<PAGE>   1
                                                                Exhibit 10(v) A3



                            CASH MANAGEMENT AGREEMENT




                            Dated: as of May 31, 2001




                                      AMONG



                          ALEXANDER'S KINGS PLAZA, LLC,

                          ALEXANDER'S OF KINGS, LLC AND

                               KINGS PARKING, LLC
                            (collectively, Borrower),


                                       and


                    MORGAN GUARANTY TRUST COMPANY OF NEW YORK
                                    (Lender)
<PAGE>   2
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
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                                                                                   ----
<S>                                                                                <C>
1.   DEFINITIONS................................................................     2


2.   THE ACCOUNTS...............................................................     5

         Section 2.1       Establishment of Accounts............................     5
         Section 2.2       Deposits into Lockbox Account........................     5
         Section 2.3       Account Name.........................................     6
         Section 2.4       Eligible Accounts....................................     6
         Section 2.5       Permitted Investments................................     6

3.   DEPOSITS...................................................................     7

         Section 3.1       Transfer to the Cash Management Account..............     7
         Section 3.2       Disbursements from the Cash Management Account.......     7
         Section 3.3       The Initial Deposits.................................     8

4.   WITHDRAWALS................................................................     8

         Section 4.1       Withdrawals From the Cash Management Account.........     8
         Section 4.2       Sole Dominion and Control............................     8

5.   PLEDGE OF ACCOUNTS.........................................................     8

         Section 5.1       Security for Obligations.............................     8
         Section 5.2       Rights on Default....................................     9
         Section 5.3       Financing Statement; Further Assurances..............     9
         Section 5.4       Continuing Security Interest.........................     9

6.   RIGHTS AND DUTIES OF LENDER................................................     9

         Section 6.1       Reasonable Care......................................     9
         Section 6.2       Indemnity............................................    10
         Section 6.3       Reliance.............................................    10
         Section 6.4       Lender Appointed Attorney-In-Fact....................    10
         Section 6.5       Servicing............................................    10

7.   REMEDIES...................................................................    10

         Section 7.1       Remedies.............................................    10
         Section 7.2       Waiver...............................................    11

8.   MISCELLANEOUS..............................................................    11

         Section 8.1       Transfers and Other Liens............................    11
         Section 8.2       No Liability of Lender...............................    11
         Section 8.3       No Waiver............................................    11
         Section 8.4       Expenses.............................................    12
         Section 8.5       Entire Agreement.....................................    12
         Section 8.6       Successors and Assigns...............................    12
         Section 8.7       Notices..............................................    12
         Section 8.8       Captions.............................................    12
         Section 8.9       Governing Law........................................    12
</TABLE>

                                      -i-
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<TABLE>
<S>                        <C>                                                      <C>
         Section 8.10      Counterparts.........................................    12
         Section 8.11      Non-Recourse.........................................    12
</TABLE>

                                      -ii-
<PAGE>   4
                            CASH MANAGEMENT AGREEMENT

                  CASH MANAGEMENT AGREEMENT (this "AGREEMENT"), dated as of May
31, 2001, among, ALEXANDER'S KINGS PLAZA, LLC, a Delaware limited liability
company ("PLAZA LLC"), ALEXANDER'S OF KINGS, LLC, a Delaware limited liability
company ("KINGS LLC") and KINGS PARKING, LLC, a Delaware limited liability
company ("PARKING LLC") (collectively, "BORROWER"), and MORGAN GUARANTY TRUST
COMPANY OF NEW YORK, a New York banking corporation ("LENDER").

                              W I T N E S S E T H:

                  WHEREAS, Borrower is the owner of that certain real property
described on Exhibit A hereto (the "PROPERTY");

                  WHEREAS, Lender has made a loan (the "LOAN") to Borrower in
the principal amount of TWO HUNDRED TWENTY THREE MILLION and 00/100 Dollars
($223,000,000.00), which Loan is evidenced by an Amended, Restated and
Consolidated Promissory Note, dated as of the date hereof (the "NOTE"), made by
Borrower to Lender and secured by (i) a certain Amended, Restated and
Consolidated Mortgage and Security Agreement, dated as of the date hereof, made
by Borrower in favor of Lender (the "SECURITY INSTRUMENT"), (ii) a certain
Assignment of Leases and Rents, dated as of the date hereof, made by Borrower,
as assignor, to Lender, as assignee (the "ASSIGNMENT OF LEASES"), and (iii) the
Other Security Documents (as hereinafter defined);

                  WHEREAS, Lender has delivered to Agent (hereinafter defined),
an Instruction Letter in the form attached as EXHIBIT E hereto (together with
any modifications, amendments or replacements thereof, the "INSTRUCTION
LETTER"), which provides that all Rents be deposited in the Lockbox Account
(hereinafter defined) directly by each of the tenants at the Property and Agent
has acknowledged receipt of the Instruction Letter and agreed to comply with the
instructions contained therein by its execution of the Form of Acknowledgment
attached as Schedule 1 to the Instruction Letter;

                  WHEREAS, from and after the date hereof, all funds deposited
in the Lockbox Account shall be transferred by wire to the Cash Management
Account;

                  WHEREAS, pursuant to the Security Instrument and the
Assignment of Leases, Borrower has granted to Lender a security interest in all
of Borrower's right, title and interest in, to and under the Rents and other
revenues derived from or otherwise attributable or allocable to the Property,
and has absolutely assigned and conveyed to Lender all of Borrower's right,
title and interest in, to and under the Rents due and to become due to Borrower
or to which Borrower is now or may hereafter become entitled, arising out of the
Property or any part or parts thereof.

                  NOW, THEREFORE, in consideration of the agreements and
covenants hereinafter contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
<PAGE>   5
                  1. DEFINITIONS

                  As used herein, the following terms shall have the following
definitions:

                  "Account": shall mean the Lockbox Account and the Cash
Management Account.

                  "Affiliates": shall mean any Person, any other Person that,
directly or indirectly is in control of, is controlled by or is under common
control with such Person or is a director or officer of such Person or of an
Affiliate of such Person.

                  "Agent": shall mean First Union National Bank, together with
its successors and assigns, as agent under this Agreement, or any replacement
bank hereafter selected by Lender.

                  "Agreement": shall mean this Cash Management Agreement, dated
as of the date hereof, among the Borrower and Lender, as amended, supplemented
or otherwise modified from time to time.

                  "Applicable Interest Rate": as defined in the Note.

                  "Assignment of Leases": as defined in the Recitals hereto.

                  "Borrower": as defined in the first paragraph hereto, together
with its permitted successors and assigns.

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

                  "Collateral": as defined in Section 5.1.

                  "Debt": as defined in the Security Instrument.

                  "Default Rate": as defined in the Security Instrument.

