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                                                                  Exhibit 10.233





                                 LOAN AGREEMENT



                            Dated as of June 9, 2004



                                     Between



                       N.J. METROMALL URBAN RENEWAL, INC.,
                                 as Fee Borrower


                                       and


                               JG ELIZABETH, LLC,
                              as Leasehold Borrower


                                       and


                      MORGAN STANLEY MORTGAGE CAPITAL INC.,
                                    as Lender



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<PAGE>


                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----


I.    DEFINITIONS; PRINCIPLES OF CONSTRUCTION

Section 1.1    Definitions....................................................1
Section 1.2    Principles of Construction....................................16


II.   THE LOAN

Section 2.1    The Loan......................................................17
     2.1.1     Agreement to Lend and Borrow..................................17
     2.1.2     Single Disbursement to Borrower...............................17
     2.1.3     The Note......................................................17
     2.1.4     Use of Proceeds...............................................17
     2.1.5     Modification of Components....................................17
Section 2.2    Interest Rate.................................................17
     2.2.1     Interest Rate.................................................17
     2.2.2     Intentionally Omitted.........................................18
     2.2.3     Default Rate..................................................18
     2.2.4     Interest Calculation..........................................18
     2.2.5     Usury Savings.................................................18
Section 2.3    Loan Payments.................................................18
     2.3.1     Payment.......................................................18
     2.3.2     Intentionally Omitted.........................................18
     2.3.3     Payment on Maturity Date......................................19
     2.3.4     Late Payment Charge...........................................19
     2.3.5     Method and Place of Payment...................................19
     2.3.6     Payments After Event of Default...............................19
Section 2.4    Prepayments...................................................19
     2.4.1     Voluntary Prepayments.........................................19
     2.4.2     Mandatory Prepayments.........................................20
     2.4.3     Prepayments After Default.....................................20
Section 2.5    Defeasance....................................................20
     2.5.1     Conditions to Defeasance......................................20
     2.5.2     Defeasance Collateral Account.................................22
     2.5.3     Successor Borrower............................................22


III.  REPRESENTATIONS AND WARRANTIES

Section 3.1    Borrower Representations......................................22
     3.1.1     Organization..................................................22
     3.1.2     Proceedings...................................................23
     3.1.3     No Conflicts..................................................23


                                       -i-
<PAGE>

     3.1.4     Litigation....................................................23
     3.1.5     Agreements....................................................23
     3.1.6     Consents......................................................24
     3.1.7     Title.........................................................24
     3.1.8     No Plan Assets................................................24
     3.1.9     Compliance....................................................24
     3.1.10    Financial Information.........................................25
     3.1.11    Condemnation..................................................25
     3.1.12    Utilities and Public Access...................................25
     3.1.13    Separate Lots.................................................25
     3.1.14    Assessments...................................................25
     3.1.15    Enforceability................................................25
     3.1.16    Assignment of Leases..........................................25
     3.1.17    Insurance.....................................................25
     3.1.18    Licenses......................................................26
     3.1.19    Flood Zone....................................................26
     3.1.20    Physical Condition............................................26
     3.1.21    Boundaries....................................................26
     3.1.22    Leases........................................................26
     3.1.23    Filing and Recording Taxes....................................26
     3.1.24    Single Purpose................................................27
     3.1.25    Tax Filings...................................................30
     3.1.26    Solvency......................................................30
     3.1.27    Federal Reserve Regulations...................................30
     3.1.28    Organizational Chart..........................................31
     3.1.29    Bank Holding Company..........................................31
     3.1.30    No Other Debt.................................................31
     3.1.31    Investment Company Act........................................31
     3.1.32    Access/Utilities..............................................31
     3.1.33    No Bankruptcy Filing..........................................31
     3.1.34    Full and Accurate Disclosure..................................31
     3.1.35    Foreign Person................................................32
     3.1.36    Fraudulent Transfer...........................................32
     3.1.37    No Change in Facts or Circumstances; Disclosure...............32
     3.1.38    Management Agreement..........................................32
     3.1.39    Perfection of Accounts........................................32
     3.1.40    Ground Lease..................................................33
     3.1.41    Intentionally Omitted.........................................34
     3.1.42    Fee Borrower Entity...........................................34
     3.1.43    Fee Borrower Separateness.....................................34
Section 3.2    Survival of Representations...................................36


IV.   BORROWER COVENANTS

Section 4.1    Borrower Affirmative Covenants................................36
     4.1.1     Existence; Compliance with Legal Requirements.................36


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<PAGE>

     4.1.2     Taxes and Other Charges.......................................36
     4.1.3     Litigation....................................................37
     4.1.4     Access to Property............................................37
     4.1.5     Further Assurances; Supplemental Mortgage Affidavits..........37
     4.1.6     Financial Reporting...........................................37
     4.1.7     Title to the Property.........................................39
     4.1.8     Estoppel Statement............................................39
     4.1.9     Leases........................................................40
     4.1.10    Alterations...................................................41
     4.1.11    PILOT Payments................................................42
     4.1.12    Material Agreements...........................................42
     4.1.13    Performance by Borrower.......................................42
     4.1.14    Costs of Enforcement/Remedying Defaults.......................42
     4.1.15    Business and Operations.......................................43
     4.1.16    Loan Fees.....................................................43
Section 4.2    Borrower Negative Covenants...................................43
     4.2.1     Due on Sale and Encumbrance; Transfers of Interests...........43
     4.2.2     Liens.........................................................43
     4.2.3     Dissolution...................................................43
     4.2.4     Change in Business............................................44
     4.2.5     Debt Cancellation.............................................44
     4.2.6     Affiliate Transactions........................................44
     4.2.7     Zoning........................................................44
     4.2.8     Assets........................................................44
     4.2.9     No Joint Assessment...........................................44
     4.2.10    Principal Place of Business...................................44
     4.2.11    ERISA.........................................................44
     4.2.12    Material Agreements...........................................45
     4.2.13    Intentionally Omitted.........................................45


V.    INSURANCE, CASUALTY AND CONDEMNATION

Section 5.1    Insurance.....................................................45
     5.1.1     Insurance Policies............................................45
     5.1.2     Insurance Company.............................................49
     5.1.3     Current Insurance.............................................49
Section 5.2    Casualty and Condemnation.....................................50
     5.2.1     Casualty......................................................50
     5.2.2     Condemnation..................................................50
     5.2.3     Casualty Proceeds.............................................51
Section 5.3    Delivery of Net Proceeds......................................51
     5.3.1     Minor Casualty or Condemnation................................51
     5.3.2     Major Casualty or Condemnation................................51


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<PAGE>

VI.   RESERVE FUNDS

Section 6.1    Intentionally Omitted.........................................54
Section 6.2    Ground Rent/PILOT Payment Funds...............................54
     6.2.1     Deposits of Ground Rent/PILOT Payment Funds...................54
     6.2.2     Release of Ground Rent /PILOT Payment Funds...................55
Section 6.3    Insurance Funds...............................................55
     6.3.1     Deposits of Insurance Funds...................................55
     6.3.2     Release of Insurance Funds....................................55
Section 6.4    Tax Funds.....................................................55
     6.4.1     Deposits of Tax Funds.........................................55
     6.4.2     Release of Tax Funds..........................................56
Section 6.5    Rollover Funds................................................56
     6.5.1     Deposits of Rollover Funds....................................56
     6.5.2     Release of Rollover Funds.....................................56
Section 6.6    Lease Termination Rollover Funds..............................57
     6.6.1     Deposits of Rollover Funds....................................57
     6.6.2     Release of Lease Termination Rollover Funds...................57
Section 6.7    Intentionally Omitted.........................................58
Section 6.8    Application of Reserve Funds..................................58
Section 6.9    Security Interest in Reserve Funds............................58
     6.9.1     Grant of Security Interest....................................58
     6.9.2     Income Taxes..................................................59
     6.9.3     Prohibition Against Further Encumbrance.......................59
Section 6.10   Letters of Credit.............................................59
     6.10.1    Delivery of Letters of Credit.................................59
Section 6.11   Provisions Regarding Letters of Credit........................60
     6.11.1    Security for Debt.............................................60
     6.11.2    Additional Rights of Lender...................................60


VII.  PROPERTY MANAGEMENT

Section 7.1    The Management Agreement......................................60
Section 7.2    Prohibition Against Termination or Modification...............61
Section 7.3    Replacement of Manager........................................61


VIII. PERMITTED TRANSFERS

Section 8.1    Intentionally Omitted.........................................62
Section 8.2    Permitted Transfers...........................................62


IX.   SALE AND SECURITIZATION OF MORTGAGE

Section 9.1    Sale of Mortgage and Securitization...........................64
Section 9.2    Securitization Indemnification................................67


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X.    DEFAULTS

Section 10.1   Event of Default..............................................69
Section 10.2   Remedies......................................................71
Section 10.3   Right to Cure Defaults........................................73
Section 10.4   Remedies Cumulative...........................................73


XI.   MISCELLANEOUS

Section 11.1   Successors and Assigns........................................73
Section 11.2   Lender's Discretion...........................................73
Section 11.3   Governing Law.................................................74
Section 11.4   Modification, Waiver in Writing...............................75
Section 11.5   Delay Not a Waiver............................................76
Section 11.6   Notices.......................................................76
Section 11.7   Trial by Jury.................................................77
Section 11.8   Headings......................................................77
Section 11.9   Severability..................................................77
Section 11.10  Preferences...................................................77
Section 11.11  Waiver of Notice..............................................78
Section 11.12  Remedies of Borrower..........................................78
Section 11.13  Expenses; Indemnity...........................................78
Section 11.14  Schedules Incorporated........................................79
Section 11.15  Offsets, Counterclaims and Defenses...........................79
Section 11.16  No Joint Venture or Partnership; No Third Party
               Beneficiaries.................................................79
Section 11.17  Publicity.....................................................80
Section 11.18  Waiver of Marshalling of Assets...............................80
Section 11.19  Waiver of Offsets/Defenses/Counterclaims......................80
Section 11.20  Conflict; Construction of Documents; Reliance.................80
Section 11.21  Brokers and Financial Advisors................................81
Section 11.22  Exculpation...................................................81
Section 11.23  Prior Agreements..............................................83
Section 11.24  Servicer......................................................83
Section 11.25  Joint and Several Liability...................................84
Section 11.26  Creation of Security Interest.................................84
Section 11.27  Assignments and Participations................................84
Section 11.28  Set-Off.......................................................85


                                    SCHEDULES
                                    ---------

Schedule I    -  Rent Roll
Schedule II   -  Intentionally Omitted
Schedule III  -  Organizational Chart
Schedule IV   -  Form of Subordination, Non-Disturbance and Attornment Agreement
Schedule V    -  Exceptions to Representations and Warranties in Section 3.1.22


                                       -v-
<PAGE>


                                 LOAN AGREEMENT

      THIS  LOAN  AGREEMENT,  dated as of June 9,  2004 (as  amended,  restated,
replaced,   supplemented   or  otherwise   modified  from  time  to  time,  this
"Agreement"),   between  MORGAN  STANLEY  MORTGAGE  CAPITAL  INC.,  a  New  York
corporation,  having an address at 1221 Avenue of the Americas,  27th Floor, New
York, New York 10020  ("Lender"),  N.J.  METROMALL  URBAN  RENEWAL,  INC., a New
Jersey  corporation,  having an address at 150 East Gay Street,  Columbus,  Ohio
43215 ("Fee  Borrower")  and JG  ELIZABETH,  LLC, a Delaware  limited  liability
company,  having  an  address  at 150  East Gay  Street,  Columbus,  Ohio  43215
("Leasehold Borrower").

All capitalized  terms used herein shall have the respective  meanings set forth
in Article I hereof.

                              W I T N E S S E T H:
                              - - - - - - - - - -

      WHEREAS, Borrower desires to obtain the Loan from Lender; and

      WHEREAS, Lender is willing to make the Loan to Borrower, subject to and in
accordance  with the  conditions  and terms of this Agreement and the other Loan
Documents.

      NOW,  THEREFORE,  in  consideration  of the  covenants  set  forth in this
Agreement,   and  other  good  and  valuable  consideration,   the  receipt  and
sufficiency of which are hereby  acknowledged,  the parties hereto hereby agree,
represent and warrant as follows:

      I.    DEFINITIONS; PRINCIPLES OF CONSTRUCTION

      Section 1.1 Definitions.

      For  all  purposes  of  this  Agreement,  except  as  otherwise  expressly
provided:

      "Acquired Property Statements" shall have the meaning set forth in Section
9.1(c).

      "Affiliate" shall mean, as to any Person, any other Person that,  directly
or  indirectly,  owns more than forty  percent  (40%) of, is in  control  of, is
controlled  by or is under common  ownership or control with such Person or is a
director or officer of such Person or of an Affiliate of such Person. As used in
this  definition,   the  term  "control"  means  the  possession,   directly  or
indirectly,  of the power to direct or cause the  direction  of the  management,
policies  or  activities  of a  Person,  whether  through  ownership  of  voting
securities, by contract or otherwise.

      "Agent"  shall  mean  LaSalle  Bank,  N.A.  and  any  successor   Eligible
Institution thereto.

      "ALTA"  shall mean  American  Land  Title  Association,  or any  successor
thereto.

      "Alteration   Threshold"  shall  mean  Four  Million  and  No/100  Dollars
($4,000,000.00).


                                      -1-
<PAGE>

      "Annual  Budget"  shall  mean the  operating  and  capital  budget for the
Property  setting  forth  Borrower's  good  faith  estimate  of  Gross  Revenue,
Operating Expenses, and Capital Expenditures for the applicable Fiscal Year.

      "Assignment of Leases" shall mean that certain first  priority  Assignment
of  Leases  and  Rents,  dated as of the date  hereof,  from  Fee  Borrower  and
Leasehold  Borrower,  as assignor,  to Lender,  as assignee,  as the same may be
amended,  restated,  replaced,  supplemented or otherwise  modified from time to
time.

      "Assignment of Management Agreement" shall mean that certain Assignment of
Management  Agreement and Subordination of Management Fees dated the date hereof
among  Leasehold  Borrower,  Manager  and  Lender,  as the same may be  amended,
restated, replaced, supplemented or otherwise modified from time to time.

      "Award" shall mean any compensation paid by any Governmental  Authority in
connection with a Condemnation in respect of all or any part of the Property.

      "Bankruptcy  Code" shall mean Title 11 of the United  States Code entitled
"Bankruptcy",  as  amended  from  time to time,  and any  successor  statute  or
statutes and all rules and regulations from time to time promulgated thereunder,
and any comparable foreign laws relating to bankruptcy, insolvency or creditors'
rights.

      "Basic  Carrying  Costs"  shall  mean  the  sum  of  the  following  costs
associated with the Property for the relevant Fiscal Year or payment period: (i)
PILOT Payments, (ii) Taxes and (iii) Insurance Premiums.

      "Borrower"  shall mean,  individually and  collectively,  Fee Borrower and
Leasehold Borrower.

      "Business  Day" shall mean any day other  than a  Saturday,  a Sunday or a
legal holiday on which national  banks are not open for general  business in (i)
the State of New York,  (ii) the state where the  corporate  trust office of the
Trustee  is  located,  or (iii) the state  where the  servicing  offices  of the
Servicer are located.

      "Capital  Expenditures"  for any period  shall mean  amounts  expended for
replacements  and  alterations  to the Property  and required to be  capitalized
according to GAAP.

      "Cash  Management  Agreement"  shall  mean that  certain  Cash  Management
Agreement of even date herewith among Lender, Fee Borrower,  Leasehold Borrower,
Manager and Agent.

      "Casualty" shall mean the occurrence of any casualty, damage or injury, by
fire or otherwise, to the Property or any part thereof.

      "Casualty  Consultant"  shall  have  the  meaning  set  forth  in  Section
5.3.2(c).

      "Casualty Retainage" shall have the meaning set forth in Section 5.3.2(d).


                                      -2-
<PAGE>

      "Closing Date" shall mean the date of funding the Loan.

      "Code" shall mean the Internal Revenue Code of 1986, as amended, and as it
may be further amended from time to time, any successor  statutes  thereto,  and
applicable U.S.  Department of Treasury  regulations  issued pursuant thereto in
temporary or final form.

      "Component A1" shall mean that portion of the Loan in the amount of Eighty
Five  Million  and No/100  Dollars  ($85,000,000.00)  made by Lender to Borrower
pursuant to this Agreement.

      "Component  A1  Rate"  shall  mean a rate  per  annum  equal  to four  and
eighty-three hundredths percent (4.83%).

      "Component A2" shall mean that portion of the Loan in the amount of Eighty
Million and No/100 Dollars  ($80,000,000.00) made by Lender to Borrower pursuant
to this Agreement.

      "Component  A2  Rate"  shall  mean a rate  per  annum  equal  to four  and
eighty-three hundredths percent (4.83%).

      "Components" shall mean, collectively, Component A1 and Component A2.

      "Condemnation"   shall  mean  a  temporary  or  permanent  taking  by  any
Governmental  Authority  as the  result  or in  lieu or in  anticipation  of the
exercise of the right of condemnation  or eminent domain,  of all or any part of
the Property,  or any interest therein or right accruing thereto,  including any
right of access  thereto or any change of grade  affecting  the  Property or any
part thereof.

      "Consumer  Price Index" or "CPI" shall mean the  Consumer  Price Index for
All Urban  Consumers  published by the Bureau of Labor  Statistics of the United
States  Department of Labor, New York - Northern New Jersey - Long Island,  NY -
NJ - CT - PA;  All  Items;  1982-84 = 100.  If the  Bureau  of Labor  Statistics
substantially  revises the manner in which the CPI is determined,  an adjustment
shall be made by  Lender  in the  revised  index  which  would  produce  results
equivalent,  as nearly as possible,  to those which would be obtained if the CPI
had not been so revised.  If the CPI becomes  unavailable  to the public because
publication is discontinued,  or otherwise,  Lender shall substitute  therefor a
comparable index based upon changes in the cost of living or purchasing power of
the  consumer  dollar  published  by any other  governmental  agency  reasonably
acceptable  to  Borrower  or, if no such index is  available,  then,  subject to
reasonable  approval of Borrower,  a comparable index published by a major bank,
other  financial  institution,  university or recognized  financial  publication
shall be substituted.

      "Debt" shall mean the  outstanding  principal  amount of the Loan together
with all interest  accrued and unpaid thereon and all other sums  (including the
Yield Maintenance  Premium) due to Lender in respect of the Loan under the Note,
this  Agreement,  the Mortgage,  the  Environmental  Indemnity or any other Loan
Document.

      "Debt Service" shall mean, with respect to any particular  period of time,
scheduled principal and interest payments under the Note.


                                      -3-
<PAGE>

      "Debt Service  Coverage  Ratio" shall mean the ratio of (i)  Underwritable
Cash Flow for the twelve (12) calendar  month period  immediately  preceding the
date of calculation to (ii) the projected Debt Service that would be due for the
twelve  (12)  calendar  month  period  immediately  following  such  calculation
assuming a nine percent (9.0%) loan constant.

      "Debt  Service  Coverage  Ratio Event"  shall mean,  as of the end of each
calendar quarter, if the Debt Service Coverage Ratio shall be less than 1.20:1.

      "Default"  shall mean the  occurrence of any event  hereunder or under any
other Loan Document  which,  but for the giving of notice or passage of time, or
both, would be an Event of Default.

      "Default  Rate" shall mean,  with  respect to each  Component,  a rate per
annum equal to the lesser of (i) the maximum rate  permitted by applicable  law,
or (ii) three percent (3%) above the Interest Rate.

      "Defeasance  Collateral"  shall  mean  U.S.  Obligations,   which  provide
payments  (i) on or prior to,  but as close as  possible  to, the  Business  Day
immediately  preceding  all Monthly  Payment Dates and other  scheduled  payment
dates,  if any, under the Note after the Defeasance Date and up to and including
the Permitted  Prepayment Date, and (ii) in amounts equal to or greater than the
Scheduled  Defeasance  Payments relating to such Monthly Payment Dates and other
scheduled payment dates.

      "Defeasance  Collateral  Account"  shall  have the  meaning  set  forth in
Section 2.5.3.

      "Defeasance Date" shall have the meaning set forth in Section 2.5.1(a)(i).

      "Defeasance Event" shall have the meaning set forth in Section 2.5.1(a).

      "Disclosure Document" shall have the meaning set forth in Section 9.2(a).

      "Disclosure  Document  Date"  shall have the  meaning set forth in Section
9.1(c)(iv).

      "Eligible  Account" shall mean an  identifiable  account which is separate
from all other  funds  held by the  holding  institution  that is either  (a) 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 (b) a segregated  trust account or accounts  maintained  with the
corporate  trust   department  of  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. ss.9.10(b), having in either case
a  combined  capital  and  surplus  of  at  least  $50,000,000  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  Institution" shall mean a federal or state chartered depository
institution  or  trust  company  insured  by  the  Federal   Deposit   Insurance
Corporation the short term


                                      -4-
<PAGE>

unsecured debt  obligations or commercial  paper of which are rated at least A-1
by S&P,  P-1 by Moody's and F-1+ by Fitch in the case of accounts in which funds
are held for  thirty  (30) days or less or, in the case of  Letters of Credit or
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 and S&P and
"Aa2" by Moody's.

      "Environmental  Indemnity" shall mean that certain Environmental Indemnity
Agreement  dated as of the date hereof  executed by Fee Borrower  and  Leasehold
Borrower in connection with the Loan for the benefit of Lender.

      "Equipment" shall have the meaning set forth in the granting clause of the
Mortgage.

      "ERISA" shall have the meaning set forth in Section 3.1.8.

      "Event of Default" shall have the meaning set forth in Section 10.1.

      "Exchange Act" shall have the meaning set forth in Section 9.2(a).

      "Exchange  Act  Filing"  shall  have the  meaning  set  forth  in  Section
9.1(c)(vi).

      "Excusable  Delay"  shall  mean a delay  due to acts of God,  governmental
restrictions, stays, judgments, orders, decrees, enemy actions, civil commotion,
fire,  casualty,  strikes,  work  stoppages,  shortages of labor or materials or
other causes beyond the reasonable control of Borrower, but lack of funds in and
of itself shall not be deemed a cause beyond the control of Borrower.

      "Extraordinary  Expense" shall mean an extraordinary  operating expense or
extraordinary capital expenditure not set forth in the Annual Budget.

      "Fee Borrower" shall mean N.J. Metromall Urban Renewal, Inc., a New Jersey
corporation, together with its permitted successors and permitted assigns.

      "Fiscal Year" shall mean each twelve month period  commencing on January 1
and ending on December 31 during each year of the term of the Loan.

      "Fitch" shall mean Fitch, Inc.

      "GAAP" shall mean generally  accepted  accounting  principles set forth in
the opinions  and  pronouncements  of the  Accounting  Principles  Board and the
American   Institute  of  Certified   Public   Accountants  and  statements  and
pronouncements  of the Financial  Accounting  Standards  Board (or agencies with
similar  functions of  comparable  stature and authority  within the  accounting
profession), or in such other statements by such entity as may be in general use
by significant segments of the U.S. accounting profession.

      "Governmental Authority" shall mean any court, board, agency,  commission,
office or authority of any nature  whatsoever or any governmental unit (federal,
state, county, district,  municipal, city or otherwise) whether now or hereafter
in existence.


                                      -5-
<PAGE>

      "GPC" shall mean Glimcher Properties Corporation, a Delaware corporation.

      "Gross  Revenue"  shall mean all revenue,  derived from the  ownership and
operation of the Property from whatever source,  including,  but not limited to,
Rents,  but  excluding  sales,  use and  occupancy  or other  taxes on  receipts
required  to be  accounted  for  by  Borrower  to  any  Governmental  Authority,
non-recurring  revenues  as  determined  by  Lender,  proceeds  from the sale or
refinancing of the Property,  security deposits (except to the extent determined
by Lender  to be  properly  utilized  to  offset a loss of  Rent),  refunds  and
uncollectible  accounts,  proceeds of casualty  insurance and Awards (other than
business  interruption  or other loss of income  insurance  related to  business
interruption   or  loss  of  income  for  the  period  in  question),   and  any
disbursements  to Borrower from the Reserve Funds or any other fund  established
by the Loan Documents.

      "Ground Lease" shall mean that certain  Amended and Restated  Master Lease
dated as of June 4, 1998, between the Fee Borrower,  as landlord,  and Leasehold
Borrower's  predecessor-in-interest  and Elizabeth  Metromall  LLC,  together as
lessee,  recorded on June 12, 1998 as  Instrument  No. 53426 in the Union County
Clerk's  Office;  as partially  assigned by that certain  Partial  Assignment of
Amended and Restated Master Lease dated June 4, 1998 by Elizabeth  Metromall LLC
to Power Center Ground Lessee, recorded on June 12, 1998 as Instrument No. 53427
and on June 25, 1998 as Instrument No. 53870 in the Union County Clerk's Office;
as amended by that certain  First  Amendment to the Amended and Restated  Master
Lease dated as of December 8, 2000 between N.J.  Metromall  Urban Renewal,  Inc.
and Elizabeth  Metromall  LLC and  consented to by Power Center  Ground  Lessee,
recorded on January 17, 2001 as Instrument No. 90263 in the Union County Clerk's
Office;  as further assigned by that certain  Assignment of Amended and Restated
Master  Lease  dated May 29,  2002 by N.J.  Metromall  Urban  Renewal,  Inc.  to
Glimcher JG Urban Renewal,  Inc. and recorded on June 28, 2002 as Instrument No.
109479 in the Union County Clerk's Office;  as further  assigned by that certain
Assignment of Amended and Restated  Master Lease dated May 29, 2002 by Elizabeth
Metromall,  LLC to Glimcher  Jersey  Gardens,  LLC  recorded on June 28, 2002 as
Instrument  No.  109480 in the Union County  Clerk's  Office and by that certain
Corrective  Assignment of Amended and Restated  Master Lease to Glimcher  Jersey
Gardens,  LLC dated  December  18,  2002 and  recorded  on January  27,  2003 as
Instrument No. 117877;  as further  partially  assigned by Assignment of Amended
and  Restated  Master  Lease  dated of even date  hereof  from  Glimcher  Jersey
Gardens,  LLC to Leasehold  Borrower to be recorded in the Union County  Clerk's
Office;  as further amended by that certain Second  Amendment to the Amended and
Restated  Master  Lease  dated of even date  hereof by Fee  Borrower,  Leasehold
Borrower and Glimcher JG Urban Renewal,  Inc. to be recorded in the Union County
Clerk's Office.

      "Ground Rent" shall mean any rent, additional rent or other charge payable
by the tenant under the Ground Lease.

      "Ground  Rent/PILOT  Payment  Funds"  shall have the  meaning set forth in
Section 6.2.1.

      "Guarantor" shall mean Glimcher Properties Limited Partnership, a Delaware
limited partnership.


                                      -6-
<PAGE>

      "Guaranty"  shall mean that certain  Guaranty of Recourse  Obligations  of
even date herewith from Guarantor for the benefit of Lender.

      "Improvements"  shall have the meaning set forth in the granting clause of
the Mortgage.

      "Indebtedness" shall mean, for any Person,  without  duplication:  (i) all
indebtedness of such Person for borrowed money, for amounts drawn under a letter
of credit,  or for the deferred purchase price of property for which such Person
or its assets is  liable,  (ii) all  unfunded  amounts  under a loan  agreement,
letter of credit, or other credit facility for which such Person would be liable
if such amounts were advanced thereunder,  (iii) all amounts required to be paid
by such Person as a  guaranteed  payment to  partners or a preferred  or special
dividend,  including any mandatory  redemption of shares or interests,  (iv) all
indebtedness  guaranteed by such Person,  (v) all obligations  under leases that
constitute  capital  leases  for  which  such  Person  is  liable,  and (vi) all
obligations of such Person under interest rate swaps, caps, floors,  collars and
other  interest  hedge  agreements,  in each case whether such Person is liable,
contingently or otherwise, as obligor,  guarantor or otherwise, or in respect of
which obligations such Person otherwise assures a creditor against loss.

      "Indemnified  Liabilities"  shall  have the  meaning  set forth in Section
11.13(b).

      "Independent  Director"  shall  have the  meaning  set  forth  in  Section
3.1.24(p).

      "Insolvency  Opinion" shall mean that certain bankruptcy  nonconsolidation
opinion  letter  dated the date  hereof  delivered  by Squire  Sanders & Dempsey
L.L.P. in connection with the Loan.

      "Insurance Funds" shall have the meaning set forth in Section 6.3.1.

      "Insurance Premiums" shall have the meaning set forth in Section 5.1.1(b).

      "Interest Rate" shall mean (a) with respect to Component A1, the Component
A1 Rate and (b) with respect to Component A2, the Component A2 Rate.

      "Investment Grade Rating" shall mean a long-term  unsecured debt rating of
at least BBB- by Fitch and S&P and Baa3 by Moody's.

      "Lease" shall mean any lease, sublease or subsublease,  letting,  license,
concession  or other  agreement  (whether  written  or oral and  whether  now or
hereafter  in  effect)  pursuant  to which any  Person is  granted a  possessory
interest  in, or right to use or occupy  all or any  portion of any space in the
Property, and every modification,  amendment or other agreement relating to such
lease, sublease, subsublease, or other agreement entered into in connection with
such lease, sublease, subsublease, or other agreement and every guarantee of the
performance  and  observance of the  covenants,  conditions and agreements to be
performed and observed by the other party thereto.

      "Leasehold  Borrower"  shall mean JG  Elizabeth,  LLC, a Delaware  limited
liability company, together with its permitted successors and permitted assigns.


                                      -7-
<PAGE>

      "Lease Termination Fee" shall have the meaning set forth in Section 6.6.1.

      "Lease  Termination  Rollover  Funds"  shall have the meaning set forth in
Section 6.6.1.

      "Legal Requirements" shall mean all federal, state, county,  municipal and
other  governmental  statutes,  laws, rules,  orders,  regulations,  ordinances,
judgments,   decrees  and  injunctions  of  Governmental  Authorities  affecting
Borrower  or the  Property  or  any  part  thereof  or  the  construction,  use,
alteration or operation thereof,  or any part thereof,  whether now or hereafter
enacted  and  in  force,  including,  without  limitation,  the  Americans  with
Disabilities  Act of 1990,  and all  permits,  licenses and  authorizations  and
regulations  relating thereto, and all covenants,  agreements,  restrictions and
encumbrances  contained  in any  instruments,  either  of  record  or  known  to
Borrower,  at any time in force  affecting  the  Property  or any part  thereof,
including, without limitation, any which may (i) require repairs,  modifications
or  alterations  in or to the Property or any part  thereof,  or (ii) in any way
limit the use and enjoyment thereof.

      "Lender"  shall mean Morgan  Stanley  Mortgage  Capital  Inc.,  a New York
corporation, together with its successors and assigns.

      "Lender Indemnitees" shall have the meaning set forth in Section 11.13(b).

      "Letter of Credit" shall mean an irrevocable, unconditional, transferable,
clean sight draft letter of credit  acceptable to Lender and the Rating Agencies
(either an  evergreen  letter of credit or one which  does not  expire  until at
least thirty (30) Business Days after the Maturity  Date) in favor of Lender and
entitling  Lender to draw  thereon in New York,  New York,  issued by a domestic
Eligible  Institution  or the  U.S.  agency  or  branch  of a  foreign  Eligible
Institution.  If at any time the bank  issuing any such  Letter of Credit  shall
cease to be an Eligible Institution,  Lender shall have the right immediately to
draw down the same in full and hold the proceeds of such draw in accordance with
the applicable provisions hereof.

      "Liabilities" shall have the meaning set forth in Section 9.2(b).

      "Lien"   shall  mean  any   mortgage,   deed  of  trust,   lien,   pledge,
hypothecation,  assignment,  security interest, 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,   materialmen's   and  other  similar  liens  and
encumbrances.

      "Loan" shall mean the loan in the original principal amount of One Hundred
Sixty-Five  Million  and  No/100  Dollars  ($165,000,000.00)  made by  Lender to
Borrower pursuant to this Agreement.

      "Loan Documents" shall mean,  collectively,  this Agreement, the Note, the
Mortgage,  the  Assignment  of  Leases,  the  Cash  Management  Agreement,   the
Environmental  Indemnity,  the Guaranty,  the Assignment of Management Agreement
and any other document pertaining to the Property as well as all other documents
now or hereafter executed and/or


                                      -8-
<PAGE>

delivered in  connection  with the Loan,  as the same may be amended,  restated,
replaced, supplemented or otherwise modified from time to time.

      "Major  Lease" shall mean any Lease  covering more than 30,000 square feet
at the Property.

      "Management Agreement" shall mean the management agreement entered into by
and between Leasehold Borrower and the Manager, pursuant to which the Manager is
to provide management and other services with respect to the Property.

      "Manager"   shall  mean,   collectively,   Glimcher   Properties   Limited
Partnership,   a  Delaware  limited   partnership,   and  Glimcher   Development
Corporation, a Delaware corporation, or any other manager approved in accordance
with the terms and conditions of the Loan Documents.

      "Manager  Termination  Ratio"  shall have the meaning set forth in Section
7.3.

      "Material  Agreements"  means each contract and agreement  relating to the
ownership, management, development, use, operation, leasing, maintenance, repair
or  improvement  of the  Property,  other  than the  Management  Agreement,  the
housekeeping agreement,  the security agreement and the Leases (provided, in the
case of the housekeeping  agreement and the security agreement,  Borrower is not
obligated  to pay more  than  $1,500,000.00  per  annum  pursuant  to each  such
agreement),  under  which  there is an  obligation  of Borrower to pay more than
$500,000.00 per annum.

      "Maturity  Date"  shall  mean June 8, 2014 or such other date on which the
final  payment of  principal  of the Note  becomes due and payable as therein or
herein  provided,  whether at such  stated  maturity  date,  by  declaration  of
acceleration, or otherwise; provided, however, if a Defeasance Event occurs, the
Maturity Date shall mean the Permitted Prepayment Date.

      "Maximum Legal Rate" shall mean the maximum nonusurious  interest rate, if
any,  that at any  time or from  time to  time  may be  contracted  for,  taken,
reserved,  charged or received on the indebtedness  evidenced by the Note and as
provided for herein or the other Loan Documents, under the laws of such state or
states whose laws are held by any court of competent  jurisdiction to govern the
interest rate provisions of the Loan.

      "Minimum  Disbursement  Amount" shall mean Twenty-Five Thousand and No/100
Dollars ($25,000).

      "Monthly  Debt  Service  Payment  Amount"  shall mean a  constant  monthly
payment of Eight Hundred Sixty-Eight  Thousand Six Hundred Ninety-Two and 37/100
Dollars  ($868,692.37);  provided,  however,  the Monthly Debt  Service  Payment
Amount  to be paid on the  Monthly  Payment  Date in July,  2004  shall be Eight
Hundred Forty Six Thousand  Five Hundred Fifty Four Thousand and 87/100  Dollars
($846,554.87).

      "Monthly  Payment Date" shall mean the eighth (8th) day of every  calendar
month  occurring  during the term of the Loan;  provided,  however,  if Borrower
elects to prepay


                                      -9-
<PAGE>

the Loan in full in accordance with the terms of this Agreement on the Permitted
Prepayment  Date,  March 6,  2014  shall be the  Monthly  Payment  Date for such
calendar month.

      "Moody's" shall mean Moody's Investors Service, Inc.

      "Morgan Stanley" shall have the meaning set forth in Section 9.2(b).

