Document:

<PAGE>

                                    (Secured)

                               TERM LOAN AGREEMENT

                           dated as of March 30, 2000

                                      among

                       ACADIA REALTY LIMITED PARTNERSHIP,
                                  as Borrower,

                     THE DIME SAVINGS BANK OF NEW YORK, FSB,
                                   as Lender,

                                       and
                     THE DIME SAVINGS BANK OF NEW YORK, FSB,
                             as Administrative Agent

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         TERM LOAN AGREEMENT dated as of March 30, 2000 among ACADIA REALTY
LIMITED PARTNERSHIP, a limited partnership organized and existing under the laws
of the State of Delaware ("Borrower"), THE DIME SAVINGS BANK OF NEW YORK, FSB
(in its individual capacity and not as Administrative Agent, "The Dime"), the
other lenders (if any) signatory hereto and THE DIME SAVINGS BANK OF NEW YORK,
FSB, as administrative agent for Lenders (in such capacity, together with its
successors in such capacity, "Administrative Agent"; The Dime, the other lenders
(if any) signatory hereto and such other lenders who from time to time become
Lenders pursuant to Section 3.07 or 11.05, each a "Lender" and collectively,
"Lenders").

         Borrower desires that Lenders extend credit as provided herein, and
Lenders are prepared to extend such credit. Accordingly, Borrower,
Administrative Agent and each Lender agree as follows:

                                    ARTICLE I

                      DEFINITIONS AND CONSTRUCTION OF TERMS

         Section 1.01 Definitions. As used in this Agreement the following terms
have the following meanings:

         "Additional Costs" has the meaning specified in Section 3.01.

         "Administrative Agent" has the meaning specified in the preamble.

         "Administrative Agent's Office" means Administrative Agent's office
located as set forth on its signature page hereof, or such other address in the
United States as Administrative Agent may designate by notice to Borrower and
Lenders.

         "Affected Lender" has the meaning specified in Section 3.07.

         "Affected Loan" has the meaning specified in Section 3.04.

         "Affiliate" means, with respect to any Person (the "first Person"), any
other Person (1) which directly or indirectly controls, or is controlled by, or
is under common control with the first Person or (2) 10% or more of the
beneficial interest in which is directly or indirectly owned or held by the
first Person. The term "control" means the possession, directly or indirectly,
of the power, alone, to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract, or otherwise.

         "Applicable Interest Rate" shall mean the "LIBOR Based Rate", except as
to all or any portions of the Principal Amount to which the LIBOR Based Rate is
not or cannot pursuant to the terms hereof be applicable, which portions shall
bear interest at the Prime Based Rate in accordance with Section 2.11 of this
Agreement.

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         "Applicable Lending Office" means, for each Lender and for its LIBOR
Loan or Prime Based Loan, as applicable, the lending office of such Lender (or
of an Affiliate of such Lender) designated as such on its signature page hereof
or in the applicable Assignment and Assumption Agreement, or such other office
of such Lender (or of an Affiliate of such Lender) as such Lender may from time
to time specify to Administrative Agent and Borrower as the office by which its
LIBOR Loan or Prime Based Loan, as applicable, is to be made and maintained.

         "Assignee" has the meaning specified in Section 11.05.

         "Assignment and Assumption Agreement" means an Assignment and
Assumption Agreement, substantially in the form of EXHIBIT C, pursuant to which
a Lender assigns and an Assignee assumes rights and obligations in accordance
with Section 11.05.

         "Authorization Letter" means a letter agreement executed by Borrower in
the form of EXHIBIT A.

         "Berlin Shopping Center Property" means the real property owned by
Borrower located in Berlin, New Jersey.

         "Borrower" has the meaning specified in the preamble.

         "Borrower's Accountants" means Ernst & Young, LLP, or such other
accounting firm(s) selected by Borrower and reasonably acceptable to
Administrative Agent.

         "Borrower's Principals" means Acadia Realty Trust, a Maryland real
estate investment trust.

         "Bradford Towne Centre Property" means the real property owned by
Borrower located in Towanda, Pennsylvania.

         "Business Day" means (1) any day on which commercial banks are not
authorized or required to close in New York City and (2) whenever such day
relates to a LIBOR Loan, an Interest Period with respect to a LIBOR Loan, or
notice with respect to a LIBOR Loan, a day on which dealings in Dollar deposits
are also carried out in the London interbank market and banks are open for
business in London.

         "Closing Date" means the date this Agreement has been executed by all
parties.

         "Code" means the Internal Revenue Code of 1986.

         "Debt" means (1) indebtedness or liability for borrowed money, or for
the deferred purchase price of property or services (including trade
obligations), (2) obligations as lessee under Capital Leases, (3) current
liabilities in respect of unfunded vested benefits under any Plan, (4)
obligations under letters of credit issued for the account of any Person, (5)
all obligations arising under bankers' or trade acceptance facilities, (6) all

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guarantees, endorsements (other than for collection or deposit in the ordinary
course of business), and other contingent obligations to purchase any of the
items included in this definition, to provide funds for payment, to supply funds
to invest in any Person, or otherwise to assure a creditor against loss, (7) all
obligations secured by any Lien on property owned by the Person whose Debt is
being measured, whether or not the obligations have been assumed and (8) all
obligations under any agreement providing for contingent participation or other
hedging mechanisms with respect to interest payable on any of the items
described above in this definition.

         "Default" means any event which with the giving of notice or lapse of
time, or both, would become an Event of Default.

         "Default Rate" means a rate per annum equal to (1) with respect to
Prime Based Loans, a variable rate 4% above the rate of interest then in effect
thereon and (2) with respect to LIBOR Loans, a fixed rate 4% above rate(s) of
interest in effect thereon at the time of Default until the end of the then
current Interest Period therefor and, thereafter, a variable rate 4% above the
rate of interest for a Prime Based Loan.

         "Dollars" and the sign I" mean lawful money of the United States.

         "Engineering Consultant" means Cashin Associates, P.C. or other firm
designated by Administrative Agent from time to time for any Property.

         "Environmental Discharge" means any discharge or release of any
Hazardous Materials in violation of any applicable Environmental Law.

         "Environmental Law" means any applicable Law relating to pollution or
the environment, including Laws relating to noise or to emissions, discharges,
releases or threatened releases of Hazardous Materials into the work place, the
community or the environment, or otherwise relating to the generation,
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials.

         "Environmental Notice" means any written complaint, order, citation or
notice from any Person (1) affecting or relating to Borrower's compliance with
any Environmental Law in connection with any activity or operations at any time
conducted by Borrower, (2) relating to (a) the existence of any Hazardous
Materials contamination or Environmental Discharges or threatened Hazardous
Materials contamination or Environmental Discharges at any of Borrower's
locations or facilities or (b) remediation of any Environmental Discharge or
Hazardous Materials at any such location or facility or any part thereof or (3)
relating to any violation or alleged violation by Borrower of any relevant
Environmental Law.

         "ERISA" means the Employee Retirement Income Security Act of 1974,
including the rules and regulations promulgated thereunder.

         "ERISA Affiliate" means any corporation which is a member of the same
controlled group of corporations (within the meaning of Section 414(b) of the
Code) as Borrower, or any trade or business which is under common control
(within the meaning of Section 414(c) of the Code) with Borrower, or any
organization which is required to be treated as a single employer with Borrower
under Section 414(m) or 414(o) of the Code.

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         "Event of Default" has the meaning specified in Section 8.01.

         "Extended Maturity Date" means April 1, 2006.

         "Federal Funds Rate" shall mean for any day, the rate per annum equal
to the weighted average of the rates on overnight Federal funds transactions as
published by the Federal Reserve Bank of New York for such day or, for any day
that is not a banking day in New York City, for the immediately preceding
banking day.

         "GAAP" means generally accepted accounting principles in the United
States as in effect from time to time, consistently applied.

         "Good Faith Contest" means the contest of an item if (1) the item is
diligently contested in good faith, and, if appropriate, by proceedings timely
instituted, (2) adequate reserves are established with respect to the contested
item, (3) during the period of such contest, the enforcement of any contested
item is effectively stayed and (4) the failure to pay or comply with the
contested item during the period of the contest is not likely to (x) result in a
Material Adverse Change or (y) have an adverse effect on the Mortgaged Property
under any Mortgage or any part thereof, or on Lenders' interest therein.

         "Governmental Approvals" means any authorization, consent, approval,
license, permit, certification, or exemption of, registration or filing with or
report or notice to, any Governmental Authority.

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

         "Hazardous Materials" means any pollutant, effluents, emissions,
contaminants, toxic or hazardous wastes or substances, as any of those terms are
defined from time to time in or for the purposes of any relevant Environmental
Law, including asbestos fibers and friable asbestos, polychlorinated biphenyls,
and any petroleum or hydrocarbon-based products or derivatives.

         "Improvements" means, for each Property, all improvements now or
hereafter located on such Property.

         "Indemnity" means, for each Property, an agreement from Borrower and
Borrower's Principals whereby, among other things, Lenders and Administrative
Agent are indemnified regarding Hazardous Materials.

         "Interest Period" means, with respect to any LIBOR Loan, the period
commencing on the first day of the month in which same is advanced, and ending
on the last day of such calendar month. In the event the Note is dated other

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than the first day of a month, the first interest period shall run from the date
of the Note to the last day of the calendar month and the LIBOR Rate shall be
set as of the date of the Note. In the event additional funds are advanced
during an Interest Period such funds shall bear interest at the rate in effect
at the commencement of the Interest Period during which such advance is made.

         "Law" means any federal, state or local statute, law, rule, regulation,
ordinance, order, code, or rule of common law, now or hereafter in effect, and
any judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment.

         "Ledgewood Mall Property" means the real property located in Ledgewood,
New Jersey.

         "Lender" and "Lenders" have the respective meanings specified in the
preamble.

         "Lender Reply Period" has the meaning specified in Section 11.02.

         "LIBOR Based Rate" shall mean, the rate per annum (expressed as a
percentage) determined by Administrative Agent to be equal to the sum of (a) the
quotient of the LIBOR Rate and Interest Period in question divided by 1 minus
the LIBOR Reserve Requirement (rounded up to the nearest 1/100 of 1 %) and (b)
 .0 175.

         "LIBOR Rate" shall mean the thirty (30) day rate (rounded up to the
nearest 1/16 of 1%) which appears on Page 3750 of the Telerate service (or such
other page of such service containing the rate information now found on said
Page 3750, or in the event Telerate ceases to provide such information, any
successor or other service providing such information) at approximately 11:00
a.m. (London time) on the first Business Day of the applicable Interest Period,
for deposits in immediately available funds, in lawful money of the United
States, of amounts comparable to the LIBOR Loan in question for the same period
of time as the Interest Period, all of the foregoing to be as determined by
Administrative Agent in its sole discretion.

         "LIBOR Loan" means all or any portion (as the context requires) of any
Lender's Loan which shall accrue interest at rate determined in relation to
LIBOR Rate.

         "LIBOR Reserve Requirement" means, for any LIBOR Loan, the average
maximum rate at which reserves (including any marginal, supplemental or
emergency reserves) are required to be maintained under Regulation D by member
banks of the Federal Reserve System in New York City with deposits exceeding one
billion U.S. Dollars against "Euro-Currency Liabilities", as such quoted term is
used in Regulation D. Without limiting the effect of the foregoing, the LIBOR
Reserve Requirement shall reflect any other reserves required to be maintained
by such member banks by reason of any Regulatory Change against (a) any category
of liabilities which includes deposits by reference to which the LIBOR Rate is
to be determined as provided in this Agreement or (b) any category of extensions
of credit or other assets which includes loans the interest rate on which is
determined on the basis of rates referred to in the definition of "LIBOR Rate"
set forth above.

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         "Lien" means any mortgage, deed of trust, pledge, security interest,
hypothecation, assignment for collateral purposes, deposit arrangement, lien
(statutory or other), or other security agreement or charge of any kind or
nature whatsoever of any third party (excluding any right of setoff but
including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing, and the filing of any financing statement under the
Uniform Commercial Code or comparable Law of any jurisdiction to evidence any of
the foregoing).

         "Loan" and "Loans" have the respective meanings specified in Section
2.01.

         "Loan Allocation" (i) $31,750,000 with respect to the Ledgewood Mall
Property, (ii) $5,000,000 with respect to the Berlin Shopping Center Property,
(iii) $8,750,000 with respect to the Bradford Towne Property, (iv) $6,000,000
with respect to the Route 6 Mall Property and (v) $7,500,000 with respect to the
New Louden Center Property.

         "Loan Commitment" means, with respect to each Lender, the obligation to
make a Loan in the principal amount set forth below (subject to change in
accordance with the terms of this Agreement):

--------------------------------------------------------------------------------
Lender                                                   Loan Commitment
--------------------------------------------------------------------------------
The Dime                                                 $59,000,000
--------------------------------------------------------------------------------

         "Loan Documents" means this Agreement, the Notes, the Mortgage and
related Uniform Commercial Code financing statements for each Property, the
Indemnity for each Property, the Authorization Letter and the Solvency
Certificate.

         "Major Lease" means any lease demising 10,000 square feet of gross
leasable area or more of the Improvements on any Property.

         "Majority Lenders" means, at any time, those Lenders having Pro Rata
Shares aggregating greater than 50%; provided, however, that during the
existence of an Event of Default, the "Majority Lenders" shall be those Lenders
holding greater than 66 2/3 of the then aggregate unpaid principal amount of the
Loans.

         "Material Adverse Change" means either (1) a material adverse change in
the status of the business, results of operations, financial condition, property
or prospects of Borrower or (2) any event or occurrence of whatever nature which
is likely to (x) have a material adverse effect on the ability of Borrower to
perform its obligations under the Loan Documents or (y) create, in the sole and
absolute judgment (reasonably exercised) of Administrative Agent, a material
risk of sale or forfeiture of any of the Mortgaged Property (other than an
immaterial portion thereof) under any Mortgage or otherwise materially impair
any of the Mortgaged Property under any Mortgage or Lenders' rights therein.

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         "Maturity Date" means April 1, 2005.

         "Mortgage" means, for each Property, the Mortgage (or Deed of Trust),
Assignment of Leases and Rents and Security Agreement in respect thereof, each
dated the date hereof, from Borrower for the benefit of Administrative Agent, as
agent for Lenders, to secure the payment and performance of Borrower's
obligations hereunder, under the Notes and otherwise in respect of the Loans.

         "Mortgaged Property" means, for each Property, the Property, the
Improvements thereon and all other property constituting the "Mortgaged
Property", as said quoted term is defined in the applicable Mortgage.

         "Multiemployer Plan" means a Plan defined as such in Section 3(37) of
ERISA to which contributions have been made by Borrower or any ERISA Affiliate
and which is covered by Title IV of ERISA.

         "New Louden Center Property" means the real property owned by Borrower
located in Latham, New York.

         "Non-Excluded Taxes" has the meaning specified in Section 11.18.

         "Note" and "Notes" have the respective meanings specified in Section
2.07.

         "Obligations" means each and every obligation, covenant and agreement
of Borrower, now or hereafter existing, contained in this Agreement, and any of
the other Loan Documents, whether for principal, reimbursement obligations,
interest, fees, expenses, indemnities or otherwise, and any amendments or
supplements thereto, extensions or renewals thereof or replacements therefor,
including, but not limited to, all indebtedness, obligations and liabilities of
Borrower to Administrative Agent and any Lender now existing or hereafter
incurred under or arising out of or in connection with the Notes, this
Agreement, the other Loan Documents, and any documents or instruments executed
in connection therewith; in each case whether direct or indirect, joint or
several, absolute or contingent, liquidated or unliquidated, now or hereafter
existing, renewed or restructured, whether or not from time to time decreased or
extinguished and later increased, created or incurred, and including all
indebtedness of Borrower, under any instrument now or hereafter evidencing or
securing any of the foregoing.

         "Parent" means, with respect to any Lender, any Person controlling such
Lender.

         "Participant" and "Participation" have the respective meanings
specified in Section 11.05.

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         "Payor" and "Required Payment" have the respective meanings specified
in Section 9.12.

         "PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.

         "Person" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.

         "Plan" means any employee benefit or other plan established or
maintained, or to which contributions have been made, by Borrower or any ERISA
Affiliate and which is covered by Title IV of ERISA or to which Section 412 of
the Code applies.

         "Premises Documents" means, for each Property, any REA for such
Property and the other "Premises Documents," as such term is defined in the
Mortgage for such Property.

         "presence", when used in connection with any Environmental Discharge or
Hazardous Materials, means and includes presence, generation, manufacture,
installation, treatment, use, storage, handling, repair, encapsulation,
disposal, transportation, spill, discharge and release.

         "Prime Based Rate" shall mean the greater of (a) the Federal Funds Rate
plus one-half of one percent (1/2%) or (b) the prime commercial lending rate as
announced from time to time by The Dime plus one half of one percent (1/2%) per
annum, each change in said rates to be effective as of the date of such change.

         "Prime Based Loan" means all or any portion (as the context requires)
of a Lender's Loan which shall accrue interest at a rate determined in relation
to the Prime Based Rate.

         "Prime Rate" means that rate of interest from time to time announced by
The Dime at its principal office in New York, New York as its prime commercial
lending rate.

         "Principal Amount" means the aggregate principal amount advanced and
outstanding under the Loan(s) from time to time.

         "Property" means, respectively, each of Ledgewood Mall Property, Berlin
Shopping Center Property, Bradford Towne Property, Route 6 Mall Property and New
Louden Center Property.

         "Pro Rata Share" means, for purposes of this Agreement and with respect
to each Lender, a fraction, the numerator of which is the amount of such
Lender's Loan Commitment and the denominator of which is the Total Loan
Commitment.

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         "Prohibited Transaction" means any transaction proscribed by Section
406 of ERISA or Section 4975 of the Code and to which no statutory or
administrative exemption applies.

         "Regulation D" and "Regulation U" mean, respectively, Regulation D and
Regulation U of the Board of Governors of the Federal Reserve System.

         "Regulatory Change" means, with respect to any Lender, any change after
the date of this Agreement in federal, state, municipal or foreign laws or
regulations (including Regulation D) or the adoption or making after such date
of any interpretations, directives or requests applying to a class of lenders
including such Lender of or under any federal, state, municipal or foreign laws
or regulations (whether or not having the force of law) by any court or
governmental or monetary authority charged with the interpretation or
administration thereof

         "Release Price" means (i) $41,275,000 with respect to the Ledgewood
Mall Property, (ii) $5,500,000 with respect to the Berlin Shopping Center
Property, (iii) $9,625,000 with respect to the Bradford Towne Property, (iv)
$6,600,000 with respect to the Route 6 Mall Property and (v) $9,375,000 with
respect to the New Louden Center Property.

         "Relevant Documents" has the meanings specified in Section 10.02.

         "Reportable Event" means any of the events set forth in Section 4043(c)
of ERISA, other than those events as to which the thirty (30) day notice period
is waived under subsections. 13, .14,.16,.18, .19 or .20 of PBGC Reg.ss.2615.

         "Required Lenders" means, at any time, those Lenders having Pro Rata
Shares aggregating more than 50%; provide , however , that during the existence
of an Event of Default, the "Required Lenders" shall be those Lenders holding at
least 66-2/3% of the then aggregate unpaid principal amount of the Loans.

         "Route 6 Mall Property" means the real property owned by Borrower
located in Honesdale, Pennsylvania.

         "Solvency Certificate" means a certificate in the form of EXHIBIT D.

         "Solvent" means, when used with respect to any Person, that the fair
value of the property of such Person, on a going concern basis, is greater than
the total amount of liabilities (including, without limitation, contingent
liabilities) of such Person.

         "Substitute Lender" and "Substitution Notice" have the respective
meanings specified in Section 3.07. "Supplemental Fee Letter" means that certain
letter agreement, dated the date hereof, between Administrative Agent and
Borrower.

         "The Dime" means The Dime Savings Bank of New York, FSB.

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         "this Agreement" means this Term Loan Agreement.

         "Title Insurer" means, for each Property, the issuer(s) of the title
insurance policy(ies) insuring the Mortgage thereon.

         "Total Loan Commitment" means an amount equal to the aggregate amount
of all Loan Commitments.

         "United States" and "U.S." mean the United States of America.

         Section 1.02 Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP, and all financial
data required to be delivered hereunder shall be prepared in accordance with
GAAP.

         Section 1.03 Computation of Time Periods. Except as otherwise provided
herein, 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 words "to" and "until" each means "to but excluding".

         Section 1.04 Rules of Construction . Except as provided otherwise, when
used in this Agreement, (i) "or" is not exclusive, (ii) a reference to a Law
includes any amendment, modification or supplement to, or replacement of, such
Law, (iii) a reference to a Person includes its permitted successors and
permitted assigns, (iv) all terms defined in the singular shall have a
correlative meaning when used in the plural and vice versa. (v) a reference to
an agreement, instrument or document shall include such agreement, instrument or
document as the same may be amended, modified or supplemented from time to time
in accordance with its terms and as permitted by the Loan Documents, (vi) all
references to Articles, Sections or Exhibits shall be to Articles, Sections and
Exhibits of this Agreement unless otherwise indicated, (vii) "hereunder",
"herein", "hereof' and the like refer to this Agreement as a whole and (viii)
all Exhibits to this Agreement shall be incorporated herein. Any table of
contents and the headings and captions hereunder are for convenience only and
shall not affect the interpretation or construction hereof.

                                   ARTICLE II

                                    THE LOANS

         Section 2.01 The Loans. Subject to the terms and conditions of this
Agreement, each Lender severally agrees to make, and Borrower agrees to accept,
a loan to Borrower (each such loan by a Lender, a "Loan"; such loans,
collectively, the "Loans") in an amount equal to such Lender's Loan Commitment.
The Loans shall be advanced in accordance with Section 2.04 upon Borrower's
satisfaction of the conditions set forth in Section 4.01. The LIBOR Loan or the
Prime Based Loan, as the case may be, of each Lender shall be maintained at such
Lender's Applicable Lending Office.

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         Section 2.02 Nature of Lenders' Obligations. The obligations of Lenders
under this Agreement are several, and no Lender shall be responsible for the
failure of any other Lender to make any advance of a Loan to be made by such
other Lender. However, the failure of any Lender to make any advance of the Loan
to be made by it hereunder on the date specified therefor shall not relieve any
other Lender of its obligation to make any advance of its Loan specified hereby
to be made on such date.

         Section 2.03 Purpose. Borrower shall use the proceeds of the Loans for
working capital and repayment of existing debt. In no event shall proceeds of
the Loans be used in a manner that would violate Regulation U or in connection
with a hostile acquisition or for any illegal purpose.

         Section 2.04. Procedures for Advances. Borrower shall submit to
Administrative Agent a request for the advance of proceeds of the Loans (each,
an "Advance", and the initial Advance made on the Closing Date, the "Initial
Advance") no later than 11:00 a.m. (New York time) on the date which is three
(3) Business Days, prior to the date the advance is to be made. Administrative
Agent, upon its receipt and approval of the request for advance, will so notify
all Lenders either by telephone or by facsimile. Not later than 10:00 a.m. (New
York time) on the date set for such advance, each Lender shall, through its
Applicable Lending Office and subject to the conditions of this Agreement, make
the amount to be advanced by it on such day available to Administrative Agent,
at Administrative Agent's Office and in immediately available funds for the
account of Borrower. The amount so received by Administrative Agent shall,
subject to the conditions of this Agreement, be made available to Borrower, in
immediately available funds, by Administrative Agent's crediting an account of
Borrower designated by Borrower in its request for advance. Each Advance made
pursuant to this Agreement shall be in an amount at least equal to $5,000,000
and in integral multiples of $100,000. All Advances made pursuant to this
Agreement must be made on or prior to the date which is twelve (12) months from
the Closing Date. The Initial Advance made pursuant to this Agreement shall be
in an amount at least equal to $35,000,000. Amounts advanced hereunder and
repaid shall not be readvanced.

         Notwithstanding the foregoing, advances shall be limited to $56,331,437
until such time as Administrative Agent has received evidence satisfactory to
Administrative Agent that the "immediate" and "moderate" repair items set forth
in the Summary of Engineering and Environmental Findings dated February 18, 2000
prepared by Cashin Associates, PC with respect to each of the Properties, copies
of which are attached hereto as SCHEDULE A (collectively, the "Remedial Work"),
has been satisfactorily completed as certified by the Engineering Consultant.
The $2,668,563 not available to be advanced represents 125% of the Engineering
Consultant's estimate of the cost of performing the Remedial Work. Upon
Administrative Agent's receipt of a contract for performance of a specific item
of Remedial Work set forth on SCHEDULE A hereto, the limitation on advances
provided for herein shall be adjusted upwards or downwards on the basis of 125%
of the amount set forth in such contract and upon the completion of a specific
item of Remedial Work, the amount available to be advanced hereunder shall be
increased by the amount attributable to such item (i.e., 125% of the estimated
or contract amount, as the case may be).

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         Section 2.05 Interest. Borrower shall pay interest to Administrative
Agent for the account of the applicable Lender on the outstanding and unpaid
principal amount of the Loans at the Applicable Interest Rate as follows:

             (i) On the Closing Date, interest on the Principal Amount from the
         Closing Date to April 1, 2000;

             (ii) Thereafter, commencing on May 1, 2000 and on the first day of
         each calendar month thereafter to the Maturity Date or the Extended
         Maturity Date, as the case may be, interest on the Principal Amount at
         the Applicable Interest Rate;

             (iii) On the Maturity Date or the Extended Maturity Date, if the
         maturity date of the Note is extended in accordance Section 2.13 of
         this Agreement, the entire unpaid principal balance of the Loan,
         together with all accrued and unpaid interest at the Applicable
         Interest Rate, shall become due and payable in full;

             (iv) In addition to interest on the Principal Amount at the
         Applicable Interest Rate, as aforesaid, there shall be payable at the
         time of each such interest payment commencing on May 1, 2000, an
         amount, as calculated by Administrative Agent, sufficient to repay the
         aggregate amount actually advanced hereunder through the date of such
         payment, whether or not then outstanding in 360 equal installments,
         provided, however, in the event that the Maturity Date is extended in
         accordance with Section 2.13 of this Agreement, commencing on the
         Maturity Date, the amount of such payments shall be adjusted to an
         amount sufficient to fully repay the Principal Amount as of the
         Extended Maturity Date in 300 equal installments.

         The interest payable under this Agreement and the Notes shall be
computed by Administrative Agent on the basis of a three hundred sixty (360) day
year. Principal, interest, and all other sums payable under this Agreement and
under the Notes shall be paid in lawful money of the United States in
immediately available funds, free and clear of, and without deduction or offset
for, any present or future taxes, levies, imposts, charges, withholdings, or
liabilities with respect thereto, and free and clear of any and all other
defenses, offsets, claims, counterclaims, credits or deductions of any kind.

         Nothing in this Agreement or in any other Loan Document shall require
the payment or permit the collection by Administrative Agent for the account of
Lenders of interest in an amount exceeding the maximum amount permitted under
applicable law in commercial mortgage loan transactions between parties of the
character of the parties hereto (the "Maximum Interest Amount"). Borrower shall
not be obligated to pay to said holder any interest in excess of the Maximum
Interest Amount, and the amount of interest payable to said holder under the
Loan Documents shall under no circumstance be deemed to exceed the Maximum
Interest Amount. To the extent that any payment made to said holder under the
Loan Documents would cause the amount of interest charged to exceed the Maximum
Interest Amount, such payment shall be deemed a prepayment of principal as to
which no notice shall be required, notwithstanding anything to the contrary in
this Agreement, the Notes or in any other Loan Document, or, if the amount of
excess interest exceeds the unpaid principal balance of the Loans, such excess
shall be refunded to Borrower.

                                       12
<PAGE>

         Accrued interest shall be due and payable in arrears upon and with
respect to any payment or prepayment of principal on the first Business Day of
each calendar month; provide , however , that interest accruing at the Default
Rate shall be due and payable on demand.

         Section 2.06 Notes. The Loan made by each Lender under this Agreement
shall be evidenced by, and repaid with interest in accordance with, a single
promissory note of Borrower in the form of EXHIBIT B, duly completed and
executed by Borrower, in a principal amount equal to such Lender's Loan
Commitment, payable to such Lender for the account of its Applicable Lending
Office (each such note, as the same may hereafter be amended, modified,
extended, severed, assigned, renewed or restated from time to time, including
any substitute notes pursuant to Section 3.07 or 11.05, a "Note"; all such
Notes, collectively, the "Notes"). The Notes shall mature, and all outstanding
principal and accrued interest and other sums thereunder shall be paid in full,
on the Maturity Date, as the same may be accelerated.

         Each Lender is hereby authorized by Borrower to endorse on the schedule
attached to the Note held by it, the amount of each advance and each payment of
principal received by such Lender for the account of its Applicable Lending
Office(s) on account of its Loan, which endorsement shall, in the absence of
manifest error, be conclusive as to the outstanding balance of the Loan made by
such Lender. The failure by any Lender to make such notations with respect to
its Loans or each advance or payment shall not limit or otherwise affect the
obligations of Borrower under this Agreement or the Notes.

         In case of any loss, theft, destruction or mutilation of any Lender's
Note, Borrower shall, upon its receipt of an affidavit of an officer of such
Lender as to such loss, theft, destruction or mutilation and an appropriate
indemnification, execute and deliver a replacement Note to such Lender in the
same principal amount and otherwise of like tenor as the lost, stolen, destroyed
or mutilated Note.

         Section 2.07 Prepayments Borrower may prepay the Loans in whole or in
part as specified below. During the first eighteen (18) months of the term of
the Loans, Borrower may, upon ten (10) days' prior written notice, prepay the
Loans in whole or in part subject to the payment of a prepayment charge equal to
the greater of (i) 1% of the then-outstanding Principal Amount or (ii) any
applicable Breakage Fees (as defined in Section 3.05 of this Agreement). From
and after the nineteenth (19th) month through and including the Maturity Date of
the Loans or the Extended Maturity Date if the Loans have been extended pursuant
to Section 2.13 hereof, Borrower may, upon ten (10) days prior written notice,
prepay the Loans in whole or in part subject to the payment of a prepayment
charge equal to any applicable Breakage Fees (any fee due and payable in
connection with the prepayment of the Loans, hereinafter, a "Prepayment
Charge").

                                       13
<PAGE>

         Section 2.08 Method of Payment. Borrower shall make each payment under
this Agreement and under the Notes not later than 11:00 a.m. (New York time) on
the date when due in Dollars to Administrative Agent at Administrative Agent's
Office in immediately available funds. Administrative Agent will thereafter, on
the day of its receipt of each such payment, cause to be distributed to each
Lender (i) such Lender's appropriate share (based upon the respective
outstanding principal amounts and rate(s) of interest under the Notes of all
Lenders) of the payments of principal and interest in like funds for the account
of such Lender's Applicable Lending Office and (ii) fees payable to such Lender
in accordance with the terms hereof.

         Except to the extent otherwise provided herein, whenever any payment to
be made hereunder or under the Notes is due on any day other than a Business
Day, such payment shall be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the computation of the
payment of interest and other fees, as the case may be.

         Section 2.09 Application of Payments. All payments made under this
Agreement and under the Notes other than with respect to Breakage Fees (as
hereinafter defined) shall be applied as follows: first, to the payment of
interest on the principal balance outstanding hereunder from time to time;
second, to the payment of sums payable by Borrower to Administrative Agent for
the account of Lenders under any Loan Document other than on account of
principal and interest; and third, to the payment of principal.

         Section 2.10 Applicable Interest Rat Borrower shall, subject to the
terms and conditions hereinafter set forth, pay interest on the Principal Amount
at the LIBOR Based Rate. All or any portions of the Principal Amount to which
the LIBOR Based Rate is not or cannot pursuant to the terms hereof be applicable
shall bear interest at the Prime Based Rate.

         Notwithstanding anything herein to the contrary, if, at the time of or
prior to the determination of the LIBOR Based Rate, the Administrative Agent
determines (which determination shall be conclusive) that (i) by reason of
circumstances affecting the London interbank market generally, adequate and fair
means do not or will not exist for determining the LIBOR Based Rate applicable
to an Interest Period or (ii) the LIBOR Rate, as determined by Administrative
Agent, will not accurately reflect the cost to Administrative Agent of making or
maintaining the Loan (or any portion thereof) at the LIBOR Based Rate, then
Administrative Agent shall give Borrower prompt notice thereof, and the
Principal Amount in question shall bear interest, or continue to bear interest,
as the case may be, at the Prime Based Rate. If at any time subsequent to the
giving of such notice, Administrative Agent determines that because of a change
in circumstances the LIBOR Based Rate is again available to Borrower hereunder,
Administrative Agent shall so advise Borrower and, within two (2) Business Days,
the rate of interest payable hereunder shall be converted from the Prime Based
Rate to the LIBOR Based Rate.

                                       14
<PAGE>

         Section 2.11 Late Payment Premium If all or a portion of any monthly
payment required to be made to Administrative Agent for the account of Lenders
(whether pursuant to this Agreement, the Notes or any other Loan Document) is
not received on or before the tenth day after the date such payment is due
(without reference to any grace period provided for in the Loan Documents), a
late charge of four percent (4%) of the amount so overdue ("Late Charge") shall
immediately be due to Administrative Agent for the account of Lenders. Any such
Late Charge shall be secured by the security for the Loan, shall be paid no
later than the due date of the next subsequent installment of interest payable
under this Agreement and the Notes and, if not so paid, shall bear interest at
the rate then in effect with respect to the Principal Amount as set forth in
this Agreement. In addition, if Borrower shall fail to make timely payment in
full of any sum payable under this Agreement, the Notes or any of the Loan
Documents, Borrower shall pay all costs of collection, including, but not
limited to, reasonable attorneys' fees and disbursements, whether or not suit is
filed hereon. Notwithstanding anything to the contrary in this paragraph, the
Late Charge shall not be applied to any portion of the Principal Amount due and
payable on the Maturity Date (or, if the Maturity Date is extended, the Extended
Maturity Date), which is overdue and not received.

         Section 2.12 Extension Option. Borrower, at Borrower's option, may
extend the Maturity Date to the Extended Maturity Date, subject to the following
terms and conditions:

         (1) Borrower shall give Administrative Agent written notice (the
     "Extension Notice") not less than sixty (60) days nor earlier than one
     hundred eighty (180) days prior to the Maturity Date;

         (2) There shall not exist, beyond any applicable grace period, a
     default hereunder or under the Mortgage or any of the Loan Documents on the
     date Borrower exercises its option to extend the Maturity Date of the Loan
     or on the Maturity Date;

         (3) Borrower shall pay to Administrative Agent at least thirty (30)
     days prior to the Maturity Date an extension fee equal to one-quarter of
     one percent (.25%) of the Principal Amount on the Maturity Date, which fee
     shall not be applied towards the payment of the Loan but shall be retained
     by Administrative Agent for the account of Lenders in consideration of
     extending the maturity date of the Loan;

         (4) On the date Borrower exercises its option to extend the maturity of
     the Loan and on the Maturity Date, the outstanding Principal Amount does
     not exceed sixty percent (60%) of the appraised value of the Premises as
     reflected in a new MAI appraisal of the Premises, which meets FIRREA
     guidelines (the "Appraisal"), obtained by Administrative Agent, at
     Borrower's expense, following Administrative Agent's receipt of the
     Extension Notice;

         (5) Administrative Agent has received and reasonably approved the
     Appraisal; and

                                       15
<PAGE>

         (6) On the date Borrower exercises its option to extend the maturity of
     the Loan and on the Maturity Date, the Net Operating Income (as defined
     below) for the Property for the six (6) calendar month period preceding (i)
     Administrative Agent's receipt of the Extension Notice and (ii) the
     Maturity Date exceeds one hundred thirty-five percent (135%) of the Debt
     Service (as defined below) for the applicable period, as determined by
     Administrative Agent in its sole discretion. As used herein, "Net Operating
     Income" shall mean (a) the gross income from the ownership and operation of
     the Improvements (as defined in the Mortgage), including, without
     limitation, payments to Borrower from tenants under leases, less (b)
     operating expenses for the Improvements, including without limitation (i)
     real estate taxes and insurance premiums, (ii) reasonable management fees
     paid in accordance with the property management contract (which is approved
     by Administrative Agent), (iii) non-capital repairs and maintenance, and
     (iv) reserves for replacement, all to the reasonable satisfaction of
     Administrative Agent. As used herein, "Debt Service" shall mean the
     principal and interest payments due for the applicable period during the
     term of the Loan, as calculated by Administrative Agent.

                                   ARTICLE III

                       YIELD PROTECTION; ILLEGALITY; ETC.

         Section 3.01 Additional Costs. Borrower shall pay directly to each
Lender from time to time on demand such amounts as such Lender may determine to
be necessary to compensate it for any increased costs which such Lender
determines are attributable to its making or maintaining a LIBOR Loan, or its
obligation to make or maintain a LIBOR Loan, or if a Prime Based Loan must be
converted into a LIBOR Loan in accordance with Section 2.11 of this Agreement,
or any reduction in any amount receivable by such Lender hereunder in respect of
its LIBOR Loan or such obligations (such increases in costs and reductions in
amounts receivable being herein called "Additional Costs"), in each case
resulting from any Regulatory Change which:

         (1) changes the basis of taxation of any amounts payable to such Lender
     under this Agreement or the Notes in respect of any such LIBOR Loan (other
     than changes in the rate of general corporate, franchise, branch profit,
     net income or other income tax imposed on such Lender or its Applicable
     Lending Office by the jurisdiction in which such Lender has its principal
     office or such Applicable Lending Office); or

         (2) (other than to the extent the LIBOR Reserve Requirement is taken
     into account in determining the LIBOR Rate at the commencement of the
     applicable Interest Period) imposes or modifies any reserve, special
     deposit, deposit insurance or assessment, minimum capital, capital ratio or
     similar requirements relating to any extensions of credit or other assets
     of, or any deposits with or other liabilities of, such Lender (including
     any LIBOR Loan), or any commitment of such Lender (including such Lender's
     Loan Commitment hereunder); or

                                       16
<PAGE>

         (3) imposes any other condition affecting this Agreement or the Notes
     (or any of such extensions of credit or liabilities).

