Document:

exv10w20

 

Exhibit 10.20

YARDVILLE NATIONAL BANK

DIRECTORS’ DEFERRED FEE PLAN

ARTICLE I

PURPOSE

     The purpose of the Yardville National Bank Directors’ Deferred Fee Plan
(hereinafter referred to as the “Plan”) is to aid in retaining and attracting
Directors of exceptional ability. This Plan is the successor to the Yardville
National Bank Directors Deferred Compensation Plan originally adopted as of
January 1, 1995 (the “1995 Plan”).

ARTICLE II

DEFINITIONS

     For the purpose of this Plan, the following words and phrases shall have
the meanings indicated, unless the context clearly indicates otherwise:

     “Beneficiary” means the person, persons or entity designated by the
Participant, or as provided in Article VII, to receive any benefits payable
under the Plan.

     “Board” means the Board of Directors of Yardville National Bank.

     “Change in Control” means:

	 	(a)	 	At such time as any “person” (as the term in used in Section
13(d) and 14(d) of the Securities and Exchange Act of 1934, as
amended (“Exchange Act”) is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of voting securities of the Company or the right to
acquire such securities, except for any voting securities purchase
by any employee benefit plan of the Company or its subsidiaries;
	 
	 	(b)	 	At such time as individuals who constitute the Board of
Directors of the Company on the date hereof (the “Incumbent Board”)
cease for any reason to constitute a least a majority thereof;
provided that any person becoming a director subsequent to the date
hereof whose election was approved by a vote of at least
three-quarters of the directors constituting the Incumbent Board (or
members who were nominated by the Incumbent Board), or whose
nomination for election by the Company’s stockholders was approved
by a nominating committee solely composed of members which are
Incumbent Board members (or members nominated by the Incumbent
Board), shall be, for purposes of this clause, considered as though
he or she were a member of the Incumbent Board.
	 
	 	(c)	 	At such time as a reorganization, merger, consolidation, or
similar transaction occurs or is effectuated as a result of which
60% of shares of common stock of the resulting entity are owned by
persons who were not stockholders of the Company immediately prior
to the consummation of the transaction; or

 

 

	 	(d)	 	At such time as substantially all of the assets of the
Company are sold or otherwise transferred to another corporation or
other entity that is not controlled by the Company.

     “Committee” means a Committee of the Board.

     “Company” means Yardville National Bancorp, Inc., a New Jersey
corporation, or any successor thereto.

     “Declared Rate” means, with respect to any Plan Year, two (2) percentage
points over the prime rate as published in the Wall Street Journal. The Board
shall establish the Declared Rate effective as of the first business day of
each Plan Year. Such Declared Rate, once established, shall be used for all
interest determinations during such Plan Year.

     “Deferral Benefit” means the benefit payable to a Participant or his
Beneficiary upon his termination of service as a Director or as otherwise
provided in his Participation Agreement, or upon approval of a Director’s
request for a Hardship Withdrawal.

     “Deferred Benefit Account” means the account maintained on the books of
the Company for each Participant pursuant to Article V. A Participant’s
Deferred Benefit Account shall be utilized solely as a device for the
measurement and determination of the amounts to be paid to the Participant
pursuant to this Plan. A Participant’s Deferred Benefit Account shall not
constitute or be treated as a trust fund of any kind.

     “Designation of Form for Payment” means the agreement filed by a
Participant designating the manner in which the Participant’s Deferred Benefit
Account balance shall be paid to the Participant or his beneficiary.

     “Determination Date” means the date on which the amount of a Participant’s
Deferred Benefit Account is determined as provided in Article V hereof. The
last day of each Plan Year shall be the Determination Date.

     “Director” means a non-employee member of the Board of Directors of the
Bank.

     “Fee” or “Fees” means any cash compensation paid to a Director for his
services as a Director, including retainers and fees for attendance at meetings
of the Board or Board Committees (or, if applicable, cash compensation received
for service as a director of the Company or as a director of any subsidiary of
the Bank or the Company).

     “Hardship Distribution” means a distribution pursuant to a Director’s
request made under Section 6.3 of the Plan.

     “Participant” means any eligible Director who elects to participate by
filing a Participation Agreement as provided in Article III.

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     “Participation Agreement” means the agreement filed by a Participant prior
to the beginning of the first period for which the Participant’s Fees are to be
deferred pursuant to the Plan and the Participation Agreement. A new
Participation Agreement may be filed by the Participant on an annual basis for
each separate Fee deferral election or an initial election may continue until
modified in accordance with the Plan.

     “Plan Year” means a twelve month period commencing January 1st and ending
the following December 31st. The first Plan Year shall commence on the date of
adoption of this Plan by the Board and end on December 31, 2004.

ARTICLE III

ELIGIBILITY AND PARTICIPATION

     3.1 ELIGIBILITY. Eligibility to participate in the Plan is limited to
Directors.

     3.2 PARTICIPATION. Participation in the Plan shall be limited to
Directors of the Bank who elect to participate in the Plan by filing a
Participation Agreement with the Bank. In addition, a Participant who is also
a Director of the Company or any subsidiary of the Bank or the Company may also
elect to defer all Fees received from such entity under this Plan. A
Participation Agreement must be filed prior to the December 15th immediately
preceding the Plan Year in which the Participant’s participation under the
agreement will commence, and the election to participate shall be effective on
the first day of the Plan Year following receipt by the Bank of a properly
completed and executed Participation Agreement. In the event that an
individual first becomes eligible to participate during the course of a Plan
Year or, with respect to participation during the first Plan Year, a
Participation Agreement must be filed no later than 30 days following
notification of the individual by the Committee of eligibility to participate
and such Participation Agreement shall be effective only with regard to Fees
earned or payable following the filing of the Participation Agreement with the
Committee.

     3.3 AMOUNT OF DEFERRAL. A Participant may elect in any Participation
Agreement to defer up to 100% of his Fees otherwise payable in cash during the
Plan Year in increments of 5%. A Participant’s election to defer his Fees
shall be irrevocable for the applicable Plan Year upon the filing of the
respective Participation Agreement; provided, however, that the deferral of
Fees under any Participation Agreement may be suspended or amended as provided
in Sections 10.1 or 10.2.

ARTICLE IV

DEFERRED FEES

     4.1 ELECTIVE DEFERRALS. The amount of Fees that a Participant elects to
defer under this Plan shall be credited by the Bank to the Participant’s
Deferred Benefit Account as the Participant’s Fees are payable. The amount
credited to a Participant’s Deferred Benefit Account shall equal the amount
deferred.

     4.2 NON-ELECTIVE CONTRIBUTIONS. The Board may, in its sole discretion,
credit an additional non-elective contribution to a Participant’s Deferred
Benefit Account in any

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Plan Year in an amount determined as a percentage of the Participant’s deferral
(i.e., a matching contribution) or otherwise.

     4.3 VESTING OF DEFERRED BENEFIT ACCOUNT. A Participant shall be 100%
vested in his Deferred Benefit Account at all times.

     4.4 DESIGNATION OF FORM OF PAYMENT. Subject to Section 6.4(c) and Article
XII, a Participant shall file a Designation of Form of Payment with the Bank
when the Participant submits his Participation Agreement. Such Designation of
Form of Payment shall apply to all amounts credited to the Participant’s
Deferred Benefit Account unless superceded by a new Designation of Form of
Payment filed in accordance with Section 6.4(c).

ARTICLE V

DEFERRED BENEFIT ACCOUNT

     5.1 DETERMINATION OF ACCOUNT. Subject to Article XII each Participant’s
Deferred Benefit Account as of each Determination Date shall consist of the
balance of the Participant’s Deferred Benefit Account as of the immediately
preceding Determination Date plus the Participant’s elective deferred Fees
withheld since the immediately preceding Determination Date pursuant to the
Section 4.1 and any non-elective contributions pursuant to Section 4.2. The
Deferred Benefit Account of each Participant shall be reduced by the amount of
all distributions, if any, made from such Deferred Benefit Account since the
preceding Determination Date.

     5.2 CREDITING OF ACCOUNT. As of each Determination Date, the
Participant’s Deferred Benefit Account shall be increased by the amount of
interest earned since the preceding Determination Date. Interest shall be
based upon the Declared Rate. Interest shall be based upon the average daily
balance of the Participant’s Deferred Benefit Account since the last preceding
Determination Date, but after the Deferred Benefit Account has been adjusted
for any contributions or distributions to be credited or deducted for each such
day.

     5.3 STATEMENT OF ACCOUNTS. The Committee shall submit to each
Participant, within 120 days after the close of each Plan Year, a statement in
such form as the Committee deems desirable, setting forth the balance to the
credit of such Participant in his Deferred Benefit Account as of the last day
of the preceding Plan Year.

ARTICLE VI

BENEFITS

     6.1 TERMINATION OF SERVICE AS DIRECTOR. Upon any termination of service
of the Participant as a Director, the Bank shall pay to the Participant a
Deferral Benefit equal to the amount of his Deferred Benefit Account.

     6.2 IN-SERVICE WITHDRAWAL. Subject to making a timely in-service
withdrawal election in a Participation Agreement, a Participant may receive
Deferral Benefits while still in service with the Company. The election to
receive an in-service withdrawal must be made by notifying the Committee of
such election at least one (1) calendar year prior to the

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date that payment Deferral Benefits commence. The Company shall pay to the
Participant a Deferral Benefit equal to the amount of his Deferred Benefit
Account.

     6.3 HARDSHIP DISTRIBUTIONS. A Participant may file a request with the
Committee for the payment of a Hardship Distribution of all or any portion of
his Deferred Benefit Account at any time prior to the Participant’s termination
of service. The payment of a Hardship Distribution shall be based upon the
Committee’s determination, in its sole discretion, that the Participant has
experienced an unforeseeable financial emergency which is caused by an event
beyond the Participant’s control that would result in serious financial
hardship to the Participant. A Participant’s future deferrals under any
Participation Agreement then in effect shall be suspended as of the date of a
Hardship Distribution to the Participant.

     6.4 FORM OF BENEFIT PAYMENT.

	 	  a)	 	Upon the occurrence of an event described in Section 6.1 or
upon the date specified by a Participant in an election under
Section 6.2, the Bank shall pay the Participant’s Deferred Benefit
Account, at the Participant’s election, in the form of (i) an annual
payment of a fixed amount which shall amortize the Participant’s
Deferred Benefit Account balance as of the date of such event in
equal monthly payments of principal and interest over a period of
not less than two (2) years nor more than ten (10) years; or (ii) a
lump sum. The Participant’s election shall be made on his or her
Designation of Form for Payment. For purposes of determining the
amount of the annual payment, the rate of interest shall be the
average of the Declared Rate credited to the Participant’s Deferred
Benefit Account for the three (3) completed Plan Years preceding the
initial payment (or the average of such lesser number of years in
which the Participant participated in the Plan).
	 
	 	  b)	 	A Participant may, while actively serving as a Director,
change the form in which his benefits shall be paid by filing a
revised Designation of Form for Payment indicating such change at
least one (1) calendar year prior to the date payments are to
commence. Such Designation of Form for Payment shall be irrevocable
beginning one (1) calendar year prior to the date payments are to
commence. Subject to Section 6.4(c), no changes in the form of
benefit payment shall be permitted following a Participant’s
termination of service as a Director.
	 
	 	  c)	 	Notwithstanding anything in this Plan to the contrary, a
Participant whose service as a Director terminates in connection
with a Change in Control may elect to receive a lump sum payment;
provided, however that such election must be made at least ninety
(90) days prior to the effective date of the Change in Control.

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     6.5 COMMENCEMENT OF PAYMENTS.

	 	  a)	 	Commencement of installment payments due under Sections 6.1
of this Plan shall begin within sixty (60) days following receipt of
notice by the Committee of an event which entitles a Participant (or
a Beneficiary) to payments under this Plan. A lump sum payment, if
elected, shall be made within ninety (90) days following a
Participant’s termination of service.
	 
	 	  b)	 	A Participant may elect on his or her Designation of Form of
Payment to defer the commencement of benefit payments otherwise
payable at the time specified in Section 6.1(a) to a later date but
in any event not beyond the first business day of the January
occurring after the year in which the Participant attains age 75.
Such election must be made prior to a Participant’s termination of
service in accordance with Section 6.4(a) and (c).
	 
	 	  c)	 	Commencement of payments under Section 6.2 of this Plan shall
begin upon the date requested by the Participant.
	 
	 	  d)	 	All installment payments made pursuant to this Section 6.4
shall be payable annually beginning with a single payment on the
date specified in this Section 6.5 and continuing each anniversary
of such date until fully paid in accordance with the Participant’s
election.

ARTICLE VII

BENEFICIARY DESIGNATION

     7.1 BENEFICIARY DESIGNATION. Each Participant shall have the right, at
any time, to designate any person or persons as his Beneficiary or
Beneficiaries (both principal as well as contingent) to wham payment under this
Plan shall be paid in the event of his death prior to complete distribution to
Participant of the benefits due him under the Plan. Any Participant
Beneficiary Designation shall be made in a written instrument filed with the
Committee and shall be effective only when received in writing by the
Committee.

     7.2 AMENDMENTS. Any Beneficiary designation may be changed by a
Participant by the written filing of such change on a form prescribed by the
Committee. The filing of a new Beneficiary designation form will cancel all
Beneficiary designations previously filed.

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     7.3 NO PARTICIPANT DESIGNATION. If a Participant fails to designate a
Beneficiary as provided above, or if all designated Beneficiaries predecease
the Participant, then Participant’s designated Beneficiary shall be deemed to
be the person or persons surviving him in the first of the following classes in
which there is a survivor, share and share alike:

	 	  a)	 	The surviving spouse;
	 
	 	  b)	 	The Participant’s children, except that if any of the
children predecease the Participant but leave issue surviving, then
such issue shall take by right of representation the share their
parent would have taken if living;
	 
	 	  c)	 	The Participant’s Estate.

     7.4 EFFECT OF PAYMENT. The payment to the deemed Beneficiary shall
completely discharge Bank’s obligations under this Plan.

ARTICLE VIII

ADMINISTRATION

     8.1 COMMITTEE; DUTIES. This Plan shall be administered by the Committee.
Members of the Committee may be Participants under this Plan but shall not
participate in deliberations or decisions which relate to their specific claim
for benefits under the Plan.

     8.2 AGENTS. The Committee may appoint an individual to be the Committee’s
agent with respect to the day-to-day administration of the Plan. In addition,
the Committee may, from time to time, employ other agents and delegate to them
such administrative duties as it sees fit, and may from time to time consult
with counsel who may be counsel to the Bank.

     8.3 BINDING EFFECT OF DECISIONS. The decision or action of the Committee
with respect to any question arising out of or in connection with the
administration, interpretation and application of the Plan and the rules and
regulations promulgated hereunder shall be final and binding upon all persons
having any interest in the Plan.

     8.4 INDEMNITY OF COMMITTEE. The Bank shall indemnify and hold harmless
the members of the Committee against any and all claims, loss, damage, expense
or liability arising from any action or failure to act with respect to this
Plan, except in the case of gross negligence or willful misconduct by the
Committee.

ARTICLE IX

CLAIMS PROCEDURE

     9.1 CLAIM. Any person claiming a benefit, requesting an interpretation or
ruling under the Plan, or requesting information under the Plan shall present
the request in writing to the Committee which shall respond in writing as soon
as practicable.

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     9.2 DENIAL OF CLAIM. If the claim or request is denied, the written
notice of denial shall be made within ninety (90) days of the date of receipt
of such claim or requested by the Committee and shall state:

	 	  a)	 	The reason for denial, with specific references to the Plan
provisions on which the denial is based.
	 
	 	  b)	 	A description of any additional material or information
required and an explanation of why it is necessary.
	 
	 	  c)	 	An explanation of the Plan’s claim review procedure.

     9.3 REVIEW OF CLAIM. Any person whose claim or request is denied or who
has not received a response within ninety (90) days may request review by
notice given in writing to the Committee within sixty (60) days of receiving a
response or one hundred fifty (150) days from the date the claim was received
by the Committee. The claim or request shall be reviewed by the Committee who
may, but shall not be required to, grant the claimant a hearing. On review,
the claimant may have representation, examine pertinent documents, and submit
issues and comments in writing.

     9.4 FINAL DECISION. The decision on review shall normally be made within
sixty (60) days after the Committee’s receipt of a request for review. If an
extension of time is required for a hearing or other special circumstances, the
claimant shall be notified and the time limit shall be one hundred twenty (120)
days after the Committee’s receipt of a request for review. The decision shall
be in writing and shall state the reasons and the relevant Plan provisions.
All decisions on review shall be final and bind all parties concerned.

ARTICLE X

AMENDMENT AND TERMINATION OF PLAN

     10.1 AMENDMENT. The Board may at any time amend the Plan in whole or in
part, provided, however, that no amendment shall be effective to decrease or
restrict any Deferred Benefit Account maintained pursuant to any existing
deferral under the Plan. Any change in the formula used to determine the
Declared Rate shall be prospective only and shall not become effective until
the first day of the calendar year which follows the adoption of the amendment.

     10.2 TERMINATION. The Board may at any time terminate the Plan if, in its
judgment, the tax, accounting, or other effects of the continuance of the Plan,
or potential payments thereunder would not be in the best interests of the
Bank, but such termination shall not affect the accrued benefits of
Participants as of the date of termination. Such deferrals shall otherwise
remain subject to the terms of this Plan.

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ARTICLE XI

MISCELLANEOUS

     11.1 UNSECURED GENERAL CREDITOR. Participants and their Beneficiaries,
heirs, successors and assigns shall have no secured interest or claim in any
property or assets of the Bank, nor shall they be beneficiaries of, or have any
rights, claims or interests in any life insurance policies, annuity contracts
or the proceeds therefrom owned or which may be acquired by the Bank
(“Policies”). Such Policies or other assets of the Bank shall not be held
under any trust for the benefit of Participants, their Beneficiaries, heirs,
successors or assigns, or held in any way as collateral security for the
fulfilling of the obligations of Bank under this Plan. Any and all of the
Bank’s assets and Policies shall be, and remain, the general, unpledged,
unrestricted assets of the Bank. The Bank’s obligation under the Plan shall be
merely that of an unfunded and unsecured promise of the Bank to pay money in
the future.

     11.2 NON-ASSIGNABILITY. Neither a Participant nor any other person shall
have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage
or otherwise encumber, transfer, hypothecate or convey in advance of actual
receipt the amounts, if any, payable hereunder, or any part thereof, which are,
and all rights to which are, expressly declared to be unassignable and
non-transferable. No part of the amounts payable shall, prior to actual
payment, be subject to seizure or sequestration for the payment of any debts,
judgments, alimony or separate maintenance owed by a Participant or any other
person, nor be transferable by operation of law in the event of a Participant’s
or any other person’s bankruptcy or insolvency.

     11.3 NOT A CONTRACT OF DIRECTORSHIP. The terms and conditions of this
Plan shall not be deemed to constitute a contract between the Bank and the
Participant relating to the Participant’s service as a Director, and the
Participant (or his Beneficiary) shall have no rights against the Bank except
as may otherwise be specifically provided herein. Moreover, nothing in this
Plan shall be deemed to give a Participant the right to be retained in the
service of the Bank or to interfere with the right of the Bank to discipline or
discharge him at any time.

     11.4 PARTICIPANT COOPERATION. A Participant will cooperate with the Bank
by furnishing any and all information requested by the Bank in order to
facilitate the payment of benefits under and by taking such physical
examinations and such other action as may be requested by the Bank.

     11.5 TERMS. Whenever any words are used herein in the masculine, they
shall be construed as though they were used in the feminine in all cases where
they would so apply; and wherever any words are used herein in the singular or
in the plural, they shall be construed as though they were used in the plural
or the singular, as the case may be, in all cases where they would so apply.

     11.6 CAPTIONS. The captions of the articles, sections and paragraphs of
this Plan are for convenience only and shall not control or affect the meaning
or construction of any of its provisions.

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     11.7 GOVERNING LAW. The provisions of this Plan shall be construed and
interpreted according to the laws of the State of New Jersey.

     11.8 VALIDITY. In case any provision of this Plan shall be held illegal
or invalid for any reason, said illegality or invalidity shall not affect the
remaining parts hereof, but this Plan shall be construed and enforced as if
such illegal and invalid provision had never been inserted herein.

     11.9 NOTICE. Any notice or filing required or permitted to be given to
the Committee under the Plan shall be sufficient if in writing and hand
delivered, or sent by registered or certified mail, to any member of the
Committee, the President of the Bank or the Bank’s Statutory Agent. Such
notice shall be deemed given as of the date of delivery or, if delivery is made
by mail as of three (3) days following the date shown on the postmark or on the
receipt for registration or certification.

     11.10 SUCCESSORS. The provisions of this Plan shall bind and inure to the
benefit of the Bank and its successors and assigns. The term successors as
used herein shall include any corporate or other business entity which shall,
whether by merger, consolidation, purchase or otherwise acquire all or
substantially all of the business and assets of the Bank and successors of any
such corporation or other business entity.

ARTICLE XII

SPECIAL TRANSITION RULES RELATING TO THE 1995 PLAN

     This Plan is the successor the 1995 Plan which was terminated by the Board
effective upon the effective date of this Plan. The opening balance of the
Deferred Benefit Account of a Participant in this Plan who also participated in
the 1995 Plan shall be equal to the balance of the Participant’s account under
the 1995 Plan on the date immediately preceding the effective date of this
Plan. A Participant’s election under the 1995 Plan with respect to the
distribution of benefits upon termination of service shall remain in effect
under this Plan unless superceded by a new Designation of Form of Payment filed
in accordance with the provisions of this Plan and covering transferred 1995
Plan benefits and any benefits accrued under this Plan. In all other respects,
the terms and conditions of this Plan shall govern the rights of Participants
with respect to transferred 1995 Plan benefits and any benefits accrued under
this Plan. Upon the filing of a Participation Agreement under this Plan, a
Participant who participated in the 1995 Plan shall be deemed to have consented
to the foregoing modifications and the transfer of their account balances.

10<PAGE>

                                                                   EXHIBIT 10.82

                                 LOAN AGREEMENT

                    $190,000,000 PORTFOLIO OF MORTGAGE LOANS

                                       BY

                       METROPOLITAN LIFE INSURANCE COMPANY
                                     LENDER

                                       TO

                            KRT PROPERTY HOLDINGS LLC
                                  LILAC DE LLC
                               KR COLLEGETOWN LLC
                          FOX RUN, LIMITED PARTNERSHIP
                           KR STREET ASSOCIATES, L.P.
                      KRAMONT OPERATING PARTNERSHIP, L.P.
                                 KR BARN, L.P.
                            KR BEST ASSOCIATES, L.P.
                                       AND
                              KR DEVELOPMENT, L.P.
                             COLLECTIVELY, BORROWER

                           Dated: As of June 16, 2003

<PAGE>

                                 LOAN AGREEMENT

         THIS LOAN AGREEMENT is made as of this 16 day of June, 2003 by KRT
PROPERTY HOLDINGS LLC, a Delaware limited liability company ("KRT"), LILAC DE
LLC , a Delaware limited liability company ("LILAC"), KR COLLEGETOWN LLC, a
Delaware limited liability company ("COLLEGETOWN"), FOX RUN, LIMITED
PARTNERSHIP, a Alabama limited partnership ("FOX RUN"); KR STREET ASSOCIATES,
L.P., a Pennsylvania limited partnership ("STREET"); KRAMONT OPERATING
PARTNERSHIP, L.P., a Delaware limited partnership ("KRAMONT"), KR BARN, L.P., a
Pennsylvania limited partnership ("BARN"), KR BEST ASSOCIATES, L.P., a
Pennsylvania limited partnership ("BEST") and KR DEVELOPMENT, L.P., a
Pennsylvania limited partnership ("DEVELOPMENT"; and together with KRT, Lilac,
Collegetown, Fox Run, Street, Kramont, Barn, Best and Development, individually,
a "BORROWER" and collectively the "BORROWER"), as borrower, and METROPOLITAN
LIFE INSURANCE COMPANY, a New York corporation (together with its successors and
assigns, "LENDER"), as lender.

                                    RECITALS

         Borrowers have requested that Lender make certain loans to Borrowers in
the aggregate principal amount of $190,000,000.00. Lender is willing to make
such loan to Borrowers on the terms and conditions set forth in this Loan
Agreement.

         NOW, THEREFORE, in consideration of such loan and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, Borrower and Lender
agree as follows:

                                   ARTICLE 1
                                  DEFINED TERMS

         1.01 Defined Terms. For this Agreement, the following terms shall have
the meanings hereinafter set forth.

         "$10.5 MILLION LOAN" means that certain loan in the amount of
$10,500,000.00 made by Lender to Best and Development on the date hereof.