      "Morgan Stanley Group" shall have the meaning set forth in Section 9.2(b).

      "Mortgage"  shall  mean that  certain  first  priority  Fee and  Leasehold
Mortgage,  Assignment of Leases and Rents and Security Agreement, dated the date
hereof,  executed  and  delivered  by Fee  Borrower  and  Leasehold  Borrower as
security for the Loan and encumbering the Property,  as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.

      "Net Proceeds"  shall mean:  (i) the net amount of all insurance  proceeds
payable as a result of a Casualty to the Property, after deduction of reasonable
costs and expenses (including,  but not limited to, reasonable attorneys' fees),
if any, in collecting  such  insurance  proceeds,  or (ii) the net amount of the
Award,  after  deduction of reasonable  costs and expenses  (including,  but not
limited to, reasonable attorneys' fees), if any, in collecting such Award.

      "Net  Proceeds  Deficiency"  shall have the  meaning  set forth in Section
5.3.2(f).

      "Note"  shall  mean,  collectively,  Note A1 and Note A2, as either of the
same may  hereafter be amended,  supplemented,  restated,  increased,  extended,
consolidated or severed from time to time.

      "Note A1" shall mean that certain Promissory Note A1 dated the date hereof
executed by Fee  Borrower  and  Leasehold  Borrower  and payable to the order of
Lender which  represents  Component A1 of the Loan, as the same may hereafter be
amended, supplemented,  restated, increased,  extended,  consolidated or severed
from time to time.

      "Note A2" shall mean that certain Promissory Note A2 dated the date hereof
executed by Fee  Borrower  and  Leasehold  Borrower  and payable to the order of
Lender which  represents  Component A2 of the Loan, as the same may hereafter be
amended, supplemented,  restated, increased,  extended,  consolidated or severed
from time to time.

      "Notice" shall have the meaning set forth in Section 11.6.

      "Officer's  Certificate"  shall mean a certificate  delivered to Lender by
Borrower which is signed by an authorized senior officer of Borrower.

      "Operating   Agreements"   shall  mean  any  covenants,   restrictions  or
agreements  of record  relating  to the  construction,  operation  or use of the
Property.

      "Operating  Expenses"  shall mean all costs and  expenses  relating to the
operation,  maintenance  and  management  of the  Property,  including,  without
limitation,  utilities, repairs and maintenance,  insurance,  property taxes and
assessments,  advertising expenses,  payroll and related taxes,  equipment lease
payments, a management fee equal to the greater of


                                      -10-
<PAGE>

4% of annual base and percentage rents or the actual management fee, $200,000.00
per annum with  respect to capital  costs,  $1.00 per  rentable  square foot per
annum with respect to tenant rollover  expenses for portions of the Improvements
not subject to Major  Leases and $0.75 per  rentable  square foot per annum with
respect to tenant rollover expenses for portions of the Improvements  subject to
Major  Leases,   but  excluding  actual  Capital   Expenditures,   depreciation,
amortization,  Extraordinary  Expenses and  deposits  required to be made to the
Reserve  Funds;  provided,  however such costs and expenses  shall be subject to
adjustment by Lender to normalize such costs and expenses.

      "Other  Charges"  shall  mean  all  ground  rents,   maintenance  charges,
impositions  other  than  Taxes,  and  any  other  charges,  including,  without
limitation,  vault  charges and license  fees for the use of vaults,  chutes and
similar areas  adjoining the  Property,  now or hereafter  levied or assessed or
imposed against the Property or any part thereof.

      "Otherwise  Rated  Insurer"  shall have the  meaning  set forth in Section
5.1.2.

      "Permitted  Encumbrances"  shall  mean,  collectively,  (i) the  Liens and
security interests created by the Loan Documents,  (ii) all Liens,  encumbrances
and other matters disclosed in the Title Insurance Policy,  (iii) Liens, if any,
for Taxes imposed by any Governmental  Authority not yet due or delinquent,  and
(iv) such  other  title and survey  exceptions  as Lender  has  approved  or may
approve in writing in Lender's sole discretion.

      "Permitted  Investments"  shall  have the  meaning  set  forth in the Cash
Management Agreement.

      "Permitted  Owner" shall mean a Person who  satisfies (i) or (ii) or (iii)
below:

      (i) a Qualified Transferee;

      (ii) any  Person,  prior to a  Securitization,  approved  by Lender  (such
approval  not  to  be  unreasonably  withheld)  or,  regarding  which,  after  a
Securitization, Lender has received a Rating Agency Confirmation; or

      (iii) Sponsor.

      "Permitted  Prepayment Date" shall mean the Monthly Payment Date in March,
2014.

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

      "Physical  Conditions  Report" shall mean that certain Property  Condition
Report dated April 23, 2004 prepared by IVI International, Inc..

      "PILOT Agreement" shall mean that certain Financial  Agreement dated as of
May 1,  1998  between  Fee  Borrower  and the  City of  Elizabeth,  a  municipal
corporation in the


                                      -11-
<PAGE>

County of Union and the State of New Jersey,  pursuant to which Fee  Borrower is
obligated to make payments in lieu of real estate taxes for the Property.

      "PILOT  Payments"  shall mean the payments  payable by Fee Borrower to the
Trustee (as such term is defined in the PILOT  Agreement) for the benefit of the
City of Elizabeth,  a municipal corporation in the County of Union and the State
of New Jersey, under and pursuant to the PILOT Agreement.

      "Plan  Assets  Regulation"  shall  have the  meaning  set forth in Section
3.1.8.

      "Policies" shall have the meaning set forth in Section 5.1.1(b).

      "Power  Center  Ground  Lessee"  shall mean Jersey  Gardens  Center LLC, a
Delaware limited liability company,  together with its permitted  successors and
assigns.

      "Prepayment  Date"  shall  mean the date on which the Loan is  prepaid  in
accordance with the terms hereof.

      "Prescribed   Laws"  shall  mean,   collectively,   (a)  the  Uniting  and
Strengthening  America by Providing  Appropriate Tools Required to Intercept and
Obstruct  Terrorism Act of 2001 (Public Law 107-56) (The USA PATRIOT  Act),  (b)
Executive Order No. 13224 on Terrorist Financing,  effective September 24, 2001,
and relating to Blocking Property and Prohibiting  Transactions With Persons Who
Commit,  Threaten  to  Commit,  or  Support  Terrorism,  (c)  the  International
Emergency Economic Power Act, 50 U.S.C. ss.1701 et. seq. and (d) all other Legal
Requirements relating to money laundering or terrorism.

      "Property"  shall mean the parcel of real property,  the Ground Lease, the
Improvements  thereon and all personal property owned by Borrower and encumbered
by the  Mortgage,  together  with all rights  pertaining  to such  property  and
Improvements,  all as more particularly described in the Granting Clauses of the
Mortgage.

      "Qualified Transferee" shall mean any one of the following Persons:

      (i) a pension fund,  pension trust or pension  account that has total real
estate equity assets of at least $1 Billion; or

      (ii) a  pension  fund  advisor  who  immediately  prior to such  transfer,
controls at least $1 Billion of real estate equity assets; or

      (iii)  an  insurance  company  which  is  subject  to  supervision  by the
insurance commissioner, or a similar official or agency, of a state or territory
of the United States  (including the District of Columbia) (a) with a net worth,
as of a date no more than six (6) months prior to the date of the transfer of at
least $500 Million and (b) who,  immediately  prior to such  transfer,  controls
real estate equity assets of at least $1 Billion; or

      (iv) a corporation  organized  under the banking laws of the United States
or any state or  territory  of the United  States  (including  the  District  of
Columbia) with a combined capital and surplus of at least $500 Million; or


                                      -12-
<PAGE>

      (v) any Person with an  Investment  Grade  Rating from at least one (1) of
the Rating  Agencies  (provided that none of the Rating Agencies have assigned a
rating which is not an  Investment  Grade Rating to such Person) who (A) owns or
operates,  together with its Affiliates,  at least twelve (12) regional or super
regional malls totaling at least 6,000,000 square feet of gross leasable area of
space and (B)  immediately  prior to such transfer,  controls real estate equity
assets of at least $1 Billion; or

      (vi) any Person who (A) owns or operates, together with its Affiliates, at
least twelve (12) regional or super regional  malls totaling at least  6,000,000
square feet of gross leasable area of space,  (B) has a net worth,  as of a date
no more than six (6) months prior to the date of such transfer, of at least $500
Million and (C) immediately prior to such transfer,  controls real estate equity
assets of at least $1 Billion.

      "Rating  Agencies" shall mean,  prior to the final  Securitization  of the
Loan,  each  of S&P,  Moody's  and  Fitch,  or any  other  nationally-recognized
statistical  rating agency which has been  designated  by Lender and,  after the
final  Securitization  of the Loan,  shall mean any of the  foregoing  that have
rated any of the Securities.

      "Rating Agency Confirmation" shall mean a written affirmation from each of
the Rating  Agencies  that the credit  rating of the  Securities  by such Rating
Agency  immediately  prior to the  occurrence of the event with respect to which
such Rating Agency  Confirmation is sought will not be qualified,  downgraded or
withdrawn as a result of the occurrence of such event,  which affirmation may be
granted or withheld in such Rating Agency's sole and absolute discretion.

      "Registration  Statement"  shall  have the  meaning  set forth in  Section
9.2(b).

      "REIT" shall mean Glimcher Realty Trust, a Maryland real estate investment
trust.

      "Related Party" and "Related  Parties" shall have the meaning set forth in
Section 3.1.43(a).

      "Release  Date"  shall  mean  the  earlier  to  occur  of  (i)  the  third
anniversary of the Closing Date and (ii) the date that is two (2) years from the
"startup  day"  (within  the meaning of Section  860G(a)(9)  of the Code) of the
REMIC Trust established in connection with the last Securitization involving any
portion of this Loan.

      "REMIC  Trust"  shall mean a "real  estate  mortgage  investment  conduit"
within the meaning of Section 860D of the Code that holds the Note.

      "Rent Deficiency" shall have the meaning set forth in Section 6.6.2.

      "Rents"  shall  mean all  rents,  moneys  payable as damages or in lieu of
rent, revenues, deposits (including,  without limitation,  security, utility and
other deposits), accounts, cash, issues, profits, charges for services rendered,
and other consideration of whatever form or nature received by or paid to or for
the account of or benefit of Borrower  or its agents or  employees  from any and
all sources arising from or attributable to the Property.


                                      -13-
<PAGE>

      "Replacement Lease" shall have the meaning set forth in Section 6.6.2.

      "Required Amount" shall mean an amount calculated on an annual basis which
is equal to the sum of  $200,000.00  multiplied by a fraction,  the numerator of
which shall be the CPI level  ninety (90) days prior to the renewal  date of the
applicable  insurance policy and the denominator of which shall be the CPI level
on the Closing  Date.  The Required  Amount,  as adjusted by the CPI ninety (90)
days prior to the renewal date of the applicable  insurance policy,  shall apply
only to the next  succeeding  renewal of any  insurance  policy  required  under
Section 5.1.1(a)(xi).

      "Reserve Funds" shall mean,  collectively,  the Insurance  Funds,  the Tax
Funds, the Ground Rent/PILOT Payment Funds, the Lease Termination Rollover Funds
and the Rollover Funds.

      "Restoration" shall have the meaning set forth in Section 5.2.1.

      "Restoration  Threshold"  shall  mean  Four  Million  and  No/100  Dollars
($4,000,000.00).

      "Rollover Funds" shall have the meaning set forth in Section 6.5.1.

      "S&P" shall mean  Standard & Poor's  Ratings  Services,  a division of the
McGraw-Hill Companies, Inc.

      "Scheduled  Defeasance Payments" shall mean scheduled payments of interest
and principal  under the Note for all Monthly  Payment Dates occurring after the
Defeasance Date and up to and including the Permitted Prepayment Date (including
the  outstanding  principal  balance on the Note as of the Permitted  Prepayment
Date),  and all payments  required after the Defeasance  Date, if any, under the
Loan Documents for servicing fees and other similar charges.

      "Secondary Market Transaction" shall have the meaning set forth in Section
9.1(a).

      "Securities" shall have the meaning set forth in Section 9.1(a).

      "Securities Act" shall have the meaning set forth in Section 9.2(a).

      "Securitization" shall have the meaning set forth in Section 9.1(a).

      "Security Agreement" shall mean a security agreement in form and substance
that would be satisfactory to a prudent lender pursuant to which Borrower grants
Lender  a  perfected,   first  priority  security  interest  in  the  Defeasance
Collateral Account and the Defeasance Collateral.

      "Servicer" shall have the meaning set forth in Section 11.24.

      "Servicing Agreement" shall have the meaning set forth in Section 11.24.


                                      -14-
<PAGE>

      "Severed  Loan  Documents"  shall  have the  meaning  set forth in Section
10.2(c).

      "SPC Party" shall have the meaning set forth in Section 3.1.24(o).

      "Sponsor" shall mean Glimcher Properties Limited  Partnership,  a Delaware
limited partnership, or any successor.

      "Standard Statement" shall have the meaning set forth in Section 9.1(c).

      "State" shall mean the State or  Commonwealth in which the Property or any
part thereof is located.

      "Successor Borrower" shall have the meaning set forth in Section 2.5.3.

      "Survey"  shall  mean a survey  of the  Property  prepared  by a  surveyor
licensed in the State and  satisfactory  to Lender and the company or  companies
issuing the Title  Insurance  Policy,  and  containing a  certification  of such
surveyor satisfactory to Lender.

      "Taxes"  shall  mean  all  real  estate  and  personal   property   taxes,
assessments,  water rates or sewer rents, now or hereafter levied or assessed or
imposed  against the Property or part  thereof,  together  with all interest and
penalties thereon.

      "Tax Funds" shall have the meaning set forth in Section 6.4.1.

      "Tenant"  shall mean any Person  obligated by contract or otherwise to pay
monies  (including a percentage of gross income,  revenue or profits)  under any
Lease now or hereafter affecting all or any part of the Property.

      "Termination Space" shall have the meaning set forth in Section 6.6.1.

      "Title  Insurance  Policy" shall mean an ALTA  mortgagee  title  insurance
policy in the form  acceptable to Lender issued with respect to the Property and
insuring the lien of the Mortgage.

      "Treasury Rate" shall mean, as of the Maturity Date, the yield, calculated
by Lender by linear interpolation  (rounded to the nearest one-thousandth of one
percent  (i.e.,  0.001%) of the  yields of  non-inflation  adjusted  noncallable
United States Treasury  obligations with terms (one longer and one shorter) most
nearly  approximating the period from such date of determination to the Maturity
Date,  as  determined  by  Lender on the basis of  Federal  Reserve  Statistical
Release  H.15-Selected  Interest  Rates  under  the  heading  U.S.  Governmental
Security/Treasury Constant Maturities, or another recognized source of financial
market information  selected by Lender.  Lender's  determination of the Treasury
Rate shall be final absent manifest error.

      "Trigger  Event"  shall mean the  occurrence  of either one or both of the
following  events:  (a) an Event of Default or (b) a Debt Service Coverage Ratio
Event.


                                      -15-
<PAGE>

      "Trigger  Period"  shall  mean a  period  commencing  on the  first  (1st)
Business Day after a Trigger Event has occurred through the first (1st) Business
Day after the  related  Event of Default no longer  exists or the  related  Debt
Service Coverage Ratio Event has not existed for a period of six (6) consecutive
months, as applicable.

      "Trustee" shall mean any trustee holding the Loan in a Securitization.

      "UCC" or "Uniform  Commercial Code" shall mean the Uniform Commercial Code
as in effect in the State.

      "Underwritable  Cash Flow"  shall mean the  excess of Gross  Revenue  over
Operating Expenses.  Lender's  calculation of Underwritable Cash Flow (including
determination  of items  that do not  qualify  as  Gross  Revenue  or  Operating
Expenses)  shall be calculated by Lender based upon  Lender's  determination  of
Rating Agency criteria and shall be final absent manifest error.

      "Underwriter Group" shall have the meaning set forth in Section 9.2(b).

      "Updated  Information"  shall  have  the  meaning  set  forth  in  Section
9.1(b)(i).

      "U.S.  Obligations" shall mean direct full faith and credit obligations of
the United States of America that are not subject to  prepayment,  call or early
redemption.

      "Yield Maintenance  Premium" shall mean an amount equal to the greater of:
(i) one percent (1%) of the  principal  amount of the Loan being prepaid or (ii)
the present value as of the Prepayment Date of the Calculated  Payments from the
Prepayment  Date  through the  Maturity  Date  determined  by  discounting  such
payments at the Discount Rate. As used in this definition,  the term "Prepayment
Date"  shall  mean  the  date  on  which  prepayment  is  made.  As used in this
definition,  the term  "Calculated  Payments" shall mean the monthly payments of
interest only which would be due based on the principal amount of the Loan being
prepaid on the Prepayment  Date and assuming an interest rate per annum equal to
the  difference  (if such  difference  is  greater  than zero)  between  (y) the
Interest  Rate and (z) the  Yield  Maintenance  Treasury  Rate.  As used in this
definition,  the term "Discount Rate" shall mean the rate which, when compounded
monthly,  is equivalent to the Yield Maintenance  Treasury Rate, when compounded
semi-annually.  As used in this definition, the term "Yield Maintenance Treasury
Rate" shall mean the yield  calculated by Lender by the linear  interpolation of
the yields, as reported in the Federal Reserve Statistical Release H.15-Selected
Interest Rates under the heading U.S.  Government  Securities/Treasury  Constant
Maturities  for the week ending prior to the Prepayment  Date, of U.S.  Treasury
Constant  Maturities with maturity dates (one longer or one shorter) most nearly
approximating  the  Maturity  Date.  In the  event  Release  H.15  is no  longer
published,  Lender shall select a comparable  publication to determine the Yield
Maintenance  Treasury  Rate. In no event,  however,  shall Lender be required to
reinvest any  prepayment  proceeds in U.S.  Treasury  obligations  or otherwise.

      Section 1.2 Principles of Construction.

      All  references to sections and schedules are to sections and schedules in
or to this Agreement unless otherwise specified. Unless otherwise specified, the
words "hereof," "herein"


                                      -16-
<PAGE>

and  "hereunder"  and words of similar import when used in this Agreement  shall
refer to this Agreement as a whole and not to any  particular  provision of this
Agreement.  Unless otherwise specified, all meanings attributed to defined terms
herein shall be equally  applicable to both the singular and plural forms of the
terms so defined.

      II.   THE LOAN

      Section 2.1 The Loan.

      2.1.1  Agreement  to Lend and  Borrow.  Subject  to and upon the terms and
conditions set forth herein, Lender shall make the Loan to Borrower and Borrower
shall accept the Loan from Lender on the Closing Date.

      2.1.2 Single  Disbursement  to Borrower.  Borrower  shall receive only one
borrowing  hereunder  in respect of the Loan and any amount  borrowed and repaid
hereunder in respect of the Loan may not be reborrowed.

      2.1.3  The  Note.  The Loan  shall be  evidenced  by the Note of even date
herewith,  in the aggregate  principal amount of One Hundred  Sixty-Five Million
and No/100 Dollars  ($165,000,000.00) and shall be repaid in accordance with the
terms of this Agreement and the Note.

      2.1.4 Use of Proceeds.  Borrower shall use proceeds of the Loan to (i) pay
and discharge any existing loans relating to the Property, (ii) pay all past-due
Basic  Carrying  Costs,  if any, in respect of the  Property,  (iii) deposit the
Reserve  Funds,  (iv) pay costs and  expenses  incurred in  connection  with the
closing  of the Loan,  as  approved  by  Lender,  (v) fund any  working  capital
requirements of the Property,  as approved by Lender,  (vi) acquire the Property
and (vii) retain the balance, if any.

      2.1.5  Modification  of  Components.  Lender shall have the right,  at any
time, to modify the Loan in order to create  additional  Components,  reduce the
number of  Components,  reallocate  the principal  balances of the Components or
eliminate  the  Component  structure  of the Loan  provided  that (a) the  total
principal  balance  of the Loan  immediately  after the  effective  date of such
modification  equals the outstanding  principal  balance of the Loan immediately
prior to such  modification,  and (b) the weighted average of the interest rates
for all Components  immediately  after the effective  date of such  modification
equals the weighted average of the interest rates for all Components immediately
prior to such modification. Lender shall have the right to modify the Components
in  accordance  with this Section  2.1.5 upon prior notice to Borrower (in which
event such modification shall then be deemed effective). If requested by Lender,
Borrower shall  promptly  execute an amendment to this Agreement and the Note to
evidence such modification.

      Section 2.2 Interest Rate.

      2.2.1 Interest Rate. Interest on the outstanding principal balance of each
Component  shall accrue from the Closing Date up to but  excluding  the Maturity
Date at the Interest Rate.


                                      -17-
<PAGE>

      2.2.2 Intentionally Omitted.

      2.2.3 Default  Rate.  In the event that,  and for so long as, any Event of
Default shall have occurred and be continuing, the outstanding principal balance
of the Loan and, to the extent  permitted by law, overdue interest in respect of
the Loan,  shall accrue  interest at the Default Rate,  calculated from the date
such  payment  was due  without  regard to any grace or cure  periods  contained
herein.

      2.2.4 Interest Calculation.  Interest on the outstanding principal balance
of each Component  shall be calculated by  multiplying  (a) the actual number of
days  elapsed  in the period  for which the  calculation  is being made by (b) a
daily rate based on a three  hundred sixty (360) day year (that is, the Interest
Rate or the  Default  Rate,  as then  applicable,  expressed  as an annual  rate
divided by 360) by (c) the outstanding principal balance. The accrual period for
calculating  interest due on each Monthly  Payment Date shall be the period from
the eighth (8th) day of the  calendar  month  immediately  prior to such Monthly
Payment Date through and including  the seventh (7th) day of the calendar  month
in which such Monthly Payment Date occurs.

      2.2.5 Usury  Savings.  This  Agreement  and the other Loan  Documents  are
subject to the express  condition  that at no time shall Borrower be required to
pay interest on the principal  balance of the Loan at a rate which could subject
Lender to either  civil or criminal  liability as a result of being in excess of
the Maximum  Legal  Rate.  If by the terms of this  Agreement  or the other Loan
Documents,  Borrower is at any time required or obligated to pay interest on the
principal  balance due  hereunder at a rate in excess of the Maximum Legal Rate,
the Interest Rate or the Default Rate, as the case may be, shall be deemed to be
immediately  reduced to the  Maximum  Legal Rate and all  previous  payments  in
excess of the  Maximum  Legal  Rate  shall be deemed  to have been  payments  in
reduction of principal  and not on account of the  interest due  hereunder.  All
sums paid or agreed to be paid to Lender for the use, forbearance,  or detention
of the sums due under the Loan,  shall,  to the extent  permitted by  applicable
law, be amortized,  prorated,  allocated,  and spread throughout the full stated
term of the Loan until payment in full so that the rate or amount of interest on
account of the Loan does not exceed the Maximum  Legal Rate from time to time in
effect and applicable to the Loan for so long as the Loan is outstanding.

      Section 2.3 Loan Payments.

      2.3.1  Payment.  Borrower  shall make a payment to Lender of principal and
interest in the amount of the Monthly Debt Service Payment Amount on the Monthly
Payment Date occurring in July, 2004 and on each Monthly Payment Date thereafter
to and including the Maturity  Date.  Each payment shall be applied (a) first to
accrued and unpaid  interest on all of the  Components and (b) the balance shall
be applied to  principal  of all the  Components,  pro rata and pari passu.  The
Monthly  Payment  Amount  required  hereunder  is based upon a thirty  (30) year
amortization schedule.

      2.3.2 Intentionally Omitted.


                                      -18-
<PAGE>

      2.3.3  Payment  on  Maturity  Date.  Borrower  shall  pay to Lender on the
Maturity Date the  outstanding  principal  balance of the Loan,  all accrued and
unpaid  interest  (including  without  limitation the Accrued  Interest) and all
other amounts due hereunder and under the Note,  the Mortgage and the other Loan
Documents.

      2.3.4 Late Payment Charge. If any principal, interest or any other sum due
under  the Loan  Documents,  other  than the  payment  of  principal  due on the
Maturity Date, is not paid by Borrower on the date on which it is due,  Borrower
shall pay to Lender upon demand an amount  equal to the lesser of three  percent
(3%) of such unpaid sum or the maximum  amount  permitted by  applicable  law in
order to defray the expense  incurred by Lender in handling and processing  such
delinquent  payment  and to  compensate  Lender  for the loss of the use of such
delinquent  payment.  Any such amount  shall be secured by the  Mortgage and the
other Loan  Documents.  Notwithstanding  the  foregoing,  Borrower  shall not be
required to pay such amount to the extent  sufficient  amounts are on deposit in
the applicable Accounts (as defined in the Cash Management Agreement) to satisfy
such  obligations  on the dates each such  payment is  required,  regardless  of
whether any of such amounts are so applied by Lender  provided that Borrower has
not attempted to stop payment of such sums.

      2.3.5 Method and Place of Payment.  (a) Except as  otherwise  specifically
provided herein,  all payments and prepayments under this Agreement and the Note
shall be made to Lender  not later than 2:00  P.M.,  New York City time,  on the
date when due and shall be made in lawful money of the United  States of America
in immediately  available  funds at Lender's  office,  and any funds received by
Lender after such time shall,  for all purposes  hereof,  be deemed to have been
paid on the next succeeding Business Day.

      (b)  Whenever  any  payment to be made  hereunder  or under any other Loan
Document shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be the preceding Business Day.

      (c) All  payments  required to be made by Borrower  hereunder or under the
Note or the other Loan  Documents  shall be made  irrespective  of, and  without
deduction for, any setoff,  claim or counterclaim and shall be made irrespective
of any defense thereto.

      2.3.6  Payments  After  Event of Default.  Any amounts  received by Lender
following an Event of Default  shall be applied by Lender  toward the payment of
interest and/or principal of any of the Components  and/or any other amounts due
under the Loan  Documents in such order,  priority and  proportions as Lender in
its sole discretion shall deem proper.

      Section 2.4 Prepayments.

      2.4.1 Voluntary Prepayments. Except as otherwise provided herein, Borrower
shall not have the right to  prepay  the Loan in whole or in part.  On and after
the Permitted  Prepayment Date,  Borrower may,  provided no Event of Default has
occurred and is continuing, at its option and upon thirty (30) days prior notice
to Lender (or such  shorter  period of time as may be permitted by Lender in its
sole  discretion),  prepay the Debt in whole on any date without  payment of the
Yield  Maintenance  Premium.  Any prepayment  received by Lender on a date other
than a Monthly  Payment  Date shall  include  interest  which would have accrued
thereon to


                                      -19-
<PAGE>

the next  Monthly  Payment Date and such amounts  (i.e.  principal  and interest
prepaid by Borrower) shall be held by Lender as collateral security for the Loan
in an  interest  bearing  account  at an  Eligible  Institution,  with  interest
accruing on such amounts to the benefit of Borrower;  such amounts prepaid shall
be applied to the Loan on the next Monthly  Payment  Date,  with any interest on
such funds  paid to  Borrower  on such date  provided  no Event of Default  then
exists.

      2.4.2  Mandatory  Prepayments.  On each  date  on  which  Lender  actually
receives a distribution of Net Proceeds,  and if Lender is not obligated to make
such Net Proceeds  available to Borrower for a Restoration,  Borrower  shall, at
Lender's  option,  prepay the  outstanding  principal  balance of the Note in an
amount equal to one hundred  percent  (100%) of such Net Proceeds  together with
interest  that  would have  accrued on such  amounts  through  the next  Monthly
Payment  Date.  The full amount of any such  prepayment  shall be applied to the
Components in the order specified in Section 2.3.1. No Yield Maintenance Premium
shall be due in  connection  with any  prepayment  made pursuant to this Section
2.4.2.  Any  prepayment  received by Lender  pursuant to this Section 2.4.2 on a
date other  than a Monthly  Payment  Date shall be held by Lender as  collateral
security  for the  Loan in an  interest  bearing  account,  with  such  interest
accruing to the benefit of Borrower,  and shall be applied by Lender on the next
Monthly Payment Date.

      2.4.3 Prepayments After Default. If after an Event of Default,  payment of
all or any  part  of the  principal  of the  Loan is  tendered  by  Borrower,  a
purchaser at  foreclosure  or any other  Person,  such tender shall be deemed an
attempt to circumvent the  prohibition  against  prepayment set forth in Section
2.4.1 and Borrower,  such purchaser at foreclosure or other Person shall pay the
Yield Maintenance Premium, in addition to the outstanding principal balance, all
accrued and unpaid  interest and other amounts payable under the Loan Documents.
The full  amount of any such  prepayment  shall be applied by Lender  toward the
payment of interest and/or  principal of any of the Components  and/or any other
amounts due under the Loan Documents in such order,  priority and proportions as
Lender in its sole discretion shall deem proper.

      Section 2.5 Defeasance.

      2.5.1  Conditions  to  Defeasance.  (a) Provided no Event of Default shall
have  occurred  and remain  uncured,  Borrower  shall have the right at any time
after the Release Date and prior to the Permitted Prepayment Date to voluntarily
defease  the entire  Loan and obtain a release  of the lien of the  Mortgage  by
providing  Lender with the  Defeasance  Collateral  (hereinafter,  a "Defeasance
Event"), subject to the satisfaction of the following conditions precedent:

      (i) Borrower  shall  provide  Lender not less than thirty (30) days notice
(or such shorter  period of time if permitted by Lender in its sole  discretion)
specifying a date (the  "Defeasance  Date") on which the Defeasance  Event is to
occur;

      (ii)  Borrower  shall pay to Lender  (A) all  payments  of  principal  and
interest due on the Loan to and including the Defeasance  Date and (B) all other
sums, then due under the Note,  this Agreement,  the Mortgage and the other Loan
Documents;


                                      -20-
<PAGE>

      (iii) Borrower shall deposit the Defeasance Collateral into the Defeasance
Collateral  Account and otherwise  comply with the  provisions of Sections 2.5.2
and 2.5.3 hereof;

      (iv) Borrower shall execute and deliver to Lender a Security  Agreement in
respect of the Defeasance Collateral Account and the Defeasance Collateral;

      (v)  Borrower  shall  deliver to Lender an opinion of counsel for Borrower
that  is  standard  in  commercial  lending  transactions  and  subject  only to
customary  qualifications,  assumptions  and  exceptions  opining,  among  other
things,  that (A) Lender has a valid perfected first priority  security interest
in the Defeasance  Collateral  Account and the Defeasance  Collateral,  (B) if a
Securitization   has  occurred,   the  REMIC  Trust  formed   pursuant  to  such
Securitization  will not fail to maintain its status as a "real estate  mortgage
investment  conduit"  within the meaning of Section 860D of the Code as a result
of a Defeasance  Event pursuant to this Section 2.5 and (C) a  non-consolidation
opinion with respect to the Successor Borrower;

      (vi) Borrower shall deliver to Lender a Rating Agency  Confirmation  as to
the Defeasance Event;

      (vii) Borrower shall deliver an Officer's Certificate  certifying that the
requirements set forth in this Section 2.5 have been satisfied;

      (viii)  Borrower  shall  deliver a  certificate  of a "Big  Four" or other
nationally  recognized  public  accounting firm acceptable to Lender  certifying
that the Defeasance Collateral will generate monthly amounts equal to or greater
than the Scheduled Defeasance Payments;

      (ix) Borrower shall deliver such other certificates,  opinions,  documents
and instruments as Lender may reasonably request; and

      (x)  Borrower  shall pay all  costs and  expenses  of Lender  incurred  in
connection with the Defeasance Event,  including Lender's reasonable  attorneys'
fees and expenses and Rating Agency fees and expenses.

      (b) If Borrower  has elected to defease the Note and the  requirements  of
this Section 2.5 have been  satisfied,  the Property  shall be released from the
lien of the  Mortgage  and the  Defeasance  Collateral  pledged  pursuant to the
Security Agreement shall be the sole source of collateral  securing the Note. In
connection  with the release of the Lien,  Borrower shall submit to Lender,  not
less than thirty (30) days prior to the Defeasance Date (or such shorter time as
is acceptable to Lender in its sole discretion),  a release of Lien (and related
Loan  Documents)  for  execution  by  Lender.  Such  release  shall be in a form
appropriate  in the  jurisdiction  in which the  Property  is  located  and that
contains standard  provisions  protecting the rights of the releasing lender. In
addition,  Borrower  shall  provide all other  documentation  Lender  reasonably
requires to be delivered by Borrower in connection  with such release,  together
with an  Officer's  Certificate  certifying  that such  documentation  (i) is in
compliance  with all Legal  Requirements,  and (ii) will effect such  release in
accordance with the terms of this Agreement. Borrower shall pay all costs, taxes
and expenses associated with the release of the lien of the Mortgage,  including
Lender's reasonable attorneys' fees. Except as set forth in this Section 2.5, no
repayment,  prepayment  or  defeasance  of all or any  portion of the Note shall
cause,  give rise to a right to require,  or otherwise result in, the release of
the lien of the Mortgage on the Property.


                                      -21-
<PAGE>

      2.5.2  Defeasance  Collateral  Account.  On or  before  the  date on which
Borrower delivers the Defeasance Collateral, Borrower shall open at any Eligible
Institution  the  defeasance  collateral  account  (the  "Defeasance  Collateral
Account")  which  shall at all  times be an  Eligible  Account.  The  Defeasance
Collateral Account shall contain only (i) Defeasance  Collateral,  and (ii) cash
from interest and principal  paid on the  Defeasance  Collateral.  All cash from
interest and principal payments paid on the Defeasance  Collateral shall be paid
over to Lender on each  Monthly  Payment  Date and applied  first to accrued and
unpaid interest and then to principal. Any cash from interest and principal paid
on the Defeasance Collateral not needed to pay the Scheduled Defeasance Payments
shall be paid to  Borrower.  Borrower  shall cause the Eligible  Institution  at
which the Defeasance Collateral is deposited to enter an agreement with Borrower
and Lender,  satisfactory  to Lender in its sole  discretion,  pursuant to which
such Eligible  Institution  shall agree to hold and  distribute  the  Defeasance
Collateral  in  accordance  with  this  Agreement.  The  Borrower  or  Successor
Borrower, as applicable, shall be the owner of the Defeasance Collateral Account
and shall report all income accrued on Defeasance Collateral for federal,  state
and local  income tax purposes in its income tax return.  Borrower  shall prepay
all cost and expenses  associated  with opening and  maintaining  the Defeasance
Collateral  Account.  Lender  shall  not in any way be  liable  by reason of any
insufficiency in the Defeasance Collateral Account.

      2.5.3 Successor Borrower. In connection with a Defeasance Event under this
Section 2.5,  Borrower  shall, if required by the Rating Agencies or if Borrower
elects to do so,  establish  or  designate  a successor  entity (the  "Successor
Borrower")  which shall be a single purpose  bankruptcy  remote entity and which
shall be approved by the Rating  Agencies.  Any such Successor  Borrower may, at
Borrower's  option, be an Affiliate of Borrower unless the Rating Agencies shall
require  otherwise.  Borrower shall transfer and assign all obligations,  rights
and duties under and to the Note,  together  with the  Defeasance  Collateral to
such Successor  Borrower.  Such Successor  Borrower shall assume the obligations
under the Note and the Security  Agreement and Borrower shall be relieved of its
obligations under such documents.  Borrower shall pay a minimum of $1,000 to any
such Successor  Borrower as consideration for assuming the obligations under the
Note and the  Security  Agreement.  Borrower  shall pay all  costs and  expenses
incurred by Lender, including Lender's attorney's fees and expenses, incurred in
connection therewith.