                  "Eligible Account": shall mean an identifiable account,
separate from all other funds held by the holding institution that is either (i)
an account or accounts maintained with a federal or state chartered depository
institution or trust company which complies with the definition of Eligible
Institution or (ii) a segregated trust account or accounts maintained with a
federal or state chartered depository institution or trust company acting in its
fiduciary capacity which, in the case of a state chartered depository
institution or trust company is subject to regulations substantially similar to
12 C.F.R. Section 9.10(b), having in either case a combined capital and surplus
of at least Fifty Million Dollars and 00/100 ($50,000,000.00) and subject to
supervision or examination by federal and state authority. An Eligible Account
will not be evidenced by a certificate of deposit, passbook or other instrument.

                  "Eligible Bank": shall mean a bank that (i) satisfies the
Rating Criteria and (ii) is insured by the Federal Deposit Insurance
Corporation.


                                       2
<PAGE>   6
                  "Eligible Institution": shall mean a depository institution or
trust company that satisfies the Rating Criteria.

                  "Event of Default": as defined in the Security Instrument.

                  "Escrow Fund": as defined in Section 3.5 of the Security
Instrument.

                  "Ground Lease Escrow Fund": as defined in Section 3.19 of the
Security Instrument.

                  "Initial Deposit(s)": as defined in Section 3.3.

                  "Instruction Letter" shall have the meaning ascribed to such
term in the Recitals.

                  "Leasing Reserve Agreement" shall mean that certain Tenant
Improvement and Leasing Commission Reserve and Security Agreement dated the date
hereof between Borrower and Lender.

                  "Lender": Morgan Guaranty Trust Company of New York, together
with its successors and assigns.

                  "Lien": shall mean any mortgage, deed of trust, lien, pledge,
hypothecation, assignment, security instrument, or any other encumbrance, charge
or transfer of, on or affecting the Property or any portion thereof or Borrower,
or any interest therein, 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, the filing of any financing
statement, and mechanic's, materialman's or similar liens and encumbrances.

                  "Loan": as defined in the Recitals hereto.

                  "Loan Documents": shall mean collectively, this Agreement, the
Note, the Security Instrument, the Assignment of Leases and any other document
pertaining to the Property as well as all other documents executed and/or
delivered in connection with the Loan.

                  "Lockbox Account": as defined in Section 2.1(a).

                  "Management Agreement": shall mean that certain management
agreement, dated as of May 31, 2001, presently by and between Plaza LLC and/or
Kings LLC and Manager, or any future management agreement entered into with
respect to the Property in accordance with the terms and conditions of the Loan
Documents.

                  "Manager": Vornado Management Corp., and its permitted
successors and assigns.

                  "Monthly Administrative Fee": shall mean the monthly deposit
in the amount of $416.67 to ensure timely payment of the amount pursuant to
Section 3.5 of the Security Instrument.


                                       3
<PAGE>   7
                  "Monthly Ground Lease Deposit": shall mean the monthly deposit
to the Ground Lease Escrow Fund as calculated by Lender pursuant to Section 3.19
of the Security Instrument.

                  "Monthly Insurance Premium Deposit": shall mean the monthly
deposit to the Escrow Fund as calculated by Lender pursuant to Section 3.5(b) of
the Security Instrument to ensure the timely payment of Insurance Premiums.

                  "Monthly Leasing Reserve Deposit": shall mean the monthly
deposit as may be required by Lender pursuant to the Leasing Reserve Agreement.

                  "Monthly Payment": the payment of principal and/or interest
required to be made by Borrower to Lender pursuant to Article I of the Note.

                  "Monthly Payment Date": shall mean the date upon which each
Monthly Payment is due pursuant to the Note.

                  "Monthly Replacement Reserve Deposit": shall mean the Monthly
Deposit (as defined in the Replacement Reserve Agreement).

                  "Monthly Tax Deposit": shall mean the monthly deposit to the
Escrow Fund as calculated by Lender pursuant to Section 3.5(a) of the Security
Instrument to ensure the timely payment of Taxes.

                  "Note": as defined in the Recitals hereto.

                  "Obligations": as defined in Section 2.3 of the Security
Instrument.

                  "Other Charges": as defined in Section 3.4 of the Security
Agreement.

                  "Other Security Documents": as defined in Section 3.2 of the
Security Instrument.

                  "Permitted Investments": as defined in Exhibit B.

                  "Person": shall mean any individual, corporation, partnership,
limited liability company, joint venture, estate, trust, unincorporated
association, any federal, state, country of municipal government or any bureau,
department or agency thereof and any fiduciary acting in such capacity on behalf
of any of the foregoing.

                  "Policy"/"Policies": as defined in Section 3.3(b) of the
Security Instrument.

                  "Property": shall mean that certain real property listed in
Exhibit A.

                  "Rating Agencies": shall mean each of Standard & Poor's
Ratings Group, Moody's Investors Service, Inc., Fitch, Inc., or any other
nationally recognized statistical rating agency which has been approved by
Lender.

                  "Rating Criteria": shall mean with respect to any Person, the
short term unsecured debt obligations or commercial paper of which are rated at
least A-1 by Standard &


                                       4
<PAGE>   8
Poor's Ratings Group ("S&P"), P-1 by Moody's Investors Service, Inc., and F-1+
by Fitch, Inc. in the case of accounts in which funds are held for thirty (30)
days or less (or, in the case of accounts in which funds are held for more than
thirty (30) days, the long term unsecured debt obligations of which are rated at
least AA by Fitch, Inc. and S&P and Aa by Moody's).

                  "Rents": as defined in Section 1.1(h) of the Security
Instrument.

                  "Replacement Reserve Agreement": shall mean that certain
Replacement Reserve and Security Agreement dated the date hereof between
Borrower and Lender.

                  "Security Instrument": as defined in the Recitals hereto.

                  "Taxes": as defined in Section 3.4 of the Security Instrument.

                  "UCC": as defined in Section 5.1(a)(iv).

                  2. THE ACCOUNTS

                  SECTION 2.1. ESTABLISHMENT OF ACCOUNTS. (a) Borrower shall
establish an account with Agent into which Borrower shall deposit, or cause to
be deposited, all Rents (the "LOCKBOX ACCOUNT").

                  (b) Borrower acknowledges that Lender has established a
certain account (the "CASH MANAGEMENT ACCOUNT") into which all amounts
constituting available funds on deposit in the Lockbox Account will be
transferred.