         Without limiting the effect of the provisions of the first paragraph of
this Section, in the event that, by reason of any Regulatory Change, any Lender
either (i) incurs Additional Costs based on or measured by the excess above a
specified level of the amount of a category of deposits of other liabilities of
such Lender which includes deposits by reference to which the LIBOR Rate is
determined as provided herein or a category of extensions of credit or other
assets of such Lender which includes loans based on the LIBOR Rate or (ii)
becomes subject to restrictions on the amount of such a category of liabilities
or assets which it may hold, then, if such Lender so elects by notice to
Borrower (with a copy to Administrative Agent), the obligation of such Lender to
maintain the Loan (or portions thereof) at the LIBOR Based Rate (and Borrower's
right to request same) shall be suspended (in which case the provisions of
Section 3.04 shall be applicable) until such Regulatory Change ceases to be in
effect.

         Determinations and allocations by a Lender for purposes of this Section
of the effect of any Regulatory Change pursuant to the first or second paragraph
of this Section, on its costs or rate of return of making or maintaining its
Loan or portions thereof or on amounts receivable by it in respect of its Loan
or portions thereof, and the amounts required to compensate such Lender under
this Section, shall be conclusive absent manifest error.

         Notwithstanding any other provisions in the Note or this Agreement to
the contrary, if the Additional Costs to Borrower pursuant to this Section 3.01
exceed 1% per annum Borrower shall have the right to prepay this Loan during the
first eighteen (18) months from the date hereof without a Prepayment Charge.

         Section 3.02 Limitation on Types of Loans. Anything herein to the
contrary notwithstanding, if on or prior to the determination of the LIBOR Rate
for any Interest Period:

         (1) Administrative Agent determines (which determination shall be
     conclusive) that quotations of interest rates for the relevant deposits
     referred to in the definition of "LIBOR Rate" in Section 1.01 are not being
     provided in the relevant amounts or for the relevant maturities for
     purposes of determining rates of interest for the LIBOR Loans as provided
     herein; or

         (2) a Lender determines (which determination shall be conclusive) and
     promptly notifies Administrative Agent that the relevant rates of interest
     referred to in the definition of "LIBOR Interest Rate" in Section 1.01 upon
     the basis of which the rate of interest for LIBOR Loans for such Interest
     Period is to be determined do not adequately cover the cost to such Lender
     of making or maintaining such LIBOR Loan for such Interest Period;

then Administrative Agent shall give Borrower prompt notice thereof, and so long
as such condition remains in effect, Lenders (or, in the case of the
circumstances described in clause (2) above, the affected Lender) shall be under
no obligation to maintain the Loan at the LIBOR Based Rate and Borrower shall,
on the last day of the then current Interest Period for the affected outstanding
LIBOR Loans, either (x) prepay the affected LIBOR Loans or (y) convert the
affected LIBOR Loans into Prime Based Loans in accordance with Section 2.11.

                                       17
<PAGE>

         Section 3.03 Illegality . Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to honor its obligation to make or maintain a LIBOR
Loan hereunder, to convert a Prime Based Loan into a LIBOR Loan in accordance
with Section 2.11, then such Lender shall promptly notify Administrative Agent
and Borrower thereof and such Lender's obligation to make or maintain a LIBOR
Loan or to convert its Prime Based Loan into a LIBOR Loan shall be suspended (in
which case the provisions of Section 3.04 shall be applicable) until such time
as such Lender may again make and maintain a LIBOR Loan.

         Section 3.04 Treatment of Affected Loans. If the obligations of any
Lender to make or maintain a LIBOR Loan or to convert a Prime Based Loan into a
LIBOR Loan, are suspended pursuant to Sections 3.01 or 3.03 (each LIBOR Loan so
affected being herein called an "Affected Loan"), such Lender's Affected Loan
shall be automatically converted into a Prime Based Loan on the last day of the
then current Interest Period for the Affected Loan.

         To the extent that such Lender's Affected Loan has been so Converted
(or the interest rate thereon so converted), all payments and prepayments of
principal which would otherwise be applied to such Lender's Affected Loan shall
be applied instead to its Prime Based Loan. If subsequent to such suspension and
conversion to a Prime Based Loan the reasons for such suspension have ceased to
be in effect, Administrative Agent will so advise Borrower and, within two (2)
Business Days, the rate of interest payable under this Agreement and the Notes
with respect to the Principal Amount bearing interest at the Prime Based Rate
shall be converted to the LIBOR Based Rate.

         Section 3.05 Certain Compensation. Borrower shall pay to Administrative
Agent, immediately upon request and notwithstanding contrary provisions
contained in the Mortgage or other Loan Documents, such amounts (the "Breakage
Fee") as shall, in the conclusive judgment of Administrative Agent, compensate
Administrative Agent for the account of Lenders for any loss, cost or expense
incurred by it as a result of (i) any payment or prepayment (under any
circumstances whatsoever, whether voluntary or involuntary) of any portion of
the Principal Amount bearing interest at the LIBOR Based Rate on a date other
than the last day of an applicable Interest Period or (ii) the conversion (for
any reason whatsoever, whether voluntary or involuntary) of the rate of interest
payable hereunder from the LIBOR Based Rate, on a date other than the last day
of an applicable Interest Period, which amounts shall include, without
limitation, an amount equal to the excess, if any, of (x) the amount of interest
that would have accrued at the LIBOR Based Rate on the amount so prepaid,
converted, not advanced or not borrowed, as the case may be, for the period from
the date of occurrence to the last day of the applicable Interest Period over
(y) the amount of interest (as determined in good faith by Administrative Agent)
that Administrative Agent for the account of Lenders would have paid to Borrower
(and other customers) on a deposit placed by Administrative Agent with leading
banks in the London interbank market for an amount comparable to the amount so
prepaid, converted, not advanced or not borrowed, as the case may be, for the
period from the date of occurrence to the last day of the applicable Interest
Period.

                                       18
<PAGE>

         Section 3.06 Capital Adequacy. If any Lender shall have determined
that, after the date hereof, the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or any change in
the interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such Governmental Authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on capital of such Lender (or its Parent) as a consequence of
such Lender's obligations hereunder to a level below that which such Lender (or
its Parent) could have achieved but for such adoption, change, request or
directive (taking into consideration its policies with respect to capital
adequacy) by an amount deemed by such Lender to be material, then from time to
time, within fifteen (15) days after demand by such Lender (with a copy to
Administrative Agent), Borrower shall pay to such Lender such additional amount
or amounts as will compensate such Lender (or its Parent) for such reduction. A
certificate of any Lender claiming compensation under this Section, setting
forth in reasonable detail the basis therefor, shall be conclusive absent
manifest error.

         Section 3.07 Substitution of Lenders. If any Lender (an "Affected
Lender") (i) makes demand upon Borrower for (or if Borrower is otherwise
required to pay) Additional Costs pursuant to Section 3.01 or (ii) gives notice
to Borrower that such Lender is unable to make or maintain a LIBOR Loan as a
result of a condition described in Section 3.03 or clause (2) of Section 3.02,
Borrower may, within ninety (90) days of receipt of such demand or notice (or
the occurrence of such other event causing Borrower to be required to pay
Additional Costs or causing said Section 3.03 or clause (2) of Section 3.02 to
be applicable), as the case may be, give notice (a "Substitution Notice") to
Administrative Agent and to each Lender of Borrower's intention either (x) to
prepay in full the Affected Lender's Note and to terminate the Affected Lender's
entire Loan Commitment or (y) to replace the Affected Lender with another
financial institution (a "Substitute Lender") designated in such Substitution
Notice.

         In the event Borrower opts to give the notice provided for in clause
(x) above, and if the Affected Lender shall not agree within thirty (30) days of
its receipt thereof to waive the payment of the Additional Costs in question or
the effect of the circumstances described in Section 3.03 or clause (2) of
Section 3.02, then, so long as no Default or Event of Default shall exist,
Borrower may terminate the Affected Lender's entire Loan Commitment, provide
that in connection therewith it pays to the Affected Lender all outstanding
principal and accrued and unpaid interest under the Affected Lender's Note,
together with all other amounts, if any, due from Borrower to the Affected
Lender, including all amounts properly demanded and unreimbursed under this
Article III.

         In the event Borrower opts to give the notice provided for in clause
(y) above, and if (A) Administrative Agent shall, within thirty (30) days of its
receipt of the Substitution Notice, notify Borrower and each Lender in writing

                                       19
<PAGE>

that the proposed Substitute Lender is reasonably satisfactory to Administrative
Agent and (B) the Affected Lender shall not, prior to the end of such thirty
(30)-day period, agree to waive the payment of the Additional Costs in question
or the effect of the circumstances described in Section 3.03 or clause (2) of
Section 3.02, then the Affected Lender shall, so long as no Default or Event of
Default shall exist, assign its Note and all of its rights and obligations under
this Agreement to the Substitute Lender, and the Substitute Lender shall assume
all of the Affected Lender's rights and obligations, pursuant to an agreement,
substantially in the form of an Assignment and Assumption Agreement, executed by
the Affected Lender and the Substitute Lender. In connection with such
assignment and assumption, the Substitute Lender shall pay to the Affected
Lender an amount equal to the outstanding principal amount under the Affected
Lender's Note plus all interest accrued thereon, plus all other amounts, if any
(other than the Additional Costs in question), then due and payable to the
Affected Lender; provide , however , that prior to or simultaneously with any
such assignment and assumption, Borrower shall have paid to such Affected Lender
all amounts properly demanded and unreimbursed under this Article III. Upon the
effective date of such assignment and assumption and the payment by the
Substitute Lender to Administrative Agent of a fee, for Administrative Agent's
own account, in the amount of $2,500, the Substitute Lender shall become a party
to this Agreement and shall have all the rights and obligations of a Lender as
set forth in such Assignment and Assumption Agreement, and the Affected Lender
shall be released from its obligations hereunder, and no further consent or
action by any party shall be required. Upon the consummation of any assignment
pursuant to this Section, a substitute Note shall be issued to the Substitute
Lender by Borrower, in exchange for the return of the Affected Lender's Note.
The obligations evidenced by such substitute note shall constitute "Obligations"
for all purposes of this Agreement and the other Loan Documents and shall be
secured by the Mortgages. In connection with Borrower's execution of substitute
notes as aforesaid, Borrower shall deliver to Administrative Agent such evidence
of the due authorization, execution and delivery of the substitute notes and any
related documents as Administrative Agent may reasonably request. If the
Substitute Lender is not incorporated under the Laws of the United States or a
state thereof, it shall, prior to the first date on which interest or fees are
payable hereunder for its account, deliver to Borrower and Administrative Agent
certification as to exemption from deduction or withholding of any United States
federal income taxes in accordance with Section 9.13. Each Substitute Lender
shall be deemed to have made the representations contained in, and shall be
bound by the provisions of, Section 9.13.

         Borrower, Administrative Agent and Lenders shall execute such
modifications to the Loan Documents as shall be reasonably required in
connection with and to effectuate the foregoing.

         Section 3.08 "Lender" to Include Participants. For purposes of Sections
3.01 through 3.06 and of the definition of "Additional Costs", the term "Lender"
shall, at each Lender's option, be deemed to include such Lender's present and
future Participants in its Loan to the extent of each such Participant's actual
Additional Costs or other losses, costs or expenses payable pursuant to this
Article III.

                                       20
<PAGE>

                                   ARTICLE IV

                              CONDITIONS PRECEDENT

         Section 4.01 Conditions Precedent . The obligations of Lenders
hereunder and the obligation of each Lender to advance the proceeds of the Loans
are subject to the condition precedent that Administrative Agent shall have
received and approved on or before the Closing Date each of the following
documents (it being understood that the documents set forth in paragraphs (3)
through (15) below are required for each Property), and each of the following
requirements shall have been fulfilled:

         (1) Fees and Expenses. The payment of (i) all fees and expenses
     incurred by The Dime, as Lender and Administrative Agent (including,
     without limitation, the reasonable fees and expenses of legal counsel, the
     Engineering Consultant and any valuation, environmental or insurance
     consultants); and (ii) a commitment fee of $295,000 and a fee of .15% of
     the excess of $59,000,000 over the amount of the Initial Advance;

         (2) Notes. The Notes for The Dime and each of the other Lenders (if
     any) signatory hereto, each duly executed by Borrower;

         (3) Mortgage and UCCs. The Mortgage, duly executed by Borrower and
     recorded in the appropriate land records, together with duly executed
     financing statements filed under the Uniform Commercial Code of all
     jurisdictions necessary or, in the reasonable opinion of Administrative
     Agent, desirable to perfect the lien created by each Mortgage;

         (4) Indemnity The Indemnity, duly executed by Borrower and Borrower's
     Principals;

         (5) Title Policy . A paid title insurance policy in the amount of the
     Mortgage, in form approved by Administrative Agent and issued by the Title
     Insurer, which shall insure the Mortgage to be a valid first lien on
     Borrower's interests in the Property and Improvements, free and clear of
     all liens, defects, encumbrances and exceptions other than those previously
     approved by Administrative Agent, and shall contain (i) a reference to the
     survey but no survey exceptions, (ii) if such policy is dated earlier than
     the date of the advance of the proceeds of the Loans, an endorsement to
     such policy, in a form approved by Administrative Agent, setting forth no
     additional exceptions other than those approved by Administrative Agent and
     (iv) such affirmative insurance and endorsements as Administrative Agent
     may require; and shall be accompanied by such reinsurance agreements
     between the Title Insurer and title companies approved by Administrative
     Agent, in ALTA facultative form approved by Administrative Agent and with
     direct access provisions, as Administrative Agent may require;

         (6) Survey A current ALTA/ACSM survey, certified to Administrative
     Agent and the Title Insurer, showing (i) the location of the perimeter of

                                       21
<PAGE>

     the Property by courses and distances, (ii) all easements, rights-of-way,
     and utility lines referred to in the title policy required by this
     Agreement or which actually service or cross the Property (with instrument,
     book and page number indicated), (iii) the lines of the streets abutting
     the Property and the width thereof, and any established building lines (and
     that such roads have been dedicated for public use and are completed and
     have been accepted by all required Governmental Authorities), (iv) any
     encroachments and the extent thereof upon the Property, (v) locations of
     all portions (with the acreage thereof also identified) of the Property, if
     any, which are located in an area designated as a "flood prone area" as
     defined by U.S. Department of Housing and Urban Development pursuant to the
     Flood Disaster Protection Act of 1973 and (vi) the Improvements, and the
     relationship thereof by distances to the perimeter of the Property,
     established building lines and street lines;

         (7) Appraisal. An independent M.A.I. appraisal, commissioned by
     Administrative Agent, of the value of the Property, which appraisal shall
     comply in all respects with the standards for real estate appraisals
     established pursuant to the Financial Institutions Reform, Recovery, and
     Enforcement Act of 1989;

         (8) Insurance Policies. The policies and certificates of hazard and
     other insurance required by the Mortgage, together with evidence of the
     payment of the premiums therefor;

         (9) Hazardous Materials Report/Certification . A detailed report and
     certification by a properly qualified engineer with regard to Hazardous
     Materials affecting the Property, which shall include, inter alia, a
     certification that such engineer has examined a list of prior owners,
     tenants and other users of the Property, and has made an on-site physical
     examination of the Property and Improvements, and a visual observation of
     the surrounding areas, and disclosing the extent of past or present
     Hazardous Materials activities or of the presence of Hazardous Materials;

         (10) Consultant's Repo A detailed report from the Engineering
     Consultant to the effect that (i) the Improvements are in satisfactory
     condition and have been constructed in accordance with the plans and
     specifications therefor approved by all applicable Governmental
     Authorities, (ii) the Improvements comply with all applicable zoning and
     other Laws, all Major Leases and the Premises Documents, (iii) all roads
     and utilities necessary for the full utilization of the Improvements for
     their intended purposes have been completed and (iv) there exists a
     sufficient number of parking spaces necessary to satisfy the requirements
     of the Premises Documents and any leases and all zoning and other
     applicable Laws with respect to the Property, and all required landscaping,
     sidewalks and other amenities, and all off-site improvements, related to
     the Improvements have been completed;

         (11) Pen-nits and Other Approvals. Copies of any and all
     authorizations, including plot plan and subdivision approvals, zoning
     variances, sewer, building and other permits, required by all Governmental
     Authorities for the use, occupancy and operation of the Property and/or

                                       22
<PAGE>

     Improvements in accordance with all applicable building, environmental,
     ecological, landmark, subdivision and zoning Laws;

         (12) Leases. Copies, certified to be true and complete, of all executed
     leases of the Improvements, accompanied by notices of assignments in the
     form of EXHIBIT J and, in the case of Major Leases (i) estoppel
     certificates from the tenants thereunder, (ii) at Administrative Agent's
     option, subordination nondisturbance and attornment agreements and (iii)
     certified copy of the standard form of lease Borrower is using in
     connection with the leasing of space in the Improvements, if any, and of
     the rent roll for each Property;

         (13) Premises Documents. A copy, certified to be true and complete, of
     the Premises Documents, together with estoppel certificates with respect
     thereto from each of the parties thereto and, if available, current
     financial statements of such parties;

         (14) Management and Leasing Contracts. Copies, certified to be true and
     complete, of all existing contracts providing for the management,
     maintenance, operation or leasing of the Property and Improvements,
     together with, in each case, such collateral assignments or "will-serve"
     letters as Administrative Agent may require;

         (15) UCC Searches. Uniform Commercial Code searches with respect to
     Borrower and advice from the Title Insurer to the effect that searches of
     the proper public records disclose no leases of personalty or financing
     statements filed or recorded against Borrower or the Mortgaged Property;

         (16) Financials of Borrower. Unaudited operating statements and aged
     accounts receivable reports for each Property, certified by the chief
     financial officer of Borrower's general partner;

         (17) Organizational Documents. If Borrower or any general partner or
     member of Borrower is a corporation, current copies of the following
     documents with respect to each (unless otherwise indicated):

              (i) a good-standing certificate from the jurisdiction of its
         incorporation,

              (ii) a resolution, certified by the corporate secretary, of the
         shareholders or directors of the corporation authorizing the
         consummation of the transactions contemplated hereby and the execution,
         delivery and performance of the Loan Documents and other documents to
         be executed, delivered or performed by said corporation (including any
         substitute or replacement Notes to be executed and delivered pursuant
         to the terms hereof), and

                                       23
<PAGE>

              (iii) a certificate of the corporate secretary as to the
         incumbency of the officers executing any of the documents required
         hereby,

and, if Borrower or any general partner or member of Borrower is a partnership,
venture, limited liability company or trust:

              (iv) the entity's organizational agreement and all amendments and
         attachments thereto, certified by a general partner, venturer, member
         or trustee to be true and complete,

              (v) any certificates filed or required to be filed by the entity
         in the jurisdiction of its formation, and

              (vi) evidence of the authorization of the consummation of the
         transactions contemplated hereby and the execution, delivery and
         performance of the Loan Documents and any other documents to be
         executed, delivered and performed by said entity (including any
         substitute or replacement Notes to be executed and delivered pursuant
         to the terms hereof), and including any required consents by partners,
         venturers, members, trustees or beneficiaries; (18) Solvency
         Certificate. A duly executed Solvency Certificate;

         (19) Opinion of Counsel for Borrower . A favorable opinion, dated the
     Closing Date, of counsel for Borrower, as to such matters as Administrative
     Agent may reasonably request;

         (20) Authorization Letter. The Authorization Letter, duly executed by
     Borrower;

         (21) Request for Advance. A request for an advance in accordance with
     Section 2.04;

         (22) Certificate The following statements shall be true and
     Administrative Agent shall have received a certificate dated the Closing
     Date signed by a duly authorized signatory of Borrower stating, to the best
     of the certifying party's knowledge, the following:

              (i) All representations and warranties contained in this Agreement
         and in each of the other Loan Documents are true and correct on and as
         of the Closing Date as though made on and as of such date,

              (ii) No Default or Event of Default has occurred and is
         continuing, or could result from the transactions contemplated by this
         Agreement and the other Loan Documents, and

              (iii) None of the Improvements on any Property has been materially
         injured or damaged by fire or other casualty;

         (23) Covenant Compliance. A covenant compliance certificate of the sort
     required by paragraph (3) of Section 6.09; and

         (24) Additional Materials. Such other approvals, documents, instruments
     or opinions as Administrative Agent may reasonably request.

                                       24
<PAGE>

                                    ARTICLE V

                         REPRESENTATIONS AND WARRANTIES

         Borrower represents and warrants to Administrative Agent and each
Lender as follows:

         Section 5.01 Due Organization Borrower (and if Borrower is a
partnership or limited liability company, its general partners or members, as
the case may be) is duly organized, validly existing and in good standing under
the Laws of the jurisdiction of its organization, has the power and authority to
own its assets and to transact the business in which it is now engaged, and, if
applicable, is duly qualified for the conduct of business and in good standing
under the Laws of each jurisdiction where a Property is located and each other
jurisdiction in which such qualification is required.

         Section 5.02 Power and Authority; No Conflicts: Compliance Wit Laws.
The execution, delivery and performance of the obligations required to be
performed by Borrower of the Loan Documents does not and will not (i) require
the consent or approval of its shareholders, partners or members, as the case
may be, or such consent or approval has been obtained, (ii) contravene its
certificate of incorporation, bylaws, partnership agreement or other
organizational documents, (iii) violate any provision of, or require any filing,
registration, consent or approval under, any Law (including, without limitation,
Regulation U), order, writ, judgment, injunction, decree, determination or award
presently in effect having applicability to it, (iv) result in a breach of or
constitute a default under or require any consent under any indenture or loan or
credit agreement or any other agreement, lease or instrument to which it may be
a party or by which it or its properties may be bound or affected except for
consents which have been obtained, (v) result in, or require, the creation or
imposition of any Lien, upon or with respect to any of its properties now owned
or hereafter acquired or (vi) cause it to be in default under any such Law,
order, writ, judgment, injunction, decree, determination or award or any such
indenture, agreement, lease or instrument; Borrower is in compliance with all
Laws applicable to it and its properties.

         Section 5.03 Legally Enforceable Agreements. Each Loan Document is a
legal, valid and binding obligation of Borrower, enforceable against Borrower in
accordance with its terms, except to the extent that such enforcement may be
limited by applicable bankruptcy, insolvency and other similar laws affecting
creditors' rights generally.

         Section 5.04 Litigation. There are no actions, suits or proceedings
pending or, to its knowledge, threatened against Borrower or any of its
Affiliates, any Property, the Improvements thereon, the validity or

                                       25
<PAGE>

enforceability of any Mortgage or the priority of the Lien thereof, at law or in
equity, before any court or arbitrator or any Governmental Authority except
actions, suits or proceedings which have been disclosed to Administrative Agent
in writing and which are fully covered by insurance or would, if adversely
determined, not substantially impair the ability of Borrower to pay when due any
amounts which may become payable under the Notes or other Loan Documents or to
otherwise pay and perform its obligations in connection with the Loans.

         Section 5.05 Good Title to Properties. Borrower has good, marketable
and legal title to all of the properties and assets each of them purports to own
(including, without limitation, those reflected in the December 31, 1999
financial statements referred to in Section 5.13), only with exceptions which do
not materially detract from the value of such property or assets or the use
thereof in Borrower's business. Borrower enjoys peaceful and undisturbed
possession of all leased property necessary in any material respect in the
conduct of its businesses. All such leases are valid and subsisting and are in
full force and effect.

         Section 5.06 Taxes. Borrower has filed all tax returns (federal, state
and local) required to be filed and has paid all taxes, assessments and
governmental charges and levies due and payable without the imposition of a
penalty, including interest and penalties, except to the extent they are the
subject of a Good Faith Contest.

         Section 5.07 ERIS . Borrower is in compliance in all material respects
with all applicable provisions of ERISA. Neither a Reportable Event nor a
Prohibited Transaction has occurred with respect to any Plan which could result
in liability of Borrower; no notice of intent to terminate a Plan has been filed
nor has any Plan been terminated within the past five (5) years; no circumstance
exists which constitutes grounds under Section 4042 of ERISA entitling the PBGC
to institute proceedings to terminate, or appoint a trustee to administer, a
Plan, nor has the PBGC instituted any such proceedings; Borrower and the ERISA
Affiliates have not completely or partially withdrawn under Sections 4201 or
4204 of ERISA from a Multiemployer Plan; Borrower and the ERISA Affiliates have
met the minimum funding requirements of Section 412 of the Code and Section 302
of ERISA of each with respect to the Plans of each and there is no material
"Unfunded Current Liability" (as such quoted term is defined in ERISA) with
respect to any Plan established or maintained by each; and Borrower and the
ERISA Affiliates have not incurred any liability to the PBGC under ERISA (other
than for the payment of premiums under Section 4007 of ERISA). No part of the
funds to be used by Borrower in satisfaction of its obligations under this
Agreement constitute "plan assets" of any "employee benefit plan" within the
meaning of ERISA or of any "plan" within the meaning of Section 4975(e)(1) of
the Code, as interpreted by the Internal Revenue Service and the U.S. Department
of Labor in rules, regulations, releases, bulletins or as interpreted under
applicable case law. Neither the extension of credit evidenced by the Notes nor
any other transaction contemplated under the Loan Documents constitutes a
Prohibited Transaction.

         Section 5.08 No Default on Outstanding Judgments or Order. Borrower has
satisfied all judgments which are not being appealed or which are not fully
covered by insurance, and are not in default with respect to any judgment,
order, writ, injunction, decree, rule or regulation of any court, arbitrator or
federal, state, municipal or other Governmental Authority, commission, board,
bureau, agency or instrumentality, domestic or foreign.

                                       26
<PAGE>

         Section 5.09 No Defaults on Other Agreements. Except as disclosed to
Administrative Agent in writing, Borrower is not a party to any indenture, loan
or credit agreement or any lease or other agreement or instrument or subject to
any partnership, trust or other restriction which is likely to result in a
Material Adverse Change. Borrower is not in default in any respect in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement or instrument which is likely to result in
a Material Adverse Change.

         Section 5. 10 Government Regulation. Borrower is not subject to
regulation under the Investment Company Act of 1940 or any statute or regulation
limiting its ability to incur indebtedness for money borrowed as contemplated
hereby.

         Section 5.11 Environmental Protection . To the best of Borrower's
knowledge, none of Borrower's properties contains any Hazardous Materials that,
under any Environmental Law currently in effect, (i) would impose liability on
Borrower that is likely to result in a Material Adverse Change or (ii) is likely
to result in the imposition of a Lien on any assets of Borrower in each case if
not properly handled in accordance with applicable Law. To the best of
Borrower's knowledge, neither it nor any portion of any Property or the
Improvements thereon is in violation of, or subject to any existing, pending or
threatened investigation or proceeding by any Governmental Authority under, any
Environmental Law. Borrower is not aware of any matter, claim, condition or
circumstance which would reasonably cause a Person to make further inquiry with
respect to such matters in order to ascertain whether any Hazardous Materials or
their effects have been disposed of or released on or to any portion of any
Property, the Improvements thereon or any surrounding areas; Borrower is not
required by any Environmental Law to obtain any permits or license to construct
or use any improvements, fixtures, or equipment with respect to any Property, or
if such permit or license is required it has been obtained; and, to the best of
Borrower's knowledge, the prior use of each Property has not resulted in the
disposal or release of any Hazardous Materials on or to any portion of the
Property or any surrounding areas in violation of applicable Law.

         Section 5.12 Solvency . Borrower is, and upon consummation of the
transactions contemplated by this Agreement, the other Loan Documents and any
other documents, instruments or agreements relating thereto, will be, Solvent.

         Section 5.13 Financial Statement . Borrower's financial statements most
recently delivered to Lenders pursuant to the terms of this Agreement are in all
material respects complete and correct and fairly present the financial
condition of the subjects thereof as of the dates of and for the periods covered
by such statements, all in accordance with GAAP. There has been no Material
Adverse Change since the date of such most recently delivered Borrower's
financial statements, and no borrowings which might give rise to a Lien or claim
against all or any portion of the Mortgaged Property under any Mortgage or

                                       27
<PAGE>

against the proceeds of the Loans have been made by Borrower or others since the
dates of such most recently delivered Borrower's financial statements.

         Section 5.14 Insurance. Borrower has in force paid insurance as
required by the Mortgages and, generally, Borrower has in force paid insurance
with financially sound and reputable insurance companies or associations in such
amounts and covering such risks as are usually carried by companies engaged in
the same type of business and similarly situated.

         Section 5.15 Accuracy of Information: Full Disclosure. Neither this
Agreement nor any documents, financial statements, reports, notices, schedules,
certificates, statements or other writings furnished by or on behalf of Borrower
to Administrative Agent or any Lender in connection with the negotiation of this
Agreement or the other Loan Documents or the consummation of the transactions
contemplated hereby, or required herein or by the other Loan Documents to be
furnished by or on behalf of Borrower (other than projections which are made by
Borrower in good faith), contains any untrue or misleading statement of a
material fact or omits a material fact necessary to make the statements herein
or therein not misleading. There is no fact which Borrower has not disclosed to
Administrative Agent and Lenders in writing which materially affects adversely
or, so far as Borrower can now foresee, will materially affect adversely any of
the Mortgaged Property under the Mortgages or the business, prospects, profits
or financial condition of Borrower or the ability of Borrower to perform this
Agreement and the other Loan Documents.

         Section 5.16 Separate Tax and Zoning Lot. Each Property constitutes a
distinct parcel for purposes of zoning and of taxes, assessments and impositions
(public or private) and is not otherwise considered as part of a larger single
lot for purposes of zoning or of taxes, assessments or impositions (public or
private).

         Section 5.17 Zoning and other Laws: Covenants and Restrictions. As to
each Property, (i) the Improvements and the uses thereof comply with applicable
zoning, environmental, ecological, landmark and other applicable Laws, and all
requirements for such uses have been satisfied and (ii) Borrower and the
Property are in compliance with all applicable restrictions and covenants.

         Section 5.18 Utilities Available . As to each Property, all utility
services necessary for the operation of the Improvements for their intended
purposes are available and servicing the Property, including water supply, storm
and sanitary sewer, gas, electric power and telephone facilities.

         Section 5.19 Creation of Lien . It has entered into no contract or
arrangement of any kind the performance of which by the other party thereto
would give rise to a Lien on all or part of the Mortgaged Property prior to any
Mortgage.

         Section 5.20 Roads. As to each Property, all roads necessary for the
full utilization of the Improvements for their intended purposes have been
completed and dedicated to public use and accepted by all appropriate
Governmental Authorities.

                                       28
<PAGE>

         Section 5.21 Premises Documents and Leases. As to each Property, the
Premises Documents and all leases are unmodified and in full force and effect,
there are no defaults under any thereof, and all conditions to the effectiveness
and continuing effectiveness thereof required to be satisfied as of the date
hereof have been satisfied.

                                   ARTICLE VI

                              AFFIRMATIVE COVENANTS

         So long as any of the Notes shall remain unpaid or the Loan Commitments
remain in effect, or any other amount is owing by Borrower to Administrative
Agent or any Lender under any Loan Document or otherwise in respect of the
Loans, Borrower shall:

         Section 6.01 Maintenance of Existence. Preserve and maintain its legal
existence and good standing in the jurisdictions of its organization and (in the
case of Borrower only) where each Property is located, and qualify and remain
qualified as a foreign entity in each other jurisdiction in which such
qualification is required.

         Section 6.02 Maintenance of Records. Keep adequate records and books of
account, in which complete entries will be made reflecting all of its financial
transactions, in accordance with GAAP.

         Section 6.03 Maintenance of Insurance. At all times, maintain and keep
in force (i) (in the case of Borrower only) the insurance required by each of
the Mortgages and (ii) insurance with financially sound and reputable insurance
companies or associations in such amounts and covering such risks as are usually
carried by companies engaged in the same type of business and similarly
situated, which insurance shall be acceptable to Administrative Agent and may
provide for reasonable deductibility from coverage thereof

         Section 6.04 Compliance with Laws: Payment of Taxes. Comply in all
respects with all Laws applicable to it or to any of its properties or any part
thereof, such compliance to include, without limitation, paying before the same
become delinquent all taxes, assessments and governmental charges imposed upon
it or upon its property, except to the extent they are the subject of a Good
Faith Contest.

         Section 6.05 Right of Inspection. At any reasonable time and from time
to time upon reasonable notice, permit Administrative Agent or any Lender or any
agent or representative thereof to examine and make copies and abstracts from
its records and books of account and visit and inspect its properties and to
discuss its affairs, finances and accounts with the independent accountants of
Borrower; and cooperate with the Engineering Consultant to enable it to perform
its functions hereunder.

         Section 6.06 Compliance With Environmental Laws. Comply in all material
respects with all applicable Environmental Laws and timely pay or cause to be
paid all costs and expenses incurred in connection with such compliance, except
to the extent the same are the subject of a Good Faith Contest; and (in the case

                                       29
<PAGE>

of Borrower only) at its sole cost and expense, promptly remove, or cause the
removal of, any and all Hazardous Materials or the effects thereof at any time
identified as being on, in, under or affecting any Property or the Improvements
thereon in violation of applicable Environmental Law.

         Section 6.07 Maintenance of Properties. Do all things reasonably
necessary to maintain, preserve, protect and keep its properties in good repair,
working order and condition.

         Section 6.08 Payment of Costs. Pay all costs and expenses required for
the satisfaction of the conditions of this Agreement, including, without
limitation, (i) all document and stamp taxes, recording and filing expenses and
fees and commissions lawfully due to brokers in connection with the transactions
contemplated hereby and (ii) any taxes, assessments, impositions (public or
private), insurance premiums, Liens, security interests or other claims or
charges against any Property.

         Section 6.09 Reporting and Miscellaneous Document Requirements. Furnish
directly to each Lender:

         (1) Annual Financial Statements. As soon as available and in any event
     within one hundred (100) days after the end of each Fiscal Year, financial
     statements of General Partner of Borrower as of the end of and for such
     Fiscal Year, in reasonable detail and stating in comparative form the
     respective figures for the corresponding date and period in the prior
     Fiscal Year, audited by its Accountants;

         (2) Notice of Litigation. Promptly after the commencement and
     knowledge thereof, notice of all actions, suits, and proceedings before any
     court or arbitrator or any Governmental Authority, affecting (i) Borrower
     which, if determined adversely to Borrower are likely to result in a
     Material Adverse Change or (ii) all or any portion of the Mortgaged
     Property under any Mortgage;

         (3) Notices of Defaults and Events of Default. As soon as possible and
     in any event within ten (10) days after Borrower becomes aware of the
     occurrence of a material Default or any Event of Default, a written notice
     setting forth the details of such Default or Event of Default and the
     action which is proposed to be taken with respect thereto;

         (4) Material Adverse Change As soon as is practicable and in any event
     within five (5) days after knowledge of the occurrence of any event or
     circumstance which is likely to result in or has resulted in a Material
     Adverse Change, written notice thereof;

         (5) Offices. Thirty (30) days' prior written notice of any change in
     the chief executive office or principal place of business of Borrower;

                                       30
<PAGE>

         (6) Environmental and Other Notices. As soon as possible and in any
     event within ten (10) days after receipt, copies of (i) all Environmental
     Notices received by Borrower which are not received in the ordinary course
     of business and which relate to any Property or a situation which is likely
     to result in a Material Adverse Change and (ii) all reports of any official
     searches made by any Governmental Authority having jurisdiction over any
     Property or the Improvements thereon, and of any claims of violations
     thereof,

         (7) Insurance Coverage. Promptly, such information concerning
     Borrower's insurance coverage as Administrative Agent may reasonably
     request;

         (8) Bankruptcy of Tenants. Promptly after becoming aware of the same,
     written notice of the bankruptcy, insolvency or cessation of operations of
     any tenant in the Improvements on any Property to which 5% or more of the
     aggregate minimum rent from such Improvements is attributable;

         (9) Leasing Reports and Property Information. As soon as available and
     in any event within ninety (90) days after the end of each Fiscal Year, a
     rent roll, leasing report, tenant sales report and operating and cash
     statements for each Property; and

         (10) General Information. Promptly, such other information respecting
     the condition or operations, financial or otherwise, of Borrower or any
     properties of Borrower as Administrative Agent may from time to time
     reasonably request.

         Section 6. 10 Continuing Accuracy of Representations an Warranties.
Cause all of the representations and warranties made to Administrative Agent or
Lenders herein and in the other Loan Documents to be continuously true and
correct.

         Section 6. 11 Premises Documents: Leases. As to each Property, deliver
to Administrative Agent, promptly following the execution thereof, certified
copies of (i) all amendments or supplements to any Premises Documents or any
lease and (ii) all leases, together with (to the extent available) current
financial statements of the tenants thereunder (and of any guarantors of such
tenants' obligations), and, in the case of Major Leases, notices of assignment
in the form of EXHIBIT J; keep all Premises Documents and leases in full force
and effect and at all times do all things necessary to compel performance by the
parties to the Premises Documents or the tenants under such leases, as the case
may be, of all obligations, covenants and agreements by such parties or tenants,
as the case may be, to be performed thereunder; and not enter into or modify
(other than de minimis modifications) any Premises Documents or Major Lease
without the prior written consent of Administrative Agent.

         Section 6.12 Compliance with Covenants. Restrictions an Easements.
Comply with all restrictions, covenants and easements affecting each Property or
the Improvements thereon and cause the satisfaction of all conditions of this
Agreement.