      III.  REPRESENTATIONS AND WARRANTIES

      Section 3.1 Borrower Representations.

      Borrower represents and warrants that:

      3.1.1 Organization.  (a) Each of Fee Borrower, Leasehold Borrower and each
SPC Party is duly  organized,  validly  existing and in good  standing with full
power and  authority  to own its assets and  conduct its  business,  and is duly
qualified in all  jurisdictions  in which the ownership or lease of its property
or the conduct of its business  requires  such  qualification,  except where the
failure  to be so  qualified  would not have a  material  adverse  effect on its
ability  to  perform  its  obligations  hereunder,  and  Borrower  has taken all
necessary  action to authorize the execution,  delivery and  performance of this
Agreement and the other Loan Documents by it, and


                                      -22-
<PAGE>

has the  power  and  authority  to  execute,  deliver  and  perform  under  this
Agreement,  the  other  Loan  Documents  and all the  transactions  contemplated
hereby.

      (b)  Fee  Borrower's  and  Leasehold  Borrower's  exact  legal  names  are
correctly set forth in the first paragraph of this  Agreement.  Fee Borrower and
Leasehold  Borrower are each an  organization of the type specified in the first
paragraph  of this  Agreement.  Fee  Borrower  and  Leasehold  Borrower are each
incorporated  or  organized  under the laws of the state  specified in the first
paragraph of this Agreement.  Fee Borrower's and Leasehold  Borrower's principal
places of  business  and  chief  executive  offices,  and the  places  where Fee
Borrower  and  Leasehold  Borrower  keep  their  respective  books and  records,
including  recorded  data of any kind or  nature,  regardless  of the  medium of
recording,  including software,  writings, plans, specifications and schematics,
have been for the  preceding  four (4) months (or, if less than four (4) months,
the entire  period of the  existence of Fee Borrower or Leasehold  Borrower,  as
applicable)  and will  continue to be the address of Fee Borrower and  Leasehold
Borrower set forth in the first paragraph of this Agreement (unless Fee Borrower
or Leasehold Borrower notifies Lender in writing at least thirty (30) days prior
to the date of such change). Fee Borrower's federal tax identification number is
31-1525512.  Leasehold Borrower's organizational  identification number, if any,
assigned by the state of its incorporation or organization is 3795099. Leasehold
Borrower's federal tax identification number is 20-1085187. Neither Fee Borrower
nor Leasehold Borrower is subject to back-up withholding taxes.

      3.1.2  Proceedings.  This Agreement and the other Loan Documents have been
duly authorized,  executed and delivered by Borrower and constitute legal, valid
and binding obligations of Borrower,  enforceable against Borrower in accordance
with  their  respective  terms,  except as such  enforcement  may be  limited by
bankruptcy,  insolvency,  reorganization,   moratorium  or  other  similar  laws
affecting  the  enforcement  of  creditors'  rights  generally,  and by  general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).

      3.1.3 No Conflicts.  The execution and delivery of this  Agreement and the
other  Loan  Documents  by  Borrower  and  the  performance  of its  obligations
hereunder  and  thereunder  will not conflict  with any  provision of any law or
regulation to which Borrower is subject,  or conflict  with,  result in a breach
of, or constitute a default under, any of the terms, conditions or provisions of
any of  Borrower's  organizational  documents or any  agreement or instrument to
which  Borrower  is a party or by  which it is  bound,  or any  order or  decree
applicable  to Borrower,  or result in the creation or imposition of any lien on
any  of  Borrower's  assets  or  property  (other  than  pursuant  to  the  Loan
Documents).

      3.1.4 Litigation.  There is no action,  suit,  proceeding or investigation
pending or, to Borrower's knowledge, threatened against Borrower in any court or
by or  before  any other  Governmental  Authority  which  would  materially  and
adversely  affect  the  ability  of  Borrower  to  carry  out  the  transactions
contemplated by this Agreement.

      3.1.5 Agreements.  Borrower is not in default with respect to any order or
decree  of any court or any  order,  regulation  or  demand of any  Governmental
Authority,  which  default might have  consequences  that would  materially  and
adversely affect the condition


                                      -23-
<PAGE>

(financial or other) or  operations of Borrower or its  properties or might have
consequences   that  would  materially  and  adversely  affect  its  performance
hereunder.

      3.1.6 Consents. No consent, approval,  authorization or order of any court
or  Governmental   Authority  is  required  for  the  execution,   delivery  and
performance  by Borrower of, or compliance by Borrower  with,  this Agreement or
the consummation of the transactions contemplated hereby, other than those which
have been obtained by Borrower.

      3.1.7 Title.  Fee Borrower has good,  marketable  and insurable fee simple
title to the real property comprising part of the Property and good title to the
balance  of the  Property  owned by it,  free and clear of all Liens  whatsoever
except the Permitted  Encumbrances.  Leasehold Borrower has good, marketable and
insurable  leasehold title to the real property  comprising part of the Property
and the Ground Lease and good title to the balance of the Property  owned by it,
free and clear of all Liens whatsoever  except the Permitted  Encumbrances.  The
Mortgage,  when properly recorded in the appropriate records,  together with any
Uniform Commercial Code financing  statements required to be filed in connection
therewith,  will  create  (i) a valid,  first  priority,  perfected  lien on the
Property,  subject only to Permitted  Encumbrances  and (ii) perfected  security
interests in and to, and perfected  collateral  assignments  of, all  personalty
(including the Leases),  all in accordance with the terms thereof,  in each case
subject  only  to  any  Permitted   Encumbrances.   There  are  no   mechanics',
materialman's  or other  similar liens or claims which have been filed for work,
labor or materials affecting the Property which are or may be liens prior to, or
equal or  coordinate  with,  the  lien of the  Mortgage.  None of the  Permitted
Encumbrances,  individually or in the aggregate,  materially  interfere with the
benefits of the  security  intended to be provided by the Mortgage and this Loan
Agreement, materially and adversely affect the value of the Property, impair the
use or  operations  of the  Property  or impair  Borrower's  ability  to pay its
obligations in a timely manner.

      3.1.8 No Plan Assets. As of the date hereof and throughout the term of the
Loan (a) neither Fee Borrower nor Leasehold  Borrower is or will be an "employee
benefit  plan," as defined in Section  3(3) of the  Employee  Retirement  Income
Security Act of 1974, as amended ("ERISA"), whether or not subject to Title I of
ERISA,  or a "plan" as  defined  in  Section  4975 of the Code,  (b) none of the
assets of Fee  Borrower or Leasehold  Borrower  constitutes  or will  constitute
"plan assets" of one or more such plans within the meaning of U.S. Department of
Labor Regulation 29 C.F.R.  Section  2510.3-101 (the "Plan Assets  Regulation"),
and (c) transactions by or with Fee Borrower and/or  Leasehold  Borrower are not
and will not be  subject  to any state  statute  regulating  investments  of, or
fiduciary obligations with respect to, governmental plans, as defined in Section
3(32) of ERISA.

      3.1.9 Compliance.  Borrower and the Property and the use thereof comply in
all material respects with all applicable Legal Requirements, including, without
limitation,  building and zoning  ordinances and codes and  Prescribed  Laws. To
Borrower's  knowledge,  Borrower  is not in default or  violation  of any order,
writ, injunction,  decree or demand of any Governmental Authority, the violation
of  which  might  materially   adversely  affect  the  condition  (financial  or
otherwise) or business of Borrower. Borrower has not committed any act which may
give any  Governmental  Authority  the right to cause  Borrower  to forfeit  the
Property or any part  thereof or any monies paid in  performance  of  Borrower's
obligations under any of the Loan Documents.


                                      -24-
<PAGE>

      3.1.10  Financial  Information.  All financial  data,  including,  without
limitation,  the statements of cash flow and income and operating expense,  that
have been delivered to Lender in respect of the Property (i) are true,  complete
and correct in all material  respects,  (ii) accurately  represent the financial
condition  of the  Property  as of the date of such  reports,  and  (iii) to the
extent prepared or audited by an independent  certified public account have been
prepared in  accordance  with GAAP  throughout  the periods  covered,  except as
disclosed   therein.   Borrower  does  not  have  any  contingent   liabilities,
liabilities for taxes, unusual forward or long-term commitments or unrealized or
anticipated  losses from any unfavorable  commitments that are known to Borrower
and reasonably likely to have a materially adverse effect on the Property or the
operation  thereof,  except  as  referred  to or  reflected  in  said  financial
statements.  Since  the  date of the  financial  statements,  there  has been no
material  adverse change in the financial  condition,  operations or business of
Borrower or the Property from that set forth in said financial statements.

      3.1.11  Condemnation.   No  Condemnation  or  other  proceeding  has  been
commenced or, to Borrower's best knowledge,  is contemplated with respect to all
or any portion of the  Property  or for the  relocation  of  roadways  providing
access to the Property.

      3.1.12  Utilities and Public Access.  The Property has rights of access to
public  ways and is served  by  water,  sewer,  sanitary  sewer and storm  drain
facilities adequate to service the Property for its intended uses.

      3.1.13  Separate Lots.  Except for covenants and similar rights over other
land,  the Property is comprised  of one (1) or more  parcels  which  constitute
separate  tax lots and do not  constitute  a portion  of any other tax lot not a
part of the Property.

      3.1.14  Assessments.  There are no  pending or  proposed  special or other
assessments for public improvements or otherwise affecting the Property,  nor to
Borrower's  knowledge are there any  contemplated  improvements  to the Property
that may result in such special or other assessments.

      3.1.15 Enforceability.  The Loan Documents are not subject to any right of
rescission,  set-off, counterclaim or defense by Borrower, including the defense
of usury, nor would the operation of any of the terms of the Loan Documents,  or
the exercise of any right thereunder,  render the Loan Documents  unenforceable,
and Borrower has not asserted any right of rescission,  set-off, counterclaim or
defense with respect thereto.

      3.1.16  Assignment of Leases.  The  Assignment  of Leases  creates a valid
assignment of, or a valid security interest in, certain rights under the Leases,
subject only to a license granted to Borrower to exercise  certain rights and to
perform certain obligations of the lessor under the Leases,  including the right
to operate the  Property.  No Person  other than  Lender has any  interest in or
assignment of Borrower's  interest in the Leases or any portion of the Rents due
and payable or to become due and payable thereunder.

      3.1.17  Insurance.  Borrower  has  obtained  and has  delivered  to Lender
certificates  of insurance  describing  all of the  Policies,  with all premiums
prepaid  thereunder,  reflecting  the  insurance  coverages,  amounts  and other
requirements set forth in this Agreement.


                                      -25-
<PAGE>

No claims  have been made under any of the  Policies,  and no Person,  including
Borrower, has done, by act or omission, anything which would impair the coverage
of any of the Policies.

      3.1.18 Licenses. All permits and approvals,  including without limitation,
certificates of occupancy  required by any  Governmental  Authority for the use,
occupancy  and  operation of the Property in the manner in which the Property is
currently  being used,  occupied and operated have been obtained and are in full
force and effect.

      3.1.19 Flood Zone. None of the  Improvements on the Property is located in
an area identified by the Federal Emergency Management Agency as a special flood
hazard area.

      3.1.20 Physical Condition.  Except as disclosed in the Physical Conditions
Report,   the  Property,   including,   without   limitation,   all   buildings,
improvements,  parking  facilities,  sidewalks,  storm drainage systems,  roofs,
plumbing systems,  HVAC systems,  fire protection  systems,  electrical systems,
equipment,  elevators,  exterior  sidings  and  doors,  landscaping,  irrigation
systems and all structural components,  are in good condition,  order and repair
in all material respects; except as disclosed in the Physical Conditions Report,
there exists no structural or other material defects or damages in the Property,
whether  latent or  otherwise,  and Borrower  has not  received  notice from any
insurance  company or  bonding  company of any  defects or  inadequacies  in the
Property, or any part thereof,  which would adversely affect the insurability of
the same or cause the imposition of extraordinary premiums or charges thereon or
of any termination or threatened termination of any policy of insurance or bond.

      3.1.21 Boundaries.  Except as disclosed in the Physical Conditions Report,
all of the  improvements  which were included in determining the appraised value
of the Property lie wholly within the boundaries and building  restriction lines
of the Property,  and no improvements on adjoining  properties encroach upon the
Property, and no easements or other encumbrances affecting the Property encroach
upon any of the improvements,  so as to affect the value or marketability of the
Property except those which are insured against by title insurance.

      3.1.22 Leases.  Borrower represents and warrants to Lender with respect to
the  Leases  that:  (a) the rent roll  attached  hereto as  Schedule  I is true,
complete and correct in all material respects and the Property is not subject to
any  Leases  other  than the  Leases  described  in  Schedule  I, (b) the Leases
identified  on  Schedule  I are in full  force and  effect  and,  to  Borrower's
knowledge,  there are no defaults  thereunder by either party, (c) the copies of
the  Leases  delivered  to Lender are true and  complete,  and there are no oral
agreements with respect thereto,  (d) except as disclosed on Schedule V, no Rent
(including  security  deposits) has been paid more than one (1) month in advance
of its due date, (e) except as disclosed on Schedule V, all work to be performed
by  Borrower  under  each  Lease has been  performed  as  required  and has been
accepted by the  applicable  Tenant,  (f) except as disclosed on Schedule V, any
payments,  free rent,  partial rent, rebate of rent or other payments,  credits,
allowances  or  abatements  required  to be given by  Borrower to any Tenant has
already  been  received by such Tenant and (g) all  security  deposits are being
held in accordance with Legal Requirements.

      3.1.23  Filing and  Recording  Taxes.  All  transfer  taxes,  deed stamps,
intangible taxes or other amounts in the nature of transfer taxes required to be
paid under applicable Legal  Requirements in connection with the transfer of the
Property to Borrower have been paid or are


                                      -26-
<PAGE>

being paid simultaneously  herewith.  All mortgage,  mortgage recording,  stamp,
intangible  or other  similar  tax  required to be paid under  applicable  Legal
Requirements in connection with the execution,  delivery,  recordation,  filing,
registration, perfection or enforcement of any of the Loan Documents, including,
without   limitation,   the   Mortgage,   have  been  paid  or  are  being  paid
simultaneously herewith. All taxes and governmental assessments due and owing in
respect  of the  Property  have  been  paid,  or an escrow of funds in an amount
sufficient to cover such payments has been established  hereunder or are insured
against  by the title  insurance  policy to be  issued  in  connection  with the
Mortgage.

      3.1.24 Single  Purpose.  Borrower  hereby  represents and warrants to, and
covenants  with,  Lender  that as of the date  hereof and until such time as the
Debt shall be paid in full:

      (a) Fee  Borrower and  Leasehold  Borrower do not own and will not own any
asset or property other than (i) their respective interests in the Property, and
(ii) incidental  personal  property  necessary for the ownership or operation of
the Property.

      (b)  Borrower  will not engage in any business  other than the  ownership,
management  and  operation of the Property and Borrower will conduct and operate
its business as presently conducted and operated.

      (c)  Borrower  will not enter  into any  contract  or  agreement  with any
Affiliate of Borrower, any constituent party of Borrower or any Affiliate of any
constituent party,  except upon terms and conditions that are intrinsically fair
and  substantially  similar to those that would be available  on an  arms-length
basis with third parties other than any such party.

      (d) Borrower has not  incurred and will not incur any  Indebtedness  other
than (i) the Debt,  (ii)  unsecured  trade  payables  and  operational  debt not
evidenced  by a  note  and  (iii)  Indebtedness  incurred  in the  financing  of
equipment and other  personal  property used on the Property;  provided that any
Indebtedness  incurred pursuant to subclauses (ii) and (iii) shall be (x) not in
excess of Four Million and No/100 Dollars ($4,000,000.00) in the aggregate,  (y)
paid not more than sixty (60) days from the date  incurred  as to the matters in
subclause  (ii)  above and not more than sixty (60) days from the date due as to
the matters in subclause  (iii) above and (z) incurred in the ordinary course of
business.  No  Indebtedness  other than the Debt may be secured  (subordinate or
pari passu) by the Property.

      (e)  Borrower  has not made and will not make any loans or advances to any
third party  (including  any  Affiliate  or  constituent  party),  and shall not
acquire obligations or securities of its Affiliates.

      (f) Fee Borrower and  Leasehold  Borrower are and will remain  solvent and
Fee  Borrower  and  Leasehold  Borrower  will pay  their  respective  debts  and
liabilities (including,  as applicable,  shared personnel and overhead expenses)
from its assets as the same shall become due.

      (g)  Borrower  has  done or  caused  to be  done  and  will do all  things
necessary to observe organizational  formalities and preserve its existence, and
Borrower  will not, nor will  Borrower  permit any  constituent  party to amend,
modify or otherwise change the partnership


                                      -27-
<PAGE>

certificate,  partnership  agreement,  articles  of  incorporation  and  bylaws,
operating agreement, trust or other organizational documents of Borrower or such
constituent  party  without  the prior  consent of Lender in any manner that (i)
violates the single purpose  covenants set forth in this Section 3.1.24, or (ii)
amends,  modifies or otherwise  changes any provision  thereof that by its terms
cannot  be  modified  at any time when the Loan is  outstanding  or by its terms
cannot be modified without Lender's consent.

      (h) Borrower will maintain all of its books, records, financial statements
and bank accounts  separate  from those of its  Affiliates  and any  constituent
party. Borrower's assets will not be listed as assets on the financial statement
of any other Person,  provided,  however, that Borrower's assets may be included
in a  consolidated  financial  statement  of its  Affiliates  provided  that (i)
appropriate notation shall be made on such consolidated  financial statements to
indicate the  separateness  of Borrower and such Affiliates and to indicate that
Borrower's  assets and credit are not  available  to satisfy the debts and other
obligations of such Affiliates or any other Person and (ii) such assets shall be
listed on Borrower's own separate balance sheet.  Borrower will file its own tax
returns (to the extent  Borrower is required to file any such tax  returns)  and
will not file a  consolidated  federal  income tax return with any other Person.
Borrower  shall  maintain its books,  records,  resolutions  and  agreements  as
official records.

      (i) Borrower  will be, and at all times will hold itself out to the public
as, a legal entity  separate and distinct from any other entity  (including  any
Affiliate of Borrower or any constituent  party of Borrower),  shall correct any
known misunderstanding  regarding its status as a separate entity, shall conduct
business in its own name,  shall not identify itself or any of its Affiliates as
a  division  or part of the  other  and  shall  maintain  and  utilize  separate
stationery, invoices and checks bearing its own name.

      (j) Borrower will  maintain  adequate  capital for the normal  obligations
reasonably  foreseeable  in a business of its size and character and in light of
its contemplated business operations.

      (k) Neither  Borrower  nor any  constituent  party will seek or effect the
liquidation,  dissolution, winding up, liquidation,  consolidation or merger, in
whole or in part, of Borrower.

      (l)  Borrower  will not  commingle  the funds and other assets of Borrower
with those of any Affiliate or constituent  party or any other Person,  and will
hold all of its assets in its own name.

      (m)  Borrower  has and will  maintain  its assets in such a manner that it
will not be  costly  or  difficult  to  segregate,  ascertain  or  identify  its
individual  assets from those of any Affiliate or constituent party or any other
Person.

      (n) Borrower will not  guarantee or become  obligated for the debts of any
other Person and does not and will not hold itself out to be responsible  for or
make its assets  available  to  satisfy  the debts or  obligations  of any other
Person.

      (o) (i) If either  of Fee  Borrower  or  Leasehold  Borrower  is a limited
partnership or a limited  liability  company (other than a single member limited
liability company), each


                                      -28-
<PAGE>

general partner or managing member (each, an "SPC Party") shall be a corporation
whose sole asset is its  interest in Fee  Borrower  or  Leasehold  Borrower,  as
applicable, and each such SPC Party will at all times comply, and will cause Fee
Borrower or  Leasehold  Borrower,  as  applicable,  to comply,  with each of the
representations,  warranties,  and covenants contained in this Section 3.1.24 as
if such  representation,  warranty  or  covenant  was made  directly by such SPC
Party.  Upon the  withdrawal  or the  disassociation  of an SPC  Party  from Fee
Borrower or  Leasehold  Borrower,  as  applicable,  Fee  Borrower  or  Leasehold
Borrower,  as  applicable,  shall  immediately  appoint  a new SPC  Party  whose
articles of incorporation are  substantially  similar to those of such SPC Party
and  deliver a new  non-consolidation  opinion  to the  Rating  Agency or Rating
Agencies,  as  applicable,  with  respect  to the new SPC Party  and its  equity
owners.

      (ii) If either of Fee  Borrower or Leasehold  Borrower is a single  member
limited liability company,  Fee Borrower or Leasehold  Borrower,  as applicable,
shall have at least two springing members, one of which, upon the dissolution of
such sole member or the withdrawal or the disassociation of the sole member from
Fee Borrower or Leasehold Borrower, as applicable,  shall immediately become the
sole member of Fee Borrower or Leasehold Borrower, as applicable,  and the other
of which shall become the sole member of Fee Borrower or Leasehold Borrower,  as
applicable,  if the first such springing  member no longer is available to serve
as such sole member.

      (p) Fee Borrower and Leasehold  Borrower shall at all times cause there to
be at least two duly appointed members of the board of directors (or two special
managers if Fee Borrower or Leasehold  Borrower is a limited liability  company)
who are provided by a  nationally-recognized  company that provides professional
independent  directors (each, an "Independent  Director") of each SPC Party, Fee
Borrower and Leasehold Borrower reasonably  satisfactory to Lender who shall not
have  been at the time of such  individual's  appointment  or at any time  while
serving as a director or manager of such SPC Party,  Fee Borrower and  Leasehold
Borrower,  and may not have been at any time during the preceding five years (i)
a  stockholder,  director  (other  than as an  Independent  Director),  officer,
employee,  partner,  attorney  or  counsel  of such  SPC  Party,  Fee  Borrower,
Leasehold Borrower or any Affiliate of either of them, (ii) a customer, supplier
or other Person who derives any of its purchases or revenues from its activities
with such SPC Party, Fee Borrower, Leasehold Borrower or any Affiliate of either
of them, (iii) a Person or other entity controlling or under common control with
any such  stockholder,  partner,  customer,  supplier or other Person, or (iv) a
member of the  immediate  family  of any such  stockholder,  director,  officer,
employee,  partner,  customer,  supplier or other Person.  A natural  person who
otherwise satisfies the foregoing  definition of Independent Director except for
being the independent director,  manager or special member of a "special purpose
entity" affiliated with the Fee Borrower or Leasehold Borrower that does not own
a direct or  indirect  equity  interest  in either  Fee  Borrower  or  Leasehold
Borrower shall not be  disqualified  from serving as an Independent  Director if
such  individual  is at the time of  initial  appointment,  or at any time while
serving  as an  Independent  Director,  an  Independent  Director  of a "special
purpose entity" affiliated with either Fee Borrower or Leasehold Borrower (other
than any entity  that owns a direct or  indirect  equity  interest in either Fee
Borrower or Leasehold  Borrower) if such  individual is an independent  manager,
director or special  member  provided by a  nationally-recognized  company  that
provides  professional  independent  managers,  directors or special members. As
used in this  definition,  the term "control" means the possession,  directly or


                                      -29-
<PAGE>

indirectly,  of the power to direct or cause the  direction  of the  management,
policies  or  activities  of a  Person,  whether  through  ownership  of  voting
securities, by contract or otherwise.

      (q)  Borrower  shall not cause or permit the board of directors of any SPC
Party,  Fee Borrower or Leasehold  Borrower to take any action which,  under the
terms of any certificate of incorporation, by-laws or any voting trust agreement
with  respect to any common  stock or under any  organizational  document of Fee
Borrower,  Leasehold  Borrower  or SPC  Party,  requires  a vote of the board of
directors or managers of each SPC Party,  Fee Borrower  and  Leasehold  Borrower
unless at the time of such action  there shall be at least two board  members or
managers who are each an Independent Director.

      (r) Borrower shall conduct its business so that the assumptions  made with
respect to Borrower in the  Insolvency  Opinion shall be true and correct in all
respects. In connection with the foregoing, Borrower hereby covenants and agrees
that it will comply with or cause the compliance  with, (i) all of the facts and
assumptions  (whether  regarding  the Borrower or any other Person) set forth in
the Insolvency Opinion,  (ii) all the representations,  warranties and covenants
in this  Section  3.1.24,  and (iii)  all the  organizational  documents  of the
Borrower and any SPC Party.

      (s) Borrower will not permit any Affiliate or constituent  party access to
its bank accounts except as required for the conduct of Borrower's business.

      (t) Borrower shall pay the salaries of its own employees (if any) from its
own funds and maintain a sufficient number of employees (if any) in light of its
contemplated business operations.

      (u) Borrower shall  compensate each of its consultants and agents from its
funds for services provided to it and pay from its own assets all obligations of
any kind incurred.

      3.1.25 Tax  Filings.  To the extent  required,  Borrower has filed (or has
obtained  effective  extensions  for  filing) all  federal,  state and local tax
returns  required to be filed and have paid or made  adequate  provision for the
payment of all federal,  state and local taxes,  charges and assessments payable
by Borrower.  Borrower  believes that its tax returns (if any) properly  reflect
the income and taxes of Borrower for the periods covered  thereby,  subject only
to  reasonable  adjustments  required by the Internal  Revenue  Service or other
applicable tax authority upon audit.

      3.1.26  Solvency.  Giving effect to the Loan,  the fair saleable  value of
each of Fee  Borrower's  and  Leasehold  Borrower's  assets  exceeds  and  will,
immediately  following  the making of the Loan,  exceed their  respective  total
liabilities, including, without limitation, subordinated, unliquidated, disputed
and  contingent  liabilities.  The  fair  saleable  value of Fee  Borrower's  or
Leasehold Borrower's,  as applicable,  assets is and will, immediately following
the making of the Loan, be greater than their respective  probable  liabilities,
including the maximum amount of its contingent  liabilities on its debts as such
debts become absolute and matured.

      3.1.27 Federal  Reserve  Regulations.  No part of the proceeds of the Loan
will be used for the purpose of  purchasing  or  acquiring  any  "margin  stock"
within the  meaning of  Regulation  U of the Board of  Governors  of the Federal
Reserve  System or for any other purpose


                                      -30-
<PAGE>

which would be inconsistent  with such Regulation U or any other  Regulations of
such Board of Governors, or for any purposes prohibited by Legal Requirements or
by the terms and conditions of this Agreement or the other Loan Documents.

      3.1.28 Organizational Chart. The organizational chart attached as Schedule
III hereto,  relating to Borrower and certain  Affiliates and other parties,  is
true, complete and correct on and as of the date hereof.

      3.1.29 Bank Holding Company.  Neither Fee Borrower nor Leasehold  Borrower
is a "bank  holding  company"  or a direct  or  indirect  subsidiary  of a "bank
holding company" as defined in the Bank Holding Company Act of 1956, as amended,
and  Regulation  Y thereunder  of the Board of Governors of the Federal  Reserve
System.

      3.1.30 No Other Debt. Borrower has not borrowed or received debt financing
(other than permitted  pursuant to this  Agreement) that has not been heretofore
repaid in full.

      3.1.31 Investment Company Act. Neither Fee Borrower nor Leasehold Borrower
is (1) an  "investment  company"  or a company  "controlled"  by an  "investment
company," within the meaning of the Investment  Company Act of 1940, as amended;
(2) a "holding  company" or a "subsidiary  company" of a "holding company" or an
"affiliate" of either a "holding  company" or a "subsidiary  company" within the
meaning of the Public Utility  Holding  Company Act of 1935, as amended;  or (3)
subject  to any other  federal  or state law or  regulation  which  purports  to
restrict or regulate its ability to borrow money.

      3.1.32  Access/Utilities.  Except  as  shown  on the  Survey,  all  public
utilities  necessary  to the  continued  use and  enjoyment  of the  Property as
presently used and enjoyed are located in the public  right-of-way  abutting the
Property.  All roads necessary for the full  utilization of the Property for its
current  purpose have been completed and dedicated to public use and accepted by
all  governmental  authorities  or are the subject of access  easements  for the
benefit of the Property.

      3.1.33 No Bankruptcy  Filing.  Neither Fee Borrower nor Leasehold Borrower
is  contemplating  either  the  filing  of a  petition  by it under any state or
federal  bankruptcy  or  insolvency  laws or the  liquidation  of its  assets or
property,  and neither Fee Borrower nor Leasehold Borrower have any knowledge of
any Person contemplating the filing of any such petition against it.

      3.1.34 Full and Accurate Disclosure.  To the best of Borrower's knowledge,
no information  contained in this Agreement,  the other Loan  Documents,  or any
written statement furnished by or on behalf of Borrower pursuant to the terms of
this  Agreement  contains any untrue  statement  of a material  fact or omits to
state a material  fact  necessary  to make the  statements  contained  herein or
therein not misleading in light of the circumstances under which they were made.
There is no fact or circumstance  presently known to Borrower which has not been
disclosed to Lender and which  materially  adversely  affects,  or is reasonably
likely to materially  adversely affect, the Property,  Borrower or its business,
operations or condition (financial or otherwise).


                                      -31-
<PAGE>

      3.1.35 Foreign  Person.  Neither Fee Borrower nor Leasehold  Borrower is a
"foreign person" within the meaning of Section 1445(f)(3) of the Code.

      3.1.36  Fraudulent  Transfer Borrower (a) has not entered into the Loan or
any Loan  Document  with the actual  intent to  hinder,  delay,  or defraud  any
creditor and (b) has received  reasonably  equivalent  value in exchange for its
obligations  under  the Loan  Documents.  The  assets  of  Borrower  do not and,
immediately following the execution and delivery of the Loan Documents will not,
constitute  unreasonably small capital to carry out its business as conducted or
as proposed to be  conducted.  Borrower does not intend to, and does not believe
that it will, incur debts and liabilities  (including contingent liabilities and
other  commitments)  beyond its ability to pay such debts as they mature (taking
into account the timing and amounts  reasonably  expected to be payable on or in
respect of its obligations).

      3.1.37  No Change in Facts or  Circumstances;  Disclosure.  To the best of
Borrower's  knowledge,  there  has  been  no  material  adverse  change  in  any
condition, fact, circumstance or event that would make the financial statements,
rent rolls,  reports,  certificates or other  documents  submitted in connection
with the Loan  inaccurate,  incomplete  or otherwise  misleading in any material
respect  or  that  otherwise  materially  and  adversely  affects  the  business
operations  or the  financial  condition  of either Fee  Borrower  or  Leasehold
Borrower or the Property.

      3.1.38 Management  Agreement.  All of the  representations  and warranties
with  respect  to the  Management  Agreement  set forth in  Article  VII of this
Agreement are true and correct in all respects.

      3.1.39 Perfection of Accounts.  Borrower hereby represents and warrants to
Lender that:

      (a) This Agreement, together with the other Loan Documents, create a valid
and continuing  security interest (as defined in the Uniform Commercial Code) in
the Accounts (as defined in the Cash  Management  Agreement) in favor of Lender,
which  security  interest  is prior to all other  Liens,  other  than  Permitted
Encumbrances,  and is  enforceable  as such against  creditors of and purchasers
from Borrower.  Other than in connection  with the Loan Documents and except for
Permitted  Encumbrances,  Borrower  has  not  sold  or  otherwise  conveyed  the
Accounts;

      (b) The Accounts  constitute  "deposit accounts" or "securities  accounts"
within the  meaning of the  Uniform  Commercial  Code,  as set forth in the Cash
Management Agreement;

      (c) Pursuant and subject to the terms  hereof,  Agent has agreed to comply
with all instructions originated by Lender, without further consent by Borrower,
directing  disposition of the Accounts and all sums at any time held,  deposited
or invested therein,  together with any interest or other earnings thereon,  and
all  proceeds  thereof  (including  proceeds  of sales and other  dispositions),
whether  accounts,   general  intangibles,   chattel  paper,  deposit  accounts,
instruments, documents or securities; and


                                      -32-
<PAGE>

      (d) The Accounts are not in the name of any Person other than Borrower, as
pledgor, or Lender, as pledgee.  Borrower has not consented to Agent's complying
with  instructions  with  respect to the  Accounts  from any  Person  other than
Lender.

      3.1.40 Ground Lease. Borrower hereby represents and warrants to Lender the
following with respect to the Ground Lease:

      (a) Recording;  Modification. The Ground Lease has been duly recorded. The
Ground Lease permits the interests of Fee Borrower and Leasehold  Borrower to be
encumbered by a mortgage. There have not been amendments or modifications to the
terms of the Ground Lease since its  recordation,  with the exception of written
instruments  which have been  recorded.  The Ground  Lease may not be  canceled,
terminated, surrendered or amended without the prior written consent of Lender.

      (b) No Liens. Except for the Permitted Encumbrances,  Leasehold Borrower's
interest  in the  Ground  Lease is not  subject  to any  Liens  or  encumbrances
superior to, or of equal  priority  with,  the related  Mortgage  other than the
ground lessor's related fee interest.

      (c) Ground Lease Assignable.  Leasehold  Borrower's interest in the Ground
Lease is  assignable  to Lender  upon notice to, but without the consent of, the
ground lessor (or, if any such consent is required,  it has been obtained  prior
to the Closing  Date).  The Ground Lease is further  assignable  by Lender,  its
successors and assigns without the consent of the ground lessor.

      (d) Default.  As of the date hereof, the Ground Lease is in full force and
effect  and no  default  has  occurred  under the  Ground  Lease and there is no
existing  condition  which, but for the passage of time or the giving of notice,
could result in a default under the terms of the Ground Lease.

      (e) Notice.  The Ground Lease requires the ground lessor to give notice of
any default by  Leasehold  Borrower  to Lender.  The Ground  Lease,  or estoppel
letters received by Lender from the ground lessor,  further provides that notice
of  termination  given under the Ground Lease is not  effective  against  Lender
unless a copy of the notice has been delivered to Lender in the manner described
in the Ground Lease.

      (f) Cure. Lender is permitted the opportunity (including, where necessary,
sufficient time to gain  possession of the interest of Leasehold  Borrower under
the Ground Lease) to cure any default  under the Ground Lease,  which is curable
after the receipt of notice of the default  before the ground lessor  thereunder
may terminate the Ground Lease.

      (g) New Lease. The Ground Lease requires the ground lessor to enter into a
new lease with  Lender  upon  termination  of the Ground  Lease for any  reason,
including rejection of the Ground Lease in a bankruptcy proceeding.

      (h)  Insurance  Proceeds.  Under  the  terms of the  Ground  Lease and the
Mortgage,  taken together,  any related insurance and condemnation proceeds will
be applied  either to the repair or  restoration of all or part of the Property,
with Lender, subject to the terms of this Agreement and the Mortgage, having the
right to hold and disburse the proceeds as the


                                      -33-
<PAGE>

repair or restoration progresses, or to the payment of the outstanding principal
balance of the Loan together with any accrued interest thereon.

      (i)  Subleasing.  The Ground  Lease does not  impose any  restrictions  on
subleasing.