         "$10.5 MILLION LOAN MORTGAGE." means that certain Fee and Leasehold
Mortgage, Security Agreement and Fixture Filing dated as of the Execution Date
made by Best and Development for the benefit of Lender in the original principal
amount of $190,000,000.00, to secure repayment of the Obligations (as defined
therein) consisting of the $10.5 Million Note and the performance by Best and
Development under the $10.5 Million Payment Guaranty, together with all
extensions, renewals, modifications, restatements and amendments thereof, which
$10.5 Million Loan Mortgage encumbers Best's fee interest and Development's
leasehold interest in the Valley Fair Property.

<PAGE>

         "$10.5 MILLION NOTE" means that certain Promissory Note dated as of the
Execution Date in the original principal amount of $10,500,000.00 made by Best
and Development to the order of Lender, evidencing the $10.5 Million Loan,

         "$10.5 MILLION PAYMENT GUARANTY" means that certain Guaranty Agreement
dated as of the Execution Date made by Best and Development in connection with
the $10.5 Million Loan, pursuant to which Best and Development guarantee to
Lender the payment by the other Borrowers of the indebtedness evidenced by the
other Notes.

         "$13.1 MILLION LOAN" means that certain loan in the amount of
$13,100,000.00 made by Lender to KRT on the date hereof.

         "$13.1 MILLION LOAN MORTGAGE" means that certain Mortgage, Security
Agreement and Fixture Filing dated as of the Execution Date made by KRT for the
benefit of Lender in the original principal amount of $190,000,000.00, to secure
repayment of the Obligations (as defined therein) consisting of the $13.1
Million Note and the repayment of the $14.8 Million Note (Commerce Circle), the
$14.8 Million Note (Groton Square), the $17.5 Million Note, the $18.2 Million
Note, the $19.3 Million Note, $2.1 Million Note, the $30.5 Million Note, the
$4.9 Million Note, the $5.6 Million Note and the $8.8 Million Note and the
performance by KRT under the $13.1 Million Payment Guaranty, together with all
extensions, renewals, modifications, restatements and amendments thereof, which
$13.1 Million Loan Mortgage encumbers KRT's fee interest in the Park Hills Plaza
Property.

         "$13.1 MILLION NOTE" means that certain Promissory Note dated as of the
Execution Date in the original principal amount of $13,100,000.00 made by KRT to
the order of Lender, evidencing the $13.1 Million Loan.

         "$13.1 MILLION PAYMENT GUARANTY" means that certain Guaranty Agreement
dated as of the Execution Date made by KRT in connection with the $13.1 Million
Loan, pursuant to which KRT guarantees to Lender the payment by Best,
Development, Collegetown, Fox Run and Street of the indebtedness evidenced by
their respective Notes.

         "$14.8 MILLION LOAN (COMMERCE CIRCLE)" means that certain loan in the
amount of $14,800,000.00 made by Lender to KRT on the date hereof.

         "$14.8 MILLION LOAN (COMMERCE CIRCLE) MORTGAGE" means that certain
Mortgage, Security Agreement and Fixture Filing dated as of the Execution Date
made by KRT for the benefit of Lender in the original principal amount of
$190,000,000.00, to secure repayment of the Obligations (as defined therein)
consisting of the $14.8 Million Note (Commerce Circle) and the repayment of the
$13.1 Million Note, the $14.8 Million Note (Groton Square), the $17.5 Million
Note, the $18.2 Million Note, the $19.3 Million Note, $2.1 Million Note, the
$30.5 Million Note, the $4.9 Million Note, the $5.6 Million Note and the $8.8
Million Note and the performance by KRT under the $14.8 Million Payment Guaranty
(Commerce Circle), together with all extensions, renewals, modifications,
restatements and amendments thereof, which $14.8 Million Loan (Commerce Circle)
Mortgage encumbers KRT's fee interest in the Bristol Commerce Park Property.

                                      -2-

<PAGE>

         "$14.8 MILLION NOTE (COMMERCE CIRCLE)" means that certain Promissory
Note dated as of the Execution Date in the original principal amount of
$14,800,000.00 made by KRT to the order of Lender, evidencing the $14.8 Million
Loan (Commerce Circle).

         "S14.8 MILLION PAYMENT GUARANTY (COMMERCE CIRCLE)" means that certain
Guaranty Agreement dated as of the Execution Date made by KRT in connection with
the $14.8 Million Loan (Commerce Circle), pursuant to which KRT guarantees to
Lender the payment by Best, Development, Collegetown, Fox Run and Street of the
indebtedness evidenced by their respective Notes.

         "$14.8 MILLION LOAN (GROTON SQUARE)" means that certain loan in the
amount of $14,800,000.00 made by Lender to KRT on the date hereof.

         "$14.8 MILLION LOAN (GROTON SQUARE) MORTGAGE" means that certain
Mortgage, Security Agreement and Fixture Filing dated as of the Execution Date
made by KRT for the benefit of Lender in the original principal amount of
$190,000,000.00, to secure repayment of the Obligations (as defined therein)
consisting of the $14.8 Million Note (Groton Square) and the repayment of the
$13.1 Million Note, the $14.8 Million Note (Commerce Circle), the $17.5 Million
Note, the $18.2 Million Note, the $19.3 Million Note, $2.1 Million Note, the
$30.5 Million Note, the $4.9 Million Note, the $5.6 Million Note and the $8.8
Million Note and the performance by KRT under the $14.8 Million Payment Guaranty
(Groton Square), together with all extensions, renewals, modifications,
restatements and amendments thereof, which $14.8 Million Loan (Groton Square)
Mortgage encumbers KRT's fee interest in the Groton Square Property.

         "$14.8 MILLION NOTE (GROTON SQUARE)" means that certain Promissory Note
dated as of the Execution Date in the original principal amount of
$14,800,000.00 made by KRT to the order of Lender, evidencing the $14.8 Million
Loan (Groton Square).

         "$14.8 MILLION PAYMENT GUARANTY (GROTON SQUARE)" means that certain
Guaranty Agreement dated as of the Execution Date made by KRT in connection with
the $14.8 Million Loan (Groton Square), pursuant to which KRT guarantees to
Lender the payment by Best, Development, Collegetown, Fox Run and Street of the
indebtedness evidenced by their respective Notes.

         "$16.7 MILLION LOAN" means that certain loan in the amount of
$16,700,000,00 made by Lender to Fox Run on the date hereof.

         "$16.7 MILLION LOAN MORTGAGE" means that certain Consolidation,
Amendment and Restatement Deed of Trust, Security Agreement and Fixture Filing
dated as of the Execution Date made by Fox Run for the benefit of Lender in the
original principal amount of $30,000,000.00, to secure repayment of the
Obligations (as defined therein) consisting of the $16.7 Million Note and the
performance by Fox Run under the $16.7 Million Payment Guaranty, together with
all extensions, renewals, modifications, restatements and amendments thereof,
which $16.7 Million Loan Mortgage encumbers Fox Run's fee interest in the Fox
Run Property.

                                      -3-

<PAGE>

         "$16.7 MILLION NOTE" means that certain Promissory Note dated as of the
Execution Date in the original principal amount of $16,700,000.00 made by Fox
Run to the order of Lender, evidencing the $16.7 Million Loan.

         "$16.7 MILLION PAYMENT GUARANTY" means that certain Guaranty Agreement
dated as of the Execution Date made by Fox Run in connection with the $16.7
Million Loan, pursuant to which Fox Run guarantees to Lender the payment by the
other Borrowers of the indebtedness evidenced by the other Notes.

         "$17.5 MILLION LOAN" means that certain loan in the amount of
$17,500,000.00 made by Lender to KRT on the date hereof.

         "$17.5 MILLION LOAN MORTGAGE" means that certain Mortgage, Security
Agreement and Fixture Filing dated as of the Execution Date made by KRT for the
benefit of Lender in the original principal amount of $190,000,000.00, to secure
repayment of the Obligations (as defined therein) consisting of the $17.5
Million Note and the repayment of the $13.1 Million Note, the $14.8 Million Note
(Commerce Circle), the $14.8 Million Note (Groton Square), the $18.2 Million
Note, the $19.3 Million Note, $2.1 Million Note, the $30.5 Million Note, the
$4.9 Million Note, the $5.6 Million Note and the $8.8 Million Note and the
performance by KRT under the $17.5 Million Payment Guaranty, together with all
extensions, renewals, modifications, restatements and amendments thereof, which
$17.5 Million Loan Mortgage encumbers KRT's fee interest in the Whitehall Square
Property.

         "$17.5 MILLION NOTE" means that certain Promissory Note dated as of the
Execution Date in the original principal amount of $17,500,000.00 made by KRT to
the order of Lender, evidencing the $17.5 Million Loan.

         "$17.5 MILLION PAYMENT GUARANTY" means that certain Guaranty Agreement
dated as of the Execution Date made by KRT in connection with the $17.5 Million
Loan, pursuant to which KRT guarantees to Lender the payment by Best,
Development, Collegetown, Fox Run and Street of the indebtedness evidenced by
their respective Notes.

         "$18.2 MILLION LOAN" means that certain loan in the amount of
$18,200,000.00 made by Lender to KRT, Kramont and Bam on the date hereof.

         "$18.2 MILLION LOAN MORTGAGE" means that certain Fee and Leasehold
Mortgage, Security Agreement and Fixture Filing dated as of the Execution Date
made by KRT, Kramont and Barn for the benefit of Lender in the original
principal amount of $190,000,000.00, to secure repayment of the Obligations (as
defined therein) consisting of the $18.2 Million Note and the repayment of the
$13.1 Million Note, the $14.8 Million Note (Commerce Circle), the $14.8 Million
Note (Groton Square), the $17.5 Million Note, the $19.3 Million Note, $2.1
Million Note, the $30.5 Million Note, the $4.9 Million Note, the $5.6 Million
Note and the $8.8 Million Note and the performance by KRT, Kramont and Barn
under the $18.2 Million Payment Guaranty, together with all extensions,
renewals, modifications, restatements and amendments thereof, which $18.2
Million Loan Mortgage encumbers KRT's and Kramont's fee interest and Barn's
leasehold interest in the Barn Plaza Property,

                                      -4-

<PAGE>

         "$18.2 MILLION NOTE" means that certain Promissory Note dated as of the
Execution Date in the original principal amount of $18,200,000.00 made by KRT,
Kramont and Barn to the order of Lender, evidencing the $18.2 Million Loan.

         "$18.2 MILLION PAYMENT GUARANTY" means that certain Guaranty Agreement
dated as of the Execution Date made by KRT, Kramont and Barn in connection with
the $18.2 Million Loan, pursuant to which KRT, Kramont and Barn guarantee to
Lender the payment by Best, Development, Collegetown, Fox Run and Street of the
indebtedness evidenced by their respective Notes.

         "$19.3 MILLION LOAN" means that certain loan in the amount of
$19,300,000.00 made by Lender to KRT on the date hereof.

         "$19.3 MILLION LOAN MORTGAGE" means that certain Mortgage, Security
Agreement and Fixture Filing dated as of the Execution Date made by KRT for the
benefit of Lender in the original principal amount of $190,000,000.00, to secure
repayment of the Obligations (as defined therein) consisting of the $19.3
Million Note and the repayment of the $13.1 Million Note, the $14.8 Million Note
(Commerce Circle), the $14.8 Million Note (Groton Square), the $17.5 Million
Note, the $18.2 Million Note, $2.1 Million Note, the $30.5 Million Note, the
$4.9 Million Note, the $5.6 Million Note and the $8.8 Million Note and the
performance by KRT under the $19,3 Million Payment Guaranty, together with all
extensions, renewals, modifications, restatements and amendments thereof, which
$19.3 Million Loan Mortgage encumbers KRT's fee interest in the Bethlehem Square
Property.

         "$9.3 MILLION NOTE" means that certain Promissory Note dated as of the
Execution Date in the original principal amount of $19,300,000.00 made by KRT to
the order of Lender, evidencing the $19.3 Million Loan.

         "$19.3 MILLION PAYMENT GUARANTY" means that certain Guaranty Agreement
dated as of the Execution Date made by KRT in connection with the $19.3 Million
Loan, pursuant to which KRT guarantees to Lender the payment by Best,
Development, Collegetown, Fox Run and Street of the indebtedness evidenced by
their respective Notes.

         "$2.1 MILLION LOAN" means that certain loan in the amount of
$2,100,000.00 made by Lender to KRT on the date hereof.

         "$2.1 MILLION LOAN MORTGAGE" means collectively, (a) that certain
Mortgage, Security Agreement and Fixture Filing dated as of the Execution Date
made by KRT for the benefit of Lender in the original principal amount of
$47,000,000.00, to secure repayment of the Obligations (as defined therein)
consisting of the $2.1 Million Note and the repayment of the $30.5 Million Note,
the $5.6 Million Note and the $8.8 Million Note and (b) that certain Mortgage,
Security Agreement and Fixture Filing dated as of the Execution Date made by KRT
for the benefit of Lender in the original principal amount of $13,000,000.00, to
secure repayment of the $13.1 Million Note, the $14.8 Million Note (Commerce
Circle), the $14.8 Million Note (Groton Square), the $17.5 Million Note, the
$18.2 Million Note, the $19.3 Million Note and the $4.9 Million Note and the
performance by KRT under the $2.1 Million Payment Guaranty, together with all
extensions, renewals, modifications, restatements and amendments thereof,

                                      -5-

<PAGE>

which $2.1  Million Loan Mortgage encumbers KRT's fee interest in the Village
Square Property.

         "$2.1 MILLION NOTE" means that certain Promissory Note dated as of the
Execution Date in the original principal amount of $2,100,000.00 made by KRT to
the order of Lender, evidencing the $2.1 Million Loan.

         "$2.1 MILLION PAYMENT GUARANTY" means that certain Guaranty Agreement
dated as of the Execution Date made by KRT in connection with the $2.1 Million
Loan, pursuant to which KRT guarantees to Lender the payment by Best,
Development, Collegetown, Fox Run and Street of the indebtedness evidenced by
their respective Notes.

         "$30.5 MILLION LOAN" means that certain loan in the amount of
$30,500,000.00 made by Lender to KRT and Lilac on the date hereof:

         "$30.5 MILLION LOAN MORTGAGE" means, collectively (a) that certain
Agreement of Spreader, Consolidation and Modification of Fee and Leasehold
Mortgage, Security Agreement and Fixture Filing dated as of the Execution Date
made by KRT and Lilac for the benefit of Lender in the original principal amount
of $47,000,000.00, to secure repayment of the Obligations (as defined therein)
consisting of the $30.5 Million Note and the repayment of the $2.1 Million Note,
the $5.6 Million Note and the $8.8 Million Note, and (b) that certain Second Fee
and Leasehold Mortgage, Security Agreement and Fixture Filing dated as of the
Execution Date made by KRT and Lilac for the benefit of Lender in the original
principal amount of $13,000,000.00, to secure repayment of the $13.1 Million
Note, the $14.8 Million Note (Commerce Circle), the $14.8 Million Note (Groton
Square), the $17.5 Million Note, the $18.2 Million Note, the $19.3 Million Note
and the $4.9 Million Note and the performance by KRT and Lilac under the $30.5
Million Payment Guaranty, together with all extensions, renewals, modifications,
restatements and amendments thereof, which $30.5 Million Loan Mortgage encumbers
KRT's fee interest and Lilac's fee and leasehold interest in the Mall at Cross
County Property.

         "$30.5 MILLION NOTE" means that certain Amended, Restated and
Consolidated Promissory Note dated as of the Execution Date in the original
principal amount of $30,500,000.00 made by KRT and Lilac to the order of Lender,
evidencing the $30.5 Million Loan.

         "$30.5 MILLION PAYMENT GUARANTY" means that certain Guaranty Agreement
dated as of the Execution Date made by KRT and Lilac in connection with the
$30.5 Million Loan, pursuant to which KRT and Lilac guarantee to Lender the
payment by Best, Development, Collegetown, Fox Run and Street of the
indebtedness evidenced by their respective Notes.

         "$4.7 MILLION LOAN" means that certain loan in the amount of
$4,700,000.00 made by Lender to Street on the date hereof.

         "$4.7 MILLION LOAN MORTGAGE" means that certain Mortgage, Security
Agreement and Fixture Filing dated as of the Execution Date made by Street for
the benefit of Lender in the original principal amount of $190,000,000.00, to
secure repayment of the Obligations (as defined

                                      -6-

<PAGE>

therein) consisting of the $4.7 Million Note and the performance by Street under
the $4.7 Million Payment Guaranty, together with all extensions, renewals,
modifications, restatements and amendments thereof, which $4.7 Million Loan
Mortgage encumbers Street's fee interest in the Street Road Plaza Property.

         "$4.7 MILLION NOTE" means that certain Promissory Note dated as of the
Execution Date in the original principal amount of $4.700,000.00 made by Street
to the order of Lender, evidencing the $4.7 Million Loan.

         "$4.7 MILLION PAYMENT GUARANTY" means that certain Guaranty Agreement
dated as of the Execution Date made by Street in connection with the $4.7
Million Loan, pursuant to which Street guarantees to Lender the payment by the
other Borrowers of the indebtedness evidenced by the other Notes.

         "$4.9 MILLION LOAN" means that certain loan in the amount of
$4,900,000.00 made by Lender to KRT on the date hereof.

         "$4.9 MILLION LOAN MORTGAGE" means that certain Mortgage, Security
Agreement and Fixture Filing dated as of the Execution Date made by KRT for the
benefit of Lender in the original principal amount of $190,000,000.00, to secure
repayment of the Obligations (as defined therein) consisting of the $4.9 Million
Note and the repayment of the $13.1 Million Note, the $14.8 Million Note
(Commerce Circle), the $14.8 Million Note (Groton Square), the $17.5 Million
Note, the $18.2 Million Note, the $19.3 Million Note, $2.1 Million Note, the
$30.5 Million Note, the $5.6 Million Note and the $8.8 Million Note and the
performance by KRT under the $4.9 Million Payment Guaranty, together with all
extensions, renewals, modifications, restatements and amendments thereof, which
$4.9 Million Loan Mortgage encumbers KRT's fee interest in the Bensalem Square
Property.

         "$4.9 MILLION NOTE" means that certain Promissory Note dated as of the
Execution Date in the original principal amount of $4,900,000.00 made by KRT to
the order of Lender, evidencing the $4.9 Million Loan.

         "$4.9 MILLION PAYMENT GUARANTY" means that certain Guaranty Agreement
dated as of the Execution Date made by KRT in connection with the $4.9 Million
Loan, pursuant to which KRT guarantees to Lender the payment by Best,
Development, Collegetown, Fox Run and Street of the indebtedness evidenced by
their respective Notes.

         "$5.6 MILLION LOAN" means that certain loan in the amount of
$5,600,000.00 made by Lender to KRT on the date hereof.

         "$5.6 MILLION LOAN MORTGAGE" means, collectively, (a) that certain
Mortgage, Security Agreement and Fixture Filing dated as of the Execution Date
made by KRT for the benefit of Lender in the original principal amount of
$47,000,000.00, to secure repayment of the Obligations (as defined therein)
consisting of the $5.6 Million Note and the repayment of the $2.1 Million Note,
the $30.5 Million Note and the $8.8 Million Note and (b) that certain Second
Mortgage, Security Agreement and Fixture Filing dated as of the Execution Date
made by KRT for the benefit of Lender in the original principal amount of
$13,000,000.00, to secure repayment

                                      -7-

<PAGE>

of $13.1 Million Note, the $14.8 Million Note (Commerce Circle), the $14.8
Million Note (Groton Square), the $17.5 Million Note, the $18.2 Million Note,
the $19.3 Million Note and the $4.9 Million Note and the performance by KRT
under the $5.6 Million Payment Guaranty, together with all extensions, renewals,
modifications, restatements and amendments thereof, which $5.6 Million Loan
Mortgage encumbers KRT's fee interest in the North Ridge Plaza Property.

         "$5.6 MILLION NOTE" means that certain Amended, Restated and
Consolidated Promissory Note dated as of the Execution Date in the original
principal amount of $5,600,000.00 made by KRT to the order of Lender, evidencing
the $5.6 Million Loan.

         "$5.6 MILLION PAYMENT GUARANTY" means that certain Guaranty Agreement
dated as of the Execution Date made by KRT in connection with the $5.6 Million
Loan, pursuant to which KRT guarantees to Lender the payment by Best,
Development, Collegetown, Fox Run and Street of the indebtedness evidenced by
their respective Notes.

         "$8.5 MILLION LOAN" means that certain loan in the amount of
$8,500,000.00 made by Lender to Collegetown,

         "$8.5 MILLION LOAN MORTGAGE" means that certain Mortgage, Security
Agreement and Fixture Filing dated as of the Execution Date made by Collegetown
for the benefit of Lender in the original principal amount of $190,000,000.00,
to secure repayment of the Obligations (as defined therein) consisting of the
$8.5 Million Note and the performance by Collegetown under the $8.5 Million
Payment Guaranty, together with all extensions, renewals, modifications,
restatements and amendments thereof, which $8.5 Million Loan Mortgage encumbers
Collegetown's fee interest in the Collegetown Shopping Center Property.

         "$8.5 MILLION NOTE" means that certain Promissory Note dated as of the
Execution Date in the original principal amount of $8,500,000.00 made by
Collegetown to the order of Lender, evidencing the $8.5 Million Loan.

         "$8.5 MILLION PAYMENT GUARANTY" means that certain Guaranty Agreement
dated as of the Execution Date made by Collegetown in connection with the $8.5
Million Loan, pursuant to which Collegetown guarantees to Lender the payment by
the other Borrowers of the indebtedness evidenced by the other Notes.

         "$8.8 MILLION LOAN" means that certain loan in the amount of
$8,800,000.00 made by Lender to KRT.

         "$8.8 MILLION LOAN MORTGAGE" means (a) that certain Mortgage, Security
Agreement and Fixture Filing dated as of the Execution Date made by KRT for the
benefit of Lender in the original principal amount of $47,000,000.00, to secure
repayment of the Obligations (as defined therein) consisting of the $8.8 Million
Note and the repayment of the $2.1 Million Note, the $30.5 Million Note and the
$5.6 Million Note and (b) that certain Second Mortgage, Security Agreement and
Fixture Filing dated as of the Execution Date made by KRT for the benefit of
Lender in the original principal amount of $13,000,000.00, to secure repayment
of the $13.1 Million Note, the $14.8 Million Note (Commerce Circle), the $14.8
Million Note (Groton

                                      -8-

<PAGE>

Square), the $17.5 Million Note, the $18.2 Million Note, the $19.3 Million Note
and the $4.9 Million Note and the performance by KRT under the $8.8 Million
Payment Guaranty, together with all extensions, renewals, modifications,
restatements and amendments thereof, which $8.8 Million Loan Mortgage encumbers
KRT's fee interest in the High Ridge Plaza Property.

         "$8.8 MILLION NOTE" means that certain Amended, Restated and
Consolidated Promissory Note dated as of the Execution Date in the original
principal amount of $8,800,000,00 made by KRT to the order of Lender, evidencing
the $8.8 Million Loan.

         "$8.8 MILLION PAYMENT GUARANTY" means that certain Guaranty Agreement
dated as of the Execution Date made by KRT in connection with the $8.8 Million
Loan, pursuant to which KRT guarantees to Lender the payment by Best,
Development, Collegetown, Fox Run and Street of the indebtedness evidenced by
their respective Notes.

         "ACCELERATED LOAN AMOUNT" has the meaning set forth in Section 2.07.

         "ADVANCE DATE" means the date on which the Loans are disbursed to
Borrowers.

         "AGGREGATE NOTE INDEBTEDNESS" means, with respect to each Note, the
amount defined therein as Aggregate Indebtedness.

         "AGGREGATE SECURED INDEBTEDNESS" means the aggregate amount of the
unpaid principal sum evidenced by all of the Notes, all accrued and unpaid
interest, and all other sums evidenced by the Notes or secured by the Mortgages
and/or any other Loan Documents as well as any additional advances under the
Mortgages that may be made to or on behalf of any Borrower by Lender following
the Advance Date.

         "BARN" has the meaning set forth in the introductory paragraph of this
Loan Agreement.

         "BARN PLAZA PROPERTY" means that certain shopping center located at
1745 South Easton Road, Doylestown, Pennsylvania.

         "BEST" has the meaning set forth in the introductory paragraph of this
Loan Agreement.

         "BENSALEM SQUARE PROPERTY" means that certain shopping center located
at Knights and Dunks Ferry Road, Bensalem, Pennsylvania.

         "BETHLEHEM SQUARE PROPERTY" means that certain shopping center located
at 3926 Linden Street, Bethlehem, Pennsylvania.