                                       31
<PAGE>

         Section 6.13 Maintenance. Management, Service and Leasing Contracts.
Deliver to Administrative Agent, as and when executed, certified copies of all
management and leasing contracts entered into with respect to any Property, each
of which shall be entered into with a party, and on terms and conditions,
reasonably acceptable to Administrative Agent; and contemporaneously with
entering into each such contract, at Administrative Agent's option, cause each
of the foregoing to be collaterally assigned to Administrative Agent for the
benefit of Lenders as additional security for the Loans and/or cause the service
provider under each such contract to undertake, inter alia, to continue
performance on Lenders' behalf without additional cost in the event of a
Default; and keep in full force and effect and not materially modify the
management and leasing agreement(s) approved pursuant to paragraph (14) of
Section 4.01 without Administrative Agent's prior written consent.

         Section 6.14 Remedial Work. Perform the Remedial Work to the
satisfaction of the Engineering Consultant within two hundred seventy (270) days
from the date hereof

                                   ARTICLE VII

                               NEGATIVE COVENANTS

         So long as any of the Notes shall remain unpaid, or the Loan
Commitments remain in effect, or any other amount is owing by Borrower to
Administrative Agent or any Lender under any Loan Document or otherwise in
respect of the Loans, Borrower shall not do any or all of the following:

         Section 7.01 Mergers Etc. Merge or consolidate with any Person without
the prior written consent of Administrative Agent, or sell, assign, lease or
otherwise dispose of (whether in one transaction or in a series of transactions)
all or substantially all of its assets (whether now owned or hereafter acquired)
(or enter into any agreement to do any of the foregoing) provided, however, that
in the case of a merger or consolidation where the net worth of the entity
following such merger or consolidation is equal to or greater than Borrower's
net worth immediately prior thereto, Administrative Agent's consent shall not be
unreasonably withheld.

                                  ARTICLE VIII

                                EVENTS OF DEFAULT

         Section 8.01 Events of Default Any of the following events shall be an
"Event of Default":

         (1) If Borrower shall: fail to pay the principal of any Notes as and
     when due; or fail to pay interest accruing on any Notes as and when due,
     and such failure to pay shall continue unremedied for five (5) Business

                                       32
<PAGE>

     Days after the due date of such interest; or fail to pay any fee or any
     other amount due under this Agreement, any other Loan Document or the
     Supplemental Fee Letter as and when due and such failure to pay shall
     continue unremedied for two (2) Business Days after notice by
     Administrative Agent of such failure to pay; or

         (2) If any representation or warranty made by Borrower in this
     Agreement or in any other Loan Document or which is contained in any
     certificate, document, opinion, financial or other statement furnished at
     any time under or in connection with a Loan Document shall prove to have
     been incorrect in any material respect on or as of the date made; or

         (3) If Borrower shall fail to perform or observe any term, covenant or
     agreement contained in this Agreement (other than obligations specifically
     referred to elsewhere in this Section 8.01) or any other Loan Document, or
     any other document executed by Borrower and delivered to Administrative
     Agent or Lenders in connection with the transactions contemplated hereby
     and such failure under this clause shall remain unremedied for thirty (30)
     consecutive days after notice thereof to Borrower (or such shorter cure
     period as may be expressly prescribed in the applicable document); provide
     , however , that if any such default under clause (ii) above cannot by its
     nature be cured within such thirty (30) day, or shorter, as the case may
     be, grace period and so long as Borrower shall have commenced cure within
     such thirty (30) day, or shorter, as the case may be, grace period and
     shall, at all times thereafter, diligently prosecute the same to
     completion, Borrower shall have an additional period, not to exceed sixty
     (60) days, to cure such default; in no event, however, is the foregoing
     intended to effect an extension of the Maturity Date; or

         (4) If Borrower shall fail (i) to pay any Debt (other than the payment
     obligations described in paragraph (1) of this Section) in an amount equal
     to or greater than $250,000 in any such case when due (whether by scheduled
     maturity, required prepayment, acceleration, demand, or otherwise) after
     the expiration of any applicable grace period; or (ii) to perform or
     observe any material term, covenant, or condition under any agreement or
     instrument relating to any such Debt, when required to be performed or
     observed, if the effect of such failure to perform or observe is to
     accelerate, or to permit the acceleration of, after the giving of notice or
     the lapse of time, or both, the maturity of such Debt, or any such Debt
     shall be declared to be due and payable, or required to be prepaid (other
     than by a regularly scheduled or otherwise required prepayment), prior to
     the stated maturity thereof; or

         (5) If Borrower shall (i) generally not, or be unable to, or shall
     admit in writing its inability to, pay its debts as such debts become due;
     or (ii) make an assignment for the benefit of creditors, petition or apply
     to any tribunal for the appointment of a custodian, receiver or trustee for
     it, all or any portion of any Property or a substantial part of its other
     assets; or (iii) commence any proceeding under any bankruptcy,
     reorganization, arrangement, readjustment of debt, dissolution or
     liquidation Law of any jurisdiction, whether now or hereafter in effect; or

                                       33
<PAGE>

     (iv) have had any such petition or application filed or any such proceeding
     shall have been commenced, against it or all or any portion of any
     Property, in which an adjudication or appointment is made or order for
     relief is entered, or which petition, application or proceeding remains
     undismissed or unstayed for a period of ninety (90) days or more; or (v) be
     the subject of any proceeding under which all or any portion of any
     Property or all or a substantial part of its other assets may be subject to
     seizure, forfeiture or divestiture; or (vi) by any act or omission indicate
     its consent to, approval of or acquiescence in any such petition,
     application or proceeding or order for relief or the appointment of a
     custodian, receiver or trustee for all or any portion of any Property or
     all or any substantial part of its other property; or (vii) suffer any such
     custodianship, receivership or trusteeship for all or any portion of any
     Property or all or any substantial part of its other property, to continue
     undischarged for a period of ninety (90) days or more; or

         (6) If one or more judgments, decrees or orders for the payment of
     money in excess of $250,000 (excluding any such judgments, decrees or
     orders which are fully covered by insurance) in the aggregate shall be
     rendered against Borrower, and any such judgments, decrees or orders shall
     continue unsatisfied and in effect for a period of thirty (30) consecutive
     days without being vacated, discharged, satisfied or stayed or bonded
     pending appeal; or

         (7) If any of the following events shall occur or exist with respect to
     Borrower or any ERISA Affiliate: (i) any Prohibited Transaction involving
     any Plan; (ii) any Reportable Event with respect to any Plan; (iii) the
     filing under Section 4041 of ERISA of a notice of intent to terminate any
     Plan or the termination of any Plan; (iv) any event or circumstance which
     would constitute grounds for the termination of, or for the appointment of
     a trustee to administer, any Plan under Section 4042 of ERISA, or the
     institution by the PBGC of proceedings for any such termination or
     appointment under Section 4042 of ERISA; or (v) complete or partial
     withdrawal under Section 4201 or 4204 of ERISA from a Multiemployer Plan or
     the reorganization, insolvency, or termination of any Multiemployer Plan;
     and in each case above, if such event or conditions, if any, could in the
     reasonable opinion of any Lender subject Borrower to any tax, penalty, or
     other liability to a Plan, Multiemployer Plan, the PBGC or otherwise (or
     any combination thereof) which in the aggregate exceeds or is likely to
     exceed $50,000; or

         (8) If any Mortgage shall at any time and for any reason cease to
     create a valid and perfected first priority Lien on the Mortgaged Property
     purported to be subject thereto or to be in full force and effect; or shall
     be declared null and void; or the validity or enforceability thereof shall
     be contested by any party thereto, or any party thereto shall deny any
     further liability or obligation thereunder; or

         (9) If an "Event of Default" shall occur under any Mort gage (as such
     quoted term is defined therein).

         Section 8.02 Remedies. If any Event of Default shall occur and be
continuing, Administrative Agent shall, upon request of the Required Lenders,
(i) declare the outstanding balance of the Notes, all interest thereon, and all

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<PAGE>

other amounts payable under this Agreement and the other Loan Documents to be
forthwith due and payable, whereupon such balance, all such interest, and all
such amounts due under this Agreement and under the other Loan Documents shall
become and be forthwith due and payable, without presentment, demand, protest,
or further notice of any kind, all of which are hereby expressly waived by
Borrower and/or (ii) exercise any remedies provided in any of the Loan Documents
or by Law.

                                   ARTICLE IX

                  ADMINISTRATIVE AGENT; RELATIONS AMONG LENDERS

         Section 9.01 Appointment. Powers and Immunities of Administrative Agent
Each Lender hereby irrevocably appoints and authorizes Administrative Agent to
act as its agent hereunder and under any other Loan Document with such powers as
are specifically delegated to Administrative Agent by the terms of this
Agreement and any other Loan Document, together with such other powers as are
reasonably incidental thereto. Administrative Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement and any
other Loan Document or required by Law, and shall not by reason of this
Agreement be a fiduciary or trustee for any Lender except to the extent that
Administrative Agent acts as an agent with respect to the receipt or payment of
funds (nor shall Administrative Agent have any fiduciary duty to Borrower nor
shall any Lender have any fiduciary duty to Borrower or to any other Lender). No
implied covenants, responsibilities, duties, obligations or liabilities shall be
read into this Agreement or other-wise exist against Administrative Agent.
Neither Administrative Agent nor any of its directors, officers, employees,
agents, attorneys-in-fact or Affiliates shall be responsible to any Lender for
any recitals, statements, representations or warranties made by Borrower or any
officer, partner or official of Borrower or any other Person contained in this
Agreement or any other Loan Document, or in any certificate or other document or
instrument referred to or provided for in, or received by any of them under,
this Agreement or any other Loan Document, or for the value, legality, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document or any other document or instrument referred to or
provided for herein or therein, for the perfection or priority of any Lien
securing the Obligations or for any failure by Borrower to perform any of its
obligations hereunder or thereunder. Administrative Agent may employ agents and
attorneys-in-fact and shall not be responsible, except as to money or securities
received by it or its authorized agents, for the negligence or misconduct of any
such agents or attorneys-in-fact selected by it with reasonable care. Neither
Administrative Agent nor any of its directors, officers, employees, agents,
attorneys-in-fact or Affiliates shall be liable or responsible for any action
taken or omitted to be taken by it or them hereunder or under any other Loan
Document or in connection herewith or therewith, except for its or their own
gross negligence or willful misconduct.

         Section 9.02 Reliance by Administrative Agent . Administrative Agent
shall be entitled to rely upon any certification, notice or other communication

                                       35
<PAGE>

(including any thereof by telephone, telex, telegram or cable) believed by it to
be genuine and correct and to have been signed or sent by or on behalf of the
proper Person or Persons, and upon advice and statements of legal counsel,
independent accountants and other experts selected by Administrative Agent.
Administrative Agent may deem and treat each Lender as the holder of the Loan
made by it for all purposes hereof and shall not be required to deal with any
Person who has acquired a Participation in any Loan or Participation from a
Lender. As to any matters not expressly provided for by this Agreement or any
other Loan Document, Administrative Agent shall in all cases be fully protected
in acting, or in refraining from acting, hereunder in accordance with
instructions signed by the Required Lenders, and such instructions of the
Required Lenders and any action taken or failure to act pursuant thereto shall
be binding on all Lenders and any other holder of all or any portion of any Loan
or Participation.

         Section 9.03 Defaults. Administrative Agent shall not be deemed to have
knowledge of the occurrence of a Default or Event of Default unless
Administrative Agent has actual knowledge thereof or has received notice from a
Lender or Borrower specifying such Default or Event of Default and stating that
such notice is a "Notice of Default." In the event that Administrative Agent has
such actual knowledge or receives such a notice of the occurrence of a Default
or Event of Default, Administrative Agent shall give prompt notice thereof to
Lenders. Administrative Agent shall promptly send to each Lender a copy of any
notice of Default or Event of Default that Administrative Agent sends to
Borrower. Administrative Agent, following consultation with Lenders, shall
(subject to Section 9.07) take such action with respect to such Default or Event
of Default which is continuing as shall be directed by the Required Lenders;
provided , however , that, unless and until Administrative Agent shall have
received such directions, Administrative Agent may take such action, or refrain
from taking such action, with respect to such Default or Event of Default as it
shall deem advisable in the best interest of Lenders. In no event shall
Administrative Agent be required to take any such action which it determines to
be contrary to the Loan Documents or to Law. Each Lender acknowledges and agrees
that no individual Lender may separately enforce or exercise any of the
provisions of any of the Loan Documents (including, without limitation, the
Notes) other than through Administrative Agent.

         Section 9.04 Rights of Administrative Agent as a Lender. With respect
to its Loan Commitment and the Loan provided by it, Administrative Agent in its
capacity as a Lender hereunder shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it were not acting as
Administrative Agent, and the term "Lender" or "Lenders" shall include
Administrative Agent in its capacity as a Lender. Administrative Agent and its
Affiliates may (without having to account therefor to any Lender) accept
deposits from, lend money to (on a secured or unsecured basis), and generally
engage in any kind of banking, trust or other business with Borrower (and any
Affiliates of Borrower) as if it were not acting as Administrative Agent.

         Section 9.05 Sharing of Costs by Lenders* Indemnification of
Administrative Age. Each Lender agrees to pay its ratable share, based on the
respective outstanding principal balances under its Note and the other Notes, of
any expenses incurred (and not paid or reimbursed by Borrower after demand for
payment is made by Administrative Agent) by or on behalf of Lenders in

                                       36
<PAGE>

connection with any Default or Event of Default, including, without limitation,
costs of enforcement of the Loan Documents and any advances to pay taxes or
insurance premiums or otherwise to preserve the Lien of any of the Mortgages or
to preserve or protect any Mortgaged Property. In the event a Lender fails to
pay its share of expenses as aforesaid, and all or a portion of such unpaid
amount is paid by Administrative Agent and/or one or more of the other Lenders,
then the defaulting Lender shall reimburse Administrative Agent and/or the other
Lender(s) for the portion of such unpaid amount paid by it or them, as the case
may be, together with interest thereon at the Base Rate from the date of payment
by Administrative Agent and/or the other Lender(s). In addition, each Lender
agrees to indemnify Administrative Agent (to the extent not reimbursed under
Section 11.04 or under other applicable provisions of any Loan Document, but
without limiting the obligations of Borrower under Section 11.04 or such other
provisions), for its ratable share, based upon the outstanding principal
balances under its Note and the other Notes, of any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever which may be imposed
on, incurred by or asserted against Administrative Agent in any way relating to
or arising out of this Agreement, any other Loan Document or any other documents
contemplated by or referred to herein or the transactions contemplated hereby or
thereby (including, without limitation, the costs and expenses which Borrower is
obligated to pay under Section 11.04 or under any other applicable provisions of
any other Loan Document) or the enforcement of any of the terms hereof or
thereof or of any such other documents or instruments; provide , however , that
no Lender shall be liable for (i) any of the foregoing to the extent they arise
from the gross negligence or willful misconduct of the party to be indemnified,
or (ii) any loss of principal or interest with respect to Administrative Agent's
Loan.

         Section 9.06 Non-Reliance on Administrative Agent and Other Lender Each
Lender agrees that it has, independently and without reliance on Administrative
Agent or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own analysis of the collateral for the Loans and of
the credit of Borrower, and its own decision to enter into this Agreement and
that it will, independently and without reliance upon Administrative Agent or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or any other Loan Document.
Administrative Agent shall not be required to keep itself informed as to the
performance or observance by Borrower of this Agreement or any other Loan
Document or any other document referred to or provided for herein or therein or
to inspect the properties (including, without limitation, any Property) or books
of Borrower. Except for notices, reports and other documents and information
expressly required to be furnished to Lenders by Administrative Agent hereunder,
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the affairs, financial
condition or business of Borrower (or any Affiliate of Borrower) which may come
into the possession of Administrative Agent or any of its Affiliates.
Administrative Agent shall not be required to file this Agreement, any other
Loan Document or any document or instrument referred to herein or therein, for
record or give notice of this Agreement, any other Loan Document or any document
or instrument referred to herein or therein, to anyone.

                                       37
<PAGE>

         Section 9.07 Failure of Administrative Agent to Act. Except for action
expressly required of Administrative Agent hereunder, Administrative Agent shall
in all cases be fully justified in failing or refusing to act hereunder unless
it shall have received further assurances (which may include cash collateral) of
the indemnification obligations of Lenders under Section 9.05 in respect of any
and all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. If any indemnity furnished to Administrative
Agent for any purpose shall, in the opinion of Administrative Agent, be
insufficient or become impaired, Administrative Agent may call for an additional
indemnity and cease, or not commence, the action indemnified against until such
additional indemnity is furnished.

         Section 9.08 Resignation or Removal of Administrative Agent
Administrative Agent may resign on at least thirty (30) days' written notice to
Lenders and Borrower or upon the occurrence of an Event of Default.
Administrative Agent may be removed at any time with cause by the Required
Lenders, provided that Borrower and the other Lenders shall be promptly notified
thereof. Upon any such resignation or removal of Administrative Agent, the
Required Lenders shall have the right to appoint a successor Administrative
Agent which successor Administrative Agent, so long as it is reasonably
acceptable to the Required Lenders, shall be that Lender then having the
greatest Loan Commitment. If no successor Administrative Agent shall have been
so appointed by the Required Lenders and shall have accepted such appointment
within twenty (20) days after the Required Lenders' removal of the retiring
Administrative Agent, then the retiring Administrative Agent may, on behalf of
Lenders, appoint a successor Administrative Agent, which shall be one of
Lenders. The Required Lenders or the retiring Administrative Agent, as the case
may be, shall upon the appointment of a successor Administrative Agent promptly
so notify Borrower and the other Lenders. Upon the acceptance of any appointment
as Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder. After any retiring Administrative Agent's removal
hereunder as Administrative Agent, the provisions of this Article IX shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Administrative Agent.

         Section 9.09 Amendments Concerning Agency Function Notwithstanding
anything to the contrary contained herein, Administrative Agent shall not be
bound by any waiver, amendment, supplement or modification hereof or of any
other Loan Document which affects its duties, rights, and/or functions hereunder
or thereunder unless it shall have given its prior written consent thereto.

         Section 9. 10 Liability of Administrative Agent . Administrative Agent
shall not have any liabilities or responsibilities to Borrower on account of the
failure of any Lender to perform its obligations hereunder or to any Lender on
account of the failure of Borrower to perform its obligations hereunder or under
any other Loan Document.

                                       38
<PAGE>

         Section 9.11 Transfer of Agency Function. Without the consent of
Borrower or any Lender, Administrative Agent may at any time or from time to
time transfer its functions as Administrative Agent hereunder to any of its
offices wherever located in the United States, provide that Administrative Agent
shall promptly notify Borrower and Lenders thereof

         Section 9.12 Non-Receipt of Funds by Administrative Agent: Adjustments.

         (a) Unless Administrative Agent shall have received notice from a
Lender or Borrower (either one as appropriate being the "Payor") prior to the
date on which such Lender is to make payment hereunder to Administrative Agent
of the proceeds of a Loan or Borrower is to make payment to Administrative
Agent, as the case may be (either such payment being a "Required Payment"),
which notice shall be effective upon receipt, that the Payor will not make the
Required Payment in full to Administrative Agent, Administrative Agent may
assume that the Required Payment has been made in full to Administrative Agent
on such date, and Administrative Agent in its sole discretion may, but shall not
be obligated to, in reliance upon such assumption, make the amount thereof
available to the intended recipient on such date. If and to the extent the Payor
shall not have in fact so made the Required Payment in full to Administrative
Agent, the recipient of such payment shall repay to Administrative Agent
forthwith on demand such amount made available to it together with interest
thereon, for each day from the date such amount was so made available by
Administrative Agent until the date Administrative Agent recovers such amount,
at the Federal Funds Rate for three (3) Business Days and thereafter at the
Prime Based Rate.

         (b) If, after Administrative Agent has paid each Lender's share of any
payment received or applied by Administrative Agent in respect of the Loan, that
payment is rescinded or must otherwise be returned or paid over by
Administrative Agent, whether pursuant to any bankruptcy or insolvency Law,
sharing of payments clause of any loan agreement or otherwise, such Lender
shall, at Administrative Agent's request, promptly return its share of such
payment or application to Administrative Agent, together with such Lender's
proportionate share of any interest or other amount required to be paid by
Administrative Agent with respect to such payment or application. In addition,
if a court of competent jurisdiction shall adjudge that any amount received and
distributed by Administrative Agent is to be repaid, each Person to whom any
such distribution shall have been made shall either repay to Administrative
Agent its share of the amount so adjudged to be repaid or shall pay over the
same in such manner and to such Persons as shall be determined by such court.

         Section 9.13 Withholding Taxes. Each Lender represents that it is
entitled to receive any payments to be made to it hereunder without the
withholding of any tax and will furnish to Administrative Agent such forms,
certifications, statements and other documents as Administrative Agent may
request from time to time to evidence such Lender's exemption from the
withholding of any tax imposed by any jurisdiction or to enable Administrative

                                       39
<PAGE>

Agent or Borrower to comply with any applicable Laws relating thereto. Without
limiting the effect of the foregoing, if any Lender is not created or organized
under the Laws of the United States or any state thereof, such Lender will
furnish to Administrative Agent a U.S. Internal Revenue Service Form W-8ECI in
respect of all payments to be made to such Lender by Borrower or Administrative
Agent under this Agreement or any other Loan Document or a U.S. Internal Revenue
Service Form W-8BEN establishing such Lender's complete exemption from United
States withholding tax in respect of payments to be made to such Lender by
Borrower or Administrative Agent under this Agreement or any other Loan
Document, or such other forms, certifications, statements or documents, duly
executed and completed by such Lender as evidence of such Lender's exemption
from the withholding of U.S. tax with respect thereto. Administrative Agent
shall not be obligated to make any payments hereunder to such Lender in respect
of any Loan or Participation or such Lender's Loan Commitment or obligation to
purchase Participations until such Lender shall have furnished to Administrative
Agent the requested form, certification, statement or document.

         Section 9.14 Pro Rata Treatment. Except to the extent otherwise
provided, the advance of proceeds of the Loans shall be made by Lenders shall be
made for the account of Lenders, ratably according to the amounts of their
respective Loan Commitments.

         Section 9.15 Sharing of Payments Among Lenders. If a Lender shall
obtain payment of any principal of or interest on any Loan made by it through
the exercise of any right of setoff, banker's lien, counterclaim, or by any
other means (including direct payment), and such payment results in such Lender
receiving a greater payment than it would have been entitled to had such payment
been paid directly to Administrative Agent for disbursement to Lenders, then
such Lender shall promptly purchase for cash from the other Lenders
Participations in the Loans made by the other Lenders in such amounts, and make
such other adjustments from time to time as shall be equitable to the end that
all Lenders shall share ratably the benefit of such payment. To such end,
Lenders shall make appropriate adjustments among themselves (by the resale of
Participations sold or otherwise) if such payment is rescinded or must otherwise
be restored.

         Section 9.16 Possession of Document. Each Lender shall keep possession
of its own Note. Administrative Agent shall hold all the other Loan Documents
and related documents in its possession and maintain separate records and
accounts with respect thereto, and shall permit Lenders and their
representatives access at all reasonable times to inspect such Loan Documents,
related documents, records and accounts.

         Section 9.17 Minimum Commitment by The Dim. Until the earlier to occur
of (i) twelve (12) months from the Closing Date or (ii) the date upon which the
Loan has been fully funded or Borrower is otherwise no longer entitled to
request Advances, The Dime agrees that it shall retain a Loan Commitment of
$59,000,000 and thereafter The Dime hereby agrees to maintain a Loan Commitment
in an amount no less than $20,650,000, and further agrees to hold and not to
participate or assign any of such amount other than an assignment to a Federal
Reserve Bank or to the Parent.

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<PAGE>

                                    ARTICLE X

                              NATURE OF OBLIGATIONS

         Section 10.01 Absolute and Unconditional Obligations. Borrower
acknowledges and agrees that its obligations and liabilities under this
Agreement and under the other Loan Documents shall be absolute and unconditional
irrespective of (i) any lack of validity or enforceability of any of the
Obligations, any Loan Documents or any agreement or instrument relating thereto,
(ii) any change in the time, manner or place of payment of, or in any other term
in respect of, all or any of the Obligations, or any other amendment or waiver
of or consent to any departure from any Loan Documents or any other documents or
instruments executed in connection with or related to the Obligations, (iii) any
exchange or release of any collateral, if any, or of any other Person from all
or any of the Obligations or (iv) any other circumstances which might otherwise
constitute a defense available to, or a discharge of, Borrower or any other
Person in respect of the Obligations.

         The Obligations shall not be conditioned or contingent upon the pursuit
by any Lender or any other Person at any time of any right or remedy against
Borrower or any other Person which may be or become liable in respect of all or
any part of the Obligations or against any collateral or security or guarantee
therefor or right of setoff with respect thereto.

         Section 10.02 Exculpation, Neither Borrower nor any Principal of
Borrower shall be personally liable for payment of the principal of the Note or
interest thereon, and in the event of any failure by Borrower to pay any portion
of such principal or interest, Lenders will look, with respect to the then
outstanding balance of such principal and interest, solely to the Mortgaged
Property and such other collateral as has been, or hereafter shall be, given to
secure payment of the Note. The foregoing limitation on liability shall not
impair or otherwise affect the validity or enforceability of (a) the debt
evidenced by the Note or the Loan Agreement or of any other obligations
evidenced by the Note, the Loan Agreement, the Mortgage or any of the Loan
Documents or (b) Lenders' liens, security interests, rights and remedies
(including, without limitation, the remedies of foreclosure and/or sale) with
respect to the Mortgaged Property or any other property, security, collateral
and/or assets (including the proceeds thereof) encumbered, pledged or assigned
by the Mortgages or any other security for the Loan. In addition, the foregoing
limitation on liability shall not limit anyone's obligations or be applicable
with respect to: (i) liability under any guaranty(ies) or indemnity(ies)
delivered or afforded to Lenders; (ii) any fraud or material misrepresentation;
(iii) taxes of any kind (whether characterized as transfer, gains or other
taxes) payable in connection with the foreclosure sale of the Mortgaged
Property, irrespective of who pays such taxes; (iv) application of any proceeds
of the Loan to any purpose other than as provided in the Loan Documents; (v) the
application of any insurance or condemnation proceeds or other funds or payments
other than strictly in accordance with the Loan Documents; (vi) the

                                       41
<PAGE>

misapplication of any security deposits; (vii) rents, sales proceeds, or other
sums received after default under the Loan Documents which are not applied to
expenses of operating the Mortgaged Property or paid to Administrative Agent for
the account of Lenders or a duly appointed receiver of the Premises; (viii) any
failure to deliver to Administrative Agent or Lenders, after demand therefor,
any agreements relating to the operation, management, leasing, use, occupancy or
construction of the Mortgaged Property; (ix) any intentional physical waste in
respect of the Mortgaged Property; (x) any failure to pay or discharge any real
estate tax, other tax, assessment, fine, penalty or lien against the Mortgaged
Property to the extent revenue from leases of the Mortgaged Property was
available to pay same; (xi) liability to Lenders for the reimbursement to
Administrative Agent, for the account of Lenders, together with interest as
provided in the Loan Documents, of all sums advanced or expended by Lenders
after or in respect of any default under the Loan Documents; (xii) liability as
landlord under any lease(s) relating to the Mortgaged Property which Lenders are
or become obligated for by virtue of Lenders succeeding to the interests of
Borrower; (xiii) liability under any agreement relating to the operation or
maintenance of the Mortgaged Property which Lenders are or become obligated for
by virtue of Lenders succeeding to the interests of Borrower; (xiv) liability to
pay for the premiums on and keep in full force and effect insurance in respect
of the Mortgaged Property in accordance with the Loan Documents to the extent
revenue from leases of the Mortgaged Property was available to pay same; or (xv)
liability for Hazardous Substances that may exist upon or be discharged from the
Mortgaged Property. Borrower and any Principal of Borrower shall in any event be
and shall remain personally liable for each of the matters to which reference is
made in the preceding sentence and Lenders may seek, obtain and enforce one or
more money judgments in any appropriate proceeding(s) with respect thereto. The
limitation on personal liability contained in this paragraph shall become
automatically null and void and shall be of no further force or effect, and
Borrower and each Principal of Borrower shall be and remain personally liable
for payment of the principal of the Note and interest thereon, in accordance
with the terms and provisions of this Loan Agreement, in the event that
Borrower, or anyone acting on behalf of Borrower, shall (A) file a petition or
answer seeking any relief of any kind under the bankruptcy laws of the United
States (or if an Insolvency Event shall otherwise occur), (B) assert in writing
or in any legal proceedings of any kind that any provisions of any of the Loan
Documents are in whole or in part unenforceable, invalid or not legally binding,
or (C) fail fully to cooperate with Administrative Agent or a receiver in
Administrative Agent's or such receiver's efforts to collect Rents directly from
tenants after a default under the Loan Documents.

                                   ARTICLE XI

                                  MISCELLANEOUS

         Section 11.01 Binding Effect of Request for Advance Borrower agrees
that, by its acceptance of the advance of proceeds of the Loans under this
Agreement, it shall be bound in all respects by the request for advance
submitted on its behalf in connection therewith with the same force and effect
as if Borrower had itself executed and submitted the request for advance and
whether or not the request for advance is executed and/or submitted by an
authorized person.

                                       42
<PAGE>

         Section 11.02 Amendments and Waivers. No amendment or material waiver
of any provision of this Agreement or any other Loan Document nor consent to any
material departure by Borrower therefrom shall in any event be effective unless
the same shall be in writing and signed by the Required Lenders and, solely for
purposes of its acknowledgment thereof, Administrative Agent, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provide , however , that no amendment, waiver
or consent shall, unless in writing and signed by all Lenders do any of the
following: (i) reduce the principal of, or interest on, the Notes or any fees
due hereunder or any other amount due hereunder or under any other Loan
Document; (ii) postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees due hereunder or under any other Loan
Document; (iii) change the definition of Required Lenders; (iv) amend this
Section or any other provision requiring the consent of all Lenders; (v) waive
any default under paragraph (5) of Section 8.01; (vi) release, in whole or in
part, any guarantor of Borrower's obligations under the Loans other than in
accordance with the Loan Documents; or (vii) release any material portion of the
Mortgaged Property under any Mortgage or of any other collateral now or
hereafter given for the Loans other than in accordance with the Loan Documents.
Any advance of proceeds of the Loans made prior to or without the fulfillment by
Borrower of all of the conditions precedent thereto, whether or not known to
Administrative Agent and Lenders, shall not constitute a waiver of the
requirement that all conditions, including the non-performed conditions, shall
be required with respect to all future advances, if any. No failure on the part
of Administrative Agent or any Lender to exercise, and no delay in exercising,
any right hereunder shall operate as a waiver thereof or preclude any other or
further exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by Law.

         All communications from Administrative Agent to Lenders requesting
Lenders' determination, consent, approval or disapproval (x) shall be given in
the form of a written notice to each Lender, (y) shall be accompanied by or
include a description or copy of the matter or thing as to which such
determination, approval, consent or disapproval is requested and (z) shall
include Administrative Agent's recommended course of action or determination in
respect thereof. Each Lender shall reply promptly, but in any event within ten
(10) Business Days (or five (5) Business Days with respect to any decision to
accelerate or stop acceleration of the Loans) after receipt of the request
therefor by Administrative Agent (the "Lender Reply Period"). Unless a Lender
shall give written notice to Administrative Agent that it objects to the
recommendation or determination of Administrative Agent (together with a written
explanation of the reasons behind such objection) within the Lender Reply
Period, such Lender shall be deemed to have approved or consented to such
recommendation or determination.

         Section 11.03 Usury. Anything herein to the contrary notwithstanding,
the obligations of Borrower under this Agreement and the Notes shall be subject
to the limitation that payments of interest shall not be required to the extent
that receipt thereof would be contrary to provisions of Law applicable to a
Lender limiting rates of interest which may be charged or collected by such
Lender.

                                       43
<PAGE>

         Section 11.04 Expenses: Indemnification. Borrower covenants and agrees
to pay all reasonable costs, expenses and charges (including, without
limitation, all reasonable fees and expenses of counsel, engineers, appraisers
and consultants) incurred by Administrative Agent in connection with (i) the
preparation for and consummation of the transactions contemplated hereby or for
the performance hereof and of the other Loan Documents, and for any services
which may be required in addition to those normally and reasonably contemplated
hereby and (ii) the enforcement hereof or of any or all of the other Loan
Documents; provide , however, that Borrower shall not be responsible for (x) the
fees and expenses of legal counsel for any Lender other than The Dime incurred
in connection with said counsel's review of this Agreement and the other Loan
Documents prior to execution and (y) costs, expenses and charges incurred by
Administrative Agent and Lenders in connection with the administration or
syndication of the Loan. In connection with the foregoing, Lenders agree, to the
extent practicable, to appoint a single counsel and local counsel, selected by
Administrative Agent, to act on behalf of all Lenders in connection with the
enforcement of the Loan Documents. If Borrower fails to pay promptly any costs,
charges or expense required to be paid by it as aforesaid, and Administrative
Agent or any Lender pays such costs, charges or expenses, Borrower shall
reimburse Administrative Agent or such Lender, as appropriate, on demand for the
amounts so paid, together with interest thereon at the Default Rate for Prime
Based Loans from the date of demand. Borrower agrees to indemnify Administrative
Agent and each Lender and their respective directors, officers, employees and
agents from, and hold each of them harmless against, any and all losses,
liabilities, claims, damages or expenses incurred by any of them arising out of
or by reason of (A) any claims by brokers due to acts or omissions by Borrower
or (B) any investigation or litigation or other proceedings (including any
threatened investigation or litigation or other proceedings) relating to any
actual or proposed use by Borrower of the proceeds of the Loans, including
without limitation, the reasonable fees and disbursements of counsel incurred in
connection with any such investigation or litigation or other proceedings (but
excluding any such losses, liabilities, claims, damages or expenses incurred by
reason of the gross negligence or willful misconduct of the Person to be
indemnified).

         The obligations of Borrower under this Section and under Article III
shall survive the repayment of all amounts due under or in connection with any
of the Loan Documents and the termination of the Loans.

         Section 11.05 Assignment: Participation This Agreement shall be binding
upon, and shall inure to the benefit of, Borrower, Administrative Agent, Lenders
and their respective successors and permitted assigns. Borrower may not assign
or transfer its rights or obligations hereunder.

         Any Lender may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Loan
("Participations"). In the event of any such grant by a Lender of a
Participation to a Participant, whether or not Borrower or Administrative Agent
was given notice, such Lender shall remain responsible for the performance of
its obligations hereunder, and Borrower and Administrative Agent shall continue

                                       44
<PAGE>

to deal solely and directly with such Lender in connection with such Lender's
rights and obligations hereunder. Any agreement pursuant to which any Lender may
grant a Participation shall provide that such Lender shall retain the sole right
and responsibility to enforce the obligations of Borrower hereunder and under
any other Loan Document, including, without limitation, the right to approve any
amendment, modification or waiver of any provision of this Agreement or any
other Loan Document; provide , however , that such participation agreement may
provide that such Lender will not agree to any modification, amendment or waiver
of this Agreement described in clauses (i) through (vii) of Section 11.02
without the consent of the Participant.

         Subject to the provisions of Section 9.17, any Lender may at any time
assign to any bank or other institution with the consent of Administrative Agent
and, provided there exists no Event of Default, of Borrower, which consents
shall not be unreasonably withheld or delayed, or to one or more banks or other
institutions which are majority owned subsidiaries of a Lender or of the Parent
of a Lender (each such consented to bank or other institution, or subsidiary
bank or institution, an "Assignee") all, or a proportionate part of all, of its
rights and obligations under this Agreement and its Note, and such Assignee
shall assume rights and obligations, pursuant to an Assignment and Assumption
Agreement executed by such Assignee and the assigning Lender, provide that, in
each case, after giving effect to such assignment the Assignee's Loan
Commitment, and, in the case of a partial assignment, the assigning Lender's
Loan Commitment, each will be equal to or greater than $10,000,000; provide ,
further , however , that the assigning Lender shall not be required to maintain
a Loan Commitment in the minimum amount aforesaid in the event it assigns all of
its rights and obligations under this Agreement and its Note. Upon (i) execution
and delivery of such instrument, (ii) payment by such Assignee to the assigning
Lender of an amount equal to the purchase price agreed between such Lender and
such Assignee and (iii) payment by such Assignee to Administrative Agent of a
fee, for Administrative Agent's own account, in the amount of $2,500, such
Assignee shall be a Lender under this Agreement and shall have all the rights
and obligations of a Lender as set forth in such Assignment and Assumption
Agreement, and the assigning Lender shall be released from its obligations
hereunder to a corresponding extent, and no further consent or action by any
party shall be required. Upon the consummation of any assignment pursuant to
this paragraph, substitute Notes shall be issued to the assigning Lender (in the
case of a partial assignment) and Assignee by Borrower, in exchange for the
return of the original Note of the assigning Lender. The obligations evidenced
by such substitute notes shall constitute "Obligations" for all purposes of this
Agreement and the other Loan Documents and shall be secured by the Mortgages. In
connection with Borrower's execution of substitute notes as aforesaid, Borrower
shall deliver to Administrative Agent such evidence of the due authorization,
execution and delivery of the substitute notes and any related documents as
Administrative Agent may reasonably request. If the Assignee is not incorporated
under the Laws of the United States or a state thereof, it shall, prior to the
first date on which interest or fees are payable hereunder for its account,
deliver to Borrower and Administrative Agent certification as to exemption from
deduction or withholding of any United States federal income taxes in accordance
with Section 9.13.

                                       45
<PAGE>

Each Assignee shall be deemed to have made the representations contained in, and
shall be bound by the provisions of, Section 9.13.

         Any Lender may at any time freely assign all or any portion of its
rights under this Agreement and its Note to a Federal Reserve Bank. No such
assignment shall release the transferor Lender from its obligations hereunder.