      3.1.41 Intentionally Omitted.

      3.1.42 Fee Borrower Entity. Fee Borrower hereby represents with respect to
Fee Borrower that from the date of Fee Borrower's  formation on April 9, 1997 to
the date of this Agreement:

      (a) is and  always has been duly  formed,  validly  existing,  and in good
standing in the state of its incorporation and in all other  jurisdictions where
it is qualified to do business;

      (b) has no  judgments  or liens of any  nature  against  it except for tax
liens not yet due;

      (c) is in compliance with all laws, regulations,  and orders applicable to
it and has received all permits necessary for it to operate;

      (d) is not involved in any dispute with any taxing authority;

      (e) has paid all taxes which it owes;

      (f) has never owned any real  property  other than the fee interest in the
Property and personal  property  necessary or incidental to its ownership of the
fee interest in the Property  and has never  engaged in any business  other than
the ownership of the fee interest in the Property;

      (g) is not now,  nor has ever  been,  party to any  lawsuit,  arbitration,
summons,  or  legal  proceeding  that is still  pending  or that  resulted  in a
judgment against it that has not been paid in full;

      (h) has provided Lender with complete  financial  statements  that,  among
other  things,  reflect  a fair  and  accurate  view of the  entity's  financial
condition;

      (i) has passed a Phase I environmental audit for the Property; and

      (j) has no material  contingent or actual  obligations  not related to the
Property.

      3.1.43 Fee Borrower Separateness.  Fee Borrower hereby represents from the
date of Fee Borrower's  formation on April 9, 1997 to the date of this Agreement
that it:

      (a) has not  entered  into  any  contract  or  agreement  with  any of its
Affiliates, constituents, or owners, or any guarantors of any of its obligations
or any Affiliate of any of the foregoing  (individually,  a "Related  Party" and
collectively, the "Related Parties"), except upon


                                      -34-
<PAGE>

terms and conditions that are commercially  reasonable and substantially similar
to those available in an arm's-length transaction with an unrelated party;

      (b) has paid all of its debts and liabilities from its assets;

      (c) has done or caused to be done all  things  necessary  to  observe  all
organizational formalities applicable to it and to preserve its existence;

      (d) has maintained  all of its books,  records,  financial  statements and
bank accounts separate from those of any other Person ;

      (e) has filed its own tax returns (except to the extent that it has been a
tax-disregarded  entity not required to file tax returns under  applicable  law)
and, if it is a  corporation,  has not filed a  consolidated  federal income tax
return with any other Person;

      (f) has been,  and at all times has held  itself  out to the  public as, a
legal  entity  separate  and  distinct  from any  other  Person  (including  any
Affiliate or other Related Party);

      (g) has  corrected  any known  misunderstanding  regarding its status as a
separate entity;

      (h) has  conducted  all of its  business and held all of its assets in its
own name;

      (i) has not  identified  itself or any of its  affiliates as a division or
part of the other;

      (j) has maintained and utilized separate  stationery,  invoices and checks
bearing its own name;

      (k) has not  commingled  its assets with those of any other Person and has
held all of its assets in its own name;

      (l) has not  guaranteed  or  become  obligated  for the debts of any other
Person;

      (m) has not  held  itself  out as  being  responsible  for  the  debts  or
obligations of any other Person;

      (n) has allocated  fairly and reasonably  any overhead  expenses that have
been shared with an  Affiliate,  including  paying for office space and services
performed by any employee of an Affiliate or Related Party;

      (o) has not  pledged  its  assets to secure the  obligations  of any other
Person  other than with  respect to loans  secured by the  Property  and no such
pledge remains outstanding except in connection with the Loan;

      (p) has maintained adequate capital in light of its contemplated  business
operations;


                                      -35-
<PAGE>

      (q) has  maintained  a  sufficient  number  of  employees  in light of its
contemplated  business operations and has paid the salaries of its own employees
from its own funds;

      (r) has not owned  any  subsidiary  or any  equity  interest  in any other
entity;

      (s) has not incurred any indebtedness that is still outstanding other than
indebtedness that is permitted under the Loan Documents; and

      (t) has not had any of its obligations guaranteed by an affiliate,  except
for  guarantees  that have been either  released or discharged  (or that will be
discharged  as a result  of the  closing  of the  Loan) or  guarantees  that are
expressly contemplated by the Loan Documents.

      Section  3.2  Survival  of   Representations.   The   representations  and
warranties set forth in Section 3.1 shall survive,  and any covenants  contained
in Section  3.1 shall  continue,  for so long as any amount  remains  payable to
Lender under this Agreement or any of the other Loan Documents.

      IV.   BORROWER COVENANTS

      Section 4.1 Borrower Affirmative Covenants.

      Borrower hereby covenants and agrees with Lender that:

      4.1.1 Existence; Compliance with Legal Requirements.  Borrower shall do or
cause to be done all things necessary to preserve,  renew and keep in full force
and effect its existence,  rights,  licenses,  permits and franchises and comply
with all Legal  Requirements  applicable  to it and the  Property  to the extent
failure  to do so would  have a  material  adverse  effect  on  Borrower  or the
Property, including, without limitation, Prescribed Laws.

      4.1.2  Taxes and  Other  Charges.  Borrower  shall pay all Taxes and Other
Charges now or hereafter  levied or assessed or imposed  against the Property or
any part thereof as the same become due and payable.  Borrower  shall furnish to
Lender  receipts for the payment of the Taxes and the Other Charges prior to the
date the same shall become  delinquent.  Borrower shall not permit or suffer and
shall promptly  discharge any lien or charge  against the Property.  After prior
notice to Lender, Borrower, at its own expense, may contest by appropriate legal
proceeding,  conducted  in good  faith  and with due  diligence,  the  amount or
validity of any Taxes or Other Charges, provided that (i) no Default or Event of
Default  has  occurred  and  remains  uncured;  (ii)  such  proceeding  shall be
permitted  under and be conducted in accordance  with all  applicable  statutes,
laws and ordinances; (iii) neither the Property nor any part thereof or interest
therein  will be in danger of being  sold,  forfeited,  terminated,  canceled or
lost;  (iv) Borrower  shall  promptly upon final  determination  thereof pay the
amount of any such Taxes or Other Charges, together with all costs, interest and
penalties  which may be payable in  connection  therewith;  (v) such  proceeding
shall suspend the collection of such  contested  Taxes or Other Charges from the
Property; and (vi) Borrower shall deposit with Lender cash, or other security as
may be approved by Lender, in an amount as may be reasonably  required by Lender
not to exceed one hundred twenty-five percent (125%) of the contested amount, to
insure the


                                      -36-
<PAGE>

payment of any such  Taxes or Other  Charges,  together  with all  interest  and
penalties  thereon.  Lender may pay over any such cash or other security held by
Lender to the  claimant  entitled  thereto at any time  when,  in the good faith
judgment of Lender, the entitlement of such claimant is established.

      4.1.3  Litigation.  Borrower  shall  give  prompt  notice to Lender of any
litigation or governmental  proceedings  pending or threatened  against Borrower
which might materially  adversely  affect the Property or Borrower's  ability to
perform its obligations hereunder or under the other Loan Documents.

      4.1.4 Access to Property.  Borrower shall permit  agents,  representatives
and  employees  of  Lender  to  inspect  the  Property  or any part  thereof  at
reasonable hours upon reasonable advance notice.

      4.1.5  Further  Assurances;  Supplemental  Mortgage  Affidavits.  Borrower
shall, at Borrower's sole cost and expense:

      (a)  execute  and   deliver  to  Lender   such   documents,   instruments,
certificates,  assignments and other writings,  and do such other acts necessary
to evidence,  preserve  and/or  protect the  collateral  at any time securing or
intended to secure the  obligations  of Borrower  under the Loan  Documents,  as
Lender may reasonably require; and

      (b) do and  execute  all and such  further  lawful  and  reasonable  acts,
conveyances and assurances for the better and more effective carrying out of the
intents and purposes of this Agreement and the other Loan  Documents,  as Lender
shall reasonably require from time to time.

      4.1.6 Financial Reporting.

      (a)  Borrower  shall  keep  and  maintain  or will  cause  to be kept  and
maintained  proper and accurate  books and  records,  in  accordance  with GAAP,
reflecting the financial  affairs of Borrower.  Lender shall have the right from
time to time during normal business hours upon reasonable  notice to Borrower to
examine  such  books and  records  at the  office of  Borrower  or other  Person
maintaining  such books and records and to make such copies or extracts  thereof
as Lender shall desire.

      (b)  Borrower  shall  furnish  Lender  annually,  within  ninety (90) days
following  the end of each Fiscal Year,  a complete  copy of  Borrower's  annual
financial   statements  audited  by  a  "Big  Four"  accounting  firm  or  other
independent certified public accountant reasonably acceptable to Lender prepared
in accordance  with GAAP covering the Property,  including  statements of income
and expense and cash flow for Borrower and the Property and a balance  sheet for
Borrower.  Such statements shall set forth gross revenues and operating expenses
for the Property. Borrower's annual financial statements shall be accompanied by
a certificate  executed by the chief financial  officer of Borrower stating that
such annual financial  statement presents fairly the financial condition and the
results of  operations of Borrower and the  Property.  Together with  Borrower's
annual  financial  statements,  Borrower  shall  furnish to Lender an  Officer's
Certificate  certifying as of the date thereof whether to the best of Borrower's
knowledge there exists an event or circumstance  which  constitutes a Default or
Event of Default


                                      -37-
<PAGE>

by Borrower  under the Loan  Documents  and if such  Default or Event of Default
exists,  the nature  thereof,  the period of time it has  existed and the action
then being taken to remedy the same.

      (c) Borrower will furnish Lender on or before the  forty-fifth  (45th) day
after the end of each fiscal  quarter  (based on Borrower's  Fiscal  Year),  the
following items,  accompanied by certificate from the chief financial officer of
Borrower,  certifying that such items are true,  correct,  accurate and complete
and fairly  present the  financial  condition  and results of the  operations of
Borrower and the Property in accordance with GAAP as applicable:

            (i) quarterly and year-to-date  statements of income and expense and
      cash flow prepared for such quarter with respect to the  Property,  with a
      balance sheet for such quarter for Borrower;

            (ii) a calculation  reflecting the Debt Service Coverage Ratio as of
      the last day of such quarter, for such quarter and the last four quarters;

            (iii) a current rent roll for the Property;

            (iv) a comparison of the budgeted income and expenses and the actual
      income and expenses  for such  quarter and year to date for the  Property,
      together  with a detailed  explanation  of any variances of more than five
      percent (5%) between  budgeted and actual amounts for such period and year
      to date;

            (v) a summary report  containing  each of the following with respect
      to the  Property  for the  most  recently  completed  calendar  year:  (A)
      aggregate  sales  by  tenants  under  Leases  or  other  occupants  of the
      Property,  both on an actual (or to the  extent  such  information  is not
      provided by tenants,  Manager's  or  Borrower's  best  estimate)  and on a
      comparable  store  basis,  (B) rent per square foot payable by each tenant
      and (C)  aggregate  occupancy  of the Property by anchor space and in-line
      store space as of December 31; and

            (vi) any notice  received from a Tenant  threatening  non-payment of
      Rent or other default,  alleging or  acknowledging  a default by landlord,
      requesting  a  termination  of a Lease or a material  modification  of any
      Lease or notifying  Borrower of the exercise or non-exercise of any option
      provided  for in  such  Tenant's  Lease,  or any  other  similar  material
      correspondence  received  by  Borrower  from  Tenants  during the  subject
      quarter.

      (d) Prior to the last  Securitization  of any portion of the Loan and upon
request by Lender,  Borrower will furnish  Lender on or before the  thirty-fifth
(35th)  day  after  the  end  of  each  calendar  month,  the  following  items,
accompanied  by a  certificate  from the chief  financial  officer of  Borrower,
certifying that such items are true, correct,  accurate, and complete and fairly
present the financial  condition  and results of the  operations of Borrower and
the Property in a manner consistent with GAAP, as applicable:

            (i) monthly and  year-to-date  statements  of income and expense and
      cash flow prepared for such month with respect to the Property;


                                      -38-
<PAGE>

            (ii) a current rent roll for the Property; and

            (iii)  any  notice  received  from a  Tenant  under  a  Major  Lease
      threatening   non-payment   of  Rent  or  other   default,   alleging   or
      acknowledging  a default by landlord,  requesting a termination of a Major
      Lease or a material  modification of any Major Lease or notifying Borrower
      of the  exercise  or  non-exercise  of any  option  provided  for in  such
      Tenant's  Major  Lease,  or  any  other  similar  material  correspondence
      received  by  Borrower  from any  Tenant  under a Major  Lease  during the
      subject month.

      (e) Borrower shall submit the Annual Budget to Lender not later than sixty
(60) days prior to the commencement of each Fiscal Year.

      (f) Borrower shall furnish to Lender,  within five (5) Business Days after
request (or as soon  thereafter  as may be  reasonably  possible),  such further
detailed  information  with  respect to the  operation  of the  Property and the
financial  affairs  of  Borrower  as  may be  reasonably  requested  by  Lender,
including,  without limitation, a comparison of the budgeted income and expenses
and the  actual  income  and  expenses  for a  quarter  and year to date for the
Property, together with a detailed explanation of any variances of more than the
greater of five percent (5%) or $100,000.00  between budgeted and actual amounts
for such period and year to date.

      4.1.7 Title to the Property. Borrower will warrant and defend the validity
and priority of the Liens of the Mortgage  and the  Assignment  of Leases on the
Property against the claims of all Persons whomsoever, subject only to Permitted
Encumbrances.

      4.1.8 Estoppel Statement.

      (a) After  request by Lender,  Fee Borrower and Leasehold  Borrower  shall
within five (5) Business Days furnish Lender with a statement, duly acknowledged
and certified,  stating (i) the unpaid  principal  amount of the Note,  (ii) the
Interest  Rate of the  Note,  (iii) the date  installments  of  interest  and/or
principal  were last paid,  (iv) any  offsets or  defenses to the payment of the
Debt, if any, and (v) that this  Agreement and the other Loan Documents have not
been modified or if modified, giving particulars of such modification.

      (b) After request by Borrower,  Lender shall within ten (10) Business Days
furnish Borrower with a statement, duly acknowledged and certified,  stating (i)
the unpaid  principal  amount of the Note,  (ii) the Interest  Rate of the Note,
(iii) the date installments of interest and/or principal were last paid and (iv)
whether or not Lender  has sent any notice of default  under the Loan  Documents
which remains uncured in the opinion of Lender.

      (c)  Borrower  shall  deliver  to  Lender,   upon  request,   an  estoppel
certificate  from each Tenant under any Lease (provided that Borrower shall only
be  required  to use  commercially  reasonable  efforts  to obtain  an  estoppel
certificate from any Tenant);  provided that such certificate may be in the form
required under such Lease;  provided further that Borrower shall not be required
to deliver such certificates more frequently than once in any calendar year.


                                      -39-
<PAGE>

      4.1.9 Leases.

      (a) All Leases and all renewals of Leases  executed  after the date hereof
shall (i) provide for rental rates comparable to existing local market rates for
similar properties, (ii) be on commercially reasonable terms, (iii) provide that
such Lease is  subordinate  to the  Mortgage  and that the lessee will attorn to
Lender and any  purchaser at a  foreclosure  sale and (iv) not contain any terms
which  would  materially   adversely  affect  Lender's  rights  under  the  Loan
Documents.  All Major Leases and all  renewals,  amendments,  modifications  and
terminations thereof executed after the date hereof shall be subject to Lender's
prior approval,  which approval shall not be unreasonably withheld,  conditioned
or delayed. Lender shall execute and deliver a Subordination Non-Disturbance and
Attornment  Agreement in the form annexed as Schedule IV to Tenants under future
Major Lease  approved by Lender  promptly  upon request  with such  commercially
reasonable changes as may be requested by Tenants,  from time to time, and which
are reasonably acceptable to Lender.

      (b) Borrower (i) shall  observe and perform the  obligations  imposed upon
the lessor  under the Leases in a  commercially  reasonable  manner;  (ii) shall
enforce the terms,  covenants  and  conditions  contained in the Leases upon the
part of the lessee  thereunder  to be observed or  performed  in a  commercially
reasonable manner, provided,  however,  Borrower shall not terminate or accept a
surrender of a Major Lease  without  Lender's  prior  approval;  (iii) shall not
collect any of the Rents more than one (1) month in advance (other than security
deposits);  (iv) shall not execute any  assignment  of lessor's  interest in the
Leases or the Rents  (except as  contemplated  by the Loan  Documents);  and (v)
shall  hold all  security  deposits  under all Leases in  accordance  with Legal
Requirements.  Upon request,  Borrower shall furnish Lender with executed copies
of all Leases.

      (c)  Notwithstanding  anything to the  contrary  contained in this Section
4.1.9:

      (i)  whenever  Lender's  approval or consent is  required  pursuant to the
provisions of this Section 4.1.9, Borrower shall have the right to submit a term
sheet of such transaction to Lender for Lender's approval,  such approval not to
be unreasonably withheld,  conditioned or delayed. Any such term sheet submitted
to  Lender  shall  set  forth all  material  terms of the  proposed  transaction
including,  without limitation,  identity of tenant, square footage, term, rent,
rent  credits,  abatements,  work  allowances  and  tenant  improvements  to  be
constructed  by Borrower.  Lender shall use good faith efforts to respond within
ten (10) Business Days after Lender's receipt of Borrower's  written request for
approval  or  consent  of such term  sheet.  If Lender  fails to respond to such
request  within ten (10)  Business  Days,  and Borrower  sends a second  request
containing a legend in bold letters  stating  that  Lender's  failure to respond
within five (5) Business Days shall be deemed consent or approval,  Lender shall
be deemed to have  approved or  consented  to such term sheet if Lender fails to
respond to such second  written  request  before the expiration of such five (5)
Business Day period;

      (ii)  whenever  Lender's  approval or consent is required  pursuant to the
provisions of this Section  4.1.9 for any matter that Lender has not  previously
approved a term sheet pursuant to Section  4.1.9(c)(i)  above,  Lender shall use
good faith  efforts to respond  within  ten (10)  Business  Days after  Lender's
receipt of Borrower's  written  request for such approval or consent.  If Lender
fails to respond to such request  within ten (10)  Business  Days,  and Borrower


                                      -40-
<PAGE>

sends a second request containing a legend in bold letters stating that Lender's
failure to  respond  within ten (10)  Business  Days shall be deemed  consent or
approval, Lender shall be deemed to have approved or consented to the matter for
which Lender's consent or approval was sought if Lender fails to respond to such
second  written  request  before the  expiration  of such ten (10)  Business Day
period;

      (iii) whenever  Lender's  approval or consent is required  pursuant to the
provisions  of this  Section  4.1.9 for any matter  that  Lender has  previously
approved a term sheet pursuant to Section  4.1.9(c)(i)  above,  Lender shall use
good faith  efforts to respond  within  five (5)  Business  Days after  Lender's
receipt of Borrower's  written  request for such approval or consent.  If Lender
fails to respond to such  request  within five (5) Business  Days,  and Borrower
sends a second request containing a legend in bold letters stating that Lender's
failure to respond  within  five (5)  Business  Days shall be deemed  consent or
approval, Lender shall be deemed to have approved or consented to the matter for
which Lender's consent or approval was sought if Lender fails to respond to such
second  written  request  before the  expiration  of such five (5)  Business Day
period, provided that there have been no material deviations from the term sheet
and that the aggregate  economics of the  transaction  are no less  favorable to
Borrower than as set forth in the term sheet;

      (iv) in the event that Lender  shall have  approved  (or be deemed to have
approved) a term sheet  submitted by Borrower  with respect to a certain  Lease,
Lender  shall not withhold its approval or consent with respect to such Lease on
the basis of any  provisions of such Lease  dealing with the items  contained in
the approved term sheet; and

      (v)  Borrower  shall have the right,  without  the  consent or approval of
Lender in any instance,  to amend,  terminate or accept a surrender of any Lease
that is not a Major Lease.

      4.1.10   Alterations.   Lender's  prior  approval  shall  be  required  in
connection with any alterations to any Improvements  (except tenant improvements
under any Lease approved by Lender or under any Lease for which approval was not
required by Lender under this  Agreement)  (a) that may have a material  adverse
effect on  Borrower's  financial  condition,  the value of the  Property  or the
ongoing  revenues  and  expenses  of the  Property  or (b)  the  cost  of  which
(including any related  alteration,  improvement or  replacement)  is reasonably
anticipated to exceed the Alteration Threshold, which approval may be granted or
withheld in Lender's sole discretion  unless the Alteration is required by Legal
Requirements.  If Borrower  requests approval from Lender for any alterations to
any  Improvements  Lender shall use good faith efforts to respond  within thirty
(30) days after Lender's receipt of Borrower's written request for such approval
or consent together with all materials necessary for Lender to determine whether
or not to approve  such  alteration.  If Lender fails to respond to such request
within thirty (30) days, and Borrower sends a second request containing a legend
in bold  letters  stating  that  Lender's  failure  to  respond  within ten (10)
Business  Days shall be deemed  consent or  approval,  Lender shall be deemed to
have  approved or consented to the  alterations  for which  Lender's  consent or
approval  was sought if Lender fails to respond to such second  written  request
before the expiration of such ten (10) Business Day period.  If the total unpaid
amounts  incurred  and to be incurred  with respect to such  alterations  to the
Improvements shall at any time exceed the Alteration  Threshold,  Borrower shall
promptly  deliver to Lender as security  for the payment of such  amounts and as
additional security for Borrower's obligations under the Loan Documents


                                      -41-
<PAGE>

any of the following:  (i) cash, (ii) Letters of Credit (iii) U.S.  Obligations,
(iv) other  securities  acceptable  to Lender,  provided  that Lender shall have
received a Rating Agency  Confirmation as to the form and issuer of same, or (v)
a completion  bond,  provided  that Lender shall have  received a Rating  Agency
Confirmation  as to the form and issuer of same.  Such  security  shall be in an
amount  equal to the  excess  of the total  unpaid  amounts  incurred  and to be
incurred with respect to such alterations to the  Improvements  (other than such
amounts  to be  paid or  reimbursed  by  Tenants  under  the  Leases)  over  the
Alteration  Threshold  and may be  reduced  from time to time at the  request of
Borrower to the cost estimated by Borrower and reasonably  approved by Lender to
complete  the  alteration  for which  such  additional  security  was  required.
Notwithstanding the foregoing,  Lender's prior approval shall not be required in
connection with the demolition of the Firestone Building,  provided that (a) the
JC Penney  Lease shall  remain in full force and effect and be amended to delete
the Firestone Building from the premises demised thereunder,  (b) the demolition
shall be  completed  in  compliance  with all Legal  Requirements  and all other
Leases,  (c) the  demolition  shall be completed  in a manner not to  materially
adversely affect the balance of the Property,  (d) the  Underwritable  Cash Flow
for the  Property  after  taking into account the  demolition  of the  Firestone
Building  shall  not be less  than  $12,000,000.00  and (e)  Lender  shall  have
received an updated appraisal of the Property dated no more than sixty (60) days
prior  to  the  proposed  demolition  by  an  appraiser  acceptable  to  Lender,
indicating an appraised value of the Property after the demolition,  equal to or
greater than one hundred percent (100%) of the outstanding  principal balance of
the Loan.

      4.1.11 PILOT Payments.  Borrower shall pay all amounts required to be paid
by Fee Borrower  under the PILOT  Agreement as and when such amounts become due,
if any.

      4.1.12  Material  Agreements.  Borrower shall (a) promptly  perform and/or
observe all of the material  covenants and  agreements  required to be performed
and observed by it under each Material  Agreement to which it is a party, and do
all things  necessary to preserve and to keep unimpaired its rights  thereunder,
(b) promptly notify Lender in writing of the giving of any notice of any default
by any party under any Material  Agreement of which it is aware and (c) promptly
enforce the  performance  and  observance  of all of the material  covenants and
agreements  required to be  performed  and/or  observed by the other party under
each  Material  Agreement  to which it is a party in a  commercially  reasonable
manner.

      4.1.13 Performance by Borrower. Borrower shall in a timely manner observe,
perform and fulfill  each and every  covenant,  term and  provision of each Loan
Document  executed  and  delivered  by  Borrower,  and shall  not enter  into or
otherwise  suffer or permit any amendment,  waiver,  supplement,  termination or
other  modification  of any Loan  Document  executed  and  delivered by Borrower
without the prior consent of Lender.

      4.1.14 Costs of Enforcement/Remedying  Defaults. In the event (a) that the
Mortgage  is  foreclosed  in  whole  or in part or the  Note or any  other  Loan
Document is put into the hands of an attorney for  collection,  suit,  action or
foreclosure,  (b) of the  foreclosure  of  any  Lien  or  Mortgage  prior  to or
subsequent to the Mortgage in which  proceeding  Lender is made a party,  (c) of
the  bankruptcy,  insolvency,  rehabilitation  or other  similar  proceeding  in
respect of Borrower or Guarantor or an  assignment  by Borrower or Guarantor for
the benefit of its  creditors,  or (d) Lender  shall remedy or attempt to remedy
any Event of Default as permitted  hereunder,  Borrower shall be chargeable with
and agrees to pay all costs incurred by Lender as a


                                      -42-
<PAGE>

result thereof,  including costs of collection and defense (including reasonable
attorneys',  experts',  consultants' and witnesses' fees and  disbursements)  in
connection  therewith  and  in  connection  with  any  appellate  proceeding  or
post-judgment action involved therein, which shall be due and payable on demand,
together with  interest  thereon from the date incurred by Lender at the Default
Rate, and together with all required service or use taxes.

      4.1.15  Business and  Operations.  Borrower will continue to engage in the
businesses currently conducted by it as and to the extent the same are necessary
for the  ownership  and leasing of the  Property.  Borrower  will  qualify to do
business and will remain in good standing under the laws of each jurisdiction as
and to the extent the same are  required  for the  ownership  and leasing of the
related  Property.  Borrower  shall  at  all  times  cause  the  Property  to be
maintained as a regional shopping center.

      4.1.16 Loan Fees.

      Borrower shall pay all fees and costs (including,  without limitation, all
origination and commitment  fees) required of Borrower  pursuant to the terms of
that  certain  term sheet  between  Glimcher  Realty  Trust and  Morgan  Stanley
Mortgage Capital Inc. dated March 17, 2004.

      Section 4.2 Borrower Negative Covenants.

      Borrower covenants and agrees with Lender that:

      4.2.1 Due on Sale and  Encumbrance;  Transfers of  Interests.  Without the
prior written consent of Lender,  neither Borrower nor any other Person having a
direct or indirect  ownership  or  beneficial  interest in Borrower  shall sell,
convey,  mortgage,  grant,  bargain,  encumber,  pledge,  assign or transfer any
interest, direct or indirect, in the Borrower, the Property or any part thereof,
whether  voluntarily  or  involuntarily,  in  violation  of  the  covenants  and
conditions set forth in the Mortgage and this Agreement.

      4.2.2 Liens.  Borrower shall not create,  incur, assume or suffer to exist
any Lien on any portion of the Property  except for (a) Permitted  Encumbrances,
(b) Liens created by the Loan Documents,  (c) Liens of mechanics being contested
in  accordance  with Section  3.6(b) of the  Mortgage  and (d) Liens  created by
Tenants so long as Borrower is  enforcing  its rights to require such Tenants to
remove  any such  Liens  and  provided  that as to the Liens  described  in this
subclause  (d), (y) such Liens do not adversely  affect the value or priority of
the Lien of the  Mortgage  and (z) neither the  Property nor any part thereof or
interest therein is or will be in danger of being sold,  forfeited,  terminated,
canceled or lost.

      4.2.3  Dissolution.  Neither Fee Borrower nor Leasehold Borrower shall (i)
engage in any  dissolution,  liquidation or consolidation or merger with or into
any other business entity,  (ii) engage in any business  activity not related to
the ownership and operation of the Property,  (iii) transfer,  lease or sell, in
one transaction or any combination of transactions,  all or substantially all of
the property or assets of Borrower except to the extent  expressly  permitted by
the Loan  Documents,  or (iv)  cause,  permit  or  suffer  any SPC  Party to (A)
dissolve, wind up or liquidate or take any action, or omit to take an action, as
a result of which such SPC Party would be  dissolved,  wound up or liquidated in
whole or in part, or (B) amend, modify, waive or


                                      -43-
<PAGE>

terminate the certificate of  incorporation or bylaws of such SPC Party, in each
case without obtaining the prior consent of Lender.

      4.2.4  Change in  Business.  Borrower  shall  not  enter  into any line of
business other than the ownership and operation of the Property.

      4.2.5 Debt Cancellation. Borrower shall not cancel or otherwise forgive or
release  any claim or debt  (other  than  termination  of  Leases in  accordance
herewith) owed to Borrower by any Person, except for adequate  consideration and
in the ordinary course of Borrower's business.

      4.2.6 Affiliate Transactions. Borrower shall not enter into, or be a party
to, any  transaction  with an  Affiliate  of Borrower or any of the  partners of
Borrower  except in the ordinary course of business and on terms which are fully
disclosed  to Lender in advance  and are no less  favorable  to Borrower or such
Affiliate than would be obtained in a comparable  arm's-length  transaction with
an unrelated third party.

      4.2.7  Zoning.  Borrower  shall not  initiate  or  consent  to any  zoning
reclassification  of any portion of the Property or seek any variance  under any
existing  zoning  ordinance  or use or  permit  the  use of any  portion  of the
Property in any manner that could result in such use  becoming a  non-conforming
use under any zoning  ordinance or any other  applicable  land use law,  rule or
regulation, without the prior consent of Lender.

      4.2.8 Assets.  Borrower  shall not purchase or own any property other than
the Property and any property  necessary or incidental  for the operation of the
Property.

      4.2.9 No Joint Assessment.  Borrower shall not suffer,  permit or initiate
the  joint  assessment  of  the  Property  (i)  with  any  other  real  property
constituting a tax lot separate from the Property,  and (ii) with any portion of
the Property which may be deemed to constitute  personal property,  or any other
procedure  whereby  the lien of any  taxes  which  may be  levied  against  such
personal property shall be assessed or levied or charged to the Property.

      4.2.10  Principal  Place  of  Business.  Borrower  shall  not  change  its
principal place of business from the address set forth on the first page of this
Agreement without first giving Lender thirty (30) days prior notice.

      4.2.11 ERISA. (a) Neither Fee Borrower or Leasehold  Borrower shall engage
in any transaction  which would cause any  obligation,  or action taken or to be
taken, hereunder (or the exercise by Lender of any of its rights under the Note,
this  Agreement  or the  other  Loan  Documents)  to be a  non-exempt  (under  a
statutory or administrative class exemption) prohibited  transaction under ERISA
or Section 4975 of the Code.

      (b) Borrower shall deliver to Lender such certifications or other evidence
from time to time throughout the term of the Loan, as requested by Lender in its
sole  discretion,  that (A) neither Fee  Borrower nor  Leasehold  Borrower is an
"employee benefit plan" as defined in Section 3(3) of ERISA, which is subject to
Title I of ERISA,  or a "plan"  within the meaning of Section  4975 of the Code;
(B) neither Fee Borrower nor Leasehold  Borrower is subject to any state statute
regulating   investments   of,  or  fiduciary   obligations   with  respect  to,
governmental


                                      -44-
<PAGE>

plans as defined in Section 3(32) of ERISA; and (C) one or more of the following
circumstances is true for each of Fee Borrower and Leasehold Borrower:

      (i) Equity interests in Fee Borrower or Leasehold Borrower, as applicable,
are  publicly  offered  securities,  within  the  meaning  of  the  Plan  Assets
Regulation;

      (ii) Less than  twenty-five  percent  (25%) of each  outstanding  class of
equity interests in Fee Borrower or Leasehold Borrower,  as applicable,  is held
by "benefit plan investors" within the meaning of the Plan Assets Regulation; or

      (iii) Fee Borrower or Leasehold Borrower,  as applicable,  qualifies as an
"operating  company" or a "real estate operating  company" within the meaning of
the Plan Assets Regulation.

      4.2.12 Material  Agreements.  Borrower shall not,  without  Lender's prior
written consent:  (a) enter into,  surrender or terminate any Material Agreement
(unless the other party thereto is in material  default and the  termination  of
such agreement would be commercially reasonable), (b) increase or consent to the
increase of the amount of any charges  under any Material  Agreement,  except as
provided therein or on an arms'-length basis and commercially  reasonable terms;
or (c) otherwise modify, change, supplement, alter or amend, or waive or release
any of its rights and  remedies  under any  Material  Agreement  in any material
respect, except on an arms'-length basis and commercially reasonable terms.

      4.2.13 Intentionally Omitted.

      V.    INSURANCE, CASUALTY AND CONDEMNATION

      Section 5.1 Insurance.

      5.1.1 Insurance Policies. (a) Borrower shall obtain and maintain, or cause
to be maintained, insurance for Borrower and the Property providing at least the
following coverages:

      (i)  comprehensive all risk insurance on the Improvements and the personal
property at the  Property,  including  contingent  liability  from  Operation of
Building Laws, Demolition Costs and Increased Cost of Construction Endorsements,
in each case (A) in an amount equal to one hundred  percent  (100%) of the "Full
Replacement  Cost,"  which for  purposes  of this  Agreement  shall mean  actual
replacement value (exclusive of costs of excavations,  foundations,  underground
utilities and footings) with a waiver of  depreciation,  but the amount shall in
no event  be less  than the  outstanding  principal  balance  of the  Loan;  (B)
containing an agreed amount  endorsement  with respect to the  Improvements  and
personal  property at the  Property  waiving all  co-insurance  provisions;  (C)
providing for no deductible in excess of Twenty-Five Thousand and No/100 Dollars
($25,000.00)  for all such insurance  coverage (except in the case of windstorm,
earthquake and/or windstorm  coverage,  which shall provide for no deductible in
excess  of One  Hundred  Thousand  and  No/100  Dollars  ($100,000.00);  and (D)
containing an "Ordinance or Law Coverage" or "Enforcement" endorsement if any of
the Improvements or the use of the Property shall at any time constitute


                                      -45-
<PAGE>

legal non-conforming structures or uses. In addition, Borrower shall obtain: (y)
if any portion of the  Improvements  is  currently  or at any time in the future
located in a federally  designated  "special  flood hazard  area",  flood hazard
insurance  in an amount  equal to the  lesser of (1) the  outstanding  principal
balance of the Note or (2) the maximum amount of such insurance  available under
the National Flood  Insurance Act of 1968, the Flood Disaster  Protection Act of
1973 or the National Flood Insurance  Reform Act of 1994, as each may be amended
or such greater amount as Lender shall require;  and (z) earthquake insurance in
amounts  and in form and  substance  satisfactory  to  Lender  in the  event the
Property is located in an area with a high degree of seismic activity,  provided
that the  insurance  pursuant  to clauses  (y) and (z) hereof  shall be on terms
consistent with the  comprehensive all risk insurance policy required under this
subsection (i).