         "BORROWER(s)" has the meaning set forth in the introductory paragraph
of this Loan Agreement.

         "BRISTOL COMMERCE PARK PROPERTY" means that certain shopping center
located at the southeast corner of Route 413 and Route 13, Bristol,
Pennsylvania.

                                      -9-

<PAGE>

         "BUSINESS DAY" or "BUSINESS DAY" means any day other than a Saturday, a
Sunday, or days when federal banks located in the State of New York are closed
for a legal holiday or by government directive.

         "COLLEGETOWN" has the meaning set forth in the introductory paragraph
of this Loan Agreement.

         "COLLEGETOWN SHOPPING CENTER PROPERTY" means that certain shopping
center located at Delsea Drive and Heston Road, Glassboro, New Jersey.

         "DEFAULT RATE" means the lesser of (i) an annual rate equal to the
highest applicable Interest Rate plus four percent (4%), and (ii) the highest
rate permitted under applicable law.

         "DEVELOPMENT" has the meaning set forth in the introductory paragraph
of this Loan Agreement.

         "EXECUTION DATE" means the date hereof.

         "FOX RUN" has the meaning set forth in the introductory paragraph of
this Loan Agreement.

         "FOX RUN PROPERTY" means that certain shopping center located at Route
2/4 Solomons Island Road, Prince Frederick, Maryland,

         "GROTON SQUARE PROPERTY" means that certain shopping center located at
220 Route 12, Groton, Connecticut.

         "HIGH RIDGE PLAZA PROPERTY" means that certain shopping center located
at 1789 Central Park Avenue, Yonkers, New York.

         "IMPROVEMENTS" has the meaning set forth in the Mortgages.

         "INDEMNITY AGREEMENTS" means, collectively, (i) that certain Unsecured
Indemnity Agreement dated as of the Execution Date and executed by Best,
Development and Liable Parties in connection with the $10.5 Million Loan, (ii)
that certain Unsecured Indemnity Agreement dated as of the Execution Date and
executed by KRT and Liable Parties in connection with the $13.1 Million Loan,
(iii) that certain Unsecured Indemnity Agreement dated as of the Execution Date
and executed by KRT and Liable Parties in connection with $14.8 Million Loan
(Commerce Circle), (iv) that certain Unsecured Indemnity Agreement dated as of
the Execution Date and executed by KRT and Liable Parties in connection with the
$14.8 Million Loan (Groton Square), (v) that certain Unsecured Indemnity
Agreement dated as of the Execution Date and executed by Fox Run and Liable
Parties in connection with the $16.7 Million Loan, (vi) that certain Unsecured
Indemnity Agreement dated as of the Execution Date and executed by KRT and
Liable Parties in connection with the $17.5 Million Loan, (vii) that certain
Unsecured Indemnity Agreement dated as of the Execution Date and executed by
KRT, Kramont, Barn and Liable Parties in connection with the $18.2 Million Loan,
(viii) that certain Unsecured Indemnity Agreement dated as of the Execution Date
and executed by KRT and Liable Parties in connection with the $19.3 Million
Loan, (ix) that certain Unsecured Indemnity

                                      -10-

<PAGE>

Agreement dated as of the Execution Date and executed by KRT and Liable Parties
in connection with $2.1 Million Loan, (x) that certain Unsecured Indemnity
Agreement dated as of the Execution Date and executed by KRT, Lilac and Liable
Parties in connection with the $30.5 Million Loan, (xi) that certain Unsecured
Indemnity Agreement dated as of the Execution Date and executed by Street and
Liable Parties in connection with the $4.7 Million Loan, (xii) that certain
Unsecured Indemnity Agreement dated as of the Execution Date and executed by KRT
and Liable Parties in connection with the $4.9 Million Loan, (xiii) that certain
Unsecured Indemnity Agreement dated as of the Execution Date and executed by KRT
and Liable Parties in connection with the $5.6 Million Loan, (xiv) that certain
Unsecured Indemnity Agreement dated as of the Execution Date and executed by
Collegetown and Liable Parties in connection with the $8.5 Million Loan, and
(xv) that certain Unsecured Indemnity Agreement dated as of the Execution Date
and executed by KRT and Liable Parties in connection with the $8.8 Million Loan

         "INTEREST RATE" means (i) with respect to the $13.1 Million Loan, the
$14.8 Million Loan (Groton Square), the $16.7 Million Loan, the $17.5 Million
Loan, the 19.3 Million Loan, $2.1 Million Loan, the $4.7 Million Loan, the $4.9
Million Loan, the $5.6 Million Loan, the $8.5 Million Loan and the $8.8 Million
Loan, six and twenty-six hundredths percent (6.26%) per annum, and (ii) with
respect to the $10.5 Million Loan, $14.8 Million Loan (Commerce Circle), the
$18.2 Million Loan and the $30.5 Million Loan, five and nine-tenths percent
(5.9%) per annum.

         "KRT" has the meaning set forth in the introductory paragraph of this
Loan Agreement.

         "KRAMONT" has the meaning set forth in the introductory paragraph of
this Loan Agreement.

         "LATE CHARGE" means an amount equal to four cents ($.04) for each
dollar that is overdue.

         "LENDER" has the meaning set forth in the introductory paragraph of
this Loan Agreement.

         "LIABLE PARTIES" means Kramont and the Trust.

         "LIABLE PARTIES GUARANTIES" means, collectively, (i) that certain
Guaranty Agreement dated as of the Execution Date and executed by Liable Parties
in connection with the $10.5 Million Loan, (ii) that certain Guaranty Agreement
dated as of the Execution Date and executed by Liable Parties in connection with
the $13.1 Million Loan, (iii) that certain Guaranty Agreement dated as of the
Execution Date and executed by Liable Parties in connection with $14.8 Million
Loan (Commerce Circle), (iv) that certain Guaranty Agreement dated as of the
Execution Date and executed by Liable Parties in connection with the $14.8
Million Loan (Groton Square), (v) that certain Guaranty Agreement dated as of
the Execution Date and executed by Liable Parties in connection with the $16.7
Million Loan, (vi) that certain Guaranty Agreement dated as of the Execution
Date and executed by Liable Parties in connection with the $17.5 Million Loan,
(vii) that certain Guaranty Agreement dated as of the Execution Date and
executed by Liable Parties in connection with the $18.2 Million Loan, (viii)
that certain Guaranty

                                      -11-

<PAGE>

Agreement dated as of the Execution Date and executed by Liable Parties in
connection with the $19.3 Million Loan, (ix) that certain Guaranty Agreement
dated as of the Execution Date and executed by Liable Parties in connection with
$2.1 Million Loan, (x) that certain Guaranty Agreement dated as of the Execution
Date and executed by Liable Parties in connection with the $30.5 Million Loan,
(xi) that certain Guaranty Agreement dated as of the Execution Date and executed
by Liable Parties in connection with the $4.7 Million Loan, (xii) that certain
Guaranty Agreement dated as of the Execution Date and executed by Liable Parties
in connection with the $4.9 Million Loan, (xiii) that certain Agreement dated as
of the Execution Date and executed by Liable Parties in connection with the $5.6
Million Loan, (xiv) that certain Guaranty Agreement dated as of the Execution
Date and executed by Liable Parties in connection with the $8.5 Million Loan,
and (xv) that certain Guaranty Agreement dated as of the Execution Date and
executed by Liable Parties in connection with the $8.8 Million Loan

         "LILAC" has the meaning set forth in the introductory paragraph of this
Loan Agreement.

         "LOAN DOCUMENTS" means this Agreement, the Notes, the Mortgages, the
Payment Guaranties and all other documents evidencing and/or securing the Loans,
other than the Indemnity Agreements and the Liable Parties Guaranties.

         "LOAN(s)" means, individually any of, and collectively, all of the
$10.5 Million Loan, the $13.1 Million Loan, $14.8 Million Loan (Commerce
Circle), the $14.8 Million Loan (Groton Square), the $16.7 Million Loan, the
$17.5 Million Loan, the $18.2 Million Loan, the $19.3 Million Loan, $2.1 Million
Loan, the $30.5 Million Loan, the $4.7 Million Loan, the $4.9 Million Loan, the
$5.6 Million Loan, the $8.5 Million Loan and the $8.8 Million Loan.

         "MALL AT CROSS COUNTY PROPERTY" means that certain shopping center
located at 750 Central Park Avenue, Yonkers, New York.

         "MATURITY DATE" means June 30, 2013.

         "MONTHLY INTEREST ONLY INSTALLMENT" means, with respect to each Note,
the Monthly Interest Only Installment set forth therein.

         "MONTHLY P&I INSTALLMENT" means, with respect to each Note, the Monthly
P&I Installment set forth therein.

         "MORTGAGE(s)" means, individually any of, and collectively, all of the
$10.5 Million Loan Mortgage, the $13.1 Million Loan Mortgage, $14.8 Million
(Commerce Circle) Loan Mortgage, the $14.8 Million (Groton Square) Loan
Mortgage, the $16.7 Million Loan Mortgage, the $17.5 Million Loan Mortgage, the
$18.2 Million Loan Mortgage, the 19,3 Million Loan Mortgage, $2.1 Million Loan
Mortgage, the $30.5 Million Loan Mortgage, the $4.7 Million Loan Mortgage, the
$4.9 Million Loan Mortgage, the $5.6 Million Loan Mortgage, the $8.5 Million
Loan Mortgage and the $8.8 Million Loan Mortgage.

         "NEW YORK MORTGAGES" means collectively, all of the $2.1 Million Loan
Mortgage, the $30.5 Million Loan Mortgage, the $5.6 Million Loan Mortgage and
the $8.8 Million Loan Mortgage.

                                      -12-

<PAGE>

         "NORTH RIDGE PLAZA PROPERTY" means that certain shopping center located
at 77 Quaker Ridge Road, New Rochelle, New York.

         "NOTE(s)" means, individually any of, and collectively, all of the
$10.5 Million Note, the $13.1 Million Note, $14.8 Million Note (Commerce
Circle), the $14.8 Million Note (Groton Square), the $16.7 Million Note, the
$17.5 Million Note, the $18.2 Million Note, the 19.3 Million Note, $2.1 Million
Note, the $30.5 Million Note, the $4.7 Million Note, the $4.9 Million Note, the
$5.6 Million Note, the $8.5 Million Note and the $8.8 Million Note.

         "OFAC LIST" means the list of specially designated nationals and
blocked persons subject to financial sanctions that is maintained by the U.S.
Treasury Department, Office of Foreign Assets Control and any other similar list
maintained by the U.S. Treasury Department, Office of Foreign Assets Control
pursuant to any requirements of law, including, without limitation, trade
embargo, economic sanctions, or other prohibitions imposed by Executive Order of
the President of the United States. The OFAC List is accessible through the
internet website www.treas.gov/ofac/tl lsdn.pdf.

         "PARK HILLS PLAZA PROPERLY" means that certain shopping center located
at West Plank Road, Altoona, Pennsylvania.

         "PAYMENT GUARANTY(GUARANTIES)" means, individually any of, and
collectively, all of the $10.5 Million Payment Guaranty, the $13.1 Million
Payment Guaranty, $14.8 Million Payment Guaranty (Commerce Circle), the $14.8
Million Payment Guaranty (Groton Square), the $16.7 Million Payment Guaranty,
the $17.5 Million Payment Guaranty, the $18.2 Million Payment Guaranty, the 19.3
Million Payment Guaranty, $2.1 Million Payment Guaranty, the $30.5 Million
Payment Guaranty, the $4.7 Million Payment Guaranty, the $4.9 Million Payment
Guaranty, the $5.6 Million Payment Guaranty, the $8.5 Million Payment Guaranty
and the $8.8 Million Payment Guaranty.

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

         "PERSONAL PROPERTY" has the meaning, with respect to each Property, set
forth in the Mortgage encumbering such Property.

         "PROCEEDS THRESHOLD" means (i) with respect to the Bensalem Square
Property, the Collegetown Shopping Center Property, the High Ridge Plaza
Property, the North Ridge Plaza Property, the Street Road Plaza Property and the
Village Square Property, the sum of $200,000.00 and (ii) with respect to the
Bethlehem Square Property, the Fox Run Property, the Bristol Commerce Park
Property, the Groton Square Property, the Park Hills Plaza Property, the
Whitehall Square Property, the Mall at Cross County Property, the Barn Plaza
Property and the Valley Fair Property, the sum of $400,000,00.

         "PROPERTY" and "PROPERTIES" means individually, any of, and
collectively, all of the Bensalem Square Property, the Collegetown Shopping
Center Property, the High Ridge Plaza Property, the North Ridge Plaza Property,
the Street Road Plaza Property and the Village Square

                                      -13-

<PAGE>

Property, the Bethlehem Square Property, the Fox Run Property, the Bristol
Commerce Park Property, the Groton Square Property, the Park Hills Plaza
Property, the Whitehall Square Property, the Mall at Cross County Property, the
Barn Plaza Property and the Valley Fair Property.

         "REAL PROPERTY" has the meaning, with respect to each Property, set
forth in the Mortgage encumbering such Property.

         "STATE" means the State of New York.

         "STREET" has the meaning set forth in the introductory paragraph of
this Loan Agreement.

         "STREET ROAD PLAZA PROPERTY" means that certain shopping center located
at 2610-2630 Street Road, Bensalem, Pennsylvania.

         "TRUST" means Kramont Realty Trust.

         "USE" means use as a shopping center.

         "VALLEY FAIR PROPERTY" means that certain shopping center located at
260 West Swedesford Road, Devon, Pennsylvania.

         "VILLAGE SQUARE PROPERTY" means that certain shopping center located at
1262 Boston Post Road, Larchmont, New York.

         "WHITEHALL SQUARE PROPERTY" means that certain shopping center located
at 2180 MacArthur Road, Whitehall, Pennsylvania.

         1.02 General Construction. Defined terms used in this Loan Agreement
may be used interchangeably in singular or plural form, and pronouns are to be
construed to cover all genders. All references to this Loan Agreement or any
agreement or instrument referred to in this Loan Agreement shall mean such
agreement or instrument as originally executed and as hereafter amended,
supplemented, extended, consolidated or restated from time to time. The words
"herein," "hereof" and "hereunder" and other words of similar import refer to
this Loan Agreement as a whole and not to any particular subdivision; and the
words "Article" and "section" refer to the entire article or section, as
applicable and not to any particular subsection or other subdivision. Reference
to days for performance means calendar days unless business days are expressly
indicated. The parties hereto acknowledge that the defined term "Borrowers" has
been defined to collectively include each Borrower. It is the intent of the
parties hereto in determining whether (a) a breach of a representation, warranty
or a covenant has occurred, (b) there has occurred an Event of Default, or (c)
an event has occurred which would create recourse obligations under Article 10
of this Agreement, that any such breach, occurrence or event with respect to any
Borrower shall be deemed to be such a breach, occurrence or event with respect
to all Borrowers and that all Borrowers need not have been involved with such
breach, occurrence or event in order for the same to be deemed such a breach,
occurrence or event with respect to every Individual Borrower.

                                      -14-

<PAGE>

                                    ARTICLE 2
                    LOANS AND LOAN DOCUMENTS; PAYMENT TERMS

         2.01 Conditions to Loan. Borrowers agree that Lender's obligation to
close the Loans is conditioned upon Borrowers' delivery, performance and
satisfaction, in Lender's sole discretion, of all items set forth in (a) that
certain Mortgage Loan Application dated August 5, 2002 and (b) that certain
Mortgage Loan Application dated September 18, 2002 (collectively, the
"APPLICATION").

         2.02 Loan Documents. Payment of the Loans and performance by the
Borrowers of their obligations hereunder shall be secured, inter alia, by the
Mortgages for each Property and the Assignment of Leases for each Property. Each
Borrower agrees that it will, on or before the Closing Date, execute and deliver
or cause to be executed and delivered to Lender this Agreement, the Notes, the
Mortgages, the Assignments of Leases and the other Loan Documents to which such
Borrower is a party in form and substance acceptable to Lender. In addition,
each Borrower shall deliver such other documents, instruments or certificates as
Lender and its counsel may reasonably require and shall cause the Liable Parties
to executed and deliver the Indemnity Agreements and the Liable Party
Guaranties.

         2.03 Payments of Principal and Interest. Each Borrower shall make all
payments due under its respective Note or Notes.

         2.04 Calculation of Interest. Interest shall be calculated on the basis
of a thirty (30) day month and a three hundred sixty (360) day year, except that
(i) if the Advance Date occurs on a date other than the first day of a calendar
month, interest payable for the period commencing on the Advance Date and ending
on the last day of the month in which the Advance Date occurs shall be
calculated on the basis of the actual number of days elapsed over a 365 day or
366 day year, as applicable, and (ii) if the Maturity Date occurs on a date
other than the last day of the month, interest payable for the period commencing
on the first day of the month in which the Maturity Date occurs and ending on
the Maturity Date shall be calculated on the basis of the actual number of days
elapsed over a 365 day or 366 day year, as applicable.

         2.05 Application of Payments. All payments shall be applied as set
forth in the Notes.

         2.06 Late Charge. If any payment of a Monthly Interest Only Installment
or any payment of a Monthly P&I Installment under any Note or any payment of a
required escrow deposit hereunder is not paid within seven (7) days of the due
date, Lender shall have the option to charge the Borrower who failed to timely
make such payment the Late Charge. The Late Charge is for the purpose of
defraying the expenses incurred in connection with handling and processing
delinquent payments and is payable in addition to any other remedy Lender may
have. Unpaid Late Charges shall become part of the Aggregate Note Indebtedness
under such Borrower's Note and shall be added to any subsequent payments due
under the Loan Documents.

         2.07 Acceleration Upon Default. At the option of Lender, if Borrowers
fail to pay any sum specified in this Agreement or any of the Notes when due
after giving effect to any grace periods, or if an Event of Default occurs under
this Agreement, the Mortgages and/or any of the other Loan Documents, the
Aggregate Secured Indebtedness and all other sums evidenced and/or

                                      -15-

<PAGE>

secured by the Loan Documents, including, without limitation, any applicable
prepayment fees (collectively, the "ACCELERATED LOAN AMOUNT") shall become
immediately due and payable.

         2.08 Interest Upon Default. Upon the occurrence of an Event of Default
under this Agreement and/or any of the other Loan Documents, the Accelerated
Loan Amount shall bear interest at the Default Rate which shall never exceed the
maximum rate of interest permitted to be contracted for under the laws of the
State. The Default Rate shall continue until all defaults are cured.

         2.09 Limitation on Interest. The agreements made by Borrowers with
respect to this Agreement, the Notes and the other Loan Documents are expressly
limited so that in no event shall the amount of interest received, charged or
contracted for by Lender exceed the highest lawful amount of interest
permissible under the laws applicable to the Loan. If at any time performance of
any provision of this Agreement, the Notes or the other Loan Documents results
in the highest lawful rate of interest permissible under applicable laws being
exceeded, then the amount of interest received, charged or contracted for by
Lender shall automatically and without further action by any party be deemed to
have been reduced to the highest lawful amount of interest then permissible
under applicable laws. If Lender shall ever receive, charge or contract for, as
interest, an amount which is unlawful, at Lender's election, the amount of
unlawful interest shall be refunded to the applicable Borrower (if actually
paid) or applied to reduce such Borrower's then unpaid Aggregate Note
Indebtedness. To the fullest extent permitted by applicable laws, any amounts
contracted for, charged or received under the Loan Documents included for the
purpose of determining whether the Interest Rate would exceed the highest lawful
rate shall be calculated by allocating and spreading such interest to and over
the full stated term of the Loans.

         2.10 Prepayment.

              (a) Borrowers shall not have the right to prepay all or any
portion of the Loans at any time during the term hereof except as expressly set
forth herein.

              (b) During the ninety (90) day period prior to the Maturity Date,
Borrowers may prepay all of the Loans, in whole, without a Prepayment Fee (as
hereinafter defined) on thirty (30) days' prior written notice. In addition,
commencing on the first day of the 60th month following the Advance Date,
Borrowers may prepay all of the Loan, in whole, with a Prepayment Fee on sixty
(60) days' prior written notice.

              (c) If Borrowers provide notice of their intention to prepay, the
Accelerated Loan Amount shall become due and payable on the date specified in
the prepayment notice.

              (d) Notwithstanding the foregoing, prepayments arising from
Lender's application of Insurance Proceeds upon the occurrence of a casualty or
the application of a Condemnation Proceeds the occurrence of a condemnation
shall not be deemed a prohibited prepayment and may be made without payment of
the Prepayment Fee.

         2.11 Prepayment Fee.

                                      -16-

<PAGE>

              (a) Any tender of payment by Borrowers or any other person or
entity of the Aggregate Secured Indebtedness, other than as expressly provided
in the Loan Documents, shall constitute a prohibited prepayment. If a prepayment
of all or any part of the Aggregate Secured Indebtedness is made following (i)
an Event of Default and an acceleration of the Maturity Date, or (ii) in
connection with a purchase of any of the Properties or a repayment of the
Aggregate Secured Indebtedness at any time before, during or after, a judicial
or non-judicial foreclosure or sale of any of the Properties, then to compensate
Lender for the loss of the investment, Borrower shall pay an amount equal to the
Prepayment Fee (as hereinafter defined).

              (b) The "PREPAYMENT FEE" shall be the greater of (A) an amount
equal to (x) the present value of all remaining payments of principal and
interest under the Notes including the outstanding principal due on the Maturity
Date, discounted at the rate which, when compounded monthly, is equivalent to
the Treasury Rate compounded semi-annually, less (y) the amount of the principal
being prepaid, or (B) one percent (1%) of the amount of the principal being
prepaid.

              (c) The "TREASURY RATE" shall be the annualized yield on
securities issued by the United States Treasury having a maturity equal to the
remaining stated term of the Note, as quoted in the Federal Reserve Statistical
Release (H.15 (519)) under the heading "U.S. Government Securities - Treasury
Constant Maturities" for the date on which prepayment is being made. If this
rate is not available as of the date of prepayment, the Treasury Rate shall be
determined by interpolating between the yield on securities of the next longer
and next shorter maturity. If the Treasury Rate is no longer published, Lender
shall select a comparable rate. Lender will, upon request, provide an estimate
of the amount of the Prepayment Fee two weeks before the date of the scheduled
prepayment.

         2.12 Waiver of Right to Prepay Note Without Prepayment Fee. Borrowers
acknowledge that Lender has relied upon the anticipated investment return under
this Agreement and the Notes in entering into transactions with, and in making
commitments to, third parties and that the tender of any prohibited prepayment,
shall, to the extent permitted by law, include the Prepayment Fee. Borrowers
agree that the Prepayment Fee represents the reasonable estimate of Lender and
Borrowers of a fair average compensation for the loss that may be sustained by
Lender as a result of a prohibited prepayment of the Loans and it shall be paid
without prejudice to the right of Lender to collect any other amounts provided
to be paid under the Loan Documents.

         2.13 BORROWERS EXPRESSLY (A) WAIVE ANY RIGHTS THEY MAY HAVE UNDER
APPLICABLE STATE LAWS TO PREPAY THE LOANS, IN WHOLE OR IN PART, WITHOUT FEE OR
PENALTY, UPON ACCELERATION OF THE MATURITY DATE OF THE NOTES, AND (B) AGREE THAT
IF, FOR ANY REASON, A PREPAYMENT OF THE NOTES IS MADE, UPON OR FOLLOWING ANY
ACCELERATION OF THE MATURITY DATE OF THE NOTES BY LENDER ON ACCOUNT OF ANY
DEFAULT BY BORROWERS UNDER ANY LOAN DOCUMENT, INCLUDING BUT NOT LIMITED TO ANY
TRANSFER, FURTHER ENCUMBRANCE OR DISPOSITION WHICH IS PROHIBITED OR RESTRICTED
BY THIS AGREEMENT AND/OR THE MORTGAGES, THEN BORROWERS SHALL BE OBLIGATED TO PAY
CONCURRENTLY THE PREPAYMENT FEE SPECIFIED IN SECTION 2.11. BY EXECUTING THIS
AGREEMENT AND THE NOTES,

                                      -17-

<PAGE>

BORROWERS AGREE THAT LENDER'S AGREEMENT TO MAKE THE LOANS AT THE INTEREST RATES
AND FOR THE TERM SET FORTH HEREIN CONSTITUTES ADEQUATE CONSIDERATION FOR THIS
WAIVER AND AGREEMENT.