                  SECTION 2.2. DEPOSITS INTO LOCKBOX ACCOUNT. Borrower
represents, warrants and covenants that (a) if a new Lockbox Account is
established, Borrower shall send a notice, substantially in the form of Exhibit
C, to all tenants now or hereafter occupying space at the Property directing
them to pay all Rent and other sums due under the lease to which they are a
party into the Lockbox Account ("TENANT INSTRUCTIONS"), (b) Borrower shall send
Tenant Instructions to any new tenants hereafter occupying the Property, (c)
Borrower shall send a notice, substantially in the form of Exhibit D attached
hereto, to Central Parking Corporation or such other agent now or hereafter
managing the parking garage facility located on the Property ("GARAGE MANAGER"),
directing the Garage Manager to send to the Lockbox Account all funds to be
remitted to Borrower or the Manager ("GARAGE MANAGER INSTRUCTION"), (d) Borrower
will immediately deposit all Rents and revenues it shall hereafter receive from
the Property, if any, into the Lockbox Account, (e) Borrower shall instruct the
Manager to immediately deposit all Rents and all other sums hereafter collected
by Manager, if any, pursuant to the Management Agreement into the Lockbox
Account, (f) there shall be no other accounts maintained by Borrower or any
other Person into which revenues from the ownership and operation of the
Property are directly deposited, (other than after they are disbursed to
Borrower pursuant to Section 3.2 hereof) (g) so long as the Note shall be
outstanding, neither Borrower nor any other Person shall open any other such
account with respect to the direct deposit of income in connection with the
Property, and (h) concurrently herewith, Lender and Borrower shall deliver an
executed Instruction Letter to the Agent. Borrower shall not change the bank,
bank location or account number of the Lockbox Account without Lender's prior
written consent. In the event


                                       5
<PAGE>   9
that Agent defaults under its obligations under the Instruction Letter or if
Agent's credit rating falls below "A" as determined by S&P, within ten (10)
Business Days after notice, Borrower will establish a new Eligible Account
(which shall become the Lockbox Account) at an Eligible Institution selected by
Borrower and reasonably approved by Lender and shall cause all funds in the
existing Lockbox Account to be transferred to the new Lockbox Account and any
future Rents from the Property to be deposited in such new Lockbox Account. Such
new bank shall also execute an instruction letter acceptable to Lender on a form
consistent with the Instruction Letter. Until deposited into the Lockbox
Account, any Rents and other revenues from the Property hereafter collected and
held by Borrower shall be deemed to be Collateral and shall be held in trust by
it for the benefit, and as the property, of Lender and shall not be commingled
with any other funds or property of Borrower. Notwithstanding anything to the
contrary set forth elsewhere herein, in no event shall Security Deposits (as
defined in the Security Instrument) be required to be deposited with Lender or
be subject to the provisions of this Agreement except as expressly provided in
Section 3.7(i) of the Security Agreement.

                  SECTION 2.3. ACCOUNT NAME.

                  (a) The Lockbox Account shall be in the name of Plaza LLC
established for the benefit of Lender and the Cash Management Account shall be
in the name of Lender.

                  (b) In the event Lender transfers or assigns the Loan,
Borrower, at Lender's request, shall change the name for whose benefit the
Lockbox Account is held to the of the transferee or assignee. In the event
Lender retains a servicer to service the Loan, Borrower, at Lender's request,
shall change the name of each account to the name of the servicer, as agent for
Lender.

                  SECTION 2.4. ELIGIBLE ACCOUNTS. Borrower and Agent shall
maintain each Account as an Eligible Account.

                  SECTION 2.5. PERMITTED INVESTMENTS. Notwithstanding anything
to the contrary contained in any of the other Loan Documents, sums on deposit in
the Cash Management Account and any other escrow or reserve account with respect
to the Loan, shall be invested in Permitted Investments provided (i) such
investments are then regularly offered by Lender's servicer for accounts of this
size, category and type, (ii) such investments are permitted by applicable
federal, state and local rules, regulations and laws, (iii) the maturity date of
the Permitted Investment is not later than the date on which sums in the Cash
Management Account are required to be applied by Lender and (iv) no Event of
Default shall have occurred and be continuing. Subject to the foregoing
sentence, Borrower shall have the right to direct Lender to invest sums on
deposit in the Cash Management Account and the other escrow and reserve accounts
in Permitted Investments. All income earned from Permitted Investments shall be
property of Borrower. Borrower hereby irrevocably authorizes and directs Lender
to hold any income earned from Permitted Investments as part of the Cash
Management Account. Borrower shall be responsible for payment of any federal,
state or local income or other tax applicable to income earned from Permitted
Investments. Notwithstanding anything to the contrary contained herein, at the
present time, the only Permitted Investment Lender can offer is in an interest
bearing money market account. No other investments of the sums on deposit in the
Accounts or any escrow account shall be permitted except as set forth in this
Section 2.5. The definition of


                                       6
<PAGE>   10
Permitted Investments shall be deemed to include only those "Permitted
Investments" then offered by Lender.

                  3. DEPOSITS

                  SECTION 3.1. TRANSFER TO THE CASH MANAGEMENT ACCOUNT. On June
10, 2001 and on each Business Day thereafter, Borrower shall cause Agent to
withdraw all funds on deposit in the Lockbox Account and immediately transfer
all such funds by wire transfer to Lender pursuant to written instructions from
Lender given the date hereof (as such instructions may be changed by Lender from
time to time thereafter) for deposit by Lender into the Cash Management Account.

                  SECTION 3.2. DISBURSEMENTS FROM THE CASH MANAGEMENT ACCOUNT.
Lender shall apply all funds on deposit in the Cash Management Account on the
tenth (10th) day of each month commencing on July 10, 2001 (and if such day is
not a Business Day then the preceding day which is a Business Day) in following
order of priority:

                  (a) First, funds sufficient to pay the Monthly Ground Lease
Deposit shall be deposited in the Ground Lease Escrow Fund;

                  (b) Second, funds sufficient to pay the Monthly Tax Deposit
shall be deposited in the Escrow Fund;

                  (c) Third, funds sufficient to pay the Monthly Insurance
Premium Deposit shall be deposited in the Escrow Fund;

                  (d) Fourth, funds sufficient to pay the Monthly Payment shall
be applied in accordance with the terms and provisions of the Note;

                  (e) Fifth, funds sufficient to pay the Monthly Replacement
Reserve Deposit shall be deposited into the Replacement Reserve to the extent
required and to be held and applied by Lender in accordance with the Replacement
Reserve Agreement;

                  (f) Sixth, funds sufficient to pay the Monthly Leasing Reserve
Deposit shall be deposited into the Leasing Reserve to the extent required and
to be held and applied by Lender in accordance with the Leasing Reserve
Agreement;

                  (g) Seventh, funds sufficient to pay any interest accruing at
the Default Rate, and late payment charges, if any, shall be applied by Lender
in accordance with the Loan Documents;

                  (h) Eighth, funds sufficient to pay the Monthly Administrative
Fee shall be applied by Lender;

                  (i) Ninth, if applicable, all amounts remaining in the Cash
Management after deposits for items (a) through (h) shall be applied by Lender
to fund the Extension Lease Reserve (as defined and provided for in that certain
Loan Document known as the Tenant Improvement


                                       7
<PAGE>   11
and Leasing Commission Reserve and Security Agreement) until the balance thereof
equals $1,200,000;

                  (j) Tenth, provided no Event of Default shall exist under the
Loan Documents, all amounts remaining in the Cash Management Account after
deposits for items (a) through (h) for the current month and all prior months
shall be disbursed to the Borrower.

