Document:

Exhibit 10.238

                      AMENDED AND RESTATED PROMISSORY NOTE

$30,000,000.00                                                New York, New York
                                                                    June 9, 2004

      FOR VALUE RECEIVED,  GM OLATHE, LLC, a Delaware limited liability company,
having an address at 150 East Gay  Street,  Columbus,  Ohio 43215  ("Borrower"),
hereby  unconditionally  promises to pay to the order of MORGAN STANLEY MORTGAGE
CAPITAL  INC.,  a New York  corporation,  as  lender,  having an address at 1221
Avenue of the Americas,  27th Floor, New York, New York 10020 ("Lender"),  or at
such  other  place as the  holder  hereof  may from  time to time  designate  in
writing,   the   principal   sum  of   THIRTY   MILLION   AND   NO/100   DOLLARS
($30,000,000.00),  or so much  thereof as is  advanced,  in lawful  money of the
United States of America,  with interest thereon to be computed from the date of
this Note at the Interest Rate,  and to be paid in accordance  with the terms of
this Note and that certain Loan Agreement dated the date hereof between Borrower
and Lender (the "Loan  Agreement").  All  capitalized  terms not defined  herein
shall have the respective meanings set forth in the Loan Agreement.

      This  Amended  and  Restated  Promissory  Note  (this  "Note")  amends and
restates in their entirety the notes described on the Schedule of Notes attached
hereto and made a part hereof (the "Existing  Notes") which are each now held by
Lender. This Note is not intended to create any new indebtedness nor intended to
constitute a novation as to Borrower's obligations under the Existing Notes.

                            ARTICLE 1: PAYMENT TERMS

      Borrower  agrees to pay the principal sum of this Note and interest on the
unpaid principal sum of this Note from time to time outstanding at the rates and
at the times  specified in Article II of the Loan Agreement and the  outstanding
balance of the  principal  sum of this Note and all accrued and unpaid  interest
thereon shall be due and payable on the Maturity Date.

                       ARTICLE 2: DEFAULT AND ACCELERATION

      The Debt shall without  notice become  immediately  due and payable at the
option of Lender if any payment required in this Note is not paid on or prior to
the date when due or if not paid on the Maturity Date or on the happening of any
other Event of Default.

                            ARTICLE 3: LOAN DOCUMENTS

      This Note is secured by the Mortgage and the other Loan Documents.  All of
the  terms,  covenants  and  conditions  contained  in the Loan  Agreement,  the
Mortgage and the other Loan  Documents  are hereby made part of this Note to the
same extent and with the same force as if they were fully set forth  herein.  In
the event of a conflict or inconsistency  between the terms of this Note and the
Loan Agreement, the terms and provisions of the Loan Agreement shall govern.

<PAGE>

                            ARTICLE 4: SAVINGS CLAUSE

      Notwithstanding   anything  to  the  contrary,   (a)  all  agreements  and
communications between Borrower and Lender are hereby and shall automatically be
limited so that,  after taking into  account all amounts  deemed  interest,  the
interest  contracted  for,  charged or received by Lender shall never exceed the
maximum lawful rate or amount,  (b) in calculating  whether any interest exceeds
the lawful maximum,  all such interest shall be amortized,  prorated,  allocated
and  spread  over the full  amount  and term of all  principal  indebtedness  of
Borrower to Lender, and (c) if through any contingency or event, Lender receives
or is deemed to  receive  interest  in excess of the  lawful  maximum,  any such
excess shall be deemed to have been applied  toward  payment of the principal of
any and all then outstanding  indebtedness of Borrower to Lender, or if there is
no such indebtedness, shall immediately be returned to Borrower.

                            ARTICLE 5: NO ORAL CHANGE

      This  Note  may  not be  modified,  amended,  waived,  extended,  changed,
discharged or  terminated  orally or by any act or failure to act on the part of
Borrower  or Lender,  but only by an  agreement  in writing  signed by the party
against whom  enforcement of any  modification,  amendment,  waiver,  extension,
change, discharge or termination is sought.

                               ARTICLE 6: WAIVERS

      Borrower  and all others who may become  liable for the  payment of all or
any part of the Debt do  hereby  severally  waive  presentment  and  demand  for
payment,  notice of  dishonor,  notice of  intention  to  accelerate,  notice of
acceleration,  protest  and  notice of  protest  and  non-payment  and all other
notices of any kind.  No release of any  security  for the Debt or  extension of
time for  payment of this Note or any  installment  hereof,  and no  alteration,
amendment  or waiver of any  provision of this Note,  the Loan  Agreement or the
other Loan Documents made by agreement  between Lender or any other Person shall
release,  modify, amend, waive, extend, change,  discharge,  terminate or affect
the  liability  of  Borrower or any other  Person who may become  liable for the
payment of all or any part of the Debt under this Note,  the Loan  Agreement  or
the other Loan Documents.  No notice to or demand on Borrower shall be deemed to
be a waiver  of the  obligation  of  Borrower  or of the right of Lender to take
further  action  without  further notice or demand as provided for in this Note,
the Loan Agreement or the other Loan Documents.  If Borrower is a partnership or
limited liability company, the agreements herein contained shall remain in force
and be applicable, notwithstanding any changes in the individuals comprising the
partnership  or limited  liability  company,  and the term  "Borrower,"  as used
herein,  shall  include  any  alternate  or  successor  partnership  or  limited
liability company, but any predecessor  partnership or limited liability company
and their  partners or members shall not thereby be released from any liability.
If Borrower is a corporation,  the agreements  contained  herein shall remain in
full force and be  applicable  notwithstanding  any changes in the  shareholders
comprising, or the officers and directors relating to, the corporation,  and the
term  "Borrower,"  as used herein,  shall include any  alternative  or successor
corporation,  but any predecessor corporation shall not be relieved of liability
hereunder.  (Nothing in the foregoing  sentence  shall be construed as a consent
to, or a waiver of, any  prohibition or restriction on transfers of interests in
such partnership,  limited  liability  company or corporation,  which may be set
forth in the Loan Agreement, the Mortgage or any other Loan Document.)

                                      -2-
<PAGE>

                               ARTICLE 7: TRANSFER

      Upon the transfer of this Note, Borrower hereby waiving notice of any such
transfer,  Lender may deliver all the collateral mortgaged,  granted, pledged or
assigned pursuant to the Loan Documents,  or any part thereof, to the transferee
who shall thereupon become vested with all the rights herein or under applicable
law given to Lender with respect thereto, and Lender shall thereafter forever be
relieved  and fully  discharged  from any  liability  or  responsibility  in the
matter;  but Lender shall  retain all rights  hereby given to it with respect to
any liabilities and the collateral not so transferred.

                             ARTICLE 8: EXCULPATION

      The  provisions  of  Section  11.22  of  the  Loan  Agreement  are  hereby
incorporated  by  reference  into this Note to the same extent and with the same
force as if fully set forth herein.

                            ARTICLE 9: GOVERNING LAW

      (A) THIS  NOTE  WAS  NEGOTIATED  IN THE  STATE  OF NEW  YORK,  AND MADE BY
BORROWER  AND  ACCEPTED BY LENDER IN THE STATE OF NEW YORK,  AND THE PROCEEDS OF
THIS NOTE 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 NOTE AND THE OBLIGATIONS  ARISING HEREUNDER SHALL BE GOVERNED
BY,  AND  CONSTRUED  IN  ACCORDANCE  WITH,  THE  LAWS OF THE  STATE  OF NEW YORK
APPLICABLE  TO CONTRACTS  MADE AND  PERFORMED IN SUCH STATE  (WITHOUT  REGARD TO
PRINCIPLES OF CONFLICT OF LAWS) AND ANY  APPLICABLE  LAW OF THE UNITED STATES OF
AMERICA. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY
AND  IRREVOCABLY  WAIVES  ANY  CLAIM  TO  ASSERT  THAT  THE  LAW  OF  ANY  OTHER
JURISDICTION  GOVERNS THIS NOTE AND THIS NOTE 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.

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

                                      -3-
<PAGE>

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

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

                        ARTICLE 10: WAIVER OF JURY TRIAL

      BORROWER HEREBY WAIVES,  TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER IN CONTRACT,
TORT OR OTHERWISE, RELATING DIRECTLY OR INDIRECTLY TO THE LOAN EVIDENCED BY THIS
NOTE,  THE  APPLICATION  FOR THE LOAN  EVIDENCED  BY THIS NOTE OR THE OTHER LOAN
DOCUMENTS OR ANY ACTS OR OMISSIONS OF LENDER, ITS OFFICERS, EMPLOYEES, DIRECTORS
OR AGENTS IN CONNECTION THEREWITH.

                               ARTICLE 11: NOTICES

      All notices or other written  communications  hereunder shall be delivered
in accordance with Section 11.6 of the Loan Agreement.

                         [NO FURTHER TEXT ON THIS PAGE]

                                      -4-
<PAGE>

      IN WITNESS WHEREOF, Borrower has duly executed this Note as of the day and
year first above written.

                  GM OLATHE, LLC, a Delaware limited liability company

                  By:  GM MEZZ, LLC, a Delaware limited liability company,
                       its sole member

                       By:  GREAT PLAINS METROMALL, LLC, a Delaware
                            limited liability company, its sole member

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

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

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

<PAGE>

                                SCHEDULE OF NOTES

The Notes secured by the following Mortgages:

   Leasehold Mortgage And Security Agreement ("Mortgage") from Olathe Mall, LLC,
      a Colorado limited liability company, Borrower, in favor of The Huntington
      National  Bank,  a  national  banking   association,   Key  Bank  National
      Association, a national banking association,  and Bank One, Arizona, NA, a
      national banking association, Co-Agents, dated March 1, 1996, and recorded
      July 2, 1996,  as  Document  No.  2612458 in Book 4924,  page 385,  of the
      records of the Register of Deeds for Johnson County, Kansas.

   Said Mortgage was modified by virtue of Assumption Agreement and Modification
      of Mortgage and Construction  Loan Agreement by and between The Huntington
      National Bank, Key Bank National  Association,  and Bank One, Arizona, NA,
      Co-Agents,  and Great Plains Metromall,  LLC, a Delaware limited liability
      company,  New Borrower  and Olathe Mall,  LLC,  Original  Borrower,  dated
      November 27, 1996, and recorded December 18, 1996, as Document No. 2662033
      in Book  5063,  page 664,  of the  records  of the  Register  of Deeds for
      Johnson County, Kansas.

   Said Mortgage was modified by virtue of Second  Modification  of Mortgage and
      Construction  Loan  Agreement and  Modification  of Note dated November 3,
      1997,  and recorded on November 17, 1997,  as Document No.  276317 in Book
      5374,  page 531,  of the  records  of the  Register  of Deeds for  Johnson
      County, Kansas.

   Said Mortgage  was  assigned by virtue of  Assignment  of  Mortgage  from The
      Huntington  National  Bank,  Key Bank  National  Association  and Bank One
      Arizona,   NA,  to  German  American  Capital   Corporation,   a  Maryland
      corporation,  dated as of June 30, 2000, and recorded on July 13, 2000, as
      Document  No.  3138530  in Book  6630,  page 544,  of the  records  of the
      Register of Deeds for Johnson County, Kansas.

   Said Mortgage  was  modified  by virtue of  Amended  and  Restated  Leasehold
      Mortgage,  Security  Agreement  Financial  Statement,  Filing  Fixture and
      Assignment  of Leases,  Rents and Security  Deposits by and between  Great
      Plains Metromall,  LLC, and German American Capital Corporation,  dated as
      of June 30, 2000,  and recorded July 13, 2000, as Document No.  3138531 in
      Book 6630,  page 552, of the records of the  Register of Deeds for Johnson
      County, Kansas.

   Said Mortgage was assigned to LaSalle Bank National  Association,  as trustee
      for  the  registered   holders  of  COMM  2001-FL4   Commercial   Mortgage
      Pass-Through Certificates, Series COMM 2001-FL4, by Assignment of Recorded
      Mortgage  Collateral  Security  Documents  dated June 28, 2001,  by German
      American  Capital  Corporation,  and recorded on July 9, 2001, as Document
      No.  3268076,  in Book 7147,  Page 562, in the records of the  Register of
      Deeds of Johnson County, Kansas.

   Said Mortgage was assigned to Lender by Assignment of Mortgage  dated June 9,
      2004, by LaSalle Bank National Association,  as trustee for the registered
      holders of COMM 2001-FL4  Commercial Mortgage  Pass-Through  Certificates,
      Series COMM  2001-FL4,,  and submitted for recording in the records of the
      Register of Deeds of Johnson County, Kansas.================================================================================

                                                                  Exhibit 10.239

                                 LOAN AGREEMENT

                            Dated as of June 9, 2004

                                     Between

                                 GM OLATHE, LLC,
                                   as Borrower

                                       and

                      MORGAN STANLEY MORTGAGE CAPITAL INC.,
                                    as Lender

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

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

I.    DEFINITIONS; PRINCIPLES OF CONSTRUCTION

Section 1.1    Definitions....................................................1
Section 1.2    Principles of Construction....................................18

II.   THE LOAN

Section 2.1    The Loan......................................................18
     2.1.1     Agreement to Lend and Borrow..................................18
     2.1.2     Single Disbursement to Borrower...............................18
     2.1.3     The Note......................................................18
     2.1.4     Use of Proceeds...............................................18
Section 2.2    Interest Rate.................................................18
     2.2.1     Applicable Interest Rate......................................18
     2.2.2     Interest Calculation..........................................19
     2.2.3     Determination of Interest Rate................................19
     2.2.4     Usury Savings.................................................21
Section 2.3    Loan Payments.................................................21
     2.3.1     Payment Before Maturity Date..................................21
     2.3.2     Payment on Maturity Date......................................22
     2.3.3     Interest Rate and Payment after Default.......................22
     2.3.4     Late Payment Charge...........................................23
     2.3.5     Method and Place of Payment...................................23
Section 2.4    Prepayments...................................................23
     2.4.1     Voluntary Prepayments.........................................23
     2.4.2     Mandatory Prepayments.........................................24
     2.4.3     Prepayments After Default.....................................24
Section 2.5    Taxes.........................................................25
Section 2.6    Non-Confidentiality of Tax Treatment..........................28

III.  REPRESENTATIONS AND WARRANTIES

Section 3.1    Borrower Representations......................................29
     3.1.1     Organization..................................................29
     3.1.2     Proceedings...................................................29
     3.1.3     No Conflicts..................................................30
     3.1.4     Litigation....................................................30
     3.1.5     Agreements....................................................30
     3.1.6     Consents......................................................30
     3.1.7     Title.........................................................30
     3.1.8     No Plan Assets................................................30

                                       -i-
<PAGE>

     3.1.9     Compliance....................................................31
     3.1.10    Financial Information.........................................31
     3.1.11    Condemnation..................................................31
     3.1.12    Utilities and Public Access...................................31
     3.1.13    Separate Lots.................................................31
     3.1.14    Assessments...................................................31
     3.1.15    Enforceability................................................31
     3.1.16    Assignment of Leases..........................................32
     3.1.17    Insurance.....................................................32
     3.1.18    Licenses......................................................32
     3.1.19    Flood Zone....................................................32
     3.1.20    Physical Condition............................................32
     3.1.21    Boundaries....................................................32
     3.1.22    Leases........................................................32
     3.1.23    Filing and Recording Taxes....................................33
     3.1.24    Single Purpose................................................33
     3.1.25    Tax Filings...................................................36
     3.1.26    Solvency......................................................36
     3.1.27    Federal Reserve Regulations...................................37
     3.1.28    Organizational Chart..........................................37
     3.1.29    Bank Holding Company..........................................37
     3.1.30    No Other Debt.................................................37
     3.1.31    Investment Company Act........................................37
     3.1.32    Access/Utilities..............................................37
     3.1.33    No Bankruptcy Filing..........................................37
     3.1.34    Full and Accurate Disclosure..................................37
     3.1.35    Foreign Person................................................38
     3.1.36    Fraudulent Transfer...........................................38
     3.1.37    No Change in Facts or Circumstances; Disclosure...............38
     3.1.38    Management Agreement..........................................38
     3.1.39    Perfection of Accounts........................................38
     3.1.40    Ground Lease..................................................39
Section 3.2    Survival of Representations...................................40

IV.   BORROWER COVENANTS

Section 4.1    Borrower Affirmative Covenants................................40
     4.1.1     Existence; Compliance with Legal Requirements.................40
     4.1.2     Taxes and Other Charges.......................................40
     4.1.3     Litigation....................................................41
     4.1.4     Access to Property............................................41
     4.1.5     Further Assurances; Supplemental Mortgage Affidavits..........41
     4.1.6     Financial Reporting...........................................41
     4.1.7     Title to the Property.........................................43
     4.1.8     Estoppel Statement............................................43
     4.1.9     Leases........................................................44

                                      -ii-
<PAGE>

     4.1.10    Alterations...................................................45
     4.1.11    PILOT Payments................................................46
     4.1.12    Material Agreements...........................................46
     4.1.13    Performance by Borrower.......................................46
     4.1.14    Costs of Enforcement/Remedying Defaults.......................47
     4.1.15    Business and Operations.......................................47
     4.1.16    Loan Fees.....................................................47
     4.1.17    Interest Rate Cap.............................................47
     4.1.18    Ground Lease..................................................48
Section 4.2    Borrower Negative Covenants...................................48
     4.2.1     Due on Sale and Encumbrance; Transfers of Interests...........48
     4.2.2     Liens.........................................................48
     4.2.3     Dissolution...................................................48
     4.2.4     Change in Business............................................49
     4.2.5     Debt Cancellation.............................................49
     4.2.6     Affiliate Transactions........................................49
     4.2.7     Zoning........................................................49
     4.2.8     Assets........................................................49
     4.2.9     No Joint Assessment...........................................49
     4.2.10    Principal Place of Business...................................49
     4.2.11    ERISA.........................................................49
     4.2.12    Material Agreements...........................................50

V.    INSURANCE, CASUALTY AND CONDEMNATION

Section 5.1    Insurance.....................................................50
     5.1.1     Insurance Policies............................................50
     5.1.2     Insurance Company.............................................54
     5.1.3     Current Insurance.............................................55
Section 5.2    Casualty and Condemnation.....................................55
     5.2.1     Casualty......................................................55
     5.2.2     Condemnation..................................................55
     5.2.3     Casualty Proceeds.............................................56
Section 5.3    Delivery of Net Proceeds......................................56
     5.3.1     Minor Casualty or Condemnation................................56
     5.3.2     Major Casualty or Condemnation................................56

VI.   RESERVE FUNDS

Section 6.1    Intentionally Omitted.........................................60
Section 6.2    PILOT Payment/Tax Funds.......................................60
     6.2.1     Deposits of PILOT Payment/Tax Funds...........................60
     6.2.2     Release of PILOT Payment/Tax Funds............................60
Section 6.3    Insurance Funds...............................................60
     6.3.1     Deposits of Insurance Funds...................................60
     6.3.2     Release of Insurance Funds....................................61

                                      -iii-
<PAGE>

Section 6.4    Intentionally Omitted.........................................61
Section 6.5    Rollover Funds................................................61
     6.5.1     Deposits of Rollover Funds....................................61
     6.5.2     Release of Rollover Funds.....................................61
Section 6.6    Lease Termination Rollover Funds..............................62
     6.6.1     Deposits of Rollover Funds....................................62
     6.6.2     Release of Lease Termination Rollover Funds...................62
Section 6.7    Intentionally Omitted.........................................63
Section 6.8    Application of Reserve Funds..................................63
Section 6.9    Security Interest in Reserve Funds............................63
     6.9.1     Grant of Security Interest....................................63
     6.9.2     Income Taxes..................................................63
     6.9.3     Prohibition Against Further Encumbrance.......................64
Section 6.10   Letters of Credit.............................................64
     6.10.1    Delivery of Letters of Credit.................................64
Section 6.11   Provisions Regarding Letters of Credit........................64
     6.11.1    Security for Debt.............................................64
     6.11.2    Additional Rights of Lender...................................65

VII.  PROPERTY MANAGEMENT

Section 7.1    The Management Agreement......................................65
Section 7.2    Prohibition Against Termination or Modification...............66
Section 7.3    Replacement of Manager........................................66

VIII. PERMITTED TRANSFERS

Section 8.1    Intentionally Omitted.........................................66
Section 8.2    Permitted Transfers...........................................66

IX.   SALE AND SECURITIZATION OF MORTGAGE

Section 9.1    Sale of Mortgage and Securitization...........................69
Section 9.2    Securitization Indemnification................................72

X.    DEFAULTS

Section 10.1   Event of Default..............................................74
Section 10.2   Remedies......................................................76
Section 10.3   Right to Cure Defaults........................................77
Section 10.4   Remedies Cumulative...........................................78

XI.   MISCELLANEOUS

Section 11.1   Successors and Assigns........................................78
Section 11.2   Lender's Discretion...........................................78

                                      -iv-
<PAGE>

Section 11.3   Governing Law.................................................78
Section 11.4   Modification, Waiver in Writing...............................80
Section 11.5   Delay Not a Waiver............................................80
Section 11.6   Notices.......................................................81
Section 11.7   Trial by Jury.................................................82
Section 11.8   Headings......................................................82
Section 11.9   Severability..................................................82
Section 11.10  Preferences...................................................82
Section 11.11  Waiver of Notice..............................................82
Section 11.12  Remedies of Borrower..........................................83
Section 11.13  Expenses; Indemnity...........................................83
Section 11.14  Schedules Incorporated........................................84
Section 11.15  Offsets, Counterclaims and Defenses...........................84
Section 11.16  No Joint Venture or Partnership; No Third Party
               Beneficiaries.................................................84
Section 11.17  Publicity.....................................................85
Section 11.18  Waiver of Marshalling of Assets...............................85
Section 11.19  Waiver of Offsets/Defenses/Counterclaims......................85
Section 11.20  Conflict; Construction of Documents; Reliance.................85
Section 11.21  Brokers and Financial Advisors................................86
Section 11.22  Exculpation...................................................86
Section 11.23  Prior Agreements..............................................88
Section 11.24  Servicer......................................................88
Section 11.25  Joint and Several Liability...................................89
Section 11.26  Creation of Security Interest.................................89
Section 11.27  Assignments and Participations................................89
Section 11.28  Set-Off.......................................................89
Section 11.29  Partial Release - Expansion...................................90
Section 11.30  Kansas Provision..............................................94

                                    SCHEDULES

Schedule I    -  Rent Roll
Schedule II   -  Intentionally Omitted
Schedule III  -  Organizational Chart
Schedule IV   -  Form of Subordination, Non-Disturbance and Attornment Agreement
Schedule V    -  Exceptions to Representations and Warranties in Section 3.1.22
Schedule VI   -  Interest Rate Cap Confirmation
Schedule VII  -  Form of Section 2.5 Certificate
Schedule VIII -  Expansion Parcel

                                       -v-
<PAGE>

                                 LOAN AGREEMENT

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

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

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

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

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

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

      I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION

      Section 1.1 Definitions.