         Borrower recognizes that in connection with a Lender's selling of
Participations or making of assignments, any or all documentation, financial
statements, appraisals and other data, or copies thereof, relevant to Borrower
or the Loans may be exhibited to and retained by any such Participant or
assignee or prospective Participant or assignee. In connection with a Lender's
delivery of any financial statements and appraisals to any such Participant or
assignee or prospective Participant or assignee, such Lender shall also indicate
that the same are delivered on a confidential basis. Borrower agrees to provide
all assistance reasonably requested by a Lender to enable such Lender to sell
Participations or make assignments of its Loan as permitted by this Section.
Each Lender agrees to provide Administrative Agent and Borrower with notice of
all Participations sold by such Lender.

         Section 11.06 Documentation Satisfactory. All documentation required
from or to be submitted on behalf of Borrower in connection with this Agreement
and the documents relating hereto shall be subject to the prior approval of, and
be satisfactory in form and substance to, Administrative Agent, its counsel and,
where specifically provided herein, Lenders. In addition, the persons or parties
responsible for the execution and delivery of, and signatories to, all of such
documentation, shall be acceptable to, and subject to the approval of,
Administrative Agent and its counsel.

         Section 11.07 Notices. Except as expressly provided otherwise, all
notices, demands, consents, approvals and statements required or permitted
hereunder shall be in writing and shall be deemed to have been sufficiently
given or served for all purposes when presented personally, three (3) days after
mailing by registered or certified mail, postage prepaid, or one (1) day after
delivery to a nationally recognized overnight courier service providing evidence
of the date of delivery, addressed to a party at its address on the signature
page hereof or of the applicable Assignment and Assumption Agreement, or at such
other address of which a party shall have notified the party giving such notice
in writing in accordance with the foregoing requirements.

         Section 11.08 Seto Borrower agrees that, in addition to (and without
limitation of) any right of setoff, bankers' lien or counterclaim a Lender may
otherwise have, Administrative Agent and each Lender shall be entitled, at its
option, to offset balances (general or special, time or demand, provisional or
final) held by it for the account of Borrower at any of Administrative Agent's
or such Lender's offices, in Dollars or in any other currency, against any
amount payable by Borrower to Administrative Agent or such Lender under this
Agreement or such Lender's Note or any other Loan Document which is not paid
when due (regardless of whether such balances are then due to Borrower), in
which case it shall promptly notify Borrower and (in the case of setoff by a
Lender) Administrative Agent thereof; provide, however, that failure to give
such notice shall not affect the validity thereof Payments by Borrower hereunder
or under the other Loan Documents shall be made without setoff or counterclaim.

                                       46
<PAGE>

         Section 11.09 Severability. The provisions of this Agreement are
intended to be severable. If for any reason any provision of this Agreement
shall be held invalid or unenforceable in whole or in part in any jurisdiction,
such provision shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without in any manner affecting the validity
or enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.

         Section 11.10 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any party hereto may execute this Agreement by signing any
such counterpart.

         Section 11.11 Integration. The Loan Documents and Supplemental Fee
Letter set forth the entire agreement among the parties hereto relating to the
transactions contemplated thereby and supersede any prior oral or written
statements or agreements with respect to such transactions.

         Section 11.12 Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the Laws of the State of New York
(without giving effect to New York's principles of conflicts of law).

         Section 11.13 Waivers. In connection with the obligations and
liabilities as aforesaid, Borrower hereby waives (i) promptness and diligence,
(ii) notice of any actions taken by Administrative Agent or any Lender under
this Agreement, any other Loan Document or any other agreement or instrument
relating thereto except to the extent otherwise provided herein, (iii) all other
notices, demands and protests, and all other formalities of every kind in
connection with the enforcement of the Obligations, the omission of or delay in
which, but for the provisions of this Section, might constitute grounds for
relieving Borrower of its obligations hereunder, (iv) any requirement that
Administrative Agent or any Lender protect, secure, perfect or insure any Lien
on all or any portion of the Mortgaged Property under any Mortgage or on any
other collateral or exhaust any right or take action against Borrower or any
other Person or against all or any portion of the Mortgaged Property under any
Mortgage or any other collateral, (v) any right or claim of right to cause a
marshalling of the assets of Borrower and (vi) all rights of subrogation or
contribution, whether arising by contract or operation of law (including,
without limitation, any such right arising under the Federal Bankruptcy Code) or
otherwise by reason of payment by Borrower, either jointly or severally,
pursuant to this Agreement or other Loan Documents.

         Section 11.14 Year 2000. Borrower represents, warrants and covenants
that it has taken and shall take all action reasonably necessary to assure that
its data processing (including internal accounting and bookkeeping) systems,
information technology systems and building systems (including microprocessors
for building systems) are capable of effectively processing data and
information, including dates on and after January 1, 2000, and shall not cease

                                       47
<PAGE>

to perform, or provide, or cause any software and/or system which is material to
its operations or any interface therewith to provide, invalid or incorrect
results as a result of date functionality and/or data, or otherwise experience
any material degradation of performance or functionality arising from, relating
to or including date functionality and/or data which represents or references
different centuries or more than one century or leap years, and that all such
systems shall be reasonably effective and accurate in managing and manipulating
data derived from, involving or relating in any way to dates (including single
century formulas and multi-century or leap year formulas), and will not cause a
material abnormally ending scenario within such systems or in any software
and/or system with which such systems interface, or generate materially
incorrect values or invalid results involving such dates. At the request of
Administrative Agent, Borrower shall provide Administrative Agent with
reasonably acceptable assurance of Borrower's year 2000 capability.

         Section 11.15 Jurisdiction: Immunities. Borrower, Administrative Agent
and each Lender hereby irrevocably submit to the jurisdiction of any New York
State or U.S. federal court sitting in New York City over any action or
proceeding arising out of or relating to this Agreement, the Notes or any other
Loan Document. Borrower, Administrative Agent, and each Lender irrevocably agree
that all claims in respect of such action or proceeding may be heard and
determined in such New York State or U.S. federal court. Borrower,
Administrative Agent, and each Lender irrevocably consent to the service of any
and all process in any such action or proceeding by the mailing of copies of
such process to Borrower, Administrative Agent or each Lender, as the case may
be, at the addresses specified herein. Borrower, Administrative Agent and each
Lender agree 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. Borrower, Administrative Agent and each
Lender further waive any objection to venue in the State of New York and any
objection to an action or proceeding in the State of New York on the basis of
forum non conveniens.

         Nothing in this Section shall affect the right of Borrower,
Administrative Agent or any Lender to serve legal process in any other manner
permitted by Law.

         To the extent that Borrower, Administrative Agent or any Lender have or
hereafter may acquire any immunity from jurisdiction of any court or from any
legal process (whether from service or notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) with respect to itself
or its property, Borrower, Administrative Agent and each Lender hereby
irrevocably waive such immunity in respect of its obligations under this
Agreement, the Notes and any other Loan Document.

         BORROWER, ADMINISTRATIVE AGENT AND EACH LENDER WAIVE ANY RIGHT EACH
SUCH PARTY MAY HAVE TO JURY TRIAL IN CONNECTION WITH ANY SUIT, ACTION OR
PROCEEDING BROUGHT WITH RESPECT TO THIS AGREEMENT, THE NOTES OR THE LOANS. IN
ADDITION, BORROWER FURTHER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, IN
CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING BROUGHT BY OR ON BEHALF OF
ADMINISTRATIVE AGENT OR LENDERS WITH RESPECT TO THIS AGREEMENT, THE NOTES OR
OTHERWISE IN RESPECT OF THE LOAN, ANY AND EVERY RIGHT BORROWER MAY HAVE TO (X)
INJUNCTIVE RELIEF, (Y) INTERPOSE ANY COUNTERCLAIM THEREIN, OTHER THAN A
COMPULSORY COUNTERCLAIM AND (Z) HAVE THE SAME CONSOLIDATED WITH ANY OTHER OR
SEPARATE SUIT, ACTION OR PROCEEDING. NOTHING CONTAINED IN THE IMMEDIATELY
PRECEDING SENTENCE SHALL PREVENT OR PROHIBIT BORROWER FROM INSTITUTING OR
MAINTAINING A SEPARATE ACTION AGAINST ADMINISTRATIVE AGENT OR LENDERS WITH
RESPECT TO ANY ASSERTED CLAIM.

                                       48
<PAGE>

         Section 11.16 Gross-Up For Taxes. All payments made by Borrower under
this Agreement and the Notes shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future income,
stamp or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority, excluding income taxes and franchise or other
taxes (imposed in lieu of income taxes) imposed on a Lender as a result of a
present or former connection between such Lender and the jurisdiction of the
Governmental Authority imposing such tax or any political subdivision or taxing
authority thereof or therein (other than any such connection arising solely from
such Lender's having executed, delivered or performed its obligations or
received a payment under, or enforced, this Agreement or its Note). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts
payable to such Lender hereunder or under its Note, the amounts so payable to
such Lender shall be increased to the extent necessary to yield to such Lender
(after payment of all Non-Excluded Taxes) interest or any such other amounts
payable with respect to the its Loan at the rates or in the amounts specified in
this Agreement and its Note; provide , however , that Borrower shall not be
required to increase any such amounts payable to such Lender if such Lender is
not organized under the Laws of the United States or a state thereof and such
Lender fails to comply with the requirements of Section 9.13. Whenever any
Non-Excluded Taxes are payable by Borrower, as promptly as possible thereafter
Borrower shall send to Administrative Agent for the account of such Lender a
certified copy of an original official receipt received by Borrower showing
payment thereof. If Borrower fails to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to Administrative Agent the
required receipts or other required documentary evidence, Borrower shall
indemnify such Lender for any incremental taxes, interest or penalties that may
become payable by such Lender as a result of any such failure. The agreements in
this Section shall survive the termination of this Agreement and the payment of
the Notes and all other amounts payable hereunder.

         Section 11.17 Exculpation of Trustees, This Loan Agreement is executed
by certain Trustees of Acadia Realty Trust (the "Trust"), the general partner of
Borrower, not individually, but solely in their representative capacities as
trustees of the Trust. Administrative Agent waives any rights to bring a cause
of action against the individuals executing this Loan Agreement as trustees of
the Trust (except for any cause of action based upon lack of authority or
fraud), and Administrative Agent agrees to look solely to the Mortgaged Property
or, if permitted under this Loan Agreement or any other Loan Document, the other
assets of Borrower, for the enforcement of any claim Administrative Agent at any
time may have under this Loan Agreement or under the Loan Documents.

                                       49
<PAGE>

         Section 11. 18 Release of Collateral. Provided no Default or Event of
Default exists, Borrower shall have the right to obtain the release of any of
the Properties from the Mortgage encumbering the same, at Borrower's expense, so
long as (1) Borrower pays to Administrative Agent, for the account of the
Lenders, an amount equal to the lesser of (x) the Release Price for the Property
that is the subject of such release or (y) the then outstanding principal amount
of the Loan, which amount shall be applied to the reduction of outstanding
principal under the Loan, (ii) Administrative Agent receives an endorsement to
the title insurance policy insuring that the lien of the Mortgages not so
released will not be impaired by virtue of said release and (iii) Administrative
Agent receives such other documents, opinions and assurances as Administrative
Agent may reasonably request.. Upon any such release of a Property, such
Property shall no longer constitute a "Property" hereunder and the Total Loan
Commitment shall be reduced by the amount of the Loan Allocation for such
Property.

                  [Remainder of page intentionally left blank.]

                                       50
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.

                                          ACADIA REALTY LIMITED PARTNERSHIP, a
                                          Delaware limited partnership (as
                                          Borrower)

                                          By: Acadia Realty Trust, a Maryland
                                          real estate investment trust, its
                                          general partner

                                          By:

                                          Title:

                                          Address for notices:

                                          c/o Acadia Realty Trust
                                          20 Soundview Marketplace
                                          Port Washington, New York 11050
                                          Attention: Robert Masters, Esq.
                                          Telephone: 516/767-8830, ext. 339
                                          Telecopy: 516/767-8839

                                          THE DIME SAVINGS BANK OF NEW YORK, FSB
                                          (as Lender and Administrative Agent)

                                          By
                                             Name:
                                             Title:

                                          Address for notices, Administrative
                                          Agent's Office and Applicable Lending
                                          Office:

                                          The Dime Savings Bank of New York, FSB
                                          EAB Plaza, 13th Floor
                                          Uniondale, New York 11556
                                          Attention: Mr. Arthur
                                          Bellini Telephone: 212/642-7434
                                          Telecopy: 212/642-7460

                                       51
<PAGE>

         The undersigned joins in the execution and authorizes the delivery of
this Loan Agreement for the purpose of accepting and agreeing to the provisions
of paragraph 10.02 hereof.

                                          ACADIA REALTY TRUST

                                          By
                                              Name:
                                              Title:

                                       52
<PAGE>

                                     EXHIBIT

                              AUTHORIZATION LETTER

                               _____________, 2000

[Name and address of Administrative Agent]

                     Re:  Term Loan Agreement dated as of _____________, 2000
                          (the "Loan Agreement"; capitalized terms not otherwise
                          defined herein shall have the meanings ascribed to
                          such terms in the Loan Agreement) among us, as
                          Borrower, the Lenders named therein, and you, as
                          Administrative Agent for said Lenders

Dear Sir/Madam:

         In connection with the captioned Loan Agreement, we hereby designate
any of the following persons to give to you instructions, including notices
required pursuant to the Loan Agreement, orally, by telephone or teleprocess, or
in writing:

                                     [NAMES]

         Instructions may be honored on the oral, telephonic, teleprocess or
written instructions of anyone purporting to be any one of the above designated
persons even if the instructions are for the benefit of the person delivering
them. We will furnish you with written confirmation of each such instruction
signed by any person designated above (including any telecopy which appears to
bear the signature of any person designated above) on the same day that the
instruction is provided to you, but your responsibility with respect to any
instruction shall not be affected by your failure to receive such confirmation
or by its contents.

         Without limiting the foregoing, we hereby unconditionally authorize any
one of the above-designated persons to execute and the request for advance of
proceeds of the Loans to you under the Loan Agreement with the identical force
and effect in all respects as if executed and submitted by us.

         You and Lenders shall be fully protected in, and shall incur no
liability to us for, acting upon any instructions which you in good faith
believe to have been given by any person designated above, and in no event shall
you or Lenders be liable for special, consequential or punitive damages. In
addition, we agree to hold you and Lenders and your and their respective agents
harmless from any and all liability, loss and expense arising directly or
indirectly out of instructions that we provide to you in connection with the
Loan Agreement except for liability, loss or expense occasioned by your gross
negligence or willful misconduct.

<PAGE>

         Upon notice to us, you may, at your option, refuse to execute any
instruction, or part thereof, without incurring any responsibility for any loss,
liability or expense arising out of such refusal if you in good faith believe
that the person delivering the instruction is not one of the persons designated
above or if the instruction is not accompanied by an authentication method that
we have agreed to in writing.

         We will promptly notify you in writing of any change in the persons
designated above and, until you have actually received such written notice and
have had a reasonable opportunity to act upon it, you are authorized to act upon
instructions, even though the person delivering them may no longer be
authorized.

                                         Very truly yours,

                                         [BORROWER]

                                         By
                                            Name:
                                            Title:

<PAGE>

                                    EXHIBIT B

                                      NOTE

                                                              New York, New York
                                                                            2000

         For value received, [BORROWER] a ____________________ ("Borrower"),
hereby promises to pay to the order of ___________________ or its successors or
assigns (collectively, "Lender"), at the principal office of ___________________
located at ___________________________ ("Administrative Agent") for the account
of the Applicable Lending Office of Lender, the principal sum of
______________________ Dollars ($__________), or if less, the amount loaned by
Lender under its Loan to Borrower pursuant to the Loan Agreement (as defined
below) and actually outstanding, in lawful money of the United States and in
immediately available funds, in accordance with the terms set forth in the Loan
Agreement. Borrower also promises to pay interest on the unpaid principal
balance hereof, for the period such balance is outstanding, in like money, at
said office for the account of said Applicable Lending Office, at the time and
at a rate per annum as provided in the Loan Agreement. The Loan Agreement
provides in certain cases for the accrual of interest at the Default Rate.

         The date and amount of the advance of the Loan made by Lender to
Borrower under the Loan Agreement referred to below, and each payment of said
Loan, shall be recorded by Lender on its books and, prior to any transfer of
this Note (or, at the discretion of Lender, at any other time), may be endorsed
by Lender on the schedule attached hereto and any continuation thereof.

         This Note is one of the Notes referred to in the Term Loan Agreement
dated as of ~ 2000 (as the same may be amended from time to time, the "Loan
Agreement") among Borrower, the "Lenders" named therein (including Lender) and
Administrative Agent, as administrative agent for Lenders. All of the terms,
conditions and provisions of the Loan Agreement are hereby incorporated by
reference. All capitalized terms used herein and not defined herein shall have
the meanings given to them in the Loan Agreement.

         This Note is secured by the various Mortgages which contain, among
other things, provisions for the prepayment of and acceleration of this Note
upon the happening of certain stated events. Reference to each of the Mortgage
is hereby made for a description of the "Mortgaged Property" encumbered thereby
and the rights of Borrower and Lenders (including Lender) with respect to such
Mortgaged Property. In addition, the Loan Agreement contains, among other
things, provisions for the prepayment of and acceleration of this Note upon the
happening of certain stated events.

         Borrower agrees that it shall be bound by any agreement extending the
time or modifying the terms of payment set forth above and in the Loan
Agreement, made by or on behalf of Lenders and the owner or owners of any of the
Mortgaged Property under any of the Mortgages, whether with or without notice to

<PAGE>

Borrower, and Borrower shall continue liable to pay the amount due hereunder in
accordance with the terms set forth herein and in the Loan Agreement, but with
interest at a rate no greater than the rate of interest provided therein,
according to the terms of any such agreement of extension or modification.

         Should the indebtedness represented by this Note or any part thereof be
collected at law or in equity, or in bankruptcy, receivership or any other court
proceeding (whether at the trial or appellate level), or should this Note be
placed in the hands of attorneys for collection upon default, Borrower agrees to
pay, in addition to the principal, interest and other sums due and payable
hereon, all costs of collecting or attempting to collect this Note, including
reasonable attorneys' fees and expenses.

         No recourse shall be had under this Note against Borrower's Principals
except as and to the extent set forth in Section 10.02 of the Loan Agreement.

         All parties to this Note, whether principal, surety, guarantor or
endorser, hereby waive presentment for payment, demand, protest, notice of
protest and notice of dishonor.

         This Note shall be governed by, and construed and enforced in
accordance with, the Laws of the State of New York (without giving effect to New
York's principles of conflicts of law); provide that, as to the maximum lawful
rate of interest which may be charged or collected, if the Laws applicable to
Lender permit it to charge or collect a higher rate than the Laws of the State
of New York, then such Law applicable to Lender shall apply to Lender under this
Note.

                                         [BORROWER]

                                         By Name:
                                             Title:

                                       2
<PAGE>

                                    EXHIBIT C

                       ASSIGNMENT AND ASSUMPTION AGREEMENT

         ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of 2000, between [insert
name of assigning Lender] ("Assignor") and [insert name of Assignee]
("Assignee").

                              Preliminary Statement

         1. This Assignment and Assumption Agreement (this "Agreement") relates
to the Tenn Loan Agreement dated , 2000 (as the same may be amended from time to
time, the "Loan Agreement") among ______________________ ("Borrower"),
_______________________ the lenders party thereto (each a "Lender" and,
collectively, "Lenders") and _________________________, as administrative agent
for Lenders ("Administrative Agent"). All capitalized terms not otherwise
defined herein shall have the respective meanings set forth in the Loan
Agreement.

         2. Subject to the terms and conditions set forth in the Loan Agreement,
Assignor has made a Loan Commitment to Borrower in an aggregate principal amount
of ("Assignor's Loan Commitment").

         3. The aggregate outstanding principal amount of Assignor's Loan made
pursuant to Assignor's Loan Commitment at commencement of business on the date
hereof is $                   .

         4. Assignor desires to assign to Assignee all of the rights of Assignor
under the Loan Agreement in respect of a portion of its Loan and Loan Commitment
thereunder in an amount equal to $______________ (collectively, the "Assigned
Loan and Commitment"); and Assignee desires to accept assignment of such rights
and assume the corresponding obligations from Assignor on such terms.

         NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:

         SECTION 1. Assignment. Assignor hereby assigns and sells to Assignee
all of the rights of Assignor under the Loan Agreement in and to the Assigned
Loan and Commitment, and Assignee hereby accepts such assignment from Assignor
and assumes all of the obligations of Assignor under the Loan Agreement with
respect to the Assigned Loan and Commitment. Upon the execution and delivery
hereof by Assignor, Assignee, Administrative Agent (and, if applicable,
Borrower), and the payment of the amount specified in Section 2 hereof required
to be paid on the date hereof, (1) Assignee shall, as of the commencement of
business on the date hereof, succeed to the rights and obligations of a Lender
under the Loan Agreement with a Loan and a Loan Commitment in amounts equal to
the Assigned Loan and Commitment and (2) the Loan and Loan Commitment of
Assignor shall, as of the commencement of business on the date hereof, be
reduced correspondingly and Assignor released from its obligations under the

                                       1
<PAGE>

Loan Agreement to the extent such obligations have been assumed by Assignee.
Assignor represents and warrants that it (x) owns the Assigned Loan and
Commitment free and clear of all liens and other encumbrances and (y) is legally
authorized to enter into and perform this Agreement. Except as provided in the
immediately preceding sentence, the assignment provided for herein shall be
without representation or warranty by, or recourse to, Assignor.

         SECTION 2. Payments. As consideration for the assignment and sale
contemplated in Section I hereof, Assignee shall pay to Assignor on the date
hereof in immediately available funds an amount equal to $ . Except as otherwise
agreed by Assignor and Assignee, it is understood that any fees paid to Assignor
under the Loan Agreement are for the account of Assignor. Each of Assignor and
Assignee here by agrees that if it receives any amount under the Loan Agreement
which is for the account of the other party hereto, it shall receive the same
for the account of such other party to the extent of such other party's interest
therein and shall promptly pay the same to such other party.

         SECTION 3. Consents. Execution and Delivery of Notes. This Agreement is
conditioned upon the consent of Administrative Agent and, provided there exists
no Event of Default, of Borrower pursuant to Section 11.05 of the Loan
Agreement. The execution of this Agreement by Borrower (if required) and
Administrative Agent is evidence of this consent. [Consents not required for
certain assignments to entities related to a Lender.] Pursuant to Section 11.05
of the Loan Agreement, Borrower has agreed to execute and deliver Notes payable
to the respective orders of Assignee and Assignor to evidence the assignment and
assumption provided for herein.

         SECTION 4. Non-Reliance on Assignor. Assignor makes no representation
or warranty in connection with, and shall have no responsibility with respect
to, the solvency, financial condition, or statements of Borrower or any other
party to any Loan Document, or the validity and enforceability of the
obligations of Borrower or any other party to a Loan Document in respect of the
Loan Agreement or any other Loan Document. Assignee acknowledges that it has,
independently and without reliance on Assignor, and based on such documents and
information as it has deemed appropriate, made its own analysis of the
collateral for the Loans, credit analysis of Borrower and the other parties to
the Loan Documents, and decision to enter into this Agreement, and will continue
to be responsible for making its own independent appraisal of the collateral, if
any, for the Loans and of the business, affairs and financial condition of
Borrower and the other parties to the Loan Documents.

         SECTION 5. Governing Law This Agreement shall be governed by, and
construed and enforced in accordance with, the Laws of the State of New York
(without giving effect to New York's principles of conflicts of law).

         SECTION 6. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.

                                       2
<PAGE>

         SECTION 7. Certain Representations and Agreements by Assignee. Assignee
represents and warrants that it is legally authorized to enter into and perform
this Agreement. In addition, Assignee hereby represents that it is entitled to
receive any payments to be made to it under the Loan Agreement or hereunder
without the withholding of any tax and agrees to furnish the evidence of such
exemption as specified therein and otherwise to comply with the provisions of
Section 9.13 of the Loan Agreement.

                 [Remainder of page intentionally left blank.]

<PAGE>

         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.

                                          (as Assignor)

                                          By
                                             Name:
                                             Title:

                                          By
                                             Name:
                                             Title:

                                          (as Assignee)

                                          By
                                            Name:
                                            Title:

                                          By
                                            Name:
                                            Title:

                                          Applicable Lending, Office and Address
                                          for notices:

                                          Attention:
                                          Telephone:
                                          Telecopy:

<PAGE>

                                          (as Administrative Agent)

                                          By
                                             Name:
                                             Title:

                                          By
                                             Name:
                                             Title:

                                          (as Borrower)

                                          By
                                             Name:
                                             Title:

<PAGE>

                                    EXHIBIT D

                              SOLVENCY CERTIFICATE

         The person executing this certificate is the __________________ of
[BORROWER], a __________________ ("Borrower"), and is familiar with its
properties, assets and businesses, and is duly authorized to execute this
certificate on behalf of Borrower pursuant to Section 4.01(18) of the Term Loan
Agreement dated the date hereof (the "Loan Agreement") among Borrower, the
lenders party thereto (each a "Lender" and collectively, "Lenders") and
__________________, as administrative agent for ____________ Lenders (in such
capacity, together with its successors in such capacity, "Administrative
Agent"). In executing this Certificate, such person is acting solely in his or
her capacity as the of Borrower, and not in his or her individual capacity.
Unless otherwise defined herein, terms defined in the Loan Agreement are used
herein as therein defined.

         The undersigned further certifies that he or she has carefully reviewed
the Loan Agreement and the other Loan Documents and the contents of this
Certificate and, in connection herewith, has made such investigation and
inquiries as he or she deems reasonably necessary and prudent therefor. The
undersigned further certifies that the financial information and assumptions
which underlie and form the basis for the representations made in this
Certificate were reasonable when made and were made in good faith and continue
to be reasonable as of the date hereof.

         The undersigned understands that Administrative Agent and Lenders are
relying on the truth and accuracy of this Certificate in connection with the
transactions contemplated by the Loan Agreement.

         The undersigned certifies that Borrower is Solvent.

         IN WITNESS WHEREOF, the undersigned has executed this Certificate on
2000.

<PAGE>

                                    EXHIBIT E

                          NOTICE-OF-ASSIGNMENT OF LEASE
                           (On Letterhead of Borrower)

                                      ,2000

 [Name and Address of Tenant]

               Re:  Lease Dated:
                    Mortgagee:                         (as administrative agent)
                      for itself and other lenders)
                    Address of Mortgagee:
                    Mortgage Dated:

Dear Sir/Madam:

         The undersigned has assigned by a mortgage or deed of trust (the
"Mortgage") dated as shown above to the Mortgagee identified above (hereinafter
"Mortgagee") all its estate, right, title and interest in, to and under the
Lease between you and the undersigned dated as set forth above, as said Lease
may have been heretofore modified or amended (the "Lease"), together with all
right, title and interest of the undersigned as lessor thereunder, including,
without limitation, the right upon the occurrence of an Event of Default (as
defined in the he Mortgage) to collect and receive all earnings, revenues,
rents, issues, profits and income of the property subject to the Mortgage.

         *Certain provisions of the Mortgage, the text of which are attached
hereto, restrict some of the undersigned's rights under the Lease. However, said
assignment does not impair or diminish any of our obligations to you under the
provisions of the Lease, nor are any such obligations imposed upon Mortgagee or
upon the lenders for whom Mortgagee is acting as administrative agent, or their
respective successors or assigns.

         Pursuant to said assignment you are hereby notified that in the event
of a demand on you by Mortgagee or its successors and assigns for the payment to
it of the rents due under the Lease, you may, and are hereby authorized and
directed to, pay said rent to Mortgagee and we hereby agree that the receipt by
you of such a demand shall be conclusive evidence of Mortgagee's right to the
receipt thereof and that the payment of the rents by you to Mortgagee pursuant
to such demand shall constitute performance in full of your obligation under the
Lease for the payment of rent to the undersigned.

NOT: To be sent in accordance with notice requirements of the Lease.

     To be used if property located in New York.

<PAGE>

         Kindly indicate your receipt of this letter and your agreement to the
effect set forth below by signing the enclosed copy thereof and mailing it to
Mortgagee at its address identified above to the attention of its Real Estate
Finance Office.

                                         [BORROWER]

                                         By:
                                            Name:
                                            Title:

         The undersigned acknowledges receipt of the original of this letter and
agrees for the benefit of Mortgagee that it shall notify Mortgagee of any
default on the part of the landlord under the Lease which would entitle the
undersigned to cancel the Lease or to abate the rent payable thereunder, and
further agrees that, notwithstanding any provision of the Lease, no notice of
cancellation thereof shall be effective unless Mortgagee has received the notice
aforesaid and has failed within 30 days of the date thereof to cure, or if the
default cannot be cured within 30 days has failed to commence and to diligently
prosecute the cure, of landlord's default which gave rise to the right to
cancel.

                                        [NAME OF TENANT]

                                        By: its authorized officer

<PAGE>

                                   SCHEDULE A

                                     SUMMARY
                     ENGINEERING AND ENVIRONMENTAL FINDINGS

Property Address          461 State Route 10 Ledgewood      Report Date  2119/00
Dime Reference No.        00-01-000021                      CA Job No.   0039.1
Dime Account officer      An Bellini

ENGINEERING
Immediate Repair Items:
        Repair asphalt parking lot.                                   $    3,000
        Repair current roof leaks.                                    $    4,000
        Allocate funding towards tenant fitout of vacant
        retail space.                                                 $  171,000
        (See Note No. 1)
        Total Immediate Repair Ilona                                  $  178,000
Moderate Term Repair Items:
        Replace roofing                                               $1,550,000
        Allocate funding for repairs to asphalt pavement.             $    6,000
        Allocate funding towards replacement of six
          common area HVAC units.                                     $  390,000
        Moderate Term Repair Items                                    $1,646,000
Long Term Repair Items:
        Allocate funding for repair to asphalt pavement               $    9,000
        Allocate: funding towards periodic curbing reps irs           $   34,000
        Allocate funding towards periodic repairs to
          HVAC units                                                  $  340,000
        (See Vote "No. 1)
        Total Long Tenn Repair Items                                  $   53,000
        Total All Items                                               $4,384,000

Note No. 1: party incurring the cost or this work will depend upon the terms or
the lease agreement between the owner and the tenant

<PAGE>

                                     SUMMARY
                     ENGINEERING AND ENVIRONMENTAL FINDINGS

Property Address      300-328 White Horse Pike, Berlin, NJ  Report Date  2118;00
Dime Reference No.    00-01-000021                          CA Job No.   0039.1
Dime Account Officer  Art Bellini

ENGINEERING
Immediate Repair Items:
        Repair restaurant building roof.                              $   15,000
        Repair canopy drainage piping.                                $    4,000
        Repair concrete sidewalks.                                    $    2,000
        Allocate funding towards tenant fitout of vacant retail
        space. (See Note No. 1)                                       $  118,000
        Allocate funding towards renovation to vacant restaurant.     $  215,000
            (See Note No. 1)
        Total Immediate Repair Items                                  $  354,000
Moderate Term Repair Items:
        Repair K-Mart roof (lashing)                                  $    4,000
        New parapet capping between K-Mart and Acme.                  $    2,000
        Allocate funding for repairs to asphalt pavement.             $    5,000
        Provide eight additional handicapped parking spaces.          $    3,000
        Total Moderate Term Repair ltems                              $  514,000
Long Term Repair Items:Reseal and restripe pavement                   $   50,000
        Allocate funding, towards periodic curbing repairs.           $   32,000
        Allocate funds towards periodic repairs to HVAC unit.         $   20,000
            (see Note No. 1)
        Total Long Term Repair Items                                  $  770,000
         Total All Items                                              $1,638,000

Note No. 3: The party incurring the cost of this work will depend upon the terms
            of the Ica agreement between the owner and the tenant.

<PAGE>

                             CASHIN ASSOCIATES, P.C.
                                     SUMMARY
                     ENGINEERING AND ENVIRONMENTAL FINDINGS

Property Address   New Loudon Center, 873 New Loudon Road  Report Date  2-18-00.
                   Latham, New York 12110                  CA Job No. 0039.1
Dime Reference No. 00-01-000021
Dime Account Officer Arthur Bellini

ENGINEERING

Immediate Repair Items:
        Repair asphalt traffic bumpers at rear of property.           $    1,000
        Replace roof over vacant Homeplace store.                     $  120,000
        Remove combustible materials from the vicinity
        or the main electrical distribution equipment.                   No cost

        Scrape peeling paint, seal and re-paint rear exterior
        walls ororiginal section of shopping center.                  $   10,000
        Allocate funding towards tenant fit-out of 411,327
        square feet of vacant Homeplace space (see note no. 1).       $  500,000

        Allocate funding towards tenant fit-out of 76,641
        square feet of vacant Bradlee's space, including new
        HVAC equipment and moderate electrical modifications          $1,150,000
        (see note no. 1).
        Make repairs to aluminum stormwater gutters and leaders.      $    2,000
        Make repairs to damaged wall-mounted exterior lighting.       $    7,500
        Make repairs to front wing-wall of vacant Bradlees store.           3750
        Total Immediate Repair Items                                  $1,784,500

Moderate Term Repair Items:
        Replace roofs over AC Moore, Apple Beeper. Latham Liquors     $  150,000
        and Marshalls stores.
        Paint exterior metal surfaces such as overhangs,
        safety railings and pipe bollards.                            $    7,500

        Scale approximately 40.000 square yards of asphalt
        parkng lot.                                                   $   28,000
        Re-stripe asphalt parking lot.                                $    1,750
        Allocate funding towards periodic repairs to all HVAC         $    7,501
        equipment, exclusive of Pricechoppcr equipment.
        Allocate funding towards patching of parking lot.             $    1,000
        Total Moderate Term Repair Items                              $  195,750
Long Term Repair Items.
        Allocate funding towards periodic repairs to
        gutters/leaders.                                              $    1,000
        Allocate funding towards periodic repairs to rooftop
        HVAC equipment at Pricechopper (see note no. 2)               $    7,500
        Allocate funding towards periodic repairs to all
        remaining rooftop HVAC equipment, exclusive of
        Pricechopper equipment.                                       $    7,500
        Allocate funding towards periodic exterior lighting
        repairs.                                                      $    3,000
        Allocate funding towards. periodic curbing repairs.           $    1,500
        Allocate funding towards patching of parking lot.             $   51,500
        Allocate funding towards repair of Pricechopper
        roof arter warranty period expires.                           $    3,000

  Total Long Term Repair Items                                        $  125,000
  Total All Items                                                             50
        Note no. 1: The party incurring The cost of this work
                    will depend upon the terms of the lease
                    agreement between the owner and the tenant
        Note no. 2. This cost is reported to be the responsibility
                    of Pricechopper

<PAGE>

                             CASHIN ASSOCIATES* P.C.
                                     SUMMARY
                     ENGINEERING AND ENVIRONMENTAL FINDINGS

Property Address   Route 6 Mall Honesdale, Pennsylvania   Report Date   2-118-00
Dime Reference No. 00-01-000021                           CA Job No.      0039.1
Dime Account Officer Arthur Bellini

ENGINEERING
Immediate Repair Items.
        Make repairs to roof leaks at southwest corner
        or K-Mart store (adjacent to electrical room
        and in electrical room).                                         No cost
                                                                (under warranty)
        Make repairs to aluminum stormwater leaders.                    $  5,750
        Allocate funding towards tenant fit-out of
        2,000 square feet of vacant National Music
        Center space (see note no. 1).                                  $ 20,000
        Allocate funding towards tenant fit-out of* 4.000 square
        feet or vacant Fireplace Shop space (see note no. 1),           $ 40,000
        Allocate funding towards tenant fit-out of a 4,984
        square feet of vacant Mauri Maurices Inc. space                 $ 49,840
        (see note no. 1).
        Total Immediate Repair Items                                    $110,390

Moderate Term Repair Rents:
        Paint exterior metal surfaces, such as safety tailings
        and pipe  bollards.                                             $  4,000
        Seal approximately 50.000 square yards of
        asphalt parking lot.                                            $ 35,000
        Re-stripe asphalt parking lot.                                  $ 32,000
        Allocate funding towards patching or parking lot.               $  1,000
        Total Moderate Terns Repair Items                               $ 34,000

Long, Term Repair Items:
        Allocate funding towards periodic repairs to
        gutters/leaders                                                 $  1,500
        Allocate funding towards periodic repairs to rooftop
        HVAC equipment at K-Mart (see note no. 2)
        Allocate funding towards periodic
        repairs, to all remaining rooftop HVAC
        equipment exclusive of K-Mart equipment.
        Allocate funding towards periodic
        exterior lighting repairs.                                      $  3,500
        Allocate funding towards periodic curbing
        repairs.                                                        $  2,000
        Allocate funding towards patching of parking lot.               $  1,500
        Allocate funding towards repair of K-Mart roof.                 $  2,000
        TWO Long Term Repair Items                                      $ 33,000
        Total All Items                                                 $185,598
        Note no. 1. The part incurring  the cost of this work will
                    depend upon the terms of the Igoe agreement between
                    the owner and the tenant.
        Note no 2.  This cost is reported to be the responsibility of K-Mart

<PAGE>

                             CASHIN ASSOCIATES, P.C.
                                     SUMMARY
                     ENGINEER-ING AND ENVIRONMENTAL FINDINGS

Property Address   Bradford Towne Centre, RR #6 West.     Report Date    2-18-00
                   Towanda, Pennsylvania                  CA Job No.      0039.1
Dime Reference No. 00-01-000021
Dime Account Officer Arthur Bellini

ENGINEERING
Immediate Repair Items:
        Remove materials that are stored within the
        open ceiling joists                                              No cost
               in the K-Mart warehouse area, obstructing the
               sprinkler heads from proper operation in the
               event of a fire.
               install concrete-filled pipe bollards in front of
               electrical equipment and gas meters mounted to
               exterior was.                                             $ 7,000
               Allocate funding towards tenant fit-out of 1,500
               square feet or                                            $45,000
               vacant Hou Feng Guo space (see note no. 1).
               Allocate funding towards tenant fit-out of 2,000
               square feet of vacant Corey V. Sickler Jr. space
               (see note no. 1).                                         $20,000
               Allocate funding towards tenant fit-out of 6,000
               square feet or vacant Shoeteria Inc./Post space
               (see note no. 1).                                         $60,000
               Allocate funding towards tenant fit-out of 2,200
               square feet of vacant The's My Team, Inc. space
               (see note no. 1).                                         $22,000
               Allocate funding towards tenant III-out of 4,000
               square feet or vacant Kurt Hahn space
               (see note no. 0.)                                         $40,000
               Allocate funding towards tenant fit-out of 5,000
               square feet of vacant Mauri Maurices, Inc. space
               (see note no. 1).                                        $ 50,000
             Total Immediate Repair Items                               $244,000
        Moderate Term Repair Items:
               Paint exterior metal surfaces such as safety railings    $  4,000
               and pipe bollards.
               Seal approximately 70,000 square yards of asphalt
               parking lot.                                             $ 50,000
               Re-stripe asphalt parking lot.                           $  2,000
               Allocate funding towards patching of parking lot         $  1,000
             Total Moderate Term Repair Items                           $ 57,000
        Long Term Repair Items:
               Allocate funding towards periodic rer-air; to
               gutters/leaders                                          $  1,500
               Allocate funding towards periodic repairs to rooftop
               HVAC equipment at JC Penney (see note no. 2)             $ 10,000
               Allocate funding towards periodic repairs to all
               remaining rooftop HVAC equipment, exclusive of
               JC Penney equipment.                                     $ 28,000
               Allocate funding towards war--.- tank/pump repairs.      $  2,500
               Allocate funding towards periodic exterior lighting
               repairs.                                                 $  4,000
               Allocate funding towards periodic curbing repairs.       $  2,000
               Allocate funding towards patching of parking lot.        $  1,500
               Allocate funding towards repair or roofs after
               warranty period expires in 2004.                         $  5,000
             Total Long Term Repair Items                               $154,500

             Total All Items
        Note no. 1. The party incurring the cost of this work will depend
                    upon the terms of the lease agreement between the
                    owner and the tenant.
        Note no. 2. This cost is reported to be the responsibility of JC Penney.<PAGE>

Note: This same form was executed in connection with mortgages on Berlin
Shopping Center, Ledgewood Mall, New Loudon Center, and Route 6 Shopping Center

THIS MORTGAGE IS AN OPEN-END MORTGAGE AND SECURES FUTURE ADVANCES
(All notices to be given to Mortgagee pursuant to 42 Pa. C.S.A.ss.8143 shall be
given as set forth in Section 4.2 of this Mortgage.)
Pennsylvania Tax Parcel Identification Nos.