                  SECTION 3.3. THE INITIAL DEPOSITS. At the closing of the Loan,
Lender shall determine, in its reasonable discretion, the initial deposit
amounts (the "INITIAL DEPOSITS") required to be deposited in each of the Ground
Lease Escrow Fund, the Escrow Fund, the Replacement Reserve and the Leasing
Reserve and shall notify Borrower of such amounts. Borrower shall deposit the
respective Initial Deposits into each Account.

                  4. WITHDRAWALS

                  SECTION 4.1. WITHDRAWALS FROM THE CASH MANAGEMENT ACCOUNT.
Lender shall have the right to withdraw funds from the Cash Management Account
in accordance with Section 3.2 hereof.

                  SECTION 4.2. SOLE DOMINION AND CONTROL. Borrower acknowledges
and agrees that the Accounts are subject to the sole dominion, control and
discretion of Lender, its authorized agents or designees, including Agent,
subject to the terms hereof; and Borrower shall have no right of withdrawal with
respect to any Account except with the prior written consent of Lender or as
otherwise provided herein.

                  5. PLEDGE OF ACCOUNTS

                  SECTION 5.1. SECURITY FOR OBLIGATIONS.

                  (a) To secure the full and punctual payment and performance of
all Obligations, Borrower hereby sells, assigns, conveys, pledges and transfers
to Lender a first priority continuing security interest in and to the following
property of Borrower, whether now owned or existing or hereafter acquired or
arising and regardless of where located (all of the same, collectively, the
"COLLATERAL"):

                           (i) the Accounts and all cash, checks, drafts,
certificates and instruments, if any, from time to time deposited or held in the
Accounts from time to time;

                           (ii) any and all amounts invested in Permitted
Investments;

                           (iii) all interest, dividends, cash, instruments and
other property from time to time received, receivable or otherwise payable in
respect of, or in exchange for, any or all of the foregoing; and

                           (iv) to the extent not covered by clauses (i) - (iii)
above, all "proceeds" (as defined under the Uniform Commercial Code as in effect
in the State in which the Accounts are located (the "UCC")) of any or all of the
foregoing.


                                       8
<PAGE>   12
                  (b) Lender shall have with respect to the Collateral, in
addition to the rights and remedies herein set forth, all of the rights and
remedies available to a secured party under the UCC, as if such rights and
remedies were fully set forth herein.

                  SECTION 5.2. RIGHTS ON DEFAULT. Upon the occurrence and
continuation of an Event of Default, (a) Borrower shall have no further right in
respect of (including, without limitation, the right to instruct Lender or Agent
to transfer from) the Accounts and no further distributions shall be made from
the Cash Management Account pursuant to Section 3.2(i) hereof, (b) Lender may
liquidate and transfer any amounts then invested in Permitted Investments to the
Accounts or reinvest such amounts in other Permitted Investments as Lender may
reasonably determine is necessary to perfect or protect any security interest
granted or purported to be granted hereby or pursuant to the other Loan
Documents or to enable Lender to exercise and enforce Lender's rights and
remedies hereunder or under any other Loan Document with respect to any
Collateral, and (c) Lender shall have all rights with respect to the Accounts
and the amounts on deposit therein as described herein and, notwithstanding
anything to the contrary contained herein, may apply the amounts of such
Accounts as Lender determines in its sole discretion including, but not limited
to, payment of the Debt.

                  SECTION 5.3. FINANCING STATEMENT; FURTHER ASSURANCES.
Simultaneously herewith, Borrower shall execute and deliver to Lender for filing
a financing statement or statements in connection with the Lockbox Account, the
Cash Management Account and the Collateral with respect thereto in the form
required to properly perfect Lender's security interest therein. Borrower agrees
that at any time and from time to time, at the expense of Borrower, Borrower
will promptly execute and deliver all further instruments and documents, and
take all further action, that may be reasonably necessary or desirable, or that
Lender may reasonably request, in order to perfect and protect any security
interest granted or purported to be granted hereby (including, without
limitation, any security interest in and to any Permitted Investments) or to
enable Lender to exercise and enforce its rights and remedies hereunder with
respect to any Collateral.

                  SECTION 5.4. CONTINUING SECURITY INTEREST. This Agreement
shall create a continuing security interest in the Collateral and shall remain
in full force and effect until payment in full of the Obligations. Upon payment
in full of the Obligations, this Agreement shall terminate and Borrower shall be
entitled to the return, upon its request and at its expense, of such of the
Collateral as shall not have been sold or otherwise applied pursuant to the
terms hereof, and Lender shall execute such instruments and documents as may be
reasonably requested by Borrower to evidence such termination and the release of
the lien hereof.

                  6. RIGHTS AND DUTIES OF LENDER

                  SECTION 6.1. REASONABLE CARE. Beyond the exercise of
reasonable care in the custody thereof, Lender shall have no duty as to any
Collateral in its possession or control as agent therefor or bailee thereof or
any income thereon or the preservation of rights against any person or otherwise
with respect thereto. Lender shall be deemed to have exercised reasonable care
in the custody and preservation of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which Lender
accords its own property, it being understood that Lender shall not be liable or
responsible for any loss or damage to any of the


                                       9
<PAGE>   13
Collateral, or for any diminution in value thereof, by reason of the act or
omission of Lender, its Affiliates, agents, employees or bailees, except to the
extent that such loss or damage results from Lender's gross negligence or
willful misconduct.

                  SECTION 6.2. INDEMNITY. Lender, in its capacity as secured
party hereunder, shall be responsible for the performance only of such duties as
are specifically set forth herein, and no duty shall be implied from any
provision hereof. Lender shall not be under any obligation or duty to perform
any act which would involve it in expense or liability or to institute or defend
any suit in respect hereof, or to advance any of its own monies. Borrower shall
indemnify and hold Lender, their respective employees and officers harmless from
and against any loss, cost or damage (including, without limitation, reasonable
attorneys' fees and disbursements) incurred by Lender in connection with the
transactions contemplated hereby, except to the extent that such loss or damage
results from Lender's gross negligence or willful misconduct.

