financing   Partners
(predecessor-in-interest  to DVL,  Inc.) and John P. Douds and James N.  Wright,
Jr. dated as of January 1, 1987 and recorded in Liber 1158, page 705.

Modification  Agreement dated as of January 1, 1992 between DVL, Inc., Salisbury
Associates and Textron Financial Corporation,  recorded in the aforesaid records
in Liber 1400, page 441.

Lease:  Lease dated March 30, 1982 between  Salisbury  Associates  and The Grand
Union Company. Sublease dated September 14, 1983 between The Grand Union Company
and Eastern Shore Markets, Inc., t/a Meatland Supermarkets.