Document:

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                           LOAN AND SECURITY AGREEMENT

                          Dated as of February 13, 2004

                                     Between

                               731 OFFICE ONE LLC
                                   as Borrower

                                       and

                      GERMAN AMERICAN CAPITAL CORPORATION,
                                    as Lender

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                                TABLE OF CONTENTS

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I.    DEFINITIONS; PRINCIPLES OF CONSTRUCTION..........................................................        1
Section 1.1       Definitions..........................................................................        1
Section 1.2       Principles of Construction...........................................................       27

II.   GENERAL TERMS....................................................................................       27
Section 2.1       Loan; Disbursement to Borrower.......................................................       27
Section 2.2       Interest; Loan Payments; Late Payment Charge.........................................       28
Section 2.3       Prepayments..........................................................................       29
Section 2.4       Regulatory Change; Taxes.............................................................       30

III.  CASH MANAGEMENT..................................................................................       32
Section 3.1       Cash Management......................................................................       32

IV.   REPRESENTATIONS AND WARRANTIES...................................................................       43
Section 4.1       Borrower Representations.............................................................       43
Section 4.2       Survival of Representations..........................................................       53

V.    BORROWER COVENANTS...............................................................................       53
Section 5.1       Affirmative Covenants................................................................       53
Section 5.2       Negative Covenants...................................................................       63

VI.   INSURANCE; CASUALTY; CONDEMNATION; RESTORATION...................................................       66
Section 6.1       Insurance Coverage Requirements......................................................       66
Section 6.2       Condemnation and Insurance Proceeds..................................................       71

VII.  IMPOSITIONS, OTHER CHARGES, LIENS AND OTHER ITEMS................................................       77
Section 7.1       Borrower to Pay Impositions and Other Charges........................................       77
Section 7.2       No Liens.............................................................................       77
Section 7.3       Contest..............................................................................       78

VIII. TRANSFERS, INDEBTEDNESS AND SUBORDINATE LIENS....................................................       79
Section 8.1       Restrictions on Transfers............................................................       79
Section 8.2       Sale of Building Equipment...........................................................       79
Section 8.3       Immaterial Transfers and Easements, etc..............................................       79
Section 8.4       Intentionally Omitted..............................................ERROR! BOOKMARK NOT DEFINED.
Section 8.5       Permitted Transfers..................................................................       80
Section 8.6       Deliveries to Lender.................................................................       81
Section 8.7       Loan Assumption......................................................................       81
Section 8.8       Bloomberg Lease......................................................................       82

IX.   DEFEASANCE.......................................................................................       85
Section 9.1       Defeasance...........................................................................       85

X.    MAINTENANCE OF PROPERTY; ALTERATIONS.............................................................       88
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Section 10.1      Maintenance of Property..............................................................       88
Section 10.2      Conditions to Alteration.............................................................       89
Section 10.3      Costs of Alteration..................................................................       89

XI.   BOOKS AND RECORDS, FINANCIAL STATEMENTS, REPORTS AND OTHER INFORMATION, LOW DSCR PERIOD..........       90
Section 11.1      Books and Records....................................................................       90
Section 11.2      Financial Statements.................................................................       91

XII.  ENVIRONMENTAL MATTERS............................................................................       93
Section 12.1      Representations......................................................................       93
Section 12.2      Covenants............................................................................       93
Section 12.3      Environmental Reports................................................................       94
Section 12.4      Environmental Indemnification........................................................       94
Section 12.5      Recourse Nature of Certain Indemnifications..........................................       95

XIII. INTENTIONALLY OMITTED............................................................................       95

XIV.  SECURITIZATION AND PARTICIPATION.................................................................       95
Section 14.1      Sale of Note and Securitization......................................................       95
Section 14.2      Cooperation with Rating Agencies.....................................................       97
Section 14.3      Securitization Financial Statements..................................................       97
Section 14.4      Securitization Indemnification.......................................................       97
Section 14.5      Certain Indemnifications.............................................................      100
Section 14.6      Retention of Servicer................................................................      100

XV.   ASSIGNMENTS AND PARTICIPATIONS...................................................................      100
Section 15.1      Intentionally Omitted................................................................      100
Section 15.2      Intentionally Omitted................................................................      100
Section 15.3      Substitute Notes.....................................................................      100
Section 15.4      Participations.......................................................................      101
Section 15.5      Disclosure of Information............................................................      101
Section 15.6      Security Interest in Favor of Federal Reserve Bank...................................      101

XVI.  RESERVE ACCOUNTS.................................................................................      101
Section 16.1      Tax Reserve Account..................................................................      101
Section 16.2      Insurance Reserve Account............................................................      102
Section 16.3      Structural Reserve Account...........................................................      103
Section 16.4      Additional Debt Service Reserve Account..............................................      104
Section 16.5      Cash Trap Reserve Account............................................................      104

XVII. DEFAULTS.........................................................................................      105
Section 17.1      Event of Default.....................................................................      105
Section 17.2      Remedies.............................................................................      110
Section 17.3      Remedies Cumulative; Waivers.........................................................      112
Section 17.4      Costs of Collection..................................................................      112

XVIII.SPECIAL PROVISIONS...............................................................................      113
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Section 18.1      Exculpation..........................................................................      113

XIX.  MISCELLANEOUS....................................................................................      116
Section 19.1      Survival.............................................................................      116
Section 19.2      Lender's Discretion..................................................................      116
Section 19.3      Governing Law........................................................................      116
Section 19.4      Modification, Waiver in Writing......................................................      117
Section 19.5      Delay Not a Waiver...................................................................      117
Section 19.6      Notices..............................................................................      118
Section 19.7      TRIAL BY JURY........................................................................      119
Section 19.8      Headings.............................................................................      120
Section 19.9      Severability.........................................................................      120
Section 19.10     Preferences..........................................................................      120
Section 19.11     Waiver of Notice.....................................................................      120
Section 19.12     Expenses; Indemnity..................................................................      120
Section 19.13     Exhibits and Schedules Incorporated..................................................      123
Section 19.14     Offsets, Counterclaims and Defenses..................................................      123
Section 19.15     Liability of Assignees of Lender.....................................................      123
Section 19.16     No Joint Venture or Partnership; No Third Party Beneficiaries........................      123
Section 19.17     Publicity............................................................................      124
Section 19.18     Waiver of Marshalling of Assets......................................................      124
Section 19.19     Waiver of Counterclaim and other Actions.............................................      124
Section 19.20     Conflict; Construction of Documents; Reliance........................................      124
Section 19.21     Prior Agreements.....................................................................      125
Section 19.22     USA Patriot Act Notification.........................................................      125
Section 19.23     Tax Treatment........................................................................      125
Section 19.24     Counterparts.........................................................................      126
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                             EXHIBITS AND SCHEDULES

EXHIBIT A        INTENTIONALLY DELETED
EXHIBIT B        FORM OF TENANT NOTIFICATION LETTER
EXHIBIT C        OWNERSHIP DIAGRAM
EXHIBIT D        LITIGATION SCHEDULE
EXHIBIT E        INTENTIONALLY DELETED
EXHIBIT F        FORM OF SUBORDINATION, NON-DISTURBANCE,
                 ATTORNMENT AND ESTOPPEL AGREEMENT
EXHIBIT G        FORM OF COMPLETION GUARANTY

SCHEDULE I       LIST OF SECURITY DEPOSITS
SCHEDULE II      LIST OF ERISA EXCEPTIONS
SCHEDULE III     SCHEDULE TO REPRESENTATION 4.1.43

<PAGE>

                           LOAN AND SECURITY AGREEMENT

                  THIS LOAN AND SECURITY AGREEMENT dated as of February 13, 2004
(as amended, restated, replaced, supplemented or otherwise modified from time to
time, this AGREEMENT), between 731 OFFICE ONE LLC, a Delaware limited liability
company (BORROWER) having an address for notice purposes c/o Alexander's Inc.,
888 Seventh Avenue, New York, New York 10019, and GERMAN AMERICAN CAPITAL
CORPORATION, a Maryland corporation, having an address at 60 Wall Street, New
York, New York 10005 (together with its successors and assigns, LENDER).

                              W I T N E S S E T H:

                  WHEREAS, Borrower desires to obtain the Loan (as hereinafter
defined) from Lender;

                  WHEREAS, Lender is willing to make the Loan to Borrower,
subject to and in accordance with the terms of this Agreement and the other Loan
Documents (as hereinafter defined).

                  NOW, THEREFORE, in consideration of the making of the Loan by
Lender and the covenants, agreements, representations and warranties set forth
in this Agreement, the parties hereto hereby covenant, 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 required or unless the context clearly indicates a contrary intent:

                  ACCOUNT AGREEMENT shall mean the Account and Control
Agreement, dated the date hereof, among Lender, Borrower and Cash Management
Bank.

                  ACCOUNT COLLATERAL shall have the meaning set forth in Section
3.1.2.

                  ADDITIONAL DEBT SERVICE RESERVE ACCOUNT shall have the meaning
set forth in Section 3.1.1.

                  ADDITIONAL NON-CONSOLIDATION OPINION shall have the meaning
set forth in Section 4.1.29(b).

                  AFFILIATE shall mean, with respect to any specified Person,
any other Person directly or indirectly controlling or controlled by or under
direct or indirect common control with, or any general partner or managing
member in, such specified Person. An Affiliate of a Person includes, without
limitation, (i) any officer or director of such Person, (ii) any record or
beneficial owner of more than 20% of any class of

<PAGE>

ownership interests of such Person and (iii) any Affiliate of the foregoing. For
the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities or other beneficial interest, by contract or otherwise; and the terms
"controlling" and "controlled" have the meanings correlative to the foregoing.

                  AGREEMENT shall mean this Agreement, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.

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

                  ALTERATIONS shall have the meaning set forth in Article X.

                  ALTERATIONS RESERVE ACCOUNT shall have the meaning set forth
in Section 3.1.1.

                  ANNUAL BUDGET shall mean the operating budget for the Property
prepared by Borrower or Manager, on Borrower's behalf, pursuant to the
Management Agreement, for the applicable Fiscal Year or other period setting
forth, in reasonable detail, Borrower's or Manager's (as applicable) good faith
estimates of the anticipated results of operations of the Property, including
revenues from all sources, all Operating Expenses, management fees and Capital
Expenditures.

                  ANNUAL REPORTS shall have the meaning set forth in Section
11.2.2 hereof.

                  ANTICIPATED REPAYMENT DATE shall have the meaning set forth in
the Note.

                  APPLICABLE INTEREST RATE shall have the meaning set forth in
the Note.

                  APPROVED BANK shall have the meaning set forth in the Account
Agreement.

                  APPROVED CONTRACTOR shall mean Amec, Bovis Lend Lease,
Skanska, Structure Tone, Turner Construction or any other general contractor
approved by Lender in its sole but reasonable discretion.

                  APPROVED OPERATING EXPENSES shall mean (i) the monthly
Operating Expenses as set forth on the Annual Budget approved by Lender pursuant
to Section 11.2.6 plus (ii) the amount by which the actual amounts paid or
payable for such month for non-discretionary items, including, without
limitation, real estate taxes, insurance premiums, electric, gas, oil, water,
sewer or other utility services to the Condominium Unit exceeds the budgeted
amount for each such line item on the Annual Budget; provided, however, that if
such Annual Budget has not been approved by Lender, then the term APPROVED
OPERATING EXPENSES shall mean the amount of Operating Expenses set forth on the
immediately preceding Annual Budget approved by the Lender adjusted
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upwards, but not downwards for discretionary items by the annual increase (if
any) in the Consumer Price Index (and subject to actual increases for
non-discretionary items).

                  ASSIGNMENT OF LEASES shall mean that certain first priority
(subject to Permitted Encumbrances) Assignment of Leases, Rents and Security
Deposits, dated as of the date hereof, from Borrower, as assignor, to Lender, as
assignee, assigning to Lender all of Borrower's interest in and to the Bloomberg
Lease, Rents and Security Deposits as security for the Loan, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.

                  ASSIGNMENT OF MANAGEMENT AGREEMENT shall mean that certain
Manager's Consent and Subordination of Management Agreement, dated the date
hereof, among Lender, Borrower and Manager, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.

                  ASSUMPTION FEE shall have the meaning set forth in Section
8.7.

                  BANKRUPTCY ACTIONS shall have the meaning ascribed thereto in
the definition of "Single Purpose Entity" herein.

                  BANKRUPTCY CODE shall mean Title 11, U.S.C.A., as amended from
time to time and any successor statute thereto.

                  BLOOMBERG shall mean Bloomberg L.P., a Delaware limited
partnership, together with its permitted successors and assigns under the
Bloomberg Lease.

                  BLOOMBERG DEFAULT shall have the meaning set forth in Section
17.1(b).

                  BLOOMBERG LEASE shall mean the Agreement of Lease, dated as of
April 30, 2001, as amended by (i) a letter agreement, dated December 20, 2001,
(ii) a letter agreement, dated January 30, 2002, (iii) a First Amendment of
Lease, dated as of April 19, 2002, (iv) a letter agreement, dated July 3, 2002,
(v) a letter agreement, dated September 30, 2002, (vi) a letter agreement, dated
February 5, 2003, (vii) a letter agreement, dated March 14, 2003, and (viii) a
letter agreement, dated May 22, 2003 (together with any permitted amendments or
supplements thereto), between Seven Thirty One Limited Partnership (as
predecessor in interest to Borrower), as landlord, and Bloomberg, as tenant.

                  BLOOMBERG SNDA shall mean the Subordination, Non-Disturbance,
Attornment and Estoppel Agreement, dated as of the date hereof, among Lender,
Borrower, as landlord, and Bloomberg, as tenant.

                  BORROWER has the meaning set forth in the first paragraph of
this Agreement.

                  BORROWER'S ACCOUNT shall mean the following account:

                           Account Name:    731 Office One Operating Acct.
<PAGE>

                           Account Number:  230-334482
                           Bank Address:    JPMorgan Chase Bank
                                            4 New York Plaza, 13th Floor
                                            New York, New York 10004
                           ABA Number:      021000021

                  BUILDING shall have the meaning set forth in the Condominium
Declaration.

                  BUILDING EQUIPMENT shall have the meaning set forth in the
Security Instrument.

                  BUSINESS DAY shall mean any day other than a Saturday, Sunday
or any other day on which national banks in New York or in the state in which
Servicer is located (as identified in Section 19.6) are not open for business.

                  BY-LAWS shall mean the By-Laws of the Beacon Court Condominium
(together with any permitted amendments or supplements thereto).

                  CAPITAL EXPENDITURES shall mean any amount incurred in respect
of capital items which in accordance with GAAP would not be included in
Borrower's annual financial statements for an applicable period as an operating
expense of the Property and is not reasonably expected by Borrower to be a
regularly recurring operating expense of the Property.

                  CASH shall mean the legal tender of the United States of
America.

                  CASH AND CASH EQUIVALENTS shall mean any or a combination of
the following: (i) Cash, and (ii) U.S. Government Obligations.

                  CASH MANAGEMENT BANK shall mean JP Morgan Chase or any
successor Approved Bank acting as Cash Management Bank under the Account
Agreement or other financial institution reasonably approved by the Lender and,
if a Securitization has occurred, the Rating Agencies.

                  CASH TRAP PERIOD shall mean any period where a (i) Low DSCR
Period has occurred and is continuing and/or (ii) any Casualty Restoration
Period has occurred and is continuing, in each case, as determined by Lender in
accordance with the terms of Section 16.5 hereof.

                  CASH TRAP RESERVE ACCOUNT shall have the meaning set forth in
Section 3.1.1.

                  CASUALTY RESTORATION PERIOD shall mean the period commencing
on a Casualty Event and ending on the Casualty Rent Restoration Date, if any.

                  CASUALTY RENT RESTORATION DATE the day, if any that Bloomberg
resumes paying Rent for the portion of space affected by the applicable Casualty
Event (provided
<PAGE>

that no other Casualty Restoration Period is then continuing) as determined by
Lender in accordance with the terms of Section 16.5 hereof.

                  CASUALTY EVENT shall mean a casualty affecting 10% or more of
the Property which entitles Bloomberg to a rent abatement under the Bloomberg
Lease.

                  CLOSING DATE shall mean the date hereof.

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

                  COLLATERAL ACCOUNTS shall have the meaning set forth in
Section 3.1.1.

                  COLLECTION ACCOUNT shall have the meaning set forth in Section
3.1.1 hereof.

                  COLLECTION PERIOD shall have the meaning set forth in Section
3.1.6.

                  COMMON ELEMENTS shall have the meaning provided in the
Condominium Declaration.

                  COMPLETION GUARANTY shall have the meaning set forth in
Section 6.2.4 hereof.

                  COMPONENT NOTES shall mean, collectively, that certain (i)
Promissory Note A-1 in the original principal amount of Ninety Million Dollars
($90,000,000), (ii) Promissory Note A-2 in the original principal amount of
Ninety Five Million Dollars ($95,000,000), (iii) Promissory Note A-3 in the
original principal amount of Thirty Five Million Dollars ($35,000,000) (iv)
Promissory Note A-4 in the original principal amount of Ninety Four Million
Dollars ($94,000,000), (v) Note A-X in the original notional amount of Eighty
Six Million Dollars ($86,000,000) and (vi) Promissory Note B in the original
principal amount of Eighty Six Million Dollars ($86,000,000), each made by
Borrower to Lender, dated as of the date hereof, as the same may be amended,
restated, replaced, substituted (including any components or subcomponents)
supplemented or otherwise modified from time to time.

                  CONDOMINIUM ASSOCIATION shall have the meaning set forth in
the Bloomberg Lease.

                  CONDOMINIUM BOARD shall mean (i) the board of managers of the
Beacon Court Condominium designated pursuant to the Condominium Declaration and
(ii) the board of managers comprised of representatives of the Office Unit
Owners (as such term is defined in the Condominium Declaration) designated
pursuant to the Condominium Declaration.
<PAGE>

                  CONDOMINIUM DECLARATION shall mean that certain Declaration of
Condominium made under the Condominium Act of the State of New York (Article 9-B
of the Real Property Law of the State of New York), dated December 4, 2003 and
recorded on February 4, 2004, in the Office of the Register, The City of New
York, County of New York, in CRFN 2004000064392 (together with any permitted
modifications, amendments, restatements or supplements).

                  CONDOMINIUM DOCUMENTS shall mean the Condominium Declaration
and By-Laws and any additions or amendments permitted thereto.

                  CONDOMINIUM REGIME shall have the meaning provided in Section
5.1.23.

                  CONDOMINIUM UNIT shall have the meaning set forth in the
Security Instrument.

                  CONTROL shall mean (i) the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a Person, whether through ownership of voting securities, by contract or
otherwise and (ii) the ownership, direct or indirect, of no less than 51% of the
voting securities of such Person, and the terms Controlled, Controlling and
Common Control shall have correlative meanings.

                  CREDIT WRAP INSURANCE POLICY shall mean that certain "Credit
Wrap Insurance Policy" from Lexington Insurance Company, policy #7472483
covering the Property (as defined in the Condominium Documents).

                  CUT-OFF DATE shall have the meaning set forth in Section
6.2.3.

                  DBS shall have the meaning set forth in Section 14.4.2(b).

                  DBS GROUP shall have the meaning set forth in Section
14.4.2(b).

                  DEBT shall mean, with respect to any Person at any time, (a)
indebtedness or liability of such Person for borrowed money whether or not
evidenced by bonds, debentures, notes or other instruments, or for the deferred
purchase price of property or services (excluding trade obligations); (b)
obligations of such Person as lessee under leases which should have been or
should be, in accordance with GAAP, recorded as capital leases; (c) current
liabilities of such Person in respect of unfunded vested benefits under plans
covered by Title IV of ERISA; (d) obligations issued for, or liabilities
incurred on the account of, such Person; (e) obligations or liabilities of such
Person arising under letters of credit, credit facilities or other acceptance
facilities; (f) obligations of such Person under any guarantees or other
agreement to become secondarily liable for any obligation of any other Person,
endorsements (other than for collection or deposit in the ordinary course of
business) and other contingent obligations to purchase, to provide funds for
payment, to supply funds to invest in any Person or otherwise to assure a
creditor against loss; (g) obligations of such Person secured by any Lien on any
property of such Person, whether or not the obligations have been assumed by
such Person; or (h) obligations of such Person under any interest rate or
currency exchange agreement.
<PAGE>

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

                  DEBT SERVICE COVERAGE RATIO shall mean a ratio, calculated by
Lender in accordance with the terms of Section 11.2.9 hereof as of the last day
of each calendar quarter for the trailing twelve (12) calendar month period then
ended, in which:

                  (a)      the numerator is the Net Operating Income, as stated
on Borrower's most recent quarterly financial statements delivered to Lender
pursuant to Section 11.2, for the trailing twelve (12) calendar month period
(during the first year of the Loan, if quarterly financial statements are not
available for a twelve (12) calendar month period then the most recent quarterly
statements available for the one, two or three quarters most recently then
ended, as applicable, shall be used on an annualized basis) immediately prior to
the applicable calculation date; provided that from and after the final Rent
Commencement Date under the Bloomberg Lease, the Net Operating Income for the
purposes of determining the Debt Service Coverage Ratio shall equal the total
net rental payments paid under the Bloomberg Lease for the prior twelve (12)
calendar months (or, annualized payment stream if less than twelve (12) calendar
months) and during any period prior to such final Rent Commencement Date shall
include amounts paid out of the Additional Debt Service Reserve Account for Debt
Service during such trailing twelve (12) month period; and

                  (b)      the denominator is the Debt Service for the
immediately preceding twelve (12) Interest Periods (annualized during the first
year of the Loan).

                  DEBT SERVICE RESERVE ACCOUNT shall have the meaning set forth
in Section 3.1.1.

                  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 have the meaning set forth in the Note.

                  DEFEASANCE shall have the meaning provided in Section 9.1.1.

                  DEFEASANCE COLLATERAL shall mean Defeasance Eligible
Investments pledged to Lender as collateral pursuant to Section 9.1.1
(including, without limitation, all amounts then on deposit in the Defeasance
Collateral Account).

                  DEFEASANCE COLLATERAL ACCOUNT shall have the meaning provided
in Section 9.1.1.

                  DEFEASANCE COLLATERAL REQUIREMENT shall mean with respect to
the Defeasance of the Lien of the Security Instrument, Defeasance Collateral in
an amount sufficient to provide payment of all (A) principal indebtedness
outstanding as of the date of Defeasance under the Note as it becomes due
through the Anticipated Repayment Date (and, notwithstanding any term to the
contrary in the Loan Documents, calculated by
<PAGE>

assuming all the Indebtedness outstanding as of the date of the Defeasance is
due in full on the Anticipated Repayment Date) and (B) scheduled interest on the
Loan as it becomes due through the Anticipated Repayment Date.

                  DEFEASANCE ELIGIBLE INVESTMENTS shall mean obligations or
securities not subject to prepayment, call or early redemption which are direct
obligations of, or obligations fully guaranteed as to timely payment by, the
United States of America or any agency or instrumentality of the United States
of America, the obligations of which are backed by the full faith and credit of
the United States of America, the ownership of which will not cause Lender to be
an "investment company" under the Investment Company Act of 1940, as amended, as
evidenced by an Opinion of Counsel reasonably acceptable to Lender, and which
qualify under Section 1.860G-2(a)(8) of the Treasury regulations. All such
obligations or securities shall mature or be redeemable, or provide for payments
of interest thereon on or prior to the Business Day preceding the date principal
and interest payments are scheduled to be paid under the Note.

                  DEFEASANCE LOCKOUT PERIOD shall have the meaning set forth in
the Note.

                  DEFEASANCE NOTE shall have the meaning provided in Section
9.1.1.

                  DEFEASANCE SECURITY AGREEMENT shall have the meaning provided
in Section 9.1.1.

                  DEFICIENCY shall have the meaning set forth in Section
6.2.4(b).

                  DISCLOSURE DOCUMENTS shall have the meaning set forth in
Section 14.4.1.

                  ELIGIBLE ACCOUNT has the meaning set forth in the Account
Agreement.

                  ENVIRONMENTAL CERTIFICATE shall have the meaning set forth in
Section 12.2.

                  ENVIRONMENTAL CLAIM shall mean any claim, action, cause of
action, investigation or written notice by any Person alleging potential
liability (including potential liability for investigatory costs, cleanup costs,
natural resource damages, property damages, personal injuries or penalties)
arising out of, based upon or resulting from (a) the presence, threatened
presence, release or threatened release into the environment of any Hazardous
Substances from or at the Property, or (b) the violation, or alleged violation,
of any Environmental Law relating to the Property.

                  ENVIRONMENTAL CONSULTANT shall mean National Assessment
Corporation or such other Independent environmental consulting firm having at
least five years experience (i) conducting environmental assessments for
properties similar to the Property and (ii) preparing and supervising
remediation plans for properties similar to the Property, which firm is selected
by Borrower and is reasonably acceptable to Lender.

                  ENVIRONMENTAL EVENT shall have the meaning set forth to such
term in Section 12.2.
<PAGE>

                  ENVIRONMENTAL INDEMNITY shall mean the Environmental
Indemnity, dated the date hereof, made by Guarantor and Borrower for the benefit
of Lender.

                  ENVIRONMENTAL LAWS shall mean all federal, state and local
laws, statutes, rules, ordinances, and regulations relating to pollution or
protection of the environment (including, without limitation, ambient air,
surface water, ground water, land surface or subsurface strata) in effect during
the term of the Loan, including, without limitation laws, statutes, rules,
ordinances and regulations relating to emissions, discharges or releases of
Hazardous Substances, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Substances including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C.Sections 9601 et seq.; the Resource Conservation and Recovery Act of 1976,
42 U.S.C. Sections 6901 et seq.; the Toxic Substance Control Act, 15 U.S.C.
Sections 2601 et seq.; the Water Pollution Control Act (also known as the Clean
Water Act), 33 U.S.C. Section 1251 et seq.; the Clean Air Act, 42 U.S.C. Section
7401 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801
et seq.; the Safe Drinking Water Act, 21 U.S.C. Section 349; 42 U.S.C. Section
201 and Section 300 et seq.; the National Environmental Policy Act of 1969, 42
U.S.C. Section 4321; the Superfund Amendment and Reauthorization Act of 1986,
codified in scattered Sections of 10 U.S.C., 29 U.S.C., 33 U.S.C. and 42 U.S.C.;
and Title III of the Superfund Amendment and Reauthorization Act, 40 U.S.C.
Section 1101 et seq., as the same may be hereafter amended or modified during
the term of the Loan.

                  ENVIRONMENTAL REPORTS shall have the meaning set forth in
Section 12.1.

                  ERISA shall mean the United States Employee Retirement Income
Security Act of 1974, as amended from time to time, and the regulations
promulgated and the rulings issued thereunder.

                  EVENT OF DEFAULT shall have the meaning set forth in Section
17.1(a).

                  EXCESS CASH FLOW shall have the meaning set forth in Section
3.1.6.

                  EXCHANGE ACT shall have the meaning set forth in Section
14.4.1.

                  EXCUSABLE DELAY shall mean a delay solely 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
Borrower's lack of funds in and of itself shall not be deemed a cause beyond the
control of Borrower.

                  FISCAL YEAR shall mean each twelve (12) month period
commencing on January 1 and ending on December 31 during each year of the term
of the Loan or the portion of any such 12-month period falling within the term
of the Loan in the event that such a 12-month period occurs partially before or
after the term of the Loan.

                  GAAP shall mean the generally accepted accounting principles
set forth in the opinions and pronouncements of the Accounting Principles Board
and the American

<PAGE>

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, to the extent such principles are applicable
to the facts and circumstances on the date of determination.

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

                  GUARANTOR shall mean Alexander's Inc., a Delaware corporation.

                  HAZARDOUS SUBSTANCE shall mean any material, waste or
substance which is:

                  (a)      included within the definition of "hazardous
substances," "hazardous materials," "toxic substances," or "solid waste" in or
pursuant to any Environmental Law, or subject to regulation and subject to any
Environmental Law;

                  (b)      listed in and subject to the United States Department
of Transportation Optional Hazardous Materials Table, 49 C.F.R. Section 172.101
enacted as of the date hereof or hereafter amended, or in the United States
Environmental Protection Agency List of Hazardous Substances and Reportable
Quantities, 40 C.F.R. Part 302, as enacted as of the date hereof or as hereafter
amended during the term of the Loan; or

                  (c)      an explosive, radioactive, friable, asbestos,
polychlorinated biphenyl, oil or petroleum product subject to any Environmental
Law.

                  HOLDING ACCOUNT shall have the meaning set forth in Section
3.1.1.

                  IMPOSITIONS shall mean all taxes (including all ad valorem,
sales (including those imposed on lease rentals), use, single business, gross
receipts, value added, intangible transaction, privilege or license or similar
taxes), governmental assessments (including all assessments for public
improvements or benefits, whether or not commenced or completed prior to the
date hereof and whether or not commenced or completed within the term of this
Agreement), water, sewer or other rents and charges, excises, levies, fees
(including license, permit, inspection, authorization and similar fees), and all
other governmental charges, in each case whether general or special, ordinary or
extraordinary, or foreseen or unforeseen, of every character in respect of the
Property and/or any Rents (including all interest and penalties thereon), which
at any time prior to, during or in respect of the term hereof may be assessed or
imposed on or in respect of or be a Lien upon (a) Borrower (including all
income, franchise, single business or other taxes imposed on Borrower for the
privilege of doing business in the jurisdiction in which the Property is
located), (b) the Property, or any other collateral delivered or pledged to
Lender in connection with the Loan, or any part thereof, or any Rents therefrom
or any estate, right, title or interest therein, or (c) any occupancy,
operation, use or possession of,
<PAGE>

or sales from, or activity conducted on, or in connection with the Property or
the leasing or use of all or any part thereof. Impositions shall exclude, any
tax, assessment, levy or charge imposed on (i) any tenant occupying any portion
of the Property, (ii) any third party manager of the Property, including any
Manager, or (iii) Borrower or Lender in the nature of a capital levy, estate,
inheritance, succession, income or net revenue tax.

                  IMPROVEMENTS shall have the meaning set forth in the Security
Instrument.

                  INCREASED COSTS shall have the meaning set forth in Section
2.4.1.

                  INDEBTEDNESS shall mean, at any given time, the Principal
Amount, together with all accrued and unpaid interest thereon and all other
obligations and liabilities due or to become due to Lender pursuant hereto,
under the Note or in accordance with the other Loan Documents and all other
amounts, sums and expenses paid by or payable to Lender hereunder or pursuant to
the Note or the other Loan Documents.

                  INDEMNIFIED PARTIES shall have the meaning set forth in
Section 19.12(b).

                  INDEPENDENT shall mean, when used with respect to any Person,
a Person who: (i) does not have any direct financial interest or any material
indirect financial interest in any Borrower or in any Affiliate of any Borrower,
(ii) is not connected with any Borrower or any Affiliate of any Borrower, as an
officer, employee, promoter, underwriter, trustee, partner, member, manager,
creditor, director, supplier, customer or person performing similar functions,
and (iii) is not a member of the immediate family of a Person defined in (i) or
(ii) above.

                  INDEPENDENT ACCOUNTANT shall mean Deloitte & Touche or another
firm of nationally recognized, certified public accountants which is Independent
and which is selected by Borrower and reasonably acceptable to Lender.

                  INDEPENDENT ARCHITECT shall mean SLCE Architects or such other
architect, engineer or construction consultant selected by Borrower which is
Independent, licensed to practice in the State and has at least five (5) years
of architectural, engineering or construction experience, as the case may be,
and which is reasonably acceptable to Lender.

                  INDEPENDENT DIRECTOR, INDEPENDENT MANAGER, OR INDEPENDENT
MEMBER shall mean a Person who is not and will not be while serving and has
never been (i) a member (other than an Independent Member), manager (other than
an Independent Manager), director (other than an Independent Director),
employee, attorney, or counsel of Borrower or its Affiliates, (ii) a customer,
supplier or other Person who derives more than 1% of its purchases or revenues
from its activities with Borrower or its Affiliates, (iii) a direct or indirect
legal or beneficial owner in such entity or any of its Affiliates, (iv) a member
of the immediate family of any member, manager, employee, attorney, customer,
supplier or other Person referred to above or (v) a person Controlling or under
the common Control of anyone listed in (i) - (iv) above. A Person that otherwise
satisfies the foregoing shall not be disqualified from serving as an Independent
<PAGE>

Director or Independent Manager or Independent Member if such individual is at
the time of initial appointment, or at any time while serving, is also serving
as an Independent Director or Independent Manager or Independent Member, as
applicable, of a Single Purpose Entity affiliated with Borrower. Additionally, a
natural person who satisfies the foregoing definition other than clause (ii)
above shall not be disqualified from serving as an Independent Director,
Independent Manager or Independent Member of a particular entity because of fees
collected for serving as such if such individual is an independent director
provided by a nationally recognized company that provides professional
independent directors.

                  INSURANCE REQUIREMENTS shall mean, collectively, (i) all
material terms of any insurance policy required pursuant to this Agreement and
(ii) all material regulations and then-current standards applicable to or
affecting the Property or any part thereof or any use or condition thereof,
which may, at any time, be recommended by the Board of Fire Underwriters, if
any, having jurisdiction over the Property, or such other body exercising
similar functions.

                  INSURANCE RESERVE ACCOUNT shall have the meaning set forth in
Section 3.1.1.

                  INSURANCE RESERVE AMOUNT shall have the meaning set forth in
Section 16.2.

                  INTANGIBLE shall have the meaning set forth in the Security
Instrument.

                  INTEREST PERIOD shall have the meaning set forth in the Note.

                  LATE PAYMENT CHARGE shall have the meaning set forth in
Section 2.2.3.

                  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 by Borrower,
Manager, Guarantor or any Affiliate of such Person 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.

                  LEGAL REQUIREMENTS shall mean all present and future laws,
statutes, codes, ordinances, orders, judgments, decrees, injunctions, rules,
regulations and requirements, and irrespective of the nature of the work to be
done, of every Governmental Authority including, without limitation,
Environmental Laws and all covenants, restrictions and conditions now or
hereafter of record which may be applicable to Borrower or to the Property and
the Improvements and the Building Equipment thereon, or to the use, manner of
use, occupancy, possession, operation, maintenance, alteration, repair or
reconstruction of the Property and the Improvements
<PAGE>

and the Building Equipment thereon including, without limitation, building and
zoning codes and ordinances and laws relating to handicapped accessibility.

                  LENDER shall have the meaning set forth in the first paragraph
of this Agreement.

                  LENDER'S CONSULTANT shall mean National Assessment
Corporation, or such other environmental consulting and engineering firm having
experience (i) conducting environmental and engineering assessments (as
applicable) for properties similar to the Property and (ii) preparing and
supervising remediation and repair plans (as applicable) for properties similar
to the Property.

                  LETTER OF CREDIT shall mean an irrevocable, unconditional,
transferable, without the imposition of any fees except such fees as are
expressly payable by Borrower, clean sight draft letter of credit (either an
evergreen letter of credit or one which does not expire until at least sixty
(60) days after the Maturity Date, or the date reasonably determined by Lender
by which the Alteration is to be completed if such Letter of Credit is delivered
to Lender in connection with an Alteration (whichever is earlier), or as
otherwise provided in Section 16.4 and Section 16.6 with respect to the
Additional Debt Service Reserve Account or the Tax Reserve Account) (the LC
EXPIRATION DATE), in favor of Lender and entitling Lender to draw thereon in New
York, New York, without the imposition of any fees except such fees as are
expressly payable by Borrower, based solely on a statement executed by an
officer or authorized signatory of Lender and issued by an Approved Bank.

                  LIABILITY shall have the meaning set forth in Section
14.4.2(b).

                  LICENSE shall have the meaning set forth in Section 4.1.23.

                  LIEN shall mean any mortgage, deed of trust, lien, pledge,
hypothecation, assignment, security interest, or any other encumbrance or charge
on or affecting Borrower, the Property, any portion thereof 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 the
filing of mechanic's, materialmen's and other similar liens and encumbrances.

                  LIQUIDATED DAMAGES AMOUNT shall have the meaning set forth in
the Note.

                  LOAN shall mean the loan in the amount of Four Hundred Million
Dollars ($400,000,000) made by Lender to Borrower pursuant to this Agreement.

                  LOAN DOCUMENTS shall mean, collectively, this Agreement, the
Note, the Security Instrument, the Assignment of Leases, the Environmental
Indemnity, the Assignment of Management Agreement, the Account Agreement, the
Recourse Guaranty, the Bloomberg SNDA, the Proxy and all other documents
executed and/or delivered by Borrower in connection with the Loan including any
certifications or representations

<PAGE>

delivered by or on behalf of Borrower, any Affiliate of Borrower, the Manager,
or any Affiliate of the Manager.

                  LOW DSCR PERIOD shall mean the period commencing on the date
on which a Low DSCR Trigger Event has occurred and ending on the last day of the
first period of two (2) consecutive calendar quarters first occurring thereafter
during which the Debt Service Coverage Ratio has, as of the last day of each
such calendar quarter, been greater than the Required Debt Service Coverage
Ratio as determined by Lender in accordance with the terms of Section 16.5
hereof.

                  LOW DSCR TRIGGER EVENT shall mean the Debt Service Coverage
Ratio as of the date of determination by Lender is equal to or less than the
Required Debt Service Coverage Ratio for the previous calendar quarter.

                  MANAGEMENT AGREEMENT shall have the meaning provided in the
Assignment of Management Agreement, or, if the context requires, a Replacement
Management Agreement, pursuant to which the Manager is to provide management and
other services with respect to the Property, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time in
accordance with the terms hereof.

                  MANAGEMENT FEE shall mean an amount equal to the property
management fee payable to the Manager pursuant to the terms of the Management
Agreement for management services.

                  MANAGER shall mean any Qualified Manager with which Borrower
enters into a Management Agreement.

                  MATERIAL ADVERSE EFFECT shall mean any event or condition that
has a material adverse effect on (i) the use, operation or value of the Property
taken as a whole, (ii) the business, profits, operations or financial condition
of Borrower taken as a whole, or (iii) the ability of Borrower to repay the
principal and interest of the Loan as it becomes due or to satisfy any of
Borrower's obligations under the Loan Documents.

                  MATERIAL ALTERATION shall mean any Alteration (other than
decorative work such as painting, wall papering and carpeting and the
replacement of fixtures, furnishings and equipment to the extent being of a
routine and recurring nature and performed in the ordinary course of business
and tenant improvement work paid for by Bloomberg) which, when aggregated with
all related Alterations constituting a single project, involves an estimated
cost exceeding $20,000,000 with respect to such Alteration or related
Alterations (including the Alteration in question) then being undertaken at the
Property.

                  MATURITY DATE shall have the meaning set forth in the Note.

                  MATURITY DATE PAYMENT shall have the meaning set forth in the
Note.
<PAGE>

                  MAXIMUM LEGAL RATE shall mean the maximum non-usurious
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.

                  MODIFIED LEASE shall have the meaning set forth in Section
8.8.1.

                  MONETARY DEFAULT shall mean a Default (i) that can be cured
with the payment of money or (ii) arising pursuant to Section 17.1(a)(vi) or
(vii).

                  MONTHLY INSURANCE RESERVE AMOUNT shall have the meaning set
forth in Section 16.2.

                  MONTHLY PAYMENT AMOUNT shall have the meaning set forth in the
Note.

                  MONTHLY STRUCTURAL RESERVE AMOUNT shall have the meaning set
forth in Section 16.3.

                  MONTHLY TAX RESERVE AMOUNT shall have the meaning set forth in
Section 16.1.

                  MOODY'S shall mean Moody's Investors Service, Inc.

                  NET OPERATING INCOME shall mean the amount obtained by
subtracting Operating Expenses from Operating Income.

                  NON-DISTURBANCE AGREEMENT shall have the meaning set forth in
Section 8.8.8.

                  NOTE shall mean that certain Amended, Restated and
Consolidated Note in the principal amount of Four Hundred Million Dollars
($400,000,000), made by and between Borrower and Lender as of the date hereof,
as exchanged and replaced by, pursuant to the terms of the Note Exchange
Agreement, the Component Notes, as the same may be amended, restated, replaced,
substituted (including any components or subcomponents) supplemented or
otherwise modified from time to time.

                  NOTES shall mean, collectively, the Note, as exchanged and
replaced by the Component Notes and any replacement, substitute or component
notes made payable by Borrower to the order of Lender in accordance with the
terms hereof, as the same may be amended, restated, replaced, substituted
(including any components or subcomponents) or supplemented or otherwise
modified from time to time.

                  NOTE EXCHANGE AGREEMENT shall mean that certain Note Exchange
Agreement, made by and between Borrower and Lender, dated as of the date hereof,
exchanging and replacing the Note with the Component Notes.
<PAGE>

                  OBLIGATIONS shall have meaning set forth in the recitals of
the Security Instrument.

                  OFAC LIST means the list of specially designated nationals and
blocked persons subject to financial sanctions that is maintained by the U.S.
Treasury Department, Office of Foreign Assets Control and accessible through the
internet website www.treas.gov/ofac/t11sdn.pdf.

                  OFFICE UNIT 2 shall have the meaning set forth in the Security
Instrument.

                  OFFICER'S CERTIFICATE shall mean a certificate executed by an
authorized signatory of Borrower that is familiar with the financial condition
of Borrower and the operation of the Property, as the act of Borrower and not as
of such authorized signatory, who shall, subject to the terms of Section 18.1.2
hereof, have no personal liability in connection therewith which may be given to
the best knowledge of such authorized signatory.

                  OPERATING ASSET shall have the meaning set forth in the
Security Instrument.

                  OPERATING EXPENSES shall mean, for any period, without
duplication, all expenses actually paid or payable by Borrower, or Bloomberg
under the Bloomberg Lease, during such period in connection with the ownership,
operation, management, maintenance, repair and use of the Property, determined
on an accrual basis, and, except to the extent otherwise provided in this
definition, in accordance with GAAP, which shall include, but shall not be
limited to, real estate taxes and insurance premiums, except to the extent
otherwise provided in this definition. Operating Expenses specifically shall
include (i) all expenses incurred in the immediately preceding applicable period
based on quarterly financial statements delivered to Lender in accordance with
Article XI, (ii) property management fees in an amount equal to the management
fees actually paid under the Management Agreement, (iii) administrative,
payroll, security and general expenses for the Property, (iv) the cost of
utilities, inventories and fixed asset supplies consumed in the operation of the
Property, (v) a reasonable reserve for uncollectable accounts, (vi) costs and
fees of independent professionals (including, without limitation, legal,
accounting, consultants and other professional expenses), technical consultants,
operational experts (including quality assurance inspectors) or other third
parties retained to perform services required or permitted hereunder, (vii) cost
of attendance by employees at training and manpower development programs, (viii)
association dues, (ix) computer processing charges, (x) operational equipment
and other lease payments as reasonably approved by Lender, (xi) taxes and other
Impositions, other than income taxes or other Impositions in the nature of
income taxes, and insurance premiums, (xii) all payments required to be made
pursuant to the Condominium Declaration and/or the By-Laws and (xiii) all
underwritten reserves required by Lender hereunder (without duplication),
including, without limitation, reserves for capital expenditures of $1.00 per
square foot per annum. Notwithstanding the foregoing, Operating Expenses shall
not include (1) depreciation or amortization, (2) income taxes or other
Impositions in the nature of income taxes, (3) any expenses (including legal,
accounting and other
<PAGE>

professional fees, expenses and disbursements) incurred in connection with the
making of the Loan or the sale, exchange, transfer, financing or refinancing of
all or any portion of the Property or in connection with the recovery of
Proceeds which are applied to prepay the Note, (4) any expenses which in
accordance with GAAP should be capitalized, (5) Debt Service, and (6) any item
of expense which would otherwise be considered within Operating Expenses
pursuant to the provisions above but is paid directly by Bloomberg.

                  OPERATING INCOME shall mean, for any period, all income of
Borrower during such period from the use, ownership or operation of the Property
as follows:

                  (a)      all amounts payable to Borrower by any Person as Rent
and other amounts under the Bloomberg Lease, license agreements, parking
agreements, occupancy agreements, concession agreements or other agreements
relating to the Property;

                  (b)      business interruption insurance proceeds allocable to
the applicable reporting period;

                  (c)      all other amounts which in accordance with GAAP are
included in Borrower's annual financial statements as operating income
attributable to the Property; and

                  (d)      any amounts paid (i) by the Borrower from Excess Cash
Flow to the Collection Account and/or (ii) by any Affiliate of Borrower to the
Collection Account, in each case to pay any insurance premiums for the
Condominium Unit not paid by Bloomberg.

                  Notwithstanding the foregoing, Operating Income shall not
include (a) any Proceeds (other than business interruption insurance proceeds
and only to the extent allocable to the applicable reporting period), (b) any
proceeds resulting from the Transfer of all or any portion of the Property, (c)
any Rent attributable to a Lease (i) during a period which the Lease is in
default (unless such Rent has been paid to Borrower) or (ii) prior to the date
in which Bloomberg has taken occupancy or in which the actual payment of rent is
required to commence thereunder, (d) any item of income otherwise included in
Operating Income but paid directly by Bloomberg to a Person other than Borrower
as an offset or deduction against Rent payable by Bloomberg, provided such item
of income is an item of expense (such as payments for utilities paid directly to
a utility company) and is otherwise excluded from the definition of Operating
Expenses pursuant to clause "(6)" of the definition thereof, and (e) security
deposits received from Bloomberg until forfeited or applied. Operating Income
shall be calculated on the accrual basis of accounting and, except to the extent
otherwise provided in this definition, in accordance with GAAP.

                  OPINION OF COUNSEL shall mean an opinion of counsel of a law
firm selected by Borrower and reasonably acceptable to Lender; Lender hereby
acknowledges that Proskauer Rose LLP and Richards, Layton & Finger, P.A. are
acceptable in connection with the foregoing.
<PAGE>

                  OTHER CHARGES shall mean maintenance charges, impositions
other than Impositions, 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 by any Governmental Authority, other than those
required to be paid by Bloomberg pursuant to the Bloomberg Lease and any and all
condominium common charges, assessments, expenses and other expenses and fees
required to be paid pursuant to the Condominium Declaration and/or the By-Laws

                  OTHER TAXES shall have the meaning set forth in Section 2.4.3.

                  PAYMENT DATE shall have the meaning set forth in the Note.

                  PERMITTED DEBT shall mean collectively, (a) the Note and the
other obligations, indebtedness and liabilities specifically provided for in any
Loan Document and secured by this Agreement, the Security Instrument and the
other Loan Documents; and (b) trade payables (including, without limitation,
leasing commissions) incurred in the ordinary course of Borrower's business, not
secured by Liens on the Property (other than liens being properly contested in
accordance with the provisions of this Agreement or the Security Instrument) and
equipment leases, not to exceed $8,000,000 at any one time outstanding, payable
by or on behalf of Borrower for or in respect of the operation and/or
development of the Property in the ordinary course of operating Borrower's
business, provided that (but subject to the remaining terms of this definition)
each such amount shall be paid within sixty (60) days following the date on
which each such amount is due and payable unless being contested in accordance
with the terms of Section 7.3 hereof. Notwithstanding anything set forth herein,
in no event shall Borrower be permitted under this provision to enter into a
note or other instrument for borrowed money.

                  PERMITTED ENCUMBRANCES shall mean collectively, (a) the Liens
and security interests created or permitted by the Loan Documents (including any
Liens filed against equipment leases that are otherwise permitted pursuant to
the terms hereunder), (b) all Liens, encumbrances and other matters disclosed in
the Title Policy that do not have a Material Adverse Effect on the use, value or
operation of the Property, and (c) Liens, if any, for Impositions imposed by any
Governmental Authority not yet delinquent.

                  PERMITTED INVESTMENTS shall have the meaning set forth in the
Account Agreement.

                  PERSON shall mean any individual, corporation, partnership,
joint venture, limited liability company, estate, trust, unincorporated
association, 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.

                  PERSONAL PROPERTY shall have the meaning set forth in the
granting clause of the Security Instrument.
<PAGE>

                  PHYSICAL CONDITIONS REPORT shall mean means the structural
engineering report with respect to the Property (i) prepared by National
Assessment Corporation, (ii) addressed to Lender or with respect to which Lender
shall have received a reliance letter, (iii) prepared based on a scope of work
determined by Lender in Lender's reasonable discretion, and (iv) in form and
content acceptable to Lender in Lender's reasonable discretion, together with
any amendments or supplements thereto.

                  PREPAYMENT LOCKOUT PERIOD shall have the meaning set forth in
the Note.

                  PRINCIPAL AMOUNT shall have the meaning set forth in the Note.

                  PROCEEDS shall have the meaning set forth in Section 6.2.2.

                  PROCEEDS RESERVE ACCOUNT shall have the meaning set forth in
Section 3.1.1.

                  PROHIBITED PERSON means any Person identified on the OFAC List
or any other Person with whom a U.S. Person may not conduct business or
transactions by prohibition of Federal law or Executive Order of the President
of the United States or America.

                  PROPERTY shall have the meaning set forth in the Security
Instrument.

                  PROVIDED INFORMATION shall have the meaning set forth in
Section 14.1.1.

                  PROXY shall mean that certain Irrevocable Proxy, dated as of
the date hereof, from Borrower to Lender.

                  QUALIFIED INSTITUTIONAL BORROWER shall mean one or more of the
following: (i) a real estate investment trust, bank, saving and loan
association, investment bank, insurance company, trust company, commercial
credit corporation, pension plan, pension fund or pension advisory firm, mutual
fund, government entity or plan, (ii) an investment company, money management
firm or "qualified institutional buyer" within the meaning of Rule 144A under
the Securities Act of 1933, as amended, or an institutional "accredited
investor" within the meaning of Regulation D under the Securities Act of 1933,
as amended, (iii) an institution substantially similar to any of the foregoing,
(iv) any entity Controlled (as defined below) by any of the entities described
in clauses (i), (ii) or (iii) above, (v) an investment fund, limited liability
company, limited partnership or general partnership where an entity that is
otherwise a Qualified Institutional Borrower under clauses (i), (ii), (iii) or
(iv) above acts as the general partner, managing member or fund manager and at
least 50% of the equity interests in such investment fund are owned, directly or
indirectly, by one or more entities that are otherwise Qualified Institutional
Borrowers under clauses (i), (ii), (iii) or (iv) above, or (vi) any other entity
approved by the Rating Agencies; in each case of clauses (i), (ii) or (iii) of
this definition, which (A) has total assets (in name or under management) in
excess of $1,000,000,000 and (except with respect to a pension advisory firm or
similar fiduciary) capital/statutory surplus or shareholder's equity of
$500,000,000 and (B) is regularly engaged in the business of making or owning
commercial real estate loans or

<PAGE>

operating commercial mortgage properties. For purposes of this definition only
"Control" means the ownership, directly or indirectly, in the aggregate of more
than fifty percent (50%) of the beneficial ownership interest of an entity and
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of an entity, whether through the
ability to exercise voting power, by contract or otherwise.

                  QUALIFIED MANAGER shall mean (i) a reputable and experienced
management organization which together with its Affiliates manages a minimum of
2,000,000 square feet of Class A or Class B (and any combination thereof) office
space located in major United States cities, provided that (a) prior to a
Securitization, Borrower shall have obtained the prior written consent of Lender
for such Person, which consent shall not be unreasonably withheld or delayed and
(b) after a Securitization, in addition to Lender's consent, which consent shall
not be unreasonably withheld or delayed, Borrower shall have obtained a Rating
Agency Confirmation or (ii) any other manager as Lender shall approve in its
sole and absolute discretion.

                  RATING AGENCIES shall mean (a) prior to a Securitization, each
of S&P, Moody's and Fitch, Inc. and any other nationally-recognized statistical
rating agency which has been approved by Lender and (b) after a Securitization
has occurred, each such Rating Agency which has rated the Securities in the
Securitization.

                  RATING AGENCY CONFIRMATION shall mean, collectively, a written
affirmation from each of the Rating Agencies that the credit rating of the
Securities given by such Rating Agency of such Securities 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 solely 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. In the event
that, at any given time, no such Securities shall have been issued and are then
outstanding, then the term Rating Agency Confirmation shall be deemed instead to
require the written approval of Lender based on its good faith determination of
whether the Rating Agencies would issue a Rating Agency Confirmation if any such
Securities were outstanding.

                  REAL ESTATE TAXES shall mean all real estate taxes,
assessments (including, without limitation, all assessments for public
improvements or benefits, whether or not commenced or completed prior to the
date hereof and whether or not commenced or completed within the term of the
Security Instrument), water, sewer or other rents and charges, and all other
governmental charges, in each case whether general or special, ordinary or
extraordinary, or foreseen or unforeseen, of every character in respect of the
Property (including all interest and penalties thereon), which at any time prior
to, during or in respect of the term hereof may be assessed or imposed on or in
respect of or be a lien upon the Condominium Unit or any part thereof or any
estate, right, title or interest therein.

                  REAL PROPERTY shall mean, collectively, the Condominium Unit,
the Improvements and the Appurtenances (as defined in the Security Instrument).
<PAGE>

                  RECOURSE GUARANTY shall mean that certain Guaranty of Recourse
Obligations of Borrower, dated as of the date hereof, by Guarantor in favor of
Lender, as the same may be amended, supplemented, restated or otherwise modified
from time to time.

                  REGISTER shall have the meaning set forth in Section 15.4.

                  REGULATORY CHANGE shall mean any change after the date of this
Agreement in federal, state or foreign laws or regulations or the adoption or
the making, after such date, of any interpretations, directives or requests
applying to Lender, or any Person Controlling Lender or to a class of banks or
companies Controlling banks of or under any federal, state or foreign laws or
regulations (whether or not having the force of law) by any court or
Governmental Authority or monetary authority charged with the interpretation or
administration thereof.

