INDEMNIFICATION AND PLEDGE AGREEMENT


                                                            New York, New York
                                                             December 13, 1999


       Reference is made to the Loan Agreement, dated as of the date hereof (the
"Credit Agreement"), between 1290 Partners, L.P. (the "Partnership") and General
Electric Capital Corporation,  relating to certain premises located in New York,
New York and more  commonly  known as 1290  Avenue of the  Americas  (the  "1290
Property").

       Apollo Real Estate  Investment  Fund,  L.P.  ("Apollo")  is the holder of
4,936,060  shares of the  Common  Stock,  par value  $10.00  per share  ("Common
Stock"),   of  Metropolis  Realty  Trust,  Inc.   ("Metropolis"),   representing
approximately 38% of the outstanding  shares of Common Stock.  Metropolis is the
owner of a 94.05% interest, as a limited partner, of the Partnership.

       Pursuant to Section  8.1(1)(d) of the Credit  Agreement,  the Partnership
agreed not to permit any  transfers of the Common Stock which would cause Apollo
to own less than 30% of the outstanding shares of Common Stock (the "Shares").

       Apollo  will  derive  a  substantial  benefit  from  the  closing  of the
transaction contemplated by the Credit Agreement.

       1. Indemnity. In consideration of the agreement of the Partnership to the
provisions  of  Section   8.1(1)(d)  of  the  Credit  Agreement  (the  "Transfer
Restriction") Apollo hereby agrees to defend,  indemnify,  and hold harmless the
Partnership and its partners (and their respective stockholders and partners, as
the case may be) and successors and assigns  (collectively,  the "Indemnitees"),
from and  against  any and all  claims,  demands,  penalties,  causes of action,
fines,  liabilities,  settlements,  damages  (but  excluding  consequential  and
punitive  damages),  costs or expenses  arising out of, or in any way related to
the  transfer by Apollo of any of the Shares in  contravention  of the  Transfer
Restrictions (a "Default"). The indemnity obligations of Apollo pursuant to this
Section 1 are hereinafter referred to as the "Indemnity Obligations".

       2.  Pledge.  As security for the payment and  performance  in full of the
Indemnity  Obligations,   Apollo  hereby  transfers,  grants,  bargains,  sells,
conveys, hypothecates,  pledges, sets over, endorses over, and delivers unto the
Partnership, for its own benefit and for the benefit of the other Indemnitees, a
security  interest  in,  (a)  4,000,000  shares of Common  Stock  (the  "Pledged
Stock"),  (b) subject to Section 6 below,  all  proceeds  of the Pledged  Stock,
including,  without  limitation,  all cash,  securities or other property at any
time and from time to time receivable or otherwise  distributed in respect of or
in  exchange  for any of or all such  Pledged  Stock (the  items  referred to in
clauses (a) and (b) being collectively  called the "Collateral").  Upon delivery
to the Partnership,  any securities now or hereafter  included in the Collateral
including,  without  limitation,  the Pledged Stock (the  "Pledged  Securities")
shall




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be  accompanied  by  undated  stock  powers  duly  executed  in  blank  or other
instruments  of  transfer  satisfactory  to the  Partnership  and by such  other
instruments  and  documents as the  Partnership  may  reasonably  request.  Each
delivery of Pledged  Securities  shall be  accompanied  by a schedule  showing a
description  of the  securities  theretofore  and then being pledged  hereunder,
which  schedule  shall be attached  hereto as Schedule I and made a part hereof.
Each schedule so delivered shall supersede any prior schedules so delivered.

       3. Delivery of Collateral.  Apollo agrees to deliver promptly or cause to
be delivered to the Partnership any and all Pledged Securities,  and any and all
certificates  or  other  instruments  or  documents   representing  any  of  the
Collateral (together with any necessary endorsement).

