Document:

LOAN AGREEMENT

                                     between

                               1290 PARTNERS, L.P.
                                   as Borrower

                            The Lenders Party Hereto
                                   as Lenders

                                       and

                      GENERAL ELECTRIC CAPITAL CORPORATION
                             as Administrative Agent

                          Date: As of December 13, 1999

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                                TABLE OF CONTENTS
                                                                        Page No.

ARTICLE 1 CERTAIN DEFINITIONS.................................................1

Section 1.1.     Certain Definitions..........................................1
Section 1.2.     Types of Loans..............................................18

ARTICLE 2 LOAN TERMS.........................................................18

Section 2.1.     The Commitments, Loans and Notes............................18
Section 2.2.     Interest Rate; Late Charges.................................19
Section 2.3.     Terms of Payment............................................20
Section 2.4.     Security....................................................22
Section 2.5.     Reserved....................................................23
Section 2.6.     Payments; Pro Rata Treatment; Etc...........................23
Section 2.7.     Yield Protection; Etc.......................................26
Section 2.8.     Interest Rate Guaranty Reimbursement........................31
Section 2.9.     Agency Fee..................................................32

ARTICLE 3 INSURANCE, CONDEMNATION, AND IMPOUNDS..............................32

Section 3.1.     Insurance...................................................32
Section 3.2.     Use and Application of Insurance Proceeds...................34
Section 3.3.     Condemnation Awards.........................................35
Section 3.4.     Impounds....................................................35
Section 3.5.     Pledge and Grant of Security Interest.......................36
Section 3.6.     Lockbox Account.............................................37
Section 3.7.     Cash Management Account.....................................38
Section 3.8.     Payments Received Under the Cash Management Agreement.......40
Section 3.9.     Security Deposit Reserve Account............................41

ARTICLE 4 ENVIRONMENTAL MATTERS..............................................41

Section 4.1.     Certain Definitions.........................................41
Section 4.2.     Representations and Warranties on Environmental Matters.....42
Section 4.3.     Covenants on Environmental Matters..........................42
Section 4.4.     Allocation of Risks and Indemnity...........................43
Section 4.5.     No Waiver...................................................44

ARTICLE 5 LEASING MATTERS....................................................44

Section 5.1.     Representations and Warranties on Leases....................44
Section 5.2.     Standard Lease Form; Approval Rights........................44
Section 5.3.     Covenants...................................................45
Section 5.4.     Tenant Estoppels............................................46

ARTICLE 6 REPRESENTATIONS AND WARRANTIES.....................................46

Section 6.1.     Organization and Power......................................46
Section 6.2.     Validity of Loan Documents..................................46
Section 6.3.     Liabilities; Litigation.....................................47
Section 6.4.     Taxes and Assessments.......................................47
Section 6.5.     Other Agreements; Defaults..................................47
Section 6.6.     Compliance with Law.........................................47
Section 6.7.     Location of Borrower........................................48
Section 6.8.     ERISA.......................................................48
Section 6.9.     Margin Stock................................................48
Section 6.10.    Tax Filings.................................................48
Section 6.11.    Solvency....................................................48
Section 6.12.    Full and Accurate Disclosure................................49
Section 6.13.    Single Purpose Entity.......................................49
Section 6.14.    Management Agreement........................................49
Section 6.15.    Year 2000 Compliance........................................49
Section 6.16.    No Conflicts................................................49
Section 6.17.    Title.......................................................50
Section 6.18.    Use of Project..............................................50
Section 6.19.    Flood Zone..................................................50
Section 6.20.    Insurance...................................................50
Section 6.21.    Certificate of Occupancy; Licenses..........................50
Section 6.22     Physical Condition..........................................50
Section 6.22     Boundaries..................................................51
Section 6.24     Survey......................................................51
Section 6.25     Filing and Recording Taxes..................................51
Section 6.26     Investment Company Act......................................51
Section 6.27     Interest Rate Hedge Agreement...............................51

ARTICLE 7 FINANCIAL REPORTING................................................52

Section 7.1      Financial Statements........................................52
Section 7.3.     Other Information...........................................53
Section 7.4.     Annual Budget...............................................53
Section 7.5.     Audits......................................................54

ARTICLE 8 COVENANTS 54

Section 8.1.     Due on Sale and Encumbrance; Transfers of Interests.........54
Section 8.2.     Taxes; Charges..............................................57
Section 8.3.     Control; Management.........................................57
Section 8.4.     Operation; Maintenance; Inspection..........................58
Section 8.5.     Taxes on Security...........................................58
Section 8.6.     Legal Existence; Name, Etc..................................59
Section 8.7.     Affiliate Transactions......................................59
Section 8.8.     Limitation on Other Debt....................................59
Section 8.9.     Further Assurances..........................................59
Section 8.10.    Estoppel Certificates.......................................59
Section 8.11.    Notice of Certain Events....................................60
Section 8.12.    Indemnification.............................................60
Section 8.13.    Payment For Labor and Materials.............................60
Section 8.14.    Alterations.................................................61
Section 8.15.    Handicapped Access..........................................61
Section 8.16     Interest Rate Protection Agreement..........................61

ARTICLE 9 EVENTS OF DEFAULT..................................................62

Section 9.1.     Payments....................................................62
Section 9.2.     Insurance...................................................63
Section 9.3.     Single Purpose Entity.......................................63
Section 9.4.     Taxes.......................................................63
Section 9.5.     Sale, Encumbrance, Etc......................................63
Section 9.6.     Representations and Warranties..............................63
Section 9.7.     Other Encumbrances..........................................63
Section 9.8.     Involuntary Bankruptcy or Other Proceeding..................63
Section 9.9.     Voluntary Petitions, Etc....................................63
Section 9.10.    Covenants...................................................64

ARTICLE 10 REMEDIES 64

Section 10.1.    Remedies - Insolvency Events................................64
Section 10.2.    Remedies - Other Events.....................................64
Section 10.3.    Lender's Right to Perform the Obligations...................64

ARTICLE 11 MISCELLANEOUS.....................................................65

Section 11.1.    Notices.....................................................65
Section 11.2.    Amendments, Waivers, Etc....................................66
Section 11.3.    Limitation on Interest......................................66
Section 11.4.    Invalid Provisions..........................................67
Section 11.5.    Reimbursement of Expenses...................................67
Section 11.6.    Approvals; Third Parties; Conditions........................68
Section 11.7.    Lenders and Administrative Agent Not in Control;
                    No Partnership.......................................... 68
Section 11.8.    Brokers.....................................................69
Section 11.9.    Time of the Essence.........................................69
Section 11.10.   Successors and Assigns; Secondary Market Transactions.......69
Section 11.11.   Renewal, Extension or Rearrangement.........................70
Section 11.12.   Waivers.....................................................70
Section 11.13.   Cumulative Rights...........................................70
Section 11.14.   Singular and Plural.........................................71
Section 11.15.   Phrases.....................................................71
Section 11.16.   Exhibits and Schedules......................................71
Section 11.17.   Titles of Articles, Sections and Subsections................71
Section 11.18.   Promotional Material........................................71
Section 11.19.   Survival....................................................71
Section 11.20.   WAIVER OF JURY TRIAL........................................72
Section 11.21.   Waiver of Punitive or Consequential Damages.................72
Section 11.22.   Governing Law...............................................72
Section 11.23.   Entire Agreement............................................73
Section 11.24.   Counterparts................................................74
Section 11.25.   Assignments and Participations..............................74

ARTICLE 12 LIMITATIONS ON LIABILITY..........................................76

Section 12.1.    Limitation on Liability.....................................76
Section 12.2.    Limitation on Liability of the Administrative Agent's
                    and the Lenders' Officers, Employees, etc..........      77

ARTICLE 13 THE ADMINISTRATIVE AGENT..........................................77

Section 13.1.    Appointment, Powers and Immunities..........................77
Section 13.2.    Reliance by Administrative Agent............................78
Section 13.3.    Defaults....................................................78
Section 13.4.    Rights as a Lender..........................................78
Section 13.5.    Standard of Care; Indemnification...........................78
Section 13.6.    Non-Reliance on Administrative Agent and Other Lenders......79
Section 13.7.    Failure to Act..............................................79
Section 13.8.    Resignation of Administrative Agent.........................80

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-v-

                         LIST OF EXHIBITS AND SCHEDULES

EXHIBIT A            -        LEGAL DESCRIPTION OF PROJECT
EXHIBIT B            -        FORM OF PAYMENT INSTRUCTION LETTER
EXHIBIT C            -        FORM OF NOTE
EXHIBIT D            -        FORM OF ASSIGNMENT AND ACCEPTANCE
EXHIBIT E            -        FORM OF INTEREST RATE PROTECTION PLEDGE
EXHIBIT F            -        FORM OF LOCKBOX AGREEMENT
EXHIBIT G            -        TERMS OF INTERCREDITOR AGREEMENT
EXHIBIT H            -        FORM OF INTEREST RATE GUARANTY
EXHIBIT I            -        INTEREST RATE PROTECTION AGREEMENT

SCHEDULE 1           -        COMMITMENTS
SCHEDULE 2.1         -        ADVANCE CONDITIONS
SCHEDULE 2.3(1)      -        INTEREST PAYMENT ACCOUNT
SCHEDULE 2.4(1)      -        CAPITAL IMPROVEMENTS RESERVE
SCHEDULE 2.4(2)      -        LEASING RESERVE
SCHEDULE 3.4         -        FORM OF TAX AND INSURANCE DISBURSEMENT REQUEST
SCHEDULE 3.9         -        FORM OF SECURITY DEPOSIT DISBURSEMENT REQUEST
SCHEDULE 5.1         -        EXCEPTIONS TO LEASE REPRESENTATIONS
SCHEDULE 6.3         -        LIABILITIES
SCHEDULE 8.7         -        AFFILIATE TRANSACTIONS

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                                 LOAN AGREEMENT

          This Loan Agreement (this  "Agreement") is entered into as of December
13, 1999 among 1290  PARTNERS,  L.P., a limited  partnership  duly organized and
validly existing under the laws of the State of Delaware  ("Borrower");  each of
the lenders that is a signatory hereto identified under the caption "LENDERS" on
the  signature  pages hereof and each lender that  becomes a "Lender"  after the
date  hereof  pursuant  to  Section  11.25(2)  (individually,  a  "Lender"  and,
collectively,  the "Lenders");  and GENERAL ELECTRIC CAPITAL CORPORATION,  a New
York  corporation,  as  administrative  agent for the Lenders (in such capacity,
together with its successors in such capacity, the "Administrative Agent").

                                   ARTICLE 1

                               CERTAIN DEFINITIONS

     Section 1.1. Certain Definitions.  As used herein, the following terms have
the meanings indicated:

          (1) "Access Laws" has the meaning assigned in Section 8.15.

          (2)  "Acceptable  Issuer"  shall mean a financial  institution  having
offices in New York,  New York whose long term unsecured  debt  obligations  are
rated at least "AA" or better by Standard & Poor's  Rating  Services (a division
of The  McGraw  Hill  Companies,  Inc.) (or the  equivalent  rating by any other
nationally  recognized  statistical  rating  agency)  and  otherwise  reasonably
satisfactory to the Administrative Agent.

          (3) "Account Pledge" means that certain Assignment,  Pledge,  Security
Agreement   and   Control,   dated  the  date  hereof,   between   Borrower  and
Administrative Agent (on behalf of the Lenders),  as the same may be modified or
amended from time to time.

          (4)  "Accounts"  means  the  Cash  Management  Account,  the  Tax  and
Insurance Escrow Account,  the Capital Improvements Reserve Account, the Leasing
Reserve Account, the Security Deposit Account and the Curtailment Account.

          (5) "Actual Debt Service Coverage Ratio" means, for the period of time
for which the calculation is being made (or, if no time period is specified, for
the twelve  (12) months  preceding  the date on which the  calculation  is being
made),  the  ratio of (a)  Actual  Net  Operating  Income  to (b) Debt  Service,
assuming for purposes of such calculation that the Contract Rate is equal to the
fixed rate of  interest  payable to the  Counterparty  under the  Interest  Rate
Protection  Agreement plus two (2%) percent per annum,  unless the Interest Rate
Protection  Agreement  is not then in effect,  in which case the  Contract  Rate
applicable  under Section 2.2 shall apply,  and making  appropriate  normalizing
adjustments  to address  the  payment by certain  tenants at the Project of real
estate tax escalations on a semi-annual  basis. The Actual Debt Service Coverage
Ratio shall be as  determined  by the  Administrative  Agent based upon the most
recent  reports  required to have been  submitted by Borrower  under Section 7.1
(or,  if no such  reports  have been

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so submitted,  such other information as Administrative Agent shall determine in
its sole discretion),  which determination shall be conclusive in the absence of
manifest error.

          (6) "Actual Net Operating  Income" means the amount by which Operating
Revenues exceeds Operating Expenses.

          (7) "Additional Costs" has the meaning assigned in Section 2.7(1)(a).

          (8) "Adjusted Debt Service  Coverage  Ratio" means,  for the period of
time for  which  the  calculation  is  being  made  (or,  if no time  period  is
specified,  for  the  twelve  (12)  months  preceding  the  date  on  which  the
calculation  is being made),  the ratio of (a) Adjusted Net Operating  Income to
(b) Debt Service,  assuming for purposes of such  calculation  that the Contract
Rate is equal to the fixed rate of interest  payable to the  Counterparty  under
the Interest Rate Protection  Agreement plus two (2%) percent per annum,  unless
the Interest Rate Protection  Agreement is not then in effect, in which case the
Contract  Rate  applicable  under  Section 2.2 shall apply.  The  Adjusted  Debt
Service Coverage Ratio shall be as determined by the Administrative  Agent based
upon the most recent  reports  required to have been submitted by Borrower under
Section  7.1  (or,  if no such  reports  have  been  so  submitted,  such  other
information as  Administrative  Agent shall  determine in its sole  discretion),
which determination shall be conclusive in the absence of manifest error.

          (9)  "Adjusted  Libor Rate"  means,  for any  Interest  Period for any
Eurodollar Loan, a rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%)  determined  by the  Administrative  Agent to be equal to the Libor
Base Rate for such Interest  Period  divided by 1 minus the Reserve  Requirement
(if any) for such Interest Period.

          (10)  "Adjusted  Net  Operating  Income"  means  the  amount  by which
Adjusted Operating Revenues exceeds Adjusted Operating Expenses.

          (11) "Adjusted  Operating  Expenses"  means, as of any given date, all
Operating Expenses for the twelve (12) full calendar months preceding such date,
as determined and adjusted by Administrative  Agent in accordance with its audit
policies  and  procedures  consistent  with,  and similar in  substance  to, the
policies and procedures used in connection with the original underwriting of the
Loan including,  without limitation,  adjustments to reflect (a) management fees
equal to the  greater  of (i) actual  management  fees  (including  the fair and
equitable  portion of  compensation  paid to off-site  employees  of the Manager
working on matters  relating to the Project) and (ii) 3% of Operating  Revenues,
(b) capital  repair  expenditures  equal to $0.25 per  rentable  square foot per
annum and (c) other known changes in Operating Expenses.

          (12) "Adjusted  Operating  Revenues"  means, as of any given date, all
Operating  Revenues for the twelve (12) full calendar months preceding such date
(except in the case of fixed base rent payable under leases,  where such amounts
shall be determined based upon the annualized fixed base rent payable during the
immediately  preceding  calendar month under all leases at the Project which are
not then in default),  as  determined  and adjusted by  Administrative  Agent in
accordance with its audit policies and procedures  consistent  with, and similar
in  substance  to, the  policies  and  procedures  used in  connection  with the
original   underwriting  of  the  Loan,  including,   without  limitation,   (a)
adjustments to reflect occupancy based on the lesser of

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(i) actual  occupancy  and (ii) 95%  occupancy  and (b) the  inclusion of rental
payments  for  executed  leases  then  subject  to a free  rent or other  rental
abatement  period (if applicable) as if such payments were being made,  provided
the lease has been  approved  by  Administrative  Agent and the tenant is not in
default hereunder.

          (13) "Advance Date" has the meaning assigned in Section 2.6(3).

          (14)  "Affiliate"  means (a) any  corporation in which Borrower or any
partner, shareholder, director, officer, member, or manager of Borrower directly
or indirectly  owns or controls  more than ten percent  (10%) of the  beneficial
interest,  (b) any partnership,  joint venture or limited  liability  company in
which  Borrower or any  partner,  shareholder,  director,  officer,  member,  or
manager of Borrower  is a partner,  joint  venturer or member,  (c) any trust in
which Borrower or any partner, shareholder, director, officer, member or manager
of  Borrower  is a trustee or  beneficiary,  (d) any entity of any type which is
directly  or  indirectly  owned  or  controlled  by  Borrower  or  any  partner,
shareholder,  director, officer, member or manager of Borrower, (e) any partner,
shareholder, director, officer, member, manager or employee of Borrower, (f) any
Person  related by birth,  adoption  or marriage  to any  partner,  shareholder,
director, officer, member, manager, or employee of Borrower, or (g) any Borrower
Party.

          (15)  "Agency  Fee" means the agency fee agreed to by Borrower and the
Administrative Agent pursuant to the Fee Letter.

          (16)  "Agreement"  means this Loan Agreement,  as amended from time to
time.

          (17) "Alternate Base Rate" means,  for any day, a rate per annum equal
to the Prime Rate in effect for such day plus seventy-five one-hundredths of one
percent (0.75%) per annum.

          (18)  "Alternate  Base Rate Loans"  means Loans that bear  interest at
rates based upon the Alternate Base Rate.

          (19)  "Applicable  Lending Office" means, for each Lender and for each
Type of Loan,  the  "Lending  Office" of such Lender (or of an affiliate of such
Lender)  designated  for such  Type of Loan on the  respective  signature  pages
hereof or such other  office of such Lender (or of an  affiliate of such Lender)
as such Lender may from time to time specify to the Administrative Agent and the
Borrower  as the  office  by which  its  Loans  of such  Type are to be made and
maintained.

          (20)  "Approved  Expenses"  means,  during any  Trigger  Period,  such
Operating  Expenses as shall have been set forth in the Approved  Annual  Budget
for the period in question,  together  with any other  reasonable  and customary
Operating  Expenses and extraordinary  Operating  Expenses not set forth in such
Approved  Annual  Budget which  Administrative  Agent shall have  approved of in
writing in its sole but reasonable discretion.

          (21) "Appraisal"  means an appraisal of the Project prepared by an MAI
appraiser selected by or otherwise  satisfactory to the Administrative  Agent in
its sole  discretion,  which appraisal must also (a) satisfy the requirements of
Title 11 of the Financial  Institution  Reform,  Recovery and Enforcement Act of
1989 and the regulations  promulgated  thereunder

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(including the appraiser with respect  thereto) and (b) be otherwise in form and
substance satisfactory to the Administrative Agent.

          (22) "Asset Management  Agreement" means that certain Asset Management
Agreement, dated as of October 10, 1996, between Asset Manager and the REIT with
respect to the asset  management of the Project by the Asset  Manager,  together
with any asset management  agreements entered into with future asset managers in
accordance with the terms of this Agreement.

          (23) "Asset  Manager"  means 970  Management,  LLC, a New York limited
liability company, which is initially the asset manager of the Project under the
Asset Management Agreement, together with any successor asset managers appointed
for the Project in accordance with the terms of this Agreement.

          (24)  "Asset  Manager   Comfort  Letter"  means  that  certain  letter
agreement,  dated the date hereof,  among the Administrative Agent (on behalf of
the  Lenders),  the REIT and the Asset  Manager,  as the same may be modified or
amended from time to time.

          (25)  "Assignment and Acceptance"  means an Assignment and Acceptance,
duly executed by the parties  thereto,  in  substantially  the form of Exhibit D
hereto and consented to by the  Administrative  Agent in accordance with Section
11.25(2).

          (26)  "Assignment  of Rents and Leases" means the  Assignment of Rents
and Leases, executed by Borrower for the benefit of the Administrative Agent (on
behalf of the Lenders), and pertaining to leases of space in the Project, as the
same may be modified or amended from time to time.

          (27)  "Basle  Accord"  means  the  proposals  for  risk-based  capital
framework   described  by  the  Basle  Committee  on  Banking   Regulations  and
Supervisory  Practices  in its  paper  entitled  "International  Convergence  of
Capital Measurement and Capital Standards" dated July 1988, as amended, modified
and supplemented and in effect from time to time or any replacement thereof.

          (28) "Borrower Account" has the meaning assigned in Section 3.6.

          (29) "Borrower  Party" means any general partner in Borrower,  and any
general partner in any partnership that is a general partner in Borrower, at any
level.

          (30) "Business Day" means (a) any day other than a Saturday, a Sunday,
or other day on which commercial banks located in the New York City , Frankfurt,
Germany and London,  England are  authorized or required by law to remain closed
and (b) in connection  with a borrowing of, a payment or prepayment of principal
of or  interest  on, a  Conversion  of or into,  or an  Interest  Period  for, a
Eurodollar  Loan or a notice by the Borrower with respect to any such borrowing,
payment,  prepayment or Conversion, the term "Business Day" shall also exclude a
day on which banks are not open for  dealings  in Dollar  deposits in the London
interbank market.

          (31) "Capital  Improvements  Reserve Account" has the meaning assigned
in Schedule 2.4(1).

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          (32) "Cash  Management  Account"  has the meaning  assigned in Section
3.7.

          (33) "Cash on Cash Return" means the ratio, expressed as a percentage,
of (a) annualized Adjusted Net Operating Income to (b) the outstanding principal
balance of the Loans.

          (34) "Code" means the Internal Revenue Code of 1986, as amended.

          (35)  "Commitment"  means,  as to each Lender,  the obligation of such
Lender to make a Loan in a principal  amount up to but not  exceeding the amount
set  opposite  the  name  of  such  Lender  on  Schedule  1  under  the  caption
"Commitment"  or, in the case of a Person that  becomes a Lender  pursuant to an
assignment  permitted  under Section  11.25(2),  as specified in the  respective
instrument of  assignment  pursuant to which such  assignment  is effected.  The
original aggregate principal amount of the Commitments is $425,000,000.

          (36) "Consumer Price Index" means the "Consumer Price Index -- For all
Items for the New  York-Northern  New Jersey  Area  (1982-1984=100)",  published
monthly in the "Monthly  Labor Review" of the Bureau of Labor  Statistics of the
United States Department of Labor. If at any time the Consumer Price Index is no
longer  available,  then  the  term  "Consumer  Price  Index"  shall be an index
selected by Administrative Agent which, in the opinion of Administrative  Agent,
is comparable to the Consumer Price Index.

          (37)  "Continue"   "Continuation"   and   "Continued"   refer  to  the
continuation  pursuant to Section  2.2 of a  Eurodollar  Loan from one  Interest
Period to the next Interest Period for such Loan.

          (38) "Contract Rate" has the meaning assigned in Article 2.

          (39)  "Counterparty"  shall mean Morgan Stanley  Derivative  Products,
Inc.  and any  substitute  or  successor  counterparty  having a  credit  rating
satisfactory to, and otherwise approved by, the Administrative Agent in its sole
discretion.

          (40)  "Convert"  "Conversion"  and  "Converted"  refer to a conversion
pursuant to the terms of this  Agreement  of one Type of Loans into another Type
of Loans,  which may be  accompanied  by the  transfer  by a Lender (at its sole
discretion) of a Loan from one Applicable Lending Office to another.

          (41) "Curtailment Account" has the meaning assigned in Schedule 3.7.

          (42)  "Debt"  means,  for any  Person,  without  duplication:  (a) all
indebtedness of such Person for borrowed money, for amounts drawn under a letter
of credit,  or for the deferred purchase price of property for which such Person
or its assets is liable, (b) all unfunded amounts under a loan agreement, letter
of credit,  or other credit  facility for which such Person would be liable,  if
such amounts were advanced under the credit  facility,  (c) all amounts required
to be paid by such Person as a guaranteed payment to partners, members (or other
equity  holders) or a preferred or special  dividend,  including  any  mandatory
redemption  of shares or  interests,  (d) all  indebtedness  guaranteed  by such
Person, directly or indirectly, (e) all obligations under leases that constitute
capital leases for which such Person is liable,  and (f) all obligations of such

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<PAGE>

Person under interest rate swaps, caps, floors, collars and other interest hedge
agreements,  in  each  case  whether  such  Person  is  liable  contingently  or
otherwise,  as  obligor,   guarantor  or  otherwise,  or  in  respect  of  which
obligations such Person otherwise assures a creditor against loss.

          (43) "Debt  Service"  means the aggregate  interest and other payments
due under the Loans for the period of time for which  calculated,  but excluding
(a) payment of Net Cash Flow applied to  reduction of principal  and (b) escrows
or reserves required by the Administrative  Agent. In addition to the foregoing,
for purposes of determining  whether a Mezzanine Loan will be permitted (as more
particularly  provided  in Section  8.1(2)),  Debt  Service  shall  include  the
aggregate interest, principal and other payments due under any other outstanding
permitted Debt relating to the Project approved by the Administrative  Agent for
the period of time for which calculated  (including actual or pro-forma payments
due under the Mezzanine Loan).

          (44)  "Default  Rate"  means  the  lesser of (a) the  maximum  rate of
interest  allowed by  applicable  law,  and (b) five  percent  (5%) per annum in
excess of (i) with respect to Alternate Base Rate Loans, the Alternate Base Rate
as in effect from time to time or (ii) with  respect to  Eurodollar  Loans,  the
respective Contract Rate for such Eurodollar Loan.

          (45)  "Depository  Bank" means The Chase  Manhattan Bank and any other
financial  institution  approved by the  Administrative  Agent in writing in its
discretion.

          (46)  "Dollars"  and "$" means  lawful  money of the United  States of
America.

          (47) "Environmental Laws" has the meaning assigned in Article 4.

(48) "Eurodollar Loans" means Loans that bear interest at rates based on rates
referred to in the definition of "Libor Base Rate".

          (49) "Event of Default" has the meaning assigned in Article 9.

          (50) "Extension Option" has the meaning assigned in Section 2.3(4).

          (51)  "Federal  Funds  Rate"  means,  for any day,  the rate per annum
(rounded  upwards,  if  necessary,  to the  nearest  1/100  of 1%)  equal to the
weighted  average of the rates on  overnight  Federal  funds  transactions  with
members of the Federal  Reserve System arranged by Federal funds brokers on such
day, as  published  by the Federal  Reserve Bank of New York on the Business Day
next succeeding such day, provided that (a) if the day for which such rate is to
be  determined  is not a Business Day, the Federal Funds Rate for such day shall
be such  rate on such  transactions  on the next  preceding  Business  Day as so
published  on the next  succeeding  Business  Day and (b) if such rate is not so
published  for any Business  Day, the Federal  Funds Rate for such  Business Day
shall be the average rate charged to Bankers  Trust Company on such Business Day
on such  transactions as determined by the  Administrative  Agent, or such other
commercial  bank with  deposits  exceeding  $1,000,000,000  as  selected  by the
Administrative Agent.

                                       6
<PAGE>

          (52) "Fee Letter" means the letter  agreement,  dated the date hereof,
between the Borrower and the  Administrative  Agent with respect to certain fees
payable by Borrower in connection with the Loans, as the same may be modified or
amended from time to time.

          (53) "GAAP" means generally accepted  accounting  principles set forth
in the opinions and  pronouncements  of the  American  Principles  Board and the
American   Institute  of  Certified   Public   Accountants  and  statements  and
pronouncements  of the Financial  Accounting  Standards  Board (or agencies with
similar  functions of  comparable  stature and authority  within the  accounting
profession), or in such other statements by such entity as may be in general use
by  significant  segments of the United  States  accounting  profession,  to the
extent such principles are applicable to the facts and circumstances on the date
of determination, in all cases consistently applied.

          (54) "GECC" means General Electric Capital Corporation.

          (55) "Hazardous Materials" has the meaning assigned in Article 4.

          (56)  "Impound  Account"  has the meaning  assigned  in Schedule  3.4.

          (57)  "Intercreditor   Agreement"  means  an  intercreditor  agreement
between Administrative Agent (on behalf of the Lenders) and the Mezzanine Lender
incorporating  the terms and conditions  set forth in Exhibit G attached  hereto
and otherwise reasonably acceptable to the Administrative Agent.

          (58) "Interest  Period" means,  for any Eurodollar  Loan,  each period
commencing on the date such  Eurodollar Loan is made or Converted from a Loan of
another  Type or (in the  event  of a  Continuation)  the  last  day of the next
preceding Interest Period for such Loan, and ending on the first Business Day of
the next calendar  month;  provided that, if any Interest Period would otherwise
end after the Maturity  Date,  such Loan shall not be Continued as, or Converted
into, a Eurodollar  Loan and shall bear interest at the Alternate  Base Rate. In
no event  may  Borrower  have  more  than one  Interest  Period  in  respect  of
Eurodollar Loans from all Lenders  outstanding at any one time and to the extent
any Loan  does not  qualify  for such  Interest  Period,  such loan  shall  bear
interest at the Alternative Base Rate.

          (59) "Interest Rate Guaranty" means a guaranty agreement or agreements
in the form of Exhibit H attached hereto made by GECC with respect to Borrower's
obligations  under the Interest  Rate  Protection  Agreement,  together with all
amendments, modifications or supplements thereto.

          (60) "Interest Rate  Protection  Agreement"  shall mean (a) during the
initial  term of the Loans,  that  certain  ISDA Master  Agreement,  dated as of
December 13, 1999,  between  Borrower and the  Counterparty,  together  with the
Schedule thereto and a trade confirmation thereunder,  each dated as of the date
of the  aforementioned  ISDA Master Agreement,  with respect to an interest rate
swap  transaction  in the notional  amount of  $425,000,000,  and (b) during any
extension period, if Borrower duly exercises the Extension Option, such interest
rate swap, cap or collar agreement or similar  arrangement  between Borrower and
one or  more  financial  institutions  acceptable  to the  Administrative  Agent
providing for the transfer or mitigation of interest  risks either  generally or
under specific conditions in a manner satisfactory

                                       7
<PAGE>

to the  Administrative  Agent,  the  obligations of Borrower under the agreement
specified in the foregoing  clause (a) being  guaranteed by GECC pursuant to the
Interest Rate Guaranty.

          (61)  "Interest  Rate  Protection  Pledge"  shall mean an  Assignment,
Pledge and Security  Agreement in the form of Exhibit E attached  hereto,  to be
executed, dated and delivered by Borrower to the Administrative Agent (on behalf
of the  Lenders)  at any time  Borrower  elects to enter into an  Interest  Rate
Protection  Agreement,  covering  Borrower's right, title and interest in and to
any such Interest Rate Protection  Agreement,  as the same may from time to time
hereafter be modified, supplemented or amended.

          (62) "Leasing Reserve" has the meaning assigned in Schedule 2.4(2).

          (63) "Leasing  Reserve  Account" has the meaning  assigned in Schedule
2.4(2).

          (64) "Letter of Credit" has the meaning assigned in Section 3.7(3).

          (65)  "Libor  Base  Rate"  means,  for  any  Interest  Period  for any
Eurodollar  Loan,  the rate per  annum  appearing  on Page 3750 of the Dow Jones
Markets  (Telerate)  Service (or on any  successor  or  substitute  page of such
Service,  or any successor to or substitute  for such  Service,  providing  rate
quotations  comparable to those currently provided on such page of such Service,
as  determined  by the  Administrative  Agent from time to time for  purposes of
providing  quotations of interest  rates  applicable  to Dollar  deposits in the
London interbank market) at approximately 11:00 a.m. London time on the date two
Business Days prior to the first day of such Interest Period as the rate for the
offering of Dollar deposits  having a term  comparable to such Interest  Period,
provided  that if such rate does not appear on such page,  or if such page shall
cease to be publicly available, or if the information contained on such page, in
the reasonable  judgment of the  Administrative  Agent shall cease accurately to
reflect  the rate  offered by leading  banks in the London  interbank  market as
reported by any publicly available source of similar market data selected by the
Administrative  Agent,  the Libor Base Rate for such  Interest  Period  shall be
determined   from  such   substitute   financial   reporting   service   as  the
Administrative Agent in its discretion shall determine.

          (66) "Lien" means any lien,  mortgage,  encumbrance  or other  similar
interest,  or claim thereof, in the Project securing an obligation owed to, or a
claim by, any Person other than the owner of the Project,  whether such interest
is based on common  law,  statute or  contract,  including  the lien or security
interest  arising  from a deed  of  trust,  mortgage,  assignment,  encumbrance,
pledge,  security  agreement,  conditional  sale or  trust  receipt  or a lease,
consignment  or bailment for security  purposes.  The term "Lien" shall  include
reservations,  exceptions,  encroachments,  easements, rights of way, covenants,
conditions,  restrictions,  leases and other title  exceptions and  encumbrances
affecting the Project.