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

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

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

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

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

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

                                      -1-
<PAGE>

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

      "Applicable  Interest  Rate"  shall mean  3.17% per annum for the  initial
Interest  Period and  thereafter  either (i) LIBOR Interest Rate plus the Spread
with respect to any period when the Loan is a LIBOR Loan or (ii) the  Substitute
Rate plus the  Substitute  Spread with  respect to any period when the Loan is a
Substitute Rate Loan.

      "Applicable  Lending Office" shall mean the "lending office" of Lender (or
of an Affiliate of Lender) located at the address set forth in the  introductory
paragraph  hereof or such other  office of Lender (or of an Affiliate of Lender)
as Lender may from time to time  specify to  Borrower as the office by which the
Loan is to be made and/or maintained.

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

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

      "Assignment of Protection Agreement" shall mean that certain Assignment of
Interest Rate Protection  Agreement of even date herewith  between  Borrower and
Lender and acknowledged by the Counterparty and any other Assignment of Interest
Rate Protection Agreement hereafter delivered.

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

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

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

      "Borrower"  shall  mean GM  Olathe,  LLC,  a  Delaware  limited  liability
company, together with its permitted successors and permitted assigns.

      "Breakage Costs" shall have the meaning set forth in Section 2.2.3(f).

      "Business  Day" shall mean any day other  than a  Saturday,  a Sunday or a
legal holiday on which national  banks are not open for general  business in (i)
the State of New York,

                                      -2-
<PAGE>

(ii) the state where the  corporate  trust office of the Trustee is located,  or
(iii) the state where the servicing offices of the Servicer are located.

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

      "Capped LIBOR Rate" shall mean 6.0%.

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

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

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

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

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

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

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

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

      "Counterparty"  shall mean (a) the  counterparty  under the Interest  Rate
Protection  Agreement  or  (b) a  Person  that  guarantees  such  counterparty's
obligations under the Interest Rate Protection  Agreement or otherwise  provides
to  such  counterparty   credit  support   acceptable  to  Lender  or,  after  a
Securitization,  the Rating  Agencies,  provided,  however,  that such guarantor
shall be deemed the  "Counterparty"  for so long as the long-term  credit rating
issued by

                                      -3-
<PAGE>

the Rating Agencies to such guarantor is better than the long-term credit rating
of the actual counterparty under the Interest Rate Protection Agreement.

      "Debt" shall mean the  outstanding  principal  amount of the Loan together
with all interest accrued and unpaid thereon (including, without limitation, any
interest  that  would  accrue on the  outstanding  principal  amount of the Loan
through and including the end of any applicable  Interest  Period,  even if such
Interest Period extends beyond any applicable  Monthly Payment Date,  Prepayment
Date or the Maturity Date) and all other sums  (including,  without  limitation,
the Spread Maintenance  Premium and any Breakage Costs) due to Lender in respect
of the Loan under the Note,  this  Agreement,  the Mortgage,  the  Environmental
Indemnity or any other Loan Document.

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

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

      "Debt  Service  Coverage  Ratio Event"  shall mean,  as of the end of each
calendar quarter, if the Debt Service Coverage Ratio shall be less than 1.30:1.

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

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

      "Determination Date" shall mean, with respect to each Interest Period, the
date that is two (2) London  Business Days prior to the fifteenth  (15th) day of
the calendar month in which such Interest Period commences;  provided,  however,
that Lender shall have the right to change the  Determination  Date to any other
day upon  notice to Borrower  (in which  event such change  shall then be deemed
effective)  and, if  requested by Lender,  Borrower  shall  promptly  execute an
amendment to this Agreement to evidence such change.

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

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

      "Eligible  Account" shall mean an  identifiable  account which is separate
from all other  funds  held by the  holding  institution  that is either  (a) an
account or  accounts  maintained  with a federal or  state-chartered  depository
institution  or trust  company which  complies  with the  definition of Eligible
Institution or (b) a segregated  trust account or accounts  maintained  with the
corporate  trust   department  of  a  federal  or  state  chartered   depository
institution or trust company

                                      -4-
<PAGE>

acting  in its  fiduciary  capacity  which,  in the  case of a  state  chartered
depository institution or trust company is subject to regulations  substantially
similar to 12 C.F.R.  ss.9.10(b),  having in either case a combined  capital and
surplus of at least  $50,000,000  and subject to  supervision  or examination by
federal and state  authority.  An Eligible  Account  will not be  evidenced by a
certificate of deposit, passbook or other instrument.

      "Eligible  Institution" shall mean a federal or state chartered depository
institution  or  trust  company  insured  by  the  Federal   Deposit   Insurance
Corporation  the short term  unsecured debt  obligations or commercial  paper of
which  are rated at least A-1 by S&P,  P-1 by  Moody's  and F-1+ by Fitch in the
case of accounts in which funds are held for thirty (30) days or less or, in the
case of  Letters  of Credit or  accounts  in which  funds are held for more than
thirty (30) days, the long term unsecured debt obligations of which are rated at
least "AA" by Fitch and S&P and "Aa2" by Moody's.

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

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

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

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

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

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

      "Excluded Taxes" shall have the meaning set forth in Section 2.5(f).

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

      "Expansion  Parcel"  shall mean an area of the Property  cross-hatched  on
Schedule VIII hereto and marked as "Release  Parcel" (or such lesser area within
such  cross-hatched  area  necessary  to  construct  the  proposed  improvements
described  in  Section  11.29  hereof and to provide  parking  adjacent  to such
improvements necessary for the use and operation of such improvements).

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

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

                                      -5-
<PAGE>

      "Fitch" shall mean Fitch, Inc.

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

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

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

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

      "Ground Lease" shall mean that certain Lease Agreement dated as of June 1,
1996 between the City of Olathe,  Kansas,  a Kansas  municipal  corporation,  as
landlord,  and Olathe Mall LLC, a Colorado limited liability company, as tenant,
a memorandum of which was recorded with the Register of Deeds in Johnson County,
Kansas in Liber 4924, page 375; as assigned by that certain  Assignment of Lease
Agreement  dated  as of  June 1,  1996 by the  City  of  Olathe,  Kansas  to The
Huntington National Bank, a national banking association,  and recorded with the
Register of Deeds in Johnson County,  Kansas in Liber 4924, page 381; as further
assigned by that certain  Assignment of Lease  Agreement dated November 26, 1996
by Olathe Mall LLC to Great Plains Metromall,  LLC, a Delaware limited liability
company,  and recorded with the Register of Deeds in Johnson  County,  Kansas in
Book 5054 at Page 271;  as  further  assigned  by that  certain  Assignment  And
Assumption  Of  Lease  Agreement  dated  as of June 9,  2004,  by  Great  Plains
Metromall,  LLC to GM Mezz, LLC, a Delaware limited  liability  company;  and as
further  assigned by that certain  Assignment And Assumption Of Lease  Agreement
dated as of June 9, 2004, by GM Mezz, LLC to Borrower.

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

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

                                      -6-
<PAGE>

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

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

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

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

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

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

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

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

      "Interest  Period" shall mean (a) for the first interest period hereunder,
(i) if the  Closing  Date  occurs on or before  the  fourteenth  (14th) day of a
calendar  month,  the period  commencing  on the Closing Date and ending on (and
including) the fourteenth  (14th) day of the calendar month in which the Closing
Date  occurs,  and (ii) if the  Closing  Date  occurs on or after the  fifteenth
(15th) day of a calendar  month,  the period  commencing on the Closing Date and
ending on (and  including) the fourteenth  (14th) day of the following  calendar
month and (b) for each interest period thereafter  commencing June 15, 2004, the
period  commencing on the fifteenth (15th) day of each calendar month and ending
on (and  including) the fourteenth  (14th) day of the following  calendar month.
Each Interest  Period as set forth in clause (b) above shall be a full month and
shall  not be  shortened  by  reason  of any  payment  of the Loan  prior to the
expiration of such Interest Period.

      "Interest Rate Protection  Agreement" shall mean one or more interest rate
caps  (together  with the  schedules  relating  thereto)  in form and  substance
reasonably  satisfactory to Lender, with a confirmation from the Counterparty in
the form  attached  hereto as Schedule  VI,  between  Borrower  and,  subject to
Section 4.1.11, a Counterparty reasonably acceptable to

                                      -7-
<PAGE>

Lender with a Minimum  Counterparty  Rating,  and all amendments,  restatements,
replacements, supplements and modifications thereto.

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

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

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

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

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

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

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

      "Lender's Notice" shall have the meaning set forth in Section 2.2.3(b).

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

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

                                      -8-
<PAGE>

      "LIBOR"  shall  mean,  with  respect  to each  Interest  Period,  the rate
(expressed as a percentage per annum and rounded  upward,  if necessary,  to the
next nearest 1/1000 of 1%) for deposits in U.S. dollars, for a one-month period,
that appears on Telerate Page 3750 (or the successor  thereto) as of 11:00 a.m.,
London time, on the related  Determination Date. If such rate does not appear on
Telerate Page 3750 as of 11:00 a.m.,  London time, on such  Determination  Date,
LIBOR  shall  be the  arithmetic  mean  of the  offered  rates  (expressed  as a
percentage per annum) for deposits in U.S.  dollars for a one-month  period that
appear on the Reuters  Screen Libor Page as of 11:00 a.m.,  London time, on such
Determination  Date, if at least two such offered rates so appear. If fewer than
two such offered rates appear on the Reuters Screen Libor Page as of 11:00 a.m.,
London time,  on such  Determination  Date,  Lender shall  request the principal
London Office of any four major reference banks in the London  interbank  market
selected by Lender to provide  such bank's  offered  quotation  (expressed  as a
percentage per annum) to prime banks in the London interbank market for deposits
in U.S.  dollars for a one-month  period as of 11:00 a.m.,  London time, on such
Determination Date for the then outstanding  principal amount of the Loan. If at
least two such offered quotations are so provided, LIBOR shall be the arithmetic
mean of such  quotations.  If fewer than two such  quotations  are so  provided,
Lender shall  request any three major banks in New York City  selected by Lender
to provide such bank's rate  (expressed as a percentage  per annum) for loans in
U.S.   dollars  to  leading   European  banks  for  a  one-month  period  as  of
approximately  11:00 a.m.,  New York City time on the  applicable  Determination
Date for the then outstanding principal amount of the Loan. If at least two such
rates are so provided,  LIBOR shall be the arithmetic mean of such rates.  LIBOR
shall be  determined by Lender or its agent and at  Borrower's  request,  Lender
shall provide Borrower with the basis for its determination.

      "LIBOR  Interest Rate" shall mean with respect to each Interest Period the
quotient  of (i) LIBOR  applicable  to the  Interest  Period  divided  by (ii) a
percentage  equal  to 100%  minus  the  Reserve  Requirement  applicable  to the
Interest Period.

      "LIBOR  Loan"  shall  mean the Loan at any  time in which  the  Applicable
Interest Rate is calculated at LIBOR Interest Rate plus the Spread in accordance
with the provisions of Article II hereof.

      "Lien"   shall  mean  any   mortgage,   deed  of  trust,   lien,   pledge,
hypothecation,  assignment,  security interest, or any other encumbrance, charge
or transfer of, on or affecting the Property or any portion thereof or Borrower,
or any interest therein, including,  without limitation, any conditional sale or
other title retention  agreement,  any financing lease having  substantially the
same  economic  effect as any of the  foregoing,  the  filing  of any  financing
statement,   and   mechanic's,   materialmen's   and  other  similar  liens  and
encumbrances.

      "Loan"  shall  mean the loan in the  original  principal  amount of Thirty
Million and No/100 Dollars  ($30,000,000.00) made by Lender to Borrower pursuant
to this Agreement.

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

                                      -9-
<PAGE>

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

      "London Business Day" shall mean any day other than a Saturday,  Sunday or
any other day on which commercial banks in London, England or New York, New York
are not open for business.

      "Major  Lease" shall mean any Lease  covering more than 10,000 square feet
at the Property;  provided, however, that with respect to the use of the term in
Section  5.3.2(a)(x) only, "Major Lease" shall mean any Lease covering more than
30,000 square feet at the Property.

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

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

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

      "Material  Agreements"  means each contract and agreement  relating to the
ownership, management, development, use, operation, leasing, maintenance, repair
or  improvement  of the Property,  other than the  Management  Agreement and the
Leases,  under  which  there is an  obligation  of  Borrower  to pay  more  than
$500,000.00 per annum.

      "Maturity  Date"  shall  mean June 9, 2006 or such other date on which the
final  payment of  principal  of the Note  becomes due and payable as therein or
herein  provided,  whether at such  stated  maturity  date,  by  declaration  of
acceleration, or otherwise.

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

      "Minimum  Counterparty  Rating"  shall mean (a) a short term credit rating
from S&P and Fitch of at least  "A-1"  and (b)  either  (i) a long  term  credit
rating from  Moody's of at least  "Aa3" or (ii) a long term  credit  rating from
Moody's of at least "A1" and a short term credit rating from Moody's of "P-1".

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

                                      -10-
<PAGE>

      "Monthly  Principal Payment Amount" shall mean (a) prior to the occurrence
of a Principal  Payment  Event,  $-0- and (b) from and after the occurrence of a
Principal  Payment  Event,  a constant  monthly  payment  in an amount  equal to
$166,666.67.

      "Monthly  Payment  Date" shall mean the ninth (9th)  calendar  day of each
calendar  month  during  the term of the Loan and if such day is not a  Business
Day, then the Business Day immediately preceding such day, commencing on July 9,
2004 and continuing to and including the Maturity Date.

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

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

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

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

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

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

      "Non-Excluded Taxes" shall have the meaning set forth in Section 2.5(a).

      "Non-U.S.  Corporate  Lender"  shall have the meaning set forth in Section
2.5(f).

      "Note" shall have the meaning set forth in Section 2.1.3

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

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

      "Operating  Expenses"  shall mean all costs and  expenses  relating to the
operation,  maintenance  and  management  of the  Property,  including,  without
limitation,  utilities, repairs and maintenance,  insurance,  property taxes and
assessments,  advertising expenses,  payroll and related taxes,  equipment lease
payments,  a  management  fee  equal to the  greater  of 4% of  annual  base and
percentage  rents or the  actual  management  fee,  $150,000.00  per annum  with
respect to capital costs,  $1.00 per rentable square foot per annum with respect
to tenant rollover expenses for portions of the

                                      -11-
<PAGE>

Improvements  not subject to Major Leases and $0.75 per rentable square foot per
annum with respect to tenant rollover  expenses for portions of the Improvements
subject  to  Major  Leases,   but   excluding   actual   Capital   Expenditures,
depreciation,  amortization,  Extraordinary Expenses and deposits required to be
made to the Reserve  Funds;  provided,  however such costs and expenses shall be
subject to adjustment by Lender to normalize such costs and expenses.

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

      "Other Taxes" shall have the meaning set forth in Section 2.5(b).

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

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

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

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

      (i) a Qualified Transferee;

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

      (iii) Sponsor.

      "Permitted Prepayment Date" shall mean March 9, 2005.

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

      "Physical  Conditions  Report" shall mean that certain Property  Condition
Report dated April 22, 2004 prepared by IVI International, Inc.

      "PILOT Agreement" shall mean that certain  Performance  Agreement dated as
of  March 1,  1993  between  the  City of  Olathe,  Kansas,  a Kansas  municipal
corporation,  and Southpark  Plaza,  Ltd., a Colorado  limited  partnership,  as
amended by that certain First  Amendment to Performance  Agreement dated June 1,
1996 between the City of Olathe,  Kansas,  a Kansas municipal  corporation,  and
Olathe Mall LLC, a Colorado limited liability company,

                                      -12-
<PAGE>

pursuant to which  Borrower is obligated to make payments in lieu of real estate
taxes for the Property.

      "PILOT  Payments"  shall  mean the  payments  payable by  Borrower  to the
Trustee (as such term is defined in the PILOT  Agreement) for the benefit of the
City of Olathe,  Kansas, a Kansas municipal  corporation,  under and pursuant to
the PILOT Agreement.

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

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

      "Pledge Agreement" shall mean that certain Bond Pledge Agreement,  of even
date herewith, by and between Borrower, Lender and The Huntington National Bank.

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

      "Preliminary  Expansion  Documents"  shall have the  meaning  set forth in
Section 11.29.

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

      "Prepayment  Fee" shall mean,  with respect to any prepayment  received by
Lender from and after the Permitted  Prepayment Date through  September 8, 2005,
an amount equal to $300,000.00.

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

      "Principal Payment Event" shall mean, after June 9, 2007, as of the end of
each  calendar  quarter,  if the  Underwritable  Cash Flow for the  twelve  (12)
calendar month period  immediately  preceding the date of  calculation  shall be
less than $4,000,000.00.

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

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

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

                                      -13-
<PAGE>

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

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

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

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

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

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

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

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

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

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

      "Regulation  D" shall mean  Regulation  D of the Board of Governors of the
Federal  Reserve System from time to time in effect,  including any successor or
other Regulation

                                      -14-
<PAGE>

or  official  interpretation  of said  Board of  Governors  relating  to reserve
requirements applicable to member banks of the Federal Reserve System.

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

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

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

      "Required Amount" shall mean an amount calculated on an annual basis which
is equal to the sum of  $150,000.00  multiplied by a fraction,  the numerator of
which shall be the CPI level  ninety (90) days prior to the renewal  date of the
applicable  insurance policy and the denominator of which shall be the CPI level
on the Closing  Date.  The Required  Amount,  as adjusted by the CPI ninety (90)
days prior to the renewal date of the applicable  insurance policy,  shall apply
only to the next  succeeding  renewal of any  insurance  policy  required  under
Section 5.1.1(a)(xi).