       4. Representations,  Warranties and Covenants.  Apollo hereby represents,
warrants and covenants to and with the Partnership:

       (a) except for the security  interest granted to the Partnership,  Apollo
(i) is and, subject to the provisions of the Credit Agreement, will at all times
continue  to be the direct  owner,  beneficially  and of record,  of the Pledged
Securities that it is pledging  hereunder,  (ii) holds the Collateral that it is
pledging  hereunder  free and  clear of all  liens,  charges,  encumbrances  and
security interests of every kind and nature, and the Pledged Stock is subject to
no options to purchase or any similar or other rights of any person,  (iii) will
make no assignment,  pledge,  hypothecation or, subject to the provisions of the
Credit  Agreement,  transfer  of,  or  create  any  security  interest  in,  the
Collateral  that it is pledging  hereunder  including,  without  limitation,  by
virtue of becoming  bound by any  agreement  which  restricts  in any manner the
rights  of any  present  or future  holder of any  Pledged  Stock  with  respect
thereto, and (iv) subject to Section 6 below, will cause any and all Collateral,
whether for value paid by Apollo or otherwise,  to be forthwith  deposited  with
the Partnership and pledged or assigned hereunder;

       (b)  Apollo  (i) has  good  right  and  legal  authority  to  pledge  the
Collateral it is pledging  hereunder in the manner hereby done or  contemplated,
(ii) will not amend, modify or supplement any Pledged Security without the prior
written consent of the Partnership,  nor forgive any  indebtedness  evidenced by
any Pledged  Security,  and (iii) will  defend its title or interest  thereto or
therein against any and all attachments,  liens, claims, encumbrances,  security
interests or other  impediments of any nature,  however arising,  of all persons
whomsoever;

       (c) no  consent  or  approval  of any  governmental  body  or  regulatory
authority or any securities  exchange was or is necessary to the validity of the
pledge effected hereby;

       (d) by virtue of the execution and delivery by Apollo of this  Agreement,
when the certificates, instruments or other documents representing or evidencing
the  Collateral  are  delivered  to the  Partnership  in  accordance  with  this
Agreement, the Partnership will obtain a valid and perfected first lien upon and
security  interest in such  Collateral  as security for the  performance  of the
Indemnity  Obligations,  prior to all other liens and  encumbrances  thereon and
security interests therein;


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       (e) the pledge  effected  hereby is effective to vest in the  Partnership
the rights of the Partnership in the Collateral as set forth herein; and

       (f) all of the Pledged Stock has been duly  authorized and validly issued
and as of the date hereof,  the Pledged Stock  constitutes  approximately 30% of
the issued and outstanding shares of Common Stock.

All  representations,  warranties  and  covenants  of Apollo  contained  in this
Agreement  shall  survive  the  execution,  delivery  and  performance  of  this
Agreement until the termination of this Agreement pursuant to Section 14 hereof.

       5. Registration in Nominee Name;  Denominations.  Upon the occurrence and
during the continuance of a Default,  the  Partnership  shall have the right (in
its sole and absolute  discretion with subsequent  notice to Apollo) to transfer
to or to  register  the  Pledged  Securities  in its own name or the name of its
nominee.  In  addition,  the  Partnership  shall at all times  have the right to
exchange the certificates  representing  Pledged  Securities for certificates of
smaller or larger denominations for any purpose consistent with this Agreement.

       6.  Voting  Rights;  Dividends;  etc.  (a)  Unless  and  until a  Default
hereunder shall have occurred and be continuing:

           (i) Apollo  shall be entitled to exercise  any and all voting  and/or
consensual  rights and powers accruing to an owner of Pledged  Securities or any
part thereof for any purpose not  inconsistent  with the terms of this Agreement
and the Credit  Agreement;  provided that such action would not adversely affect
the  rights  inuring  to the  Partnership  or the other  Indemnitees  under this
Agreement or the Credit Agreement or adversely affect the rights and remedies of
the  Partnership  or the other  Indemnitees  under this  Agreement or the Credit
Agreement or the ability of the Partnership or the other Indemnitees to exercise
the same.

           (ii) The Partnership shall execute and deliver to Apollo, or cause to
be executed and delivered to Apollo, all such proxies,  powers of attorney,  and
other  instruments as Apollo may reasonably  request for the purpose of enabling
Apollo to exercise the voting and/or consensual rights and powers which they are
entitled to exercise pursuant to subparagraph (i) above.

