EXHIBIT 10.1
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                   THIRD AMENDED AND RESTATED CREDIT AGREEMENT

                           DATED AS OF AUGUST 6, 2004

                                      AMONG

                       RECKSON OPERATING PARTNERSHIP, L.P.

                       THE INSTITUTIONS FROM TIME TO TIME
                             PARTY HERETO AS LENDERS

                                       AND

                              JPMORGAN CHASE BANK,
                             AS ADMINISTRATIVE AGENT

                                      WITH

                     WELLS FARGO BANK, NATIONAL ASSOCIATION,
                              AS SYNDICATION AGENT

                          CITICORP NORTH AMERICA, INC.,
                      WACHOVIA BANK, NATIONAL ASSOCIATION,
                                       AND
                   DEUTSCHE BANK TRUST COMPANY AMERICAS, INC.,
                           AS CO-DOCUMENTATION AGENTS

                         KEYBANK, NATIONAL ASSOCIATION,
                              THE BANK OF NEW YORK,
                            THE BANK OF NOVA SCOTIA,
                       ING REAL ESTATE FINANCE (USA) LLC,
                                       AND
                         PNC BANK, NATIONAL ASSOCIATION,
                                  AS CO-AGENTS

                                       AND

                           J.P. MORGAN SECURITIES INC.
                                       AND
                         CITIGROUP GLOBAL MARKETS INC.,
                   AS CO-LEAD ARRANGERS AND JOINT BOOKRUNNERS

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

<PAGE>


ARTICLE I.            DEFINITIONS..............................................1

         1.1.     Certain Defined Terms........................................1

         1.2.     Computation of Time Periods.................................29

         1.3.     Accounting Terms............................................29

         1.4.     Other Terms.................................................29

         1.5.     Rules of Interpretation.....................................29

ARTICLE II.           AMOUNTS AND TERMS OF LOANS..............................29

         2.1.     Committed Loans.............................................29

         2.2.     Competitive Bid Loans.......................................32

         2.3.     Use of Proceeds of Loans and Letters of Credit..............35

         2.4.     Revolving Credit Termination Date; Maturity of
                  Competitive Bid Loans.......................................36

         2.5.     Maximum Credit Facility.....................................36

         2.6.     Authorized Agents...........................................36

ARTICLE III.          LETTERS OF CREDIT.......................................36

         3.1.     Letters of Credit...........................................36

         3.2.     Obligations Several.........................................42

ARTICLE IV.           PAYMENTS AND PREPAYMENTS................................42

         4.1.     Prepayments; Reductions in Revolving Credit Commitments.....42

         4.2.     Payments....................................................44

         4.3.     Promise to Repay; Evidence of Indebtedness..................47

ARTICLE V.            INTEREST AND FEES.......................................48

         5.1.     Interest on the Loans and other Obligations.................48

         5.2.     Special Provisions Governing Eurodollar Rate Loans and
                  Competitive Bid Loans.......................................50

         5.3.     Fees........................................................53

ARTICLE VI.           CONDITIONS TO LOANS AND LETTERS OF CREDIT...............55

         6.1.     Conditions Precedent to the Initial Loans and
                  Letters of Credit...........................................55

         6.2.     Conditions Precedent to All Subsequent Loans and
                  Letters of Credit...........................................56

ARTICLE VII.          REPRESENTATIONS AND WARRANTIES..........................57

         7.1.     Representations and Warranties of the Borrower..............57

<PAGE>


ARTICLE VIII.         REPORTING COVENANTS.....................................65

         8.1.     Borrower Accounting Practices...............................65

         8.2.     Financial Reports...........................................65

         8.3.     Events of Default...........................................68

         8.4.     Lawsuits....................................................68

         8.5.     Insurance...................................................68

         8.6.     ERISA Notices...............................................69

         8.7.     Environmental Notices.......................................70

         8.8.     Labor Matters...............................................71

         8.9.     Notices of Asset Sales and/or Acquisitions..................71

         8.10.    Notices of Joint Ventures...................................71

         8.11.    Tenant Notifications........................................72

         8.12.    Other Reports...............................................72

         8.13.    Other Information...........................................72

ARTICLE IX.           AFFIRMATIVE COVENANTS...................................72

         9.1.     Existence. Etc..............................................72

         9.2.     Powers; Conduct of Business.................................72

         9.3.     Compliance with Laws. Etc...................................73

         9.4.     Payment of Taxes and Claims.................................73

         9.5.     Insurance...................................................73

         9.6.     Inspection of Property, Books and Records Discussions.......73

         9.7.     ERISA Compliance............................................73

         9.8.     Maintenance of Property.....................................74

         9.9.     Company Status..............................................74

         9.10.    Ownership of Projects, Joint Ventures and Property..........74

         9.11.    Maintenance of Operating Accounts...........................74

         9.12.    Additional Guarantors; Solvency of Guarantors...............74

         9.13.    Further Assurances..........................................75

         9.14.    Distributions in the Ordinary Course........................75

ARTICLE X.            NEGATIVE COVENANTS......................................75

         10.1.    Intentionally Omitted.......................................75

         10.2.    Liens.......................................................75

                                      -ii-
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         10.3.    Intentionally Omitted.......................................75

         10.4.    Conduct of Business.........................................75

         10.5.    Transactions with Partners and Affiliates...................76

         10.6.    Restriction on Fundamental Changes..........................76

         10.7.    Margin Regulations; Securities Laws.........................76

         10.8.    ERISA.......................................................76

         10.9.    Organizational Documents....................................77

         10.10.   Fiscal Year.................................................77

         10.11.   Financial Covenants.........................................77

         10.12.   Negative Covenants with respect to the Company..............79

ARTICLE XI.           EVENTS OF DEFAULT; RIGHTS AND REMEDIES..................79

         11.1.    Events of Default...........................................79

         11.2.    Rights and Remedies.........................................82

ARTICLE XII.          THE AGENTS..............................................83

         12.1.    Appointment.................................................83

         12.2.    Nature of Duties............................................84

         12.3.    Right to Request Instructions...............................84

         12.4.    Reliance....................................................84

         12.5.    Indemnification.............................................85

         12.6.    Agents Individually.........................................85

         12.7.    Successor Agents............................................85

         12.8.    Relations Among the Lenders.................................86

         12.9.    Standard of Care............................................86

ARTICLE XIII.         YIELD PROTECTION........................................86

         13.1.    Taxes.......................................................86

         13.2.    Increased Capital...........................................88

         13.3.    Changes; Legal Restrictions.................................89

         13.4.    Replacement of Certain Lenders..............................89

         13.5.    Mitigation..................................................90

ARTICLE XIV.          MISCELLANEOUS...........................................90

         14.1.    Assignments and Participations..............................90

         14.2.    Expenses....................................................93

                                     -iii-
<PAGE>


         14.3.    Indemnity...................................................94

         14.4.    Change in Accounting Principles.............................94

         14.5.    Intentionally Omitted.......................................95

         14.6.    Ratable Sharing.............................................95

         14.7.    Amendments and Waivers......................................95

         14.8.    Notices.....................................................97

         14.9.    Survival of Warranties and Agreements.......................97

         14.10.   Failure or Indulgence Not Waiver; Remedies Cumulative.......98

         14.11.   Payments Set Aside..........................................98

         14.12.   Severability................................................98

         14.13.   Headings....................................................98

         14.14.   Governing Law...............................................98

         14.15.   Limitation of Liability.....................................98

         14.16.   Successors and Assigns......................................99

         14.17.   Certain Consents and Waivers of the Borrower................99

         14.18.   Counterparts; Effectiveness; Inconsistencies...............100

         14.19.   Limitation on Agreements...................................100

         14.20.   Disclaimers................................................100

         14.21.   Entire Agreement...........................................101

         14.22.   Confidentiality............................................101

         14.23.   No Bankruptcy Proceedings..................................101

         14.24.   USA Patriot Act............................................101

         14.25.   Transitional Arrangements..................................101

                                       iv
<PAGE>


LIST OF EXHIBITS AND SCHEDULES

Exhibit A         Form of Assignment and Acceptance
Exhibit B-1       Form of Note
Exhibit B-2       Form of Designated Bank Note
Exhibit C         Form of Notice of Committed Borrowing
Exhibit D         Form of Notice of Conversion /Continuation
Exhibit E         List of Closing Documents
Exhibit F         Form of Compliance Certificate to Accompany Reports
Exhibit G         Sample of Calculations of Financial Covenants
Exhibit H         Form of Competitive Bid Quote Request
Exhibit I         Form of Invitation for Competitive Bid Quote
Exhibit J         Form of Competitive Bid Quote
Exhibit K         Form of Designation Agreement
Exhibit L         Form of Guaranty


Schedule EEP      Eligible Encumbered Properties
Schedule EG       Eligible Ground Lease
Schedule LC       Lenders' Commitments and Notice Addresses
Schedule 1.1.1    Existing Permitted Liens
Schedule 1.1.2    Permitted Securities Options
Schedule 6.1(d)   Equity Changes
Schedule 7.1-A    Organizational Documents
Schedule 7.1-C    Corporate Structure; Outstanding Capital Stock and
                  Partnership Interests; Partnership Agreement
Schedule 7.1-H    Indebtedness for Borrowed Money; Contingent Obligations
Schedule 7.1-I    Pending Actions
Schedule 7.1-P    Environmental Matters
Schedule 7.1-Q    ERISA Matters
Schedule 7.1-R    Securities Activities
Schedule 7.1-T    Insurance Policies

                                      -v-
<PAGE>


                   THIRD AMENDED AND RESTATED CREDIT AGREEMENT

        This Third Amended and Restated  Credit  Agreement dated as of August 6,
2004 (as amended,  supplemented or modified from time to time, the  "AGREEMENT")
is entered into among RECKSON  OPERATING  PARTNERSHIP,  L.P., a Delaware limited
partnership  ("RECKSON"),  the institutions  from time to time a party hereto as
Lenders, whether by execution of this Agreement or an Assignment and Acceptance,
JPMORGAN  CHASE BANK,  as  Administrative  Agent,  WELLS  FARGO  BANK,  NATIONAL
ASSOCIATION,  as Syndication Agent, CITICORP NORTH AMERICA, INC., WACHOVIA BANK,
NATIONAL  ASSOCIATION,  and  DEUTSCHE  BANK TRUST  COMPANY  AMERICAS,  INC.,  as
Co-Documentation  Agents, KEYBANK,  NATIONAL ASSOCIATION,  THE BANK OF NEW YORK,
THE BANK OF NOVA  SCOTIA,  ING REAL  ESTATE  FINANCE  (USA)  LLC,  and PNC BANK,
NATIONAL ASSOCIATION, as Co-Agents (the "CO-AGENTS"), and J.P. MORGAN SECURITIES
INC.  and  CITIGROUP  GLOBAL  MARKETS  INC.  as  Co-Lead   Arrangers  and  Joint
Bookrunners.

                                    RECITALS

        WHEREAS,  Reckson, an affiliate of Reckson,  JPMorgan and certain of the
Lenders entered into that certain Credit Agreement dated as of July 23, 1998, as
amended by First  Amendment to Credit  Agreement dated as of August 31, 1999 and
as amended by Second  Amendment to Credit  Agreement  dated as of September  27,
1999, (as so amended, the "ORIGINAL REVOLVING CREDIT AGREEMENT");

        WHEREAS, Reckson, an affiliate of Reckson,  JPMorgan, and certain of the
Lenders entered into that certain Amended and Restated Credit Agreement dated as
of January 12,  1999,  as amended by First  Amendment  to Amended  and  Restated
Credit Agreement dated as of September 27, 1999 and as amended by Second Amended
and Restated Credit Agreement dated as of December 17, 1999 (as so amended,  the
"ORIGINAL TERM LOAN AGREEMENT");

        WHEREAS,  Reckson,  JPMorgan and certain other parties entered into that
certain Amended and Restated Credit Agreement dated as of September 7, 2000 (the
"2000  CREDIT  AGREEMENT")  pursuant  to which they  amended  and  restated  the
Original  Revolving Credit Agreement in its entirety and terminated the Original
Term Loan Agreement;

        WHEREAS,  Reckson,  JPMorgan and certain other parties entered into that
certain Second Amended and Restated  Credit  Agreement  dated as of December 30,
2002 (the "2002 CREDIT  AGREEMENT")  pursuant to which they amended and restated
the 2000 Credit Agreement in its entirety; and

        WHEREAS,  Reckson, JPMorgan and the other parties hereto wish to extend,
amend and restate the 2002 Credit  Agreement in its entirety in accordance  with
the terms and provisions contained herein.

        NOW, THEREFORE, for valuable consideration,  the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:

<PAGE>


                                   ARTICLE I.
                                   DEFINITIONS

        1.1.    CERTAIN  DEFINED  TERMS.   The  following  terms  used  in  this
Agreement shall have the following meanings, applicable both to the singular and
the plural forms of the terms defined:

        "ADJUSTED  UNENCUMBERED NOI" means, for the prior calendar quarter,  the
sum of (i) NOI from the  Consolidated  Businesses  attributable  to Unencumbered
Projects  and  Unencumbered  New York  City  Assets  which are  wholly-owned  or
ground-leased  by a  Consolidated  Business;  plus (ii) the  Borrower's pro rata
share of NOI from Joint  Ventures  attributable  to  Unencumbered  Projects  and
Unencumbered  New York City Assets in which the Borrower's  beneficial  economic
interest  in  such  Joint  Ventures  is 51% or  greater,  provided  the  sale or
financing  of any  Property  owned or  ground-leased  by such  Joint  Venture is
substantially  controlled by the Borrower,  subject to customary  provisions set
forth in the  organizational  documents  of such Joint  Venture  with respect to
financings,  sales or rights of first  refusal  granted to other members of such
Joint  Venture;  plus  (iii) the  Borrower's  pro rata  share of NOI from  Joint
Ventures  attributable to Unencumbered  Projects and  Unencumbered New York City
Assets in which the Borrower's  beneficial  economic  interest is less than 51%,
provided  that a majority of the  beneficial  economic  interests  in such Joint
Ventures that is not owned by the Consolidated Businesses is owned or controlled
by Qualified Joint Venture Partners;  plus (iv) the Borrower's pro rata share of
Net Income attributable to other Unencumbered assets including  Performing Notes
(exclusive  of  Investment  Funds,  land and  development,  and service  company
income);  plus  (v) NOI  from  Eligible  Encumbered  Properties;  LESS  (vi) the
quotient  of  Capital  Expenditure  Coverage  Reserve  Amounts  for such  period
relating to such Unencumbered assets and Eligible Encumbered Properties, divided
by four (4);

PROVIDED,  clause (ii) above shall not exceed  twenty  percent (20%) of Adjusted
Unencumbered  NOI;  clause  (iii) above shall not exceed  five  percent  (5%) of
Adjusted  Unencumbered  NOI;  and  clause  (iv) above  shall not exceed  fifteen
percent (15%) of Adjusted Unencumbered NOI.

        "ADMINISTRATIVE AGENT" means JPMorgan, in its capacity as administrative
agent for the Lenders.

        "AFFILIATE",  as  applied to any  Person,  means any other  Person  that
directly or indirectly  controls,  is controlled  by, or is under common control
with, that Person. For purposes of this definition,  "control" (including,  with
correlative meanings, the terms "controlling", "controlled by" and "under common
control  with"),  as applied to any Person,  means the  possession,  directly or
indirectly,  of the  power  to vote  ten  percent  (10%)  or more of the  equity
Securities  having  voting power for the election of directors of such Person or
otherwise  to direct or cause the  direction of the  management  and policies of
that Person,  whether  through the ownership of voting  equity  Securities or by
contract or otherwise.

        "AGENTS" means, collectively, JPMorgan in its capacity as Administrative
Agent, Wells Fargo Bank,  National  Association,  in its capacity as Syndication
Agent,  Citicorp North America,  Inc., Wachovia Bank,  National  Association and
Deutsche  Bank  Trust   Company   Americas,   Inc.,   in  their   capacities  as
Co-Documentation  Agents, KeyBank,  National Association,  The Bank of New York,
The Bank of Nova  Scotia,  ING Real  Estate  Finance  (USA)  LLC,  and PNC Bank,
National Association,  in their capacities as Co-Agents, the Arrangers, and each
successor  agent  appointed  pursuant  to the  terms  of  Article  XII  of  this
Agreement.

                                      -2-
<PAGE>


        "AGREEMENT" has the meaning set forth in the preamble hereto.

        "APPLICABLE  LENDING OFFICE" means, with respect to a particular Lender,
(i)  its  Eurodollar  Lending  Office  in  respect  of  provisions  relating  to
Eurodollar Rate Loans, (ii) its Domestic Lending Office in respect of provisions
relating to Base Rate Loans,  and (iii) its  Competitive  Bid Lending  Office in
respect of provisions relating to Competitive Bid Loans.

        "APPLICABLE  MARGIN"  means,  with respect to each Loan,  the respective
percentages  per annum  determined  based on the range into which the Borrower's
Credit Rating then falls, in accordance with the following  table. Any change in
the  Borrower's  Credit  Rating  causing it to move to a different  range on the
table  shall to the extent set forth  below  effect an  immediate  change in the
Applicable Margin. The Borrower shall notify the Administrative Agent in writing
promptly after becoming  aware of any change in any of its Credit  Ratings.  The
Borrower  shall maintain  Credit Ratings from at least two (2) Rating  Agencies,
one of which must be Moody's or S&P so long as such  Persons are in the business
of providing debt ratings for the REIT  industry;  provided that if the Borrower
fails to maintain at least two Credit  Ratings,  the Applicable  Margin shall be
based upon an S&P rating of less than BBB- in the table below. In the event that
the  Borrower  receives  two (2) Credit  Ratings  that are not  equivalent,  the
Applicable  Margin  shall be  determined  by the  lower  of such two (2)  Credit
Ratings, at least one of which shall be an Investment Grade Rating. In the event
the Borrower  receives more than two (2) Credit  Ratings and such Credit Ratings
are not  equivalent,  the Applicable  Margin shall be determined by the lower of
the two highest  ratings;  provided  that each of said two (2)  highest  ratings
shall  be  Investment  Grade  Ratings  and at  least  one of  which  shall be an
Investment Grade Rating from S&P or Moody's.

            Range of                                                 Applicable
         the Borrower's                  Applicable                  Margin for
          Credit Rating                Margin for Euro               Base Rate
          (S&P/Moody's                  Dollar Loans                   Loans
        or other Ratings)               (% per annum)              (% per annum)
        -----------------               -------------              -------------

A-/A3 or their equivalent or higher          0.60                        0
BBB+/Baa1 or their equivalent                0.625                       0
BBB/Baa2 or their equivalent                 0.70                        0
BBB-/Baa3 or their equivalent                0.90                        0
Below BBB-/Baa3 or their
 equivalent or unrated                       1.20                        0

The  Administrative  Agent shall notify the Banks in writing  promptly  after it
obtains  knowledge  of any change in the  Borrower's  Credit  Rating which shall
effect a change in the Applicable Margin.

        "ARRANGERS"  means J.P.  Morgan  Securities  Inc. and  Citigroup  Global
Markets  Inc.,  each  appointed  pursuant  to the terms of  Article  XII of this
Agreement.

                                      -3-
<PAGE>


        "ASSIGNMENT  AND  ACCEPTANCE"  means an  Assignment  and  Acceptance  in
substantially the form of Exhibit A attached hereto and made a part hereof (with
blanks  appropriately  completed)  delivered  to  the  Administrative  Agent  in
connection  with an assignment of a Lender's  interest  under this  Agreement in
accordance with the provisions of Section 14.1.

        "AUTHORIZED   FINANCIAL   OFFICER"  means  a  chief  executive  officer,
president,  chief financial officer, treasurer or other qualified senior officer
acceptable to the Administrative Agent.

        "BASE RATE" means, for any period, a fluctuating interest rate per annum
as shall be in effect from time to time, which rate per annum shall at all times
be equal to the higher of:

                (i)     the rate of interest  announced  publicly by JPMorgan in
        New York, New York from time to time, as JPMorgan's prime rate; and

                (ii)    the sum of (A) one-half of one percent (0.50%) per annum
        PLUS (B)  the  Federal  Funds Rate  in  effect from  time to time during
        such period.

Any change in the Base Rate shall result in a  corresponding  change on the same
day in the rate of  interest  accruing  from and  after  such day on the  unpaid
balance of any Base Rate Loan.

        "BASE RATE LOAN"  means (i) a Committed  Loan which bears  interest at a
rate  determined  by  reference  to the Base Rate and the  Applicable  Margin as
provided in Section  5.1(a),  (ii) an overdue  amount which was a Base Rate Loan
immediately  before it became due or (iii) for purposes of Section 5.2, any Loan
which bears interest at a rate determined by reference to the Base Rate.

        "BENEFIT PLAN" means an employee benefit plan defined in Section 3(3) of
ERISA in respect of which the Borrower or any ERISA  Affiliate (i) is, or within
the immediately preceding six (6) years was, an "employer" as defined in Section
3(5) of ERISA or (ii) has assumed or is otherwise subject to any liability.

        "BORROWER" means Reckson.

        "BORROWER NOTES" has the meaning set forth in Section 4.3(a).

        "BORROWER PARTNERSHIP AGREEMENT" means the Reckson Partnership Agreement
as such agreement may be amended,  restated,  modified or supplemented from time
to time with the consent of the Agents or as permitted under Section 10.9.

        "BORROWING" means a borrowing consisting of Loans of the same type made,
continued or converted on the same day.

        "BUDGETED  CONSTRUCTION  COST" means,  with respect to Property on which
vertical construction of Improvements (including redevelopments consisting of or
described as vacant buildings, but excluding TI Work and excluding work prior to
erection of the  structure of the  building)  has commenced and is proceeding to
completion  in the  ordinary  course  but has not yet  been  completed  (as such
completion  shall be  evidenced  by a  temporary  or  permanent  certificate  of
occupancy  permitting use of such Property by the general public), the aggregate
full-budgeted  costs  of  construction  of  such  Improvements  (including  land
acquisition costs and other soft costs

                                      -4-
<PAGE>


and TI Work relating to such Property,  in accordance with GAAP);  provided that
Budgeted  Construction  Cost  shall  exclude  build-to-suit  Projects  that  are
seventy-five   percent  (75%)   pre-leased  or  Projects  which  are  less  than
seventy-five  percent (75%) pre-leased but have a pro-forma yield of ten percent
(10%) or more,  based upon executed leases and the cost of acquisition  plus the
estimated cost to complete the same,  which  estimated cost to complete shall be
determined in a manner reasonably acceptable to the Administrative Agent and the
Syndication Agent.

        "BUSINESS DAY" means a day, in the applicable local time, which is not a
Saturday or Sunday or a legal  holiday  and on which  banks are not  required or
permitted by law or other governmental action to close (i) in New York, New York
and (ii) in the case of Eurodollar Rate Loans,  in London,  England and (iii) in
the case of Letter of Credit  transactions for a particular Lender, in the place
where its office for  issuance  or  administration  of the  pertinent  Letter of
Credit is located.

        "CAPITAL EXPENDITURE  VALUATION RESERVE AMOUNTS" means the sum of (a) an
amount per annum  equal to $0.40  multiplied  by the  number of square  feet for
office  properties  (other than New York City  Assets)  owned or ground  leased,
directly or indirectly, by any of the Consolidated Businesses or Joint Ventures;
(b) an amount per annum equal to $0.15  multiplied  by the number of square feet
for industrial properties owned or ground leased, directly or indirectly, by any
of the  Consolidated  Businesses or Joint Ventures;  and (c) an amount per annum
equal to $0.50 multiplied by the number of square feet for New York City Assets.

        "CAPITAL  EXPENDITURE  COVERAGE RESERVE AMOUNTS" means the sum of (a) an
amount per annum  equal to $1.25  multiplied  by the  number of square  feet for
office  properties  (other than New York City  Assets)  owned or ground  leased,
directly or indirectly, by any of the Consolidated Businesses or Joint Ventures;
(b) an amount per annum equal to $0.40  multiplied  by the number of square feet
for industrial properties owned or ground leased, directly or indirectly, by any
of the  Consolidated  Businesses or Joint Ventures;  and (c) an amount per annum
equal to $1.75 multiplied by the number of square feet for New York City Assets.

        "CAPITAL LEASE" means any lease of any property (whether real,  personal
or mixed) by a Person as lessee which, in conformity with GAAP, is accounted for
as a capital lease on the balance sheet of that Person.

        "CAPITAL STOCK" means, with respect to any Person,  any capital stock of
such Person,  regardless of class or  designation,  and all  warrants,  options,
purchase rights,  conversion or exchange rights,  voting rights, calls or claims
of any character with respect thereto.

        "CASH AND CASH EQUIVALENTS" means unrestricted (i) cash, (ii) marketable
direct  obligations  issued or  unconditionally  guaranteed by the United States
government  and  backed  by the full  faith  and  credit  of the  United  States
government;  and (iii) domestic and Eurodollar  certificates of deposit and time
deposits,  bankers' acceptances and floating rate certificates of deposit issued
by any commercial bank organized under the laws of the United States,  any state
thereof, the District of Columbia, any foreign bank, or its branches or agencies
(fully  protected  against  currency  fluctuations),   which,  at  the  time  of
acquisition,  are rated A-1 (or  better)  by S&P or P-1 (or  better)  by Moody's
provided that the maturities of such Cash and Cash Equivalents  shall not exceed
one year.

                                      -5-
<PAGE>


        "CERCLA" means the Comprehensive  Environmental  Response,  Compensation
and  Liability  Act of 1980,  42  U.S.C.  ss.ss.  9601 et seq.,  any  amendments
thereto, any successor statutes,  and any regulations or guidelines  promulgated
thereunder.

        "CLAIM" means any claim or demand,  by any Person, of whatsoever kind or
nature for any alleged Liabilities and Costs,  whether based in contract,  tort,
implied  or express  warranty,  strict  liability,  criminal  or civil  statute,
Permit, ordinance or regulation, common law or otherwise.

        "CLOSING DATE" means August 6, 2004.

        "COMBINED  EQUITY  VALUE"  means  Total  Value,  less Total  Outstanding
Indebtedness.

        "COMMERCIAL  LETTER OF CREDIT"  means any  documentary  letter of credit
issued by an  Issuing  Bank  pursuant  to  Section  3.1 for the  account  of the
Borrower which is drawable upon presentation of documents evidencing the sale or
shipment  of goods  purchased  by the  Borrower  in the  ordinary  course of its
business.

        "COMMISSION" means the Securities and Exchange Commission and any Person
succeeding to the functions thereof.

        "COMMITTED  LOAN" means a loan made by a Lender pursuant to Section 2.1;
provided,  that if any such loan or loans (or portions  thereof) are combined or
subdivided pursuant to a Notice of Conversion/Continuation,  the term "Committed
Loan"  shall  refer  to  the  combined  principal  amount  resulting  from  such
combination  or to each of the separate  principal  amounts  resulting from such
subdivision, as the case may be.

        "COMPANY" means Reckson Associates Realty Corp., a Maryland corporation.

        "COMPETITIVE  BID LENDER" means,  as to each  Competitive  Bid Loan, the
Lender funding such Competitive Bid Loan.

        "COMPETITIVE BID LENDING OFFICE" means, as to each Lender,  its Domestic
Lending  Office or such other  office,  branch or affiliate of such Lender as it
may hereafter  designate as its  Competitive Bid Lending Office by notice to the
Borrower and the Agent.

        "COMPETITIVE  BID  LOAN"  means a loan  made  or to be made by a  Lender
pursuant to a LIBOR Auction  (including such a loan bearing interest at the Base
Rate pursuant to Section 5.2).

        "COMPETITIVE   BID   MARGIN"  has  the  meaning  set  forth  in  Section
2.2(d)(ii)(C).

        "COMPETITIVE BID QUOTE" means an offer by a Lender to make a Competitive
Bid Loan in accordance with Section 2.2(d).

        "COMPETITIVE  BID QUOTE  REQUEST"  has the  meaning set forth in Section
2.2(a).

        "COMPLIANCE CERTIFICATE" has the meaning set forth in Section 8.2(b).

        "CONSOLIDATED"   means  consolidated,   in  accordance  with  GAAP,  but
excluding  the  effects  of  consolidation  under  Interpretation  No. 46 of the
Financial Accounting Standards Board.

                                      -6-
<PAGE>


        "CONSOLIDATED  BUSINESSES" means the Company,  the Borrower,  Reckson FS
Limited Partnership, Metropolitan, MOP and their wholly-owned Subsidiaries.

        "CONSTRUCTION  ASSET  COST"  means,  with  respect to  Property on which
vertical construction of Improvements (including redevelopments consisting of or
described as vacant buildings, but excluding TI Work and excluding work prior to
erection of the  structure of the  building)  has commenced and is proceeding to
completion  in the  ordinary  course  but has not yet  been  completed  (as such
completion  shall be  evidenced  by a  temporary  or  permanent  certificate  of
occupancy  permitting use of such Property by the general public), the aggregate
sums incurred and paid on the construction of such Improvements  (including land
acquisition costs and other soft costs and TI Work relating to such Property, in
accordance  with  GAAP).  Any such  Property  shall  continue  to be valued (for
financial covenant compliance purposes) at its Construction Asset Cost until the
end of  four  (4)  consecutive  quarters  following  such  completion  (as  such
completion  shall be  evidenced  by a  temporary  or  permanent  certificate  of
occupancy permitting use of such Property by the general public).

        "CONTAMINANT" means any waste,  pollutant,  hazardous  substance,  toxic
substance,  hazardous  waste,  special  waste,  petroleum  or  petroleum-derived
substance or waste, radioactive materials, asbestos containing materials (in any
form or condition),  polychlorinated biphenyls (PCBs), or any constituent of any
such  substance or waste,  and  includes,  but is not limited to, these terms as
defined in federal, state or local laws or regulations.

        "CONTINGENT OBLIGATION" as to any Person means, without duplication, (i)
any contingent  obligation of such Person  required to be shown on such Person's
balance sheet in accordance  with GAAP, and (ii) any  obligation  required to be
disclosed in the footnotes to such Person's  financial  statements in accordance
with GAAP,  which obligation  guarantees  partially or in whole any non-recourse
Indebtedness,  lease,  dividend or other  obligation,  exclusive of  contractual
indemnities (including,  without limitation,  any Non-Recourse  Carve-Outs,  any
indemnity  or  price-adjustment  provision  relating to the  purchase or sale of
securities or other assets) and guarantees of  non-monetary  obligations  (other
than guarantees of completion)  which have not yet been called on or quantified,
of such  Person or of any  other  Person.  Notwithstanding  the  foregoing,  any
litigation  required to be disclosed in the footnotes to such Person's financial
statements  in  accordance  with GAAP  shall not be  included  as a  "Contingent
Obligation"  unless the same shall have been  reserved  for in  accordance  with
GAAP. The amount of any Contingent  Obligation described in clause (ii) shall be
deemed  to be (a) with  respect  to a  guaranty  of  interest  or  interest  and
principal,  or operating income guaranty, the sum of all payments required to be
made  thereunder  (which in the case of an operating  income  guaranty  shall be
deemed to be equal to the debt service for the note secured thereby), calculated
at the interest rate applicable to such Indebtedness, through (i) in the case of
an interest or interest and principal  guaranty,  the stated date of maturity of
the  obligation  (and  commencing  on the date  interest  could first be payable
thereunder),  or (ii) in the  case of an  operating  income  guaranty,  the date
through which such  guaranty will remain in effect,  and (b) with respect to all
guarantees not covered by the preceding clause (a) an amount equal to the stated
or  determinable  amount of the  primary  obligation  in  respect  of which such
guaranty  is made or, if not  stated or  determinable,  the  maximum  reasonably
anticipated  liability in respect  thereof  (assuming such Person is required to
perform thereunder) as recorded on the balance sheet and on the footnotes to the
most recent  financial  statements  of the  Borrower  required  to be  delivered
pursuant  hereto;  PROVIDED  THAT in no event  shall the  amount  of  Contingent
Obligations  with  respect  to any  guaranties  relating  to a loan  exceed  the
principal amount of such loan.  Notwithstanding anything contained herein to the
contrary,  guarantees  of  completion  shall  not  be  deemed  to be  Contingent
Obligations  unless and until a claim for

                                      -7-
<PAGE>


payment has been made thereunder,  at which time any such guaranty of completion
shall be deemed to be a  Contingent  Obligation  in an amount  equal to any such
claim. Subject to the preceding sentence, (i) in the case of a joint and several
guaranty  given by such Person and  another  Person (but only to the extent such
guaranty is recourse, directly or indirectly to the Borrower), the amount of the
guaranty  shall be deemed to be 100% thereof  unless and only to the extent that
(X) such other Person has delivered  Cash or Cash  Equivalents  to secure all or
any part of such Person's guaranteed  obligations or (Y) such other Person holds
an Investment Grade Rating from either Moody's or S&P, and (ii) in the case of a
guaranty  (whether  or  not  joint  and  several)  of  an  obligation  otherwise
constituting Debt of such Person, the amount of such guaranty shall be deemed to
be only  that  amount in excess  of the  amount of the  obligation  constituting
Indebtedness of such Person.  Notwithstanding  anything  contained herein to the
contrary,  "Contingent Obligations" shall not be deemed to include guarantees of
loan  commitments or of construction  loans to the extent the same have not been
drawn.

        "CONTRACTUAL OBLIGATION",  as applied to any Person, means any provision
of any  Securities  issued by that Person or any  indenture,  mortgage,  deed of
trust, security agreement, pledge agreement,  guaranty,  contract,  undertaking,
agreement or instrument to which that Person is a party or by which it or any of
its properties is bound, or to which it or any of its properties is subject.

        "CREDIT  RATING" means the ratings  assigned by not less than two of the
Rating  Agencies  (at  least  one of  which  shall  be S&P  or  Moody's)  to the
Borrower's senior long-term unsecured  indebtedness.  The decision on which two,
or in certain cases three,  Rating Agencies to use shall be made by the Borrower
so long as one of such Rating Agencies shall be Moody's or S&P.

        "CURE LOANS" has the meaning set forth in Section 4.2(b)(v)(C).

        "CUSTOMARY PERMITTED LIENS" means

                (i)     Liens (other than Environmental Liens and Liens in favor
        of the PBGC)  with  respect  to the  payment  of taxes,  assessments  or
        governmental  charges  or levies  in all cases  which are not yet due or
        which are being  contested in good faith by  appropriate  proceedings in
        accordance with Section 9.4, and with respect to which adequate reserves
        or other appropriate  provisions are being maintained in accordance with
        GAAP;

                (ii)    statutory and common law Liens of landlords  against any
        Property of the Borrower or any of its Subsidiaries;

                (iii)   Liens against any Property of the Borrower or any of its
        Subsidiaries in favor of suppliers,  mechanics,  carriers,  materialmen,
        warehousemen  or workmen  and other Liens  against  any  Property of the
        Borrower  or any of  its  Subsidiaries  imposed  by law  created  in the
        ordinary  course of business for amounts  which could not  reasonably be
        expected to result in a Material Adverse Effect;

                (iv)    Liens  (other  than  any  Lien  in  favor  of the  PBGC)
        incurred  or  deposits  made  in the  ordinary  course  of  business  in
        connection with worker's  compensation,  unemployment insurance or other
        types of social security  benefits or to secure the performance of bids,
        tenders,  sales,  contracts  (other than for the  repayment  of borrowed
        money), surety, appeal and performance bonds; PROVIDED that (A) all such
        Liens do not in the aggregate  materially  detract from the value of the
        Borrower's or such Subsidiary's

                                      -8-
<PAGE>


        assets or Property or materially impair the use thereof in the operation
        of their  respective  businesses,  and (B) all  Liens of  attachment  or
        judgment and Liens  securing  bonds to stay  judgments or in  connection
        with  appeals  which do not  secure at any time an  aggregate  amount of
        recourse Indebtedness exceeding $10,000,000;

                (v)     Liens  against  any  Property  of  the  Borrower  or any
        Subsidiary of the Borrower arising with respect to zoning  restrictions,
        easements, licenses,  reservations,  covenants,  rights-of-way,  utility
        easements,   building   restrictions   and  other  similar   charges  or
        encumbrances  on the  use  of  Real  Property  which  do not  materially
        interfere  with the ordinary  conduct of the business of the Borrower or
        any of its Subsidiaries;

                (vi)    leases  or  subleases   granted  to  other  Persons  not
        materially  interfering with the conduct of the business of the Borrower
        and its Subsidiaries taken as a whole;

                (vii)   Liens placed upon  equipment  or  machinery  used in the
        ordinary  course of business of the Borrower or any of its  Subsidiaries
        at the  time  of  acquisition  thereof  by  the  Borrower  or  any  such
        Subsidiary or within 180 days thereafter to secure Indebtedness incurred
        to pay all or a portion of the purchase price thereof, provided that the
        Lien  encumbering  the  equipment  or  machinery  so  acquired  does not
        encumber any other asset of the Borrower or such Subsidiary;

                (viii)  customary  restrictions imposed by licensors of software
        or trademarks on users thereof;

                (ix)    interests  of   licensees   and   sublicensees   in  any
        trademarks or other  intellectual  property license or sublicense by the
        Borrower or any of its Subsidiaries; and

                (x)     Environmental  Liens  less  than  $5,000,000,  which are
        being contested in good faith by appropriate proceedings.

        "DESIGNATED  BANK" means a special  purpose  corporation  that (i) shall
have become a party to this Agreement  pursuant to Section 14.1(f),  and (ii) is
not otherwise a Lender.

        "DESIGNATED   BANK  NOTES"  means  promissory  notes  of  the  Borrower,
substantially  in the form of Exhibit B-2 hereto,  evidencing  the obligation of
the Borrower to repay  Competitive  Bid Loans made by Designated  Banks,  as the
same may be amended,  supplemented,  modified or restated from time to time, and
"Designated  Bank Note"  means any one of such  promissory  notes  issued  under
Section 14.1(f).

        "DESIGNATED LENDER" has the meaning set forth in Section 13.4.

        "DESIGNATING LENDER" shall have the meaning set forth in Section 14.1(f)
hereof.

        "DESIGNATION  AGREEMENT" means a designation  agreement in substantially
the form of Exhibit K attached hereto, entered into by a Lender and a Designated
Bank and accepted by the Agent.

        "DOCUMENTATION  AGENTS" means  Citicorp North  America,  Inc.,  Wachovia
Bank,  National  Association and Deutsche Bank Trust Company Americas,  Inc., in
their capacities as co-documentation agents for the Lenders.

                                      -9-
<PAGE>


        "DOL"  means  the  United  States  Department  of Labor  and any  Person
succeeding to the functions thereof.

        "DOLLARS" AND "$" mean the lawful money of the United States.

        "DOMESTIC  LENDING  OFFICE"  means,  with  respect to any  Lender,  such
Lender's  office,  located  in the United  States,  specified  as the  "Domestic
Lending  Office"  under  its name on  SCHEDULE  LC hereto or as set forth in the
Assignment  and  Acceptance  by which it  became a Lender or such  other  United
States  office of such  Lender as it may from time to time  specify  by  written
notice to the Borrower and the Administrative Agent.

        "ELIGIBLE  ASSIGNEE"  means (i) a Lender or a Lender  Affiliate;  (ii) a
commercial  bank  having  total  assets in excess of  $5,000,000,000;  (iii) the
central bank of any country which is a member of the  organization  for Economic
Cooperation and Development having total assets in excess of $10,000,000,000; or
(iv) a finance company or other financial  institution  reasonably acceptable to
the Administrative  Agent,  which is regularly engaged in making,  purchasing or
investing  in loans and having total  assets in excess of  $1,000,000,000  or is
otherwise reasonably acceptable to the Administrative Agent.

        "ELIGIBLE  CASH  1031  PROCEEDS"  means  the  cash  proceeds  held  by a
"qualified  intermediary"  from the sale of Real  Property,  which  proceeds are
intended  to be used by  such  qualified  intermediary  to  acquire  one or more
"replacement  properties"  that are of  "like-kind"  to such Real Property in an
exchange  that  qualifies  as a  tax-free  exchange  under  Section  1031 of the
Internal  Revenue  Code,  and no portion of which  proceeds  the  Borrower,  the
Company or any Affiliate has the right to receive,  pledge,  borrow or otherwise
obtain  the  benefits  of until  such  time as  provided  under  the  applicable
"exchange  agreement"  (as such terms in  quotations  are  defined  in  Treasury
Regulations  Section   1.1031(k)-1(g)(4)  (the  "REGULATIONS"))  or  until  such
exchange is  terminated.  Upon the cash  proceeds  no longer  being held by such
qualified  intermediary  pursuant  to the  Regulations  or  otherwise  no longer
qualifying under the Regulations for like-kind exchange treatment, such proceeds
shall cease being Eligible Cash 1031 Proceeds.

        "ELIGIBLE  ENCUMBERED  PROPERTIES"  means the Projects and New York City
Assets  listed on SCHEDULE  EEP, so long as (a) such  Projects and New York City
Assets are owned or  ground-leased  by the  Borrower  or a  Guarantor  and would
otherwise satisfy the requirements of an Unencumbered Project or an Unencumbered
New York City Asset,  except that such Project or New York City Asset is subject
to a lien which is not a Customary Permitted Lien, (b) the Indebtedness  secured
by the Lien on such  Project or New York City Asset that  exists on the  Closing
Date is not (x)  amended or  modified  in any manner  that  would  increase  the
principal  amount or postpone the maturity  date  thereof or (y)  refinanced  or
replaced  with new  Indebtedness  having a principal  amount  greater  than or a
maturity date later than the Indebtedness being refinanced or replaced,  (c) the
Indebtedness  secured by the Lien on such Project or New York City Asset has not
been  accelerated,  unless such  acceleration is rescinded and (d) no default or
event of default  under any  mortgage  or other loan  document  relating  to the
Indebtedness  secured  by the Lien on such  Project  or New York City  Asset has
occurred and is continuing, which default or event of default then subjects such
Indebtedness to acceleration or then permits such Indebtedness to be accelerated
under any such mortgage or other loan document,  unless such default or event of
default is cured or waived.

                                      -10-
<PAGE>


        "ELIGIBLE  GROUND  LEASE"  means a ground  lease  that (a) has a minimum
remaining term of twenty-five (25) years,  including tenant controlled  options,
as of any date of determination,  (b) has customary notice rights,  default cure
rights,  new lease  rights in the event of  bankruptcy  of the  tenant and other
customary  provisions for the benefit of a leasehold mortgagee or has equivalent
protection  for a  leasehold  permanent  mortgagee  by a  subordination  to such
leasehold  permanent  mortgagee  of the  landlord's  fee  interest,  and  (c) is
otherwise  acceptable  for  non-recourse   leasehold  mortgage  financing  under
customary  lending  requirements.  The Eligible  Ground Leases as of the date of
this Agreement are listed on SCHEDULE EG.

        "ENVIRONMENTAL,   HEALTH  OR  SAFETY  REQUIREMENTS  OF  LAW"  means  all
Requirements of Law derived from or relating to any federal, state or local law,
ordinance,  rule, regulation,  Permit, license or other binding determination of
any  Governmental   Authority  relating  to,  imposing  liability  or  standards
concerning,  or otherwise  addressing  the  environment,  health and/or  safety,
including,  but not limited to the Clean Air Act,  the Clean Water Act,  CERCLA,
RCRA, any so-called "Superfund" or "Superlien" law, the Toxic Substances Control
Act and OSHA, and public health codes, each as from time to time in effect.

        "ENVIRONMENTAL LIEN" means a Lien in favor of any Governmental Authority
for any (i) liabilities under any Environmental, Health or Safety Requirement of
Law, or (ii)  damages  arising  from,  or costs  incurred  by such  Governmental
Authority in response to, a Release or threatened  Release of a Contaminant into
the environment.

        "ENVIRONMENTAL  PROPERTY TRANSFER ACT" means any applicable  Requirement
of Law that  conditions,  restricts,  prohibits or requires any  notification or
disclosure triggered by the transfer,  sale, lease or closure of any Property or
deed or title for any Property for  environmental  reasons,  including,  but not
limited  to,  any  so-called   "Environmental  Cleanup  Responsibility  Act"  or
"Responsible Property Transfer Act".

        "EQUIPMENT"  means  equipment used in connection with the maintenance of
Projects and Properties.

        "ERISA" means the Employee  Retirement  Income  Security Act of 1974, 29
U.S.C. ss.ss. 1000 ET SEQ., any amendments thereto, any successor statutes,  and
any regulations or guidelines promulgated thereunder.