      (ii) commercial  general  liability  insurance against claims for personal
injury,  bodily injury, death or property damage occurring upon, in or about the
Property,  such  insurance (A) to be on the so-called  "occurrence"  form with a
combined  limit,  excluding  umbrella  coverage,  of not less  than Six  Hundred
Thousand and No/100 Dollars ($600,000.00);  (B) to continue at not less than the
aforesaid  limit  until  required  to be  changed by Lender by reason of changed
economic conditions making such protection inadequate; and (C) to cover at least
the following hazards:  (1) premises and operations;  (2) products and completed
operations  on an "if any"  basis;  (3)  independent  contractors;  (4)  blanket
contractual  liability for all legal  contracts;  and (5) contractual  liability
covering  the  indemnities  contained in Article 9 of the Mortgage to the extent
the same is available;

      (iii)  business  income  insurance  (A) with loss  payable to Lender;  (B)
covering  all risks  required  to be covered by the  insurance  provided  for in
subsection (i) above for a period commencing at the time of loss for such length
of time as it takes to repair or replace with the exercise of due  diligence and
dispatch;  (C)  containing  an extended  period of indemnity  endorsement  which
provides that after the physical loss to the Improvements and Personal  Property
has been  repaired,  the  continued  loss of income  will be insured  until such
income  either  returns  to the same  level it was at prior to the loss,  or the
expiration  of twelve (12) months from the date that the Property is repaired or
replaced and operations are resumed, whichever first occurs, and notwithstanding
that the policy may expire prior to the end of such period; and (D) in an amount
equal to one hundred  percent  (100%) of the projected  Gross  Revenues from the
Property  for a  period  from  the  date  of  loss  to a  date  (assuming  total
destruction)  which is twelve  (12)  months  from the date that the  Property is
repaired or replaced and  operations  are resumed.  The amount of such  business
income  insurance shall be determined prior to the date hereof and at least once
each  year  thereafter  based on  Borrower's  reasonable  estimate  of the Gross
Revenues  from the Property for the  succeeding  twelve (12) month  period.  All
proceeds  payable to Lender pursuant to this subsection  shall be held by Lender
and shall be applied to the obligations  secured by the Loan Documents from time
to time due and payable hereunder and under the Note;  provided,  however,  that
nothing herein  contained shall be deemed to relieve Borrower of its obligations
to pay the obligations  secured by the Loan Documents on the respective dates of
payment  provided  for in the Note and the other  Loan  Documents  except to the
extent  such  amounts are  actually  paid out of the  proceeds of such  business
income insurance;

      (iv)  at all  times  during  which  structural  construction,  repairs  or
alterations  are being made with  respect to the  Improvements,  and only if the
Property coverage form does not


                                      -46-
<PAGE>

otherwise  apply,  (A) owner's  contingent  or  protective  liability  insurance
covering  claims not  covered by or under the terms or  provisions  of the above
mentioned  commercial general liability  insurance policy; and (B) the insurance
provided  for in  subsection  (i) above  written in a so-called  builder's  risk
completed value form (1) on a non-reporting basis, (2) against all risks insured
against pursuant to subsection (i) above, (3) including permission to occupy the
Property,  and (4)  with  an  agreed  amount  endorsement  waiving  co-insurance
provisions;

      (v) workers' compensation, subject to the statutory limits of the state in
which the Property is located,  and employer's  liability insurance with a limit
of at least Five Hundred Thousand and No/100 Dollars  ($500,000.00) per accident
and per disease per  employee,  and Five  Hundred  Thousand  and No/100  Dollars
($500,000.00)  for disease  aggregate in respect of any work or operations on or
about the  Property,  or in  connection  with the Property or its  operation (if
applicable);

      (vi)  comprehensive  boiler and machinery  insurance,  if  applicable,  in
amounts as shall be reasonably  required by Lender on terms  consistent with the
commercial property insurance policy required under subsection (i) above;

      (vii) umbrella  liability  insurance in addition to primary coverage in an
amount  not less than Sixty  Million  and No/100  Dollars  ($60,000,000.00)  per
occurrence on terms consistent with the commercial  general liability  insurance
policy required under subsection (ii) above and (viii) below;

      (viii)  motor  vehicle  liability  coverage  for all owned  and  non-owned
vehicles,  including  rented and leased vehicles  containing  minimum limits per
occurrence,  including  umbrella  coverage,  of Five Hundred Thousand and No/100
Dollars ($500,000.00);

      (ix) so-called  "dramshop" insurance or other liability insurance required
in connection with the sale of alcoholic beverages, if applicable;

      (x) insurance  against employee  dishonesty in an amount not less than one
(1) month of gross  revenue from the Property and with a deductible  not greater
than Ten Thousand and No/100 Dollars ($10,000.00), if applicable;

      (xi) if "acts of  terrorism" or other similar acts or events are hereafter
excluded from Borrower's comprehensive all risk insurance policy, Borrower shall
obtain an  endorsement  to such policy,  or a separate  policy from an insurance
provider which maintains at least an Investment Grade Rating from Moody's, Fitch
and/or S&P (provided that none of Moody's, Fitch or S&P rates such provider less
than investment  grade),  insuring against all such excluded acts or events,  to
the extent such policy or  endorsement  is available,  in an amount equal to, at
Borrower's  option,  either (A) the total insurable value of the Property or (B)
the  then-current  outstanding  principal  balance  of the Loan at the time such
policy or endorsement is purchased, provided that if Borrower chooses the option
in  clause  (B) of  this  sentence,  Borrower  shall  also  obtain  a  "lender's
endorsement"  which requires the insurer under such endorsement to pay Lender an
amount not less than the then-current  outstanding principal balance of the Loan
and interest thereon in the event that after any Casualty covered by such policy
or endorsement the Property is not restored in the manner hereby required within
a period of time commencing at the


                                      -47-
<PAGE>

time of loss and  continuing  for such  length  of time as it takes to repair or
replace  with  the  exercise  of due  diligence  and  dispatch.  To  the  extent
available,  the endorsement or policy shall be in form and substance  reasonably
satisfactory to Lender.  Notwithstanding  anything to the contrary  contained in
this Section 5.1.1(a)(xi), Borrower shall not be required to pay annual premiums
in excess of the Required  Amount for the coverage  required  under this Section
5.1.1(a)(xi) for the Property,  it being agreed in such case that Borrower shall
not be  obligated  to comply with the  coverage  set forth  above  except to the
extent available at the Required Amount of the premium; and

      (xii) upon sixty (60) days' notice, such other reasonable insurance and in
such  reasonable  amounts  as Lender  from time to time may  reasonably  request
against such other  insurable  hazards  which at the time are  commonly  insured
against for property  similar to the Property located in or around the region in
which the Property is located.

      (b) All insurance provided for in Section 5.1.1(a) shall be obtained under
valid and enforceable policies (collectively, the "Policies" or in the singular,
the "Policy")  and, to the extent not specified  above,  shall be subject to the
approval of Lender as to  deductibles,  loss payees and insureds.  Not less than
ten  (10)  days  prior  to the  expiration  dates  of the  Policies  theretofore
furnished  to  Lender,   certificates  of  insurance   evidencing  the  Policies
accompanied by evidence  satisfactory  to Lender of payment of the premiums then
due thereunder  (the  "Insurance  Premiums"),  shall be delivered by Borrower to
Lender.

      (c) Any  blanket  insurance  Policy  shall  specifically  allocate  to the
Property the amount of coverage from time to time  required  hereunder and shall
otherwise  provide the same  protection as would a separate Policy insuring only
the Property in compliance with the provisions of Section 5.1.1(a).

      (d) All Policies of  insurance  provided  for or  contemplated  by Section
5.1.1(a)  shall be primary  coverage  and,  except for the Policy  referenced in
Section  5.1.1(a)(v),  shall name  Borrower  as the  insured  and Lender and its
successors  and/or  assigns as the  additional  insured,  as its  interests  may
appear,  and in the  case of  property  damage,  boiler  and  machinery,  flood,
earthquake and terrorism insurance,  shall contain a so-called New York standard
non-contributing  mortgagee  clause in favor of Lender  providing  that the loss
thereunder shall be payable to Lender.  Borrower shall not procure or permit any
of its constituent  entities to procure any other insurance coverage which would
be on the same level of payment as the Policies or would adversely impact in any
way the ability of Lender or Borrower to collect any  proceeds  under any of the
Policies.

      (e) All Policies of insurance provided for in Section 5.1.1(a), except for
the Policies  referenced  in Section  5.1.1(a)(v)  and  (a)(viii)  shall contain
clauses or endorsements to the effect that:

      (i) no act or negligence of Borrower, or anyone acting for Borrower, or of
any Tenant or other  occupant,  or failure to comply with the  provisions of any
Policy,  which might  otherwise  result in a forfeiture  of the insurance or any
part  thereof,  shall in any way affect the  validity or  enforceability  of the
insurance insofar as Lender is concerned;


                                      -48-
<PAGE>

      (ii) the Policy  shall not be canceled  without at least thirty (30) days'
written  notice to Lender and any other  party  named  therein as an  additional
insured and, if obtainable by Borrower using  commercially  reasonable  efforts,
shall not be materially  changed  (other than to increase the coverage  provided
thereby) without such a thirty (30) day notice; and

      (iii) Lender  shall not be liable for any  Insurance  Premiums  thereon or
subject to any assessments thereunder.

      (f) If at any time Lender is not in receipt of written  evidence  that all
insurance required hereunder is in full force and effect,  Lender shall have the
right, without notice to Borrower, to take such action as Lender deems necessary
to protect its interest in the  Property,  including,  without  limitation,  the
obtaining  of such  insurance  coverage as Lender in its sole  discretion  deems
appropriate  and all premiums  incurred by Lender in connection with such action
or in  obtaining  such  insurance  and  keeping  it in  effect  shall be paid by
Borrower to Lender  upon demand and until paid shall be secured by the  Mortgage
and shall bear interest at the Default Rate.

      (g) In the event of foreclosure of the Mortgage or other transfer of title
to the Property in  extinguishment  in whole or in part of the Debt,  all right,
title and  interest  of  Borrower  in and to the  Policies  that are not blanket
Policies  then  in  force  concerning  the  Property  and all  proceeds  payable
thereunder  shall thereupon vest in the purchaser at such  foreclosure or Lender
or other transferee in the event of such other transfer of title.

      5.1.2 Insurance Company. The Policies shall be issued by financially sound
and responsible  insurance  companies  authorized to do business in the state in
which the Property is located and having a claims paying  ability  rating of "A"
or  better by S&P and  Fitch.  If a  Securitization  occurs,  (i) the  foregoing
required  insurance  company rating by a Rating Agency not rating any Securities
shall  be  disregarded  and  (ii) if the  insurance  company  complies  with the
aforesaid S&P required  rating (and S&P is rating the  Securities) and the other
Rating  Agencies rating the Securities do not rate the insurance  company,  such
insurance  company shall be deemed acceptable with respect to such Rating Agency
not rating such insurance company. Notwithstanding the foregoing, Borrower shall
be permitted to maintain the Policies with insurance companies which do not meet
the foregoing  requirements (an "Otherwise Rated  Insurer"),  provided  Borrower
obtains a  "cut-through"  endorsement  (that is, an  endorsement  which  permits
recovery against the provider of such endorsement) with respect to any Otherwise
Rated Insurer from an insurance  company  which meets the claims paying  ability
ratings  required above.  Moreover,  if Borrower  desires to maintain  insurance
required  hereunder  from an  insurance  company  which does not meet the claims
paying  ability  ratings  set forth  herein  but the  parent  of such  insurance
company,  which owns at least fifty-one percent (51%) of such insurance company,
maintains such ratings, Borrower may use such insurance companies if approved by
the Rating  Agencies  (such approval may be conditioned on items required by the
Rating  Agencies   including  a  requirement   that  the  parent  guarantee  the
obligations of such insurance company).

      5.1.3 Current  Insurance.  Lender hereby  acknowledges  that the insurance
coverage  evidenced  by the  certificates  of  insurance  delivered to Lender in
connection with the


                                      -49-
<PAGE>

closing of the Loan are  acceptable to Lender as of the date hereof for purposes
of this Section 5.1.Section 5.2 Casualty and Condemnation.

      5.2.1 Casualty.  If the Property shall sustain a Casualty,  Borrower shall
give prompt  notice of such Casualty to Lender and shall  promptly  commence and
diligently prosecute to completion the repair and restoration of the Property as
nearly as possible to the  condition  the Property was in  immediately  prior to
such Casualty (a "Restoration") and otherwise in accordance with Section 5.3, it
being understood,  however,  that Borrower shall not be obligated to restore the
Property  to the  precise  condition  of the  Property  prior  to such  Casualty
provided the Property is restored, to the extent practicable,  to be of at least
equal value and of substantially the same character as prior to the Casualty and
with such alterations  that may be reasonably  approved by Lender or required by
law. Borrower shall pay all costs of such Restoration  whether or not such costs
are covered by insurance.  Lender may, but shall not be obligated to, make proof
of loss if not made promptly by Borrower.  In the event of a Casualty  where the
loss does not exceed Restoration Threshold,  Borrower may settle and adjust such
claim;  provided that (a) no Event of Default has occurred and is continuing and
(b) such  adjustment  is carried  out in a  commercially  reasonable  and timely
manner.  In the event of a  Casualty  where  the loss  exceeds  the  Restoration
Threshold or if an Event of Default then exists,  Borrower may settle and adjust
such  claim  only  with the  consent  of  Lender  (which  consent  shall  not be
unreasonably  withheld,  conditioned  or  delayed)  and  Lender  shall  have the
opportunity  to  participate,  at  Borrower's  cost,  in any  such  adjustments.
Notwithstanding  any Casualty,  Borrower  shall  continue to pay the Debt at the
time  and in the  manner  provided  for  its  payment  in the  Note  and in this
Agreement.

      5.2.2 Condemnation. Borrower shall give Lender prompt notice of any actual
or threatened  Condemnation by any Governmental  Authority of all or any part of
the Property and shall  deliver to Lender a copy of any and all papers served in
connection with such proceedings.  Provided no Event of Default has occurred and
is  continuing,  in the event of a  Condemnation  where the amount of the taking
does not exceed the  Restoration  Threshold,  Borrower may settle and compromise
such  Condemnation;  provided  that  the  same  is  effected  in a  commercially
reasonable  and timely manner.  In the event a Condemnation  where the amount of
the taking  exceeds the  Restoration  Threshold  or if an Event of Default  then
exists,  Borrower  may  settle and  compromise  the  Condemnation  only with the
consent of Lender (which consent shall not be unreasonably withheld, conditioned
or delayed) and Lender shall have the opportunity to participate,  at Borrower's
cost,  in any  litigation  and  settlement  discussions  in respect  thereof and
Borrower shall from time to time deliver to Lender all instruments  requested by
Lender to permit such participation.  Borrower shall, at its expense, diligently
prosecute any such proceedings, and shall consult with Lender, its attorneys and
experts,  and  cooperate  with them in the  carrying  on or  defense of any such
proceedings.  Notwithstanding  any Condemnation,  Borrower shall continue to pay
the Debt at the time and in the manner  provided for its payment in the Note and
in this Agreement. Lender shall not be limited to the interest paid on the Award
by any Governmental  Authority but shall be entitled to receive out of the Award
interest at the rate or rates provided herein or in the Note. If the Property or
any  portion  thereof is taken by any  Governmental  Authority,  Borrower  shall
promptly  commence and diligently  prosecute the Restoration of the Property and
otherwise  comply with the  provisions  of Section 5.3. If the Property is sold,
through  foreclosure or otherwise,  prior to the receipt by Lender of the Award,
Lender shall have the right,  whether or not a  deficiency  judgment on the Note
shall have been sought,  recovered or denied, to receive the Award, or a portion
thereof sufficient to pay the Debt.


                                      -50-
<PAGE>

      5.2.3  Casualty  Proceeds.  Notwithstanding  the last  sentence of Section
5.1.1(a)(iii)  and  provided  no Event of  Default  exists  hereunder,  proceeds
received by Lender on account of the business  interruption  insurance specified
in  Subsection  5.1.1(a)(iii)  above  with  respect  to any  Casualty  shall  be
deposited by Lender  directly  into the Deposit  Account (as defined in the Cash
Management  Agreement) but (a) only to the extent it reflects a replacement  for
(i) lost Rents that would  have been due under  Leases  existing  on the date of
such  Casualty,  and/or  (ii)  lost  Rents  under  Leases  that had not yet been
executed and delivered at the time of such Casualty which Borrower has proven to
the  insurance  company  would have been due under such Leases (and then only to
the  extent  such  proceeds   disbursed  by  the  insurance  company  reflect  a
replacement  for such past due Rents) and (b) only to the  extent  necessary  to
fully make the  disbursements  required by Section 3.3(b)(i) through (vi) of the
Cash Management  Agreement.  All other such proceeds shall be held by Lender and
disbursed in accordance with Section 5.3 hereof.

      Section 5.3 Delivery of Net Proceeds.

      5.3.1 Minor Casualty or  Condemnation.  If a Casualty or Condemnation  has
occurred to the Property and the Net Proceeds shall be less than the Restoration
Threshold and the costs of  completing  the  Restoration  shall be less than the
Restoration Threshold,  and provided no Event of Default shall have occurred and
remain  uncured,  the Net  Proceeds  will be  disbursed  by Lender to  Borrower.
Promptly  after  receipt  of the  Net  Proceeds,  Borrower  shall  commence  and
satisfactorily  complete with due diligence the  Restoration in accordance  with
the terms of this  Agreement.  If any Net  Proceeds are received by Borrower and
may be retained by Borrower  pursuant  to the terms  hereof,  such Net  Proceeds
shall, until disbursed in connection with the Restoration,  be held in trust for
Lender and shall be  segregated  from other  funds of Borrower to be used to pay
for the cost of Restoration in accordance with the terms hereof.

      5.3.2 Major Casualty or  Condemnation.  (a) If a Casualty or  Condemnation
has  occurred to the  Property and the Net Proceeds are equal to or greater than
the Restoration Threshold or the costs of completing the Restoration is equal to
or greater than the  Restoration  Threshold,  Lender shall make the Net Proceeds
available for the  Restoration,  provided that each of the following  conditions
are met:

      (i) no Event of Default shall have occurred and be continuing;

      (ii) (A) in the event the Net Proceeds are insurance  proceeds,  less than
twenty-five  percent  (25%) of the total floor area of the  Improvements  at the
Property has been  damaged,  destroyed or rendered  unusable as a result of such
Casualty  or (B) in the  event  the Net  Proceeds  are an  Award,  less than ten
percent (10%) of the land  constituting  the Property is taken, and such land is
located along the perimeter or periphery of the Property,  and no portion of the
Improvements is the subject of the Condemnation;

      (iii)  Leases  requiring  payment of annual  rent  equal to  seventy  five
percent (75%) of the Gross Revenue  received by Borrower  during the twelve (12)
month period  immediately  preceding the Casualty or Condemnation  and all Major
Leases shall remain in full force and effect during and after the  completion of
the Restoration without abatement of rent


                                      -51-
<PAGE>

beyond the time required for Restoration, notwithstanding the occurrence of such
Casualty or Condemnation.

      (iv)  Borrower  shall  commence  the  Restoration  as soon  as  reasonably
practicable (but in no event later than one hundred eighty (180) days after such
Casualty  or  Condemnation,  whichever  the  case  may  be,  occurs)  and  shall
diligently pursue the same to satisfactory completion;

      (v) Lender shall be satisfied that any operating deficits and all payments
of principal and interest under the Note will be paid during the period required
for Restoration from (A) the Net Proceeds, or (B) other funds of Borrower;

      (vi) Lender shall be satisfied that the  Restoration  will be completed on
or before  the  earliest  to occur of (A) the date six (6)  months  prior to the
Maturity  Date,  (B) the earliest  date required for such  completion  under the
terms  of any  Major  Lease  or (C) the  expiration  of the  insurance  coverage
referred to in Section 5.1.1(a)(iii);

      (vii) the Property and the use thereof  after the  Restoration  will be in
compliance with and permitted under all applicable Legal Requirements;

      (viii) the  Restoration  shall be done and  completed  by  Borrower  in an
expeditious  and diligent  fashion and in compliance  with all applicable  Legal
Requirements; and

      (ix) such Casualty or  Condemnation,  as applicable,  does not result in a
material adverse loss of access to the Property or the related Improvements.

      (x)  Notwithstanding  anything  contained  herein to the contrary,  Lender
hereby  agrees to apply the  proceeds of  insurance  to the  Restoration  to the
extent required by, and in accordance with, the Major Leases.

      (b) The Net Proceeds  shall be paid  directly to Lender and held by Lender
in an  interest-bearing  account and,  until  disbursed in  accordance  with the
provisions of this Section 5.3.2, shall constitute  additional  security for the
Debt.  The Net  Proceeds  shall be  disbursed  by Lender to, or as directed  by,
Borrower from time to time during the course of the Restoration, upon receipt of
evidence  satisfactory to Lender that (A) all  requirements set forth in Section
5.3.2(a) have been  satisfied,  (B) all  materials  installed and work and labor
performed  (except  to the  extent  that  they  are to be  paid  for  out of the
requested disbursement) in connection with the Restoration have been paid for in
full,  and (C) there exist no notices of pendency,  stop orders,  mechanic's  or
materialman's  liens or notices of intention to file same, or any other liens or
encumbrances  of any  nature  whatsoever  on  the  Property  arising  out of the
Restoration  which have not  either  been fully  bonded to the  satisfaction  of
Lender  and  discharged  of record or in the  alternative  fully  insured to the
satisfaction of Lender by the title company issuing the Title Insurance Policy.

      (c)  All  plans  and  specifications   required  in  connection  with  the
Restoration  shall be subject  to prior  approval  of Lender and an  independent
architect  selected  by  Lender  (the  "Casualty  Consultant").  The  plans  and
specifications  shall require that the Restoration be completed in a first-class
workmanlike manner at least equivalent to the quality and character of


                                      -52-
<PAGE>

the original work in the Improvements (provided,  however, that in the case of a
partial  Condemnation,  the Restoration  shall be done to the extent  reasonable
practicable   after  taking  into  account  the  consequences  of  such  partial
Condemnation),  so that upon completion thereof,  the Property shall be at least
equal in value  and  general  utility  to the  Property  prior to the  damage or
destruction; it being understood,  however, that Borrower shall not be obligated
to restore the Property to the precise  condition of the Property  prior to such
Casualty provided the Property is restored, to the extent practicable,  to be of
at least equal value and of  substantially  the same  character  as prior to the
Casualty.  Borrower shall restore all Improvements such that when they are fully
restored and/or repaired,  such  Improvements  and their  contemplated use fully
comply with all  applicable  material  Legal  Requirements.  The identity of the
contractors,  subcontractors and materialmen engaged in the Restoration, as well
as the  contracts  under  which  they have been  engaged,  shall be  subject  to
approval of Lender and the Casualty Consultant.  All costs and expenses incurred
by Lender in connection with recovering,  holding and advancing the Net Proceeds
for the Restoration  including,  without limitation,  reasonable attorneys' fees
and disbursements and the Casualty Consultant's fees and disbursements, shall be
paid by Borrower.

      (d) In no event shall Lender be obligated to make disbursements of the Net
Proceeds in excess of an amount equal to the costs  actually  incurred from time
to time  for  work in  place as part of the  Restoration,  as  certified  by the
Casualty Consultant,  less the Casualty Retainage. The term "Casualty Retainage"
shall mean, as to each contractor,  subcontractor or materialman  engaged in the
Restoration, an amount equal to ten percent (10%) of the costs actually incurred
for work in place  as part of the  Restoration,  as  certified  by the  Casualty
Consultant,  until the Restoration has been  completed.  The Casualty  Retainage
shall in no event, and notwithstanding  anything to the contrary set forth above
in this Section 5.3.2(d), be less than the amount actually held back by Borrower
from contractors, subcontractors and materialmen engaged in the Restoration. The
Casualty Retainage shall not be released until the Casualty Consultant certifies
to  Lender  that the  Restoration  has been  completed  in  accordance  with the
provisions  of this Section  5.3.2(d) and that all  approvals  necessary for the
re-occupancy  and use of the Property have been  obtained  from all  appropriate
Governmental  Authorities,  and Lender receives evidence  satisfactory to Lender
that the costs of the Restoration have been paid in full or will be paid in full
out of the Casualty Retainage;  provided,  however, that Lender will release the
portion of the Casualty  Retainage  being held with  respect to any  contractor,
subcontractor  or  materialman  engaged in the  Restoration  as of the date upon
which  the  Casualty  Consultant   certifies  to  Lender  that  the  contractor,
subcontractor  or  materialman  has  satisfactorily  completed  all work and has
supplied all materials in accordance  with the  provisions of the  contractor's,
subcontractor's  or  materialman's  contract,  the contractor,  subcontractor or
materialman  delivers  the lien  waivers and  evidence of payment in full of all
sums due to the  contractor,  subcontractor  or materialman as may be reasonably
requested by Lender or by the title company issuing the Title Insurance  Policy,
and Lender  receives an endorsement to the Title  Insurance  Policy insuring the
continued  priority of the lien of the  Mortgage  and evidence of payment of any
premium payable for such endorsement.  If required by Lender, the release of any
such portion of the Casualty  Retainage shall be approved by the surety company,
if any,  which has  issued a payment  or  performance  bond with  respect to the
contractor, subcontractor or materialman.

      (e)  Lender  shall  not be  obligated  to  make  disbursements  of the Net
Proceeds more frequently than once every calendar month.


                                      -53-
<PAGE>

      (f) If at any time the Net  Proceeds or the  undisbursed  balance  thereof
shall  not,  in  the  opinion  of  Lender  in  consultation  with  the  Casualty
Consultant,  be  sufficient  to pay in full the  balance of the costs  which are
estimated  by the  Casualty  Consultant  to be incurred in  connection  with the
completion of the  Restoration,  Borrower shall deposit the deficiency (the "Net
Proceeds  Deficiency")  with Lender before any further  disbursement  of the Net
Proceeds shall be made. The Net Proceeds Deficiency  deposited with Lender shall
be held by  Lender  and  shall be  disbursed  for  costs  actually  incurred  in
connection  with  the  Restoration  on the  same  conditions  applicable  to the
disbursement  of the Net  Proceeds,  and  until so  disbursed  pursuant  to this
Section 5.3.2 shall constitute additional security for the Debt.

      (g) The excess, if any, of the Net Proceeds and the remaining balance,  if
any, of the Net  Proceeds  Deficiency  deposited  with Lender after the Casualty
Consultant  certifies  to Lender  that the  Restoration  has been  completed  in
accordance with the provisions of this Section 5.3.2,  and the receipt by Lender
of evidence  satisfactory  to Lender that all costs incurred in connection  with
the Restoration have been paid in full, shall be remitted by Lender to Borrower,
provided no Event of Default shall have  occurred and shall be continuing  under
any of the Loan Documents; provided, however, the amount of such excess returned
to  Borrower  in the case of a  Condemnation  shall not exceed the amount of Net
Proceeds Deficiency  deposited by Borrower with the balance being applied to the
Debt in the manner provided for in subsection 5.3.2(h).

      (h)  All Net  Proceeds  not  required  (i) to be  made  available  for the
Restoration  or (ii) to be returned to Borrower as excess Net Proceeds  pursuant
to Section  5.3.2(g) may be retained and applied by Lender toward the payment of
the Components, whether or not then due and payable, in such order, priority and
proportions  as Lender in its sole  discretion  shall  deem  proper,  or, at the
discretion  of  Lender,  the same may be paid,  either  in whole or in part,  to
Borrower for such purposes as Lender shall designate.

      VI.   RESERVE FUNDS

      Section 6.1 Intentionally Omitted.

      Section 6.2 Ground Rent/PILOT Payment Funds.

      6.2.1 Deposits of Ground Rent/PILOT  Payment Funds. Upon the occurrence of
a Trigger Event and during the  continuance  of a Trigger  Period there shall be
deposited on each Monthly  Payment  Date an amount equal to  one-twelfth  of the
Ground  Rent and PILOT  Payments  that  Lender in good faith  estimates  will be
payable  during  the next  ensuing  twelve  (12)  months in order to  accumulate
sufficient  funds to pay all such Ground Rent and PILOT Payments with respect to
the tax  parcels  which  comprise  the  Property at least ten (10) days prior to
their respective due dates. Amounts deposited pursuant to this Section 6.2.1 are
referred  to herein as the "Ground  Rent/PILOT  Payment  Funds".  If at any time
Lender reasonably  determines that the Ground Rent/PILOT  Payment Funds will not
be  sufficient  to pay the Ground Rent or PILOT  Payments,  Lender  shall notify
Borrower  of such  determination  and the monthly  deposits  for Ground Rent and
PILOT  Payments  shall be  increased  by the amount  that  Lender  estimates  is
sufficient  to make up the  deficiency  at  least  ten  (10)  days  prior to the
respective  due dates for the  Ground  Rent or PILOT  Payments,  as  applicable;
provided that if


                                      -54-
<PAGE>

Borrower  receives notice of any deficiency after the date that is ten (10) days
prior to the date that  Ground Rent or PILOT  Payments  are due,  Borrower  will
deposit  such  amount  within  one (1)  Business  Day after its  receipt of such
notice.

      6.2.2 Release of Ground Rent /PILOT Payment Funds.  Lender shall apply the
Ground  Rent/PILOT  Payment Funds to payments of Ground Rent and PILOT Payments.
In making any payment  relating to Ground Rent or PILOT Payments,  Lender may do
so according to any bill,  statement or estimate  procured from the  appropriate
public office (with  respect to Ground Rent or PILOT  Payments,  as  applicable)
without  inquiry into the  accuracy of such bill,  statement or estimate or into
the  validity of any tax,  assessment,  sale,  forfeiture,  tax lien or title or
claim thereof. If the amount of the Ground Rent/PILOT Payment Funds shall exceed
the amounts due for Ground Rent and PILOT  Payments,  Lender shall either return
any excess to Borrower or credit such excess against future  payments to be made
to the  Ground  Rent/PILOT  Payment  Funds,  as  Lender  may  decide in its sole
discretion.  Any Ground  Rent/PILOT  Payment Funds  remaining after the Debt has
been paid in full shall be returned to Borrower.

      Section 6.3 Insurance Funds.

      6.3.1 Deposits of Insurance Funds.  Upon the occurrence of a Trigger Event
and during the  continuance of a Trigger Period there shall be deposited on each
Monthly  Payment Date an amount equal to one-twelfth  of the Insurance  Premiums
that Lender  estimates will be payable for the renewal of the coverage  afforded
by the Policies upon the  expiration  thereof in order to accumulate  sufficient
funds to pay all such Insurance  Premiums at least thirty (30) days prior to the
expiration of the Policies. Amounts deposited pursuant to this Section 6.3.1 are
referred to herein as the "Insurance  Funds".  If at any time Lender  reasonably
determines  that the Insurance Funds will not be sufficient to pay the Insurance
Premiums,  Lender shall notify  Borrower of such  determination  and the monthly
deposits  for  Insurance  Premiums  shall be increased by the amount that Lender
estimates  is  sufficient  to make up the  deficiency  at least thirty (30) days
prior to expiration of the Policies.

      6.3.2 Release of Insurance  Funds.  Lender shall apply the Insurance Funds
to payment of Insurance  Premiums.  In making any payment  relating to Insurance
Premiums, Lender may do so according to any bill, statement or estimate procured
from the insurer or its agent,  without  inquiry into the accuracy of such bill,
statement or  estimate.  If the amount of the  Insurance  Funds shall exceed the
amounts due for  Insurance  Premiums,  Lender shall either  return any excess to
Borrower  or  credit  such  excess  against  future  payments  to be made to the
Insurance  Funds,  as Lender may decide in its sole  discretion.  Any  Insurance
Funds  remaining  after  the Debt has been  paid in full  shall be  returned  to
Borrower.

      Section 6.4 Tax Funds.

      6.4.1  Deposits of Tax Funds.  Upon the  occurrence of a Trigger Event and
during the  continuance  of a Trigger  Period  there shall be  deposited on each
Monthly  Payment Date an amount equal to one-twelfth of the Taxes that Lender in
good faith  estimates will be payable during the next ensuing twelve (12) months
in order to  accumulate  sufficient  funds to pay all such Taxes with respect to
the tax  parcels  which  comprise  the  Property at least ten (10) days prior to
their respective due dates. Amounts deposited pursuant to this Section 6.2.1 are


                                      -55-
<PAGE>

referred  to  herein  as the  "Tax  Funds".  If at any  time  Lender  reasonably
determines  that the Tax Funds will not be sufficient  to pay the Taxes,  Lender
shall notify Borrower of such  determination  and the monthly deposits for Taxes
shall be increased by the amount that Lender  estimates is sufficient to make up
the  deficiency at least ten (10) days prior to the respective due dates for the
Taxes;  provided that if Borrower  receives  notice of any deficiency  after the
date that is ten (10) days prior to the date that Taxes are due,  Borrower  will
deposit  such  amount  within  one (1)  Business  Day after its  receipt of such
notice.

      6.4.2  Release of Tax Funds.  Lender shall apply the Tax Funds to payments
of Taxes. In making any payment relating to Taxes, Lender may do so according to
any bill,  statement or estimate  procured  from the  appropriate  public office
without  inquiry into the  accuracy of such bill,  statement or estimate or into
the  validity of any tax,  assessment,  sale,  forfeiture,  tax lien or title or
claim  thereof.  If the amount of the Tax Funds shall exceed the amounts due for
Taxes,  Lender shall either  return any excess to Borrower or credit such excess
against future payments to be made to the Tax Funds, as Lender may decide in its
sole  discretion.  Any Tax Funds  remaining after the Debt has been paid in full
shall be returned to Borrower.

      Section 6.5 Rollover Funds.

      6.5.1 Deposits of Rollover  Funds.  Upon the occurrence of a Trigger Event
and during the  continuance  of a Trigger  Period there shall be deposited  with
Lender  on  each  Monthly  Payment  Date  the  sum of  $107,562.58,  for  tenant
improvements  and leasing  commissions  that may be incurred  following the date
hereof.  Amounts deposited pursuant to this Section 6.5.1 are referred to herein
as the "Rollover Funds".

      6.5.2 Release of Rollover Funds.  Lender shall direct Agent to disburse to
Borrower  the  Rollover  Funds  upon  satisfaction  by  Borrower  of each of the
following conditions:  (i) Borrower shall submit a request for payment to Lender
at least ten (10) days prior to the date on which Borrower requests such payment
be made and specifies the tenant improvement costs and leasing commissions to be
paid,  (ii) on the date such  request is received by Lender and on the date such
payment is to be made, no Event of Default shall exist and remain uncured, (iii)
Lender shall have reviewed and, if Lender's  approval is required,  approved the
Lease in respect of which  Borrower is  obligated  to pay or  reimburse  certain
tenant  improvement  costs and  leasing  commissions,  (iv)  Lender  shall  have
received  and, if Lender's  approval is  required,  approved a budget for tenant
improvement  costs  and a  schedule  of  leasing  commissions  payments  and the
requested  disbursement  will be used to pay all or a portion  of such costs and
payments, (v) Lender shall have received a certificate from Borrower (A) stating
that all  tenant  improvements  at the  Property  to be funded by the  requested
disbursement  have  been  completed  in  good  and  workmanlike  manner  and  in
accordance  with all  applicable  federal,  state  and  local  laws,  rules  and
regulations, such certificate to be accompanied by a copy of any license, permit
or other approval by any Governmental  Authority required in connection with the
Capital  Expenditures,  (B) identifying  each Person that supplied  materials or
labor in connection  with the tenant  improvements to be funded by the requested
disbursement,  and (C)  stating  that each such  Person has been paid in full or
will be paid in full upon such disbursement,  such certificate to be accompanied
by lien waivers or other  evidence of payment  satisfactory  to Lender,  (vi) at
Lender's option, if the cost of the tenant  improvements exceed $75,000, a title
search for the  Property  indicating  that the  Property is free from all Liens,
claims and other encumbrances not


                                      -56-
<PAGE>

previously  approved by Lender,  and (vii) Lender shall have received such other
evidence as Lender shall reasonably request that the tenant  improvements at the
Property to be funded by the requested  disbursement have been completed and are
paid for or will be paid upon such disbursement to Borrower. Lender shall not be
required to disburse  Rollover  Funds more  frequently  than once each  calendar
month,  unless such  requested  disbursement  is in an amount  greater  than the
Minimum  Disbursement Amount (or a lesser amount if the total amount of Rollover
Funds is less  than the  Minimum  Disbursement  Amount,  in which  case only one
disbursement of the amount remaining in the account shall be made).