           (iii) Apollo shall be entitled to receive and retain any and all cash
dividends  paid on the  Pledged  Securities  only to the  extent  that such cash
dividends are permitted by, and otherwise paid in accordance  with the terms and
conditions of, the Credit Agreement and applicable laws. Any and all

                  a. noncash dividends,

                  b. stock or dividends  paid or payable in cash or otherwise in
connection with a partial or total liquidation or dissolution, and

                  c. instruments,  securities,  other distributions in property,
return of capital,  capital  surplus or paid-in  surplus or other  distributions
made on or in respect of Pledged Securities (other than dividends

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permitted  by  this  Section  6(a)(iii)),  whether  paid or  payable  in cash or
otherwise, whether resulting from a subdivision, combination or reclassification
of the  outstanding  capital  stock of the issuer of any Pledged  Securities  or
received  in  exchange  for  Pledged  Securities  or  any  part  thereof,  or in
redemption  thereof,  as a result of any merger,  consolidation,  acquisition or
other exchange of assets to which such issuer may be a party or otherwise, shall
be and become part of the Collateral,  and, if received by Apollo,  shall not be
commingled  by Apollo with any of its other funds or property  but shall be held
separate  and apart  therefrom,  shall be held in trust for the  benefit  of the
Partnership and the other  Indemnitees  and shall be forthwith  delivered to the
Partnership in the same form as so received (with any necessary endorsement).

       (b) Upon the  occurrence  and during the  continuance  of a Default,  all
rights of Apollo to receive any dividends  which Apollo is authorized to receive
pursuant to  paragraph  (a)(iii)  of this  Section 6 shall  cease,  and all such
rights shall thereupon  become vested in the  Partnership,  which shall have the
sole and exclusive right and authority to receive and retain such dividends. All
dividends  which are  received  by Apollo  contrary  to the  provisions  of this
Section  6(b) shall be  received  in trust for the  benefit of the  Partnership,
shall  be  segregated  from  other  property  or funds of  Apollo  and  shall be
forthwith  delivered to the  Partnership  as  Collateral  in the same form as so
received (with any necessary endorsement).  Any and all money and other property
paid over to or received by the  Partnership  pursuant to the provisions of this
Section 6 shall be retained by the  Partnership  in an account to be established
by the  Partnership  upon  receipt of such money or other  property and shall be
applied in accordance with the provisions of Section 9 hereof.

       (c) Upon the  occurrence  and during the  continuance  of a Default,  all
rights of Apollo to exercise the voting and  consensual  rights and powers which
it is entitled to exercise pursuant to Section 6(a)(i) shall cease, and all such
rights shall thereupon  become vested in the  Partnership,  which shall have the
sole and exclusive  right and  authority to exercise such voting and  consensual
rights and powers.

       (d) As long as the  Credit  Agreement  remains in effect and until all of
the Indemnity  Obligations have been paid fully and  indefeasibly,  any payments
made in  respect  of the  Pledged  Securities  shall be and  become  part of the
Collateral,  and, if received by Apollo,  shall not be commingled by Apollo with
any of its  other  funds or  property  but  shall  be held  separate  and  apart
therefrom,  shall be held in trust for the  benefit of the  Partnership  and the
other  Indemnitees  and shall be forthwith  delivered to the  Partnership in the
same form as so received.

       7.  Supplemental  Documentation.  In  connection  with the  execution and
delivery of this Agreement, Apollo shall furnish or cause to be furnished to the
Partnership  on  or  prior  to  the  Closing  Date  a  certificate  signed  by a
responsible officer of Apollo dated the Closing Date, certifying that, as of the
date of such  certificate,  all  representations  and  warranties  of  Apollo in
Section 4 hereof are true and correct and that Apollo is in compliance  with all
conditions, agreements and covenants to be observed or performed hereunder.