          (67) "Limiting  Regulation" means any law or regulation of the Federal
Republic of Germany, or any interpretation,  directive or request under any such
law or  regulation  (whether  or not having the force of law and  whether or not
failure to comply  therewith  would be unlawful) by any court or governmental or
monetary authority charged with the interpretation or administration thereof, or
any internal bank policy  resulting  therefrom  (applicable to loans made

                                       8
<PAGE>

in the  United  States of  America)  which  would or could in any way  require a
Lender to have the approval right contained in Section 8.1(4).

          (68)  "Loans"  means the loans to be made by the  Lenders to  Borrower
under this  Agreement  and all other  amounts  evidenced  or secured by the Loan
Documents.

          (69) "Loan Documents"  means:  (a) this Agreement,  (b) the Notes, (c)
the Fee Letter, (d) any letter of credit provided to the Administrative Agent in
connection  with the Loan,  (e) the  Mortgage,  (f) the  Assignment of Rents and
Leases,  (f)  the  Subordination  of  Management  Agreement,   (h)  the  Lockbox
Agreement,  (i) the Interest Rate  Protection  Agreement,  (j) the Interest Rate
Protection  Pledge, (k) Uniform  Commercial Code financing  statements,  (l) the
Account Pledge,  (m) such  assignments of management  agreements,  contracts and
other rights as may be required under the  Commitment or otherwise  requested by
the Administrative Agent, (n) any Intercreditor Agreement, (o) the Asset Manager
Comfort  Letter,  (p) all other  documents  evidencing,  securing,  governing or
otherwise  pertaining  to the  Loans,  and  (q) all  amendments,  modifications,
renewals, substitutions and replacements of any of the foregoing.

          (70) "Loan Year" means the period between the date hereof and December
31, 2000 for the first Loan Year and the period between each succeeding  January
1st and December 31st until the Maturity Date.

          (71)  "Loan-to-Value  Ratio" means, as of the date such calculation is
being made, the ratio,  expressed as a percentage,  of (a) the then  outstanding
principal  balance  of the  Loans  to (b)  the "as is"  appraised  value  of the
Property as set forth in a current Appraisal of the Project.

          (72) "Lockbox Account" has the meaning set forth in Section 3.6.

          (73) "Lockbox Agreement" has the meaning set forth in Section 3.6.

          (74) "Lockbox Bank" has the meaning set forth in Section 3.6.

          (75) "Majority Lenders" means Lenders holding more than 66 2/3% of the
aggregate  outstanding  principal amount of the Loans or, if the Loans shall not
have been made, more than 66 2/3% of the Commitments.

          (76) "Major  Lease"  means any single  lease at the  Project  demising
25,000 or more square feet or any single lease at the Project (regardless of the
amount of square feet covered  thereby)  which,  in the aggregate with all other
space in the Project  leased to the same tenant or any affiliate  thereof during
the preceding six (6) month period, covers 40,000 or more square feet.

          (77) "Management  Agreement" means that certain Management and Leasing
Agreement,  dated as of October  10, 1996 and  modified  by certain  handwritten
changes to such  agreement made on or about December 2, 1999 in order to correct
a number of erroneous  references to 237 Park Avenue,  New York, New York as the
subject of such  agreement,  between  Manager and  Borrower  with respect to the
management  of  the  Project  by  the  Manager,  together

                                       9
<PAGE>

with any management  agreements  entered into with future Managers in accordance
with the terms of this Agreement.

          (78)  "Manager"  means  Tishman  Speyer  Properties,  L.P., a New York
limited  partnership,  which is initially  the  property  manager of the Project
under the Management  Agreement,  together with any successor  property managers
appointed for the Project in accordance with the terms of this Agreement.

          (79)  "Maturity  Date" means the earlier of (a)(i)  January 2, 2003 or
(ii) if the  Extension  Option  is duly  exercised,  January  2, 2004 or (b) any
earlier  date on which  all of the  Loans are  required  to be paid in full,  by
acceleration  or  otherwise,  under  this  Agreement  or any of the  other  Loan
Documents.

          (80) "Mezzanine  Lender" shall mean an institutional  mezzanine lender
(including,  without limitation,  mezzanine funds, real estate funds, commercial
banks,  savings and loan  associations,  pension  plans and pension  funds) with
assets  of  not  less  than  $1,000,000,000  and  net  worth  of not  less  than
$200,000,000 or otherwise approved by the Administrative  Agent on behalf of the
Lenders.

          (81) "Mezzanine Loan" shall have the meaning set forth in Section 8.1.

          (82) "Mortgage" means the Amended,  Restated and Consolidated Mortgage
and Security Agreement executed by Borrower in favor of the Administrative Agent
(on  behalf  of  the  Lenders),   covering  the  Project  and  any   amendments,
modifications,   renewals,   substitutions,   consolidations,   severances   and
replacements thereof.

          (83)  "Net Cash  Flow"  means,  for any  period,  the  amount by which
Operating  Revenues  exceed  the  sum  (without  duplication)  of (a)  Operating
Expenses,  (b) Debt Service,  (c) any actual payment into impounds,  escrows, or
reserves required by the Administrative  Agent (including,  without  limitation,
payments into the Tax and Insurance  Escrow  Account,  the Capital  Improvements
Reserve Account and the Leasing Reserve Account),  except to the extent included
within the definition of Operating  Expenses,  and (d) tenant improvement costs,
leasing  commissions  and capital  improvement  costs  actually paid by Borrower
during such period under leases approved (if necessary) by Administrative Agent.

          (84)  "Notes"  means the  promissory  notes of even date  herewith  as
provided  for  in  Section  2.1(4)  and  all  promissory   notes   delivered  in
substitution or exchange therefor, in each case as the same may be consolidated,
replaced, severed, modified, amended or extended from time to time.

          (85) "Operating  Expenses" means all reasonable and necessary expenses
of operating the Project in the ordinary  course of business  which are actually
paid by Borrower and which are directly  associated with and fairly allocable to
the Project for the  applicable  period,  including ad valorem real estate taxes
and assessments,  insurance  premiums,  regularly scheduled tax impounds paid to
the  Administrative  Agent,   maintenance  costs,  management  fees  and  costs,
accounting,  legal, and other  professional fees, fees relating to environmental
and Net Cash Flow, Actual Net Operating Income and Adjusted Net Operating Income
audits, and other expenses incurred by the  Administrative  Agent and reimbursed
by Borrower under this Agreement and the

                                       10
<PAGE>

other Loan  Documents,  deposits to the Tax and Insurance  Escrow  Account,  the
Capital Improvement Reserve Account,  wages,  salaries,  and personnel expenses,
but excluding Debt Service, capital expenditures,  any of the foregoing expenses
which are paid from deposits to cash reserves  previously  included as Operating
Expenses,  any payment or expense for which  Borrower was or is to be reimbursed
from proceeds of the Loans or insurance or by any third party,  and any non-cash
charges such as  depreciation  and  amortization.  Any  management  fee or other
expense  payable to Borrower or to an Affiliate of Borrower shall be included as
an Operating Expense only with the Administrative  Agent's prior approval,  such
approval not to be unreasonably  withheld.  Operating Expenses shall not include
federal,  state or local  income  taxes or legal  and  other  professional  fees
unrelated to the operation of the Project.

          (86)  "Operating  Revenues"  means all cash  receipts of Borrower from
operation  of the Project or otherwise  arising in respect of the Project  after
the date hereof which are properly  allocable to the Project for the  applicable
period,  including receipts from leases and parking agreements,  concession fees
and charges and other miscellaneous operating revenues,  proceeds from rental or
business interruption insurance, proceeds of any loans (other than the Loans and
any  refinancing of the Loans)  obtained by Borrower after the date hereof which
are secured by the Project (less only reasonable and customary expenses incurred
in procuring and closing such loan and actually paid to  individuals or entities
other than  Borrower or any  Affiliate  of Borrower  and  without  implying  any
consent  of the  Administrative  Agent  or any  Lender  to the  granting  of any
security  for any such loans),  withdrawals  from cash  reserves  (except to the
extent any  operating  expenses  paid  therewith  are  excluded  from  Operating
Expenses), but excluding security deposits and earnest money deposits until they
are forfeited by the  depositor,  advance  rentals until they are earned,  lease
buy-out payments made by tenants in connection with any surrender,  cancellation
or termination of their lease and proceeds from a sale or other disposition.

          (87) "Participant" has the meaning assigned in Section 11.25(3).

          (88) "Payment Date" has the meaning assigned in Section 2.3(1).

          (89) "Payor" has the meaning assigned in Section 2.6(3).

          (90)  "Permitted  Encumbrances"  has  the  meaning  set  forth  in the
Mortgage.

          (91) "Person" means any individual,  corporation,  partnership,  joint
venture,  association,  joint stock company,  trust,  trustee,  estate,  limited
liability company,  unincorporated  organization,  real estate investment trust,
government or any agency or political  subdivision thereof, or any other form of
entity.

          (92)  "Potential  Default"  means  the  occurrence  of  any  event  or
condition which, with the giving of notice,  the passage of time, or both, would
constitute an Event of Default.

          (93) "Prime Rate" means the highest prime rate (or base rate) reported
in the Money Rates  column or section of The Wall Street  Journal as the rate in
effect for corporate loans at large U.S. money center  commercial banks (whether
or not such rate has actually  been charged by any such bank) from time to time.
If The Wall Street  Journal  ceases  publication  of the Prime Rate,  the "Prime
Rate"  shall  mean the prime  rate (or base rate)  announced  by  Bankers  Trust
Company,  New York, New York (whether or not such rate has actually been charged
by

                                       11
<PAGE>

such bank). If such bank discontinues the practice of announcing the Prime Rate,
the "Prime  Rate" shall mean the prime or base rate  charged by a United  States
commercial  bank  with  deposits  exceeding   $1,000,000,000   selected  by  the
Administrative Agent to its most creditworthy large corporate borrowers.

          (94) "Project" means that certain 43 story office building  located at
1290 Avenue of the Americas,  New York,  New York,  and all related  facilities,
amenities,   fixtures,   and  personal   property  owned  by  Borrower  and  any
improvements now or hereafter located on the real property  described in Exhibit
A.

          (95) "Proposed Lender" has the meaning assigned in Section 2.7(7).

          (96) "Quarter"  means any one of the periods of time from January 1 to
March 31, from April 1 to June 30, from July 1 to September  30, or from October
1 to December 31.

          (97) "Refinancing" has the meaning assigned in Section 2.1(4)(e).

          (98)  "Refinancing   Lender"  has  the  meaning  assigned  in  Section
2.1(4)(e).

          (99) "Refinancing Note" has the meaning assigned in Section 2.1(4)(e).

          (100)  "Regulation A" means  Regulation A of the Board of Governors of
the Federal  Reserve System of the United States of America (or any  successor),
as the same may be modified and supplemented and in effect from time to time.

          (101)  "Regulation D" means  Regulation D of the Board of Governors of
the Federal  Reserve System of the United States of America (or any  successor),
as the same may be modified and supplemented and in effect from time to time.

          (102)  "Regulatory  Change"  means,  with  respect to any Lender,  any
change  after the date  hereof in Federal,  state or foreign law or  regulations
(including,  without  limitation,  Regulation D) or the adoption or making after
such date of any  interpretation,  directive  or request  applying to a class of
banks  including  such Lender of or under any  Federal,  state or foreign law or
regulations  (whether  or not having the force of law and whether or not failure
to comply  therewith would be unlawful) by any court or governmental or monetary
authority charged with the interpretation or administration thereof.

          (103) "REIT" means Metropolis Realty Trust, Inc.

          (104) "Requesting Lender" has the meaning assigned in Section 2.7(7).

          (105) "Required Payment" has the meaning assigned in Section 2.6(3).

          (106) "Reserve  Requirement"  means,  for any Interest  Period for any
Eurodollar Loan, the average maximum rate at which reserves (including,  without
limitation, any marginal, supplemental or emergency reserves) are required to be
maintained during such Interest Period under Regulation D by member banks of the
Federal Reserve System in New York City with deposits  exceeding  $1,000,000,000
against  "Eurocurrency  liabilities"  (as such  term is used in

                                       12
<PAGE>

Regulation  D).  Without  limiting  the  effect of the  foregoing,  the  Reserve
Requirement  shall include any other reserves  required to be maintained by such
member banks by reason of any Regulatory Change with respect to (i) any category
of liabilities that includes  deposits by reference to which the Eurodollar Base
Rate for any Interest  Period for any  Eurodollar  Loans is to be  determined as
provided  in the  definition  of  "Libor  Base  Rate"  or (ii) any  category  of
extensions of credit or other assets that includes Eurodollar Loans.

          (107)  "Secondary  Market  Transaction"  has the  meaning  assigned in
Section 11.10(2).

          (108) "Security Deposit Account" means a segregated account maintained
by  Borrower  (in the name of  Administrative  Agent as  secured  party)  at the
Depository Bank for the retention of cash security  deposits provided by tenants
under leases at the Project.

          (109)  "Single  Purpose  Entity"  shall  mean a  corporation,  limited
partnership  or limited  liability  company  which at all times on and after the
date hereof, unless otherwise approved in writing by the Administrative Agent:

               (a) is organized  solely for the purpose of one of the following:
     (a) acquiring, developing, owning, holding, selling, leasing, transferring,
     exchanging,   managing  and  operating  the  Project,  entering  into  this
     Agreement, refinancing the Project in connection with a permitted repayment
     of the Loans, and transacting any and all lawful business that is incident,
     necessary and appropriate to accomplish the foregoing; or (b) acting as the
     sole general partner of Borrower;

               (b) is not engaged and will not engage in any business  unrelated
     to (a) the acquisition,  development, ownership, management or operation of
     the Project or (b) acting as the sole general partner of the Borrower;

               (c) does not have and will not have any  assets  other than those
     related to (a) the Project or (b) its partnership interest in the Borrower;

               (d) except in connection  with the  dissolution of 237/1290 Lower
     Tier Associates, L.P., has not engaged, sought or consented to and will not
     engage in, seek or consent to any  dissolution,  winding  up,  liquidation,
     consolidation,  merger,  sale of all or  substantially  all of its  assets,
     transfer of partnership interests (if such entity is a general partner in a
     limited partnership (other than as expressly permitted in Section 8.1)), or
     any amendment of its articles of incorporation,  partnership certificate or
     partnership agreement (as applicable) with respect to the matters set forth
     in this Section;

               (e) if  such  entity  is (i) a  limited  liability  company,  has
     articles of  organization,  a certificate of formation  and/or an operating
     agreement,  as applicable,  (ii) a limited  partnership,  has a partnership
     certificate  and  partnership  agreement,  or  (iii) a  corporation,  has a
     certificate of  incorporation  or articles of  incorporation,  that in each
     case provide that such entity (a) will not  dissolve,  merge,  liquidate or
     consolidate;  (b) sell all or substantially all of its assets or the assets
     of any  other  entity  in  which  it has a  direct  or  indirect  legal  or
     beneficial  ownership  interest;  and  (c)  engage  in any  other  business
     activity,  other than as permitted pursuant to the Loan Documents, or amend
     its

                                       13
<PAGE>

     organizational  documents  with  respect to the  matters  set forth in this
     Section without the consent of the Administrative Agent in each case;

               (f) if such  entity  is a  limited  partnership,  has as its only
     general partner a Single Purpose Entity;

               (g) is and will remain solvent and pay its debts and  liabilities
     (including, as applicable, shared personnel and overhead expenses) from its
     assets as the same shall become due, and is  maintaining  and will maintain
     adequate  capital for the normal  obligations  reasonably  foreseeable in a
     business  of its  size  and  character  and in  light  of its  contemplated
     business operations;

               (h) has not  failed  and  will  not  fail to  correct  any  known
     misunderstanding regarding the separate identity of such entity;

               (i) has  maintained  and will  maintain its  accounts,  books and
     records  separate  from any other Person and will file its own tax returns,
     except to the extent that it is required to file  consolidated  tax returns
     by law;

               (j) has not commingled and will not commingle its funds or assets
     with those of any other Person (except as provided in the Loan Documents);

               (k) has held and will hold its assets in its own name;

               (l) has maintained and will maintain financial  statements,  that
     properly and accurately show its separate assets and liabilities and do not
     show the assets or liabilities  of any other Person,  and has not permitted
     and will not  permit  its  assets to be  listed as assets on the  financial
     statement of any other entity;

               (m) has  paid  and will  pay its own  liabilities  and  expenses,
     including,  but not limited to, the salaries of its own employees (if any),
     out of its own funds and assets,  and has  maintained  and will  maintain a
     sufficient  number  of  employees  in  light of its  contemplated  business
     operations;

               (n)  has  observed  and  will  observe  all  corporate,   limited
     partnership or limited liability company formalities, as applicable;

               (o) in the case of Borrower,  has not incurred and will not incur
     any debt other than (a) the Loans, and (b) trade and operational debt which
     is (i)  incurred in the  ordinary  course of  business,  (ii) not more than
     sixty  (60)  days  past  due,  (iii)  with  trade  creditors,  (iv)  in the
     aggregate,  in an outstanding  amount less than $250,000 at any given time,
     and (v) not  evidenced  by a note,  except as  permitted  pursuant  in this
     Agreement. No debt other than the Loans may be secured (subordinate or pari
     passu) by the Project;

               (p) has not and will not assume or guarantee or become  obligated
     for the debts of any other Person or hold out its credit as being available
     to  satisfy  the  obligations  of any other  Person,  except  as  permitted
     pursuant to this Agreement;

                                       14
<PAGE>

               (q)  except as set forth in  Schedule  6.3,  has not and will not
     acquire obligations or securities of its partners,  members or ------------
     shareholders or any other affiliate;

               (r) has  allocated and will allocate  fairly and  reasonably  any
     overhead  expenses  that are shared with an affiliate,  including,  but not
     limited to,  paying for shared  office space and services  performed by any
     officer or employee of an affiliate;

               (s)  maintains  and  uses  and  will  maintain  and use  separate
     invoices and checks bearing its name. The stationary,  invoices, and checks
     utilized by the Single  Purpose  Entity or utilized to collect its funds or
     pay its expenses shall bear its own name and shall not bear the name of any
     other entity  unless such entity is clearly  designated as being the Single
     Purpose Entity's agent;

               (t)  except in  connection  with the  Loans and the  indebtedness
     being  refinanced  by the Loans,  has not pledged and,  except as permitted
     pursuant to the Loan Documents,  will not pledge its assets for the benefit
     of any other Person;

               (u) has conducted business, held itself out and identified itself
     and will  conduct  business,  hold  itself  out and  identify  itself  as a
     separate and distinct  entity under its own name or in a name franchised or
     licensed to it by an entity  other than an affiliate of Borrower and not as
     a division or part of any other Person;

               (v) has  maintained and will maintain its assets in such a manner
     that it will not be costly or difficult to segregate, ascertain or identify
     its individual assets from those of any other Person;

               (w) has not made and will not make  loans to any  Person  or hold
     evidence of  indebtedness  issued by any other Person  (other than cash and
     securities issued by a Person that is not an Affiliate);

               (x) has not  identified  and  will  not  identify  its  partners,
     members or shareholders,  or any affiliate of any of them, as a division or
     part of it, and has not identified  itself and shall not identify itself as
     a division of any other Person;

               (y) has not  entered  into or been a party to, and will not enter
     into  or be a  party  to,  any  transaction  with  its  partners,  members,
     shareholders  or affiliates  except in the ordinary  course of its business
     and on terms which are intrinsically fair,  commercially reasonable and are
     no less favorable to it than would be obtained in a comparable arm's-length
     transaction with an unrelated third party;

               (z) has not and will not have any  obligation  to  indemnify  its
     partners,  officers,  directors or members, as the case may be, unless such
     obligation  is fully  subordinated  to the Loans and will not  constitute a
     claim against it in the event that after payment of the Loans, cash flow is
     insufficient to pay such obligation;

               (aa) if such entity is a corporation,  it is required to consider
     the interests of its creditors in connection with all corporate actions;

                                       15
<PAGE>

               (bb) does not and will not have any of its obligations guaranteed
     by any affiliate, except in connection with the Loans.

          (110) "Site Assessment" means an environmental  engineering report for
the  Project  prepared  by an engineer  engaged by the  Administrative  Agent at
Borrower's expense,  and in a manner  satisfactory to the Administrative  Agent,
based  upon  an  investigation  relating  to and  making  appropriate  inquiries
concerning the existence of Hazardous Materials on or about the Project, and the
past or present discharge,  disposal,  release or escape of any such substances,
all consistent with good customary and commercial practice.

          (111) "State" means the State of New York.

          (112)  "Subordination  of  Management  Agreement"  means that  certain
Manager's  Consent and  Subordination  of Management  Agreement,  dated the date
hereof,  by the Manager in favor of the  Administrative  Agent (on behalf of the
Lenders).

          (113) "Swap Guaranty Fee" has the meaning assigned in Section 2.8.

          (114) "Swap Obligations" has the meaning assigned in Section 2.8.

          (115) "Swap  Reimbursement  Obligation"  has the  meaning  assigned in
Section 2.8.

          (116) "Taxes" has the meaning assigned in Section 8.2.

          (117) "Tax and Insurance  Escrow Account" has the meaning  assigned in
Section 3.4.

          (118) "Tax and Insurance  Escrow  Reserve has the meaning  assigned in
Section 3.4.

          (119) "Threshold Amount" has the meaning assigned in Section 3.2(1).

          (120) "Trigger  Period" means the period occurring from and after such
time as the Actual Debt  Service  Coverage  Ratio for any Quarter  shall be less
than  1.20 to 1.00  through  and  until  such time as the  Actual  Debt  Service
Coverage Ratio equals or exceeds 1.25 to 1.0 for two (2)  consecutive  Quarterly
determinations and any period during which an Event of Default exists,  with the
initial  determination  of the Debt Service  Coverage Ratio to be made hereunder
for the period January 1, 2000 through March 31, 2000.

          (121) "Type" has the meaning assigned in Section 1.2.

          (122) "Year 2000" has the meaning assigned in Section 6.15.

     Section 1.2. Types of Loans.  Loans hereunder are  distinguished by "Type".
The "Type" of a Loan refers to whether such Loan is an Alternate  Base Rate Loan
or a Eurodollar Loan, each of which constitutes a Type.

                                       16
<PAGE>

                                   ARTICLE 2

                                   LOAN TERMS

     Section 2.1. The Commitments, Loans and Notes

          (1) Loans.  Each Lender severally  agrees, on the terms and conditions
of this  Agreement,  to make a term loan to  Borrower  in Dollars in a principal
amount up to but not exceeding the amount of the Commitment of such Lender.  The
Loans  shall be funded in a single  advance and repaid in  accordance  with this
Agreement.  The initial advance of the Loans,  in the aggregate  amount of up to
$425,000,000,  shall be made  upon  Borrower's  satisfaction  of the  conditions
described in Schedule 2.1.

          (2)  Lending  Offices.  The  Loans  of each  Lender  shall be made and
maintained    at    such    Lender's     Applicable     Lending    Office    for
Loans of such Type.

          (3) Several Obligations. The failure of any Lender to make any Loan to
be made by it on the date specified  therefor shall not relieve any other Lender
of  its   obligation  to  make  its  Loan,   but  neither  any  Lender  nor  the
Administrative Agent shall be responsible for the failure of any other Lender to
make a Loan to be made by such other Lender.

          (4) Notes.

               (a) Loan Notes.  Except as provided in subsection  (e) below with
     respect  to a  Refinancing  Note,  the Loans made by each  Lender  shall be
     evidenced by a single promissory note of Borrower substantially in the form
     of Exhibit C,  payable to such  Lender in a principal  amount  equal to the
     amount of its  Commitment  as  originally  in  effect  and  otherwise  duly
     completed.

               (b) Endorsements on Notes. The date, amount,  Type, interest rate
     and duration of Interest  Period (if  applicable) of each Loan made by each
     Lender to  Borrower,  and each  payment  made on account  of the  principal
     thereof,  shall be recorded  by such Lender on its books and,  prior to any
     transfer of the Note held by it,  endorsed  by such Lender on the  schedule
     attached  to such  Note or any  continuation  thereof;  provided  that  the
     failure of such Lender to make any such  recordation or  endorsement  shall
     not affect the  obligations  of Borrower to make a payment  when due of any
     amount owing hereunder or under such Note in respect of such Loans.

               (c)  Substitution,  Exchange and  Subdivision of Notes. No Lender
     shall be entitled to have its Note substituted or exchanged for any reason,
     or  subdivided  for  promissory  notes of lesser  denominations,  except in
     connection  with a  permitted  assignment  of all or any  portion  of  such
     Lender's Commitment, Loans and Note pursuant to Sections 11.10(3) and 11.25
     (and,  if  requested by any Lender,  Borrower  agrees to so  substitute  or
     exchange any Note and enter into note  splitter  agreements  in  connection
     therewith).

               (d) Loss, Theft, Destruction or Mutilation of Notes. In the event
     of the loss, theft or destruction of any Note, upon Borrower's receipt of a
     reasonably

                                       17
<PAGE>

     satisfactory indemnification agreement executed in favor of Borrower by the
     holder of such Note, or in the event of the  mutilation  of any Note,  upon
     the  surrender of such  mutilated  Note by the holder  thereof to Borrower,
     Borrower shall execute and deliver to such holder a new replacement Note in
     lieu of the lost, stolen, destroyed or mutilated Note.

               (e)  Refinancing  Note. In connection and  concurrently  with any
     payment or  permitted  prepayment  of the Loans by or on behalf of Borrower
     which  has  been  structured  as a  refinancing  of  the  Loans  where  the
     Administrative  Agent has been  requested  to assign the  Mortgage to a new
     lender of the Borrower (a "Refinancing  Lender") in accordance with Section
     8.8 of the Mortgage (a "Refinancing"),  the Lenders shall deliver the Notes
     to the Administrative  Agent for retention by the  Administrative  Agent in
     accordance with this subsection (e) and the  Administrative  Agent shall be
     (and hereby is) authorized by the Lenders to consolidate  the  indebtedness
     evidenced  by such Notes  into a single  replacement  promissory  note made
     payable by the Borrower to the order of the Administrative Agent, acting in
     its  capacity as such on behalf and for the ratable  benefit of the Lenders
     in  accordance  with their  respective  pro-rata  share of the  Loans,  and
     otherwise  substantially  in the form of  Exhibit C hereto (a  "Refinancing
     Note").  Upon the closing of the  Refinancing  and the  satisfaction of all
     conditions set forth herein for a release or  satisfaction of the Mortgage,
     the  Administrative  Agent shall (and is hereby  authorized  by the Lenders
     to),  subject to any then applicable legal  requirements,  endorse (without
     any  representation,  warranty  and/or  recourse,  express or implied)  the
     Refinancing Note to the order of the Refinancing Lender and the Notes shall
     thereupon be returned by the Administrative  Agent to the Borrower.  In the
     event that the Refinancing shall fail to close, then, at the request of any
     of the Lenders,  the Administrative  Agent shall return all of the Notes to
     the applicable Lenders and the Refinancing Note shall thereupon be returned
     to the  Borrower.  Borrower  shall pay all costs  and  expenses  (including
     attorneys' fees and  reimbursements)  incurred by the Administrative  Agent
     and/or the Lenders in connection with any actual or proposed Refinancing.

     Section 2.2. Interest Rate; Late Charges. The outstanding principal balance
of the Loans (including any amounts added to principal under the Loan Documents)
shall bear interest at a rate of interest equal to two percent (2.00%) per annum
in excess of the  Adjusted  Libor  Rate (the  "Contract  Rate").  Subject to the
provisions of this Agreement  which,  in certain  instances,  require payment of
interest at the Alternate Base Rate, such  Eurodollar  Loans shall Continue from
one Interest Period to the next Interest  Period.  Interest shall be computed on
the basis of a fraction,  the  denominator of which is three hundred sixty (360)
and the numerator of which is the actual number of days elapsed from the date of
the initial advance or the date on which the immediately  preceding  payment was
due. If Borrower fails to pay any  installment  of interest or principal  within
five (5) days  after  the date on which  the same is due  (other  than the final
payment  of  principal  due on the  Maturity  Date),  Borrower  shall pay to the
Administrative  Agent (on behalf of the Lenders) a late charge on such  past-due
amount, as liquidated damages and not as a penalty,  equal to the greater of (a)
interest at the  Default  Rate on such amount from the date when due until paid,
or (b) five percent (5%) of such amount, but not in excess of the maximum amount
of interest  allowed by applicable law. While any Event of Default  exists,  the
Loans  shall bear  interest  at the  Default  Rate;  provided,  that  during the
continuance  of an Event of Default  the

                                       18
<PAGE>

Administrative Agent may suspend the right of Borrower to Continue any Loan as a
Eurodollar Loan, in which event all Loans shall be Converted (on the last day(s)
of the respective Interest Periods therefor) into Alternate Base Rate Loans and,
thereafter, the Default Rate shall be computed using the Alternate Base Rate.

     Section 2.3. Terms of Payment. The Loans shall be payable as follows:

          (1)  Interest.  On the date hereof,  Borrower  shall make a payment of
interest only  (covering  the period from the date hereof  through and including
December 31, 1999), and beginning with the Interest Period commencing January 1,
2000, and thereafter,  Borrower shall pay interest in arrears on the last day of
each Interest  Period,  or if the Alternate Base Rate is  applicable,  the first
Business Day (assuming clause (b) of such definition applies) of each month (the
"Payment Date") in accordance with the wire transfer  instructions  set forth in
Schedule 2.3(1) hereto (or such other  instructions as Administrative  Agent may
from time to time  provide)  until all amounts due under the Loan  Documents are
paid in full. Borrower shall pay additional interest as provided in Section 2.8.

          (2) Cash  Flow  Sweep.  If and for so long as a Trigger  Period  shall
exist and be  continuing,  then one hundred  percent (100%) of the Net Cash Flow
for each  calendar  month shall be  deposited  into the  Curtailment  Account in
accordance with Section 3.7 hereof.

          (3)  Maturity.  On  the  Maturity  Date,  Borrower  shall  pay  to the
Administrative  Agent (on  behalf of the  Lenders)  all  outstanding  principal,
accrued and unpaid interest, and any other amounts due under the Loan Documents,
including,  without limitation,  all costs,  expenses and fees and other amounts
due under the Interest Rate Protection  Agreement.  In addition,  Borrower shall
(i) cause the Interest Rate  Guaranty to be  terminated  and GECC to be released
from  any and all  obligations  thereunder,  as  determined  by GECC in its sole
discretion,  or (ii) provide such other evidence of such  termination or release
as  GECC  shall  in  its  reasonable  discretion  find  satisfactory.   Borrower
acknowledges and agrees that the Mortgage secures,  among other things, the Swap
Reimbursement  Obligations  and the Swap Guaranty Fee and,  accordingly,  agrees
that in the event that it fails to satisfy  either of clauses (i) or (ii) above,
Administrative  Agent on  behalf of  Lenders  shall not  release  or assign  the
Mortgage.

          (4) Extension Option. The Borrower shall have a one time right, at its
option (the  "Extension  Option"),  to extend the Maturity  Date for a period of
twelve  (12)  months  from  January 2, 2003 to  January 2, 2004,  subject to the
satisfaction of the following conditions:

               (a) Borrower shall notify the Administrative  Agent in writing of
     Borrower's  exercise of such  Extension  Option at least (60), but not more
     than one hundred twenty (120), days prior to the original Maturity Date;

               (b) No Event of Default or Potential  Default shall have occurred
     and  be   continuing   as  of  (i)  the  date   Borrower  so  notifies  the
     Administrative  Agent pursuant to paragraph (a) above and (ii) the original
     Maturity Date;

               (c) Borrower  pays an  extension  fee to the Lenders in an amount
     equal to 0.25% of the then outstanding principal balance of the Loans;

                                       19
<PAGE>

               (d) On the  dates  set  forth in  paragraph  (b)  above,  (i) the
     Loan-to-Value Ratio is no greater than 65%, (ii) the Cash on Cash Return is
     at least 12.5%,  and (iii) the Adjusted Debt Service  Coverage  Ratio is at
     least 1.5:1;

               (e) Borrower  executes and delivers to the  Administrative  Agent
     prior to the original  Maturity Date, in form reasonably  acceptable to the
     Administrative  Agent,  an amendment to the Loan Documents  evidencing such
     extension, together with an updated Site Assessment, an updated engineering
     report for the  Project and an updated  Appraisal  (each dated as of a date
     not more than ninety (90) days prior to the original  Maturity  Date),  and
     other documentation reasonably required by the Administrative Agent;

               (f) Borrower shall,  prior to the original Maturity Date, provide
     the Administrative Agent with evidence as to (i) the Borrower's  compliance
     with the interest  rate hedging  requirements  of Section 8.16 and (ii) the
     Mezzanine Borrower's extension of the maturity date for Mezzanine Loan to a
     date  which is  co-terminus  with the  extended  Maturity  Date and that no
     default  exists on the part of the Mezzanine  Borrower  under the Mezzanine
     Loan, if the Mezzanine Loan is outstanding; and

               (g) Borrower pays to the  Administrative  Agent,  on demand,  all
     reasonable  costs and  expenses  incurred  by the  Administrative  Agent in
     connection with such extension.