         2.14 Fees and_Expenses. If Borrowers default under this Agreement,
Borrowers shall be liable for and shall pay to Lender, in addition to the sums
stated above, the costs and expenses of enforcement and collection, including,
without limitation, a reasonable sum as an attorney's fee. This obligation is
not limited by Section 10.01

         2.15 Invalidated Payments. If any payment received by Lender is deemed
by a court of competent jurisdiction to be a voidable preference or fraudulent
conveyance under any bankruptcy, insolvency or other debtor relief law, and is
required to be returned by Lender, then the obligation to make such payment
shall be reinstated, notwithstanding that one ore more the Notes may have been
marked satisfied and returned to Borrowers or otherwise canceled, and such
payment shall be immediately due and payable upon demand.

                                   ARTICLE 3
                              BORROWERS' COVENANTS

           3.01 Due Authorization, Execution and Delivery.

              (a) Each Borrower represents and warrants that the execution of
the Loan Documents and the Indemnity Agreement to which it is a party have been
duly authorized and there is no provision in the organizational documents of
such Borrower requiring further consent for such action by any other entity or
person.

              (b) Each Borrower represents and warrants that it is duly formed,
validly existing limited liability company and is in good standing under the
laws of the state of its formation and in the state(s) in which its Properties
are located, that it has all necessary licenses, authorizations, registrations,
permits and/or approvals to own its Properties and to carry on its business as
presently conducted.

              (c) Each Borrower represents and warrants that the execution,
delivery and performance of the Loan Documents to which it is a party will not
result in such Borrower's being in default under any provision of its
organizational documents or of any deed of trust, mortgage, lease, credit or
other agreement to which it is a party or which affects it or its Properties.

              (d) Each Borrower represents and warrants that the Loan Documents
and the Indemnity Agreement to which it is a party have been duly authorized,
executed and delivered by such Borrower and constitute valid and binding
obligations of such Borrower which are enforceable in accordance with their
respective terms.

         3.02 Performance by Borrowers. Borrowers shall pay the Aggregate
Secured Indebtedness to Lender and shall keep and perform each and every other
obligation, covenant and agreement of the Loan Documents.

                                      -18-

<PAGE>

         3.03 Warranty of Title.

              (a) KRT warrants that it holds marketable and indefeasible fee
simple absolute title to its Real Property (other than the Real Property
comprising a leasehold estate in the portion of the Cross County Property owned
by Lilac, as to which KRT warrants that it holds a good and insurable leasehold
estate) and is the owner of its Personal Property. Lilac warrants that it holds
marketable and indefeasible fee simple absolute and leasehold title to its Real
Property and is the owner of its Personal Property. Collegetown warrants that it
holds marketable and indefeasible fee simple absolute title to its Real Property
and is the owner of its Personal Property. Fox Run warrants that it holds
marketable and indefeasible fee simple absolute title to its Real Property and
is the owner of its Personal Property. Street warrants that it holds marketable
and indefeasible fee simple absolute title to its Real Property and is the owner
of its Personal Property. Kramont warrants that it holds marketable and
indefeasible fee simple absolute title to its Real Property and is the owner of
its Personal Property. Best warrants that it holds marketable and indefeasible
fee simple absolute title to its Real Property and is the owner of its Personal
Property. Barn warrants that it holds a good and insurable leasehold estate in
its Real Property and is the owner of its Personal Property. Development
warrants that it holds a good and insurable leasehold estate in its Real
Property and is the owner of its Personal Property. Each Borrower warrants that
it has the right and is lawfully authorized to sell, convey or encumber its
Properties subject only to those property specific exceptions to title recorded
in the real estate records of the county in which each such the Property is
located and contained in Schedule B of the title insurance policy or policies
which have been approved by Lender and Impositions (as defined below) not yet
due and payable (the "PERMITTED EXCEPTIONS"). Each Property is free from all due
and unpaid taxes, payments in lieu of taxes, assessments and mechanics' and
materialmen's liens.

              (b) Each Borrower further covenants to warrant and forever defend
Lender from and against all persons claiming any interest in any of its
Properties (other than tenants of such Properties claiming rights to occupy
portions of such Properties, as tenants only).

         3.04 Taxes, Liens and Other Charges.

              (a) Unless otherwise paid to Lender as provided in Section 3.05,
each Borrower shall pay all real estate and other taxes or payments in lieu of
taxes, assessments, water and sewer charges, vault and other license or permit
fees, liens, fines, penalties, interest, and other similar public and private
claims which may be payable, assessed, levied, imposed upon or become a lien on
or against any portion of a Property and any other costs or charges imposed on
such Borrower pursuant to any other easement or agreement which benefits a
Property (all of the foregoing items are collectively referred to as the
"IMPOSITION(s)"). The Impositions shall be paid not later than twenty (20) days
before the dates on which the particular Imposition would become delinquent and
the applicable Borrower shall produce to Lender official receipts of the
appropriate imposing authority, or other evidence reasonably satisfactory to
Lender, evidencing the payment of the Imposition in full, provided, however,
that the failure of a Borrower to pay any such Imposition when due shall not
constitute an Event of Default as long as the same are being contested in
accordance with the requirements of this Section. If any Borrower elects by
appropriate legal action to contest any Imposition, such Borrower shall first
deposit cash with Lender as a reserve in an amount which Lender determines is
sufficient to pay such Imposition

                                      -19-

<PAGE>

plus all fines, interest, penalties and costs which may become due pending the
determination of the contest. If a Borrower deposits this sum with Lender, such
Borrower shall not be required to pay the Imposition provided that the contest
operates to prevent enforcement or collection of the Imposition, or the sale or
forfeiture of, the applicable Property, and is prosecuted with due diligence and
continuity. Upon termination of any proceeding or contest, the applicable
Borrower shall pay the amount of the Imposition as finally determined in the
proceeding or contest. Provided that there is not then an Event of Default (as
defined in Section 12.01 hereof), the monies which have been deposited with
Lender pursuant to this Section shall be applied toward such payment and the
excess, if any, shall be returned to the applicable Borrower.

              (b) In the event of the passage, after the Execution Date, of any
law which deducts from the value of a Property, for the purposes of taxation,
any lien or security interest encumbering such Property, or changing in any way
the existing laws regarding the taxation of mortgages, deeds of trust and/or
security agreements or debts secured by these instruments, or changing the
manner for the collection of any such taxes, and the law has the effect of
imposing payment of any Impositions upon Lender, at Lender's option, the
Obligations (as defined in the Mortgage encumbering such Property) shall
immediately become due and payable. Notwithstanding the preceding sentence,
Lender's election to accelerate the Obligations shall not be effective if (1)
the applicable Borrower is permitted by law (including, without limitation,
applicable interest rate laws) to, and actually does, pay the Imposition or the
increased portion of the Imposition and (2) such Borrower agrees in writing to
pay or reimburse Lender in accordance with Section 14.15 hereof for the payment
of any such Imposition which becomes payable at any time when the Obligations
are outstanding.

         3.05 Escrow Deposits.

              (a) Without limiting the effect of Section 3.04 and Section 4.01,
Borrowers shall pay to Lender monthly on the same date the monthly installment
is payable under the Notes, an amount (the "DEPOSIT") equal to 1/12th of the
amounts Lender reasonably estimates are necessary to pay, on an annualized
basis, (1) all Impositions and (2) the premiums for the insurance policies
required under this Agreement (collectively the "PREMIUMS") until such time as
Borrowers have deposited an amount equal to the annual charges for these items
and on demand, from time to time, shall pay to Lender any additional amounts
necessary to pay the Premiums and Impositions. Borrowers will furnish to Lender
bills for Impositions and Premiums thirty (30) days before Impositions become
delinquent and such Premiums become due for payment. No amounts paid as
Impositions or Premiums shall be deemed to be trust funds and these funds may be
commingled with the general funds of Lender without any requirement to pay
interest to Borrowers on account of these funds. If an Event of Default occurs,
Lender shall have the right, at its election, to apply any amounts held under
this Section 3.05 in reduction of the Aggregate Secured Indebtedness, or in
payment of the Premiums or Impositions for which the amounts were deposited.

              (b) Notwithstanding the foregoing, Lender shall not require
Borrowers to pay the Deposits for Impositions unless and until the occurrence of
the earliest of the following events: (i) an Event of Default under this
Agreement, the Loan Documents, the Indemnity Agreements or the Liable Parties
Guaranties, (ii) a Transfer (as defined in Section 11.01 (a)) of all or any of
the Properties, (iii) a Transfer of an interest in a Borrower or in the general
partners, shareholders or

                                      -20-

<PAGE>

members of a Borrower or in the constituent general partners or controlling
shareholders or controlling members of any of the entities comprising a
Borrower, other than a Permitted Ownership Structure Transfer (as defined in
Section 11.01(b)), or (iv) if required by a Rating Agency (as defined in Section
4.01(c)) or an Investor (as defined in Section 13.01(a)) in connection with a
sale, assignment or transfer of one or more participations in the Loans or the
Securities pursuant to Section 13.01. Upon the occurrence of any of the
foregoing, Lender reserves the right to require Deposits for Impositions at any
time in its absolute discretion notwithstanding the fact that any such Event of
Default may have been cured or that the Transfer may have been approved by
Lender.

              (c) Notwithstanding the foregoing, Lender shall not require
Borrowers to pay the Deposits for Premiums unless and until the occurrence of
the earliest of the following events: (i) an Event of Default under this
Agreement, the Loan Documents, the Indemnity Agreements or the Liable Parties
Guaranties, (ii) a Transfer of all or any of the Properties, (iii) a Transfer of
an interest in a Borrower or in the general partners, shareholders or members of
a Borrower or in the constituent general partners or controlling shareholders or
controlling members of any of the entities comprising a Borrower other than a
Permitted Ownership Structure Transfer, (iv) if required by a Rating Agency or
an Investor in connection with a sale, assignment or transfer of one or more
participations in the Loans or the Securities pursuant to Section 13.01, or (v)
Borrowers fail to furnish to Lender, not later than thirty (30) days prior to
the date on which any Premium would become delinquent, receipts for the payment
of such Premium or evidence of issuance of a new policy which continues in force
the coverage of the expiring policy. Upon the occurrence of any of the
foregoing, Lender reserves the right to require Deposits for Premiums at any
time in its absolute discretion notwithstanding the fact that any such Event of
Default may have been cured or that the Transfer may have been approved by
Lender.

         3.06 Care and Use of the Properties.

              (a) Each Borrower represents and warrants to Lender with respect
to its Properties as follows:

                  (i) As of the date hereof, all authorizations, approvals,
licenses, including without limitation liquor licenses, if any, and operating
permits required to allow the Improvements located on each Property to be
operated for the Use by the applicable Borrower and, to such Borrower's
knowledge, the tenants of the such Property have been obtained, paid for and are
in full force and effect.

                  (ii) As of the date hereof, the Improvements located on each
Property and their Use comply with (and no notices of violation have been
received in connection with) all Requirements (as defined in this Section). Each
Borrower shall at all times comply with all present or future Requirements
affecting or relating to each Property and/or the Use. Each Borrower shall
furnish Lender, on request, proof of compliance with the Requirements. Each
Borrower shall not use or permit the use of any Property, or any part thereof,
for any illegal purpose. "Requirements" shall mean all laws, ordinances, orders,
covenants, conditions and restrictions and other requirements relating to land
and building design and construction, use and maintenance, that may now or
hereafter pertain to or affect the applicable Property or any part of such
Property or the Use, including, without limitation, planning, zoning,
subdivision,

                                      -21-

<PAGE>

environmental, air quality, flood hazard, fire safety, handicapped facilities,
building, health, fire, traffic, safety, wetlands, coastal and other
governmental or regulatory rules, laws, ordinances, statutes, codes and
requirements applicable to such Property, including permits, licenses,
certificates of occupancy and/or other certificates that may be necessary from
time to time to comply with any of the these requirements.

                  (iii) As of the date hereof, each Borrower has complied with
all requirements of all instruments and agreements affecting its Properties,
whether or not of record, including without limitation all covenants and
agreements by and between Borrower and any governmental or regulatory agency
pertaining to the development, use or operation of its Properties. Each
Borrower, at its sole cost and expense, shall keep its Properties in good order,
condition, and repair, and make all necessary structural and non-structural,
ordinary and extraordinary repairs to the Properties and the Improvements.

                  (iv) Each Borrower shall abstain from, and not permit, the
commission of waste to its Properties and shall not remove or alter in any
substantial manner, the structure or character of any Improvements without the
prior written consent of Lender, except removal of fixtures, machinery or
equipment in connection with the replacement thereof in the ordinary course of
business with fixtures, machinery or equipment of equal greater value and
quality which perform a similar function.

                  (v) The zoning approval for each Property is not dependent
upon the ownership or use of any property which is not encumbered by the
relevant Mortgage.

              (b) Lender shall have the right, at any time and from time to time
during normal business hours, to enter any Property in order to ascertain any
Borrower's compliance with the Loan Documents, to examine the condition of such
Property, to perform an appraisal, to undertake surveying or engineering work,
and to inspect premises occupied by tenants, subject to the tenants' rights
under their respective Leases. Each Borrower shall cooperate with Lender
performing these inspections. Lender shall not be liable to any Borrower or any
person in possession of any Property with respect to any matter arising out of
such entry to such Property, except for Lender's willful misconduct or gross
negligence.

              (c) Each Borrower shall use, or cause to be used, each Property
continuously for the Use. No Borrower shall use, or permit the use of, any
Property for any other use without the prior written consent of Lender. To the
extent any Property is used as a residential apartment complex, (i) the Borrower
owning such Property shall not file or record a declaration of condominium,
master deed of trust or mortgage or any other similar document evidencing the
imposition of a so called "condominium regime" whether superior or subordinate
to the Mortgage encumbering such Property and (ii) such Borrower shall not
permit any part of such Property to be converted to, or operated as, a
"cooperative apartment house" whereby the tenants or occupants participate in
the ownership, management or control of any part of such Property.

              (d) Without the prior written consent of Lender, no Borrower shall
(i) initiate or acquiesce in a change in the zoning classification of and/or
restrictive covenants affecting any Property or seek any variance under existing
zoning ordinances, (ii) use or permit the use of any Property in a manner which
may result in the Use becoming a nonconforming use under

                                      -22-

<PAGE>

applicable zoning ordinances, or (iii) subject any Property to restrictive
covenants. For the purposes of this Section 3.06(d), the granting of exclusive
use rights to any tenant of a Property shall not be deemed a restrictive
covenant.

         3.07 Collateral Security Instruments. Borrowers covenant and agree that
if Lender at any time holds additional security for any obligations secured by
the Mortgages, it may enforce its rights and remedies with respect to the
security, at its option, either before, concurrently or after a sale of any of
the Properties is made pursuant to the terms of the Mortgages, Lender may apply
the proceeds of the additional security to the Secured Indebtedness without
affecting or waiving any right to any other security, including the security
under the Mortgages, and without waiving any breach or default of Borrowers
under this Agreement, the Mortgages or any other Loan Document.

         3.08 Suits and Other Acts to Protect the Properties.

              (a) Borrowers shall immediately notify Lender of the commencement,
or receipt of notice, of any and all material actions or proceedings or other
material matter or claim purporting to, or which could, affect any of the
Properties, any other security afforded by any of the Loan Documents and/or the
interest of Lender thereunder (collectively, "ACTIONS"). Borrowers shall appear
in and defend any Actions.

              (b) Lender shall have the right, at the cost and expense of
Borrowers, to institute, maintain and participate in Actions and take such other
action, as it may deem appropriate in the good faith exercise of its discretion
to preserve or protect any Property, any other security afforded by any of the
Loan Documents and/or the interest of Lender thereunder. Any money paid by
Lender under this Section shall be reimbursed to Lender in accordance with
Section 14.15 hereof.

         3.09 Liens And Encumbrances. Without the prior written consent of
Lender, to be exercised in Lender's sole and absolute discretion, other than the
Permitted Exceptions, Borrowers shall not create, place or allow to remain any
lien or encumbrance on any of the Properties, including deeds of trust,
mortgages, security interests, conditional sales, mechanics' liens, tax liens or
assessment liens regardless of whether or not they are subordinate to the lien
created by the Mortgages (collectively, "LIENS AND ENCUMBRANCES"). If any Liens
and Encumbrances are recorded against any of the Properties or any part thereof,
Borrowers shall obtain a discharge and release of any Liens and Encumbrances
within thirty (30) days after receipt of notice of their existence.
Notwithstanding the foregoing, it is agreed that any mechanics' or materialmen's
Hen or claim need not be paid if (i) the validity or amount thereof shall be
contested timely, diligently and in good faith by appropriate proceedings, (ii)
Borrowers shall have adequate unencumbered (except in favor of Lender) cash
reserves with respect thereto, and (iii) the Hen is discharged, dissolved or
bonded, and in the case of any such bonding, is bonded by a surety company
reasonably acceptable to Lender, which bond will stay, by proper court order,
the enforcement thereof.

         3.10 Compliance with Anti-Terroism, Embargo, Sanctions and Anti-Money
Laundering Laws]. Borrowers, the Trust, and to the best of Borrower's knowledge,
after having made diligent inquiry (a) each Person owning a direct or indirect
interest of twenty percent

                                      -23-

<PAGE>

(20%) or more in any Borrower or the Trust and (b) each tenant at the
Properties: (i) is not currently identified on OFAC List, and (ii) is not a
Person with whom a citizen of the United States is prohibited to engage in
transactions by any trade embargo, economic sanction, or other prohibition of
United States law, regulation, or Executive Order of the President of the United
States, Borrowers have implemented procedures, and will consistently apply those
procedures throughout the term of the Loans, to ensure the foregoing
representations and warranties remain true and correct during the term of the
Loans.

         3.11 Personal Property. Borrowers represent, warrant and covenant as
follows:

              (a) Each Borrower owns its Personal Property free from any lien,
security interest, encumbrance or adverse claim, except as otherwise expressly
approved by Lender in writing. Each Borrower will notify Lender of, and will
protect, defend and indemnify Lender against, all claims and demands of all
persons at any time claiming any rights or interest in its Personal Property,

              (b) The Personal Property has not been used and shall not be used
or bought for personal, family, or household purposes, but shall be bought and
used solely for the purpose of carrying on Borrowers' business.

              (c) Borrowers will not remove the Personal Property without the
prior written consent of Lender, except the items of Personal Property which are
consumed or worn out in ordinary usage shall be promptly replaced by Borrowers
with other Personal Property of value equal to or greater than the value of the
replaced Personal Property.

                                   ARTICLE 4
                                   INSURANCE

         4.01 Required Insurance and Terms of Insurance Policies.

              (a) During the term of this Agreement, Borrowers at their sole
cost and expense must provide Acord 27 and Acord 25 certificates of insurance
and, upon the written request of Lender copies of policies of insurance,
reasonably satisfactory to Lender as to amounts, types of coverage and the
companies underwriting these coverages. In no event will such policies be
terminated or otherwise allowed to lapse, Borrowers shall be responsible for
their own deductibles. Borrowers shall also pay for any insurance, or any
increase of policy limits, not described in this Agreement which Borrowers
require for their own protection or for compliance with government statutes.
Borrowers' insurance shall be primary and without contribution from any
insurance procured by Lender.

              Policies of insurance shall comply with the following
requirements:

              (1) All Risk Property insurance on the Improvements and the
              Personal Property located at each Property, including contingent
              liability from Operation of Building Laws, Demolition Costs and
              Increased Cost of Construction endorsements, in each case (i) in
              an amount equal to 100% of the "Full Replacement Cost" of such
              Improvements and Personal Property, which for

                                      -24-

<PAGE>

              purposes of this Article 4 shall mean actual replacement value
              (exclusive of costs of excavations, foundations, underground
              utilities and footings) with a waiver of depreciation and with a
              Replacement Cost Endorsement; (ii) containing an agreed amount
              endorsement with respect to such Improvements and Personal
              Property waiving all co-insurance provisions; (iii) providing for
              no deductible in excess of $25,000; and (iv) containing an
              "Ordinance or Law Coverage" or "Enforcement" endorsement if any of
              the Improvements or the use of the Property shall constitute
              non-conforming structures or uses. The Full Replacement Cost shall
              be determined from time to time, but not more than once per year
              with respect to each Property, by an appraiser or contractor
              designated and paid by Borrowers and approved in writing by Lender
              or by an engineer or appraiser in the regular employ of the
              insurer issuing such policy.

              (2) Commercial General Liability insurance against claims for
              personal injury, bodily injury, death or property damage occurring
              upon, in or about each Property, such insurance (i) to be on the
              so-called "occurrence" form with a combined single limit of not
              less than the amounts set forth in Exhibit A hereto, which may
              include excess liability coverage in umbrella form; (ii) to
              continue at not less than this limit until required to be changed
              by Lender in writing by reason of changed economic conditions
              making such protection inadequate; and (iii) to cover at least the
              following hazards: (a) premises and operations; (b) products and
              completed operations on an "if any" basis; (c) independent
              contractors; (d) contractual liability for all written and oral
              contracts; and (e) contractual liability covering the indemnities
              contained in this Agreement and the Mortgages to the extent
              available.

              (3) Business Income insurance with respect to each Property in an
              amount sufficient to prevent the applicable Borrower from becoming
              a co-insurer within the terms of the applicable policies, and
              sufficient to recover twelve (12) months of "Business Income" (as
              hereinafter defined). The amount shown in Exhibit A is the current
              estimate of one year's "Business Income" with respect to each
              Property, "Business Income" shall mean, with respect to each
              Property, the sum of (i) the total anticipated gross income from
              occupancy of such Property, (ii) the amount of all charges (such
              as, but not limited to, operating expenses, insurance premiums and
              taxes) which are the obligation of tenants or occupants to the
              Borrower owning such Property, (iii) the fair market rental value
              of any portion of such Property which is occupied by such
              Borrower, and (iv) any other amounts payable to such Borrower or
              to any affiliate of such Borrower pursuant to Leases of such
              Property.

              (4) If Lender determines at any time that any part of a Property
              is located in an area identified on a Flood Hazard Boundary Map or
              Flood Insurance Rate Map issued by the Federal Emergency
              Management Agency as having special flood hazards and flood
              insurance has been made available, the Borrower owning such
              Property will maintain a flood insurance policy meeting the
              requirements of the current guidelines of the Federal Insurance
              Administration with a generally acceptable insurance carrier, in
              an amount not less than the lesser of (i) the outstanding
              principal balance of the Obligations then secured by the Mortgage

                                      -25-

<PAGE>

              encumbering such Property or (ii) the maximum amount of insurance
              which is available under the National Flood Insurance Act of 1968,
              the Flood Disaster Protection Act of 1973 or the National Flood
              Insurance Reform Act of 1994, as amended.

              (5) During the period of any construction or renovation or
              alteration of the Improvements located at any Property, a
              so-called "Builder's All Risk" insurance policy in non-reporting
              form for any Improvements under construction, renovation or
              alteration including, without limitation, for demolition and
              increased cost of construction or renovation, in an amount
              approved by Lender including an Occupancy endorsement and Worker's
              Compensation Insurance covering all persons engaged in the
              construction, renovation or alteration in an amount at least equal
              to the minimum required by statutory limits of the state or
              commonwealth in which Property is located.

              (6) Workers' Compensation insurance with respect to each Property,
              subject to the statutory limits of the state in which such
              Property is located, and employer's liability insurance with a
              limit of at least $1,000,000 per accident and per disease per
              employee, and $1,000,000 for disease in the aggregate in respect
              of any work or operations on or about such Property, or in
              connection with such Property or its operations (if applicable).

              (7) Boiler & Machinery insurance covering the major components of
              the central heating, air conditioning and ventilating systems,
              boilers, other pressure vessels, high pressure piping and
              machinery, elevators and escalators, if any, and other similar
              equipment installed in the Improvements located at each Property,
              in an amount equal to one hundred percent (100%) of the full
              replacement cost of all equipment installed in, on or at such
              Improvements. These policies shall insure against physical damage
              to and loss of occupancy and use of such Improvements arising out
              of an accident or breakdown.