                  SECTION 6.3. RELIANCE. Lender shall be protected in acting
upon any notice, resolution, request, consent, order, certificate, report,
opinion, bond or other paper, document or signature believed by it to be
genuine, and it may be assumed that any person purporting to act on behalf of
Borrower giving any of the foregoing in connection with the provision hereof has
been duly authorized to do so.

                  SECTION 6.4. LENDER APPOINTED ATTORNEY-IN-FACT. Borrower
hereby irrevocably constitutes and appoints Lender after an Event of Default has
occurred and is continuing as Borrower's true and lawful attorney-in-fact, with
full power of substitution, to execute, acknowledge and deliver any instruments
and to exercise and enforce every right, power, remedy, option and privilege of
Borrower with respect to the Collateral, and do in the name, place and stead of
Borrower, all such acts, things and deeds for and on behalf of and in the name
of Borrower, which Borrower could or might do or which Lender may deem necessary
or desirable to more fully vest in Lender the rights and remedies provided for
herein and to accomplish the purposes of this Agreement, provided, however, in
the absence of an Event of Default, Lender shall be entitled in the event that
Borrower fails to do so (after ten (10) days notice) to send Tenant
Instructions, to all tenants now or hereafter occupying space at the Property
and send a Garage Manager Instruction if applicable. The foregoing powers of
attorney are irrevocable and coupled with an interest. If Borrower fails to
perform any agreement herein contained and such failure shall continue for five
(5) Business Days after notice of such failure is given to Borrower, Lender may
perform or cause performance of any such agreement, and any reasonable expenses
of Lender and Agent in connection therewith shall be paid by Borrower.

                  SECTION 6.5. SERVICING. In the event that Lender retains a
servicer on its behalf to service the Loan and administer the provisions of this
Agreement, all references to Lender herein with respect to the administration of
the Cash Management Account shall be deemed to also include such servicer as
Lender may from time to time designate.

                  7. REMEDIES

                  SECTION 7.1. REMEDIES. Upon the occurrence of an Event of
Default, Lender may:


                                       10
<PAGE>   14
                  (a) without notice to Borrower, except as required by law, and
at any time or from time to time, charge, set-off and otherwise apply all or any
part of the Collateral against the Obligations or any part thereof;

                  (b) in its sole discretion, at any time and from time to time,
exercise any and all rights and remedies available to it under this Agreement,
and/or as a secured party under the UCC; and

                  (c) demand, collect, take possession of, receipt for, settle,
compromise, adjust, sue for, foreclose or realize upon the Collateral (or any
portion thereof) as Lender may determine in its sole discretion.

                  SECTION 7.2. WAIVER. Except as expressly provided herein,
Borrower hereby expressly waives, to the fullest extent permitted by law,
presentment, demand, protest or any notice of any kind in connection with this
Agreement or the Collateral. Borrower acknowledges and agrees that ten (10)
days' prior written notice of the time and place of any public sale of the
Collateral or any other intended disposition thereof shall be reasonable and
sufficient notice to Borrower within the meaning of the UCC.

                  8. MISCELLANEOUS

                  SECTION 8.1. TRANSFERS AND OTHER LIENS. Borrower agrees that
it will not (a) sell or otherwise dispose of any of the Collateral or (b) create
or permit to exist any Lien upon or with respect to all or any of the
Collateral, except for the Lien granted to Lender under this Agreement.

                  SECTION 8.2. NO LIABILITY OF LENDER. Notwithstanding the
Lender's right to perform certain obligations of Borrower, it is acknowledged
and agreed that Borrower retains control of the Property and operation thereof
and notwithstanding anything contained herein or Lender's exercise of any of its
rights or remedies hereunder, under the Loan Documents or otherwise at law or in
equity, Lender shall not be deemed to be a mortgagee-in-possession nor shall
Lender be subject to any liability with respect to the Property or otherwise
based upon any claim of lender liability.

                  SECTION 8.3. NO WAIVER. The rights and remedies provided in
this Agreement and the other Loan Documents are cumulative and may be exercised
independently or concurrently, and are not exclusive of any other right or
remedy provided at law or in equity. No failure to exercise or delay by Lender
in exercising any right or remedy hereunder or under the Loan Documents shall
impair or prohibit the exercise of any such rights or remedies in the future or
be deemed to constitute a waiver or limitation of any such right or remedy or
acquiescence therein. Every right and remedy granted to Lender under this
Agreement or by law may be exercised by Lender at any time and from time to
time, and as often as Lender may deem it expedient. Any and all of Lender's
rights with respect to the lien and security interest granted hereunder shall
continue unimpaired, and Borrower shall be and remain obligated in accordance
with the terms hereof, notwithstanding (a) any proceeding of Borrower under the
Federal Bankruptcy Code or any bankruptcy, insolvency or reorganization laws or
statutes or any state, (b) except if paid under Section 3.2, the release or
substitution of Collateral at any time, or of any


                                       11
<PAGE>   15
rights or interests therein or (c) any delay, extension of time, renewal,
compromise or other indulgence granted by the Lender in the event of any
default, with respect to the Collateral or otherwise hereunder. No delay or
extension of time by Lender in exercising any power of sale, option or other
right or remedy hereunder, and no notice or demand which may be given to or made
upon Borrower by Lender, shall constitute a waiver thereof, or limit, impair or
prejudice Lender's right, without notice or demand, to take any action against
Borrower or to exercise any other power of sale, option or any other right or
remedy. No waiver of any term or condition of this Agreement, whether by delay,
omission or otherwise, shall be effective unless in writing and signed by the
party sought to be charged, and then such waiver shall be effective only in the
specific instance and for the purpose for which given.

                  SECTION 8.4. EXPENSES. The Collateral shall secure, and
Borrower shall pay to Lender and Lender's counsel on demand, from time to time,
all reasonable costs and expenses (including, but not limited to, reasonable
attorneys' fees and disbursements, and transfer, recording and filing fees,
taxes and other charges) of, or incidental to, the creation or perfection of any
lien or security interest granted or intended to be granted hereby, the custody,
care, sale, transfer, administration, collection of or realization on the
Collateral, or in any way relating to the enforcement, protection or
preservation of the rights or remedies of Lender under this Agreement, the Note,
the Security Instrument, or the other Loan Documents. Standard and customary
fees and charges associated with the Accounts shall be paid by Borrower. Lender
acknowledges that no servicing fee shall be charged with respect to servicing
the Cash Management Account or collecting, holding and investing any other
escrow or reserve accounts other than the Monthly Administrative Fee.

                  SECTION 8.5. ENTIRE AGREEMENT. This Agreement constitutes the
entire and final agreement between the parties with respect to the subject
matter hereof and may not be changed, terminated or otherwise varied, except by
a writing duly executed by the parties.