      Section 6.6 Lease Termination Rollover Funds.

      6.6.1 Deposits of Rollover  Funds.  In the event that Borrower  receives a
fee, payment or other  compensation from any Tenant under a Major Lease relating
to or in  exchange  for  the  termination  of  such  Tenant's  Lease  (a  "Lease
Termination Fee") Borrower shall immediately  deposit such Lease Termination Fee
with Lender, to be utilized for tenant improvements and leasing commissions that
may be incurred with respect to the space relating to such Lease Termination Fee
(a  "Termination  Space") and, in the event that there is a Rent  Deficiency (as
hereinafter  defined) for the Termination Space from and after the date that the
Major Lease for the Termination  Space was  terminated,  in replacement of Rent.
Amounts  deposited  pursuant to this Section 6.6.1 are referred to herein as the
"Lease Termination Rollover Funds".

      6.6.2 Release of Lease Termination Rollover Funds. (a) Lender shall direct
Agent to  disburse  to  Borrower  the  Lease  Termination  Rollover  Funds  upon
satisfaction by Borrower of each of the following conditions: (i) Borrower shall
submit a request  for payment to Lender at least ten (10) days prior to the date
on which  Borrower  requests  such payment be made and (A)  specifies the tenant
improvement  costs and leasing  commissions to be paid for the Termination Space
or (B)  specifies  the  amount  by which the rent  expected  to be  obtained  by
Borrower for the  Termination  Space during the next  succeeding  calendar month
pursuant  to the  Lease or Leases  for such  Termination  Space (a  "Replacement
Lease") is less than the  amount of  monthly  rent  received  from the  previous
Tenant in the Termination  Space pursuant to its Lease prior to such termination
(the "Rent Deficiency"), (ii) on the date such request is received by Lender and
on the date such  payment  is to be made,  no Event of Default  shall  exist and
remain  uncured,  (iii) Lender shall have reviewed  and, to the extent  required
hereby, approved the Replacement Lease in respect of which Borrower is obligated
to pay or reimburse certain tenant  improvement  costs and leasing  commissions,
(iv) with  respect to any Lease  Termination  Rollover  Funds to be  released by
Lender for tenant improvements or leasing commissions  pursuant to a Replacement
Lease,  Lender shall have received a budget for tenant  improvement  costs and a
schedule of leasing commissions payments and the requested  disbursement will be
used to pay all or a portion of such costs and payments, (v) with respect to any
Lease   Termination   Rollover  Funds  to  be  released  by  Lender  for  tenant
improvements  or leasing  commissions  pursuant to a Replacement  Lease,  Lender
shall have  received a  certificate  from  Borrower  (A) stating that all tenant
improvements  at the Property to be funded by the  requested  disbursement  have
been  completed  in good  and  workmanlike  manner  and in  accordance  with all
applicable  federal,   state  and  local  laws,  rules  and  regulations,   such
certificate to be accompanied by a copy of any license, permit or other approval
by  any  Governmental   Authority   required  in  connection  with  the  Capital
Expenditures, (B) identifying each Person that supplied materials or


                                      -57-
<PAGE>

labor in connection  with the tenant  improvements to be funded by the requested
disbursement,  and (C)  stating  that each such  Person has been paid in full or
will be paid in full upon such disbursement,  such certificate to be accompanied
by lien waivers or other evidence of payment  satisfactory to Lender,  (vi) with
respect to any Lease  Termination  Rollover  Funds to be  released by Lender for
tenant improvements or leasing  commissions  pursuant to a Replacement Lease, at
Lender's option, a title search for the Property indicating that the Property is
free from all Liens,  claims and other  encumbrances not previously  approved by
Lender and (vii)  with  respect to any Lease  Termination  Rollover  Funds to be
released by Lender for tenant improvements or leasing commissions  pursuant to a
Replacement  Lease,  Lender shall have  received  such other  evidence as Lender
shall  reasonably  request  that the tenant  improvements  at the Property to be
funded by the  requested  disbursement  have been  completed and are paid for or
will be paid upon such disbursement to Borrower. Lender shall not be required to
disburse  Lease  Termination  Rollover  Funds  more  frequently  than  once each
calendar month, unless such requested  disbursement is in an amount greater than
the Minimum Disbursement Amount (or a lesser amount if the total amount of Lease
Termination  Rollover  Funds is less than the Minimum  Disbursement  Amount,  in
which case only one disbursement of the amount remaining in the account shall be
made). All Rent Deficiency  disbursements made by Lender shall be deposited into
the Deposit Account as if such sums were received by Borrower as Rent during the
calendar month after such request is made by Borrower.

      (b)  Notwithstanding  the  foregoing,  upon  receipt by Lender of evidence
that, with respect to any new Replacement Lease with a term of at least five (5)
years, all tenant improvements  required to be completed by Borrower pursuant to
the Replacement  Lease, if any, have been completed and all leasing  commissions
required to be paid by Borrower with respect to the  Replacement  Lease, if any,
have been paid,  and  provided no Event of Default  then  exists,  Lender  shall
direct Agent to disburse to Borrower  the Lease  Termination  Rollover  Funds on
deposit  with respect to such  Termination  Space  provided  that the rent to be
obtained by Borrower for such Termination Space during the next succeeding sixty
(60) calendar months pursuant to the respective Replacement Lease is equal to or
greater than the sum of the monthly rent last received from the previous  Tenant
in such Termination Space pursuant to its Lease multiplied by sixty (60).

      Section 6.7 Intentionally Omitted.

      Section 6.8 Application of Reserve Funds.

      Upon the  occurrence of an Event of Default,  Lender,  at its option,  may
withdraw  the Reserve  Funds and apply the Reserve  Funds to the items for which
the  Reserve  Funds were  established  or to payment of the Debt in such  order,
proportion and priority as Lender may determine in its sole discretion. Lender's
right to withdraw and apply the Reserve  Funds shall be in addition to all other
rights and remedies provided to Lender under the Loan Documents.

      Section 6.9 Security Interest in Reserve Funds.

      6.9.1  Grant of  Security  Interest.  Borrower  shall be the  owner of the
Reserve Funds.  Borrower hereby pledges,  assigns and grants a security interest
to Lender,  as security for payment of the Debt and the performance of all other
terms, conditions and covenants of the


                                      -58-
<PAGE>

Loan Documents on Borrower's part to be paid and performed, in all of Borrower's
right,  title and interest in and to the Reserve Funds.  The Reserve Funds shall
be under the sole dominion and control of Lender.

      6.9.2 Income Taxes. Borrower shall report on its federal,  state and local
income tax returns, if any, all interest or income accrued on the Reserve Funds.

      6.9.3 Prohibition Against Further Encumbrance. Borrower shall not, without
the prior  consent  of  Lender,  further  pledge,  assign or grant any  security
interest  in the  Reserve  Funds or  permit  any lien or  encumbrance  to attach
thereto,  or any levy to be made  thereon,  or any UCC-1  Financing  Statements,
except  those  naming  Lender as the  secured  party,  to be filed with  respect
thereto.

      Section 6.10 Letters of Credit.

      6.10.1  Delivery of Letters of Credit.  (a) In lieu of making the payments
to any of the Reserve  Funds,  Borrower may deliver to Lender a Letter of Credit
in accordance with the provisions of this Section 6.10.  Additionally,  Borrower
may deliver to Lender a Letter of Credit in  accordance  with the  provisions of
this Section 6.10 in lieu of deposits  previously made to the Reserve Funds. The
aggregate amount of any Letter of Credit and cash on deposit with respect to the
Rollover  Funds  shall at all times be at least  equal to the  aggregate  amount
which  Borrower is required to have on deposit in such Reserve Fund  pursuant to
this Agreement. The aggregate amount of any Letter of Credit and cash on deposit
with  respect to the Ground  Rent/PILOT  Payment  Funds shall at all times be at
least equal to the aggregate which Borrower would be required to deposit in such
Reserve Fund over the next twelve (12) month period. The aggregate amount of any
Letter of Credit and cash on deposit  with respect to the Tax Funds shall at all
times be at least equal to the  aggregate  which  Borrower  would be required to
deposit  in such  Reserve  Fund over the next  twelve  (12)  month  period.  The
aggregate amount of any Letter of Credit and cash on deposit with respect to the
Insurance  Funds  shall at all times be at least  equal to the  aggregate  which
Borrower  would be required to deposit in such Reserve Fund over the next twelve
(12) month period.  In the event that a Letter of Credit is delivered in lieu of
any portion of the Ground  Rent/PILOT  Payment Funds, Tax Funds or the Insurance
Funds,  Borrower shall be responsible for the payment of Taxes,  ground rent due
under the Ground Lease, PILOT Payments and/or Insurance Premiums, as applicable,
and Lender shall not be responsible therefor.

      (b)  Borrower  shall give  Lender no less than  thirty (30) days notice of
Borrower's  election  to  deliver a Letter of Credit and  Borrower  shall pay to
Lender all of Lender's reasonable out-of-pocket costs and expenses in connection
therewith.  Borrower  shall  not be  entitled  to draw  from any such  Letter of
Credit. Upon thirty (30) days notice to Lender, Borrower may replace a Letter of
Credit with a cash deposit to the applicable  Reserve Fund if a Letter of Credit
has been  outstanding  for more than six (6)  months.  Prior to the  return of a
Letter of Credit,  Borrower  shall  deposit an amount  equal to the amount  that
would have accumulated in the applicable  Reserve Fund and not been disbursed in
accordance with this Agreement if such Letter of Credit had not been delivered.


                                      -59-
<PAGE>

      (c)  Borrower  shall  provide  Lender with notice of any  increases in the
annual  payments for Taxes and Insurance  Premiums thirty (30) days prior to the
effective date of any such increase and any applicable Letter of Credit shall be
increased by such increased amount at least ten (10) days prior to the effective
date of such increase.

      Section 6.11 Provisions Regarding Letters of Credit.

      6.11.1  Security  for Debt.  Each  Letter of Credit  delivered  under this
Agreement  shall be  additional  security for the payment of the Debt.  Upon the
occurrence of an Event of Default,  Lender shall have the right,  at its option,
to draw on any  Letter of Credit  and to apply  all or any part  thereof  to the
payment of the items for which such Letter of Credit was established or to apply
each such Letter of Credit to payment of the Debt in such order,  proportion  or
priority  as Lender may  determine.  Any such  application  to the Debt shall be
subject to the Yield Maintenance  Premium. On the Maturity Date, any such Letter
of Credit may be applied to reduce the Debt.

      6.11.2  Additional Rights of Lender. In addition to any other right Lender
may have to draw upon a Letter of Credit pursuant to the terms and conditions of
this  Agreement,  Lender  shall have the  additional  rights to draw in full any
Letter of Credit:  (a) with respect to any evergreen Letter of Credit, if Lender
has  received a notice from the issuing  bank that the Letter of Credit will not
be renewed and a  substitute  Letter of Credit is not  provided at least  thirty
(30)  days  prior to the date on which  the  outstanding  Letter  of  Credit  is
scheduled  to expire;  (b) with  respect  to any Letter of Credit  with a stated
expiration  date, if Lender has not received a notice from the issuing bank that
it has renewed the Letter of Credit at least  thirty (30) days prior to the date
on which such Letter of Credit is scheduled to expire and a substitute Letter of
Credit is not  provided at least thirty (30) days prior to the date on which the
outstanding  Letter of Credit is scheduled to expire; (c) upon receipt of notice
from the issuing  bank that the Letter of Credit will be  terminated  (except if
the termination of such Letter of Credit is permitted  pursuant to the terms and
conditions of this Agreement or a substitute  Letter of Credit is provided);  or
(d) if Lender has  received  notice  that the bank  issuing the Letter of Credit
shall  cease to be an  Eligible  Institution.  Notwithstanding  anything  to the
contrary  contained in the above,  Lender is not obligated to draw any Letter of
Credit upon the  happening of an event  specified in (a),  (b), (c) or (d) above
and  shall  not be  liable  for any  losses  sustained  by  Borrower  due to the
insolvency  of the bank issuing the Letter of Credit if Lender has not drawn the
Letter of Credit.

      VII.  PROPERTY MANAGEMENT

      Section 7.1 The Management Agreement.

      Borrower shall cause Manager to manage the Property in accordance with the
Management  Agreement.  Borrower shall (i) diligently perform and observe all of
the terms,  covenants and conditions of the Management  Agreement on the part of
Borrower to be performed and observed, (ii) promptly notify Lender of any notice
to Borrower of any default by Borrower in the  performance  or observance of any
of the terms, covenants or conditions of the Management Agreement on the part of
Borrower to be performed and observed,  and (iii)  promptly  deliver to Lender a
copy of each financial  statement,  business plan,  capital  expenditures  plan,
report and estimate received by it under the Management Agreement. If


                                      -60-
<PAGE>

Borrower  shall default in the  performance  or observance of any material term,
covenant or condition of the Management  Agreement on the part of Borrower to be
performed or observed,  then, without limiting Lender's other rights or remedies
under  this  Agreement  or the other  Loan  Documents,  and  without  waiving or
releasing Borrower from any of its obligations hereunder or under the Management
Agreement, Lender shall have the right, but shall be under no obligation, to pay
any sums and to perform any act as may be  appropriate to cause all the material
terms,  covenants  and  conditions  of the  Management  Agreement on the part of
Borrower to be performed or observed.

      Section 7.2 Prohibition Against Termination or Modification.

      Borrower shall not surrender,  terminate,  cancel, modify, renew or extend
the  Management  Agreement,  or enter into any other  agreement  relating to the
management  or operation of the Property  with Manager or any other  Person,  or
consent to the  assignment by the Manager of its interest  under the  Management
Agreement,  in each case without the express  consent of Lender,  which  consent
shall not be unreasonably  withheld;  provided,  however,  with respect to a new
manager such consent may be conditioned upon Borrower delivering a Rating Agency
Confirmation  as to such new manager and  management  agreement and, if such new
manager is an  Affiliate  of  Borrower,  upon  delivery  of a  non-consolidation
opinion acceptable to the Rating Agencies. If at any time Lender consents to the
appointment  of a new  manager,  such  new  manager  and  Borrower  shall,  as a
condition of Lender's consent,  execute a subordination of management  agreement
in the form then used by Lender.

      Section 7.3 Replacement of Manager.

      Lender  shall have the right to require  Borrower  to replace  the Manager
with a Person  which is not an  Affiliate  of,  but is chosen by,  Borrower  and
approved  by  Lender  upon the  occurrence  of any one or more of the  following
events: (i) at any time following the occurrence of an Event of Default, (ii) if
at any  time  the Debt  Service  Coverage  Ratio  falls  below  1.10 to 1.0 (the
"Manager  Termination  Ratio") for two (2)  consecutive  calendar  quarters,  as
determined by Lender in its  reasonable  discretion on a quarterly  basis and/or
(iii) if Manager shall be in default under the Management  Agreement  beyond any
applicable  notice and cure  period or if at any time the Manager has engaged in
gross negligence, fraud or willful misconduct. Notwithstanding the provisions of
clause (iii) above,  Borrower shall  nevertheless  have the right to retain such
Manager if, prior to the  replacement  of such Manager,  Borrower  shall provide
additional  collateral  in the form of  Letters  of Credit  for a portion of the
Loan,  satisfactory to Lender,  such that the Manager  Termination  Ratio can be
maintained  on the Loan  Amount net of such  additional  collateral.  Lender may
require  Borrower to increase the additional  collateral to the extent such Debt
Service  Coverage  Ratio  continues  to decline  in  subsequent  quarters.  Such
additional  collateral  shall be  released  to  Borrower  when the Debt  Service
Coverage Ratio equals or exceeds the Manager Termination Ratio for 6 consecutive
months and provided no Event of Default has occurred and is continuing.  Letters
of Credit  provided  under this  section  shall be  additional  security for the
repayment  of the  Indebtedness  and  may be  drawn  upon  by  Lender  upon  the
occurrence  of an Event of  Default  and  applied  by Lender  in such  order and
priority as Lender may determine in its sole discretion.

      VIII. PERMITTED TRANSFERS


                                      -61-
<PAGE>

      Section 8.1 Intentionally Omitted.

      Section 8.2 Permitted Transfers.

      (a) Without the prior written consent of Lender,  neither Borrower nor any
other Person having an ownership or beneficial interest,  direct or indirect, in
Borrower  shall (i) directly or indirectly  sell,  transfer,  convey,  mortgage,
pledge,  or assign  the  Property,  any part  thereof  or any  interest  therein
(including any ownership interest in Borrower); (ii) further encumber, alienate,
grant a Lien or grant any other  interest in the  Property  or any part  thereof
(including  any  ownership  interest  in  Borrower),   whether   voluntarily  or
involuntarily;  or (iii)  enter into any  easement or other  agreement  granting
rights in or restricting the use or development of the Property.

      (b) Borrower may,  upon thirty (30) days prior notice to Lender,  (i) make
immaterial  transfers of portions of the Property to any Governmental  Authority
for dedication or public use, and (ii) grant easements,  restrictions covenants,
reservations  and rights of way in the  ordinary  course of business for access,
water and sewer lines,  telephone and telegraph  lines,  electric lines or other
utilities  or for  other  similar  purposes,  provided  that no  such  transfer,
conveyance or encumbrance set forth in the foregoing  clauses (i) and (ii) shall
materially  adversely  effect the  utility  and  operation  of the  Property  or
materially  adversely  effect  the  value  of the  Property  taken as a whole or
materially  adversely  effect the ability of Borrower to pay the debt secured by
the  Mortgage.  In  connection  with any  transfer,  conveyance  or  encumbrance
permitted pursuant to this Section 8.2(b),  Borrower shall deliver to Lender not
less  than 30 days  prior to the date of such  transfer  a copy of the  proposed
instrument of transfer, which shall not impose any liability on Lender and shall
be reasonably  acceptable to Lender in all respects;  and if acceptable,  Lender
shall execute and deliver such instrument, in the case of the transfers referred
to in clause (i) above, to release the portion of the Property  affected by such
transfer from the lien of the Mortgage or, in the case of clause (ii) above,  to
subordinate the lien of the Mortgage to such easements, restrictions, covenants,
reservations  and  rights  of way or other  similar  grants  promptly  following
receipt by Lender of: (A)  payment  of costs  incurred  by Lender in  connection
therewith;  and (B) a  certificate  from an  officer of the  general  partner or
managing  member of  Borrower  stating  (x) with  respect to any  transfer,  the
consideration,  if any,  being  paid  for  the  transfer  provided  that if such
consideration  exceeds  $25,000,  Borrower shall deliver such  consideration  to
Lender  to be  applied  to the Debt or at  Lender's  option  held as  additional
collateral for the Loan and (y) that such transfer does not materially adversely
effect the utility and operation of the Property or materially  adversely effect
the value of the Property  taken as a whole or materially  adversely  effect the
ability of Borrower to pay the Debt.

      (c) A sale or conveyance by Fee Borrower and Leasehold  Borrower of all of
their  respective  interests in the Property (but not a mortgage,  lien or other
encumbrance)  is permitted  provided that each of the following  conditions have
been satisfied:

      (i) no Event of Default shall have occurred and be continuing;

      (ii) the Person to whom the  Property is sold or conveyed  qualifies  as a
single  purpose,  bankruptcy  remote entity under  criteria  established  by the
Rating  Agencies and not less than 50% of the direct or indirect  interests  are
owned and controlled by a Permitted Owner;


                                      -62-
<PAGE>

      (iii) Lender shall have received a Rating Agency  Confirmation  as to such
sale or conveyance;

      (iv) Lender has received a  non-consolidation  opinion which may be relied
upon by Lender, the Rating Agencies and their respective counsel, successors and
assigns,  with  respect  to the  sale or  conveyance,  which  opinion  shall  be
reasonably  acceptable  to  Lender  and,  after  a  Securitization,  the  Rating
Agencies;

      (v) the  transferee of the Property  shall execute an assumption of all of
the obligations of Fee Borrower and Leasehold Borrower under this Agreement, the
Mortgage and the other Loan Documents,  subject,  however,  to the provisions of
Section 11.22 of this Agreement; and

      (vi) Fee  Borrower and  Leasehold  Borrower  shall give written  notice to
Lender of the proposed sale or conveyance  not later than thirty (30) days prior
thereto,  which  notice  shall set forth  the name of the  proposed  transferee,
identify  the  owners of such  direct and  indirect  interests  of the  proposed
transferee  and set  forth the date the sale or  conveyance  is  expected  to be
effective.

      (d) A transfer  or sale (but not a pledge,  hypothecation,  creation  of a
security  interest  in or other  encumbrance)  of direct or  indirect  ownership
interests in Fee Borrower and/or  Leasehold  Borrower is permitted  provided the
following conditions have been satisfied:

      (i) such transfer or sale is to a Permitted Owner;

      (ii) prior to any such  transfer or sale of direct or  indirect  ownership
interests in Fee Borrower or Leasehold Borrower,  as applicable,  if as a result
of either of which (and after giving effect to such transfer or sale), more than
50% of the direct or indirect  ownership  interests in Fee Borrower or Leasehold
Borrower,  as applicable,  shall have been transferred to a person or entity not
owning  at least  50% of the  direct  or  indirect  ownership  interests  in Fee
Borrower or  Leasehold  Borrower,  as  applicable,  on the date of closing,  Fee
Borrower  or  Leasehold  Borrower,  as  applicable,  shall  deliver  to Lender a
non-consolidation  opinion  which  may be  relied  upon by  Lender,  the  Rating
Agencies and their respective counsel,  successors and assigns,  with respect to
the proposed  transfer or sale, which opinion shall be reasonably  acceptable to
Lender and, after a Securitization, the Rating Agencies;

      (iii) Lender shall have received a Rating Agency  Confirmation  as to such
transfer or sale;

      (iv)  immediately  prior to such  transfer or sale no Event of Default has
occurred and is continuing; and

      (v) Fee Borrower or Leasehold Borrower, as applicable, shall give or cause
to be given written notice to Lender of the proposed  transfer or sale not later
than thirty (30) days prior  thereto,  which  notice shall set forth the name of
the Person to which the  interest in Fee  Borrower  or  Leasehold  Borrower,  as
applicable,  is to be transferred or sold,  identify the proposed transferee and
set forth the date the transfer or sale is expected to be effective.


                                      -63-
<PAGE>

      (e) The  restrictions on Transfers of ownership  interests in Borrower set
forth herein and in Article 6 of the Mortgage  shall not apply to the  issuance,
sale,  transfer  or  pledge of  publicly  traded  shares of the REIT  including,
without  limitation,  a Transfer in connection  with the purchase or exchange of
all or substantially all of the stock of the REIT.

      (f) The  restrictions on Transfers of ownership  interests in Borrower set
forth herein and in Article 6 of the Mortgage  shall not apply to the  issuance,
transfer or pledge of limited  partnership  interests in Sponsor,  provided that
(w) the REIT shall at all times (i) be and remain the 100% owner of GPC and have
the right and power to direct the management,  policies and day-to-day  business
and affairs of Sponsor through GPC and (ii) directly owns a minimum of fifty one
percent (51%) of the interests in Sponsor, (x) Sponsor directly or indirectly at
all times owns at least one hundred percent (100%) of the ownership interests in
Borrower and retains  control of the Borrower and the  day-to-day  management of
the Property,  (y) GPC shall at all times remain the general  partner of Sponsor
and (z) if after giving  effect to such transfer and all prior  transfers,  more
than forty-nine  percent (49%) in the aggregate of direct or indirect  interests
in Borrower  are owned by any Person and its  Affiliates  that owned less than a
forty-nine  percent  (49%)  direct or  indirect  interest  in Borrower as of the
Closing Date, Lender receives a  non-consolidation  opinion acceptable to Lender
and the Rating  Agencies.  Notwithstanding  the foregoing,  a Transfer of all of
such limited partnership  interests in the Sponsor to a Person that acquires all
or substantially all of the assets of the REIT shall be permitted  regardless of
whether or not the requirements of subclauses (w), (x) and (y) are met.

      IX.   SALE AND SECURITIZATION OF MORTGAGE

      Section 9.1 Sale of Mortgage and Securitization.

      (a) Lender shall have the right (i) to sell or otherwise transfer the Loan
or any portion thereof as a whole loan, (ii) to sell participation  interests in
the Loan or (iii) to  securitize  the Loan or any  portion  thereof  in a single
asset securitization or a pooled loan securitization.  (The transaction referred
to in clauses (i), (ii) and (iii) shall  hereinafter be referred to collectively
as "Secondary Market  Transactions"  and the transactions  referred to in clause
(iii) shall hereinafter be referred to as a "Securitization".  Any certificates,
notes or  other  securities  issued  in  connection  with a  Securitization  are
hereinafter referred to as "Securities").

      (b) If requested by Lender,  Borrower  shall use  commercially  reasonable
efforts to assist  Lender in  satisfying  the market  standards  to which Lender
customarily adheres or which may be reasonably required in the marketplace or by
the Rating  Agencies in connection  with any Secondary  Market  Transactions  at
Lender's sole cost and expense, including, without limitation, to:

      (i) (A) provide updated  financial and other  information  with respect to
the Property,  the business operated at the Property,  Borrower and the Manager,
(B) provide  updated  budgets  relating to the Property and (C) provide  updated
appraisals,   market   studies,   environmental   reviews  (Phase  I's  and,  if
appropriate,  Phase II's),  property  condition  reports and other due diligence
investigations  of  the  Property  (the  "Updated  Information"),  together,  if
customary,  with  appropriate  verification of the Updated  Information  through
letters of auditors or opinions of counsel  acceptable  to Lender and the Rating
Agencies;


                                      -64-
<PAGE>

      (ii) provide opinions of counsel,  which may be relied upon by Lender, the
Rating Agencies and their respective counsel, agents and representatives,  as to
non-consolidation,  fraudulent  conveyance,  and true sale or any other  opinion
customary in Secondary  Market  Transactions  or required by the Rating Agencies
with respect to the Property and  Borrower  and  Affiliates,  which  counsel and
opinions shall be satisfactory to Lender and the Rating Agencies;

      (iii)  provide  updated,  as of the closing date of the  Secondary  Market
Transaction,  representations and warranties made in the Loan Documents and such
additional  representations  and warranties as the Rating  Agencies may require;
and

      (iv)   execute   amendments   to  the  Loan   Documents   and   Borrower's
organizational documents reasonably requested by Lender; provided, however, that
Borrower  shall not be  required  to modify or amend any Loan  Document  if such
modification  or  amendment  would (A)  change  the  interest  rate,  the stated
maturity or the amortization of principal as set forth herein or in the Note, or
(B) modify or amend any other material economic term of the Loan.

      (c) If requested by Lender, Borrower shall provide Lender at Lender's sole
cost and expense with the following  financial  statements (it being  understood
that Lender shall request  summaries of financial  statements if it  anticipates
that the principal amount of the Loan at the time of  Securitization  may, or if
the  principal  amount of the Loan at any time during which the Loan is included
in a  Securitization  does,  equals or exceeds  10% of the  aggregate  principal
amount of all mortgage loans included in the Securitization):

      (i) As of the Closing  Date, a balance  sheet with respect to the Property
for the two most  recent  Fiscal  Years,  meeting  the  requirements  of Section
210.3-01 of Regulation  S-X of the  Securities  Act and statements of income and
statements  of cash flows with respect to the Property for the three most recent
Fiscal Years,  meeting the  requirements of Section  210.3-02 of Regulation S-X,
and, to the extent that such  balance  sheet is more than 135 days old as of the
Closing  Date,  interim  financial   statements  of  the  Property  meeting  the
requirements  of Section  210.3-01 and 210.3-02 of  Regulation  S-X (all of such
financial  statements,   collectively,  the  "Standard  Statements");  provided,
however, with respect to any Property that has been acquired by Borrower from an
unaffiliated  third  party (an  "Acquired  Property")  and as to which the other
conditions set forth in Section  210.3-14 of Regulation S-X for the provision of
financial  statements in accordance  with such Section have been met (other than
any  Property  that is a hotel,  nursing  home or other  property  that would be
deemed to constitute a business and not real estate under  Regulation S-X and as
to which the other  conditions  set forth in Section  210.3-05 of Regulation S-X
for provision of financial  statements in accordance with such Section have been
met ( a "Business  Property")),  in lieu of the  Standard  Statements  otherwise
required by this Section 9.1(c)(i), Borrower shall instead provide the financial
statements  required by such  Section  210.3-14 of  Regulation  S-X ;  provided,
further,  however,  with respect to any Business  Property  which is an Acquired
Property,  Borrower shall instead provide the financial  statements  required by
Section 210.3-05 (such Section 210.3-14 or Section 210.3-05 financial statements
referred to herein as ("Acquired Property Statements").


                                      -65-
<PAGE>

      (ii) Not later than 30 days after the end of each fiscal quarter following
the Closing  Date, a balance  sheet of the Property as of the end of such fiscal
quarter,  meeting the  requirements  of Section  210.3-01 of Regulation S-X, and
statements of income and statements of cash flows of the Property for the period
commencing  on the day following the last day of the most recent Fiscal Year and
ending on the date of such balance sheet and for the corresponding period of the
most  recent  Fiscal  Year,  meeting  the  requirements  of Section  210.3-02 of
Regulation  S-X  (provided,  that if for such  corresponding  period of the most
recent Fiscal Year Acquired  Property  Statements  were permitted to be provided
hereunder  pursuant to  paragraph  (i) above,  Borrower  shall  instead  provide
Acquired Property  Statements for such  corresponding  period).  If requested by
Lender,  Borrower  shall also provide  "summarized  financial  information,"  as
defined  in  Section  210.1-02(bb)  of  Regulation  S-X,  with  respect  to such
quarterly financial statements.

      (iii) Not later than 60 days after the end of each Fiscal  Year  following
the Closing  Date, a balance  sheet of the Property as of the end of such Fiscal
Year,  meeting the  requirements  of Section  210.3-01 of  Regulation  S-X,  and
statements  of income  and  statements  of cash flows of the  Property  for such
Fiscal Year,  meeting the requirements of Section 210.3-02 of Regulation S-X. If
requested by Lender,  Borrower shall provide  summarized  financial  information
with respect to such annual financial statements.

      (iv) Upon ten (10)  Business  Days after notice from Lender in  connection
with the Securitization of this Loan, such additional financial statements, such
that,  as of the date (each a  "Disclosure  Document  Date") of each  Disclosure
Document,  Borrower shall have provided Lender with all financial  statements as
described  in  paragraph  (i) above;  provided  that the Fiscal Year and interim
periods  for  which  such  financial  statements  shall  be  provided  shall  be
determined as of such Disclosure Document Date.

      (v) In the event Lender  determines,  in connection with a Securitization,
that the financial statements required in order to comply with Regulation S-X or
Legal Requirements are other than as provided herein,  then  notwithstanding the
provisions  of this Section,  Lender may request,  and Borrower  shall  promptly
provide,  such  combination  of Acquired  Property  Statements  and/or  Standard
Statements as may be necessary for such compliance.

      (vi)  Any  other  or  additional  financial   statements,   or  financial,
statistical  or  operating  information,   as  shall  be  required  pursuant  to
Regulation  S-X or other Legal  Requirements  in connection  with any Disclosure
Document or any filing under or pursuant to the Exchange Act in connection  with
or relating to a  Securitization  (hereinafter  an "Exchange  Act Filing") or as
shall  otherwise be reasonably  requested by Lender to meet  disclosure,  rating
agency or marketing requirements.


      All  financial  statements  provided by Borrower  pursuant to this Section
9.1(c)  shall  be  prepared  in  accordance   with  GAAP,  and  shall  meet  the
requirements  of Regulation S-X and other  applicable  Legal  Requirements.  All
financial  statements  relating  to a  Fiscal  Year  shall  be  audited  by  the
independent   accountants  in  accordance  with  generally   accepted   auditing
standards, Regulation S-X and all other applicable Legal Requirements,  shall be
accompanied  by the  manually  executed  report of the  independent  accountants
thereon,  which report shall meet the  requirements  of  Regulation  S-X and all
other applicable Legal Requirements, and shall be further


                                      -66-
<PAGE>

accompanied  by  a  manually   executed   written  consent  of  the  independent
accountants,  in form and substance  acceptable  to Lender,  to the inclusion of
such financial statements in any Disclosure Document and any Exchange Act Filing
and to the use of the name of such independent  accountants and the reference to
such  independent  accountants  as  "experts"  in any  Disclosure  Document  and
Exchange  Act  Filing,  all of which  shall be  provided at the same time as the
related  financial  statements are required to be provided.  All other financial
statements shall be certified by the chief financial officer of Borrower,  which
certification  shall state that such financial  statements meet the requirements
set forth in the first sentence of this paragraph.

      Section 9.2 Securitization Indemnification.

      (a) Borrower  understands that information  provided to Lender by Borrower
and its agents,  counsel  and  representatives  may be  included  in  disclosure
documents in connection with the Securitization,  including, without limitation,
an offering circular,  a prospectus,  prospectus  supplement,  private placement
memorandum or other offering  document (each, an "Disclosure  Document") and may
also be included in filings with the Securities and Exchange Commission pursuant
to the  Securities  Act of 1933,  as  amended  (the  "Securities  Act"),  or the
Securities and Exchange Act of 1934, as amended (the "Exchange Act"), and may be
made  available to investors or  prospective  investors in the  Securities,  the
Rating Agencies, and service providers relating to the Securitization.

      (b) Borrower  shall provide in  connection  with each of (i) a preliminary
and a final  private  placement  memorandum  or  (ii) a  preliminary  and  final
prospectus or prospectus supplement,  as applicable, an agreement (A) certifying
that Borrower has examined  such  Disclosure  Documents  specified by Lender and
that  each  such  Disclosure  Document,  as it  relates  to  Borrower,  Borrower
Affiliates, the Property and Manager, does not contain any untrue statement of a
material  fact or omit to state a material  fact  necessary in order to make the
statements made, in the light of the  circumstances  under which they were made,
not misleading,  (B) indemnifying  Lender (and for purposes of this Section 9.2,
Lender  hereunder  shall include its officers and  directors),  the Affiliate of
Morgan  Stanley  Dean  Witter  & Co.  ("Morgan  Stanley")  that  has  filed  the
registration   statement  relating  to  the  Securitization  (the  "Registration
Statement"),  each of its  directors,  each of its  officers who have signed the
Registration  Statement and each Person that  controls the Affiliate  within the
meaning of Section 15 of the  Securities  Act or Section 20 of the  Exchange Act
(collectively,  the "Morgan Stanley Group") , and Morgan Stanley,  and any other
placement agent or underwriter with respect to the Securitization, each of their
respective  directors and each Person who controls  Morgan  Stanley or any other
placement  agent  or  underwriter  within  the  meaning  of  Section  15 of  the
Securities  Act  and  Section  20  of  the  Exchange  Act   (collectively,   the
"Underwriter   Group")  for  any   losses,   claims,   damages  or   liabilities
(collectively,  the  "Liabilities") to which Lender, the Morgan Stanley Group or
the Underwriter Group may become subject insofar as the Liabilities arise out of
or are based  upon any  untrue  statement  or alleged  untrue  statement  of any
material fact contained in the sections of such Disclosure Documents required to
be  reviewed  by  Borrower  or arise out of or are based  upon the  omission  or
alleged  omission to state  therein a material fact required to be stated in the
sections  of such  Disclosure  Documents  required to be reviewed by Borrower or
necessary  in order to make the  statements  in such  sections,  in light of the
circumstances  under which they were made,  not  misleading  and (C) agreeing to
reimburse Lender,  the Morgan Stanley Group and/or the Underwriter Group for any
legal or other expenses


                                      -67-
<PAGE>

reasonably  incurred by Lender,  the Morgan  Stanley  Group and the  Underwriter
Group in connection with  investigating or defending the Liabilities;  provided,
however,  that Borrower will be liable in any such case under clauses (B) or (C)
above only to the extent that any such loss claim,  damage or  liability  arises
out of or is based upon any such untrue  statement  or omission  made therein in
reliance upon and in conformity  with  information  furnished to Lender by or on
behalf of Borrower in connection with the preparation of the Disclosure Document
or in  connection  with the  underwriting  or  closing  of the Loan,  including,
without limitation,  financial statements of Borrower,  operating statements and
rent rolls with respect to the Property.  This  indemnity  agreement  will be in
addition to any liability which Borrower may otherwise have.