          (5)  Prepayment.  The Loans are closed to  prepayment,  in whole or in
part,  during the period up to (and including) June 30, 2000.  During the period
from (and including) July 1, 2000 to (and including) December 31, 2000, upon not
less than fifteen (15) days' prior written notice to the  Administrative  Agent,
Borrower  may  prepay  the Loans,  in whole but not in part,  upon  payment of a
prepayment  premium equal to one-half of one percent  (0.5%) of the  outstanding
principal  balance of the Loans.  Thereafter,  upon not less than  fifteen  (15)
days' prior written notice to the Administrative  Agent, Borrower may prepay the
Loans,  in whole but not in part,  without  prepayment  premium.  Subject to the
limitations  set forth  above,  if the Loans are  prepaid,  in whole or in part,
including, without limitation, pursuant to a casualty or condemnation, each such
prepayment  shall be made to the  Administrative  Agent on the  prepayment  date
specified in the applicable notice to the Administrative  Agent pursuant hereto,
and (in every case)  together  with (a) the  accrued and unpaid  interest on the
principal  amount  prepaid,  (b) any  amounts  payable to a Lender  pursuant  to
Section  2.7(5) as a result of such  prepayment  while a  Eurodollar  Loan is in
effect and (c) all costs,  expenses and fees  required  under the Interest  Rate
Protection Agreement,  including,  without limitation, all termination premiums,
penalties,  fees,  costs and  expenses (it being  understood  and agreed that if
Borrower has paid to and/or deposited with the Administrative  Agent all amounts
then due and payable  under the Loan  Documents,  Borrower  shall be entitled to
receive and retain any amounts which the  Counterparty may be required to pay to
the Borrower solely as a result of any earlier  termination of the Interest Rate
Protection  Agreement).  Additionally,  Borrower  shall,  in connection with any
prepayment of the Loan made by Borrower  pursuant to this Section  2.3(5) on any
date, regardless of whether such prepayment is made on a Payment Date, (i) cause
the Interest Rate Guaranty to be terminated and GECC to be released from any and
all obligations  thereunder,  as determined by GECC in its sole discretion,  and
all costs,  expenses  and fees and

                                       20
<PAGE>

other  amounts due under the Interest Rate  Protection  Agreement to be paid, or
(ii) provide such other evidence of such termination or release as GECC shall in
its sole discretion find satisfactory.  Borrower  acknowledges that the Mortgage
secures,  among other things, the Swap Reimbursement  Obligations (to the extent
provided  in Section  2.8(1)(c))  and the Swap  Guaranty  Fee and,  accordingly,
agrees that in the event that it fails to satisfy  either of clauses (i) or (ii)
above, Administrative Agent on behalf of Lenders shall not release or assign the
Mortgage.  If the Loans are  accelerated  for any reason other than  casualty or
condemnation,  Borrower shall pay to the Administrative  Agent (on behalf of the
Lenders) the prepayment  premium  described above, or if the Loans are closed to
prepayment,  Borrower  shall pay, in addition to all other  amounts  outstanding
under the Loan Documents, a prepayment premium equal to five percent (5%) of the
outstanding balance of the Loans.

          (6)   Application   of  Payments.   All   payments   received  by  the
Administrative  Agent under the Loan Documents  shall be applied:  first, to any
fees and expenses due to the Administrative Agent and the Lenders under the Loan
Documents;  second,  to any Default Rate  interest or late  charges;  third,  to
accrued and unpaid interest;  and fourth, to the principal sum and other amounts
due under the Loan Documents;  provided,  however,  that, if an Event of Default
exists the Administrative Agent shall apply such payments in any order or manner
as the Administrative Agent shall determine.

     Section 2.4. Security.  The Loans shall be secured by the Mortgage creating
a first lien on the Project,  the  Assignment  of Rents and Leases and the other
Loan Documents. As further security for the Loan, Borrower agrees:

          (1) to fund the Capital  Improvements  Reserve  Account in  accordance
with Schedule 2.4(1);

          (2) to fund the Leasing  Reserve  Account in accordance  with Schedule
2.4(2);

          (3) to fund the Tax and Insurance  Escrow  Account in accordance  with
Section 3.4; and

          (4) to fund the Security  Deposit  Account in accordance  with Section
3.9.

     Section 2.5. Reserved

     Section 2.6. Payments; Pro Rata Treatment; Etc.

          (1) Payments Generally.

               (a) Payments by Borrower. Except to the extent otherwise provided
     herein, all payments of principal, interest and other amounts to be made by
     Borrower  under this  Agreement  and the Notes,  and,  except to the extent
     otherwise  provided therein,  all payments to be made by Borrower under any
     other Loan Document,  shall be made in Dollars,  in  immediately  available
     funds,  without deduction,  set-off or counterclaim,  to the Administrative
     Agent at the  account  specified  in Schedule  2.3(1) or any other  account
     designated  by the  Administrative  Agent by notice to Borrower,  not later
     than 1:00 p.m., New York City time, on the date on which such payment shall
     become due (each such

                                       21
<PAGE>

     payment  made  after  such  time on such due date to be deemed to have been
     made on the next succeeding Business Day).

               (b) Application of Payments. Subject to the provisions of Section
     2.3(6),  Borrower  shall,  at the time of making  any  payment  under  this
     Agreement  or any Note for the  account of any  Lender  which is not in the
     ordinary course, specify to the Administrative Agent (which shall so notify
     the intended  recipient(s)  thereof) the Loans or other amounts  payable by
     Borrower hereunder to which such payment is to be applied (and in the event
     that Borrower  fails to so specify,  or if an Event of Default has occurred
     and is continuing,  the Administrative Agent may distribute such payment to
     the  Lenders  for  application  in such  manner as it may  determine  to be
     appropriate,  subject to Section 2.6(2) and any other  agreement  among the
     Administrative Agent and the Lenders with respect to such application).

               (c)  Forwarding of Payments by  Administrative  Agent.  Except as
     otherwise agreed by the Administrative Agent and the Lenders,  each payment
     received by the  Administrative  Agent under this Agreement or any Note for
     account of any Lender shall be paid by the Administrative Agent promptly to
     such Lender,  in immediately  available funds, for account of such Lender's
     Applicable  Lending  Office for the Loan or other  obligation in respect of
     which such payment is made.

               (d)  Extensions  to Next  Business  Day.  If the due  date of any
     payment under this Agreement or any Note would otherwise fall on a day that
     is not a Business Day,  such date shall be extended to the next  succeeding
     Business  Day, and interest  shall be payable for any principal so extended
     for the period of such extension.

          (2) Pro  Rata  Treatment.  Except  to the  extent  otherwise  provided
herein:  (a) each advance of a Loan from the Lenders under Section  2.1(1) shall
be made from the  Lenders,  and any  termination  of the  obligation  to make an
advance  of the Loans  shall be  applied to the  respective  Commitments  of the
Lenders, pro rata according to the amounts of their respective Commitments;  (b)
except as otherwise  provided in Section  2.7(4),  Loans shall be allocated  pro
rata among the Lenders according to the amounts of their respective  Commitments
(in the case of the making of Loans) or their  respective  Loans (in the case of
Conversions  or  Continuations  of Loans);  (c) each  payment or  prepayment  of
principal of Loans by Borrower shall be made for account of the Lenders pro rata
in accordance with the respective  unpaid principal amounts of the Loans held by
them;  and (d) each  payment of interest on Loans by Borrower  shall be made for
account of the  Lenders pro rata in  accordance  with the amounts of interest on
such Loans then due and payable to the respective Lenders.

          (3)  Non-Receipt  of Funds by the  Administrative  Agent.  Unless  the
Administrative Agent shall have been notified by a Lender or Borrower (in either
case,  the  "Payor")  prior to the date on which the Payor is to make payment to
the Administrative  Agent of (in the case of a Lender) the proceeds of a Loan to
be made by such Lender  hereunder  or (in the case of Borrower) a payment to the
Administrative  Agent for account of any Lender  hereunder (in either case, such
payment  being  herein  called the  "Required  Payment"),  which notice shall be
effective  upon  receipt,  that the Payor does not  intend to make the  Required
Payment to the Administrative  Agent, the  Administrative  Agent may assume that
the  Required  Payment has

                                       22
<PAGE>

been made and may, in reliance upon such  assumption  (but shall not be required
to),  make the amount  thereof  available to the intended  recipient(s)  on such
date;  and,  if the  Payor  has not in fact  made the  Required  Payment  to the
Administrative  Agent, the recipient(s) of such payment shall, on demand,  repay
to the Administrative  Agent the amount so made available together with interest
thereon in respect  of each day  during the period  commencing  on the date (the
"Advance  Date") such amount was so made available by the  Administrative  Agent
until the date the Administrative Agent recovers such amount at a rate per annum
equal to (a) the  Federal  Funds  Rate  for  such  day in the  case of  payments
returned to the Administrative Agent by any of the Lenders or (b) the applicable
interest rate due hereunder with respect to payments returned by Borrower to the
Administrative  Agent and, if such recipient(s) shall fail promptly to make such
payment,  the Administrative  Agent shall be entitled to recover such amount, on
demand,  from the Payor,  together with interest as aforesaid,  provided that if
neither the  recipient(s) nor the Payor shall return the Required Payment to the
Administrative  Agent within three (3) Business Days of the Advance Date,  then,
retroactively to the Advance Date, the Payor and the recipient(s)  shall each be
obligated to pay interest on the Required Payment as follows:

               (a) if the Required  Payment shall represent a payment to be made
     by Borrower to the  Lenders,  Borrower and the  recipient(s)  shall each be
     obligated  retroactively  to the Advance Date to pay interest in respect of
     the  Required  Payment at the  Default  Rate  (without  duplication  of the
     obligation  of Borrower  under  Section 2.2 to pay interest on the Required
     Payment at the Default Rate),  it being  understood  that the return by the
     recipient(s) of the Required Payment to the Administrative  Agent shall not
     limit such  obligation of Borrower under Section 2.2 to pay interest at the
     Default Rate in respect of the Required Payment, and

               (b) if the Required Payment shall represent proceeds of a Loan to
     be made by the Lenders to Borrower,  the Payor and  Borrower  shall each be
     obligated  retroactively  to the Advance Date to pay interest in respect of
     the  Required  Payment  pursuant to  whichever  of the rates  specified  in
     Section 2.2 is  applicable  to the Type of such Loan,  it being  understood
     that the return by Borrower of the Required  Payment to the  Administrative
     Agent  shall not limit any claim  Borrower  may have  against  the Payor in
     respect of such Required Payment.

          (4) Sharing of Payments, Etc

               (a) Right of Set-off.  Borrower  agrees that, in addition to (and
     without limitation of) any right of set-off,  banker's lien or counterclaim
     a Lender may otherwise have,  each Lender shall be entitled,  at its option
     (to the fullest extent  permitted by law), to set off and apply any deposit
     (general  or  special,  time or demand,  provisional  or  final),  or other
     indebtedness,  held by it for the credit or account of  Borrower  at any of
     its offices, in Dollars or in any other currency,  against any principal of
     or interest on any of such  Lender's  Loans or any other amount  payable to
     such Lender  hereunder,  that is not paid when due  (regardless  of whether
     such deposit or other indebtedness is then due to Borrower),  in which case
     it shall promptly  notify  Borrower and the  Administrative  Agent thereof,
     provided  that such  Lender's  failure to give such notice shall not affect
     the validity thereof.

                                       23
<PAGE>

               (b) Sharing.  If any Lender shall obtain from Borrower payment of
     any  principal  of or  interest  on any Loan  owing to it or payment of any
     other amount under this  Agreement or any other Loan  Document  through the
     exercise of any right of set-off,  banker's lien or counterclaim or similar
     right or otherwise  (other than from the  Administrative  Agent as provided
     herein),  and, as a result of such payment, such Lender shall have received
     a greater  percentage  of the principal of or interest on the Loans or such
     other  amounts then due  hereunder or thereunder by Borrower to such Lender
     than the  percentage  received  by any  other  Lender,  it  shall  promptly
     purchase  from such  other  Lenders  participations  in (or,  if and to the
     extent  specified by such Lender,  direct  interests  in) the Loans or such
     other  amounts,  respectively,  owing to such other Lenders (or in interest
     due  thereon,  as the case may be) in such  amounts,  and make  such  other
     adjustments  from time to time as shall be  equitable,  to the end that all
     the Lenders  shall share the  benefit of such  excess  payment  (net of any
     expenses  that may be incurred by such Lender in  obtaining  or  preserving
     such excess  payment) pro rata in accordance  with the unpaid  principal of
     and/or interest on the Loans or such other amounts, respectively,  owing to
     each of the  Lenders.  To such end all the 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.

               (c)  Consent  by  Borrower.  Borrower  agrees  that any Lender so
     purchasing  such a  participation  (or direct  interest)  may  exercise all
     rights of  set-off,  banker's  lien,  counterclaim  or similar  rights with
     respect  to such  participation  as fully as if such  Lender  were a direct
     holder of Loans or other  amounts (as the case may be) owing to such Lender
     in the amount of such participation.

               (d) Rights of Lenders; Bankruptcy. Nothing contained herein shall
     require any Lender to exercise  any such right or shall affect the right of
     any Lender to  exercise,  and retain the benefits of  exercising,  any such
     right with respect to any other indebtedness or obligation of Borrower. If,
     under any  applicable  bankruptcy,  insolvency  or other  similar  law, any
     Lender  receives a secured claim in lieu of a set-off to which this Section
     2.6(4) applies, such Lender shall, to the extent practicable,  exercise its
     rights in respect of such  secured  claim in a manner  consistent  with the
     rights of the Lenders  entitled  under this Section  2.6(4) to share in the
     benefits of any recovery on such secured claim.

     Section 2.7. Yield Protection; Etc.

          (1) Additional Costs.

               (a) Costs of Making or  Maintaining  Eurodollar  Loans.  Borrower
     shall pay  directly to each  Lender from time to time such  amounts as such
     Lender may  determine  to be necessary  to  compensate  such Lender for any
     costs  that  such  Lender  determines  are  attributable  to its  making or
     maintaining  of  any  Eurodollar  Loans  or  its  obligation  to  make  any
     Eurodollar  Loans hereunder,  or any reduction in any amount  receivable by
     such Lender  hereunder  in respect of any of such Loans or such  obligation
     (such increases in costs and reductions in amounts  receivable being herein
     called "Additional Costs"), resulting from any Regulatory Change that:

                                       24
<PAGE>

                    (i) shall  subject  any  Lender (or its  Applicable  Lending
          Office  for any of such  Loans)  to any tax,  duty or other  charge in
          respect of such Loans or its Note or changes  the basis of taxation of
          any amounts payable to such Lender under this Agreement or its Note in
          respect of any of such Loans (excluding  changes in the rate of tax on
          the overall net income of such  Lender or of such  Applicable  Lending
          Office by the  jurisdiction  in which such  Lender  has its  principal
          office or such Applicable Lending Office); or

                    (ii)  imposes or modifies any  reserve,  special  deposit or
          similar  requirements  (other than the Reserve Requirement used in the
          determination  of the Adjusted Libor Rate for any Interest  Period for
          such Loan) relating to any extensions of credit or other assets of, or
          any deposits  with or other  liabilities  of, such Lender  (including,
          without  limitation,  any of such Loans or any deposits referred to in
          the definition of "Libor Base Rate"), or any commitment of such Lender
          (including,   without  limitation,   the  Commitment  of  such  Lender
          hereunder); or

                    (iii) imposes any other  condition  affecting this Agreement
          or its Note (or any of such  extensions of credit or  liabilities)  or
          its Commitment.

          If any Lender requests compensation from Borrower under this paragraph
(a),  Borrower may, by notice to such Lender (with a copy to the  Administrative
Agent),  suspend the  obligation  of such Lender  thereafter to make or Continue
Eurodollar  Loans,  or  to  Convert  Loans  into  Eurodollar  Loans,  until  the
Regulatory  Change giving rise to such request  ceases to be in effect (in which
case the provisions of Section 2.7(4) shall be  applicable),  provided that such
suspension shall not affect the right of such Lender to receive the compensation
so requested.

               (b) Costs Attributable to Regulatory Change or Risk-Based Capital
     Guidelines. Without limiting the effect of the foregoing provisions of this
     Section  2.7(1) (but without  duplication),  Borrower shall pay directly to
     each  Lender from time to time on request  such  amounts as such Lender may
     determine  to  be  necessary  to  compensate   such  Lender  (or,   without
     duplication, the bank holding company of which such Lender is a subsidiary)
     for any costs that it determines  are  attributable  to the  maintenance by
     such  Lender  (or  any  Applicable  Lending  Office  or such  bank  holding
     company),  pursuant  to  any  law  or  regulation  or  any  interpretation,
     directive or request (whether or not having the force of law and whether or
     not  failure  to  comply  therewith  would  be  unlawful)  of any  court or
     governmental or monetary  authority (i) following any Regulatory  Change or
     (ii)  implementing  any  mandatory  risk-based  capital  guideline or other
     requirement  (whether or not having the force of law and whether or not the
     failure to comply  therewith  would be  unlawful)  hereafter  issued by any
     government or  governmental  or supervisory  authority  implementing at the
     national level the Basle Accord, of capital in respect of its Commitment or
     Loans (such compensation to include, without limitation, an amount equal to
     any  reduction of the rate of return on assets or equity of such Lender (or
     any  Applicable  Lending  Office or such bank  holding  company) to a level
     below that which such Lender (or any Applicable Lending Office or such bank
     holding  company)  could  have  achieved  but  for  such  law,  regulation,
     interpretation, directive or request.

                                       25
<PAGE>

               (c)  Notification  and  Certification.  Each Lender  shall notify
     Borrower of any event occurring after the date hereof entitling such Lender
     to  compensation  under  paragraph  (a) or (b) of this  Section  2.7(1)  as
     promptly as practicable, but in any event within 45 days, after such Lender
     obtains actual knowledge thereof;  provided that (i) if any Lender fails to
     give such notice within 45 days after it obtains  actual  knowledge of such
     an event, such Lender shall, with respect to compensation  payable pursuant
     to this Section  2.7(1) in respect of any costs  resulting from such event,
     only be entitled to payment  under this Section  2.7(1) for costs  incurred
     from and after the date 45 days  prior to the date  that such  Lender  does
     give such notice and (ii) each Lender will designate a different Applicable
     Lending Office for the Loans of such Lender  affected by such event if such
     designation  will  avoid  the need for,  or  reduce  the  amount  of,  such
     compensation  and  will  not,  in the  sole  opinion  of  such  Lender,  be
     disadvantageous  to such  Lender,  except  that such  Lender  shall have no
     obligation to designate an Applicable  Lending Office located in the United
     States of  America.  Each Lender  will  furnish to  Borrower a  certificate
     setting  forth the basis and  amount of each  request  by such  Lender  for
     compensation   under   paragraph  (a)  or  (b)  of  this  Section   2.7(1).
     Determinations  and  allocations by any Lender for purposes of this Section
     2.7(1) of the effect of any Regulatory  Change pursuant to paragraph (a) of
     this Section  2.7(1),  or of the effect of capital  maintained  pursuant to
     paragraph  (b) of this  Section  2.7(1),  on its costs or rate of return of
     maintaining Loans or its obligation to make Loans, or on amounts receivable
     by it in respect of Loans,  and of the amounts  required to compensate such
     Lender under this Section 2.7(1),  shall be conclusive,  provided that such
     determinations and allocations are made on a reasonable basis.

          (2)  Limitation  on Types of Loans.  Anything  herein to the  contrary
notwithstanding, if, on or prior to the determination of the Libor Base Rate for
any Interest Period for any Eurodollar Loan:

               (a) the  Administrative  Agent  determines,  which  determination
     shall be conclusive  absent  manifest  error,  that  quotations of interest
     rates for the relevant deposits referred to in the definition of Libor Base
     Rate are not being  provided in the  relevant  amounts or for the  relevant
     maturities  for purposes of  determining  rates of interest for  Eurodollar
     Loans as provided herein; or

               (b) the Majority Lenders determine,  which determination shall be
     conclusive absent manifest error, and notify the Administrative  Agent that
     the relevant rates of interest  referred to in the definition of Libor Base
     Rate upon the basis of which the rate of interest for Eurodollar  Loans for
     such Interest Period is to be determined are not likely adequately to cover
     the cost to such Lenders of making or maintaining Eurodollar Loans for such
     Interest Period;

then the Administrative  Agent shall give Borrower and each Lender prompt notice
thereof and, so long as such condition  remains in effect,  the Lenders shall be
under no obligation to make additional  Eurodollar Loans, to Continue Eurodollar
Loans or to Convert Loans of any other Type into Eurodollar  Loans, and Borrower
shall,  on the  last  day(s)  of the then  current  Interest  Period(s)  for the
outstanding  Eurodollar  Loans,  either prepay such Loans or such Loans shall be
automatically Converted into Alternate Base Rate Loans.

                                       26
<PAGE>

          (3) 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  Eurodollar  Loans  hereunder
(and,  in the sole  opinion  of such  Lender,  the  designation  of a  different
Applicable  Lending Office would either not avoid such  unlawfulness or would be
disadvantageous to such Lender), then such Lender shall promptly notify Borrower
thereof (with a copy to the Administrative  Agent) and such Lender's  obligation
to make or  Continue,  or to Convert  Loans of any other  Type into,  Eurodollar
Loans  shall be  suspended  until  such time as such  Lender  may again make and
maintain  Eurodollar Loans (in which case the provisions of Section 2.7(4) shall
be applicable).

          (4) Treatment of Affected  Loans.  If the  obligation of any Lender to
make Eurodollar  Loans or to Continue,  or to Convert  Alternate Base Rate Loans
into,  Eurodollar Loans shall be suspended pursuant to Section 2.7(1) or 2.7(3),
such Lender's  Loans shall be  automatically  Converted into Alternate Base Rate
Loans on the last day(s) of the then current  Interest  Period(s) for Loans (or,
in the case of a Conversion  resulting from a circumstance  described in Section
2.7(3),  on such earlier date as such Lender may specify to Borrower with a copy
to the  Administrative  Agent) and, unless and until such Lender gives notice as
provided below that the circumstances specified in Section 2.7(1) or 2.7(3) that
gave rise to such Conversion no longer exist:

               (a)  to  the  extent  that  such  Lender's  Loans  have  been  so
     Converted,  all payments and  prepayments of principal that would otherwise
     be applied to such Lender's Loans shall be applied instead to its Alternate
     Base Rate Loans; and

               (b) all Loans that would  otherwise  be made or Continued by such
     Lender as Eurodollar Loans shall be made or Continued  instead as Alternate
     Base Rate  Loans,  and all Loans of such  Lender  that would  otherwise  be
     Converted into Eurodollar Loans shall remain as Alternate Base Rate Loans.

          If  such  Lender  gives  notice  to  Borrower   with  a  copy  to  the
Administrative  Agent that the  circumstances  specified  in  Section  2.7(1) or
2.7(3) that gave rise to the  Conversion of such Lender's Loans pursuant to this
Section  2.7(4) no longer  exist (which such Lender  agrees to do promptly  upon
such  circumstances  ceasing to exist) at a time when  Eurodollar  Loans made by
other Lenders are outstanding,  such Lender's Alternate Base Rate Loans shall be
automatically  Converted,  on the first day(s) of the next  succeeding  Interest
Period(s) for such  outstanding  Eurodollar  Loans,  to the extent  necessary so
that, after giving effect thereto,  all Alternate Base Rate Loans and Eurodollar
Loans are allocated  among the Lenders ratably (as to principal  amounts,  Types
and Interest Periods) in accordance with their respective Commitments.

          (5) Compensation.  Borrower shall pay to the Administrative  Agent for
the  account  of each  Lender,  upon the  request  of such  Lender  through  the
Administrative  Agent,  such  amount or amounts as shall be  sufficient  (in the
reasonable  opinion  of such  Lender)  to  compensate  it for any loss,  cost or
expense that such Lender determines is attributable to:

               (a) any payment,  prepayment or  Conversion of a Eurodollar  Loan
     made by such  Lender for any reason  (including,  without  limitation,  the
     acceleration  of the

                                       27
<PAGE>

     Loans  pursuant  to  the  Administrative  Agent's  or the  Lenders'  rights
     referred  to in  Article  10) on a date  other  than  the  last  day of the
     Interest Period for such Loan; or

               (b) any failure by Borrower for any reason to borrow a Eurodollar
     Loan  from  such  Lender on the date for such  borrowing  specified  in the
     relevant  notice  of  borrowing  given  to  the  Administrative   Agent  in
     accordance with the terms of this Agreement.

          Without   limiting  the  effect  of  the  preceding   sentence,   such
compensation  shall  include an amount  equal to the excess,  if any, of (i) the
amount of interest that otherwise would have accrued on the principal  amount so
paid,  prepaid,  Converted  or not borrowed for the period from the date of such
payment, prepayment, Conversion or failure to borrow to the last day of the then
current  Interest  Period for such Loan (or, in the case of a failure to borrow,
the  Interest  Period  for such  Loan  that  would  have  commenced  on the date
specified for such  borrowing) at the applicable  rate of interest for such Loan
provided for herein over (ii) the amount of interest that  otherwise  would have
accrued  on such  principal  amount  at a rate per annum  equal to the  interest
component  of the amount  such  Lender  would  have bid in the London  interbank
market  for Dollar  deposits  of leading  banks in  amounts  comparable  to such
principal  amount and with  maturities  comparable to such period (as reasonably
determined by such Lender), or if such Lender shall cease to make such bids, the
equivalent rate, as reasonably determined by such Lender, derived from Page 3750
of the Dow Jones Markets  (Telerate)  Service or other publicly available source
as described in the definition of Libor Base Rate.

          (6) U.S. Taxes.

               (a) Gross-up for Deduction or Withholding of U.S. Taxes. Borrower
     agrees to pay to each  Lender  that is not a U.S.  Person  such  additional
     amounts as are necessary in order that the net payment of any amount due to
     such  non-U.S.  Person  hereunder  after  deduction for or  withholding  in
     respect of any U.S.  Taxes imposed with respect to such payment (or in lieu
     thereof,  payment of such U.S. Taxes by such non-U.S.  Person), will not be
     less than the amount  stated  herein to be then due and  payable,  provided
     that the  foregoing  obligation  to pay such  additional  amounts shall not
     apply:

                    (i) to any  payment to any Lender  hereunder  if such Lender
          is, on the date  hereof (or on the date it becomes a Lender  hereunder
          as provided in Section  11.25(2)) and on the date of any change in the
          Applicable Lending Office of such Lender,  entitled to submit either a
          Form 1001  (relating  to such  Lender and  entitling  it to a complete
          exemption  from  withholding  on all  interest  to be  received  by it
          hereunder  in  respect  of the  Loans) or Form 4224  (relating  to all
          interest to be received  by such  Lender  hereunder  in respect of the
          Loans), or

                    (ii) to any U.S.  Taxes  imposed  solely  by  reason  of the
          failure   by  such   non-U.S.   Person  to  comply   with   applicable
          certification,   information,   documentation   or   other   reporting
          requirements  concerning  the  nationality,   residence,  identity  or
          connections with the United States of America of such non-U.S.  Person
          if such  compliance is required by statute or regulation of the United
          States of America as a  precondition  to relief or exemption from such
          U.S. Taxes.

                                       28
<PAGE>

          For the purposes hereof, (A) "U.S.  Person" means a citizen,  national
or resident of the United States of America,  a corporation,  limited  liability
company,  partnership  or other entity created or organized in or under any laws
of the United  States of America  or any State  thereof,  or any estate or trust
that is subject  to  Federal  income  taxation  regardless  of the source of its
income,  (B) "U.S.  Taxes" means any present or future tax,  assessment or other
charge or levy  imposed by or on behalf of the  United  States of America or any
taxing authority thereof or therein, (C) "Form 1001" means Form 1001 (Ownership,
Exemption, or Reduced Rate Certificate) of the Department of the Treasury of the
United  States of America and (D) "Form 4224"  means Form 4224  (Exemption  from
Withholding of Tax on Income  Effectively  Connected with the Conduct of a Trade
or  Business  in the United  States) of the  Department  of the  Treasury of the
United States of America. Each of the Forms referred to in the foregoing clauses
(C) and (D) shall  include such  successor and related forms as may from time to
time be adopted  by the  relevant  taxing  authorities  of the United  States of
America to document a claim to which such Form relates.

               (b) Evidence of Deduction,  Etc.  Within 30 days after paying any
     amount to the Administrative  Agent or any Lender from which it is required
     by law to make any deduction or withholding, and within 30 days after it is
     required by law to remit such  deduction  or  withholding  to any  relevant
     taxing or other  authority,  Borrower  shall deliver to the  Administrative
     Agent for delivery to such non-U.S.  Person  evidence  satisfactory to such
     Person of such deduction, withholding or payment (as the case may be).

          (7)  Replacement  of  Lenders.  If any  Lender  requests  compensation
pursuant to Section  2.7(1) or 2.7(6),  or any Lender's  obligation  to Continue
Loans of any Type,  or to Convert Loans of any Type into the other Type of Loan,
shall be  suspended  pursuant  to  Section  2.7(2)  or 2.7(3)  (any such  Lender
requesting  such  compensation,  or whose  obligations  are so suspended,  being
herein called a "Requesting Lender"), Borrower, upon three Business Days notice,
may require that such  Requesting  Lender  transfer all of its right,  title and
interest under this Agreement and such  Requesting  Lender's Note to any bank or
other financial institution (a "Proposed Lender") identified by Borrower that is
satisfactory to the  Administrative  Agent (i) if such Proposed Lender agrees to
assume  all of the  obligations  of such  Requesting  Lender  hereunder,  and to
purchase all of such Requesting Lender's Loans hereunder for consideration equal
to the aggregate outstanding principal amount of such Requesting Lender's Loans,
together with  interest  thereon to the date of such purchase (to the extent not
paid by Borrower),  and  satisfactory  arrangements are made for payment to such
Requesting  Lender of all other  amounts  accrued and payable  hereunder to such
Requesting  Lender as of the date of such transfer  (including  any fees accrued
hereunder and any amounts that would be payable  under Section  2.7(5) as if all
of such  Requesting  Lender's Loans were being prepaid in full on such date, but
not any  amounts  which  would be due under  Section  2.3(5) as a result of such
deemed prepayment) and (ii) if such Requesting Lender has requested compensation
pursuant to Section 2.7(1) or 2.7(6), such Proposed Lender's aggregate requested
compensation,  if any, pursuant to Section 2.7(1) or 2.7(6) with respect to such
Requesting  Lender's Loans is lower than that of the Requesting Lender.  Subject
to the provisions of Section 11.25(2),  such Proposed Lender shall be a "Lender"
for all  purposes  hereunder.  Without  prejudice  to the  survival of any other
agreement  of  Borrower  hereunder,  the  agreements  of Borrower  contained  in
Sections  2.7(1),  2.7(6) and 11.5 (without  duplication of any payments made to
such Requesting

                                       29
<PAGE>

Lender by Borrower or the Proposed Lender) shall survive for the benefit of such
Requesting  Lender under this  Section  2.7(7) with respect to the time prior to
such replacement.

     Section 2.8. Interest Rate Guaranty Reimbursement.