                  SECTION 8.6. SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of the parties hereto, their respective
successors and permitted assigns.

                  SECTION 8.7. NOTICES. All notices required or permitted
hereunder shall be given and become effective as provided in the Security
Instrument.

                  SECTION 8.8. CAPTIONS. All captions in this Agreement are
included herein for convenience of reference only and shall not constitute part
of this Agreement for any other purpose.

                  SECTION 8.9. GOVERNING LAW. This Agreement shall be governed
by and construed and enforced in all respects in accordance with the laws of the
State of New York without regard to conflicts of law principles of such State.

                  SECTION 8.10. COUNTERPARTS. This Agreement may be executed in
any number of counterparts.

                  SECTION 8.11. NON-RECOURSE. Borrower's liability hereunder is
subject to the limitation on liability provisions of Article 14 of the Note,
which provisions are incorporated


                                       12
<PAGE>   16
herein by this reference, mutatis mutandis, and shall have the same force and
effect as if set forth in length herein.

                         [NO FURTHER TEXT ON THIS PAGE]




                                       13
<PAGE>   17
                  IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.

                                    BORROWER:

                                    ALEXANDER'S KINGS PLAZA, LLC, a Delaware
                                       limited liability company



                                    By:  /s/ Joseph Macnow
                                       -----------------------------------------
                                        Name:  Joseph Macnow
                                        Title: Executive Vice President


                                    ALEXANDER'S OF KINGS, LLC, a Delaware
                                       limited liability company



                                    By:  /s/ Joseph Macnow
                                       -----------------------------------------
                                        Name:  Joseph Macnow
                                        Title:  Executive Vice President

                                    KINGS PARKING, LLC,
                                       a Delaware limited liability company



                                    By:  /s/ Joseph Macnow
                                       -----------------------------------------
                                        Name:    Joseph Macnow
                                        Title:   Executive Vice President
<PAGE>   18
                  IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.



                                    LENDER:


                                    MORGAN GUARANTY TRUST COMPANY OF NEW YORK, a
                                       New York banking corporation


                                    By:  /s/ Steven Z. Schwartz
                                       -----------------------------------------
                                        Name: Steven Z. Schwartz
                                        Title: Managing Director
<PAGE>   19
                                    EXHIBIT A

                                  THE PROPERTY






























                                    EXH. A-1
<PAGE>   20
                                    EXHIBIT B

                  "Permitted Investments" means: any one or more of the
following obligations or securities acquired at a purchase price of no greater
than par and payable on demand or having a scheduled maturity on or before the
Business Day preceding the date upon which such funds are required to be drawn,
regardless of whether issued by Lender, the servicer of the Loan, the trustee
under any securitization of the Loan or any of their respective Affiliates and
having at all times the required ratings, if any, provided for in this
definition, unless each Rating Agency shall have confirmed in writing to the
Servicer that a lower rating would not, in and of itself, result in a downgrade,
qualification or withdrawal of the then current ratings assigned to the
Securities:

                  (i) obligations of, or obligations fully guaranteed as to
payment of principal and interest by, the United States or any agency or
instrumentality thereof provided such obligations are backed by the full faith
and credit of the United States of America including, without limitation,
obligations of: the U.S. Treasury (all direct or fully guaranteed obligations),
the Farmers Home Administration (certificates of beneficial ownership), the
General Services Administration (participation certificates), the U.S. Maritime
Administration (guaranteed Title XI financing), the Small Business
Administration (guaranteed participation certificates and guaranteed pool
certificates), the U.S. Department of Housing and Urban Development (local
authority bonds) and the Washington Metropolitan Area Transit Authority
(guaranteed transit bonds); provided, however, that the investments described in
this clause must (A) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (B) if rated by S&P, must not have an "r"
highlighter affixed to their rating, (C) if such investments have a variable
rate of interest, such interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must move proportionately with that
index, and (D) such investments must not be subject to liquidation prior to
their maturity;

                  (ii) Federal Housing Administration debentures;

                  (iii) obligations of the following United States government
sponsored agencies: Federal Home Loan Mortgage Corp. (debt obligations), the
Farm Credit System (consolidated system wide bonds and notes), the Federal Home
Loan Banks (consolidated debt obligations), the Federal National Mortgage
Association (debt obligations), the Student Loan Marketing Association (debt
obligations), the Financing Corp. (debt obligations), and the Resolution Funding
Corp. (debt obligations); provided, however, that the investments described in
this clause must (A) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (B) if rated by S&P, must not have an "r"
highlighter affixed to their rating, (C) if such investments have a variable
rate of interest, such interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must move proportionately with that
index, and (D) such investments must not be subject to liquidation prior to
their maturity;

                  (iv) federal funds, unsecured certificates of deposit, time or
similar deposits, bankers' acceptances and repurchase agreements, with
maturities of not more than 365 days, of any bank, the short term obligations of
which are rated in the highest short term rating category by each Rating Agency
(or, if such obligations are not rated by Moody's Investors Service, Inc. or
Fitch, Inc., otherwise acceptable to Moody's Investors Service, Inc. or Fitch,
Inc., as applicable, as confirmed in writing that such investment would not, in
and of itself, result in a

                                    EXH. B-1
<PAGE>   21
downgrade, qualification or withdrawal of the then current ratings assigned to
the Securities); provided, however, that the investments described in this
clause must (A) have a predetermined fixed dollar of principal due at maturity
that cannot vary or change, (B) if rated by S&P, must not have an "r"
highlighter affixed to their rating, (C) if such investments have a variable
rate of interest, such interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must move proportionately with that
index, and (D) such investments must not be subject to liquidation prior to
their maturity;

                  (v) fully Federal Deposit Insurance Corporation-insured demand
and time deposits in, or certificates of deposit of, or bankers' acceptances
issued by, any bank or trust company, savings and mortgage loan association or
savings bank, the short term obligations of which are rated in the highest short
term rating category by each Rating Agency (or, if such obligations are not
rated by Moody's Investors Service, Inc. or Fitch, Inc., otherwise acceptable to
Moody's Investors Service, Inc. or Fitch, Inc., as applicable, as confirmed in
writing that such investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the then current ratings assigned to the
Securities); provided, however, that the investments described in this clause
must (A) have a predetermined fixed dollar of principal due at maturity that
cannot vary or change, (B) if rated by S&P, must not have an "r" highlighter
affixed to their rating, (C) if such investments have a variable rate of
interest, such interest rate must be tied to a single interest rate index plus a
fixed spread (if any) and must move proportionately with that index, and (D)
such investments must not be subject to liquidation prior to their maturity;