        "ERISA  AFFILIATE"  means (i) any  corporation  which is a member of the
same controlled group of corporations  (within the meaning of Section 414 (b) of
the Internal Revenue Code) as the Borrower; (ii) a partnership or other trade or
business (whether or not incorporated) which is under common control (within the
meaning of Section 414 (c) of the Internal Revenue Code) with the Borrower;  and
(iii) a member of the same  affiliated  service  group  (within  the  meaning of
Section 414 (m) of the Internal  Revenue Code) as the Borrower,  any corporation
described in clause (i) above or any partnership or trade or business  described
in clause (ii) above.

        "ERISA  TERMINATION  EVENT" means (i) a Reportable Event with respect to
any Benefit Plan or  Multiemployer  Plan; (ii) the withdrawal of the Borrower or
any ERISA Affiliate from a Benefit Plan during a plan year in which the Borrower
or such  ERISA  Affiliate  was a  "substantial  employer"  as defined in Section
4001(a)(2)  of  ERISA  or the  cessation  of  operations  which  results  in the
termination of employment of 20% of Benefit Plan  participants who are employees
of the Borrower or any ERISA Affiliate; (iii) the imposition of an obligation on
the  Borrower  or any ERISA  Affiliate  under  Section  4041 of ERISA to provide
affected parties written notice of intent

                                      -11-
<PAGE>


to  terminate  a Benefit  Plan in a distress  termination  described  in Section
4041(c) of ERISA; (iv) the institution by the PBGC of proceedings to terminate a
Benefit Plan; (v) any event or condition  which might  constitute  grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer,  any Benefit Plan; or (vi) the partial or complete withdrawal of the
Borrower or any ERISA Affiliate from a Multiemployer Plan.

        "EURODOLLAR AFFILIATE" means, with respect to each Lender, the Affiliate
of such  Lender (if any) set forth  below such  Lender's  name under the heading
"Eurodollar  Affiliate" on SCHEDULE LC hereto or as set forth in the  Assignment
and  Acceptance  by which it became a Lender or such Lender  Affiliate as it may
from  time  to  time  specify  by  written   notice  to  the  Borrower  and  the
Administrative Agent.

        "EURODOLLAR  INTEREST  PERIOD"  has the  meaning  set  forth in  Section
5.2(b).

        "EURODOLLAR  INTEREST RATE DETERMINATION DATE" has the meaning set forth
in Section 5.2(c).

        "EURODOLLAR  LENDING  OFFICE"  means,  with respect to any Lender,  such
Lender's office (if any) specified as the "Eurodollar  Lending Office" under its
name on SCHEDULE LC hereto or as set forth in the  Assignment  and Acceptance by
which it became a Lender or such other  office or  offices of such  Lender as it
may  from  time to time  specify  by  written  notice  to the  Borrower  and the
Administrative Agent.

        "EURODOLLAR RATE" means, for any Eurodollar Interest Period with respect
to any  Eurodollar  Rate Loan or a  Competitive  Bid Loan,  an interest rate per
annum equal to the rate per annum obtained by  multiplying  (a) a rate per annum
equal  to the  rate for  Dollar  deposits  with  maturities  comparable  to such
Eurodollar Interest Period which appears on Telerate Page 3750 as of 11:00 a.m.,
London time, two (2) Business Days prior to the  commencement of such Eurodollar
Interest  Period,  PROVIDED,  HOWEVER,  that if such  rate  does not  appear  on
Telerate Page 3750, the "Eurodollar Rate" applicable to a particular  Eurodollar
Interest  Period  shall mean a rate per annum equal to the rate at which  Dollar
deposits  in an amount  approximately  equal to the  principal  balance  (or the
portion  thereof which will bear  interest at a rate  determined by reference to
the  Eurodollar  Rate  during  the  Eurodollar  Interest  Period  to which  such
Eurodollar  Rate is applicable in accordance  with the provisions  hereof),  and
with  maturities  comparable to the last day of the Eurodollar  Interest  Period
with  respect  to which  such  Eurodollar  Rate is  applicable,  are  offered in
immediately  available funds in the London Interbank Market to the London office
of  JPMorgan by leading  banks in the  Eurodollar  market at 11:00 a.m.,  London
time, two (2) Business Days prior to the commencement of the Eurodollar Interest
Period to which such Eurodollar Rate is applicable, by (b) a fraction (expressed
as a decimal) the numerator of which shall be the number one and the denominator
of which shall be the number one MINUS the  Eurodollar  Reserve  Percentage  for
each day during such Eurodollar Interest Period.

        "EURODOLLAR  RATE LOAN" means (i) a Committed  Loan which bears interest
at a rate  determined  by reference to the  Eurodollar  Rate and the  Applicable
Margin for  Eurodollar  Rate Loans,  as  provided  in Section  5.1(a) or (ii) an
overdue amount which was a Eurodollar Rate Loan immediately before it became due
or (iii) for purpose of Section  5.2,  any Loan which  bears  interest at a rate
determined by reference to the Eurodollar Rate.

        "EURODOLLAR  RESERVE  PERCENTAGE"  means,  for any day, that  percentage
which is in effect on such day, as prescribed  by the Federal  Reserve Board for
determining the maximum reserve

                                      -12-
<PAGE>


requirement (including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for a member bank of the Federal Reserve System in
New York, New York with deposits  exceeding  five billion  Dollars in respect of
"Eurocurrency  Liabilities"  (or in respect of any other category of liabilities
which  includes  deposits by reference to which the interest  rate on Eurodollar
Rate Loans is determined or any category of extensions of credit or other assets
which  includes loans by a non United States office of any bank to United States
residents).

        "EVENT OF  DEFAULT"  means any of the  occurrences  set forth in Section
11.1 after the expiration of any  applicable  grace period and the giving of any
applicable notice, in each case as expressly provided in Section 11.1.

        "EXISTING PERMITTED LIENS" means each of the Liens set forth on SCHEDULE
1.1.1.

        "FEDERAL FUNDS RATE" means, for any period, a fluctuating  interest rate
per annum equal for each day during such period to the  weighted  average of the
rates on  overnight  federal  funds  transactions  with  members of the  Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day in New York,  New York, for the next preceding
Business Day) in New York, New York by the Federal  Reserve Bank of New York, or
if such  rate is not so  published  for any day which is a  Business  Day in New
York, New York, the average of the quotations for such day on such  transactions
by the Reference Bank, as determined by the Administrative Agent.

        "FEDERAL  RESERVE  BOARD"  means the Board of  Governors  of the Federal
Reserve System or any Governmental Authority succeeding to its functions.

        "FFO"  means  "funds  from  operations"  as defined in  accordance  with
resolutions  adopted by the Board of Governors of the  National  Association  of
Real Estate Investment Trusts as in effect from time to time;  provided that FFO
shall (i) be based on net income after  payment of  distributions  to holders of
preferred  partnership units in the Borrower and distributions  necessary to pay
holders of  preferred  stock of the  Company  and (ii) at all times  exclude (a)
charges for impairment losses from property sales and (b) non-recurring charges.

        "FINANCIAL  STATEMENTS"  means (i)  quarterly  and  annual  consolidated
statements of income and retained earnings, statements of cash flow, and balance
sheets,  prepared in accordance with GAAP,  consistently  applied, and (ii) such
other  financial  statements  of  the  Borrower,   the  Company  and  the  other
Consolidated  Businesses or Joint Ventures that the Company shall  routinely and
regularly  prepare and that the Arrangers or the Requisite Lenders may from time
to time reasonably request.

        "FISCAL  YEAR" means the fiscal year of the Company and the Borrower for
accounting  and tax  purposes,  which  shall be the  12-month  period  ending on
December 31 of each calendar year.

        "FITCH" means Fitch Ratings,  a division of Fitch, Inc. or any successor
thereto.

        "FIXED CHARGES" means, with respect to any fiscal period, the sum of (a)
Total Interest Expense, (b) the aggregate of all scheduled principal payments on
Total  Outstanding  Indebtedness  according  to GAAP made or required to be made
during such fiscal period for the  Consolidated  Businesses  and Joint  Ventures
(but excluding  balloon payments of principal due upon the stated maturity of an
Indebtedness), PROVIDED that only the Consolidated Businesses' pro

                                      -13-
<PAGE>


rata  share  of the  Joint  Ventures'  scheduled  principal  payments  are to be
included,  and (c) the  aggregate  of all  dividends  or  distributions  payable
(whether paid or accrued) on all preferred stock and other preferred  securities
or preferential arrangements of the Consolidated Businesses,  including, without
limitation, preferred distributions payable to holders of preferred OP Units. As
used herein, "OP Units" means limited partnership interests in Reckson.

        "FUNDING  DATE" means,  with respect to any Loan, the date of funding of
such Loan.

        "GAAP" means generally accepted  accounting  principles set forth in the
opinions  and  pronouncements  of the American  Institute  of  Certified  Public
Accountants'  Accounting  Principles  Board and Financial  Accounting  Standards
Board or in such other  statements by such other entity as may be in general use
by significant segments of the accounting profession as in effect on the Closing
Date (unless otherwise specified herein as in effect on another date or dates).

        "GENERAL PARTNER" means the Company and any successor general partner(s)
of the Borrower.

        "GOVERNMENTAL  APPROVAL"  means all  right,  title and  interest  in any
existing or future certificates,  licenses, permits,  variances,  authorizations
and approvals issued by any  Governmental  Authority  having  jurisdiction  with
respect to any Project.

        "GOVERNMENTAL  AUTHORITY"  means any nation or government,  any federal,
state,  local or other political  subdivision  thereof and any entity exercising
executive,  legislative,  judicial, regulatory or administrative functions of or
pertaining to government.

        "GUARANTIES"  means,  collectively,   the  Unconditional  Guaranties  of
Payment,  made by each of the Company,  Reckson FS Limited  Partnership  and the
other Guarantors for the benefit of the Lenders,  in  substantially  the form of
Exhibit L hereto.

        "GUARANTORS"  means,  collectively,  the  Company,  Reckson  FS  Limited
Partnership,  360 Hamilton Plaza LLC,  Metropolitan,  MOP, 275 Broadhollow  LLC,
1055 Washington Boulevard LLC, and any other Affiliate of the Borrower executing
a Guaranty.  Any Guarantor that is the owner or ground lessor of an Unencumbered
Project or Unencumbered  New York City Asset shall be a wholly-owned  Subsidiary
of the Borrower.

        "IMPROVEMENTS" means all buildings, fixtures, structures, parking areas,
landscaping  and  all  other  improvements  whether  existing  now or  hereafter
constructed,  together with all machinery and mechanical,  electrical,  HVAC and
plumbing systems  presently  located thereon and used in the operation  thereof,
excluding (a) any such items owned by utility  service  providers,  (b) any such
items owned by tenants or other third-parties unaffiliated with the Borrower and
(c) any items of personal property.

        "INDEBTEDNESS",  as applied to any Person,  means, at any time,  without
duplication,  (a) all  indebtedness,  obligations  or other  liabilities of such
Person (whether  consolidated or representing the proportionate  interest in any
other Person) (i) for borrowed money (including construction loans) or evidenced
by debt securities, debentures, acceptances, notes or other similar instruments,
and any accrued  interest and fees relating  thereto,  (ii) under profit payment
agreements or in respect of  obligations  to redeem,  repurchase or exchange any
Securities of such Person or to pay dividends in respect of any preferred  stock
(but only to the extent that such Person shall be contractually obligated to pay
the same), (iii) with respect to letters of credit,

                                      -14-
<PAGE>


bankers'  acceptances or similar  facilities issued for such Person's account or
for which such Person otherwise has reimbursement  obligations,  (iv) to pay the
deferred  purchase price of property or services,  except  accounts  payable and
accrued expenses  arising in the ordinary course of business,  (v) in respect of
Capital  Leases  or  so-called  synthetic  leases,  (vi)  which  are  Contingent
Obligations  or (vii) under  indemnities  but only at such time as a claim shall
have  been  made  thereunder;   (b)  all  indebtedness,   obligations  or  other
liabilities  of such Person or others  secured by a Lien on any property of such
Person, whether or not such indebtedness, obligations or liabilities are assumed
by such Person,  all as of such time, but in a case of obligations of others not
assumed by such  Person an amount  not in excess of the value of such  property;
(c) all indebtedness, obligations or other liabilities of such Person in respect
of  interest  rate  contracts,   derivatives   contracts  and  foreign  exchange
contracts, net of liabilities owed to such Person by the counterparties thereon;
(d) all  preferred  stock  and  preferred  equity  interests  subject  (upon the
occurrence of any  contingency or otherwise) to mandatory  redemption in cash by
the holder of such preferred stock or equity  interest;  (e) all preferred stock
and preferred  equity  interests in any  Consolidated  Business  (other than the
Company and the Borrower) which has not provided a Guaranty of the  Obligations;
and (f) all Contractual Obligations with respect to any of the foregoing.

        "INDEMNIFIED MATTERS" has the meaning set forth in Section 14.3.

        "INDEMNITEES" has the meaning set forth in Section 14.3.

        "INITIAL  FUNDING  DATE" means the date on or after the Closing  Date on
which all of the  conditions  described in Section 6.1 have been  satisfied  (or
waived) in a manner satisfactory to the Administrative Agent and the Lenders and
on which the initial  Loans under this  Agreement are made by the Lenders to the
Borrower.

        "INTERNAL  REVENUE  CODE" means the Internal  Revenue  Code of 1986,  as
amended  to the date  hereof  and from  time to time  hereafter,  any  successor
statute and any regulations or guidelines promulgated thereunder.

        "INVESTMENT"  means,  with  respect to any Person,  (i) any  purchase or
other acquisition by that Person of Securities,  or of a beneficial  interest in
Securities,  issued by any other Person, (ii) any purchase by that Person of all
or  substantially  all of the assets of a business  conducted by another Person,
(iii) any  loan,  advance  (other  than  deposits  with  financial  institutions
available  for  withdrawal on demand,  prepaid  expenses,  accounts  receivable,
advances to employees and similar items made or incurred in the ordinary  course
of  business)  or  capital  contribution  by that  Person to any  other  Person,
including  all  Indebtedness  to such Person  arising from a sale of property by
such Person  other than in the  ordinary  course of its  business,  and (iv) any
purchase or other acquisition by that Person of Real Property,  whether directly
or indirectly.  The amount of any Investment  shall be the original cost of such
Investment  (together  with all capital  improvement  costs  thereafter  paid or
incurred with respect to such Investment in accordance  with GAAP),  without any
adjustments  for  increases or decreases in value or write-ups,  write-downs  or
write-offs with respect to such Investment.

        "INVESTMENT FUNDS" means (i) Reckson Strategic Venture Partners LLC, and
(ii) a Person in which  FrontLine  Capital  Group or a  Subsidiary  thereof is a
general  partner or a managing  member,  in the case of a partnership or limited
liability  company,  and which,  in the case of a corporation,  has the right to
elect a majority of the board of directors.

                                      -15-
<PAGE>


        "INVESTMENT GRADE RATING" means a rating for a Person's senior long-term
unsecured  debt of BBB- or better from S&P,  and a rating of Baa3 or better from
Moody's or a rating  equivalent  to the foregoing  from Fitch or another  Rating
Agency.

        "INVITATION   FOR  COMPETITIVE  BID  QUOTES"  means  an  Invitation  for
Competitive Bid Quotes substantially in the form of EXHIBIT I hereto.

        "IRS" means the Internal  Revenue  Service and any Person  succeeding to
the functions thereof.

        "ISSUING BANK" means JPMorgan, or with the consent of the Arrangers (not
to be unreasonably withheld) and the Borrower, another Lender.

        "JOINT  VENTURES" means any interests in  partnerships,  joint ventures,
limited liability companies, trusts, associations and corporations held or owned
directly  or  indirectly  by the  Borrower  and/or  the  Company  which  are not
wholly-owned by the Borrower and/or the Company (other than Investment  Funds or
any  affiliated or  unaffiliated  operating  company that the Borrower  includes
under clause (vii) of the  definition of Total Value,  subject to the limitation
of $100,000,000 investments (valued at the lower of cost or market in accordance
with GAAP)).

        "JOINT   VENTURE   UNENCUMBERED   VALUE"  means  the  portion  of  Total
Unencumbered Value from Joint Ventures attributable to Unencumbered Projects and
Unencumbered New York City Assets.

        "JPMORGAN" means JPMorgan Chase Bank.

        "KNOWLEDGE"  with  reference  to  the  Company,   the  Borrower  or  any
Subsidiary  of any of them,  means the actual  knowledge  of such  Person  after
reasonable inquiry (which reasonable inquiry shall include,  without limitation,
interviewing and questioning such other Persons as the Company,  the Borrower or
such Subsidiary, as applicable, deems reasonably necessary).

        "LAND/DEVELOPMENT   UNENCUMBERED  VALUE"  means  the  portion  of  Total
Unencumbered  Value which is attributable to Unencumbered  assets  consisting of
land and Projects under development.

        "LEASE" means a lease, license,  concession agreement or other agreement
providing for the use or occupancy of any portion of any Project,  including all
amendments,  supplements,  modifications  and  assignments  thereof and all side
letters or side agreements relating thereto.

        "LENDER"  means (i) each financial  institution a signatory  hereto as a
Lender as of the  Closing  Date and, at any other  given  time,  each  financial
institution which is a party hereto as Lender,  whether as a signatory hereto or
pursuant  to an  Assignment  and  Acceptance,  and (ii)  each  Designated  Bank;
PROVIDED,  HOWEVER,  that the term "Lender" shall exclude each  Designated  Bank
when used in reference to a Committed Loan, the Revolving Credit  Commitments or
terms relating to the Committed Loans and the Revolving  Credit  Commitments and
shall further  exclude each  Designated  Bank for all other  purposes  hereunder
except  that any  Designated  Bank which  funds a  Competitive  Bid Loan  shall,
subject to Section 14.1(f), have the rights (including,  without limitation, the
rights given to a Lender contained in Section 14.2 and otherwise in Article XIV)
and obligations of a Lender associated with holding such Competitive Bid Loan.

                                      -16-
<PAGE>


        "LENDER AFFILIATE" means with respect to any Lender an Affiliate of such
Lender.

        "LETTER  OF  CREDIT"  means any  Commercial  Letter of Credit or Standby
Letter of Credit.

        "LETTER OF CREDIT FEE" has the meaning set forth in Section 5.3(a).

        "LETTER OF CREDIT OBLIGATIONS" means, at any particular time, the sum of
(i) all outstanding  Reimbursement  Obligations,  and (ii) the aggregate undrawn
face amount of all outstanding  Letters of Credit,  and (iii) the aggregate face
amount of all Letters of Credit requested by the Borrower but not yet issued.

        "LETTER OF CREDIT  REIMBURSEMENT  AGREEMENT"  means,  with  respect to a
Letter of Credit,  such form of application  therefor and form of  reimbursement
agreement therefor (whether in a single or several documents, taken together) as
an  Issuing  Bank may  employ in the  ordinary  course of  business  for its own
account,  with such modifications  thereto as may be agreed upon by such Issuing
Bank and the Borrower and as are not materially adverse (in the judgment of such
Issuing  Bank and the  Administrative  Agent) to the  interests  of the Lenders;
PROVIDED,  HOWEVER, in the event of any conflict between the terms of any Letter
of  Credit  Reimbursement  Agreement  and  this  Agreement,  the  terms  of this
Agreement shall control.

        "LIABILITIES   AND   COSTS"   means   all   liabilities,    obligations,
responsibilities,  losses,  damages,  personal injury,  death, punitive damages,
economic damages, consequential damages, treble damages, intentional, willful or
wanton injury, damage or threat to the environment,  natural resources or public
health or welfare, costs and expenses (including, without limitation,  attorney,
expert and consulting fees and costs of  investigation,  feasibility or Remedial
Action studies),  fines, penalties and monetary sanctions,  interest,  direct or
indirect, known or unknown, absolute or contingent, past, present or future.

        "LIBOR  AUCTION" means a solicitation  of Competitive Bid Quotes setting
forth  Competitive  Bid Margins based on the Eurodollar Rate pursuant to Section
2.2.

        "LIEN"  means  any  mortgage,  deed  of  trust,  pledge,  hypothecation,
assignment,  conditional sale agreement, deposit arrangement, security interest,
encumbrance,  lien (statutory or other and including,  without  limitation,  any
Environmental  Lien),  preference,  priority  or  other  security  agreement  or
preferential  arrangement  of any kind or nature  whatsoever  in  respect of any
property  of a Person,  whether  granted  voluntarily  or  imposed  by law,  and
includes the interest of a lessor under a Capital  Lease or under any  financing
lease having substantially the same economic effect as any of the foregoing.

        "LIMITED PARTNERS" means those Persons who from time to time are limited
partners  of the  Borrower;  and  "LIMITED  PARTNER"  means each of the  Limited
Partners, individually.

        "LOAN ACCOUNT" has the meaning set forth in Section 4.3(b).

        "LOAN DOCUMENTS" means this Agreement, the Notes and the Guaranties.

        "LOANS" means Committed Loans and Competitive Bid Loans.

        "MANAGEMENT  COMPANY" means,  collectively (i) Reckson Management Group,
Inc., a Delaware  corporation,  RANY Management Group, Inc. and their respective
wholly-owned or

                                      -17-
<PAGE>


controlled  Subsidiaries  and (ii)  such  other  property  management  companies
controlled  (directly  or  indirectly)  by the Company or the Borrower and which
property  management  companies  manage  properties  owned by the  Company,  the
Borrower and its Subsidiaries and for which the Borrower has previously provided
the Administrative  Agent with: (1) notice of such property  management company,
(2)  evidence  reasonably  satisfactory  to the  Administrative  Agent that such
property  management  company is  controlled  (directly  or  indirectly)  by the
Company  or the  Borrower,  and  (3)  evidence  reasonably  satisfactory  to the
Administrative  Agent that such property  management  company manages properties
owned, in whole or in part by the Company or the Borrower or its Subsidiaries.

        "MARGIN STOCK" means "margin  stock" or "margin  security" as such terms
are defined in Regulation U and Regulation X.

        "MATERIAL  ADVERSE EFFECT" means a material  adverse effect upon (i) the
financial   condition  or  assets  of  the  Company,   the  Borrower  and  their
Subsidiaries  taken as a whole,  (ii) the ability of the Borrower to perform its
material  obligations  under  the  Loan  Documents,  (iii)  the  ability  of the
Guarantors to perform their material  obligations under the Guaranties,  or (iv)
the  ability of the  Lenders or the  Administrative  Agent to enforce any of the
Loan Documents.

        "MAXIMUM  REVOLVING  CREDIT AMOUNT" means,  at any particular  time, the
Revolving Credit Commitments at such time.

        "METROPOLITAN"  means  Metropolitan  Partners,  LLC, a Delaware  limited
liability  company,  in which the  Borrower  currently  owns 100% of the  common
equity interests.

        "MOODY'S" means Moody's Investors Service, Inc.

        "MOP" means Metropolitan Operating Partnership, L.P., a Delaware limited
partnership, and a Subsidiary of Metropolitan.

        "MULTIEMPLOYER  PLAN" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA which is, or within the immediately  preceding six (6) years
was,  contributed to by either the Borrower or any ERISA Affiliate or in respect
of which the Borrower or any ERISA Affiliate has assumed any liability.

        "NET CASH  PROCEEDS"  means all cash when and as received in  connection
with the sale or refinancing of any asset,  less reasonable  costs and expenses,
repayment of secured  indebtedness with respect to the applicable asset, and net
of an amount  equal to taxable  capital  gains and real  estate  transfer  taxes
payable in connection with any asset sale.

        "NET INCOME" means,  with respect to any Person,  the net income of such
Person determined in accordance with GAAP.

        "NET OFFERING  PROCEEDS"  means all cash or other assets received by the
Company  or the  Borrower  as a result of the sale of common  shares,  preferred
shares, partnership interests, limited liability company interests,  convertible
securities  or  other  ownership  or  equity  interests  in the  Company  or the
Borrower,  less customary costs,  expenses and discounts of issuance paid by the
Company or the Borrower, as the case may be.

                                      -18-
<PAGE>


        "NEW  YORK  CITY  ASSET"  means  Real  Property  which is Class A office
property  located in the borough of Manhattan,  New York,  New York and which is
owned or ground-leased by one of the Consolidated Businesses or Joint Ventures.

        "NOI" means (x) net operating income determined in accordance with GAAP,
before gains or losses from  extraordinary  items relating to any Real Property,
plus  (y)  (i)  any  interest  expense  relating  to such  Real  Property,  (ii)
depreciation and amortization relating to such Real Property, and (iii) Property
Level G&A to the extent  included in the  calculation  of net operating  income,
less (z) (i) free rent and accrued  rent with  respect to tenants  that are more
than 90 days in arrears in the payment of rent, and further adjusted to omit the
straight line  treatment of rent, so as to account for rent on an accrual basis,
(ii) any interest income  relating to such Real Property,  and (iii) the greater
of Property Level G&A to the extent included in the calculation of net operating
income and an amount  equal to 2% of gross  revenues  with  respect to such Real
Property.

        "NON PRO RATA LOAN" has the meaning set forth in Section 4.2(b)(v).

        "NON-RECOURSE  CARVE-OUTS" means exceptions to non-recourse obligations,
such as fraud,  misappropriation,  waste,  environmental  liabilities,  improper
transfer and breach of  restrictions  on further  financing and breach of single
purpose entity covenants,  which are usual and customary in secured transactions
involving institutional lenders or securitized financings and recourse to single
purpose entities that are Consolidated  Businesses which have no material assets
other than the Real Property or Properties  which are the subject of the Secured
Indebtedness.

        "NOTE" means the Borrower Notes and the Designated Lender Notes; "Notes"
means, collectively, all of such Notes outstanding at any given time.

        "NOTICE OF BORROWING" means a Notice of Committed  Borrowing or a Notice
of Competitive Bid Borrowing.

        "NOTICE OF COMMITTED BORROWING" means a notice substantially in the form
of Exhibit C attached hereto and made a part hereof.

        "NOTICE OF  COMPETITIVE  BID  BORROWING"  has the  meaning  set forth in
Section 2.2(f).

        "NOTICE OF CONVERSION/CONTINUATION"  means a notice substantially in the
form of  EXHIBIT D  attached  hereto and made a part  hereof  with  respect to a
proposed conversion or continuation of a Loan pursuant to Section 5.1(c).

        "OBLIGATIONS" means all Loans, advances, debts, liabilities and monetary
obligations owing by the Borrower to the  Administrative  Agent, the Syndication
Agent,  each  Documentation  Agent,  any  Lender,  or  any  Person  entitled  to
indemnification  pursuant  to  Section  14.3 of this  Agreement,  of any kind or
nature, arising under this Agreement,  the Notes or any other Loan Document. The
term includes, without limitation, all interest,  charges,  reasonable expenses,
fees,  reasonable attorneys' fees and disbursements and any other sum chargeable
to the Borrower under this Agreement or any other Loan Document.

        "OFFICER'S  CERTIFICATE"  means,  as  to a  corporation,  a  certificate
executed on behalf of such corporation by the chairman of its board of directors
(if an officer of such corporation) or its chief executive  officer,  president,
any of its  vice-presidents,  its chief financial officer, or its treasurer and,
as to a partnership, a certificate executed on behalf of such partnership by the

                                      -19-
<PAGE>


chairman of the board of directors (if an officer of such  corporation) or chief
executive officer,  president,  any vice-president,  or treasurer of the general
partner of such partnership.

        "OPERATING ACCOUNT" has the meaning set forth in Section 9.11 hereof.

        "OPERATING  LEASE"  means,  as applied to any  Person,  any lease of any
property (whether real, personal or mixed) by that Person as lessee which is not
a Capital Lease.

        "ORGANIZATIONAL  DOCUMENTS"  means,  with  respect  to any  corporation,
limited  liability  company,  or  partnership  (i) the  articles/certificate  of
incorporation (or the equivalent  organizational  documents) of such corporation
or limited liability  company,  (ii) the partnership  agreement  executed by the
partners in such  partnership,  (iii) the by-laws (or the  equivalent  governing
documents) of such corporation,  limited  liability company or partnership,  and
(iv) any document setting forth the designation,  amount and/or relative rights,
limitations and preferences of any class or series of such corporation's Capital
Stock or such limited liability  company's or partnership's  equity or ownership
interests.

        "ORIGINAL  REVOLVING CREDIT  AGREEMENT" has the meaning set forth in the
recitals.

        "ORIGINAL  TERM  LOAN  AGREEMENT"  has  the  meaning  set  forth  in the
recitals.

        "OSHA" means the  Occupational  Safety and Health Act of 1970, 29 U.S.C.
ss.ss.  651 et seq.,  any  amendments  thereto,  any successor  statutes and any
regulations or guidelines promulgated thereunder.

        "OTHER   MANAGEMENT   COMPANY"  means  property   management   companies
controlled  (directly or  indirectly)  by the Company or the Borrower  which may
manage properties owned by third parties.

        "PBGC" means the Pension  Benefit  Guaranty  Corporation  and any Person
succeeding to the functions thereof.

        "PERFORMING  NOTES" means  mortgage  notes,  notes  receivable and other
investments in Real Property (other than investments in or loans to, directly or
indirectly, an Investment Fund, or joint venture arrangements with an Investment
Fund,  or  an  affiliated  or  unaffiliated  operating  company  in  which  such
Investment  Fund or joint venture  arrangements  with an Investment Fund owns an
equity interest),  valued at the lower of cost or market in accordance with GAAP
and which are not more than 30 days past due or otherwise in default;  provided,
that, in the case of mortgage notes,  notes receivable and other  investments in
Real Property that generate  cash and non-cash  payments,  such mortgage  notes,
notes  receivable  and other  investments  in Real Property  shall be treated as
Performing  Notes  whose value is  determined  solely by  reference  to the cash
payments and references to the income  generated by the  Performing  Notes shall
include only the cash payments which have current payments payable in cash.

        "PERMITS" means any permit,  consent,  approval,  authorization license,
variance,  or permission  required from any Person,  including any  Governmental
Approvals.

        "PERMITTED   SECURITIES  OPTIONS"  means  the  subscriptions,   options,
warrants,  rights,  convertible  Securities and other  agreements or commitments
relating to the issuance of the Borrower's  Securities or the Company's  Capital
Stock identified as such on SCHEDULE 1.1.2.

                                      -20-
<PAGE>


        "PERSON"  means  any  natural  person,  corporation,  limited  liability
company,  limited partnership,  general partnership,  joint stock company, joint
venture, association,  company, trust, bank, trust company, land trust, business
trust or other organization, whether or not a legal entity, and any Governmental
Authority.

        "PLAN" means a Benefit Plan or a Multiemployer Plan.

        "POTENTIAL  EVENT OF DEFAULT"  means an event which,  with the giving of
notice or the lapse of time, or both, would constitute an Event of Default.

        "PREPAYMENT DATE" has the meaning set forth in Section 4.1(d).

        "PROJECT"   means  any  office  or   industrial   properties   owned  or
ground-leased,  directly or indirectly, by any of the Consolidated Businesses or
Joint Ventures.

        "PROPERTY"  means  any  Real  Property  or  personal  property,   plant,
building, facility,  structure,  equipment,  general intangible,  receivable, or
other asset owned or leased by any  Consolidated  Business or any Joint Venture.
The definition of "Property" shall  specifically  exclude items of Real Property
or personal property owned or leased by members of the Rechler family.

        "PROPERTY LEVEL G&A" means general and administrative expenses allocated
to the Properties.

        "PRO RATA  SHARE"  means,  with  respect to any Lender,  the  percentage
obtained by dividing (i) such  Lender's  Revolving  Credit  Commitment  (in each
case, as adjusted from time to time in  accordance  with the  provisions of this
Agreement or any  Assignment  and Acceptance to which such Lender is a party) by
(ii) the aggregate  amount of all of the Revolving Credit  Commitments.  The Pro
Rata Share of each Lender is set forth  opposite  such Lender's name on SCHEDULE
LC hereto or in the Assignment  and Acceptance by which it became a Lender,  and
shall be modified from time to time pursuant to this Agreement.

        "QUALIFIED  JOINT VENTURE  PARTNERS" means (a) pension funds,  insurance
companies,  banks, investment banks or similar institutional entities, each with
significant  experience in making  investments in commercial real estate and (b)
commercial  real estate  companies of similar  quality and  experience.

        "RATING    AGENCY"    means    Moody's,    S&P,    Fitch   or    another
nationally-recognized    rating   agency   reasonably    satisfactory   to   the
Administrative Agent.

        "RCRA" means the  Resource  Conservation  and  Recovery Act of 1976,  42
U.S.C. ss.ss. 6901 ET SEQ., any amendments thereto, any successor statutes,  and
any regulations or guidelines promulgated thereunder.

        "REAL  PROPERTY"  means  all  of the  Borrower's  and  the  Consolidated
Businesses'  present and future right,  title and interest  (including,  without
limitation,  any leasehold estate) in (i) any plots,  pieces or parcels of land,
(ii) any  Improvements  of every  nature  whatsoever  (the rights and  interests
described  in  clauses  (i) and (ii)  above  being  the  "PREMISES"),  (iii) all
easements,  rights of way, gores of land or any lands occupied by streets, ways,
alleys,  passages,  sewer rights,  water courses,  water rights and powers,  and
public places adjoining such land, and any other interests in

                                      -21-
<PAGE>


property constituting appurtenances to the Premises, or which hereafter shall in
any way belong,  relate or be appurtenant thereto, and (iv) all other rights and
privileges  thereunto  belonging or appertaining and all extensions,  additions,
improvements, betterments, renewals, substitutions and replacements to or of any
of the rights and interests described in clause (iii) above.

        "RECKSON" means Reckson Operating Partnership,  L.P., a Delaware limited
partnership.

        "REFERENCE BANK" means JPMorgan.

        "REGISTER" has the meaning set forth in Section 14.1(c).

        "REGULATION  A" means  Regulation A of the Federal  Reserve  Board as in
effect from time to time.

        "REGULATION  T" means  Regulation T of the Federal  Reserve  Board as in
effect from time to time.

        "REGULATION  U" means  Regulation U of the Federal  Reserve  Board as in
effect from time to time.

        "REGULATION  X" means  Regulation X of the Federal  Reserve  Board as in
effect from time to time.

        "REIMBURSEMENT DATE" has the meaning set forth in Section 3.1(d)(i)(A).

        "REIMBURSEMENT   OBLIGATIONS"   means   the   aggregate   non-contingent
reimbursement  or repayment  obligations of the Borrower with respect to amounts
drawn under Letters of Credit.

        "REIT" means a domestic  trust or  corporation  that qualifies as a real
estate  investment  trust under the  provisions of Sections 856, ET SEQ., of the
Internal Revenue Code.

        "RELEASE" means any release, spill, emission, leaking, pumping, pouring,
dumping,  injection,  deposit, disposal,  abandonment, or discarding of barrels,
containers  or  other  receptacles,   discharge,  emptying,  escape,  dispersal,
leaching or migration  into the indoor or outdoor  environment or into or out of
any  Property,  including  the movement of  Contaminants  through or in the air,
soil, surface water, groundwater or Property.

        "REMEDIAL ACTION" means actions required to (i) clean up, remove,  treat
or in any other way address  Contaminants in the indoor or outdoor  environment;
(ii) prevent the Release or threat of Release or minimize the further Release of
Contaminants;  or (iii)  investigate  and  determine  if a remedial  response is
needed  and  to  design  such  a  response  and   post-remedial   investigation,
monitoring, operation and maintenance and care.

        "REPORTABLE  EVENT" means any of the events described in Section 4043(c)
of ERISA and the  regulations  promulgated  thereunder as in effect from time to
time but not  including  any such event as to which the  thirty  (30) day notice
requirement has been waived by applicable PBGC regulations.

        "REQUIREMENTS  OF LAW" means, as to any Person,  the charter and by-laws
or other organizational or governing documents of such Person, and any law, rule
or regulation, or

                                      -22-
<PAGE>


determination of an arbitrator or a court or other  Governmental  Authority,  in
each case applicable to or binding upon such Person or any of its property or to
which  such  Person  or  any of  its  property  is  subject  including,  without
limitation,  the Securities Act, the Securities  Exchange Act,  Regulations T, U
and X, ERISA, the Fair Labor Standards Act, the Worker Adjustment and Retraining
Notification  Act,  Americans with Disabilities Act of 1990, and any certificate
of occupancy, zoning ordinance, building,  environmental or land use requirement
or Permit and Environmental, Health or Safety Requirement of Law.

        "REQUISITE  LENDERS"  means  Lenders  whose  Pro  Rata  Shares,  in  the
aggregate,  are  equal to or  greater  than  sixty-six  and  two-thirds  percent
(66.67%);  provided,  however,  that, in the event any of the Lenders shall have
failed to fund its Pro Rata Share of any Loan  requested by the  Borrower  which
such  Lenders are  obligated to fund under the terms of this  Agreement  and any
such failure has not been cured as provided in Section 4.2(b)(v)(B), then for so
long as such failure continues, "Requisite Lenders" means Lenders (excluding all
Lenders  whose  failure to fund their  respective  Pro Rata Shares of such Loans
have not been so cured) whose Pro Rata Shares represent sixty-six and two-thirds
percent  (66.67%)  or more of the  aggregate  Pro Rata  Shares of such  Lenders;
PROVIDED,  FURTHER,  HOWEVER,  that,  in the  event  that the  Revolving  Credit
Commitments  have  been  terminated  pursuant  to the  terms of this  Agreement,
"Requisite  Lenders" means Lenders (without regard to such Lenders'  performance
of their  respective  obligations  hereunder)  whose  aggregate  ratable  shares
(stated as a percentage) of the aggregate  outstanding  principal balance of all
Loans are sixty-six and two-thirds percent (66.67%) or more.

        "RESTRICTED PAYMENT" has the meaning set forth in Section 10.11(h).

        "REVOLVING  CREDIT  AVAILABILITY"  means,  at any  particular  time, the
amount by which the Maximum  Revolving  Credit  Amount at such time  exceeds the
Revolving Credit Obligations at such time.

        "REVOLVING CREDIT  COMMITMENT"  means,  with respect to any Lender,  the
obligation of such Lender to make Committed  Loans and to participate in Letters
of Credit  pursuant to the terms and  conditions  of this  Agreement,  and which
shall not exceed the principal  amount set forth  opposite such Lender's name on
SCHEDULE  LC hereto or in the  Assignment  and  Acceptance  by which it became a
Lender, as modified from time to time pursuant to the terms of this Agreement or
to give effect to any  applicable  Assignment  and  Acceptance,  and  "REVOLVING
CREDIT COMMITMENTS" means the aggregate principal amount of the Revolving Credit
Commitments  of  all  the  Lenders,   the  maximum  amount  of  which  shall  be
$500,000,000  as such  amount  may be  increased  or  reduced  from time to time
pursuant to Sections 2.1(b) and 4.1.

        "REVOLVING CREDIT OBLIGATIONS" means, at any particular time, the sum of
(i) the outstanding  principal  amount of the Committed Loans at such time, PLUS
(ii) the Letter of Credit  Obligations at such time,  plus (iii) the outstanding
principal amount of the Competitive Bid Loans at such time.

        "REVOLVING CREDIT PERIOD" means the period from the Initial Funding Date
to the Business Day next preceding the Revolving Credit Termination Date.

        "REVOLVING  CREDIT  TERMINATION  DATE" means the earlier to occur of (i)
August 6, 2007 (or, if not a Business Day, the next preceding  Business Day), as
such date may extended as described below in this definition,  and (ii) the date
of termination of the Revolving Credit Commitments pursuant to the terms of this
Agreement.  The  Borrower  may, by written  notice to

                                      -23-
<PAGE>


the Administrative Agent (which shall promptly notify each of the Lenders) given
at least sixty (60) days prior to the Revolving Credit  Termination Date, extend
the  Revolving  Credit  Termination  Date  for one (1)  year,  PROVIDED  that no
Potential  Event of  Default  or Event of Default  shall  have  occurred  and be
continuing on the date of such written  notice and on the effective date of such
extension and that the Borrower  pays an aggregate  extension fee equal to 0.25%
of the then existing Revolving Credit  Commitments (to the Administrative  Agent
for the ratable benefit of the Lenders).

        "S&P" means Standard & Poor's Ratings Services, a division of The McGraw
Hill Companies, Inc.

        "SECURED INDEBTEDNESS" means any Indebtedness secured by a Lien.

        "SECURITIES"  means  any  stock,  shares,   voting  trust  certificates,
partnership  interests,   bonds,   debentures,   notes  or  other  evidences  of
indebtedness,  secured or unsecured, convertible,  subordinated or otherwise, or
in general any instruments  commonly known as "securities",  including,  without
limitation,  any  "security"  as such term is defined  in  Section  8-102 of the
Uniform   Commercial  Code,  or  any  certificates  of  interest,   shares,   or
participations  in  temporary  or  interim  certificates  for  the  purchase  or
acquisition  of, or any right to  subscribe  to,  purchase or acquire any of the
foregoing,  but  shall  not  include  the  Notes or any  other  evidence  of the
obligations.

        "SECURITIES  ACT" means the Securities Act of 1933, as amended from time
to time, and any successor statute.

        "SECURITIES  EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.

        "SERVICING  EBITDA" means, with respect to the Management Company or any
other service company owned by the Borrower or the Company,  as of the first day
of each fiscal quarter for the immediately  preceding fiscal quarter, an amount,
determined in accordance with GAAP, equal to (i) total earnings relating to such
companies'  operations  adjusted to exclude  amounts  that are more than 90 days
delinquent,  LESS (ii) total  operating  expenses  relating to such  operations,
including corporate marketing, general and administrative expenses.

        "SOLVENT",  when used with respect to any Person, means that at the time
of determination:

                (i)     the fair  saleable  value of its  assets is in excess of
        the total  amount of its  liabilities  (including,  without  limitation,
        contingent liabilities); and

                (ii)    the present fair saleable value of its assets is greater
        than its probable  liability on its existing  debts as such debts become
        absolute and matured; and

                (iii)   it is then able and  expects to be able to pay its debts
        (including, without limitation,  contingent debts and other commitments)
        as they mature; and

                (iv)    it has capital  sufficient  to carry on its  business as
        conducted and as proposed to be conducted.

                                      -24-
<PAGE>


        "STANDBY  LETTER  OF  CREDIT"  means any  letter of credit  issued by an
Issuing Bank pursuant to Section 3.1 for the account of the  Borrower,  which is
not a Commercial Letter of Credit.

        "SUBSIDIARY"  of a  Person  means  any  corporation,  limited  liability
company, general or limited partnership,  or other entity of which securities or
other  ownership  interests  having ordinary voting power to elect a majority of
the board of directors or other persons  performing similar functions are at the
time directly or indirectly  owned or controlled by such Person,  one or more of
the other subsidiaries of such Person or any combination thereof.

        "SYNDICATION AGENT" means Wells Fargo Bank, National Association, in its
capacity as syndication agent for the Lenders.

        "TAXES" has the meaning set forth in Section 13.1(a).

        "TELERATE PAGE 3750" means the display known as "Telerate Page 3750" (or
such other page as may replace Telerate Page 3750 as the display of such service
(other than  Telerate  Service)  as may be  nominated  by the  British  Bankers'
Association  as the  information  vendor for the purpose of  displaying  British
Bankers' Association interest settlement rates for U.S. Dollar deposits).

        "TENANT  ALLOWANCE"  means  a cash  allowance  paid to a  tenant  by the
landlord pursuant to a Lease.

        "TI  WORK"  means  any  construction  or  other  "build  out" of  tenant
leasehold  improvement  to the space  demised to the  applicable  tenant under a
Lease  (excluding  such tenant's  furniture,  fixtures and equipment)  performed
pursuant to the terms of such Lease, whether or not such tenant improvement work
is performed by or on behalf of the landlord or as part of a Tenant Allowance.

        "TOTAL ADJUSTED EBITDA" means, for any quarterly period,  (i) net income
determined  in  accordance  with  GAAP,   PLUS  (ii)  Total  Interest   Expense,
depreciation  and  amortization  deducted in the calculation of such net income,
PLUS (iii) taxes on income deducted in the calculation of such net income,  LESS
(iv) the gains (and plus the losses)  from  extraordinary  items,  asset  sales,
write-ups, debt forgiveness,  asset impairments,  mark to market adjustments for
marketable  securities  or fair market  valuation  adjustments  for  derivatives
included in the calculation of such net income, LESS (v) the Capital Expenditure
Coverage Reserve Amounts divided by four.