                   Route 6 Mall                   27-14-28
                   27-10-15
                   Bradford Towne            62-087.07-004

                       ACADIA REALTY LIMITED PARTNERSHIP,
                                   Mortgagor,
                                       and
                     THE DIME SAVINGS BANK OF NEW YORK, FSB,
                       as Administrative Agent for Lenders
                   (as hereinafter defined) (together with its
                    successors in such capacity, "Mortgagee")

                         MORTGAGE, ASSIGNMENT OF LEASES
                        AND RENTS AND SECURITY AGREEMENT

                          Dated as of March 30th, 2000

                          Mortgage Amount: $59,000,000

                              RECORD AND RETURN TO:

                              Dewey Ballantine LLP
                           1301 Avenue of the Americas
                         New York, New York 100 19-6092
                         Attention: Val A. Soupios, Esq.

<PAGE>

                                   TABLE OF CONTENTS

                                                                            Page
                                                                            ----
CERTAIN DEFINITIONS ...........................................................4

ARTICLE I   Mortgagor's Covenants..............................................6
1.1.  Title ...................................................................6
1.2.  Security Agreement.......................................................7
1.3.  Recordation; Certain Costs and Expenses...................................
1.4.  Obligation to Pay........................................................8
1.5.  Compliance with Requirements ............................................8
1.6.  Scope of Security........................................................9
1.7.  Payment of Impositions for Mortgaged Property............................9
1.8.  Indemnity by Mortgagor..................................................10
1.9.  Insurance and Casualty..................................................11
1.10. Advances, Etc., by Mortgagee............................................14
1.11. Escrow Requirements.....................................................14
1.12. Financial Reporting.....................................................15
1.13. Maintenance and Operation of Mortgaged Property.........................15
1.14. Condemnation............................................................16
1.15. Leasing of Mortgaged Property...........................................17
1.16. Casualty to Mortgaged Property..........................................19
1.17. Interest after Default..................................................19
1.18. Due on Transfer.........................................................19
1.19. Costs of Litigation and Certain Proceedings.............................20
1.20. Late Charge.............................................................20
1.21. Trust Fund..............................................................20
1.22. Charges for Tax Searches, Etc...........................................21
1.23. Prepayment..............................................................21
1.24. Restrictions Affecting Mortgaged Property...............................21
1.25. Hazardous Substances....................................................21
1.26. Further Assurances......................................................24
1.27. Notice to Mortgagee.....................................................24
1.28. Set-Off.................................................................24
1.29. Obligations Secured.....................................................25
1.30. Year 2000 Capability....................................................25

ARTICLE II  Events of Default and Remedies....................................25
2.1. Definition of Event of Default...........................................25
2.2. Effect of Event of Default...............................................29
2.3. Foreclosure Sale Implementation..........................................31
2.4. Collection of Debt.......................................................32
2.5. Appointment of Receiver..................................................34
2.6. Possession by Mortgagee..................................................34

                                      (i)

<PAGE>

                                                                            Page
                                                                            ----
2.7.  Remedies Cumulative.....................................................34
2.8.  Right to Withdraw Proceeding, Etc.......................................34
2.9.  Waiver..................................................................34
2.10. Use and Occupancy of Mortgaged Property.................................35
2.11. Mortgagee's Attorneys' Fees.............................................35
2.12. Effect of Mortgagor's Tender............................................35
2.13. Mortgagee's Failure to Allow Cure Period................................35

ARTICLE III  Representations and Warranties...................................36
3.1.  Title, Etc..............................................................36
3.2.  Compliance with Requirements, Etc.......................................36
3.3.  Rent Roll...............................................................36
3.4.  Easements, Etc..........................................................36
3.5.  No Misrepresentations...................................................36
3.6.  Governmental Approvals..................................................36
3.7.  Approvals of Loan Documents.............................................37
3.8.  Other Beneficiaries.....................................................37
3.9.  Federal Law.............................................................37
3.10. Hazardous Substances....................................................37
3.11. Split Tax Lots..........................................................38

ARTICLE IV  Miscellaneous.....................................................38
4.1.  Partial Invalidity......................................................38
4.2.  Notices.................................................................38
4.3.  Waiver of Notice........................................................39
4.4.  Successors and Assigns..................................................39
4.5.  Usury Savings...........................................................39
4.6.  Counterparts............................................................40
4.7.  Governing Law...........................................................40
4.8.  Written Amendments......................................................40
4.9.  Actions, Approvals and Determinations...................................40
4.10. Receipt of Copy.........................................................40
4.11. Modifications, Releases, Etc............................................40
4.12. Construction............................................................41
4.13. Non-Merger..............................................................41

ARTICLE V  Transfer Taxes.....................................................41

ARTICLE VI  Additional Provisions.............................................42
6.1. Assignment of Leases and Rents...........................................42
6.2. Type of Property.........................................................43
6.3. Maximum Principal Indebtedness Secured...................................43
6.4. Exculpation..............................................................43
6.5. Exculpation of Trustees..................................................44
6.6. Reduction of Mortgage Amount.............................................44

                                      (ii)

<PAGE>

                   THE AMOUNT OF THIS MORTGAGE IS $59,000,000
                            (THE "MORTGAGE AMOUNT").

         THIS MORTGAGE, ASSIGNMENT OF LEASES AND RENTS AND SECURITY AGREEMENT,
made as of the 30th day of March, 2000, from Acadia Realty Limited Partnership,
a Delaware limited partnership, having an address at c/o Acadia Realty Trust, 20
Soundview Marketplace, Port Washington, New York 11050 ("Mortgagor"), to THE
DIME SAVINGS BANK OF NEW YORK, FSB, a banking corporation chartered under the
laws of the United States, as Administrative Agent for Lenders (as hereinafter
defined) having an address at EAB Plaza, Thirteenth Floor, Uniondale, New York
11556-0123 (together with its successors in such capacity, "Mortgagee"),

                                WITNESSET THAT:

         WHEREAS, Mortgagor is on the date of this Mortgage the owner of fee
title to that certain parcel of land and improvements thereon commonly known as
Bradford Towne Center, located in Bradford County, Pennsylvania and more
particularly described in Schedule A-1 annexed hereto and made part hereof and
of fee title to that certain parcel of land and improvements thereon commonly
known as U.S. Route 6 Mall, located in Wayne County, Pennsylvania and more
particularly described in Schedule A-2 annexed hereto and made part hereof,

         WHEREAS, concurrently with the execution and delivery of this Mortgage,
Assignment of Leases and Security Agreement (this "Mortgage"), Mortgagor will
borrow up to FIFTY NINE MILLION AND NO/100THS DOLLARS ($59,000,000) from
Lenders, which loan will be secured by this Mortgage, pursuant to the Loan
Agreement identified below;

         WHEREAS, Mortgagor has executed and delivered its note, dated the date
hereof, in the amount of $59,000,000 to The Dime Savings Bank of New York, FSB
(in its individual capacity as a Lender and not as Mortgagee, "The Dime"), which
note obligates Mortgagor to pay the Mortgage Amount, or so much thereof as may
be advanced from time to time in accordance with the terms of the Loan Agreement
(said note, as the same may hereafter be amended, modified, extended, severed,
assigned, renewed, replaced, or restated, and including any substitute or
replacement notes executed pursuant to Sections 3.07 or 11.05 of the Loan
Agreement, is hereinafter referred to individually and collectively as the
"Note");

         WHEREAS, this Mortgage is an "Open-End Mortgage" as set forth in 42 Pa.
C.S.A. ss.8143 and secures obligations up to a maximum amount of principal
indebtedness outstanding at any time of Seventy Five Million Dollars
($75,000,000), plus accrued and unpaid interest and other sums thereon,
including, but not limited to, advances, whenever made, for the payment of
taxes, assessments, maintenance charges, insurance premiums, costs incurred for
the protection of the Premises or the lien of this Mortgage, expenses incurred
by Mortgagee by reason of any default by Mortgagor under this Mortgage,
including, without limitation, legal fees and costs incurred by Mortgagee in
connection therewith, and advances for alteration or renovation on the Premises,

<PAGE>

together with all other sums due hereunder or under the Note or the Loan
Agreement and other Loan Documents (as defined in the Loan Agreement) or secured
hereby; and

         WHEREAS, in order to secure the payment of the Note, Mortgagor has duly
authorized the execution and delivery of this Mortgage.

         NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained,

         TO SECURE (a) the full, faithful and punctual (i) payment by Mortgagor
of all sums payable under the Note or any other Loan Document (as hereinafter
defined) up to the Mortgage Amount and (ii) performance of and compliance with
each and every term, condition, agreement, undertaking, covenant and provision
to be performed or complied with by Mortgagor pursuant to the Loan Documents,
and (b) the truth, accuracy and completeness of all representations and
warranties made by Mortgagor to Mortgagee in the Loan Documents or otherwise in
connection with the Loan, Mortgagor does hereby creates in favor of Mortgagee a
security interest in, and, by these presents, intending to be legally bound,
does hereby irrevocably give, grant, bargain, sell, warrant, alien, enfeoff,
remise, release, convey, assign, transfer, mortgage, hypothecate, deposit,
pledge, set over and confirm unto Mortgagee, its successors and assigns, all of
Mortgagor's estate, right, title, interest, claim and demand (whether at law or
in equity, in possession or expectancy) in, to and under the following described
property (collectively, the "Mortgaged Property"), whether now owned or held or
hereafter acquired by Mortgagor:

                  (i) the premises described in Schedule, including all
         easements, rights, privileges and appurtenances that in any way belong
         or appertain to such premises, and all estate, right, title, interest,
         claim or demand whatsoever of Mortgagor therein and in the streets and
         ways adjacent thereto, whether in law or in equity, in possession or
         expectancy, now or hereafter acquired, together with any and all
         options held by Mortgagor to purchase, lease, or sublease or otherwise
         acquire such premises or any portion thereof or interest therein, and
         any greater estate in such premises now owned or hereafter acquired by
         Mortgagor (collectively, the "Premises");

                  (ii) all structures, buildings or other improvements now or
         hereafter located upon the Premises or on any part thereof, including
         all plant, equipment, apparatus, machinery and fixtures forming part of
         said structures, buildings and other improvements (all, collectively,
         the "Improvements");

                  (iii) all fixtures, fittings, furniture, furnishings,
         appliances, apparatus, equipment, machinery and other articles of
         personal property (including without limitation all building service
         equipment and building materials 'and supplies), other than those owned
         by lessees, now or at any time hereafter attached to, placed upon, or
         used or to be used in any way in connection with the use, enjoyment,
         occupancy or operation of the Premises or the Improvements (all,
         collectively, the "Chattels");

                  (iv) all leases, subleases, tenancies, subtenancies and rental
         and occupancy agreements for the use and occupancy of all or any
         portion of the

                                        2

<PAGE>

         Mortgaged Property which are now in existence or which may exist at any
         time during the period that this Mortgage is in effect, together with
         any modifications, amendments, renewals or extensions of any of the
         foregoing, whether or not written and, if written, whether or not
         recorded (all of which present and future leases, subleases, tenancies,
         subtenancies and rental and occupancy agreements, as modified, amended,
         renewed or extended, are hereinafter referred to, each as a "Lease"
         and, collectively, as the "Leases"), and all estate, right, title,
         interest, claim and demand of Mortgagor under the Leases, including,
         without limitation, any cash or securities deposited by lessees or
         others to secure their performance, the rents and all other sums
         payable thereunder and the right to receive and collect the rents,
         revenues, receipts, income, earnings, issues, accounts receivable and
         profits derived from the Mortgaged Property (collectively, the
         "Rents") (subject, however, to any license to collect the Rents granted
         by Mortgage to Mortgagor herein and all guarantees of the performance
         of lessees and other obligors under such leases and other agreements
         and instruments;

                  (v) all Authorizations (as hereinafter defined), agreements,
         franchises, applications, and other authorizations relating to the use,
         occupation, development, subdivision or operation of the Mortgaged
         Property or any business or activity conducted by or on behalf of
         Mortgagor on the Mortgaged Property, including, without limitation, all
         trade names and other names under or by which the Mortgaged Property or
         any of the Improvements may at any time be operated or known and all
         rights to conduct business under any such names or any variant thereof,
         and all trademarks, good will, operating agreements, contract rights,
         service rights, accounts receivable, books and records and general
         intangibles (as such term is defined in the Uniform Commercial Code in
         effect in the state where the Premises are situated (as same may
         hereafter be amended from time to time, the "Uniform Commercial Code"))
         now owned or hereafter acquired, in any way relating to the Mortgaged
         Property;

                  (vi) all shares of stock or other evidence of ownership of any
         part of the Mortgaged Property that is owned by Mortgagor in common
         with others and all rights of Mortgagor in any owners' or members'
         association or similar group having responsibility for managing or
         operating any part of the Mortgaged Property;

                  (vii) all present and future insurance policies now or
         hereafter in effect insuring the Mortgaged Property or any portion
         thereof or any Rents derived therefrom, and any unearned premiums
         therefor accrued or to be accrued and all proceeds payable thereunder,
         together with all moneys now or hereafter on deposit for the payment of
         premiums in respect of such policies and Impositions (as defined in
         Section 1.7(a)), and all refunds of real estate taxes and assessments;

                  (viii) all proceeds of the conversion, voluntary or
         involuntary, of any of the foregoing into cash or liquidated claims,
         including, without limitation, proceeds of insurance and condemnation
         awards, judgments, awards of damages and settlements made as a result
         or in lieu of any condemnation, together with all claims, demands,
         causes of action and recoveries for any loss or diminution in value of
         any of the foregoing;

                                            3

<PAGE>

                  (ix) all warranties, guarantees, plans and specifications,
         shop and working drawings, soil tests and other environmental site
         tests and all other documents and materials (of any and every kind and
         nature) now or hereafter existing in respect of the Mortgaged Property;

                  (x) all betterments, renewals, extensions and replacements of,
         all substitutions for, and all additions, accessions and appurtenances
         to, the Mortgaged Property, hereafter acquired by or released to
         Mortgagor or constructed, assembled or placed by or for Mortgagor at,
         on or beneath the Premises or attached to the Premises or the Mortgaged
         Property, as more particularly provided in Section 1.6 of this
         Mortgage; and

                  (xi) all claims (of any and every kind and nature) relating to
         the foregoing components of the Mortgaged Property.

         TO HAVE AND TO HOLD unto Mortgagee, its successors and assigns forever.
Mortgagor further agrees as follows:

                               CERTAIN DEFINITIONS

         Unless the context otherwise specifies or requires, each term specified
below shall have the meaning ascribed to it below.

         "Authorizations" (each, an "Authorization") means all permits,
certificates, approvals, consents, licenses and authorizations (including,
without limitation, Environmental Authorizations) required to be obtained from
Governmental Authorities (as hereinafter defined) in order that the Mortgaged
Property shall be owned, used, operated and maintained, and that Mortgagor's
business thereat shall be conducted, in accordance with pertinent Requirements
(as hereinafter defined).

         "Default Rate" means the rate (or, if more than one, the highest of the
rates) of interest as set forth in the Loan Agreement, but in no event to exceed
the maximum rate allowed by law.

         "Environmental Authorizations" means all Authorizations that pertain to
health, Hazardous Substances (as hereinafter defined) or environmental or
ecological conditions at, on, under or about the Mortgaged Property.

         "Environmental Conditions" (each, an "Environmental Condition") means
all conditions relating to Hazardous Substances present at or emanating from the
Mortgaged Property, including, without limitation, the past, present or future
Release (as hereinafter defined) of Hazardous Substances and their presence in
the 'environment. This term also includes the residual contamination of
equipment and/or facilities and off-site treatment, recycling, reclamation,
transportation, storage, handling or disposal of Hazardous Substances from the
Mortgaged Property.

         "Environmental Laws" (each, an "Environmental Law") means all
Requirements pertaining to health, Hazardous Substances or environmental or
ecological conditions at, on, under or about the Mortgaged Property.

                                   4

<PAGE>

         "Event of Default" is defined in Section 2.1.

         "Governmental Authority" (collectively, "Governmental Authorities"
means the United States of America, the state and city, town or other
municipality in which the Premises are situated, any agency, court, department,
commission, board, bureau, instrumentality or political subdivision of any of
the foregoing, and any arbitration panel or tribunal, in each instance now
existing or hereafter created, having or claiming jurisdiction over Mortgagor,
the Mortgaged Property or the use, occupancy, operation or condition of the
Mortgaged Property or any portion thereof.

         "Hazardous Substances" (each, a "Hazardous Substance") means (i)
asbestos and asbestos-containing materials, radon, polychlorinated biphenyls,
formaldehyde, flammable explosives, radioactive materials, petroleum and
products containing or derived from petroleum, underground storage tanks and
other underground storage facilities (i.e., any tank or facility and related
piping system of which ten percent (10%) or more by volume is underground), (ii)
any and all materials, substances, pollutants, contaminants and wastes subject
to, or defined as "hazardous substances", "hazardous waste", "hazardous
material", "hazardous air pollutant", or "petroleum products" under, any
Environmental Law, and (iii) any and all other hazardous or toxic materials,
substances, pollutants, contaminants and wastes.

         "Lenders" means, collectively, The Dime and such other lending
institutions who become "Lenders" pursuant to the Loan Agreement, together with
their successors and permitted assigns in accordance with the terms of the Loan
Agreement.

         "Loan" means Mortgagee's loan made to Mortgagor the same day as this
Mortgage, in an amount equal to the principal amount of the Note.

         "Loan Agreement" means that certain Term Loan Agreement, dated as of
the date hereof, among Mortgagor, as Borrower, and Mortgagee, as Lender and
Administrative Agent, as the same may hereafter be amended, modified or
supplemented from time to time.

         "Loan Documents" (each, a "Loan Document") means, collectively, the
Loan Agreement, this Mortgage; the Note; any guaranty(ies) executed in
connection with the Loan (including, without limitation, the Agreement of
Guaranty, Undertaking and Indemnity); and any and all other instruments
delivered (whether now or hereafter and whether by Mortgagor or any other
person) to the holder of the Note in connection with this Mortgage and the Loan
including, but not limited to, the Mortgages of certain real property owned by
Mortgagor and more particularly described herein.

         "Loan Maturity Date" means the maturity date of the Note.

         "Note" means the Promissory Note dated the same day as this Mortgage
executed by Mortgagor in favor of Mortgagee in the amount of Fifty-Nine Million
Dollars ($59,000,000), together with any and all amendments, extensions,
renewals, modifications, refinancings and increases in the amount of, and
substitutions for, same.

                                        5

<PAGE>

         "Notices" (each, a "Notice") means: (i) citizen or governmental notices
of intent to sue under an Environmental Law or common law cause of action; (11)
requests for information under the authority of an Environmental Law; (iii)
notices of administrative actions or orders seeking penalties, fines, or
remedial activity under any Environmental Law; (iv) any "potentially responsible
party" letters under the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. ss.ss. 6902 et seq. ("CERCLA"); (v) judicial
complaints; (vi) notices of administrative or judicial enforcement actions
related to any Environmental Law; (vii) notices of violation related to any
Environmental Law received by any Guarantor, or (viii) any notice of formal or
informal investigation by any agency, or any consent order, whether proposed or
final.

         "Prepayment Charge" means the Prepayment Charge provided for in the ID
Note, if any.

         "Principal(s) of Mortgagor" means Acadia Realty Trust, a Maryland real
estate investment trust.

         "Requirements" (each, a "Requirement") means all laws, statutes,
regulations, ordinances, codes, rules, rulings, directives, determinations,
judgments, decrees, orders, injunctions, arbitral decisions, Authorizations,
Environmental Laws and other requirements of every Governmental Authority now or
hereafter in effect (including any of the foregoing that heretofore have been
promulgated but which are not yet in effect), in each instance as modified,
amended, renewed and/or extended, which are applicable to Mortgagor, to the
Mortgaged Property or any portion thereof, to the use, manner of use, occupancy,
possession, condition, operation, maintenance, alteration, repair, replacement,
or restoration of the Mortgaged Property or any portion thereof or to the
conduct of Mortgagor's business at the Mortgaged Property.

         "To the best of Mortgagor's knowledge" means, with respect to any
representation, warranty or certification contained in this Mortgage as to which
such phrase is expressly applied, that, after due inquiry, Mortgagor knows of no
fact(s) and has received no commununication(s), oral or written, which would
cause a reasonably prudent person in the position of Mortgagor to refrain from
making the representation, warranty or certification in question.

                                    ARTICLE I

                              Mortgagor's Covenants

         Mortgagor covenants and agrees for the benefit of Mortgagee as follows:

         1.1. Title. This Mortgage is and shall remain a valid and enforceable
first lien on the Mortgaged Property, subject solely to the exceptions referred
to in Section 3. 1. At Mortgagor's sole cost and expense, Mortgagor shall defend
and fully protect and preserve such title and the validity and priority of the
lien of this Mortgage against the claims of all other persons and entities.

                                        6

<PAGE>

         1.2. Security Agreement. This Mortgage shall constitute a security
agreement with respect to such components of the Mortgaged Property as to which
a security interest may attach under the Uniform Commercial Code and, with
respect to such of the Chattels as at any time may be fixtures, a fixture filing
under the Uniform Commercial Code. The Mortgaged Property consists of both real
and personal property. The filing of UCC-1 financing statements ("UCC-1s") in
the records customarily pertaining to personal property shall not be construed
as in any way derogating from the intention of the parties hereto that all
Chattels and other property used in connection with the production of Rents or
which are referred to in this Mortgage are, and at all times and for all
purposes and in all proceedings, both legal and equitable, shall be, regarded as
real estate whether or not (a) any such item is physically' attached to the
Premises or any of the Improvements, (b) serial numbers are used for the better
identification of certain of the Chattels capable of being thus identified in a
recital contained herein or (c) any such item is referred to in any UCC-1 so
filed at any time. Similarly, the mention in the UCC- of (x) the rights in the
proceeds of any fire and/or hazard insurance policy, (y) any award in
condemnation or eminent domain proceedings for a taking or for loss of value, or
(z) the debtor's interest as lessor in any present or future Lease or rights to
income growing out of the use or occupancy of the Mortgaged Property, whether
pursuant to a Lease or otherwise, shall never be construed as in any way
derogating from, or altering any of the rights of Mortgagee set forth in this
Mortgage or impugning the priority of Mortgagee's lien granted hereby or by any
other recorded instrument, but such mention in the UCC-1s is declared to be for
the protection of Mortgagee in the event any court or judge shall at any time
hold with respect to (x), (y) or (z) above that notice of Mortgagee's priority
of interest, to be effective against a particular class of persons, must be
filed in the Uniform Commercial Code records. The addresses of Mortgagor
(Debtor) and Mortgagee (Secured Party) are set forth on page I of this Mortgage.
This Mortgage is to be filed for record with the recorder of deeds of the county
or counties in which the Premises are situated. Mortgagor is the record owner of
the Mortgaged Property.

         1.3. Recordation: Certain Costs and Expenses. (a) Recording and Filing
Upon the execution and delivery of this Mortgage, and thereafter from time to
time, whether or not Mortgagee so demands, Mortgagor, at Mortgagor's sole cost
and expense, shall cause this Mortgage and any other instrument creating or
evidencing Mortgagee's lien upon, or security interest in, the Mortgaged
Property and each Document of Further Assurance (as defined in Section 1.26) to
be filed, registered or recorded, as the case may be, in such manner and in such
places as may be required by any Requirement in order to publish notice of, and
fully to protect and preserve, the liens and security interests created by and
granted pursuant to this Mortgage with respect to the Mortgaged Property.

         (b) Fees and Costs of Mortgage. Related Documents. Mortgagor shall
punctually pay in strict compliance with applicable Requirements (i) all filing,
registration or recording fees with respect to, and all other expenses incident
to, the execution, acknowledgment and filing, registration or recording of this
Mortgage, any amendment, extension, renewal or modification hereof, any mortgage
supplemental hereto, any other security instrument with respect to the Mortgaged
Property, any Document of Further Assurance, and any other Loan Document, and
(ii) all stamp taxes and other taxes, duties, imposts, assessments and charges
imposed by Governmental Authorities arising out of or in connection with the
execution, delivery, filing, registration, or recording of any of the foregoing.

                                       7

<PAGE>

         1.4. Obligation to Pay. Mortgagor shall punctually pay in strict
compliance with the Loan Documents (a) the principal, interest, Prepayment
Charge and all other sums evidenced by the Note and (b) all other moneys,
indebtedness, obligations and liabilities (of any and every kind or nature) now
or hereafter owing (whether to Mortgagee, any Governmental Authority or any
other third party) pursuant to any one or more of the Loan Documents. All of the
foregoing shall be deemed to be indebtedness secured by this Mortgage and shall
be paid without any abatement, credit, reduction, deduction, claim,
counterclaim, set-off or offset whatsoever, and free and clear of all defenses.

         1.5. Compliance with Requirements. (a) Legal Requirements. Mortgagor
shall fully, faithfully and punctually comply (and shall cause all lessees and
other persons and entities that occupy or enter upon the Mortgaged Property at
all times so to comply) with all applicable Requirements, including, without
limitation, Requirements that, if violated, would cause the Mortgaged Property
or a part thereof to be subject to forfeiture. Mortgagor, if a corporation,
partnership, trust or other legal entity, shall do all things necessary to
preserve and keep in full force and effect in all jurisdictions where the same
presently are in force and effect Mortgagor's existence, franchises, rights and
privileges.

         (b) Insurance Policy Requirements. Mortgagor shall fully, faithfully
and punctually comply (and shall cause all lessees and other persons and
entities that occupy or enter upon the Mortgaged Property so to comply) with all
provisions of all insurance policies covering or applicable to any portion of
the Mortgaged Property, all requirements of the issuer of any such policies and
all orders, rules, regulations, directives, codes and other requirements of the
National Board of Fire Underwriters (or any successor body or other body
performing similar functions) applicable to Mortgagor, to the Mortgaged Property
or to the use, manner of use, occupancy, possession, operation, maintenance,
alteration or repair of the Mortgaged Property or any portion thereof, except
that Mortgagor shall not effect any such compliance that necessitates structural
changes to any of the Improvements without the prior written consent of
Mortgagee.

         (c) Senior Liens. If this Mortgage is a second or more junior mortgage
on the Mortgaged Property, then: (i) Mortgagor shall fully, faithfully and
punctually perform and comply with each and every term, covenant, and condition
of any more senior mortgage (a "Senior Mortgage") and never permit the same to
go into default; (ii) the occurrence of any circumstance or event that would
permit the holder of any Senior Mortgage to exercise any remedy under such
Senior Mortgage shall automatically and immediately (upon the expiration of any
applicable' grace period provided for under the Senior Mortgage) and without
notice from Mortgagee constitute an Event of Default under this Mortgage; (iii)
Mortgagor shall not make any agreement with the holder of any Senior Mortgage
that shall in any way modify, change, alter or extend any of the terms or
conditions set forth in such Senior Mortgage or in any instrument executed in
connection therewith, nor shall Mortgagor request or accept any future advances
under such Senior Mortgage or any such other instrument, without Mortgagee's
express written consent; and (iv) so long as the Senior Mortgage has not

                                        8

<PAGE>

been discharged, notwithstanding anything to the contrary in this Mortgage, the
relative priorities of this Mortgage and the Senior Mortgage(s) shall be
governed by otherwise applicable law.

         1.6. Scope of Security All right, title and interest of Mortgagor in
and to all betterments, renewals, extensions and replacements of, all
substitutions for, and all additions, accessions and appurtenances to, the
Mortgaged Property, hereafter acquired by, or released to, Mortgagor or
constructed, assembled or placed by or for Mortgagor at, on or beneath the
Premises or attached to the Improvements, and all conversions of any of the
foregoing, immediately upon such acquisition, release, construction, assembling,
placement or conversion, as the case may be, without any further mortgage,
conveyance, assignment or other act of Mortgagor, shall become sub ect to the
liens and security interests created by or pursuant to this Mortgage as fully
and completely, and with the same effect, as if now owned by Mortgagor and
specifically described herein. Mortgagor shall, however, execute and deliver to
Mortgagee any and all such further assurances, mortgages, conveyances or
assignments thereof as Mortgagee may reasonably require for the purpose of
expressly and specifically subjecting the same to the lien of this Mortgage.

         1.7. Payment of Impositions for Mortgaged Property. (a) Taxes.
Charges, Etc, Except to the extent that Mortgagee exercises the right specified
in Section 1. 11, Mortgagor shall, at least ten days before the applicable due
date, pay and discharge all taxes and other charges of every kind and nature
imposed upon or assessed against Mortgagor or the Mortgaged Property or any
portion thereof or upon the Rents derived therefrom or arising in respect of the
occupancy, use, possession or transfer thereof, including, without limitation,
real estate, school, personal property, income, gross receipts and franchise
taxes; water, water meter and sewer rents, rates and charges; service charges
with respect to police protection, fire protection, street and highway
construction, maintenance and lighting, sanitation and water supply; assessments
and levies; permit, inspection and license fees; and all other public and
private charges, general and special, ordinary and extraordinary, foreseen and
unforeseen, together with all interest, fines and penalties applicable thereto
(each of the foregoing, an "Imposition" and, collectively, "Impositions").
Mortgagor shall, upon Mortgagee's request, promptly deliver to Mortgagee
documentation reasonably satisfactory to Mortgagee evidencing such payments.

         (b) Liens and Claims. Mortgagor shall promptly pay all lawful claims
and demands of mechanics, materialmen, laborers and others that, if not timely
paid, might result in, or permit the creation of, a lien, other encumbrance or
charge on the Mortgaged Property or any part thereof, or on the Rents derived
therefrom, or lead to the interruption or suspension of any business of
Mortgagor. Mortgagor shall, upon Mort agee's request, promptly deliver to
Mortgagee evidence reasonably satisfactory to 9 Mortgagee of any such
payment. Mortgagor shall not create or permit to be created any mortgage, lien,
other encumbrance or charge on the Mortgaged Property or any part thereof or on
the interest of Mortgagor or Mortgagee or any Lender therein other than this
Mortgage and promptly shall cause any such mortgage, lien, other encumbrance or
charge to be discharged, bonded or otherwise secured to Mortgagee's
satisfaction.

         (c) Mortgagor's Right to Contest. Mortgagor, in good faith and at
Mortgagor's sole cost and expense and after Mortgagee shall have received
written notice

                                        9

<PAGE>

thereof from Mortgagor, may contest the amount or the validity of any Imposi
tion by appropriate legal proceedings, provided that (1) Mortgagor shall
prosecute such proceedings diligently; (ii) no Event of Default shall exist
during the pendency of any such proceedings; (iii) Mortgagor shall have paid
same in full under protest unless such proceedings shall operate to suspend the
collection of any such Imposition or other realization thereon and neither the
Mortgaged Property nor any part thereof nor interest therein nor any of the
Rents derived therefrom would, by reason of such suspension, be forfeited or
lost, or subjected to any lien, other encumbrance or charge and neither
Mortgagor nor Mortgagee would, by reason thereof, be subject to civil or
criminal liability; (iv) during such contest Mortgagor shall, at the option of
Mortgagee, provide security satisfactory to Mortgagee assuring the payment of
the contested Imposition and of any additional charge, fine, penalty or expense
arising from or incurred as a result of such contest and any costs or expenses
incurred or to be incurred by Mortgagee in connection with or as a consequence
of Mortgagor's contest; and (v) if at any time nonpayment of any Imposition
would result in the delivery of a tax deed or similar instrument to the
Mortgaged Property or any portion thereof or any forfeiture with respect to the
Mortgaged Property, then Mortgagor shall pay such Imposition (together with all
applicable fines, penalties and other governmental charges and any interest or
costs with respect thereto) in time to prevent the delivery of such deed or
instrument or the effectuation of such forfeiture.

         1.8. Indemnity by Mortgagor. Mortgagor shall defend and indemnify
Mortgagee and all directors, officers, shareholders, employees, attorneys and
agents of Mortgagee (collectively, the "Indemnified Parties") against, and save
the Indemnified Parties harmless from, and shall reimburse the Indemnified
Parties with respect to, any and all claims, demands, actions, causes of action,
injuries, orders, losses, liabilities (statutory or otherwise), obligations,
damages (including, without limitation, consequential damages), fines,
penalties, taxes, costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses) incurred by, imposed upon or asserted against the
Indemnified Parties or any one or more of them by reason of, or in connection
with, (a) Mortgagee's interest in any Loan Document or the Mortgaged Property,
(b) any misrepresentation or other incorrect statement or certification by
Mortgagor or any Guarantor contained in this Mortgage or any other Loan
Document, (c) any failure by Mortgagor to comply with any of the terms,
conditions or other provisions set forth in this Mortgage or any other Loan
Document or in any recorded instrument that affects the Mortgaged Property, (d)
any acts or omissions of Mortgagee in connection with the exercise by Mortgagee
of any right, power or remedy available to Mortgagee under this Mortgage or any
other Loan Document, (e) any use, non-use, possession, occupancy, alteration,
repair, condition (whether patent or latent), operation, maintenance or
management of the Mortgaged Property or any portion thereof, or (f) any
accident, injury (including death at any time resulting therefrom) or damage to
any person or property occurring in, on or about the Mortgaged Property or any
portion thereof, whether resulting from any act or omission of Mortgagor or any
agent, employee, contractor, lessee, sublessee, licensee or invitee of Mortgagor
or otherwise. Mortgagor shall pay, and save Mortgagee harmless from, any taxes,
impositions, charges, assessments or levies except income and franchise taxes
imposed on Mortgagee by reason of Mortgagee's ownership of the Note or this
Mortgage or any other Loan Document or by reason of a sale or other transfer of
the Mortgaged Property or any

                                       10

<PAGE>

portion thereof. All amounts payable to Mortgagee under this Section 1.8 shall
be payable upon demand by Mortgagee, together with interest at the Default Rate
from the date of such demand until the date of receipt by Mortgagee of full
payment, and shall be secured by this Mortgage. Mortgagor's obligations under
this Section 1.8 shall survive payment in full of the Note and the other Loan
Documents and any discharge, release or satisfaction of this Mortgage, any
complete or partial foreclosure of this Mortgage and/or the delivery of one or
more deeds in lieu of any such foreclosure.

         1.9. Insurance and Casualty. (a) Casualty Insurance. Mortgagor shall
keep the Improvements and Chattels insured for the benefit of Mortgagee for one
hundred percent (100%) of full replacement cost in so-called "all-risk" form.
The applicable policies shall include (i) coverage against loss or damage by
fire, flood, earthquake, underground hazards, collapse and explosion and such
other hazards as may be specified at any time by Mortgagee, (ii) replacement
cost and agreed amount endorsements or the equivalent thereof (with no reduction
for depreciation), an endorsement covering the costs of demolition and the
increased costs of construction attributable to the enforcement of laws,
building codes and/or ordinances, and (iii) "time element" coverage, which shall
ensure payment to Mortgagee of all moneys due Mortgagee under the Loan Documents
and "extra expense" (i.e., soft costs) coverage.