                  (vi) debt obligations with maturities of not more than 365
days rated by each Rating Agency (or, if such obligations are not rated by
Moody's Investors Service, Inc. or Fitch, Inc., otherwise acceptable to Moody's
Investors Service, Inc. or Fitch, Inc., as applicable, as confirmed in writing
that such investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the then current ratings assigned to the
Securities) in its highest long-term unsecured rating category; provided,
however, that the investments described in this clause must (A) have a
predetermined fixed dollar of principal due at maturity that cannot vary or
change, (B) if rated by S&P, must not have an "r" highlighter affixed to their
rating, (C) if such investments have a variable rate of interest, such interest
rate must be tied to a single interest rate index plus a fixed spread (if any)
and must move proportionately with that index, and (D) such investments must not
be subject to liquidation prior to their maturity;

                  (vii) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on demand or on a
specified date not more than one (1) year after the date of issuance thereof)
with maturities of not more than 365 days and that is rated by each Rating
Agency (or, if such obligations are not rated by Moody's Investors Service, Inc.
or Fitch, Inc., otherwise acceptable to Moody's Investors Service, Inc. or
Fitch, Inc., as applicable, as confirmed in writing that such investment would
not, in and of itself, result in a downgrade, qualification or withdrawal of the
then current ratings assigned to the Securities) in its highest short-term
unsecured debt rating; provided, however, that the investments described in this
clause must (A) have a predetermined fixed dollar of principal due at maturity
that cannot vary or change, (B) if rated by S&P, must not have an "r"
highlighter affixed to their rating, (C) if such investments have a variable
rate of interest, such interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must move

                                    EXH. B-2
<PAGE>   22
proportionately with that index, and (D) such investments must not be subject to
liquidation prior to their maturity;

                  (viii) the Federated Prime Obligation Money Market Fund (the
"Fund") so long as the Fund is rated as AAAm or AAAm-G by S&P or AAA by each
other Rating Agency (or, if such obligations are not rated by S&P, Moody's
Investors Service, Inc. or Fitch, Inc., otherwise acceptable to S&P, Moody's
Investors Service, Inc. or Fitch, Inc., as applicable, as confirmed in writing
that such investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the then current ratings assigned to the
Securities); and

                  (ix) any other demand, money market or time deposit, demand
obligation or any other obligation, security or investment, provided that each
Rating Agency has confirmed in writing to the Servicer, special servicer (if
any) or Trustee, as applicable, that such investment would not, in and of
itself, result in a downgrade, qualification or withdrawal of the then current
ratings assigned to the Securities;

provided, however, that, (a) in the judgment of the Servicer, such instrument
continues to qualify as a "cash flow investment" pursuant to Section 860G(a)(6)
of the Code earning a passive return in the nature of interest, and (b) that no
instrument or security shall be a Permitted Investment if (i) such instrument or
security evidences a right to receive only interest payments, (ii) the right to
receive principal and interest payments derived from the underlying investment
provides a yield to maturity in excess of one hundred twenty percent (120%) of
the yield to maturity at par of such underlying investment, or (iii) such
instrument or security has a maturity of more than 365 days.


                                    EXH. B-3
<PAGE>   23
                                    EXHIBIT C

                              LETTER OF INSTRUCTION

                               __________ __, 2001

                             [TENANTS UNDER LEASES]

         Re:   Lease dated __________ between _____________, as
               Landlord, and _______________, as Tenant, concerning
               premises known as Kings Plaza Shopping Center


Gentlemen:


                  This letter shall constitute notice to you that the
undersigned has granted a security interest in the captioned lease and all
rents, additional rent and all other monetary obligations to landlord thereunder
(collectively, "RENT") in favor of Morgan Guaranty Trust Company of New York,
its successors and assigns, as lender ("LENDER"), to secure certain of the
undersigned's obligations to Lender. The undersigned hereby irrevocably
instructs and authorizes you to disregard any and all previous notices sent to
you in connection with Rent and hereafter to deliver by wire transfer of
immediately available funds or by check all Rent as follows:

                  If by check:


                                    [Alexander's]


                  If by wire:

                                    ____________________
                                    ____________________
                                    ____________________
                                    ____________________
                                    ____________________

                  The instructions set forth herein are irrevocable and are not
subject to modification in any manner, except that Morgan Guaranty Trust Company
of New York, under that certain Cash Management Agreement dated as of
[__________, 2001] between the undersigned and Lender, or any successor lender
so identified by Lender, may by written notice to you rescind the instructions
contained herein.


                                                 Sincerely,


                                                 [BORROWER]



                                    EXH. C-1
<PAGE>   24
                                    EXHIBIT D

                              LETTER OF INSTRUCTION

                               __________ __, 2001

                                [GARAGE MANAGER]

       Re:  Management Agreement dated __________ between _____________,
            as Owner, and _______________, as Agent, concerning premises
            known as Kings Plaza Shopping Center

Gentlemen:

                  This letter shall constitute notice to you that the
undersigned has granted a security interest in the captioned management
agreement and all rents, additional rent and all other monetary obligations to
owner thereunder (collectively, "RENT") in favor of Morgan Guaranty Trust
Company of New York, its successors and assigns, as lender ("LENDER"), to secure
certain of the undersigned's obligations to Lender. The undersigned hereby
irrevocably instructs and authorizes you to disregard any and all previous
notices sent to you in connection with Rent and hereafter to deliver by wire
transfer of immediately available funds or by check all Rent as follows:

                  If by check:


                                    [Alexander's]


                  If by wire:


                                    ____________________
                                    ____________________
                                    ____________________

                  The instructions set forth herein are irrevocable and are not
subject to modification in any manner, except that Morgan Guaranty Trust Company
of New York, under that certain Cash Management Agreement dated as of ________,
2001 between the undersigned and Lender, or any successor lender so identified
by Lender, may by written notice to you rescind the instructions contained
herein.


                                          Sincerely,


                                          [BORROWER]



                                    EXH. D-1
<PAGE>   25
                                    EXHIBIT E

                            AGENT INSTRUCTION LETTER
                                 [_______], 2001

                      [TO BE SIGNED BY BORROWER AT CLOSING]


FIRST UNION NATIONAL BANK
[INSERT CONTACT NAME AND TEL. NUMBER]


                  Re:   KINGS PLAZA SHOPPING CENTER

Ladies and Gentlemen:

                  ALEXANDER'S KINGS PLAZA,LLC, a Delaware limited liability
company, ALEXANDER'S OF KINGS, LLC, a Delaware limited liability company and
KINGS PARKING, LLC, a Delaware limited liability company (collectively
"BORROWER") has entered into a Amended, Restated and Consolidated Mortgage and
Security Agreement, dated as of [___________, 2001] (the "MORTGAGE") with MORGAN
GUARANTY TRUST COMPANY OF NEW YORK (together with its successors and assigns,
"LENDER"), pursuant to which Lender has provided financing (the "LOAN") to
Borrower secured by the property described in the caption of this Instruction
Letter (the "PROPERTY"). The Property is currently being managed by Vornado
Realty Trust ("MANAGER").