        "TOTAL  INTEREST  EXPENSE" means the sum of (i) interest  expense of the
Consolidated Businesses paid during such period and (ii) interest expense of the
Consolidated Businesses accrued and/or capitalized for such period and (iii) the
pro-rata  portion of the  interest  expense of Joint  Ventures  allocable to the
Borrower  and paid  during  such  period  and (iv) the  pro-rata  portion of the
interest  expense of Joint  Ventures  allocable to the Borrower  accrued  and/or
capitalized  for such  period,  in each case  including  participating  interest
expense but excluding extraordinary interest expense, and net of amortization of
deferred  costs  associated  with new  financings  or  refinancings  of existing
Indebtedness.

        "TOTAL OUTSTANDING  INDEBTEDNESS"  means, for any period, the sum of (i)
the amount of Indebtedness of the Consolidated  Businesses set forth on the then
most  recent  quarterly  financial  statements  of  the  Borrower,  prepared  in
accordance  with  GAAP,  PLUS  any  additional   Indebtedness  incurred  by  the
Consolidated Businesses since the time of such statements, LESS any Indebtedness

                                      -25-
<PAGE>


repaid by the Consolidated  Businesses  since the time of such  statements,  and
(ii) the outstanding amount of Joint Venture  Indebtedness set forth on the then
most recent  quarterly  financial  statements of the Borrower or the  applicable
Joint  Venture,  prepared in accordance  with GAAP,  PLUS any  additional  Joint
Venture  Indebtedness  incurred  by the  Joint  Ventures  since the time of such
statements, LESS any Indebtedness repaid by the Joint Ventures since the time of
such  statements;  PROVIDED  that all of the  foregoing  shall only  include the
Consolidated  Businesses'  pro rata  share  of the  outstanding  and  additional
Indebtedness,  as the case may be, with respect to any Joint Venture,  and (iii)
the  Contingent  Obligations  of the  Consolidated  Businesses  and the pro-rata
portion  of  Contingent  Obligations  of the  Joint  Ventures  allocable  to the
Consolidated Businesses.

        "TOTAL RECOURSE SECURED  OUTSTANDING  INDEBTEDNESS"  means Total Secured
Outstanding  Indebtedness  under  the  terms  of which  any of the  Consolidated
Businesses  guarantees  or  is  directly  obligated  for  any  portion  of  such
Indebtedness or interest payments thereon (other than Non-Recourse  Carve-Outs),
including,  without limitation, the pro rata share of such recourse Indebtedness
of Joint Ventures allocable to any of the Consolidated Businesses.

        "TOTAL  SECURED  OUTSTANDING  INDEBTEDNESS"  means  the sum of (i)  that
portion of Total Outstanding  Indebtedness that is secured by a Lien, including,
without  duplication,  the pro  rata  share of such  Indebtedness  that is Joint
Venture Indebtedness allocable to any of the Consolidated Businesses,  PLUS (ii)
that portion of Total  Outstanding  Indebtedness  attributable  to  Consolidated
Subsidiaries  of the Borrower (or the Joint  Ventures)  which is recourse to the
Borrower  or any of  the  Consolidated  Subsidiaries  (other  than  Non-Recourse
Carve-Outs),  regardless of whether it is secured by a Lien (it being understood
that this definition shall not include the Loans hereunder).

        "TOTAL UNENCUMBERED VALUE" means the portion of Total Value attributable
to (x) Unencumbered assets (including,  without limitation, the Unencumbered New
York City Assets and the other Unencumbered  Projects,  but excluding Investment
Funds and  service  company  income)  owned or  ground-leased  under an Eligible
Ground Lease by the  Consolidated  Businesses and the Joint Ventures and (y) the
Eligible Encumbered Properties, subject to the limitations set forth in the next
paragraph and the following  conditions and limitations:  (i) only the amount of
unrestricted  Cash  and Cash  Equivalents  in  excess  of  $40,000,000  shall be
included;  (ii) Joint Venture Unencumbered Value for Joint Ventures in which the
Borrower's  beneficial  economic  interest is fifty-one percent (51%) or greater
shall be included,  PROVIDED  the sale or  financing  of any  Property  owned or
ground-leased by such Joint Venture is substantially controlled by the Borrower,
subject to customary  provisions  set forth in the  organizational  documents of
such Joint Venture with respect to financings,  sales or rights of first refusal
granted to other members of such Joint Venture; (iii) Joint Venture Unencumbered
Value for Joint Ventures in which the Borrower's beneficial economic interest is
less than fifty-one percent (51%) shall be included, provided that a majority of
the beneficial  economic  interests in such Joint Ventures that are not owned by
the  Consolidated  Businesses is owned or controlled by Qualified  Joint Venture
Partners;   (iv)  the  portion  of  Total  Unencumbered  Value  attributable  to
Performing  Notes shall be included;  (v)  Land/Development  Unencumbered  Value
shall be included; and (vi) the portion of Total Unencumbered Value attributable
to Unencumbered  office and industrial  Projects owned or ground-leased under an
Eligible  Ground  Lease by the  Consolidated  Businesses  for less than four (4)
fiscal  quarters and which have  received a  certificate  of occupancy  shall be
included.

        Clause  (ii)  above  shall  not  exceed  twenty  percent  (20%) of Total
Unencumbered  Value.  Clause  (iii) shall not exceed five  percent (5%) of Total
Unencumbered  Value. Clause (iv) above

                                      -26-
<PAGE>


shall not exceed fifteen percent (15%) of Total Unencumbered  Value.  Clause (v)
above shall not exceed ten percent (10%) of Total Unencumbered Value. The sum of
clauses (iii), (iv) and (v) above shall not exceed twenty percent (20%) of Total
Unencumbered Value.

        "TOTAL  UNSECURED  OUTSTANDING  INDEBTEDNESS"  means the sum of (a) that
portion of Total Outstanding Indebtedness that is not secured by a Lien plus (b)
that portion of Total  Outstanding  Indebtedness that is secured by a Lien on an
Eligible Encumbered  Property.  Without limiting the foregoing,  Total Unsecured
Outstanding Indebtedness shall include, without double counting, (i) all amounts
outstanding  under this Agreement,  (ii) all  Indebtedness  of the  Consolidated
Businesses,   including  the   Consolidated   Businesses'   pro  rata  share  of
Indebtedness  of Joint  Ventures,  which is not  secured  by a Lien,  (iii)  all
outstanding  undrawn letters of credit of the  Consolidated  Businesses (and the
pro rata share of such letters of credit  allocable  to any of the  Consolidated
Businesses) LESS those outstanding  undrawn letters of credit for the benefit of
any  tenant,  prospective  tenant or lender at any Real  Property  to secure the
Consolidated Businesses' leasing obligations relating to tenant improvement work
or third party leasing commissions which have previously been paid, as evidenced
by a schedule  provided  by the  Borrower to the  Administrative  Agent upon the
request of the Administrative Agent.

        "TOTAL  VALUE"  means (a) the sum of (i)  Valuation  NOI  divided by (A)
eight  and  one-half  percent  (8.50%)  for all New York City  Assets,  (B) nine
percent  (9.00%) for all other office Real  Property,  and (C) nine and one-half
percent (9.50%) for industrial Real Property;  (ii) the Investment in office and
industrial  Projects owned or ground-leased  by the Consolidated  Businesses for
less than four fiscal quarters;  (iii)  unrestricted  Cash and Cash Equivalents;
(iv) land cost (at book value) and Construction Asset Cost, which credit will be
limited to fifteen  percent  (15%) of Total Value  (exclusive  of  build-to-suit
Projects that are  seventy-five  percent (75%)  pre-leased or Projects which are
less than  seventy-five  percent (75%)  pre-leased but have a pro-forma yield of
ten  percent  (10%)  or  more,  based  upon  executed  leases  and  the  cost of
acquisition  plus the estimated cost to complete the same,  which estimated cost
to  complete  shall be  determined  in a  manner  reasonably  acceptable  to the
Administrative  Agent and the  Syndication  Agent);  (v) NOI from all other Real
Property not otherwise set forth in this  definition,  divided by twelve percent
(12%);  (vi) Servicing  EBITDA of the  Management  Company or other such service
companies for the immediately preceding four (4) consecutive  quarters,  divided
by twenty percent (20%); (vii) any investment in or loan to (based on the actual
cash  investment  in or loan to),  directly  or  indirectly,  an  affiliated  or
unaffiliated  operating  company and investments in or loans to Investment Funds
either  directly or  indirectly or joint venture  arrangements  with  Investment
Funds, which credit will be limited to $100,000,000 (valued at the lower of cost
or market in accordance with GAAP),  other than (x) investments in, loans to, or
joint venture  arrangements with Joint Ventures and (y) Performing Notes; (viii)
Performing  Notes,  which  credit  will be limited in the  aggregate  to fifteen
percent (15%) of Total Value; and (ix) Eligible Cash 1031 Proceeds;

LESS (b) the quotient of the Capital  Expenditure  Valuation Reserve Amounts for
such period,  divided by (A) eight and one-half percent (8.50%) for all New York
City Assets,  (B) nine percent  (9.00%) for all other office  Property,  and (C)
nine and one-half percent (9.50%) for industrial Property; and

PROVIDED,  the sum of items (a) (iv),  (vii) and (viii)  above  shall not exceed
twenty-five percent (25%) of Total Value.

        "2000 CREDIT AGREEMENT" has the meaning set forth in the recitals.

                                      -27-
<PAGE>


        "2002 CREDIT AGREEMENT" has the meaning set forth in the recitals.

        "UNENCUMBERED" means, with respect to any asset (other than a Project or
a New York City Asset) as of any date of  determination,  that such  asset,  the
equity interests in such asset and the revenues  generated by such asset are not
subject to any Liens (excluding  Customary  Permitted Liens) or preferred equity
interests.

        "UNENCUMBERED  NEW YORK CITY ASSET" means any Unencumbered  Project that
is a New York City Asset.

        "UNENCUMBERED  PROJECT"  means any Project  located in the United States
that on any  date of  determination:  (a) is  owned  or  ground-leased  under an
Eligible Ground Lease, (b) is not subject (nor are any equity interests  therein
subject) to any Liens (excluding  Customary Permitted Liens) or preferred equity
interests,  (c) has  been  improved  with  Improvements  which  (except  for any
portions of the Project  being  restored  or  renovated)  (1) have been issued a
certificate of occupancy (where available) or is otherwise lawfully occupied for
its intended  use,  and (2) are fully  operational,  including in each case,  an
Unencumbered  Project that is being renovated or restored and such renovation is
proceeding to completion  without undue delay from Permit  denial,  construction
delays or otherwise, (d) has not been the subject of an event or occurrence that
has had a  Material  Adverse  Effect,  and (e) if owned or  ground  leased  by a
wholly-owned  Subsidiary  of the  Borrower,  such  Subsidiary  has  executed and
delivered a Guaranty.

        "UNIFORM  COMMERCIAL CODE" means the Uniform  Commercial Code as enacted
in the State of New York, as it may be amended from time to time.

        "UNSECURED INTEREST EXPENSE" means the interest expense paid, accrued or
capitalized on the Total Unsecured  Outstanding  Indebtedness for the applicable
period.

        "VALUATION NOI" means, with respect to any office or industrial  Project
or  any  office  or  industrial  Joint  Venture  (exclusive  of  projects  under
development)  which has been owned or ground-leased by the Borrower for not less
than four consecutive  quarters,  as of the first day of each fiscal quarter, an
amount  equal to the NOI  relating to such  Project or the  Borrower's  pro rata
share of such Joint  Venture  for the  immediately  preceding  consecutive  four
fiscal quarters.

        "WHOLLY-OWNED"  means, with respect to the ownership of any asset by any
Person,  that such Person owns 100% of the voting and economic interests in such
asset;  PROVIDED that, with the written  approval of the  Administrative  Agent,
such  Person may be deemed to  wholly-own  an asset if it owns less than 100% of
the voting and economic interests in such asset so long as such Person owns 100%
of the interests  generally  having the right to vote with respect to such asset
and at least 90% of the economic interests in such asset.

        1.2.    COMPUTATION  OF  TIME  PERIODS.   In  this  Agreement,   in  the
computation of periods of time from a specified date to a later  specified date,
the word "FROM" means "from and  including"  and the words "TO" and "UNTIL" each
mean "to but excluding".  Periods of days referred to in this Agreement shall be
counted in calendar  days unless  Business Days are  expressly  prescribed.  Any
period  determined  hereunder by reference to a month or months or year or years
shall end on the day in the relevant  calendar  month in the relevant  year,  if
applicable,  immediately  preceding the date  numerically  corresponding  to the
first day of such period, provided that if such period commences on the last day
of a calendar month (or on a day for which there is no numerically corresponding
day in the calendar month during which such

                                      -28-
<PAGE>


period is to end), such period shall, unless otherwise expressly required by the
other provisions of this Agreement, end on the last day of the calendar month.

        1.3.    ACCOUNTING TERMS.  Subject to Section 14.4, for purposes of this
Agreement,  all  accounting  terms not otherwise  defined  herein shall have the
meanings assigned to them in conformity with GAAP.

        1.4.    OTHER TERMS.  All other terms contained in this Agreement shall,
unless the context indicates otherwise, have the meanings assigned to such terms
by the Uniform Commercial Code to the extent the same are defined therein.

        1.5.    RULES OF  INTERPRETATION.  (a) A  reference  to any  document or
agreement  shall  include such  document or  agreement  as amended,  modified or
supplemented  from  time to time in  accordance  with its terms and the terms of
this Agreement.

                (a)     The singular includes the plural and the plural includes
the singular.

                (b)     A  reference  to  any  law  includes  any  amendment  or
modification to such law.

                (c)     A  reference  to  any  Person   includes  its  permitted
successors and permitted assigns.

                (d)     The words "include",  "includes" and "including" are not
limiting.

                (e)     Reference  to a  particular  "Section"  refers  to  that
section  of this  Agreement  unless  otherwise  indicated,  and  reference  to a
particular  "Exhibit" or  "Schedule"  refers to that exhibit or schedule to this
Agreement unless otherwise indicated.

                                  ARTICLE II.
                           AMOUNTS AND TERMS OF LOANS

        2.1.    COMMITTED LOANS.

                (a)     AVAILABILITY.  Subject to the terms and  conditions  set
forth in this Agreement,  each Lender hereby severally and not jointly agrees to
make revolving  loans, in Dollars (each  individually,  a "COMMITTED  LOAN" and,
collectively,  the  "COMMITTED  LOANS") to the Borrower from time to time during
the Revolving  Credit Period,  in an amount not to exceed such Lender's Pro Rata
Share  of the  Revolving  Credit  Availability  at  such  time.  Subject  to the
provisions  of Section  2.1(b) below,  the aggregate  amount of Loans to be made
hereunder  together  with the Letter of Credit  Obligations  with respect to the
Borrower,  shall not exceed Five Hundred  Million  Dollars  ($500,000,000).  All
Committed Loans comprising the same Borrowing under this Agreement shall be made
by the Lenders  simultaneously and  proportionately to their then respective Pro
Rata Shares,  it being  understood  that no Lender shall be responsible  for any
failure by any other Lender to perform its  obligation to make a Committed  Loan
hereunder nor shall the Revolving  Credit  Commitment of any Lender be increased
or decreased as a result of any such failure.  Subject to the provisions of this
Agreement,  the Borrower  may repay any  outstanding  Committed  Loan on any day
which is a Business Day and any amounts so repaid may be  reborrowed,  up to the
amount available under this Section 2.1(a) at the time of such Borrowing,  until
the Business Day next  preceding the Revolving  Credit  Termination  Date.  Each
requested

                                      -29-
<PAGE>


Borrowing of Committed  Loans funded on any Funding Date shall be in a principal
amount of at least $3,000,000 and with integral multiples of $500,000; PROVIDED,
HOWEVER, that if the aggregate Revolving Credit Availability  outstanding at the
time of such  requested  Borrowing is less than  $3,000,000,  then the requested
Borrowing shall be for the total amount of such outstanding  aggregate Revolving
Credit Availability.

                (b)     INCREASE  IN  COMMITMENT.  Unless a  Potential  Event of
Default or an Event of Default has occurred and is continuing,  the Borrower, by
written notice to the Administrative  Agent (which shall promptly notify each of
the Lenders),  may request on up to five (5)  occasions  during the term of this
Agreement  that the  Revolving  Credit  Commitment be increased by an amount not
less  than  $25,000,000  per  request  and not  more  than  $250,000,000  in the
aggregate  (such that the Revolving  Credit  Commitment  after such  increase(s)
shall never  exceed  $750,000,000);  PROVIDED  that for any such request (i) the
Borrower shall not have requested the one-year extension of the Revolving Credit
Termination Date pursuant to the definition  thereof,  (ii) any Lender that is a
party to this  Agreement  prior to such  request  for an  increase,  at its sole
discretion,  may elect to increase its Revolving Credit Commitment but shall not
have any obligation to so increase its Revolving Credit Commitment, and (iii) in
the event that each  Lender  does not elect to  increase  its  Revolving  Credit
Commitment,  the Arrangers shall use commercially  reasonable  efforts to locate
additional  lenders  willing to hold  commitments  for the  requested  increase,
subject to the approval of any such  proposed  lender by the  Borrower,  and the
Borrower may also identify  additional  lenders willing to hold  commitments for
the requested  increase,  PROVIDED that the Administrative  Agent shall have the
right  to  approve  any  such  additional  lender,  which  approval  will not be
unreasonably  withheld or delayed.  In the event that lenders commit to any such
increase,  the Revolving  Credit  Commitments of the committed  Lenders shall be
increased, the Pro Rata Shares of the Lenders shall be adjusted, new Notes shall
be issued,  the Borrower  shall make such  borrowings and repayments as shall be
necessary to effect the  reallocation of the Revolving  Credit Loans,  and other
changes  shall be made to the Loan  Documents as may be necessary to reflect the
aggregate  amount,  if any,  by which  Lenders  have  agreed to  increase  their
respective Revolving Credit Commitments or make new Revolving Credit Commitments
pursuant to this Section 2.1(b),  in each case without  requiring the consent of
the  Lenders  other  than  those  Lenders   increasing  their  Revolving  Credit
Commitments.  The fees  payable by the  Borrower  upon any such  increase in the
Revolving  Credit  Commitments  shall be agreed  upon by the  Arrangers  and the
Borrower at the time of such increase.

        Notwithstanding  the  foregoing,  nothing in this  Section  2.1(b) shall
constitute  or be deemed to  constitute an agreement or commitment by any Lender
to increase its Revolving Credit Commitment hereunder.

                (c)     NOTICE OF BORROWING. When the Borrower desires to borrow
under this Section 2.1, the Borrower shall deliver to the Administrative Agent a
Notice of  Borrowing,  signed by it (x) no later than 12:00 noon (New York time)
on the Business Day immediately preceding the proposed Funding Date, in the case
of a  Borrowing  of Base Rate Loans and (y) no later  than 11:00 a.m.  (New York
time) at least three (3) Business Days in advance of the proposed  Funding Date,
in the case of a Borrowing of Eurodollar Rate Loans; PROVIDED,  HOWEVER, that no
more  than two (2)  Borrowings  may be made  within  any five (5)  Business  Day
period.  Such Notice of Borrowing  shall  specify (i) the proposed  Funding Date
(which  shall be a Business  Day),  (ii) the amount of the  proposed  Borrowing,
(iii)  the  Revolving  Credit  Availability  as of the  date of such  Notice  of
Borrowing,  (iv),  whether the proposed  Borrowing will be of Base Rate Loans or
Eurodollar Rate Loans,  (v) in the case of Eurodollar Rate Loans,  the requested
Eurodollar  Interest  Period,  (vi)  instructions  for the  disbursement  of the
proceeds  of the  proposed  Borrowing,  (vii) an

                                      -30-
<PAGE>


Officer's Certificate of the Borrower with respect to compliance with (including
calculation  thereof)  Sections  10.11(a)  and  10.11(e),  and  (viii)  that  no
Potential  Event of  Default  or Event of Default  shall  have  occurred  and be
continuing or would result  therefrom.  Any Notice of Borrowing  (or  telephonic
notice  in  lieu  thereof)  given  pursuant  to this  Section  2.1(c)  shall  be
irrevocable.

                (d)     MAKING OF LOANS.  (i) Promptly after receipt of a Notice
of Borrowing under Section 2.1(c),  the  Administrative  Agent shall notify each
Lender by facsimile transmission, or other similar written form of transmission,
of the  proposed  Borrowing  (which  notice  to the  Lenders,  in the  case of a
Borrowing of Eurodollar Rate Loans, shall be at least three (3) Business Days in
advance of the proposed Funding Date for such Loans).  Each Lender shall deposit
an amount equal to its Pro Rata Share of the Borrowing requested by the Borrower
with  the  Administrative  Agent  at  its  office  in New  York,  New  York,  in
immediately  available  funds,  not later than 12:00 noon (New York time) on the
respective  Funding Date therefor.  Subject to the fulfillment of the conditions
precedent  set  forth  in  Section  6.1  or  Section  6.2,  as  applicable,  the
Administrative  Agent  shall make the  proceeds of such  amounts  received by it
available to the Borrower at the Administrative  Agent's office in New York, New
York on such  Funding  Date (or on the date  received if later than such Funding
Date) and  shall  disburse  such  proceeds  in  accordance  with the  Borrower's
disbursement  instructions set forth in the applicable Notice of Borrowing.  The
failure  of  any  Lender  to  deposit  the  amount   described  above  with  the
Administrative  Agent on the applicable Funding Date shall not relieve any other
Lender of its  obligations  hereunder to make its Loan on such Funding  Date. In
the event the  conditions  precedent  set  forth in  Section  6.1 or 6.2 are not
fulfilled as of the proposed Funding Date for any Borrowing,  the Administrative
Agent shall promptly  return,  by wire transfer of immediately  available funds,
the amount deposited by each Lender to such Lender.

                (ii)    Unless the Administrative Agent shall have been notified
by any Lender on the Business Day immediately  preceding the applicable  Funding
Date in respect of any  Borrowing  that such  Lender does not intend to fund its
Loan  requested to be made on such Funding Date,  the  Administrative  Agent may
assume  that such  Lender  has funded its Loan and is  depositing  the  proceeds
thereof  with the  Administrative  Agent on the Funding Date  therefor,  and the
Administrative  Agent in its sole discretion may, but shall not be obligated to,
disburse a corresponding  amount to the Borrower on the applicable Funding Date.
If the Loan proceeds  corresponding  to that amount are advanced to the Borrower
by  the   Administrative   Agent  but  are  not  in  fact   deposited  with  the
Administrative  Agent by such Lender on or prior to the applicable Funding Date,
such Lender agrees to pay, and in addition the Borrower, agrees to repay, to the
Administrative  Agent forthwith on demand such  corresponding  amount,  together
with interest thereon, for each day from the date such amount is disbursed to or
for the benefit of the Borrower  until the date such amount is paid or repaid to
the Administrative  Agent, at the average Federal Funds Rate for such period. If
such Lender shall pay to the Administrative Agent the corresponding  amount, the
amount so paid  shall  constitute  such  Lender's  Loan as of the  Funding  Date
thereof,  and if both such  Lender  and the  Borrower  shall pay and repay  such
corresponding  amount,  the  Administrative  Agent  shall  promptly  pay  to the
Borrower such corresponding amount. This Section 2.1(d)(ii) does not relieve any
Lender of its obligation to make its Loan on any applicable Funding Date.

        2.2.    COMPETITIVE BID LOANS.

                (a)     THE COMPETITIVE BID OPTION.  For so long as the Borrower
shall maintain an Investment Grade Rating from at least two (2) Rating Agencies,
one (1) of which shall be

                                      -31-
<PAGE>


Moody's  or S&P,  from time to time  during the  Revolving  Credit  Period,  the
Borrower may, as set forth in this Section 2.2,  request the Lenders  during the
Revolving  Credit  Period to make  offers to make  Competitive  Bid Loans to the
Borrower (a "COMPETITIVE BID QUOTE  REQUEST"),  such Competitive Bid Loan not to
exceed,  at  such  time  (i)  together  with  all  Competitive  Bid  Loans  then
outstanding, fifty percent (50%) of the Maximum Revolving Credit Amount, or (ii)
the Revolving Credit Availability.  Subject to the provisions of this Agreement,
the Borrower may repay any outstanding  Competitive Bid Loan on any day which is
a Business  Day and any  amounts so repaid may be  reborrowed,  up to the amount
available  under this Section  2.2(a) at the time of such  Borrowing,  until the
Business Day next preceding the Revolving Credit  Termination  Date. The Lenders
may, but shall have no obligation to, make such offers and the Borrower may, but
shall have no  obligation  to, accept any such offers in the manner set forth in
this Section 2.2.

                (b)     COMPETITIVE BID QUOTE REQUEST.  When the Borrower wishes
to request offers to make Competitive Bid Loans under this Section, the Borrower
shall transmit to the Administrative Agent by telex or facsimile  transmission a
Competitive Bid Quote Request  substantially  in the form of EXHIBIT H hereto so
as to be received  not later than 10:30 A.M.  (New York City time) on the fourth
(4th)  Business  Day prior to the date of  Borrowing  proposed  therein (or such
other  time or date as the  Borrower  and the  Administrative  Agent  shall have
mutually  agreed and shall have  notified to the Lenders not later than the date
of the  Competitive Bid Quote Request for the first LIBOR Auction for which such
change is to be effective) specifying:

                (i)     the  proposed  date  of  Borrowing,  which  shall  be  a
        Business Day;

                (ii)    the aggregate  amount of such Borrowing,  which shall be
        $20,000,000 or a larger  multiple of $1,000,000  (which shall not exceed
        the Revolving Credit Availability);

                (iii)   the   duration  of  the   Eurodollar   Interest   Period
        applicable thereto, subject to the provisions of Section 5.2(b); and

                (iv)    the amount of all Competitive Bid Loans then outstanding
        (which,  together with the requested  Borrowing shall not exceed, in the
        aggregate, fifty percent (50%) of the Maximum Revolving Credit Amount).

The Borrower may request  offers to make  Competitive  Bid Loans for one, two or
three  Eurodollar  Interest  Periods in a single  Competitive Bid Quote Request.
Borrower may not make more than two (2)  Competitive  Bid Quote  Requests in any
thirty (30) day period.

                (c)     INVITATION  FOR  COMPETITIVE  BID QUOTES.  Promptly upon
receipt of a Competitive Bid Quote Request,  the Administrative Agent shall send
to the Lenders by telex or facsimile  transmission an Invitation for Competitive
Bid Quotes substantially in the form of EXHIBIT I hereto, which shall constitute
an  invitation by the Borrower to each Lender to submit  Competitive  Bid Quotes
offering to make the Competitive  Bid Loans to which such  competitive Bid Quote
Request relates in accordance with this Section.

                (d)     SUBMISSION AND CONTENTS OF COMPETITIVE  BID QUOTES.  (i)
Each Lender may submit a Competitive Bid Quote  containing an offer or offers to
make  Competitive  Bid Loans in response to any Invitation for  Competitive  Bid
Quotes.  Each  Competitive  Bid Quote must comply with the  requirements of this
subsection  (d) and must be  submitted to the  Administrative  Agent by telex or
facsimile transmission not later than 9:30 A.M. (New York City

                                      -32-
<PAGE>


time) on the third (3rd)  Business Day prior to the  proposed  date of Borrowing
(or such other time or date as the Borrower and the  Administrative  Agent shall
have mutually agreed and shall have notified the Lenders not later than the date
of the  Competitive Bid Quote Request for the first LIBOR Auction for which such
change is to be effective);  PROVIDED that  Competitive Bid Quotes  submitted by
the Person serving as the  Administrative  Agent (or any affiliate of the Person
serving  as  the  Administrative  Agent)  in the  capacity  of a  Lender  may be
submitted,   and  may  only  be  submitted,   if  the  Person   serving  as  the
Administrative Agent or such affiliate notifies the Borrower of the terms of the
offer or offers contained therein not later than one-quarter (1/4) hour prior to
the deadline for the other Lenders.  Any  Competitive Bid Quote so made shall be
irrevocable.  Competitive  Bid Loans to be funded  pursuant to a Competitive Bid
Quote may, as provided in Section  14.1(f),  be funded by a Lender's  Designated
Bank. A Lender making a Competitive Bid Quote may, but shall not be required to,
specify in its Competitive  Bid Quote whether the related  Competitive Bid Loans
are  intended  to be funded by such  Lender's  Designated  Bank,  as provided in
Section 14.1(f).

                (ii)    Each Competitive Bid Quote shall be in substantially the
form of EXHIBIT J hereto and shall in any case specify:

                        (A)     the proposed date of Borrowing;

                        (B)     the principal amount of the Competitive Bid Loan
                for which each such offer is being made,  which principal amount
                (w) may be  greater  than  or less  than  the  Revolving  Credit
                Commitment  of the quoting  Lender,  (x) must be $5,000,000 or a
                larger  multiple  of  $1,000,000  (or, if the  Revolving  Credit
                Availability then is less than $5,000,000,  such lesser amount),
                (y) may not exceed the principal amount of Competitive Bid Loans
                for which  offers  were  requested  and (z) may be subject to an
                aggregate  limitation as to the principal  amount of Competitive
                Bid Loans for which offers being made by such quoting Lender may
                be accepted;

                        (C)     the  margin   above  or  below  the   applicable
                Eurodollar Rate (the  "COMPETITIVE BID MARGIN") offered for each
                such Competitive Bid Loan, expressed as a percentage  (specified
                to the nearest  1/10,000th  of 1%) to be added to or  subtracted
                from such base rate offered for each Competitive Bid Loan; and

                        (D)     the identity of the quoting Lender.

                (iii)   Any Competitive Bid Quote shall be disregarded if it:

                        (A)     is not  substantially in conformity with EXHIBIT
                J hereto or does not specify all of the information  required by
                subsection (d)(ii) above;

                        (B)     except as provided in  subsection  (d)(ii)(B)(z)
                above,  proposes  terms  other than or in  addition to those set
                forth in the applicable  Invitation for  Competitive Bid Quotes;
                or

                        (C)     arrives  after the time set forth in  subsection
                (d)(i) above.

                (e)     NOTICE  TO  BORROWER.  The  Administrative  Agent  shall
promptly  notify the  Borrower,  of the terms (x) of any  Competitive  Bid Quote
submitted by a Lender that is in

                                      -33-
<PAGE>


accordance  with  subsection (d) of this Section and (y) of any  Competitive Bid
Quote  that  amends,  modifies  or is  otherwise  inconsistent  with a  previous
Competitive  Bid  Quote  submitted  by such  Lender  with  respect  to the  same
Competitive Bid Quote Request.  Any such subsequent  Competitive Bid Quote shall
be disregarded by the  Administrative  Agent unless such subsequent  Competitive
Bid  Quote is  submitted  solely  to  correct a  manifest  error in such  former
Competitive Bid Quote. The  Administrative  Agent's notice to the Borrower shall
specify (A) the aggregate  principal  amount of Competitive  Bid Loans for which
offers have been received for each Eurodollar  Interest Period  specified in the
related Competitive Bid Quote Request, (B) the principal amounts and Competitive
Bid  Margins so offered  and (C) if  applicable,  limitations  on the  aggregate
principal  amount  of  Competitive  Bid Loans  for  which  offers in any  single
Competitive Bid Quote may be accepted.

                (f)     ACCEPTANCE AND NOTICE BY BORROWER.  Not later than 11:00
A.M. (New York City time) on the third (3rd)  Business Day prior to the proposed
date  of  Borrowing  (or  such  other  time  or  date  as the  Borrower  and the
Administrative  Agent shall have  mutually  agreed and shall have  notified  the
Lenders  not later than the date of the  Competitive  Bid Quote  Request for the
first  LIBOR  Auction for which such change is to be  effective),  the  Borrower
shall  telephonically  notify  the  Administrative  Agent of its  acceptance  or
non-acceptance  of the offers so notified to it  pursuant to  subsection  (e) of
this Section,  and the Borrower shall confirm such  telephonic  notification  in
writing not later than the third (3rd)  Business Day prior to the proposed  date
of Borrowing.  In the case of acceptance,  such notice (a "NOTICE OF COMPETITIVE
BID BORROWING"),  whether telephonic or in writing,  shall specify the aggregate
principal amount of offers for each Eurodollar Interest Period that are accepted
and shall be  accompanied  by an  Officer's  Certificate  of the  Borrower  with
respect to compliance with (including calculation of) Sections 10.11(a) and (e).
The Borrower may accept any Competitive Bid Quote in whole or in part;  PROVIDED
that:

                (i)     the aggregate  principal  amount of each Competitive Bid
        Loan  Borrowing  may not exceed the  applicable  amount set forth in the
        related Competitive Bid Quote Request;

                (ii)    the  principal  amount  of  each  Competitive  Bid  Loan
        Borrowing must be $20,000,000 or a larger multiple of $1,000,000 (or, if
        the Revolving Credit  Availability then is less than  $20,000,000,  such
        lesser amount);

                (iii)   acceptance of offers may only be made in ascending order
        from those subject to the lowest Competitive Bid Margin to those subject
        to the highest  Competitive Bid Margin,  as applicable to provide to the
        Borrower the lowest effective cost based on offers accepted; and

                (iv)    the  Borrower may not accept any offer that is described
        in subsection (d)(iii) of this Section or that otherwise fails to comply
        with the requirements of this Agreement.

                (g)     ALLOCATION BY  ADMINISTRATIVE  AGENT. If offers are made
by two or more  Lenders  with the same  Competitive  Bid  Margins  for a greater
aggregate  principal  amount than the amount in respect of which such offers are
permitted  to be  accepted  for the  related  Eurodollar  Interest  Period,  the
principal  amount of  Competitive  Bid Loans in respect of which such offers are
accepted  shall be allocated by the  Administrative  Agent among such Lenders as
nearly as possible (in multiples of $1,000,000,  as the Administrative Agent may
deem appropriate) in

                                      -34-
<PAGE>


proportion to the aggregate principal amounts of such offers.  Determinations by
the  Administrative  Agent of the  amounts  of  Competitive  Bid Loans  shall be
conclusive  in the absence of manifest  error.  The  Administrative  Agent shall
notify the Borrower of all offers.

                (h)     NOTIFICATION BY  ADMINISTRATIVE  AGENT.  Upon receipt of
the Borrower's  Notice of Competitive  Bid Borrowing in accordance  with Section
2.2(f)  hereof,  the  Administrative  Agent  shall,  on the date such  Notice of
Competitive Bid Borrowing is received by the Administrative  Agent,  notify each
Lender of the principal amount of the Competitive Bid Loan Borrowing accepted by
the Borrower and of such Lender's  share (if any) of such  Competitive  Bid Loan
Borrowing and such Notice of Competitive  Bid Borrowing  shall not thereafter be
revocable by the Borrower. A Lender who is notified that it has been selected to
make a Competitive  Bid Loan may designate its Designated  Bank (if any) to fund
such Competitive Bid Loan on its behalf,  as described in Section  14.1(f).  Any
Designated  Bank which funds a Competitive  Bid Loan shall on and after the time
of such  funding  become  the  obligee  under such  Competitive  Bid Loan and be
entitled to receive payment thereof when due. No Lender shall be relieved of its
obligation to fund a Competitive  Bid Loan, and no Designated  Bank shall assume
such  obligation,  prior  to the  time the  applicable  Competitive  Bid Loan is
funded.

        2.3.    USE OF PROCEEDS OF LOANS AND LETTERS OF CREDIT.  The proceeds of
the Loans and the  Letters  of Credit  issued for the  account  of the  Borrower
hereunder may be used for the purposes of general  working  capital needs of the
Borrower and other general corporate purposes.

        2.4.    REVOLVING CREDIT  TERMINATION DATE;  MATURITY OF COMPETITIVE BID
LOANS. (a) The Revolving Credit Commitments shall terminate, and all outstanding
Revolving Credit Obligations shall be paid in full (or, in the case of unmatured
Letter of Credit Obligations, provision for payment in cash shall be made to the
satisfaction  of the Issuing Banks  actually  issuing  Letters of Credit and the
Requisite  Lenders),  on the Revolving  Credit  Termination  Date. Each Lender's
obligation to make Loans shall  terminate on the Business Day next preceding the
Revolving Credit Termination Date.

                (a)     Each  Competitive  Bid Loan included in any  Competitive
                        Bid  Loan  Borrowing  shall  mature,  and the  principal
amount  thereof  shall be due and payable,  together  with the accrued  interest
thereon,  on the last day of the Eurodollar  Interest Period  applicable to such
Borrowing.

        2.5.    MAXIMUM  CREDIT  FACILITY.   Notwithstanding  anything  in  this
Agreement to the contrary,  in no event shall the aggregate  principal amount of
Revolving Credit Obligations exceed the Maximum Revolving Credit Amount.

        2.6.    AUTHORIZED  AGENTS.  On the  Closing  Date and from time to time
thereafter,  the Borrower shall deliver to the Administrative Agent an Officer's
Certificate  setting forth the names of the  employees and agents  authorized to
request Loans and Letters of Credit and to request a conversion/continuation  of
any Loan and containing a specimen signature of each such employee or agent. The
employees  and  agents so  authorized  shall also be  authorized  to act for the
Borrower in respect of all other  matters  relating to the Loan  Documents.  The
Administrative  Agent,  each  Documentation  Agent,  the Syndication  Agent, the
Arrangers,  the  Lenders  and  any  Issuing  Bank  shall  be  entitled  to  rely
conclusively  on such  employee's  or agent's  authority to request such Loan or
Letter of Credit or such conversion/continuation  until the Administrative Agent
and  the  Arrangers  receive  written  notice  to  the  contrary.   Neither  the
Administrative Agent nor the

                                      -35-
<PAGE>


Arrangers  shall  have any duty to  verify  the  authenticity  of the  signature
appearing    on   any    written    Notice   of    Borrowing    or   Notice   of
Conversion/Continuation  or any other  document,  and,  with  respect to an oral
request for such a Loan or Letter of Credit or such conversion/continuation, the
Administrative Agent and the Arrangers shall have no duty to verify the identity
of any person representing  himself or herself as one of the employees or agents
authorized  to make such request or otherwise to act on behalf of the  Borrower.
None of the  Administrative  Agent, the Arrangers or the Lenders shall incur any
liability to the Borrower or any other Person in acting upon any  telephonic  or
facsimile  notice  referred  to  above  which  the  Administrative  Agent or the
Arrangers  believe  to have been  given by a person  duly  authorized  to act on
behalf of the Borrower and the Borrower  hereby  indemnifies  and holds harmless
the Administrative Agent, the Arrangers and each Lender from any loss or expense
the Administrative  Agent, the Arrangers or the Lenders might incur in acting in
good faith as provided in this Section 2.6;  provided,  however,  that  Borrower
shall not indemnify the  applicable  party for acts resulting from its own gross
negligence or willful misconduct.

                                  ARTICLE III.
                                LETTERS OF CREDIT

        3.1.    LETTERS OF CREDIT. Subject to the terms and conditions set forth
in this Agreement,  including,  without  limitation,  Section  3.1(c)(ii),  each
Issuing  Bank hereby  severally  agrees to issue for the account of the Borrower
one or more Letters of Credit, subject to the following provisions:

                (a)     TYPES AND  AMOUNTS.  An Issuing  Bank shall not have any
obligation to issue,  amend or extend, and shall not issue, amend or extend, any
Letter of Credit at any time:

                (i)     if the  aggregate  Letter  of  Credit  Obligations  with
        respect to such  Issuing  Bank,  after  giving  effect to the  issuance,
        amendment  or  extension  of the Letter of Credit  requested  hereunder,
        shall exceed any limit  imposed by law or  regulation  upon such Issuing
        Bank;

                (ii)    if,  immediately  after giving  effect to the  issuance,
        amendment  or  extension  of such  Letter of  Credit,  (1) the Letter of
        Credit  Obligations  at such time would exceed  $100,000,000  or (2) the
        Revolving  Credit  Obligations  at such time would  exceed  the  Maximum
        Revolving  Credit  Amount  at  such  time,  or (3)  one or  more  of the
        conditions  precedent  contained in Sections 6.1 or 6.2, as  applicable,
        would  not on  such  date  be  satisfied,  unless  such  conditions  are
        thereafter satisfied and written notice of such satisfaction is given to
        such  Issuing  Bank by the  Administrative  Agent (and such Issuing Bank
        shall not  otherwise  be  required  to  determine  that,  or take notice
        whether,  the conditions  precedent set forth in Sections 6.1 or 6.2, as
        applicable, have been satisfied);

                (iii)   which has an  expiration  date later than the earlier of
        (A) the date one (1) year after the date of issuance  (without regard to
        any  automatic  renewal  provisions  thereof) or (B) ten  Business  Days
        preceding the scheduled Revolving Credit Termination Date; or

                (iv)    which is in a currency other than Dollars.

                (b)     CONDITIONS.   In  addition  to  being   subject  to  the
satisfaction of the conditions  precedent  contained in Sections 6.1 and 6.2, as
applicable, the obligation of an Issuing

                                      -36-
<PAGE>


Bank to  issue,  amend  or  extend  any  Letter  of  Credit  is  subject  to the
satisfaction in full of the following conditions:

                (i)     if the Issuing Bank so requests, the Borrower shall have
        executed and delivered to such Issuing Bank and the Administrative Agent
        a Letter of Credit Reimbursement  Agreement and such other documents and
        materials as may be required pursuant to the terms thereof; and

                (ii)    the terms of the  proposed  Letter  of  Credit  shall be
        satisfactory to the Issuing Bank in its sole discretion.

                (c)     ISSUANCE OF LETTERS OF CREDIT.  (i) The  Borrower  shall
give the  Administrative  Agent  written  notice that it requires the issuance a
Letter of Credit not later than  11:00 a.m.  (New York time) on the third  (3rd)
Business  Day  preceding  the  requested  date for issuance  thereof  under this
Agreement.  Such notice  shall be  irrevocable  unless and until such request is
denied by the Issuing Bank and such request shall specify (A) that the requested
Letter of Credit is either a Commercial  Letter of Credit or a Standby Letter of
Credit,  (B) the  stated  amount  of the  Letter of  Credit  requested,  (C) the
effective  date  (which  shall be a Business  Day) of issuance of such Letter of
Credit, (D) the date on which such Letter of Credit is to expire (which shall be
a Business Day and no later than ten (10) Business Days  preceding the scheduled
Revolving Credit Termination Date), (E) the Person for whose benefit such Letter
of Credit is to be issued,  (F) other  relevant  terms of such Letter of Credit,
(G) the Revolving  Credit  Availability  at such time, and (H) the amount of the
then outstanding Letter of Credit Obligations. Such request shall be accompanied
by an Officer's Certificate of the Borrower with respect to compliance with (and
calculation of) Sections 10.11(a) and (e).

                (i)     The  Issuing  Bank shall give the  Administrative  Agent
        written notice,  or telephonic notice confirmed  promptly  thereafter in
        writing,  of the issuance,  amendment or extension of a Letter of Credit
        (which  notice the  Administrative  Agent  shall  promptly  transmit  by
        telegram,  facsimile  transmission,   or  similar  transmission  to  the
        Borrower and each Lender).

                (d)     Reimbursement  Obligations;  Duties of Issuing  Bank and
other Lenders; Funding of a Loan.

                (i)     Notwithstanding  any  provisions  to the contrary in any
        Letter of Credit Reimbursement Agreement:

                        (A)     the Borrower  shall  reimburse each Issuing Bank
                for  amounts  drawn under its Letter of Credit,  in Dollars,  no
                later  than the date  (the  "REIMBURSEMENT  DATE")  which is the
                earlier of (I) the time  specified in the  applicable  Letter of
                Credit  Reimbursement  Agreement  and (II) the date that payment
                has been made under such Letter of Credit by such Issuing  Bank;
                and

                        (B)     all  Reimbursement  Obligations  with respect to
                any Letter of Credit shall bear interest at the rate  applicable
                to Base Rate Loans in  accordance  with Section  5.1(a) from the
                date of the relevant  drawing  under such Letter of Credit until
                the Reimbursement  Date and thereafter at the rate applicable to
                Base Rate Loans in accordance with Section 5.1(d).