                  RELEVANT PORTIONS shall have the meaning set forth in Section
14.4.2(a).

                  RENTS shall mean all rents, rent equivalents, moneys payable
as damages or in lieu of rent or rent equivalents, royalties (including, without
limitation, all oil and gas or other mineral royalties and bonuses), income,
receivables, receipts, 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 from any and
all sources arising from or attributable to the Property and Proceeds, if any,
from business interruption or other loss of income insurance.

                  RENT COMMENCEMENT DATE shall mean

                           Lower Level 3; Floors Lower Level 2, 3 through 15 -
                           August 14, 2004
                           Floors 16 through 19 - September 26, 2004
                           Lower Level 2 pit area - November 1, 2004; and
                           Lower Level 2 pit area - November 9, 2004.

                  REPLACEMENT MANAGEMENT AGREEMENT shall mean, collectively, (a)
either (i) a replacement management agreement with a Qualified Manager; and (b)
an assignment of management agreement and subordination of management fees
substantially in the form of the Assignment of Management Agreement, executed
and delivered to Lender by Borrower and such Qualified Manager at Borrower's
expense.

                  REQUIRED DEBT SERVICE COVERAGE RATIO shall mean, 1.15 to 1.0.

                  REVISED INTEREST RATE shall have the meaning set forth in the
Note.

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

                  SECURITIES shall have the meaning set forth in Section 14.1.
<PAGE>

                  SECURITIES ACT shall have the meaning set forth in Section
14.4.1.

                  SECURITIZATION shall have the meaning set forth in Section
14.1.

                  SECURITY INSTRUMENT shall mean that certain first priority
Amended, Restated and Consolidated Mortgage, Security Agreement, Financing
Statement and Assignment of Leases, Rents and Security Deposits, dated the date
hereof, executed and delivered by and between Borrower and Lender and
encumbering the Property, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.

                  SERVICER shall mean GMAC Commercial Mortgage Corporation or
such other Person designated in writing with an address for such Person by
Lender, in its sole discretion, to act as Lender's agent hereunder with such
powers as are specifically delegated to the Servicer by Lender, whether pursuant
to the terms of this Agreement, the Account Agreement or otherwise, together
with such other powers as are reasonably incidental thereto.

                  SINGLE PURPOSE ENTITY shall mean a Person, other than an
individual, which (i) is formed or organized solely for the purpose of owning,
developing, using, operating, leasing, managing, maintaining and financing,
directly or indirectly, an ownership interest in the Property, (ii) does not
engage in any business or activity unrelated to the Property and the ownership,
development, use, operation, leasing, managing, maintaining and financing
thereof, (iii) has not and will not have any assets other than those related to
its interest in the Property, or in the case of any SPE Entity its direct or
indirect interest in Borrower, or the operation, management, leasing and
financing thereof or any indebtedness other than the Permitted Debt, (iv)
maintains its own separate books and records and its own accounts, in each case
which are separate and apart from the books and records and accounts of any
other Person, provided, however, that all amounts paid to Borrower (including,
without limitation, all amounts transferred from the Holding Account) may be
deposited into a centralized cash management account (controlled by an Affiliate
of Borrower) on behalf of Borrower and various other entities that are
Affiliates of Borrower, as and when received, provided that all amount deposited
into such centralized account for the benefit of Borrower and all amounts
disbursed out of such centralized account for the benefit of Borrower are
clearly segregated, for accounting purposes, from the revenues and expenses of
all other Persons, (v) holds itself out to the public as a legal entity,
separate and distinct from any other Person, (vi) does not and will not
commingle its funds or assets with those of any other Person, (vii) conducts its
own business in its own name, (viii) maintains separate financial statements,
provided that such Persons financial statements may be included in the
consolidated financial statements of an Affiliate of such Person in accordance
with GAAP, provided further, that all amounts paid to Borrower (including,
without limitation, all amounts transferred from the Holding Account) may be
deposited into a centralized cash management account (controlled by an Affiliate
of Borrower) on behalf of Borrower and various other entities that are
Affiliates of Borrower, as and when received, provided that all amount deposited
into such centralized account for the benefit of Borrower and all amounts
disbursed out of such centralized account for the benefit of Borrower are
clearly
<PAGE>

segregated, for accounting purposes, from the revenues and expenses of all other
Persons, (ix) pays its own liabilities out of its own funds, (x) observes all
partnership, corporate or limited liability company formalities and procedures
required under its organizational documents and applicable law, as applicable,
(xi) pays the salaries of its own employees, if any, and maintains a sufficient
number of employees, if any, in light of its contemplated business operations,
(xii) does not assume or guarantee or otherwise obligate itself with respect to
the debts of any other Person or hold out its credit as being available to
satisfy the obligations of any other Person, (xiii) does not acquire obligations
or securities of its Affiliated partners, members or shareholders, (xiv)
allocates fairly and reasonably shared expenses, including, without limitation,
any overhead for shared office space, if any, (xv) does not and will not pledge
its assets for the benefit of any other Person or make any loans or advances to
any other Person, (xvi) does and will continue to use commercially reasonable
efforts to correct any known misrepresentation or misunderstanding regarding its
separate identity, (xvii) maintains adequate capital in light of its reasonably
foreseeable business operations, (xviii) has and will continue to have a
partnership or operating agreement, certificate of incorporation, articles of
organization or other organizational document which has been approved by Lender
(Lender hereby acknowledges that each of Borrower and Guarantor is approved in
connection with the foregoing), (xix) uses separate stationary, invoices, and
checks, (xx) maintains an arms-length relationship with its Affiliates, (xxi)
has not and will not engage in, seek, or consent to the dissolution, winding up,
liquidation, termination, consolidation or merger and except as otherwise
permitted in this Agreement, and (xxii) has not and will not engage in, seek or
consent to any sale of all or substantially all of its assets and, except as
permitted hereunder, transfer any partnership, membership or shareholder
interests, or amendments of its partnership or operating agreement, certificate
of incorporation, articles of organization or other organizational document. In
addition, if such Person is a partnership, (1) all general partners of such
Person shall be Single Purpose Entities; and (2) if such Person has more than
one general partner, then the organizational documents shall provide that such
Person shall continue (and not dissolve) for so long as a solvent general
partner exists. In addition, if such Person is a corporation, then, at all
times: (a) such Person shall have at least two (2) Independent Directors and (b)
the board of directors of such Person may not take any action requiring the
unanimous affirmative vote of 100% of the members of the board of directors
unless all of the directors, including the Independent Directors, shall have
participated in such vote. In addition, if such Person is a limited liability
company, (a) such Person shall have at least two (2) Independent Managers or
Independent Members, (b) if such Person is managed by a board of managers, the
board of managers of such Person may not take any action as to any Bankruptcy
Actions requiring the unanimous affirmative vote of 100% of the members of the
board of managers unless all of the managers, including the Independent
Managers, shall have participated in such vote, (c) if such Person is not
managed by a board of managers as to any Bankruptcy Actions, the members of such
Person may not take any action requiring the affirmative vote of 100% of the
members of such Person unless all of the members, including the Independent
Members, shall have participated in such vote, (d) each managing member of
Borrower shall be a Single Purpose Entity, (e) its articles of organization,
certificate of formation and/or operating agreement, as applicable, shall
provide that until all of the Indebtedness is paid in full such entity will
<PAGE>

not dissolve and (f) if such Person has more than one (1) managing member, then
the organizational documents shall provide that such Person shall continue (and
not dissolve) for so long as a solvent managing member exists. In addition, the
organizational documents of such Person shall provide that such Person (1)
without the affirmative consent of all of the Independent Directors, Independent
Managers or Independent Members, as applicable, shall not with respect to itself
or to any other Person in which it has a direct or indirect legal or beneficial
interest (a) seek or consent to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator, custodian or other similar official for the
benefit of the creditors of such Person or all or any portion of such Person's
properties, (b) take any action that might cause such Person to become
insolvent, petition or otherwise institute insolvency proceedings or otherwise
seek any relief under any laws relating to the relief from debts or the
protection of debtors generally, (c) instituting proceedings to have such Person
adjudicated as bankrupt or insolvent, (d) file, consent to, acquiesce in the
filing of, or join in the filing of a bankruptcy or insolvency petition or the
institution of bankruptcy or insolvency proceedings against such Person, (e)
file a petition or consent to a petition seeking reorganization, arrangement,
adjustment, winding-up, dissolution, composition, liquidation or other relief on
behalf of such Person of its debts under any federal or state law relating to
bankruptcy, (f) make any assignment for the benefit of the such Person's
creditors; or (g) take any action in furtherance of any of the foregoing (such
actions set forth in (a) through (g) of this sentence, collectively, BANKRUPTCY
ACTIONS), (2) has and will maintain its books, records, resolutions and
agreements as official records, (3) has held and will hold its assets in its own
name, (4) has and will maintain its financial statements, accounting records and
other organizational documents, books and records separate and apart from any
other Person, (5) has not and will not identify its partners, members or
shareholders, or any affiliates of any of them as a division or department of
it, (6) has and will maintain an arms-length relationship with its Affiliates,
and (7) has not and will not enter into or be a party to any transaction with
its partners, members, shareholders, or its Affiliates except in the ordinary
course of business and on terms which are intrinsically fair and are no less
favorable to it than would be obtained in a comparable arms-length transaction
with a third party.

                  SPECIAL TAXES shall mean any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, or any liabilities with
respect thereto imposed as a result of the Loan, including those arising after
the date hereof as result of the adoption of or any change in law, treaty, rule,
regulation, guideline or determination of a Governmental Authority or any change
in the interpretation or application thereof by a Governmental Authority but
excluding, in the case of Lender, such taxes (including income taxes, franchise
taxes and branch profit taxes) as are imposed on or measured by Lender's net
income by the United States of America or any Governmental Authority of the
jurisdiction under the laws under which Lender is organized or maintains a
lending office.

                  SPE ENTITY shall mean Borrower and 731 Office One Holding LLC,
a Delaware limited liability company, which are required by this Agreement to
be, as long as the Loan is outstanding, a Single Purpose Entity.
<PAGE>

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

                  STRUCTURAL RESERVE ACCOUNT shall have the meaning set forth in
Section 3.1.1.

                  STRUCTURAL RESERVE AMOUNT shall have the meaning set forth in
Section 16.3(a).

                  SUB-ACCOUNT(S) shall have the meaning set forth in Section
3.1.1.

                  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 Policy, and containing a certification of such
surveyor satisfactory to Lender.

                  TAKING 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.

                  TAX RESERVE ACCOUNT shall have the meaning set forth in
Section 3.1.1.

                  TAX RESERVE AMOUNT shall have the meaning set forth in Section
16.1.

                  TAXES shall mean any and all taxes, fees, levies, duties,
tariffs, imposts, surcharges and other charges of any kind (together with any
and all interest, penalties, additions to tax and additional amounts imposed
with respect thereto) imposed by any governmental or taxing authority including,
without limitation, (i) taxes or other charges on or with respect to income,
franchises, windfall or other profits, gross receipts, property, sales, use,
capital stock, payroll, employment, social security, workers' compensation,
unemployment compensation or net worth, (ii) taxes or other charges in the
nature of excise, withholding, ad valorem, stamp, transfer, value added or gains
taxes, license registration and documentation fees, and (iii) customs' duties,
tariffs and similar charges.

                  TERRORISM INSURANCE shall have the meaning set forth in
Section 6.1.8.

                  THRESHOLD AMOUNT shall mean an amount equal to $12,000,000.

                  TITLE COMPANY shall mean Lawyer's Title Insurance Corporation,
National Land Tenure Company LLC, TitleServ, Commonwealth Land Title Insurance
Company, Fidelity National Title Insurance Company and Chicago Title Insurance
Company.

                  TITLE POLICY shall mean an ALTA mortgagee title insurance
policy in a form acceptable to Lender (or, if the Property is in a State which
does not permit the issuance of such ALTA policy, such form as shall be
permitted in such State and
<PAGE>

acceptable to Lender) issued by the Title Company with respect to the Property
and insuring the lien of the Security Instrument.

                  TOTAL LOSS shall mean (i) a casualty, damage or destruction of
the Property, which, in the reasonable judgment of Lender, (A) involves an
actual or constructive loss of more than thirty percent (30%) of the fair market
value of the Property, or (B) results in the cancellation of leases comprising
more than thirty percent (30%) of the rentable area of the Property, and in
either case with respect to which Borrower is not required under the Bloomberg
Lease to apply Proceeds to the restoration of the Property or (ii) a permanent
Taking which, in the reasonable judgment of Lender, (A) involves an actual or
constructive loss of more than fifteen percent (15%) of the fair market value of
the Property, or (B) renders untenantable either more than fifteen percent (15%)
of the rentable area of the Property or (iii) a casualty, damage, destruction or
Taking that affects so much of the Property such that it would be impracticable,
in Lender's reasonable discretion, even after restoration, to operate the
Property as an economically viable whole.

                  TRANSFER shall mean directly or indirectly (other than
pursuant to the Loan Documents) sell, assign, convey, mortgage, transfer,
pledge, hypothecate, encumber, grant a security interest in, exchange or
otherwise dispose of any beneficial interest or grant any option or warrant with
respect to, or where used as a noun, a direct or indirect sale, assignment,
conveyance, transfer, pledge or other disposition of any beneficial interest by
any means whatsoever whether voluntary, involuntary, by operation of law or
otherwise.

                  TRIA shall have the meaning set forth in Section 6.1.8.

                  UCC or UNIFORM COMMERCIAL CODE shall mean the Uniform
Commercial Code as in effect in the State.

                  UNDERWRITER GROUP shall have the meaning set forth in Section
14.4.2(b).

                  UNIT shall have the meaning set forth in the Condominium
Declaration.

                  U.S. GOVERNMENT OBLIGATIONS shall mean any direct obligations
of, or obligations guaranteed as to principal and interest by, the United States
Government or any agency or instrumentality thereof, provided that such
obligations are backed by the full faith and credit of the United States. Any
such obligation must be limited to instruments that have a predetermined fixed
dollar amount of principal due at maturity that cannot vary or change. If any
such obligation is rated by S&P, it shall not have an "r" highlighter affixed to
its rating. Interest must be fixed or tied to a single interest rate index plus
a single fixed spread (if any), and move proportionately with said index. U.S.
Government Obligations include, but are not limited to: U.S. Treasury direct or
fully guaranteed obligations, Farmers Home Administration certificates of
beneficial ownership, General Services Administration participation
certificates, U.S. Maritime Administration guaranteed Title XI financing, Small
Business Administration guaranteed participation certificates or guaranteed pool
certificates, U.S. Department of Housing and
<PAGE>

Urban Development local authority bonds, and Washington Metropolitan Area
Transit Authority guaranteed transit bonds. In no event shall any such
obligation have a maturity in excess of 365 days.

                  WORK shall have the meaning provided in Section 6.2.4(a).

                  YIELD MAINTENANCE PREMIUM shall have the meaning set forth in
the Note.

                  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. When used herein
with respect to Annual Reports, the term "financial statements" shall include
the notes and schedules thereto. Unless otherwise specified herein or therein,
all terms defined in this Agreement shall have the definitions given them in
this Agreement when used in any other Loan Document or in any certificate or
other document made or delivered pursuant thereto. All uses of the word
"including" shall mean including, without limitation unless the context shall
indicate otherwise. 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.      GENERAL TERMS

                  SECTION  2.1      LOAN; DISBURSEMENT TO BORROWER.

                           2.1.1    THE LOAN. Subject to and upon the terms and
conditions set forth herein, Lender hereby makes and Borrower hereby accepts the
Loan on the Closing Date.

                           2.1.2    DISBURSEMENT TO BORROWER. Borrower may
request and 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. Borrower acknowledges and agrees that the full proceeds of the Loan
have been disbursed by Lender to Borrower on the Closing Date.

                           2.1.3    THE NOTE, SECURITY INSTRUMENT AND LOAN
DOCUMENTS. The Loan shall be evidenced by the Note and secured by the Security
Instrument, the Assignment of Leases, this Agreement and the other Loan
Documents.

                           2.1.4    USE OF PROCEEDS. Borrower shall use the
proceeds of the Loan to (a) refinance any financing existing immediately prior
to the making of the Loan which encumbers the Property, (b) pay costs and
expenses incurred in connection with the closing of the Loan, (c) make deposits
into the Sub-Accounts as required hereunder and (d) distribute the balance, if
any, to Borrower.
<PAGE>

                  SECTION  2.2      INTEREST; LOAN PAYMENTS; LATE PAYMENT
CHARGE.

                           2.2.1    PAYMENT OF PRINCIPAL AND INTEREST.

                           (a)      Except as set forth in Section 2.2.1(b),
         interest shall accrue on the Principal Amount as set forth in the Note.

                           (b)      Upon the occurrence and during the
         continuance of an Event of Default and from and after the Maturity Date
         if the entire Principal Amount is not repaid on the Maturity Date,
         interest on the outstanding principal balance of the Loan and, to the
         extent permitted by law, overdue interest and other amounts due in
         respect of the Loan shall accrue at the Default Rate calculated from
         the date such payment was due without regard to any grace or cure
         periods contained herein. Interest at the Default Rate shall be
         computed from the occurrence of the Event of Default until the actual
         receipt and collection of the Indebtedness (or that portion thereof
         that is then due) or the cure of such Event of Default. To the extent
         permitted by applicable law, interest at the Default Rate shall be
         added to the Indebtedness, shall itself accrue interest at the same
         rate as the Loan and shall be secured by the Security Instrument. This
         paragraph shall not be construed as an agreement or privilege to extend
         the date of the payment of the Indebtedness, nor as a waiver of any
         other right or remedy accruing to Lender by reason of the occurrence of
         any Event of Default; and Lender retains its rights under the Note to
         accelerate and to continue to demand payment of the Indebtedness upon
         the happening of any Event of Default.

                           2.2.2    METHOD AND PLACE OF PAYMENT.

                           (a)      On each Payment Date, Borrower shall pay to
         Lender interest accruing pursuant to the Note for the entire Interest
         Period ending on the day before such Payment Date.

                           (b)      All amounts advanced by Lender pursuant to
         the applicable provisions of the Loan Documents, other than the
         Principal Amount, together with any interest at the Default Rate or
         other charges as provided therein, shall be due and payable hereunder
         as provided in the Loan Documents. In the event any such advance or
         charge is not so repaid by Borrower, Lender may, at its option, first
         apply any payments received under the Note to repay such advances,
         together with any interest thereon, or other charges as provided in the
         Loan Documents, and the balance, if any, shall be applied in payment of
         any installment of interest or principal then due and payable.

                           (c)      The Maturity Date Payment shall be due and
         payable in full on the Maturity Date.

                           (d)      From and after the Anticipated Repayment
         Date, unless the Indebtedness has been repaid in full, all Excess Cash
         Flow shall be applied on each Payment Date as a partial prepayment of
         the outstanding principal Indebtedness, as set forth in Section
         3.1.6(a)(vi). Interest accrued at the Revised
<PAGE>

         Interest Rate shall be deferred and shall earn interest at the Revised
         Interest Rate to the extent permitted by applicable law.

                           2.2.3    LATE PAYMENT CHARGE. If any principal,
interest or any other sums due under the Loan Documents (other than the
outstanding Principal Amount due and payable on the Maturity Date) is not paid
by Borrower within two (2) Business Days after the date on which it is due (in
the case of interest due hereunder, after giving effect to the grace period with
respect thereto), Borrower shall pay to Lender upon demand an amount equal to
the lesser of four percent (4%) of such unpaid sum or the Maximum Legal Rate
(the LATE PAYMENT CHARGE) 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
this Agreement, the Security Instrument and the other Loan Documents to the
extent permitted by applicable law.

                           2.2.4    USURY SAVINGS. This Agreement and the Note
are subject to the express condition that at no time shall Borrower be obligated
or 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 under the Note at a rate in excess of the
Maximum Legal Rate, then 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 in respect of the Note. All sums paid or agreed to be paid to
Lender for the use, forbearance, or detention of the sums due in respect of 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 of interest from time to time in effect and
applicable to the Loan for so long as the Loan is outstanding.

                  SECTION  2.3      PREPAYMENTS.

                           2.3.1    PREPAYMENTS. No prepayments of the
Indebtedness shall be permitted except as set forth in Section 4 of the Note.

                           2.3.2    PREPAYMENTS AFTER EVENT OF DEFAULT. If,
following an Event of Default, Lender shall accelerate the Indebtedness and
Borrower thereafter tenders payment of all or any part of the Indebtedness, or
if all or any portion of the Indebtedness is recovered by Lender after such
Event of Default, (a) such payment may be made on any Business Day together with
all unpaid interest thereon as calculated through the end of the then current
Interest Period, and all other fees and sums payable hereunder or under the Loan
Documents, including without limitation, interest that has accrued at the
Default Rate, the Yield Maintenance Premium and any Late Payment Charge), (b)
such payment shall be deemed a voluntary prepayment by Borrower, and (c)
<PAGE>

in the event the payment occurs during the Lockout Period, Borrower shall pay,
in addition to the Indebtedness, an amount equal to the Liquidated Damages
Amount.

                           2.3.3    RELEASE OF PROPERTY. Lender shall, upon the
written request and at the expense of Borrower, upon payment in full of the
Principal Amount and interest on the Loan and all other amounts due and payable
under the Loan Documents in accordance with the terms and provisions of the Note
and this Agreement or upon a Defeasance in accordance with Section 9.1, release
the Lien of (i) this Agreement upon the Account Collateral, (ii) the Security
Instrument on the Property or assign it, in whole or in part, to a new lender as
requested by Borrower, and (iii) release or assign (as requested by Borrower) to
Borrower (or Borrower's nominee) all other Loan Documents (including UCC
financing statements) other than the Environmental Indemnity. In such event,
Borrower shall submit to Lender, not less than ten (10) Business Days prior to
the date of such release or assignment, a release of lien or assignment of lien,
as applicable, for such property for execution by Lender. Such release or
assignment, as applicable, shall be in a form appropriate in each jurisdiction
in which the Property is located and satisfactory to Lender in its reasonable
discretion. In addition, at Borrower's sole cost and expense, Borrower shall
provide all other documentation Lender reasonably requires to be delivered by
Borrower in connection with such release or assignment, as applicable, and
Lender, at Borrower's sole cost and expense, shall provide all other normal and
customary documentation Borrower reasonably requested by Borrower that is
reasonably acceptable to Lender in connection with such release or assignment.

                  SECTION 2.4       REGULATORY CHANGE; TAXES.

                          2.4.1     INCREASED COSTS. If as a result of any
Regulatory Change or compliance of Lender therewith the basis of taxation of
payments to Lender or any company Controlling Lender of the principal of or
interest on the Loan is changed or Lender or the company Controlling Lender
shall be subject to (i) any tax, duty, charge or withholding of any kind with
respect to this Agreement (excluding federal taxation of the overall net income
of Lender or the company Controlling Lender); or (ii) any reserve, special
deposit or similar requirements relating to any extensions of credit or other
assets of, or any deposits with or other liabilities, of Lender or any company
Controlling Lender is imposed, modified or deemed applicable and Lender
reasonably determines that, by reason thereof, the cost to Lender or any company
Controlling Lender of making, maintaining or extending the Loan to Borrower is
increased, or any amount receivable by Lender or any company Controlling Lender
hereunder in respect of any portion of the Loan to Borrower is reduced, in each
case by an amount deemed by Lender in good faith to be material (such increases
in cost and reductions in amounts receivable being herein called INCREASED
COSTS), then Lender shall provide notice thereof to Borrower and Borrower agrees
that it will pay to Lender upon Lender's written request such additional amount
or amounts as will compensate Lender or any company Controlling Lender for such
Increased Costs to the extent Lender determines that such Increased Costs are
allocable to the Loan. If Lender requests compensation under this Section 2.4.1,
Borrower may, by notice to Lender, require that Lender furnish to Borrower a
statement setting forth the basis for requesting such compensation and the
method for determining
<PAGE>

the amount thereof. To the extent Borrower is required to pay any Increased
Costs in accordance with the terms hereof, Borrower shall have the right to
prepay the Principal Amount (together will all accrued but unpaid interest
thereon calculated through the end of the then current Interest Period) without
the imposition of any Yield Maintenance Premium or the Liquidated Damages Amount
or any other prepayment premium or charge of any kind.

                           2.4.2    SPECIAL TAXES. Borrower shall make all
payments hereunder free and clear of and without deduction for Special Taxes,
other than as may be imposed in connection with a sale or assignment of the Loan
by Lender. If Borrower shall be required by law to deduct any Special Taxes from
or in respect of any sum payable hereunder or under any other Loan Document to
Lender, (i) the sum payable shall be increased as may be necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 2.4.2) Lender receives an amount equal to the
sum it would have received had no such deductions been made, (ii) Borrower shall
make such deductions, and (iii) Borrower shall pay the full amount deducted to
the relevant Governmental Authority in accordance with applicable law.
Notwithstanding anything to the contrary contained in this Section 2.4, Borrower
shall not be liable for any amounts as a result of withholding for Special Taxes
or additional costs incurred as a result of the assignment of all or any portion
of the Loan by Lender to any Person that is subject to Special Taxes and which
is organized under or has its principal place of business outside of the United
States of America or any political subdivision thereof.

                           2.4.3    OTHER TAXES. In addition, Borrower agrees to
pay any present or future stamp or documentary taxes or other excise or property
taxes, charges, or similar levies which arise from any payment made hereunder,
or from the execution, delivery or registration of, or otherwise with respect
to, this Agreement, the other Loan Documents, or the Loan (hereinafter referred
to as OTHER TAXES).

                           2.4.4    INDEMNITY. Borrower shall indemnify Lender
for the full amount of Special Taxes and Other Taxes (including any Special
Taxes or Other Taxes imposed by any Governmental Authority on amounts payable
under this Section 2.4.4) paid by Lender and any liability (including penalties,
interest, and expenses) arising therefrom or with respect thereto, whether or
not such Special Taxes or Other Taxes were correctly or legally asserted. This
indemnification shall be made within thirty (30) days after the date Lender
makes written demand therefor.

                           2.4.5    CHANGE OF OFFICE. To the extent that
changing the jurisdiction of Lender's applicable office would have the effect of
minimizing Special Taxes, Other Taxes or Increased Costs, Lender shall use
reasonable efforts to make such a change, provided that same would not otherwise
be disadvantageous to Lender.

                           2.4.6    SURVIVAL. Without prejudice to the survival
of any other agreement of Borrower hereunder, the agreements and obligations of
Borrower contained
<PAGE>

in this Section 2.4 shall survive the payment in full of principal and interest
hereunder, and the termination of this Agreement.

                  III.     CASH MANAGEMENT

                  SECTION 3.1       CASH MANAGEMENT.

                          3.1.1     ESTABLISHMENT OF ACCOUNTS. Borrower hereby
confirms that, simultaneously with the execution of this Agreement, pursuant to
the Account Agreement, it has established with Cash Management Bank, in the name
of Borrower for the benefit of Lender, as secured party, the collection account
(the COLLECTION ACCOUNT), which has been established as an interest-bearing
deposit account and the holding account (the HOLDING ACCOUNT), which has been
established as a securities account. Both the Collection Account and the Holding
Account and each sub-account of either such account and the funds deposited
therein and securities and other assets credited thereto shall serve as
additional security for the Loan. Pursuant to the Account Agreement, Borrower
shall irrevocably instruct and authorize Cash Management Bank to disregard any
and all orders for withdrawal from the Collection Account or the Holding Account
made by, or at the direction of, Borrower other than to transfer all amounts on
deposit in the Collection Account on a daily basis to the Holding Account.
Pursuant to the Account Agreement, Cash Management Bank on a daily basis shall
transfer all collected and available funds as determined by Cash Management
Bank's then current funds availability schedule received in the Collection
Account to the Holding Account. Borrower agrees that, prior to the payment in
full of the Indebtedness, the terms and conditions of the Account Agreement
shall not be amended or modified without the prior written consent of Lender
(which consent Lender may grant or withhold in its sole discretion), and if a
Securitization has occurred, the delivery by Borrower of a Rating Agency
Confirmation. In recognition of Lender's security interest in the funds
deposited into the Collection Account and the Holding Account, Borrower shall
identify both the Collection Account and the Holding Account with the name of
Lender, as secured party. The Collection Account shall be named as follows: "731
Office One LLC f/b/o German American Capital Corporation, as secured party
Collection Account" (Account Number 323962033). The Holding Account shall be
named as follows: "731 Office One LLC f/b/o German American Capital Corporation,
as secured party Holding Account" (Account Number 323962025). Borrower confirms
that it has established with Cash Management Bank the following sub-accounts of
the Holding Account (each, a SUB-ACCOUNT and, collectively, the Sub-Accounts and
together with the Holding Account and the Collection Account, the COLLATERAL
ACCOUNTS), which (i) may be ledger or book entry sub-accounts and need not be
actual sub-accounts, (ii) shall each be linked to the Holding Account, (iii)
shall each be a "Securities Account" pursuant to Article 8 of the UCC and (iv)
shall each be an Eligible Account to which certain funds shall be allocated and
from which disbursements shall be made pursuant to the terms of this Agreement:

                                    (i)      a sub-account for the retention of
                  Account Collateral in respect of Debt Service on the Loan with
                  the account number 323962025-01 (the DEBT SERVICE RESERVE
                  ACCOUNT);

<PAGE>

                                    (ii)     a sub-account for the retention of
                  Account Collateral in respect of Real Estate Taxes and Other
                  Charges for the Property with the account number 323962025-02
                  (the TAX RESERVE ACCOUNT);

                                    (iii)    a sub-account for the retention of
                  Account Collateral in respect of insurance premiums for the
                  Property with the account number 323962025-03 (the INSURANCE
                  RESERVE ACCOUNT);

                                    (iv)     a sub- account for the retention of
                  Account Collateral in respect of reserves for capital
                  improvements to the Property with the account number
                  323962025-04 (the STRUCTURAL RESERVE ACCOUNT);

                                    (v)      a sub- account for the retention of
                  Account Collateral in respect of reserves for budgeted
                  Operating Expenses for the Property with the account number
                  323962025-07 (the OPERATING EXPENSE RESERVE ACCOUNT);

                                    (vi)     a sub- account for the retention of
                  Account Collateral in respect of Proceeds as more fully set
                  forth in Section 6.2 with the account number 323962025-05 (the
                  PROCEEDS RESERVE ACCOUNT);

                                    (vii)    a sub-account for the retention of
                  Account Collateral in respect of reserves relating to Debt
                  Service shortfalls for the period prior to the final Rent
                  Commencement Date with the account number 323962025-08 (the
                  ADDITIONAL DEBT SERVICE RESERVE ACCOUNT);

                                    (viii)   a sub-account for the retention of
                  Account Collateral in respect of the Alterations as more fully
                  set forth in Section 10.3 with the account number 323962025-06
                  (the ALTERATIONS RESERVE ACCOUNT) and

                                    (ix)     a sub-account for the retention of
                  Account Collateral in respect of the collection of Excess Cash
                  Flow during a Cash Trap Period with the account number
                  323962025-09 (the CASH TRAP RESERVE ACCOUNT).

Amounts on deposit in the Holding Account and Sub-Accounts will be invested in
Permitted Investments in accordance with the terms of the Account Agreement.

                           3.1.2    PLEDGE OF ACCOUNT COLLATERAL. To secure the
full and punctual payment and performance of the Obligations, Borrower hereby
collaterally assigns, grants a security interest in and pledges to Lender, to
the extent not prohibited by applicable law, a first priority continuing
security interest in and to Borrower's right, title and interest in and to the
following property, whether now owned or existing or hereafter acquired or
arising and regardless of where located (all of the same, collectively, the
ACCOUNT COLLATERAL):

                           (a)      the Collateral Accounts and all cash,
         checks, drafts, securities entitlements, certificates, instruments and
         other property, including,
<PAGE>

         without limitation, all deposits and/or wire transfers from time to
         time deposited or held in, credited to or made to Collateral Accounts;

                           (b)      any and all amounts invested in Permitted
         Investments;

                           (c)      all interest, dividends, cash, instruments,
         securities entitlements and other property from time to time received,
         receivable or otherwise payable in respect of, or in exchange for, any
         or all of the foregoing or purchased with funds from the Collateral
         Accounts; and

                           (d)      to the extent not covered by clauses (a),
         (b) or (c) above, all proceeds (as defined under the UCC) of any or all
         of the foregoing.

                  In addition to the rights and remedies herein set forth,
Lender shall have all of the rights and remedies with respect to the Account
Collateral available to a secured party at law or in equity, including, without
limitation, the rights of a secured party under the UCC, as if such rights and
remedies were fully set forth herein.

                  This Agreement shall constitute a security agreement for
purposes of the Uniform Commercial Code and other applicable law.

                           3.1.3    MAINTENANCE OF BORROWER.

                           (a)      Borrower agrees that the Collection Account
         is and shall be maintained (i) as a "deposit account" (as such term is
         defined in Section 9-102(a)(29) of the UCC), (ii) in such a manner that
         Lender shall have control (within the meaning of Section 9-104(a)(2) of
         the UCC) over the Collection Account and (iii) such that neither the
         Borrower nor Manager shall have any right of withdrawal from the
         Collection Account and, except as provided herein, no Account
         Collateral shall be released to the Borrower or Manager from the
         Collection Account. Without limiting the Borrower's obligations under
         the immediately preceding sentence, Borrower shall only establish and
         maintain the Collection Account with a financial institution that has
         executed an agreement substantially in the form of the Account
         Agreement or in such other form acceptable to Lender in its sole
         discretion.

                           (b)      Borrower agrees that each of the Holding
         Account and the Sub-Accounts is and shall be (or if each such
         Sub-Account has yet to be established, will and shall be) maintained
         (i) as a "securities account" (as such term is defined in Section
         8-501(a) of the UCC), (ii) in such a manner that Lender shall have
         control (within the meaning of Section 8-106(d)(2) of the UCC) over the
         Holding Account and any Sub-Account thereof, (iii) such that neither
         Borrower nor any Manager shall have any right of withdrawal from the
         Holding Account or the Sub-Accounts and, except as provided herein, no
         Account Collateral shall be released to Borrower from the Holding
         Account or the Sub-Accounts, (iv) in such a manner that the Cash
         Management Bank shall agree to treat all property credited to the
         Holding Account or the Sub-Accounts as "financial assets" and (v) such
         that all securities or other property underlying any
<PAGE>

         financial assets credited to any of the Sub-Accounts shall be
         registered in the name of Cash Management Bank, indorsed to Cash
         Management Bank or in blank or credited to another securities account
         maintained in the name of Cash Management Bank and in no case will any
         financial asset credited to the Accounts be registered in the name of
         Borrower, payable to the order of Borrower or specially indorsed to
         Borrower except to the extent the foregoing have been specially
         indorsed to Cash Management Bank or in blank. Without limiting
         Borrower's obligations under the immediately preceding sentence,
         Borrower shall only establish and maintain the Holding Account with a
         financial institution that has executed an agreement substantially in
         the form of the Account Agreement or in such other form acceptable to
         Lender in its sole discretion.

                           3.1.4    ELIGIBLE ACCOUNTS. The Collateral Accounts
shall be Eligible Accounts. The Collateral Accounts shall be subject to such
applicable laws, and such applicable regulations of the Board of Governors of
the Federal Reserve System and of any other banking or governmental authority,
as may now or hereafter be in effect. Income and interest accruing on the
Collateral Accounts or any investments held in such accounts shall be
periodically added to the principal amount of such account and shall be held,
disbursed and applied in accordance with the provisions of this Agreement and
the Account Agreement. Borrower shall be the beneficial owner of the Collateral
Accounts for federal income tax purposes and shall report all income on the
Collateral Accounts.

                           3.1.5    DEPOSITS INTO SUB-ACCOUNTS. On the date
hereof, Borrower has deposited the following amounts into the Sub-Accounts:

                                    (i)      $382,217 into the Tax Reserve
                  Account;

                                    (ii)     $0 into the Insurance Reserve
                  Account;

                                    (iii)    $0 into the Debt Service Reserve
                  Account;

                                    (iv)     $0 into the Structural Reserve
                  Account;

                                    (v)      $0 into the Operating Expense
                  Reserve Account;

                                    (vi)     $11,169,694 into the Additional
                  Debt Service Reserve Account;

                                    (vii)    $0 into the Alteration Reserve
                  Account;

                                    (viii)   $0 into the Proceeds Reserve
                  Account; and

                                    (ix)     $0 into the Cash Trap Reserve
                  Account.

                           3.1.6    MONTHLY FUNDING OF ACCOUNTS.

                           (a)      Borrower hereby irrevocably authorizes
         Lender to transfer (and, pursuant to the Account Agreement shall
         irrevocably authorize Cash
<PAGE>

         Management Bank to execute any corresponding instructions of Lender),
         and Lender shall transfer, from the Holding Account by 2:00 p.m. New
         York time commencing on the first (1st) Business Day of each calendar
         month, and on each Business Day thereafter until, but not including,
         the first (1st) Business Day of the next succeeding calendar month
         (such period, the COLLECTION PERIOD), or as soon thereafter as
         sufficient funds are in the Holding Account to make the applicable
         transfers, in the following amounts and in the following order of
         priority:

                                    (i)      during any period that Bloomberg is
                  not required or has failed to pay Real Estate Taxes and Other
                  Charges in full, funds in an amount equal to the Monthly Tax
                  Reserve Amount and any other amounts required pursuant to
                  Section 16.1 for the Collection Period in which the transfer
                  from the Holding Account is made and transfer the same to the
                  Tax Reserve Account (Borrower hereby agrees that prior to the
                  final Rent Commencement Date, fifty (50%) percent of all Real
                  Estate Taxes and Other Charges shall be paid directly out of
                  the Tax Reserve Account from the Initial Tax Reserve Amount as
                  more particularly set forth in Section 16.1 hereof);

                                    (ii)     during any period that Bloomberg is
                  not required or has failed to pay the insurance premiums in
                  full with respect to the policies required hereunder or the
                  common charges related thereto pursuant to the Bloomberg Lease
                  and the Condominium Declaration and/or the By-laws, funds in
                  an amount equal to the Monthly Insurance Reserve Amount
                  determined in accordance with Section 16.2 and any other
                  amounts required pursuant to Section 16.2 for the Collection
                  Period in which the transfer from the Holding Account is made
                  and transfer the same to the Insurance Reserve Account;

                                    (iii)    funds in an amount equal to the
                  amount of Debt Service due on the Payment Date in the
                  Collection Period in which the transfer from the Holding
                  Account is made and transfer the same to the Debt Service
                  Reserve Account (provided, prior to the final Rent
                  Commencement Date, Debt Service shall be paid directly out of
                  the Additional Debt Service Reserve Account in accordance with
                  the terms of Section 16.4 hereof);

                                    (iv)     during any period that Bloomberg is
                  not required or has failed to pay the Operating Expenses for
                  the Property in full, funds in an amount equal to the Approved
                  Operating Expenses for the month in which the Payment Date
                  immediately following the date of the transfer from the
                  Holding Account occurs, and transfer the same to Borrower's
                  Account; provided, however, that to the extent that the
                  Officer's Certificate delivered to Lender on a quarterly basis
                  by Borrower pursuant to Article XI provides evidence
                  reasonably satisfactory to Lender that actual Operating
                  Expenses for such calendar quarter were either less than or
                  greater than Approved Operating Expenses, then Lender may
                  direct Cash
<PAGE>

                  Management Bank to increase or decrease the amount of the
                  Approved Operating Expense transfer to be made for the month
                  following the month in which such Officer's Certificate was
                  delivered, such adjustment to be in an amount reasonably
                  determined by Lender to appropriately reflect such difference
                  between actual Operating Expenses and Approved Operating
                  Expenses;

                                    (v)      during any period that Bloomberg is
                  not required or has failed to pay the cost of any capital
                  improvements for the Property in full, funds in an amount
                  equal to the Monthly Structural Reserve Amount determined in
                  accordance with Section 16.3 for the Collection Period in
                  which the transfer from the Holding Account is made and
                  transfer the same to the Structural Reserve Account; and

                                    (vi)     funds in an amount equal to the
                  balance (if any) remaining or deposited in the Holding Account
                  after the foregoing deposits (such remainder being hereinafter
                  referred to as EXCESS CASH FLOW) and provided no Event of
                  Default (which shall be governed by the terms of Section
                  3.1.10 hereof) or Cash Trap Period (which shall be governed by
                  the terms of Section 16.5 hereof) shall have occurred and is
                  then continuing, transfer any Excess Cash Flow (x) prior to
                  the Anticipated Repayment Date, to the Borrower's Account and
                  (y) on or after the Anticipated Repayment Date, to the Debt
                  Service Reserve Account to be applied as a partial prepayment
                  of the principal Indebtedness without the imposition of any
                  Yield Maintenance Premium or the Liquidated Damages Amount or
                  any other prepayment premium or charge of any kind.

                           (b)      If after such transfer, Lender shall
         reasonably determine that there are insufficient funds in the Tax
         Reserve Account to make payments of Real Estate Taxes and/or Other
         Charges when due, or if Lender shall reasonably determine that there
         will be insufficient amounts in the Collection Account or the Holding
         Account to make any of the transfers pursuant to this Section 3.1.6
         inclusive on the date required hereunder on the next Payment Date,
         Lender shall provide notice to Borrower of such insufficiency (except
         that in no event shall Lender be required to notify Borrower of any
         deficiency in the Debt Service Reserve Account, such deficiency on any
         Payment Date being an Event of Default) and, within five (5) Business
         Days after receipt of said notice and prior to the expiration of any
         grace period applicable to such payment, Borrower shall deposit into
         the Holding Account, an amount equal to the shortfall of available
         funds in the Holding Account, taking into account any funds which
         accumulate in the Holding Account during such five (5) Business Day
         period. Notwithstanding anything to the contrary contained in this
         Agreement or in the other Loan Documents, Borrower shall not be deemed
         to be in default hereunder or thereunder in the event funds sufficient
         for a required transfer are held in the Holding Account, or the
         appropriate Sub-Account, and Lender or Cash Management Bank fails to
         timely make any transfer from the Holding Account, or
<PAGE>

         to or from such Sub-Account, as contemplated by this Agreement unless
         due to an act or omission of Borrower; and

                           (c)      Notwithstanding anything to the contrary
         contained herein or in the Security Instrument, to the extent that
         Borrower shall fail to pay any mortgage recording tax, costs, expenses
         or other amounts pursuant to Section 19.12 of this Agreement (other
         than any such costs, expenses or other amounts to be paid at closing)
         within the time period set forth therein, Lender shall have the right,
         at any time, without notice to Borrower, to withdraw from the Holding
         Account, an amount equal to such unpaid taxes, costs, expenses and/or
         other amounts and pay such amounts to the Person(s) entitled thereto.

                           3.1.7    PAYMENTS FROM SUB-ACCOUNTS.

                           (a)      Borrower irrevocably authorizes Lender to
         make and, provided no Event of Default shall have occurred and be
         continuing, Lender hereby agrees to make, the following payments from
         the Sub-Accounts to the extent of the monies on deposit therefor:

                                    (i)      funds from the Debt Service Reserve
                  Account to Lender sufficient to pay Debt Service on each
                  Payment Date, and Lender, on each Payment Date, shall apply
                  such funds to the payment of the Debt Service payable on such
                  Payment Date;

                                    (ii)     if notified (timely) by Borrower or
                  otherwise determined by Lender in its reasonable discretion
                  that Bloomberg will not pay Real Estate Taxes or Other
                  Charges, funds from the Tax Reserve Account to Lender
                  sufficient to permit Lender to pay (A) Real Estate Taxes and
                  (B) Other Charges, on the respective due dates therefor, and
                  Lender shall so pay such funds to the Governmental Authority
                  having the right to receive such funds;

                                    (iii)    if notified (timely) by Borrower or
                  otherwise determined by Lender in its reasonable discretion
                  that Bloomberg will not pay the insurance premiums with
                  respect to the policies required hereunder, funds from the
                  Insurance Reserve Account to Lender sufficient to permit
                  Lender to pay insurance premiums for the insurance required to
                  be maintained pursuant to the terms of this Agreement and the
                  Security Instrument, on the respective due dates therefor, and
                  Lender shall so pay such funds to the insurance company having
                  the right to receive such funds (or to Borrower as a
                  reimbursement for premiums paid in accordance with the terms
                  of Section 16.1.2 hereof);

                                    (iv)     if notified (timely) by Borrower or
                  otherwise determined by Lender in its reasonable discretion
                  that Bloomberg will not pay the operating expenses for the
                  Property, no more frequently than once in any calendar month,
                  funds from the Operating Expense Reserve
<PAGE>

                  Account in an amount equal to the Approved Operating Expenses
                  for the month in which the transfer is made, and transfer the
                  same to Borrower's Account;

                                    (v)      if notified (timely) by Borrower or
                  otherwise determined by Lender in its reasonable discretion
                  that Bloomberg will not pay the cost of any capital
                  improvements for the Property, no more frequently than once in
                  any calendar month, funds from the Structural Reserve Account
                  to the Borrower's Account to reimburse Borrower or to pay for
                  the cost of capital improvements to the Property; and

                                    (vi)     payments from the Additional Debt
                  Service Reserve Account will be made in accordance with the
                  terms of Section 16.4.

                           (b)      Provided that no Event of Default or Cash
         Trap Period has occurred and is continuing, Lender agrees to release to
         Borrower any amounts (or portions thereof) on deposit in the Tax
         Reserve Account, Insurance Reserve Account, Operating Expense Reserve
         Account and/or the Structural Reserve Account if Borrower provides
         written evidence reasonably satisfactory to Lender that Bloomberg has
         paid when due the item for which the amount on deposit was reserved
         for. To the extent in Lender's sole but reasonable discretion (whether
         based upon information provided by Borrower or otherwise) any such
         amounts (or portions thereof) would have been released to Borrower but
         for the continuance of a Cash Trap Period, such amounts (or portions
         thereof) will be transferred to the Cash Trap Reserve Account as
         additional Excess Cash Flow to be applied by Lender in accordance with
         the terms of Section 16.5 hereof.

                           3.1.8    CASH MANAGEMENT BANK.

                           (a)      Lender shall have the right at Borrower's
         sole cost and expense to replace the Cash Management Bank with a
         financial institution reasonably satisfactory to Borrower in the event
         that (i) the Cash Management Bank fails, in any material respect, to
         comply with the Account Agreement, (ii) the Cash Management Bank named
         herein is no longer the Cash Management Bank, unless Lender has
         consented in writing to such change or the Cash Management Bank named
         herein has merged with, acquired or has been acquired by another bank
         which is and continues to be an Approved Bank or (iii) the Cash
         Management Bank is no longer an Approved Bank. Upon the occurrence and
         during the continuance of an Event of Default, Lender shall have the
         right at Borrower's sole cost and expense to replace Cash Management
         Bank with an Approved Bank at any time, with three (3) Business Days
         prior notice to Borrower. Borrower shall cooperate with Lender in
         connection with the appointment of any replacement Cash Management Bank
         and the execution by the Cash Management Bank and the Borrower of an
         Account Agreement and delivery of same to Lender.
<PAGE>

                           (b)      So long as no Event of Default shall have
         occurred and be continuing, Borrower shall have the right at its sole
         cost and expense to replace the Cash Management Bank with a financial
         institution that is an Approved Bank provided that such financial
         institution and Borrower shall execute and deliver to Lender an Account
         and Control Agreement in substantially the form of the Account
         Agreement.

                           3.1.9    BORROWER'S ACCOUNT REPRESENTATIONS. Borrower
represents, warrants and covenants that (i) as of the date hereof, Borrower has
directed Bloomberg to either mail all checks or wire all funds with respect to
rental funds due under the Bloomberg Lease directly into the Collection Account
and has delivered to Bloomberg a letter substantially in the form attached
hereto as EXHIBIT B, (ii) Borrower shall cause Manager to deposit all amounts
payable to Borrower pursuant to the Management Agreement directly into the
Collection Account, (iii) Borrower shall pay or cause to be paid all Rents, Cash
and Cash Equivalents or other items of Operating Income not covered by the
preceding clauses (i) and (ii) within two (2) Business Days after receipt
thereof directly into the Collection Account and (iv) as of the date hereof,
there are no accounts other than the Collateral Accounts maintained by Borrower
or any other Person with respect to the collection of Rents with respect to the
Property and, so long as the Loan shall be outstanding, neither Borrower nor any
other Person shall open any other operating accounts with respect to the
collection of Rents with respect to the Property except for the Collateral
Accounts, provided that the foregoing shall not prohibit Borrower or Manager
from utilizing one or more separate accounts for the disbursement or retention
of funds that have been transferred to the Borrower's Account pursuant to
Section 3.1.6. Borrower hereby agrees that all amounts required to be deposited
in the Collateral Accounts and received by Borrower or any of its Affiliates
shall be deposited within two (2) Business Days of Borrower's receipt thereof,
or after the occurrence of an Event of Default immediately, into the Collateral
Accounts. Until so deposited, any such amounts held by Borrower, Manager or any
Affiliate of Borrower or Manager shall be deemed to be Account Collateral and
shall be held in trust by it for the benefit, and as the property, of Lender and
shall not be commingled with any other funds or property of Borrower or Manager.

                           3.1.10   ACCOUNT COLLATERAL AND REMEDIES.

                           (a)      Upon the occurrence and during the
         continuance of an Event of Default, without additional notice from
         Lender to Borrower, (i) Lender may, in addition to and not in
         limitation of Lender's other rights, make any and all withdrawals from,
         and transfers between and among, the Collateral Accounts as Lender
         shall determine in its sole and absolute discretion to pay any
         Obligations, Operating Expenses and/or capital expenditures for the
         Property; (ii) all Excess Cash Flow shall be retained in the Holding
         Account or applicable Sub-Accounts, (iii) all payments to Borrower's
         Account pursuant to Section 3.1.6 shall immediately cease and (iv)
         Lender may liquidate and transfer any amounts then invested in
         Permitted Investments to the Collateral Accounts to which they relate
         or reinvest such amounts in other Permitted Investments as Lender may
         reasonably determine is necessary to perfect or protect any security
         interest
<PAGE>

         granted or purported to be granted hereby or to enable Lender to
         exercise and enforce Lender's rights and remedies hereunder with
         respect to any Account Collateral or to preserve the value of the
         Account Collateral.

                           (b)      Upon the occurrence and during the
         continuance of an Event of Default, Borrower hereby irrevocably
         constitutes and appoints Lender as Borrower's true and lawful
         attorney-in-fact, with full power of substitution, to execute,
         acknowledge and deliver any instruments and to exercise and enforce
         every right, power, remedy, option and privilege of Borrower with
         respect to the Account Collateral, and do in the name, place and stead
         of Borrower, all such acts, things and deeds for and on behalf of and
         in the name of Borrower, which Borrower could or might do or which
         Lender may deem necessary or desirable to more fully vest in Lender the
         rights and remedies provided for herein and to accomplish the purposes
         of this Agreement. The foregoing powers of attorney are irrevocable and
         coupled with an interest. Upon the occurrence and during the
         continuance of an Event of Default, Lender may perform or cause
         performance of any such agreement, and any reasonable expenses of
         Lender incurred in connection therewith shall be paid by Borrower as
         provided in Section 5.1.16.

                           (c)      During a Cash Trap Period, all Excess Cash
         Flow shall be retained by Lender and applied in accordance with the
         terms of Section 16.5 hereof.

                           (d)      Borrower hereby expressly waives, to the
         fullest extent permitted by law, presentment, demand, protest or any
         notice of any kind in connection with this Agreement or the Account
         Collateral. Borrower acknowledges and agrees that ten (10) days' prior
         written notice of the time and place of any public sale of the Account
         Collateral or any other intended disposition thereof shall be
         reasonable and sufficient notice to Borrower within the meaning of the
         UCC.

                           3.1.11   TRANSFERS AND OTHER LIENS. Borrower agrees
that it will not (i) sell or otherwise dispose of any of the Account Collateral
or (ii) create or permit to exist any Lien upon or with respect to all or any of
the Account Collateral, except for the Lien granted to Lender, under this
Agreement.

                           3.1.12   REASONABLE CARE. Beyond the exercise of
reasonable care in the custody thereof, Lender shall have no duty as to any
Account Collateral in its possession or control as agent therefor or bailee
thereof or any income thereon or the preservation of rights against any person
or otherwise with respect thereto. Lender shall be deemed to have exercised
reasonable care in the custody and preservation of the Account Collateral in its
possession if the Account Collateral is accorded treatment substantially equal
to that which Lender accords its own property, it being understood that Lender
shall not be liable or responsible for any loss or damage to any of the Account
Collateral, or for any diminution in value thereof, by reason of the act or
omission of Lender, its Affiliates, agents, employees or bailees, except to the
extent that such loss or damage results from Lender's, its Affiliate's, agent's,
employee's or bailee's
<PAGE>

gross negligence or willful misconduct. In no event shall Lender be liable
either directly or indirectly for losses or delays resulting from any event
which may be the basis of an Excusable Delay, computer malfunctions,
interruption of communication facilities, labor difficulties or other causes
beyond Lender's reasonable control or for indirect, special or consequential
damages except to the extent of Lender's gross negligence or willful misconduct.
Notwithstanding the foregoing, Borrower acknowledges and agrees that (i) Lender
does not have custody of the Account Collateral, (ii) Cash Management Bank has
custody of the Account Collateral, (iii) Cash Management Bank was originally
chosen by Borrower and (iv) Lender has no obligation or duty to supervise Cash
Management Bank or to see to the safe custody of the Account Collateral.

