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                                                               Exhibit 10(i)A(2)


                       LIMITED LIABILITY COMPANY AGREEMENT
                                       FOR
                               731 COMMERCIAL LLC,
                      A DELAWARE LIMITED LIABILITY COMPANY
                               (COMMERCIAL PARCEL)



      This Limited Liability Company Agreement ("AGREEMENT") of 731 COMMERCIAL
LLC, a Delaware limited liability company (the "COMPANY") is made as of and is
effective the 3rd day of July, 2002, by 731 Commercial Holding LLC, a
Delaware limited liability company, as the sole member ("Member"), Domenic A.
Borriello (in his capacity as the initial "INDEPENDENT MANAGER 1"), and Kim E.
Lutthans (in her capacity as the initial "INDEPENDENT MANAGER 2").

                                    RECITALS


      A. A Certificate (as hereinafter defined) for the Company was executed and
delivered on May 31, 2002 and filed on June 3, 2002 with the Secretary of State
of the State of Delaware, thereby forming the Company as a limited liability
company pursuant to the provisions of the Act (as hereinafter defined).

      B. The Member, Special Member 1 and Special Member 2 wish to operate the
Company in accordance with the terms and conditions set forth herein.

                                    AGREEMENT


      NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein (the receipt and sufficiency of which are acknowledged by each
party hereto), the parties hereto, intending to be legally bound, do hereby
agree as follows:

1.    DEFINITIONS.

      When used in this Agreement, the following terms shall have the meanings
set forth below (terms used in this Agreement that are not defined in this
Article 1 shall have the meanings set forth elsewhere in this Agreement or in
Section 18-101 of the Act):

      1.1 "ACT" shall mean the Delaware Limited Liability Company Act (6 Del. C.
Section 18-101, et. seq.), as the same may be amended from time to time.

      1.2 "AFFILIATE" shall mean a Person or Persons directly or indirectly,
through one or more intermediaries, controlling, controlled by or under common
control with the Person or Persons in question. The term "control", as used in
the immediately preceding sentence, shall mean, with respect to a Person that is
a corporation, the right to exercise, directly or indirectly, more than 20% of
the voting rights attributable to the shares of the controlled corporation and,
with respect to a Person that is not a corporation, the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of the controlled Person.


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      1.3 "AGREEMENT" shall mean this Limited Liability Company Agreement for
731 Commercial LLC, as originally executed and as amended from time to time.

      1.4 "ALEXANDER'S" shall mean Alexander's, Inc., a Delaware corporation.

      1.5 "ALEXANDER'S REIMBURSEMENT AGREEMENT" shall have the meaning provided
in the Loan Agreement.

      1.6 "BANKRUPTCY ACTION" shall have the meaning set forth in Section 2.6(d)
hereof.

      1.7 "BOARD OF MANAGERS" shall have the meaning set forth in Section 5.5
hereof.

      1.8 "CAPITAL CONTRIBUTION" shall mean the total of cash and other assets
contributed to the Company by the Member.

      1.9 "CERTIFICATE" shall mean the Certificate of Formation of the Company,
executed and delivered on May 31, 2002 and filed with the Secretary of State of
the State of Delaware on June 3, 2002 (which is hereby ratified and approved in
all respects), as amended from time to time.

      1.10 "CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time, the provisions of succeeding law, and to the extent applicable,
the Regulations.

      1.11 "COMPANY" shall mean 731 Commercial LLC, a Delaware limited liability
company.

      1.12 "DISTRIBUTABLE CASH" shall mean the amount of cash which the
Principal Manager deems available for distribution, taking into account all
Company debts, liabilities, and obligations then due (including, without
limitation, the Loan) and amounts necessary to place into reserves for customary
and usual claims with respect to the Company's business.

      1.13 "FISCAL YEAR" shall mean the Company's fiscal year, which shall be
the calendar year.

      1.14 "GUARANTIES" shall have the meaning provided in the Loan Agreement.

      1.15 "INDEPENDENT MANAGER" shall have the meaning given to that term in
Section 2.6(c) hereof.

      1.16 "INDEPENDENT MANAGER 1" shall mean the person from time to time
appointed by the Member as an Independent Manager who shall be designated by the
Member as "Independent Manager 1".

      1.17 "INDEPENDENT MANAGER 2" shall mean the person from time to time
appointed by the Member as an Independent Manager who shall be designated by the
Member as "Independent Manager 2".


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      1.18 "LENDER" shall mean Bayerische Hypo- und Vereinsbank AG and other
co-lenders that hold an interest in the Loan to Company together with any of
their successors and assigns, each during such time as it is the holder of such
interest.

      1.19 "LOAN" shall mean the loan in the original principal amount of
$490,000,000 made by Lender to Company and Residential SPE or any loan made for
the purposes of refinancing such loan or any portion thereof.

      1.20 "LOAN AGREEMENT" shall mean the loan agreements between Lender,
Company and Residential SPE pursuant to which the Loan is made.

      1.21 "LOAN DOCUMENTS" shall mean any and all documentation in connection
with the Loan, as amended from time to time, and any other agreement to be
entered into in connection with such documents and any financing documents in
replacement thereof to be entered into by the Company and Residential SPE in
connection with the acquisition and ownership of the Property, including,
without limitation, the documents listed on Schedule 1.21 attached hereto and
incorporated herein.

      1.22 "MEMBER" shall mean 731 Commercial Holding LLC, a Delaware limited
liability company, in its capacity as a member of the Company, or any other
Person that succeeds Member in that capacity. A "Special Member" is not a
"Member" as that term is used in this Agreement.

      1.23 "MEMBERSHIP INTEREST" shall mean all of the Member's right, title and
interest in, to and against the Company, including rights to Distributable Cash
of the Company, and all other rights of the Member to participate in the
business, affairs and management of the Company, including without limitation,
the right to vote on or grant consent or approval with respect to matters coming
before the Company.

      1.24 "NET PROFITS" and "NET LOSSES" shall mean the net profits and net
losses of the Company for a period (or from a transaction) as determined in
accordance with generally accepted accounting principles, consistently applied.

      1.25 "PERCENTAGE INTEREST" shall mean the limited liability interest in
the Company expressed as a percentage of the total limited liability interests
outstanding. The Percentage Interest of the Member is 100.00%.

      1.26 "PERMITTED INDEBTEDNESS" shall mean the Loan and the other
indebtedness of the Company that is permitted under the Loan Documents.

      1.27 "PERSON" shall mean any individual, sole proprietorship, corporation,
general partnership, limited partnership, limited liability company or
partnership, joint venture, association, joint stock company, bank, trust,
estate, unincorporated organization, any federal, state, county or municipal
government (or any agency or political subdivision thereof), endowment fund or
any other form of entity.


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      1.28 "PRINCIPAL MANAGER" shall mean Member, who is appointed as a manager
within the meaning of the Act, except to the extent that the Board of Managers
is provided with management responsibility pursuant to Section 5.3.

      1.29 "PROPERTY" shall mean that certain real property (together with
improvements, fixtures, and other appurtenances thereto) commonly known as the
commercial parcel at 731 Lexington Avenue, in the City of New York, County of
New York, State of New York, as more specifically set forth on Schedule 1.29
attached hereto and incorporated herein.

      1.30 "REGULATIONS" shall, unless the context clearly indicates otherwise,
mean the regulations currently in force as final or temporary that have been
issued by the U.S. Department of Treasury pursuant to its authority under the
Code.

      1.31 "RESIDENTIAL SPE" shall mean 731 Residential LLC, a Delaware limited
liability company.