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

      "Reserve  Requirements"  means with  respect to any Interest  Period,  the
maximum rate of all reserve  requirements  (including,  without limitation,  all
basic, marginal, emergency,  supplemental,  special or other reserves and taking
into account any  transitional  adjustments or other schedule changes in reserve
requirements during the Interest Period) which are imposed under Regulation D on
eurocurrency  liabilities  (or against any other category of  liabilities  which
includes  deposits  by  reference  to which LIBOR is  determined  or against any
category of  extensions  of credit or other  assets  which  includes  loans by a
non-United States office of a depository  institution to United States residents
or loans  which  charge  interest  at a rate  determined  by  reference  to such
deposits) during the Interest Period and which are applicable to member banks of
the Federal  Reserve  System with deposits  exceeding one billion  dollars,  but
without  benefit  or credit of  proration,  exemptions  or  offsets  that  might
otherwise be available from time to time under  Regulation D. The  determination
of the Reserve  Requirements shall be based on the assumption that Lender funded
100% of the Loan in the interbank  eurodollar market. In the event of any change
in the rate of such Reserve  Requirements under Regulation D during the Interest
Period,  or any  variation in such  requirements  based upon amounts or kinds of
assets or liabilities,  or other factors,  including,  without  limitation,  the
imposition of Reserve Requirements, or differing Reserve Requirements, on one or
more but not all of the holders of the Loan or any participation therein, Lender
may use any  reasonable  averaging  and/or  attribution  methods  which it deems
appropriate and practical for determining the rate of such Reserve  Requirements
which shall be used in the  computation  of the Reserve  Requirements.  Lender's
computation of same shall be final absent manifest error.

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

                                      -15-
<PAGE>

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

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

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

      "Section 2.5 Taxes" shall have the meaning set forth in Section 2.5.

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

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

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

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

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

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

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

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

      "Spread" shall mean 200 basis points.

      "Spread  Maintenance  Premium" shall mean, in connection with a prepayment
of all or any portion of the outstanding  principal balance of the Loan pursuant
to Section 2.3.3 or Section 2.4.3 hereof,  an amount equal to the present value,
discounted  at LIBOR on the most recent  Determination  Date with respect to any
period  when the Loan is a LIBOR Loan (or,  with  respect to any period when the
Loan is a  Substitute  Rate Loan,  discounted  at an  interest  rate that Lender
believes, in its judgment, would equal LIBOR on such Determination Date if LIBOR
was then  available),  of all future  installments  of interest which would have
been due hereunder through and including the end of the Interest Period in which
the  Permitted  Prepayment  Date  occurs,  on the  portion  of  the  outstanding
principal  balance of the Loan  being  prepaid  as if  interest  accrued on such
portion of the  principal  balance  being  prepaid at an interest rate per annum
equal to the Spread.  The Spread  Maintenance  Premium  shall be  calculated  by
Lender and shall be final absent manifest error.

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

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

      "Substitute Rate" shall have the meaning set forth in Section 2.2.3(b).

                                      -16-
<PAGE>

      "Substitute  Rate  Loan"  shall  mean the  Loan at any  time in which  the
Applicable  Interest  Rate  is  calculated  at  the  Substitute  Rate  plus  the
Substitute Spread in accordance with the provisions of Article II hereof.

      "Substitute Spread" shall have the meaning set forth in Section 2.2.3(b).

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

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

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

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

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

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

      "Trigger  Period"  shall  mean a  period  commencing  on the  first  (1st)
Business Day after a Trigger Event has occurred through the first (1st) Business
Day after the  related  Event of Default no longer  exists or the  related  Debt
Service Coverage Ratio Event has not existed for a period of two (2) consecutive
calendar quarters, as applicable.

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

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

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

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

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

                                      -17-
<PAGE>

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

      Section 1.2 Principles of Construction.

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

      II. THE LOAN

      Section 2.1 The Loan.

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

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

            2.1.3  The  Note.  The  Loan  shall  be  evidenced  by that  certain
Promissory Note of even date herewith,  in the stated principal amount of Thirty
Million and No/100 Dollars ($30,000,000.00)  executed by Borrower and payable to
the  order of  Lender  in  evidence  of the Loan (as the same may  hereafter  be
amended,  supplemented,  restated, increased, extended or consolidated from time
to time,  the "Note") and shall be repaid in  accordance  with the terms of this
Agreement and the Note.

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

      Section 2.2 Interest Rate.

            2.2.1  Applicable  Interest  Rate.  Except as herein  provided  with
respect to  interest  accruing at the Default  Rate,  interest on the  principal
balance of the Loan  outstanding from time to time shall accrue from the Closing
Date up to and including the Maturity Date (including,  without limitation,  all
interest  that would  accrue on the  outstanding  principal  balance of the Loan
through the end of the Interest  Period  during  which the Maturity  Date occurs
(even if such  period  extends  beyond  the  Maturity  Date)) at the  Applicable
Interest  Rate.  Interest  on the  outstanding  principal  balance  of the  Loan
existing on the commencement of

                                      -18-
<PAGE>

an Interest Period shall accrue for the entire Interest Period and shall be owed
by Borrower for the entire Interest  Period  regardless of whether any principal
portion of the Loan is repaid prior to the expiration of such Interest Period.

            2.2.2 Interest  Calculation.  Interest on the outstanding  principal
balance of the Loan shall be calculated by multiplying  (a) the actual number of
days  elapsed  in the period  for which the  calculation  is being made by (b) a
daily  rate  based on a three  hundred  sixty  (360)  day  year  (that  is,  the
Applicable  Interest Rate or the Default Rate, as then applicable,  expressed as
an annual rate divided by 360) by (c) the outstanding principal balance.

            2.2.3 Determination of Interest Rate.

      (a) Any change in the rate of  interest  hereunder  due to a change in the
Applicable  Interest  Rate shall  become  effective as of the first day on which
such  change in the  Applicable  Interest  Rate  shall  become  effective.  Each
determination by Lender of the Applicable  Interest Rate shall be conclusive and
binding for all purposes, absent manifest error.

      (b) In the event that Lender shall have  determined  (which  determination
shall be conclusive  and binding upon Borrower  absent  manifest  error) that by
reason of circumstances  affecting the interbank eurodollar market, adequate and
reasonable  means do not exist for  ascertaining  LIBOR,  then Lender shall,  by
notice  to  Borrower  ("Lender's  Notice"),  which  notice  shall  set  forth in
reasonable detail such circumstances,  establish the Applicable Interest Rate at
Lender's then customary  spread (the "Substitute  Spread"),  taking into account
the size of the Loan and the  creditworthiness  of  Borrower,  above a published
index used for  variable  rate loans as  reasonably  determined  by Lender  (the
"Substitute Rate").

      (c) If,  pursuant  to the  terms  of this  Agreement,  the  Loan  has been
converted  to  a  Substitute  Rate  Loan  and  Lender  shall  determine   (which
determination  shall be  conclusive  and binding upon Borrower  absent  manifest
error) that the event(s) or  circumstance(s)  which resulted in such  conversion
shall no longer be applicable, Lender shall give notice thereof to Borrower, and
the  Substitute  Rate Loan  shall  automatically  convert to a LIBOR Loan on the
effective date set forth in such notice.  Notwithstanding  any provision of this
Agreement to the contrary, in no event shall Borrower have the right to elect to
convert a LIBOR Loan to a Substitute Rate Loan.

      (d)  If  any   requirement  of  law  or  any  change  therein  or  in  the
interpretation  or  application  thereof,  shall  hereafter make it unlawful for
Lender to make or  maintain  a LIBOR  Loan as  contemplated  hereunder,  (i) the
obligation of Lender hereunder to make a LIBOR Loan shall be cancelled forthwith
and (ii) Lender may give Borrower a Lender's Notice, establishing the Applicable
Interest Rate at the Substitute Rate plus the Substitute  Spread,  in which case
the  Applicable  Interest Rate shall be a rate equal to the  Substitute  Rate in
effect from time to time plus the Substitute  Spread. In the event the condition
necessitating  the  cancellation  of  Lender's  obligation  to make a LIBOR Loan
hereunder  shall cease,  Lender shall promptly notify Borrower of such cessation
and the Loan shall resume its characteristics as a LIBOR Loan in accordance with
the terms  herein  from and after the  first  day of the  Interest  Period  next
following such cessation.  Borrower  hereby agrees promptly to pay Lender,  upon
demand,   any  additional   amounts  necessary  to  compensate  Lender  for  any
out-of-pocket costs incurred by Lender in

                                      -19-
<PAGE>

making any  conversion in accordance  with this  Agreement,  including,  without
limitation,  any interest or fees payable by Lender to lenders of funds obtained
by it in order to make or maintain the LIBOR Loan hereunder.  Lender's notice of
such costs,  as certified to Borrower,  shall be set forth in reasonable  detail
and Lender's calculation shall be conclusive absent manifest error.

      (e) In the  event  that any  change  in any  requirement  of law or in the
interpretation or application  thereof, or compliance by Lender with any request
or directive  (whether or not having the force of law) hereafter issued from any
central bank or other Governmental Authority:

            (i) shall  hereafter  have the effect of reducing the rate of return
      on Lender's  capital (other than as a result of an increase in taxes) as a
      consequence  of its  obligations  hereunder  to a level  below  that which
      Lender could have  achieved but for such  adoption,  change or  compliance
      (taking  into  consideration  Lender's  policies  with  respect to capital
      adequacy) by any amount deemed by Lender to be material;

            (ii) shall hereafter impose, modify, increase or hold applicable any
      reserve,  special deposit,  compulsory loan or similar requirement against
      assets held by, or deposits or other liabilities in or for the account of,
      advances  or  loans  by,  or  other  credit  extended  by,  or  any  other
      acquisition  of funds by,  any  office of  Lender  which is not  otherwise
      included  in the  determination  of the rate  hereunder  (other  than as a
      result of an increase in taxes); or

            (iii) shall  hereafter  impose on Lender any other condition and the
      result  of any of the  foregoing  is to  increase  the cost to  Lender  of
      making, renewing or maintaining loans or extensions of credit or to reduce
      any amount receivable hereunder;

then, in any such case,  Borrower  shall promptly pay Lender,  upon demand,  any
additional  amounts  necessary to compensate  Lender for such additional cost or
reduced  amount  receivable  which Lender deems to be material as  determined by
Lender;  provided,  however,  that  Borrower  shall not be  required  under this
Section 2.2.3 to pay Lender  additional  amounts for additional costs or reduced
amounts  receivable that are attributable to an increase in taxes imposed on the
Lender.  If Lender becomes entitled to claim any additional  amounts pursuant to
this Section  2.2.3(f),  Borrower  shall not be required to pay same unless they
are the result of  requirements  imposed  generally on lenders similar to Lender
and not the result of some specific  reserve or similar  requirement  imposed on
Lender as a result of Lender's special circumstances. If Lender becomes entitled
to claim any additional amounts pursuant to this Section 2.2.3(f),  Lender shall
provide  Borrower with not less than thirty (30) days written notice  specifying
in reasonable  detail the event by reason of which it has become so entitled and
the additional  amount required to fully  compensate  Lender for such additional
cost or reduced  amount.  A certificate  as to any  additional  costs or amounts
payable pursuant to the foregoing sentence,  executed by an authorized signatory
of Lender and submitted by Lender to Borrower shall be conclusive in the absence
of manifest  error.  This  provision  shall survive  payment of the Note and the
satisfaction  of all other  obligations of Borrower under this Agreement and the
Loan Documents.

                                      -20-
<PAGE>

      (f) Borrower  agrees to indemnify  Lender and to hold Lender harmless from
any loss or expense (other than consequential and punitive damages) which Lender
sustains or incurs as a consequence of (i) any default by Borrower in payment of
the principal of or interest on a LIBOR Loan, including, without limitation, any
such loss or expense  arising from interest or fees payable by Lender to lenders
of funds  obtained by it in order to maintain a LIBOR Loan  hereunder,  (ii) any
prepayment  (whether voluntary or mandatory) of the LIBOR Loan on a day that (A)
is not a Monthly  Payment Date or (B) is a Monthly  Payment Date if Borrower did
not give the prior written notice of such  prepayment  required  pursuant to the
terms of this Agreement,  including,  without  limitation,  such loss or expense
arising from interest or fees payable by Lender to lenders of funds  obtained by
it in order to maintain the LIBOR Loan hereunder and (iii) the  conversion  (for
any reason  whatsoever,  whether  voluntary or  involuntary)  of the  Applicable
Interest Rate to the Substitute Rate plus the Substitute  Spread with respect to
any  portion  of the  outstanding  principal  amount  of the Loan  then  bearing
interest at a rate other than the Substitute Rate plus the Substitute  Spread on
a date  other  than the  first day of an  Interest  Period,  including,  without
limitation,  such loss or expenses  arising  from  interest  or fees  payable by
Lender to  lenders  of funds  obtained  by it in order to  maintain a LIBOR Loan
hereunder  (the amounts  referred to in clauses  (i),  (ii) and (iii) are herein
referred to  collectively  as the  "Breakage  Costs").  Whenever in this Section
2.2.3 the term  "interest or fees payable by Lender to lenders of funds obtained
by it" is used and no such funds were actually  obtained  from such lenders,  it
shall include interest or fees which would have been payable by Lender if it had
obtained funds from lenders in order to maintain a LIBOR Loan hereunder.  Lender
will  provide to  Borrower a statement  detailing  such  Breakage  Costs and the
calculation thereof.

      (g) The provisions of this Section 2.2.3 shall survive payment of the Note
in full and the  satisfaction  of all other  obligations  of Borrower under this
Agreement and the other Loan Documents.

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

      Section 2.3 Loan Payments.

            2.3.1 Payment Before Maturity Date. Borrower shall make a payment to
Lender of interest only on the Closing Date for the initial Interest Period.  On
the

                                      -21-
<PAGE>

Monthly  Payment Date occurring in July,  2004 and on each Monthly  Payment Date
thereafter to and including the Maturity Date,  Borrower shall make a payment to
Lender of interest accruing hereunder during the entire Interest Period in which
such Monthly  Payment Date occurs,  calculated  in the manner set forth  herein.
Together with each monthly payment of interest, Borrower shall make a payment to
Lender of principal in an amount equal to the Monthly  Principal Payment Amount,
if any.

      2.3.2 Payment on Maturity  Date.  (a) Borrower  shall pay to Lender on the
Maturity Date the  outstanding  principal  balance of the Loan,  all accrued and
unpaid  interest and all other  amounts due  hereunder  and under the Note,  the
Mortgage  and the other  Loan  Documents,  including,  without  limitation,  all
interest  that would  accrue on the  outstanding  principal  balance of the Loan
through and including the end of the Interest  Period in which the Maturity Date
occurs (even if such Interest Period extends beyond the Maturity Date).

      (b) Borrower  will have three (3) options to extend the  Maturity  Date of
the Loan for  consecutive  one (1) year periods.  In order to exercise the first
such  extension  right,  Borrower shall deliver to Lender written notice of such
extension on or before May 9, 2006 and, upon giving of such notice of extension,
and  subject  to the  satisfaction  of the  conditions  set forth  below in this
Section  2.3.2(b) on or before June 9, 2006, the Maturity Date as theretofore in
effect will be extended  to June 9, 2007.  In order to exercise  the second such
extension  right,  Borrower  shall  deliver  to  Lender  written  notice of such
extension  on or  before  May 9,  2007 and,  upon the  giving of such  notice of
extension,  and subject to the satisfaction of the conditions set forth below in
this  Section  2.3.2(b)  on or  before  June  9,  2007,  the  Maturity  Date  as
theretofore in effect will be extended to June 9, 2008. In order to exercise the
second such extension right,  Borrower shall deliver to Lender written notice of
such  extension on or before May 9, 2008 and,  upon the giving of such notice of
extension,  and subject to the satisfaction of the conditions set forth below in
this  Section  2.3.2(b)  on or  before  June  9,  2008,  the  Maturity  Date  as
theretofore  in effect will be extended to June 9, 2009. The Maturity Date shall
be extended  pursuant to  Borrower's  notices as  aforesaid,  provided  that the
following  conditions  are  satisfied:  (i) no  Event  of  Default  shall  be in
existence  either  at the  time  of  Borrower's  notice  or at the  then-current
Maturity  Date and (ii) Borrower  shall enter into an Interest  Rate  Protection
Agreement through the term of the applicable  extension under the same terms and
conditions of the initial  Interest Rate  Protection  Agreement  (including  its
LIBOR strike price)  entered into in connection  with the Loan and shall provide
an  Assignment  of  Protection  Agreement  with  respect  thereto in the form of
Assignment of Protection  Agreement,  together with an opinion of counsel to the
counterparty with respect thereto reasonably acceptable to Lender.

            2.3.3  Interest Rate and Payment after  Default.  In the event that,
and for so long as, any Event of Default shall have occurred and be  continuing,
the  outstanding  principal  balance of the Loan shall  accrue  interest  at the
Default Rate, calculated from the date the Default occurred which led to such an
Event of Default without regard to any grace or cure periods  contained  herein.
If all or any  part  of the  principal  amount  of  the  Loan  is  prepaid  upon
acceleration  of the Loan  following the occurrence of an Event of Default prior
to the Permitted  Prepayment Date,  Borrower shall be required to pay Lender, in
addition  to all  other  amounts  then  payable  hereunder  (including,  without
limitation,  (i) in the event  that such  prepayment  is  received  on a Monthly
Payment Date,  interest accruing on such amount calculated through and including
the end of the  Interest  Period in which such Monthly  Payment Date occurs,  or
(ii) in

                                      -22-
<PAGE>

the event  that such  prepayment  is  received  on a date  other  than a Monthly
Payment Date,  interest accruing on such amount calculated through and including
the end of the Interest Period in which the next Monthly Payment Date occurs), a
prepayment fee equal to one percent (1%) of the amount of principal being repaid
together with a Spread Maintenance Premium calculated with respect to the amount
of principal being repaid and Breakage Costs.

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

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

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

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

      Section 2.4 Prepayments.

            2.4.1 Voluntary  Prepayments.  Except as otherwise  provided herein,
Borrower shall not have the right to prepay the Loan in whole or in part. On and
after the Permitted  Prepayment Date, Borrower may, provided no Event of Default
has occurred, at its option, prepay the Debt in whole but not in part, provided,
the following conditions are satisfied:

      (a) Borrower shall provide prior written  notice to Lender  specifying the
date upon which the  prepayment  is to be made (the  "Prepayment  Date"),  which
notice shall be delivered to Lender not less than thirty (30) days prior to such
Prepayment Date (or such shorter period of time as may be permitted by Lender in
its sole discretion) and which notice shall be irrevocable;

                                      -23-
<PAGE>

      (b) Borrower shall pay to Lender  simultaneously  with such prepayment the
Prepayment Fee, if any;

      (c) no  prepayment  shall be  permitted  on any  date  during  the  period
commencing on the first  calendar day  immediately  following a Monthly  Payment
Date to, but not  including,  the  Determination  Date in such  calendar  month,
unless consented to by Lender in its sole discretion;

      (d) if  such  prepayment  is  made  on a  Monthly  Payment  Date,  then in
connection  with such  prepayment  Borrower shall pay to Lender,  simultaneously
with such  prepayment,  all interest on the  principal  balance of the Note then
being  prepaid which would have accrued  through the end of the Interest  Period
then in effect  notwithstanding  that such Interest  Period  extends  beyond the
Prepayment Date; and

      (e) if such  prepayment is made on a day other than a Monthly Payment Date
(subject  to the  lockout  period  set  forth  in  clause  (c)  above),  then in
connection  with such  prepayment  Borrower shall pay to Lender,  simultaneously
with such  prepayment,  all interest on the principal  balance of this Note then
being  prepaid which would have accrued  through the end of the Interest  Period
then in effect  notwithstanding  that such Interest  Period  extends  beyond the
Prepayment Date; provided,  however, that if the Prepayment Date is a date on or
after the  Determination  Date in such calendar month and prior to the first day
of the Interest  Period that  commences in such calendar  month,  Borrower shall
also pay to Lender  in  connection  with such  prepayment  all  interest  on the
principal  balance  of this Note then being  prepaid  which  would have  accrued
through the end of the next succeeding  Interest Period. Any prepayment received
by Lender on a date other than a Monthly Payment Date shall be held by Lender as
collateral  security  for the Loan and shall be  applied to the Debt on the next
Monthly Payment Date.