      (c) In connection with Exchange Act Filings,  Borrower shall (i) indemnify
Lender,  the Morgan Stanley Group and the  Underwriter  Group for Liabilities to
which  Lender,  the Morgan  Stanley  Group or the  Underwriter  Group may become
subject insofar as the  Liabilities  arise out of or are based upon the omission
or alleged omission to state in any materials provided to Lender by or on behalf
of Borrower a material fact required to be stated in the Disclosure  Document in
order  to make  the  statements  in the  Disclosure  Document,  in  light of the
circumstances  under which they were made,  not  misleading  and (ii)  reimburse
Lender, the Morgan Stanley Group or the Underwriter Group for any legal or other
expenses  reasonably  incurred  by  Lender,  the  Morgan  Stanley  Group  or the
Underwriter Group in connection with defending or investigating the Liabilities.

      (d) Promptly after receipt by an indemnified  party under this Section 9.2
of notice of the commencement of any action,  such indemnified  party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section  9.2,  notify the  indemnifying  party in  writing  of the  commencement
thereof,  but the omission to so notify the indemnifying  party will not relieve
the indemnifying  party from any liability which the indemnifying party may have
to any indemnified  party hereunder  except to the extent that failure to notify
causes  prejudice  to the  indemnifying  party.  In the event that any action is
brought against any indemnified party, and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled,  jointly with
any other indemnifying  party, to participate therein and, to the extent that it
(or  they)  may elect by  written  notice  delivered  to the  indemnified  party
promptly after receiving the aforesaid  notice from such  indemnified  party, to
assume the defense thereof with counsel  satisfactory to such indemnified party.
After notice from the indemnifying  party to such  indemnified  party under this
Section 9.2, such  indemnified  party shall pay for any legal or other  expenses
subsequently  incurred by such indemnified  party in connection with the defense
thereof other than reasonable costs of investigation;  provided, however, if the
defendants  in any such  action  include  both  the  indemnified  party  and the
indemnifying  party and the indemnified  party shall have  reasonably  concluded
that  there are any legal  defenses  available  to it and/or  other  indemnified
parties  that  are  different  from or  additional  to  those  available  to the
indemnifying  party,  the  indemnified  party or parties shall have the right to
select  separate  counsel  to  assert  such  legal  defenses  and  to  otherwise
participate in the defense of such action on behalf of such indemnified party at
the cost of the indemnifying  party. The indemnifying  party shall not be liable
for the expenses of more than one separate  counsel unless an indemnified  party
shall have reasonably concluded that there may be legal defenses available to it
that are different from or additional to those available to another  indemnified
party.


                                      -68-
<PAGE>

      (e)  In  order  to  provide  for  just  and  equitable   contribution   in
circumstances in which the indemnity agreement provided for in Section 9.2(b) or
(c) is for any reason held to be  unenforceable  as to an  indemnified  party in
respect of any  losses,  claims,  damages or  liabilities  (or action in respect
thereof)  referred  to therein  which would  otherwise  be  indemnifiable  under
Section  9.2(b) or (c), the  indemnifying  party shall  contribute to the amount
paid or payable by the  indemnified  party as a result of such  losses,  claims,
damages or liabilities (or action in respect thereof);  provided,  however, that
no Person guilty of fraudulent  misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to  contribution  from any Person
who was not guilty of such  fraudulent  misrepresentation.  In  determining  the
amount of  contribution  to which  the  respective  parties  are  entitled,  the
following  factors shall be  considered:  (i) Morgan  Stanley's  and  Borrower's
relative knowledge and access to information  concerning the matter with respect
to which the claim was asserted; (ii) the opportunity to correct and prevent any
statement or omission; and (iii) any other equitable considerations  appropriate
in the  circumstances.  Lender and  Borrower  hereby  agree that it would not be
equitable if the amount of such  contribution were determined by pro rata or per
capita allocation.

      (f) The liabilities and obligations of both Borrower and Lender under this
Section 9.2 shall survive the termination of this Agreement and the satisfaction
and discharge of the Debt.

      X.    DEFAULTS

      Section 10.1 Event of Default.

      (a) Each of the  following  events  shall  constitute  an event of default
hereunder (an "Event of Default"):

      (i) if (A) any monthly  installment of principal and/or interest due under
the Note or the payment due on the Maturity Date is not paid when due or (B) any
other  portion of the Debt is not paid when due and such  non-payment  continues
for five (5) days following notice to Borrower that the same is due and payable;

      (ii) if any of the Taxes or Other Charges are not paid when due;

      (iii) if the Policies are not kept in full force and effect;

      (iv) if  Borrower  breaches or permits or suffers a breach of Article 6 of
the Mortgage;

      (v) if any  representation  or warranty made by Borrower  herein or in any
other Loan Document, or in any report, certificate, financial statement or other
instrument,  agreement or document  furnished to Lender shall have been false or
misleading in any material respect as of the date the representation or warranty
was made;

      (vi) if Fee Borrower, Leasehold Borrower, any SPC Party or Guarantor shall
make an assignment for the benefit of creditors;


                                      -69-
<PAGE>

      (vii) if a receiver,  liquidator  or trustee  shall be  appointed  for Fee
Borrower,  Leasehold  Borrower,  any SPC Party or Guarantor or if Fee  Borrower,
Leasehold  Borrower,  any SPC Party or Guarantor shall be adjudicated a bankrupt
or insolvent,  or if any petition for bankruptcy,  reorganization or arrangement
pursuant to federal  bankruptcy  law, or any similar federal or state law, shall
be filed by or  against,  consented  to,  or  acquiesced  in by,  Fee  Borrower,
Leasehold  Borrower,  any SPC Party or Guarantor,  or if any  proceeding for the
dissolution or liquidation of Fee Borrower, Leasehold Borrower, any SPC Party or
Guarantor  shall  be  instituted;   provided,   however,  if  such  appointment,
adjudication, petition or proceeding was involuntary and not consented to by Fee
Borrower,  Leasehold Borrower,  SPC Party or Guarantor,  upon the same not being
discharged, stayed or dismissed within thirty (30) days;

      (viii) if Borrower  attempts to assign its rights under this  Agreement or
any  of  the  other  Loan  Documents  or  any  interest  herein  or  therein  in
contravention of the Loan Documents;

      (ix) if any of the assumptions  contained in the Insolvency Opinion, or in
any other  non-consolidation  opinion delivered to Lender in connection with the
Loan, or in any other  non-consolidation  delivered subsequent to the closing of
the Loan, is or shall become untrue in any material respect;

      (x)  if  Borrower  breaches  any  representation,   warranty  or  covenant
contained in Section 3.1.24 hereof;

      (xi) if Borrower fails to comply with the covenants as to Prescribed  Laws
set forth in Section 4.1.1;

      (xii) if Borrower  breaches  any of the  negative  covenants  contained in
Section  4.2.12  hereof  or acts or  neglects  to act in such a manner  as to be
considered a default under the Operating Agreements;

      (xiii)  if  Guarantor  breaches  in any  material  respect  any  covenant,
warranty or representation contained in the Guaranty;

      (xiv) if (A) there  shall  occur any  default by  Leasehold  Borrower,  as
tenant under the Ground Lease,  in the  observance or  performance  of any term,
covenant or condition of the Ground Lease on the part of Leasehold Borrower,  to
be observed or performed  (unless  waived in writing by the  landlord  under the
Ground  Lease),  (B) if any one or more of the events  referred to in the Ground
Lease shall occur which would cause the Ground Lease to terminate without notice
or action by the  landlord  under the Ground  Lease or which  would  entitle the
landlord to terminate  the Ground Lease and the term thereof by giving notice to
Borrower,  as tenant thereunder  (unless waived in writing by the landlord under
the Ground Lease), (C) if the leasehold estate created by the Ground Lease shall
be  surrendered  or the Ground  Lease shall be  terminated  or canceled  for any
reason  or  under  any  circumstances  whatsoever  or (D)  if any of the  terms,
covenants  or  conditions  of the Ground  Lease shall in any manner be modified,
changed, supplemented,  altered, or amended without the consent of Lender except
as otherwise permitted by this Agreement;


                                      -70-
<PAGE>

      (xv) if any representation  made by Fee Borrower in Sections 3.1.42 and/or
3.1.43 is untrue in any material respect;

      (xvi) if Borrower  shall  continue to be in Default under any of the other
terms,  covenants or conditions of this  Agreement not specified in  subsections
(i) to (xv) above,  for ten (10) days after notice to Borrower  from Lender,  in
the case of any Default which can be cured by the payment of a sum of money,  or
for thirty (30) days after notice from Lender in the case of any other  Default;
provided,  however, that if such non-monetary Default is susceptible of cure but
cannot  reasonably be cured within such 30-day period and provided  further that
Borrower shall have commenced to cure such Default within such 30-day period and
thereafter  diligently and expeditiously  proceeds to cure the same, such 30-day
period shall be extended for such time as is  reasonably  necessary for Borrower
in the exercise of due diligence to cure such Default,  such  additional  period
not to exceed sixty (60) days plus time permitted for Excusable Delays; or

      (xvii) if there  shall be default  under any of the other  Loan  Documents
beyond any applicable cure periods contained in such Loan Documents,  whether as
to Borrower or the Property, or if any other such event shall occur or condition
shall  exist,  if the effect of such event or  condition  is to  accelerate  the
maturity  of any  portion  of the Debt or to  permit  Lender to  accelerate  the
maturity of all or any portion of the Debt.

      (b) Upon the  occurrence  of an Event of Default  (other  than an Event of
Default  described  in  clauses  (vi),  (vii) or (viii)  above)  and at any time
thereafter Lender may, in addition to any other rights or remedies  available to
it  pursuant  to this  Agreement  and the other Loan  Documents  or at law or in
equity, take such action,  without notice or demand, that Lender deems advisable
to protect and enforce its rights  against  Borrower and in and to the Property,
including,  without  limitation,  declaring the Debt to be  immediately  due and
payable, and Lender may enforce or avail itself of any or all rights or remedies
provided in the Loan  Documents  against  Borrower and the Property,  including,
without  limitation,  all rights or remedies  available at law or in equity; and
upon any Event of Default  described in clauses (vi), (vii) or (viii) above, the
Debt and all other  obligations  of Borrower  hereunder and under the other Loan
Documents shall  immediately and automatically  become due and payable,  without
notice or demand,  and  Borrower  hereby  expressly  waives  any such  notice or
demand,  anything contained herein or in any other Loan Document to the contrary
notwithstanding.

      Section 10.2 Remedies.

      (a) Upon the occurrence of an Event of Default,  all or any one or more of
the rights,  powers,  privileges and other remedies  available to Lender against
Borrower under this  Agreement or any of the other Loan  Documents  executed and
delivered by, or applicable to, Borrower or at law or in equity may be exercised
by Lender at any time and from  time to time,  whether  or not all or any of the
Debt shall be declared  due and  payable,  and whether or not Lender  shall have
commenced any foreclosure  proceeding or other action for the enforcement of its
rights  and  remedies  under  any of the  Loan  Documents  with  respect  to the
Property.  Any such actions taken by Lender shall be cumulative  and  concurrent
and may be pursued independently,  singly, successively,  together or otherwise,
at such time and in such order as Lender may  determine in its sole  discretion,
to the fullest extent permitted by law, without impairing or otherwise affecting
the other rights and remedies of Lender  permitted by law, equity or contract


                                      -71-
<PAGE>

or as set forth  herein or in the other Loan  Documents.  Without  limiting  the
generality of the foregoing,  if an Event of Default is continuing (i) Lender is
not subject to any "one action" or "election of remedies" law or rule,  and (ii)
all liens and other  rights,  remedies or  privileges  provided to Lender  shall
remain in full force and effect until Lender has  exhausted  all of its remedies
against the Property and the Mortgage has been foreclosed, sold and/or otherwise
realized upon in satisfaction of the Debt or the Debt has been paid in full.

      (b) To the extent permitted by applicable law, Lender shall have the right
from time to time to partially  foreclose the Mortgage in any manner and for any
amounts  secured by the Mortgage then due and payable as determined by Lender in
its sole discretion including,  without limitation, the following circumstances:
(i) in the event Borrower  defaults  beyond any  applicable  grace period in the
payment of one or more scheduled payments of principal and interest,  Lender may
foreclose the Mortgage to recover such delinquent payments, or (ii) in the event
Lender elects to accelerate less than the entire  outstanding  principal balance
of the Loan,  Lender  may  foreclose  the  Mortgage  to  recover  so much of the
principal  balance  of the Loan as Lender  may  accelerate  and such  other sums
secured by the Mortgage as Lender may elect. Notwithstanding one or more partial
foreclosures,  the  Property  shall  remain  subject to the  Mortgage  to secure
payment of sums secured by the Mortgage and not previously recovered.

      (c)  Lender  shall  have the right from time to time to sever the Note and
the other Loan  Documents into one or more separate  notes,  mortgages and other
security  documents  (the "Severed Loan  Documents")  in such  denominations  as
Lender shall  determine in its sole  discretion  for purposes of evidencing  and
enforcing its rights and remedies provided hereunder. Borrower shall execute and
deliver to Lender from time to time,  promptly  after the  request of Lender,  a
severance agreement and such other documents as Lender shall request in order to
effect  the  severance  described  in the  preceding  sentence,  all in form and
substance  reasonably  satisfactory to Lender.  Borrower  hereby  absolutely and
irrevocably  appoints  Lender as its true and lawful  attorney,  coupled with an
interest,  in its name and stead to make and execute all documents  necessary or
desirable to effect the  aforesaid  severance,  Borrower  ratifying all that its
said attorney shall do by virtue thereof;  provided,  however,  Lender shall not
make or execute any such  documents  under such power until three (3) days after
notice has been given to Borrower by Lender of Lender's  intent to exercise  its
rights  under  such  power.  Except  as may be  required  in  connection  with a
Securitization  pursuant  to  Section  9.1  hereof,  (i)  Borrower  shall not be
obligated  to pay  any  costs  or  expenses  incurred  in  connection  with  the
preparation,  execution,  recording or filing of the Severed Loan Documents, and
(ii)  the  Severed  Loan  Documents  shall  not  contain  any   representations,
warranties  or  covenants  not  contained  in the  Loan  Documents  and any such
representations  and warranties  contained in the Severed Loan Documents will be
given by Borrower only as of the Closing Date.

      (d) Any amounts  recovered  from the Property or any other  collateral for
the Loan after an Event of Default  may be applied by Lender  toward the payment
of any interest and/or  principal of the Loan and/or any other amounts due under
the Loan Documents in such order, priority and proportions as Lender in its sole
discretion shall determine.


                                      -72-
<PAGE>

      Section 10.3 Right to Cure Defaults.

      Lender may, but without any  obligation to do so and without  notice to or
demand on Borrower and without releasing Borrower from any obligation  hereunder
or being  deemed to have  cured  any Event of  Default  hereunder,  make,  do or
perform any  obligation of Borrower  hereunder in such manner and to such extent
as Lender may deem  necessary.  Lender is  authorized to enter upon the Property
for such purposes,  or appear in,  defend,  or bring any action or proceeding to
protect its interest in the Property for such purposes, and the cost and expense
thereof (including  reasonable  attorneys' fees to the extent permitted by law),
with  interest as provided in this Section 10.3,  shall  constitute a portion of
the Debt and shall be due and payable to Lender upon demand.  All such costs and
expenses  incurred by Lender in  remedying  such Event of Default or such failed
payment  or act or in  appearing  in,  defending,  or  bringing  any  action  or
proceeding  shall bear interest at the Default  Rate,  for the period after such
cost or expense was incurred into the date of payment to Lender.  All such costs
and expenses incurred by Lender together with interest thereon calculated at the
Default Rate shall be deemed to  constitute a portion of the Debt and be secured
by the liens,  claims and security  interests  provided to Lender under the Loan
Documents  and  shall be  immediately  due and  payable  upon  demand  by Lender
therefor.

      Section 10.4 Remedies Cumulative.

      The rights,  powers and remedies of Lender under this  Agreement  shall be
cumulative  and not  exclusive of any other right,  power or remedy which Lender
may  have  against  Borrower  pursuant  to  this  Agreement  or the  other  Loan
Documents, or existing at law or in equity or otherwise. Lender's rights, powers
and remedies may be pursued singly,  concurrently or otherwise, at such time and
in such order as Lender may determine in Lender's sole  discretion.  No delay or
omission  to  exercise  any  remedy,  right or power  accruing  upon an Event of
Default shall impair any such remedy,  right or power or shall be construed as a
waiver thereof,  but any such remedy,  right or power may be exercised from time
to time and as often as may be  deemed  expedient.  A waiver of one  Default  or
Event of Default with respect to Borrower  shall not be construed to be a waiver
of any  subsequent  Default  or Event of Default  by  Borrower  or to impair any
remedy, right or power consequent thereon.

      XI.   MISCELLANEOUS

      Section 11.1 Successors and Assigns.

      All covenants,  promises and agreements in this Agreement, by or on behalf
of Borrower, shall inure to the benefit of the legal representatives, successors
and assigns of Lender.

      Section 11.2 Lender's Discretion.

      Whenever pursuant to this Agreement Lender exercises any right given to it
to approve or disapprove,  or any  arrangement or term is to be  satisfactory to
Lender,  the decision of Lender to approve or  disapprove  or to decide  whether
arrangements or terms are satisfactory or not  satisfactory  shall (except as is
otherwise specifically herein provided) be in the sole


                                      -73-
<PAGE>

discretion   of  Lender  and  shall  be  final  and   conclusive.   Prior  to  a
Securitization,  whenever  pursuant to this  Agreement  the Rating  Agencies are
given any right to approve or  disapprove,  or any  arrangement or term is to be
satisfactory  to the  Rating  Agencies,  the  decision  of Lender to  approve or
disapprove or to decide whether  arrangements  or terms are  satisfactory or not
satisfactory, based upon Lender's determination of Rating Agency criteria, shall
be substituted therefore.

      Section 11.3 Governing Law.

      (A) THIS  AGREEMENT WAS  NEGOTIATED IN THE STATE OF NEW YORK, THE LOAN WAS
MADE BY LENDER  AND  ACCEPTED  BY  BORROWER  IN THE  STATE OF NEW YORK,  AND THE
PROCEEDS OF THE LOAN DELIVERED  PURSUANT HERETO WERE DISBURSED FROM THE STATE OF
NEW YORK,  WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL  RELATIONSHIP  TO THE
PARTIES AND TO THE UNDERLYING  TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS,
INCLUDING,  WITHOUT  LIMITING  THE  GENERALITY  OF  THE  FOREGOING,  MATTERS  OF
CONSTRUCTION,  VALIDITY AND PERFORMANCE,  THIS AGREEMENT, THE NOTE AND THE OTHER
LOAN DOCUMENTS AND THE  OBLIGATIONS  ARISING  HEREUNDER AND THEREUNDER  SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE  TO CONTRACTS  MADE AND  PERFORMED IN SUCH STATE  (WITHOUT  REGARD TO
PRINCIPLES OF CONFLICT OF LAWS) AND ANY  APPLICABLE  LAW OF THE UNITED STATES OF
AMERICA,  EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION,  PERFECTION,
AND ENFORCEMENT OF THE LIEN AND SECURITY  INTEREST  CREATED  PURSUANT HERETO AND
PURSUANT  TO THE OTHER  LOAN  DOCUMENTS  (OTHER  THAN WITH  RESPECT TO LIENS AND
SECURITY  INTERESTS  IN PROPERTY  WHOSE  PERFECTION  AND  PRIORITY IS COVERED BY
ARTICLE 9 OF THE UCC (INCLUDING,  WITHOUT LIMITATION,  THE ACCOUNTS) WHICH SHALL
BE GOVERNED BY THE LAW OF THE JURISDICTION APPLICABLE THERETO IN ACCORDANCE WITH
SECTIONS  9-301  THROUGH 9-307 OF THE UCC AS IN EFFECT IN THE STATE OF NEW YORK)
SHALL BE GOVERNED BY AND  CONSTRUED  ACCORDING  TO THE LAW OF THE STATE IN WHICH
THE  PROPERTY IS  LOCATED,  IT BEING  UNDERSTOOD  THAT,  TO THE  FULLEST  EXTENT
PERMITTED  BY THE LAW OF SUCH  STATE,  THE LAW OF THE  STATE OF NEW  YORK  SHALL
GOVERN THE CONSTRUCTION,  VALIDITY AND  ENFORCEABILITY OF ALL LOAN DOCUMENTS AND
ALL OF THE OBLIGATIONS  ARISING  HEREUNDER OR THEREUNDER.  TO THE FULLEST EXTENT
PERMITTED BY LAW,  BORROWER HEREBY  UNCONDITIONALLY  AND IRREVOCABLY  WAIVES ANY
CLAIM TO ASSERT THAT THE LAW OF ANY OTHER  JURISDICTION  GOVERNS THIS AGREEMENT,
THE NOTE AND THE OTHER  LOAN  DOCUMENTS,  AND THIS  AGREEMENT,  THE NOTE AND THE
OTHER LOAN DOCUMENTS  SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE  WITH THE
LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW EXCEPT AS SPECIFICALLY SET FORTH ABOVE.


                                      -74-
<PAGE>

      (B) ANY  LEGAL  SUIT,  ACTION OR  PROCEEDING  AGAINST  LENDER OR  BORROWER
ARISING  OUT OF OR  RELATING  TO  THIS  AGREEMENT  MAY  AT  LENDER'S  OPTION  BE
INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK,  COUNTY OF NEW
YORK,  PURSUANT TO SECTION  5-1402 OF THE NEW YORK GENERAL  OBLIGATIONS  LAW AND
BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE
AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER
HEREBY  IRREVOCABLY  SUBMITS TO THE  JURISDICTION OF ANY SUCH COURT IN ANY SUIT,
ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT:

                  CORPORATION SERVICE COMPANY
                  1177 AVENUE OF THE AMERICAS
                  17TH FLOOR
                  NEW YORK, NEW YORK  10036

      AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF
ANY AND ALL PROCESS  WHICH MAY BE SERVED IN ANY SUCH SUIT,  ACTION OR PROCEEDING
IN ANY FEDERAL OR STATE COURT IN NEW YORK,  NEW YORK, AND AGREES THAT SERVICE OF
PROCESS  UPON SAID AGENT AT SAID  ADDRESS  AND  WRITTEN  NOTICE OF SAID  SERVICE
MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN
EVERY  RESPECT  EFFECTIVE  SERVICE OF PROCESS UPON  BORROWER,  IN ANY SUCH SUIT,
ACTION OR  PROCEEDING  IN THE STATE OF NEW YORK.  BORROWER (I) SHALL GIVE PROMPT
NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER,  (II)
MAY AT ANY TIME AND FROM TIME TO TIME  DESIGNATE A SUBSTITUTE  AUTHORIZED  AGENT
WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE
DESIGNATED  AS THE PERSON AND ADDRESS FOR SERVICE OF  PROCESS),  AND (III) SHALL
PROMPTLY  DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED  AGENT CEASES TO HAVE AN
OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.

      Section 11.4 Modification, Waiver in Writing.

      No modification, amendment, extension, discharge, termination or waiver of
any provision of this  Agreement or of any other Loan  Document,  nor consent to
any departure by Borrower therefrom,  shall in any event be effective unless the
same  shall be in a writing  signed by the party  against  whom  enforcement  is
sought,  and then such waiver or consent shall be effective only in the specific
instance,  and for the purpose,  for which given.  Except as otherwise expressly
provided herein, no notice to, or demand on Borrower,  shall entitle Borrower to
any  other  or  future   notice  or  demand  in  the  same,   similar  or  other
circumstances.


                                      -75-
<PAGE>

      Section 11.5 Delay Not a Waiver.

      Neither any failure nor any delay on the part of Lender in insisting  upon
strict performance of any term, condition,  covenant or agreement, or exercising
any  right,  power,  remedy or  privilege  hereunder,  or under  any other  Loan
Document, shall operate as or constitute a waiver thereof, nor shall a single or
partial exercise thereof preclude any other future exercise,  or the exercise of
any other right,  power, remedy or privilege.  In particular,  and not by way of
limitation,  by accepting payment after the due date of any amount payable under
this  Agreement or any other Loan  Document,  Lender shall not be deemed to have
waived any right either to require  prompt payment when due of all other amounts
due under this  Agreement or the other Loan  Documents,  or to declare a default
for failure to effect prompt payment of any such other amount. Lender shall have
the right to waive or reduce any time  periods  that Lender is entitled to under
the Loan Documents in its sole and absolute discretion.

      Section 11.6 Notices.

      All   notices,   demands,   requests,   consents,   approvals   or   other
communications  (any of the  foregoing,  a  "Notice")  required,  permitted,  or
desired to be given  hereunder  shall be in writing sent by telefax (with answer
back acknowledged) or by registered or certified mail,  postage prepaid,  return
receipt requested, or delivered by hand or reputable overnight courier addressed
to the party to be so notified at its address  hereinafter set forth, or to such
other  address  as such  party may  hereafter  specify  in  accordance  with the
provisions  of this  Section  11.6.  Any  Notice  shall be  deemed  to have been
received:  (a) three (3) days after the date such  Notice is mailed,  (b) on the
date of  sending  by telefax if sent  during  business  hours on a Business  Day
(otherwise  on the next  Business  Day),  (c) on the date of delivery by hand if
delivered  during  business  hours  on a  Business  Day  (otherwise  on the next
Business  Day),  and  (d) on the  next  Business  Day if  sent  by an  overnight
commercial courier, in each case addressed to the parties as follows::

      If to Lender:        Morgan Stanley Mortgage Capital Inc.
                           1221 Avenue of the Americas, 27th Floor
                           New York, New York  10020
                           Attention:  James Flaum and Kevin Swartz
                           Facsimile No. (212) 762-9494

      with a copy to:      Cadwalader, Wickersham & Taft LLP
                           100 Maiden Lane
                           New York, New York  10038
                           Attention: John M. Zizzo, Esq.
                           Facsimile No. (212) 504-6666

      If to Borrower:      JG Elizabeth, LLC and N.J. Metromall
                           Urban Renewal, Inc.
                           c/o Glimcher Properties Limited Partnership
                           150 East Gay Street
                           Columbus, Ohio 43215
                           Attention: George A. Schmidt, Executive
                           Vice President
                           Facsimile No. (614) 621-9311


                                      -76-
<PAGE>

      with a copy to:      Squire Sanders & Dempsey L.L.P.
                           1300 Huntington Center
                           41 South High Street
                           Columbus, Ohio 43215-6197
                           Attention: Kim A. Rieck, Esq.
                           Facsimile No. (614) 365-2499

      Section 11.7 Trial by Jury.

      BORROWER AND LENDER EACH HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY
ISSUE  TRIABLE OF RIGHT BY JURY,  AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO
THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR  HEREAFTER  EXIST WITH REGARD TO THE
LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION
THEREWITH.  THIS  WAIVER  OF  RIGHT TO  TRIAL  BY JURY IS  GIVEN  KNOWINGLY  AND
VOLUNTARILY  BY BORROWER AND LENDER,  AND IS INTENDED TO ENCOMPASS  INDIVIDUALLY
EACH  INSTANCE  AND EACH  ISSUE AS TO WHICH THE  RIGHT TO A TRIAL BY JURY  WOULD
OTHERWISE  ACCRUE.  EACH  PARTY  IS  HEREBY  AUTHORIZED  TO  FILE A COPY OF THIS
PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER.

      Section 11.8 Headings.

      The  Article  and/or  Section  headings  and the Table of Contents in this
Agreement are included  herein for  convenience  of reference only and shall not
constitute a part of this Agreement for any other purpose.

      Section 11.9 Severability.

      Wherever  possible,  each provision of this Agreement shall be interpreted
in such manner as to be  effective  and valid under  applicable  law, but if any
provision of this Agreement  shall be prohibited by or invalid under  applicable
law, such provision  shall be  ineffective to the extent of such  prohibition or
invalidity,  without  invalidating  the  remainder  of  such  provision  or  the
remaining provisions of this Agreement.

      Section 11.10 Preferences.

      Lender shall have the continuing  and exclusive  right to apply or reverse
and reapply any and all  payments by Borrower to any portion of the  obligations
of Borrower  hereunder.  To the extent  Borrower  makes a payment or payments to
Lender,  which  payment  or  proceeds  or  any  part  thereof  are  subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to a trustee,  receiver or any other party under any  bankruptcy  law,
state or federal law, common law or equitable cause, then, to the extent of such
payment or proceeds received, the obligations hereunder or part thereof intended
to be satisfied


                                      -77-
<PAGE>

shall be revived and  continue in full force and effect,  as if such  payment or
proceeds had not been received by Lender.

      Section 11.11 Waiver of Notice.

      Borrower  shall not be entitled  to any  notices of any nature  whatsoever
from Lender except with respect to matters for which this Agreement or the other
Loan Documents  specifically  and expressly  provide for the giving of notice by
Lender to Borrower and except with respect to matters for which Borrower is not,
pursuant to  applicable  Legal  Requirements,  permitted  to waive the giving of
notice.  Borrower hereby  expressly  waives the right to receive any notice from
Lender  with  respect to any matter for which this  Agreement  or the other Loan
Documents do not specifically and expressly  provide for the giving of notice by
Lender to Borrower.

      Section 11.12 Remedies of Borrower.

      In the  event  that a claim or  adjudication  is made  that  Lender or its
agents have acted unreasonably or unreasonably delayed acting in any case where,
by law or under  this  Agreement  or the other  Loan  Documents,  Lender or such
agent,  as the case may be, has an  obligation  to act  reasonably  or promptly,
neither  Lender nor its agents  shall be liable for any  monetary  damages,  and
Borrower's  sole  remedy  shall be  limited  to  commencing  an  action  seeking
injunctive relief or declaratory judgment. Any action or proceeding to determine
whether  Lender has acted  reasonably  shall be determined by an action  seeking
declaratory judgment.

      Section 11.13 Expenses; Indemnity.

      (a) Borrower shall pay or, if Borrower fails to pay, reimburse Lender upon
receipt of notice from Lender, for all reasonable costs and expenses  (including
reasonable  attorneys' fees and disbursements)  incurred by Lender in connection
with (i)  Borrower's  ongoing  performance  of and  compliance  with  Borrower's
agreements  and  covenants  contained  in  this  Agreement  and the  other  Loan
Documents on its part to be performed or complied  with after the Closing  Date,
including,  without  limitation,  confirming  compliance with  environmental and
insurance  requirements;  (ii)  after  an  Event of  Default,  Lender's  ongoing
performance  of and compliance  with all  agreements and covenants  contained in
this  Agreement  and the other Loan  Documents  on its part to be  performed  or
complied  with  after the  Closing  Date;  (iii) the  negotiation,  preparation,
execution, delivery and administration of any consents,  amendments,  waivers or
other modifications to this Agreement and the other Loan Documents and any other
documents or matters  requested by Borrower;  (iv) the filing and recording fees
and expenses,  title  insurance and reasonable  fees and expenses of counsel for
providing to Lender all required  legal  opinions,  and other  similar  expenses
incurred,  in creating and perfecting  the Liens in favor of Lender  pursuant to
this  Agreement and the other Loan  Documents;  (v) enforcing or preserving  any
rights, in response to third party claims or the prosecuting or defending of any
action  or  proceeding  or other  litigation,  in each  case  against,  under or
affecting Borrower, this Agreement,  the other Loan Documents,  the Property, or
any other security given for the Loan; and (vi) enforcing any  obligations of or
collecting any payments due from Borrower under this  Agreement,  the other Loan
Documents or with respect to the Property or in connection  with any


                                      -78-
<PAGE>

refinancing  or  restructuring  of the credit  arrangements  provided under this
Agreement  in the nature of a  "work-out"  or of any  insolvency  or  bankruptcy
proceedings;  provided,  however,  that  Borrower  shall not be  liable  for the
payment  of any  such  costs  and  expenses  to the  extent  the  same  arise in
connection with any Securitization or by reason of the gross negligence, illegal
acts, fraud or willful misconduct of Lender. Any costs due and payable to Lender
may be paid to Lender pursuant to the Cash Management Agreement.

      (b) Borrower  shall  indemnify,  defend and hold  harmless  Lender and its
officers,  directors,  agents,  employees (and the successors and assigns of the
foregoing) (the "Lender  Indemnitees") from and against any and all liabilities,
obligations,  losses, damages,  penalties,  actions,  judgments,  suits, claims,
costs,  expenses and disbursements of any kind or nature whatsoever  (including,
without  limitation,  the reasonable fees and  disbursements  of counsel for the
Lender  Indemnitees  in connection  with any  investigative,  administrative  or
judicial  proceeding  commenced  or  threatened,   whether  or  not  the  Lender
Indemnitees  shall be  designated  a party  thereto),  that may be  imposed  on,
incurred by, or asserted  against the Lender  Indemnitees in any manner relating
to or arising out of (i) any breach by Borrower of its obligations under, or any
material misrepresentation by Borrower contained in, this Agreement or the other
Loan  Documents,  or (ii) the use or  intended  use of the  proceeds of the Loan
(collectively, the "Indemnified Liabilities");  provided, however, that Borrower
shall not have any obligation to the Lender Indemnitees  hereunder to the extent
that such Indemnified Liabilities arise from the gross negligence, illegal acts,
fraud or willful  misconduct of the Lender  Indemnitees.  To the extent that the
undertaking  to  indemnify,  defend and hold harmless set forth in the preceding
sentence  may be  unenforceable  because it violates  any law or public  policy,
Borrower  shall pay the maximum  portion that it is permitted to pay and satisfy
under  applicable  law to  the  payment  and  satisfaction  of  all  Indemnified
Liabilities incurred by the Lender Indemnitees.

      Section 11.14 Schedules Incorporated.

      The Schedules annexed hereto are hereby  incorporated  herein as a part of
this Agreement with the same effect as if set forth in the body hereof.

      Section 11.15 Offsets, Counterclaims and Defenses.