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       8.  Remedies  upon  Default.  If a Default  shall  have  occurred  and be
continuing,  the Partnership may sell or otherwise dispose of all or any part of
the  Collateral,  at public or private sale or at any  broker's  board or on any
securities  exchange,  for cash,  upon  credit  or for  future  delivery  as the
Partnership shall deem  appropriate.  Each such purchaser at any such sale shall
hold the property sold  absolutely,  free from any claim or right on the part of
Apollo,  and Apollo hereby waives (to the extent permitted by law) all rights of
redemption,  stay and  appraisal  which Apollo now has or may at any time in the
future have under any rule of law or statute now existing or hereafter enacted.

       The  Partnership  shall give Apollo 10 days' written notice (which Apollo
agrees is  reasonable  notice  within the  meaning of  Section  9-504(3)  of the
Uniform Commercial Code as in effect in New York) of the Partnership's intention
to make any sale of Collateral. Such notice, in the case of a public sale, shall
state the time and place for such sale and,  in the case of a sale at a broker's
board or on a  securities  exchange,  shall state the board or exchange at which
such sale is to be made and the day on which the Collateral, or portion thereof,
will first be offered for sale at such board or  exchange.  Any such public sale
shall be held at such time or times within  ordinary  business hours and at such
place or places as the  Partnership  may fix and state in the notice (if any) of
such sale. At any such sale, the Collateral,  or portion thereof, to be sold may
be sold in one lot as an entirety or in separate parcels, as the Partnership may
(in its sole and absolute  discretion)  determine.  The Partnership shall not be
obligated to make any sale of any Collateral if it shall determine not to do so,
regardless  of the fact that notice of sale of such  Collateral  shall have been
given. The Partnership may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by announcement
at  the  time  and  place  fixed for sale,  and such sale may,  without  further
notice,  be made at the time and  place to which the same was so  adjourned.  In
case any  sale of all or any part of the  Collateral  is made on  credit  or for
future delivery, the Collateral so sold may be retained by the Partnership until
the  sale  price  is  paid  by the  purchaser  or  purchasers  thereof,  but the
Partnership  shall  not  incur  any  liability  in case  any such  purchaser  or
purchasers shall fail to take up and pay for the Collateral so sold and, in case
of any such failure,  such Collateral may be sold again upon like notice. At any
public  sale made  pursuant  to this  Section 8, any  Indemnitee  may bid for or
purchase,  free (to the extent  permitted by law) from any right of  redemption,
stay or  appraisal  on the part of Apollo  (all said  rights  being also  hereby
waived  and  released  to the  extent  permitted  by law),  with  respect to the
Collateral or any part thereof offered for sale and any such Indemnitee may make
payment  on  account  thereof  by using any claim  then due and  payable to such
Indemnitee  from  Apollo  as a  credit  against  the  purchase  price,  and such
Indemnitee may, upon compliance with the terms of sale, hold, retain and dispose
of such property without further accountability to Apollo therefor. For purposes
hereof,  a written  agreement to purchase the Collateral or any portion  thereof
shall be treated as a sale thereof;  the Partnership  shall be free to carry out
such sale and  purchase  pursuant  to such  agreement,  and Apollo  shall not be
entitled to the return of the Collateral or any portion thereof subject thereto,
notwithstanding the fact that after the Partnership shall have entered into such
an agreement all Defaults shall have been remedied and the Indemnity Obligations
paid in full. As an alternative to exercising the power of sale herein conferred
upon it, the  Partnership  may proceed by a suit or suits at law or in equity to
foreclose this

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Agreement  and to sell the  Collateral  or any  portion  thereof  pursuant  to a
judgment  or  decree  of a court or  courts  having  competent  jurisdiction  or
pursuant to a proceeding by a court-appointed receiver.

       9.  Application  of  Proceeds  of  Sale.  The  proceeds  of any  sale  of
Collateral,  as well as any Collateral  consisting of cash,  shall be applied by
the Partnership as follows:

       First,  to the payment of all  Damages  incurred  by the  Partnership  in
connection  with such Default or otherwise in connection  with this Agreement or
any of the Indemnity Obligations, including, but not limited to, all court costs
and the  reasonable  fees and  expenses  of such  Indemnitees'  agents and legal
counsel,  and any other reasonable costs or expenses incurred in connection with
the exercise of any right or remedy hereunder; and

       Second,  pro rata to the  payment in full of  principal  and  interest in
respect of any loans outstanding under the Credit Agreement.