                  Currently, the Borrower has on the date hereof established the
following account (the "LOCKBOX ACCOUNT") with you:

                  Name:
                  Account Name:
                  Account No.:
                  Ref:

                  Borrower hereby notifies you that Lender has required that it
implement certain automatic clearing and processing functions and hereby
instructs you, commencing on the date hereof, to disburse all revenues from the
Property ("REVENUES") deposited in the Lockbox Account from time to time in
accordance with the following terms and provisions:

                  1. Concurrently herewith, you shall establish a post office
box address in which Borrower shall cause all Revenues in the form of wire
transfers, checks, money orders and similar instruments to be delivered. Within
one business day of receipt, you shall receive and process all Revenues and
shall deposit the same into the Lockbox Account referred to above. Checks made
payable to Borrower, the Manager, the Property or the Lockbox Account shall be
deemed suitable for deposit in the Lockbox Account. Items deposited with you
that are returned for insufficient or uncollected funds will be redeposited the
first time. Items returned unpaid a second time shall be processed in accordance
with your standard procedures.


                                    EXH. E-1
<PAGE>   26
                  2. The Lockbox Account shall be an account of Borrower but
shall be under the sole dominion and control of Lender and any servicer of the
Loan (a "SERVICER") or other designee of Lender named below or in a subsequent
written notice from Lender. You shall follow the written instructions of Lender
only. The Lockbox Account shall be assigned the federal tax identification
number of Borrower, which number is [___________]. You shall hold amounts on
deposit in the Lockbox Account as agent for Lender and shall not commingle such
amounts with any other amounts held by you on behalf of Lender, Borrower or any
other person or entity.

                  3. Borrower hereby notifies you that, in accordance with that
certain Cash Management Agreement, dated as of [___________], 2001, among
Borrower and Lender (the "CASH MANAGEMENT AGREEMENT"), the Lockbox Account and
all amounts held therein from time to time, and all renewals, replacements and
substitutions therefor, have been irrevocably pledged to Lender, and Lender has
been granted a first priority security interest therein, as additional security
for the Loan. In connection with such pledge, Borrower and Manager hereby
irrevocably waive all right of withdrawal from the Lockbox Account.

                  4. Beginning on June 10, 2001, Borrower hereby irrevocably
instructs (which instructions may from time to time be amended by Lender in
writing) and authorizes you to disburse on each Business Day, and at any time
the available funds on deposit in the Lockbox Account are equal to or greater
than [$_______], via the ACH System, if available, or otherwise by wire
transfer, all amounts constituting available funds on deposit in the Lockbox
Account the following account:

         BANK:
         ABA #:
         ACCT. NAME:
         ACCT. NO.:
         REF.:

                  5. Lender shall be entitled to exercise any and all rights of
Borrower in respect of the Lockbox Account and Borrower and Manager hereby
irrevocably authorize Lender to give you instructions and directions in respect
of the Lockbox Account as Lender may deem necessary or desirable in order to
effectuate the provisions of this Instruction Letter and the Cash Management
Agreement.

                  6. You shall be entitled to rely upon the accuracy, act in
reliance upon the contents and assume the genuineness, of any notice,
instruction, certificate, signature, instrument or document which is given to
you pursuant to this Agreement without the necessity of your verifying the truth
or accuracy thereof. You shall not be obligated to make any inquiry as to the
authority, capacity, existence or identity of any person purporting to give any
such notice or instruction or to execute any such certificate, instrument or
document. You shall have no duty to Borrower, Lender, Manager or any other
person or in connection with the Clearing Account except as set forth in this
Agreement.

                                    EXH. E-2
<PAGE>   27
                  7. The instructions set forth herein are irrevocable and are
not subject to modification in any manner, except that Lender or the Servicer
may, by written notice to you, amend the instructions contained herein.

                  8. In the event that you fail to acknowledge that its
procedures with respect to the Lockbox Account are governed by this letter due
to an objection to the terms hereof or otherwise, Borrower and Manager each
hereby appoints Lender as its attorney-in-fact with full authority to make
changes to this letter and to execute on behalf of Borrower and/or Manager any
new modified letter acceptable to you.

                  9. Matters not covered by this letter shall be determined in
accordance with your customary procedures and in the event of a conflict between
the terms of this letter and your customary procedures, the terms of this letter
shall govern.

                  10. The undersigned also notifies you that the name and
address of the current Servicer with respect to the Cash Management Agreement
is: [NAME AND ADDRESS OF SERVICER]

                  If you have any questions concerning this letter or the Cash
Management Agreement, please contact [NAME OF BANKER] of Lender at
____________________ or ______________ of the Servicer at [__________________].

         The address of the current Manager is:
                  [_______________________]
                  [_______________________]
                  [_______________________]


                                    EXH. E-3
<PAGE>   28
                  Please acknowledge receipt of this letter and your agreement
to the terms described herein by executing and returning to Borrower an
acknowledgment in the form of Schedule 1 hereto.


                                                          [BORROWER]


                                                          [MANAGER]



ACKNOWLEDGED AND AGREED:

MORGAN GUARANTY TRUST COMPANY OF NEW YORK

By:  ____________________________
     Name:
     Title:














                                    EXH. E-4
<PAGE>   29
                                                                      SCHEDULE 1

                             FORM OF ACKNOWLEDGMENT

                               [________ __], 2001


[BORROWER]



MORGAN GUARANTY TRUST COMPANY OF NEW YORK


Attention:  [NAME OF BANKER]

Gentlemen:

                  Reference is made to that certain Instruction Letter dated as
of [______], 2001 (the "INSTRUCTION LETTER") from ALEXANDER'S KINGS PLAZA, LLC,
ALEXANDER'S OF KINGS, LLC AND KINGS PARKING, LLC (collectively, "BORROWER") and
Manager (as defined in the Instruction Letter). I, [__________], on behalf of
[BANK] (the "BANK"), hereby acknowledge receipt of the instructions set forth in
the Instruction Letter and notice of the pledges and security interest described
therein. The Bank hereby agrees to recognize the pledges and security interest
described therein and to perform the instructions set forth in the Instruction
Letter.

                  If you have any questions, please call [__________________] at
([___]) [___]-[______].


                                               [FIRST UNION NATIONAL BANK]


                                               By:_____________________________
                                                   Name:
                                                   Title:

LOCK BOX ADDRESS:
[_____________________________]
[_____________________________]
[_____________________________]


                                    SCH. 1-1