         (b) Other Insurance. Mortgagor shall also maintain (i) policies that
provide boiler and machinery comprehensive coverage for all mechanical and
electrical equipment at the Premises insuring against breakdown or explosion of
such equipment on a replacement cost value basis; such policies shall provide
the coverage specified in clause (iii) of the preceding paragraph (a); (ii)
business interruption or loss of rental income insurance for a period of not
less than one year in connection with all policies of property and boiler and
machinery insurance; (iii) commercial general liability insurance (including
contractual liability) covering the Premises and Mortgagor's operations in an
amount not less than One Million Dollars ($1,000,000) per occurrence and Two
Million Dollars ($2,000,000) in the aggregate per location; (iv) commercial
automobile liability insurance with a limit of not less than One Million Dollars
($1,000,000) combined single limit and endorsed to cover owned, hired and
non-owned automobiles; (v) worker's compensation insurance covering all of
Mortgagor's employees situated at the Premises in accordance with statutory
requirements of the State of New York and including an endorsement for
employer's liability coverage; and (vi) umbrella liability insurance in excess
of the foregoing liability coverage with a limit of not less than Five Million
Dollars ($5,000,000) or such higher limits as Mortgagee may specify. The
foregoing commercial general liability and umbrella liability policies shall
also contain a so-called "products-completed operations endorsement." If any
part of the Premises is at any time used for the sale or dispensing of beer,
wine or any other alcoholic beverages, so-called "Dram Shop" or "Liquor Law
Liability Insurance" against claims brought by, or liability arising directly or
indirectly to, persons or property on account of such sale or dispensing of
beer, wine or other alcoholic beverages shall also be furnished (including
coverage against loss of means of support), all in such amounts as Mortgagee may
specify. To the extent applicable, special coverages must also be furnished for
other operations of Mortgagor or any tenants at the Premises, including garage
operations, asbestos removal and such other operations as may be designated by
Mortgagee from time to time. In addition, if any underground fuel storage tank
is situated at the Premises, then Mortgagor

                                       11

<PAGE>

shall maintain, in such amounts as Mortgagee may specify, "Environmental
Impairment Liability Insurance" covering the cost of clean up and/or removal
(on or off the Premises) associated with a spill or a leak emanating from such
tank.

         (c) No Separate Insurance. Mortgagor shall not procure separate
insurance concurrent in form or contributing in the event of loss with that
required to be maintained under this Section 1.9.

         (d) Flood Insurance. If the Mortgaged Property is located in an area
that has been, or at any time is, identified by the secretary of Housing and
Urban Development as a flood hazard area, Mortgagor shall keep the Improvements
and Chattels insured against loss by flood in such amount as Mortgagee shall
require. All proceeds of any such insurance shall be payable to Mortgagee and
may be applied as set forth in Section 1.9(h) below.

         (e) Policy Requirements. All insurance required or permitted to be
maintained pursuant to this Section 1.9 shall (i) be maintained at the sole cost
and expense of Mortgagor; (ii) be written in such forms and by such companies as
are satisfactory to Mortgagee (each such company, in any event, shall be
authorized to do business in the state where the Premises are situated and shall
have an Alfred M. Best Company, Inc. rating of "A-:X" or higher); (iii) contain
the standard New York State Mortgagee Clause or an equivalent satisfactory to
Mortgagee or, with respect to any insurance as to which the foregoing shall not
be applicable, provide for Mortgagee to be named as an additional insured; (iv)
name Mortgagee as the loss payee; (v) include waivers by all insurers of all
rights of subrogation against any named or additional insured, the indebtedness
secured hereby and the Mortgaged Property; (vi) except as otherwise agreed to in
writing by Mortgagee, provide for no deductible in excess of 10,000 per loss;
and (vii) provide that no cancellation (including, without limitation, for
nonpayment of premiums), reduction in amount or material change in coverage
shall be effective until at least thirty (30) days after receipt by Mortgagee of
written notice thereof; (viii) provide that no act or omission or negligence of
Mortgagor or any other named insured or violation of warranties, declarations or
conditions by Mortgagor or any other named insured shall affect or limit the
obligation of the insurer to pay the amount of any loss sustained; and (ix)
contain such other provisions as Mortgagee may require. Mortgagor shall deliver
the original policies of insurance to Mortgagee, but Mortgagee shall under no
circumstance be deemed to have knowledge of the contents of such policies by
reason of its custody thereof. Mortgagor shall deliver to Mortgagee new or
renewal policies to replace expiring policies at least thirty (30) days before
their respective expiration dates. Each such new or renewal policy shall bear a
notation by the insurer or its authorized agent evidencing payment of the
required premium. If any policy shall be cancelled by the insurer, become void
by reason of any act(s) or omission(s) of Mortgagor or any other person or
entity or by reason of the impairment of the capital of the insurer thereunder,
or if for any reason in Mortgagee's sole discretion said policy shall become
unsatisfactory to Mortgagee, Mortgagor shall immediately procure new or
additional insurance satisfactory to Mortgagee. Mortgagors approval of any
insurance procured by Mortgagor shall not be construed, or relied upon by
Mortgagor, as a representation of the solvency of any insurer or the sufficiency
of any amount of insurance. If Mortgagor shall fail in a timely manner either to
keep in force

                                       12

<PAGE>

any insurance required under this Mortgage or to deliver to Mortgagee any policy
required hereunder, Mortgagee shall have the right, but shall not be obligated,
to remedy any such failure by the expenditure of moneys or otherwise, in which
event the provisions of Section 1.10 below shall be applicable.

         Unearned Premiums. Mortgagor hereby irrevocably and unconditionally
assigns to Mortgagee the unearned premiums on all insurance policies furnished
hereunder and consents to the cancellation of such policies (and the refund of
all unearned premiums to Mortgagee) if Mortgagee purchases the Mortgaged
Property at foreclosure sale. Any such unearned premiums shall be applied
against sums due to Mortgagee under the Note or this Mortgage.

         (a) Effect of Foreclosure . Upon a foreclosure of this Mortgage or
other transfer of title to the Mortgaged Property in full or partial payment of
the Loan, all right, title, and interest of Mortgagor in and to any insurance
policies then in force shall pass to the purchaser or grantee or other person
designated by the holder of the Note, and Mortgagor hereby irrevocably and
unconditionally appoints Mortgagee as Mortgagor's true and lawful attorney-in-
fact, coupled with an interest, in Mortgagor's name and stead, with full power
of substitution, to assign and transfer all such policies and the proceeds
thereof to such purchaser, grantee or other person.

         (h) Casualty: Application of Insurance Proceeds. Mortgagor shall give
Mortgagee immediate notice of any damage or destruction affecting the Mortgaged
Property. Promptly thereafter Mortgagor shall make proof of loss and diligently
undertake (if necessary, by means of legal proceedings) to obtain payment of the
proceeds under applicable insurance policies, except that Mortgagee shall have
the right to join Mortgagor in adjusting any loss in excess of Two Hundred Fifty
Thousand Dollars ($250,000). All insurance proceeds shall be paid directly to
Mortgagee, and all insurance companies are hereby irrevocably and
unconditionally directed by Mortgagor to make payment for any covered loss to
Mortgagee. Whether or not repairs or restoration shall have been made, Mortgagee
shall have the right to apply such proceeds (i) first to reimbursing Mortgagee
for all costs incurred by it in the collection of such proceeds, (ii) second to
the prepayment of the principal of the Note, in whole or in part (to
installments in inverse order of maturity), all accrued and unpaid interest
thereon and Prepayment Charge, and (iii) third to the payment of such other
obligations and/or liabilities of Mortgagor under the Loan Documents as
Mortgagee shall determine. The balance, if any, of such proceeds shall be paid
to whoever may be legally entitled to the same.

         (i) Application of Insurance Proceeds. Notwithstanding anything to the
contrary set forth in the preceding Section 1.9(h), if the Mortgaged Property is
damaged or destroyed and Mortgagee determines that all of the conditions
specified in this Section 1.9(i) have been satisfied, then Mortgagee shall apply
the proceeds of insurance (i) first to reimbursing itself for all costs incurred
by it in the collection of such proceeds and (ii) second to reimbursing
Mortgagor for such actual costs as shall have been incurred by Mortgagor in
restoring the Mortgaged Property and shall be approved by Mortgagee. Insurance
proceeds shall be applied to such restoration solely if (A) Mortgagee determines
that: (i) the Mortgaged Property is capable of being suitably restored in
accordance with applicable Requirements to the value, condition, character and
general utility existing prior to such damage or destruction, and, in any event,
to a

                                       13

<PAGE>

value at least 1.35 times the amount then outstanding under the Note; (ii)
sufficient funds are unconditionally available (from proceeds of insurance
and/or from funds of Mortgagor) to enable Mortgagor promptly to commence, and
thereafter diligently to prosecute to completion, such restoration; (iii)
Mortgagor is not in default or in breach of any obligations under any Loan
Document, no uncured Event of Default exists under any Loan Document and no
facts or circumstances exist that would constitute an Event of Default with the
passage of time or the giving of notice or both; and (iv) neither the validity,
enforceability nor priority of the lien of this Mortgage shall be adversely
affected; (B) Mortgagor has entered into a written agreement, satisfactory in
form and substance to Mortgagee, containing such conditions to disbursements as
are employed at the time by Mortgagee for construction loans; (C) Mortgagor has
delivered to Mortgagee such security as Mortgagee might have reasonably required
to assure completion of restoration in accordance with the standards specified
above; and (D) Mortgagor has complied with such further reasonable requirements
as Mortgagee might have specified.

         1.10. Advances, Etc. by Mortgagee. If Mortgagor falls fully, faithfully
or punctually to perform or comply with any obligation set forth in or to be
performed or complied with pursuant to any Loan Document, then Mortgagee shall
have the right, but shall not be obligated, to perform or comply with the same
and make such advances therefor as, in Mortgagee's opinion, may be necessary or
appropriate, all for the account and at the expense of Mortgagor. To the extent
of all sums so advanced (including, without limitation, attorneys' fees and
disbursements), Mortgagee shall have a lien upon the Mortgaged Property which
shall be secured by this Mortgage. Mortgagor shall repay on demand all sums so
advanced on Mortgagor's behalf with interest computed at the Default Rate on
each such sum from the date advanced by Mortgagee until the date Mortgagee has
received repayment thereof. Mortgagee's exercise of its rights under this
Section 1.10 shall not be deemed to cure any circumstance that would otherwise
constitute an Event of Default or to impair any of Mortgagee's other rights or
remedies with respect thereto, and the obligations of Mortgagor under this
Section 1.10 shall pertain irrespective of whether the failure of Mortgagor
referred to in the initial sentence of this Section results in the existence of
an Event of Default. Mortgagor shall permit Mortgagee and its agents and
representatives to enter the Mortgaged Property at all reasonable times for the
purposes of (a) inspecting the same, (b) determining whether Mortgagor is in
compliance with all of Mortgagor's obligations under this Mortgage, (c)
performing or complying with, in Mortgagee's sole election, any one or more of
Mortgagor's obligations under the Loan Documents and (d) undertaking such other
acts as are consistent with the provisions of this Mortgage. No such entry shall
make Mortgagee a "mortgagee in possession," nor shall Mortgagee be liable for
inconvenience, annoyance, disturbance, loss of business or other damage arising
out of, or in connection with, actions taken by Mortgagee in good faith under
this Section 1.10.

         1.11. Escrow Requirements. Notwithstanding anything to the contrary set
forth in any Loan Document, Mortgagor shall pay to Mortgagee, at the time of
each payment of a monthly installment of interest or principal under the Note, a
sum equal to one-twelfth of the estimated annual amount of all Impositions, and,
at Mortgagee's option following a default in the payment thereof, a sum equal to
one-twelfth of the annual amount of any other recurring charges with respect to
the Mortgaged Property (such as insurance premiums), so that at least one month
before the due date of each such charge

                                       14
<PAGE>

Mortgagee shall hold sufficient funds to pay each such charge in full. The
determination of the amount so payable and of the fractional part thereof to be
deposited with Mortgagee, so that the aggregate of such deposits shall be
sufficient for this purpose, shall be made by Mortgagee. Such amounts shall be
held by Mortgagee, but not in trust and without interest, and applied to the
payment of such charges in such order or priority as Mortgagee shall determine,
on or before the respective dates on which the same or any of them would become
delinquent. If at any time before the date payment of any such charge is due,
Mortgagee determines that the amounts then on deposit therefor shall be
insufficient for the payment of such obligation in full, then Mortgagor, within
ten days after demand, shall deposit the amount of the deficiency with
Mortgagee. This Section 1.11 does not affect any right or remedy of Mortgagee
under any provisions of this Mortgage or of any statute or rule of law to pay
any such amount and to add the amount so paid, together with interest at the
Default Rate, to the indebtedness secured by this Mortgage, as more fully
described in Section 1.10. Upon the occurrence of an Event of Default, Mortgagee
may, at its option and without notice to Mortgagor, apply any funds held
pursuant to this Section in payment of any of the obligations described above or
to any unpaid principal or interest under the Note in such order as Mortgagee
may determine.

         1.12. Financial Reporting (a) Mortgagor's Books and Records. Mortgagor
shall keep proper books and records of account in accordance with the applicable
provisions of the Loan Agreement.

         (b) Financial Statements. Mortgagor shall deliver to Mortgagee, and
shall cause the Guarantor(s), if any, to deliver to Mortgagee, such financial
statements and balance sheets as are required pursuant to the applicable
provisions of the Loan Agreement.

         1.13. Maintenance and Operation of Mortgaged Property. Mortgagor shall
not commit any waste on the Mortgaged Property or make any change in the use of
the Mortgaged Property that would in Mortgagee's judgment in any way increase
the likelihood of fire or other hazard, increase any insurance rates for the
Mortgaged Property, or reduce the value or utility of the Mortgaged Property.
Mortgagor shall, at all times, maintain the Mortgaged Property in good and
efficient operating order and condition and shall promptly make, from time to
time, all necessary or desirable repairs, renewals, replacements, additions and
improvements thereto, whether structural or nonstructural, exterior or interior,
ordinary or extraordinary, foreseen or unforeseen. Mortgagor shall promptly
comply with all requirements necessary to preserve and extend any and all
rights, licenses, permits, privileges, franchises and concessions that apply to
the Mortgaged Property or have been (or subsequently are) granted to or
contracted for by Mortgagor in connection with any existing or proposed use of
the Mortgaged Property. The Improvements shall not be removed, demolished or
substantially altered without the prior written consent of Mortgagee. (If,
however, Article VI recites that this Mortgage is a construction mortgage or a
building loan mortgage, then Mortgagor's strict compliance with the Building
Loan Agreement shall not constitute a violation of the preceding sentence.) No
Chattels shall be removed without Mortgagee's prior written consent, unless
Mortgagor immediately makes appropriate replacements free of superior title,
liens and claims and of a quality and value at least equal to that of the
Chattels so

                                       15
<PAGE>

removed. Mortgagor shall cause all lessees and other persons and entities
occupying the Mortgaged Property to comply with the obligations imposed upon
Mortgagor in this Section 1.13.

         1.14. Condemnation Mortgagor, immediately upon obtaining knowledge of
the institution of any proceeding for either (a) the condemnation of the 1.2
Mortgaged Property or any portion thereof, or (b) the change of grade or
widening of streets affecting or abutting the Premises shall notify Mortgagee of
the pendency of such proceeding. Mortgagee may participate in any such
proceeding, in its own name and/or as Mortgagor's attorney-in-fact, as
hereinbelow provided (with Mortgagee being represented in either case by
attorneys selected by Mortgagee, whose fees and expenses Mortgagor shall pay
upon demand), and, upon Mortgagee's request, Mortgagor shall deliver to
Mortgagee instruments which shall facilitate such participation. Mortgagor
hereby irrevocably and unconditionally (x) assigns to Mortgagee all of
Mortgagor's right, title and interest in and to any award or other compensation
payable pursuant to or in connection with any such proceeding, and agrees to pay
(and directs all Governmental Authorities to pay) to Mortgagee any such award or
other compensation, and (y) appoints Mortgagee as Mortgagor's true and lawful
attorney-in-fact coupled with an interest, in Mortgagor's name and stead, with
full power of substitution to commence, appear in and prosecute any such
proceeding, to settle or compromise any claim in connection therewith, to
collect and receive such award or other compensation and to take such other
actions as Mortgagee may determine are necessary or desirable. Mortgagee shall
be under no obligation to question the amount of any such award or other
compensation and may accept the same in the amount in which the same shall be
paid. The proceeds of any award or other compensation so received (including any
award for change of grade or widening of streets affecting, or abutting the
Premises) shall be applied (i) first to reimbursing Mortgagee for all costs
incurred by it in any such proceeding, (ii) second to the prepayment of the
principal of the Note, in whole or in part (to installments in inverse order of
maturity), all accrued and unpaid interest thereon at the rate of interest
provided therein and in the Loan Agreement, including any applicable Prepayment
Charge, and (iii) third to the payment of such other obligations and/or
liabilities of Mortgagor under the Loan Documents as Mortgagee shall determine.
The balance, if any, of such proceeds shall be payable to whoever may be legally
entitled to the same. Unless and until Mortgagee has actually received moneys
with respect to the subject matter of this Section 1.14 and applied such moneys
to reduction of the indebtedness secured by this Mortgage, Mortgagor shall
continue to make all payments provided for in the Loan Documents strictly in
accordance with the provisions thereof. Notwithstanding the provisions of the
immediately preceding paragraph, provided no default exists hereunder, Mortgagee
agrees to apply any such condemnation award proceeds received by it to the
reimbursement of Mortgagor's costs of restoring the Improvements. Advances of
condemnation award proceeds shall be made to Mortgagor from time to time in the
same manner and subject to the same conditions as advances of building loan
proceeds are made under the Loan Agreement, or if this Mortgage is not a
building loan mortgage, in accordance with Mortgagee's standard construction
lending practices, terms and conditions; amounts not required for such purposes
shall be applied, at Mortgagee's option, to the prepayment of the Note and to
interest accrued and unpaid thereon (at the rate of interest provided therein
regardless of the rate of interest payable on the award by the condemning
authority) in such order and proportions as Mortgagee may elect. In no

                                       16
<PAGE>

event shall Mortgagee be required to advance such proceeds to Mortgagor unless
Mortgagee shall have (i) received satisfactory evidence that the funding
expiration dates of the commitment, if any, for the permanent financing of the
Improvements have been extended for such period of time as is reasonably
necessary to complete said restoration and (11) reasonably determined that the
restoration of the Improvements to an economically viable architectural whole
can be completed by the then Maturity Date of the Note at a cost which does not
exceed the amount of available condemnation award proceeds or, in the event that
such proceeds are reasonably determined by Mortgagee to be inadequate, Mortgagee
shall have received from Mortgagor a cash deposit equal to the excess of said
estimated cost of restoration over the amount of said available proceeds. If the
conditions for the advance of condemnation award proceeds for restoration set
forth in clauses (1) and (ii) above are not satisfied within sixty (60) days of
Mortgagee's receipt thereof or if the actual restoration shall not have been
commenced within such period, Mortgagee shall have the option at any time
thereafter to apply such condemnation award proceeds to the payment of the Note
and to interest accrued and unpaid thereon (at the rate of interest provided
therein regardless of the rate of interest payable on the award by the
condemning authority) in such order and proportions as Mortgagee may elect.

         1.15. Leasing of Mortgaged Property. (a) Existing Leases. Mortgagor
represents and warrants to Mortgagee that, as to each existing Lease, (i) the
Lease has been duly executed by the lessor and lessee thereunder, is in full
force and effect and is valid, binding and enforceable against each of said
parties in accordance with its terms; (ii) the copy of the Lease heretofore
delivered to Mortgagee by Mortgagor is a true, correct and complete copy of the
entire Lease; (iii) neither the lessor nor the lessee has failed to comply with
any obligation imposed upon such party thereunder; (iv) neither the Lease nor
any Rents payable thereunder have heretofore been sold, assigned, transferred or
set over by any instrument now in force, nor, unless indicated to the contrary
herein, is the Lease other than a direct lease from Mortgagor to a lessee; (v)
Mortgagor is entitled to receive and enjoy all Rents payable under the Lease;
(vi) no installment of Rents has been paid more than thirty (30) days prior to
the due date for such installment; (vii) the lessee does not have and has not
claimed any defense, abatement, deduction, offset, claim or counterclaim
affecting the payment of Rents or compliance with the lessee's other obligations
thereunder, and all Rents provided for in the Lease are currently being
collected free thereof and without any violation of any law or other
governmental regulation or requirement; (viii) the Lease contains no option to
buy or right of first refusal with respect to an offer to sell the Mortgaged
Property or any part thereof, (ix) Mortgagor has the sole and unconditional
right and power to sell, assign, transfer and set over the Lease to Mortgagee
and to confer upon Mortgagee the rights, interests, power and authority herein
granted and conferred; and (x) the Lease is, by its express terms,
unconditionally subject and subordinate to the lien of this Mortgage.

         (b) Covenants by Mortgagor. Mortgagor covenants that, with respect to
each Lease, it will not, without Mortgagee's prior written consent: (i) accept
prepayment of any installment of Rents payable thereunder other than prepayment
of one month's Rents; (ii) amend or modify the Lease so as to reduce the
unexpired term thereof, decrease the amount of Rents payable thereunder or
otherwise diminish any obligation imposed therein upon the lessee; (iii) unless
the lessee has failed to comply with a material obligation imposed upon it in
the Lease, terminate, accept surrender of or permit

                                       17
<PAGE>

cancellation of the Lease if the unexpired term thereof is one year or longer;
(iv) modify, amend, extend, renew, terminate or accept the surrender of the
Lease if twenty-five percent (25%) or more of the rentable area of the Premises
is demised thereunder (any such Lease, a "Major Lease"); (v) pledge, mortgage,
assign or otherwise transfer the Lease or any interest of Mortgagor therein or
all or any portion of the Rents payable by the lessee thereunder as security for
any obligation; (vi) subordinate the Lease to any mortgage (other than this
Mortgage) or other encumbrance; (vii) sell, assign, transfer or set over the
Lease or any interest therein or Rents thereunder, except in connection with a
conveyance of the Premises and then only if expressly made subject to this
Mortgage and permitted by the express terms of the Mortgage;

         (viii) consent to, waive or permit to continue any violation of any
obligation imposed upon the lessee under the Lease; or (ix) consent to or permit
the modification, amendment, termination or surrender of any guaranty of the
Lease. In addition, Mortgagor covenants that it will not, without Mortgagee's
prior written consent, (A) enter into a Major Lease; execute, consent to or
permit an assignment of a Major Lease; or consent to or permit the subletting,
in whole or in part, of any space leased pursuant to a Major Lease (Mortgagee's
consent with respect to the transactions referred to in this clause (A) not to
be unreasonably withheld or delayed); or (B) enter into any Lease (x) except for
actual occupancy by the lessee of all of the space demised thereunder, (y)
unless the Lease, by its express terms, (1) is unconditionally subject and
subordinate to the lien of this Mortgage and provides that, in the event
Mortgagee or its designee or nominee succeeds to the interest of Mortgagor under
such Lease, the lessee thereunder shall, at the option of Mortgagee or such
designee or nominee, promptly attorn to Mortgagee or such successor in interest
and recognize such party as lessor under the Lease and confirm such attornment
and recognition in writing, and (2) requires the lessee upon demand to duly
execute, acknowledge and deliver to Mortgagee a certificate (an "Estoppel
Certificate") with respect to the status of such Lease and such matters relating
to the status of such Lease as any mortgagee may reasonably require, or (z)
pursuant to which the lessee or any other person or entity shall have an option,
right of first refusal or other right with respect to the acquisition by it of
the Premises or any part thereof.

         (c) Additional Covenants by Mortgagor. Mortgagor covenants that, with
respect to each Lease, it will: (i) fully, faithfully and punctually comply with
all of the obligations imposed upon the lessor thereunder; (ii) within five days
after request therefor by Mortgagee, (A) deliver to Mortgagee copies of executed
originals of all Leases and other instruments affecting the Mortgaged Property
and (B) request an Estoppel Certificate from any lessee designated by Mortgagee;
(iii) give prompt notice to Mortgagee of the failure by either the lessor or the
lessee to comply with any obligation imposed upon such party under the Lease,
with a copy of any notice of default or other communication with respect thereto
given by either the lessor or the lessee to the other; and (iv) enforce
compliance by the lessee with all obligations imposed upon it therein.

         To the extent that any part of the Premises is located in the State of
New York, reference is hereby made to Section 291-f of the Real Property Law of
the State of New York for the purpose of obtaining for Mortgagee the benefits of
said Section in connection with this Mortgage.

                                       18
<PAGE>

         (d) List of Lessee. Mortgagor shall furnish to Mortgagee, within
fifteen days after Mortgagee's request, a written statement containing the names
and social security or taxpayer identification numbers of all lessees of the
Mortgaged Property or any portion thereof, the terms of their respective Leases,
the space occupied and the rentals payable and security deposited thereunder.

         (e) Effect of Event of Default. Notwithstanding anything to the
contrary in this Mortgage, during the pendency of any uncured Event of Default,
Mortgagor shall not enter into any Lease, relocate any existing lessee, or make
or permit any modification, amendment, extension or assignment of an existing
Lease or the subletting, in whole or in part, of any space leased pursuant to an
existing, Lease without Mortgagee's prior written consent.

         1.16. Casualty to Mortgaged Property. In the event of any damage or
destruction affecting the Mortgaged Property (other than damage or destruction
that, in Mortgagee's good faith judgment, renders the Mortgaged Property
unsuitable for restoration), Mortgagor shall promptly commence and thereafter
diligently prosecute to completion, at the sole cost and expense of Mortgagor,
in accordance with all applicable Requirements and in a good and workmanlike
manner the replacement, repair or restoration of the Mortgaged Property as
nearly as practicable to the value, condition, character and general utility
thereof immediately prior to such damage or destruction, whether or not the
insurance proceeds paid in respect of such damage or destruction shall be made
available to Mortgagor or, if made available, shall be sufficient for such
purpose. The lien of this Mortgage shall continue to apply to the Mortgaged
Property as replaced, repaired or restored.

         1.17. Interest after Default. If an Event of Default shall occur under
this Mortgage, then all interest required to be paid by Mortgagor with respect
to the entire principal of the Note then outstanding and other components of the
indebtedness secured by the Loan Documents (including, without limitation,
expenses referred to in Article II of this Mortgage) shall be computed at the
Default Rate from and after the occurrence of the default that is the basis of
such Event of Default until the date that payment of such indebtedness in its
entirety is received by Mortgagee in accordance with the Loan Agreement.

         1.18. Due on Transfer. Mortgagor shall not without the prior written
consent of the "Required Lenders" (as such term is defined in the Loan
Agreement) (a) sell, assign, lease, convey, mortgage, pledge, hypothecate, make
the subject of any security interest, exchange, subdivide or permit to be
divided into multiple condominium units, or in any other manner whatever
transfer or encumber all or part of, or any interest in, or any of the Rents
derived from, or control of, the Mortgaged Property, or suffer or permit any of
the foregoing to occur, whether by operation of law or otherwise; or (b) agree
in writing (whether on a conditional or unconditional basis) to do any of the
foregoing; or (c) effectuate or permit a reduction in the ownership interests of
Acadia Realty Trust in Mortgagor below 51 %; or (d) effectuate or permit a
closing of any public or private offering of ownership interests in Mortgagor;
or (e) effectuate or permit a transfer of the controlling interest in Mortgagor,
other than to an entity owned and controlled by Acadia Realty Trust. Other than
as set forth in the immediately preceding sentence, "transfer of the controlling
interest in Mortgagor" includes: (i) the sale,

                                       19
<PAGE>

assignment, issuance, redemption, diminution or pledge, whether through a single
transaction or a series of transactions, of the direct or indirect controlling
ownership interest of Mortgagor; (ii) the modification of any organizational
documents of Mortgagor or of any entity that directly or indirectly controls
Mortgagor if the effect of such modification is to transfer ownership or control
of such entity; and (iii) the dissolution or termination, whether by operation
of law or otherwise, of Mortgagor or of any entity that directly or indirectly
controls Mortgagor. Nothing in this Section 1.18 shall, however, prohibit (y)
Leases that comply with this Mortgage and all other applicable Loan Documents,
or (z) if Mortgagor is a cooperative apartment corporation, the transfer and
mortgaging from time to time of Lease(s) to individual apartment units and the
appurtenant shares.

         1.19. Costs of Litigation and Certain Proceedings. If any action or
proceeding of any kind (including, without limitation, any bankruptcy,
insolvency, arrangement, reorganization or other debtor relief proceeding or any
action arising under or in respect of any Lease) is commenced, or if there
occurs any other event or is created any circumstance that Mortgagee determines
might affect Mortgagor's or Mortgagee's interest in the Mortgaged Property, or
the validity, enforceability or priority of the lien of this Mortgage, or
Mortgagee's rights or remedies under any of the Loan Documents, then Mortgagee
may, without notice (Mortgagor expressly waiving any such notice) and at
Mortgagee's option, make such appearances, disburse such sums and take any such
other actions (including, without limitation, the commencement and prosecution
of any action against Mortgagor to enforce the terms of any Loan Document) as
Mortgagee deems necessary or desirable. If Mortgagee takes any action referred
to in the preceding sentence, then Mortgagor shall, upon demand by Mortgagee,
pay all reasonable fees and costs incurred by Mortgagee in connection therewith
(including, without limitation, attorneys' fees and expenses). Mortgagee's right
to receive any payment provided for hereinabove shall be deemed to have accrued
upon the commencement of the applicable action or proceeding and shall be
enforceable by Mortgagee whether or not same is prosecuted to judgment. At
Mortgagee's direction, any payment(s) that Mortgagor is obligated to make
pursuant to this Section 1.19 shall be made to third parties rather than to
Mortgagee.

         1.20. Late Charge. If all or any portion of any payment required to be
made to Mortgagee (whether pursuant to the Note, the Loan Agreement or any other
Loan Document) is not received on or before the tenth (10th) day after the date
such payment is due (without reference to any grace period provided for in the
Loan Documents), a late charge of four percent (4%) of the amount so overdue
shall immediately be due to Mortgagee in accordance with Section 2.11 of the
Loan Agreement. At the option of Mortgagee, the charges specified in this
section may be deducted from the funds held by Mortgagee pursuant to Section
1.11.

         1.21. Trust Fund. If the Mortgaged Property is situated in New York
State, this Mortgage is made subject to the trust fund provisions of Section 13
of the New York Lien Law, and Mortgagor covenants that it shall receive all
moneys and advances secured hereby and shall hold the right to receive such
advances as a trust fund to be applied first for the purpose of paying costs of
improvement before using any part of the same for any other purpose.

                                       20
<PAGE>
         1.22. Charges for Tax Searches, Etc. Mortgagor shall pay the reasonable
fees and costs (including attorneys' fees and expenses) incurred by Mortgagee in
obtaining tax searches and tax bills and of processing, or otherwise dealing
with, ownership transfers, insurance payments, releases, modifications,
prepayments, extensions, consents, assignments, reduction certificates,
satisfactions and other matters. At the option of Mortgagee, charges for these
items may be deducted from the funds held by Mortgagee pursuant to Section
1.11.

         1.23. Prepayment. The Note may not be prepaid in whole or in part
except in accordance with the provisions of the Loan Agreement.

         1.24. Restrictions Affecting Mortgaged Property. Mortgagor shall not
(a) initiate, join in, execute or consent to any change in any covenant,
condition, restriction, declaration, zoning ordinance, or other public or
private restriction limiting, defining or otherwise controlling construction on,
or use(s) of, all or any part of the Mortgaged Property (collectively,
"Restrictions"), (b) suffer or permit any building or other improvement
situated on land that is not part of the Mortgaged Property to rely on the
Premises in order to comply with any Requirement or (c) impair the integrity of
the Mortgaged Property as a zoning lot separate and apart from all other
premises. Mortgagor shall at all times strictly comply with all Restrictions.

         1.25. Hazardous Substances. (a) Compliance With Environmental Laws.
Mortgagor shall at all times promptly comply, and shall cause all lessees and
other persons and entities which occupy or enter upon the Mortgaged Property at
all times promptly to comply, with all Environmental Laws insofar as same apply
to the Mortgaged Property. Without limiting the generality of the foregoing, (i)
Mortgagor shall cause all Environmental Authorizations to be maintained in full
force and effect, (ii) Mortgagor shall not cause, suffer or permit (or suffer or
permit any lessee or any other person or entity to cause, suffer or permit) any
Hazardous Substance to be used, received, handled, generated, manufactured,
produced, processed, treated, stored, released, placed, spilled, discharged,
disposed of or dispersed at, on under or about the Mortgaged Property except
pursuant to and in accordance with Environmental Laws, and (iii) if, other than
in accordance with the provisions of the immediately preceding clause (ii), any
Hazardous Substance(s) shall at any time be present at, on or under the
Mortgaged Property, Mortgagor, whether or not so directed by Mortgagee, shall
undertake the appropriate Remedial Work (as defined below) or take such other
action as shall be necessary in order to cause said Hazardous Substance(s)
promptly to be removed therefrom.

         (b) If any lien shall be filed against, or imposed upon, the Mortgaged
Property with respect to non-compliance with any Environmental Law, Mortgagor
promptly shall (i) give Mortgagee notice thereof and (ii) cause such lien to be
discharged or bonded or otherwise secured to Mortgagee's satisfaction.

         (c) Notice to Mortgagee. If Mortgagor shall (i) obtain knowledge of any
fact or circumstance which might render inaccurate any representation or
warranty contained in Section 3.14 below, Mortgagor shall promptly give
Mortgagee notice thereof, or (ii) receive any summons, citation, directive,
order, Notice or other communication from any Governmental Authority relating to
the application of any

                                       21
<PAGE>
Environmental Law to the Mortgaged Property, Mortgagor shall promptly send a
copy of same to Mortgagee. In addition, if any Environmental Law requires that
an Environmental Condition be reported (as, for example, when a Release of
Hazardous Substances occurs), Mortgagor shall promptly make such report in
accordance with such Environmental Law and simultaneously provide Mortgagee with
all information contained therein, "Release" shall have the definition set forth
in Section 101(22) of the Environmental Response, Compensation and Liability
Act, 42 U.S.C. ss. 6902 et seq.

         (d) Representations. Etc. Mortgagor shall not take or omit to take (or
suffer or permit any lessee or other person or entity occupying the Mortgaged
Property to take or omit to take) any action which, if taken or omitted to be
taken, would render inaccurate any representation or warranty contained in
Section 3.14.

         (e) Remedial Work. If Mortgagee, acting in its sole and absolute
discretion,

                  (i) determines that any investigation, site monitoring,
         environmental audit and risk assessment, containment, clean-up,
         encapsulation, removal, restoration or other remedial work of any kind
         (any of the foregoing, "Remedial Work") is necessary or desirable in
         connection with (A) the known or suspected presence at, on, under or
         about the Mortgaged Property of any Hazardous Substance(s) or (B) the
         requirements of any Environmental Law or the suspected violation of any
         Environmental Law, or

                  (ii) determines that the condition of the Mortgaged Property
         or the validity, priority or enforceability of the lien of this
         Mortgage has been or may be impaired or in any way adversely affected
         by reason of (A) any failure to comply with any Environmental Law as
         the same pertains to the Mortgaged Property, (B) any other failure by
         Mortgagor fully to comply with any obligation imposed upon Mortgagor in
         this Section 1.25, or (C) the inaccuracy of any representation or
         warranty contained in Section 3.14, then, in any such event, Mortgagor
         shall, promptly after written demand by Mortgagee for performance
         thereof, either (I) commence to perform and thereafter diligently
         prosecute to completion the Remedial Work, or (II) take such other
         action as Mortgagee may specify. All Remedial Work shall be performed
         by contractors employed by Mortgagor and in accordance with plans that
         first shall have been approved by an independent consultant employed by
         Mortgagee but paid by Mortgagor.

For the purpose of making a determination pursuant to this Section 1.25(e), (i)
Mortgagor shall provide, upon twenty-four (24) hours advance notice, access to
Mortgagee and its agents and employees to the Mortgaged Property and all
applicable books and records (including, without limitation, those which pertain
to Authorizations), and (ii) Mortgagee shall be entitled, from time to time, in
addition to all of Mortgagee's other rights and remedies under this Mortgage, to
cause an environmental audit and risk assessment of the Mortgaged Property to be
conducted by an independent engineering firm or other environmental audit
manager designated by Mortgagee. In the event Mortgagor fails timely to commence
or diligently to prosecute to completion any Remedial Work or other action
required to be undertaken pursuant to this Section 1.25, Mortgagee may, but
shall not be required to (and without any liability or obligation by Mortgagee
to Mortgagor

                                       22
<PAGE>

with respect thereto), arrange for same to be performed. All costs and expenses
incurred pursuant to, or with respect to the subject matter of, this Section
1.25 shall be borne by Mortgagor, and all moneys paid by Mortgagee and all costs
and expenses incurred by Mortgagee in connection with this Section 1.25,
together with interest thereon computed at the Default Rate, shall be repaid to
Mortgagee in accordance with the provisions of Section 1. 10 above.

         Indemnification. Mortgagor shall defend and indemnify the Indemnified
Parties against, and shall save the Indemnified Parties harmless from, and shall
reimburse the Indemnified Parties with respect to, any and all Liabilities and
Expenses (as hereinafter defined) incurred by, imposed upon or asserted against
the Indemnified Parties or any one or more of them by reason of, or in
connection with:

                  (i) the presence, existence, use, handling, generation,
         manufacture, production, processing, treatment, storage, release,
         placement, spill, discharge, disposal or dispersal of any Hazardous
         Substance(s) on, at or under the Mortgaged Property, or any threatened
         occurrence of any of the foregoing, or any Remedial Work or other
         action taken by Mortgagee or any of the Indemnified Parties with
         respect to any of the foregoing pursuant to this Section 1.25; or

                  (ii) the inaccuracy of any representation or warranty made by
         Mortgagor in Section 3.14 below; or

                  (iii) the failure of Mortgagor or anyone else to comply with
         any Environmental Law(s) as same pertain to the Mortgaged Property or
         any provision of the Loan Documents that pertains to the subject matter
         of this Section 1.25.