       If the  Partnership  exercises  its right to sell,  assign,  transfer  or
otherwise dispose of the Collateral pursuant to Section 8 of this Agreement, the
Partnership  shall cause to be returned to Apollo any  proceeds  received by the
Indemnitees in excess of the amount needed to satisfy the Indemnity Obligations.

       10. Partnership  Appointed  Attorney-in-Fact.  Apollo hereby appoints the
Partnership its  attorney-in-fact for the purpose of carrying out the provisions
of this Agreement and taking any action and executing any  instrument  which the
Partnership  may deem necessary or advisable to accomplish the purposes  hereof,
which appointment is irrevocable and coupled with an interest.  Without limiting
the generality of the foregoing,  the Partnership shall have the right, upon the
occurrence  and  during  the  continuance  of a  Default,  with  full  power  of
substitution  either in the Partnership's  name or in the name of Apollo, to ask
for, demand, sue for, collect,  receive receipt and give acquittance for any and
all moneys due or to become  due and under and by virtue of any  Collateral,  to
endorse checks,  drafts,  orders and other  instruments for the payment of money
payable to Apollo  representing any interest or dividend,  or other distribution
payable in respect of the  Collateral or any part thereof or on account  thereof
and to give full  discharge  for the same, to settle,  compromise,  prosecute or
defend any  action,  claim or  proceeding  with  respect  thereto,  and to sell,
assign,  endorse,  pledge,  transfer  and  make  any  agreement  respecting,  or
otherwise deal with, the same; provided,  however, that nothing herein contained
shall be  construed as requiring or  obligating  the  Partnership,  or the other
Indemnitees  to make any  commitment  or to make any inquiry as to the nature or
sufficiency  of  any  payment  received  by  the   Partnership,   or  the  other
Indemnitees,  or to present  or file any claim or notice,  or to take any action
with  respect  to the  Collateral  or any part  thereof  or the moneys due or to
become due in respect  thereof or any property  covered  thereby,  and no action
taken by the Partnership,  or the other  Indemnitees or omitted to be taken with
respect to the  Collateral  or any part thereof  shall give rise to any defense,
counterclaim  or offset in favor of Apollo or to any claim or action against the
Partnership or the other  Indemnitees in the absence of the gross  negligence or
wilful misconduct of the Partnership or the other Indemnitees.


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       11. No Waiver. No failure on the part of the Partnership to exercise, and
no delay in exercising,  any right, power or remedy hereunder shall operate as a
waiver  thereof,  nor shall any single or partial  exercise  of any such  right,
power or remedy  by the  Partnership  preclude  any  other or  further  exercise
thereof  or the  exercise  of any other  right,  power or remedy.  All  remedies
hereunder are cumulative and are not exclusive of any other remedies provided by
law.  The  Partnership  and the  other  Indemnitees  shall not be deemed to have
waived any rights  hereunder or under any other  agreement or instrument  unless
such waiver shall be in writing and signed by such parties.

       12. Security Interest Absolute.  All rights of the Partnership hereunder,
the grant of a security interest in the Collateral and all obligations of Apollo
hereunder,  shall be absolute and unconditional  irrespective of (i) any lack of
validity or enforceability  of the Credit Agreement,  any agreement with respect
to  any of the  Indemnity  Obligations  or any  other  agreement  or  instrument
relating to any of the  foregoing,  (ii) any change in time,  manner or place of
payment of, or in any other term of, all or any of the Indemnity Obligations, or
any other amendment or waiver of or any consent to any departure from the Credit
Agreement or any other agreement or instrument,  (iii) any exchange,  release or
nonperfection of any other collateral,  or any release or amendment or waiver of
or consent to or departure from any  guarantee,  for all or any of the Indemnity
Obligations or (iv) any other  circumstance  which might otherwise  constitute a
defense  available  to, or a discharge  of,  Apollo in respect of the  Indemnity
Obligations or in respect of this Agreement.