                                      -37-
<PAGE>


                (ii)    Each  Issuing Bank shall give the  Administrative  Agent
        written notice,  or telephonic notice confirmed  promptly  thereafter in
        writing,  of all  drawings  under a Letter of Credit and the payment (or
        the  failure  to  pay  when  due)  by  the  Borrower  on  account  of  a
        Reimbursement  Obligation (which notice the  Administrative  Agent shall
        promptly  transmit  by  telegram,   facsimile  transmission  or  similar
        transmission to each Lender).

                (iii)   Solely as between the  applicable  Issuing  Bank and the
        other Lenders, in determining whether to pay under any Letter of Credit,
        such Issuing Bank shall have no  obligation  to the other  Lenders other
        than to confirm  that any  documents  required to be  delivered  under a
        respective  Letter of Credit appear to have been delivered and that they
        appear on their face to comply with the  requirements  of such Letter of
        Credit.

               (iv)    If any draft  shall be  presented  or other  demand  for
        payment shall be made under any Letter of Credit, the applicable Issuing
        Bank shall notify the Administrative Agent (and the Administrative Agent
        shall notify the Borrower and the Lenders) of the date and amount of the
        draft  presented  or demand for payment and of the date and time when it
        expects to pay such draft or honor such demand for payment,  and, except
        as provided in this Section  3.1(d)(iv),  the Borrower  shall  reimburse
        such  Issuing   Bank,   as  set  forth  in  Section   3.1(d)(i)   above.
        Notwithstanding  anything  contained in Section  3.1(d)(i) above or this
        Section 3.1(d)(iv) to the contrary,  however,  unless the Borrower shall
        have notified the  Administrative  Agent and the applicable Issuing Bank
        prior to 11:00 a.m.  (New York  time) on the  Business  Day  immediately
        prior to the date of such drawing that the Borrower intends to reimburse
        such  Issuing  Bank for the amount of such drawing with funds other than
        the proceeds of Committed  Loans,  the Borrower  shall be deemed to have
        timely  given a Notice of  Borrowing  pursuant to Section  2.1(c) to the
        Administrative  Agent,  requesting a Base Rate Loan on the date on which
        such  drawing  is honored  and in an amount  equal to the amount of such
        drawing.  The Borrower may thereafter convert any such Base Rate Loan in
        accordance  with Section  5.1(c).  Each Lender shall, in accordance with
        Section  2.1(d),  make  available  such  Lender's Pro Rata Share of such
        Borrowing to the  Administrative  Agent,  the proceeds of which shall be
        applied  directly by the  Administrative  Agent to reimburse the Issuing
        Bank for the amount of such draw.  In the event that any Lender fails to
        make available to the  Administrative  Agent the amount of such Lender's
        Pro  Rata  Share  of such  Borrowing  on the  date of the  drawing,  the
        Administrative  Agent shall be entitled to recover such amount on demand
        from such Lender  plus any  additional  amounts  payable  under  Section
        2.1(d)(ii) in the event of a late funding by a Lender.

                (e)     PARTICIPATIONS.  (i)  Immediately  upon  issuance  by an
Issuing Bank of any Letter of Credit in accordance with the procedures set forth
in this  Section  3.1,  each  Lender  shall be  deemed to have  irrevocably  and
unconditionally  purchased and received from that Issuing Bank, without recourse
or warranty, an undivided interest and participation in such Letter of Credit to
the extent of such Lender's Pro Rata Share, including,  without limitation,  all
obligations  of the Borrower with respect  thereto  (other than amounts owing to
that  Issuing Bank under  Section  3.1) and any  security  therefor and guaranty
pertaining thereto.

                (ii)    If any Issuing  Bank makes any payment  under any Letter
of Credit and the  Borrower  does not repay such amount to that  Issuing Bank on
the  Reimbursement  Date and a Base Rate Loan has not been made with  respect to
such payment  pursuant to Section  3.1(d)(iv),  that Issuing Bank shall promptly
notify the Administrative  Agent, which shall promptly notify each other Lender,
and each Lender shall  promptly and  unconditionally  pay to the  Administrative

                                      -38-
<PAGE>


Agent for the account of such Issuing Bank, in immediately  available funds, the
amount of such  Lender's  Pro Rata Share of such payment (net of that portion of
such payment,  if any, made by such Issuing Bank in its capacity as an issuer of
a Letter of Credit),  and the  Administrative  Agent shall  promptly pay to such
Issuing Bank such amounts  received by it, and any other amounts received by the
Administrative  Agent for such Issuing Bank's account,  pursuant to this Section
3.1(e).  If a Lender  does not make  its Pro Rata  Share of the  amount  of such
payment available to the Administrative  Agent, such Lender agrees to pay to the
Administrative  Agent for the account of the Issuing Bank,  forthwith on demand,
such amount together with interest  thereon at the interest rate then applicable
to Base Rate Loans in accordance with Section 5.1(a).  The failure of any Lender
to make available to the Administrative Agent for the account of an Issuing Bank
its Pro Rata Share of any such payment shall neither relieve any other Lender of
its obligation  hereunder to make available to the Administrative  Agent for the
account of such Issuing  Bank such other  Lender's Pro Rata Share of any payment
on the date such payment is to be made nor increase the  obligation of any other
Lender  to  make  such  payment  to the  Administrative  Agent.  Notwithstanding
anything to the contrary set forth herein,  the  aggregate  amount to be paid by
any Lender with  respect to any drawing  under a Letter of Credit  (whether as a
payment  pursuant  to this  Section  3.1(e)  or as a Loan  pursuant  to  Section
3.1(d)(iv)) shall not exceed its Pro Rata Share of such drawing.

                (iii)   Whenever an Issuing  Bank  receives a payment on account
of a Reimbursement  Obligation,  including any interest thereon, as to which the
Administrative  Agent has previously received payments from any other Lender for
the account of such Issuing Bank pursuant to this Section  3.1(e),  such Issuing
Bank shall promptly pay to the Administrative Agent and the Administrative Agent
shall  promptly pay to each other Lender an amount equal to such other  Lender's
Pro Rata  Share  thereof.  Each such  payment  shall be made by such  reimbursed
Issuing Bank or the  Administrative  Agent,  as the case may be, on the Business
Day on which such Person  receives the funds paid to such Person pursuant to the
preceding  sentence,  if  received  prior to 11:00 a.m.  (New York time) on such
Business Day, and otherwise on the next succeeding Business Day.

                (iv)    The  Issuing  Banks shall  promptly  furnish the Lenders
copies of any Letter of Credit,  Letter of Credit Reimbursement  Agreement,  and
related   amendment  to  which  such  Issuing  Bank  is  party  and  such  other
documentation as may be deemed reasonable.

                (v)     The  obligations  of a Lender  to make  payments  to the
Administrative  Agent for the  account  of any  Issuing  Bank with  respect to a
Letter of Credit shall be irrevocable, shall not be subject to any qualification
or exception  whatsoever  except willful  misconduct or gross negligence of such
Issuing  Bank,  and  shall be  honored  in  accordance  with  this  Article  III
(irrespective  of the  satisfaction of the conditions  described in Sections 6.1
and 6.2, as applicable) under all circumstances,  including, without limitation,
any of the following circumstances:

                        (A)     any lack of validity or  enforceability  of this
                Agreement or any of the other Loan Documents;

                        (B)     the existence of any claim,  setoff,  defense or
                other right which the  Borrower  may have at any time  against a
                beneficiary  named in a Letter of Credit or any  transferee of a
                beneficiary  named in a Letter of Credit (or any Person for whom
                any such  transferee  may be acting),  any Lender,  or any other
                Person, whether in connection with this Agreement, any Letter of
                Credit,  the transactions  contemplated  herein or any unrelated
                transactions (including any

                                      -39-
<PAGE>


                underlying   transactions   between   the   account   party  and
                beneficiary named in any Letter of Credit);

                        (C)     any  draft,  certificate  or any other  document
                presented  under any Letter of Credit having been  determined to
                be forged, fraudulent, invalid or insufficient in any respect or
                any statement therein being untrue or inaccurate in any respect;

                        (D)     the  surrender or impairment of any security for
                the  performance or observance of any of the terms of any of the
                Loan Documents;

                        (E)     any  failure  by that  Issuing  Bank to make any
                reports required pursuant to Section 3.1(h) or the inaccuracy of
                any such report; or

                        (F)     the  occurrence  of  any  Event  of  Default  or
                Potential Event of Default.

                (f)     PAYMENT OF REIMBURSEMENT  OBLIGATIONS.  (i) The Borrower
unconditionally  agrees to pay to each Issuing Bank,  in Dollars,  the amount of
all  Reimbursement  Obligations,  interest  and other  amounts  payable  to such
Issuing Bank under or in connection with the Letters of Credit when such amounts
are due and payable,  irrespective of any claim, setoff,  defense or other right
which the  Borrower  may have at any time  against any Issuing Bank or any other
Person.

                (ii)    In the event any payment by the Borrower  received by an
Issuing  Bank  with  respect  to a  Letter  of  Credit  and  distributed  by the
Administrative  Agent to the  Lenders  on  account  of their  participations  is
thereafter set aside,  avoided or recovered from such Issuing Bank in connection
with any receivership,  liquidation or bankruptcy proceeding,  each Lender which
received such distribution  shall, upon demand by such Issuing Bank,  contribute
such  Lender's  Pro Rata Share of the amount  set  aside,  avoided or  recovered
together with interest at the rate required to be paid by such Issuing Bank upon
the amount required to be repaid by it.

                (g)     LETTER OF CREDIT FEE CHARGES.  In  connection  with each
Letter of Credit,  Borrower hereby covenants to pay to the Administrative  Agent
the following fees each payable  quarterly in arrears (on the first Business Day
of each calendar quarter following the issuance of each Letter of Credit): (1) a
fee for the account of the Lenders,  computed daily on the amount of such Letter
of Credit  issued and  outstanding  at a rate per annum equal to the "BANKS' L/C
FEE RATE" (as  hereinafter  defined) and (2) a fee,  for the Issuing  Bank's own
account,  computed  daily on the  amount of such  Letter of  Credit  issued  and
outstanding at a rate per annum equal to 0.125%. For purposes of this Agreement,
the "Banks' L/C Fee Rate" shall mean, at any time, a rate per annum equal to the
Applicable  Margin for Eurodollar  Rate Loans then in effect.  In addition,  the
Borrower  shall  pay to each  Issuing  Bank,  solely  for its own  account,  the
standard  charges assessed by such Issuing Bank in connection with the issuance,
administration,  amendment and payment or  cancellation of Letters of Credit and
such  compensation  in  respect of such  Letters  of Credit  for the  Borrower's
account as may be agreed upon by the  Borrower  and such Issuing Bank in writing
from time to time.

                (h)     LETTER OF CREDIT  REPORTING  REQUIREMENT.  Each  Issuing
Bank shall,  no later than the tenth (10th)  Business Day following the last day
of each  calendar  quarter,  provide  to the  Administrative  Agent  (who  shall
promptly provide to the Borrower and each other Lender)

                                      -40-
<PAGE>


separate  schedules  for  Commercial  Letters of Credit and  Standby  Letters of
Credit  issued  as  Letters  of  Credit,   in  form  and  substance   reasonably
satisfactory to the Administrative  Agent, setting forth the aggregate Letter of
Credit Obligations outstanding to it at the end of each month and, to the extent
not otherwise  provided in accordance with the provisions of Section 3.1(c), any
information  requested by the  Administrative  Agent or the Borrower relating to
the date of issue, account party,  amount,  expiration date and reference number
of each Letter of Credit issued by it.

                (i)     INDEMNIFICATION;  EXONERATION.  (i) In  addition  to all
other amounts  payable to an Issuing Bank, the Borrower hereby agrees to defend,
indemnify,  and save harmless the  Administrative  Agent, each Issuing Bank, and
each other  Lender from and against  any and all claims,  demands,  liabilities,
penalties,  damages,  losses  (other than loss of  profits),  reasonable  costs,
reasonable charges and reasonable expenses (including reasonable attorneys' fees
but excluding taxes) which the Administrative  Agent, the Issuing Banks, or such
other Lender may incur or be subject to as a consequence, direct or indirect, of
(A) the  issuance  of any  Letter of Credit  other than as a result of the gross
negligence or willful  misconduct of the applicable  Issuing Bank, as determined
by a court of  competent  jurisdiction,  or (B) the  failure  of the  applicable
Issuing  Bank to honor a drawing  under such Letter of Credit as a result of any
act or omission,  whether rightful or wrongful, of any present or future DE JURE
or DE FACTO government or Governmental Authority.

                (ii)    As between the  Borrower on the one hand and the Lenders
on the other hand, the Borrower  assumes all risks of the acts and omissions of,
or misuse of Letters of Credit by, the respective  beneficiaries  of the Letters
of Credit. In furtherance and not in limitation of the foregoing, subject to the
provisions of the Letter of Credit Reimbursement Agreements,  the Administrative
Agent,  the  applicable  Issuing  Bank  and  the  other  Lenders  shall  not  be
responsible  for:  (A) the  form,  validity,  legality,  sufficiency,  accuracy,
genuineness or legal effect of any document submitted by any party in connection
with the  application  for and  issuance  of the  Letters of Credit,  even if it
should  in  fact  prove  to be in  any or all  respects  invalid,  insufficient,
inaccurate,  fraudulent or forged; (B) the validity,  legality or sufficiency of
any instrument  transferring  or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits  thereunder or proceeds  thereof,  in
whole or in part,  which may prove to be invalid or ineffective  for any reason;
(C)  failure  of the  beneficiary  of a Letter  of Credit  to duly  comply  with
conditions  required  in order to draw upon such  Letter of Credit;  (D) errors,
omissions,  interruptions or delays in transmission or delivery of any messages,
by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher;
(E) errors in  interpretation  of technical  terms; (F) any loss or delay in the
transmission  or otherwise  of any document  required in order to make a drawing
under any Letter of Credit or of the proceeds thereof; (G) the misapplication by
the  beneficiary of a Letter of Credit of the proceeds of any drawing under such
Letter of  Credit;  and (H) any  consequences  arising  from  causes  beyond the
control of the  Administrative  Agent,  the Issuing Banks or the other  Lenders,
other than any of the foregoing  resulting from the gross  negligence or willful
misconduct of the Issuing Bank.

        3.2.    OBLIGATIONS  SEVERAL.  The  obligations  of  the  Administrative
Agent,  each  Issuing  Bank,  and each other  Lender  under this Article III are
several and not joint,  and no Issuing Bank or other Lender shall be responsible
for the  obligation  to issue  Letters  of Credit or  participation  obligations
hereunder, respectively, of any other Issuing Bank or other Lender.

                                      -41-
<PAGE>


                                  ARTICLE IV.
                            PAYMENTS AND PREPAYMENTS

        4.1.    PREPAYMENTS; REDUCTIONS IN REVOLVING CREDIT COMMITMENTS.

                (a)     VOLUNTARY PREPAYMENTS. The Borrower may, at any time and
from time to time,  prepay the Loans,  other than Competitive Bid Loans, in part
or in their entirety,  subject to the following limitations.  The Borrower shall
give at least three (3) Business Days prior written notice to the Administrative
Agent (which the Administrative Agent shall promptly transmit to each Lender) of
any prepayment in the entirety to be made prior to the occurrence of an Event of
Default,  which notice of  prepayment  shall  specify the date (which shall be a
Business Day) of prepayment.  When notice of prepayment is delivered as provided
herein,  the  outstanding  principal  amount of the Loans on the prepayment date
specified in such notice shall become due and payable on such  prepayment  date.
Each voluntary  partial  prepayment of the Loans shall be in a minimum amount of
$1,000,000  and in integral  multiples  of $500,000 in excess of that amount (or
such lesser amount in the event the unpaid  principal amount of any Loan is less
than such minimum  prepayment  amount).  Eurodollar Rate Loans may be prepaid in
part or in their entirety only upon payment of the amounts  described in Section
5.2(f).  Notwithstanding  anything  contained in this Agreement to the contrary,
Competitive Bid Loans may not be voluntarily  prepaid without the consent of the
Lender(s) making such Competitive Bid Loans.

                (b)     VOLUNTARY  REDUCTIONS IN REVOLVING  CREDIT  COMMITMENTS.
The Borrower may, upon at least three (3) Business Days' prior written notice to
the Administrative Agent (which the Administrative Agent shall promptly transmit
to each  Lender),  at any  time and from  time to  time,  terminate  in whole or
permanently reduce in part the Revolving Credit  Commitments,  PROVIDED that (i)
the  Borrower  shall have made  whatever  payment  may be required to reduce the
Revolving  Credit  Obligations  to an amount less than or equal to the Revolving
Credit Commitments as reduced,  which amount shall become due and payable on the
date  specified in such notice and (ii) in the case of a reduction,  the minimum
Revolving Credit Commitments that shall remain outstanding shall be $100,000,000
unless the Revolving  Credit  Commitments  have been  terminated  and reduced to
zero. Any partial  reduction of the Revolving Credit  Commitments shall be in an
aggregate  minimum amount of $1,000,000 and integral  multiples of $1,000,000 in
excess of that amount,  and shall reduce the Revolving Credit Commitment of each
Lender  proportionately  in  accordance  with its Pro Rata Share.  Any notice of
termination or reduction  given to the  Administrative  Agent under this Section
4.l(b)  shall  specify  the  date  (which  shall  be a  Business  Day)  of  such
termination or reduction and, with respect to a partial reduction, the aggregate
principal amount thereof.

                (c)     NO PENALTY.  The  prepayments and payments in respect of
reductions and terminations described in clauses (a) and (b) of this Section 4.1
may be made without premium or penalty (except as provided in Section 5.2(f)).

                (d)     MANDATORY PREPAYMENT.  If at any time from and after the
Closing  Date:  (i) the  Company or the  Borrower  merges or  consolidates  with
another  Person  and the  Company  or  Borrower,  as the case may be, is not the
surviving  entity and does not control the management of such surviving  entity,
or (ii)  the  Company,  the  Borrower,  any of its  Affiliates  or  Consolidated
Subsidiaries or the Management Company ceases to provide property management and
leasing  services  to at least 80% of the total  number of Projects in which the
Borrower has a direct  ownership  interest  (the date any such event shall occur
being the "PREPAYMENT DATE"), the Borrower shall be required to prepay the Loans
in their entirety as if the Prepayment Date were

                                      -42-
<PAGE>


the Revolving  Credit  Termination  Date and, the Revolving  Credit  Commitments
thereupon  shall  be  terminated.  The  Borrower  shall  immediately  make  such
prepayment  together with interest  accrued to the date of the prepayment on the
principal amount prepaid and shall return or cause to be returned all Letters of
Credit to the applicable  Issuing Bank. In connection with the prepayment of any
Loan prior to the maturity  thereof,  the Borrower shall also pay any applicable
expenses  pursuant to Section 5.2(f).  Each such prepayment  shall be applied to
prepay  ratably  the Loans of the  Lenders.  Amounts  prepaid  pursuant  to this
Section  4.1(d) (other than amounts  prepaid  pursuant to the first  sentence of
this Section 4.1(d)) may not be reborrowed. As used in this Section 4.1(d) only,
the phrase  "sale,  transfer,  assignment or  conveyance"  shall not include (i)
sales or conveyances among Borrower and any of its Consolidated Subsidiaries, or
(ii)  mortgages or other  security  interests  secured by Real Property or other
Property which are permitted  under this Agreement.  Such  prepayment  shall not
affect any rights and remedies  that the Agents and Lenders may  otherwise  have
hereunder.

        4.2.    PAYMENTS.

                (a)     MANNER AND TIME OF PAYMENT. All payments of principal of
and interest on the Loans and  Reimbursement  Obligations and other  Obligations
(including,  without  limitation,  fees and  expenses)  which are payable to the
Administrative  Agent,  the  Arrangers  or any  Lender  shall  be  made  without
condition or reservation of right, in immediately available funds,  delivered to
the  Administrative  Agent not later than 12:00 noon (New York time) on the date
and at the  place  due,  to such  account  of the  Administrative  Agent  (or an
Arranger) as it may designate,  for the account of the Administrative Agent, the
Arrangers,  or such  Lender,  as the  case may be;  and  funds  received  by the
Administrative Agent (or an Arranger),  including,  without limitation, funds in
respect  of any Loans to be made on that  date,  not later  than 12:00 noon (New
York time) on any given  Business  Day shall be credited  against  payment to be
made that day and funds  received by the  Administrative  Agent (or an Arranger)
after  that  time  shall be  deemed  to have  been  paid on the next  succeeding
Business Day.  Payments actually  received by the  Administrative  Agent for the
account of a Documentation  Agent, the Syndication Agent and the Lenders, or any
of  them,  shall  be paid to them by the  Administrative  Agent  promptly  after
receipt thereof.

                (b)     APPORTIONMENT OF PAYMENTS. (i) Subject to the provisions
of Section  4.2(b)(v),  all  payments of  principal  and  interest in respect of
outstanding  Loans,  all payments in respect of Reimbursement  Obligations,  all
payments  of fees and all other  payments  in respect of any other  Obligations,
shall be  allocated  among  such of the  Lenders  as are  entitled  thereto,  in
proportion to their  respective Pro Rata Shares or otherwise as provided herein.
Subject to the provisions of Section 4.2(b)(ii), all such payments and any other
amounts  received  by the  Administrative  Agent from or for the  benefit of the
Borrower shall be applied in the following order:

                        (A)     to pay  principal of and interest on any portion
                of the Loans which the Administrative Agent may have advanced on
                behalf  of  any  Lender  other  than   JPMorgan  for  which  the
                Administrative Agent has not then been reimbursed by such Lender
                or the Borrower;

                        (B)     to  pay  all  other  Obligations  then  due  and
                payable, and

                        (C)     as the Borrower so designates.

                                      -43-
<PAGE>


Unless otherwise  designated by the Borrower,  all principal payments in respect
of its Committed  Loans shall be applied first,  to repay its  outstanding  Base
Rate Loans,  and then to repay its outstanding  Eurodollar Rate Loans with those
Eurodollar Rate Loans which have earlier  expiring  Eurodollar  Interest Periods
being  repaid  prior to those  which have  later  expiring  Eurodollar  Interest
Periods.

                (ii)    After the  occurrence  of an Event of Default  and while
        the  same  is  continuing  which  results  in  an  acceleration  of  the
        Obligations in accordance  with Section 11.2, the  Administrative  Agent
        shall apply all payments in respect of any  Obligations in the following
        order:

                        (A)     first,  to pay  principal of and interest on any
                portion  of the Loans  which the  Administrative  Agent may have
                advanced on behalf of any Lender  other than  JPMorgan for which
                the  Administrative  Agent has not then been  reimbursed by such
                Lender or the Borrower;

                        (B)     second,  to pay  Obligations  in  respect of any
                fees,  expense  reimbursements  or  indemnities  then due to the
                Administrative Agent;

                        (C)     third,  to  pay  principal  of and  interest  on
                Letter of Credit Obligations (or, to the extent such Obligations
                are  contingent,  deposited  with  the  Administrative  Agent to
                provide cash collateral in respect of such Obligations);

                        (D)     fourth,  to pay  Obligations  in  respect of any
                fees,  expense  reimbursements  or  indemnities  then due to the
                Lenders;

                        (E)     fifth, to pay interest due in respect of Loans;

                        (F)     sixth,  to the ratable  payment or prepayment of
                principal outstanding on Loans; and

                        (G)     seventh,  to the  ratable  payment  of all other
                Obligations.

The order of  priority  set forth in this  Section  4.2(b)(ii)  and the  related
provisions  of this  Agreement  are set forth solely to determine the rights and
priorities of the Administrative Agent and the Lenders as among themselves.  The
order of priority  set forth in clauses (A) and (B) of this  Section  4.2(b)(ii)
may be changed only with the prior written consent of the Administrative Agent.

                (iii)   The Administrative Agent, in its sole discretion subject
        only to the terms of this Section 4.2(b)(iii), may pay from the proceeds
        of Loans  made to the  Borrower  hereunder,  whether  made  following  a
        request by the Borrower  pursuant to Section 2.1 or a deemed  request as
        provided  in  this  Section  4.2(b)(iii),  all  amounts  payable  by the
        Borrower hereunder,  including, without limitation, amounts payable with
        respect to payments of principal,  interest,  Reimbursement  Obligations
        and fees. The Borrower hereby irrevocably authorizes the Lenders to make
        Loans,  which Loans shall be Base Rate Loans,  in each case, upon notice
        from the Administrative Agent as described in the following sentence for
        the purpose of paying principal, interest, Reimbursement Obligations and
        fees due from the Borrower, and agrees that all such Loans so made shall
        be deemed to have been requested by it pursuant to Section 2.1 as of the
        date of the

                                      -44-
<PAGE>


        aforementioned  notice. The Administrative  Agent shall request Loans on
        behalf  of the  Borrower  as  described  in the  preceding  sentence  by
        notifying the Lenders by facsimile transmission or other similar written
        form of  transmission  (which  notice  the  Administrative  Agent  shall
        thereafter promptly transmit to the Borrower), of the amount and Funding
        Date  of the  proposed  Borrowing  and  that  such  Borrowing  is  being
        requested on the Borrower's behalf pursuant to this Section 4.2(b)(iii).
        On the proposed Funding Date, the Lenders shall make the requested Loans
        in  accordance  with  the  procedures  and  subject  to  the  conditions
        specified in Section 2.1.

                (iv)    Subject to Section 4.2(b)(v),  the Administrative  Agent
        shall  promptly  distribute  to the  Arrangers  and each  Lender  at its
        primary  address  set forth on SCHEDULE LC hereto or as set forth in the
        Assignment and Acceptance by which it became a Lender,  or at such other
        address as a Lender may  request in  writing,  such funds as such Person
        may be entitled to receive,  subject to the  provisions  of Article XII;
        provided that the  Administrative  Agent shall under no circumstances be
        bound to inquire into or determine  the  validity,  scope or priority of
        any interest or  entitlement  of any Lender and may suspend all payments
        or seek appropriate relief (including, without limitation,  instructions
        from the Requisite  Lenders or an action in the nature of  interpleader)
        in the  event  of any  doubt  or  dispute  as to  any  apportionment  or
        distribution contemplated hereby.

                (v)     In the event that any Lender  fails to fund its Pro Rata
        Share of any  Loan  requested  by the  Borrower  which  such  Lender  is
        obligated to fund under the terms of this  Agreement (the funded portion
        of such Loan being  hereinafter  referred to as a "NON PRO RATA  LOAN"),
        until  the  earlier  of  such  Lender's  cure of  such  failure  and the
        termination  of the Revolving  Credit  Commitments,  the proceeds of all
        amounts  thereafter repaid to the  Administrative  Agent by the Borrower
        and otherwise required to be applied to such Lender's share of all other
        Obligations pursuant to the terms of this Agreement shall be advanced to
        the  Borrower  by the  Administrative  Agent on behalf of such Lender to
        cure,  in full or in  part,  such  failure  by such  Lender,  but  shall
        nevertheless  be deemed to have been paid to such Lender in satisfaction
        of such other Obligations. Notwithstanding anything in this Agreement to
        the contrary:

                        (A)     the   foregoing   provisions   of  this  Section
                4.2(b)(v)  shall  apply  only with  respect to the  proceeds  of
                payments of  Obligations  and shall not affect the conversion or
                continuation of Loans pursuant to Section 5.1(c);

                        (B)     a  Lender  shall be  deemed  to have  cured  its
                failure  to fund its Pro Rata  Share of any Loan at such time as
                an amount equal to such Lender's  original Pro Rata Share of the
                requested  principal portion of such Loan is fully funded to the
                Borrower,  whether made by such Lender itself or by operation of
                the terms of this Section 4.2(b)(v),  and whether or not the Non
                Pro Rata Loan with respect thereto has been repaid, converted or
                continued;

                        (C)     amounts  advanced to the  Borrower  to cure,  in
                full or in part, any such Lender's  failure to fund its Pro Rata
                Share of any Loan ("CURE LOANS") shall bear interest at the Base
                Rate in effect from time to time,  and for all other purposes of
                this Agreement shall be treated as if they were Base Rate Loans;
                and

                                      -45-
<PAGE>


                        (D)     regardless of whether or not an Event of Default
                has  occurred  or  is  continuing,   and   notwithstanding   the
                instructions of the Borrower as to its desired application,  all
                repayments  of principal  which,  in  accordance  with the other
                terms of this Section 4.2,  would be applied to its  outstanding
                Base Rate Loans shall be applied first, ratably to its Base Rate
                Loans  constituting Non Pro Rata Loans,  second,  ratably to its
                Base Rate Loans other than those constituting Non Pro Rata Loans
                or Cure  Loans  and,  third,  ratably  to its  Base  Rate  Loans
                constituting Cure Loans.

                (c)     PAYMENTS ON NON-BUSINESS  DAYS.  Whenever any payment to
be made by the  Borrower  hereunder  or under the Notes is stated to be due on a
day which is not a Business  Day, the payment  shall  instead be due on the next
succeeding  Business  Day (or,  as set  forth in  Section  5.2(b)(iv),  the next
preceding Business Day).

        4.3.    PROMISE TO REPAY; EVIDENCE OF INDEBTEDNESS.

                (a)     PROMISE TO REPAY. The Borrower hereby agrees to pay when
due, without setoff or counterclaim,  the principal amount of each Loan which is
made to it, and further agrees to pay all unpaid interest  accrued  thereon,  in
accordance  with the terms of this  Agreement and the Notes.  The Borrower shall
execute and deliver to each Lender on the Closing  Date, a promissory  note,  in
the form of EXHIBIT B-1  attached  hereto with blanks  appropriately  completed,
evidencing  the Loans and  thereafter  shall  execute  and  deliver  such  other
promissory  notes as are necessary to evidence the Loans made to it owing to the
Lenders after giving effect to any assignment  thereof pursuant to Section 14.1,
all in the  form of  EXHIBIT  B-1  attached  hereto  with  blanks  appropriately
completed (all such promissory  notes and all amendments  thereto,  replacements
thereof  and  substitutions  therefor  being  collectively  referred  to as  the
"BORROWER NOTES"; and "BORROWER NOTE" means any one of the Borrower Notes).

                (b)     LOAN ACCOUNT.  Each Lender shall  maintain in accordance
with its usual practice an account or accounts (a "LOAN ACCOUNT") evidencing the
Indebtedness  of the Borrower to such Lender  resulting  from each Loan owing to
such Lender from time to time,  including  the amount of principal  and interest
payable and paid to such Lender from time to time hereunder and under the Notes.

                (c)     CONTROL   ACCOUNT.   The  Register   maintained  by  the
Administrative  Agent  pursuant  to  Section  14.1(c)  shall  include  a control
account,  and a subsidiary  account for each Lender,  in which  accounts  (taken
together)  shall be  recorded  (i) the date and  amount of each  Borrowing  made
hereunder,  the  type of  Loan  comprising  such  Borrowing  and any  Eurodollar
Interest Period applicable  thereto,  (ii) the effective date and amount of each
Assignment  and  Acceptance  delivered  to and  accepted  by it and the  parties
thereto,  (iii) the amount of any  principal  or interest  due and payable or to
become due and payable from the  Borrower to each Lender  hereunder or under the
Notes and (iv) the amount of any sum received by the  Administrative  Agent from
the Borrower hereunder and each Lender's share thereof.

                (d)     ENTRIES  BINDING.  The entries  made in the Register and
each Loan  Account  shall be  conclusive  and binding for all  purposes,  absent
manifest error.

                                      -46-
<PAGE>


                (e)     NO RECOURSE.  Notwithstanding anything contained in this
Agreement,  any  Note,  or the  Guaranties  to  the  contrary,  it is  expressly
understood  and agreed that  nothing  herein or therein  shall be  construed  as
creating  any  liability  on  any  Limited  Partner,  or any  partner,  officer,
shareholder or director of any Limited Partner or any officer,  trustee, member,
director,  or  employee  of the  Borrower  or any  Guarantor,  to pay any of the
Obligations  other  than  liability  arising  under  applicable  law  from or in
connection with (i) its own fraud or (ii) the misappropriation or misapplication
by it of proceeds of the Loans;  but nothing  contained in this  Section  4.3(e)
shall be  construed  to  prevent  the  exercise  of any  remedy  allowed  to the
Administrative  Agent,  the  Arrangers  or the Lenders by law or by the terms of
this Agreement or the other Loan Documents which does not relate to or result in
such an obligation by any Limited Partner or such other Persons to pay money.

                                   ARTICLE V.
                                INTEREST AND FEES

        5.1.    INTEREST ON THE LOANS AND OTHER OBLIGATIONS.

                (a)     RATE  OF  INTEREST.   All  Loans  and  the   outstanding
principal  balance of all other  Obligations  shall bear  interest on the unpaid
principal  amount  thereof  from the date  such  Loans  are made and such  other
Obligations are due and payable until paid in full, except as otherwise provided
in Section 5.1(d), as follows:

                (i)     If a Base Rate Loan or such other Obligation,  at a rate
        per annum equal to the sum of (A) the Base Rate,  as in effect from time
        to time as interest  accrues,  PLUS (B) the then  Applicable  Margin for
        Base Rate Loans;

                (ii)    If a Eurodollar  Rate Loan, at a rate per annum equal to
        the  sum of (A)  the  Eurodollar  Rate  determined  for  the  applicable
        Eurodollar  Interest  Period,  PLUS (B) the then  Applicable  Margin for
        Eurodollar Loans; and

                (iii)   If a Competitive  Bid Loan, at a rate per annum equal to
        the  sum of (A)  the  Eurodollar  Rate  determined  for  the  applicable
        Eurodollar Interest Period (determined as if the related Competitive Bid
        Loan were a Committed  Loan which is Eurodollar  Rate Loan) PLUS (B) the
        Competitive Bid Margin quoted by the Lender making such  Competitive Bid
        Loan in accordance with Section 2.2.

The applicable  basis for determining the rate of interest on the Loans shall be
selected  by the  Borrower  at the time a Notice  of  Borrowing  or a Notice  of
Conversion/Continuation  is  delivered  by the  Borrower  to the  Administrative
Agent; PROVIDED, HOWEVER, the Borrower may not select the Eurodollar Rate as the
applicable  basis for  determining the rate of interest on such a Loan if at the
time of such  selection an Event of Default has occurred and is continuing or if
Eurodollar Rate Loans are not available pursuant to Section 5.2(d) or (e). If on
any day any Loan is outstanding with respect to which notice has not been timely
delivered  to the  Administrative  Agent in  accordance  with the  terms of this
Agreement specifying the basis for determining the rate of interest on that day,
then for that day interest on that Loan shall be  determined by reference to the
Base Rate.

                (b)     INTEREST  PAYMENTS.  (i) Interest  accrued on each Loan,
whether a Base Rate Loan, a Eurodollar  Loan or a Competitive  Bid Loan shall be
calculated  on the last day of each  calendar  month  and  shall be  payable  in
arrears (A) on the first day of each calendar month,

                                      -47-
<PAGE>


commencing on the first such day  following the making of such Loan,  and on the
last  day of  the  applicable  Eurodollar  Interest  Period  with  respect  to a
Competitive  Bid Loan, (B) upon the payment or prepayment  thereof in full or in
part,  and  (C) if not  theretofore  paid  in  full,  at  maturity  (whether  by
acceleration or otherwise) of such Loan.

                (ii)    Interest  accrued on the principal  balance of all other
Obligations shall be calculated on the last day of each calendar month and shall
be payable in  arrears  (A) on the first  (1st)  Business  Day of each  calendar
month,  commencing  on the  first  such day  following  the  incurrence  of such
Obligation,  (B)  upon  repayment  thereof  in full or in  part,  and (C) if not
theretofore  paid in full,  at the time such other  Obligation  becomes  due and
payable (whether by acceleration or otherwise).

                (c)     CONVERSION OR CONTINUATION.  (i) The Borrower shall have
the option (A) to convert at any time all or any part of  outstanding  Base Rate
Loans to Eurodollar  Rate Loans;  (B) to convert all or any part of  outstanding
Eurodollar  Rate Loans having  Eurodollar  Interest  Periods which expire on the
same date to Base Rate Loans on such expiration  date; or (C) to continue all or
any part of outstanding Eurodollar Rate Loans having Eurodollar Interest Periods
which  expire on the same date as  Eurodollar  Rate  Loans,  and the  succeeding
Eurodollar  Interest  Period of such  continued  Loans  shall  commence  on such
expiration date;  PROVIDED,  HOWEVER,  no such outstanding Loan may be continued
as, or be converted into, a Eurodollar Rate Loan (i) if the  continuation of, or
the conversion  into, would violate any of the provisions of Section 5.2 or (ii)
if an Event of Default has occurred and is continuing.  Any  conversion  into or
continuation  of Eurodollar  Rate Loans under this Section  5.1(c) shall be in a
minimum amount of $3,000,000 and in integral  multiples of $500,000 in excess of
that amount,  except in the case of a conversion  into or a  continuation  of an
entire Borrowing of Non Pro Rata Loans.

                (ii)    To convert or  continue a Committed  Loan under  Section
5.1(c)(i), the Borrower shall deliver a Notice of Conversion/Continuation to the
Administrative Agent no later than 11:00 a.m. (New York time) at least three (3)
Business Days in advance of the proposed  conversion/continuation date. A Notice
of    Conversion/     Continuation    shall    specify    (A)    the    proposed
conversion/continuation  date (which shall be a Business Day), (B) the principal
amount of the Committed  Loan to be  converted/continued,  (C) whether such Loan
shall be converted and/or continued,  and (D) in the case of a conversion to, or
continuation  of, a Eurodollar  Rate Loan,  the  requested  Eurodollar  Interest
Period. Promptly after receipt of a Notice of Conversion/Continuation under this
Section  5.1(c)(ii),  the  Administrative  Agent  shall  notify  each  Lender by
facsimile  transmission,  or other similar written form of transmission,  of the
proposed  conversion/continuation.  Any  Notice of  Conversion/Continuation  for
conversion to, or continuation of, a Loan (or telephonic notice in lieu thereof)
given pursuant to this Section 5.1(c)(ii) shall be irrevocable, and the Borrower
shall be bound to convert or continue in accordance  therewith.  In the event no
Notice of  Conversion/Continuation  is delivered  as and when  specified in this
Section  5.1(c)(ii) with respect to outstanding  Eurodollar Rate Loans, upon the
expiration of the Eurodollar  Interest  Period  applicable  thereto,  such Loans
shall automatically be converted to a Base Rate Loan.

                (d)     DEFAULT INTEREST.  Notwithstanding the rates of interest
specified  in  Section  5.1(a)  or  elsewhere  in  this   Agreement,   effective
immediately  upon  the  occurrence  of an  Event  of  Default,  and  for as long
thereafter as such Event of Default shall be continuing,  the principal  balance
of all Loans and other Obligations shall bear interest at a rate equal to (A) in
the case of any Eurodollar  Rate Loans  outstanding as of the date of occurrence
of any Event of Default, the sum of (x) the applicable Eurodollar Rate, PLUS (y)
six percent (6.0%) per annum, and

                                      -48-
<PAGE>


(B) in the case of any Base Rate Loan  (including  any  Eurodollar  Loan that is
converted to a Base Rate Loan at maturity)  the sum of (x) the Base Rate,  as in
effect from time to time as interest  accrues,  PLUS (y) five percent (5.0%) per
annum.

                (e)     COMPUTATION  OF  INTEREST.  Interest on all  obligations
shall be  computed  on the basis of the  actual  number of days  elapsed  in the
period  during  which  interest  accrues  and a year of 360 days.  In  computing
interest on any Loan,  the date of the making of such Loan or the first day of a
Eurodollar  Interest Period,  as the case may be, shall be included and the date
of payment or the expiration date of a Eurodollar  Interest Period,  as the case
may be, shall be excluded.

                (f)     EURODOLLAR  RATE  INFORMATION.  Upon the  request of the
Borrower,  the Administrative  Agent shall promptly provide to the Borrower such
information  with  respect  to  the  applicable  Eurodollar  Rate  as  may be so
requested.

        5.2.    SPECIAL   PROVISIONS   GOVERNING   EURODOLLAR   RATE  LOANS  AND
COMPETITIVE BID LOANS.

                (a)     AMOUNT OF EURODOLLAR  RATE LOANS.  Each  Eurodollar Rate
Loan  shall be in a minimum  principal  amount  of  $3,000,000  and in  integral
multiples of $500,000 in excess of that amount.

               (b)     DETERMINATION OF EURODOLLAR  INTEREST PERIOD.  By giving
notice as set forth in Section 2.1(c) (with respect to a Borrowing of Eurodollar
Rate Loans),  Section 2.2 (with respect to a Borrowing of Competitive Bid Loans)
or  Section  5.1(c)  (with  respect  to a  conversion  into or  continuation  of
Eurodollar Rate Loans), the Borrower shall have the option, subject to the other
provisions  of  this  Section  5.2,  to  select  an  interest  period  (each,  a
"EURODOLLAR  INTEREST  PERIOD") to apply to the Loans  described in such notice,
subject to the following provisions:

                (i)     The  Borrower  may  only  select,  as  to  a  particular
        Borrowing of Eurodollar Rate Loans, a Eurodollar Interest Period of one,
        two, three or six months in duration;

                (ii)    The  Borrower  may  only  select,  as  to  a  particular
        Borrowing of Competitive Bid Loans, a Eurodollar Interest Period of one,
        two, or three months in duration;

                (iii)   In  the  case  of  immediately   successive   Eurodollar
        Interest  Periods  applicable to a Borrowing of  Eurodollar  Rate Loans,
        each successive  Eurodollar Interest Period shall commence on the day on
        which the next preceding Eurodollar Interest Period expires;

                (iv)    If any Eurodollar Interest Period would otherwise expire
        on a day which is not a Business Day, such  Eurodollar  Interest  Period
        shall be extended to expire on the next  succeeding  Business Day if the
        next succeeding  Business Day occurs in the same calendar month,  and if
        there will be no succeeding  Business Day in such calendar  month,  such
        Eurodollar  Interest  Period shall expire on the  immediately  preceding
        Business Day;

                                      -49-
<PAGE>


                (v)     The Borrower may not select a Eurodollar Interest Period
        as to any Loan if such Eurodollar  Interest Period terminates later than
        the Revolving Credit Termination Date;

                (vi)    The Borrower may not select a Eurodollar Interest Period
        with respect to any portion of principal of a Loan which extends  beyond
        a date on which the Borrower is required to make a scheduled  payment of
        such  portion of principal of which the Borrower is aware on the date of
        such  request,  in the case of a  payment  pursuant  to  Section  4.1(d)
        hereof; and

                (vii)   There shall be no more than ten (10) Eurodollar Interest
        Periods in effect at any one time with respect to Eurodollar Rate Loans.

                (c)     DETERMINATION  OF EURODOLLAR  INTEREST  RATE. As soon as
practicable on the second Business Day prior to the first day of each Eurodollar
Interest  Period  (the  "EURODOLLAR  INTEREST  RATE  DETERMINATION  DATE"),  the
Administrative  Agent shall  determine  (pursuant to the procedures set forth in
the definition of "Eurodollar  Rate") the interest rate which shall apply to the
Eurodollar  Rate Loans or  Competitive  Bid Loans for which an interest  rate is
then being  determined for the applicable  Eurodollar  Interest Period and shall
promptly  give  notice  thereof  (in  writing or by  telephone  or by  facsimile
confirmed in writing) to the Borrower  and to each  Lender.  The  Administrative
Agent's  determination  shall be presumed to be correct,  absent manifest error,
and shall be binding upon the Borrower.

                (d)     INTEREST RATE UNASCERTAINABLE,  INADEQUATE OR UNFAIR. In
the event that at least one (1) Business Day before any Eurodollar Interest Rate
Determination Date:

                (i)     the  Administrative  Agent is advised  by the  Reference
        Bank that deposits in Dollars (in the applicable  amounts) are not being
        offered by the Reference  Bank in the London  interbank  market for such
        Eurodollar Interest Period; or

                (ii)    the  Administrative  Agent  determines that adequate and
        fair means do not exist for ascertaining  the applicable  interest rates
        by reference to which the Eurodollar Rate then being determined is to be
        fixed;

                (iii)   the Requisite  Lenders advise the  Administrative  Agent
        that the  Eurodollar  Rate for  Eurodollar  Rate Loans  comprising  such
        Borrowing will not adequately reflect the cost to such Requisite Lenders
        of  obtaining  funds in  Dollars in the  London  interbank  market in an
        amount  substantially  equal to such Lenders'  Eurodollar  Rate Loans in
        Dollars and for a period equal to such Eurodollar Interest Period; or

                (iv)    the applicable Lender(s) advise the Administrative Agent
        that the  Eurodollar  Rate for  Competitive  Bid Loans  comprising  such
        Borrowing  will not  adequately  reflect the cost to such  Lender(s)  of
        obtaining funds in Dollars in the London  interbank  market in an amount
        substantially equal to such Lender(s)'  Competitive Bid Loans in Dollars
        and for a period equal to such Eurodollar Interest Period;

then the  Administrative  Agent  shall  forthwith  give  notice  thereof  to the
Borrower and the Lenders, whereupon (until the Administrative Agent notifies the
Borrower that the circumstances  giving rise to such suspension no longer exist)
the right of the  Borrower to elect to have Loans bear  interest  based upon the
Eurodollar Rate shall be suspended and each outstanding Eurodollar

                                      -50-
<PAGE>


Rate Loan and  Competitive  Bid Loan shall be converted into a Base Rate Loan on
the  last  day  of  the  then  current  Eurodollar   Interest  Period  therefor,
notwithstanding any prior election by the Borrower to the contrary.