                           3.1.13   LENDER'S LIABILITY.

                           (a)      Lender shall be responsible for the
         performance only of such duties with respect to the Account Collateral
         as are specifically set forth in this Section 3.1 or elsewhere in the
         Loan Documents, and no other duty shall be implied from any provision
         hereof. Lender shall not be under any obligation or duty to perform any
         act with respect to the Account Collateral which would cause it to
         incur any expense or liability or to institute or defend any suit in
         respect hereof, or to advance any of its own monies. Borrower shall
         indemnify and hold Lender, its employees and officers harmless from and
         against any loss, cost or damage (including, without limitation,
         reasonable attorneys' fees and disbursements) incurred by Lender in
         connection with the transactions contemplated hereby with respect to
         the Account Collateral except as such may be caused by the gross
         negligence or willful misconduct of Lender, its employees, officers or
         agents.

                           (b)      Lender shall be protected in acting upon any
         notice, resolution, request, consent, order, certificate, report,
         opinion, bond or other paper, document or signature believed by it in
         good faith to be genuine, and, in so acting, it may be assumed that any
         person purporting to give any of the foregoing in connection with the
         provisions hereof has been duly authorized to do so. Lender may consult
         with counsel, and the opinion of such counsel shall be full and
         complete authorization and protection in respect of any action taken or
         suffered by it hereunder and in good faith in accordance therewith.

                           3.1.14   CONTINUING SECURITY INTEREST. This Agreement
shall create a continuing security interest in the Account Collateral and shall
remain in full force and effect until payment in full of the Indebtedness. Upon
payment in full of the Indebtedness, this security interest shall automatically
terminate without further notice from any party and Borrower shall be entitled
to the return, upon its request, of such of the Account Collateral as shall not
have been sold or otherwise applied pursuant to the terms hereof and Lender
shall execute such instruments and documents as may be reasonably requested by
Borrower to evidence such termination and the release of the Account Collateral.
<PAGE>

                  IV.      REPRESENTATIONS AND WARRANTIES

                  SECTION  4.1      BORROWER REPRESENTATIONS.

                  Borrower represents and warrants as of the Closing Date that:

                           4.1.1    ORGANIZATION.

                           (a)      Borrower has been duly organized as a
         limited liability company and is validly existing and in good standing
         pursuant to the laws of the state of Delaware with requisite power and
         authority to own its properties and to transact the businesses in which
         it is now engaged. Borrower has duly qualified to do business and is in
         good standing in each jurisdiction where it is required to be so
         qualified in connection with its properties, businesses and operations.
         Borrower possesses all rights, licenses, permits and authorizations,
         governmental or otherwise, necessary to entitle it to own its
         properties and to transact the businesses in which it is now engaged,
         and the sole business of Borrower is the management and operation of
         the Property. The organizational structure of Borrower is accurately
         depicted by the schematic diagram attached hereto as EXHIBIT C.
         Borrower shall not change its name, identity, corporate structure or
         jurisdiction of organization unless it shall have given Lender 30 days
         prior written notice of any such change and shall have taken all steps
         reasonably requested by Lender to grant, perfect, protect and/or
         preserve the security interest granted hereunder to Lender.

                           (b)      Guarantor has been duly organized as a
         corporation and is validly existing and in good standing pursuant to
         the laws of the state of Delaware with requisite power and authority to
         own its properties and to transact the business in which it is now
         engaged.

                           4.1.2    PROCEEDINGS. Borrower has taken all
necessary action to authorize the execution, delivery and performance of this
Agreement and the other Loan Documents. This Agreement and the other Loan
Documents have been duly executed and delivered by, or on behalf of, Borrower
and constitute legal, valid and binding obligations of Borrower, enforceable
against Borrower in accordance with their respective terms, subject only to
applicable bankruptcy, insolvency and similar laws affecting rights of creditors
generally, and subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).

                           4.1.3    NO CONFLICTS. The execution, delivery and
performance of this Agreement and the other Loan Documents by Borrower will not
result in a breach of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge or
encumbrance (other than pursuant to the Loan Documents) upon any of the property
or assets of Borrower and Guarantor pursuant to the terms of any indenture,
mortgage, deed of trust, loan agreement, partnership agreement or other
agreement or instrument to which Borrower is a party or by which
<PAGE>

any of Borrower's or Guarantor's property or assets is subject (unless consents
from all applicable parties thereto have been obtained), nor will such action
result in any violation of the provisions of any statute or any order, rule or
regulation of any court or Governmental Authority having jurisdiction over
Borrower or any of Borrower's or Guarantor's properties or assets, and any
consent, approval, authorization, order, registration or qualification of or
with any court or any such regulatory authority or other Governmental Authority
required for the execution, delivery and performance by Borrower of this
Agreement or any other Loan Documents has been obtained and is in full force and
effect.

                           4.1.4    LITIGATION. Except as set forth on EXHIBIT D
attached hereto, there are no arbitration proceedings, governmental
investigations, actions, suits or proceedings at law or in equity by or before
any Governmental Authority or other agency now pending or, to the best of
Borrower's knowledge, threatened in writing against or affecting Borrower, any
SPE Entity, Guarantor or the Property. The actions, suits or proceedings
identified on EXHIBIT D, if determined against Borrower, any SPE Entity,
Guarantor or the Property, would not materially and adversely affect the
condition (financial or otherwise) or business of Guarantor or have a Material
Adverse Effect.

                           4.1.5    AGREEMENTS. Borrower is not a party to any
agreement or instrument or subject to any restriction which is reasonably likely
to have a Material Adverse Effect. Borrower is not to the best of its knowledge
in default in any material respect in the performance, observance or fulfillment
of any of the obligations, covenants or conditions contained in any agreement or
instrument to which it is a party or by which Borrower or the Property is bound.
Borrower has no material financial obligation (contingent or otherwise) under
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which Borrower is a party or by which Borrower or the Property is
otherwise bound, other than (a) obligations incurred in the ordinary course of
the operation of the Property and (b) obligations under the Loan Documents.

                           4.1.6    TITLE. Borrower has good and insurable fee
simple title to the Condominium Unit and all Common Elements appurtenant thereto
and good and insurable title to the Improvements, free and clear of all Liens
whatsoever except the Permitted Encumbrances, such other Liens as are permitted
pursuant to the Loan Documents and the Liens created by the Loan Documents.
Borrower has good title to the remainder of the Property, free and clear of all
Liens whatsoever except the Permitted Encumbrances. The Security Instrument,
when properly recorded in the appropriate records, together with the Assignment
of Leases and any Uniform Commercial Code financing statements required to be
filed in connection therewith, will create (a) a valid, perfected first mortgage
lien on Borrower's interest in and to the Condominium Unit and the Improvements,
subject only to Permitted Encumbrances and (b) perfected security interests in
and to, and perfected collateral assignments of, all personalty (including the
Bloomberg Lease described therein), all in accordance with the terms thereof, in
each case subject only to any applicable Permitted Encumbrances. There are no
claims for payment for work, labor or materials affecting the Property which are
or may become a lien prior to, or of equal priority with, the Liens created by
the Loan Documents. Borrower represents and warrants that none of the Permitted
Encumbrances will have a
<PAGE>

Material Adverse Effect as of the Closing Date and thereafter. Borrower will
preserve its right, title and interest in and to the Property (except for
replacements thereof, if permitted hereby) for so long as the Note remains
outstanding and will warrant and defend same and the validity and priority of
the Lien hereof from and against any and all claims whatsoever other than the
Permitted Encumbrances.

                           4.1.7    NO BANKRUPTCY FILING. Neither Borrower nor
Guarantor is contemplating either the filing of a petition by it under any state
or federal bankruptcy or insolvency laws or the liquidation of all or a major
portion of such entity's assets or property, and Borrower has no knowledge of
any Person contemplating the filing of any such petition against Borrower or
Guarantor.

                           4.1.8    FULL AND ACCURATE DISCLOSURE. No statement
of fact made by Borrower in this Agreement or in any of the other Loan Documents
contains any untrue statement of a material fact or omits to state any material
fact necessary to make statements contained herein or therein not materially
misleading. There is no fact presently known to Borrower and related to the
Loan, the Property, Borrower, Manager, Guarantor or any Affiliate of any such
Person which has not been disclosed which could reasonably be expected to have a
Material Adverse Effect.

                           4.1.9    ALL PROPERTY. The Property constitutes all
of the real property, personal property, equipment and fixtures currently (i)
owned or leased by Borrower or (ii) used by Borrower, in the operation of the
business located on the Property, other than items owned or leased by Bloomberg.

                           4.1.10   NO PLAN ASSETS.

                           (a)      Except as set forth on SCHEDULE II, Borrower
         does not maintain an employee benefit plan as defined by Section 3(3)
         of ERISA, which is subject to Title IV of ERISA, and Borrower (i) has
         no knowledge of any material liability which has been incurred or is
         expected to be incurred by Borrower which is or remains unsatisfied for
         any taxes or penalties with respect to any "employee benefit plan,"
         within the meaning of Section 3(3) of ERISA, or any "plan," within the
         meaning of Section 4975(e)(1) of the Internal Revenue Code or any other
         benefit plan (other than a multiemployer plan) maintained, contributed
         to, or required to be contributed to by Borrower or by any entity that
         is under common control with Borrower within the meaning of ERISA
         Section 4001(a)(14) (a PLAN) or any plan that would be a Plan but for
         the fact that it is a multiemployer plan within the meaning of ERISA
         Section 3(37); and (ii) has made and shall continue to make when due
         all required contributions to all such Plans, if any. Each such Plan
         has been and will be administered in compliance with its terms and the
         applicable provisions of ERISA, the Internal Revenue Code, and any
         other applicable federal or state law; and no action shall be taken or
         fail to be taken that would result in the disqualification or loss of
         tax-exempt status of any such Plan intended to be qualified and/or tax
         exempt; and
<PAGE>

                           (b)      Borrower is not an employee benefit plan, as
         defined in Section 3(3) of ERISA, subject to Title I of ERISA, none of
         the assets of Borrower constitutes or will constitute plan assets of
         one or more such plans within the meaning of 29 C.F.R. Section
         2510.3-101 and Borrower is not a governmental plan within the meaning
         of Section 3(32) of ERISA and transactions by or with Borrower are not
         subject to state statutes regulating investment of, and fiduciary
         obligations with respect to, governmental plans similar to the
         provisions of Section 406 of ERISA or Section 4975 of the Code
         currently in effect, which prohibit or otherwise restrict the
         transactions contemplated by this Agreement.

                           4.1.11   COMPLIANCE. Borrower and the Property and
the use thereof comply in all respects with all applicable Legal Requirements,
including, without limitation, building and zoning ordinances and codes except
where the failure to so comply individually or in the aggregate could not have a
Material Adverse Effect. To the best of Borrower's knowledge, Borrower is not in
default or in violation of any order, writ, injunction, decree or demand of any
Governmental Authority. To the best of Borrower's knowledge, there has not been
committed by Borrower any act or omission affording the federal government or
any other Governmental Authority the right of forfeiture as against the Property
or any part thereof or any monies paid in performance of Borrower's obligations
under any of the Loan Documents.

                           4.1.12   FINANCIAL INFORMATION. All the financial
data including, without limitation, the statements of cash flow and income and
operating expense, that have been delivered by or on behalf of Borrower and/or
Guarantor to Lender in respect of the Property (i) are true, complete and
correct in all material respects, (ii) fairly 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 accounting firm, have been
prepared in accordance with GAAP throughout the periods covered, except as
disclosed therein. Other than the Bloomberg Lease, 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 likely to have a Material Adverse Effect on the
operation of the Property as a Class A office building. Since the date of such
financial statements, there has been no event that would have a Material Adverse
Effect on the financial condition, operations or business of Borrower from that
set forth in said financial statements.

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

                           4.1.14   FEDERAL RESERVE REGULATIONS. None of the
proceeds of the Loan will be used for the purpose of purchasing or carrying any
"margin stock" as defined in Regulation U, Regulation X or Regulation T or for
the purpose of reducing or retiring any Indebtedness which was originally
incurred to purchase or carry "margin stock" or for any other purpose which
might constitute this transaction a "purpose credit"
<PAGE>

within the meaning of Regulation U or Regulation X. As of the Closing Date,
Borrower does not own any "margin stock."

                           4.1.15   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. All utilities necessary to the existing use of the Property are
located either in the public right-of-way abutting the Property (which are
connected so as to serve the Property without passing over other property) or in
recorded easements serving the Property and such easements are set forth in and
insured by the Title Policy. All roads necessary for the use of the Property for
its current purposes have been completed and, if necessary, dedicated to public
use.

                           4.1.16   NOT A FOREIGN PERSON. Borrower is not a
foreign person within the meaning of Section 1445(f)(3) of the Code.

                           4.1.17   SEPARATE LOTS. The Property is comprised of
one (1) or more parcels which constitute a separate tax lot or lots and does not
constitute or include a portion of any other tax lot not a part of the Property.

                           4.1.18   ASSESSMENTS. To the best of Borrower's
knowledge, there are (i) no pending or proposed special or other assessments for
public improvements or otherwise affecting the Property and (ii) no contemplated
improvements to the Property that may result in such special or other
assessments.

                           4.1.19   ENFORCEABILITY. The Loan Documents are not
subject to any existing 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 thereunder, render the
Loan Documents, as a whole, unenforceable, and Borrower has not asserted any
right of rescission, set-off, counterclaim or defense with respect thereto,
subject to applicable bankruptcy, insolvency or similar laws generally affecting
the enforcement of creditors' rights and to general principles of equity.

                           4.1.20   NO PRIOR ASSIGNMENT. There are no prior
sales, transfers or assignments of the Bloomberg Lease or any portion of the
Rents due and payable or to become due and payable, in each case which are
presently outstanding following the funding of the Loan, other than those being
terminated or assigned to Lender concurrently herewith.

                           4.1.21   INSURANCE. Borrower has not, and to the best
of Borrower's knowledge no Person has, done by act or omission which would
impair the coverage of any insurance policy covering the property.

                           4.1.22   USE OF PROPERTY. The Condominium Unit is to
be used exclusively for Class-A office and other appurtenant and related uses.

                           4.1.23   CERTIFICATE OF OCCUPANCY; LICENSES. All
certifications, permits, licenses and approvals, including without limitation,
certificates of completion
<PAGE>

and temporary occupancy permits for the core and shell of the Building required
of Borrower for the contemplated legal use, occupancy and operation of the
Condominium Unit as a Class A office building (collectively, the LICENSES), have
been obtained and are in full force and effect except to the extent the failure
to so maintain such item could not result in a Material Adverse Effect. Borrower
shall keep and maintain, or shall cause to be kept and maintained, all Licenses
necessary for the operation of the Property as a Class A office building. The
use being made of the Condominium Unit is in conformity with the certificate of
occupancy issued for the Condominium Unit.

                           4.1.24   FLOOD ZONE. None of the Improvements
(including any recreational areas) on the Property are located in an area as
identified by the Federal Emergency Management Agency as an area having special
flood hazards.

                           4.1.25   PHYSICAL CONDITION. To the best of
Borrower's knowledge and except as expressly 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; to the best of Borrower's knowledge and except as
disclosed in the Physical Conditions Report, there exists no structural or other
material defects or damages in or to the Property, whether latent or otherwise,
and Borrower has not received any written 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.

                           4.1.26   BOUNDARIES. To the best of Borrower's
knowledge and in reliance on the Survey, all of the Improvements 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 upon the Property encroach upon any of the
Improvements, so as to materially affect the value or marketability of the
Property except those which are insured against by the Title Policy.

                           4.1.27   BLOOMBERG LEASE. The Property is not subject
to any Leases other than the Bloomberg Lease. No Person has any possessory
interest in the Property or right to occupy the same except under and pursuant
to the provisions of the Bloomberg Lease. The Bloomberg Lease is in full force
and effect and to Borrower's knowledge, there are no material defaults
thereunder by either party and there are no conditions that, with the passage of
time or the giving of notice, or both, would constitute material defaults
thereunder. No Rent under the Bloomberg Lease has been paid more than one (1)
month in advance of its due date. There has been no prior sale, transfer or
assignment, hypothecation or pledge by Borrower of any Lease or of the Rents
received therein, which will be outstanding following the funding of the Loan,
other than those being assigned to Lender concurrently herewith. Other than as
set forth in Section 40.1 of the Bloomberg Lease, Bloomberg does not have a
right or option pursuant to the
<PAGE>

Bloomberg Lease or otherwise to purchase all or any part of the property of
which the leased premises are a part.

                           4.1.28   FILING AND RECORDING TAXES. All transfer
taxes, recording fees, deed stamps, intangible taxes or other amounts in the
nature of transfer taxes required to be paid by any Person under applicable
Legal Requirements currently in effect in connection with the transfer of the
Property to Borrower and the granting and recording of the Security Instrument
and the UCCs have been paid. All mortgage, mortgage recording, stamp, intangible
or other similar tax required to be paid by any Person under applicable Legal
Requirements currently in effect in connection with the execution, delivery,
recordation, filing, registration, perfection or enforcement of any of the Loan
Documents, including, without limitation, the Security Instrument, have been
paid or will be paid by Borrower simultaneously with the recording of the
Security Instrument, and, under current Legal Requirements, the Security
Instrument is enforceable against Borrower in accordance with its terms by
Lender (or any subsequent holder thereof), subject to applicable bankruptcy,
insolvency or similar laws generally affecting the enforcement of creditors'
rights and to general principles of equity.

                           4.1.29   SINGLE PURPOSE ENTITY/SEPARATENESS.

                           (a)      Until the Indebtedness has been paid in
         full, Borrower hereby represents, warrants and covenants that Borrower
         and each SPE Entity is, shall be, and shall continue to be, a Single
         Purpose Entity.

                           (b)      All of the assumptions made in the
         Non-Consolidation Opinion, including, but not limited to, any exhibits
         attached thereto, are true and correct in all respects and any
         assumptions made in any subsequent non-consolidation opinion delivered
         in connection with the Loan Documents (an ADDITIONAL NON-CONSOLIDATION
         OPINION), including, but not limited to, any exhibits attached thereto,
         will have been and shall be true and correct in all respects. Borrower
         and each SPE Entity have complied and will comply with all of the
         assumptions made with respect to it in the Non-Consolidation Opinion.
         Borrower and each SPE Entity will have complied and will comply with
         all of the assumptions made with respect to it in any Additional
         Non-Consolidation Opinion. Each entity other than Borrower with respect
         to which an assumption shall be made in any Additional
         Non-Consolidation Opinion will have complied and will comply with all
         of the assumptions made with respect to it in any Additional
         Non-Consolidation Opinion.

                           4.1.30   MANAGEMENT AGREEMENT. The Management
Agreement is in full force and effect and there is no default thereunder by any
party thereto and no event has occurred that, with the passage of time and/or
the giving of notice would constitute a default thereunder. The Manager is an
Affiliate of Borrower.

                           4.1.31   ILLEGAL ACTIVITY. No portion of the Property
has been or will be purchased with proceeds of any illegal activity.
<PAGE>

                           4.1.32   NO CHANGE IN FACTS OR CIRCUMSTANCES;
DISCLOSURE. All written information, reports, certificates and other documents
submitted by Borrower to Lender in connection with the Loan are, to the best of
Borrower's knowledge, accurate, complete and correct in all material respects.
Except with respect to such representations and warranties contained in this
Agreement or in any other Loan Document which are qualified as being made to the
best of Borrower's knowledge, to Borrower's knowledge or words of similar
import, all representations and warranties made by Borrower in this Agreement or
in any other Loan Document, are accurate, complete and correct in all material
respects. There has been no material adverse change known to Borrower in any
condition, fact, circumstance or event that would make any such information
inaccurate, incomplete or otherwise misleading in any material respect or that
otherwise materially and adversely affects the Property or the business
operations or the financial condition of Borrower.

                           4.1.33   TAX FILINGS. Borrower has filed (or has
obtained effective extensions for filing) all federal, state and local tax
returns required to be filed, if any and has paid or made adequate provision for
the payment of all federal, state and local taxes, charges and assessments
payable by Borrower.

                           4.1.34   SOLVENCY/FRAUDULENT CONVEYANCE. Borrower (a)
has not entered into the transaction contemplated by this Agreement 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. After giving effect to the Loan, the fair saleable
value of Borrower's assets exceeds and will, immediately following the making of
the Loan, exceed Borrower's total liabilities, including, without limitation,
subordinated, unliquidated, disputed and contingent liabilities. The fair
saleable value of Borrower's assets is and will, immediately following the
making of the Loan, be greater than Borrower's probable liabilities, including
the maximum amount of its contingent liabilities on its Debts as such Debts
become absolute and matured, Borrower's assets do not and, immediately following
the making of the Loan 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 Debt and liabilities
(including contingent liabilities and other commitments) beyond its ability to
pay such Debt and liabilities as they mature (taking into account the timing and
amounts of cash to be received by Borrower and the amounts to be payable on or
in respect of obligations of Borrower).

                           4.1.35   INVESTMENT COMPANY ACT. Borrower is not (a)
an investment company or a company Controlled by an investment company, within
the meaning of the Investment Company Act of 1940, as amended; (b) 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 mean of the Public Utility
Holding Company Act of 1935, as amended; or (c) subject to any other federal or
state law or regulation which purports to restrict or regulate its ability to
borrow money.

                           4.1.36   LABOR. No organized work stoppage or labor
strike is pending or, to the best of Borrower's knowledge, threatened by
employees and other
<PAGE>

laborers at the Property. Borrower (i) is not involved in or, to the best of
Borrower's knowledge, threatened with any labor dispute, grievance or litigation
relating to labor matters involving any employees and other laborers at the
Property, including, without limitation, violation of any federal, state or
local labor, safety or employment laws (domestic or foreign) and/or charges of
unfair labor practices or discrimination complaints; (ii) has not engaged in any
unfair labor practices within the meaning of the National Labor Relations Act or
the Railway Labor Act; and (iii) is not a party to, nor bound by, any collective
bargaining agreement or union contract with respect to employees and other
laborers at the Property and no such agreement or contract is currently being
negotiated by the Borrower or any of its Affiliates.

                           4.1.37   BROKERS. Neither Lender nor Borrower has
dealt with any broker or finder with respect to the transactions contemplated by
the Loan Documents and neither Lender nor Borrower has done any acts, had any
negotiations or conversations, or made any agreements or promises which will in
any way create or give rise to any obligation or liability for the payment by
either party of any brokerage fee, charge, commission or other compensation to
any Person with respect to the transactions contemplated by the Loan Documents.
Borrower and Lender shall each indemnify and hold harmless the other from and
against any loss, liability, cost or expense, including any judgments,
attorneys' fees, or costs of appeal, incurred by the other party and arising out
of or relating to any breach or default by the indemnifying party of its
representations, warranties and/or agreements set forth in this Section 4.1.37.
The provisions of this Section 4.1.37 shall survive the expiration and
termination of this Agreement and the payment of the Indebtedness.

                           4.1.38   NO OTHER DEBT. Borrower has not borrowed or
received debt financing that has not been heretofore repaid in full, other than
Permitted Debt.

                           4.1.39   TAXPAYER IDENTIFICATION NUMBER. The federal
taxpayer identification number of Borrower is 06-1716800. The federal taxpayer
identification number of 731 Office One LLC is 11-3712031.

                           4.1.40   COMPLIANCE WITH ANTI-TERRORISM, EMBARGO AND
ANTI-MONEY LAUNDERING LAWS. (i) None of Borrower, Guarantor or any Person who
Controls Borrower, or Guarantor currently is identified on the OFAC List or
otherwise qualifies as a Prohibited Person, and Borrower has implemented
procedures to ensure that no Person who now or hereafter owns any direct equity
interest in Borrower is a Prohibited Person or Controlled by a Prohibited
Person, and (ii) none of Borrower or Guarantor is in violation of any Legal
Requirements relating to anti-money laundering or anti-terrorism, including,
without limitation, Legal Requirements related to transacting business with
Prohibited Persons or the requirements of the Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act
of 2001, U.S. Public Law 107-56, and the related regulations issued thereunder,
including temporary regulations, all as amended from time to time. To the best
of Borrower's knowledge, no tenant at the Condominium Unit is currently is
identified on the OFAC List or otherwise qualifies as a Prohibited Person, and
no tenant at the Condominium Unit is owned or Controlled by a Prohibited Person.
Borrower has
<PAGE>

determined that Manager has implemented procedures, approved by Borrower to
ensure that no tenant at the Condominium Unit is a Prohibited Person or owned or
Controlled by a Prohibited Person.

                           4.1.41   OFFICE OF FOREIGN ASSET CONTROL. Neither
Borrower nor Guarantor shall (a) b e or become subject at any time to any law,
regulation, or list of any government agency (including, without limitation, the
U.S. Office of Foreign Asset Control list) that prohibits or limits any Lender
from making any advance or extension of credit to Borrower or from otherwise
conducting business with Borrower and the Guarantor, or (b) fail to provide
documentary and other evidence of Borrower's identity as may be requested by any
Lender at any time to enable any Lender to verify Borrower's identity or to
comply with any applicable law or regulation, including, without limitation,
Section 326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318 (the PATRIOT
ACT). In addition, Borrower hereby agrees to provide to Lender with any
additional information that Lender deems necessary from time to time in order to
ensure compliance with all applicable Laws concerning money laundering and
similar activities.

                           4.1.42   BLOOMBERG LEASE. Borrower represents that it
has heretofore delivered to Lender true and complete copies of the Bloomberg
Lease and any and all amendments or modifications thereof. No events or
circumstances exist which with or without the giving of notice, the passage of
time or both, may constitute a default on the part of Borrower under the
Bloomberg Lease. Except as set forth on attached SCHEDULE III, Borrower or its
predecessors have complied with and performed all of its or their material
construction, improvement and alteration obligations with respect to the
Property required under the Bloomberg Lease and any other obligations under the
Bloomberg Lease that are required as of the date hereof have either been
complied with or the failure to comply with the same does not and will not have
a Material Adverse Effect. Borrower does not owe any brokerage, leasing or other
commissions to any Person in connection with the Property (as such term is
defined in the Condominium Documents). Borrower represents that the Upper Option
Space (as defined in the Bloomberg Lease) consists solely of Office Unit 2.

                           4.1.43   CONDOMINIUM DECLARATION AND BY-LAWS.
Borrower represents that it has heretofore delivered to Lender true and complete
copies of the Condominium Declaration and the By-Laws and any and all amendments
or modifications thereof. The Condominium Declaration and the By-Laws are in
full force and effect and neither Borrower nor, to Borrower's knowledge, any
other party to the Condominium Declaration and the By-Laws, is in default
thereunder, and to the best of Borrower's knowledge, there are no conditions
which, with the passage of time or the giving of notice, or both, would
constitute a default thereunder. The Condominium Declaration and the By-Laws
have not been modified, amended or supplemented. The Condominium Board consists
of five (5) members. As of the date hereof, the members are as follows: Joseph
Macnow, David Greenbaum, Glen Weiss, Barbara Wattenbach and Thomas Dunlap, the
first two (2) of which were appointed by Borrower and are employees of VRT.
<PAGE>

                           4.1.44   CONSTRUCTION MILESTONES. The construction of
the Condominium Unit has reached and satisfied the Second Construction Milestone
Stage, the Third Construction Milestone Stage and the Fourth Construction
Milestone Stage, respectively (as such terms are defined in the Bloomberg
Lease). Subject to the terms of Section 10.1 and Section 11.1 of the Bloomberg
Lease, neither Borrower nor Bloomberg has any current or future right pursuant
to Section 22.13 of the Bloomberg Lease or any other provision of the Bloomberg
Lease relating to the construction of the Building to terminate the Bloomberg
Lease. Bloomberg is not currently entitled (i) to an extension of the Rent
Commencement Date (as such term is defined in the Bloomberg Lease), (ii)
entitled to any amounts from Borrower due to a delay in the delivery of any
space to be delivered under the Bloomberg Lease or (iii) entitled to an
abatement of Rents or credit pursuant to Article 22 of the Bloomberg Lease.
Except as set forth on attached SCHEDULE III, all conditions precedent under the
Bloomberg Lease for the commencement of the final Rent Commencement Date to
occur no later than November 9, 2004 for all the premises to be delivered to
Bloomberg, have occurred and Bloomberg is not entitled to any rent abatements or
other payments from Borrower. To the best of Borrower's knowledge (after due
inquiry), the aggregate amount to complete all construction related obligations
of Borrower under the Bloomberg Lease pursuant to Article 22 thereof equals
approximately $550,000.00, all as more particularly set forth on attached
SCHEDULE III. Bloomberg has received all credits it is entitled to under Section
22.2(C) of the Bloomberg Lease and is not entitled now or the future any other
sums under such section.

                  SECTION  4.2      SURVIVAL OF REPRESENTATIONS. Borrower agrees
that all of the representations and warranties of Borrower set forth in Section
4.1 and elsewhere in this Agreement and in the other Loan Documents shall be
deemed given and made as of the date of the funding of the Loan and survive for
so long as any amount remains owing to Lender under this Agreement or any of the
other Loan Documents by Borrower or Guarantor unless a longer survival period is
expressly stated in a Loan Document with respect to a specific representation or
warranty, in which case, for such longer period. All representations,
warranties, covenants and agreements made in this Agreement or in the other Loan
Documents by Borrower shall be deemed to have been relied upon by Lender
notwithstanding any investigation heretofore or hereafter made by Lender or on
its behalf.

                  V.       BORROWER COVENANTS

                  SECTION  5.1      AFFIRMATIVE COVENANTS.

                  From the Closing Date and until payment and performance in
full of all obligations of Borrower under the Loan Documents, Borrower hereby
covenants and agrees with Lender that:

                           5.1.1    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, or applicable to,
Borrower and shall not enter into or otherwise suffer or permit any amendment,
waiver, supplement, termination or other modification of any Loan Document
(other than any amendment, waiver,
<PAGE>

supplement, termination or other modification of any Loan Document to which
Lender must be a signatory) executed and delivered by, or applicable to,
Borrower without the prior written consent of Lender.

                           5.1.2    EXISTENCE; COMPLIANCE WITH LEGAL
REQUIREMENTS; INSURANCE. Subject to Borrower's right of contest pursuant to
Section 7.3, Borrower shall at all times comply in all material respects and
cause the Property to comply in all material respects with all Legal
Requirements applicable to the Borrower, any SPE Entity and the Property and the
uses permitted upon the Property. 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 necessary to comply in all
material respects with all Legal Requirements applicable to it and the Property.
There shall never be committed by Borrower, and Borrower shall not knowingly
permit any other Person in occupancy of or involved with the operation or use of
the Property to commit, any act or omission affording the federal government or
any state or local government the right of forfeiture as against the Property or
any part thereof or any monies paid in performance of Borrower's obligations
under any of the Loan Documents. Borrower hereby covenants and agrees not to
commit, permit or suffer to exist any act or omission affording such right of
forfeiture. Borrower shall at all times maintain, preserve and protect all
franchises and trade names and preserve all the remainder of its property used
in the conduct of its business and shall keep (or cause Bloomberg to keep) the
Property in good working order and repair, and from time to time make, or cause
to be made, all reasonably necessary repairs, renewals, replacements,
betterments and improvements thereto, all as more fully set forth in the
Security Instrument. Borrower shall keep or cause Bloomberg to keep the Property
insured at all times to such extent and against such risks, and maintain
liability and such other insurance, as is more fully set forth in this
Agreement.

                           5.1.3    LITIGATION. Borrower shall give prompt
written notice to Lender of any litigation or governmental proceedings pending
or threatened in writing against Borrower which, if determined adversely to
Borrower, would have a Material Adverse Effect.

                           5.1.4    SINGLE PURPOSE ENTITY.

                           (a)      Each of Borrower and each SPE Entity are,
         and from and after the date hereof shall remain, Single Purpose
         Entities.

                           (b)      Other than distributions from Borrower to
         Guarantor from Excess Cash Flow to Guarantor or from Guarantor to its
         members, none of the funds or assets of Borrower or any SPE Entity will
         be diverted to any other Person or for other than business uses of
         Borrower or any SPE Entity, as applicable, nor will such funds or
         assets be commingled with the funds or assets of any other Affiliate.

                           (c)      To the extent that Borrower or any SPE
         Entity shares the same officers or other employees as any of Borrower,
         any SPE Entity or Affiliates,
<PAGE>

         the salaries of and the expenses related to providing benefits to such
         officers and other employees shall be fairly allocated among such
         entities, and each such entity shall bear its fair share of the salary
         and benefit costs associated with all such common officers and
         employees.

                           (d)      To the extent that Borrower or any SPE
         Entity jointly contracts with any of Borrower, any SPE Entity or either
         of their Affiliates, as applicable, to do business with vendors or
         service providers or to share overhead expenses, the costs incurred in
         so doing shall be allocated fairly among such entities, and each such
         entity shall bear its fair share of such costs. To the extent that
         either Borrower or any SPE Entity contracts or does business with
         vendors or service providers where the goods and services provided are
         partially for the benefit of any other Person, the costs incurred in so
         doing shall be fairly allocated to or among such entities for whose
         benefit the goods and services are provided, and each such entity shall
         bear its fair share of such costs. All material transactions between
         Borrower or each SPE Entity and any of their respective Affiliates
         shall be conducted on substantially the same terms (or on more
         favorable terms for Borrower or any SPE Entity, as applicable) as would
         be conducted with third parties.

                           (e)      To the extent that Borrower, any SPE Entity
         or any of their Affiliates have offices in the same location, there
         shall be a fair and appropriate allocation of overhead costs among
         them, and each such entity shall bear its fair share of such expenses.

                           (f)      Borrower and each SPE Entity shall conduct
         its affairs strictly in accordance with its organizational documents,
         and observe all necessary, appropriate and customary corporate, limited
         liability company or partnership formalities, as applicable, including,
         but not limited to, obtaining any and all members' consents necessary
         to authorize actions taken or to be taken, and maintaining accurate and
         separate books, records and accounts, including, without limitation,
         payroll and intercompany transaction accounts.

                           (g)      In addition, Borrower and each SPE Entity
         shall each: (a) maintain books and records separate from those of any
         other Person; (b) maintain its assets in such a manner that it is not
         more costly or difficult to segregate, identify or ascertain such
         assets; (c) hold regular meetings of its board of directors,
         shareholders, partners or members, as the case may be, and observe all
         other corporate, partnership or limited liability company, as the case
         may be, formalities; (d) hold itself out to creditors and the public as
         a legal entity separate and distinct from any other entity; (e) prepare
         separate tax returns and financial statements, or if part of a
         consolidated group, then it will be shown as a separate member of such
         group; (f) transact all business with Affiliates on an arm's-length
         basis and pursuant to enforceable agreements; (g) conduct business in
         its name and use separate stationery, invoices and checks; (h) not
         commingle its assets or funds with those of any other Person; and (i)
         not assume, guarantee or pay the debts or
<PAGE>

         obligations of any other Person, except that Guarantor and/or Guarantor
         shall enter into the Recourse Guaranty and Environmental Indemnity.

                           5.1.5    CONSENTS. If Borrower or any SPE Entity is a
corporation, the board of directors of such Person may not take any action
requiring the affirmative vote of 100% of the members of the board of directors
unless all of the directors, including the Independent Directors, shall have
participated in such vote. If Borrower or any SPE Entity is a limited liability
company, (a) if such Person is managed by a board of managers as to actions
concerning Bankruptcy Actions, the board of managers of such Person may not take
any action requiring the affirmative vote of 100% of the members of the board of
managers unless all of the managers, including the Independent Managers, shall
have participated in such vote, (b) if such Person is not managed by a board of
managers as to actions concerning Bankruptcy Actions, the members of such Person
may not take any action requiring the affirmative vote of 100% of the members of
such Person unless all of the members, including the Independent Members, shall
have participated in such vote. An affirmative vote of 100% of the directors,
board of managers or members, as applicable, of Borrower and any SPE Entity
shall be required for any Bankruptcy Action against Borrower or any SPE Entity.
Furthermore, Borrower's and each SPE Entity's formation documents shall
expressly state that for so long as the Loan is outstanding, none of Borrower
nor any SPE Entity shall be permitted to (i) dissolve, liquidate, consolidate,
merge or sell all or substantially all of Borrower's or any SPE Entity's assets
other than in connection with the repayment of the Loan or (ii) engage in any
other business activity and such restrictions shall not be modified or violated
for so long as the Loan is outstanding.

                           5.1.6    ACCESS TO PROPERTY. Borrower shall permit
agents, representatives and employees of Lender and the Rating Agencies to
inspect the Property or any part thereof during normal business hours on
Business Days, upon reasonable advance notice and subject to any limitations or
restrictions in the Bloomberg Lease and accompanied by a representative of
Borrower.

                           5.1.7    NOTICES OF CERTAIN OCCURRENCES. Borrower
shall provide Lender written notice (a) promptly of any event or condition of
which Borrower has knowledge that has or is likely to have a Material Adverse
Effect, (b) promptly of the occurrence of any Event of Default of which Borrower
has knowledge, (c) within three (3) Business Days of any Casualty Event, (d)
within three (3) Business Days of any failure of Bloomberg to pay any operating
expenses required to be paid by Bloomberg under the Bloomberg Lease (including,
without limitation, taxes, insurance premiums, capital expenditures and without
duplication, Operating Expenses), (e) within one Business Day of any Casualty
Rent Restoration Date (together with an Officer's Certificate and supporting
documentation acceptable to Lender in its sole but reasonable discretion
demonstrating that the Casualty Rent Restoration Date has occurred) and (f)
within one Business Day of any delay in the occurrence of any Rent Commencement
Date.

                           5.1.8    COOPERATE IN LEGAL PROCEEDINGS. Borrower
shall cooperate fully with Lender with respect to any proceedings before any
court, board or other Governmental Authority which could reasonably be expected
to affect in any way
<PAGE>

affect the rights of Lender hereunder or under any of the other Loan Documents
and, in connection therewith, permit Lender, at its election but subject to the
same restrictions set forth in Section 19.12 hereof (regarding the commencement
of a separate action to settle such proceedings by Lender), to participate in
any such proceedings which may have a Material Adverse Effect.

                           5.1.9    PERFORM LOAN DOCUMENTS. Borrower shall
observe, perform and satisfy all the terms, provisions, covenants and conditions
of, and shall pay when due all costs, fees and expenses to the extent required,
under the Loan Documents executed and delivered by, or applicable to, Borrower.

                           5.1.10   INSURANCE.

                           (a)      Borrower shall cooperate with Lender in
         obtaining for Lender the benefits of any Proceeds lawfully or equitably
         payable in connection with the Property in accordance with the Loan
         Documents, and subject to the terms of the Bloomberg Lease and the
         Bloomberg SNDA and the Condominium Documents, and Lender shall be
         reimbursed for any reasonable out of pocket expenses incurred in
         connection therewith (including reasonable attorneys' fees and
         disbursements) out of such Proceeds.

                           (b)      Borrower shall comply with all Insurance
         Requirements and shall not bring or keep or permit to be brought or
         kept any article upon any of the Property or cause or permit any
         condition to exist thereon which would be prohibited by any Insurance
         Requirement, or would invalidate insurance coverage required hereunder
         to be maintained by Borrower on or with respect to any part of the
         Property pursuant to Section 6.1.

                           5.1.11   FURTHER ASSURANCES; SEPARATE NOTES; LOAN
RESIZING.

                           (a)      Borrower shall execute and acknowledge (or
         cause to be executed and acknowledged) and deliver to Lender all
         documents, and take all actions, reasonably required by Lender from
         time to time to confirm the rights created or now or hereafter intended
         to be created under this Agreement and the other Loan Documents and any
         security interest created or purported to be created thereunder, to
         protect and further the validity, priority and enforceability of this
         Agreement and the other Loan Documents, to subject to the Loan
         Documents any property of Borrower intended by the terms of any one or
         more of the Loan Documents to be encumbered by the Loan Documents, or
         otherwise carry out the purposes of the Loan Documents and the
         transactions contemplated thereunder provided that the foregoing shall
         not impose any additional material liability or obligation on, nor
         materially reduce the rights of Borrower. Borrower agrees that it
         shall, upon request, reasonably cooperate with Lender in connection
         with any request by Lender to sever the Note into two (2) or more
         separate substitute notes in an aggregate principal amount equal to the
         Principal Amount and to reapportion the Loan among such separate
         substitute notes, including, without limitation, by executing and
         delivering to Lender new substitute notes to replace
<PAGE>

         the Note, amendments to or replacements of existing Loan Documents to
         reflect such severance and/or Opinions of Counsel with respect to such
         substitute notes, amendments and/or replacements, provided that
         Borrower shall not be responsible for fees for any such
         fractionalization that are incurred following the Closing Date other
         than administrative costs and expenses of the Borrower. Subject to the
         foregoing sentence, Lender shall reimburse Borrower for its reasonable
         out-of-pocket fees, costs and expenses actually incurred in connection
         with such resizing. Any such substitute notes may as among themselves
         be pari passu, senior and subordinate and/or otherwise have varying
         principal amounts and economic terms, provided, however, that (i) the
         initial weighted average Applicable Interest Rate for the term of the
         Notes shall not exceed the Applicable Interest Rate under the Note
         immediately prior to the issuance of Notes; and (ii) subject to the
         effect of any prepayments of such notes after an Event of Default, the
         economics of the Loan (or severed portions thereof) and other terms of
         the Loan, taken as a whole, shall not be modified by such
         fractionalization in a manner which is in any material respect adverse
         to Borrower (except any increase in the weighted average interest rate
         of the Notes that may result after certain prepayments of the Loan have
         been made in accordance with the terms hereof). Upon the occurrence and
         during the continuance of an Event of Default, Lender may apply payment
         of all sums due Notes in such order and priority as Lender shall elect
         in its sole and absolute discretion.

                           (b)      Borrower and Lender agree that Lender may,
         at any time, elect to reduce the mortgage debt on the Property and
         re-size the principal amount of the Loan and allocate the reduced
         portion to a mezzanine loan (a MEZZANINE LOAN). In connection with the
         foregoing, at Lender's sole cost and expense, Borrower agrees, subject
         to the provisions of this Section 5.1.11(b) to (i) create a new single
         purpose entity which will become the mezzanine borrower (a MEZZANINE
         BORROWER), and cause the Mezzanine Borrower and any members in
         Mezzanine Borrower to enter into the documents reasonably deemed
         necessary by Lender to evidence the Mezzanine Loan, including, without
         limitation, a promissory note and a mezzanine loan agreement
         (collectively, the MEZZANINE LOAN DOCUMENTS), which Mezzanine Loan
         Documents shall be subject to the review and approval of Borrower, not
         to be unreasonably withheld or delayed, (ii) cause Mezzanine Borrower
         to pledge the equity interests in the Borrower, (iii) execute and
         deliver such documents and other agreements reasonably required by
         Lender to reduce the amount of the mortgage debt encumbering the
         Property, including, without limitation, an amendment to the Note and
         the other Loan Documents, an endorsement to the Title Policy reflecting
         a change in the insured amount thereunder, legal opinions and other
         customary loan documentation, provided, that, cumulatively, the
         Mezzanine Loan Documents and the amendment to the Loan Documents and
         any other actions taken pursuant to this Section 5.1.11(b) will not (x)
         increase in any material respect the obligations or exposure, or
         decrease the rights, of the Mezzanine Borrower and Borrower under the
         Loan Documents and the Mezzanine Loan Documents, other than to a de
         minimis extent or (y) change the economic or other material terms of
         the Loan (taken as a whole with the Mezzanine Loan). Lender agrees to
         reimburse Borrower for all
<PAGE>

         out of pocket costs and expenses (including, without limitation,
         reasonable attorneys' fees and expenses) actually incurred by Borrower
         in connection with any of the undertakings contemplated by this Section
         5.1.11(b).

                           (c)      In addition, Borrower shall, at Borrower's
         sole cost and expense:

                                    (i)      furnish to Lender, to the extent
                  not otherwise already furnished to Lender and reasonably
                  acceptable to Lender, all instruments, documents, boundary
                  surveys, footing or foundation surveys, certificates, plans
                  and specifications, appraisals, title and other insurance
                  reports and agreements, and each and every other document,
                  certificate, agreement and instrument required to be furnished
                  by Borrower pursuant to the terms of the Loan Documents to the
                  extent reasonably requested by Lender and in Borrower's or
                  it's Affiliate's possession;

                                    (ii)     execute and deliver, from time to
                  time, such further instruments as may be reasonably requested
                  by Lender to confirm the lien of the Security Instrument on
                  any Building Equipment, Operating Asset or any Intangible;

                           (d)      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.

                           5.1.12   MORTGAGE TAXES. Borrower shall pay all
taxes, charges, filing, registration and recording fees, excises and levies
payable with respect to the Note or the Liens created or secured by the Loan
Documents, other than income, franchise and doing business taxes imposed on
Lender.

                           5.1.13   OPERATION. Borrower shall, and, shall cause
Manager to, (i) promptly perform and/or observe in all material respects all of
the covenants and agreements required to be performed and observed by it under
the Management Agreement and do all things necessary to preserve and to keep
unimpaired its material rights thereunder; (ii) promptly notify Lender of any
"event of default" under the Management Agreement of which it has notice; (iii)
promptly deliver to Lender a copy of each financial statement, capital
expenditures plan, property improvement plan and any other notice, report and
estimate received by it under the Management Agreement that has been utilized by
Manager or Borrower, as applicable, to prepare the financial statements required
to be delivered by Borrower pursuant to Article XI; (iv) deliver to Lender the
Annual Budget for the then-current fiscal year, which Annual Budget shall be
reasonably acceptable to Lender and shall be certified by an Officer's
Certificate; and (v) enforce in a commercially reasonable manner the performance
and observance of all of the covenants and agreements required to be performed
and/or observed by the Manager under the Management Agreement.

<PAGE>

                           5.1.14   BUSINESS AND OPERATIONS. Borrower will
continue to engage in the businesses presently conducted by it as and to the
extent the same are necessary for its ownership of the Property and the
maintenance, management and operation of the Property as currently conducted by
Borrower. Borrower will qualify to do business and will remain in good standing
under the laws of the State as and to the extent the same are required for its
ownership of the Property and the maintenance, management and operation of the
Property as currently conducted by Borrower.

                           5.1.15   TITLE TO THE PROPERTY. Borrower will warrant
and defend (a) the title to the Property and every part thereof, subject only to
Liens permitted hereunder (including Permitted Encumbrances) and (b) the
validity and priority of the Lien of the Security Instrument, the Assignment of
Leases and this Agreement on the Property, subject only to Liens permitted
hereunder (including Permitted Encumbrances), in each case against the claims of
all Persons whomsoever. Borrower shall reimburse Lender for any actual out of
pocket losses, costs, damages or expenses (including reasonable attorneys' fees
and court costs) incurred by Lender if an interest in the Property, other than
as permitted hereunder, is claimed by another Person.

                           5.1.16   COSTS OF ENFORCEMENT. In the event (a) that
this Agreement or the Security Instrument is foreclosed in whole or in part or
that this Agreement or the Security Instrument is put into the hands of an
attorney for collection, suit, action or foreclosure, (b) of the foreclosure of
any security agreement prior to or subsequent to this Agreement in which
proceeding Lender is made a party, or a mortgage prior to or subsequent to the
Security Instrument in which proceeding Lender is made a party, or (c) of the
bankruptcy, insolvency, rehabilitation or other similar proceeding in respect of
Borrower or any of its constituent Persons or an assignment by Borrower or any
of its constituent Persons for the benefit of its creditors, Borrower, its
successors or assigns, shall be chargeable with and agrees to pay all reasonable
costs of collection and defense, including reasonable attorneys' fees and costs,
incurred by Lender or Borrower in connection therewith and in connection with
any appellate proceeding or post-judgment action involved therein, together with
all required service or use taxes.

                           5.1.17   ESTOPPEL STATEMENT.

                           (a)      Borrower shall, from time to time at the
         reasonable request of Lender, upon thirty (30) days' prior written
         request from Lender, execute, acknowledge and deliver to the Lender, an
         Officer's Certificate, stating that this Agreement and the other Loan
         Documents are unmodified and in full force and effect (or, if there
         have been modifications, that this Agreement and the other Loan
         Documents are in full force and effect as modified and setting forth
         such modifications), stating the amount of accrued and unpaid interest
         and the outstanding principal amount of the Note and containing such
         other information with respect to the Borrower, the Property and the
         Loan as Lender shall reasonably request. The estoppel certificate shall
         also state either that, to the best of Borrower's knowledge, no Event
         of Default exists hereunder or, if any Event of Default shall exist
         hereunder, specify such Event of Default and the steps being taken to
         cure such Event of Default.

<PAGE>

                           (b)      Borrower shall use all commercially
         reasonable efforts to deliver to Lender upon Lender's reasonable
         request within twenty (20) Business Days of Lender's request an
         estoppel certificate from Bloomberg as required under Section 7.3 of
         the Bloomberg Lease.

                           5.1.18   LOAN PROCEEDS. Borrower shall use the
proceeds of the Loan received by it on the Closing Date only for the purposes
set forth in Section 2.1.4.

                           5.1.19   NO JOINT ASSESSMENT. Borrower shall not
suffer, permit or initiate the joint assessment of the Property (a) with any
other real property constituting a tax lot separate from the Property, and (b)
which constitutes real property 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 such real property portion of the Property and
shall make commercially reasonable efforts to prevent Bloomberg from doing the
same.

                           5.1.20   NO FURTHER ENCUMBRANCES. Borrower shall do,
or cause to be done, all things necessary to keep and protect the Property and
all portions thereof unencumbered from any Liens, easements or agreements
granting rights in or restricting the use or development of the Property, except
for (a) Permitted Encumbrances, (b) Liens created or permitted pursuant to the
Loan Documents, (c) Liens for Impositions prior to the imposition of any
interest, charges or expenses for the non-payment thereof and (d) any liens
permitted pursuant to the Bloomberg Lease and shall make commercially reasonable
efforts to prevent Bloomberg from doing the same.

                           5.1.21   EXPANSION SPACE; BLOOMBERG LEASE,
CONDOMINIUM DECLARATION AND BY-LAWS.

                           (a)      Subject to the terms of the Security
         Instrument, Lender will, at Borrower's request and cost and expense,
         reasonably cooperate with Borrower to permit Borrower to modify the
         Bloomberg Lease to exclude from the premises demised thereunder the
         Upper Option Space and/or Lower Option Space (as defined in the
         Bloomberg Lease). In connection with the foregoing, Borrower shall take
         (or shall cause to be taken) all actions reasonably requested by
         Lender.

                           (b)      Borrower will promptly after receipt thereof
                  deliver to Lender a copy of any notice received with respect
                  to the Condominium Declaration, the By-Laws and the Bloomberg
                  Lease claiming that Borrower is in default in the performance
                  or observance of any of the material terms, covenants or
                  conditions of any of the Condominium Declaration, the By-Laws
                  or the Bloomberg Lease.

                           (c)      All costs and expenses incurred by Lender
                  (including, without imitation, reasonable attorney's fees) to
                  effectuate any of the terms of this Section 5.1.21(a) and the
                  terms of Section 15 of the Security

<PAGE>

                  Instrument shall be paid promptly (or in advance if requested
                  by Lender) by the Borrower.

                           5.1.22   NOTICE OF CERTAIN OCCURRENCES. In addition
to all other notices required to be given by Borrower hereunder, Borrower shall
give notice to Lender promptly upon the occurrence of: (a) any Event of Default;
(b) any litigation or proceeding affecting Borrower or the Property or any part
thereof in which the amount involved is $3,000,000 or more and not covered by
insurance or in which injunctive or similar relief is sought and likely to be
obtained; and (c) any default beyond applicable notice and cure periods under
the Bloomberg Lease.

                           5.1.23   BEACON COURT CONDOMINIUM DECLARATION.

                           (a)      Borrower shall cause the Condominium Board
         (i) to keep the Common Elements insured (or shall maintain such
         insurance on behalf of the Condominium Board) as required pursuant to
         the Condominium Declaration, (ii) to appoint Lender as the Insurance
         Trustee (as such term is defined in the By-Laws) and (iii) to deliver
         any insurance proceeds payable to Borrower to Lender, and such
         insurance policies are hereby added to the definition of the term
         "Policies" set forth herein.

                           (b)      Borrower shall upon the reasonable request
         of Lender use commercially reasonable efforts to deliver to Lender upon
         request, an estoppel certificate from the Condominium Board in form and
         substance reasonably satisfactory to Lender.

                           (c)      Borrower shall observe and perform in all
         material respects each and every material term to be observed or
         performed by Borrower pursuant to the terms of the Condominium
         Declaration and the By-Laws.

                           (d)      Borrower shall promptly deliver to Lender a
         true and complete copy of all notices of default received by the
         Borrower with respect to any obligation or duty of Borrower under the
         Condominium Declaration or the By-Laws.

                           (e)      Borrower shall not, except with the prior
         written consent of Lender (i) institute any action or proceeding for
         partition of the Property, the Common Elements, the regime created with
         respect to the Property under the Condominium Declaration (the
         CONDOMINIUM REGIME) or the Condominium Unit, (ii) vote for or consent
         to any modification of, amendment to or relaxation in the enforcement
         of the Condominium Declaration or the By-Laws which could result in a
         Material Adverse Effect (it being further agreed in no event shall
         Borrower amend or modify any of the matters referred to in the Proxy
         without Lender's prior written consent, not to be unreasonably
         withheld, delayed or conditioned), (iii) in the event of damage to or
         destruction of the Property, the Common Elements or the Condominium
         Unit, vote in opposition to a motion to repair, restore or rebuild the
         Common Elements or the Condominium Unit, or (iv)

<PAGE>

         amend or modify any material terms or provisions of the Condominium
         Declaration or the By-Laws which could result in a Material Adverse
         Effect.