       13.  Partnership's Fees and Expenses.  Apollo shall be obligated to, upon
demand,  pay to the Partnership  the amount of any and all reasonable  expenses,
including the reasonable  fees and expenses of its counsel and of any experts or
Partnerships  which  the  Partnership  may  incur  in  connection  with  (i) the
administration  of this Agreement,  (ii) the custody or preservation  of, or the
sale of,  collection  from, or other  realization  upon, any of the  Collateral,
(iii) the  exercise  or  enforcement  of any of the  rights  of the  Partnership
hereunder  or (iv) the  failure  by  Apollo to  perform  or  observe  any of the
provisions hereof.

       14.  Termination.  This  Agreement  shall  terminate  when  (a)  all  the
Indemnity  Obligations have been fully and indefeasibly paid in cash and (b) all
obligations  under the Credit  Agreement  shall have been paid and discharged in
full at which time the Partnership  shall reassign and deliver to Apollo,  or to
such person or persons as Apollo shall designate,  against receipt,  such of the
Collateral (if any) as shall not have been sold or otherwise still be held by it
hereunder, together with appropriate instruments of reassignment and release.

       15.  Notices.  All notices and other  communications  hereunder  shall be
sufficiently  given for all  purposes  hereunder  if in  writing  and  delivered
personally,  sent by  documented  overnight  delivery  service or, to the extent
receipt is confirmed, telecopy, telefax or other electronic transmission service
to the  appropriate  address  or  number  as set  forth  below.  Notices  to the
Partnership shall be addressed to:

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                  1290 Partners, L.P.
                  c/o Victor Capital Group
                  605 Third Avenue
                  New York, NY  10016
                  Attention: John R. Klopp
                  Telecopy Number: (212) 655-0044

                  with a copy to:
                  Battle Fowler LLP
                  75 East 55th Street
                  New York, New York  10022
                  Attention:  Louis Vitali, Esq.
                  Telecopy Number:  (212) 856-7818
                  or at such other address and to the attention of such other
person  as  the  Partnership  may  designate  by written notice to Apollo and
Metropolis. Notices to Apollo shall be addressed to:

                  Apollo Real Estate Investment Fund, L.P.
                  2 Manhattanville Road
                  Purchase, New York 10599
                  Attention: Lee Neibart
                  Telecopy Number: (914) 694-4929

                  or at such other address and to the attention of such other
person  as  the  Buyer  may  designate  by  written notice to Partnership and
Metropolis. Notices to the Partnership shall be addressed to:

                  Metropolis Realty Trust, Inc.
                  c/o Victor Capital Group
                  605 Third Avenue
                  New York, NY  10016
                  Attention: John R. Klopp
                  Telecopy Number: (212) 655-0044

                  with a copy to:
                  Battle Fowler LLP
                  75 East 55th Street
                  New York, New York  10022
                  Attention:  Louis Vitali, Esq.
                  Telecopy Number:  (212) 856-7818

                  or at such other  address and to the  attention  of such other
person  as  Metropolis  may  designate  by  written  notice  to  Apollo  and the
Partnership.

                  16. Further Assurances.  Apollo agrees to do such further acts
and things, and to execute and deliver such additional conveyances, assignments,
agreements  and  instruments,  as the  Partnership  may at any  time  reasonably
request in connection with the  administration and enforcement of this Agreement
or with  respect to the  Collateral  or any part  thereof or in order  better to
assure and confirm unto the Partnership its rights and remedies hereunder.


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       17.  Binding  Agreement;  Assignments.  This  Agreement,  and the  terms,
covenants and conditions hereof,  shall be binding upon and inure to the benefit
of the parties hereto and their respective  successors and assigns,  except that
Apollo shall not be permitted to assign this Agreement or any interest herein or
in the Collateral,  or any part thereof, or otherwise pledge,  encumber or grant
any option with respect to the Collateral,  or any part thereof,  or any cash or
property held by the Partnership as Collateral under this Agreement.

       18.  GOVERNING  LAW;  WAIVER  OF JURY  TRIAL.  THIS  AGREEMENT  SHALL  BE
CONSTRUED IN  ACCORDANCE  WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
(WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF),  EXCEPT AS REQUIRED BY
MANDATORY  PROVISIONS  OF LAW AND  EXCEPT TO THE  EXTENT  THAT THE  VALIDITY  OR
PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT
OF ANY PARTICULAR  COLLATERAL  ARE GOVERNED BY THE LAWS OF A JURISDICTION  OTHER
THAN THE STATE OF NEW YORK.