                (e)     ILLEGALITY.  (i) If at any  time any  Lender  determines
(which  determination  shall, absent manifest error, be final and conclusive and
binding upon all parties) that the making or continuation of any Eurodollar Rate
Loan or Competitive Bid Loan has become unlawful or  impermissible by compliance
by that  Lender  with any law,  governmental  rule,  regulation  or order of any
Governmental  Authority  (whether  or not having the force of law and whether or
not failure to comply  therewith  would be unlawful or would  result in costs or
penalties),  then,  and in any such  event,  such Lender may give notice of that
determination, in writing, to the Borrower and the Administrative Agent, and the
Administrative Agent shall promptly transmit the notice to each other Lender.

                (ii)    When  notice  is  given  by  a  Lender   under   Section
        5.2(e)(i), (A) the Borrower's right to request from such Lender and such
        Lender's  obligation,  if any,  to make  Eurodollar  Rate  Loans  to the
        Borrower  shall be immediately  suspended,  and such Lender shall make a
        Base Rate Loan as part of any  requested  Borrowing of  Eurodollar  Rate
        Loans  and  (B) if  the  affected  Eurodollar  Rate  Loan  or  Loans  or
        Competitive  Bid  Loans  are  then   outstanding,   the  Borrower  shall
        immediately,  or if permitted by applicable  law, no later than the date
        permitted  thereby,  upon at least one (1) Business  Day's prior written
        notice to the Administrative Agent and the affected Lender, convert each
        such Loan into a Base Rate Loan.

                (iii)   If at any time after a Lender gives notice under Section
        5.2(e)(i) such Lender  determines  that it may lawfully make  Eurodollar
        Rate  Loans,   such   Lender   shall   promptly   give  notice  of  that
        determination, in writing, to the Borrower and the Administrative Agent,
        and the Administrative  Agent shall promptly transmit the notice to each
        other  Lender.  The  Borrower's  right to  request,  and  such  Lender's
        obligation,  if any, to make Eurodollar Rate Loans to the Borrower shall
        thereupon be restored.

                (f)     COMPENSATION.  In addition to all amounts required to be
paid by the  Borrower  pursuant to Section 5.1 and Article  XIII,  the  Borrower
shall  compensate  each  Lender,  upon  demand,  for all  losses,  expenses  and
liabilities  (including,  without  limitation,  any loss or expense  incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
such  Lender  to fund  or  maintain  such  Lender's  Eurodollar  Rate  Loans  or
Competitive  Bid Loans to the  Borrower,  but  excluding  any loss of Applicable
Margin on the  relevant  Loans)  which that  Lender may  sustain  (i) if for any
reason a Borrowing,  conversion  into or  continuation  of Eurodollar Rate Loans
and/or  Competitive  Bid Loans does not occur on a date specified  therefor in a
Notice of Borrowing or a Notice of Conversion/Continuation given by the Borrower
or in a telephonic request by it for borrowing or conversion/  continuation or a
successive Eurodollar Interest Period does not commence after notice therefor is
given pursuant to Section 5.1(c), other than pursuant to Sections 5.2(d) or (e),
or (ii) if for any  reason  any  Eurodollar  Rate Loan is  prepaid  (other  than
pursuant to Section  5.2(d) or (e)) or converted on a date which is not the last
day of the applicable  Eurodollar  Interest  Period or (iii) as a consequence of
any failure by the Borrower to repay a Eurodollar  Rate Loan or Competitive  Bid
Loan when required by the terms of this Agreement.  The Lender making demand for
such compensation shall deliver to the Borrower  concurrently with such demand a
written  statement  in  reasonable  detail  as  to  such

                                      -51-
<PAGE>


losses,  expenses and liabilities,  and this statement shall be conclusive as to
the amount of compensation due to that Lender, absent manifest error.

                (g)     BOOKING OF  EURODOLLAR  RATE LOANS AND  COMPETITIVE  BID
LOANS.  Any  Lender  may  make,  carry or  transfer  Eurodollar  Rate  Loans and
Competitive  Bid Loans at, to, or for the  account  of, its  Eurodollar  Lending
Office or  Eurodollar  Affiliate or its other offices or  Affiliates.  No Lender
shall be entitled,  however, to receive any greater amount under Sections 4.2 or
5.2(f) or Article XIII as a result of the transfer of any such  Eurodollar  Rate
Loan or Competitive Bid Loan to any office (other than such  Eurodollar  Lending
Office) or any Affiliate (other than such Eurodollar Affiliate) than such Lender
would have been entitled to receive  immediately  prior thereto,  unless (i) the
transfer occurred at a time when circumstances giving rise to the claim for such
greater  amount did not exist and (ii) such claim would have arisen even if such
transfer had not occurred.

                (h)     AFFILIATES  NOT  OBLIGATED.  No Eurodollar  Affiliate or
other Affiliate of any Lender shall be deemed a party to this Agreement or shall
have any liability or obligation under this Agreement.

                (i)     ADJUSTED  EURODOLLAR  RATE. Any failure by any Lender to
take into account the Eurodollar  Reserve  Percentage when calculating  interest
due on  Eurodollar  Rate Loans or  Competitive  Bid Loans shall not  constitute,
whether by course of dealing or otherwise,  a waiver by such Lender of its right
to collect such amount for any future period.

                (j)     APPLICATION  OF  MANDATORY  PREPAYMENTS.  The  principal
amount of any mandatory  prepayment pursuant to Section 4.1(d) hereof,  shall be
applied,  first, to the outstanding Base Rate Loans and then, to the outstanding
Eurodollar  Rate Loans.  Unless the Borrower  otherwise  pays breakage  costs in
accordance  with  Section  5.2(f),  the  Administrative  Agent  shall  hold such
principal  amounts  allocated for prepayment of Eurodollar  Rate Loans until the
end of the  applicable  Eurodollar  Interest  Periods)  and,  during the interim
period,  shall invest said sums in Cash  Equivalents.  Interest  earned  thereon
shall be forwarded to the Borrower upon the payment of the Eurodollar Rate Loans
at the end of said Eurodollar Interest Period. Interest shall continue to accrue
on the principal amount of such Eurodollar Rate Loans until so paid.

        5.3.    FEES.

                (a)     LETTER  OF CREDIT  FEE.  The  Borrower  shall pay to the
Administrative  Agent,  for the  account of the Lenders in  proportion  to their
interests in  respective  undrawn  Letters of Credit,  a Letter of Credit Fee as
more particularly set forth in Section 3.1(g) hereof.

                (b)     FACILITY   FEE.   The   Borrower   shall   pay   to  the
Administrative  Agent for the account of the Lenders  based on their  respective
Pro Rata  Shares,  a facility fee on the  Revolving  Credit  Commitments  at the
respective  percentages  per annum based upon the  Borrower's  Credit  Rating in
accordance with the following table:

                                      -52-
<PAGE>


                   Range of
                   the Borrower's
                   Credit Rating
                   (S&P/Moody's                   Facility Fee
                   Ratings)                       (% per annum)
                   --------                       -------------
                   A-/A3 or higher                    0.15
                   BBB+/Baa1                          0.175
                   BBB/Baa2                           0.20
                   BBB-/Baa3                          0.20
                   Below BBB-/Baa3 or unrated         0.30

The facility fee shall be payable quarterly,  in arrears,  on the first Business
Day of each January,  April, July and October,  commencing on the first such day
after the Closing Date. Any change in the Borrower's Credit Rating causing it to
move into a different range on the table shall effect an immediate change in the
applicable percentage per annum. The Borrower shall maintain Credit Ratings from
at least two (2) Rating Agencies, one of which must be Moody's or S&P so long as
such  Persons  are in the  business  of  providing  debt  ratings  for the  REIT
industry;  PROVIDED  that if the Borrower  fails to maintain at least two Credit
Ratings,  the  applicable  percentage  shall be based upon an S&P rating of less
than BBB- in the table above. In the event that the Borrower's  Credit Rating is
such that the Rating  Agencies'  ratings are split  between a higher and a lower
rating,  the  applicable  percentage  per annum shall be based upon the lower of
such two (2) Credit Ratings.  In the event that the Borrower  receives more than
two  (2)  Credit  Ratings  and  such  Credit  Ratings  are not  equivalent,  the
applicable fee shall be determined by the lower of the two (2) highest  ratings,
provided that each of said two (2) highest  ratings  shall be  Investment  Grade
Ratings and at least one of which shall be an  Investment  Grade Rating from S&P
or Moody's.

        Notwithstanding  the  foregoing,  in the event that any Lender  fails to
fund its Pro Rata Share of any Loan  requested by the Borrower which such Lender
is  obligated to fund under the terms of this  Agreement,  (A) such Lender shall
not be entitled to any portion of the facility fee with respect to its Revolving
Credit  Commitment  until such failure has been cured in accordance with Section
4.2(b)(v)(B)  and (B) until such time, the facility fee shall accrue in favor of
the Lenders which have funded their respective Pro Rata Shares of such requested
Loan, and shall be allocated  among such  performing  Lenders ratably based upon
their relative Revolving Credit Commitments.

                (c)     COMPETITIVE BID FEE. Simultaneously with the delivery of
each  Notice  of  Competitive  Bid  Borrowing,  the  Borrower  shall  pay to the
Administrative Agent for its own account, a fee equal to $2,500.

                (d)     CALCULATION  AND  PAYMENT  OF FEES.  All  fees  shall be
calculated  on the basis of the actual number of days elapsed in a 360-day year.
All  fees  shall be  payable  in  addition  to,  and not in lieu  of,  interest,
compensation,  expense  reimbursements,  indemnification  and other Obligations.
Fees shall be payable to the Administrative Agent at its office in New York, New
York in immediately  available funds unless otherwise set forth herein. All fees
shall be fully earned and nonrefundable  when paid. All fees due to any Arranger
or any Lender, including,  without limitation, those referred to in this Section
5.3, shall bear  interest,  if not paid when due, at the interest rate specified
in Section 5.1(d) and shall constitute Obligations.

                                      -53-
<PAGE>


                                  ARTICLE VI.
                    CONDITIONS TO LOANS AND LETTERS OF CREDIT

        6.1.    CONDITIONS PRECEDENT TO THE INITIAL LOANS AND LETTERS OF CREDIT.
The  obligation  of each  Lender on the  Initial  Funding  Date to make any Loan
requested to be made by it, and to issue Letters of Credit,  shall be subject to
the satisfaction of all of the following conditions precedent:

                (a)     DOCUMENTS.  The Administrative Agent shall have received
on or before the Initial Funding Date all of the following:

                (i)     this  Agreement,  the  Notes,  and,  to the  extent  not
        otherwise specifically referenced in this Section 6.1(a), all other Loan
        Documents and  agreements,  documents and  instruments  described in the
        List of Closing  Documents  attached hereto as EXHIBIT E and made a part
        hereof,  each duly executed,  and in form and substance  satisfactory to
        the Agents; without limiting the foregoing,  the Borrower hereby directs
        its counsel,  Fried Frank  Harris  Shriver & Jacobson LLP to prepare and
        deliver to the Agents, the Lenders,  and Bingham McCutchen LLP the legal
        opinions referred to in such List of Closing Documents; and

                (ii)    such   additional   documentation   as  the  Agents  may
        reasonably request.

                (b)     NO  LEGAL  IMPEDIMENTS.   No  law,  regulation,   order,
judgment or decree of any Governmental  Authority shall, and the  Administrative
Agent  shall  not have  received  any  notice  that  litigation  is  pending  or
threatened which is likely to (i) enjoin, prohibit or restrain the making of the
Loans  and/or the  issuance of Letters of Credit on the Initial  Funding Date or
(ii) impose or result in the imposition of a Material Adverse Effect.

                (c)     NO CHANGE  IN  CONDITION.  No  change  in the  business,
assets, management, operations, financial condition or prospects of the Borrower
or any of its Properties  shall have occurred since March 31, 2004 which change,
in the judgment of the Administrative Agent and the Syndication Agent, will have
a Material Adverse Effect.

                (d)     INTERIM  LIABILITIES AND EQUITY.  Except as disclosed to
the  Arrangers and the Lenders,  since March 31, 2004,  neither the Borrower nor
the Company shall have (i) entered into any (as  determined in good faith by the
Administrative  Agent and the  Syndication  Agent)  commitment  or  transaction,
including,   without   limitation,   transactions  for  borrowings  and  capital
expenditures,  which are not in the ordinary course of the Borrower's  business,
(ii)  declared or paid any  dividends or other  distributions  other than in the
ordinary course of business,  (iii) established compensation or employee benefit
plans, or (iv) redeemed or issued any equity Securities, in each case other than
those described on SCHEDULE 6.1(d) hereto.

                (e)     NO LOSS OF MATERIAL AGREEMENTS AND LICENSES. Since March
31, 2004,  no  agreement  or license  relating to the  business,  operations  or
employee relations of the Borrower or any of its Real Properties shall have been
terminated,  modified,  revoked,  breached or  declared  to be in  default,  the
termination,  modification,  revocation,  breach or default under which,  in the
reasonable judgment of the Administrative Agent and the Syndication Agent, would
result in a Material Adverse Effect.

                                      -54-
<PAGE>


                (f)     NO MARKET  CHANGES.  Since the Closing  Date no material
adverse change shall have occurred in the conditions in the capital markets.

                (g)     NO DEFAULT.  No Event of Default or  Potential  Event of
Default shall have occurred and be continuing or would result from the making of
the Loans or the issuance of any Letter of Credit.

                (h)     REPRESENTATIONS    AND    WARRANTIES.    All    of   the
representations  and warranties  contained in Sections 7.1, 9.12(b) and 9.14 and
in any of the other Loan  Documents  shall be true and  correct in all  material
respects on and as of the Initial Funding Date.

                (i)     FEES AND  EXPENSES  PAID.  There shall have been paid to
the  Administrative  Agent,  for the accounts of the Agents and the Lenders,  as
applicable,  all fees due and payable on or before the Initial  Funding Date and
all expenses due and payable on or before the Initial  Funding Date,  including,
without limitation, reasonable attorneys' fees and expenses, and other costs and
expenses incurred in connection with the Loan Documents.

        6.2.    CONDITIONS  PRECEDENT  TO ALL  SUBSEQUENT  LOANS AND  LETTERS OF
CREDIT.  The  obligation of each Lender to make any Loan requested to be made by
it on any date after the Initial  Funding Date and the  agreement of each Lender
to issue any Letter of Credit on any date after the Initial  Funding  Date shall
be subject to the following conditions precedent as of each such date:

                (a)     REPRESENTATIONS  AND  WARRANTIES.  As of such date, both
before and after  giving  effect to the Loans to be made or the Letter of Credit
to be issued on such date,  all of the  representations  and  warranties  of the
Borrower   contained  in  Sections  7.1,   9.12(b)  and  9.14  and  all  of  the
representations  of the Borrower and the parties to the  Guaranties in any other
Loan Document (other than  representations  and warranties which expressly speak
as of a different date) shall be true and correct in all material respects.

                (b)     NO DEFAULTS.  No Event of Default or Potential  Event of
Default shall have occurred and be continuing or would result from the making of
the requested  Loan or issuance of the requested  Letter of Credit.  Each of the
Lenders  shall have received the  Officer's  Certificate  as provided in Section
2.1(c)(vii), 2.2(f) or 3.1(c).

                (c)     NO  LEGAL  IMPEDIMENTS.   No  law,  regulation,   order,
judgment or decree of any Governmental  Authority shall, and the  Administrative
Agent shall not have received  from such Lender  notice that, in the  reasonable
judgment of such Lender, litigation is pending or threatened which is likely to,
enjoin,  prohibit or restrain  such  Lender's  making of the  requested  Loan or
participation in or issuance of the requested Letter of Credit.

                (d)     NO MATERIAL ADVERSE EFFECT.  The Borrower shall not have
received  written  notice from the Requisite  Lenders that an event has occurred
since the date of this  Agreement  which has had and  continues  to have,  or is
reasonably likely to have, a Material Adverse Effect.

Each  submission  by the  Borrower  to the  Administrative  Agent of a Notice of
Borrowing  with  respect  to a Loan,  each  acceptance  by the  Borrower  of the
proceeds  of each Loan made  hereunder,  each  submission  by the  Borrower to a
Lender of a request for  issuance of a Letter of Credit and the issuance of such
Letter of Credit, shall constitute a representation and warranty by

                                      -55-
<PAGE>


the  Borrower  as of the  Funding  Date in  respect of such Loan and the date of
issuance of such Letter of Credit,  that all the  conditions  contained  in this
Section 6.2 have been  satisfied or waived in  accordance  with Section 14.7 (it
being understood that with respect to the condition set forth in Section 6.2(c),
the same shall constitute a representation  and warranty by the Borrower only to
the extent that the Borrower shall have knowledge of any of the events set forth
therein).

                                  ARTICLE VII.
                         REPRESENTATIONS AND WARRANTIES

        7.1.    REPRESENTATIONS  AND  WARRANTIES  OF THE  BORROWER.  In order to
induce the  Lenders to enter into this  Agreement  and to make the Loans and the
other  financial  accommodations  to the  Borrower  and to issue the  Letters of
Credit  described  herein,  the Borrower hereby  represents and warrants to each
Lender that the following statements are true, correct and complete:

                (a)     ORGANIZATION;  POWERS. (i) The Borrower (A) is a limited
partnership duly organized, validly existing and in good standing under the laws
of the State of  Delaware,  (B) is duly  qualified to do business and is in good
standing under the laws of each jurisdiction in which failure to be so qualified
and in good standing will have a Material Adverse Effect,  (C) has all requisite
power and authority to own, operate and encumber its Property and to conduct its
business as presently  conducted  and as proposed to be conducted in  connection
with and following the  consummation  of the  transactions  contemplated by this
Agreement, and (D) is a partnership for federal income tax purposes.

                (ii)    The Company (A) is a corporation duly organized, validly
existing and in good  standing  under the laws of the State of Maryland,  (B) is
duly  authorized  and qualified to do business and is in good standing under the
laws of each  jurisdiction  in  which  failure  to be so  qualified  and in good
standing  will  have a  Material  Adverse  Effect,  and (C)  has  all  requisite
corporate  power and authority to own,  operate and encumber its Property and to
conduct its business as presently conducted.

                (iii)   True,  correct and complete copies of the Organizational
Documents of the Borrower and the Company identified on SCHEDULE 7.1-A have been
delivered to  Administrative  Agent,  each of which is in full force and effect,
has not been  modified  or amended  except to the extent set forth or  indicated
therein or as  otherwise  permitted  hereby and,  to the best of the  Borrower's
knowledge,  there are no defaults  under such  Organizational  Documents  and no
events  which,  with the  passage  of time or giving  of  notice or both,  would
constitute a default under such Organizational Documents.  Borrower shall update
SCHEDULE  7.1-A  from  time to time in  order  to keep  said  Schedule  true and
correct.

                (iv)    Neither  the  Borrower  nor the  Company  is a  "foreign
person" within the meaning of Section 1445 of the Internal Revenue Code.

                (b)     AUTHORITY.  (i) The Company has the requisite  power and
authority  to execute and deliver  this  Agreement on behalf of the Borrower and
each of the other Loan Documents  which are required to be executed on behalf of
the  Borrower as required by this  Agreement.  The Company is the Person who has
executed this  Agreement and such other Loan Documents on behalf of the Borrower
and is the sole general partner of the Borrower.

                                      -56-
<PAGE>


                (ii)    The execution,  delivery and  performance of each of the
Loan Documents  which must be executed in connection  with this Agreement by the
Borrower  and to which  the  Borrower  is a party  and the  consummation  of the
transactions  contemplated thereby are within the Borrower's partnership powers,
have been duly authorized by all necessary  partnership action (and, in the case
of the Company  acting on behalf of the Borrower in  connection  therewith,  all
necessary  corporate action of the Company) and such  authorization has not been
rescinded.  No other  partnership or corporate action or proceedings on the part
of the Borrower or the Company is necessary to consummate such transactions.

                (iii)   Each of the Loan  Documents  to which the  Borrower is a
party has been duly  executed  and  delivered  on  behalf  of the  Borrower  and
constitutes  the Borrower's  legal,  valid and binding  obligation,  enforceable
against the Borrower in accordance  with its terms,  except as may be limited by
applicable bankruptcy, insolvency,  reorganization,  moratorium or other similar
laws affecting  creditors'  rights generally or by general  principles of equity
regardless  of whether  enforcement  is  considered in a proceeding at law or in
equity. Each of the Loan Documents to which Borrower is a party is in full force
and effect and all the terms,  provisions,  agreements  and conditions set forth
therein  and  required to be  performed  or complied  with by the  Company,  the
Borrower and the Borrower's  Subsidiaries  on or before the Initial Funding Date
have been performed or complied with, and no Potential Event of Default or Event
of Default exists.

                (c)     SUBSIDIARIES; OWNERSHIP OF CAPITAL STOCK AND PARTNERSHIP
INTERESTS.  (i) SCHEDULE  7.1-C (A) contains a diagram  indicating the corporate
structure of the Company, the Borrower and any other Person in which the Company
or the Borrower holds a direct or indirect  partnership,  joint venture or other
equity  interest  indicating  the nature of such  interest  with respect to each
Person  included in such diagram;  and (B) accurately sets forth (1) the correct
legal name of such Person, the jurisdiction of its incorporation or organization
and the jurisdictions in which it is qualified to transact business as a foreign
corporation, or otherwise, and (2) the authorized, issued and outstanding shares
or interests of each class of equity Securities of the Company, the Borrower and
the  Subsidiaries  of the  Borrower,  and  (3)  the  ownership  interest  of the
Borrower,  the  Company  and  the  Subsidiaries  of the  Borrower  in all  Joint
Ventures.  None of such  issued  and  outstanding  Securities  is subject to any
vesting,  redemption,  or  repurchase  agreement,  and there are no  warrants or
options (other than Permitted  Securities  options)  outstanding with respect to
such  Securities,  except as noted on SCHEDULE 7.1-C.  The  outstanding  Capital
Stock  of the  Company  is duly  authorized,  validly  issued,  fully  paid  and
nonassessable   and  the   outstanding   Securities  of  the  Borrower  and  its
Subsidiaries are duly authorized and validly issued.  Attached hereto as part of
SCHEDULE 7.1-C is a true, accurate and complete copy of the Borrower Partnership
Agreement  as in  effect  on the  Closing  Date  and  the  Borrower  Partnership
Agreement has not been amended,  supplemented,  replaced,  restated or otherwise
modified in any respect  since the Closing Date,  except as otherwise  permitted
hereby.  Borrower shall update SCHEDULE 7.1-C as of the first day of each fiscal
quarter,  and shall  deliver the same  together  with the  Quarterly  Compliance
Certificates,  to the extent  required,  in order to keep said Schedule true and
correct.

                (ii)    Except where failure  would not have a Material  Adverse
Effect, each of the Subsidiaries of the Borrower: (A) is a corporation,  limited
liability company or partnership, as indicated on SCHEDULE 7.1-C, duly organized
or formed, validly existing and, if applicable,  in good standing under the laws
of the  jurisdiction of its  organization,  (B) is duly qualified to do business
and, if applicable,  is in good standing under the laws of each  jurisdiction in
which  failure to be so  qualified  and in good  standing  would have a Material
Adverse Effect, and (C) has all

                                      -57-
<PAGE>


requisite  power and authority to own,  operate and encumber its Property and to
conduct its  business as  presently  conducted  and as proposed to be  conducted
hereafter.

                (iii)   As to each Guarantor, a provision similar, as applicable
to (a), (b) and (c) above shall be included in each such Subsidiary's  Guaranty,
and the  Borrower  shall be  deemed  to make for  itself  and on  behalf of such
Subsidiary a representation as to such provisions.

                (d)     NO CONFLICT. The execution,  delivery and performance of
each of the Loan  Documents to which the Borrower,  the Company or any Guarantor
is a party,  and the  consummation of the  transactions  expressly  contemplated
thereby  respectively,  do not and will not (i) conflict with the Organizational
Documents of the Borrower,  the Company or any  Guarantor,  (ii) conflict  with,
result in a breach of or constitute  (with or without notice or lapse of time or
both) a default under any Requirement of Law or material Contractual  Obligation
of the Borrower,  the Company or any  Guarantor,  or require  termination of any
such material  Contractual  Obligation  which would  subject the  Administrative
Agent or any of the other Lenders to any  liability,  (iii) result in or require
the creation or  imposition of any Lien  whatsoever  upon any of the Property or
assets of the  Borrower,  the  Company or any  Guarantor,  or (iv)  require  any
approval of  shareholders  of the Company  (other than such  approvals that have
been obtained and are in full force and effect).

                (e)     GOVERNMENTAL  CONSENTS.  The  execution,   delivery  and
performance of each of the Loan Documents to which the Borrower,  the Company or
any  Guarantor is a party and the  consummation  of the  transactions  expressly
contemplated  thereby do not and will not require any registration with, consent
or approval  of, or notice to, or other  action to, with or by any  Governmental
Authority, except filings, consents or notices which have been made, obtained or
given.

                (f)     GOVERNMENTAL  REGULATION.  None  of  the  Borrower,  the
Company or the  Guarantors  is subject to  regulation  under the Public  Utility
Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce Act,
or the Investment  Company Act of 1940, or any other federal or state statute or
regulation  which limits its ability to incur  indebtedness  as  contemplated by
this Agreement.

                (g)     FINANCIAL POSITION.  Complete and accurate copies of the
following  financial  statements  and  materials  have  been  delivered  to  the
Administrative  Agent:  annual unaudited  financial  statements of the Borrower,
annual  audited  financial  statements  of the Company for the fiscal year ended
December  31, 2003 and  unaudited  financial  statements  of the Company for the
fiscal  quarter  ended March 31, 2004.  All annual  financial  statements of the
Borrower shall be accompanied by an Officer's  Certificate of the Borrower,  and
shall be  certified  by the Chief  Financial  Officer of the  Borrower as fairly
presenting in all material respects the financial position of the Borrower.  All
financial  statements  included in such  materials were prepared in all material
respects in conformity with GAAP, except as otherwise noted therein,  and fairly
present in all material respects the respective consolidated financial positions
as of the date referred to therein,  and the consolidated  results of operations
and cash flows for each of the periods  covered  thereby of the Borrower and the
Company.  Neither the  Borrower nor the Company has any  Contingent  Obligation,
contingent liability or liability for any taxes, long-term leases or commitments
not reflected in its financial  statements delivered to the Administrative Agent
on or prior to the Closing  Date or otherwise  disclosed  to the  Administrative
Agent and the  Lenders in writing on or prior to the  Closing  Date,  which will
have a Material Adverse Effect.

                                      -58-
<PAGE>


                (h)     INDEBTEDNESS. SCHEDULE 7.1-H sets forth, as of March 31,
2004, all Indebtedness  for borrowed money of each of the Borrower,  the Company
and their  respective  Subsidiaries  and, except as set forth on SCHEDULE 7.1-H,
there are no  defaults in the  payment of  principal  of or interest on any such
Indebtedness  and no payments  thereunder  have been deferred or extended beyond
their  stated  maturity  and  there has been no  material  change in the type or
amount of such Indebtedness  (except for the repayment of certain  Indebtedness)
since March 31, 2004.

                (i)     LITIGATION;  ADVERSE  EFFECTS.  Except  as set  forth in
SCHEDULE 7.1-I, as of the Closing Date,  there is no action,  suit,  proceeding,
investigation or arbitration before or by any Governmental  Authority or private
arbitrator pending or, to the knowledge of the Borrower,  threatened against the
Company, the Borrower or any of their respective  Subsidiaries,  or any Property
of any of them (i) challenging the validity or the  enforceability of any of the
Loan  Documents,  (ii)  which is  reasonably  likely to  result in any  Material
Adverse  Effect,  or  (iii)  under  the  Racketeering   Influenced  and  Corrupt
Organizations Act or any similar federal or state statute where such Person is a
defendant in a criminal indictment that provides for the forfeiture of assets to
any Governmental Authority as a potential criminal penalty. There is no material
loss contingency  within the meaning of GAAP which has not been reflected in the
consolidated  financial statements of the Company and the Borrower.  None of the
Company,  the Borrower or any  Subsidiary of the Borrower is (A) in violation of
any applicable  Requirements  of Law which  violation will have or is reasonably
likely to have a Material Adverse Effect,  or (B) in default with respect to any
final  judgment,  writ,  injunction,  restraining  order or order of any nature,
decree,  rule or regulation of any court or  Governmental  Authority  which will
have a Material Adverse Effect.

                (j)     NO MATERIAL ADVERSE EFFECT.  Since March 31, 2004, there
has occurred no event which has had a Material Adverse Effect.

                (k)     Intentionally Omitted.

                (l)     PAYMENT OF TAXES. All material tax returns,  reports and
similar statements or filings of the Company,  the Borrower and their respective
Subsidiaries  required to be filed have been timely filed (or extensions to file
have been obtained),  and, except for Customary  Permitted  Liens,  all material
taxes, assessments, fees and other charges of Governmental Authorities thereupon
and upon or relating to their respective Properties,  assets,  receipts,  sales,
use,  payroll,  employment,  income,  licenses and franchises which are shown in
such  returns  or reports to be due and  payable  have been paid,  except to the
extent (i) such  taxes,  assessments,  fees and other  charges  of  Governmental
Authorities  are being  contested  in good  faith by an  appropriate  proceeding
diligently pursued as permitted by the terms of Section 9.4 and (ii) such taxes,
assessments,  fees and other  charges  of  Governmental  Authorities  pertain to
Property of the Borrower or any of its  Subsidiaries  and the non-payment of the
amounts  thereof  would  not,  individually  or in the  aggregate,  result  in a
Material  Adverse  Effect.   All  other  material  taxes   (including,   without
limitation, real estate taxes), assessments, fees and other governmental charges
upon  or  relating  to  the  respective  Properties  of  the  Borrower  and  its
Subsidiaries  which are due and  payable  have been paid,  except for  Customary
Permitted  Liens and except to the  extent  described  in  clauses  (i) and (ii)
hereinabove.  The Borrower  has no  knowledge  of any  proposed  tax  assessment
against the Borrower, any of its Subsidiaries,  or any of the Projects that will
have or is reasonably likely to have a Material Adverse Effect.

                                      -59-
<PAGE>


                (m)     PERFORMANCE.  To the knowledge of the Borrower,  neither
the Company, the Borrower nor any of their Subsidiaries has received any written
notice or citation,  nor has actual knowledge,  that (i) it is in default in the
performance,  observance or fulfillment of any of the obligations,  covenants or
conditions contained in any Contractual Obligation applicable to it, or (ii) any
condition exists which,  with the giving of notice or the lapse of time or both,
would constitute a default with respect to any such Contractual  Obligation;  in
each case,  except  where  such  default or  defaults,  if any,  will not have a
Material Adverse Effect.

                (n)     DISCLOSURE.  The  representations  and warranties of the
Borrower  and  the  Guarantors   contained  in  the  Loan  Documents,   and  all
certificates and other documents  delivered to the  Administrative  Agent or any
Lender pursuant to the terms thereof,  do not contain any untrue  statement of a
material  fact or omit to state a material  fact  necessary in order to make the
statements  contained  herein or therein,  in light of the  circumstances  under
which they were made,  taken as a whole,  not  misleading.  Notwithstanding  the
foregoing,  the Lenders  acknowledge  that the Borrower shall not have liability
under this clause (n) with respect to its  projections  of future  events or for
any financial projections.

                (o)     REQUIREMENTS  OF LAW.  Each of the  Borrower and each of
its  Subsidiaries is in compliance with all Requirements of Law applicable to it
and its respective businesses and Properties,  in each case where the failure to
so comply individually or in the aggregate will have a Material Adverse Effect.

                (p)     ENVIRONMENTAL MATTERS.

                (i)     Except as  disclosed  on  SCHEDULE  7.1-P (the  Borrower
shall  update  SCHEDULE  7.1-P as of the first day of each fiscal  quarter,  and
deliver the same  together with the Quarterly  Compliance  Certificates,  to the
extent required, in order to keep said Schedule true and correct):

                        (A)     the  operations  of the  Borrower,  each  of its
                Subsidiaries,  and their respective  Properties  comply with all
                applicable Environmental,  Health or Safety Requirements of Law,
                except  to the  extent  any  failure  to do so would  not have a
                Material Adverse Effect;

                        (B)     the Borrower and each of its  Subsidiaries  have
                obtained all material  environmental,  health and safety Permits
                necessary for their respective operations,  and all such Permits
                are in good  standing  and the  holder  of each  such  Permit is
                currently in  compliance  with all terms and  conditions of such
                Permits,  except to the  extent  any  failure to do so would not
                have a Material Adverse Effect;

                        (C)     to the  knowledge of the  Borrower,  none of the
                Borrower, its Subsidiaries or any of their respective present or
                past  Properties or operations are subject to or are the subject
                of any investigation of any Governmental Authority,  judicial or
                administrative   proceeding,    order,   judgment   or   decree,
                negotiations,   agreement  or  settlement   respecting  (I)  any
                Remedial  Action,  (II) any  Claims  or  Liabilities  and  Costs
                arising from the Release or threatened  Release of a Contaminant
                into the  environment,  or (III) any  violation  of or liability
                under any  Environmental,  Health or Safety  Requirement of Law,
                except to the extent none of the foregoing would have a Material
                Adverse Effect;

                                      -60-
<PAGE>


                        (D)     none of Borrower or any of its  Subsidiaries has
                filed any notice  under any  applicable  Requirement  of Law (I)
                reporting a Release of a Contaminant;  (II)  indicating  past or
                present treatment,  storage or disposal of a hazardous waste, as
                that  term is  defined  under 40  C.F.R.  Part 261 or any  state
                equivalent;  or (III)  reporting a violation  of any  applicable
                Environmental,  Health or Safety Requirement of Law with respect
                to any of the  foregoing,  the  substance  of which would have a
                Material Adverse Effect;

                        (E)     none   of   the   Borrower's   or   any  of  its
                Subsidiaries'  present  or past  Property  is listed  or, to the
                knowledge of the Borrower,  proposed for listing on the National
                Priorities   List   ("NPL")   pursuant   to  CERCLA  or  on  the
                Comprehensive   Environmental  Response  Compensation  Liability
                Information System List ("CERCLIS") or any similar state list of
                sites requiring Remedial Action;

                        (F)     to the  knowledge of the  Borrower,  none of the
                Borrower  or  any of  its  Subsidiaries  has  sent  or  directly
                arranged  for the  transport  of any waste to any site listed or
                proposed  for listing on the NPL,  CERCLIS or any similar  state
                list;

                        (G)     to the best of the Borrower's  knowledge,  there
                is not now,  and to the  Borrower's  knowledge  there  has never
                been, on or in any Project (I) any treatment, recycling, storage
                away from the site of  generation  or disposal of any  hazardous
                waste,  as that term is defined under 40 C.F.R.  Part 261 or any
                state  equivalent,  (II) any solid  waste  management  facility,
                (III) any underground storage tanks the presence or use of which
                is in violation of  applicable  Environmental,  Health or Safety
                Requirements  of  Law,  (IV)  any  asbestos-containing  material
                which,  in its  present  state,  such  Person  has any reason to
                believe could subject such Person or its Property to Liabilities
                and Costs arising out of or relating to environmental, health or
                safety matters that would result in a Material  Adverse  Effect;
                or (V) any  polychlorinated  biphenyls  (PCB) used in  hydraulic
                oils, electrical transformers or other Equipment,  which, in any
                such case,  would  subject the Borrower or its  Subsidiaries  or
                their respective Properties to Liabilities and Costs arising out
                of or relating to  environmental,  health or safety matters that
                would result in a Material Adverse Effect;

                        (H)     to the  knowledge of the  Borrower,  none of the
                Borrower or any of its  Subsidiaries  has received any notice or
                Claim to the effect that any of such Persons is or may be liable
                to any Person as a result of the Release or  threatened  Release
                of a Contaminant  into the  environment  which would result in a
                Material Adverse Effect;

                        (I)     none of the Borrower or any of its  Subsidiaries
                has any contingent  liability in connection  with any Release or
                threatened  Release  of any  Contaminants  into the  environment
                which will result in a Material Adverse Effect;

                                      -61-
<PAGE>


                        (J)     no  Environmental   Lien  has  attached  to  any
                Property of the Borrower or any of its Subsidiaries  (other than
                those otherwise permitted  hereunder) or which do not constitute
                an Event of Default; and

                        (K)     no  Property  of  the  Borrower  or  any  of its
                Subsidiaries is subject to any  Environmental  Property Transfer
                Act,  or to the  extent  such  acts are  applicable  to any such
                Property,  the Borrower and/or such Subsidiary whose Property is
                subject  thereto has complied in all material  respects with the
                requirements of such acts.

                (q)     ERISA.  As of the date hereof,  neither the Borrower nor
any  ERISA   Affiliate   maintains  or   contributes  to  any  Benefit  Plan  or
Multiemployer  Plan other than those listed on SCHEDULE 7.1-Q hereto.  Each Plan
which is intended to be qualified  under Section 401(a) of the Internal  Revenue
Code as currently in effect has been  determined  by the IRS to be so qualified,
and each trust  related to any such Plan has been  determined  to be exempt from
federal  income  tax  under  Section  501(a)  of the  Internal  Revenue  Code as
currently in effect. Except as disclosed in SCHEDULE 7.1-Q, neither the Borrower
nor any of its  Subsidiaries  maintains or contributes  to any employee  welfare
benefit plan within the meaning of Section 3(1) of ERISA that provides  benefits
to employees after  termination of employment  other than as required by Section
601 of ERISA.  The Borrower and each of its Subsidiaries is in compliance in all
material respects with the  responsibilities,  obligations and duties imposed on
it by ERISA,  the Internal Revenue Code and regulations  promulgated  thereunder
with respect to all Plans. No Benefit Plan has incurred any accumulated  funding
deficiency  (as  defined  in  Sections  302(a)(2)  of  ERISA  and 412 (a) of the
Internal Revenue Code) whether or not waived. Neither the Borrower nor any ERISA
Affiliate  nor any fiduciary of any Plan which is not a  Multiemployer  Plan (i)
has engaged in a nonexempt prohibited  transaction  described in Sections 406 of
ERISA or 4975 of the  Internal  Revenue Code or (ii) has taken or failed to take
any action  which  would  constitute  or result in an ERISA  Termination  Event.
Neither the Borrower nor any ERISA  Affiliate is subject to any liability  under
Sections  4063,  4064,  or 4204 of ERISA  which  would have a  Material  Adverse
Effect. Neither the Borrower nor any ERISA Affiliate is subject to any liability
under  Sections  4069 or 4212 (c) of ERISA or has incurred any  liability to the
PBGC which remains outstanding other than the payment of premiums, and there are
no premium  payments  which have become due which are unpaid.  Schedule B to the
most recent  annual  report filed with the IRS with respect to each Benefit Plan
has been furnished to the  Administrative  Agent and is complete and accurate in
all material respects. Since the date of each such Schedule B, there has been no
material  adverse  change in the funding  status or  financial  condition of the
Benefit  Plan  relating to such  Schedule B.  Neither the Borrower nor any ERISA
Affiliate  has (i)  failed  to make a  required  contribution  or  payment  to a
Multiemployer  Plan or (ii) made a complete or partial withdrawal under Sections
4203 or 4205 of ERISA  from a  Multiemployer  Plan  which  would have a Material
Adverse Effect. Neither the Borrower, nor any ERISA Affiliate has failed to make
a required  installment or any other  required  payment under Section 412 of the
Internal  Revenue Code on or before the due date for such  installment  or other
payment.  Neither the  Borrower  nor any ERISA  Affiliate is required to provide
security to a Benefit Plan under Section 401(a)(29) of the Internal Revenue Code
due to a Benefit Plan amendment that results in an increase in current liability
for the plan year. Except as disclosed on SCHEDULE 7.1-Q, which shall be updated
by Borrower as of the first day of each fiscal quarter,  to the extent required,
neither  the  Borrower  nor  any of  its  Subsidiaries  has,  by  reason  of the
transactions  contemplated  hereby,  any  obligation  to make any payment to any
employee pursuant to any Plan or existing contract or arrangement.

                                      -62-
<PAGE>


                (r)     SECURITIES  ACTIVITIES.  The  Borrower is not engaged in
the  business  of  extending  credit for the purpose of  purchasing  or carrying
Margin Stock except as described on SCHEDULE 7.L-R.

                (s)     SOLVENCY. After giving effect to the Loans to be made on
the Initial  Funding Date or such other date as Loans  requested  hereunder  are
made,  and the  disbursement  of the  proceeds  of such  Loans  pursuant  to the
Borrower's instructions, each of the Borrower and each Guarantor is Solvent.

                (t)     INSURANCE.  SCHEDULE 7.1-T  accurately  sets forth as of
the Closing Date all  insurance  policies and programs  currently in effect with
respect to the  respective  Property and assets and business of the Borrower and
its  Subsidiaries,  specifying for each such policy and program,  (i) the amount
thereof,  (ii) the risks insured against thereby,  (iii) the name of the insurer
and each  insured  party  thereunder,  (iv) the  policy or other  identification
number thereof,  and (v) the expiration date thereof. The Borrower has delivered
to the  Administrative  Agent  certificates  of insurance or other  satisfactory
evidence of all insurance  policies set forth on SCHEDULE 7.1-T.  Such insurance
policies and programs or their replacements  obtained in compliance with Section
9.5 are currently in full force and effect,  in compliance with the requirements
of  Section  9.5  hereof  and  provide  coverage  against  such  casualties  and
contingencies  as  are  commercially  reasonable  and  in  accordance  with  the
customary and general practices of businesses having similar operations and real
estate  portfolios in similar  geographic  areas and are in amounts,  containing
such terms, in such forms and for such periods as are reasonable and prudent for
such businesses. Borrower shall update SCHEDULE 7.1-T, which shall be updated by
Borrower annually,  to the extent required,  in order to keep said Schedule true
and correct  (or more  frequently  if an  insurance  policy or program  shall be
terminated and/or replaced).

                (u)     REIT STATUS.  The Company  qualifies as a REIT under the
Internal Revenue Code.

                (v)     OWNERSHIP OF  PROJECTS,  JOINT  VENTURES  AND  PROPERTY.
Ownership of all wholly owned Projects, Joint Ventures and other Property of the
Consolidated  Businesses is held by the Borrower and its Subsidiaries and is not
held directly by the Company.

                (w)     TITLE TO  PROPERTIES.  The Borrower,  the Guarantors and
their respective  Subsidiaries that own Real Property each has good title to all
of its respective Real Property purported to be owned by it, including,  without
limitation, that:

                (a)     Either (i) the Borrower or (ii) a Guarantor is the owner
of or the holder of a fee or ground leasehold interest (under an Eligible Ground
Lease) in the Unencumbered  Projects and Unencumbered New York City Assets which
are   wholly-owned  or  ground-leased  by  the  Borrower  and  the  Consolidated
Businesses,  free  from any Lien,  except  for  Customary  Permitted  Liens,  or
preferred equity interest.

                (b)     The  Company,   the  Borrower  and  their   Consolidated
Subsidiaries will, as of the Closing Date, own all of the assets as reflected in
the financial  statements  of the Borrower and the Company  described in Section
7.1(g) or acquired since the date of such financial  statements (except property
and assets  sold or  otherwise  disposed of in the  ordinary  course of business
since that date).