                           (f)      Borrower shall not vote to terminate the
         Condominium Declaration without the prior written consent of Lender.
         Any agreement whereby the Condominium Declaration is terminated or the
         Property is withdrawn therefrom (and a replacement Condominium
         Declaration approved by Lender is not simultaneously recorded) shall be
         deemed a sale, conveyance, alienation, mortgage, encumbrance, pledge or
         transfer prohibited under the Loan Documents and shall constitute an
         Event of Default.

                  SECTION 5.2       NEGATIVE COVENANTS.

                  From the Closing Date until payment and performance in full of
all obligations of Borrower under the Loan Documents or the earlier release of
the Lien of this Agreement or the Security Instrument in accordance with the
terms of this Agreement and the other Loan Documents, Borrower covenants and
agrees with Lender that Borrower will not do, directly or indirectly, any of the
following:

                           5.2.1    INCUR DEBT. Incur, create or assume any Debt
other than Permitted Debt or Transfer or lease all or any part of the Property
or any interest therein, except as permitted in the Loan Documents;

                           5.2.2    ENCUMBRANCES. Incur, create or assume or
permit the incurrence, creation or assumption of any Debt secured by an interest
in Borrower or any SPE Entity and shall not Transfer or permit the Transfer of
any interest in Borrower or any SPE Entity except as permitted pursuant to
Article VIII;

                           5.2.3    ENGAGE IN DIFFERENT BUSINESS. Engage,
directly or indirectly, in any business other than that of entering into this
Agreement and the other Loan Documents to which Borrower is a party and the use,
ownership, management, leasing, renovation, financing, development, operation
and maintenance of the Property and activities related thereto;

                           5.2.4    MAKE ADVANCES. Make advances or make loans
to any Person, or hold any investments, except as expressly permitted pursuant
to the terms of this Agreement or any other Loan Document;

                           5.2.5    PARTITION. Partition the Property;

                           5.2.6    COMMINGLE. Commingle its funds or assets
with those of any other Person;

                           5.2.7    GUARANTEE OBLIGATIONS. Guarantee any
obligations of any Person;
<PAGE>

                           5.2.8    TRANSFER ASSETS. Transfer any asset other
than in the ordinary course of business or Transfer any interest in the Property
except as may be permitted hereby or in the other Loan Documents;

                           5.2.9    AMEND ORGANIZATIONAL DOCUMENTS. Amend or
modify any of its organizational documents without Lender's consent, other than
in connection with any Transfer permitted pursuant to Article VIII or to reflect
any change in capital accounts, contributions, distributions, allocations or
other provisions that do not and could not reasonably be anticipated to have a
Material Adverse Effect and provided that Borrower and each SPE Entity each
remain a Single Purpose Entity;

                           5.2.10   DISSOLVE. Dissolve, wind-up, terminate,
liquidate, merge with or consolidate into another Person, except as expressly
permitted pursuant to this Agreement;

                           5.2.11   BANKRUPTCY. (i) dissolve, liquidate,
consolidate, merge or sell all or substantially all of Borrower's assets other
than in connection with the repayment of the Loan, (ii) engage in any other
business activity or (iii) engage in any Bankruptcy Action against Borrower or
any SPE Entity, without obtaining the prior consent of each of the Independent
Managers of Borrower or such SPE Entity, as the case may be;

                           5.2.12   ERISA. Engage in any activity that would
result in Borrower being an employee benefit plan, as defined in Section 3(3) of
ERISA, or the assets of Borrower constituting plan assets of one or more such
plans within the meaning of 29 C.F.R. Section 2510.3-101;

                           5.2.13   DISTRIBUTIONS. From and after the occurrence
and during the continuance of an Event of Default, make any distributions to or
for the benefit of any of its partners or members or its or their Affiliates.

                           5.2.14   MANAGER.

                           (a)      Borrower shall not, without the prior
         written consent of Lender, which consent shall be in the Lender's
         reasonable discretion (and if a Securitization shall have occurred,
         Borrower may, in Lender's sole and absolute discretion and at
         Borrower's sole cost and expense, be required to obtain a Rating Agency
         Confirmation with respect to such action): enter into, materially
         modify, change, supplement, alter or amend the Management Agreement or
         waive or release any of its right and remedies under the Management
         Agreement that could have a Material Adverse Effect or replace the
         Manager with a Person other than a Qualified Manager. Borrower agrees
         that any Management Agreement shall require the Manager to hold itself
         out in the capacity as an agent of the Borrower party to such
         Management Agreement;

                           (b)      Borrower shall notify Lender in writing (and
         shall deliver a copy of the proposed management agreement) of any
         entity proposed to be designated as a Qualified Manager of the Property
         not less than thirty (30) days
<PAGE>

         before such Qualified Manager, begins to manage the Property, and, if a
         Securitization shall have occurred, shall obtain prior to any
         appointment of a Qualified Manager a Rating Agency Confirmation, with
         respect to any proposed Qualified Manager.

                           (c)      Upon the retention of a Qualified Manager,
         Lender shall have the right to approve (which approval shall be in the
         Lender's reasonable discretion) any new management agreement with such
         Qualified Manager. If a Securitization shall have occurred upon the
         retention of a Qualified Manager, Borrower shall at its sole cost and
         expense obtain shall obtain a Rating Agency Confirmation with respect
         to any new management agreement with such Qualified Manager. Borrower
         shall cause the Manager to enter into a Manager's Consent and
         Subordination of Management Agreement and shall deliver a reasonably
         acceptable Non-Consolidation Opinion covering such Manager if such
         Person (i) is not covered by the Non-Consolidation Opinion or an
         Additional Non-Consolidation Opinion, and (ii) is an Affiliate of
         Borrower.

                           (d)      If, after Borrower shall have entered into a
         Management Agreement in accordance with the terms hereof, (a) a
         monetary Event of Default has occurred and is continuing, (b) with
         respect to any property manager that is not an Affiliate of Borrower, a
         material default (as determined by Lender in its sole and absolute
         discretion) occurs and is continuing under the terms of any Management
         Agreement or (c) the Manager shall become insolvent, Borrower shall, at
         the request of Lender, terminate the Management Agreement and replace
         the Manager with a Qualified Manager in accordance with this Section
         5.2.14 and shall deliver a reasonably acceptable Non-Consolidation
         Opinion (except such opinion shall not be acceptable if not acceptable
         to any Rating Agency in such agency's sole and absolute discretion)
         covering such replacement Manager if such Person (i) is not covered by
         the Non-Consolidation Opinion or an Additional Non-Consolidation
         Opinion, and (ii) is an Affiliate of Borrower.

                           5.2.15   BLOOMBERG LEASE. Without the prior written
consent of Lender (and if a Securitization shall have occurred, such consent
may, in Lender's sole and absolute discretion, be conditioned upon Borrower
delivering, at its sole cost and expense to Lender a Rating Agency Confirmation)
(i) send Bloomberg written notice of its election to end the term of the
Bloomberg Lease or (ii) take any action with respect to the Bloomberg Lease
contemplated under Section 8.8.1.

                           5.2.16   MODIFY ACCOUNT AGREEMENT. Without the prior
written consent of Lender, which shall not be unreasonably withheld, delayed or
conditioned, (and if a Securitization shall have occurred, a Rating Agency
Confirmation obtained by Borrower), execute any modification to the Account
Agreement;

                           5.2.17   ZONING RECLASSIFICATION. Without the prior
written consent of Lender, not to be unreasonably withheld, conditioned or
delayed, initiate or consent to (a) any zoning reclassification of any portion
of the Property, (b) seek any variance under any existing zoning ordinance that
could result in the use of the Property
<PAGE>

becoming a non-conforming use under any zoning ordinance or any other applicable
land use law, rule or regulation, or (c) allow any portion of the Property to be
used in any manner that could result in the use of the Property becoming a
non-conforming use under any zoning ordinance or any other applicable land use
law, rule or regulation;

                           5.2.18   CHANGE OF PRINCIPAL PLACE OF BUSINESS.
Change its address for notice purposes set forth on the first page of this
Agreement without first giving Lender thirty (30) days prior written notice (but
in any event, within any period required pursuant to the UCC) and there shall
have been taken such action, reasonably satisfactory to Lender, as may be
necessary to maintain fully the effect, perfection and priority of the security
interest of Lender hereunder in the Account Collateral at all times;

                           5.2.19   DEBT CANCELLATION. Cancel or otherwise
forgive or release any material claim or debt owed to it by any Person, except
for adequate consideration or in a commercially reasonable course of its
business;

                           5.2.20   MISAPPLICATION OF FUNDS. Distribute any
revenue from the Property or any Proceeds in violation of the provisions of this
Agreement, fail to remit amounts to the Collection Account or Holding Account,
as applicable, as required by Section 3.1, misappropriate any security deposit
or portion thereof or misapply the proceeds of the Loan; or

                           5.2.21   SINGLE-PURPOSE ENTITY. Fail to be a
Single-Purpose Entity or take or suffer any action or inaction the result of
which would be to cause it or any SPE Entity to cease to be a Single-Purpose
Entity.

                  VI.      INSURANCE; CASUALTY; CONDEMNATION; RESTORATION

                  SECTION 6.1       INSURANCE COVERAGE REQUIREMENTS. Borrower
shall, at its sole cost and expense, keep or cause to be kept in full force and
effect insurance coverage of the types and minimum limits as follows during the
term of this Agreement:

                           6.1.1    PROPERTY INSURANCE. Insurance against loss
customarily included under so called "All Risk" policies including flood,
earthquake, vandalism, and malicious mischief, boiler and machinery and such
other insurable hazards as, under good insurance practices, from time to time
are insured against for other property and buildings similar to the Improvements
and Building Equipment in nature, use, location, height, and type of
construction. Such insurance policy shall also insure the additional expense of
demolition and if any of the Improvements or the use of the Property shall at
any time constitute legal non-conforming structures or uses, provide coverage
for contingent liability from Operation of Building Laws, Demolition Costs and
Increased Cost of Construction Endorsements and containing an "Ordinance or Law
Coverage" or "Enforcement" endorsement. The amount of such "All Risk" insurance
shall be not less than the Principal Amount. Each such insurance policy shall
contain an agreed amount endorsement or a coinsurance waiver (or in the
alternative, a no co-insurance policy) and replacement cost value endorsement
and shall cover, without limitation, all tenant
<PAGE>

improvements and betterments which Borrower is required to insure in accordance
with any Lease (excluding subleases). If the insurance required under this
paragraph is not obtained by blanket insurance policies, the insurance policy
shall be endorsed to also provide a limit greater than 100% of the replacement
cost. Lender shall be named as "Loss Payee" on a "Standard Mortgagee
Endorsement" and be provided not less than thirty (30) days advance notice of
change in coverage, cancellation or non-renewal.

                           6.1.2    LIABILITY INSURANCE. "General Public
Liability" insurance, including, without limitation, "Commercial General
Liability" insurance; "Owned" (if any), "Hired" and "Non Owned Auto Liability";
and "Umbrella Liability" coverage for "Personal Injury", "Bodily Injury",
"Death, Accident and Property Damage", providing in combination no less than
$50,000,000 per occurrence and in the annual aggregate, per location. The
policies described in this paragraph shall cover, without limitation, elevators,
escalators, independent contractors, "Contractual Liability" (covering, to the
maximum extent permitted by law, Borrower's obligation to indemnify Lender as
required under this Agreement) and "Products and Completed Operations Liability"
coverage. All public liability insurance shall name Lender as "Additional
Insured" either on a specific endorsement or under a blanket endorsement
satisfactory to Lender.

                           6.1.3    WORKERS' COMPENSATION INSURANCE. Statutory
workers compensation and disability insurance (to the extent the risks to be
covered thereby are not already covered by other policies maintained by
Borrower), with respect to any work by Borrower performed on or about the
Property.

                           6.1.4    COMMERCIAL RENTS INSURANCE. "Commercial
rents" insurance in an amount equal to thirty-six (36) months actual rental loss
(inclusive of any operating expenses and taxes regarding the Condominium Unit)
with a limit of liability sufficient to avoid any co-insurance penalty and to
provide Proceeds which will cover the actual loss of profits and rents sustained
during the period of at least thirty-six (36) months following the date of
casualty. Such policies of insurance shall be subject only to exclusions that
are reasonably acceptable to Lender; provided, however, that such exclusions are
reasonably consistent with those required for loans similar to the Loan provided
herein. Such insurance shall be deemed to include "loss of rental value"
insurance where applicable. The term "rental value" means the sum of (A) the
total then ascertainable Rents payable under the Bloomberg Lease (other than
subleases) and (B) the total ascertainable amount of all other amounts to be
received by Borrower from third parties which are the legal obligations of
Bloomberg, reduced to the extent such amounts would not be received because of
operating expenses not incurred during a period of non-occupancy of that portion
of such Property then not being occupied.

                           6.1.5    BUILDER'S ALL-RISK INSURANCE. During any
period of repair or restoration, builder's "All-Risk" insurance on a completed
value, non-reporting basis in an amount equal to not less than the full
insurable value of the Property against such risks (including so called "All
Risk" perils coverage and collapse of the Improvements to agreed limits as
Lender may reasonably request, in form and substance reasonably acceptable to
Lender).

<PAGE>

                           6.1.6    BOILER AND MACHINERY INSURANCE.
Comprehensive boiler and machinery insurance (without exclusion for explosion)
covering all mechanical and electrical equipment, if any, located in, on or
about the Property against physical damage, rent loss and improvement loss and
covering, without limitation, all tenant improvements and betterments that
Borrower is required to insure pursuant to any lease on a replacement cost
basis. The minimum amount of limits to be provided shall be $50,000,000 per
accident.

                           6.1.7    FLOOD INSURANCE. If any portion of the
Improvements is located within an area designated as "flood prone" or a "special
flood hazard area" (as defined under the regulations adopted under the National
Flood Insurance Act of 1968 and the Flood Disaster Protection Act of 1973),
flood insurance shall be provided, in an amount not less than the maximum limit
of coverage available under the Federal Flood Insurance plan with respect to the
Property. Lender reserves the right to require flood insurance in excess of that
available under the Federal Flood Insurance plan.

                           6.1.8    OTHER INSURANCE, LEASE TERMINATION INSURANCE
AND TERRORISM INSURANCE.

                           (a)      Provided that the Terrorism Risk Insurance
         Act of 2002 (TRIA) or a similar statute is in effect, Borrower shall be
         required to maintain or cause to be maintained insurance coverage
         relating to the acts of terrorism by or on behalf of foreign groups,
         individuals or interests (TERRORISM INSURANCE) on a per occurrence
         basis for the Building, the Commercial Premises, Residential Premises,
         Property, any Unit and/or any other interest in the Property (as each
         such term is defined in the Condominium Documents) in an amount equal
         to the sum of (x) the Principal Amount and (y) the amount of any
         Terrorism Insurance required by any other lender or Person that has a
         loan at any time secured by an interest in the Building, the Commercial
         Premises, Residential Premises, Property, any Unit and/or any other
         interest in the Property (as each such term is defined in the
         Condominium Documents) (the REQUIRED TERRORISM INSURANCE AMOUNT);
         provided, however, Lender agrees that Borrower shall not be required to
         spend (or cause the Condominium Board to spend) more than $2,000,000
         per annum for Terrorism Insurance (it being agreed that if the cost to
         purchase the Required Terrorism Insurance Amount exceeds $2,000,000 per
         year, Borrower will only be required to obtain or cause to be to
         obtained that amount of Terrorism Insurance that can be purchased for
         $2,000,000 per annum). If TRIA or a similar statute is not in effect,
         then, provided that Terrorism Insurance is either (i) commercially
         available, or (ii) maintained for another Class "A" office property in
         the same geographic area as the Property which is owned directly or
         indirectly by an Affiliate of Borrower, then Borrower shall be required
         to carry Terrorism Insurance throughout the term of the Loan on a per
         occurrence basis for the Condominium Unit in an amount not less than
         the Principal Amount. Lender agrees that Terrorism Insurance may be
         provided under a blanket policy that is acceptable to Lender.
<PAGE>

                           (b)      At Lender's reasonable request, such other
         insurance with respect to the Property against loss or damage of the
         kinds from time to time customarily insured against and in such amounts
         as are generally required by institutional lenders on loans of similar
         amounts and secured by properties comparable to the Property.

                           6.1.9    RATINGS OF INSURERS. Borrower shall maintain
the insurance coverage described in Section 6.1.1 through Section 6.1.8 above,
in all cases, with one or more domestic primary insurers reasonably acceptable
to Lender, having claims-paying-ability and financial strength ratings by S&P of
not less than "A" and its equivalent by the other Rating Agencies. All insurers
providing insurance required by this Agreement shall be authorized to issue
insurance in the State; provided, however, if the insurance provided pursuant to
Sections 6.1.1 and 6.1.4 is procured by a syndication of more then five (5)
insurers then the foregoing requirements shall not be violated if such insurance
is provided (a) under a blanket policy and at least sixty percent (60%) of the
limits of insurance in place on the date hereof and thereafter is with the
primary carrier having a claims paying ability rating of "A" or better and the
other carriers having a claims paying ability rating of "BBB" or better by S&P
and its equivalent by the other Rating Agencies.

                           6.1.10   FORM OF INSURANCE POLICIES; ENDORSEMENTS.
All insurance policies shall be in such form (except to the extent the forms are
"filed forms") and with such endorsements as are satisfactory to Lender (and
Lender shall have the right to confirm amounts, form (except to the extent the
forms are "filed forms"), risk coverage, deductibles, loss payees and insureds).
A certificate of insurance with respect to all of the above-mentioned insurance
policies has been delivered to Lender and Borrower shall make available all
certificates of insurance or copies of such policies as are provided to it
pursuant to the Bloomberg Lease, if any. Borrower shall make all originals or
certified copies of all such policies available for Lender's review in New York
City when the same are normally and customarily available following the Closing
Date. All policies (except policies for worker's compensation) shall name Lender
as an additional insured, shall provide that all Proceeds (except with respect
to Proceeds of general liability and workers' compensation insurance) be payable
to Lender as and to the extent set forth in Section 6.2, and shall contain: (i)
a standard "non-contributory mortgagee" endorsement or its equivalent relating
to recovery by Lender notwithstanding the negligent or willful acts or omissions
of Borrower; (ii) a waiver of subrogation endorsement in favor of Lender; (iii)
an endorsement providing that no policy shall be impaired or invalidated by
virtue of any act, failure to act, negligence of, or violation of declarations,
warranties or conditions contained in such policy by Borrower, Lender or any
other named insured, additional insured or loss payee, except for the willful
misconduct of Lender knowingly in violation of the conditions of such policy;
and (iv) an endorsement providing for a deductible per loss of an amount not
more than that which is customarily maintained by prudent owners of properties
with a standard of operation and maintenance comparable to and in the general
vicinity of the Property, but in no event in excess of an amount reasonably
acceptable to Lender. Borrower shall use commercially reasonable efforts to have
each such insurance policy also include (1) a provision that such policies shall
not be canceled, terminated or expire without at least thirty (30) days' prior
written notice to
<PAGE>

Lender, in each instance and (2) a provision whereby the insurer agrees that
such policy shall not be canceled or terminated, the coverage, deductible, and
limits of such policy shall not be modified, other provisions of such policy
shall not be modified is such policy, after giving effect to such modification,
would not satisfy the requirements of this Agreement, and such policy shall not
be canceled or fail to be renewed, without in each case, at least thirty (30)
days prior written notice to Lender. Each insurance policy shall contain a
provision whereby the insurer: (1) waives any right to claim any premiums and
commissions against Lender, provided that the policy need not waive the
requirement that the premium be paid in order for a claim to be paid to the
insured, and (2) provides that Lender at its option, shall be permitted to make
payments to effect the continuation of such policy upon notice of cancellation
due to non-payment of premiums. In the event any insurance policy (except for
general public and other liability and workers compensation insurance) shall
contain breach of warranty provisions, such policy shall provide that with
respect to the interest of Lender, such insurance policy shall not be
invalidated by and shall insure Lender regardless of (A) any act, failure to act
or negligence of or violation of warranties, declarations or conditions
contained in such policy by any named insured, (B) the occupancy or use of the
Property for purposes more hazardous than permitted by the terms thereof, or (C)
any foreclosure or other action or proceeding taken by Lender pursuant to any
provision of this Agreement.

                           6.1.11   CERTIFICATES. Borrower shall deliver to
Lender annually, concurrently with the renewal of the insurance policies
required hereunder, a certificate from Borrower's insurance agent stating that
the insurance policies required to be delivered to Lender pursuant to this
Section 6.1 are maintained with insurers who comply with the terms of Section
6.1.9, setting forth a schedule describing all premiums required to be paid by
Borrower to maintain the policies of insurance required under this Section 6.1,
and stating that Borrower has paid such premiums. Certificates of insurance with
respect to all replacement policies shall be delivered to Lender not less than
seven (7) Business Days prior to the expiration date of any of the insurance
policies required to be maintained hereunder which certificates shall bear
notations evidencing payment of applicable premiums. Borrower shall (i) subject
to the second sentence of Section 6.1.10 hereof, make originals (or certified
copies) of such replacement insurance policies available for review by Lender in
New York City and (ii) use commercially reasonable efforts to deliver to Lender
certificates of such replacement insurance policies within thirty (30) days
after the effective date thereof and deliver such policies to Lender within five
(5) Business Days after Borrower's receipt thereof. If Borrower fails to
maintain and make available the certified copies or originals of insurance
policies or to deliver to Lender the certificates of insurance and required by
this Agreement, upon five (5) Business Days' prior notice to Borrower, Lender
may procure such insurance, and all costs thereof (and interest thereon at the
Default Rate) shall be added to the Indebtedness. Lender shall not, by the fact
of approving, disapproving, accepting, preventing, obtaining or failing to
obtain any insurance, incur any liability for or with respect to the amount of
insurance carried, the form or legal sufficiency of insurance contracts,
solvency of insurance companies, or payment or defense of lawsuits, and Borrower
hereby expressly assumes full responsibility therefor and all liability, if any,
with respect.
<PAGE>

                           6.1.12   SEPARATE INSURANCE. Borrower will not take
out separate insurance contributing in the event of loss with that required to
be maintained pursuant to this Section 6.1 unless such insurance complies with
this Section 6.1.

                           6.1.13   BLANKET POLICIES. The insurance coverage
required under Section 6.1 may be effected under a blanket policy or policies
covering the Property and other properties and assets not constituting a part of
the Property; provided that any such blanket policy shall specify, except in the
case of public liability insurance, the portion of the total coverage of such
policy that is allocated to the Property, and any sublimits in such blanket
policy applicable to the Property, which amounts shall not be less than the
amounts required pursuant to Section 6.1 and which shall in any case comply in
all other respects with the requirements of this Section 6.1. Upon Lender's
request, Borrower shall deliver to Lender an Officer's Certificate setting forth
(i) the number of properties covered by such policy, (ii) the location by city
(if available, otherwise, county) and state of the properties, (iii) the average
square footage of the properties (or the aggregate square footage), (iv) a brief
description of the typical construction type included in the blanket policy and
(v) such other information as Lender may reasonably request. Borrower shall make
all such policies available for inspection by Lender in Borrower's offices upon
reasonable advance notice by Lender to Borrower. Borrower will not, and will not
permit any other Person to amend the terms of the Credit Wrap Insurance Policy
to add any other additional insured, mortgagee and/or loss payee of any
insurance proceeds regarding the Building, the Commercial Premises, Residential
Premises, Property, any Unit and/or any other interest in the Property (as each
such term is defined in the Condominium Documents) (including, without
limitation, adding any lender which finances any interest in any of the
Building, the Commercial Premises, Residential Premises, any Unit and/or any
other interest in the Property).

                  SECTION 6.2       CONDEMNATION AND INSURANCE PROCEEDS.

                           6.2.1    NOTIFICATION. Borrower will promptly notify
Lender in writing upon obtaining knowledge of (i) the institution of any
proceedings relating to any Taking (whether material or immaterial) of, or (ii)
the occurrence of any casualty, damage or injury to the Property or any portion
thereof, the restoration of which is estimated by Borrower in good faith to cost
more than the Threshold Amount. In addition, each such notice shall set forth
such good faith estimate of the cost of repairing or restoring such casualty,
damage, injury or Taking in reasonable detail if the same is then available and,
if not, as soon thereafter as it can reasonably be provided.

                           6.2.2    PROCEEDS. In the event of any Taking or any
casualty or other damage or injury to the Property, Borrower's right, title and
interest in and to all compensation, awards, proceeds, damages, claims,
insurance recoveries, causes and rights of action (whether accrued prior to or
after the date hereof) and payments which Borrower may receive or to which
Borrower may become entitled with respect to the Property or any part thereof
other than payments received in connection with any liability or loss of rental
value or business interruption insurance (collectively, PROCEEDS), in connection
with any such Taking of, or casualty or other damage or injury to, the Property
or any part thereof are hereby assigned by Borrower to Lender and, except as

<PAGE>

otherwise provided herein, in the Bloomberg Lease, in the Condominium
Declaration or in the By-Laws, shall be paid to the Lender. Borrower will or
will cause the Condominium Board to, in good faith and in a commercially
reasonable manner, file and prosecute the adjustment, compromise or settlement
of any claim for Proceeds and, subject to the Condominium Documents, the terms
hereof and the Proxy, Borrower's right to receive the direct payment of any
Proceeds and Bloomberg's right to such Proceeds under the Bloomberg Lease, will
cause the same to be paid directly to Lender to be held and applied in
accordance with the provisions of this Agreement. Except upon the occurrence and
during the continuance of a Monetary Default or an Event of Default, Borrower
may settle any insurance claim with respect to Proceeds which does not exceed
the Threshold Amount. Subject to the Condominium Documents, whether or not a
Monetary Default or an Event of Default shall have occurred and be continuing,
Lender shall have the right to approve, such approval not to be unreasonably
withheld, conditioned, or delayed any settlement which could in Lender's sole
but reasonable discretion result in any Proceeds in excess of the Threshold
Amount and Borrower will deliver or cause to be delivered to Lender all
instruments reasonably requested by Lender to permit such approval. Borrower
will pay all reasonable out-of-pocket costs, fees and expenses reasonably
incurred by Lender (including all reasonable attorneys' fees and expenses, the
reasonable fees of insurance experts and adjusters and reasonable costs incurred
in any litigation or arbitration), and interest thereon at the Default Rate to
the extent not paid within fifteen (15) days after delivery of a written request
for reimbursement by Lender, in connection with the settlement of any claim for
Proceeds and seeking and obtaining of any payment on account thereof in
accordance with the foregoing provisions. If any Proceeds are received by
Borrower and may be retained by Borrower pursuant to this Section 6.2, such
Proceeds shall, until the completion of the related Work, be held in trust for
Lender and shall be segregated from other funds of Borrower to be used to pay
for the cost of the Work in accordance with the terms hereof, and in the event
such Proceeds exceed the Threshold Amount (unless such Proceeds are the result
of a Casualty Event), such Proceeds shall be forthwith paid directly to and held
by Lender in the Proceeds Reserve Account in trust for Borrower, in each case to
be applied or disbursed in accordance with this Section 6.2 subject to the
Bloomberg Lease, the Condominium Declaration and/or the By-Laws. If an Event of
Default shall have occurred and be continuing, or if Borrower fails to file
and/or prosecute (or fails to cause the Condominium Board to file and/or
prosecute) any insurance claim for a period of fifteen (15) Business Days
following Borrower's receipt of written notice from Lender, Borrower hereby
irrevocably empowers Lender, in the name of Borrower as its true and lawful
attorney-in-fact, to file and prosecute such claim (including settlement
thereof) with counsel satisfactory to Lender and to collect and to make receipt
for any such payment, all at Borrower's expense (including payment of interest
at the Default Rate for any amounts advanced by Lender pursuant to this Section
6.2 and not reimbursed by Borrower within thirty (30) days). Notwithstanding
anything to the contrary set forth in this Agreement, however, and excluding
situations requiring prepayment of the Note, to the extent any Proceeds (either
singly or when aggregated with all other then unapplied Proceeds with respect to
the Property) do not exceed the Threshold Amount (unless such Proceeds are the
result of a Casualty Event), such Proceeds are to be paid directly to Borrower
to be applied to restoration of the Property in accordance with the terms hereof
<PAGE>

(except that Proceeds paid in respect of the insurance described in Section
6.1.4 shall be deposited directly to the Collection Account as revenue of the
Property).

                           6.2.3    LENDER TO TAKE PROCEEDS. Subject to the
Bloomberg Lease, the Condominium Declaration and/or the By-Laws, if (i) a
Monetary Default or an Event of Default shall have occurred and be continuing,
or (ii) a Total Loss with respect to the Property shall have occurred, or (iii)
the Work is not capable of being completed before the earlier to occur of the
date which is three (3) months prior to the earlier of the Anticipated Repayment
Date and the date on which the business interruption insurance carried by
Borrower with respect to the Property shall expire (the CUT-OFF DATE), unless on
or prior to the Cut-Off Date the Borrower (x) shall deliver to the Lender and
there shall remain in effect a binding written offer, subject only to customary
conditions, of an Approved Bank or such other financial institution or
investment bank reasonably satisfactory to Lender duly authorized to originate
loans secured by real property located in the State for a loan from such
Approved Bank or such other financial institution or investment bank to the
Borrower in a principal amount of not less than the then Principal Amount and
which shall, in the Lender's reasonable judgment, enable the Borrower to
refinance the Loan prior to the Anticipated Repayment Date and (y) if a
Securitization shall have occurred, shall obtain a Rating Agency Confirmation,
or (iv) Bloomberg shall exercise its termination right under the Bloomberg
Lease, or (v) the Property is not capable of being restored substantially to its
condition prior to such Taking or casualty and such incapacity shall have a
Material Adverse Effect, then in any such case, all Proceeds (other than any
amounts to which Bloomberg is entitled to under the Bloomberg Lease or any other
party is entitled to under the Condominium Declaration or By-Laws) shall be paid
over to Lender (if not paid directly to Lender) and any Proceeds (other than any
amounts to which Bloomberg is entitled to under the Bloomberg Lease or any other
party is entitled to under the Condominium Declaration or By-Laws) remaining
after reimbursement of Lender's or its agent's reasonable out-of-pocket costs
and expenses actually incurred in connection with recovery of any such Proceeds
(including, without limitation, reasonable out-of-pocket administrative costs
and inspection fees) shall be applied by Lender to prepay the Note in accordance
with the provisions thereof, and the balance, if any shall be paid to the
Borrower; provided, however, if such Proceeds would pursuant to the terms of
this Section be applied to prepay the Note solely as a result of a Monetary
Default, Lender shall not apply such Proceeds to prepay the Loan until such
Monetary Default results in an Event of Default.

                           6.2.4    BORROWER TO RESTORE.

                           (a)      Subject to the Bloomberg Lease, the
         Condominium Declaration and the By-Laws and promptly after the
         occurrence of any damage or destruction to all or any portion of the
         Property or a Taking of a portion of the Property, Borrower shall
         commence and diligently prosecute, or cause to be commenced and
         diligently prosecuted, to completion, subject to Excusable Delays, the
         repair, restoration and rebuilding of the Property (in the case of a
         partial Taking, to the extent it is capable of being restored) so
         damaged, destroyed or remaining after such Taking in full compliance
         with all material Legal Requirements and free and clear of any and all
         Liens except Permitted
<PAGE>

         Encumbrances (such repair, restoration and rebuilding are sometimes
         hereinafter collectively referred to as the WORK). The plans and
         specifications shall require that the Work be done in a workmanlike
         manner at least equivalent to the quality and character prior to the
         damage or destruction (provided, however, that in the case of a partial
         Taking, the Property restoration shall be done to the extent reasonably
         practicable after taking into account the consequences of such partial
         Taking), 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 any partial Taking of, or casualty or other
         damage or injury to, the Property, if the Work actually performed, if
         any, or failed to be performed, shall have no Material Adverse Effect
         on the value of the Property from the value that the Property would
         have had if the same had been restored to its condition immediately
         prior to such Taking or casualty. Subject to Borrower's rights pursuant
         to Section 2.3.3 to cause the Property to be released from the Lien of
         the Security Instrument, and subject to the Bloomberg Lease, the
         Condominium Declaration and the By-Laws, Borrower shall be obligated to
         restore the Property suffering a casualty or which has been subject to
         a partial Taking in accordance with the provisions of this Section 6.2
         at Borrower's sole cost and expense whether or not the Proceeds shall
         be sufficient, provided that, if applicable, the Proceeds shall be made
         available to Borrower by Lender in accordance with this Agreement.
         Notwithstanding any term in the Loan Documents to the contrary, (i) any
         Work resulting from a Casualty Event may only be performed by an
         Approved Contractor (together with any sub-contractors hired by such
         Approved Contractor) pursuant to a construction contract acceptable to
         Lender in its sole but reasonable discretion (which must expressly
         include Lender as a third party beneficiary and permitted assignee of
         Borrower's rights under the contract) and (ii) Proceeds will only be
         made available by Lender to Borrower for Work resulting from a Casualty
         Event after Borrower provides to Lender (a) evidence that the Approved
         Contractor has provided payment and performance bonds (with Lender
         named as a dual obligee thereunder) for completion of all of the Work
         in favor of Lender (by way of a collateral assignment from Borrower and
         consented to in writing by the Approved Contractor) in form acceptable
         to Lender in its sole but reasonable discretion and (b) a completion
         guaranty from Guarantor in favor of Lender in form substantially
         identical to the form of guaranty attached hereto as Exhibit G (the
         COMPLETION GUARANTY) together with an Opinion of Counsel reasonably
         acceptable to Lender regarding the due organization and authority of
         Guarantor, enforcement of the guaranty and any other matters reasonably
         requested by Lender. After a Casualty Event occurs, Borrower agrees to
         cause Guarantor to deliver to Lender a duly executed copy of the
         Completion Guaranty within two (2) Business Days after the earlier to
         occur of (i) any election by Bloomberg not to terminate the Bloomberg
         Lease in accordance with the terms of Section 10.1(B)(1) thereof and
         (ii) the date Borrower delivers to Bloomberg a Casualty Statement
         pursuant to Section 10.1(B(1) of the Bloomberg Lease which by its terms
         does not entitle Bloomberg to terminate the Bloomberg Lease.
<PAGE>

                           (b)      If Proceeds are not required to be applied
         toward payment of the Indebtedness pursuant to the terms hereof, the
         terms of the Bloomberg Lease, the terms of the Condominium Declaration
         or the terms of the By-Laws, then Lender shall make the Proceeds which
         it is holding pursuant to the terms hereof (after payment of any
         reasonable out-of-pocket expenses actually incurred by Lender in
         connection with the collection thereof plus interest thereon at the
         Applicable Interest Rate (from the date advanced through the date of
         reimbursement) to the extent the same are not paid within thirty (30)
         after request for reimbursement by Lender) available to Borrower for
         payment of or reimbursement of Borrower's or Bloomberg's expenses
         incurred with respect to the Work, upon the terms and subject to the
         conditions set forth in paragraphs (i), (ii) and (iii) below and in
         Section 6.2.4 and Section 6.2.5:

                                    (i)      at the time of loss or damage or at
                  any time thereafter while Borrower is holding any portion of
                  the Proceeds, there shall be no continuing or Event of
                  Default;

                                    (ii)     if, at any time, the estimated cost
                  of the Work (as estimated by the Independent Architect
                  referred to in clause (iii) below) shall exceed the Proceeds
                  (a DEFICIENCY), Borrower shall, at its option (within a
                  reasonable period of time after receipt of such estimate)
                  either deposit with or deliver to Lender (A) Cash and Cash
                  Equivalents in amount equal to the Deficiency, (B) a Letter or
                  Letters of Credit in an amount equal to the Deficiency, or (C)
                  such other evidence of Borrower's ability to meet such excess
                  costs and which is reasonably satisfactory to Lender and the
                  Rating Agencies; for so long as a Deficiency shall exist,
                  Lender shall not be required to make any Proceeds disbursement
                  to Borrower;

                                    (iii)    Each of Lender and the Independent
                  Architect shall have reasonably approved the plans and
                  specifications for the Work and any change orders in
                  connection with such plans and specifications; and

                                    (iv)     Lender shall, within a reasonable
                  period of time prior to request for initial disbursement, be
                  furnished with an estimate of the cost of the Work accompanied
                  by an Independent Architect's certification as to such costs
                  and appropriate plans and specifications for the Work.
                  Borrower shall restore all Improvements such that when they
                  are restored and/or repaired, such Improvements and their
                  contemplated use comply in all material respects with all
                  applicable Legal Requirements including zoning, environmental
                  and building laws, codes, ordinances and regulations.

                           6.2.5    DISBURSEMENT OF PROCEEDS.

                           (a)      Subject to Section 6.2.4, the Bloomberg
         Lease, the Condominium Declaration and the By-Laws, disbursements of
         the Proceeds in
<PAGE>

         Cash or Cash Equivalents to Borrower hereunder shall be made from time
         to time (but not more frequently than once in any month) by Lender but
         only for so long as no Event of Default shall have occurred and be
         continuing, as the Work progresses upon receipt by Lender of (i) an
         Officer's Certificate dated not more than ten (10) Business Days prior
         to the application for such payment, requesting such payment or
         reimbursement and describing the Work performed that is the subject of
         such request, the parties that performed such Work and the actual cost
         thereof, and also certifying that such Work and materials are or, upon
         disbursement of the payment requested to the parties entitled thereto,
         will be free and clear of Liens other than Permitted Encumbrances, (ii)
         evidence reasonably satisfactory to Lender that (A) all materials
         installed and work and labor performed in connection with such Work
         have been or, upon disbursement of the requested payments to the
         parties entitled thereto, will be, paid for in full and (B) there
         exists no notices of pendency, stop orders, mechanic's liens or notices
         of intention to file same (unless the same is required by State law as
         a condition to the payment of a contractor) or any liens or
         encumbrances of any nature whatsoever on the Property arising out of
         the Work which have not been either fully bonded to the satisfaction of
         Lender or discharged of record or in the alternative, fully insured to
         the satisfaction of Lender by the Title Company that issued the Title
         Policy and (iii) an Independent Architect's certificate certifying
         performance of the Work together with an estimate of the cost to
         complete the Work. No payment made prior to the final completion of the
         Work, as certified by the Independent Architect, except for payment
         made to contractors whose Work shall have been fully completed and from
         which final lien waivers have been received, shall exceed ninety
         percent (90%) (the RETAINAGE RELEASE THRESHOLD) of the value of the
         Work performed and materials furnished and incorporated into the
         Improvements from time to time until such time as fifty percent (50%)
         of such Work has been satisfactorily completed (as certified by the
         Independent Architect), at which time the Retainage Release Threshold
         with respect to such Work shall be increased to ninety-five (95%), and
         at all times the undisbursed balance of said Proceeds together with all
         amounts deposited, bonded, guaranteed or otherwise provided for
         pursuant to Section 6.2.4(b) above, shall be at least sufficient to pay
         for the estimated cost of completion of the Work; final payment of all
         Proceeds remaining with Lender shall be made upon receipt by Lender of
         a certification by an Independent Architect, as to the completion of
         the Work substantially in accordance with the submitted plans and
         specifications, final lien releases, and the filing of a notice of
         completion and the expiration of the period provided under the law of
         the State for the filing of mechanics' and materialmens' liens which
         are entitled to priority as to other creditors, encumbrances and
         purchasers, as certified pursuant to an Officer's Certificate, and
         delivery of a temporary certificate of occupancy for the core and shell
         with respect to the Work, or, if not applicable, an Officer's
         Certificate to the effect that a certificate of occupancy is not
         required.

                           (b)      Subject to the Bloomberg Lease, the
         Condominium Declaration and the By-Laws, if, after the Work is
         completed and all costs of completion have been paid, there are excess
         Proceeds, Lender shall apply such

<PAGE>

         excess Proceeds with respect to the Taking of or casualty to the
         Property to the payment or prepayment of all or any portion of the
         Indebtedness secured hereby, without payment of the Yield Maintenance
         Premium, the Liquidated Damages Amount or any other prepayment fee or
         charge of any kind (except that interest shall be payable through the
         end of the then current Interest Period even if such period extends
         beyond the date of such prepayment) and any balance thereof, shall be
         paid over to Borrower.

                  VII.     IMPOSITIONS, OTHER CHARGES, LIENS AND OTHER ITEMS

                  SECTION 7.1       BORROWER TO PAY IMPOSITIONS AND OTHER
CHARGES. Borrower shall pay or cause to be paid all Impositions now or hereafter
levied or assessed or imposed against the Property or any part thereof prior to
the imposition of any interest, charges or expenses for the non-payment thereof
and shall pay all Other Charges on or before the date they are due. Borrower
shall deliver to Lender annually, no later than fifteen (15) Business Days after
the first day of each fiscal year of Borrower, and shall update as new
information is received, a schedule describing all Impositions, payable or
estimated to be payable during such fiscal year attributable to or affecting the
Property or Borrower. Subject to Borrower's right of contest set forth in
Section 7.3, as set forth in the next two sentences and provided that there are
sufficient funds available in the Tax Reserve Account, Lender, on behalf of
Borrower, shall pay all Impositions and Other Charges which are attributable to
or affect the Property or Borrower, prior to the date such Impositions or Other
Charges shall become delinquent or late charges may be imposed thereon, directly
to the applicable taxing authority with respect thereto. Lender shall, or Lender
shall direct the Cash Management Bank to, pay to the taxing authority or other
relevant Person such amounts to the extent funds in the Tax Reserve Account are
sufficient to pay such Impositions. Nothing contained in this Agreement or the
Security Instrument shall be construed to require Borrower to pay any tax,
assessment, levy or charge imposed on Lender in the nature of a franchise,
capital levy, estate, inheritance, succession, income or net revenue tax.

                  SECTION 7.2       NO LIENS. Subject to its right of contest
set forth in Section 7.3, Borrower shall at all times keep, or cause to be kept,
the Property free from all Liens (other than Permitted Encumbrances) and shall
pay when due and payable (or bond over) all claims and demands of mechanics,
materialmen, laborers and others which, if unpaid, might result in or permit the
creation of a Lien on the Property or any portion thereof and shall in any event
cause the prompt, full and unconditional discharge of all Liens imposed on or
against the Property or any portion thereof within sixty (60) days after
receiving written notice of the filing (whether from Lender, the lienor any
other Person) thereof. Borrower shall do or cause to be done, at the sole cost
of Borrower, everything reasonably necessary to fully preserve the first
priority of the Lien of the Security Instrument against the Property, subject to
the Permitted Encumbrances. Upon the occurrence and continuance of an Event of
Default with respect to its Obligations as set forth in this Article VII, Lender
may (but shall not be obligated to) make such payment or discharge such Lien,
and Borrower shall reimburse Lender within twenty (20) days after Lender's
demand therefor for all such advances pursuant to Section 19.12 (together with
<PAGE>

interest thereon at the Default Rate). Lender agrees that (x) the lien of the
Security Instrument is, subject to the terms of the Condominium Declaration,
subordinate to the Condominium Declaration (as amended from time to time in
accordance with the terms of the Loan Agreement), and (y) Lender will confirm
such subordination in a written instrument (in recordable form) in favor of the
Condominium Board that is in form reasonably satisfactory to Lender from time to
time (at the reasonable request of Borrower) within ten (10) Business days after
Borrower's written request. All reasonable costs and expenses incurred by Lender
in connection with the negotiation, preparation, execution and delivery of any
Non-Disturbance Agreement, including, without limitation, reasonable attorneys'
fees and disbursements, shall be paid by Borrower (in advance, if requested by
Lender).

                  SECTION 7.3       CONTEST. Nothing contained herein shall be
deemed to require Borrower to pay, or cause to be paid, any Imposition, to
satisfy any Lien, or to comply with any Legal Requirement or Insurance
Requirement, so long as Borrower is in good faith, and by proper legal
proceedings, where appropriate, diligently contesting the validity, amount or
application thereof, provided that in each case, at the time of the commencement
of any such action or proceeding, and during the pendency of such action or
proceeding (i) no Event of Default shall exist and be continuing hereunder, (ii)
Borrower shall keep Lender informed of the status of such contest at reasonable
intervals, (iii) if Borrower is not providing security as provided in clause
(vi) below, adequate reserves with respect thereto are maintained on Borrower's
books or in the Tax Reserve Account or Insurance Reserve Account, as applicable,
(iv) such contest operates to suspend collection or enforcement as the case may
be, of the contested Imposition, Lien or Legal Requirement and such contest is
maintained and prosecuted continuously and with diligence or the Imposition or
Lien is bonded, (v) in the case of any Insurance Requirement, the failure of
Borrower to comply therewith shall not impair the validity of any insurance
required to be maintained by Borrower under Section 6.1 or the right to full
payment of any claims thereunder, and (vi) in the case of Impositions and Liens
in excess of $5,000,000 individually, or in the aggregate, which are not bonded,
during such contest, Borrower, shall deposit with or deliver to Lender either
Cash and Cash Equivalents or a Letter or Letters of Credit in an amount equal to
110% of (A) the amount of Borrower's obligations being contested plus (B) any
additional interest, charge, or penalty arising from such contest; provided,
however, Borrower shall not be required to deliver such additional collateral if
in Lender's sole but reasonable discretion a provision is made to Lender for
protection of Lender's interest in the Property. Notwithstanding the foregoing,
the creation of any such reserves or the furnishing of any bond or other
security, Borrower promptly shall comply with any contested Legal Requirement or
Insurance Requirement or shall pay any contested Imposition or Lien, and
compliance therewith or payment thereof shall not be deferred, if, at any time
the Property or any portion thereof shall be, in Lender's reasonable judgment,
in imminent danger of being forfeited or lost or Lender is likely to be subject
to civil or criminal damages as a result thereof. If such action or proceeding
is terminated or discontinued adversely to Borrower, Borrower shall deliver to
Lender reasonable evidence of Borrower's compliance with such contested
Imposition, Lien, Legal Requirements or Insurance Requirements, as the case may
be.
<PAGE>

                  VIII.    TRANSFERS, INDEBTEDNESS AND SUBORDINATE LIENS

                  SECTION 8.1       RESTRICTIONS ON TRANSFERS. Unless such
action is permitted by the provisions of this Article VIII, Borrower shall not,
and shall not permit any other Person to, except with the prior written consent
of Lender, (i) Transfer all or any part of the Property, (ii) incur any Debt of
Borrower, other than Permitted Debt or Permitted Encumbrances, or (iii) permit
any Transfer (directly or indirectly) of any interest in Borrower, or any SPE
Entity.

                  SECTION 8.2       SALE OF BUILDING EQUIPMENT. Borrower may
Transfer or dispose of Building Equipment which is being replaced or which is no
longer necessary in connection with the operation of the Property free from the
Lien of the Security Instrument provided that such Transfer or disposal will not
have a Material Adverse Effect on the value of the Property taken as a whole,
will not materially impair the utility of the Property, and will not result in a
reduction or abatement of, or right of offset against, the Rents payable under
any Lease (excluding subleases), in either case as a result thereof, and
provided that any new Building Equipment acquired by Borrower (and not so
disposed of) shall be subject to the Lien of the Security Instrument. Lender
shall, from time to time, upon receipt of an Officer's Certificate requesting
the same and confirming satisfaction of the conditions set forth above, execute
a written instrument in form reasonably satisfactory to Lender to confirm that
such Building Equipment which is to be, or has been, sold or disposed of is free
from the Lien of the Security Instrument.

                  SECTION 8.3       IMMATERIAL TRANSFERS AND EASEMENTS, ETC.
Borrower may, without the consent of Lender, (i) make immaterial Transfers of
portions of the Property to Governmental Authorities for dedication or public
use (subject to the provisions of Section 6.2) or, portions of the Property to
third parties for the purpose of erecting and operating additional structures
whose use is integrated with the use of the Property, and (ii) grant easements,
restrictions, covenants, reservations and rights of way in the ordinary course
of business for access, water and sewer lines, cable, 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 impair the utility and operation of the
Property or have a Material Adverse Effect on the value of the Property taken as
a whole. In connection with any Transfer permitted pursuant to this Section 8.3,
Lender shall execute and deliver any instrument reasonably necessary or
appropriate, in the case of the Transfers referred to in clause (i) above, to
release the portion of the Property affected by such Taking or such Transfer
from the Lien of the Security Instrument or, in the case of clause (ii) above,
to subordinate the Lien of the Security Instrument to such easements,
restrictions, covenants, reservations and rights of way or other similar grants
upon receipt by Lender of:

                           (a)      thirty (30) days prior written notice
         thereof;

                           (b)      a copy of the instrument or instruments of
         Transfer;
<PAGE>

                           (c)      an Officer's Certificate stating (x) with
         respect to any Transfer, the consideration, if any, being paid for the
         Transfer and (y) that such Transfer does not materially impair the
         utility and operation of the Property, materially reduce the value of
         the Property or have a Material Adverse Effect; and

                           (d)      reimbursement of all of Lender's reasonable
         costs and expenses incurred in connection with such Transfer.

                  SECTION 8.4       INTENTIONALLY DELETED.

                  SECTION 8.5       PERMITTED TRANSFERS. A Transfer of (but not
a mortgage, pledge, hypothecation, encumbrance or grant of a security interest
in) a direct or indirect beneficial interest in Borrower shall be permitted
without Lender's consent if (i) Lender receives thirty (30) days prior written
notice thereof, (ii) such Transfer is to one or more Qualified Institutional
Borrowers or one or more Persons wholly owned, directly or indirectly, by one or
more Qualified Institutional Borrowers, (iii) immediately prior to such
Transfer, no Event of Default shall have occurred and be continuing, (iv)
subsequent to such Transfer, Borrower will continue to be a Single Purpose
Entity, (v) a Qualifying Manager shall manage the Property, (vi) if (x) such
Transfer causes the Transferee to own, in the aggregate with the ownership
interests of its Affiliates and family members, more than a 49% interest in
Borrower (and the Transferee (in the aggregate with the ownership interests of
its Affiliates and family members) did not, prior to such Transfer, own more
than a 49% interest in Borrower), or (y) such Transfer, together with all other
Transfers by Borrower, whether in a single Transfer or in a series of Transfers
and whether or not effected simultaneously, results in a Transfer of more than
49% of the aggregate limited liability interests in Borrower or (z) subsequent
to any Transfer, Guarantor does not Control, directly or indirectly, Borrower,
(a) a reasonably acceptable non-consolidation opinion is delivered to Lender
concerning, as applicable, Borrower, the new Transferee, any Person which
subsequent to the permitted Transfer will own 49% or more of Borrower and/or
their respective owners (if applicable), and (b) a Rating Agency Confirmation is
obtained by Borrower and delivered to Lender and (vii) Borrower shall reimburse
Lender, on the date of such Transfer, for all reasonable costs and expenses,
including, without limitation, reasonable attorney's fees and disbursements,
incurred or to be incurred by Lender in connection with such Transfer.
Notwithstanding the foregoing, nothing contained in this Agreement or the other
Loan Documents shall in any way restrict or prohibit, nor shall any notice to
Lender or consent of Lender be required in connection with (1) the Transfer or
issuance of any securities or any direct or indirect interests in any direct or
indirect owner of Borrower that is publicly traded on a national exchange
(including, for so long as it is an indirect owner of Borrower, Guarantor and/or
Vornado Realty Trust, a Maryland business trust (VRT), as the case may be), or
(2) the merger or consolidation of Guarantor and/or VRT, as the case maybe, with
or into any other Person (each, a PUBLIC TRANSFER, and collectively, the PUBLIC
TRANSFERS); provided, however, that, if any Public Transfer or series of Public
Transfers (other than the sale of publicly traded shares in Guarantor and/or
VRT, as applicable, in the ordinary course of business) shall result in a change
in Control of Guarantor and/or VRT, as applicable, then Lender's prior written
consent shall be required (and, after a Securitization, a Rating Agency
Confirmation shall be required) in connection with such Public Transfer unless

<PAGE>

after giving effect to such Public Transfer, Guarantor and/or VRT, as the case
may be (or their respective successor entity thereto), shall be a Person that
has and provides substantially at least the same experience and expertise as
Guarantor and/or VRT, as applicable, prior to such Transfer in conducting
business of the nature currently conducted by Guarantor and/or VRT, as
applicable or (3) the Transfer of any direct or indirect interest in Borrower to
VRT or Vornado Realty L.P., a Delaware limited partnership (VOP); provided if
after giving effect to such Transfer (a) more than 49% of the direct or indirect
aggregate limited liability interests in Borrower (whether individually or in
the aggregate of all such Transfers) are transferred to VRT and/or VOP (or
together with any of their respective Affiliates would exceed), Borrower must
first deliver to Lender a reasonably acceptable non-consolidation opinion to
Lender concerning Borrower, VRT and/or VOP (as applicable) and/or their
respective owners (if applicable) and/or (b) Guarantor would not Control,
directly or indirectly, Borrower, as a condition to such Transfer Borrower must
deliver to Lender a Guaranty of Recourse Obligations and Environmental Indemnity
and Completion Guaranty (if a Completion Guaranty is then in effect or a
ratification from Borrower that it will cause VRT to deliver such Completion
Guaranty in the future if required by the terms hereof and treating VRT as
Guarantor hereunder) in substantially the form of the Recourse Guaranty and
Environmental Indemnity and EXHIBIT G, respectively, from VRT to Lender (and
Lender shall release the Guarantor from its obligations under the Loan Documents
except for any obligations which first arose prior to the applicable transfer)
together with any other documents reasonably requested by Lender. In addition,
notwithstanding the foregoing, nothing contained in this Agreement or the other
Loan Documents shall in any way restrict or prohibit, nor shall any notice to
Lender or consent of Lender be required in connection with (i) the Transfer or
issuance of any direct or indirect interests in VOP, or (ii) the merger or
consolidation of VOP with or into any other Person; provided, however, that,
immediately after giving effect to each such Transfer, VRT (or any successor
entity permitted above as a result of a Public Transfer) shall continue to be
the managing general partner of VOP and VRT shall remain in control of the
business and operations of VOP, regardless of the percentage of equity interests
in VOP owned by VRT.