      1.32 "SPECIAL MEMBER 1" shall mean the Independent Manager 1 in his
capacity as Special Member.

      1.33 "SPECIAL MEMBER 2" shall mean the Independent Manager 2 in his
capacity as Special Member.

      1.34  "VORNADO" shall mean Vornado Realty L.P., a Delaware limited
partnership.

      1.35 "VORNADO REIMBURSEMENT AGREEMENT" shall have the meaning provided in
the Loan Agreement.

      1.36 "VACANCY" shall have the meaning set forth in Section 5.6 hereof.

2.    ORGANIZATIONAL MATTERS.

      2.1 FORMATION AND CONTINUATION. Larry Portal, is hereby designated as an
"authorized person" within the meaning of the Act, and has executed, delivered
and filed the Certificate of the Company with the Secretary of State of the
State of Delaware and the qualification to do business in the State of New York.
Upon the filing of the Certificate of the Company with the Secretary of State of
the State of Delaware and the qualification to do business in the State of New
York, his powers as an "authorized person" ceased, and the Member thereupon
became the designated "authorized person" within the meaning of the Act. The
Member shall execute, deliver and file any other certificates (and any
amendments and/or restatements thereof) necessary for the Company to qualify to
do business in any jurisdiction (other than the State of New York) in which the
Company may wish to conduct business.

      2.2 NAME. The name of the Company shall be "731 COMMERCIAL LLC". The
business of the Company may be conducted under that name or, upon compliance
with applicable laws, any other name that Member deems appropriate or advisable.
The Principal Manager shall qualify the Company to do business in the State of
New York and shall file any qualification instruments and fictitious name
certificates and similar filings, and any amendments


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thereto, as necessary to qualify the Company to conduct business in the State of
New York or which Principal Manager otherwise considers appropriate or advisable
in accordance with Section 5 of this Agreement. Notwithstanding the foregoing,
for so long as any obligation to Lender under the Loan remains outstanding the
Company shall maintain the name "731 COMMERCIAL LLC".

      2.3 TERM. The term of the Company and this Agreement shall commence from
the date of filing of the Certificate with the Secretary of State of the State
of Delaware as aforesaid and shall continue until the dissolution of the Company
pursuant to Section 9.1 hereof.

      2.4 REGISTERED OFFICE; REGISTERED AGENT; PRINCIPAL OFFICE. The Company
shall continuously maintain a registered office and registered agent in the
State of Delaware as required by the Act. The registered office and registered
agent of the Company in Delaware are c/o The Corporation Trust Company,
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, County
of New Castle. In addition, the Company shall maintain its principal office at
c/o Alexander's, Inc., 888 Seventh Avenue, New York, New York 10019, or at such
other place as Principal Manager may determine. The registered office,
registered agent and principal office of the Company may be changed at any time
and from time to time by Principal Manager.

      2.5 ADDRESS OF MEMBER. The address of Member as the sole Member as of the
date of this Agreement is c/o Alexander's, Inc., 888 Seventh Avenue, New York,
New York 10019, Attention: Chief Executive Officer. Any successor Member who is
admitted shall notify the Member and the Company of its address upon admission
to the Company as a Member. The Member may change its address at any time by
notice given to the Company.

      2.6 PURPOSE OF COMPANY.

            (a) The purpose of the Company is limited solely to owning, holding,
managing, developing, leasing, operating and disposing of the Property, entering
into the Loan Documents, refinancing the Property in connection with a permitted
repayment or refinancing of the Loan, and transacting any and all lawful
business that is incident, necessary and appropriate to accomplish the
foregoing.

            (b) Notwithstanding any other provision of this Agreement to the
contrary (but subject to Section 2.6(d)), the Company shall not do any of the
following, so long as any obligation of the Company to the Lender under Loan is
outstanding:

                  (1) the Company will not engage in any business or activity
other than as expressly set forth under the heading "Purpose of Company" in
Section 2.6(a) of this Agreement.

                  (2) the Company will not acquire or own any material assets
other than (i) the Property, and (ii) such incidental personal property as may
be necessary for the ownership, construction, management and operation of the
Property.


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                  (3) the Company will maintain books, financial records and
bank accounts (including checking and other bank accounts and custodian and
other securities safekeeping accounts) that are separate and distinct from the
books, financial records and bank accounts of any other person or entity;
provided that it may have a joint bank account with Residential SPE as
co-borrower under the Loan.

                  (4) the Company will maintain books, financial records and
bank accounts in a manner so that it will not be difficult or costly to
segregate, ascertain and otherwise identify the assets and liabilities of the
Company.

                  (5) the Company will not commingle any of its assets, funds,
liabilities or business functions with the assets, funds, liabilities or
business functions of any other person or entity (other than (i) Residential SPE
(a) as co-borrower under the Loan and (b) as co-obligor to Alexander's, Inc.
under the Alexander's Reimbursement Agreement for the reimbursement of payments
under the Guaranties and (ii) Alexander's and Residential SPE as co-obligors to
Vornado under the Vornado Reimbursement Agreement for the reimbursement of
payments under the Guaranties).

                  (6) the Company will observe all appropriate limited liability
company procedures and formalities.

                  (7) the Company will pay its own liabilities, losses and
expenses only out of its own funds (except to the extent otherwise permitted or
provided for under (i) the Loan Documents, (ii) the Vornado Reimbursement
Agreement for reimbursement of payments under the Guaranties and (iii)
Alexander's Reimbursement Agreement for reimbursement of payments under the
Guaranties).

                  (8) subject to clause (9) below, the Company will maintain
separate annual financial statements prepared in accordance with generally
accepted accounting principles, consistently applied, showing its assets and
liabilities separate and distinct from those of any other person or entity.

                  (9) in the event the financial statements of the Company are
consolidated with the financial statements of any other entity, then in addition
to maintaining separate financial statements as required above, the Company will
cause to be included in such consolidated financial statements a note stating
that "the Company is a separate entity that has separate assets and liabilities
as shown on the Company's separate financial statement".

                  (10) the Company will pay or bear the cost of the preparation
of its financial statements, and have such financial statements audited by a
certified public accounting firm that is not affiliated with the Company or its
affiliates.

                  (11) the Company will not guarantee or become obligated for
the debts or obligations of any other entity or person (other than (i)
Residential SPE (a) as co-borrower under the Loan and (b) as co-obligor to
Alexander's under the Alexander's Reimbursement Agreement for the reimbursement
of payments under the Guaranties, (ii) Alexander's and


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Residential SPE as co-obligors to Vornado under the Vornado Reimbursement
Agreement for the reimbursement of payments under the Guaranties and (iii) lease
takeover obligations).

                  (12) the Company will not hold out its credit as being
available to satisfy the debts or obligations of any other person or entity
(other than (i) Residential SPE (a) as co-borrower under the Loan and (b) as
co-obligor to Alexander's under the Alexander's Reimbursement Agreement for the
reimbursement of payments under the Guaranties, (ii) Alexander's and Residential
SPE as co-obligors to Vornado under the Vornado Reimbursement Agreement for the
reimbursement of payments under the Guaranties and (iii) lease takeover
obligations).

                  (13) the Company will hold itself out as an entity separate
and distinct from any other person or entity (including its affiliates).

                  (14) the Company will correct any known misrepresentation or
misunderstanding regarding its separate identity.

                  (15) the Company will use separate stationery, business cards,
purchase orders, invoices, checks and the like bearing its own name to the
extent it will use such items.

                  (16) the Company will maintain a sufficient number of
employees or outside consultants in light of its contemplated business
operations and pay their salaries out of its own funds (and the funds of
Residential SPE as co-borrower under the Loan).