                                      -63-
<PAGE>


                                 ARTICLE VIII.
                               REPORTING COVENANTS

        The Borrower  covenants and agrees that so long as any Revolving  Credit
Commitments are  outstanding and thereafter  until payment in full of all of the
Obligations  (other  than  indemnities  pursuant  to Section  14.3 not yet due),
unless the Requisite Lenders shall otherwise give prior written consent thereto:

        8.1.    BORROWER ACCOUNTING PRACTICES.  The Borrower shall maintain, and
cause each of its consolidated  Subsidiaries to maintain, a system of accounting
established  and  administered  in accordance  with sound business  practices to
permit preparation of consolidated financial statements in conformity with GAAP.

        8.2.    FINANCIAL  REPORTS.  The Borrower  shall  deliver or cause to be
delivered to the Administrative Agent (with copies for each of the Lenders):

                (a)     QUARTERLY REPORTS.

                (i)     BORROWER  QUARTERLY   FINANCIAL  REPORTS.   As  soon  as
        practicable,  and in any event within forty-five (45) days after the end
        of each  fiscal  quarter in each Fiscal Year (other than the last fiscal
        quarter  in each  Fiscal  Year),  a  consolidated  balance  sheet of the
        Borrower and the related consolidated statements of income and cash flow
        of the Borrower (to be prepared and delivered  quarterly in  conjunction
        with the other  reports  delivered  hereunder  at the end of each fiscal
        quarter) for each such fiscal  quarter,  and, in  comparative  form, the
        corresponding  figures  for the  corresponding  dates and periods of the
        previous Fiscal Year,  certified by an Authorized  Financial  Officer of
        the  Borrower  as  fairly   presenting  in  all  material  respects  the
        consolidated  financial  position  of  the  Borrower  as  of  the  dates
        indicated and the  consolidated  results of its operations and cash flow
        for the months  indicated  in  accordance  with GAAP,  subject to normal
        adjustments.

                (ii)    COMPANY  QUARTERLY   FINANCIAL   REPORTS.   As  soon  as
        practicable,  and in any event within forty-five (45) days after the end
        of each  fiscal  quarter in each Fiscal Year (other than the last fiscal
        quarter in each Fiscal Year),  the  Financial  Statements of the Company
        and its  consolidated  Subsidiaries  on Form  10-Q as at the end of such
        period and a report setting forth in comparative form the  corresponding
        figures for the  corresponding  dates and period of the previous  Fiscal
        Year,  certified by an  Authorized  Financial  Officer of the Company as
        fairly  presenting in all material  respects the consolidated  financial
        position of the Company and its consolidated Subsidiaries as at the date
        indicated and the consolidated results of their operations and cash flow
        for the period  indicated  in  accordance  with GAAP,  subject to normal
        adjustments.

                (iii)   QUARTERLY  COMPLIANCE  CERTIFICATES.  Together with each
        delivery of any quarterly  report  pursuant to paragraph  (a)(i) of this
        Section 8.2,  Officer's  Certificates of the Borrower and the Company in
        the form of EXHIBIT F hereto (the "QUARTERLY COMPLIANCE  CERTIFICATES"),
        signed  by  the  Borrower's  and  the  Company's  respective  Authorized
        Financial  Officers  representing and certifying (1) that the Authorized
        Financial  Officer  signatory thereto has reviewed the terms of the Loan
        Documents, and has made, or caused to be made under his/her supervision,
        a review in reasonable detail of the consolidated financial condition of
        the Company and its  Consolidated  Subsidiaries,  for the fiscal quarter
        covered  by  such  reports,  that  such  review  has not  disclosed  the

                                      -64-
<PAGE>


        existence  during or at the end of such  fiscal  quarter,  and that such
        officer does not have  knowledge of the existence as at the date of such
        Officer's  Certificate,  of an Event of  Default or  Potential  Event of
        Default or  mandatory  prepayment  event,  or, if any such  condition or
        event existed or exists,  the nature and period of existence thereof and
        what action the Company and/or the Borrower or any of their Subsidiaries
        has taken, is taking and proposes to take with respect thereto;  (2) the
        calculations  in the form of EXHIBIT G hereto for the period  then ended
        which  demonstrate  whether there has been compliance with the covenants
        and financial  ratios set forth in Sections 9.9, 9.11, 10.2, 10.6, 10.7,
        10.11, and 10.12 hereof and, when  applicable,  that no Event of Default
        described  in Section  11.1  exists,  (3) a schedule  of the  Borrower's
        outstanding Indebtedness,  including the amount, maturity, interest rate
        and  amortization  requirements,  as  well  as  such  other  information
        regarding  such  Indebtedness  as may  be  reasonably  requested  by the
        Administrative Agent, (4) a schedule of Total Adjusted EBITDA, and (5) a
        schedule of Adjusted Unencumbered NOI.

                (b)     ANNUAL REPORTS.

                (i)     BORROWER FINANCIAL  STATEMENTS.  As soon as practicable,
        and in any event  within  ninety  (90) days after the end of each Fiscal
        Year, the Financial  Statements of the Borrower and its  Subsidiaries as
        at the end of such Fiscal Year,  accompanied by an Officer's Certificate
        of the Borrower,  signed by the Chief Financial Officer of the Borrower,
        that such Financial  Statements  fairly present in all material respects
        the consolidated financial position of the Borrower and its Subsidiaries
        as of the dates  indicated and the results of their  operations and cash
        flow for the periods  indicated  in  conformity  with GAAP  consistently
        applied,   and   which   Officer's   Certificate   shall   explain   any
        inconsistencies between the Financial Statements of the Borrower and the
        Financial Statements of the Company.

                (ii)    COMPANY  FINANCIAL  STATEMENTS.  As soon as practicable,
        and in any event  within  ninety  (90) days after the end of each Fiscal
        Year, (i) the Financial  Statements of the Company and its  consolidated
        Subsidiaries on Form 10-K as at the end of such Fiscal Year and a report
        setting forth in  comparative  form the  corresponding  figures from the
        consolidated Financial Statements of the Company and its Subsidiaries as
        of the end of and for the prior Fiscal Year;  (ii) a report with respect
        thereto  of Ernst & Young  LLP or  other  independent  certified  public
        accountants  acceptable to the Administrative Agent (it being understood
        that any "Big Four" certified  public  accountants are acceptable to the
        Administrative Agent), which report shall be unqualified and shall state
        that such financial statements fairly present the consolidated financial
        position  of the  Company and its  consolidated  Subsidiaries  as at the
        dates  indicated and the results of their  operations  and cash flow for
        the periods  indicated in conformity  with GAAP (except for changes with
        which Ernst & Young LLP or any such other  independent  certified public
        accountants,  if  applicable,  shall  concur  and which  shall have been
        disclosed in the notes to the financial  statements) (which report shall
        be subject to the  confidentiality  limitations  set forth herein);  and
        (iii) in the event that the report  referred  to in clause (ii) above is
        qualified,  a copy  of the  management  letter  or  any  similar  report
        delivered  to the Company or to any officer or employee  thereof by such
        independent   certified  public  accountants  in  connection  with  such
        financial statements.  The Administrative Agent and each Lender (through
        the  Administrative  Agent) may, with the consent of the Company  (which
        consent shall not be unreasonably  withheld),  communicate directly with
        such accountants,  with any such  communication to occur together with a
        representative of the

                                      -65-
<PAGE>


        Company,  at the  expense  of the  Administrative  Agent (or the  Lender
        requesting such communication), upon reasonable notice and at reasonable
        times during normal business hours.

                (iii)   ANNUAL  COMPLIANCE  CERTIFICATES.   Together  with  each
        delivery of any annual  report  pursuant to clauses (i) and (ii) of this
        Section 8.2(b),  Officer's  Certificates of the Borrower and the Company
        in the form of EXHIBIT F hereto (the  "ANNUAL  COMPLIANCE  CERTIFICATES"
        and,  collectively  with  the  Quarterly  Compliance  Certificates,  the
        "COMPLIANCE  CERTIFICATES"),  signed by the Borrower's and the Company's
        respective  Authorized  Financial Officers,  representing and certifying
        (1) that the officer  signatory  thereto has  reviewed  the terms of the
        Loan  Documents,  and has  made,  or  caused  to be made  under  his/her
        supervision, a review in reasonable detail of the consolidated financial
        condition  of the Company  and its  consolidated  Subsidiaries,  for the
        accounting  period  covered by such  reports,  that such  review has not
        disclosed the existence at the end of such accounting  period,  and that
        such officer does not have  knowledge of the existence as at the date of
        such Officer's Certificate, of an Event of Default or Potential Event of
        Default or  mandatory  prepayment  event,  or, if any such  condition or
        event existed or exists,  the nature and period of existence thereof and
        what action the Company and/or the Borrower or any of their Subsidiaries
        has taken, is taking and proposes to take with respect thereto;  (2) the
        calculations  in the form of EXHIBIT G hereto for the period  then ended
        which  demonstrate  whether there has been compliance with the covenants
        and financial  ratios set forth in Sections 9.9, 9.11, 10.2, 10.6, 10.7,
        10.11, and 10.12 hereof and, when  applicable,  that no Event of Default
        described  in Section  11.1  exists,  (3) a schedule  of the  Borrower's
        outstanding Indebtedness including the amount,  maturity,  interest rate
        and  amortization  requirements,  as  well  as  such  other  information
        regarding  such  Indebtedness  as may  be  reasonably  requested  by the
        Administrative  Agent, (4) a schedule of Total Adjusted EBITDA and (5) a
        schedule of Adjusted Unencumbered NOI.

                (iv)    TENANT BANKRUPTCY REPORTS.  As soon as practicable,  and
        in any event within  ninety (90) days after the end of each Fiscal Year,
        a written report, in form reasonably  satisfactory to the Administrative
        Agent, of all bankruptcy  proceedings  filed by or against any tenant of
        any of the Projects,  which tenant  occupies  three and one half percent
        (3.5%)  or more  of the  gross  leasable  area  in the  Projects  in the
        aggregate.  The Borrower shall deliver to the  Administrative  Agent and
        the Lenders,  immediately upon the Borrower's  learning thereof,  of any
        bankruptcy proceedings filed by or against, or the cessation of business
        or  operations  of,  any  tenant  of any of the  Projects  which  tenant
        occupies three and one half percent (3.5%) or more of the gross leasable
        area in the Projects in the aggregate.

                (v)     UPDATE OF SCHEDULE 7.1-C. As soon as practicable, and in
        any event within ninety (90) days after the end of each Fiscal Year, the
        Borrower shall deliver an update of Schedule 7.1-C.

        8.3.    EVENTS  OF  DEFAULT.   Promptly  upon  the  Borrower   obtaining
knowledge (a) of any condition or event which constitutes an Event of Default or
Potential  Event of  Default;  (b) that any  Person  has given any notice to the
Borrower  or any  Subsidiary  of the  Borrower  or taken any other  action  with
respect to a claimed  default or event or condition  of the type  referred to in
Section  11.1(e);  or (c) of any condition or event which has a Material Adverse
Effect, the Borrower shall deliver to the Administrative  Agent (with copies for
each of the  Lenders) an  Officer's  Certificate  specifying  (i) the nature and
period of existence of any such claimed default,

                                      -66-
<PAGE>


Event of Default,  Potential  Event of  Default,  condition  or event,  (ii) the
notice given or action taken by such Person in connection  therewith,  and (iii)
what action the Borrower has taken,  is taking and proposes to take with respect
thereto.

        8.4.    LAWSUITS.  (i) Promptly upon the Borrower's  obtaining knowledge
of the  institution  of, or written  threat of, any  action,  suit,  proceeding,
governmental  investigation or arbitration  against or affecting the Borrower or
any of its  Subsidiaries  not previously  disclosed  pursuant to Section 7.1(i),
which  action,  suit,  proceeding,  governmental  investigation  or  arbitration
exposes, or in the case of multiple actions,  suits,  proceedings,  governmental
investigations  or arbitrations  arising out of the same general  allegations or
circumstances which expose, in the Borrower's reasonable judgment,  the Borrower
or any of its Subsidiaries to liability in an amount  aggregating  $1,000,000 or
more and is not covered by the Borrower's or such  Subsidiary's  insurance,  the
Borrower  shall give written notice  thereof to the  Administrative  Agent (with
copies for each of the  Lenders) and provide  such other  information  as may be
reasonably  available to enable each Lender and the Administrative Agent and its
counsel to evaluate such matters;  (ii) as soon as practicable  and in any event
within  forty-five  (45)  days  after  the end of  each  fiscal  quarter  of the
Borrower,  the  Borrower  shall  provide  a  written  quarterly  report  to  the
Administrative  Agent and the Lenders  covering the  institution  of, or written
threat  of,  any  action,  suit,  proceeding,   governmental   investigation  or
arbitration in an amount equal to or in excess of $50,000,000 (to the extent not
previously   reported)   against  or  affecting  the  Borrower  or  any  of  its
Subsidiaries  or any  Property of the  Borrower or any of its  Subsidiaries  not
previously  disclosed  by the  Borrower  to the  Administrative  Agent  and  the
Lenders,  and  shall  provide  such  other  information  at such  time as may be
reasonably  available to enable each Lender and the Administrative Agent and its
counsel to evaluate such matters;  and (iii) in addition to the requirements set
forth in clauses (i) and (ii) of this Section 8.4, the Borrower  upon request of
the  Administrative  Agent or the Requisite  Lenders shall promptly give written
notice of the status of any action, suit, proceeding, governmental investigation
or  arbitration  covered by a report  delivered  pursuant  to clause (i) or (ii)
above and provide such other  information  as may be  reasonably  requested  and
available  to it to enable  each  Lender  and the  Administrative  Agent and its
counsel to evaluate such matters.  Notwithstanding  the foregoing,  the Borrower
shall not be  required  to  disclose  any  information  which is  subject to the
attorney-client privilege.

        8.5.    INSURANCE.  As soon as  practicable  and in any event by January
31st of each calendar  year,  the Borrower  shall deliver to the  Administrative
Agent (with copies for each of the  Lenders) (i) a report in form and  substance
reasonably  satisfactory to the  Administrative  Agent,  outlining all insurance
coverage  maintained  as of the  date of such  report  by the  Borrower  and its
Subsidiaries and the duration of such coverage and (ii) an Officer's Certificate
signed by an Authorized  Financial  Officer of the Borrower  certifying that all
premiums with respect to such coverage have been paid when due.

        8.6.    ERISA  NOTICES.  The  Borrower  shall  deliver  or  cause  to be
delivered to the Administrative Agent (with copies for each of the Lenders),  at
the  Borrower's  expense,  the  following  information  and  notices  as soon as
reasonably possible, and in any event:

                (a)     within  fifteen (15) Business Days after the Borrower or
any ERISA Affiliate knows or has reason to know that an ERISA  Termination Event
has  occurred,  a written  statement of an Authorized  Financial  Officer of the
Borrower  describing such ERISA  Termination Event and the action, if any, which
the  Borrower or any ERISA  Affiliate  has taken,  is taking or proposes to take
with respect thereto, and when known, any action taken or threatened by the IRS,
DOL or PBGC with respect thereto;

                                      -67-
<PAGE>


                (b)     within  fifteen  (15)  Business  Days after the Borrower
knows or has reason to know that a non-exempt prohibited transaction (as defined
in Sections  406 of ERISA and Section  4975 of the  Internal  Revenue  Code) has
occurred  with  respect to the  Borrower,  any ERISA  Affiliate  or any Plan,  a
statement of an Authorized  Financial  Officer of the Borrower  describing  such
transaction  with respect to the Borrower,  any ERISA  Affiliate or any Plan and
the action which the  Borrower or any ERISA  Affiliate  has taken,  is taking or
proposes to take with respect thereto;

                (c)     within  fifteen (15)  Business  Days after the filing of
the same with the DOL,  IRS or PBGC,  copies of each  annual  report  (Form 5500
series), including Schedule B thereto, filed with respect to each Benefit Plan;

                (d)     within  fifteen (15)  Business Days after receipt by the
Borrower or any ERISA Affiliate of each actuarial report for any Benefit Plan or
Multiemployer Plan and each annual report for any Multiemployer  Plan, copies of
each such report;

                (e)     within  fifteen (15)  Business  Days after the filing of
the same with the IRS, a copy of each funding  waiver request filed with respect
to any Benefit Plan and all written  communications  received by the Borrower or
any ERISA Affiliate with respect to such request;

                (f)     within  fifteen (15) Business Days after the  occurrence
of any  material  increase  in the  benefits  of any  existing  Benefit  Plan or
Multiemployer  Plan  or  the  establishment  of  any  new  Benefit  Plan  or the
commencement of contributions to any Benefit Plan or Multiemployer Plan to which
the Borrower or any ERISA Affiliate to which the Borrower or any ERISA Affiliate
was not previously contributing, notification of such increase, establishment or
commencement;

                (g)     within  fifteen (15) Business Days after the Borrower or
any ERISA  Affiliate  receives  notice of the PBGC's  intention  to  terminate a
Benefit Plan or to have a trustee appointed to administer a Benefit Plan, copies
of each such notice;

                (h)     within  fifteen (15) Business Days after the Borrower or
any of its Subsidiaries receives notice of any unfavorable  determination letter
from the IRS regarding the  qualification  of a Plan under Section 401(a) of the
Internal  Revenue  Code,  copies of each such  letter to the  extent  any of the
foregoing would have a Material Adverse Effect;

                (i)     within  fifteen (15) Business Days after the Borrower or
any ERISA  Affiliate  receives  notice from a  Multiemployer  Plan regarding the
imposition of withdrawal liability, copies of each such notice;

                (j)     within  fifteen (15) Business Days after the Borrower or
any ERISA Affiliate  fails to make a required  installment or any other required
payment under Section 412 of the Internal Revenue Code on or before the due date
for such installment or payment which failure has not been cured, a notification
of such failure; and

                (k)     within  fifteen (15) Business Days after the Borrower or
any ERISA  Affiliate  knows or has reason to know (i) a  Multiemployer  Plan has
been terminated,  (ii) the administrator or plan sponsor of a Multiemployer Plan
intends to terminate a  Multiemployer  Plan, or (iii) the PBGC has instituted or
has given written notice that it will institute proceedings under

                                      -68-
<PAGE>


Section 4042 of ERISA to terminate a  Multiemployer  Plan,  notification of such
termination, intention to terminate, or institution of proceedings.

        For purposes of this  Section 8.6, the Borrower and any ERISA  Affiliate
shall be deemed to know all facts  known by the  "Administrator"  of any Plan of
which the Borrower or any ERISA Affiliate is the plan sponsor.

        8.7.    ENVIRONMENTAL   NOTICES.   The   Borrower   shall   notify   the
Administrative Agent (with copies for each of the Lenders) in writing,  promptly
upon any officer of the Borrower  responsible for the  environmental  matters at
any Property of the Borrower learning thereof, of any of the following (together
with any material  documents and  correspondence  received or sent in connection
therewith):

                (a)     notice or claim to the effect  that the  Borrower or any
of its Subsidiaries is or may be liable to any Person as a result of the Release
or threatened Release of any Contaminant into the environment, if such liability
would result in a Material Adverse Effect;

                (b)     notice that the Borrower or any of its  Subsidiaries  is
subject to investigation by any Governmental  Authority  evaluating  whether any
Remedial Action is needed to respond to the Release or threatened Release of any
Contaminant into the environment which would have a Material Adverse Effect;

                (c)     notice that any  Property of the  Borrower or any of its
Subsidiaries  is  subject  to an  Environmental  Lien if the claim to which such
Environmental Lien relates would result in a Material Adverse Effect;

                (d)     notice  of  violation  by  the  Borrower  or  any of its
Subsidiaries  of any  Environmental,  Health or Safety  Requirement of Law which
violation would have a Material Adverse Effect;

                (e)     commencement  or  written  threat  of  any  judicial  or
administrative  proceeding  alleging a violation  by the  Borrower or any of its
Subsidiaries of any  Environmental,  Health or Safety  Requirement of Law, which
would result in a Material Adverse Effect; or

                (f)     any proposed  acquisition of stock, assets, real estate,
or leasing of Property by the  Borrower  or any of its  Subsidiaries  that would
subject the  Borrower or any of its  Subsidiaries  to  environmental,  health or
safety Liabilities and Costs which would result in a Material Adverse Effect.

        8.8.    LABOR  MATTERS.  The Borrower  shall  notify the  Administrative
Agent  (with  copies for each of the  Lenders)  in  writing,  promptly  upon the
Borrower's  learning thereof,  of any labor dispute to which the Borrower or any
of its Subsidiaries is reasonably expected to become a party (including, without
limitation,  any strikes, lockouts or other disputes relating to any Property of
such  Persons and other  facilities)  which would  result in a Material  Adverse
Effect.

        8.9.    NOTICES OF ASSET SALES AND/OR  ACQUISITIONS.  The Borrower shall
deliver to the  Administrative  Agent and the Lenders  written notice of each of
the following  events  affecting the Company,  the Borrower or their  respective
Subsidiaries  not less  than  five (5)  Business  Days  prior to the  occurrence
thereof:  (a) a sale,  transfer  or  other  disposition  of (i) an  Unencumbered
Project or  Unencumbered  New York City Asset or (ii) other assets,  in a single
transaction or series of

                                      -69-
<PAGE>


related  transactions  within the two preceding  calendar quarter  periods,  for
consideration  in excess of  $50,000,000,  (b) an  acquisition  of assets,  in a
single  transaction or series of related  transactions  within the two preceding
calendar quarter period,  for  consideration  in excess of $50,000,000,  (c) the
grant of a Lien with respect to (i) an Unencumbered  Project or Unencumbered New
York City  Asset or (ii)  other  assets,  in a single  transaction  or series of
related  transactions  within the two preceding  calendar quarter  periods,  for
consideration  in excess of $50,000,000 and (d) a release from an escrow account
of the proceeds of a qualified,  deferred exchange under ss.1031 of the Internal
Revenue Code. In addition,  simultaneously with delivery of any such notice, the
Borrower  shall  deliver  to  the  Administrative  Agent  a  certificate  of  an
Authorized Officer certifying that Borrower is in compliance with this Agreement
and the  other  Loan  Documents  both on a  historical  basis and on a pro forma
basis,  exclusive  of the  property  sold,  transferred  and/or  encumbered  and
inclusive of the property to be acquired or the indebtedness to be incurred.

To the extent such proposed transaction would result in a failure to comply with
the  covenants set forth  herein,  the Borrower  shall (i) apply the proceeds of
such transaction (together with such additional amounts as may be required),  to
prepay the Obligations in an amount, as determined by the Administrative  Agent,
equal to that which would be required to reduce the Obligations so that Borrower
will be in compliance with the covenants set forth herein upon the  consummation
of the  contemplated  transaction,  to the extent such  proceeds are not applied
pursuant to clauses (ii) or (iii); (ii) to the extent applicable,  segregate the
net proceeds of such  transaction in an escrow  account with the  Administrative
Agent  or  with  a   financial   institution   reasonably   acceptable   to  the
Administrative Agent and apply such net proceeds solely to a qualified, deferred
exchange  under ss.1031 of the Internal  Revenue Code that results in compliance
with the covenants set forth herein upon the  consummation  of the  contemplated
transaction,  or with the prior  written  approval of the  Requisite  Lenders to
another use, to the extent such proceeds are not applied pursuant to clauses (i)
or (iii); or (iii) to the extent applicable, complete an exchange of such assets
for other real  property  of  equivalent  value  under  ss.1031 of the  Internal
Revenue Code that results in compliance with the covenants set forth herein upon
the  consummation of the contemplated  transaction,  to the extent such proceeds
are not applied pursuant to clauses (i) or (ii).

        8.10.   NOTICES OF JOINT  VENTURES.  The Borrower  shall  deliver to the
Administrative Agent and the Lenders written notice of each of the following not
less  than two (2)  Business  Days  prior  to the  occurrence  thereof:  (a) the
acquisition of an interest in a Joint Venture in excess of  $5,000,000,  (b) the
investment  of an amount in excess of $5,000,000 in a Joint Venture of which the
Administrative  Agent and the Lenders have not previously  received notice,  and
(c) the sale of an interest in a Subsidiary  that results in the same becoming a
Joint Venture.  Simultaneously with the delivery of the Compliance Certificates,
the Borrower shall deliver to the  Administrative  Agent and the Lenders written
notice of the formation of any other Joint Venture.

        8.11.   TENANT  NOTIFICATIONS.  The Borrower shall  promptly  notify the
Administrative  Agent upon obtaining knowledge of the bankruptcy or cessation of
operations of any tenant to which greater than three and one half percent (3.5%)
of the Borrower's  share of annual base rent (as reported in the Borrower's most
recent quarterly financial statements) is attributable to such tenant.

        8.12.   OTHER  REPORTS.  The  Borrower  shall  deliver  or  cause  to be
delivered  to the  Administrative  Agent (with  copies for each of the  Lenders)
copies of all financial  statements and reports,  if any, sent or made available
generally  by the  Company  and/or the  Borrower  to its  respective  Securities
holders,  including,  without  limitation,  supplemental quarterly forms, or (to

                                      -70-
<PAGE>


the extent not otherwise provided hereunder),  all press releases made available
generally by the Company and/or the Borrower or any of its  Subsidiaries  to the
public concerning material adverse  developments in the business of the Company,
the Borrower or any such Subsidiary and all material  notifications  received by
the  Company,  the  Borrower or their  Subsidiaries  pursuant to the  Securities
Exchange Act and the rules promulgated thereunder.

        8.13.   OTHER  INFORMATION.  Promptly upon receiving a request  therefor
from the  Administrative  Agent or any Arranger,  the Borrower shall prepare and
deliver to the  Administrative  Agent (with copies for each of the Lenders) such
other  information  with respect to the Company,  the Borrower,  or any of their
Subsidiaries,  as  from  time  to  time  may  be  reasonably  requested  by  the
Administrative Agent or any Arranger,  including without limitation, rent rolls,
title reports, environmental site assessments, and tax returns.

                                  ARTICLE IX.
                              AFFIRMATIVE COVENANTS

        Borrower  covenants  and  agrees  that so long as any  Revolving  Credit
Commitments are  outstanding and thereafter  until payment in full of all of the
Obligations  (other  than  indemnities  pursuant  to Section  14.3 not yet due),
unless the Requisite Lenders shall otherwise give prior written consent:

        9.1.    EXISTENCE.  ETC. The Borrower shall, and shall cause each of its
Subsidiaries  and the Company to, at all times maintain its corporate  existence
or  existence  as a limited  partnership,  limited  liability  company  or joint
venture,  as  applicable,  and preserve and keep,  or cause to be preserved  and
kept,  in full  force and  effect its  rights  and  franchises  material  to its
businesses,  except where the loss or  termination of such rights and franchises
will not have a Material Adverse Effect.

        9.2.    POWERS;   CONDUCT  OF  BUSINESS.   The  Borrower   shall  remain
qualified,  and shall cause each of its  Subsidiaries and the Company to qualify
and remain  qualified,  to do business and  maintain  its good  standing in each
jurisdiction  in which  the  nature of its  business  and the  ownership  of its
Property  requires it to be so qualified  and in good standing if the failure to
do so will have a Material Adverse Effect.

        9.3.    COMPLIANCE WITH LAWS.  ETC. The Borrower shall,  and shall cause
each of its Subsidiaries and the Company to, (a) comply with all Requirements of
Law and  all  restrictive  covenants  affecting  such  Person  or the  business,
Property or operations of such Person, and (b) obtain and maintain as needed all
Permits  necessary  for  its  operations  (including,  without  limitation,  the
operation of the Projects) and maintain  such Permits in good  standing,  except
where noncompliance with either clause (a) or (b) above will not have a Material
Adverse Effect.

        9.4.    PAYMENT OF TAXES AND CLAIMS.  (a) The  Borrower  shall pay,  and
cause each of its  Subsidiaries  and the Company to pay, (i) all material taxes,
assessments  and other  governmental  charges  imposed  upon it or on any of its
Property or assets or in respect of any of its franchises,  licenses,  receipts,
sales, use, payroll, employment, business, income or Property before any penalty
or interest accrues thereon,  and (ii) all material Claims  (including,  without
limitation,  claims for labor, services,  materials and supplies) for sums which
have  become due and  payable  and which by law have or may become a Lien (other
than a Lien permitted by Section 10.2 or a Customary Permitted Lien for property
taxes and assessments  not yet due upon any of the Borrower's,  the Company's or
any of the Borrower's Subsidiaries' Property, prior to the

                                      -71-
<PAGE>


time when any penalty or fine shall be incurred with respect thereto;  PROVIDED,
HOWEVER, that no such taxes, assessments, fees and governmental charges referred
to in clause (i) above or Claims  referred  to in clause (ii) above need be paid
if  being  contested  in  good  faith  by  appropriate   proceedings  diligently
instituted and conducted and if such reserve or other appropriate provision,  if
any, as shall be required in conformity with GAAP shall have been made therefor.

        9.5.    INSURANCE.  The  Borrower  shall  maintain  for  itself  and its
Subsidiaries,  or shall cause each of its Subsidiaries to maintain in full force
and effect the  insurance  policies  and  programs  listed on SCHEDULE  7.1-T or
substantially  similar  policies and programs or other  policies and programs as
are reasonably  acceptable to the  Administrative  Agent.  All such policies and
programs  shall be maintained  with  insurers  having an Alfred M. Best Company,
Inc.  rating of "A" or better (or if approved  by the  Administrative  Agent,  a
rating of "A-") and a financial size category of not less than VIII.

        9.6.    INSPECTION  OF  PROPERTY,  BOOKS AND  RECORDS  DISCUSSIONS.  The
Borrower  shall permit,  and cause each of its  Subsidiaries  and the Company to
permit, any authorized  representative(s) designated by the Administrative Agent
or any  Arranger or Lender  (coordinated  through the  Administrative  Agent) to
visit and  inspect  any of the  Projects,  to  examine,  audit,  and check their
respective financial and accounting records,  books, journals,  orders, receipts
and any correspondence and other data relating to their respective businesses or
the  transactions   contemplated  hereby  (including,   without  limitation,  in
connection with environmental compliance,  hazard or liability),  and to discuss
their  affairs,  finances  and  accounts  with their  officers  and  independent
certified  public  accountants,  upon  reasonable  notice and at such reasonable
times during normal  business  hours,  as often as may be reasonably  requested.
Each such  visitation and inspection  shall be at such  visitor's  expense.  The
Borrower  shall  keep and  maintain,  and  cause  its  Subsidiaries  to keep and
maintain,  in all material  respects proper books of record and account in which
entries are made in conformity with GAAP.

        9.7.    ERISA  COMPLIANCE.  The Borrower shall,  and shall cause each of
its Subsidiaries and ERISA  Affiliates to,  establish,  maintain and operate all
Benefit Plans to comply in all material  respects with the  provisions of ERISA,
the Internal  Revenue Code, all other  applicable  laws, and the regulations and
interpretations  thereunder  and the  respective  requirements  of the governing
documents for such Plans.

        9.8.    MAINTENANCE  OF PROPERTY.  The Borrower  shall,  and shall cause
each of its  Subsidiaries  to,  maintain in all  material  respects all of their
respective  owned and leased Property in good, safe and insurable  condition and
repair (ordinary wear and tear excepted),  and not permit,  commit or suffer any
waste or  abandonment  of any such  Property and from time to time shall make or
cause  to be made all  material  repairs,  renewals  and  replacements  thereof,
including, without limitation, any capital improvements which may be required to
maintain  the same;  PROVIDED,  HOWEVER,  that such  Property  may be altered or
renovated in the ordinary  course of business of the Borrower or such applicable
Subsidiary. Without any limitation on the foregoing, the Borrower shall maintain
each Project that is an office or industrial  Project as an office or industrial
Project.

        9.9.    COMPANY STATUS. The Borrower shall cause the Company to, and the
Company shall,  at all times (1) remain a publicly  traded company listed on the
New York Stock  Exchange;  (2)  maintain its status as a REIT under the Internal
Revenue Code,  and (3) retain direct or indirect  management  and control of the
Borrower.

                                      -72-
<PAGE>


        9.10.   OWNERSHIP  OF  PROJECTS,   JOINT  VENTURES  AND  PROPERTY.   The
ownership of substantially  all wholly owned Projects,  Joint Ventures and other
Property of the  Consolidated  Businesses  shall be held by the Borrower and its
Subsidiaries and shall not be held directly by the Company.

        9.11.   MAINTENANCE  OF OPERATING  ACCOUNTS.  The Borrower  shall at all
times during the Revolving  Credit Period maintain a demand deposit account held
by  Administrative  Agent (the "OPERATING  ACCOUNT") and shall cause funds to be
deposited therein in an amount sufficient to permit the Administrative  Agent to
automatically   deduct  therefrom  the  respective   interest  payments  on  the
obligations at 12:00 p.m. on the first Business Day of each month.

        9.12.   ADDITIONAL GUARANTORS; SOLVENCY OF GUARANTORS.

                (a)     If, after the Closing Date, a Subsidiary of the Borrower
that is not a  Guarantor  acquires  any Real  Property  that then or  thereafter
qualifies under the definition of Unencumbered  Project or Unencumbered New York
City  Asset  or any  other  Unencumbered  asset  and such  Property  or asset is
directly  or  indirectly  wholly-owned  or ground  leased by the  Borrower,  the
Borrower  shall cause such Person (which Person must be or become a wholly-owned
Subsidiary   of  the  Borrower)  to  execute  and  deliver  a  Guaranty  to  the
Administrative  Agent and the  Lenders  in  substantially  the form of EXHIBIT L
hereto. Such Guaranty shall evidence consideration and equivalent value.

                (b)     The Borrower,  the Company, and each other Guarantor are
Solvent.  The  Borrower and the Company each  acknowledge  that,  subject to the
indefeasible  payment and performance in full of the Obligations,  the rights of
contribution  among each of them and the other Guarantors are in accordance with
applicable  laws and in accordance  with each such Person's  benefits  under the
Loans and this Agreement. The Borrower further acknowledges that, subject to the
indefeasible  payment and performance in full of the Obligations,  the rights of
subrogation  of the  Guarantors  as against the  Borrower and the Company are in
accordance with applicable laws.

                (c)     Other than during the  continuance of a Potential  Event
of Default or Event of Default,  at the request of the  Borrower  following  the
delivery of the certificate of an Authorized  Officer in accordance with Section
8.9  hereof,   the  Guaranty  of  any   Guarantor   shall  be  released  by  the
Administrative Agent if and when all of the Real Property owned or ground-leased
by such Guarantor shall cease (not thereby creating a Potential Event of Default
or Event of Default) to be an Unencumbered Project or Unencumbered New York City
Asset which is wholly-owned by a Consolidated  Business,  PROVIDED the foregoing
shall never permit the release of the Company.

        9.13.   FURTHER  ASSURANCES.  The  Borrower  will,  and will  cause each
Guarantor to, cooperate with, and to cause each of its Subsidiaries to cooperate
with,  the  Administrative  Agent  and the  Lenders  and  execute  such  further
instruments  and  documents  as the  Lenders or the  Administrative  Agent shall
reasonably   request  to  carry  out  to  their   reasonable   satisfaction  the
transactions contemplated by this Agreement and the other Loan Documents.

        9.14.   DISTRIBUTIONS IN THE ORDINARY COURSE.  In the ordinary course of
business the Borrower  causes all of its  Subsidiaries  to make net transfers of
cash and cash  equivalents  upstream to the Borrower and the Company,  and shall
continue to follow such ordinary course of

                                      -73-
<PAGE>


business. The Borrower shall not make net transfers of cash and cash equivalents
downstream  to its  Subsidiaries  except  in the  ordinary  course  of  business
consistent with past practice.

                                   ARTICLE X.
                               NEGATIVE COVENANTS

        Borrower  covenants  and agrees that it shall comply with the  following
covenants  so long as any  Revolving  Credit  Commitments  are  outstanding  and
thereafter  until  payment  in  full  of  all  of the  Obligations  (other  than
indemnities  pursuant to Section 14.3 not yet due), unless the Requisite Lenders
shall otherwise give prior written consent:

        10.1.   INTENTIONALLY OMITTED.

        10.2.   LIENS.  Neither the Borrower nor any of its  Subsidiaries  shall
directly or indirectly create,  incur,  assume or permit to exist any Lien on or
with respect to any Property, except:

                (a)     Liens  with  respect  to  Capital  Leases  of  Equipment
entered  into  in  the  ordinary  course  of  business  of the  Borrower  or its
Subsidiaries  pursuant to which the  aggregate  Indebtedness  under such Capital
Leases does not exceed $1,000,000 for any Project;

                (b)     Existing Permitted Liens;

                (c)     Liens securing permitted Secured Indebtedness;  provided
that the  incurrence of such Liens shall be subject to  compliance  with Section
4.1(d) and Section 8.9 hereof; and

                (d)     Customary Permitted Liens.

        10.3.   INTENTIONALLY OMITTED.

        10.4.   CONDUCT  OF  BUSINESS.  Neither  the  Borrower  nor  any  of its
Subsidiaries shall engage in any business, enterprise or activity other than (a)
the businesses of acquiring, developing,  re-developing,  financing, leasing and
managing  predominantly  office and  industrial  Projects and portfolios of like
Projects,  (b) any  business  or  activities  which are  substantially  similar,
related or incidental thereto, (c) investments in and loans to Investment Funds,
FrontLine  Capital  Group,  Subsidiaries,  Affiliates  and  Joint  Ventures  and
unaffiliated  entities  (to  the  extent  permitted  hereunder)  and  (d)  other
activities referred to in Section 2.3 hereof.

        10.5.   TRANSACTIONS WITH PARTNERS AND AFFILIATES.  Neither the Borrower
nor any of its Subsidiaries shall directly or indirectly enter into or permit to
exist any transaction (including,  without limitation, the purchase, sale, lease
or exchange of any property or the  rendering of any service) with any holder or
holders of more than five percent (5%) of any class of equity  Securities of the
Borrower,  or with any Affiliate of the Borrower  which is not its Subsidiary or
the Company,  unless such transaction is determined by the Board of Directors of
the Company to be no less favorable to the Borrower or any of its  Subsidiaries,
as applicable,  than those that might be obtained in an arm's length transaction
at the time from  Persons  who are not such a holder or  Affiliate  (other  than
transactions referred to in Section 2.3). Nothing contained in this Section 10.5
shall  prohibit  (a)  increases  in  compensation  and benefits for officers and
employees of the Company,  the Borrower or any of its Subsidiaries;  (b) payment
of officers', managers',

                                      -74-
<PAGE>


trustees',  directors', partners' and other similar indemnities; (c) performance
of any obligations arising under the Loan Documents;  or (d) loans to Persons in
connection with such Person's  contribution of Real Property to the Consolidated
Businesses or Joint Ventures.

        10.6.   RESTRICTION ON FUNDAMENTAL  CHANGES. The Borrower shall not, and
shall not permit any of the Guarantors to, enter into any merger,  consolidation
or amalgamation, or liquidate, wind-up or dissolve (or suffer any liquidation or
dissolution),  or convey,  lease, sell, transfer or otherwise dispose of, in one
transaction  or  series  of  transactions,  all  or  substantially  all  of  the
Borrower's or such  Guarantor's  business or Property,  whether now or hereafter
acquired, except in connection with issuance, transfer, conversion or repurchase
of limited partnership interests in the Borrower. Notwithstanding the foregoing,
(a) the  Borrower or a Guarantor  shall be permitted  to merge,  consolidate  or
amalgamate with another Person so long as the Borrower or such Guarantor, as the
case may be, is the surviving  Person  following such merger,  consolidation  or
amalgamation,  (b) a Guarantor  (other than the  Company)  shall be permitted to
merge, consolidate or amalgamate with or into the Borrower or another Guarantor,
and (c) so long as no  Potential  Event  of  Default  or Event  of  Default  has
occurred and is  continuing  and  following  the delivery by the Borrower to the
Administrative  Agent of a certificate of an Authorized  Officer certifying that
Borrower is in compliance  with this Agreement and the other Loan Documents on a
pro  forma  basis,  exclusive  of the  properties  owned  by a  Guarantor,  such
Guarantor  (other than the Company) shall be permitted to merge,  consolidate or
amalgamate with or into another Person.

        10.7.   MARGIN  REGULATIONS;  SECURITIES LAWS.  Neither the Borrower nor
any of its  Subsidiaries  shall use all or any  portion of the  proceeds  of any
credit extended under this Agreement to purchase or carry Margin Stock.

        10.8.   ERISA.  The  Borrower  shall not and shall not permit any of its
Subsidiaries or ERISA Affiliates to:

                (a)     engage  in  any  prohibited   transaction  described  in
Sections 406 of ERISA or 4975 of the Internal Revenue Code for which a statutory
or  class  exemption  is not  available  or a  private  exemption  has not  been
previously  obtained  from  the  DOL,  except  to the  extent  engaging  in such
transaction would not have a Material Adverse Effect;

                (b)     permit to exist any accumulated  funding  deficiency (as
defined in Sections 302 of ERISA and 412 of the  Internal  Revenue  Code),  with
respect to any Benefit Plan, whether or not waived;

                (c)     fail to pay  timely  required  contributions  or  annual
installments  due with respect to any waived  funding  deficiency to any Benefit
Plan;

                (d)     terminate  any Benefit  Plan which  would  result in any
liability of Borrower or any ERISA Affiliate under Title IV of ERISA;

                (e)     fail  to  make  any   contribution  or  payment  to  any
Multiemployer Plan which Borrower or any ERISA Affiliate may be required to make
under any agreement relating to such  Multiemployer  Plan, or any law pertaining
thereto,  except to the extent such  failure  would not have a Material  Adverse
Effect;

                                      -75-
<PAGE>


                (f)     fail  to pay  any  required  installment  or  any  other
payment required under Section 412 of the Internal Revenue Code on or before the
due date for such installment or other payment; or

                (g)     amend a Benefit Plan resulting in an increase in current
liability  for the plan year such that the  Borrower or any ERISA  Affiliate  is
required  to provide  security  to such Plan  under  Section  401(a)(29)  of the
Internal Revenue Code.

        10.9.   ORGANIZATIONAL  DOCUMENTS.  Neither the Company nor the Borrower
shall,  and the Borrower  shall not permit any Guarantor  to,  amend,  modify or
otherwise  change  any of the  terms or  provisions  in any of their  respective
Organizational  Documents as in effect on the Closing Date, except amendments to
effect (a) a change of name of the Borrower or such Guarantor, PROVIDED that the
Borrower  shall have  provided  the  Administrative  Agent with thirty (30) days
prior  written  notice of any such name  change,  or (b) changes  that would not
affect  such  Organizational  Documents  in any  material  manner not  otherwise
prohibited under this Agreement.

        10.10.  FISCAL YEAR. Neither the Company,  the Borrower nor any of their
Subsidiaries  shall change its Fiscal Year for accounting or tax purposes from a
period  consisting of the 12-month period ending on December 31 of each calendar
year.

        10.11.  FINANCIAL COVENANTS.

                (a)     INDEBTEDNESS.  Neither  the  Borrower  nor  any  of  its
Subsidiaries  shall directly or indirectly  create,  incur,  assume or otherwise
become or remain directly or indirectly liable with respect to any Indebtedness,
except (i) Total  Outstanding  Indebtedness  which  would not exceed  fifty-five
percent  (55%) of Total Value as of the date of  incurrence,  (ii) Total Secured
Outstanding  Indebtedness  which would not exceed forty  percent  (40%) of Total
Value as of the date of incurrence or (iii) Total Recourse  Secured  Outstanding
Indebtedness  which would not exceed ten percent  (10%) of Total Value as of the
date of incurrence.

                (b)     MINIMUM COMBINED EQUITY VALUE. The Combined Equity Value
shall at no time be less than  $1,250,000,000,  plus an amount  equal to seventy
percent  (70%) of all Net Offering  Proceeds  received by the Company  after the
date hereof.

                (c)     INTENTIONALLY OMITTED.

                (d)     MINIMUM  UNSECURED  INTEREST  COVERAGE  RATIO. As of the
first  day of each  calendar  quarter  for the  immediately  preceding  calendar
quarter,  the ratio of (i) Adjusted  Unencumbered NOI to (ii) Unsecured Interest
Expense shall not be less than 2.0 to 1.0.

                (e)     LIMITATION ON TOTAL UNSECURED OUTSTANDING  INDEBTEDNESS.
As of the first  day of each  calendar  quarter  for the  immediately  preceding
calendar quarter, the ratio of (i) Total Unsecured  Outstanding  Indebtedness to
(ii) Total  Unencumbered  Value (including  Eligible Cash 1031 Proceeds,  to the
extent not already included) shall not exceed 0.60 to 1.0.