                  SECTION 8.6       DELIVERIES TO LENDER. Not less than thirty
(30) days prior to the closing of any transaction subject to the provisions of
this Article VIII, Borrower shall deliver to Lender an Officer's Certificate
describing the proposed transaction (other than transfers of publicly traded
shares in Guarantor in the ordinary course of business) and stating that such
transaction is permitted by this Article VIII, together with any appraisal or
other documents upon which such Officer's Certificate is based. In addition,
Borrower shall provide Lender with copies of executed transfer instruments or
other similar closing documents within ten (10) Business Days after such
closing.

                  SECTION 8.7       LOAN ASSUMPTION. Borrower shall have the
right to request Lender's consent, which consent shall not be unreasonably
withheld, to the assumption of the Loan by a proposed purchaser of the Property.
Any such assumption of the Loan shall be conditioned upon, among other things,
(i) the delivery of a Rating Agency Confirmation, (ii) the delivery of financial
information, including, without limitation, if available, audited financial
statements, for such purchaser and the direct and indirect owners such
purchaser, (iii) the delivery of evidence that the purchaser is a SPE
<PAGE>

Entity, (iv) the execution and delivery of all documentation evidencing the loan
assumption reasonably requested by Lender, (v) the delivery of Opinions of
Counsel reasonably requested by Lender, including, without limitation, a
non-consolidation opinion with respect to the purchaser and other entities
identified by Lender or requested by the Rating Agencies and opinions with
respect to the valid formation, due authority and good standing of the purchaser
and any additional pledgors and the continued enforceability of the Loan
Documents and any other matters requested by Lender, (vi) the delivery of a
Guaranty of Recourse Obligations and Environmental Indemnity in substantially
the form of the Recourse Guaranty and Environmental Indemnity, respectively,
from an entity acceptable to Lender in its sole and absolute discretion (and if
such entity is acceptable to Lender, Lender shall release the Guarantor from its
obligations under the Loan Documents except for any obligations which first
arose prior to the applicable transfer); (vii) the delivery of an endorsement to
the Title Policy in form and substance acceptable to Lender, insuring the lien
of the Security Instrument, as assumed, subject only to the Permitted
Encumbrances (or a letter from the Title Company confirming such matters in form
acceptable to Lender in its sole but reasonable discretion), (viii) other than
in connection with the first assumption of the Loan, the payment of an
assumption fee equal to one percent (1%) of the Principal Amount (the ASSUMPTION
FEE), (ix) all costs and expenses related to any assumption are to be paid by
Borrower and (x) the payment of all of Lender's reasonable fees, costs and
expenses, including, without limitation, reasonable attorneys' fees and costs,
actually incurred by Lender in connection with such assumption.

                  SECTION 8.8       BLOOMBERG LEASE.

                           8.8.1    MODIFIED LEASE. Borrower shall not (y)
consent to an assignment of the Bloomberg Lease that releases Bloomberg from its
obligations under the Lease, or (z) modify the Bloomberg Lease (including,
without limitation, accept a surrender of any portion of the Property subject to
the Bloomberg Lease (unless otherwise permitted or required by law), allow a
reduction in the term of such Lease or a reduction in the Rent payable
thereunder, change any renewal provisions thereunder, materially increase the
obligations of Borrower or materially decrease the obligations of Bloomberg or
terminate the Bloomberg Lease or permit the assignment or other transfer (by
operation of law or otherwise) of the Bloomberg Lease (any such action referred
to in clauses (y) and (z) being referred to herein as a MODIFIED LEASE) without
the prior written consent of Lender which consent shall not be unreasonably
withheld, conditioned or delayed provided such modification could not in
Lender's sole and absolute discretion result in a Material Adverse Effect. If,
after five (5) Business Day's following Lender's receipt of such Modified Lease
Lender has not either approved or disapproved the proposed Modified Lease,
Borrower shall deliver a second notice to Lender which notice must state on the
outside envelope in which such Modified Lease is delivered in bold, large
letters (no less than 15 font) the following: NOTICE: YOU WILL BE DEEMED TO HAVE
CONSENTED TO THE DOCUMENT ENCLOSED HEREIN IF NOT DISAPPROVED WITHIN FIVE (5)
BUSINESS DAYS OF RECEIPT. Lender's failure to approve or disapprove such
Modified Lease within ten Business Days after Lender's receipt of the second
notice shall be deemed to constitute Lender's approval thereof.
<PAGE>

                           8.8.2    DELIVERY OF MODIFIED LEASE. Upon the
execution of any Modified Lease, as applicable, Borrower shall deliver to Lender
an executed copy of such Modified Lease.

                           8.8.3    LEASE AMENDMENTS. Borrower agrees that it
shall not have the right or power, as against Lender without its consent, to
cancel, abridge, amend or otherwise modify the Bloomberg Lease unless such
modification complies with this Section 8.8.

                           8.8.4    SECURITY DEPOSITS/TERMINATION PAYMENTS.

                           (a)      All security or other deposits of Bloomberg
         under the Bloomberg Lease shall be treated as trust funds and shall not
         be commingled with any other funds of Borrower, and such deposits,
         shall be deposited, upon receipt of the same by Borrower in a separate
         account (which shall be a trust account if required by applicable law)
         maintained by Borrower expressly for such purpose. Within ten (10)
         Business Days after written request by Lender, Borrower shall furnish
         to Lender reasonably satisfactory evidence of compliance with this
         Section 8.8.4, together with a statement of all lease securities
         deposited with Borrower by Bloomberg and the location and account
         number of the account in which such Security Deposits are held.
         Attached hereto as SCHEDULE I, is a true correct and complete list of
         all Security Deposits and the amounts thereof, currently in Borrower's
         possession.

                           (b)      In the event that Borrower receives the
         proceeds of any security deposit as the result of a Bloomberg Default
         (as hereinafter defined) or a termination payment as the result a
         termination of the Bloomberg Lease or otherwise, Borrower agrees to
         deposit such funds within two (2) Business Days after Borrower's
         receipt thereof, into the Structural Reserve Account to be disbursed by
         Lender pursuant to Section 16.3.

                           8.8.5    NO DEFAULT UNDER BLOOMBERG LEASE,
CONDOMINIUM DECLARATION OR BY-LAWS. Borrower shall (i) promptly perform and
observe all of the terms, covenants and conditions required to be performed and
observed by Borrower under the Bloomberg Lease the Condominium Declaration or
the By-Laws, if the failure to perform or observe the same would have a Material
Adverse Affect; (ii) exercise, within ten (10) Business Days after a written
request by Lender, any right to request from Bloomberg under the Bloomberg
Lease, a certificate with respect to the status thereof; and (iii) not collect
any of the Rents, more than one (1) month in advance (except that Borrower may
collect such security deposits and last month's rents as are permitted by Legal
Requirements and are commercially reasonable in the prevailing market and
collect other charges in accordance with the terms of the Bloomberg Lease).

                           8.8.6    SUBORDINATION. All Modified Leases entered
into by Borrower after the date hereof shall by their express terms be subject
and subordinate to this Agreement and the Security Instrument (through a
subordination provision contained in such Lease or otherwise) and shall provide
that the Person holding any rights
<PAGE>

thereunder shall attorn to Lender or any other Person succeeding to the
interests of Lender upon the exercise of its remedies hereunder or any transfer
in lieu thereof on the terms set forth in Section 8.8.7.

                           8.8.7    ATTORNMENT. Subject to the terms of the
Bloomberg SNDA (which shall supercede any conflicting provisions of this
section), each Modified Lease entered into from and after the date hereof shall
provide that in the event of the enforcement by Lender of any remedy under this
Agreement or the Security Instrument, Bloomberg under such Lease shall, at the
option of Lender or of any other Person succeeding to the interest of Lender as
a result of such enforcement, attorn to Lender or to such Person and shall
recognize Lender or such successor in the interest as lessor under such Lease
without change in the provisions thereof; provided, however, Lender or such
successor in interest shall not: (1) be liable for any previous act or omission
of Borrower under the Bloomberg Lease except to the extent that such act or
omission first arises under the Bloomberg Lease from and after the date that
Successor-Landlord (as such term is defined in the Bloomberg Lease) succeeds to
the interest of Borrower; (2) be subject to any off-set, credit, defense or
counterclaim which shall have theretofore accrued to Bloomberg against Borrower;
(3) be bound by (a) any modification of the Bloomberg Lease entered into without
Lender's consent after Bloomberg has, subject to the terms of Section 6 of the
Bloomberg SNDA, received written notice of Lender's existence, address and
relation to Borrower, or (b) any previous prepayment of rent or additional rent
for more than one (1) month which Bloomberg might have paid to Borrower other
than as required by the terms of the Bloomberg Lease; (4) be bound by any
obligation to make any payments to Bloomberg except to the extent that such
obligation first arises under the Bloomberg Lease from and after the date that
Successor-Landlord succeeds to the interest of Borrower; and (5) be bound by any
obligation to perform any work or to make improvements to the Condominium Unit,
except for (i) repairs and maintenance pursuant to the provisions of Articles 4,
5 and 6 of the Bloomberg Lease, the need for which repairs and maintenance first
arises after the date upon which Lender is entitled to possession of the
Condominium Unit, (ii) repairs to the Condominium Unit or any part thereof as a
result of damage by fire or other casualty pursuant to Article 10 of the
Bloomberg Lease, but only to the extent that such repairs can be reasonably made
from the net proceeds of any insurance actually made available to Lender (with
the understanding, however, that (I) nothing contained in this clause (ii)
limits Bloomberg's rights to terminate the Bloomberg Lease after the occurrence
of a fire or other casualty under Section 10.1(B) of the Bloomberg Lease, and
(II) Lender shall have the right to avoid being so bound by Borrower's covenant
to rebuild the Landlord Restoration Items (as such term is defined in the
Bloomberg Lease) after the occurrence of a fire or other casualty (regardless of
the availability of insurance proceeds therefor) only by giving notice to
Bloomberg of the election of Lender not to so rebuild earlier than the later to
occur of (X) the date that Lender is required to give the Casualty Statement (as
such term is defined in the Bloomberg Lease) for such fire or other casualty to
Bloomberg, and (Y) the thirtieth (30th) day after the date that Lender succeeds
to the interest of Borrower under the Bloomberg Lease), and (iii) repairs to the
Condominium Unit as a result of a partial condemnation pursuant to Article 11 of
the Bloomberg Lease, but only to the extent that such repairs can be reasonably
made from the net proceeds of any award made available to Lender (with the
understanding that nothing contained in
<PAGE>

this clause (iii) shall limit Bloomberg's right to terminate the Bloomberg Lease
after the occurrence of a complete or partial condemnation under Section 11.1 of
the Bloomberg Lease). Borrower shall cause Bloomberg, upon the reasonable
request by Lender or such successor in interest, to execute and deliver an
instrument or instruments confirming such attornment.

                           8.8.8    NON-DISTURBANCE AGREEMENTS. Subject to the
terms of the Bloomberg SNDA, Lender shall enter into, and, if required by
applicable law to provide constructive notice or requested by Bloomberg, record
in the county where the subject Property is located, a subordination,
attornment, non-disturbance and estoppel agreement, in form and substance
substantially similar to the form attached hereto as EXHIBIT F (a
NON-DISTURBANCE AGREEMENT), with Bloomberg regarding a Modified Lease for which
Lender's prior written consent is required by this Section 8.8, within ten (10)
Business Days after written request therefor by Borrower, provided that, such
request is accompanied by an Officer's Certificate stating that such Lease
complies in all material respects with this Section 8.8. All reasonable costs
and expenses incurred by Lender in connection with the negotiation, preparation,
execution and delivery of any Non-Disturbance Agreement, including, without
limitation, reasonable attorneys' fees and disbursements, shall be paid by
Borrower (in advance, if requested by Lender).

                  IX.      DEFEASANCE

                  SECTION 9.1       DEFEASANCE.

                           9.1.1    At any time subsequent to the Defeasance
Lockout Period and prior to the Anticipated Repayment Date, provided that all of
the conditions set forth in Section 9.1.2 are complied with, Lender hereby
agrees that Borrower shall have the right to obtain a release of the Lien on the
Property upon at least 30 days prior written notice upon satisfaction of the
following (each such release, after satisfaction of the other provisions of this
Section 9.1, a DEFEASANCE):

                           (a)      the execution and delivery of a defeasance
         note (the DEFEASANCE NOTE), in form and substance reasonably acceptable
         to Lender, dated as of the date of the Defeasance (which must be as of
         a Payment Date), payable to Lender, in an amount equal to the
         Defeasance Collateral Requirement (which Defeasance Note Lender agrees
         to accept by assignment from any new lender to Borrower);

                           (b)      the execution and delivery of a security
         agreement (the DEFEASANCE SECURITY AGREEMENT), in form and substance
         reasonably acceptable to Lender, dated as of the date of the Defeasance
         (which must be as of a Payment Date), in favor of the Lender, pursuant
         to which the Lender is granted a perfected first priority security
         interest in the Defeasance Collateral (which Defeasance Security
         Agreement Lender agrees to accept by assignment from any new lender to
         Borrower);
<PAGE>

                           (c)      the execution and delivery of appropriate
         and reasonable agreements and/or instruments, each in form and
         substance reasonably acceptable to Lender, pursuant to which the
         obligations and liabilities of Borrower under the Defeasance Note and
         the Defeasance Security Agreement are assumed by a new entity which
         satisfies all of the Single Purpose Entity requirements, upon which
         execution and delivery Lender agrees to release Borrower from any and
         all liability under the Defeasance Note and Defeasance Security
         Agreement; and

                           (d)      delivery of a Rating Agency Confirmation.

                           9.1.2    Simultaneously with Lender's receipt of the
Defeasance Note and Defeasance Security Agreement from the new lender, Lender
shall transfer to the new lender or to Borrower's nominee the Note, the Security
Instrument and the Assignment of Leases, and shall release or terminate the
other Loan Documents (other than the Environmental Indemnity).

                           9.1.3    With respect to a Defeasance pursuant to
Section 9.1.1 hereof, Borrower shall deposit the Defeasance Collateral in
accordance with Section 9.1.5 below to the Defeasance Collateral Account. In no
event shall the deliverance of Defeasance Collateral cause Borrower to be
released from its obligations to make payments of principal and interest on the
Note until Defeasance shall have occurred. Defeasance shall be permitted at such
time as all of the following events shall have occurred:

                           (a)      the Defeasance Collateral Account shall have
         been established pursuant to Section 9.1.5 hereof;

                           (b)      Borrower shall have delivered or caused to
         have been delivered to Lender the Defeasance Collateral for deposit
         into the Defeasance Collateral Account such that it will satisfy the
         Defeasance Collateral Requirement at the time of delivery and all such
         Defeasance Collateral, if in registered form, shall be registered in
         the name of the Borrower for the benefit of Lender or its nominee (and,
         if registered in nominee name endorsed to Lender or in blank) and, if
         issued in book-entry form, the name of Lender or its nominee shall
         appear as the owner of such securities on the books of the Federal
         Reserve Bank or other party maintaining such book-entry system;

                           (c)      Borrower shall have granted or caused to
         have been granted to Lender a valid perfected first priority security
         interest in the Defeasance Collateral and all proceeds thereof;

                           (d)      Borrower shall have delivered or caused to
         be delivered to Lender an Officers' Certificate, dated as of the date
         of such delivery (x) that sets forth the aggregate face amount or
         unpaid principal amount, interest rate and maturity of all such
         Defeasance Collateral, a copy of the transaction journal, if any, or
         such other notification, if any, published by or on behalf of the
         Federal Reserve Bank or other party maintaining a book-entry system
         advising that
<PAGE>

         Lender or its nominee is the owner of such securities issued in
         book-entry form, and (y) that states that:

                                    (i)      Borrower owns the Defeasance
                  Collateral being delivered to Lender free and clear of any and
                  all Liens, security interests or other encumbrances (other
                  than the Defeasance Security Agreement), and has not assigned
                  any interest or participation therein (or, if any such
                  interest or participation has been assigned, it has been
                  released), and Borrower has full power and authority to pledge
                  such Defeasance Collateral to Lender;

                                    (ii)     such Defeasance Collateral consists
                  solely of Defeasance Eligible Investments;

                                    (iii)    such Defeasance Collateral
                  satisfies the Defeasance Collateral Requirement, determined as
                  of the date of delivery; and

                                    (iv)     the information set forth in the
                  schedule attached to such Officer's Certificate is correct and
                  complete in all material respects as of the date of delivery
                  (such schedule, which shall be attached to and form a part of
                  such Officer's Certificate, shall demonstrate satisfaction of
                  the requirement set forth in clause (ii) above, in a form
                  reasonably acceptable to Lender).

                           (e)      Borrower shall have delivered or caused to
         be delivered to Lender a Rating Agency Confirmation and such other
         documents and certificates as Lender may reasonably request, including
         Opinions of Counsel, in connection with demonstrating that Borrower has
         satisfied the provisions of this Section 9.1.3(e), including but not
         limited to an Opinion of Counsel stating, among other things, that (x)
         Lender has a perfected first priority security interest in the
         Defeasance Collateral and that the Defeasance Security Agreement is
         enforceable in accordance with its terms and (y) that any trust formed
         as a REMIC pursuant to a securitization will not fail to maintain its
         status as a REMIC as a result of such defeasance.

                           (f)      Borrower shall have delivered to Lender a
         certificate of a "big four" or other public accounting firm reasonably
         acceptable to Lender certifying that the Defeasance Collateral will
         generate monthly amounts which satisfy the Defeasance Collateral
         Requirement.

                           9.1.4    For purposes of determining whether
sufficient amounts of Defeasance Collateral are on deposit in the Defeasance
Collateral Account, there shall be included only payments of principal and
predetermined and certain income thereon (as reasonably determined by Lender and
agreed to by Borrower without regard to any reinvestment of such amounts) that
will occur on a stated date for a stated payment on or before the dates when
such amounts may be required to be applied to pay the principal and interest
when due on the Note (and/or any substitute notes, as applicable) as of the
<PAGE>

Anticipated Repayment Date, together with the outstanding principal balance of
the Note (and/or any substitute notes, as applicable) as of the Anticipated
Repayment Date.

                           9.1.5    On or before the date on which Borrower
delivers Defeasance Collateral to Lender pursuant to Section 9.1.3(b) hereof,
Borrower shall open at any Approved Bank (or other bank subject to the next
sentence hereof) at the time and acting as custodian for Lender, a defeasance
collateral account (the Defeasance Collateral Account) which shall at all times
be an Eligible Account, in which Borrower shall grant to Lender or reconfirm the
grant to Lender of a security interest. The Defeasance Collateral Account shall
contain (i) all Defeasance Collateral delivered by Borrower pursuant to Section
9.1.3(b) hereof, (ii) all payments received on Defeasance Collateral held in the
Defeasance Collateral Account and (iii) all income or other gains from
investment of moneys or other property deposited in the Defeasance Collateral
Account. All such amounts, including all income from the investment or
reinvestment thereof, shall be held by Lender, subject to withdrawal by Lender
for the purposes set forth in Section 9.1.6. Borrower shall be the owner of the
Defeasance Collateral Account and shall report all income accrued on Defeasance
Collateral for federal, state and local income tax purposes in its income tax
return.

                           9.1.6    Lender shall withdraw, draw on or collect
and apply the amounts that are on deposit in the Defeasance Collateral Account
to pay when due the principal and all installments of interest and principal on
the Defeasance Note. Funds and other property in the Defeasance Collateral
Account shall not be commingled with any other monies or property of Borrower or
any Affiliate of Borrower. Lender shall not in any way be held liable by reason
of any insufficiency in the Defeasance Collateral Account except to the extent
caused by the gross negligence or willful misconduct of Lender.

                           9.1.7    Borrower and Lender shall enter into any
appropriate amendments to the Loan Documents necessitated by a Defeasance of the
Loan, such amendments to be in form and substance reasonably acceptable to both
Borrower and Lender.

                  X.       MAINTENANCE OF PROPERTY; ALTERATIONS

                  SECTION 10.1       MAINTENANCE OF PROPERTY. Borrower shall
keep and maintain, or cause to be kept and maintained, the Property and every
part thereof in good condition and repair, subject to ordinary wear and tear,
and, subject to Excusable Delays and the provisions of this Agreement with
respect to damage or destruction caused by casualty events or Takings, shall not
permit or commit any waste, impairment, or deterioration of any portion of the
Property in any material respect. Borrower further covenants to do all other
acts which from the character or use of the Property may be reasonably necessary
to protect the security hereof, the specific enumerations herein not excluding
the general. Borrower shall not remove or demolish any Improvement on the
Property except as the same may be necessary in connection with an Alteration or
a restoration in connection with a Taking or casualty, or as otherwise permitted
herein, in each case in accordance with the terms and conditions hereof.
<PAGE>

                  SECTION 10.2      CONDITIONS TO ALTERATION. Provided that no
Event of Default shall have occurred and be continuing hereunder, Borrower shall
have the right, without Lender's consent, to undertake any alteration,
improvement, demolition or removal of the Property or any portion thereof (any
such alteration, improvement, demolition or removal, an ALTERATION) so long as
(i) Borrower provides Lender with prior written notice of any Material
Alteration, and (ii) such Alteration is undertaken in accordance with the
applicable provisions of this Agreement and the other Loan Documents, is not
prohibited by the Condominium Declaration, the By-Laws or any of the Bloomberg
Lease (except subleases) and shall not, upon completion (giving credit to rent
and other charges attributable to the Modified Leases executed upon such
completion), have a Material Adverse Effect on the value, use or operation of
the Property taken as a whole or otherwise. Any Material Alteration shall be
conducted under the supervision of an Independent Architect and, in connection
with any Material Alteration, Borrower shall deliver to Lender, for information
purposes only and not for approval by Lender, detailed plans and specifications
and cost estimates therefor, prepared by such Independent Architect, as well as
an Officer's Certificate stating whether such Alteration will involve an
estimated cost of not more than the Threshold Amount for Alterations at the
Property. Such plans and specifications may be revised at any time and from time
to time by such Independent Architect provided that material revisions of such
plans and specifications are filed with Lender, for information purposes only.
All work done in connection with any Alteration shall be performed with due
diligence in a good and workmanlike manner, all materials used in connection
with any Alteration shall not be less than the standard of quality of the
materials currently used at the Property and all materials used shall be in
accordance with all applicable material Legal Requirements and Insurance
Requirements. Nothing contained in this Section 10.2 shall limit the rights of
Bloomberg under the Bloomberg Lease with respect to alterations.

                  SECTION 10.3      COSTS OF ALTERATION. Notwithstanding
anything to the contrary contained in this Article X, no Material Alteration
(exclusive of Alterations being directly paid for by Bloomberg at the Property)
shall be performed by or on behalf of Borrower unless Borrower shall have
delivered to Lender Cash and Cash Equivalents and/or a Letter of Credit as
security in an amount not less than the estimated cost of the Material
Alteration which is in excess of the Threshold Amount (as set forth in the
Independent Architect's written estimate referred to above). Borrower and Lender
acknowledge that such security (i) will be held by the Cash Management Bank in
the Alterations Reserve Account and (ii) disbursed as hereinafter provided in
this Section 10.3. In addition to payment or reimbursement from time to time of
Borrower's expenses incurred in connection with any Material Alteration, the
amount of such security shall be reduced on any given date to the Independent
Architect's written estimate of the cost to complete the Material Alteration
(including any retainages), free and clear of Liens, other than Permitted
Encumbrances. Costs which are subject to retainage (which in no event shall be
less than 5% in the aggregate) shall be treated as due and payable and unpaid
from the date they would be due and payable but for their characterization as
subject to retainage. In the event that any Material Alteration shall be made in
conjunction with any restoration with respect to which Borrower shall be
entitled to withdraw Proceeds pursuant to Section 6.2, the amount of the Cash
and Cash Equivalents and/or Letter of Credit to be furnished pursuant hereto
need not exceed the aggregate cost of such
<PAGE>

restoration and such Material Alteration (as estimated by the Independent
Architect), less the sum of the amount of any Proceeds which Borrower may be
entitled to withdraw pursuant to 6.2 and which are held by Lender in accordance
with Section 6.2. Payment or reimbursement of Borrower's expenses incurred with
respect to any Material Alteration shall be accomplished upon the terms and
conditions specified in Section 6.2. At any time after substantial completion of
any Material Alteration in respect of which Cash and Cash Equivalents and/or a
Letter of Credit was deposited pursuant hereto, the whole balance of any Cash
and Cash Equivalents so deposited by Lender and then remaining on deposit
(together with earnings thereon), as well as all retainages, may be withdrawn by
Borrower and shall be paid by Lender to Borrower, and any other Cash and Cash
Equivalents and/or a Letter of Credit so deposited or delivered shall, to the
extent it has not been called upon, reduced or theretofore released, be released
to Borrower, within ten (10) days after receipt by Lender of an application for
such withdrawal and/or release together with an Officer's Certificate, and
signed also (as to the following clause (i)) by the Independent Architect,
setting forth in substance as follows:

                           (a)      that the Material Alteration in respect of
         which such Cash and Cash Equivalents and/or a Letter of Credit was
         deposited has been substantially completed in all material respects
         substantially in accordance with any plans and specifications therefor
         previously filed with Lender under Section 10.2 and that, if
         applicable, a certificate of occupancy has been issued with respect to
         such Material Alteration by the relevant Governmental Authority(ies)
         or, if not applicable, that a certificate of occupancy is not required;
         and

                           (b)      that to the knowledge of the certifying
         Person all amounts which Borrower is or may become liable to pay in
         respect of such Material Alteration through the date of the
         certification have been paid in full or adequately provided for or are
         being contested in accordance with Section 7.3 and that lien waivers
         have been obtained from the general contractor and major subcontractors
         performing such Material Alterations (or such waivers are not customary
         and reasonably obtainable by prudent managers in the area where the
         Property is located).

Nothing contained in this Section 10.3 shall limit the rights of Bloomberg under
the Bloomberg Lease with respect to alterations.

                  XI.      BOOKS AND RECORDS, FINANCIAL STATEMENTS, REPORTS AND
OTHER INFORMATION, LOW DSCR PERIOD

                  SECTION 11.1      BOOKS AND RECORDS. Borrower shall keep and
maintain on a fiscal year basis proper books and records separate from any other
Person, in which accurate and complete entries shall be made of all dealings or
transactions of or in relation to the Note, the Property and the business and
affairs of Borrower relating to the Property which shall reflect all items of
income and expense in connection with the operation on an individual basis of
the Property and in connection with any services,
<PAGE>

equipment or furnishings provided in connection with the operation of the
Property, in accordance with GAAP. Lender and its authorized representatives
shall have the right at reasonable times and upon reasonable notice to examine
the books and records of Borrower at Borrower's or its Affiliate's offices
relating to the operation of the Property and to make such copies or extracts
thereof as Lender may reasonably require.

                  SECTION 11.2      FINANCIAL STATEMENTS.

                           11.2.1   QUARTERLY REPORTS. Not later than forty-five
(45) days following the end of each calendar quarter, Borrower shall deliver to
Lender unaudited financial statements, internally prepared on accrual basis
including a balance sheet and profit and loss statement as of the end of such
quarter and for the corresponding quarter of the previous year, and a statement
of revenues and expenses for the year to date, a statement of Net Operating
Income for such quarter on a calendar month basis, and a comparison of the year
to date results with (i) the results for the same period of the previous year,
(ii) the results that had been projected by Borrower for such period and (iii)
the Annual Budget for such period and the Fiscal Year. Such statements for each
quarter shall be accompanied by an Officer's Certificate certifying to the best
of the signer's knowledge, (A) that such statements fairly represent the
financial condition and results of operations of Borrower, (B) that as of the
date of such Officer's Certificate, no Event of Default exists under this
Agreement, the Note or any other Loan Document or, if so, specifying the nature
and status of each such Event of Default and the action then being taken by
Borrower or proposed to be taken to remedy such Event of Default, (C) that as of
the date of each Officer's Certificate, no litigation exists involving Borrower
or the Property in which the amount involved is $500,000 (in the aggregate) or
more or in which all or substantially all of the potential liability is not
covered by insurance, or, if so, specifying such litigation and the actions
being taking in relation thereto and (D) the amount by which actual Operating
Expenses were greater than or less than the Operating Expenses anticipated in
the applicable Annual Budget. Such financial statements shall contain such other
information as shall be reasonably requested by Lender for purposes of
calculations to be made by Lender pursuant to the terms hereof.

                           11.2.2   ANNUAL REPORTS. Not later than one hundred
and twenty (120) days after the end of each Fiscal Year of Borrower's
operations, Borrower shall deliver to Lender audited financial statements (such
audited financial statements are collectively referred to herein as the ANNUAL
REPORTS) certified by an Independent Accountant in accordance with GAAP,
covering the Property, including a balance sheet as of the end of such year and
a statement of revenues and expenses for such year, and stating in comparative
form the figures for the previous fiscal year and the Annual Budget for such
fiscal year, as well as the supplemental schedule of net income or loss
presenting the net income or loss for the Property and occupancy statistics for
the Property. Together with the annual reports, Borrower shall furnish copies of
a statement of Net Operating Income for the year thereof and copies of all
federal income tax returns to be filed. Such annual financial statements shall
also be accompanied by an Officer's Certificate in the form required pursuant to
Section 11.2.1.

                           11.2.3   RESERVED
<PAGE>

                           11.2.4   CAPITAL EXPENDITURES SUMMARIES. Borrower
shall, within 120 days after the end of each calendar year during the term of
the Note, deliver to Lender an annual summary of any and all capital
expenditures made at the Property by Borrower during the prior twelve (12) month
period.

                           11.2.5   MANAGEMENT AGREEMENT. Borrower shall deliver
to Lender, within ten (10) Business Days of the receipt thereof by Borrower, a
copy of all reports prepared by Manager pursuant to the Management Agreement,
including, without limitation, the Annual Budget and any inspection reports.

                           11.2.6   ANNUAL BUDGET. Borrower shall deliver to
Lender the proposed Annual Budget for Lender's approval, not to be unreasonably
withheld, delayed or conditioned at least thirty (30) days prior the end of each
Fiscal Year. Neither Borrower nor Manager shall change or modify the Annual
Budget that has been approved by Lender without the prior written consent of
Lender. If, after ten (10) Business Day's following Lender's receipt of such
Budget Lender has not either approved or disapproved the proposed Budget,
Borrower shall deliver a second notice to Lender which notice must state on the
outside envelope in which such Budget is delivered in bold, large letters (no
less than 15 font) the following: NOTICE: YOU WILL BE DEEMED TO HAVE CONSENTED
TO THE DOCUMENT ENCLOSED HEREIN IF NOT DISAPPROVED WITHIN TEN (10) BUSINESS DAYS
OF RECEIPT. Lender's failure to approve or disapprove such Budget within ten
(10) Business Days after Lender's receipt of the second notice shall be deemed
to constitute Lender's approval thereof.

                           11.2.7   BLOOMBERG LEASE INFORMATION.

                           (a)      Promptly upon receipt or delivery thereof
         Borrower shall deliver to Lender true, correct and complete copies of
         all materials, reports and information which is material in nature and
         which are delivered by Bloomberg to Borrower, other than as restricted
         by confidentiality agreements entered into by Borrower and delivered to
         Lender.

                           (b)      Not later than forty-five (45) days after
         the end of each calendar quarter of Borrower's operations, Borrower
         will deliver to Lender a statement from Borrower complying with the
         provisions of Section 7.4 of the Bloomberg Lease

                           11.2.8   OTHER INFORMATION. Borrower will, promptly
after written request by Lender, furnish or cause to be furnished to Lender, in
such manner and in such detail as may be reasonably requested by Lender, such
reasonable additional information in Borrower's or its Affiliate's possession
and as may be reasonably requested by Lender with respect to the Property.

                           11.2.9   LOW DSCR PERIOD. Commencing on December 1,
2004 and after the end of each calendar quarter thereafter, Lender will perform
a test of the Debt Service Coverage Ratio to determine whether a Low DSCR
Trigger Event has occurred (it being agreed that (i) all determinations as to
whether a Low DSCR Trigger
<PAGE>

Event and resulting Low DSCR Period has occurred and is continuing shall be made
by Lender based on the financial information delivered by Borrower pursuant to
Section 11.2 hereof and/or any other information available to Lender pursuant to
the terms of the Loan Documents and (ii) the first test performed by Lender
after December 1, 2004 shall be based on an annualized basis in accordance with
the definition of "Debt Service Coverage Ratio" set forth herein and based on
the financial information delivered by Borrower pursuant to Section 11.2 hereof
and/or any other information available to Lender pursuant to the terms of the
Loan Documents).

                  XII.     ENVIRONMENTAL MATTERS

                  SECTION 12.1      REPRESENTATIONS. Borrower hereby represents
and warrants that except as set forth in the Phase I Environmental Assessment
Report, dated February 4, 2004, prepared by National Assessment Corporation
previously delivered to Lender (the ENVIRONMENTAL REPORTS), (i) Borrower has not
engaged in or knowingly permitted any operations or activities upon, or any use
or occupancy of the Property, or any portion thereof, for the purpose of or in
any way involving the handling, manufacture, treatment, storage, use,
generation, release, discharge, refining, dumping or disposal of any Hazardous
Substances on, under, in or about the Property, or transported any Hazardous
Substances to, from or across the Property, except in all cases in material
compliance with applicable Environmental Laws and in the course of ordinary
business operations at the Property; (ii) to the best of Borrower's knowledge,
Bloomberg, other occupant or user of the Property, nor any other person, has
engaged in or permitted any operations or activities upon, or any use or
occupancy of the Property, or any portion thereof, for the purpose of or in any
material way involving the handling, manufacture, treatment, storage, use,
generation, release, discharge, refining, dumping or disposal of any Hazardous
Substances on, in or about the Property, or transported any Hazardous Substances
to, from or across the Property, except in all cases in material compliance with
applicable Environmental Laws and in the course of ordinary business operations
at the Property; (iii) to the best of Borrower's knowledge, no Hazardous
Substances are presently constructed, deposited, stored, or otherwise located
on, under, in or about the Property except in material compliance with
applicable Environmental Laws; (iv) to the best of Borrower's knowledge, no
Hazardous Substances have migrated from the Property upon or beneath other
properties which would reasonably be expected to result in material liability
for Borrower; and (v) to Borrower's knowledge, no Hazardous Substances have
migrated or threaten to migrate from other properties upon, about or beneath the
Property which would reasonably be expected to result in material liability for
Borrower.

                  SECTION 12.2      COVENANTS. COMPLIANCE WITH ENVIRONMENTAL
LAWS. Subject to Borrower's right to contest under Section 7.3, Borrower
covenants and agrees with Lender that Borrower shall comply, in all material
respects, with all applicable Environmental Laws during the term of the Loan. If
at any time during the continuance of the Lien of the Security Instrument or
this Agreement, a Governmental Authority having jurisdiction over the Property
requires remedial action to correct the presence of Hazardous Materials in or on
the Property (an ENVIRONMENTAL EVENT), Borrower shall deliver prompt notice of
the occurrence of such Environmental Event to Lender. Within
<PAGE>

thirty (30) days after Borrower has knowledge of the occurrence of an
Environmental Event, Borrower shall deliver to Lender an Officer's Certificate
(an ENVIRONMENTAL CERTIFICATE) explaining the Environmental Event in reasonable
detail and setting forth the proposed remedial action, if any. Borrower shall
promptly provide Lender with copies of all notices which allege or identify any
actual or potential violation or noncompliance received by or prepared by or for
Borrower in connection with any Environmental Law. For purposes of this
paragraph, the term "notice" shall mean any written summons which could
reasonably be excepted to give rise to any environmental liability to Borrower
in excess of $10,000, citation, directive, order, claim, pleading, letter,
application, filing, report, findings, declarations or other written materials
pertinent to compliance of the Property and Borrower with applicable
Environmental Laws. If the Security Instrument is foreclosed, Borrower shall
deliver the Property in material compliance with all applicable Environmental
Laws.

                  SECTION 12.3      ENVIRONMENTAL REPORTS. Upon the occurrence
of an Environmental Event or during the continuance of any Event of Default,
Lender shall have the right to have its consultants perform a comprehensive
environmental audit of the Property. Such audit shall be conducted by an
Environmental Consultant chosen by Borrower (so long as such consultant is
reasonably acceptable to Lender) and may include a visual survey, a record
review, an area reconnaissance assessing the presence of hazardous or toxic
waste or substances, PCBs or storage tanks at the Property, an asbestos survey
of the Property, which may include random sampling of the improvements and air
quality testing, and such further site assessments as reasonably recommended by
such Environmental Consultant as a result of such audit and which Lender may
reasonably require due to the results obtained from the foregoing. Borrower
grants Lender, its agents, consultants and contractors the right to enter the
Property as reasonable or appropriate for the circumstances and subject to the
rights of Bloomberg under the Bloomberg Lease, if any, for the purposes of
performing such studies and the reasonable cost of such studies shall be due and
payable by Borrower to Lender within five (5) Business Days of demand and shall
be secured by the Lien of the Security Instrument. Lender shall not unreasonably
interfere with, and Lender shall direct the Environmental Consultant to use its
commercially reasonable efforts not to hinder, Borrower's or Bloomberg's, other
occupant's or Manager's operations upon the Property when conducting such audit,
sampling or inspections. By undertaking any of the measures identified in and
pursuant to this Section 12.3, Lender shall not be deemed to be exercising any
control over the operations of Borrower or the handling of any environmental
matter or hazardous wastes or substances of Borrower for purposes of incurring
or being subject to liability therefor.

                  SECTION 12.4      ENVIRONMENTAL INDEMNIFICATION. Borrower
shall protect, indemnify, save, defend, and hold harmless the Indemnified
Parties from and against any and all liability, loss, damage, actions, causes of
action, costs or expenses whatsoever (including reasonable attorneys' fees and
expenses) and any and all claims, suits and judgments which any Indemnified
Party may suffer, as a result of or with respect to: (a) any Environmental Claim
relating to or arising from the Property; (b) the violation of any Environmental
Law in connection with the Property; (c) any release, spill, or the presence of
any Hazardous Substances affecting the Property; and (d) the presence at, in, on
or
<PAGE>

under, or the release, escape, seepage, leakage, discharge or migration at or
from, the Property of any Hazardous Substances, whether or not such condition
was known or unknown to Borrower; provided that, in each case, Borrower shall be
relieved of its obligation under this subsection if any of the matters referred
to in clauses (a) through (d) above did not occur (and were not discovered)
prior to (1) the foreclosure of the Security Instrument, (2) the delivery by
Borrower to Lender or its designee of a deed-in-lieu of foreclosure with respect
to the Property, (3) Lender's or its designee's taking possession and control of
the Property after the occurrence of an Event of Default hereunder or (4) the
satisfaction in full of the Obligations and the discharge of the Indebtedness.
If any such action or other proceeding shall be brought against Lender, upon
written notice from Borrower to Lender (given reasonably promptly following
Lender's notice to Borrower of such action or proceeding), Borrower shall be
entitled to assume the defense thereof, at Borrower's expense, with counsel
reasonably acceptable to Lender; provided, however, Lender may, at its own
expense, retain separate counsel to participate in such defense, but such
participation shall not be deemed to give Lender a right to control such
defense, which right Borrower expressly retains. Notwithstanding the foregoing,
each Indemnified Party shall have the right to employ separate counsel at
Borrower's expense if, in the reasonable opinion of legal counsel, a conflict or
potential conflict exists between the Indemnified Party and Borrower that would
make such separate representation advisable. Notwithstanding anything contained
herein, Borrower shall have no obligation to indemnify an Indemnified Party for
damage or loss resulting from such Indemnified Party's gross negligence or
willful misconduct.

                  SECTION 12.5      RECOURSE NATURE OF CERTAIN INDEMNIFICATIONS.
Notwithstanding anything to the contrary provided in this Agreement or in any
other Loan Document, the indemnification provided in Section 12.4 shall be fully
recourse to Borrower and shall be independent of, and shall survive for a period
of five (5) years after the first to occur of: (i) the discharge of the
Indebtedness, the release of the Lien created by the Security Instrument, and/or
(ii) the conveyance of title to the Property to Lender or any purchaser or
designee in connection with a foreclosure of the Security Instrument or
conveyance in lieu of foreclosure.

                  XIII.    INTENTIONALLY OMITTED

                  XIV.     SECURITIZATION AND PARTICIPATION

                  SECTION 14.1      SALE OF NOTE AND SECURITIZATION. At the
request of Lender and, to the extent not already required to be provided by
Borrower under this Agreement, Borrower shall, at Borrower's sole cost and
expense, use reasonable efforts to satisfy the market standards which may be
reasonably required in the marketplace or by the Rating Agencies in connection
with the sale of the Notes or participation therein as part of any
securitization (including all in any series of securitizations of any substitute
notes such sale and/or securitization, the SECURITIZATION) of rated single or
multi-class securities (the SECURITIES) secured by or evidencing ownership
interests in the Notes and this Agreement (all such sales and/or
securitizations, including, without limitation where a "REMIC" election is made,
the SECURITIZATION), including using reasonable efforts to do (or cause to be
done) the following (but Borrower shall not in any event be required to incur,
suffer
<PAGE>

or accept (except to a de minimis extent)) any lesser rights or greater
obligations than as currently set forth in the Loan Documents (except, after an
event of Default any increase in the weighted average interest rate of the Notes
that may result after certain prepayments of the Loan have been made and applied
in accordance with the terms hereof). Notwithstanding anything contained in the
Loan Documents, the Loan shall at all times be serviced by one servicer;

                           14.1.1   PROVIDED INFORMATION. (i) Provide, at
Borrower's sole cost and expense, such non-confidential financial and other
information (but not projections) with respect to the Property and Borrower and
Manager to the extent such information is reasonably available to Borrower or
Manager, (ii) provide, at Borrower's sole expense, business plans (but not
projections) and budgets relating to the Property, to the extent prepared by the
Borrower or Manager and (iii) cooperate with the holder of the Note (and its
representatives) in obtaining, at the sole expense of Borrower, such site
inspection, appraisals, market studies, environmental reviews and reports,
engineering reports and other due diligence investigations of the Property, as
may be reasonably requested by the holder of the Note or reasonably requested by
the Rating Agencies (all information provided pursuant to this Section 14.1.1
together with all other information heretofore provided to Lender in connection
with the Loan, as such may be updated, at Borrower's request, in connection with
a Securitization, or hereafter provided to Lender in connection with the Loan or
a Securitization, being herein collectively called the PROVIDED INFORMATION);

                           14.1.2   UPDATES TO OPINIONS OF COUNSEL. Use
reasonable efforts to cause to be rendered, at Borrower's sole expense, such
customary updates or customary modifications to the Opinions of Counsel
delivered at the closing of the Loan as may be reasonably requested by Lender or
the Rating Agencies in connection with the Securitization. Borrower's failure to
use reasonable efforts to deliver or cause to be delivered the opinion updates
or modifications required hereby within twenty (20) Business Days after written
request therefor shall constitute an "Event of Default" hereunder. To the extent
any of the foregoing Opinions of Counsel were required to be delivered in
connection with the closing of the Loan, any update thereof shall be without
cost to Borrower. Any such Opinions of Counsel that Borrower is reasonably
required to cause to be delivered in connection with a Securitization other than
those delivered at the original Loan closing, shall be delivered at Borrower's
expense (it being agreed that Borrower shall not be obligated to deliver an
Opinion of Counsel with respect to "10b-5", "true sale", "no fraudulent
conveyance" and "REMIC" matters); and

                           14.1.3   MODIFICATIONS TO LOAN DOCUMENTS. Without
cost to the Borrower (except for Borrower's counsel and administrative costs),
execute such amendments to the Security Instrument and Loan Documents as may be
reasonably requested by Lender or the Rating Agencies in order to achieve the
required rating or to effect the Securitization (including, without limitation,
modifying the Payment Date to any of the first ten days of a calendar month) and
the Interest Period, as defined in the Note, to a date other than as originally
set forth in the Note), provided, however, that nothing contained in this
Section 14.1.3 shall result in any economic or other material adverse change in
the transaction contemplated by the Security Instrument or the Loan
<PAGE>

Documents (unless Borrower is made whole by the holder of the Note), or result
in any operational changes that are unduly burdensome to the Property or
Borrower.

                  SECTION 14.2      COOPERATION WITH RATING AGENCIES. Borrower
shall, at its sole expense, (i) at Lender's request, meet with representatives
of such Rating Agencies at reasonable times to discuss the business and
operations of the Property, and (ii) cooperate with the reasonable requests of
the Rating Agencies in connection with the Property.

                  SECTION 14.3      SECURITIZATION FINANCIAL STATEMENTS.
Borrower acknowledges that all such financial information delivered by Borrower
to Lender pursuant to Article XI may, at Lender's option, be delivered to the
Rating Agencies.

                  SECTION 14.4      SECURITIZATION INDEMNIFICATION.

                           14.4.1   DISCLOSURE DOCUMENTS. Borrower understands
that certain of the Provided Information may be included in disclosure documents
in connection with the Securitization, including a prospectus or private
placement memorandum or a public registration statement (each, a 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),
or provided or made available to investors or prospective investors in the
Securities, the Rating Agencies, and service providers relating to the
Securitization. In the event that the Disclosure Document is required to be
revised prior to the sale of all Securities, upon request and subject to Section
14.1.4, Borrower will reasonably cooperate with the holder of the Note in
updating the Provided Information for inclusion or summary in the Disclosure
Document by providing all current information in Borrower's possession
pertaining to Borrower and the Property reasonably requested by Lender.

                           14.4.2   INDEMNIFICATION CERTIFICATE. In connection
with each of (x) a preliminary and a private placement memorandum, or (y) a
preliminary and final prospectus, as applicable, Borrower agrees to provide, at
Lender's reasonable request, an indemnification certificate:

                           (a)      certifying that Borrower has carefully
         examined those portions of such memorandum or prospectus, as
         applicable, reasonably designated in writing by Lender for Borrower's
         review pertaining to Borrower, the Property, the Loan and/or the
         Provided Information, and insofar as such sections or portions thereof
         specifically pertain to Borrower, the Property, the Provided
         Information or the Loan, (the RELEVANT PORTIONS), the Relevant Portions
         do not (except to the extent specified by Borrower if Borrower does not
         agree with the statements therein), as of the date of such certificate,
         to Borrower's actual knowledge, 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; and
<PAGE>

                           (b)      indemnifying Lender and the Affiliates of
         Deutsche Bank Securities, Inc. (collectively, DBS) that have prepared
         and/or filed the Disclosure Document relating to the Securitization,
         each of its directors, each of its officers who have signed the
         Disclosure Document and each person or entity who controls DBS within
         the meaning of Section 15 of the Securities Act or Section 20 of the
         Exchange Act (collectively, the DBS GROUP), and DBS, together with the
         DBS Group, each of their respective directors and each person who
         controls DBS or the DBS Group, within the meaning of Section 15 of the
         Securities Act and Section 20 of the Exchange Act (collectively, the
         UNDERWRITER GROUP) for any actual, out-of-pocket losses, third party
         claims, damages (excluding lost profits, diminution in value and other
         consequential damages) or liabilities arising out of third party claims
         (the LIABILITIES) to which any member of the Underwriter Group may
         become subject to the extent such Liabilities arise out of or are based
         upon any untrue statement of any material fact contained in the
         Relevant Portions and in the Provided Information or arise out of or
         are based upon the omission by Borrower to state therein a material
         fact required to be stated in the Relevant Portions in order to make
         the statements in the Relevant Portions or in light of the
         circumstances under which they were made, not misleading (except that
         (x) Borrower's obligation to indemnify in respect of any information
         contained in a preliminary or final registration statement, private
         placement memorandum or preliminary or final prospectus that is derived
         in part from information provided by Borrower and in part from
         information provided by others unrelated to or not employed by Borrower
         shall be limited to any untrue statement or omission of material fact
         therein known to Borrower that results directly from an error in any
         information provided (or which should have been provided as required by
         Section 14.4.2(a) hereof) by Borrower which Borrower has been given the
         reasonable opportunity to examine and reasonably and promptly approve
         and (y) Borrower shall have no responsibility for the failure of any
         member of the Underwriter Group to accurately transcribe written
         information supplied by Borrower or to include any portions of the
         Provided Information).

                           (c)      Borrower's liability under clauses (a) and
         (b) above shall be limited to Liabilities arising out of or based upon
         any such untrue statement or omission by Borrower made therein in
         reliance upon and in conformity with information delivered to Lender
         and prepared by Borrower, Manager, Guarantor or any Affiliate of any
         such Person in connection with the preparation of those portions of the
         registration statement, memorandum or prospectus pertaining to
         Borrower, the Property or the Loan, including financial statements of
         Borrower and operating statements with respect to the Property. This
         indemnity agreement will be in addition to any liability which Borrower
         may otherwise have.

                           (d)      Promptly after receipt by an indemnified
         party under this Article XIV 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 Article XIV,
         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
<PAGE>

         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
         reasonably satisfactory to such indemnified party. After notice from
         the indemnifying party to such indemnified party under this Article XIV
         of its assumption of such defense, the indemnifying party shall not be
         liable for any legal or other expenses subsequently incurred by such
         indemnified party in connection with the defense thereof; 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 in conflict with 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 or
         parties at the expense of the indemnifying party. The indemnifying
         party shall not be liable for the expenses of separate counsel unless
         an indemnified party shall have reasonably concluded that there may be
         legal defenses available to it that are different from or in conflict
         with those available to another indemnified party.

                           (e)      In order to provide for just and equitable
         contribution in circumstances in which the indemnity provided for in
         this Article XIV is for any reason held to be unenforceable by an
         indemnified party in respect of any actual, out-of-pocket losses,
         claims, damages or liabilities relating to third party claims (or
         action in respect thereof) referred to therein which would otherwise be
         indemnifiable under this Article XIV, the indemnifying party shall
         contribute to the amount paid or payable by the indemnified party as a
         result of such actual, out of pocket losses, third party claims,
         damages or liabilities (or action in respect thereof) (but excluding
         damages for loss profits, diminution in value of the Property and
         consequential damages); 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 for Liabilities
         arising therefrom 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) the DBS Group's and Borrower's relative knowledge and
         access to information concerning the matter with respect to which claim
         was asserted; (ii) the opportunity to correct and prevent any statement
         or omission; (iii) the limited responsibilities and obligations of
         Borrower as specified herein; and (iv) any other equitable
         considerations appropriate in the circumstances.

                  The Borrower's failure to deliver the Indemnification
Certificate within fifteen (15) Business Days of Lender's request therefor,
shall be a material Event of
<PAGE>

Default under this Agreement, entitling Lender to exercise all of its rights and
remedies permitted under the Loan Documents.

                  SECTION 14.5      CERTAIN INDEMNIFICATIONS. Notwithstanding
anything to the contrary provided in this Agreement or in any other Loan
Document, the indemnification provided in Article XIV shall be fully recourse to
Borrower but shall be limited to Borrower's interest in the Property (and any
Proceeds and Net Operating Income relating thereto).

                  SECTION 14.6      RETENTION OF SERVICER. Lender reserves the
right, at Lender's sole cost and expense, to retain the Servicer. Borrower shall
pay any reasonable fees and expenses of the Servicer and any reasonable third
party fees and expenses (including, without limitation, reasonable attorneys
fees and disbursements) solely in connection with a prepayment, release of the
Property, or assumption of the Loan as part of Borrower's monthly Debt Service
payment next due.

                  XV.      ASSIGNMENTS AND PARTICIPATIONS

                  SECTION 15.1      INTENTIONALLY OMITTED

                  SECTION 15.2      INTENTIONALLY OMITTED

                  SECTION 15.3      SUBSTITUTE NOTES. Upon its receipt of an
Assignment and Acceptance executed by an assignee, together with any Note or
Notes subject to such assignment, Lender shall, if such Assignment and
Acceptance has been completed and is in substantially the form of EXHIBIT A
hereto, (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register, and (iii) give prompt written notice thereof
to Borrower. Within seven (7) Business Days after its receipt of such notice,
Borrower, at Lender's own expense, shall execute and deliver to Lender in
exchange and substitution for the surrendered Note or Notes a new Note to the
order of such assignee in an amount equal to the portion of the Loan assigned to
it and a new Note to the order of Lender in an amount equal to the portion of
the Loan retained by it hereunder. Such new Note or Notes shall be in an
aggregate principal amount equal to the aggregate then outstanding principal
amount of such surrendered Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of the Note (modified, however, to the extent necessary so as not to impose
duplicative or increased obligations on Borrower and to delete obligations
previously satisfied by Borrower). Notwithstanding the provisions of this
Article XV, Borrower shall not be responsible or liable for any additional
taxes, reserves, adjustments or other costs and expenses that are related to, or
arise as a result of, any transfer of the Loan or any interest or participation
therein that arise solely and exclusively from the transfer of the Loan or any
interest or participation therein or from the execution of the new Note
contemplated by this Section 15.5, including, without limitation, any mortgage
tax. Lender and/or the assignees, as the case may be, shall from time to time
designate one agent and one servicer through which Borrower shall request all
approvals and consents required or contemplated by this Agreement and on whose
statements Borrower may rely.
<PAGE>

                  SECTION 15.4      PARTICIPATIONS. Each assignee pursuant to
this Article XV may sell participations to one or more Persons (other than
Borrower or any of its Affiliates) in or to all or a portion of its rights and
obligations under this Agreement and the other Loan Documents (including,
without limitation, all or a portion of the Note held by it); provided, however,
that (i) such assignee's obligations under this Agreement and the other Loan
Documents shall remain unchanged, (ii) such assignee shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such assignee shall remain the holder of any such Note for all purposes of
this Agreement and the other Loan Documents, and (iv) Borrower, Lender and the
assignees pursuant to this Article XV shall continue to deal solely and directly
with such assignee in connection with such assignee's rights and obligations
under this Agreement and the other Loan Documents. In the event that more than
one (1) party comprises Lender, Lender shall designate one party to act on the
behalf of all parties comprising Lender in providing approvals and all other
necessary consents under the Loan Documents and on whose statements Borrower may
rely.