                  (17) the Company will compensate all consultants, independent
contractors, employees and agents from its own funds (or those of Residential
SPE as co-borrower under the Loan) for services provided to it by such
consultants, independent contractors, employees and agents.

                  (18) the Company will, to the extent that the Company and any
of its affiliates occupy any premises in the same location, allocate fairly,
appropriately and nonarbitrarily any rent and overhead expenses among and
between such entities with the result that each entity bears its fair share of
all such rent and expenses.

                  (19) the Company will, to the extent that the Company and any
of its affiliates share the same officers and other employees, allocate fairly,
appropriately and nonarbitrarily any salaries and expenses to the extent
actually incurred by such parties related to providing benefits to such officers
and other employees between or among such entities, with the result that each
such entity will bear its fair share of the salary and benefit costs associated
with all such common or shared officers or other employees.

                  (20) the Company will, to the extent that the Company and any
of its affiliates jointly contract or do business with vendors or service
providers or share overhead expenses, allocate fairly, appropriately and
nonarbitrarily any costs and expenses incurred in so doing between or among such
entities, with the result that each such entity bears its fair share of all such
costs and expenses.


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                  (21) the Company will, to the extent the Company contracts or
does business with vendors or service providers where the goods or services are
wholly or partially for the benefit of its affiliates, allocate fairly,
appropriately and nonarbitrarily any costs incurred in so doing to the entity
for whose benefit such goods or services are provided, with the result that each
such entity bears its fair share of all such costs.

                  (22) the Company will not make any loans to any person or
entity or buy or hold any indebtedness issued by any other person or entity
(except for cash and investment-grade securities and each of the permitted
investments and exceptions expressly permitted by the Loan Documents).

                  (23) the Company will conduct its own business solely in its
own name, through its duly authorized officers or agents.

                  (24) the Company will hold all of its assets in its own name
(except for assets held jointly with Residential SPE as co-borrower under the
Loan).

                  (25) the Company will maintain an arm's-length like
relationship with its affiliates and enter into transactions with affiliates
only on terms at least as favorable to the Company as could be obtained at arm's
length.

                  (26) the Company will not pledge its assets to secure the
liabilities of any other person or entity (other than Residential SPE as
co-borrower under the Loan).

                  (27)  the Company will not identify itself as a division or
department of any other entity.

                  (28) the Company intends to maintain adequate capital in light
of its contemplated business operations.

                  (29) the Company will conduct transactions between the Company
and third parties in the name of the Company and as an entity separate and
independent from its affiliates.

                  (30) the Company will cause representatives, employees and
agents of the Company to hold themselves out to third parties as being
representatives, employees or agents, as the case may be, of the Company.

                  (31) the Company will cause transactions and agreements
between the Company, on the one hand, and any one or more of its affiliates, on
the other hand (including transactions and agreements pursuant to which the
assets or property of one is used or to be used by the other), to be entered
into in the names of the entities that are parties to the transaction or
agreement and to be formally documented in writing.

                  (32) the Company will cause the pricing and other material
terms of all transactions and agreements described in the immediately preceding
clause (29) above to be established by written agreement (by formula or
otherwise) at the inception of the particular


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transaction or agreement on terms at least as favorable to the Company as could
be obtained at arm's length.

                  (33) the Company will not acquire or assume the obligations of
its affiliates (other than (i) Residential SPE (a) as co-borrower under the Loan
and (b) as co-obligor to Alexander's under the Alexander's Reimbursement
Agreement for the reimbursement of payments under the Guaranties and (ii)
Alexander's and Residential SPE as co-obligors to Vornado under the Vornado
Reimbursement Agreement for the reimbursement of payments under the Guaranties).

                  (34) the Company will not form, hold, or acquire any
subsidiary or own any other equity interest in any other Person except as
expressly permitted in the Loan Documents.

                  (35) the Company will file any required tax returns and will
make any required payments under applicable tax law.

            (c) The Company shall at all times cause there to be at least two
(2) duly appointed members of the Board of Managers who are independent managers
(each an "INDEPENDENT MANAGER") who shall not have been or be at the time of
such individual's appointment, or at any time while serving as an Independent
Manager of the Company, and may not have been at any time during the preceding
five (5) years preceding his or her appointment (A) a member (with the exception
of serving as Special Member of the Company or Residential SPE), shareholder,
partner, director, manager (with the exception of serving as Independent Manager
of the Company or Residential SPE), officer or employee of Company, or of Member
or any Affiliate of any of them; (B) a customer of, creditor of, or supplier or
service provider (including professionals) to, Company or its Member or any of
Company's or Member's members, shareholders, partners, or subsidiaries, or any
Affiliate of any of them, if the revenues therefrom to such director account for
any of such director's gross annual revenues; (C) a Person controlling any of
the foregoing; (D) any other Person receiving a material portion of his or her
compensation or other financial remuneration from, or who is otherwise
financially dependent on, an officer, director or employee of Company or Member,
or any of their Affiliates or an officer's, director's or employee's family
member by blood or marriage or a business entity owned or controlled by any of
the foregoing; or (E) a spouse, parent, sibling or child of any Person described
by (A), (B), (C) or (D) above. A natural person who satisfies the foregoing
definition other than subparagraph (B) shall not be disqualified from serving as
an Independent Manager of the Company if such individual is an independent
manager provided by a nationally-recognized company that provides professional
independent managers and that also provides other corporate services in the
ordinary course of its business. A natural person who otherwise satisfies the
foregoing except for serving as an independent manager of a "special purpose"
Affiliate that does not own a direct or indirect interest in the Company or
Residential SPE shall not be disqualified from serving as an Independent Manager
of the Company if such individual is at the time of initial appointment, or at
any time while serving as an Independent Manager of the Company, an Independent
Manager of a "special purpose entity" affiliated with the Company (other than
any entity that owns a direct or indirect equity interest in the Company or
Residential SPE) if such individual is an independent manager provided by a
nationally-recognized company


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that provides professional independent managers. For purposes of this paragraph,
a "special purpose entity" is an entity, whose organizational documents contain
restrictions on its activities and impose requirements intended to preserve the
Company's separateness that are substantially similar to those of the Company
and provide, inter alia, that it: (a) is organized for the limited purpose of
owning and operating one or more properties or is a member of an entity which is
organized for the limited purpose of owning and operating one or more
properties; (b) has restrictions on its ability to incur indebtedness, dissolve,
liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a
bankruptcy petition on its own behalf or on behalf of such entity without the
consent of the Independent Manager and (d) shall conduct itself and cause such
entity to conduct itself in accordance with certain "separateness covenants",
including, but not limited to, the maintenance of its and such entity's books,
records, bank accounts and assets separate from those of any other person or
entity. The initial Independent Managers shall be Domenic A. Borriello,
initially designated as "Independent Manager 1", and Kim E. Lutthans, initially
designated as "Independent Manager 2". As used in this Section 2.6(c), the term
"CONTROLLED" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person whether
through ownership of voting securities, by contract or otherwise.