For the purposes of this Section 1.25, "Liabilities and Expenses" shall mean (i)
all claims, demands, actions, causes of action, injuries, orders, losses,
liabilities (statutory or otherwise), obligations, damages (including, without
limitation, consequential damages), fines, penalties, costs and expenses in any
manner arising out of or relating to the subject matter of this Section 1.25
(including, without limitation, any of the foregoing relating to loss of life,
injury to persons, property or business, or damage to natural resources), and
(ii) any and all moneys payable to Mortgagee pursuant to this Section 1.25; as
used herein, "costs and expenses" shall, without limitation, include all fees
charged by and expenses of attorneys, accountants, engineers, contractors,
environmental specialists and other professional consultants and advisors with
respect to the subject matter of this Section 1.25 and the enforcement or
attempted enforcement of Mortgagee's rights under the Loan Documents with
respect to said subject matter (whether incurred in connection with litigation
or bankruptcy proceedings or negotiations with Mortgagor, lienors or other
parties in interest (such as receivers and trustees) or otherwise). Liabilities
and Expenses shall not be limited to the amount of the Loan. All amounts payable
to Mortgagee under this Section 1.25(f) shall be payable upon demand by
Mortgagee, together with interest at the Default Rate from the date of such
demand until the date of receipt by Mortgagee of full payment, and shall be
secured by this Mortgage. Mortgagor's obligations under this Section 1.25(f)
shall survive payment in full of the Note and the other Loan Documents and any
discharge, release or satisfaction of this Mortgage, any complete or partial

                                       23
<PAGE>

foreclosure of this Mortgage and/or the delivery of one or more deeds in lieu of
any such foreclosure.

         (g) Release. Mortgagor releases and discharges the Indemnified Parties
from, and relinquishes and waives, any and all claims, actions, causes of
action, demands and suits which Mortgagor now or hereafter may or shall have
against the Indemnified Parties or any one or more of them with respect to the
subject matter of this Section 1.25.

         1.26. Further Assurances. Mortgagor shall, at Mortgagor's sole cost and
expense, promptly deliver to Mortgagee all Documents of Further Assurance and
undertake such further acts as Mortgagee shall from time to time request in
order to (a) confirm the lien of this Mortgage and the mortgaging to Mortgagee
of the Mortgaged Property (including, without limitation, all betterments,
renewals, extensions and replacements of, all substitutions for, and all
additions, accessions and appurtenances to any portion of the Mortgaged
Property), (b) confirm the security interests herein granted to Mortgagee in
portions of the Mortgaged Property and (c) satisfy any Requirement that
restricts, establishes conditions to, burdens, limits or otherwise affects
Mortgagee's exercise of Mortgagee's rights and remedies under, or with respect
to the subject matter of, this Mortgage. "Documents of Further Assurance" shall
include, without limitation, deeds, mortgages, security agreements, UCC-1s, UCC
continuation statements, assignments, title insurance updates, affidavits,
certificates, opinions of counsel, estoppel letters, insurance certificates and
consent letters. If Mortgagee certifies to Mortgagor that the Note has been
misplaced, lost or mutilated and that Mortgagee has not endorsed, assigned or
otherwise transferred the Note, Mortgagor shall deliver to Mortgagee an original
duplicate note in the same form as the Note, Mortgagee hereby agreeing to
indemnify Mortgagor against any loss or expense incurred by Mortgagor as a
consequence of Mortgagor's having delivered such duplicate note. All
documentation to be delivered by Mortgagor pursuant to this Section 1.26 shall
be in form and substance reasonably satisfactory to Mortgagee.

         1.27. Notice to Mortgage. Mortgagor shall give notice to Mortgagee
promptly upon the occurrence of (a) any Event of Default or any fact, event or
circumstance that after notice or passage of time or both would constitute an
Event of Default; (b) any litigation, proceeding or investigation commenced by,
or that involves, any Governmental Authority that might result in the impairment
of Mortgagee's security for the Loan or any other fact, event or circumstance
that might result in the impairment of such security; and (c) any material
adverse change in the operations or financial or other condition of the
Mortgaged Property or any portion thereof.

         1.28. Set-O Mortgagor, to further secure Mortgagor's full, faithful and
punctual compliance with the obligations imposed upon it in the Loan Documents,
hereby (i) pledges and grants to Mortgagee, and grants to Mortgagee a security
interest in and to, any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by Mortgagee to or for the credit or account of Mortgagor (collectively,
"Deposits") and (ii) irrevocably authorizes and directs Mortgagee at any time
and from time to time upon the occurrence of an Event of Default, without notice
to Mortgagor (any such notice being expressly waived by Mortgagor) and to the
fullest extent permitted by law, to set off and apply any Deposits

                                       24
<PAGE>

against any and all obligations of Mortgagor now or hereafter existing under the
Loan Documents, irrespective of whether or not Mortgagee shall have made any
demand under the Loan Documents and although such obligations may be contingent
or unmatured. From and after the date of the occurrence of any Event of Default,
Mortgagee shall have dominion and control over such Deposits and shall have the
sole ability to make withdrawals with respect to such Deposits. The rights of
Mortgagee under this section are in addition to such other rights and remedies
(including, without limitation, other ID rights of set-off) as may be available
to Mortgagee under the Loan Documents, at law or in equity.

         1.29. Obligations Secured. Whenever in this Mortgage or any other
I Loan Document it is stated that Mortgagor shall be obligated to pay or repay
any moneys to Mortgagee or to any third party or to reimburse Mortgagee in
respect of costs and expenses incurred by Mortgagee or anyone employed by,
or acting on behalf of, Mortgagee, then any such payment, repayment or
reimbursement obligation shall be deemed to be part of the indebtedness that is
secured by this Mortgage.

         1.30. Year 2000 Capability. Mortgagor represents, warrants and
covenants that it (a) is aware of the risks associated with the date change from
December 31, 1999 to January 1, 2000; (b) has assessed the related processing
capabilities of its computer and other systems (the "Systems", as defined
below); (c) has taken, and shall continue to take, if necessary, appropriate
steps to prepare its Systems for Year 2000 capability, i.e., to operate in a
manner such that on and after January 1, 2000 the Systems will correctly
interpret and manipulate all dates, data, information and records, so as to
avoid errors in processing or failures to operate properly because of their
inability to recognize accurately the Year 2000 or subsequent dates; and (d) is
taking or has taken, and shall continue to take, if necessary, appropriate steps
to verify that the Systems of its material customers, clients, suppliers and
counterparties are able to meet the requirements of the Year 2000 date change.
Mortgagor agrees that, at Mortgagee's request, it will provide Mortgagee with
written assurance (with appropriate documentation) of its Year 2000-related
Systems capability. The term "Systems" as used herein shall mean all (i)
computer hardware, computer software, and data processing systems; (ii) HVAC and
other building or facilities systems and equipment containing embedded
microchips; and (iii) other information technology-based systems, that, in the
case of each of (i), (ii) and (iii) are material to the business operations or
financial condition of Mortgagor.

                                   ARTICLE II

                         Events of Default and Remedies

         2.1. Definition of Event of Default. For all purposes of the Loan
Documents, the occurrence of any one or more of the following shall constitute
an Event of Default:

                  (a) Nonpayment of Note. If Mortgagor fails to make any payment
         required under the Note or the Loan Agreement when and as the same
         shall become due and payable, and such failure continues for ten (10)
         days, provided,

                                       25
<PAGE>

however, that said ten (10)-day grace period shall not apply to the payment of
any moneys required to be paid by Mortgagor upon the Maturity Date or Extended
Maturity Date, if applicable (or sooner, if applicable, by reason of
acceleration); or

         (b) Liens. If any proceeding is commenced to foreclose a lien upon the
Mortgaged Property or any portion thereof or if any other action is taken to
enforce any such lien and, within twenty days (20) after the commencement of
such proceeding or taking of such action, said lien is not discharged of record
by payment, deposit, bond, order of a court of competent jurisdiction or
otherwise; or

         (c) Action by Governmental Authority. If any Governmental Authority
imposes a fine or penalty with respect to Mortgagor's failure to pay an
Imposition in a timely manner or if, following Mortgagor's election to contest
the amount or validity of any Imposition, Mortgagor fails to duly perform or
comply with any provision set forth in Section 1.7(c); or

         (d) Failure to Comply with Section 1.9. If Mortgagor fails fully,
faithfully or punctually to perform or comply with any obligation on the part of
Mortgagor to be performed or complied with pursuant to Section 1.9; or

         (e) Failure to Give Notice. If Mortgagor fails to give Mortgagee, when
and as required, any notice required to be given to Mortgagee by Mortgagor
pursuant to this Mortgage or within ten (10) days of Mortgagor's becoming aware
of the need to provide such notice if no grace period for the giving of such
notice is otherwise provided for in this Mortgage; or

         (f) Nonpayment of Certain Charges. If Mortgagor fails to make any
payment required by Section 1.4 (other than a payment to which paragraph (a)
applies), 1.7(a) or 1.11, and such failure continues for twenty (20) days; or

         (g) Default in Performance of Certain Obligations. If Mortgagor fails
fully, faithfully or punctually to perform or comply with any obligation on the
part of Mortgagor to be performed or complied with pursuant to Section 1.2, 1.3,
1.8, 1.10, 1.12, 1.13, 1.20 or 1.22, and such failure continues for thirty (30)
days after Mortgagee has given Mortgagor written notice thereof; or

         (h) Other Failure to Perform. If Mortgagor fails fully, faithfully or
punctually perform or comply with any other obligation on the part of Mortgagor
to be performed or complied with pursuant to any Loan Document including,
without limitation, the Note and the Loan Agreement (except as described in the
preceding paragraphs (a) through (g)) and such failure continues for the lesser
of (i) thirty (30) days after Mortgagee has given Mortgagor written notice
thereof (unless such default cannot with due diligence be cured within thirty
(30) days but can be cured within a reasonable period, in which case no Event of
Default shall be deemed to exist so long as Mortgagor shall have commenced to
cure the default within thirty (30) days after receipt of notice, and thereafter
diligently and continuously prosecutes such cure to completion) or (ii) such
period of time, if any, as is set forth with respect to such failure in any
other Loan Document; or

                                       26
<PAGE>

         (i) Misrepresentation. Etc. If any warranty, representation or other
statement made (i) by or on behalf of Mortgagor or by any Principal of Mortgagor
in, pursuant to, or in connection with any Loan Document including, without
limitation, the Note and the Loan Agreement, or in connection with any other
loan made by Mortgagee to Mortgagor or any Principal of Mortgagor or any
borrower of which a Principal of Mortgagor is a principal, or (ill) by or on
behalf of any Guarantor in or pursuant to any guaranty delivered to Mortgagee in
connection with the Loan is materially incorrect; or

         Nonpayment of Debts. If Mortgagor shall be generally not paying
Mortgagor's debts as they become due; or

         (k) Voluntary Adverse Financial Events. If Mortgagor (i) shall make an
assignment for the benefit of creditors, or (ii) shall institute any proceeding
seeking (A) relief on its behalf as debtor, or (B) adjudication of Mortgagor as
a bankrupt or insolvent, or (C) reorganization, arrangement, adjustment, winding
up, liquidation, dissolution or composition of Mortgagor or Mortgagor's debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or (D) appointment of a receiver, trustee, conservator, custodian or
other similar official for Mortgagor or the Mortgaged Property or any part
thereof or of any other substantial part of Mortgagor's property, or (iii) shall
consent by answer or otherwise to the institution of any such proceeding against
Mortgagor, or (iv) shall (if a corporation or other entity having directors or
shareholders) take by itself, or by its directors or shareholders, any action
for the purpose of any of the foregoing; or

         (l) Involuntary Adverse Financial Events. If any proceeding is
instituted against Mortgagor seeking (i) to have an order for relief entered
against Mortgagor as debtor or to adjudicate Mortgagor a bankrupt or insolvent,
or (ii) reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution or composition of Mortgagor or Mortgagor's debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
(iii) appointment of a receiver, trustee, conservator, custodian or other
similar official for Mortgagor or the Mortgaged Property or any portion thereof
or any other substantial part of Mortgagor's property, that either (A) results,
without Mortgagor's consent or acquiescence, in any such entry of an order for
relief, adjudication of bankruptcy or insolvency or issuance or entry of any
other order having a similar effect or (B) remains undismissed for ninety (90)
days; or

         (m) Appointment of Trustee. Etc, If a trustee, receiver, conservator,
custodian or other similar official is appointed, without the consent or
acquiescence of Mortgagor, for Mortgagor or the Mortgaged Property or any
portion thereof or any other substantial part of Mortgagor's property, which
appointment is not vacated within ninety (90) days; or

         (n) Changes in Mortgage Taxation. If subsequent to the date of this
Mortgage the law of the state in which the Premises are situated is changed to
Mortgagee's detriment by statutory enactment, judicial decision, regulation or
otherwise, so as (i) to deduct from the value of land for the purpose of
taxation

                                       27
<PAGE>

(for state, county, municipal or other purpose) any lien or charge thereon, or
(ii) to chancre the taxation of deeds of trust, mortgages or debts secured by
land or the manner of collecting any such taxation; or

         (o) Final Judgment. If a final judgment is entered against Mortgagor,
and, within sixty days after its entry, such judgment has not been discharged or
execution thereof stayed pending appeal, or if, within sixty days after the
expiration of any such stay, such judgment has not been discharged; or

         (p) Certain Taxes. If it is or becomes illegal for Mortgagor to pay any
tax required to be paid by Mortgagor pursuant to Section 1.07 or if Mortgagor's
payment of such tax would violate any Requirement; or

         (q) Prohibited Transfer. If a transaction prohibited by Section 1.18
occurs without the prior written consent of the "Required Lenders"; or

         (r) Other Instruments. If Mortgagor fails to perform, comply with or
discharge any agreement, obligation or undertaking created or agreed to by
Mortgagor in any Loan Document and any applicable cure periods expire; if any
Principal of Mortgagor or Guarantor fails to perform, comply with or discharge
any agreement, obligation or undertaking created or agreed to by such Principal
of Mortgagor or Guarantor in any Loan Document and any applicable cure periods
expire; or if any event or circumstance described in clause 1.7(c)(iii) occurs;
or

         (s) Leases. If Mortgagor leases all or any part of the Mortgaged
Property in violation of Section 1.15 of this Mortgage or effectuates any
change with respect to a Lease in violation of said section; or

         (t) Management of Mortgaged Property. If the Mortgaged Property 0
ceases to be managed by Mortgagor or such other person or entity as may be
approved by Mortgagee in writing; or

         (u) Guarantor. If any act, circumstance or event described in
paragraphs (k) through (n) or (p) is taken by or occurs with respect to any
Guarantor or the property of any such person or entity (each of the foregoing,
an "Insolvency Event"); or

         (v) Other Mortgage. If any fact or circumstance occurs that would
permit the holder of any other mortgage encumbering the Mortgaged Property or
any part thereof to foreclose or exercise any other remedy(ies) available under
such other mortgage. If such other mortgage provides for a grace period and
opportunity to cure, an Event of Default shall not be deemed to have occurred
under this paragraph; or

         (w) unless and until such grace period has expired. Concurrently with
the expiration of such grace period, an Event of Default shall be deemed to have
occurred under this Mortgage, and Mortgagor shall have no right under this
Mortgage to receive notice of or any opportunity to cure such Event of Default.
Nothing in this paragraph (w) shall limit in any way Mortgagor's obligations
under this Mortgage or Mortgagee's rights and remedies under this Mortgage.

                                       28
<PAGE>

         2.2. Effect of Event of Default. Upon and after the occurrence of an
Event of Default, Mortgagee shall be entitled to all of the rights and remedies
set forth below. In those instances in which Mortgagee is entitled to take
action with respect to the subject matter of this Article II, such action may be
taken by Mortgagee personally or on Mortgagor's behalf by its agents or
attorneys and, in any such instance, with or without entry upon the Mortgaged
Property. All expenses incurred and advances made by Mortgagee or by any such
agents or attorneys in taking any such action shall be deemed to be for the
account of Mortgagor and shall be repaid to Mortgagee together with interest
thereon computed at the Default Rate from the date each such expense is incurred
or advance is made until the date Mortgagee has received repayment in its
entirety thereof.

         (a) Automatic Acceleration of Note. If the Event of Default is one
described in paragraphs (1), (in) or (n) of Section 2.1, then the entire
principal of the Note then outstanding, all accrued and unpaid interest thereon,
Prepayment Charge and all other indebtedness secured by this Mortgage shall
automatically become immediately due and payable.

         (b) Optional Acceleration of Note. If the Event of Default is one
described in any paragraph of Section 2.1 other than those paragraphs of Section
2.1 referred to in the preceding paragraph (a), then Mortgagee, by written
notice to Mortgagor, may declare the entire principal of the Note then
outstanding, all accrued and unpaid interest thereon, Prepayment Charge and all
other indebtedness secured hereby to be due and payable immediately. Upon any
such declaration the same shall become immediately due and payable,
notwithstanding anything to the contrary in any Loan Document.

         (c) Entry upon Mortgaged Property. Without notice to Mortgagor or
anyone else, Mortgagee may (i) enter into and upon the Mortgaged Property and
take possession thereof by force, summary proceeding, ejectment or otherwise and
exclude therefrom Mortgagor, Mortgagor's employees and agents and all other
persons, (ii) hold, use, operate, manage, maintain and control the Mortgaged
Property and conduct the business thereof on such terms as Mortgagee shall deem
proper, (iii) collect and receive all Rents including, without limitation, those
past due (instituting, at Mortgagee's election, proceedings in furtherance of
such collection), (iv) apply the Rents as hereinafter provided, (v) amend,
modify and terminate then existing Leases of the Mortgaged Property or any
portion thereof and, in the name of Mortgagor, enter into Leases of all or any
portion of the Mortgaged Property, (vi) complete the construction of the
Improvements, and in the course of such completion make such changes in the
contemplated Improvements as Mortgagee may deem desirable, (vii) make all
necessary or proper repairs, renewals and replacements and such alterations,
additions, improvements and betterments as Mortgagee may deem advisable, and
(viii) generally do everything as fully and effectually as if Mortgagee were the
absolute owner of the Mortgaged Property. Mortgagee shall apply the Rents (A)
first, to paying the costs and expenses incurred by Mortgagee in taking actions
pursuant to this paragraph (including, without limitation, cost and expenses
incurred in furtherance of the rights, remedies and powers specifically set
forth above and those incurred in order to insure the Mortgaged Property, pay
Impositions and pay reasonable compensation for the services of

                                       29
<PAGE>

Mortgagee and its employees, attorneys and agents), and (B) second, to payment
of the principal of the Note then outstanding, all accrued but unpaid interest
thereon, at the rate of interest provided therein and in the Loan Agreement,
including any applicable Prepayment Charge, and all other indebtedness secured
by this Mortgage or by any other Loan Document. Mortgagor hereby consents to the
exercise by Mortgagee of the rights, remedies and powers conferred upon
Mortgagee in this paragraph, provided, however, that (x) Mortgagee shall under
no circumstances have any obligation to undertake any act or do anything
pursuant to this paragraph and (y) no entry in or upon the Mortgaged Property or
taking possession thereof or any other action or omission of Mortgagee hereunder
shall make Mortgagee a "mortgagee in possession" (unless Mortgagee expressly
elects such status in writing) or create any liability on the part of Mortgagee
to Mortgagor or to any lessee or other party holding under or claiming through
Mortgagor (whether for trespass, eviction, inconvenience, annoyance,
disturbance, loss of business or otherwise) except if attributable to the
willful misconduct or bad faith of Mortgagee. In furtherance of all of the
foregoing, Mortgagor hereby irrevocably and unconditionally appoints Mortgagee
as Mortgagor's true and lawful attorney-in-fact, coupled with an interest, in
Mortgagor's name and stead, with full power of substitution to act pursuant to
the provisions of this paragraph.

         (d) Sale of Mortgaged Property. Mortgagee may sell the Mortgaged
Property and all estate, right, title and interest, claim and demand therein,
and right of redemption thereof, at one or more sales as an entity or in
parcels, in such manner, at such time and place, for such price and upon such
other terms and after such notice thereof as Mortgagee may in its sole
discretion determine, or as may be required by law. Mortgagee may from time to
time adjourn any such sale by announcement at the time and place appointed for
such sale, as same may previously have been adjourned.

         (e) Foreclosure. Mortgagee may institute proceedings for the complete
or partial foreclosure of this Mortgage.

         (f) Rights as Secured Party. Mortgagee may exercise such rights and
remedies, whether at law, in equity or by statute (including, without
limitation, the Uniform Commercial Code), as are available to Mortgagee as a
secured party under this Mortgage with respect to the Chattels, including,
without limitation, the right to take possession of the Chattels, to maintain
and preserve the same and to cause any of the Chattels to be sold at any one or
more public or private sales as permitted by applicable law. Any person,
including both Mortgagee and Mortgagor, shall be eligible to purchase any
portion or all of the Chattels thus offered for sale. Any and all expenses
incurred by Mortgagee in connection with taking possession of the Chattels and
maintaining and preserving the same and otherwise preparing for sale, as well as
in the conduct of the sale, such as the fees and expenses of Mortgagee's
attorneys, shall be deemed to be for the account of Mortgagor and shall be
repaid to Mortgagee. Mortgagor, upon Mortgagee's demand, shall assemble the
Chattels and make them available to Mortgagee at such place(s) as Mortgagee may
designate. Mortgagee shall give Mortgagor at least five days' prior written
notice of the time and place of any public sale or other disposition of the
Chattels or of the time at or after which Mortgagee intends to make any private
sale or other disposition (any such notice for all purposes to be deemed
reasonable notice to Mortgagor).

                                       30
<PAGE>

         (g) Other Remedies. Supplementing the foregoing provisions of this
Section 2.2, Mortgagee may take such other steps as Mortgagee may elect to
protect and enforce its rights, whether by action, suit or proceeding in equity
or at law for the specific performance of any covenant, condition or agreement
set forth in the Note, this Mortgage or in any other Loan Document, or in aid of
the execution of any power herein granted to Mortgagee, or for any foreclosure
hereunder, or for the enforcement of any other appropriate legal or equitable
right or remedy.

         2.3. Foreclosure Sale Implementation. (a) Deeds, Etc. To effectuate any
sale(s) made under or by virtue of this Article 11, whether made under the power
of sale herein granted or under or by virtue of judicial proceedings or of a
judgment or decree of foreclosure and sale (any such sale, an "Article II
Sale"), Mortgagor, Mortgagee, or an officer of any court empowered to do so
shall execute and deliver (i) to the accepted purchaser or purchasers assigning
and transferring all estate, right, title, interest, claim and demand in and to
the property and rights sold and (ii) to the appropriate Governmental Authority
any affidavit(s) or other instrument(s) required pursuant to any Requirement(s).
In furtherance of such purpose, Mortgagor hereby irrevocably and unconditionally
appoints Mortgagee as Mortgagor's true and lawful attorney-in-fact, coupled with
an interest, in Mortgagor's name and stead, with full power of substitution, to
execute and deliver such instrument(s). Mortgagor hereby ratifies and confirms
all that Mortgagee, in its capacity as said attorney-in-fact, or such
substitute(s) shall lawfully do pursuant to this Section 2.3(a). Notwithstanding
the foregoing Mortgagor, if so requested by Mortgagee or any purchaser, shall
ratify and confirm any such sale or sales by executing and delivering to
Mortgagee or to such purchaser all such instruments as may be designated by the
requesting party. Any such sale or sales shall operate to divest all the estate,
right, title, interest, claim and demand whatsoever, whether at law or in
equity, of Mortgagor in and to the property and rights so sold, and shall be a
perpetual bar, both at law and in equity, against Mortgagor and against any and
all persons claiming or who may claim by, from, through or under Mortgagor.

         (b) Acceleration upon Sale. In the event of any Article II Sale
(whether made under the power of sale herein granted or under or by virtue of
judicial proceedings or of a judgment or decree of foreclosure and sale), then,
notwithstanding anything to the contrary set forth in any Loan Document, the
entire principal of the Note than outstanding, all accrued and unpaid interest
thereon, at the rate of interest provided therein and in the Loan Agreement,
including any applicable Prepayment Charge, and all other indebtedness secured
by this Mortgage shall immediately become due and payable.

         (c) Application of Proceeds. The proceeds of any Article II Sale,
together with any other sums that Mortgagee may then hold under any provision of
this Mortgage, shall be applied in the following order of priority:

                  (i) Sale Costs. Etc, To the payment of the costs and expenses
         incurred in connection with such sale, including, without limitation,
         the costs and expenses (A) incurred by Mortgagee prior thereto in
         taking possession of, and maintaining and preserving, the Mortgaged
         Property or any portion thereof and paying Impositions with respect
         thereto (other than Impositions subject to which the Mortgaged Property
         might have been sold), (B) of any judicial proceedings wherein or
         pursuant to which such sale might have been made, (C) of any

                                       31
<PAGE>

         receiver(s) appointed with respect to the Mortgaged Property or any
         portion thereof, (D) incurred in order to comply with Requirements
         applicable to such sale and (E) of paying reasonable compensation to
         Mortgagee, its employees, agents and attorneys.

                  (ii) Principal. Prepayment Charge and Interest. To the payment
         of the entire principal of the Note then outstanding, all accrued and
         unpaid interest thereon (whether accruing prior or subsequent to the
         date of default) at the rate of interest provided therein and in the
         Loan Agreement, including any applicable Prepayment Charge.

                  (iii) Other Sums Due. To the payment of any other sums
         required to be paid by Mortgagor pursuant to any provision of any Loan
         Document.

                  (iv) Application of Surplus. To the payment of the surplus, if
         any, to whosoever may be lawfully entitled to receive the same.

         (d) Bids by Mortgage. At any Article II Sale, Mortgagee may bid for
and acquire the Mortgaged Property or any part thereof and in lieu of paying
cash therefor may make settlement for the purchase price by crediting upon the
indebtedness of Mortgagor secured by this Mortgage the net sales price after
deducting therefrom the costs and expenses of the sale and all other costs or
expenses attributable to Mortgagor's default under this Mortgage and Mortgagee's
exercise of its rights, powers and remedies under this Mortgage.

         2.4. Collection of Debt. (a) Payments Due upon Acceleration. In the
event that the indebtedness secured by this Mortgage shall become due and
payable in accordance with the provisions of this Mortgage and Mortgagor shall
fail forthwith to pay such amounts to Mortgagee, Mortgagee shall be entitled and
empowered to institute actions or proceedings at law or in equity for the
collection of the sums so due and unpaid, and may prosecute any such actions or
proceedings to judgment or final decree, and may enforce any such judgment or
final decree against Mortgagor and collect, out of the Mortgaged Property and
other property of Mortgagor wherever situated, in any manner provided by law,
moneys adjudged or decreed to be payable.

         (b) Effect of Foreclosure. Etc, Mortgagee shall be entitled to recover
judgment as aforesaid either before or after or during the pendency of any
proceedings for the enforcement of the provisions of this Mortgage; and the
right of Mortgagee to recover such judgment shall not be affected by any entry
or sale hereunder, or by the exercise of any other right, power or remedy for
the enforcement of the provisions of this Mortgage or the foreclosure of the
lien hereof, and in the event of a sale of the Mortgaged Property and of the
application of the proceeds of sale, as in this Mortgage provided, to the
payment of the debt hereby secured, Mortgagee shall be entitled to enforce
payment of, and to receive all amounts then remaining due and unpaid upon, the
Note and to enforce payment of all other charges, payments and costs due under
this Mortgage, and shall be entitled to recover judgment for any portion of the
debt remaining unpaid, with interest at the maximum rate permitted by law. If
any case shall be commenced against Mortgagor under any applicable insolvency,
bankruptcy or any similar law now or hereafter or any proceedings for
Mortgagor's reorganization or involving the liquidation

                                       32
<PAGE>

of Mortgagor's assets, then Mortgagee shall be entitled to prove the whole
amount of principal, Prepayment Charge and interest due upon the Note to the
full amount thereof, and all other payments, charges and costs due under this
Mortgage (including, without limitation, the fees and expenses of Mortgagee's
attorneys in connection with such proceedings), without deducting therefrom any
proceeds obtained from the sale of the whole or any part of the Mortgaged
Property, provided, however, that in no case shall Mortgagee receive a greater
amount than such principal, Prepayment Charge and interest and such other
payments, charges and costs from the aggregate amount of the proceeds of the
sale of the Mortgaged Property and the distribution from the estate of
Mortgagor.

         (c) Effect of Judgment. No recovery of any judgment by Mortgagee and no
levy of any execution under any judgment upon the Mortgaged Property or any part
thereof or upon any other property of Mortgagor shall affect in any manner or to
any extent the lien of this Mortgage upon the remaining Mortgaged Property not
recovered or levied against or executed upon or any part thereof or any liens,
rights, powers or remedies of Mortgagee hereunder, but such liens, rights,
powers and remedies of Mortgagee shall continue unimpaired as before.

         (d) Application of Sums Collected. Any moneys thus collected by
Mortgagee under this Section 2.4 shall be applied by Mortgagee in accordance
with the provisions of paragraph (c) of Section 2.3.

         (e) Legal Proceedings. Mortgagor unconditionally and irrevocably agrees
that any action or proceeding against Mortgagor with respect to the Loan or for
the recognition or enforcement of any judgment rendered in any such action or
proceeding may be brought in the United States Courts for any District in which
the Mortgaged Property is situated or in the courts of the State in which the
Mortgaged Property is situated, as Mortgagee may elect, and by executing and
delivering this Mortgage, Mortgagor unconditionally and irrevocably accepts and
submits to the non-exclusive jurisdiction of each of the aforesaid courts in
person generally with respect to any such action or proceeding for itself and in
respect of its properties. Mortgagor further agrees that final judgment against
it in any action or proceeding shall be conclusive and may be enforced in any
other jurisdiction, by suit on the judgment, a certified or exemplified copy of
which shall be conclusive evidence of the fact and of the amount of Mortgagor's
indebtedness.

         MORTGAGOR AND MORTGAGEE WAIVE THE RIGHT TO A JURY TRIAL IN CONNECTION
WITH ANY ACTION, SUIT OR PROCEEDING (INCLUDING ANY AND ALL COUNTERCLAIMS
THERETO) THAT DIRECTLY OR INDIRECTLY RELATES TO THE SUBJECT MATTER OF THIS
MORTGAGE. MORTGAGOR HEREBY EXPRESSLY AND UNCONDITIONALLY WAIVES, IN CONNECTION
WITH ANY SUIT, ACTION OR PROCEEDING BROUGHT ON THIS MORTGAGE BY THE MORTGAGEE
ANY AND EVERY RIGHT IT MAY HAVE TO (I) INTERPOSE ANY COUNTERCLAIM THEREIN (OTHER
THAN COMPULSORY COUNTERCLAIMS) AND (II) HAVE THE SAME CONSOLIDATED WITH ANY
OTHER OR SEPARATE SUIT, ACTION OR

                                       33
<PAGE>

PROCEEDING. NOTHING HEREIN CONTAINED SHALL PREVENT OR PROHIBIT MORTGAGOR FROM
INSTITUTING OR MAINTAINING A SEPARATE ACTION AGAINST MORTGAGEE WITH RESPECT TO
ANY ASSERTED CLAIM.

         2.5. Appointment of Receiver. After the occurrence of any Event of
Default and during its continuance, whether incidental to any proceedings to
foreclose this Mortgage or to enforce the specific performance hereof or to any
other judicial proceeding to enforce any right of Mortgagee, or otherwise,
Mortgagee shall be entitled, as a matter of right, without the giving of notice
to any other party and without regard to the adequacy or inadequacy of any
security for the Mortgage indebtedness, either before or after declaring the
unpaid principal of the Note to be due and payable, to the appointment of a
receiver or receivers of the Mortgaged Property and of all the Rents thereof
Mortgagor hereby irrevocably and unconditionally consents to the appointment of
such receiver or receivers (and to the exercise by such receiver or receivers of
such powers as may be requested by Mortgagee of the court that is empowered to
make such appointment), waives any and all defenses to such appointment and
agrees not to oppose Mortgagor's application therefor.

         2.6. Possession by Mortgagee. Notwithstanding the appointment of any
receiver, liquidator or trustee of Mortgagor, or of any of Mortgagor's property,
or of the Mortgaged Property or any part thereof, Mortgagee shall be entitled to
retain possession and control of all property now or hereafter held under this
Mortgage.

         2.7. Remedies Cumulative. No right or remedy of Mortgagee is intended
to be exclusive of any other right or remedy specified herein, in any other Loan
Document or available to Mortgagee at law or in equity. All such rights and
remedies shall be cumulative and concurrent and, at Mortgagee's option, may be
pursued singularly, successively or together and may be exercised as often as
occasion therefor shall arise. No delay or failure of Mortgagee to exercise any
right, power or remedy hereunder or under any other Loan Document shall impair
any such right, power or remedy or shall be construed to be a waiver thereof or
of any Event of Default, and Mortgagor shall not thereby be relieved of its
obligations. Mortgagee shall be deemed to have waived any such right, power or
remedy only if such waiver is expressly set forth in a written instrument duly
executed by an authorized representative of Mortgagee. No waiver of any breach
shall constitute a waiver of any other then existing or subsequent breach.

         2.8. Right to Withdraw Proceeding. Etc. Any action, suit or
proceeding brought by Mortgagee pursuant to any of the terms of this Mortgage or
otherwise and any claim made by Mortgagee hereunder may be compromised, settled,
withdrawn, abandoned or otherwise dealt with by Mortgagee without any notice to,
agreement or approval of, or consent by, Mortgagor and without any liability of
Mortgagee to Mortgagor.

         2.9. Waiver. To the fullest extent permitted by law and with full
awareness of the consequences thereof, Mortgagor hereby unconditionally and
irrevocably (a) waives and relinquishes the benefit of, and releases all rights
of Mortgagor under, all laws now or hereafter in force providing for any
appraisement or valuation before sale of the Mortgaged Property or any portion
thereof, any stay of

                                       34
<PAGE>

execution or extension of the time for the enforcement of the collection of the
indebtedness secured by this Mortgage, any extension of a period of redemption
from any sale in furtherance of the collection of said indebtedness, and any
marshalling of the assets of Mortgagor (including, without limitation, the
Mortgaged Property), and (b) agrees that Mortgagor shall not at any time insist
upon, plead, claim or take the benefit or advantage of any law now or hereafter
in force providing for any of the foregoing. In addition, to the fullest extent
permitted by law and with full awareness of the consequences thereof, Mortgagor
hereby waives and relinquishes the right to assert any defense based upon laws
applicable to sureties and guarantors.

         2.10. Use and Occupancy of Mortgaged Property. During the continuance
of any Event of Default and pending the exercise by Mortgagee of its right to
exclude Mortgagor from all or any part of the Mortgaged Property, Mortgagor
agrees to pay to Mortgagee the fair and reasonable rental value for the use and
occupancy of the Mortgaged Property or any part thereof that is in Mortgagor's
possession for such period and, upon default of any such payment, shall vacate
and surrender possession of the Mortgaged Property to Mortgagee or to a
receiver, if any, and in default thereof Mortgagor may be evicted by summary
action or proceeding for the recovery of possession of premises for nonpayment
of rent.

         2.11. Mortgagee's Attorneys' Fees. Mortgagor shall upon demand pay any
and all costs, expenses, and attorneys' fees incurred by Mortgagee in connection
with (a) enforcing, or attempting to enforce, Mortgagee's rights under the Loan
Documents; (b) obtaining legal advice regarding Mortgagee's available legal
alternatives and rights under the Loan Documents; and (c) representation of
Mortgagee's interest in any action or proceeding that relates to the Loan,
Mortgagor or the Mortgaged Property.

         2.12. Effect of Mortgagor's Tender. If, after the occurrence of an
Event of Default but before the sale of the Mortgaged Property, Mortgagor
tenders to Mortgagee payment of the amount necessary to pay all sums then due
hereunder, then such tender shall constitute a voluntary prepayment of the Note,
and Mortgagor shall pay Mortgagee, together with all other sums then due,
Prepayment Charge computed in accordance with the Note.

         2.13. Mortgagee's Failure to Allow Cure Period. Notwithstanding
anything to the contrary in any Loan Document, wherever it is stated in this
Mortgage that an Event of Default shall be deemed to have occurred only after
Mortgagee has given notice (a "Cure Notice") of specified circumstances (an
"Unmatured Default") and a specified period of time (the "Cure Period") has
passed, if Mortgagee fails to give the required Cure Notice and commences
foreclosure proceedings under this Mortgage, then, (a) if, within the Cure
Period, as measured from the commencement of the foreclosure proceedings,
Mortgagor cures the applicable Unmatured Default, then Mortgagee shall
discontinue such foreclosure proceedings and reinstate the Loan on the same
terms and conditions, as if the Note had never been accelerated; (b) such
discontinuance of foreclosure proceedings shall constitute Mortgagor's sole
remedy for Mortgagee's failure to have given the required Cure Notice, and
Mortgagee shall have no liability to Mortgagor with respect thereto; and (c)
Mortgagee's failure to give the Cure Notice shall not invalidate, nullify, or
constitute a defense in any foreclosure proceedings that are otherwise properly
commenced.

                                       35
<PAGE>

                                   ARTICLE III
                         Representations and Warranties

         Mortgagor represents and warrants to Mortgagee that, as of the date of
the delivery of this Mortgage and as of each date as of which Mortgagor is
required to make any payment under the Note:

         3.1. Title. Etc. Mortgagor has good and marketable title to an
indefeasible fee estate in the Mortgaged Property, subject to no lien, charge or
encumbrance except (a) matters listed as typewritten exceptions to title in
Schedule B of Mortgagee's title policy issued by Land Title Agency, Inc. as
agent for Commonwealth Land Title Insurance Company pursuant to title order
number H186670EP and title order number H186671EP, insuring the lien of this
Mortgage; and (b) Leases that comply with this Mortgage. Upon recordation, this
Mortgage shall impose upon such of the Mortgaged Property as constitutes real
estate a first priority lien. Mortgagor owns the Chattels and all other
Mortgaged Property free and clear of liens and claims other than those set forth
in said typewritten exceptions.