              (8) Insurance from and against all losses, damages, costs,
              expenses, claims and liabilities related to or arising from acts
              of terrorism, of such types, in such amounts, with such
              deductibles, issued by such companies, and on such forms of
              insurance policies, as reasonably required by Lender; provided,
              however, in the event that insurance for acts of terrorism or
              insurance substantially similar thereto is not available at
              commercially reasonable rates (as determined by Lender in its
              reasonable judgment) under the coverages described in this Section
              4.01(a) with respect to the Properties, with due regard given to
              the type of property, its tenancy, location and other relevant
              characteristics, then with respect to the Secured Indebtedness
              only, such insurance shall not be required for such coverages,
              provided that in furtherance and not in limitation of the
              foregoing, (i) the form of any exclusion of coverages for acts of
              terrorism or matters substantially similar thereto shall be
              reasonably acceptable to Lender and (ii) in the event that at any
              time during the term of the Secured Indebtedness (A) Borrowers or
              any of the Liable Parties obtains insurance coverage for acts of
              terrorism or insurance substantially similar thereto
              (collectively, in this Subsection 4.01(a)(8), "such

                                      -26-

<PAGE>

              terrorism coverage") for any Property or (B) Borrowers or any of
              the Liable Parties or any affiliate of Borrowers or any of the
              Liable Parties obtains such terrorism coverage with respect to one
              or more properties owned by any Borrower, a Liable Party or
              affiliate (other than any of the Properties), or (C) Lender
              advises Borrowers that Lender has determined that such terrorism
              coverage is available with respect to the Properties to Borrowers
              or to Lender at commercially reasonable rates (as determined by
              Lender in its reasonable judgment), or (D) if required by a Rating
              Agency or an Investor in connection with a sale, assignment or
              transfer of one or more participations in the Loans or the
              Securities pursuant to Section 13.01, then in any such event
              described in Subsections (A) through (D) of this Section
              4.01(a)(8)(ii) (and with respect to Subsection 4.01(a)(8)(ii)(B)
              only, if Lender, in its reasonable judgment, determines that any
              such other property owned by a Borrower, a Liable Party or
              affiliate is substantially similarly situated with the Properties
              with respect to the availability of such terrorism coverage with
              due regard given to the property type(s), their tenancies,
              locations and other relevant characteristics), Borrowers shall be
              required to maintain such terrorism coverage at Borrowers' sole
              cost and expense, in such form, for such amounts, with such
              deductibles and issued by such companies as shall be reasonably
              acceptable to Lender with respect to the Properties and the
              Secured Indebtedness for the benefit of Lender.

              (9) Insurance from and against all losses, damages, costs,
              expenses, claims and liabilities related to or arising from
              Hazardous Materials and/or violations of Requirements of
              Environmental Law, of such types, in such amounts, with such
              deductibles, issued by such companies, and on such forms of
              insurance policies, as approved by Lender as of the date hereof.
              These policies shall be for an initial term of one (1) year and
              thereafter shall be for successive terms of five (5) years.

              (10) Such other insurance as may from time to time be reasonably
              required by Lender against other insurable hazards, including, but
              not limited to, vandalism, earthquake, sinkhole and mine
              subsidence.

              (b) Lender's interest must be clearly stated by endorsement in the
insurance policies described in this Section 4.01 as follows:

              (1) The policies of insurance referenced in Subsections (a)(1),
              (a)(3), (a)(4), (a)(5) and (a)(7) of this Section 4.01 shall
              identify Lender under the New York Standard Lender Clause
              (non-contributory) endorsement.

              (2) The insurance policies referenced in Sections 4.01(a)(2) and
              Sections 4.01(a)(9) shall name Lender as an additional insured.

              (3) All of the policies referred to in Section 4.01 shall provide
              for at least thirty (30) days' written notice to Lender in the
              event of policy cancellation and/or material change.

                                      -27-

<PAGE>

              (c) All the insurance companies must be authorized to do business
in the states in which the Properties are located and be reasonably approved by
Lender. The insurance companies must have a general policy rating of A or better
and a financial class of VIII or better by A.M. Best Company, Inc. and a claims
paying ability of BBB or better according to Standard & Poors. If there are any
Securities (as defined in Section 13.01 (a) hereof) issued with respect to the
Loans which have been assigned a rating by a credit rating agency approved by
Lender (a "RATING AGENCY"), the insurance company shall have a claims paying
ability rating by such Rating Agency equal to or greater than the rating of the
highest class of the Securities. Borrowers shall deliver evidence satisfactory
to Lender of payment of premiums due under the insurance policies.

              (d) Certified copies of the policies, and any endorsements, shall
be made available for inspection by Lender upon request. If any policy is
canceled before the Secured Indebtedness is satisfied, and Borrowers fail to
immediately procure replacement insurance, Lender reserves the right but shall
not have the obligation immediately to procure replacement insurance at
Borrowers' cost.

              (e) Borrowers shall be required during the term of the Secured
Indebtedness to continue to provide Lender with original renewal policies or
replacements of the insurance policies referenced in Section 4.01 (a). Lender
may accept Certificates of Insurance evidencing insurance policies referenced in
subsections (a)(2), (a)(4), and (a)(6) of this Section 4.01 instead of requiring
the actual policies. Lender shall be provided with renewal Certificates of
Insurance not less than fifteen (15) days prior to each expiration. The failure
of Borrowers to maintain the insurance required under this Article 4 shall not
constitute a waiver of Borrowers' obligation to fulfill these requirements.

              (f) All binders, policies, endorsements, certificates, and
cancellation notices are to be sent to the Lender's address for insurance
notification as set forth in Section 14.02(b) until changed by notice from
Lender.

         4.02 Adjustment of Claims. Subject to Section 8.02, Borrowers hereby
authorize and empower Lender to settle, adjust or compromise any claims for
damage to, or loss or destruction of, all or a portion of any of the Properties,
regardless of whether there are Insurance Proceeds available or whether any such
Insurance Proceeds are sufficient in amount to fully compensate for such damage,
loss or destruction.

         4.03 Assignment To Lender. In the event of the foreclosure of any of
the Mortgages or other transfer of the title to any of the Properties in
extinguishment of the Secured Indebtedness, all right, title and interest of
Borrowers in and to any insurance policy, or premiums or payments in
satisfaction of claims or any other rights under these insurance policies and
any other insurance policies covering such Properties shall pass to the
transferee of such Properties.

                                      -28-

<PAGE>

                                    ARTICLE 5
                          BOOKS, RECORDS AND ACCOUNTS

         5.01 Books and Records. Borrowers shall keep adequate books and records
of account in accordance with generally accepted accounting principles ("GAAP"),
or in accordance with other methods acceptable to Lender in its sole discretion,
consistently applied and furnish to Lender:

              (a) annual certified rent rolls signed and dated by each Borrower,
detailing the names of all tenants of the Improvements located at the Property
owned by such Borrower, the portion of such Improvements occupied by each
tenant, the base rent and any other charges payable under each Lease (as defined
in Section 6.02 hereof) and the term of each Lease, including the expiration
date, and any other information as is reasonably required by Lender, within
forty-five (45) days after the end of each fiscal year of such Borrower;

              (b) an annual operating statement of each Property and year to
date operating statements detailing the total revenues received, total expenses
incurred, total cost of all capital improvements, total debt service and total
cash flow, to be prepared and certified by the applicable Borrower in the form
previously approved in writing by Lender, and if available, any operating
statement prepared by an independent certified public accountant, within sixty
(60) days after the close of each fiscal year of such Borrower;

              (c) an annual ARGUS(C) valuation file in electronic form which
includes, without limitation, a then current rent roll and all income and
expenses of each Property, within sixty (60) days after the close of each fiscal
year of the applicable Borrower;

              (d) balance sheet and profit and loss statement of each Borrower
in the form reasonably required by Lender, prepared and certified by the chief
financial officer of the Trust, and if required by Lender, audited financial
statements for the Trust prepared by an independent certified public accountant
reasonably acceptable to Lender within 120 days after the close of each fiscal
year of Borrowers and the Trust, as the case may be;

              (e) an annual operating budget consistent with the annual
operating statement described above for each Property including cash flow
projections for the upcoming year and all proposed capital replacements and
improvements at least ten (10) days prior to the start of each calendar year;
and

              (f) for so long as the insurance required by Section 4.01(a)(8) is
not maintained with respect to the Secured Indebtedness, Borrowers shall provide
to Lender twice in each twelve-month period after the closing of the funding of
the Secured Indebtedness (at approximate six-month intervals), Borrowers'
written statement, certified by Borrowers to Lender, in form, scope and
substance reasonably acceptable to Lender, indicating whether and to what extent
each of the conditions referred to in Subsections (A) and (B) of Section
4.01(a)(8)(ii) then applies, and which written statement shall include summaries
of current insurance company quotes and related information concerning such
insurance coverage for the Properties (which quotes Borrowers agree to seek and
obtain in a diligent manner) and Borrowers agree to provide

                                      -29-

<PAGE>

such other information to Lender as Lender may reasonably request relating to
such conditions and any such written statement of Borrowers.

         5.02 Property Reports. Upon request from Lender or its representatives
and designees, but not more often than once in any six (6) month period or at
any time after the occurrence of an Event of Default, Borrowers shall furnish in
a timely manner to Lender:

              (a) a property management report for each Property, showing
deposits received from tenants and any other information reasonably requested by
Lender, in reasonable detail and certified by Borrowers (or an officer, general
partner, member or principal of Borrowers if Borrowers are not individuals)
under penalty of perjury to be true and complete; and

              (b) an accounting of all security deposits held in connection with
any Lease of any part of the Properties, including the name and identification
number of the accounts in which such security deposits are held, the name and
address of the financial institutions in which such security deposits are held
and the name of the person to contact at such financial institution, along with
any authority or release necessary for Lender to obtain information regarding
such accounts directly from such financial institutions.

         5.03 Additional Matters.

              (a) Borrowers shall furnish Lender with such other additional
financial or management information (including, without limitation, State and
Federal tax returns and additional rent rolls) as may, from time to time, be
reasonably required by Lender or the Rating Agencies in form and substance
reasonably satisfactory to Lender or the Rating Agencies.

              (b) Borrowers shall furnish Lender and its agents convenient
facilities for the examination and audit of any such books and records upon at
least fifteen (15) days' prior written notice.

                                    ARTICLE 6
               LEASES AND OTHER AGREEMENTS AFFECTING THE PROPERTY

                 6.01 BORROWERS' REPRESENTATIONS AND WARRANTIES.

         Each Borrower represents to Lender with respect to each of its
         Properties as follows:

              (a) There are no commercial or retail leases, subleases or
occupancy agreements affecting its Property except as set forth in the rent roll
dated May 12, 2003 previously delivered to Lender (the "RENT ROLL") and there
are no residential leases, subleases or occupancy agreements affecting such
Property. Each Borrower has delivered to Lender true, correct and complete
copies of all Existing Leases and Existing Guaranties. For the purposes of this
Agreement, "EXISTING LEASES" means all leases, subleases and/or other occupancy
agreements affecting each Property as of the date hereof, including amendments
thereto;

                                      -30-

<PAGE>

"EXISTING GUARANTIES" means all guaranties and amendments of guaranties given in
connection with the Existing Leases.

              (b) There are no defaults by such Borrower under the Existing
Leases and, to the best knowledge of such Borrower, except as set forth in the
Rent Roll, there are no defaults by any tenants under the Existing Leases or any
guarantors under the Existing Guaranties.

              (c) The Existing Leases and the Existing Guaranties are in full
force and effect.

              (d) To the best knowledge of such Borrower, except as set forth in
the Rent Roll, none of the tenants now occupying 10% or more of any Property or
having a current lease affecting 10% or more of any Property is the subject of
any bankruptcy, reorganization or insolvency proceeding or any other
debtor-creditor proceeding.

              (e) Except only for rent and additional rent for the current
month, such Borrower has not accepted under any of the Leases any payment of
advance rent or additional rent in an amount that is more than one month's rent
and additional rent or security deposits in an amount that is more than that
stated in the applicable Lease.

              (f) Such Borrower has deposited all security deposits delivered in
connection with the Existing Leases in accordance with applicable law.

              (g) Except as set forth in the Rent Roll, no tenant under any
Existing Lease has asserted any defense, set-off or counterclaim with respect to
its tenancy or its obligations under its lease, and, to such Borrower's
knowledge, no such defense, set-off or counterclaim exists.

              (h) There are no unfulfilled landlord obligations currently due to
tenants for tenant improvements, moving expenses or rental concessions or other
matters, and all credits required to be paid or contributed by such Borrower
under the Existing Leases have been paid or contributed in full.

              (i) None of the Existing Leases or Rents and Profits have been
assigned, pledged, hypothecated or otherwise encumbered or transferred by such
Borrower except to the extent provided in the Loan Documents.

              (j) Except as previously disclosed in writing to Lender, the
Existing Leases are on standard forms of leases delivered to and approved by
Lender.

         6.02 Assignment of Leases. In order to further secure payment of the
Aggregate Secured Indebtedness and the performance of Borrowers' obligations
under the Loan Documents, each Borrower has absolutely, presently and
unconditionally granted, assigned and transferred to Lender all of such
Borrower's right, title, interest and estate in, to and under (i) all of the
Existing Leases and Guaranties affecting its Properties and (ii) all of the
Future Leases (as defined in Section 6.06) and guaranties thereof, and (iii) the
Rents and Profits (as defined in the Mortgages encumbering such Borrower's
Properties). Unless and until an Event of Default

                                      -31-

<PAGE>

occurs, Borrowers shall have a revocable license to collect their Rents and
Profits (except as otherwise provided herein) as and when they become due and
payable. Lender shall be liable to account only for the Rents and Profits
actually received by Lender pursuant to any provision of any Loan Document. The
Existing Leases and Guaranties and all Future Leases and amendments and
guaranties thereof are collectively referred to as the "LEASES".

         6.03 Performance of Obligations.

              (a) Borrowers shall perform all obligations under any and all
Leases. If any of the acts described in this Section which require the prior
written consent of Lender are done without the written consent of Lender, at the
option of Lender, they shall be of no force or effect and shall constitute a
default under this Mortgage.

              (b) Borrowers agree to furnish Lender executed copies of all
Future Leases. Except as set forth in Section 6.06 below, Borrowers shall not,
without the express written consent of Lender, (i) enter into or extend any
Lease unless the Lease complies with the provisions of Section 6.06, or (ii)
cancel or terminate any Leases (except in the case of a default) unless the
applicable Borrower has entered into new Leases covering all of the premises of
the Leases being terminated or surrendered, or (iii) modify or amend any Leases
in any material way or reduce the rent or additional rent, or (iv) consent to an
assignment of the tenant's interest or to a subletting of any Lease unless the
tenant remains liable under the Lease following the assignment or subletting, or
(v) accept payment of advance rents in an amount in excess of one month's rent,
or (vi) enter into any options to sell any of the Properties, or (vii) accept
any tenant security deposit in an amount greater than required by the applicable
Lease.

         6.04 Subordinated Leases. Each of the Future Leases affecting any of
the Properties shall be absolutely subordinate to the lien of the Mortgage
encumbering such Property and shall also contain provisions, reasonably
satisfactory to Lender, to the effect that in the event of the judicial or
non-judicial foreclosure of such Property, at the election of the acquiring
foreclosure purchaser, the particular Lease shall not be terminated and the
tenant shall attorn to the purchaser. Each Future Lease shall provide that, if
requested to do so, the tenant shall agree to enter into a new Lease for the
balance of the term upon the same terms and conditions as its existing Lease.
If Lender requests, Borrowers shall cause the tenant under each or any of such
Leases to enter into subordination, non-disturbance and attornment agreements
with Lender which are reasonably satisfactory in form, scope and substance to
Lender. Upon a Borrower's request, Lender shall enter into a subordination,
non-disturbance and attornment agreement reasonably satisfactory in form, scope
and substance to Lender with any tenant occupying 5,000 square feet or more at
any Property under any Future Lease.

         6.05 Leasing Commissions. Borrowers covenant and agree to use
reasonable efforts to provide that all contracts and agreements relating to the
Properties entered into by Borrowers after the date of this Agreement requiring
the payment of leasing commissions, management fees or other similar
compensation shall (i) provide that the obligation will not be enforceable
against Lender and (ii) be subordinate to the lien of the Mortgages and shall
not be payable after an Event of Default under this Agreement. Lender will be
provided evidence of Borrowers' compliance with this Section upon request.

                                      -32-

<PAGE>

         6.06 Future Leases. Each Lease executed after the date hereof or any
amendment, extension or renewal of any Lease entered into by Borrowers after the
date hereof (any such new Lease or amendment, extension or renewal being
referred to as a "FUTURE LEASE") shall satisfy the following terms and
conditions:

              (a) Each new Minor Lease shall be on the standard form of lease
which has been previously approved in writing by Lender and which may hereafter
be modified from time to time with Lender's prior written consent, which consent
shall not be unreasonably withheld, conditioned or delayed. Borrowers may make
changes to such standard form for a particular tenant, provided such changes (i)
do not materially increase any of the landlord's obligations thereunder or
materially decrease any of the landlord's rights thereunder, (ii) do not
materially decrease any of the tenant's obligations thereunder, and (iii) do not
modify the provisions of the Lease affecting Lender, including, without
limitation, subordination, attornment and the rights of a mortgagee to cure
defaults of the landlord. Provided such Minor Lease complies with the provisions
of this Section 6.06(a) and with the leasing guidelines attached hereto as
Exhibit B ("LEASING GUIDELINES"), Borrowers shall not be required to obtain
Lender's consent before entering into such Minor Lease. "MINOR LEASE" shall mean
a Future Lease which demises 25,000 square feet or less of space within the
Improvements.

              (b) Each Minor Lease which does not comply with the provisions of
Section 6.06(a) or with the Leasing Guidelines may only be entered into with the
prior written consent of Lender.

              (c) Each Major Lease may only be entered into with the prior
written consent of Lender. "MAJOR LEASE" shall mean a Future Lease which demises
more than 25,000 square feet of space within the Improvements.

              (d) Notwithstanding anything in this Section 6.06 to the contrary,
all Future Leases shall be subject to review and approval by Lender if at the
time thereof there exists an Event of Default which is continuing.

              (e) All requests for consent required hereunder shall be in
writing and shall be deemed to have been duly given if personally delivered or
sent by United States Express Mail or courier service to Lender at the following
address (or at such other address as shall be given in writing by Lender to
Borrowers):

                                  Metropolitan Life Insurance Company
                                  10 Park Avenue
                                  Morristown, New Jersey 07960
                                  Attention: Assistant Vice-President
                                             Mortgage Portfolio
                                             Servicing and Asset
                                             Recovery

         Said request for consent must be accompanied by the proposed lease, a
summary or abstract of the lease for which consent is requested (which summary
or abstract shall contain the principal financial terms of the lease, the term
and the principal provisions of such lease) and supporting financial
information.

                                      -33-

<PAGE>

                                    ARTICLE 7
                              ENVIRONMENTAL HAZARDS

         7.01 Representations and Warranties. Borrowers hereby represent,
warrant, covenant and agree to and with Lender that:

              (a) Neither Borrowers nor, to the best of Borrowers' knowledge,
after due inquiry, any tenant, subtenant or occupant of the Properties, has at
any time placed, suffered or permitted, nor at any time will Borrowers place,
suffer or permit the presence of any Hazardous Materials (as defined in Section
7.05 hereof) at, on, under, within or about the Properties except Permitted
Materials or as expressly approved by Lender in writing or as set forth in the
environmental reports previously delivered to Lender.

              (b) Neither Borrowers nor any portion of the Properties is subject
to any existing, pending or threatened investigation by any governmental
authority under any Requirements of Environmental Laws (as defined in Section
7.06 hereof),

              (c) Borrowers have not and are not required by any Requirements of
Environmental Laws to obtain any permits or licenses to use any portion of the
Improvements, fixtures, or equipment on the Properties,

              (d) All operations or activities upon the Properties, and any use
or occupancy of the Properties by Borrowers are presently and shall in the
future be in compliance with all Requirements of Environmental Laws,

              (c) Borrowers will use best efforts to assure (i) that any tenant,
subtenant or occupant of the Properties shall in the future be in compliance
with all Requirements of Environmental Laws and (ii) that no tenant, subtenant
or occupant places, suffers or permits any toxic waste or other Hazardous
Materials (other than Permitted Materials), or any contaminants, oil or
pesticides at, on, under, within or about the Properties,

              (f) Borrowers will comply with all of the requirements and
recommendations set forth in any environmental site assessment performed with
respect to the Properties prior to the date hereof as a condition of the funding
of the Obligations and will obtain and forward to Lender revised environmental
site assessments, if requested in writing by Lender.

              (g) Borrowers have not in the past, and do not intend in the
future, to use the Properties for the purpose of refining, producing, storing,
transferring, processing or transporting Hazardous Materials,

              (h) The Properties are not now being used nor, to Borrowers'
knowledge, have the Properties ever been used as a "Facility", as such term is
defined under CERCLA (as defined in Section 7.05), and none of the Properties
will be used as a "Facility" after completion of any construction, renovation,
restoration and other developmental work which Borrowers may undertake thereon
after the date hereof.

              (i) Borrowers have received no summons, citation, directive letter
or other communication, written or oral, from the New York Department of
Environmental Conservation

                                      -34-

<PAGE>

("NYDEC"), New Jersey Department of Environmental Protection ("NJDEP"), Maryland
Department of the Environment ("MDDE"), Pennsylvania Department of Environmental
Protection ("PADEP"), Connecticut Department of Environmental Protection
("CTDEP") or United States Environmental Protection Agency ("EPA") regarding any
alleged violation of law relating to action required upon the Properties. To
Borrowers' knowledge, no previous or present owner, tenant or subtenant of the
Properties has received a summons, citation, directive letter or other
communication, written or oral, from any local, state or federal environmental
authority regarding any alleged violation or environmental laws or action
required on the Properties to rectify any environmental condition.

              (j) To Borrowers' knowledge, the Properties have not ever been
used by previous owners and/or operators to generate, manufacture, refine,
transport, treat, or dispose of Hazardous Materials, and Borrowers do not intend
to use the Properties for such purposes.

              (k) Borrowers will use their best efforts to assure that any
tenant, subtenant or occupant of the Properties shall in the future be in
compliance with all Requirements of Environmental Laws. Borrowers shall not
cause or permit, allow or suffer any tenant to cause the "release" (as defined
in 42 U.S.C. '9601 et seq.) or "discharge" from any Property of any Hazardous
Materials in violation of any Requirements of Environmental Laws. Should
Borrowers cause or permit any "discharge" or "release" of Hazardous Materials
from any Property in violation of any Requirements of Environmental Laws,
Borrowers shall promptly remove or arrange for the removal of said Hazardous
Materials.

              (l) In the event that there shall be filed a lien against any
Borrower or any Property by the NYDEC, the NJDEP, the MDDE, the PADEP, the
CTDEP, the EPA or any other governmental agency or authority relating to the
remediation, removal, clean-up or other disposition of any Hazardous Material or
to Requirements of Environmental Laws, then Borrowers shall, within thirty (30)
days from the date that any Borrower is given actual notice that the lien has
been placed against a Property, either (i) pay the claim and remove the lien
from the Property, or (ii) furnish (A) a bond reasonably satisfactory to the
title insurance companies and Lender in the amount of the claim out of which the
lien arises, or (B) a cash deposit in the amount of the claim out of which the
lien arises, and shall promptly remove or arrange for the removal of the lien.

              (m) Unless required by applicable Requirements of Environmental
Laws, in no event shall any Remedial Work (as hereinafter defined) taken at any
Property result in any institutional or engineering controls, including, without
limitation, capping, or a deed notice or restriction recorded on the record or
other use restrictions, including, but not limited to, a classification
exception area. Any soil at a Property required under Requirements of
Environmental Laws to be remediated shall be remediated to the most stringent
currently applicable standards or lesser standards approved in writing by any
environmental agency having jurisdiction over such Property.

         7.02 Remedial Work. In the event any investigation or monitoring of
site conditions or any clean up, containment, restoration, removal or other
remedial work (collectively, the "Remedial Work") is reasonably necessary under
any Requirements of Environmental Laws, or is required by any judicial order, or
by any governmental entity, or in order to comply with the

                                      -35-

<PAGE>

provisions hereof, Borrowers shall within sixty (60) days after written demand
by Lender (or such shorter period of time as may be required under Requirements
of Environmental Laws or such order) prepare a plan for performing (subject to
Lender's approval) and commence the Remedial Work in compliance With such
applicable law, regulation, order or agreement. All Remedial Work shall be
promptly performed by one or more contractors, selected by Borrowers and
reasonably approved in advance in writing by Lender, and under the supervision
of a consulting engineer, selected by Borrowers and reasonably approved in
advance in writing by Lender. All costs and expenses of such Remedial Work shall
be paid by Borrowers including, without limitation, the charges of the
contractor(s) and/or the consulting engineer, and Lender's reasonable
attorneys', architects' and/or consultants' fees and costs incurred in
connection with monitoring or review of such Remedial Work. In the event
Borrowers shall fail to timely commence, or cause to be commenced, or fail to
diligently prosecute to completion, such Remedial Work, Lender may, but shall
not be required to, cause such Remedial Work to be performed, and all costs and
expenses thereof, or incurred in connection therewith, shall be reimbursed to
Lender in accordance with Section 14.15 hereof.