          (1) Borrower  acknowledges  that GECC has executed and  delivered  the
Interest  Rate  Guaranty  pursuant  to which  GECC has agreed to  reimburse  the
Counterparty under the Interest Rate Protection  Agreement for any payments that
Borrower fails to make under the Interest Rate Protection  Agreement for so long
as the Interest Rate Protection  Agreement is outstanding.  In consideration for
GECC entering into the Interest Rate  Guaranty,  Borrower  hereby  covenants and
agrees as follows:

               (a) Borrower shall reimburse the Administrative  Agent (on behalf
     of GECC,  the Lenders and the  Administrative  Agent,  as  applicable),  as
     additional interest,  for (i) all payments made by GECC including,  without
     limitation,  breakage costs,  under or in connection with the Interest Rate
     Guaranty   (collectively,   the  "Swap   Obligations")   and  (ii)  without
     duplication  of payments  under clause (i) above,  all payments made by (x)
     the other Lenders to the  Administrative  Agent  pursuant to Section 2.8(2)
     with respect to the Swap Obligations or (y) the  Administrative  Agent with
     respect  to the Swap  Obligations  pursuant  to  Section  10.3  (Borrower's
     obligations   under  this  clause  (a)  being,   collectively,   the  "Swap
     Reimbursement  Obligations").  Such Swap Reimbursement Obligations shall be
     immediately due on the dates GECC incurs any corresponding  Swap Obligation
     and shall not be  subject  to the  limitations  on  liability  set forth in
     Section 12.1;

               (b)  Commencing  on  January  1,  2000,  Borrower  shall  pay the
     Administrative  Agent (on behalf of GECC and the  Lenders,  as agreed among
     the Lenders pursuant to a separate  agreement),  as additional  interest, a
     swap  guaranty  fee (the "Swap  Guaranty  Fee") in an amount  equal to four
     basis points  (0.04%) per annum  multiplied  by the notional  amount of the
     Interest Rate Protection Agreement.  The Swap Guaranty Fee shall be payable
     annually in Dollars in arrears on the last  business  day of each  calendar
     year that the Interest Rate Protection  Agreement is outstanding and on the
     day that the Interest  Rate  Protection  Agreement  expires or is otherwise
     terminated  and shall be  calculated  based upon the actual  number of days
     elapsed on the basis of a 365-day year; and

               (c) The  maximum  amount  of  $50,000,000  shall  be  secured  as
     additional interest under the Mortgage.

          (2) Unless recovered by the  Administrative  Agent or GECC from or for
the account of Borrower  promptly after demand  therefor,  each Lender shall, in
addition to any other amounts due from such Lender under the Loan Documents, pay
to the Administrative Agent (on behalf of GECC) such Lender's pro rata share (in
accordance  with the respective  unpaid  principal  amounts of the Loans held by
them)  of all  Swap  Obligations  incurred  by GECC  and not  paid by  Borrower.
Anything contained in this Section 2.8(2) to the contrary notwithstanding,  each
Lender  confirms  that  if it at any  time  receives  written  demand  from  the
Administrative   Agent  to  pay  such  Lender's  pro  rata  share  of  any  Swap
Obligations,  such Lender shall, promptly upon receipt of such demand (and in no
event later than the next  succeeding  Business Day), pay

                                       30
<PAGE>

such pro rata  share to the  Administrative  Agent as  directed  in such  demand
without  counterclaim,  offset or defense (it being  understood  and agreed that
each  Lender's  obligation to make such payment to the  Administrative  Agent is
absolute and unconditional.

     Section 2.9.  Agency Fee.  Until payment in full of all  obligations  under
this  Agreement  and  the  other  Loan  Documents,  Borrower  shall  pay  to the
Administrative  Agent,  for its sole account,  the Agency Fee in accordance with
the Fee Letter.

                                   ARTICLE 3

                      INSURANCE, CONDEMNATION, AND IMPOUNDS

     Section 3.1. Insurance. Borrower shall maintain insurance as follows:

          (1) Casualty;  Business Interruption.  Borrower shall keep the Project
insured  against  damage by fire and the other  hazards  covered  by a  standard
extended  coverage and all-risk  insurance  policy for the full insurable  value
thereof (without reduction for depreciation or co-insurance), and shall maintain
such other  casualty  insurance  as  reasonably  required by the  Administrative
Agent.  Borrower  shall keep the Project  insured  against  loss by flood if the
Project is located in an area  identified  by the Federal  Emergency  Management
Agency as an area having special flood hazards and in which flood  insurance has
been made  available  under the National  Flood  Insurance  Act of 1968 (and any
successor  act  thereto)  in an amount at least  equal to the  lesser of (i) the
maximum  amount of the Loans or (ii) the  maximum  limit of  coverage  available
under said act. Borrower shall maintain use and occupancy insurance covering, as
applicable,  rental income or business interruption,  with coverage in an amount
not less  than  twelve  (12)-months  anticipated  gross  rental  income or gross
business  earnings,  as  applicable in each case,  attributable  to the Project.
Borrower  shall not  maintain  any  separate or  additional  insurance  which is
contributing  in the event of loss unless it is properly  endorsed and otherwise
satisfactory  to the  Administrative  Agent in all  respects.  The  proceeds  of
insurance  paid on account of any damage or  destruction to the Project shall be
paid to the Administrative Agent to be applied as provided in Section 3.2.

          (2)  Liability.   Borrower  shall  maintain  (a)  commercial   general
liability  insurance  with  respect  to the  Project  providing  for  limits  of
liability  of not less than  $5,000,000  for both injury to or death of a person
and for property  damage per occurrence,  and (b) other  liability  insurance as
reasonably required by the Administrative Agent.

          (3) Form and Quality. All insurance policies shall be endorsed in form
and substance  acceptable to the Administrative Agent to name the Administrative
Agent  (on  behalf of the  Lenders)  as an  additional  insured,  loss  payee or
mortgagee  thereunder,  as its  interest  may appear,  with loss  payable to the
Administrative Agent, without contribution,  under a standard New York (or local
equivalent) mortgagee clause. All such insurance policies and endorsements shall
be fully paid for and contain such  provisions  and  expiration  dates and be in
such form and issued by such insurance  companies licensed to do business in the
State,  with a rating of "A-IX" or better as  established by Best's Rating Guide
(or an equivalent rating approved in writing by the Administrative  Agent). Each
policy shall provide that such policy may not be cancelled or

                                       31
<PAGE>

materially  changed  except  upon  thirty  (30) days'  prior  written  notice of
intention of non-renewal,  cancellation or material change to the Administrative
Agent and that no act or thing done by Borrower  shall  invalidate any policy as
against  the  Administrative  Agent or any  Lender.  Borrower  may  satisfy  its
obligations  to  maintain  insurance  under  this  Article 3 through  the use of
blanket insurance policies so long as Administrative  Agent receives appropriate
endorsements  and/or duplicate  policies  confirming to  Administrative  Agent's
satisfaction,  Administrative  Agent's  right on behalf of Lenders  to  continue
coverage  on a pro rata  pass-through  basis  and that  coverage  under any such
blanket  insurance  policy  shall not be limited or  affected  in any way by any
losses or casualties on any other properties. Any blanket insurance policy shall
specifically  allocate to the  Project the amount of coverage  from time to time
required  hereunder and shall  otherwise  provide the same protection as would a
separate  policy  insuring only the Project in compliance with the provisions of
Section  3.1(1),  including an  acknowledgement  that the payment of the premium
allocated  to  the  Project  shall  continue  such  policy  as  to  the  Project
notwithstanding any other non-payment of premiums. If Borrower fails to maintain
insurance in  compliance  with this Section  3.1, the  Administrative  Agent may
obtain such  insurance  and pay the premium  therefor  and  Borrower  shall,  on
demand,  reimburse  the  Administrative  Agent  for  all  expenses  incurred  in
connection therewith.  Borrower shall assign the policies or proofs of insurance
to the Administrative Agent (on behalf of the Lenders),  in such manner and form
that the Administrative  Agent and its successors and assigns shall at all times
have and hold the same as security for the payment of the Loans.  Borrower shall
deliver copies of all original policies certified to the Administrative Agent by
the insurance  company or authorized  agent as being true copies,  together with
the endorsements  required hereunder.  The proceeds of insurance policies coming
into the possession of the Administrative Agent shall not be deemed trust funds,
and the Administrative  Agent shall be entitled to apply such proceeds as herein
provided.

          (4) Adjustments.  Borrower shall give immediate  written notice of any
loss to the  insurance  carrier  and to the  Administrative  Agent.  During  the
existence of an Event of Default or if the proceeds are  reasonably  expected to
exceed the Threshold Amount, Borrower hereby irrevocably authorizes and empowers
the  Administrative  Agent,  as  attorney-in-fact  for Borrower  coupled with an
interest,  to make  proof of loss,  to adjust  and  compromise  any claim  under
insurance  policies,  to appear in and  prosecute  any action  arising from such
insurance  policies,  to collect and receive insurance  proceeds,  and to deduct
therefrom the Administrative Agent's expenses incurred in the collection of such
proceeds.  Nothing contained in this Section 3.1(4),  however, shall require the
Administrative  Agent or any  Lender to incur  any  expense  or take any  action
hereunder.

     Section 3.2. Use and Application of Insurance Proceeds.  The Administrative
Agent shall apply  insurance  proceeds to costs of restoring  the Project or the
Loans as follows:

          (1) if the  loss is less  than or equal to  $500,000  (the  "Threshold
Amount"),  the Administrative  Agent shall make the insurance proceeds available
to the  Borrower for  restoration  provided (a) no Event of Default or Potential
Default exists, and (b) Borrower promptly  commences and is diligently  pursuing
restoration of the Project;

          (2) if the loss exceeds  Threshold  Amount but is not more than 10% of
the replacement  value of the  improvements  (for projects  containing  multiple
phases or stand alone  structures,  such  calculation to be based on the damaged
phase or structure,  not the project as a

                                       32
<PAGE>

whole),  the  Administrative   Agent  shall  apply  the  insurance  proceeds  to
restoration  provided that at all times during such  restoration (a) no Event of
Default or Potential  Default exists;  (b) the  Administrative  Agent determines
that there are sufficient funds available to restore and repair the Project to a
condition  approved by the Administrative  Agent; (c) the  Administrative  Agent
determines  that  the  Actual  Net  Operating   Income  of  the  Project  during
restoration  will be  sufficient  to pay Debt Service or Borrower  provides such
additional  security for the Loans as may be satisfactory to the  Administrative
Agent; (d) the Administrative Agent determines (based on leases which will be in
effect after  restoration  is complete)  that after  restoration  the  pro-forma
Adjusted Debt Service  Coverage  Ratio for the twelve (12) months  following the
completion  of such  restoration  will be at  least  1.4:1  and the Cash on Cash
Return  will  be at  least  ten  and  eight  tenths  percent  (10.8%);  (e)  the
Administrative  Agent determines that restoration and repair of the Project to a
condition  approved by the  Administrative  Agent will be  completed  within six
months  after the date of loss or  casualty  and in any event  ninety  (90) days
prior  to  the  Maturity  Date;  and  (f)  Borrower  promptly  commences  and is
diligently pursuing restoration of the Project;

          (3) if the  conditions  set forth above are not  satisfied or the loss
exceeds  the  maximum  amount   specified  in  Section  3.2(2)  above,   in  the
Administrative Agent's sole discretion, the Administrative Agent may (subject to
the  approval  of the  Majority  Lenders)  apply any  insurance  proceeds it may
receive to the  payment of the Loans or allow all or a portion of such  proceeds
to be used for the restoration of the Project; and

          (4) insurance  proceeds  applied to  restoration  will be disbursed on
receipt of satisfactory  plans and  specifications,  contracts and subcontracts,
schedules, budgets, lien waivers and architects' certificates,  and otherwise in
accordance  with  prudent   commercial   construction   lending   practices  for
construction loan advances,  including,  as applicable,  the advance  conditions
under Schedule 2.1.

     Section 3.3.  Condemnation  Awards.  Borrower shall immediately  notify the
Administrative  Agent of the institution of any proceeding for the  condemnation
or other taking of the Project or any portion thereof.  The Administrative Agent
may  participate  in any  such  proceeding  and  Borrower  will  deliver  to the
Administrative Agent all instruments necessary or required by the Administrative
Agent to permit such  participation.  Without the  Administrative  Agent's prior
consent  (subject to the approval of the Majority  Lenders),  Borrower (1) shall
not agree to any  compensation  or award,  and (2) shall not take any  action or
fail to take any action which would cause the compensation to be determined. All
awards and  compensation  for the taking or purchase in lieu of  condemnation of
the Project or any part thereof are hereby  assigned to and shall be paid to the
Administrative  Agent.  Borrower authorizes the Administrative  Agent to collect
and  receive  such  awards  and  compensation,   to  give  proper  receipts  and
acquittances  therefor, and in the Administrative Agent's sole discretion (which
the  Administrative  Agent  shall  exercise  at the  direction  of the  Majority
Lenders) to apply the same toward the payment of the Loans, notwithstanding that
the Loans may not then be due and payable, or to the restoration of the Project;
however, if the award is less than or equal to the Threshold Amount and Borrower
requests that such proceeds be used for  non-structural  site improvements (such
as landscape, driveway, walkway and parking area repairs) required to be made as
a result of such condemnation,  the Administrative Agent will apply the award to
such  restoration  in  accordance  with  disbursement  procedures  applicable to
insurance  proceeds  provided  there  exists no  Potential  Default  or Event of
Default.  Borrower,  upon request by the Administrative Agent, shall execute

                                       33
<PAGE>

all  instruments   requested  to  confirm  the  assignment  of  the  awards  and
compensation to the Administrative  Agent, free and clear of all liens,  charges
or encumbrances.

     Section 3.4. Impounds. Borrower shall deposit or cause to be deposited into
a separate  segregated  account (the "Tax and Insurance  Escrow  Account") to be
maintained  by  the  Borrower  at  the  Depository  Bank  in  the  name  of  the
Administrative  Agent for the benefit of the  Lenders,  monthly on each  Payment
Date,  (a)  one-twelfth  (1/12th)  of the Taxes  that the  Administrative  Agent
estimates  will be payable with  respect to the Project  during the next ensuing
twelve  (12)  months  in order to  accumulate  in the Tax and  Insurance  Escrow
Account  sufficient  funds to pay all such Taxes at least thirty (30) days prior
to any  delinquency  thereof  or penalty  thereon,  and (b)  one-twelfth  of the
insurance  premiums  that the  Administrative  Agent  estimates  will be payable
during the next  ensuing  twelve  (12)  months for the  renewal of the  coverage
afforded by the insurance  policies  required by the  Administrative  Agent with
respect to the Project upon the expiration thereof in order to accumulate in the
Tax and Insurance  Escrow  Account  sufficient  funds to pay all such  insurance
premiums at least  thirty (30) days prior to  expiration  (the  aggregate of the
amounts  in (a) and (b)  above  being  hereinafter  referred  to as the "Tax and
Insurance  Escrow  Reserve").  At or before  the  initial  advance of the Loans,
Borrower  shall deposit in the Tax and Insurance  Escrow  Account a sum of money
which together with the monthly  installments will be sufficient to make each of
such  payments  thirty  (30) days prior to the date any  delinquency  or penalty
becomes due with respect to such  payments.  Deposits shall be made on the basis
of the Administrative  Agent's estimate from time to time of the charges for the
current year (after giving effect to any reassessment or, at the  Administrative
Agent's  election,  on the  basis  of the  charges  for  the  prior  year,  with
adjustments  when the charges  are fixed for the then  current  year).  Borrower
hereby  grants to the  Administrative  Agent (on behalf of the  Lenders) a first
priority  security  interest in all funds so deposited in the Tax and  Insurance
Escrow Account for the purpose of securing the Loans.  While an Event of Default
exists,  the funds  deposited  in the Tax and  Insurance  Escrow  Account may be
applied in payment of the charges for which such funds have been  deposited,  or
to the payment of the Loans or any other  charges  affecting the security of the
Administrative Agent and the Lenders, as the Administrative Agent may elect, but
no such  application  shall be deemed to have been made by  operation  of law or
otherwise  until  actually  made by the  Administrative  Agent.  Borrower  shall
furnish the  Administrative  Agent with (i) bills for the charges for which such
deposits are required  and (ii) a  disbursement  request in the form of Schedule
3.4 hereto  executed by an officer of the  Borrower's  general  partner at least
thirty (30) days prior to the date on which the charges  first  become  payable.
Within ten (10) days after Administration  Agent's receipt of the aforementioned
bills and  disbursement  request,  the  Administrative  Agent  shall  direct the
Depository  Bank to pay  such  charges  in  accordance  with  such  disbursement
request,  provided that the  Administrative  Agent approves of the  disbursement
request within such ten (10) day period and the amount on deposit in the Tax and
Insurance Escrow Account is sufficient to pay such charges,  it being understood
and agreed that the Depository  Bank shall be responsible  for the timing of the
payment of such charges and that Borrower  shall be solely  responsible  for any
late charges,  interest and penalties  imposed as a result of any delinquency in
such payments arising from any efforts on behalf of the Borrower to avoid making
such payments  significantly in advance of the due date therefor. If at any time
the amount on deposit in the Tax and  Insurance  Escrow  Account,  together with
amounts to be  deposited  by  Borrower  before  such  charges  are  payable,  is
insufficient  to pay such charges,  Borrower shall deposit any deficiency in the
Tax and Insurance Escrow Account immediately upon demand.

                                       34
<PAGE>

     Section 3.5. Pledge and Grant of Security Interest. Borrower hereby pledges
to the  Administrative  Agent (on behalf of the Lenders),  and grants a security
interest  in, any and all monies now or  hereafter  deposited in the Accounts as
additional  security  for the payment of the Loans.  Borrower  shall not further
pledge, assign or grant any security interest in the Accounts or permit any lien
or encumbrance to attached thereto, or any levy to be made thereon, or any UCC-1
financing  statements  (except  those  naming  the  Administrative  Agent as the
secured party) to be filed with respect  thereto.  All reasonable  out-of-pocket
costs and expenses  reasonably incurred in connection with disbursing funds from
the  Accounts  shall be paid by  Borrower.  Upon the  occurrence  of an Event of
Default  and prior to the  acceptance  of a cure  thereof by the  Administrative
Agent, the Administrative  Agent may apply any sums then present in the Accounts
to the payment of the Loans in any order in its sole discretion.  Until expended
or applied as above provided,  the Accounts shall constitute additional security
for the Loans.

     Section 3.6. Lockbox Account.

          (1)  Borrower  has  established  and  will  maintain  with  The  Chase
Manhattan Bank (in such capacity,  the "Lockbox  Bank"),  a separate  segregated
account (number 230-110789) for the Project (the "Lockbox Account"). The Lockbox
Account  will be owned by the Borrower but shall be in the name of and under the
sole  dominion  and control of the  Administrative  Agent  pursuant to a lockbox
account agreement, an agreement for notification and acknowledgment of pledge of
accounts or similar agreement (a "Lockbox Agreement"). The Lockbox Account shall
be entitled "General Electric Capital Corporation,  as the Administrative Agent,
pursuant to Loan  Agreement  dated as of December 13,  1999-1290 6th Avenue Rent
Payment Account",  provided that the Administrative  Agent shall have the option
to cause the Lockbox  Bank to change the name of the  Lockbox  Account by giving
notice to the  Borrower,  the Lenders and such  Lockbox  Bank.  Borrower  hereby
grants to the  Administrative  Agent a first priority  security  interest in the
Lockbox Account and all deposits at any time contained  therein and the proceeds
thereof  and  will  take  all  actions  necessary  to  maintain  in favor of the
Administrative  Agent a  perfected  first  priority  security  interest  in such
Lockbox  Account,  including,  without  limitation,  executing  and filing UCC-1
financing  statements and continuations  thereof and entering into agreements to
confirm  the  Administrative  Agent's  dominion  and  control  over the  Lockbox
Account.  The Administrative Agent shall have the sole right to make withdrawals
from the Lockbox Account and all reasonable out-of-pocket costs and expenses for
establishing and maintaining the Lockbox Account shall be paid by Borrower.

          (2) At the  Administrative  Agent's request,  Borrower shall, or shall
cause Manager to, deliver  written  instructions  in  substantially  the form of
Exhibit B hereto  to all  tenants  under  leases to  deliver  all rents  payable
thereunder  directly to the Lockbox  Account.  Borrower  shall,  and shall cause
Manager to,  deposit all  amounts  received by Borrower or Manager  constituting
rents or  otherwise  relating to the Project into the Lockbox  Account  promptly
upon receipt.

          (3)  During  any  period  other  than a Trigger  Period  and except as
provided in Section 5.3 with respect to pre-paid rents, the Administrative Agent
shall direct the Lockbox Bank to sweep on a daily basis all funds in the Lockbox
Account to an account maintained by the Borrower (such account being referred to
as the  "Borrower  Account")  at such  financial  institution  or,  at the joint
written  direction  of the  Borrower  and the  Mezzanine  Lender,  to such other
account (the "Mezzanine Loan Lockbox Account") as shall be designated in writing
by

                                       35
<PAGE>

Borrower and Mezzanine  Lender.  Borrower shall be entitled to use and apply all
funds  deposited  into the  Borrower  Account.  During  a  Trigger  Period,  the
Administrative  Agent shall cease sweeping  funds into the Borrower  Account (or
the Mezzanine Lockbox Account,  as applicable) and all funds will be swept daily
from the Lockbox Account to the Cash Management Account.

          (4) In its sole discretion,  Borrower may, from time to time,  deposit
amounts into the Cash  Management  Account  from funds  disbursed to Borrower in
accordance  with this Agreement or from any other sources of Borrower other than
rent;  provided that if Borrower  deposits such amounts,  the amounts  deposited
shall be subject to all of the terms  hereof as if not  separately  deposited by
Borrower, and may not be withdrawn by Borrower.

          (5) If Borrower  receives  any rents or other income from the Project,
then  (i)  such  amounts  shall be held in  trust  for the  benefit,  and as the
property,  of Administrative  Agent,  subject to the terms of this Agreement and
the other Loan  Documents,  (ii) such amounts shall not be  commingled  with any
other funds or  property  of Borrower  and (iii)  Borrower  shall  deposit  such
amounts into the Lockbox Account within two (2) Business Days of receipt.

     Section 3.7. Cash Management Account.

          (1) The Borrower  shall  establish and maintain a separate  segregated
account (the "Cash  Management  Account") at the Depository  Bank in the name of
the  Administrative  Agent for the  benefit of  Lenders,  which Cash  Management
Account  shall be under the sole  dominion  and  control  of the  Administrative
Agent. The Cash Management  Account shall be entitled  "General Electric Capital
Corporation, as the Administrative Agent, pursuant to Loan Agreement dated as of
December 13, 1999 - 1290 6th Avenue Cash Management Account",  provided that the
Administrative  Agent  shall  have the  option to cause the  Depository  Bank to
change the name of the Cash Management Account by giving notice to Borrower, the
Lenders and the Depository  Bank.  Borrower hereby grants to the  Administrative
Agent a first priority security interest in the Cash Management  Account and all
deposits at any time  contained  therein and the proceeds  thereof and will take
all  actions  necessary  to  maintain  in  favor of the  Administrative  Agent a
perfected  first  priority  security  interest in the Cash  Management  Account,
including,  without limitation,  executing and filing UCC-1 Financing Statements
and   continuations   thereof  and  entering  into  agreements  to  confirm  the
Administrative  Agent's  dominion and control over the Cash  Management  Account
and/or  any other  Accounts.  Subject  to the terms of the Loan  Documents,  the
Administrative Agent shall have the sole right to make withdrawals from the Cash
Management  Account and all  reasonable  out-of-pocket  costs and  expenses  for
establishing  and  maintaining  the  Cash  Management  Account  shall be paid by
Borrower.

          (2) During a Trigger  Period,  provided no Event of Default shall have
occurred and be continuing,  all funds on deposit in the Cash Management Account
from time to time shall be applied by the Administrative Agent to the payment of
the following items in the following order:

               (a)  First,  payment  of all Tax  and  Insurance  Escrow  Reserve
     amounts  required to be deposited into the Tax and Insurance Escrow Account
     in accordance with the terms and conditions of Section 3.4 hereof;

                                       36
<PAGE>

               (b) Second, payment to the Administrative Agent (on behalf of the
     Lenders) of Debt Service;

               (c) Third,  payments to the Capital  Improvements Reserve Account
     and Leasing  Reserve  Account in accordance  with the terms and  conditions
     hereof;

               (d)  Fourth,  payment  to the  Administrative  Agent of any other
     amounts (other than the principal amount of the Loans) then due and payable
     under the Loan Documents;

               (e) Fifth, a disbursement to Borrower (or, at the  Administrative
     Agent's  election,  to the contractor,  vendor,  service  provider or other
     party entitled  thereto) in an amount sufficient to enable Borrower (or, at
     the Administrative  Agent's election,  the Administrative Agent) to pay all
     Approved Expenses (including capital expenditures, tenant improvement costs
     and leasing commissions,  but excluding any of such Approved Expenses which
     are paid from amounts  deposited into the Tax and Insurance Escrow Account,
     the Capital  Improvements  Reserve Account or the Leasing Reserve  Account)
     which are due and payable  during the period between the date on which such
     disbursement  is being made and the  immediately  following  Payment  Date.
     Borrower hereby  covenants and agrees that all such amounts so disbursed to
     Borrower  shall be used for the  payment of  Approved  Expenses  and for no
     other purpose.  Upon request,  Borrower shall furnish  Administrative Agent
     with  copies  of  cancelled  checks,  paid  invoices  and  other  documents
     reasonably  requested  by  Administrative  Agent  in order  to  verify  the
     Borrower's payment of Approved Expenses; and

               (f) Lastly,  on the twentieth  (20th) day of each calendar month,
     payment of all Net Cash Flow for the immediately  preceding  calendar month
     to  Administrative  Agent (on behalf of the  Lenders)  for deposit into the
     Curtailment Account.

          (3) All amounts  deposited into the Curtailment  Account shall be held
by the Depository Bank for the benefit of the Administrative Agent (on behalf of
the Lenders) in accordance with the terms and conditions of this Section 3.7(3).
Provided  no  Event  of  Default  exists,  at the  Borrower's  request,  amounts
deposited in the  Curtailment  Account (or such lesser amount  thereof as may be
specified by Borrower) shall be applied in reduction of the principal  amount of
the  Loans.  Upon  the  occurrence  of an  Event  of  Default  and  prior to the
acceptance of a cure thereof by the  Administrative  Agent,  the  Administrative
Agent may apply any sums then present in the Curtailment  Account to the payment
of the Loans in any order in its sole  discretion.  Until expended or applied as
above provided,  amounts  deposited in the Curtailment  Account shall constitute
additional security for the Loans. The Borrower shall be permitted on any one or
more  occasions  to  deliver  to  the  Administrative  Agent  an  unconditional,
irrevocable  letter of credit issued for the benefit of Administrative  Agent by
an Acceptable  Issuer, in form and substance  satisfactory to the Administrative
Agent,  and having an  expiration  date not earlier than one year  following its
issuance date (as such letter of credit, may be renewed,  extended, or replaced,
the "Letter of Credit") in substitution for amounts deposited in the Curtailment
Account.  Upon the Administrative  Agent's receipt and acceptance of such Letter
of  Credit,  Borrower  shall be  entitled  to  receive a  disbursement  from the
Curtailment  Account (but not any

                                       37
<PAGE>

other  Account) in an amount equal to the face amount of the Letter of Credit so
received and accepted by the Administrative  Agent. Borrower agrees that no less
than thirty (30) days prior to the  expiration  date of the Letter of Credit and
each renewal or extension  thereof (until the Letter of Credit has been released
as provided below), Borrower shall deliver to the Administrative Agent a renewal
or  extension  of the Letter of Credit for a term of not less than one year,  in
form,  content  satisfactory  to  the  Administrative  Agent  and  issued  by an
Acceptable Issuer.  The Administrative  Agent shall be entitled to draw upon the
Letter of Credit when any Event of Default exists (including, Borrower's failure
to deliver a renewal or extension of the Letter of Credit as required  above) or
if the  Administrative  Agent  believes that its rights to draw on the Letter of
Credit could be in jeopardy.  Without limiting the foregoing, the Administrative
Agent  shall  also be  entitled  to draw on the  Letter of Credit and apply such
proceeds to the Loans if the credit rating or financial condition of the issuing
bank is no longer acceptable to the  Administrative  Agent.  Following a draw by
the  Administrative  Agent  on  the  Letter  of  Credit  solely  because  of the
deterioration of the  creditworthiness  of the issuing bank, the  Administrative
Agent will  direct the  Depository  Bank to disburse  such  proceeds to Borrower
provided (1) Borrower deliver to the  Administrative  Agent a replacement Letter
of Credit within ten (10) days of the  Administrative  Agent's  draw,  (2) there
exists no Event of Default or Potential  Default,  and (3) Borrower  pays all of
the  Administrative  Agent's fees and expenses in connection  with such draw and
disbursement.  No draw by the Administrative Agent on the Letter of Credit shall
cure or be deemed to cure any Event of  Default or limit in any  respect  any of
the Administrative Agent's or the Lenders' remedies under the Loan Documents, it
being  understood  that the  Administrative  Agent's and the Lenders' rights and
remedies  hereunder  shall be cumulative  and the  Administrative  Agent and the
Lenders  shall have no  obligations  to apply the proceeds of any draw to missed
installments  or other amounts then due and unpaid under the Loans.  Proceeds of
any draw  upon the  Letter  of  Credit  (after  reimbursement  of any  costs and
expenses,  including  attorneys'  fees  and  reimbursements,   incurred  by  the
Administrative  Agent in  connection  with such  draw)  shall be  applied by the
Administrative  Agent  to the  payment  of the  amounts  owing  under  the  Loan
Documents,  in such manner as the Administrative Agent determine, or retained in
the Curtailment Account in accordance with this Section. No delay or omission of
the  Administrative  Agent or the Lenders in exercising any right to draw on the
Letter of Credit shall impair any such right,  or shall be construed as a waiver
of, or  acquiescence  in, any Event of Default.  Provided no Event of Default or
Potential Default exists, the  Administrative  Agent and the Lenders shall, upon
request,  release its rights in the Letter of Credit and surrender the Letter of
Credit to the issuing bank after the earlier of: (i) payment in full of all sums
due, and  performance of all  obligations,  under the Loan Documents or (ii) the
depositing by the Borrower into the Curtailment Account of all amounts which, as
of such date,  would have been required to have been  deposited by Borrower into
the Curtailment Account.

          (4) The  insufficiency  of funds  on  deposit  in the Cash  Management
Account shall not absolve Borrower of the obligation to make any payments as and
when due  pursuant  to this  Agreement  and the other Loan  Documents,  and such
obligations shall be separate and independent,  and not conditioned on any event
or circumstance whatsoever.

          (5)  All  funds  on  deposit  in  any of the  Accounts  following  the
occurrence  and during the  continuance of an Event of Default may be applied by
the Administrative  Agent in such order and priority as the Administrative Agent
shall determine.

                                       38
<PAGE>

     Section  3.8.  Payments  Received  Under  the  Cash  Management  Agreement.
Notwithstanding  anything to the  contrary  contained  in this  Agreement or the
other Loan  Documents,  and  provided  no Event of Default has  occurred  and is
continuing,  Borrower's  obligations  with  respect  to the  monthly  payment of
interest  and  principal  (if any) and amounts  due for the Taxes and  insurance
premiums,  the Capital Improvement Reserve and the Leasing Reserve and any other
payment  due  pursuant to this  Agreement  or any other Loan  Document  shall be
deemed  satisfied  to the extent  sufficient  amounts are  deposited in the Cash
Management Account and are available to the  Administrative  Agent (on behalf of
the  Lenders)  to satisfy  such  obligations  on the dates each such  payment is
required,  regardless  of  whether  any of such  amounts  are so  applied by the
Administrative Agent.

     Section 3.9.  Security Deposit Account.  Subject to the requirements of any
existing leases at the Project and/or any applicable legal requirements,  on the
date hereof,  Borrower is depositing  $225,943.03  (with interest  thereon since
October 1, 1999) into the Security Deposit Account,  which amount  represents an
amount not less than the aggregate amount of all cash security deposits required
to held by Borrower under the terms of the then existing  leases at the Project.
Subject to any applicable  legal  requirements,  from and after the date hereof,
Borrower  shall  deposit  or cause to be  deposited  into the  Security  Deposit
Account (or  otherwise  remit to  Administrative  Agent for its deposit into the
Security Deposit Account) all cash security  deposits provided by any tenants of
the Project in accordance with their leases  (including the cash proceeds of any
non-cash security deposits and any amounts required to be provided by any tenant
as a result of the Borrower's utilization of such tenant's cash security) as and
when received by Borrower.  Subject to the  requirements of any applicable legal
requirements,  whenever the Borrower shall certify to the Administrative  Agent,
pursuant to a  certification  in the form of Schedule  3.9 hereto (a) either (i)
that the Borrower is entitled to receive and apply any tenant security  deposits
or (ii) that the Borrower is obligated to refund a tenant security  deposit to a
tenant and (b) that the amounts  remaining in the Security Deposit Account after
such receipt and application or refund by Borrower, as applicable,  are not less
than the  aggregate  amount of all cash  security  deposits  required to held by
Borrower under the terms of the existing  leases at the Project,  Administrative
Agent shall direct the Depository Bank to transfer to the Borrower  Account (or,
if so directed in writing by Borrower and the Mezzanine Lender, to the Mezzanine
Loan Lockbox  Account,  except that,  during a Trigger Period,  all such amounts
shall be transferred to the Curtailment Account),  within ten (10) Business Days
after the Administrative Agent's receipt of such certification, from the amounts
credited to the Security  Deposit  Account,  the amount specified by Borrower in
such  certification  as the amount to which  Borrower is entitled to receive and
apply in accordance with the applicable lease.