                  SECTION 15.5      DISCLOSURE OF INFORMATION. Any assignee
pursuant to this Article XV may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Article
XV, disclose to the assignee or participant or proposed assignee or participant,
any information relating to Borrower furnished to such assignee by or on behalf
of Borrower; provided, however, that, prior to any such disclosure, the assignee
or participant or proposed assignee or participant shall agree in writing for
the benefit of Borrower to preserve the confidentiality of any confidential
information received by it.

                  SECTION 15.6      SECURITY INTEREST IN FAVOR OF FEDERAL
RESERVE BANK. Notwithstanding any other provision set forth in this Agreement or
any other Loan Document, any assignee pursuant to this Article XV may at any
time create a security interest in all or any portion of its rights under this
Agreement or the other Loan Documents (including, without limitation, the
amounts owing to it and the Note or Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of the
Federal Reserve System.

                  XVI.     RESERVE ACCOUNTS

                  SECTION 16.1      TAX RESERVE ACCOUNT. On the Closing Date,
Borrower shall deposit into the Tax Reserve Account as additional collateral for
the Loan an amount equal to $382,217, such amount to be increased by Borrower,
within two (2) Business Days of Borrower receiving notice from Bloomberg that
the final Rent Commencement Date (as such term is defined in the Bloomberg
Lease) has been delayed, in amount equal to Real Estate Taxes and Other Charges
that would be due and payable by Borrower during such delayed period by Borrower
depositing such amount into the Tax Reserve Account (the INITIAL TAX RESERVE
AMOUNT). From and after the final Rent Commencement Date and in accordance with
the time periods and subject to the terms set forth in Section 3.1, Borrower
shall deposit into the Tax Reserve Account an amount equal to (a) one-twelfth of
the annual Real Estate Taxes that Lender reasonably estimates will be payable
during the next ensuing twelve (12) months in order to accumulate with
<PAGE>

Lender sufficient funds to pay all such Real Estate Taxes at least thirty (30)
days prior to the imposition of any interest, charges or expenses for the
non-payment thereof and (b) one-twelfth of the annual Other Charges that Lender
reasonably estimates will be payable during the next ensuing twelve (12) months
(said monthly amounts in (a) and (b) above hereinafter called the MONTHLY TAX
RESERVE AMOUNT, and the aggregate amount of funds held in the Tax Reserve
Account being the TAX RESERVE AMOUNT). The Monthly Tax Reserve Amount is subject
to adjustment by Lender in Lender's reasonable discretion upon notice to
Borrower. In the event that, and for so long as, Bloomberg is not paying all
Real Estate Taxes and Other Charges under the Bloomberg Lease, then the Monthly
Tax Reserve Amount shall be paid by Borrower to Lender on each Payment Date,
pursuant to Section 3.1.7(a)(ii). Lender will apply the Monthly Tax Reserve
Amount (or, prior to the final Rent Commencement Date, a portion of the Initial
Tax Reserve Amount) to payments of Real Estate Taxes and Other Charges required
to be made by Borrower pursuant to Article VII and under the Security
Instrument, subject to Borrower's right to contest Real Estate Taxes in
accordance with Section 7.3. In making any payment relating to the Tax Reserve
Account, Lender may do so according to any bill, statement or estimate procured
from the appropriate public office, 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 funds in the
Tax Reserve Account shall exceed the amounts due for Real Estate Taxes and Other
Charges pursuant to Article VII, Lender shall transfer such excess funds to the
Collection Account. If at any time Lender reasonably determines that the Tax
Reserve Amount is not or will not be sufficient to pay Real Estate Taxes and
Other Charges by the dates set forth above, Lender shall notify Borrower of such
determination and Borrower shall increase its monthly payments to Lender by the
amount that Lender reasonably estimates is sufficient to make up the deficiency
at least thirty (30) days prior to the imposition of any interest, charges or
expenses for the non-payment of the Real Estate Taxes. Upon payment of the Real
Estate Taxes, Lender shall reassess the amount necessary to be deposited in the
Tax Reserve Account for the succeeding period, which calculation shall take into
account any excess amounts remaining in the Tax Reserve Account. Borrower agrees
to deposit any required increases in the Monthly Tax Reserve Amount within five
(5) Business Days after receipt of written notice thereof from Lender.

                  SECTION 16.2      INSURANCE RESERVE ACCOUNT. In accordance
with the time periods and subject to the terms set forth in Section 3.1,
Borrower shall deposit into the Insurance Reserve Account an amount equal to
one-twelfth of the insurance premiums that Lender reasonably estimates, based on
the most recent bill, will be payable for the renewal of the coverage afforded
by the insurance policies upon the expiration thereof, or the portion of the
premium allocated to the Property with respect to any blanket insurance policy
obtained pursuant to Section 6.1.13, in order to accumulate with Lender
sufficient funds to pay all such insurance premiums at least thirty (30) days
prior to the expiration of the policies required to be maintained by Borrower
pursuant to the terms hereof (said monthly amounts hereinafter called the
MONTHLY INSURANCE RESERVE AMOUNT, and the aggregate amount of funds held in the
Insurance Reserve Account being the INSURANCE RESERVE AMOUNT). The Monthly
Insurance Reserve Amount is subject to adjustment by Lender in Lender's
reasonable discretion upon notice to Borrower. In the event that, and for so
long as, Bloomberg is not paying all insurance premiums provided for under the
<PAGE>

Bloomberg Lease, then, the Monthly Insurance Reserve Amount shall be paid by
Borrower to Lender on each Payment Date, pursuant to Section 3.1.7(ii). Lender
will apply the Monthly Insurance Reserve Amount to payments of insurance
premiums required to be made by Borrower pursuant to Article V and Article VI
and under the Security Instrument. In making any payment relating to the
Insurance Reserve Account, Lender may do so according to any bill, statement or
estimate procured from the insurer or agent, without inquiry into the accuracy
of such bill, statement or estimate or into the validity thereof. If the amount
of funds in the Insurance Reserve Account shall exceed the amounts due for
insurance premiums pursuant to Article V and Article VI, Lender shall transfer
such excess to the Collection Account. If at any time Lender reasonably
determines that the Insurance Reserve Amount is not or will not be sufficient to
pay insurance premiums by the dates set forth above, Lender shall notify
Borrower of such determination and Borrower shall increase its monthly payments
to Lender by the amount that Lender reasonably estimates is sufficient to make
up the deficiency at least thirty (30) days prior to expiration of the Policies.
Upon payment of the such insurance premiums, Lender shall reassess the amount
necessary to be deposited in the Insurance Reserve Account for the succeeding
period, which calculation shall take into account any excess amounts remaining
in the Insurance Reserve Account. Provided no Event of Default has occurred and
is continuing, Lender agrees to reimburse to Borrower from funds on deposit in
the Insurance Reserve Account the amount of any insurance premium allocable to
the Property that was paid under a blanket insurance policy. Prior to any such
disbursement, Borrower will provide Lender with an Officer's Certificate
together with supporting documentation reasonably acceptable to Lender
evidencing such payment.

                  SECTION 16.3      STRUCTURAL RESERVE ACCOUNT.

                           (a)      In the event that, and for so long as,
         Bloomberg is not paying for all capital improvements at the Property
         pursuant to the Bloomberg Lease, then, in accordance with the time
         periods set forth in Section 3.1, Borrower shall deposit into the
         Structural Reserve Account an amount equal to $11,312.35 (the MONTHLY
         STRUCTURAL RESERVE AMOUNT and together with all amounts deposited in
         the Structural Reserve Account, the STRUCTURAL RESERVE AMOUNT) and held
         by the Cash Management Bank for the benefit of Lender as additional
         security for the Loan in accordance with Section 3.1.7(iv) and the
         Account Agreement. In connection with any Alteration, other than in
         connection with tenant improvement work, such funds shall be disbursed
         to Borrower from the Alterations Reserve Account in accordance with the
         terms of this Section for disbursements from the Structural Reserve
         Account.

                           (b)      Lender shall make disbursements from the
         Structural Reserve Account to reimburse Borrower for the cost of
         capital improvements to the Property in accordance with and in the
         manner provided in this Section 16.3. Lender shall, within fifteen (15)
         Business Days of a written request from Borrower and satisfaction of
         the requirements set forth in this Section 16.3 disburse to Borrower
         amounts from the Structural Reserve Account necessary to pay for the
         actual costs of completed capital improvement work. In no event shall
<PAGE>

         Lender be obligated to disburse funds from the Structural Reserve
         Account if a an Event of Default exists.

                  Each request for disbursement from the Structural Reserve
Account shall be in a form reasonably specified or reasonably approved by Lender
and be submitted together with an Officer's Certificate specifying the specific
items for which the disbursement is requested, certifying that such item
qualifies as capital improvement work, the estimated cost for the applicable
Alteration through completion and the cost of each item purchased. Each request
for disbursement shall be delivered at least fifteen (15) Business Days prior to
the date of the requested disbursement and shall include copies of invoices for
all costs incurred and each request shall include evidence reasonably
satisfactory to Lender (i) that the work has been completed in a workmanlike
manner and (ii) of payment of all such amounts or evidence that such amounts
will be paid by such disbursement. Borrower shall not make a request for
disbursement from the Structural Reserve Account more frequently than once in
any calendar month and the total amount of any request shall not be less than
$10,000 (except in the case of the final request for disbursement).

                  SECTION 16.4      ADDITIONAL DEBT SERVICE RESERVE ACCOUNT. On
the Closing Date, Borrower shall deposit into the Additional Debt Service
Reserve Account as additional collateral for the Loan an amount equal to
$11,169,694, such amount to be increased by Borrower, within two (2) Business
Days of Borrower receiving notice from Bloomberg that the final Rent
Commencement Date (as such term is defined in the Bloomberg Lease) has been
delayed, in amount equal to the Debt Service that would be due and payable
during such delayed period by Borrower depositing such amount into the
Additional Debt Service Reserve Account. Lender shall transfer a portion of the
funds in the Additional Debt Service Reserve Account on a monthly basis
sufficient to pay Debt Service (to the extent of sufficient funds on deposit
therein) on each Payment Date until the final Rent Commencement Date has
occurred. During the continuance of an Event of Default, Lender shall have the
right to apply any amounts then remaining in the Additional Debt Service Reserve
Account to repay the Indebtedness or any other amounts due hereunder or under
the other Loan Documents in the order of priority and manner set forth in
Section 11 of the Security Instrument.

                  SECTION 16.5      CASH TRAP RESERVE ACCOUNT. During a Cash
Trap Period, all Excess Cash Flow shall be transferred from the Holding Account
into the Cash Trap Reserve Account (or, subject to the terms of Section 3.1.7(b)
hereof, from the applicable Sub-account) and shall be retained by Lender as
additional security for the Loan and shall be applied or disbursed as
hereinafter provided. From and after the occurrence and continuation of an Event
of Default, Lender shall have the right to apply any amounts then remaining in
the Cash Trap Reserve Account to repay the Loan or any other amounts due
hereunder or under the other Loan Documents in such order, manner and amount as
Lender shall determine in its sole discretion. Provided no Event of Default
shall have occurred and be continuing, Lender shall instruct the Cash Management
Bank to release to Borrower any amounts remaining in the Cash Trap Reserve
Account promptly after the Cash Trap Period is no longer continuing (as
determined by Lender in accordance with the subsequent terms of this Section);
provided, notwithstanding the
<PAGE>

foregoing, any amounts then remaining in the Cash Trap Reserve Account on the
Anticipated Repayment Date shall be applied by Lender to reduce the Principal
Amount of the Loan and all other Obligations then outstanding, including,
without limitation, payment of the Liquidated Damages Amount to the extent any
such amounts are applied prior to the expiration of the Prepayment Lockout
Period. All determinations as to whether (i) a Low DSCR Period has occurred and
is continuing shall be made by Lender in its sole but reasonable discretion and
based on the financial information delivered by Borrower pursuant to Section
11.2 hereof and/or any other information available to Lender pursuant to the
terms of the Loan Documents and (ii) a Casualty Restoration Period has occurred
and is continuing shall be made by Lender in its sole but reasonable discretion
and based on information required to be delivered by Borrower pursuant to
Section 5.1.7 hereof (or any other information available to Lender).

                  XVII.    DEFAULTS

                  SECTION 17.1      EVENT OF DEFAULT.

                           (a)      Each of the following events shall
         constitute an event of default hereunder (an EVENT OF DEFAULT):

                                    (i)      if (A) the Indebtedness is not paid
                  in full on the Maturity Date, (B) any Monthly Payment due
                  under the Note is not paid in full by the fifth (5th) day of
                  each calendar month, provided, however, if the fifth (5th) day
                  of any such calendar month is not a Business Day, then the
                  immediately preceding Business Day, (C) any prepayment of
                  principal due under this Agreement or the Note is not paid
                  when due, (D) the Liquidated Damages Amount or Yield
                  Maintenance Premium is not paid when due, (E) any deposit to
                  the Collection Account is not made on the required deposit
                  date therefor; or (F) except as to any amount included in (A),
                  (B), (C), (D), and/or (E), of this clause (i), any other
                  amount payable pursuant to this Agreement, the Note or any
                  other Loan Document is not paid in full on or before the tenth
                  Business Day after Lender delivers written notice thereof to
                  Borrower;

                                    (ii)     subject to Borrower's right to
                  contest as set forth in Section 7.3, if any of the Impositions
                  or Other Charges are not paid prior to the imposition of any
                  interest, penalty, charge or expense for the non-payment
                  thereof unless such non-payment is the sole result of Lender's
                  failure to disburse funds from the Tax Reserve Account to pay
                  such sums to the extent required to be paid by Lender pursuant
                  to the terms of the Loan Documents;

                                    (iii)    if the insurance policies required
                  by Section 6.1 are not kept in full force and effect, or if
                  certified copies of any of such insurance policies are not
                  delivered to Lender within thirty (30) days of the effective
                  date thereof unless the failure to keep such policies in full
                  force and effect is the sole result of Lender's failure to
                  disburse funds from the Insurance
<PAGE>

                  Reserve Account to pay insurance premiums to the extent
                  required to be paid by Lender pursuant to the terms of the
                  Loan Documents; provided, however, if Borrower delivers to
                  Lender certificates of insurance within the aforesaid 30 day
                  period, the failure to deliver policies to Lender within such
                  period shall not be an Event of Default so long as Borrower is
                  diligently pursuing and continues to diligently pursue
                  delivery of the policies to Lender;

                                    (iv)     if, except as permitted pursuant to
                  Article VIII, (a) any Transfer of any direct or indirect
                  legal, beneficial or equitable interest in all or any portion
                  of the Property occurs, (b) any Transfer of any direct or
                  indirect interest in Borrower, or any other SPE Entity, (c)
                  any Lien or encumbrance on all or any portion of the Property,
                  or (d) any pledge, hypothecation, creation of a security
                  interest in or other encumbrance of any direct or indirect
                  interests in Borrower, or any other SPE Entity;

                                    (v)      if any representation or warranty
                  made by Borrower herein or by Borrower, Guarantor or any
                  Affiliate of Borrower in any other Loan Document, or in any
                  report, certificate (including any certificates attached to
                  any legal opinions delivered to Lender by Borrower on the date
                  hereof), financial statement or other instrument, agreement or
                  document furnished to Lender shall have been false or
                  misleading in any material adverse respect as of the date the
                  representation or warranty was made;

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

                                    (vii)    if a receiver, liquidator or
                  trustee shall be appointed for Borrower, any SPE Entity or any
                  Guarantor or if Borrower, any SPE Entity or any 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 SPE Entity or any Guarantor,
                  or if any proceeding for the dissolution or liquidation of
                  Borrower, any SPE Entity or any Guarantor shall be instituted;
                  provided, however, if such appointment, adjudication, petition
                  or proceeding was involuntary and not consented to by
                  Borrower, any SPE Entity or any Guarantor, upon the same not
                  being discharged, stayed or dismissed within ninety (90) days;

                                    (viii)   if Borrower, any SPE Entity or any
                  Guarantor, as applicable assigns its rights under this
                  Agreement or any of the other Loan Documents or any interest
                  herein or therein in contravention of the Loan Documents;
<PAGE>

                                    (ix)     with respect to any term, covenant
                  or provision set forth herein which specifically contains a
                  notice requirement or grace period, if Borrower or any
                  Guarantor shall be in default under such term, covenant or
                  condition after the giving of such notice or the expiration of
                  such grace period;

                                    (x)      if any of the assumptions contained
                  in the Non-Consolidation Opinion, in any Additional
                  Non-Consolidation 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;

                                    (xi)     if Borrower or any Affiliate
                  defaults in any of its obligations under Section 15 of the
                  Security Instrument;

                                    (xii)    if Borrower shall fail to comply
                  with any covenants set forth in Sections 5.1.4 (other than
                  solely in connection with clause (xviii) of the definition of
                  "Single Purpose Entity" set forth herein), 5.1.6 through
                  5.1.8, inclusive, 5.1.12, 5.1.18 through 5.1.20, inclusive,
                  5.1.22, 5.2 or Article XI (except with respect to Section
                  11.2.1 which is covered by clause (xxiv) of this Section) with
                  such failure continuing for ten (10) Business Days after
                  Lender delivers written notice thereof to Borrower;

                                    (xiii)   if Borrower shall fail to comply
                  with any covenants set forth in Section 3(d) of the Security
                  Instrument or Section 8 of the Security Instrument with such
                  failure continuing for ten (10) Business Days after Lender
                  delivers written notice thereof to Borrower;

                                    (xiv)    Borrower shall fail to deposit the
                  full amount required to be deposited in the Holding Account or
                  any Sub-Accounts thereof pursuant to Section 3.1.6 within the
                  time periods (if any) required by Section 3.1.6;

                                    (xv)     Intentionally omitted;

                                    (xvi)    if the Property becomes subject (i)
                  to any Lien which is superior to the lien of the Security
                  Instrument, other than a Lien for real estate taxes and
                  assessments not due and payable or a Permitted Encumbrance, or
                  (ii) to any mechanic's, materialman's or other Lien which is
                  superior to the lien of the Security Instrument, and such Lien
                  under clause (i) or (ii) shall remain undischarged (by
                  payment, bonding, or otherwise) for fifteen (15) days after
                  notice of such Lien unless contested in accordance with the
                  terms hereof;

                                    (xvii)   if the Management Agreement is
                  terminated (other than as a result of a Borrower default as
                  addressed in clause (xvi)) and a Qualified Manager is not
                  appointed as a replacement manager pursuant to
<PAGE>

                  the provisions of Section 5.2.14 within sixty (60) days after
                  such termination;

                                    (xviii)  except as expressly permitted
                  pursuant to the Loan Documents, if Borrower grants any
                  easement, covenant or restriction (other than the Permitted
                  Encumbrances) over the Property;

                                    (xix)    if Borrower shall default beyond
                  the expiration of any applicable cure period under any
                  existing easement, covenant or restriction which affects the
                  Property, the default of which shall have a Material Adverse
                  Effect;

                                    (xx)     if (A) the Bloomberg Lease shall be
                  surrendered, terminated or canceled, or (B) any of the terms,
                  covenants or conditions of the Bloomberg Lease shall in any
                  manner be modified, changed, supplemented, altered or amended
                  in violation of the provisions of Section 8.8.1 hereof;

                                    (xxi)    if the Condominium Board fails (A)
                  to maintain the Common Elements in good condition and repair,
                  and such failure directly or indirectly decreases the security
                  value of the Property (except to a de minimis extent as
                  determined by Lender in its sole and absolute discretion), (B)
                  to promptly comply in all material respects with all laws,
                  orders, and ordinances affecting the Common Elements, or the
                  use thereof, (C) to promptly repair, replace or rebuild any
                  part of the Common Elements which may be damaged or destroyed
                  by any casualty or which may be affected by any condemnation
                  proceeding if the failure to do so could have a Material
                  Adverse Effect, or (D) to complete and pay for, within a
                  reasonable time, any construction or repair undertaken on the
                  Common Elements, all to the extent that the Board is required
                  to so maintain, comply, repair, replace, rebuild and complete
                  the Common Elements by the Condominium Declaration and the
                  Bylaws (as defined in the Condominium Declaration) if the
                  failure to do so could have a Material Adverse Effect ; and,
                  in the case of any of the foregoing, Borrower fails to compel
                  the Board to cure such failure or to itself cure or cause such
                  failure to be cured, within seventy-five (75) days after
                  written notice from Lender;

                                    (xxii)   if withdrawal of the Property from
                  the Condominium Regime shall be joined in or authorized by
                  Borrower;

                                    (xxiii)  if, without the prior written
                  consent of Lender, Borrower joins in or authorizes the
                  amendment of any of the material terms or provisions of the
                  Condominium Declaration or the By-Laws in contravention of the
                  terms hereof;
<PAGE>

                                    (xxiv)   if Borrower shall fail to comply
                  with any of its obligations set forth in Sections 5.1.23 or
                  11.2.1;

                                    (xxv)    if a default has occurred by
                  Borrower under the Condominium Declaration and/or the By-Laws
                  (a CONDOMINIUM DEFAULT), whether monetary or non-monetary, and
                  such Condominium Default continues for thirty (30) days;
                  provided, however, that if such Condominium Default is
                  susceptible of cure but cannot reasonably be cured within such
                  thirty (30) day period and provided further that the
                  defaulting party shall have commenced to cure such Condominium
                  Default within such thirty (30) day period and thereafter
                  diligently proceeds to cure the same, such thirty (30) day
                  period shall be extended for such time as is reasonably
                  necessary for the defaulting party in the exercise of due
                  diligence to cure such Condominium Default, such additional
                  period not to exceed one hundred and twenty (120) days;

                                    (xxvi)   if a default has occurred under the
                  Bloomberg Lease (a BLOOMBERG DEFAULT), whether monetary or
                  non-monetary, and such Bloomberg Default continues for thirty
                  (30) days; provided, however, that if such Bloomberg Default
                  is susceptible of cure but cannot reasonably be cured within
                  such thirty (30) day period and provided further that the
                  defaulting party (or Borrower on behalf of Bloomberg) shall
                  have commenced to cure such Bloomberg Default within such
                  thirty (30) day period and thereafter diligently proceeds to
                  cure the same, such thirty (30) day period shall be extended
                  for such time as is reasonably necessary for the defaulting
                  party (or Borrower on behalf of Bloomberg) in the exercise of
                  due diligence to cure such Bloomberg Default, such additional
                  period not to exceed (A) ninety (90) days in the case of a
                  default under the Bloomberg Lease which does not require
                  Borrower to take possession of the Property, and (B) one
                  hundred and twenty (120) days in the case of any other default
                  under the Bloomberg Lease; or

                                    (xxvii)  if Borrower shall continue to be in
                  Default under any of the other terms, covenants or conditions
                  of this Agreement or of any Loan Document not specified in
                  subsections (i) to (xxvi) above, for thirty (30) days after
                  notice from Lender; provided, however, that if such Default is
                  susceptible of cure but cannot reasonably be cured within such
                  thirty (30) day period and provided further that Borrower
                  shall have commenced to cure such Default within such thirty
                  (30) day period and thereafter diligently proceeds to cure the
                  same, such thirty (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 one hundred twenty (120) days.

                           (b)      Unless waived in writing by Lender, upon the
         occurrence of an Event of Default 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
<PAGE>

         Loan Documents or at law or in equity, Lender may take such action,
         without notice or demand, that Lender deems advisable to protect and
         enforce its rights against Borrower and in the Property, including,
         without limitation, (i) declaring immediately due and payable the
         entire Principal Amount together with interest thereon and all other
         sums due by Borrower under the Loan Documents, (ii) collecting interest
         on the Principal Amount at the Default Rate whether or not Lender
         elects to accelerate this Note and (iii) enforcing or availing itself
         of any or all rights or remedies set forth 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 subsections (a)(vi) or(a)(vii) above, the
         Indebtedness 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. The foregoing
         provisions shall not be construed as a waiver by Lender of its right to
         pursue any other remedies available to it under this Agreement, the
         Security Instrument or any other Loan Document. Any payment hereunder
         may be enforced and recovered in whole or in part at such time by one
         or more of the remedies provided to Lender in the Loan Documents.

                  SECTION 17.2      REMEDIES.

                           (a)      Unless waived in writing by Lender, upon and
         during the occurrence and continuance 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 Indebtedness
         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, Borrower agrees that 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 remedies against the
         Property and the Security Instrument has been foreclosed, sold and/or
         otherwise realized upon in satisfaction of the Indebtedness or the
         Indebtedness has been paid in full.
<PAGE>

                           (b)      Upon the occurrence and during the
         continuance of an Event of Default, with respect to the Account
         Collateral, the Lender may:

                                    (i)      without notice to Borrower, except
                  as required by law, and at any time or from time to time,
                  charge, set-off and otherwise apply all or any part of the
                  Account Collateral against the Obligations, Operating Expenses
                  and/or capital expenditures for the Property or any part
                  thereof;

                                    (ii)     in Lender's sole discretion, at any
                  time and from time to time, exercise any and all rights and
                  remedies available to it under this Agreement, and/or as a
                  secured party under the UCC;

                                    (iii)    demand, collect, take possession of
                  or receipt for, settle, compromise, adjust, sue for, foreclose
                  or realize upon the Account Collateral (or any portion
                  thereof) as Lender may determine in its sole discretion; and

                                    (iv)     take all other actions provided in,
                  or contemplated by, this Agreement.

                           (c)      With respect to Borrower, the Account
         Collateral, and the Property, nothing contained herein or in any other
         Loan Document shall be construed as requiring Lender to resort to the
         Property for the satisfaction of any of the Indebtedness, and Lender
         may seek satisfaction out of the Property or any part thereof, in its
         absolute discretion in respect of the Indebtedness. In addition, Lender
         shall have the right from time to time to partially foreclose this
         Agreement and the Security Instrument in any manner and for any amounts
         secured by this Agreement or the Security Instrument 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 this Agreement and the Security Instrument 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 this Agreement and the Security Instrument to recover so
         much of the principal balance of the Loan as Lender may accelerate and
         such other sums secured by this Agreement or the Security Instrument as
         Lender may elect. Notwithstanding one or more partial foreclosures, the
         Property shall remain subject to this Agreement and the Security
         Instrument to secure payment of sums secured by this Agreement and the
         Security Instrument and not previously recovered.

                           (d)      Notwithstanding any term set forth herein or
         in any of the other Loan Documents, (i) Lender covenants not to
         complete a foreclosure or exercise any remedies with respect to with
         respect to Office Unit 2 unless Borrower has defaulted in any of its
         obligations under Section 15 and/or Section 13(h) (in a manner that
         relates to Office Unit 2) of the Security Instrument (an
<PAGE>

         OFFICE UNIT 2 DEFAULT) and (ii) subject to the terms of Section 15(a)
         of the Security Instrument, prior to the occurrence and continuance of
         an Office Unit 2 Default, Borrower may collect and use all Rent payable
         with respect to Office Unit 2 without having to deposit (or causing to
         be deposited) any such Rent derived therefrom that is not attributable
         to the Bloomberg Lease into the Collection Account. Additionally,
         except with respect to (i) Borrower's strict compliance with the
         covenants imposed upon Borrower pursuant to the terms of Section 13(h)
         (in a manner that relates to Office Unit 2) and Section 15 of the
         Security Instrument and (ii) Borrower's grant of the lien and security
         interest set forth herein to Lender in all its right, title and
         interest in and to the Property (including, without limitation, in and
         to Office Unit 2), Lender agrees that Borrower shall not be obligated
         to comply with any of the covenants imposed by the terms of the Loan
         Documents solely as such covenants relate to Office Unit 2 except that
         Borrower shall be required to comply with such covenants for any
         portion of Office Unit 2 that Borrower leases to Tenant pursuant to the
         terms of the Bloomberg Lease. Notwithstanding anything to the contrary
         set forth herein or in any of the other Loan Documents, any reference
         to the Property in the representations that Borrower makes as of the
         date hereof shall be deemed to be a reference only to Office Unit 1
         (except to the extent such representations relate to (i) Borrower's
         ownership interests in Office Unit 2 and/or (ii) Lender's liens and
         security interests in Office Unit 2).

                  SECTION 17.3      REMEDIES CUMULATIVE; WAIVERS. The rights,
powers and remedies of Lender under this Agreement and the Security Instrument
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 or any Guarantor shall not be
construed to be a waiver of any subsequent Default or Event of Default by
Borrower or any Guarantor or to impair any remedy, right or power consequent
thereon.

                  SECTION 17.4      COSTS OF COLLECTION. In the event that after
an Event of Default: (i) the Note or any of the Loan Documents is placed in the
hands of an attorney for collection or enforcement or is collected or enforced
through any legal proceeding; (ii) an attorney is retained to represent Lender
in any bankruptcy, reorganization, receivership, or other proceedings affecting
creditors' rights and involving a claim under this Note or any of the Loan
Documents; or (iii) an attorney is retained to protect or enforce the lien or
any of the terms of this Agreement, the Security Instrument or any of the Loan
Documents; then Borrower shall pay to Lender all reasonable attorney's fees,
costs and expenses actually incurred in connection therewith, including costs of
appeal, together with interest on any judgment obtained by Lender in respect of
such fees, costs and expenses at the Default Rate.
<PAGE>

                  XVIII.   SPECIAL PROVISIONS

                  SECTION 18.1      EXCULPATION.

                           18.1.1   EXCULPATED PARTIES. Except as set forth in
this Section 18.1 and the Environmental Indemnity, no personal liability shall
be asserted, sought or obtained by Lender or enforceable against (i) Borrower,
(ii) any Affiliate of Borrower, (iii) any Person owning, directly or indirectly,
any legal or beneficial interest in Borrower or any Affiliate of Borrower or
(iv) any direct or indirect partner, member, principal, officer, Controlling
Person, beneficiary, trustee, advisor, shareholder, employee, agent, Affiliate
or director of any Persons described in clauses (i) through (iii) above
(collectively, the EXCULPATED PARTIES) and none of the Exculpated Parties shall
have any personal liability (whether by suit deficiency judgment or otherwise)
in respect of the Obligations, this Agreement, the Security Instrument, the
Note, the Property or any other Loan Document, or the making, issuance or
transfer thereof, all such liability, if any, being expressly waived by Lender.
The foregoing limitation shall not in any way limit or affect Lender's right to
any of the following and Lender shall not be deemed to have waived any of the
following:

                           (a)      Foreclosure of the lien of this Agreement
         and the Security Instrument in accordance with the terms and provisions
         set forth herein and in the Security Instrument;

                           (b)      Action against any other security at any
         time given to secure the payment of the Note and the other Obligations;

                           (c)      Exercise of any other remedy set forth in
         this Agreement or in any other Loan Document which is not inconsistent
         with the terms of this Section 18.1;

                           (d)      Any right which Lender may have under
         Sections 506(a), 506(b), 1111(b) or any other provisions of the
         Bankruptcy Code to file a claim for the full amount of the Indebtedness
         secured by this Agreement and the Security Instrument or to require
         that all collateral shall continue to secure all of the Indebtedness
         owing to Lender in accordance with the Loan Documents; or

                           (e)      The liability of any given Exculpated Party
         with respect to any separate written agreement given by any such
         Exculpated Party in connection with the Loan (including, without
         limitation and the Environmental Indemnity).

                           18.1.2   CARVEOUTS FROM NON-RECOURSE LIMITATIONS.
Notwithstanding the foregoing or anything in this Agreement or any of the Loan
Documents to the contrary, there shall at no time be any limitation on
Borrower's liability for the payment, in accordance with the terms of this
Agreement, the Note, the Security Instrument and the other Loan Documents, to
Lender of:

                           (a)      any Losses incurred by or on behalf of
         Lender by reason of the fraudulent acts of Borrower or any Affiliate of
         Borrower;
<PAGE>

                           (b)      Proceeds which Borrower or any Affiliate of
         Borrower has received and intentionally misapplied (it being agreed
         that Borrower shall not be deemed to have misapplied Proceeds unless
         same are received by Borrower and not paid to Lender, in a circumstance
         in which Lender is expressly entitled to receive same from Borrower
         and/or any Affiliate pursuant to the terms of this Agreement or any of
         the Loan Documents to be applied toward payment of the Indebtedness, or
         used for the repair or replacement of the Property in accordance with
         the provisions of this Agreement);

                           (c)      all Losses incurred by Lender and arising
         from (i) any intentional misrepresentation of Borrower or any Affiliate
         of Borrower and/or (ii) Borrower's failure, after the occurrence of a
         Casualty Event, to cause Guarantor to deliver the Completion Guaranty
         to Lender in accordance with the terms and time periods set forth in
         Section 6.2.4 hereof, including, without limitation, any Losses
         incurred by or on behalf of Lender as a result of Lender's failure to
         make any Proceeds available to Borrower to restore the Property;

                           (d)      any misappropriation of Rents or security
         deposits by Borrower or any Affiliate of Borrower;

                           (e)      any Losses incurred by or on behalf of
         Lender by reason of all or any part of the Property or the Account
         Collateral being encumbered by a Lien (other than this Agreement and
         the Security Instrument) in violation of the Loan Documents;

                           (f)      after the occurrence and during the
         continuance of an Event of Default, any Rents, issues, profits and/or
         income collected by Borrower or any Affiliate of Borrower (other than
         Rent sent to the Collection Account or paid directly to Lender pursuant
         to any notice of direction delivered to tenants of the Property) and
         not applied to payment of the Obligations or used to pay normal and
         verifiable Operating Expenses of the Property or otherwise applied in a
         manner permitted under the Loan Documents;

                           (g)      any Losses incurred by or on behalf of
         Lender by reason of physical damage to the Property from intentional
         waste committed by Borrower or any Affiliate of Borrower;

                           (h)      any Losses incurred by or on behalf of
         Lender by reason of the intentional failure of Borrower to comply with
         any of the provisions of Article XII;

                           (i)      any Losses incurred by or on behalf of
         Lender by reason of the occurrence of any of the following events:

         (1) Borrower fails to comply with the material Single Purpose Entity
         requirements of this Agreement (other than solely clause (xvii) of the
         definition of "Single Purpose Entity" set forth herein); (2) Borrower
         fails to comply with any of the provisions of Section 8.1 and/or
         Section 8.5; (3) Borrower files a voluntary
<PAGE>

         petition under the Bankruptcy Code or any other Federal or state
         bankruptcy or insolvency law; (4) an Affiliate, officer, director, or
         representative which controls, directly or indirectly, Borrower files,
         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; (5) 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; (6) 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 (7) 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;

                           (j)      any Losses incurred by or on behalf of
         Lender as a result of (i) the failure of any or all of Borrower, any
         its Affiliates and/or any other owner of the Upper Option Space and/or
         Lower Option Space (as each such term is defined in the Bloomberg
         Lease) (other then Lender or any Affiliate of Lender), to comply with
         the terms of Article 36 (Option Space) of the Bloomberg Lease (or,
         following a foreclosure of the lien secured by the Security Instrument
         or a deed in lieu of foreclosure, Lender's inability to comply with the
         terms of Article 36 of the Bloomberg Lease as a result of such Person's
         failure to comply with the terms of such Article) (an EXPANSION SPACE
         DEFAULT), (ii) the exercise of any rights that Bloomberg may have as a
         result of any Expansion Space Default (whether pursuant to the
         Bloomberg Lease, at law or in equity), including, without limitation,
         any rights to set off any payments required under the Bloomberg Lease
         and/or (iii) paying any amount or performing any obligation with
         respect to the Upper Option Space and/or Lower Option Space after the
         occurrence of an Expansion Space Default;

                           (k)      any Losses incurred by or on behalf of
         Lender as a result of the failure by Borrower and/or any of its
         Affiliates to comply in any respect with the terms of Section 15 of the
         Security Instrument; and/or

                           (l)      reasonable attorney's fees and expenses
         incurred by Lender in connection with any successful suit filed on
         account of any of the foregoing clauses (a) through (k).

                  The term "Losses" means any and all losses, damages, costs,
expenses, liabilities, claims or other obligations reasonably incurred by Lender
(including reasonable attorneys' fees and costs but excluding any punitive
damages and lost profits).

                  Notwithstanding anything to the contrary in this Agreement,
the Note or any of the Loan Documents, Lender shall not be deemed to have waived
any right which
<PAGE>

Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of
the Bankruptcy Code to file a claim for the full amount of the Indebtedness or
to require that all collateral shall continue to secure all of the Indebtedness
owing to Lender in accordance with the Loan Documents.

                  XIX.     MISCELLANEOUS

                  SECTION 19.1      SURVIVAL. This Agreement and all covenants,
indemnifications, agreements, representations and warranties made herein and in
the certificates delivered pursuant hereto shall survive the making by Lender of
the Loan and the execution and delivery to Lender of the Note, and shall
continue in full force and effect so long as all or any of the Indebtedness is
outstanding and unpaid unless a longer period is expressly set forth herein or
in the other Loan Documents. Whenever in this Agreement any of the parties
hereto is referred to, such reference shall be deemed to include the legal
representatives, successors and assigns of such party. 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 19.2      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.

                  SECTION 19.3      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 WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES
AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS,
INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS
ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH
STATE (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 AND LENDER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVE ANY CLAIM TO
ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT AND THE
NOTE. THIS AGREEMENT 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.
<PAGE>

                  (B)      ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER
OR BORROWER ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL 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 AND
LENDER WAIVE 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 LENDER
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
                  80 STATE STREET
                  ALBANY, NEW YORK  12207 2543

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 AGREE 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 19.4      MODIFICATION, WAIVER IN WRITING. No
modification, amendment, extension, discharge, termination or waiver of any
provision of this Agreement, or of the Note, 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, if a Securitization shall have occurred, a Rating
Agency Confirmation is obtained), 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 19.5      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
<PAGE>

agreement, or exercising any right, power, remedy or privilege hereunder, or
under the Note or under any other Loan Document, or any other instrument given
as security therefor, 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, the Note or any other Loan Document, Lender shall
not be deemed to have waived any right either to require prompt payment when due
of all other amounts due under this Agreement, the Note or the other Loan
Documents, or to declare a default for failure to effect prompt payment of any
such other amount.

                  SECTION 19.6      NOTICES. All notices, consents, approvals
and requests required or permitted hereunder or under any other Loan Document
shall be given in writing and shall be effective for all purposes if hand
delivered or sent by (a) certified or registered United States mail, postage
prepaid, return receipt requested or (b) expedited prepaid delivery service,
either commercial or United States Postal Service, with proof of attempted
delivery, or (c) by telecopier (with answer back acknowledged), addressed as
follows (or at such other address and Person as shall be designated from time to
time by any party hereto, as the case may be, in a written notice to the other
parties hereto in the manner provided for in this Section and given at least
twenty (20) days prior to the effective date of such change of address):

                  If to Lender:     German American Capital Corporation
                                    60 Wall Street
                                    New York, New York 10005
                                    Attention: Eric Schwartz and General Counsel
                                    Facsimile:  (212) 250-7210
                                    Confirmation No.  (212) 250-2500

                  With a copy to
                  Servicer:         GMAC Commercial Mortgage Corporation
                                    200 Witmer Road
                                    Horsham, Pennsylvania 19044
                                    Attention: Managing Director, Global
                                    Facsimile:  (215).328.3478
                                    Confirmation No.:  215.328.1030

                  With a copy to:   Skadden, Arps, Slate, Meagher & Flom LLP
                                    Four Times Square
                                    New York, New York 10036
                                    Attention: Harvey R. Uris, Esq.
                                    Facsimile: (917) 777-2212
                                    Confirmation No.  (212) 735-3000

                  If to Borrower:   731 Office One LLC
                                    c/o Alexander's Inc.
<PAGE>

                                    888 Seventh Avenue
                                    New York, New York 10106
                                    Attention: Wendy Silverstein
                                    Facsimile: (212) 894-7073
                                    Confirmation No. (212) 894-7000

                  With a copy to:   Proskauer Rose LLP
                                    1585 Broadway
                                    New York, New York 10036
                                    Attention: Ronald D. Sernau, Esq.
                                    Facsimile: (212) 969 2900
                                    Confirmation No.  (212) 969 3785

All notices, elections, requests and demands under this Agreement shall be
effective and deemed received upon the earliest of (i) the actual receipt of the
same by personal delivery or otherwise, (ii) one (1) Business Day after being
deposited with a nationally recognized overnight courier service as required
above, (iii) three (3) Business Days after being deposited in the United States
mail as required above, or (iv) on the day sent if sent by facsimile with
confirmation on or before 5:00 p.m. New York time on any Business Day or on the
next Business Day if so delivered after 5:00 p.m. New York time or on any day
other than a Business Day. Rejection or other refusal to accept or the inability
to deliver because of changed address of which no notice was given as herein
required shall be deemed to be receipt of the notice, election, request, or
demand sent.

                  SECTION 19.7      TRIAL BY JURY. BORROWER AND LENDER AND ALL
PERSONS CLAIMING BY, THROUGH OR UNDER BORROWER OR LENDER, HEREBY EXPRESSLY,
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO TRIAL BY JURY OF
ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (I) ARISING UNDER THIS AGREEMENT,
THE SECURITY INSTRUMENT, THE NOTE OR ANY OTHER LOAN DOCUMENT, INCLUDING, WITHOUT
LIMITATION, ANY PRESENT OR FUTURE MODIFICATION THEREOF OR (II) IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR
ANY OF THEM WITH RESPECT TO THIS AGREEMENT, THE SECURITY INSTRUMENT, THE NOTE OR
ANY OTHER LOAN DOCUMENT (AS NOW OR HEREAFTER MODIFIED) OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE
TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER SUCH CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION IS NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND BORROWER AND LENDER HEREBY AGREE
AND CONSENT THAT AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION MAY BE FILED
WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT HERETO TO THE WAIVER OF ANY
RIGHT TO TRIAL BY JURY. EACH OF LENDER AND BORROWER ACKNOWLEDGES
<PAGE>

THAT IT HAS CONSULTED WITH LEGAL COUNSEL REGARDING THE MEANING OF THIS WAIVER
AND ACKNOWLEDGES THAT THIS WAIVER IS AN ESSENTIAL INDUCEMENT FOR THE MAKING OF
THE LOAN. THIS WAIVER SHALL SURVIVE THE REPAYMENT OF THE LOAN.

                  SECTION 19.8      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 19.9      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 19.10     PREFERENCES. 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 19.11     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 Documents do not specifically and
expressly provide for the giving of notice by Lender to Borrower.

                  SECTION 19.12     EXPENSES; INDEMNITY.

                           (a)      Except as otherwise provided to the contrary
         in this Agreement, Borrower covenants and agrees to pay or, if Borrower
         fails to pay, to reimburse, Lender upon receipt of written notice from
         Lender for all reasonable out-of-pocket costs and expenses (including
         reasonable attorneys' fees and disbursements) incurred by Lender in
         connection with (i) the preparation, negotiation, execution and
         delivery of this Agreement and the other Loan Documents and the
         consummation of the transactions contemplated hereby and thereby and
         all the costs of furnishing all opinions by counsel for Borrower
         (including without limitation any opinions requested by Lender pursuant
         to this Agreement); (ii) Lender's ongoing performance and compliance
         with all agreements and conditions contained in this Agreement and the
         other Loan
<PAGE>

         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 requested
         by Borrower and any other documents or matters as required herein or
         under the other Loan Documents; (iv) securing Borrower's compliance
         with any requests made pursuant to the provisions of this Agreement;
         (v) the filing and recording fees and expenses, mortgage recording
         taxes, 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 Lien in favor of
         Lender pursuant to this Agreement and the other Loan Documents; (vi)
         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; (vii) 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 and (viii) procuring insurance
         policies pursuant to Section 6.1.11; provided, however, that Borrower
         shall not be liable for the payment of any such costs and expenses to
         the extent the same arise by reason of the gross negligence, illegal
         acts, fraud or willful misconduct of Lender. Any cost and expenses due
         and payable to Lender may be paid from any amounts in the Collection
         Account or the Holding Account in accordance with Section 3.1.6(c).

                           (b)      Subject to the non-recourse provisions of
         Section 18.1, Borrower will protect, indemnify and save harmless
         Lender, and all officers, directors, stockholders, members, partners,
         employees, agents, successors and assigns thereof (collectively, the
         INDEMNIFIED PARTIES) from and against all liabilities, obligations,
         claims, damages, penalties, causes of action, costs and expenses
         (including all reasonable attorneys' fees and expenses actually
         incurred) imposed upon or incurred by or asserted against the
         Indemnified Parties or the Property or any part of its interest therein
         (by Persons other than any Affiliate of an Indemnified Party), by
         reason of the occurrence or existence of any of the following (to the
         extent Proceeds payable on account of the following shall be
         inadequate; it being understood that in no event will the Indemnified
         Parties be required to actually pay or incur any costs or expenses as a
         condition to the effectiveness of the foregoing indemnity) prior to (i)
         the acceptance by Lender or its designee of a deed-in-lieu of
         foreclosure with respect to the Property, or (ii) an Indemnified Party
         or its designee taking possession or control of the Property or (iii)
         the foreclosure of the Security Instrument, except to the extent caused
         by the actual willful misconduct or gross negligence of the Indemnified
         Parties (other than such willful misconduct or gross negligence imputed
         to the Indemnified Parties because of their interest in the Property):
         (1) ownership of Borrower's interest in the Property, or any interest
         therein, or receipt of any Rents or other sum therefrom, (2) any
         accident, injury to or death of any persons or loss of or damage to
         property occurring on or about the Property or any appurtenances
<PAGE>

         thereto, (3) any design, construction, operation, repair, maintenance,
         use, non-use or condition of the Property or Appurtenances thereto,
         including claims or penalties arising from violation of any Legal
         Requirement or Insurance Requirement, as well as any claim based on any
         patent or latent defect, whether or not discoverable by Lender, any
         claim the insurance as to which is inadequate, and any Environmental
         Claim, (4) any Default under this Agreement or any of the other Loan
         Documents or any failure on the part of Borrower to perform or comply
         with any of the terms of any Lease the Condominium Declaration or the
         By-Laws within the applicable notice or grace periods, (5) any
         performance of any labor or services or the furnishing of any materials
         or other property in respect of the Property or any part thereof, (6)
         any negligence or tortious act or omission on the part of Borrower or
         any of its agents, contractors, servants, employees, sublessees,
         licensees or invitees, (7) any contest referred to in Section 7.3
         hereof, (8) any obligation or undertaking relating to the performance
         or discharge of any of the terms, covenants and conditions of the
         landlord contained in the Bloomberg Lease, the By-Laws or the
         Condominium Declaration, or (9) the presence at, in or under the
         Property or the Improvements of any Hazardous Substances in violation
         of any Environmental Law. Any amounts the Indemnified Parties are
         legally entitled to receive under this Section 19.12(b) which are not
         paid within fifteen (15) Business Days after written demand therefor by
         the Indemnified Parties or Lender, setting forth in reasonable detail
         the amount of such demand and the basis therefor, shall bear interest
         from the date of demand at the Default Rate, and shall, together with
         such interest, be part of the Indebtedness and secured by the Security
         Instrument. In case any action, suit or proceeding is brought against
         the Indemnified Parties by reason of any such occurrence, the
         Indemnified Parties shall provide prompt notice of any such action,
         suit or proceeding and Borrower shall, at Borrower's expense resist and
         defend such action, suit or proceeding or will cause the same to be
         resisted and defended by counsel at Borrower's reasonable expense for
         the insurer of the liability or by counsel designated by Borrower
         (unless reasonably disapproved by Lender promptly after Lender has been
         notified of such counsel); provided, however, that nothing herein shall
         compromise the right of Lender (or any Indemnified Party) to appoint
         its own counsel at Borrower's expense for its defense with respect to
         any action which in its reasonable opinion presents a conflict or
         potential conflict between Lender and Borrower that would make such
         separate representation advisable; provided further that if Lender
         shall have appointed separate counsel pursuant to the foregoing,
         Borrower shall not be responsible for the expense of additional
         separate counsel of any Indemnified Party unless in the reasonable
         opinion of Lender a conflict or potential conflict exists between such
         Indemnified Party and Lender. So long as Borrower is resisting and
         defending such action, suit or proceeding as provided above in a
         prudent and commercially reasonable manner, Lender and the Indemnified
         Parties shall not be entitled to settle such action, suit or proceeding
         without Borrower's consent which shall not be unreasonably withheld or
         delayed, and claim the benefit of this Section 19.12(b) with respect to
         such action, suit or proceeding and Lender agrees that it will not
         settle any such action, suit or proceeding without the consent of
         Borrower;
<PAGE>

         provided, however, that if Borrower is not diligently defending such
         action, suit or proceeding in a prudent and commercially reasonable
         manner as provided above, and Lender has provided Borrower with thirty
         (30) days' prior written notice, or shorter period if mandated by the
         requirements of applicable law, and opportunity to correct such
         determination, Lender may settle such action, suit or proceeding and
         claim the benefit of this Section 19.12(b) with respect to settlement
         of such action, suit or proceeding. Any Indemnified Party will give
         Borrower prompt notice after such Indemnified Party obtains actual
         knowledge of any potential claim by such Indemnified Party for
         indemnification hereunder.

                  SECTION 19.13     EXHIBITS AND SCHEDULES INCORPORATED. The
Exhibits and 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 19.14     OFFSETS, COUNTERCLAIMS AND DEFENSES. Any
assignee of Lender's interest in and to this Agreement, the Note 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 or 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 19.15     LIABILITY OF ASSIGNEES OF LENDER. No
assignee of Lender shall have any personal liability, directly or indirectly,
under or in connection with this Agreement or any other Loan Document or any
amendment or amendments hereto made at any time or times, heretofore or
hereafter, any different than the liability of Lender hereunder. In addition, no
assignee shall have at any time or times hereafter any personal liability,
directly or indirectly, under or in connection with or secured by any agreement,
lease, instrument, encumbrance, claim or right affecting or relating to the
Property or to which the Property is now or hereafter subject any different than
the liability of Lender hereunder. The limitation of liability provided in this
Section 19.15 is (i) in addition to, and not in limitation of, any limitation of
liability applicable to the assignee provided by law or by any other contract,
agreement or instrument, and (ii) shall not apply to any assignee's gross
negligence or willful misconduct.

                  SECTION 19.16     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.
<PAGE>

                           (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 or 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 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 19.17     PUBLICITY. All news releases, publicity or
advertising by Borrower, Lender or their Affiliates through any media intended
to reach the general public which refers to the Loan Documents or the financing
evidenced by the Loan Documents, shall be subject to the reasonable prior
written approval of Lender and Borrower.

                  SECTION 19.18     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 members and others with interests in Borrower and of the Property,
and agrees not to assert any right under any laws pertaining to the marshalling
of assets, the sale in inverse order of alienation, homestead exemption, the
administration of estates of decedents, or any other matters whatsoever to
defeat, reduce or affect the right of Lender under the Loan Documents to a sale
of the Property for the collection of the Indebtedness without any prior or
different resort for collection or of the right of Lender to the payment of the
Indebtedness out of the net proceeds of the Property in preference to every
other claimant whatsoever.

                  SECTION 19.19     WAIVER OF COUNTERCLAIM AND OTHER ACTIONS.
Borrower hereby expressly and unconditionally waives, in connection with any
suit, action or proceeding brought by Lender on this Agreement, the Note, the
Security Instrument or any Loan Document, any and every right it may have to (i)
interpose any counterclaim therein (other than a counterclaim which can only be
asserted in the suit, action or proceeding brought by Lender on this Agreement,
the Note, the Security Instrument or any Loan Document and cannot be maintained
in a separate action) and (ii) have any such suit, action or proceeding
consolidated with any other or separate suit, action or proceeding.

                  SECTION 19.20     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 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
<PAGE>

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

                  SECTION 19.21     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, are
superseded by the terms of this Agreement and the other Loan Documents and
unless specifically set forth in a writing contemporaneous herewith the terms,
conditions and provisions of any and all such prior agreements do not survive
execution of this Agreement.

                  SECTION 19.22     USA PATRIOT ACT NOTIFICATION. The following
notification is provided to Borrower pursuant to Section 326 of the USA Patriot
Act of 2001, 31 U.S.C. Section 5318: IMPORTANT INFORMATION ABOUT PROCEDURES FOR
OPENING A NEW ACCOUNT. To help the government fight the funding of terrorism and
money laundering activities, Federal law requires all financial institutions to
obtain, verify, and record information that identifies each person or entity
that opens an account, including any deposit account, treasury management
account, loan, other extension of credit, or other financial services product.
What this means for Borrower: When Borrower opens an account, if Borrower is an
individual, the Administrative Agent will ask for Borrower's name, taxpayer
identification number, residential address, date of birth, and other information
that will allow Lender to identify Borrower, and, if Borrower is not an
individual, Lender will ask for Borrower's name, taxpayer identification number,
business address, and other information that will allow Lender to identify
Borrower. Lender may also ask, if Borrower is an individual, to see Borrower's
driver's license or other identifying documents, and, if Borrower is not an
individual, to see Borrower's legal organizational documents or other
identifying documents.

