LIBOR CAP SECURITY AGREEMENT

                            Dated as of June 30, 2007

                                       by

                                GTJ RATE CAP, LLC

                                    as Debtor

                                   in favor of

                   ING USA ANNUITY AND LIFE INSURANCE COMPANY,
                     ING LIFE INSURANCE AND ANNUITY COMPANY,
RELIASTAR LIFE INSURANCE COMPANY, and SECURITY LIFE OF DENVER INSURANCE COMPANY,

                               as Secured Parties
                               ------------------

                                   relating to

                                 LOAN AGREEMENT

                            Dated as of June 30, 2007

                                      among

                               GTJ REIT, INC., and
                        THE OTHER BORROWERS NAMED THEREIN

                                  as Borrowers

                                       and

                            THE LENDERS NAMED THEREIN

                                   as Lenders


<PAGE>

                                TABLE OF CONTENTS

                                                                            Page

1.       DEFINITIONS...........................................................1

2.       SECURITY..............................................................3

3.       TRANSFER OF COLLATERAL................................................3

4.       REPRESENTATIONS AND WARRANTIES........................................3

5.       FURTHER ASSURANCES....................................................4

6.       COVENANTS OF THE DEBTOR...............................................4

7.       THE SECURED PARTY AS THE DEBTOR'S ATTORNEY-IN-FACT....................5

8.       REMEDIES UPON DEFAULT.................................................5

9.       APPLICATION OF PROCEEDS...............................................6

10.      INDEMNITY AND EXPENSES................................................6

11.      DUTIES OF THE SECURED PARTY...........................................6

12.      AMENDMENTS; ETC.......................................................6

13.      CONTINUING SECURITY INTEREST..........................................7

14.      SECURITY INTEREST ABSOLUTE............................................7

15.      WAIVER OF MARSHALING..................................................8

16.      MISCELLANEOUS.........................................................8

         (a)      Notices......................................................8

         (b)      Successors and Assigns.......................................9

         (c)      Severability.................................................9

         (d)      Construction.................................................9

         (e)      Counterparts; Execution and Delivery by Facsimile or E-mail..9

         (f)      Waiver of Jury Trial........................................10

         (g)      Governing Law...............................................10




                                      -i-
<PAGE>

                          LIBOR CAP SECURITY AGREEMENT

     This  LIBOR  Cap  Security  Agreement,  dated  as of June  30,  2007  (this
"Agreement"), is by GTJ RATE CAP, LLC, a New York limited liability company (the
"Debtor"),  in favor of ING USA ANNUITY  AND LIFE  INSURANCE  COMPANY,  ING LIFE
INSURANCE AND ANNUITY COMPANY,  RELIASTAR LIFE INSURANCE  COMPANY,  and SECURITY
LIFE OF DENVER  INSURANCE  COMPANY,  as Lenders  and secured  parties  hereunder
(individually  and  collectively,  and including any other Persons that may from
time to time  become  Lenders  under and as defined in the Loan  Agreement,  the
"Secured Party").

                             Preliminary Statements:

     A. Concurrently  with the execution and delivery hereof,  GTJ REIT, INC., a
Maryland  corporation  (the  "Parent");  GREEN  ACQUISITION,  INC.,  a New  York
corporation;   TRIBORO  ACQUISITION,  INC.,  a  New  York  corporation;  JAMAICA
ACQUISITION, INC., a New York corporation;  165-25 147TH AVENUE, LLC, a New York
limited  liability  company;  49-19  ROCKAWAY BEACH  BOULEVARD,  LLC, a New York
limited liability company;  85-01 24TH AVENUE, LLC, a New York limited liability
company,  and 114-15 GUY BREWER  BOULEVARD,  LLC, a New York  limited  liability
company, as Borrowers, and the Lenders are entering into a Loan Agreement, dated
as of the date hereof (the "Loan Agreement"),  pursuant to which the Lenders may
make Loans to the Borrowers.

     B. The Debtor is an affiliate of the Borrowers and a special purpose entity
formed to facilitate the transactions contemplated by the Loan Agreement.