                                    ARTICLE 4

                              ENVIRONMENTAL MATTERS

     Section 4.1. Certain Definitions.  As used herein, the following terms have
the meanings indicated:

          (1)  "Environmental  Laws"  means  any  federal,  state or  local  law
(whether  imposed by statute,  or  administrative  or judicial  order, or common
law), now or hereafter

                                       39
<PAGE>

enacted,  governing  health,  safety,  industrial  hygiene,  the  environment or
natural resources,  or Hazardous  Materials,  including,  such laws governing or
regulating the use, generation, storage, removal, recovery, treatment, handling,
transport, disposal, control, discharge of, or exposure to, Hazardous Materials.

          (2) "Hazardous  Materials"  means (a) petroleum or chemical  products,
whether in liquid,  solid,  or  gaseous  form,  or any  fraction  or  by-product
thereof,  (b) asbestos or  asbestos-containing  materials,  (c)  polychlorinated
biphenyls  (pcbs),  (d)  radon  gas,  (e)  underground  storage  tanks,  (i) any
explosive or radioactive  substances,  (g) lead or lead-based  paint, or (h) any
other  substance,  material,  waste or  mixture  which  is or  shall be  listed,
defined, or otherwise determined by any governmental  authority to be hazardous,
toxic, dangerous or otherwise regulated,  controlled or giving rise to liability
under any Environmental Laws.

     Section 4.2.  Representations  and  Warranties  on  Environmental  Matters.
Borrower  represents  and warrants to the  Administrative  Agent and the Lenders
that, to Borrower's knowledge,  except as set forth in the Site Assessment,  (1)
no  Hazardous  Material  is  now  or  was  formerly  used,  stored,   generated,
manufactured,  installed, treated, discharged,  disposed of or otherwise present
at or about the Project or any  property  adjacent  to the  Project  (except for
cleaning  and other  products  currently  used in  connection  with the  routine
maintenance  or repair of the  Project  in full  compliance  with  Environmental
Laws),   (2)  all  permits,   licenses,   approvals  and  filings   required  by
Environmental  Laws have been obtained,  and the use, operation and condition of
the Project do not, and did not previously,  violate any Environmental Laws, (3)
no civil, criminal or administrative action, suit, claim, hearing, investigation
or proceeding has been brought or been threatened, nor have any settlements been
reached by or with any  parties  or any liens  imposed  in  connection  with the
Project  concerning  Hazardous  Materials  or  Environmental  Laws  and  (4)  no
underground storage tanks exist at the Project.

     Section 4.3. Covenants on Environmental Matters.

          (1)  Borrower  shall (a)  comply  strictly  and in all  respects  with
applicable  Environmental Laws; (b) notify the Administrative  Agent immediately
upon Borrower's  discovery of any spill,  discharge,  release or presence of any
Hazardous  Material at, upon, under,  within or otherwise  affecting the Project
(other  than de minimis  amounts  not  violating  any  Environmental  Law);  (c)
promptly  remove such  Hazardous  Materials  and  remediate  the Project in full
compliance with  Environmental  Laws and in accordance with the  recommendations
and specifications of an independent  environmental  consultant  approved by the
Administrative  Agent;  and (d)  promptly  forward to the  Administrative  Agent
copies of all orders, notices, permits, applications or other communications and
reports in connection with any spill, discharge,  release or the presence of any
Hazardous  Material or any other matters relating to the  Environmental  Laws or
any similar laws or regulations, as they may affect the Project or Borrower.

          (2) Borrower  shall not cause,  shall prohibit any other Person within
the  control of  Borrower  from  causing,  and shall use  prudent,  commercially
reasonable  efforts to prohibit other Persons  (including  tenants) from causing
(a)  any  spill,  discharge  or  release,  or  the  use,  storage,   generation,
manufacture,  installation,  or disposal,  of any Hazardous  Materials at, upon,
under,  within or about  the  Project  or the  transportation  of any  Hazardous
Materials to or from the

                                       40
<PAGE>

Project  (except for cleaning and other  products  used in  connection  with the
routine  maintenance or repair of the Project and products  customarily  used by
office tenants,  in each case in full compliance with  Environmental  Laws), (b)
any  underground  storage  tanks  to be  installed  at the  Project,  or (c) any
activity that requires a permit or other  authorization under Environmental Laws
to be conducted at the Project.

          (3) Borrower shall provide to the Administrative  Agent, at Borrower's
expense promptly upon the written request of the Administrative  Agent from time
to time,  a Site  Assessment  or, if required by the  Administrative  Agent,  an
update to any existing Site Assessment, to assess the presence or absence of any
Hazardous  Materials  and the  potential  costs in  connection  with  abatement,
cleanup or removal of any Hazardous  Materials found on, under, at or within the
Project. Borrower shall pay the cost of no more than one such Site Assessment or
update requested by Administrative Agent during the term of the Loan, unless the
Administrative  Agent's  request  for a Site  Assessment  or  update is based on
information  provided under Section 4.3(1), a reasonable  suspicion of Hazardous
Materials at or near the Project, a breach of representations under Section 4.2,
or an Event of Default.

          (4)  Borrower  shall,  at its sole cost and  expense,  diligently  and
continuously carry out (or cause to be diligently and continuously carried out),
the operations, abatement and maintenance plan for asbestos at the Project dated
December 2, 1999 and prepared by Hillman Environmental Company, Inc.

     Section 4.4.  Allocation of Risks and Indemnity.  As between Borrower,  the
Administrative  Agent  and  the  Lenders,  all  risk  of  loss  associated  with
non-compliance  with  Environmental  Laws, or with the presence of any Hazardous
Material at, upon,  within,  contiguous  to or otherwise  affecting the Project,
shall lie solely with Borrower.  Accordingly,  Borrower shall bear all risks and
costs  associated with any loss,  damage or liability  therefrom,  including all
costs of removal of  Hazardous  Materials or other  remediation  required by the
Administrative  Agent or by law.  Borrower shall indemnify,  defend and hold the
Administrative  Agent  and the  Lenders  harmless  from and  against  all  loss,
liabilities,  damages, claims, costs and expenses (including reasonable costs of
defense) arising out of or associated,  in any way, with the non-compliance with
Environmental Laws, or the existence of Hazardous Materials in, on, or about the
Project,  or a breach of any  representation,  warranty or covenant contained in
this Article 4, whether based in contract,  tort,  implied or express  warranty,
strict  liability,  criminal  or civil  statute or common law,  including  those
arising  from  the  joint,   concurrent,   or  comparative   negligence  of  the
Administrative  Agent and the  Lenders;  however,  Borrower  shall not be liable
under such indemnification to the extent such loss,  liability,  damage,  claim,
cost or expense results solely from the  Administrative  Agent's or any Lender's
gross  negligence  or  willful  misconduct.  Borrower's  obligations  under this
Section  4.4 shall arise upon the  discovery  of the  presence of any  Hazardous
Material,  whether or not any governmental authority has taken or threatened any
action in connection with the presence of any Hazardous Material, and whether or
not the  existence  of any such  Hazardous  Material or  potential  liability on
account   thereof  is  disclosed  in  the  Site   Assessment.   The   Borrower's
indemnification  obligations in this Section 4.4 shall continue  notwithstanding
the  repayment  of the Loans or any  transfer  or sale of any  right,  title and
interest  in the  Project  (by  foreclosure,  deed  in lieu  of  foreclosure  or
otherwise),  except that, if, in the case of a repayment of the Loans in full or
a transfer or sale of the Project with the Administrative  Agent's prior written
approval (and without implying that any such approval will

                                       41
<PAGE>

be granted),  Borrower furnishes to the Administrative Agent a then current Site
Assessment (or an update to a prior Site  Assessment)  which neither  recommends
any further  assessment  or monitoring of the Project nor discloses any material
non-compliance  with  Environmental  Laws  at  the  Project  (as  determined  by
Administrative  Agent in its sole discretion),  then Borrower's  indemnification
obligations  under this  Section 4.4 shall  cease  (except  with  respect to any
matters which Administrative Agent shall have given notice to the Borrower on or
prior to such repayment or transfer).

     Section 4.5. No Waiver.  Notwithstanding any provision in this Article 4 or
elsewhere in the Loan Documents,  or any rights or remedies  granted by the Loan
Documents,  the Administrative  Agent and the Lenders do not waive and expressly
reserves all rights and benefits now or hereafter accruing to the Administrative
Agent and/or any Lenders  under the  "security  interest" or "secured  creditor"
exception under applicable  Environmental  Laws, as the same may be amended.  No
action taken by the Administrative  Agent and/or any Lender pursuant to the Loan
Documents shall be deemed or construed to be a waiver or  relinquishment  of any
such rights or benefits under the "security interest exception."

                                   ARTICLE 5

                                 LEASING MATTERS

     Section 5.1.  Representations and Warranties on Leases. Borrower represents
and warrants to the Administrative  Agent and the Lenders with respect to leases
of the Project  that except as  disclosed  in Schedule  5.1:  (1) to  Borrower's
knowledge,  the rent  roll  delivered  to the  Administrative  Agent is true and
correct in all material respects, and the leases are valid and in and full force
and effect; (2) the leases (including  amendments) are in writing, and there are
no oral agreements with respect thereto;  (3) the copies of the leases delivered
to the Administrative Agent are true and complete;  (4) to Borrower's knowledge,
neither the landlord nor any tenant is in default  under any of the leases;  (5)
Borrower has no knowledge of any notice of  termination  or default with respect
to any lease;  (6) Borrower  has not assigned or pledged any of the leases,  the
rents or any interests therein except to the Administrative  Agent (on behalf of
the Lenders);  (7) no tenant or other party has an option to purchase all or any
portion of the Project; (8) no tenant has the right to terminate its lease prior
to expiration of the stated term of such lease, except in the case of a casualty
or condemnation of the Project; (9) as of the date hereof, no tenant has prepaid
more than one month's rent in advance (except for bona fide security  deposits);
and (10) all tenant  security  deposits  paid in cash by tenants under leases at
the Project (and the cash proceeds of any non-cash  security  deposits  drawn or
otherwise  realized  upon by  Borrower)  shall be  deposited  into the  Security
Deposit Account as and when received by the Borrower.

     Section 5.2. Lease;  Approval Rights.  Borrower shall not enter into, renew
(except  pursuant  to  renewal  rights  contained  in  existing  Major  Leases),
terminate or amend (other than as required by a Major  Lease,  e.g.,  confirming
delivery or commencement  dates,  etc.) in any material  respect any Major Lease
after the date hereof without first  obtaining the prior written  consent of the
Administrative  Agent,  which  consent  shall not be  unreasonably  withheld  or
delayed, provided that (a) there exists no Potential Default or Event of Default
and (b) the Major

                                       42
<PAGE>

Lease  is  on  terms  and  conditions   (including  rental  rates  and  landlord
concessions)  which  are  commercially  reasonable  at the  time  the  lease  is
executed.  Prior to entering into any Major Lease (or a renewal (except pursuant
to renewal  rights  contained  in then  existing  Major  Leases),  amendment  or
termination thereof), the Borrower shall deliver to the Administrative Agent the
following (collectively, the "Major Lease Term Sheet Package"): (i) a final term
sheet in a form reasonably  acceptable to Administrative Agent (the "Major Lease
Term  Sheet")  containing  all the material  terms of the proposed  Major Lease,
including, without limitation, the identity of the proposed tenant and (ii) such
information  with  respect  to  the  prospective  tenant  as  shall  permit  the
Administrative  Agent to assess such proposed tenant's  business,  character and
creditworthiness.  Within  fifteen (15) Business  Days after the  Administrative
Agent shall have received a Major Lease Term Sheet Package,  the  Administrative
Agent shall either  consent or refuse to consent to such Major Lease Term Sheet.
If the Administrative  Agent shall refuse to consent to any proposed Major Lease
Term Sheet, the  Administrative  Agent shall promptly forward to the Borrower in
reasonable  detail the reasons for such  refusal.  If the  Administrative  Agent
shall fail to respond within such fifteen (15) Business Day period, Borrower may
notify the Administrative  Agent of such failure and if the Administrative Agent
shall fail to  respond  within  three (3)  Business  Days after  receipt of such
second  notice,  the  Administrative  Agent shall be deemed to have consented to
such proposed Major Lease Term Sheet. If the Administrative  Agent shall approve
(or be deemed to have  approved)  the Major  Lease Term  Sheet,  Borrower  shall
deliver to Administrative  Agent the first draft of the proposed Major Lease and
all  subsequent  drafts of such proposed  Major Lease.  Within ten (10) Business
Days after the  Administrative  Agent shall have received the final draft of the
proposed  Major Lease,  provided such final draft is on  substantially  the same
terms as the approved Major Lease Term Sheet, Administrative Agent shall consent
to such Major  Lease.  All leases  (regardless  of whether it is a Major  Lease)
shall (i) be on  commercially  reasonable  terms,  (ii) provide for market rents
(which shall be determined taking into account the applicable  operating expense
and real estate tax provisions,  tenant work allowance, tenant expenses and free
rent), and contain normal and customary subordination and attornment provisions.
Borrower shall deposit all cash tenant security  deposits (and the cash proceeds
of all non-cash security  deposits) in the Security Deposit Account.  Within ten
(10) days after the  Administrative  Agent's request,  Borrower shall furnish to
the Administrative Agent a statement of all tenant security deposits, and copies
of all leases not previously delivered to the Administrative Agent, certified by
Borrower  as  being  true and  correct.  In  addition  to the  foregoing,  it is
understood  and  agreed  that any  future  lease,  lease  modification  or lease
extension  (except  for  lease  extensions  expressly  permitted  under or lease
modifications  expressly  required  under  the  terms of  existing  Leases)  for
premises  consisting of 100,000 or more  rentable  square feet may be subject to
the approval of the Majority Lenders.

     Section 5.3.  Covenants.  Borrower shall (1) perform the obligations  which
Borrower is required to perform under the leases; (2) enforce, in a commercially
reasonable manner, the obligations to be performed by the tenants;  (3) promptly
furnish  to the  Administrative  Agent any  notice  of  default  or  termination
received by Borrower from any tenant,  and any notice of default or  termination
given by Borrower to any tenant;  (4) not collect any rents for more than thirty
(30) days in advance of the time when the same shall become due,  except for (x)
bona fide  security  deposits  which are  deposited  into the  Security  Deposit
Account and (y)  pre-paid  rents which shall be retained in the Cash  Management
Account until due and payable under the applicable  lease,  with Borrower hereby
agreeing  to  advise  Administrative  Agent  and the  Depository  Bank as to any
prepayment of rent more than thirty (30) days in advance of the time when due as
and

                                       43
<PAGE>

when Borrower  becomes aware of the same and to deposit into the Cash Management
Account or otherwise  promptly remit to Administrative  Agent the full amount of
any such prepayment  promptly following  Borrower's receipt of the same; (5) not
enter into any ground lease or master lease of any part of the Project;  and (6)
not further assign or encumber any lease, and any action in violation of clauses
(5),  and  (6) of  this  Section  5.3  shall  be  void  at the  election  of the
Administrative Agent.

     Section 5.4.  Tenant  Estoppels.  At the  Administrative  Agent's  request,
Borrower  shall obtain and furnish to the  Administrative  Agent,  to the extent
required to be delivered by tenants under existing leases, (1) written Estoppels
in form and substance  satisfactory  to the  Administrative  Agent,  executed by
tenants under leases in the Project and  confirming  the term,  rent,  and other
provisions and matters relating to the leases and (2) written  subordination and
attornment agreements,  in form and substance satisfactory to the Administrative
Agent,  executed by tenants  under leases in the Project,  whereby,  among other
things,  such  tenants  subordinate  their  interest  in the Project to the Loan
Documents  and  agree to attorn to the  Administrative  Agent (on  behalf of the
Lenders) and its  successors  and assigns upon  foreclosure or other transfer of
the Project after an Event of Default.

                                   ARTICLE 6

                         REPRESENTATIONS AND WARRANTIES

     Borrower  represents  and  warrants  to the  Administrative  Agent  and the
Lenders that:

     Section 6.1. Organization and Power.

          (1)  Borrower  and  each  Borrower  Party is duly  organized,  validly
existing and in good  standing  under the laws of the state of its  formation or
existence,  and is in  compliance  with legal  requirements  applicable to doing
business in the State.  Borrower is not a "foreign person" within the meaning of
ss. 1445(f)(3) of the Code.

          (2) As of the date hereof,  (a) Apollo Real Estate Advisors,  L.P. (or
any  one or more  investment  funds  managed  by or  other  entities  owned  and
controlled by Apollo Real Estate Advisors,  L.P.) owns (on a fully undiluted and
unencumbered  basis) 38.1% of the issued and outstanding shares of voting common
stock of the REIT,  thereby entitling Apollo Real Estate Advisors,  L.P. (or any
one or more  investment  funds managed by or other entities owned and controlled
by  Apollo  Real  Estate  Advisors,  L.P.) to  appoint  four (4) of the nine (9)
members of the board of  directors  of the REIT,  and (b) the REIT owns,  in the
aggregate, either directly or indirectly, 95% of the beneficial interests in the
Borrower and the Project.

     Section  6.2.  Validity of Loan  Documents.  The  execution,  delivery  and
performance by Borrower and each Borrower Party of the Loan  Documents:  (1) are
duly authorized and do not require the consent or approval of any other party or
governmental authority which has not been obtained; and (2) will not violate any
law or result in the  imposition  of any lien,  charge or  encumbrance  upon the
assets of any such party, except as contemplated by the Loan Documents. The Loan
Documents  constitute the legal,  valid and binding  obligations of Borrower and
each

                                       44
<PAGE>

Borrower Party,  enforceable in accordance with their respective terms,  subject
to applicable  bankruptcy,  insolvency,  or similar laws generally affecting the
enforcement of creditors' rights.

     Section 6.3. Liabilities; Litigation.

          (1) The financial statements (or tax returns, as applicable) delivered
by Borrower and each  Borrower  Party are true and correct  with no  significant
change since the date of preparation. Except as disclosed in Schedule 6.3 and in
such  financial  statements,  there are no  liabilities  (fixed  or  contingent)
affecting the Project,  Borrower or any Borrower  Party.  Except as disclosed in
such financial statements,  there is no litigation,  administrative  proceeding,
investigation or other legal action (including any proceeding under any state or
federal  bankruptcy or insolvency law) pending or, to the knowledge of Borrower,
threatened,  against  the  Project,  Borrower  or any  Borrower  Party  which if
adversely  determined  could have a material  adverse effect on such party,  the
Project or the Loans.

          (2) Neither  Borrower nor any Borrower Party is  contemplating  either
the filing of a petition by it under state or federal  bankruptcy  or insolvency
laws or the liquidation of all or a major portion of its assets or property, and
neither   Borrower  nor  any  Borrower   Party  has   knowledge  of  any  Person
contemplating the filing of any such petition against it.

     Section 6.4. Taxes and Assessments. The Project is comprised of one or more
parcels,  each of  which  constitutes  a  separate  tax lot  and  none of  which
constitutes  a  portion  of any  other  tax lot.  There  are no  pending  or, to
Borrower's best  knowledge,  proposed,  special or other  assessments for public
improvements or otherwise affecting the Project,  nor are there any contemplated
improvements   to  the  Project  that  may  result  in  such  special  or  other
assessments.

     Section 6.5. Other Agreements;  Defaults. Neither Borrower nor any Borrower
Party is a party to any  agreement or  instrument or subject to any court order,
injunction,  permit,  or restriction which might adversely affect the Project or
the business,  operations,  or condition (financial or otherwise) of Borrower or
any Borrower Party.  Neither  Borrower nor any Borrower Party is in violation of
any  agreement  which  violation  would have an adverse  effect on the  Project,
Borrower,  or any Borrower Party or Borrower's or any Borrower Party's business,
properties, or assets, operations or condition, financial or otherwise.

     Section 6.6. Compliance with Law.

          (1)  Borrower and each  Borrower  Party have all  requisite  licenses,
permits,  franchises,   qualifications,   certificates  of  occupancy  or  other
governmental  authorizations  to own, lease and operate the Project and carry on
its  business,  and the  Project  is in  compliance  with all  applicable  legal
requirements  and is free  of  structural  defects,  and  all  building  systems
contained therein are in good working order,  subject to ordinary wear and tear.
The Project does not constitute,  in whole or in part, a legally  non-conforming
use under applicable legal requirements;

          (2) No condemnation has been commenced or, to Borrower's knowledge, is
contemplated  with  respect  to all or any  portion  of the  Project  or for the
relocation of roadways providing access to the Project; and

                                       45
<PAGE>

          (3) The  Project has  adequate  rights of access to public ways and is
served by adequate water, sewer, sanitary sewer and storm drain facilities.  All
public  utilities  necessary or  convenient to the full use and enjoyment of the
Project are located in the public  right-of-way  abutting the  Project,  and all
such  utilities  are connected so as to serve the Project  without  passing over
other  property,  except to the  extent  such  other  property  is  subject to a
perpetual easement for such utility benefiting the Project.  All roads necessary
for the full  utilization  of the  Project  for its  current  purpose  have been
completed  and  dedicated  to  public  use  and  accepted  by  all  governmental
authorities.

     Section 6.7. Location of Borrower.  Borrower's  principal place of business
and chief executive offices are located at the address stated in Section 11.1.

     Section  6.8.  ERISA.  Borrower  has not  established  any pension plan for
employees  which would cause  Borrower to be subject to the Employee  Retirement
Income Security Act of 1974, as amended.

     Section 6.9.  Margin  Stock.  No part of proceeds of the Loans will be used
for purchasing or acquiring any "margin stock" within the meaning of Regulations
T, U or X of the Board of Governors of the Federal Reserve System.

     Section 6.10. Tax Filings.  Borrower and each Borrower Party have filed (or
have obtained effective extensions for filing) all federal,  state and local tax
returns  required to be filed and have paid or made  adequate  provision for the
payment of all federal,  state and local taxes,  charges and assessments payable
by Borrower and each Borrower Party, respectively.

     Section 6.11. Solvency. Giving effect to the Loans, the fair saleable value
of Borrower's assets exceeds and will,  immediately  following the making of the
Loans,  exceed  Borrower's total  liabilities,  including,  without  limitation,
subordinated,  unliquidated,  disputed  and  contingent  liabilities.  The  fair
saleable  value of  Borrower's  assets is and will,  immediately  following  the
making of the Loans, be greater than Borrower's probable liabilities,  including
the  maximum  amount of its  contingent  liabilities  on its Debts as such Debts
become absolute and matured. Borrower's assets do not and, immediately following
the making of the Loans will not, constitute unreasonably small capital to carry
out its business as conducted or as proposed to be conducted.  Borrower does not
intend  to,  and does not  believe  that it will,  incur  Debts and  liabilities
(including  contingent  liabilities and other commitments) beyond its ability to
pay such Debts as they  mature  (taking  into  account the timing and amounts of
cash to be received  by Borrower  and the amounts to be payable on or in respect
of obligations of Borrower).

     Section 6.12. Full and Accurate Disclosure. No statement of fact made by or
on behalf of Borrower or any Borrower  Party in this  Agreement or in any of the
other Loan Documents or in any certificate, statement or questionnaire delivered
by Borrower or any  Borrower  Party in  connection  with the Loans  contains any
untrue  statement  of a  material  fact or  omits  to state  any  material  fact
necessary to make statements  contained herein or therein not misleading.  There
is no fact presently  known to Borrower or any Borrower Party which has not been
disclosed to the  Administrative  Agent which adversely  affects,  nor as far as
Borrower can  foresee,  might  adversely  affect,  the Project or the  business,
operations  or condition  (financial  or  otherwise) of Borrower or any Borrower
Party.

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<PAGE>

     Section 6.13. Single Purpose Entity. Borrower is a Single Purpose Entity.

     Section 6.14. Management Agreement.  The Management Agreement and the Asset
Management  Agreement are the only  agreements in existence  with respect to the
overall  operation or  management of the Project.  The copies of the  Management
Agreement and Asset Management  Agreement delivered to the Administrative  Agent
are true and  correct  copies,  and such  agreements  have not been  amended  or
modified.  None of the  parties  to such  agreements  is in  default  under such
agreements and neither the Manager nor the Asset Manager has any defense, offset
right or other right to withhold  performance under or terminate such agreements
other than in accordance with the terms thereof.

     Section  6.15.  Year 2000  Compliance.  Borrower is aware of the  potential
effect  of  the  problem   generally   known  as  "Year  2000   computer-related
dysfunction"  ("Year  2000").  All computers and  computer-dependent  systems of
Borrower,  its suppliers and vendors,  and such systems used in or in connection
with the Project, are able to function  notwithstanding Year 2000. Borrower will
promptly  notify the  Administrative  Agent in the event  Borrower  discovers or
determines  that any of the  above-referenced  computers  or systems will not be
Year 2000 compliant and will implement and carry out to completion  such actions
as may be  required  to  correct  such  non-compliance  as soon as  commercially
practicable.

     Section 6.16. No Conflicts. The execution, delivery and performance of this
Agreement  and the other Loan  Documents by Borrower  will not conflict  with or
result in a breach of any of the terms or provisions of, or constitute a default
under,  or  result  in the  creation  or  imposition  of  any  lien,  charge  or
encumbrance (other than pursuant to the Loan Documents) upon any of the property
or assets of Borrower pursuant to the terms of any indenture,  mortgage, deed of
trust, loan agreement,  operating  agreement or other agreement or instrument to
which  Borrower is a party or by which any of  Borrower's  property or assets is
subject,  nor will such action result in any violation of the  provisions of any
statute or any order, rule or regulation of any court or governmental  agency or
body having  jurisdiction  over  Borrower  or any of  Borrower's  properties  or
assets,  and  any  consent,  approval,  authorization,  order,  registration  or
qualification  of or with any court or any such  regulatory  authority  or other
governmental agency or body required for the execution, delivery and performance
by Borrower of this  Agreement or any other Loan Documents has been obtained and
is in full force and effect.

     Section 6.17. Title.  Borrower has good,  marketable and insurable title to
the Project,  free and clear of all Liens  whatsoever,  except for the Permitted
Encumbrances  and  such  other  Liens  as are  permitted  pursuant  to the  Loan
Documents.  The Mortgage  creates (and upon the  recordation  thereof and of any
related  financing  statements  there will be perfected) (1) a valid Lien on the
Project,  subject only to Permitted  Encumbrances and (2) security  interests in
and to, and collateral  assignments of, all personality  (including the leases),
all in  accordance  with the terms  thereof,  in each case  subject  only to any
applicable Permitted Encumbrances and such other Liens as are permitted pursuant
to the Loan  Documents.  There  are no claims  for  payment  for work,  labor or
materials  affecting  the Project which are or may become a Lien prior to, or of
equal  priority  with,  the Liens  created  by the Loan  Documents.  None of the
Permitted Encumbrances,  individually or in the aggregate,  materially interfere
with the  benefits of the  security  intended to be provided by the Mortgage and
this Agreement, materially and adversely

                                       47
<PAGE>

affect the value of the Project,  impair the use or operations of the Project or
impair Borrower's ability to pay its obligations in a timely manner.

     Section 6.18.  Use of Project.  The Project is being,  and will continue to
be, used  exclusively for general office and other  appurtenant and related uses
and, in the case of the ground and concourse floors of the Project, retail uses.

     Section 6.19.  Flood Zone. No portion of the  improvements  comprising  the
Project is located in an area  identified  by the Secretary of Housing and Urban
Development  or any  successor  thereto as an area having  special flood hazards
pursuant  to the  National  Flood  Insurance  Act of 1968,  the  Flood  Disaster
Protection Act of 1973 or the National Flood  Insurance Act of 1994, as amended,
or any successor law.

     Section  6.20.  Insurance.  Borrower has obtained and has  delivered to the
Administrative  Agent certified copies of all of the insurance  policies for the
Project  reflecting  the  insurance  coverages,   amounts  and  other  insurance
requirements  set forth in this  Agreement.  No claims  have been made under any
such  policy,  and no  Person,  including  the  Borrower,  has  done,  by act or
omission, anything which would impair the coverage of any such policy.

     Section 6.21.  Certificate  of  Occupancy;  Licenses.  All  certifications,
permits, licenses and approvals,  including without limitation,  certificates of
completion  and  occupancy  permits,  required for the legal use,  occupancy and
operation of the Project as an office  building  (with ground floor retail uses)
(collectively,  the  "Licenses")  have been  obtained  and are in full force and
effect.  Borrower shall keep and maintain all Licenses in full force and effect.
The  use  being  made  of the  Project  is in  conformity  with  any  applicable
certificate of occupancy issued for the Property.

     Section  6.22.  Physical  Condition.  Except as  disclosed  in the building
condition  reports  certified  to the  Administrative  Agent  and  delivered  in
connection  with the  initial  advance of the  Loans,  the  Project,  including,
without limitation, all buildings,  improvements, parking facilities, sidewalks,
storm drainage systems,  roofs,  plumbing systems, HVAC systems, fire protection
systems, electrical systems, equipment,  elevators,  exterior sidings and doors,
landscaping,  irrigation  systems  and all  structural  components,  are in good
condition,  order and repair in all material respects;  to Borrower's knowledge,
there exists no structural or other material  defects or damages in the Project,
whether latent or otherwise,  and Borrower has not received  written notice from
any insurance  company or bonding  company of any defects or inadequacies in the
Project,  or any part thereof,  which would adversely affect the insurability of
the same or cause the imposition of extraordinary premiums or charges thereon or
of any termination or threatened termination of any policy of insurance or bond.

     Section  6.23.  Boundaries.  All of the  Improvements  (as  defined  in the
Mortgage) lie wholly within the boundaries and building restriction lines of the
Project,  and no improvements on adjoining properties encroach upon the Project,
and no Improvements encroach upon or violate any easements or other encumbrances
upon  the  Project,   so  as  to  materially   adversely  affect  the  value  or
marketability  of the Project,  except those which are insured  against by title
insurance.

                                       48
<PAGE>

     Section  6.24.  Survey.  The  survey  for  the  Project  delivered  to  the
Administrative  Agent in connection with this Agreement does not fail to reflect
any material matter affecting the Project or the title thereto.

     Section 6.25.  Filing and Recording Taxes. All transfer taxes, deed stamps,
intangible taxes or other amounts in the nature of transfer taxes required to be
paid by any Person under  applicable legal  requirements  currently in effect in
connection  with the  transfer of the  Project to Borrower or any  transfer of a
controlling  interest  in  Borrower  have  been  paid.  All  mortgage,  mortgage
recording,  stamp,  intangible  or other  similar tax required to be paid by any
Person under  applicable  legal  requirements  currently in effect in connection
with the execution, delivery, recordation,  filing, registration,  perfection or
enforcement of any of the Loan Documents,  including,  without  limitation,  the
Mortgage, have been paid and, under current legal requirements,  the Mortgage is
enforceable  in  accordance  with its terms by the  Administrative  Agent or any
subsequent  holder  thereof (on behalf of the  Lenders),  subject to  applicable
bankruptcy,  insolvency,  or similar laws generally affecting the enforcement of
creditors' rights.

     Section 6.26.  Investment  Company Act.  Borrower is not (1) an "investment
company"  or a company  "controlled"  by an  "investment  company,"  within  the
meaning  of the  Investment  Company  Act of 1940,  as  amended;  (2) a "holding
company" or a "subsidiary  company" of a "holding  company" or an "affiliate" of
either a "holding  company" or a "subsidiary  company" within the meaning of the
Public Utility  Holding  Company Act of 1935, as amended;  or (3) subject to any
other federal or state law or regulation  which purports to restrict or regulate
its ability to borrow money.

     Section 6.27.  Interest Rate Protection  Agreement.  A complete and correct
copy of the Interest Rate Protection  Agreement is attached hereto as Exhibit I.
The  Interest  Rate  Protection  Agreement  is in  full  force  and  effect  and
enforceable  in accordance  with its terms,  subject to  applicable  bankruptcy,
insolvency or similar laws  generally  affecting the  enforcement  of creditors'
rights.

                                   ARTICLE 7

                               FINANCIAL REPORTING

     Section 7.1. Financial Statements.