                (f)     MINIMUM TOTAL INTEREST  COVERAGE  RATIO. As of the first
day of each calendar quarter for the immediately preceding calendar quarter, the
ratio of (i) Total Adjusted  EBITDA to (ii) Total Interest  Expense shall not be
less than 2.0 to 1.0.

                                      -76-
<PAGE>


                (g)     MINIMUM FIXED CHARGE COVERAGE RATIO. As of the first day
of each calendar quarter for the immediately  preceding  calendar  quarter,  the
ratio of (i) Total Adjusted  EBITDA to (ii) Fixed Charges shall not be less than
1.60 to 1.0.

                (h)     MAXIMUM  DIVIDEND  PAYOUT RATIO.  The Borrower shall not
make any Restricted Payment during any of its fiscal quarters, which, when added
to all Restricted  Payments made during the three  immediately  preceding fiscal
quarters,  exceeds the greater of (i) 90% of FFO of the  Borrower,  and (ii) the
amounts  required to maintain the Company's  status as a REIT under the Internal
Revenue Code,  and,  provided an Event of Default shall not have occurred and be
continuing,  to avoid federal income and excise tax  liability.  For purposes of
this  provision,  "RESTRICTED  PAYMENT"  means any cash  dividend  or other cash
distribution  on any interest in the  Borrower's  common  operating  partnership
units or on any of the Borrower's common  partnership  interests or other common
equity interests (except dividends or distributions  payable solely in interests
in operating partnership units, partnership interests, or other equity interests
or in rights to subscribe for or purchase interests in its operating partnership
units,  partnership interests, or other equity interests and except dividends or
distributions which are necessary to pay dividends or distributions on preferred
stock or other preferred equity interests of the Company).

                (i)     DEVELOPMENT  ACTIVITIES.  As of the  first  day of  each
calendar quarter for the immediately  preceding  calendar quarter,  the ratio of
(i) Budgeted Construction Cost to (ii) Total Value shall not exceed 0.20 to 1.0.

                (j)     NEGATIVE PLEDGE. From and after the date hereof, neither
the Borrower nor the Company will,  and will not permit any of their  respective
Subsidiaries,  to enter into any agreement containing any provision  prohibiting
the creation or assumption of any Lien upon its  properties,  revenues or assets
(other  than  with  respect  to  (i)   prohibitions  on  subordinate   liens  or
prohibitions on pledges of direct or indirect  ownership  interests  (other than
pledges of direct  ownership  interests in the Borrower or any  Subsidiary  that
owns an Unencumbered Project or Unencumbered New York City Asset) set forth in a
mortgage on a particular property,  (ii) customary restrictions contained in the
Organizational  Documents of a Joint Venture, or (iii) restrictions contained in
the  Organizational  Documents  of the  Borrower  on the  ability of its general
partner and limited partner to pledge and transfer partnership  interests in the
Borrower),  whether now owned or hereafter acquired,  or restricting the ability
of the Borrower to amend or modify this Agreement or any other Loan Document.

                (k)     PRO FORMA  CALCULATIONS.  The Borrower shall comply with
the  financial  ratios  set forth in this  Section  10.11 as of the date of each
Borrowing.  The Borrower  shall  recalculate  the  financial  ratios in Sections
10.11(a)  and  10.11(e)  by adding the  deemed  amount  equal to the  applicable
Borrowing to the Indebtedness reflected on the most recently available financial
statements,  and adding thereto any Indebtedness incurred since the date of such
financial  statement  and  adding,  without  duplication,  the  cash  from  such
Borrowing and the value of any assets  (determined  at cost)  acquired with such
Indebtedness to Total Value.

        10.12.  NEGATIVE COVENANTS WITH RESPECT TO THE COMPANY.

                (a)     From and after the date  hereof,  the  Company  will not
acquire any assets of any nature  whatsoever  other than additional units in the
Borrower,  Cash or Cash  Equivalents  in the  ordinary  course of business or in
connection with the payment of dividends.

                                      -77-
<PAGE>


                (b)     From and after the date  hereof,  the  Company  will not
incur any  Indebtedness  or any other  obligations or liabilities  except (i) as
imposed by  operation  of law on the  Company  in its  capacity  as the  general
partner  of the  Borrower,  (ii)  Indebtedness,  the net  proceeds  of which are
contributed to the Borrower  simultaneously  with the incurrence  thereof by the
Company,  (iii)  guarantees of Indebtedness  which are recourse to the Borrower,
(iv) in connection with the payment of a declared  dividend and (v) otherwise as
imposed by law.

                (c)     From and after the date  hereof,  the  Company  will not
retain  any Net  Offering  Proceeds,  and the same  will be  contributed  by the
Company to the Borrower simultaneously with receipt thereof by the Company.

                (d)     The   Company   shall  not  enter  into  any  merger  or
consolidation,  or liquidate,  wind-up or dissolve (or suffer any liquidation or
dissolution),  or convey,  lease, sell, transfer or otherwise dispose of, in one
transaction or series of transactions,  any of its business or assets, including
its interests in the Borrower.  Notwithstanding the foregoing, the Company shall
be  permitted  to  merge  with  another  Person  so long as the  Company  is the
surviving Person following such merger.

                                  ARTICLE XI.
                     EVENTS OF DEFAULT; RIGHTS AND REMEDIES

        11.1.   EVENTS  OF  DEFAULT.  Each of the  following  occurrences  shall
constitute an Event of Default under this Agreement:

                (a)     FAILURE TO MAKE  PAYMENTS  WHEN DUE. The Borrower  shall
fail to pay (i) when due any principal  payment on the Obligations  which is due
on the  Revolving  Credit  Termination  Date or pursuant to the terms of Section
2.1(a),  Section 2.4,  Section  4.1(a),  or Section 4.1(d) or (ii) when due, any
interest payment on the obligations,  provided, however, that the Borrower shall
be entitled to a five (5) day grace period with respect to any interest  payment
but not more than one time in any  twelve  (12)  month  period  during  the term
hereof,  or (iii)  when  due,  any  principal  payment  on the  Obligations  not
referenced  in clauses (i) or (ii)  hereinabove  or (iv) when due,  any fees due
pursuant to the terms of Section 5.3 and such  default  shall  continue for five
(5) days.

                (b)     BREACH OF CERTAIN  COVENANTS.  The  Borrower  shall fail
duly and punctually to perform or observe any agreement,  covenant or obligation
binding on such Person under Sections 9.1, 9.4, 9.5, 9.10, 9.11 or Article X.

                (c)     BREACH OF REPRESENTATION OR WARRANTY. Any representation
or  warranty  made or deemed  made by the  Borrower or any of the parties to the
Guaranties to the Administrative  Agent, any Arranger or any Lender herein or by
the  Borrower  or  any of  the  parties  to  the  Guaranties  or  any  of  their
Subsidiaries  in  any  of the  other  Loan  Documents  or in  any  statement  or
certificate  at any time given by any such  Person  pursuant  to any of the Loan
Documents shall be false or misleading in any material respect on the date as of
which made or deemed made or given.

                (d)     OTHER  DEFAULTS.  The  Borrower  shall  default  in  the
performance of or compliance with any terms  contained in this Agreement  (other
than as identified in paragraphs  (a), (b) or (c) of this Section 11.1),  or any
default or event of default shall occur under any of the

                                      -78-
<PAGE>


other Loan  Documents,  and such default or event of default shall  continue for
thirty (30) days after receipt of written notice from the  Administrative  Agent
thereof.

                (e)     ACCELERATION OF OTHER INDEBTEDNESS.  Any breach, default
                        or event of default  shall occur and be  continuing,  or
any other  condition  shall exist under any  instrument,  agreement or indenture
pertaining  to any recourse  Indebtedness  (other than the  Obligations)  of the
Company,  the Borrower or their Subsidiaries  aggregating more than $10,000,000,
and the effect  thereof is to cause an  acceleration,  mandatory  redemption  or
other required repurchase of such Indebtedness,  or permit the holder(s) of such
Indebtedness  to accelerate the maturity of any such  Indebtedness  or require a
redemption or other repurchase of such  Indebtedness;  or any such  Indebtedness
shall be otherwise declared to be due and payable (by acceleration or otherwise)
or required to be prepaid,  redeemed or otherwise repurchased by the Borrower or
any  of  its  Subsidiaries   (other  than  by  a  regularly  scheduled  required
prepayment) prior to the stated maturity thereof; or any such Indebtedness shall
not be repaid at maturity (after taking into account grace and cure periods).

                (f)     INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.

                (i)     An  involuntary  case  shall be  commenced  against  the
        Company, the Borrower or any of its Subsidiaries to which $25,000,000 or
        more of the  Combined  Equity  Value is  attributable,  and the petition
        shall not be dismissed,  stayed,  bonded or discharged within sixty (60)
        days after  commencement of the case; or a court having  jurisdiction in
        the premises  shall enter a decree or order for relief in respect of the
        Company,  the  Borrower or any such  Subsidiaries  of the Borrower in an
        involuntary case, under any applicable  bankruptcy,  insolvency or other
        similar law now or  hereafter  in effect;  or any other  similar  relief
        shall be granted under any applicable  federal,  state, local or foreign
        law; or the  respective  board of directors  of the Company,  or General
        Partner or Limited Partners of the Borrower or the board of directors or
        partners of any such  Subsidiaries  of the  Borrower  (or any  committee
        thereof)  adopts any  resolution or otherwise  authorizes  any action to
        approve any of the foregoing.

                (ii)    A decree or order of a court having  jurisdiction in the
        premises for the  appointment of a receiver,  liquidator,  sequestrator,
        trustee,  custodian  or other  officer  having  similar  powers over the
        Company,  the Borrower or any of their Subsidiaries to which $25,000,000
        or more of the Combined Equity Value is  attributable,  or over all or a
        substantial part of the Property of the Company,  the Borrower or any of
        such Subsidiaries,  shall be entered; or an interim receiver, trustee or
        other custodian of the Company, the Borrower or any of such Subsidiaries
        or of all or a  substantial  part of the  Property of the  Company,  the
        Borrower or any of such Subsidiaries  shall be appointed or a warrant of
        attachment, execution or similar process against any substantial part of
        the  Property  of any of  the  Company,  the  Borrower,  or any of  such
        Subsidiaries  shall be issued  and any such  event  shall not be stayed,
        dismissed,  bonded or  discharged  within  sixty (60) days after  entry,
        appointment or issuance;  or the respective board of directors of any of
        the Company or General  Partners or Limited  Partners of the Borrower or
        the board of directors or partners of any of Borrower's Subsidiaries (or
        any committee thereof) adopts any resolution or otherwise authorizes any
        action to approve any of the foregoing.

                (g)     VOLUNTARY BANKRUPTCY;  APPOINTMENT OF RECEIVER. ETC. The
Company,  the Borrower or any of their Subsidiaries to which $25,000,000 or more
of the Combined  Equity

                                      -79-
<PAGE>


Value is  attributable,  shall  commence a voluntary  case under any  applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or shall
consent to the entry of an order for relief in an  involuntary  case,  or to the
conversion of an involuntary  case to a voluntary  case,  under any such law, or
shall consent to the appointment of or taking possession by a receiver,  trustee
or  other  custodian  for  all or a  substantial  part of its  Property;  or the
Company,  the Borrower or any of such Subsidiaries shall make any assignment for
the  benefit of  creditors  or shall be unable or fail,  or admit in writing its
inability, to pay its debts as such debts become due.

                (h)     JUDGMENTS AND UNPERMITTED LIENS.

                (i)     Any money judgment (other than a money judgment  covered
        by  insurance  as  to  which  the  insurance  company  has  acknowledged
        coverage), writ or warrant of attachment, or similar process against the
        Borrower or any of its  Subsidiaries or any of their  respective  assets
        involving in any case an amount in excess of $5,000,000 (other than with
        respect to Claims arising out of non-recourse  Indebtedness)  is entered
        and shall  remain  undischarged,  unvacated,  unbonded or unstayed for a
        period of sixty (60) days or in any event later than five (5) days prior
        to the date of any proposed sale thereunder.

                (ii)    A federal,  state,  local or  foreign  tax Lien is filed
        against the Borrower which is not  discharged of record,  bonded over or
        otherwise secured to the satisfaction of the Administrative Agent within
        sixty  (60) days  after the  filing  thereof  or the date upon which the
        Administrative Agent receives actual knowledge of the filing thereof for
        an amount which, either separately or when aggregated with the amount of
        any  judgments   described  in  clause  (i)  above,  equals  or  exceeds
        $5,000,000.

                (iii)   An Environmental  Lien is filed against any Project with
        respect  to  Claims  in an  amount  which,  either  separately  or  when
        aggregated with the amount of all other such Environmental Liens, equals
        or exceeds $5,000,000.

                (i)     DISSOLUTION.  Any  order,  judgment  or decree  shall be
entered  against  the  Borrower  or  any  Guarantor  decreeing  its  involuntary
dissolution  or split up;  or the  Borrower  or any  Guarantor  shall  otherwise
dissolve or cease to exist except as specifically permitted by this Agreement.

                (j)     LOAN  DOCUMENTS.  At any time, for any reason,  any Loan
Document  ceases to be in full force and effect or the Borrower or any Guarantor
seeks to repudiate its obligations thereunder.

                (k)     ERISA  TERMINATION  EVENT. Any ERISA  Termination  Event
occurs which the Administrative Agent believes could subject any of the Borrower
or any ERISA Affiliate to liability in excess of $500,000.

                (l)     WAIVER  APPLICATION.   The  plan  administrator  of  any
Benefit Plan applies  under  Section 412 (d) of the Internal  Revenue Code for a
waiver of the  minimum  funding  standards  of Section  412 (a) of the  Internal
Revenue Code and the Administrative Agent believes that the substantial business
hardship upon which the application for the waiver is based could subject either
the Borrower or any ERISA Affiliate to liability in excess of $500,000.

                                      -80-
<PAGE>


                (m)     MATERIAL ADVERSE EFFECT.  An event shall occur which has
a Material Adverse Effect.

                (n)     CERTAIN DEFAULTS PERTAINING TO THE COMPANY.  The Company
shall  fail to comply  with  Section  9.9,  or any  representation  or  warranty
contained  in  Section  7.1(a)(ii),  (b),  (d),  (l),  or (o)  shall be false or
misleading in any material respect on the date as of which made.

                (o)     MERGER OR LIQUIDATION OF THE COMPANY, THE BORROWER.  The
Company shall merge or liquidate  with or into any other Person and, as a result
thereof and after giving  effect  thereto,  (i) the Company is not the surviving
Person or (ii) such merger or  liquidation  would  effect an  acquisition  of or
Investment in any Person which is prohibited or results in a Potential  Event of
Default or an Event of Default under the terms of this  Agreement.  The Borrower
shall merge or liquidate  with or into any other Person and, as a result thereof
and after giving effect thereto, (i) the Borrower is not the surviving Person or
(ii) such merger or liquidation  would effect an acquisition of or Investment in
any Person which is prohibited or results in a Potential  Event of Default or an
Event of Default under the terms of this Agreement.

An Event of  Default  shall be  deemed  "continuing"  until  cured or  waived in
writing in accordance with Section 14.7.

        11.2.   RIGHTS AND REMEDIES.

                (a)     ACCELERATION AND TERMINATION. Upon the occurrence of any
Event of Default described in Sections 11.1(f) or 11.1(g),  the Revolving Credit
Commitments  shall  automatically  and  immediately  terminate  and  the  unpaid
principal  amount of, and any and all accrued  interest on, the  Obligations and
all accrued fees and other Obligations shall  automatically  become  immediately
due and payable,  without presentment,  demand, or protest or other requirements
of  any  kind  (including,  without  limitation,   valuation  and  appraisement,
diligence,  presentment,  notice  of  intent  to  demand  or  accelerate  and of
acceleration),  all of which are hereby expressly  waived by the Borrower,  and,
upon the  occurrence  and during the  continuance of any other Event of Default,
the Administrative  Agent shall at the request,  or may with the consent, of the
Lenders  whose Pro Rata Shares,  in the  aggregate,  are greater than  fifty-one
percent (51%), by written notice to the Borrower, (i) declare that the Revolving
Credit  Commitments are terminated,  whereupon the Revolving Credit  Commitments
and the  obligation of each Lender to make any Loan hereunder and of each Lender
to  issue  or  participate  in any  Letter  of  Credit  not  then  issued  shall
immediately  terminate,  and/or (ii) declare the unpaid  principal amount of and
any and all  accrued  and  unpaid  interest  on the  Obligations  and all  other
Obligations to be, and the same shall thereupon be, immediately due and payable,
without  presentment,  demand,  or  protest  or other  requirements  of any kind
(including,   without   limitation,   valuation  and  appraisement,   diligence,
presentment, notice of intent to demand or accelerate and of acceleration),  all
of which are hereby  expressly  waived by the Borrower  and/or (iii) require the
Borrower to provide  cash  collateral  in an amount  equal to the sum of (A) all
outstanding Reimbursement Obligations plus (B) the aggregate undrawn face amount
of all outstanding Letters of Credit.

                (b)     RESCISSION. If within ninety (90) days after termination
of the Revolving Credit Commitments  and/or  acceleration of the maturity of the
Loans,  the  Borrower  shall pay all  arrears of  interest  and all  payments on
account of principal of the Loans and Reimbursement Obligations which shall have
become due otherwise  than by  acceleration  (with interest on principal and, to
the extent permitted by law, on overdue interest, at the rates specified in this
Agreement) and all Events of Default and Potential Events of Default (other than
nonpayment of

                                      -81-
<PAGE>


principal of and accrued  interest on the Loans due and payable solely by virtue
of acceleration) shall be remedied or waived pursuant to Section 14.7, then upon
the written consent of the Requisite Lenders and written notice to the Borrower,
the termination of the Revolving Credit  Commitments and/or the acceleration and
their  consequences  may be rescinded  and  annulled;  but such action shall not
affect any subsequent  Event of Default or Potential  Event of Default or impair
any right or remedy consequent thereon. The provisions of the preceding sentence
are intended  merely to bind the Lenders to a decision  which may be made at the
election of the Requisite Lenders; they are not intended to benefit the Borrower
and do not give the  Borrower  the right to  require  the  Lenders to rescind or
annul any  acceleration  hereunder,  even if the conditions set forth herein are
met.

                (c)     ENFORCEMENT. The Borrower acknowledges that in the event
the  Borrower,  the  Guarantors or any of their  Subsidiaries  fails to perform,
observe or discharge any of their  respective  obligations or liabilities  under
this  Agreement  or any other Loan  Document,  any remedy of law may prove to be
inadequate  relief to the  Administrative  Agent, the Arrangers and the Lenders;
therefore,  the Borrower agrees that the Administrative Agent, the Arrangers and
the Lenders shall be entitled to temporary and  permanent  injunctive  relief in
any such case without the necessity of proving actual damages.

                                  ARTICLE XII.
                                   THE AGENTS

        12.1.   APPOINTMENT.  (a) Each Lender  hereby  designates  and  appoints
JPMorgan as the Administrative Agent, Wells Fargo Bank, National Association, as
the Syndication Agent,  Citicorp North America,  Inc.,  Wachovia Bank,  National
Association and Deutsche Bank Trust Company Americas,  Inc., as Co-Documentation
Agents,  KeyBank,  National Association,  The Bank of New York, The Bank of Nova
Scotia, ING Real Estate Finance (USA) LLC, and PNC Bank,  National  Association,
as the  Co-Agents,  and the Arrangers as the arrangers of such Lender under this
Agreement,  and each Lender hereby  irrevocably  authorizes  the  Administrative
Agent,  the other  Agents and the  Arrangers  to take such actions on its behalf
under the  provisions  of this  Agreement  and the other Loan  Documents  and to
exercise  such  powers  in each case  only as are set  forth  herein or  therein
together  with such  other  powers as are  reasonably  incidental  thereto.  The
Administrative  Agent,  the other Agents and the Arrangers each agrees to act as
such on the express conditions contained in this Article XII.

                (b)     The  provisions  of this  Article XII are solely for the
benefit of the  Administrative  Agent, the Syndication  Agent, the Documentation
Agents, the Co-Agents,  the Arrangers and the Lenders, and neither the Borrower,
the Company nor any  Subsidiary of the Borrower shall have any rights to rely on
or enforce any of the  provisions  hereof  (other than as expressly set forth in
Section  12.7).  In performing  its  respective  functions and duties under this
Agreement,  the Administrative  Agent, the Documentation  Agents, the Co-Agents,
the  Syndication  Agent,  and the  Arrangers  shall act  solely as agents of the
Lenders and do not assume and shall not be deemed to have assumed any obligation
or  relationship  of agency,  trustee or fiduciary with or for the Company,  the
Borrower or any  Subsidiary  of the  Borrower.  The  Administrative  Agent,  the
Documentation Agents, the Co-Agents, the Syndication Agent and the Arrangers may
perform  any of their  respective  duties  hereunder,  or under the  other  Loan
Documents, by or through their respective agents or employees.

        12.2.   NATURE OF DUTIES.  The  Administrative  Agent, the Documentation
Agents,  the Co-Agents,  the Syndication  Agent and the Arrangers shall not have
any duties or responsibilities

                                      -82-
<PAGE>


except  those  expressly  set  forth  in this  Agreement  or in the  other  Loan
Documents. The duties of the Administrative Agent, the Documentation Agents, the
Co-Agents,  the  Syndication  Agent and the Arrangers  shall be  mechanical  and
administrative  in nature.  None of the  Administrative  Agent, a  Documentation
Agent, a Co-Agent, the Syndication Agent or any Arranger shall have by reason of
this  Agreement a fiduciary  relationship  in respect of any Lender.  Nothing in
this  Agreement or any of the other Loan  Documents,  expressed  or implied,  is
intended to or shall be construed  to impose upon the  Administrative  Agent,  a
Documentation  Agent,  a Co-Agent,  the  Syndication  Agent or any  Arranger any
obligations  in respect  of this  Agreement  or any of the other Loan  Documents
except as expressly set forth herein or therein.  The Administrative  Agent, the
Documentation  Agents,  the Co-Agents,  the Syndication  Agent and the Arrangers
each hereby agrees that its duties shall include  providing  copies of documents
received by such Agent from the Borrower which are  reasonably  requested by any
Lender,  furnishing  copies  of  documents  to each  Lender,  upon  request,  of
documents sent by such Agent to the Borrower and promptly  notifying each Lender
upon its obtaining  actual  knowledge of the  occurrence of any Event of Default
hereunder.  In addition,  the Administrative Agent shall deliver to each Lender,
promptly after receipt  thereof,  copies of those documents and reports received
by it pursuant to Sections 8.2 (other than clause  (b)(iv)),  8.3,  8.4, 8.7 and
8.12.

        12.3.   RIGHT TO REQUEST  INSTRUCTIONS.  The  Administrative  Agent, the
Documentation Agents, the Co-Agents, the Syndication Agent and the Arrangers may
at any time request instructions from the Lenders with respect to any actions or
approvals  which  by the  terms  of any of the  Loan  Documents  such  Agent  is
permitted  or required to take or to grant,  and such Agent shall be  absolutely
entitled to refrain from taking any action or to withhold any approval and shall
not be under any  liability  whatsoever  to any Person for  refraining  from any
action or  withholding  any approval  under any of the Loan  Documents  until it
shall have received such instructions from those Lenders from whom such Agent is
required to obtain such instructions for the pertinent matter in accordance with
the Loan Documents. Without limiting the generality of the foregoing, such Agent
shall take any action, or refrain from taking any action,  which is permitted by
the terms of the Loan Documents upon receipt of instructions  from those Lenders
from whom such Agent is required to obtain such  instructions  for the pertinent
matter in accordance  with the Loan  Documents,  PROVIDED,  that no Lender shall
have any  right  of  action  whatsoever  against  the  Administrative  Agent,  a
Documentation  Agent,  a Co-Agent.  the  Syndication  Agent or any Arranger as a
result of such Agent acting or refraining  from acting under the Loan  Documents
in accordance with the instructions of the Requisite  Lenders or, where required
by the express terms of this Agreement, a greater proportion of the Lenders.

        12.4.   RELIANCE.  The Administrative  Agent, the Documentation  Agents,
the Co-Agents, the Syndication Agent and the Arrangers shall each be entitled to
rely  upon  any  written  notices,  statements,  certificates,  orders  or other
documents  believed  by it in good faith to be genuine  and  correct and to have
been signed,  sent or made by the proper Person, and with respect to all matters
pertaining to this  Agreement or any of the other Loan  Documents and its duties
hereunder or thereunder, upon advice of legal counsel (including counsel for the
Borrower), independent public accountants and other experts selected by it.

        12.5.   INDEMNIFICATION.  To the extent that the Administrative Agent, a
Documentation  Agent, a Co-Agent,  the Syndication  Agent or any Arranger is not
reimbursed  and  indemnified  by the  Borrower,  the Lenders will  reimburse and
indemnify  such  Agent for and  against  any and all  liabilities,  obligations,
losses, damages,  penalties,  actions,  judgments,  suits, and reasonable costs,
expenses or disbursements of any kind or nature  whatsoever which may be imposed
on, incurred by, or asserted against it in any way relating to or arising out of
the Loan Documents or any

                                      -83-
<PAGE>


action taken or omitted by such Agent under the Loan Documents, in proportion to
each Lender's Pro Rata Share. Notwithstanding anything to the contrary contained
herein,  the  Administrative  Agent,  a  Documentation  Agent,  a Co-Agent,  the
Syndication  Agent or any Arranger  shall not be  indemnified to the extent such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs  and  expenses  result  from  such  Person's  gross  negligence,   willful
misconduct  or breach of this  Article  XII.  Such Agent agrees to refund to the
Lenders any of the foregoing amounts paid to it by the Lenders which amounts are
subsequently  recovered  by such Agent from the  Borrower or any other Person on
behalf of the Borrower.  The  obligations of the Lenders under this Section 12.5
shall survive the payment in full of the Loans,  the  Reimbursement  Obligations
and all other Obligations and the termination of this Agreement.

        12.6.   AGENTS  INDIVIDUALLY.  With respect to their respective Pro Rata
Share of the Revolving Credit Commitments hereunder,  if any, and the Loans made
by  them,  if  any,  the  Persons  serving  as  the  Administrative  Agent,  the
Documentation  Agents,  the Co-Agents,  the Syndication  Agent and the Arrangers
shall have and may exercise the same rights and powers hereunder and are subject
to the same  obligations  and  liabilities as and to the extent set forth herein
for any Lender. The terms "LENDERS" or "REQUISITE  LENDERS" or any similar terms
shall,  unless  the  context  clearly  otherwise  indicates  or such  Lender has
assigned its interest hereunder, include JPMorgan, Citicorp North America, Inc.,
Wells Fargo Bank, National  Association,  Wachovia Bank,  National  Association,
Deutsche Bank Trust Company Americas, Inc., KeyBank,  National Association,  The
Bank of New York,  The Bank of Nova Scotia,  ING Real Estate  Finance (USA) LLC,
and PNC Bank, National  Association,  each in its respective individual capacity
as a Lender or as one of the Requisite Lenders. JPMorgan, J.P. Morgan Securities
Inc. and each other Arranger and each of their respective  Affiliates may accept
deposits from, lend money to, and generally engage in any kind of banking, trust
or other  business with the Borrower or any of its  Subsidiaries  as if JPMorgan
and J.P. Morgan Securities Inc. were not acting as an Agent or Arranger pursuant
hereto.

        12.7.   SUCCESSOR AGENTS.

                (a)     RESIGNATION.  Any Agent may resign from the  performance
of all its functions and duties  hereunder at any time by giving at least thirty
(30) Business Days' prior written notice to the Borrower and the Lenders, unless
applicable  law  requires  a shorter  notice  period or that  there be no notice
period,  in which instance such applicable law shall control.  Such  resignation
shall take  effect  upon the  acceptance  by a  successor  Agent of  appointment
pursuant to this Section 12.7.

                (b)     APPOINTMENT   BY  REQUISITE   LENDERS.   Upon  any  such
resignation  becoming  effective,  (i) if an Arranger  shall then be acting with
respect to this Agreement,  such Arranger shall become the Administrative  Agent
or (ii) if no Arranger shall then be acting with respect to this Agreement,  the
Requisite  Lenders  shall have the right to appoint a  successor  Administrative
Agent  selected  from among the Lenders  with the prior  written  consent of the
Borrower (so long as no Event of Default then  exists),  which consent shall not
be unreasonably withheld.

                (c)     APPOINTMENT   BY   RETIRING   AGENT.   If  a   successor
Administrative  Agent  shall not have been  appointed  within  the  thirty  (30)
Business Day or shorter  period  provided in paragraph (a) of this Section 12.7,
the  retiring  Agent  shall then  appoint a  successor  Agent who shall serve as
Administrative Agent until such time, if any, as the Requisite Lenders appoint a
successor Agent as provided above with the prior written consent of the Borrower
(so long as no

                                      -84-
<PAGE>


Event  of  Default  then  exists)  which  shall  not be  unreasonably  withheld,
PROVIDED,  HOWEVER,  that such successor  Administrative  Agent shall have total
assets of not less than $10,000,000,000.

                (d)     RIGHTS OF THE  SUCCESSOR AND RETIRING  AGENTS.  Upon the
acceptance of any appointment as  Administrative  Agent hereunder by a successor
Agent,  such successor Agent shall  thereupon  succeed to and become vested with
all the rights,  powers,  privileges and duties of the retiring  Agent,  and the
retiring Agent shall be discharged  from its duties and  obligations  under this
Agreement.  After any  retiring  Agent's  resignation  hereunder  as Agent,  the
provisions  of this  Article  XII shall  inure to its  benefit as to any actions
taken or omitted to be taken by it while it was the Agent under this Agreement.

        12.8.   RELATIONS AMONG THE LENDERS. Each Lender agrees that it will not
take any legal  action,  or institute  any actions or  proceedings,  against the
Borrower or any other obligor  hereunder with respect to any of the Obligations,
without  the  prior  written  consent  of  the  Lenders.  Without  limiting  the
generality of the foregoing,  no Lender may accelerate or otherwise  enforce its
portion of the  obligations,  or  unilaterally  terminate its  Revolving  Credit
Commitment except in accordance with Section 11.2(a).

        12.9.   STANDARD OF CARE. The  Administrative  Agent, the  Documentation
Agents, the Co-Agents,  the Syndication Agent and the Arrangers shall administer
the Loans in the same manner that such Agent  administers loans made for its own
account.

                                 ARTICLE XIII.
                                YIELD PROTECTION

        13.1.   TAXES.

                (a)     PAYMENT OF TAXES.  Any and all  payments by the Borrower
hereunder or under the Notes or other  documents  evidencing any  Obligations of
such Person shall be made, in accordance with Section 4.2, free and clear of and
without  reduction  for any and all present or future  taxes,  levies,  imposts,
deductions,  charges,  withholdings,  and all stamp or documentary taxes, excise
taxes, ad valorem taxes and other taxes which arise from the execution, delivery
or registration, or from payment or performance under, or otherwise with respect
to, any of the Loan Documents or the Revolving Credit  Commitments and all other
liabilities with respect thereto  excluding,  in the case of each Lender,  taxes
imposed on or measured by net income or overall  gross  receipts and capital and
franchise  taxes imposed on it by (i) the United States,  (ii) the  Governmental
Authority of the jurisdiction in which such Lender's  Applicable  Lending Office
is  located  or any  political  subdivision  thereof  or (iii) the  Governmental
Authority  in which such  Person is  organized,  managed and  controlled  or any
political  subdivision  thereof (all such non-excluded taxes,  levies,  imposts,
deductions,  charges and withholdings being hereinafter referred to as "TAXES").
Except as otherwise provided herein, if the Borrower shall be required by law to
withhold or deduct any Taxes from or in respect of any sum payable  hereunder or
under any such Note or  document  to any  Lender,  (x) the sum  payable  to such
Lender  shall be increased as may be necessary so that after making all required
withholding or deductions  (including  withholding  or deductions  applicable to
additional  sums payable under this Section 13.1) such Lender receives an amount
equal to the sum it would have  received had no such  withholding  or deductions
been made, (y) the Borrower shall make such  withholding or deductions,  and (z)
the  Borrower  shall pay the full amount  withheld  or deducted to the  relevant
taxation authority or other authority in accordance with applicable law.

                                      -85-
<PAGE>


                (b)     INDEMNIFICATION.  Except as otherwise  provided  herein,
the Borrower will  indemnify  each Lender  against,  and  reimburse  each Lender
within ten (10) Business  Days after written  demand for, the full amount of all
Taxes  (including,  without  limitation,  any Taxes imposed by any  Governmental
Authority on amounts  payable under this Section 13.1 and any additional  income
or franchise taxes resulting  therefrom) incurred or paid by such Lender and any
liability (including  penalties,  interest,  and out-of-pocket  expenses paid to
third parties) arising  therefrom or with respect  thereto,  whether or not such
Taxes were lawfully payable,  to the extent not paid by the Borrower pursuant to
this Section  13.1. A certificate  as to any  additional  amount  payable to any
Person  under this Section 13.1  submitted by it to the Borrower  shall,  absent
manifest error, be final,  conclusive and binding upon all parties hereto.  Each
Lender agrees,  within a reasonable  time after receiving a written request from
the  Borrower,  to provide the Borrower and the  Administrative  Agent with such
certificates and other documents as are reasonably required, and take such other
actions as are reasonably  necessary to claim such exemptions as such Lender may
be  entitled  to claim in  respect  of all or a portion  of any Taxes  which are
otherwise  required to be paid or deducted or withheld  pursuant to this Section
13.1 in respect of any  payments  under this  Agreement  or under the other Loan
Documents.  If any Lender  receives any refund with  respect to any Taxes,  such
Lender shall promptly remit such refund to the Borrower.

                (c)     RECEIPTS.  Within thirty (30) days after the date of any
payment  of  Taxes  by  the   Borrower,   the  Borrower   will  furnish  to  the
Administrative  Agent, at its address  referred to in Section 14.8, the original
or a certified copy of a receipt evidencing payment thereof.

                (d)     FOREIGN BANK CERTIFICATIONS. (i) Each Lender that is not
created  or  organized  under  the  laws of the  United  States  or a  political
subdivision thereof shall deliver to each of the Borrower and the Administrative
Agent on the  Closing  Date or the date on which  such  Lender  becomes a Lender
pursuant to Section  14.1  hereof a true and  accurate  certificate  executed in
duplicate  by a duly  authorized  officer of such Lender to the effect that such
Lender is eligible to receive  payments  hereunder  and under the Notes  without
deduction  or  withholding  of United  States  federal  income tax (I) under the
provisions of an applicable tax treaty  concluded by the United States (in which
case the  certificate  shall be accompanied by two duly completed  copies of IRS
Form  W-8BEN  (or any  successor  or  substitute  form or  forms)) or (II) under
Sections  1441(c)(1) and 1442(a) of the Internal Revenue Code (in which case the
certificate shall be accompanied by two duly completed copies of IRS Form W-8ECI
(or any successor or substitute form or forms)).

                (ii)    Each Lender  referred to in Section  13.1(d)(i)  further
agrees to deliver to each of the Borrower and the Administrative Agent from time
to  time,  a true and  accurate  certificate  executed  in  duplicate  by a duly
authorized  officer of such Lender before or promptly upon the occurrence of any
event requiring a change in the most recent certificate  previously delivered by
it to the  Borrower  and the  Administrative  Agent  pursuant  to  this  Section
13.1(d).  Each  certificate  required to be  delivered  pursuant to this Section
13.1(d)(ii) shall certify as to one of the following:

                        (A)     that  such   Lender  can   continue  to  receive
                payments  hereunder  and under the Notes  without  deduction  or
                withholding of United States federal income tax;

                        (B)     that such  Lender  cannot  continue  to  receive
                payments  hereunder  and under the Notes  without  deduction  or
                withholding of United States federal

                                      -86-
<PAGE>


                income tax as specified therein but does not require  additional
                payments  pursuant to Section  13.1(a) because it is entitled to
                recover the full  amount of any such  deduction  or  withholding
                from a source other than the Borrower; or

                        (C)     that  such  Lender  is  no  longer   capable  of
                receiving   payments  hereunder  and  under  the  Notes  without
                deduction or  withholding of United States federal income tax as
                specified  therein and that it is not capable of recovering  the
                full amount of the same from a source other than the Borrower.

Each  such  Lender   agrees  to  deliver  to  each  of  the   Borrower  and  the
Administrative  Agent further duly completed copies of the  above-mentioned  IRS
forms on or before  the  earlier  of (x) the date that any such form  expires or
becomes  obsolete or otherwise is required to be  resubmitted  as a condition to
obtaining an exemption  from  withholding  from United States federal income tax
and (y) fifteen (15) days after the  occurrence of any event  requiring a change
in the most recent form previously  delivered by such Lender to the Borrower and
Administrative Agent, unless any change in treaty, law, regulation,  or official
interpretation  thereof which would render such form inapplicable or which would
prevent such Lender from duly  completing and delivering  such form has occurred
prior to the date on which any such  delivery  would  otherwise  be required and
such Lender  promptly  advises the Borrower  that it is not capable of receiving
payments  hereunder and under the Notes without any deduction or  withholding of
United States federal income tax.

                (iii)   Notwithstanding  anything to the  contrary  contained in
this  Section  13.1,  the Borrower  will not be required to make any  additional
payment  to or for the  account of any Lender  under  Section  13.1(a) or (b) by
reason of (x) a breach by such Lender of any certification or representation set
forth in any form furnished to the Borrower under this Section  13.1(d),  or (y)
such Lender's failure or inability to furnish,  if required to do so, under this
Section  13.1(d) an  original  or renewal  of a Form  W-8ECI or Form  W-8BEN (or
successor form), as applicable,  unless such failure or inability results from a
change  (after  the  date  such  Lender  became a Lender  party  hereto)  in any
applicable law or regulation or in the interpretation  thereof by any regulatory
authority  (including  without  limitation  any  change  in any  applicable  tax
treaty).

        13.2.   INCREASED   CAPITAL.   If  after  the  date  hereof  any  Lender
determines that (i) the adoption or implementation of or any change in or in the
interpretation  or  administration  of any law or regulation or any guideline or
request   from  any   central   bank  or   other   Governmental   Authority   or
quasi-governmental authority exercising jurisdiction,  power or control over any
Lender or banks or financial  institutions  generally (whether or not having the
force of law),  compliance with which affects the amount of capital  required or
expected to be maintained  by such Lender or any  corporation  controlling  such
Lender and (ii) the amount of such capital is increased by or based upon (A) the
making or maintenance by any Lender of its Loans, any Lender's  participation in
or obligation to participate  in the Loans,  Letters of Credit or other advances
made hereunder or the existence of any Lender's  obligation to make Loans or (B)
the issuance or  maintenance  by any Lender of, or the existence of any Lender's
obligation to issue,  Letters of Credit, then, in any such case, within ten (10)
Business Days after written demand by such Lender (with a copy of such demand to
the   Administrative   Agent),   the  Borrower  shall  immediately  pay  to  the
Administrative  Agent  for the  account  of such  Lender,  from  time to time as
specified by such Lender,  additional  amounts  sufficient  to  compensate  such
Lender or such  corporation  therefor.  Such demand  shall be  accompanied  by a
statement as to the amount of such  compensation  and include a brief summary of
the basis for such demand.  Such  statement  shall be conclusive and binding for
all purposes, absent manifest error.

                                      -87-
<PAGE>


        13.3.   CHANGES; LEGAL RESTRICTIONS. If after the date hereof any Lender
determines  that the  adoption or  implementation  of or any change in or in the
interpretation  or  administration  of any law or regulation or any guideline or
request   from  any   central   bank  or   other   Governmental   Authority   or
quasi-governmental authority exercising jurisdiction,  power or control over any
Lender, or over banks or financial institutions generally (whether or not having
the force of law), compliance with which:

                (a)     subjects a Lender (or its  Applicable  Lending Office or
Eurodollar  Affiliate)  to  charges  (other  than  taxes) of any kind which such
Lender   reasonably   determines  to  be  applicable  to  the  Revolving  Credit
Commitments  of the  Lenders  to make  Eurodollar  Rate  Loans or  issue  and/or
participate  in Letters of Credit or change the basis of taxation of payments to
that Lender of principal,  fees, interest, or any other amount payable hereunder
with  respect to  Eurodollar  Rate  Loans,  Competitive  Bid Loans or Letters of
Credit (other than taxes covered by Section 13.1(a) hereof and taxes excluded in
Section 13.1(a) hereof); or

                (b)     imposes,   modifies,   or  holds   applicable,   in  the
determination of a Lender, any reserve,  special deposit,  compulsory loan, FDIC
insurance or similar  requirement  against  assets held by, or deposits or other
liabilities  (including  those  pertaining  to  Letters of Credit) in or for the
account of, advances or loans by, commitments made, or other credit extended by,
or any other acquisition of funds by, a Lender or any Applicable  Lending Office
or Eurodollar Affiliate of that Lender in respect of Eurodollar Loans or Letters
of Credit;

and the result of any of the foregoing is to increase the cost to that Lender of
making,  renewing or maintaining the Loans or its Revolving Credit Commitment or
issuing  or  participating  in the  Letters  of Credit or to reduce  any  amount
receivable  thereunder;  then,  in any such case,  within ten (10) Business Days
after  written  demand  by  such  Lender  (with a copy  of  such  demand  to the
Administrative  Agent), the Borrower shall immediately pay to the Administrative
Agent for the account of such  Lender,  from time to time as  specified  by such
Lender,  such amount or amounts as may be necessary to compensate such Lender or
its Eurodollar Affiliate for any such additional cost incurred or reduced amount
received.  Such demand shall be  accompanied  by a statement as to the amount of
such compensation and include a brief summary of the basis for such demand. Such
statement  shall be  conclusive  and binding for all purposes,  absent  manifest
error.

        13.4.   REPLACEMENT  OF  CERTAIN  LENDERS.  In the  event  a  Lender  (a
"DESIGNATED LENDER") shall have (i) requested  additional  compensation from the
Borrower  under Section 13.1 or under  Section 13.2 or under Section 13.3,  (ii)
failed to make its Pro Rata  Share of any Loan  requested  to be made  hereby or
(iii) failed to make any Loan at the  Eurodollar  Rate, the Borrower may, at its
sole election, make written demand on such Designated Lender (with a copy to the
Administrative  Agent) for the Designated Lender to assign,  and such Designated
Lender  shall  assign  pursuant  to one or more  duly  executed  Assignment  and
Acceptances  to one  or  more  Eligible  Assignees  which  the  Borrower  or the
Administrative  Agent  shall  have  identified  for  such  purpose,  all of such
Designated  Lender's right and obligations  under this Agreement,  the Notes and
the other Loan Documents  (including,  without limitation,  its Revolving Credit
Commitment,  all Loans owing to it, and all of its  participation  interests  in
Letters  of Credit and all other  Obligations  owing to it) in  accordance  with
Section 14.1. All out-of-pocket expenses incurred by the Administrative Agent in
connection  with the foregoing shall be for the sole account of the Borrower and
shall constitute  Obligations  hereunder.  In no event shall Borrower's election
under the  provisions  of this  Section  13.4 affect its  obligation  to pay the
additional  compensation  required  under either  Section 13.1,  Section 13.2 or
Section 13.3.

                                      -88-
<PAGE>


        13.5.   MITIGATION.  Each Lender  shall notify the Borrower of any event
occurring after the date of this Agreement entitling such Lender to compensation
under Sections 13.1, 13.2 or 13.3 as promptly as practicable,  but in any event,
within 45 days,  after such Lender obtains actual  knowledge  thereof;  provided
that (i) if any Lender fails to give such notice within 45 days after it obtains
actual  knowledge  of  such  an  event,  such  Lender  shall,  with  respect  to
compensation  payable  pursuant to Sections 13.1, 13.2 or 13.3 in respect of any
costs  resulting  from such event,  only be entitled to payment  under  Sections
13.1,  13.2 or 13.3 for costs  incurred from and after the date 45 days prior to
the date  that such  Lender  does give such  notice  and (ii) each  Lender  will
designate a  different  Applicable  Lending  Office for the Loans of such Lender
affected  by such event if such  designation  will avoid the need for, or reduce
the amount of, such  compensation  and will not, in the  reasonable  judgment of
such Lender, be disadvantageous to such Lender.