     C. The Debtor legally and beneficially owns the Collateral.

     D. To induce the Lenders to make Loans,  the Debtor desires to grant to the
Secured  Party a security  interest  in the  Collateral  to secure  the  Secured
Obligations, as provided herein.

                                   Agreement:

     In  consideration  of the  foregoing  and the mutual  agreements  set forth
below, and for other good and valuable  consideration,  the parties hereby agree
and covenant as follows:

1. Definitions.

     As used herein,  each following term has the respective  meaning  indicated
below, in the other agreement indicated below or in the Section or other part of
this Agreement indicated below:

     "Agreement" is defined in the introductory paragraph.

     "Bankruptcy  Code"  means the  United  States  Bankruptcy  Code (11  U.S.C.
Section 101 et seq.).

     "Borrowers" is defined in the Loan Agreement.

<PAGE>

     "Business Day" is defined in the Loan Agreement.

     "Collateral" means, collectively, all right title and interest of Debtor in
(1)  each  LIBOR  Cap  Agreement,  (2) any and all  proceeds  arising  from  the
foregoing,  including  without  limitation  proceeds  arising  from  the sale or
transfer of any of the foregoing,  and (3) any and all amounts from time to time
paid or payable under or in connection with any of the foregoing.

     "Debtor" is defined in the introductory paragraph.

     "Event of Default" is defined in the Loan Agreement.

     "Initial LIBOR Cap Agreement"  means the ISDA Master  Agreement dated as of
December 13, 2006,  between Parent and SMBC, as supplemented and modified by the
Schedule  thereto  of the same date and the  Confirmation  of the same date from
SMBC  Capital  Markets,  Inc.,  as Agent for SMBC,  to the Parent and having the
reference number DPA609667, all as assigned by Parent to Debtor with the written
consent of SMBC.

     "Lenders" is defined in the Loan Agreement.

     "LIBOR Cap  Agreements"  means the  Initial  LIBOR Cap  Agreement  and each
Replacement  LIBOR  Cap  Agreement,  as  any  such  agreement  may  be  amended,
supplemented or otherwise modified from time to time.

     "LIBOR Cap Counterparty" means SMBC and any other counterparty to any LIBOR
Cap Agreement and any of their respective successors, transferees or assigns.

     "Loan Agreement" is defined in the Preliminary Statements.

     "Loan Documents" is defined in the Loan Agreement.

     "Loans" is defined in the Loan Agreement.

     "Person" is defined in the Loan Agreement.

     "Debtor" is defined in the introductory paragraph.

     "Registered  Organization"  shall  have the  meaning  ascribed  thereto  in
Section 9-102(a)(70) of the UCC.

     "Replacement LIBOR Cap Agreement" means any Replacement LIBOR Cap Agreement
entered into in connection with the Loan Agreement.

     "Required Lenders" is defined in the Loan Agreement.

     "Secured Obligations" means all liabilities,  obligations,  or undertakings
owing by  Debtor  or any  Borrower  to the  Lenders  of any kind or  description
arising  out of or  outstanding  under,  advanced  or  issued  pursuant  to,  or
evidenced by any of the Loan Documents,  irrespective of whether for the payment
of money, whether direct or indirect,  absolute or contingent,  due or to become
due, voluntary or involuntary,  whether now existing or hereafter  arising,  and


                                      -2-
<PAGE>

including  all interest  (including  interest that accrues after the filing of a
case  under  the  Bankruptcy  Code)  and  any  and all  costs,  fees  (including
reasonable  attorneys'  fees),  and  expenses  that  Debtor or any  Borrower  is
required to pay pursuant to any of the foregoing, by law, or otherwise.

     "Secured Party" is defined in the introductory paragraph.

     "SMBC" means SMBC Derivative Products Limited.

     "UCC"  means the Uniform  Commercial  Code as in effect in the State of New
York or any other applicable jurisdiction.