                  SECTION 19.23     TAX TREATMENT. Lender (and each employee,
representative or other agent of Lender) may disclose to any and all Persons,
without limitation of any kind, the "tax treatment" and "tax structure" (in each
case, within the meaning of Treasury Regulation Section 1.6011-4) of the
transactions contemplated hereby and all materials of any kind (including
opinions or other tax analyses) that are or have been provided to Lender
relating to such tax treatment or tax structure, other than information or
materials for which nondisclosure is reasonably necessary in order to comply
with applicable securities laws so long as disclosure is not otherwise limited.
<PAGE>

                  SECTION 19.24     COUNTERPARTS. This Agreement may be executed
in multiple counterparts, each of which shall constitute an original, but all of
which shall constitute one document.

                         [NO FURTHER TEXT ON THIS PAGE]
<PAGE>

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

                                BORROWER:

                                731 OFFICE ONE LLC, a Delaware limited
                                liability company

                                By:   731 OFFICE ONE HOLDING LLC, a
                                Delaware limited liability company, its sole
                                member

                                      By:   ALEXANDER'S INC., a Delaware
                                      corporation, its sole member

                                      By:   /s/    Brian Kurtz
                                            ------------------------------------
                                            Name:  Brian Kurtz
                                            Title: Assistant Secretary

                                LENDER:

                                GERMAN AMERICAN CAPITAL CORPORATION, a
                                Maryland corporation

                                By:   /s/    Christopher Tognola
                                      -----------------------------------------
                                      Name:  Christopher Tognola
                                      Title: Vice President

                                By:   /s/    Thomas R. Traynor
                                      -----------------------------------------
                                      Name:  Thomas R. Traynor
                                      Title: Authorized Signatory<PAGE>
                                                                   Exhibit 10.21

                       AMENDED, RESTATED AND CONSOLIDATED
                     MORTGAGE, SECURITY AGREEMENT, FINANCING
                       STATEMENT AND ASSIGNMENT OF LEASES,
                           RENTS AND SECURITY DEPOSITS

                                 by and between

                               731 OFFICE ONE LLC
                                   as Borrower

                      having an address for notice purposes
                              c/o Alexander's Inc.
                               888 Seventh Avenue
                            New York, New York 10019

                                       and

                      GERMAN AMERICAN CAPITAL CORPORATION,
                                    as Lender

                              having an address at
                                 60 Wall Street
                            New York, New York 10005

Street Address:    731 Lexington Avenue
                   New York, New York

County:            New York
Section:
Block:             1313
Lot:               1002 and 1003

                          Dated as of February 13, 2004

                       Prepared By, Record and Return to:
                    Skadden, Arps, Slate, Meagher & Flom LLP
                                Four Times Square
                          New York, New York 10036-6522
                         Attention: Harvey R. Uris, Esq.
<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                           Page
<S>                                                                        <C>
RECITALS.............................................................        1
RESTATEMENT OF MORTGAGE..............................................        2
SECURED INDEBTEDNESS.................................................        3
GRANTING CLAUSES.....................................................        4
HABENDUM.............................................................        8
1.  DEFINITIONS......................................................        8
2.  WARRANTY.........................................................       10
3.  AFFIRMATIVE COVENANTS............................................       10
4.  NEGATIVE COVENANTS...............................................       12
5.  LICENSE TO COLLECT RENTS.........................................       13
6.  SECURITY AGREEMENT...............................................       13
7.  LEASE SUBORDINATION AND ATTORNMENT...............................       14
8.  PROTECTION OF SECURITY; COSTS AND EXPENSES.......................       16
9.  LENDER'S RIGHT TO PERFORM........................................       16
10.  REMEDIES........................................................       16
11.  APPLICATION OF PROCEEDS.........................................       22
12.  ASSIGNMENT OF CONDOMINIUM RIGHTS................................       23
13.  MISCELLANEOUS...................................................       24
14.  STATE LAW PROVISIONS............................................       27
EXHIBIT A-1..........................................................      A-1
EXHIBIT A-2..........................................................      A-2
SCHEDULE 1...........................................................      1-1
SCHEDULE 2...........................................................      2-1

</TABLE>
<PAGE>
                       AMENDED, RESTATED AND CONSOLIDATED
                     MORTGAGE, SECURITY AGREEMENT, FINANCING
                       STATEMENT AND ASSIGNMENT OF LEASES,
                           RENTS AND SECURITY DEPOSITS

            AMENDED, RESTATED AND CONSOLIDATED MORTGAGE, SECURITY AGREEMENT,
FINANCING STATEMENT AND ASSIGNMENT OF LEASES, RENTS AND SECURITY DEPOSITS, dated
as of February 13, 2004 (together with all amendments and supplements, this
SECURITY INSTRUMENT), is made by and between 731 OFFICE ONE LLC, a Delaware
limited liability company (BORROWER), having an address for notice purposes c/o
Alexander's Inc. at 888 Seventh Avenue, New York, New York 10019, and GERMAN
AMERICAN CAPITAL CORPORATION, a Maryland corporation, having an address for
notice purposes at 60 Wall Street, New York, New York 10005 (together with its
successors and assigns, LENDER).

                                    RECITALS

            WHEREAS, Borrower is the owner of (i) the real property commonly
known as Office Unit 1 of the Beacon Court Condominium located at 731 Lexington
Avenue in the City of New York, County of New York and State of New York such
ownership interest being comprised of a fee simple interest in the real property
described in EXHIBIT A-1 attached hereto and made a part hereof (the CONDOMINIUM
UNIT), (ii) the real property commonly known as Office Unit 2 of the Beacon
Court Condominium located at 731 Lexington Avenue in the City of New York,
County of New York and State of New York such ownership interest being comprised
of a fee simple interest in the real property referred to as "Office Unit 2" (as
defined in the Condominium Documents) and described in EXHIBIT A-2 attached
hereto and made a part hereof (the OFFICE UNIT 2 or UPPER OPTION SPACE, together
with the Condominium Unit, collectively the COMMERCIAL UNITS) and (iii) title to
the Improvements (as hereinafter defined);

            WHEREAS, Lender is the present owner and holder of the promissory
note described on SCHEDULE 1 attached hereto and made a part hereof (the
EXISTING NOTE), which Existing Note evidences an indebtedness of Borrower to
Lender in the outstanding principal amount of $400,000,000;

            WHEREAS, the Existing Note is secured by the mortgage described on
SCHEDULE 2 attached hereto and made a part hereof (the EXISTING MORTGAGE), which
Existing Mortgage constitutes a lien on the Property (as hereinafter defined)
securing the outstanding principal sum of $400,000,000;

            WHEREAS, pursuant to that certain Loan and Security Agreement (the
LOAN AGREEMENT), dated the date hereof, Lender has agreed to make a loan to
Borrower in the maximum principal amount of $400,000,000, such loan to be
comprised of the outstanding principal amount of the Existing Note;
<PAGE>
            WHEREAS, in accordance with the terms and conditions of the Loan
Agreement, Borrower and Lender are entering into an Amended, Restated and
Consolidated Note, dated as of the date hereof (together with all extensions,
renewals, modifications, consolidations, substitutions, exchanges replacements
and restatements thereof, the NOTE) pursuant to which the terms and conditions
of the Existing Note are being modified, amended, restated and consolidated in
their entirety;

            WHEREAS, the Note shall constitute a single indebtedness (the LOAN)
in the maximum principal amount of $400,000,000 (the PRINCIPAL AMOUNT) payable
in accordance with the terms of the Note and the Loan Agreement;

            WHEREAS, Borrower and Lender have agreed in the manner hereinafter
set forth to amend, modify and restate in their entirety the terms and
provisions of the Existing Mortgage on the terms and conditions hereinafter set
forth; and

            WHEREAS, Borrower and Lender intend these Recitals to be a material
part of this Security Instrument.

                             RESTATEMENT OF MORTGAGE

            The Existing Mortgage and the lien thereof is hereby modified so
that it shall constitute in law one mortgage, a single first priority lien,
covering the Property and securing a portion of the indebtedness evidenced by
the Note in the principal sum of $400,000,000, together with interest thereon as
provided in the Note, and the terms, covenants, conditions and provisions of the
Existing Mortgage, as so modified are hereby modified, amended, restated and
consolidated in their entirety so that henceforth the terms, covenants,
conditions and provisions of the Existing Mortgage shall read and be as set
forth in this Security Instrument and Borrower agrees to comply with and be
subject to all of the terms, covenants and conditions of this Security
Instrument.

            Borrower hereby certifies that this Security Instrument secures the
same indebtedness evidenced by the Existing Note (as modified, amended, restated
and increased by the Note) and secured by the Existing Mortgage (as modified
pursuant the immediately preceding paragraph) and secures no further or other
indebtedness or obligation. Neither this Security Instrument nor anything
contained herein shall be construed as a substitution or novation of Borrower's
indebtedness to Lender or of the Existing Mortgage, which shall remain in full
force and effect as hereby confirmed, modified, restated and superseded.

            This Security Instrument is an extension and continuation of the
existing indebtedness evidenced and secured by the Existing Note and the
Existing Mortgage and as increased pursuant to the Note and secured hereby.

            NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS SECURITY
INSTRUMENT, THE MAXIMUM PRINCIPAL AMOUNT OF INDEBTEDNESS SECURED BY THIS
SECURITY INSTRUMENT AT EXECUTION OR WHICH UNDER ANY CONTINGENCY MAY BE SECURED
HEREBY AT ANY TIME HEREAFTER IS $400,000,000.

                                       2
<PAGE>
            The Existing Mortgage, as modified, amended, restated and
consolidated in its entirety pursuant to this Security Instrument, and the
obligations of Borrower hereunder, are hereby ratified and confirmed, and shall
remain in full force and effect until the payment in full of the Indebtedness
(as hereinafter defined).

                              SECURED INDEBTEDNESS

            NOW, THEREFORE, in consideration of the Loan to Borrower evidenced
by the Note and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Borrower hereby agrees as follows:

            TO SECURE:

            (i) payment and performance of all covenants, conditions,
      liabilities and obligations of Borrower to Lender contained in the Loan
      Agreement and the other Loan Documents; and

            (ii) payment of the indebtedness evidenced by, the Note plus all
      interest and all fees, payable thereunder; and

            (iii) payment and performance of all covenants, conditions,
      liabilities and obligations contained in this Security Instrument and any
      extensions, renewals or modifications hereof; and

            (iv) payment and performance of all covenants, conditions,
      liabilities and obligations of Borrower contained in the Assignment of
      Leases, Rents and Security Deposits, dated as of the date hereof (together
      with any extensions, renewals or modifications thereof, the ASSIGNMENT OF
      LEASES), between Borrower, as assignor, and Lender, as assignee; and

            (v) payment and performance of all covenants, conditions,
      liabilities and obligations of Borrower contained in each of the other
      Loan Documents (as defined below); and

            (vi) without limiting the foregoing, payment of all indebtedness,
      liabilities, and amounts from time to time incurred by Lender pursuant to
      the Note, this Security Instrument, the Loan Agreement or such other Loan
      Documents, even if the aggregate amount of the monetary obligation
      outstanding at any one time exceeds the face amount of the Note (all of
      the foregoing indebtedness, monetary liabilities and obligations set forth
      in clauses (i) through (v) above and this clause (vi), collectively, the
      INDEBTEDNESS); and

            (vii) payment of the Indebtedness together with the payment and
      performance of all other covenants, conditions, liabilities and
      obligations described and set forth in clauses (i) through (vi) above and
      in this clause (vii), collectively, the OBLIGATIONS.

                                       3
<PAGE>
                            GRANTING CLAUSES

            NOW, THEREFORE, THIS SECURITY INSTRUMENT WITNESSETH: that Borrower,
in consideration of the premises, the Indebtedness evidenced by the Note, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged (a) has mortgaged, warranted, granted, bargained, sold,
alienated, released, confirmed, conveyed, pledged and assigned, and (b) by these
presents does hereby irrevocably grant and create a first priority Lien (as
defined below) on and security interest in, subject to the Permitted
Encumbrances and the provisions hereof and of the other Loan Documents, and does
hereby MORTGAGE, GRANT A SECURITY INTEREST IN AND PLEDGE to Lender and its
successors and assigns forever, all Borrower's estate, right, title and interest
now owned or hereafter acquired in, to and under any and all the property
(collectively, the PROPERTY) described in the following Granting Clauses:

            (A) the Commercial Units;

            (B) all lands, estates, development rights and appurtenant interest
      now or hereafter acquired by Borrower for use in connection with the
      Commercial Units and the development of the Commercial Units, and all
      additional lands and estates therein which may, from time to time, by
      supplemental mortgage or otherwise, be expressly made subject to the lien
      of this Security Instrument;

            (C) all of Borrower's right, title and interest in and to the
      buildings, foundations, structures, improvements and fixtures now or
      hereafter located or erected on the Commercial Units (the IMPROVEMENTS);

            (D) all of Borrower's right, title and interest in and to (i) all
      streets, avenues, roads, alleys, passages, places, sidewalks, strips and
      gores of land and ways, existing or proposed, public or private, adjacent
      to the Commercial Units, and all reversionary rights with respect to the
      vacation of said streets, avenues, roads, alleys, passages, places,
      sidewalks and ways in the land lying thereunder; (ii) all air, light,
      lateral support, development, drainage, oil, gas and mineral rights,
      options to purchase or lease, waters, water courses and riparian rights
      now or hereafter pertaining to or used in connection with the Commercial
      Units and/or the Improvements; (iii) all and singular, the tenements,
      hereditaments, rights of way, easements, appendages and appurtenances and
      property now or hereafter belonging or in any way appertaining to the
      Commercial Units and/or the Improvements; and (iv) all estate, right,
      title, claim or demand whatsoever, either at law or in equity, in
      possession or expectancy, of, in and to the Commercial Units and/or the
      Improvements (collectively, the APPURTENANCES);

            (E) all of Borrower's right, title and interest in and to the
      machinery, appliances, apparatus, equipment, fittings, fixtures,
      materials,

                                       4
<PAGE>
      articles of personal property and goods of every kind and nature
      whatsoever used in connection with the Commercial Units and/or the
      Improvements and all additions to and renewals and replacements thereof,
      and all substitutions therefor, now or hereafter affixed to, attached to,
      placed upon or located upon or in the Commercial Units and/or the
      Improvements, or any part thereof, and used in connection with the use,
      ownership, management, maintenance, enjoyment or operation of the
      Commercial Units and/or the Improvements in any present or future
      occupancy or use thereof and now owned or leased (to the extent permitted
      by the applicable lease) or hereafter owned or leased by Borrower,
      including, but without limiting the generality of the foregoing, all
      heating, lighting, laundry, cooking, incinerating, loading, unloading and
      power equipment, boilers, dynamos, engines, pipes, pumps, tanks, motors,
      conduits, switchboards, plumbing, lifting, cleaning, fire prevention, fire
      extinguishing, refrigerating, ventilating and communications apparatus,
      air cooling and air conditioning apparatus, building materials and
      equipment, elevators, escalators, carpeting, shades, draperies, awnings,
      screens, doors and windows, blinds, furnishings (other than equipment and
      personal property of tenants or invitees to the Commercial Units and/or
      the Improvements, or any part thereof) (collectively called BUILDING
      EQUIPMENT);

            (F) all of Borrower's right, title and interest as lessor or
      licensor, as the case may be, in, to and under 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 by Borrower, Manager,
      Guarantor or any of their Affiliates 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 by Borrower, Manager,
      Guarantor or any of their Affiliates 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, including, without
      limitation, any cash and securities deposited thereunder (collectively,
      LEASES), the grant of such cash and securities hereunder being expressly
      subject to the provisions of the applicable Leases and all of Borrower's
      right, title and interest, subject to the provisions of Section 5, in the
      right to receive and collect the revenues, income, rents, issues, profits,
      royalties and other benefits payable under any of the Leases
      (collectively, RENTS), and all revenues, income, rents, issues and profits
      otherwise arising from the use or enjoyment of all or any portion of the
      Property;

            (G) subject to the provisions of Section 6.2 of the Loan Agreement,
      all of Borrower's right, title and interest in and to all proceeds,
      judgments, claims, compensation, awards or payments hereafter made to

                                       5
<PAGE>
      Borrower for the taking, whether permanent or temporary, by condemnation,
      eminent domain, or for any conveyance made in lieu of such taking, of the
      whole or any part of the Property, including, without limitation, all
      proceeds, judgments, claims, compensation awards or payments for changes
      of grade of streets or any other injury to or decrease in the value of the
      Property, whether direct or consequential, which awards and payments are,
      subject to the provisions of Article VI of the Loan Agreement, hereby
      assigned to Lender, who is hereby authorized to collect and receive the
      proceeds thereof and to give proper receipts and acquittances therefor,
      and to apply the same toward the payment of the Indebtedness in such order
      as Lender may determine in accordance with the provisions of this Security
      Instrument and the Loan Agreement without regard to the adequacy of
      Lender's security hereunder and notwithstanding the fact that the amount
      thereof may not then be due and payable, and toward the payment of
      reasonable counsel fees, costs and disbursements incurred by Lender in
      connection with the collection of such awards or payments; and Borrower
      hereby agrees, upon reasonable request, to make, execute and deliver any
      and all further assignments and other instruments sufficient for the
      purpose of confirming this assignment of said proceeds, judgments, claims,
      compensation awards or payments to Lender, free, clear and discharged of
      any encumbrances of any kind or nature whatsoever other than the Permitted
      Encumbrances (as defined in the Loan Agreement);

            (H) subject to the provisions of Section 6.2 of the Loan Agreement,
      all of Borrower's right, title and interest in and to all unearned
      premiums paid under insurance policies now or hereafter obtained by
      Borrower to the extent the same insure the Property and any other
      insurance policies obtained by Borrower required to be maintained pursuant
      to Section 6.1 of the Loan Agreement to the extent the same insure the
      Property, including, without limitation, liability insurance policies and
      Borrower's interest in and to all proceeds of the conversion and the
      interest payable thereon, voluntary or involuntary, of] the Property, or
      any part thereof, into cash or liquidated claims including, without
      limitation, proceeds of casualty insurance, title insurance or any other
      insurance maintained on or with respect to the Property (other than
      liability insurance);

            (I) all right, title and interest of Borrower in and to all
      extensions, improvements, betterments, renewals, substitutes and
      replacements of, and all additions and Appurtenances to, the Property,
      hereafter acquired by or released to Borrower or constructed, assembled or
      placed by Borrower on the Property, and all conversions of the security
      constituted thereby; immediately upon such acquisition, release,
      construction, assembling, placement or conversion, as the case may be, and
      in each such case, to the extent permitted by law, without any further
      mortgage, conveyance, assignment or other act by Borrower, all such

                                       6
<PAGE>
      extensions, improvements, betterments, renewals, substitutes and
      replacements shall become subject to the Lien of this Security Instrument
      as fully and completely, and with the same effect, as though now owned by
      Borrower and specifically described herein;

            (J) all of Borrower's right, title and interest in, to and under, to
      the extent the same may be encumbered or assigned by Borrower pursuant to
      the terms thereof and to the extent permitted by applicable law, and
      without impairment of the validity or enforceability thereof, (i) the
      Condominium Declaration and the By-Laws (as defined in the Loan Agreement)
      and all contracts and agreements relating to the Property (other than the
      Leases), and other documents, books and records related to the ownership
      and operation of the Property; (ii) to the extent permitted by law all
      Licenses (including, to the extent permitted by law, any licenses held by
      Borrower permitting the sale of liquor at any of the Property the transfer
      and/or assignment of which is permitted by law without filing or other
      qualification), warranties, guaranties, building permits and government
      approvals relating to or required for the construction, completion,
      occupancy and operation of the Property; (iii) all plans and
      specifications for the construction of the Improvements, including,
      without limitation, installations of curbs, sidewalks, gutters,
      landscaping, utility connections and all fixtures and equipment necessary
      for the construction, operation and occupancy of the Improvements; (iv)
      all such other contracts and agreements (other than the Leases) from time
      to time executed by Borrower relating to the ownership, leasing,
      construction, maintenance, operation, occupancy or sale of the Property,
      together with all rights of Borrower to compel performance of the terms of
      such contracts and agreements; and (v) subject to the terms of the Loan
      Agreement, the Collateral Accounts (as defined in the Loan Agreement) and
      any funds in such Collateral Accounts from time to time (it being
      understood that at such time as Borrower shall withdraw any amounts from
      any Collateral Accounts in accordance with the provisions of the Loan
      Agreement, the same shall cease to constitute part of the Property);

            (K) to the extent the same may be encumbered or assigned by Borrower
      pursuant to the terms thereof and to the extent permitted by law, all of
      Borrower's right, title and interest in, to and under credit card
      receivables, escrows, documents, instruments, and general intangibles, as
      the foregoing terms are defined in the UCC (as hereinafter defined), in
      any case which now or hereafter relate to, are derived from, or are used
      in connection with the Property, and all contract rights, franchises,
      books, records, plans, specifications, Licenses, actions and causes of
      action which now or hereafter relate to, are derived from or used in
      connection with the Property or the use, operation, maintenance, occupancy
      or enjoyment thereof or the conduct of any business or activities thereon
      (collectively, the property described in the foregoing paragraphs (F),
      (G), (H), (I) and this paragraph (K), the INTANGIBLES); and

                                       7
<PAGE>
            (L) all of Borrower's right, title and interest in all proceeds,
      both cash and noncash, of the foregoing which may be sold or otherwise be
      disposed of pursuant to the terms hereof.

            UPON CONDITION that, if no Event of Default (as hereinafter defined)
has occurred and is continuing, Borrower shall be permitted to possess and use
the Property, and to use the rents, issues, profits, revenues and other income
of the Property as provided in this Security Instrument, the Loan Agreement and
the other Loan Documents (as hereinafter defined).

                                    HABENDUM

            TO HAVE AND TO HOLD THE PROPERTY hereby conveyed, or mentioned and
intended so to be, whether now owned or held or hereafter acquired, subject only
to the Permitted Encumbrances and the terms hereof, unto Lender, its successors
and assigns, forever, upon the terms and conditions set forth herein and to
secure the performance of, and compliance with, the obligations, covenants and
conditions of this Security Instrument and the other Loan Documents all as
herein set forth.

      1. DEFINITIONS. Wherever used in this Security Instrument, the following
terms, and the singular and plural thereof, shall have the following meanings.
All capitalized terms used but not otherwise defined herein shall have the
meanings assigned to them in the Loan Agreement:

            APPURTENANCES: Shall have the meaning provided in Granting Clause
(D).

            ASSIGNMENT OF LEASES: Shall have the meaning provided in the
Recitals.

            BLOOMBERG SNDA: Shall mean that certain Subordination,
Non-Disturbance, Attornment Estoppel and Lease Modification Agreement, dated as
of the date hereof, by and between Lender, Borrower and Bloomberg.

            BORROWER: Shall have the meaning provided in the Introductory
Paragraph.

            BUILDING EQUIPMENT: Shall have the meaning provided in Granting
Clause (E).

            COMMERCIAL UNITS: Shall have the meaning provided in the Recitals.

            CONDOMINIUM UNIT: Shall have the meaning provided in the Recitals.

            CLOSING DATE: Shall mean the date of this Security Instrument.

            EVENTS OF DEFAULT: Shall mean the occurrence of an "Event of
Default" pursuant to the Loan Agreement or a default, beyond applicable notice
and cure periods, in any other Loan Document.

                                       8
<PAGE>
            IMPROVEMENTS: Shall have the meaning provided in Granting Clause
(C).

            INDEBTEDNESS: Shall have the meaning provided in Recitals.

            INTANGIBLES: Shall have the meaning provided in Granting Clause (K).

            LEASES: Shall have the meaning provided in Granting Clause (F).

            LENDER: Shall have the meaning provided in the Recitals.

            LICENSES: Shall mean all certifications, permits, licenses and
approvals, including without limitation, liquor licenses, certificates of
completion and occupancy permits required of Borrower for the legal use,
occupancy and operation of the Property as a Class A office building as used,
occupied and operated on the date hereof.

            LOAN: Shall have the meaning provided in the Recitals.

            LOAN AGREEMENT: Shall have the meaning provided in the Recitals.

            NOTE: Shall have the meaning provided in the Recitals.

            OFFICE UNIT 2: Shall have the meaning provided in the Condominium
Documents.

            PRINCIPAL AMOUNT: Shall have the meaning provided in the Recitals.

            PROPERTY: Shall have the meaning provided in the recitals to the
Granting Clause.

            RENTS: Shall have the meaning provided in Granting Clause (F).

            UPPER OPTION SPACE: Shall have the meaning provided in the Bloomberg
Lease.

            The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Security Instrument shall refer to this Security
Instrument as a whole and not to any particular provision of this Security
Instrument, and section, schedule and exhibit references are to this Security
Instrument unless otherwise specified. The words "includes" and "including" are
not limiting and mean "including without limitation."

            In the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including;" the words "to"
and "until" each mean "to but excluding," and the word "through" means "to and
including."

            References to agreements and other documents shall be deemed to
include all subsequent amendments and other modifications thereto executed in
writing by all of the parties thereto and, if Lender's consent was required for
the original of any such document, consented to by Lender. All references in
this Security Instrument to the plural of any document described herein shall
mean all of such documents collectively.

                                       9
<PAGE>
            References to statutes or regulations are to be construed as
including all statutory and regulatory provisions consolidating, amending, or
replacing the statute or regulation.

            The captions and headings of this Security Instrument are for
convenience of reference only and shall not affect the construction of this
Security Instrument.

            Borrower represents and warrants to, and covenants and agrees with,
Lender as follows:

      2. WARRANTY.

            (a) TITLE. Borrower represents and warrants that Borrower owns good,
and insurable fee simple title to the Commercial Units and good title to the
balance of the Property, subject only to the Permitted Encumbrances. This
Security Instrument, upon its due execution and proper recordation, is and will
remain a valid and enforceable (and, with respect to all personalty as to which
security interests are governed by Article 9 of the UCC (and the applicable
definitions and cross referenced sections set forth in said Article), upon
proper recordation and the filing of a financing statement and any necessary
continuation statements required under the UCC) perfected first Lien on and
security interest on Borrower's right, title and interest in and to Property
subject to the Permitted Encumbrances.

            (b) ALL PROPERTY. The Property constitutes all of the real property,
personal property, equipment and fixtures currently (i) owned by Borrower or
(ii) used in the operation of the business located on the Property, other than
items owned by any Manager or Bloomberg.

            (c) ENFORCEABILITY OF SECURITY INSTRUMENT. This Security Instrument
is the legal, valid and binding obligation of Borrower, enforceable against
Borrower in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, moratorium or similar laws affecting the
enforcement of creditors rights generally and subject to general principles of
equity (regardless of whether enforcement is sought in a proceeding of equity or
at law).

      3. AFFIRMATIVE COVENANTS.

            (a) PAYMENT OF OBLIGATIONS. Borrower shall promptly pay when due the
principal of and interest on the Indebtedness and all other payment Obligations,
all in lawful money of the United States of America in accordance with the Note,
and shall further perform and in a timely manner all Obligations of Borrower.
All sums payable by Borrower hereunder shall be paid without demand (unless
otherwise provided hereunder or under the other Loan Documents), counterclaim
(other than mandatory counterclaims), offset, deduction (except as required by
law) or defense (other than the defense of payment). To the extent permitted by
law, Borrower waives all rights now or hereafter conferred by statute or
otherwise to any such demand (unless otherwise provided hereunder or under the
other Loan Documents), counterclaim (other than mandatory counterclaims),
setoff, deduction or defense (other than the defense of payment).

                                       10
<PAGE>
            (b) PERFORMANCE AND OBSERVANCE OF LOAN AGREEMENT COVENANTS. Borrower
will duly perform, observe and comply with all of the affirmative and negative
covenants, agreements and obligations to be performed, observed and complied
with by Borrower, and all of the other terms and conditions applicable to
Borrower, under the terms of the Loan Agreement and any other Loan Document, as
if each such covenant, agreement, obligation, term and condition were expressly
set forth herein in full. Without limiting the generality of the foregoing,
Borrower will maintain the Property, pay Impositions and Other Charges, obtain,
pay and maintain insurance, keep the Property free of Liens (other than
Permitted Encumbrances), pay the utility charges for the Property, perform
alterations and repairs in respect of the Property, cause the Property to comply
with all Legal Requirements, fund the Collateral Accounts, each to the extent
required by the Loan Agreement, restore the Property upon any casualty or
Taking, and lease the Property as permitted by the Loan Agreement and the
Bloomberg Lease (for so long as such lease is in effect) all in accordance with
and subject to all of the applicable terms and conditions of this Security
Instrument, the Loan Agreement and the other Loan Documents.

            (c) INSURANCE. Borrower shall, at its sole cost and expense,
continuously keep and maintain insurance in respect of the Property and
Borrower's operations thereat, of the type and in the form and with insurers,
all to the extent provided in Section 6.1 of the Loan Agreement. All Proceeds to
which Borrower may be entitled resulting from damage to or destruction of the
Property or any part hereof by a casualty or a Taking shall be distributed and
applied towards restoration of the Property or repayment of the Obligations in
accordance with the provisions of Section 6.2 of the Loan Agreement.

            (d) MAINTENANCE OF VALIDITY AND RECORDING.

            (i) Borrower covenants that it will forthwith after the execution
      and delivery of this Security Instrument and thereafter as necessary from
      time to time cause this Security Instrument and the other Loan Documents
      and any continuation statement or similar instrument relating to any
      property subject thereto or to any property intended to be encumbered,
      granted, conveyed, transferred and assigned by this Security Instrument to
      be filed, registered and recorded in such manner and in such places as may
      be required by law in order to publish notice of and to protect the
      validity thereof or the grant thereby of the property subject thereto and
      the interest and rights of Lender therein. Borrower covenants that it has
      paid or will pay or cause to be paid all taxes and fees incident to such
      filing, registration and recording, and all reasonable expenses incident
      to the preparation, execution and acknowledgment thereof, and of any
      instrument of further assurance, and all federal or state stamp taxes or
      other charges arising out of or in connection with the execution and
      delivery of such instruments.

            (ii) Borrower shall maintain the validity, perfection, priority and
      effectiveness of this Security Instrument and the other Loan Documents.
      Unless otherwise permitted in this Security Instrument and the other Loan
      Documents,

                                       11
<PAGE>
      Borrower will not take any action, will not permit action to be taken by
      others and will not omit to take any action, nor will Borrower give any
      notice, approval or consent or exercise, waive or modify any rights under
      or in respect of the Permitted Encumbrances, which action, omission,
      notice, approval, consent or exercise, waiver or modification of rights
      would release Borrower from, or reduce any of Borrower's obligations or
      liabilities under, or would result in the termination, surrender or
      assignment of, or the amendment or modification of, any of the Loan
      Documents, or would impair the validity of this Security Instrument or any
      of the other Loan Documents, or would affect the Property in any material
      adverse respect, without Lenders consent, and any attempt to do any of the
      foregoing without such consent shall be of no force and effect.

            (iii) Borrower, at its expense, will execute, acknowledge and
      deliver all such instruments and take all such actions as Lender from time
      to time reasonably may request or as may be reasonably necessary or proper
      for the better assuring to Lender of the properties and rights now or
      hereafter subject to the Lien hereof or intended so to be.

      4. NEGATIVE COVENANTS. Borrower covenants and agrees that, without
Lender's prior written consent, Borrower shall not:

            (a) incur, create or assume any Debt other than Permitted Debt or
Transfer or lease all or any part of the Property or any interest therein,
except as permitted in the Loan Agreement;

            (b) make advances or make loans to any Person, or hold any
investments, except as expressly permitted pursuant to the terms of this
Security Instrument or any other Loan Document;

            (c) partition the Property;

            (d) commingle its assets with the assets of any of its Affiliates;

            (e) guarantee any obligations of any Person; or

            (f) Transfer any asset other than in the ordinary course of business
except as permitted by the Loan Agreement .

      5. LICENSE TO COLLECT RENTS. Lender and Borrower hereby confirm that for
so long as no Event of Default shall have occurred and is continuing, Lender has
granted to Borrower a revocable license to collect and use the Rents as they
become due and payable in accordance with the provisions of the Loan Agreement
and the Assignment of Leases; provided that the existence of such right shall
not operate to subordinate the Assignment of Leases to any subsequent
assignment, in whole or in part by Borrower, and any such subsequent assignment
shall be subject to Lender's rights under this Security Instrument. Borrower
further agrees to execute and deliver such assignments of Leases and Rents as
Lender may from time to time reasonably request in order to better assure,
transfer and confirm to Lender the rights intended to be granted to

                                       12
<PAGE>
Lender with respect thereto. In accordance with the provisions of the Assignment
of Leases, upon the occurrence and during the continuance of an Event of Default
Borrower agrees that, subject to applicable laws, Lender may, but shall not be
obligated to, assume the management of the Property, and collect the Rents,
applying the same upon the Obligations. Borrower hereby authorizes and directs
all tenants, purchasers or other persons occupying, utilizing or acquiring any
interest in any part of the Property to pay all Rents to Lender upon Lender's
request. In the event Lender actually receives such Rents after an Event of
Default, any application of the Rents by Lender shall not constitute a
misappropriation of the Rents by Borrower pursuant to Section 18.1 of the Loan
Agreement. Upon the occurrence and during the continuance of an Event of
Default, Lender shall have and hereby expressly reserves the right and privilege
(but assumes no obligation), to demand, collect, sue for, receive and recover
the Rents, or any part thereof, now existing or hereafter made, and apply the
same in accordance with this Security Instrument, the Assignment of Leases, and
applicable law. The terms of this Section 5 are in all respects subject to the
terms of Section 10(p) and Section 15(a) hereof.

      6. SECURITY AGREEMENT. This Security Instrument constitutes a financing
statement and, to the extent required under UCC 9-402(6) because portions of the
Property may constitute fixtures, this Security Instrument is to be filed in the
office where a mortgage for the Commercial Units would be recorded. Lender also
shall be entitled to proceed against all or portions of the Property in
accordance with the rights and remedies available under UCC 9-501(d). For the
purposes of this Security Instrument, Borrower is deemed to be the Debtor, and
Lender is deemed to be the Secured Party, as those terms are defined and used in
the UCC. Borrower agrees that the Indebtedness and Obligations secured by this
Security Instrument are further secured by security interests in all of
Borrower's right, title and interest in and to fixtures, equipment, and other
personal property covered by the UCC, if any, which are used upon, in, or about
the Commercial Units or the Improvements (or any part thereof) or which are used
by Borrower or any other person in connection with the Property. Borrower grants
to Lender a valid and effective first priority security interest (subject to any
Permitted Encumbrances) in all of Borrower's right, title and interest in and to
such personal property (but only to the extent permitted in the case of leased
personal property), together with all replacements, additions, and proceeds.
Except for Permitted Encumbrances, Borrower agrees that, without the written
consent of Lender, no other security interest will be created under the
provisions of the UCC and no lease will be entered into with respect to any
goods, fixtures, equipment, appliances, or articles of personal property now
attached to or used or to be attached to or used in connection with the Property
except as otherwise permitted hereunder or in any other Loan Document. Borrower
agrees that all property of every nature and description covered by the Lien and
charge of this Security Instrument together with all such property and interests
covered by this security interest are encumbered as a unit, and upon and during
the continuance of an Event of Default by Borrower, all of the Property, at
Lender's option, may be foreclosed upon or sold in the same or different
proceedings or at the same or different time, subject to the provisions of
applicable law. The filing of any financing statement relating to any such
property or rights or interests shall not be construed to diminish or alter any
of Lender's rights of priorities under this Security Instrument.

                                       13
<PAGE>
      7. LEASE SUBORDINATION AND ATTORNMENT.

            (a) LEASES TO BE SUBORDINATE. All Modified Leases entered into by
Borrower after the date hereof shall by their express terms be subject and
subordinate to this Security Instrument, the Loan Agreement and each of the
other Loan Documents (through a subordination provision contained in such Lease
or otherwise) and shall provide that the Person holding any rights thereunder
shall attorn to Lender or any other Person succeeding to the interests of Lender
upon the exercise of its remedies hereunder or any transfer in lieu thereof on
the terms set forth in this Security Instrument.

            (b) ATTORNMENT. Subject to the terms of the Bloomberg SNDA (which
shall supercede any conflicting provisions of this Section), each Modified Lease
entered into from and after the date hereof shall provide that in the event of
the enforcement by Lender of any remedy under the Loan Agreement or this
Security Instrument, Bloomberg under such Lease shall, at the option of Lender
or of any other Person succeeding to the interest of Lender as a result of such
enforcement, attorn to Lender or to such Person and shall recognize Lender or
such successor in the interest as lessor under such Lease without change in the
provisions thereof; provided, however, Lender or such successor in interest
shall not: (1) be liable for any previous act or omission of Borrower under the
Bloomberg Lease except to the extent that such act or omission first arises
under the Bloomberg Lease from and after the date that Successor-Landlord (as
such term is defined in the Bloomberg Lease) succeeds to the interest of
Borrower; (2) be subject to any off-set, credit, defense or counterclaim which
shall have theretofore accrued to Bloomberg against Borrower; (3) be bound by
(a) any modification of the Bloomberg Lease entered into without Lender's
consent after Bloomberg has, subject to the terms of Section 6 of the Bloomberg
SNDA, received written notice of Lender's existence, address and relation to
Borrower, or (b) any previous prepayment of rent or additional rent for more
than one (1) month which Bloomberg might have paid to Borrower other than as
required by the terms of the Bloomberg Lease; (4) be bound by any obligation to
make any payments to Bloomberg except to the extent that such obligation first
arises under the Bloomberg Lease from and after the date that Successor-Landlord
succeeds to the interest of Borrower; and (5) be bound by any obligation to
perform any work or to make improvements to the Commercial Units, except for (i)
repairs and maintenance pursuant to the provisions of Articles 4, 5 and 6 of the
Bloomberg Lease, the need for which repairs and maintenance first arises after
the date upon which Lender is entitled to possession of the Commercial Units,
(ii) repairs to the Commercial Units or any part thereof as a result of damage
by fire or other casualty pursuant to Article 10 of the Bloomberg Lease, but
only to the extent that such repairs can be reasonably made from the net
proceeds of any insurance actually made available to Lender (with the
understanding, however, that (I) nothing contained in this clause (ii) limits
Bloomberg's rights to terminate the Bloomberg Lease after the occurrence of a
fire or other casualty under Section 10.1(B) of the Bloomberg Lease, and (II)
Lender shall have the right to avoid being so bound by Borrower's covenant to
rebuild the Landlord Restoration Items (as such term

                                       14
<PAGE>
is defined in the Bloomberg Lease) after the occurrence of a fire or other
casualty (regardless of the availability of insurance proceeds therefor) only by
giving notice to Bloomberg of the election of Lender not to so rebuild earlier
than the later to occur of (X) the date that Lender is required to give the
Casualty Statement (as such term is defined in the Bloomberg Lease) for such
fire or other casualty to Bloomberg, and (Y) the thirtieth (30th) day after the
date that Lender succeeds to the interest of Borrower under the Bloomberg
Lease), and (iii) repairs to the Commercial Units as a result of a partial
condemnation pursuant to Article 11 of the Bloomberg Lease, but only to the
extent that such repairs can be reasonably made from the net proceeds of any
award made available to Lender (with the understanding that nothing contained in
this clause (iii) shall limit Bloomberg's right to terminate the Bloomberg Lease
after the occurrence of a complete or partial condemnation under Section 11.1 of
the Bloomberg Lease). Bloomberg, upon the reasonable request by Lender or such
successor in interest, shall execute and deliver an instrument or instruments
confirming such attornment.

            (c) NON-DISTURBANCE AGREEMENTS. Lender shall enter into, and, if
required by applicable law to provide constructive notice or requested by
Bloomberg or any tenant in Office Unit 2, record in the county where the subject
Property is located, a subordination, attornment and non-disturbance agreement,
in form and substance substantially similar to the form attached to the Loan
Agreement as EXHIBIT F (a NON-DISTURBANCE AGREEMENT) with such commercially
reasonably changes as may be required by a tenant that are reasonably acceptable
to Lender, with any tenant of Office Unit 2 with respect to any leases or with
Bloomberg regarding a Modified Lease for which Lender's prior written consent is
required by Section 8.8 of the Loan Agreement within ten (10) Business Days
after written request therefor by Borrower, provided that, except with respect
to leases of Office Unit 2, such request is accompanied by an Officer's
Certificate stating that such Lease complies in all material respects with
Section 8.8 of the Loan Agreement. All reasonable third party costs and expenses
incurred by Lender in connection with the negotiation, preparation, execution
and delivery of any Non-Disturbance Agreement, including, without limitation,
reasonable attorneys' fees and disbursements, shall be paid by Borrower (in
advance, if requested by Lender).

      8. PROTECTION OF SECURITY; COSTS AND EXPENSES. Borrower shall appear in
and defend any action or proceeding of which it has notice purporting to affect
the security hereof or the rights or powers of Lender hereunder and shall pay
all reasonable out of pocket costs and expenses actually incurred by Lender,
including, without limitation, cost of evidence of title and reasonable
attorneys' fees and disbursements, in any such action or proceeding, and in any
suit brought by Lender to foreclose this Security Instrument or to enforce or
establish any other rights or remedies of Lender hereunder upon the occurrence
and during the continuance of an Event of Default. If an Event of Default occurs
and is continuing under this Security Instrument or the Loan Agreement, or if
any action or proceeding is commenced in which it becomes necessary to defend or
uphold the Lien or priority of this Security Instrument or which adversely
affects Lender or Lender's interest in the Property or any part thereof,
including, without limitation, eminent domain, enforcement of, or proceedings of
any nature whatsoever under any Legal Requirement affecting the Property or
involving Borrower's bankruptcy, insolvency, arrangement, reorganization or
other form of debtor relief, then Lender, upon reasonable notice to Borrower,
may, but without obligation to do so and without releasing Borrower from any
obligation hereunder, make such appearances, disburse such reasonable sums and
take such action as Lender reasonably deems necessary or appropriate to protect
Lender's interest in the Property, including, but not

                                       15
<PAGE>
limited to, disbursement of reasonable attorneys' fees, entry upon the Property
to make repairs or take other action to protect the security hereof, and
payment, purchase, contest or compromise of any encumbrance, charge or lien
which in the reasonable judgment of Lender appears to be prior or superior
hereto; provided, however, that the foregoing shall be subject to Borrower's
rights to contest under Section 7.3 of the Loan Agreement and, provided no Event
of Default shall have occurred and is then continuing, Lender shall not pay or
discharge any lien, encumbrance or charge being contested by Borrower in
accordance with Section 7.3 of the Loan Agreement.

      9. LENDER'S RIGHT TO PERFORM. Upon the occurrence and during the
continuance of an Event of Default with respect to the performance of any of the
Obligations contained herein, Lender may, without waiving or releasing Borrower
from any Obligation or Default under this Security Instrument, but shall not be
obligated to, at any time perform the Obligations giving rise to such Event of
Default, and the cost thereof, with interest at the Default Rate from the date
of payment by Lender to the date such amount is paid by Borrower, shall
immediately be due from Borrower to Lender and the same shall be secured by this
Security Instrument and shall be a Lien on the Property prior to any right,
title to, interest in or claim upon the Property attaching subsequent to the
Lien of this Security Instrument (subject to the provisions of Article VIII of
the Loan Agreement). No payment or advance of money by Lender under this Section
9 shall be deemed or construed to cure Borrower's Event of Default or waive any
right or remedy of Lender hereunder.

      10. REMEDIES. Subject in all respects to the terms of Section 10(p)
hereof, upon the occurrence and during the continuation of an Event of Default
hereunder or the Loan Agreement, Lender may take such actions against Borrower,
subject to Section 12 hereof, and/or against the Property or any portion thereof
as Lender reasonably determines is necessary to protect and enforce its rights
hereunder, without notice or demand except as set forth below or as required
under applicable law. 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.
Lender's determination of appropriate action may be based on an appropriate real
estate or other consultant and/or counsel, and Lender may rely conclusively on
such advice, but no such advice shall be binding on Borrower or shall increase
or in any way modify or affect Borrower's rights hereunder or at law. Borrower
shall pay such reasonable consultants' fees and reasonable attorneys' fees and
expenses incurred by Lender pursuant to this Section 10. Such actions may
include, without limitation, the following:

            (a) ACCELERATION. Subject to any applicable provisions of the Note
and the other Loan Documents, Lender may declare all or any portion of the
unpaid principal balance under the Note, together with all accrued and unpaid
interest thereon, and all other unpaid Indebtedness, to be immediately due and
payable.

                                       16
<PAGE>
            (b) ENTRY. Subject to the provisions and restrictions of applicable
law and of the Bloomberg Lease, Lender, personally, or by its agents or
attorneys, at Lender's election, may enter into and upon all or any part of the
Property (including, but not limited to, the Commercial Units and Improvements
and any part thereof), and may exclude Borrower, its agents and servants
therefrom (but such entry shall be subject to any Non-Disturbance Agreements
then in effect and the rights of tenants); and Lender, having and holding the
same, may use, operate, manage and control the Property or any part thereof and
conduct the business thereof, either personally or by its superintendents,
managers, agents, servants, attorneys or receiver. Upon every such entry, Lender
may, at the reasonable expense of the Property and/or Borrower, from time to
time, either by purchase, repair or construction, maintain and restore the
Property or any part thereof, and may insure and reinsure the same in such
amount and in such manner as may seem to them to be advisable. Similarly, from
time to time, Lender may, at the expense of Borrower (which amounts may be
disbursed by Lender from the Property on behalf of Borrower), except to the
extent Bloomberg is required to cover such expense under the Bloomberg Lease,
and, in any event, subject to the Bloomberg Lease, make all necessary or proper
repairs, renewals, replacements, alterations, additions, betterments and
improvements to and on the Property or any part thereof as it may seem
advisable. Subject to the Bloomberg Lease, Lender or its designee shall also
have the right to manage and operate the Property or any part thereof and to
carry on the business thereof and exercise all rights and powers of Borrower
with respect thereto, either in the name of Borrower or otherwise, as may seem
to them to be advisable. In confirmation of the grant made in Granting Clause
(F) hereof, in the case of the occurrence and continuation of an Event of
Default, Lender shall be entitled to collect and receive all Rents to be applied
in the order of priorities and amounts as shall be provided for in Section 11
hereof. Lender shall be liable to account only for Rents and other proceeds
actually received by Lender.

            (c) PHASE I ENVIRONMENTAL REPORT. Subject to the terms of Article 12
of the Loan Agreement, Lender may at its option obtain, in each instance, at
Borrower's reasonable expense, a new phase I environmental report with respect
to the Property, and such additional environmental studies as may be recommended
in such phase I reports.

            (d) FORECLOSURE.

            (i) Lender, with or without entry, personally or by its agents or
      attorneys, insofar as applicable, and in addition to any and every other
      remedy, may (i) sell to the extent permitted by law and pursuant to the
      power of sale granted herein, all and singular, the Property, and all
      estate, right, title and interest, claim and demand therein, and right of
      redemption thereof, at one or more sales, as an entirety or in parcels,
      and at such times and places as required or permitted by law and as are
      customary in the county in which the Property is located and upon such
      terms as Lender may fix and specify in the notice of sale to be given to
      Borrower (and on such other notice published or otherwise given as
      provided by law), or as may be required by law; (ii) institute proceedings
      for the complete or partial foreclosure of this Security Instrument under
      the provisions of the laws of the jurisdiction or jurisdictions in which
      the Property or any part thereof is located,

                                       17
<PAGE>
      or under any other applicable provision of law; or (iii) take all steps to
      protect and enforce the rights of Lender, whether by action, suit or
      proceeding in equity or at law (for the specific performance of any
      covenant, condition or agreement contained in this Security Instrument, or
      in aid of the execution of any power herein granted, or for any
      foreclosure hereunder, or for the enforcement of any other appropriate
      legal or equitable remedy), or otherwise, as Lender, being advised by
      counsel and its financial advisor, shall deem advisable to protect and
      enforce any of their rights or duties hereunder.

            (ii) Lender may conduct any number of sales from time to time. The
      power of sale shall not be exhausted by any one or more such sales as to
      any part of the Property remaining unsold, but shall continue unimpaired
      until the entire Property shall have been sold.

            (iii) Upon taking title to the Commercial Units and the Improvements
      (whether by foreclosure, deed in lieu or otherwise) by Lender or any other
      purchaser or assignee of the Commercial Units and the Improvements after
      an Event of Default, Borrower shall assign and transfer all of its right,
      title and interest in and to all other portions of the Property to Lender.

            (e) SPECIFIC PERFORMANCE. Subject to Section 18.1 of the Loan
      Agreement, Lender, in its sole and absolute discretion, may institute an
      action, suit or proceeding at law or in equity for the specific
      performance of any covenant, condition or agreement contained herein or in
      the Note or any other Loan Document, or in aid of the execution of any
      power granted hereunder or for the enforcement of any other appropriate
      legal or equitable remedy.

            (f) ENFORCEMENT OF NOTE. Subject to Section 18.1 of the Loan
      Agreement, and to the extent permitted under the provisions of applicable
      law, Lender may recover judgment on the Note (or any portion of the
      Indebtedness evidenced thereby), either before, during or after any
      proceedings for the foreclosure (or partial foreclosure) or enforcement of
      this Security Instrument.

            (g) SALE OF PROPERTY

            (i) Lender may postpone any sale of all or any part of the Property
      to be made under or by virtue of this Section 10 by public announcement at
      the time and place of such sale, or by publication, if required by law,
      and, from time to time, thereafter, may further postpone such sale by
      public announcement made at the time of sale fixed by the preceding
      postponement.

            (ii) Upon the completion of any sale made by Lender under or by
      virtue of this Section 10, Lender shall execute and deliver to the
      accepted purchaser or purchasers a good and sufficient deed or deeds or
      other appropriate instruments, conveying, assigning and transferring all
      its estate, right, title and interest in and to the property and rights so
      sold. Borrower shall, nevertheless, if so requested in writing by Lender,
      ratify and confirm any such sale or sales by

                                       18
<PAGE>
      executing and delivering to Lender or to such purchaser or purchasers all
      such instruments as may be advisable (which shall be subject to the
      limitations on recourse contained in Section 18 of the Loan Agreement), in
      the judgment of Lender, for such purposes and as may be designated in such
      request. Any such sale or sales made under or by virtue of this Section 10
      shall operate to divest all the estate, right, title, interest, claim and
      demand, whether at law or in equity, of Borrower in and to the property
      and rights so sold, and shall be a perpetual bar, at law and in equity,
      against Borrower, its successors and assigns and any Person claiming
      through or under Borrower and its successors and assigns.

            (iii) The receipt of Lender for the purchase money paid as a result
      of any such sale shall be a sufficient discharge therefor to any purchaser
      of the property or rights, or any part thereof, so sold. No such
      purchaser, after paying such purchase money and receiving such receipt,
      shall be bound to see to the application of such purchase money upon or
      for any trust or purpose of this Security Instrument, or shall be
      answerable, in any manner, for any loss, misapplication or non-application
      of any such purchase money or any part thereof, nor shall any such
      purchaser be bound to inquire as to the authorization, necessity,
      expediency or regularity of such sale.

            (iv) Upon any sale made under or by virtue of this Section 10,
      Lender may bid for and acquire the Property or any part thereof and, in
      lieu of paying cash therefor, may make settlement for the purchase price
      by crediting upon the Note secured by this Security Instrument the net
      proceeds of sale, after deducting therefrom the expense of the sale and
      the costs of the action and any other sums which Lender is authorized to
      deduct under this Security Instrument. The person making such sale shall
      accept such settlement without requiring the production of the Note or
      this Security Instrument, and there shall be deemed credited to the
      Indebtedness and Obligations under this Security Instrument the net
      proceeds of such sale. Lender, upon acquiring the Property or any part
      thereof, shall be entitled to own, hold, lease, rent, operate, manage or
      sell the same in any manner permitted by applicable laws.

      (h) VOLUNTARY APPEARANCE; RECEIVERS. After the happening, and during the
continuance of, any Event of Default hereunder or pursuant to the Loan
Agreement, and promptly upon commencement of (i) any action, suit or other legal
proceeding by Lender to obtain judgment for the principal and interest on the
Note and any other sums required to be paid pursuant to this Security
Instrument, or (ii) any action, suit or other legal proceeding by Lender of any
other nature in aid of the enforcement of the Loan Documents or any of them,
Borrower will (a) enter their voluntary appearance in such action, suit or
proceeding, and (b) if required by Lender, consent to the appointment, of one or
more receivers of the Property and all of the Rents. After the happening and
during the continuance of any Event of Default, or upon the filing of a bill in
equity to foreclose this Security Instrument or to enforce the specific
performance hereof or in aid thereof, or upon the commencement of any other
judicial proceeding to enforce any right of Lender, Lender shall be entitled, as
a matter of right, if it shall so elect, without notice to any other party and
without regard to the adequacy of the security

                                       19
<PAGE>
of the Property, forthwith, either before or after declaring the principal and
interest on the Note to be due and payable, to the appointment of such a
receiver or receivers. Any receiver or receivers so appointed shall have such
powers as a court or courts shall confer, which may include, without limitation,
any or all of the powers which Lender is authorized to exercise by the
provisions of this Section 10, and shall have the right to incur such
obligations and to issue such certificates therefor as the court shall
authorize. Notwithstanding the foregoing, after the occurrence, and during the
continuance of, any Event of Default hereunder or pursuant to the Loan
Agreement, Lender as a matter of right may appoint or secure the appointment of
a receiver, trustee, liquidator or similar official of the Property or any
portion thereof, and Borrower hereby irrevocably consents and agrees to such
appointment, without notice to Borrower and without regard to the value of the
Property or adequacy of the security for the Indebtedness and without regard to
the solvency of the Borrower or any other Person liable for the payment of the
Indebtedness, and such receiver or other official shall have all rights and
powers permitted by applicable law and such other rights and powers as the court
making such appointment may confer, but the appointment of such receiver or
other official shall not impair or in any manner prejudice the rights of Lender
to receive the Rents pursuant to this Security Instrument or the Assignment of
Leases.