            (d) Notwithstanding any other provision of this Agreement (other
than Section 2.6(f) below) or the Certificate or of law that otherwise so
empowers Company, Company shall not take any of the following actions (w)
without the consent of the Member, (x) without the vote or written consent of
both members of the Board of Managers which are Independent Managers, (y) if one
or more of the other members of the Board of Managers vote against or disapprove
such actions, and (z) if the obligation of the Company to Lender under the Loan
is outstanding, without the written consent of Lender: (i) to the fullest extent
permitted by law, the dissolution, winding up, liquidation, consolidation,
conversion to another form of business association or state of formation, or
change in the legal structure of Company including, but not limited to,
permitting the transfer of the limited liability company interests of any Member
in whole or in part (if such transfer is restricted by the Loan Documents and,
in such instance, a transfer may be made only in accordance with the Loan
Documents), the merger of Company or the sale, transfer or other disposition of
all or substantially all of the properties and assets of Company; (ii) the
engagement by Company in any business other than the ownership, management,
development, leasing, financing, maintenance and operation of the Property; or
(iii) the amendment or modification of Sections 2.2, 2.3, 2.6, 4.2, 4.3, 4.8,
5.1, 5.2, 5.5, 5.6, 7, 8.1, 8.4, 8.5, 9.1, 9.6, 10, 11.10 and 11.13 or the
defined terms referenced therein. Notwithstanding another provision of this
Agreement or the Certificate or of law that otherwise so empowers Company,
Company shall not take any of the following actions (w) without the consent of
the Member, (x) without the vote or written consent of both members of the Board
of Managers which are Independent Managers and (y) if one or more of the other
members of the Board of Managers vote against or disapprove such actions: (A)
the filing, or consent to the filing, of a bankruptcy, insolvency or
reorganization case or proceeding; instituting any proceedings under any
applicable insolvency law or otherwise seek any relief under the laws relating
to the relief from debts or the protection of debtors generally; seeking or
consenting to appointment of a receiver, liquidator, assignee, trustee,
sequestrator, custodian or any similar official for the Borrower or a
substantial portion of its properties; making any assignment for the benefit of
the Borrower's creditors; taking any action in furtherance of any of the
foregoing


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(collectively, "Bankruptcy Action") or (B) the amendment or modification of any
provision of this Agreement (subject to the prior sentence of this Section
2.6(d)) or the Certificate; and any purported action of Company which violates
this sentence shall be void ab initio and of no force or effect.

            (e) The Company shall have no liabilities, contingent or otherwise,
other than the Permitted Indebtedness.

            (f) Notwithstanding any other provision of this Agreement or the
Certificate or of law that otherwise so empowers Company, in the event that
Residential SPE shall take, or become subject to, a Bankruptcy Action, then,
upon receiving written notice from Lender, all of the members of the Board of
Managers (including both Independent Managers) shall take a vote on the
commencement of a Bankruptcy Action with respect to the Company and shall vote,
to the fullest extent permitted by law, as specifically directed and instructed
by the Lender for so long as the obligation of the Company to Lender under the
Loan is outstanding. If so directed by the Lender, the Company shall seek
procedural consolidation of the bankruptcy proceedings of the Company and
Residential SPE.

            (g) THE COMPANY ACKNOWLEDGES AND AGREES THAT THE LENDER WOULD NOT
HAVE AGREED TO MAKE THE LOAN BUT FOR THE INCLUSION OF THE BANKRUPTCY CONTROL
PROVISIONS SET FORTH IN SECTION 2.6(f) HEREIN. THE BANKRUPTCY CONTROL PROVISIONS
CONTAINED IN THIS AGREEMENT ARE DESIGNED TO REFLECT THE AGREEMENT AND
UNDERSTANDING OF THE TRANSACTION PARTIES WITH THE LENDER THAT THE LOAN TO THE
COMPANY AND RESIDENTIAL SPE AS CO-BORROWERS IS A SINGLE TRANSACTION SECURED BY
THE ENTIRE PROPERTY AND LENDER MADE THE LOAN IN RELIANCE ON ITS ABILITY TO
REALIZE UPON THE BENEFIT OF SUCH AGREEMENT AND UNDERSTANDING.

3.    CAPITAL CONTRIBUTIONS.

      3.1 INITIAL CAPITAL CONTRIBUTION. Member has contributed the Property to
the Company pursuant to that certain bargain and sale deed without covenant
against grantor's acts dated July 3rd, 2002 (subject to all exceptions thereof)
executed by Member in favor of Company.

      3.2 ADDITIONAL CAPITAL CONTRIBUTIONS. Member may, but shall not be
obligated to, contribute additional capital to the Company in such amounts and
at such times as Member shall determine in its sole and absolute discretion.

      3.3   NO INTEREST.  Member shall not be entitled to receive interest on
any Capital Contributions.

      3.4 CAPITAL ACCOUNT. The Company shall establish and maintain a capital
account for Member to which it shall credit the amount of its Capital
Contributions and Net Profits of the Company from time to time and to which it
shall charge such Member's share of distributions


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and Net Losses. The initial capital account of Member shall be equal to the fair
market value of the Property.

4.    MEMBER.

      4.1 LIMITED LIABILITY. Except as otherwise provided by the Act, the debts,
obligations and liabilities of the Company, whether arising in contract, tort or
otherwise, shall be solely the debts, obligations and liabilities of the
Company, and neither the Member nor the Special Members shall be obligated
personally for any such debt, obligation or liability of the Company solely by
reason of being a member of the Company.

      4.2 ADMISSION OF ADDITIONAL MEMBERS. Except as contemplated by Section
4.8, no additional members shall be admitted to the Company, it being the intent
of Member that the Company shall at all times be a single member limited
liability company. Without the need for the consent of any Person, upon a
transfer of the limited liability company interest in accordance with this
Agreement, the transferee shall be deemed admitted as a Member of the Company
upon the effective date of such transfer.

      4.3 RESIGNATIONS. Member shall not resign as the member of the Company.

      4.4 TRANSACTION WITH THE COMPANY. Subject to any limitations set forth in
this Agreement, including without limitation, Section 2.6 hereof, Member may
lend money to, act as a surety, guarantor or endorser for, guarantee or assume
one or more obligations of, provide collateral for, and transact other business
with the Company. Subject to this Agreement and applicable law, Member has the
same rights and obligations with respect to any transaction with Company as a
Person who is not a member or manager.

      4.5 REMUNERATION TO MEMBER. Except as otherwise authorized in or pursuant
to this Agreement, Member is not entitled to remuneration for acting on Company
business.

      4.6 VOTING RIGHTS. Except as expressly modified in this Agreement, Member
shall have the voting, approval and consent rights provided in the Act.

      4.7 MEETINGS OF THE MEMBER. No annual or regular meeting of Member is
required.

      4.8 SPECIAL MEMBER.

            (a) Upon the occurrence of any event that causes the Member to cease
to be a member of the Company (other than upon an assignment by the Member of
all of its limited liability company interest in the Company and the admission
of the transferee pursuant to Section 4.2 (a "MEMBER CESSATION EVENT")),
Independent Manager 1 shall, without any action of any Person and simultaneously
with the Member's ceasing to be a member of the Company, automatically be
admitted to the Company as a member of the Company (in such capacity, a "SPECIAL
MEMBER") and shall continue the Company without dissolution. If, however, at the
time of a Member Cessation Event, Independent Manager 1 has died or is otherwise
no longer able to step into the role of Special Member, then, in such event,
Independent Manager 2 shall concurrently with the Member Cessation Event, and
without any action of any Person and


                                       12
<PAGE>
simultaneously with the Member Cessation Event, automatically be admitted to the
Company as Special Member and shall continue the Company without dissolution. It
is the intent of these provisions that the Company never have more than one
Special Member at any particular point in time.