                                  ARTICLE XIV.
                                  MISCELLANEOUS

        14.1.   ASSIGNMENTS AND PARTICIPATIONS.

                (a)     ASSIGNMENTS.  No  assignments or  participations  of any
Lender's  rights or  obligations  under this  Agreement  shall be made except in
accordance  with  this  Section  14.1.  Each  Lender  may  assign to one or more
Eligible  Assignees  all or a portion of its rights and  obligations  under this
Agreement (including all of its rights and obligations with respect to the Loans
and the Letters of Credit) in  accordance  with the  provisions  of this Section
14.1.

                (b)     LIMITATIONS ON  ASSIGNMENTS.  Each  assignment  shall be
subject to the following conditions: (i) each assignment shall be of a constant,
and not a varying,  ratable  percentage of all of the assigning  Lender's rights
and obligations under this Agreement and, in the case of a partial assignment to
an assignee which is not a Lender or a Lender  Affiliate,  shall be in a minimum
principal amount of $5,000,000 (and the assignor shall maintain a minimum amount
of  $5,000,000  for  its  own  account  unless  the  assignor  shall  assign  or
participate  its  entire  interest),  (ii) each such  assignment  shall be to an
Eligible Assignee,  (iii) (A) so long as no Event of Default has occurred and is
continuing, each assignment shall be subject to the approval of the Issuing Bank
and  the  Administrative   Agent  (which  approval  shall  not  be  unreasonably
withheld);  provided  that, no such consent of the  Administrative  Agent or the
Issuing  Bank shall be required  for an  assignment  by any Lender to any of its
Lender Affiliates, so long as such Lender Affiliate is an Eligible Assignee, and
(B) so  long as no  Event  of  Default  has  occurred  and is  continuing,  each
assignment to an assignee which is not a Lender or a Lender  Affiliate  shall be
subject  to  the  approval  of  the  Borrower   (which  approval  shall  not  be
unreasonably  withheld  and shall be deemed to have been  given if the  Borrower
fails to object to such proposed assignment within five (5) Business Days of its
receipt of a request for approval), and (iv) the parties to each such assignment
shall execute and deliver to the  Administrative  Agent,  for its acceptance and
recording in the Register,  an Assignment and  Acceptance.  Upon such execution,
delivery, acceptance and recording in the Register, from and after the effective
date  specified  in  each  Assignment  and  Acceptance  and  agreed  to  by  the
Administrative  Agent,  (A) the assignee  thereunder  shall,  in addition to any
rights and obligations  hereunder held by it immediately prior to such effective
date, if any, have the rights and obligations  hereunder that have been assigned
to it pursuant  to such  Assignment  and  Acceptance  and shall,  to the fullest
extent  permitted by law,  have the same rights and benefits  hereunder as if it
were an original Lender hereunder, (B) the assigning Lender shall, to the extent
that rights and obligations  hereunder have been assigned by it pursuant to such
Assignment and Acceptance,  relinquish its rights (except as otherwise  provided
in Section 14.9) and be released from its obligations under this Agreement (and,
in the

                                      -89-
<PAGE>


case of an Assignment  and Acceptance  covering all or the remaining  portion of
such  assigning  Lender's  rights  and  obligations  under this  Agreement,  the
assigning Lender shall cease to be a party hereto,  except as otherwise provided
in Section 14.9) and (C) the Borrower  shall execute and deliver to the assignee
thereunder a Note  evidencing  its  obligations to such assignee with respect to
the Loans.

                (c)     THE REGISTER. The Administrative Agent shall maintain at
its address referred to in Section 14.8 a copy of each Assignment and Acceptance
delivered  to and  accepted  by it  and a  register  (the  "REGISTER")  for  the
recordation  of the names and  addresses of the Lenders,  the  Revolving  Credit
Commitment of, and the principal  amount of the Loans under the Revolving Credit
Commitments  owing to, each Lender from time to time and whether  such Lender is
an original  Lender or the assignee of another Lender  pursuant to an Assignment
and Acceptance.  The entries in the Register shall be conclusive and binding for
all purposes,  absent manifest error, and the Borrower, the Administrative Agent
and the other  Lenders  and each other party to a Loan  Document  may treat each
Person  whose name is recorded in the  Register  as a Lender  hereunder  for all
purposes of this  Agreement.  The Register  shall be available for inspection by
the  Borrower  or any Lender at any  reasonable  time and from time to time upon
reasonable prior notice.

                (d)     FEE.  Upon its receipt of an Assignment  and  Acceptance
executed  by  the  assigning  Lender  and  an  Assignee  and  a  processing  and
recordation fee of $3,500 (payable by the assignee to the Administrative Agent),
the  Administrative  Agent shall,  if such  Assignment  and  Acceptance has been
completed and is in compliance with this Agreement and in substantially the form
of EXHIBIT A hereto, (i) accept such Assignment and Acceptance,  (ii) record the
information  contained  therein in the  Register  and (iii) give  prompt  notice
thereof to the Borrower.

                (e)     PARTICIPATIONS.  Each Lender may sell  participations to
one or more  other  financial  institutions  or other  Persons in or to all or a
portion  of its  rights  and  obligations  under and in  respect  of any and all
facilities under this Agreement (including, without limitation, all or a portion
of its Revolving Credit Commitment hereunder and the Committed Loans owing to it
and its undivided interest in the Letters of Credit);  PROVIDED,  HOWEVER,  that
(i)  such  Lender's  obligations  under  this  Agreement   (including,   without
limitation,  its Revolving Credit Commitment  hereunder) shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for
the  performance of such  obligations,  (iii) the Borrower,  the  Administrative
Agent and the other Lenders shall continue to deal solely and directly with such
Lender in  connection  with such  Lender's  rights  and  obligations  under this
Agreement,  (iv) each participation (other than a participation to an Affiliate)
shall be in a minimum amount of $5,000,000, and (v) such participant's rights to
agree or to restrict such Lender's ability to agree to the modification,  waiver
or release of any of the terms of the Loan  Documents,  to consent to any action
or  failure  to act by any  party to any of the Loan  Documents  or any of their
respective  Affiliates,  or to exercise or refrain from exercising any powers or
rights  which any Lender  may have  under or in  respect of the Loan  Documents,
shall be limited to the right to consent to any (A)  increase  in the  Revolving
Credit  Commitment  of  the  Lender  from  whom  such  participant  purchased  a
participation,  (B) reduction of the principal of, or rate or amount of interest
on the  Loans  subject  to such  participation  (other  than by the  payment  or
prepayment  thereof),  (C)  postponement  of any date  fixed for any  payment of
principal of, or interest on, the Loans) subject to such  participation  and (D)
release of any  guarantor of the  Obligations.  Participations  by a Person in a
Competitive  Bid Loan of any  Lender  shall not be deemed  "participations"  for
purposes of this Section 14.1(e) and shall not be subject to the restrictions on
"participations" contained herein.

                                      -90-
<PAGE>


                (f)     DESIGNATED   BANK.  Any  Lender  (each,  a  "DESIGNATING
LENDER") may at any time designate one Designated  Bank to fund  Competitive Bid
Loans on behalf of such Designating  Lender subject to the terms of this Section
14.1(f) and the  provisions  in Section  14.1(b) and (e) shall not apply to such
designation.  No Lender may designate  more than one (1)  Designated  Bank.  The
parties to each such designation shall execute and deliver to the Administrative
Agent for its  acceptance  a  Designation  Agreement.  Upon such  receipt  of an
appropriately  completed  Designation Agreement executed by a Designating Lender
and a designee  representing  that it is a Designated  Bank, the  Administrative
Agent will accept such Designation Agreement and will give prompt notice thereof
to the Borrower,  whereupon,  (i) the Borrower  shall execute and deliver to the
Designating  Bank a Designated  Bank Note payable to the order of the Designated
Bank,  (ii) from and after  the  effective  date  specified  in the  Designation
Agreement,  the  Designated  Bank shall become a party to this  Agreement with a
right to make Competitive Bid Loans on behalf of its Designating Lender pursuant
to  Section  2.2 after the  Borrower  has  accepted a  Competitive  Bid Loan (or
portion thereof) of the Designating  Lender, and (iii) the Designated Bank shall
not be  required  to make  payments  with  respect  to any  obligations  in this
Agreement except to the extent of excess cash flow of such Designated Bank which
is not otherwise required to repay obligations of such Designated Bank which are
then due and payable; PROVIDED, HOWEVER, that regardless of such designation and
assumption by the Designated  Bank, the  Designating  Lender shall be and remain
obligated to the Borrower,  the Administrative Agent, the Syndication Agent, the
Documentation Agents, the Co-Agents, and the other Lenders for each and every of
the obligations of the Designating  Lender and its related  Designated Bank with
respect to this Agreement,  including,  without limitation,  any indemnification
obligations  under  Section  12.5 hereof and any sums  otherwise  payable to the
Borrower by the  Designated  Bank.  Each  Designating  Lender shall serve as the
administrative  agent of the Designated  Bank and shall on behalf of, and to the
exclusion of, the Designated Bank: (i) receive any and all payments made for the
benefit of the Designated Bank and (ii) give and receive all  communications and
notices and take all actions hereunder,  including,  without limitation,  votes,
approvals,  waivers, consents and amendments under or relating to this Agreement
and the other Loan Documents.  Any such notice,  communication,  vote, approval,
waiver,  consent  or  amendment  shall be  signed by the  Designating  Lender as
administrative  agent  for the  Designated  Bank and  shall not be signed by the
Designated Bank on its own behalf but shall be binding on the Designated Bank to
the same extent as if actually signed by the Designated Bank. The Borrower,  the
Administrative Agent, the Documentation  Agents, the Co-Agents,  the Syndication
Agent and Lenders may rely thereon without any  requirement  that the Designated
Bank sign or acknowledge the same. No Designated Bank may assign or transfer all
or any portion of its interest hereunder or under any other Loan Document, other
than  assignments to the  Designating  Lender which  originally  designated such
Designated Bank.

                (g)     INFORMATION  REGARDING  THE  BORROWER.  Any Lender  may,
subject to the provisions of Section 14.22, in connection with any assignment or
participation or proposed  assignment or participation  pursuant to this Section
14.1,   disclose  to  the  assignee  or  participant  or  proposed  assignee  or
participant,  any  information  relating  to the  Borrower  or its  Subsidiaries
furnished to such Lender by the  Administrative  Agent or by or on behalf of the
Borrower.

                (h)     PAYMENT TO  PARTICIPANTS.  Anything in this Agreement to
the  contrary  notwithstanding,  in the case of any  participation,  all amounts
payable by the Borrower under the Loan Documents shall be calculated and made in
the manner and to the parties  required hereby as if no such  participation  had
been sold.

                                      -91-
<PAGE>


                (i)     LENDERS' CREATION OF SECURITY INTERESTS. Notwithstanding
any other  provision  set forth in this  Agreement,  any  Lender may at any time
create a  security  interest  in all or any  portion  of its  rights  under this
Agreement (including,  without limitation,  Obligations owing to it and any Note
held by it) in favor of any Person.

        14.2.   EXPENSES.

                (a)     GENERALLY.  The Borrower  agrees promptly upon demand to
pay, or reimburse the Administrative Agent for the reasonable fees, expenses and
disbursements  of counsel to the  Administrative  Agent (but not of other  legal
counsel) and for all other reasonable  out-of-pocket costs and expenses incurred
by  the  Administrative  Agent,  the  Syndication  Agent  or  the  Arrangers  in
connection  with (i) the  preparation,  negotiation,  and  execution of the Loan
Documents;  (ii)  the  preparation,   negotiation,  execution,  syndication  and
interpretation   of  this  Agreement   (including,   without   limitation,   the
satisfaction  or attempted  satisfaction  of any of the  conditions set forth in
Article  VI),  the  Loan  Documents,  and the  making  of the  Loans  and  other
extensions  of  credit  hereunder;  (iii)  any  amendments,  consents,  waivers,
assignments,  restatements,  or supplements to any of the Loan Documents and the
preparation,  negotiation,  and  execution  of the  same;  and  (iv)  any  other
amendments, modifications,  agreements, assignments, restatements or supplements
to any of  the  Loan  Documents  requested  by  Borrower  and  the  preparation,
negotiation, and execution of the same.

                (b)     AFTER  DEFAULT.  The Borrower  further  agrees to pay or
reimburse the  Administrative  Agent, the Arrangers and each of the Lenders upon
demand for all reasonable out-of-pocket costs and expenses,  including,  without
limitation,  reasonable  attorneys' fees (including  allocated costs of internal
counsel  and  costs  of  settlement)  incurred  by the  such  entity  after  the
occurrence  and during the  continuance  of an Event of Default (i) in enforcing
any Loan Document or Obligation,  the collection of any Obligation or exercising
or  enforcing  any other  right or remedy  available  by reason of such Event of
Default;  or (ii) in connection  with any  refinancing or  restructuring  of the
credit arrangements  provided under this Agreement in the nature of a "work-out"
or in any insolvency or bankruptcy proceeding; (iii) in commencing, defending or
intervening in any litigation or in filing a petition, complaint, answer, motion
or other  pleadings  in any legal  proceeding  relating  to the  Obligations,  a
Project, or any of the Consolidated  Businesses and related to or arising out of
the transactions  contemplated hereby or by any of the other Loan Documents; and
(iv) in taking any other  action in or with  respect  to any suit or  proceeding
(bankruptcy or otherwise) described in clauses (i) through (iii) above.

        14.3.   INDEMNITY.  The Borrower further agrees (a) to defend,  protect,
indemnify,  and hold harmless the  Administrative  Agent, the Arrangers and each
and  all of the  Lenders  and  each of  their  respective  officers,  directors,
employees,  attorneys  and agents  (collectively,  the  "INDEMNITEES")  from and
against  any  and all  liabilities,  obligations,  losses  (other  than  loss of
profits),  damages,  penalties,  actions,  judgments,  suits, claims, reasonable
costs, reasonable expenses and reasonable disbursements (excluding any taxes and
including,  without limitation, the reasonable fees and disbursements of counsel
for such  Indemnitees in connection with any  investigative,  administrative  or
judicial proceeding, whether or not such Indemnitees shall be designated a party
thereto),  imposed on, incurred by, or asserted  against such Indemnitees in any
manner  relating  to or  arising  out of (i) this  Agreement  or the other  Loan
Documents,  the making of the Loans and the  issuance  of and  participation  in
Letters of Credit  hereunder,  the use or  intended  use of the  proceeds of the
Loans  or  Letters  of  Credit  hereunder,  or  any of  the  other  transactions
contemplated by the Loan  Documents,  or (ii) any Liabilities and Costs relating
to violation of any  Environmental,  Health or Safety  Requirements  of Law, the
past, present or future

                                      -92-
<PAGE>


operations of the Borrower,  any of its  Subsidiaries or any of their respective
predecessors in interest, or, the past, present or future environmental,  health
or safety  condition  of any  respective  Property of the Borrower or any of its
Subsidiaries,  the presence of  asbestos-containing  materials at any respective
Property  of  the  Borrower  or  any of its  Subsidiaries,  or  the  Release  or
threatened  Release of any Contaminant into the environment  (collectively,  the
"INDEMNIFIED MATTERS"); PROVIDED, HOWEVER, the Borrower shall have no obligation
to an Indemnitee  hereunder  with respect to  Indemnified  Matters  caused by or
resulting from the willful misconduct or gross negligence of such Indemnitee, as
determined  by a court  of  competent  jurisdiction  in a  non-appealable  final
judgment;  and PROVIDED  FURTHER that payment of the costs of preparation of the
Loan  Documents  shall be governed  by Section  14.2(a)  hereof;  and (b) not to
assert any claim against any of the Indemnitees, on any theory of liability, for
consequential  or punitive  damages  arising out of, or in any way in connection
with, the Revolving Credit  Commitments,  the Obligations,  or the other matters
governed by this Agreement and the other Loan Documents.  To the extent that the
undertaking  to  indemnify,  pay and hold  harmless  set forth in the  preceding
sentence  may be  unenforceable  because  it is  violative  of any law or public
policy,  the Borrower shall contribute the maximum portion which it is permitted
to pay and satisfy under  applicable law, to the payment and satisfaction of all
Indemnified Matters incurred by the Indemnitees.

        14.4.   CHANGE IN ACCOUNTING PRINCIPLES. If any change in the accounting
principles  used in the  preparation  of the most  recent  financial  statements
referred to in Sections  8.1 or 8.2 are  hereafter  required or permitted by the
rules,  regulations,  pronouncements  and opinions of the  Financial  Accounting
Standards Board or the American  Institute of Certified  Public  Accountants (or
successors  thereto or agencies with similar  functions)  and are adopted by the
Company or the Borrower as  applicable,  with the  agreement of its  independent
certified  public  accountants and such changes result in a change in the method
of calculation  of any of the covenants,  standards or terms found in Article X,
the  parties  hereto  agree to enter  into  negotiations  in order to amend such
provisions so as to equitably  reflect such changes with the desired result that
the criteria for evaluating compliance with such covenants,  standards and terms
by the Borrower  shall be the same after such changes as if such changes had not
been made; PROVIDED,  HOWEVER, no change in GAAP that would affect the method of
calculation of any of the covenants, standards or terms shall be given effect in
such calculations until such provisions are amended, in a manner satisfactory to
the  Administrative  Agent  and the  Borrower,  to so  reflect  such  change  in
accounting principles.

        14.5.   INTENTIONALLY OMITTED.

        14.6.   RATABLE  SHARING.  The Lenders agree among  themselves  that (i)
with respect to all amounts received by them which are applicable to the payment
of the  Obligations  (excluding  the  repayment  of  Competitive  Bid Loans to a
particular  Competitive  Bid  Lender  and the  costs,  fees and  other  payments
described in Sections  3.1(g),  5.2(f),  and 5.3, Article XIII and Section 14.1)
equitable  adjustment will be made so that, in effect,  all such amounts will be
shared among them  ratably in  accordance  with their Pro Rata  Shares,  whether
received  by  voluntary  payment,  by the  exercise  of the  right of  setoff or
banker's lien, by  counterclaim  or cross-action or by the enforcement of any or
all of the  Obligations  (excluding the repayment of Competitive  Bid Loans to a
particular  Competitive  Bid  Lender  and the  costs,  fees and  other  payments
described in Sections 3.1(g),  5.2(f),  and 5.3, Article XIII and Section 14.1),
(ii) if any of them shall by  voluntary  payment or by the exercise of any right
of  counterclaim,  setoff,  banker's  lien or  otherwise,  receive  payment of a
proportion  of the  aggregate  amount of the  Obligations  held by it,  which is
greater than the amount which such Lender is entitled to receive hereunder,  the
Lender  receiving  such  excess  payment  shall  purchase,  without  recourse or
warranty, an undivided interest

                                      -93-
<PAGE>


and participation (which it shall be deemed to have done simultaneously upon the
receipt of such payment) in such Obligations owed to the others so that all such
recoveries  with  respect  to such  obligations  shall  be  applied  ratably  in
accordance with their Pro Rata Shares; PROVIDED, HOWEVER, that if all or part of
such excess  payment  received by the purchasing  party is thereafter  recovered
from it, those  purchases  shall be rescinded  and the purchase  prices paid for
such  participations  shall be returned to such party to the extent necessary to
adjust  for such  recovery,  but  without  interest  except  to the  extent  the
purchasing  party is required to pay interest in connection  with such recovery.
The Borrower agrees that any Lender so purchasing a  participation  from another
Lender  pursuant to this  Section 14.6 may, to the fullest  extent  permitted by
law,  exercise all its rights of payment with respect to such  participation  as
fully as if such Lender were the direct  creditor of the  Borrower in the amount
of such participation.

        14.7.   AMENDMENTS AND WAIVERS.

                (a)     GENERAL  PROVISIONS.  Unless  otherwise  provided for or
required in this  Agreement,  no amendment or  modification  of any provision of
this Agreement or any of the other Loan Documents shall be effective without the
written  agreement of the Requisite  Lenders (which the Requisite  Lenders shall
have the right to grant or withhold in their sole  discretion) and the Borrower;
PROVIDED,  HOWEVER,  that the Borrower's agreement shall not be required for any
amendment  or  modification  of Sections  12.1  through 12.8 (other than Section
12.7). In the event that the Administrative Agent shall request the agreement of
the Lenders to any amendment,  modification or waiver,  if any Lender shall fail
to respond to any such request  within  fifteen (15) days after  receipt of such
request,  such  Lender's  approval  thereto  shall be deemed to have been given;
PROVIDED,  HOWEVER,  that such  request  shall  state,  in capital  letters that
"FAILURE TO RESPOND TO THIS  REQUEST  WITHIN  FIFTEEN  (15) DAYS AFTER  RECEIPT,
SHALL BE DEEMED  CONSENT TO THE ENCLOSED  REQUEST".  No termination or waiver of
any provision of this Agreement or any of the other Loan  Documents,  or consent
to any  departure by the  Borrower  therefrom,  shall be  effective  without the
written or deemed  concurrence  of the  Requisite  Lenders,  which the Requisite
Lenders shall have the right to grant or withhold in their sole discretion.  All
amendments, waivers and consents not specifically reserved to the Administrative
Agent,  the Arrangers or the Lenders in Section 14.7(b),  14.7(c),  and in other
provisions  of this  Agreement  shall require only the approval of the Requisite
Lenders.  Any waiver or consent shall be effective only in the specific instance
and for the specific  purpose for which it was given.  No notice to or demand on
the  Borrower  in any case shall  entitle  the  Borrower to any other or further
notice  or  demand  in  similar  or  other  circumstances.  Notwithstanding  the
foregoing,  no amendment,  waiver or consent shall, unless in writing and signed
by the Designating Lender on behalf of its Designated Bank affected thereby, (a)
subject  such  Designated  Bank to any  additional  obligations,  (b) reduce the
principal of,  interest on, or other amounts due with respect to, the Designated
Bank Note made payable to such  Designated  Bank, or (c) postpone any date fixed
for any  payment of  principal  of, or  interest  on, or other  amounts due with
respect to the Designated Bank Note made payable to the Designated Bank.

                (b)     AMENDMENTS,  CONSENTS  AND WAIVERS BY AFFECTED  LENDERS.
Any amendment, modification,  termination, waiver or consent with respect to any
of the  following  provisions  of this  Agreement  shall be effective  only by a
written agreement, signed by each Lender affected thereby as described below:

        (i)     waiver of any of the  conditions  specified  in Sections 6.1 and
        6.2 (except with respect to a condition based upon another  provision of
        this Agreement, the waiver of which requires only the concurrence of the
        Requisite Lenders),

                                      -94-
<PAGE>


        (ii)    change the amount of such Lender's  Revolving Credit  Commitment
        (other than pursuant to an assignment  permitted under Section 14.1 or a
        reduction of the  Revolving  Credit  Commitments  by the Borrower  under
        Section 4.1(b)),

        (iii)   reduction of the principal of, or the rate or amount of interest
        on,  the Loans or the  Reimbursement  Obligations,  or any fees or other
        amounts  payable to such Lender (other than by the payment or prepayment
        thereof), and

        (iv)    postponement  or extension of any date (other than the Revolving
        Credit  Termination Date  postponement or extension of which is governed
        by  Section  14.7(c)(i))  fixed  for any  payment  of  principal  of, or
        interest on, the Loans or the  Reimbursement  Obligations or any fees or
        other  amounts  payable  to such  Lender  (except  with  respect  to any
        modifications of the application  provisions  relating to prepayments of
        Loans and other Obligations which are governed by Section 4.2(b)).

                (c)     AMENDMENTS,  CONSENTS  AND WAIVERS BY ALL  LENDERS.  Any
amendment,  modification,  termination, waiver or consent with respect to any of
the following  provisions of this Agreement shall be effective only by a written
agreement, signed by each Lender:

        (i)     postponement of the Revolving  Credit  Termination  Date (except
        for the one-year extension thereof as provided in the second sentence of
        the definition  thereof),  or increase in the Maximum  Revolving  Credit
        Amount to any amount in excess of $500,000,000, except for the increases
        thereof to an amount not to exceed  $750,000,000  as provided in Section
        2.1(b);

        (ii)    change  in  the  definition  of  Requisite  Lenders  or  in  the
        aggregate  Pro Rata Share of the Lenders which shall be required for the
        Lenders or any of them to take action  hereunder or under the other Loan
        Documents,

        (iii)   amendment of Section 14.6 or this Section 14.7,

        (iv)    assignment  of any right or interest in or under this  Agreement
        or any of the other Loan Documents by the Borrower,

        (v)     waiver of any Event of Default  under Section  11.1(a),  Section
        11.1(f) or Section 11.1(g), and

        (vi)    amendment  or release of the  Guaranties,  except in  connection
        with the permitted sale of an Unencumbered  Project or Unencumbered  New
        York City Asset by a Guarantor.

                (d)     ADMINISTRATIVE  AGENT  AUTHORITY.  Subject to the second
succeeding  sentence of this subsection (d), the  Administrative  Agent may, but
shall have no obligation to, with the written concurrence of any Lender, execute
amendments,  modifications,  waivers  or  consents  on  behalf  of that  Lender.
Notwithstanding  anything to the contrary  contained in this  Section  14.7,  no
amendment,  modification, waiver or consent shall affect the rights or duties of
the  Administrative  Agent under this  Agreement  and the other Loan  Documents,
unless made in writing and signed by the Administrative Agent in addition to the
Lenders required above to take such action.  Notwithstanding  anything herein to
the contrary,  in the event that the Borrower shall

                                      -95-
<PAGE>


have requested, in writing, that any Lender agree to an amendment, modification,
waiver or consent with respect to any particular provision or provisions of this
Agreement  or the other Loan  Documents,  and such  Lender  shall have failed to
state, in writing,  that it either agrees or disagrees (in full or in part) with
all such  requests  (in the  case of its  statement  of  agreement,  subject  to
satisfactory  documentation  and such other  conditions  it may specify)  within
fifteen  (15) days after  such  request,  then such  Lender  hereby  irrevocably
authorizes the  Administrative  Agent to agree or disagree,  in full or in part,
and in the Administrative Agent's sole discretion, to such requests on behalf of
such  Lender as such  Lender's  attorney-in-fact  and to execute and deliver any
writing approved by the  Administrative  Agent which evidences such agreement as
such Lender's duly authorized agent for such purposes;  PROVIDED,  HOWEVER, that
such request  shall state,  in capital  letters that "FAILURE TO RESPOND TO THIS
REQUEST WITHIN FIFTEEN (15) DAYS AFTER RECEIPT, SHALL BE DEEMED AUTHORIZATION TO
THE ADMINISTRATIVE AGENT WITH RESPECT TO THE ENCLOSED REQUEST".

        14.8.   NOTICES.  Unless otherwise  specifically  provided  herein,  any
notice or other communication  herein required or permitted to be given shall be
in writing and may be personally  served,  sent by facsimile  transmission or by
courier service or United States certified mail and shall be deemed to have been
given  when  delivered  in person  or by  courier  service,  upon  receipt  of a
facsimile  transmission,  or four (4) Business  Days after deposit in the United
States  mail  with  postage  prepaid  and  properly  addressed.  Notices  to the
Administrative  Agent  pursuant to Articles II, IV or XII shall not be effective
until  received  by the  Administrative  Agent.  For the  purposes  hereof,  the
addresses of the parties  hereto (until notice of a change  thereof is delivered
as provided in this Section 14.8) shall be (i) for the Borrower, as set forth on
its signature page to this Agreement,  and (ii) for the Lenders, as set forth on
SCHEDULE LC hereto or on the applicable  Assignment and Acceptance by which such
party became a Lender hereunder,  or, as to each party, at such other address as
may be designated by such party in a written  notice to all of the other parties
to this Agreement.

        14.9.   SURVIVAL OF WARRANTIES AND AGREEMENTS.  All  representations and
warranties  made herein and all obligations of the Borrower in respect of taxes,
indemnification  and  expense  reimbursement  shall  survive the  execution  and
delivery  of this  Agreement  and the  other  Loan  Documents,  the  making  and
repayment  of the  Loans,  the  issuance  and  discharge  of  Letters  of Credit
hereunder  and,  in the case of any Lender  that may assign any  interest in its
Revolving  Credit  Commitment,  Loans or  participation  interests in Letters of
Credit hereunder,  shall survive the making of such assignment,  notwithstanding
that such assigning Lender may cease to be a "Lender" hereunder, and, except for
the representations and warranties, the termination of this Agreement other than
any of the  foregoing  set forth in Section 13.1 or Section 13.2 or Section 13.3
or Section 5.2(f), which shall survive for thirty (30) days after termination of
this Agreement.

        14.10.  FAILURE  OR  INDULGENCE  NOT  WAIVER;  REMEDIES  CUMULATIVE.  No
failure  or delay on the part of the  Administrative  Agent or any Lender in the
exercise of any power,  right or privilege under any of the Loan Documents shall
impair such power,  right or  privilege  or be  construed  to be a waiver of any
default or acquiescence therein, nor shall any single or partial exercise of any
such power, right or privilege preclude any other or further exercise thereof or
of any other right,  power or privilege.  All rights and remedies existing under
the Loan Documents are cumulative to and not exclusive of any rights or remedies
otherwise available.

        14.11.  PAYMENTS  SET ASIDE.  To the extent  that the  Borrower  makes a
payment or payments to the  Administrative  Agent, any Arranger or any Lender or
any such Person exercises

                                      -96-
<PAGE>


its rights of setoff,  and such  payment or  payments  or the  proceeds  of such
enforcement or setoff 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, then to the extent of such recovery,  the
obligation or part thereof  originally  intended to be satisfied,  and all right
and remedies  therefor,  shall be revived and continued in full force and effect
as if such  payment  had not been made or such  enforcement  or  setoff  had not
occurred.

        14.12.  SEVERABILITY.  In case any provision in or obligation under this
Agreement or the other Loan Documents shall be invalid, illegal or unenforceable
in any jurisdiction,  the validity, legality and enforceability of the remaining
provisions  or  obligations,  or of such  provision or  obligation  in any other
jurisdiction, shall not in any way be affected or impaired thereby.

        14.13.  HEADINGS. Section headings in this Agreement are included herein
for  convenience  of  reference  only and  shall not  constitute  a part of this
Agreement or be given any substantive effect.

        14.14.  GOVERNING  LAW. THIS  AGREEMENT  SHALL BE  INTERPRETED,  AND THE
RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED,  IN ACCORDANCE WITH THE
INTERNAL  LAWS OF THE STATE OF NEW YORK  WITHOUT  REGARD TO ITS CONFLICT OF LAWS
PRINCIPLES.

        14.15.  LIMITATION OF LIABILITY. No claim may be made by any Lender, any
Arranger,  the  Administrative  Agent,  or any other  Person  against any Lender
(acting in any  capacity  hereunder)  or the  Affiliates,  directors,  officers,
employees,  attorneys or agents of any of them for any consequential or punitive
damages in respect of any claim for breach of  contract  or any other  theory of
liability  arising out of or related to the  transactions  contemplated  by this
Agreement, or any act, omission or event occurring in connection therewith;  and
each Lender, the Arrangers and the Administrative Agent hereby waives,  releases
and agrees not to sue upon any such claim for any such  damages,  whether or not
accrued and whether or not known or suspected to exist in its favor.

        14.16.  SUCCESSORS  AND  ASSIGNS.  This  Agreement  and the  other  Loan
Documents  shall be  binding  upon  the  parties  hereto  and  their  respective
successors  and assigns and shall inure to the benefit of the parties hereto and
the  successors  and  permitted  assigns  of the  Lenders.  Except as  otherwise
provided in Section 10.6, the rights and obligations  hereunder of the Borrower,
or any interest therein,  may not be assigned without the written consent of all
Lenders (and any such  attempted  assignment  without such consent shall be null
and void).

        14.17.  CERTAIN CONSENTS AND WAIVERS OF THE BORROWER.

                (a)     Personal  Jurisdiction.  (i)  EACH  OF THE  AGENTS,  THE
LENDERS,  AND THE BORROWER  IRREVOCABLY AND UNCONDITIONALLY  SUBMITS, FOR ITSELF
AND ITS PROPERTY,  TO THE NONEXCLUSIVE  JURISDICTION OF ANY NEW YORK STATE COURT
OR  FEDERAL  COURT  SITTING  IN  NEW  YORK,  NEW  YORK,  AND  ANY  COURT  HAVING
JURISDICTION  OVER  APPEALS OF MATTERS  HEARD IN SUCH  COURTS,  IN ANY ACTION OR
PROCEEDING  ARISING OUT OF,  CONNECTED  WITH,  RELATED TO OR  INCIDENTAL  TO THE
RELATIONSHIP  ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT,  WHETHER
ARISING  IN  CONTRACT,   TORT,  EQUITY  OR  OTHERWISE,  OR  FOR  RECOGNITION  OR
ENFORCEMENT  OF ANY JUDGMENT,  AND EACH OF THE PARTIES  HERETO

                                      -97-
<PAGE>


IRREVOCABLY  AND  UNCONDITIONALLY  AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING  MAY BE HEARD AND DETERMINED IN SUCH STATE COURT OR, TO THE
EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF THE AGENTS,  THE LENDERS
AND THE BORROWER  AGREES THAT A FINAL  JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE  AND MAY BE ENFORCED IN OTHER  JURISDICTIONS  BY SUIT ON THE
JUDGMENT  OR IN ANY  OTHER  MANNER  PROVIDED  BY LAW.  EACH OF THE  AGENTS,  THE
LENDERS,  AND THE BORROWER WAIVES IN ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE
TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.

                (ii)    THE BORROWER AGREES THAT THE ADMINISTRATIVE  AGENT SHALL
HAVE THE RIGHT TO PROCEED AGAINST THE BORROWER OR ITS PROPERTY IN A COURT IN ANY
LOCATION  NECESSARY OR  APPROPRIATE TO ENABLE THE  ADMINISTRATIVE  AGENT AND THE
LENDERS TO  ENFORCE A  JUDGMENT  OR OTHER  COURT  ORDER  ENTERED IN FAVOR OF THE
ADMINISTRATIVE  AGENT OR ANY LENDER.  THE BORROWER  WAIVES ANY OBJECTION THAT IT
MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE  ADMINISTRATIVE  AGENT OR ANY
LENDER MAY COMMENCE A PROCEEDING DESCRIBED IN THIS SECTION.

                (b)     SERVICE OF PROCESS. THE BORROWER IRREVOCABLY CONSENTS TO
THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES  THEREOF BY  REGISTERED  OR CERTIFIED  MAIL,
POSTAGE  PREPAID,  TO THE  BORROWER'S  PROCESS  AGENT OR THE  BORROWER'S  NOTICE
ADDRESS SPECIFIED IN SECTION 14.8 HEREOF,  SUCH SERVICE TO BECOME EFFECTIVE UPON
RECEIPT.  THE BORROWER  IRREVOCABLY  WAIVES ANY  OBJECTION  (INCLUDING,  WITHOUT
LIMITATION,  ANY  OBJECTION  OF THE  LAYING OF VENUE OR BASED ON THE  GROUNDS OF
FORUM NON CONVENIENS)  WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
SUCH  ACTION OR  PROCEEDING  WITH  RESPECT TO THIS  AGREEMENT  OR ANY OTHER LOAN
DOCUMENT IN ANY  JURISDICTION  SET FORTH ABOVE.  NOTHING HEREIN SHALL AFFECT THE
RIGHT TO SERVE  PROCESS IN ANY OTHER MANNER  PERMITTED BY LAW OR SHALL LIMIT THE
RIGHT OF THE  ADMINISTRATIVE  AGENT OR THE LENDERS TO BRING PROCEEDINGS  AGAINST
THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.

                (c)     WAIVER OF JURY TRIAL. EACH OF THE AGENTS AND THE LENDERS
AND THE BORROWER  IRREVOCABLY  WAIVES TRIAL BY JURY IN ANY ACTION OR  PROCEEDING
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.

        14.18.  COUNTERPARTS; EFFECTIVENESS; INCONSISTENCIES. This Agreement and
any  amendments,  waivers,  consents,  or supplements  hereto may be executed in
counterparts,  each of which when so executed and  delivered  shall be deemed an
original,  but all such  counterparts  together shall constitute but one and the
same instrument.  This Agreement shall become effective against the Borrower and
each Agent and Lender on the Closing Date.  This Agreement and each of the other
Loan Documents shall be construed to the extent  reasonable to be consistent one
with  the  other,  but to the  extent  that the  terms  and  conditions  of this
Agreement are actually

                                      -98-
<PAGE>


inconsistent  with the terms and  conditions  of any other Loan  Document,  this
Agreement shall govern.

        14.19.  LIMITATION ON AGREEMENTS.  All agreements  between the Borrower,
the  Administrative  Agent,  the Arrangers and each Lender in the Loan Documents
are hereby expressly limited so that in no event shall any of the Loans or other
amounts  payable by the Borrower  under any of the Loan Documents be directly or
indirectly secured (within the meaning of Regulation U) by Margin Stock.

        14.20.  DISCLAIMERS.  The  Administrative  Agent,  the Arrangers and the
Lenders shall not be liable to any contractor, subcontractor, supplier, laborer,
architect,  engineer,  tenant or other party for services performed or materials
supplied in connection with any work performed on the Projects, including any TI
Work.  The  Administrative  Agent,  the  Arrangers  and the Lenders shall not be
liable for any debts or claims accruing in favor of any such parties against the
Borrower or others or against any of the Projects. The Borrower is not and shall
not be an agent of any Agent,  the Arrangers or the Lenders for any purposes and
none of the Lenders,  the Arrangers,  or the Agents shall be deemed  partners or
joint venturers with Borrower.  None of the Administrative  Agent, the Arrangers
or the Lenders shall be deemed to be in privity of contract with any  contractor
or provider of services to any Project,  nor shall any payment of funds directly
to a contractor or subcontractor or provider of services be deemed to create any
third  party   beneficiary   status  or  recognition  of  same  by  any  of  the
Administrative  Agent,  the Arrangers or the Lenders and the Borrower  agrees to
hold the  Administrative  Agent, the Arrangers and the Lenders harmless from any
of  the  damages  and  expenses  resulting  from  such  a  construction  of  the
relationship of the parties or any assertion thereof.

        14.21.  ENTIRE AGREEMENT. This Agreement, taken together with all of the
other Loan Documents,  embodies the entire agreement and understanding among the
parties hereto and supersedes all prior agreements and  understandings,  written
and oral, relating to the subject matter hereof.

        14.22.  CONFIDENTIALITY.  Each  of the  Agents,  the  Arrangers  and the
Lenders agrees to keep confidential all non-public information provided to it by
the Borrower  pursuant to this  Agreement  that is designated by the Borrower as
confidential;  PROVIDED  that  nothing  herein  shall  prevent the Agents or the
Lenders from disclosing any such information (a) to the Agents, any other Lender
or any Lender  Affiliate  (PROVIDED  such Lender  Affiliate is made aware of the
confidentiality  of  such  information  and  agrees  to  keep  such  information
confidential),  (b) to any  Assignee,  Participant  or  prospective  Assignee or
Participant or any actual or prospective  counterparty  (or its advisors) to any
swap or  derivative  transactions  relating to the Borrower and its  Obligations
(PROVIDED such Person is made aware of the  confidentiality  of such information
and  agrees  to  keep  such  information  confidential),  (c) to the  employees,
directors, agents, attorneys, accountants and other professional advisors of any
Lender,  Assignee,  Participant,  prospective  Assignee or  Participant  who are
advised of the provisions of this Section, (d) upon the request or demand of any
Governmental Authority having or asserting jurisdiction over either Agent or any
Lender,  (e) in  response  to any  order  of any  court  or  other  Governmental
Authority or as may otherwise be required  pursuant to any  Requirement  of Law,
(f) if  requested  or required to do so in  connection  with the exercise of any
remedy  hereunder  or under  any other  Loan  Document,  (g) upon the  advice of
counsel  that such  disclosure  is required by law,  (h) with the consent of the
Borrower,  (i) in connection with any litigation to which any Agent, Arranger or
Lender  is a party,  or (j) to the  extent  such  information  becomes  publicly
available  other than as a

                                      -99-
<PAGE>


result of a breach of this  Section  14.22 or  becomes  available  to any Agent,
Arranger  or Lender on a  nonconfidential  basis  from a source  other  than the
Borrower.

        14.23.  NO   BANKRUPTCY   PROCEEDINGS.   Each   of  the   Borrower   the
Administrative Agent, the Documentation  Agents, the Co-Agents,  the Syndication
Agent and the  Lenders  hereby  agrees  that it will not  institute  against any
Designated  Bank or join any other Person in instituting  against any Designated
Bank any  bankruptcy,  reorganization,  arrangement,  insolvency or  liquidation
proceeding under any federal or state bankruptcy or similar law, until the later
to occur of (i) one year and one day after  the  payment  in full of the  latest
maturing  commercial  paper  note  issued by such  Designated  Bank and (ii) the
Revolving Credit Termination Date.

        14.24.  USA PATRIOT ACT. Each of the Lenders  hereby  notifies  Borrower
that  pursuant  to the  requirements  of  the  USA  Patriot  Act  (Title  III of
Pub.L.107-56  (signed into law October 26, 2001)) (the "ACT"), it is required to
obtain,   verify  and  record  information  that  identifies   Borrower,   which
information includes the name and address of Borrower and other information that
will allow such Bank to identify  Borrower in accordance  with the Act.  Neither
the  execution  and  delivery of the Notes and the other Loan  Documents  by the
Borrower nor the use of the proceeds of the Loans, will violate the Trading with
the Enemy Act, as amended,  or any of the foreign assets control  regulations of
the  United  States  Treasury  Department  (31 CFR,  Subtitle  B,  Chapter V, as
amended) or the  Anti-Terrorism  Order or any enabling  legislation or executive
order  relating  to any of the same.  Without  limiting  the  generality  of the
foregoing,  none of the  Borrower,  the  Company,  nor any of  their  respective
Subsidiaries  (a) is or will become a blocked  person  described in Section 1 of
the  Anti-Terrorism  Order or (b)  engages  or will  engage in any  dealings  or
transactions  or be otherwise  associated  with any such  blocked  person in any
manner which violates applicable law or regulation.

        14.25.  TRANSITIONAL ARRANGEMENTS.

                (a)     2002 CREDIT AGREEMENT  SUPERSEDED.  This Agreement shall
supersede the 2002 Credit Agreement in its entirety,  except as provided in this
Section 14.25.  On the Closing Date,  the rights and  obligations of the parties
under  the 2002  Credit  Agreement  and the  "Notes"  defined  therein  shall be
subsumed  within and be  governed  by this  Agreement  and the  Notes;  PROVIDED
HOWEVER,  that any of the "Revolving Credit Obligations" (as defined in the 2002
Credit  Agreement)  outstanding  under  the 2002  Credit  Agreement  shall,  for
purposes of this  Agreement,  be Revolving  Credit  Obligations  hereunder.  The
Lenders' interests in such Revolving Credit  Obligations,  and participations in
such Letters of Credit shall be  reallocated  on the Closing Date in  accordance
with each Lender's applicable Pro Rata Share.

                (b)     RETURN AND  CANCELLATION  OF NOTES.  Upon its receipt of
the Revolving  Credit Notes to be delivered  hereunder on the Closing Date, each
Lender will promptly return to the Borrower,  marked  "Cancelled" or "Replaced",
the  notes of the  Borrower  held by such  Lender  pursuant  to the 2002  Credit
Agreement.

                (c)     INTEREST AND FEES UNDER ORIGINAL AGREEMENT. All interest
and all commitment, facility and other fees and expenses owing or accruing under
or in respect of the 2002 Credit Agreement shall be calculated as of the Closing
Date (prorated in the case of any fractional periods),  and shall be paid on the
Closing  Date in  accordance  with  the  method  specified  in the  2002  Credit
Agreement as if such agreement were still in effect.

     [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK--SIGNATURE PAGES TO FOLLOW]

                                     -100-
<PAGE>


        IN WITNESS WHEREOF the undersigned  have duly executed this Agreement as
a sealed instrument as of the date first set forth above.

                                    BORROWER:
                                    ---------

                                    RECKSON OPERATING PARTNERSHIP, L.P.

                                    By:     Reckson Associates Realty Corp.


                                    By:  /s/ Michael Maturo
                                         ---------------------------------------
                                         Name:  Michael Maturo
                                         Title: Executive Vice President and CFO

                                    Address for Notices:

                                    225 Broadhollow Road
                                    Melville, New York  11747

                                    Attention:  Michael Maturo

                                    Telephone:        631-622-6630
                                    Telecopy:         631-622-8994
                                    Taxpayer Identification Number:  11-3233647

<PAGE>


                                        LENDERS:
                                        --------

                                        [SIGNATURE PAGES OF LENDERS]