2. Security.

     As  security  for  the  prompt  payment  and  performance  of  the  Secured
Obligations in full by the Borrowers when due,  whether at stated  maturity,  by
acceleration or otherwise  (including  amounts that would become due but for the
operation of the provisions of the Bankruptcy Code), the Debtor hereby grants to
the Secured Party a security  interest in all of the Debtor's right,  title, and
interest in and to the Collateral.

3. Transfer of Collateral.

     Upon the  occurrence  and  during  the  continuance  of an Event of Default
(after taking into account any  applicable  grace or cure  period),  the Secured
Party shall have the right,  at any time in its discretion and without notice to
the Debtor,  to transfer to the Secured  Party or any of its nominees any or all
of the Collateral.

4. Representations and Warranties.

     The Debtor represents, warrants, and covenants as follows:

     (a) The Debtor is a Registered  Organization,  organized  under the laws of
the State of New York.

     (b) All  information  herein or hereafter  supplied to the Secured Party or
any  Lender  by or on  behalf  of the  Debtor in  writing  with  respect  to the
Collateral  is,  or in the  case of  information  hereafter  supplied  will  be,
accurate and complete in all material respects.

     (c) The Debtor has  obtained all  consents  and has  delivered  all notices
required  under the Initial  LIBOR Cap  Agreement  and the  Debtor's  execution,
delivery  and  performance  of this  Agreement  will not  result in a default or
breach of the Initial LIBOR Cap Agreement.

     (d) The  Debtor is and will be the sole legal and  beneficial  owner of the
Collateral  (including  all  Collateral  acquired  by the Debtor  after the date
hereof) free and clear of any adverse  claim,  Lien, or other right,  title,  or
interest of any party, other than the Liens in favor of the Secured Party.

                                      -3-
<PAGE>

     (e) This Agreement  creates a valid security  interest in the Collateral in
favor of the Secured Party securing payment of the Secured Obligations.

5. Further Assurances.

     (a) The Debtor agrees that from time to time, at the expense of the Debtor,
the Debtor  will  promptly  execute and  deliver  all  further  instruments  and
documents,  and take all further  action  that may be  necessary  or  reasonably
desirable, or that the Secured Party may reasonably request, in order to perfect
and protect any security  interest  granted or purported to be granted hereby or
to enable the  Secured  Party to exercise  and  enforce its rights and  remedies
hereunder with respect to any Collateral. Without limiting the generality of the
foregoing,  the Debtor  will:  (i) at the  request of the  Secured  Party,  mark
conspicuously each of its records pertaining to the Collateral with a legend, in
form and substance reasonably satisfactory to the Secured Party, indicating that
such Collateral is subject to the security interest granted hereby; (ii) execute
any such instruments or notices, as may be necessary or reasonably desirable, or
as the Secured Party may  reasonably  request,  in order to perfect and preserve
the first priority security interests granted or purported to be granted hereby;
(iii)  allow  inspection  of the  Collateral  by the  Secured  Party or  Persons
designated  by the  Secured  Party;  and (iv) appear in and defend any action or
proceeding that may affect the Debtor's title to or the Secured Party's security
interest in the Collateral.

     (b) The Debtor  hereby  authorizes  the  Secured  Party to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral.  A carbon,  photographic,  or other  reproduction of
this  Agreement or any financing  statement  covering the Collateral or any part
thereof shall be sufficient as a financing statement where permitted by law.

     (c) The Debtor will furnish to the Secured  Party,  upon the request of the
Secured Party such statements and schedules  further  identifying and describing
the Collateral  and such other reports in connection  with the Collateral as the
Secured Party may reasonably request.

6. Covenants of the Debtor.

     The Debtor shall:

     (a)  neither  change its  jurisdiction  of  organization  nor cease to be a
Registered Organization, in each case, without giving the Secured Party at least
30 days prior written notice thereof;

     (b) not enter into any agreement that  terminates,  amends,  supplements or
otherwise  modifies any LIBOR Cap  Agreement  without the Secured  Party's prior
written consent, which consent will not be unreasonably withheld;

     (c) upon receipt by the Debtor of any  material  notice,  report,  or other
communication  from a LIBOR Cap Counterparty  relating to all or any part of the
Collateral,  deliver such notice,  report or other  communication to the Secured
Party as soon as  practicable,  but in no event  later than five  Business  Days
following the receipt thereof by the Debtor.