          (1)  Monthly  Reports.  Within  thirty (30) days after the end of each
calendar month,  Borrower shall furnish to the Administrative  Agent (or, in the
case of item (f) below,  shall cause the transfer  agent for the REIT to furnish
to the Administrative Agent) (a) a detailed operating statement (showing monthly
activity for the calendar month just ended and  year-to-date)  stating Operating
Revenues,  Operating  Expenses,  operating  income  and Net  Cash  Flow  for the
calendar  month just ended,  (b) an updated  rent roll,  (c) a current  stacking
plan, (d) copies of all new leases (or amendments to any existing leases) at the
Project entered into during the calendar month just ended,  (e) a leasing status
report, (f) a list of the then current shareholders of the REIT indicating, with
respect to each shareholder,  the number of outstanding  shares owned by it and,
(g) as requested by the Administrative Agent, copies of bank statements

                                       49
<PAGE>

and bank reconciliations,  a general ledger, and other documentation  supporting
the information disclosed in the most recent financial statements.

          (2) Quarterly  Reports.  Within  forty-five (45) days after the end of
each calendar  quarter,  Borrower  shall furnish to the  Administrative  Agent a
current (as of the end of such Quarter)  balance sheet and a detailed  operating
statement (showing  quarterly activity and year-to-date)  prepared in accordance
with GAAP and stating Operating Revenues,  Operating Expenses,  operating income
and Net Cash Flow for the calendar  quarter  just ended and a written  statement
for each  Quarter  (other than the fourth  (4th)  Quarter of each year)  setting
forth any  variances  during such Quarter of more than $25,000 in the  aggregate
for any line item from the Approved Annual Budget for such Quarter.

          (3)  Annual  Reports.  Within  ninety  (90) days after the end of each
fiscal year of Borrower's  operation of the Project,  Borrower  shall furnish to
the  Administrative  Agent a current (as of the end of such fiscal year) balance
sheet and a detailed operating statement stating Operating  Revenues,  Operating
Expenses,  operating  income  and Net Cash  Flow for  each of  Borrower  and the
Project,  all  prepared in  accordance  with GAAP and audited by an  independent
certified  public  accountant  satisfactory  to  the  Administrative  Agent.  In
addition to the  foregoing,  Borrower  shall also deliver to the  Administrative
Agent copies of all United States  federal income tax returns for the Borrower's
general  partner  promptly  (and in any event within twenty (20) days) after the
general partner's filing of such income tax returns. Administrative Agent hereby
acknowledges  and agrees that Deloitte & Touche LLP and any other so-called "Big
5" accounting firm is satisfactory to the Administrative Agent.

          (4)  Certification;  Supporting  Documentation.  Each  such  financial
statement shall be in scope and detail satisfactory to the Administrative  Agent
and certified by (a) the chief financial representative of Borrower, in the case
of  quarterly   statements,   and  (b)  an  independent   certified   accountant
satisfactory  to the  Administrative  Agent,  in the case of annual  statements.
Administrative  Agent hereby  acknowledges and agrees that Deloitte & Touche LLP
and  any  other  so-called  "Big  5"  accounting  firm  is  satisfactory  to the
Administrative Agent.

     Section   7.2.   Other   Information.   Borrower   shall   deliver  to  the
Administrative  Agent  such  additional   information  regarding  Borrower,  its
subsidiaries,  its business,  any Borrower Party, and the Project within 30 days
after the Administrative Agent's request therefor.

     Section 7.3.  Annual  Budget.  Commencing  with the budget for the calendar
year  2000 and for each  calendar  year  thereafter,  Borrower  shall  submit to
Administrative  Agent for  Administrative  Agent's  written  approval  an annual
budget  (an  "Annual  Budget")  not later  than  December  20th of the  previous
calendar year, in form reasonably  satisfactory to Administrative  Agent setting
forth in  reasonable  detail  budgeted  monthly  Operating  Revenues and monthly
Operating Expenses for the Project. Administrative Agent shall have the right to
approve such Annual  Budget (such  approval not to be  unreasonably  withheld or
conditioned except during any period where Administrative Agent is taking action
to remove the Manager, in which event  Administrative Agent shall have the right
to exercise such approval  right in its sole  discretion)  and in the event that
Administrative  Agent  objects  to  the  proposed  Annual  Budget  submitted  by
Borrower,  Administrative  Agent shall advise Borrower of such objections within
fifteen  (15) days after  receipt  thereof (and deliver to Borrower a reasonably
detailed description of such

                                       50
<PAGE>

objections)  and Borrower  shall within five (5) days after receipt of notice of
any  such  objections  revise  such  Annual  Budget  and  resubmit  the  same to
Administrative  Agent.   Administrative  Agent  shall  advise  Borrower  of  any
objections  to such revised  Annual Budget (and deliver to Borrower a reasonably
detailed  description  of such  objections)  within five (5) days after  receipt
thereof and  Borrower  shall  promptly  revise the same in  accordance  with the
foregoing  procedures until the Administrative Agent approves (such approval not
to be  unreasonably  withheld  or  conditioned  except  during any period  where
Administrative  Agent is taking  action to remove the  Manager,  in which  event
Administrative Agent shall have the right to exercise such approval right in its
sole discretion) an Annual Budget;  provided,  however,  that if  Administrative
Agent shall not advise  Borrower of its objections to any proposed Annual Budget
within  the  applicable  time  period  set forth in this  subsection,  then such
proposed Annual Budget shall be deemed approved by Administrative  Agent (unless
a Trigger  Period  exists,  in which case the  proposed  Annual  Budget shall be
deemed disapproved). Each such Annual Budget approved by Administrative Agent in
accordance  with terms hereof shall  hereinafter  be referred to as an "Approved
Annual  Budget".  Until  such time that  Administrative  Agent  has  approved  a
proposed  Annual Budget,  the most recently  Approved Annual Budget shall apply,
provided  that such Approved  Annual Budget shall be adjusted to reflect  actual
increases in real estate taxes,  insurance  premiums and utilities  expenses and
shall  otherwise be adjusted to reflect any change during the preceding  year in
the Consumer Price Index.

     Section 7.4.  Audits.  Borrower  shall permit the  Administrative  Agent to
examine  such  records,  books and papers of  Borrower  which  reflect  upon its
financial condition and the income and expense relative to the Project.

                                   ARTICLE 8

                                    COVENANTS

     Borrower covenants and agrees with the Administrative Agent and the Lenders
as follows:

     Section 8.1. Due on Sale and Encumbrance; Transfers of Interests.

          (1) Without the prior written consent of the Administrative  Agent and
the Lenders (to the extent required under Section 11.2),

               (a) neither  Borrower nor any other Person  having an indirect or
     direct  ownership or beneficial  interest in Borrower shall (a) directly or
     indirectly sell, transfer, convey, mortgage, pledge, or assign any interest
     in the Project or any part thereof  (including any partnership,  membership
     or any  other  ownership  interest  in  Borrower);  (b)  further  encumber,
     alienate,  grant a Lien or grant any other  interest  in the Project or any
     part thereof  (including  any  partnership,  membership or other  ownership
     interest in Borrower),  whether voluntarily or involuntarily;  or (c) enter
     into any easement or other agreement  granting rights in or restricting the
     use or development of the Project;

               (b) no new general partner, member, or limited partner having the
     ability to control the affairs of Borrower  shall be admitted to or created
     in  Borrower  (nor

                                       51
<PAGE>

     shall any existing general partner or member or controlling limited partner
     withdraw  from  Borrower),  and  no  change  in  Borrower's  organizational
     documents  relating to control over  Borrower  and/or the Project  shall be
     effected;

               (c) no transfer shall be permitted  which would cause the REIT to
     own less than  ninety-five  percent  (95%) of the  beneficial  interest  in
     Borrower  and the Project and less than one hundred  percent  (100%) of the
     voting stock in the corporate general partner of Borrower; and

               (d) no transfer shall be permitted  which would cause Apollo Real
     Estate  Advisors,  L.P.  (or (i) any  investment  fund  managed by or other
     entity  controlled  by  Apollo  Real  Estate  Advisors,  L.P.  or (ii)  its
     principals  on the date hereof) to directly or  indirectly  own (on a fully
     diluted  and  unencumbered  basis) less than  thirty  percent  (30%) of the
     beneficial and economic interests in Borrower and the Project.

          (2)   Notwithstanding   anything  to  the  contrary  contained  herein
(including  Section  8.8)  or the  other  Loan  Documents,  but  subject  to the
provisions  of this  subsection  (2),  any Single  Purpose  Entity  (other  than
Borrower)  which  directly or indirectly  owns equity  interests in Borrower and
which is acceptable to the Administrative Agent (the "Mezzanine Borrower"), such
approval  not  to  be  unreasonably  withheld,  shall  be  permitted  to  obtain
additional  financing (a "Mezzanine Loan") from a Mezzanine Lender provided that
each of the following conditions is satisfied:

               (a) the principal  amount of the  Mezzanine  Loan does not exceed
     $25,000,000;

               (b) the Mezzanine Loan (a) is secured  primarily by a lien on the
     REIT's (i) 100%  ownership  interest in the capital stock of 1290 GP Corp.,
     the current  general partner of Borrower,  (ii) 94.05% limited  partnership
     interest in the Borrower and (iii) 100%  ownership  interest in the capital
     stock  of  237/1290  GP  Corp.,  and not by the  Project,  and (b) does not
     constitute an obligation of, or any lien upon any assets of, Borrower;

               (c) the  Loan-to-Value  Ratio immediately after the making of the
     Mezzanine  Loan,  assuming that the Mezzanine  Loan is part of the Loan and
     utilizing  an  Appraisal  dated (or updated) to a date not more than ninety
     (90) days prior to the making of the Mezzanine Loan, does not exceed 75%;

               (d) the Adjusted Debt Service  Coverage Ratio after the making of
     the Mezzanine Loan is at least (i) 1.2 to 1, assuming that the debt service
     payable on the Mezzanine Loan is not part of Debt Service,  and (ii) 1.1 to
     1,  assuming that the debt service  payable on the  Mezzanine  Loan (at the
     contract  rate  specified in the Mezzanine  Loan  documents) is part of the
     Debt Service;

               (e) the  Mezzanine  Loan shall have a scheduled  maturity date no
     earlier than the Maturity Date;

               (f) the Mezzanine Lender enters into an Intercreditor Agreement;

                                       52
<PAGE>

               (g)  Administrative  Agent  shall  have  received  an  opinion of
     counsel to the Mezzanine Lender covering certain organizational matters and
     the  enforceability  of the  Intercreditor  Agreement against the Mezzanine
     Lender,  it being  understood that the Mezzanine Loan documents may provide
     that  such  opinion  shall be at the sole  cost and  expense  of  Mezzanine
     Borrower;

               (h) No  Event of  Default  or  Potential  Default  exists  and is
     continuing;

               (i) Borrower and its general  partner  shall each remain a Single
     Purpose Entity;

               (j) Borrower shall reimburse Administrative Agent, not later than
     the date of the closing of the Mezzanine  Loan, for all costs and expenses,
     including  attorneys'  fees  and  disbursements  and all  appraisal  costs,
     incurred or to be incurred by  Administrative  Agent in connection with the
     Mezzanine Loan; and

               (k) the terms, conditions and structure of the Mezzanine Loan and
     the Mezzanine Loan documents  (including,  without limitation,  the payment
     terms) are otherwise acceptable to the Administrative Agent.

The  determination as to whether the conditions set forth in this subsection (2)
have  been  satisfied  shall  be  made  by  Administrative  Agent  in  its  sole
discretion.  At the time of the closing of the Mezzanine Loan, at the request of
the Borrower, the Administrative Agent shall certify to the Administrative Agent
as to the  principal  amount due on the Loans and  whether or not, to the actual
knowledge of the Administrative Agent, any Event of Default exists.

          (3)  Notwithstanding  the  foregoing,  however,  no  consent  shall be
required for a transfer or any subsequent transfer of any shareholder  interests
in the REIT, subject to Section 8.1(1)(d).

          (4)  Notwithstanding  the provisions of Section 8.1, any transfer of a
direct  ownership  interest in Borrower or its general  partner shall be further
subject to (x) no Potential  Default or Event of Default then existing,  (y) the
proposed transferee being a corporation, partnership, joint venture, joint-stock
company,  trust or  individual  approved in writing by each Lender  subject to a
Limiting Regulation in its discretion,  and (z) payment to Administrative  Agent
on behalf of Lenders of all costs and expenses incurred by Administrative  Agent
or any Lenders in connection with such transfer. Each Lender at the time subject
to a Limiting Regulation shall, within ten (10) days after receiving  Borrower's
notice of a  proposed  transfer  subject  to this  Section  8.1(4),  furnish  to
Borrower a certificate (which shall be conclusive absent manifest error) stating
that it is subject to a Limiting  Regulation,  whereupon  such Lender shall have
the approval  right  contained  in clause (y) above.  Each Lender which fails to
furnish such a certificate to Borrower  during such ten (10) day period shall be
automatically  and  conclusively   deemed  not  to  be  subject  to  a  Limiting
Regulation.  If any Lender subject to a Limiting  Regulation  fails to approve a
proposed  transferee under clause (y) above (any such Lender being herein called
a "Rejecting  Lender"),  Borrower,  upon three (3) Business Days notice, may (A)
notwithstanding  the terms of Sections  2.3(5),  prepay such Rejecting  Lender's
outstanding  Loans or (B) require that such Rejecting Lender transfer all of its
right, title and interest under this

                                       53
<PAGE>

Agreement  and such  Rejecting  Lender's  Note to any  bank or  other  financial
institution or any Eligible Assignee (a "Proposed  Lender") selected by Borrower
that is reasonably  satisfactory  to the  Administrative  Agent if such Proposed
Lender (x)  agrees to assume all of the  obligations  of such  Rejecting  Lender
hereunder,  and to purchase all of such Rejecting  Lender's Loans  hereunder for
consideration  equal  to the  aggregate  outstanding  principal  amount  of such
Rejecting  Lender's  Loans,  together with interest  thereon to the date of such
purchase (to the extent not paid by Borrower), and satisfactory arrangements are
made for  payment to such  Rejecting  Lender of all other  amounts  accrued  and
payable  hereunder  to such  Rejecting  Lender  as of the date of such  transfer
(including  any fees  accrued  hereunder  and any amounts  that would be payable
under Section  2.7(5) as if all such  Rejecting  Lender's  Loans were prepaid in
full on such date) and (y)  approves  the  proposed  transferee.  Subject to the
provisions of Section 11.25(2), such Proposed Lender shall be a "Lender" for all
purposes hereunder.  Without prejudice to the survival of any other agreement of
Borrower  hereunder,  the agreements of Borrower contained in Section 11.5 shall
survive for the benefit of such Rejecting  Lender under this Section 8.1(4) with
respect to the time period prior to such replacement.

          (5) As used in this Section 8.1,  "transfer"  shall  include the sale,
transfer, conveyance, mortgage, pledge, or assignment of the legal or beneficial
ownership  of (a) the  Project,  (b) any  partnership  interest  in any  general
partner in Borrower that is a partnership,  (c) any  membership  interest in any
member in Borrower that is a limited  liability company and (d) any voting stock
in any general partner in Borrower that is a corporation;  and "transfer"  shall
not include (i) the leasing of any space  within the Project so long as Borrower
complies  with the  provisions  of the Loan  Documents  relating to such leasing
activity, (ii) the transfers of limited partner interests in Borrower so long as
the provisions of Sections 8.1(2) and 8.1(3) are satisfied or (iii) transfers to
the  Mezzanine  Lender  pursuant  to the  exercise  of its  remedies  under  the
documentation  evidencing  and/or  securing the Mezzanine  Loan,  subject to the
requirements of the Intercreditor Agreement.

          Section 8.2. Taxes; Charges.

          (1) Borrower shall pay before any fine, penalty,  interest or cost may
be added  thereto,  and shall not enter into any  agreement  to defer,  any real
estate  taxes  and   assessments,   franchise  taxes  and  charges,   and  other
governmental  charges that may become a Lien upon the Project or become  payable
during the term of the Loans (collectively,  "Taxes"), and will promptly furnish
the  Administrative  Agent with  evidence of such payment;  however,  Borrower's
compliance with Section 3.4 of this Agreement relating to impounds for taxes and
assessments  shall,  with respect to payment of such taxes and  assessments,  be
deemed compliance with this Section 8.2. Borrower shall not suffer or permit the
joint  assessment  of the Project with any other real  property  constituting  a
separate tax lot or with any other real or personal property. Borrower shall pay
when due all claims and demands of mechanics,  materialmen,  laborers and others
which, if unpaid, might result in a Lien on the Project;  however,  Borrower may
contest the validity of such claims and demands or taxes so long as (1) Borrower
notifies  the  Administrative  Agent that it  intends  to contest  such claim or
demand, (2) Borrower provides the Administrative  Agent with an indemnity,  bond
or  other  security  satisfactory  to the  Administrative  Agent  (including  an
endorsement  to the  Administrative  Agent's  title  insurance  policy  insuring
against such claim or demand)  assuring the discharge of Borrower's  obligations
for such claims and demands,  including interest and penalties, and (3) Borrower
is diligently contesting the same by

                                       54
<PAGE>

appropriate legal proceedings in good faith and at its own expense and concludes
such contest prior to the tenth (10th) day preceding the earlier to occur of the
Maturity  Date or the date on which  the  Project  is  scheduled  to be sold for
non-payment.

          (2) Upon demand by the  Administrative  Agent,  Borrower shall pay all
mortgage,  mortgage recording, stamp, intangible or other similar taxes required
at any time to be paid by any Person under any applicable legal  requirements or
governmental interpretation thereof in connection with the execution,  delivery,
recordation, filing, registration,  perfection or enforcement of any of the Loan
Documents,  including,  without  limitation,  the  Mortgage,  so that  each Loan
Document,   including,  without  limitation,  the  Mortgage,  is  at  all  times
enforceable  in  accordance  with its terms by the  Administrative  Agent or any
subsequent  holder  thereof (on behalf of the  Lenders),  subject to  applicable
bankruptcy,  insolvency,  or similar laws generally affecting the enforcement of
creditors' rights.

          Section  8.3.  Control;  Management.  There  shall be no change in the
day-to-day  control and management of Borrower or any Borrower Party without the
prior written consent of the Administrative Agent. Borrower shall not terminate,
replace or appoint any property  manager or  terminate  or amend the  Management
Agreement for the Project (other than minor  modifications which do not increase
the fees  payable  under  the  Management  Agreement,  decrease  the term of the
Management Agreement or otherwise adversely affect the rights and obligations of
the Borrower thereunder) or permit the REIT to terminate, replace or appoint any
asset  manager or  terminate  or amend the Asset  Management  Agreement  for the
Project,  in either  case  without  the  Administrative  Agent's  prior  written
approval,  which approval shall not be unreasonably  withheld in the case of any
replacement  of the  Manager  with a prominent  and  experienced  real  property
management  company which, at the time of its engagement by Borrower,  has under
management  at least ten (10) first class  office  buildings  in the City of New
York  comprising not less than five (5) million square feet of net rentable area
in the  aggregate  (in each  case  exclusive  of the  Project).  Any  change  in
ownership or control of the Manager or the Asset  Manager shall be cause for the
Administrative  Agent to  re-approve  such Manager and  Management  Agreement or
Asset Manager and Asset Management Agreement, as the case may be. If at any time
the  Administrative  Agent consents to the appointment of a new manager or asset
manager, such new manager or asset manager and Borrower shall, as a condition of
the   Administrative   Agent's   consent,   execute  a  Manager's   Consent  and
Subordination  of Management  Agreement or an Asset Manager Comfort  Letter,  as
applicable,  in form and substance reasonably satisfactory to the Administrative
Agent.  Each manager and asset  manager  shall hold and  maintain all  necessary
licenses,  certifications  and  permits  required by law.  Borrower  shall fully
perform all of its covenants,  agreements and  obligations  under the Management
Agreement and shall cause the REIT to perform all of its  covenants,  agreements
and obligations under the Asset Management Agreement.

          Section  8.4.  Operation;  Maintenance;   Inspection.  Borrower  shall
observe and comply with all legal requirements applicable to the ownership,  use
and  operation  of the  Project.  Borrower  shall  maintain  the Project in good
condition and promptly repair any damage or casualty.  Borrower shall permit the
Administrative  Agent and the  Lenders  and their  agents,  representatives  and
employees, upon reasonable prior notice to Borrower and subject to the rights of
tenants at the Project,  to inspect the Project and conduct  such  environmental
and

                                       55
<PAGE>

engineering  studies as the  Administrative  Agent may  require,  provided  such
inspections  and studies do not materially  interfere with the use and operation
of the Project.

          Section 8.5. Taxes on Security. Borrower shall pay all taxes, charges,
filing, registration and recording fees, excises and levies payable with respect
to the Notes or the Liens created or secured by the Loan  Documents,  other than
income,  franchise and doing business taxes imposed on the Administrative  Agent
or any Lender.  If there shall be enacted any law (1)  deducting  the Loans from
the value of the Project for the purpose of taxation,  (2) affecting any Lien on
the Project,  or (3) changing  existing laws of taxation of mortgages,  deeds of
trust, security deeds, or debts secured by real property, or changing the manner
of collecting any such taxes,  Borrower shall promptly pay to the Administrative
Agent,  on demand,  all taxes,  costs and charges  for which the  Administrative
Agent or any Lender is or may be liable as a result thereof.

          Section 8.6.  Legal  Existence;  Name,  Etc.  Each of Borrower and the
general partner in Borrower shall preserve and keep in full force and effect its
existence as a Single  Purpose  Entity,  entity status,  franchises,  rights and
privileges under the laws of the state of its formation, and all qualifications,
licenses  and permits  applicable  to the  ownership,  use and  operation of the
Project.  Neither  Borrower nor any general  partner of Borrower  shall wind up,
liquidate,  dissolve, reorganize, merge, or consolidate with or into, or convey,
sell, assign, transfer,  lease, or otherwise dispose of all or substantially all
of its assets, or acquire all or substantially all of the assets of the business
of any Person.  Borrower  and each  general  partner in Borrower  shall  conduct
business  only in its own name and  shall not  change  its  name,  identity,  or
organizational  structure,  or the  location  of its chief  executive  office or
principal  place of business  unless  Borrower (a) shall have obtained the prior
written consent of the  Administrative  Agent to such change, and (b) shall have
taken all actions necessary or requested by the Administrative  Agent to file or
amend any financing statement or continuation statement to assure perfection and
continuation  of  perfection  of security  interests  under the Loan  Documents.
Borrower (and each general  partner in  Borrower),  if any,  shall  maintain its
separateness as an entity,  including  maintaining separate books,  records, and
accounts and observing corporate and partnership  formalities independent of any
other  entity,  shall  pay its  obligations  with its own  funds  and  shall not
commingle funds or assets with those of any other entity.

          Section 8.7. Affiliate Transactions. Without the prior written consent
of the  Administrative  Agent,  Borrower  shall not  engage  in any  transaction
affecting the Project with an Affiliate of Borrower.  Borrower hereby represents
that it and/or the REIT have entered into arrangements  with certain  Affiliates
for the provision by such  Affiliates  of certain  cleaning,  asset  management,
property management and tax consulting  services as more particularly  described
in the agreements  referenced in Schedule 8.7 hereto, true, correct and complete
copies of which have been  delivered to the  Administrative  Agent,  and each of
which is hereby approved by the Administrative Agent.

          Section 8.8. Limitation on Other Debt. Except as expressly provided in
Section 8.1, Borrower (and each general partner in Borrower,  if any) shall not,
without the prior written consent of the  Administrative  Agent and the Majority
Lenders,  incur any Debt other  than the Loans,  the  Interest  Rate  Protection
Agreement and trade and  operational  debt  described in  subsection  (o) of the
definition of Single Purpose Entity.

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<PAGE>

          Section 8.9. Further Assurances.  Borrower shall promptly (1) cure any
defects in the execution and delivery of the Loan Documents, and (2) execute and
deliver,  or cause to be  executed  and  delivered,  all such  other  documents,
agreements and instruments as the Administrative Agent may reasonably request to
further  evidence  and more fully  describe  the  collateral  for the Loans,  to
correct any  ministerial  or  scriveners  omissions  in the Loan  Documents,  to
perfect,  protect or preserve any liens created under any of the Loan Documents,
or to make any recordings,  file any notices, or obtain any consents,  as may be
necessary or appropriate in connection therewith.

          Section 8.10. Estoppel  Certificates.  Borrower,  within ten (10) days
after request,  shall furnish to the  Administrative  Agent a written statement,
duly  acknowledged,  setting  forth the amount  due on the  Loans,  the terms of
payment of the Loans,  the date to which  interest  has been paid,  whether  any
offsets or  defenses  exist  against the Loans and, if any are alleged to exist,
the nature thereof in detail, and such other matters as the Administrative Agent
reasonably may request;  provided,  however,  that any  out-of-pocket  costs and
expenses  reasonably  incurred by Borrower in complying  with any such  requests
made by the Administrative  Agent more than two (2) times during any twelve (12)
month period shall be payable by the Lenders.

          Section 8.11. Notice of Certain Events. Borrower shall promptly notify
the  Administrative  Agent of (1) any  Potential  Default  or Event of  Default,
together  with a  detailed  statement  of the  steps  being  taken to cure  such
Potential  Default or Event of  Default;  (2) any notice of default  received by
Borrower or any Borrower Party under other  obligations  relating to the Project
or  otherwise  material  to  Borrower's  business;  and (3) any  threatened  (in
writing) or pending  legal,  judicial or regulatory  proceedings,  including any
dispute between Borrower and any governmental  authority,  affecting Borrower or
the Project.

          Section 8.12.  Indemnification.  Borrower shall indemnify,  defend and
hold the Administrative  Agent and each Lender harmless from and against any and
all losses,  liabilities,  claims, damages,  expenses,  obligations,  penalties,
actions,  judgments,  suits,  costs  or  disbursements  of any  kind  or  nature
whatsoever,  including the reasonable fees and actual expenses of their counsel,
which may be imposed upon,  asserted against or incurred by any of them relating
to or arising  out of (1) the  Project or (2) any of the Loan  Documents  or the
transactions  contemplated  thereby,  including,  without  limitation,  (a)  any
accident,  injury  to or death  of  persons  or loss of or  damage  to  property
occurring  in,  on or about any of the  Project  or any part  thereof  or on the
adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets
or ways,  (b) any  inspection,  review  or  testing  of or with  respect  to the
Project,  (c) any  investigative,  administrative,  mediation,  arbitration,  or
judicial  proceeding,  whether or not the Administrative  Agent or any Lender is
designated a party thereto, commenced or threatened at any time (including after
the  repayment  of the Loans) in any way related to the  execution,  delivery or
performance  of  any  Loan  Document  or to  the  Project,  (d)  any  proceeding
instituted by any Person  claiming a Lien, and (e) any brokerage  commissions or
finder's fees claimed by any broker or other party in connection with the Loans,
the Project,  or any of the  transactions  contemplated  in the Loan  Documents,
except to the extent any of the  foregoing  (x) is caused by the  Administrative
Agent's or any Lender's gross  negligence or willful  misconduct,  in which case
the party to whom the gross  negligence or willful  misconduct  is  attributable
(but not any other party) shall not be entitled to the indemnification  provided
for hereunder to the extent of such gross negligence or willful  misconduct,  or
(y) arises  from a

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<PAGE>

dispute  among the Lenders or between the Lenders and the  Administrative  Agent
with  respect  to  their  respective  rights  and  obligations  under  the  Loan
Documents.

          Section 8.13. Payment For Labor and Materials.  Borrower will promptly
pay  when due all  bills  and  costs  for  labor,  materials,  and  specifically
fabricated  materials  incurred in  connection  with the Project,  except to the
extent the same are being diligently  contested by Borrower in good faith and by
proper legal proceedings,  where  appropriate,  and never permit to exist beyond
the due date  thereof in respect of the Project or any part  thereof any lien or
security  interest,  even though inferior to the liens and the security interest
hereof,  and in any event never  permit to be created or exist in respect of the
Project or any part thereof any other or  additional  lien or security  interest
other than the liens or  security  interests  hereof,  except for the  Permitted
Encumbrances.

          Section 8.14.  Alterations.  Borrower shall obtain the  Administrative
Agent's prior written consent,  which consent shall not be unreasonably withheld
or delayed,  to any  alterations  to any  improvements  that may have a material
adverse effect on Borrower's financial condition, the use, operation or value of
the  Project or the Actual Net  Operating  Income with  respect to the  Project,
other than (a) tenant  improvement  work performed  pursuant to the terms of any
lease  executed  on or before  the date  hereof,  (b)  tenant  improvement  work
performed  pursuant  to the terms and  provisions  of a lease and not  adversely
affecting  any  structural  component of any  improvements,  any utility or HVAC
system   contained  in  any   improvements  or  the  exterior  of  any  building
constituting  a part of any  improvements  at the  Project,  or (c)  alterations
performed in connection with the restoration of the Project after the occurrence
of a casualty in accordance with the terms and provisions of this Agreement.

Section 8.15.     Handicapped Access.

          (1)  Borrower  (a) agrees  that it shall use  commercially  reasonable
efforts  to  ensure  that  the  Project  shall  at all  times  comply  with  the
requirements  of the Americans with  Disabilities  Act of 1990, the Fair Housing
Amendments  Act of 1988,  all state and local  laws and  ordinances  related  to
handicapped  access  and all rules,  regulations,  and  orders  issued  pursuant
thereto  including,  without  limitation,  the Americans with  Disabilities  Act
Accessibility  Guidelines  for Buildings and Facilities  (collectively,  "Access
Laws") and (b) has no actual knowledge as to the Project's  non-compliance  with
any Access  Laws where the  failure to so comply  could have a material  adverse
effect  on the  Project  or on the  Borrower's  ability  to repay  the  Loans in
accordance with the terms hereof.

          (2)  Notwithstanding  any  provisions set forth herein or in any other
document  regarding the  Administrative  Agent's  approval of alterations of the
Project,  Borrower  shall  not alter  the  Project  in any  manner  which  would
materially  increase any Borrower's  responsibilities  for  compliance  with the
applicable Access Laws without the prior written approval of the  Administrative
Agent. The foregoing shall apply to tenant improvements  constructed by Borrower
or by any of its  tenants.  The  Administrative  Agent  may  condition  any such
approval  upon  receipt  of a  certificate  of  Access  Law  compliance  from an
architect, engineer, or other person reasonably acceptable to the Administrative
Agent.

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<PAGE>

          (3) Borrower agrees to give prompt notice to the Administrative  Agent
of the receipt by Borrower of any written complaints related to violation of any
Access  Laws  with  respect  to  the  Project  and of  the  commencement  of any
proceedings or investigations  which relate to compliance with applicable Access
Laws.

          Section 8.16. Interest Rate Protection Agreement.

          (1) Borrower shall maintain in full force and effect the Interest Rate
Protection  Agreement during the entire term of the Loans (including  during any
extension  period if  Borrower  duly  exercises  the  Extension  Option)  with a
counterparty   and  on  terms  and   conditions   which  are   satisfactory   to
Administrative  Agent in its  reasonable  discretion.  In the event that (1) the
Interest Rate Protection  Agreement is terminated for any reason or is otherwise
unenforceable  by the  Borrower or (2) the  Counterparty  to the  Interest  Rate
Protection   Agreement  fails  to  maintain  a  credit  rating  satisfactory  to
Administrative  Agent,  Borrower  shall  immediately  obtain  from  a  financial
institution  satisfactory to  Administrative  Agent a replacement  interest rate
protection  agreement  in  form  and  substance  similar  to the  Interest  Rate
Protection  Agreement  and deliver to  Administrative  Agent a  favorable  legal
opinion with respect to the  enforceability  of such  replacement  interest rate
protection  agreement  against the counterparty  thereunder.  Borrower shall not
provide the Project as security  for any  Interest  Rate  Protection  Agreement.
Borrower shall pledge to the Administrative Agent (on behalf of the Lenders) all
right,  title  and  interest  of  Borrower  in and to all  payments  owing to or
received by Borrower  under the  Interest  Rate  Protection  Agreement  (and any
replacement interest rate protection agreement) as additional collateral for the
Loans.

          (2) Borrower hereby  represents and warrants to  Administrative  Agent
and the Lenders  that,  in  connection  with the  Borrower's  entering  into the
Interest Rate  Protection  Agreement,  each of The Chase  Manhattan Bank and 237
Park Partners,  L.L.C. (the successor by conversion to 237 Park Partners,  L.P.)
have  released the Borrower  from any and all  liability  under or in connection
with a certain ISDA Master Agreement,  dated October 10, 1996 (together with all
supplements  thereto  and trade  confirmations  thereunder  and all  amendments,
supplements or  modifications  to any of the foregoing,  the "Existing Rate Swap
Agreement"),  among such  parties.  To the extent not available and delivered to
the  Administrative  Agent on the date  hereof,  Borrower  shall  deliver to the
Administrative  Agent,  within  fifteen (15) days after the date hereof,  (i) an
assignment, assumption and consent agreement among Borrower, The Chase Manhattan
Bank and the Counterparty  providing for an assignment of the Borrower's  rights
under the Existing Rate Swap Agreement to the Counterparty, an assumption of the
Borrower's   obligations   under  the  Existing  Rate  Swap   Agreement  by  the
Counterparty  and a  consent  to such  assignment  and  assumption  by The Chase
Manhattan  Bank,  (ii) a release of Borrower by each of The Chase Manhattan Bank
and 237 Park Partners,  L.L.C.  and (iii) a favorable legal opinion with respect
to the  enforceability  of the Interest Rate  Protection  Agreement  against the
Counterparty,  all in form  and  substance  satisfactory  to the  Administrative
Agent.