            (b) No Special Member may resign from the Company or transfer its
rights as Special Member unless (i) a successor Special Member has been admitted
to the Company as Special Member by executing a counterpart to this Agreement,
and (ii) such successor has also accepted its appointment as Independent Manager
pursuant to Section 2.6(c); provided, however, the Special Members shall
automatically cease to be members of the Company upon the admission to the
Company of a substitute Member appointed by the personal representative (as
defined in the Act) of the last remaining Member who ceased to be a member of
the Company. The Special Member shall be a member of the Company that has no
interest in the profits, losses and capital of the Company and has no right to
receive any distributions of Company assets. Pursuant to Section 18-301 of the
Act, a Special Member shall not be required to make any capital contributions to
the Company and shall not receive a limited liability company interest in the
Company. A Special Member, in its capacity as Special Member, may not bind the
Company. Except as required by any mandatory provisions of the Act, the Special
Member, in its capacity as Special Member, shall have no right to vote on,
approve or otherwise consent to any action by, or matter relating to, the
Company, including, without limitation, the merger, consolidation or conversion
of the Company. In order to implement the admission to the Company of each
Special Member, each person acting as an Independent Manager pursuant to Section
2.6(c) shall execute a counterpart to this Agreement. Prior to its admission to
the Company as Special Member, each person acting as an Independent Manager
pursuant to Section 2.6(c) shall not be a member of the Company.

5.    MANAGEMENT AND CONTROL OF THE COMPANY; LIMITED LIABILITY.

      5.1 MANAGEMENT OF THE COMPANY BY PRINCIPAL MANAGER. The business, property
and affairs of the Company shall be managed and all powers of the Company shall
be exercised by or under the direction of Principal Manager except only for the
powers granted to the Board of Managers under this Article 5. Principal Manager
shall, on behalf of and in the name of the Company, and in addition to the
general management obligations for the operation of the Company and the
obligations of Principal Manager provided for elsewhere in this Agreement or by
law, cause the Company to perform the obligations and otherwise comply with the
requirements set forth in Section 2.6 of this Agreement. Principal Manager shall
conduct the affairs of the Company in the best interest of the Company and
Member, including the safekeeping and use of all Company funds for the benefit
of the Company and Member.

      5.2 POWERS WITH RESPECT TO MANAGEMENT OF THE COMPANY. Subject to the
limitations set forth in Section 2.6 and in Section 5.3 or expressly provided
elsewhere in this Agreement, Principal Manager shall have all necessary powers
to manage and carry out the management of the Company and the power to sign
contracts and obligations on behalf of the Company, including without
limitation, the power to exercise on behalf and in the name of the Company all
of the powers of a manager described in the Act. Notwithstanding any other
provision of this Agreement, the Company, the Principal Manager, or the Member,
on behalf of


                                       13
<PAGE>
the Company, may enter into and perform the Loan Documents, the Alexander's
Reimbursement Agreement, the Reimbursement Documents (as defined in the
Alexander's Reimbursement Agreement) in connection with the Alexander's
Reimbursement Agreement, the Vornado Reimbursement Agreement and the
Reimbursement Documents (as defined in the Vornado Reimbursement Agreement) in
connection with the Vornado Reimbursement Agreement, without any further act,
vote or approval. The Principal Manager is hereby authorized to enter into the
Loan Documents, the Alexander's Reimbursement Agreement, the Reimbursement
Documents in connection with the Alexander's Reimbursement Agreement, the
Vornado Reimbursement Agreement and the Reimbursement Documents in connection
with the Vornado Reimbursement Agreement on behalf of the Company. The foregoing
authorization shall not be deemed a restriction on the power of the Principal
Manager to enter into other agreements on behalf of the Company.

      5.3 BOARD OF MANAGERS POWERS. Subject to the terms of the Act and as
otherwise provided under this Section 5, the Company shall be managed by the
Board of Managers to the extent, and only to the extent, of the matters
described in Sections 2.6(d) and 2.6(f) hereof and in accordance with Sections
2.6(d) and 2.6(f) hereof. Each member of the Board of Managers is hereby
designated as a manager within the meaning of the Act but shall have only the
rights and powers as are set forth in this Section 5.3 and shall not otherwise
have the authority, acting alone or together, to bind the Company.

      5.4 NUMBER OF MANAGERS. The authorized number of Persons constituting the
Board of Managers shall initially be five (5). Subject to Section 5.5(a), the
Member may change the number of Persons constituting the Board of Managers at
any time.

      5.5 ELECTION OF PERSONS TO BOARD OF MANAGERS.

            (a) Subject to the requirement that at least two (2) of the members
of the Board of Managers shall be Independent Managers, as defined in Section
2.6(c) hereof, Member may determine at any time in its sole and absolute
discretion the number of members of the Board of Managers and whom to appoint as
members of the Board of Managers. Subject to the provisions of the prior
sentence, any member of the Board of Managers (including, without limitation,
any Independent Manager) may be removed or expelled, with or without cause, at
any time by Member, with or without notice.

            (b) The following named persons shall be, and they hereby are,
appointed as the initial members of the Board of Managers of the Company ("BOARD
OF MANAGERS"), their terms of office to commence upon the acceptance of their
appointment and to continue until the earlier of their resignation or removal by
the Member or their respective successor(s) shall have been duly appointed and
such successor(s) have accepted their appointment in accordance with this
Article 5:

                  Steven Roth
                  Michael Fascitelli
                  Russell B. Wight, Jr.


                                       14
<PAGE>
                  Domenic A. Borriello (Independent Manager 1)
                  Kim E. Lutthans (Independent Manager 2)

      5.6 VACANCIES ON BOARD OF MANAGERS. A vacancy ("VACANCY") on the Board of
Managers shall be deemed to exist (i) if an appointed member of the Board of
Managers dies or resigns, (ii) if an appointed member of the Board of Managers
is convicted of a felony or any other crime punishable by imprisonment or
declared of unsound mind by an order of court, in which case, without further
action by any Person, such Person shall cease to be a member of the Board of
Managers, or (iii) if, subject to the requirements of Section 2.6(c) hereof, an
appointed member is removed or expelled, with or without cause, at any time by
Member. A Vacancy on the Board of Managers shall be filled in accordance with
the appointment procedure set forth in Section 5.5 hereof by Member.

      5.7 BOARD OF MANAGERS MEETINGS. It shall be unnecessary for the Board of
Managers to meet unless meeting to address and vote on the matters described
under Sections 2.6(d) and 2.6(f) hereof. All Board of Managers meetings shall be
held at the principal office of the Company. Such Board of Managers meetings
shall be held on four (4) days' notice by mail or 48 hours' notice delivered
personally or by telephone, including voice messaging system or other technology
designed to record and communicate messages, facsimile, electronic mail, or
other electronic means. Notices hereunder shall be communicated to each member
of the Board of Managers at the address, telephone number or electronic mail
address shown on the Company's records. Notwithstanding anything to the contrary
contained herein, any action required or permitted to be taken at any meeting of
the Board of Managers may be taken without a meeting, if (x) both of the members
of the Board of Managers which are Independent Managers consent thereto in
writing to such action and (y) the other members of the Board of Managers do not
raise any written objection thereto within five (5) days of being notified
thereof in writing, and the consent or consents are filed with the minutes of
proceedings of the Board of Managers.

      5.8 QUORUM. It shall be necessary for all of the appointed members of the
Board of Managers to be present in order to constitute a quorum for the
transaction of business, and all of the appointed members of the Board of
Managers must be present at any meeting of the Board of Managers in order for
any act or decision made by the appointed members of the Board of Managers to be
regarded as the official act of the Board of Managers. Even though a quorum is
initially present, if the number of members of the Board of Managers present at
a meeting is reduced to less than a quorum, no further business, except
adjournment may be transacted at the meeting until a quorum is present. Members
of the Board of Managers may participate in a meeting of the Board of Managers
by means of conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other, and such
participation in a meeting shall constitute presence in person at the meeting.
If all the participants are participating by conference telephone or similar
communications equipment, the meeting shall be deemed to be held at the
principal office of the Company.