         3.2. Compliance with Requirements. Etc. Mortgagor is in full compliance
with all Requirements and Restrictions. Neither the Mortgaged Property nor any
part thereof was acquired with the proceeds from any transaction or activity
that would cause the Mortgaged Property or any such part to be subject to
forfeiture under any Requirement or Restriction. Furthermore, Mortgagor has not
been responsible for, and has no knowledge of, any action or omission by any
person or entity that would cause the Mortgaged Property or any such part to be
subject to forfeiture.

         3.3. Rent Roll. Mortgagor has heretofore delivered to Mortgagee a rent
roll listing the Rents payable under all Leases. All Rents shown in the rent
roll are legal and enforceable Rents and are in compliance with all applicable
Requirements.

         3.4. Easements. Etc. Mortgagor has all easements, including those for
use, maintenance, and access (by pedestrians, automobiles and trucks) necessary,
appropriate, or convenient for the full and proper operation, repair,
maintenance, occupancy and use of every portion of the Mortgaged Property. The
Mortgaged Property is adequately served by all utilities necessary, appropriate,
or convenient for the full and proper operation, repair, maintenance, occupancy
and use of every portion of the Mortgaged Property.

         3.5. No Misrepresentations. Neither this Mortgage, any other Loan
Document, nor any other document or certificate furnished to Mortgagee or to
Mortgagee's attorneys or to Lenders in connection with the transactions
contemplated hereby or thereby contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements
contained therein or herein not misleading. All certifications, recitals,
representations and warranties contained in the Loan Documents are true and
correct.

         3.6. Governmental Approvals. All Authorizations necessary or
appropriate to permit the use and occupancy of the Mortgaged Property and which
are

                                       36
<PAGE>

required to be obtained from any Governmental Authority have been duly obtained
and are in full force and effect.

         3.7. Approvals of Loan Documents. No consent, approval or authorization
of, or registration, declaration or filing with, any Governmental Authority is
required in connection with the valid execution, delivery and performance of the
Loan Documents or the carrying out of any of the transactions contemplated
thereby.

         3.8. Other Beneficiaries. The representations and warranties contained
in the Loan Documents shall inure to the benefit of any purchaser at a
foreclosure sale or other grantee named in a deed delivered in respect of the
Mortgaged Property.

         3.9. Federal Law. The proceeds of the Loan are not being and will not
be used, directly or indirectly, for the purpose of "purchasing" or "carrying"
any "margin stock" in contravention of Regulation U or X promulgated by the
Board of Governors of the Federal Reserve System. Mortgagor is incurring the
Loan for business purposes only, and not for personal, family or household
purposes. Neither the Premises nor any part thereof constitutes or is intended
to constitute the personal residence of Mortgagor or any Principal of Mortgagor
at any time while the portion of the Premises so used is encumbered by this
Mortgage. Mortgagor is a United States person, and is not a foreign person, as
defined in the Foreign Investment in Real Property Tax Act.

         3.10. Hazardous Substances. Without limiting the generality of any
other representation or warranty contained in this Mortgage, the Mortgaged
Property and the existing uses thereof comply and, to the best of Mortgagor's
knowledge, at all times have complied in all respects with all Environmental
Laws in effect on the date of this Mortgage; all Environmental Authorizations
have been duly issued or granted and are in full force and effect; and Mortgagor
is not, and at no time since Mortgagor acquired ownership or possession of the
Mortgaged Property or any portion thereof has Mortgagor been, in violation of
any Environmental Law with respect to the Mortgaged Property. Without limiting
the generality of the foregoing:

                  (a) No Hazardous Substances are being, or are intended or
         threatened to be, and, to the best of Mortgagor's knowledge, no
         Hazardous Substances have ever been, used, received, handled,
         generated, manufactured, produced, processed, treated, stored,
         released, placed, spilled, discharged, disposed of or dispersed at, or
         otherwise caused to become situated, at, on, under or about the
         Mortgaged Property, and no portion of the Mortgaged Property has been
         used at any time as a landfill or as a waste treatment, storage or
         disposal facility;

                  (b) None of the Improvements contains (and, to the best of
         Mortgagor's knowledge, none of the Improvements which at any time were
         a part of, or were situated at, on or under the Mortgaged Property
         contained) any Hazardous Substances;

                  (c) No underground storage tanks or other underground storage
         facilities are, or, to the best of Mortgagor's knowledge, have ever
         been, situated on or under the Mortgaged Property;

                                       37
<PAGE>

                  (d) To the best of Mortgagor's knowledge, (i) the ambient air
         quality at the Mortgaged Property complies with the requirements of all
         Environmental Laws and (ii) the present levels of radon, formaldehyde,
         asbestos and all other Hazardous Substances, to the extent any such
         Hazardous Substances exist at, on, under or about the Mortgaged
         Property, are within the limits prescribed by all Environmental Laws;

                  (e) Neither the Mortgaged Property nor, to the best of
         Mortgagor's knowledge, any land which adjoins any portion of the
         Mortgaged Property, contains or is affected by any dam, well,
         reservoir, inland wetland, watercourse or water discharge; and

         Mortgagor has not received or had served upon it any summons, citation,
directive, order, Notice or other communication, oral or written, which (i)
claims or alleges any failure to comply with any Environmental Law with respect
to the Mortgaged Property or (ii) contains any statement(s) or fact(s) which, if
true, would signify that any representation, warranty or statement contained in
this Mortgage is other than complete and correct. With respect to the ownership,
use, operation or maintenance of the Mortgaged Property or the conduct of
Mortgagor's business thereat, (y) no writ, injunction, decree, order or judgment
is outstanding and (z) no suit, claim, action, proceeding or investigation has
been instituted or filed with respect to any Environmental Law (and, to the best
of Mortgagor's knowledge, no basis for any of the foregoing exists). No lien has
been filed against or imposed upon any of the Mortgaged Property with respect to
any Environmental Law.

         Each of the representations and warranties contained in this Section
3.14 shall be deemed made by Mortgagor with respect to all other land, together
with the buildings, structures, equipment and other improvements thereon, in
whole or in part owned, leased, operated or occupied by Mortgagor.

         3.11. Split Tax Lots. The tax lot or lots that contain the Mortgaged
Property include no real property other than the Mortgaged Property and
constitute one or more discrete, salable parcels.

                                   ARTICLE IV

                                  Miscellaneous

         4.1. Partial Invalidity. If any provision(s) of any Loan Document are
held to be invalid, illegal or unenforceable in any respect, then such
invalidity, illegality or unenforceability shall not affect any other provision
of such instrument(s) and such instrument(s) shall instead be construed as if it
or they had never contained such invalid, illegal or unenforceable provision.

         4.2. Notice. (a) All notices hereunder shall be in writing and shall
be deemed sufficiently given or served for all purposes when delivered
personally, or sent by mail to any party hereto at such party's address above
stated (in the case of Mortgagee, attention, Commercial Real Estate Division,
EAB Plaza, Thirteenth Floor, Uniondale,

                                       38
<PAGE>

New York 11556-0123), or at such other address of which such party shall have
notified the other party in writing. Any notice given by an attorney
representing or purporting to represent Mortgagee shall constitute notice by
Mortgagee if such attorney is in fact authorized to act on behalf of Mortgagee.
Upon receipt of any notice from an attorney purporting to act for Mortgagee,
Mortgagor shall have the right, by notice to Mortgagee in compliance with this
Mortgage, to require Mortgagee to deliver prompt written proof of the attorney's
authority. Such a request, if promptly complied with by Mortgagee, shall not
delay or suspend the effectiveness of Mortgagee's notice to Mortgagor.

         (b) All notices given to Mortgagee by any person or entity (other than
Mortgagor) pursuant to Pa. C.S.A.ss.8143(b), (c) or (d) shall be in writing and
shall be sent exclusively by United States registered mail, return receipt
requested, to Mortgagee at the address specified in paragraph (a) of this
Section above.

         (c) Without limiting, in any manner, any of Mortgagee's other rights
and remedies under this Mortgage, the Loan Agreement or any of the other Loan
Documents, if (i) Mortgagor shall at any time deliver or cause to be delivered
to Mortgagee a notice pursuant to 42 Pa. C.S.A.ss.8143 electing to limit the
indebtedness secured by this Mortgage or (ii) Mortgagee shall receive or be
served with any notice pursuant to 42 Pa. C.S.A.ss.8143(b) or (d), then, in any
such case, Mortgagee's obligations, if any, to continue to make advances under
the Loan Agreement, this Mortgage or any of the other Loan Documents shall
thereupon immediately cease and be of no further force or effect, anything
contained in this Mortgage, the Loan Agreement or any of the other Loan
Documents to the contrary notwithstanding.

         4.3. Waiver of Notice. Whenever in this Mortgage the giving of notice
by mail or otherwise is required, the giving of such notice may be waived in
writing by the person or persons entitled to receive such notice.

         4.4. Successors and Assigns. All the grants, covenants, terms,
provisions and conditions of this Mortgage shall run with the land, shall apply
to and bind the successors and assigns of Mortgagor (and Mortgagor's heirs, if
Mortgagor is an individual) and all subsequent owners, encurnbrancers and
tenants of the Mortgaged Property and shall inure to the benefit of the
successors and assigns of Mortgagee and all subsequent holders of this Mortgage.
Nothing in this Section 4.4 limits the prohibitions of Section 1.18. Mortgagee
may freely assign any or all of Mortgagee's rights and obligations under the
Loan Documents, including without limitation by granting "participations" to
other parties.

         4.5. Usury Savings. Nothing in any Loan Document shall require the
payment or permit the collection by Mortgagee of interest in an amount exceeding
the maximum amount permitted under applicable law in commercial mortgage loan
transactions between parties of the character of the parties hereto (the
"Maximum Interest Amount"). Mortgagor shall not be obligated to pay to Mortgagee
any interest in excess of the Maximum Interest Amount, and the amount of
interest payable to Mortgagee under the Loan Documents shall under no
circumstance be deemed to exceed the Maximum Interest Amount. To the extent that
any payment made to Mortgagee under the Loan Documents would cause the amount of
interest charged to exceed the Maximum Interest Amount, such payment shall be
deemed a prepayment of principal as to which no

                                       39
<PAGE>

Prepayment Charge or notice shall be required, notwithstanding anything to the
contrary in any Loan Document, or, if the amount of excess interest exceeds the
unpaid principal balance of the Note, such excess shall be refunded to
Mortgagor.

         4.6. Counterparts. This Mortgage may be executed in any number of
counterparts. Each such counterpart shall for all purposes be deemed an
original. All such counterparts shall together constitute but one and the same
mortgage.

         4.7. Governing Law. This Mortgage shall be construed and enforced in
accordance with, and shall be governed by, the laws of the state in which the
Premises are situated.

         4.8. Written Amendments. This Mortgage may be amended, discharged or
terminated only by a written instrument executed by Mortgagee and Mortgagor.

         4.9. Actions, Approvals and Determinations. Wherever in this Mortgage
it is provided that (a) as a condition precedent to Mortgagor's undertaking
certain action, Mortgagor shall be required to obtain Mortgagee's consent or
approval or (b) Mortgagee shall have the right to make a determination
(including, without limitation, a determination as to whether a matter is
satisfactory to Mortgagee), or if Mortgagor shall request that Mortgagee take
any action, then, unless expressly provided to the contrary in the applicable
provision of this Mortgage, the decision whether to grant such consent or
approval or to take the requested action, or the determination in question,
shall be in the sole and exclusive discretion of Mortgagee and shall be final
and conclusive. Wherever in this Mortgage it is stated that any consent or
approval shall not be unreasonably withheld or that a determination to be made
by Mortgagee shall be subject to a specified standard, then, if a court of
competent jurisdiction determines, without right to further appeal, that the
consent or approval has been unreasonably withheld or that such specified
standard has been met, the consent or approval shall be deemed granted or the
standard shall be deemed met, as the case may be, and Mortgagee, at the request
of Mortgagor, shall deliver to Mortgagor written confirmation thereof. The
obtaining of such consent or approval or determination that such standard has
been met shall be Mortgagor's sole and exclusive remedy with respect to the
subject matter of this section, and under no circumstance shall Mortgagee,
Mortgagee's counsel or anyone else acting or purporting to act on Mortgagee's
behalf having any liability (whether in damages or otherwise) with respect
thereto. In any instance in which Mortgagor requests, or any Loan Document
provides, that Mortgagee shall consider granting its consent or approval or
making a determination or taking some other action, Mortgagor shall, upon
demand, pay all costs, expenses and attorneys' fees incurred by Mortgagee in
connection therewith.

         4.10. Receipt of C012. Mortgagee has delivered to Mortgagor, without
charge, a true and correct copy of this Mortgage. Mortgagor acknowledges receipt
of same.

         4.11. Modifications. Releases. Etc, Subject to the provisions of
Section 11.02 of the Loan Agreement, from time to time, Mortgagee may, at
Mortgagee's option, without notice to or consent by Mortgagor, any Principal of
Mortgagor, any Guarantor,

                                       40
<PAGE>

any junior lienholder, or any other person, without liability and despite
Mortgagor's breach under any of the Loan Documents, do any of the following: (a)
release from the lien of this Mortgage any or all of the Mortgaged Property; (b)
take or release other or additional security; (c) consent to any map, plat,
restrictions, or easement affecting the Mortgaged Property; (d) join in any
extension or subordination agreement; (e) alter, substitute or release any
property securing the Loan; or agree in writing with Mortgagor to modify the
interest rate, amortization period, payment amount, or any other provision of
the Note or the Loan Agreement. No action described in the preceding sentence
shall affect the lien or priority of lien of this Mortgage, Mortgagor's
obligations under the Loan Documents (except as Mortgagee agrees in writing), or
the obligations of any Guarantor or Principal of Mortgagor. Mortgagor shall pay
Mortgagee a reasonable service charge, together with such title insurance
premiums, attorneys' fees and other costs as Mortgagee may incur in connection
with any such action. Mortgagee shall be under no obligation whatever to take
any such actions.

         Mortgagor and Mortgagee shall, upon their mutual agreement to do so,
and in accordance with Section 11.02 of the Loan Agreement execute such
documents as may be necessary in order to effectuate the modification of this
Mortgage, including the execution of substitute mortgages, so as to create two
or more liens on the Mortgaged Property in such amounts as may be mutually
agreed upon but in no event to exceed, in the aggregate, the amount set forth in
Section 6.2 herein; in such event, Mortgagor covenants and agrees to pay the
reasonable fees and expenses of Mortgagee and its counsel in connection with any
such modification.

         4.12. Construction. The Loan Documents shall be construed without
regard to section headings, which are provided for convenience only and shall
not be deemed to modify, or be used to interpret, the provisions of this
Mortgage. References to a section are references to a section within this
Mortgage unless otherwise expressly stated or necessarily implied by the
context. The Loan Documents shall be construed without regard to any presumption
or other rule requiring construction against the party which caused the Loan
Documents to be drafted and, if the Premises are situated in New York State,
without regard to New York Real Property Law Section 254. Nothing herein is
intended or shall be deemed to create a joint venture or partnership between
Mortgagor and Mortgagee or any relationship other than that of mortgagor and
mortgagee.

         4.13. Non-Merger. Unless expressly provided otherwise, in the event
that ownership of this Mortgage and title to the fee and/or leasehold estates in
the Premises encumbered hereby shall become vested in the same person or entity,
this Mortgage shall not merge in said title but shall continue to be and remain
a valid and subsisting lien on said estates in the Premises for the amount
secured hereby.

                                    ARTICLE V

                                 Transfer Taxes

         In the event of any transfer ("Transfer") of the Mortgaged Property, or
any part thereof, including any sale by reason of foreclosure of this Mortgage
or any prior or subordinate mortgage, Mortgagor shall furnish Mortgagee with a
true and complete copy

                                       41
<PAGE>

of the transferor and transferee questionnaires, all supporting documentation,
and any affidavits furnished to the taxing authorities or recording officer
applicable thereto, and the vendee or transferee shall automatically assume and
become responsible to perform the obligations imposed upon Mortgagor under this
Article.

         Mortgagor also covenants and agrees that in the event of a Transfer,
Mortgagor shall duly complete, execute and deliver to Mortgagee all forms and
supporting documentation required by any taxing authority to estimate and fix
the transfer taxes and other taxes, if any, payable by reason of the Transfer or
recording of the deed evidencing the Transfer.

         Mortgagor agrees to pay any tax (including, without limitation, any
transfer tax imposed by any Governmental Authority) that may now or hereafter
become due and payable with respect to any Transfer of the Mortgaged Property,
and in default thereof Mortgagee may at its option pay the same and the amount
of such payment shall be added to the indebtedness secured hereby and, unless
incurred in connection with a foreclosure of this Mortgage, be secured by this
Mortgage.

         Mortgagor hereby irrevocably and unconditionally constitutes and
appoints Mortgagee as Mortgagor's true and lawful attorney in fact, coupled with
an interest, in Mortgagor's name and stead, with full power of substitution to
prepare and deliver any questionnaire, statement, affidavit or tax return in
furtherance of any Transfer.

         If Mortgagor fails or refuses to pay a tax payable by Mortgagor after a
Transfer by reason of a foreclosure of this Mortgage in accordance with this
Article, the amount of the tax and any interest or penalty applicable thereto
may, at the sole option of Mortgagee, be paid as an expense of the sale out of
the proceeds of the mortgage foreclosure sale.

         The provisions of this Article shall survive any Transfer and the
delivery of the deed affecting such Transfer.

         Nothing in this Article is intended (a) to expand any obligation of
Mortgagee beyond that provided for by law; (b) to confer any benefit or rights
upon any taxing authority; or (c) to limit Section 1. 18.

                                   ARTICLE VI

                              Additional Provisions

         6.1. Assignment of Leases and Rents. This Mortgage is intended to
constitute a present, absolute and irrevocable assignment of all of the Rents
now or hereafter accruing, and Mortgagor, without limiting the generality of the
Granting Clause hereof, specifically hereby presently, absolutely and
irrevocably assigns all of the Rents now or hereafter accruing to Mortgagee. The
aforesaid assignment shall be effective immediately upon the execution of this
Mortgage and is not conditioned upon the occurrence of any Event of Default
hereunder or any other contingency or event, provide, however, that Mortgagee
hereby grants to Mortgagor the right and license to

                                       42
<PAGE>

collect and receive the Rents as they become due so long, as no Event of Default
exists hereunder. Immediately upon the occurrence of any such Event of Default,
the foregoing right and license shall be automatically terminated and of no
further force or effect. Nothing contained in this Section 6.1 or elsewhere in
this Mortgage shall be construed to make Mortgagee a mortgagee in possession
unless and until Mortgagee actually takes possession of the Mortgaged Property,
nor to obligate Mortgagee to take any action or incur any expense or discharge
any duty or liability under or in respect of any leases or other agreements
relating to the Mortgaged Property or any part thereof

         6.2. Type of Property Mortgagor represents and warrants to Mortgagee
that this Mortgage does not cover real property principally improved or to be
improved by one or more structures containing in the aggregate not more than six
residential dwelling units, each having its own separate cooking facilities.

         6.3. Maximum Principal Indebtedness Secured. Notwithstanding anything
set forth in this Mortgage to the contrary, the maximum amount of principal
indebtedness secured hereby at execution, or which under any contingency may
become secured hereby at any time hereafter, is $59,000,000, with interest
(including interest at the Default Rate to the extent provided in this
Mortgage), late charges and such other sums as may (a) be advanced by Mortgagee
pursuant to the Loan Documents for the protection of the Mortgaged Property or
the preservation of the lien of this Mortgage (together with attorneys' fees and
disbursements) and (b) be secured hereby without resulting in the imposition of
mortgage recording tax in addition to the amount of tax due with respect to the
principal indebtedness of $59,000,000.

         6.4. Exculpation. Neither Mortgagor nor any Principal of Mortgagor
shall be personally liable for payment of the principal of the Note or interest
thereon, and in the event of any failure by Mortgagor to pay any portion of such
principal or interest, Mortgagee will look, with respect to the then outstanding
balance of such principal and interest, solely to the Mortgaged Property and
such other collateral as has been, or hereafter shall be, given to secure
payment of the Note. The foregoing limitation on liability shall not impair or
otherwise affect the validity or enforceability of (a) the debt evidenced by the
Note or of any other obligations evidenced by the Loan Documents or (b)
Mortgagee's liens, security interests, rights and remedies (including, without
limitation, the remedies of foreclosure and/or sale) with respect to the
Mortgaged Property or any other property, security, collateral and/or assets
(including the proceeds thereof) encumbered, pledged or assigned by this
Mortgage or any other security for the Loan. In addition, the foregoing
limitation on liability shall not limit anyone's obligations or be applicable
with respect to: (i) liability under any guaranty(ies) or indemnity(ies)
delivered or afforded to Mortgagee; (ii) any fraud or material
misrepresentation; (iii) taxes of any kind (whether characterized as transfer,
gains or other taxes) payable in connection with the foreclosure sale of the
Mortgaged Property, irrespective of who pays such taxes; (iv) application of any
proceeds of the Loan to any purpose other than as provided in the Loan
Documents; (v) the application of any insurance or condemnation proceeds or
other funds or payments other than strictly in accordance with the Loan
Documents; (vi) the misapplication of any security deposits; (vii) rents, sales
proceeds, or other sums received after default under the Loan Documents which
are not applied to expenses of operating the Mortgaged Property or paid to
Mortgagee or a duly appointed

                                       43
<PAGE>

receiver of the Premises; (viii) any failure to deliver to Mortgagee, after
demand therefor, any agreements relating to the operation, management, leasing,
use, occupancy or construction of the Mortgaged Property; (ix) any intentional
physical waste in respect of the Mortgaged Property; (x) any failure to pay or
discharge any real estate tax, other tax, assessment, fine, penalty or lien
against the Mortgaged Property to the extent revenue from leases of the
Mortgaged Property was available to pay same; (xi) liability to Mortgagee for
the reimbursement to Mortgagee, together with interest as provided in the Loan
Documents, of all sums advanced or expended by Mortgagee after or in respect of
any default under the Loan Documents; (xii) liability as landlord under any
lease(s) relating to the Mortgaged Property ,vhich Lenders are or become
obligated for by virtue of Lenders succeeding to the interests of Borrower;
(xiii) liability under any agreement relating to the operation or maintenance of
the Mortgaged Property which Lenders are or become obligated for by virtue of
Lenders succeeding to the interests of Borrower; (xiv) liability to pay for the
premiums on and keep in full force and effect insurance in respect of the
Mortgaged Property in accordance with the Loan Documents to the extent revenue
from leases of the Mortgaged Property was available to pay same; or (xv)
liability for Hazardous Substances that may exist upon or be discharged from the
Mortgaged Property. Mortgagor and any Principal of Mortgagor shall in any event
be and shall remain personally liable for each of the matters to which reference
is made in the preceding sentence and Mortgagee may seek, obtain and enforce one
or more money judgments in any appropriate proceeding(s) with respect thereto.
The limitation on personal liability contained in this paragraph shall become
automatically null and void and shall be of no further force or effect, and
Mortgagor and each Principal of Mortgagor shall be and remain personally liable
for payment of the principal of the Note and interest thereon, in the event that
Mortgagor. or anyone acting on behalf of Mortgagor, shall (A) file a petition or
answer seeking any relief of any kind under the bankruptcy laws of the United
States (or if an Insolvency Event shall otherwise occur), (B) assert in writing
or in any legal proceedings of any kind that any provisions of any of the Loan
Documents are in whole or in part unenforceable, invalid or not legally binding,
or (C) fail fully to cooperate with Mortgagee or a receiver in Mortgagee's or
such receiver's efforts to collect Rents directly from tenants after a default
under the Loan Documents.

         6.5. Exculpation of Trustees. This Mortgage is executed by certain
Trustees of Acadia Realty Trust (the "Trust"), the general partner of Mortgagor,
not individually, but solely in their representative capacities as trustees of
the Trust. Mortgagee hereby waives any rights to bring a cause of action against
the individuals executing this Mortgage as trustees of the Trust (except for any
cause of action based upon lack of authority or fraud), and Mortgagee agrees to
look solely to the Mortgaged Property or, if permitted under this Mortgage, the
other assets of Mortgagor or Principal of Mortgagor, for the enforcement of any
claim Mortgagee at any time may have under this Mortgage or under the Loan
Documents.

         6.6. Reduction of Mortgage Amount Amounts received by Mortgagee in
reduction of the Loan in accordance the Loan Agreement shall not decrease the
amounts secured by this Mortgage unless (i) such payments are received in
connection with the release of the Premises encumbered by this Mortgage or (ii)
the aggregate amounts actually received in reduction of the Loan has reduced the
maximum Loan

                                       44
<PAGE>

Amount that is or may be outstanding, after taking into consideration sums that
may be advanced pursuant to the Loan Agreement, to the Mortgage Amount.

                  [Remainder of page intentionally left blank.]

                                       45
<PAGE>

         IN WITNESS WHEREOF, this Mortgage has been duly executed and delivered
by Mortgagor intending to be legally bound and intending the same to take effect
as a sealed instrument as of the date first above written.

                                 ACADIA REALTY LIMITED PARTNERSHIP, a Delaware
                                 limited partnership (as Borrower)

                                 By: Acadia Realty Trust, a Maryland real estate
                                     investment trust, its general partner

Attest:                          By                                [SEAL]
                                 Name:
By                               Title:
Name:
Title:

                  The undersigned joins in the execution and authorizes the
delivery of this Mortgage for the purpose of accepting and agreeing to the
provisions of paragraph 6.5 hereof

                                                      ACADIA REALTY TRUST

 Attest,                         By                                (SEAL]
                                 Name:
 By                              Title:
 Name:
 Title:

         The undersigned hereby certifies that Mortgagee's address is EAB Plaza,
Thirteenth Floor, Uniondale, New York 11556-0123.

                                       Attorney for Mortgagee

                                       46
<PAGE>

STATE OF NEW YORK
                                       ss.:
COUNTY OF NEW YORK

         On the day     of March in the year 2000, before me, the undersigned, a
notary public in and for said state, personally appeared personally known to me
or proved to me on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument and acknowledged to me that he
executed the same in his capacity, and that by his signature on the instrument,
the individual, or the person upon behalf of which the individual acted,
executed the instrument.

                                                         Notary Public

 My commission expires:
                                                        ROBERT MASTERS
                                               Notary Public, State of New York
                                                        No. 24-4627447
                                                   Qualified in Kings County
                                               Commission Expires Aug. 31, 2000

<PAGE>

STATE OF NEW YORK
                                      ss.:
COUNTY OF NEW YORK

         On the _ day of March in the year 2000, before me, the undersigned, a
notary public in and for said state, personally appeared personally known to me
or proved to me on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument and acknowledged to me that he
executed the same in his capacity, and that by his signature on the instrument,
the individual, or the person upon behalf of which the individual acted,
executed the instrument.

                                                         Notary Public

 My commission expires:
                                                        ROBERT MASTERS
                                               Notary Public, State of New York
                                                        No. 24-4627447
                                                   Qualified in Kings County
                                                Commission Expires Aug. 31, 20

<PAGE>

                                                         [Bradford Towne Center]

                                   SCHEDULE A

         All that certain parcel of land being in the Township of Wysox, County
of Bradford, Commonwealth of Pennsylvania, bounded and described as follows:

         Beginning at the north east comer of Steven W. Moore, et al., commonly
known as Moore's Auto Sales and also at a point in the southern right-of-way of
State Route 6, also being the north west comer of parcel herein described,
thence along the southern right-of-way of Route 6 on a curve to the right with
an arc length of 307.30 feet, a radius of 1860.08 feet, and a chord bearing and
distance of North 78 degrees 15 minutes 35 seconds East 306.95 feet, thence
still along the southern right-of-way of Route 6 the next three courses :(I)
North 82 degrees 59 minutes 34 seconds East 102.08 feet, (2) South 85 degrees 41
minutes 51 seconds East 101.98 feet, (3) North 82 degrees 59 minutes 34 seconds
East 171.99 feet to the center line of Little Wysox Creek, thence downstream in
the bed of Little Wysox Creek the next nine courses and distances: (1) South 46
degrees 27 minutes 17 seconds East 86.45 feet to an angle, (2) South 52 degrees
57 minutes East 81.9 feet to an angle, (3) South 66 degrees 68 minutes East 58.2
feet to an angle, (4) South 61 degrees 21 minutes 47 seconds East 201.44 feet to
an angle, (5) South 71 degrees 19 minutes 21 seconds East 372.06 feet to an
angle, (6) South 49 degrees 01 minutes 22 seconds East 320.49 feet to an an le,
(7) South 67 degrees 00 minutes 05 seconds East 373.88 feet to an angle, (8)
South 45 degrees 50 minutes 20 seconds East 271.10 feet to an angle, (9) South
76 degrees 14 minutes 20 seconds East 96.24 feet to a point in the line of the
Consolidated Rail Corporation, now or formerly and also being the most south
easterly comer of parcel herein described, thence along said lands of the
Consolidated Rail Corporation, now or formerly the following four courses and
distances: (1) South 73 degrees 36 minutes 12 seconds West 736.65 feet to an
angle, (2) South 73 degrees 02 minutes West 199.7 feet to a found pin, (3) South
70 degrees 20 minutes West 515.00 feet to a found pin, and (4) South 73 degrees
10 minutes West 881.8 feet to a found pin in the line of lands of Agway, Inc.
the southernmost point of the herein described premises; thence along Agway,
Inc. and along lands of James Ennis, North 00 degrees 17 minutes West 1188.03 to
a point at an angle, thence along said lands of Ennis the following two courses
and distances: (1) South 89 degrees 43 minutes West 25.56 feet to an angle, and
(2) North 00 degrees 17 minutes West 150.34 feet to a point for a comer, thence
along lands of Steven W. Moore, et al, commonly known as Moore's Auto Sales,
North 00 degrees 06 minutes 15 seconds West 183.80 feet to the point and place
of beginning. Containing 48.00 acres of land, according to a Survey Map No.
R-3748-5A of the premises by George K. Jones and Associates, Charles W. Woodard,
R.S. most recently revised March 20, 2000

<PAGE>
                                                                  [Route 6 Mall]

                                   SCHEDULE A

         ALL THAT CERTAIN piece or parcel of land with buildings and
improvements thereon situate in Texas Township, Wayne County, Pennsylvania,
bounded and described as follows:

         BEGINNING at a point the intersection of the centerline of U.S. Route
#6 and the westerly line of a parcel of land conveyed to the Honesdale Mall
Associates as recorded in Wayne County Deed Book 388 Page 788;

thence, along, the westerly line of Honesdale Mall Associates, the following
two courses and distances:

1.)      South zero degrees, thirty-five minutes, fifty-six seconds West (S 00
         35' 56" W), four-hundred fifty-nine and thirty-six one-hundredths feet
         (459.36') to a point;

2.)      South twelve degrees, twelve minutes, seventeen second East (S 12' 12'
         17" E), five-hundred thirty and twelve one-hundredths feet (530.12')
         to a point in the northerly bank of the Lackawaxen River;

thence, along the said northerly bank of the Lackawaxen River, the following
eight courses and distances:

1.)      South sixty-eight degrees, forty-two minutes, fifty-four seconds West
         (S 680 42' 54" W), fifty-three and forty-two one-hundredths feet
         (53.42') to a point;

2.)      North eighty-eight degrees, twenty-four minutes, forty-five seconds
         west (N 88' 24'45" W), one-hundred two and sixteen one-hundredths feet
         (102.16') to a point;

3.)      South forty degrees, seven minutes, thirteen seconds West (S 40' 07'
         13" W), two-hundred thirty-one and forty-two one-hundredths feet
         (231.42') to a point;

4.)      South eighty-five degrees, thirty-five minutes, eleven seconds West (S
         85' 3 5' 11 " W) one hundred thirty seven and forty-three
         one-hundredths feet (137.43') to a point;

5.)      South eighty-nine degrees, fifty-eight minutes, fifty-nine seconds west
         (S 891 58' 59" W), one-hundred eighteen and seventy-one hundredths feet
         (1187) to a point;

6.)      North sixty-six degrees, fourteen minutes; twenty-five seconds West (N
         660 14'25" W), three-hundred twenty-six and ninety-eight one-hundredths
         feet (326.98') to a point;

7.)      North sixty-eight degrees, fifty-one minutes, thirty-seven seconds West
         (N 68' 5 1' 37" W), one-hundred three and twenty-seven one-hundredths
         feet (103.27') to a point;

8.)      North sixty-six degrees, thirty-one minutes, twenty-one seconds West (N
         66* 3 11 21 " W), three-hundred thirty-two and sixteen one-hundredths
         feet (332.16') to a point;

thence, along lands of Dan Weidner the following five courses and distances:,

<PAGE>

1.)      North twelve degrees, twenty-four minutes, fifty-two seconds west (N
         12' 24'52" W), four-hundred thirty-one and fifty-three one-hundredths
         feet (431.53') to a point;

2.)      North thirty-five degrees, thirteen minutes, ten seconds East (N 35'
         13' 10" E), forty-eight and forty-two one-hundredths feet (48.42') to
         a point; ,

3.)      South eighty-six degrees, zero minutes; forty-five seconds East (S 86'
         00'45" E), one-hundred fifty-five and eighty one-hundredths feet (15
         5.80') to a point;

4.)      North eighty-six degrees, two minutes, forty-eight seconds East (N 86'
         02'48" B), one-hundred ninety-nine and three one-hundredths feet
         (199.03') to a point;

5.)      North ten degrees, fifty-two minutes, fifteen seconds East (N 10' 52'
         15" E), ninety-nine and eighty-nine one-hundredths feet (99.89) to the
         point in the centerline of Old Willow Road;.

thence, continuing along, the centerline of Old Willow Road, the following seven
courses and distances:

1.)      North eighty-three degrees, thirty minutes, five seconds East (N 83'
         30' 05" E) one-hundred eighteen and ninety-two one-hundredths feet
         (118.92') to a point;

2.)      North seventy-nine degrees, forty- seven minutes, fifty-five seconds
         East (N 79' 47'55" E) , fifty-three and twenty-one one-hundredths feet
         (53.2 1') to a point;

3.)      North seventy-one degrees, twenty-one minutes, forty-six seconds East
         (N 710 21'46" E), one-hundred thirty-four and ninety-six one-hundredths
         feet (134.96') to a point;

4.)      North sixty-three degrees, fifty-nine minutes, twenty-four seconds East
         (N 63' 59'24" E), one-hundred fifty-nine and ninety-one one-feet
         (159.9 1') to a point;

5.)      North sixty-one degrees, fifty-five minutes, thirteen seconds East (N
         61' 55' 13" E), eighty-five and fifty-one one hundredths feet (85.5
         1') to A point;

6.)      North fifty-seven degrees, twenty-two minutes, thirteen seconds East (N
         57' 22'20" E) one-hundred two and seventy-two one-hundredths feet
         (102.72') to a point;

         North fifty-four degrees, one minute, fifty-four seconds East (v 54'
Oil S4" E), one-hundred four and forty-nine one-hundredths feet (104.49') to a
point being the intersection of the centerline of Old Willow Road and the
centerline of U.S. Route 0;

thence, along the centerline of said U.S. Route 4&, North eighty degrees, forty
Minutes, eighteen seconds East (N 80* 40' 18" E) one-hundred fifty-five and
twenty-six once-hundredths feet (155.26') to the point of beginning for lands
descried herein.

         Together with the rights granted in the Shopping Center Reciprocal
Easement and Operation Agreement between Mark Twenty Realty, Inc. Mark Centers
Limited Partnership, a Delaware Limited Partnership Marvin Slomowitz
Association, a Pennsylvania Limited Partnership, Mark HM

<PAGE>

Association, a Pennsylvania Limited Partnership and K-Mart, a Michigan
Corporation dated May 28, 1994 and recorded May 25, 1994 in Wayne County Record
Book 936 Page 261 et seq.

                              MARGARET DAVIS PARCEL

         ALL that certain piece or parcel of land situate, lying, and being in
the Township of Texas, County of Wayne, and State of Pennsylvania, bounded and
described as follows:

         BEGINNING at a point being the intersection or the northwesterly right
of way line of Old Willow Avenue and the southwesterly right-of-way line of
U.S. Route 46;

thence, along the said northwesterly right of way line of Old Willow Avenue the
following two courses and distances:

1.)      South fifty-seven degrees, twenty-two minutes, twenty seconds West (S
         570 22'20 W), eighty-nine and eighteen one-hundredths feet (89.18') to
         a point;

2.)      South sixty-one degrees, fifty-five minutes, thirteen seconds West (s
         61" 55' 13" W), seventy-three and eighty-four one-hundredths feet
         (73.84') to a point; thence, along lands as conveyed to George Szezorak
         in Wayne County Deed Book 377, Page 436, North two degrees, three
         minutes, forty-six seconds East (N 02' 03'46" E), sixty-one and
         sixty-two one-hundredths feet (61:62') to a point in the aforesaid
         southwesterly right of way line of U.S. Route 46;

thence, along the southwesterly right of way line of said R.S. Route #6, North
eighty-one degrees, fourteen minutes, forty-two seconds East (N 811 14'42" E),
one-hundred thirty-nine and sixty -six one hundredths feet (139.66') to the
point of beginning for lands described herein.

         CONTAINING an area of 4,487.8 square fee of land and being the same
premises as conveyed by Margaret Davis to Mark Centers Limited Partnership by
Deed dated November 18, 1994 and recorded in Wayne County Deed Book 990, Page
108.

         BEING the same premises conveyed from Marvin S. Slomowitz Associates to
Mark Centers Limited Partnership by Deed dated may 11, 1994 and recorded in
record Book 93 1, Page 247.

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