            2.4.2 Mandatory  Prepayments.  On each date on which Lender actually
receives a distribution of Net Proceeds,  and if Lender is not obligated to make
such Net Proceeds  available to Borrower for a Restoration,  Borrower  shall, at
Lender's  option,  prepay the  outstanding  principal  balance of the Note in an
amount equal to one hundred  percent  (100%) of such Net Proceeds  together with
(i) in the event  that such Net  Proceeds  are  received  on or before a Monthly
Payment Date,  interest accruing on such amount calculated through and including
the end of the  Interest  Period in which such Monthly  Payment Date occurs,  or
(ii) in the event that such Net  Proceeds are received on a date after a Monthly
Payment Date,  interest accruing on such amount calculated through and including
the end of Interest  Period in which the next Monthly  Payment Date occurs.  Any
prepayment  received by Lender  pursuant to this  Section  2.4.2 on a date other
than a Monthly  Payment Date shall be held by Lender as collateral  security for
the Loan in an interest  bearing  account,  with such  interest  accruing to the
benefit of Borrower,  and shall be applied by Lender on the next Monthly Payment
Date.

            2.4.3  Prepayments  After  Default.  If after  an Event of  Default,
payment of all or any part of the principal of the Loan is tendered by Borrower,
a purchaser at foreclosure  or any other Person,  such tender shall be deemed an
attempt to circumvent the  prohibition  against  prepayment set forth in Section
2.4.1 and Borrower,  such purchaser at foreclosure or other Person shall pay the
Spread Maintenance  Premium,  in addition to the outstanding  principal balance,
all accrued and unpaid interest (including, without limitation,

                                      -24-
<PAGE>

(a) in the event that such prepayment is received on or before a Monthly Payment
Date,  interest accruing on such amount calculated through and including the end
of the Interest Period in which such Monthly Payment Date occurs,  or (b) in the
event that such  prepayment is received on a date after a Monthly  Payment Date,
interest  accruing on such amount  calculated  through and  including the end of
Interest Period in which the next Monthly Payment Date occurs), a prepayment fee
equal to one percent  (1%) of the amount of  principal  being  repaid,  Breakage
Costs and other amounts payable under the Loan Documents.

      Section 2.5 Taxes.

      (a) Any and all payments by Borrower under or in respect of this Agreement
or any other Loan  Document to which  Borrower is a party shall be made free and
clear of, and without deduction or withholding for or on account of, any and all
present or future taxes, levies, imposts,  deductions,  charges or withholdings,
and all liabilities  (including  penalties,  interest and additions to tax) with
respect thereto, whether now or hereafter imposed, levied,  collected,  withheld
or  assessed  by  any  taxation  authority  or  other   Governmental   Authority
(collectively,  "Section 2.5 Taxes"),  unless required by law. If Borrower shall
be required  under any  applicable  Legal  Requirement to deduct or withhold any
Section 2.5 Taxes from or in respect of any sum  payable  under or in respect of
this  Agreement  or any of the other  Loan  Documents  to  Lender or Agent,  (i)
Borrower shall make all such  deductions and  withholdings in respect of Section
2.5 Taxes,  (ii)  Borrower  shall pay the full  amount  deducted  or withheld in
respect  of  Section  2.5  Taxes to the  relevant  taxation  authority  or other
Governmental Authority in accordance with the applicable Legal Requirement,  and
(iii) the sum payable by Borrower shall be increased as may be necessary so that
after  Borrower and Agent have made all  required  deductions  and  withholdings
(including  deductions and  withholdings  applicable to additional  sums payable
under this Section 2.5) such Lender or such Agent,  as the case may be, receives
an amount  equal to the sum it would have  received  had no such  deductions  or
withholdings  been made in respect of Non-Excluded  Taxes.  For purposes of this
Agreement  "Non-Excluded Taxes" are Section 2.5 Taxes other than, in the case of
each Lender,  Section 2.5 Taxes that are imposed or on its overall  "effectively
connected"  net income  (and  franchise  taxes  imposed in lieu  thereof) by the
county,  state or other  jurisdiction  under  the laws of which  such  Lender is
organized or where its Applicable  Lending  Office is located,  or any political
subdivision  thereof,  unless such  Section  2.5 Taxes are  imposed  solely as a
result of such Lender or such Agent having executed,  delivered or performed its
obligations or received  payments under,  or enforced,  this Agreement or any of
the other Loan  Documents  (in which case such Section 2.5 Taxes will be treated
as Non-Excluded Taxes).

      (b) In  addition,  Borrower  hereby  agrees to pay any  present  or future
stamp,  recording,  documentary,  excise,  property or similar taxes, charges or
levies that arise from any payment made under or in respect of this Agreement or
any other Loan Document or from the execution,  delivery or registration of, any
performance  under, or otherwise with respect to, this  Agreement,  the Notes or
any other Loan Document (collectively, "Other Taxes").

      (c) Borrower  hereby agrees to indemnify each Lender and Agent for, and to
hold each of them harmless  against,  the full amount of Non-Excluded  Taxes and
Other Taxes, and the full amount of Section 2.5 Taxes of any kind imposed by any
jurisdiction  on amounts  payable under this Section 2.5,  imposed on or paid by
such Lender or such Agent, as the case

                                      -25-
<PAGE>

may be, and any liability (including  penalties,  additions to tax, interest and
expenses) arising  therefrom or with respect thereto.  The indemnity by Borrower
provided for in this  Section  2.5(c) shall apply and be made whether or not the
Non-Excluded Taxes or Other Taxes for which indemnification  hereunder is sought
have been correctly or legally  asserted.  Amounts payable by Borrower under the
indemnity set forth in this Section 2.5(c) shall be paid within 10 days from the
date on which the applicable  Lender or Agent, as the case may be, makes written
demand therefor.

      (d) Lender and Agent  pursuant to Section 2.5(a) shall take all reasonable
actions   (consistent   with  its  internal  policy  and  legal  and  regulatory
restrictions)  requested by Borrower to assist Borrower,  as the case may be, at
the sole expense of Borrower, to recover from the relevant taxation authority or
other  Governmental  Authority any Section 2.5 Taxes in respect of which amounts
were paid by Borrower pursuant to Sections 2.5(a),  (b) or (c). However,  Lender
and Agent will not be  required  to take any  action  that would be, in the sole
judgment of Lender and Agent, legally inadvisable,  or commercially or otherwise
disadvantageous to Lender or Agent in any respect,  and in no event shall Lender
be required to disclose any tax returns or any other  information  that,  in the
sole judgment of Lender is confidential.

      (e)  Within 30 days after the date of any  payment  of Section  2.5 Taxes,
Borrower (or any Person making such payment on behalf of Borrower) shall furnish
to Agent for its own  account  or for the  account of the  applicable  Lender or
Agent,  as the case may be, a certified  copy of the original  official  receipt
evidencing  payment  thereof.  In the case of any payment under or in respect of
this  Agreement  or any of the other Loan  Documents by or on behalf of Borrower
through an account or branch outside the United States, or on behalf of Borrower
by a payor that is not a United States person,  if Borrower  determines  that no
Section 2.5 Taxes are payable in respect  thereof,  Borrower shall  furnish,  or
shall  cause such payor to  furnish,  to Agent an opinion of counsel  reasonably
acceptable  to Agent stating that such payment is exempt from Section 2.5 Taxes.
For purposes of this Section  2.5(e) and subsection (f) of this Section 2.5, the
terms  "United  States"  and  "United  States  person"  shall have the  meanings
specified in Section 7701 of the Internal Revenue Code.

      (f)  Each  Lender  (including  for  avoidance  of doubt  any  Participant,
assignee or successor) that either (i) is not incorporated under the laws of the
United States, any State thereof, or the District of Columbia or (ii) whose name
does  not  include   "Incorporated,"  "Inc.,"  "Corporation,"  "Corp.,"  "P.C.,"
"insurance  company," or  "assurance  company" (a "Non-U.S.  Corporate  Lender")
shall  deliver or caused to be  delivered  to Borrower  the  following  properly
completed and duly executed documents:

            a. a complete  and executed  (x) U.S.  Internal  Revenue Form W-8BEN
      with Part II  completed  in which Lender or Agent claims the benefits of a
      tax treaty with the United States  providing for a zero or reduced rate of
      withholding (or any successor  forms  thereto),  including all appropriate
      attachments  or (y) a U.S.  Internal  Revenue  Service Form W-8ECI (or any
      successor form thereto); or

            b. in the case of an  individual,  (x) a complete and executed  U.S.
      Internal Revenue Service Form W-8BEN (or any successor form thereto) and a
      certificate

                                      -26-
<PAGE>

      substantially in the form of Schedule VII (a "Section 2.5 Certificate") or
      (y) a complete and executed Internal Revenue Service Form W-9; or

            c. in the case of a  Non-U.S.  Corporate  Lender  that is  organized
      under the laws of the United States, any State thereof, or the District of
      Columbia,  (x) a complete and executed  Internal  Revenue Service Form W-9
      (or any successor thereto),  including all appropriate  attachments or (y)
      if such Non-U.S.  Corporate  Lender is disregarded  for federal income tax
      purposes,  the  documents  that would be required by clause (1), (2), (3),
      (4) or (5) with respect to its beneficial  owner if such beneficial  owner
      were Lender or Agent; or

            d. in the  case  of a  Non-U.S.  Corporate  Lender  that  (i) is not
      organized under the laws of the United States,  any State thereof,  or the
      District of Columbia and (ii) is treated as a corporation for U.S. federal
      income tax purposes, a complete and executed U.S. Internal Revenue Service
      Form W-8BEN  claiming a zero rate of withholding  (or any successor  forms
      thereto) and a Section 2.5 Certificate; or

            e. in the case of a Non-U.S. Corporate Lender that (A) is treated as
      a partnership or other  non-corporate  entity,  or is disregarded for U.S.
      federal income tax purposes and (B) is not organized under the laws of the
      United  States,  any State thereof,  or the District of Columbia,  a (x) a
      complete  and  executed  Internal  Revenue  Service  Form  W-8IMY  (or any
      successor form thereto) (including all required documents and attachments)
      and (y)(i) a Section 2.5 Certificate,  and (ii) without duplication,  with
      respect to each of its beneficial owners and the beneficial owners of such
      beneficial  owners  looking  through  chains of owners to  individuals  or
      entities  that are treated as  corporations  for U.S.  federal  income tax
      purposes (all such owners,  a  "beneficial  owners"),  the documents  that
      would be  required by clause (1),  (2),  (3),  (4) or this clause (5) with
      respect to each such beneficial owner if such beneficial owner were Lender
      or Agent, provided,  however, that no such documents will be required with
      respect to a beneficial  owner to the extent the actual Lender or Agent is
      determined to be in compliance with the requirements for  certification on
      behalf of its  beneficial  owner as may be  provided  in  applicable  U.S.
      Treasury regulations, or the requirements of this clause (5) are otherwise
      determined to be unnecessary,  all such  determinations  under this clause
      (5) to be made in the sole discretion of Borrower.

      If the forms referred to above in this Section 2.5(f) that are provided by
a  Lender  at the time  such  Lender  first  becomes  a party to this  Agreement
indicate  a United  States  interest  withholding  tax rate in  excess  of zero,
withholding  tax at such rate shall be treated as "Excluded  Taxes" (any Section
2.5 Taxes other than "Non-Excluded Taxes") and shall not qualify as Non-Excluded
Taxes unless and until such Lender provides the appropriate form certifying that
a lesser rate applies,  whereupon  withholding  tax at such lesser rate shall be
considered Excluded Taxes solely for the periods governed by such form. However,
if, on the date of the  Assignment  and  Acceptance  pursuant  to which a Lender
assignee  becomes a party to this  Agreement,  Lender  assignor  was entitled to
payments  under  subsection  (a) of this Section 2.5 in respect of United States
withholding tax with respect to interest paid at such date, then, to such extent
(and only to such  extent),  the term  "Non-Excluded  Taxes"  shall  include (in
addition to withholding taxes that may be imposed in the future or other amounts
otherwise  includable in Section 2.5 Taxes) United

                                      -27-
<PAGE>

States withholding tax, if any,  applicable with respect to such Lender assignee
on such date.  Any  additional  Section  2.5 Taxes in  respect of a Lender  that
result solely and directly  from a change in the  Applicable  Lending  Office of
such  Lender  shall be treated  as  Excluded  Taxes  (and  shall not  qualify as
Non-Excluded Taxes) unless (A) any such additional Section 2.5 Taxes are imposed
as a  result  of a  change  in  the  applicable  Legal  Requirements,  or in the
interpretation or application  thereof,  occurring after the date of such change
or (B) such change is made pursuant to the terms of Section 2.5(d) or subsection
(i) of this  Section  2.5 or  otherwise  as a result  of a request  therefor  by
Borrower.

      (g) For any period with  respect to which any Lender has failed to provide
Borrower with the appropriate form,  certificate or other document  described in
subsection  (f) of this  Section 2.5 (other than (i) if such failure is due to a
change  in  any  applicable  Legal  Requirement,  or in  the  interpretation  or
application  thereof,  occurring after the date on which a form,  certificate or
other  document  originally  was  required  to be provided or (ii) if such form,
certificate or other document  otherwise is not required under subsection (f) of
this   Section   2.5,   such  Lender   shall  not  be  entitled  to  payment  or
indemnification  under subsection (a) or (c) of this Section 2.5 with respect to
Non-Excluded  Taxes  imposed  by the  United  States by reason of such  failure;
provided,  however,  that should a Lender become subject to  Non-Excluded  Taxes
because of its failure to deliver a form, certificate or other document required
hereunder,  Borrower  shall  take such  steps as such  Lender  shall  reasonably
request to assist such Lender in recovering such Non-Excluded Taxes.

      (h)  Each  Lender  hereby  agrees  that,   upon  the   occurrence  of  any
circumstances  entitling  such  Lender to  additional  amounts  pursuant to this
Section  2.5,  such Lender shall use  reasonable  efforts  (consistent  with its
internal policy and legal and regulatory  restrictions),  at the sole expense of
the Borrower,  to designate a different  Applicable Lending Office if the making
of such a change would avoid the need for, or  materially  reduce the amount of,
any such additional  amounts that may thereafter accrue and would not be, in the
sole judgment of such Lender,  legally  inadvisable or commercially or otherwise
disadvantageous to such Lender in any respect.

            (i) If any Lender entitled to additional  compensation  under any of
      the  foregoing  provisions  of this  Section 2.5 shall fail to designate a
      different  Applicable Lending Office as provided in subsection (h) of this
      Section 2.5,  then,  so long as no Default or Event of Default  shall have
      occurred and be  continuing,  Borrower  may cause such Lender to (and,  if
      Borrower  so  demands,  such  Lender  shall)  assign all of its rights and
      obligations  under this Agreement to one or more other Persons  identified
      by Borrower and reasonably acceptable to the Agent; provided that if, upon
      such  demand by  Borrower,  such  Lender  elects to waive its  request for
      additional  compensation  pursuant  to this  Section  2.5,  the  demand by
      Borrower  for such  Lender to so assign all of its rights and  obligations
      under this  Agreement  shall  thereupon  be deemed  withdrawn.  Nothing in
      subsection  (h) of this Section 2.5 or this Section 2.5(i) shall affect or
      postpone  any of the  rights of any  Lender or any of the  Obligations  of
      Borrower under any of the foregoing  provisions of this Section 2.5 in any
      manner.

            Section  2.6  Non-Confidentiality  of Tax  Treatment.Notwithstanding
anything to the contrary  contained in this Agreement,  all persons may disclose
to any and all

                                      -28-
<PAGE>

persons,  without limitations of any kind, the purported or claimed U.S. federal
income  tax  treatment  of this  Agreement,  any fact  that may be  relevant  to
understanding the purported or claimed U.S. federal income tax treatment of this
Agreement,  and all  materials  of any kind  (including  opinions  or other  tax
analyses) relating to such U.S. federal income tax treatment or fact, other than
the name of the parties or any other person named herein,  or  information  that
would  permit  identification  of the  parties  or such other  persons,  and any
pricing  terms or other  nonpublic  business or  financial  information  that is
unrelated  to the  purported  or claimed  federal  income tax  treatment  of the
Agreement to the taxpayer and is not relevant to understanding  the purported or
claimed federal income tax treatment of the Agreement to the taxpayer.

      III. REPRESENTATIONS AND WARRANTIES

      Section 3.1 Borrower Representations.

      Borrower represents and warrants that:

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

      (b)  Borrower's  exact  legal  name is  correctly  set  forth in the first
paragraph of this  Agreement.  Borrower is an organization of the type specified
in the first paragraph of this Agreement.  Borrower is incorporated or organized
under the laws of the state  specified in the first paragraph of this Agreement.
Borrower's principal place of business and chief executive office, and the place
where Borrower keeps its books and records,  including recorded data of any kind
or nature, regardless of the medium of recording,  including software, writings,
plans,  specifications  and  schematics,  have been for the  preceding  four (4)
months (or, if less than four (4) months,  the entire period of the existence of
Borrower) and will continue to be the address of Borrower set forth in the first
paragraph of this Agreement (unless Borrower notifies Lender in writing at least
thirty (30) days prior to the date of such  change).  Borrower's  organizational
identification  number,  if any,  assigned by the state of its  incorporation or
organization  is  3795012.  Borrower's  federal  tax  identification  number  is
20-1085097. Borrower is not subject to back-up withholding taxes.

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

                                      -29-
<PAGE>

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

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

      3.1.5 Agreements.  Borrower is not in default with respect to any order or
decree  of any court or any  order,  regulation  or  demand of any  Governmental
Authority,  which  default might have  consequences  that would  materially  and
adversely affect the condition (financial or other) or operations of Borrower or
its properties or might have  consequences  that would  materially and adversely
affect its performance hereunder.

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

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

      3.1.8 No Plan Assets. As of the date hereof and throughout the term of the
Loan (a) Borrower is not or will not be an "employee  benefit  plan," as defined
in Section  3(3) of the Employee  Retirement  Income  Security  Act of 1974,  as
amended  ("ERISA"),  whether or not subject to Title I of ERISA,  or a "plan" as
defined  in  Section  4975 of the  Code,  (b)  none of the  assets  of  Borrower
constitutes  or will  constitute  "plan assets" of one or more such plans within
the meaning of U.S. Department of Labor Regulation 29 C.F.R.  Section 2510.3-101
(the

                                      -30-
<PAGE>

"Plan Assets Regulation"),  and (c) transactions by or with Borrower are not and
will not be subject to any state statute regulating investments of, or fiduciary
obligations with respect to,  governmental plans, as defined in Section 3(32) of
ERISA.

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

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

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

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

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

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

      3.1.15 Enforceability.  The Loan Documents are not subject to any right of
rescission,  set-off, counterclaim or defense by Borrower, including the defense
of usury, nor would the operation of any of the terms of the Loan Documents,  or
the exercise of any right

                                      -31-
<PAGE>

thereunder,  render  the Loan  Documents  unenforceable,  and  Borrower  has not
asserted any right of rescission,  set-off, counterclaim or defense with respect
thereto.

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

      3.1.17  Insurance.  Borrower  has  obtained  and has  delivered  to Lender
certificates  of insurance  describing  all of the  Policies,  with all premiums
prepaid  thereunder,  reflecting  the  insurance  coverages,  amounts  and other
requirements set forth in this Agreement.  No claims have been made under any of
the Policies,  and no Person,  including Borrower, has done, by act or omission,
anything which would impair the coverage of any of the Policies.

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

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

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

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

      3.1.22 Leases.  Borrower represents and warrants to Lender with respect to
the  Leases  that:  (a) the rent roll  attached  hereto as  Schedule  I is true,
complete and correct in all material respects and the Property is not subject to
any  Leases  other  than the  Leases  described  in  Schedule  I, (b) the Leases
identified  on  Schedule  I are in full  force and  effect  and,  to  Borrower's

                                      -32-
<PAGE>

knowledge,  there are no defaults  thereunder by either party, (c) the copies of
the  Leases  delivered  to Lender are true and  complete,  and there are no oral
agreements with respect thereto,  (d) except as disclosed on Schedule V, no Rent
(including  security  deposits) has been paid more than one (1) month in advance
of its due date, (e) except as disclosed on Schedule V, all work to be performed
by  Borrower  under  each  Lease has been  performed  as  required  and has been
accepted by the  applicable  Tenant,  (f) except as disclosed on Schedule V, any
payments,  free rent,  partial rent, rebate of rent or other payments,  credits,
allowances  or  abatements  required  to be given by  Borrower to any Tenant has
already  been  received by such Tenant and (g) all  security  deposits are being
held in accordance with Legal Requirements.