      5.9 PERFORMANCE OF DUTIES; LIABILITY OF PRINCIPAL MANAGER AND BOARD OF
MANAGERS. None of the Principal Manager, the Member or any member of the Board
of Managers shall be liable to Company for any loss or damage sustained by
Company, unless the


                                       15
<PAGE>
loss or damage shall have been the result of an act performed, or omitted to be
performed, in bad faith or with gross negligence or willful misconduct by
Principal Manager, the Member or by such member of the Board of Managers, as the
case may be. To the extent that, at law or in equity, the Principal Manager, the
Member or any member of the Board of Managers has duties (including fiduciary
duties) and liabilities relating thereto to the Company or to the Member, the
Principal Manager, the Member and any member of the Board of Managers acting
under this Agreement shall not be liable to the Company or to the Member for its
good faith reliance on the provisions of this Agreement. The provisions of this
Agreement, to the extent that they restrict the duties and liabilities of the
Principal Manager, the Member or any member of the Board of Managers otherwise
existing at law or in equity, are agreed by the parties hereto to replace, to
the fullest extent permitted by law, such other duties and liabilities of the
Principal Manager, the Member and any member of the Board of Managers.

      5.10 LIMITED LIABILITY. Except as otherwise provided by the Act, the
debts, obligations and liabilities of the Company, whether arising in contract,
tort or otherwise, shall be solely the debts, obligations and liabilities of the
Company, and none of the Principal Manager, the Member or any member of the
Board of Managers shall be obligated personally for any such debt, obligation or
liability of the Company solely by reason of being a manager or member of the
Company or a member of the Board of Managers.

6.    ALLOCATIONS OF NET PROFITS AND NET LOSSES AND DISTRIBUTIONS.

      6.1   ALLOCATIONS OF NET PROFITS AND NET LOSSES.  Net Profits and Net
Losses shall be allocated to the Member.

      6.2 DISTRIBUTIONS OF THE COMPANY. Distributable Cash shall be distributed
to the Member upon demand of the Member but not less frequently than monthly.
All such distributions shall be made only to the Person who, according to the
books and records of the Company, is the holder of record of the Membership
Interest in respect of which such distributions are made on the actual date of
distribution. Notwithstanding any provision to the contrary contained in this
Agreement, the Company shall not make a distribution which would violate the Act
or other applicable law. Except as required by the Act, neither the Company nor
Member shall incur any liability for making distributions in accordance with
Section 2.6 and this Section 6.2.

      6.3 FORM OF DISTRIBUTION. Member has no right to demand and receive any
distribution from the Company in any form other than money. Except upon a
dissolution and winding-up of the Company, Member may not be compelled to accept
from the Company a distribution of any asset in kind.

      6.4 RETURN OF DISTRIBUTIONS. Except as required by law or this Agreement,
Member shall not be obligated to return any distribution to the Company or pay
the amount of any distribution for the account of the Company or to any creditor
of the Company. The amount of any distribution returned to the Company by Member
or paid by Member for the account of the Company or to a creditor of the Company
shall be added to the account or accounts from which it was subtracted when it
was distributed to Member.


                                       16
<PAGE>
7.    TRANSFER OF INTERESTS. Subject to Section 2.6, Member shall not be
entitled to directly or indirectly transfer, assign, convey, sell, encumber or
in any way alienate all or any part of its Membership Interest (a "Transfer"),
except to the extent such Transfer is otherwise permitted under the Loan
Documents to the extent obligations thereunder to Lender are outstanding. To the
fullest extent permitted by law, transfers in violation of this Article 7 shall
be null and void ab initio.

8.    ACCOUNTING, RECORDS, REPORTING BY MEMBERS.

      8.1 BOOKS AND RECORDS. The books and records of the Company shall be kept,
and the financial position and the results of its operations recorded, in
accordance with generally accepted accounting principles or such other commonly
accepted accounting methods, consistently applied, as may be selected by
Principal Manager from time to time. The books and records of the Company shall
reflect all the Company transactions and shall be appropriate and adequate for
the Company's business. The Company shall maintain at its principal office all
of the following:

                        (1) MEMBERS. A record of the full name and last known
business address of the Member, together with the capital account, Capital
Contributions, and Percentage Interest of such Member;

                        (2) CERTIFICATE. A copy of the Certificate and any and
all amendments thereto together with executed copies of any powers of attorney
pursuant to which the Certificate or any amendments thereto have been executed;

                        (3) TAX RETURNS. Copies of the Company's federal, state,
and local income tax or information returns and reports, if any;

                        (4) AGREEMENT. A copy of this Agreement and any and all
amendments thereto together with executed copies of any powers of attorney
pursuant to which this Agreement or any amendments thereto have been executed;

                        (5) FINANCIAL STATEMENTS. Copies of the financial
statements of the Company, if any, for the six (6) most recent Fiscal Years (but
if for less than six (6) years, then for the number of Fiscal Years the Company
has been in existence); and

                        (6) BOOKS AND RECORDS. The Company's books and records
as they relate to the affairs of the Company (including, without limitation,
accounting records, leases, contracts and other agreements, and minutes of
meetings of the Board of Managers) for at least the current and past six (6)
Fiscal Years (but if for less than six (6) years, then for the number of Fiscal
Years the Company has been in existence).

      8.2 DELIVERY TO MEMBER AND INSPECTION. Member has the right to inspect and
copy during normal business hours any of the Company records described in
Sections 8.1(1) through (6).


                                       17
<PAGE>
      8.3 ANNUAL STATEMENTS. Principal Manager shall cause to be prepared at
least annually, at Company expense, information necessary for the preparation of
Member's federal and state income tax returns. Within ninety (90) days after the
end of each Fiscal Year or earlier to otherwise comply if necessary with the
Loan Documents, such information as is necessary to complete federal and state
income tax or information returns shall be made available to Member, and a copy
of the Company's federal, state, and local income tax or information returns, if
any, for that year.

      8.4 FILINGS. Principal Manager, at Company expense, shall cause the income
tax and information returns, if any, for the Company to be prepared and timely
filed with the appropriate authorities. For tax purposes, the Company shall be
treated as a disregarded entity. Principal Manager, at Company expense, shall
also cause to be prepared and timely filed, with appropriate federal and state
regulatory and administrative bodies, amendments to or restatements of the
Certificate and all reports required to be filed by the Company with those
entities under the Act or other then current applicable laws, rules, and
regulations.

      8.5   BANK ACCOUNTS.  Subject to the requirements under Section 2.6 of
this Agreement, Principal Manager shall maintain the funds of the Company in
one or more separate bank accounts.

      8.6 ACCOUNTING DECISIONS AND RELIANCE ON OTHERS. All decisions as to
accounting matters, except as otherwise specifically set forth herein, shall be
made by Principal Manager. Principal Manager may rely upon the advice of its
accountants as to whether such decisions are in accordance with generally
accepted accounting principles or other accounting methods appropriate for the
Company and authorized hereby.

      8.7 TAX MATTERS FOR THE COMPANY HANDLED BY MEMBER. Principal Manager shall
from time to time cause the Company to make such tax elections, if any, as it
deems to be in the best interests of the Company and Member. Member shall be the
"TAX MATTERS PARTNER" as defined in Code Section 6231, shall represent the
Company (at the Company's expense) in connection with all examinations of the
Company's affairs by tax authorities, including resulting judicial and
administrative proceedings, and shall expend the Company funds for professional
services and costs associated therewith. Member shall oversee the Company tax
affairs in the overall best interests of the Company and Member.