                                      -4-
<PAGE>

7. The Secured Party as the Debtor's Attorney-in-Fact.

     The Debtor  hereby  irrevocably  appoints the Secured Party as the Debtor's
attorney-in-fact,  with full  authority in the place and stead of the Debtor and
in the name of the Debtor, the Secured Party or otherwise,  from time to time at
the Secured Party's discretion, to take any action and to execute any instrument
that the Secured Party may reasonably  deem necessary or advisable to accomplish
the  purposes of this  Agreement.  Secured  Party  agrees not to take any action
pursuant to this Section 7 unless an Event of Default shall have occurred and be
continuing.

8. Remedies upon Default.

     Upon the  occurrence  and  during  the  continuance  of an Event of Default
(after taking into account any applicable grace or cure period):

     (a) The  Secured  Party may  exercise  in  respect  of the  Collateral,  in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured  party on default  under the UCC
(irrespective  of whether the UCC applies to the affected items of  Collateral),
and the Secured Party may also without notice  (except as specified  below) sell
the  Collateral  or any part thereof in one or more parcels at public or private
sale, at any exchange,  broker's board or at any of the Secured  Party's offices
or elsewhere,  for cash, on credit or for future delivery, at such time or times
and at such price or prices and upon such other terms as the  Secured  Party may
deem  commercially  reasonable,  irrespective of the impact of any such sales on
the  market  price  of  the  Collateral.  To the  maximum  extent  permitted  by
applicable  law, the Secured  Party or any Lender may be the purchaser of any or
all of the Collateral at any such sale and shall be entitled, for the purpose of
bidding and making  settlement  or payment of the purchase  price for all or any
portion of the Collateral  sold at any such public sale, to use and apply all or
any part of the Secured Obligations as a credit on account of the purchase price
of any  Collateral  payable at such sale.  Each purchaser at any such sale shall
hold the property  sold  absolutely  free from any claim or right on the part of
the Debtor,  and the Debtor hereby  waives (to the extent  permitted by law) all
rights of  redemption,  stay, or appraisal that it now has or may at any time in
the future  have  under any rule of law or statute  now  existing  or  hereafter
enacted.  The Debtor agrees that, to the extent notice of sale shall be required
by law, at least ten calendar days notice to the Debtor of the time and place of
any  public  sale or the time  after  which a private  sale is to be made  shall
constitute reasonable notification.  The Secured Party shall not be obligated to
make any sale of Collateral  regardless of notice of sale having been given. The
Secured Party may adjourn any public sale from time to time by  announcement  at
the time and place fixed therefor, and such sale may, without further notice, be
made at the announced time and place to which it was so adjourned.

     (b) THE DEBTOR EXPRESSLY WAIVES TO THE MAXIMUM EXTENT PERMITTED BY LAW: (i)
ANY  CONSTITUTIONAL  OR OTHER RIGHT TO A JUDICIAL  HEARING PRIOR TO THE TIME THE
SECURED PARTY  DISPOSES OF ALL OR ANY PART OF THE COLLATERAL AS PROVIDED IN THIS
SECTION 8; (ii) ALL RIGHTS OF REDEMPTION,  STAY, OR APPRAISAL THAT IT NOW HAS OR
MAY AT ANY TIME IN THE FUTURE HAVE UNDER ANY RULE OF LAW OR STATUTE NOW EXISTING
OR HEREAFTER ENACTED; AND (iii) EXCEPT AS SET FORTH IN SUBSECTION (a) OF THIS

                                      -5-
<PAGE>

SECTION 8, ANY REQUIREMENT OF NOTICE, DEMAND, OR ADVERTISEMENT FOR SALE.