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

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

      (a)  Borrower  does not own and will not own any asset or  property  other
than (i) its interest in the Property,  and (ii)  incidental  personal  property
necessary for the ownership or operation of the Property.

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

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

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

                                      -33-
<PAGE>

(z) incurred in the ordinary course of business.  No Indebtedness other than the
Debt may be secured (subordinate or pari passu) by the Property.

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

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

      (g)  Borrower  has  done or  caused  to be  done  and  will do all  things
necessary to observe organizational  formalities and preserve its existence, and
Borrower  will not, nor will  Borrower  permit any  constituent  party to amend,
modify or otherwise change the partnership  certificate,  partnership agreement,
articles  of  incorporation  and  bylaws,  operating  agreement,  trust or other
organizational documents of Borrower or such constituent party without the prior
consent of Lender in any manner that (i) violates the single  purpose  covenants
set forth in this Section 3.1.24, or (ii) amends,  modifies or otherwise changes
any provision  thereof that by its terms cannot be modified at any time when the
Loan is outstanding or by its terms cannot be modified without Lender's consent.

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

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

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

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

                                      -34-
<PAGE>

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

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

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

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

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

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

                                      -35-
<PAGE>

Director if such  individual  is at the time of initial  appointment,  or at any
time while serving as an  Independent  Director,  an  Independent  Director of a
"special  purpose  entity"  affiliated with Borrower (other than any entity that
owns a direct or indirect  equity interest in Borrower) if such individual is an
independent    manager,    director   or   special   member    provided   by   a
nationally-recognized  company that provides professional  independent managers,
directors or special  members.  As used in this  definition,  the term "control"
means the  possession,  directly or indirectly,  of the power to direct or cause
the direction of the  management,  policies or  activities of a Person,  whether
through ownership of voting securities, by contract or otherwise.

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

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

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

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

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

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

      3.1.26  Solvency.  Giving effect to the Loan,  the fair saleable  value of
Borrower's  assets  exceeds and will,  immediately  following  the making of the
Loan, exceed their respective total liabilities,  including, without limitation,
subordinated,  unliquidated,  disputed  and  contingent  liabilities.  The  fair
saleable  value of  Borrower's  assets is and will,  immediately  following  the

                                      -36-
<PAGE>

making of the Loan,  be greater  than  their  respective  probable  liabilities,
including the maximum amount of its contingent  liabilities on its debts as such
debts become absolute and matured.

      3.1.27 Federal  Reserve  Regulations.  No part of the proceeds of the Loan
will be used for the purpose of  purchasing  or  acquiring  any  "margin  stock"
within the  meaning of  Regulation  U of the Board of  Governors  of the Federal
Reserve  System or for any other purpose which would be  inconsistent  with such
Regulation U or any other  Regulations  of such Board of  Governors,  or for any
purposes prohibited by Legal Requirements or by the terms and conditions of this
Agreement or the other Loan Documents.

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

      3.1.29 Bank Holding Company. Borrower is not a "bank holding company" or a
direct or indirect subsidiary of a "bank holding company" as defined in the Bank
Holding  Company Act of 1956,  as amended,  and  Regulation Y thereunder  of the
Board of Governors of the Federal Reserve System.

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

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

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

      3.1.33 No  Bankruptcy  Filing.  Borrower is not  contemplating  either the
filing of a petition by it under any state or federal  bankruptcy  or insolvency
laws or the  liquidation  of its assets or property,  and Borrower does not have
any  knowledge  of any  Person  contemplating  the  filing of any such  petition
against it.

      3.1.34 Full and Accurate Disclosure.  To the best of Borrower's knowledge,
no information  contained in this Agreement,  the other Loan  Documents,  or any
written statement furnished by or on behalf of Borrower pursuant to the terms of
this  Agreement  contains any untrue  statement  of a material  fact or omits to
state a material  fact  necessary  to make the  statements  contained  herein or
therein not misleading in light of the circumstances under which they were made.
There is no fact or circumstance  presently known to Borrower which has not

                                      -37-
<PAGE>

been  disclosed  to  Lender  and  which  materially  adversely  affects,  or  is
reasonably likely to materially adversely affect, the Property,  Borrower or its
business, operations or condition (financial or otherwise).

      3.1.35  Foreign  Person.  Borrower  is not a "foreign  person"  within the
meaning of Section 1445(f)(3) of the Code.

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

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

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

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

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

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

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

                                      -38-
<PAGE>

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

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

      (a)  Recording;  Modification.  A memorandum  of the Ground Lease has been
duly  recorded.  The Ground  Lease  permits  the  interests  of  Borrower  to be
encumbered by a mortgage. There have not been amendments or modifications to the
terms of the Ground Lease since its  recordation,  with the exception of written
instruments  which have been  recorded.  So long as a "Leasehold  Mortgage"  (as
defined in the Ground Lease) is in effect, the Ground Lease may not be canceled,
surrendered, modified or amended without the prior written consent of Lender.

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

      (c) Ground Lease  Assignable.  Borrower's  interest in the Ground Lease is
assignable  to Lender  upon  notice to, but  without  the consent of, the ground
lessor (or, if any such consent is required,  it has been obtained  prior to the
Closing Date) and compliance  with Section 10.4 of the Ground Lease.  Subject to
Section  13.1 of the Ground  Lease,  the Ground Lease is further  assignable  by
Lender, its successors and assigns without the consent of the ground lessor.

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

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

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

      (g) New Lease. The Ground Lease requires the ground lessor to enter into a
new lease with  Lender  upon  termination  of the Ground  Lease for any  reason,
including rejection of the Ground Lease in a bankruptcy  proceeding,  subject to
compliance with Section 10.4(d)(viii) of the Ground Lease.

      (h)  Insurance  Proceeds.  Under  the  terms of the  Ground  Lease and the
Mortgage,  taken together,  any related insurance and condemnation proceeds will
be applied

                                      -39-
<PAGE>

either to the repair or restoration of all or part of the Property,  with Lender
having  the  right,  in the  instance  where the Net  Proceeds  are in excess of
$750,000.00,  to hold and  disburse  the  proceeds as the repair or  restoration
progresses,  or to the payment of the outstanding  principal balance of the Loan
together with any accrued interest thereon.

      (i) Subleasing. Except as provided in Section 13.1(b) of the Ground Lease,
the Ground Lease does not impose any restrictions on subleasing.

      Section 3.2 Survival of Representations.

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

      IV. BORROWER COVENANTS

      Section 4.1 Borrower Affirmative Covenants.

      Borrower hereby covenants and agrees with Lender that:

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

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

                                      -40-
<PAGE>

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

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

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

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

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

      4.1.6 Financial Reporting.

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

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

                                      -41-
<PAGE>

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

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

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

            (iii) a current rent roll for the Property;

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

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

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

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

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

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

                                      -42-
<PAGE>

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

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

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

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

      4.1.8 Estoppel Statement.

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

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

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

      (d)  Borrower  shall  deliver  to  Lender,   upon  request,   an  estoppel
certificate  from ground lessor under the Ground Lease  (provided  that Borrower
shall  only be  required  to use  commercially  reasonable  efforts to obtain an
estoppel certificate from such ground lessor);

                                      -43-
<PAGE>

provided that such  certificates  may be in the form  required  under the Ground
Lease;  provided  further  that  Borrower  shall not be required to deliver such
certificates  more than three (3) times during the term of the Loan and not more
frequently  than once per calendar  year (or twice  during any calendar  year in
which a Securitization occurs).

      4.1.9 Leases.

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

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

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

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

                                      -44-
<PAGE>

            (ii) whenever  Lender's  approval or consent is required pursuant to
      the  provisions  of this Section  4.1.9 for any matter that Lender has not
      previously  approved a term sheet pursuant to Section  4.1.9(c)(i)  above,
      Lender shall use good faith  efforts to respond  within ten (10)  Business
      Days  after  Lender's  receipt  of  Borrower's  written  request  for such
      approval or consent. If Lender fails to respond to such request within ten
      (10)  Business  Days,  and Borrower  sends a second  request  containing a
      legend in bold letters stating that Lender's failure to respond within ten
      (10)  Business Days shall be deemed  consent or approval,  Lender shall be
      deemed to have  approved  or  consented  to the matter for which  Lender's
      consent or approval  was sought if Lender  fails to respond to such second
      written  request  before  the  expiration  of such ten (10)  Business  Day
      period;

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

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

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

      4.1.10   Alterations.   Lender's  prior  approval  shall  be  required  in
connection with any alterations to any Improvements  (except tenant improvements
under any Lease approved by Lender or under any Lease for which approval was not
required by Lender under this  Agreement)  (a) that may have a material  adverse
effect on  Borrower's  financial  condition,  the value of the  Property  or the
ongoing  revenues  and  expenses  of the  Property  or (b)  the  cost  of  which
(including any related  alteration,  improvement or  replacement)  is reasonably
anticipated to exceed the Alteration Threshold, which approval may be granted or
withheld in Lender's sole discretion  unless the Alteration is required by Legal
Requirements.  If Borrower  requests approval from Lender for any alterations to
any  Improvements  Lender shall use good faith efforts to respond  within thirty
(30) days after Lender's receipt of Borrower's written request for such approval
or consent together with all materials necessary for Lender to determine whether
or not to approve  such  alteration.  If Lender fails to respond to such request
within thirty (30)

                                      -45-
<PAGE>

days, and Borrower  sends a second  request  containing a legend in bold letters
stating that Lender's  failure to respond within ten (10) Business Days shall be
deemed consent or approval, Lender shall be deemed to have approved or consented
to the alterations  for which Lender's  consent or approval was sought if Lender
fails to respond to such second  written  request  before the expiration of such
ten (10)  Business Day period.  If the total unpaid  amounts  incurred and to be
incurred with respect to such alterations to the Improvements  shall at any time
exceed the Alteration  Threshold,  Borrower shall promptly  deliver to Lender as
security  for the  payment  of  such  amounts  and as  additional  security  for
Borrower's obligations under the Loan Documents any of the following:  (i) cash,
(ii) Letters of Credit (iii) U.S. Obligations,  (iv) other securities acceptable
to Lender, provided that Lender shall have received a Rating Agency Confirmation
as to the form and  issuer of same,  or (v) a  completion  bond,  provided  that
Lender  shall have  received  a Rating  Agency  Confirmation  as to the form and
issuer of same.  Such security  shall be in an amount equal to the excess of the
total  unpaid  amounts  incurred  and  to  be  incurred  with  respect  to  such
alterations  to  the  Improvements  (other  than  such  amounts  to be  paid  or
reimbursed by Tenants under the Leases) over the Alteration Threshold and may be
reduced  from time to time at the request of Borrower to the cost  estimated  by
Borrower and reasonably  approved by Lender to complete the alteration for which
such additional security was required.  Notwithstanding the foregoing,  Lender's
prior  approval  shall not be required in connection  with the demolition of the
Firestone  Building,  provided that (a) the JC Penney Lease shall remain in full
force and  effect  and be amended  to delete  the  Firestone  Building  from the
premises demised thereunder, (b) the demolition shall be completed in compliance
with all Legal  Requirements,  all other  Leases,  (c) the  demolition  shall be
completed  in a manner not to  materially  adversely  affect the  balance of the
Property,  (d) the  Underwritable  Cash Flow for the Property  after taking into
account  the  demolition  of the  Firestone  Building  shall  not be  less  than
$12,000,000.00  and (e) Lender shall have  received an updated  appraisal of the
Property dated no more than sixty (60) days prior to the proposed  demolition by
an appraiser acceptable to Lender, indicating an appraised value of the Property
after the demolition, equal to or greater than one hundred percent (100%) of the
outstanding principal balance of the Loan.

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

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

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

                                      -46-
<PAGE>

      4.1.14 Costs of Enforcement/Remedying  Defaults. In the event (a) that the
Mortgage  is  foreclosed  in  whole  or in part or the  Note or any  other  Loan
Document is put into the hands of an attorney for  collection,  suit,  action or
foreclosure,  (b) of the  foreclosure  of  any  Lien  or  Mortgage  prior  to or
subsequent to the Mortgage in which  proceeding  Lender is made a party,  (c) of
the  bankruptcy,  insolvency,  rehabilitation  or other  similar  proceeding  in
respect of Borrower or Guarantor or an  assignment  by Borrower or Guarantor for
the benefit of its  creditors,  or (d) Lender  shall remedy or attempt to remedy
any Event of Default as permitted  hereunder,  Borrower shall be chargeable with
and agrees to pay all costs  incurred by Lender as a result  thereof,  including
costs of collection  and defense  (including  reasonable  attorneys',  experts',
consultants' and witnesses' fees and disbursements) in connection  therewith and
in connection  with any appellate  proceeding or  post-judgment  action involved
therein,  which  shall be due and  payable on  demand,  together  with  interest
thereon from the date incurred by Lender at the Default Rate,  and together with
all required service or use taxes.

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

      4.1.16 Loan Fees.

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

      4.1.17  Interest  Rate  Cap.  At all  times  during  the term of the Loan,
Borrower shall maintain in effect an Interest Rate Protection Agreement having a
term equal to the term of the Loan, with an initial notional amount equal to the
amount  of the Loan and with a  Counterparty  reasonably  acceptable  to  Lender
having a Minimum  Counterparty Rating. If Borrower obtains one (1) interest rate
cap, the LIBOR strike rate under the Interest Rate Protection Agreement shall be
equal to or less than the Capped  LIBOR Rate,  or if Borrower  obtains more than
one (1) interest rate cap, the blended LIBOR strike rate under the Interest Rate
Protection  Agreement,  as determined by Lender,  shall be equal to or less than
the Capped LIBOR Rate. The Interest Rate  Protection  Agreement shall be in form
and substance substantially similar to the Interest Rate Protection Agreement in
effect as of the date hereof. In the event of any downgrade or withdrawal of the
rating of such Counterparty by any Rating Agency below the Minimum  Counterparty
Rating or the placement by Moody's of such Counterparty "On Watch for Downgrade"
from the Minimum Counterparty  Rating,  Borrower shall replace the Interest Rate
Protection  Agreement not later than thirty (30) Business Days following receipt
of notice from Lender of such  downgrade  or  withdrawal  with an Interest  Rate
Protection  Agreement in form and substance  reasonably  satisfactory  to Lender
(and  meeting  the  requirements  set  forth  in  this  Section  4.1.11)  from a
Counterparty  reasonably  acceptable  to Lender  having a  Minimum  Counterparty
Rating; provided, however, that if any Rating Agency withdraws or downgrades the
credit rating of the Counterparty below the Minimum Counterparty

                                      -47-
<PAGE>

Rating or if Moody's places such  Counterparty "On Watch for Downgrade" from the
Minimum  Counterparty  Rating,  Borrower  shall not be  required  to replace the
Counterparty  under the Interest Rate Protection  Agreement provided that within
five  (5)  days  following  Lender's  notice  to  Borrower  of  such  downgrade,
withdrawal or placement "On Watch for  Downgrade"  (y) such  Counterparty  or an
Affiliate thereof posts additional  collateral acceptable to the Rating Agencies
securing its obligations under the Interest Rate Protection  Agreement or (z) an
Affiliate of such  Counterparty  with a Minimum  Counterparty  Rating delivers a
guaranty  acceptable to the Rating  Agencies  guaranteeing  such  Counterparty's
obligations under the Interest Rate Protection  Agreement.  Notwithstanding  the
foregoing,  if S&P or Fitch  withdraws or  downgrades  the credit rating of such
Counterparty below "A1", or Moody's withdraws or downgrades the credit rating of
such  Counterparty  below "A2" (if the  Counterparty has only a long term rating
from Moody's) or below "A3" or "P-2" (if the Counterparty has both long term and
short term ratings  from  Moody's),  Borrower  shall  replace the Interest  Rate
Protection Agreement not later than twenty (20) days following receipt of notice
from Lender of such  downgrade or withdrawal  with an Interest  Rate  Protection
Agreement in form and substance  reasonably  satisfactory to Lender (and meeting
the  requirements  set  forth  in  this  Section  4.1.11)  from  a  Counterparty
reasonably acceptable to Lender having a Minimum Counterparty Rating.

      4.1.18  Ground  Lease.  Upon  expiration of the initial term of the Ground
Lease,  Borrower  shall  cause fee title of the  Property to be  transferred  to
Borrower  pursuant to Section 11.2 of the Ground Lease and shall execute any and
all instruments necessary for the Mortgage to encumber such fee estate.

      Section 4.2 Borrower Negative Covenants.

      Borrower covenants and agrees with Lender that:

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

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

      4.2.3  Dissolution.  Borrower  shall not (i)  engage  in any  dissolution,
liquidation or  consolidation  or merger with or into any other business entity,
(ii) engage in any business  activity not related to the ownership and operation
of the  Property,  (iii)  transfer,  lease or sell,  in one  transaction  or any
combination of transactions, all or substantially all of the property or

                                      -48-
<PAGE>

assets  of  Borrower  except  to the  extent  expressly  permitted  by the  Loan
Documents,  or (iv) cause, permit or suffer any SPC Party to (A) dissolve,  wind
up or  liquidate or take any action,  or omit to take an action,  as a result of
which such SPC Party would be  dissolved,  wound up or liquidated in whole or in
part, or (B) amend,  modify, waive or terminate the certificate of incorporation
or bylaws of such SPC Party, in each case without obtaining the prior consent of
Lender.

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

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

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

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

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

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

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

      4.2.11 ERISA. (a) Borrower shall not engage in any transaction which would
cause any obligation, or action taken or to be taken, hereunder (or the exercise
by Lender of any of its rights under the Note,  this Agreement or the other Loan
Documents)  to be a  non-exempt  (under  a  statutory  or  administrative  class
exemption) prohibited transaction under ERISA or Section 4975 of the Code.

      (b) Borrower shall deliver to Lender such certifications or other evidence
from time to time throughout the term of the Loan, as requested by Lender in its
sole discretion, that

                                      -49-
<PAGE>

(A)  Borrower is not an  "employee  benefit  plan" as defined in Section 3(3) of
ERISA,  which is subject to Title I of ERISA,  or a "plan" within the meaning of
Section  4975 of the Code;  (B)  Borrower  is not  subject to any state  statute
regulating   investments   of,  or  fiduciary   obligations   with  respect  to,
governmental  plans as defined in Section 3(32) of ERISA; and (C) one or more of
the following circumstances is true for Borrower:

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

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

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

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

      V. INSURANCE, CASUALTY AND CONDEMNATION

      Section 5.1 Insurance.