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<PAGE>

                                   ARTICLE 9

                                EVENTS OF DEFAULT
                                -----------------

          Each of the following  shall  constitute an Event of Default under the
Loans:

          Section  9.1.  Payments.  Borrower's  failure  to  pay  any  regularly
scheduled  installment of principal,  interest,  the Agency Fee, or other amount
due  under  the  Loan  Documents  (including,   without  limitation,   the  Swap
Reimbursement Obligations, the Swap Guaranty Fee and breakage costs and deposits
required to be made into the Accounts)  within five (5) days of (and  including)
the date when due, or Borrower's  failure to pay the Loans at the Maturity Date,
whether by acceleration or otherwise.

          Section 9.2.  Insurance.  Borrower's  failure to maintain insurance as
required  under  Section  3.1  of  this  Agreement.

          Section 9.3. Single Purpose Entity.  If Borrower breaches its covenant
under Section 6.13.

          Section 9.4. Taxes. If any of the Taxes are not paid when the same are
due and payable.

          Section 9.5. Sale, Encumbrance,  Etc. The sale, transfer,  conveyance,
pledge,  mortgage  or  assignment  of any  part  or all of the  Project,  or any
interest therein, or of any interest in Borrower, in violation of Section 8.1 of
this Agreement.

          Section 9.6.  Representations  and Warranties.  Any  representation or
warranty made in any Loan Document  proves to be untrue in any material  respect
when made or deemed made.

          Section 9.7.  Other  Encumbrances.  Any default  beyond any applicable
notice and/or cure periods under any document or instrument, other than the Loan
Documents, evidencing or creating a Lien on the Project or any part thereof.

          Section 9.8. Involuntary Bankruptcy or Other Proceeding.  Commencement
of an  involuntary  case or other  proceeding  against  Borrower or any Borrower
Party (each, a "Bankruptcy  Party") which seeks  liquidation,  reorganization or
other  relief  with  respect to it or its debts or other  liabilities  under any
bankruptcy,  insolvency or other similar law now or hereafter in effect or seeks
the appointment of a trustee, receiver,  liquidator,  custodian or other similar
official  of it or any of its  property,  and  such  involuntary  case or  other
proceeding  shall remain  undismissed or unstayed for a period of 60 days; or an
order for relief  against a  Bankruptcy  Party shall be entered in any such case
under the Federal Bankruptcy Code.

          Section 9.9. Voluntary  Petitions,  Etc.  Commencement by a Bankruptcy
Party  of  a   voluntary   case  or  other   proceeding   seeking   liquidation,
reorganization  or other  relief  with  respect  to itself or its Debts or other
liabilities under any bankruptcy, insolvency or other similar law or seeking the
appointment  of a trustee,  receiver,  liquidator,  custodian  or other  similar
official for it or any of its property,  or consent by a Bankruptcy Party to any
such relief or to the  appointment of or taking  possession by any such official
in an involuntary case or other proceeding  commenced  against it, or the making
by a Bankruptcy Party of a general  assignment for the

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<PAGE>

benefit of creditors,  or the failure by a Bankruptcy Party, or the admission by
a Bankruptcy  Party in writing of its inability,  to pay its debts  generally as
they become due, or any action by a Bankruptcy  Party to authorize or effect any
of the foregoing.

          Section 9.10. Covenants.  Borrower's failure to perform or observe any
of the  agreements  and covenants  contained in this  Agreement or in any of the
other Loan  Documents  and not  specified  above,  and the  continuance  of such
failure  for  twenty  (20)  days  after  notice by the  Administrative  Agent to
Borrower;  however,  subject to any  shorter  period  for curing any  failure by
Borrower as specified in any of the other Loan Documents, Borrower shall have an
additional  period of time  (not to  exceed  (120)  days) as may  reasonably  be
necessary  in the  Administrative  Agent's  judgment to cure such failure if (1)
such  failure  does not  involve  the  failure  to make  payments  on a monetary
obligation; (2) such failure cannot reasonably be cured within twenty (20) days;
(3) Borrower is diligently  undertaking  to cure such default;  and (4) Borrower
has provided the Administrative  Agent with security reasonably  satisfactory to
the  Administrative  Agent against any  interruption of payment or impairment of
collateral as a result of such continuing failure.

                                   ARTICLE 10

                                    REMEDIES
                                    --------

          Section 10.1. Remedies - Insolvency Events. Upon the occurrence of any
Event of Default described in Section 9.8 or 9.9, the obligations of the Lenders
to advance amounts  hereunder shall immediately  terminate,  and all amounts due
under the Loan Documents  immediately shall become due and payable,  all without
written notice and without presentment,  demand,  protest,  notice of protest or
dishonor,  notice  of intent  to  accelerate  the  maturity  thereof,  notice of
acceleration  of the  maturity  thereof,  or any other  notice of default of any
kind,  all of which are hereby  expressly  waived by Borrower;  however,  if the
Bankruptcy  Party  under  Section  9.8 or 9.9 is other than  Borrower,  then all
amounts due under the Loan Documents shall become immediately due and payable at
the  Administrative   Agent's  election,  in  the  Administrative  Agent's  sole
discretion.

          Section 10.2. Remedies - Other Events.  Except as set forth in Section
10.1 above, while any Event of Default exists, the Administrative  Agent may (1)
by written  notice to  Borrower,  declare  the entire  amount of the Loans to be
immediately  due and payable without  presentment,  demand,  protest,  notice of
protest or dishonor, notice of intent to accelerate the maturity thereof, notice
of acceleration of the maturity thereof, or other notice of default of any kind,
all of which  are  hereby  expressly  waived  by  Borrower,  (2)  terminate  the
obligation,  if any,  of the  Lenders  to  advance  amounts  hereunder,  and (3)
exercise all rights and remedies therefor under the Loan Documents and at law or
in equity.

          Section 10.3.  Lender's Right to Perform the Obligations.  If Borrower
shall fail, refuse or neglect to make any payment or perform any act required by
the Loan Documents,  then while any Event of Default exists,  and without notice
to or demand upon  Borrower and without  waiving or  releasing  any other right,
remedy or recourse  the  Administrative  Agent or any Lender may have because of
such Event of Default,  the Administrative Agent may (but shall not be

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<PAGE>

obligated  to) make such  payment or perform  such act for the account of and at
the expense of Borrower (including,  without limitation,  Administrative Agent's
reimbursements to GECC and/or Lenders of any sums paid by reason of a default by
Borrower  under the  Interest  Rate  Protection  Agreement,  including,  without
limitation,  any such reimbursement for Swap Reimbursement  Obligations and Swap
Guaranty  Fees),  and shall  have the right to enter upon the  Project  for such
purpose and to take all such action  thereon and with  respect to the Project as
it may deem necessary or appropriate. If the Administrative Agent shall elect to
pay any sum due with reference to the Project,  the Administrative  Agent may do
so  in  reliance  on  any  bill,  statement  or  assessment  procured  from  the
appropriate  governmental  authority or other issuer thereof  without  inquiring
into the  accuracy or validity  thereof.  Similarly,  in making any  payments to
protect  the  security  intended  to be  created  by  the  Loan  Documents,  the
Administrative  Agent  shall not be bound to inquire  into the  validity  of any
apparent or threatened adverse title, lien, encumbrance,  claim or charge before
making  an  advance  for  the  purpose  of  preventing  or  removing  the  same.
Additionally,  if any  Hazardous  Materials  affect or  threaten  to affect  the
Project,  the Administrative Agent may (but shall not be obligated to) give such
notices and take such  actions as it deems  necessary  or  advisable in order to
abate  the  discharge  of  any  Hazardous  Materials  or  remove  the  Hazardous
Materials.  Borrower shall indemnify,  defend and hold the Administrative  Agent
and the Lenders  harmless  from and  against  any and all  losses,  liabilities,
claims, damages, expenses,  obligations,  penalties,  actions, judgments, suits,
costs or disbursements of any kind or nature  whatsoever,  including  reasonable
attorneys'  fees and  disbursements,  incurred or accruing by reason of any acts
performed by the  Administrative  Agent or any Lender pursuant to the provisions
of this Section 10.3,  including  those arising from the joint,  concurrent,  or
comparative  negligence of the Administrative Agent and any Lender,  except as a
result and to the extent of the  Administrative  Agent's or any  Lender's  gross
negligence  or willful  misconduct.  All sums paid by the  Administrative  Agent
pursuant to this Section 10.3, and all other sums expended by the Administrative
Agent or any Lender to which it shall be  entitled to be  indemnified,  together
with  interest  thereon  at the  Default  Rate from the date of such  payment or
expenditure  until  paid,  shall  constitute  additions  to the Loans,  shall be
secured  by  the  Loan   Documents   and  shall  be  paid  by  Borrower  to  the
Administrative Agent upon demand.

                                   ARTICLE 11

                                  MISCELLANEOUS
                                  -------------

          Section 11.1.  Notices.  Any notice  required or permitted to be given
under this Agreement shall be in writing and either shall be mailed by certified
mail,  postage  prepaid,  return  receipt  requested,  or sent by overnight  air
courier service,  or personally  delivered to a representative  of the receiving
party,  or  sent  by  telecopy  (provided  an  identical  notice  is  also  sent
simultaneously  by mail,  overnight  courier,  or personal delivery as otherwise
provided in this  Section  11.1) to the  intended  recipient at the "Address for
Notices"   specified  below  its  name  on  the  signature  pages  hereof.   Any
communication  so  addressed  and  mailed  shall  be  deemed  to be given on the
earliest of (1) when  actually  delivered,  (2) on the first  Business Day after
deposit with an overnight air courier service,  or (3) on the third Business Day
after deposit in the United States mail,  postage  prepaid,  in each case to the
address of the intended addressee,  and any communication so delivered in person
shall be deemed to be given when  receipted for by, or

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actually received by the Administrative Agent, a Lender or Borrower, as the case
may be. If given by telecopy,  a notice shall be deemed given and received  when
the telecopy is transmitted to the party's  telecopy number specified above, and
confirmation of complete  receipt is received by the  transmitting  party during
normal business hours or on the next Business Day if not confirmed during normal
business hours,  and an identical  notice is also sent  simultaneously  by mail,
overnight  courier,  or personal delivery as otherwise  provided in this Section
11.1.  Any party may  designate  a change of address  by written  notice to each
other party by giving at least ten (10) days prior written notice of such change
of address.

          Section 11.2. Amendments, Waivers, Etc.

          (1) Subject to any consents required pursuant to this Section 11.2 and
any other  provisions  of this  Agreement  and any  other  Loan  Document  which
expressly  require  the  consent,  approval  or  authorization  of the  Majority
Lenders,  this  Agreement  and  any  other  Loan  Document  may be  modified  or
supplemented  only by an  instrument  in writing  signed by the Borrower and the
Administrative  Agent;  provided that, the Administrative Agent may (without any
Lender's  consent) give or withhold its agreement to any  amendments of the Loan
Documents  or any waivers or consents in respect  thereof or exercise or refrain
from exercising any other rights or remedies which the Administrative  Agent may
have under the Loan Documents or otherwise provided that such actions do not, in
the Administrative  Agent's judgment reasonably exercised,  materially adversely
affect the value of any  collateral,  taken as a whole, or represent a departure
from Administrative  Agent's standard of care described in Section 13.5 (and the
assignment or granting of a  participation  by GECC of any interest in the Loans
it may have shall not limit or otherwise affect its discretion in respect of any
of the foregoing),  except that the  Administrative  Agent will not, without the
consent of all of the Lenders, agree to the following (provided that no Lender's
consent shall be required for any of the following which are otherwise  required
under the Loan  Documents):  (a)  reduce  the  principal  amount of the Loans or
reduce the  interest  rate  thereon;  (b) extend  any  stated  payment  date for
principal of or interest on the Loans  payable to such  Lender;  (c) release the
Borrower or any other party from liability under the Loan Documents; (d) release
or subordinate in whole or in part any material  portion of the collateral given
as security for the Loans; (e) modify any of the provisions of this Section, the
definition of "Majority  Lenders" or any other  provision in the Loan  Documents
specifying  the number or  percentage  of Lenders  required  to waive,  amend or
modify any rights  thereunder  or make any  determination  or grant any  consent
thereunder;  (f) modify the terms of any Event of Default; or (g) consent to (i)
the sale, transfer or encumbrance of any portion of the Project (or any interest
therein)  or any direct or  indirect  ownership  interest  therein  and (ii) the
incurrence by Borrower of any additional indebtedness secured by the Project, in
each case to the extent  (and  subject to any  standard of  reasonability)  such
consent is required under the Loan Documents.

          (2) Notwithstanding  anything to contrary contained in this Agreement,
any  modification or supplement of Article 13, or of any of the rights or duties
of  the  Administrative  Agent  hereunder,  shall  require  the  consent  of the
Administrative Agent.

          Section  11.3.  Limitation  on  Interest.  It is the  intention of the
parties hereto to conform  strictly to applicable usury laws.  Accordingly,  all
agreements  between  Borrower,  the  Administrative  Agent and the Lenders  with
respect to the Loans are hereby expressly  limited so that in no event,  whether
by reason of  acceleration  of maturity or  otherwise,  shall the amount

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paid or agreed to be paid to the  Administrative  Agent or any Lender or charged
by any  Lender for the use,  forbearance  or  detention  of the money to be lent
hereunder or otherwise,  exceed the maximum  amount allowed by law. If the Loans
would be usurious under  applicable law (including the laws of the State and the
laws of the United  States of America),  then,  notwithstanding  anything to the
contrary in the Loan  Documents:  (1) the aggregate of all  consideration  which
constitutes  interest  under  applicable  law  that is  contracted  for,  taken,
reserved,   charged  or  received  under  the  Loan  Documents  shall  under  no
circumstances  exceed the maximum amount of interest  allowed by applicable law,
and any excess shall be credited on the Notes by the holders thereof (or, if the
Notes have been paid in full,  refunded  to  Borrower);  and (2) if  maturity is
accelerated by reason of an election by the  Administrative  Agent in accordance
with the terms hereof, or in the event of any prepayment, then any consideration
which  constitutes  interest  may never  include  more than the  maximum  amount
allowed by applicable law. In such case,  excess interest,  if any, provided for
in the Loan Documents or otherwise,  to the extent  permitted by applicable law,
shall be  amortized,  prorated,  allocated  and spread  from the date of advance
until payment in full so that the actual rate of interest is uniform through the
term hereof. If such  amortization,  proration,  allocation and spreading is not
permitted  under  applicable  law, then such excess  interest shall be cancelled
automatically  as of the  date  of  such  acceleration  or  prepayment  and,  if
theretofore  paid,  shall be  credited  on the Notes (or, if the Notes have been
paid in full,  refunded to Borrower).  The terms and  provisions of this Section
11.3 shall control and supersede  every other  provision of the Loan  Documents.
The Loan Documents are contracts made under and shall be construed in accordance
with and governed by the laws of the State,  except that if at any time the laws
of the United  States of America  permit the  Lenders  to  contract  for,  take,
reserve, charge or receive a higher rate of interest than is allowed by the laws
of the State  (whether such federal laws directly so provide or refer to the law
of any state), then such federal laws shall to such extent govern as to the rate
of interest which the Lenders may contract for, take, reserve, charge or receive
under the Loan Documents.

          Section  11.4.  Invalid  Provisions.  If any  provision  of  any  Loan
Document is held to be illegal,  invalid or unenforceable,  such provision shall
be fully  severable;  the Loan  Documents  shall be construed and enforced as if
such illegal,  invalid or  unenforceable  provision  had never  comprised a part
thereof;  the remaining provisions thereof shall remain in full effect and shall
not be affected by the illegal,  invalid,  or unenforceable  provision or by its
severance  therefrom;  and in lieu of such  illegal,  invalid  or  unenforceable
provision there shall be added  automatically  as a part of such Loan Document a
provision  as  similar  in  terms  to such  illegal,  invalid  or  unenforceable
provision as may be possible to be legal, valid and enforceable.

          Section  11.5.  Reimbursement  of Expenses.  Borrower  shall pay to or
reimburse  the  Administrative  Agent  and/or  the  Lenders  on  demand  of  the
applicable party for: (1) all expenses incurred by the  Administrative  Agent in
connection  with the Loans,  including  fees and expenses of the  Administrative
Agent's attorneys,  environmental,  engineering and other consultants, and fees,
charges or taxes for the negotiation, recording or filing of Loan Documents, (2)
all expenses of the  Administrative  Agent in connection with the administration
of the Loans, including audit costs, inspection fees, settlement of condemnation
and casualty awards, and premiums for title insurance and endorsements  thereto,
(3) all of the  Administrative  Agents  and/or the initial  Lenders'  reasonable
costs  and  expenses  (including   reasonable  fees  and  disbursements  of  the
Administrative Agent's and/or the initial Lenders' external counsel) incurred in
connection  with

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<PAGE>

the syndication of the Loans to the Lenders,  and (4) for all amounts  expended,
advanced or incurred by the Administrative  Agent and the Lenders to collect the
Notes,  or to enforce  the rights of the  Administrative  Agent and the  Lenders
under  this  Agreement  or any other Loan  Document,  or to defend or assert the
rights and claims of the  Administrative  Agent and the  Lenders  under the Loan
Documents or with respect to the Project (by  litigation  or other  proceedings,
and except to the extent of any  enforcement  actions  by  Administrative  Agent
against  a  Lender,  by a Lender  against  Administrative  Agent and by a Lender
against another Lender), which amounts will include all court costs,  attorneys'
fees and expenses, fees of auditors and accountants,  and investigation expenses
as may be incurred  by the  Administrative  Agent and the Lenders in  connection
with any such matters  (whether or not litigation is instituted),  together with
interest at the Default  Rate on each such amount from the date of  disbursement
until the date of reimbursement to the Administrative Agent and the Lenders, all
of which  shall  constitute  part of the Loans and shall be  secured by the Loan
Documents.

          Section  11.6.  Approvals;  Third  Parties;  Conditions.  All approval
rights  retained or exercised by the  Administrative  Agent and the Lenders with
respect to leases,  contracts,  plans,  studies and other  matters are solely to
facilitate  the  Lenders'  credit  underwriting,  and  shall  not be  deemed  or
construed  as a  determination  that the  Lenders  have  passed on the  adequacy
thereof  for any other  purpose  and may not be relied  upon by  Borrower or any
other  Person.  This  Agreement  is  for  the  sole  and  exclusive  use  of the
Administrative  Agent,  the Lenders and Borrower  and may not be  enforced,  nor
relied upon, by any Person other than the Administrative  Agent, the Lenders and
Borrower.  All conditions of the obligations of the Administrative Agent and the
Lenders hereunder, including the obligation to make advances, are imposed solely
and  exclusively  for the benefit of the  Administrative  Agent and the Lenders,
their successors and assigns, and no other Person shall have standing to require
satisfaction  of such  conditions or be entitled to assume that the Lenders will
refuse to make advances in the absence of strict  compliance  with any or all of
such conditions,  and no other Person shall, under any circumstances,  be deemed
to be a  beneficiary  of such  conditions,  any and all of which  may be  freely
waived in whole or in part by the  Administrative  Agent and the  Lenders at any
time in their sole discretion.

          Section  11.7.  Lenders and  Administrative  Agent Not in Control;  No
Partnership.  None  of the  covenants  or  other  provisions  contained  in this
Agreement  shall,  or shall be deemed to, give the  Administrative  Agent or any
Lender the right or power to exercise  control over the affairs or management of
Borrower, the power of the Administrative Agent and the Lenders being limited to
the rights to  exercise  the  remedies  referred to in the Loan  Documents.  The
relationship between Borrower and the Lenders is, and at all times shall remain,
solely  that of debtor  and  creditor.  No  covenant  or  provision  of the Loan
Documents  is  intended,  nor  shall it be  deemed  or  construed,  to  create a
partnership,  joint  venture,  agency or common  interest  in  profits or income
between the  Administrative  Agent,  the  Lenders  and  Borrower or to create an
equity  in  the  Project  in  the  Administrative   Agent  or  any  Lender.  The
Administrative   Agent  and  the  Lenders  neither   undertake  nor  assume  any
responsibility  or duty to Borrower or to any other  person with  respect to the
Project or the Loans,  except as expressly  provided in the Loan Documents;  and
notwithstanding  any other  provision  of the Loan  Documents:  (1)  neither the
Administrative  Agent nor any Lender is, nor shall be  construed  as, a partner,
joint  venturer,  alter  ego,  manager,  controlling  person  or other  business
associate or participant of any kind of Borrower or its  stockholders,  members,
or partners and neither the Administrative  Agent nor any Lender intends to ever
assume such status; (2) no Lender or the Administrative Agent shall in any

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event be liable for any Debts,  expenses  or losses  incurred  or  sustained  by
Borrower;  and  (3) no  Lender  or the  Administrative  Agent  shall  be  deemed
responsible for or a participant in any acts, omissions or decisions of Borrower
or its stockholders, members, or partners. The Administrative Agent, the Lenders
and Borrower  disclaim any intention to create any  partnership,  joint venture,
agency or common interest in profits or income between the Administrative Agent,
the  Lenders  and  Borrower,  or to  create  an  equity  in the  Project  in the
Administrative Agent or any Lender, or any sharing of liabilities, losses, costs
or expenses.

          Section   11.8.   Brokers.   Borrower   hereby   represents   to   the
Administrative  Agent and each  Lender  that  Borrower  has not  dealt  with any
broker,  underwriters,  placement  agent,  or  finder  in  connection  with  the
transactions contemplated by this Agreement and the other Loan Documents,  other
than Victor Capital Group,  L.P. (the  "Broker").  Borrower hereby agrees to pay
all fees and commissions due and payable to Broker and to indemnify and hold the
Administrative  Agent and each  Lender  harmless  from and  against  any and all
claims,  liabilities,  costs and  expenses of any kind in any way relating to or
arising from a claim by any Person (including  Broker) that such Person acted on
behalf of Borrower in connection with the transactions contemplated herein.

          Section 11.9. Time of the Essence. Time is of the essence with respect
to this Agreement.

          Section 11.10. Successors and Assigns; Secondary Market Transactions.

          (1) This  Agreement  shall be binding upon and inure to the benefit of
the Administrative Agent, the Lenders and Borrower and the respective successors
and permitted  assigns,  provided that neither  Borrower nor any other  Borrower
Party shall,  without the prior written consent of the Administrative  Agent and
all of the Lenders,  assign any rights, duties or obligations hereunder,  except
as may otherwise be expressly provided in the Loan Documents.

          (2) Borrower  acknowledges that  Administrative  Agent and each Lender
and its respective  successors and assigns may without notice to or consent from
Borrower  (a) sell this  Agreement,  the  Mortgage,  the  Notes,  the other Loan
Documents, and any and all servicing rights thereto, or any portions thereof, to
one or more investors, (b) participate and/or syndicate the Loans to one or more
investors,  (c) deposit this Agreement,  the Notes and the other Loan Documents,
or any portions  thereof,  with a trust,  which trust may sell  certificates  to
investors evidencing an ownership interest in the trust assets, or (d) otherwise
sell,  transfer  or  assign  the  Loans  or  interests  therein  in one or  more
transactions to investors (the  transactions  referred to in clauses (a) through
(d) are  hereinafter  each  referred to as a  "Secondary  Market  Transaction").
Borrower  shall  reasonably  cooperate  with the  Administrative  Agent and each
Lender in effecting any such Secondary  Market  Transaction and shall reasonably
cooperate  and use all  reasonable  efforts to satisfy the market  standards  to
which the Administrative  Agent and each Lender customarily adheres or which may
be reasonably  required by any  participant,  investor,  purchaser or any rating
agency  involved  in  any  Secondary  Market  Transaction  (including,   without
limitation, delivery of opinions of counsel in form and substance similar to the
opinions of counsel delivered to the  Administrative  Agent on the date hereof).
Borrower shall provide such  information and documents  relating to the Borrower
and the  Project as the  Administrative  Agent and each  Lender  may  reasonably
request in  connection  with such  Secondary  Market  Transaction.

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<PAGE>

In addition,  Borrower shall make available to the Administrative  Agent and the
Lenders all information concerning the Project, its business and operations that
the  Administrative   Agent  and  the  Lenders  may  reasonably   request.   The
Administrative Agent and the Lenders shall be permitted to share all information
with the participants,  investors, purchasers,  investment banking firms, rating
agencies,  accounting  firms, law firms and third-party  advisory firms involved
with  the  Loans  and  Loan  Documents  or  the  applicable   Secondary   Market
Transaction.  The Administrative  Agent and the Lenders and all of the aforesaid
participants,  investors, purchasers, advisors, rating agencies and professional
firms shall be entitled to rely on the  information  supplied by or on behalf of
Borrower. Borrower also agrees to execute any amendment of or supplement to this
Agreement  and the other  Loan  Documents  as the  Administrative  Agent and the
Lenders  may  reasonably   request  in  connection  with  any  Secondary  Market
Transaction,  provided  that such  amendment or  supplement  does not change the
economic  terms  of  the  Loan  or  materially   increase   Borrower's   duties,
responsibilities or liabilities under the Loan Documents.

          (3) The Notes may  hereafter  be split,  severed  and  subdivided,  by
exchange of the Notes for promissory notes of lesser denominations or otherwise,
and, in such event,  Borrower shall promptly  execute  additional or replacement
Notes.  At no  time  shall  the  aggregate  original  principal  amount  of such
replacement  promissory  notes exceed the  outstanding  principal  amount of the
Loans as of the date of  execution of such  replacement  promissory  notes,  nor
shall  such  replacement  promissory  notes be (in the  aggregate)  on terms and
conditions materially different from those set forth in the Notes proposed to be
replaced.

          Section 11.11. Renewal, Extension or Rearrangement.  All provisions of
the Loan  Documents  shall  apply with equal  effect to each and all  promissory
notes and  amendments  thereof  hereinafter  executed  which in whole or in part
represent a renewal,  extension,  increase or  rearrangement  of the Loans.  For
portfolio  management  purposes,  the Lenders may elect to divide the Loans into
two or more separate loans evidenced by separate promissory notes so long as the
payment and other  obligations  of Borrower  are not  effectively  increased  or
otherwise modified.  Borrower agrees to cooperate with the Administrative  Agent
and the  Lenders  and to execute  such  documents  as the  Administrative  Agent
reasonably may request to effect such division of the Loans.

          Section  11.12.  Waivers.  No  course  of  dealing  on the part of the
Administrative  Agent or any Lender, their officers,  employees,  consultants or
agents, nor any failure or delay by the Administrative  Agent or any Lender with
respect to exercising any right, power or privilege of the Administrative  Agent
or any  Lender  under  any of the  Loan  Documents,  shall  operate  as a waiver
thereof.

          Section  11.13.   Cumulative  Rights.   Rights  and  remedies  of  the
Administrative  Agent  and  the  Lenders  under  the  Loan  Documents  shall  be
cumulative,  and the  exercise  or partial  exercise of any such right or remedy
shall not preclude the exercise of any other right or remedy.

          Section 11.14.  Singular and Plural.  Words used in this Agreement and
the other Loan Documents in the singular, where the context so permits, shall be
deemed to include the plural and vice  versa.  The  definitions  of words in the
singular  in this  Agreement  and the other Loan

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<PAGE>

Documents shall apply to such words when used in the plural where the context so
permits and vice versa.

          Section 11.15. Phrases. When used in this Agreement and the other Loan
Documents,  the phrase  "including" shall mean "including,  but not limited to,"
the phrases  "satisfactory to any Lender" or "satisfactory to the Administrative
Agent"  shall  mean in form and  substance  satisfactory  to such  Lender or the
Administrative  Agent,  as the case may be, in all  respects,  the phrases "with
Lender's consent",  "with Lender's approval",  "with the Administrative  Agent's
consent" or "with the  Administrative  Agent's approval" shall mean such consent
or  approval  at Lender's  or the  Administrative  Agent's,  as the case may be,
discretion,  and the  phrases  "acceptable  to  Lender"  or  "acceptable  to the
Administrative  Agent"  shall mean  acceptable  to Lender or the  Administrative
Agent, as the case may be, at such party's sole discretion."

          Section  11.16.  Exhibits and  Schedules.  The exhibits and  schedules
attached to this  Agreement  are  incorporated  herein and shall be considered a
part of this Agreement for the purposes stated herein.

          Section  11.17.  Titles of  Articles,  Sections and  Subsections.  All
titles or headings to articles, sections, subsections or other divisions of this
Agreement  and the other Loan  Documents or the exhibits  hereto and thereto are
only for the  convenience  of the parties and shall not be construed to have any
effect or meaning with respect to the other content of such articles,  sections,
subsections or other divisions,  such other content being  controlling as to the
agreement between the parties hereto.

          Section  11.18.   Promotional   Material.   Borrower   authorizes  the
Administrative Agent and each Lender to issue press releases, advertisements and
other  promotional  materials in connection with the  Administrative  Agent's or
such Lender's own promotional and marketing activities, and describing the Loans
in general  terms or in detail and the  Administrative  Agent's or such Lender's
participation  in the Loans. All references to the  Administrative  Agent or any
Lender  contained in any press release,  advertisement  or promotional  material
issued by Borrower shall be approved in writing by the Administrative  Agent and
such Lender in advance of issuance.

          Section 11.19.  Survival. All of the reimbursement and indemnification
obligations of Borrower  hereunder  (including  those relating to  environmental
matters under Article 4, subject to the terms of Article 4, and the  obligations
under Sections  2.7(1),  2.7(5) and 2.7(6)),  and under the  reimbursmement  and
indemnification  provisions  of the other Loan  Documents  shall survive (a) the
repayment  in full of the  Loans and the  release  of the  Liens  evidencing  or
securing the Loans, (b) the transfer (by sale,  foreclosure,  conveyance in lieu
of foreclosure  or otherwise) of any or all right,  title and interest in and to
the Project to any party, whether or not an Affiliate of Borrower and (c) in the
case of any Lender  that may  assign any  interest  in its  Commitment  or Loans
hereunder in  accordance  with the terms of this  Agreement,  the making of such
assignment,  notwithstanding  that  such  assigning  Lender  may  cease  to be a
"Lender" hereunder.

          Section  11.20.  WAIVER OF JURY TRIAL.  BORROWER,  THE  ADMINISTRATIVE
AGENT AND EACH LENDER HEREBY KNOWINGLY,  VOLUNTARILY AND INTENTIONALLY WAIVE THE
RIGHT TO A TRIAL BY JURY IN

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RESPECT OF ANY LITIGATION  BASED HEREON,  ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE
OF DEALING,  STATEMENT  (WHETHER VERBAL OR WRITTEN) OR ACTION OF EITHER PARTY OR
ANY EXERCISE BY ANY PARTY OF THEIR RESPECTIVE RIGHTS UNDER THE LOAN DOCUMENTS OR
IN ANY WAY RELATING TO THE LOANS OR THE PROJECT (INCLUDING,  WITHOUT LIMITATION,
ANY  ACTION  TO  RESCIND  OR CANCEL  THIS  AGREEMENT,  AND ANY CLAIM OR  DEFENSE
ASSERTING THAT THIS AGREEMENT WAS  FRAUDULENTLY  INDUCED OR IS OTHERWISE VOID OR
VOIDABLE). THIS WAIVER IS A MATERIAL INDUCEMENT FOR THE ADMINISTRATIVE AGENT AND
EACH LENDER TO ENTER THIS AGREEMENT.

          Section 11.21.  Waiver of Punitive or Consequential  Damages.  None of
the Administrative Agent, the Lenders or Borrower shall be responsible or liable
to the other or to any other Person for any punitive, exemplary or consequential
damages  which  may be  alleged  as a result  of the  Loans  or the  transaction
contemplated hereby, including any breach or other default by any party hereto.