9.    DISSOLUTION AND WINDING-UP.

      9.1 DISSOLUTION. Subject to Section 2.6, the Company shall be dissolved,
its assets shall be disposed of, and its affairs wound up on the first to occur
of the following:

            (a) Upon the entry of a decree of judicial dissolution under the
Act; or

            (b) At any time there is no member of the Company, unless the
Company is otherwise continued in accordance with the Act or this Agreement.
Upon the occurrence of any event that causes the last remaining member of the
Company to cease to be a member of the Company, to the fullest extent permitted
by law, the personal representative of such member is


                                       18
<PAGE>
hereby authorized to, and shall, within 90 days after the occurrence of the
event that terminated the continued membership of such member in the Company,
agree in writing (i) to continue the Company and (ii) to the admission of the
personal representative or its nominee or designee, as the case may be, as a
substitute member of the Company, effective as of the occurrence of the event
that terminated the continued membership of the last remaining member of the
Company in the Company.

The filing of a petition in bankruptcy, the filing of a petition or answer
seeking reorganization, arrangement, composition, liquidation, readjustment,
dissolution or similar relief under any statute, law or regulation, or the
occurrence of any other event or circumstance involving or relating to Member or
a Special Member contemplated by or described in Section 18-304 of the Act,
shall not, under any circumstances, cause Member or Special Member, as the case
may be, to cease being a member of the Company and shall not cause the
dissolution of the Company.

      9.2 WINDING-UP. Upon the dissolution of the Company, the Company shall
continue solely for the purpose of winding-up its affairs in an orderly manner,
liquidating its assets, and satisfying the claims of its creditors. Principal
Manager shall be responsible for overseeing the winding-up and liquidation of
the Company, shall take full account of the liabilities of the Company and its
assets, shall either cause its assets to be sold or distributed, and if sold (as
promptly as is consistent with obtaining the fair market value thereof) shall
cause the proceeds therefrom, to the extent sufficient therefor, to be applied
and distributed as provided in Section 9.3 hereof.

      9.3 ORDER OF PAYMENT OF LIABILITIES UPON DISSOLUTION. Upon dissolution,
the assets of the Company shall be liquidated, and the proceeds from such
liquidation shall be allocated and distributed in the following order of
priority:

            (a) First, to the satisfaction of creditors of the Company,
including Member or Principal Manager if a creditor (to the extent otherwise
permitted by law and the Loan Documents), in satisfaction of the liabilities of
the Company (whether by payment or the making of reasonable provision for
payment thereof);

            (b) Second, to the satisfaction of all debts, liabilities and other
obligations owed to Member and not paid pursuant to clause (a) above (whether by
payment or the making of reasonable provision for payment thereof); and

            (c) The balance to Member.

      9.4 NO DEFICIT RESTORATION. If, upon liquidation, Member has a deficit
balance in its capital account, after taking into account all capital account
adjustments for the Company Fiscal Year during which liquidation occurs, Member
shall have no obligation to contribute cash to the capital of the Company to
restore such deficit balance.

      9.5 CERTIFICATE OF CANCELLATION. Principal Manager, as an authorized
person, shall cause to be filed in the office of, and on a form prescribed by,
the Secretary of State of the State


                                       19
<PAGE>
of Delaware, a certificate of cancellation of the Certificate upon completion of
the winding-up of the affairs of the Company.

      9.6 NO ACTION FOR DISSOLUTION. To the fullest extent permitted by law,
neither Member nor the Board of Managers shall take any voluntary action that
directly or indirectly causes a dissolution of the Company. Member acknowledges
that irreparable damage would be done to the goodwill and reputation of the
Company if Member should bring an action in court to dissolve the Company under
circumstances where dissolution is not required by Section 9.1. This Agreement
has been drawn carefully to provide fair treatment of all parties and equitable
payment in liquidation of the Membership Interests. Accordingly, to the fullest
extent permitted by law, Member hereby waives and renounces its right to
initiate legal action to seek the appointment of a receiver or trustee to
liquidate the Company or to seek a decree of judicial dissolution of the Company
(including, but not limited to, any right which Member may have under Section
18-802 of the Act).

10.   INDEMNIFICATION. The Company shall defend, indemnify and save harmless
Member (including in its capacity as Principal Manager), and each member of the
Board of Managers from and against all claims, losses, damages, cost, expense,
demands, liabilities, obligations, liens, encumbrances, rights of action or
attorneys' fees ("CLAIMS") sustained by reason of any act performed, or omitted
to be performed, in good faith and without gross negligence or willful
misconduct, within the scope of its authority expressly conferred by this
Agreement, to the fullest extent permitted by applicable law in effect on the
date hereof and to such greater extent as applicable law may hereafter from time
to time permit. Such indemnity shall not be construed to limit or diminish the
coverage of Member or such members of the Board of Managers under any insurance
obtained by the Company. Payment shall not be a condition precedent to any
indemnification provided in this Agreement. Notwithstanding the foregoing
provisions, no payment may be made under this indemnity during the period in
which there is an "Event of Default" under the Loan Agreement.

11.   MISCELLANEOUS.

      11.1 COMPLETE AGREEMENT. This Agreement constitutes the complete and
exclusive statement of agreement of Member with respect to the subject matter
herein and therein and replace and supersede all prior written and oral
agreements or statements by Member. No representation, statement, condition or
warranty not contained in this Agreement will be binding on Member or has any
force or effect whatsoever.

      11.2  BINDING EFFECT.  Subject to the provisions of this Agreement
relating to transferability, this Agreement will be binding upon and inure to
the benefit of Member, and its respective successors and assigns.

      11.3 PARTIES IN INTEREST. Except for the Lender, its successors or assigns
as holders of the Loan or as expressly provided in the Act or in this Agreement,
nothing in this Agreement shall confer any rights or remedies under or by reason
of this Agreement on any Person other than Member and its successors and assigns
nor shall anything in this Agreement relieve or discharge the obligation or
liability of any third Person to Company or any party to this


                                       20
<PAGE>
Agreement, nor shall any provision hereof give any third Person any right of
subrogation or action over or against Company or any party to this Agreement.

      11.4 PRONOUNS; STATUTORY REFERENCES. All pronouns and all variations
thereof shall be deemed to refer to the masculine, feminine, or neuter, singular
or plural, as the context in which they are used may require. Any reference to
the Code, the Regulations, the Act, or other statutes or laws will include all
amendments, modifications, or replacements of the specific sections and
provisions concerned.

      11.5 HEADINGS. All headings herein are inserted only for convenience and
ease of reference and are not to be considered in the construction or
interpretation of any provision of this Agreement.

      11.6 REFERENCES TO THIS AGREEMENT. Numbered or lettered articles, sections
and subsections herein contained refer to articles, sections and subsections of
this Agreement unless otherwise expressly stated.

      11.7 SEVERABILITY. If any provision of this Agreement or the application
of such provision to any Person or circumstance shall be held invalid, the
remainder of this Agreement or the application of such provision to Persons or
circumstances other than those to which it is held invalid shall not be affected
thereby.

      11.8 ADDITIONAL DOCUMENTS AND ACTS. Member agrees to execute and deliver
such additional documents and instruments and to perform such additional acts as
may be necessary or appropriate to effectuate, carry out and perform all of the
terms, provisions, and conditions of this Agreement and the transactions
contemplated hereby.