         7.03 Environmental Site Assessment. Lender shall have the right, at any
time and from time to time, to undertake, at the expense of Borrowers, an
environmental site assessment on any or all of the Properties, including any
testing that Lender may determine, in its sole discretion, is necessary to
ascertain the environmental condition of such Properties and the compliance of
such Properties with Requirements of Environmental Laws. Borrowers shall
cooperate fully with Lender and its consultants performing such assessments and
tests.

         7.04 Unsecured Obligations. No amounts which may become owing by
Borrowers to Lender under this Article 7 or under any other provision of this
Agreement as a result of a breach of or violation of this Article 7 shall be
secured by the Mortgages. The obligations shall continue in full force and
effect and any breach of this Article 7 shall constitute an Event of Default.
The lien of the Mortgages shall not secure any obligations evidenced by or
arising under the Indemnity Agreements ("UNSECURED OBLIGATIONS"). The Unsecured
Obligations shall continue in full force, and any breach or default of any such
obligations shall constitute a breach or default under this Agreement and the
other Loan Documents, including the Mortgages, but the proceeds of any
foreclosure sale shall not be applied against Unsecured Obligations. Nothing in
this Section shall in any way limit or otherwise affect the right of Lender to
obtain a judgment in accordance with applicable law for any deficiency in
recovery of all obligations that are secured by the Mortgage following
foreclosure, notwithstanding that the deficiency judgment may result from
diminution in the value of any of the Properties by reason of any event or
occurrence pertaining to Hazardous Materials or any Requirements of
Environmental Laws.

         7.05 Hazardous Materials. "HAZARDOUS MATERIALS" shall include without
limitation:

              (a) Those substances included within the definitions of "hazardous
substances," "hazardous materials," "toxic substances," or "solid waste" in the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended, 42 U.S.C. Sections 9601 et seq., ("CERCLA"), the Resource
Conservation and Recovery Act of 1976, 42 U.S.C. Sections 6921 et seq., the
Solid Waste Disposal Act, 42 U.S.C. Sections 6901 et seq., and the Hazardous
Materials Transportation Act, 49 U.S.C. Sections 1801 et seq., and in the

                                      -36-

<PAGE>

regulations promulgated pursuant to said laws, as each may hereafter be amended
from time to time;

              (b) Those substances described as "hazardous substances",
"hazardous wastes," "hazardous materials" or "toxic substances" in the state or
local Requirements of Environmental Laws;

              (c) Those chemicals known or suspected to cause cancer or
reproductive toxicity, as published pursuant to the state or local Requirements
of Environmental Laws;

              (d) Those substances listed in the United States Department of
Transportation Table (49 CFR 172.101 and amendments thereto) or by the EPA (or
any successor agency) as hazardous substances (40 CFR Part 302 and amendments
thereto);

              (e) Any material, waste or substance which is (i) petroleum, (ii)
asbestos, (iii) polychlorinated biphenyls, (iv) designated as a "hazardous
substance" pursuant to Section 311 of the Clean Water Act, 33 U.S.C. Section
1251 et seq. (33 U.S.C. Section 1321) or listed pursuant to Section 307 of the
Clean Water Act (33 U.S.C. Section 1317); (v) a chemical substance or mixture
regulated under the Toxic Substances Control Act of 1976, 15 U.S.C. Sections
2601 et seq.; (vi) flammable explosives; or (vii) radioactive materials; and

              (f) Such other substances, materials and wastes which are or
become regulated as hazardous or toxic under applicable local, state or federal
law, or the United States government, or which are classified as hazardous or
toxic under federal, state, or local laws or regulations.

         7.06 Requirements of Environmental Laws. "REQUIREMENTS OF ENVIRONMENTAL
LAWS" means, with respect to any Property, all applicable requirements, whether
now existing or hereafter enacted, of environmental, ecological, health, or
industrial hygiene laws or regulations or rules of common law related to such
Property, including, without limitation, all requirements imposed by any
environmental permit, law, rule, order, or regulation of any federal, state, or
local executive, legislative, judicial, regulatory, or administrative agency,
which relate to (a) exposure to Hazardous Materials; (b) pollution or protection
of the air, surface water, ground water, land; (c) solid, gaseous, or liquid
waste generation, treatment, storage, disposal, or transportation; or (d)
regulation of the manufacture, processing, distribution and commerce, use, or
storage of Hazardous Materials.

         7.07 Permitted Materials. "PERMITTED MATERIALS" means cleaning and
maintenance materials and office supplies of the types and quantities
customarily used and stored at properties similar to the Properties, provided
that same are used, stored and maintained in accordance with all Requirements of
Environmental Laws, and materials and supplies used in the operating of any
existing dry cleaning plant at any Property, provided that same are used, stored
and maintained in accordance with all Requirements of Environmental Laws.

                                      -37-

<PAGE>

                                    ARTICLE 8
                     CASUALTY, CONDEMNATION AND RESTORATION

         8.01 Borrowers' Representations.

         Borrowers represent and warrant as follows:

         (a) No casualty or damage to any part of any of the Properties has
occurred which has not been fully restored or replaced.

         (b) No part of any of the Properties has been taken in condemnation or
other similar proceeding or transferred in lieu of condemnation, nor have
Borrowers received notice of any proposed condemnation or other similar
proceeding affecting any of the Properties.

         8.02 Restoration.

              (a) Borrowers shall give prompt written notice of any casualty to
a Property to Lender whether or not required to be insured against. The notice
shall describe the nature and cause of the casualty and the extent of the damage
to such Property.

              (b) In the event of any damage to or destruction of a Property,
and regardless of whether Net Insurance Proceeds (defined below) are available
therefor, the Borrower that owns such Property shall commence and diligently
pursue to completion the Restoration of such Property. Borrowers assign to
Lender all Insurance Proceeds which Borrowers are entitled to receive in
connection with a casualty whether or not such insurance is required under this
Agreement. In the event of any damage to or destruction of any Property, and
provided that (1) an Event of Default does not currently exist, and (2) Lender
has determined that (i) its security has not been impaired, (ii) the repair,
restoration and rebuilding of any portion of such Property that has been
partially damaged or destroyed can be accomplished in full compliance with all
Requirements to the same condition, character and general utility as nearly as
possible to that existing prior to the damage or destruction and at least equal
in value as that existing prior to such damage or destruction (the
"RESTORATION"), and (iii) the Restoration can be completed not less than six (6)
months prior to the Maturity Date, then Lender shall hold and disburse such
Insurance Proceeds, less (x) the cost, if any, to Lender of recovering the
Insurance Proceeds including, without limitation, attorneys' fees and expenses,
adjusters' fees and fees incurred in Lender's performance of its obligations
hereunder, and (y) any Business Income Insurance Proceeds received by Lender
(the "NET INSURANCE PROCEEDS"), in the manner hereinafter provided to the
Restoration. Notwithstanding anything to the contrary contained herein, if the
Net Insurance Proceeds with respect to any one Property shall be equal to or
less than the Proceeds Threshold and the costs of completing the Restoration of
such Property shall be equal to or less than the Proceeds Threshold, the Net
Insurance Proceeds will be disbursed by Lender to Borrower that owns such
Property upon receipt provided that no Event of Default currently exists and
such Borrower delivers to Lender a written undertaking to commence expeditiously
and to complete satisfactorily with due diligence the Restoration in accordance
with the terms of this Agreement. In the event that the above conditions for
Restoration have not been met, Lender may, at its option, apply the Net
Insurance Proceeds to the reduction of the Aggregate Secured Indebtedness

                                      -38-

<PAGE>

in such order as Lender may determine and Lender may declare the entire
Obligations (as defined in the Mortgage encumbering such Property) immediately
due and payable.

              (c) If the Net Insurance Proceeds are to be used for the
Restoration in accordance with this Article, the relevant Borrower shall comply
with Lender's Requirements For Restoration as set forth in Section 8.04 below.
Upon Lender's receipt of a final certificate of occupancy or other evidence of
approval of appropriate governmental authorities for the use and occupancy of
the Improvements and other evidence reasonably requested by Lender that the
Restoration has been completed and the costs thereof have been paid in full
(unless otherwise discharged or bonded pursuant to Section 3.09), and
satisfactory evidence that no mechanic's or similar liens for labor or material
supplied in connection with the Restoration are outstanding against the restored
Property and provided that an Event of Default does not currently exist, Lender
shall pay any remaining Restoration Funds (as defined in Section 8.04) then
held by Lender to the Borrower who completed such Restoration; provided,
however, nothing contained herein shall prevent Lender from applying at any time
the whole or any part of the Restoration Funds to the curing of any Event of
Default.

              (d) In the event that Lender applies all or any portion of the
Restoration Funds to repay the unpaid Obligations as provided in this Section
8.02, after payment in full of the Obligations, any remaining Restoration Funds
may, at Lender's option, be applied to payment of the other Aggregate Secured
Indebtedness. After payment in full of the Aggregate Secured Indebtedness, any
remaining Restoration Funds shall be paid to Borrowers.

              (e) Nothing contained herein shall prevent accrual of interest as
provided in the applicable Note on any portion of the Obligations to which the
Net Insurance Proceeds are to be applied until such time as the Net Insurance
Proceeds are actually received by Lender and applied by Lender to reduce the
Obligations.

         8.03 Condemnation.

              (a) If any Property or any part thereof is taken by reason of any
condemnation or similar eminent domain proceeding, or by a grant or conveyance
in lieu of condemnation or eminent domain ("CONDEMNATION"), Lender shall be
entitled to all compensation, awards, damages, proceeds and payments or relief
for the Condemnation ("CONDEMNATION PROCEEDS") provided, however, if all of the
conditions set forth in subparagraphs (1) and (2) of Section 8.03(b) are met,
the Borrower that owns the Property subject to such Condemnation delivers to
Lender a written undertaking to commence expeditiously and to complete
satisfactorily with due diligence the Restoration in accordance with the terms
of this Agreement, and the Net Condemnation Proceeds (as defined below) with
respect to any one Property shall be equal to or less than the Proceeds
Threshold and the costs of completing the Restoration of such Property shall be
equal to or less than the Proceeds Threshold, the Borrower owning such Property
shall have the right to commence, appear in and prosecute in its own name any
such action or proceeding, to make any compromise or settlement in connection
with such Condemnation and to collect the Condemnation Proceeds relating
thereto. In all other cases, at its option, Lender shall be entitled to
commence, appear in and prosecute in its own name any action or proceeding or to
make any compromise or settlement in connection with such Condemnation.
Borrowers hereby irrevocably constitute and appoint Lender as their attorney in
fact, which appointment is coupled

                                      -39-

<PAGE>

with an interest, to commence, appear in and prosecute any action or proceeding
or to make any compromise or settlement in connection with any such
Condemnation.

              (b) In the event of any Condemnation of a Property, and regardless
of whether Net Condemnation Proceeds are available therefor, the Borrower owning
such Property shall commence and diligently pursue to completion the Restoration
of the portion of such Property that has not been taken. Borrowers assign to
Lender all Condemnation Proceeds which Borrowers are entitled to receive except
as provided in Section 8.03(a). In the event of any Condemnation, and provided
that (1) an Event of Default does not currently exist, and (2) Lender has
determined that (i) its security has not been impaired, (ii) the Restoration of
any portion of the Property that has not been taken can be accomplished in full
compliance with all Requirements to the same condition, character and general
utility as nearly as possible to that existing prior to the taking and at least
equal in value as that existing prior to the taking, and (iii) the Restoration
can be completed not less than nine (9) months prior to the Maturity Date, then
Lender shall hold and disburse the Condemnation Proceeds, less the cost, if any,
to Lender of recovering the Condemnation Proceeds including, without limitation,
reasonable attorneys' fees and expenses, and adjusters' fees (the "NET
CONDEMNATION PROCEEDS"), to the Restoration.

              (c) In the event the Net Condemnation Proceeds are to be used for
the Restoration, the Borrower that owns the Property subject to such
Condemnation shall comply with Lender's Requirements For Restoration as set
forth in Section 8.04 below. Upon such Borrower's satisfaction and completion of
the Requirements For Restoration and upon confirmation that there is no Event of
Default then existing under the Loan Documents, Lender shall pay any remaining
Restoration Funds (as defined in Section 8.04 below) then held by Lender to such
Borrower.

              (d) After Restoration of the remaining Improvements, or in the
event the conditions precedent for such Restoration are not met, Lender shall
have the right to apply the Net Condemnation Proceeds first to the Obligations
(as defined in the Mortgage encumbering the Property which is subject to such
Condemnation) and then to the other Aggregate Secured Indebtedness, in such
manner and such order as Lender in its sole discretion shall determine, without
adjustment in the dollar amount of the installments due under the Notes. Nothing
contained herein shall prevent the accrual of interest as provided in the Notes
on any portion of the Aggregate Secured Indebtedness to which the Net
Condemnation Proceeds are to be applied until such Net Condemnation Proceeds are
actually received by Lender and so applied to reduce the Aggregate Secured
Indebtedness.

         8.04 Requirements for Restoration. Unless otherwise expressly agreed in
a writing signed by Lender, the following are the Requirements For Restoration:

              (a) In the event the Net Insurance Proceeds are to be used for the
Restoration, the Borrower owning the damaged Property shall, prior to the
commencement of any work or services in connection with the Restoration (the
"WORK"), deliver or furnish to Lender (i) complete plans and specifications for
the Work which (A) have been approved by all governmental authorities whose
approval is required, (B) bear the signed approval of an architect satisfactory
to Lender (the "ARCHITECT") and (C) are accompanied by Architect's signed
estimate of the total estimated cost of the Work which plans and specifications
shall be subject to Lender's

                                      -40-

<PAGE>

prior approval (if and when approved, the "APPROVED PLANS AND SPECIFICATIONS");
(ii) the amount of money which, as determined by Lender, will be sufficient when
added to the Net Insurance Proceeds, if any, to pay the entire cost of the
Restoration (all such money as held by Lender being herein collectively referred
to as the "RESTORATION FUNDS"); (iii) copies of all permits and approvals
required by law in connection with the commencement and conduct of the Work;
(iv) a contract for construction executed by such Borrower and a contractor
reasonably satisfactory to Lender (the "CONTRACTOR") in form, scope and
substance reasonably satisfactory to Lender (including a provision for
retainage) for performance of the Work; and (v) a surety bond for and/or
guarantee of payment for and completion of, the Work, which bond or guarantee
shall be (A) in form, scope and substance reasonably satisfactory to Lender, (B)
signed by a surety or sureties, or guarantor or guarantors, as the case may be,
who are reasonably acceptable to Lender, and (C) in an amount not less than
Architect's total estimated cost of completing the Work.

         (b) Said Borrower shall not commence any portion of the Work, other
than temporary work to protect the damaged Property or prevent interference with
business, until such Borrower shall have complied with the requirements of
subparagraph (a) above. After commencing the Work, such Borrower shall perform
or cause Contractor to perform the Work diligently and in good faith in
accordance with the Approved Plans and Specifications. So long as there does not
currently exist an Event of Default under any of the Loan Documents, Lender
shall disburse the Restoration Funds in increments to such Borrower, from time
to time as the Work progresses, to pay (or reimburse such Borrower for) the
costs of the Work, but subject to the following conditions, any of which Lender
may waive in its sole discretion:

         (i) Architect or a structural engineer satisfactory to Lender (the
"ENGINEER"') shall be in charge of the Work;

         (ii) Lender shall make such payments only upon not less than ten (10)
days' prior written notice from Borrower to Lender and such Borrower's delivery
to Lender of (A) such Borrower's written request for payment (a "REQUEST FOR
PAYMENT") accompanied by a certificate by Architect or Engineer in form, scope
and substance satisfactory to Lender which states that all of the Work completed
to that date has been done in compliance with the Approved Plans and
Specifications and in accordance with all provisions of law, that the amount
requested has been paid or is then due and payable and is properly a part of the
cost of the Work and that when added to all sums, if any, previously paid out by
Lender, the requested amount does not exceed the value of the Work done to the
date of such certificate; (B) evidence satisfactory to Lender that there are no
mechanic's or similar liens for labor or material supplied in connection with
the Work to date or that any such liens have been adequately provided for to
Lender's satisfaction; and (C) evidence satisfactory to Lender that the balance
of the Restoration Funds remaining after making the payments shall be sufficient
to pay the balance of the cost of the Work not completed to date (giving in such
reasonable detail as Lender may require an estimate of the cost of such
completion). Each Request for Payment shall be accompanied by (x) waivers of
liens satisfactory to Lender covering that part of the Work previously paid for,
if any, (y) a search prepared by a title company or by other evidence
satisfactory to Lender that no mechanic's liens or other liens or instruments
for the retention of title in respect of any part of the Work have been filed
against the applicable Property and not discharged of record, and (z) an
endorsement to Lender's title policy insuring the Lender that no encumbrance
exists on or affects the applicable Property other than the Permitted
Exceptions;

                                      -41-

<PAGE>

                  (iii) No Leases affecting ten percent (10%) or more of the
damaged Property in the aggregate immediately prior to the damage or destruction
shall have been cancelled, nor contain any still exercisable right to cancel,
due to such damage or destruction; and

                  (iv) Any Request for Payment after the Restoration has been
completed shall also be accompanied by a copy of any certificate or certificates
required by law to render occupancy of the Improvements located at the damaged
Property legal.

                  (c) If (i) within ninety (90) days after the occurrence of any
damage, destruction or condemnation requiring Restoration, the Borrower owning
such damaged, destroyed or condemned Property fails to submit to Lender and
receive Lender's approval of plans and specifications or fails to deposit with
Lender the additional amount necessary to accomplish the Restoration as provided
in subparagraph (a) above, or (ii) after such plans and specifications are
approved by all such governmental authorities and Lender, such Borrower fails to
commence promptly or diligently continue to completion the Restoration, or (iii)
such Borrower becomes delinquent in payment to mechanics, materialmen or others
for the costs incurred in connection with the Restoration, then, in addition to
all of the rights herein set forth and after five (5) days' written notice of
the non fulfillment of one or more of the foregoing conditions, Lender may apply
the Restoration Funds then or thereafter held by Lender first to reduce the
Obligations and then to reduce the other Aggregate Secured Indebtedness in such
order as Lender may determine, and at Lender's option and in its sole
discretion, Lender may declare the Obligations immediately due and payable
together with the Prepayment Fee.

                                   ARTICLE 9
                          REPRESENTATIONS OF BORROWERS

         9.01 ERISA. Borrowers hereby represent, warrant and agree that; (a)
each Borrower is acting on its own behalf and is not an employee benefit plan as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), which is subject to Title I of ERISA, nor a plan as
defined in Section 4975(e)(l) of the Internal Revenue Code of 1986, as amended
(the "CODE"; each of the foregoing hereinafter referred to collectively as a
"PLAN"); (b) each Borrower's assets do not constitute "plan assets" of one or
more such Plans within the meaning of Department of Labor Regulation Section
2510.3-101; and (c) no Borrower will be reconstituted as a Plan or as an entity
whose assets constitute "plan assets".

         9.02 Non-Relationship. No partner, member or shareholder of any
Borrower is (a) a director or officer of Lender, (b) a parent, son or daughter
of a director or officer of Lender, or (c) a spouse of a director or officer of
Lender.

         9.03 No Adverse Change. Borrowers represent and warrant that.

              (a) There has been no material adverse change from the conditions
shown in the Application or in the materials submitted in connection with the
Application in the credit rating or financial condition of Borrowers, the
general partners, shareholders or members of Borrowers or any entities which are
general partners, shareholders or members of any Borrower, respectively as the
case may be (collectively, "BORROWERS' CONSTITUENTS").

                                      -42-

<PAGE>

              (b) Borrowers have delivered to Lender true and correct copies of
all Borrowers' organizational documents and except as expressly approved by
Lender in writing, there have been no changes in Borrowers' Constituents since
the date that the Application was executed by kramont

              (c) None of Borrowers, nor any of the Borrowers' Constituents, is
involved as a debtor in any bankruptcy, reorganization, insolvency, dissolution
or liquidation proceeding, and to the best knowledge of Borrowers, no such
proceeding is contemplated or threatened.

         9.04 FIRPTA. Borrowers certify that neither Borrowers nor any partner,
shareholder or member of any Borrower is, and no legal or beneficial interest in
a partner member or shareholder of any Borrower is or will be held, directly or
indirectly by, a "foreign person" within the meaning of Sections 1445 and 7701
of the Internal Revenue Code of 1986.

         9.05 Authority. The parties executing the Loan Documents and the
Indemnity Agreements on behalf of Borrowers have the legal capacity and
authority to execute said documents.

         9.06 Purpose of Loan. The Aggregate Secured Indebtedness was obtained
solely for the purpose of carrying on or acquiring a business or for commercial
investment.

                                   ARTICLE 10
                            EXCULPATION AND LIABILITY

         10.01 Liability of Borrowers.

              (a) Notwithstanding anything to the contrary contained in this
Agreement, the Notes or in any of the other Loan Documents, but without in any
manner releasing, impairing or otherwise affecting this Agreement, the Notes or
any of the other Loan Documents, or the validity hereof or thereof, or the liens
of the Mortgages, except as expressly set forth in this Section 10.01, the
liability of Borrowers shall be limited to and satisfied out of the Properties,
the Leases, Rents and Profits and all other collateral assigned or pledged to
Lender pursuant to any of the Loan Documents, and Lender will not enforce a
deficiency judgment against Borrowers. Notwithstanding any of the foregoing,
nothing contained in this Section 10.01, shall be deemed to prejudice the rights
of Lender to proceed against any entity or person whatsoever, including any
Borrower and the general partner, shareholders or members of any Borrower and/or
any Liable Party, (i) to enforce any leases entered into by a Borrower or its
affiliates as tenant, guarantees, or other agreements entered into by a
Borrower in a capacity other than as borrower or any policies of insurance; (ii)
to recover damages for fraud, material misrepresentation, material breach of
warranty or waste; (iii) to recover any condemnation proceeds or insurance
proceeds or other similar funds which have been misapplied by a Borrower or
which, under the terms of the Loan Documents, should have been paid to Lender;
(iv) to recover any tenant security deposits, tenant letters of credit or other
deposits or fees paid to a Borrower that are part of the collateral for the
Aggregate Secured Indebtedness or prepaid rents for a period of more than thirty
(30) days which have not been delivered to Lender; (v) to recover Rents and
Profits received by a Borrower after the first day of the month in which an
Event of Default occurs and prior to the date Lender acquires title to the
Properties which have not been applied to the

                                      -43-

<PAGE>

Aggregate Secured Indebtedness or in accordance with the Loan Documents to
operating and maintenance expenses of the Properties; (vi) to recover damages,
costs and expenses arising from, or in connection with the provisions of this
Agreement pertaining to Hazardous Materials or the Indemnity Agreements; (vii)
to recover all amounts due and payable pursuant to Sections 14.14 and 14.15 and
any amounts expended by Lender in connection with the foreclosure of the
Mortgages; (viii) to recover damages arising from any Borrower's failure to
comply with Section 9.01; and/or (ix) to recover damages arising from any
Borrower's failure to pay when due any Imposition or Premium at any time when
such Borrower is not required to make escrow deposits pursuant to Section 3.05.
Borrowers shall be personally liable for Borrowers' obligations arising in
connection with the matters set forth in the foregoing clauses (i) to (ix)
inclusive.

          (b) The limitation of liability set forth in this Section 10.01 shall
not apply and the Aggregate Secured Indebtedness shall be fully recourse in the
event that (i) a Borrower commences a voluntary bankruptcy or insolvency
proceeding or an involuntary bankruptcy or insolvency proceeding is commenced
against a Borrower and is not dismissed within 90 days of filing, or (ii) there
is a Transfer or a Secondary Financing, except as permitted by the Loan
Documents or as otherwise approved by Lender in writing. In addition, this
agreement shall not waive any rights which Lender would have under any
provisions of the Bankruptcy Code to file a claim for the full amount of the
Aggregate Secured Indebtedness or to require that the Property shall continue to
secure all of the Aggregate Secured Indebtedness (subject to the limitations set
forth in Section 7.06 of the New York Mortgages).

         10.02 Liability of Trustees, Officers or Shareholders. This Agreement
and all documents, agreements, understanding and arrangements relating to the
transactions contemplated hereby have been executed by the undersigned in his
capacity as an officer of the managing member or general partner of Borrowers,
which are indirect subsidiaries of the Trust which has been formed as a Maryland
Real Estate Investment Trust pursuant to a Declaration of Trust of Kramont
Realty Trust dated November 12, 1999, or in his capacity as an officer of the
Trust, and not individually. None of the trustees, officers or shareholders of
the Trust shall be bound or have any personal liability hereunder or thereunder.
Under no circumstances shall any party be entitled to seek recourse or commence
any action against any of the trustees, officers or shareholders of the Trust or
any of their personal assets for the performance or payment of any obligation
hereunder.