      Any assignee of Lender's  interest in and to this  Agreement and the other
Loan Documents shall take the same free and clear of all offsets,  counterclaims
or defenses which are unrelated to such  documents  which Borrower may otherwise
have against any assignor of such documents,  and no such unrelated counterclaim
or  defense  shall be  interposed  or  asserted  by  Borrower  in any  action or
proceeding  brought by any such assignee upon such  documents and any such right
to interpose or assert any such unrelated offset, counterclaim or defense in any
such action or proceeding is hereby expressly waived by Borrower.

      Section 11.16  No  Joint   Venture  or   Partnership;   No   Third   Party
                     Beneficiaries.

      (a) Borrower and Lender intend that the  relationships  created  hereunder
and under the other  Loan  Documents  be solely  that of  borrower  and  lender.
Nothing  herein or


                                      -79-
<PAGE>

therein is intended to create a joint venture,  partnership,  tenancy-in-common,
or joint tenancy  relationship  between  Borrower and Lender nor to grant Lender
any  interest  in the  Property  other than that of  mortgagee,  beneficiary  or
lender.

      (b) This Agreement and the other Loan Documents are solely for the benefit
of Lender and Borrower and nothing contained in this Agreement or the other Loan
Documents  shall be deemed to confer upon anyone  other than Lender and Borrower
any right to insist upon or to enforce the  performance  or observance of any of
the obligations  contained herein or therein.  All conditions to the obligations
of Lender to make the Loan hereunder are imposed solely and  exclusively for the
benefit  of  Lender  and  no  other  Person  shall  have   standing  to  require
satisfaction of such conditions in accordance with their terms or be entitled to
assume  that  Lender  will  refuse  to make the Loan in the  absence  of  strict
compliance  with  any or all  thereof  and  no  other  Person  shall  under  any
circumstances  be deemed to be a beneficiary of such  conditions,  any or all of
which may be freely  waived in whole or in part by Lender if, in  Lender's  sole
discretion, Lender deems it advisable or desirable to do so.

      Section 11.17 Publicity.

      All news releases,  publicity or advertising by Borrower or its Affiliates
through any media  intended to reach the general public which refers to the Loan
Documents or the financing  evidenced by the Loan Documents,  to Lender,  Morgan
Stanley Dean Witter Mortgage  Capital Inc., or any of their  Affiliates shall be
subject to the prior approval of Lender.

      Section 11.18 Waiver of Marshalling of Assets.

      To the  fullest  extent  permitted  by law,  Borrower,  for itself and its
successors  and  assigns,  waives all rights to a  marshalling  of the assets of
Borrower,  Borrower's partners and others with interests in Borrower, and of the
Property,  and  shall not  assert  any right  under any laws  pertaining  to the
marshalling  of  assets,  the sale in  inverse  order of  alienation,  homestead
exemption,  the  administration  of estates of  decedents,  or any other matters
whatsoever  to  defeat,  reduce  or affect  the  right of Lender  under the Loan
Documents to a sale of the Property for the  collection  of the Debt without any
prior or  different  resort  for  collection  or of the  right of  Lender to the
payment of the Debt out of the net  proceeds of the  Property in  preference  to
every other claimant whatsoever.

      Section 11.19 Waiver of Offsets/Defenses/Counterclaims.

      Borrower  hereby waives the right to assert a  counterclaim,  other than a
compulsory  counterclaim,  in any  action or  proceeding  brought  against it by
Lender or its agents or otherwise to offset any obligations to make the payments
required by the Loan Documents.

      Section 11.20 Conflict; Construction of Documents; Reliance.

      In the event of any conflict  between the provisions of this Agreement and
any of the other Loan Documents, the provisions of this Agreement shall control.
The parties hereto  acknowledge that they were represented by competent  counsel
in connection with the negotiation, drafting and execution of the Loan Documents
and that such Loan Documents shall not be subject to the principle of construing
their meaning against the party which drafted same.


                                      -80-
<PAGE>

Borrower acknowledges that, with respect to the Loan, Borrower shall rely solely
on its own judgment and  advisors in entering  into the Loan without  relying in
any manner on any statements,  representations  or  recommendations of Lender or
any parent,  subsidiary  or Affiliate of Lender.  Lender shall not be subject to
any limitation whatsoever in the exercise of any rights or remedies available to
it under any of the Loan Documents or any other agreements or instruments  which
govern the Loan by virtue of the  ownership by it or any parent,  subsidiary  or
Affiliate of Lender of any equity  interest any of them may acquire in Borrower,
and Borrower  hereby  irrevocably  waives the right to raise any defense or take
any action on the basis of the  foregoing  with respect to Lender's  exercise of
any such rights or remedies.  Borrower  acknowledges  that Lender engages in the
business  of real  estate  financings  and other real  estate  transactions  and
investments  which may be viewed as adverse to or competitive  with the business
of Borrower or its Affiliates.

      Section 11.21 Brokers and Financial Advisors.

      Borrower hereby  represents that it has dealt with no financial  advisors,
brokers,  underwriters,  placement agents,  agents or finders in connection with
the  transactions  contemplated  by this Agreement  other than Lender.  Borrower
shall  indemnify,  defend and hold Lender  harmless from and against any and all
claims,  liabilities,  costs  and  expenses  of  any  kind  (including  Lender's
attorneys'  fees and expenses) in any way relating to or arising from a claim by
any Person that such Person acted on behalf of Borrower or Lender in  connection
with the transactions  contemplated herein. The provisions of this Section 11.21
shall survive the expiration  and  termination of this Agreement and the payment
of the Debt.

      Section 11.22 Exculpation.

      Subject  to  the  qualifications  below,  Lender  shall  not  enforce  the
liability  and  obligation  of Borrower  to perform and observe the  obligations
contained in the Note, this Agreement,  the Mortgage or the other Loan Documents
by any action or proceeding  wherein a money  judgment  shall be sought  against
Borrower,  except  that  Lender may bring a  foreclosure  action,  an action for
specific  performance  or any other  appropriate  action or proceeding to enable
Lender to enforce and realize upon its interest under the Note,  this Agreement,
the Mortgage and the other Loan Documents, or in the Property, the Rents, or any
other  collateral  given to Lender  pursuant  to the Loan  Documents;  provided,
however,  that, except as specifically provided herein, any judgment in any such
action or proceeding shall be enforceable against Borrower only to the extent of
Borrower's  interest in the Property,  in the Rents and in any other  collateral
given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage
and the other Loan  Documents,  shall not sue for, seek or demand any deficiency
judgment against Borrower in any such action or proceeding under or by reason of
or under or in connection  with the Note,  this  Agreement,  the Mortgage or the
other Loan  Documents.  The provisions of this Section shall not,  however,  (a)
constitute  a waiver,  release or  impairment  of any  obligation  evidenced  or
secured  by any of the Loan  Documents;  (b)  impair the right of Lender to name
Borrower as a party  defendant  in any action or suit for  foreclosure  and sale
under the Mortgage;  (c) affect the validity or  enforceability  of any guaranty
made in  connection  with the Loan or any of the rights and  remedies  of Lender
thereunder;  (d)  impair  the right of Lender to  obtain  the  appointment  of a
receiver; (e) impair the enforcement of the Assignment of Leases; (f) constitute
a prohibition  against Lender to seek a deficiency  judgment against Borrower in
order to fully realize on any


                                      -81-
<PAGE>

security given by Borrower in connection  with the Loan or to commence any other
appropriate  action or  proceeding  in order for Lender to exercise its remedies
against  such  security;  or (g)  constitute  a waiver of the right of Lender to
enforce  the  liability  and  obligation  of  Borrower,  by  money  judgment  or
otherwise, to the extent of any loss, damage, cost, expense, liability, claim or
other  obligation  incurred  by  Lender  (including  attorneys'  fees and  costs
reasonably incurred) arising out of or in connection with the following:

            (i)  fraud  or  intentional  misrepresentation  by  Borrower  or any
      guarantor in connection with the Loan;

            (ii)  the  willful  misconduct  of  Borrower  or  any  guarantor  in
      connection with the Loan;

            (iii)  the  breach  of any  representation,  warranty,  covenant  or
      indemnification  provision  in  the  Environmental  Indemnity  or  in  the
      Mortgage concerning  environmental laws, hazardous substances and asbestos
      and any indemnification of Lender with respect thereto in either document;

            (iv) the  wrongful  removal  or  destruction  of any  portion of the
      Property after an Event of Default that adversely affects the value of the
      Property;

            (v)  the  misapplication  or  conversion  by  Borrower  of  (A)  any
      insurance  proceeds paid by reason of any loss,  damage or  destruction to
      the Property,  (B) any awards or other amounts received in connection with
      the  condemnation  of all or a portion of the  Property,  or (C) any Rents
      following an Event of Default;

            (vi) failure to pay charges for labor or materials or other  charges
      that can create Liens on any portion of the Property;

            (vii) any security deposits,  advance deposits or any other deposits
      collected  with respect to the Property  which are not delivered to Lender
      upon a foreclosure  of the Property or action in lieu  thereof,  except to
      the extent any such security  deposits were applied in accordance with the
      terms and conditions of any of the Leases;

            (viii)  Borrower's  indemnifications  of Lender set forth in Section
      9.2 hereof;

            (ix) the first full monthly  payment of principal and interest under
      the Note is not paid when due; or

            (x)  failure of Borrower to (A) permit  on-site  inspections  of the
      Property, (B) provide financial information,  (C) maintain its status as a
      single  purpose  entity or (D)  appoint a new  property  manager  upon the
      request of Lender  after an Event of Default,  each as required by, and in
      accordance  with the terms  and  provisions  of,  this  Agreement  and the
      Mortgage.

      Notwithstanding  anything to the contrary in this  Agreement,  the Note or
any of the Loan  Documents,  (A) Lender  shall not be deemed to have  waived any
right which Lender


                                      -82-
<PAGE>

may have under Section 506(a),  506(b),  1111(b) or any other  provisions of the
U.S.  Bankruptcy  Code to file a claim  for the  full  amount  of the Debt or to
require that all  collateral  shall  continue to secure all of the Debt owing to
Lender in accordance  with the Loan  Documents,  and (B) the Debt shall be fully
recourse  to Borrower in the event that (i)  Borrower  fails to obtain  Lender's
prior consent to any  subordinate  mortgage  financing or other  voluntary  Lien
encumbering the Property in connection with such subordinate mortgage financing;
(ii)  Borrower  fails  to  obtain  Lender's  prior  consent  to any  assignment,
transfer,  or conveyance of the Property or any interest  therein as required by
the Mortgage or this Agreement; (iii) Fee Borrower or Leasehold Borrower files a
voluntary  petition  under the  Bankruptcy  code or any other  Federal  or state
bankruptcy  or  insolvency  law;  (iv)  an  Affiliate,   officer,  director,  or
representative  which controls,  directly or indirectly,  either Fee Borrower or
Leasehold  Borrower  files,  or joins in the filing of, an involuntary  petition
against Fee Borrower or Leasehold Borrower, as applicable,  under the Bankruptcy
Code or any other Federal or state  bankruptcy or insolvency law, or solicits or
causes  to be  solicited  petitioning  creditors  for any  involuntary  petition
against  either Fee  Borrower or  Leasehold  Borrower  from any Person;  (v) Fee
Borrower  or  Leasehold  Borrower  files an answer  consenting  to or  otherwise
acquiescing in or joining in any  involuntary  petition filed against it, by any
other Person under the Bankruptcy Code or any other Federal or state  bankruptcy
or insolvency law, or solicits or causes to be solicited  petitioning  creditors
for any  involuntary  petition  from any Person;  (vi) any  Affiliate,  officer,
director,  or  representative  which  controls  either Fee Borrower or Leasehold
Borrower  consents  to or  acquiesces  in or  joins  in an  application  for the
appointment of a custodian,  receiver,  trustee, or examiner for Fee Borrower or
Leasehold Borrower, as applicable,  or any portion of the Property; or (vii) Fee
Borrower or Leasehold Borrower makes an assignment for the benefit of creditors,
or admits, in writing or in any legal proceeding, its insolvency or inability to
pay its debts as they become due.

      Section 11.23 Prior Agreements.

      This Agreement and the other Loan Documents  contain the entire  agreement
of the parties  hereto and thereto in respect of the  transactions  contemplated
hereby and thereby,  and all prior  agreements  among or between  such  parties,
whether oral or written,  including,  without  limitation,  the term sheet dated
March 17, 2004 between  Glimcher Realty Trust and Lender,  are superseded by the
terms of this Agreement and the other Loan Documents.

      Section 11.24 Servicer.

      (a) At the option of Lender,  the Loan may be serviced by a servicer  (the
"Servicer") selected by Lender and Lender may delegate all or any portion of its
responsibilities  under  this  Agreement  and the other  Loan  Documents  to the
Servicer pursuant to a servicing  agreement (the "Servicing  Agreement") between
Lender and Servicer.  Borrower  shall be responsible  for any reasonable  set-up
fees or any other  initial  costs  relating  to or arising  under the  Servicing
Agreement. In addition, Borrower shall be responsible for payment of the monthly
servicing fee due to the Servicer under the Servicing  Agreement;  provided that
Borrower shall only be responsible to pay for monthly  servicing fees due to the
Servicer to the extent of one (1) basis  point per annum  based on the  original
principal  amount of the Loan.  Servicer shall also be entitled to reimbursement
of costs and  expenses as and to the same extent (but  without  duplication)  as
Lender is entitled thereto under the applicable provisions of this Agreement and
the other Loan Documents.  Upon Borrower's written request, Lender shall deliver
to Borrower a


                                      -83-
<PAGE>

copy of the executed  servicing  agreement for the controlling  trust into which
the Loan or any portion thereof is contributed;  provided,  however, in no event
shall Borrower have any right to negotiate or comment on any terms or provisions
of such servicing agreement.

      (b) Upon notice  thereof  from  Lender,  Servicer  shall have the right to
exercise all rights of Lender and enforce all  obligations of Borrower  pursuant
to the provisions of this Agreement, the Note and the other Loan Documents.

      (c) Provided  Borrower shall have been given notice of Servicer's  address
by Lender, Borrower shall deliver to Servicer duplicate originals of all notices
and other  instruments  which  Borrower  may or shall be  required to deliver to
Lender pursuant to this Agreement, the Note and the other Loan Documents (and no
deliver of such notices or other  instruments  by Borrower shall be of any force
or effect unless delivered to Lender and Servicer as provided above).

      Section 11.25 Joint and Several Liability.

      If more than one Person has executed  this  Agreement as  "Borrower,"  the
representations,  covenants,  warranties  and  obligations  of all such  Persons
hereunder shall be joint and several.

      Section 11.26 Creation of Security Interest.

      Notwithstanding any other provision set forth in this Agreement, the Note,
the Mortgage or any of the other Loan Documents, Lender may at any time create a
security interest in all or any portion of its rights under this Agreement,  the
Note, the Mortgage and any other Loan Document  (including,  without limitation,
the advances  owing to it) in favor of any Federal  Reserve  Bank in  accordance
with Regulation A of the Board of Governors of the Federal Reserve System.

      Section 11.27 Assignments and Participations.

      (a) The Lender may assign to one or more  Persons  all or a portion of its
rights and obligations under this Loan Agreement.

      (b) Upon such  execution and delivery,  from and after the effective  date
specified in such Assignment and Acceptance,  the assignee thereunder shall be a
party hereto and have the rights and obligations of Lender hereunder;  provided,
however,  that Borrower  shall only be required to deal with one (1) Person with
respect to any consents, approvals or notices (including notices of any Default)
required from, or to, Lender pursuant to the Loan Documents (it being understood
that such Person may need to consult  with other  Persons that hold a portion of
Lender's  rights and  obligations  under the Loan or with the Rating Agencies in
connection with any such consent, approval or notice).

      (c) Lender may sell  participations to one or more Persons in or to all or
a portion of its rights and  obligations  under this Loan  Agreement;  provided,
however,  that (i) Lender's  obligations  under this Loan Agreement shall remain
unchanged,  (ii) Lender shall remain  solely  responsible  to the other  parties
hereto for the performance of such obligations,


                                      -84-
<PAGE>

(ii) Lender  shall  remain the holder of any Note for all  purposes of this Loan
Agreement  and (iv)  Borrower  shall  continue to deal solely and directly  with
Lender in connection with Lender's  rights and obligations  under and in respect
of this Loan Agreement and the other Loan Documents.

      (d) Lender may, in  connection  with any  assignment or  participation  or
proposed assignment or participation pursuant to this Section 11.27, disclose to
the assignee or participant or proposed assignee or participant, as the case may
be, any  information  relating to Borrower  or any of its  Affiliates  or to any
aspect of the Loan that has been  furnished to the Lender by or on behalf of the
Borrower or any of its Affiliates.

      Section 11.28 Set-Off.

      In  addition to any rights and  remedies  of Lender  provided by this Loan
Agreement  and by law, the Lender shall have the right,  without prior notice to
Borrower,  any such  notice  being  expressly  waived by  Borrower to the extent
permitted  by  applicable  law,  upon any  amount  becoming  due and  payable by
Borrower  hereunder  (whether  at  the  stated  maturity,   by  acceleration  or
otherwise) to set-off and  appropriate and apply against such amount any and all
deposits  (general or special,  time or demand,  provisional  or final),  in any
currency,  and any other credits,  indebtedness or claims,  in any currency,  in
each case  whether  direct or  indirect,  absolute  or  contingent,  matured  or
unmatured,  at any time held or owing by Lender or any  Affiliate  thereof to or
for the credit or the  account of  Borrower.  Lender  agrees  promptly to notify
Borrower after any such set-off and  application  made by Lender;  provided that
the failure to give such notice  shall not affect the  validity of such  set-off
and application.



                         [NO FURTHER TEXT ON THIS PAGE]



                                      -85-
<PAGE>


      IN WITNESS WHEREOF,  the parties hereto have caused this Loan Agreement to
be duly executed by their duly authorized representatives, all as of the day and
year first above written.


                  LENDER:


                  MORGAN STANLEY MORTGAGE CAPITAL INC., a
                  New York corporation


                  By: /s/ Kevin A. Swartz
                      ----------------------------------------
                      Name:  Kevin A. Swartz
                      Title: Vice President


                   [SIGNATURES CONTINUE OF THE FOLLOWING PAGE]


<PAGE>


                  FEE BORROWER:


                  N.J. METROMALL URBAN RENEWAL, INC., a New Jersey corporation


                  By: /s/ George A. Schmidt
                      ----------------------------------------
                      Name:  George A. Schmidt
                      Title: Executive Vice President


                  LEASEHOLD BORROWER:


                  JG ELIZABETH, LLC, a Delaware limited liability company

                  By: GLIMCHER JERSEY GARDENS, LLC, a Delaware limited
                      liability company, its sole member

                      By: JG MEZZANINE, LLC, a Delaware limited liability
                          company, its sole member

                          By: GLIMCHER PROPERTIES LIMITED PARTNERSHIP, a
                              Delaware limited partnership, its sole member

                              By: GLIMCHER PROPERTIES CORPORATION, a Delaware
                                  corporation, its sole general partner

                                  By: /s/ George A.Schmidt
                                      ----------------------------------------
                                      Name:  George A. Schmidt
                                      Title: Executive Vice President



<PAGE>


                                                                      SCHEDULE I
                                                                      ----------


                                    RENT ROLL







                                   Schedule I
<PAGE>


                                                                     SCHEDULE II
                                                                     -----------


                              INTENTIONALLY OMITTED






                                   Schedule II

<PAGE>


                                                                    SCHEDULE III
                                                                    ------------


                              ORGANIZATIONAL CHART







                                  Schedule III
<PAGE>


                                                                     SCHEDULE IV
                                                                     -----------


                      MORGAN STANLEY MORTGAGE CAPITAL INC.
                                    (Lender)


                                     - and -


                          ----------------------------
                                    (Tenant)


                -------------------------------------------------

                         SUBORDINATION, NON-DISTURBANCE
                            AND ATTORNMENT AGREEMENT

                -------------------------------------------------


                Dated:


                Location:


                County:


                PREPARED BY AND UPON
                RECORDATION RETURN TO:

                Cadwalader, Wickersham & Taft LLP
                100 Maiden Lane
                New York, New York 10038
                Attention:  John M. Zizzo, Esq.


================================================================================

<PAGE>


             SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
             -------------------------------------------------------

      THIS  SUBORDINATION,   NON-DISTURBANCE  AND  ATTORNMENT   AGREEMENT  (this
"Agreement") is made as of the ____ day of _______________,  20__ by and between
[LENDER],   having   an   address   at   [LENDER'S   ADDRESS]   ("Lender")   and
__________________________________________,     having     an     address     at
___________________________________________________________ ("Tenant").


                                    RECITALS:

      A.  Lender  has  made a loan in the  approximate  amount  of  $_______  to
Landlord  (defined  below),  which  Loan is  given  pursuant  to the  terms  and
conditions of that certain Loan Agreement dated ________________,  20__, between
Lender and Landlord (the "Loan  Agreement").  The Loan is evidenced by a certain
Promissory Note dated  ________________,  20__, given by Landlord to Lender (the
"Note")  and  secured  by  a  certain  Mortgage  and  Security  Agreement  dated
______________,  20__,  given by  Landlord  to Lender  (the  "Mortgage"),  which
encumbers the fee estate of Landlord in certain premises  described in Exhibit A
attached hereto (the "Property");

      B. Tenant  occupies a portion of the  Property  under and  pursuant to the
provisions   of  a  certain   lease  dated   _________________,   ____   between
_________________, as landlord ("Landlord") and Tenant, as tenant (the "Lease");
and

      C. Tenant has agreed to  subordinate  the Lease to the Mortgage and to the
lien thereof and Lender has agreed to grant  non-disturbance to Tenant under the
Lease on the terms and conditions hereinafter set forth.

                                   AGREEMENT:

      For good and valuable consideration, Tenant and Lender agree as follows:

      1.  Subordination.  Tenant  agrees  that the Lease  and all of the  terms,
covenants and provisions thereof and all rights,  remedies and options of Tenant
thereunder are and shall at all times continue to be subject and  subordinate in
all respects to the  Mortgage  and to the lien thereof and all terms,  covenants
and  conditions  set  forth in the  Mortgage  and the Loan  Agreement  including
without   limitation   all  renewals,   increases,   modifications,   spreaders,
consolidations,  replacements  and  extensions  thereof and to all sums  secured
thereby with the same force and effect as if the Mortgage and Loan Agreement had
been executed, delivered and (in the case of the Mortgage) recorded prior to the
execution and delivery of the Lease.

      2.  Non-Disturbance.  Lender  agrees that if any action or  proceeding  is
commenced  by Lender  for the  foreclosure  of the  Mortgage  or the sale of the
Property, Tenant shall not be named as a party therein unless such joinder shall
be required by law,  provided,  however,  such  joinder  shall not result in the
termination  of the  Lease or  disturb  the  Tenant's  possession  or use of the
premises demised thereunder,  and the sale of the Property in any such action or
proceeding  shall be made subject to all rights of Tenant under the Lease except
as set forth in Section 3 below,  provided that at the time of the  commencement
of any such action or

<PAGE>

proceeding  or at the time of any such sale or exercise of any such other rights
(a) the term of the  Lease  shall  have  commenced  pursuant  to the  provisions
thereof,  (b) Tenant shall be in  possession  of the premises  demised under the
Lease,  (c) the Lease shall be in full force and effect and (d) Tenant shall not
be in default under any of the terms, covenants or conditions of the Lease or of
this  Agreement  on  Tenant's  part  to be  observed  or  performed  beyond  the
expiration of any applicable notice or grace periods.

      3.  Attornment.  Lender and Tenant agree that upon the  conveyance  of the
Property by reason of the  foreclosure  of the Mortgage or the  acceptance  of a
deed or assignment in lieu of foreclosure  or otherwise,  the Lease shall not be
terminated or affected  thereby (at the option of the transferee of the Property
(the  "Transferee") if the conditions set forth in Section 2 above have not been
met at the time of such transfer) but shall continue in full force and effect as
a direct  lease  between  the  Transferee  and  Tenant  upon  all of the  terms,
covenants and conditions set forth in the Lease and in that event, Tenant agrees
to attorn to the Transferee and the Transferee shall accept such attornment, and
the  Transferee  shall not be (a)  obligated to complete any  construction  work
required to be done by Landlord  pursuant to the  provisions  of the Lease or to
reimburse  Tenant for any construction  work done by Tenant,  (b) liable (i) for
Landlord's  failure to perform any of its obligations under the Lease which have
accrued prior to the date on which the Transferee  shall become the owner of the
Property, or (ii) for any act or omission of Landlord, whether prior to or after
such foreclosure or sale, (c) required to make any repairs to the Property or to
the  premises  demised  under the Lease  required as a result of fire,  or other
casualty or by reason of condemnation  unless the Transferee  shall be obligated
under the Lease to make such repairs and shall have received sufficient casualty
insurance  proceeds or  condemnation  awards to finance the  completion  of such
repairs, (d) required to make any capital improvements to the Property or to the
premises demised under the Lease which Landlord may have agreed to make, but had
not  completed,  or to perform or provide any services not related to possession
or quiet enjoyment of the premises  demised under the Lease,  (e) subject to any
offsets,  defenses,  abatements  or  counterclaims  which shall have  accrued to
Tenant against Landlord prior to the date upon which the Transferee shall become
the  owner of the  Property,  (f)  liable  for the  return  of  rental  security
deposits, if any, paid by Tenant to Landlord in accordance with the Lease unless
such sums are actually  received by the Transferee,  (g) bound by any payment of
rents,  additional  rents or other sums which Tenant may have paid more than one
(1) month in advance  to any prior  Landlord  unless (i) such sums are  actually
received by the  Transferee or (ii) such  prepayment  shall have been  expressly
approved of by the Transferee, (h) bound to make any payment to Tenant which was
required  under  the  Lease,  or  otherwise,  to be made  prior  to the time the
Transferee  succeeded  to  Landlord's  interest,  (i)  bound  by  any  agreement
amending,  modifying or  terminating  the Lease made without the Lender's  prior
written  consent  prior to the  time  the  Transferee  succeeded  to  Landlord's
interest  or (j)  bound  by any  assignment  of the  Lease  or  sublease  of the
Property,  or any  portion  thereof,  made  prior  to the  time  the  Transferee
succeeded to Landlord's interest other than if pursuant to the provisions of the
Lease.

      4.  Notice to Tenant.  After  notice is given to Tenant by Lender that the
Landlord  is in default  under the Note and the  Mortgage  and that the  rentals
under the Lease should be paid to Lender pursuant to the terms of the assignment
of leases and rents  executed and  delivered by Landlord to Lender in connection
therewith,  Tenant shall  thereafter pay to Lender or as directed by the Lender,
all rentals and all other monies due or to become due to

<PAGE>

Landlord under the Lease and Landlord hereby expressly authorizes Tenant to make
such  payments  to Lender and hereby  releases  and  discharges  Tenant from any
liability to Landlord on account of any such payments.

      5. Lender's Consent. Tenant shall not, without obtaining the prior written
consent  of  Lender,  (a)  enter  into  any  agreement  amending,  modifying  or
terminating the Lease,  (b) prepay any of the rents,  additional  rents or other
sums due under the Lease for more than one (1) month in advance of the due dates
thereof,  (c)  voluntarily  surrender  the premises  demised  under the Lease or
terminate the Lease without cause or shorten the term thereof, or (d) assign the
Lease or sublet the premises  demised  under the Lease or any part thereof other
than  pursuant  to  the  provisions  of  the  Lease;  and  any  such  amendment,
modification,   termination,  prepayment,  voluntary  surrender,  assignment  or
subletting, without Lender's prior consent, shall not be binding upon Lender.

      6. Lender to Receive  Notices.  Tenant shall provide Lender with copies of
all written notices sent to Landlord pursuant to the Lease  simultaneously  with
the transmission of such notices to the Landlord.  Tenant shall notify Lender of
any default by Landlord under the Lease which would entitle Tenant to cancel the
Lease or to an  abatement of the rents,  additional  rents or other sums payable
thereunder,  and agrees that, notwithstanding any provisions of the Lease to the
contrary,  no notice of  cancellation  thereof or of such an abatement  shall be
effective  unless  Lender shall have received  notice of default  giving rise to
such  cancellation  or  abatement  and shall have failed  within sixty (60) days
after receipt of such notice to cure such default,  or if such default cannot be
cured  within  sixty (60) days,  shall have failed  within sixty (60) days after
receipt of such notice to commence and thereafter  diligently  pursue any action
necessary to cure such default.

      7. Notices. All notices or other written communications hereunder shall be
deemed to have been properly given (i) upon delivery,  if delivered in person or
by facsimile transmission with receipt acknowledged by the recipient thereof and
confirmed  by  telephone  by  sender,  (ii) one (1)  Business  Day  (hereinafter
defined) after having been  deposited for overnight  delivery with any reputable
overnight  courier  service,  or (iii) three (3) Business Days after having been
deposited in any post office or mail depository regularly maintained by the U.S.
Postal Service and sent by registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:

            If to Tenant:     ____________________________
                              ____________________________
                              ____________________________
                              Attention: _________________
                              Facsimile No. ______________

            If to Lender:     [Lender's Notice]


<PAGE>

            With a copy to:   Cadwalader, Wickersham & Taft LLP
                              100 Maiden Lane
                              New York, New York 10038
                              Attention: John M. Zizzo, Esq.
                              Facsimile No. (212) 504-6666

or addressed as such party may from time to time  designate by written notice to
the other parties.  For purposes of this Section,  the term "Business Day" shall
mean a day on which  commercial  banks are not  authorized or required by law to
close in New York, New York.

Either  party by  notice  to the other may  designate  additional  or  different
addresses for subsequent notices or communications.

      8.  Joint  and  Several  Liability.  If Tenant  consists  of more than one
person,  the obligations and liabilities of each such person  hereunder shall be
joint and several. This Agreement shall be binding upon and inure to the benefit
of Lender and Tenant and their respective successors and assigns.

      9.  Definitions.  The term  "Lender"  as used  herein  shall  include  the
successors  and  assigns of Lender and any person,  party or entity  which shall
become the owner of the Property by reason of a  foreclosure  of the Mortgage or
the acceptance of a deed or assignment in lieu of foreclosure or otherwise.  The
term "Landlord" as used herein shall mean and include the present landlord under
the Lease and such landlord's  predecessors and successors in interest under the
Lease, but shall not mean or include Lender.  The term "Property" as used herein
shall mean the Property,  the improvements now or hereafter  located thereon and
the estates therein encumbered by the Mortgage.

      10. No Oral  Modifications.  This  Agreement  may not be  modified  in any
manner or terminated  except by an instrument in writing executed by the parties
hereto.

      11. Governing Law. This Agreement shall be deemed to be a contract entered
into  pursuant to the laws of the State where the  Property is located and shall
in all respects be governed,  construed, applied and enforced in accordance with
the laws of the State where the Property is located.

      12.  Inapplicable  Provisions.  If any term, covenant or condition of this
Agreement is held to be invalid,  illegal or unenforceable in any respect,  this
Agreement shall be construed without such provision.

      13. Duplicate Originals;  Counterparts.  This Agreement may be executed in
any number of duplicate originals and each duplicate original shall be deemed to
be an original. This Agreement may be executed in several counterparts,  each of
which  counterparts  shall be deemed  an  original  instrument  and all of which
together shall constitute a single Agreement. The failure of any party hereto to
execute this Agreement,  or any counterpart hereof,  shall not relieve the other
signatories from their obligations hereunder.

<PAGE>

      14. Number and Gender. Whenever the context may require, any pronouns used
herein shall include the corresponding masculine,  feminine or neuter forms, and
the singular form of nouns and pronouns shall include the plural and vice versa.

      15. Transfer of Loan.  Lender may sell,  transfer and deliver the Note and
assign  the  Mortgage,  this  Agreement  and the  other  documents  executed  in
connection  therewith to one or more investors in the secondary  mortgage market
("Investors").  In  connection  with  such  sale,  Lender  may  retain or assign
responsibility  for servicing the loan,  including the Note, the Mortgage,  this
Agreement  and the other  documents  executed in  connection  therewith,  or may
delegate some or all of such  responsibility  and/or  obligations  to a servicer
including,  but not limited to, any subservicer or master servicer, on behalf of
the  Investors.  All  references to Lender herein shall refer to and include any
such servicer to the extent applicable.

      16. Further Acts. Tenant will, at the cost of Tenant,  and without expense
to Lender, do, execute,  acknowledge and deliver all and every such further acts
and  assurances  as Lender  shall,  from time to time,  require,  for the better
assuring and confirming  unto Lender the property and rights hereby intended now
or hereafter so to be, or for carrying  out the  intention or  facilitating  the
performance  of the  terms  of this  Agreement  or for  filing,  registering  or
recording this Agreement, or for complying with all applicable laws.

      17. Limitations on Lender's Liability.  Tenant acknowledges that Lender is
obligated  only to  Landlord  to make the Loan upon the terms and subject to the
conditions  set forth in the Loan  Agreement.  In no event  shall  Lender or any
purchaser  of the  Property at  foreclosure  sale or any grantee of the Property
named in a deed-in-lieu  of  foreclosure,  nor any heir,  legal  representative,
successor,  or assignee of Lender or any such purchaser or grantee (collectively
the Lender, such purchaser,  grantee,  heir, legal representative,  successor or
assignee,  the  "Subsequent  Landlord")  have  any  personal  liability  for the
obligations  of  Landlord  under the Lease and  should the  Subsequent  Landlord
succeed to the interests of the Landlord under the Lease, Tenant shall look only
to the estate and property of any such  Subsequent  Landlord in the Property for
the satisfaction of Tenant's remedies for the collection of a judgment (or other
judicial process)  requiring the payment of money in the event of any default by
any Subsequent  Landlord as landlord  under the Lease,  and no other property or
assets of any Subsequent  Landlord shall be subject to levy,  execution or other
enforcement  procedure for the  satisfaction of Tenant's  remedies under or with
respect to the Lease; provided,  however, that the Tenant may exercise any other
right or  remedy  provided  thereby  or by law in the  event of any  failure  by
Subsequent Landlord to perform any such material obligation.


<PAGE>


IN WITNESS  WHEREOF,  Lender and Tenant have duly executed this  Agreement as of
the date first above written.


                                       LENDER:


                                       [Lender]


                                       By:____________________________________
                                          Name:
                                          Title:


                                       TENANT:


                                       _______________________________
                                       a _________________


                                       By:____________________________________
                                          Name:
                                          Title:


The undersigned accepts and agrees to
the provisions of Section 4 hereof:

LANDLORD:

______________________, a
_______________________________________


By:____________________________________
    Name:
    Title:


<PAGE>


                                 ACKNOWLEDGMENTS


                     [INSERT STATE SPECIFIC ACKNOWLEDGMENT]



<PAGE>


                                    EXHIBIT A
                                    ---------


                                LEGAL DESCRIPTION


<PAGE>


                                                                      SCHEDULE V
                                                                      ----------


                  EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES
                                IN SECTION 3.1.22



A.    Free rent/Rent Abatements

      NONE

B.    Unpaid Tenant Improvement/Cash Allowances

      With  respect to the Lease with  American  Eagle  Outfitters  which Tenant
      opened for  business  on May 6, 2004,  the  amount of  $50,000.00  remains
      unpaid by Borrower  for  improvements  to the  premises  and is being held
      pending  completion  of all  punchlist  items  by the  contractor.  A cash
      allowance for reimbursement to the Tenant for its construction work in the
      amount of $228,400.00  remains unpaid pending  completion by Tenant of all
      of the requirements  set forth in the Construction  Allowance Rider to the
      Lease.







                                  Schedule VII