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

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

                                      -50-
<PAGE>

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

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

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

                                      -51-
<PAGE>

      extent such amounts are actually paid out of the proceeds of such business
      income insurance;

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

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

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

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

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

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

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

            (xi) if "acts of  terrorism"  or other  similar  acts or events  are
      hereafter  excluded  from  Borrower's  comprehensive  all  risk  insurance
      policy, Borrower shall obtain an endorsement to such policy, or a separate
      policy from an insurance  provider which  maintains at least an Investment
      Grade  Rating  from  Moody's,  Fitch  and/or  S&P  (provided  that none of
      Moody's,  Fitch or S&P rates such  provider less than  investment  grade),
      insuring  against  all such  excluded  acts or events,  to the extent such
      policy or endorsement  is available,  in an amount equal to, at Borrower's
      option, either (A) the total

                                      -52-
<PAGE>

      insurable  value  of the  Property  or (B)  the  then-current  outstanding
      principal  balance of the Loan at the time such policy or  endorsement  is
      purchased,  provided that if Borrower  chooses the option in clause (B) of
      this sentence,  Borrower shall also obtain a "lender's  endorsement" which
      requires the insurer  under such  endorsement  to pay Lender an amount not
      less than the then-current  outstanding  principal balance of the Loan and
      interest  thereon  in the event that  after any  Casualty  covered by such
      policy or  endorsement  the Property is not restored in the manner  hereby
      required  within  a  period  of time  commencing  at the  time of loss and
      continuing  for such length of time as it takes to repair or replace  with
      the exercise of due diligence and dispatch.  To the extent available,  the
      endorsement   or  policy  shall  be  in  form  and  substance   reasonably
      satisfactory to Lender. Notwithstanding anything to the contrary contained
      in this Section 5.1.1(a)(xi), Borrower shall not be required to pay annual
      premiums in excess of the Required Amount for the coverage  required under
      this Section  5.1.1(a)(xi) for the Property,  it being agreed in such case
      that Borrower shall not be obligated to comply with the coverage set forth
      above  except  to the  extent  available  at the  Required  Amount  of the
      premium; and

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

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

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

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

                                      -53-
<PAGE>

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

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

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

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

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

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

      5.1.2 Insurance Company. The Policies shall be issued by financially sound
and responsible  insurance  companies  authorized to do business in the state in
which the Property is located and having a claims paying  ability  rating of "A"
or  better by S&P and  Fitch.  If a  Securitization  occurs,  (i) the  foregoing
required  insurance  company rating by a Rating Agency not rating any Securities
shall  be  disregarded  and  (ii) if the  insurance  company  complies  with the
aforesaid S&P required  rating (and S&P is rating the  Securities) and the other
Rating  Agencies rating the Securities do not rate the insurance  company,  such
insurance  company shall be deemed acceptable with respect to such Rating Agency
not rating such insurance company. Notwithstanding the foregoing, Borrower shall
be permitted to maintain the Policies with insurance companies which do not meet
the foregoing  requirements (an "Otherwise Rated  Insurer"),  provided  Borrower
obtains a  "cut-through"  endorsement  (that is, an  endorsement  which  permits
recovery against the provider of such endorsement) with respect to any Otherwise
Rated Insurer from an insurance  company  which meets the claims paying  ability
ratings required

                                      -54-
<PAGE>

above.  Moreover,  if Borrower desires to maintain  insurance required hereunder
from an insurance  company which does not meet the claims paying ability ratings
set forth herein but the parent of such insurance  company,  which owns at least
fifty-one  percent  (51%) of such  insurance  company,  maintains  such ratings,
Borrower may use such  insurance  companies  if approved by the Rating  Agencies
(such  approval  may be  conditioned  on items  required by the Rating  Agencies
including  a  requirement  that the parent  guarantee  the  obligations  of such
insurance company).

      5.1.3 Current  Insurance.  Lender hereby  acknowledges  that the insurance
coverage  evidenced  by the  certificates  of  insurance  delivered to Lender in
connection  with the closing of the Loan are acceptable to Lender as of the date
hereof for purposes of this Section 5.1.Section 5.2 Casualty and Condemnation.

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

      5.2.2 Condemnation. Borrower shall give Lender prompt notice of any actual
or threatened  Condemnation by any Governmental  Authority of all or any part of
the Property and shall  deliver to Lender a copy of any and all papers served in
connection with such proceedings.  Provided no Event of Default has occurred and
is  continuing,  in the event of a  Condemnation  where the amount of the taking
does not exceed the  Restoration  Threshold,  Borrower may settle and compromise
such  Condemnation;  provided  that  the  same  is  effected  in a  commercially
reasonable  and timely manner.  In the event a Condemnation  where the amount of
the taking  exceeds the  Restoration  Threshold  or if an Event of Default  then
exists,  Borrower  may  settle and  compromise  the  Condemnation  only with the
consent of Lender (which consent shall not be unreasonably withheld, conditioned
or delayed) and Lender shall have the opportunity to participate,  at Borrower's
cost,  in any  litigation  and  settlement  discussions  in respect  thereof and
Borrower shall from time to time deliver to Lender all instruments  requested by
Lender to permit such participation.  Borrower shall, at its expense, diligently
prosecute any such proceedings, and shall consult with Lender, its attorneys and
experts, and cooperate with them in the carrying on

                                      -55-
<PAGE>

or defense of any such proceedings.  Notwithstanding any Condemnation,  Borrower
shall  continue to pay the Debt at the time and in the manner  provided  for its
payment in the Note and in this  Agreement.  Lender  shall not be limited to the
interest paid on the Award by any  Governmental  Authority but shall be entitled
to receive out of the Award interest at the rate or rates provided  herein or in
the Note.  If the Property or any portion  thereof is taken by any  Governmental
Authority,  Borrower  shall  promptly  commence  and  diligently  prosecute  the
Restoration of the Property and otherwise  comply with the provisions of Section
5.3. If the Property is sold,  through  foreclosure  or otherwise,  prior to the
receipt by Lender of the Award,  Lender  shall have the right,  whether or not a
deficiency judgment on the Note shall have been sought,  recovered or denied, to
receive the Award, or a portion thereof sufficient to pay the Debt.

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

      Section 5.3 Delivery of Net Proceeds.

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

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

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

                                      -56-
<PAGE>

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

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

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

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

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

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

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

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

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

      (b) The Net Proceeds  shall be paid  directly to Lender and held by Lender
in an  interest-bearing  account and,  until  disbursed in  accordance  with the
provisions of this Section 5.3.2, shall constitute  additional  security for the
Debt.  The Net  Proceeds  shall be  disbursed  by Lender to, or as directed  by,
Borrower from time to time during the course of the Restoration, upon receipt of
evidence  satisfactory to Lender that (A) all  requirements set forth in Section
5.3.2(a) have been  satisfied,  (B) all  materials  installed and work and labor
performed

                                      -57-
<PAGE>

(except  to the  extent  that  they  are to be  paid  for  out of the  requested
disbursement) in connection with the Restoration have been paid for in full, and
(C) there exist no notices of pendency, stop orders, mechanic's or materialman's
liens or notices of intention to file same,  or any other liens or  encumbrances
of any nature  whatsoever on the Property  arising out of the Restoration  which
have not either been fully bonded to the  satisfaction  of Lender and discharged
of record or in the alternative  fully insured to the  satisfaction of Lender by
the title company issuing the Title Insurance Policy.

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

      (d) In no event shall Lender be obligated to make disbursements of the Net
Proceeds in excess of an amount equal to the costs  actually  incurred from time
to time  for  work in  place as part of the  Restoration,  as  certified  by the
Casualty Consultant,  less the Casualty Retainage. The term "Casualty Retainage"
shall mean, as to each contractor,  subcontractor or materialman  engaged in the
Restoration, an amount equal to ten percent (10%) of the costs actually incurred
for work in place  as part of the  Restoration,  as  certified  by the  Casualty
Consultant,  until the Restoration has been  completed.  The Casualty  Retainage
shall in no event, and notwithstanding  anything to the contrary set forth above
in this Section 5.3.2(d), be less than the amount actually held back by Borrower
from contractors, subcontractors and materialmen engaged in the Restoration. The
Casualty Retainage shall not be released until the Casualty Consultant certifies
to  Lender  that the  Restoration  has been  completed  in  accordance  with the
provisions  of this Section  5.3.2(d) and that all  approvals  necessary for the
re-occupancy  and use of the Property have been  obtained  from all  appropriate
Governmental  Authorities,  and Lender receives evidence  satisfactory to Lender
that the costs of the Restoration have been paid in full or will be paid in full
out of the Casualty Retainage;  provided,  however, that Lender will release the
portion of the Casualty  Retainage  being held with  respect to any  contractor,
subcontractor  or  materialman  engaged in the  Restoration  as of the date upon
which  the  Casualty  Consultant   certifies  to  Lender  that  the  contractor,
subcontractor  or  materialman  has  satisfactorily  completed  all work and has
supplied all materials in accordance  with the  provisions of the  contractor's,

                                      -58-
<PAGE>

subcontractor's  or  materialman's  contract,  the contractor,  subcontractor or
materialman  delivers  the lien  waivers and  evidence of payment in full of all
sums due to the  contractor,  subcontractor  or materialman as may be reasonably
requested by Lender or by the title company issuing the Title Insurance  Policy,
and Lender  receives an endorsement to the Title  Insurance  Policy insuring the
continued  priority of the lien of the  Mortgage  and evidence of payment of any
premium payable for such endorsement.  If required by Lender, the release of any
such portion of the Casualty  Retainage shall be approved by the surety company,
if any,  which has  issued a payment  or  performance  bond with  respect to the
contractor, subcontractor or materialman.

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

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

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

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

                                      -59-
<PAGE>

      VI. RESERVE FUNDS

      Section 6.1 Intentionally Omitted.

      Section 6.2 PILOT Payment/Tax Funds.

      6.2.1  Deposits  of PILOT  Payment/Tax  Funds.  Upon the  occurrence  of a
Trigger  Event and during the  continuance  of a Trigger  Period  there shall be
deposited on each Monthly  Payment  Date an amount equal to  one-twelfth  of the
Taxes and/or PILOT Payments that Lender in good faith  estimates will be payable
during the next  ensuing  twelve (12) months in order to  accumulate  sufficient
funds to pay all such  Taxes  and/or  PILOT  Payments  with  respect  to the tax
parcels  which  comprise  the  Property  at least ten (10)  days  prior to their
respective  due dates.  Amounts  deposited  pursuant to this  Section  6.2.1 are
referred  to herein as the  "PILOT  Payment/Tax  Funds".  If at any time  Lender
reasonably determines that the PILOT Payment/Tax Funds will not be sufficient to
pay  the  Taxes  or  PILOT  Payments,  Lender  shall  notify  Borrower  of  such
determination  and the monthly deposits for Taxes and/or PILOT Payments shall be
increased  by the amount  that Lender  estimates  is  sufficient  to make up the
deficiency  at least ten (10)  days  prior to the  respective  due dates for the
Taxes or PILOT  Payments,  as  applicable;  provided  that if Borrower  receives
notice of any deficiency  after the date that is ten (10) days prior to the date
that Taxes or PILOT  Payments are due,  Borrower will deposit such amount within
one (1) Business Day after its receipt of such notice.

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

      Section 6.3 Insurance Funds.

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

                                      -60-
<PAGE>

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

      Section 6.4 Intentionally Omitted.

      Section 6.5 Rollover Funds.

      6.5.1 Deposits of Rollover  Funds.  Upon the occurrence of a Trigger Event
and during the  continuance  of a Trigger  Period there shall be deposited  with
Lender  on  each  Monthly  Payment  Date  the  sum  of  $67,600.67,  for  tenant
improvements  and leasing  commissions  that may be incurred  following the date
hereof.  Amounts deposited pursuant to this Section 6.5.1 are referred to herein
as the "Rollover Funds".

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

                                      -61-
<PAGE>

Rollover Funds is less than the Minimum  Disbursement Amount, in which case only
one disbursement of the amount remaining in the account shall be made).

      Section 6.6 Lease Termination Rollover Funds.

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

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

                                      -62-
<PAGE>

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

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

      Section 6.7 Intentionally Omitted.

      Section 6.8 Application of Reserve Funds.

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

      Section 6.9 Security Interest in Reserve Funds.

      6.9.1  Grant of  Security  Interest.  Borrower  shall be the  owner of the
Reserve Funds.  Borrower hereby pledges,  assigns and grants a security interest
to Lender,  as security for payment of the Debt and the performance of all other
terms,  conditions and covenants of the Loan Documents on Borrower's  part to be
paid and performed, in all of Borrower's right, title and interest in and to the
Reserve Funds. The Reserve Funds shall be under the sole dominion and control of
Lender.

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

                                      -63-
<PAGE>

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

      Section 6.10 Letters of Credit.

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

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

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

      Section 6.11 Provisions Regarding Letters of Credit.

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

                                      -64-
<PAGE>

Lender may determine.  Any such  application to the Debt shall be subject to the
Yield Maintenance  Premium.  On the Maturity Date, any such Letter of Credit may
be applied to reduce the Debt.

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

      VII. PROPERTY MANAGEMENT

      Section 7.1 The Management Agreement.

      Borrower shall cause Manager to manage the Property in accordance with the
Management  Agreement.  Borrower shall (i) diligently perform and observe all of
the terms,  covenants and conditions of the Management  Agreement on the part of
Borrower to be performed and observed, (ii) promptly notify Lender of any notice
to Borrower of any default by Borrower in the  performance  or observance of any
of the terms, covenants or conditions of the Management Agreement on the part of
Borrower to be performed and observed,  and (iii)  promptly  deliver to Lender a
copy of each financial  statement,  business plan,  capital  expenditures  plan,
report and estimate received by it under the Management  Agreement.  If Borrower
shall default in the performance or observance of any material term, covenant or
condition of the Management Agreement on the part of Borrower to be performed or
observed,  then,  without limiting  Lender's other rights or remedies under this
Agreement or the other Loan Documents, and without waiving or releasing Borrower
from any of its obligations hereunder or under the Management Agreement,  Lender
shall have the right,  but shall be under no obligation,  to pay any sums and to
perform any act as may be appropriate to cause all the material terms, covenants
and  conditions  of the  Management  Agreement  on the  part of  Borrower  to be
performed or observed.

                                      -65-
<PAGE>

      Section 7.2 Prohibition Against Termination or Modification.

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

      Section 7.3 Replacement of Manager.

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

      VIII. PERMITTED TRANSFERS

      Section 8.1 Intentionally Omitted.

      Section 8.2 Permitted Transfers.

      (a) Without the prior written consent of Lender,  neither Borrower nor any
other Person having an ownership or beneficial interest,  direct or indirect, in
Borrower  shall (i) directly or indirectly  sell,  transfer,  convey,  mortgage,
pledge,  or assign  the  Property,  any part  thereof  or any  interest  therein
(including any ownership interest in Borrower); (ii) further

                                      -66-
<PAGE>

encumber,  alienate, grant a Lien or grant any other interest in the Property or
any part  thereof  (including  any  ownership  interest  in  Borrower),  whether
voluntarily  or  involuntarily;  or  (iii)  enter  into  any  easement  or other
agreement  granting  rights  in or  restricting  the use or  development  of the
Property.

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

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

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

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

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

            (iv) Lender has received a  non-consolidation  opinion  which may be
      relied upon by Lender,  the Rating Agencies and their respective  counsel,
      successors and

                                      -67-
<PAGE>

      assigns,  with respect to the sale or  conveyance,  which opinion shall be
      reasonably  acceptable to Lender and, after a  Securitization,  the Rating
      Agencies;

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

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

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

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

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

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

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

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

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

      (f) The  restrictions on Transfers of ownership  interests in Borrower set
forth herein and in Article 6 of the Mortgage  shall not apply to the  issuance,
transfer or pledge of

                                      -68-
<PAGE>

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

      IX. SALE AND SECURITIZATION OF MORTGAGE

      Section 9.1 Sale of Mortgage and Securitization.

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

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

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

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

                                      -69-
<PAGE>

      Property and Borrower and Affiliates,  which counsel and opinions shall be
      satisfactory to Lender and the Rating Agencies;

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

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

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

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

            (ii) Not later  than 30 days  after the end of each  fiscal  quarter
      following  the Closing Date, a balance sheet of the Property as of the end
      of such fiscal quarter,  meeting the  requirements of Section  210.3-01 of
      Regulation S-X, and statements of

                                      -70-
<PAGE>

      income  and  statements  of cash  flows  of the  Property  for the  period
      commencing  on the day  following  the last day of the most recent  Fiscal
      Year  and  ending  on  the  date  of  such  balance   sheet  and  for  the
      corresponding   period  of  the  most  recent  Fiscal  Year,  meeting  the
      requirements of Section 210.3-02 of Regulation S-X (provided,  that if for
      such corresponding period of the most recent Fiscal Year Acquired Property
      Statements were permitted to be provided  hereunder  pursuant to paragraph
      (i) above, Borrower shall instead provide Acquired Property Statements for
      such corresponding  period).  If requested by Lender,  Borrower shall also
      provide  "summarized   financial   information,"  as  defined  in  Section
      210.1-02(bb) of Regulation  S-X, with respect to such quarterly  financial
      statements.

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

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

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

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

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

                                      -71-
<PAGE>

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

      Section 9.2 Securitization Indemnification.

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

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

                                      -72-
<PAGE>

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

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

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

                                      -73-
<PAGE>

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

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

      X. DEFAULTS

      Section 10.1 Event of Default.

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

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

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

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

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

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

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

                                      -74-
<PAGE>

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

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

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

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

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

            (xii) if Guarantor  breaches in any material  respect any  covenant,
      warranty  or  representation  contained  in the  Guaranty  of  Payment  or
      Guaranty of Recourse Obligations;

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

            (xiv) if Borrower  shall  continue to be in Default under any of the
      other terms,  covenants or conditions  of this  Agreement not specified in
      subsections  (i) to  (xiii)  above,  for ten (10)  days  after  notice  to
      Borrower from Lender, in the case of any Default

                                      -75-
<PAGE>

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

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

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

      Section 10.2 Remedies.

      (a) Upon the occurrence of an Event of Default,  all or any one or more of
the rights,  powers,  privileges and other remedies  available to Lender against
Borrower under this  Agreement or any of the other Loan  Documents  executed and
delivered by, or applicable to, Borrower or at law or in equity may be exercised
by Lender at any time and from  time to time,  whether  or not all or any of the
Debt shall be declared  due and  payable,  and whether or not Lender  shall have
commenced any foreclosure  proceeding or other action for the enforcement of its
rights  and  remedies  under  any of the  Loan  Documents  with  respect  to the
Property.  Any such actions taken by Lender shall be cumulative  and  concurrent
and may be pursued independently,  singly, successively,  together or otherwise,
at such time and in such order as Lender may  determine in its sole  discretion,
to the fullest extent permitted by law, without impairing or otherwise affecting
the other rights and remedies of Lender  permitted by law, equity or contract or
as set  forth  herein or in the  other  Loan  Documents.  Without  limiting  the
generality of the foregoing,  if an Event of Default is continuing (i) Lender is
not subject to any "one action" or "election of remedies" law or rule,  and (ii)
all liens and other  rights,  remedies or  privileges  provided to Lender  shall
remain in full force and effect until Lender has exhausted all of its

                                      -76-
<PAGE>

remedies against the Property and the Mortgage has been foreclosed,  sold and/or
otherwise realized upon in satisfaction of the Debt or the Debt has been paid in
full.

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

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

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

      Section 10.3 Right to Cure Defaults.

      Lender may, but without any  obligation to do so and without  notice to or
demand on Borrower and without releasing Borrower from any obligation  hereunder
or being  deemed to have  cured  any Event of  Default  hereunder,  make,  do or
perform any  obligation of Borrower  hereunder in such manner and to such extent
as Lender may deem  necessary.  Lender is  authorized to enter upon the Property
for such purposes, or appear in, defend, or bring any action

                                      -77-
<PAGE>

or proceeding to protect its interest in the Property for such purposes, and the
cost and expense  thereof  (including  reasonable  attorneys' fees to the extent
permitted  by law),  with  interest  as  provided in this  Section  10.3,  shall
constitute  a portion of the Debt and shall be due and  payable  to Lender  upon
demand.  All such costs and expenses  incurred by Lender in remedying such Event
of Default or such  failed  payment or act or in  appearing  in,  defending,  or
bringing any action or proceeding  shall bear interest at the Default Rate,  for
the period after such cost or expense was  incurred  into the date of payment to
Lender.  All such costs and expenses  incurred by Lender  together with interest
thereon  calculated  at the Default Rate shall be deemed to constitute a portion
of the Debt and be secured by the liens,  claims and security interests provided
to Lender under the Loan Documents and shall be immediately due and payable upon
demand by Lender therefor.

      Section 10.4 Remedies Cumulative.

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

      XI. MISCELLANEOUS

      Section 11.1 Successors and Assigns.

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

      Section 11.2 Lender's Discretion.

      Whenever pursuant to this Agreement Lender exercises any right given to it
to approve or disapprove,  or any  arrangement or term is to be  satisfactory to
Lender,  the decision of Lender to approve or  disapprove  or to decide  whether
arrangements or terms are satisfactory or not  satisfactory  shall (except as is
otherwise  specifically herein provided) be in the sole discretion of Lender and
shall be final and conclusive.  Prior to a Securitization,  whenever pursuant to
this Agreement the Rating Agencies are given any right to approve or disapprove,
or any  arrangement or term is to be satisfactory  to the Rating  Agencies,  the
decision of Lender to approve or disapprove or to decide whether arrangements or
terms are satisfactory or not satisfactory, based upon Lender's determination of
Rating Agency criteria, shall be substituted therefore.

                                      -78-
<PAGE>

      Section 11.3 Governing Law.