                                   ARTICLE 11
                  CHANGE IN OWNERSHIP, CONVEYANCE OF PROPERTY

         11.01 Conveyance of Property, Change in Ownership and Composition.

              (a) Other than as set forth in Sections 11.01(b), 11.01(c) and
11.01(d), Borrowers shall not, without the prior written consent of Lender in
its sole discretion (i) create, effect, consent to, suffer to exist or permit
any direct or indirect conveyance, sale, assignment, transfer, lien, pledge,
mortgage, security interest or other encumbrance or alienation of any Property,
or any part thereof or interest therein (excepting equipment and incidental
personal property which is sold and thereafter replaced with personal property
of relatively equal or greater value which performs a similar function); (ii)
cause or permit any conveyance, transfer, pledge or encumbrance of any direct or
indirect interest in any Borrower or in any entity comprising any

                                      -44-

<PAGE>

Borrower; (iii) cause or permit any change in any of the partners, shareholders,
members of beneficiaries of any Borrower or the individuals or entities
comprising such partners, shareholders or members from those existing on the
date hereof; or (iv) cause or permit any merger, reorganization, dissolution or
other change in the ownership structure of any Borrower or any entity comprising
any Borrower (collectively "TRANSFERS"); provided, however, Transfer shall not
include any Permitted Ownership Structure Transfer or Permitted Property
Transfer (collectively "PERMITTED TRANSFERS").

              (b) As used herein, "PERMITTED OWNERSHIP STRUCTURE TRANSFER" shall
mean any of (i) transfers of direct or indirect interests in a Borrower as a
result of the death of a natural person who is a partner, shareholder or member
of such Borrower or any entity comprising such Borrower, or in connection with
estate planning of a natural person who is a partner, shareholder or member of a
Borrower or the constituent entities owning, directly or indirectly, interests
in such Borrower, to the spouse, son or daughter of such natural person or
descendant of such son or daughter, or to a stepson or stepdaughter of such
natural person or descendant of such stepson or stepdaughter; or (ii) transfers
of the shares or stock of the Trust or operating partnership units relating to
the limited partnership interests of Kramont; provided that (A) the Trust is a
publicly-traded company listed on a national stock exchange and (B) at all
times the Trust maintains effective management and legal control over the
Borrower and the Properties. Any acquisition or merger of, or other change in
control involving, the Trust shall be deemed a Permitted Ownership Structure
Transfer if (x) following such acquisition, merger or change in control the
surviving legal entity has a net worth at least equal to that of the Trust
immediately prior to such acquisition, merger or change in control, and (y)
Lender is given notice of such acquisition, merger or change in control within
five (5) business days after the occurrence thereof.

              (c) Notwithstanding anything to the contrary contained in this
Article 11, Lender shall consent to a one time sale, conveyance or transfer of
the Properties in their entirety (hereinafter, "PERMITTED PROPERTY TRANSFER") at
any time after July 1, 2005, provided that each of the following terms and
conditions are satisfied:

              (1)  No Event of Default is then continuing hereunder or under any
                   of the other Loan Documents, the Indemnity Agreements or the
                   Liable Parties Guaranties;

              (2)  Borrowers shall have given Lender written notice ("PROPERTY
                   TRANSFER NOTICE") of the terms of such prospective Permitted
                   Property Transfer not less than thirty (30) days before the
                   date on which such Permitted Property Transfer is scheduled
                   to close and, concurrently therewith, gives Lender all such
                   information concerning the proposed transferee of the
                   Property (hereinafter, "TRANSFEREE") as Lender would require
                   in evaluating an initial extension of credit to a borrower;

              (3)  Lender shall have the right to approve or disapprove the
                   proposed Transferee, which approval shall not be unreasonably
                   withheld, conditioned or delayed;

                                      -45-

<PAGE>

              (4)  All of the Properties are simultaneously conveyed to the
                   Transferee or an affiliate of the Transferee reasonably
                   acceptable to Lender;

              (5)  The Transferee shall be able to make the representations set
                   forth in Sections 9.01, 9.02 and 9.04 hereof;

              (6)  The Transferee (or its principals) shall (A) have a total
                   market capitalization of not less than $700,000,000.00, and
                   (B) have experience in the ownership, management and leasing
                   of properties similar to the Properties;

              (7)  The Aggregate Net Cash Flow from the Properties for the
                   twelve (12) month period ending on the last day of the
                   calendar month immediately preceding the date on which the
                   Property Transfer Notice is delivered (the "TRANSFER
                   MEASURING PERIOD"), as determined by Lender, shall be not
                   less than 1.60 times the annual aggregate debt service
                   payments due with respect to the Loans during the Transfer
                   Measuring Period (including, without limitation, principal
                   and interest) and Borrowers shall have delivered to Lender
                   operating statements for the Transfer Measuring Period. For
                   the purposes of this Agreement, "AGGREGATE NET CASH FLOW"
                   shall mean (i) the total gross income from the Properties for
                   the Transfer Measuring Period less (ii) all operating
                   expenses of the Properties during the Transfer Measuring
                   Period (ie., expenses directly attributable to the operation,
                   repair .and/or maintenance of the Properties, including,
                   without limitation, Impositions, Premiums and management fees
                   but excluding debt service payments, capital expenditures,
                   vacancy allowances, income taxes of Borrowers and any
                   non-cash charges or expenses such as depreciation);

              (8)  The ratio of (A) the then outstanding aggregate principal
                   amounts of the Loans to (B) the aggregate fair market values
                   of the Properties is not greater than 70%, and Borrowers
                   shall have delivered to Lender appraisals of the Properties
                   reasonably satisfactory to Lender from an appraiser
                   reasonably satisfactory to Lender confirming such loan to
                   value ratio;

              (9)  Concurrently with the closing of the Permitted Property
                   Transfer, Borrowers or Transferee shall pay to Lender a
                   non-refundable assumption fee in an amount equal to one
                   percent (1%) of the then outstanding principal amount of the
                   Loans;

              (10) Transferee shall expressly assume in writing the Loan
                   Documents and the Indemnity Agreements in an instrument
                   satisfactory to Lender and one or more additional individuals
                   or entities acceptable to Lender shall execute guaranties in
                   the form of the Liable Parties Guaranties and indemnities in
                   the form of the Indemnity Agreements, each with respect to
                   events arising or occurring from and after the date of the
                   Permitted Property Transfer (whereupon Liable Parties and
                   Borrowers shall be released as to all

                                      -46-

<PAGE>

                   obligations with respect to events arising or occurring from
                   and after the date of the Permitted Property Transfer);

              (11) Borrowers or Transferee shall pay all reasonable costs and
                   expenses incurred by Leader in connection with the Permitted
                   Property Transfer, including, without limitation,
                   documentation costs and reasonable attorneys' fees;

              (12) Borrowers or Transferee shall deliver to Lender, without any
                   cost or expense to Lender, an endorsement to Lender's title
                   insurance policies insuring the liens of the Mortgages, in
                   form and substance reasonably satisfactory to Lender,
                   extending the effective date of such policy to the date of
                   execution and delivery of the assumption agreement referenced
                   above in subparagraph (10) of this Section, with no
                   additional exceptions added to such policy other than the
                   Permitted Exceptions, and insuring that fee simple title to
                   the Properties is vested in Transferee;

              (13) Borrowers or Transferee shall deliver to Lender, without any
                   cost or expense to Lender, hazard insurance endorsements or
                   certificates and other similar materials as Lender may deem
                   necessary at the time of the Permitted Property Transfer,
                   evidencing compliance by Transferee with the provisions of
                   Article 4;

              (14) Borrowers shall execute and deliver to Lender, without any
                   cost or expense to Lender, a release of Lender, its officers,
                   directors, employees and agents, from all claims and
                   liability relating to the transactions evidenced by the Loan
                   Documents, through and including the date of the closing of
                   the Permitted Property Transfer, which agreement shall be in
                   form and substance reasonably satisfactory to Lender and
                   shell be binding upon the Transferee; and

              (15) If there are any Securities issued with respect to the
                   Aggregate Secured Indebtedness which have been assigned a
                   rating by a Rating Agency, Lender shall have received
                   confirmation from such Rating Agency that assumption of the
                   Aggregate Secured Indebtedness by Transferee will not result
                   in an adverse change in the rating of the Securities.

        No Permitted Property Transfer shall release Borrowers or Liable Parties
from their obligations under the Loan Documents, the Indemnity Agreements or the
Liable Parties Guaranties for any acts or events occurring or obligations
arising prior to or simultaneously with the closing of such Permitted Property
Transfer. Upon request, Borrowers and Liable Parties shall execute, without any
cost or expense to Lender, such documents and agreements as Lender shall
reasonably require to evidence and effectuate the ratification of said
obligations. Upon request, Lender shall execute and deliver to Borrowers and
Liable Parties, without any cost or expense to Lender, a release of Borrowers
and Liable Parties from all claims and liability arising under the Loan
Documents, the Indemnity Agreements and the Liable Parties Guaranties after the
date of the Permitted Property Transfer

                                      -47-

<PAGE>

        (d) Notwithstanding anything to the contrary contained in this Article
11, Borrower may cause the release of up to four (4) of the Properties from the
liens of the Mortgages encumbering such Properties and the other Loan Documents
upon the substitution of replacement properties (each, a "PERMITTED PROPERTY
SUBSTITUTION"), provided that each of the following terms and conditions are
satisfied with respect to each Permitted Property Substitution:

              (1)  No Event of Default is then continuing hereunder or under any
                   of the other Loan Documents, the Indemnity Agreements or the
                   Liable Parties Guaranties;

              (2)  The Property to be released (the "RELEASE PROPERTY") and the
                   property to be substituted for such Release Property (any
                   such substituted property, a "REPLACEMENT PROPERTY") are
                   owned by the same Borrower or another subsidiary of the
                   Trust;

              (3)  Such Borrower shall have given Lender written notice
                   ("SUBSTITUTION NOTICE") of the terms of such prospective
                   Permitted Property Substitution not less than sixty (60) days
                   before the date on which such Permitted Property Substitution
                   is scheduled to close and, concurrently therewith, gives
                   Lender all such information concerning the proposed
                   Replacement Property as Lender would require in evaluating an
                   initial extension of a loan secured by such Replacement
                   Property and pays to Lender a processing fee of $15,000.00;

              (4)  The Replacement Property shall be another shopping center of
                   a similar age, similar building construction design and
                   quality, and with similar quality tenants and parking
                   capacity as the Release Property;

              (5)  The fair market value of the Replacement Property (as
                   determined by an appraiser approved by Lender prior to the
                   appraisals of the Replacement Property and the Release
                   Property) is not less than the fair market value of the
                   Release Property at the time of such substitution;

              (6)  The Net Cash Flow from the Replacement Property for the
                   twelve (12) month period ending on the last day of the
                   calendar month immediately preceding the date on which the
                   Substitution Notice is delivered (the "SUBSTITUTION MEASURING
                   PERIOD"), as determined by Lender, shall be not less than
                   1.60 times the Substitution Measuring Period Debt Service
                   Payments and such Borrower shall have delivered to Lender
                   operating statements for the Substitution Measuring Period.
                   For the purposes of this Agreement, "NET CASH FLOW" shall
                   mean (i) the total gross income from the Replacement Property
                   for the Substitution Measuring Period less (ii) all operating
                   expenses of me Replacement Property during the Substitution
                   Measuring Period (i.e., expenses directly attributable to the
                   operation, repair and/or maintenance of the Replacement
                   Property, including, without limitation, Impositions,
                   Premiums and management fees but excluding Substitution
                   Measuring Period Debt Service Payments,

                                      -48-

<PAGE>

                   capital expenditures, vacancy allowances, income taxes of
                   Borrower and any non-cash charges or expenses such as
                   depreciation) and "SUBSTITUTION MEASURING PERIOD DEBT SERVICE
                   PAYMENTS" shall mean the annual aggregate debt service
                   payments due during the Substitution Measuring period with
                   respect to the indebtedness evidenced by the Note defined as
                   the Obligations under the Mortgage encumbering the Release
                   Property (including, without limitation, principal and
                   interest);

              (7)  The Replacement Property shall not be a leasehold estate or a
                   condominium property;

              (8)  Such Borrower shall be responsible for payment of all fees,
                   costs, and expenses incurred by Lender and/or Borrower in
                   connection with the substitution of the Replacement Property
                   for the Release Property, including without limitation all
                   survey costs, costs of inspections and reports required in
                   connection therewith, appraisal fees, brokerage commissions,
                   title charges, title insurance premiums, recording charges,
                   architect's, engineer's, environmental consultant's and
                   reasonable attorney's fees and expenses, and reasonable
                   travel expenses of Lender's Architectural and Engineering
                   Services employees;

              (9)  Such Borrower executes and delivers to Lender such amendments
                   to this Agreement, the applicable Mortgage, Loan Documents,
                   Indemnity Agreement and Liable Parties Guaranty and such
                   other documents as Lender deems reasonably necessary to
                   spread the lien of the relevant Mortgage to the Replacement
                   Property;

              (10) Such Borrower delivers to Lender, without any cost or expense
                   to Lender, an endorsement to Lender's title insurance policy
                   insuring that the lien of the relevant Mortgage encumbers the
                   Replacement Property, in form and substance reasonably
                   satisfactory to Lender, extending the effective date of such
                   policy to the date of Permitted Property Substitution, with
                   no liens, encumbrances or other exceptions affecting title
                   which are not reasonably satisfactory to Lender, and insuring
                   that fee simple title to the Replacement Property is vested
                   in such Borrower;

              (11) Such Borrower delivers to Lender, without any cost or expense
                   to Lender, hazard and other insurance endorsements or
                   certificates, evidencing compliance with the provisions of
                   Article 4; and

              (12) All of the conditions of the Application which would have
                   been required to be met with respect to the Replacement
                   Property if the Replacement Property had been one of the
                   original properties constituting the collateral for the
                   Aggregate Secured Indebtedness shall be fulfilled to the
                   satisfaction of Lender with respect to the Replacement
                   Property as of the date of substitution; and

                                      -49-

<PAGE>

         11.02 Prohibition on Subordinate Financing. Borrowers shall not incur
or permit the incurring of (a) any financing in addition to the Aggregate
Secured Indebtedness that is secured by a lien, security interest or other
encumbrance of any part of the Properties or (b) any pledge or encumbrance of a
partnership, member or shareholder or beneficial interest in any Borrower
(individually or collectively, a "SECONDARY FINANCING").

         11.03 Statements Regarding Ownership. Borrowers agree to submit or
cause to be submitted to Lender within forty-five (45) days after December 31st
of each calendar year during the term of the Loans and thirty (30) business days
after any written request by Lender (but not more than twice during any calendar
year), a sworn, notarized certificate, signed by authorized members, partners or
officers of Borrowers, as the case may be, stating whether (x) any part of the
Properties., or any interest in any of the Properties, has been conveyed,
transferred, assigned, encumbered, or sold, and if so, to whom; (y) any
conveyance, transfer, pledge or encumbrance of any interest in a Borrower or any
entity comprising a Borrower has been made, and if so, to whom; or (z) there has
been any change in the shareholders, partners or members of a Borrower or the
individuals or entities comprising such shareholders, partners or members of a
Borrower from those on the Execution Date, and if so, a description of such
change or changes.

         11.04 Continuation of Existence. Each Borrower covenants that it shall
not; (a) file or consent to a petition pursuant to applicable bankruptcy,
insolvency, liquidation or reorganization statutes, or make an assignment for
benefit of creditors without the unanimous consent of its partners or members or
shareholders, as applicable; (b) dissolve, liquidate, consolidate, merge or sell
all or substantially all of its assets except as permitted hereunder; or (c)
materially modify, amend or revise its organizational documents without Lender's
prior written consent

         11.05 Managing Agent The Properties shall at all times be managed on
Borrowers' behalf in a competent and professional manner appropriate as
first-class shopping centers for the Use by a prominent professional managing
agent. Prior to engaging such managing agent or executing a management
agreement, such managing agent and management agreement shall be subject to
approval by Lender, in its sole and absolute discretion, it being understood
that Kramont is hereby approved by Lender as managing agent for the Properties
and the management agreement in existence on the date hereof with Kramont, which
Borrowers represent they have delivered to Lender a true, correct and complete
copy of, is hereby approved by Lender, subject to the terms of the Subordination
of Management Agreement of even date herewith between Lender and Kramont;
provided that the terms and conditions of any subsequent management agreement
between Kramont and Borrowers or any amendment or modification of any management
agreement between Kramont and Borrower and any compensation of Kramont with
respect to its services performed at or in connection with the Properties (other
than an extension of the existing management agreement or the expansion of the
existing management agreement to include additional properties owned by
Borrowers or affiliates of Borrowers for compensation which is no greater, and
on terms and conditions no less favorable to Borrowers, than those contained in
the existing management agreement) are subject to approval by Lender in its sole
and absolute discretion. As a condition to its retention as managing agent, each
managing agent shall be required to execute and deliver to Leader an agreement
that all fees due such managing agent are subordinate to all amounts due to
Lender

                                      -50-

<PAGE>

                                   ARTICLE 12
                             DEFAULTS AND REMEDIES

         12.01 Events Of Default. Any of the following shall be deemed to be a
material breach of Borrowers' covenants in this Agreement and shall constitute
an event of default hereunder ("EVENT OF DEFAULT"):

              (a) The failure of any Borrower to pay (i) any installment of
principal, interest or principal and interest or any required escrow deposit
within seven (7) days of the due date of such payment or (ii) any other sum.
required to be paid under any Loan Document, whether to Lender or otherwise,
within seven (7) days after receipt of notice of such failure, provided that
Borrowers will not be entitled to such notice more than once during any twelve
(12) month period;

              (b) The filing by any Borrower or any Liable Party of a voluntary
petition or application for relief in bankruptcy, the filing against any
Borrower of an involuntary petition or application for relief in bankruptcy
which is not dismissed within sixty (60) days, or any Borrower's or any Liable
Party's adjudication as a bankrupt or insolvent, or the filing by any Borrower
or any Liable Party of any petition, application for relief or answer seeking
or acquiescing in any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief for itself under any present or
future federal, state or other statute, law, code or regulation relating to
bankruptcy, insolvency or other relief for debtors, or any Borrower's seeking or
consenting to or acquiescing in the appointment of any trustee, custodian,
conservator, receiver or liquidator of such Borrower or of all or any
substantial part of any of the Properties or of any or all of the Rents and
Profits, or the making of any general assignment for the benefit of creditors,
or the admission in writing of its inability to pay its debts generally as they
become due;

              (c) If any warranty, representation, certification, financial
statement or other information made or furnished at any time pursuant to the
terms of this Agreement or the other Loan Documents by any Borrower, or by any
person or entity otherwise liable under any Loan Document shall be materially
false or misleading as of the date made;

              (d) If any Borrower shall suffer or permit any Property, or any
part of any Property, to be used in a manner that might (1) impair such
Borrower's title to such Property, (2) create rights of adverse use or
possession, or (3) constitute an implied dedication of any part of such
Property;

              (e) If Liable Parties shall default under any of the Liable
Parties Guaranties executed by Liable Parties in favor of Lender;

              (f) There is a Transfer or Secondary Financing, except as
permitted by the Loan Documents or as otherwise approved by Lender in writing;
or

              (g) The failure of any Borrower to perform or observe any other
non-monetary term, provision, covenant, condition or agreement under this
Agreement or any other Loan Document other than Sections 12.01(a)-(f), for a
period of more than thirty (30) days after

                                      -51-

<PAGE>

receipt of notice of such failure (unless there is a specific shorter or longer
grace period provided in this Agreement or the Loan Documents); provided,
however, that if such failure is of a nature that it cannot be cured within
thirty (30) days, such Borrower shall have such longer period of time as shall
be reasonably necessary for such Borrower to cure such default, not to exceed
thirty (30) additional days, provided that such Borrower commences the curing
thereof within such thirty (30) day period and thereafter diligently prosecutes
such cure to completion, and provided further that Lender determines, in the
exercise of its good faith discretion, that there will be no deterioration or
impairment of any of the Properties or other security for the Aggregate Secured
Indebtedness during such longer period of time.

         12.02 Remedies Upon Default. If an Event of Default occurs, Lender may,
at its option, and without prior notice or demand, do and hereby is authorized
and empowered by Borrowers so to do, any or all of the following:

              (a) Acceleration. Lender may declare the entire unpaid principal
balance of the Loans to be immediately due and payable.

              (b) Recovery of Unpaid Sums. Lender may, from time to time, take
legal action to recover any sums as the same become due, without regard to
whether or not the Loans shall be accelerated and without prejudice to Lender's
right thereafter to accelerate the Loans or exercise any other remedy, if such
sums remain uncollected.

              (c) Foreclosure. Lender may institute proceedings, judicial or
otherwise, for the complete or partial foreclosure of the Mortgages or the
complete or partial sale of one or more of the Properties under power of sale or
under any applicable provision of law. In connection with any such proceeding,
Lender may sell each Property as an entirety or in parcels or units and at such
times and place (at one or more sales) and upon such terms as it may deem
expedient unless prohibited by law from so acting.

              (d) Entry. Lender may enter into possession of the Properties,
lease the Improvements, collect all Rents and Profits and, after deducting all
costs of collection and administration expenses, apply the remaining Rents and
Profits in such order and amounts as Lender, in Lender's sole discretion, may
elect to the payment of Impositions, operating costs, costs of maintenance,
restoration and repairs, Premiums and other charges, including, but not limited
to, costs of leasing the Properties and fees and costs of counsel and receivers,
and in reduction of the Aggregate Secured Indebtedness.

              (e) Receivership. Lender may have a receiver appointed to enter
into possession of the Properties, lease the Properties, collect the Rents and
Profits and apply them as the appropriate court may direct. Lender shall be
entitled to the appointment of a receiver without the necessity of proving
either the inadequacy of the security or the insolvency of Borrowers or any
Liable Parties. Borrowers and Liable Parties shall be deemed to have consented
to the appointment of the receiver. The collection or receipt of any of the
Rents and Profits by Lender or any receiver shall not affect or cure any Event
of Default

              (f) Apply Funds in Reserve Accounts. Lender may apply any funds
then held in escrow or reserve by Lender under the Loan Documents (including
without limitation

                                      -52-

<PAGE>

Restoration Funds) as a credit on the Loans, in such priority and proportion as
Lender deems appropriate.

              (g) Insurance Policies. Lender may surrender any or all insurance
policies maintained as required by this Agreement, collect the unearned Premiums
and apply such sums as a credit on the Loans, in such priority and proportion as
Lender deems appropriate. Borrowers hereby appoint Lender their attomey-in-fact
with full power of substitution (and which shall be deemed to be coupled with an
interest and irrevocable until the Loans are paid and the Mortgages discharged
of record, with Borrowers hereby ratifying all that said attorney shall do by
virtue thereof) to surrender such insurance policies and collect such Premiums.

         12.03 Application of Proceeds of Sale. In the event of a sale of any of
the Properties pursuant to Section 12.02, to the extent permitted by law, the
Lender shall determine in its sole discretion the order in which the proceeds
from the sale shall be applied to the payment of the Aggregate Secured
Indebtedness, including without limitation, the expenses of the sale and of all
proceedings in connection with the sale, including reasonable attorneys' fees
and expenses; Impositions, Premiums, liens, and other charges and expenses; the
outstanding principal balance of the Aggregate Secured Indebtedness; any accrued
interest; any Prepayment Fee; and any other amounts owed under any of the Loan
Documents.

         12.4 Cross-Default; Cross-Collateralization; Waiver of Marshalling of
Assets.

              (a) Borrowers acknowledge that Lender has made the Loans to
Borrowers upon the security of its collective interest in the Properties and in
reliance upon The aggregate of the Properties taken together being of greater
value as collateral security than the sum of each Property taken separately.
Borrowers agree that the Mortgages are and will be cross-collateralized and
cross-defaulted with each other so that (i) an Event of Default under any of the
Mortgages shall constitute an Event of Default under each of the other
Mortgages; (ii) an Event of Default under any of the Notes or this Agreement
shall constitute an Event of Default under each Mortgage; (iii) subject to
Section 7.06 of the New York Mortgages, each Mortgage shall constitute security
for the Notes as if a single blanket lien were placed on all of the Properties
as security for the Notes; and (iv) such cross-collateralization shall in no
event be deemed to constitute a fraudulent conveyance,

              (b) To the fullest extent permitted by law, Borrowers, for
themselves and their successors and assigns, waive all rights to a marshalling
of the assets of Borrowers, Borrowers' partners and others with interests in
Borrowers, and of the Properties, or to a sale in inverse order of alienation in
the event of foreclosure of all or any of the Mortgages, and agree not to assert
any right under any laws pertaining to the marshalling of assets, the sale in
inverse order of alienation, homestead exemption, the administration of estates
of decedents, or any other matters whatsoever to defeat, reduce or affect the
right of Lender under the Loan Documents to a sale of the Properties for the
collection of the Aggregate Secured Indebtedness without any prior or different
resort for collection or of the right of Lender to the payment of the Aggregate
Secured Indebtedness out of the net proceeds of the Properties in preference to
every other claimant whatsoever. In addition, Borrowers, for themselves and
their successors and assigns, waive in the event of foreclosure of any or all of
the Mortgages, any equitable right otherwise available to Borrowers which would
require the separate sale of the Properties or require Lender to exhaust its

                                      -53-

<PAGE>

remedies against any one Property or any combination of the Properties before
proceeding against any other Property or combination of the Properties; and
further in the event of such foreclosure Borrowers do hereby expressly consent
to and authorizes, at the option of Lender, the foreclosure and sale either
separately or together of any combination of the Properties.