9. Application of Proceeds.

     Upon the  occurrence  and  during  the  continuance  of an Event of Default
(after taking into account any applicable  grace or cure period),  any cash held
by the Secured Party as Collateral and proceeds received by the Secured Party in
respect of any sale of,  collection  from, or other  realization upon all or any
part of the  Collateral  pursuant to the  exercise  by the Secured  Party of its
remedies as a secured  creditor  as provided in Section 8 shall be applied  from
time to time by the  Secured  Party as  follows:  first,  to the  payment of the
Secured  Party's and the Lenders'  reasonable  costs and expenses in  connection
with the Collateral,  including  reasonable  attorneys' fees and legal expenses;
second,  to the payment of all other Secured  Obligations  in such manner as the
Required Lenders may deem advisable;  and third,  the balance,  if any, to or at
the direction of the Debtor. The Debtor shall remain liable for any deficiency.

10. Indemnity and Expenses.

     The Debtor agrees:

     (a) To indemnify  and hold  harmless the Secured  Party and each Lender and
each of their  respective  officers,  directors,  managers,  employees,  agents,
professional  advisors  and  affiliates  from and  against  any and all  claims,
damages,  demands,  losses,  obligations,  judgments and liabilities  (including
reasonable  attorneys'  fees  and  expenses)  in any  way  arising  out of or in
connection with this Agreement or the Secured Obligations,  except to the extent
the same shall arise as a result of the gross  negligence or willful  misconduct
of the party seeking to be indemnified;

     (b) To pay and reimburse the  reasonable  costs and expenses of the Secured
Party and the Lenders referred to in Section 9.2 of the Loan Agreement; and

     (c) That the  provisions of this Section 10 shall survive the execution and
delivery of this Agreement, the repayment of any of the Secured Obligations, the
termination  of the  commitments of the Lenders under the Loan Agreement and the
termination of this Agreement or any other Loan Document.

11. Duties of the Secured Party.

     The powers  conferred on the Secured Party  hereunder are solely to protect
its interests in the  Collateral and shall not impose on it any duty to exercise
such powers.  Except as provided in Section  9-207 of the UCC, the Secured Party
shall have no duty with  respect to the  Collateral  or any  responsibility  for
taking any steps  necessary or advisable to preserve  rights against any Persons
with respect to any Collateral.

12. Amendments; etc.

     No amendment or waiver of any provision of this Agreement nor consent
to any departure by the Debtor herefrom shall in any event be effective unless
the same shall be in writing and signed by the Secured Party and consented to by

                                      -6-
<PAGE>

the Required Lenders, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given. No failure
on the part of the Secured Party to exercise, and no delay in exercising any
right under this Agreement, any other Loan Document, or otherwise with respect
to any of the Secured Obligations, shall operate as a waiver thereof; nor shall
any single or partial exercise of any right under this Agreement, any other Loan
Document, or otherwise with respect to any of the Secured Obligations preclude
any other or further exercise thereof or the exercise of any other right. The
remedies provided for in this Agreement or otherwise with respect to any of the
Secured Obligations are cumulative and not exclusive of any remedies provided by
law.

13. Continuing Security Interest.

     This  Agreement  shall  create  a  continuing   security  interest  in  the
Collateral  and shall  remain in full  force and effect  until the  indefeasible
payment  in full of the  Secured  Obligations,  including  the  full  and  final
termination of any commitment to extend any financial  accommodations  under the
Loan  Agreement.   Upon  the  indefeasible   payment  in  full  of  the  Secured
Obligations,  including  the full and final  termination  of any  commitment  to
extend any  financial  accommodations  under the Loan  Agreement,  the  security
interests  granted  herein shall  automatically  terminate and all rights to the
Collateral shall revert to the Debtor.  Upon any such  termination,  the Secured
Party  will,  at the  Debtor's  expense,  execute and deliver to the Debtor such
documents as the Debtor shall reasonably  request to evidence such  termination.
Such  documents  shall  be  prepared  by the  Debtor  and  shall  be in form and
substance reasonably satisfactory to the Secured Party.