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

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

                                      -79-
<PAGE>

ANY SUCH SUIT, ACTION OR PROCEEDING,  AND BORROWER HEREBY IRREVOCABLY SUBMITS TO
THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT,  ACTION OR PROCEEDING.  BORROWER
DOES HEREBY DESIGNATE AND APPOINT:

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

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

      Section 11.4 Modification, Waiver in Writing.

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

      Section 11.5 Delay Not a Waiver.

      Neither any failure nor any delay on the part of Lender in insisting  upon
strict performance of any term, condition,  covenant or agreement, or exercising
any  right,  power,  remedy or  privilege  hereunder,  or under  any other  Loan
Document, shall operate as or constitute a waiver thereof, nor shall a single or
partial exercise thereof preclude any other future exercise,  or the exercise of
any other right,  power, remedy or privilege.  In particular,  and not by way of
limitation,  by accepting payment after the due date of any amount payable under
this  Agreement or any other Loan  Document,  Lender shall not be deemed to have
waived any right either to

                                      -80-
<PAGE>

require prompt payment when due of all other amounts due under this Agreement or
the other Loan  Documents,  or to declare a default for failure to effect prompt
payment of any such other amount. Lender shall have the right to waive or reduce
any time periods that Lender is entitled to under the Loan Documents in its sole
and absolute discretion.

      Section 11.6 Notices.

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

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

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

          If to Borrower:      GM Olathe, LLC
                               c/o Glimcher Properties Limited Partnership
                               150 East Gay Street
                               Columbus, Ohio 43215
                               Attention: George A. Schmidt, Executive
                               Vice President
                               Facsimile No. (614) 621-9311

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

                                      -81-
<PAGE>

      Section 11.7 Trial by Jury.

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

      Section 11.8 Headings.

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

      Section 11.9 Severability.

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

      Section 11.10 Preferences.

      Lender shall have the continuing  and exclusive  right to apply or reverse
and reapply any and all  payments by Borrower to any portion of the  obligations
of Borrower  hereunder.  To the extent  Borrower  makes a payment or payments to
Lender,  which  payment  or  proceeds  or  any  part  thereof  are  subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to a trustee,  receiver or any other party under any  bankruptcy  law,
state or federal law, common law or equitable cause, then, to the extent of such
payment or proceeds received, the obligations hereunder or part thereof intended
to be satisfied  shall be revived and  continue in full force and effect,  as if
such payment or proceeds had not been received by Lender.

      Section 11.11 Waiver of Notice.

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

                                      -82-
<PAGE>

Documents do not specifically and expressly  provide for the giving of notice by
Lender to Borrower.

      Section 11.12 Remedies of Borrower.

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

      Section 11.13 Expenses; Indemnity.

      (a) Borrower shall pay or, if Borrower fails to pay, reimburse Lender upon
receipt of notice from Lender, for all reasonable costs and expenses  (including
reasonable  attorneys' fees and disbursements)  incurred by Lender in connection
with (i)  Borrower's  ongoing  performance  of and  compliance  with  Borrower's
agreements  and  covenants  contained  in  this  Agreement  and the  other  Loan
Documents on its part to be performed or complied  with after the Closing  Date,
including,  without  limitation,  confirming  compliance with  environmental and
insurance  requirements;  (ii)  after  an  Event of  Default,  Lender's  ongoing
performance  of and compliance  with all  agreements and covenants  contained in
this  Agreement  and the other Loan  Documents  on its part to be  performed  or
complied  with  after the  Closing  Date;  (iii) the  negotiation,  preparation,
execution, delivery and administration of any consents,  amendments,  waivers or
other modifications to this Agreement and the other Loan Documents and any other
documents or matters  requested by Borrower;  (iv) the filing and recording fees
and expenses,  title  insurance and reasonable  fees and expenses of counsel for
providing to Lender all required  legal  opinions,  and other  similar  expenses
incurred,  in creating and perfecting  the Liens in favor of Lender  pursuant to
this  Agreement and the other Loan  Documents;  (v) enforcing or preserving  any
rights, in response to third party claims or the prosecuting or defending of any
action  or  proceeding  or other  litigation,  in each  case  against,  under or
affecting Borrower, this Agreement,  the other Loan Documents,  the Property, or
any other security given for the Loan; and (vi) enforcing any  obligations of or
collecting any payments due from Borrower under this  Agreement,  the other Loan
Documents or with respect to the Property or in connection  with any refinancing
or restructuring of the credit arrangements provided under this Agreement in the
nature of a "work-out" or of any insolvency or bankruptcy proceedings; provided,
however, that Borrower shall not be liable for the payment of any such costs and
expenses to the extent the same arise in connection with any  Securitization  or
by reason of the gross negligence,  illegal acts, fraud or willful misconduct of
Lender.  Any costs due and  payable to Lender may be paid to Lender  pursuant to
the Cash Management Agreement.

      (b) Borrower  shall  indemnify,  defend and hold  harmless  Lender and its
officers,  directors,  agents,  employees (and the successors and assigns of the
foregoing) (the "Lender  Indemnitees") from and against any and all liabilities,
obligations,  losses, damages,  penalties,  actions,  judgments,  suits, claims,
costs, expenses and disbursements of any kind or

                                      -83-
<PAGE>

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

      Section 11.14 Schedules Incorporated.

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

      Section 11.15 Offsets, Counterclaims and Defenses.

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

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

      (a) Borrower and Lender intend that the  relationships  created  hereunder
and under the other  Loan  Documents  be solely  that of  borrower  and  lender.
Nothing  herein or therein is intended to create a joint  venture,  partnership,
tenancy-in-common, or joint tenancy relationship between Borrower and Lender nor
to grant  Lender any  interest  in the  Property  other than that of  mortgagee,
beneficiary or lender.

      (b) This Agreement and the other Loan Documents are solely for the benefit
of Lender and Borrower and nothing contained in this Agreement or the other Loan
Documents  shall be deemed to confer upon anyone  other than Lender and Borrower
any right to insist upon or to enforce the  performance  or observance of any of
the obligations  contained herein or therein.  All conditions to the obligations
of Lender to make the Loan hereunder are imposed solely and  exclusively for the
benefit  of  Lender  and  no  other  Person  shall  have   standing  to  require
satisfaction of such conditions in accordance with their terms or be entitled to
assume that

                                      -84-
<PAGE>

Lender will refuse to make the Loan in the absence of strict compliance with any
or all thereof and no other Person shall under any circumstances be deemed to be
a beneficiary  of such  conditions,  any or all of which may be freely waived in
whole or in part by Lender if, in  Lender's  sole  discretion,  Lender  deems it
advisable or desirable to do so.

      Section 11.17 Publicity.

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

      Section 11.18 Waiver of Marshalling of Assets.

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

      Section 11.19 Waiver of Offsets/Defenses/Counterclaims.

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

      Section 11.20 Conflict; Construction of Documents; Reliance.

      In the event of any conflict  between the provisions of this Agreement and
any of the other Loan Documents, the provisions of this Agreement shall control.
The parties hereto  acknowledge that they were represented by competent  counsel
in connection with the negotiation, drafting and execution of the Loan Documents
and that such Loan Documents shall not be subject to the principle of construing
their meaning against the party which drafted same. Borrower  acknowledges that,
with  respect to the Loan,  Borrower  shall rely solely on its own  judgment and
advisors  in  entering  into the  Loan  without  relying  in any  manner  on any
statements,   representations  or  recommendations  of  Lender  or  any  parent,
subsidiary or Affiliate of Lender. Lender shall not be subject to any limitation
whatsoever  in the exercise of any rights or remedies  available to it under any
of the Loan Documents or any other  agreements or  instruments  which govern the
Loan by virtue of the ownership by it or any parent,  subsidiary or Affiliate of
Lender of any equity interest any of them may acquire in Borrower,  and Borrower
hereby  irrevocably  waives the right to raise any defense or take any action on
the basis of the foregoing with respect to Lender's  exercise of any such rights
or remedies.  Borrower  acknowledges that Lender engages in the business of real
estate financings and other real estate

                                      -85-
<PAGE>

transactions  and  investments  which may be viewed as adverse to or competitive
with the business of Borrower or its Affiliates.

      Section 11.21 Brokers and Financial Advisors.

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

      Section 11.22 Exculpation.

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

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

                                      -86-
<PAGE>

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

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

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

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

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

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

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

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

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

      Notwithstanding  anything to the contrary in this  Agreement,  the Note or
any of the Loan  Documents,  (A) Lender  shall not be deemed to have  waived any
right which Lender may have under Section 506(a),  506(b),  1111(b) or any other
provisions  of the U.S.  Bankruptcy  Code to file a claim for the full amount of
the Debt or to require that all  collateral  shall continue to secure all of the
Debt owing to Lender in  accordance  with the Loan  Documents,  and (B) the Debt
shall be fully  recourse  to Borrower  in the event that (i)  Borrower  fails to
obtain  Lender's prior consent to any  subordinate  mortgage  financing or other
voluntary  Lien  encumbering  the Property in connection  with such  subordinate
mortgage financing;  (ii) Borrower fails to obtain Lender's prior consent to any
assignment,  transfer,  or conveyance of the Property or any interest therein as
required by the Mortgage or this  Agreement;  (iii)  Borrower  files a voluntary
petition under the Bankruptcy  code or any other Federal or state  bankruptcy or
insolvency law; (iv) an Affiliate,  officer,  director,  or representative which
controls, directly or indirectly, Borrower files,

                                      -87-
<PAGE>

or joins in the filing of, an involuntary  petition  against  Borrower under the
Bankruptcy  Code or any other Federal or state  bankruptcy or insolvency law, or
solicits or causes to be solicited  petitioning  creditors  for any  involuntary
petition  against  Borrower  from any  Person;  (v)  Borrower  files  an  answer
consenting to or otherwise acquiescing in or joining in any involuntary petition
filed  against it, by any other  Person under the  Bankruptcy  Code or any other
Federal or state  bankruptcy  or  insolvency  law,  or  solicits or causes to be
solicited  petitioning  creditors for any involuntary  petition from any Person;
(vi) any Affiliate, officer, director, or representative which controls Borrower
consents to or acquiesces in or joins in an application for the appointment of a
custodian,  receiver,  trustee,  or examiner  for Borrower or any portion of the
Property; or (vii) Borrower makes an assignment for the benefit of creditors, or
admits,  in writing or in any legal  proceeding,  its insolvency or inability to
pay its debts as they become due.

      Section 11.23 Prior Agreements.

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

      Section 11.24 Servicer.

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

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

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

                                      -88-
<PAGE>

      Section 11.25 Joint and Several Liability.

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

      Section 11.26 Creation of Security Interest.

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

      Section 11.27 Assignments and Participations.

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

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

      (c) Lender may sell  participations to one or more Persons in or to all or
a portion of its rights and  obligations  under this Loan  Agreement;  provided,
however,  that (i) Lender's  obligations  under this Loan Agreement shall remain
unchanged,  (ii) Lender shall remain  solely  responsible  to the other  parties
hereto for the  performance  of such  obligations,  (ii) Lender shall remain the
holder of any Note for all  purposes of this Loan  Agreement  and (iv)  Borrower
shall  continue  to deal solely and  directly  with  Lender in  connection  with
Lender's rights and obligations  under and in respect of this Loan Agreement and
the other Loan Documents.

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

      Section 11.28 Set-Off.

      In  addition to any rights and  remedies  of Lender  provided by this Loan
Agreement  and by law, the Lender shall have the right,  without prior notice to
Borrower, any

                                      -89-
<PAGE>

such  notice  being  expressly  waived by Borrower  to the extent  permitted  by
applicable law, upon any amount  becoming due and payable by Borrower  hereunder
(whether at the stated  maturity,  by  acceleration or otherwise) to set-off and
appropriate  and apply  against  such  amount any and all  deposits  (general or
special, time or demand,  provisional or final), in any currency,  and any other
credits, indebtedness or claims, in any currency, in each case whether direct or
indirect,  absolute or  contingent,  matured or  unmatured,  at any time held or
owing by Lender or any Affiliate  thereof to or for the credit or the account of
Borrower.  Lender agrees  promptly to notify Borrower after any such set-off and
application made by Lender;  provided that the failure to give such notice shall
not affect the validity of such set-off and application.

      Section 11.29 Partial Release - Expansion.

      (a) Provided no Event of Default  shall have  occurred and remain  uncured
and  provided  Borrower  desires to  transfer  the  Expansion  Parcel for retail
purposes   compatible   with  the  use  and  operation  of  the  Property  as  a
Super-Regional  Shopping Center, Borrower shall have the right from time to time
prior to the Maturity  Date to obtain a release of the lien of the Mortgage (and
related Loan Documents) as to an Expansion Parcel and to modify the Ground Lease
or assign a portion  thereof  so as to exclude  the  Expansion  Parcel  from the
premises  demised  thereby  upon   satisfaction  of  the  following   conditions
precedent:

      (i) Borrower  shall  provide  Lender not less than thirty (30) days notice
(or a shorter  period  of time if  permitted  by Lender in its sole  discretion)
specifying the date (the  "Expansion  Date") on which the partial  release is to
occur provided, however, that Borrower may postpone the Expansion Date from time
to time as long as the extended  date is at least ten (10)  Business  Days after
Notice of such extension;

      (ii) Lender  shall have  received an Officer's  Certificate  (A) as to the
proposed use of the Expansion Parcel,  its  compatibility  with a Super-Regional
Shopping Center and its effects on the operation and use of the remainder of the
Property and (B)  indicating  the Gross Revenue and  Operating  Expenses for the
Property both  immediately  before and  immediately  after the proposed  release
after  taking into  account the  proposed  use of the  Expansion  Parcel and its
effects on income and expense at the Property, together with evidence in support
of such conclusions;

      (iii)  Borrower shall deliver to Lender an opinion of counsel for Borrower
that  is  standard  in  commercial  lending  transactions  and  subject  only to
customary  qualifications,  assumptions  and  exceptions  opining,  among  other
things,  that if a Securitization  of any portion of the Loan has occurred,  the
REMIC Trust formed pursuant to such Securitization will not fail to maintain its
status as a "real  estate  mortgage  investment  conduit"  within the meaning of
Section  860D of the Code as a result of the  partial  release  pursuant to this
Section 11.29;

      (iv) Borrower  shall have  delivered to Lender  evidence that Borrower has
complied with all requirements of and obtained all approvals  required under any
Leases and the Operating  Agreements  applicable to the release of the Expansion
Parcel and that the partial  release does not violate any of the  provisions  of
the  Leases  and  the  Operating  Agreements   including,   without  limitation,
provisions relating to the availability of parking at the Property

                                      -90-
<PAGE>

provided,  however,  that an  Officer's  Certificate  to that  effect  shall  be
sufficient  evidence of such  compliance  and obtaining of such  approvals as to
Leases which are not Major Leases;

      (v) Borrower shall have delivered to Lender (A) at Borrower's  option, (x)
an endorsement to the Title  Insurance  Policy,  (y) an opinion of counsel (from
counsel  reasonably  acceptable to Lender) or (z) a certificate  of an architect
(from an architect  reasonably  acceptable to Lender and licensed to practice in
the State) indicating that the Expansion Parcel has been legally  subdivided for
zoning lot purposes from the remainder of the Property  pursuant to a zoning lot
subdivision in accordance with applicable law, (B) at Borrower's  option, (x) an
endorsement  to the Title  Insurance  Policy,  (y) an opinion  of counsel  (from
counsel  reasonably  acceptable to Lender) or (z) a certificate  of an architect
(from an architect  reasonably  acceptable to Lender and licensed to practice in
the State)  indicating that the balance of the Property  separately  conforms to
and is in  material  compliance  with  all  applicable  Legal  Requirements  and
constitutes  a separate  tax lot(s),  (C) a  certificate  from an  architect  or
engineer  licensed to practice in the State and reasonably  acceptable to Lender
to the effect that the  Expansion  Parcel is not  necessary  for the uses of the
remainder of the Property,  including,  without limitation, for support, access,
driveways,  parking,  utilities,  drainage  flows or any other  purpose,  (after
giving effect to any easements  therefor  reserved over the Expansion Parcel for
the benefit of the remainder of the  Property) and (D) an Officer's  Certificate
with  supporting  documentation  indicating  that either (y) sufficient  parking
remains  on the  remainder  of the  Property  to comply  with all Leases of such
remainder and with all Operating Agreements and which is adequate for the proper
use and enjoyment of the balance of the Property or (z)  reservations of parking
(in favor of such remainder) in the Expansion  Parcel are sufficient (when added
to parking  otherwise  available to the  remainder) to comply with all Leases of
such remainder and with all Operating  Agreements and which are adequate for the
proper use and enjoyment of the remainder of the Property;

      (vi) Intentionally Omitted;

      (vii)  Borrower  shall have  delivered a certificate  from an architect or
engineer (licensed to practice in the State and reasonably acceptable to Lender)
to the effect that any improvements proposed to be built on the Expansion Parcel
will not  adversely  affect the ability to operate and maintain the remainder of
the Property  (after giving effect to any easements  reserved or granted for the
benefit of such remainder or the Expansion Parcel) and will not result in a loss
of more  than  70,000  rentable  square  feet of  retail  space  as shown in the
cross-hatched area on Schedule VIII;

      (viii) The Debt  Service  Coverage  Ratio for the Loan,  after taking into
account any  improvement  which is proposed to be built on the Expansion  Parcel
and its effect on income and expenses at the Property, will not be less than the
Debt Service  Coverage Ratio for the Loan as of the date  immediately  preceding
the release and  Borrower  shall  deliver an  Officer's  Certificate  certifying
thereto and showing the calculations with respect thereto;

      (ix) Borrower shall have  delivered to Lender an  architect's  certificate
certifying  that the plans and drawings for the  improvements to be built on the
Expansion  Parcel and the  improvements to be constructed  pursuant thereto will
comply with all Legal  Requirements The proposed building  improvements shall be
attached  to the  current  mall  Improvements  and shall be  constructed  on the
Expansion Parcel, as shown on Schedule VIII;

                                      -91-
<PAGE>

      (x) Lender shall have received an appraisal of the Property  dated no more
than  sixty  (60) days  prior to the  proposed  Expansion  Date by an  appraiser
acceptable to the Rating Agencies, indicating an appraised value of the Property
after the release,  both before and after  construction  of  improvements  to be
built on the Expansion  Parcel,  equal to or greater than the greater of (y) the
value of the Property prior to the release or (z) one hundred  percent (100%) of
the outstanding principal balance of the Loan on the Expansion Date;

      (xi) Borrower shall have  delivered a metes and bounds  description of the
Expansion  Parcel and a survey of the Expansion  Parcel and the remainder of the
Property which would be standard in commercial lending transactions;

      (xii)  Borrower  shall have delivered to Lender on the date of the release
an  endorsement  to the  policy or  policies  of title  insurance  insuring  the
Mortgage  reflecting  the  release  and (A)  insuring  Lender's  interest in any
easements  created in connection  with the Release,  (B) extending the effective
date of the policy or policies to the  effective  date of the  release,  and (C)
confirming  no change in the  priority of the  Mortgage on the  remainder of the
Property or in the amount of the  insurance or the coverage  under the policy or
policies;

      (xiii)   Borrower  shall  deliver  to  Lender  an  Officer's   Certificate
certifying  that the  requirements  set forth in this  Section  11.29  have been
satisfied;

      (xiv) There shall be a restrictive  covenant contained in an instrument of
record  restricting  the  execution  of any  agreement  with any  Tenant  of the
Property  either  during  such  Tenant's  Lease  term or within  six (6)  months
thereafter which would  contemplate such Tenant opening up a retail store in the
Expansion  Parcel  which would be of the same  operating  division  and the same
general quality and characteristics as such Tenant's use of the space under such
Lease unless Borrower shall have executed a Lease with a replacement  Tenant for
such space being vacated which replacement Tenant is of the same general quality
with  similar  drawing  power as the  vacating  Tenant and which Lease with such
replacement  Tenant is of equal or better economic  benefit  (excluding  initial
tenant  inducements)  to Borrower when compared to the Lease of the Tenant being
replaced;

      (xv) Intentionally Omitted; and

      (xvi)  Borrower shall pay all  out-of-pocket  costs and expenses of Lender
incurred in connection with the partial release,  including Lender's  reasonably
attorneys' fees and expenses.