       APOLLO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, AND THE INDEMNITEES
BY  THEIR  ACCEPTANCE  OF  THIS   INDEMNIFICATION   AGREEMENT   IRREVOCABLY  AND
UNCONDITIONALLY  WAIVE, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,  CASE,
PROCEEDING, SUIT OR COUNTERCLAIM ARISING IN CONNECTION WITH, OUT OF OR OTHERWISE
RELATING TO THIS INDEMNIFICATION AGREEMENT.

       Apollo  agrees  that,  with or  without  notice or  demand,  Apollo  will
reimburse  the  Indemnitees  for all  costs  and  expenses  (including,  without
limitation,   reasonable   attorneys'  fees)  incurred  by  the  Indemnitees  in
connection with any action, case or proceeding brought by any of the Indemnitees
to enforce the obligations of Apollo under this Indemnification Agreement.

       19.  Severability. In case any one or more of the provisions contained in
this Agreement should be invalid,  illegal or unenforceable in any respect,  the
validity,  legality and  enforceability  of the remaining  provisions  contained
herein shall not in any way be affected or impaired.

       20.  Counterparts.  This  Agreement  may  be  executed  in  two  or  more
counterparts, each of which shall constitute an original, but all of which, when
taken together,  shall  constitute but one  instrument.  This Agreement shall be
effective upon the date first set forth above.

       21.  Section  Headings. Section  headings used herein are for convenience
only and are not to affect the construction  of, or be taken into  consideration
in interpreting, this Agreement.

       22.  Amendments. This Agreement may only be modified, amended, changed or
terminated  by  an  agreement  in  writing   signed  by  Apollo  and  the  other
Indemnitees.

       Apollo agrees to submit to personal jurisdiction in the State of New York
in any  action,  case or  proceeding  arising  out of  this  Agreement  and,  in
furtherance  of such  agreement,  Apollo hereby agrees and consents that without
limiting other methods of obtaining  jurisdiction,  personal  jurisdiction  over
Apollo in any such action,  case or proceeding may be obtained within or without
the jurisdiction of any court located in New York and that any process or notice

                                        9


<PAGE>



of motion or other  application  to any such court in  connection  with any such
action,  case or proceeding may be served upon Apollo by registered or certified
mail to or by personal service at the last known address of Apollo, whether such
address be within or without the jurisdiction of any such court.

                  Apollo  represents and warrants to and for the benefit of each
Indemnitee  that  it has  been  duly  organized  and is  validly  existing  as a
corporation in good standing  under the laws of the State of Delaware,  that the
execution and delivery by it of this Agreement and the  performance by it of its
obligations  hereunder have been duly authorized by all necessary  action by and
on its behalf,  that this  Agreement  has been duly  executed and delivered by a
duly authorized officer and that this Agreement  constitutes a valid and legally
binding obligation enforceable against it in accordance with the terms set forth
herein.

                                       10


<PAGE>


       IN WITNESS WHEREOF,  the parties hereto have duly executed this Agreement
the day and year first above set forth.

                                 APOLLO REAL ESTATE INVESTMENT FUND, L.P.

                                 By:  Apollo Real Estate Advisors, L.P.

                                      By:  Apollo Real Estate Management

                                           By: /s/ Andrew S. Cohen
                                               --------------------------------
                                               Name:  Andrew S. Cohen
                                               Title: Vice President


                                 1290 PARTNERS, L.P.

                                 By:  1290 GP Corp., its general partner


                                       By: /s/ Andrew S. Cohen
                                           -----------------------------------
                                           Name:   Andrew S. Cohen
                                           Title:  Vice President

ACKNOWLEDGED AND AGREED:

METROPOLIS REALTY TRUST, INC.


By:/s/ Lee S. Neibert
   ---------------------------
   Name:  Lee S. Neibert
   Title: President

                                       11