14. Security Interest Absolute.

     To the maximum  extent  permitted by law, all rights of the Secured  Party,
all security interests  hereunder,  and all obligations of the Debtor hereunder,
shall be absolute and unconditional irrespective of:

     (a) any lack of validity or  enforceability  of any agreement or instrument
relating to any of the Secured Obligations, including any of the Loan Documents;

     (b) any change in the time, manner, or place of payment of, or in any other
term of, all or any of the Secured Obligations, or any other amendment or waiver
of or any consent to any departure from any of the Loan Documents,  or any other
agreement or instrument relating thereto;

     (c) any exchange,  release,  or non-perfection of any other collateral,  or
any release or amendment or waiver of or consent to departure  from any guaranty
for all or any of the Secured Obligations; or

     (d) any other  circumstances  that  might  otherwise  constitute  a defense
available to, or a discharge of, the Debtor.

                                      -7-
<PAGE>

15. Waiver of Marshaling.

     Each of the Debtor and the Secured  Party  acknowledges  and agrees that in
exercising  any rights  under or with  respect to the  Collateral,  the  Secured
Party:  (a) is under no  obligation to marshal any  Collateral;  (b) may, in its
absolute discretion,  realize upon the Collateral in any order and in any manner
it so elects; and (c) may, in its absolute discretion, apply the proceeds of any
or all of the  Collateral  to the  Secured  Obligations  in any order and in any
manner it so elects. The Debtor and the Secured Party waive any right to require
the marshaling of any of the Collateral.

16. Miscellaneous.

     (a) Notices.

     All notices and  communications  provided for hereunder shall be in writing
and sent (i) by telecopy if the sender on the same day sends a  confirming  copy
of such notice by a recognized overnight delivery service (charges prepaid),  or
(ii) by  registered or certified  mail with return  receipt  requested  (postage
prepaid),  or (iii) by a recognized  overnight  delivery  service  (with charges
prepaid). Any such notice or must be sent:

          (i) if to the Debtor,  to GTJ Rate Cap, LLC, c/o GTJ REIT,  Inc.,  444
     Merrick Road, Lynbrook, NY 11563, Attention:  President, Telecopy No. (516)
     887-2029,  with a copy to Ruskin  Moscou  Faltischek,  P.C.,  1425  RexCorp
     Plaza, Uniondale, N.Y. 11556, Attention: Stuart M. Sieger, Esq., or at such
     other address as the Debtor shall have specified to each other party hereto
     in writing; or

          (ii) if to the Secured Party, to the address of each Lender  specified
     for such purpose in the Loan Agreement (taking into account, as applicable,
     Section  9.12 of the  Loan  Agreement),  or at such  other  address  as the
     Secured Party shall have specified to each of the other parties to the Loan
     Documents in writing.

     Notices  under this Section  16(a) will be deemed given only when  actually
received.




-8-
<PAGE>

(b) Successors and Assigns.

     All covenants  and other  agreements  contained in this  Agreement by or on
behalf  of any of the  parties  hereto  bind and inure to the  benefit  of their
respective  successors and assigns (including any successor to the Secured Party
under the Loan Documents) whether so expressed or not.

     (c) Severability.

     Any provision of this Agreement that is prohibited or  unenforceable in any
jurisdiction  shall,  as to such  jurisdiction,  be ineffective to the extent of
such  prohibition  or  unenforceability   without   invalidating  the  remaining
provisions  hereof,  and  any  such  prohibition  or   unenforceability  in  any
jurisdiction  shall (to the full  extent  permitted  by law) not  invalidate  or
render unenforceable such provision in any other jurisdiction.

     (d) Construction.