      (b) If  Borrower  shall  provide  a Letter  of  Credit  to  Lender  on the
Expansion Date as additional security for the Loan, the amount of the Loan equal
to the  amount of the  Letter of Credit  (and the Debt  Service  related to such
amount with respect to subparagraph (i) hereof) (i) shall be disregarded for the
purposes  of the  calculation  in  Section  11.29(a)(viii)  as to  Debt  Service
Coverage Ratio after the release and (ii) shall be added to the appraised  value
of the remainder of the Property after the release for the purposes of doing the
comparison in Section 11.29(a)(x)(y), provided, however, if the Letter of Credit
support was  unnecessary  to meet the  requirement of Section  11.29(a)(x),  the
Letter of Credit shall be returned

                                      -92-
<PAGE>

to Borrower once the Debt Service  Coverage  Ratio reaches the level required by
Section 11.29(a)(viii) if at such time no Event of Default exists.

      (c) If  Borrower  has  elected to  release  the  Expansion  Parcel and the
requirements  of this Section 11.29 have been  satisfied,  the Expansion  Parcel
shall be released from the Lien of the Mortgage (and related Loan Documents) and
the  Ground  Lease  modification  or  partial  assignment  may be  executed.  In
connection  with the release of the Lien,  Borrower shall submit to Lender,  not
less than thirty (30) days prior to the Expansion  Date (or such shorter time as
is acceptable to Lender in its sole discretion),  a release of Lien (and related
Loan  Documents)  for  execution  by  Lender.   Such  release  and  consent  and
subordination  shall be in a form  appropriate in the  jurisdiction in which the
Property is located and shall contain standard provisions  protecting the rights
of  a  releasing  lender.   In  addition,   Borrower  shall  provide  all  other
documentation  Lender  reasonably  requires  to  be  delivered  by  Borrower  in
connection with such release,  together with an Officer's Certificate certifying
that such  documentation (i) is in compliance with all Legal  Requirements,  and
(ii) will effect such release in  accordance  with the terms of this  Agreement.
Borrower shall pay all costs, taxes and expenses  associated with the release of
the  Lien  of the  Mortgage,  including  Lender's  reasonable  attorneys'  fees.
Borrower shall cause  leasehold  title to the Expansion  Parcel so released from
the Lien of the  Mortgage to be  transferred  to and held by a Person other than
Borrower.

      (d) If Borrower is unable to legally  subdivide the Expansion  Parcel from
the  remainder  of  Property,  or if  Borrower  desires  to enter  into a ground
sublease in lieu of conveying leasehold title to the Expansion Parcel,  Borrower
shall have the right to sublease  the  Expansion  Parcel to a Person  other than
Borrower in lieu of such conveyance and Lender shall subordinate the Lien of the
Mortgage and the other Loan  Documents to such  sublease,  provided (A) Borrower
complies  with all of the  conditions to release set forth in this Section 11.29
other than the  requirements  that such Expansion  Parcel be legally  subdivided
from the  remainder of the  Property,  (B) the request for such ground  sublease
shall be accompanied by, at Borrower's  option,  (1) an endorsement to the Title
Insurance Policy, (2) an opinion of counsel (from counsel reasonably  acceptable
to Lender) or (3) an architect's or surveyor's  certificate from an architect or
surveyor reasonably  acceptable to Lender and licensed in the State in which the
Property is located, stating that a subdivision is not required in order for the
remainder  of  the  Property  to  comply  with  Legal   Requirements  after  the
commencement of the ground sublease,  (C) Borrower  delivers  evidence to Lender
indicating that either (1) financing is available from a reliable funding source
to fund the cost of the  improvements to be constructed on the Expansion  Parcel
or (2) the tenant has  sufficient  financial  wherewithal to pay for the cost of
construction  of such  improvements,  (D) such ground sublease shall contain the
following provisions: (1) the Expansion Parcel shall not be used for any purpose
other than that which is compatible with the  Super-Regional  Shopping Center at
the  Property,  (2) the  ground  sublease  shall  require  that  the  tenant  be
responsible for construction of improvements (however, Borrower, as the landlord
thereunder,  may be responsible for  construction of the  improvements  provided
that Borrower  complies with the  provisions of Section  4.1.10),  all allocable
taxes  and  all  insurance,  maintenance,  utility,  repair  and  other  similar
obligations with respect to the tenant's  improvements,  (3) the tenant shall be
required  to  restore  the  demised   premises  in  the  case  of  casualty  and
condemnation  to a safe and  habitable  condition  and/or to remove any  damaged
structures  or debris  therefrom  so as to leave the demised  premises in a safe
condition,  and (4) the tenant shall discharge (unless the same have been bonded
or otherwise secured to Lender's

                                      -93-
<PAGE>

satisfaction)  within  thirty (30) days any  mechanic's  Lien filed  against the
demised  premises  by reason of the acts of the tenant or Persons  claiming  by,
through  or under the  tenant.  Such  ground  sublease  may permit the tenant to
procure mortgage  financing  secured by the leasehold estate created thereby and
such  ground  lease  will  contain no  provisions  which are  inconsistent  with
Borrower's  obligations  under the Loan Documents or which would be unacceptable
to a prudent lender subordinating its mortgage to same (including any provisions
which are materially detrimental to the interests of such lender).

      (e) If a conveyance is made under this Section 11.29 which is stated to be
made for nominal  consideration  or if a lease is made under this Section  11.29
for nominal rent, the same will not be considered a breach of Sections 3.1.24(c)
or 4.2.6  hereof  provided  it is in  effect a  distribution  of an asset to the
indirect  owner of  Borrower  above the level of  Borrower's  sole  member and a
contribution  of capital  to the  transferee  of such deed or lessee  under such
lease, as the case may be.

      Not less than sixty (60) days  prior to the  Expansion  Date (or a shorter
period of time if permitted by the Lender in its sole discretion),  the Borrower
shall provide the Preliminary  Expansion  Documents (as hereinafter  defined) to
the Lender.  Upon receipt of the  Preliminary  Expansion  Documents,  the Lender
shall request that the Rating Agencies issue a Rating Agency Confirmation.  Upon
receipt of the Rating Agency Confirmation, the Lender will issue its conditional
approval  letter  specifying  the terms of its approval so that the Borrower may
proceed to (1) obtain necessary final zoning, subdivision, planning and building
approvals  from  applicable  governmental  authorities,  (2) complete the design
process for the  improvements  to be located on the  Expansion  Parcel,  and (3)
obtain  the  partial  release  of the  Expansion  Parcel  from  the  lien on the
Mortgage.  In  connection  with  the  request  for  Rating  Agency  Confirmation
regarding  a proposed  release of the  Expansion  Parcel,  Lender's  conditional
approval may be withdrawn if the Rating Agencies shall reverse any Rating Agency
Confirmation  issued and Lender's  conditional  approval shall become subject to
Borrower's  compliance  with any additional  requirements  imposed by the Rating
Agencies after the issuance of any Rating Agency  Confirmation.  For purposes of
this Section 11.29(e), the term "Preliminary Expansion Documents" shall mean the
following  documents:  (A) Executed  documents  satisfying the  requirements  of
Section  11.29(a)(ii),  (iii),  (iv),  (viii), (x) and (xiii); and (B) Pro-forma
(unexecuted)  documents meeting the requirements of Section  11.29(a)(v),  (vi),
(vii), (ix), (xi), (xii) and (xiv).

      Section 11.30 Kansas Provision.

      This Agreement is a final expression of the credit  agreement  between the
parties and such written credit agreement may not be contradicted by evidence of
any prior oral credit  agreement or of a  contemporaneous  oral credit agreement
between  Borrower and Lender.  No unwritten  oral credit  agreement  between the
Borrower and Lender exists, as that term is defined in KSA Section 16-118.

Non Standard Terms:     None.

                                      -94-
<PAGE>

Borrower's Initials: ________                Lender's Initials ________

                         [NO FURTHER TEXT ON THIS PAGE]

                                      -95-
<PAGE>

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

                  LENDER:

                  MORGAN STANLEY MORTGAGE CAPITAL INC., a
                  New York corporation

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

                  BORROWER:

                  GM OLATHE, LLC, a Delaware limited liability company

                  By:  GM MEZZ, LLC, a Delaware limited liability company,
                       its sole member

                       By:  GREAT PLAINS METROMALL, LLC, a Delaware
                            limited liability company, its sole member

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

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

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

<PAGE>

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

                                    RENT ROLL

                                   Schedule I
<PAGE>

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

                              INTENTIONALLY OMITTED

                                  Schedule II
<PAGE>

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

                              ORGANIZATIONAL CHART

                                  Schedule III
<PAGE>

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

                      MORGAN STANLEY MORTGAGE CAPITAL INC.
                                    (Lender)

                                     - and -

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

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

                         SUBORDINATION, NON-DISTURBANCE
                            AND ATTORNMENT AGREEMENT

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

                  Dated:

                  Location:

                  County:

                  PREPARED BY AND UPON
                  RECORDATION RETURN TO:

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

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

<PAGE>

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

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

                                    RECITALS:

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

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

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

                                   AGREEMENT:

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

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

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

<PAGE>

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

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

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

<PAGE>

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

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

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

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

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

     If to Lender:   [Lender's Notice]

<PAGE>

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

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

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

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

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

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

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

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

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

<PAGE>

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

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

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

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

<PAGE>

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

                                  LENDER:

                                  [Lender]

                                  By:____________________________________
                                     Name:
                                     Title:

                                  TENANT:

                                  _______________________________
                                  a ____________________

                                  By:____________________________________
                                     Name:
                                     Title:

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

LANDLORD:

______________________, a
____________________________________

By:____________________________________
    Name:
    Title:

<PAGE>

                                 ACKNOWLEDGMENTS

                     [INSERT STATE SPECIFIC ACKNOWLEDGMENT]

<PAGE>

                                    EXHIBIT A
                                    ---------

                                LEGAL DESCRIPTION

<PAGE>

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

                  EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES
                                IN SECTION 3.1.22

NONE

                                   Schedule V
<PAGE>

                                                                     SCHEDULE VI
                                                                     -----------

                         INTEREST RATE CAP CONFIRMATION

--------------------------------------------------------------------------------
Date:

To:       [Borrower]                  From:    [Provider]

Attn:                                 Contact:

Fax:                                  Fax:

Tel:                                  Tel:
--------------------------------------------------------------------------------

Re:  Ref. No. ____________________

      The  purpose  of  this  letter  agreement  is to  confirm  the  terms  and
conditions  of the Swap  Transaction  entered  into between us on the Trade Date
specified  below  (the  "Transaction").  This  letter  agreement  constitutes  a
"Confirmation" as referred to in the ISDA Master Agreement below.

      The definitions and provisions  contained in the 2000 ISDA Definitions (as
published by the  International  Swaps and Derivatives  Association,  Inc.) (the
"Definitions")  are  incorporated  into this  Confirmation.  In the event of any
inconsistency  between the Definitions and this Confirmation,  this Confirmation
will govern.

      (i) This  Confirmation  evidences a complete and binding agreement between
you  and us as to the  terms  of the  Transaction  to  which  this  Confirmation
relates.  In addition,  this Confirmation  supplements,  forms a part of, and is
subject to an agreement in the form of the ISDA Master [(Local Currency - Single
Jurisdiction)]  [(Multicurrency - Cross Border)], with such modifications as are
specified  herein,  as if we had executed an agreement in such form (but without
any Schedule to the Agreement) on the Trade Date hereof (the  "Agreement").  All
provisions contained or incorporated by referenced in the Agreement shall govern
this  Confirmation  except  as  expressly  modified  below.  In the event of any
inconsistency  between the provisions of that  Agreement and this  Confirmation,
this Confirmation will prevail for the purpose of this Transaction.

      (ii) The terms of the particular  Transaction  to which this  Confirmation
relates are as follows:

Party A:                            [Provider].

Party B:                            [Borrower]

Trade Date:

Effective Date:

                                    SCH. VI-1
<PAGE>

Termination Date:

Notional Amount:                    USD  ___________  [amortizing  in accordance
                                    with Schedule 1]

Fixed Amounts:
--------------

   Fixed Amount Payer:              Party B

   Fixed Amount Payer Payment Date: [Date Borrower pays Purchase Price for Cap]

   Fixed Amount:                    USD [Purchase Price for Cap]

Floating Amounts:
-----------------

   Floating Rate Payer:             Party A

   Cap Rate:                            %

   Floating Rate Payer Payment      The  ninth  (9th)   calendar  day  of  every
   Dates:                           calculation     period,     commencing    on
                                    __________,  ____,  up to and  including the
                                    Termination  Date,  subject to adjustment in
                                    accordance  with the Preceding  Business Day
                                    Convention.

   Floating Rate Option:            USD-LIBOR-BBA;  provided,  however, that, on
                                    any  date of  determination,  if  such  rate
                                    does not appear on the  Telerate  Page 3750,
                                    the  rate  for  that   Reset  Date  will  be
                                    determined  as  if  the  parties'  specified
                                    USD-LIBOR-LIBO  as the  applicable  Floating
                                    Rate  Option.  Notwithstanding  anything  to
                                    the  contrary  contained in  Section 7.1  of
                                    the  Definitions,  the Floating  Rate Option
                                    shall be  determined  on the  second  London
                                    Banking  Day prior to the  fifteenth  (15th)
                                    calendar   day  of   each   month   of  such
                                    Calculation Period.

   Designated Maturity:             One month.

   Floating Rate Day Count          Actual/360
   Fraction:

   Floating Rate Reset Dates:       The fifteenth calendar day of each month.

   Period End Dates:                The  fifteenth  (15th)  calendar day of each
                                    month  following  the  Floating  Rate  Reset
                                    Date,  but not  subject  to  adjustment  for
                                    Business Days.

   Business Days:                   New York

                                   SCH. VI-2
<PAGE>

      (iii) Account Details:

Payments to Party A:

Payments to Party B:                PLEASE PROVIDE

      (iv) Additional Provision:

      (1) No  Set-Off.  Payments  by Party A  hereunder  shall  be made  without
Set-off or counterclaim.

      (2) [Tax Reps]

      (3)  Downgrade  Event.  In  the  event  that  Party  A's  [Credit  Support
Provider's]  rating (the "Party A Rating") is (a) downgraded  below a short term
credit  rating  from  Standard & Poor's  Ratings  Services,  a  division  of The
McGraw-Hill  Companies,  Inc. ("S&P") or Fitch,  Inc.  ("Fitch") of "A-1" or (b)
placed "On Watch for Downgrade" or downgraded from either (i) a long term credit
rating from Moody's Investors Services, Inc. ("Moody's") of "Aa3" or (ii) a long
term  credit  rating  from  Moody's of A1 and a short term  credit  rating  from
Moody's of P-1 (all such  ratings,  the "Required  Ratings"),  Party A (x) shall
transfer its obligations  under this Confirmation to an entity with the Required
Ratings,  (y) post collateral  acceptable to the Rating Agencies or (z) cause an
affiliate of Party A to provide a guaranty  acceptable  to the Rating  Agencies,
provided  that if the  Party A Rating is below  "A-1" by S&P or  Fitch,  "A2" by
Moody's (if Party A has only a long term  rating from  Moody's) or "A3" or "P-2"
by  Moody's  (if the  Party A has both long term and  short  term  ratings  from
Moody's),  Party A must comply with the  provisions  of clause (x) above and may
not post collateral.  After a  Securitization,  only the ratings of those Rating
Agencies  rating the  Certificates  at the request of the issuer  thereof  shall
apply.  Failure to comply with this  provision  shall  constitute  an Additional
Termination Event with Party A as the sole Affected Party.

      (4) Addresses for Notices:

      Party A:

      Party B:

      (5) No Default by Party B.  Notwithstanding  anything in the  Agreement to
the  contrary,  if Party B has paid Party A the Fixed Amount when and where due,
no Event of Default or  Termination  Events shall apply to Party B. Upon payment
of the Fixed Amount,  Party A may not designate an Early  Termination  Date with
respect to Party B.

      (6) Legal Opinion.  Each of Party A and Party B shall deliver to the other
Party A legal  opinion with respect to its capacity and  authority to enter into
this Transaction and the  enforceability  of this  Confirmation  [and the Credit
Support  Document].  In the case of Party A, the opinion  shall be  addressed to
Party B and Morgan Stanley Mortgage Capital Inc. ("MSMC").  In the case of Party
B, the opinion shall be addressed to Party A and Morgan Stanley & Co.

                                   SCH. VI-3
<PAGE>

      (7) Credit Support Document: [guarantee]

      (8) Credit Support Provider: : [guarantor]

      (9) No Amendment.  This Confirmation shall not be amended without approval
of  MSMC  (prior  to  a   Securitization)   or  the  Rating  Agencies  (after  a
Securitization).

      (10)  Assignment.  Party  A  hereby  consents  to the  assignment  of this
Confirmation  by  Party B (and  any  assignee  thereof)  in  connection  with an
assignment  of the  related  mortgage  loan or a  Securitization  and  agrees to
execute any separate consent as may be reasonably  requested by Party B (and any
assignee thereof).

      (11) Representations. Each party represents to the other party hereto that
it is an "eligible  contract  participant"  as defined in Section  1a(12) of the
Commodity  Exchange  Act (7 U.S.C.  1a),  as  amended by the  Commodity  Futures
Modernization Act of 2000.

      (12) Governing Law: New York.

      (13) Additional  Definitions.  Section  [12][14] of the Agreement shall be
amended to include the following additional definitions:

            "Rating Agencies" shall mean Moody's, S&P and Fitch.

            "Securitization" shall mean the assignment of this Confirmation to a
      real estate mortgage investment conduit in connection with the issuance of
      mortgage pass-through certificates ("Certificates").

                                   SCH. VI-4
<PAGE>

Please  confirm  that  the  foregoing  correctly  sets  forth  the  terms of our
agreement  Reference No. _______ by executing this Confirmation and returning it
to us.

Best Regards,
[Provider]

                                    SCH. VI-5
<PAGE>

                                   SCHEDULE 1

          FROM                 TO (but excluding)          NOTIONAL AMOUNT
----------------------- ----------------------------- --------------------------

                                    SCH. VI-6
<PAGE>

                                                                    SCHEDULE VII
                                                                    ------------

                         FORM OF SECTION 2.5 CERTIFICATE

      Reference   is   hereby   made  to  the   [o]   Agreement   dated   as  of
____________________ (as amended,  restated,  supplemented or otherwise modified
from time to time, the "Loan Agreement"),  among [o] (the "Borrower"),  [o] (the
"Lender")  and  [o].  Pursuant  to the  provisions  of  Section  2.5 of the Loan
Agreement, the undersigned hereby certifies that:

      1.    It is a ___ natural individual person, ____ treated as a corporation
            for U.S.  federal income tax purposes,  ____ disregarded for federal
            income  tax  purposes  (in  which  case a copy of this  Section  2.5
            Certificate is attached in respect of its sole beneficial owner), or
            ____ treated as a partnership  for U.S.  federal income tax purposes
            (one must be checked).

      2.    It is the beneficial owner of amounts received  pursuant to the Loan
            Agreement.

      3.    It is not a bank,  as such term is used in section  881(c)(3)(A)  of
            the Internal  Revenue Code of 1986, as amended (the "Code"),  or the
            Credit  Agreement is not,  with respect to the  undersigned,  a loan
            agreement  entered  into in the  ordinary  course  of its  trade  or
            business, within the meaning of such section.

      4.    It is not a  10-percent  shareholder  of  the  Borrower  within  the
            meaning of section 871(h)(3) or 881(c)(3)(B) of the Code.

      5.    It is not a controlled  foreign  corporation  that is related to the
            Borrower within the meaning of section 881(c)(3)(C) of the Code.

      6.    Amounts  paid to it under  the Loan  Documents  are not  effectively
            connected  with its  conduct  of a trade or  business  in the United
            States.

                                   SCH. VII-1
<PAGE>

                                       [NAME OF UNDERSIGNED]

                                       By: __________________________

                                       Title: _______________________

Date: _______________, ______

By:____________________________________
                 Name:
                Title:

Acknowledged and agreed as of the date first written above:

[Borrower]

By:____________________________________
                 Name:
                Title:

                                   SCH. VII-2
<PAGE>

                                                                   SCHEDULE VIII
                                                                   -------------

                                EXPANSION PARCEL

                                  SCH. VIII-1

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