      11.9 NOTICES. Unless otherwise specified in this Agreement, all notices
and other communications provided for hereunder shall be in writing (including
by facsimile transmission) and mailed or sent or delivered at the addresses
specified below. All such notices and communications shall be given by hand or
facsimile transmission; provided that, in the event that facsimile transmission
facilities are not operational, such notices and communications may be given by
mail, but the sender shall use reasonable efforts to confirm facsimile
transmission facilities shall become operational. All such notices and
communications shall be effective when delivered by hand, or, in the case of
mail, upon the earlier of receipt and confirmation by facsimile transmission as
provided below, or, in the case of facsimile transmission, when sent as
addressed as set forth herein and confirmation of delivery is received. The
addresses of the Company and Member shall be as set forth in Section 2.5,
provided that each party to this Agreement may, from time to time, change its
notice address, by giving notice to the Company and the other parties herein in
the manner provided in this Section.

      11.10 AMENDMENTS. Subject to Section 2.6, all amendments to this Agreement
will be in writing and signed by the Member and approved by the Board of
Managers; provided that no amendment to this Agreement will be made to the
extent prohibited by the Loan Documents if obligations of the Company and its
Affiliates to the Lenders thereof are outstanding or if it would give rise to a
breach or default thereunder.


                                       21
<PAGE>
      11.11 MULTIPLE COUNTERPARTS.  This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.

      11.12 REMEDIES CUMULATIVE.  The remedies under this Agreement are
cumulative and shall not exclude any other remedies to which any Person may
be lawfully entitled.

      11.13 CHOICE OF LAW. This Agreement shall be governed by, and shall be
construed in accordance with, the laws of the State of Delaware (without regard
to conflict of laws principles).

      11.14 BINDING AGREEMENT. Notwithstanding any other provision of this
Agreement, the Member agrees that this Agreement constitutes a legal, valid and
binding agreement of the Member and is enforceable against the Member by the
Independent Managers, in accordance with its terms. In addition, the Independent
Managers shall be intended beneficiaries of this Agreement.


                                       22
<PAGE>
      IN WITNESS WHEREOF, Member and the Independent Managers have executed this
Agreement, effective as of the date first written above.


731 COMMERCIAL HOLDING LLC
a Delaware limited liability company

By: Alexander's, Inc., member



        By:  /s/ Brian Kurtz
             ---------------------------------
             Name:   Brian Kurtz
                     -------------------------
             Title:  Assistant Secretary
                     -------------------------


INDEPENDENT MANAGERS:

/s/ Domenic A. Borriello
----------------------------------
Name:  Domenic A. Borriello


/s/ Kim E. Lutthans
----------------------------------
Name:  Kim E. Lutthans



                                       23
<PAGE>
                                  SCHEDULE 1.21



1.    Gap Note (the "Gap Note") made by the Company and Residential SPE to
      Lender in the principal amount of $500,000;

2.    Consolidated, Amended and Restated Building Loan Note (the "Building
      Loan Note") made by the Company and Residential SPE to each Lender in
      the aggregate principal amount of $55,500,000;

3.    Building Loan Agreement (the "Building Loan Agreement") made by and
      between the Company, Residential SPE and Lender with respect to the
      Building Loan (as defined in the Building Loan Agreement);

4.    Gap Mortgage (the "Gap Mortgage") given by the Company and Residential
      SPE to Lender as security for the Gap Note and covering the Property;

5.    Consolidated, Amended and Restated Building Loan Mortgage, Assignment
      of Leases and Rents and Security Agreement (the "Building Loan
      Mortgage") given by the Company and Residential SPE to Lender as
      security for the Building Loan Note and covering the Property;

6.    Assignment of Leases and Rents made by the Company and Residential SPE
      in favor of Lender as further security for the Building Loan Note;

7.    Project Loan Agreement made by and between the Company, Residential SPE
      and Lender with respect to the Project Loan (as defined in the Building
      Loan Agreement);

8.    Supplemental Loan Agreement made by and between the Company,
      Residential SPE and Lender with respect to the Supplemental Loan (as
      defined in the Building Loan Agreement);

9.    Environmental Indemnity Agreement made by the Company, Residential SPE
      and Alexander's, Inc. for the benefit of Lender;

10.   UCC-1 Fixture Financing Statements delivered by the Company and
      Residential SPE, as debtor, to Lender, as secured party relating to the
      Building Loan Mortgage;

11.   UCC-1 Financing Statements delivered by the Company and Residential
      SPE, as debtor, to Lender, as secured party relating to the Building
      Loan Mortgage;

12.   Subordination of Property Management and Development Agreement and Fees
      by and among the Company, Residential SPE, Lender and Vornado
      Management Corp.;

13.   Cash Collateral Agreement between the Company, Residential SPE and
      Lender;


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<PAGE>
14.   Assignment of Contracts, Licenses and Permits made by the Company and
      Residential SPE in favor of Lender; and

15.   Loan Fee Letter from the Company and Residential SPE to Lender.


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<PAGE>
                                 SCHEDULE 1.29


ALL THAT CERTAIN plot, piece or parcel of land, with the buildings and
improvements thereon erected, situate, lying and being in the Borough of
Manhattan, County, City and State of New York, bounded and described as follows:

            BEGINNING at the corner formed by the intersection of the northerly
line of East 58th Street with the easterly line of Lexington Avenue;

            RUNNING thence northerly, along the easterly line of Lexington
Avenue, 200'-10" to the corner formed by the intersection of the southerly line
of East 59th Street with the easterly line of Lexington Avenue;

            THENCE easterly, along the southerly line of East 59th Street,
420'-0" to the corner formed by the intersection of the southerly line of East
59th Street with the westerly line of Third Avenue;

            THENCE southerly, along the westerly line of Third Avenue, 200'-10"
to the corner formed by the intersection of the northerly line of East 58th
Street with the westerly line of Third Avenue;

            THENCE westerly, along the northerly line of East 58th Street,
420'-0" to the point or place of BEGINNING.

            LESS AND EXCEPT:

            All that portion of the below described parcel lying between a lower
horizontal plane drawn at elevation 512'-2" above the datum level used by the
Topographical Bureau, Borough of Manhattan, which is 2'-9" above National
Geodetic Survey Vertical Datum of 1929, mean sea level, Sandy Hook, New Jersey
and an upper horizontal plane drawn at 809'-2" above such datum level bounded
and described as follows:

            BEGINNING at a point distant 48'-8" north of the northerly line of
East 58th Street and 30'-9" east of easterly line of Lexington Avenue;

            RUNNING thence northerly, parallel with the easterly line of
Lexington Avenue, 12'-6";

            THENCE westerly, parallel with the northerly line of East 58th
Street, 5'-10";

            THENCE northerly, parallel with the easterly line of Lexington
Ave., 78'-6";

            THENCE easterly, parallel with the northerly line of East 58th
Street, 5'-10";


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<PAGE>
            THENCE northerly, parallel with the easterly line of Lexington
Avenue, 12'-6";

            THENCE easterly, parallel with the northerly line of East 58th
Street, 103'-6";

            THENCE southerly, parallel with the easterly line of Lexington
Avenue, 7'-6";

            THENCE easterly, parallel with the northerly line of East 58th
Street, 35"-0";

            THENCE southerly, parallel with the easterly line of Lexington
Avenue, 88'-6";

            THENCE westerly, parallel with the northerly line of East 58th
Street, 35-0";

            THENCE southerly, parallel with the easterly line of Lexington
Avenue, 7'-6";

            THENCE westerly, parallel with the northerly line of East 58th
Street, 103'-6" to the point or place of BEGINNING.


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