                                   ARTICLE 13
                   BORROWERS AGREEMENTS AND FURTHER ASSURANCES

         13.01 Participation and Sale of Loan.

              (a) Lender may (at no cost to Borrowers) sell, transfer or assign
its entire interest or one or more participation interests in the Aggregate
Secured Indebtedness, the Loan Documents, the Indemnity Agreements and the
Liable Parties Guaranties, at any time and from time to time, including, without
limitation, its rights and obligations as servicer of the Aggregate Secured
Indebtedness, and may issue mortgage pass-through certificates or other
securities evidencing a beneficial interest in the Aggregate Secured
Indebtedness in a rated or unrated public offering or private placement,
including depositing the Loan Documents with a trust that may issue securities
(the "SECURITIES"). Lender may forward to each purchaser, transferee, assignee,
servicer, participant, investor in such Securities (collectively, the
"INVESTOR"), any prospective Investor or any Rating Agency rating or assigning
value to such Securities, all documents and information which Lender now has or
may hereafter acquire relating to the Aggregate Secured Indebtedness and to
Borrowers or any Liable Parties and the Properties, whether furnished by
Borrowers, any Liable Parties or otherwise, as Lender determines necessary or
desirable.

              (b) Borrowers (at no cost to Borrowers) will cooperate with the
Lender and the Rating Agencies in furnishing such information and providing such
other assistance, reports and legal opinions as the Lender may reasonably
request in connection with any such transaction. In addition, Borrower's
acknowledge that Lender may release or disclose to potential purchasers or
transferees of the Aggregate Secured Indebtedness, or potential participants in
the Aggregate Secured Indebtedness, originals or copies of the Loan Documents,
title information, engineering reports, financial statements, operating
statements, appraisals, leases, rent rolls, and all other materials, documents
and information in Lender's possession or which Lender is entitled to receive
under the Loan Documents, with respect to the Aggregate Secured Indebtedness,
Borrowers, Liable Parties or the Properties. Borrowers shall also furnish to
such Investors or such prospective Investors or such Rating Agency any and all
information concerning the Properties, the Leases, the financial condition of
Borrowers or any Liable Parties as may be requested by Lender, any Investor or
any prospective Investor or any Rating Agency in connection with any sale,
transfer or participation interest. Borrowers and Liable Parties (at no cost to
themselves) shall provide estoppel certificates and any other documents to such
Investor, such prospective Investors and/or such Rating Agency as may reasonably
be required by Lender.

         13.02 Replacement of Note. Upon notice to any Borrower of the loss,
theft, destruction or mutilation of any Note executed by such Borrower and
delivery of an affidavit from Lender certifying as to the same, such Borrower
will execute and deliver, in lieu of the original Note, a

                                      -54-

<PAGE>

replacement note, identical in form and substance to such Note and dated as of
the Execution Date. Upon the execution and delivery of the replacement note, all
references in any of the Loan Documents to the original Note shall refer to the
replacement note.

         13.03 Borrower's Estoppel. Within ten (10) days after a request by
Lender (but not more often than twice in any calendar year), each Borrower shall
furnish an acknowledged written statement in form reasonably satisfactory to
Lender (a) setting forth the amount of each Aggregate Note Indebtedness, (b)
stating either that no offsets or defenses exist against such Aggregate Note
Indebtedness, or if any offsets or defenses are alleged to exist, their nature
and extent, (c) stating whether any default then exists under the Loan Documents
or any event has occurred and is continuing, which, with the lapse of time, the
giving of notice, or both, would constitute such a default, and (d) any other
matters as Lender may reasonably request. If a Borrower does not furnish an
estoppel certificate within the 10-day period, such Borrower appoints Lender as
its attorney-in-fact to execute and deliver the certificate on its behalf, which
power of attorney shall be coupled with an interest and shall be irrevocable.

         13.04 Further Assurances. Borrowers shall, without expense to Lender,
execute, acknowledge and deliver all further acts, deeds, conveyances,
mortgages, deeds of trust, assignments, security agreements, and financing
statements as Lender shall from time to time reasonably require, to assure,
convey, assign, transfer and confirm unto Lender the Properties and rights
conveyed or assigned by this Agreement or which Borrowers may become bound to
convey or assign to Lender, or for carrying out the intention of this Agreement
or any of the other Loan Documents, or for filing, refiling, registering,
reregistering, recording or rerecording the Mortgages. If Borrowers fail to
comply with the terms of this Section, Lender may, at Borrowers' expense,
perform Borrowers' obligations for and in the name of Borrowers, and Borrowers
hereby irrevocably appoint Lender as their attorney in fact to do so. The
appointment of Lender as attorney-in-fact is coupled with an interest

         13.05 Subrogation. Lender shall be subrogated to the lien of any and
all encumbrances against the Properties paid out of the proceeds of the Loans
and to all of the rights of the recipient of such payment.

                                   ARTICLE 14
                             MISCELLANEOUS COVENANTS

         14.01 No Waiver. No single or partial exercise by Lender, or delay or
omission in the exercise by Lender, of any right or remedy under the Loan
Documents shall preclude, waive or limit the exercise of any other right or
remedy. Lender shall at all times have the right to proceed against any portion
of, or interest in, any of the Properties without waiving any other rights or
remedies with respect to any other portion of the Properties. No right or remedy
under any of the Loan Documents is intended to be exclusive of any other right
or remedy but shall be cumulative and may be exercised concurrently with or
independently from any other right and remedy under any of the Loan Documents or
under applicable law.

         14.02 Notices.

                                      -55-

<PAGE>

              (a) All notices, demands and requests given or required to be
given by, pursuant to, or relating to, this Agreement shall be in writing.

              (b) All insurance binders, policies, endorsements, certificates,
cancellation notices and correspondence relating to insurance are to be sent to:

                  Metropolitan Life Insurance Company
                  One MetLife Plaza
                  27-01 Queens Plaza North
                  Long Island City, New York 11101
                  Arttn: Risk Management Unit, Area: 7CX

              (c) All notices or requests for approval pursuant to Section
6.06(e) shall be given in accordance with Section 6.06(e)).

              (d) All other notices shall be deemed to have been properly given
if mailed by United States registered or certified mail, with return receipt
requested, postage prepaid, or by United States Express Mail or other comparable
overnight courier service to the parties at the addresses set forth below (or at
such other addresses as shall be given in writing by any party to the others)
and shall be deemed complete upon receipt or refusal to accept delivery as
indicated in the return receipt or in the receipt of such United States Express
Mail or courier service:

         If to Lender:

                                  Metropolitan Life Insurance Company,
                                  10 Park Avenue
                                  Morristown, New Jersey 07960
                                  Attention: Senior Vice President
                                  Real Estate Investments

         and:                     Metropolitan Life Insurance Company
                                  10 Park Avenue
                                  Morristown, New Jersey 07960
                                  Attention: Chief Counsel
                                  Real Estate Investments

         If to Borrowers:

                                   580 West Germantown Pike, Suite 200
                                   Plymouth Meeting, Pennsylvania 19462
                                   Attention: Chief Financial Officer

         14.03 Heirs and Assigns. This Agreement applies to Lender and
Borrowers, and their heirs, legatees, devisees, administrators, executors,
successors and assigns. The term "Borrower" shall include both the original
Borrower and any subsequent owner or owners of any of the Property.

                                      -56-

<PAGE>

         14.04 Severability. If any provision of this Agreement should be held
unenforceable or void, then that provision shall be separated from the remaining
provisions and shall not affect the validity of this Agreement except that if
the unenforceable or void provision relates to the payment of any monetary sum,
then, Lender may, at its option, declare the Aggregate Secured Indebtedness
immediately due and payable.

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

         14.06 Captions. The captions are inserted only as a matter of
convenience and for reference, and in no way define, limit, or describe the
scope or intent of any provisions of this Agreement.

         14.07 Time of the Essence. Time shall be of the essence with respect to
all of Borrowers' obligations under this Agreement and the other Loan Documents.

         14.08 No Modifications. This Agreement may not be changed, amended or
modified, except in a writing expressly intended for such purpose and executed
by Borrower and Lender.

                                      -57-

<PAGE>

         14.09 Entire Agreement. This Agreement, the Mortgages, the Notes, the
other Loan Documents, the Liable Parties Guaranties and the Indemnity Agreements
constitute the entire agreement between Borrowers and Lender with respect to the
subject matter hereof and all understandings, oral representations and
agreements heretofore or simultaneously had among the parties are merged in, and
are contained in, such documents and instruments.

         14.10 Credits On Account Of The Secured Indebtedness. Borrowers shall
not claim or demand or be entitled to any credit on account of the Aggregate
Secured Indebtedness for any part of the taxes paid (or payments in lieu of
taxes) with respect to the Properties or any part thereof and no deduction shall
otherwise be made or claimed from the taxable value of the Properties, or any
part thereof, by reason of this Agreement or the Mortgages.

         14.11 Consent to Jurisdiction. Borrowers hereby irrevocably consent to
the jurisdiction of the State of New York and to the jurisdiction of the .United
States District Court for the Southern District of New York, for the purpose of
any suit, action or other proceeding arising out of or relating to this
Agreement or any other Loan Document, or the subject matter hereof or thereof.
Borrowers hereby waive, and agree not to assert, any such suit, action or
proceeding any claim that they is not personally subject to such jurisdiction,
or any right to remove an action brought in State to Federal Court, or any claim
that such suit, action or proceeding is in an inconvenient forum or that the
venue thereof is improper. Borrowers agree that service in any such action,
whether or not in either such jurisdiction, may be effected by means in
accordance with the provisions of Section 14.02 above or by any other means of
service allowed by law.

         14.12 Waiver, Of Jury Trial. To the fullest extent permitted by law,
Borrowers and Lender HEREBY WAIVE THEIR RESPECTIVE RIGHT TO TRIAL BY JURY in any
action, proceeding and/or hearing on any matter whatsoever arising out of, or in
any way connected with, this Agreement, the Notes, the Mortgages or any of the
Loan Documents, or the enforcement of any remedy under any law, statute, or
regulation. No party will seek to consolidate any such action in which a jury
has been waived, with any other action in which a jury trial cannot or has not
been waived. Each party has received the advice of counsel with respect to this
waiver.

         14.13 Lender's Right to Perform Borrowers' Obligations. Borrowers agree
that, if any Borrower fails to perform any act or to pay any money which such
Borrower is required to perform or pay under the Loan Documents beyond any
applicable notice and cure period set forth in the Loan Documents, Lender may
(but shall have no obligation to) make the payment or perform the act at the
cost and expense of such Borrower and in such Borrower's name or in its own
name. Borrowers hereby constitute Lender (or any officer or agent of Lender) as
Borrowers' true and lawful attorney-in-fact to make any such payments or
otherwise perform Borrowers' obligations hereunder and Borrowers hereby ratify
all that said attorney shall lawfully do or cause to be done by virtue hereof.
The power of attorney is coupled with an interest and is irrevocable. Any money
paid by Lender under this Section 14.13 shall be reimbursed to Lender in
accordance with Section 14.14.

         14.14 Lender Reimbursement. All payments made or funds expended or
advanced by Lender pursuant to the provisions of any Loan Document (except those
which have been reimbursed by Borrowers to Lender), shall (a) become a part of
the Aggregate Secured

                                      -58-

<PAGE>

Indebtedness, (b) bear interest at the Interest Rate from the date such payments
are made or funds expended or advanced, (c) become due and payable by Borrowers
upon demand by Lender, (d) with respect to any protective advances made by
Lender or payments made or funds expended or advanced by Lender following any
Borrower's failure to take any action or make any payment (other than payments
of principal and interest) required herein or under the other Loan Documents,
bear interest at the Default Rate from the date of such demand; and (e) with
respect to other payments made or funds expended or advanced by Lender, bear
interest at the Default Rate from the date which is ten (10) days after the date
of such demand. Failure to reimburse Lender upon such demand shall constitute an
Event of Default under Section 12.01 (a) hereof.

         14.15 Fees and Expenses. If Lender becomes a party (by intervention or
otherwise) to any action or proceeding affecting, directly or indirectly,
Borrowers, the Properties or the title thereto or Lender's interest under this
Agreement or the other Loan Documents, or employs an attorney to collect any of
the Aggregate Secured Indebtedness or to enforce performance of the obligations,
covenants and agreements of the Loan Documents, Borrowers shall reimburse Lender
in accordance with Section 14.14 for all expenses, costs, charges and legal fees
incurred by Lender (including, without limitation, the fees and expenses of
experts and consultants), whether or not suit is commenced.

         14.16 Waiver of Consequential Damages. Borrowers covenant and agree
that in no event shall Lender be liable for consequential damages and, to the
fullest extent permitted by law, Borrowers expressly waive all existing and
future claims that they may have against Lender for consequential damages.

         14.17 Waiver of Bankruptcy Stay. Subject to the Bankruptcy Code,
Borrowers agree that, in the event that any Borrower shall (i) file with any
bankruptcy court of competent jurisdiction or be the subject of any petition
under Title 11 of the Bankruptcy Code, (ii) File any petition seeking any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any present or future federal or state act
or law relating to bankruptcy or insolvency, or (iii) have sought or consented
to or acquiesced in the appointment of any trustee, receiver, conservator, or
liquidator, Lender shall thereupon be entitled and the Borrowers irrevocably
consent to immediate and unconditional relief from any automatic stay imposed by
Section 362 of the Bankruptcy Code, or otherwise, on or against the exercise of
the rights and remedies otherwise available to the Lender as provided for
herein, in the Notes, other Loan Documents delivered in connection herewith and
as otherwise provided by law, and the Borrowers irrevocably waive any right to
object to such relief and will not contest any motion by the Lender seeking
relief from the automatic stay and Borrowers will cooperate with the Lender, in
any manner requested by the Lender, in its efforts to obtain relief from any
such stay or other prohibition.

         14.18 No Joint Venture; No Third Party Beneficiaries. Borrowers and
Lender intend that the relationships created hereunder and under each of the
other Loan Documents are solely those of borrower and lender. Nothing herein or
in any of the other Loan Documents is intended to create, nor shall it be
construed as creating anything but a debtor-creditor relationship between
Borrowers and Lender nor shall they be deemed to confer on anyone other than
Lender, and its

                                      -59-

<PAGE>

successors and assigns, any right to insist upon or to enforce the performance
or observance of any of the obligations contained herein or therein.

         14.19 Joint and Several Obligations. If Borrower consists of more than
one party, each shall be jointly and severally liable to perform the obligations
of Borrowers under the Loan Documents.

         14.20 Duplicate Originals; Counterparts. This Agreement and each of the
other Loan Documents may be executed in any number of duplicate originals, and
each duplicate original shall be deemed to be an original. This Agreement and
each of the other Loan Documents (and each duplicate original) also may be
executed in any number of counterparts, each of which shall be deemed an
original and all of which together constitute a fully executed agreement even
though all signatures do not appear on the same document.

                                      -60-

<PAGE>

        IN WITNESS WHEREOF, Lender and Borrowers hereby sign, seal and deliver
this Loan Agreement.

LENDER                                          BORROWERS

METROPOLITAN LIFE                     KRT PROPERTY HOLDINGS LLC,
INSURANCE COMPANY                     a Delaware limited liability company

                                      BY:     KRT Property Holdings Manager LLC,
                                              its managing member

By: /s/ David V. Politano                     By:_____________________________
    ----------------------------                  Name: Louis P. Meshon, Sr.
Name:  DAVID V. POLITANO                          Title: President
Title: DIRECTOR

                                      LILAC DE LLC, a Delaware limited liability
                                      company

                                      By: Lilac DE Manager LLC, is managing
                                          member

                                             By:____________________________
                                                 Name: Louis P. Meshon, Sr.
                                                 Title: President

                                      KR COLLEGETOWN LLC, a Delaware limited
                                      liability company

                                      By:KR Collegetown Manager LLC, its
                                      managing member

                                             By: ___________________________
                                                 Name: Louis P. Meshon. Rr.

<PAGE>

        IN WITNESS WHEREOF, Lender and Borrowers hereby sign, seal and deliver
this Loan Agreement.

LENDER                                              BORROWERS

METROPOLITAN LIFE                    KRT PROPERTY HOLDINGS LLC,
INSURANCE COMPANY                    a Delaware limited liability company

                                     By: KRT Property Holdings Manager LLC, its
                                         managing member

By: _________________________            By: /s/ Louis P. Meshon, Sr.
    Name:                                    ---------------------------
    Title:                                   Name: Louis P. Meshon, Sr,
                                             Title: President

                                      LILAC DE LLC, a Delaware limited liability
                                      company

                                      By: Lilac DE Manager LLC, its managing
                                          member

                                          By: /s/ Louis P. Meshon, Sr.
                                              ---------------------------
                                              Name: Louis P. Meshon, Sr.
                                              Title: President

                                      KR COLLEGETOWN LLC, a Delaware limited
                                      liability company

                                      By: KR Collegetown Manager LLC, its
                                      managing member

                                          By: /s/ Louis P. Meshon, Sr.
                                              ---------------------------
                                              Name: Louis P. Meshon, ST.
                                              Title; President

                       [SIGNATURES CONTINUE ON NEXT PAGE]

<PAGE>

                                  FOX RUN, LIMITED PARTNERSHIP, an
                                  Alabama limited partnership

                                  By: KR Fox Run GP LLC, its general partner

                                      By: /s/ Louis P. Meshon, Sr.
                                          ----------------------------------
                                          Name: Louis P. Meshon, Sr.
                                          Title: President

                                  KR STREET ASSOCIATES, L.P., a
                                  Pennsylvania limited partnership

                                  By: KR Street Associates GP LLC, its
                                      general partner

                                      By: /s/ Louis P. Meshon, Sr.
                                          ----------------------------------
                                          Name: Louis P. Meshon, Sr.
                                          Title: President

                                  KRAMONT OPERATING PARTNERSHIP,
                                  L.P., a Delaware limited partnership

                                  By: Kramont Realty Trust, its general partner

                                      By:  /s/ Louis P. Meshon, Sr.
                                           ---------------------------------
                                           Name: Louis P. Meshon, Sr.
                                           Title: President

                                  KR BARN, L.P., a Pennsylvania limited
                                  partnership

                                  By: KR Barn GP LLC, its general partner

                                      By: /s/ Louis P. Meshon, Sr.
                                          ----------------------------------
                                          Name: Louis P. Meshon, Sr.
                                          Title: President

                       [SIGNATURES CONTINUE ON NEXT PAGE]

                                      -2-

<PAGE>

                                  KR BEST ASSOCIATES, L.P.
                                  a Pennsylvania limited partnership

                                  By: KR Best Associates GP LLC, its general
                                      partner

                                      By: /s/ Louis P. Meshon, Sr.
                                          --------------------------------------
                                          Name: Louis P. Meshon, Sr.
                                          Title: President

                                  KR DEVELOPMENT, L.P., a Pennsylvania
                                  limited partnership

                                      By: KR Development GP LLC, its general
                                          partner

                                          By: /s/ Louis P. Meshon, Sr.
                                              ----------------------------------
                                              Name: Louis P. Meshon, Sr.
                                              Title: President

                                      -3-
<PAGE>

STATE OF NEW JERSEY                  )
                                     :SS.:
COUNTY OF MORRIS                     )

        On the 11th day of June, 2003, before me, the undersigned, a Notary
Public in and for said State, personally appeared DAVID V. POLITANO, personally
known to me or proved to me on the basis of satisfactory evidence to be the
individual whose name is subscribed to the within instrument and acknowledged to
me that he executed the same in his capacity, and that by his signature on the
instrument, the individual, or the person upon behalf of which the individual
acted, executed the instrument.

                           /s/ Particia Tated
                           ------------------------------------------
                           Patricia Tated Notary Public
                                 Notary Public -New jorsey
                                 My Commission Expires August 13, 2007

COMMONWEALTH OF PENNSYLVANIA          )
                                      ss:
COUNTY OF MONTGOMERY                  )

         On the _______ day of June, 2003, before me, the undersigned, a Notary
Public in and for said State, personally appeared Louis P. Meshon, Sr.,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity, and that by his
signature on the instrument, the individual, or the person upon behalf of which
the individual acted, executed the instrument.

                                   __________________________________
                                            Notary Public

<PAGE>

STATE OF NEW JERSEY                  )
                                     :ss.:
COUNTY OF                            )

         On the_______day of June, 2003, before me, the undersigned, a Notary
Public in and for said State, personally appeared ____________________,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity, and that by his
signature on the instrument, the individual, or the person upon behalf of which
the individual acted, executed the instrument.

                                         ________________________________
                                                  Notary Public

COMMONWEALTH OF PENNSYLVANIA                       )
                                                    ss:
COUNTY OF MONTGOMERY                               )

         On the 30th day of May, 2003, before me, the undersigned, a Notary
Public in and for said State, personally appeared Louis P. Meshon, Sr.,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity, and that by his
signature on the instrument, the individual, or the person upon behalf of which
the individual acted, executed the instrument.

                                        /s/ Mary Elizabeth Gannon
                                        ----------------------------------------
                                                 Notary Public

                                                   [SEAL]

<PAGE>

                                    EXHIBIT A

                               INSURANCE AMOUNTS

<TABLE>
<CAPTION>
                                                             Commercial
                                          Full                General
           Property                Replacement Cost          Liability         Business Income
---------------------------------------------------------------------------------------------------
<S>                                <C>                      <C>                <C>
Bam Plaza Property                  $13,927,198             $25,000,000        $3,360,265
---------------------------------------------------------------------------------------------------
Bensalem. Square Property           $ 4,196,755             $25,000,000        $1,165,254
---------------------------------------------------------------------------------------------------
Bethlehem Square Property           $18,400,000             $25,000,000        $4,027,014
---------------------------------------------------------------------------------------------------
Bristol Commerce Park               $15,995,601             $25,000,000        $3,624,251
Property
---------------------------------------------------------------------------------------------------
Collegetown Shopping Center         $12,920,630             $25,000,000        $2,179,578
Property
---------------------------------------------------------------------------------------------------
Fox Run Property                    $14,452,940             $25,000,000        $3,255,375
---------------------------------------------------------------------------------------------------
Groton Square Property              $16,400,000             $25,000,000        $2,899,713
----------------------------------------------------------------------------------------------------
High Ridge Plaza Property           $ 9,200,000             $25,000,000        $2,158,454
----------------------------------------------------------------------------------------------------
Mall at Cross County Property       $32,100,000             $25,000,000        $6,703,038
----------------------------------------------------------------------------------------------------
North Ridge Plaza Property          $ 4,600,000             $25,000,000        $1,371,564
----------------------------------------------------------------------------------------------------
Park Hills Plaza Property           $13,101,200             $25,000,000        $2,462,602
----------------------------------------------------------------------------------------------------
Street Road Plaza Property          $ 3,894,613             $25,000,000        $  991,305
---------------------------------------------------------------------------------------------------
Valley Fair Property                $ 6,224,633             $25,000,000        $2,025,589
----------------------------------------------------------------------------------------------------
Village Square Property             $ 1,800,000             $25,000,000        $  560,622
----------------------------------------------------------------------------------------------------
Whitehall Square Property           $14,308,000             $25,000,000        $3,494,827
---------------------------------------------------------------------------------------------------
</TABLE>

                                      -2-

<PAGE>

                                    EXHIBIT B

                               LEASING GUIDELINES

"Leasing Guidelines" shall mean the guidelines approved in writing by Lender
from time to time with respect to the leasing of the Properties. The following
shall be the initial Leasing Guidelines:

         (a) All Leases shall have an initial term of at least three (3) years
but not more than ten (10) years; and

         (b) All Leases shall have an annual minimum rent payable of the then
prevailing market rates.

                                      -3-

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