          Section 11.22. Governing Law

          (1) THIS  AGREEMENT WAS  NEGOTIATED IN THE STATE OF NEW YORK, AND MADE
BY THE ADMINISTRATIVE AGENT AND LENDERS AND ACCEPTED BY BORROWER IN THE STATE OF
NEW YORK, AND THE PROCEEDS OF THE NOTES DELIVERED PURSUANT HERETO WERE DISBURSED
FROM THE STATE OF NEW YORK,  WHICH  STATE THE  PARTIES  AGREE HAS A  SUBSTANTIAL
RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING  TRANSACTION  EMBODIED HEREBY,
AND  IN  ALL  RESPECTS,  INCLUDING,  WITHOUT  LIMITING  THE  GENERALITY  OF  THE
FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND
THE  OBLIGATIONS  ARISING  HEREUNDER  SHALL BE  GOVERNED  BY, AND  CONSTRUED  IN
ACCORDANCE  WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND  PERFORMED  IN SUCH STATE AND ANY  APPLICABLE  LAW OF THE  UNITED  STATES OF
AMERICA,  EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION,  PERFECTION,
AND ENFORCEMENT OF THE LIENS AND SECURITY  INTERESTS CREATED PURSUANT HERETO AND
PURSUANT  TO THE  OTHER  LOAN  DOCUMENTS  SHALL  BE  GOVERNED  BY AND  CONSTRUED
ACCORDING  TO THE LAW OF THE STATE IN WHICH THE  PROJECT  IS  LOCATED,  IT BEING
UNDERSTOOD  THAT, TO THE FULLEST EXTENT  PERMITTED BY THE LAW OF SUCH STATE, THE
LAW OF THE  STATE  OF NEW YORK  SHALL  GOVERN  THE  CONSTRUCTION,  VALIDITY  AND
ENFORCEABILITY  OF  ALL  LOAN  DOCUMENTS  AND  ALL OF  THE  OBLIGATIONS  ARISING
HEREUNDER OR THEREUNDER.  TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER,  THE
ADMINISTRATIVE  AGENT AND LENDERS HEREBY  UNCONDITIONALLY AND IRREVOCABLY WAIVES
ANY  CLAIM  TO  ASSERT  THAT  THE LAW OF ANY  OTHER  JURISDICTION  GOVERNS  THIS
AGREEMENT AND THE NOTES,  AND THIS  AGREEMENT AND THE NOTES SHALL BE GOVERNED BY
AND CONSTRUED IN  ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

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<PAGE>

          (2) ANY LEGAL SUIT,  ACTION OR PROCEEDING  AGAINST THE  ADMINISTRATIVE
AGENT,  ANY LENDER OR BORROWER  ARISING OUT OF OR RELATING TO THE LOAN DOCUMENTS
MAY AT THE  ADMINISTRATIVE  AGENT'S OPTION (WHICH  DECISION SHALL BE MADE BY THE
MAJORITY LENDERS) BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW
YORK,  COUNTY OF NEW YORK,  PURSUANT TO SECTION  5-1401 OF THE NEW YORK  GENERAL
OBLIGATIONS LAW AND BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER
HAVE BASED ON VENUE  AND/OR  FORUM NON  CONVENIENS  OF ANY SUCH SUIT,  ACTION OR
PROCEEDING,  AND BORROWER HEREBY IRREVOCABLY  SUBMITS TO THE JURISDICTION OF ANY
SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND
APPOINT BATTLE FOWLER LLP, 75 EAST 55TH STREET,  NEW YORK, NEW YORK  10022-3205,
ATTENTION:  ROBERT J.  WERTHEIMER,  ESQ. AS ITS  AUTHORIZED  AGENT TO ACCEPT AND
ACKNOWLEDGE  ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN
ANY SUCH SUIT,  ACTION OR  PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW YORK,
NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND
WRITTEN  NOTICE OF SAID  SERVICE  MAILED OR  DELIVERED TO BORROWER IN THE MANNER
PROVIDED  HEREIN SHALL BE DEEMED IN EVERY RESPECT  EFFECTIVE  SERVICE OF PROCESS
UPON BORROWER,  IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK.
BORROWER  (A) SHALL GIVE PROMPT  NOTICE TO LENDER OF ANY CHANGED  ADDRESS OF ITS
AUTHORIZED AGENT HEREUNDER,  (B) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE
A  SUBSTITUTE  AUTHORIZED  AGENT  WITH AN OFFICE IN NEW  YORK,  NEW YORK  (WHICH
SUBSTITUTE  AGENT AND OFFICE SHALL BE  DESIGNATED  AS THE PERSON AND ADDRESS FOR
SERVICE OF PROCESS),  AND (C) SHALL PROMPTLY  DESIGNATE SUCH A SUBSTITUTE IF ITS
AUTHORIZED  AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED
WITHOUT LEAVING A SUCCESSOR.

          Section  11.23.  Entire  Agreement.  This Agreement and the other Loan
Documents   embody  the  entire   agreement   and   understanding   between  the
Administrative   Agent,  the  Lenders  and  Borrower  and  supersede  all  prior
agreements  and  understandings  between  such  parties  relating to the subject
matter  hereof  and  thereof.   Accordingly,  the  Loan  Documents  may  not  be
contradicted  by  evidence  of  prior,   contemporaneous,   or  subsequent  oral
agreements of the parties.  There are no unwritten oral  agreements  between the
parties.

          Section  11.24.  Counterparts.  This  Agreement  may  be  executed  in
multiple  counterparts,  each of which shall constitute an original,  but all of
which shall constitute one document.

          Section 11.25. Assignments and Participations.

          (1)  Assignments  by  Borrower.  Except as may  otherwise be expressly
provided  in the Loan  Documents,  Borrower  may not assign any of its rights or
obligations hereunder or under the Notes without the prior consent of all of the
Lenders and the Administrative Agent.

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<PAGE>

          (2)  Assignments  by the  Lenders.  Each  Lender may assign all or any
portion of its interest in its Loans, its Note and its Commitment (but only with
the consent of the Administrative Agent); provided that:

          (a) no such consent by the  Administrative  Agent shall be required in
the case of any  assignment  (i) by any Lender to another Lender or an affiliate
of such Lender or such other Lender or (ii) by CMF Capital Company,  LLC to GECC
or an affiliate of GECC;

          (b) except to the  extent the  Administrative  Agent  shall  otherwise
consent, any partial assignment (other than to another Lender or an affiliate of
a Lender) shall be in an amount at least equal to $10,000,000;

          (c) each such assignment (including an assignment to another Lender or
an affiliate of a Lender) by a Lender of its Loans or  Commitment  shall be made
in such manner so that the same portion of its Loans and  Commitment is assigned
to the respective assignee;

          (d) subject to the applicable  Lender's compliance with the provisions
of  clauses  (b)  and  (c)  above,  the  Administrative  Agent's  consent  to an
assignment shall not be unreasonably withheld,  delayed or conditioned if (i) in
the reasonable judgment of the Administrative  Agent, such assignment is made to
a reputable  institutional  investor with substantial  experience in real estate
lending and originating mortgage loans similar to the Loans, and a financial net
worth of at least  $100,000,000,  (ii) such  assignment  is first offered to the
Administrative  Agent in accordance  with the terms and conditions of a separate
agency agreement among the Administrative  Agent and the Lenders,  and (iii) the
provisions of clause (e) have been satisfied; and

          (e) upon  execution  and delivery by the  assignee  (even if already a
Lender) to Borrower and the Administrative Agent of an Assignment and Acceptance
pursuant to which such assignee agrees to become a "Lender" hereunder in respect
of  the  interest  to  be  so  assigned,   and  upon  consent   thereto  by  the
Administrative  Agent to the extent required above,  the assignee shall have, to
the  extent  of  such  assignment   (unless   otherwise   consented  to  by  the
Administrative  Agent),  the  obligations,  rights  and  benefits  of  a  Lender
hereunder  holding the Commitment and Loans (or portions thereof) assigned to it
(in  addition to the  Commitment  and Loans,  if any,  theretofore  held by such
assignee) and the assigning Lender shall, to the extent of such  assignment,  be
released from the  Commitment (or portion  thereof) so assigned.  Upon each such
assignment,   the  assigning  Lender  (and  not  the  Borrower)  shall  pay  the
Administrative Agent a processing and recording fee of $3,500 and the reasonable
fees  and  disbursements  of the  Administrative  Agent's  counsel  incurred  in
connection therewith.

          (3) Participations.  A Lender may sell or agree to sell to one or more
other Persons (each a  "Participant")  a participation in all or any part of any
Loans held by it, or in its Commitment, provided that such Participant shall not
have any rights or  obligations  under this  Agreement  or any Note or any other
Loan Document (the  Participant's  rights against such Lender in respect of such
participation  to be those set forth in the  agreements  executed by such Lender
and the applicable  Participant).  All amounts payable by Borrower to any Lender
under  Section  2.7 in respect of Loans held by it and its  Commitment  shall be
determined  as if such Lender had not sold or agreed to sell any  participations
in such Loans and  Commitment,  and as if

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<PAGE>

such Lender were funding each of such Loans and  Commitment in the same way that
it  is  funding  the  portion  of  such  Loans  and   Commitment   in  which  no
participations  have  been  sold.  In no  event  shall  a  Lender  that  sells a
participation  agree with the  Participant  to take or refrain  from  taking any
action  hereunder or under any other Loan  Document  except that such Lender may
agree  with  the  Participant  that it will  not,  without  the  consent  of the
Participant,  agree  to (i)  increase  or  extend  the  term  of  such  Lender's
Commitment,  (ii)  extend the date  fixed for the  payment  of  principal  of or
interest  on the  related  Loan or Loans  or any  portion  of any fee  hereunder
payable to the  Participant,  (iii)  reduce  the  amount of any such  payment of
principal, (iv) reduce the rate at which interest is payable thereon, or any fee
hereunder  payable to the  Participant,  to a level  below the rate at which the
Participant  is entitled to receive  such  interest or fee or (v) consent to any
modification,  supplement or waiver hereof or of any of the other Loan Documents
to the extent that the same,  under Section  11.2,  requires the consent of each
Lender.

          (4) Certain Pledges. In addition to the assignments and participations
permitted  under the  foregoing  provisions  of this Section  11.25 (but without
being  subject  thereto),  any  Lender  may  (without  notice to  Borrower,  the
Administrative  Agent or any other Lender and without payment of any fee) assign
and pledge all or any portion of its Loans and its Note to any  Federal  Reserve
Bank as collateral  security pursuant to Regulation A and any operating circular
issued by such  Federal  Reserve  Bank,  and such  Loans and Note shall be fully
transferable as provided therein. No such assignment shall release the assigning
Lender from its obligations hereunder.

          (5) Provision of Information to Assignees and  Participants.  A Lender
may furnish any information  concerning Borrower or any of its Affiliates in the
possession  of such  Lender  from  time to time to  assignees  and  participants
(including prospective assignees and participants).

          (6) No Assignments to Borrower or Affiliates. Anything in this Section
11.25 to the contrary  notwithstanding,  no Lender may assign or participate any
interest  in any Loan held by it  hereunder  to  Borrower  or any of  Borrower's
Affiliates without the prior consent of all Lenders.

                                   ARTICLE 12

                            LIMITATIONS ON LIABILITY
                            ------------------------

          Section 12.1. Limitation on Liability. Notwithstanding anything to the
contrary contained in this Agreement or in any of the Loan Documents,  except as
provided  below,  neither  Borrower nor any Borrower  Party shall be  personally
liable for amounts due under the Loan  Documents.  Borrower  shall be personally
liable to the Administrative  Agent and the Lenders for any deficiency,  loss or
damage  suffered  by the  Administrative  Agent or any  Lender  because  of: (1)
Borrower's  commission  of a  criminal  act;  (2) the  failure  to  comply  with
provisions of the Loan Documents  prohibiting the sale,  transfer or encumbrance
of the  Project,  any other  collateral,  or any  direct or  indirect  ownership
interest in Borrower;  (3) the  misapplication by Borrower or any Borrower Party
of any funds derived from the Project,  including security  deposits,  insurance
proceeds and condemnation awards; (4) the fraud or misrepresentation by

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<PAGE>

Borrower or any Borrower Party made in or in connection  with the Loan Documents
or the Loan; (5)  Borrower's  collection of rents more than one month in advance
or entering  into or modifying  leases,  or receipt of monies by Borrower or any
Borrower Party in connection with the  modification of any leases,  in violation
of this Agreement or any of the other Loan Documents; (6) Borrower's application
of the rents,  security  deposits or any other payments in respect of the leases
and other income of the Project or any other  collateral in contravention of the
Loan Documents;  (7) Borrower's  interference  with the  Administrative  Agent's
exercise of rights  under the  Assignment  of Rents and Leases;  (8)  Borrower's
failure to maintain  insurance as required by this Agreement or to pay any taxes
or assessments  affecting the Project or any mortgage recording or similar taxes
required to be paid by any Person in connection  with the  execution,  delivery,
recordation, filing, registration,  perfection or enforcement of any of the Loan
Documents;  (9)  damage  or  destruction  to the  Project  caused by the acts or
omissions of Borrower, its agents,  employees,  or contractors;  (10) Borrower's
obligations  with  respect  to  environmental  matters  under  Article  4;  (11)
Borrower's  failure  to pay  for  any  loss,  liability  or  expense  (including
attorneys' fees) incurred by the Administrative  Agent or any Lender arising out
of any claim or allegation made by Borrower,  its successors or assigns,  or any
creditor  of  Borrower,   that  this  Agreement  establishes  a  joint  venture,
partnership or similar  arrangement between Borrower,  the Administrative  Agent
and any  Lender;  (12) any  brokerage  commission  or finder's  fees  claimed in
connection with the transactions  contemplated by the Loan Documents establish a
joint venture,  partnership or other similar arrangement  between Borrower,  the
Administrative Agent and any Lender; or (13) the Swap Reimbursement Obligations.
Notwithstanding  anything to the  contrary  contained  in this  Agreement or the
other Loan Documents, (A) neither the Administrative Agent nor the Lenders shall
be deemed to have waived any right which the Administrative  Agent or any Lender
may have under Sections  506(a),  506(b),  1111(b) or any other provision of the
United States Bankruptcy Code, as such sections may be amended,  to file a claim
for the full amount due to the  Administrative  Agent or such  Lender  under the
Loan  Documents or to require that all  collateral  shall continue to secure the
amounts due under the Loan Documents,  and (B) the  Indebtedness  shall be fully
recourse to Borrower in the event that: (I) there is a default under Section 9.9
hereof;  (II) Borrower fails to obtain the Administrative  Agent's prior written
consent to any  subordinate  financing or other  voluntary lien  encumbering the
Project;  or (III)  Borrower  fails to obtain the  Administrative  Agent's prior
written consent to any assignment, transfer, or conveyance of the Project or any
interest therein as required by the Loan Documents.

          Section 12.2.  Limitation on Liability of the  Administrative  Agent's
and  the  Lenders'  Officers,   Employees,  etc.  Any  obligation  or  liability
whatsoever of the Administrative Agent or any Lender which may arise at any time
under this Agreement or any other Loan Document  shall be satisfied,  if at all,
out of the  Administrative  Agent's or such Lender's  respective assets only. No
such obligation or liability shall be personally  binding upon, nor shall resort
for the enforcement thereof be had to, the property of any of the Administrative
Agent's or any Lender's shareholders,  directors, officers, employees or agents,
regardless of whether such obligation or liability is in the nature of contract,
tort or otherwise.

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                                   ARTICLE 13

                            THE ADMINISTRATIVE AGENT
                            ------------------------

          Section 13.1. Appointment,  Powers and Immunities.  Each Lender hereby
appoints and authorizes the  Administrative  Agent to act as its agent hereunder
and  under the  other  Loan  Documents  with  such  powers  as are  specifically
delegated to the Administrative  Agent by the terms of this Agreement and of the
other  Loan  Documents,  together  with  such  other  powers  as are  reasonably
incidental  thereto.  The  Administrative  Agent  (which  term  as  used in this
sentence  and in  Section  13.5 and the first  sentence  of  Section  13.6 shall
include  reference to its affiliates and its own and its  affiliates'  officers,
directors, employees and agents):

                    (a) shall have no duties or  responsibilities  except  those
          expressly set forth in this Agreement and in the other Loan Documents,
          and shall not by reason of this  Agreement or any other Loan  Document
          be a trustee for any Lender;

                    (b)  shall  not  be  responsible  to  the  Lenders  for  any
          recitals, statements,  representations or warranties contained in this
          Agreement  or in any other Loan  Document,  or in any  certificate  or
          other  document  referred to or provided for in, or received by any of
          them under,  this  Agreement  or any other Loan  Document,  or for the
          value,  validity,   effectiveness,   genuineness,   enforceability  or
          sufficiency of this Agreement,  any Note or any other Loan Document or
          any other  document  referred to or provided  for herein or therein or
          for any failure by Borrower or any other  Person to perform any of its
          obligations hereunder or thereunder; and

                    (c) shall not be responsible for any action taken or omitted
          to be taken by it hereunder or under any other Loan  Document or under
          any other document or instrument referred to or provided for herein or
          therein or in connection  herewith or therewith,  except to the extent
          any such action taken or omitted violates the  Administrative  Agent's
          standard of care set forth in the first sentence of Section 13.5.

          The Administrative Agent may employ agents and attorneys-in-fact,  and
may delegate all or any part of its obligations hereunder,  to third parties and
shall not be  responsible  for the  negligence or misconduct of any such agents,
attorneys-in-fact   or  third  parties   selected  by  it  in  good  faith.  The
Administrative  Agent  may  deem and  treat  the  payee of a Note as the  holder
thereof for all purposes  hereof unless and until a notice of the  assignment or
transfer thereof shall have been filed with the Administrative Agent.

          Section 13.2.  Reliance by  Administrative  Agent. The  Administrative
Agent  shall  be  entitled  to rely  upon  any  certification,  notice  or other
communication  (including,   without  limitation,   any  thereof  by  telephone,
telecopy, telegram or cable) reasonably 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 the  Administrative  Agent.  As to any  matters not
expressly  provided  for by this  Agreement  or any  other  Loan  Document,  the
Administrative  Agent  shall in all cases be fully  protected  in acting,  or in
refraining from acting,  hereunder or thereunder in accordance with instructions
given by the Majority Lenders, and such instructions of the Majority Lenders and
any action taken or failure to act pursuant  thereto  shall be binding on all of
the Lenders.

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<PAGE>

          Section 13.3.  Defaults.  The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of a Potential Default or Event of
Default  unless the  Administrative  Agent has received  notice from a Lender or
Borrower  specifying such Potential Default or Event of Default and stating that
such notice is a "Notice of Default". In the event that the Administrative Agent
receives  such a notice of the  occurrence  of a  Potential  Default or Event of
Default,  the  Administrative  Agent  shall give  prompt  notice  thereof to the
Lenders,  with the Administrative Agent hereby agreeing to endeavor to give such
notice to the Lenders  within two (2) Business Days after  Administrative  Agent
receives a notice of such occurrence. The Administrative Agent shall (subject to
Section 13.7) take such action with respect to such  Potential  Default or Event
of Default and other  matters  relating to the Loans as shall be directed by the
Lenders  in  accordance   with  a  separate   agreement   entered  into  by  the
Administrative Agent and the Lenders.

          Section  13.4.  Rights  as a  Lender.  If a Lender  is also  acting as
Administrative Agent, then, with respect to the Commitment and the Loans made by
such  Lender,  such  Lender  (and  any  successor  acting  as a  Lender  and  as
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 the Administrative  Agent, and the term "Lender" or
"Lenders"  shall,   unless  the  context   otherwise   indicates,   include  the
Administrative Agent in its individual capacity.  Such Lender (and any successor
acting as a Lender and as Administrative  Agent) and its affiliates may (without
having to account therefor to any Lender) lend money to, make investments in and
generally  engage in any kind of lending,  trust or other business with Borrower
(and any of its  Affiliates)  as if it were  not  acting  as the  Administrative
Agent,   and  such  Lender  and  its   affiliates  may  accept  fees  and  other
consideration  from Borrower for services in connection  with this  Agreement or
otherwise without having to account for the same to the Lenders.

          Section 13.5.  Standard of Care;  Indemnification.  In performing  its
duties under the Loan Documents, the Administrative Agent will exercise the same
degree of care as GECC normally  exercises in connection  with real estate loans
in which no syndication or participations  are involved,  but the Administrative
Agent shall have no further  responsibility  to any Lender  except as  expressly
provided  herein and except for its own gross  negligence or willful  misconduct
which resulted in actual loss to such Lender,  and,  except to such extent,  the
Administrative  Agent shall have no responsibility to any Lender for the failure
by the  Administrative  Agent to comply with any of the  Administrative  Agent's
obligations to Borrower under the Loan Documents or otherwise. The Lenders agree
to  indemnify  the  Administrative  Agent (to the  extent not  reimbursed  under
Section 11.5,  but without  limiting the  obligations  of Borrower under Section
11.5) ratably in accordance  with the  aggregate  principal  amount of the Loans
held by the  Lenders  (or, if no Loans are at the time  outstanding,  ratably in
accordance  with their  respective  Commitments),  for any and all  liabilities,
obligations,  losses,  damages,  penalties,  actions,  judgments,  suits, costs,
expenses or disbursements of any kind and nature  whatsoever that may be imposed
on, incurred by or asserted against the  Administrative  Agent (including by any
Lender)  arising  out of or by  reason  of any  investigation  in or in any  way
relating to or arising out of this  Agreement or any other Loan  Document or any
other  documents  contemplated  by or  referred  to  herein  or  therein  or the
transactions contemplated hereby or thereby (including,  without limitation, the
costs and expenses that  Borrower is obligated to pay under  Section  11.5,  but
excluding, unless a Event of Default has occurred and is continuing,

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<PAGE>

normal  administrative  costs and expenses  incident to the  performance  of its
agency  duties  hereunder)  or the  enforcement  of any of the  terms  hereof or
thereof or of any such other documents,  provided that no Lender shall be liable
for any of the  foregoing  to the  extent  they  arise  from the  Administrative
Agent's  breach of its standard of care set forth in the first  sentence of this
Section.

          Section 13.6.  Non-Reliance on Administrative Agent and Other Lenders.
Each  Lender  agrees  that it has,  independently  and  without  reliance on the
Administrative  Agent or any  other  Lender,  and  based on such  documents  and
information  as it has  deemed  appropriate,  made its own  credit  analysis  of
Borrower and its  Affiliates  and decision to enter into this Agreement and that
it will, independently and without reliance upon the 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 under  any other  Loan
Document.  Subject to the  provisions of the first sentence of Section 13.5, the
Administrative  Agent shall not be  required  to keep itself  informed as to the
performance or observance by Borrower of this Agreement or any of the other Loan
Documents or any other document referred to or provided for herein or therein or
to inspect the Project or the books of Borrower or any of its Affiliates. Except
for notices,  reports and other documents and information  expressly required to
be  furnished  to  the  Lenders  by the  Administrative  Agent  hereunder  or as
otherwise agreed by the Administrative Agent and the Lenders, the 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 of its Affiliates  that may come into the possession
of the Administrative Agent or any of its affiliates.

          Section 13.7.  Failure to Act. Except for action expressly required of
the  Administrative  Agent  hereunder  or under any  other  Loan  Document,  the
Administrative  Agent  shall in all  cases  be fully  justified  in  failing  or
refusing  to act  hereunder  and  thereunder  unless  it shall  receive  further
assurances  to its  satisfaction  from  the  Lenders  of  their  indemnification
obligations  under  Section 13.5 against any and all  liability and expense that
may be incurred by it by reason of taking or continuing to take any such action.

          Section 13.8.  Resignation of Administrative Agent. The Administrative
Agent  may  resign at any time by  giving  notice  thereof  to the  Lenders  and
Borrower.  Upon any such resignation,  the Majority Lenders shall have the right
to  appoint  a  successor  Administrative  Agent  which  shall  be  a  financial
institution that has (a) an office in New York, New York with a combined capital
and surplus of at least $500,000,000 and (b) knowledge and experience comparable
to  the  resigning  Administrative  Agent's  knowledge  and  experience  in  the
servicing  of loans  similar  to the Loans  hereunder.  In the event of any such
resignation,  the Borrower, the Lenders, the resigning  Administrative Agent and
the successor  Administrative  Agent shall  cooperate  with one another and take
such  steps as may  reasonably  be  required  in order to  ensure  that the Swap
Reimbursement  Obligations  and Swap  Guaranty Fee continue to be secured by the
Lien of the Mortgage.  If no successor  Administrative  Agent shall have been so
appointed  by the  Majority  Lenders and shall have  accepted  such  appointment
within 30 days after the  retiring  Administrative  Agent's  giving of notice of
resignation   of  the   retiring   Administrative   Agent,   then  the  retiring
Administrative  Agent's  resignation shall nonetheless  become effective and (i)
the  retiring  Administrative  Agent  shall be  discharged  from its  duties and
obligations  hereunder and

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<PAGE>

(ii) the Majority Lenders shall perform the duties of the  Administrative  Agent
(and all payments and  communications  provided to be made by, to or through the
Administrative  Agent shall instead be made by or to each Lender directly) until
such time as the  Majority  Lenders  appoint a successor  agent as provided  for
above in this Section 13.8. In addition, the Administrative Agent may be removed
for  cause at any  time by the  Majority  Lenders  if the  Administrative  Agent
performs  its  functions  hereunder  in a grossly  negligent  manner or  commits
willful misconduct,  provided that, prior to such removal, GECC (if it is acting
as  Administrative  Agent) is released  from any and all  obligations  under the
Interest Rate Guaranty. 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   (or  retired)
Administrative Agent, and the retiring  Administrative Agent shall be discharged
from its duties and obligations  hereunder (if not already discharged  therefrom
as  provided  above in this  Section  13.8).  The fees  payable by Borrower to a
successor  Administrative  Agent  shall  be the  same as  those  payable  to its
predecessor  unless otherwise agreed between Borrower and such successor.  After
any retiring  Administrative  Agent's  resignation  hereunder as  Administrative
Agent,  the  provisions  of this Article 13 and Section  11.5 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 the Administrative Agent.

                            [Signature Pages Follow]

                                       77
<PAGE>

           EXECUTED as of the date first written above.

LENDER:         GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation

                By:  /s/ Douglas A. Ewing
                     -----------------------------
                     Name:  Douglas A. Ewing
                     Title:  Authorized Signatory

                Address for Notices:

                General Electric Capital Corporation
                125 Park Avenue
                New York, New York 10017
                Attention: Mr. Rick Aurilio
                Telecopier No.: (212) 573-9733

                Lending Office for Eurodollar and
                Alternate Base Rate Loans:

                General Electric Capital Corporation
                125 Park Avenue
                New York, New York 10017
                Attention: Mr. Rick Aurilio
                Telecopier No.: (212) 573-9733

<PAGE>

BORROWER:       1290 PARTNERS, L.P., a Delaware limited partnership
                By:  1290 GP Corp., a Delaware corporation, its general partner

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

                Address for Notices:

                1290 Partners, L.P.
                c/o Victor Capital Group, L.P.
                605 Third Avenue
                New York, NY  10158
                Attention:  Ms. Jeremy FitzGerald
                Telecopier No.:  (212) 655-0044

<PAGE>

ADMINISTRATIVE AGENT:        GENERAL ELECTRIC CAPITAL CORPORATION,
                             as Administrative Agent

                             By /s/ Douglas A. Ewing
                               ------------------------------------
                               Name:   Douglas A. Ewing
                               Title:  Authorized Signatory

                             Address for Notices to the
                             Administrative Agent:

                             General Electric Capital Corporation
                             125 Park Avenue
                             New York, New York 10017
                             Attention: Rick Aurilio
                             Telecopier No.: (212) 573-9733AMENDED, RESTATED AND CONSOLIDATED PROMISSORY NOTE

$425,000,000                                                  December 13, 1999
                                                             New York, New York

         This Amended,  Restated and  Consolidated  Promissory Note, dated as of
December 13, 1999, by 1290 PARTNERS,  L.P., a Delaware limited  partnership (the
"Borrower"),  to GENERAL  ELECTRIC CAPITAL  CORPORATION,  a New York corporation
(the "Lender").

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

         A. Lender is the present  owner and holder of those  certain  bonds and
promissory  notes  described on Exhibit A attached hereto and made a part hereof
(collectively,   the  "Existing  Notes"),   which  Existing  Notes  evidence  an
indebtedness  of  Borrower  to Lender  in the  outstanding  principal  amount of
$425,000,000.

         B. Borrower and Lender have agreed in the manner  hereinafter set forth
to  (i)  combine  and   consolidate   the  Existing  Notes  and  the  respective
indebtednesses  evidenced  thereby and (ii)  amend,  modify and restate in their
entirety  the terms and  provisions  of the Existing  Notes,  as so combined and
consolidated, on the terms and conditions hereinafter set forth.

         C. Borrower intends these Recitals to be a material part of this Note.

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

         I. The  Existing  Notes  and the  respective  indebtednesses  evidenced
thereby are each hereby  combined and  consolidated  so that together they shall
constitute in law but one  indebtedness  in the  principal sum of  $425,000,000,
together  with  interest  thereon  as  hereinafter  provided,   and  the  terms,
covenants,  conditions and provisions of the Existing  Notes, as so combined and
consolidated,  are hereby  modified,  amended and restated in their  entirety so
that henceforth the terms, covenants,  conditions and provisions of the Existing
Notes shall read and be as set forth in this Note and Borrower  agrees to comply
with and be subject to all of the terms, covenants and conditions of this Note.

         II.  The  parties  hereto  certify  that this Note  evidences  the same
indebtedness  evidenced by the Existing  Notes and evidences no further or other
indebtedness  or  obligation.  Neither this Note nor anything  contained  herein
shall be construed as a novation of Borrower's  indebtedness to Lender or of the
Existing  Notes,  which  shall  remain  in  full  force  and  effect  as  hereby
consolidated, confirmed, modified, restated and superseded.

                                       1
<PAGE>

         III.  This  Note  is an  extension  and  continuation  of the  existing
indebtedness evidenced by the Existing Notes and is issued in replacement of and
substitution for the Existing Notes.

         IV. The Existing Notes, as consolidated, modified and restated in their
entirety pursuant to this Note, and the obligations of Borrower thereunder,  are
hereby  ratified and confirmed,  and shall remain in full force and effect until
the full performance and satisfaction of all obligations of Borrower hereunder.

         NOW, THEREFORE, Borrower and Lender agree as follows:

         Borrower hereby  promises to pay to the Lender,  for the account of its
respective  Applicable Lending Offices provided for by the Agreement referred to
below, at the principal office of General Electric Capital Corporation, 125 Park
Avenue, New York, New York 10017, the principal sum of Four Hundred  Twenty-Five
Million  Dollars  ($425,000,000)  (or such  lesser  amount  as shall  equal  the
aggregate  unpaid  principal  amount  of the  Loans  made by the  Lender  to the
Borrower under the  Agreement),  in lawful money of the United States of America
and in immediately  available  funds, on the dates and in the principal  amounts
provided in the Agreement, and to pay interest on the unpaid principal amount of
each such  Loan,  at such  office,  in like  money  and  funds,  for the  period
commencing  on the date of such Loan until  such Loan shall be paid in full,  at
the rates per annum and on the dates provided in the Agreement.

         The date, amount,  Type,  interest rate and duration of Interest Period
(if  applicable)  of each Loan  made by the  Lender  to the  Borrower,  and each
payment  made on account of the  principal  thereof,  shall be  recorded  by the
Lender on its books and,  prior to any  transfer  of this Note,  endorsed by the
Lender on the schedule  attached hereto or any  continuation  thereof,  provided
that the failure of the Lender to make any such recordation or endorsement shall
not affect the  obligations  of the  Borrower to make a payment  when due of any
amount  owing under the  Agreement  or hereunder in respect of the Loans made by
the Lender.

         This Note is one of the Notes referred to in the Loan  Agreement  dated
as of December 13, 1999 (as modified and supplemented and in effect from time to
time,  the  "Agreement")  between  the  Borrower,   the  lenders  party  thereto
(including   the  Lender)  and  General   Electric   Capital   Corporation,   as
Administrative  Agent, and evidences Loans made by the Lender thereunder.  Terms
used but not defined in this Note have the respective  meanings assigned to them
in the Agreement.

         The  Agreement  provides for the  acceleration  of the maturity of this
Note upon the occurrence of certain events and for prepayments of Loans upon the
terms and conditions specified therein.

         Except as permitted by Sections 11.9 and 11.24 of the  Agreement,  this
Note may not be assigned by the Lender to any other Person.

                                       2
<PAGE>

         Notwithstanding  anything  to the  contrary  in this  Note,  Borrower's
liability under this Note is subject to the limitations on liability  provisions
of  Article  12 of the Loan  Agreement,  the terms and  provisions  of which are
incorporated herein by reference.

                                       3
<PAGE>

         This Note shall be governed by, and construed in accordance with, the
law of the State of New York.

BORROWER:           1290 PARTNERS, L.P., a Delaware limited partnership

                    By:  1290 GP Corp., a Delaware corporation, its
                         general partner

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

                                       4

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