     In this  Agreement,  unless  a clear  contrary  intention  appears  (i) the
singular number includes the plural number and vice versa; (ii) reference to any
gender includes each other gender; (iii) reference to any agreement, document or
instrument  means such agreement,  document or instrument as amended or modified
and in effect from time to time in accordance  with the terms thereof;  (iv) any
reference  herein to any Person  shall be  construed  to include  such  Person's
successors  and assigns or, if such Person is an  individual,  to such  Person's
heirs, legal representatives and assigns; (v) references to Sections,  Schedules
or  Exhibits  refer  to the  Sections,  Schedules  and  Exhibits  of or to  this
Agreement and "hereunder," "hereof," "hereto," and words of similar import shall
be deemed  references  to this  Agreement  as a whole and not to any  particular
Section or other provision  hereof;  (vi) "including" and "include" do not limit
the generality of any description preceding such term; (vii) "or" is used in the
inclusive sense of "and/or"; and (viii) references to documents,  instruments or
agreements shall be deemed to refer as well to all addenda, exhibits, schedules,
supplements or amendments thereto. Each covenant contained in the Loan Documents
shall  be  construed  (absent  express  provision  to  the  contrary)  as  being
independent  of each other  covenant  contained in the Loan  Documents,  so that
compliance  with any one  covenant  shall not (absent  such an express  contrary
provision) be deemed to excuse  compliance  with any other  covenant.  Where any
provision in any Loan  Document  refers to action to be taken by any Person,  or
that such Person is prohibited  from taking,  such provision shall be applicable
whether such action is taken directly or indirectly by such Person.

     (e) Counterparts; Execution and Delivery by Facsimile or E-mail.

     This Agreement may be executed in any number of counterparts, each of which
shall be an original but all of which together shall  constitute one instrument.
Each  counterpart may consist of a number of copies hereof,  each signed by less
than all,  but  together  signed by all, of the parties  hereto.  Delivery of an
executed  counterpart  of this Agreement by facsimile or by e-mail of a PDF file
or similar electronic image file shall be equally as effective as delivery of an
original  executed  counterpart  of this  Agreement.  Any  party  delivering  an
executed  counterpart  of this  Agreement  by  facsimile or by e-mail also shall
deliver an original executed  counterpart of this Agreement,  but the failure to

                                      -9-
<PAGE>

deliver  an  original  executed  counterpart  shall  not  affect  the  validity,
enforceability, or binding effect hereof.

     (f) Waiver of Jury Trial.

     EACH  PARTY  HERETO  HEREBY  IRREVOCABLY,   KNOWINGLY,   VOLUNTARILY,   AND
INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION  BASED HEREON,  OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT,  OR ANY COURSE OF CONDUCT,  COURSE OF DEALING OR STATEMENTS  (WHETHER
ORAL OR  WRITTEN)  RELATING  TO THE  FOREGOING.  THIS  PROVISION  IS A  MATERIAL
INDUCEMENT  FOR THE PARTIES TO ENTER INTO THIS  AGREEMENT AND FOR THE LENDERS TO
ENTER INTO THE LOAN AGREEMENT.

     (g) Governing Law.

     This Agreement shall be construed and enforced in accordance  with, and the
rights of the  parties  shall be  governed  by, the law of the State of New York
excluding  choice-of-law  principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.

     ANY LEGAL ACTION OR PROCEEDING  WITH RESPECT TO THIS  AGREEMENT OR THE LOAN
DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED
STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF
THIS AGREEMENT,  THE DEBTOR SUBMITS TO THE  NON-EXCLUSIVE  JURISDICTION OF THOSE
COURTS. THE DEBTOR IRREVOCABLY WAIVES ANY OBJECTION,  INCLUDING ANY OBJECTION TO
THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, THAT IT MAY
NOW OR  HEREAFTER  HAVE TO THE  BRINGING  OF ANY  ACTION OR  PROCEEDING  IN SUCH
JURISDICTION  IN  RESPECT  OF ANY OF THE LOAN  DOCUMENTS  OR ANY OTHER  DOCUMENT
RELATED THERETO, INCLUDING THIS AGREEMENT. THE DEBTOR WAIVES PERSONAL SERVICE OF
ANY SUMMONS,  COMPLAINT OR OTHER  PROCESS,  WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY THE LAW OF SUCH STATE.

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                                      -10-

<PAGE>

     IN WITNESS  WHEREOF,  the Debtor has executed this Agreement as of the date
first written above.

Debtor:                                   GTJ RATE CAP, LLC


                                          By:____________________________
                                          Name:
                                          Title:








                [Signature page to LIBOR Cap Security Agreement]