            (i) UCC REMEDIES. Lender may exercise any or all of the remedies
granted to a secured party under the UCC, specifically including, without
limitation, the right to recover the reasonable attorneys' fees and
disbursements and other expenses incurred by Lender in the enforcement of this
Security Instrument or in connection with Borrower's redemption of the
Improvements or Building Equipment or Intangibles. Lender may exercise its
rights under this Security Instrument independently of any other collateral or
guaranty that Borrower may have granted or provided to Lender in order to secure
payment and performance of the Obligations, and Lender shall be under no
obligation or duty to foreclose or levy upon any other collateral given by
Borrower to secure any Obligation or to proceed against any guarantor before
enforcing its rights under this Security Instrument.

            (j) LEASES. Lender may, at its option, before any proceeding for the
foreclosure (or partial foreclosure) or enforcement of this Security Instrument,
treat any Lease which is subordinate by its terms to the Lien of this Security
Instrument (and with respect to which Non-Disturbance Agreement exists and is in
full force and effect without any default on the part of the Tenant thereunder
or under the Lease relating thereto beyond the expiration of applicable notice
and cure periods), as either subordinate or superior to the Lien of this
Security Instrument.

            (k) OTHER RIGHTS. Lender may pursue against Borrower any other
rights and remedies of Lender permitted by law, equity or contract or as set
forth herein or in the other Loan Documents, subject to the provisions of
Section 18.1 of the Loan Agreement.

            (l) RETENTION OF POSSESSION. Notwithstanding the appointment of any
receiver, liquidator or trustee of Borrower, or any of its property, or of the
Property or any part thereof, Lender, to the extent permitted by law, shall be
entitled to retain

                                       20
<PAGE>
possession and control of all property now or hereafter granted to or held by
Lender under this Security Instrument.

            (m) SUITS BY LENDER. All rights of action under this Security
Instrument may be enforced by Lender without the possession of the Note and
without the production thereof or this Security Instrument at any trial or other
proceeding relative thereto, provided, however, Lender shall in any event be,
and shall certify that it is, the current holder of the Note. Any such suit or
proceeding instituted by Lender shall be brought in the name of Lender and any
recovery of judgment shall be subject to the rights of Lender.

            (n) REMEDIES CUMULATIVE. Subject to Section 18.1 of the Loan
Agreement, no remedy herein (or pursuant to the Loan Agreement or any Loan
Document) conferred upon or reserved to Lender shall exclude any other remedy,
and each such remedy shall be cumulative and in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity. No delay or
omission of Lender to exercise any right or power accruing upon any Event of
Default shall impair any such right or power, or shall be construed to be a
waiver of any such Event of Default or an acquiescence therein. Every power and
remedy given to Lender by this Security Instrument or any other Loan Document
may be exercised from time to time and as often as Lender may deem expedient.
Nothing in this Security Instrument shall affect Borrower's obligations to pay
the principal of, and interest on, the Note in the manner and at the time and
place expressed in the Note.

            (o) WAIVER OF RIGHTS. Borrower agrees that, to the fullest extent
permitted by law, it will not at any time, (1) insist upon, plead or claim or
take any benefit or advantage of any stay, extension or moratorium law, wherever
enacted, now or at any time hereafter in force, which may affect the covenants
and terms of performance of this Security Instrument or any Loan Document, (2)
claim, take or insist upon any benefit or advantage of any law, now or at any
time hereafter in force, providing for valuation or appraisal of the Property,
or any part thereof, prior to any sale or sales thereof which may be made
pursuant to any provision herein contained, or pursuant to the decree, judgment
or order of any court of competent jurisdiction, or (3) after any such sale or
sales, claim or exercise any right under any statute heretofore or hereafter
enacted by the United States or any State or otherwise to redeem the property
and rights sold pursuant to such sale or sales or any part thereof. Borrower
hereby expressly waives all benefits and advantages of such laws, and covenants,
to the fullest extent permitted by law, not to hinder, delay or impede the
execution of any power herein granted or delegated to Lender, but will suffer
and permit the execution of every power as though no such laws had been made or
enacted. Borrower for itself and all who may claim through or under it, waives,
to the extent it lawfully may do so, any and all homestead rights and, any and
all rights to reinstatement, any and all right to have the property comprising
the Property marshaled upon any foreclosure of the Lien hereof.

            (p) REMEDIES AGAINST OFFICE UNIT 2. Notwithstanding any term set
forth herein or in any of the other Loan Documents, (i) Lender covenants not to
complete a foreclosure or exercise any remedies with respect to with respect to
Office Unit 2 unless

                                       21
<PAGE>
Borrower has defaulted in any of its obligations under Section 15 hereof and/or
Section 13(h) (in a manner that relates to Office Unit 2) hereof (an OFFICE UNIT
2 DEFAULT) and (ii) subject to the terms of Section 15(a) hereof, prior to the
occurrence and continuance of an Office Unit 2 Default, Borrower may collect and
use all Rent payable with respect to Office Unit 2 without having to deposit (or
causing to be deposited) any such Rent derived therefrom that is not
attributable to the Bloomberg Lease into the Collection Account. Additionally,
except with respect to (i) Borrower's strict compliance with the covenants
imposed upon Borrower pursuant to the terms of Section 13(h) (in a manner that
relates to Office Unit 2) and Section 15 hereof and (ii) Borrower's grant of the
lien and security interest set forth herein to Lender in all its right, title
and interest in and to the Property (including, without limitation, in and to
Office Unit 2), Lender agrees that Borrower shall not be obligated to comply
with any of the covenants imposed by the terms of the Loan Documents solely as
such covenants relate to Office Unit 2 except that Borrower shall be required to
comply with such covenants for any portion of Office Unit 2 that Borrower leases
to Tenant pursuant to the terms of the Bloomberg Lease. Notwithstanding anything
to the contrary set forth herein or in any of the other Loan Documents, any
reference to the Property in the representations that Borrower makes as of the
date hereof shall be deemed to be a reference only to Office Unit 1 (except to
the extent such representations relate to (i) Borrower's ownership interests in
Office Unit 2 and/or (ii) Lender's liens and security interests in Office Unit
2).

      11. APPLICATION OF PROCEEDS.

            (a) SALE PROCEEDS. The proceeds of any sale or foreclosure of the
Property or any portion thereof shall be applied to the following in the
following order of priority: (i) the payment of the costs and expenses of the
foreclosure proceedings with respect to such Property (including reasonable
counsel fees and disbursements actually incurred and advertising costs and
expenses), liabilities and advances made or incurred under this Security
Instrument or any Loan Document, and reasonable receivers' and trustees' fees
and commissions and fees and expenses incurred by Lender, together with interest
at the Default Rate to the extent payable, (ii) payment of any other sums
advanced by Lender (or any advancing agent on its behalf) in accordance with the
terms hereof and not repaid to it by Borrower, together with interest at the
Default Rate to the extent payable, (iii) payment of all sums due under the Note
and the Loan Documents in such order and priority as Lender shall elect in its
sole and absolute discretion; and (iv) payment of any remaining Obligations and
(v) any surplus to Borrower or other party legally entitled thereto.

            (b) OTHER PROCEEDS. All other proceeds or other amounts collected by
Lender following an Event of Default shall be applied (1) first, to reimburse
any reasonable expenses related to such collection, and (2) thereafter, as
provided in Section 11(a) hereof.

      12. ASSIGNMENT OF CONDOMINIUM RIGHTS.

            (a) This Article constitutes a present, absolute, effective,
irrevocable and completed assignment by Borrower to Lender of all of Borrower's
right, title and interest in and to the Condominium Declaration and any and all
rights, remedies and powers of Borrower thereunder, including, but not limited
to the right to exercise any voting rights under the Condominium Declaration,
the rights under Section 6.3.4 of the By-Laws and the right to appoint members
of the board of trustees (collectively, the CONDOMINIUM RIGHTS); it being
intended by Borrower that this assignment constitutes a

                                       22
<PAGE>
present, absolute assignment and not an assignment for additional security only.
Subject to the terms of Section 12(c) hereof, Lender hereby assumes all of
Borrower's right, title and interest in and to the Condominium Declaration and
the rights to exercise the Condominium Rights. Nevertheless, subject to the
terms of the Proxy, Lender grants to Borrower a revocable license to exercise
the Condominium Rights, subject, however, to compliance with the provisions of
this Security Instrument and the other Loan Documents.

            (b) During the continuance of an Event of Default, a casualty and/or
condemnation, the license granted in Section 12(a) above shall, to the extent
permitted by law, immediately cease and terminate, without waiver of such Event
of Default, with or without notice, and without any action or proceeding or the
intervention of a receiver appointed by a court, and Lender or an agent or
receiver appointed by Lender may, to the extent permitted by law, without regard
for the adequacy of the security for the Obligations, the commission of waste or
the solvency of Borrower, without limiting any of the Lender's rights and
remedies under any of the Loan Documents or otherwise available at law or in
equity and subject to applicable statutory requirements, if any, immediately be
entitled to exercise all of the Condominium Rights, whether or not Lender enters
upon or takes control of the Property.

            (c) Until such time as Lender has taken actual possession and title
of the Property, this Article shall not be construed to bind Lender to the
performance of any of the covenants, conditions or provisions contained in the
Condominium Declaration, the By-Laws or otherwise impose any obligation upon
Lender. From and after the date Lender has taken actual possession and title of
the Property, any liability imposed upon Lender with respect to the Condominium
Declaration shall be limited in all respects to its then current interest in the
Property. Nothing in this Article shall be construed as constituting Lender a
"mortgagee in possession" in the absence of the taking of actual possession and
title of the Property by Lender or any of its agents.

            (d) In addition to any other rights Lender may be granted pursuant
to this Article and notwithstanding anything to the contrary contained in this
Article, Lender shall be a Permitted Mortgagee (as such term is defined in the
Condominium Declaration) for all purposes under the Condominium Declaration and
By-Laws and shall be entitled to exercise any and all rights granted therein to
a Permitted Mortgagee.

            (e) Notwithstanding anything to the contrary contained herein,
Borrower hereby grants to Lender an irrevocable proxy and power of attorney,
coupled with an interest, to be used by Lender, in its sole and absolute
discretion, in connection with any vote or solicitation of consents of the Unit
Owners (as such term is defined in the Bloomberg Lease) for the purpose of
resolving whether to proceed with the repair or restoration of the Building as
provided in Section 6.3.4 of the By-Laws.

      13. MISCELLANEOUS.

            (A) CERTAIN WAIVERS. TO INDUCE LENDER TO CONSUMMATE THE TRANSACTIONS
CONTEMPLATED BY THE NOTE AND THIS SECURITY INSTRUMENT, AND FOR OTHER GOOD AND

                                       23
<PAGE>
VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY
ACKNOWLEDGED, EACH OF LENDER, BORROWER AND EACH SPE ENTITY EXPRESSLY AND
IRREVOCABLY HEREBY, IN ADDITION TO AND NOT IN DEROGATION OF ALL OTHER WAIVERS
CONTAINED IN THE NOTE, THIS SECURITY INSTRUMENT AND THE OTHER LOAN DOCUMENTS,
WAIVE AND SHALL WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING BROUGHT BY, OR
COUNTERCLAIM ASSERTED BY LENDER, BORROWER OR ANY SPE ENTITY WHICH ACTION,
PROCEEDING OR COUNTERCLAIM ARISES OUT OF OR IS CONNECTED WITH THIS SECURITY
INSTRUMENT, THE NOTE OR ANY OTHER LOAN DOCUMENT.

            (b) NOTICES. Any notice, election, request, demand, report or
statement which by any provision of this Security Instrument is required or
permitted to be given or served hereunder shall be in writing and shall be given
or served in the manner and to the Persons required by Section 19.6 of the Loan
Agreement.

            (c) NO ORAL MODIFICATION. This Security Instrument may not be
waived, altered, amended, modified, changed, discharged or terminated orally but
only by a written agreement signed by the party against which enforcement is
sought.

            (d) PARTIAL INVALIDITY. In the event any one or more of the
provisions contained in this Security Instrument shall for any reason be held to
be invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provision hereof, but each shall
be construed as if such invalid, illegal or unenforceable provision had never
been included hereunder.

            (e) SUCCESSORS AND ASSIGNS. All covenants of Borrower contained in
this Security Instrument are imposed solely and exclusively for the benefit of
Lender and its successors and assigns, and no other Person shall have standing
to require compliance with such covenants or be deemed, under any circumstances,
to be a beneficiary of such covenants, any or all of which may be freely waived
in whole or in part by Lender at any time if in its sole discretion it deems it
advisable to do so. All such covenants of Borrower shall run with the land and
bind Borrower, the successors and assigns of Borrower (and each of them) and all
subsequent owners, encumbrances and Tenants of the Property, and shall inure to
the benefit of Lender, its successors and assigns.

            (f) GOVERNING LAW.

            (i) THIS SECURITY INSTRUMENT WAS NEGOTIATED IN THE STATE OF NEW
      YORK, THE LOAN WAS MADE BY LENDER AND ACCEPTED BY BORROWER IN 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 SECURITY
      INSTRUMENT AND

                                       24
<PAGE>
      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 AND LENDER HEREBY
      UNCONDITIONALLY AND IRREVOCABLY WAIVE ANY CLAIM TO ASSERT THAT THE LAW OF
      ANY OTHER JURISDICTION GOVERNS THIS SECURITY INSTRUMENT AND THE NOTE. THIS
      SECURITY INSTRUMENT 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.

            (ii) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER
      ARISING OUT OF OR RELATING TO SECURITY INSTRUMENT SHALL 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 AND LENDER WAIVE 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 LENDER 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
                  80 STATE STREET
                  ALBANY, NEW YORK  12207 2543

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 AGREE 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

                                       25
<PAGE>
ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS
DISSOLVED WITHOUT LEAVING A SUCCESSOR.

            (g) NO WAIVER. No failure by Lender to insist upon the strict
performance of any term hereof or to exercise any right, power or remedy
consequent upon a breach thereof shall constitute a waiver of any such term or
right, power or remedy or of any such breach. No waiver of any breach shall
affect or alter this Security Instrument, which shall continue in full force and
effect, or shall affect or alter the rights of Lender with respect to any other
then existing or subsequent breach.

            (h) FURTHER ASSURANCES. Borrower, at its own expense, will execute,
acknowledge and deliver all such reasonable further documents or instruments
including, without limitation, (i) security agreements on any building equipment
included or to be included in the Property, and (ii) such other documents as
Lender from time to time may reasonably request to better assure, transfer and
confirm unto Lender the rights now or hereafter intended to be granted to Lender
under this Security Instrument or the other Loan Documents. Borrower shall
notify Lender in writing no less than thirty (30) days prior to a change of
address.

            (i) COUNTERPARTS. This Security Instrument may be executed in one or
more counterparts, each of which shall be deemed to be an original, and all of
which together shall constitute one and the same instrument.

            (j) MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS OF
LENDER. Any Person into which Lender may be merged or converted or with which it
may be consolidated, or any Person resulting from any merger, conversion or
consolidation to which Lender shall be a party, or any Person succeeding to all
or substantially all the business of Lender, shall be the successor of Lender
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto.

            (k) NO ENDORSEMENT. Lender shall not become or be considered to be
an endorser, co-maker or co-obligor on the Note or on any other Obligation of
Borrower secured by this Security Instrument or otherwise.

            (l) NON-RECOURSE. Recourse with respect to any claims arising under
or in connection with this Security Instrument shall be limited to the extent
provided in Article XVIII of the Loan Agreement and the terms, covenants and
conditions of Article XVIII of the Loan Agreement are hereby incorporated by
reference as if fully set forth in this Security Instrument.

            14. STATE LAW PROVISIONS

            Notwithstanding anything to the contrary elsewhere in this Security
Instrument:

            (a) MAXIMUM PRINCIPAL SUM. THE PARTIES HERETO INTEND THAT THIS
SECURITY INSTRUMENT SHALL SECURE UNPAID

                                       26
<PAGE>
BALANCES OF THE INDEBTEDNESS SECURED HEREBY WHETHER INCURRED BY BORROWER AT THE
DATE HEREOF OR AFTER THIS SECURITY INSTRUMENT IS DELIVERED FOR RECORDATION IN
THE OFFICIAL RECORDS OF THE COUNTY IN WHICH THE PROPERTY IS LOCATED. THE MAXIMUM
PRINCIPAL AMOUNT OF INDEBTEDNESS WHICH IS OR UNDER ANY CONTINGENCY MAY BE
SECURED AT THE DATE OF EXECUTION HEREOF OR AT ANY TIME THEREAFTER BY THIS
SECURITY INSTRUMENT IS $400,000,000.

            (b) Trust Fund for Advances. That in compliance with Section 13 of
the Lien Law of the State of New York, the Borrower will receive the advances
secured by this Security Instrument and will hold the right to receive such
advances as a trust fund to be applied first for the purpose of paying the cost
of the building(s) and other improvements located on the Property before using
any part of the total of the same for any other purpose. Borrower will indemnify
and hold Lender harmless against any loss, liability, cost or expense, including
any judgments, attorneys' fees, costs of appeal bonds or printing costs, arising
out of or relating to any proceedings instituted by any claimant alleging a
violation by the Borrower of Article 3-A of the New York Lien Law.

            (c) New York Real Property Law Article 4-A. If this Security
Instrument shall be deemed to constitute a "mortgage investment" as defined by
New York Real Property Law Section 125, then this Security Instrument shall and
hereby does (i) confer upon the Lender the powers and (ii) impose upon the
Lender the duties of trustees set forth in New York Real Property Law Section
126.

            (d) Statement in Accordance with Section 253.1a(a) of the New York
Tax Law. This Security Instrument does not cover real property principally
improved or to be improved by one or more structures containing in the aggregate
not more than six (6) residential dwelling units, each having separate cooking
facilities.

            (e) Statement in Accordance with Section 274-a of the New York Real
Property Law. The Lender shall, within fifteen (15) days after written request,
provide the Borrower with the statement required by Section 274-a of the New
York Real Property Law.

            (f) Section 291-f of New York Real Property Law. Lender shall have
all of the rights set forth in Section 291-f of the Real Property Law of New
York. For purposes of Section 291-f of the New York Real Property Law, all
existing tenants and every tenant or subtenant who after the recording of this
Security Instrument, enters into a Lease upon the premises of any of the
Property or who acquires by instrument of assignment or by operation of law a
leasehold estate upon the Property is hereby notified that Borrower shall not,
without obtaining Lender's prior consent in each instance, cancel, abridge or
otherwise modify any Leases or accept prepayments for more than thirty (30) days
of installments of rent to become due with respect to any Lease thereof having
an unexpired term on the date of this Security Instrument of five (5) years or
more, except as expressly permitted under the Loan Agreement and the Bloomberg
SNDA, and that any such cancellation, abridgement, modification or prepayment
made by any such tenant or

                                       27
<PAGE>
subtenant without either being expressly permitted under this Security
Instrument or receiving Lender's prior consent shall be voidable by Lender at
its option.

            (g) Sections 254, 271, 272 and 291-f of New York Real Property Law.
All covenants of the Borrower herein contained shall be construed, to the extent
not inconsistent with the terms of this Security Instrument, as affording to
Lender rights additional to and not exclusive of the rights conferred under the
provisions of Sections 254, 271, 272 and 291-f of the Real Property Law of New
York.

            (h) Real Property Law. Sections 3(c) hereof and Article VI of the
Loan Agreement shall be construed according to subdivision 4 of Section 254 of
the New York Real Property Law as amended by Chapter 886 of the Laws of 1945 but
not as amended by Chapter 830 of the Laws of 1965 or as otherwise thereafter
amended.

            (i) RPAPL. If an Event of Default shall occur and be continuing,
Lender may elect to sell (and, in the case of any default of any purchaser,
resell) the Property or any part thereof by exercise of the power of foreclosure
or of sale granted to Lender by Articles 13 or 14 of the New York Real Property
Actions and Proceedings Law (the RPAPL). In such case, Lender may commence a
civil action to foreclose this Security Instrument pursuant to Article 13 of the
RPAPL, or it may proceed and sell the Property pursuant to Article 14 of the
RPAPL to satisfy the Note and all other amounts secured hereby.

      15. UPPER OPTION SPACE RESTRICTIONS AND AGREEMENTS

            (a) Lease of Option Space to Bloomberg. Notwithstanding anything to
the contrary set forth herein, including, without limitation, the terms of
Section 10(p) hereof, if Borrower leases any Upper Option Space to Bloomberg
under the Bloomberg Lease, (i) all rents, issue and profits received by Borrower
from Bloomberg with respect to such Upper Option space shall constitute Rent
hereunder and shall be deposited directly into the Collection Account to be
applied in accordance with the terms of the Loan Documents and (ii) Borrower
shall cause the Condominium Documents to be amended to transfer such space from
Office Unit 2 to the Condominium Unit in a manner reasonably satisfactory to
Lender.

            (b) Conditions Precedent to Transfer of Upper Option Space: Borrower
agrees that it may not Transfer (other than leasing in strict accordance with
the terms of Section 15(c) hereof) all or any portion of its interest in the
Upper Option Space until Lender delivers to Borrower an instrument in recordable
form releasing the lien of this Security Instrument with respect to the Upper
Option Space (or if applicable, a partial lien release with respect to a release
of the portion of the Upper Option Space subject to the Transfer). Lender will
deliver any such release within ten (10) Business Days after the occurrence of a
Release Event with respect to the Upper Option Space (or portion thereof subject
to the Transfer). A RELEASE EVENT shall mean the occurrence of the following:
(i) (x) Borrower (together with Bloomberg) shall enter into a severance
agreement with respect to the Bloomberg Lease in a manner reasonably
satisfactory to Lender to exclude the Upper Option Space (or the applicable
portion thereof subject to

                                       28
<PAGE>
the Transfer with respect to which Bloomberg has exercised its option) and a
separate and distinct lease for such space that is not cross-defaulted nor
cross-collateralized with the Bloomberg Lease shall be entered into between
Bloomberg, as lessee and a separate bankruptcy remote single purpose entity
(which may be an Affiliate of Borrower), as lessor (and in connection with which
a separate condominium unit comprising such space is conveyed to such separate
entity) or (y) Bloomberg forever waives or relinquishes in writing (a copy of
which must be delivered to Lender) its right to lease the applicable Upper
Option Space (or portion thereof subject to the Transfer) pursuant to the
Bloomberg Lease, (ii) Borrower provides at least thirty (30) days prior written
notice of such Transfer to Lender and (iii) Borrower complies with the terms of
Section 15(e) hereof and takes (or causes to be taken) all other actions
reasonably requested by Lender in connection with the foregoing, including
without limitation, obtaining and delivering to Lender evidence reasonably
satisfactory to Lender confirming Lender's lien on the remaining portions of the
Property, and executes and delivers to Lender any and all modifications or
confirmatory amendments to the Loan Documents reasonably required by Lender to
effectuate the terms of this Section (all at Borrower's sole cost and expense).

            (c) Lease of Upper Option Space to Parties other than Bloomberg:
Without in any way limiting the terms of Section 15(b) hereof, Borrower agrees
that if Bloomberg shall at any time (ie. after the initial leasing in accordance
with the terms of Article 36 of the Bloomberg Lease) have the right pursuant to
the terms of the Bloomberg Lease to lease all or any portion of the Upper Option
Space that has not been released pursuant to a Release Event in accordance with
the terms of Section 15(b) hereof (the APPLICABLE SPACE) (i) to provide written
notice thereof to Lender and (ii) prior to the earlier of (x) the date Bloomberg
waives or relinquishes in writing its right forever to lease such space (a copy
of which must be delivered to Lender by Borrower) in accordance with the terms
of Article 36 of the Bloomberg Lease or (y) the time period available to
Bloomberg to exercise such rights has lapsed in accordance with the terms of
Article 36 of the Bloomberg Lease, Borrower may not lease any portion of such
space to any other person (the occurrence of any event in foregoing clause (x)
or (y), an OPTION TERMINATION EVENT). At least ten (10) days prior to leasing
any Applicable Space to a party other than Bloomberg, Borrower must first
deliver a certificate (the CERTIFICATE) to Lender confirming (i) that Bloomberg
has been given written notice of its right to lease such space (a copy of which
shall be attached to the Certificate) to the extent Bloomberg is entitled
thereto under the Bloomberg Lease and (ii) that an Option Termination Event has
occurred (together with reasonable back-up documentation evidencing or
describing the Option Termination Event). Notwithstanding the applicability of
this Section 15(c), Borrower agrees that in no event shall any Transfer (except
leasing in strict accordance with the terms of this Section) of any Upper Option
Space occur until Lender delivers a lien release with respect to such Option
Space in accordance with the terms of Section 15(b) hereof.

            (d) Lender's Ability to Cure Defaults: Lender shall have the right,
but not the obligation, to cure any default in the obligations of Borrower to
Bloomberg with respect to all or any portion of the Upper Option Space and has
not been released pursuant to a Release Event in accordance with the terms of
Section 15(b) hereof. Borrower hereby irrevocably constitutes and appoints
Lender as its true and lawful

                                       29
<PAGE>
attorney-in-fact, with full power of substitution, to execute, acknowledge and
deliver any instruments and to exercise and enforce every right, power, remedy,
option and privilege of Borrower with respect to such Upper Option Space, and do
in the name, place and stead of Borrower, all such acts, things and deeds for
and on behalf of and in the name of Borrower, which Borrower could or might do
or which Lender may deem necessary or desirable to more fully vest in Lender the
rights and remedies provided for in this Section 15(d) and/or Section 10(p)
herein and to accomplish the purposes of this Section 15(d) and/or Section 10(p)
herein. The foregoing powers of attorney are irrevocable and coupled with an
interest. Upon the occurrence and during the continuance of any default by
Borrower with respect to any such Upper Option Space, Lender may perform or
cause performance of any such agreement, and Borrower agrees that any expenses
of Lender incurred in connection therewith shall be paid by Borrower.

            (e) Section 15 Costs and Expenses: All reasonable costs and expenses
incurred to effectuate any of the terms of this Section 15 shall be promptly
paid by Borrower (and in advance if requested by Lender), including, without
limitation, Lender's reasonable costs and expenses (including reasonable
attorney's fees and disbursements).

                         [NO FURTHER TEXT ON THIS PAGE]

                                       30
<PAGE>

            IN WITNESS WHEREOF, this Security Instrument has been duly executed
by Borrower and Lender on the date first hereinabove written.

                              BORROWER:

                              731 OFFICE ONE LLC, a Delaware limited liability
                              company

                              By:   731 OFFICE ONE HOLDING LLC, a Delaware
                              limited liability company, its sole member

                                 By:   ALEXANDER'S INC., a Delaware corporation,
                                       its sole member

                                 By:   /s/ Brian Kurtz
                                       ------------------------------
                                             Name:   Brian Kurtz
                                             Title:  Assistant Secretary

                              LENDER:

                              GERMAN AMERICAN CAPITAL CORPORATION,
                              a Maryland corporation

                              By:   /s/ Christopher Tognola
                                    ------------------------------
                                    Name: Christopher Tognola
                                    Title: Vice President

                              By:   /s/ Thomas R. Traynor
                                    ------------------------------------
                                    Name: Thomas R. Traynor
                                    Title: Authorized Signatory

                               Mortgage Execution

<PAGE>
 STATE OF NEW YORK.     )
                        ) ss.
COUNTY OF NEW YORK      )

            On June __, 2004 before me, the undersigned, a notary public in and
for said state, personally appeared _______________________, personally known to
me or proved to me on the basis of satisfactory evidence to be the individual
whose name is subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their capacity, and that by
his/her/their signature on the instrument, the individual, or the person upon
behalf of which the individual acted, executed the instrument.

            -------------------------------------
            Notary Public

[Notary Seal]                 My commission expires:

STATE OF NEW YORK.      )
                        ) ss.
COUNTY OF NEW YORK      )

            On June __, 2004 before me, the undersigned, a notary public in and
for said state, personally appeared ___________________________, personally
known to me or proved to me on the basis of satisfactory evidence to be the
individual whose name is subscribed to the within instrument and acknowledged to
me that he/she/they executed the same in his/her/their capacity, and that by
his/her/their signature on the instrument, the individual, or the person upon
behalf of which the individual acted, executed the instrument.

            -------------------------------------
            Notary Public

[Notary Seal]                 My commission expires:
<PAGE>
STATE OF NEW YORK.      )
                        ) ss.
COUNTY OF NEW YORK      )

            On the ____ day of ___________ in the year 2004 before me, the
undersigned, a notary public in and for said state, personally appeared
___________________________, personally known to me or proved to me on the basis
of satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in
his/her/their capacity, and that by his/her/their signature on the instrument,
the individual, or the person upon behalf of which the individual acted,
executed the instrument.

            -------------------------------------
            Notary Public

[Notary Seal]            My commission expires:
<PAGE>
                                    EXHIBIT A

                                 (Office Unit 1)

The Condominium Unit (the "Unit") in the premises known as Beacon Court
Condominium and by the street number by the street number 151 East 58th Street,
Borough of Manhattan, City, County and State of New York, said Unit being
designated and described as "Office Unit 1" in the declaration (the
"Declaration") establishing a plan for condominium ownership of said premises
under Article 9-B of the Real Property Law of the State of New York (the
"Condominium Act"), dated December 4, 2003, and recorded in the New York County
office of the Register of The City of New York (the "City Register's Office") on
February 3, 2004, in CRFN No. 2004000064392, and also designated as Tax Lot 1002
in Block 1313 of Section 5 of the Borough of Manhattan on the Tax Map of the
Real Property Assessment Department of the City of New York and on the Floor
Plans of said building, certified by Peter Claman, Registered Architect, on
January 29, 2004, and filed in the Real Property Assessment Department of the
City of New York on January 30, 2004 as Condominium Plan No. 1350 also filed in
the City Register's Office on February 3, 2004 in CRFN No. 2004000064393. All
capitalized terms herein which are not separately defined herein will have the
meanings given to those terms in the Declaration or in the by-laws of Beacon
Court Condominium. (Said by-laws, as the same may be amended from time to time,
are hereinafter referred to as the "By-Laws.")

      TOGETHER with an undivided 49.0559% percentage interest in the General
Common Elements (as such term is defined in the Declaration);

      TOGETHER with the appurtenances and all the estate and rights in and to
the Unit;

      TOGETHER with, and subject to, the rights, obligations, easements,
restrictions and other provisions set forth in the Declaration and the By-Laws,
all of which constitute covenants running with the Land and will bind any person
having at any time any interest or estate in (any of) the Unit, as though
recited and stipulated at length herein;

The premises within which the Unit is located is more particularly described as:

ALL that certain plot, piece or parcel of land, situate, lying and being in the
borough of Manhattan, County, City and State of New York, bounded and described
as follows:

BEGINNING at the corner formed by the intersection of the southerly side of East
59th Street and the westerly side of Third Avenue;

RUNNING THENCE southerly, along the westerly side of Third Avenue, 200'-10" to
the northerly side of East 58th Street;

THENCE westerly, along the northerly side of East 58th Street 420' to the
easterly side of Lexington Avenue;

THENCE northerly along the easterly side of Lexington Avenue, 200'-10" to the
southerly side of East 59th Street;

THENCE easterly, along the southerly side of East 59th Street, 420' to the point
or place of BEGINNING.

TOGETHER with the benefits and SUBJECT to the burdens of the easements set forth
in the deed made by Seven Thirty One Limited Partnership to 59th Street
Corporation dated as of 8/1/2001 and recorded 8/8/2001 in Reel 3339 Page 1100.

                                      A-1
<PAGE>
                                   EXHIBIT A-2

                                ((Office Unit 2)

The Condominium Unit (the "Unit") in the premises known as Beacon Court
Condominium and by the street number by the street number 151 East 58th Street,
Borough of Manhattan, City, County and State of New York, said Unit being
designated and described as "Office Unit 2" in the declaration (the
"Declaration") establishing a plan for condominium ownership of said premises
under Article 9-B of the Real Property Law of the State of New York (the
"Condominium Act"), dated December 4, 2003, and recorded in the New York County
office of the Register of The City of New York (the "City Register's Office") on
February 3, 2004, in CRFN No. 2004000064392, and also designated as Tax Lot 1003
in Block 1313 of Section 5 of the Borough of Manhattan on the Tax Map of the
Real Property Assessment Department of the City of New York and on the Floor
Plans of said building, certified by Peter Claman, Registered Architect, on
January 29, 2004, and filed in the Real Property Assessment Department of the
City of New York on January 30, 2004 as Condominium Plan No. 1350 also filed in
the City Register's Office on February 3, 2004 in CRFN No. 2004000064393. All
capitalized terms herein which are not separately defined herein will have the
meanings given to those terms in the Declaration or in the by-laws of Beacon
Court Condominium. (Said by-laws, as the same may be amended from time to time,
are hereinafter referred to as the "By-Laws.")

TOGETHER with an undivided 14.0095% percentage interest in the General Common
Elements (as such term is defined in the Declaration);

TOGETHER with the appurtenances and all the estate and rights in and to the
Unit;

TOGETHER with, and subject to, the rights, obligations, easements, restrictions
and other provisions set forth in the Declaration and the By-Laws, all of which
constitute covenants running with the Land and will bind any person having at
any time any interest or estate in (any of) the Unit, as though recited and
stipulated at length herein;

The premises within which the Unit is located is more particularly described as:

ALL that certain plot, piece or parcel of land, situate, lying and being in the
borough of Manhattan, County, City and State of New York, bounded and described
as follows:

BEGINNING at the corner formed by the intersection of the southerly side of East
59th Street and the westerly side of Third Avenue;

RUNNING THENCE southerly, along the westerly side of Third Avenue, 200'-10" to
the northerly side of East 58th Street;

THENCE westerly, along the northerly side of East 58th Street 420' to the
easterly side of Lexington Avenue;

THENCE northerly along the easterly side of Lexington Avenue, 200'-10" to the
southerly side of East 59th Street;

THENCE easterly, along the southerly side of East 59th Street, 420' to the point
or place of BEGINNING.

TOGETHER with the benefits and SUBJECT to the burdens of the easements set forth
in the deed made by Seven Thirty One Limited Partnership to 59th Street
Corporation dated as of 8/1/2001 and recorded 8/8/2001 in Reel 3339 Page 1100.

                                      A-2
<PAGE>
                                   SCHEDULE 1

                                 EXISTING NOTES

1. Consolidated, Amended and Restated Supplemental Loan Note (No. 3) in the
original principal amount of $22,940,962, dated January 28, 2004, by 731
Commercial LLC and 731 Residential LLC in favor of Hypo Real Estate Capital
Corporation.

2. Consolidated, Amended and Restated Project Loan Note (No. 3) in the original
principal amount of $15,587,546, dated January 28, 2004, by 731 Commercial LLC
and 731 Residential LLC in favor of Hypo Real Estate Capital Corporation.

3. Substitute Subordinate Building Loan Note in the original principal amount of
$125,000,000, dated February __, 2004, by 731 Commercial LLC and 731 Residential
LLC in favor of Hypo Real Estate Capital Corporation.

4. Substitute Mortgage Note C (No. 3) in the original principal amount of
$236,471,492, dated January 28, 2004, by 731 Commercial LLC and 731 Residential
LLC in favor of Hypo Real Estate Capital Corporation.

                                  Schedule 1-1
<PAGE>
                                   SCHEDULE 2

                                MORTGAGE SCHEDULE

      1. Mortgage, Assignment of Leases and Security Agreement made by Seven
      Thirty One Limited Partnership and Alexander's Department Stores of
      Lexington Avenue, Inc. to First Fidelity Bank (NA) in the amount of
      $30,000,000.00, dated as of 3/15/1995 and recorded on 3/20/1995 in Reel
      2192 Page 1291, which mortgage was modified by virtue of a Mortgage
      Modification and Extension Agreement made between Seven Thirty One Limited
      Partnership and Alexander's Department Stores of Lexington Avenue, Inc.
      and First Union National Bank (formerly known as Fidelity Bank, N.A.)
      dated as of 3/15/1998 and recorded on 2/16/1999 in Reel 2819 Page 1988;
      which Mortgage was modified and severed by that certain Note and Mortgage
      Modification and Severance Agreement made between Alexander's of Fordham
      Road Inc., Alexander's of Third Avenue Inc., Alexander's Rego Park Center,
      Inc. Alexander's of Rego Park II, Inc., Alexander's of Rego Park III,
      Inc., Seven Thirty One Limited Partnership, Alexander's Department Stores
      of Lexington Avenue, Inc., Alexander's of Brooklyn, Inc., Alexander's
      Department Stores of New Jersey Inc. and First Union National Bank
      (formerly known as Fidelity Bank, National Association) dated as of
      6/18/1998 and recorded on 9/10/1998 in Reel 2703 Page 1797, which
      Agreement severed Mortgage No. 1 into two separate liens as follows:

            Substitute Note A in the amount of $10,000,000.00, which was secured
            by a Mortgage on premises in Kings County only (does not affect
            premises insured herein) and

            Substitute Note B in the area of $20,000,000.00, secured by Mortgage
      No. 1 above, and which Mortgage was modified by virtue of Mortgage
      Modification and Extension Agreement made by Alexander's of Fordham Road
      Inc., Alexander's Inc., Alexander's of Third Avenue Inc., Alexander's Rego
      Park Center, Inc. Alexander's of Rego Park II, Inc., Alexander's of Rego
      Park III, Inc., Seven Thirty One Limited Partnership, Alexander's
      Department Stores of Lexington Avenue, Inc., Alexander's of Brooklyn,
      Inc., Alexander's Department Stores of New Jersey Inc. and First Union
      National Bank (formerly known as Fidelity Bank, National Association)
      dated as of 3/29/1999 and recorded on 4/20/1999 in Reel 2859 Page 174, and
      which Mortgage was further modified by virtue of a Mortgage Modification
      and Extension Agreement made between Alexander's of Fordham Road Inc.,
      Alexander's Inc., Alexander's of Third Avenue Inc., Alexander's of Rego
      Park II, Inc., Alexander's of Rego Park III, Inc., Seven Thirty One
      Limited Partnership, Alexander's Department Stores of Lexington Avenue,
      Inc., Alexander's Department Stores of New Jersey Inc. and First Union
      National Bank (formerly known as Fidelity Bank, National Association)
      dated as of 4/14/2000 and recorded on 4/3/2001 in Reel 3265 Page 1882, and
      which Mortgage was further modified by a Mortgage Modification and
      Extension Agreement made between Alexander's Inc., Alexander's of Third
      Avenue Inc., Alexander's of Rego Park II, Inc., Alexander's of Rego Park
      III,

                                  Schedule 2-1
<PAGE>
      Inc., Seven Thirty One Limited Partnership, Alexander's Department Stores
      of Lexington Avenue, Inc., Alexander's Department Stores of New Jersey
      Inc. and First Union National Bank (formerly known as Fidelity Bank,
      National Association) dated as of 4/27/2001 and recorded on 5/21/2001 in
      Reel 3291 Page 1269, and which Mortgage was further modified by a Mortgage
      Modification and Extension Agreement made between Alexander's Inc.,
      Alexander's of Third Avenue Inc., Alexander's of Rego Park II, Inc.,
      Alexander's of Rego Park III, Inc., Seven Thirty One Limited Partnership,
      Alexander's Department Stores of Lexington Avenue, Inc., 59th Street
      Corporation and First Union National Bank (formerly known as Fidelity
      Bank, National Association) dated as of 3/15/2002 and recorded on
      6/24/2002 in Reel 3545 Page 2045, which Mortgage was assigned by
      Assignment of Mortgage made by Wachovia Bank, National Association (f/k/a
      First Union National Bank, f/k/a as Fidelity Bank, National Association)
      to Bayerische Hypo-Und Vereinsbank, AG, New York Branch as Agent, dated
      6/24/2002 and recorded on 9/25/2002 in Reel 3617 Page 2001.

      2. Mortgage made by Seven Thirty One Limited Partnership and Alexander's
      Department Stores of Lexington Avenue, Inc. to Vornado Lending Corp. in
      the amount of $45,000,000.00, dated as of 3/15/1995 and recorded on
      3/20/1995 in Reel 2193 Page 966, which Mortgage was modified by Mortgage
      Modification and Extension Agreement made between Seven Thirty One Limited
      Partnership and Alexander's Department Stores of Lexington Avenue, Inc.
      and Vornado Lending LLC (formerly known as Vornado Lending Corp.), dated
      as of 3/15/1998 and recorded on 2/16/1999 in Reel 2819 Page 1998, and
      which Mortgage was further modified by a Second Mortgage Modification and
      Extension Agreement made between Seven Thirty One Limited Partnership and
      Alexander's Department Stores of Lexington Avenue, Inc. and Vornado
      Lending LLC (formerly known as Vornado Lending Corp.), dated as of
      3/29/1999 and recorded on 4/20/1999 in Reel 2859 Page 251, and which
      Mortgage was further modified by a Third Mortgage Modification and
      Extension Agreement made between Seven Thirty One Limited Partnership and
      Alexander's Department Stores of Lexington Avenue, Inc. and Vornado
      Lending LLC (formerly known as Vornado Lending Corp.), dated as of
      3/15/2000 and recorded on 1/11/2001 in Reel 3220 Page 2176, and which
      Mortgage was assigned by Assignment of Mortgage made by Vornado Lending
      LLC (formerly known as Vornado Lending Corp.),to Bayerische Hypo-Und
      Vereinsbank, AG, New York Branch as Agent, dated 6/24/2002 and recorded on
      9/25/2002 in Reel 3617 Page 2007.

      3. Gap Mortgage made by 731 Commercial LLC and 731 Residential LLC to
      Bayerische Hypo-Und Vereinsbank, AG, New York Branch as Agent, in the sum
      of $500,000.00 dated 7/3/2002 and recorded on 9/25/2002 in Reel 3617 Page
      2013, which Mortgage was consolidated with Mortgages 1 and 2 to form a
      single lien of $55,500,000.00 by virtue of a Consolidated, Amended and
      Restated Building Loan Mortgage, Assignment of Leases and Rents and
      Security Agreement (Series No. 1) made by 731 Commercial LLC and 731
      Residential

                                  Schedule 2-2
<PAGE>
      LLC to Bayerische Hypo-Und Vereinsbank, AG, New York Branch as Agent,
      dated 7/3/2002 and recorded on 9/25/2002 in Reel 3617 Page 2024.

      4. Mortgage made by 731 Commercial LLC and 731 Residential LLC to
      Bayerische Hypo-Und Vereinsbank, AG, New York Branch as Agent, in the
      amount of $159,500,000.00 dated as of 3/5/2003 and recorded on 5/1/2003
      under CRFN 2003000112521, which Mortgage was consolidated with Mortgages
      1, 2 and 3 above to form a single lien of $215,000,000.00 by virtue of a
      Consolidated, Amended and Restated Building Loan Mortgage, Assignment of
      Leases and Rents and Security Agreement made by 731 Commercial LLC and 731
      Residential LLC and Bayerische Hypo-Und Vereinsbank, AG, New York Branch
      as Agent, dated as of 3/5/2003 and recorded on 5/1/2003 under CRFN
      20030001132522, which Mortgage was severed by Note and Mortgage
      Modification and Severance Agreement dated February __, 2004 made by and
      between 731 Commercial LLC, 731 Residential LLC and Hypo Real Estate
      Capital Corporation and being tendered for recording with said Register's
      Office, which severs and splits said Mortgage into 2 liens as follows:

      $90,000,000.00, which does not affect the premises herein and

      $125,000,000.00 affecting the premises herein as evidenced by that certain
      Substitute Subordinate Building Loan Mortgage dated as of February __,
      2004 by and between 731 Commercial LLC and 731 Residential LLC and Hypo
      Real Estate Capital Corporation, and being tendered for recording with
      said Register's Office, which was assigned by Assignment of Substitute
      Subordinate Building Loan Mortgage dated February __, 2004, from Hypo Real
      Estate Capital Corporation to German American Capital Corporation, and
      being tendered for recording with said Register's Office.

      5. Substitute Supplemental Loan Mortgage, Assignment of Leases and Rents
      and Security Agreement (No. 1) made by 731 Commercial LLC and 731
      Residential LLC to Bayerische Hypo-Und Vereinsbank, AG, New York Branch as
      lender (Hypo #1) in the amount of $2,265,962.00, dated as of 11/26/2003
      and being tendered for recording with the Office of the City Register, New
      York County, which Mortgage was created by the Note and Mortgage
      Modification and Severance Agreement (No. 1) dated as of 11/26/2003 and
      being tendered for recording with said Register's Office, which Mortgage
      was assigned by virtue of an Assignment of Mortgage made by Bayerische
      Hypo-Und Vereinsbank, AG, New York Branch as lender (Hypo #1) to
      Bayerische Hypo-Und Vereinsbank, AG, New York Branch as agent for itself
      and other co-lenders, dated as of 11/26/2003 and being tendered for
      recording with said Register's Office, which Mortgage was modified by an
      Amended and Restated Supplemental Loan Mortgage, Assignment of Leases and
      Rents and Security Agreement (No. 1) made between 731 Commercial LLC and
      731 Residential LLC and Bayerische Hypo-Und Vereinsbank, AG, New York
      Branch as agent for itself and other co-lenders, dated as of 11/26/2003
      and being tendered for recording with said Register's

                                  Schedule 2-3
<PAGE>
      Office, and which Mortgage was assigned by a certain Assignment of
      Mortgage made by Bayerische Hypo-Und Vereinsbank, AG, New York Branch as
      agent to Hypo Real Estate Capital Corporation, dated as of 12/4/2003 and
      being tendered for recording with said Register's Office.

      6. Substitute Supplemental Loan Mortgage, Assignment of Leases and Rents
      and Security Agreement (No. 2) made by 731 Commercial LLC and 731
      Residential LLC to Hypo Real Estate Capital Corporation, as agent, in the
      amount of $9,375,000.00 dated as of 12/29/2003 and being tendered for
      recording with said Register's Office which Mortgage was created by the
      Note and Mortgage Modification and Severance Agreement (No. 2) dated as of
      12/29/2003 and being tendered for recording with said Register's Office,
      which Mortgage was consolidated with Mortgage 5 above to form a single
      lien of $11,640,962.00 by virtue of a Consolidated, Amended and Restated
      Supplemental Loan Mortgage, Assignment of Leases and Rents and Security
      Agreement (No. 2) made between 731 Commercial LLC and 731 Residential LLC
      and Hypo Real Estate Capital Corporation, as agent, dated as of 12/29/2003
      and being tendered for recording with said Register's Office.

      7. Substitute Supplemental Loan Mortgage, Assignment of Leases and Rents
      and Security Agreement (No. 3) made by 731 Commercial LLC and 731
      Residential LLC to Hypo Real Estate Capital Corporation, as agent, in the
      amount of $11,300,000.00 dated as of 1/28/2004 and being tendered for
      recording with said Register's Office, which Mortgage was created by the
      Note and Mortgage Modification and Severance Agreement (No. 3) dated as of
      1/28/2004 and being tendered for recording with said Register's Office,
      which Mortgage was consolidated with Mortgages 5 and 6 to form a single
      lien of $22,940,962.00 by virtue of Consolidated, Amended and Restated
      Supplemental Loan Mortgage, Assignment of Leases and Rents and Security
      Agreement (No. 3) made by 731 Commercial LLC and 731 Residential LLC and
      Hypo Real Estate Capital Corporation, as agent, dated as of 1/28/2004 and
      being tendered for recording with said Register's Office, which Mortgage
      was assigned by virtue of an Assignment of Consolidated, Amended and
      Restated Supplemental Loan Mortgage, Assignment of Leases and Rents and
      Security Agreement (No. 3) made by Hypo Real Estate Capital Corporation,
      as agent, to German American Capital Corporation dated as of February __,
      2004 and to be recorded in the Office of the City Register, New York
      County.

      8. Project Loan Mortgage, Assignment of Leases and Rents and Security
      Agreement made by 731 Commercial LLC and 731 Residential LLC to Bayerische
      Hypo-Und Vereinsbank, AG, New York Branch, in the amount of $10,000,000.00
      dated as of 3/5/2003 and recorded on 5/1/2003 under CRFN 2003000112524.

      9. Substitute Project Loan Mortgage, Assignment of Leases and Rents and
      Security Agreement (No. 1) made by 731 Commercial LLC and 731 Residential

                                  Schedule 2-4
<PAGE>
      LLC to Bayerische Hypo-Und Vereinsbank, AG, New York Branch, in the amount
      of $702,546.00 dated as of 11/26/2003 and being tendered for recording
      with said Register's Office which Mortgage was created by the Note and
      Mortgage Modification and Severance Agreement (No. 1) dated as of
      11/26/2003 and being tendered for recording with said Register's Office,
      which Mortgage was assigned by virtue of an Assignment of Mortgage made by
      Bayerische Hypo-Und Vereinsbank, AG, New York Branch, to Bayerische
      Hypo-Und Vereinsbank, AG, New York Branch, as agent, dated as of
      11/26/2003 and being tendered for recording with said Register's Office,
      which Mortgage was consolidated with Mortgage 8 above to form a single
      lien of $10,702,546.00, which Mortgage was assigned by virtue of an
      Consolidated, Amended and Restated Project Loan Mortgage, Assignment of
      Leases and Rents and Security Agreement made between 731 Commercial LLC
      and 731 Residential LLC and Bayerische Hypo-Und Vereinsbank, AG, New York
      Branch, as agent, dated as of 11/26/2003 and being tendered for recording
      with said Register's Office, which Mortgages were assigned by virtue of an
      Assignment of Mortgage made by Bayerische Hypo-Und Vereinsbank, AG, New
      York Branch, as agent, to Hypo Real Estate Capital Corporation, dated as
      of 12/4/2003 and being tendered for recording with said Register's Office.

      10. Substitute Project Loan Mortgage, Assignment of Leases and Rents and
      Security Agreement (No. 2) made by 731 Commercial LLC and 731 Residential
      LLC to Hypo Real Estate Capital Corporation, in the amount of
      $3,555,000.00, dated as of 12/29/2003 and being tendered for recording
      with said Register's Office, which Mortgage was created by the Note and
      Mortgage Modification and Severance Agreement (No. 2) dated as of
      12/29/2003 and being tendered for recording with said Register's Office,
      which Mortgage was assigned by virtue of an Assignment of Mortgage made by
      Hypo Real Estate Capital Corporation to Hypo Real Estate Capital
      Corporation, as agent, dated as of 12/29/2003 and being tendered for
      recording with said Register's Office, which Mortgage was consolidated
      with Mortgages 8 and 9 above to form a single lien of $14,257,546.00 by
      virtue of a Consolidated, Amended and Restated Supplemental Loan Mortgage,
      Assignment of Leases and Rents and Security Agreement (No. 2) made between
      731 Commercial LLC and 731 Residential LLC and Hypo Real Estate Capital
      Corporation, as agent, dated as of 12/29/2003 and being tendered for
      recording with said Register's Office.

      11. Substitute Project Loan Mortgage, Assignment of Leases and Rents and
      Security Agreement (No. 3) made by 731 Commercial LLC and 731 Residential
      LLC to Hypo Real Estate Capital Corporation, in the amount of
      $1,330,000.00 dated as of 1/28/2004 and being tendered for recording with
      said Register's Office, which Mortgage was created by the Note and
      Mortgage Modification and Severance Agreement (No. 3) dated as of
      1/28/2004 and being tendered for recording with said Register's Office,
      which Mortgage was assigned by virtue of an Assignment of Mortgage made by
      Hypo Real Estate Capital Corporation to Hypo Real Estate Capital
      Corporation, as agent, dated as of 12/29/2003 and being

                                  Schedule 2-5
<PAGE>
      tendered for recording with said Register's Office, which Mortgage was
      consolidated with Mortgages 8, 9 and 10 to form a single lien of
      $15,587,546.00 by virtue of a Consolidated, Amended and Restated Project
      Loan Mortgage, Assignment of Leases and Rents and Security Agreement (No.
      3) made between 731 Commercial LLC and 731 Residential LLC and Hypo Real
      Estate Capital Corporation, as agent, dated as of 1/28/2004 and being
      tendered for recording with said Register's Office, which Mortgage is
      being assigned by Assignment of Consolidated, Amended and Restated Project
      Loan Mortgage dated February __, 2004 from Hypo Real Estate Capital
      Corporation, as agent, to German American Capital Corporation, and being
      tendered for recording with said Register's Office.

      12. Substitute Mortgage, Assignment of Leases and Rents and Security
      Agreement C (No. 3) made by 731 Commercial LLC and 731 Residential LLC to
      Hypo Real Estate Capital Corporation, in the amount of $236,471,492.00
      dated as of 1/28/2004 and being tendered for recording with said
      Register's Office, which Mortgage was assigned by virtue of an Assignment
      of Mortgage made by Hypo Real Estate Capital Corporation, to German
      American Capital Corporation dated as of February __, 2004 and being
      tendered for recording in said Register's Office, which Mortgage was
      consolidated with Mortgages 1 through 11 to form a single lien of
      $400,000,000.00 by Amended, Restated and Consolidate Mortgage, Security
      Agreement, Financing Statement and Assignment of Leases, Rents and
      Security Deposits dated February __, 2004 made by 731 Office One LLC and
      German American Capital Corporation and being tendered for recording with
      said Register's Office.

                                  Schedule 2-6

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